PART 17 – SPECIAL CONTRACTING

METHODS

SUBPART 17.1 – MULTIYEAR CONTRACTING

17.170 General.

SUBPART 17.2 – OPTIONS

17.204 Contracts.

17.206 Evaluation.

17.207 Exercise of options.

SUBPART 17.5 –INTERAGENCY ACQUISITIONS

17.500 Scope of subpart.

17.505 Contracting officer review.

17.590 Follow–up procedures for non–Economy Act transactions.

SUBPART 17.74 – UNDEFINITIZED CONTRACT ACTIONS

17.7404 Limitations.

17.7405 Plans and reports.

SUBPART 17.75 – ACQUISITION OF REPLENISHMENT PARTS

17.7505 Limitations on price increases.

SUBPART 17.91 – USE OF PUBLIC MANUFACTURERS

17.9100 Public (organic) manufacturing.

SUBPART 17.92 – REOPENER REQUIREMENTS

17.9201 General.

17.9202 Policy.

17.9204 Reopener requirements.

SUBPART 17.93 – SURGE AND SUSTAINMENT (S&S)

17.9300 Scope.

17.9301 Definitions.

17.9302 Policy.
17.9303 Procedures.

17.9304 Description/specifications, instructions to offerors, and evaluation factors.

17.9305 Warstopper Program Material Buffer Availability.

SUBPART 17.95 – TAILORED LOGISTICS SUPPORT CONTRACTING

17.9500 Scope of subpart.

17.9501 Definitions.

17.9502 General.

17.9503 Pricing.

17.9504 Post award actions and management oversight.

SUBPART 17.1 – MULTIYEAR CONTRACTING

(Revised February 17, 2017 through PROCLTR 2017-10)

17.170 General.

(c) HCAs are delegated authority to enter into a multiyear contract for services and supplies; and

may delegate this authority, without power of redelegation, to the CCO. The DLA Energy HCA is

delegated authority to enter into a multiyear contract for services pursuant to DFARS 217.174, with

redelegation permissible to the CCO only.

(d)(4) HCAs must submit notification to the DLA Acquisition Operations Division at least 60 days

before awarding a multiyear contract.

SUBPART 17.2 – OPTIONS

(Revised February 17, 2017 through PROCLTR 2017-10)

17.204 Contracts.

(e)(1) HCAs are authorized to approve use of contracts exceeding 5 years and up to 10 years

(including base and options), provided no statutory restriction limits the term of the contract or

specifically authorizes a longer duration. Include the HCA signed approval memorandum in the

contract file.

(2) Submit requests for an ordering period in excess of 10 years to the DLA Acquisition Operations

Division for SPE approval.
17.206 Evaluation.

(b) The determination not to evaluate an option prior to contract award (or definitization, if an

undefinitized contract) must be in the contract file. Unevaluated options must not be used except in

unusual circumstances.

17.207 Exercise of options.

(c)(7) The contracting officer must ensure the contractor’s compliance with small business

subcontract plan requirements are in the contract. Request DCMA small business office assistance

for evaluation.

(d)(2) The contracting officer must include actual demands in informal option price analysis.

(S-90) Contracting officers may elect to issue solicitations with guaranteed minimum (GM) quantities

for any option periods. GMs are not required for option periods. Contracting officers should only

consider offering GMs for option periods if expected to increase competition, result in better price

and/or there are special circumstances indicating it is in the best interest of the Government to do

so. If option period GMs are used, contracting officers shall only record an obligation for a GM for

the period of performance of an option at the time each option is exercised.

SUBPART 17.5 –INTERAGENCY ACQUISITIONS

(Revised February 17, 2017 through PROCLTR 2017-10)

17.500 Scope of subpart.

Follow the procedures in DLAM 4010.01, Outbound Military Interdepartmental Purchase Request

(MIPR) for Service Orders (

https://hqc.dla.mil/stewardship/Documents/DLA_Manual_Outbound_MIPR_%20Procedures_Final.pdf

).

17.505 Contracting officer review.

(a) DoD policy requires DoD warranted contracting officer review of all non-Economy Act orders

over $500,000. DLA policy requires that a DLA warranted contracting officer review the assisted

acquisition from a non-DoD entity of either supplies or services valued over the SAT. This review

must be accomplished prior to sending the order to the funds certifier or issuing the military interdepartmental purchase request (MIPR) to the non-DoD activity. If the requesting official is different

from the contracting officer, the requesting official must also review the acquisition package to

ensure compliance with FAR, and DFARS. Contracting officers must not split requirements into

smaller amounts in order to avoid contracting officer review.
17.590 Follow–up procedures for non–Economy Act transactions.

(a) The DLA contracting officer must ensure, in both assisted and direct acquisitions, that the

requesting official has established a satisfactory quality surveillance plan for non-Economy Act

orders in excess of $100,000 to facilitate the oversight of the goods provided or services performed

by the performing agency. If DLA is making a direct or assisted acquisition on behalf of a customer

activity, the DLA contracting officer must ensure that the requestor produces this plan. The plan

must include:

(1) Contract administration oversight in accordance with the surveillance plan;

(2) A process for receipt and review of receiving reports and invoices from the performing

agency/contractor;

(3) Reconciliation of receiving reports and invoices; and

(4) Requirements for documenting acceptance of the goods received or services performed.

(b) The requesting official (i.e. the customer or program manager, with the assistance of the DLA

contracting officer or post-award contracting official, as appropriate) must—

(1) Monitor balances with the performing agency;

(2) Conduct tri-annual reviews of non-Economy Act orders in accordance with the Financial

Management Regulation, Volume 3, Chapter 8, Section 0804, “Tri-Annual Review of Commitments

and Obligations,” in conjunction with the Financial Management/J8 organization;

(3) Confirm open balances with the performing agency;

(4) Coordinate the return of funds from the non-DOD performing agency; and

(5) Coordinate with the accounting office to ensure timely deobligation of funds.

(c) In assisted acquisitions, payment must be made promptly upon the written request or billing of

the performing agency/contractor. In assisted acquisitions and under specific conditions, payment to

the performing agency may be made in advance or upon delivery of the supplies or services ordered,

and must be for any part of the estimated or actual cost, as determined by the performing agency.

(1) The requesting official and supporting DLA contracting or program office must be cognizant of

the performing agency’s payment method. Should the performing agency elect to receive advances

or conduct advance billing prior to providing goods or services, the requesting official and/or DLA

contracting or program office, as appropriate, must comply with the requirements pertaining to

advances of public money outlined in Volume 4, Chapter 5 of the “DOD Financial Management

Regulation,” which implements the general prohibition against advance payments contained in 31

U.S.C. 3324 and 10 U.S.C. 2307. When the conditions under which the advance was made are

satisfied, the specific appropriation or law authorizing the advance must be cited on the order, and

any unused amounts of the advance must be collected from the performing agency immediately and

returned to the fund from which originally made.

(2) Payments made for services rendered or supplies furnished may be credited to the appropriation

or fund of the agency performing the reimbursable work.
(d) All non-Economy Act orders must be reviewed by the requesting official to determine if they are

complete. Completed orders must be fiscally closed out. The requesting official (or DLA contracting

or program office, as appropriate) must reconcile funds and coordinate the return of excess or

expired funds held by the performing agency. This review must include:

(1) Determination and identification, if applicable, of any outstanding invoices;

(2) Determination and identification of existence of excess or expired funds;

(3) Coordination of return of funds from the non-DOD performing agency; and

(4) Coordination with the accounting office to ensure the deobligation of funds.

SUBPART 17.74 – UNDEFINITIZED CONTRACT ACTIONS

(Revised August 14, 2019 through PROCLTR 2019-18)

17.7404 Limitations.

(a) The CCO must—

(1) Monitor the procuring organization’s usage of UCAs for conformance with the DLAD and higherlevel regulatory requirements; and

(2) Ensure UCAs are correctly coded in FPDS-NG.

17.7405 Plans and reports.

(b) Procuring organizations shall submit monthly UCA reports to the DLA Compliance, Policy and

Pricing Division by the 20th of each month. The DLA Compliance, Policy and Pricing Division will

consolidate the monthly reports from each procuring organization and submit the semi-annual

reports to the Office of the Director, Defense Pricing and Contracting.

SUBPART 17.75 – ACQUISITION OF REPLENISHMENT

PARTS

(Revised October 1 3 , 20 20 through PROCLTR 20 20-20 )

17.7505 Limitations on price increases.

(a)(1) The prior price may reflect a unit price paid or a price that has never been paid, because the

item may have never been ordered on any contract vehicle. If the replenishment part was priced and

placed on a long term contract (LTC), but no orders were issued for the item prior to any scheduled

contract price adjustment, the contracting officer shall use the current effective LTC price as the
basis for comparison to any proposed adjusted LTC price to determine if there has been an increase

of 25% or more over the most recent 12-month period. (2) The threshold percentage increase for

procurements valued under the micro-purchase threshold is 51 percent.

(b) The contracting officer shall notify the HCA by email and retain the message in the contract file.

HCAs may delegate receipt of the email notification to the CCO, Director of Procurement Process

Support, Pricing Office, or other like designee in the HCA’s support area; but shall not delegate

receipt to any individual within the contracting officer’s chain of command below the CCO.

SUBPART 17.91 – USE OF PUBLIC MANUFACTURERS

(Revised February 17, 2017 through PROCLTR 2017-10)

17.9100 Public (organic) manufacturing.

Follow the procedures in DLAI 4140.18, Organic Manufacturing (OM) (

https://issuances.dla.mil/Published_Issuances/Organic%20Manufacturing%20(OM).pdf) .

SUBPART 17.92 – REOPENER REQUIREMENTS

(Revised February 17, 2017 through PROCLTR 2017-10)

17.9201 General.

(a) A reopener requirement creates a right for an equitable adjustment in the contract price at a

specified time or due to the occurrence or non-occurrence of an event or contingency of the type

specified in FAR 31.205-7(c)(2).

(b) A reopener requirement provides a means of achieving an equitable resolution of the treatment

of a significant contingent cost during both the initial pricing of a contract as well as at any time an

equitable adjustment to such price is called for under the provisions of the requirement. Its use

requires care to avoid a shift in risk from the contractor to the Government. It should be used only in

extraordinary circumstances involving high dollar value procurements and rarely less than the TINA

threshold where the uncertainty associated with particular cost element(s) substantially impacts the

contract price.

(c) Circumstances in which its use may be appropriate include, but are not limited to, the following:

(1) A forward pricing rate agreement (FPRA) or forward pricing rate recommendation (FPRR) is not

achievable, because of uncertainties having a significant impact such as:

(i) Supporting contractor budgetary data was not submitted;

(ii) A substantial portion of the business base has not yet materialized; or,

(iii) A potential for purchase, merger, or sale of part of a contractor’s operations exists.
(2) The price impact of a change in a requirement, term, or condition made during negotiations is

significant but cannot be reasonably quantified and resolved prior to award.

(3) The offeror’s estimating system contains significant deficiencies (DFARS 215.811-70(g)(2)(vi) and

(3)).

17.9202 Policy.

(a) The contracting officer must document that the use of a reopener requirement is the most

appropriate means of overcoming a contingency that will significantly affect the contract price.

(b) The contracting officer must—

(1) Ask the ACO to provide a recommended reopener requirement, if applicable.

(2) Query CBAR and the ACO, regarding the adequacy of the contractor’s accounting system to

provide all necessary cost data in the form required to price adjustments. (Obtain a review of the

adequacy of the accounting system if necessary.

(3) Obtain cost or pricing data applicable to the cost element and markup factors, to establish the

base level from which adjustment will be made.

(4) Prepare proposed schedule for each affected CLIN, which identifies each specific rate, factor,

element of cost, profit, etc., to be covered by the reopener requirement; and explicitly describes or

provides an example of the precise methodology to be used to calculate any resulting price

adjustment. Consider whether it is appropriate to retroactively apply a price, as subsequently

finalized, to items already delivered on time and to late deliveries.

(5) If the reopener provides for an upward adjustment, advise the budget office to commit funds over

and above the contract price to the amount of the ceiling established. If the award is funded by a

Military Inter-Departmental Purchase Request, obtain confirmation from the requiring activity that

funds have been set aside to cover the potential increase.

(6) Obtain HCA approval of the reopener requirement prior to conclusion of negotiations. The

approval includes basis and limitations for use.

(7) Incorporate amounts and methods reached through preaward discussions or negotiations with

the contractor in a document executed by both parties and attached to the PNM; or incorporate

calculations supporting the contracting officer’s interpretation of negotiations in the PNM. Ensure

confidential contractor information is not included in the contract.

(8) Indicate in a contract administration delegation letter if the award contains a reopener

requirement. Advise the ACO of any awards retained for administration that will be affected by a

prospective forward pricing rate agreement (FPRA) or forward pricing rate recommendation (FPRR).

17.9204 Reopener requirements.

The contracting officer must, at a minimum, include the following in a reopener requirement:

(a) Title that clearly identifies it as a reopener requirement.
(b) Statement of purpose.

(c) Identification of the items, amounts, and event triggering the reopener procedure.

(d) Requirement for certified cost or pricing data, and applicability of the Disputes clause.

(e) Adjustment pricing methodology in the following order of preference:

(1) Pre-established pricing formula;

(2) If the nature of the contingency is such that its price impact can only be anticipated to fall within

a broad range of prices instead of one or several alternative price outcomes, identify the range

within which the amount for that cost element may be revised through negotiations; or

(3) If the contingency is such that its price impact cannot be anticipated to fall within a broad range,

or the original price negotiations did not involve cost or pricing data, the reopener may specify that

the parties will enter into good faith negotiations and include an option for terminating performance

within a specified number of days following receipt of written notice by either party in the event of a

failure to agree.

(f) A provision for a downward or upward adjustment as appropriate. An exception is authorized only

when necessary to achieve final agreement on price. For contracts allowing an upward adjustment

above the contract price, establish a firm, not-to-exceed ceiling, on an aggregate basis (and per unit

basis if applicable), above which no price adjustment must be made.

(g) The method of adjusting any option quantity or period prices, if any, which may result from

operation of the reopener.

(h) If the contract is not subject to the Cost Accounting Standards (FAR Part 30), the treatment of

accounting system changes that impact the price adjustment under the reopener.

(i) The contractor must confirm the award price does not include any amount for the specified

contingency except as provided for in the reopener requirement.

SUBPART 17.93 – SURGE AND SUSTAINMENT (S&S)

(Revised June 1 1 , 20 20 through PROCLTR 20 20-12 )

17.9300 Scope.

This subpart does not apply to DLA Energy. Surge and sustainment coverage for DLA Energy is in

the DLA Energy annual surge capability plan (ASCP). DLA Energy will submit the ASCP to the DLA

Acquisition Programs Division for review and approval by the DLA Acquisition Director no later than

December 31 each year or more frequently as significant changes occur.

17.9301 Definitions.

“D1-D6 schedule” means surge requirements expressed in exact quantities with a 6-month
sustainable accelerated delivery. The D1-D6 schedule is determined and obtained by using the

support planning integrated data enterprise readiness system (SPIDERS) or industrial base

management system (IBMS), or consulting the industrial specialist. The D1-D6 schedule is used

when the monthly wartime rate (MWR) cannot be applied. D1-D6 identifies the surge requirement,

including the Services’ go-to-war requirements.

“Industrial capability issue (ICI)” means a procurement issue created by the lack of industrial

capability, capacity, and/or raw or semi-finished materials with lead-time issues that impact the

ability of the supplier to deliver at the wartime rate. Mitigation of the issue requires an investment

by the Government to improve capability to deliver at the wartime rate. These investments are

funded through the Warstopper program (refer to DLA Instruction 5025.03, Industrial Capabilities

Program – Manage the Warstopper Program).

“Industrial specialist” means a Government employee within the industrial preparedness branch for

DLA Aviation, the industrial support office for DLA Land and Maritime, the industrial base planning

office in DLA Troop Support Clothing and Textiles (C&T), the industrial preparedness branch in DLA

Troop Support Construction and Equipment (C&E), the strategic material sourcing group (SMSG)

readiness division for DLA Troop Support Medical, and the industrial base planning branch for DLA

Troop Support Subsistence who performs certain technical functions within their respective

procuring organizations.

“Monthly wartime rate (MWR)” means the combined recurring requirements for all services after

offsets for peacetime DLA direct (DD) procuring organization surge capability or DLA managed war

reserve material (WRM) stocks are applied. MWR is a forecast of additional monthly demand during

wartime and is expressed in units per month. MWR is used for items with National Stock Numbers

(NSNs) and can be found in the industrial base management system (IBMS) or by consulting the

supply chain industrial specialist.

“Peacetime support issue” means a situation when DLA is unable to meet the customer’s required

delivery date for a weapon system repair part that is coded not mission capable-supply (NMCS), is a

critical item that impacts mission capability (MICAP) or prevents the loss of life/property, or cannot

be satisfied by routine fulfillment/replenishment procedures.

“Surge and sustainment (S&S)” means increased quantities and accelerated delivery rates required

to meet Military Service requisitions across a broad spectrum of contingencies. The increased

quantity and accelerated delivery rate are above and beyond the normal peacetime requirements,

and are identified as MWR, D1-D6 schedule, or a surge quantity event.

“Surge and sustainment coverage” means a combination of DLA’s ability to fill contingency

requisitions through the MWR, D1-D6 schedule, or surge quantity option within the customer’s

required delivery date (RDD) and the supplier’s ability to meet surge quantity and sustainable

accelerated delivery.

“S&S event” means the relationship between the S&S planning requirement (SSPR), the S&S actual

requirements, and S&S coverage. DLA Manual 5025.12, Industrial Capability Program – Surge and

Sustainment (S&S), Enclosure 4 provides details on surge and sustainment events (Numbered I

through VI). An event may have known surge planning requirements, may be covered for surge, and

may be needed in surge quantities during an actual contingency.

“Surge and sustainment planning requirements (S&SPR,)” or “go-to-war requirements,” are

forecasted additive monthly wartime demand requirements derived from: (1) annual submissions of

Other War Reserve Material Requirements (OWRMR) data from the Military Services; (2) analysis of
supply chain risk assessment data and subsequent collaboration with appropriate DLA customers to

define/validate additive demand during wartime; and (3) review and analysis of historical data

focused on supply items with a weapon system essentiality code (WSEC) of 1, 5, 6 or 7 and Joint

Chiefs of Staff (JCS) project coded requisitions. These requirements are the Services’ go-to-war

items for contingency operations, national emergencies, or other readiness needs, when immediate

availability of materials and speed of delivery are essential to support national security interests.

DoDI 3110.06, War Reserve Materiel Policy, and DLM 4000.25-2, Military Standard Transaction

Reporting & Accountability Procedures (MILSTRAP), require identification of these go-to-war

requirements to support national security interests of the United States.

“Surge quantity option” means an increased quantity above and beyond peacetime demands

expressed as a percentage or exact number with a sustainable accelerated delivery. This quantity is

other than the MWR or D1-D6 schedule, and used for market ready, commercial, supplier partnumbered items (e.g., cataloged commercial items under a prime supplier arrangement) to support

increased demands during contingency operations, national emergencies, or other readiness needs.

Surge quantity option is calculated using appropriate demand data through market research, or

determined by consulting the industrial specialist.

“Unsupported item issue (UII)” means surge requirements that cannot be met through peacetime

inventory, normal peacetime contracting, alternative contract strategies, or a successful resolution

using investment to an industrial capability issue (ICI). DLA is required to report a UII to the

services for inclusion into their war reserve planning, such as when an investment to resolve an ICI

exceeds cost of a Government “buy and hold” solution, or when stocking the item is counter to DoD

war reserve policy.

17.9302 Policy.

(a) The primary mission of DLA is to support the warfighter in peacetime and wartime, to include

smaller contingencies. The ability to surge, or ramp up quickly, and to sustain replenishment of

wartime consumable items at an increased pace is critical to the execution of U.S. military strategy.

The continuing emphasis by both DLA and suppliers to reduce inventory levels and DLA’s plan to

rely on industrial capability directly impacts surge and sustainment coverage. S&S capability is a

primary consideration in all acquisition strategies and resource investments.

(b) Include surge and sustainment planning requirements (S&SPR) in solicitations for indefinitedelivery term contracts for wartime critical materials. Acquisition planning must identify the most

effective contract vehicle to ensure surge and sustainment coverage for surge events identified.

Contracting officers must ensure go-to-war items identified during acquisition planning are included

in solicitations for indefinite-delivery contracts, modifications adding items to a contract, or during

option exercise.

(c) Contracts and orders with mandatory sources under FAR 8.002(a), including General Services

Administration Federal Supply Schedules and AbilityOne, must comply with this policy in

solicitations and resulting contracts.

17.9303 Procedures.

(a) Contracting officers must include consideration of surge and sustainment in acquisition plans

and state if it will be used as an evaluation factor. Detailed procedures on tasks and responsibilities
for the contracting officer and industrial specialist can be found in DLAM 5025.12, Industrial

Capability Program Surge and Sustainment (S&S).

(b) When S&S is determined applicable, the contracting officer must incorporate the approved CAP

and exit strategy in the contract. As applicable, identify the amount of the approved Government

investment and explicit language regarding limited use of the investment. When Fragility and

Criticality (FaC) is determined applicable for non-covered surge items, the contracting officer must

include FaC in acquisition plans. Detailed procedures on tasks and responsibilities for the

contracting officer and industrial specialist can be found in.

DLAI 5025.04, Industrial Capability Program - Industrial Base Health Fragility and Criticality Policy (

https://issue-p.dla.mil/Published_Issuances/DLAI%205025.04,%20ICP%20-%20Fragility%20and%20

Criticality%20(FaC)%20Policy.pdf ).

(c) The contracting officer coordinates any adjustments or changes to the surge coverage with the

industrial specialist.

(d) Contracting officers must use the applicable system and/or applications:

(1) Surge and Sustainment Database found within the Industrial Base Management System (IBMS) (

https://www.jccs.gov/SSDB/IBMS/Home.aspx ) .

(2) Reserved.

(3) DLA Troop Support Medical Master (DMM) Online Catalog ( https://www.medical.dla.mil/Portal/

).

17.9304 Description/specifications, instructions to offerors, and evaluation

factors.

(a) Solicitations and contracts must include procurement note C06 when MWR, D1-D6, or surge

quantity option applies:

*****

C06 Surge and Sustainment (S&S) Requirements (FEB 2017)

(1) Definitions.

“Surge and sustainment (S&S)” means increased quantities and accelerated delivery rates required

to meet Military Service requisitions across a broad spectrum of contingencies. The increased

quantity and accelerated delivery rate are above and beyond the normal peacetime requirements.

S&S quantities are identified as MWR, D1-D6 schedule, or a surge quantity event.

“Capability Assessment Plan (CAP)” means the offeror’s plan for covering S&S requirements,

identification of competing priorities for the same resources, and date when the S&S capability can

be attained. The offeror must provide the CAP as an attachment to its proposal when S&S items are

identified in the solicitation. If the offeror cannot meet S&S quantity and delivery needs, the CAP

must identify the shortfall and provide best value solutions, to include a proposed Government

investment strategy to help offset the shortfall if needed.
“Electronic CAP”or “ eCAP ” means an electronic version of the CAP that the offeror can complete

online. The web address and instructions for completing the eCAP are provided in the solicitation.

(2) The contractor must maintain its S&S capability to produce and deliver the S&S quantity

identified in Section C in accordance with the approved capability assessment plan (CAP) throughout

the contract performance period. The contractor must participate in any S&S testing and

verification requested by the Government. The contractor agrees to support S&S requirements to

the maximum extent practical prior to achieving full S&S capability required in Section C and the

CAP; and for requirements exceeding those required in Section C and the CAP but not exceeding any

applicable contract maximum quantity or contract value required in FAR 52.216-19. Changes that

negatively impact S&S capability must be reported in writing to the contracting officer within ten

(10) working days after the contractor becomes aware of the impact. The notification must include a

revised S&S CAP containing proposed corrective actions and date when the S&S capability will be

attained.

(3) The Government reserves the right to verify and test the S&S capability described in the CAP at

any time during contract performance. The Government will prepare a test and verification plan and

upon request the contractor must demonstrate its S&S capability.

(4) If requested by the Government, the contractor must be prepared to provide a plan to participate

in S&S validation and testing to verify the S&S capability described in the CAP. Participation in S&S

validation and testing will be at no additional expense to the Government, and does not justify an

equitable adjustment to the contract price. The plan must include methodology, rating criteria,

labor, materials, and time required to conduct validation and testing. S&S validation generally

entails verifying if the contractor and subcontractors have (a) sufficient equipment, facilities,

personnel, stock, pre-positioned raw materials, production capabilities, and base resources; (b)

agreements, networks, and plans for distribution (receiving, storing, packaging, and issuing); (c)

transportation services to accommodate the S&S requirements in the contract; (d) examination of

any in-house work; (e) review of the stock rotation plan; and (f) other contracts that impact the

production of added or accelerated delivery of contract quantities. The testing/verification plan is

not required to be included in the offeror’s proposal. Offerors are encouraged to consider the

possibility of the Government requesting this participation when formulating the proposal.

*****

(b) Solicitations issued by DLA Aviation, DLA Land and Maritime, and DLA Troop Support Medical,

Subsistence, Construction & Equipment (C&E), Clothing & Textile (C&T), and Industrial Hardware

(IH) must include procurement note L18 when surge requirements apply.

*****

L18 Surge and Sustainment (S&S) Requirements – Instructions to Offerors (FEB 2017)

(1) Each offeror must describe in its proposal its ability to meet the S&S accelerated delivery

specified for items critical to support the Department of Defense in conducting contingency

operations. These S&S items are identified in Section C with quantities expressed as a Monthly

Wartime Rate (MWR) or in a D1-D6 schedule. The S&S quantity and delivery requirements are in

addition to peacetime quantities. S&S requirements may be met through access to production

capability as well as contractor-owned or contractor-managed inventory or safety stocks.

(2) Each offeror must include in its basic proposal a brief description of how it will ramp up to meet

accelerated delivery and increased quantities (i.e., surge) and sustain an increased production and
delivery pace throughout the contingency (i.e., sustainment). Additionally, each offeror must provide

a separate capability assessment plan (CAP) to document its detailed technical approach for

covering S&S requirements.

(3) If the CAP recommends some type of Government investment, offerors must include their plan

for refreshing or replacing S&S material consumed to ensure a continued surge capability. The CAP

must include an exit strategy that describes the transition and ramp-down of S&S assets and any

remaining Government investment not consumed before contract expiration.

(4) Offerors must provide pricing within the electronic CAP submission for S&S requirements based

on the schedule for delivering items in the offeror’s CAP. When S&S pricing exceeds peacetime

pricing, the offeror’s proposal must include sufficient description to explain the rationale for the

additional costs associated and provide a breakdown of costs to substantiate the pricing. This

paragraph (4) does not apply to DLA Troop Support Subsistence.

*****

(c)Contracting officers will include peacetime and S&S requirements when inserting dollar figures

or quantities in FAR 52.216-19, Order Limitations.

(d) Contracting officers at DLA Aviation, DLA Land and Maritime, and DLA Troop Support

Construction & Equipment (C&E), Clothing & Textile (C&T), and Industrial Hardware (IH) shall

include procurement note L19 in solicitations if S&S requirements apply.

*****

L19 Surge and Sustainment (S&S) – Capability Assessment Plan (CAP) (JAN 2021)

Offerors shall complete the CAP electronically using the Worldwide Web Industrial Capabilities

Program (WICAP) ( https://ibms.dape.dla.mil/wicap ) website.

*****

(e) Contracting officers at DLA Troop Support Medical shall include procurement note L20 if S&S

requirements apply.

*****

L20 Surge and Sustainment (S&S) – Capability Assessment Plan (CAP) – DLA Troop Support –

Medical (JUN 2020)

Offerors shall complete the CAP electronically using the Industrial Preparedness System (IPSYS)

Industrial Capability Survey Tool through the DLA Troop Support DMM Online Directorate of

Medical Materiel, single sign-on application website atDLA Troop Support Medical Materiel DMM

Online(https://www.medical.dla.mil/WAM/Account/LogOn).

*****

(f) Solicitations issued by DLA Troop Support Subsistence must include procurement note L21 when

S&S requirements apply.

*****

L21 Surge and Sustainment (S&S) – Capability Assessment Plan (CAP) – DLA Troop Support –
Subsistence (FEB 2017)

Offerors must submit the CAP for items identified with surge requirements in Section C of the

solicitation.

The CAP must—

(1) Outline the offeror’s method of addressing the S&S requirements, whether defined as a

percentage of annual demands or by individual line items. If the S&S quantity or delivery

requirements cannot be met, the offeror must identify the shortfall and provide the best value

solutions to include a proposed strategy to offset the shortfall.

(2) Describe how the offeror will reduce peacetime production lead times by 50% to meet S&S

requirements.

(3) Provide letters of commitment or other agreements from suppliers and service providers (e.g.,

additional equipment or warehouse space) confirming they can meet S&S requirements.

(4) Provide a plan to continue operations from an alternate facility in the event the primary facility is

damaged or otherwise unable to operate at full capacity.

(5) Identify competing priorities for the same resources, and ensure that meeting surge delivery

requirements is independent of any other contracts or production requirements.

(6) Identify the lead time for providing required S&S capability.

(7) If applicable, include an exit strategy describing how to transition and ramp-down S&S assets

and any Government investment.

*****

(g) Solicitations issued by DLA Aviation, DLA Land and Maritime, and DLA Troop Support Medical,

Subsistence, Construction & Equipment (C&E), Clothing & Textile (C&T), and Industrial Hardware

(IH) must include procurement note M07 when S&S requirements apply.

*****

M07 Surge and Sustainment (S&S) Evaluation (FEB 2017)

(1) Capability Assessment Plan (CAP) Evaluation: The CAP will be reviewed and assessed for

responsiveness, completeness, and technical merit. The CAP must demonstrate (i) the offeror’s

ability to provide the full S&S quantity and meet the delivery requirements as specified in the

solicitation; (ii) the technical merits of the proposed solutions to any identified shortfalls in S&S

quantity and/or delivery requirements; and (iii) the ability to achieve the solutions without

Government investment. If the CAP includes Government investment, the evaluation includes plans

to refresh or replace S&S material and related exit strategy to ensure the Government’s continued

surge capability.

(2) S&S Past Performance History: The quality and extent of the offeror’s historical surge support

performance will be considered as part of the overall past performance evaluation. In the absence of

or in addition to historical S&S capability support, the contracting officer may consider other

relevant performance history that demonstrates the offeror’s ability to respond to and sustain higher

than normal production rates or faster than normal delivery requirements, or both.
(3) The contracting officer will include the S&S price in the overall price evaluation.

*****

(h) The contracting officer, after coordination with the industrial specialist, submits requests for

changes or exceptions to the above procurement notes to the DLA Acquisition Programs Division for

approval.

17.9305 Warstopper Program Material Buffer Availability.

Contracting officers shall include procurement note C07 in solicitations and long-term supply

contracts to notify suppliers that may be candidates to support industrial mobilization and/or

material disruptions of the potential availability of key raw materials.

*****

C07 Warstopper Program Material Buffer Availability (JAN 2021)

(1) The Warstopper Program Material Buffer (Buffer) helps decrease lead times for raw material to

support defense contracts relating to military systems with a wartime requirement. The Worldwide

Web Industrial Capabilities Program (WICAP) website ( https://ibms.dape.dla.mil/wicap ) identifies

current material buffer suppliers and materials.If buffer material is unavailable or the quantity of

material is inadequate to complete the requirement, the contractor shall contact the contracting

officer representative (COR) for guidance. When a buffer is established, the contractor shall use the

following process to submit requests for buffer material. A defense contractor (or sub-tier contractor

supporting a prime contractor) with a current, active U.S. Government contract shall submit a valid

request to use buffer material to the COR for the respective buffer material. The COR will review the

submittal and approve or disapprove the request. The contractor shall include the following

information in the request:

(a) Requestor’s name;

(b) U.S. Government contract number;

(c) Defense Priorities and Allocations System (DPAS) rating;

(d) Material specification;

(e) Quantity required;

(f) Required delivery date; and

(g) Whether there is a pre-existing supply contract with the material buffer contractor.

(2) If no prior contractual relationship exists between the contractor requesting access to the buffer

material and the material buffer contractor, the material buffer contractor is authorized to enter into

a contract to provide material from the buffer after the COR approves a valid request. The

contractor shall include this action in the monthly report submitted to the COR. When requests

exceed the buffer’s maximum monthly material availability, the material supplier may negotiate

phased delivery of material across the material monthly availability; or the Government COR may

prioritize the release of the material at the Government’s discretion.

(3) The material price for contractors accessing the material buffer is the material price identified in
any pre-existing contract with the material buffer contractor. The material price for contractors with

no pre-existing contract with the material buffer contractor is the standard (not spot market levels)

pricing for the material. Contractors using the buffer are solely responsible for costs of using the

buffer, and the Government has no liability either for these costs or for delays or other effects

arising from the use of the buffer.

(4) The buffer material provided is not Government furnished material, but is a normal vendor-tovendor transaction with all applicable warranties and guarantees provided through the commercial

transaction.

*****

(a) Solicitations and contracts must include procurement note C06 when MWR, D1-D6, or surge

quantity option applies:

*****

C06 Surge and Sustainment (S&S) Requirements (FEB 2017)

(1) Definitions.

“Surge and sustainment (S&S)” means increased quantities and accelerated delivery rates required

to meet Military Service requisitions across a broad spectrum of contingencies. The increased

quantity and accelerated delivery rate are above and beyond the normal peacetime requirements.

S&S quantities are identified as MWR, D1-D6 schedule, or a surge quantity event.

“Capability Assessment Plan (CAP)” means the offeror’s plan for covering S&S requirements,

identification of competing priorities for the same resources, and date when the S&S capability can

be attained. The offeror must provide the CAP as an attachment to its proposal when S&S items are

identified in the solicitation. If the offeror cannot meet S&S quantity and delivery needs, the CAP

must identify the shortfall and provide best value solutions, to include a proposed Government

investment strategy to help offset the shortfall if needed.

“Electronic CAP”or “ eCAP ” means an electronic version of the CAP that the offeror can complete

online. The web address and instructions for completing the eCAP are provided in the solicitation.

(2) The contractor must maintain its S&S capability to produce and deliver the S&S quantity

identified in Section C in accordance with the approved capability assessment plan (CAP) throughout

the contract performance period. The contractor must participate in any S&S testing and

verification requested by the Government. The contractor agrees to support S&S requirements to

the maximum extent practical prior to achieving full S&S capability required in Section C and the

CAP; and for requirements exceeding those required in Section C and the CAP but not exceeding any

applicable contract maximum quantity or contract value required in FAR 52.216-19. Changes that

negatively impact S&S capability must be reported in writing to the contracting officer within ten

(10) working days after the contractor becomes aware of the impact. The notification must include a

revised S&S CAP containing proposed corrective actions and date when the S&S capability will be

attained.

(3) The Government reserves the right to verify and test the S&S capability described in the CAP at

any time during contract performance. The Government will prepare a test and verification plan and

upon request the contractor must demonstrate its S&S capability.

(4) If requested by the Government, the contractor must be prepared to provide a plan to participate
in S&S validation and testing to verify the S&S capability described in the CAP. Participation in S&S

validation and testing will be at no additional expense to the Government, and does not justify an

equitable adjustment to the contract price. The plan must include methodology, rating criteria,

labor, materials, and time required to conduct validation and testing. S&S validation generally

entails verifying if the contractor and subcontractors have (a) sufficient equipment, facilities,

personnel, stock, pre-positioned raw materials, production capabilities, and base resources; (b)

agreements, networks, and plans for distribution (receiving, storing, packaging, and issuing); (c)

transportation services to accommodate the S&S requirements in the contract; (d) examination of

any in-house work; (e) review of the stock rotation plan; and (f) other contracts that impact the

production of added or accelerated delivery of contract quantities. The testing/verification plan is

not required to be included in the offeror’s proposal. Offerors are encouraged to consider the

possibility of the Government requesting this participation when formulating the proposal.

*****

(b) Solicitations issued by DLA Aviation, DLA Land and Maritime, and DLA Troop Support Medical,

Subsistence, Construction & Equipment (C&E), Clothing & Textile (C&T), and Industrial Hardware

(IH) must include procurement note L18 when surge requirements apply.

*****

L18 Surge and Sustainment (S&S) Requirements – Instructions to Offerors (FEB 2017)

(1) Each offeror must describe in its proposal its ability to meet the S&S accelerated delivery

specified for items critical to support the Department of Defense in conducting contingency

operations. These S&S items are identified in Section C with quantities expressed as a Monthly

Wartime Rate (MWR) or in a D1-D6 schedule. The S&S quantity and delivery requirements are in

addition to peacetime quantities. S&S requirements may be met through access to production

capability as well as contractor-owned or contractor-managed inventory or safety stocks.

(2) Each offeror must include in its basic proposal a brief description of how it will ramp up to meet

accelerated delivery and increased quantities (i.e., surge) and sustain an increased production and

delivery pace throughout the contingency (i.e., sustainment). Additionally, each offeror must provide

a separate capability assessment plan (CAP) to document its detailed technical approach for

covering S&S requirements.

(3) If the CAP recommends some type of Government investment, offerors must include their plan

for refreshing or replacing S&S material consumed to ensure a continued surge capability. The CAP

must include an exit strategy that describes the transition and ramp-down of S&S assets and any

remaining Government investment not consumed before contract expiration.

(4) Offerors must provide pricing within the electronic CAP submission for S&S requirements based

on the schedule for delivering items in the offeror’s CAP. When S&S pricing exceeds peacetime

pricing, the offeror’s proposal must include sufficient description to explain the rationale for the

additional costs associated and provide a breakdown of costs to substantiate the pricing. This

paragraph (4) does not apply to DLA Troop Support Subsistence.

*****

(c)Contracting officers will include peacetime and S&S requirements when inserting dollar figures

or quantities in FAR 52.216-19, Order Limitations.

(d) Reserved.
(e) Solicitations issued by DLA Troop Support Medical must include procurement note L20 when

S&S requirements apply.

*****

L20 Surge and Sustainment (S&S) – Capability Assessment Plan (CAP) – DLA Troop Support –

Medical (FEB 2017)

Offerors must complete the CAP electronically using the industrial preparedness system (IPSYS)

industrial capability survey tool through the DLA Troop Support DMM online Directorate of Medical

Materiel , single sign-on application website at

https://www.medical.dla.mil/registration/consent/default.aspx .

* * * * *

(f) Solicitations issued by DLA Troop Support Subsistence must include procurement note L21 when

S&S requirements apply.

*****

L21 Surge and Sustainment (S&S) – Capability Assessment Plan (CAP) – DLA Troop Support –

Subsistence (FEB 2017)

Offerors must submit the CAP for items identified with surge requirements in Section C of the

solicitation.

The CAP must—

(1) Outline the offeror’s method of addressing the S&S requirements, whether defined as a

percentage of annual demands or by individual line items. If the S&S quantity or delivery

requirements cannot be met, the offeror must identify the shortfall and provide the best value

solutions to include a proposed strategy to offset the shortfall.

(2) Describe how the offeror will reduce peacetime production lead times by 50% to meet S&S

requirements.

(3) Provide letters of commitment or other agreements from suppliers and service providers (e.g.,

additional equipment or warehouse space) confirming they can meet S&S requirements.

(4) Provide a plan to continue operations from an alternate facility in the event the primary facility is

damaged or otherwise unable to operate at full capacity.

(5) Identify competing priorities for the same resources, and ensure that meeting surge delivery

requirements is independent of any other contracts or production requirements.

(6) Identify the lead time for providing required S&S capability.

(7) If applicable, include an exit strategy describing how to transition and ramp-down S&S assets

and any Government investment.

*****

(g) Solicitations issued by DLA Aviation, DLA Land and Maritime, and DLA Troop Support Medical,

Subsistence, Construction & Equipment (C&E), Clothing & Textile (C&T), and Industrial Hardware
(IH) must include procurement note M07 when S&S requirements apply.

*****

M07 Surge and Sustainment (S&S) Evaluation (FEB 2017)

(1) Capability Assessment Plan (CAP) Evaluation: The CAP will be reviewed and assessed for

responsiveness, completeness, and technical merit. The CAP must demonstrate (i) the offeror’s

ability to provide the full S&S quantity and meet the delivery requirements as specified in the

solicitation; (ii) the technical merits of the proposed solutions to any identified shortfalls in S&S

quantity and/or delivery requirements; and (iii) the ability to achieve the solutions without

Government investment. If the CAP includes Government investment, the evaluation includes plans

to refresh or replace S&S material and related exit strategy to ensure the Government’s continued

surge capability.

(2) S&S Past Performance History: The quality and extent of the offeror’s historical surge support

performance will be considered as part of the overall past performance evaluation. In the absence of

or in addition to historical S&S capability support, the contracting officer may consider other

relevant performance history that demonstrates the offeror’s ability to respond to and sustain higher

than normal production rates or faster than normal delivery requirements, or both.

(3) The contracting officer will include the S&S price in the overall price evaluation.

*****

(h) The contracting officer, after coordination with the industrial specialist, submits requests for

changes or exceptions to the above procurement notes to the DLA Acquisition Programs Division for

approval.

17.9305 Warstopper Program Material Buffer Availability.

Solicitations and long-term supply contracts must include procurement note C07 to notify suppliers

that may be candidates to support industrial mobilization and/or material disruptions of the potential

availability of key raw materials.

*****

C07 Warstopper Program Material Buffer Availability (MAY 2017)

(1) The Warstopper program material buffer (Buffer) was created to decrease lead times for raw

material to support defense contracts relating to military systems with a wartime requirement. The

current material buffer suppliers and materials may be reviewed at https://www.jccs.gov/wicap .

If the buffer material is not available or the material is inadequate to complete the requirement, the

contractor must contact the contracting officer representative (COR) for guidance. When a buffer

has been established, the following process must be used to submit requests for buffer material. A

defense contractor (or sub-tier contractor supporting a prime contractor) with a current, active U.S.

Government contract must submit a valid request to use a material buffer to the COR for the

respective material buffer. The COR will review the submittal and approve or disapprove the

request. -The request should include the following information:

(i) Requestor’s name;
(ii) U.S. Government contract number;

(iii) Defense Priorities and Allocations System (DPAS) rating;

(iv) Material specification;

(v) Quantity required; and

(vi) Required delivery date.

(vii) Whether there is a pre-existing supply contract with the material buffer contractor.

(2) If no prior contractual relationship exists between the defense contractor requesting access to

the material buffer and -the material buffer contractor, the material buffer contractor is authorized

to enter into a contract – to provide material from the buffer – once a valid request has been

approved by the COR. This action must be included in the monthly report submitted to the COR.

When requests exceed the buffer’s maximum monthly material availability, the material supplier

may negotiate phased delivery of material across the material monthly availability; or the

Government COR may prioritize the release of the material at the Government’s discretion.

(3) Contractors accessing the material buffer will be charged the material price identified in any preexisting contract with the material buffer contractor. For those defense contractors not having a preexisting contract with the material buffer contractor, they must be charged the standard (not spot

market levels) pricing for the material. Contractors using the buffer are solely responsible for costs

of using the buffer, and the Government has no liability either for these costs or for delays or other

effects arising from the use of the buffer.

(4) The buffer material provided is not Government furnished material, but is a normal vendor-tovendor transaction with all applicable warranties and guarantees provided through the commercial

transaction.

*****

SUBPART 17.95 – TAILORED LOGISTICS SUPPORT

CONTRACTING

(Revised February 17, 2017 through PROCLTR 2017-10)

17.9500 Scope of subpart.

This subpart prescribes policies and procedures for soliciting offers, awarding contracts, placing

orders, and post award administration under DLA’s tailored logistics support contracting initiatives.

Included in this category are prime vendor (PV), similar existing support arrangements known as

modified prime vendor initiatives (MPV), and future initiatives that have characteristics of PV

arrangements but are not considered traditional PV. TLSC initiatives are prime vendor programs for

purposes of the authorities at 13.40213.402 Conditions for use.(a) to use fast payment procedures.

This subpart also discusses the management attention required throughout the life of a tailored

logistics support contract. It includes a procurement note at 17.950417.9504 Post award actions and
management oversight.(c) to be used when the Government relies on the contractor’s purchasing

system to verify that the contractor competed the items or services, or justify fair and reasonable

pricing. Any deviation from this subpart must be requested in writing to the DLA Acquisition

Operations Division and be approved by the SPE. Deviations may be requested on a program rather

than an individual acquisition basis.

17.9501 Definitions.

“Distribution and handling fee” means the portion of the total item price listed in the catalog that is

paid for stocking, handling, and delivering the item, as awarded under the contract. It does not

include the cost of the actual item that the tailored logistics provider may have manufactured itself

or procured from another supplier. It is expressed in fixed dollar amounts only, not in percentages,

except for those prime vendor acquisitions that uses negative distribution fees to obtain discounts of

off prices established under other contract vehicles (e.g. the Pharmaceutical PV program).

“Distribution and pricing agreement (DAPA)” means an agreement with a manufacturer or supplier

that establishes both the selling price of a product and an affirmation from the DAPA-holder to allow

contractors to distribute its products. A DAPA allows for delivery of selected products at specified

prices.

“Market basket” means a representative sample of items that may be bought under the program

used for price evaluation under a proposed contract action. Proposed pricing for items in the market

basket is determined fair and reasonable prior to inclusion in any resulting contract. May also be

referred to under other names such as “Price Evaluation List.

“National allowance pricing agreement (NAPA)” means an agreement with a manufacturer or

supplier that provides discounts on a national basis. Tailored logistics support contracts require

contractors to pass on these savings to the end customer.

17.9502 General.

(a) Contracting officers must consider using tailored logistics support (TLS) contracts whenever a

viable commercial supply chain exists for the items and associated services being acquired.

(b) CCOs must ensure Government individuals assigned to work on or provide significant support for

PV contracts complete a tailored logistics support program of instruction within one month of

assuming their duties on a PV contract and complete annual refresher training.

(c) The following courses are suggested as part of a core curriculum. CCO’s must tailor the

suggested curriculum with training pertinent to the acquisition at hand, such as units of instruction

reflective of the commodities or industries involved, standard operating procedures to be followed

within a program, and specific examples of fraud schemes encountered within the contracting office.

(1) Price reasonableness and negotiation skills practicum

(2) Commercial item determination –on-line course (CLC 020)

(3) Commercial item pricing (CLC 131)

(4) Procurement fraud indicators (CLM 049)
(5) Contract pricing refresher

(6) Pricing catalogs for prime supplier programs

(7) Contract administration (including closeout, CORs and COTRs)

(8) Domestic content update and refresher (see also the DAU Course “Berry Amendment” (CLC 125)

(9) CQMPs and the acquisition review board process

(10) Contract documentation requirements

17.9503 Pricing.

(a) A PV contract or other tailored logistics support contract must comply with one of the established

PV pricing models in Subpart SUBPART 15.4 – CONTRACT PRICING.

(b) Catalog pricing. The initial catalog of DLA approved items available for ordering under the TLSC

is created at time of contract award.

17.9504 Post award actions and management oversight.

(a) Tailored logistics support contracts are subject to continuous and rigorous management

oversight as follows:

(1) The program manager or Integrated Support Team (IST) chief (i.e., one level above the

contracting officer) for each tailored logistic support program (i.e., the team administering the

program, for example, metals, MRO supplies, or special operations) must perform quarterly pricing

reviews. Reviews will include a representative sample based on the total number of orders for that

period. Upon completion of these reviews, the tailored logistics support program manager/IST chief

must forward a report of the results, including any findings and corrective action plan, to the

Director of Supplier Operations or designee for review and approval. A copy of the report must be

kept as part of the contract file.

(2) Contract administration and compliance or contract review personnel at the procuring

organization must perform contract audits of vendors’ compliance with non-pricing contract terms

on at least a semi-annual basis. A copy of the report shall be provided to the contracting officer for

review and action, as necessary, and inclusion in the contract file.

(b) The DLA Acquisition Contract and Pricing Compliance Division assesses performance of selected

vendors. Assessments must examine the vendor’s adherence to the contract pricing methodology.

Vendors are chosen for review based on risk assessment factors, including contract dollar value,

previous annual audits, extent of competition, opportunities for refunds, reliance on the vendor’s

purchasing system, and outside agency reports. The DLA Acquisition Contract and Pricing

Compliance Division must furnish a copy of the assessments to the DLA Acquisition Director.

(c) Solicitations and contracts must include procurement note C08 when a tailored logistics support

contract relies on the contractor’s purchasing system to verify that the contractor competed the

items or services or to justify that prices are fair and reasonable.
*****

C08 Tailored Logistics Support Purchasing Reviews (FEB 2017)

(1) From the commencement of performance of this contract until 3 years after the final contract

payment, the contractor must allow the contracting officer, ACO, Defense Contract Management

Agency (DCMA), Defense Contract Audit Agency (DCAA), and any other duly authorized

representative of the contracting officer access to all records and information pertaining to those

items or services for which the Government is relying on the contractor’s purchasing system to

determine that competition was obtained or to justify that prices are fair and reasonable. The

contractor must maintain records subject to this clause for not less than 3 years after the contract

final payment.

(2) The contracting officer may conduct reviews of purchased items or services provided under this

contract regardless of dollar value that meet the criteria in paragraph (1) to ascertain whether the

contractor has obtained the best value. The contractor must obtain competition to the maximum

extent practicable for all purchases. Prior to purchasing any supplies or services, the contractor

must solicit a competitive quotation from at least two independently-competing firms. For other than

sole source items, the request for quotations must, to the maximum extent practical, solicit offers

from different manufacturers or producers. If the contractor is unable to obtain quotes for

competing items from two or more independently-competing firms, the contractor must retain

documentation supporting its rationale for selection of the suppliers solicited and selected and its

determination that the price was fair and reasonable. The contractor is responsible for maintaining

this documentation for all sole source/non-competitive actions. The following price reasonableness

and documentation requirements are applicable to all purchases, regardless of dollar value:

(i) A price is reasonable if it does not exceed a price incurred by a prudent person in the conduct of

competitive business. The contracting officer will examine the prices with particular care in

connection with buys that may not be subject to effective competition restraints. The contractor’s

price will not be presumed to be reasonable. If an initial review of the facts results in a challenge of

a specific price by the contracting officer or the contracting officer’s representative, the burden of

proof must be upon the contractor to establish that the price is reasonable under the standards in

FAR Subpart 15.4 and FAR 31.201-3.

(ii) The contractor must keep the documentation to a minimum, but must retain data supporting the

purchases either by paper or electronically. At a minimum, price quotations and invoices must be

retained. Should the contractor receive an oral price quotation, the contractor must document who

the supplier or subcontractor is by complete name, address, telephone number, price, terms and

other conditions quoted by each vendor. Price quotes for supplies must be broken down by

individual items, shipping costs, and any other included expenses. Price quotes for incidental

services which are not pre- priced in the contract must include labor hours and costs or prices, as

applicable, including the total price of the job, individual pricing for the portions of the work if

applicable, materials, and all other elements of cost, overhead, and profit. This price breakdown

documentation must be made for each subcontractor performing work on this contract.

(3) When applicable, if the contractor is purchasing from subcontractors or other sources and

receives a discount or rebates, the contractor must immediately pass these savings to the

Government in the contract price and invoice for payment. The contractor is required to use

diligence in the selection of the most economical method of delivery of the product or services by

selecting a best value method of delivery based on the urgency and nature of the work or product

required. When labor hours are involved in the work to be accomplished and the contractor has not

already pre-priced the effort to use its own labor force, the contractor must provide the labor at
rates required by the contract (for example, Service Contract Act or Davis-Bacon Act rates) or at

rates based on competition if mandatory rates are not required by the contract.

(4) If the contracting officer determines that the purchased product or service is unreasonably

priced, the contractor must refund to the Government the amount the contracting officer determines

is in excess of a reasonable price. The contracting officer must notify the contractor in writing in

accordance with FAR 32.604 Demand for Payment, giving the basis for the determination and the

amount to be refunded. The contractor must make the refund payment in accordance with directions

from the contracting officer, and must provide proof of the refund payment to the contracting

officer. The contracting officer may collect the amount due using all available means in accordance

with FAR Subpart 32.6. FAR 52.232-17, Interest, is applicable to payments not made within 30 days

of the demand for payment. Any disputes arising under this provision must be handled in accordance

with the “Disputes” clause of this contract.

*****