Source: http://farsite.hill.af.mil/reghtml/regs/FAR2AFMCFARS/FARDFARS/FAR/17.htm
Timestamp: 2019-01-16 19:05:34
Document Index: 344635411

Matched Legal Cases: ['art 17', 'art 17', 'art 17', 'art.\n17', 'art 17', 'art 17', 'art 17', 'art.\n17', 'art 17', 'art.\n17', 'art 17', 'art.\n17', 'art 17', 'art 5', 'art 6', 'art 6', 'art 17', 'art 17', 'art 45', 'art 22', 'art 17']

FAR -- Part 17 Special Contracting Methods
17.000 -- Scope of Part.
Subpart 17.1 -- Multi-Year Contracting
17.101 -- Authority.
17.102 -- Applicability.
17.103 -- Definitions.
17.104 -- General.
17.105 -- Policy.
17.105-1 -- Uses.
17.105-2 -- Objectives.
17.106 -- Procedures.
17.106-1 -- General.
17.106-2 -- Solicitations.
17.106-3 -- Special Procedures Applicable to DoD, NASA, and the Coast Guard.
17.107 -- Options.
17.108 -- Congressional Notification.
17.109 -- Contract Clauses.
Subpart 17.2 -- Options
17.200 -- Scope of Subpart.
17.201 – [Reserved].
17.202 -- Use of Options.
17.203 -- Solicitations.
17.204 -- Contracts.
17.205 -- Documentation.
17.206 -- Evaluation.
17.207 -- Exercise of Options.
17.208 -- Solicitation Provisions and Contract Clauses.
Subpart 17.3 -- [Reserved]
Subpart 17.4 -- Leader Company Contracting
17.401 -- General.
17.402 -- Limitations.
17.403 -- Procedures.
Subpart 17.5 -- Interagency Acquisitions
17.500 -- Scope of Subpart.
17.501 -- General.
17.502 -- Procedures.
17.502-1 – General.
17.502-2 – The Economy Act.
17.504 – Reporting Requirements.
Subpart 17.6 -- Management and Operating Contracts
17.600 -- Scope of Subpart.
17.601 -- Definition.
17.602 -- Policy.
17.603 -- Limitations.
17.604 -- Identifying Management and Operating Contracts.
17.605 -- Award, Renewal, and Extension.
Subpart 17.7 – Interagency Acquisitions: Acquisitions by Nondefense Agencies on Behalf of the Department of Defense.
17.700 -- Scope of Subpart.
17.701 Definitions.
17.702 Applicability.
FAR -- Part 17
(FAC 2005-96) (06 Nov 2017)
This part prescribes policies and procedures for the acquisition of supplies and services through special contracting methods, including --
This subpart implements 41 U.S.C. 3903 and 10 U.S.C. 2306b and provides policy and procedures for the use of multi-year contracting.
“Cancellation” means the cancellation (within a contractually specified time) of the total requirements of all remaining program years. Cancellation results when the contracting officer --
(1) Notifies the contractor of nonavailability of funds for contract performance for any subsequent program year, or
(d) The termination for convenience procedure may apply to any Government contract, including multi-year contracts. As contrasted with cancellation, termination can be effected at any time during the life of the contract (cancellation is effected between fiscal years) and can be for the total quantity or a partial quantity (where as cancellation must be for all subsequent fiscal years’ quantities).
(a) Except for DoD, NASA, and the Coast Guard, the contracting officer may enter into a multi-year contract if the head of the contracting activity determines that --
(b) For DoD, NASA, and the Coast Guard, the head of the agency may enter into a multi-year contract for supplies if --
(1) The use of such a contract will result in significant savings of the total estimated costs of carrying out the program through annual contracts;
(1) All program years except the first are subject to cancellation. For each program year subject to cancellation, the contracting officer shall establish a cancellation ceiling. Ceilings must exclude amounts for requirements included in prior program years. The contracting officer shall reduce the cancellation ceiling for each program year in direct proportion to the remaining requirements subject to cancellation. For example, consider that the total nonrecurring costs (see 15.408, Table 15-2, III. Formats for Submission of Line Item Summaries C(8)) are estimated at 10 percent of the total multi-year price, and the percentages for each of the program year requirements for 5 years are
(i) 30 in the first year,
(ii) 30 in the second,
(iii) 20 in the third,
(iv) 10 in the fourth, and
(v) 10 in the fifth. The cancellation percentages, after deducting 3 percent for the first program year, would be 7, 4, 2, and 1 percent of the total price applicable to the second, third, fourth, and fifth program years, respectively.
(a) The requirements, by item of supply or service, for the --
(a) Participation by subcontractors, suppliers, and vendors. In order to broaden the defense industrial base, to the maximum extent practicable --
(a) Except for DoD, NASA, and the Coast Guard, a multi-year contract which includes a cancellation ceiling in excess of $13.5 million may not be awarded until the head of the agency gives written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the committees on appropriations of the House of Representatives and Senate and the appropriate oversight committees of the House and Senate for the agency in question. Information on such committees may not be readily available to contracting officers. Accordingly, agencies should provide such information through its internal regulations. The contract may not be awarded until the thirty-first day after the date of notification.
(b) For DoD, NASA, and the Coast Guard, a multi-year contract which includes a cancellation ceiling in excess of $135.5 million may not be awarded until the head of the agency gives written notification of the proposed contract and of the proposed cancellation ceiling for that contract to the committees on armed services and appropriations of the House of Representatives and Senate. The contract may not be awarded until the thirty-first day after the date of notification.
(b) Economic price adjustment clauses. Economic price adjustment clauses are adaptable to multi-year contracting needs. When the period of production is likely to warrant a labor and material costs contingency in the contract price, the contracting officer should normally use an economic price adjustment clause (see 16.203). When contracting for services, the contracting officer --
(1) Shall add the clause at 52.222-43, Fair Labor Standards Act and Service Contract Labor Standards -- Price Adjustment (Multiple Year and Option Contracts), when the contract includes the clause at 52.222-41, Service Contract Labor Standards,
This subpart prescribes policies and procedures for the use of option solicitation provisions and contract clauses. Except as provided in agency regulations, this subpart does not apply to contracts for
(a) services involving the construction, alteration, or repair (including dredging, excavating, and painting) of buildings, bridges, roads, or other kinds of real property;
(b) architect-engineer services; and
(c) research and development services. However, it does not preclude the use of options in those contracts.
(b) Inclusion of an option is normally not in the Government’s interest when, in the judgment of the contracting officer --
(1) The foreseeable requirements involve --
(c) The contracting officer shall not employ options if --
(3) The option represents known firm requirements for which funds are available unless--
(i) The basic quantity is a learning or testing quantity and
(d) In recognition of --
(1) The Government’s need in certain service contracts for continuity of operations and
(e) If it is anticipated that the Government may exercise an option at the time of award and if the condition specified in paragraph (d) above applies, solicitations shall specify the price at which the Government will evaluate the option (highest option price offered or option price for specified requirements).
(f) Solicitations may, in unusual circumstances, require that options be offered at prices no higher than those for the initial requirement; e.g., when --
(1) The option cannot be evaluated under 17.206; or
(g) Solicitations that require the offering of an option at prices no higher than those for the initial requirement shall --
(2) Limit option quantities for additional supplies to not more than 50 percent of the initial quantity of the same line item. In unusual circumstances, an authorized person at a level above the contracting officer may approve a greater percentage of quantity.
(e) Unless otherwise approved in accordance with agency procedures, the total of the basic and option periods shall not exceed 5 years in the case of services, and the total of the basic and option quantities shall not exceed the requirement for 5 years in the case of supplies. These limitations do not apply to information technology contracts. However, statutes applicable to various classes of contracts, for example, the Contract Labor Standards statute (see 22.1002-1), may place additional restrictions on the length of contracts.
(f) Contracts may express options for increased quantities of supplies or services in terms of --
(c) The contracting officer may exercise options only after determining that --
(4) The option was synopsized in accordance with Part 5 unless exempted by 5.202(a)(11) or other appropriate exemptions in 5.202,
(5) The contractor does not have an active exclusion record in the
System for Award Management (see FAR 9.405-1);
(6) The contractor’s past performance evaluations on other contract actions have been considered and;
(7) The contractor’s performance on this contract has been acceptable, e.g., received satisfactory ratings.
(1) Should take into account the Government's need for continuity of operations and potential costs of disrupting operations; and
(f) Before exercising an option, the contracting officer shall make a written determination for the contract file that exercise is in accordance with the terms of the option, the requirements of this section, and Part 6. To satisfy requirements of Part 6 regarding full and open competition, the option must have been evaluated as part of the initial competition and be exercisable at an amount specified in or reasonably determinable from the terms of the basic contract, e.g. --
(3) In the case of a cost-type contract, if --
(c) Insert a provision substantially the same as the provision at 52.217-5, Evaluation of Options, in solicitations when --
(e) Insert a clause substantially the same as the clause at 52.217-7, Option for Increased Quantity -- Separately Priced Line Item, in solicitations and contracts, other than those for services, when the inclusion of an option is appropriate (see 17.200 and 17.202) and the option quantity is identified as a separately priced line item having the same nomenclature as a corresponding line item.
(a) Reduce delivery time.
(b) Achieve geographic dispersion of suppliers.
(c) Maximize the use of scarce tooling or special equipment.
(d) Achieve economies in production.
(e) Ensure uniformity and reliability in equipment, compatibility or standardization of components, and interchangeability of parts.
(f) Eliminate problems in the use of proprietary data that cannot be resolved by more satisfactory solutions.
(g) Facilitate the transition from development to production and to subsequent competitive acquisition of end items or major components.
(a) Leader company contracting is to be used only when --
(1) The leader company has the necessary production know-how and is able to furnish required assistance to the follower(s);
(2) No other source can meet the Government’s requirements without the assistance of a leader company;
(3) The assistance required of the leader company is limited to that which is essential to enable the follower(s) to produce the items; and
(4) Its use is authorized in accordance with agency procedures.
(b) When leader company contracting is used, the Government shall reserve the right to approve subcontracts between the leader company and the follower(s).
(a) The contracting officer may award a prime contract to a --
(1) Leader company, obligating it to subcontract a designated portion of the required end items to a specified follower company and to assist it to produce the required end items;
(2) Leader company, for the required assistance to a follower company, and a prime contract to the follower for production of the items; or
(3) Follower company, obligating it to subcontract with a designated leader company for the required assistance.
(b) The contracting officer shall ensure that any contract awarded under this arrangement contains a firm agreement regarding disclosure, if any, of contractor trade secrets, technical designs or concepts, and specific data, or software, of a proprietary nature.
(a) This subpart prescribes policies and procedures applicable to all interagency acquisitions under any authority, except as provided for in paragraph (c) of this section. In addition to complying with the interagency acquisition policy and procedures in this subpart, nondefense agencies acquiring supplies and services on behalf of the Department of Defense shall also comply with the policy and procedures at subpart 17.7.
(b) This subpart applies to interagency acquisitions, see 2.101 for definition, when—
(2) Orders of $550,000 or less issued against Federal Supply Schedules.
(d) An agency shall not use an interagency acquisition to make acquisitions conflicting with any other agency's authority or responsibility (for example, that of the Administrator of General Services under title 40, United States Code, “Public Buildings, Property and Works” and 41 U.S.C. division C of subtitle I Procurement).
(a) Determination of best procurement approach—
(1) Assisted acquisitions. Prior to requesting that another agency conduct an acquisition on its behalf, the requesting agency shall make a determination that the use of an interagency acquisition represents the best procurement approach. As part of the best procurement approach determination, the requesting agency shall obtain the concurrence of the requesting agency's responsible contracting office in accordance with internal agency procedures. At a minimum, the determination shall include an analysis of procurement approaches, including an evaluation by the requesting agency that using the acquisition services of another agency—
(2) Direct acquisitions. Prior to placing an order against another agency's indefinite-delivery vehicle, the requesting agency shall make a determination that use of another agency's contract vehicle is the best procurement approach and shall obtain the concurrence of the requesting agency’s responsible contracting office. At a minimum, the determination shall include an analysis, including factors such as:
(b) Written agreement on responsibility for management and administration—
(i) Prior to the issuance of a solicitation, the servicing agency and the requesting agency shall both sign a written interagency agreement that establishes the general terms and conditions governing the relationship between the parties, including roles and responsibilities for acquisition planning, contract execution, and administration and management of the contract(s) or order(s). The requesting agency shall provide to the servicing agency any unique terms, conditions, and applicable agency-specific statutes, regulations, directives, and other applicable requirements for incorporation into the order or contract. In the event there are no agency unique requirements beyond the FAR, the requesting agency shall so inform the servicing agency contracting officer in writing. For acquisitions on behalf of the Department of Defense, also see subpart 17.7. For patent rights, see 27.304-2. In preparing interagency agreements to support assisted acquisitions, agencies should review the Office of Federal Procurement Policy guidance, Interagency Acquisitions, available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/assets/OMB/procurement/interagency_acq/iac_revised.pdf.
(c) Business-case analysis requirements for multi-agency contracts and governmentwide acquisition contracts. In order to establish a multi-agency or governmentwide acquisition contract, a business-case analysis must be prepared by the servicing agency and approved in accordance with the Office of Federal Procurement Policy (OFPP) business case guidance, available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/procurement/memo/development-review-and-approval-of-business-cases-for-certain-interagency-and-agency-specific-acquisitions-memo.pdf.
The business-case analysis shall--
(a) The Economy Act (31 U.S.C. 1535) authorizes agencies to enter into agreements to obtain supplies or services from another agency. The FAR applies when one agency uses another agency’ contract to obtain supplies or services. If the interagency business transaction does not result in a contract or an order, then the FAR does not apply. The Economy Act also provides authority for placement of orders between major organizational units within an agency; procedures for such intra-agency transactions are addressed in agency regulations.
(c) Requirements for determinations and findings.
(1) Each Economy Act order to obtain supplies or services by interagency acquisition shall be supported by a determination and findings (D&F). The D&F shall—
(i) State that use of an interagency acquisition is in the best interest of the Government;
(ii) State that the supplies or services cannot be obtained as conveniently or economically by contracting directly with a private source; and
(A) The acquisition will appropriately be made under an existing contract of the servicing agency, entered into before placement of the order, to meet the requirement of the servicing agency for the same or similar supplies or services.
(3) The requesting agency shall furnish a copy of the D&F to the servicing agency with the order.
This subpart prescribes policies and procedures for management and operating contracts for the Department of Energy and any other agency having requisite statutory authority.
Management and operating contract, means an agreement under which the Government contracts for the operation, maintenance, or support, on its behalf, of a Government-owned or-controlled research, development, special production, or testing establishment wholly or principally devoted to one or more major programs of the contracting Federal agency.
(a) Heads of agencies, with requisite statutory authority, may determine in writing to authorize contracting officers to enter into or renew any management and operating contract in accordance with the agencys statutory authority, or 41 U.S.C. chapter 33, and the agencys regulations governing such contracts. This authority shall not be delegated. Every contract so authorized shall show its authorization upon its face.
(b) Agencies may authorize management and operating contracts only in a manner consistent with the guidance of this subpart and only if they are consistent with the situations described in 17.604.
(c) Within 2 years of the effective date of this regulation, agencies shall review their current contractual arrangements in the light of the guidance of this subpart, in order to --
(1) Identify, modify as necessary, and authorize management and operating contracts; and
(2) Modify as necessary or terminate contracts not so identified and authorized, except that any contract with less than 4 years remaining as of the effective date of this regulation need not be terminated, nor need it be identified, modified, or authorized unless it is renewed or its terms are substantially renegotiated.
(a) Management and operating contracts shall not be authorized for --
(1) Functions involving the direction, supervision, or control of Government personnel, except for supervision incidental to training;
(2) Functions involving the exercise of police or regulatory powers in the name of the Government, other than guard or plant protection services;
(3) Functions of determining basic Government policies;
(4) Day-to-day staff or management functions of the agency or of any of its elements; or
(5) Functions that can more properly be accomplished in accordance with Subpart 45.3, Authorizing the Use and Rental of Government Property.
(b) Since issuance of an authorization under 17.602(a) is deemed sufficient proof of compliance with paragraph (a) immediately above, nothing in paragraph (a) immediately above shall affect the validity or legality of such an authorization.
(c) For use of project labor agreements, see subpart 22.5.
A management and operating contract is characterized both by its purpose (see 17.601) and by the special relationship it creates between Government and contractor. The following criteria can generally be applied in identifying management and operating contracts:
(a) Government-owned or-controlled facilities must be utilized; for instance, --
(1) In the interest of national defense or mobilization readiness;
(2) To perform the agency’s mission adequately; or
(3) Because private enterprise is unable or unwilling to use its own facilities for the work.
(b) Because of the nature of the work, or because it is to be performed in Government facilities, the Government must maintain a special, close relationship with the contractor and the contractor’s personnel in various important areas (e.g., safety, security, cost control, site conditions).
(c) The conduct of the work is wholly or at least substantially separate from the contractor’s other business, if any.
(d) The work is closely related to the agency’s mission and is of a long-term or continuing nature, and there is a need --
(1) To ensure its continuity; and
(2) For special protection covering the orderly transition of personnel and work in the event of a change in contractors.
(a) Effective work performance under management and operating contracts usually involves high levels of expertise and continuity of operations and personnel. Because of program requirements and the unusual (sometimes unique) nature of the work performed under management and operating contracts, the Government is often limited in its ability to effect competition or to replace a contractor. Therefore contracting officers should take extraordinary steps before award to assure themselves that the prospective contractor’s technical and managerial capacity are sufficient, that organizational conflicts of interest are adequately covered, and that the contract will grant the Government broad and continuing rights to involve itself, if necessary, in technical and managerial decision-making concerning performance.
(b) The contracting officer shall review each management and operating contract, following agency procedures, at appropriate intervals and at least once every 5 years. The review should determine whether meaningful improvement in performance or cost might reasonably be achieved. Any extension or renewal of an operating and management contract must be authorized at a level within the agency no lower than the level at which the original contract was authorized in accordance with 17.602(a).
(c) Replacement of an incumbent contractor is usually based largely upon expectation of meaningful improvement in performance or cost. Therefore, when reviewing contractor performance, contracting officers should consider --
(1) The incumbent contractor’s overall performance, including, specifically, technical, administrative, and cost performance;
(2) The potential impact of a change in contractors on program needs, including safety, national defense, and mobilization considerations; and
(3) Whether it is likely that qualified offerors will compete for the contract.
(a) Compliance with this subpart is in addition to the policies and procedures for interagency acquisitions set forth in subpart 17.5. This subpart prescribes policies and procedures specific to acquisitions of supplies and services by nondefense agencies on behalf of the Department of Defense (DoD).
(b) This subpart implements Public Law 110-181, section 801, as amended (10 U.S.C. 2304 Note).
“Department of Defense (DoD) acquisition official” means--
“Nondefense agency” means any department or agency of the Federal Government other than the Department of Defense.
“Nondefense agency that is an element of the intelligence community” means the agencies identified in 50 U.S.C. 401a(4), which include the--
(1) Office of the Director of National Intelligence;
(2) Central Intelligence Agency;
(3) Intelligence elements of the Federal Bureau of Investigation, Department of Energy, and Drug Enforcement Agency;
(4) Bureau of Intelligence and Research of the Department of State;
(5) Office of Intelligence and Analysis of the Department of the Treasury;
(6) The Office of Intelligence and Analysis of the Department of Homeland Security and the Office of Intelligence of the Coast Guard; and
(7) Such other elements of any department or agency as have been designated by the President, or designated jointly by the Director of National Intelligence and the head of the department or agency concerned, as an element of the intelligence community.
This subpart applies to all acquisitions made by nondefense agencies on behalf of DoD. It does not apply to contracts entered into by a nondefense agency that is an element of the intelligence community for the performance of a joint program conducted to meet the needs of DoD and the nondefense agency.
(b) A nondefense agency is compliant with applicable procurement requirements if the procurement policies, procedures, and internal controls of the nondefense agency applicable to the procurement of supplies and services on behalf of DoD, and the manner in which they are administered, are adequate to ensure the compliance of the nondefense department or agency with--
(2) Laws and regulations that apply to procurements of supplies and services made by DoD through other Federal agencies, including DoD financial management regulations, the Defense Federal Acquisition Regulation Supplement (DFARS), DoD class deviations, and the DFARS Procedures, Guidance, and Information (PGI). (The DFARS, DoD class deviations, and PGIs are accessible at: http://www.acq.osd.mil/dpap/dars).
(c) Within 30 days of the beginning of each fiscal year, submit nondefense agency certifications of compliance to the Director, Defense Procurement and Acquisition Policy, Department of Defense, 3060 Defense Pentagon, Washington DC 20301-3060.
(d) The DoD acquisition official, as defined at 17.701, shall provide to the servicing nondefense agency contracting officer any DoD-unique terms, conditions, other related statutes, regulations, directives, and other applicable requirements for incorporation into the order or contract. In the event there are no DoD-unique requirements beyond the FAR, the DoD acquisition official shall so inform the servicing nondefense agency contracting officer in writing. Nondefense agency contracting officers are responsible for ensuring support provided in response to DoD's request complies with paragraph (b) of this section.
(e) Waiver. The limitation in paragraph (a) of this section shall not apply to the acquisition of supplies and services on behalf of DoD by a nondefense agency during any fiscal year for which the Under Secretary of Defense for Acquisition, Technology, and Logistics has determined in writing that it is necessary in the interest of DoD to acquire supplies and services through the nondefense agency during the fiscal year. The written determination shall identify the acquisition categories to which the waiver applies.