An Act to amend the Armed Services Procurement Act of 1947
PL 87-653 (H.R.5532), enacted 09/10/1962

528 
September 10, 1962 
PUBLIC LAW 87-653-SEPT. 10, 1962 
Public Law 87-653 
AN ACT 
[76 STAT. 
[H. R. 5532] 
To amend chapter 137, of title 10, United States Code, relating to procurement. 
Armed Forces. 
Procurement. 
70A Stat. 128. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled, That title 10 of the 
United States Code is hereby amended as follows: 
(a) Subsection 2304(a) is amended to read as follows: 
" (a) Purchases of and contracts for property or services covered by 
this chapter shall be made by forrnal advertising in all cases in which 
the use of such method is feasible and practicable under the existing 
conditions and circumstances. 
If use of such method is not feasible 
and practicable, the head of an agency, subject to the requirements for 
determinations and findings in section 2810, may negotiate such a pur-
chase or contract, if—". 
(b) Subsection 2304(a) (14) is amended to read as follows: 
" (14) the purchase or contract is for technical or special prop-
erty that he determines to require a substantial initial investment 
or an extended period of preparation for manufacture, and for 
which he determines that formal advertising would be likely to 
result in additional cost to the Government by reason of duplica-
tion of investment or would result in duplication of necessary 
preparation which would unduly delay the procurement of the 
property;". 
(c) Section 2304 is amended by adding a new subsection as follows: 
"(g) In all negotiated procurements in excess of $2,500 in which 
rates or prices are not fixed by law or regulation and in which time 
of delivery will permit, proposals shall be solicited from the maximum 
number of qualified sources consistent with the nature and require-
ments of the supplies or services to be procured, and written or oral 
discussions shall be conducted with all responsible offerors who submit 
proposals within a competitive range, price, and other factors con-
sidered : Provided, however, That the requirements of this subsection 
with respect to written or oral discussions need not be applied to pro-
curements in implementation of authorized set-aside programs or to 
procurements where it can be clearly demonstrated from the existence 
of adequate competition or accurate prior cost experience with the 
product, that acceptance of an initial proposal without discussion 
would result in fair and reasonable prices and where the request for 
proposals notifies all offerors of the possibility that award may be 
made without discussion." 
(d) The second sentence of subsection 2306(a) is amended by sub-
stituting " ( f ) " for " (e)". 
(e) Section 2306 is amended by adding a new subsection as follows: 
"(f) A prime contractor or any subcontractor shall be required to 
submit cost or pricing data under the circumstances listed below, and 
shall be required to certifv that, to the best of his knowledge and 
belief, the cost or pricing data he submitted was accurate, complete 
and current— 
"(1) Prior to the award of any negotiated prime contract under 
this title where the price is expected to exceed $100,000; 
"(2) Prior to the pricing of any contract change or modification 
for which the price adjustment is expected to exceed $100,000, or such 
lesser amount as may be prescribed by the head of the agency; 
"(3) Prior to the award of a subcontract at any tier, where the 
prime contractor and each higher tier subcontractor have been required 
to furnish such a certificate, if the price of such subcontract is ex-
pected to exceed $100,000; or 
76 STAT.] 
P U B U C LAW 87-653-SEPT. 10, 1962 
529 
"(4) Prior to the pricing of any contract change or modification to 
a subcontract covered by (3) above, for which the price adjustment 
is expected to exceed $100,000, or such lesser amount as may be pre-
scribed by the head of the agency. 
"Any prime contract or change or modification thereto under which 
such certificate is required shall contain a provision that the price to 
the Government, including profit or fee, shall be adjusted to exclude 
any significant sums by which it may be determined by the head of 
the agency that such price was increased because the contractor or 
any subcontractor required to furnish such a certificate, furnished cost 
or pricing data which, as of a date agreed upon between the parties 
(which date shall be as close to the date of agreement on the negotiated 
price as is practicable), was inaccurate, incomplete, or noncurrent: 
Provided^ That the requirements of this subsection need not be applied 
to contracts or subcontracts where the price negotiated is based on 
adequate price competition, established catalog or market prices of 
commercial items sold in substantial quantities to the general public, 
prices set by law or regulation or, in exceptional cases wjiere the head 
of the agency determines that the requirements of this subsection may 
be waived and states in writing his reasons for such determination." 
(f) The first sentence of subsection 2310(b) is amended to read as 
7OA stat. 132. 
follows: 
"Each determination or decision under clauses (11)-(16) of section 
2304(a), section 2306(c), or section 2307(c) of this title and a decision 
72 stat. 967. 
to negotiate contracts under clauses (2), (7), (8), (10), (12), or for 
property or supplies under clause (11) of section 2304(a), shall be 
based on a written finding by the person making the determination 
or decision, which finding shall set out facts and circumstances that 
(1) are clearly illustrative of the conditions described in clauses 
(11)-(16) of section 2304(a), (2) clearly indicate why the type of 
contract selected under section 2306(c) is likeljr to be less costly than 
any other type or that it is impracticable to obtain property or services 
of the kind or quality required except under such a contract, (3) 
clearly indicate why advance payments under section 2307(c) would 
be in the public interest, or (4) clearly and convincingly establish with 
respect to the use of clauses (2), (7), (8), (10), (12), and for property 
or supplies under clause (11) of section 2304(a), that formal adver-
tising would not have been feasible and practicable." 
(g) Section 2311 is amended to read as follows: 
7OA stat. 132. 
"§231i: Delegation 
"The head of an agency may delegate, subject to his direction, to 
any other officer or official or that agency, any power under this 
chapter except the power to make determinations and decisions under 
clauses (11)-(16) of section 2304(a) of this title. However, the 
power to make a determination or decision under section 2304(a) (11) 
of this title may be delegated to any other officer or official of that 
agency who is responsible for procurement, and only for contracts 
requiring the expenditure of not more than $100,000." 
(h) The amendments made by this Act shall take effect on the first Effective date. 
day of the third calendar month which begins after the date of 
enactment of this Act. 
Approved September 10, 1962. 
78135 0-63—37