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subpart 209.1--responsible prospective contractors

(Revised June 27, 2000)

 

 



 209.101 Definitions.
 209.103 Policy.
 209.103-70 Contract clause.
 209.104 Standards.
 209.104-1 General standards.
 209.104-4 Subcontractor responsibility.
 209.104-70 Solicitation provisions.
 209.105-2 Determinations and documentation.
 209.106 Preaward surveys.
 209.106-1 Conditions for preaward surveys.
 209.106-2 Requests for preaward surveys.


209.101  Definitions.

“Entity controlled by a foreign government,” “foreign government,” and “proscribed information” are defined in the provision at 252.209-7002, Disclosure of Ownership or Control by a Foreign Government.

 

209.103  Policy.

 

      (a)(i)  Do not deny award to contractors subject to on-site inspection under the Intermediate-Range Nuclear Forces (INF) Treaty, or similar treaty, due to the actual or potential presence of Soviet inspectors at the contractor's facility unless—

 

                    (A)  Necessary for reasons of national security;

 

                    (B)  The decision is based on full information, including comment from the potential contractor or subcontractor on the security issues involved; and

 

                    (C)  The department or agency acquisition executive reviews the decision and the Under Secretary of Defense (Acquisition, Technology, and Logistics) approves the decision.

 

              (ii)  Make any decision to deny consideration for award under paragraph (a)(i) of this section as early as possible in the acquisition process.  Notify the firm in writing of any decision not to consider the firm for award of a contract or subcontract.

 

      (c)  The additional cost of contract administration and audit due to a contractor’s performance risk may be considered in evaluating the contractor’s price.

 

209.103-70  Contract clause.

Use the clause at 252.209-7000, Acquisition from Subcontractors Subject to On-Site Inspection Under the Intermediate-Range Nuclear Forces (INF) Treaty, in all solicitations and contracts exceeding the simplified acquisition threshold, except solicitations and contracts for commercial items.

 

209.104  Standards.

 

209.104-1  General standards.

 

      (e)  For cost-reimbursement or incentive type contracts, or contracts which provide for progress payments based on costs or on a percentage or stage of completion, the prospective contractor’s accounting system and related internal controls must provide reasonable assurance that—

 

              (i)  Applicable laws and regulations are complied with;

 

              (ii)  The accounting system and cost data are reliable;

 

              (iii)  Risk of misallocations and mischarges are minimized; and

 

              (iv)  Contract allocations and charges are consistent with invoice procedures.

 

      (g)(i)  Ownership or control by the government of a terrorist country.

 

                    (A)  Under 10 U.S.C. 2327(b), a contracting officer shall not award a contract of $100,000 or more to a firm or to a subsidiary of a firm when a foreign government—

 

                          (1)  Either directly or indirectly, has a significant interest—

 

                              (i)  In the firm; or

 

                              (ii)  In the subsidiary or the firm that owns the subsidiary; and

 

                          (2)  Has been determined by the Secretary of State under 50 U.S.C. App. 2405(j)(1)(A) to be a government of a country that has repeatedly provided support for acts of international terrorism.

 

                    (B)  The Secretary of Defense may waive the prohibition in paragraph (g)(i)(A) of this subsection in accordance with 10 U.S.C. 2327(c).  This waiver authority may not be delegated.

 

              (ii)  Ownership or control by a foreign government when access to proscribed information is required.

 

                    (A)  Under 10 U.S.C. 2536(a), no DoD contract under a national security program may be awarded to an entity controlled by a foreign government if that entity requires access to proscribed information to perform the contract.

 

                    (B)  Whenever the contracting officer has a question about application of the provision at 252.209-7002, the contracting officer may seek advice from the Director, Defense Security Programs, Office of the Assistant Secretary of Defense for Command, Control, Communications and Intelligence.

 

                    (C)  In accordance with 10 U.S.C. 2536(b)(1)(A), the Secretary of Defense may waive the prohibition in paragraph (g)(ii)(A) of this subsection upon determining that the waiver is essential to the national security interests of the United States.  The Secretary has delegated authority to grant this waiver to the Assistant Secretary of Defense for Command, Control, Communications and Intelligence.  Waiver requests, prepared by the requiring activity in coordination with the contracting officer, shall be processed through the Director of Defense Procurement and Acquisition Policy, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics), and shall include a proposed national interest determination.  The proposed national interest determination, prepared by the requiring activity in coordination with the contracting officer, shall include:

 

                          (1)  Identification of the proposed awardee, with a synopsis of its foreign ownership (include solicitation and other reference numbers to identify the action);

 

                          (2)  General description of the acquisition and performance requirements;

 

                          (3)  Identification of the national security interests involved and the ways in which award of the contract helps advance those interests;

 

                          (4)  A statement as to availability of another entity with the capacity, capability and technical expertise to satisfy defense acquisition, technology base, or industrial base requirements; and

 

                          (5)  A description of any alternate means available to satisfy the requirement, e.g., use of substitute products or technology or alternate approaches to accomplish the program objectives.

 

                    (D)  In accordance with 10 U.S.C. 2536(b)(1)(B), the Secretary of Defense may, in the case of a contract awarded for environmental restoration, remediation, or waste management at a DoD facility, waive the prohibition in paragraph (g)(ii)(A) of this subsection upon¾

 

                          (1)  Determining that¾

 

                              (i)  The waiver will advance the environmental restoration, remediation, or waste management objectives of DoD and will not harm the national security interests of the United States; and

 

                              (ii)  The entity to which the contract is awarded is controlled by a foreign government with which the Secretary is authorized to exchange Restricted Data under section 144 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2164(c)); and

 

                          (2)  Notifying Congress of the decision to grant the waiver.  The contract may be awarded only after the end of the 45-day period beginning on the date the notification is received by the appropriate Congressional committees.

 

              (iii)  A contracting officer shall not enter into or renew a contract with a contractor that is subject to the reporting requirements of 38 U.S.C. 4212(d) pertaining to employment of veterans, but has not submitted the most recent report required by 38 U.S.C. 4212(d) for 1997 or a subsequent year (see 222.1304(b)).

 

209.104-4  Subcontractor responsibility.

Generally, the Canadian Commercial Corporation's (CCC) proposal of a firm as its subcontractor is sufficient basis for an affirmative determination of responsibility.  However, when the CCC determination of responsibility is not consistent with other information available to the contracting officer, the contracting officer shall request from CCC and any other sources whatever additional information is necessary to make the responsibility determination.

 

209.104-70  Solicitation provisions.

 

      (a)  Use the provision at 252.209-7001, Disclosure of Ownership or Control by the Government of a Terrorist Country, in all solicitations expected to result in contracts of $100,000 or more.  Any disclosure that the government of a terrorist country has a significant interest in an offeror or a subsidiary of an offeror shall be forwarded through the head of the agency to the Director of Defense Procurement and Acquisition Policy, ATTN:  OUSD(AT&L)DP/FC, 3060 Defense Pentagon, Washington, DC  20301-3060.

 

      (b)  Use the provision at 252.209-7002, Disclosure of Ownership or Control by a Foreign Government, in all solicitations, including those subject to the procedures in FAR Part 13, when access to proscribed information is necessary for contract performance.

 

      (c)  Use the provision at 252.209-7003, Compliance with Veterans’ Employment Reporting Requirements, in solicitations with a value estimated to exceed the simplified acquisition threshold.

 

209.105-2  Determinations and documentation.

 

      (a)  When the contracting officer considers such action appropriate, the contracting officer must submit a copy of the determination to the appropriate debarring and suspending official (see 209.403).

 

209.106  Preaward surveys.

 

209.106-1  Conditions for preaward surveys.

 

      (a)  If a preaward survey is requested, include the rationale in block 23 of the SF 1403, Preaward Survey of Prospective Contractor (General).

 

209.106-2  Requests for preaward surveys.

 

      (1)  The surveying activity is the cognizant contract administration office as listed in the Federal Directory of Contract Administration Services Components.  When information is required as part of the survey on the adequacy of the contractor's accounting system or its suitability for administration of the proposed type of contract, the surveying activity will obtain the information from the auditor.

 

      (2)  Limited information may be requested by telephone.

 

      (3)  The contracting officer may request a formal survey by telephone but must confirm immediately with SF 1403, Preaward Survey of Prospective Contractor (General).  For a formal survey, send original and three copies of SF 1403, including necessary drawings and specifications.

 

              (a)  List additional factors in item H, Section III of the SF 1403 and explain them in block 23.  For example—

 

                    (i)  Information needed to determine a prospective contractor's eligibility under the Walsh-Healey Public Contracts Act.  (Note that the Walsh-Healey Public Contracts Act, block 12 of Section I, only indicates what the contractor has represented its classification to be under Walsh-Healey.)

 

                    (ii)  Evaluation of a contractor as a planned producer when the offered item is or may appear on the Industrial Preparedness Planning List (IPPL).  When the preaward survey results in a recommendation for award, ask the office responsible for industrial preparedness planning to consider designating the prospective contractor as a planned producer.  If the item is already on the IPPL or the prospective contractor is already a planned producer, note the information in block 23.

 

                    (iii)  Evaluation of the prospective contractor’s performance against small business subcontracting plans.

 

              (c)  On base level preaward surveys, technical personnel from the requiring installation should participate when there is concern about the ability of a prospective contractor to perform a base level service or construction contract.

 

              (d)  Allow more time for—

 

                    (i)  Complex items;

 

                    (ii)  New or inexperienced DoD contractors; and

 

                    (iii)  Surveys with time-consuming requirements, e.g., secondary survey, accounting system review, financial capability analysis, or purchasing office participation.

 

              (e)  Only request those factors essential to the determination of responsibility.  See 253.209-1(a) for an explanation of the factors in Section III, blocks 19 and 20 of the SF 1403.

 

 

 


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