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SUBPART 217.75--ACQUISITION of replenishment parts

(Revised September 17, 2004)



 217.7500 Scope of subpart
 217.7501 General
 217.7502 Spares acquisition integrated with production (SAIP)
 217.7503 Acquisition of parts when data is not available
 217.7504 Limitations on price increases

217.7500  Scope
of subpart.

This subpart provides guidance on additional requirements related to acquisition of replenishment parts (as defined in Appendix E).


217.7501  General.

Departments and agencies—


      (a)  May acquire replenishment parts concurrently with production of the end item.


      (b)  Shall provide for full and open competition when fully adequate drawings and any other needed data are available with the right to use for acquisition purposes (see Part 227).  However—


              (1)  When data is not available for a competitive acquisition, use one of the procedures in  217.7503.


              (2)  Replenishment parts must be acquired so as to ensure the safe, dependable, and effective operation of the equipment.  Where this assurance is not possible with new sources, competition may be limited to the original manufacturer of the equipment or other sources that have previously manufactured or furnished the parts as long as the action is justified.  See 209.270 for requirements applicable to replenishment parts for aviation critical safety items.


      (c)  Shall follow the limitations on price increases in 217.7504.


217.7502  Spares acquisition integrated with production (SAIP).


      (a)  Spares acquisition integrated with production (SAIP) is a technique used to acquire replenishment parts concurrently with parts being produced for the end item.


      (b)  Include appropriately tailored provisions in the contract when SAIP is used.


217.7503  Acquisition of parts when data is not available.

When acquiring a part for which the Government does not have necessary data with rights to use in a specification or drawing for competitive acquisition, use one of the following procedures in order of preference—


      (a)  When items of identical design are not required, the acquisition may still be conducted through full and open competition by using a performance specification or other similar technical requirement or purchase description that does not contain data with restricted rights.  Two methods are—


              (1)  Two-step sealed bidding; and


              (2)  Brand name or equal purchase descriptions.


      (b)  When other than full and open competition is authorized under FAR Part 6, acquire the part from the firm which developed or designed the item or process, or its licensees, provided productive capacity and quality are adequate and the price is fair and reasonable.


      (c)  When additional sources are needed and the procedures in paragraph (a) of this section are not practicable, consider the following alternatives—


              (1)  Encourage the developer to license others to manufacture the parts;


              (2)  Acquire the necessary rights in data;


              (3)  Use a leader company acquisition technique (FAR Subpart 17.4) when complex technical equipment is involved and establishing satisfactory additional sources will require technical assistance as well as data; or


              (4)  Incorporate a priced option in the contract which allows the Government to require the contractor to establish a second source.


      (d)  As a last alternative, the contracting activity may develop a design specification for competitive acquisition through reverse engineering.  Contracting activities shall not do reverse engineering unless—


              (1)  Significant cost savings can be demonstrated; and


              (2)  The action is authorized by the head of the contracting activity.


217.7504  Limitations on price increases.

This section provides implementing guidance for Section 1215 of Pub. L. 98-94 (10 U.S.C. 2452 note).


      (a)  The contracting officer shall not award, on a sole source basis, a contract for any centrally managed replenishment part when the price of the part has increased by 25 percent or more over the most recent 12-month period.


              (1)  Before computing the percentage difference between the current price and the prior price, adjust for quantity, escalation, and other factors necessary to achieve comparability.


              (2)  Departments and agencies may specify an alternate percentage or percentages for contracts at or below the simplified acquisition threshold.


      (b)  The contracting officer may award a contract for a part, the price of which exceeds the limitation in paragraph (a) of this section, if the contracting officer certifies in writing to the head of the contracting activity before award that—


              (1)  The contracting officer has evaluated the price of the part and concluded that the price increase is fair and reasonable; or


              (2)  The national security interests of the United States require purchase of the part despite the price increase.


      (c)  The fact that a particular price has not exceeded the limitation in paragraph (a) of this section does not relieve the contracting officer of the responsibility for obtaining a fair and reasonable price.


      (d)  Contracting officers may include a provision in sole source solicitations requiring that the offeror supply with its proposal, price and quantity data on any government orders for the replenishment part issued within the most recent 12 months.




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