(3) The safeguards established to insure fair pricing after approval to standardize is received.

(b) Application:

(1) Except as noted in subparagraph (6) of this paragraph, requests for procurement standardization action may be initiated by an individual organization, through appropriate channels, to the Directorate of Supply and Services, Hq USAF (AFSSSDB).

(2) The Directorate of Supply and Services will forward the request to the office of primary responsibility for recommendations on disposition and priority rating to be placed on the item of equipment involved. Recommendations or standardization action with appropriate rating will then be forwarded by the Director of Supply and Services to Air Force Departmental Standardization Office (AFSPDPD).

(3) In arriving at its decision, Hq USAF will apply the criteria and requirements of § 3.213-2 of this title.

If it is decided that standardization is warranted, AFSPDPD will forward its recommendations, supported by substantiating data, in quadruplicate, to Hq USAF (AFSSSDB) for coordination with the office of primary responsibility and subsequent submission to the Secretary of the Air Force or his designated representative for findings and determinations.

(4) To facilitate processing, each request will be limited to a single item of supply or group of related items.

(5) In transmitting AF initiated Military Interdepartmental Purchase Requests (MIPRs) requiring procurement of specific technical commercial-type items of equipment for reasons of standardization, the initiating activity will attach a copy of the approved determination to standardize, signed by the Assistant Secretary of the Air Force (Materiel).

(6) Request for approval to standardize fixed-type equipment under Military Construction Programs will be transmitted by the Air Force Regional Civil Engineer (AFRCE) or major air command to the Director of Civil Engineering, Hq USAF, for necessary Air Staff action and secretarial approval.

[28 F.R. 3388, Apr. 6, 1963, as amended at 29 F.R. 2497, Feb. 15, 1964]

§ 1003.214 Technical or specialized supplies requiring substantial initial investment or extended period of preparation for manufacture.

[28 F.R. 3388, Apr. 6, 1963]

§ 1003.214-50 Format and justification. (a) Following is aproved format for determinations and findings under 10 U.S.C. 2304 (a) (14) (§ 3.214 of this title): DEPARTMENT OF THE AIR FORCE

INDIVIDUAL DETERMINATIONS AND FINDINGS

Authority To Negotiate Contract

1. This procurement will consist of (describe the items being procured). Supporting items or services will be adequately defined so that, when read in context with the supporting documentation, there is no ambiguity about the scope of authority to negotiate. For example, “certain spare parts," "engineering services required for installation and testing," or "that aerospace ground equipment which is both initial and peculiar” are considered adequate descriptions for purposes of this paragraph 1.

2. Authority to Negotiate for Spare Parts (exclude when not applicable). The authority herein granted to negotiate for spare parts is limited to those spare parts which are determined, not later than 90 days prior to the scheduled acceptance of the last article under the contract, to be necessary to support the end items being procured under authority of this determination and findings and are not identical to parts previously procured by the Air Force on other than the contract to which this determination and finding is applicable.

(a) (Not applicable to the Ballistic and Space Systems Divisions.) The authority herein granted to negotiate for spare parts is limited to those spare parts which are not identical to parts previously procured by the Air Force and which are determined, not later than 90 days prior to the scheduled acceptance of the last article under the contract, to be necessary to support the end items being procured under authority of this determinations and findings.

(b) (Applicable to the Ballistic and Space Systems Divisions until such time as the single program policy and related provisions are implemented.) The authority herein granted to negotiate for spare parts is limited to the purchase of initial spare parts and will not be construed to allow deviation from applicable regulations governing the determination of suitability of individual items of replenishment spare parts for procurement through competition preferably by formal advertising.

3. In this paragraph, establish that the property to be procured is of a technical or specialized nature. Set forth the peculiar facts and circumstances which will clearly justify the determination that the supplies are of a technical or specialized nature re

quiring (either or both): a substantial investment or an extended period of preparation for manufacture.

(a) If it is to be determined that substantial investment is required, set forth an estimate of the dollars specifically expended in preparing for production of the items involved. Further, state the estimated value of the investment which would be duplicated should a source other than the one which has already produced the item be awarded the contract. This determination should not be used to avoid duplication of private investment unless this duplication would be likely to result in additional cost to the Government.

(b) If it is to be determined that an extended period of preparation for manufacture is required, include such facts as (1) the time already spent by the present supplier in acquiring the techniques, know-how, and experience necessary for producing the item, and (ii) the period of preparation time which would have to be duplicated by a source not having the background experience in the item and the impact thereof on the required delivery schedule.

4. Include a statement substantially as follows: Based on the findings above made, I hereby determine that the proposed procurement is for technical or special property requiring (a substantial initial investment) (an extended period of preparation for manufacture) 1 and that formal advertising (would result in additional cost to the Government by reason of duplication of investment) (would result in duplication of necessary preparation already made and would unduly delay procurement).1

5. Upon the basis of the determinations and findings above, I hereby authorize the negotiation of a contract for this procurement pursuant to 10 U.S.C. 2304 (a) (14).

(b) Two distinct but interrelated categories of information will be set forth in narrative form in the letter of transmittal requesting determinations and findings under 10 U.S.C. 2304 (a) (14). The first category will contain facts conclusively demonstrating compliance with the legal requirements for negotiation. The second category will cover the general history of previous procurements of the items as known to the buyer without detailed research and the current procurement plan for the item including actions taken or planned to develop a competitive posture.

(1) Category 1-Legal Sufficiency— will contain the following data:

(i) Adequate description both in laymen's terms and by specific nomenclature of principal and supporting items

1 Insert one or both of the phrases in parentheses, as appropriate.

or services to be procured under authori of proposed determinations and finding

(ii) An explanation of why the bas item being procured constitutes techn cal and special property.

(iii) The estimated price or cost of th quantities which may be procured und the reasonably firm procurement pr gram as defined in § 1003.306(d).

(iv) Where duplication of a substa tial initial investment is relied upon the basis for satisfying the legal requir ment, the analysis of the duplication investment will cover the following:

(a) The elements of cost included computation of Government's contractor's original investment, e. research, development, facilities, ar special tools.

(b) How the quantum of the Gover ment's and contractor's investme which would be duplicated was dete mined.

(v) Where duplication of an extende period of preparation for manufacture relied upon as a basis or the basis fo satisfying the legal requirement, it mu be clearly demonstrated that the undu delay created by the use of formal adver tising would be prejudicial to the A mission. Where corrective action for th future is indicated such will be discusse under Category 2 below. In addition, the analysis for use of this reason will includ the following:

(a) Description of major categorie of work (e.g., development of a proto type, tooling-up for production, trainin of personnel) considered to constitut preparation for production.

(b) What elements of preparatio would have to be duplicated by othe qualified but inexperienced producers.

(c) How the total preparation tim which would be duplicated at this tim was generaly estimated.

(2) Category 2-History of Previou Procurements for End Items and Cu rent and Future Procurement Plans-wi contain the following data, as illustrate in subdivision (vi) of this subparagrap to the extent readily available withou detailed research:

(i) How present producer was initiall selected.

(ii) Efforts to establish competitiv sources and what impediments must b overcome to develop a competitive pos ture. (For example: There are man cases where future requirements for a item which is the subject of the reques for determinations and findings can b

procured competitively if it were possible to live with the procurement lead time of inexperienced but qualified producers. Generally, in this situation funding imitation is the impediment to be overcome and corrective action as shown in ubdivision (v) of this subparagraph will be taken.)

(iii) Considerations given to splitting he current procurement into quantities mmediately required and those which can be delayed in order to obtain competition.

(iv) Specific type of contract contemplated.

(v) To alert requiring, programing, and procuring activities to bring about an earlier release of future years buying programs and funds therefor, the following information will be acquired and furnished with each D&F request for items which could be competitively procured if it were possible to live with the procurement lead time of a qualified but inexperienced producer:

(vi) Digest examples:

(a) The X Corporation is presently developing the equipment under a competitively awarded contract which calls for a prototype, 19 production units, and engineering data adequate for competitive procurement. The prototype is scheduled for final acceptance, testing, and evaluation in October 1961 and the procurement data to be delivered in the future will be based on the prototype as finally approved and accepted. It is not possible to defer this procurement until said data is available for competitive procurement because of the critical delivery requirements.

(b) The quantities to be negotiated with the X Corporation at an estimated price of $473,610 are the minimum required to meet critical installations and represent only a portion of the current AF requirements. Additional requirements in the estimated amount of $426,645 will be procured competitively. This will be the third production contract for the equipment. The initial contract was awarded to the Y Corporation pursuant to two-step advertising procedures but Y has not yet been able to meet the required reliability requirements. Accordingly, X was asked to conduct the development on a product improvement contract and X was awarded the second production contract.

(c) The X Corporation developed the equipment for the Air Force in 1949 and furnished all equipments to satisfy AF requirements through 1957. There were no procurements during 1958 and 1959. In early 1959, responsibility for procurement of the equipment was transferred to the Z Air Materiel Area. This is the second production contract for the equipment to be issued by Z; the first was dated June 30, 1961. By letter dated June 2, 1961, Commander of Z directed his in-service engineering office to develop a specification and procurement package suitable for competitive procurement. The development of said procurement package is underway and it is expected that it will entail one year of effort to complete. It is planned to complete future equipment requirements, possibly as soon as July 1, 1962.

(d) The equipment will be procured according to MIL-D-1489 (USAF). This specification is considered adequate for formal advertising; however, it is not possible to place this procurement by formal advertising because it is essen

tial that the required delivery schedule be satisfied. An inexperienced producer could not possibly comply with the schedule because he would, of necessity, have to duplicate preparation already made as set forth under category 1 (subparagraph (1) of this paragraph). To obtain the necessary lead time for future competitive procurement of this equipment, action will be taken to include this item in the December 1961 request for Pre-Buy release of the FY 63 program requirements. Also, the appropriate AMA has been requested to initiate their FY 62 requirements at the earliest practical date and to forward advance copies of "planning" purchase requests as soon as possible.

(c) Note that there are alternative combinations of circumstances which permit negotiation under 10 U.S.C. 2304 (a) (14). All elements pertinent to such combinations, which are cited in the determinations and findings, must be substantiated in the accompanying request, otherwise they will not be included in the determinations and findings. In addition, where there has been substantial initial investment or extended period of preparation in the case of more than one supplier the above information will be furnished for each supplier. authority provided by this section is intended primarily to apply where there is only one such supplier. It will generally not be available where there are more than three suppliers.

The

[28 F.R. 3388, Apr. 6, 1963, as amended at 29 F.R. 2497, Feb. 15, 1964; 29 F.R. 15121, Nov. 10, 1964]

§ 1003.215 Negotiation after advertising.

[27 F.R. 2405, Mar. 14, 1962]

§ 1003.215-50 Application.

The authority of 10 U.S.C. 2304 (a) (15) can be invoked for all or only a portion of a specific procurement. Requests for determinations and findings to negotiate under this authority should state: (a) The range of bid prices received and reasons why these prices (or some of them) are deemed unreasonable, or (b) evidence that the bid prices have not been independently arrived at in open competition. The letter of transmittal will set forth the estimated cost of the proposed procurement.

[27 F.R. 2405, Mar. 14, 1962]

Authority To Negotiate Contract

1. This procurement is for the modific tion of 8 B-36 Docks for KC-135 Aircra

2. I hereby find that the proposed procur ment was solicited by advertising und Invitation for Bid 17-600-58-3, dated Augu 1, 1957. The only bid received offered lump sum price of $268,660 for basic bid a $244,660 for alternate bid, which were co siderably higher than the estimated proje price. This difference is considered exce sive as it exceeds the highest project est mated price by over $100,000.

3. Based on the findings above made, hereby determine that the lowest rejecte bid prices of a reasonable bidder obtaine through advertising were $268,660 for bas bid and $244,660 for alternate bid and tha such prices for this modification are no reasonable.

4. Upon the basis of the determination and findings above, I hereby authorize th negotiation of a contract for this procure ment pursuant to 10 U.S.C. 2304 (a) (15), pro vided that prior notice of intention t negotiate, and a reasonable opportunity t negotiate, be given to each responsible bid der who submitted a bid in response to th invitation for bids, the negotiated prices lower than the lowest rejected bids of responsible bidder, as determined above, an the negotiated prices be the lowest nego tiated prices offered by a responsibl

1003.217 Otherwise authorized by law. 27 F.R. 2405, Mar. 14, 1962]

1003.217-2 Application.

(a) Except as indicated in paragraphs b) through (e) of this section, conracts will be negotiated under this auhority only upon approval of the Secreary. Requests for approval will conain a statement of pertinent facts and easons therefor, and will be transmitted ccording to § 1003.306.

(b) Transportation services by comaon carriers will be negotiated under uthority of section 321, Part III, Intertate Commerce Act, September 18, 1940, 9 U.S.C. 65.

(c) Procurements negotiated pursuant o section 406 of Title IV of Public Law 145 (84th Congress).

(d) Blind-made supplies purchased hrough National Industries for the Blind is prescribed in § 5.504-2 of this title, will be negotiated under authority of the Act of June 25, 1938, c. 697, section 3, 52 Stat. 1196 (41 U.S.C. 48).

(e) Procurements negotiated pursuant to section 15, Small Business Act, 15 U.S.C. 644 (Public Law 536, 85th Congress, as amended).

[27 F.R. 2405, Mar. 14, 1962, as amended at 27 F.R. 6269, July 3, 1962; 29 F.R. 4096, Mar. 28, 1964]

ment) to be developed by or incorporated in the production end item by the contractor(s) will be itemized and explained. When the determinations and findings covers a weapon or support system, the major subsystems only will be itemized. When it covers a major subsystem, the major CFE equipments and components will be itemized. CFE items which are not within the scope of the approved determinations and findings will be listed in the letter forwarding the signed determinations and findings.

(b) Determinations and findings signed by the Secretary of the Air Force do not in any instance constitute program or project approval. Authority to negotiate is limited, except for those procurements specifically exempt from provisions of DOD Directive 7200.4, to that portion of the procurement or program which is currently authorized at the time of negotiation or within the FY of the issuance of the determinations and findings, whichever is later. To the extent required by § 1003.306 (e), subsequent negotiations which result in increasing the scope of the contract will be covered by additional determinations and findings.

(c) Under current laws and regulations governing negotiated procurements in which a Secretarial Determinations and Findings is required, such Determinations and Findings must be executed before a Request for Proposal can be issued by the Air Force, or negotiations otherwise begun. At that early stage of a research and development program the technical aspects of the program often have not been determined sufficiently to permit final technical approval by SAF-RD. Consequently, in any case where a Determination and Findings under 10 U.S.C. 2304 (a) (11) (§ 3.211 of this title) is approved with only preliminary approval as to technical validity, the procuring activity must obtain specific notification of final technical approval by SAF-RD prior to obligation. Similar technical approval must be obtained for any subsequent extension of the period of contract performance beyond that previously approved, or for any substantial change in the nature or extent of the work authorized. Where doubt exists as to extent of authorization, clarification should be sought. This approval will be furnished to the contracting officer by direction/authorization from Hq USAF, which will site approval by SAF-RD, reference the perti