(Revised 1 October 1959)

'3-212 Classified Purchases.

3-212.1 Authority. Pursuant to 10 U.S.C. 2304 (a) (12), purchases and contracts may be negotiated if—

"for property or services whose procurement he [the Secretary] determines should not be publicly disclosed because of their character, ingredients, or components."

3-212.2 Application. The authority of this paragraph 3-212 may be used for purchases or contracts classified "Confidential" or higher, or where because of other considerations, the contract should not be publicly disclosed.

3-212.3 Limitation. In order for the authority of this paragraph 3-212 to be used, the required determination must be made in accordance with the requirements of Part 3 of this Section III. The authority of this paragraph 3-212 shall not be used when negotiation is authorized by any other authority set forth in ASPR 3-201 through 3-218, except as otherwise provided in ASPR 3-204.3.

3-213 Technical Equipment Requiring Standardization and Interchangeability of Parts.

Pursuant to 10 U.S.C. 2304(a)(13), purchases and

8-213.1 Authority. contracts may be negotiated if—

"for equipment that he [the Secretary] determines to be technical equipment whose standardization and the interchangeability of whose parts are necessary in the public interest and whose procurement by negotiation is necessary to assure that standardization and interchangeability."

3-213.2 Application.

(a) The authority of this paragraph 3-213 may be used for procuring additional units and replacement items of specified makes and models of technical equipment and parts, which are for tactical use or for use either in Alaska, Hawaii or outside the remainder of the United States, in theaters of operations, on board naval vessels, or at advanced or detached bases; and which have been adopted as standard items of supply in accordance with procedures prescribed by each respective Department. A current or recurring procurement requirement for the item shall be present. This authority would apply, for example, whenever it is necessary:

(i) to limit the variety and quantity of parts that must be carried in stock;

(ii) to make possible, by standardization, the availability of parts that may be interchanged among items of damaged equipment during combat or other emergency; or

(iii) to procure from selected suppliers technical equipment which is available from a number of suppliers but which would have such varying performance characteristics (notwithstanding detailed specifications and rigid inspection) as would prevent standardization and interchangeability of parts.

(Revised 11 June 1958)

(b) Before making a determination to procure specified makes and models under the authority of this paragraph 3-213, consideration shall be given to:

(i) the feasibility of economical and timely deployment on a se-
lected geographic basis of makes and models already in supply
systems;

(ii) the feasibility of timely standardization of components and
parts under the Defense Standardization Program;

(iii) the effect upon the capability of industry to produce mobili-
zation requirements of all Departments;

(iv) the practicability of interchanging parts and cannibalizing
equipment;

(v) the probability that future procurement of the selected item
of equipment can be effected at reasonable prices;

(vi) whether the standardization will appreciably reduce the variety
and quantity of parts that must be carried in stock;

(vii) the value of similar equipment and its supporting parts on hand;
(viii) the contribution of the standardization to combat support;
(ix) possible savings in training personnel and publishing technical
literature;

(x) whether the standardization will adversely affect existing
coordinated military specifications and standards; and

(xi) the degree to which the current design of the specified make
and model has been changed from the design of equipment of
the same make and model now in the supply system.

(c) In arriving at determinations to standardize under the authority of this paragraph 3-213, the originating Department shall consult with the other Departments in order to assure the full benefit of the standardization.

(d) Actions taken under the authority of this paragraph 3-213 shall be reviewed by the originating Department at least once every two years to determine whether the standardization should be continued, revised, or cancelled.

3-213.3 Limitation. The authority of this paragraph 3-213 shall not be used for initial procurements of equipment and parts, or for the purpose of selecting arbitrarily the equipment of certain suppliers; nor shall it be used unless the Secretary of a Department has determined, in accordance with the requirements of Part 3 of this Section III, that:

(i) the equipment constitutes technical equipment;

(ii) standardization of such equipment and interchangeability of
its parts are necessary in the public interest; and

(iii) procurement of such equipment or of its parts by negotiation
is necessary to assure that standardization and interchange-
ability.

3-213.4 Records and Reports. Each Military Department shall maintain on a current basis a master list of items for which determinations and findings have been made under the authority of this paragraph 3-213. A copy of each such determination and finding shall be furnished to the Assistant Secretary of Defense (Supply and Logistics) within five days after the date thereof.

(Revised 11 June 1958)

3-214 Technical or Specialized Supplies Requiring Substantial Initial Investment or Extended Period of Preparation for Manufacture.

3-214.1 Authority. Pursuant to 10 U. S. C. 2304 (a) (14), purchases and contracts may be negotiated if

"for technical or special property that he [the Secretary] determines to require a substantial initial investment or an extended period of preparation for manufacture and for which he determines that formal advertising and competitive bidding might require duplication of investment or preparation already made, or would unduly delay the procurement of that property."

3-214.2 Application. The authority of this paragraph 3-214 may be used for the procurement of technical or specialized supplies-for example: aircraft, tanks, radar, guided missiles, rockets, and similar items of equipment; major components of any of the foregoing; and any supplies of a technical or specialized nature which may be necessary for the use or operation of any of the foregoing. Such procurement generally involves:

(i) high starting costs which already have been paid for by the Government or by the supplier;

(ii) preliminary engineering and development work that would not be useful to or usable by any other supplier;

(iii) elaborate special tooling already acquired;

(iv) substantial time and effort already expended in developing a prototype or an initial production model; and

(v) important design changes which will continue to be developed by the supplier.

The authority of this paragraph 3-214 will in general be used in situations where it is preferable to place a production contract with the supplier who had developed the equipment, and thereby either assure to the Government the benefit of the techniques, tooling, and equipment already acquired by that supplier, or avoid undue delay arising from a new supplier having to acquire such techniques, tooling and equipment.

3-214.3 Limitation. The authority of this paragraph 3-214 shall not be used unless and until the Secretary has determined, in accordance with the requirements of Part 3 of this Section III, that:

(i) the supplies are of a technical or specialized nature requiring a substantial investment or an extended period of preparation for manufacture; and

(ii) procurement by formal advertising and competitive bidding either

(A) may require duplication of investment or preparation already made, or

(B) will unduly delay procurement.

3-215 Negotiation After Advertising.

3-215.1 Authority. Pursuant to 10 U. S. C. 2304 (a) (15), purchases and contracts may be negotiated if

"for property or services for which he [the Secretary] determines that the bid prices received after formal advertising are unreasonable as to all or part of the requirements, or were not independently reached in open competition, and for which (A) he has notified

[ASPR 3-215.1 continued on next page]

(Revised 1 October 1959)

each responsible bidder of intention to negotiate and given him reasonable opportunity to negotiate; (B) the negotiated price is lower than the lowest rejected bid of any responsible bidder, as determined by the head of the agency; and (C) the negotiated price is the lowest negotiated price offered by any responsible supplier." 3-215.2 Limitation. The authority of this paragraph 3-215 shall not be used unless the Secretary has determined, in accordance with the requirements of Part 3 of this Section III, that the bid prices, after formal advertising for such supplies or services, are unreasonable or were not independently reached in open competition. Also, after such determination by the Secretary and after rejection of all bids, no contract shall be negotiated under this authority unless:

(i) prior notice of intention to negotiate and a reasonable opportunity to negotiate have been given by a contracting officer to each responsible bidder which submitted a bid in response to the invitation for bids;

(ii) the negotiated price is lower than the lowest rejected bid price of a responsible bidder, as determined by the Secretary; and

(ii) the negotiated price is the lowest negotiated price offered by any

responsible supplier.

Moreover any evidence of bids not independently reached shall be forwarded to the Department of Justice, as provided in ASPR 2-403.

3-216 Purchases in the Interest of National Defense or Industrial Mobilization.

3-216.1 Authority. Pursuant to 10 U.S.C. 2304 (a) (16), purchases and contracts may be negotiated if—

"he [the Secretary] determines that (A) it is in the interest of national defense to have a plant, mine, or other facility, or a producer, manufacturer, or other supplier, available for furnishing property or services in case of a national emergency; or (B) the interest of industrial mobilization in case of such an emergency, or the interest of national defense in maintaining active engineering, research, and development, would otherwise be subserved."

3-216.2 Application. The authority of this paragraph 3-216 may be used to effectuate such plans and programs as may be evolved under the direction of the Secretary to provide incentives to manufacturers to maintain, and keep active, engineering and design staffs and manufacturing facilities available for mass production. The following are illustrative of circumstances (with respect to which this authority may be used:

(i) when procurement by negotiation is necessary to keep vital facilities or suppliers in business; or to make them available in the event of a national emergency;

(ii) when procurement by negotiation with selected suppliers is necessary in order to train them in the furnishing of critical supplies to prevent the loss of their ability and employee skills, or to maintain active engineering, research, and development work; or

(iii) when procurement by negotiation is necessary to maintain properly balanced sources of supply for meeting the requirements of procurement programs in the interest of industrial mobilization.

(Revised 11 June 1958)

3-216.3 Limitation. The authority of this paragraph 3-216 shall not be used unless and until the Secretary has determined, in accordance with the requirements of Part 3 of this Section III, that:

(i) it is in the interest of national defense to have a particular plant, mine, or other facility or a particular producer, manufacturer, or other supplier available for furnishing supplies or services in case of a national emergency, and negotiation is necessary to that end; (ii) the interest of industrial mobilization, in case of a national emergency, would be subserved by negotiation with a particular supplier;

or

(iii) the interest of national defense in maintaining active engineering, research, and development, would be subserved by negotiation with a particular supplier.

3-216.4 Records and Reports. Each Department is required to maintain a record of the name of each contractor with whom a contract has been entered into pursuant to the authority of this paragraph 3-216, together with the amount of the contract and (with due consideration given to the national security) a description of the work required to be performed thereunder. These records, and reports based thereon, are maintained through the Department of Defense procurement reporting system described in ASPR 1-110 and 16-807. 3-217 Otherwise Authorized by Law.

3-217.1 Authority. Pursuant to 10 U.S.C. 2304(a)(17), purchases and contracts may be negotiated if

"otherwise authorized by law."

3-217.2 Application. The authority of this paragraph 3-217 shall be used only if, and to the extent, approved for any Military Department and in accordance with Departmental procedures.

3-218 Construction Work.

3-218.1 Application. Contracts to construct or repair any building. road, sidewalk, sewer, main, or similar item, are subject to 10 U.S.C. 2304 (c) and this paragraph 3-218.

3-218.2 Limitation on Authority To Negotiate Contracts.

(a) Work in the United States. Contracts for construction work to be performed within the United States shall be formally advertised and may not be negotiated unless authorized pursuant to the following subsections of 10 U.S.C. 2304(a): (1), (2), (3), (10), (11), (12), or (15) (see respectively, ASPR 3-201, 3-202, 3-203, 3-210, 3-211, 3-212, and 3-215).

(b) Work Outside of the United States. Contracts for construction work to be performed outside of the United States shall be formally advertised and may not be negotiated unless authorized pursuant to subsections (1) through (17) of 10 U.S.C. 2304 (a) (ASPR 3-201 through 3-217), as appropriate (note that such contracts to be performed in the Territories or possessions of the United States, and Puerto Rico, may not be negotiated pursuant to 10 U.S.C. 2304 (a) (6) (ASPR 3-206)).

3-218.3 Citation of Authority To Negotiate. Negotiated contracts for construction work shall cite as authority for their negotiation the applicable subsection (1) through (17) of 10 U.S.C. 2304(a).