Section 2304. Purchases and contracts: Formal advertising; exceptions (a) Purchases of and contracts for property or services covered by this chapter shall be made by formal advertising. However, the head of an agency may negotiate such a purchase or contract, if— (1) it is determined that such action is necessary in the public interest during a national emergency declared by Congress or the President; (2) the public exigency will not permit the delay incident to advertising; (3) the aggregate amount involved is not more than $2,500. (4) the purchase or contract is for personal or professional services; (5) the purchase or contract is for any service by a university, college, or other educational institution; (6) the purchase or contract is for property or services to be procured and used outside the United States, and the Territories, Commonwealths, and possessions; (7) the purchase or contract is for medicine or medical supplies; (9) the purchase or contract is for perishable or nonperishable subsistence supplies; (10) the purchase or contract is for property or services for which it is impracticable to obtain competition; (11) the purchase or contract is for property or services that he determines to be for experimental, developmental, or research work, or for making or furnishing property for experiment, test, development, or research; (12) the purchase or contract is for property or services whose procurement he determines should not be publicly disclosed because of their character, ingredients, or components; (13) the purchase or contract is for equipment that he 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; (14) the purchase or contract is for technical or special property 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 and competitive bidding might require duplication of investment or preparation already made or would unduly delay the procurement of that property; or (15) the purchase or contract is for property or services for which he determines that the bid prices received after formal advertising are unreasonable as to all or part of the requirements, or where not independently reached in open competition, and for which (A) he has notified 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; (16) he 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; or (17) negotiation of the purchase or contract is otherwise authorized by law. (b) The data respecting the negotiation of each purchase or contract under clauses (1) and (7)-(17) of subsection (a) shall be kept by the contracting agency for six years after the date of final payment on the contract. (c) This section does not authorize (1) the negotiation of a contract to construct or repair any building, road, sidewalk, sewer main, or similar item, unless (A) it is made under clauses (1)–(3)-, (10)-(12), or (15) of subsection (a); or (B) it is to be performed outside the United States; or (2) the erection, repair, or furnishing of any public building or public improvement. (d) Whenever the head of the agency determines it to be practicable, such advance publicity as he considers suitable with regard to the property involved and other relevant considerations shall be given for a period of at least 15 days before making a purchase of or contract for property, or a service, under clause (7) or (8) of subsection (a) involving more than $10,000. (e) A report shall be made to Congress, on May 19 and November 19 each year. of the purchases and contracts made under clauses (11) and (16) of subsection (a) during the period since the date of the last report. The report shall(1) name each contractor; (2) state the amount of each contract; and (3) describe, with consideration of the national security, the property and services covered by each contract. (f) For the purposes of the following laws, purchases or contracts negotiated under this section shall be treated as if they were made with formal advertising: (1) Sections 35-45 of title 41. (2) Sections 276a-276a-5 of title 40. Section 2305. FORMAL ADVERTISEMENTS FOR BIDS; TIME; OPENING; AWARD; REJECTION. (a) Whenever formal advertising is required under section 2304 of this title, the advertisement shall be made a sufficient time before the purchase or contract. The specifications and invitations for bids shall permit such free and full competition as is consistent with the procurement of the property and services needed by the agency concerned. (b) The specifications in invitations for bids must contain the necessary language and attachments, and must be sufficiently descriptive in language and attachments, to permit full and free competition. If the specifications in an invitation for bids do not carry the necessary descriptive language and attachments, or if those attachments are not accessible to all competent and reliable bidders, the invitation is invalid and no award may be made. (c) Bids shall be opened publicly at the time and place stated in the advertisement. Awards shall be made with reasonable promptness by giving written notice to the responsible bidder whose bid conforms to the invitation and will be the most advantageous to the United States, price and other factors considered. However, all bids may be rejected if the head of the agency determines that rejection is in the public interest. (d) If the head of the agency considers that any bid received after formal advertising evidences a violation of the antitrust laws, he shall refer the bid to the Attorney General for appropriate action. Section 2306. KINDS OF CONTRACTS. (a) The cost-plus-a-percentage-of-cost system of contracting may not be used. Subject to this limitation and subject to subsections (b)-(e), the head of an agency may, in negotiating contracts under section 2304 of this title, make any kind of contract that he considers will promote the best interests of the United States. (b) Each contract negotiated under section 2304 of this title shall contain a warranty, determined to be suitable by the head of the agency, that the contractor has employed or retained no person or selling agency to solicit or obtain the contract under an understanding or agreement for a commission, percentage, brokerage, or contingent fee, except a bona fide employee or established commercial or selling agency maintained by him to obtain business. If a contractor breaks such a warranty, the United States may annul the contract without liability or may deduct the commission, percentage, brokerage, or contingent fee from the contract price or consideration. (c) No cost contract, cost-plus-a-fixed-fee contract, or incentive contract may be made under section 2304 of this title, unless the head of the agency determines that such a contract is likely to be less costly to the United States than any other kind of contract or that it is impracticable to obtain property or services of the kind or quality required except under such a contract. (d) The fee for performing a cost-plus-a-fixed-fee contract for experimental, developmental, or research work may not be more than 15 percent of the estimated cost of the contract, not including the fee. The fee for performing a cost-plus-afixed-fee contract for architectural or engineering services for a public work or utility plus the cost of those services to the contractor may not be more than 6 percent of the estimated cost of that work or project, not including fees. The fee for performing any other cost-plus-a-fixed-fee contract may not be more than 10 percent of the estimated cost of the contract, not including the fee. Determinations under this subsection of the estimated costs of a contract or project shall be made by the head of the agency at the time the contract is made. (e) Each cost contract and each cost-plus-a-fixed-fee contract shall provide for notice to the agency by the contractor before the making, under the prime contract, of— (1) a cost-plus-a-fixed-fee subcontract; or (2) a fixed price subcontract or purchase order involving more than $25,000 or 5 percent of the estimated cost of the prime contract. Section 2307. ADVANCE PAYMENTS. (a) The head of any agency may (1) make advance, partial, progress, or other payments under contracts for property or services made by the agency; and (2) insert in bid solicitations for procurement of property or services a provision limiting to small business concerns advance or progress payments. (b) Payments made under subsection (a) may not exceed the unpaid contract price. (c) Advance payments made under subsection (a) may be made only if the contractor gives adequate security and after a determination by the head of the agency that to do so would be in the public interest. Such security may be in the form of a lien in favor of the United States on the property contracted for, on the balance in an account in which such payments are deposited, and on such of the property acquired for performance of the contract as the parties may agree. This lien is paramount to any other liens. Section 2308. ASSIGNMENT AND DELEGATION RESPONSIBILITIES. OF PROCUREMENT FUNCTIONS AND Subject to section 2311 of this title, to facilitate the procurement of property and services covered by this chapter by each agency named in section 2303 of this title for any other agency, and to facilitate joint procurement by those agencies (1) the head of an agency may, within his agency, delegate functions and assign responsibilities relating to procurement; (2) the heads of two or more agencies may be agreement delegate procurement functions and assign procurement responsibilities from one agency to another of those agencies or to an officer or civilian employee of another of those agencies; and (3) the heads of two or more agencies may create joint or combined offices to exercise procurement functions and responsibilities. Section 2309. ALLOCATIONS OF APPROPRIATIONS. (a) Appropriations available for procurement by an agency named in section 2303 of this title may, through administrative allotment, be made available for obligation for procurement by any other agency in amounts authorized by the head of the allotting agency and without transfer of funds on the books of the Department of the Treasury. (b) A disbursing officer of the allotting agency may make any disbursement chargeable to an allotment under subsection (a) upon a voucher certified by an officer or civilian employee of the procuring agency. Section 2310. DETERMINATION AND DECISIONS. (a) Determinations and decisions required to be made under this chapter by the head of an agency may be made for an individual purchase or contract or for a class of purchases or contract. Such a determination or decision is final. (b) Each determination or decision under clauses (11)-(16) of section 2304 (a), section 2306, or section 2307 (c) of this title shall be based on a written finding by the person making the determination or decision. Such a finding is final and shall be kept available in the agency for at least six years after the date of the determination or decision. A copy of the finding shall be submitted to the General Accounting Office with each contract to which it applies. Section 2311. DELEGATION. The head of an agency may delegate, subject to his direction, to any other officer or official of 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 only to a chief officer or official of that agency who is responsible for procurement, and only for contracts requiring the expenditure of not more than $25,000. Section 2312. REMISSION OF LIQUIDATED DAMAGES. Upon the recommendation of the head of an agency, the Comptroller General may remit all or part, as he considers just and equitable, of any liquidated damages assessed for delay in performing a contract, made by that agency, that provides for such damages. Section 2313. EXAMINATION OF BOOKS AND RECORDS OF CONTRACTOR, (a) An agency named in section 2303 of this title is entitled, through an authorized representative, to inspect the plant and audit the books and records of— (1) a contractor performing a cost or cost-plus-a-fixed-fee contract made by that agency under this chapter; and (2) a subcontractor performing any subcontract under a cost or cost-plusa-fixed-fee contract made by that agency under this chapter. (b) Each contract negotiated under this chapter shall provide that the Comptroller General and his representatives are entitled, until the expiration of three years after final payment, to examine any books, documents, papers, or records of the contractor, or any of his subcontrators, that directly pertain to, and involve transactions relating to, the contract or subcontract. Section 2314. LAWS INAPPLICABLE TO AGENCIES NAMED IN SECTION 2303 OF THIS TITLE. Sections 5, 6, 6a, and 13 of title 41 do not apply to the procurement of property or services by the agencies named in section 2303 of this title. TITLE 50-UNITED STATES CODE WAR AND NATIONAL DEFENSE Section CHAPTER 29.-NATIONAL DEFENSE CONTRACTS 1431. Authorization; official approval. 1432. Restrictions. 1433. Public record; examination of records by Comptroller General. 1434. Reports to Congress; publication. 1435. Effective period. SECTION 1431. AUTHORIZATION; OFFICIAL APPROVAL. The President may authorize any department or agency of the Government which exercises functions in connection with the national defense, acting in accordance with regulations prescribed by the President for the protection of the Government, to enter into contracts or into amendments or modifications of con tracts heretofore or hereafter made and to make advance payments thereon, without regard to other provisions of law relating to the making, performance, amendment, or modification of contracts, whenever he deems that such action would facilitate the national defense. The authority conferred by this section shall not be utilized to obligate the United States in an amount in excess of $50,000 without approval by an official at or above the level of an Assistant Secretary or his Deputy, or an assistant head or his deputy, of such department or agency, or by a Contract Adjustment Board established therein. (Pub. L. 85-804, S 1, Aug. 28, 1958, 72 Stat. 972.) SECTION 1432. RESTRICTIONS. Nothing in this chapter shall be construed to constitute authorization hereunder for (a) the use of the cost-plus-a-percentage-of-cost system of contracting; (b) any contract in violation of existing law relating to limitation of profits; (c) the negotiation of purchases of or contracts for property or services required by law to be procured by formal advertising and competitive bidding; (d) the waiver of any bid, payment, performance, or other bond required by law; (e) the amendment of a contract negotiated under section 2304 (s) (15) of Title 10 or under section 252(c) (13) of Title 41, to increase the contract price to an amount higher than the lowest rejected bid of any responsible bidder; or (f) the formalization of an informal commitment, unless it is found that at the time the commitment was made it was impracticable to use normal procurement procedures. (Pub L. 85-804, S 2, Aug. 28, 1958, 72 Stat. 972.) SECTION 1433. PUBLIC RECORD; EXAMINATION OF RECORDS BY COMPTROLLER GENERAL. (a) All actions under the authority of this chapter shall be made a matter of public record under regulations prescribed by the President and when deemed by him not to be detrimental to the national security. (b) All contracts entered into, amended, or modified pursuant to authority contained in this chapter shall include a clause to the effect that the Comptroller General of the United States or any of his duly authorized representatives shall, until the expiration of three years after final payment, have access to and the right to examine any directly pertinent books, documents, papers, and records of the contractor or any of his subcontractors engaged in the performance of and involving transactions related to such contracts or subcontracts. (Pub. L. 85-804, S 3, Aug. 28, 1958, 72 Stat. 972.) Section 1434. REPORTS TO CONGRESS; PUBLICATION. (a) Every department and agency acting under authority of this chapter shall, by March 15 of each year, report to Congress all such actions taken by that department or agency during the preceding calendar year. With respect to actions which involve actual or potential cost to the United States in excess of $50,000, the report shall— (1) name the contractor; (2) state the actual cost or estimated potential cost involved; (3) describe the property or services involved; and (4) state further the circumstances justifying the action taken. With respect to (1), (2), (3), and (4), above, and under regulations prescribed by the President, there may be omitted any information the disclosure of which would be detrimental to the national security. (b) The Clerk of the House and the Secretary of the Senate shall cause to be published in the Congressional Record all reports submitted pursuant to this section. (Pub. L. 85-804, S 4, Aug. 28, 1958, 72 Stat. 972.) Section 1435. EFFECTIVE PERIOD. This chapter shall be effective only during a national emergency declared by Congress or the President and for six months after the termination thereof or until such earlier time as Congress by concurrent resolution, may designate. (Pub. L. 85-804, S 5, Aug. 28, 1958, 72 Stat. 973.) Mr. VINSON. It was enacted following World War II. It was intended to encompass all of the laws and exceptions which were born |