Agriculture Acquisition Regulation (AGAR), 60582-60598 [2024-15329]

Agencies

• DEPARTMENT OF AGRICULTURE
• Office of the Secretary

[Federal Register Volume 89, Number 144 (Friday, July 26, 2024)]
[Proposed Rules]
[Pages 60582-60598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-15329]


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DEPARTMENT OF AGRICULTURE

Office of the Secretary

48 CFR Chapter 4

[Docket No. USDA-2024-0005]
RIN 0599-AA28


Agriculture Acquisition Regulation (AGAR)

AGENCY: Office of the Secretary, USDA.

ACTION: Proposed rule.

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SUMMARY: The United States Department of Agriculture (USDA) is 
proposing to make amendments to the Agriculture Acquisition Regulation 
(AGAR) to align the AGAR with changes to acquisition law, regulations, 
and internal USDA policies since the AGAR's last major revision in 
1996.

DATES: Interested parties should submit written comments on or before 
August 26, 2024, to be considered in the formation of the final rule.

ADDRESSES: Submit comments in response to the proposed rule to the 
Federal eRulemaking portal at https://www.regulations.gov by searching 
for ``AGAR.'' Follow the instructions provided on the ``Comment Now'' 
screen. If your comment cannot be submitted using Regulations.gov, 
email the point of contact in the FOR FURTHER INFORMATION CONTACT 
section of this document for alternate instructions.

FOR FURTHER INFORMATION CONTACT: Crandall Watson, Procurement Policy 
Division, Office of Contracting and Procurement, USDA, Telephone: (202) 
617-7067; Email: [email protected].

SUPPLEMENTARY INFORMATION: This rulemaking is necessary to update the 
AGAR located in 48 CFR parts 401 through 499.

I. Background

    The AGAR implements the Federal Acquisition Regulation (FAR) (48 
CFR ch. 1) where further implementation is needed, and supplements the 
FAR when coverage is needed for subject matter not covered by the FAR. 
USDA

[[Page 60583]]

identified parts of the AGAR which required updating or streamlining 
based on updates to acquisition law, regulations, and internal USDA 
policies. USDA's review indicated that almost all parts of the AGAR 
required revision. Accordingly, USDA has reviewed and revised 
substantially all parts of the AGAR.

What we're proposing in terms of changes?

    USDA is proposing to make administrative amendments to the AGAR to 
align the AGAR with changes to acquisition law, regulations, and 
internal USDA policies since the AGAR's last major revision. There are 
many aspects that are no longer relevant and are consequently deleted 
or revised as necessary. Also, there are various parts of the FAR that 
have been updated since the AGAR's last revision, many of which compel 
USDA to establish agency-specific guidance on how to comply with the 
newer FAR requirements.

II. Procedural Requirements

Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This proposed rule is an internal rule of agency procedure and 
therefore is not a significant regulatory action under Executive Order 
12866.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 
601 et seq., generally requires an agency to prepare a regulatory 
flexibility analysis of any rule subject to the notice and comment 
rulemaking requirements under the Administrative Procedure Act (5 
U.S.C. 553) or any other statute. Under section 605(b) of the RFA, 
however, if the head of an agency certifies that a rule will not have a 
significant impact on a substantial number of small entities, the 
statute does not require the agency to prepare a regulatory flexibility 
analysis.
    The proposed changes would update the AGAR to bring it up to date 
and to make sure correspondence with the FAR is maintained. The 
proposed rule would amend the AGAR to correct and update internal 
references to the FAR; to remove sections supplementing material that 
has been removed from the FAR; and to update designations of USDA. 
Therefore, pursuant to section 605(b), USDA certifies that this 
proposed rule, if promulgated, will not have a significant impact on a 
substantial number of small entities.

Paperwork Reduction Act

    The proposed rule does not contain any information collection 
requirements that require the approval of the Office of Management and 
Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

List of Subjects

48 CFR Part 401

    Government procurement, Reporting and recordkeeping requirements.

48 CFR Parts 402, 405 Through 406, 411 Through 416, 434 Through 437, 
and 447 Through 470

    Government procurement.

48 CFR Part 403

    Antitrust, Conflict of interest, Government procurement.

48 CFR Part 404

    Classified information, Government procurement.

48 CFR Part 408

    Government procurement, Printing.

48 CFR Part 419

    Government procurement, Small businesses.

48 CFR Part 422

    Equal employment opportunity, Government procurement, Individuals 
with disabilities, Labor.

48 CFR Part 423

    Air pollution control, Government procurement, Occupational safety 
and health, Water pollution control.

48 CFR Part 425

    Foreign currencies, Foreign trade, Government procurement.

48 CFR Part 428

    Government procurement, Insurance, Surety bonds.

48 CFR Parts 430 Through 432

    Accounting, Government procurement.

48 CFR Part 433

    Administrative practice and procedure, Government procurement.

48 CFR Part 445

    Government procurement, Government property.


0
Accordingly, for the reasons set out in the preamble, and under the 
authority of 5 U.S.C. 301 and 40 U.S.C. 486(c), USDA proposes to revise 
and republish 48 CFR chapter 4 to read as follows:

CHAPTER 4--DEPARTMENT OF AGRICULTURE

SUBCHAPTER A--GENERAL

PART 400--[RESERVED]
PART 401--AGRICULTURE ACQUISITION REGULATION SYSTEM
PART 402--DEFINITIONS OF WORDS AND TERMS
PART 403--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS
PART 404--ADMINISTRATIVE AND INFORMATION MATTERS

SUBCHAPTER B--ACQUISITION PLANNING

PART 405--PUBLICIZING CONTRACT ACTIONS
PART 406--COMPETITION REQUIREMENTS
PART 407--[RESERVED]
PART 408--REQUIRED SOURCES OF SUPPLIES AND SERVICES
PARTS 409 and 410--[RESERVED]
PART 411--DESCRIBING AGENCY NEEDS
PART 412--ACQUISITION OF COMMERICAL ITEMS

SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES

PART 413--SIMPLIFIED ACQUISITION PROCEDURES
PART 414--SEALED BIDDING
PART 415--CONTRACTING BY NEGOTIATION
PART 416--TYPES OF CONTRACTS
PARTS 417 AND 418--[RESERVED]

SUBCHAPTER D--SOCIOECONOMIC PROGRAMS

PART 419--SMALL BUSINESS PROGRAMS
PARTS 420 AND 421--[RESERVED]
PART 422--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
PART 423--ENVIRONMENT, SUSTAINABLE ACQUISITION, AND MATERIAL SAFETY
PART 424--[RESERVED]
PART 425--FOREIGN ACQUISITION
PART 426--OTHER SOCIOECONOMIC PROGRAMS

SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS

PART 427--[RESERVED]
PART 428--BONDS AND INSURANCE
PART 429--[RESERVED]
PART 430--COST ACCOUNTING STANDARDS ADMINISTRATION
PART 431--CONTRACT COST PRINCIPLES AND PROCEDURES
PART 432--CONTRACT FINANCING
PART 433--PROTESTS, DISPUTES AND APPEALS

[[Page 60584]]

SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING

PART 434--MAJOR SYSTEM ACQUISITION
PART 435--[RESERVED]
PART 436--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
PART 437--SERVICE CONTRACTING
PARTS 438 THROUGH 441--[RESERVED]

SUBCHAPTER G--CONTRACT MANAGEMENT

PARTS 442 THROUGH 444--[RESERVED]
PART 445--GOVERNMENT PROPERTY
PARTS 446 THROUGH 448--[RESERVED]
PART 449--TERMINATION OF CONTRACTS
PART 450--EXTRAORDINARY CONTRACTUAL ACTIONS AND THE SAFETY ACT
PART 451--[RESERVED]

SUBCHAPTER H--CLAUSES AND FORMS

PART 452--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
PARTS 453 THROUGH 469--[RESERVED]

SUBCHAPTER I--FOOD ASSISTANCE PROGRAMS

PART 470--COMMODITY ACQUISITIONS
PARTS 471 THROUGH 499--[RESERVED]

SUBCHAPTER A--GENERAL

PART 400--[RESERVED]
PART 401--AGRICULTURE ACQUISITION REGULATION SYSTEM
Subpart 401.1--Purpose, Authority, Issuance
Sec.
401.101 Purpose.
401.103 Authority.
401.104 Applicability.
401.105 Issuance.
401.105-1 Publication and code arrangement.
401.105-2 Arrangement of regulations.
401.105-3 Copies.
401.170 Electronic access to regulatory information.
Subpart 401.2--Administration
401.201 Maintenance of the FAR.
401.201-1 The two councils.
Subpart 401.3--Agency Acquisition Regulations
401.301 Policy.
401.304 Agency control and compliance procedures.
401.370 Exclusions.
401.371 USDA Contracting Desk Book.
401.372 Departmental directives.
Subpart 401.4--Deviations From the FAR and AGAR
401.402 Policy.
401.403 Individual deviations.
401.404 Class deviations.
Subpart 401.6--Career Development, Contracting Authority, and 
Responsibilities
401.601 General.
401.602 Contracting officers.
401.602-3 Ratification of unauthorized commitments.
401.603 Selection, appointment, and termination of appointment for 
contracting officers.
401.603-1 General.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 401.1--Purpose, Authority, Issuance


401.101  Purpose.

    The United States Department of Agriculture's (USDA's) Acquisition 
Regulation (AGAR) provides for the codification and publication of 
uniform policies and procedures for acquisitions by contracting 
activities within USDA. The purpose of the AGAR is to implement the 
Federal Acquisition Regulation (FAR), where further implementation is 
needed, and to supplement the FAR when coverage is needed for subject 
matter not covered in the FAR. The AGAR is not by itself a complete 
document, as it must be used in conjunction with the FAR.


401.103  Authority.

    The AGAR and subsequent amendments are issued under 5 U.S.C. 301 
and 40 U.S.C. 486(c). The Senior Procurement Executive (SPE) has the 
delegated authority to transmit Departmental acquisition regulations.


401.194  Applicability.

    The FAR and AGAR apply to all USDA acquisitions of supplies and 
services (including construction) which obligate appropriated funds, 
unless otherwise specified or excepted by law.


401.103  Issuance.


401.105-1  Publication and code arrangement.

    (a) The AGAR is codified in the Code of Federal Regulations (CFR) 
as chapter 4 of title 48, Federal Acquisition Regulations System, to 
implement and supplement chapter 1 which constitutes the FAR. Parts 400 
through 499 of this title have been assigned to USDA by the Office of 
the Federal Register.
    (b) The AGAR and its subsequent changes are published in:
    (1) Daily issues of the Federal Register;
    (2) Cumulative form in the CFR; and
    (3) Electronic form on the USDA Departmental Administration 
procurement website (see AGAR 401.170).
    (c) Section 553(a)(2) of the Administrative Procedure Act, 5 U.S.C. 
553, provides an exception from the standard public rulemaking 
procedures to the extent that the rule involves a matter relating to 
agency management or personnel or to public property, loans, grants, 
benefits, or contracts.
    (d) The AGAR may be revised from time to time in accordance with 
the rulemaking procedures of the Administrative Procedure Act. The USDA 
is also required to publish for public comment procurement regulations 
in the Federal Register, pursuant to the Office of Federal Procurement 
Policy Act (41 U.S.C. 418b), and FAR 1.301.


401.105-2  Arrangement of regulations.

    AGAR coverage parallels the FAR in format, arrangement, and 
numbering system. However, subdivisions below the section and 
subsection levels may not always correlate directly to FAR designated 
paragraphs and subparagraphs.


401.105-3  Copies.

    Copies of the AGAR published in the CFR form may be purchased from 
the Superintendent of Documents, Government Printing Office, 
Washington, DC 20402. Requests should reference chapter 4 of title 48 
CFR.


401.170  Electronic access to regulatory information.

    The USDA procurement website provides access to the AGAR, AGAR 
amendments (circulars), the USDA Contracting Desk Book, and other USDA 
procurement policy and guidance.

Subpart 401.2--Administration


401.201  Maintenance of the FAR.


401.201-1  The two councils.

    (a) USDA's representative on the Civilian Agency Acquisition 
Council is designated by the SPE.
    (b) USDA Office of Contracting and Procurement, Procurement Policy 
Division will coordinate proposed FAR revisions within USDA.

Subpart 401.3--Agency Acquisition Regulations


401.301  Policy.

    (a) The SPE, subject to the authorities in AGAR 401.103 and FAR 
1.301, may issue and publish Departmental regulations, that together 
with the FAR constitute Department-wide policies, procedures, 
solicitation provisions, and contract clauses governing the contracting 
process or otherwise controlling the relationship between USDA 
(including any of its contracting activities) and contractors or 
prospective contractors.
    (b) Each designated Mission Area senior contracting official is 
authorized to issue or authorize the issuance of, at any organizational 
level, internal guidance which does not have a significant effect 
beyond the internal

[[Page 60585]]

operating procedures of the activity, or a significant cost or 
administrative impact on offerors or contractors. Internal guidance 
issued by contracting activities will not be published in the Federal 
Register. Mission Area contracting leadership shall ensure that the 
guidance, procedures, or instructions issued--
    (1) Are consistent with the policies and procedures contained in 
this regulation and the USDA Contracting Desk Book;
    (2) Follow the format, arrangement, and numbering system of this 
regulation to the extent practicable;
    (3) Contain no material which duplicates, paraphrases, or is 
inconsistent with this regulation; and
    (4) Are numbered and identified by use of alphabetical suffices to 
the chapter number as follows:
    (i) Marketing and Regulatory Programs (MRP).
    (ii) Research, Education and Economics (REE).
    (iii) Food, Nutrition and Consumer Services (FNCS).
    (iv) Natural Resources and Environment (NRE).
    (v) Farm Production and Conservation (FPAC).
    (vi) Food Safety and Inspection Services (FSIS).
    (vii) [Reserved]
    (viii) Departmental Administration (DA) or Departmental Management 
(DM).
    (ix) [Reserved]
    (x) Rural Development (RD).


401.304  Agency control and compliance procedures.

    (a) The AGAR System is under the direct oversight and control of 
the SPE, who is responsible for review and issuance of all Department-
wide acquisition regulations published in the Federal Register to 
assure compliance with FAR part 1.
    (b) The SPE is also responsible for review and issuance of 
unpublished, Department-wide internal guidance under the AGAR System.
    (c) The Mission Area senior contracting official is responsible for 
establishment and implementation of formal procedures for oversight and 
control of unpublished internal guidance issued within the contracting 
activity to implement FAR or AGAR requirements. These procedures shall 
be subject to the review and approval by the SPE.
    (d) The SPE is responsible for evaluating coverage under the AGAR 
system to determine applicability to other agencies and for 
recommending coverage to the FAR Secretariat for inclusion in the FAR.
    (e) Recommendations for revision of existing FAR coverage or new 
FAR coverage shall be submitted by the Mission Area senior contracting 
official to the SPE for further action.


401.370  Exclusions.

    Subject to the policies of FAR 1.3, certain USDA acquisition 
policies and procedures may be excluded from the AGAR under 
appropriately justified circumstances, such as:
    (a) Subject matter which is effective for a period less than 12 
months.
    (b) Subject matter which is instituted on an experimental basis for 
a reasonable period.
    (c) Acquisition procedures instituted on an interim basis to comply 
with the requirements of statute, regulation, Executive order, Office 
of Management and Budget (OMB) Circular, or Office of Federal 
Procurement Policy (OFPP) Policy Letter.


401.371  USDA Contracting Desk Book.

    (a) The SPE may issue and update the USDA Contracting Desk Book, 
consistent with the policies of the FAR and the AGAR, for the following 
purposes:
    (1) To communicate Department-wide policy and/or procedural 
guidance to contracting activities;
    (2) To delegate to procurement officials the authority to make 
determinations or to take action to implement the policies of the FAR 
or the AGAR; and
    (3) To establish internal policy and procedures on an interim 
basis, prior to incorporation in the AGAR or in a Departmental 
Directive.
    (b) The USDA Contracting Desk Book is only available in electronic 
format on the USDA procurement website.


401.372  Departmental directives.

    Subject to the policies of FAR 1.3, USDA from time to time may 
issue internal directives to establish procedures, standards, guidance, 
methods of performing duties, functions, or operations. Such directives 
include Departmental Regulations (DRs), Departmental Notices, and 
Secretary's Memoranda.

Subpart 401.4--Deviations From the FAR and AGAR


401.402  Policy.

    Requests for authority to deviate from the provisions of the FAR or 
the AGAR shall be submitted in writing as far in advance of the 
situation as time will permit. Each request for deviation shall contain 
the following:
    (a) A statement of the deviation desired, including identification 
of the specific paragraph number(s) of the FAR and AGAR;
    (b) The reason why the deviation is considered necessary or would 
be in the best interest of the Government;
    (c) If applicable, the name of the contractor and identification of 
the contract affected;
    (d) A statement as to whether the deviation has been requested 
previously and, if so, circumstances of the previous request;
    (e) A description of the intended effect of the deviation;
    (f) A statement of the period of time for which the deviation is 
needed; and
    (g) Any pertinent background information which will contribute to a 
full understanding of the desired deviation.


401.403  Individual deviations.

    In individual cases, deviations from either the FAR or the AGAR 
will be authorized only when essential to effect a necessary 
acquisition or where special circumstances make such deviations clearly 
in the best interest of the Government. Except for cost principles, the 
Head of the Contracting Activity (HCA) may approve individual 
deviations from the AGAR, after coordinating with the Office of General 
Counsel (OGC) and the SPE. No deviations from the FAR or AGAR may be 
authorized by an individual contracting officer or an individual 
contracting office. A copy of each deviation and its supporting 
documents shall be provided to the SPE. Deviations from the FAR shall 
not be made unless such action is authorized by the SPE after 
consultation with the OGC and any other appropriate office, based on a 
written justification stating clearly the special circumstances 
involved.


401.404  Class deviations.

    Where deviations from the FAR or AGAR are considered necessary for 
classes of contracts, requests for authority to deviate shall be 
submitted in writing to the SPE for approval. The SPE may authorize 
class deviations from the FAR without consulting the Chairperson of the 
Civilian Agency Acquisition Council (CAAC) where urgency precludes 
consultation. The SPE shall subsequently inform the Chairperson of the 
CAAC of the deviation, including the circumstances under which it was 
required.

Subpart 401.6--Career Development, Contracting Authority, and 
Responsibilities


401.601  General.

    (a) The authority and responsibility vested in the Secretary to 
manage

[[Page 60586]]

USDA's acquisition function is delegated through the Assistant 
Secretary for Administration to the SPE. This broad authority includes, 
but is not limited to, the following responsibilities:
    (1) Prescribing and publishing Departmental acquisition policies, 
regulations, and procedures.
    (2) Taking any necessary actions consistent with policies, 
regulations, and procedures with respect to purchases, contracts, 
leases, and other transactions.
    (3) Designating contracting officers.
    (4) Establishing clear lines of contracting authority.
    (5) Evaluating and monitoring the performance of USDA's acquisition 
system.
    (6) Managing and enhancing career development of the acquisition 
workforce.
    (7) Participating in the development of Government-wide acquisition 
policies, regulations, and standards; and determining specific areas 
where government-wide performance standards should be established and 
applied.
    (8) Determining areas of Department--unique standards and 
developing unique Department-wide standards.
    (9) Certifying to the Secretary that the acquisition system meets 
approved standards.
    (b) The SPE may delegate specified contracting authority and the 
responsibility to manage related acquisition functions.
    (c) Unless prohibited by the FAR, the AGAR, or by other applicable 
statutes and regulations, the SPE may redelegate specified authority to 
make determinations in order to implement the policies and procedures 
of the FAR. Such delegations shall be in writing but need not be 
published. Such delegations may be made by the HCA if authority has 
been delegated by the SPE.


401.602  Contracting officers.


401.602-3  Ratification of unauthorized commitments.

    (a) Ratification means the signed, documented action taken by an 
authorized official to approve and sanction a previously unauthorized 
commitment.
    (b) Unauthorized commitment means an agreement made by a Government 
representative who lacked the authority to enter into a contract on 
behalf of the Government. Procedures for unauthorized commitments are 
in accordance with the USDA Contracting Desk Book, part 401.602-3.


401.603  Selection, appointment, and termination of appointment for 
contracting officers.


401.603-1  General.

    The SPE may delegate contracting authority to the extent authorized 
by general written delegation of acquisition authority appointing 
qualified individuals as contracting officers, in accordance with 
selection and appointment procedures as stated in the USDA Contracting 
Desk Book.

PART 402--DEFINITIONS OF WORDS AND TERMS

Subpart 402.1--Definitions
Sec.
402.101 Definitions.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 402.1--Definitions


402.101  Definitions.

    Acquisition official means an individual who has been delegated 
authority to manage or to exercise acquisition functions and 
responsibilities.
    Agency head or head of the agency means the Secretary of 
Agriculture (Secretary), Deputy Secretary, or the Assistant Secretary 
for Administration (ASA).
    Head of the Contracting Activity (HCA) means the official with 
overall responsibility of one or more USDA contracting activities.
    Mission Area senior contracting official means the official 
designated by the Senior Procurement Executive or Head of the 
Contracting Activity with specific responsibilities within an 
individual Mission Area's contracting activity.
    Senior Procurement Executive (SPE) means the agency official 
appointed as such by the Head of the Agency pursuant to Executive Order 
12931. The Director, Office of Contracting and Procurement, has been 
designated as the USDA SPE.

PART 403--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS

Subpart 403.1--Safeguards
Sec.
403.101 Standards of conduct.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 403.1--Safeguards


403.101  Standards of conduct.

    (a) The standards of conduct for USDA procurement officials are the 
uniform standards established by the Office of Government Ethics in 5 
CFR part 2635, Standards of Ethical Conduct for Employees of the 
Executive Branch, and FAR 3.104, Procurement Integrity.
    (b) Procurement officials and other employees who require advice 
concerning the application of standards of conduct to any acquisition 
issue shall obtain opinions from the USDA Office of Ethics or the 
ethics advisory officials within their agency.

PART 404--ADMINISTRATIVE AND INFORMATION MATTERS

Subpart 404.8--Government Contract Files
Sec.
404.804 Closeout of contract files.
Subpart 404.13--Personal Identity Verification
404.1303 Contract clause.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 404.8--Government Contract Files


404.804  Closeout of contract files.

    The contracting officer shall insert the clause at AGAR 452.204-70, 
Modification for Contract Closeout, in all solicitations and contracts 
that use simplified acquisition procedures.

Subpart 404.13--Personal Identity Verification


404.1303  Contract clause.

    FAR 4.13, Personal Identity Verification, establishes the policy 
and use requirements for FAR 52.204-9. The contracting officer shall 
insert a clause that contains language similar to that in AGAR 452.204-
71 in all covered solicitations and contracts which include FAR 52.204-
9.

SUBCHAPTER B--ACQUISITION PLANNING

PART 405--PUBLICIZING CONTRACT ACTIONS

Subpart 405.4--Release of Information
Sec.
405.404 Release of long-range acquisition estimates.
405.404-1 Release procedures.
Subpart 405.5--Paid Advertisements
405.502 Authority.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 405.4--Release of Information


405.404  Release of long-range acquisition estimates.


405.404-1  Release procedures.

    The HCA is the agency head designee pursuant to FAR 5.404-1.

[[Page 60587]]

Subpart 405.5--Paid Advertisements


405.502  Authority.

    The authority vested in the HCA to authorize publication of paid 
advertisements in newspapers (44 U.S.C. 3702) is delegated, with power 
of redelegation, to Mission Area senior contracting officials. A 
Mission Area senior contracting official's redelegation of this 
authority shall be in writing.

PART 406--COMPETITION REQUIREMENTS

Subpart 406.2--Full and Open Competition After Exclusion of Sources
Sec.
406.202 Establishing or maintaining alternative sources.
Subpart 406.3--Other Than Full and Open Competition
406.302 Circumstances permitting other than full and open 
competition.
406.302-70 Otherwise authorized by law.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 406.2--Full and Open Competition After Exclusion of Sources


406.202  Establishing or maintaining alternative sources.

    The SPE is authorized to make determinations pursuant to FAR 
6.202(a) and sign the determination and findings required by FAR 
6.202(b).

Subpart 406.3--Other Than Full and Open Competition


406.302  Circumstances permitting other than full and open competition.


406.302-70  Otherwise authorized by law.

    (a) Authority. Section 1472 of the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3318) (the Act) 
authorizes the Secretary of Agriculture to award contracts, without 
competition, to further research, extension, or teaching programs in 
the food and agricultural sciences.
    (b) Limitations. The use of this authority is limited to those 
instances where it can be determined that contracting without full and 
open competition is in the best interest of the Government and 
necessary to the accomplishment of the research, extension, or teaching 
program. Therefore:
    (1) Contracts under the authority of the Act shall be awarded on a 
competitive basis to the maximum practicable extent.
    (2) When full and open competition is not deemed appropriate, the 
contracting officer shall make a written justification on a case-by-
case basis in accordance with procedures in FAR 6.303 and 6.304.

PART 407--[RESERVED]

PART 408--REQUIRED SOURCES OF SUPPLIES AND SERVICES

Subpart 408.8--Acquisition of Printing and Related Supplies
408.802 Policy.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 408.8--Acquisition of Printing and Related Supplies 408.802 
Policy.

    The Director, Office of Communications (OC) has been designated as 
the central printing authority in USDA, with the authority to represent 
the USDA before the Joint Committee on Printing (JCP), the Government 
Printing Office, and other Federal and State agencies on all matters 
related to printing.

PARTS 409 AND 410--[RESERVED]

PART 411--DESCRIBING AGENCY NEEDS

Subpart 411.1--Selecting and Developing Requirements Documents
Sec.
411.101 Order of precedence for requirements documents.
Subpart 411.2--Using and Maintaining Requirements Documents
411.202 Maintenance of standardization documents.
Subpart 411.6--Priorities and Allocations
411.602 General.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 411.1--Selecting and Developing Requirements Documents


411.101  Order of precedence for requirements documents.

    (a) OMB Circular A-119 establishes a Federal policy requiring the 
use of voluntary consensus standards in lieu of government-unique 
standards except where inconsistent with law or otherwise impractical.
    (b) An HCA is authorized to submit the determination required by 
OMB Circular A-119 that a voluntary standard is inconsistent with law 
or otherwise impracticable. The HCA must submit the determination to 
OMB through the National Institute of Standards and Technology (NIST) 
in accordance with the Circular with a copy provided to the SPE.

Subpart 411.2--Using and Maintaining Requirements Documents


411.202  Maintenance of standardization documents.

    Recommendations for changes to standardization documents are to be 
submitted through the SPE, who will coordinate the submission of these 
recommendations to the cognizant preparing activity.

Subpart 411.6--Priorities and Allocations


411.602  General.

    USDA has authority to issue rated orders under section 202(c) of 
Executive Order 13603, and the Defense Production Act of 1950, as 
Amended (DPA), 50 U.S.C. 4501 et seq.

PART 412--ACQUISITION OF COMMERICAL ITEMS

Subpart 412.3--Solicitation Provisions and Contract Clauses for the 
Acquisition of Commercial Items
Sec.
412.302 Tailoring of provisions and clauses for the acquisition of 
commercial items.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 412.3--Solicitation Provisions and Contract Clauses for the 
Acquisition of Commercial Items


412.302  Tailoring of provisions and clauses for the acquisition of 
commercial items.

    The HCA is authorized to approve waivers in accordance with FAR 
12.302(c). The approved waiver may be either for an individual contract 
or for a class of contracts for the specific item. The approved waiver 
and supporting documentation shall be incorporated into the contract 
file.

SUBCHAPTER C--CONTRACTING METHODS AND CONTRACT TYPES

PART 413--SIMPLIFIED ACQUISITION PROCEDURES

Subpart 413.3--Simplified Acquisition Methods
Sec.
413.302 Purchase orders.
413.302-5 Clauses.

    Authority:  5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 413.3--Simplified Acquisition Methods


413.302  Purchase orders.


413.302-5  Clauses.

    The contracting officer shall insert the clause at AGAR 452.204-70,

[[Page 60588]]

Modification for Contract Closeout, in all solicitations and contracts 
that use simplified acquisition procedures.

PART 414--SEALED BIDDING

Subpart 414.4--Opening of Bids and Award of Contract
Sec.
414.404 Rejection of bids.
414.404-1 Cancellation of invitations after opening.
414.407 Mistakes in bids.
414.407-3 Other mistakes disclosed before award.
414.407-4 Mistakes after award.
414.409 Information to bidders.
414.409-2 Award of classified contracts.

    Authority:  5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 414.4--Opening of Bids and Award of Contract


414.404  Rejection of bids.


414.404-1  Cancellation of invitations after opening.

    An acquisition official at a level above the contracting officer is 
authorized to request the determinations under FAR 14.404-1(c) and 
(e)(1).


414.407  Mistakes in bids.


414.407-3  Other mistakes disclosed before award.

    The authority to make the determinations under FAR 14.407-3(a), 
(b), and (d) is delegated, without power of redelegation, to the HCA. 
The authority to make the determination under FAR 14.407-3(c) is 
delegated to the contracting officer. Each determination pursuant to 
FAR 14.407- 3 shall have the concurrence of the Office of the General 
Counsel (OGC).


414.407-4  Mistakes after award.

    If a mistake in bid is disclosed after award, the contracting 
officer shall make a final determination in accordance with the 
provisions of FAR 14.407-4(b) and (c) and shall coordinate each 
proposed determination with OGC. Such coordination shall, at a minimum, 
consist of the contracting officer providing the proposed determination 
and the case file to OGC for comment.


414.409  Information to bidders.


414.409-2  Award of classified contracts.

    Disposition of classified information shall be in accordance with 
Departmental Regulation and Manual (3400-001 Series) and in accordance 
with direction issued by the USDA Office of Homeland Security (OHS), 
Personnel and Document Security Division.

PART 415--CONTRACTING BY NEGOTIATION

Subpart 415.2--Solicitation and Receipt of Proposals and Information
Sec.
415.204 Contract format.
Subpart 415.3--Source Selection
415.305 Proposal evaluation.
Subpart 415.6--Unsolicited Proposals
415.604 Agency points of contact.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 415.2--Solicitation and Receipt of Proposals and 
Information


415.204  Contract format.

    The HCA is authorized to exempt contracts from the uniform contract 
format.

Subpart 415.3--Source Selection


415.305  Proposal evaluation.

    Each Mission Area senior contracting official is responsible for 
establishing procedures regarding the release of cost information to 
the members of the technical evaluation team per FAR 15.305(a)(4).

Subpart 415.6--Unsolicited Proposals


415.604  Agency points of contact.

    Each Mission Area senior contracting official is responsible for 
establishing points of contact for the control of unsolicited 
proposals. An unsolicited proposal must be formally submitted to the 
Agency by way of the point of contact.

PART 416--TYPES OF CONTRACTS

Subpart 416.1--Selecting Contract Types
Sec.
416.102 Policies.
Subpart 416.2--Fixed-Price Contracts
416.203 Fixed-price contracts with economic price adjustment.
416.203-4 Contract clauses.
Subpart 416.6--Time-and-Materials, Labor- Hour, and Letter Contracts
416.603 Letter contracts.
416.603-2 Application.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 416.1--Selecting Contract Types


416.102  Policies.

    The contracting officer shall insert the clause at AGAR 452.204-70, 
Modification for Contract Closeout, in all solicitations and contracts 
that use other than cost reimbursement contract types.

Subpart 416.2--Fixed-Price Contracts


416.203  Fixed-price contracts with economic price adjustment.


416.203-4  Contract clauses.

    An economic price adjustment clause based on cost indexes of labor 
or material may be used under the conditions listed in FAR 16.203-4(d) 
after HCA approval and consultation with the Office of the General 
Counsel (OGC).

Subpart 416.6--Time-and-Materials, Labor-Hour, and Letter Contracts


416.603  Letter contracts.


416.603-2  Application.

    The HCA is authorized to extend the period for defining a letter 
contract required by FAR 16.603-2(c) in extreme cases where it is 
determined in writing that such action is in the best interest of the 
Government.

PARTS 417 AND 418--[RESERVED]

SUBCHAPTER D--SOCIOECONOMIC PROGRAMS

PART 419--SMALL BUSINESS PROGRAMS

Subpart 419.2--Policies
Sec.
419.201 General Policy.
419.201-71 Small business coordinators.
419.201-72 Reports.
Subpart 419.6--Certificates of Competency and Determinations of 
Responsibility
419.602 Procedures.
419.602-3 Resolving differences between the agency and the Small 
Business Administration.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 419.2--Policies


419.201  General policy.


419.201-71  Small business coordinators.

    The Mission Area senior contracting official shall designate, in 
writing, small business coordinator(s). The number of coordinators 
shall be determined by the Mission Area senior contracting official and 
sufficient for the number of contracting officers or contracting 
offices.


419.201-72  Reports.

    The Office of Small & Disadvantaged Business Utilization (OSDBU) 
Director shall be responsible for submitting reports concerning USDA's 
progress and achievements in the procurement preference program.

[[Page 60589]]

Subpart 419.6--Certificates of Competency and Determinations of 
Responsibility


419.602  Procedures.


419.602-3  Resolving differences between the agency and the Small 
Business Administration.

    The HCA is authorized to appeal the issuance of a Certificate of 
Competency (COC) to SBA as provided by FAR 19.602-3(a).

PARTS 420 AND 421--[RESERVED]

PART 422--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS

Subpart 422.3--Contract Work Hours and Safety Standards Act
Sec.
422.302 Liquidated damages and overtime pay.
Subpart 422.4--Labor Standards for Contracts Involving Construction
422.404 Construction Wage Rate Requirements statute wage 
determinations.
422.404-6 Modifications of wage determinations.
422.406 Administration and enforcement.
422.406-8 Investigations.
Subpart 422.8--Equal Employment Opportunity
422.804 Affirmative action programs.
422.804-2 Construction.
422.807 Exemptions.
Subpart 422.13--Equal Opportunity for Veterans
422.1305 Waivers.
Subpart 422.14--Employment of Workers With Disabilities
422.1403 Waivers.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 422.3--Contract Work Hours and Safety Standards Act


422.302  Liquidated damages and overtime pay.

    The Mission Area senior contracting official is authorized to 
review determinations of liquidated damages due under section 104(c) of 
the Contract Work Hours and Safety Standards Act, and to recommend 
remedial action, if appropriate, in accordance with FAR 22.302(c). 
Contractors or subcontractors may request review of administrative 
determinations of liquidated damages by written notice to the 
contracting officer. The contracting officer shall promptly forward 
appeals of liquidated damages determinations to the Mission Area senior 
contracting official.

Subpart 422.4--Labor Standards for Contracts Involving Construction


422.404  Construction Wage Rate Requirements statute wage 
determinations.


422.404-6  Modifications of wage determinations.

    The Mission Area senior contracting official is authorized to 
process the request for extension of the 90-day period for award after 
bid opening as provided in FAR 22.404-6(b)(6).


422.406  Administration and enforcement.


422.406-8  Investigations.

    The HCA is authorized to submit reports of violations to the agency 
head in accordance with FAR 22.406-8(d).

Subpart 422.8--Equal Employment Opportunity


422.804  Affirmative action programs.


422.804-2  Construction.

    The Mission Area senior contracting official shall ensure that each 
contracting office awarding nonexempt construction contracts maintains 
a current listing of covered geographical areas subject to affirmative 
action requirements specifying goals for minorities and women in 
covered construction trades, as provided in FAR 22.804-2(b).


422.807  Exemptions.

    The HCA oversees exemptions of all or part of the requirements of 
E.O. 11246 pursuant to FAR 22.807(c).

Subpart 422.13--Equal Opportunity for Veterans


422.1305  Waivers.

    The Assistant Secretary for Administration (ASA) is authorized to 
make the waiver determination in FAR 22.1305(b) that a contract is 
essential to the national security. The waiver shall be prepared for 
the ASA's signature and submitted by the Mission Area senior 
contracting official to the SPE for referral to the ASA.

Subpart 422.14--Employment of Workers With Disabilities


422.1403  Waivers.

    The ASA is authorized to make the waiver determinations under FAR 
22.1403(a) and FAR 22.1403(b) with the concurrence of the Deputy 
Assistant Secretary for Federal Contract Compliance Programs, 
Department of Labor. The waiver shall be prepared for the ASA's 
signature and submitted by the Mission Area senior contracting official 
to the SPE for referral to the ASA.

PART 423--ENVIRONMENT, SUSTAINABLE ACQUISITION, AND MATERIAL SAFETY

Subpart 423.1--Use of Recovered Materials
Sec.
423.107 Agency affirmative procurement programs.
Subpart 423.3--Hazardous Material Identification, Material Safety Data, 
and Notice of Radioactive Materials
423.303 Notice of radioactive materials.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 423.1--Use of Recovered Materials


423.107  Agency affirmative procurement programs.

    The USDA affirmative procurement program (APP) policy applicable to 
all USDA agencies and staff offices is hereby established. Components 
of the APP are in the USDA Contracting Desk Book part 423.

Subpart 423.3--Hazardous Material Identification, Material Safety 
Data, and Notice of Radioactive Materials


423.303  Notice of radioactive materials.

    The HCA shall establish a system of instructions to identify the 
installation/facility radiation protection officer.

PART 424--[RESERVED]

PART 425--FOREIGN ACQUISITION

Subpart 425.6--American Recovery and Reinvestment Act--Buy American 
Statute--Construction Materials
Sec.
425.603 Exceptions.

    Authority:  5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 425.6--American Recovery and Reinvestment Act--Buy American 
Statute--Construction Materials


425.603  Exceptions.

    The Secretary, without power of redelegation, has the authority to 
make the necessary determination(s) and authorize award(s) of 
contract(s) in accordance with FAR 25.603(b).

PART 426--OTHER SOCIOECONOMIC PROGRAMS

Subpart 426.5--Drug-Free Workplace
Sec.
426.505 Suspension of payments, termination of contract, and 
debarment and suspension actions.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

[[Page 60590]]

Subpart 426.5--Drug-Free Workplace


426.505  Suspension of payments, termination of contract, and debarment 
and suspension actions.

    The SPE will submit the request for a waiver to the agency head 
with a recommendation for action per FAR 23.506(e).

SUBCHAPTER E--GENERAL CONTRACTING REQUIREMENTS

PART 427--[RESERVED]

PART 428--BONDS AND INSURANCE

Subpart 428.1--Bonds and Other Financial Protections
Sec.
428.101 Bid guarantees.
428.101-1 Policy on use.
428.106 Administration.
428.106-6 Furnishing information.
Subpart 428.2--Sureties and Other Security for Bonds
428.203 Individual sureties.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 428.1--Bonds and Other Financial Protections


428.101  Bid guarantees.


428.101-1  Policy on use.

    The SPE may authorize class waivers of the requirement to obtain 
bid guarantees per FAR 28.101-1(c).


428.106  Administration.


428.106-6  Furnishing information.

    HCAs or their designees may furnish certified copies of bonds and 
the contracts for which they were given as provided by FAR 28.106-6(c). 
Requesters may be required to pay costs of certification and copying 
established by the Departmental Fee Schedule for records requests (7 
CFR part 1, subpart A, appendix A).

Subpart 428.2--Sureties and Other Security for Bonds


428.203  Individual sureties.

    Evidence of possible criminal or fraudulent activities by an 
individual surety shall be reported to the OIG in accordance with 
Departmental Regulations (1700 series). The Mission Area senior 
contracting official shall establish procedures to ensure protection 
and conveyance of deposited securities of the types listed in FAR 
28.204-1 through 28.204-3.

PART 429--[RESERVED]

PART 430--COST ACCOUNTING STANDARDS ADMINISTRATION

Subpart 430.2--CAS Program Requirements
Sec.
430.201 Contract requirements.
430.201-5 Waiver.
430.202 Disclosure requirements.
430.202-2 Impracticality of submission.
430.202-8 Subcontractor disclosure statements.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 430.2--CAS Program Requirements


430.201  Contract requirements.


430.201-5  Waiver.

    The SPE, without the authority to further redelegate, is authorized 
to request the Cost Accounting Standards Board to waive the application 
of the Cost Accounting Standards (CAS) in accordance with FAR 30.201-5.


430.202  Disclosure requirements.


430.202-2  Impracticality of submission.

    The Secretary, without the power to redelegate, is authorized to 
determine, in accordance with 48 CFR 9903.202-2, that the Disclosure 
Statement is impractical to secure and to authorize award without 
obtaining the Disclosure Statement.


430.202-8  Subcontractor disclosure statements.

    The Secretary, without the power to redelegate, is authorized to 
determine, in accordance with 48 CFR 9903.202-2, that the Disclosure 
Statement for a subcontractor is impractical to secure and to authorize 
award without obtaining the Disclosure Statement.

PART 431--CONTRACT COST PRINCIPLES AND PROCEDURES

Subpart 431.1--Applicability
Sec.
431.101 Objectives.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 431.1--Applicability


431.101  Objectives.

    (a) The SPE is designated as the official authorized to give 
advance approval of an individual deviation concerning cost principles.
    (b) The SPE is designated as the official authorized to give 
advance approval of a class deviation concerning cost principles after 
coordination with the Civilian Agency Acquisition Council (CAAC).

PART 432--CONTRACT FINANCING

Sec.
432.001 Definitions.
432.006 Reduction or suspension of contract payments upon finding of 
fraud.
432.006-5 Reporting.
432.007 Contract financing payments.
Subpart 432.1--Non-Commercial Item Purchase Financing
432.114 Unusual contract financing.
Subpart 432.2--Commercial Item Purchase Financing
432.206 Solicitation provisions and contract clauses.
Subpart 432.3--Loan Guarantees for Defense Production
432.301 Definitions.
Subpart 432.4--Advance Payments for Non-Commercial Items
432.402 General.
432.406 Letters of credit.
432.407 Interest.
432.412 Contract clause.
Subpart 432.7--Contract Funding
432.703 Contract funding requirements.
432.703-3 Contracts crossing fiscal years.
432.770 USDA specific funding limitations.
Subpart 432.8--Assignment of Claims
432.802 Conditions.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).


432.001  Definitions.

    Agency contract finance office is the office, other than the office 
of the requisitioner, providing funding or performing funding record 
keeping for the contract action.
    Head of agency. For the purposes of this part, head of the agency 
means, exclusively, the Secretary or the Deputy Secretary.
    Remedy coordination official (RCO). The USDA RCO is the Assistant 
Secretary for Administration.
    Responsible fiscal authority is that officer in the agency contract 
finance office with the responsibility to ensure that adequate funds 
are available and usable for the intended purpose.


432.006  Reduction or suspension of contract payments upon finding of 
fraud.


432.006-5  Reporting.

    The annual report required by FAR 32.006-5 is to be prepared by the 
SPE and submitted to the Secretary within 90 calendar days after the 
end of the fiscal year. When signed by the Secretary, the report is to 
be maintained by the SPE.


432.007  Contract financing payments.

    The Mission Area senior contracting official may prescribe, on a 
case-by-case

[[Page 60591]]

basis, a shorter period for financing payments.

Subpart 432.1--Non-Commercial Item Purchase Financing


432.114  Unusual contract financing.

    The HCA is authorized to approve unusual contract financing.

Subpart 432.2--Commercial Item Purchase Financing


432.206  Solicitation provisions and contract clauses.

    The responsibility for administration of the liquidation provisions 
of a contract may not be transferred from the contracting officer.

Subpart 432.3--Loan Guarantees for Defense Production


432.301  Definitions.

    Within this subpart, the agency or guaranteeing agency is the HCA 
and may not be redelegated.

Subpart 432.4--Advance Payments for Non-Commercial Items


432.402  General.

    An HCA is designated as the individual responsible for making the 
findings and determination, and for approval of the contract terms 
concerning advance payments.


432.406  Letters of credit.

    The HCA is designated as the individual responsible for 
coordination with the Department of Treasury concerning letters of 
credit.


432.407  Interest.

    (a) The HCA is designated as the individual who may authorize, on a 
case-by-case basis, advance payments without interest for the contract 
types described in FAR 32.407(d)(1) through
    (4). The signed determination and findings supporting these 
authorizations shall be included in the contract files.
    (b) The SPE is designated as the individual who may authorize 
advance payments without interest other than those described in 
paragraph (a) of this section.


432.412  Contract clause.

    The decision to use Alternates I or III to FAR 52.232-12 must be 
supported by a determination and finding.

Subpart 432.7--Contract Funding


432.703  Contract funding requirements.

    Use the clause AGAR 452.232-70, Limitation of Government's 
Obligation, in solicitations and resultant incrementally funded fixed-
price contracts.


432.703-3  Contracts crossing fiscal years.

    Funds appropriated to USDA may be used for one-year contracts which 
are to be performed in two fiscal years so long as the total amount for 
such contracts is obligated in the year for which the funds are 
appropriated (7 U.S.C. 2209c).


432.770  USDA specific funding limitations.

    The expenditure of any USDA appropriation for any consulting 
service through any contract, pursuant to section 3109 of title 5 of 
the U.S. Code shall be limited to those contracts where such 
expenditures are a matter of public record and available for public 
inspection, except where otherwise provided under existing law, or 
under existing Executive order issued pursuant to existing law (7 
U.S.C. 2225a).

Subpart 432.8--Assignment of Claims


432.802  Conditions.

    Written notices of assignment and a true copy of the assigned 
instrument are to be sent to the contracting officer rather than the 
agency head per FAR 32.802(e)(1). Other copies are distributed as 
directed in FAR 32.802.

PART 433--PROTESTS, DISPUTES AND APPEALS

Subpart 433.1--Protests
Sec.
433.102 General.
Subpart 433.2--Disputes and Appeals
433.203 Applicability.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 433.1--Protests


433.102  General.

    The SPE is responsible for coordinating the processing of bid 
protests lodged with the Government Accountability Office (GAO).

Subpart 433.2--Disputes and Appeals


433.203  Applicability.

    The Assistant Secretary for Administration is authorized to 
determine the applicability of the Contract Disputes Act to contracts 
with foreign governments pursuant to FAR 33.203.

SUBCHAPTER F--SPECIAL CATEGORIES OF CONTRACTING

PART 434--MAJOR SYSTEM ACQUISITION

Sec.
434.001 Definition.
434.002 Policy.
434.003 Responsibilities.
434.005 General requirements.
434.005-6 Full production.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).


434.001  Definition.

    Pursuant to OMB Circular No. A-11 (Circular A-11) and the 
definition at FAR 2.101, within USDA, a system shall be considered a 
major system if:
    (a) The system has been identified as a Major IT Investment 
pursuant to USDA Departmental Regulation 3030- 008, Definition of Major 
Information Technology Investments;
    (b) The total non-IT acquisition costs are estimated to be $50 
million or more; or
    (c) The system, regardless of estimated acquisition or life cycle 
costs, has been specifically designated to be a major system by the 
USDA Acquisition Executive or by the Major Information Technology 
Systems Executive. The Assistant Secretary for Administration (ASA) is 
the USDA Acquisition Executive for major system acquisition other than 
acquisitions of information technology.


434.002  Policy.

    In addition to the policy guidance at FAR 34.002 and other parts of 
the FAR, the policies outlined in part 7 of Circular A-11 should serve 
as guidelines for all contracting activities in planning and developing 
systems, major or otherwise.


434.003  Responsibilities.

    (a) The key executives of USDA (Secretary, Deputy Secretary, Under 
Secretaries and Assistant Secretaries) individually or as a group will 
participate in making four key decision in each major system 
acquisition process.
    (1) Identification and definition of a specific mission need to be 
fulfilled, the relative priority assigned within the agency, and the 
general magnitude of resources that may be invested.
    (2) Selection of competitive system design concepts to be advanced 
to a test/demonstration phase or authorization to proceed with the 
development of a noncompetitive (single concept) system.
    (3) Commitment of a system to full-scale development and limited 
production.
    (4) Commitment of a system to full production.
    (b) The Chief Information Officer (CIO) is the Major Information 
Technology Systems Executive. For acquisitions of information 
technology, the CIO will ensure that Circular A-11 is implemented in 
USDA and that the

[[Page 60592]]

management objectives of Circular A-11 are realized. The CIO is 
responsible for designating the program manager for each major 
information technology system acquisition, designating an acquisition 
to be a major information technology system acquisition, and approving 
the written charter and project control system for each major 
information technology system acquisition.
    (c) The ASA will ensure that Circular A-11 is implemented in USDA 
and that the management objectives of Circular A-11 are realized. The 
SPE is responsible for designating the program manager for each major 
system non-IT acquisition, designating an acquisition to be a major 
system non-IT acquisition, and approving the written charter and 
project control system for each major system non-IT acquisition.
    (d) The Mission Area senior contracting official must:
    (1) Ensure compliance with the requirements of Circular A-11, FAR 
part 34, and AGAR part 434.
    (2) Ensure that potential major system acquisitions are brought to 
the attention of the USDA Acquisition Executive or the Major 
Information Technology Systems Executive, as appropriate.
    (3) Coordinate with Mission Area Program Managers (MASPMs) to 
recommend qualified candidates for designation as program managers for 
each major system acquisition within their jurisdiction.
    (4) Coordinate with MASPMs to verify that program managers fulfill 
their responsibilities and discharge their duties.
    (5) Cooperate with the ASA and Major Information Technology Systems 
Executive in implementing the requirements of Circular A-11.
    (e) The program manager is responsible for planning and executing 
the major system acquisition, ensuring appropriate coordination with 
the USDA Acquisition Executive, Major Information Technology Systems 
Executive, and other key USDA executives.


434.005  General requirements.


434.005-6  Full production.

    The Secretary or the Secretary's designee for the specific program 
is the agency head for the purposes of FAR 34.005-6.

PART 435--[RESERVED]

PART 436--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

Subpart 436.2--Special Aspects of Contracting for Construction
Sec.
436.205 Statutory cost limitations.
436.209 Construction contracts with architect-engineer firms.
436.213 Special procedures for sealed bidding in construction 
contracting.
436.213-2 Presolicitation notices.
Subpart 436.5--Contract Clauses
436.500 Scope of subpart.
436.570 Emergency response, fire suppression and liability.
Subpart 436.6--Architect-Engineer Services
436.602 Selection of firms for architect- engineer contracts.
436.602-1 Selection criteria.
436.602-2 Evaluation boards.
436.602-5 Short selection process for contracts not to exceed the 
simplified acquisition threshold.
436.603 Collecting data on and appraising firm's qualifications.
436.609 Contract clauses.
436.609-1 Design within funding limitations.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 436.2--Special Aspects of Contracting for Construction


436.205  Statutory cost limitations.

    (a) When it appears that funds may be insufficient for all the 
desired features of construction, the contracting officer may provide 
in the solicitation for a base bid item covering the work as specified 
and for one or more additive or deductive bid items which progressively 
add or omit specified features of the work in a stated order of 
priority.
    (b) In the alternative, the contracting officer may use the 
policies and procedures found in FAR 17.2, Options.


436.209  Construction contracts with architect-engineer firms.

    The HCA is authorized to approve a contract to construct a project, 
in whole or in part, to the firm that designed the project (inclusive 
of its subsidiaries or affiliates).


436.213  Special procedures for sealed bidding in construction 
contracting.


436.213-2  Presolicitation notices.

    The authority to waive a presolicitation notice on any construction 
requirement when the proposed contract is expected to exceed the 
simplified acquisition threshold is restricted to the HCA.

Subpart 436.5--Contract Clauses


436.500  Scope of subpart.

    This subpart prescribes clauses for insertion in USDA solicitations 
and contracts for construction and for dismantling, demolition, or 
removal of improvements or structures. The contracting officer shall 
use the clauses as prescribed in contracts that exceed the simplified 
acquisition threshold. The contracting officer may use the clauses if 
the contract amount is expected to be at or below the simplified 
acquisition threshold.


436.570  Emergency response, fire suppression and liability.

    The contracting officer shall insert the clause at AGAR 452.236-70, 
Emergency Response, Fire Suppression and Liability, in Integrated 
Resource Service Contracts (IRSCs) awarded for the Forest Service. The 
clause AGAR 452.236-70, Emergency Response, Fire Suppression and 
Liability, is optional for non-IRSCs.

Subpart 436.6--Architect-Engineer Services


436.602  Selection of firms for architect- engineer contracts.


436.602-1  Selection criteria.

    The Mission Area senior contracting official is authorized to 
approve the use of design competition under the conditions in FAR 
36.602-1(b).


436.602-2  Evaluation boards.

    The Mission Area senior contracting official shall establish 
written procedures for providing permanent or ad hoc architect-engineer 
evaluation boards as prescribed in FAR 36.602-2.


436.602-5  Short selection process for contracts not to exceed the 
simplified acquisition threshold.

    The Mission Area senior contracting official may include either or 
both procedures in FAR 36.602-5(a) and (b) in the procedures for 
evaluation boards.


436.603  Collecting data on and appraising firm's qualifications.

    Mission Area senior contracting officials for Mission Areas that 
require architect- engineer services shall establish procedures to 
comply with the requirements of FAR 36.603.


436.609  Contract clauses.


436.609-1  Design within funding limitations.

    (a) Should the HCA appoint a designee to make the determination in 
FAR 36.609-1(c)(1), the appointment may be to one no lower than the 
official authorized to commit program funds for the work being 
acquired.

[[Page 60593]]

    (b) The contracting officer, with the advice of appropriate 
technical representatives, may make the determination in FAR 36.609-
1(c)(2) or (3).

PART 437--SERVICE CONTRACTING

Subpart 437.1--Service Contracts--General
Sec.
437.104 Personal services contracts.
Subpart 437.2--Advisory and Assistance Services
437.204 Guidelines for determining availability of personnel.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 437.1--Service Contracts--General


437.104  Personal services contracts.

    USDA has the following specific statutory authorities to contract 
for personal services:
    (a) Section 706(a) of the Organic Act of 1944 (7 U.S.C. 2225) 
authorizes contracting with persons or organizations on a temporary 
basis, without regard to civil service compensation classification 
standards in 5 U.S.C., chapter 51 and subchapter III of chapter 53, 
Provided:
    (1) That no expenditures shall be made unless specifically provided 
for in the applicable appropriation; and
    (2) Expenditures do not exceed any limitations prescribed in the 
appropriation.
    (b) Title 7 of the U.S.C., section 1627 authorizes the Secretary of 
Agriculture to contract with technically qualified persons, firms or 
organizations to perform research, inspection, classification, 
technical, or other special services, without regard to the civil- 
service laws, if it is for a temporary basis and for a term not to 
exceed six months in any fiscal year.

Subpart 437.2--Advisory and Assistance Services


437.204  Guidelines for determining availability of personnel.

    The HCA is authorized to request the use of non-Government 
evaluators in proposal evaluations. Each decision shall be supported by 
a written determination in accordance with FAR 37.204.

PARTS 438 THROUGH 441--[RESERVED]

SUBCHAPTER G--CONTRACT MANAGEMENT

PARTS 442 THROUGH 444--[RESERVED]

PART 445--GOVERNMENT PROPERTY

Subpart 445.1--General
Sec.
445.103 General.
Subpart 445.3--Authorizing the Use and Rental of Government Property
445.301 Use and rental.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 445.1--General


445.103  General.

    The Mission Area senior contracting official is authorized to make 
determinations for charging rent on the basis of use under the Use and 
Charges clause in FAR 52.245-9 as prescribed in FAR 45.103(a)(5).

Subpart 445.3--Authorizing the Use and Rental of Government 
Property


445.301  Use and rental.

    (a) The Mission Area senior contracting official is authorized to 
make determinations for providing facilities to contractors as 
prescribed in FAR 45.301(f).
    (b) Requests for non-Government use of plant equipment as 
prescribed in FAR 45.301 shall be submitted by the HCA to the SPE for 
approval.

PARTS 446 THROUGH 448--[RESERVED]

PART 449--TERMINATION OF CONTRACTS

Subpart 449.5--Contract Termination Clauses
Sec.
449.501 General.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 449.5--Contract Termination Clauses


449.501  General.

    Use of special purpose termination clauses pursuant to the 
authority of FAR 49.501 shall be approved in advance by the HCA.

PART 450--EXTRAORDINARY CONTRACTUAL ACTIONS AND THE SAFETY ACT

Subpart 450.1--Extraordinary Contractual Actions
Sec.
450.100 Definitions.
450.102 Delegation of and limitations on exercise of authority.
450.102-1 Delegation of authority.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 450.1--Extraordinary Contractual Actions


450.100  Definitions.

    Approving authority, as used in this part, means the Assistant 
Secretary for Administration.
    Secretarial level, as used in this part means the Assistant 
Secretary for Administration.


450.102  Delegation of and limitations on exercise of authority.


450.102-1  Delegation of authority.

    The Assistant Secretary for Administration is authorized to approve 
all actions under FAR part 50 except indemnification actions listed in 
FAR 50.102-1(d), which must be approved by the Secretary, without power 
of redelegation.

PART 451--[RESERVED]

SUBCHAPTER H--CLAUSES AND FORMS

PART 452--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

Subpart 452.2--Texts of Provisions and Clauses
Sec.
452.204-70 Modification for Contract Closeout
452.204-71 Personal Identity Verification of Contractor Employees.
452.232-70 Limitation of Government's Obligation.
452.236-70 Emergency Response, Fire Suppression, and Liability.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).

Subpart 452.2--Texts of Provisions and Clauses


452.204-70  Modification for Contract Closeout.

    As prescribed in AGAR 404.804, 413.302-5, and 416.102, insert the 
following clause:

Modification for Contract Closeout (Month Year)

    ``Upon contract closeout for contracts utilizing anything other 
than cost reimbursement:

[[Page 60594]]

    (a) If unliquidated funds in the amount of $1000 or less remain 
on the contract, the Contracting Officer (CO) shall issue a 
unilateral modification for deobligation. The contractor will 
receive a copy of the modification but will not be required to 
provide a signature. The CO shall immediately proceed with contract 
closeout upon completion of the period of performance, receipt and 
acceptance of supplies or services, and final payment.
    (b) Upon contract closeout for contracts utilizing SAP: if 
unliquidated funds of more than $1000 remain on the contract, the CO 
shall issue a bilateral modification for deobligation. The 
contractor will receive a copy of the modification and will be 
required to provide a signature. (The CO may also request a 
``Contractor Release of Claims'' be completed by the contractor, 
although not required for contracts and orders using SAP.) If the 
bilateral modification and Release of Claims are not returned to the 
CO within 60 days, the CO shall release the modification as 
unilateral and proceed with contract closeout upon completion of the 
period of performance, receipt and acceptance of supplies or 
services, and final payment.
    (c) Upon contract closeout for contracts utilizing anything 
other than cost reimbursement, if unliquidated funds of more than 
$1000 remain on the contract, the CO shall issue a bilateral 
modification for deobligation. The contractor will receive a copy of 
the modification and a ``Contractor Release of Claims'' and will be 
required to provide a signature on both forms. If the bilateral 
modification and Release of Claims are not returned to the CO within 
120 days, the CO shall release the modification as unilateral and 
proceed with contract closeout upon completion of the period of 
performance, receipt and acceptance of supplies or services, and 
final payment.


(End of Clause)


452.204-71  Personal Identity Verification of Contractor Employees.

    As prescribed in AGAR 404.1303, insert the following clause:

Personal Identity Verification of Contractor Employees (Month Year)

    (a) The contractor shall comply with the personal identity 
verification (PIV) policies and procedures established by the United 
States Department of Agriculture (USDA) Directives 4620-002 series.
    (b) Should the USDA Directives 4620-002 require the exclusion of 
a contractor's employee, the contracting officer will notify the 
contractor in writing. The contractor must appoint a representative 
to manage compliance with the PIV policies established by the USDA 
Directives 4620-002 and to maintain a list of employees eligible for 
a USDA LincPass required for performance of the work.
    (c) The responsibility of maintaining a sufficient workforce 
remains with the contractor. Contractor employees may be barred by 
the Government from performance of work should they be found 
ineligible or to have lost eligibility for a USDA LincPass. Failure 
to maintain a sufficient workforce of employees eligible for a USDA 
LincPass may be grounds for termination of the contract.
    (d) The contractor shall insert this clause in all subcontracts 
when the subcontractor is required to have routine unaccompanied 
physical access to a federally controlled facility and/or routine 
unaccompanied access to a federally controlled information system.
    (e) The PIV Sponsor for this contract is a designated program 
point of contact, which in most cases is the COR, unless otherwise 
specified in this contract. The PIV Sponsor will be available to 
receive contractor identity information from [hours and days to be 
added by CO] to [hours and days to be added by CO] at [office 
address for registration to be added by CO]. The Government will 
notify the contractor if there is a change in the PIV Sponsor, the 
office address, or the office hours for registration; however, it is 
the contractor's responsibility to meet all aspects of paragraphs 
(c), (d), and (e).


(End of Clause)


452.232-70  Limitation of Government's Obligation.

    As prescribed in AGAR 432.703, insert the following clause:

Limitation of Government's Obligation (Month Year)

    (a) Contract line item(s) listed below is/are incrementally 
funded. For this/these item(s), the sum of $ [Contracting Officer 
insert after negotiations] of the total price is presently available 
for payment and allotted to this contract. An allotment schedule is 
set forth in paragraph (j) below.

Line Item Price Currently Allotted Funding Funds Required for 
Complete Funding

    (b) For item(s) identified in paragraph (a) as not fully funded, 
the Contractor agrees to perform up to the point at which the total 
amount payable by the Government, including reimbursement of costs 
in the event of termination of those item(s) for the Government's 
convenience, approximates the total amount currently allotted to the 
contract. The Contractor is not authorized to continue work on those 
item(s) beyond that point. The Government will not be obligated in 
any event to reimburse the Contractor more than the amount allotted 
to the contract for those item(s) regardless of anything to the 
contrary in the clause entitled ``Termination for Convenience of the 
Government''. The total amount payable by the Government in the 
event of termination of applicable contract line item(s) for 
convenience includes costs, profit, and estimated termination 
settlement costs for those item(s).
    (c) Notwithstanding the dates specified in the allotment 
schedule in paragraph (j), the Contractor will notify the 
contracting officer in writing at least [30, 60, or 90, as 
appropriate] days prior to the date when, in the Contractor's best 
judgment, the work will reach the point at which the total amount 
payable by the Government, including any cost for termination for 
convenience, will approximate 85 percent of the total amount 
currently allotted to the contract for performance of the applicable 
item(s). The notification will state (1) the estimated date when 
that point will be reached and (2) an estimate of additional 
funding, if any, needed to continue performance of applicable line 
items up to the next scheduled date for allotment of funds 
identified in paragraph (j), or to a mutually agreed upon substitute 
date. The notification will also advise the contracting officer of 
the estimated amount of additional funds that will be required for 
the timely performance of the item(s) funded, for a subsequent 
period as may be specified in the allotment schedule in paragraph 
(j) or otherwise agreed to by the parties. If after such 
notification additional funds are not allotted by the date 
identified in the Contractor's notification, or by an agreed 
substitute date, the contracting officer will terminate any item(s) 
for which additional funds have not been allotted, pursuant to the 
clause of this contract entitled ``Termination for Convenience of 
the Government''.
    (d) When additional funds are allotted for continued performance 
of the contract line item(s) identified in paragraph (a) above, the 
parties will agree as to the period of contract performance which 
will be covered by the funds. The provisions of paragraphs (b) 
through (d) will apply similarly to the additional allotted funds 
and agreed substitute date, and the contract will be modified 
accordingly.
    (e) If, solely by reason of failure of the Government to allot 
additional funds, by the dates indicated below, in amounts 
sufficient for timely performance of the contract line item(s) 
identified in paragraph (a), the Contractor incurs additional costs 
or is delayed in the performance of the work under this contract and 
if additional funds are allotted, an equitable adjustment will be 
made in the price or prices (including appropriate target, billing, 
and ceiling prices where applicable) of the item(s), or in the time 
of delivery, or both. Failure to agree to any such equitable 
adjustment hereunder will be a dispute concerning a question of fact 
within the meaning of the clause entitled ``Disputes.''
    (f) The Government may at any time prior to termination allot 
additional funds for the performance of the contract line item(s) 
identified in paragraph (a) above.
    (g) The termination provisions do not limit the rights of the 
Government under the clauses entitled ``Default'' and ``Termination 
for Cause''. The provisions are limited to the work and allotment of 
funds for the contract line item(s) set forth in paragraph (a) 
above. These terms no longer apply once the contract is fully funded 
except with regard to the rights or obligations of the parties 
concerning equitable adjustments negotiated under paragraphs (e) and 
(f) above.
    (h) Nothing herein affects the right of the Government to 
terminate this contract pursuant to the clause of this contract 
entitled ``Termination for Convenience of the Government''.
    (i) Nothing herein shall be construed as authorization of 
voluntary services whose acceptance is otherwise prohibited under 31 
U.S.C. 1342.
    (j) The parties agree that the Government will allot funds to 
this contract in accordance with the following schedule:


[[Page 60595]]


On execution of contract $
(month) (day), (year) $
(month) (day), (year) $
(month) (day), (year) $


(End of Clause)


452.236-70  Emergency Response, Fire Suppression, and Liability.

    As prescribed in AGAR 436.570, the following clause shall be used 
in Forest Service Integrated Resource Service Contracts (IRSCs), and is 
optional for non-IRSCs:

Emergency Response, Fire Suppression and Liability (Month Year)

    (a) Contractor's Responsibility for Responding to Emergencies. 
When directed by the contracting officer, the Contractor shall allow 
the Government to temporarily use employees and equipment from the 
work site for emergency work (anticipated to be restricted to 
firefighting). This is considered to be within the general scope of 
the contract. An equitable adjustment for the temporary use of 
employees and equipment will be made under the CHANGES clause, FAR 
52.243-4.
    (b) Contractor's Responsibility for Fire Fighting. The 
Contractor, under the provisions of FAR 52.236-9, Protection of 
Existing Vegetation, Structures, Equipment, Utilities, and 
Improvements, shall immediately extinguish all fires on the work 
site other than those fires in use as a part of the work. The 
Contractor may be held liable for all damages and for all costs 
incurred by the Government for labor, subsistence, equipment, 
supplies, and transportation deemed necessary to control or suppress 
a fire set or caused by the Contractor or the Contractor's agents, 
subcontractors, or employees subject to the fire classifications 
listed in paragraph (c).
    (c) Fire Suppression Costs. The Contractor's obligations for 
cost of fire suppression vary according to three classifications of 
fires as follows:
    (1) Operations Fire. An ``operations fire'' is a fire caused by 
the Contractor's operations other than a negligent fire. The 
Contractor agrees to reimburse the Forest Service for such cost for 
each operations fire, subject to a maximum dollar amount of 
[Contracting Officer insert amount]. The cost of the Contractor's 
actions, supplies, and equipment expended or used on suppressing any 
such fire, or otherwise provided at the request of Forest Service, 
shall be credited toward such maximum. If the Contractor's actual 
cost exceeds the contractor's maximum obligation stated above, the 
Forest Service shall reimburse the contractor for the excess.
    (2) Negligent Fire. A ``negligent fire'' is a fire caused by the 
negligence or fault of the Contractor's operations including, but 
not limited to, one caused by smoking by persons engaged in the 
Contractor's operations during the course of their employment, or 
during rest or lunch periods; or if the Contractor's failure to 
comply with requirements under this contract results in a fire 
starting or permits a fire to spread. Damages and the cost of 
suppressing negligent fires shall be borne by the Contractor.
    (3) Other Fires on Contract Area. The Forest Service shall pay 
the Contractor, at firefighting rates common in the area or at prior 
agreed rates, for equipment or personnel furnished by the Contractor 
at the request of the Forest Service, on any fire on the contract 
area other than an operations fire or a negligent fire.
    (d) Contractor's Responsibility for Notification in Case of 
Fire. The Contractor shall immediately notify the Government of any 
fires sighted on or in the vicinity of the work site.
    (e) Performance by the Contractor. Where the Contractor's 
employees, agents, contractors, subcontractors, or their employees 
or agents perform the Contractor's operations in connection with 
fire responsibilities, the Contractor's obligations shall be the 
same as if performance was by the Contractor.
    (f) State Law. The Contractor shall not be relieved by the terms 
of this contract of any liability to the United States for fire 
suppression costs recovered in an action based on State law, except 
for such costs resulting from operations fires. Amounts due to the 
Contractor for firefighting expenditures on operations fires shall 
not be withheld pending settlement of any such claim or action based 
on State law.


(End of Clause)

PARTS 453 THROUGH 469--[RESERVED]

SUBCHAPTER I--FOOD ASSISTANCE PROGRAMS

PART 470--COMMODITY ACQUISITIONS

Sec.
470.000 Scope of part.
470.102 Definitions.
470.102 Policy.
470.103 United States origin of agricultural products.
470.201 Acquisition of commodities and freight shipment for Foreign 
Agricultural Service (FAS) programs.
470.202 Acquisition of commodities for United States Agency for 
International Development (USAID) programs.
470.203 Cargo preference.

    Authority: 5 U.S.C. 301 and 40 U.S.C. 486(c).


470.000  Scope of part.

    This part sets forth the policies, procedures and requirements 
governing the procurement of agricultural commodities by the Department 
of Agriculture for use:
    (a) Under child nutrition programs such as the National School 
Lunch Program, The Emergency Food Assistance Program, Commodity 
Supplemental Food Program, Food Distribution Program on Indian 
Reservations, and any other domestic food assistance program.
    (b) Under title II of the Food for Peace Act (7 U.S.C. 1721 et 
seq.), the Food for Progress Act of 1985, the McGovern-Dole 
International Food for Education and Child Nutrition Program, and any 
other international food assistance program.


470.101  Definitions.

    The following definitions are applicable to this subpart:
    Commingled product means grains, oilseeds, rice, pulses, other 
similar commodities and the products of such commodities, when such 
commodity or product is normally stored on a commingled basis in such a 
manner that the commodity or product produced in the United States 
cannot be readily distinguished from a commodity or product not 
produced in the United States.
    Foreign Agriculture Service (FAS) means such agency located within 
the Department of Agriculture.
    Free alongside ship (f.a.s.) (* * named port of shipment) means a 
term of sale where the seller fulfills its obligation to deliver when 
the goods have been placed alongside the vessel on the quay or in 
lighters at the named port of shipment. The buyer bears all costs and 
risks of loss of or damage to the goods from that moment.
    Grantee organization means an organization which will receive 
commodities from the United States Agency for International Development 
under title II of the Food for Peace Act (7 U.S.C. 1721 et seq.) or 
from the Foreign Agricultural Service under the Food for Progress Act 
of 1985; the McGovern-Dole International Food for Education and Child 
Nutrition Program; and any other international food assistance program.
    Ingredient means spices, vitamins, micronutrients, desiccants, and 
preservatives when added to an agricultural commodity product.
    Last contract lay day means the last day specified in an ocean 
freight contract by which the carriage of goods must start for contract 
performance.
    Lowest landed cost means with respect to an agricultural product 
acquired under this part, the lowest aggregate cost for the acquisition 
of such product and the shipment of such product to a foreign 
destination.
    Multi-port or multi-trip voyage charter means the charter of an 
ocean carrier in which the carrier will stop at two or more ports to 
discharge cargo.


470.102  Policy.

    (a) Policy. USDA follows the policies and procedures set forth in 
the FAR as supplemented by the AGAR, in the procurement of agricultural 
commodities and products of

[[Page 60596]]

agricultural commodities that are used in domestic and international 
food assistance and nutrition programs.
    (b) Electronic submission. To the maximum extent possible, the use 
of electronic submission of solicitation- related documents shall be 
used with respect to the acquisition of agricultural commodities and 
related freight. However, to the extent that a solicitation allows for 
the submission in paper or hard copy format in addition to information 
in an electronic format and there is a discrepancy in such submissions, 
the information submitted in paper or hard copy format shall prevail 
unless the electronic submission states that a specific existing 
written term is superseded by the electronic submission.
    (c) Freight. With respect to the acquisition of freight for the 
shipment of agricultural commodities and products of agricultural 
commodities, the provisions of the FAR, including part 47, shall be 
utilized as applicable and various types of services to be obtained may 
include multi-trip voyage charters.


470.103  United States origin of agricultural products.

    (a) Products for use in international food assistance programs. As 
provided by 7 U.S.C. 1732(2) and 1736o-1(a) commodities and the 
products of agricultural commodities acquired for use in international 
feeding and development programs shall be products of United States 
origin. A product shall not be considered to be a product of the United 
States if it contains any ingredient that is not produced in the United 
States if that ingredient is:
    (1) Produced in the United States; and
    (2) Commercially available in the United States at fair and 
reasonable prices from domestic sources.
    (b) Products for use in domestic food assistance programs. 
Commodities and the products of agricultural commodities acquired by 
USDA for use in domestic food assistance programs shall be a product of 
the United States, except as may otherwise be required by law, and 
shall be considered to be such a product if it is grown, processed, and 
otherwise prepared for sale or distribution exclusively in the United 
States except with respect to ingredients as defined above. Ingredients 
from non- domestic sources will be allowed to be utilized as a United 
States product if such ingredients are not otherwise:
    (1) Produced in the United States; and
    (2) Commercially available in the United States at fair and 
reasonable prices from domestic sources.
    (c) Commingled product. (1) Except as provided in paragraph (c)(2) 
of this section, a commingled product shall be considered to be a 
product of the United States if the offeror can establish that the 
offeror has in inventory at the time the contract for the commodity or 
product is awarded to the offeror, or obtains during the contract 
performance period specified in the solicitation, or a combination 
thereof, a sufficient quantity of the commodity or product that was 
produced in the United States to fulfill the contract being awarded, 
and all unfulfilled contracts that the offeror entered into to provide 
such commingled product to the United States.
    (2) To the extent USDA has determined a commodity is one that is 
generally commingled but is also one which can be readily stored on an 
identity preserved basis with respect to its country of origin, USDA 
may require that the commodity procured shall be of 100 percent United 
States origin.
    (d) Product derived from animals. With respect to the procurement 
of products derived from animals, the solicitation will set forth any 
specific requirement that is applicable to the country in which the 
animal was bred, raised, slaughtered or further processed.


470.201  Acquisition of commodities and freight shipment for Foreign 
Agricultural Service (FAS) programs.

    (a) Lowest landed cost and delivery considerations. (1) Except as 
provided in paragraphs (a)(3) and (4) of this section, in contracts for 
FAS for commodities and related freight shipment for delivery to 
foreign destinations, the contracting officer shall consider the lowest 
landed cost of delivering the commodity to the intended destination. 
This lowest landed cost determination will be calculated on the basis 
of rates and service for that portion of the commodities being 
purchased that is determined is necessary and practicable to meet cargo 
preference requirements and on an overall (foreign and U.S. flag) basis 
for the remaining portion of the commodities being procured and the 
additional factors set forth in this section. Accordingly, the 
solicitations issued with respect to a commodity procurement, or a 
related freight procurement will specify that in the event an offer 
submitted by a party is the lowest offered price, the contracting 
officer reserves the right to reject such offer if the acceptance of 
another offer for the commodity or related freight, when combined with 
other offers for commodities or related freight, results in a lower 
landed cost.
    (2) USDA may contact any port prior to award to determine the 
port's cargo handling capabilities, including the adequacy of the port 
to receive, accumulate, handle, store, and protect the cargo. Factors 
considered in this determination may include, but not be limited to: 
The adequacy of building structures, proper ventilation, freedom from 
insects and rodents, cleanliness, and overall good housekeeping and 
warehousing practices. USDA may consider the use of another coastal 
range or port if a situation exists at a port that may adversely affect 
the ability of USDA to have the commodity delivered in a safe and 
timely manner. Such situations include:
    (i) A port is congested;
    (ii) Port facilities are overloaded;
    (iii) A vessel would not be able to dock and load cargo without 
delay;
    (iv) Labor disputes or lack of labor may prohibit the loading of 
the cargo onboard a vessel in a timely manner; or
    (v) Other similar situation that may adversely affect the ability 
of USDA to have the commodity delivered in a timely manner.
    (3) Use of other than lowest landed cost. In order to ensure that 
commodities are delivered in a timely fashion to foreign destinations 
and without damage, the contracting officer may award an acquisition 
without regard to the lowest land cost process set forth in paragraph 
(a)(1) of this section if:
    (i) The solicitation specifies that the lowest land cost process 
will not be followed in the completion of the contract; or
    (ii) After issuance of the solicitation, it is determined that:
    (A) Internal strife at the foreign destination or urgent 
humanitarian conditions threatens the lives of persons at the foreign 
destination;
    (B) A specific port's cargo handling capabilities (including the 
adequacy of the port to receive, accumulate, handle, store, and protect 
commodities) and other similar factors may adversely affect the 
delivery of such commodities through damage or untimely delivery. Such 
similar factors include, but are not limited to: Port congestion; 
overloaded facilities at the port; vessels not being able to dock and 
load cargo without delay due to conditions at the port; labor disputes 
or lack of labor may prohibit the loading of the cargo onboard a vessel 
in a timely manner; and the existence of inadequate or unsanitary 
warehouse and other supporting facilities;
    (C) The total transit time of a carrier, as it relates to a final 
delivery date at the

[[Page 60597]]

foreign destination may impair the timely delivery of the commodity;
    (D) Other similar situations arise that materially affect the 
administration of the program for which the commodity or freight is 
being procured; or
    (E) The contracting officer determines that extenuating 
circumstances preclude awards on the basis of lowest-landed cost, or 
that efficiency and cost-savings justify use of types of ocean service 
that would not involve an analysis of freight. However, in all such 
cases, commodities would be transported in compliance with cargo 
preference requirements. Other types of services may include, but are 
not limited to, multi-trip voyage charters, indefinite delivery/
indefinite quantity (IDIQ), delivery cost and freight (C & F), delivery 
cost insurance and freight (CIF), and indexed ocean freight costs.
    (4) If the contracting officer determines that action may be 
appropriate under paragraph (a)(3) of this section, prior to the 
acceptance of any applicable offer, the contracting officer will 
provide to the Head of Contracting Activity or Designee a written 
request to obtain commodities and freight in a manner other than on a 
lowest landed cost basis consistent with title 48 of the CFR. This 
request shall include a statement of the reasons for not using lowest 
landed cost basis. The HCA, or the designee one level above the 
contracting officer, may either accept or reject this request and shall 
document this determination.
    (b) Multiple offers or delivery points. If more than one offer for 
the sale of commodities is received or more than one delivery point has 
been designated in such offers, in order to achieve a combination of a 
freight rate and commodity award that produces the lowest landed cost 
for the delivery of the commodity to the foreign destination, the 
contracting officer shall evaluate offers submitted on a delivery point 
by delivery point basis; however, consideration shall be given to 
prioritized ocean transport service in determining lowest landed cost.
    (c) Freight shipping and rates. (1) In determining the lowest-
landed cost, USDA shall use the freight rates offered in response to 
solicitations issued by USDA or, if applicable, the grantee 
organization.
    (2) Freight rates offered must be submitted as specified in the 
solicitation issued by USDA or, if applicable, the grantee 
organization. Any such solicitation issued by a grantee organization 
must contain the following elements:
    (i) If directed by USDA, include a closing time for the receipt of 
written freight offers and state that late written freight offers will 
not be considered;
    (ii) Provide that freight offers are required to have a canceling 
date no later than the last contract lay day specified in the 
solicitation;
    (iii) Provide the same deadline for receipt of written freight 
offers from both U.S. flag vessel and non-U.S. flag vessels; and
    (iv) Be received and opened prior to any related offer for 
acquisition of commodities to be shipped.
    (3) USDA may require organizations that will receive commodities 
from USDA to submit information relating to the capacity of a U.S. 
port, or, if applicable, a terminal, prior to the acquisition of such 
commodities or freight.
    (d) Freight rate notification. If USDA is not the party procuring 
freight with respect to a shipment of an agricultural commodity for 
delivery to a foreign destination, the organization that will receive 
commodities from USDA, or its shipping agent, shall be notified by USDA 
of the vessel freight rate used in determining the commodity contract 
award and the organization will be responsible for finalizing the 
charter or booking contract with the vessel representing the freight 
rate.


470.202  Acquisition of commodities for United States Agency for 
International Development (USAID) programs.

    (a) Lowest landed cost and delivery considerations. (1) Except as 
provided in paragraphs (a)(3) and (e)(2) of this section, with respect 
to the acquisition of agricultural commodities for delivery to foreign 
destinations and related freight to transport such commodities under 
title II of Public Law 83-480, contracts will be entered into in a 
manner that will result in the lowest landed cost of such commodity 
delivery to the intended destination. This lowest landed cost 
determination shall be calculated on the basis of rates and service for 
that portion of the commodities being purchased that is determined is 
necessary and practicable to meet cargo preference requirements and on 
an overall (foreign and U.S. flag) basis for the remaining portion of 
the commodities being procured and the additional factors set forth in 
this section. Accordingly, the solicitations issued with respect to a 
commodity procurement, or a freight procurement will specify that in 
the event an offer submitted by a party is the lowest offered price, 
the contracting officer reserves the right to reject such offer if the 
acceptance of another offer for the commodity or freight, when combined 
with other offers for commodities or freight, results in a lower landed 
cost.
    (2) USDA may contact any port prior to award to determine the 
port's cargo handling capabilities, including the adequacy of the port 
to receive, accumulate, handle, store, and protect the cargo. Factors 
which will be considered in this determination will include, but not be 
limited to, the adequacy of building structures, proper ventilation, 
freedom from insects and rodents, cleanliness, and overall good 
housekeeping and warehousing practices. USDA may consider the use of 
another coastal range or port if a situation exists at a port that may 
adversely affect the ability of USDA to have the commodity delivered in 
a safe and/or timely manner. Such situations include:
    (i) A port is congested;
    (ii) Port facilities are overloaded;
    (iii) A vessel would not be able to dock and load cargo without 
delay;
    (iv) Labor disputes or lack of labor may prohibit the loading of 
the cargo onboard a vessel in a timely manner; or
    (v) Other similar situation that may adversely affect the ability 
of the Department to have the commodity delivered in a timely manner.
    (3) In order to ensure that commodities are delivered in a timely 
fashion to foreign destinations and without damage, USDA may complete 
an acquisition without regard to the lowest land cost process set forth 
in paragraph (a)(1) of this section, if:
    (i) The solicitation specifies that the lowest land cost process 
will not be followed in the completion of the contract; or
    (ii) After issuance of the solicitation, it is determined that:
    (A) Internal strife at the foreign destination or urgent 
humanitarian conditions threatens the lives of persons at the foreign 
destination;
    (B) A specific port's cargo handling capabilities (including the 
adequacy of the port to receive, accumulate, handle, store, and protect 
commodities) and other similar factors will adversely affect the 
delivery of such commodities without damage or in a timely manner. Such 
similar factors include, but are not limited to: Port congestion; 
overloaded facilities at the port; vessels would not be able to dock 
and load cargo without delay; labor disputes or lack of labor may 
prohibit the loading of the cargo onboard a vessel in a timely manner; 
and the existence of inadequate or unsanitary warehouse and other 
supporting facilities;
    (C) The total transit time of a carrier, as it relates to a final 
delivery date at the foreign destination may impair the

[[Page 60598]]

ability of USDA to achieve timely delivery of the commodity; or
    (D) Other similar situations arise that materially affect the 
administration of the program for which the commodity or freight is 
being procured.
    (4) If the contracting officer determines that action may be 
appropriate under paragraph (a)(3) of this section, prior to the 
acceptance of any applicable offer, the contracting officer shall 
provide to the HCA or Designee and to USAID, a written request to 
obtain commodities and freight in a manner other than on a lowest 
landed cost basis. This request shall include a statement of the 
reasons for not using lowest landed cost basis. The HCA or Designee one 
level above the contracting officer, with the concurrence of USAID, 
shall, on an expedited basis, either accept or reject this request and 
shall document this determination in writing and provide a copy to 
USAID.
    (b) Freight shipping and rates. (1) In determining lowest-landed 
cost as specified in paragraph (a) of this section, USDA shall use 
vessel rates offered in response to solicitations issued by USAID or 
grantee organizations receiving commodities under 7 U.S.C. 1721 et seq.
    (2) USAID may require, or direct a grantee organization to require, 
an ocean carrier to submit offers electronically through a Web-based 
system maintained by USDA. If electronic submissions are required, USDA 
may, at its discretion, accept corrections to such submissions that are 
submitted in a written form other than by use of such Web-based system.
    (c) Delivery date. The contracting officer shall consider total 
transit time, as it relates to a final delivery date, in order to 
satisfy program requirements for title II of Public Law 83-480.
    (d) Multiple awards or delivery points. (1) If more than one offer 
for the sale of commodities is received or more than one delivery point 
has been designated in such offers, in order to achieve a combination 
of a freight rate and commodity award that produces the lowest landed 
cost for the delivery of the commodity to the foreign destination, the 
contracting officer shall evaluate offers submitted on a delivery point 
by delivery point basis; however, consideration shall be given to 
prioritized ocean transport service in determining lowest landed cost.
    (2) The contracting officer may determine that extenuating 
circumstances preclude awards on the basis of lowest landed cost. 
However, in all such cases, commodities may be transported in 
compliance with cargo preference requirements as determined by USAID.
    (3) The contracting officer shall notify USAID or, if applicable, 
the grantee organization, that its shipping agent will be notified of 
the vessel freight rate used in determining the commodity contract 
award. The grantee organization or USAID will be responsible for 
finalizing the charter or booking contract with the vessel representing 
the freight rate so used.


470.203  Cargo preference.

    An agency having responsibility under this subpart shall administer 
its programs, with respect to this subpart, in accordance with 
regulations prescribed by the Secretary of Transportation.

PARTS 471 THROUGH 499--[RESERVED]

Donald Baker,
Senior Procurement Executive (SPE), Director, Office of Contracting and 
Procurement.
[FR Doc. 2024-15329 Filed 7-25-24; 8:45 am]
BILLING CODE 3410-90-P