Part 316--Types of Contracts

HHS Acquisition Regulation (HHSAR)

Sections on this page:

• Subpart 316.3--Cost-reimbursement Contracts
  • 316.307 Contract clauses.
• Subpart 316.5--Indefinite-Delivery Contracts
  • 316.505 Ordering.
• Subpart 316.6--Time-and-Materials, Labor-Hour, and Letter Contracts
  • 316.603 Letter contracts.
  • 316.603-3 Limitations.
  • 316.603-70 Procedure for requesting authority to issue a letter contract.
  • 316.603-71 Approval for modifications to letter contracts.
• Subpart 316.7--Agreements
  • 316.770 Unauthorized types of agreements.
  • 316.770-2 Memorandum of understanding.

Authority: 5 U.S.C. 301; 40 U.S.C. 121(c)(2).

Subpart 316.3--Cost-reimbursement Contracts

316.307 Contract clauses.

(a) If a contract for R & D is with a hospital (profit or nonprofit), the Contracting Officer shall modify the "Allowable Cost and Payment" clause at FAR 52.216-7 by deleting from paragraph (a) the words "Subpart 31.2 of the Federal Acquisition Regulation (FAR)" and substituting "45 CFR Part 74 Appendix E."

(j) The Contracting Officer shall insert the clause in 352.216-70, Additional Cost Principles, in solicitations and contracts when a cost-reimbursement contract is contemplated.

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Subpart 316.5--Indefinite-Delivery Contracts

316.505 Ordering.

(b) (5) The HHS task-order and delivery-order ombudsman is the Director, Strategic Acquisition Service, PSC. The task-order and delivery-order ombudsmen for each of the HHS contracting activities are as follows:

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Subpart 316.6--Time-and-Materials, Labor-Hour, and Letter Contracts

316.603 Letter contracts.

316.603-3 Limitations.

An official one level above the Contracting Officer shall make the written determination that no other contract type is suitable.

316.603-70 Procedure for requesting authority to issue a letter contract.

The Contracting Officer shall include the following information in a memorandum requesting approval to award a letter contract:

(a) Name and address of proposed contractor.

(b) Location where contract is to be performed.

(c) Contract number, including modification number, if possible.

(d) Brief description of work and services to be performed.

(e) Proposed performance or delivery schedule.

(f) Amount of letter contract.

(g) Estimated total amount of definitized contract.

(h) Type of definitive contract to be executed (fixed price, cost-reimbursement, etc.).

(i) Statement of the necessity and advantage to the Government of the use of the proposed letter contract.

(j) Statement of percentage of the estimated cost that the obligation of funds represents (In rare instances where the obligation represents 50 percent or more of the proposed estimated cost of the acquisition, the Contracting Officer shall include a justification for that obligation (e.g., the contractor requires a large initial outlay of funds for major subcontract awards or an extensive purchase of materials to meet an urgent delivery requirement). In every case, documentation shall demonstrate that the amount to be obligated is not in excess of an amount reasonably required to perform the work.

(k) Period of effectiveness of a proposed letter contract. (If more than 180 days, the Contracting Officer shall provide a detailed justification).

(l) A statement of any substantive matters that need to be resolved.

316.603-71 Approval for modifications to letter contracts.

An official one level above the Contracting Officer shall approve all letter contract modifications. Contracting activities shall process requests for authority to issue letter contract modifications in the same manner as requests for authority to issue letter contracts. A request shall include the following:

(a) Name and address of the contractor.

(b) Description of work and services.

(c) Date original request was approved and name/title of approving official.

(d) Letter contract number and date issued.

(e) Detailed justification as to why the letter contract cannot currently be definitized.

(f) Detailed justification as to why the level of funding must be increased.

(g) Detailed justification as to why the period of effectiveness must be increased beyond 180 days, if applicable.

(h) If the funding of the letter contract is to be increased to more than 50 percent of the estimated cost of the acquisition, the Contracting Officer shall include the information required by 316.603-70(j).

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Subpart 316.7--Agreements

316.770 Unauthorized types of agreements.

316.770-2 Memorandum of understanding.

Use of a "memorandum of understanding,” which purports to modify mandatory FAR and HHSAR provisions to make them acceptable to a prospective contractor, is not authorized because it may address matters contrary to the language of the solicitation or prospective contract. A memorandum of understanding does not bind the Government under the contract. The Contracting Officer shall make a change in a solicitation or contract only by amendment or modification, respectively. When a change to a prescribed contract clause is considered necessary, the Contracting Officer shall request a deviation.

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• • Part Subpart 317 Special Contracting Methods
  • Detailed Table of Contents
  • Division of Acquisition