SECTION 1. PURPOSE.

.01 This Order establishes review and approval requirements applicable to the exercise of contracting (procurement) authority under DAO 208-2.

.02 This Order incorporates review requirements previously contained in DAO 208-2, establishes post-award reviews by the Procurement Executive and identifies review and approval requirements for individual contracting actions.

SECTION 2. DEFINITIONS.

In the context of the contracting (procurement) system of the Department the following definitions apply:

a. Procurement Executive means the Director, Office of Procurement and Management Support Operations who is the senior official responsible for the management direction of the contracting system of the Department. The Procurement Executive is assisted by the Office of Procurement Management in performing the functions set forth in DOO 20-17 dated December 21, 1983, and in Section 4. of this order.

b. Head of the Contracting Activity (HCA) means the official who has broad management responsibility over several administrative functions, including contracting. The Head of the Contracting office reports to this person. (The HCA is the term now used for the Head of the Procuring Activity.)

c. Head of the Contracting Office (HCO) means the official who heads the office within the contracting activity that awards and administers contracts. This official is directly responsible to the HCA for managing the qualitative and quantitative aspects of contracting.

d. Contracting Officer means a person with the authority to enter into, administer and terminate contracts and make related determinations and findings and who is certified under the "Contracting Officer Certification/Warrant Program."

A contracting officer may also be any of the officials identified in paragraphs a. through c. of this Section. See also the definition of contracting officer in DAO 208-2.

e. Contract means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes certain commitments that obligate the Department to an expenditure of appropriated and nonappropriated funds and that, except as otherwise authorized, are in writing. In addition to bilateral instruments, contracts include (but are not limited to) awards and notices of awards; job orders or task orders issued under basic ordering agreements; letter contracts; orders, such as purchase orders, under which the contract becomes effective by acceptance or performance; and bilateral contract modifications. Contracts do not include grants and cooperative agreements covered by 41 U.S.C. 501, et seq.. Also, in this context, a contract is a legal instrument reflecting a relationship between the Department and a recipient whenever: (1) the principal purpose of the relationship is the acquisition, by purchase, lease, or barter, of property or services for the direct benefit or use of the Federal Government or (2) it is determined in a specific instance that it is appropriate to use a contract.

f. Contracting (procurement) means purchasing, renting, leasing or otherwise obtaining supplies or services from nonfederal sources. It includes description (but not determination) of supplies and services required, selection and solicitation of sources, preparation and award of contracts, and all phases of contract administration. Contracting (procurement) transactions include negotiated and formally advertised awards; basic ordering agreements (BOA's); task orders under BOA's; purchase orders (including standard form 44's, optional form 347's or equivalent, and fish marking contracts); delivery orders; blanket purchase agreements (BPA's); call orders under BPA's; tailored training courses; telephone equipment orders; paid advertisements, except recruitment; and any modifications to the aforementioned transactions. Contracting (procurement) transactions do not include grants and cooperative agreements; real property leases; interagency transfer of funds; FEDSTRIP; regulated utilities orders; establishment of an imprest fund; ordering from an established imprest fund; Government Bills of Lading (GBL's); "off-the-shelf" training; or paid advertisements for recruitment.

SECTION 3. LEGAL REVIEW.

.01 The contracting authority exercised shall be subject to legal review by the Assistant General Counsel for Administration, or designee, prior to execution and/or issuance of the following categories of actions:

a. all solicitations involving a Government estimated amount of $250,000 or more where price offered will be the predominant basis for award;

b. all other solicitations in excess of $100,000;

c. all awards against solicitations described under subparagraphs .01a. and .0lb. of this Section;

d. all noncompetitive awards involving $50,000 or more, including modifications to existing contracts involving the procurement of new or additional requirements, including the exercise of options;

e. all letter contracts and ensuing formal contracts involving $50,000 or more;

f. all settlement agreements involving $100,000 or more which equitably adjust the contract price pursuant to the change clauses or other contract clauses;

g. all actions involving contract reformation or contractor claims not included under subparagraph .01f. of this Section;

h. all notices preliminary to termination for default;

i. all notices of termination and other final decisions;

j. all responses to protests against award made to the Department (see also paragraph .02 of this Section); and

k. all actions expressly requiring legal review pursuant to statute, regulation, Executive policy, or Commerce Orders.

.02 These requirements for prior legal review do not affect the right and responsibility of contracting officials to submit other actions for legal review or to consult with legal counsel on any contract action regardless of its amount or type, when they deem review or advice desirable.

.03 The Assistant General Counsel for Administration has responsibility for representing the Department before the General Accounting Office (GAO) on protests against award and before the Boards of Contract Appeals. Contracting officers shall assist legal counsel in this role.

SECTION 4. PROCUREMENT EXECUTIVE REVIEW.

.01 Under Executive Order 12352, dated March 17, 1982, the Procurement Executive has Departmentwide responsibility to evaluate contracting (procurement) system performance in accordance with approved criteria and to certify to the Secretary that contracting systems meet approved criteria.

.02 Evaluation and certification of contracting systems shall be accomplished through periodic procurement management reviews of contracting offices and through post-review of individual actions processed in the contracting offices.

.03 Within 2 weeks after award of a contract or execution of a modification of a dollar amount indicated below, copies of the following documents shall be sent to the Office of Procurement Management, for post-review:

a. justifications for noncompetitive procurement and memoranda of negotiations for contracts estimated to exceed $100,000 over the contract life;

b. solicitations and memoranda of negotiations for competitive negotiated contracts estimated to exceed $250,000 over the contract life;

c. contract modifications and memoranda of negotiations for modifications exceeding $100,000, except administrative actions and those executed under contract option provisions;

d. approvals to award a letter contract;

e. authorizations for pre-contract costs; and

f. responses to protests against award.

.04 The requirements for post-review in paragraph .03 of this Section may be revised by the Procurement Executive, as deemed necessary.

SECTION 5. APPROVALS AND DETERMINATIONS BY THE HCA.

The following approvals and determinations of individual contracting actions are reserved to the HCA:

a. to make Buy American Act determinations pursuant to FAR 25.102(a) (4) and CAR 1325.102(a) (4) on contracts over $1,000,000;

b. to make determinations and findings and approve contract terms concerning advance payments;

c. to ratify unauthorized commitments;

d. to make administrative determinations described in FAR 14.406-3 and CAR 1314.406-3 in connection with mistakes in bid alleged after opening of bids and before award; and

e. to approve entering into sole source contracts or contracts resulting from unsolicited proposals (i.e., commencing negotiations for such contracts) which exceed $1,000,000 in fiscal year 1984, $500,0O0 in fiscal year 1985 and $300,000 in fiscal year 1986 and each year thereafter [ref : FPR Temporary Regulation 75, paragraph 1-3.101 (e)].

SECTION 6. APPROVALS AND DETERMINATIONS BY THE HCO.

.01 Except as provided in paragraph .02 of this Section, the following approvals and determinations of individual contracting actions are reserved to the HCO:

a. to execute those determinations and findings requiring approval at a level higher than the contracting officer (but not those reserved to HCA's);

b. to approve justifications for noncompetitive procurement in excess of $25,000, except those reserved to the HCA;

c. to approve award of letter contracts;

d. to determine unusual situations where the structured approach to fee determination is unsuitable;

e. to approve decisions by the contracting officer to make award pending a determination of the offeror's eligibility as a manufacturer or dealer;

f. to approve decisions by the contracting officer to make award pending a decision on a protest by an unsuccessful offeror to the GAO;

g. to determine that progress payments based on a percentage or stage of completion are appropriate and that adequate safeguards are provided for other than construction and ship repair contracts;

h. to approve the award of a contract for construction of a project to the firm that designed the project;

i. to waive the requirement for submission of certified cost or pricing data in exceptional circumstances;

j. to approve the publication of paid advertisements in newspapers for other than recruitment of personnel;

k. to process ratification actions for decision of the HCA; and

l. to approve authorizations for pre-contract costs.

.02 Where the HCO also serves (as the contracting officer, the approvals and determinations in subparagraphs .01a. through .011. of this Section are reserved to the HCA.

SECTION 7. OTHER REVIEWS, APPROVALS AND CLEARANCES.

Contracting authority is subject to other special review, approval, and clearance procedures established within the Department, such as:

a. "Model Control System - Contracting for Consulting and Related Services", dated June 1, 1982;

b. approval of publishing and printing requirements (see DAO 201-32, dated 10/22/80 with amendments 1 and 2);

c. clearance by the personnel office of proposed contracts for services (see DAO 202-215, dated 4/27/67);

d. approval of information resources requirements, i.e. ADP, telecommunications and word processing (see DAO 206-10, dated 3/7/75, with amendment 1; DAO 206-23, dated 7/30/79; and DAO 212-1, dated 9/1/77, with amendments 1 and 2);

e. clearance of publications and audiovisual requirements (see DAO 219-4, dated 6/18/82); and

f. certification of year-end spending requirements as established annually by the Assistant Secretary for Administration.

Signed by: Assistant Secretary for Administration

Office of Primary Interest: Office of Procurement Management

Index Changes:

Contracting (Procurement) Review and Approval Requirements 208-5

Amendment 1

Effective Date: 1985-02-01

CONTRACTING (PROCUREMENT) REVIEW AND APPROVAL REQUIREMENTS

Department Administrative Order 208-5, dated October 9, 1984, is amended as shown below . The purpose of the amendment is to make the definitions consistent with those in DAO 208-2, Contracting (Procurement) Authority.

SECTION 2. DEFINITIONS. a. In subparagraph a., "Director, Office of Procurement and Management Support Operations" is changed to read "Director for Procurement and Administrative Services."

b. Subparagraphs b., c., e. and f. are revised to read as follows:

"b. Head of the Contracting Activity (HCA) means the official who has broad management responsibility over several administrative functions including contracting. Unless specifically agreed to otherwise by the Head of the Agency, the Directors of the Regional Administrative Support Centers are the HCA's for all contracting within their regions. Within the National Capital Area the Director, National Capital Administrative Support Center (NCASC) is the HCA for the NCASC contracting office only. Directors of Administration, or equivalent, in Operating Units having contracting offices within the National Capital Area are HCA's for those offices. The Director for Procurement and Administrative Services is the HCA for the Office of the Secretary contracting office. HCA is the term now used for the Head of the Procuring Activity.

"c. Head of the Contracting Office (HCO) means the official who heads the office within the contracting activity that awards and administers contracts. This official is directly responsible to the HCA for managing the qualitative and quantitative aspects of contracting. Officials whose contracting authority is limited to transactions under Part 13 of the Federal Acquisition Regulation and Part 1313 of the Commerce Acquisition Regulation are not HCO's.

"e. Contract means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes certain commitments that obligate the Department to an expenditure of appropriated and nonappropriated funds and that, except as otherwise authorized, are in writing.

In addition to bilateral instruments, contracts include (but are not limited to) awards and notices of awards; job orders or task orders issued under basic ordering agreements; letter contracts; orders, such as purchase orders, under which the contract becomes effective by acceptance or performance; and bilateral contract modifications. Contracts do not include grants and cooperative agreements covered by 31 U.S.C. 6301, et seq.. Also, in this context, a contract is a legal instrument reflecting a relationship between the Department and a recipient whenever: (1) the principal purpose of the relationship is the acquisition, by purchase, lease, or barter, of property or services for the direct benefit or use of the Federal Government or (2) it is determined in a specific instance that it is appropriate to use a contract.

"f. Contracting (procurement) means purchasing, renting, leasing or otherwise obtaining supplies or services from nonfederal sources. It includes description (but not determination) of supplies and services required, selection and solicitation of sources, preparation and award of contracts, and all phases of contract administration. Contracting (procurement) transactions include negotiated and formally advertised awards; basic ordering agreements (BOA's); task orders under BOA's; purchase orders (including Standard Form No. 44's optional form 347's or equivalent, agreements for observer reports and fish marking contracts); delivery orders; blanket purchase agreements (BPA's); call orders under BPA's; tailored training courses; telephone equipment orders; paid advertisements, except recruitment; purchases made with imprest funds and any modifications to the aforementioned transactions. Contracting (procurement) transactions do not include grants and cooperative agreements; real property leases; interagency transfer of funds; FEDSTRIP; regulated utilities orders; establishment of an imprest fund; Government Bills of Lading (GBL's); "off-the-shelf" training; or paid advertisements for recruitment."

Signed by: Assistant Secretary for Administration

Office of Primary Interest: Office of Procurement Management

Amendment 2

Effective Date: 1986-11-10

CONTRACTING (PROCUREMENT) REVIEW AND APPROVAL REQUIREMENTS

Department Administrative Order (DAO) 208-5, dated October 9, 1984 is further amended as shown below. The purpose of this amendment is to incorporate certain provisions now in DAO 202-215 which has been revoked, and to generally update other provisions.

1. SECTION 2. DEFINITIONS. Subparagraphs g., h., and i. are added to read as follows:

"g. Service Contract means a contract that directly engages the time and effort of a contractor whose primary purpose is to perform an identifiable task rather than to furnish an end item of supply.

"h. Personal Services Contract means a contract that by its express terms or as administered, makes the contractor personnel appear, in effect, Government employees. It creates an employer-employee relationship between the Government and the contractor's personnel. An employer-employee relationship under a service contract occurs when, as a result of (i) the contract's terms or (ii) the manner of its administration during performance, contractor personnel are subject to the relatively continuous supervision and control of a Government officer or employee. Supervision consists of the day-to-day direction of the physical conduct of the details of performance of the job. However, giving an order for a specific article or service, with the right to reject the finished product or result, is not the type of supervision that results in a personal services contract.

"i. Nonpersonal Services Contract means a contract under which the personnel rendering the services are not subject - either by the contract's terms or by the manner of its administration - to the supervision and control usually prevailing in relationships between the Government and its employees."


USCOMM-DC 4271-P69

2. SECTION 7. OTHER REVIEWS, APPROVALS AND CLEARANCES.

Subparagraphs a. and c. are revised to read as follows:

"a. Approval of advisory and assistance services (see DAO 216-13 dated March 1, 1985.)

"c. The contracting officer (CO) is responsible for ensuring that a proposed services contract is proper. This will include the CO determining whether the proposed contract is for personal or nonpersonal services. Personal services contracts will not be entered into unless specifically authorized by statute. In cases where the CO believes the proposed services to be for personal services or in doubtful cases the CO shall obtain the review of the appropriate personnel officer and the opinion of legal counsel. Requested advisory and assistance services which have been reviewed and approved in accordance with DAO 216-13 will not require a separate review by personnel."

________________________________
Assistant Secretary for Administration

Office of Primary Interest
Office of Procurement Management

Amendment 3

Effective Date: 1988-03-24

CONTRACTING (PROCUREMENT) REVIEW AND APPROVAL REQUIREMENTS

Department Administrative Order 208-5, dated October 10, 1984 is hereby further amended as shown below. The purpose of the amendment is to add a new requirement and to delete requirements no longer considered necessary.

1. SECTION 3. LEGAL REVIEW. Subparagraph .01 1. is added to read as follows:

"1. In addition to the above, one copy of all protests and responses to those protests must be forwarded to the following office:

Office of Procurement Management
Attn: Oversight Staff
Room H6424
14th Street and Constitution Avenue, N.W.
Washington, D.C. 20230"

2. SECTION 4. PROCUREMENT EXECUTIVE REVIEW. a. Paragraph .02 is revised to read as follows:

".02 Evaluation and certification of contracting systems shall be accomplished through periodic procurement management reviews of contracting offices. Post-review of individual actions processed in the contracting offices may be initiated on a case by case basis."

b. Paragraphs .03 and .04 are deleted.

Signed by: Assistant Secretary for Administration