U.S. Department of Health & Human Services
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Part 316--Types of Contracts
HHS Acquisition Regulation (HHSAR)
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Authority: 5 U.S.C. 301; 40 U.S.C. 121(c)(2).
(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.
(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:
An official one level above the Contracting Officer shall make the written determination that no other contract type is suitable.
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.
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).
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.