§1109 — Title 14 Coast Guard | U.S. Code

Summary

The Coast Guard must get direct approval from its Head of Contracting Activity before it starts any contract where the terms, specifications, or price are not agreed. Any approval request must say what would happen to Coast Guard needs if getting final terms is delayed. The contracting officer must get the contract finalized by the earlier of: 180 days after the contractor gives a qualifying proposal, or the moment the amount obligated goes over 50 percent of the negotiated overall ceiling price. The Coast Guard may not obligate more than 50 percent of that ceiling until final terms are set, except if the contractor gave a qualifying proposal before hitting 50 percent — then the cap is 75 percent until the contract is finalized. The Commandant may waive these limits for contingency operations, transportation-security responses, serious emergencies that threaten health, safety, or the marine environment, or President-declared disasters under the Stafford Act. These rules do not apply to buying initial spare parts. Non-urgent spare parts or support gear may not be added into an undefinitized urgent contract unless the Commandant approves it as good business and in the United States’ best interest. Any change to the work already started under such a contract also needs the Commandant’s similar approval. When final price is set after a lot of work is done, the profit must reflect that the contractor had less cost risk for work already done and for the remaining work. Definitions: “undefinitized contractual action” — a new Coast Guard procurement started without agreed terms, specs, or price (excludes foreign military sales, purchases not over the simplified acquisition threshold, and special access programs). “Qualifying proposal” — a proposal with enough information for full and meaningful audits.

Title 14, §1109

Coast Guard — Source: USLM XML via OLRC

(a)The Coast Guard may not enter into an undefinitized contractual action unless such action is directly approved by the Head of Contracting Activity of the Coast Guard.

(b)Any request to the Head of Contracting Activity for approval of an undefinitized contractual action shall include a description of the anticipated effect on requirements of the Coast Guard if a delay is incurred for the purposes of determining contractual terms, specifications, and price before performance is begun under the contractual action.

(c)(1)A contracting officer of the Coast Guard may not enter into an undefinitized contractual action unless the contractual action provides for agreement upon contractual terms, specification, and price by the earlier of—

(A)the end of the 180-day period beginning on the date on which the contractor submits a qualifying proposal to definitize the contractual terms, specifications, and price; or

(B)the date on which the amount of funds obligated under the contractual action is equal to more than 50 percent of the negotiated overall ceiling price for the contractual action.

(2)(A)Except as provided in subparagraph (B), the contracting officer for an undefinitized contractual action may not obligate under such contractual action an amount that exceeds 50 percent of the negotiated overall ceiling price until the contractual terms, specifications, and price are definitized for such contractual action.

(B)Notwithstanding subparagraph (A), if a contractor submits a qualifying proposal to definitize an undefinitized contractual action before an amount that exceeds 50 percent of the negotiated overall ceiling price is obligated on such action, the contracting officer for such action may not obligate with respect to such contractual action an amount that exceeds 75 percent of the negotiated overall ceiling price until the contractual terms, specifications, and price are definitized for such contractual action.

(3)The Commandant may waive the application of this subsection with respect to a contract if the Commandant determines that the waiver is necessary to support—

(A)a contingency operation (as that term is defined in section 101(a)(13) of title 10);

(B)operations to prevent or respond to a transportation security incident (as defined in section 70101(6) 11 See References in Text note below. of title 46);

(C)an operation in response to an emergency that poses an unacceptable threat to human health or safety or to the marine environment; or

(D)an operation in response to a natural disaster or major disaster or emergency designated by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).

(4)This subsection does not apply to an undefinitized contractual action for the purchase of initial spares.

(d)Requirements for spare parts and support equipment that are not needed on an urgent basis may not be included in an undefinitized contractual action by the Coast Guard for spare parts and support equipment that are needed on an urgent basis unless the Commandant approves such inclusion as being—

(1)good business practice; and

(2)in the best interests of the United States.

(e)The scope of an undefinitized contractual action under which performance has begun may not be modified unless the Commandant approves such modification as being—

(1)good business practice; and

(2)in the best interests of the United States.

(f)The Commandant shall ensure that the profit allowed on an undefinitized contractual action for which the final price is negotiated after a substantial portion of the performance required is completed reflects—

(1)the possible reduced cost risk of the contractor with respect to costs incurred during performance of the contract before the final price is negotiated; and

(2)the reduced cost risk of the contractor with respect to costs incurred during performance of the remaining portion of the contract.

(g)In this section:

(1)(A)Except as provided in subparagraph (B), the term “undefinitized contractual action” means a new procurement action entered into by the Coast Guard for which the contractual terms, specifications, or price are not agreed upon before performance is begun under the action.

(B)The term “undefinitized contractual action” does not include contractual actions with respect to—

(i)foreign military sales;

(ii)purchases in an amount not in excess of the amount of the simplified acquisition threshold; or

(iii)special access programs.

(2)The term “qualifying proposal” means a proposal that contains sufficient information to enable complete and meaningful audits of the information contained in the proposal as determined by the contracting officer.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 70101(6) of title 46, referred to in subsec. (c)(3)(B), was redesignated section 70101(7) of title 46 by Pub. L. 115–254, div. J, § 1805(b)(1), Oct. 5, 2018, 132 Stat. 3534. The Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (c)(3)(D), is Pub. L. 93–288, May 22, 1974, 88 Stat. 143, which is classified principally to chapter 68 (§ 5121 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see

Short Title

note set out under section 5121 of Title 42 and Tables.

Amendments

2018—Pub. L. 115–282 renumbered section 567 of this title as this section.

§1109 Undefinitized Contractual Actions