For all procurement actions subject to business clearance requirements, HCAs must establish business clearance approval levels that are at least one level above the individual responsible for conducting the negotiations or, if negotiations are not required, for handling the proposed action.
(a) Contracting actions should be subject to some form of review prior to award. The formal review process is conducted and documented through the use of the business clearance. The
purpose of the business clearance is to demonstrate that the proposed decision on a contract action
conforms to law, regulation, good business practices and DOD/DON acquisition policy. The format
at Annex 2, Business Clearance Memorandum, shall be used to document business decisions on
contract actions.
(b) HCAs should establish written procedures for the review and approval of business clearances for:
(1) Contracts (including indefinite-delivery contracts) and contract modifications for the acquisition of supplies or services not within the scope or under the terms of an existing contract.
(2) Undefinitized contract actions (see DFARS Subpart 217.74.)
(3) Basic ordering agreements.
(4) Modifications and changes issued pursuant to contract clauses such as the “Changes” or “Government Property” clauses.
(5) Retroactive pricing after completion.
(6) Definitization of any undefinitized/unpriced action under (2) or (4) above.
(7) Advance agreements on special or unusual cost items (see 5231.109.)
(8) Actions that result in the establishment, modification or recision of a guarantee of performance on a government contract by a third party.
(c) The degree and complexity of documentation required, and approval levels/thresholds, for various actions should be governed by the magnitude and complexity of the action being reviewed.
