(b)(90) DLA policy is to consider offers of surplus material in accordance with solicitation requirements and to make optimum use of surplus material when acceptance of such offers is in the best interest of the Government. This policy is intended to ensure that offers of surplus material receive consistent, timely and reasonable treatment. It is also intended to clarify DLA procedures and maximize streamlining. In all cases, surplus material accepted by the Government must conform to technical requirements in the solicitation. Proper consideration of surplus offers can significantly reduce material cost and delivery time, which benefits our customers and makes DLA a more attractive source of supply. Surplus material is usually readily available, which can make it particularly valuable for satisfying urgent requirements. The nature of our business situation demands that we prudently use the services of surplus dealers, who provide a warehousing capability that helps meet our unprogrammed demands for material. (Guidance for technical/quality specialists to complement this policy is provided in the DLA Technical Support Policy and Procedures Deskbook, Appendix L. The Deskbook can be accessed electronically at https://today.dla.mil/j-3/j-334/techsuppdeskbook.htm .)
(b)(91) Market research requirements for establishing and maintaining long term contracts (LTCs). Business rules governing establishment and maintenance of LTCs by ISTs and SMSGs are addressed in the Procurement Business Rule for Long Term Contracting, which can be accessed at https://polh.bsm.dla.mil/.
(A) When establishing LTCs, ISTs and SMSGs shall-
(1) Conduct market research to determine availability of surplus material; and
(2)(i) If market research indicates all or a portion of the recommended buy (RB) quantity of an item is available as surplus material, reduce the RB quantity for that item by the quantity that is available as surplus; and
(ii) Acquire the quantity removed from the LTC separately, using whatever procedures are appropriate to the circumstances (e.g., competitive solicitation, emergency support procedures for high priority requirements, etc.)
(B) When an NSN is a candidate for addition to an existing LTC, ISTs and SMSGs shall-
(1)(i) Obtain Product Specialist certification that item is sole source to holder of the long term contract;
(ii) Post announcement in FedBizOps stating NSN has been targeted for addition to the LTC; and
(2) If responses to FedBizOps notice indicate all or a portion of the recommended buy (RB) quantity of the item is available as surplus material, reduce the rb quantity for that item by the quantity that is available as surplus material before adding the item to the ltc. the quantity removed from the ltc will be acquired separately, using whatever procedures are appropriate to the circumstances (e.g., competitive solicitation, emergency support procedures for high priority requirements, etc.)
(C) When an offer of surplus material is received in response to a solicitation for an LTC, the contracting officer shall consider whether the quantity of surplus material meets the requirements of the solicitation. If so, the contracting officer shall consider the offer of surplus material to be responsive to the solicitation. If not, the contracting officer shall reject the offer as not conforming to the solicitation and shall forward a summary of the offer to the item manager (supply planner). The item manager (supply planner) shall take appropriate action in the best interest of the Government, based on the item manager’s (supply planner’s) judgment; such as initiating a separate, fixed-quantity purchase request, if warranted by the agency’s supply position. Any action(s) by the item manager (supply planner) must be taken in coordination with the office that identified the item(s) for placement on an LTC (e.g., the Strategic Material Sourcing Group or Integrated Supplier Team).
(ii) Do not evaluate offers of surplus material when the technical/quality specialist has included a statement in the Technical Guidance Information (TGI) field on the purchase request (PR) trailer advising that offers of surplus material will not be considered for the item being acquired. (See 11.302(b)(92)(iii).) The ESA must provide written notice that offers of surplus material will not be considered for specified items or categories of items, with supporting documentation in sufficient detail to demonstrate that the restriction is necessary to satisfy the needs of the Government.
(iii) Establish internal audit procedures to ensure that offers of surplus material are processed in accordance with the policy in this Subpart 11.3 and in Appendix L.
(A) Ensure that actions related to referrals, evaluations, notification of offerors, and award decisions are made in a consistent, timely and reasonable manner, in order to provide offerors with an opportunity to compete in accordance with the Competition in Contracting Act.
(B) Ensure that the following conditions, in and of themselves, are not treated as an acceptable basis for excluding an offer of surplus material from consideration:
(1) Dollar value of the acquisition;
(2) Age of the offered material;
(3) When the buy is for stock;
(4) When the offer is for less than the solicited quantity;
(5) When material is not in the original package; or
(6) Past or average Engineering Support Activity (ESA) response times, unless substantiated by data specific to evaluations of surplus offers by the cognizant ESA.
(7) Offer is in response to a solicitation for a long-term contract (see 11.302(b)(91)(C), 11.304-91(a)(2), and 15.305(b)).
(C) For automated offers, ensure that supporting documentation provided by an offeror of surplus material is promptly distributed to the contracting officer for timely consideration.
(D) Ensure that technical acceptability of an offer of surplus material is applied only to the current procurement.
(iv) Ensure that the technical/quality specialist has considered all information provided by the offeror concerning technical acceptability of the offered surplus material. If the offer of surplus material is found to be technically unacceptable, ensure the technical/quality specialist has documented the specific technical reasons why the surplus material is technically unacceptable.
(v) Ensure that when acquiring critical safety items, offerors meet the additional requirements in 52.211-9005 (see 11.302-91).
(b)(92) Contracting officer responsibilities and procedures.
(i) Unless 11.302(b)(92)(iii) applies, insert the clause at 52.211-9000, Government Surplus Material, and the provision at 52.211-9003, Conditions for Evaluation of Offers of Government Surplus Material, as prescribed at 11.304-91(a); except that in automated solicitations these can be replaced by a statement referring offerors of surplus material to a source of information where complete conditions for evaluation are detailed (e.g., “Offerors of Surplus Material - See EBB Sign-On Instructions”). When acquiring critical safety items, also follow 11.302-91.
(ii) When use of a warranty provision is desired and offers of surplus property will be considered, incorporate a warranty clause as prescribed in FAR Subpart 46.7 or DFARS 46.7, to ensure that warranty provisions are applied to all contractors, whether manufacturers or dealers and whether or not surplus material is offered.
(iii) Insert the provision at 52.211-9009, Non-Acceptability of Government Surplus Material, as prescribed at 11.304-91(b), when the TGI field on the purchase request (PR) trailer sheet indicates that offers of surplus material will not be considered for the item being acquired (see 11.302(b)(91)(ii)).
(iv) When it is determined in accordance with 52.211-9003 that an offer of surplus material is otherwise in line for award, the contracting officer shall-
(A) Coordinate with the supply planner and the product specialist to confirm that there is sufficient time before proposed award to permit evaluation of the offer of surplus material, and that delay of award will not result in failure to meet customer need date or otherwise adversely affect the Government. This determination shall be based on the Agency supply position and lead time required for a technical evaluation. Benefits that may accrue to the Government, if the offer of surplus material were accepted, must be weighed against any adverse effects that would result from delay of award. If the benefits are significant, consideration shall be given to requesting expedited evaluation. If it is determined that award will not be delayed to evaluate the offer of surplus material, the contracting officer shall fully document the basis for this determination in the contract file;
(B) If it is determined that award will be delayed to evaluate the offer of surplus material, promptly refer the offer to the technical/quality specialist for a determination of technical acceptability. Do not hold up the technical referral while waiting for another offer or another offeror’s supporting documentation. Include in the technical referral the completed 52.211-9000 and all supporting documentation provided by the offeror. While it is preferred that an offeror fill out the clause completely, failure to provide all information is not a basis for automatic rejection of the surplus offer. (For critical safety items, also include a copy of 52.211-9005 and supporting documentation provided by the offeror. See 11.302-91.) Provide all relevant information that will help the technical/quality specialist prioritize the evaluation. Such information includes, but is not limited to, the following: the priority or urgency of the requirement, the quantity being acquired, whether backorders exist, anticipated savings in unit price and/or delivery time if the surplus offer is approved, whether there are other sources, if the surplus offer is the only offer received, etc.
(v) If the technical/quality specialist advises the material is technically acceptable, award can be made to the offeror of surplus material; except that award must not be made to a surplus offeror who is no longer in line for award (e.g., due to costs for special testing or inspection requirements that would have to be included in the contract).
(vi) If the technical/quality specialist has forwarded special inspection or testing requirements, ensure that these are incorporated into the award. Contract requirements must also ensure that the Government has the right to access contractor premises and to select the surplus material to be inspected or tested.
(vii) If an offer of surplus material is determined technically unacceptable, the technical/quality specialist must provide supporting documentation that cites specific reasons why the material is technically unacceptable. Promptly notify the offeror that the offer was rejected (see 11.302(b)(92)(xi)(C)).
(viii) If the data provided by an offeror of surplus material are determined to be inadequate, the technical/quality specialist must provide supporting documentation that cites specific reasons why the data are inadequate. Promptly notify the offeror that the offer of surplus material will not be evaluated (see 11.302(b)(92)(xi)(B)(1)); or, if the contracting officer determines it is in the best interest of the Government, the offeror may be given an opportunity to provide the additional data (11.302(b)(92)(xi)(A)). The request for additional data may be made by the contracting officer or technical/quality specialist, orally or in writing. If the technical/quality specialist is to contact the offeror, the contracting officer’s coordination must be obtained.
(ix) If the item being acquired is otherwise procurable and the item manager does not concur in forwarding the surplus offer for ESA review or re-evaluation, the technical/quality specialist must advise the contracting officer and forward the item manager’s rationale why the surplus offer will not be forwarded to the ESA. (However, if the time to effect delivery from the offeror next in line for award will exceed the time to evaluate and effect delivery of the surplus material, the item manager must concur in an ESA referral.) Promptly notify the surplus offeror that the offer of surplus material will not be evaluated (11.302(b)(92)(xi)(B)(3)). Award may be made to the offeror next in line for award; however, award must not be made for a quantity that exceeds the immediate need (e.g., the backordered quantities).
(x) If the cognizant ESA does not respond to a DLA Form 339, Request for Engineering Support, within the estimated timeframe established by the technical/quality specialist in accordance with Appendix L, the technical/quality specialist must contact the ESA to determine the status of the evaluation. If the item being acquired is otherwise procurable, and the item manager confirms that the anticipated ESA response date is unacceptable, the technical/quality specialist must advise the contracting officer and forward the item manager’s rationale why additional time cannot be allowed for the ESA to evaluate the surplus offer. Promptly notify the surplus offeror that the offer of surplus material will not be evaluated (11.302(b)(92)(xi) (B)(3)). Award may be made to the offeror next in line for award; however, award must not be made for a quantity that exceeds the immediate need (e.g., the backordered quantities).
(xi) When the following conditions apply, promptly notify an offeror of surplus material and provide the information as described below. Notification must be made electronically if possible and not later than upon release of award.
(A) When the contracting officer determines it is in the best interest of the Government to give the offeror an opportunity to submit additional data (11.302(b)(92)(viii)), provide specific data requirements to the offeror, provide a specific timeframe for the response to be submitted (generally 3-5 days), and advise that the offer may not be considered if the timeframe is not met.
(B) When the offer of surplus material will not be evaluated because -
(1) Data provided was inadequate for evaluation, and the offer has been deemed incomplete. Cite specific reasons why the data are inadequate. (See 11.302(b)(92)(viii).
(2) The offeror was given an opportunity to provide additional data to support its offer and failed to respond with adequate and timely information. Provide specific details to the offeror to support the contracting officer’s statement(s). (See 11.302(b)(92)(viii).)
(3) The item manager does not concur in forwarding the surplus offer for review or re-evaluation, or to accommodate an extension of the ESA response time. Use the rationale provided by the item manager and provide specific reasons to the offeror why the surplus offer will not be evaluated. (See 11.302(b)(92)(ix) and (x).)
(C) When the offer of surplus material was evaluated and rejected, either locally or by the cognizant ESA, provide the specific technical reasons for the rejection.
(xii) When an offeror of surplus material is the prospective awardee, the contracting officer shall refer the acquisition to the technical/quality specialist (product specialist), who shall determine whether quality assurance will take place at source or destination. If the technical/quality specialist (product specialist) determines inspection/acceptance (I/A) shall be at source and the award will be administered by DCMA, the technical/quality specialist (product specialist) shall prepare a Quality Assurance Letter of Instruction (QALI). The contracting officer shall advise the technical/quality specialist (product specialist) what should be included in the QALI. All QALIs shall include at a minimum:
(A) A copy of the completed clause at 52.211-9000, with instructions to verify the representations and documentation provided by the offeror. Inspection criteria must be consistent with the basis for determining the surplus material acceptable. (For example, if previous Government ownership was demonstrated by documentation other than a Government contract number, the current contract must not require the surplus material to be identified to a previous Government contract.) Inspection criteria must include special inspection or testing requirements forwarded by the technical/quality specialist (product specialist), if any. (Criteria may also include dimensional inspection, if appropriate; or destructive testing, depending on the age of the material. Obtain the recommendation of the technical/quality specialist (product specialist) to determine the need for additional criteria.)
(B) A requirement for the QAR to notify the contracting officer if, at the time of Government source inspection, the QAR is denied access to the contractor’s plant or not permitted to select the material to be inspected.
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(xiii) Take appropriate action, which may include cancelling the purchase order or terminating the contract for default, and assessing appropriate damages when -
(A) Surplus material tendered for acceptance does not conform to contract requirements; or
(B) The QAR advises that the contractor has refused to provide access to its plant or to permit the QAR to select the surplus material to be inspected at the time of Government source inspection.
(
