(a) The following procedures, in consonance with the DPAS regulation (15 CFR 700), shall apply when industry fails to adequately respond to solicitations for supplies needed to support the Military Services as prescribed in FAR 11.603.
(1) Reserved.
(2) To be reasonably certain that the companies upon which rated orders are placed unilaterally may not legally reject the orders (see DPAS 15 CFR 700.13(b) and (c)) and to assure that the placement of a rated order is practicable, rated orders issued unilaterally shall comply with the following:
A rated order shall not be issued unilaterally to a company when a reasonable doubt exists as to its capability to produce an item. A plant survey should be made by a Defense Contract Management Agency (DCMA) field office to determine that the company has the production capability, the financial capability, and the facilities to produce the item. The refusal of a company to permit such a survey, however, shall not alone be the basis for issuing a rated order. The contracting office’s decision in such cases will be based on the best information obtainable.
(3) The rated order that is issued unilaterally results in a "forced" action which may generate complaints or objections from suppliers. Therefore, extreme caution is required to assure equitable distribution of the orders to selected individual firms. Within the limits prescribed in subparagraph (2) above, the quantity to be included in each rated order and the number of companies to be selected shall be determined in accordance with the following criteria:
(i) When a production line must be established to produce the specific item, the rated order quantity shall not be less than a minimum economical production run.
(ii) When the total contract requirement represents a minimum economical production run for only one (or a few) of the capable producers, the rated order(s) shall be issued to the company(ies) considered the most capable and on which the impact on production will be least adverse minimal.
(iii) When there are a large number of companies capable of producing the total required quantity, the most qualified companies shall be selected. The quantity placed with each company shall not exceed 20 percent of each company's total capability to produce a like or similar item during the production period, until the total quantity is covered. The 20 percent restriction may be exceeded when a company so desires. (Note: The 20 percent is applied against the company's total capability to produce the like or similar item, irrespective of whether the company has multiplant or single plant production facilities.)
(iv) When there are relatively few companies capable of producing the items, the total quantity shall be allocated among all qualified producers, regardless of the percentage of capacity utilized.
(v) Every effort shall be made in each case to spread the requirement in such a way as to minimize the overall impact on the affected industry.
(4) The price data for these rated orders issued unilaterally shall be developed using the latest published industry pricing data or the last award price, adjusted as necessary to reflect current market pricing conditions. Further adjustment of these prices may be necessary to meet a quality producer’s standard, or to provide for a differential for a job shop's cost as compared with mass production costs. It should be noted that when pricing rated orders, the applicable requirements of FAR and the DFARS pertaining to cost or pricing data shall be followed.
(5) Reserved.
(6) Requirements for contract review and approval by the Executive Directorate, Acquisition Management .
(i) The requirements of 1.690-6 for review and approval prior to award of certain type contracts are waived for contracts resulting from rated orders that are issued unilaterally. However, such contracts for which preaward review has been waived shall be submitted to HQ DLA for a postaward review when called for by J-73.
(ii) Letter contracts still require authorization by HQ DLA in accordance with 1.690-6(g).
(7) A copy of all unilateral rated orders issued unilaterally will be forwarded to HQ DLA, ATTN: J-74, at time of issue.
(8) There may be instances when suppliers refuse to accept unilateral rated orders issued unilaterally. In such situations, negotiations shall be conducted at the level of the chief of the contracting office to determine whether some accommodation can be reached. If the contracting office agrees that a contract requirement is inconsistent with the contractor's regularly established terms of sale but there is no authority to waive the requirement, the matter will be referred to HQ DLA, ATTN: J-339, for resolution. If, in the judgment of the contracting office, the DLA requirement is valid and no agreement was reached, consistent with the contractor's regularly established terms of sale, but the parties disagree on the terms and conditions of the unilateral rated order (including failure to agree on a reasonable price), the contractor's written refusal, citing reasons, together with a completed DoC Form BXA ITA-999, Request for Special Priorities Assistance, shall be forwarded through established priorities assistance channels to HQ DLA, ATTN: J-74, for action. It is emphasized that DoC will may not direct any company to accept a rated order when the company has proper grounds for refusing the order. Each DLA contracting office will assure that the actions and determinations described, including a physical plant survey (for exception see subparagraph (2) above) by a DCMA field office, have been accomplished prior to requesting HQ DLA sponsorship of a request for DoC special priorities assistance to the DoC.
