This clause has not been authorized for official release. We recommend deferring to the text of the clause in your RFP or contract.
RESTRICTION ON THE DIRECT CHARGING OF MATERIAL (VARIATION) (JUN 2018)
(a) During the performance of this contract, it may be necessary for the contractor to procure material to respond immediately to system development requirements, system failures, and system operation requirements. This is a service contract and the procurement of material of any kind that are not incidental to and necessary for contract performance may be determined to be unallowable costs pursuant to FAR Part 31. The term “material” includes supplies, material, parts, equipment, hardware, and Information Technology (IT) resources including equipment, services, and software. Any material provided by the contractor is subject to the requirements of the Federal Acquisition Regulation (FAR), the Defense Federal Acquisition Regulation Supplement (DFARS), and the applicable Department of Navy regulations and instructions.
The costs of general purpose business expenses required for the conduct of the contractor’s normal business operations will not be considered an allowable direct cost in the performance of the contract. General purpose business expenses include, but are not limited to, the cost for items such as telephones and telephone charges, reproduction machines, word processing equipment, personal computers and other office equipment and office supplies. The term “other direct costs” includes incidental services performed by other than the prime contractor or approved subcontractors in performance of this contract.
(b) List of Allowable Material:
- Electronic Components and Materials
- Hardware/Raw Manufacturing Material
- Special Processes
- Aircraft components
- Aircraft support equipment
- Lab / Portable Test Equipment
- Test fixtures and mounting components
- Lab infrastructure materials and equipment
- Lab Infrastructure maintenance materials
- Data processing and storage equipment
- Network equipment
- Hazardous Materials
- Safety Equipment
(c) In addition to Contracting Officer Representative (COR) concurrences and Contracting Officer approvals listed below, IT resources may not be procured unless the approvals required by Department of Defense purchasing procedures have been obtained. IT resources are defined as any equipment and or interconnected system and/or subsystem of equipment used in the automatic acquisition, storage, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data information. IT resources include personal computers, laptops, printers, software, servers, hubs, routers, phones, facsimile machines and any related maintenance, telecommunications, training, or other support services. To obtain IT approval the contractor shall prepare an IT Request within the Navy Information Dominance Approval System (NAV-IDAS) with a complete list of items to be obtained. The IT approval shall be provided to the COR prior to procurement.
(d) Prior written concurrence from the COR and/or approval from the Contracting Officer shall be required for all purchases of material (IT resources or non-IT resources) in accordance with the dollar thresholds listed below. Requests for approval shall include a list of the material to be procured, an explanation of the need for the material, IT approval (if applicable), a listing of quotes received, the reason for the selected source, and the determination of price reasonableness. If the procurement is sole sourced to a particular supplier, include the rationale for limiting the procurement to that supplier.
(e) For procurements of materail nopt included in the above List of Allowable Material, COR concurrence and Contracitng Officer approval is required, regardless of total value. No material with a single unit cost of $150,000.00 or greater shall be procured under this contract. No single procurement with a total value, that is the sum of all items, of $750,000.00 or greater may be procured under this contract. Procurements will not be split to circumvent these thresholds.
(f) When it is necessary for the contractor to procure material to immediately respond to emergency requirements, the contractor shall obtain prior verbal authorization from the COR to be followed by written COR authorization within the next business day of the procurement. The written authorization must reference when the verbal authorization from the COR occurred. These emergency requirements are for any items with a total value greater than $10,000.00.
(g) For procurement of all software licenses regardless of total value, COR concurrence and Contracting Officer approval is required. If the COR concurs with the request, the COR shall provide the request for the approval to the Contracting Officer. The Contracting Officer shall provide notification of disapproval or approval to the COR and Contractor.
(h) For procurements with a total value, $3,000.00 and below no COR concurrence or Contracting Officer approval is required.
(i) For procurements with a total value between $10,000.01 and $150,000.00 COR concurrence is required.
(j) For procurements with a total value between $150,000.00 and $750,000.00, COR concurrence and Contracting Officer approval is required. If the COR concurs with the request, the COR shall provide the request for approval to the Contracting Officer. The Contracting Officer shall provide notification of disapproval or approval to the COR and Contractor.