SUBPART 5201.1--PURPOSE, AUTHORITY, ISSUANCE
The Navy Marine Corps Acquisition Regulation Supplement (NMCARS) establishes uniform Department of the Navy (DON) policies and procedures implementing and supplementing the Federal Acquisition Regulation (FAR) and the Defense FAR Supplement (DFARS).
(b) The NMCARS is prepared, issued, and maintained pursuant to the authority of SECNAVINST 5400.15.
5201.104 (DFARS 201.104) Applicability.
The NMCARS applies to all DON activities in the same manner and to the same extent as specified in FAR 1.104 and DFARS 201.104.
5201.105-2 Arrangement of regulations.
(c) References and citations.
(1) References to this supplement within this supplement will be without a name or acronym prefix. References to FAR citations in this supplement should be read to include any corresponding paragraphs of the DFARS and this supplement and any additional authorizations, restrictions, policies and procedures they may contain. For example, the words "...when authorized under FAR Part 25..." include authorities granted under FAR Part 25, DFARS Part 225 and Part 5225 of this supplement. A DFARS cite in parentheses immediately after the NMCARS cite means related coverage is contained in the DFARS (e.g. 5201.104 (DFARS 201.104)). A Procedures, Guidance and Information (PGI) cite in parenthesis immediately after the NMCARS cite means related coverage is contained in PGI (e.g. 5201.104 (PGI 201.104)).
5201.107 (DFARS 201.107) Certifications.
In accordance with Section 29 of the Office of Federal Procurement Policy Act (41 U.S.C. 425), a new requirement for a certification by a contractor or offeror may not be included in any activity supplement, clause book, contract clause, solicitation provision, policy letter, policy memorandum or any other similar document unless-
(1) The certification requirement is specifically imposed by statute; or
(2) Written justification for such certification is provided to the Secretary of Defense by ASN(RD&A), and the Secretary of Defense approves in writing the inclusion of such certification requirement.
(b) Delegation of authority. Within this supplement, any authorities assigned or delegated to a specific level may be delegated or redelegated, unless otherwise restricted.
5201.170 (DFARS 201.170) Peer Reviews.
(90) DON Peer Review Procedures. The DON procedures for peer reviews are described in Annex 8, DON Peer Review Program. Peer reviews shall be performed on solicitations and contracts with estimated values at $50,000,000 or more (including options).
(91) Peer Review Rolling Forecast Report. By the 25th day of each month, HCAs shall submit a rolling forecast of acquisitions valued at $250,000,000 or more requiring peer reviews by ASN(RD&A) or DPAP, in the format prescribed by Annex 8, Peer Review Program. Submit the required information to DASN(A&LM) via electronic mail address RDAJ&As@navy.mil. Identify in the email subject line “Peer Review Rolling Forecast.”
5201.170-4 (PGI 201.170-4), Administration of Peer Reviews.
(f) Contracting Officers shall submit copies of required memoranda documenting the disposition of peer review results and recommendations to DASN(A&LM)/PA&BT via electronic mail address RDAJ&As@navy.mil. Properly identify in the subject line of the email “DISPOSITION OF PEER REVIEW RECOMMENDATIONS” followed by the applicable solicitation/contract number and
peer review date.
5201.201 Maintenance of the FAR.
5201.201-1 (DFARS 201.201-1) The two councils.
(d)(i) Submit proposed revisions to the FAR, DFARS or NMCARS to DASN(A&LM) via the Deputy/Assistant Commander for Contracts of the cognizant HCA. Each proposed revision should include a legal position and identify the name, code, and telephone number of the activity point of contact.
SUBPART 5201.3—AGENCY ACQUISITION REGULATIONS
5201.303 (DFARS 201.303) Publication and codification.
(a)(ii) To the extent possible, all text in this Supplement (whether implementing or supplemental) is numbered as if it were implementing the FAR or DFARS.
(A) Implementing numbering is the same as its FAR or DFARS counterpart, preceded by the prefix "52".
(B) Supplemental numbering is the same as its FAR or DFARS counterpart, preceded by the prefix “52” with the addition of a number 90 and up for parts, subparts, sections, or subsections or S-90 and up for lower divisions.
5201.304 (DFARS 201.304) Agency control and compliance procedures.
(4) DON Procedures for Control of Component Clause Use. Navy/Marine Corps contracting activities shall follow the approved DON Control Plan for Component Clauses available at https://acquisition.navy.mil/rda/content/view/full/7071. This Plan sets forth specific requirements that must be met before use of Component clauses in DON solicitations and contracts. All Component clauses used in DON solicitations and contracts shall be properly approved before use.
(i) Definitions.
(A) “Component” means an organizational entity exercising contracting authority within DON.
(B) "Navy Clause Baseline" means all properly approved DON component clauses.
(ii) Requirements.
(A) Publication in the Federal Register. Component clauses or changes to existing component clauses that meet the conditions of DFARS 201.304(1)(i) (i.e. have a significant effect beyond the internal operating procedures of the agency, or a significant cost or administrative impact on offerors/contractors), shall be published for public comment in the Federal Register.
(B) Approvals. The required approval authorities for use of Component clauses are established in Paragraph 4 of the DON Control Plan for Component Clauses and DFARS 201.304(1)(i). Component clauses which do not meet the conditions for USD(AT&L)/DPAP approval require HCA approval, which is delegable only as set forth in the Plan. However, ASN(RD&A)/DASN(A&LM) approval is required for any Component clause which results in a FAR/DFARS/NMCARS deviation. Approvals of deviations are set forth in paragraph 5 of the Plan. Copies of all approved Component clauses shall be submitted to DASN(A&LM) via electronic mail address at RDAPolicy@navy.mil for inclusion in the Navy clause baseline within 30 days of approval.
(C) Documentation. All Component clauses must be properly supported in writing and reviewed by Counsel before approval. The clause approval documents shall be in the format and include the content similar to that prescribed for proposed revisions to FAR or DFARS at DFARS 201.201-1(d) and, when applicable, DFARS 201.301(b).
(D) Clause numbering. All component clauses shall be numbered in accordance with
5252.101.
(E) Solicitation Provisions and Contract Clauses for the Acquisition of Commercial Items.
(a) The following approvals are required for use of agency or component-unique provisions
or clauses in solicitations and contracts for commercial items that will supplement FAR Part 12 and DFARS Part 212 provisions or clauses:
(1) DASN(A&LM) is the approval authority for inclusion of a component-unique provision or clause that is necessary to reflect an agency-unique statute applicable to the acquisition of commercial items.
(2) The NSPE is the approval authority for inclusion of any agency or component-unique
provision or clause that is otherwise not necessary to reflect an agency-unique statute applicable to the acquisition of commercial items.
(b) Annex (7), COMMERCIAL ITEM ACQUISITIONS PROVISION/CLAUSE USE,
outlines current sources of approval authority governing inclusion of provisions and clauses in solicitations and contracts for commercial item acquisitions, as well as implementing general procedures to facilitate consistency in management, control and use of properly approved provisions or clauses. See NMCARS 5212.301 (DFARS 212.301) for additional guidance
SUBPART 5201.4—DEVIATIONS FROM THE FAR
5201.402 (DFARS 201.402) Policy.
(2) Submit to DASN(A&LM), those requests for individual or class deviation that require approval at a level higher than the HCA.
5201.403 (DFARS 201.403) Individual deviations.
(1) DASN(A&LM) is the approval authority for:
(i) individual deviations from the FAR or DFARS other than those specified in 5201.403(2), DFARS 201.402(1) and DFARS 201.403(2).
(ii) individual or class deviations from NMCARS.
(iii) deviations from certain component clauses (see 5201.304(4)).
(2) In the case of a purchase or contract by an offshore contracting activity with a foreign contractor made outside the United States, its possessions, or Puerto Rico, deviations from contract
clauses may be granted by the HCA provided that no change in intent, principle, or substance is
made. The HCA may delegate this authority no lower than one level above the contracting officer.
5201.404 (DFARS 201.404) Class deviations.
Deviations involving basic agreements, basic ordering agreements, or master agreements are considered class deviations.
(b)(ii) DASN(A&LM) is the approval authority for class deviations described at DFARS 201.404(b)(ii).
SUBPART 5201.6—CAREER DEVELOPMENT, CONTRACTING AUTHORITY, AND RESPONSIBILITIES
5201.601-90 Department of the Navy authorities and responsibilities.
(a) NAVFACENGCOM cognizance of public works and civil works.
(1) Responsibility. Commander, NAVFACENGCOM is responsible for awarding and administering all architect-engineer, construction and facilities support contracts.
(2) Administration of construction portions of contracts. When a contract for construction of civil works is made directly between the DON and a builder (as distinguished from the contractor who is to operate the facilities) NAVFACENGCOM will be the contracting agency with the work to be financed by transfer of funds from the sponsoring contracting activity to NAVFACENGCOM. All other contracts potentially requiring construction of civil works shall include the clause at 5252.201-9000, Civil Works - Delegation to Naval Facilities Engineering Command.
(b) NAVSUPSYSCOM contracting responsibilities. NAVSUPSYSCOM contracting responsibilities include:
(1) providing DON-wide policy and procedures for simplified acquisition as defined in FAR Part 13, except that NAVFAC may utilize other procedures for construction, A/E services, and base support; and
(2) contracting for supplies and services throughout the DON for which no other contracting activity, office or command is delegated contracting authority. This includes contracting for Naval (but not Marine Corps) activities for visual information (motion picture and videotape) productions under the technical cognizance of and via coordination with the Naval Media Center, unless an exception is granted by the Chief of Naval Operations (N09C4).
(3) providing DON-wide policy and procedures for AbilityOne (Javits-Wagner-O’Day Act) acquisitions as defined in FAR Part 8.
(c) Military Sealift Command (MSC) responsibility for services of ships and craft for other than transportation. The MSC is responsible for purchasing or otherwise providing DON
activities, as requested, the services of ocean-going ships and craft for purposes other than transportation such as oceanographic research and survey including underwater research; cable laying; repair facilities; and range instrumentation. This includes ferries and tugs, but excludes (1) other harbor craft; (2) ferries and tugs used for husbanding services; and (3) ferries and tugs used for OCONUS services. Requirements for such services or ships, except those (1) specifically excluded by this paragraph (c); (2) met by ships and craft organic to the Military Services; and (3) required in the installation phase of a system by the systems contractor, shall be placed with MSC in a timely manner to permit maximum competition.
(d) Chief of Naval Research (CNR) responsibility for the charter or sublet of government owned research ships. The CNR is responsible for DON charter party agreements wherein DON owned oceanographic research ships are leased to research institutions for the performance of contract research.
5201.602 Contracting officers.
(b) Contract documents shall be forwarded to the appropriate attorney or attorneys in the Office of General Counsel for review as to form and legality and any additional pertinent comment or advice.
5201.602-2 (DFARS 201.602-2) Responsibilities.
(2)(i) Employees of foreign governments assigned to multi-national Joint Project Offices are
authorized to serve as CORs.
5201.602-3 (FAR 1.602-3) Ratification of unauthorized commitments.
(b)(3) HCAs may delegate authority to ratify unauthorized commitments of $100,000 or less to no lower than the Deputy/Assistant Commander for Contracts and may delegate authority to ratify unauthorized commitments of $50,000 or less to a level no lower than the CCO.
(c)(7) HCAs shall establish procedures for the ratification of unauthorized commitments to include documentation from the individual making the unauthorized commitment, a report and endorsement from the Commanding Officer of the Activity concerned to the contracting officer, preparation of a determination and findings addressing the FAR 1.602-3(c)(1) through (7) limitations, review by the appropriate counsel of the Office of General Counsel, a recommendation by the contracting officer as to ratification, signature of the determination and findings by the ratification official, and execution of the appropriate contractual documents. Comptroller review is required for ratifications in excess of $1,000,000 where the use of expired funds is anticipated.
(S-90) DON Guidance.
The following is provided as guidance for HCAs in establishing procedures to ratify unauthorized commitments. In establishing procedures, minimizing the need to ratify unauthorized commitments should be considered as a goal.
(a) The individual making the unauthorized commitment should forward to the activity’s Commanding Officer, or civilian equivalent, documentation concerning the transaction, to include:
(1) A signed statement describing--
(i) the circumstances surrounding the unauthorized commitment;
(ii) why normal procurement procedures were not followed;
(iii) what bona fide need of the Government necessitated the commitment;
(iv) whether any benefit was received and its value;
(v) how and when it was identified as an unauthorized commitment;
(vi) attempts to resolve the unauthorized commitment prior to requesting authorization (such as returning merchandise); and
(vii) any other pertinent facts.
(2) All orders, invoices, or other documentary evidence of the transaction.
(b) If the Commanding Officer, or civilian equivalent, concurs that the commitment should be ratified, then the Commanding Officer, or civilian equivalent, should forward the documentation described above in a report to the contracting officer with an endorsement that:
(1) Verifies the accuracy and completeness of the documentation;
(2) Describes any disciplinary action taken and the measures taken to prevent a recurrence of unauthorized commitments; and
(3) Provides a complete purchase description and funding for the ratifying contract.
(c) If the statement required by (a)(1) is unavailable, the Commanding Officer, or civilian equivalent, should explain in the report the reason the individual’s statement is not available and insure that all information required under (a)(1) is provided to the extent possible.
(d) The contracting officer should:
(1) Review the documentation and endorsement provided;
(2) Determine the adequacy of the facts and documentation, obtaining any additional material required;
(3) Prepare a determination and findings for signature by the ratifying official addressing the limitations in FAR 1.602-3(c)(l) through (7);
(4) Prepare a recommendation to the ratifying official;
(5) Prepare appropriate contractual documents; and
(6) Submit the contract and supporting documents to the appropriate counsel of the Office of the General Counsel for an opinion as to form and legality and for any additional pertinent comment or advice.
(e) Comptroller review is recommended for all ratifications.
(f) The ratifying official to whom authority has been delegated pursuant to NMCARS 5201.602-3(b)(3) should review the file, and if ratification is proper, sign the determination and findings.
(g) Records. HCAs should ensure that a record of all ratification actions is maintained. This record should include the identity of the contracting office performing the ratification, the dollar value of the ratification action, and a copy of the required determination and findings.
(h) Reports.
(1) A copy of all ratifications of unauthorized commitments must be submitted to the Senior Contracting Leader within the HCA.
(2) Within 30 days following the end of each fiscal quarter (30 October, 30 January, 30 April, 30 July) HCAs should provide a report via e-mail to RDAPolicy@navy.mil with the
subject “Ratifications by COMMAND NAME during the X Quarter FYXX” using the format at Annex 4. That information includes:
(a) Ratification Amount
(b) Name of Contracting Officer Recommending Ratification
(c) Name of Ratifying Official
(d) Date of Ratification approval
(e) Description of Supplies/Services bought and from whom
(f) Brief description of the circumstances of the purchase, i.e. why normal procurement procedures were not followed
201.603 Selection, appointment, and termination of appointment.
HCAs are the agency head’s designees for the selection and appointment of contracting officers, and for the termination of their appointments.
5201.690 Requirements to be met before entering into contracts.
(a) Contract actions must be subject to 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.
(b) HCAs shall establish written procedures defining the types of contract actions that will require a business clearance, the applicable dollar thresholds, and the review and approval process. At a minimum, HCA procedures shall address business clearance requirements for the actions listed below. HCAs should expand this list, as appropriate.
(1) Contracts (including task and delivery orders against indefinite-delivery contracts, basic ordering agreements, blanket purchase agreements, and other contract tools).
(2) Contract modifications not within the scope or under the terms of an existing contract.
(3) Undefinitized contract actions (see DFARS Subpart 217.74.)
(4) Modifications and changes issued pursuant to the Changes, Disputes, Economic Price Adjustment, Fair Labor Standards Act and Service Contract Act—Price Adjustment, Government Delay of Work, Government Property, Incentive Price Revision, Over and Above Work, Stop-Work Order, Termination, and Value Engineering contract clauses.
(5) Settlement of claims or requests for equitable adjustment no addressed under paragraph (4) above.
(6) Retroactive pricing after completion, including final price determination.
(7) Definitization of any undefinitized or unpriced contract action, including change orders, Engineering Change Proposals, Value Engineering Change proposals, and Over and Above Work.
(8) Advance agreements on special or unusual cost items (see 5231.109.)
(9) Actions that result in the establishment, modification or rescission of a guarantee of performance on a government contract by a third party.
(c) The following contract actions do not require a business clearance, but the file must include the rationale for award sufficiently documented in a format prescribed by HCA procedures:
(1) Contract actions awarded using simplified acquisition procedures.
(2) Task orders or delivery orders issued under FAR Subpart 8.4, Federal Supply Schedules.
(3) Task orders or delivery orders issued on a firm-fixed price basis against indefinite-delivery type contracts for
(i) supplies for which unit prices are established in the contract; or
(ii) services for which unit prices are established in the contract for specific tasks to be performed and where a statement of work/statement of objectives is not required.
(d) HCAs must establish business clearance approval levels at least one level above the individual responsible for conducting the negotiations; or, if negotiations are not required, for handling the proposed contract action. 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.
(e) The format at Annex 2, Business Clearance Memorandum, shall be used to document decisions on contract actions that are subject to business clearance requirements, unless an alternative format has been approved by DASN(A&LM).
5201.691 Procurement Management Oversight.
(a) DASN(A&LM) is responsible for oversight and review of HCAs and other designated DON contracting organizations, and will oversee and provide guidance on the Procurement Performance Management Assessment Program (PPMAP).
(b) HCAs are responsible for oversight and review of their subordinate contracting organizations.
(c) The Commander, Naval Supply Systems Command (COMNAVSUPSYSCOM) is also responsible for oversight and review of all activities with NAVSUPSYSCOM-delegated contracting authority, and other activities as directed by DASN(A&LM) or higher-level authority.
(d) Fleet and Type Commanders are responsible for oversight and review of afloat units. Reviews may be a part of regularly scheduled Logistics Management Assessments (LMAs).
(e) Each contracting activity assigned procurement management oversight is responsible for preparing and maintaining a schedule of reviews, and conducting reviews of all subordinate organizations with delegated contracting authority.
(f) HCAs shall:
(1) When requested, nominate senior contracting personnel to serve on DASN(A&LM) PPMAP teams; and
(2) By December 30th of each year, provide DASN(A&LM) a summary of relevant findings (best practices, deficiencies, recommendations, etc.) from the results of the previous fiscal year’s PPMAP activities.
(g) DASN(A&LM) shall be advised immediately any time an organization’s contracting authority or purchase card authority is revoked, suspended or reduced.
The primary objective of procurement management oversight is to encourage and assist activities in making continuous improvements in their acquisition processes. It also provides a mechanism for sharing "best practices" throughout the DON. Procurement management oversight in the DON is conducted through the Procurement Performance Management Assessment Program (PPMAP). The PPMAP is a flexible, performance-based, process-oriented program that includes self-assessment of:
(a) control of and continuous improvement in critical procurement processes;
(b) performance-based metrics; and
(c) the results of employee and customer surveys.
