(c) Insurance coverage relates only to the period during which the commodities are in transit to the cooperating country, except that it may include coverage under a so-called "warehouse-to-warehouse" clause; and

(d) The premiums do not exceed the limitations contained in § 201.68.

(e) Within 15 days after payment by a supplier of marine insurance of any loss claim in excess of $6,000 to the assured or to his assignee under any marine insurance policy financed by A.I.D. pursuant to this part, the supplier of · marine insurance notifies A.I.D., Office of the Controller, of the amount and date of the payment, a description of the commodity, the A.I.D. number, name of carrier, vessel, and voyage number (alternatively, flight or inland carrier run number), date of the bill of lading, the identity and address of the assured, and the identity and address of any assignee of the assured to whom payment has actually been made.

(ii) Within the meaning of § 201.11(e) as well as of this subparagraph, insurance is "placed" in a country only if payment of the insurance premium is made to, and the insurance policy is issued by, an insurance company office located in said country. "On a competitive basis" means under conditions of effective competition, but not necessarily under formal competitive bid procedures. §201.14 Eligibility of bid bonds and

performance guaranties.

The cost of any bid bond posted by a successful bidder or of any guaranty of performance posted by a supplier is eligible for financing under the implementing document to the extent that the principal amount of the bond or guaranty does not exceed the amount customary in international trade for the type of transaction and commodity involved: Provided, That the bid bond and guarantee of performance must be payable in U.S. dollars and must conform to the requirements of the invitation for bids or the contract, as applicable.

§ 201.15 U.S.-flag vessel shipping requirement.

(a) General requirement. At least 50 percent of the gross tonnage of all commodities financed with A.I.D. dollar funds and transported to the cooperating country on ocean vessels shall be trans

ported on privately owned U.S.-flag commercial vessels. The foregoing requirement shall apply separately for any dry bulk carrier shipments, dry cargo liner shipments, and tanker shipments from each of the following geographical areas: (1) United States;

(2) Europe and Africa;

(3) Near East and South Asia;

(4) Latin America and Canada; and (5) Far East.

(b) Responsibility of borrower/grantee. The borrower/grantee shall be responsible for assuring compliance with the requirements of paragraph (a) of this section and for imposing upon subborrowers, contractors and importers such requirements regarding shipping arrangements with suppliers as will assure discharge of this responsibility. Such compliance shall be achieved during each U.S. fiscal year (July 1-June 30) as well as each quarterly period thereof, or during such other period or periods as may be specified by A.I.D. in agreements or implementing documents.

(c) Nonavailability of U.S.-flag vessels. Upon application of the borrower/ grantee, AID/W (Resources Transportation Division) will determine and advise the borrower/grantee whether or not a privately owned U.S.-flag commercial vessel is available for a specific shipment of commodities at fair and reasonable rates. Such determination and advice of nonavailability does not relieve the borrower/grantee of the obligation to comply with the requirements of paragraphs (a) and (b) of this section except to the extent that A.I.D. after reviewing shipments by the borrower/grantee during the fiscal year, quarterly period thereof, or other relevant time period, determines that such compliance has not been possible. Any such determination and advice will not render transportation costs on foreign flag vessels eligible for A.I.D. financing.

(d) Privately owned U.S.-flag commercial vessels. For purposes of this section the term "privately owned U.S.flag commercial vessels" shall not include any vessel which, subsequent to September 21, 1961, shall have been either built outside the United States, rebuilt outside the United States, or documented under any foreign registry until such vessel shall have been documented under the laws of the United States for a period of 3 years.

This subpart prescribes procurement procedures which shall apply to an importer whenever a commodity procurement is to be financed by A.I.D.

§ 201.21 Notice to supplier.

The importer is responsible for providing the supplier with the following information (either through the invitation for bids or otherwise):

(a) Notice that the transaction is to be financed by A.I.D. under this part; (b) The identification number of the implementing document; and

(c) All additional information prerequisite to A.I.D. financing and contained in the instructions from the borrower/grantee to the importer (for example, eligible source of commodity, periods during which deliveries must be made, shipping provisions, and documentation requirements).

§ 201.22 Formal competitive bid proce

dures.

If the implementing document requires, or if the importer elects procurement through formal competitive bid procedures, the following minimum requirements shall apply:

(a) Contents of the invitation for bids. Every invitation for bids and every attachment or amendment to an invitation shall be in the English language. The invitation shall contain the following:

(1) Statement of requirements. The invitation shall state specifically that formal competitive bid procedures apply. The terms and conditions which apply to the procurement shall be clearly indicated, including any factors other than price to be used in evaluation. Commodity specifications shall be stated in terms of U.S. standards, in a nonrestrictive manner, and in sufficient detail to permit maximum response from prospective suppliers.

(2) Statement regarding submission of bids. Invitations for bids shall state the applicable invitation number, the address to which bids are to be sent, the closing hour and date for submission and the date, hour, and place for public opening of bids. If additional drawings, details, or regulations or forms are necessary for bidding, the invitation shall state where such material may be obtained.

(3) Statement regarding this Part 201. Invitations for bids shall expressly indicate the extent to which any resulting contract is subject to the requirements of this part.

(4) Statement regarding late bids. The invitation for bids shall state that no bid received at the address designated in the invitation after closing hour and date for submission will be considered for award unless its late arrival at that address is attributable to mishandling of the bid documents by the purchaser or any of his agents directly associated with receiving or processing bids. In no case will the purchaser consider a bid which was not received at the place of public opening before the award was made.

(b) Advertising the invitation for bids. The invitation for bids shall be advertised in the manner described in § 201.24(a)(1).

(c) Handling bids. Bids received shall be held intact and sealed and shall be safeguarded against disclosure of contents prior to bid opening. The bids shall be opened publicly as specified in the bid invitation, and all properly submitted bids shall be considered. Direct submission of a bid by a prospective supplier, rather than through an agent or other representative of the supplier in the cooperating country, shall not be cause for rejection.

(d) Awards. Every award shall be made to that responsible bidder whose bid, conforming to the invitation for bids, is lowest in price, unless another bid is demonstrably more adventageous to the importer because of any factor (other than price) set forth in the invitation for bids as a factor to be considered in the evaluation of bids.

(e) Submission of award information to A.I.D. The importer shall complete Form A.I.D. 11-83 "Abstract of Bids", identifying thereon the successful bidder, and noting any two or more identical bids or any evidence of suspected collusion. If the lowest bid has not been accepted, the importer shall justify the award and shall append to the Abstract a statement of reasons for rejecting all lower bids. The Abstract and any justification statement shall be sent in triplicate to the Office of the Controller, A.I.D., Washington, D.C. 20523, to arrive within 20 days after the award of the contract.

[A.I.D. Reg. 1, 32 F.R. 7672, May 25, 1967, as amended by 34 F.R. 14518, Sept. 18, 1969]

§ 201.23 Other procurement procedures.

(a) General requirements. Procurement not subject to § 201.22 shall be made in accordance with good commercial practice. Specifications shall be expressed in terms of U.S. standards and shall be in the English language. All solicitations of quotations and offers shall be made uniformly to a reasonable number of prospective suppliers.

(b) Notification as adequate solicitation. If the notification requirements of § 201.24(a) (2) apply, such notification shall be deemed an adequate solicitation of quotations and offers, and all supplementary solicitations shall be consistent with such notification.

(c) Notice of quotations and offers received. A.I.D. may require that an importer furnish an abstract in the English language and identify thereon all offers or quotations received, the offer accepted or order placed, the price, the quantity, the name and address of all persons submitting offers or quotations and of their principals, if any (including manufacturers or processors of the commodity). § 201.24 Solicitation of bids and quota

tions.

(a) Notification requirements. Except as paragraph (b) or (c) of this section may apply, the importer shall comply with the minimum notification requirements set forth in this paragraph (a). He may take such additional steps to notify prospective suppliers as are consistent with prudent procurement.

(1) Under formal competitive bid procedures. Invitations for bids must be advertised in the following manner:

(i) Submission to A.I.D. Three copies of the invitation for bids must be sent to the Office of Small Business, A.I.D., Washington, D.C. 20523, and 50 copies of the invitation shall be sent to a place in the United States designated by the borrower/grantee and agreed to by A.I.D. Invitations must be available to prospective suppliers free of charge, unless otherwise authorized by the Office of Small Business AID/W. All copies must be accompanied by a complete set of any additional drawings, details, applicable Government regulations, and other pertinent data necessary to the preparation of bids, or make reference to such additional documents as are readily available to the public or are available for public inspection.

(ii) Time of submission. Copies of the invitation for bids must be furnished sufficiently in advance of the bid-closing date to permit adequate preparation of bids. Unless a longer period is prescribed by the Office of Small Business, AID/W, or upon application of the importer a lesser period is authorized by such Office, the required copies shall be sent so as to arrive in the Office of Small Business, AID/W, at least 45 days in advance of the bid-closing date.

(2) Under other procurement procedures. In procurement other than by formal competitive bids, the solicitation of quotations and offers must include the following: The importer shall submit, in triplicate, to the Office of Small Business, A.I.D., Washington, D.C. 20523, a notice of proposed procurement, which shall include commodity specifications in terms of U.S. standards, and other procurement data, in the English language and in the format set out in "Instructions for Notice of Proposed Procurement" (Appendix B to this Part 201). No importer, importer's agent or representative, or anyone acting in his behalf, shall accept any offer or place any order or agree to accept any offer or place any order until 45 days after the expected arrival of such form at the Office of Small Business, AID/W, in the course of mail. The Office of Small Business may require a longer period or, upon application of the importer, authorize a lesser period.

(3) Resubmission of notifications to A.I.D. A.I.D. may require the revision and resubmission to A.I.D. of any invitation for bids which does not comply with the requirements of § 201.22 (a) or of subparagraph (1) of this paragraph or of any notice of proposed procurement which does not comply with the requirements of subparagraph (2) of this paragraph. In such cases the importer shall effect changes necessary to assure compliance with the applicable requirements. The bid-closing date or the date before which an order may not be placed or accepted will be extended as A.I.D. (Office of Small Business) may instruct. A.I.D. (Office of Small Business) may, when it determines it necessary, return to the importer for revision or resubmission the invitation for bids or the notice of proposed procurement. In such cases the revised invitation or notice must be resubmitted in accordance with all the requirements of this

paragraph for original submission to A.I.D.

(b) Exemption for small value procurement. Any commodity procurement undertaken by an importer under a single import license or other authority where the estimated landed cost of all purchases made by him under a single three-digit A.I.D. commodity code is less than $5,000 is exempted from the notification requirements of paragraph (a) of this section. This exemption does not apply to procurement undertaken in amounts of less than $5,000 for the purpose, or with the effect, of evading the requirements of paragraph (a) of this section.

(c) Waiver provisions. A.I.D. may waive any notification requirement in the following situations:

(1) Procurement under certain special supplier-importer relationships. (i) A supplier may apply for a waiver for the benefit of a named importer if

(a) The procurement concerns a registered brand name commodity

(1) Which is for resale by the importer;

(2) For which the importer is a regularly authorized distributor or dealer of the supplier; and

(3) For which the supplier is the sole distributor; or

(b) The procurement concerns a commodity

(1) Which is for resale by the importer; (2) For which the importer is a regularly authorized distributor or dealer of the supplier; and

(3) For which the supplier is the manufacturer or the manufacturer's regularly authorized exporter for the destination involved; or

(c) The procurement concerns a commodity

(1) Which is procured for manufacture, processing or assembly, and resale of the end-product by the importer;

(2) For which the importer is a regularly authorized distributor or dealer of the supplier; and

(3) For which the supplier is the manufacturer or the manufacturer's regularly authorized exporter for the destination involved; or

(d) The commodity is procured under such other commercial relationship which appears to A.I.D. to merit a waiver from the notification requirements.

(ii) Applications for waiver shall be sent by the supplier to the Office of Small

Business, A.I.D., Washington, D.C. 20523, and shall include the following:

(a) The name and address of the importer who serves as the authorized distributor or dealer;

(b) The specific commodities covered by the supplier-importer agreement;

(c) Certification concerning the nature and duration of the commercial relationship between the supplier and the importer, supported by a copy or abstract of the pertinent provisions of any underlying written agreement between the supplier and the importer; and

(d) If the supplier is not the manufacturer of the commodity, a statement containing the pertinent provisions of any underlying agreement between the supplier and the manufacturer.

(iii) The waiver, if granted, will be forwarded in duplicate to the supplier. The supplier is responsible for forwarding one copy of the waiver to the importer and for advising the Office of Small Business, AID/W, of any change in his agreement with the importer which may affect the waiver granted by A.I.D.

(2) Proprietary procurement. (1) Procurement where A.I.D. has determined that, in order to assure the interchangeability or standardization of equipment, or because of special design requirements, or for any similar reason, purchase of a commodity by reference to a particular specification, trade name, or designation is necessary.

(ii) Application for waivers shall be made in writing to A.I.D. by the importer and shall include supporting justification together with the recommendations of the borrower/grantee. In the absence of other instructions, such applications shall be submitted to the US AID for transmittal to AID/W. Notice of approval or rejection of any such application of a waiver will normally be transmitted to the importer through the US AID.

(3) Emergency procurement. (i) Commodity procurement necessary to avoid a serious delay in project completion or in a plant's production, or to avoid a substantial increase in the cost thereof, if the procurement cannot be effected within the time limitations prescribed by paragraph (a) of this section for notification procedures.

(ii) A request for an emergency procurement waiver shall be made by the importer to the US AID. The request shall state the facts justifying such

emergency procurement and shall bear the endorsement of the borrower/ grantee. Emergency procurement requires the prior written approval of the US AID.

(4) Special situations. (i) Procurement in special situations, if AID/W has 1 determined that it would be impracticable or inconsistent with the purposes of the Act to require adherence to the notification procedures prescribed in paragraph (a) of this section.

(ii) A request for a special situation waiver shall be made by the importer to the US AID. The request shall justify the procurement and shall bear the endorsement of the borrower/grantee. In the absence of other instructions, the US AID shall transmit the request to AID/W for decision.

§ 201.25 Advance and progress payments for custom-made commodities. (a) Advance or progress payments prior to shipment may be made with A.I.D. funds if the procurement involves any commodity made to the special specifications of the importer and if prior written approval to make such payments has been obtained from A.I.D. by the importer, through the borrower/grantee, or if such payments are authorized in the implementing document. Any request for A.I.D. approval may be submitted either to AID/W or to the US AID for transmittal to AID/W. A.I.D. will consider any such request only if

(1) The total purchase price exceeds $100,000;

(2) Each payment is at least ten percent of such price; and

(3) The total of all payments prior to shipment does not exceed eighty percent of the purchase price.

(b) A.I.D. may require the supplier to post in A.I.D.'s favor either a guaranty of performance or a prepayment bond equal to the amount of the contract. A.I.D. may impose such further conditions as it deems appropriate.

§ 201.26 Bid bonds and performance guaranties.

Whenever the importer requires the posting of a bid bond or performance guaranty, the type of bond or guaranty (whether certified check, irrevocable letter of credit, bank bond, bank guaranty, surety bond, or otherwise) shall be at the option of the bidder or supplier. Posted bid bonds shall be returned to unsuccessful bidders promptly after an award is

made. Unless converted to a required guaranty of performance, any bid bond posted by the successful bidder shall also be returned promptly. Performance guaranties (as distinguished from commodity warranties of quality or performance) shall be canceled no later than 30 days after completion of the contract performance guaranteed.

§ 201.27 Expenditure of marine insurance loss payments.

If the importer receives directly or indirectly any marine insurance loss payment under a marine insurance policy financed pursuant to this part, the importer shall use such loss proceeds to procure from a source specified in the implementing document which originally provided the A.I.D. funds commodities which have not been designated by A.I.D. to the borrower/grantee as ineligible for A.I.D. financing.

Subpart D-Responsibilities of
Suppliers

This subpart establishes the responsibilities of suppliers who furnish commodities and/or commodity-related services. The subpart also establishes procedures for prior review by A.I.D. of relevant contract data.

§ 201.31 Suppliers of commodities.

(a) Performance of the sales contract. The supplier of commodities shall comply with the terms and conditions of his contract with the importer and of any letter of credit under which he secures payment.

(b) Eligibility of commodities. The supplier shall fulfill his responsibilities under § 201.11 by assuring that

(1) The commodity conforms to the description contained in his contract and letter of credit and, unless otherwise authorized by A.I.D. in writing, the commodity is unused and has not been disposed of as surplus by any governmental agency;

(2) The source of the commodity complies with the provisions of § 201.11(b), relating to source as required by his contract or letter of credit, and with the provisions of § 201.11 (h), relating to commodities shipped out of free port or bonded warehouse, if the supplier arranged transportation to the free port or bonded warehouse;

(3) The provisions of § 201.11(d) relating to the medium of transportation