3.104-1 Definitions
Source: FAR 3.104-1 on acquisition.gov
FAR 3.104-1 defines essential terms that underpin procurement integrity compliance, making it critical for all contracting professionals to understand and apply these definitions accurately.
Overview
FAR 3.104-1 provides definitions for key terms used in the procurement integrity regulations, which are critical for understanding and complying with rules that govern the conduct of federal agency procurements. This section clarifies terminology related to ethics officials, compensation, contractor bid or proposal information, and the scope of participation in procurements, among others. These definitions form the foundation for interpreting and applying the requirements of FAR Subpart 3.104, which addresses the prevention of improper disclosure of procurement-sensitive information and conflicts of interest.
Key Rules
- Agency Ethics Official
- Defines who is considered an agency ethics official, including deputies and alternates, and their delegated authorities.
- Compensation
- Broadly defines compensation to include direct and indirect payments for services rendered.
- Contractor Bid or Proposal Information
- Specifies what constitutes protected bid or proposal information, including cost data, proprietary information, and marked documents.
- In Excess of $10,000,000
- Outlines how to determine if a contract or related action meets the $10 million threshold, impacting certain compliance requirements.
- Participating Personally and Substantially
- Details what constitutes significant involvement in a procurement, which is crucial for identifying potential conflicts of interest.
Responsibilities
- Contracting Officers: Must apply these definitions when determining compliance with procurement integrity rules and when making decisions about conflicts of interest or information disclosure.
- Contractors: Should understand these definitions to ensure proper handling of sensitive information and to avoid prohibited conduct.
- Agencies: Must ensure all personnel are aware of and adhere to these definitions in procurement activities.
Practical Implications
- This section exists to ensure all parties have a common understanding of key terms, reducing ambiguity and supporting compliance with procurement integrity rules.
- Misunderstanding these definitions can lead to inadvertent violations, such as improper disclosure of information or unintentional conflicts of interest.
- Contractors and agency personnel should regularly review these definitions to ensure ongoing compliance, especially when roles or contract values change.
As used in this section—
Agency ethics official means the designated agency ethics official described in 5 CFR 2638.201 or other designated person, including–
(1) Deputy ethics officials described in 5 CFR 2638.204, to whom authority under 3.104-6 has been delegated by the designated agency ethics official; and
(2) Alternate designated agency ethics officials described in 5 CFR 2638.202(b).
Compensation means wages, salaries, honoraria, commissions, professional fees, and any other form of compensation, provided directly or indirectly for services rendered. Compensation is indirectly provided if it is paid to an entity other than the individual, specifically in exchange for services provided by the individual.
Contractor bid or proposal information means any of the following information submitted to a Federal agency as part of or in connection with a bid or proposal to enter into a Federal agency procurement contract, if that information has not been previously made available to the public or disclosed publicly:
(1) Cost or pricing data (as defined by https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section3701&num=0&edition=prelim" target="_blank">10 U.S.C. 3701(1) with respect to procurements subject to that section, and 41 U.S.C. 3501(a)(1), with respect to procurements subject to that section.
(2) Indirect costs and direct labor rates.
(3) Proprietary information about manufacturing processes, operations, or techniques marked by the contractor in accordance with applicable law or regulation.
(4) Information marked by the contractor as "contractor bid or proposal information" in accordance with applicable law or regulation.
(5) Information marked in accordance with 52.215-1(e).
Decision to award a subcontract or modification of subcontract means a decision to designate award to a particular source.
Federal agency procurement means the acquisition (by using competitive procedures and awarding a contract) of goods or services (including construction) from non-Federal sources by a Federal agency using appropriated funds. For broad agency announcements and small business innovation research programs, each proposal received by an agency constitutes a separate procurement for purposes of 41 U.S.C. chapter 21.
In excess of $10,000,000 means–
(1) The value, or estimated value, at the time of award, of the contract, including all options;
(2) The total estimated value at the time of award of all orders under an indefinite-delivery, indefinite-quantity, or requirements contract;
(3) Any multiple award schedule contract, unless the contracting officer documents a lower estimate;
(4) The value of a delivery order, task order, or an order under a Basic Ordering Agreement;
(5) The amount paid or to be paid in settlement of a claim; or
(6) The estimated monetary value of negotiated overhead or other rates when applied to the Government portion of the applicable allocation base.
Official means–
(1) An officer, as defined in http://uscode.house.gov/browse.xhtml;jsessionid=114A3287C7B3359E597506A31FC855B3" target="_blank">5 U.S.C.2104;
(2) An employee, as defined in http://uscode.house.gov/browse.xhtml;jsessionid=114A3287C7B3359E597506A31FC855B3" target="_blank">5 U.S.C.2105;
(3) A member of the uniformed services, as defined in http://uscode.house.gov/browse.xhtml;jsessionid=114A3287C7B3359E597506A31FC855B3" target="_blank">5 U.S.C.2101(3); or
(4) A special Government employee, as defined in 18 U.S.C.202.
Participating personally and substantially in a Federal agency procurement means–
(1) Active and significant involvement of an official in any of the following activities directly related to that procurement:
(i) Drafting, reviewing, or approving the specification or statement of work for the procurement.:
(ii) Preparing or developing the solicitation.
(iii) Evaluating bids or proposals, or selecting a source.
(iv) Negotiating price or terms and conditions of the contract.
(v) Reviewing and approving the award of the contract.
(2) "Participating personally" means participating directly, and includes the direct and active supervision of a subordinate's participation in the matter.
(3) "Participating substantially" means that the official's involvement is of significance to the matter. Substantial participation requires more than official responsibility, knowledge, perfunctory involvement, or involvement on an administrative or peripheral issue. Participation may be substantial even though it is not determinative of the outcome of a particular matter. A finding of substantiality should be based not only on the effort devoted to a matter, but on the importance of the effort. While a series of peripheral involvements may be insubstantial, the single act of approving or participating in a critical step may be substantial. However, the review of procurement documents solely to determine compliance with regulatory, administrative, or budgetary procedures, does not constitute substantial participation in a procurement.
(4) Generally, an official will not be considered to have participated personally and substantially in a procurement solely by participating in the following activities:
(i) Agency-level boards, panels, or other advisory committees that review program milestones or evaluate and make recommendations regarding alternative technologies or approaches for satisfying broad agency-level missions or objectives.
(ii) The performance of general, technical, engineering, or scientific effort having broad application not directly associated with a particular procurement, notwithstanding that such general, technical, engineering, or scientific effort subsequently may be incorporated into a particular procurement.
(iii) Clerical functions supporting the conduct of a particular procurement.
(iv) For procurements to be conducted under the procedures of OMB Circular A-76, participation in management studies, preparation of in-house cost estimates, preparation of "most efficient organization" analyses, and furnishing of data or technical support to be used by others in the development of performance standards, statements of work, or specifications.
Source selection evaluation board means any board, team, council, or other group that evaluates bids or proposals.