IRS Solicits Proposals From Firms That Want To Be Private Tax Collectors.

The IRS has released a request for proposals (RFP) for private companies that want to provide support for IRS collection-related activities. The RFP was released by the IRS procurement office.

The RFP results from a congressional mandate that the agency spend $13 million to establish a pilot program using private law firms and debt collection agencies to help collect outstanding tax debts. The purpose of the pilot is to determine whether private companies have a role to play in the collection of tax debts.

According to the RFP, the IRS has allocated $11 million for three to five fixed-price contracts. The contracts will be awarded for 12-month periods, with the possibility of a 12-month renewal. Proposals must be received by April 5, 1996.

It is expected that the earliest contracts will actually be awarded is July, with additional time needed to do background checks, according to an IRS source.

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DEPARTMENT OF TREASURY

SOLICITATION IRS-96-0014

OFFICE OF THE ASSISTANT COMMISSIONER

OFFICE OF PROCUREMENT OPERATIONS

ISSUANCE DATE: MARCH 5, 1996

CLOSING DATE: APRIL 5, 1996

TO ALL PROSPECTIVE OFFERORS

REQUEST FOR PROPOSALS (RFP) IRS-96-0014

You are invited to submit a proposal to the Internal Revenue Service (IRS) to provide support for collection related activities for the Office of Chief Compliance. This cover letter is a summary of the salient elements of this solicitation. This letter is NOT an integral part of the solicitation. In the event of any inconsistencies between this letter and the solicitation, the solicitation data shall govern.

IRS POINT OF CONTACT:

Offerors are encouraged to submit questions and/or suggestions concerning the performance of the work. However, please be aware that the only person you may contact for information is the designated contract specialist for this action, the undersigned. All communications must be written, referencing the RFP number IRS-96- 0014, and sent by facsimile to (202) 283-1514, or mailed to my attention at 6009 Oxon Hill Road, Room 700, Oxon Hill, MD 20745.

In order to ensure a timely response, all correspondence (comments, concerns, suggestions and questions) should be received by the Contracting Officer at least FIFTEEN (15) CALENDAR days before the due date for receipt of proposals. After this date, the Government will make every effort, but cannot guarantee that all issues submitted will be addressed and answered with an amendment to the RFP before the RFP closing date.

PROPOSAL PREPARATION INSTRUCTIONS:

Instructions for your proposal preparation are located in Section L; all instructions in Section L must be carefully followed. The date, time and place for proposal submission is specified at Section L, L.11 (CAUTION: Late proposals, modifications and withdrawals will be treated in accordance with FAR 52.215-10).

CONTRACT AWARD AND PROPOSED PERIOD OF PERFORMANCE:

As a result of this solicitation, following technical evaluations and successful negotiations, three (3) to five (5) contracts will be awarded. The proposed performance period will be for twelve (12) months after contract award, with one (1) 12-month option. Sections A-K of this RFP represent the draft/model contract and form the basis for the proposed contractual relationship between IRS and the successful offerors.

Blank areas appearing throughout the solicitation will be completed after negotiations by the Government and reflected in the contract award. Specific areas that must be completed upon offer submission are: all applicable portions of the Standard Form 33 (SF 33), along with Sections B, G, H, and K of this solicitation.

EVALUATION AND SELECTION CRITERIA:

This acquisition will be processed in accordance with the applicable Federal Acquisition Regulations, Treasury Acquisition/ Procurement Regulations and the Internal Revenue Service Acquisition Procedures in effect at the time. Evaluation of the proposals (WRITTEN AND ORAL) will be in accordance with the criteria in Section M. It is anticipated that oral and/or written discussions will be held with offerors whose initial proposals are determined to be within the competitive range. At the conclusion of any discussions, the offerors will have the opportunity to submit revised proposals. Contract award will be made to those offers that are determined to be the most advantageous to the Government, all factors considered.

The solicitation does not commit the Government to pay any costs incurred in the preparation and submission of an offer, nor to contract for any services and/or supplies.

SET-ASIDE INFORMATION:

This is an unrestricted acquisition. The small business size standard and Standard Industrial Classification code information is in Section K, paragraph K.10.

Sincerely,

Helen D. Carmona

ENCLOSURE: IRS-96-0014

NOTICE TO VENDORS

In order to reduce future administrative, copying, and postal costs, vendors are requested to complete and return this form. All Vendors are requested to return this form within TEN (10) CALENDAR DAYS AFTER THE DATE OF RFP ISSUANCE.

FAILURE TO RESPOND to this notice WILL RESULT IN YOUR FIRM BEING REMOVED from this solicitations's bidder's mailing list and your firm will not receive any other information concerning this solicitation.

[ ] YES, retain my firm on the bidder's mailing list for IRS-96-

[ ] NO, I do not intend to submit a proposal, and would like to

You may MAIL your response to the following address:

Internal Revenue Service

Or, you may FAX your response to the following telephone number:

FAX: 202-283-1514

____________________________ __________________________

Company: _________________________________________________

Address: _________________________________________________

Section A

PART I -- THE SCHEDULE

SECTION A -- SOLICITATION/CONTRACT FORM

OFFERS ARE NOT SOLICITED FROM FIRMS DEBARRED, SUSPENDED, OR PROPOSED

TABLE OF CONTENTS

PART I - THE SCHEDULE

SECTION A - SOLICITATION/CONTRACT FORM

SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS

SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

SECTION D - PACKAGING AND MARKING

SECTION E - INSPECTION AND ACCEPTANCE

SECTION F - DELIVERIES OR PERFORMANCE

SECTION G - CONTRACT ADMINISTRATION DATA

SECTION H - SPECIAL CONTRACT REQUIREMENTS

PART II - CONTRACT CLAUSES

SECTION I - CONTRACT CLAUSES

PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS

SECTION J - LIST OF ATTACHMENTS

PART IV - REPRESENTATIONS AND INSTRUCTIONS

SECTION K - REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS OF

SECTION L - INSTRUCTIONS, CONDITIONS, AND NOTICES TO OFFERORS

SECTION M - EVALUATION FACTORS FOR AWARD

SECTION B -- SUPPLIES OR SERVICES AND PRICES/COSTS

B.1 SERVICES BEING ACQUIRED

The Contractor shall furnish all management, supervision personnel facilities, equipment, material, supplies and services (except as may be furnished by the Government) and otherwise do all things necessary for, or incidental to, the performance and provision of the work described herein.

The following rates, inclusive of all direct and indirect costs (salaries; fringe benefits; overhead; general and administrative expenses; report preparation costs) and profit, are applicable for the specified contract period of performance.

Should the Government exercise any option hereunder, all contractual terms and conditions shall apply during the option period and shall be performed at the prices set forth below.

B.2 PRICING

To allow for the award of 3 to 5 contracts, offerors are requested to price each of the following sections. The IRS will evaluate each to provide the overall most advantageous contractual arrangement necessary to meet the goals of this project. Funds in the amount of $11 million are available for the resulting contracts.

The different estimated quantities are based on the total of 125,000 cases to be furnished under this project. The IRS may provide additional cases to the Contractors during the course of the contract, however, the total number of contacts may not exceed the stated quantities. The quantities reflected below are derived from applying a 20% success rate to the quantity of cases provided under each section. As indicated in Section F, this success rate originates from internal experience and data. Offerors are encouraged to comment on the validity of this rate, based on their experience. Offerors MUST complete each contract line item in their pricing proposal.

* To calculate the proposed amount for the performance plan contract line item, offerors must utilize the table in Section F.4 Performance Plan Payments. The predicted success rates in that chart must be applied to the quantities under each section below. An example of the calculation for this line item is provided at Section J, J.2, Attachment C, of the solicitation.

B.2.1 If three (3) contracts are awarded as a result of this solicitation, 41,500 cases will be available under each contract and the following pricing structure will apply:

BASE PERIOD  --  TWELVE (12) MONTHS FROM THE DATE OF CONTRACT AWARD

LINE                                                  UNIT   EXTENDED

0002  Performance plan in

                                               TOTAL:        $______

OPTION PERIOD -- ADDITIONAL TWELVE MONTHS

1001  Successful taxpayer contact

1002  Performance Plan in

                                                TOTAL:       $______

B.2.2 If four (4) contracts are awarded as a result of this solicitation, 31,250 cases will be available under each contract and the following pricing structure will apply:

BASE PERIOD -- TWELVE (12) MONTHS FROM THE DATE OF CONTRACT AWARD

LINE                                                  UNIT   EXTENDED

0002  Performance Plan in

                                              TOTAL:         $______

OPTION PERIOD -- ADDITIONAL TWELVE MONTHS

1001  Successful taxpayer contact

1002  Performance Plan in

                                              TOTAL:         $_____

B.2.3 If five (5) contracts are awarded as a result of this

BASE PERIOD -- TWELVE (12) MONTHS FROM THE DATE OF CONTRACT AWARD

LINE                                                  UNIT   EXTENDED

0002  Performance Plan in

                                               TOTAL:         $_____

OPTION PERiOD  - ADDITIONAL TWELVE MONTHS

1001  Successful taxpayer contact

1002  Performance Plan in

                                                  TOTAL:      $_____

SECTION C -- DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

C.1. GENERAL INFORMATION

C.1.1. INTRODUCTION

The Internal Revenue Service (IRS) collects liabilities emanating from the nonpayment of federal taxes. Liabilities include penalties and interest imposed by law. The IRS has been directed under its Fiscal Year 1996 budget appropriation, Public Law 104-52, 109 Stat. 68, ". . . to initiate a program to utilize private counsel law firms and debt collection agencies in the collection activities of the Internal Revenue Service . . . "

C.1.2. SCOPE

The IRS seeks contractor assistance in locating and contacting taxpayers, reminding them of their outstanding tax liabilities, and informing them of available alternatives to resolve their liabilities. IRS intends to award 3 to 5 contracts to work inventories of 25,000-40,000 cases each over the course of a year. The IRS will have already performed some work on all cases provided to the contractor. Inventories will include both individual and business cases. Business cases will be limited to Form 941, Trust Fund tax situations where employers have failed to deposit social security and income tax withheld from employee paychecks, Form 940 Annual Federal Unemployment tax (FUTA) returns, and to Form 1120 Corporate tax liabilities. About 40% of the inventories will be cases where the IRS has been unable to locate or to contact taxpayers, and about 60% will be cases where the IRS has contacted taxpayers, but has been unsuccessful in securing payment through mail notices and phone calls. As described in more detail following, the contractor shall locate taxpayers if necessary, remind them of their tax liabilities, secure promises-to-pay IRS, or commitments to enter into IRS installment agreements, monitor payments against promises and commitments, and follow-up with taxpayers on broken promises and commitments. All taxpayer payments emanating from the contractor efforts will be made directly to the IRS.

The tax cases provided to the contractors will include those from taxpayers currently or formerly located in the states of Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming. For cases where taxpayers have moved, contractors shall attempt to locate and contact taxpayers at their new locations, wherever that might be. IRS makes no guarantee that all states above will be represented in any one lot as accounts will be randomly selected. Contractor should be prepared to work cases in any and all states.

Contractors shall work with Internal Revenue Service Centers in Ogden, Utah and Fresno, California, and other designated IRS sites.

C.1.3. CASE FILES

The work provided to the contractor under this contract will consist of cases that IRS has worked at its service centers, Automated Collection System (ACS) telephone centers, and Collection Field function (CFf) in IRS district offices. Inventories will include both individual and business cases. Each individual case will include the sum of all outstanding tax liabilities, including penalties and interest. Where the individual cases reflect joint returns, both spouses or former spouses are equally liable for the total amount. Each business case file will include the sum of all outstanding tax liabilities, including penalties and interest.

The contractor shall work three categories of cases under this contract:

o Cases currently suspended and awaiting assignment to the IRS'

o Cases designated by IRS as currently not collectible-unable to

o Cases designated by IRS as currently not collectible-unable to

Since each category can be individual or business, a total of six types of cases will be handled under this contract.

Each case will have a valid Taxpayer Identification Number (TIN), either a Social Security Number (SSN) [/] for individual cases or an Employee Identification Number (EIN) for businesses, the current assessed balance due (including tax, penalties and interest), and accruals of penalties and interest to the date indicated in the case record, the tax periods outstanding, the last known address, the Collection Statute Expiration Date (CSED), i.e., the date that the liability is no longer legally collectible, and a case type (e.g., individual CNC-UTL, business suspended, etc., as defined above). The payoff amounts will be based on the date last extracted from IRS's Master File and as indicated in the case record.

IRS will provide inventory to the contractor in batches. The first batch will consist of approximately 20% of anticipated total volume and will be provided within 45 days of contract award. Thereafter, IRS will provide batches to the contractor periodically, based on a schedule proposed by the contractor and approved by the IRS. After the first shipment of cases, additional cases will be provided if, and only if, IRS evaluation of contractor performance is satisfactory.

Each batch of cases will include a mixture of work. IRS intends that cases provided will be approximately 60% suspended and about 40% CNC. The cases will be further split between individuals and businesses at about the same ratio as exists in the IRS' suspended and CNC inventories as of the date the batch data is extracted. The current IRS suspended mix is 71% individuals and 29% businesses. The current IRS CNC mix is 60% individuals and 40% businesses. Of the total, CNCs unable to locate is 65% and unable to contact is 35%. Of the unable to locate CNC's individuals are 52% and businesses are 48%. Of the unable to contact CNC's individuals are 74% and businesses are 26%. The suspended and CNC proportions are approximate and given for general understanding of potential inventory only. The IRS does not warrant that any batch or the total inventory will meet these apportioning criteria; however, it is anticipated that inventory distribution will be similar.

C.1.4 CONFORMANCE WITH LAWS GOVERNING IRS COLLECTION ACTIVITY

As an agent of the IRS, the contractor shall comply with all applicable Federal laws relating to collection of liabilities, including, but not limited to, the Fair Debt Collection Practices Act, the Taxpayer Bill of Rights, the Privacy Act and additional civil and criminal statutes. The contractor is subject to the same legal requirements and limitations that apply to the IRS with regard to the collection of federal tax liabilities. The contractor is obligated to comply with any additional federal, state and local laws and regulations which govern debt collection activities and/or operations of their facilities and which are not contrary to or superseded by the laws governing the collection of federal taxes. The principal statutes and regulations governing the IRS' collection activities are:

o Internal Revenue Code of 1986

o The Privacy Act of 1974, 5 U.S.C. 552a.

o Internal Revenue Code Sections 6103, 7213, and 7431

o 18 U.S.C. Section 641 (criminal penalties for conversion of

o Fair Debt Collection Practices Act, 15 U.S.C. 1962

o Taxpayer Bill of Rights, Subtitle J of Title VI of Technical

o Any law enacted or regulation published after issuance of this

The contractor will also be subjected to and abide by the rules and policy statements of the Internal Revenue Service which implement these laws.

C.2 WORK REQUIREMENTS

C.2.1 PREPARATION PEASE

Following contract award, the contractor shall have 45 days to commence work. During this period, the contractor shall accomplish the following tasks:

(a) Operational Plan.

The contractor shall develop operational plans, including detailed procedures and schedules for how IRS cases shall be worked, including scripts, schedules, and time lines. As part of the plan, the contractor shall detail how cases in each batch of work and each type of case shall be handled, what methodologies and approaches shall be used to locate and contact taxpayers, and what approaches shall be used in communicating with taxpayers, including "scripts" for handling different kinds of discussions with taxpayers. The plan shall also detail the schedule for working cases, including when the contractor shall return cases to the IRS. Also, the contractor shall delineate plans for monitoring promises-to-pay in full or commitments to pay via installment agreement and following-up on broken promises or commitments. Last, the contractor shall delineate all instances and work processes where the contractor intends to disclose any case data (e.g., name, address, social security number, the fact that the taxpayer is a tax delinquent, etc.) to a third party in the course of working this contract. All such disclosures of information require specific written approval by the IRS. The IRS will must approve the contractor's operational plans before case work begins.

(b) Training Plan and Materials.

IRS will supply the contractor with "camera ready" copy of IRS required training materials. The contractor shall replicate IRS- provided materials at its own expense. Training material provided will include coverage of basic tax law, the IRS collection process, IRS administrative procedures, disclosure and privacy, the Taxpayer Bill of Rights, standards of ethical conduct, other applicable laws and regulations, and IRS policies. The contractor shall develop additional training material as necessary and include this data in its training plan. All training materials and plans must be approved by the IRS before training begins. The contractor shall conduct the training. IRS may choose to monitor initial and subsequent training sessions. Contractor employees shall be trained prior to working cases award.

The contractor shall hold regular employee meetings and conduct additional training as necessary to inform its employees of changes in operational procedures, laws, or regulations.

(c) Work Sites.

The contractor shall establish a single work site for this contract. Work sites may be co-located with other company facilities, but shall be physically secure and distinct from other company facilities, as outlined in Section H., to avoid inadvertent disclosure of tax information. The contractor shall allow only employees working on the contract, IRS employees, company management, and other officials as designated by the IRS (i.e., OMB, GAO, etc.) in the contract work site. Contractors shall develop a physical security plan, as outlined in Section H., and have it approved by IRS before commencing work on IRS cases. The work space shall include appropriate space for up to one full time IRS on-site representative and two other working spaces reserved for IRS Inspection, Internal Audit, or other IRS designated officials. Space should be comparable to contractor management work space and/or offices. See section C.2.2(c) following.

(d) Background Investigations

The IRS will conduct background investigations on all employees working on the contract who have access to case information or physical access to the work site, including company management, corporate officers, partners, and principals. Complete details of the background investigations are in section H. following. The contractor shall pay the IRS for the investigations at the rate of $300 per investigation. Contractor employees may not begin work until 20-days following submission of fingerprint cards to the IRS. After that, employees may begin work with a provisional background clearance. The contractor and its employees shall respond to all inquiries from IRS Inspection on background and other matters of official interest. The IRS may withdraw an employee's background clearance at anytime based on new information. Employees without a background clearance may not work on this contract.

(e) Tax Checks

All employees, managers, partners, principals, and corporate officers working on or managing this contract will be subject to a federal tax check. The IRS will ascertain whether said individuals have filed all appropriate returns and paid all appropriate taxes and tax liabilities for the last three years. The contractor shall provide the IRS with disclosure consent forms, in a format specified by IRS and signed by all affected individuals, authorizing the disclosure to the Contractor of whether the tax check was positive or negative. No other tax information will be disclosed to the contractor. IRS will perform the tax checks within 15 days and inform the contractor of positive and negative results. Individuals with a negative tax check will, following their request to the IRS COTR/OSRs, be given a chance to be informed of, and respond to, any detrimental information uncovered by a negative tax check. If issues uncovered by negative tax checks can be resolved to the satisfaction of the IRS, the IRS may choose to certify a positive tax check for the individual. Only individuals with a positive tax check may handle or have access to IRS case information or to the work site under this contract. If the IRS fails to complete the tax checks within 15 calendar days, the contractor may request and the IRS on-site representative may grant a temporary waiver to allow affected employees to begin work pending conclusion of the tax checks. If a negative tax check is eventually received, the temporary waiver will be immediately rescinded. The contractor itself is subject to an IRS tax check prior to a contract award.

The contractor shall develop and submit for review, testing and approval by the COTR, action plans to address the following areas:

(f) Data Exchange Plan

The contractor shall develop a data exchange plan for transferring case information and data from the IRS to the contractor and from the contractor to IRS. IRS will work with the contractor in refining the plan, and developing and testing data exchange procedures. Actual case work will begin only when the data exchange plan has been fully tested and approved by the IRS. Data and information transfer shall be via magnetic tape or on-line transfer as specified in the contractor's approved data exchange plan. Section C.2.3(k) sets forth operational details relative to the data exchange requirements.

(g) Data Security Plan

The contractor shall develop and secure IRS approval for a data security plan detailing arrangements to limit access to electronic, paper, and other forms of case data to individuals authorized to handle such data. If the contractor plans to have IRS case data resident on company computers, storage devices, networks, etc., where other company data is also found, the contractor shall specify how security will prevent inadvertent disclosure, browsing, theft, or other misuse of IRS case information. IRS will approve the data security plan before the contractor begins work. Additional information on data security is in section H. following.

(h) Quality Control Plan.

The contractor shall develop a plan to monitor work in process and maintain quality and have it approved by IRS prior to working IRS cases. The quality control plan shall include the details of reviewing individual employees for conformance with proper procedures, courtesy, respectful treatment of taxpayers, and conformance with the parameters of taxpayer communication detailed in section C.2.3(c) following. As part of the quality control plan the contractor shall provide IRS on-site representatives access and equipment to monitor "live" telephone contacts at anytime.

(i) Systems Acceptance Testing (SAT) Plan.

The contractor shall develop a Systems Acceptance Testing (SAT) plan to test any software used to transfer case file data between the IRS service centers and the contractors' facility. In addition the results of previously conducted SAT testing done for contractors software used to store and manipulate case information should be provided. The contractor shall report to the COTR detailing the SAT tests that the contractor performed, the results of those tests, and how they resolved any discrepancies uncovered by said tests. If the software to be used is already in operation for other purposes, the contractor shall provide the COTR documentation and/or demonstrations to prove the efficacy of the software. The contractor may not begin operation until the IRS approves the SAT report. IRS staff may choose to participate in SAT activities.

The aforementioned plans shall be developed in accordance with the guidance and strictures set forth in Section H, clauses' H.2 through H.7.9. Actual account work will not begin until each plan has been fully tested, reviewed and approved by the COTR.

(j) Reporting Plan.

The contractor shall develop and secure IRS approval for its plan to report work progress. The minimum reports that the contractor shall provide are described in section C.2.3(l)(2) following.

(k) Non-Disclosure Agreement.

All employees, principals, corporate officers, partners and employees with access to IRS case data or the contract site shall sign a non-disclosure agreement (see Section J, J.1, Attachment 3, IRS Non-Disclosure Agreement) prior to working IRS cases or to accessing the work site once case work has commenced. The agreement affirms that the individual understands applicable federal law with regard to privacy and disclosures, and the possible civil liability and criminal sanctions related to unauthorized disclosures. Throughout this document, various terms such as case file information or tax information are used interchangeably and are all considered to be return information and are protected from disclosure (see Section H).

(l) Completion of Preparation.

The contractor shall complete all the above implementation tasks within 45 days of contract award, and prior to the IRS providing cases to the contractor.

(m) IRS Approval

Throughout this Statement of Work, IRS approval means approval of the Contracting Officer's Technical Representative (COTR). The COTR will involve other elements of the IRS in the review and approval process as necessary.

C.2.2 PROJECT MANAGEMENT AND CONTROL

(a) Contracting Officer Technical Representative (COTR)

The COTR will be responsible for all technical aspects of the contract, including reviewing and approving all plans, schedules, certifications, and other work elements required under this contract. The COTR will involve functional areas of IRS as necessary in the review and approval process.

(b) IRS Contact Referral Units

Issues will arise under this contract which preclude further contractor work on specific cases. (See section C.2.3(c)(7) following.) The contractor shall refer such cases to the IRS. IRS will establish priority queues in IRS telephone centers to handle on- line referrals from contractors. These Contact Referral Units will have the necessary information and expertise to handle the issues requiring referral back to the IRS. Whenever these issues arise while the taxpayer is conversing with the contractor by phone, the contractor shall do an on-line telephone transfer to the IRS Contract Referral Unit, introduce the taxpayer and briefly explain the situation to the IRS assistor. Whenever the contractor transfers taxpayers to the IRS, IRS will again assume responsibility for those taxpayers and their cases. Following on-line transfer, contractors shall document these cases and return them to the IRS. The specific situations requiring on-line transfer to IRS Contact Referral Units are documented in section C.2.3(c)(7) following.

(c) IRS On-Site Representatives (OSRs)

The IRS will provide on-site representation at each contractor work site for all hours of contact operations, with the number dependent upon the size of the contractor site and the volume of work the site will handle. These OSRs will coordinate delivery of inventory and case updates and assist the COTR to monitor contractor performance of the contract. One OSR at each contractor facility will also be designated as the COTR for that contractor. The OSRs will:

o monitor contractor conformance with security, privacy, and

o monitor contractor contacts with taxpayers, using phone

o assist the COTR in monitoring and evaluating contractor

The contractor shall, at its own cost, provide appropriate space and facilities for COTR/OSRs, including access to phone monitoring equipment. The space and facilities for the COTR/OSR should be comparable to the contractor site managers' space and facilities.

C.2.3 OPERATIONAL PHASE

(a) Overview

The contractor, operating under plans approved by the IRS and constraints specified in this statement of work, shall:

o locate taxpayers. The contractor shall provide new addresses,

o attempt to contact all taxpayers both individual and business

o remind taxpayers of their tax liabilities, and attempt to

o secure employer and bank account information from taxpayers

o monitor promises-to-pay and the first payment under

o identify cases with issues which preclude them from being

o return cases which have been full-paid or for which taxpayers

o compute the monthly amount and number of monthly payments for

o notify IRS COTR/OSRs immediately of any complaints, verbal or

o respond to any taxpayer correspondence received within 10

o provide access to taxpayer correspondence received by

o document all activity on cases, including attempts to locate,

o promptly post new cases and daily and weekly update

In performing all tasks under this statement of work, the contractor shall:

o operate under the limitations of federal, state, and local

o ensure that all contacts with taxpayers are fair and

o instruct taxpayers to direct all payments to the IRS.

o provide data and information obtained under this case only to

o Refrain from compiling data of any sort to be used for

(b) Locating Taxpayers

The contractor shall attempt to locate taxpayers without valid addresses and phone numbers, using only methodologies and schedules delineated in the contractor's operational plan.

(c) Contacting Taxpayers

The contractor shall contact taxpayers using only the methodologies and schedules delineated in the contractor's Operational Plan. The contractor may use phone, mail, and other methods of contact, but is strictly forbidden from initiating in person contacts. Once contact is achieved, the contractor shall operate under the following parameters. The specifics in this section are directed at phone contacts, but the general principles will apply to mail and other forms of communication. For purposes of fixed fee payments, a successful contact on a case (limited to one per case) is defined as the contractor speaking by telephone to the actual taxpayer or either spouse in the case of a joint return (in individual cases) or the responsible company official (in business tax cases) and resulting in a promise to full pay, installment agreement, or on-line referral to the IRS.

(1) Identification. The contractor shall confirm that he is speaking with the taxpayer. For joint individual cases, either of the names on the case is the taxpayer. For business cases, the taxpayer is the proprietor, partner, principal, a corporate officer, or the individual designated to handle corporate tax matters. Contractor personnel shall identify themselves, provide the taxpayer with their names and the name of their company, and indicate that they are working under contract with the IRS to contact taxpayers with unpaid tax liabilities and assist such taxpayers in resolving their tax situations.

(2) Complaint Addresses. Upon initial contact, or when requested by the taxpayer, contractor employees should provide taxpayers with the titles and addresses of the appropriate IRS officials where complaints can be filed. Generally, complaints will be directed to the COTR/OSRs.

(3) Liability Information. The contractor shall inform the taxpayer of the amount of the outstanding liability.

(4) Current Address and Phone Numbers. The contractor shall confirm the taxpayer's correct address and phone number.

(5) Promise-to-Pay in Full.

a. Individual Taxpayers Within 6 Months. The contractor shall seek to obtain a promise-to-pay IRS in full immediately (within 15- days), or within 30, 60, 90, 120, or 180 days. The contractor shall remind the individual taxpayer of the interest and penalties accruing, and that future interest and penalties can be avoided with prompt payment. If the taxpayer makes a promise-to-pay in full, the contractor shall provide the IRS current balance due and advise the taxpayer that the IRS will compute a payoff amount based on the taxpayer's promised payment date and advise them of this in writing within 15 days of the taxpayer's agreement to pay. The contractor will direct the taxpayer to mail the payment to the IRS at the appropriate address. The contractor shall request employer and bank account information (names and addresses) from the taxpayer, and document the case. Last, the contractor shall explain to the taxpayer that both the contractor and the IRS will be monitoring the promised payment, and failure to make the payment may result in a follow-up contact by the contractor or the IRS, or both, and possibly other IRS enforcement actions such as levies on bank accounts, the seizure of real property, etc.

b. Business Taxpayers Within 6 Months. Businesses currently in operation ("in business") with liabilities under criteria to be disclosed upon contract award may request up to six months to pay in full.

The contractor shall remind the business taxpayer of the interest and

(6) Installment Agreements. If the contractor cannot obtain a promise-to-pay the IRS in full, the contractor shall explain the IRS installment agreement program and find out how much the taxpayer can pay each month. Installment agreements are available to individual taxpayers, and to out-of-business taxpayers, excepting corporations. If the monthly payment proposed by the taxpayer will pay the liability within IRS prescribed guidelines, and if the proposed monthly payments will total the current liability prior to the Collection Statute Expiration Date (CSED), the date when the IRS' legal right to pursue the liability expires, the contractor shall inform the taxpayer that he or she may qualify for an IRS installment agreement. If the monthly amount proposed by the taxpayer is too low to meet the criteria, the contractor shall propose the minimum monthly amount meeting the preceding criteria to the taxpayer. If the taxpayer cannot afford that amount, but is still willing to enter into an installment agreement, the contractor shall immediately transfer the taxpayer to the IRS Contact Referral Unit if the taxpayer is on-line, document the case and return it to the IRS.

a. Liabilities less than $10,000. If the proposed installment agreement is for current liabilities, including penalties and interest, which could be paid within IRS prescribed guidelines, the contractor shall ask the taxpayer for place of employment information and bank account information. The contractor shall inform the taxpayer that the installment agreement is effective only with IRS approval, that there is a fee of $43 to establish the agreement, with the fee to be added to the taxpayer's first installment payment, and that IRS will inform the taxpayer in writing of the acceptance or rejection of the proposed agreement. The contractor shall document the information in the case file. Individual and out of business taxpayers (excepting corporations) are eligible for such long term installment agreements.

b. Liabilities above $10,000 and/or meeting IRS prescribed guidelines. The contractor shall inform the taxpayer that only the IRS can deal with proposed installment agreement of that magnitude. If the taxpayer is on-line, the contractor shall ask the taxpayer if he or she would like to speak immediately to an IRS employee, and if so, make an on-line transfer. If the taxpayer refuses transfer, the contractor shall document the case and return it to the IRS. Again, individuals and out of business taxpayers (excepting corporations) are eligible for such agreements and shall be transferred to the IRS Contact Referral Unit if willing to speak with IRS representatives.

c. Future Conformance with Tax Responsibilities. The contractor shall inform all taxpayers making installment agreement commitments that the continuation of the agreement is contingent upon taxpayer conformance with future tax responsibilities, including timely filing of future returns and timely payment of future tax liabilities. Failure to do so may result in IRS termination of the installment agreement, and immediate enforcement action to collect all tax liabilities. The contractor shall document all cases making installment agreements commitments, including employment and bank account information obtained, and monitor conformance with the agreement through the first payment of the installment agreement.

(7) Taxpayer Refuses to Pay or Cooperate. If the taxpayer refuses to pay or cooperate with the contractor, the contractor shall inform the taxpayer that the contractor will return the taxpayer's case to the IRS, and that the IRS may choose to take immediate or future enforcement actions, including levying on the taxpayer's bank accounts, seizing the taxpayer's real property, etc. The contractor shall then offer the taxpayer another opportunity to make payment arrangements. If the taxpayer is on-line talking to the contractor and still refuses to pay or cooperate, the contractor shall then offer to immediately transfer the taxpayer to the IRS' Contact Referral Unit. The contractor shall document the case as refusal to pay or refusal to cooperate, and return it to the IRS.

(8) Issues Requiring Immediate Transfer/Return to the IRS. Issues may arise which the contractor is not able or permitted to handle. If the following issues arise, the contractor shall immediately transfer the call to the IRS Contact Referral Unit if the taxpayer is on-line and the transfer is appropriate, document the case, and return it to the IRS.

a. Power of Attorney (POA). If the taxpayer states that he or she has given a POA to another individual to handle all tax matters, the contractor shall ask the taxpayer if they would like to be referred to IRS on-line. If not ask for the name, address and phone number of the POA and request that the taxpayer ask the POA to contact the IRS. The contractor shall document the case and return it to the IRS.

b. Adjustment or Payment Tracer Required. If the taxpayer states that the amount of the tax owed should be adjusted or that he or she has paid the amount, the contractor shall immediately transfer the call to the IRS Contact Referral Unit if the taxpayer is on-line, document the case, and return it to the IRS.

c. Bankruptcy. If the taxpayer states that he or she has filed bankruptcy, the contractor shall immediately transfer the call to the IRS Contract Referral Unit if the taxpayer is on-line, document the case, and return it to the IRS.

d. Offer in Compromise (OIC). If the taxpayer proposes to make an OIC, the contractor shall immediately transfer the call to the IRS Contract Referral Unit if the taxpayer is on-line, and document the case, and return it to IRS.

e. Taxpayer Incarcerated. If the contractor obtains information that the taxpayer is incarcerated, the contractor shall attempt to obtain the name and address and phone number of the facility where the taxpayer is a resident, and confirm that the taxpayer is indeed incarcerated. The contractor shall document the case and return it to the IRS.

f. Taxpayer Deceased. If the contractor obtains information that the taxpayer is deceased, the contractor shall attempt to verify the information, document the case, and return it to the IRS. Surviving spouses are responsible for liabilities under a joint individual return, and the contractor shall still attempt to secure promises-to- pay and installment agreements in those situations. If the contractor is talking on the phone with a survivor other than a surviving spouse, the contractor shall immediately transfer the call to the IRS Contact Referral Unit.

g. Legal Defense. If the taxpayer raises a legal defense (e.g., fraud, forgery, innocent spouse, etc.), the contractor shall immediately transfer the call to the IRS Contact Referral Unit if the taxpayer is on line, document the case, and return it to the IRS.

h. Refund Offset. If the taxpayer alleges that his or her anticipated current year tax refund will pay the amount owed in full (via refund offset) and that the return has been filed, the contractor shall immediately transfer the call to the IRS Contact Referral Unit if the taxpayer is on-line, document the case, and return it to the IRS.

i. IRS Employee. If a taxpayer states that he or she is an IRS employee, the contractor shall immediately transfer the call to the IRS Contact Referral Unit if the taxpayer is on-line, document the case, and return it to the IRS. (This situation is highly unlikely; however, it is a possibility.)

j. Taxpayer Incapacitated. If the taxpayer is incapacitated (e.g., mentally incompetent, seriously ill, unable to speak, not an adult, or in other ways incapacitated), the contractor shall document the case and return it to the IRS.

k. Taxpayer Unable to Pay. If the taxpayer indicates they are unable to commit to any promise-to-pay or installment agreement because they are indigent, lacking assets, income, or the promise of future income beyond that required for reasonable expenses, the contractor shall immediately transfer the call to the IRS Contact Referral Unit if the taxpayer is on-line, document the case, and return it to the IRS.

l. Taxpayer Asks to Speak with IRS. If the taxpayer refuses to deal with the contractor and insists on speaking to the IRS, the contractor shall immediately transfer the call to the IRS Contact Referral Unit if the contractor is on-line, document the case, and return it to the IRS.

(9) Avoiding Future Delinquencies

At the appropriate time, during or at the conclusion of all phone contacts with taxpayers, the contractor shall remind individual taxpayers of the need to have sufficient withholding or estimated tax payments to avoid future delinquencies. The contractor shall remind business taxpayers of the importance of timely depositing trust fund taxes with the IRS, and of the fact that a leading cause of business failure is pyramiding liabilities resulting from the failure to timely deposit said trust fund taxes. The contractor shall tell individual taxpayers who need help in calculating withholding or estimated payments to contact the IRS taxpayer service number, 1-800- 829-1040. The contractor shall inform business taxpayers requesting help or information that IRS representatives can work with them to help them avoid future delinquencies, and that they should contact the IRS' taxpayer service number, 1-800-829-1040.

(d) Monitoring Promises-to-Pay and Installment Agreements

The contractor shall inform all taxpayers making promises-to-pay and commitments to enter into IRS installment agreements that the contractor shall monitor payments and follow-up with the taxpayer concerning any broken promises or commitments. Using daily and/or weekly payment data provided, the contractor shall monitor such payments and make contact with taxpayers who fail to pay in full as promised or who fail to make their first installment agreement payment. Contractors shall monitor and follow up on all promises-to- pay in full, and on the first payment under an installment agreement. Reversals of payments because of dishonored checks may take 2-3 weeks to post to the contractor's case files via IRS updates. Contractors shall monitor for and follow-up on dishonored checks. Once the taxpayer has paid in full or has made the first payment of an installment agreement, the contractor shall document the case and return it to the IRS. If a taxpayer contacted on a follow-up call insists that he or she has complied with the promise or commitment and has paid in full or has paid the first payment of his or her installment agreement, the contractor shall immediately transfer the call to the IRS Contact Referral Unit if the taxpayer is on-line, document the case, and return it to the IRS.

(e) Payoff Amounts and Installment Agreement Terms

The contractor shall provide the taxpayer with appropriate balances as last provided to them by the IRS. The contractor shall inform the taxpayer that the IRS will confirm agreements in writing within 15 days, and for commitments to full pay, the total amount due as of the date the taxpayer has committed to pay on.

(f) Payments

The contractor shall instruct taxpayers to make all payments to the IRS. The IRS will give the contractor addresses for different types of payments, and the contractor shall provide the appropriate addresses to the taxpayers. The contractor shall turn over taxpayer payments erroneously sent to the contractor to the IRS COTR/OSRs within one-hour of receipt. Cashing a taxpayer's check or depositing cash received from a taxpayer are strictly prohibited under the terms of this contract and may result in the IRS taking action to immediately terminate the contract and pursue any appropriate legal action. The contractor is specifically prohibited from directing taxpayers to forward payments to the contractor and from processing payments erroneously sent to contractor sites.

(g) Documenting Cases.

The contractor shall maintain discrete records for each case, including all case data provided by the IRS, all personal and financial information secured by the contractor in performing this contract, IRS updates of payments and other data, contractor efforts to locate and contact taxpayers, taxpayer agreements and commitments, contractor interchanges with the taxpayer, contractor follow-up efforts on broken promises and missed installment agreement payments, contractor return of the case to the IRS, including the reason for the return and the date of the return, and other appropriate information. The contractor shall maintain discrete fields of key data elements, e.g., case has been full-paid, case was referred as a CNC-UTL, etc., allowing easy sorting and analysis of the records for contractor performance. The contractor shall provide hard copy or read-only computer access to these case records to the IRS COTR/OSRs, allowing them to monitor contractor conformance with, and performance under, this contract.

(h) Returning Cases to IRS

The contractor shall return cases to the IRS within 1-week of the event requiring their return, as detailed in this statement of work. The returned case will include a complete record of all contractor activity and payments received by the IRS, the specific reason for the return, data related to the return, as well as contractor notes of compliants, unusual situations, etc., and a field denoting the case is being returned. The returned case will be in electronic format as specified under the contractor's approved Data Exchange Plan. The IRS COTR/OSRs may request hard copies of, or electronic read-only access to, the weekly inventory of returned cases to monitor performance under, and conformance with, this contract. The contractor shall maintain returned case data as part of its data base for the purposes of analyzing overall performance and production, responding to specific complaints, etc. The contractor shall clearly mark such cases as returned in the contractor's data base. The contractor shall install and demonstrate to the IRS COTR/OSRs data and procedural safeguards to prevent further taxpayer contact and contractor activity on returned cases as articulated in the contractor's approved operational, data security, and SAT plans.

(i) IRS Recall of Cases

Circumstances may require the IRS to recall cases in the contractor's inventory. For example, if a case in the contractor's inventory goes into bankruptcy status, that case will be recalled from the contractor. The IRS will weekly give the contractor an electronic list of recalled cases. The contractor shall complete all necessary documentation of recalled cases, including annotating the cases as "recalled," and return the case data to the IRS along with the weekly run of returned cases. Such cases will clearly be marked as recalled in the contractor's data base, and the contractor shall install and demonstrate to the IRS COTR/OSRs data and procedural safeguards to prevent further taxpayer contact and contractor activity on recalled cases.

(j) Handling Complaints

(1) Addresses of IRS Officials. The contractor shall provide taxpayers wishing to complain about the contractor the titles and addresses of the appropriate IRS officials. Generally, complaints will be directed to the on-site IRS representatives and the COTR. The IRS will give the contractor the addresses of officials handling complaints.

(2) Complaints Received by Contractor. The contractor shall provide the on-site IRS representatives with copies of mail, FAX, verbal and other complaints received by the contractor along with hard copies of the affected cases within 24 hours of the complaint receipt.

(3) Complaints Received by the IRS. The IRS will give the contractor complaints received by the IRS concerning the contractor on which the IRS expects contractor action within 24 hours of receipt. The contractor shall provide a hard copy of the affected cases to the IRS within 24 hours of receiving the complaint.

(4) Contractor Complaint Processing. There are three types of complaints based on severity of taxpayer allegations. The contractor will keep a log of all complaints, type one and above, including non- substantive and minor complaints, detailing any contractor investigation and actions. The complaint logs will always be accessible by the IRS COTR/OSRs.

a. Type one -- taxpayers complain that the employee/manager is incompetent, rude behavior, has poor attitude, etc. The contractor will record the complaint in a complaint log which will be available for review by the IRS COTR/OSR. The contractor shall determine proper discipline for the first and repeat offences by any employee; however, the IRS COTR/OSR reserves the right to discuss and suggest corrective actions for employees with repeat complaints of a type one variety. This will usually occur after monitoring has verified that contractor employee exhibiting incompetence, rudeness, or poor attitude.

b. Type two -- the taxpayer complains of harassment, intimidation, heavy-handed behavior or the IRS on-site representatives observe such behavior. As soon as the contractor becomes aware of a type two complaint, the contractor shall immediately suspend activity on the case. The contractor shall investigate the complaint, and provide a complete report to the IRS COTR/OSRs within 10 workdays of receiving the complaint. The report shall include actions taken to deal with the situation, and actions taken to prevent future occurrences of like situations. If case activity has been suspended, the contractor shall resume activity on cases only at the written direction of the IRS COTR/OSRs. The contractor determines proper discipline for first and repeat offenses; however, the IRS reserves the right to withhold inventory after the third offense involving one or more employees. Inventory delivery can resume if the IRS determines the contractor has taken corrective action(s) to prevent further complaints.

c. Type three -- taxpayer complaint appears to be violation of the Taxpayer Bill of Rights (TBOR), Fair Debt Collection Practices Act (FDCPA), Privacy Act, Disclosure statutes, etc. The contractor suspends case activity upon knowledge of the complaint and notifies the IRS COTR/OSR immediately who in turn will notify the National Office Project staff. The IRS COTR/OSR will provide simultaneous notification to the IRS Inspection liaison for the specific geographical location. IRS Inspection will investigate all type three complaints and has sole jurisdiction over such investigations. Contractor employees will be required to cooperate with the IRS Inspection investigators. Corrective actions will depend on the severity and frequency and can include prosecution of the offender and termination of the contract. Case activity will be resumed by the IRS.

The contractor shall document complaints, investigation results, and resolutions in case files and flag all cases which have had complaints. For serious complaints, type two and three, verification and factual determinations will be made by the IRS based upon likelihood that the violation occurred. Taxpayers and contractor employees will be interviewed by IRS officials and/or management in order to make factual judgments. The judgment of the validity of a complaint is solely that of the IRS.

(6) Complaints from Government Officials. The contractor shall expedite handling of complaints from government officials, including Members of Congress and Senators, federal government, and state and local officials. The contractor shall make best efforts to complete its investigation and report to the IRS COTR/OSRs in 5 working days, rather than 10.

(7) Legal Complaints. The contractor shall provide the IRS COTR/OSRs with copies of all legal complaints or other legal measures or threats thereof served on the contractor and emanating from the contractor's performance of this contract.

(k) Data Exchange

(1) IRS to the Contractor. The contractor shall follow the IRS- approved data exchange plan in posting new inventory, daily/weekly updates, recall requests, and other data to the contractor's inventory of cases. The record or data base layout and medium of exchange will be as specified in the contractor's approved data exchange plan. Taxpayer's social security or employee identification numbers will be the reference for creating and updating cases.

a. New Cases. New case data will include the type of case (individual or business, suspended, CNC-UTC, or CNC-UTL), the taxpayer's social security or employee identification number, the current or last known taxpayer address, the current assessed balance due (including tax, penalties, and interest), the accruals of penalties and interest as of last IRS Master File extract, the tax periods or years outstanding, and the Collection Statute Expiration Date (CSED).

b. Updates. Updates will include the taxpayer's social security or employer's identification number, payment amounts and dates posted, new case balance (including tax, penalty, and interest) and the associated date, and any other pertinent data (e.g., the creation of an installment agreement).

(2) Contractor to the IRS. The contractor shall follow the IRS- approved data exchange plan in providing weekly data to update the IRS permanent files and weekly data files on returned and recalled cases. The record or data base layout and medium of exchange will be as specified in the contractor's approved data exchange plan.

a. Permanent File Information. The contractor shall provide updates to the IRS of data to be posted to the IRS' permanent account files, including verified addresses and phone numbers for taxpayers, names and addresses of the taxpayer banks, names and addresses of the taxpayer employer(s) and other potential levy sources, data required to create IRS installment agreements, including proposed payment amount and other necessary information when the case is returned to the IRS or recalled by the IRS. All data will be referenced to the taxpayer's social security or employer's identification number.

b. Returned and Recalled Cases. The contractor shall provide a weekly file of returned and recalled cases to the IRS. The file will include the case's social security or employer identification number, a field identifying returned or recalled, a field defining the reason for the case's return, and fields conveying all contractor case activity and outcomes. In addition, any new address, telephone number, employer information, bank account information, or other levy source data compiled by the contractor while working the case will be provided.

(l) Report Data Base and Reports

(1) Data Base. The contractor shall provide monthly an electronic data base of its entire case inventory to the IRS, showing all case activity since the inception of the contract, including activity on recalled and returned cases. All elements of the data base shall be separate fields, allowing the data base to be sorted, summed and analyzed. The fields will include, but are not limited to, the following for each case:

date case received from IRS

liability as of date received

type of case (e.g., individual suspended, individual CNC-UTL,

date of first activity

activities (skip-trace, mail contact, phone contact, etc.)

new address/phone number located indicator

resolutions (agreements to pay in less than 30 days and less than 180

installment agreement particulars (monthly payment amount, months to

return to IRS-cause, indicating case could not be worked further by

return to IRS-other, indicating case work was completed by contractor

recall by IRS

date of return/recall

dollars paid to IRS

full-paid field

number of installment agreement payments made

The fields above are a minimum. It is in the contractor's interest to supply the IRS with as much performance data as possible to analyze contractor success with particular types of cases.

(2) Weekly Reports. The contractor shall supply the IRS COTR/OSRs with weekly hard copy production reports, as specified in the contractor's approved reporting plan. Reports shall be divided into sections by six types of cases provided to the contractor (see section C.1.3.) and by total. Report data will include:

FOR WEEKLY INVENTORY REPORT

number of cases

total initial liability amount

number cases located (address or phone) and % of total cases

number contacted by mail and % of total

number contacted by phone and % of total with TIN list

number contacted by other means and % of total

number of promised full pays, less than 30 days and % of total with

number of promised full pays, less than 180 days and % of total with

number of contractor completed installment agreements and % of total

number of IRS assisted installment agreements and % of total with TIN

number of follow-up calls on promises-to-pay and % of total and % of

number of follow-up calls on installment agreements and % of total

number of unable to pay and % of total

number returned to IRS-unable to proceed (IRS employee, bankruptcy,

number recalled by IRS and % of total

dollars collected on promises-to-pay (by category) and the % of

liability for cases in that category and the % of total liability

dollars collected on installment agreements and % of liability for

average number of payments on installment agreement commitments

number of cases returned to IRS full paid, and % of total cases

number of cases returned to IRS 1 installment agreement payment, and

number of cases to IRS via on-line transfer, and % of total cases

number of cases with bank account information and % of total

number of cases with employer information and % of total

(3) Telephone System Management Reports. The contractor shall make available to the on-site IRS representatives, at their request, all telephone management reports available from automatic call distributors and other telephone system management devices.

(m) Working Cases on Schedule and on Time

The contractor shall work cases according to its approved operational plan. At a minimum, the contractor shall commence activity on a case within 2-months of receiving the case from the IRS. The contractor's case files shall show the date that the contractor commenced activity and the date the contractor concluded activity and returned the case. The contractor shall immediately bring any anticipated difficulty in meeting the schedule under the approved operational plan to the attention of the IRS COTR/OSRs.

C.2.4 MONITORING PHASE

The monitoring phase will start 60 calendar days prior to the expiration of the contact. During this phase, the contractor shall:

o work only cases on which promises-to-pay or installment

o return all unworked cases, on which there has been no

o continue to receive IRS payment and status information and

o prepare for the close down phase and termination of the

C.2.5 CLOSE DOWN PHASE

The close down phase will start 7-days prior to the expiration of the contract.

(a) Cease Case Work

The contractor shall cease all case work, including monitoring and follow-up, as of the start of the close down phase.

(b) Final Copies of Reports and Case Data Base

The contractor shall give the IRS a final electronic copy of the report data base, hard copies of the final weekly analytical reports, and a final electronic copy of the case files, with any supporting hard copy files, as well as a hard copy of the electronic cases files.

(c) Scrubbing Cases and Other Files

The contractor shall scrub all electronic, magnetic and paper files with case and taxpayer information. The contractor will provide the IRS COTR/OSRs advance notice of the scrubbing of electronic files and the destruction of other records, and invite them to observe the process. The contractor shall follow applicable federal law and standards in the destroying and disposing of its records, doing so in a way that shall prevent any unauthorized disclosures. The contractor shall also return to the IRS or destroy any and all IRS "Official Use Only" documents and other proprietary IRS documentation provided to the contractor under this contract. All of the above shall be done in accordance with the requirements outlined in Section H. The contractor may keep hard copy of case files where unresolved complaints allege contractor misconduct. The contractor is bound, however, under all applicable privacy and disclosure laws, and shall return those files to the IRS when the complaints are resolved.

(d) Final Report.

The contractor shall prepare a final report, in written and presentation format, and present said report in person to the COTR and other IRS officials in Washington, D.C., on the last working day of the contract. The report will present the contractor's perspective of the contract, including achievements, problems, and recommendations.

C.3 SUPPORTING INFORMATION

C.3.1 SECURITY OF TAX INFORMATION

(a) General

Maintaining the security of all tax and taxpayer information provided to the contractor is a major concern of the IRS.

(b) Management Controls

The contractor shall establish controls to preclude inadvertent or intentional disclosure of IRS case information, and the use of IRS case information for purposes other than specified under this contract. The contractor shall also impose controls to prevent employees from "browsing" cases other than those cases which employees are actively working. The contractor's plans for physical and data security shall be part of the management controls. The contractor shall also use other management techniques, such as monitoring of live phone calls, review of case files, etc., to monitor the protection of tax information. Any tax return information provided to the contractor under this contract shall be used only for the purpose of carrying out the provisions of this contract.

(c) "Official Use Only" Material

In the course of this contract, U.S. Government, Treasury and IRS material marked "Official Use Only" and other proprietary information may be provided to the contractor. The contractor shall use such information for the purposes of the contract only. Such material shall be kept under lock and key when not in use.

(d) IRS Monitoring and Review of Work

The contractor shall allow the IRS COTR/OSRs, representatives of the IRS' Internal Security and Internal Audit Divisions, and other IRS and government officials as designated by the COTR to monitor "live" employee phone contacts, review correspondence and case files, conduct disclosure and privacy reviews, and review conformance with tax information security concerns expressed in this contract. The IRS Internal Security Inspector and the IRS Internal Auditor will have access to the site at anytime to conduct appropriate reviews, audits, or conduct investigations. The contractor and its employees shall respond to all questions and concerns emanating from IRS monitoring and review of work.

C.3.2. PLACE OP PERFORMANCE

The contractor shall perform tasks at 1 site in the continental United States. The contractor shall also be prepared to travel to IRS sites in Fresno, California, Ogden, Utah, and Washington, D.C., at their own expense, to hold meetings, to initiate the contract, to conduct quarterly reviews of work progress, and to close out the contract. It is anticipated that the Contractor shall visit service centers each quarter for a total of eight (8) trips and two (2) trips to Washington, DC; one at the beginning of the contract and one at its conclusion.

SECTION D -- PACKAGING AND MARKING

D.1 PACKAGING

Preservation, packaging, and packing for shipment or mailing of all work deliverable hereunder shall be in accordance with good commercial practice and adequate to insure acceptance by common carrier and safe transportation at the most economical rates.

D.2 MARKING

(a) Each package, report or other deliverable shall be accompanied by a letter or other document which:

(1) Identifies the contract by number under which the item is being delivered.

(2) Identifies the deliverable Item Number or Report Requirement which requires the delivered item(s).

(3) Indicates whether the Contractor considers the delivered item to be a partial or full satisfaction of the requirement.

(b) For any package, report or other deliverable being delivered to a party other than the Contracting Officer, a copy of the document required in (a) above shall be simultaneously provided to the office administering the contract, as identified in Section G of the contract, or if none, to the Contracting Officer.

(c) The Contractor shall take all necessary precautions to ensure that all sensitive data developed under this contract are delivered to the Government in a secure manner.

SECTION E -- INSPECTION AND ACCEPTANCE

E.1 52.252-2 CLAUSES INCORPORATED BY REFERENCE (JUN 1988)

This contract incorporates one or more clauses by reference, with the same force and effect as if they were given in full text. Upon request, the Contracting Officer will make their full text available.

    I. FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) CLAUSES

        NUMBER         TITLE                             DATE

        52.246-4     INSPECTION OF SERVICES              FEB 1992

E.2 INSPECTION AND ACCEPTANCE

Inspection and acceptance of all work performed under this contract shall be by the Contracting Officer or a duly authorized representative. In order to verify the work, the Contract shall provide, in accordance with F.3 SCHEDULE OF DELIVERABLES, the report data base and reports as outlined in Section C.2.3(1). The reports, legibly written in clear, concise, standard business language, free of jargon, will be used by the IRS to verify the work performed by the Contractor. Verification may include the IRS re-contacting taxpayers to substantiate Contractor-contact. The reports will also be used to follow-up on promises to full-pay and installment agreements to determine the performance pay earned in accordance with F.4 Performance Payment Plan.

E.3 INSPECTION, ACCEPTANCE AND RECEIVING CERTIFICATION

A statement substantially as follows shall be placed, by the Contracting Officer's Technical Representative (COTR) or authorized Government representative, on each commercial shipping document, packing list for supplies or services, or Contractor's invoice:

INSPECTION, ACCEPTANCE, AND RECEIVING CERTIFICATION

The listed items have been: ____ received, ____ inspected, ____ accepted by me or under my supervision and they conform to contract requirements, except as noted below or on attached documents.

_______________               ______________________________________

All contract and order files shall contain a copy of the above certification.

SECTION F -- DELIVERIES OR PERFORMANCE

F.1 52.252-2 CLASSES INCORPORATED BY REFERENCE (JUN 1988)

This contract incorporates one or more clauses by reference, with the same force and effect as if they were given in full text. Upon request, the Contracting Officer will make their full text available.

    I. FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) CLAUSES

        NUMBER         TITLE                             DATE

        52.212-13    STOP-WORK ORDER                     AUG 1989

F.2 PERIOD OF PERFORMANCE

(a) The contract performance period shall be twelve (12) months from the date of contract award. The Government anticipates that the contract will be awarded by June 10, 1996.

(b) This contract includes a one year option period for the renewal of this effort, which may be unilaterally exercised at the discretion of the Government in accordance with Section I, FAR 52.217-9, OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 1989).

F.3. SCHEDULE OF DELIVERABLES

The contractor shall submit all plans required by C.2.1.(a, c, f-j) to the COTR for review and approval in accordance with the schedule below:

Event                                    Submission Schedule

Initial submission of plans              Within 20 calendar days

IRS provides comments                    Within 15 calendar days

Submission of revised plans and          Within 7 calendar days

Approval of final plans and              Within 3 calendar days

F.3.1 TRAINING PLAN AND MATERIALS

The Contractor shall submit the training plan and materials required by C.2.1.(b) to the COTR for review and approval in accordance with the following schedule:

Event                                   Submission Schedule

IRS provides camera ready copy of       Within 5 calendar days

Contractor's initial submission         Within 10 calendar days

IRS provides comments                   Within 10 calendar days

Submission of revised plan (if          Within 5 calendar days

Approval of final plan                  Within 3 calendar days

F.3.2 NON-DISCLOSURE AGREEMENTS

Within 20 days of contract award, the contractor shall deliver to the COTR non-disclosure agreements signed by all employees, principals, corporate officers, partners and employees with access to IRS account date or the contract site. [Reference C.2.1.(k)]

F.3.3 DISCLOSURE CONSENT FORMS (FOR TAX CHECKS)

Within 30 days of contract award, the contractor shall deliver disclosure consent forms to the COTR, in a format specified by the IRS and signed by all employees and managers working on or managing this contract, authorizing the disclosure to the contractor of whether the individual's tax check was positive or negative. [Reference C.2.1.(e)]

F.3.4 MINIMUM BACKGROUND INVESTIGATION (MBI) INFORMATION

The contractor shall submit MBI information packages to the COTR within 30 calendar days after contractor for all employees working under this contract. Form packages will be provided by the IRS within 5 calendar days after award. [Reference C.2.1.(d) and H.17]

F.3.5 SECURITY REPORTING REQUIREMENTS

The Contractor shall submit the annual report required by paragraph H.7.5.b. as outlined in that section. In the event the option is exercised, the report shall be required for the option year as well.

F.3.6 MONTHLY REPORTS

The contractor shall provide monthly reports to the COTR within ten calendar days after the end of each month, consisting of an electronic data base of its entire case inventory, showing all case activity since the inception of the contract, including activity on recalled and returned cases. [Reference C.2.3.(l)(1)]

F.3.7 WEEKLY REPORTS

The contractor shall provide to the COTR/OSRs weekly hard copy production reports by Wednesday of the following week, as specified in the contractor's approved reporting plan. Reports shall be divided into sections by the six types of account and by total inventory. [Reference C.2.3.(l)(2)]

The contractor shall provide weekly data to update:

A. IRS permanent account files; and

B. Returned and recalled accounts

The record or data base layout and medium of exchange will be as specified in the contractor's approved data exchange plan. [Reference C.2.3.(k)(2)]

F.3.8 TELEPHONE REPORTS

The contractor shall make available to OSRs at their request all telephone management reports from automatic call distributors and other telephone system management devices.

F.3.9 FINAL COPIES OF REPORTS AND CASE DATA BASE

The contractor shall give the IRS a final electronic copy of the report data base, hard copies of the final weekly analytical reports, and a final electronic copy of the case files, with any supporting hard copy files, as well as hard copy of the electronic cases files within the close down phase, which is the 7 days prior to the expiration of the contract. [Reference C.2.5]

The contractor shall return to the IRS or destroy any and all IRS "Official Use Only" documents and other proprietary IRS documentation provided to the contractor under this contract.

F.3.10 FINAL REPORT

The contractor shall prepare a final report, in written and presentation format, and present said report in person to the COTR and other IRS officials in Washington DC on the last working day of the contract. [Reference C.2.5.(D)]

F.4 PERFORMANCE PAYMENT PLAN

A successful contact (limited to one per case) consists of the contractor speaking by telephone to the actual taxpayer or either spouse in the case of a joint return (in individual tax cases) or the responsible company official (in business tax cases) resulting in a commitment (as outlined below) or an on-line referral to IRS as indicated in Section C.2.3.(c)(8).

IRS will pay the contractor the agreed fixed price for each successful contact accepted by IRS (see Section E, Inspection and Acceptance). In addition to the fixed price per successful contact, the contractor will also be paid performance fees every ninety (90) after the contractor begins working cases. IRS will evaluate the contractor's performance according to the number of cases processed which have one of the following four results:

1. FULL PAY. Taxpayer agrees to make full payment of tax,

2. EXTENSION TO PAY. Taxpayer agrees to make full payment of

3. CONTRACTOR-COMPLETED INSTALLMENT AGREEMENT. Taxpayer agrees

4. IRS-ASSISTED INSTALLMENT AGREEMENT. Taxpayer agrees to apply

If the fixed price per successful contact is "x", IRS will pay the contractor as follows:

For each case which     Calculations based    Predicted success

Full pay                         8X                    10%

Extension to pay                 6X                    20%

Contractor-completed             6X                    20%

     /*/ These factors are derived from internal experience and data.

The performance fee payments will be calculated based on the fixed price per successful contact multiplied by the applicable factor above, less deductions for verified taxpayer complaints (see below).

F.4.1 VERIFICATION OF COMPLAINTS

Each Type Two (2) and Type Three (3) complaint (see C.2.3(j) whether received in writing or verbally, will be reviewed by appropriate IRS employees and officials, including IRS Internal Security, for the purpose of determining the validity of said complaint. In doing so, the reviewing IRS employees and officials may elect to interview the taxpayer originating complaint, the contractor employee(s), or both, and to gather whatever other information may be deemed necessary. Based upon the results of this review, the IRS employees or officials will make a recommendation to the COTR as to the validity of the complaint within thirty (30) calendar days after receipt of the complaint, except in unusual circumstances where an extension of time is necessary. The Contractor will be notified prior to the expiration of the thirty days that an extension of time is required.

The COTR will then determine and recommend to the Contracting Officer the complaint as either verified or unverified. The Contracting Officer's judgment will be considered final. The Contracting Officer will provide written notification of his or her decision to the Contractor Representative, the COTR, and other IRS officials that may be designated to receive such information.

F.4.2. VERIFIED COMPLAINT DEDUCTIONS

All verified Type Two (2) and Type Three (3) complaints occurring and

_____________________________________________________________________

Number         % reduction         Number          % reduction

  1               10%                1                25%

Type Two (2)and Type Three (3) complaints lodged during the performance period, but not yet determined by the COTR as either verified or unverified, will be deferred until the next performance evaluation period. In the case of the final performance evaluation, all potential verified complaints that remain outstanding will be considered as verified, and reductions made to the performance payment accordingly.

The entire performance plan portion of the contract, including performance plan deductions and procedures for determining such deductions, are solely at the discretion of the IRS.

F.5 PLACE OF PERFORMANCE

The Contractor shall perform all work under this contract at:

(TO BE COMPLETED AT TIME OF CONTRACT AWARD)

SECTION G -- CONTRACT ADMINISTRATION DATA

G.1 AUTHORITY -- CONTRACTING OFFICER, CONTRACTING OFFICER'S TECHNICAL

G.1.1 Contracting Officer

The Contracting Officer for administration of this contract is:

(TO BE NAMED AT TIME OF AWARD)

The telephone number for the Contracting Officer is: __________.

The Contracting Officer, in accordance with Subpart 1.6 of the Federal Acquisition Regulation, is the only person authorized to make or approve any changes in any of the requirements of this contract, and notwithstanding any clauses contained elsewhere in this contract, the said authority remains solely with the Contracting Officer. In the event the Contractor makes any changes at the direction of any person other than the Contracting Officer, the change will be considered to have been made without authority and no adjustment will be made in the contract price to cover any increase in cost incurred as a result thereof.

G.1.2 Contracting Officer's Technical Representative

The Contracting Officer's Technical Representative (COTR) for this contract is:

(TO BE NAMED AT TIME OF AWARD)

The telephone number for the COTR is: ___________________.

The COTR will represent the Contracting Officer in the administration of technical details within the scope of this contract. The COTR is also responsible for the final inspection and acceptance of all reports, and such other responsibilities as may be specified in the contract. The COTR is not otherwise authorized to make any representations or commitments of any kind on behalf of the Contracting Officer or the Government. The COTR does not have authority to alter the Contractor's obligations or to change the contract specifications, price, terms or conditions. If, as a result of technical discussions, it is desirable to modify contract obligations or the statement of work, changes will be issued in writing and signed by the Contracting Officer.

The COTR assignment for this contract may be changed at any time by the Government without prior notice to the Contractor. The Contractor will be notified of the change.

G.1.2.1 ALTERNATE CONTRACTING OFFICER'S TECHNICAL REPRESENTATIVE

(a) The Alternate COTR is the individual supporting the COTR and the Contracting Officer in contract administration by:

(1) Monitoring the contractor's technical progress, including surveillance and assessment of performance, and recommending to the COTR and Contracting Officer changes in requirements;

(2) Providing technical clarification to the contractor on matters within the scope of the contract. The Alternate COTR will always contact the COTR if in doubt prior to giving clarification;

(3) Assisting the COTR in reviewing all data supporting costs requested for reimbursement by the contractor. As required, the Alternate COTR will submit to the COTR any recommendations for approval, disapproval, or suspension of payment for support and services required under this contract;

(4) Performing inspection and acceptance or recommendation for rejection of contractor deliverables, identifying deficiencies in delivered items or services, and providing supporting documentation to the COTR. (NOTE: This does not replace any other quality assurance inspection requirements that are specified elsewhere in the contract/delivery order.)

(b) The Alternate COTR, in providing technical clarification to the contractor, shall not engage in any activities which:

(1) Constitutes an assignment of work outside the general scope of the contract;

(2) Constitutes a change as defined in the "Changes" clause of this contract;

(3) Changes any of the expressed terms, conditions, or specifications of the contract;

(5) Suspends or terminates any contract activity, settles any claim or dispute arising under the contract, or issues any unilateral directive whatsoever.

G.1.2.2 IRS ON-SITE REPRESENTATIVES

The On-Site Representatives (OSRs) will coordinate delivery of inventory and account updates and monitor contractor performance of the contract. Additionally, the OSRs will be responsible for:

o Providing technical direction during the performance of this

o Monitoring the Contractor's performance under this contract.

o Inspecting all deliverables.

o Conducting periodic reviews of work and services performed by

o Advising the Contracting Officer of any factors which may

The OSR will provide no supervisory or instructional assistance to the Contractor's personnel.

Furthermore, the individual designated at the Contractor's facility as the 'Lead' OSR will be designated to act in the capacity of a Alternate COTR. In addition to those duties set forth above, the OSR designated as a Alternate COTR will be responsible for the duties set forth in G.1.2.

G.1.3 Project Manager

The Contractor's designated Project Manager for this contract is:

     _______________ (TO BE NAMED BY CONTRACTOR)

The telephone number for the Project Manager is: __________.

The Contractor shall provide a Project Manager for this contract who shall have the authority to make any no-cost contract technical, decisions, or special arrangement regarding this contract. The Project Manager shall be responsible for the overall management and coordination of this contract and shall act as the central point of contact with the Government. The Project Manager shall have full authority to act for the Contractor in the performance of the required services. The Project Manager, or a designated representative, shall meet with the COTR to discuss problem areas as they occur. The Project Manager, or designated representative shall respond within four hours after notification of the existence of a problem. The Project Manager shall be able to fluently read, write, and speak the English language.

G.2 INVOICE FIXED PRICE

(a) The original invoice shall be submitted to the Accounting Office designated below. Invoices may be submitted with the delivery of the required monthly reports. An additional copy of the invoice, clearly marked as an information copy, shall be submitted to the COTR and the Contract Administrator concurrently, to increase efficiency in the inspection and acceptance of delivered goods and services and the receipt of corresponding payments.

INTERNAL REVENUE SERVICE

(b) To constitute a proper invoice, the invoice must include the following information documentation:

(1) Name of the business concern and invoice date;

(2) Contract number, or other authorization for delivery of property and/or services;

(3) Description, price, and quantity of property and services actually delivered or rendered;

(4) Shipping and payment terms;

(5) Name (where practicable), title, phone number, and complete mailing address of responsible official to whom payment is to be sent; and,

(6) The Taxpayer Identification Number (TIN).

[End of Clause]

G.3 SUBMISSION OF "PUBLIC VOUCHERS FOR PURCHASES AND SERVICES OTHER

In addition to other contract requirements on Contractor payments, to be considered a proper invoice, the Contractor must submit the Standard Form entitled "PUBLIC VOUCHERS FOR PURCHASES AND SERVICES OTHER THAN PERSONAL" concurrently with the invoice and/or payment voucher, in the same number of copies as the invoice and/or payment voucher, to the addressee(s) specified in this contract for submission of the invoice and/or payment voucher. Copies of these forms are provided elsewhere in the solicitation. In lieu of the use of the SF-1034 and SF-1035, the contractor may submit suitable self- designed forms which contain the required information. The SF-1034 and SF-1035 are available from the Superintendent of Documents, Government Printing Office, Washington, DC 20402. The continuation sheet shall be submitted as directed by the Contracting Officer if additional information is required. All information will be filled in as specified on the form, including the following information:

(a) Voucher No.: Show the numerical sequence number of the voucher submitted to the applicable addressee for the contract, regardless of the funding document. The first voucher submitted to the addressee will begin with the number "1" and the next voucher submitted to that addressee will be number "2", etc., throughout the life of the contract. Vouchers submitted to each of the other addresses, if applicable, will also begin with the number "1" and will be numbered sequentially as aforementioned throughout the life of the contract.

(b) U.S. Department, Bureau, or Establishment and Location: The contractor is to complete all information in this block in relation to the designated payment office, which is the accounting office designated to make payments.

(c) Date Voucher Prepared: Show the mailing date to the paying office.

(d) Contract Number and Date: Show the contract number and date.

(e) Requisition Number and Date: Show the requisition number of the contract, modification or delivery order that is funding the contract payment.

(f) Payee's Name and Address: Show the complete address of the company, including the ZIP code.

(g) Number and Date of Order: Show the number and date of the delivery order funding this payment or contract modification number funding the payment if no delivery orders are applicable. Insert the words, "Basic Contract" if only the basic contract is funding the payment.

(h) Date of Delivery or Service: Show the date delivery or service was completed.

(i) Article or Services: Show a synopsis of the articles delivered and/or services completed. There is no need to go into detail since this form will be attached to the invoice. Also show in this block the total amount of payments requested including this request for payment, and all other payments made for these articles and/or services for which this request for payment is being made. QUANTITY, UNIT PRICE AND AMOUNT BLOCKS SHOULD BE ON THE INVOICE AND/OR PAYMENT VOUCHER.

(j) Total: Show the total amount requested for this payment.

SECTION H -- SPECIAL CONTRACT REQUIREMENTS

H.1 WARRANTY OF SERVICES

In accordance with FAR 52.246-20, Warranty of Services, the Contracting Officer shall give written notice of any defect or non- conformance to the Contractor within TEN (10) BUSINESS DAYS following the discovery of any defective or nonconforming service by the Contractor.

H.2 IRSAP 1052.224-9000(c) DISCLOSURE OF INFORMATION -- SAFEGUARDS

In performance of this contract, the contractor agrees to comply with and assume responsibility for compliance by his/her employees with the following requirements:

(1) All work shall be performed under the supervision of the contractor or the contractor's responsible employees.

(2) Any return or return information made available in any format shall be used only for the purpose of carrying out the provisions of this contract. Information contained in such material shall be treated as confidential and shall not be divulged or made known in any manner to any person except as may be necessary in the performance of this contract. Disclosure to anyone other than an officer or employee of the contractor shall require written approval of the Internal Revenue Service. Requests to make such disclosures should be addressed to the IRS Contracting Officer.

(3) All returns and return information will be accounted for upon receipt and properly stored before, during, and after processing. In addition, all related output shall be given the same level of protection as required for the source material.

(4) The contractor certifies that the data processed during the performance of this contract shall be completely purged from all data storage components of his/her computer facility, and no output will be retained by the contractor at the time the IRS work is completed. If immediate purging of all data storage components is not possible, the contractor certifies that any IRS data remaining in any storage component will be safeguarded to prevent unauthorized disclosures.

(5) Any spoilage or any intermediate hard copy printout which may result during the processing of IRS data shall be given to the IRS Contracting Officer or his/her designee. When this is not possible, the contractor will be responsible for the destruction of the spoilage or any intermediate hard copy printouts, and shall provide the IRS Contracting Officer or his/her designee with a statement containing the date of destruction, description of material destroyed, and the method used.

H.3 IRSAP 1052.224-9000(d) DISCLOSURE OF "OFFICIAL USE ONLY"

Any Treasury Department Information made available or to which access is provided, and which is marked or should be marked "Official Use Only", shall be used only for the purpose of carrying out the provisions of this contract and shall not be divulged or made known in any manner to any person except as may be necessary in the performance of the contract. Disclosure to anyone other than an officer or employee of the contractor at any tier shall require prior written approval of the IRS. Requests to make such disclosure should be addressed to the IRS Contracting Officer.

H.4 IRSAP 1052.224-9001(a) DISCLOSURE OF INFORMATION --

(1) Each officer or employee of any contractor at any tier to whom returns or return information is or may be disclosed shall be notified in writing by the contractor that returns or return information disclosed to such officer or employee can be used only for a purpose and to the extent authorized herein, and that further disclosure of any such returns or return information for a purpose or to an extent unauthorized herein constitutes a felony punishable upon conviction by a fine of as much as $5,000 or imprisonment as long as five years, or both, together with the costs of prosecution. Such person shall also notify each officer and employee that any such unauthorized future disclosure of returns or return information may also result in an award of civil damages against the officer or employee in an amount not less than $1,000 with respect to each instance of unauthorized disclosure. These penalties are prescribed by IRC Section 7213 and 7431 and set forth at 26 CPR 301.6103(n).

(2) Additionally, it is incumbent upon the contractor to inform its officers and employees of the penalties for improper disclosure imposed by the Privacy Act of 1974, 5 U.S.C. 552a. Specifically, 5 U.S.C. 552a(i)(1), which is made applicable to contractors by 5 U.S.C. 552a(m)(1), provides that any officer or employee of a contractor, who by virtue of his/her employment or official position, has possession of or access to agency records which contain individually identifiable information, the disclosure of which is prohibited by the Privacy Act or regulations established thereunder, and who knowing that disclosure of the specific material is so prohibited, willfully discloses the material in any manner to any person or agency not entitled to receive it, shall be guilty of a misdemeanor and fined not more than $5,000.

H.5 IRSAP 1052.224-9001(b) DISCLOSURE OF INFORMATION -- OFFICIAL USE

Each officer or employee of the contractor at any tier to whom "Official Use Only" information may be made available or disclosed shall be notified in writing by the contractor that "Official Use Only" information disclosed to such officer or employee can be used only for a purpose and to the extent authorized herein, and that further disclosure of any such "Official Use Only" information, by any means, for a purpose or to an extent unauthorized herein, may subject the offender to criminal sanctions imposed by 18 U.S.C. Sections 641 and 3571. Section 641 of 18 U.S.C. provides, in pertinent part, that whoever knowingly converts to his use or the use of another, or without authority sells, conveys, or disposes of any record of the United States or whoever receives the same with the intent to convert it to his use or gain, knowing it has been converted, shall be guilty of a crime punishable by a fine or imprisoned up to ten years or both.

H.6 IRSAP 1052.224-9002 DISCLOSURE OF INFORMATION -- INSPECTION (DEC

The Internal Revenue Service shall have the right to send its officers and employees into the offices and plants of the contractor for inspection of the facilities and operations provided for the performance of any work under this contract. On the basis of such inspection, the Contracting Officer may require specific measures in cases where the contractor is found to be non-compliant with contract safeguards.

Section H

H.7 COMPUTER SYSTEMS SECURITY

a. General

All systems which process Federal tax data must be in compliance with the provisions of the Computer Security Act of 1987, OMB Circular A-130, Appendix III and Treasury Directives 85-02 and 85-04. Conformance to the guidelines outlined below should meet the requirements of these directives. Department of Defense Trusted Computer System Evaluation Criteria, DOD 5200.28-STD, commonly referred to as the 'Orange Book', is used as a basis for the guidelines and may be a source of additional information. Copies may be obtained from: Office of Standards and Products, National Computer Security Center, Fort Meade, MD 20755-6000, Attention: Chief, Computer Security Standards.

In general:

1. All computers which process, store, or transmit Federal tax returns or return information shall meet or exceed class C2 criteria of the Orange Book;

2. Multi-category systems must basically conform to class B1; and

3. All Federal tax return data transmitted via telecommunications devices must be encrypted.

b. Definition

The following definitions should help explain computer security requirements:

1. Multi-category systems:

Any system containing federal tax information must be protected from disclosure to other users of the same system. Computers that contain information for more than one program/project, office, or client where personnel do not have authorization to see all information on the system. Also, computers that contain information for more than one individual, where not all users have the same privileges, even if in the same program/project.

2. Object:

A passive entity that contains or receives information. Examples of objects are: records, blocks, pages, files, directories, and programs, as well as bytes, words, fields, processors, video displays, keyboards, printers, and network nodes. Access to an object implies potential access to the information it contains.

3. Discretionary access control:

A means of restricting access to objects based on the identity and need-to-know of the users and/or groups to which they belong. All computer systems with Federal tax information must have, as a minimum, discretionary access control.

4. Mandatory access control:

A means of restricting access to objects based on the sensitivity (as represented by a label) of the information contained in the objects and the formal systemic authorization to access information of such sensitivity. All multi-category computer systems must have mandatory access control.

c. Operating Features of System Security

All computer systems must meet C2 level of protection. The operating security features of the system must:

1. Ensure individual accountability through identification and authentication of each individual system user. Identification (ID) and authentications is often accomplished with user ID's and passwords. Passwords must be constructed, protected, and administered in accordance with current Federal standards. The current standard is Federal Information Processing Standards Publication (FIPS PUB) 112, 'Password Usage.' FIPS publications are sold by the National Technical Information Service, U.S. Department of Commerce, 5285 Port Royal Road, Springfield, VA 22161. The system may use any method which uniquely identifies users and requires proof of identity before accessing the system. Identification/authentication must be an auditable function.

2. Control access to objects according to the user's authorization. Controlled access for C2 is often accomplished by 'profiles', giving users access to specific objects, such as programs, activities, files, or records. The system must be able to allow or deny access to objects based on the predetermined 'profile' of the user. Access authorizations, profiles, are to be established by authorized individuals, such as a security officer or program manager. Profiles must be protected from unauthorized changes. Again, any method which accomplishes this purpose may be used.

3. Maintain an audit trail of accesses to the objects and data it protects. The audit trail is a systemic record that is sufficient to enable reconstruction and/or review of activities related to operations, procedures, or events occurring on that system. Audit trails must, at a minimum, be able to record login attempts, password changes, and file creations, changes, and/or deletions. The audit trail must be protected in such a way that it can not be changed by the user. Audit trails must be reviewed regularly by supervisory, security, or other authorized agency individuals who are not the regular program users. Contractors are responsible for auditing the system; however, the IRS has review and control to ensure audit trails are being examined regularly. Anomalies must be reported to appropriate supervisory and/or security personnel for follow-up action.

4. Prevent unauthorized access by clearing all protected information on objects before they are allocated or reallocated out of or into the system. If an object, such as disk, tape, print buffer, file server, or other storage device, is to be taken out of a system and made available for other uses, it must be cleared of all protected information. This does not include tapes/disks which are used to store data for reuse in the same program or tapes/disks which are specifically assigned to a single program and to which only individuals with the same authorizations and need-to-know have access to the data. Objects being allocated into the system also must not contain residual protected data which other users may access.

Multi-category systems must meet higher security standards, which include all the features required for class C2, and,

1. A Security Policy Model. A security policy model is a written document describing the system in terms of the categories of data processed, users allowed access, and access rules between the users and the data.

2. Data Labeling. The level of sensitivity of information must be accurately identified and labeled. The information may be identified by its storage objects. The system must be able to identify the labels and to transfer data or allow access to only those with the appropriate level of authorization. When information is transferred the system must also transfer the label. Any changes to labels or to designations must be done manually and be auditable. The system shall, by default, mark the top and bottom of each human- readable page of hard copy with labels that properly represent the sensitivity of the information on the page.

3. Mandatory Access control. The system shall have mandatory access control using sensitivity labels of data and a systemic check of the user's authorization to access information. Identification and authentication data shall be used by the system to identify the user and to ensure that the user's security level and authorization is equal to or greater than the object's (data's) sensitivity label.

d. Physical Security of Computers and Magnetic Media

Whenever possible, computer operations must be in a secure area with restricted access. Tape reels, disks, or other magnetic media must be labeled as Federal tax data when they contain such information. Magnetic media should be kept in a secured area under the immediate protection and control of an authorized employee or locked-up. Good security practice requires that inventory records of magnetic media be maintained for purposes of control and accountability.

H.7.1 PHYSICAL SECURITY REQUIREMENTS

a. General

There are a number of ways that security may be provided for a document, an item, or an area. These include but are not limited to, locked containers or various types, vaults, locked rooms, locked rooms which have reinforced perimeters, locked buildings, guards, electronic security systems, fences, identification systems and control measures.

b. Security of Tax Information During Working Hours

Access will be limited to all areas containing Federal tax information during office hours. This can be accomplished by restricted areas, security rooms, or locked rooms.

(1) Restricted Area

A restricted area is an area to which entry is restricted to authorized personnel. Restricted areas will be prominently identified and separated from non-restricted areas by physical barriers which will control access. Signs will be posted. The number of entrances will be kept to a minimum, and each entrance controlled. Adequate control should be provided at the entrance to assure that only authorized persons, with an official need, enter.

Written instructions or procedures should be formulated identifying employees who are authorized and those who are not authorized to have access to the tax files. A restricted area register shall be maintained at a designated entrance and all visitors will be directed to that entrance. Each person entering the area, who is not assigned to the area, will sign in by entering in ink in the register: name, signature, assigned work area, person to be contacted, purpose for entry, and time and date of entry. Verification with photo identification shall be accomplished. When leaving the area, the visitors departure time shall be entered in the register. The restricted register shall be closed out at the end of each month, and reviewed by the appropriate official.

To facilitate the entry of employees who have a frequent and continuing need to enter a restricted area, an Authorized Access List can be maintained. Individuals whose names appear on the Authorized Access List, should not be required to sign in.

(2) Security Room

A security room is a room (the primary purpose of which is to store protected items) which has been constructed to resist forced entry. The entire room must be enclosed by slab-to-slab walls constructed of approved materials and supplemented by periodic inspection. In addition, any glass in doors or walls will be security glass. All doors entering the room must be locked with strict key control or combination access. Door hinge pins must be non-removable or installed on the inside of the room. Entrance will always be limited to specifically authorized personnel. The room must be cleaned in the presence of an employee authorized to enter the room.

c. Security of Tax Information After Working Hours

Procedures should be developed for after-hours access to areas by authorized individuals. Federal tax information in any form must be protected after working hours by a combination of:

(i) Secured Perimeter

The perimeter is the entrance to a space or area. This could be a wall and door of a building or the fence and gate line of a facility. The requirements for a secured perimeter of a building are: slab-to-slab walls constructed of approved materials and supplemented by periodic inspection or other approved protection methods; or any lesser type partition supplemented by UL approved electronic intrusion detection and fire detection systems. Unless electronic intrusion detection devices are utilized, all doors entering the space must be locked, and strict key or combination control should be exercised. In the case of fence and gate, the fence must have intrusion detection devices or be continually guarded, and the gate must be either guarded or locked with intrusion alarms.

(2) Secured Areas

Secured areas are internal areas which have been designed to prevent undetected entry by unauthorized persons during non-work hours. To qualify as a secured area, space must meet the following minimum standards: enclosed by slab-to-slab walls constructed of approved materials and supplemented by periodic inspection or other approved protection methods; or any lessor type partition supplemented by UL approved electronic intrusion detection and fire detection systems. Unless electronic intrusion detection devices are utilized, all doors entering the space must be locked, and strict key or combination control should be exercised. The space must be cleaned during duty hours or in the presence of a regularly assigned employee.

(3) Containers

The term 'container' includes all file cabinets, both vertical and lateral, safes, supply cabinets, open and closed shelving or desk and credenza drawers, carts or any other piece of office equipment designed for the storage of files, documents, papers, or equipment. For purposes of providing protection, containers can be grouped into three general categories:

(a) Security containers, lockable metal containers approved for the storage of high security items. These include: metal lateral key lock files; metal lateral files equipped with lock bars on both sides and secured with security padlocks; metal pull drawer cabinets with center or off-center lock bars secured by security padlocks; and, key lock 'mini safes'. To maintain the integrity of the security container, key locks should have only three keys. Strict control of the keys is mandatory. Combination locks should have the combination restricted to a minimum number of individuals.

(b) Locked containers, any wood or metal file, cabinet, desk, credenza or similar type office container which is locked and to which keys and combinations are controlled.

(c) Safes/Vaults, safe type containers which have been accepted for general use by General Services Administration (GSA). These can be identified by interior labels which reflect:

1. GSA approval as Class I, IV, or V safes; or

2. Safes with TRTL-30, TRTL-60, or TXTL-60, UL Listings.

Approved vaults are those which have been constructed to GSA specifications and which utilize UL approved vault doors.

d. Minimum Protection Standards (MPS)

The Minimum Protection Standards (MPS) system establishes a uniform method of protecting data and items which require safeguarding. This system contains minimum standards which will be applied on a case-by-case basis. Since local factors may require additional security measures, management must analyze local circumstances to determine space, container, and other security needs at individual facilities. The MPS has been designed to provide management with basic framework for minimum security requirements.

The objective of these standards is to prevent unauthorized Access to returns or return information. MPS requires two barriers to accessing return information under normal security -- locked perimeter/locked container, locked interior (room)/locked container, or locked perimeter/locked interior (room). Locked means an area or container which has a lock and the keys or combinations are controlled. The reason for the two barriers is to allow certain individuals into the area while preventing unauthorized access to Federal tax return information.

e. Security During Office Moves

When it is necessary for an office to move to another location, plans must be made to properly protect and account for all tax data and other information. Tax documents and other information will be in locked cabinets or sealed packing cartons while in transit. accountability will be maintained to ensure that cabinets or cartons do not become misplaced or lost during the move.

f. Handling and Transporting Federal Tax Information

(1) Handling

The handling of tax and tax-related documents must be such that the documents do not become misplaced, or available to unauthorized personnel. Only those employees who have a need to know will be permitted access to tax and tax-related information.

(2) Transporting

Any time tax information is transported from one location to another, care must be taken to provide safeguards. In the event the material is hand carried by an individual in connection with a trip or in the course of daily activities, it must be kept with the individual as much as possible. If it becomes necessary to leave the material in an automobile, it must be locked in the trunk with the rest of the car locked, and then for only a short period. Hotel and motel rooms are usually not good locations to secure tax information.

All shipments of tax returns and return information (including magnetic media and microfilm) will be documented on a transmittal form, and monitored to ensure that each shipment is properly and timely received and acknowledged. All Federal tax information transported through the mail or courier/messenger service will be double sealed; that is one envelope within another envelope.

H.7.2 MINIMIZING ACCESS TO FEDERAL TAX INFORMATION

a. Labeling

Access to Federal tax returns and return information is to be restricted to only those persons whose duties or responsibilities require access. In order to accomplish this, information must be clearly labeled "Federal Tax Data." Federal tax data should be handled in such a manner that it does not become misplaced or available to unauthorized personnel. Good safeguard practice dictates that access to Federal tax information must be strictly on a need-to- know basis. Federal tax data must never be indiscriminately disseminated. The potential for improper disclosure is minimized by restricting access to designated personnel. No person should be given more information than is needed in performance of his/her duties.

b. Commingling

To avoid inadvertent disclosures, Federal tax information must be kept separate from other information. Contractors should not maintain Federal tax information as part of general case files.

H.7.3 INTERNAL INSPECTIONS

Contractors receiving Federal tax returns or return information must conduct periodic inspections during the year (quarterly) to ensure that safeguards are adequate. These safeguard inspections are subject to oversight and review by IRS employees. The inspection records will be filed in a separate folder, and, for purposes of meeting IRC Section 6103(p)(4) requirements, will be retained for a minimum of three years.

Safeguard inspections should include the following items:

1. A review of the storage and handling of Federal tax information,

2. A review of how access to Federal tax information is granted to employees,

3. An assessment of facility security features,

4. Verification that Federal tax information has not been commingled with other information in such a way that its confidentiality could be inadvertently compromised,

5. A review of after-hours security measures,

6. A review of access to safes or other secure storage containers or areas and of responsibility for changing keys or combinations as well as the exercise of that responsibility,

7. An analysis of security procedures and instructions to employees,

8. A review of the data processing operations, including computer systems,

9. A review of the control and storage of magnetic media,

10. An audit of the file room activity,

11. Interviews of those charged with security responsibilities,

12. A review of planned organizational changes to assure that security considerations are covered,

13. A review of procedures for, and records of, disposing of or destroying tax information no longer needed by the contractor, and

14. Results of any after-hours inspections.

These inspections shall be conducted with IRS personnel involvement, and shall be subject to formal follow-up procedures for necessary corrective actions.

H.7.4 EMPLOYEE AWARENESS

Contractor employees who have access to Federal tax information must be thoroughly briefed on security procedures and instructions requiring their awareness and compliance. Periodic reorientation sessions will be conducted to ensure that all appropriate employees remain alert to all security requirements. Employees must be advised at least annually of the provisions which make unauthorized disclosure of Federal returns or return information a crime that may be punishable by a $5,000 fine, five years imprisonment, or both, and the costs of prosecution. Employees must also be advised annually of the provisions which permit a taxpayer to bring suit for civil damages in a United States district court for unauthorized disclosure of returns and return information. This section allows for $1,000 for each act of unauthorized disclosure or the actual damages sustained plus possible punitive damages. Also, the plaintiff receives the cost of action.

H.7.5 REPORTING REQUIREMENTS

a. Safeguard Procedures Report

Written reports describing the safeguard procedures established and utilized to assure the confidentiality of Federal tax information will be provided to the IRS at such times as the IRS may prescribe. Safeguard Procedures Reports and Safeguard Activity Reports are needed by the IRS to help ensure that contractors are meeting safeguard requirements and as a source of information for the IRS's annual report to Congress.

The Safeguard Procedures Report (SPR) will contain the following information:

1. Name, title and telephone number of the official responsible for implementing safeguard procedures;

2. A chart or description of the contractor's organizational structure;

3. A chart or description of the flow of Federal tax data through the organization from its receipt through its return to the IRS or its destruction. Pertinent delegation orders or equivalent legal authority which permits use, handling, access, etc., at each point in the flow of tax data should be included;

4. A determination whether Federal tax data is commingled with or transcribed into data kept by the organization;

5. If applicable, a description of automated data processing (ADP) system(s) as they relate to Federal tax data, including system configuration, what data is processed, files/records created when processing tax data and which of these files/records contain such data, timesharing, internal system security (access controls, audit trails, and so forth), equipment, and area physical security, networks to remote terminals and/or other computers, and electronic transmissions of Federal tax data. Also, include any planned changes to your system (equipment, safeguards or processes);

6. Copies of all written procedures and other related memoranda concerning the safeguards afforded to the Federal tax information, including a description of the permanent, standardized system of records maintained to record disclosures. These procedures should, at the minimum, describe the physical security afforded Federal tax data, the access allowed to Federal tax data by employees, and the manner in which access is controlled. The procedures will also describe in detail the manner in which Federal tax data is disposed of upon completion of use, to include the methods of destruction, the time schedule for disposal, and the names and titles of the employees who are responsible for supervising destruction or disposal of Federal tax data. The procedures will also describe the contractor's security awareness program and controls used to restrict visitors, janitorial help and unauthorized employees in areas where Federal tax data is maintained;

In addition to the initial SPR, new SPRs should be submitted when major changes occur in the processing and/or protection of Federal tax returns or return information. Examples include relocation of a major program operation, converting from a "paper" system to an on-line system, a major change of computer systems or system security, or a major agency reorganization.

b. Safeguard Activity Report

Subsequent to submission of the SPR, a written Safeguard Activity Report (SAR) will be submitted annually. The report will:

1. Describe in detail significant changes in safeguard procedures or authorized access to Federal tax returns or return information and any changes or enhancements to physical and computer security measures utilized to safeguard Federal tax data.

2. Include a copy of reports of internal inspections conducted to assure that the written procedures are being adhered to by all agency and authorized contractor employees. Included should be the names of offices visited, the specific items reviewed, what the findings were, and the overall safeguard awareness found. Specific items which should be included in the inspection are enumerated in "Internal Inspections."

3. Report the disposal of Federal tax data. The information should be adequate to identify the material destroyed and the date and manner of destruction.

The SAR serves as the contractor's certification that it is protecting return information. The content and thoroughness of your SAR will weigh heavily in determining the frequency and extent of the reviews conducted by the IRS.

c. Submission of Reports

The Safeguard Procedures Report is to be submitted 30 days before the scheduled receipt of Federal tax information. This report is required for the initial receipt of Federal tax information and not required for additional tax information received under the same disclosure authorization. However, if another program is entered into, procedures for the additional program must be submitted 45 days before scheduled receipt of the program's Federal tax information, and may be accomplished by submitting either a revised procedures report or a separate procedures report for the new program. Further Safeguard Procedures Reports will be furnished at the request of the Service.

The Safeguard Activities Report should be sent to the IRS, the report is to be submitted by January 31st., and cover the preceding calendar year. Federal oversight agencies set submission dates for agencies reporting to them.

H.7.6 DISPOSAL OF TAX INFORMATION UPON COMPLETION OF USE

Users of Federal Tax Information are required to take certain actions upon completion of use of the information in order to protect its confidentiality. Contractors will either return the information (including any copies made) to the office from which it was originally obtained or make the information undisclosable and include in the annual report a description of the procedures used. When the Federal tax data is returned, a receipt process must be used.

The following precautions should be observed when Federal tax information is destroyed:

1. Material furnished to the user and user generated material such as extra copies, photo impressions, computer printouts, carbon paper, notes, stenographic notes and work papers should be destroyed by burning, mulching, pulping, shredding, or disintegrating.

2. Burning precautions: the material is to be either burned in an incinerator that produces enough heat to burn the entire bundle or the bundle should be separated to ensure that all pages are consumed.

3. Shredding precautions: to make reconstruction more difficult, the paper should be inserted so that lines of print are perpendicular to the cutting line; small amounts of shredded paper should not be allowed to accumulate in the shredder bin. The paper should be shredded to effect 5/16-inch wide or smaller strips, microfilm should be shredded to effect a 1/35-inch by 3/8-inch strip.

4. Pulping should be accomplished in such a manner that all material is reduced to particles one inch or smaller.

5. Disintegrating should be accomplished with a 1/2-inch or smaller screen.

Federal tax data must never be disclosed during disposal. Destruction of the data should be witnessed by a IRS employee in a manner sufficient to safeguard the data from unauthorized disclosure.

After it has served its purpose, magnetic tape containing Federal tax data must not be made available for reuse by other offices or released for destruction without first being subjected to electro-magnet erasing. If reuse is not intended, the tape should be destroyed by cutting into lengths of 18 inches or less or by burning to effect complete incineration.

Whenever disk media leaves the physical or systemic control of the contractor for maintenance, exchange or servicing, any Federal tax information on it must be destroyed by:

1. Completely overwriting all data tracks a minimum of three times, using maximum current that will not damage or impair the recording equipment; or

2. Running a magnetic strip, of sufficient length to reach all areas of the disk, over and under each surface a minimum of three times.

If the information cannot be destroyed as indicated, the disk will be damaged in an obvious manner to prevent use in any disk drive unit and discarded.

H.7.7 NEED AND USE

Any contractor which received returns or return information for an authorized use may not use the returns or information in any manner or for any purpose not consistent with that authorized use. An unauthorized secondary use is specifically prohibited and may result in discontinuation of disclosures to the contractor and the imposition of civil or criminal penalties on the responsible officials.

H.7.8 REPORTING INDICATIONS OF IMPROPER DISCLOSURE

Upon discovery of a possible improper disclosure of Federal tax information by a Federal employee or any other person, the individual making the observation or receiving the information should contact the IRS COTR/OSR and the appropriate IRS Regional Inspector.

H.7.9 IRS SAFEGUARD REVIEWS

A safeguard review is an on-site evaluation of the measures used to protect Federal tax returns and return information received from the IRS and how such information is used. IRS conducts on-site reviews of safeguards on a regular basis. Other criteria will be considered in determining the need for a review. A written review plan will be provided by the IRS. The plan will include a list of records to be reviewed; the scope and purpose of the review; and a list of the specific areas to be reviewed and contractor personnel to be interviewed.

Reviews cover the six areas of IRS Section 6103(p)(4) and, if applicable, need and use. Observing actual operations is a required step in the review process. Contractor employees may be interviewed during the on-site review, generally to clarify procedures or to ascertain employee awareness of security requirements and IRC penalty provisions. Contractor files will be spot checked to determine if they contain Federal tax information. Safeguard reviews are conducted to determine the adequacy of safeguards as opposed to an evaluation of the program. A review report will be issued. The contractor will have an opportunity to provide comments which will be included in the report.

H.8 NONPAYMENT FOR UNAUTHORIZED WORK

No payments will be made for any unauthorized supplies or services, or for any unauthorized changes to the work specified herein. This includes any service performed by the Contractor of his own volition or at the request of an individual other than a duly appointed Contracting Officer. Only a duly appointed Contracting Officer is authorized to change the specifications, terms, and conditions in this contract.

H.9 USE OF RECOVERED MATERIAL CONTENT IN PAPER AND PAPER PRODUCTS

(a) If the contractor is required under this contract to deliver any of the paper and paper products listed below, all such items delivered shall meet the minimum content standards for recovered materials, post-consumer recovered materials, or waste paper set forth below in paragraph (b).

(1) Recovered materials are defined as waste material and by- products that have been recovered or diverted from solid waste, not including those materials and by-products generated from, and commonly reused within, an original manufacturing process.

(2) Post-consumer recovered materials are defined as waste materials recovered from retail stores, office buildings, homes, and so forth after they passed through their end usage as a consumer item.

(3) Waste paper is defined as all items from the first two categories above in addition to forest residues, and manufacturing and other wastes.

(b) Unless otherwise directed by the contracting officer, the contractor shall use "High Grade Bleached Printing and Writing Papers" as defined in this clause to produce all progress reports, draft reports, final reports, and any other products required to be delivered to the Government under this contract.

            MINIMUM CONTENT STANDARDS FOR SELECTED PAPER

                          Minimum %    Minimum %    Minimum %

NEWSPRINT                                 40

H.10 DEPARTMENT OF THE TREASURY SUPPORT FOR ACQUISITION OF PRODUCTS

The Department of the Treasury strongly supports the use of products with the maximum extent of recovered material content. Contractors are encouraged to utilize recovered material content wherever such use will allow compliance with the specifications.

H.11 KEY PERSONNEL

The Contractor shall use the key personnel set forth in its proposal and listed below, upon which award of this contract shall be based, for performance of the effort set forth herein. In the event that one or more of the personnel are not available, or become unavailable, the Contractor shall furnish substitute personnel of equal skills, which substitutions shall be subject to approval of the Contracting Officer.

          NAME                                    POSITION

                                            PROJECT MANAGER

H.11.1 SUBSTITUTION OF KEY PERSONNEL

(a) The Contractor shall assign to the contract those persons whose resumes were submitted with his proposal who are necessary to fill the requirements of the contract and orders thereunder. No substitutions shall be made except in accordance with this clause.

(b) The Contractor shall not allow personnel substitutions during the contract performance period unless the Contractor promptly notifies the Contracting Officer, WITH A COPY TO THE COTR AND THE LEAD OSR, and provides the information required by paragraph (c) below. All proposed substitutions must be submitted, in writing, at least fifteen (15) working days in advance of the proposed substitutions to the Contracting Officer, and provide the information required by paragraph (c) below.

(c) All requests for substitutions must provide a detailed explanation of the circumstances necessitating the proposed substitutions, a complete resume for the proposed substitute, and any other information requested by the Contracting Officer needed to approve or disapprove the proposed substitution. All proposed substitutions must have qualifications that are equal to or higher than the qualifications of the person(s) to be replaced. The Contracting Officer or an authorized representative, will evaluate such requests and promptly notify the Contractor of approval or disapproval thereof within ten business days of receipt of the substitution request.

H.11.2 REMOVAL AND REPLACEMENT OF CONTRACTOR PERSONNEL

The Government reserves the right to request that the Contractor remove any contractor employees whose continued use under this contract is deemed contrary to the best interests of the Government. Notice of such removal will be given in writing by the Contracting Officer.

In the event the Contractor finds it necessary to replace any of the assigned personnel during the performance contract, the Contracting Officer and Contracting Officer's Technical Representative shall be notified in writing. In cases of Contractor initiated reassignment of personnel, notice shall be provided at least fifteen (15) CALENDAR days prior to reassignment. Replacement personnel shall meet or exceed the qualifications of the originally assigned personnel. This notice shall also include the resume(s) of the proposed replacement personnel. (See also Section H.10.1) All replacement personnel are subject to the prior written approval of the Contracting Officer.

H.12 TECHNICAL DIRECTION

Performance of the work under this contract shall be subject to the technical direction of the Contracting Officer's Technical Representative (COTR) identified elsewhere in this contract. The term "technical direction" is defined to include:

(a) Directions to the Contractor which redirect the contract effort, shift work emphasis between work areas or tasks, required pursuit of certain lines of inquiry, fill in details or otherwise serve to accomplish the contractual Statement of Work.

(b) Provision of written information to the Contractor which assists in the interpretation of drawings, specifications or technical portions of the work description.

(c) Review and, where required by the contract, approval of technical reports, drawings, specifications and technical information to be delivered by the Contractor to the Government under the contract.

Technical direction must be within the scope of work stated in the contract. The COTR does not have the authority to, and may not, issue any technical direction which:

(a) Constitutes an assignment of additional work outside the Statement of Work;

(b) Constitutes a change as defined in the contract clause entitled "Changes";

(c) Causes an increase or decrease in the total price or the time required for contract performance;

(d) Changes any of the expressed terms, conditions or specifications of the contract; or

(e) Interferes with the Contractor's right to perform the terms and conditions of the contract.

All technical directions shall be issued in writing by the COTR.

The Contractor shall proceed promptly with the performance of technical directions duly issued by the COTR in the manner prescribed by this article and within his authority under the provisions of this clause. If, in the opinion of the Contractor, any instruction or direction by the COTR falls within one of the categories defined in (a) through (e) above, the Contractor shall not proceed but shall notify the Contracting Officer in writing within five (5) working days after receipt of any such instruction or direction and shall request the Contracting Officer to modify the contract accordingly. Upon receiving the notification from the Contractor, the Contracting Officer shall:

(a) Advise the Contractor in writing within thirty (30) days after receipt of the Contractor's letter that the technical direction is within the scope of the contract effort and does not constitute a change under the "Changes" clause of the contract;

(b) Advise the Contractor within a reasonable time that the Government will issue a written change order.

The failure of the Contractor and Contracting Officer to agree that the technical direction is within the scope of the contract, or a failure to agree upon the contract action to be taken with respect thereto shall be subject to the provisions of the clause entitled "Disputes Alternate I" of the Contract Clauses (Part II - SECTION I).

H.13 MODIFICATION AUTHORITY

Notwithstanding any of the other provisions of this contract, the Contracting Officer shall be the only individual authorized to:

(a) accept nonconforming work,

(b) waive any requirement of this contract, or

(c) modify any term or condition of this contract.

H.14 RESTRICTION AGAINST DISCLOSURE

The Contractor agrees, in the performance of this contract, to keep the information contained in source documents or other media furnished by the Government in the strictest confidence, said information being the sole property of the Government. The Contractor also agrees not to publish, reproduce, or otherwise divulge such information in whole or in part, in any manner or form, nor to authorize or permit others to do so, taking such reasonable measures as are necessary to restrict access to such information while in the possession of the Contractor, to those employees needing such information to perform the Statement of Work, i.e., on a "need to know" basis, and agrees to immediately notify, in writing, the Contracting Officer's Technical Representative in the event that it is determined or there is reason to suspect a breach of this requirement.

H.15 OBSERVANCE OF LEGAL HOLIDAYS AND ADMINISTRATIVE LEAVE

The Contractor shall take into account that IRS employees usually do not work on a 24-hour schedule, on week-ends, nor on holidays. They may be in different time-zones from the Contractor site.

The IRS will attempt to conform to the Contractor's work schedule, since On-Site-Representatives (OSRs) and IRS employees at referral sites are necessary components of the work flow.

Furthermore, the Contractor is subject to the Fair Debt Collection Practices Act, which specifies and limits the hours and days on which taxpayers can be contacted.

Government personnel observe the listed days as holidays:

     New Year's Day           Martin Luther King, Jr.'s Birthday

     Any other day designated by Federal Statute

The Contractor shall observe above holidays on the date observed by the Government. It is understood and agreed between the Government and the Contractor that observance of such days by Government personnel shall not "on-its-face" be the cause for an additional period of performance, or entitlement of compensation except as set forth within the contract. If Contractor employees are performing duties at a Government site, the employees are automatically relieved from duty by virtue of the fact that Government employees are dismissed early or given the day off, and it will be without loss to the Contractor in accordance with the payment method set forth in the paragraph below. No form of holiday or other premium compensation will be reimbursed; however, this does not preclude reimbursement for authorized overtime.

Further, when the Government grants administrative leave to its employees, Contractor personnel shall also be dismissed. When administrative leave is granted to Contractor personnel as a result of inclement weather, potentially hazardous conditions, and other special circumstances, etc., it will be without loss to the Contractor. In this instance, the salaries and wages to the Contractor for the period of such excused absence shall be reimbursable item of direct cost hereunder for employees whose regular time is normally direct charged, and a reimbursable item of indirect cost for employees whose regular time is normally charged indirect (in accordance with the Contractor's accounting policy).

All Contractor personnel assigned to this contract shall limit their observation of holidays to those set forth above.

H.16 STATE AND LOCAL TAXES

In accordance with FAR 29.303 and FAR 31.205-41, the Contractor or any subcontractor under this contract shall not be reimbursed for payment of any State and local taxes for which an exemption is available. The Contractor is responsible for determining the availability of State and local tax exemptions and obtaining such exemptions, if available. The Contractor shall include this clause, suitably modified to identify the parties, in all subcontracts at any tier. The Contractor shall notify the Contracting Officer if problems arise in obtaining a State or local tax exemption. The Contractor may request a waiver, by the Contracting Officer, from this requirement if the administrative burden of seeking an exemption appears to outweigh the potential savings to the Government.

H.17 MINIMUM BACKGROUND INVESTIGATION

A Minimum Background Investigation will be conducted by the Assistant Commissioner (Inspection), IRS. Investigation requirements include: (a) a Security Investigation Index Search of National Agencies; (b) Criminal record checks covering a five year period of residency and employment; (c) a credit check; and (d) employment and reference vouchers.

In accordance with Internal Revenue Manual 0736, the Contractor shall provide the COTR with the names of the individuals who will be providing support for the contract utilizing Standard Form (SF) 85, Questionnaire for Public Trust Positions (original and two copies); Authority for Release of Information Treasury Directive Form (TD F) 62-94.1 (6 signed copies); and Police Directive (PD)-70, Metropolitan Police Record Check (if applicable). The COTR will transmit this information to Inspection upon receipt.

A current individual security clearance granted by the Defense Industrial Security Clearance Office (DISCO) will be acceptable in lieu of a new investigation. However a Fingerprint Document (FD)-258, Fingerprint Card will be required for that individual along with a memorandum listing the following information: Name and Job Title; Social Security Number, Citizenship, Date and Place of Birth; Security Clearance Level, Contract Number & Job; Length of Contract Employment, Date and Place Clearance Granted and Federal Supply Code (FSC)/Cage Code.

When submitting a package for a Minimum Background Investigation (MBI), the Contractor shall include a cover memorandum with the following information: Contract Number, Name of COTR, phone number and mailing address; Contractor company name; Name and address of Contractor company to be billed; and price of MBI. The Contractor shall reimburse the Government for all subject costs. Projected Fiscal Year 1996 cost for a MBI is $300.00 each. The cost of fingerprinting only is estimated at $25.00 each. The charge per case will be in accordance with the current rate at the time billing is initiated.

PART II - CONTRACT CLAUSES

SECTION I - CONTRACT CLAUSES

I.1 52.252-2 CLAUSES INCORPORATED BY REFERENCE (JUN 1988)

This contract incorporates one or more clauses by reference, with the same force and effect as if they were given in full text. Upon request, the Contracting Officer will make their full text available.

    I. FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) CLAUSES

  NUMBER        TITLE                            DATE

  52.203-3   GRATUITIES                          APR 1984

I.2 52.202-1 DEFINITIONS (OCT 1995)

(a) "Head of the agency" (also called "agency head") or "Secretary" means the Secretary (or Attorney General, Administrator, Governor, Chairperson, or other chief official, as appropriate) of the agency, including any deputy or assistant chief official of the agency; and the term "authorized representative" means any person, persons, or board (other than the Contracting Officer) authorized to act for the head of the agency or Secretary.

(b) Commercial component means any component that is a commercial item.

(c) Commercial item means --

(1) Any item, other than real property, that is of a type customarily used for nongovernmental purposes and that --

(i) Has been sold, leased, or licensed to the general public; or

(ii) Has been offered for sale, lease, or license to the general public;

(2) Any item that evolved from an item described in paragraph (c)(1) of this clause through advances in technology or performance and that is not yet available in the commercial marketplace, but will be available in the commercial marketplace in time to satisfy the delivery requirements under a Government solicitation;

(3) Any item that would satisfy a criterion expressed in paragraphs (c)(1) or (c)(2) of this clause, but for --

(i) Modifications of a type customarily available in the commercial marketplace; or

(ii) Minor modifications of a type not customarily available in the commercial marketplace made to meet Federal Government requirements. "Minor" modifications means modifications that do not significantly alter the nongovernmental function or essential physical characteristics of an item or component, or change the purpose of a process. Factors to be considered in determining whether a modification is minor include the value and size of the modification and the comparative value and size of the final product. Dollar values and percentages may be used as guideposts, but are not conclusive evidence that a modification is minor;

(4) Any combination of items meeting the requirements of paragraphs (c)(1), (2), (3), or (5) of this clause that are of a type customarily combined and sold in combination to the general public;

(5) Installation services, maintenance services, repair services, training services, and other services if such services are procured for support of an item referred to in paragraphs (c)(1), (2), (3), or (4) of this clause, and if the source of such services-

(i) Offers such services to the general public and the Federal Government contemporaneously and under similar terms and conditions; and

(ii) Offers to use the same work force for providing the Federal Government with such services as the source uses for providing such services to the general public;

(6) Services of a type offered and sold competitively in substantial quantities in the commercial marketplace based on established catalog or market prices for specific tasks performed under standard commercial terms and conditions. This does not include services that are sold based on hourly rates without an established catalog or market price for a specific service performed;

(7) Any item, combination of items, or service referred to in subparagraphs (c)(1) through (c)(6), notwithstanding the fact that the item, combination of items, or service is transferred between or among separate divisions, subsidiaries, or affiliates of a Contractor; or

(8) A nondevelopmental item, if the procuring agency determines the item was developed exclusively at private expense and sold in substantial quantities, on a competitive basis, to multiple State and local Governments.

(d) Component means any item supplied to the Federal Government as part of an end item or of another component.

(e) Nondevelopmental item means --

(1) Any previously developed item of supply used exclusively for governmental purposes by a Federal agency, a State or local government, or a foreign government with which the United States has a mutual defense cooperation agreement;

(2) Any item described in paragraph (e)(1) of this definition that requires only minor modification or modifications of a type customarily available in the commercial marketplace in order to meet the requirements of the procuring department or agency; or

(3) Any item of supply being produced that does not meet the requirements of paragraph (e)(1) or (e)(2) solely because the item is not yet in use.

(f) "Contracting Officer" means a person with the authority to enter into, administer, and/or terminate contracts and make related determinations and findings. The term includes certain authorized representatives of the Contracting Officer acting within the limits of their authority as delegated by the Contracting Officer.

(g) Except as otherwise provided in this contract, the term "subcontracts" includes, but is not limited to, purchase orders and changes and modifications to purchase orders under this contract.

52.203-6 RESTRICTIONS ON SUBCONTRACTOR SALES TO THE GOVERNMENT (OCT

(a) Except as provided in (b) below, the Contractor shall not enter into any agreement with an actual or prospective subcontractor, nor otherwise act in any manner, which has or may have the effect of restricting sales by such subcontractors directly to the Government of any item or process (including computer software) made or furnished by the subcontractor under this contract or under any follow-on production contract.

(b) The prohibition in (a) above does not preclude the Contractor from asserting rights that are otherwise authorized by law or regulation.

(c) The Contractor agrees to incorporate the substance of this clause, including this paragraph (c), in all subcontracts under this contract which exceed $100,000.

52.203-9 REQUIREMENT FOR CERTIFICATE OF PROCUREMENT INTEGRITY --

(a) Definitions. The definitions set forth in FAR 3.104-4 are hereby incorporated in this clause.

(b) The Contractor agrees that it will execute the certification set forth in paragraph (c) of this clause when requested by the Contracting Officer in connection with the execution of any modification of this contract.

(c) Certification. As required in paragraph (b) of this clause, the officer or employee responsible for the modification proposal shall execute the following certification. The certification in paragraph (c)(2) of this clause is not required for a modification which procures commercial items.

CERTIFICATE OF PROCUREMENT INTEGRITY -- MODIFICATION (NOV 1990)

(1) I, [Name of certifier] ____________________________, am the

(2) As required by subsection 27(e)(1)(B) of the Act, I further

(3) Violations or possible violations: (Continue on plain bond

______________________________________________________________

[Signature of the officer or employee responsible for the

/*/ Subsections 27(a), (b), and (d) are effective on

THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF

In accordance with the General Accounting Office's decision in Sweepster Jenkins Equipment Co. Inc., B-250480 (February, 1993), the Certificate of Procurement Integrity may only be signed by an individual who is authorized to sign the proposal/bid on behalf of the offeror.

(d) In making the certification in paragraph (2) of the certificate, the officer or employee of the competing Contractor responsible for the offer or bid, may rely upon a one-time certification from each individual required to submit a certification to the competing Contractor, supplemented by periodic training. These certifications shall be obtained at the earliest possible date after an individual required to certify begins employment or association with the contractor. If a contractor decides to rely on a certification executed prior to the suspension of section 27 (i.e., prior to December 1, 1989), the Contractor shall ensure that an individual who has so certified is notified that section 27 has been reinstated. These certifications shall be maintained by the Contractor for a period of 6 years from the date a certifying employee's employment with the company ends or, for an agency, representative, or consultant, 6 years from the date such individual ceases to act on behalf of the contractor.

(e) The certification required by paragraph (c) of this clause is a material representation of fact upon which reliance will be placed in executing this modification.

I.5 LIMITATION ON PADS TO INFLUENCE CERTAIN FEDERAL TRANSACTIONS

(a) Definitions.

"Agency," as used in this clause, means executive agency as defined in 2.101.

"Covered Federal action," as used in this clause, means any of the following Federal actions:

(a) The awarding of any Federal contract;

(b) The making of any Federal grant;

(c) The making of any Federal loan;

(d) The entering into of any cooperative agreement; and,

(e) The extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement.

"Indian tribe" and "tribal organization," as used in this clause, have the meaning provided in section 4 of the Indian Self- Determination and Education Assistance Act (25 U.S.C. 450B) and include Alaskan Natives.

"Influencing or attempting to influence," as used in this clause, means making, with the intent to influence, any communication to or appearance before an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any covered Federal action.

"Local government," as used in this clause, means a unit of government in a State and, if chartered, established, or otherwise recognized by a State for the performance of a governmental duty, including a local public authority, a special district, an intrastate district, a council of governments, a sponsor group representative organization, and any other instrumentality of a local government. "Officer or employee of an agency," as used in this clause, includes the following individuals who are employed by an agency:

(a) An individual who is appointed to a position in the Government under title 5, United States Code, including a position under a temporary appointment.

(b) A member of the uniformed services as defined in subsection 101(3), title 37, United States Code.

(c) A special Government employee, as defined in section 202, title 18, United States Code.

(d) An individual who is a member of a Federal advisory committee, as defined by the Federal Advisory Committee Act, title 5, United States Code, appendix 2.

"Person," as used in this clause, means an individual, corporation, company, association, authority, firm, partnership, society, State, and local government, regardless of whether such entity is operated for profit, or not for profit. This term excludes an Indian tribe, tribal organization, or any other Indian organization with respect to expenditures specifically permitted by other Federal law.

"Reasonable compensation," as used in this clause, means, with respect to a regularly employed officer or employee of any person, compensation that is consistent with the normal compensation for such officer or employee for work that is not furnished to, not funded by, or not furnished in cooperation with the Federal Government.

"Reasonable payment," as used in this clause, means, with respect to professional and other technical services, a payment in an amount that is consistent with the amount normally paid for such services in the private sector.

"Recipient," as used in this clause, includes the Contractor and all subcontractors. This term excludes an Indian tribe, tribal organization, or any other Indian organization with respect to expenditures specifically permitted by other Federal law.

"Regularly employed," as used in this clause, means, with respect to an officer or employee of a person requesting or receiving a Federal contract, an officer or employee who is employed by such person for at least 130 working days within 1 year immediately preceding the date of the submission that initiates agency consideration of such person for receipt of such contract. An officer or employee who is employed by such person for less than 130 working days within 1 year immediately preceding the date of the submission that initiates agency consideration of such person shall be considered to be regularly employed as soon as he or she is employed by such person for 130 working days.

"State," as used in this clause, means a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, a territory or possession of the United States, an agency or instrumentality of a State, and multi-State, regional, or interstate entity having governmental duties and powers.

(b) Prohibitions.

(1) Section 1352 of title 31, United States Code, among other things, prohibits a recipient of a Federal contract, grant, loan, or cooperative agreement from using appropriated funds to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any of the following covered Federal actions: the awarding of any Federal contract; the making of any Federal grant; the making of any Federal loan; the entering into of any cooperative agreement; or the modification of any Federal contract, grant, loan, or cooperative agreement.

(2) The Act also requires Contractors to furnish a disclosure if any funds other than Federal appropriated funds (including profit or fee received under a covered Federal transaction) have been paid, or will be paid, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with a Federal contract, grant, loan, or cooperative agreement.

(3) The prohibitions of the Act do not apply under the following conditions:

(i) Agency and legislative liaison by own employees.

(A) The prohibition on the use of appropriated funds, in subparagraph (b)(1) of this clause, does not apply in the case of a payment of reasonable compensation made to an officer or employee of a person requesting or receiving a covered Federal action if the payment is for agency and legislative liaison activities not directly related to a covered Federal action.

(B) For purposes of subdivision (b)(3)(i)(A) of this clause, providing any information specifically requested by an agency or Congress is permitted at any time.

(C) The following agency and legislative liaison activities are permitted at any time where they are not related to a specific solicitation for any covered Federal action:

(1) Discussing with an agency the qualities and characteristics (including individual demonstrations) of the person's products or services, conditions or terms of sale, and service capabilities.

(2) Technical discussions and other activities regarding the application or adaptation of the person's products or services for an agency's use.

(D) The following agency and legislative liaison activities are permitted where they are prior to formal solicitation of any covered Federal action --

(1) Providing any information not specifically requested but necessary for an agency to make an informed decision about initiation of a covered Federal action;

(2) Technical discussions regarding the preparation of an unsolicited proposal prior to its official submission; and

(3) Capability presentations by persons seeking awards from an agency pursuant to the provisions of the Small Business Act, as amended by Pub. L. 95-507, and subsequent amendments.

(E) Only those services expressly authorized by subdivision (b)(3)(i)(A) of this clause are permitted under this clause.

(ii) Professional and technical services.

(A) The prohibition on the use of appropriated funds, in subparagraph (b)(1) of this clause, does not apply in the case of --

(1) A payment of reasonable compensation made to an officer or employee of a person requesting or receiving a covered Federal action or an extension, continuation, renewal, amendment, or modification of a covered Federal action, if payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal action or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal action.

(2) Any reasonable payment to a person, other than an officer or employee of a person requesting or receiving a covered Federal action or any extension, continuation, renewal, amendment, or modification of a covered Federal action if the payment is for professional or technical services rendered directly in the preparation, submission, or negotiation of any bid, proposal, or application for that Federal action or for meeting requirements imposed by or pursuant to law as a condition for receiving that Federal action. Persons other than officers or employees of a person requesting or receiving a covered Federal action include consultants and trade associations.

(B) For purposes of subdivision (b)(3)(ii)(A) of this clause, "professional and technical services" shall be limited to advice and analysis directly applying any professional or technical discipline. The following examples are not intended to be all inclusive, to limit the application of the professional or technical exemption provided in the law, or to limit the exemption to licensed professional. For example, drafting of a legal document accompanying a bid or proposal by a lawyer is allowable. Similarly, technical advice provided by an engineer on the performance or operational capability of a piece of equipment rendered directly in the negotiation of a contract is allowable. However, communications with the intent to influence made by a professional (such as a licensed lawyer) or a technical person (such as a licensed accountant) are not allowable under this section unless they provide advice and analysis directly applying their professional or technical expertise and unless the advice or analysis is rendered directly and solely in the preparation, submission or negotiation of a covered Federal action. Thus, for example, communications with the intent to influence made by a lawyer that do not provide legal advice or analysis directly and solely related to the legal aspects of his or her client's proposal, but generally advocate one proposal over another are not allowable under this section because the lawyer is not providing professional legal services. Similarly, communications with the intent to influence made by an engineer providing an engineering analysis prior to the preparation or submission of a bid or proposal are not allowable under this section since the engineer is providing technical services but not directly in the preparation, submission or negotiation of a covered Federal action.

(C) Requirements imposed by or pursuant to law as a condition for receiving a covered Federal award include those required by law or regulation and any other requirements in the actual award documents.

(D) Only those services expressly authorized by subdivisions (b)(3)(ii)(A)(1) and (2) of this clause are permitted under this clause.

(E) The reporting requirements of FAR 3.803(a) shall not apply with respect to payments of reasonable compensation made to regularly employed officers or employees of a person.

(iii) Selling activities by independent sales representatives. The prohibition on the use of appropriated funds, in subparagraph (b)(1) of this clause, does not apply to the following sales activities before an agency by independent sales representatives, provided such activities are prior to formal solicitation by an agency and are specifically limited to the merits of the matter;

(A) Discussing with an agency (including individual demonstrations) the qualities and characteristics of the person's products or services, conditions or terms of sale, and service capabilities; and

(B) Technical discussions and other activities regarding the application or adoption of the person's products or services for an agency's use.

(c) Disclosure.

(1) The Contractor who requests or receives from an agency a Federal contract shall file with that agency a disclosure form, OMB standard form LLL, Disclosure of Lobbying Activities, if such person has made or has agreed to make any payment using non-appropriated funds (to include profits from any covered Federal action), which would be prohibited under subparagraph (b)(1) of this clause, if paid for with appropriated funds.

(2) The Contractor shall file a disclosure form at the end of each calendar quarter in which there occurs any event that materially affects the accuracy of the information contained in any disclosure form previously filed by such person under subparagraph (c)(1) of this clause. An event that materially affects the accuracy of the information reported includes --

(i) A cumulative increase of $25,000 or more in the amount paid or expected to be paid for influencing or attempting to influence a covered Federal action; or

(ii) A change in the person(s) or individual(s) influencing or attempting to influence a covered Federal action; or

(iii) A change in the officer(s), employee(s), or Member(s) contacted to influence or attempt to influence a covered Federal action.

(3) The Contractor shall require the submittal of a certification, and if required, a disclosure form by any person who requests or received any subcontract exceeding $100,000 under the Federal contract.

(4) All subcontractor disclosure forms (but not certifications) shall be forwarded from tier to tier until received by the prime Contractor. The prime Contractor shall submit all disclosures to the Contracting Officer at the end of the calendar quarter in which the disclosure form is submitted by the subcontractor. Each subcontractor certification shall be retained in the subcontract file of the awarding Contractor.

(d) Agreement. The Contractor agrees not to make any payment prohibited by this clause.

(e) Penalties.

(1) Any person who makes an expenditure prohibited under paragraph (a) of this clause or who fails to file or amend the disclosure form to be filed or amended by paragraph (b) of this clause shall be subject to civil penalties as provided for by 31 U.S.C. 1352. An imposition of a civil penalty does not prevent the Government from seeking any other remedy that may be applicable.

(2) Contractors may rely without liability on the representation made by their subcontractors in the certification and disclosure form.

(f) Cost allowability. Nothing in this clause makes allowable or reasonable any costs which would otherwise be unallowable or unreasonable. Conversely, costs made specifically unallowable by the requirements in this clause will not be made allowable under any other provision.

I.6 RESERVED

I.7 52.215-2 AUDIT AND RECORDS-NEGOTIATION (OCT 1995)

(a) As used in this clause, records includes books, documents, accounting procedures and practices, and other data, regardless of type and regardless of whether such items are in written form, in the form of computer data, or in any other form.

(b) Examination of costs. If this is a cost-reimbursement, incentive, time-and-materials, labor-hour, or price redeterminable contract, or any combination of these, the Contractor shall maintain and the Contracting Officer, or an authorized representative of the Contracting Officer, shall have the right to examine and audit all records and other evidence sufficient to reflect properly all costs claimed to have been incurred or anticipated to be incurred directly or indirectly in performance of this contract. This right of examination shall include inspection at all reasonable times of the Contractor's plants, or parts of them, engaged in performing the contract.

(c) Cost or pricing data. If the Contractor has been required to submit cost or pricing data in connection with any pricing action relating to this contract, the Contracting Officer, or an authorized representative of the Contracting Officer, in order to evaluate the accuracy, completeness, and currency of the cost or pricing data, shall have the right to examine and audit all of the Contractor's records, including computations and projections, related to --

(1) The proposal for the contract, subcontract, or modification;

(2) The discussions conducted on the proposal(s), including those related to negotiating;

(3) Pricing of the contract, subcontract, or modification; or

(4) Performance of the contract, subcontract or modification.

(d) Comptroller General -- (1) The Comptroller General of the United States, or an authorized representative, shall have access to and the right to examine any of the Contractor's directly pertinent records involving transactions related to this contract or a subcontract hereunder.

(2) This paragraph may not be construed to require the Contractor or subcontractor to create or maintain any record that the Contractor or subcontractor does not maintain in the ordinary course of business or pursuant to a provision of law.

(e) Reports. If the Contractor is required to furnish cost, funding, or performance reports, the Contracting Officer or an authorized representative of the Contracting Officer shall have the right to examine and audit the supporting records and materials, for the purpose of evaluating (1) the effectiveness of the Contractor's policies and procedures to produce data compatible with the objectives of these reports and (2) the data reported.

(f) Availability. The Contractor shall make available at its office at all reasonable times the records, materials, and other evidence described in paragraphs (a), (b), (c), (d), and (e) of this clause, for examination, audit, or reproduction, until 3 years after final payment under this contract or for any shorter period specified in Subpart 4.7, Contractor Records Retention, of the Federal Acquisition Regulation (FAR), or for any longer period required by statute or by other clauses of this contract. In addition --

(1) If this contract is completely or partially terminated, the records relating to the work terminated shall be made available for 3 years after any resulting final termination settlement; and

(2) Records relating to appeals under the Disputes clause or to litigation or the settlement of claims arising under or relating to this contract shall be made available until such appeals, litigation, or claims are finally resolved.

(g) The Contractor shall insert a clause containing all the terms of this clause, including this paragraph (a), in all subcontracts under this contract that exceed the simplified acquisition threshold in FAR Part 13, and --

(1) That are cost-reimbursement, incentive, time-and-materials, labor-hour, or price-redeterminable type or any combination of these;

(2) For which cost or pricing data are required; or

(3) That require the subcontractor to furnish reports as discussed in paragraph (e) of this clause.

The clause may be altered only as necessary to identify properly the contracting parties and the Contracting Officer under the Government prime contract.

I.8 52.215-23 PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA --

(a) This clause shall become operative only for any modification to this contract involving a pricing adjustment expected to exceed the threshold for submission of cost or pricing data at FAR 15.804- 2(a)(1), except that this clause does not apply to any modification if an exception under FAR 15.804-1 applies.

(b) If any price, including profit or fee, negotiated in connection with any modification under this clause, or any cost reimbursable under this contract, was increased by any significant amount because (1) the Contractor or a subcontractor furnished cost or pricing data that were not complete, accurate, and current as certified in its Certificate of Current Cost or Pricing Data, (2) a subcontractor or prospective subcontractor furnished the Contractor cost or pricing data that were not complete, accurate, and current as certified in the Contractor's Certificate of Current Cost or Pricing Data, or (3) any of these parties furnished data of any description that were not accurate, the price or cost shall be reduced accordingly and the contract shall be modified to reflect the reduction. This right to a price reduction is limited to that resulting from defects in data relating to modifications for which this clause becomes operative under paragraph (a) of this clause.

(c) Any reduction in the contract price under paragraph (b) of this clause due to defective data from a prospective subcontractor that was not subsequently awarded the subcontract shall be limited to the amount, plus applicable overhead and profit markup, by which (1) the actual subcontract or (2) the actual cost to the Contractor, if there was no subcontract, was less than the prospective subcontract cost estimate submitted by the Contractor; provided, that the actual subcontract price was not itself affected by defective cost or pricing data.

(d)(1) If the Contracting Officer determines under paragraph (b) of this clause that a price or cost reduction should be made, the Contractor agrees not to raise the following matters as a defense:

(i) The Contractor or subcontractor was a sole source supplier or otherwise was in a superior bargaining position and thus the price of the contract would not have been modified even if accurate, complete, and current cost or pricing data had been submitted.

(ii) The Contracting Officer should have known that the cost or pricing data in issue were defective even though the Contractor or subcontractor took no affirmative action to bring the character of the data to the attention of the Contracting Officer.

(iii) The contract was based on an agreement about the total cost of the contract and there was no agreement about the cost of each item procured under the contract.

(iv) The Contractor or subcontractor did not submit a Certificate of Current Cost or Pricing Data.

(2)(i) Except as prohibited by subdivision (d)(2)(ii) of this clause, an offset in an amount determined appropriate by the Contracting Officer based upon the facts shall be allowed against the amount of a contract price reduction if (A) The Contractor certifies to the Contracting Officer that, to the best of the Contractor's knowledge and belief, the Contractor is entitled to the offset in the amount requested; and

(B) The Contractor proves that the cost or pricing data were available before the date of agreement on the price of the contract (or price of the modification) and that the data were not submitted before such date.

(ii) An offset shall not be allowed if (A) The understated data was known by the Contractor to be understated when the Certificate of Current Cost or Pricing Data was signed; or

(B) The Government proves that the facts demonstrate that the contract price would not have increased in the amount to be offset even if the available data had been submitted before the date of agreement on price.

(e) If any reduction in the contract price under this clause reduces the price of items for which payment was made prior to the date of the modification reflecting the price reduction, the Contractor shall be liable to and shall pay the United States at the time such overpayment is repaid

(1) Simple interest on the amount of such overpayment to be computed from the date(s) of overpayment to the Contractor to the date the Government is repaid by the Contractor at the applicable underpayment rate effective for each quarter prescribed by the Secretary of the Treasury under 26 U.S.C. 6621(a)(2); and

(2) A penalty equal to the amount of the overpayment, if the Contractor or subcontractor knowingly submitted cost or pricing data which were incomplete, inaccurate, or noncurrent.

I.9 52.215-25 SUBCONTRACTOR COST OR PRICING DATA (OCT 1995)

(a) Before awarding any subcontract expected to exceed the threshold for submission of cost or pricing data at FAR 15.804- 2(a)(1), on the date of agreement on price or the date of award, whichever is later; or before pricing any subcontract modification involving a pricing adjustment expected to exceed the threshold for submission of cost or pricing data at FAR 15.804-2(a)(1), the Contractor shall require the subcontractor to submit cost or pricing data (actually or by specific identification in writing), unless an exception under FAR 15.804-1 applies.

(b) The Contractor shall require the subcontractor to certify in substantially the form prescribed in subsection 15.804-4 of the Federal Acquisition Regulation (FAR) that, to the best of its knowledge and belief, the data submitted under paragraph (a) of this clause were accurate, complete, and current as of the date of agreement on the negotiated price of the subcontract or subcontract modification.

(c) In each subcontract that exceeds the threshold for submission of cost or pricing data at FAR 15.804-2(a)(1), when entered into, the Contractor shall insert either

(1) The substance of this clause, including this paragraph (c), if paragraph (a) of this clause requires submission of cost or pricing data for the subcontract; or

(2) The substance of the clause at FAR 52.215-25, Subcontractor Cost or Pricing Data-Modifications.

I.10 52.215-26 INTEGRITY OF UNIT PRICES (OCT 1995)

(a) Any proposal submitted for the negotiation of prices for items of supplies shall distribute costs within contracts on a basis that ensures that unit prices are in proportion to the items' base cost (e.g., manufacturing or acquisition costs). Any method of distributing costs to line items that distorts unit prices shall not be used. For example, distributing costs equally among line items is not acceptable except when there is little or no variation in base cost. Nothing in this paragraph requires submission of cost or pricing data not otherwise required by law or regulation.

(b) The requirement in paragraph (a) of this clause does not apply to any contract or subcontract item of supply for which the unit price is, or is based on, an established catalog or market price for a commercial item sold in substantial quantities to the general public or to an item qualifying for a commercial item exception to cost or pricing data. A price is based on an established catalog or market price only if the item being purchased is sufficiently similar to the catalog or market priced commercial item to ensure that any difference in prices can be identified and justified without resort to cost analysis.

(c) The Offeror/Contractor shall also identify those supplies which it will not manufacture or to which it will not contribute significant value when requested by the contracting Officer. The information shall not be required for commercial items sold in substantial quantities to the general public when the price is, or is based on, established catalog or market prices.

(d) The Contractor shall insert the substance of this clause, less paragraph (c), in all subcontracts.

I.11 52.217-8 OPTION TO EXTEND SERVICES (AUG 1989)

The Government may require continued performance of any services within the limits and at the rates specified in the contract. These rates may be adjusted only as a result of revisions to prevailing labor rates provided by the Secretary of Labor. The option provision may be exercised more than once, but the total extension of performance hereunder shall not exceed 6 months. The Contracting Officer may exercise the option by written notice to the Contractor within the period specified in the schedule.

I.12 52.217-9 OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 1989)

(a) The Government may extend the term of this contract by written notice to the Contractor within THIRTY (30) DAYS OF CONTRACT EXPIRATION; provided, that the Government shall give the Contractor a preliminary written notice of its intent to extend at least 60 days before the contract expires. The preliminary notice does not commit the Government to an extension.

(b) If the Government exercises this option, the extended contract shall be considered to include this option provision.

(c) The total duration of this contract, including the exercise of any options under this clause, shall not exceed TWENTY-FOUR (24) MONTHS.

I.13 52.219-8 UTILIZATION OF SMALL, SMALL DISADVANTAGED AND WOMEN-

(a) It is the policy of the United States that small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals and small business concerns owned and controlled by women shall have the maximum practicable opportunity to participate in performing contracts let by any Federal agency, including contracts and subcontracts for subsystems, assemblies, components, and related services for major systems. It is further the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business concerns, small business concerns owned and controlled by socially and economically disadvantaged individuals and small business concerns owned and controlled by women.

(b) The Contractor hereby agrees to carry out this policy in the awarding of subcontracts to the fullest extent consistent with efficient contract performance. The Contractor further agrees to cooperate in any studies or surveys as may be conducted by the United States Small Business Administration or the awarding agency of the United States as may be necessary to determine the extent of the Contractor's compliance with this clause.

(c) As used in this contract, the term "small business concern" shall mean a small business as defined pursuant to section 3 of the Small Business Act and relevant regulations promulgated pursuant thereto. The term "small business concern owned and controlled by socially and economically disadvantaged individuals" shall mean a small business concern (1) which is at least 51 percent unconditionally owned by one or more socially and economically disadvantaged individuals; or, in the case of any publicly owned business, at least 51 percent of the stock of which is unconditionally owned by one or more socially and economically disadvantaged individuals; and (2) whose management and daily business operations are controlled by one or more of such individuals. This term also means a small business concern that is at least 51 percent unconditionally owned by an economically disadvantaged Indian tribe or Native Hawaiian Organization, or a publicly owned business having at least 51 percent of its stock unconditionally owned by one of these entities which has its management and daily business controlled by members of an economically disadvantaged Indian tribe or Native Hawaiian Organization, and which meets the requirements of 13 CFR 124. The Contractor shall presume that socially and economically disadvantaged individuals include Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian Americans, and other minorities, or any other individual found to be disadvantaged by the Administration pursuant to section 8(a) of the Small Business Act. The Contractor shall presume that socially and economically disadvantaged entities also include Indian Tribes and Native Hawaiian Organizations.

(d) The term "small business concern owned and controlled by women" shall mean a small business concern (i) which is at least 51 percent owned by one or more women, or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women, and (ii) whose management and daily business operations are controlled by one or more women; and

(e) Contractors acting in good faith may rely on written representations by their subcontractors regarding their status as a small business concern, a small business concern owned and controlled by socially and economically disadvantaged individuals or a small business concern owned and controlled by women.

I.14 52.219-9 SMALL, SMALL DISADVANTAGED AND WOMEN-OWNED SMALL

(a) This clause does not apply to small business concerns.

(b) "Commercial product," as used in this clause, means a product in regular production that is sold in substantial quantities to the general public and/or industry at established catalog or market prices. It also means a product which, in the opinion of the Contracting Officer, differs only insignificantly from the Contractor's commercial product.

"Subcontract," as used in this clause, means any agreement (other than one involving an employer-employee relationship) entered into by a Federal Government prime Contractor or subcontractor calling for supplies or services required for performance of the contract or subcontract.

(c) The offeror, upon request by the Contracting Officer, shall submit and negotiate a subcontracting plan, where applicable, which separately addresses subcontracting with small business concerns, with small disadvantaged business concerns and with women-owned small business concerns. If the offeror is submitting an individual contract plan, the plan must separately address subcontracting with small business concerns, small disadvantaged business concerns, and women-owned small business concerns with a separate part for the basic contract and separate parts for each option (if any). The plan shall be included in and made a part of the resultant contract. The subcontracting plan shall be negotiated within the time specified by the Contracting Officer. Failure to submit and negotiate the subcontracting plan shall make the offeror ineligible for award of a contract.

(d) The offeror's subcontracting plan shall include the following:

(1) Goals, expressed in terms of percentages of total planned subcontracting dollars, for the use of small business concerns, small disadvantaged business concerns and women-owned small business concerns as subcontractors. The offeror shall include all subcontracts that contribute to contract performance, and may include a proportionate share of products and services that are normally allocated as indirect costs.

(2) A statement of --

(i) Total dollars planned to be subcontracted;

(ii) Total dollars planned to be subcontracted to small business concerns;

(iii) Total dollars planned to be subcontracted to small disadvantaged business concerns; and

(iv) Total dollars planned to be subcontracted to women-owned small business concerns.

(3) A description of the principal types of supplies and services to be subcontracted, and an identification of the types planned for subcontracting to (i) small business concerns, (ii) small disadvantaged business concerns and (iii) women-owned small business concerns.

(4) A description of the method used to develop the subcontracting goals in paragraph (d)(1) of this clause.

(5) A description of the method used to identify potential sources for solicitation purposes (e.g., existing company source lists, the Procurement Automated Source System (PASS) of the Small Business Administration, the National Minority Purchasing Council Vendor Information Service, the Research and Information Division of the Minority Business Development Agency in the Department of Commerce, or small, small disadvantaged and women-owned small business concerns trade associations). A firm may rely on the information contained in PASS as an accurate representation of a concern's size and ownership characteristics for purposes of maintaining a small business source list. A firm may rely on PASS as its small business source list. Use of the PASS as its source list does not relieve a firm of its responsibilities (e.g., outreach, assistance, counseling, publicizing subcontracting opportunities) in this clause.

(6) A statement as to whether or not the offeror included indirect costs in establishing subcontracting goals, and a description of the method used to determine the proportionate share of indirect costs to be incurred with (i) small business concerns, (ii) small disadvantaged business concerns, and (iii) women-owned small business concerns.

(7) The name of the individual employed by the offeror who will administer the offeror's subcontracting program, and a description of the duties of the individual.

(8) A description of the efforts the offeror will make to assure that small, small disadvantaged and women-owned small business concerns have an equitable opportunity to compete for subcontracts.

(9) Assurances that the offeror will include the clause in this contract entitled "Utilization of Small, Small Disadvantaged and women-Owned Small Business Concerns" in all subcontracts that offer further subcontracting opportunities, and that the offeror will require all subcontractors (except small business concerns) who receive subcontracts in excess of $500,000 ($1,000,000 for construction of any public facility) to adopt a plan similar to the plan agreed to by the offeror.

(10) Assurances that the offeror will (i) cooperate in any studies or surveys as may be required, (ii) submit periodic reports in order to allow the Government to determine the extent of compliance by the offeror with the subcontracting plan, (iii) submit standard Form (SF) 294, Subcontracting Report for individual Contracts, and/or SF 295, Summary Subcontract Report, in accordance with the instructions on the forms, and (iv) ensure that its subcontractors agree to submit Standard Forms 294 and 295.

(11) A recitation of the types of records the offeror will maintain to demonstrate procedures that have been adopted to comply with the requirements and goals in the plan, including establishing source lists; and a description of its efforts to locate small, small disadvantaged and women-owned small business concerns and award subcontracts to them. The records shall include at least the following (on a plant-wide or company-wide basis, unless otherwise indicated)

(i) Source lists (e.g., PAS/S), guides, and other data that identify small, small disadvantaged and women-owned small business concerns.

(ii) Organizations contacted in an attempt to locate sources that are small, small disadvantaged or women-owned small business concerns.

(iii) Records on each subcontract solicitation resulting in an award of more than $100,000, indicating (A) whether small business concerns were solicited and if not, why not, (B) whether small disadvantaged business concerns were solicited and if not, why not, (C) whether women-owned small business concerns were solicited and if not, why not, and (D) if applicable, the reason award was not made to a small business concern.

(iv) Records of any outreach efforts to contact (A) trade associations, (B) business development organizations, and (C) conferences and trade fairs to locate small, small disadvantaged and women-owned small business sources.

(v) Records of internal guidance and encouragement provided to buyers through (A) workshops, seminars, training, etc., and (B) monitoring performance to evaluate compliance with the program's requirements.

(vi) On a contract-by-contract basis, records to support award data submitted by the offeror to the Government, including the name, address, and business size of each subcontractor. Contractors having company or division-wide annual plans need not comply with this requirement.

(e) In order to effectively implement this plan to the extent consistent with efficient contract performance, the Contractor shall perform the following functions:

(1) Assist small, small disadvantaged and women-owned small business concerns by arranging solicitations, time for the preparation of bids, quantities, specifications, and delivery schedules so as to facilitate the participation by such concerns. Where the contractor's lists of potential small, small disadvantaged and women-owned small business subcontractors are excessively long, reasonable effort shall be made to give all such small business concerns an opportunity to compete over a period of time.

(2) Provide adequate and timely consideration of the potentialities of small, small disadvantaged and women-owned small business concerns in all "make-or-buy" decisions.

(3) Counsel and discuss subcontracting opportunities with representatives of small, small disadvantaged and women-owned small business firms.

(4) Provide notice to subcontractors concerning penalties and remedies for misrepresentations of business status as small, small disadvantaged or women-owned small business for the purpose of obtaining a subcontract that is to be included as part or all of a goal contained in the Contractor's subcontracting plan.

(f) A master subcontracting plan on a plant or division-wide basis which contains all the elements required by (d) above, except goals, may be incorporated by reference as a part of the subcontracting plan required of the offeror by this clause; provided, (1) the master plan has been approved, (2) the offeror provides copies of the approved master plan and evidence of its approval to the Contracting Officer, and (3) goals and any deviations from the master plan deemed necessary by the Contracting Officer to satisfy the requirements of this contract are set forth in the individual subcontracting plan.

(g)(1) If a commercial product is offered, the subcontracting plan required by this clause may relate to the offeror's production generally, for both commercial and noncommercial products, rather than solely to the Government contract. In these cases, the offeror shall, with the concurrence of the Contracting Officer, submit one company-wide or division-wide annual plan.

(2) The annual plan shall be reviewed for approval by the agency awarding the offeror its first prime contract requiring a subcontracting plan during the fiscal year, or by an agency satisfactory to the Contracting Officer.

(3) The approved plan shall remain in effect during the offeror's fiscal year for all of the of feror's commercial products.

PUBLIC VOUCHER FOR PURCHASES AND

[Form omitted]

(h) Prior compliance of the offeror with other such subcontracting plans under previous contracts will be considered by the Contracting Officer in determining the responsibility of the offeror for award of the contract.

(i) The failure of the Contractor or subcontractor to comply in good faith with (1) the clause of this contract entitled "Utilization Of Small, Small Disadvantaged and Women-Owned Small Business Concerns," or (2) an approved plan required by this clause, shall be a material breach of the contract.

I.15 52.219-16 LIQUIDATED DAMAGES -- SUBCONTRACTING PLAN (OCT 1995)

(a) Failure to make a good faith effort to comply with the subcontracting plan, as used in this clause, means a willful or intentional failure to perform in accordance with the requirements of the subcontracting plan approved under the clause in this contract entitled "Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan," or willful or intentional action to frustrate the plan.

(b) If, at contract completion, or in the case of a commercial product plan, at the close of the fiscal year for which the plan is applicable, the Contractor has failed to meet its subcontracting goals and the Contracting Officer decides in accordance with paragraph (c) of this clause that the Contractor failed to make a good faith effort to comply with its subcontracting plan, established in accordance with the clause in this contract entitled "Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan," the Contractor shall pay the Government liquidated damages in an amount stated. The amount of probable damages attributable to the Contractor's failure to comply, shall be an amount equal to the actual dollar amount by which the Contractor failed to achieve each subcontract goal or, in the case of a commercial products plan, that portion of the dollar amount allocable to Government contracts by which the Contractor failed to achieve each subcontract goal.

(c) Before the Contracting Officer makes a final decision that the Contractor has failed to make such good faith effort, the Contracting Officer shall give the Contractor written notice specifying the failure and permitting the Contractor to demonstrate what good faith efforts have been made. Failure to respond to the notice may be taken as an admission that no valid explanation exists. If, after consideration of all the pertinent data, the Contracting Officer finds that the Contractor failed to make a good faith effort to comply with the subcontracting plan, the Contracting Officer shall issue a final decision to that effect and require that the Contractor pay the Government liquidated damages as provided in paragraph (b) of this clause.

(d) With respect to commercial product plans; i.e., company-wide or division-wide subcontracting plans approved under paragraph (g) of the clause in this contract entitled "Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan," the Contracting Officer of the agency that originally approved the plan will exercise the functions of the Contracting Officer under this clause on behalf of all agencies that awarded contracts covered by that commercial product plan.

(e) The Contractor shall have the right of appeal, under the clause in this contract entitled, Disputes, from any final decision of the Contracting Officer.

(f) Liquidated damages shall be in addition to any other remedies that the Government may have.

I.16 52.233-1 DISPUTES (OCT 1995)

(a) This contract is subject to the Contract Disputes Act of 1978, as amended (41 U.S.C. 601-613).

(b) Except as provided in the Act, all disputes arising under or relating to this contract shall be resolved under this clause.

(c) "Claim," as used in this clause, means a written demand or written assertion by one of the contracting parties seeking, as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of contract terms, or other relief arising under or relating to this contract. A claim arising under a contract, unlike a claim relating to that contract, is a claim that can be resolved under a contract clause that provides for the relief sought by the claimant. However, a written demand or written assertion by the Contractor seeking the payment of money exceeding $100,000 is not a claim under the Act until certified as required by subparagraph (d)(2) of this clause. A voucher, invoice, or other routine request for payment that is not in dispute when submitted is not a claim under the Act. The submission may be converted to a claim under the Act, by complying with the submission and certification requirements of this clause, if it is disputed either as to liability or amount or is not acted upon in a reasonable time.

(d)(1) A claim by the Contractor shall be made in writing and, unless otherwise stated in this contract, submitted within 6 years after accrual of the claim to the Contracting Officer for a written decision. A claim by the Government against the Contractor shall be subject to a written decision by the Contracting Officer.

(2)(i) Contractors shall provide the certification specified in subparagraph (d)(2)(iii) of this clause when submitting any claim --

(A) Exceeding $100,000; or

(B) Regardless of the amount claimed when using --

(1) Arbitration conducted pursuant to 5 U.S.C. 575-580; or

(2) Any other alternative means of dispute resolution (ADR) techniques that the agency elects to handle in accordance with the Administrative Dispute Resolution Act (ADRA).

(ii) The certification requirement does not apply to issues in controversy that have not been submitted as all or part of a claim.

(iii) The certification shall state as follows:

"I certify that the claim is made in good faith; that the supporting data are accurate and complete to the best of my knowledge and belief; that the amount requested accurately reflects the contract adjustment for which the Contractor believes the Government is liable; and that I am duly authorized to certify the claim on behalf of the Contractor."

(3) The certification may be executed by any person duly authorized to bind the Contractor with respect to the claim.

(e) For Contractor claims of $100,000 or less, the Contracting Officer must, if requested in writing by the Contractor, render a decision within 60 days of the request. For Contractor-certified claims over $100,000, the Contracting Officer must, within 60 days, decide the claim or notify the Contractor of the date by which the decision will be made.

(f) The Contracting Officer's decision shall be final unless the Contractor appeals or files a suit as provided in the Act.

(g) If the claim by the Contractor is submitted to the Contracting Officer or a claim by the Government is presented to the Contractor, the parties, by mutual consent, may agree to use ADR. If the Contractor refuses an offer for alternative disputes resolution, the Contractor shall inform the Contracting Officer, in writing, of the Contractor's specific reasons for rejecting the request. When using arbitration conducted pursuant to 5 U.S.C. 575-580, or when using any other ADR technique that the agency elects to handle in accordance with the ADRA, any claim, regardless of amount, shall be accompanied by the certification described in subparagraph (d)(2)(iii) of this clause, and executed in accordance with subparagraph (d)(3) of this clause.

(h) The Government shall pay interest on the amount found due and unpaid from (1) the date the Contracting Officer receives the claim (certified, if required); or (2) the date that payment otherwise would be due, if that date is later, until the date of payment. With regard to claims having defective certifications, as defined in (FAR) 48 CFR 33.201, interest shall be paid from the date that the Contracting Officer initially receives the claim. Simple interest on claims shall be paid at the rate, fixed by the Secretary of the Treasury as provided in the Act, which is applicable to the period during which the Contracting Officer receives the claim and then at the rate applicable for each 6-month period as fixed by the Treasury Secretary during the pendency of the claim.

(i) The Contractor shall proceed diligently with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under the contract, and comply with any decision of the Contracting Officer.

I.17 52.233-3 PROTEST AFTER AWARD (OCT 1995)

(a) Upon receipt of a notice of protest (as defined in FAR 33.101) or a determination that a protest is likely (see FAR 33.102(d)), the Contracting Officer may, by written order to the Contractor, direct the Contractor to stop performance of the work called for by this contract. The order shall be specifically identified as a stop-work order issued under this clause. Upon receipt of the order, the Contractor shall immediately comply with its terms and take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the order during the period of work stoppage. Upon receipt of the final decision in the protest, the Contracting Officer shall either --

(1) Cancel the stop-work order; or

(2) Terminate the work covered by the order as provided in the Default, or the Termination for Convenience of the Government, clause of this contract.

(b) If a stop-work order issued under this clause is canceled either before or after a final decision in the protest, the Contractor shall resume work. The Contracting Officer shall make an equitable adjustment in the delivery schedule or contract price, or both, and the contract shall be modified, in writing, accordingly, if --

(1) The stop-work order results in an increase in the time required for, or in the Contractor's cost properly allocable to, the performance of any part of this contract; and

(2) The Contractor asserts its right to an adjustment within 30 days after the end of the period of work stoppage; provided, that if the Contracting Officer decides the facts justify the action, the Contracting Officer may receive and act upon a proposal at any time before final payment under this contract.

(c) If a stop-work order is not canceled and the work covered by the order is terminated for the convenience of the Government, the Contracting Officer shall allow reasonable costs resulting from the stop-work order in arriving at the termination settlement.

(d) If a stop-work order is not canceled and the work covered by the order is terminated for default, the Contracting Officer shall allow, by equitable adjustment or otherwise, reasonable costs resulting from the stop-work order.

(e) The Government's rights to terminate this contract at any time are not affected by action taken under this clause.

(f) If, as the result of the Contractor's intentional or negligent misstatement, misrepresentation, or mis-certification, a protest related to this contract is sustained, and the Government pays costs, as provided in FAR 33.102(b)(2), 33.104(h)(1), or 33.105(g)(1), the Government may require the Contractor to reimburse the Government the amount of such costs. In addition to any other remedy available, and pursuant to the requirements of Subpart 32.6, the Government may collect this debt by offsetting the amount against any payment due the Contractor under any contract between the Contractor and the Government.

I.18 52.252-6 AUTHORIZED DEVIATIONS IN CLAUSES (APR 1984)

(a) The use in this solicitation or contract of any Federal Acquisition Regulation (48 CFR Chapter 1) clause with an authorized deviation is indicated by the addition of "(DEVIATION)" after the date of the clause.

(b) The use in this solicitation or contract of any Department of Treasury clause with an authorized deviation is indicated by the addition of "(DEVIATION)" after the name of the regulation.

I.19 ADVERTISING OF AWARD

The Contractor agrees not to refer to awards in commercial advertising in such a manner as to state or imply that the product or service provided is endorsed or preferred by the Federal Government or is considered by the Government to be superior to other products or services.

I.20 NEWS RELEASES

Under no circumstances shall the Contractor, or anyone acting on behalf of the Contractor, refer to the equipment or services furnished pursuant to the provisions of this contract in any news release or commercial advertising, or in connection with any news release or commercial advertising, without first obtaining explicit written consent to do so from the Contracting Officer.

Should any reference to such equipment or services appear in any news release or commercial advertising issued by or on behalf of the Contractor without such consent first being so obtained, the Government shall consider institution of all remedies available under the provisions of this contract.

    PART III -- LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS

                  SECTION J -- LIST OF ATTACHMENTS

J.1 LIST OF ATTACHMENTS

ATTACHMENT                    TITLE                            NO. OF

     2       SAMPLE SUBCONTRACTING PLAN **                      10

     3       IRS NON-DISCLOSURE AGREEMENT                        2

     4       POSITION DESCRIPTIONS/QUALIFICATIONS                1

J.2 LIST OF SOLICITATION ATTACHMENTS

ATTACHMENT                    TITLE                            NO. OF

     A1      VALIDATION OF OFFEROR'S DEMONSTRATED

     B       PROPOSAL MAILING LABELS                             1

     C       SAMPLE CALCULATION OF PERFORMANCE

CONTRACT ATTACHMENT 1

[Form omitted]

ATTACHMENT 2

DEPARTMENT OF THE TREASURY

The following outline meets the minimum requirements of Public Law 95-507 and the Federal Acquisition Regulation (FAR) Subparts 19.7 and 20.3. It is intended to be a guideline. It is not intended to replace any existing corporate plan which is more extensive. If assistance if needed to locate small business sources, contact the Internal Revenue Service Small Business Specialist at (202) 283-1350. Please note that the Internal Revenue Service has subcontracting goals of 41% for small business, 10% for small disadvantaged business, and 5% for women-owned business for fiscal year 1995.

Identification Data:

1. TYPE OF PLAN: (Check only one).

____ INDIVIDUAL PLAN:In this type of plan all elements are developed

____ MASTER PLAN: In this type of plan, goals are developed for this

____ COMMERCIAL PRODUCTS PLAN: This type of plan is used when the

2. GOALS:

FAR 19.704(a)(1) requires separate dollar and percentage goals for using small business concerns, and small disadvantaged business concerns as subcontractors for the base year and each option year. Goals for subcontracts with small women-owned business concerns are encouraged.

     A. Estimated dollar value of all planned subcontracting, i.e.,

        BASE        1ST OPTION        2ND OPTION        3RD OPTION

        4TH OPTION  5TH OPTION

     B. Estimated dollar value* and percentage of planned

        BASE                  1ST OPTION               2ND OPTION

        3RD OPTION            4Th OPTION

     C. Estimated dollar value and percentage of planned

        BASE                  1ST OPTION               2ND OPTION

        3RD OPTION            4Th OPTION

     D. Estimated dollar value and percentage of planned

        BASE                  1ST OPTION               2ND OPTION

        3RD OPTION            4Th OPTION

     E. Products and/or services to be subcontracted under this

                                      BUSINESS CATEGORY OR SIZE

(Attach additional sheets if necessary.)

     F. Explain the methods used to develop the subcontracting goals

     G. Indirect and overhead costs ______ HAVE BEEN

        included in the dollar and percentage subcontracting goals

     H. If indirect and overhead costs HAVE BEEN included, explain

3. PROGRAM ADMINISTRATOR:

FAR 19.704(a)(2) requires information about the company employee who

Name: _____________________________________________________________

Duties: Does the individual named above perform the following?

     A. Developing and promoting company/division policy statements

     B. Developing and maintaining bidders' lists of small, small

     C. Ensuring periodic rotation of potential subcontractors on

     D. Assuring that small, small disadvantaged, and small women-

     E. Ensuring that subcontract procurement "packages" are designed

        _________ YES                        _________ NO

     F. Reviewing subcontract solicitations to remove statements,

        _________ YES                        _________ NO

     G. Ensuring that the subcontract bid proposal review board

     H. Overseeing the establishment and maintenance of contract

     I. Attending or arranging for the attendance of company

     J. Directly or indirectly counseling small, small disadvantaged,

     K. Providing notice to subcontractors concerning penalties for

L. Conducting or arranging training for purchasing personnel

         _____ YES       _____ NO

M. Developing and maintaining an incentive program for buyers which

         _____ YES       _____ NO

N. Monitoring the company's performance and making any adjustments

         _____ YES       _____ NO

O. Preparing and submitting timely reports

         _____ YES       _____ NO

P. Coordinating the company's activities during compliance

         _____ YES       _____ NO

Q. Encouraging subcontracting in Labor Surplus Areas when

          _____ YES      _____ NO

4. EQUITABLE OPPORTUNITY

FAR 19.704(a)(3) requires a description of the efforts your company will make to ensure that small, small disadvantaged, and women-owned business concerns will have an equitable opportunity to compete for subcontracts. (Check all that apply.)

A. Outreach efforts to obtain sources:

Contacting minority and small business trade associations

B. Internal efforts to guide and encourage purchasing personnel:

Presenting workshops, seminars and training programs

C. Additional efforts: (Please describe.)

5. CLAUSE INCLUSION AND FLOW DOWN

FAR 19.704(a)(4) requires that your company include FAR 52.219- 8, "Utilization of Small Business Concerns and Small Disadvantaged Business Concerns", in all subcontracts that offer further subcontracting opportunities. Your company must require all subcontractors, except small business concerns, that receive subcontracts in excess of $500,000 ($1,000,000 for construction) to adopt and comply with a plan similar to the plan required by FAR 52.219-9, "Small Business and Small Disadvantaged Business Subcontracting Plan."

Your company agrees that the clause will be included and that the plans will be reviewed against the minimum requirements for such plans. The acceptability of percentage goals for small, small disadvantaged, and small women-owned business concerns must be determined on a case-by-case basis depending on the supplies and services involved, the availability of potential small, small disadvantaged, and small women-owned subcontractors and prior experience. Once the plans are negotiated, approved, and implemented, the plans must be monitored through the submission of periodic reports, including Standard Form (SF) 294 and SF 295 reports.

6. REPORTING AND COOPERATION

FAR 19.704(a)(5) requires that your company (1) cooperate in any studies or surveys as may be required, (2) submit periodic reports which show compliance with the subcontracting plan; (3) submit Standard Form (SF) 294, "Subcontracting Reports for Individual Contracts," and SF 295, "Summary Subcontract Report," in accordance with the instructions on the forms; and (4) ensure that subcontractors agree to submit SF 294 and SF 295.

Both the Department and the respective Treasury bureau must receive the report(s) within 30 days after the close of each calendar period. That is:

Calendar Period       Report Due     Date Due     Send Report To

10/01--03/31             SP 294        04/30      contract

04/01--09/30             SP 294         10/30     contract

10/01--09/30             SP 295         10/30     Assistant Director,

                          FOOTNOTE TO TABLE

     /*/ SDBU address is:

     Department of the Treasury

                      END OF FOOTNOTE TO TABLE

7. RECORDKEEPING

FAR 19.704(a)(6) requires a list of the types of records your company will maintain to demonstrate the procedures adopted to comply with the requirements and goals in the subcontracting plan. (Check all that apply.)

A. Small, small disadvantaged, and women-owned business concern

_____ YES _____ NO

B. Organizations contacted for small, small disadvantaged, and

_____ YES _____ NO

C. On a contract-by-contract basis, records on all subcontract

_____ YES _____ NO

D. Records to support other outreach efforts, e.g., contacts with

_____ YES _____ NO

E. Records to support internal activities to (1) guide and encourage

_____ YES _____ NO

F. On a contract-by-contract basis, records to support subcontract

_____ YES _____ NO

G. Other records to support your compliance with the subcontracting

8. TIMELY PAYMENTS TO SUBCONTRACTORS

FAR 19.702 requires your company to establish and use procedures to ensure the timely payment of amounts due pursuant to the terms of your subcontracts with small business concerns and small disadvantaged business concerns.

Your company has established and uses such procedures:

_____ YES _____ NO

9. DESCRIPTION OF GOOD FAITH EFFORT

Maximum practicable utilization of small and small disadvantaged business concerns as subcontractors in Government contracts is a matter of national interest with both social and economic benefits. When a contractor fails to make a good faith effort to comply with a subcontracting plan, these objectives are not achieved, and 15 U.S.C. 637(d)(4)(F) directs that liquidated damages shall be paid by the contractor. In order to demonstrate your compliance with a good faith effort to achieve the small and small disadvantaged business subcontracting goals, outline the steps your company plans to take. These steps will be negotiated with the contracting officer prior to approval of the plan.

_____________________________________________________________________

10. SIGNATURES REQUIRED

This subcontracting plan was SUBMITTED by:

Signature: __________________________________________________________

Typed Name: _________________________________________________________

Title: ______________________________________________________________

This subcontracting plan was REVIEWED by:

Signature: __________________________________________________________

Typed Name: _________________________________________________________

Title: Small Business Specialist

This subcontracting plan was REVIEWED by:

Signature: __________________________________________________________

Typed Name: __________________________________________________________

Title: Small Business Administration Representative

This subcontracting plan was APPROVED by:

Signature: __________________________________________________________

Typed Name: _________________________________________________________

Title: Assistant Director for Small and

This subcontracting plan was ACCEPTED by:

Signature: __________________________________________________________

Typed Name: _________________________________________________________

ATTACHMENT 3

CONSENT TO DISCLOSURE OF

I am signing this consent to authorize the Internal Revenue Service (IRS) to release information about me which would otherwise be confidential. The information I authorize the IRS to disclose is whether or not I have passed a tax check. This information may be disclosed to:

COMPANY NAME: _________________________

ADDRESS: _________________________

The IRS will reach its conclusion on whether or not I have passed the tax check by evaluating a number of factors. These factors include, generally:

(1) whether I have timely filed income tax returns (Form 1040)

(2) whether I have fully paid all of my income tax

(3) whether a criminal investigation transaction code has been

To help the IRS find my tax records, I am voluntarily providing the following information.

MY NAME:  _________________________________ MY SSN: ________________

CURRENT ADDRESS: ____________________________________________________

TELEPHONE NUMBER: (HOME) ___________________ (WORK) _________________

IF MARRIED AND FILED A JOINT RETURN:

NAME OF SPOUSE: __________________________ SPOUSE'S SSN: ____________

NAME AND ADDRESSES SHOWN ON LAST THREE RETURNS (IF DIFFERENT FROM

YEAR                NAME(S)             ADDRESS

_____________________________________________________________________

If a return for any of the last three years was not filed, please

DATE: ____________ SIGNATURE: _______________________________________

Treasury regulations require this consent be received by the IRS

PRIVACY ACT STATEMENT

General

This statement is provided pursuant to Public Law 93-579 (Privacy Act

Authority

We ask for this information to carry out the internal revenue laws of

Purposes and Uses

This information will be used as a part of the selection and

Effects of Nondisclosure

Your providing the requested information is voluntary, however, the

ATTACHMENT 4

POSITION DESCRIPTIONS/QUALIFICATIONS

There may be cases where a proposed individual is deficient in some way in meeting the qualifications but has compensating factors which make that individual the "right person for the job". In such a case, the Offeror must clearly state the deficiency and demonstrate the compensating factors.

PROJECT MANAGER AND ALTERNATE PROJECT MANAGER.

The Project Manager and the Assistant Project Manager shall have a Bachelor's degree, demonstrated competency in reading, writing, and speaking the English language; experience with work similar in nature to that required by the RFP, and experience in successfully managing large and complex contracts or work projects comparable in size, scope, and work to that required by the RFP.

In addition, the Project Manager and Alternate Project Manager shall have demonstrated experience in dealing with the requirements of the Fair Debt Collection Practices Act.

SITE SUPERVISOR AND ALTERNATE SITE SUPERVISOR.

The Site Supervisor and Alternate Site Supervisor shall have a Bachelor's degree, demonstrated competency in reading, writing, and speaking the English language; experience with work similar in nature to that required by the RFP, and experience in successfully supervising groups of people comparable in size, scope, with duties similar to those required by the RFP.

In addition, the Site Supervisor and Alternate Site Supervisor shall have demonstrated experience in dealing with the requirements of the Fair Debt Collection Practices Act.

SOLICITATION ATTACHMENT A

SAMPLE INDIVIDUAL RESUME FORMAT

NAME:

PROPOSED POSITION:

AREA OF ACTIVITY:

EDUCATION:

1. Colleges or high schools attended with dates

a. Degrees received or semester hours completed

b. Major subjects

2. Technical schools attended with dates

a. Major course

b. Certificate received

c. Appropriate number of total class hours

3. Special training, e.g., short courses; in-service courses; correspondence; etc.

EXPERIENCE: (In reverse chronological order)

1. Company and title of position

2. Work location and telephone number

3. Start and ending dates (YY/MM)

4. Provide concise descriptions of experience and capabilities. Include specific examples of the level of responsibility of the individual (in his/her technical speciality), supervision given, time in years and months in the position, the number and type of personnel supervised and measures of the individual's success.

5. Detailed statement of accomplishments, honors, and/or special recognition received, including reasons

6. Complete list of reports credited to the individual and the degree or participation in the preparation of the reports

REFERENCES: Current/correct name and telephone number.

NOTE: Other resume formats may be used as long as the requested information on this sheet is contained therein.

(RESUMES FOR THIS RFP ARE NOT TO EXCEED 3 PAGES FOR KEY PERSONNEL

VALIDATION OF OFFEROR'S DEMONSTRATED EXPERIENCE

Offeror: ___________________________________________________________

Contract Number and Title: _________________________________________

Name of Interviewee: _______________________________________________

Phone Number: ______________________________________________________

Title: _____________________________________________________________

Organization: ______________________________________________________

Role in Relation to Contract: ______________________________________

INTRODUCTION: I'm calling regarding your contract with __________

1. When was support provided (or how long has support been provided) through the subject contract?

2. What type of contract was (or is) it? (Fixed Price or Cost Plus (Incentive Fee, Fixed Fee, Award Fee . . . ?))

3. What types of services were (or are) provided by the Contractor?

4. In general, what types of skills and experience levels of the Contractor personnel were provided?

5. Did the Contractor provide:

5a. documentation?

5b. other ADP related products (such as software)?

5c. FIP support services such as reviews, analyses, and recommendations?

6. What was (or is) the dollar amount of the contract?

____________________________________________________________________

                      SOLICITATION ATTACHMENT B

    MAILING LABEL -- USE THIS LABEL FOR MAILING OR HAND-DELIVERY

FROM:

MAIL TO:

     INTERNAL REVENUE SERVICE

     RFP NUMBER: IRS-96-0014

     DUE: 3:30 P.M.

     DATE: APRIL 5, 1996

                      NOTICE TO BID/MAIL ROOM:

NOTICE TO COURIER:

It may not be possible to deliver this package to Room 700 outside the hours of 8:30 A.M. - 4:00 P.M., Monday - Friday. Delivery to any other location, including the IRS central mail delivery area, may result in the late receipt of this package in Room 700 and is strongly discouraged.

                      SOLICITATION ATTACHMENT C

                        SAMPLE CALCULATION OF

     This example of a calculation for line item 0002 in Section B is

Price Proposed for line item 0001  =  $10

Estimated quantities = 8,300

Contacts/Full Pay                          10% X 8,300 =      830

Contacts/Extensions to Full pay            20% X 8,300 =    1,660

                 Extension to Full Pay Maximum           $ 99,600

Contacts/Contractor Completed IAs          20% X 8,300 =    1,660

Contacts/IRS Assisted IAs                  25% X 8,300 =    2,075

              TOTAL PERFORMANCE PLAN LINE ITEM           $327,850

PART IV -- REPRESENTATIONS AND INSTRUCTIONS

SECTION K -- REPRESENTATIONS, CERTIFICATIONS, AND

K.1 52.252-1 SOLICITATION PROVISIONS INCORPORATED BY REFERENCE (JUN

This solicitation incorporates one or more solicitation provisions by reference, with the same force and effect as if they were given in full text. Upon request, the contracting officer will make their full text available.

I. FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) PROVISIONS

NUMBER                   TITLE                         DATE

52.222-21    CERTIFICATION OF NONSEGREGATED            APR 1984

52.223-5     CERTIFICATION REGARDING A                 JUL 1995

K.2 52.203-2 CERTIFICATE OF INDEPENDENT PRICE DETERMINATION (APR

(a) The offeror certifies that --

(1) The prices in this offer have been arrived at independently, without, for the purpose of restricting competition, any consultation, communication, or agreement with any other offeror or competitor relating to (i) those prices, (ii) the intention to submit an offer, or (iii) the methods or factors used to calculate the prices offered;

(2) The prices in this offer have not been and will not be knowingly disclosed by the offeror, directly or indirectly, to any other offeror or competitor before bid opening (in the case of a sealed bid solicitation) or contract award (in the case of a negotiated solicitation) unless otherwise required by law; and

(3) No attempt has been made or will be made by the offeror to induce any other concern to submit or not to submit an offer for the purpose of restricting competition.

(b) Each signature on the offer is considered to be a certification by the signatory that the signatory --

(1) Is the person in the offeror's organization responsible for determining the prices being offered in this bid or proposal, and that the signatory has not participated and will not participate in any action contrary to subparagraphs (a)(1) through (a)(3) above; or

(2)(i) Has been authorized, in writing, to act as agent for the following principals in certifying that those principals have not participated, and will not participate in any action contrary to subparagraphs (a)(1) through (a)(3) above

______________________________________________________________

[Insert full name of person(s) in the offeror's organization responsible for determining the prices offered in this bid or proposal, and the title of his or her position in the offeror's organization];

(ii) As an authorized agent, does certify that the principals named in subdivision (b)(2)(i) above have not participated, and will not participate, in any action contrary to subparagraphs (a)(1) through (a)(3) above; and

(iii) As an agent, has not personally participated, and will not participate, in any action contrary to subparagraphs (a)(1) through (a)(3) above.

(c) If the offeror deletes or modifies subparagraph (a)(2) above, the offeror must furnish with its offer a signed statement setting forth in detail the circumstances of the disclosure.

K.3 52.203-4 CONTINGENT FEE REPRESENTATION AND AGREEMENT (APR 1984)

(a) Representation. The offeror represents that, except for full-time bona fide employees working solely for the offeror, the offeror --

[Note: The offeror must check the appropriate boxes. For interpretation of the representation, including the term "bona fide employee," see Subpart 3.4 of the Federal Acquisition Regulation.]

(1) [] has, [] has not employed or retained any person or company to solicit or obtain this contract; and

(2) [] has, [] has not paid or agreed to pay to any person or company employed or retained to solicit or obtain this contract any commission, percentage, brokerage, or other fee contingent upon or resulting from the award of this contract.

(b) Agreement. The offeror agrees to provide information relating to the above Representation as requested by the Contracting Officer and, when subparagraph (a)(1) or (a)(2) is answered affirmatively, to promptly submit to the Contracting officer --

(1) A completed Standard Form 119, Statement of Contingent or Other Fees, (SF 119); or

(2) A signed statement indicating that the SF 119 was previously submitted to the same contracting office, including the date and applicable solicitation or contract number, and representing that the prior SF 119 applies to this offer or quotation.

K.4 52.203-8 REQUIREMENT FOR CERTIFICATE OF PROCUREMENT INTEGRITY

(a) Definitions. The definitions at FAR 3.104-4 are hereby incorporated in this provision.

(b) Certifications. As required in paragraph (c) of this provision, the officer or employee responsible for this offer shall execute the following certification. The certification in paragraph (b)(2) of this provision is not required for a procurement of commercial items.

CERTIFICATE OF PROCUREMENT INTEGRITY

(1) I, [Name of certifier] __________, am the officer or employee responsible for the preparation of this offer and hereby certify that, to the best of my knowledge and belief, with the exception of any information described in this certificate, I have no information concerning a violation or possible violation of subsection 27(a), (b), (d), or (f) of the Office of Federal Procurement Policy Act, as amended* (41 U.S.C. 423), (hereinafter referred to as "the Act"), as implemented in the FAR, occurring during the conduct of this procurement (solicitation number).

(2) As required by subsection 27(e)(1)(B) of the Act, I further certify that, to the best of my knowledge and belief, each officer, employee, agent, representative, and consultant of [Name of Offeror] ___________ who has participated personally and substantially in the preparation or submission of this offer has certified that he or she is familiar with, and will comply with, the requirements of subsection 27(a) of the Act, as implemented in the FAR, and will report immediately to me any information concerning a violation or possible violation of subsections 27(a), (b), (d), or (f) of the Act, as implemented in the FAR, pertaining to this procurement.

(3) Violations or possible violations: (Continue on plain bond paper if necessary and label Certificate of Procurement Integrity (Continuation Sheet), ENTER NONE IF NONE EXIST)

____________________________________________________________

(4) I agree that, if awarded a contract under this solicitation, the certifications required by subsection 27(e)(1)(B) of the Act shall be maintained in accordance with paragraph (f) of this provision.

__________________________________________________________

*Subsections 27(a), (b), and (d) are effective on December 1, 1990. Subsection 27(f) is effective on June 1, 1991.

THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF AN AGENCY OF THE UNITED STATES AND THE MAKING OF A FALSE, FICTITIOUS, OR FRAUDULENT CERTIFICATION MAY RENDER THE MAKER SUBJECT TO PROSECUTION UNDER TITLE 18, UNITED STATES CODE, SECTION 1001.

In accordance with the General Accounting Office's decision in Sweepster Jenkins Equipment Co. Inc., B-250480 (February, 1993), the Certificate of Procurement Integrity may only be signed by an individual who is authorized to sign the proposal/bid on behalf of the offeror.

(End of certification)

(c) For procurements, including contract modifications, in excess of $100,000 made using procedures other than sealed bidding, the signed certifications shall be submitted by the successful offeror to the Contracting officer within the time period specified by the Contracting Officer when requesting the certificates except as provided in subparagraphs (c)(1) through (c)(5) of this clause. In no event shall the certificate be submitted subsequent to award of a contract or execution of a contract modification:

(1) For letter contracts, other unpriced contracts, or unpriced contract modifications, whether or not the unpriced contract or modification contains a maximum or not to exceed price, the signed certifications shall be submitted prior to the award of the letter contract, unpriced contract, or unpriced contract modification, and prior to the definitization of the letter contract or the establishment of the price of the unpriced contract or unpriced contract modification. The second certification shall apply only to the period between award of the letter contract and execution of the document definitizing the letter contract, or award of the unpriced contract or unpriced contract modification and execution of the document establishing the definitive price of such unpriced contract or unpriced contract modification.

(2) For basic ordering agreements, prior to the execution of a priced order; prior to the execution of an unpriced order, whether or not the unpriced order contains a maximum or not to exceed price; and, prior to establishing the price of an unpriced order. The second certificate to be submitted for unpriced orders shall apply only to the period between award of the unpriced order and execution of the document establishing the definitive price for such order.

(3) A certificate is not required for indefinite delivery contracts (see Subpart 16.5) unless the total estimated value of all orders eventually to be placed under the contract is expected to exceed $100,000.

(4) For contracts and contract modifications which include options, a certificate is required when the aggregate value of the contract or contract modification and all options (see 3.104-4(e)) exceeds $100,000.

(5) For purposes of contracts entered into under section 8(a) of the SEA, the business entity with whom the SEA contracts, and not the SEA, shall be required to comply with the certification requirements of subsection 27(e). The SEA shall obtain the signed certificate from the business entity and forward the certificate to the Contracting officer prior to the award of a contract to the SBA.

(6) Failure of an Offeror to submit the signed certificate within the time prescribed by the Contracting Officer shall cause the offer to be rejected.

(d) Pursuant to FAR 3.104-9(d), the offeror may be requested to execute additional certifications at the request of the Government. Failure of an Offeror to submit the additional certifications shall cause its offer to be rejected.

(e) A certification containing a disclosure of a violation or possible violation will not necessarily result in the withholding of award under this solicitation. However, the Government, after evaluation of the disclosure, may cancel this procurement or take any other appropriate actions in the interests of the Government, such as disqualification of the Offeror.

(f) In making the certification in paragraph (2) of the certificate, the officer or employee of the competing contractor responsible for the offer may rely upon a one-time certification from each individual required to submit a certification to the competing contractor, supplemented by periodic training. These certifications shall be obtained at the earliest possible date after an individual required to certify begins employment or association with the contractor. If a contractor decides to rely on a certification executed prior to the suspension of section 27 (i.e., prior to December 1, 1989), the Contractor shall ensure that an individual who has so certified is notified that section 27 has been reinstated. These certifications shall be maintained by the Contractor for 6 years from the date a certifying employee's employment with the company ends or, for an agent, representative, or consultant, 6 years from the date such individual ceases to act on behalf of the Contractor.

(g) Certifications under paragraphs (b) and (d) of this provision are material representations of fact upon which reliance will be placed in awarding a contract.

K.5 CERTIFICATION AND DISCLOSURE REGARDING PAYMENTS TO INFLUENCE

(a) The definitions and prohibitions contained in the clause, at FAR 52.203-12, Limitation on Payments to Influence Certain Federal Transactions, included in this solicitation, are hereby incorporated by reference in paragraph (b) of this certification.

(b) The offeror, by signing its offer, hereby certifies to the best of his or her knowledge and belief as of December 23, 1989 that --

(1) No Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress on his or her behalf in connection with the awarding of a contract resulting from this solicitation;

(2) If any funds other than Federal appropriated funds (including profit or fee received under a covered Federal transaction) have been paid, or will be paid, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress on his or her behalf in connection with this solicitation, the offeror shall complete and submit with its offer, OMB standard form LLL, Disclosure of Lobbying Activities, to the Contracting Officer, and

(3) He or she will include the language of this certification in all subcontract awards at any tier and require that all recipients of subcontract awards in excess of $100,000 shall certify and disclose accordingly.

(c) Submission of this certification and disclosure is a prerequisite for making or entering into this contract imposed by section 1352, title 31, United States Code. Any person who makes an expenditure prohibited under this provision or who fails to file or amend this disclosure form to be filed or amended by this provision, shall be subject to a civil penalty of not less than $10,000, and not more than $100,000, for each such failure.

K.6 52.204-3 TAXPAYER IDENTIFICATION (MAR 1994)

(a) Definitions.

"Common parent," as used in this solicitation provision, means that corporate entity that owns or controls an affiliated group of corporations that files its Federal income tax returns on a consolidated basis, and of which the offeror is a member.

"Common parent," as used in this solicitation provision, means that corporate entity that owns or controls an affiliated group of corporations that files its Federal income tax returns on a consolidated basis, and of which the offeror is a member.

"Corporate status," as used in this solicitation provision, means a designation as to whether the offeror is a corporate entity, an unincorporated entity (e.g., sole proprietorship or partnership), or a corporation providing medical and health care services.

"Taxpayer Identification Number (TIN)," as used in this solicitation provision, means the number required by the IRS to be used by the offeror in reporting income tax and other returns.

(b) All offerors are required to submit the information required in paragraphs (c) through (e) of this solicitation provision in order to comply with reporting requirements of 26 U.S.C. 6041, 6041A, and 6050M and implementing regulations issued by the Internal Revenue Service (IRS). If the resulting contract is subject to the reporting requirements described in FAR 4.903, the failure or refusal by the offeror to furnish the information may result in a 31 percent reduction of payments otherwise due under the contract.

(c) Taxpayer Identification Number (TIN).

[ ] TIN: _______________.

[ ] TIN has been applied for.

[ ] TIN is not required because:

[ ] Offeror is a nonresident alien, foreign corporation, or

[ ] Offeror is an agency or instrumentality of a foreign

[ ] Offeror is an agency or instrumentality of a Federal,

[ ] Other. State basis. _______________

(d) Corporate Status.

[ ] Corporation providing medical and health care services, or

[ ] Other corporate entity;

[ ] Not a corporate entity:

(e) Common Parent.

[ ] Offeror is not owned or controlled by a common parent as

[ ] Name and TIN of common parent:

Name _______________

TIN ________________

K.7 52.209-5 CERTIFICATION REGARDING DEBARMENT, SUSPENSION, PROPOSED

(a) (1) The Offeror certifies, to the best of its knowledge and belief, that --

(i) The Offeror and/or any of its Principals --

(A) Are ( ) are not ( ) presently debarred, suspended, proposed for debarment, or declared ineligible for the award of contracts by any Federal agency;

(B) Have ( ) have not ( ), within a three-year period preceding this offer, been convicted of or had a civil judgment rendered against them for: commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, state, or local) contract or subcontract; violation of Federal or state antitrust statutes relating to the submission of offers; or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; and

(C) Are ( ) are not ( ) presently indicted for, or otherwise criminally or civilly charged by a governmental entity with, commission of any of the offenses enumerated in subdivision (A)(1)(i)(B) of this provision.

(ii) The Offeror has ( ) has not ( ), within a three-year period preceding this offer, had one or more contracts terminated for default by any Federal agency.

(2) "Principals," for the purposes of this certification, means officers; directors; owners; partners; and, persons having primary management or supervisory responsibilities within a business entity (e.g., general manager; plant manager; head of a subsidiary, division, or business segment, and similar positions).

THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF AN AGENCY OF THE UNITED STATES AND THE MAKING OF A FALSE, FICTITIOUS, OR FRAUDULENT CERTIFICATION MAY RENDER THE MAKER SUBJECT TO PROSECUTION UNDER SECTION 1001, TITLE 18, UNITED STATES CODE.

(b) The Offeror shall provide immediate written notice to the Contracting Officer if, at any time prior to contract award, the Offeror learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances.

(c) A certification that any of the items in paragraph (a) of this provision exists will not necessarily result in withholding of an award under this solicitation. However, the certification will be considered in connection with a determination of the Offeror's responsibility. Failure of the Offeror to furnish a certification or provide such additional information as requested by the Contracting Officer may render the Offeror nonresponsible.

(d) Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render, in good faith, the certification required by paragraph (a) of this provision. The knowledge and information of an Offeror is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings.

(e) The certification in paragraph (a) of this provision is a material representation of fact upon which reliance was placed when making award. If it is later determined that the Offeror knowingly rendered an erroneous certification, in addition to other remedies available to the Government, the Contracting Officer may terminate the contract resulting from this solicitation for default.

K.8 52.215-6 TYPE OF BUSINESS ORGANIZATION (JUL 1987)

The offeror or quoter, by checking the applicable box, represents that --

(a) It operates as [ ] a corporation incorporated under the laws of the State of __________ , [ ] an individual, [ ] a partnership, a nonprofit organization, or [ ] a joint venture; or

(b) If the offeror or quoter is a foreign entity, it operates as [ ] an individual, [ ] a partnership, [ ] a nonprofit organization, [ ] a joint venture, or [ ] a corporation registered for business in _________ (country).

K.9 52.215-11 AUTHORIZED NEGOTIATORS (APR 1984)

The offeror or quoter represents that the following persons are authorized to negotiate on its behalf with the Government in connection with this request for proposals or quotations: [list names, titles, and telephone numbers of the authorized negotiators].

_____________________________________________________________________

K.10 52.219-1 SMALL BUSINESS PROGRAM REPRESENTATIONS (OCT 1995)

(a) (1) The standard industrial classification (SIC) code for this acquisition is 7322 (insert SIC code).

(2) The small business size standard is $5,000,000 (insert size standard).

(3) The small business size standard for a concern which submits an offer in its own name, other than on a construction or service contract, but which proposes to furnish a product which it did not itself manufacture, is 500 employees.

(b) Representations.

(1) The offeror represents and certifies as part of its offer that it [ ] is, [ ] is not a small business concern.

(2) (Complete only if offeror represented itself as a small business concern in block (b)(1) of this section.) The offeror represents as part of its offer that it [ ] is, [ ] is not a small disadvantaged business concern.

(3) (Complete only if offeror represented itself as a small business concern in block (b)(1) of this section.) The offeror represents as part of its offer that it [ ] is, [ ] is not a women- owned small business concern.

(c) Definitions. Small business concern, as used in this provision, means a concern, including its affiliates, that is independently owned and operated, not dominant in the field of operation in which it is bidding on Government contracts, and qualified as a small business under the criteria in 13 CFR Part 121 and the size standard in paragraph (a) of this provision. Small disadvantaged business concern, as used in this provision, means a small business concern that (1) is at least 51 percent unconditionally owned by one or more individuals who are both socially and economically disadvantaged, or a publicly owned business having at least 51 percent of its stock unconditionally owned by one or more socially and economically disadvantaged individuals, and (2) has its management and daily business controlled by one or more such individuals. This term also means a small business concern that is at least 51 percent unconditionally owned by an economically disadvantaged Indian tribe or Native Hawaiian Organization, or a publicly owned business having at least 51 percent of its stock unconditionally owned by one or more of these entities, which has its management and daily business controlled by members of an economically disadvantaged Indian tribe or Native Hawaiian Organization, and which meets the requirements of 13 CFR Part 124.

Women-owned small business concern, as used in this provision, means a small business concern --

(1) Which is at least 51 percent owned by one or more women or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women; and

(2) Whose management and daily business operations are controlled by one or more women.

(d) Notice. (1) If this solicitation is for supplies and has been set aside, in whole or in part, for small business concerns, then the clause in this solicitation providing notice of the set- aside contains restrictions on the source of the end items to be furnished.

(2) Under 15 U.S.C. 645(d), any person who misrepresents a firm's status as a small or small disadvantaged business concern in order to obtain a contract to be awarded under the preference programs established pursuant to sections 8(a), 8(d), 9, or 15 of the Small Business Act or any other provision of Federal law that specifically references section 8(d) for a definition of program eligibility, shall --

(i) Be punished by imposition of fine, imprisonment, or both;

(ii) Be subject to administrative remedies, including suspension and debarment; and

(iii) Be ineligible for participation in programs conducted under the authority of the Act.

K.11 52.219-2 EQUAL LOW BIDS (OCT 1995)

(a) This provision applies to small business concerns only.

(b) The bidder's status as a labor surplus area (LSA) concern may affect entitlement to award in case of tie bids. If the bidder wishes to be considered for this priority, the bidder must identify, in the following space, the LSA in which the costs to be incurred on account of manufacturing or production (by the bidder or the first- tier subcontractors) amount to more than 50 percent of the contract price.

(c) Failure to identify the labor surplus areas as specified in paragraph (b) of this provision will preclude the bidder from receiving priority consideration. If the bidder is awarded a contract as a result of receiving priority consideration under this provision and would not have otherwise received award, the bidder shall perform the contract or cause the contract to be performed in accordance with the obligations of an LSA concern.

K.12 52.219-3 WOMEN-OWNED SMALL BUSINESS REPRESENTATION (APR 1984)

(a) Representation.

The offeror represents that it [ ] is, [ ] is not a women-owned small business concern.

(b) Definitions.

"Small business concern," as used in this provision, means a concern, including its affiliates, that is independently owned and operated, not dominant in the field of operation in which it is bidding on Government contracts, and qualified as a small business under the criteria and size standards in 13 CFR 121.

"Women-owned," as used in this provision, means a small business that is at least 51 percent owned by a woman or women who are U.S. citizens and who also control and operate the business.

K.15 52.222-22 PREVIOUS CONTRACTS AND COMPLIANCE REPORTS (APR 1984)

The offeror represents that --

(a) It [ ] has, [ ] has not participated in a previous contract or subcontract subject either to the Equal Opportunity clause of this solicitation, the clause originally contained in Section 310 of Executive order No. 10925, or the clause contained in Section 201 of Executive Order No. 11114;

(b) It [ ] has, [ ] has not filed all required compliance reports; and

(c) Representations indicating submission of required compliance reports, signed by proposed subcontractors, will be obtained before subcontract awards.

K.16 52.222-25 AFFIRMATIVE ACTION COMPLIANCE (APR 1984)

The offeror represents that (a) it [ ] has developed and has on file, [ ] has not developed and does not have on file, at each establishment, affirmative action programs required by the rules and regulations of the Secretary of Labor (41 CFR 60-1 and 60-2) or (b) it [ ] has not previously had contracts subject to the written affirmative action programs requirement of the rules and regulations of the Secretary of Labor.

K.17 52.223-1 CLEAN AIR AND WATER CERTIFICATION (APR 1984)

The Offeror certifies that --

(a) Any facility to be used in the performance of this proposed contract is [ ], is not [ ] listed on the Environmental Protection Agency (EPA) List of Violating Facilities;

(b) The Offeror will immediately notify the Contracting Officer, before award, of the receipt of any communication from the Administrator, or a designee, of the EPA, indicating that any facility that the Offeror proposes to use for the performance of the contract is under consideration to be listed on the EPA List of violating Facilities; and

(c) The Offeror will include a certification substantially the same as this certification, including this paragraph (c), in every nonexempt subcontract.

K.18 52.230-1 COST ACCOUNTING STANDARDS NOTICES AND CERTIFICATION

NOTE: This notice does not apply to small businesses or foreign governments. This notice is in three parts, identified by Roman numerals I through III.

Offerors shall examine each part and provide the requested information in order to determine Cost Accounting Standards (CAS) requirements applicable to any resultant contract.

I. DISCLOSURE STATEMENT -- COST ACCOUNTING PRACTICES AND

(a) Any contract in excess of $500,000 resulting from this solicitation, except contracts in which the price negotiated is based on (1) established catalog or market prices of commercial items sold in substantial quantities to the general public, or (2) prices set by law or regulation, will be subject to the requirements of 48 CFR parts 9903 and 9904, except for those contracts which are exempt as specified in 48 CFR Subpart 9903.201-1.

(b) Any offeror submitting a proposal which, if accepted, will result in a contract subject to the requirements of 48 CFR parts 9903 and 9904 must, as a condition of contracting, submit a Disclosure Statement as required by 48 CFR Subpart 9903.202. The Disclosure Statement must be submitted as a part of the offeror's proposal under this solicitation unless the offeror has already submitted a Disclosure Statement disclosing the practices used in connection with the pricing of this proposal. If an applicable Disclosure Statement has already been submitted, the offeror may satisfy the requirement for submission by providing the information requested in paragraph (c) of Part I of this provision.

CAUTION: In the absence of specific regulations or agreement, a practice disclosed in a Disclosure Statement shall not, by virtue of such disclosure, be deemed to be a proper, approved, or agreed-to practice for pricing proposals or accumulating and reporting contract performance cost data.

(c) Check the appropriate box below:

/ / (1) Certificate of Concurrent Submission of Disclosure Statement.

The offeror hereby certifies that, as a part of the offer, copies of the Disclosure Statement have been submitted as follows: (i) Original and one copy to the cognizant Administrative Contracting Officer (ACO), and (ii) One copy to the cognizant contract auditor.

(Disclosure must be on Form No. CASB DS-1. Forms may be obtained from the cognizant ACO or from the looseleaf version of the Federal Acquisition Regulation.)

Date of Disclosure Statement: _______________

Name and Address of Cognizant ACO where filed:

The offeror further certifies that practices used in estimating costs in pricing this proposal are consistent with the cost accounting practices disclosed in the Disclosure Statement.

/ / (2) Certificate of Previously Submitted Disclosure statement.

The offeror hereby certifies that Disclosure Statement was filed as follows:

Date of Disclosure Statement: _______________

Name and Address of Cognizant ACO where filed:

The offeror further certifies that the practices used in estimating costs in pricing this proposal are consistent with the cost accounting practices disclosed in the applicable disclosure statement.

/ / (3) Certificate of Monetary Exemption.

The offeror hereby certifies that the offeror, together with all divisions, subsidiaries, and affiliates under common control, did not receive net awards of negotiated prime contracts and subcontracts subject to CAS totaling more than $25 million (of which at least one award exceeded $1 million) in the cost accounting period immediately preceding the period in which this proposal was submitted. The offeror further certifies that if such status changes before an award resulting from this proposal, the offeror will advise the Contracting Officer immediately.

/ / (4) Certificate of Interim Exemption.

The offeror hereby certifies that (i) the offeror first exceeded the monetary exemption for disclosure, as defined in (3) of this subsection, in the cost accounting period immediately preceding the period in which this offer was submitted and (ii) in accordance with 48 CFR, Subpart 9903.202-1, the offeror is not yet required to submit a Disclosure Statement. The offeror further certifies that if an award resulting from this proposal has not been made within 90 days after the end of that period, the offeror will immediately submit a review certificate to the Contracting Officer, in the form specified under subparagraphs (c)(1) or (c)(2) of Part I of this provision, as appropriate, to verify submission of a completed Disclosure Statement.

CAUTION: Offerors currently required to disclose because they were awarded a CAS-covered prime contract or subcontract of $25 million or more in the current cost accounting period may not claim this exemption (4). Further, the exemption applies only in connection with proposals submitted before expiration of the 90-day period following the cost accounting period in which the monetary exemption was exceeded.

II. COST ACCOUNTING STANDARDS -- ELIGIBILITY FOR MODIFIED CONTRACT

If the offeror is eligible to use the modified provisions of 48 CFR Subpart 9903.201-2(b) and elects to do so, the offeror shall indicate by checking the box below. Checking the box below shall mean that the resultant contract is subject to the Disclosure and Consistency of Cost Accounting Practices clause in lieu of the Cost Accounting Standards clause.

/ / The offeror hereby claims an exemption from the Cost Accounting Standards clause under the provisions of 48 CFR Subpart 9903.201-2(b) and certifies that the offeror is eligible for use of the Disclosure and Consistency of Cost Accounting Practices clause because during the cost accounting period immediately preceding the period in which this proposal was submitted, the offeror received less than $25 million in awards of CAS-covered prime contracts and subcontracts, or the offeror did not receive a single

CAS-covered award exceeding $1 million dollars. The offeror

CAUTION: An offeror may not claim the above eligibility for modified contract coverage if this proposal is expected to result in the award of a CAS-covered contract of $25 million or more or if, during its current cost accounting period, the offeror has been awarded a single CAS-covered prime contract or subcontract of $25 million or more.

III. ADDITIONAL COST ACCOUNTING STANDARDS APPLICABLE TO EXISTING

The offeror shall indicate below whether award of the contemplated contract would, in accordance with subparagraph (a)(3) of the Cost Accounting Standards clause, require a change in established cost accounting practices affecting existing contracts and subcontracts.

/__/ YES /__/ NO

K.19 CONTRACTOR'S REMITTANCE OR CHECK MAILING ADDRESS

Indicate your firm's remittance or check mailing address below. For additional information see Section I, Prompt Payment (FAR 52.232- 25)

_____________________________________________________________________

K.20 RESPONSIBLE OFFICIAL(S) WHO CAN RECEIVE NOTIFICATION OF AN

Indicate below the responsible official(s) who can receive notification of an improper invoice and answer questions regarding the invoice. For additional information see Section I, Prompt Payment.

Name (If practicable) _____________________________________

K.21 CERTIFICATION

TO BE COMPLETED BY THE OFFEROR: (The Offeror must check or complete all appropriate boxes or blanks in the Representations and Certifications, on the preceding pages). The Representations and Certifications must be executed below, by an individual authorized to bind the offeror.

The offeror makes the foregoing Representations and Certifications as part of its proposal.

______________________________     _______________________________

______________________________     _______________________________

_____________________________________________________________________

Note: The penalty for making false statements in offers is prescribed in 18 U.S.C. 1001.

SECTION L -- INSTRUCTIONS, CONDITIONS

L.1 52.252-1 SOLICITATION PROVISIONS INCORPORATED BY REFERENCE (JUN

This solicitation incorporates one or more solicitation provisions by reference, with the same force and effect as if they were given in full text. Upon request, the contracting officer will make their full text available.

        I. FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1)

NUMBER            TITLE                                   DATE

 52.215-5      SOLICITATION DEFINITIONS                   JUL   1987

L.2 52.215-16 CONTRACT AWARD (OCT 1995) ALTERNATE I (OCT 1995)

(a) The Government will award a contract resulting from this solicitation to the responsible offeror whose offer conforming to the solicitation will be most advantageous to the Government, cost or price and other factors, specified elsewhere in this solicitation, considered.

(b) The Government may (1) reject any or all offers if such action is in the public interest, (2) accept other than the lowest offer, and (3) waive informalities and minor irregularities in offers received.

(c) The Government intends to evaluate proposals and award a contract after conducting written or oral discussions with all responsible offerors whose proposals have been determined to be within the competitive range. However, each initial offer should contain the offeror's best terms from a cost or price and technical standpoint.

(d) The Government may accept any item or combination of items, unless doing so is precluded by a restrictive limitation in the solicitation or offer.

(e) A written award or acceptance of offer mailed or otherwise furnished to the successful offeror within the time for acceptance specified in the offer shall result in a binding contract without further action by either party. Before the offer's specified expiration time, the Government may accept an offer (or part of an offer, as provided in paragraph (d) above), whether or not there are negotiations after its receipt, unless a written notice of withdrawal is received before award. Negotiations conducted after receipt of an offer do not constitute a rejection or counteroffer by the Government.

(f) Neither financial data submitted with an offer, nor representations concerning facilities or financing, will form a part of the resulting contract. However, if the resulting contract contains a clause providing for price reduction for defective cost or pricing data, the contract price will be subject to reduction if cost or pricing data furnished is incomplete, inaccurate, or not current.

(g) The Government may determine that an offer is unacceptable if the prices proposed are materially unbalanced between line items or subline items. An offer is materially unbalanced when it is based on prices significantly less than cost for some work and prices which are significantly overstated in relation to cost for other work, and if there is a reasonable doubt that the offer will result in the lowest overall cost to the Government, even though it may be the low evaluated offer, or it is so unbalanced as to be tantamount to allowing an advance payment.

(h) The Government may disclose the following information in post-award debriefings to other offerors: (1) the overall evaluated cost or price and technical rating of the successful offeror; (2) the overall ranking of all offerors, when any ranking was developed by the agency during source selection; (3) a summary of the rationale for award; and (4) for acquisitions of commercial end items, the make and model of the item to be delivered by the successful offeror.

L.3 52.216-1 TYPE OF CONTRACT (APR 1984)

The Government contemplates award of MULTIPLE (NOT-TO-EXCEED FIVE (5)) FIXED-PRICE contracts resulting from this solicitation.

L.3.1 MULTIPLE AWARDS

The Government, at its discretion, may award approximately three to five (3 - 5) contracts as a result of this solicitation. This does not, however, commit the Government to making award of a contract to any specific number of offerors. Furthermore, it is not the Government's intent to award more than five (5) contract.

L.4 52.233-2 SERVICE OF PROTEST (OCT 1995)

(a) Protests, as defined in section 33.101 of the Federal Acquisition Regulation, that are filed directly with an agency, and copies of any protests that are filed with the General Accounting Office (GAO) or the General Services Administration Board of Contract Appeals (GSBCA), shall be served on the Contracting Officer (addressed as follows) by obtaining written and dated acknowledgment of receipt from:

Pamela H. Kitchens, M:P:O:S

(b) The copy of any protest shall be received in the office designated above on the same day a protest is filed with the GSBCA or within one day of filing a protest with the GAO.

(c) In this procurement, you may not protest to the GSBCA because of the nature of the supplies or services being procured.

L.5 52.252-5 AUTHORIZED DEVIATIONS IN PROVISIONS (APR 1984)

(a) The use in this solicitation or contract of any Federal Acquisition Regulation (48 CFR Chapter 1) provision with an authorized deviation is indicated by the addition of "(DEVIATION)" after the date of the provision.

(b) The use in this solicitation or contract of any Department of Treasury provision with an authorized deviation is indicated by the addition of "(DEVIATION)" after the name of the regulation.

L.6 PROPOSAL PREPARATION INSTRUCTIONS - GENERAL

(a) General

Offerors are expected to examine all instructions. Failure to do so will be at the offeror's risk.

Proposals are expected to conform to solicitation provision "L.1 52.252-1 SOLICITATION PROVISIONS INCORPORATED BY REFERENCE, 52.215-13 PREPARATION OF OFFERS" and be prepared in accordance with this section. To aid in the evaluations, proposals shall be clearly and concisely written as well as being neat, indexed (cross-indexed as appropriate) and logically assembled. Prospective offerors are asked to bear in mind that all material submitted should be directly pertinent to the requirements of this RFP. Extraneous narrative, elaborate brouchures, uninformative "PR" material and so forth, shall not be submitted. All pages of each part shall be appropriately numbered, and identified with the name of the offeror, the date, and the solicitation number to the extent practicable.

(b) Overall Arrangement of Proposal

(1) The overall proposal shall consist of two (2) physically separated volumes, individually entitled as stated below. The required number of each proposal volume and the required packaging and grouping is also shown in the matrix below:

                                               TO BE PACKAGED

              Offer and

              Technical Oral

(c) Each group, designated above, is to be packaged individually. This does not preclude packaging more than one, or all, groups in a single overall package. Mark the group number on the outside of the individual package or packages. External markings and place for submission are indicated on the attached labels; provided the offeror completes the information required in the spaces on the labels and adds the return address.

L.6.1 VOLUME I - OFFER AND OTHER DOCUMENTS

(a) General

Volume I - Offer and Other Documents consists of the actual offer to enter into a contract to perform the desired work. It also includes a detailed pricing proposal, required representations, certifications, any acknowledgments, identification of technical data to be withheld, request for waiver of patent clauses, any other administrative information, and a summary of exceptions and deviations taken. Although it incorporates them by reference, it does not physically include the other volumes.

(b) Format and Content

Volume I, Offer and Other Documents, shall include the following documents (in the order listed):

(1) STANDARD FORM 33 (SF 33)

(a) SF 33: The SF 33 shall be executed fully and used as the cover sheet (or first page) of each copy of Volume I, Offer and Other Documents.

(b) ACCEPTANCE PERIOD: The Offeror's acceptance period shall not be less than that prescribed in Block 12 of the SF 33.

(c) SIGNATURE AUTHORITY: The person signing the Proposal Form must have the authority to commit the offeror to all of the provisions of the proposal, fully recognizing that the Government has the right, by terms of the RFP, to make an award without further discussions it so elects.

(2) BUSINESS PROPOSAL (Part I, Section B of this draft contract document): In this section, the offeror shall provide its price proposal, including a complete breakdown of how the price was derived (material, direct labor, overhead, general and administrative expenses, other direct costs, profit, etc.), if applicable.

The offeror shall furnish the information required by the solicitation. The offeror shall sign the offer and print or type its name on the schedule and each continuation sheet on which it makes an entry. Erasures or other changes must be initialed by the person signing the offer. Offers signed by an agent shall be accompanied by evidence of that agent's authority, unless that evidence has been previously furnished to the issuing office.

For each item offered, offerors shall (1) show the unit price/cost, including, unless otherwise specified, packaging, packing, and preservation and (2) enter the extended price/cost for the quantity of each item offered in the "Amount" column of the Schedule. In case of a discrepancy between the unit price/cost and an extended price/cost, the unit price/cost will be presumed to be correct, subject, however, to correction to the same extent and in the same manner as any other mistake.

(3) OFFEROR REPRESENTATIONS, CERTIFICATIONS, AND ACKNOWLEDGMENTS OF THE OFFEROR: Solicitation Part IV - Section K shall be fully executed and a copy included in each copy of Volume I, Offer and Other Documents provided.

(4) COMPETITION IN SUBCONTRACTING.

(a) See clauses entitled "Subcontracts (Fixed-Price Contracts) and "Competition in Subcontracting" of Part II, Section I of the draft contract.

(b) As a part of its initial offer, all Offerors (other than small businesses) shall prepare and submit a proposed small business and small disadvantaged business subcontracting plan, as prescribed in FAR 52.219-9 and outlined in Section J, J.1, Attachment 2, `Department of the Treasury, Internal Revenue Service, Small, Small Disadvantaged and Women-Owned Business Subcontracting Plan Outline.' The goals stated in this attachment are applicable to this procurement and should be utilized for developing a subcontracting plan in response to this Request for Proposal. In addition to this attachment, Offeror's shall also provide a record of previous performance in carrying out the goals of subcontracting plans.

(c) The subcontracting plan shall be submitted as an attachment that is separate and detachable from Volume I. This attachment will be utilized in the evaluation of the subcontracting plan as stated in Section M.6.

(d) The offeror shall select proposed subcontractors (including suppliers) on a competitive basis to the maximum practicable extent consistent with the objectives and requirements of the solicitation. Competitive solicitation of proposed subcontractors shall be discussed in this section. Non-competitive selection of proposed subcontractors must be justified.

(e) Unless expressly provided in any resulting contract, award of the contract shall not be construed as the consent or authorization by the IRS to the selection of any proposed subcontractor.

(5) ADDITIONAL INFORMATION PROVIDED BY THE OFFEROR.

(6) EXCEPTIONS AND DEVIATIONS TAKEN TO THE MODEL CONTRACT.

(a) The Offeror shall identify and explain any exceptions or deviations taken or conditional assumptions made with respect to the model contract, any portion of Section K - Offerors Representations, Certifications and Other Statements of the Offeror, the requirements of this Section, and other matters included in Volume I - Offer and Other Documents, including the reporting requirements.

(b) Any exceptions, etc., taken must contain sufficient amplification and justification to permit evaluation. The benefit to the Government shall be explained for each exception taken. Such exceptions will not, of themselves, automatically cause a proposal to be termed unacceptable. However, a large number of exceptions, or one or more significant exceptions not providing benefit to the Government may result in rejection of your offer as unacceptable.

(7) SUMMARY OF EXCEPTIONS AND DEVIATIONS TAKEN IN OTHER VOLUMES: The Offeror shall summarize each technical or cost or other exceptions taken elsewhere, and provide specific cross references to its full discussion.

L.6.2 VOLUME II - TECHNICAL PROPOSAL

(a) General.

Each Offeror's Technical Proposal (Volume II) has a maximum number of 75 DOUBLE-SPACED pages that the Technical Evaluation Panel will evaluate. PAGES BEYOND THE MAXIMUM LIMIT WILL NOT BE EVALUATED. In addition, the Volume II pages shall follow the following formats:

1. All pages shall be one-sided and 21.59 cms in size (i.e., 8

2. Top, bottom, and both side margins shall be no less than

3. Each page font shall be no smaller than 12-point with

4. All pages shall be on white paper.

5. Graphics. Each graphic page font shall be no smaller than 6-

The Technical Proposal consists of the offeror's proposed business and management approach to the work addressing the business management aspects of the acquisition, the resources the offeror will use, and how he will use them. The Technical Proposal will be evaluated in accordance with the evaluation criteria in Section M of this RFP. It should be prepared simply and economically, providing a straightforward, concise delineation of information provided to satisfy the requirements below.

In order that your Technical Proposal may be evaluated strictly on the merit of the material submitted, No CONTRACTUAL COST INFORMATION IS TO BE INCLUDED IN THE TECHNICAL PROPOSAL. Where estimated labor hours shall provide clarity, they shall be quoted in labor hour figures only, with no indication as to the cost of those labor hours.

THE PROPOSAL SHALL NOT MERELY OFFER TO PERFORM WORK IN ACCORDANCE WITH THE SCOPE OF WORK, BUT SHALL OUTLINE THE ACTUAL WORK PROPOSED AS SPECIFICALLY AS PRACTICAL. The Statement of Work reflects the problems and objective of the program under consideration; therefore, repeating the scope of work without sufficient elaboration will not be acceptable.

(b) Format and Content.

At a minimum, the Technical proposal shall contain the information specified below in accordance with the following general format:

(1) Table of Contents

(2) List of Tables and Exhibits

(3) Technical Discussion

(4) Other Information

(5) Exceptions and Deviations

This part should clearly present information adequate to fully evaluate each of the evaluation criteria in RFP Section M. This part should include the following sections:

(1) Criterion 1: Past and Current Business Experience and

Identify three active or recently completed (in the last five (5) years) contracts which required work in comparable areas to those described in the Statement of Work for this RFP. Identify each contract as either directly concerned with the collection of State or local tax liabilities, or, concerned only with the collection of non- tax liabilities such as consumer debt, education loans, or the like. Preferably, at least one of the contracts identified should be a currently active contract. Provide the following information for each contract:

(1a) Contract agency or firm, with address, and phone number.

(1b) Date of contract, period of performance, and place of

(1c) Address and telephone number of Contracting Officer and

(1d) Dollar value of contract on award date.

(1e) Whether this contract was terminated (partially or

(1f) Brief description of contract work scope and

(1g) If this is a subcontract, please provide the name of the

* * * * *

The Government reserves the right to contact the Offeror's references provided in the Offeror's proposal as examples of experience to discuss and verify the information provided in the Offeror's proposal. The Government's contact is envisioned as shown in Section J.2, Solicitation Attachment Al, "Validation of Offeror's Demonstrated Experience."

The information gathered from these contacts will be used in the evaluation of the Offeror's past performance/experience. Any negative information will be provided to the Offeror for their response.

* * * * *

(2) Criterion 2: Corporate Resources

The Offeror shall provide sufficient information to describe the proposed staffing and resources available for this requirement, describing in detail his capability to provide the personnel, data processing, communications, and other resources, including training, to accomplish the requirements of this RFP in light of its current and projected workload. The offeror shall describe specifically how these requirements would be filled.

If sufficient personnel, data processing, communications, training or other resources are not currently available to the offeror to fulfill the requirements of this RFP, explain how the required resources will be acquired or otherwise provided. For personnel, this explanation should include a description of your company's existing recruitment policies and procedures, and must specify how the offeror will ensure that experienced personnel will be proposed to perform under the contract.

Describe how, and in what ways your work on prior contracts required the use of computer capabilities. This should include a discussion of whether and in what ways this prior work afforded you the opportunity to use state-of-the-art computer capabilities and, if so, how you successfully utilized this state-of-the-art computing capability.

For the prime only, if you are proposing use of subcontractors for this, describe your utilization and management of the subcontractors used on the three contracts discussed above, including your reason for why this use and management was effective. If subcontractors were not used on any of the three contracts discussed above, furnish several examples of other contracts and describe how you successfully utilized and managed subcontractors under those contracts.

List the states you are currently licensed in and any states in which the license is pending. Also describe the offeror's involvement in any professional associations relative to this type of work.

(3) Criterion 3: Key Personnel

The offeror's technical proposal shall provide the names of the proposed key personnel. The Offeror shall submit a resume for the individual(s) proposed to fill the key personnel position(s) (see Part III, Section J, J.2 - Attachment A, INDIVIDUAL RESUME FORMAT, for the required form and content). The resume shall provide sufficient information to demonstrate that the proposed individual meets the position qualifications, as set forth in Part III, Section J, J.1, Attachment 5 - POSITION DESCRIPTIONS/ QUALIFICATIONS.

The offeror shall provide information that describes the proposed individual's leadership capabilities and experience necessary to perform in the proposed key personnel position(s) on the contract.

Each resume shall contain the names and current telephone number of at least two business-related references not associated with the employing entity who may be contacted during the evaluation process to verify relevant experience and job performance.

The offeror shall provide documentation in support of the level of commitment and dedication of each key person.

Criterion 4 -- Management Plan

Management Approach. Provide sufficient narrative to describe the following items as they relate to the proposed effort:

o The overall management system to be used on the contract.

o Describe the proposed approach to planning and project

o Proposed methods to estimate program resource requirements

o Deliverable schedule controls to be used in adhering to

Projected schedule. Provide estimates of the number of cases that will be processed per month during the life of the contract; the days and hours of operation of the work site(s); and the days and hours during which contacts will be referred to IRS in accord with the provisions of the Statement of Work.

The Offeror is encouraged to develop measures of performance beyond the minimum specified in Section C, and to supplement the report presentation with charts, graphs, etc. It is in the Offeror's best interest to give the IRS the most accurate and illuminating reports of the proposed performance under this contract. The IRS is interested in conciseness and accuracy of data, not volume.

Synopses of other work plans. Provide synopses of the various work plans referred to in paragraphs C.2.1(f) through C.2.1(j) of the Statement of Work, including a discussion of the computer systems, data exchange arrangements, and quality control procedures currently in use on similar contacts. While final work plans will be submitted in their entirety for IRS approval by the selected Offerors after award, these synopses shall be prepared in enough detail to allow IRS to evaluate the Offeror's capabilities and commitment in carrying out important features of the Statement of Work.

Criterion 5: Synopsis of proposed operational plan and schedule

Project organization. Provide an organization chart (or charts) and sufficient supplementary narrative to fully describe the following items as they relate to the proposed effort:

o The organization planned for performance of the proposed

o The position of that organization in the overall corporate

o The decision-making authority of the Project Manager and the

o Corporate Responsiveness. Demonstrate your ability to provide

(f) Other Information. The Disclosure Consent form (see Section J, J.1, Attachment 3) for all principals, partners, corporate officers and/or company officials must be submitted with the proposal. The tax check information will be used in the determination of acceptability of the Offeror's proposal.

(g) Exceptions and Deviations. This section shall identify and explain any exceptions, deviations, or conditional assumptions taken with the requirements of the RFP relative to the Business Management Proposal. Any exception, etc., taken must contain sufficient amplification and justification to permit evaluation. All benefits to the Government shall be explained for each exception taken. Such exceptions will not, of themselves, automatically cause a proposal to be termed unacceptable. A large number of exceptions, or one or more significant exceptions not providing benefit to the Government, may, however, result in rejection of your proposal as unacceptable.

L.6.2.1 COMPETITIVE RANGE

Following the evaluation of the technical proposals, a competitive range determination will be made. Only those offerors within the competitive range will be scheduled for a site visit and an oral presentation. At the conclusion of each offeror's site visit and oral presentation, clarifications and discussions will occur in accordance with FAR 15.610, WRITTEN OR ORAL DISCUSSION.

L.6.2.2 SITE VISIT AND ORAL PRESENTATION

The site visit and the oral presentation shall be specific and detailed, rounding out the Offeror's proposal, as outlined below, relative to the evaluation criteria set forth in Section M. The offeror's oral presentation shall be conducted following the site visit before the Technical Evaluation Panel (TEP) and authorized procurement personnel. Notification of the individual Offeror's scheduled site visit and oral presentation (date, time and location) will be provided by the Contracting Officer via letter and/or facsimile transmission within fifteen (15) business days after the closing date of the RFP. The specific technical evaluation criteria that must be addressed in the oral presentation are set forth below.

(a) EVALUATION CRITERIA -- SITE VISIT AND ORAL PRESENTATION

The technical evaluation criteria to be addressed in the site visit and oral presentation are set forth below. The relative importance of these criteria is set forth in Section M, paragraph M.3. Offerors shall determine the structure of their oral presentation, ensuring that the following criteria are fully and clearly addressed in the presentation:

CRITERION 1 -- COMPUTER CAPABILITIES, TELEPHONE EQUIPMENT/OPERATIONS

To support their technical proposal, the Offeror shall provide a visual tour and explanation of their current computer capabilities, telephone equipment and security measures at one of their current work sites that most closely resembles their proposed work site for this effort. Overall security measures will be discussed as well.

(b) SCHEDULE FOR PRESENTATIONS.

The scheduling of offeror presentations will begin within FIFTEEN (15) business days after the closing date for receipt of proposals (see L.11). The presentations will be scheduled as tightly as possible, but the duration of the entire presentation process will be dependent upon the number of offers within the competitive range and the geographic location of those firms.

To the extent possible, the IRS will attempt to coordinate and accommodate the scheduling needs of each Offeror. Once notified of the scheduled date and time for their presentations, offerors shall complete their presentations on the scheduled date and time. Requests from offerors to reschedule their presentations will not be entertained, and no rescheduling of presentations will be done unless determined necessary by the Government to resolve unanticipated problems or delays encountered in the presentation process.

(c) Form of Presentations.

Offerors shall make their oral presentations in person to the TEP. Submission of video tapes or other forms of media containing the presentation for evaluation, in lieu of the oral presentation, will not be authorized and such technical proposals will be rejected.

(d) OFFEROR'S PRESENTATION TEAM.

Only members of the Offeror's in-house staff shall participate in the presentation. The only exception is that any individuals who are proposed as Key Personnel to perform on the contract but who are not currently employed by the Offeror may participate in the presentation. Within those constraints, Offerors shall have the option of selecting the participants to make their firm's oral presentation to the TEP and procurement personnel. Offerors are encouraged to have individuals proposed to fill any key personnel positions participate in the presentation.

It is strongly recommended that all proposed Key Personnel be involved in conducting the site visit and oral presentation.

(e) DOCUMENTATION.

At the close of the presentation, the Offeror shall provide the TEP with a listing of the names, firms, and position titles of all presenters and two copies of any presentation materials, such as slides or viewgraphs, which have been used in the presentation. The Government will accept additional documentation (such as procedures manuals, administrative handbooks or guides etc.), which were referenced during the presentation.

(f) TIME ALLOWED FOR PRESENTATIONS.

Each Offeror will have a maximum of two (2) hours to conduct the site visit and oral presentation to the TEP. Time for discussions with IRS Technical Evaluation Panel and authorized procurement personnel is not included in this time frame, but will follow the tour and presentation, if necessary.

L. 6.2.3 CLARIFICATIONS AND DISCUSSIONS

At the conclusion of the Offeror's oral presentation, the TEP will present any clarification and/or discussion questions that may develop as a result of the evaluation of the technical proposal, the site visit and/or the oral presentation. If there are no questions, the TEP will inform the Offeror that their individual presentation is concluded.

Upon completion of the clarifications and/or discussions, all Offerors still within the Competitive Range will be requested to submit a Best and Final Offer (BAFO). Following the evaluation of the BAFOs, the Offeror whose proposal is most advantageous to the Government, considering price and other related factors, will be selected for contract award.

L.6.2.4 SUMMARY OF EXCEPTIONS AND DEVIATIONS

The Offeror shall present a written discussion of any exceptions or deviations taken or conditional assumptions made with respect to the technical requirements of the solicitation. Any exceptions or deviations taken must contain sufficient amplification and justification to permit evaluation. All benefits to the Government shall be explained for each exception taken. Such exceptions will not, of themselves, automatically cause a proposal to be termed unacceptable; however, a large number of exceptions, or one or more significant exceptions not providing benefit to the Government, may result in rejection of the proposal as unacceptable.

L.7 AMENDMENTS TO PROPOSAL

Changes to the technical supplementary proposal by the offeror shall be accomplished by amended page(s). Changes from the original page shall be indicated by a vertical line, adjacent to the change, on the outside margin of the page. The offeror shall include the date of the amendment on the lower right hand edge of the page as well as the amendment number which caused the change.

L.8 DISCUSSIONS AND CORRESPONDENCE

All communications concerning the solicitation, including any of a technical nature, must be made through the Contracting Officer. Correspondence, including written questions, should be directed to the address shown in Block 8 of the Standard Form 33 and marked for the attention of the individual whose name appears in Block 10A of that form. All verbal communications should also be directed to that individual.

Questions concerning any technical aspect of the solicitation must be in writing. QUESTIONS MAY BE SENT VIA FAX TO 202-283-1514. In order to ensure a timely response, questions should be received by the Contracting Officer at least FIFTEEN (15) CALENDAR days before the due date for receipt of proposals. After this date, the Government will make every effort, but cannot guarantee that questions submitted will be answered before the RFP closing date.

L.9 DISPOSITION OF PROPOSALS

After evaluation, selection, and contract award, unsuccessful proposals will be disposed of as follows: one copy of each proposal will be retained by the Contracting Officer and the remainder will be destroyed.

L.10 CONTENT OF RESULTING CONTRACT

Any contract awarded as a result of this solicitation will contain PART I -- The Schedule, PART II -- Contract Clauses, and PART III -- List of Documents, Exhibits and Other Attachments. Blank areas appearing in these sections are to be completed by the Offeror or will be filled in by the Contract Specialist after negotiations have been completed.

L.11 TIME, DATE AND PLACE PROPOSALS ARE DUE

Mailed or handcarried proposals/bids, including those by delivery services (e.g., FEDERAL EXPRESS; DHL; EMERY; etc.) shall be marked as follows:

FROM:

MAIL TO:

INTERNAL SERVICE

Solicitation Number: IRS-96-0014

Due: 3:30 P.M. Date: APRIL 5, 1996

NOTICE TO BID/MAIL ROOM:

DO NOT OPEN

NOTICE TO COURIER:

It may not be possible to deliver this package to Room 700

L.11.1 PROPOSAL SUBMISSION INFORMATION

(a) All proposals are due NO LATER THAN 3:30 P.M. local prevailing time on *** APRIL 5, 1996 *****. (CAUTION: See the proposal submission instructions, including the provision describing treatment of Late Submissions, Modifications and Withdrawals of Proposals).

(b) Proposal Submission by Other Than U.S. Mail

IF OFFEROR/BIDDER ELECTS TO FORWARD THE OFFER/BID BY MEANS OTHER THAN U.S. MAIL, HE ASSUMES THE FULL RESPONSIBILITY OF INSURING THAT THE OFFER/BID IS RECEIVED AT THE PLACE AND BY THE DATE AND TIME SPECIFIED IN THIS SOLICATION. SUCH PROPOSALS MUST BE CLOSED AND SEALED AS IF FOR U.S. POSTAL MAILING.

(c) It may not be possible to handcarry the package(s) to the Bid/Mail Room outside of the hours 8:30 A.M. to 4:00 P.M. workdays. DELIVERY TO ANY OTHER LOCATION, INCLUDING THE CENTRAL DELIVERY AREA, MAY RESULT IN THE LATE RECEIPT OF THE PROPOSAL IN THE BID/MAIL ROOM AND IS STRONGLY DISCOURAGED.

(d) MAILING LABEL

A Mailing Label is provided in Section J of this solicitation and may be used for submitting your offer and amendments thereto. The packages used in submitting your offer (and any amendments thereto) should be marked substantially as shown on the attached label. To use the label, the Offeror/bidder must complete the blanks shown for the Solicitation Number, the Closing Date and Time and add the sender's return address.

(e) SIGNED ORIGINALS

Copy Number 1 of the proposal shall contain the signed original of all documents requiring signature by the Offeror. Use of reproductions of signed originals is authorized in all other copies of the proposal.

L.12 AN EQUAL RIGHT'S NOTE

Wherever, in the solicitation or contract "man," "men," or their related pronouns may appear, either as words or as parts of words (and other than with obvious reference to named male individuals), they have been used for literary purposes and are meant in their generic sense (i.e., to include all humankind -- both female and male sexes).

L.13 FALSE STATEMENTS IN OFFERS

Proposals must set forth full, accurate, and complete information as required by this solicitation (including attachments). The penalty for making false statements in proposals is prescribed in 18 U.S.C. 100.

L.14 EXPENSES RELATED TO PROPOSAL OR BID SUBMISSIONS

This solicitation does not commit the Government to pay any costs incurred in the submission of any proposal or bid, or in making necessary studies or designs for the preparation thereof or to acquire or contract for any services.

L.15 RESPONSIBlE PROSPECTIVE CONTRACTORS

(a) The general and additional minimum standards for responsible prospective Contractors set forth at 48 CFR 9.1 and 48 CFR 909.104-1 apply.

(b) The Internal Revenue Service may conduct preaward surveys in accordance with 48 CFR 9.106 and may solicit from available sources, relevant information concerning the Offeror's record of past performance, and use such information in making determinations of prospective Offeror responsibility.

SECTION M -- EVALUATION FACTORS FOR AWARD

M.1 52.252-1 SOLICITATION PROVISIONS INCORPORATED BY REFERENCE

This solicitation incorporates one or more solicitation provisions by reference, with the same force and effect as if they were given in full text. Upon request, the contracting officer will make their full text available.

   I. FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) PROVISIONS

         NUMBER        TITLE                             DATE

       52.215-34     EVALUATION OF OFFERS FOR            MAR 1990

       52.217-5      EVALUATION OF OPTIONS               JUL 1990

M.2 METHOD OF AWARD

Award will be made to those Offerors whose proposals offer the greatest value to the Government in terms of performance, risk management, cost or price and other related factors. The IRS will consider the combined technical evaluation factors significantly more important than cost or price. Selection will be determined on the basis of the following:

o how well a proposal satisfies the evaluation criteria

o the strengths, weaknesses, and risks a proposal presents to

o evaluation of the differences among proposals relative to the

M.3. EVALUATION CRITERIA

The evaluation criteria to be used for evaluating offerors' proposals are listed below. Note that the price/cost proposal will not be scored in the evaluation, although IRS will conduct a price analysis using the applicable techniques cited in Federal Acquisition Regulation 15.805-3.

                 CRITERIA                                    POINTS

A. TECHNICAL

Criterion  1  - Past and current business

B. SITE VISIT AND ORAL PRESENTATION                        30 POINTS

C. PRICE/COST PROPOSAL                                     NO POINTS

M.3.1 TECHNICAL EVALUATION CRITERIA

Criterion 1: Past and Current Business Experience and Performance

The offeror's ability to perform under this Statement of Work will be evaluated on the basis of demonstrated experience and performance on past and current contracts similar to the one solicited by this RFP. IRS will evaluate the level of corporate experience in collection of consumer debts, education loans, state or local tax liabilities and other collection related activities. IRS will evaluate both the technical and management aspects of contract planning and execution; the commitment, involvement, and responsiveness of corporate management; customer satisfaction with contractor's performance; number of complaints, legal actions, or allegations of improper activity lodged against the contractor relating to its performance; and the contractor's effective management of subcontractor, if any.

Criterion 2: Corporate Resources (Maximum 10 points).

The IRS will evaluate the offerors' proposals for the availability of sufficient staffing and other resources, such as telephone and data processing capacity, to effectively perform the work required in this RFP. The IRS will also evaluate the offerors' capability and commitment to train staff for successful performance. The extent of subcontracting will be evaluated. The IRS will evaluate the offeror's current state license status in the particular states listed in section C. NOTE: Successful offerors must have completed any licensing requirements prior to award of the contracts.

Criterion 3: Key Personnel (Maximum 10 points)

The IRS will evaluate resumes of individuals designated by the Offeror as key personnel. The resumes must demonstrate the level of education and experience shown in Section J, J.1, Attachment 4, Position Descriptions/Qualifications. The overall composition of the proposed key personnel and how their experience and qualifications support the performance of this effort will be evaluated.

Criterion 4: Management Plan (Maximum 10 points)

The IRS will evaluate the Offeror's proposed management approach relative to the effectiveness, comprehensiveness and internal consistency of the proposed overall management system.

The Offeror's projected schedule will be evaluated on the proposed estimate of cases that will be processed per month during the life of the contract; the days and hours of operation of the work site(s); and the days and hours during which contacts will be referred to IRS in accord with the provisions of the Statement of Work. The IRS will evaluate the impact of the Offeror's proposed schedule on IRS operational costs.

The IRS will evaluate those performance measures developed by the Offeror beyond the minimum specified in Section C, and to supplement the report presentation with charts, graphs, etc.

IRS will evaluate the Offeror's endeavor to give the IRS the most accurate and illuminating reports of the proposed performance under this contract beyond the reporting minimums set forth in Section C. The IRS is interested in conciseness and accuracy of data, not volume.

Criterion 5: Synopsis of Proposed Operational Plan and Other Work

IRS will evaluate offerors' proposed various work plans and schedules for completeness in addressing requirements of the RFP, feasibility, comprehensiveness, effectiveness of management procedures and controls, and internal consistency. IRS will also consider organizational structure and placement within the company of the staff that will perform work required by this RFP, as well as the scope of authority of the project manager or site managers to solve operational and implementation problems that may arise.

IRS will evaluate offerors' proposed data exchange plans, data security plans, quality control plans, System Acceptance Testing (SAT) plans, and reporting plans for completeness in addressing requirements of the RFP, feasibility, comprehensiveness, effectiveness of management procedures and controls, and internal consistency.

M.3.2 SITE VISIT AND ORAL PRESENTATION

SITE VISIT AND ORAL PRESENTATION (Maximum 30 points)

IRS personnel will visit the proposed work sites and receive oral presentations from all offerors determined, on the basis of evaluation of their management and technical proposals, to be in the competitive range. IRS will evaluate oral presentations based on the offeror's ability to integrate all phases of the work for successful performance (including but not limited to interface with IRS, security arrangements, case processing, computer systems, telephone capabilities, database management and reports, capacity and effectiveness of data processing and communications facilities).

The Project Manager and the Site Manager will be evaluated on their familiarity with the overall operational procedures, issues and concerns with managing a work site of this nature.

M.4 PRICE EVALUATION

The Offeror shall submit rates for all contract line items to be considered responsive/eligible for contract award. Price evaluation will be undertaken concurrently with the technical evaluation. Although the proposed rates will not be scored, they will be evaluated for each mandatory contract line item described in Section B.

Price analysis will be conducted in accordance with the applicable techniques cited in the Federal Acquisition Regulation text at 15.805-3.

M.5 SUBCONTRACTING PLAN EVALUATION

NOT APPLICABLE TO SMALL BUSINESSES

The evaluation of this factor will consider the Offeror's proposed small business and small disadvantaged business subcontracting plan submitted in accordance with Section L.6.1(b)(4) and Section J, Attachment 2.

Non-compliance with the Subcontracting Plan requirements will be negotiation issues.

(a) Proposed Plan

The Offeror's proposed plan will be evaluated to determine whether it represents the maximum practicable opportunity for subcontracting. Maximum practicable opportunity is defined as reaching or exceeding the IRS goals specified in Section J, Attachment 2.

(b) Previous Performance

The Offeror's record of previous performance in carrying out the goals of the subcontracting plan (Section J, Attachment 2) will be considered for this subfactor.