[Code of Federal Regulations]

[Title 15, Volume 2]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 15CFR700.51]



[Page 93]

 

                  TITLE 15--COMMERCE AND FOREIGN TRADE

 

  CHAPTER VII--BUREAU OF INDUSTRY AND SECURITY, DEPARTMENT OF COMMERCE

 

PART 700_DEFENSE PRIORITIES AND ALLOCATIONS SYSTEM--Table of Contents

 

                 Subpart H_Special Priorities Assistance

 

Sec. 700.51  Requests for priority rating authority.



    (a) If a rated order is likely to be delayed because a person is 

unable to obtain items not normally rated under this regulation, the 

person may request the authority to use a priority rating in ordering 

the needed items. Examples of items for which priority ratings can be 

authorized include:

    (1) Production or construction equipment;

    (2) Computers when not used as production items; and

    (3) Expansion, rebuilding or replacing plant facilities.

    (b) Rating authority for production or construction equipment. (1) A 

request for priority rating authority for production or construction 

equipment must be submitted to the appropriate Delegate Agency. The 

Delegate Agency may establish particular forms to be used for these 

requests (e.g., Department of Defense Form DD 691.)

    (2) When the use of a priority rating is authorized for the 

procurement of production or construction equipment, a rated order may 

be used either to purchase or to lease such equipment. However, in the 

latter case, the equipment may be leased only from a person engaged in 

the business of leasing such equipment or from a person willing to lease 

rather than sell.

    (c) Rating authority in advance of a rated prime contract. (1) In 

certain cases and upon specific request, Commerce, in order to promote 

the national defense, may authorize a person to place a priority rating 

on an order to a supplier in advance of the issuance of a rated prime 

contract. In these instances, the person requesting advance rating 

authority must obtain sponsorship of the request from the appropriate 

Delegate Agency. The person shall also assume any business risk 

associated with the placing of rated orders if these orders have to be 

cancelled in the event the rated prime contract is not issued.

    (2) The person must state the following in the request:



    It is understood that the authorization of a priority rating in 

advance of our receiving a rated prime contract from a Delegate Agency 

and our use of that priority rating with our suppliers in no way commits 

the Delegate Agency, the Department of Commerce or any other government 

agency to enter into a contract or order or to expend funds. Further, we 

understand that the Federal Government shall not be liable for any 

cancellation charges, termination costs, or other damages that may 

accrue if a rated prime contract is not eventually placed and, as a 

result, we must subsequently cancel orders placed with the use of the 

priority rating authorized as a result of this request.



    (3) In reviewing requests for rating authority in advance of a rated 

prime contract, Commerce will consider, among other things, the 

following criteria:

    (i) The probability that the prime contract will be awarded;

    (ii) The impact of the resulting rated orders on suppliers and on 

other authorized programs;

    (iii) Whether the contractor is the sole source;

    (iv) Whether the item being produced has a long lead time;

    (v) The political sensitivity of the project; and

    (vi) The time period for which the rating is being requested.

    (4) Commerce may require periodic reports on the use of the rating 

authority granted under paragraph (c) of this section.

    (5) If a rated prime contract is not issued, the person shall 

promptly notify all suppliers who have received rated orders pursuant to 

the advanced rating authority that the priority rating on those orders 

is cancelled.