what is assignment of bid means

What Is an Assignment of Bid in a Foreclosure?

Foreclosures can be a source of tragedy for one investor and a golden opportunity for another. In between the two lies a complex legal and financial process that requires many steps to complete. The assignment of bid occurs when the title for a distressed property is changing hands after an auction. It is one of the last steps in the process and is completed by the court and the eventual buyer.

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When a property's owner fails to pay its mortgage, the loan falls delinquent. After a significant delinquency, the mortgage lender will file paperwork with the local court to auction off the property. The court then reviews all the documents it receives from the property owner and the lender. If it finds that the lender's case is valid, the court will then auction off the property, generally starting at the price of the loan. Investors can then bid on the property. If the auction is successful, the winning bidder must complete steps to buy the property.

Bid Assignment Paperwork

Putting in the highest bid doesn't automatically make the bidder into the new owner. Instead, the winning bidder at the auction must file paperwork with the court, certifying that she did make that bid. If the bidder fails to turn in that form, the next highest bidder is considered the winner. If she does turn in the bid assignment form, the court grants her the right and obligation to buy that property at the price she bid. Real estate auctions are generally handled by a county-level court, and each county has its own bid assignment form.

Title Transfer

Once the court has received the bid assignment from the winning bidder, the court then finally completes the last step of the foreclosure process: transferring the title. This process legally takes the property's title away from the first owner and gives it to the new owner. That new owner must pay cash to the bank for that property, either by paying outright or by taking on a new mortgage and using that loan to pay the amount she bid. This completes the foreclosure process.

Failed Auctions

Auctions set their base price at the loan amount that's still owed to the bank. If the property is "under water," or worth less than the amount of the loan, often there will be no bidders. If no one in the auction bids on the property, the property then becomes "REO" or bank-owned. The court will formally take the legal title to the property away from the original owner and transfer it to the lender.

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Assignment of bid and assignment of right to bid.

Assignment of Right to Bid

This assignment is exactly as the name would imply, the assignment of the judgment holder’s right to bid the judgment amount at the auction. So, let’s say Wells Fargo has a foreclosure judgment against John Doe. Wells Fargo’s judgment says John Doe owes Wells Fargo $200,000.00 and the property will be sold off to satisfy the judgment amount. If Wells Fargo does not want to wait to have the property sold at the auction, a third party who was not part of the lawsuit can come to Wells Fargo and buy Wells Fargo’s judgment. At this point, Wells Fargo has sold its right to bid at the foreclosure auction but nobody else knows this. Enter the Assignment of Right to Bid. Wells Fargo executes one of these assignments and states that it is assigning its right to bid at the foreclosure auction to a third party. Like magic, Wells Fargo is paid and some third party who had nothing to do with the foreclosed loan, the lender, the borrower, or the foreclosure action, now has the absolute right to bid at the foreclosure auction just like Wells Fargo did.

The primary benefit for a lender like Wells Fargo in a situation like this is they will be paid, and paid quickly. After who knows how long of maintaining a non-performing asset on their balance sheets, they finally have some finality. Further, lenders are not in the business of owning real estate , otherwise they would be landlords instead. Thus, by utilizing the Assignment of Right to Bid, Wells Fargo did not have to appear at the foreclosure auction, never ran a risk of being an owner of the property, and, most importantly, cleared a non-performing asset off of its balance sheets.

Assignment of Bid

Now, take the same situation as above. Wells Fargo has a foreclosure judgment against John Doe for $200,000.00. Except this time, Wells Fargo goes to the foreclosure auction and wins the property at auction. On the day of the auction, the Clerk of the Circuit Court files a certificate of sale which states how much the property was sold for, who won the property at auction, and the date the property was auctioned off. Between the certificate of sale and the issuance of title to the winning bidder, there is a 10-day statutory period for objections. In this time period, Wells Fargo can assign its bid to some third party. When Wells Fargo assigns its bid to a third party, the third party will ultimately receive title to the purchased property at the end of the 10-day waiting period. Essentially, Wells Fargo has just resold the property without having to pay real estate agents, documentary stamp taxes, or recording fees that traditionally accompany the sale of real property. Upon recording the assignment of bid, and the end of the 10-day waiting period, the title is issued by the Clerk of the Circuit Court to whomever Wells Fargo has assigned their bid to. This means that the new party will be responsible for paying any taxes due to the Court and State of Florida. Further, this new third party is responsible for paying the Court any unpaid amounts still due and owing post foreclosure.

The primary benefit to using the Assignment of Bid, as opposed to the Assignment of Right to Bid, is that now Wells Fargo has resold the property for, hopefully, an amount that is close to the fair market value, as opposed to the foreclosed value. While Wells Fargo’s judgment may have been for $200,000, the property may have been worth $350,000. Most third parties are not going to pay over and above a judgment amount prior to a foreclosure sale, in hopes of becoming an owner. However, after the sale has occurred, it is more common to receive amounts above and beyond the judgment amount. And, just like with the Assignment of Right to Bid, Wells Fargo is not becoming a landlord/property owner.

Whether you are purchasing the Assignment, or selling the Assignment, knowing how to navigate the convoluted process is key. Failure to follow the appropriate timelines may result in a lender unintentionally becoming an owner of real estate as opposed to a lender. Moreover, if you are purchasing as an investment, it can become a complicated process to remove the homeowner or tenant that just had their home foreclosed. With 45 years of real estate experience, the attorneys at Chiumento Law, PLLC know how to help you navigate this process.

About the Author

Vincent L. Sullivan graduated in the top quartile of his class from the Florida Coastal School of Law in 2015. He specializes in Consumer Defense, Appeals, Debt Collection defense, Foreclosure defense, and Real Estate law. Mr. Sullivan has represented both landlords and tenants in court, which has given him an understanding of each party’s needs. He is passionate about consumer defense and has helped clients fight debt collectors and stop harassing phone calls. Mr. Sullivan also works in both state and federal appellate courts and has been able to successfully represent many homeowners and consumers who have appealed their cases. Mr. Sullivan lives in Palm Coast.

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What Is an Assignment of Contract?

Assignment of Contract Explained

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Assignment of contract allows one person to assign, or transfer, their rights, obligations, or property to another. An assignment of contract clause is often included in contracts to give either party the opportunity to transfer their part of the contract to someone else in the future. Many assignment clauses require that both parties agree to the assignment.

Learn more about assignment of contract and how it works.

What Is Assignment of Contract?

Assignment of contract means the contract and the property, rights, or obligations within it can be assigned to another party. An assignment of contract clause can typically be found in a business contract. This type of clause is common in contracts with suppliers or vendors and in intellectual property (patent, trademark , and copyright) agreements.

How Does Assignment of Contract Work?

An assignment may be made to anyone, but it is typically made to a subsidiary or a successor. A subsidiary is a business owned by another business, while a successor is the business that follows a sale, acquisition, or merger.

Let’s suppose Ken owns a lawn mowing service and he has a contract with a real estate firm to mow at each of their offices every week in the summer. The contract includes an assignment clause, so when Ken goes out of business, he assigns the contract to his sister-in-law Karrie, who also owns a lawn mowing service.

Before you try to assign something in a contract, check the contract to make sure it's allowed, and notify the other party in the contract.

Assignment usually is included in a specific clause in a contract. It typically includes transfer of both accountability and responsibility to another party, but liability usually remains with the assignor (the person doing the assigning) unless there is language to the contrary.

What Does Assignment of Contract Cover?

Generally, just about anything of value in a contract can be assigned, unless there is a specific law or public policy disallowing the assignment.

Rights and obligations of specific people can’t be assigned because special skills and abilities can’t be transferred. This is called specific performance.   For example, Billy Joel wouldn't be able to transfer or assign a contract to perform at Madison Square Garden to someone else—they wouldn't have his special abilities.

Assignments won’t stand up in court if the assignment significantly changes the terms of the contract. For example, if Karrie’s business is tree trimming, not lawn mowing, the contract can’t be assigned to her.

Assigning Intellectual Property

Intellectual property (such as copyrights, patents, and trademarks) has value, and these assets are often assigned. The U.S. Patent and Trademark Office (USPTO) says patents are personal property and that patent rights can be assigned. Trademarks, too, can be assigned. The assignment must be registered with the USPTO's Electronic Trademark Assignment System (ETAS) .  

The U.S. Copyright Office doesn't keep a database of copyright assignments, but they will record the document if you follow their procedure.

Alternatives to Assignment of Contract

There are other types of transfers that may be functional alternatives to assignment.

Licensing is an agreement whereby one party leases the rights to use a piece of property (for example, intellectual property) from another. For instance, a business that owns a patent may license another company to make products using that patent.  

Delegation permits someone else to act on your behalf. For example, Ken’s lawn service might delegate Karrie to do mowing for him without assigning the entire contract to her. Ken would still receive the payment and control the work.

Do I Need an Assignment of Contract?

Assignment of contract can be a useful clause to include in a business agreement. The most common cases of assignment of contract in a business situation are:

• Assignment of a trademark, copyright, or patent
• Assignments to a successor company in the case of the sale of the business
• Assignment in a contract with a supplier or customer
• Assignment in an employment contract or work for hire agreement

Before you sign a contract, look to see if there is an assignment clause, and get the advice of an attorney if you want to assign something in a contract.

Key Takeaways

• Assignment of contract is the ability to transfer rights, property, or obligations to another.
• Assignment of contract is a clause often found in business contracts.
• A party may assign a contract to another party if the contract permits it and no law forbids it.

Legal Information Institute. " Assignment ." Accessed Jan. 2, 2021.

Legal Information Institute. " Specific Performance ." Accessed Jan. 2, 2021.

U.S. Patent and Trademark Office. " 301 Ownership/Assignability of Patents and Applications [R-10.2019] ." Accessed Jan. 2, 2021.

Licensing International. " What is Licensing ." Accessed Jan. 2, 2021.

FAC Number: 2024-03 Effective Date: 02/23/2024

Part 2 - Definitions of Words and Terms

2.000 scope of part., subpart 2.1 - definitions, 2.101 definitions., subpart 2.2 - definitions clause, 2.201 contract clause..

(a) This part-

(1) Defines words and terms that are frequently used in the FAR;

(2) Provides cross-references to other definitions in the FAR of the same word or term; and

(3) Provides for the incorporation of these definitions in solicitations and contracts by reference.

(b) Other parts, subparts, and sections of this regulation (48 CFR chapter 1) may define other words or terms and those definitions only apply to the part, subpart, or section where the word or term is defined.

A word or a term, defined in this section, has the same meaning throughout this chapter (the Federal Acquisition Regulation (FAR)) unless the context in which the word or term is used clearly requires a different meaning or another FAR part, subpart, or section provides a different definition for the particular part or portion of the part. If a word or term that is defined in this section is defined differently in another part, subpart, or section of this chapter, the definition in this section includes a cross-reference to the other definitions and that part, subpart, or section applies to the word or term when used in that part, subpart, or section.

Acquisition means the acquiring by contract with appropriated funds of supplies or services (including construction ) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract.

Acquisition planning means the process by which the efforts of all personnel responsible for an acquisition are coordinated and integrated through a comprehensive plan for fulfilling the agency need in a timely manner and at a reasonable cost. It includes developing the overall strategy for managing the acquisition .

Activity Address Code (AAC ) means a distinct six-position code consisting of a combination of alpha and/or numeric characters assigned to identify specific agency offices, units, activities, or organizations by the General Services Administration for civilian agencies and by the Department of Defense for defense agencies.

Adequate evidence means information sufficient to support the reasonable belief that a particular act or omission has occurred.

Advisory and assistance services means those services provided under contract by nongovernmental sources to support or improve: organizational policy development; decision-making; management and administration; program and/or project management and administration; or R&D activities. It can also mean the furnishing of professional advice or assistance rendered to improve the effectiveness of Federal management processes or procedures (including those of an engineering and technical nature). In rendering the foregoing services, outputs may take the form of information, advice, opinions, alternatives, analyses, evaluations, recommendations, training and the day -to- day aid of support personnel needed for the successful performance of ongoing Federal operations. All advisory and assistance services are classified in one of the following definitional subdivisions:

(1) Management and professional support services, i.e., contractual services that provide assistance, advice or training for the efficient and effective management and operation of organizations, activities (including management and support services for R&D activities), or systems. These services are normally closely related to the basic responsibilities and mission of the agency originating the requirement for the acquisition of services by contract. Included are efforts that support or contribute to improved organization of program management, logistics management, project monitoring and reporting, data collection, budgeting, accounting, performance auditing, and administrative technical support for conferences and training programs.

(2) Studies, analyses and evaluations, i.e., contracted services that provide organized, analytical assessments/evaluations in support of policy development, decision-making, management, or administration. Included are studies in support of R&D activities. Also included are acquisitions of models, methodologies, and related software supporting studies, analyses or evaluations.

(3) Engineering and technical services, i.e., contractual services used to support the program office during the acquisition cycle by providing such services as systems engineering and technical direction (see 9.505-1(b)) to ensure the effective operation and maintenance of a weapon system or major system as defined in OMB Circular No.A-109 or to provide direct support of a weapon system that is essential to research, development, production, operation or maintenance of the system.

Affiliates means associated business concerns or individuals if, directly or indirectly either one controls or can control the other; or third party controls or can control both, except as follows:

(1) For use in subpart 9.4 , see the definition at 9.403 .

(2) For use of affiliates in size determinations, see the definition of "small business concern" in this section.

Agency head or " head of the agency " means the Secretary, Attorney General, Administrator, Governor, Chairperson, or other chief official of an executive agency , unless otherwise indicated, including any deputy or assistant chief official of an executive agency .

Alternate means a substantive variation of a basic provision or clause prescribed for use in a defined circumstance. It adds wording to, deletes wording from, or substitutes specified wording for a portion of the basic provision or clause. The alternate version of a provision or clause is the basic provision or clause as changed by the addition, deletion, or substitution (see 52.105 (a)).

Architect-engineer services , as defined in 40 U.S.C. 1102 , means—

(1) Professional services of an architectural or engineering nature, as defined by State law, if applicable, that are required to be performed or approved by a person licensed, registered, or certified to provide those services;

(2) Professional services of an architectural or engineering nature performed by contract that are associated with research, planning, development, design, construction , alteration, or repair of real property; and

(3) Those other professional services of an architectural or engineering nature, or incidental services, that members of the architectural and engineering professions (and individuals in their employ) may logically or justifiably perform, including studies, investigations, surveying and mapping, tests, evaluations, consultations, comprehensive planning, program management, conceptual designs, plans and specifications, value engineering , construction phase services, soils engineering, drawing reviews, preparation of operating and maintenance manuals, and other related services.

Assignment of claims means the transfer or making over by the contractor to a bank, trust company, or other financing institution, as security for a loan to the contractor, of its right to be paid by the Government for contract performance.

Assisted acquisition means a type of interagency acquisition where a servicing agency performs acquisition activities on a requesting agency 's behalf, such as awarding and administering a contract, task order , or delivery order .

Basic research means that research directed toward increasing knowledge in science. The primary aim of basic research is a fuller knowledge or understanding of the subject under study, rather than any practical application of that knowledge.

Best value means the expected outcome of an acquisition that, in the Government's estimation, provides the greatest overall benefit in response to the requirement.

Bid sample means a product sample required to be submitted by an offeror to show characteristics of the offered products that cannot adequately be described by specifications, purchase descriptions, or the solicitation ( e.g., balance, facility of use, or pattern).

Biobased product means a product determined by the U.S. Department of Agriculture to be a commercial product or industrial product (other than food or feed) that is composed, in whole or in significant part, of biological products , including renewable domestic agricultural materials and forestry materials.

Broad agency announcement means a general announcement of an agency’s research interest including criteria for selecting proposals and soliciting the participation of all offerors capable of satisfying the Government’s needs (see 6.102 (d)(2)).

Building or work means construction activity as distinguished from manufacturing, furnishing of materials, or servicing and maintenance work. The terms include, without limitation, buildings, structures, and improvements of all types, such as bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, pumping stations, heavy generators, railways, airports, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, canals, dredging, shoring, rehabilitation and reactivation of plants, scaffolding, drilling, blasting, excavating, clearing, and landscaping. The manufacture or furnishing of materials, articles, supplies , or equipment (whether or not a Federal or State agency acquires title to such materials, articles, supplies , or equipment during the course of the manufacture or furnishing, or owns the materials from which they are manufactured or furnished) is not "building" or "work" within the meaning of this definition unless conducted in connection with and at the site of such building or work as is described in the foregoing sentence, or under the United States Housing Act of 1937 and the Housing Act of 1949 in the construction or development of the project.

Bundling —

(1) Means a subset of consolidation that combines two or more requirements for supplies or services, previously provided or performed under separate smaller contracts (see paragraph (2) of this definition), into a solicitation for a single contract, a multiple-award contract , or a task or delivery order that is likely to be unsuitable for award to a small business concern (even if it is suitable for award to a small business with a Small Business Teaming Arrangement ) due to—

(i) The diversity, size, or specialized nature of the elements of the performance specified;

(ii) The aggregate dollar value of the anticipated award;

(iii) The geographical dispersion of the contract performance sites; or

(iv) Any combination of the factors described in paragraphs (1)(i), (ii), and (iii) of this definition.

(2) "Separate smaller contract" as used in this definition, means a contract that has been performed by one or more small business concerns or that was suitable for award to one or more small business concerns.

Business unit means any segment of an organization, or an entire business organization that is not divided into segments .

Certified cost or pricing data means " cost or pricing data " that were required to be submitted in accordance with FAR 15.403-4 and 15.403-5 and have been certified, or is required to be certified, in accordance with 15.406-2 . This certification states that, to the best of the person’s knowledge and belief, the cost or pricing data is accurate, complete, and current as of a date certain before contract award. Cost or pricing data is required to be certified in certain procurements (10 U.S.C. chapter 271 and 41 U.S.C. chapter 35 ).

Change-of-name agreement means a legal instrument executed by the contractor and the Government that recognizes the legal change of name of the contractor without disturbing the original contractual rights and obligations of the parties.

Change order means a written order, signed by the contracting officer , directing the contractor to make a change that the Changes clause authorizes the contracting officer to order without the contractor’s consent.

Chief Acquisition Officer means an executive level acquisition official responsible for agency performance of acquisition activities and acquisition programs created pursuant to 41 U.S.C. 1702 .

Chief of mission means the principal officer in charge of a diplomatic mission of the United States or of a United States office abroad which is designated by the Secretary of State as diplomatic in nature, including any individual assigned under section 502(c) of the Foreign Service Act of 1980 (Public Law 96-465) to be temporarily in charge of such a mission or office.

Claim 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 the contract. However, a written demand or written assertion by the contractor seeking the payment of money exceeding $100,000 is not a claim under 41 U.S.C. chapter 71 , Contract Disputes, until certified as required by the statute. A voucher, invoice , or other routine request for payment that is not in dispute when submitted is not a claim . The submission may be converted to a claim , by written notice to the contracting officer as provided in 33.206 (a), if it is disputed either as to liability or amount or is not acted upon in a reasonable time.

Classified acquisition means an acquisition in which offerors must have access to classified information to properly submit an offer or quotation, to understand the performance requirements, or to perform the contract.

Classified contract means any contract in which the contractor or its employees must have access to classified information during contract performance. A contract may be a classified contract even though the contract document itself is unclassified.

Classified information means any knowledge that can be communicated or any documentary material, regardless of its physical form or characteristics, that—

(i) Is owned by, is produced by or for, or is under the control of the United States Government; or

(ii) Has been classified by the Department of Energy as privately generated restricted data following the procedures in 10 CFR 1045.21 ; and

(2) Must be protected against unauthorized disclosure according to Executive Order12958, Classified National Security Information, April 7,1995, or classified in accordance with the Atomic Energy Act of 1954.

Cognizant Federal agency means the Federal agency that, on behalf of all Federal agencies , is responsible for establishing final indirect cost rates and forward pricing rates, if applicable, and administering cost accounting standards for all contracts in a business unit .

Combatant commander means the commander of a unified or specified combatant command established in accordance with 10 U.S.C. 161.

Commercial and Government Entity (CAGE) code means—

(1) An identifier assigned to entities located in the United States or its outlying areas by the Defense Logistics Agency (DLA) Commercial and Government Entity (CAGE) Branch to identify a commercial or government entity by unique location; or

(2) An identifier assigned by a member of the North Atlantic Treaty Organization (NATO) or by the NATO Support and Procurement Agency (NSPA) to entities located outside the United States and its outlying areas that the DLA Commercial and Government Entity (CAGE) Branch records and maintains in the CAGE master file. This type of code is known as a NATO CAGE (NCAGE) code.

Commercial component means any component that is a commercial product .

Commercial computer software means any computer software that is a commercial product or commercial service .

Commercial product means—

(1) A product, other than real property, that is of a type customarily used by the general public or by nongovernmental entities for purposes other than governmental purposes, and–

(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) A product that evolved from a product described in paragraph (1) of this definition 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) A product that would satisfy a criterion expressed in paragraph (1) or (2) of this definition, except 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 products meeting the requirements of paragraph (1), (2), or (3) of this definition that are of a type customarily combined and sold in combination to the general public;

(5) A product, or combination of products , referred to in paragraphs (1) through (4) of this definition, even though the product, or combination of products , is transferred between or among separate divisions, subsidiaries, or affiliates of a contractor; or

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

Commercial service means—

(1) Installation services, maintenance services, repair services, training services, and other services if–

(i) Such services are procured for support of a commercial product as defined in this section, regardless of whether such services are provided by the same source or at the same time as the commercial product ; and

(ii) The source of such services provides similar services contemporaneously to the general public under terms and conditions similar to those offered to the Federal Government;

(2) 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 or specific outcomes to be achieved and under standard commercial terms and conditions. For purposes of these services–

(i) Catalog price means a price included in a catalog, price list, schedule, or other form that is regularly maintained by the manufacturer or vendor, is either published or otherwise available for inspection by customers, and states prices at which sales are currently, or were last, made to a significant number of buyers constituting the general public; and

(ii) Market prices means current prices that are established in the course of ordinary trade between buyers and sellers free to bargain and that can be substantiated through competition or from sources independent of the offerors ; or

(3) A service referred to in paragraph (1) or (2) of this definition, even though the service is transferred between or among separate divisions, subsidiaries, or affiliates of a contractor.

Commercially available off-the-shelf (COTS) item —

(1) Means any item of supply (including construction material) that is–

(i) A commercial product (as defined in paragraph (1) of the definition of “ commercial product ” in this section);

(ii) Sold in substantial quantities in the commercial marketplace; and

(iii) Offered to the Government, under a contract or subcontract at any tier, without modification, in the same form in which it is sold in the commercial marketplace; and

(2) Does not include bulk cargo, as defined in 46 U.S.C. 40102(4) , such as agricultural products and petroleum products .

Common item means material that is common to the applicable Government contract and the contractor's other work, except that for use in the clause at 52.246-26 , see the definition in paragraph (a) of that clause.

Component means any item supplied to the Government as part of an end item or of another component , except that for use in—

(1) Part 25, see the definition in 25.003 ;

(2) 52.225-1 and 52.225-3 , see the definition in 52.225-1 (a) and 52.225-3 (a);

(3) 52.225-9 and 52.225-11 , see the definition in 52.225-9 (a) and 52.225-11 (a); and

(4) 52.225-21 and 52.225-23 , see the definition in 52.225-21 (a) and 52.225-23 (a).

Computer database or "database" means a collection of recorded information in a form capable of, and for the purpose of, being stored in, processed, and operated on by a computer. The term does not include computer software .

Computer software —

(i) Computer programs that comprise a series of instructions, rules, routines, or statements, regardless of the media in which recorded, that allow or cause a computer to perform a specific operation or series of operations; and

(ii) Recorded information comprising source code listings, design details, algorithms, processes, flow charts, formulas, and related material that would enable the computer program to be produced, created, or compiled.

(2) Does not include computer databases or computer software documentation .

Computer software documentation means owner’s manuals, user’s manuals, installation instructions, operating instructions, and other similar items, regardless of storage medium, that explain the capabilities of the computer software or provide instructions for using the software.

Consent to subcontract means the contracting officer ’s written consent for the prime contractor to enter into a particular subcontract.

Consolidation or consolidated requirement —

(1) Means a solicitation for a single contract, a multiple-award contract , a task order , or a delivery order to satisfy-

(i) Two or more requirements of the Federal agency for supplies or services that have been provided to or performed for the Federal agency under two or more separate contracts, each of which was lower in cost than the total cost of the contract for which offers are solicited; or

(ii) Requirements of the Federal agency for construction projects to be performed at two or more discrete sites.

(2) "Separate contract" as used in this definition, means a contract that has been performed by any business, including small and other than small business concerns.

Construction means construction , alteration, or repair (including dredging, excavating, and painting) of buildings, structures, or other real property. For purposes of this definition, the terms "buildings, structures, or other real property" include, but are not limited to, improvements of all types, such as bridges, dams, plants, highways, parkways, streets, subways, tunnels, sewers, mains, power lines, cemeteries, pumping stations, railways, airport facilities, terminals, docks, piers, wharves, ways, lighthouses, buoys, jetties, breakwaters, levees, canals, and channels. Construction does not include the manufacture, production, furnishing, construction , alteration, repair, processing, or assembling of vessels, aircraft, or other kinds of personal property (except that for use in subpart 22.5 , see the definition at 22.502 ).

Contiguous United States (CONUS) means the 48 contiguous States and the District of Columbia.

Contingency operation ( 10 U.S.C.101(a)(13) ) means a military operation that-

(1) Is designated by the Secretary of Defense as an operation in which members of the armed forces are or may become involved in military actions, operations, or hostilities against an enemy of the United States or against an opposing military force; or

(2) Results in the call or order to, or retention on, active duty of members of the uniformed services under sections 688 , 12301(a) , 12302 , 12304 , 12304a , 12305 , or 12406 of title 10 of the United States Code, Chapter 13 of title 10 of the United States Code , and section 3713 of title 14 of the United States Code, or any other provision of law during a war or during a national emergency declared by the President or Congress.

Continued portion of the contract means the portion of a contract that the contractor must continue to perform following a partial termination .

Contract means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction ) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds and that, except as otherwise authorized, are in writing . In addition to bilateral instruments, contracts include (but are not limited to) awards and notices of awards; job orders or task letters issued under basic ordering agreements; letter contracts; orders, such as purchase orders , under which the contract becomes effective by written acceptance or performance; and bilateral contract modifications . Contracts do not include grants and cooperative agreements covered by 31 U.S.C.6301 , et seq. For discussion of various types of contracts, see part  16.

Contract administration office means an office that performs-

(1) Assigned postaward functions related to the administration of contracts; and

(2) Assigned preaward functions.

Contract clause or "clause" means a term or condition used in contracts or in both solicitations and contracts, and applying after contract award or both before and after award.

Contract modification means any written change in the terms of a contract (see 43.103 ).

Contracting means purchasing, renting, leasing, or otherwise obtaining supplies or services from nonfederal sources. Contracting includes description (but not determination) of supplies and services required, selection and solicitation of sources, preparation and award of contracts, and all phases of contract administration. It does not include making grants or cooperative agreements.

Contracting activity means an element of an agency designated by the agency head and delegated broad authority regarding acquisition functions.

Contracting office means an office that awards or executes a contract for supplies or services and performs postaward functions not assigned to a contract administration office (except for use in part 48, see also 48.001 ).

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 . "Administrative contracting officer (ACO)" refers to a contracting officer who is administering contracts. "Termination contracting officer (TCO)" refers to a contracting officer who is settling terminated contracts. A single contracting officer may be responsible for duties in any or all of these areas. Reference in this regulation (48 CFR chapter 1) to administrative contracting officer or termination contracting officer does not-

(1) Require that a duty be performed at a particular office or activity; or

(2) Restrict in any way a contracting officer in the performance of any duty properly assigned.

Contracting officer’s representative (COR ) means an individual, including a contracting officer ’s technical representative (COTR), designated and authorized in writing by the contracting officer to perform specific technical or administrative functions.

Conviction means a judgment or conviction of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or a plea, and includes a conviction entered upon a plea of nolo contendere. For use in subpart 23.5 , see the definition at 23.503 .

Cost or pricing data ( 10 U.S.C. 3701(1) and 41 U.S.C. chapter 35 ) means all facts that, as of the date of price agreement, or, if applicable, an earlier date agreed upon between the parties that is as close as practicable to the date of agreement on price, prudent buyers and sellers would reasonably expect to affect price negotiations significantly. Cost or pricing data are factual, not judgmental; and are verifiable. While they do not indicate the accuracy of the prospective contractor’s judgment about estimated future costs or projections, they do include the data forming the basis for that judgment. Cost or pricing data are more than historical accounting data; they are all the facts that can be reasonably expected to contribute to the soundness of estimates of future costs and to the validity of determinations of costs already incurred. They also include, but are not limited to, such factors as-

(1) Vendor quotations;

(2) Nonrecurring costs;

(3) Information on changes in production methods and in production or purchasing volume;

(4) Data supporting projections of business prospects and objectives and related operations costs;

(5) Unit-cost trends such as those associated with labor efficiency;

(6) Make-or-buy decisions;

(7) Estimated resources to attain business goals; and

(8) Information on management decisions that could have a significant bearing on costs.

Cost realism means that the costs in an offeror ’s proposal-

(1) Are realistic for the work to be performed;

(2) Reflect a clear understanding of the requirements; and

(3) Are consistent with the various elements of the offeror ’s technical proposal.

Cost sharing means an explicit arrangement under which the contractor bears some of the burden of reasonable, allocable, and allowable contract cost.

Customs territory of the United States means the 50 States, the District of Columbia, and Puerto Rico.

Data other than certified cost or pricing data means pricing data, cost data, and judgmental information necessary for the contracting officer to determine a fair and reasonable price or to determine cost realism . Such data may include the identical types of data as certified cost or pricing data , consistent with Table 15-2 of 15.408 , but without the certification. The data may also include, for example, sales data and any information reasonably required to explain the offeror ’s estimating process, including, but not limited to–

(1) The judgmental factors applied and the mathematical or other methods used in the estimate, including those used in projecting from known data; and

(2) The nature and amount of any contingencies included in the proposed price.

Day means, unless otherwise specified, a calendar day .

Debarment means action taken by a debarring official under 9.406 to exclude a contractor from Government contracting and Government-approved subcontracting for a reasonable, specified period; a contractor that is excluded is "debarred."

Delivery order means an order for supplies placed against an established contract or with Government sources.

Depreciation means a charge to current operations that distributes the cost of a tangible capital asset, less estimated residual value , over the estimated useful life of the asset in a systematic and logical manner. It does not involve a process of valuation. Useful life refers to the prospective period of economic usefulness in a particular contractor’s operations as distinguished from physical life; it is evidenced by the actual or estimated retirement and replacement practice of the contractor.

Descriptive literature means information provided by an offeror , such as cuts, illustrations, drawings, and brochures, that shows a product’s characteristics or construction of a product or explains its operation. The term includes only that information needed to evaluate the acceptability of the product and excludes other information for operating or maintaining the product.

Design-to-cost means a concept that establishes cost elements as management goals to achieve the best balance between life-cycle cost, acceptable performance, and schedule. Under this concept, cost is a design constraint during the design and development phases and a management discipline throughout the acquisition and operation of the system or equipment.

Designated operational area means a geographic area designated by the combatant commander or subordinate joint force commander for the conduct or support of specified military operations.

Direct acquisition means a type of interagency acquisition where a requesting agency places an order directly against a servicing agency ’s indefinite-delivery contract. The servicing agency manages the indefinite-delivery contract but does not participate in the placement or administration of an order.

Direct cost means any cost that is identified specifically with a particular final cost objective. Direct costs are not limited to items that are incorporated in the end product as material or labor. Costs identified specifically with a contract are direct costs of that contract. All costs identified specifically with other final cost objectives of the contractor are direct costs of those cost objectives.

Disaster Response Registry means a voluntary registry of contractors who are willing to perform debris removal, distribution of supplies , reconstruction, and other disaster or emergency relief activities established in accordance with 6 U.S.C. 796 , Registry of Disaster Response Contractors. The Registry contains information on contractors who are willing to perform disaster or emergency relief activities within the United States and its outlying areas . The Registry is accessed via the Internet at https://www.sam.gov , Search Records, Advanced Search, Disaster Response Registry Search. (See 26.205.)

Drug-free workplace means the site(s) for the performance of work done by the contractor in connection with a specific contract where employees of the contractor are prohibited from engaging in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance.

Earned value management system means a project management tool that effectively integrates the project scope of work with cost, schedule and performance elements for optimum project planning and control. The qualities and operating characteristics of an earned value management system are described in Electronic Industries Alliance Standard 748 (EIA-748), Earned Value Management Systems . (See OMB Circular A-11, part  7.)

Economically disadvantaged women-owned small business (EDWOSB) concern - (see definition of "Women-Owned Small Business (WOSB) Program" in this section).

Effective date of termination means the date on which the notice of termination requires the contractor to stop performance under the contract. If the contractor receives the termination notice after the date fixed for termination, then the effective date of termination means the date the contractor receives the notice.

Electronic commerce means electronic techniques for accomplishing business transactions including electronic mail or messaging, World Wide Web technology, electronic bulletin boards, purchase cards, electronic funds transfer , and electronic data interchange .

Electronic data interchange (EDI ) means a technique for electronically transferring and storing formatted information between computers utilizing established and published formats and codes, as authorized by the applicable Federal Information Processing Standards.

Electronic Funds Transfer (EFT ) means any transfer of funds, other than a transaction originated by cash, check, or similar paper instrument, that is initiated through an electronic terminal, telephone, computer, or magnetic tape, for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit an account. The term includes Automated Clearing House transfers, Fedwire transfers, and transfers made at automatic teller machines and point-of-sale terminals. For purposes of compliance with 31 U.S.C.3332 and implementing regulations at 31 CFR part 208 , the term " electronic funds transfer " includes a Governmentwide commercial purchase card transaction.

Electronic Funds Transfer (EFT) indicator means a four-character suffix to the unique entity identifier . The suffix is assigned at the discretion of the commercial, nonprofit, or Government entity to establish additional System for Award Management records for identifying alternative EFT accounts (see subpart 32.11 ) for the same entity.

Emergency , as used in 6.208 , 13.201 , 13.500 , 18.001 , 18.202 , 18.203 , and subpart 26.2 , means any occasion or instance for which, in the determination of the President, Federal assistance is needed to supplement State and local efforts and capabilities to save lives and to protect property and public health and safety, or to lessen or avert the threat of a catastrophe in any part of the United States ( 42 U.S.C. 5122 ).

End product means supplies delivered under a line item of a Government contract, except for use in part 25 and the associated clauses at 52.225-1 , 52.225-3 , and 52.225-5 , see the definitions in 25.003 , 52.225-1 (a), 52.225-3 (a), and 52.225-5 (a).

Energy-efficient product —

(1) Means a product that–

(i) Meets Department of Energy and Environmental Protection Agency criteria for use of the Energy Star trademark label; or

(ii) Is in the upper 25 percent of efficiency for all similar products as designated by the Department of Energy’s Federal Energy Management Program.

(2) As used in this definition, the term "product" does not include any energy-consuming product or system designed or procured for combat or combat-related missions ( 42 U.S.C. 8259b ).

Energy-efficient standby power devices means products that use—

(1) External standby power devices, or that contain an internal standby power function; and

(2) No more than one watt of electricity in their standby power consuming mode or meet recommended low standby levels as designated by the Department of Energy Federal Energy Management Program.

Energy-savings performance contract means a contract that requires the contractor to-

(1) Perform services for the design, acquisition , financing, installation, testing, operation, and where appropriate, maintenance and repair, of an identified energy conservation measure or series of measures at one or more locations;

(2) Incur the costs of implementing the energy savings measures, including at least the cost (if any) incurred in making energy audits, acquiring and installing equipment, and training personnel in exchange for a predetermined share of the value of the energy savings directly resulting from implementation of such measures during the term of the contract; and

(3) Guarantee future energy and cost savings to the Government.

Environmentally preferable means products or services that have a lesser or reduced effect on human health and the environment when compared with competing products or services that serve the same purpose. This comparison may consider raw materials acquisition , production, manufacturing, packaging, distribution, reuse, operation, maintenance, or disposal of the product or service.

Excess personal property means any personal property under the control of a Federal agency that the agency head determines is not required for its needs or for the discharge of its responsibilities.

Executive agency means an executive department, a military department, or any independent establishment within the meaning of 5 U.S.C.101 , 102 , and 104(1) , respectively, and any wholly owned Government corporation within the meaning of 31 U.S.C.9101 .

Facilities capital cost of money means "cost of money as an element of the cost of facilities capital" as used at 48 CFR 9904.414 -Cost Accounting Standard-Cost of Money as an Element of the Cost of Facilities Capital.

Federal agency means any executive agency or any independent establishment in the legislative or judicial branch of the Government (except the Senate, the House of Representatives, the Architect of the Capitol, and any activities under the Architect’s direction).

Federally-controlled facilities means—

(1) Federally-owned buildings or leased space, whether for single or multi-tenant occupancy, and its grounds and approaches, all or any portion of which is under the jurisdiction, custody or control of a department or agency;

(2) Federally-controlled commercial space shared with non-government tenants. For example, if a department or agency leased the 10th floor of a commercial building, the Directive applies to the 10th floor only;

(3) Government-owned, contractor-operated facilities, including laboratories engaged in national defense research and production activities; and

(4) Facilities under a management and operating contract, such as for the operation, maintenance, or support of a Government-owned or Government-controlled research, development, special production, or testing establishment.

Federally-controlled information system means an information system ( 44 U.S.C. 3502(8) used or operated by a Federal agency , or a contractor or other organization on behalf of the agency ( 44 U.S.C. 3544(a)(1)(A) ).

Federally Funded Research and Development Centers (FFRDC’s ) means activities that are sponsored under a broad charter by a Government agency (or agencies) for the purpose of performing, analyzing, integrating, supporting, and/or managing basic or applied research and/or development, and that receive 70 percent or more of their financial support from the Government; and-

(1) A long-term relationship is contemplated;

(2) Most or all of the facilities are owned or funded by the Government; and

(3) The FFRDC has access to Government and supplier data, employees, and facilities beyond that common in a normal contractual relationship.

Final indirect cost rate means the indirect cost rate established and agreed upon by the Government and the contractor as not subject to change. It is usually established after the close of the contractor’s fiscal year (unless the parties decide upon a different period) to which it applies. For cost-reimbursement research and development contracts with educational institutions, it may be predetermined; that is, established for a future period on the basis of cost experience with similar contracts, together with supporting data.

First article means a preproduction model, initial production sample, test sample, first lot, pilot lot, or pilot models.

First article testing means testing and evaluating the first article for conformance with specified contract requirements before or in the initial stage of production.

F.o.b. means free on board. This term is used in conjunction with a physical point to determine-

(1) The responsibility and basis for payment of freight charges; and

(2) Unless otherwise agreed, the point where title for goods passes to the buyer or consignee.

F.o.b. destination means free on board at destination; i.e., the seller or consignor delivers the goods on seller’s or consignor’s conveyance at destination. Unless the contract provides otherwise, the seller or consignor is responsible for the cost of shipping and risk of loss. For use in the clause at 52.247-34 , see the definition at 52.247-34 (a).

F.o.b. origin means free on board at origin; i.e., the seller or consignor places the goods on the conveyance. Unless the contract provides otherwise, the buyer or consignee is responsible for the cost of shipping and risk of loss. For use in the clause at 52.247-29 , see the definition at 52.247-29 (a).

F.o.b.... (For other types of F.o.b., see 47.303 ).

Forward pricing rate agreement means a written agreement negotiated between a contractor and the Government to make certain rates available during a specified period for use in pricing contracts or modifications. These rates represent reasonable projections of specific costs that are not easily estimated for, identified with, or generated by a specific contract, contract end item, or task. These projections may include rates for such things as labor, indirect costs , material obsolescence and usage, spare parts provisioning, and material handling.

Forward pricing rate recommendation means a rate set unilaterally by the administrative contracting officer for use by the Government in negotiations or other contract actions when forward pricing rate agreement negotiations have not been completed or when the contractor will not agree to a forward pricing rate agreement .

Freight means supplies , goods, and transportable property.

Full and open competition , when used with respect to a contract action, means that all responsible sources are permitted to compete.

General and administrative (G&A) expense means any management, financial, and other expense which is incurred by or allocated to a business unit and which is for the general management and administration of the business unit as a whole. G&A expense does not include those management expenses whose beneficial or causal relationship to cost objectives can be more directly measured by a base other than a cost input base representing the total activity of a business unit during a cost accounting period.

Global warming potential means how much a given mass of a chemical contributes to global warming over a given time period compared to the same mass of carbon dioxide. Carbon dioxide’s global warming potential is defined as 1.0.

Governmentwide acquisition contract (GWAC ) means a task-order or delivery-order contract for information technology established by one agency for Governmentwide use that is operated-

(1) By an executive agent designated by the Office of Management and Budget pursuant to 40 U.S.C. 11302(e) ; or

(2) Under a delegation of procurement authority issued by the General Services Administration (GSA) prior to August 7,1996, under authority granted GSA by former section 40 U.S.C. 759 , repealed by Pub. L. 104-106. The Economy Act does not apply to orders under a Governmentwide acquisition contract .

Governmentwide point of entry (GPE ) means the single point where Government business opportunities greater than $25,000, including synopses of proposed contract actions, solicitations , and associated information, can be accessed electronically by the public. The GPE is located at https://www.sam.gov .

Head of the agency (see " agency head ").

Head of the contracting activity means the official who has overall responsibility for managing the contracting activity .

High global warming potential hydrofluorocarbons means any hydrofluorocarbons in a particular end use for which EPA’s Significant New Alternatives Policy (SNAP) program has identified other acceptable alternatives that have lower global warming potential . The SNAP list of alternatives is found at 40 CFR part 82 subpart G with supplemental tables of alternatives available at http://www.epa.gov/snap/ ).

Historically black college or university means an institution determined by the Secretary of Education to meet the requirements of 34 CFR 608.2 .

HUBZone means a historically underutilized business zone that is an area located within one or more qualified census tracts, qualified nonmetropolitan counties, lands within the external boundaries of an Indian reservation, qualified base closure areas, redesignated areas, governor-designated covered areas, or qualified disaster areas, as defined in 13 CFR 126.103 .

HUBZone contract means a contract awarded to a Small Business Administration certified " HUBZone small business concern" through any of the following procurement methods:

(1) A sole-source award to a HUBZone small business concern.

(2) Set-aside awards based on competition restricted to HUBZone small business concerns.

(3) Awards to HUBZone small business concerns through full and open competition after a price evaluation preference in favor of HUBZone small business concerns.

(4) Awards based on a reserve for HUBZone small business concerns in a solicitation for a multiple-award contract .

HUBZone small business concern means a small business concern that meets the requirements described in 13 CFR 126.200 , is certified by the Small Business Administration (SBA) and designated by SBA as a HUBZone small business concern in the Dynamic Small Business Search (DSBS) ( 13 CFR 126.103 ). SBA's designation also appears in SAM.

Humanitarian or peacekeeping operation means a military operation in support of the provision of humanitarian or foreign disaster assistance or in support of a peacekeeping operation under chapter VI or VII of the Charter of the United Nations. The term does not include routine training, force rotation, or stationing (( 10 U.S.C. 3015(2) and 41 U.S.C. 153(2) ).

Hydrofluorocarbons means compounds that contain only hydrogen, fluorine, and carbon.

In writing , "writing," or "written" means any worded or numbered expression that can be read, reproduced, and later communicated, and includes electronically transmitted and stored information.

Indirect cost means any cost not directly identified with a single final cost objective, but identified with two or more final cost objectives or with at least one intermediate cost objective.

Indirect cost rate means the percentage or dollar factor that expresses the ratio of indirect expense incurred in a given period to direct labor cost, manufacturing cost, or another appropriate base for the same period (see also " final indirect cost rate ").

Ineligible means excluded from Government contracting (and subcontracting, if appropriate) pursuant to statutory, Executive order, or regulatory authority other than this regulation ( 48 CFR chapter 1 ) and its implementing and supplementing regulations; for example, pursuant to–

(1) 40 U.S.C. chapter 31 , subchapter IV, Wage Rate Requirements ( Construction ), and its related statutes and implementing regulations;

(2) 41 U.S.C. chapter 67 , Service Contract Labor Standards;

(3) The Equal Employment Opportunity Acts and Executive orders;

(4) 41 U.S.C. chapter 65 , Contracts for Material, Supplies , Articles, and Equipment Exceeding $10,000;

(5) 41 U.S.C. chapter 83 , Buy American; or

(6) The Environmental Protection Acts and Executive orders.

Information and communication technology (ICT ) means information technology and other equipment, systems, technologies, or processes, for which the principal function is the creation, manipulation, storage, display, receipt, or transmission of electronic data and information, as well as any associated content. Examples of ICT include but are not limited to the following: Computers and peripheral equipment; information kiosks and transaction machines; telecommunications equipment; customer premises equipment; multifunction office machines; software; applications; websites; videos; and electronic documents.

Information security means protecting information and information systems from unauthorized access, use, disclosure, disruption, modification, or destruction in order to provide-

(1) Integrity, which means guarding against improper information modification or destruction, and includes ensuring information nonrepudiation and authenticity;

(2) Confidentiality, which means preserving authorized restrictions on access and disclosure, including means for protecting personal privacy and proprietary information; and

(3) Availability, which means ensuring timely and reliable access to, and use of, information.

Information technology means any equipment, or interconnected system(s) or subsystem(s) of equipment, that is used in the automatic acquisition , storage, analysis, evaluation, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information by the agency.

(1) For purposes of this definition, equipment is used by an agency if the equipment is used by the agency directly or is used by a contractor under a contract with the agency that requires-

(i) Its use; or

(ii) To a significant extent, its use in the performance of a service or the furnishing of a product.

(2) The term " information technology " includes computers, ancillary equipment (including imaging peripherals, input, output, and storage devices necessary for security and surveillance), peripheral equipment designed to be controlled by the central processing unit of a computer, software, firmware and similar procedures, services (including support services), and related resources.

(3) The term " information technology " does not include any equipment that-

(i) Is acquired by a contractor incidental to a contract; or

(ii) Contains imbedded information technology that is used as an integral part of the product, but the principal function of which is not the acquisition , storage, analysis, evaluation, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information. For example, HVAC (heating, ventilation, and air conditioning) equipment, such as thermostats or temperature control devices, and medical equipment where information technology is integral to its operation, are not information technology .

Inherently governmental function means, as a matter of policy, a function that is so intimately related to the public interest as to mandate performance by Government employees. This definition is a policy determination, not a legal determination. An inherently governmental function includes activities that require either the exercise of discretion in applying Government authority, or the making of value judgments in making decisions for the Government. Governmental functions normally fall into two categories: the act of governing, i.e., the discretionary exercise of Government authority, and monetary transactions and entitlements.

(1) An inherently governmental function involves, among other things, the interpretation and execution of the laws of the United States so as to-

(i) Bind the United States to take or not to take some action by contract, policy, regulation, authorization, order, or otherwise;

(ii) Determine, protect, and advance United States economic, political, territorial, property, or other interests by military or diplomatic action, civil or criminal judicial proceedings, contract management, or otherwise;

(iii) Significantly affect the life, liberty, or property of private persons;

(iv) Commission, appoint, direct, or control officers or employees of the United States ; or

(v) Exert ultimate control over the acquisition , use, or disposition of the property, real or personal, tangible or intangible, of the United States , including the collection, control, or disbursement of Federal funds.

(2) Inherently governmental functions do not normally include gathering information for or providing advice, opinions, recommendations, or ideas to Government officials. They also do not include functions that are primarily ministerial and internal in nature, such as building security, mail operations, operation of cafeterias, housekeeping, facilities operations and maintenance, warehouse operations, motor vehicle fleet management operations, or other routine electrical or mechanical services.

Inspection means examining and testing supplies or services (including, when appropriate, raw materials, components , and intermediate assemblies) to determine whether they conform to contract requirements.

Insurance means a contract that provides that for a stipulated consideration, one party undertakes to indemnify another against loss, damage, or liability arising from an unknown or contingent event.

Interagency acquisition means a procedure by which an agency needing supplies or services (the requesting agency ) obtains them from another agency (the servicing agency ), by an assisted acquisition or a direct acquisition . The term includes—

(1) Acquisitions under the Economy Act ( 31 U.S.C. 1535 ); and

(2) Non-Economy Act acquisitions completed under other statutory authorities, ( e.g. , General Services Administration Federal Supply Schedules in subpart 8.4 and Governmentwide acquisition contracts (GWACs)).

Invoice means a contractor’s bill or written request for payment under the contract for supplies delivered or services performed (see also " proper invoice ").

Irrevocable letter of credit means a written commitment by a federally insured financial institution to pay all or part of a stated amount of money, until the expiration date of the letter, upon the Government’s (the beneficiary) presentation of a written demand for payment. Neither the financial institution nor the offeror /contractor can revoke or condition the letter of credit.

Labor surplus area means a geographical area identified by the Department of Labor in accordance with 20 CFR part 654 , subpart A, as an area of concentrated unemployment or underemployment or an area of labor surplus.

Labor surplus area concern means a concern that together with its first-tier subcontractors will perform substantially in labor surplus areas . Performance is substantially in labor surplus areas if the costs incurred under the contract on account of manufacturing, production, or performance of appropriate services in labor surplus areas exceed 50 percent of the contract price.

Latent defect means a defect that exists at the time of acceptance but cannot be discovered by a reasonable inspection .

Line item means the basic structural element in a procurement instrument that describes and organizes the required product or service for pricing , delivery, inspection , acceptance, invoicing, and payment. The use of the term " line item " includes " subline item ," as applicable.

Line item number means either a numeric or alphanumeric format to identify a line item .

Major disaster , as used in 6.208 , 13.201 , 13.500, 18.001 , 18.202 , 18.203 , and subpart 26.2 , means any natural catastrophe (including any hurricane, tornado, storm, high water, winddriven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought), or regardless of cause, any fire, flood, or explosion, in any part of the United States , which, in the determination of the President, causes damage of sufficient severity and magnitude to warrant major disaster assistance under the Stafford Act to supplement the efforts and available resources of States, local governments, and disaster relief organizations in alleviating the damage, loss, hardship, or suffering caused thereby ( 42 U.S.C. 5122 ).

Major system means that combination of elements that will function together to produce the capabilities required to fulfill a mission need. The elements may include hardware, equipment, software, or any combination thereof, but exclude construction or other improvements to real property. A system is a major system if-

(1) The Department of Defense is responsible for the system and the total expenditures for research, development, test, and evaluation for the system are estimated to be more than $185 million based on Fiscal Year 2014 constant dollars or the eventual total expenditure for the acquisition exceeds $835 million based on Fiscal Year 2014 constant dollars (or any update of these thresholds based on a more recent fiscal year, as specified in the DoD Instruction 5000.02, "Operation of the Defense Acquisition System");

(2) A civilian agency is responsible for the system and total expenditures for the system are estimated to exceed $2.5 million or the dollar threshold for a " major system " established by the agency pursuant to Office of Management and Budget Circular A-109, entitled " Major System Acquisitions ," whichever is greater; or

(3) The system is designated a " major system " by the head of the agency responsible for the system ( 10 U.S.C. 3041 and 41 U.S.C. 109 ).

Make-or-buy program means that part of a contractor’s written plan for a contract identifying those major items to be produced or work efforts to be performed in the prime contractor’s facilities and those to be subcontracted.

Manufactured end product means any end product in product and service codes (PSC) 1000-9999, except-

(1) PSC 5510, Lumber and Related Basic Wood Materials;

(2) Product or service group (PSG) 87, Agricultural Supplies ;

(3) PSG 88, Live Animals;

(4) PSG 89, Subsistence;

(5) PSC 9410, Crude Grades of Plant Materials;

(6) PSC 9430, Miscellaneous Crude Animal Products , Inedible;

(7) PSC 9440, Miscellaneous Crude Agricultural and Forestry Products ;

(8) PSC 9610, Ores;

(9) PSC 9620, Minerals, Natural and Synthetic; and

(10) PSC 9630, Additive Metal Materials.

Market research means collecting and analyzing information about capabilities within the market to satisfy agency needs.

Master solicitation means a document containing special clauses and provisions that have been identified as essential for the acquisition of a specific type of supply or service that is acquired repetitively.

May denotes the permissive. However, the words "no person may ..." mean that no person is required, authorized, or permitted to do the act described.

Micro-purchase means an acquisition of supplies or services using simplified acquisition procedures , the aggregate amount of which does not exceed the micro-purchase threshold .

Micro-purchase threshold means $10,000, except it means-

(1) For acquisitions of construction subject to 40 U.S.C. chapter 31 , subchapter IV, Wage Rate Requirements ( Construction ), $2,000;

(2) For acquisitions of services subject to 41 U.S.C. chapter 67 , Service Contract Labor Standards, $2,500;  

(3) For acquisitions of supplies or services that, as determined by the head of the agency , are to be used to support a contingency operation ; to facilitate defense against or recovery from cyber, nuclear, biological, chemical or radiological attack; to support a request from the Secretary of State or the Administrator of the United States Agency for International Development to facilitate provision of international disaster assistance pursuant to 22 U.S.C. 2292 et seq.; or to support response to an emergency or major disaster ( 42 U.S.C. 5122 ), as described in 13.201 (g)(1), except for construction subject to 40 U.S.C. chapter 31 , subchapter IV, Wage Rate Requirements ( Construction ) ( 41 U.S.C. 1903 )–

(i) $20,000 in the case of any contract to be awarded and performed, or purchase to be made, inside the United States ; and

(ii) $35,000 in the case of any contract to be awarded and performed, or purchase to be made, outside the United States ; and

(4) For acquisitions of supplies or services from institutions of higher education ( 20 U.S.C. 1001 (a)) or related or affiliated nonprofit entities, or from nonprofit research organizations or independent research institutes—

(i) $10,000; or

(ii) A higher threshold, as determined appropriate by the head of the agency and consistent with clean audit findings under 31 U.S.C. chapter 75, Requirements for Single Audits; an internal institutional risk assessment; or State law.

Minority Institution means an institution of higher education meeting the requirements of Section 365(3) of the Higher Education Act of 1965 ( 20 U.S.C. 1067k ), including a Hispanic-serving institution of higher education, as defined in Section 502(a) of the Act ( 20 U.S.C. 1101a ).

Multi-agency contract (MAC ) means a task-order or delivery-order contract established by one agency for use by Government agencies to obtain supplies and services, consistent with the Economy Act (see 17.502-2 ). Multi-agency contracts include contracts for information technology established pursuant to 40 U.S.C. 11314 (a)(2).

Multiple-award contract means a contract that is—

(1) A Multiple Award Schedule contract issued by GSA ( e.g. , GSA Schedule Contract) or agencies granted Multiple Award Schedule contract authority by GSA ( e.g. , Department of Veterans Affairs) as described in FAR part  38;

(2) A multiple-award task-order or delivery-order contract issued in accordance with FAR subpart 16.5 , including Governmentwide acquisition contracts; or

(3) Any other indefinite-delivery, indefinite-quantity contract entered into with two or more sources pursuant to the same solicitation .

Must (see " shall ").

National defense means any activity related to programs for military or atomic energy production or construction , military assistance to any foreign nation, stockpiling, or space, except that for use in subpart 11.6 , see the definition in 11.601 .

Neutral person means an impartial third party, who serves as a mediator, fact finder, or arbitrator, or otherwise functions to assist the parties to resolve the issues in controversy. A neutral person may be a permanent or temporary officer or employee of the Federal Government or any other individual who is acceptable to the parties. A neutral person must have no official, financial, or personal conflict of interest with respect to the issues in controversy, unless the interest is fully disclosed in writing to all parties and all parties agree that the neutral person may serve ( 5 U.S.C.583 ).

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 (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 paragraphs (1) or (2) solely because the item is not yet in use.

Novation agreement means a legal instrument-

(1) Executed by the-

(i) Contractor (transferor);

(ii) Successor in interest (transferee); and

(iii) Government; and

(2) By which, among other things, the transferor guarantees performance of the contract, the transferee assumes all obligations under the contract, and the Government recognizes the transfer of the contract and related assets.

Offer means a response to a solicitation that, if accepted, would bind the offeror to perform the resultant contract. Responses to invitations for bids (sealed bidding) are offers called "bids" or "sealed bids"; responses to requests for proposals (negotiation) are offers called "proposals"; however, responses to requests for quotations (simplified acquisition ) are "quotations," not offers . For unsolicited proposals , see subpart 15.6 .

Offeror means offeror or bidder.

Office of Small and Disadvantaged Business Utilization means the Office of Small Business Programs when referring to the Department of Defense.

OMB Uniform Guidance at 2 CFR part 200 is the abbreviated title for Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ( 2 CFR part 200 ), which supersedes OMB Circulars A-21, A-87, A-89, A-102, A-110, A-122, and A-133, and the guidance in Circular A-50 on Audit Followup.

Option means a unilateral right in a contract by which, for a specified time, the Government may elect to purchase additional supplies or services called for by the contract, or may elect to extend the term of the contract.

Organizational conflict of interest means that because of other activities or relationships with other persons, a person is unable or potentially unable to render impartial assistance or advice to the Government, or the person’s objectivity in performing the contract work is or might be otherwise impaired, or a person has an unfair competitive advantage.

Outlying areas means-

(1) Commonwealths

(i) Puerto Rico.

(ii) The Northern Mariana Islands;

(2) Territories .

(i) American Samoa.

(iii) U.S. Virgin Islands; and

(3) Minor outlying islands .

(i) Baker Island.

(ii) Howland Island.

(iii) Jarvis Island.

(iv) Johnston Atoll.

(v) Kingman Reef.

(vi) Midway Islands.

(vii) Navassa Island.

(viii) Palmyra Atoll.

(ix) Wake Atoll.

Overtime means time worked by a contractor’s employee in excess of the employee’s normal workweek.

Overtime premium means the difference between the contractor’s regular rate of pay to an employee for the shift involved and the higher rate paid for overtime . It does not include shift premium, i.e., the difference between the contractor's regular rate of pay to an employee and the higher rate paid for extra-pay-shift work.

Ozone-depleting substance means any substance the Environmental Protection Agency designates in 40 CFR Part 82 as—

(1) Class I, including, but not limited to, chlorofluorocarbons, halons, carbon tetrachloride, and methyl chloroform; or

(2) Class II, including, but not limited to, hydrochlorofluorocarbons.

Partial termination means the termination of a part, but not all, of the work that has not been completed and accepted under a contract.

Past performance means an offeror ’s or contractor’s performance on active and physically completed contracts (see 4.804-4 ).

Performance-based acquisition (PBA ) means an acquisition structured around the results to be achieved as opposed to the manner by which the work is to be performed.

Performance Work Statement (PWS ) means a statement of work for performance-based acquisitions that describes the required results in clear, specific and objective terms with measurable outcomes.

Personal property means property of any kind or interest in it except real property, records of the Federal Government, and naval vessels of the following categories:

(1) Battleships;

(2) Cruisers;

(3) Aircraft carriers;

(4) Destroyers; and

(5) Submarines.

Personal services contract means a contract that, by its express terms or as administered, makes the contractor personnel appear to be, in effect, Government employees (see 37.104 ).

Plant clearance officer means an authorized representative of the contracting officer , appointed in accordance with agency procedures, responsible for screening, redistributing, and disposing of contractor inventory from a contractor’s plant or work site. The term "Contractor’s plant" includes, but is not limited to, Government-owned contractor-operated plants, Federal installations, and Federal and non-Federal industrial operations, as may be required under the scope of the contract.

Pollution prevention means any practice that-

(i) Reduces the amount of any hazardous substance, pollutant, or contaminant entering any waste stream or otherwise released into the environment (including fugitive emissions) prior to recycling, treatment, or disposal; and

(ii) Reduces the hazards to public health and the environment associated with the release of such substances, pollutants, and contaminants;

(2) Reduces or eliminates the creation of pollutants through increased efficiency in the use of raw materials, energy, water, or other resources; or

(3) Protects natural resources by conservation.

Power of attorney means the authority given one person or corporation to act for and obligate another, as specified in the instrument creating the power; in corporate suretyship, an instrument under seal that appoints an attorney-in-fact to act in behalf of a surety company in signing bonds (see also "attorney-in-fact" at 28.001 ).

Preaward survey means an evaluation of a prospective contractor’s capability to perform a proposed contract.

Preponderance of the evidence means proof by information that, compared with that opposing it, leads to the conclusion that the fact at issue is more probably true than not.

Pricing means the process of establishing a reasonable amount or amounts to be paid for supplies or services.

Principal means an officer, director, owner, partner, or a person having primary management or supervisory responsibilities within a business entity ( e.g. , general manager; plant manager; head of a division or business segment ; and similar positions).

Procurement (see " acquisition ").

Procuring activity means a component of an executive agency having a significant acquisition function and designated as such by the head of the agency . Unless agency regulations specify otherwise, the term " procuring activity " is synonymous with " contracting activity ."

Products has the same meaning as " supplies ."

Projected average loss means the estimated long-term average loss per period for periods of comparable exposure to risk of loss.

Proper invoice means an invoice that meets the minimum standards specified in 32.905 (b).

Purchase order , when issued by the Government, means an offer by the Government to buy supplies or services, including construction and research and development, upon specified terms and conditions, using simplified acquisition procedures .

Qualification requirement means a Government requirement for testing or other quality assurance demonstration that must be completed before award of a contract.

Qualified products list (QPL ) means a list of products that have been examined, tested, and have satisfied all applicable qualification requirements .

Qualifying offeror , as used in 13.106-1 and 15.304 , means an offeror that is determined to be a responsible source, submits a technically acceptable proposal that conforms to the requirements of the solicitation , and the contracting officer has no reason to believe would be likely to offer other than fair and reasonable pricing ( 10 U.S.C. 3206(c)(4) ).

Receiving report means written evidence that indicates Government acceptance of supplies delivered or services performed (see subpart 46.6 ). Receiving reports must meet the requirements of 32.905 (c).

Recovered material means waste materials and by- products recovered or diverted from solid waste, but the term does not include those materials and by- products generated from, and commonly reused within, an original manufacturing process. For use in subpart 11.3 for paper and paper products , see the definition at 11.301 .

Registered in the System for Award Management (SAM ) means that—

(1) The Contractor has entered all mandatory information, including the unique entity identifier and the Electronic Funds Transfer indicator (if applicable), the Commercial and Government Entity (CAGE) code , as well as data required by the Federal Funding Accountability and Transparency Act of 2006 (see subpart 4.14 ), into SAM;

(2) The Contractor has completed the Core, Assertions, Representations and Certifications, and Points of Contact sections of the registration in SAM;

(3) The Government has validated all mandatory data fields, to include validation of the Taxpayer Identification Number (TIN ) with the Internal Revenue Service (IRS). The contractor will be required to provide consent for TIN validation to the Government as a part of the SAM registration process; and

(4) The Government has marked the record Active.

Renewable energy means energy produced by solar, wind, geothermal, biomass, landfill gas, ocean (including tidal, wave, current, and thermal), municipal solid waste, or new hydroelectric generation capacity achieved from increased efficiency or additions of new capacity at an existing hydroelectric project (Energy Policy Act of 2005, 42 U.S.C. 15852 ).

Renewable energy technology means—

(1) Technologies that use renewable energy to provide light, heat, cooling, or mechanical or electrical energy for use in facilities or other activities; or

(2) The use of integrated whole-building designs that rely upon renewable energy resources, including passive solar design.

Requesting agency means the agency that has the requirement for an interagency acquisition .

Residual value means the proceeds, less removal and disposal costs, if any, realized upon disposition of a tangible capital asset. It usually is measured by the net proceeds from the sale or other disposition of the asset, or its fair value if the asset is traded in on another asset. The estimated residual value is a current forecast of the residual value .

Responsible audit agency means the agency that is responsible for performing all required contract audit services at a business unit .

Responsible prospective contractor means a contractor that meets the standards in 9.104 .

Scrap means personal property that has no value except its basic metallic, mineral, or organic content.

Segment means one of two or more divisions, product departments, plants, or other subdivisions of an organization reporting directly to a home office, usually identified with responsibility for profit and/or producing a product or service. The term includes-

(1) Government-owned contractor-operated (GOCO) facilities; and

(2) Joint ventures and subsidiaries (domestic and foreign) in which the organization has-

(i) A majority ownership; or

(ii) Less than a majority ownership, but over which it exercises control.

Self-insurance means the assumption or retention of the risk of loss by the contractor, whether voluntarily or involuntarily. Self-insurance includes the deductible portion of purchased insurance .

Senior procurement executive means the individual appointed pursuant to 41 U.S.C. 1702(c) who is responsible for management direction of the acquisition system of the executive agency , including implementation of the unique acquisition policies, regulations, and standards of the executive agency .

Service-disabled veteran-owned small business (SDVOSB) concern means a small business concern–

(i) Not less than 51 percent of which is owned and controlled by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans; and

(ii) The management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of a service-disabled veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran; or

(2) A small business concern eligible under the SDVOSB Program in accordance with 13 CFR part 128 (see subpart 19.14 ).

(3) Service-disabled veteran , as used in this definition, means a veteran as defined in 38 U.S.C.101(2) , with a disability that is service-connected, as defined in 38 U.S.C.101(16) , and who is registered in the Beneficiary Identification and Records Locator Subsystem, or successor system that is maintained by the Department of Veterans Affairs’ Veterans Benefits Administration, as a service-disabled veteran.

Service-disabled veteran-owned small business (SDVOSB) concern eligible under the SDVOSB Program means an SDVOSB concern that—

(1) Effective January 1, 2024, is designated in the System for Award Management (SAM ) as certified by the Small Business Administration (SBA) in accordance with 13 CFR 128.300; or

(2) Has represented that it is an SDVOSB concern in SAM and submitted a complete application for certification to SBA on or before December 31, 2023.

Service-disabled veteran-owned small business (SDVOSB) Program means a program that authorizes contracting officers to limit competition, including award on a sole-source basis, to SDVOSB concerns eligible under the SDVOSB Program.

Servicing agency means the agency that will conduct an assisted acquisition on behalf of the requesting agency .

Shall denotes the imperative.

Shipment means freight transported or to be transported.

Shop drawings means drawings submitted by the construction contractor or a subcontractor at any tier or required under a construction contract, showing in detail either or both of the following:

(1) The proposed fabrication and assembly of structural elements.

(2) The installation ( i.e., form, fit, and attachment details) of materials or equipment.

Should means an expected course of action or policy that is to be followed unless inappropriate for a particular circumstance.

Signature or "signed" means the discrete, verifiable symbol of an individual that, when affixed to a writing with the knowledge and consent of the individual, indicates a present intention to authenticate the writing. This includes electronic symbols.

Simplified acquisition procedures means the methods prescribed in part  13 for making purchases of supplies or services.

Simplified acquisition threshold means $250,000, except for—

(1) Acquisitions of supplies or services that, as determined by the head of the agency , are to be used to support a contingency operation ; to facilitate defense against or recovery from cyber, nuclear, biological, chemical, or radiological attack; to support a request from the Secretary of State or the Administrator of the United States Agency for International Development to facilitate provision of international disaster assistance pursuant to 22 U.S.C. 2292 et seq.; or to support response to an emergency or major disaster ( 42 U.S.C. 5122 ), ( 41 U.S.C. 1903 ), the term means–

(i) $800,000 for any contract to be awarded and performed, or purchase to be made, inside the United States ; and

(ii) $1.5 million for any contract to be awarded and performed, or purchase to be made, outside the United States ; and

(2) Acquisitions of supplies or services that, as determined by the head of the agency , are to be used to support a humanitarian or peacekeeping operation ( 10 U.S.C. 3015 ), the term means $500,000 for any contract to be awarded and performed, or purchase to be made, outside the United States .

Single, Governmentwide point of entry , means the one point of entry to be designated by the Administrator of OFPP that will allow the private sector to electronically access procurement opportunities Governmentwide.

Small business concern —

(1) Means a concern, including its affiliates , that is independently owned and operated, not dominant in its field of operation, and qualified as a small business under the criteria and size standards in 13 CFR part 121 (see 19.102 ).

(2) Affiliates , as used in this definition, means business concerns, one of whom directly or indirectly controls or has the power to control the others, or a third party or parties control or have the power to control the others. In determining whether affiliation exists, consideration is given to all appropriate factors including common ownership, common management, and contractual relationships. SBA determines affiliation based on the factors set forth at 13 CFR 121.103.

Small business subcontractor means a concern that does not exceed the size standard for the North American Industry Classification Systems code that the prime contractor determines best describes the product or service being acquired by the subcontract.

Small Business Teaming Arrangement —

(1) Means an arrangement where–

(i) Two or more small business concerns have formed a joint venture; or

(ii) A small business offeror agrees with one or more other small business concerns to have them act as its subcontractors under a specified Government contract. A Small Business Teaming Arrangement between the offeror and its small business subcontractor (s) exists through a written agreement between the parties that–

(A) Is specifically referred to as a " Small Business Teaming Arrangement "; and

(B) Sets forth the different responsibilities, roles, and percentages (or other allocations) of work as it relates to the acquisition ;

(i) For civilian agencies, may include two business concerns in a mentor-protégé relationship when both the mentor and the protégé are small or the protégé is small and the concerns have received an exception to affiliation pursuant to 13 CFR 121.103(h)(3)(ii) or (iii) .

(ii) For DoD, may include two business concerns in a mentor-protégé relationship in the Department of Defense Pilot Mentor-Protégé Program (see section 831 of the National Defense Authorization Act for Fiscal Year 1991 (Public Law 101-510; 10 U.S.C. 4901 note prec.)) when both the mentor and the protégé are small. There is no exception to joint venture size affiliation for offers received from teaming arrangements under the Department of Defense Pilot Mentor-Protégé Program; and

(3) See 13 CFR 121.103(b)(9) regarding the exception to affiliation for offers received from Small Business Teaming Arrangements in the case of a solicitation of offers for a bundled contract with a reserve.

Small disadvantaged business concern consistent with 13 CFR 124.1001, means a small business concern under the size standard applicable to the acquisition , that:

(1) Is at least 51 percent unconditionally and directly owned (as defined at 13 CFR 124.105) by—

(i) One or more socially disadvantaged (as defined at 13 CFR 124.103 ) and economically disadvantaged (as defined at 13 CFR 124.104 ) individuals who are citizens of the United States ; and

(ii) Each individual claiming economic disadvantage has a net worth not exceeding the threshold at 13 CFR 124.104(c)(2) after taking into account the applicable exclusions set forth at 13 CFR 124.104(c)(2); and

(2) The management and daily business operations of which are controlled (as defined at 13 CFR 124.106 ) by individuals who meet the criteria in paragraphs (1)(i) and (ii) of this definition.

Sole source acquisition means a contract for the purchase of supplies or services that is entered into or proposed to be entered into by an agency after soliciting and negotiating with only one source.

Solicitation means any request to submit offers or quotations to the Government. Solicitations under sealed bid procedures are called "invitations for bids." Solicitations under negotiated procedures are called "requests for proposals." Solicitations under simplified acquisition procedures may require submission of either a quotation or an offer .

Solicitation provision or provision means a term or condition used only in solicitations and applying only before contract award.

Source selection information means any of the following information that is prepared for use by an agency for the purpose of evaluating a bid or proposal to enter into an agency procurement contract, if that information has not been previously made available to the public or disclosed publicly:

(1) Bid prices submitted in response to an agency invitation for bids, or lists of those bid prices before bid opening.

(2) Proposed costs or prices submitted in response to an agency solicitation , or lists of those proposed costs or prices.

(3) Source selection plans.

(4) Technical evaluation plans.

(5) Technical evaluations of proposals.

(6) Cost or price evaluations of proposals.

(7) Competitive range determinations that identify proposals that have a reasonable chance of being selected for award of a contract.

(8) Rankings of bids, proposals, or competitors.

(9) Reports and evaluations of source selection panels, boards, or advisory councils.

(10) Other information marked as " Source Selection Information -See FAR 2.101 and 3.104 " based on a case-by-case determination by the head of the agency or the contracting officer , that its disclosure would jeopardize the integrity or successful completion of the Federal agency procurement to which the information relates.

Special competency means a special or unique capability, including qualitative aspects, developed incidental to the primary functions of the Federally Funded Research and Development Centers to meet some special need.

Special test equipment means either single or multipurpose integrated test units engineered, designed, fabricated, or modified to accomplish special purpose testing in performing a contract. It consists of items or assemblies of equipment including foundations and similar improvements necessary for installing special test equipment , and standard or general purpose items or components that are interconnected and interdependent so as to become a new functional entity for special testing purposes. Special test equipment does not include material, special tooling , real property, and equipment items used for general testing purposes or property that with relatively minor expense can be made suitable for general purpose use.

Special tooling means jigs, dies, fixtures, molds, patterns, taps, gauges, and all components of these items including foundations and similar improvements necessary for installing special tooling , and which are of such a specialized nature that without substantial modification or alteration their use is limited to the development or production of particular supplies or parts thereof or to the performance of particular services. Special tooling does not include material, special test equipment , real property, equipment, machine tools, or similar capital items.

State and local taxes means taxes levied by the States, the District of Columbia, outlying areas of the United States , or their political subdivisions.

Statement of Objectives (SOO ) means a Government-prepared document incorporated into the solicitation that states the overall performance objectives. It is used in solicitations when the Government intends to provide the maximum flexibility to each offeror to propose an innovative approach.

Subline item means a subset of a line item .

Substantial evidence means information sufficient to support the reasonable belief that a particular act or omission has occurred.

Substantially as follows or "substantially the same as," when used in the prescription and introductory text of a provision or clause, means that authorization is granted to prepare and utilize a variation of that provision or clause to accommodate requirements that are peculiar to an individual acquisition ; provided that the variation includes the salient features of the FAR provision or clause, and is not inconsistent with the intent, principle, and substance of the FAR provision or clause or related coverage of the subject matter.

Supplemental agreement means a contract modification that is accomplished by the mutual action of the parties.

Supplies means all property except land or interest in land. It includes (but is not limited to) public works, buildings, and facilities; ships, floating equipment, and vessels of every character, type, and description, together with parts and accessories; aircraft and aircraft parts, accessories, and equipment; machine tools; and the alteration or installation of any of the foregoing.

Supporting a diplomatic or consular mission means performing outside the United States under a contract administered by Federal agency personnel who are subject to the direction of a Chief of Mission .

Surety means an individual or corporation legally liable for the debt, default, or failure of a principal to satisfy a contractual obligation. The types of sureties referred to are as follows:

(1) An individual surety is one person, as distinguished from a business entity, who is liable for the entire penal amount of the bond.

(2) A corporate surety is licensed under various insurance laws and, under its charter, has legal power to act as surety for others.

(3) A cosurety is one of two or more sureties that are jointly liable for the penal sum of the bond. A limit of liability for each surety may be stated.

Surplus property means excess personal property not required by any Federal agency as determined by the Administrator of the General Services Administration (GSA). (See 41 CFR 102-36.40 ).

Suspension means action taken by a suspending official under 9.407 to disqualify a contractor temporarily from Government contracting and Government-approved subcontracting; a contractor that is disqualified is "suspended."

Sustainable acquisition means acquiring goods and services in order to create and maintain conditions-

(1) Under which humans and nature can exist in productive harmony; and

(2) That permit fulfilling the social, economic, and other requirements of present and future generations.

System for Award Management (SAM ) means the primary Government repository for prospective Federal awardee and Federal awardee information and the centralized Government system for certain contracting , grants, and other assistance-related processes. It includes—

(1) Data collected from prospective Federal awardees required for the conduct of business with the Government;

(2) Prospective contractor-submitted annual representations and certifications in accordance with FAR subpart 4.12 ; and

(3) Identification of those parties excluded from receiving Federal contracts, certain subcontracts, and certain types of Federal financial and non-financial assistance and benefits.

Task order means an order for services placed against an established contract or with Government sources.

Taxpayer Identification Number (TIN ) means the number required by the IRS to be used by the offeror in reporting income tax and other returns. The TIN may be either a Social Security Number or an Employer Identification Number.

Technical data means recorded information (regardless of the form or method of the recording) of a scientific or technical nature (including computer databases and computer software documentation ). This term does not include computer software or financial, administrative, cost or pricing , or management data or other information incidental to contract administration. The term includes recorded information of a scientific or technical nature that is included in computer databases (see 41 U.S.C. 116 ).

Terminated portion of the contract means the portion of a contract that the contractor is not to perform following a partial termination . For construction contracts that have been completely terminated for convenience, it means the entire contract, notwithstanding the completion of, and payment for, individual items of work before termination.

Termination for convenience means the exercise of the Government’s right to completely or partially terminate performance of work under a contract when it is in the Government’s interest.

Termination for default means the exercise of the Government’s right to completely or partially terminate a contract because of the contractor’s actual or anticipated failure to perform its contractual obligations.

Termination inventory means any property purchased, supplied, manufactured, furnished, or otherwise acquired for the performance of a contract subsequently terminated and properly allocable to the terminated portion of the contract . It includes Government-furnished property. It does not include any facilities, material, special test equipment , or special tooling that are subject to a separate contract or to a special contract requirement governing their use or disposition.

Unallowable cost means any cost that, under the provisions of any pertinent law, regulation, or contract, cannot be included in prices, cost-reimbursements, or settlements under a Government contract to which it is allocable.

Unique and innovative concept , when used relative to an unsolicited research proposal, means that-

(1) In the opinion and to the knowledge of the Government evaluator, the meritorious proposal-

(i) Is the product of original thinking submitted confidentially by one source;

(ii) Contains new, novel, or changed concepts, approaches, or methods;

(iii) Was not submitted previously by another; and

(iv) Is not otherwise available within the Federal Government.

(2) In this context, the term does not mean that the source has the sole capability of performing the research.

Unique entity identifier means a number or other identifier used to identify a specific commercial, nonprofit, or Government entity. See www.sam.gov for the designated entity for establishing unique entity identifiers .

United States , when used in a geographic sense, means the 50 States and the District of Columbia, except as follows:

(1) For use in subpart 3.10 , see the definition at 3.1001 .

(2) For use in subpart 22.8 , see the definition at 22.801 .

(3) For use in subpart 22.10 , see the definition at 22.1001 .

(4) For use in subpart 22.13 , see the definition at 22.1301 .

(5) For use in subpart 22.16 , see the definition at 22.1601 .

(6) For use in subpart 22.17 , see the definition at 22.1702 .

(7) For use in subpart 22.18 , see the definition at 22.1801 .

(8) For use in subpart 22.19 , see the definition at 22.1901 .

(9) For use in part  23 , see definition at 23.001 .

(10) For use in part  25 , see the definition at 25.003 .

(11) For use in part  27 , see the definition at 27.001 .

(12) For use in subpart 47.4 , see the definition at 47.401 .

Unsolicited proposal means a written proposal for a new or innovative idea that is submitted to an agency on the initiative of the offeror for the purpose of obtaining a contract with the Government, and that is not in response to a request for proposals, Broad Agency Announcement , Small Business Innovation Research topic, Small Business Technology Transfer Research topic, Program Research and Development Announcement, or any other Government-initiated solicitation or program.

Value engineering means an analysis of the functions of a program, project, system, product, item of equipment, building, facility, service, or supply of an executive agency , performed by qualified agency or contractor personnel, directed at improving performance, reliability, quality, safety, and life-cycle costs ( 41 U.S.C. 1711 ). For use in the clause at 52.248-2 , see the definition at 52.248-2 (b).

Value engineering change proposal (VECP ) —

(1) Means a proposal that–

(i) Requires a change to the instant contract to implement; and

(ii) Results in reducing the overall projected cost to the agency without impairing essential functions or characteristics, provided, that it does not involve a change–

(A) In deliverable end item quantities only;

(B) In research and development (R&D) items or R&D test quantities that are due solely to results of previous testing under the instant contract; or

(C) To the contract type only.

(2) For use in the clauses at-

(i) 52.248-2 , see the definition at 52.248-2 (b); and

(ii) 52.248-3 , see the definition at 52.248-3 (b).

Veteran-owned small business concern means a small business concern—

(1) Not less than 51 percent of which is owned and controlled by one or more veterans (as defined at 38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent of the stock of which is owned by one or more veterans; and

(2) The management and daily business operations of which are controlled by one or more veterans.

Virgin material means—

(1) Previously unused raw material, including previously unused copper, aluminum, lead, zinc, iron, other metal or metal ore; or

(2) Any undeveloped resource that is, or with new technology will become, a source of raw materials.

Voluntary consensus standards means common and repeated use of rules, conditions, guidelines or characteristics for products , or related processes and production methods and related management systems. Voluntary Consensus Standards are developed or adopted by domestic and international voluntary consensus standard making bodies ( e.g. , International Organization for Standardization (ISO) and ASTM-International). See OMB Circular A-119.

Warranty means a promise or affirmation given by a contractor to the Government regarding the nature, usefulness, or condition of the supplies or performance of services furnished under the contract.

Waste reduction means preventing or decreasing the amount of waste being generated through waste prevention, recycling, or purchasing recycled and environmentally preferable products .

Water consumption intensity means water consumption per square foot of building space.

Women-owned small business concern means—

(1) A small business concern–

(i) That 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; or

(2) A small business concern eligible under the Women-Owned Small Business Program in accordance with 13 CFR part 127 (see subpart 19.15 ).

Women-Owned Small Business (WOSB) Program.

(1) "Women-Owned Small Business (WOSB) Program" means a program that authorizes contracting officers to limit competition, including award on a sole-source basis, to—

(i) Economically disadvantaged women-owned small business (EDWOSB) concerns eligible under the WOSB Program for Federal contracts assigned a North American Industry Classification Systems (NAICS) code in an industry in which the Small Business Administration (SBA) has determined that WOSB concerns are underrepresented in Federal procurement ; and

(ii) WOSB concerns eligible under the WOSB Program for Federal contracts assigned a NAICS code in an industry in which SBA has determined that WOSB concerns are substantially underrepresented in Federal procurement .

(2) "Economically disadvantaged women-owned small business (EDWOSB) concern" means a small business concern that is at least 51 percent directly and unconditionally owned by, and the management and daily business operations of which are controlled by, one or more women who are citizens of the United States and who are economically disadvantaged in accordance with 13 CFR part 127 , and the concern is certified by SBA or an approved third-party certifier in accordance with 13 CFR 127.300 . It automatically qualifies as a women-owned small business (WOSB) concern eligible under the WOSB Program.

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Assignment is a legal term whereby an individual, the “assignor,” transfers rights, property, or other benefits to another known as the “ assignee .”   This concept is used in both contract and property law.  The term can refer to either the act of transfer or the rights /property/benefits being transferred.

Contract Law   

Under contract law, assignment of a contract is both: (1) an assignment of rights; and (2) a delegation of duties , in the absence of evidence otherwise.  For example, if A contracts with B to teach B guitar for $50, A can assign this contract to C.  That is, this assignment is both: (1) an assignment of A’s rights under the contract to the $50; and (2) a delegation of A’s duty to teach guitar to C.  In this example, A is both the “assignor” and the “delegee” who d elegates the duties to another (C), C is known as the “ obligor ” who must perform the obligations to the assignee , and B is the “ assignee ” who is owed duties and is liable to the “ obligor ”.

(1) Assignment of Rights/Duties Under Contract Law

There are a few notable rules regarding assignments under contract law.  First, if an individual has not yet secured the contract to perform duties to another, he/she cannot assign his/her future right to an assignee .  That is, if A has not yet contracted with B to teach B guitar, A cannot assign his/her rights to C.  Second, rights cannot be assigned when they materially change the obligor ’s duty and rights.  Third, the obligor can sue the assignee directly if the assignee does not pay him/her.  Following the previous example, this means that C ( obligor ) can sue B ( assignee ) if C teaches guitar to B, but B does not pay C $50 in return.

            (2) Delegation of Duties

If the promised performance requires a rare genius or skill, then the delegee cannot delegate it to the obligor.  It can only be delegated if the promised performance is more commonplace.  Further, an obligee can sue if the assignee does not perform.  However, the delegee is secondarily liable unless there has been an express release of the delegee.  That is, if B does want C to teach guitar but C refuses to, then B can sue C.  If C still refuses to perform, then B can compel A to fulfill the duties under secondary liability.

Lastly, a related concept is novation , which is when a new obligor substitutes and releases an old obligor.  If novation occurs, then the original obligor’s duties are wiped out. However, novation requires an original obligee’s consent .  

Property Law

Under property law, assignment typically arises in landlord-tenant situations.  For example, A might be renting from landlord B but wants to another party (C) to take over the property.   In this scenario, A might be able to choose between assigning and subleasing the property to C.  If assigning , A would be giving C the entire balance of the term, with no reversion to anyone whereas if subleasing , A would be giving C for a limited period of the remaining term.  Significantly, under assignment C would have privity of estate with the landlord while under a sublease, C would not. 

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Bidding at a Foreclosure Auction Sale in New York – Part I

Once all notices have been given, the sale is usually held in the lobby of the Courthouse of the Supreme Court  in the County in which the foreclosed property is located.  Most courthouses in New York State set aside a specific area or room in their building to hold such auctions, which are open to all members of the public.  Prior to the auction date, it is wise for potential bidders to have experienced counsel  review the terms of sale.

The sale is then conducted by the Referee for the foreclosed property.  The Referee is an individual, usually an attorney, who has been appointed by the Court to conduct the auction and transfer the property after a judgment of foreclosure has been obtained by the lender, who is the plaintiff in the foreclosure lawsuit.  The Referee’s role is to prepare all documents, conduct the auction sale, and then prepare the property transfer documents and convey all funds to the lender after the auction.

Let’s now assume that all parties who wish to bid are assembled at the Courthouse for the foreclosure auction.  The Referee will first read (out loud) the Judgment of Foreclosure.  Then, based on the actual amount owed to the lender as reflected in the Judgment, he will request an opening bid.  For example, the Judgment may be in the amount of $300,000.00.  This sum would include the amount due on the defaulted loan, all accrued interest and late fees from the loan, the costs and attorneys fees incurred by the lender in bringing the foreclosure proceeding, plus the fees due to the Referee.  Therefore, the bidding would start at $300,000.00.  If no party (excluding the lender) feels that the property is worth this amount, and no one bids, then the lender’s representative will bid this amount and the lender will become owner of the property.

However, let’s assume in this instance, that the property is actually worth $400,000.00.  Third parties will now bid above the lender’s “upset price” of $300,000.00 (usually bidding is in increments of $1,000.00), and the winning bid in this case may be $350,000.00.  The winning bidder usually is required to immediately give the Referee a deposit of 10% of the successful bid.  In our hypothetical, this would be $35,000.00.  Personal checks are not accepted, so bidders must have a bank or certified check payable to the Referee available at the auction to cover this deposit.   Obviously, a bidder does not always know in advance what the winning bid will be.  Our firm  recommends that bidders bring a series of bank or certified checks, one for 10% of the judgment amount, and several more, each for $1,000.00 or $5,000.00, so that the deposit can be paid to the Referee “on the spot.”  The Referee will then give the successful bidder a receipt for their deposit, and, under most circumstances, the bidder will then have thirty days to close the transaction and obtain the deed to the property by paying the remaining amount of the bid to the Referee.

The legal procedures necessary for closing the transaction with the Referee after being the winning bidder at the foreclosure sale will be addressed in Part II of this post, so readers of this blog should “stay tuned.”

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Pitfalls Concerning Assignment of Purchase Agreements

Over the years, we have been contacted by many clients regarding purchase party defaults, after having permitted the initial buyer under a purchase contract to assign the agreement to a newly – created buyer affiliate or unrelated, third party assignee. As a result of not seeking legal advice regarding a buyer’s right to assign purchase agreement prior to the execution of the contract, two problems often result: 1) a shell purchasing entity is substituted as the buyer, and 2) the original buyer, which normally has assets, is now relieved of its obligations under the purchase agreement.

Unfortunately, prior to the close of escrow, if the new shell purchasing entity defaults on its obligations, and the seller seeks to recover the initial deposit based upon breach of contract, the seller is often left with less than a full recovery. When the replacement purchasing entity is a shell company with no assets, the seller may be unable to fully recoup its expenses, including attorney fees and escrow and title cancellation expenses.  Furthermore, even if a legal judgment is obtained against the purchasing assignee entity, it is often worthless because the purchaser has no assets.

Why Legal Advice Should be Sought Regarding the Buyer’s Right to Assign the Purchase Agreement

Anticipating that this issue may occur, we draft assignment provisions in the purchase agreement prior to signing that require two things. First, any newly – formed affiliate assignee buyer must expressly assume, in writing, all obligations of the original buyer under the purchase agreement. This includes the obligation to pay all costs and expenses (such as attorneys’ fees and escrow and title cancellation fees) resulting from any pre-closing default by the new assignee purchaser. Second, the provision should state that any such assignment to a new buying entity will NOT relieve the original buyer of its obligations under the purchase contract.

By doing so, the seller will have a remedy against both the newly – formed defaulting assignee and the original purchaser. The seller, therefore, can pursue both entities for the initial deposit and if, upon default, the new buyer refuses to release the initial deposit from escrow, the seller can sue both entities for recovery of the initial deposit and all costs and expenses (including attorneys’ fees, cancellation expenses and interest).

Additionally, the judgment will be “joint and several,” meaning that the seller can recover from either entity, permitting the seller to concentrate its collection efforts against the original purchaser (which has assets), rather than wasting time and money pursuing the shell entity.

The aggrieved seller can also prevent the shell purchaser simply walking away from the transaction without liability for the additional costs and expenses incurred due to the breach of the purchase agreement. The seller can avoid being blackmailed into settling for only a portion of the initial deposit in order to avoid incurring the cost, expense and delay of suing the shell assignee.

Other Benefits of Properly Drafting an Assignment Provision

Proper drafting of the assignment provision also can avoid an even worse scenario: one in which a defaulting assignee buyer files a lis pendens on the property. In such a case the seller could be faced with tremendous legal expenses required to remove the lis pendens – none of which will be recoverable from the newly – formed shell assignee buyer, which has no assets. We also recommend that our clients include an increase in the initial deposit following waiver of contingencies and/or the release of the initial deposit upon the buyer’s waiver of contingencies.

Having provided over three decades of legal advice and counsel to our clients, the lawyers at Narvid Scott are well – versed in avoiding potential pitfalls for the unwary. While we certainly cannot guarantee the elimination of all problems, our experience minimizes our clients’ risk and exposure. By contacting Narvid Scott before the letter of intent or negotiations for the sale or purchase commence, we can better protect our clients.

Remember: Before executing your next purchase agreement (whether as a buyer or purchaser) or better yet, before you even negotiate the Letter of Intent, I would be happy to review your transaction and provide effective and efficient advice and counsel.

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Demystifying bid formats: a comprehensive guide to procurement processes.

Welcome to the world of procurement processes, where bids and formats reign supreme! If you’re new to this realm, understanding bid formats can feel like navigating a maze without a map. But fret not, dear reader, for we are here to demystify everything for you.

In this comprehensive guide, we’ll take you on an exciting journey through the intricacies of bid formats in procurement. From unraveling the definition of a bid format to exploring different types and helping you choose the right one for your project – we’ve got it all covered!

So buckle up and get ready to dive into the fascinating world of bid formats. Trust us, by the end of this post, you’ll be equipped with all the knowledge needed to tackle procurements with confidence. Let’s begin our adventure!

What is a bid format?

What exactly is a bid format, you ask? Well, think of it as the blueprint or framework that outlines how potential suppliers should structure their proposals when participating in a procurement process. It’s like providing them with a clear set of instructions on what information to include and how to present it.

Bid formats come in various shapes and sizes, depending on the specific requirements of the project . They can range from simple forms or templates to more complex documents that delve into intricate details. The purpose is to ensure consistency among bids received, making it easier for evaluators to compare and analyze them effectively.

By defining the format upfront, organizations can establish standardization across all bids they receive. This not only streamlines the evaluation process but also promotes transparency and fairness. Plus, having a structured bid format helps suppliers understand precisely what is expected from them, reducing confusion and improving overall efficiency .

Choosing the right bid format for your project is crucial. You need to consider factors such as complexity level, desired outcome, and industry norms. If your project requires detailed technical specifications or unique deliverables, opt for a more comprehensive bid format that allows bidders to showcase their expertise adequately.

Remember that one size does not fit all when it comes to bid formats! Tailor your selection based on the unique needs of your project while ensuring clarity and ease-of-use for both parties involved.

Different types of bid formats

Different types of bid formats play a crucial role in the procurement process. They provide structure and clarity to both buyers and suppliers, ensuring a fair and transparent competition. Let’s take a closer look at some of the most commonly used bid formats.

1. Open Bid: In this format, any qualified supplier can submit their proposal without restrictions. It allows for maximum participation but may require more evaluation time due to the larger number of bids received.

2. Restricted Bid: This format limits the number of potential suppliers who can participate in the bidding process . Suppliers are pre-qualified based on specific criteria before being invited to submit their proposals, resulting in fewer bids but potentially higher quality submissions.

3. Two-Step Bid: This format involves an initial qualification stage followed by a second stage where shortlisted suppliers are invited to submit detailed proposals. It allows for thorough evaluation while minimizing effort for both buyers and suppliers during the first phase.

4. Request for Quotation ( RFQ ): RFQ is suitable when specifications or requirements are well-defined, and price is the primary consideration factor rather than technical aspects or innovation.

5. Request for Proposal (RFP): RFPs are used when solutions need to be customized or innovative approaches are sought after along with pricing considerations.

6. Reverse Auction: In this format, multiple suppliers compete against each other by submitting successively lower prices within a specified timeframe until one emerges as the winner with the lowest bid.

These different bid formats offer flexibility and adaptability depending on project requirements, allowing organizations to choose what best suits their needs and objectives.

How to choose the right bid format for your project

Choosing the right bid format for your project is crucial to ensure a smooth and efficient procurement process . With several options available, it can be overwhelming to make the best decision. However, by considering certain factors, you can select the most suitable bid format for your project.

Assess the complexity of your project. If it involves multiple vendors or complex specifications, a Request for Proposal (RFP) bid format may be appropriate. On the other hand, if your project is more straightforward and requires standard products or services, a Request for Quotation (RFQ) bid format could suffice.

Consider the level of competition you expect from potential suppliers. If you anticipate high competition and want to evaluate several factors beyond just cost, an Invitation to Bid (ITB) bid format would be beneficial. Conversely, if cost is the primary consideration and there’s less need for evaluating additional criteria extensively, a sealed bidding approach might work well.

Additionally, think about timelines and urgency. If time is limited and expediency is essential in obtaining bids quickly while maintaining fairness in supplier selection, an e-procurement platform with electronic bidding capabilities may suit your needs.

Lastly but importantly,don’t forget to consult internal stakeholders such as legal teams or subject matter experts who can provide valuable insights on selecting an appropriate bid format based on regulatory requirements or industry standards .

By carefully analyzing these considerations along with any specific requirements unique to your project,you’ll be able to choose the most suitable bid format that aligns with your goals effectively

The benefits of using a bid format

Bid formats offer several benefits when it comes to the procurement process . Using a bid format provides structure and organization to your sourcing efforts. With a standardized template, you can easily capture all the necessary information from suppliers in a consistent manner, making it easier for evaluation and comparison.

Bid formats promote transparency and fairness. By clearly outlining requirements, specifications, and evaluation criteria in the format, you ensure that all bidders have equal access to information. This helps create a level playing field and minimizes any potential biases or favoritism.

Furthermore, bid formats help streamline the evaluation process . When responses are presented in a standardized format , it becomes much easier to compare different proposals side by side. This saves time and effort for evaluators as they can quickly identify key details and evaluate each response based on predefined criteria.

Another benefit of using bid formats is improved documentation . The structured nature of these templates ensures that important details such as pricing terms, delivery schedules, warranties, etc., are captured consistently across all bids. This makes it easier to review later on or refer back to during contract negotiations or supplier performance evaluations .

Bid formats enhance accountability within the procurement process . Since everything is documented in writing within the template itself – from bidder qualifications to contractual terms – there is clear evidence of what was requested and what was offered by each bidder. In case of any disputes or issues down the line, having this record can be invaluable for resolving conflicts amicably.

In summary,the advantages of using a bid format include increased efficiency through streamlined evaluations processes; enhanced transparency leading to fairer competition; improved documentation for future reference; greater accountability due to written records;

The disadvantages of using a bid format

While bid formats can be a useful tool in the procurement process , it’s important to consider the potential disadvantages that may arise. One of the main drawbacks is that bid formats can sometimes limit creativity and innovation. When suppliers are required to adhere to a specific format, they may not have the opportunity to showcase their unique ideas or approaches.

Another disadvantage is that bid formats can be time-consuming and resource-intensive. Suppliers often need to invest significant effort into preparing their bids according to the specified format, which can be a drain on both time and resources. Additionally, if there are multiple rounds of bidding with different formats, it can further increase the burden on suppliers.

Bid formats also have the potential for bias or favoritism. If certain requirements or evaluation criteria within the format heavily favor specific suppliers or exclude others, it could lead to an unfair selection process .

Furthermore, bid formats may not always capture all relevant information needed for effective decision-making. They typically focus on quantitative factors but may overlook qualitative aspects such as supplier reputation or past performance .

Using a bid format does not guarantee successful outcomes. Even with careful preparation and adherence to all requirements, there is still no assurance that the chosen supplier will deliver satisfactory results.

While bid formats offer structure and standardization in procurement processes , it’s essential to carefully evaluate their limitations before implementing them in your organization’s procedures

How to use a bid format in your procurement process

When it comes to the procurement process , using a bid format can be incredibly helpful in streamlining and organizing your efforts. But how exactly do you use a bid format effectively? Here are some key steps to follow:

1. Understand your project requirements: Before you start creating your bid format, make sure you have a clear understanding of what your project requires. This includes identifying the scope, timeline, budget, and any specific criteria or qualifications.

2. Design the bid form: Once you have a thorough understanding of your project requirements, design a clear and concise bid form that includes all the necessary fields for suppliers to fill out. This may include information such as company name, contact details, pricing structure, delivery schedule, and references.

3. Distribute the bid form: Once your bid form is ready to go, distribute it to potential suppliers who meet your project requirements. You can do this by posting it on relevant online platforms or sending it directly to interested parties.

4. Review submitted bids: As bids start coming in, carefully review each submission against your project requirements and evaluation criteria. Take note of any clarifications needed or additional information required from suppliers .

5. Evaluate and select suppliers: Based on the evaluation of submitted bids, identify which suppliers best meet your project’s needs and objectives . Consider factors such as price competitiveness , quality of products or services offered, reliability of delivery timelines,and past performance records.

Communicate with selected supplier(s): Once you have identified suitable supplier(s), communicate with them regarding contract negotiations,further clarifications,and finalizing terms and conditions .

Make sure both parties are aligned before moving forward with awarding contracts .

Using a well-designed bid format can simplify the procurement process while ensuring fairness among potential vendors .

It helps in comparing offers objectively,minimizes confusion,duplicates,reduces time spent answering individual questions,and enhances transparency throughout.

Effective usage of this tool will save significant effort,simplify decision-making, and ultimately lead to successful procurement outcomes.

In this comprehensive guide, we have demystified bid formats and explored their importance in the procurement process . We have discussed different types of bid formats and how to choose the right one for your project. While bid formats offer numerous benefits such as ensuring fairness and transparency, they also come with certain disadvantages that need to be considered.

By utilizing a bid format in your procurement process, you can streamline the entire procedure, save time and resources, and attract competitive bids from suppliers. It helps create a level playing field for all participants and promotes healthy competition.

However, it is important to note that bid formats are not a one-size-fits-all solution. Each project has unique requirements, which may call for specific modifications or customization of the chosen format. Careful consideration should be given to factors such as complexity of the project , desired level of detail in bids, evaluation criteria, and industry standards.

To make effective use of bid formats in your procurement processes: 1. Clearly define project requirements 2. Choose an appropriate bid format based on these requirements 3. Communicate clearly with potential suppliers about expectations 4. Establish fair evaluation criteria 5. Monitor compliance throughout the process

Remember that bidding is just one part of the overall procurement journey – maintaining good relationships with vendors after selection is equally crucial.

In conclusion , understanding different types of bid formats empowers organizations to optimize their procurement strategies effectively while promoting fair competition among suppliers.

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Q: What is an Assignment of bid if the sale has not started yet (not until 5/22/12)

Bank lawyer send me a copy of an Assignment of Bid but according to Court Docket the sale date is not until 5/22/13, what does it mean?

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A: An Assignment of Bid just means that the Plaintiff is assigning its bid to another entity, usually the investor of the mortgage. This has to be done prior to the foreclosure sale so that the assignee of the bid can put in the bid on time.

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Understanding the Assignment of Mortgages: What You Need To Know

3 minute read • Upsolve is a nonprofit that helps you get out of debt with education and free debt relief tools, like our bankruptcy filing tool.  Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we'll never ask you for a credit card.  Explore our free tool

A mortgage is a legally binding agreement between a home buyer and a lender that dictates a borrower's ability to pay off a loan. Every mortgage has an interest rate, a term length, and specific fees attached to it.

Written by Attorney Todd Carney .  Updated November 26, 2021

If you’re like most people who want to purchase a home, you’ll start by going to a bank or other lender to get a mortgage loan. Though you can choose your lender, after the mortgage loan is processed, your mortgage may be transferred to a different mortgage servicer . A transfer is also called an assignment of the mortgage. 

No matter what it’s called, this change of hands may also change who you’re supposed to make your house payments to and how the foreclosure process works if you default on your loan. That’s why if you’re a homeowner, it’s important to know how this process works. This article will provide an in-depth look at what an assignment of a mortgage entails and what impact it can have on homeownership.

Assignment of Mortgage – The Basics

When your original lender transfers your mortgage account and their interests in it to a new lender, that’s called an assignment of mortgage. To do this, your lender must use an assignment of mortgage document. This document ensures the loan is legally transferred to the new owner. It’s common for mortgage lenders to sell the mortgages to other lenders. Most lenders assign the mortgages they originate to other lenders or mortgage buyers.

Home Loan Documents

When you get a loan for a home or real estate, there will usually be two mortgage documents. The first is a mortgage or, less commonly, a deed of trust . The other is a promissory note. The mortgage or deed of trust will state that the mortgaged property provides the security interest for the loan. This basically means that your home is serving as collateral for the loan. It also gives the loan servicer the right to foreclose if you don’t make your monthly payments. The promissory note provides proof of the debt and your promise to pay it.

When a lender assigns your mortgage, your interests as the mortgagor are given to another mortgagee or servicer. Mortgages and deeds of trust are usually recorded in the county recorder’s office. This office also keeps a record of any transfers. When a mortgage is transferred so is the promissory note. The note will be endorsed or signed over to the loan’s new owner. In some situations, a note will be endorsed in blank, which turns it into a bearer instrument. This means whoever holds the note is the presumed owner.

Using MERS To Track Transfers

Banks have collectively established the Mortgage Electronic Registration System , Inc. (MERS), which keeps track of who owns which loans. With MERS, lenders are no longer required to do a separate assignment every time a loan is transferred. That’s because MERS keeps track of the transfers. It’s crucial for MERS to maintain a record of assignments and endorsements because these land records can tell who actually owns the debt and has a legal right to start the foreclosure process.

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Assignment of Mortgage Requirements and Effects

The assignment of mortgage needs to include the following:

The original information regarding the mortgage. Alternatively, it can include the county recorder office’s identification numbers. 

The borrower’s name.

The mortgage loan’s original amount.

The date of the mortgage and when it was recorded.

Usually, there will also need to be a legal description of the real property the mortgage secures, but this is determined by state law and differs by state.

Notice Requirements

The original lender doesn’t need to provide notice to or get permission from the homeowner prior to assigning the mortgage. But the new lender (sometimes called the assignee) has to send the homeowner some form of notice of the loan assignment. The document will typically provide a disclaimer about who the new lender is, the lender’s contact information, and information about how to make your mortgage payment. You should make sure you have this information so you can avoid foreclosure.

Mortgage Terms

When an assignment occurs your loan is transferred, but the initial terms of your mortgage will stay the same. This means you’ll have the same interest rate, overall loan amount, monthly payment, and payment due date. If there are changes or adjustments to the escrow account, the new lender must do them under the terms of the original escrow agreement. The new lender can make some changes if you request them and the lender approves. For example, you may request your new lender to provide more payment methods.

Taxes and Insurance

If you have an escrow account and your mortgage is transferred, you may be worried about making sure your property taxes and homeowners insurance get paid. Though you can always verify the information, the original loan servicer is responsible for giving your local tax authority the new loan servicer’s address for tax billing purposes. The original lender is required to do this after the assignment is recorded. The servicer will also reach out to your property insurance company for this reason.  

If you’ve received notice that your mortgage loan has been assigned, it’s a good idea to reach out to your loan servicer and verify this information. Verifying that all your mortgage information is correct, that you know who to contact if you have questions about your mortgage, and that you know how to make payments to the new servicer will help you avoid being scammed or making payments incorrectly.

Let's Summarize…

In a mortgage assignment, your original lender or servicer transfers your mortgage account to another loan servicer. When this occurs, the original mortgagee or lender’s interests go to the next lender. Even if your mortgage gets transferred or assigned, your mortgage’s terms should remain the same. Your interest rate, loan amount, monthly payment, and payment schedule shouldn’t change. 

Your original lender isn’t required to notify you or get your permission prior to assigning your mortgage. But you should receive correspondence from the new lender after the assignment. It’s important to verify any change in assignment with your original loan servicer before you make your next mortgage payment, so you don’t fall victim to a scam.

Attorney Todd Carney

Attorney Todd Carney is a writer and graduate of Harvard Law School. While in law school, Todd worked in a clinic that helped pro-bono clients file for bankruptcy. Todd also studied several aspects of how the law impacts consumers. Todd has written over 40 articles for sites such... read more about Attorney Todd Carney

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Assignment of Proceeds: Meaning, Pros and Cons, Example

Diane Costagliola is a researcher, librarian, instructor, and writer who has published articles on personal finance, home buying, and foreclosure.

Investopedia / Jiaqi Zhou

What Is an Assignment of Proceeds?

An assignment of proceeds occurs when a beneficiary transfers all or part of the proceeds from a letter of credit to a third-party beneficiary . Assigning the proceeds from a letter of credit can be utilized in many types of scenarios, such as to pay suppliers or vendors in a business transaction or to settle other debts.

Key Takeaways

• An assignment of proceeds can be used to redirect funds from a line of credit to a third party.
• An assignment of proceeds must be approved by the financial institution that granted the line of credit following a request and fulfillment of any obligations by the original beneficiary.
• A benefit of this type of transaction is the ability to redirect only a portion of the proceeds, in which case both the original beneficiary and third party can access the same letter of credit.
• A drawback of this type of transaction is that the original beneficiary is still responsible for fulfilling all requirements under the letter of credit, even when the funds are redirected to the third party.
• This type of transaction is used in a number of circumstances, such as when paying suppliers or vendors, or when settling outstanding debts.

Understanding an Assignment of Proceeds

A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make a payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. The original beneficiary, the named party who is entitled to receive the proceeds from a letter of credit, may choose to have them delivered to a third party instead, through an "assignment of proceeds."

Due to the nature of international dealings, including factors such as distance, differing laws in each country, and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade.

In order to process an assignment of proceeds, the original beneficiary of the letter of credit must submit a request to the bank or other financial institution issuing the letter of credit requesting to assign the funds to a different individual or company. The assignment of proceeds will need to be approved by the financial institution once it is submitted, pending the fulfillment of any requirements set forth in the letter of credit.

If the original beneficiary does not meet the obligations outlined in the letter of credit, no assignment will take place. Once approved, the bank or other entity will release the money to the specified third party to be drawn upon at will.

Advantages and Disadvantages of an Assignment of Proceeds

The main benefit of an assignment of proceeds is that the original beneficiary has the ability to assign all or just a portion of the letter of credit to the third party. The original beneficiary will retain access to any portion of the proceeds not redirected to the third party. This allows both entities to make use of the same letter of credit when necessary.

This benefit must be weighed against the potential drawback of this type of transaction. When an assignment of proceeds takes place, the financial institution is not contracting directly with the third-party beneficiary. It is only acting as an agent in supplying the funds to the third party. The original beneficiary is still responsible for completing any and all requirements under the letter of credit.

Example of an Assignment of Proceeds

Assume XYZ Customer, in Brazil, is purchasing widgets from ABC Manufacturer, in the United States. In order to sign off on the deal, ABC Manufacturer requires that XYZ Customer obtains a letter of credit from a bank to mitigate the risk that XYZ may not pay ABC for the widgets once ABC has shipped them out of the country.

At this point, ABC Manufacturer is able to request that a portion of these funds be redirected to DEF Supplier, whom ABC still owes money for parts used in making the widgets. Even though a portion of the funds has been redirected to DEF Supplier, ABC Manufacturer still has to fulfill its obligations under the letter of credit, such as shipping out the widgets to XYZ.

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Orioles' John Means: Continuing rehab assignment

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Means (forearm) is making a rehab start with Triple-A Norfolk on Tuesday, Roch Kubatko of MASNSports.comreports.

The veteran left-hander recorded just one out and threw 34 pitches in his previous rehab outing, so he'll look to get back on track and build up his workload Tuesday. Means could require an additional rehab start before joining the Orioles , which would mean his season debut wouldn't come before the end of April.

Orioles' John Means: Roughed up in latest rehab start

Orioles' john means: making another rehab start, orioles' john means: making second rehab start, orioles' john means: struggles in rehab start, orioles' john means: starting rehab assignment sunday, orioles' john means: opens season on il, our latest fantasy baseball stories.

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Assignment Of Purchase And Sale Agreement

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What is an assignment of purchase and sale agreement.

An assignment of purchase and sale agreement is a real estate transaction contract that defines the parties and terms of a real estate purchase. This agreement allows the original purchaser of a property to transfer or assign their rights in the deal to a third party. This agreement is often used in flipping houses.

Assignment of purchase and sale agreements allows the purchaser to take their rights and obligations under a purchase agreement and reassign them to a third party who will take on those responsibilities. Some contracts may have clauses that prohibit assignment or allow it under specific circumstances usually laid out in the agreement.

Common Sections in Assignment Of Purchase And Sale Agreements

Below is a list of common sections included in Assignment Of Purchase And Sale Agreements. These sections are linked to the below sample agreement for you to explore.

Assignment Of Purchase And Sale Agreement Sample

Reference : Security Exchange Commission - Edgar Database, EX-10.1.1 2 d245573dex1011.htm ASSIGNMENT OF PURCHASE AND SALE AGREEMENT , Viewed October 18, 2021, View Source on SEC .

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Over 30 years of experience practicing commercial real estate and complex business litigation law.

Bruce Burk practice is in the area of small business, labor and employment, contracts, real estate and civil litigation. Bruce has litigated over 40 trials as well as many appeals. He prioritizes client communication and satisfaction as well as delivering high quality work product.

Attorney Cory Barack specializes in business, real estate, probate, and energy law. He can help you with oil/gas leases, easements, property sales, drafting contracts and wills, setting up companies, and resolving disputes. He is licensed to practice law in Ohio and is located in Eastern Ohio.

Advised startups and established corporations on a wide range of commercial and corporate matters, including VC funding, technology law, and M&A. Commercial and Corporate Matters • Advised companies on commercial and corporate matters and drafted corporate documents and commercial agreements—including but not limited to —Convertible Note, SAFE, Promissory Note, Terms and Conditions, SaaS Agreement, Employment Agreement, Contractor Agreement, Joint Venture Agreement, Stock Purchase Agreement, Asset Purchase Agreement, Shareholders Agreement, Partnership Agreement, Franchise Agreement, License Agreement, and Financing Agreement. • Drafted and revised internal regulations of joint venture companies (board of directors, employment, office organization, discretional duty, internal control, accounting, fund management, etc.) • Advised JVs on corporate structuring and other legal matters • Advised startups on VC funding Employment Matters • Drafted a wide range of employment agreements, including dental associate agreements, physician employment agreements, startup employment agreements, and executive employment agreements. • Advised clients on complex employment law matters and drafted employment agreements, dispute settlement agreements, and severance agreements. General Counsel • As outside general counsel, I advised startups on ICOs, securities law, business licenses, regulatory compliance, and other commercial and corporate matters. • Drafted or analyzed coin or token sale agreements for global ICOs. • Assisted clients with corporate formations, including filing incorporation documents and foreign corporation registrations, drafting operating and partnership agreements, and creating articles of incorporation and bylaws. Dispute Resolution • Conducted legal research, and document review, and drafted pleadings, motions, and other trial documents. • Advised the client on strategic approaches to discovery proceedings and settlement negotiation. • Advised clients on employment dispute settlements.

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I am available for data privacy and cybersecurity projects. I am CIPP/US certified through the IAPP. I have also taken coursework focused on the GDPR through the London School of Economics. In my past career I was an intelligence officer. I am well acquainted with information security best practices and I have experience developing and implementing administrative controls for classified information and PII. I have worked extensively overseas and I am comfortable integrating with remote teams. Feel free to reach out any time if you have any additional questions on my areas of expertise or professional background.

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Middle East crisis — explained

The conflict between Israel and Palestinians — and other groups in the Middle East — goes back decades. These stories provide context for current developments and the history that led up to them.

What to know about the U.N. vote on whether to admit Palestinians as full members

Becky Sullivan

Michele Kelemen

The United Nations Security Council met Thursday to debate whether the U.N. should admit the State of Palestine as a full voting member. Angela Weiss/AFP via Getty Images hide caption

The United Nations Security Council met Thursday to debate whether the U.N. should admit the State of Palestine as a full voting member.

The U.N. Security Council failed to pass a vote on the Palestinian Authority's bid to join the United Nations as a full member with a final vote of 12 to 1 with an additional member abstaining.

The United States, one of the Security Council's five permanent members, tanked the bid with its veto, unsurprisingly. Officials indicated that the proposal didn't have U.S. support before the vote took place this evening.

For almost 12 years, Palestinians have participated in U.N. sessions as a nonmember observer state. That status also granted Palestinians the ability to join other international organizations — like the International Court of Justice, where an ongoing case has alleged that Israel is committing genocide in its war on Hamas , a charge Israel has denied.

But the limited observer status also means that Palestinians still lack the power to vote on resolutions. And earlier this month, the Palestinian Authority, which governs parts of the occupied West Bank , formally asked the Security Council to reconsider its 2011 application. (Gaza is governed by the militant group Hamas.)

This isn't the first time the U.S. and Israel have disagreed over Gaza

"The plight of the Palestinian people started over a century ago and is still ongoing," said Ziad Abu Amr, the Palestinian representative to the U.N., speaking at Thursday's debate. "We have made every possible genuine effort, we have made unimaginable historic concessions in order to achieve a peace that is based on the two-state solution."

What happened Thursday?

The U.N. Security Council voted on whether to recommend the Palestinian bid for full membership. The vote was only one step of the process to full admittance.

The resolution would pass with nine votes in favor, so long as there was no veto from any of the Security Council's five permanent members — China, France, Russia, the United Kingdom and the U.S.

The Palestinian Authority is promising change. Many Palestinians say it's not enough

If the resolution passed, it would have moved to the General Assembly, where it must win a two-thirds majority of the 193 voting members.

What kind of support does Palestinian officials have with the General Assembly?

It's possible that the General Assembly would approve Palestinian statehood.

Support for Palestinian statehood is broad outside of the U.S. and its allies in the West. Earlier this month, Mansour said 140 of the 193 U.N. member states support the creation of a Palestinian state — a total more than the two-thirds needed for a resolution to pass.

International law requires a defined territory, a permanent population, a government and an ability to enter into international relations.

Why did the U.S. oppose the resolution?

The U.S. have long maintained that Palestinian statehood should come after a negotiated peace agreement between Israel and Palestinians.

"Our principles haven't changed," said Robert Wood, the U.S. deputy ambassador to the U.N., on Thursday before the vote. "It's about, what do you think is the best way to get toward a two-state solution? And our view is that having this vote right now does not do that."

A top U.N. court says Gaza genocide is 'plausible' but does not order cease-fire

During the debate, Wood said that the U.S. is working toward "an immediate and sustainable cease-fire" in Gaza, and he called on Israel to do more to protect civilian life in Gaza. He blamed Hamas for rejecting Israeli proposals during negotiations over a cease-fire.

"We will also continue direct diplomacy to advocate for normalization of ties between Israel and its neighbors, as well as a political horizon towards a two-state solution so that Palestinians and Israelis can live side by side in peace," Wood said. "We are committed to achieving credible, timebound and irreversible steps toward a two-state solution."

What does Israel say?

Israel opposed the resolution. In January, Israeli Prime Minister Benjamin Netanyahu doubled down on his longtime opposition to a Palestinian state. Israel "will not compromise on full Israeli control" over Gaza, a stance "contrary to a Palestinian state," Netanyahu said then .

During Thursday's debate, Gilad Erdan, Israel's ambassador to the U.N., had fiery words criticizing the Palestinian application and the Security Council's decision to consider it.

Middle East

Israel's netanyahu rejects any palestinian sovereignty post-war, rebuffing biden.

The resolution would have "zero positive impact for any party," Erdan said. "It will cause only destruction for years to come and harm any chance for future dialogue."

"To the Palestinians, the only solution is a solution where the Jewish state ceases to exist. This is not how you resolve a conflict. This is how you ensure more bloodshed, more violence and many more October 7ths," he added. "An agreement can be agreed upon only at the negotiating table, not by forcing it unilaterally here in New York."

Why is this happening now?

The Palestinian Authority last applied for full membership in 2011. The Security Council never voted on the application after the U.S. said it would veto. The following year, the General Assembly voted to recognize to recognize the Palestinian Authority in its current status as a nonmember observer state.

On April 2, the Palestinian Authority asked the Security Council to reconsider the 2011 application.

6 months into war, Palestinians face high unemployment and a 'disastrous' economy

In the six months since Oct. 7, the day that Hamas led an assault on Israel that left about 1,200 people dead, Israel's military campaign on Gaza has killed more than 33,000 Palestinians, many of whom are women or children, Palestinian health officials say, and damaged or destroyed a majority of buildings in the territory .

In the wake of Israel's destructive campaign, international perspectives on the conflict have shifted. In the U.S., where support for Israel was once widespread among both political parties, young people are increasingly more sympathetic to Palestinians . Other long-time Israel allies like the U.K. and France have signaled a greater openness to supporting Palestinian statehood.

With the conflict threatening to boil over beyond the borders of Israel and the Palestinian territories, the Middle East is on a "knife-edge," U.N. Secretary-General Antonio Guterres said on Thursday.

Israel shoots down missiles and drones after Iran launches unprecedented attack

Last weekend, tensions between Israel and Iran reached a new height when Iran launched an unprecedented attack on Israel in retaliation for a strike on an Iranian consulate in Syria.

"Recent escalations make it even more important to support good-faith efforts to find lasting peace between Israel and a fully independent, viable and sovereign Palestinian state," Guterres said at the Security Council debate.

"Failure to make progress towards a two-State solution will only increase volatility and risk for hundreds of millions of people across the region, who will continue to live under the constant threat of violence."

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U.S. Vetoes Palestinian Bid for Recognition as Full U.N. Member State

The move blocked a resolution to support a status that Palestinians had long sought at the United Nations, where it is considered a “nonmember observer state.”

By Yonette Joseph

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The United States blocked the U.N. Security Council on Thursday from moving forward on a Palestinian bid to be recognized as a full member state at the United Nations, quashing an effort by Palestinian allies to get the world body to back the effort.

The vote was 12 in favor of the resolution and one — the United States — opposed, with abstentions from Britain and Switzerland.

The Palestinian envoy to the United Nations, Riyad Mansour, had described the bid for full-member status as an effort “to take our rightful place among the community of nations.”

After the vote, Mr. Mansour, visibly upset, delivered a passionate address asserting the Palestinian people’s right to self-determination.

“Our right to self determination is a natural right — a historical right — to live in our homeland Palestine as an independent state that is free and that is sovereign,” he said.

Israel’s foreign minister, Israel Katz, said after the vote: “The shameful proposal was rejected. Terrorism will not be rewarded.”

The Security Council has consistently called for a two-state solution to the Palestinian-Israeli conflict, a result that has failed to materialize during negotiations between the two sides. Linda Thomas-Greenfield, the U.S. ambassador to the United Nations, said in Tokyo on Friday morning that the new resolution would not have brought a two-state solution closer.

“The resolution provides for the Palestinian Authority to be a member of the U.N.,” Ms. Thomas-Greenfield told reporters. “Right now, the Palestinians don’t have control over a significant portion of what is supposed to be their state. It’s being controlled by a terrorist organization,” she said, referring to Hamas.

The United States, along with the four other permanent members of the Council, can veto any action before it. On Thursday afternoon, during a high-profile Council meeting to address issues in the Middle East, including the Palestinian bid for full U.N. membership, the United States, a staunch ally of Israel’s, wielded that veto.

The resolution had asked the 15-member Security Council to recommend to the 193-member U.N. General Assembly that “the State of Palestine be admitted to membership of the United Nations,” diplomats said. To pass, the application needed to be approved by the Security Council with at least nine votes in favor and no vetoes by the United States, Britain, France, Russia or China. Then, at least two-thirds of the General Assembly would have had to approve it.

Full Palestinian membership in the U.N. would be an important if largely symbolic victory for the Palestinian Authority, which has long sought a nation-state. Had the Palestinian application been accepted, the new status would have brought the privileges of U.N. membership, including voting rights and a rotating seat on the Security Council.

Many of the most critical issues regarding a Palestinian state, however, would not have been resolved, including physical borders and recognition by individual countries with which it would have needed to establish diplomatic relations.

Israel was admitted as a full U.N. member in 1949. The Palestinian Authority has been seeking a state made up of the West Bank, East Jerusalem and the Gaza Strip for decades; those territories have all been captured or annexed by Israel.

Little progress has been made on achieving Palestinian statehood since Israel and the Palestinian Authority signed the Oslo Accords in the early 1990s, which established a peace process aimed at a two-state solution. In 2007, Hamas drove the Palestinian Authority, which President Mahmoud Abbas leads and which exercises limited self-rule in the occupied West Bank, from power in the Gaza Strip.

Complicating the Palestinian application for statehood is the war that began when Hamas led terrorist attacks on Israel on Oct. 7 that killed about 1,200 people and prompted Israel’s retaliatory attacks in Gaza, which have killed more than 33,000 Palestinians, most of them civilians, and displaced more than one million people. The conflict has spilled into the occupied West Bank and neighboring countries like Lebanon and has drawn Iran into the fray.

The statehood push also comes as Israel expands settlements in the West Bank.

The Palestinians asserted statehood in 1988 with a declaration of independence. In 2012, the General Assembly voted to upgrade their status from “observer” to “nonmember observer state.”

The push for Palestinian statehood has picked up momentum around the world, with politicians in countries like France, Ireland, Spain, Slovenia and Sweden signaling their support to formally recognize a Palestinian state as a way to try to end the Israel-Palestinian conflict. As of April 2022, 138 countries and the Holy See have recognized the State of Palestine.

There are two ways to become a full member state at the United Nations. One can apply to the Security Council and the membership committee will consider it. A Council member can also introduce a resolution on membership for a vote.

The Palestinian Authority applied to upgrade its status in the United Nations in September 2011, but it dropped the bid less than two months later because of a lack of support and pressure from the United States, which said it would veto any application.

After Mr. Abbas revived the bid this year, the Biden administration sought to persuade him to shelve it, according to Axios and The Times of Israel . But Mr. Abbas rebuffed those efforts, the reports said.

“All we ask for is to take our rightful place among the community of nations — to be treated as equals, equals to other nations and states, to live in freedom and dignity, in peace and security in our ancestral land,” said Mr. Mansour, the Palestinian envoy to the United Nations.

“Recognition of the State of Palestine and its membership are not enough by themselves to end this illegal occupation,” he added. “But they are the first step towards this urgent and long-overdue goal.”

The Council’s committee on the admission of new members met twice last week to discuss the Palestinians’ application, but it could not reach a unanimous decision. Under Council guidelines that allow a member to introduce a resolution for a vote, Algeria, the Council’s only Arab member, put forward the Palestinian application.

Algeria’s foreign minister, Ahmed Ataf, said on Thursday that statehood “is a historic right which has not been implemented, and the lack of implementation of this right is the cause of the prolongation of this Arab-Israeli conflict.”

During the Council meeting on Thursday, a representative of the Palestinian Authority, Ziad Abu Amr, asked, “How could granting the State of Palestine full membership at the United Nations, similar to other countries around the world, how could this damage the prospect of peace between Palestinians and Israelis?”

He added, “This resolution will grant hope to the Palestinian people, hope for a decent life in an independent Palestinian state.”

In his speech on Thursday, Mr. Abu Amr, of the Palestinian Authority, pointed out that Israel itself had been established through a U.N. resolution, not through negotiations. He was referring to Resolution 181, which called for a Palestine state to be partitioned into a Jewish state and an Arab state. It was passed by the General Assembly in 1947.

But Israel’s ambassador to the United Nations, Gilad Erdan, on Thursday denounced the resolution that went before the Security Council as a “prize for terror.” He added, “The only thing that forced, unilateral recognition of a Palestinian state will do is to make any future negotiations almost impossible.”

China was one of the countries that voted in favor of the proposal, and its ambassador to the United Nations, Fu Cong, said he found the U.S. veto “most disappointing.”

The vote was supposed to take place on Friday, but Algeria and the Arab Group of nations wanted it on Thursday during a scheduled session on the Middle East conflict attended by many foreign ministers from regional countries, including Iran and Turkey.

Reporting was contributed by Anushka Patil , Farnaz Fassihi , Richard Pérez-Peña , Michael Levenson and Motoko Rich . Jack Begg contributed research.

An earlier version of this article misstated the year that the U.N. General Assembly voted to upgrade Palestine to a nonmember observer state. It was 2012, not 1988.

How we handle corrections

Yonette Joseph is a senior news editor on The New York Times’s International Desk. More about Yonette Joseph

Our Coverage of the Israel-Hamas War

News and Analysis

Israel has not provided evidence to support its accusations that many employees of the main U.N. agency  for Palestinian refugees are members of terrorist organizations, according to an independent review commissioned by the United Nations.

The United Nations says famine is likely to set in by May in Gaza. For those living under Israel’s attacks and a crippling blockade, every day is a race against time. Here’s how two Palestinian families  try to keep their children alive.

Israel has failed to achieve its two primary goals of the war, while the suffering of Palestinians  erodes support even among its allies. Here’s a look inside the stark reality  of Israel’s fight in Gaza.

The United States is considering imposing sanctions on one or more Israeli battalions accused of human rights violations during operations in the occupied West Bank , according to a person familiar with the deliberations.

PEN America’s Fallout: The free expression group PEN America has canceled its 2024 literary awards ceremony following months of escalating protests over the organization’s response to the war in Gaza , which has been criticized as overly sympathetic to Israel.

Fears Over Iran Buoy Netanyahu: The Israeli prime minister lost considerable support after the Hamas-led Oct. 7 attacks on Israel. Tensions with Iran have helped him claw  some of it back.

A Surprising Rift: The Israel-Hamas war, which has roiled cultural and political institutions far beyond the Middle East, is causing divisions in a prominent Japanese American group .

Mobilizing the American Left: As the death toll in Gaza climbed, the pro-Palestinian movement grew into a powerful, if disjointed, political force in the United States . Democrats are feeling the pressure.