scope:

Applicability.

This regulation applies to U.S. Army Nonappropriated Fund Contracting Activities. It does not apply to Army and Air Force Exchange Service, the U.S. Army Reserve, the Army National Guard/Army National Guard of the United States , Chaplain' s Nonappropriated Funds, the U.S. Army Nonappropriated Fund Employee Retirement Plan Trust, th e U.S. Army Nonappropriated Fund Employee 401(k) Savings Plan Trust, or the Army Banking and Investment Fund (investmentcontracts only).

Purpose

This regulation establishes and implements policy governing acquisitions made with nonappropriated funds (NAF) within the Department of the Army (DA). Department of Defense (DOD) policy regarding the execution of NAF procurement is set forth in DOD Directive (DODD) 4105.67 and DOD Instruction (DODI) 4105.71.

The goal of the NAF procurement system is to obtain quality supplies, services, and construction in an efficient, cost-effective, and timely manner. The NAF procurement system enables contracting officials to exercise innovative and creative processes while providing policy and guidance for executing contracts and ensuring that the right contractor for the requirement is selected. When obligating NAF, contracting officials (both NAF and appropriated fund (APF)) shall follow the NAF policy and guidance contained herein and, based on prudent discretion and sound business judgment, may employ other appropriate acquisition procedures that do not violate applicable laws, statutes, or regulations. The NAF procurement system promotes and encourages-

(1) The selection of the contractor with the best overall value to satisfy the nonappropriated fund instrumentality (NAFI) mission.

(2) The use of discretion, sound business judgment, and flexibility while maintaining fairness and integrity.

(3) Simplified acquisition methods and innovative processes, as appropriate, to conduct timely and cost-effective procurements.

(4) Open communication and access to information throughout the procurement process using electronic methods for information exchange.

(5) Maximum practicable competition in accordance with paragraph 2-12. However, sole-source contracting is permitted when it is in the best interest of the NAFI, in accordance with paragraph 2-13.

(6) The use of a range of contract types and transactions best suited to a particular procurement.

(7) High standards of conduct and professional ethics.

(8) The use of contractors with a record of successful past performance or that demonstrate the ability to perform.

(9) The use of responsible prospective contractors as defined in the glossary of this regulation. If a policy or particular strategy or practice is in the best interest of the NAFI and is neither specifically addressed in this regulation nor prohibited by law, statute, or other regulation, NAF contracting officers should not assume that it is prohibited. Rather, absence of direction should be interpreted as permitting contracting officers and other acquisition team members to be innovative and use sound business judgment to accomplish the procurement in the most cost-effective manner. The strategy or practice must be documented in the contract file.