FAIRCHILD SPACE & DEFENSE SYSTEMS, A DIVISION OF FAIRCHILD CAMERA & INSTRUMENT CORPORATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP66B00728R000400020011-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 92
• Document Creation Date: December 12, 2016
• Document Release Date: May 1, 2002
• Sequence Number: 11
• Publication Date: July 15, 1963
• Content Type: CONT

Approved For Release 2
No. 63-091
NEGOTIATED CONTRACT Contract No. FI-5777
Fairchild Space & Defense Systems
A Division of Fairchild Camera & Instrument Corporation
Syossett, New York
Contract For: See Schedule Fixed Price:
Mail Vouchers to: Contracting Officer Effective Date: 15 July 1963
-F DP66B0072 R000400020011-2
5X1A
This contract is entered into, by and between the United States of America,
hereinafter called the Government, represented by the Contracting Officer
executing this contract, and the above-named Contractor which is a Corporation,
incorporated in the State of Delaware, hereinafter called the Contractor.
The parties hereto agree that the Contractor shall furnish the facilities and
deliver all supplies and perform all the services set forth in the attached
schedule issued hereunder, for the consideration stated herein.
The rights and obligations of the parties to this contract shall be subject
to and governed by the Schedule, Exhibit A and the General Provisions (AF
basic agreement number AF 33 (657)-5087), as modified which together with this
signature page and the accompanying certificate comprise this Contract No.
FI-5777. In the event of any inconsistency between the Schedule and the General
Provisions, the Schedule shall control.
IN WITNESS WHEREOF, the parties hereto have executed this contract as of
1963.
FAIRCHILD CAMERA & INSTRUMENT CORPORATION
25X1A
THE UNITED-STATES OF AMR TA
25X1A
TITLE Vice President and Comptroller
Contracting Officer
F2 ~ ~ r-.
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Contract No. FI-5777
INDEX TO SCHEDUIE
Page
PART I - SCOPE OF WORK . . . . . . . . . . . . . . . . . . . . . 4
PART II - PERIOD OF PERFORMANCE AND DELIVERY. . . . . . . . . . . 4
PART III - FIXED PRICE . . . . . . . . . . . . . . . . . . . . . . 4
PART IV - LIMITATION OF GOVERNMENT'S OBLIGATION . . . . . . . . . 4
PART V - WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS. . . . . . 6
PART VI - SPECIAL SECURITY RESTRICTIONS . . . . . . 6
PART VII - AF BASIC AGREEMENT . . . . . . . . . . . . . . . . . . . 6
PART VIII - SPECIAL SUBCONTRACT CLAUSE . . . . . . . . . . . . . . . 7
PART IX - GOVERNMENT FURNISHED PROPERTY . . . . . . . . . . . . . 7
PART X - TECHNICAL FIELD SUPPORT . . . . . . . . . . . . . . . . 7
PART XI - GOVERNMENT FACILITIES . . . . . . . . . . . . . . . . . 7
PART XII - TRANSPORTATION COSTS . . . . . . . . . . . . . . . . . . 7
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c. It is contemplated that the funds presently allotted to this contract
will cover the work to be performed, as limited by the provisions of (b) above
(until the 30th day of September 1963). In the event funds allotted are considered
by the Contractor to be inadequate to cover the work to be performed until the
above date, or an agreed date in substitution thereof, the Contractor shall notify
the Contracting Officer in writing when within the next thirty (30) days the work
will reach a point which, in the event of termination of this contract pursuant
to the clause hereof entitled:''Termination for the Convenience of the Government,"
the total amount payable by the Government (including amounts payable in respect
of subcontracts and settlement costs), pursuant to Paragraph (e) thereof, will
approximate eighty-five per cent (85%) of the total amount then allotted to the
contract. The notice shall state the estimated date when such point will be
reached and the estimated amount of additional funds required to continue per-
formance to the above or an agreed substituted date. The Contractor shall,
thirty (30) days prior to the date above written or agreed substituted date,
advise the Contracting Officer in writing as to the estimated amount of additional
funds which will be required for the timely performance of the contract for a
further period as may be specified in the contract or otherwise agreed to by the
parties. If after such latter notification, additional funds are not allotted
by the date above written or by an agreed date in substitution therefor, the
Contracting Officer will, upon written request of the Contractor for the same,
terminate this contract on such date or the date set forth in the request,
whichever is later, pursuant to the provisions of the clause of this contract
entitled: "Termination for the Convenience of the Government."
d. When additional funds are allotted from time to time for continued
performance of the work under this contract, the parties shall agree as to
the applicable period of contract performance which shall be covered by such
funds and the provisions of Paragraphs (b) and (c) above shall apply in like
manner to such additional allotted funds and substituted date pertaining
thereto and the contract amended accordingly.
e. If the Contractor incurs additional costs, or is delayed in the per-
formance of the work under this contract, solely by reason of the failure of
the Government to allot additional funds in amounts sufficient for the timely
performance of this contract, and if additional funds are allotted an equitable
adjustment shall be made in the price or prices (including appropriate target,
billing, and ceiling prices where applicable) of said items or in the time of
delivery or both. Failure to agree to any such equitable adjustment hereunder
shall be a dispute concerning a question of fact within the meaning of the
clause of this contract entitled: "Disputes."
f. The Government may at any time prior to termination, and, with the
consent of the contractor, after notice of termination, allot additional funds
for this contract.
g. The Provisions of this clause with respect to termination shall in no
way be deemed to limit the rights of the Government under the clause hereof
entitled: "Default." The provisions of this clause are limited to the work on
and allotment of funds for the items set forth in (a) above. This clause shall
become inoperative upon the allotment of funds for the total price of said work
except for rights and obligations then existing under this clause.
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h. Nothing in this clause shall affect the right of the Government to
terminate this contract pursuant to the clause of the contract entitled
"Termination."
PART V - WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS
Notwithstanding the requirements of any of the General Provisions of this
contract to the contrary, whensoever the Contractor, in performance of the work
under this contract, shall find that the requirements of any of the clauses of
the General Provisions are in conflict with security instructions issued to the
Contractor by the Contracting Officer or by his duly authorized representative
for security matters, the Contractor shall call the attention of the Contracting
Officer to such conflict and the Contracting Officer or his duly authorized
representative for security matters ahall (i) modify or rescind such security
requirement or (ii) the Contracting Officer shall issue to the Contractor a
waiver of compliance with the requirements of the General Provisions conflicting
with such security requirements. Any waiver of compliance with the General
Provisions of this contract issued by the Contracting Officer shall be in writing,
except that the approval by the Contracting Officer of any subcontract issued
hereunder by the Contractor shall be deemed to constitute approval of waiver of
any clauses of the General Provisions in conflict with the stipulations of such
subcontract..
PART VI - SPECIAL SECURITY RESTRICTIONS
The Contractor shall not reveal (i) the specific nature or any details of
the work being performed hereunder or (ii) any information whatsoever with
respect to the department of the Government sponsoring this contract and the
work thereunder except as the Contractor is directed or permitted to reveal
such information by the Contracting Officer or by his duly authorized
representative for security matters, and notwithstanding any clause or section
of this contract to the contrary, the Contractor shall not interpret any clause
or section of this contract as requiring or permitting divulgence of such
information to any person, public or private, or to any officer or department
of the Government without the express consent of the Contracting Officer or
his duly authorized representative for security matters.
PART VII - AF BASIC AGREEMENT
Fixed Price Basic Agreement AF 33 (657)-5087 between the Contractor and the
Government, dated 29 November 1962, is incorporated herein by reference with the
following modifications:
a. Clause 44, "Renegotiation", of Section A is deleted in its entirety.
b. The following clauses only of Section B are included in this contract:
B.lA, B.2, B.3, B.4, B.14, B.22, B.27, B.28 and B.41.
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d. In clause B.14, "Progress Payments", the figure 80 is hereby inserted
in the blank spaces designated A, B, C, D and E.
PART VIII - SPECIAL SUBCONTRACT CLAUSE
The Fairchild Space and Defense Systems is authorized to procure from its
Semiconductor Division integrated circuits and/or Semiconductor devices on a
fixed price basis, which subcontract shall contain the terms and conditions of
a fixed price contract and will not be subject to inspection and/or audit,
notwithstanding any other provision of this contract.
The Contractor agrees in conjunction with this clause that prices quoted
are those quoted to most favored customers and in no event will exceed prices
quoted to any other corporation. It is further agreed that the foregoing special
subcontract clause shall be applicable only until another source is developed for
the integrated circuits and/or Semiconductor device at which time competitive
prices shall be obtained for these procurements.
PART 7X - GOVERNMENT FURNISHED PROPERTY
The Government will provide the Contractor with the Government Owned Property
contained in Exhibit B hereto.
PART X - TECHNICAL FIELD SUPPORT
Under a separate contract the Contractor will provide Technical Field Support
in accordance with the Statement of Work, Field Engineering Services, designated
FES No. 1, dated 25 September 1963.
PART XI - GOVERNMENT FACILITIES
The fixed price in Part III of this schedule is based upon the use by the
Contractor of the existing secured work area, Government furnished film and the
transfer of 'A' prime residual inventory.
PART XII - TRANSPORTATION COSTS
The Government will reimburse the Contractor for transportation costs
incurred by the Contractor in shipping deliverable items FOB Destination.
The Contractor will submit paid shipping invoices to the Government for
reimbursement thereof.
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EXHIBIT A
STATEMENT OF WORK
DESIGN, DEVELOPMENT AND FABRICATION
OF
"A" FOLLOW-ON NUMBER 2
SATELLITE MAPPING CAMERA SUBSYSTEM
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TABLE OF CONTENTS
1.0 SCOPE
2.0 APPLICABLE SPECIFICATIONS AND DOCUMENTS
3.0 DESIGN
4.0 PRODUCTION
5.0 TESTS
6.0 GROUND SUPPORT EQUIPMENT
7.0 REQUIRED DOCUMENTATION AND REPORTING BY FSDS
8.o ADMINISTRATION
8.1 Program Management and Systems Engineering
and Technical Direction
8.2 Management Liaison
9.0 EQUIPMENT FURNISHED TO THE GOVERNMENT BY FSDS
10.0 MATERIALS AND SERVICES FURNISHED BY THE GOVERNMENT
11.0 PACKAGING AND SHIPMENT
SPECIAL HSy~
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3.0 DESIGN
3.1 FSDS shall have the total responsibility for develop-
ment and design of the "A" Follow-On Nr. 2 camera
subsystem according to the above Design Control Speci-
fication per paragraph 2.3 and consistent with the
applicable requirements set forth in the SE "A" Program
Requirement Specification per paragraph 2.1.
3.2 Design changes and/or changes to specifications which
affect the functional configuration of the subsystem
or interface between contractors shall be submitted to
SE for review, and to the Program Office for approval.
3.3 In order to achieve maximum benefit from previous
programs, existing designs shall be used wherever possible,
provided they are optimum for the anticipated mission.
No fundamental changes shall be made except through
approved technical directives.
3.4 FSDS shall insure, in coordination with A/P, that all
changes to the camera system and its ground support
system are designed with regard to the limitations
and capabilities of the personnel who will assemble,
checkout, repair, operate camera subsystem and assist
in compatibility tests.
3.5 FSDS shall insure in coordination with SE Field Engi-
neering and/or SE Quality Assurance, that prior to
first article acceptance testing, all subsystem or
interface drawings, specifications, data sheets, and
procedures are compatible and conform to established
A/P, SE and Program Office policies and procedures.
4.0 PRODUCTION
4.1 FSDS shall design and fabricate four (4) mapping cameras
and cassettes in the "A" Follow-On Nr. 2 subsystem
configuration in accordance with the Design Control
Specification referenced in paragraph 2.3 of this
document.
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SPECIAL E^,w"MDUM
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4.2 FSDS shall fabricate and furnish E' clocks (P/N 1089B1)
for use in the camera subsystem. The Shutter Timer,
connecting harness, and other components shall be
compatible with the E' clock.
4.3 FSDS shall furnish spares in accordance with the following:
4.3.1 On or before ninety (90) days after authorization
to proceed, FSDS shall furnish the Systems
Engineering Contractor with seven (7) copies of
a production list containing the part number,
description, and quantity of those parts deemed
necessary by FSDS to support the equipments after
shipment from New York considering the delivery
schedule. This list shall indicate those long
lead-time items already released to support the
equipment.
4.3.2 If, within thirty (30) days from the date of
submission, the Systems Engineering Contractor
and the Program Office has neither approved nor
disapproved all the items contained in such
production lists, those items shall be deemed
to have been authorized for provisioning purposes.
In the event items are disapproved by the Program
Office, procurement activity shall be terminated
where necessary.
4+.4 Ground support equipment shall be modified as defined
in Section 6.0.
4.5 FSDS shall inspect existing film spools and supply spool
support structures, and refurbish as required.
FSDS shall provide facilities, materials, security and services
necessary to perform qualification tests on previously unquali-
fied components and subsystems as well as acceptance tests
on each deliverable article. This function also embraces such
additional and special tests as are normally required, such
as feasibility tests, functional breadboards, engineering
analysis, etc.
SPECIAL r:,; ~M" iDL I G
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5.1 FSDS shall perform Inspection and Acceptance Tests
in accordance with Specification Nr. ATS1015-4012
and the following:
5.1.1 Inspection of the material to be delivered
from FSDS shall be at a level deemed
necessary by FSDS and approved by the
Government to insure performance. FSDS shall
provide additional inspection services in
the event performance verification or rework
is necessary to such material after acceptance
and delivery. FSDS shall also verify that
no damage in transit has occurred to its
material after shipment from one facility to
another. FSDS will be responsible for any
damage incurred in shipment from FSDS facility
to destination in accordance with Clause 6 of
the General Provisions.
5.1.2 Final acceptance of equipment and materials to
be delivered shall be at FSDS. The Systems
Engineering Contractor and other Program Office
representatives will be notified five (5) days
prior to the beginning of final acceptance tests.
These tests shall be administered in accordance
with the approved Acceptance Test Procedures.
Requests for waivers on end item equipment
deliveries shall be submitted to SE for recom-
mendation, and to the Program Office for
approval. The execution of a DD Form 250,
which will contain concurrence signature of
the Program Office representative, shall
constitute final acceptance. Copies of the
DD Form 250 will be forwarded to the Contracting
and Finance Officers.
5.2 Review of component fabrication and testing will be
conducted jointly between FSDS and SE Field Quality
Assurance prior to the first article production phase of
the program.
5.3 SE and the Program Office shall monitor all acceptance
tests.
SPEC a.'_ _ G
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5.4 FSDS shall notify SE and the Program Office of pending
tests, to assure adequacy of test coverage.
6.0 GROUND SUPPORT EQUIPMENT
FSDS shall utilize previously built support equipment for
complete camera subsystem tests. In view of the substantial
investments in this type of equipment, existing handling,
test, checkout, and calibration equipment will be used,
either directly, by modifications which were previously
developed on prior programs, or by such additional modifi-
cation as may be required for compatibility with the "A"
Follow-On Nr. 2 subsystem.
7.0 REQUIRED DOCUMENTATION AND REPORTING BY FSDS
7.1 Publications
FSDS will append the existing previously delivered
manuals describing the complete satellite mapping
camera subsystem operation, field maintenance, and
checkout. The form and extent shall be such as to
bring the existing manual into clear accord with the
"A" Follow-On Nr. 2 'subsystem. FSDS will furnish to
SE, one (1) reproducible master and ten (10) printed
copies of the appendices to the existing manual.
Delivery of these appendices shall be no later than
the delivery of the first subsystem unit.
7.2 Engineering Drawing List
A list indicating FSDS Engineering Drawings shall be
forwarded to SE and maintained in an up-dated
condition.
7.3 FSDS shall prepare and furnish to SE all acceptance
and qualification specifications as required.
Modifications to the existing approved system
acceptance and qualification specifications shall be
approved by the Systems Engineering Contractor.
7.1. FSDS shall furnish to SE such drawings, schematics and
specifications necessary to accomplish system
SPECIAL 6 L' LING
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integration and maintain proper interface between
associate contractors.
7.5 FSDS shall furnish the following reports and attend
required meetings as follows:
7.5.1 Weekly TWX progress report - to be forwarded
to SE and Program Office on Wednesday and
shall report schedule status and significant
highlights of development for the preceding
week - ending Saturday.
7.5.2 System Engineering Meetings shall be held
approximately once each month, normally at
A/P and FSDS-New York alternately. Such
meetings shall be chaired and minutes prepared
and distributed by the Systems Engineering
Contractor. All Associate Contractors shall
present such briefing aids and data as required.
SE shall set the date and place for all meetings,
with approval of the Program Office. A
recommended agenda will be furnished the Program
Office at least one week prior to each meeting
for review and approval.
7.6 FSDS shall prepare and furnish three (3) copies of all
qualification and/or special test reports within 15 days
after completion of testing.
7.7 FSDS shall provide the Systems Engineering Contractor
documentation with each mapping camera subsystem as
follows:
7.7.1 Mapping Camera Subsystem Logbook.
7.7.2 Mapping Camera Subsystem Electrical Schematics
as wired (three copies each).
7.7.3 Calibration data (three copies each).
7.7.4 Acceptance Test Reports (three copies each).
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7.8 Reports and Monitoring
All acceptance test results and failure analyses shall
be submitted promptly to SE and to the Program Director
for review and analysis.
7.9 Repairs, modifications and malfunctions not resulting
in failure shall be reported promptly and in detail
to SE and the Program Office.
8.0 ADMINISTRATION
8.1 Program Management and Systems Engineering and Technical
Direction
8.1.1 Program management and technical direction shall
be provided by SAFSP through the SP-11 Program
Office, as the agent for all interested agencies
of the Government. The SP-11 Program Office
will be the single day-by-day point of contact
with the Contractor.
8.1.2 The function of the Systems Engineering Contractor
is as specified in "Operating Procedure for
Systems Engineering and Technical Direction",
SP3-279, Revision A, dated 10 June 1963, which
forms a part of this Statement of Work.
8.2 Management Liaison
FSDS shall provide full and complete coordination required
to ensure satisfactory completion of "A" Follow-On Nr. 2
project phases within schedule and contractual requirements.
9.0
EQUIPMENT FURNISHED TO THE GOVERNMENT BY FSDS
Delivery Summary - FSDS shall deliver the work called for
above in accordance with the following schedule. Unless
otherwise specified, acceptance and inspection shall be at
FSDS's plant for shipment to be made F.O.B. destination.
SPECIAL F!A LING
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10.0 MATERIALS AND SERVICES FURNISHED BY THE GOVERNMENT
The Government shall furnish or cause to be furnished, the
items listed below:
There shall be supplied to FSDS, 5" film to meet
requirements for testing and operational checks.
Specific amounts and types of film are to be
determined by FSDS for use in New York testing and
by A/P for West Coast system test and actual final
use as early in the program as possible, but in
sufficient time to allow the Government to furnish
same to Contractor's schedule. This will normally
be a 90-day lead-time item.
10.2 Access to all test and operational telemetry data
reflecting the performance of the camera subsystem,
as required.
10.3 FSDS will be furnished and is also authorized to use
on a no-charge-for-use basis, such items of special
tooling, test equipment, ground handling equipment,
ground support equipment, and facilities generated
under previous "A" Program contracts, without
jeopardizing active contracts.
10.4 Gold foil shall be supplied to FSDS by the A/P associate.
Quantity to be limited to 20 pcs 24 x 48 x .002 inches
adhesive backed tape, coated with 10 microinches of
evaporated gold.
11.0 PACKAGING AND SHIPMENT
FSDS shall utilize residual camera transit cases and supply
spool support structures. Existing cassette transit cases
will also be used. A/P will make these necessary transit
cases available to FSDS.
11.1 Shipment is F.O.B. destination via such caxriers and to
such destinations as may be designated by the Program Office.
11.2 Spares shall be shipped F.O.B. destination for maintenance
of accountability in a Stores Area. The parts shall be
available to FSDS Field Engineering and Flight Support
Group to replace those parts as may be necessary to certify
flight readiness of the camera subsystems.
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Contract No. FI-5777
EXHIBIT B
Raw Glass
PECO P/N
Description (Type of Glass)
Quantity
5)+8-1001
LAK-17
7
1002
BASF-10
7
1003
LF-19
15
1004
RAF-8
6
1004
BAF-8 Partially Fabricated
(NG)
1
1005
EK-448
4
1005
LF-19
14
1006
LAK-17
2
1007
LAK-17
4
1007
LAK-l7 Partially Fabricated
1
1008
EK-448
5
1008
LF-19
14
1009
SF-5
7
1010
EK-448
6
1010
LF-19
17
1010
LF-19 Partially Fabricated
2
1011
SSK-8
7
1012
LAK-17
7
Tools & Fixtures
PECO P/N
Description
Quantity
T-548-1013-1
Drill Jig
1013
Arbor
1016
Arbor
1017-1
Form Tool
1018
Arbor
1019
Arbor
1020-2
Form Tool
1021-1
Form Tool
1022-1
Form Tool
1023
Arbor
1024-1
Form Tool
1028
Arbor
1013
Lathe Fixture
1016
Lathe Fixture
1017
Lathe Fixture
1018
Lathe Fixture
1019
Lathe Fixture
1020
Lathe Fixture
1021
Lathe Fixture
1022
Lathe Fixture
1023
Lathe Fixture
1024
Lathe Fixture
1025
Lathe Fixture
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Tools & Fixtures (Cont.)
PECO P/N Description
T-548-1026 Lathe Fixture
1027 Lathe Fixture
Finished Parts - Glass & Metal
PECO P N Description
548-001l Filter Assembly - Red
0012 Filter Assembly - Yellow
1057 Mount Filter Cell
1027 Mount Filter Cell
1029 Cover Front
1032 Adapter - Cover
1033 Cover - Rear
1034 Barrel - Mehanite
Finished Parts & Castings
Quantity
Quantity
PECO P N
Description
Quantity
548-1016
Cell #1, 60% Compl.
1
1013
Barrel Mehanite Casting
1
1020
Retainer - Filter
20
1027
Mount Filter Cell
3
1034
Barrel - Aluminum
6
TEST EQUIPMENT
A. D&A Rack - Item 7 - Units 3 and 4 "Deliverable"
DD-250 Partial X34
Shipped 4/12/63
Crates Marked: 7-5-A 1/9 to 9/9: 7-5B 1/9 to 9/9
Weight and cubage not available but cubage could be 100 cu. ft.
B. D&A Rack - Item 7 - Units 1 and 2 "In House"
DD-250 Partial #28 Unit 1
DD-250 Partial X29 Unit 2
Shipped 10/5/62
Markings: Unit 1 - 7-5-A-2/9 Weight 72 lbs. Cube 5.6 ft.
Unit 2 - 7-5-A-2/9 Weight 61 lbs. Cube 6.6 ft.
C. Residual Inventory Item No. 1659
National Co. Atomichron Model NC-1001A
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Basic Agreement No. AF33(657)?5087
25X1A
Initia.tnr o
UNITED STATES AIR FORCE
Fixed-Price Basic Agreement with FAIRCHILD CAL ,RA AND INSTRUKI;NT CORPORATION
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BASIC AGREEMENT 1US THE UNITED STATES AIR FORCE AND
FAIRCHILQ A LRA AND INSTRS Orly iU j0
~, 29th November 62
This memorandum a end, q t} s of 9_.._.
aCL ,d. ttRar RetI%9 W 1 1 c1or CltWAr 11 0 1PeT' `f'tts~ Gb~ePhment may at all
reasonable times make such examination or audit as the Contracting Officer may require of the subcontractor's
books, records, documents, and other evidence, pertinent to the performance of the subcontract, and (ii) shall re-
quire each such subcontractor whose subcontract is on other than a firm fixed-price basis to insert the entire sub-
stance of this subparagraph, including this (ii), in all his subcontracts. The term "subcontract," as used in this sub-
paragraph (2) only, excludes firm fixed-price subcontracts not in excess of $2,500 and subcontracts f or utility
services at rates established for uniform application to the general public.
(h) Contract Modifications. The total adjusted price, as determined in accordance with paragraph (d) above,
shall be evidenced by a modification to this contract signed by the Contractor and the Contracting Officer and shall
apply to supplies delivered and to services performed under this contract.
(i) Adjustment of Payments. Pending execution of t he contract modification referred to in paragraph (h)
above, the Contractor shall submit invoices or vouchers in accordance with billing prices as provided in this para-
graph. The billing prices shall be the target prices set forth in this contract; provided, that if at any time it
appears that the then current billing prices do not provide for payments consistent with the provisions of subpara-
graph (j) (3) below, the parties may agree to revised billing prices, which shall be reflected in a modification to
this contract. Billing prices are for the sole purpose of providing for interim payments and shall not affect the
determination of the total adjusted price under paragraph (d) above. After execution of the contract modification
referred to in paragraph (h) above, the total amount paid or to be paid on all invoices ox vouchers shall be adjusted
to reflect the total adjusted price and any additional payments, refunds, or credits, resulting therefrom shall be
promptly made.
(j) Limitation on Payments. (1) This paragraph (j) shall not apply after final price revision to the full
extent permitted by this contract.
(2) Within forty-five (45) days after the end of each quarter of the Contractor's fiscal year, beginning for
the quarter in which a delivery is first made (or services are first performed) and accepted by the Government un-
der this contract, and as of the end of each quarter, the Contractor shall submit to the Contracting Officer a cu-
mulative statement setting forth:
(i) the total contract price of all supplies delivered (or services performed) and accepted by the Govern-
ment for which final prices have been established;
(ii) the total costs (estimated to the extent necessary) reasonably incurred f or and properly allocable
solely to the supplies delivered (or services performed) and accepted by the Government for which final prices
have not been established;
(iii) that portion of the total target profit which is in direct proportion to the supplies delivered (or
services performed) and accepted by the Government for which final prices have not been established, increased
or decreased in accordance with the incentive profit formula set forth in (d)(2) above when the amount of costs
stated under. (ii) above differs from the aggregate target costs of such supplies or services; and
(iv) the total amount of all invoices or vouchers for supplies delivered (or services performed) and accepted
by the Government (including amounts applied or to be applied to liquidate progress payments).
(3) Notwithstanding any provisions of this contract authorizing greater payments, if on any quarterly state-
ment the amount of (2) (iv) above exceeds the sum of (2) (i), (ii), and (iii) above, the Contractor shall immediately
refund or credit to the Government against existing unpaid invoices or vouchers covered by such statement the
amount of such excess less (i) the cumulative total of any previous refunds or credits under this clause (ex-
clusive of any tax credits under Section 1481 of the Internal Revenue Code of 1954) and (ii) any applicable tax
credits under Section 1481 of the Internal Revenue Code of 1954. If any portion of such excess has been. applied
to the liquidation of progress payments, such amount (less all tax credits under the Internal Revenue Code) may
be added or restored to the unliquidated progress payment account, to the extent consistent with the progress pay-
ments clause of this contract, instead of direct refund thereof.
(4) The Contractor shall (i) insert in each price redetermination or incentive price revision subcontract
hereunder the substance of this "Limitation on Payments" provision, including this subparagraph (4), modified
to omit mention of the Government and reflect the position of the Contractor as purchaser and of the subcontractor
as vendor, and to omit that portion of subparagraph (3) relating to tax credits, and (ii) include in each cost-
reirnbursement type subcontract hereunder a requirement that each price redetermination and incentive price re-
vision subcontract thereunder will contain the substance of this "Limitation on Payments" provision, including this
subparagraph (4) modified as outlined in (i) above.
(k) Disagreements. If the Contractor and the Contracting Officer fail to agree upon the total adjusted price
within 60 days after the date on which the data required by (c) above are to be submitted, or within such further
time as may be specified by the Contracting Officer, such failure to agree shall be deemed to be a dispute concern-
ing a question of fact within the meaning of the clause of this contract entitled "Disputes," and the Contracting
Officer shall promptly issue a decision thereunder.
(1) Termination. If this contract is terminated prior to establishment of the total adjusted price, prices of
supplies or services subject to price revision under this clause shall be established pursuant to this clause for (i)
completed supplies accepted by the Government and services performed and accepted by the Government, and (ii)
in the event of a partial termination, supplies and services which are not terminated. All other elements of the ter-
mination shall be resolved pursuant to other applicable,tprovisions of this contract.
In the event the contract calls for spare parts or oo'th 1' supplies or services, which are to be ordered un-
der a provisioning document or Government option, a'hd the prices of such supplies or services are to be
made subject to incentive price revision in accordance with the above clause, the following paragraph (m)
shall be included in such clause:
(m) Spare Parts. Spare parts, other supplies, or services, which are to be furnished under this contract pur-
suant to a provisioning document or Government option, shall be subject to price' revision in accordance with the
provisions of this clause, and any prices established for such spare parts, other supplies, or services, pursuant to
such provisioning document or Government option, shall be deemed to be target prices. Target cost and profit cov-
ering such spare parts, other supplies, or services may be established either separately, in the aggregate, or in any
combination thereof, as the parties may agree. (Jul. 1958)
MCP 71-.601, f^"0 AF.'31657)"5087
Approved For Release 2002/06/11 : CIA-RDP66B00728R000400020011-2
 Approved For Release 2002/06/11 : CIA-RDP66B00728R000400020011-2
B_._ ...__...PROSPECTIVE PERIODIC PRICE REDET.ERMINAtION AT STATED INTERVALS (July 1960)
(a) General, The unit prices and the total price set forth in t h is contract shall be periodically redeter-
mined in accordance with the provisions of this clause, provided, that in no event shall the total amount paid
under this contract exceed .... ..............................._................ ................. .......dollars ($.......':......). The prices for supplies de-
livered and services performed prior to the first effective date of price redetermination shall remain fixed.
(b) Price Redetermination Periods. For the purpose of price redetermination the performance of this contract
is divided into successive periods. The first period shall extend from the date of this contract to ....._.._..' ...............
.................. ................. and the second and each succeeding period shall extend for .............................................................
(......... '......... ) months from the end of the last preceding period, except that t he final period may be varied by
agreement of the parties. The first day of the second and each succeeding period shall be the effective date of
price redetermination for the period.
(c) Price Redetermination. Not more than ....................................... days nor less than ............I........................ days
before the end of each redetermination period, except the last, and as otherwise provided in (iii) below, the Con-
tractor shall submit
(i) proposed prices for supplies which may be delivered or services which may be performed in the next
succeeding period under this contract, together with-
(A) an estimate and breakdown of the costs of such supplies or services on DD Form 784 or in any other
form on which the parties may agree;
(B) sufficient data to support the accuracy and reliability of such estimate; and
(C) an explanation of the differences between such estimate and the original (or last preceding) esti-
mate for the same supplies or services;
(ii) a statement of all costs incurred in the performance of this contract through the end of the ............
L?..- month prior to the date of the submission of proposed prices, on DD Form 784 or in any
other form on which the parties may agree, together with sufficient supporting data t o disclose unit costs a n d
cost trends for--
(A) supplies delivered and services performed; and
(B) inventories of work in process and undelivered contract supplies on hand (estimated to the extent
necessary);
(iii) supplemental statements of costs incurred subsequent to the date set forth in (ii) above for-
(A) supplies delivered and services performed; and
(B) inventories of work in process and undelivered contract supplies on hand (estimated to the extent
necessary);
as and to the extent that such information becomes available prior to the conclusion of negotiations on redetermined
prices; and
(iv) any other relevant data which may reasonably be required by the Contracting Officer.
Upon receipt of the data required by, this paragraph (c), the Contractor and the Contracting Officer shall promptly
negotiate to redetermine fair and reasonable contract prices for supplies which may be delivered and services which
may be performed in the period following the effective date of price redetermination. Where the Contractor fails
to submit the data as required above within the time specified, payments under this contract may be suspended
by the Contracting Officer until the data are furnished.
(d) Records. (1) The Contractor shall maintain books, records, documents, and other evidence, sufficient to
reflect properly all direct and indirect costs of whatever nature claimed to have been incurred and anticipated to
be incurred for the performance of this contract. However, no material change will be required to be made in the
Contractor's accounting procedures and practices if they conform to generally accepted accounting practices and
if the cost data required to be furnished under (c) above are readily ascertainable therefrom. Each subcon-
tract placed by the Contractor :hereunder on other than a firm fixed-price basis (i i shall provide that the subcon-
tractor shall maintain books, records, documents, and other evidence, sufficient to reflect properly all direct and
indirect costs of whatever nature claimed, to have been incurred and ,anticipated to be incurred in the performance
of such subcontract and (ii) shall require each such subcontractor to insert the entire substance of this subpara-
graph, including thi4 a i.i), in all his subcontracts which are on other than a firm fixed-price basis.
(2) The Government may at all reasonable times until the expiration of three years after final payment
under this contract make such examination or audit as the Oontracting Officer may require of the Contractor's
books, records, documents, and other evidence, pertinent to the performance of this contract, for any period.
(e) Certification. An authorized responsible official of the Contractor shah certify on each statement of costs
submitted to the Contracting Officer pursuant to (c) above that the incurred costs are based upon the records of
the Contractor, that such records reflect generally accepted accounting principles and. practices normally followed
by the Contractor, that such costs are correct to the best of his knowledge and belief, and that the accompanying
estimate of costs is considered reasonable.
(f) Subcontracts. (1) No subcontract placed under this contract shall provide for payment on a cost-plus-a-
percentage-of-cost basis; and the Contractor shall not, without the prior written consent of the Contracting Officer,
place any subcontract which is on a cost-plus--a-fee basis and which would involve an estimated amount in excess
of $10,000, including the fee. The Contracting Officer may, in his discretion, ratify in writing any such cost-plus-a-
fee subcontract and such action shall constitute the consent of the Contracting Officer as required by this sub-
paragraph (1).
*(As ee for}.lj in th.r, pAr of en'L.t.:,ed n'rnf:,rmation for Price
Redet e x na; t`.nes Q'
5or~~
MCP 71-618B, Ju~A pr d) For Release 2002/06/1'x` CIA-'CIAvlT
(Type A)
 (2) EA)DpLib8af +~'c0lf a*ftl QZC ?~1o1r? :hgA rP(~PM7 `riP't4 Cri2?Gd)efhment may at
all reasonable times until the expiration of three years after final payment under such subcontract make such ex-
amination or audit as the Contracting Officer may require of the subcontractor's books, records, documents, a n d
other evidence, pertinent to the performance of the subcontract, and (ii) shall require each such subcontractor
whose subcontract is on other than a firm fixed-price basis to insert the entire substance of this subparagraph, in-
cluding this (ii), in all his subcontracts. The term "subcontract," as used in this subparagraph (2) only, excludes
firm fixed-price subcontracts not in excess of $2,500 and subcontracts for utility services at rates established for
uniform application to the general public.
(g) Contract Modifications. Each negotiated redetermination of prices shall be evidenced by a modification to
this contract, signed by the Contractor and the Contracting Officer, setting forth the redetermined prices for sup-
plies delivered and services performed hereunder during the applicable price redetermination period.
(h) Adjustment of Payments. Pending execution of the contract modification referred to in paragraph (g)
above, the Contractor shall submit invoices or vouchers in accordance with billing prices as provided in this para-
graph. The billing prices shall be the prices set forth in this contract; provided that, if at any time it appears that
the then current billing prices do not provide for payments consistent with the provisions of paragraph (i) (3)
below. the parties may agree to greater or lesser billing prices, which shall be reflected in an amendment or sup-
elemental agreement to this contract. Billing prices are for the sole purpose of providing for interim payments
and shall not affect the redetermination of prices under this clause. After execution of the contract modification
referred to in paragraph (g) above, the total amount paid or to be paid on all invoices or vouchers shall be ad-
lusted to reflect the agreed prices, and any additional payments, refunds, or credits, resulting therefrom shall be
promptly made
) Limitation on Payments 1) This paragraph (i) shall apply only during a period for which firm prices
have not been established,
(2) Within 45 days after the end of each quarter of the Contractor's fiscal year, beginning for the quarter
:_ 'which da. delivery is first made (or services are first performed) and accepted by the Government under this Con-
tract, and as of the end of each quarter, the Contractor shall submit to the Contracting Officer a statement cumu-
lative from the inception of the contract, setting forth.
(i) the total contract price of all supplies delivered (or services performed) and accepted by the Govern-
rnen t for which final prices have been established;
(ii) the total costs (estimated to the extent necessary) reasonably incurred for and properly allocable
solely be the supplies delivered (or services performed) and accepted by the Government for which final prices
have not been established:
(iii) that portion of the total interim profit (used in establishing the initial contract price or agreed to
for the purpose of this paragraph (i), Limitation on Payments), which is in direct proportion to the supplies de-
fivered (or services performed) and accepted by the Government for which final prices have not been established;
and.
(iv) the total amount of all invoices or vouchers for supplies delivered (or services performed) and ac-
cepted by the Government (including amounts applied or to be applied to liquidate progress payments),
provided, that such statement need not be submitted. for any quarter for which either no costs are to be reported
under (ii) above or revised billing prices have beer, established in accordance with paragraph (h) above and do not
exceed the existing contract price, the Contractor's price-redetermination offer, or a price based on the most recent
quarterly statement, whichever is least.
3) Nothwithsbanding any provision of this contract authorizing greater payments, if on any quarterly
;statement; the amount of (2) (iv) above exceeds the sum of (2) (i), (ii), and (iii) above, the Contractor shall im-
mediately refund or credit to the Government against existing unpaid invoices or vouchers covered by such state-
ment the amount of such excess less (i) the cumulative total of any previous refunds or credits under this clause
(exclusive of any applicable tax credits under Section 1481 of the Internal Revenue Code of 1954) and (ii) any
applicable tax credits under Section 1481 of the Internal Revenue Code of 1954. If any portion of such excess has
been applied to the liquidation of progress payments, such amount (less all tax credits under the Internal Revenue
Code) may be added or restored to the unliquidated progress payment account, to t h e extent consistent with the
progress payments clause of this contract, instead of direct refund thereof,
(4) The Contractor shall (i) insert in each price redetermination or incentive price revision subcontract
hereunder the substance of this "Limitation on Payments" provision, including this subparagraph (4), modified to
omit mention of the Government and reflect the position of the Contractor as purchaser and of the subcontractor
as vendor, and to omit that portion of subparagraph (3) relating to tax credits, a ri d (n) include in each cost-
reimbursement type subcontract hereunder a requirement that each price redetermination and incentive price re-
vision subcontract thereunder will contain the substance of this "Limitation on Payments" provision, including
this subparagraph (4), modified as outlined in (i) above.
(j) Disagreements.. If the Contractor and the Contracting Officer fail to agree upon redetermined prices for
any price redetermination period within ,.-e.?.. rte'- h0
.. days after the date on which the data required
by (c) above is to be filed, or within such further time as may be agreed upon by the parties, the failure to agree
upon redetermined prices shall be deemed to be a dispute concerning a question of fact within the meaning of the
clause of this contract entitled "Disputes," and the Contracting Officer shall promptly issue a decision thereunder.
For the purpose of (g)? (h), and (a) above, and pending final settlement of the disagreement on appeal, or by
failure to appeal, or by agreement, such a decision shall be treated as an executed contract modification. Pending
such final seJttlement, price redetermination for subsequent periods, if any, shall continue to be negotiated as herein-
before provided.
(k) Termination. If this contract is terminated, prices shall continue to be established pursuant to this clause
(;s for completed supplies accepted by the Government and services performed and accepted by the Government,
and (ii) in the event of a ,partial termination, for supplies and services which are not terminated. All other ele?
ments of the termination shall be resolved pursuant to other applicable provisions of this contract.
MCP 71--G18B, Jul 60 i Corot
I Type A)
---4k x":' 6 " 37
J
Approved For Release 2002/06/11 : CIA-RDP66B00728R000400020011-2
 Approved For Release 2002/06/11 : CIA-RDP66B00728R000400020011-2
B.,: INCENTIVE PRICE REVISION CLAUSE (SUCCESSIVE TARGETS) 11960)
(a) Definitions. As used in this clause, the following term shall have the meanings get forth below:
(i) The term "initial target price" kneans the unit price of any supplies or services under this contract
which is subject to adjustment in accordance with the provisions of paragraph (g) of this clause, and is composed
of "initial target cost" and "initial target profit."
(ii) The term "initial target cost" means that part of the initial target price which, at the time of its
negotiation, was agreed to as the estimate of the unit cost of the supplies or services being procured.
(iii) The term "initial target profit" means that part of the initial target price which at the time of its
negotiation, was agreed to as the unit target profit for furnishing the supplies or services if the target cost agreed
upon in accordance with the provisions of paragraph (g) herein is equal to the initial target cost.
(iv) The term "total initial target price" means the sum of the initial target prices.
(v) The term "total initial target cost" means the sum of the initial target costs.
(vi) The term "total initial target profit" means the sum of the initial target profits.
(vii) The term "target price" means the unit price of any supplies or services under this contract, which
is subject to adjustment in accordance with paragraph (i) of this clause, and is composed of "target cost" and
"target profit."
(viii) The term ""target cost" means that part of the target price which, at the time of its negotiation, is
agreed to as the estimate of the unit cost of the supplies or services being procured.
(ix) The term "target profit" means that part of the target price which, at the time of its negotiation, is
agreed to as the unit profit for furnishing the supplies or services at a cost equal to the target cost.
(x) The term "total target price" means the sum of the target prices.
(xi) The term. "total -target cast" means the sum of the target costs.
(xii) The term "total target profit" means the sum of the target profits.
(xiii) The term "total adjusted cost" means the final negotiated cost of all supplies or services which are
subject to price revision under this clause,
(xiv) The cec?m "total adjusted price" means the final contract price, as computed in accordance with this
clause, for all supplies or s tv%ces which art subject to price revision under this clause.
(xv) The term "prim c:tiJ.ic;g'' raean the maximum amount that the Government may be obligated to pay
the contractor for complete. pe rb)rmance cf this contract.
b. General., The supplies z? i~.:vicE identified in the Schedule as Items ............................
............................... are subject to price revision in accordance with the provisions of this clause. The prices of these
items as shown in the Schedule are the initial target prices and include an initial target profit of ..........................
............. -----------....... - percent: l......__:.._._ ) of initial target cost. Any supplies or services which are to be ordered
separately under, or otherwise added to, this contract, and which are to be subject to price revision in accord-
ance with the provisions of this clause, shall be identified as such in a modification to this contract.
(c) Submission of Data for Establish lent of Target Price. Within --------------------------------------------------------------------------
................ ) days after the end of the month in which there is completion of
...... .......... ................. and as otherwise
provided in (iv) below, the contractor shall submit:
(i) proposed target prices for supplies delivered and to be delivered and services performed under this
contract;
(ii) a statement of all costs incurred in the performance of this contract through the end of the month
specified above, on DD Form 784 or in any other form on which the parties may agree, together with sufficient
supporting data to disclose unit costs and cost trends for-
(A) supplies delivered and services performed; and
(B) inventories of work in process and undelivered contract supplies on hand (estimated to the extent
necessary);
(iii) an estimate of costs of all supplies delivered and to be delivered and all services performed and to be
performed under this contract, using the statement of costs incurred plus an estimate of costs to complete per-
formance, on DD Form 784 or in say other form or, which the parties ::nay agree, together with-
(A) sufficient data to support the accuracy and reliability of such estimate and
(B) an explanation of the differences between such estimate and the original estimate used in establishing
the initial unit prices set forth in this contract for the same supplies or services;
(iv) supplemental statements of costs incurred subsequent to the end of the month specified in (ii) above for-
(A) supplies delivered and services performed; and
(B) inventories of work in process and undelivered contract supplies on hand (estimated to the extent
necessary);
as and to the extent that such information becomes available prior to the conclusion of negotiations establishing
target prices; and
(v) any other relevant data which may reasonably be required by the contracting officer.
Submission of Data for Final Price Revision, Within .........
.. ....................... .. ............ (............ ''.......) days
after the end of the month in which the contractor has delivered the last unit of supplies and completed the services
called for by those Items listed in paragraph (b) above, the contractor shall submit, in such form as the contract-
ing officer may require, (i) a detailed statement of all costs incurred up to the end of that month in performing
all work under such Items, and (ii) an estimate of costs of such further performance, if any, as may be necessary
to complete
~~raa~ri~+~1c1 s'C~34i66B00728R000400020011-2
MCP 71-603, Mar 60 (Contd) AF3 3 657 -.5087
 (e) RQRpgQvggl)Fq1h? M 0 I?6p(,' 1,, I PfiPQP,7, Q,1 2AQj.1 edence, sufficient to
reflect properly all direct and indirect costs of whatever nature claimed to have been incurred and anticipated
to be incurred for the performance of this contract. However, no material change will be required to be made
in the contractor's accounting procedures and practices if they conform to generally accepted accounting practices
and if the cost data required to be furnished under (c) and (d) above are readily ascertainable therefrom. The
contractor shall segregate the costs of any supplies or services for which the price is fixed and not subject to
revision under this clause. Each subcontract placed by the contractor hereunder on other than a firm fixed-price
basis in c- nnection with the furnishing of the supplies or services identified in paragraph (b) above as being
subject to price revision (i) shall provide that the subcontractor shall maintain books, records, documents, and
other evidence, sufficient to reflect properly all direct and indirect costs of whatever nature claimed to have been
incurred and anticipated to be incurred in the performance of such subcontract and (ii) shall require each such
subcontractor to insert the entire substance of this subparagraph, including this (ii), in all its subcontracts which
are on other than a firm fixed-price basis.
(2} The Government may, at all reasonable times, until the expiration of 3 years after final payment under
this contract, make such examination or audit as the contracting officer may require of the contractor's books,
records, documents, and other evidence, pertinent to the performance of this contract.
(f) Certideation. An ivithorised responsible official of the contractor shall certify in such form as the con-
tracting officer may reasonably require, on each statement of costs submitted to the contracting officer pursuant
to paragraph (c) or (d) above that the incurred costs are based upon records of the contractor, that such records
r. effect generally accepted accounting principles and practices normally followed by the contractor, that such costs
?nrc complete and correct to the best of his knowledge and belief, and that the accompanying estimate of costs to
complete is considered reasonable.
ir) Establishment of Target Price and lacentive Formula. Upon submission of the information required by
paragraph (c) above, the contractor and the contracting officer shall promptly negotiate to establish the total
target you:, which when added to the total target profit determined as follows, shall constitute the total target
(1) If the total target cost is more than the total initial target cost the total initial target profit will be
decreased, or if the total target Copt is less than the total initial target cost the total initial target profit will be
increased, by .....?.........._ .................................................percent of the difference between the total initial target coat and
the total target cost provided that in no event will the total target profit be less than .................................................
pereen.t ! ..............%) or more than ................... .............. ...... ... percent .. %
. .. ....... ( ..............) of the t o t a l initial
target cost.
(1) The contractor and the contracting officer shall further negotiate to establish the price and profit
ad u,itmeiit formula, and price and profit ceiling, expressed as percentages of the total target cost. However, in
no event shall the price ceiling exceed ... .................::.............................................. percent (................%) of the total initial
target cost.
(3) The target cost, target profit and the terms of cost incentive sharing shall be evidenced by a modifi-
cation to this contract signed by the contractor and contracting officer.
(h) :Subcontracts. (1) No subcontract placed under this contract shall provide for payment on a cost-plus-
a- percentage of cost basis; and the contractor shall not, without the prior written consent of the contracting
officer, place any subcontract which is on a cost-plus-a-fee basis and which would involve a total price in excess
of $10,000, including the fee. The contracting officer may, in his discretion, ratify in writing any such cost-plus-
a-fee subcontract and such action shall constitute the consent of the contracting officer as required by this sub-
paragraph (1).
(2) Each subcontract placed by the contractor hereunder (i) shall provide that the Government may, at all
reasonable times, until the expiration of 3 years after final payment under such subcontract, make such examina-
tion or audit as the contracting officer may require of the subcontractor's books, records, documents, and other
evidence, pertinerri to the performance of the subcontract, and (ii) shall require each such subcontractor whose
subcontract is on other than a firm fixed-price basis to insert the entire substance of this subparagraph, including
this (ii), i.n all its subcontracts. The term "subcontract," as used in this subparagraph (2) only, excludes firm
fixed-price subcontracts not in excess of $2,500 and subcontracts for utility services at rates established for uni-
form application to the general public.
(i) Final Price Revision. Upon submission of the data required by paragraph (d above, the contractor and
the contracting officer shall promptly establish the total adjusted price in accordance with the following:
(1) On the basis of the information required by paragraph (d) above, together with any other pertinent
information, there shall be established by negotiation the total adjusted cost reasonably incurred or to be incurred
for and properly allocable to the supplies delivered (or services performed) and accepted by the Government, which
are subject to price revision under this clause. ?
(2) The total adjusted price shall be established by adding to the total adjusted cost an allowance for profit
determined as follows:
WHEN THE TOTAL ADJUSTED
Equal to the total target cost
Greater than the total target cost
CAST IS :
However, in no event shall (1) total adjusted
Total target profit.
Total target profit less ...................... .........................................
percent (....... ......... %) of the amount by which the total
adjusted cost exceeds the total target cost.
Total target profit plus .......... ....:_....
percent ( ..........:....?%o) of the amount by which the total
adjusted cost is less than the total target cost.
price exceed .............. .................. .................... ........._.. percent of the total
target cost, and (ii) the allowance for profit exceed ...... ...- ................ ......... ____ .......... percent of th; total target cost.
MCF '71-603, Mar 60 (Contd)
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 Approved For Release 2002/06/11 : CIA-RDP66B00728R000400020011-2
The above incentive share percentages and limitation on total adjusted price and allowance for profit shall be
negotiated at the time of establishment of target prices in accordance with paragraph (g) above.
(8) The final adjusted price of the items referred to in paragraph (b) shall be evidenced by a modification
to this contract signed by the contractor and contracting officer, and shall apply to such supplies delivered and
to such services performed under this contract.
(j) Adjustment of Payment. Pending execution of the contract modification referred to in paragraph (i) above,
the contractor shall submit invoices or vouchers in accordance with billing prices as provided in this paragraph.
The billing prices shall be the initial target prices set forth in this contract, until target prices are established
pursuant to paragraph (g) above; thereafter, the target prjc s shall be used for billing; provided, that if at
any time it appears that the then current billing prices do not provide for payments consistent with the pro-
visions of subparagraph (k) (3) below, the parties may agree to greater or lesser billing prices, which shall be
reflected in a modification to this contract. Billing prices are for the sole purpose of providing for interim
payments and shall not affect the determination of the total adjusted price under paragraph (i) above. After
execution of the contract modification referred to in paragraph (i) above, the total amount paid or to be paid on
all invoices or vouchers shall be adjusted to reflect the total adjusted price and any additional payments, refunds,
or credits, resulting therefrom shall be promptly made.
(k) Limitation on Payments. (1) This paragraph (k) shall not apply after final price revision to the full
extent permitted by this contract.
(2) Within forty-five (45) days after the end of each quarter of the contractor's fiscal year, beginning for
the quarter in which a delivery is first made (or services are first performed) and accepted by the Government
under this contract, and as of the end of each quarter, the contractor shall submit to contracting officer a cumuz
lative statement setting forth:
(i) the total contract price of all supplies delivered (or services performed) and accepted by the Gov-
ernment for which final prices have been established;
(ii) the total costs (estimated to the extent necessary) reasonably incurred for and properly allocable
solely to the supplies delivered (-or services performed) and accepted by t-h e Government for which final prices
have not been established;
(iii) that portion of the total target profit which is in direct proportion to the supplies delivered (or ser-
vices performed) and accepted by the Government for which final prices have not been established, increased or
decreased in accordance with the incentive profit formula set forth in (i) (2) above when the amount of costs
stated under (ii) above differs from the aggregate target costs of such supplies or services; and
(iv) the total amount of all invoices or vouchers for supplies delivered (or services performed) and ac-
cepted by the Government (including amounts applied or to be applied to liquidate progress payments).
(3) Notwithstanding any provision of this contract authorizing greater payments, if on any quarterly state-
ment the amount of (2) (iv) above exceeds the sum of (2) (i), (ii), and (iii) above, the contractor shall immediately
refund or credit to the Government against existing unpaid invoices or vouchers covered by such statement the
amount of such excess less (i) the cumulative total of any previous refunds or credits under this clause (ex-
clusive of any tax credits under Section 1481 of the Internal Revenue Code of 1954) and (ii) any applicable tax
credits under Section 1481 of the Internal Revenue Code of 1954. If any portion of such excess has been applied
to the liquidation of progress payments, such amount (less all tax credits under the Internal Revenue Code) may
be added or restored to the unliquidated progress payment account, to the extent consistent with the progress pay-
ments clause of this contract, instead of direct refund thereof.
(1) Disagreements. If the contractor and the contracting officer fail to agree upon the total target price
and cost incentive sharing or total adjusted price within 60 days after the date on which the data required by para-
graphs (c) or (d) above are to be submitted, or within such further time as may be specified by the contracting
officer, such failure to agree shall be deemed to be a dispute concerning a question of fact within the meaning of
the clause of this contract entitled "Disputes," and the contracting officer shall promptly issue a decision there-
under.
(m) Termination. If this contract is terminated prior to establishment of the total adjusted price, prices of
supplies or services subject to price revision under this clause shall be established pursuant to this clause for (i)
completed supplies accepted by the Government and services performed and accepted by the Government, and (ii)
in the event of a partial termination, supplies and services which are not terminated. All other elements of the
termination shall be resolved pursuant to other applicable provisions of this contract.
(n) Spare Parts. Spare parts, other supplies, or services, which are to be furnished under this contract pur-
suant to a provisioning document or Government option, shall be subject to price revision in accordance with the
provisions of this clause, and any prices established for such spare parts, other supplies, or services, pursuant to
such provisioning document or Government option, shall be deemed to be initial target prices or target prices as
agreed upon and stipulated in the pricing document supporting the provisioning or added items. Initial target or
target cost and profit and final adjusted prices covering such spare parts, other supplies or services may be estab-
lished either separately, in the aggregate, or in any combination thereof, as the parties may agree. (This para-
graph (n) may be deleted where inapplicable.)
(AFPI ?7.- CF,
(65 f 5
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MCP 71-603, Mar 60 (Contd)
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Progress payments shall be made to the Contractor as work progresses, from time to time upon request, in
amounts approved by the Contracting Officer upon the following terms and conditions:
(a) Computation of Amounts. (1) Unless a smaller a in o u n t is requested, each progress payment shall
be (i) ......A* percent of the amount of the Contractor's total costs incurred under this contract plus (ii) the amount
of progress payments to subcontractors as provided its (j) below; all less the sum of previous progress payments.
(2) The Contractor's total costs ((a) (1) (i)) shall be reasonable, allocable to this contract, and consistent
with sound and generally accepted accounting principles and practices. However, such costs shall not include (1) any
costs incurred by subcontractors or suppliers, or (ii) any payments or amounts payable to subcontractors or suppliers,
except for completed work (including partial deliveries) to which the Contractor has acquired title a n d except
for amounts paid or payable under cost-reimbursement or time and material subcontracts for work to which the
Contractor has acquired title, or (iii) costs ordinarily capitalized and subject to depreciation or amortization
except for the property depreciated or amortized portion of such costs.
(") The a,noutit of a ai?.quid ated progress payments shall not exceed the lesser of (i) ......B* percent of the
ost.. motioned in (a) (1) (i), above, plus any unliquidated progress payments mentioned in item (a) (1) (ii) above,
both of which are applicable: only to the supplies and services not yet delivered and invoiced to and accepted by
ate Coven roent, or (ii) .._C" percent of the total contract price of supplies and services not yet delivered and
l o e;c c nend a .cepte by the G;vacrimeaxt, less unliquidated advance payments.
ra:, i?.zcyr?av>i_ o t.-Ile unliquidated progress payments exceed the amount permitted
or a'ir!s pay the amount of such excess to the Government upon demand.
a ~5P?9 ~. 1 a-'A~.r ..t
; ' A .+ r1-4s` aiSleri iv. clause entitled "Termination For Convenience of the Government,"
r e c ya,y re at s ton! . r. `: uuid~ u l mforrinnice. With the consent of the
Contracting Officer and on terns approved by him, the Contractor in a y acquire or dispose of property to which
t,;tle is vested in the Government pursuant to this clause, and in that event, the costs allocable to the property
no transferred from this contract shall be eliminated from the costs of contract perLor?rnance and the Contractor
shalll repay to the Government (by cash or credit memorandum) an amount equal to the unliquidated progress
payments allocable to the property so transferred. 1,Tpon completion of performance of all the obligations of the
Contractor under this contract, including liquidation of all progress payments hereunder, title to all property (or
the proceeds thereof) which had not been delivered to, and accepted by the Government under this contract or
which had not been incorporated in supplies delivered to and accepted by the Government under this contract and
to which title has vested in the Government under this clause shall vest in the Contractor. The provisions of this
contract referring to or defining liability for Government-furnished ?roperty shall not apply to property to which
the Government shall have acquired title solely by virtue of the provisions of this CIaarse.
(e) Risk of Loss. Except to the extent that the Government .dull have otherwise expressly assumed the risk
of loss of property, title to which vests in the Government pursuant to this clause, in the event of the loss, theft
or destruction of or damage to any such property before its delivery to and acceptance by the Government, the
Contractor shall bear the risk of loss and shall repay the Government an amount equal to the unliquidated progress
payments based on costs allocable to such lost, stolen, destroyed or damaged property.
MCP 71--51?",t",rrnt'd)
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(f) Control of Costs and Property. The Contractor shall maintain an accounting system and controls adequate
for the proper administration of this clause.
(g) Reports-Access to Records. Insofar as pertinent to the administration of this clause, the Contractor will
(i) furnish promptly such relevant reports, certificates, financial statements, a n d other information as may be
reasonably requested by the Contracting Officer, and (ii) give the Government reasonable opportunity to examine
and verify his books, records and accounts.
(h) Special Provisions Regarding Default. If this contract is terminated pursuant to t h e clause entitled
"Default," (i) the Contractor shall, upon demand, pay to the Government the amount of unliquidated progress
payments and (ii) with respect to all property as to which the Government elects not to require delivery under
the clause entitled "Default," title shall vest in the Contractor upon full liquidation of progress payments, and
the Government shall be liable for no payment except as provided by the "Default" clause.
(i) Reservations of Rights. The rights and remedies of the Government provided in this clause shall not be
exclusive, and are in addition to any other rights and remedies provided by law or under this contract. No pay-
ment, or vesting of title pursuant to this clause, shall excuse the Contractor from performance of his obligations
under this contract, nor constitute a waiver of any of the rights and remedies of the parties under this contract.
No delay or failure of the Government in exercising any right, power or privilege under this clause shall affect
any such right, power or privilege, nor shall any single or partial exercise thereof preclude or impair any further
exercise thereof or the exercise of any other right, power or privilege of the Government.
(j) Progress Payments to Subcontractors. (1) The amount mentioned in item (a) (1) (ii) 'above shall be the sum
of (i) all the progress payments made by the Contractor to his subcontractors and remaining unliquidated, and
(ii) unpaid billings for progress payments to subcontractors which have been approved for current payment in the
ordinary course of business, when under subcontracts which conform to (2) below.
(2) Subcontracts on which progress payments to subcontractors may be included in the base for progress
payments pursuant to paragraph (a) of this clause are limited to those subcontracts in which there is expected to
be a long "lead time," approximating six months or more between the beginning of work and the first delivery, con-
taining subcontract progress payment provisions which (i) are substantially similar to and as favorable to the
Government as this "Progress Payments" clause, no more favorable to the subcontractor than this clause is to the
Contractor and on a basis of not more than 70 percent of total costs or 85 percent of direct labor and material
costs (except that these percentages may be 75 percent of total costs or 90 percent of direct labor and material
costs for those subcontractors which are small business concerns), and (ii) make all rights of the subcontractor
with respect to all property to which the Government has title under the subcontract subordinate to the rights of
the Government to require delivery of such property to it in the event of default by the Contractor under this
contract or in the event of the bankruptcy or insolvency of the subcontractor.
(3) The Government agrees that any proceeds received by it from property to which it has acquired title
by virtue of such provisions in any subcontract shall be applied to reduce the amount of unliquidated progress pay-
ments made by the Government '~o the Contractor under this contract. In the event the Contractor fully liquidates
such progress payments made by the Government to him hereunder and there are progress payments to any sub-
contractors which are unliquidated, the Contractor shall be subrogated to all the Government's rights by virtue of
such provisions in the subcontract or subcontracts. involved as if all such rights had been thereupon assigned and
transferred to the Contractor.
(4) The billings described in (j) (1) (11) above shall be paid promptly by the Contractor in the ordinary course
of business, not later than a reasonable time after payment of equivalent amounts by the Government to the
Contractor.
(5) To facilitate small business participation in subcontracting under this contract, the Contractor agrees
to provide progress payments to those subcontractors which are small business concerns, in conformity with t h e
standards for customary progress payments stated in paragraph 503 of Appendix E of the Armed Services Procure-
ment Regulation, as in effect on the date of this contract. The Contractor further agrees that the need for such
progress payments will not be considered as a handicap or adverse factor in the award of subcontracts.
? Percentages for A; B, C, D and E above are specified in the Schedule hereof.
(IASP'F Acpo
i:'._''_ / ?.) C:
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(k) If made part of a letter contract, this clause shall be deemed to be
modified and supplemented as follows:
(1) By changing paragraph (a)(4) to read: "(J4) The aggregate
amount of progress payments made shall not exceed $ (Specified elsewhere
herein)."
(2) By making the following provisions applicable in lieu of
paragraph (b) above until unit delivery billing prices are specified:
"Pro tress payments made hereunder shall be liquidated in the
following manner, unless previously liquidated pursuant to paragraph (b):
a. If this letter-contract shall be superseded by a fixed-
price type contract, unliquidated progress payments made hereunder shall
liquidated by deducting the amount thereof from the first progress
or other payments, which shall be made under such contract.
b. If this letter contract shall be superseded by a cost-
reimbursement type contract, progress payments made hereunder shall be
liquidated by dedu sting the unliquidated amount thereof from the first
payments which shall be made under such cost-reimbursement contract.
c. If this letter contract shall not be superseded by a
contract calling for the furnishing of all or part of the articles
or services covered hereby, unliquidated progress payments made
hereunder shall be liquidated-.by deducting the amount thereof from
the amount payable under the provisions of the Termination clause
for this letter contract.
d. If this letter contract shall in part be terminated and shall
in part be superseded by a contract, the unliquidated progress payments made
hereunder shall. be allocated by the Government for the purpose of liquidation
to the terminated portion of the letter contract and to the superseding con-
tract in such proportions as the Government shall deem to be equitable, and
the part of such progress payments allocated to each shall be liquidated in
accordance with the applicable provisions of subdivisions a,b, and c of this
paragraph.
e. If the method of liquidating progress payments provided
above shall not result in the full liquidation thereof, the Contractor
shall. forthwith pay the unliquidated balance to the Government upon demand."
(1) The following provision is applicable only when this clause is made
part. of a definitive contract which supersedes a letter contract containing said
clause:
"The costs, previous progress payments, aggregate progress payments and
unliquidated progress payments,, mentioned in paragraph (a) of this
progress payments clause,. include the costs incurred and progress payments
made under the letter contract which has been superseded by this contract."
(,SF'R Appendix E 515)(60 Ed.)
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B-15 PAYMENT FOR OVERTIME AND SHIFT PREMIUMS (FEB. 1962)
The contract price shall not include any amount on account of overtime
premiums or shift premiums, except to the extent that they either (i) are
approved in writing on behalf of the Government or (ii) are paid for work --
(A) necessary to cope with emergencies such as those resulting from
accidents, natural disasters, breakdowns of production equipment,
or occasional production bottlenecks of a sporadic nature;
(B) by indirect labor employees such as those performing duties in
connection with administration, protection, transportation,.
maintenance, standby plant protection, operation of utilities,
or accounting;
(C) in the performance of tests, industrial processes, laboratory
procedures, loading or unloading of transportation media, and
operations in flight or afloat, which are continuous in nature
and cannot reasonably be interrupted or otherwise completed; or
(D) which will result in lower overall cost to the Government.
(ASPR 12-102.3 (60 Ed.) revised 15 Feb. 1962 (Rev. No. 7) and shall be used
only in accordance with the requirements thereof.)
B?16 SOVIET-CONTROLLED AREAS UMUX33MU
APR,. 1??62)
(a) The Contractor shall not acquire for use in the performance of,
this contract any supplies or services originating from sources within
Soviet-controlled areas, as listed in the Schedule of this contract, or transported
from=' long Kong or Macao, without the written approval of the Contracting
Officer.
(b) ,The Contractor agrees to insert the provisions of this clause,
including the Soviet-controlled areas listed in the Schedule xntathft
h (: in all subcontracts hereunder*
~T
pT"t ad 115 a Apr-, : ,Rev. No. ~)
7)
(ASPR 7-103.15 (6-403) (60 EI.).a'and shalbe used only in accordance with
the
"or through
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It is contemplated by the part=.as hereto that the Government will bail (in
addition to arW property listed In this contract as to be "furnished" by the
Government) to the Contractor the, items listed elsewhere herein for use in
connection with the performance of this contract, and that an appropriate written
agreement of bailment will be entered into by and between the parties hereto
for that purpose* In the event of delay or failure of the Government to bail
such property, as aforesaid, the provisions of the clause of this. contract
entitled "Government-Furnished Property" or "Government Property" (whichever
is applicable) relating to failure or delay in the furnishing of property,
shall be applicable.
(,0PI 13o-550 (a))
It is anticipated that the Government may bail, to the Contractor such
(-ovei.nnt property of the categories specified elsewhere herein as may from
time to tires be deemed by the Contracting Officer to be necessary in the
interest of the Goverment to so furnish, provided, however, the effect of
such bailment upon the contract price or fixed fee {whichever is applicable)
shall be reflected by adjusting the contract price or fixed fee (whichever is
applicable) in accordance with the procedures set forth in the Changes
clause of this contract, and the contract amended accordingly by supplemental
agreement prior to the payment of Contractor's final invoice under this
contract, property bailed pursuant to this paragraph shall be made
available to the Contractor only under the provisions of a separate bailment
agreement or agreements and this contract shall not be construed as effecting
or committing the Government to the bailment of such property.
WPi l3?550 (b))
BAILMENT (For Use in Letter Contracts Only)
It is anticipated that the Government may bail to the Contractor such
items of Government property specified elsewhere herein as may from time to
time be deemed by the Contracting Officer to be necessary in the interest of
the Government to so furnish, provided, however, the effect of such bailment
shal.l be considered in any adjustments in amounts finally payable to the
Contractor at.the time of settlement of Contractor's terminat ion claim or
taken into account at the time of execution of the definitive contract
contemplated hereby. Any property bailed pursuant to this paragraph shall
be made available to the Contractor only under the provisions of a separate
bailment agreement or agreements and this contract shall not be construed
as effecting or committing. the Government to the bailment of such property.
(AFPI 13550 (a))
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B. 20 ADIUNITION AND EXPLOSIVE MATERIAL SAFETY (APR. 1960)
The Contractor shall comply with the applicable portions. of Air Force
Technical Orders 11C-1-6, 11A-1-40, 11A-1-40C, 4281-l-6 and AF Regulation 86-6,
in effect on the date of this contract, in addition to local, State and Federal
ordinances, laws and codes in the manufacture, handling, storage, packaging,
transportation or use which may affect the performance of this contract of
Government or Contractor owned ammunition or explosive material. The Contractor
shall also comply with any additional safety measures required by the Contracting
Officer with regard to such ammunition or explosive material; provided, that if
compliance with such additional safety measures results in a material increase
in the cost or time of performance of the contract, an equitable adjustment will
be made in accordance with the clause hereof entitled "Changes".
(AFPI 7-4048 (60 Ed.) and is authorized for use in accordance with the instructions
therein)
B?21 CHANGES TO MAKE OR BUY PROGRAM (JUL. 1960)
The Contractor agrees to perform this contract in accordance with the "make
or buy" program attached to this contract except as hereinafter provided. If
the Contractor desires to change the "make or buy" program, he shall notify the
Contracting Officer in writing of the proposed change reasonably in advance and
shall submit justification in sufficient detail to permit evaluation of the
proposed change. Changes in the place of performance of work on any "make"
item in the "make or buy" program are subject to this requirement. With respect
to items deferred at the time of negotiation of this contract for later additions
to the "make or buy" program, the Contractor shall notify the Contracting Officer
of each proposed addition at the earliest possible time, together with justifica-
tion in sufficient detail to permit evaluation. The Contractor shall not,
without the written consent of the Contracting Officer, make changes or additions
to the program; provided9 that in his discretion, the Contracting Officer may
ratify in writing any changes or additions and such ratification shall constitute
the consent of the Contracting Officer required by this clause. The "make or buy"
program attached to this contract shall be deemed to be modified in accordance
with the written consent or ratification by the Contracting Officer.
(ASPR 3-902.1 (60 Ed.) Revised 22 July 1960 (Rev. No. 1) and is authorized for use
in accordance with the instructions therein.
B.2'2 SAFETY AND ACCIDENT PREVENTION (JUN. 1959)
In performing any work under this contract on premises which are under the
direct control of the Government, the Contractor shall (i) conform to all safety
rules and requirements prescribed in Air Force Manual 32-3, as in effect on the
date of this contract and (ii) take such additional precautions as the Contracting
Officer may reasonably require for safety and accident prevention purposes. The
Contractor agrees to take all reasonable steps and precautions to prevent accidents
and preserve the life and health of Contractor and Government personnel performing
or in any way coming in contact with the performance of this contract on such
premises. Any violation of such rules and requirements, unless promptly corrected,
as directed by the Contracting Officer, shall be grounds for termination of this
contract in accordance with the default provisions hereof.
(AFPI 7-4047 (60 Ed.) and is authorized for use in accordance with the instructions
therein)
CR & FP
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(a) Contractor shall advise the Contracting Officer in writing, or
such office as the Contracting Officer may designate, prior to the delivery
of any item or completion of any service called for under this contract if
such item or any item upon which service is performed contains radioactive
material which requires specific licensing under the Atomic Energy Act
of 1954 ~, as set forth as of the date of this contract in the Code of Federal
Regulations, Title 10, Parts 30, 40 and 70. Such notice shall specify the
part or parts of the items which contain radioactive materials, a description
of such materials, the name and strength of the isotope, the manufacturer
of the radioactive materials, and any other information known to the Contractor
which will put users of the items on notice of the hazards involved in their
U IPSO (30B NO. 3 :8027.3) Such notification shall be made to the Contracting
C i,aeo:r with suft; Jsnt lead time in order that the Air Force may complete
i.a.cens. hg requi..-em.ants, p*tox to delivery and at such time that delivery
dates will not be affected.
('b) Au-1 items, parts, or subassemblies which contain radioactive
materials, and all containers in which such items, parts, or subassemblies
are delivered to the Government, shall be clearly marked and labeled as
required by Military peoification MILS-195908.
( P: 7-4053 (60 Pd.) revised 24 July 1961 (APPI Rev. No. 8) and is authorised
for use in accordance with the instructions therein).
PREPARATION IF DPGEROUS MATERIALS FOR SHIPMWT (NOV. 1960)
It shipment of dangerous material, as defined in AFM 71-4, "Packaging
and Handling of Dangerous Materials for Transportation by Military Aircraft,"
is to be made by militae:; air or to an aerial port of embarkation, the
Contractor shall label, mark and prepare the material for shipment in
accordance with the provisions of AFM 71-4. The Contractor shall comply
with the requirement for shipper's certification set forth in paragraph 4,
Chapter I of referenced manual. The provisions of this clause shall be
itded in any subcontract under which dangerous materials may be supplied.
(AFPI 7-4062 (60 Ed.) issued 1.7 January 1961 (AFPI Rev. No. 2) and is
authorized for use in accordance with the instructions therein).
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DESCRIPTIVE IDENTIFICATION DATA-TO BE FURNISH7) BY OOVERNME14T SUPPLIERS
13.25
1960)
(
Aug.
(End Itemsy
In item No(s) irith the Contractor sha nish identification data in accordance - 71S
(USAF) as in effect on the date of this contract. This service is included
as an item in the contract schedule. Such data shall be delivered to the
Government in accordance with the time cycle contained in the specification.
No deliveries shall be made on these items until the contract has been amended
to include the appropriate stock numbers. Any delay on the part of the
Government to adhere to the time cycle set forth in the specification shall
be considered an excusable delay within the meaning of the clause of
contract entitled "Default" or "Excusable Delays." Any such will automatically extend the delivery schedule by the time of the delay.
AFPI 7-4041(a) (60 Ed.)
B. 26 DESCRIPTIVE IDENTIFICATION DATA TO BE FURNISHED BY GOVERNMENT SUPPLIERS
(Spare Parts) (Aug. 1960)
The Contractor shall furnish identification data in accordance with
MIL-D-26715 (USAF) as in effect on the date of this contract for Spare Parts
to be selected and furnished under provisioning procedures as established by
item No.(s) * . The price for furnishing such data
shall be included in the price of said spare parts and shall be negotiated
at the time and in the manner provided in this contract for the price of spare
parts. Any delay on the part of the Government to adhere to the time cycle
set forth in the specification shall be considered in excusable delay within
the meaning of the clause of this contract entitled "Default" or "Excusable
Delays." Any such excusable delay will automatically extend the delivery
schedule by the time of the delay.
AFPI 7-4041(b) (60 Ed.)
*Specified elsewhere herein
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P-27 FEDERAL, STATE, AND LOCAL TAXES (JUL. 1960)
(a) Is used throughout this clause, the term "contract date" means the date of this contract. As to additional
supplies or services procured by modification to this contract, the term "contract date" means the date of such
modification.
i b) Except as may be otherwise provided in this contract, the contract price includes, to the extent allocable
to this contract, all Federal, State, and local taxes which, on the contract date:
(i) by Constitution, statute, or ordinance, are applicable to this contract, or to the transactions covered
by this contract, or to property or interests in property; or
(ii) pursuant to written ruling or regulation, the authority charged with administering any such tax is
assessing or applying to, and is not granting or honoring an exemption for, a Contractor under this kind of con-
tract, or the transactions covered by this contract, or property or interests in property,
(c) Except as may be otherwise provided in this 'ontract, duties in effect on. the contract date are included in
he contract price, to the extent. allocable to this contract.
d3 l) It the Contractor is -',(;aimed to pay or bear the burden-
c)i' any tax. of duty a tint either was cot to be included in the contract price pursuant to the require-
rneni of paragraphs (b) and (c), or of a tax or duty specifically excluded from the contract price by a provision
of this ?orttract, or?
? iii of an increase :r rate of any tax oA. duty, whether or not such tax or duty was excluded from the con-
tract price, or
tiii) of any interest or penalty on any tax or duty referred to in (i) or (ii) above; the contract price shall
tie increased b,y the amount of such tax, duty, interest, or penalty allocable to this contract; provided, that t h e
t.ontractor warrants in writing that no amount of such tax, duty, or rate increase was included in the contract
price as a contingency reserve or otherwise; and provided further, that liability for such tax, duty, rate increase,
interest, or penalty was not incurred through the fault or negligence of the Contractor or his failure to follow
instructions of the Contracting: Officer.
%} if the Contractor is not required to pay or bear the burden, or obtains a refund or drawback, in whole
r ?rt part, of any tax, duty, interest, or penalty which,
dil was to be included it, the contract price pursuant to the requirements of paragraphs (b) and (c);
ii } was included in the 'contract price: or
was the basis of an increase in the contract price; the contract price shall be decreased by the amount
of such relief, refund, or drawback allocable to this contract, or the allocable amount of such relief, refund, or
drawback shall be paid to the Government, as directed by the Contracting Officer The contract price also shall be
similarly- decreased if the Contractor, through his fault or negligence or his failure to follow instructions of the
Contracting Officer, is required to pay or bear the burden, or does not obtain a refund or drawback of any such tax,
duty, interest, or penalty, Interest paid or credited to the Contractor incident to a refund of taxes shall inure to
the benefit, of the Government to the extent that such interest was earned after the Contractor was paid or reim-
bursed by the Government for such taxes.
;8) invoices or vouchers covering any adjustment of the contract price pursuant to this paragraph (d) shall
set forth the amount thereof as a separate item and shall identify the particular tax or duty involved.
,,4, This paragraph dd} shall not be applicable to social security taxes; income and franchise taxes, other
than those levied on or measured by (i) sales or receipts from sales, or (ii) the Contractor's possession of, interest
in, or use of property, title to which is in the Government, excess profits taxes; capital stock taxes; unemployment
Ding r"Sa,tion taxes, or property taxes, other than such property taxes, allocable to this contract, as are assessed
either on ,"completed supplies covered by this contract, or on the Contractor's possession of, interest in, or use of
pro.per?ty.. title to which S;s in the c:Aovernment,
? h) Nat adjustment of less. than $100 is required to be made in the contract price pursuant to this paragraph
(ei Unless there does not exist any reasonable basis to sustain an exemption, the Government upon request
,it the "ontractur, without furthe r liability, agrees, except as otherwise provided in this contract, to furnish evi-
dence appropriate to establish exemption from any tax which the Contractor warrants in writing was excluded
from the. contract price. In addition, the Contracting Officer may furnish evidence appropriate to establish exemp-
tuzn 1a.orrc any tax that may, pursuant to this clause, give rise to either an increase or decrease in the contract
price. Except as otherwise provided in this contract, evidence appropriate to establish exemption from duties will
he furnished only at the discretion of the Contracting Officer.
(f1 (1) The Contractor shah promptly notify the Contracting Officer of all matters pertaining to Federal,
State, and local taxes, and duties. that reasonably may be expected to result. in either an. increase or decrease in
the contract price.
(2) Whenever an increase or decrease in the contract price may be required under this clause, the Contractor
hall takc action, as.. directed rc" the Contracting Officer, and the contract price shall be equitably adjusted to cover
the costs of such action, including any interest, penalty, and reasonable attorneys' fees.
ASPtt i1--4012
MCP 71-76, Jul 60
i 1. 5U, E' aC;p1..,e i. tl _ C a }: C._~ .: n, and except as,oth arse directed. by. the Contracting Officer,
he unfirtor. h -,,t' ,Work- arkfer t;hrs order on the dote and to the extent specified jr) the notice of Ter-
rnatt-iii t,p lzt~y, e ;ar fuifiuer ,tslr,cs cur -L[ibcuntractn for.'materrals,'services, or facilities except as may be neces-
,ary cur completion of such portion o:t tilt work under this order as is not terminated; (3) terminate all orders and
subc:>ntiact to . la e t k k;iia~ b yt,r~l4re ako ttw pertrormance of work terminated by the Notice of Termination;
1; assign t:ci tie Goviernmertt, iii the manlier, at the times, and to the extent directed by the Contracting Officer,
all of the right, title, and miter eat of the Coptrac):or under the orders or-subcontracts so terminated; (5) settlmmllh?nn t,
outstanttrre liabilrtie,, and-_"117 cartii ,,?d sing_out of such termination of orders and subcontracts with the appspyal
t rrat i:'i4e io .,the t, ontr nil do not other wise rr,h.bit the allowance of profit on any items thereunder, and provided that such
,unt oor amounts, e4 alive of settlement costs, shall not exceed the total contract price as reduced by
u t of oaymen s otherwise made and as further reduced by the contract price of work not terminated.
b {-.x?=GZ W agree LLJJUI cue wnole amount to ice paid to the Contractor by
talina,i, of work pursuant to this clause
shall be deemed to limit restrict
th
i
,
or o
erw
se
,, affhect the amo nt? or? amounts which may be agreed upon. to be paid to. the' Contractor pursuant
(d
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50315
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ou se,menc + f Parts s>t xuaterialb ; the title of this cause is changed to read Government' Property,
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