NEGOTIATED CONTRACT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP66B00728R000400060041-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 81
• Document Creation Date: December 12, 2016
• Document Release Date: February 28, 2002
• Sequence Number: 41
• Publication Date: October 22, 1964
• Content Type: CONT

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25X1A
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 New York 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 therein.
The rights and obligations of the parties to this contract shall be subject to
and governed by the attached Schedule and the General Provisions. In the event
of any inconsistency between the Schedule and the General Provisions, the
Schedule shall control.
DE-058-64
Cy / of 5
Contract No. UT-846
IN WITNESS WHEREOF, the parties hereto have executed this contract as of
ac TbA CY 11 , 1964.
25X1A Signatures:
THE UNITED STATES OF AMERICA 25X1 A
25X1A
BY
BYJ
Contracting Officer
TITLE
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Contract No. UT-846
CERTIFICATE
I, , certify
that I am the of the Corporation
named as Contractor herein; that
who signed that contract on behalf of the Contractor was then
of said Corporation; that said contract
was duly signed for and in behalf of said Corporation by authority of
its governing body, and is within the scope of its Corporate powers.
(Corporate seal)
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INDEX TO SCHEDULE
Page
PART I - SCOPE OF WORK . . . . . . . . . . . . . . . . . . . . . . 4
PART II - DELIVERY . . . . . . . . . . . . . . . . . . . . . . . . . 4
PART III - ESTIMATED COST AND FIXED FEE . . . . . . . . . . . . . . . 4
PART IV - PERIOD OF PERFORMANCE . . . . . . . . . . . . . . . . . . 4
PART V - PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 5
PART VI - SPECIAL SECURITY RESTRICTIONS . . . . . . . . . . . . . . 5
PART VII - WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS. . . . . . . 6
PART VIII - GOVERNMENT-FURNISHED FACILITIES AND EQUIPMENT . . . . . . 6
PART IX - GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . 6
PART X - REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . 6
PART XI - PROVISIONS FOR EXECUTION . . . . . . . . . . . . . . . . . 7
-3
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SCHEDULE
25X1A
PART I - SCOPE OF WORK
Contractor shall furnish the necessary services, facilities materials
and supplies to accomplish the design and development of 25X1A
I in accordance with Work Statement TMP 41026 with such revisions
thereto as the parties may mutually agree upon. Work Statement TNP 41026,
as revised, is attached hereto as Exhibit A of the Schedule.
PART II - DELIVERY
The Contractor shall accomplish the work specified above and make delivery
of the equipment FOB Palo Alto, California, in accordance with Section 8 of
the Work Statement. It is understood by the parties hereto that the completion
date of 10 March 1965 for the complete system is of the utmost importance to
the Government and necessary to meet urgent requirements of the Government,
it is accordingly agreed that delivery on or before 10 March 1965 is the
essence of this contract.
PART III - ESTIMATED COST AND FIXED FEE
a. The total estimated cost for the performance of this contract is
exclusive of fixed fee.
b. The fixed fee for the performance of this contract is
There has been allotted for the performance of this contract the
sum of This is the maximum amount for which the Government
shall be liable if this contract is terminated, and any expenditure or
obligation by the Contractor in excess of this amount in furtherance of
performance hereunder, shall be at the Contractor's own risk.
PART IV - PERIOD OF PERFORMANCE
a. The effective date of this contract is 10 August 1964. This contract
shall be completed on or before 10 March 1965.
b. All costs which have been incurred by the Contractor on or after
10 August 1964, in anticipation of and prior to the signing of this contract,
and which, if incurred after the signing of this contract, would have been
considered as items of allowable costs hereunder, will be accepted by the
Contracting Officer as costs under this contract.
25X1A
25X1A
25X1A
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c. This is the Definitive Contract contemplated by the Notice to Proceed
No. UT-846 dated 17 August 1964, as amended. This Definitive Contract supersedes
said Notice to Proceed in its entirety. Work performed and payments made under
said Notice to Proceed shall be deemed to be work performed and payments made
under this Definitive Contract. In the event of conflict between this Definitive
Contract and said Notice to Proceed, this Definitive Contract shall govern.
PART V - PAYMENTS
a. In accordance with the provisions of Clause 4 of the General Provisions
of this contract entitled, "ALLOWABLE COST, FIXED FEE, AND PAYMENTS," the
Government shall pay the Contractor, as full compensation for the performance
of this contract, the fixed fee as specified in Part III above and the allowable
cost incurred by the Contractor in the performance of this contract, and
accepted by the Contracting Officer as chargeable in accordance with "Contract
Cost Principles, Section XV, Part 2, Armed Services Procurement Regulations,"
such determination being subject to the provisions of this contract entitled,
"DISPUTES".
b. For purposes of billing current costs incurred under this contract
or until such time as an audit of Contractorts interim or final vouchers is
made by the Contracting Officer or his authorized representative, the Contractor
shall, for purposes of computing costs, use those rates which are currently
approved by the cognizant military department for billing purposes under
CPFF contracts.
c. Contractor shall be paid the fixed fee stated in Part III hereof
in monthly installments based on allowable costs incurred by the Contractor
and approved by the Contracting Officer computed at the same ratio that the
total fixed fee stated herein is to the total estimated cost stated herein,
subject, however to the withholding provisions of paragraph (c) of Clause
4 of the General Provisions hereof.
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.
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PART VII - 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 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 shall (i) modify or
rescind such security requirements 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 com-
pliance 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 VIII - GOVERNMENT-FURNISHED FACILITIES AND EQUIPMENT
The Contractor is authorized to use on a no-charge-for-use basis
such facilities as furnished or as may be furnished by the Government
to the Contractor, provided the use of such facilities does not interfere
with the work for which such facilities were orginally furnished.
PART IX - GENERAL PROVISIONS
The General Provisions of this contract are those contained in Contractor's
Basic Agreement Number ^ 33 (657) 5176 with said
Basic Agreement being incorporated herein by reference with the following
exceptions:
a. Clause A.27 is deleted in its entirety.
b. The following Clauses on of Section B of said Basic Agreement
are made part of this contract.
B.l, B.7, B.16, B.20 and B.29
PART X - REPORTS
The Contractor will submit each month a report of the technical progress
of the work. In addition the Contractor will provide monthly reports of
expenditures and commitments of funds under the contract.
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PART XI - PROVISIONS FOR EXECUTION
The Contractor's acceptance of this order will be indicated by affixing
its signature to the original and three copies thereof and returning the
original and two executed copies to the Contracting Officer. The remaining
copy shall be retained for your files. Such acceptance will constitute this
order a contract on the terms set forth herein.
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25X1A Basic Agreement No. 33(657)-5176
25X1A
BASIC AGREEMENT BETWEEN THE UNITED STATES AIR FORCE AND
is memo ndum e r ement made this 441 - a of June 19.6L-
which replaces ands super edGo Basic Agreemen J -5117, without retroactive effect
has for its purpose simplification and increased efficiency in the negotiation and
25X1 A execution of Contracts
between the United States Air Force and
a corporation incorporated under the laws of the State of RRV Ynrlr
The Terms and provisions of Sections A, B, D and E hereinafter not forth have
been agreed upon by the parties hereto. The clauses set forth in Section A are
mandatory clauses. The clauses set forth in Section B, and provisions of Section
D and E are for mutual selection as applicable to each contract. Contracts executed
after the date hereof and prior to the termination hereof shall refer to all clauses
and provisions of this agreement applicable to the contract and by such reference
incorporate the same. Such contracts shall consist of the incorporated clauses and'
provisions, and crap additional clauses and provisions which may be pacifically set
forth in such contracts.
This agreement may be terminated in its entirety by either party upon thirty (30)
days notice in writing to the other party. This agreement may be terminated by the
Government at any time if the parties fail to agree upon aR'r deletion, modification or
addition to this agreement which is required by statute, executive order, or the Armed
Services Procurement Regulation. No deletion, modification or addition to, or termination
of, this agreement shall affect any contracts theretofore entered into between the
parties in v oh his agreement has been corporated by reference: except to the extent
ro dad in t ijause as
r f e tit ed ME o Overlie Rates" and supplemental
gree
Thirs nsaes ab s raes thien
green 11
s'iill te review' as a a uua on the anniversary of its
effective date and revised to conform with all requirements of the Armed Services
Procurement Regulation-and any additional provisions, including applicable provisions
of the Air Force Procurement Instruction, as mutually agreed to by the parties. Such
revisions shall be evidenced by Supplemental Agreements hereto.
This agreement shall not be referred to by the Contractor in bids submitted in
response to advertised invitations nor become a part of any contract placed through
the process of formal advertisement.
IN WITNESS WHFAF, the parties hereto have executed this Agreement as of the da*
and year first above writtenr
25X1A
BY J
Typed Name
aA
25X1A
RAC_ TAI OFFICER
25X1A
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I N D E X
SECTION A
Page
Definitions
1
2
Changes
1
3
Limitation of Cost
1,2
4
Allowable Coat, Fixed Fee, and Payment
20
5
Inspection of Supplies and Correction of Defects
3,4,
6
Examination of Records
425
7
Subcontracts
5,6
8
Utilization of Small Business Concerns
6
9
Utilization of Concerns in Labor Surplus Areas
6
10
Termination
7,8,9
11
Excusable Delays
10
12
Disputes
10
13.
Buy American Act
10,11
14
Government Property
11,12,13
15
Insurance--Liability to Third Persons
14
16
Military Security Requirements
14;15
17
Authorization and Consent
15
18
Notice.and Assistance Regarding Patent and Copyright Infringement
16
19
Filing of Patent Applications
16
20
Convict labor
16
21
Walsh-Healey Public Contracts Act
16
22
Work Hours Act of 1962--Overtime Compensation
17
23
Payment for Overtime and Shift Premiums
17
24
Nondiscrimination in Employment
17,18
25
Notice to the Government of Labor Disputes
18
26
Priorities, Allocations, and Allotments
19
27
Renegotiation
19
28
Asesignment of Claims
19
29
Officials Not to Benefit
19
30
Covenant Against Contingent Fees
19
31
Gratuities
20
32
Shipments
20,21
93
Data--Withholding of Payment
21
34
Superseding Specifications
21
35
Quality Control System
21
36
Government Bill of Lading
22
37
Financial Management Report Deleted - See Clause B,14 on page 40
22
}8?
Limitation on Withholding of Payments
22
3Q
General Ser-vioels Administration Supply Sources
22
Interest
22
?
Competition in Subcontracting
?22
Audit and Records
23,24
43
Price Reduction for Defective Cost or Pricing Data
24
44 .
Subcontractor Cost and-Pricing Data.
24,25
45
Negotiated Overhead Rates
26
46
Refunds
27
47
Supplemental Provisions - Government Property
27
48
Additional Provisions Concerning Payme t of Allowable Costs
27 '
49
Allowable Costs
27
28
mom
?i
`Managerial Personnel
,
28,29
25X1A
B 33(657)-5176
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I N D & X
3BC?I B
Clause
B.1 Patent Rights License
B.2 Patent Rights (Lioense)(Spaoe
B,3
B-4 Authorization and Consent
B?5 Rzcess Profit
B.6 Excess Profit
B.7 Data
B.8 Data
B.9 Data
B.10 Bailment
B.11 Bailment
B.12 Bailment (For Use in Letter Contracts fitly)
B.13 Facilities
D.14 Financial Management Report
B.15 Flight Risks
B.16 Use of Government Facilities an a No-Charge Basis
B.17 Use of Government Facilities on a lo-Charge Basis
B.18 Modification of Paragraphs (d) of Clause B.16 and
Clause B.17
B.19 Changes to Make-or-Buy Program
B.20 Safety and Accident Prevention
B.21 Safety Precautions for Dangerous Materials
B.22 Notice of Radioactive Materials
B.23
B.24 Soviet-Controlled. Areas
B.25 Allowable Cost, Incentive Fee, and Payment
8.26
B.27
B.28
B.29
B.30
B.31
Modification of Clause A.6(a)(4)
Inspection
(o)
page
31,
33,34
35
35
35
36
37
38
39
39
39
40
40
41
42
43
44
45
45
46
46
Deleted 446
J?Dsleted
-Limitation of Government's Obligation
Modification of Clause entitled "Limitation of Government's
Obligation
8.32 Small Business Subcontracting Program
B?33 Labor Surplus Area Subcontracting Program
B?34 Material Inspection and Receiving Report
B.35 Furnishing of Pricing Information
B.36 Program Progress Reporting Requirements
B.37 Stop Work Order
8.38. Duty-Free 3itry--Canadian Supplies
B.39 Certificate of Conformance 59
B.40 Base Support 60
B.41 Security Requirements 60
B.42 Contract Number Identification on Data 60
B.43 Schedule Provision Relating to the Clause hereof entitled "Data" 60
B,44 Release of News Information 60
8.45 Release of Management Information 60
C J3(657)-5176
25X1A
47
48,49
50
50
51
51
52 x53
53
54,55
55
56
56
56
57
58
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INDEX.
SECTION B (CONTINUED)
Clause
B49
Accident Investigation
61
B,47
Frequency Authorization for Air Force Contraotore
61
B.48
New Material
61
B.49
Government Surplus
61
B.50
Value Engineering Incentive
62,63
B.51
Value Engineering Program Requirement
64,65
B.52
Provisions for Maintenance, Overhaul and Modification
O'ontraots 66
B.53
Restrictions On Printing
67
SECTION D
Provisions for Research and Development Contracts
69,70
SECTION E
Additional Provisions
71
25X1A
D Q33(657)-5176
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CH2FERAL P80FI8ICHB
COST PSMGKMSDMT
25X1A
Except as otherwise provided in applicable clauses of other leotions hereof the following olausss
shall be deemed to be incorporated in and farm a part of every contract placed tq-
I with the Contractor whenever such instrument or document states that th sic Agreement
applies.
1. i WIMICBS. (lob. 1962)
As used throughout this contract, the following terms shall have the
meanings not forth belays
(a) The term "head of the any
Assistant Swore ageuuay" or "BsCretary" means the Secretary, the Under 8ecrarZary, eml$7C
tern, or any other head or assistant head of the executive or silitay department or
other Federal agency; and t}us tore "his duly authorised representative" means any person or persons
or board (other than the Contracting Officer) authorised to mot for the head of the eonay or the
Secretary.
(b) The term "Contracting Officer" means the person executing this contract on behalf of the
oovernment, and any other officer or civilian esplcyee who is a properly designated Contracting Officer;
and the term includes, except as otherwise provided in this contract, the authorised representative
of a Contracting Officer acting within the limits of his authority.
'(o) lbzoept as otherwise provided in this contract, the term "suboontraots" includes purchase
orders under this contract.
(d) Thhee tteerrm~"this contract" whenever apppaearing herein, shall be deemed to mean the oontraotual
gct as provided
`4(a)(i)(hiA1 40 of i o)y Bo 20 ap, ,21aand/or 2ted 5(a)t'Tlil~p~ ep
n auses 9 9 45
(e) The term "the Schedule" wherever appearing herein, shall be deemed to mean the Schedule
appearing in the contractual instrument in which the terms of this Basic Agreement are incorporated
by reference.
(dspa 7-203.1 (63 Bd.) swept (d) and (e) added thereto)
2. CHARON (Jan. 1958)
The Contracting Officer may at any time, tar a written order, and without notice to the sureties,
if any, make changes, within the general scope of this contract, in any one or more of the followings
(i) drawings, designs, or specifications, whore the supplies to be furnished are to be specially
manufactured for the Goverment in accordance therewith; (ii) method of shipment or packing; (iii)
place of delivery; and (iv) the mount of Government-furnished property. If any such change causes
an increase or decrease in the estimated post of, or the time required for the performance of any part
of the work under this contract, whether changed or not changed by any such order, or otherwise affects
any other provision of this contract, an equitable adjustment, shall be made (i) in the estimated cost
or delivery schedule, or both, (ii) in the amount of any fixed fee to be paid to the Contractor, and
(iii) in such other provisions of the contract as may be so affected, and, the contract shall be modified
in writing accordingly. Any Claim by the Contractor for adjustment under this clause mot be asserted
within sixty (60) days from the date of receipt 1 the Contractor of the notification of ohangs; provided,
however, that the Contracting Officer, if he decides that the facts justify such action, may receive
and act upon any such claim asserted at any time prior to final payment under this oontraot. Failure
to agree to any adjustment shall be a dispute concerning a question of fact within the meaning of the
clause of this contract entitled "Disputes" However, nothing in this clause shall excuse the Contractor
from proceeding with the contract as changed.
(ABPH 7-203.2 (63 id.) except the word and figures "thirty (30)" changed to "sixty (60)")
3. LB[ITATION OF COST (Oct. 1953)
(a) It is estimated that the total cosy to the Government, exclusive of any fixed fee, for the
performance of this contract will not exceed the estimated cost set forth in the Schedule, and the
Contractor agrees to use his best efforts to perform the work specified in the Schedule and all
obligations under this contract within such estimated costa If"...at any time the Contractor has
reason to bolieve that the costs which he expects to incur. in the performance of this contract in
OR 3d -1-
l4ir 63
^33 (657)-5176
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the next succeeding thirty (30) days, when added to all costa previously incurred, will exceed eighty-
fin percent (85%) of the estimated cost then not forth in the Schedule, or if at any time, the
Contractor has reason to believe that the total cost to the.0overnment, exclusive of any fixed fee,
for the performance of this contract will be substantially greater or less than the than estimated
cost thereof, the Contractor shall notify, the Contracting Officer in writing to Vast effect, giving
his revised estimate of such total cost for the performance of this contract.
(b) The Coveroment shall not be obligated to reimburse the Contractor for costa incurred in
excess of the estimated oat not forth in the Schedule, and the Contractor 441 not be obligated
to continue performance under the contract or to incur costs in excess of the estimated cost set
forth in the Schedule, unless and until the Ccntraottag Officer shall have notitied the Oont1ebtor
in writing that such estimated cost has been inorewid and shall have specified in such notice a
revised estimated cost which shall thereupon constitute the estimated cost of performance of this
contract. When and to the extent that the estimated cost as* forth in the Schedule has been increased,
any costa incurred by the Contractor in excess of such estimated cost prior to the inoreass in
estimated cast shall be allowable to the some extent as if such costs had been inau;swd after such
inorease in estimated cost.
(AMPS 7-203.3) (63 si.)
4. AlL ABLE COST, FD(>Q} FIX, AND PAM=? (Sep. 1962)
(a) For the performance of this contract, the Oovernment shall pay to the Contractor --
(i) the cost thereof (hereinafter referred to as "allowable cost") determined by the
Contracting Officer to be allowable in accordance with
(A) Part 2 o Section XV of the Armed Services Procurement Regulation as in effect
an the date of this ocntraot and
(B) the terms of this oontraotl and
(ii) such fixed fee, if say, as say be provided for in the Schedule.
(b) Onos each month (or at more frequent intervals, if approved by the Contracting Officer),
the Contractor say submit to an authorised representative of the Contracting Officer, in such form
and reasonable detail as such representative may require, an invoice or public voucher supported by
a statement of cost incurred by the Contractor in the performance of this contract and claimed to
constitute allowable cost.
(o) Promptly after receipt of each invoice or voucher tad statement of cost, the Government shall,
except as otherwise provided in this contract, subject to the provisions of (d) below, make payment
thereon as approved by the Contracting Offioer. Pay ent of the fixed fee, if any, shall be made to
the Contractor as specified. in the Schedulel provided, however, that after payment of eighty-five
percent (85%) of the fixed fee sat forth in the Schedule, further payment on account of the fixed
fee shall be withheld until a reserve of either fifteen percent (l of the total fixed fee, or
one hundred thousand dollars (4100,000), whichever is less, shall have been wet aside.
(d) At any time or tines prior to final payment ender this contract, the Contracting Officer
may have the invoices or vouchers sad statements of cast audited. Much payment theretofore made shall
be subject to reduction for savants included in the related invoice or voucher which are found by
the Contracting Officer, on the basis of such audit, not to constitute allowable oast. Any payment
may be reduced for overpayments, or increased for underpayments, on preceding invoices or vouchers.
(e) On receipt and approval of the invoice or voucher designated by the Contractor as the
"completion invoice" or "a letion voucher" and upon compliance by the Contractor with all the
provisions of this contract (including, without limitation, the provisions relating to patents and
the provisions of (f) below), the Government shall promptly pay to the Contractor s~ balance of
allowable cost, and any part of the fixed fee, which has been withheld pursuant to (o) above or
otherwise not paid to the Contractor. '.lbw completion invoice or voucher shall be submitted by-the
me event later than
Ooniraotor promptly following completion of the work under this contract tint is no
e (1) year (or such longer period as the Contracting Officer asp in his discretion approve in
writing) from the date of such completion.
CRr -2- ^33 (657)-5176
Ilan
*The, 63 tex "this oontrsot".- shaall be deemed to wean '"this Rio Agreement"
unless otherwise provided in the Sobedule.
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(f) The Contractor agrees that any refunds, rebates, credits, or other amounts (including any
interest thereon) accruing to or received by the Contractor or any assignee under this contract shall
be paid by the Contractor to the Government, to the extent that they are properly allocable to costs
for which the Contractor has been reimbursed by the Government under this contract. Reasonable expenses
incurred by the Contractor for the purpose of securing such refunds, rebates, credits, or other amounts
shall be allowable costs hereunder when approved by the Contracting Officer. Prior to final payment
under this contract, the Contractor and each assignee under this contract whose assignment is in effect
at the time of final payment under this contrast shell eseouts and deliver
(i) an assignment to the Government, in fora and substance satisfactory to the Contracting
Officer, of refunds, rebates, credits, or other amounts (including any interest thereon) properly
allocable to poets for which the Contractor has been reimbursed by the Government under this contract;
and
(ii) a release discharging the Government, its officers, agents, and emp],oyees from all
liabilities, obligations, and claims arising out of or under this contract, subject only to the
following exceptions---
(A) specified claims in stated amounts or in estimated amounts where the amounts are
not susceptible of exact statement by the Contractor;
(B) claims, together with reasonable expenses incidental thereto, based upon liabilities
of the Contractor to third parties arising out of the performance of this contract; provided, that
such claims are not known to the Contractor on the date of the execution of the release; and provided
further that the Contractor gives notice of ouch claims in writing to the Contracting Officer not more
than sit (6) years after the date of the release or the date of any notice to the Contractor that
the Government is prepared to make final payment, whichever is earlier; and
(C) Claims for reimbursement of coats (other than expenses of the Contractor by
reason of his indemnification of the Government against patent liability), including reasonable
expenses incidental thereto, incurred by the Contractor under the provisions of this contract
relating to patents.
(g) Any cost incurred by the Contractor under the terms of this contract which would constitute
allowable cost under the provisions of this clause shall be included in determining the amount payable
under this contract, notwithstanding any provisions contained in the specifications or other documents
d A-
inc
t
h
ora
e
--Y t
is contract by reference, designating services to be performed or materials to be
furnished by the contractor at his expense or without cost to the Government.
(ASIA 7-203.4(a) (63 Ed.))
5. INSPSOTICN C SUPPLIES AND CORRHCTI( OF DWMTS (May 1960)
(a) All supplies (which term throughout this clause includes without limitation raw materials,
component., intermediate assemblies, and and products) shall be subject to inspection and test by
the Government, to the extent practicable at all times and places including the period of manufacture,
and in any event prior to acceptance. The Contractor shall provide and maintain an inspection system
acceptable to the Government covering the supplies, fabricating methods, and special tooling hereunder.
The Government, through any authorized representative, may inspect the plant or plants of the Contractor
or of any of his subcontractors engaged in the performance of this contract. If any inspection or
test is made by the Government on the premises of the Contractor or a subcontractor, the Contractor
shall provide and shall require subcontractors to provide all re on
bl f 414
ae
ti
s
a so
es and assistance
for the safety and convenience of the Government inspectors in the performance of their duties. All
inspections and tests by the Government shall be performed in such a,manner as will not unduly delay
the work. Except as otherwise provided in this contract, acceptance of any supplies or lots of
supplies shall be made as prom t an practicable after delivery thereof and shall be deemed to have
been made no later than sixty (60) days after the date of such delivery, if acceptance has not been
made earlier within such period.
(b) At any time during performance of this contract, but not later than six (6) months (or such
other period as may be provided in the Schedule) after acceptance of the supplies or lots of supplies
last delivered in accordance with the requirements of this contract, the Government may require the
Contractor to remedy by correction or replacement, as directed by the Contracting Officer, any supplies
or, lots of supplies which at the time of delivery thereof are defective in material or workmanship or
otherwise not in conformity with the requirements of this contract. Except as otherwise provided in
paragraph (d) hereof; the cost of any such replacement or correction shall be included in Allowable
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Cost determined as provided in the olausa of this contract entitled "Allowable Cost, Fixed Fee and
Payment," but no additional fee shall be payable with respect thereto. Such supplies or lots of
supplies shall not be tendered thereafter for acceptance unless the former requirement of correction
is disclosed. If the Contractor fails to proceed with reasonable promptness to replace or correct
such supplies or lots of supplies the Government (i) ^ay by contract or otherwise replace or correct
such supplies and charge to the Contractor any increased coat occasioned the Government thereby, or
say reduce any fired fee payable under this contract (or require rent of any fixed fee theretofore
paid) in such ascent as say be equitable under the oiroumstanoea, or (ii) in the case of supplies dot
delivered, may require the delivery of such supplies, and shall have the right to reduce any fixed fee
payable under this contract (or to require repayment of any fixed fee theretofore paid) in each amount
as may be equitable under the circumstances, or (iii) say terminate this contract for default as
provided in the clause of this contract entitled "Termination." Fsilurc to agree to the amount of any
such increased cost to be charged to the Contractor or to such reduction in, or repayment of, the
fixed fee shall be a dispute concerning a question of fact within the meaning of the clause of this
contract entitled "Disputes."
(o) Notwithstanding the provisions of paragraph (b) hereof, the Government may at any time
require the correction or replacement by the Contractor, without cost to the Government, of supplies or
lots of supplies which are defective in material or woriosanahip, or otherwise not in conformity with
the requirements of this ooptraot, if such defects tfailures are due to fraud, lack of good faith
or willful misconduct on the part of any of the Contractor's directors or officers, or on the part of
any of his rs, superintendents, or other equivalent representatives, who has supervision or
direction ofall or substantially all of the Contractor's business, or (ii) all or substantially
all of the Contractor's operations at any one plant or separate location in which this contract is
being performed, or (iii) a separateand complete major industrial operation in connection with the
performance of this contract. The Government any at any time also require correction or replacement
by the Contractor, without cost to the Government, of any such defective supplies or lots of supplies
if the defects Or failures are caused by one or more individual employees selected or retained by
the Contractor after any such supervisory personnel has reasonable grounds to believe that any such
employee is habitually careless or otherwise unqualified.
(d) Corrected supplies or replaced supplies shall be subject to the provisions of this clause
in the same manner and to the same extent as supplies originally delivered under this contract.
(e) The Contractor shall make his records of all inspection work available to the Government
during the performance of this contract and for such longer period as any be specified in this contract.
(f) Nxoept as provided in this clause and as may be provided in the Schedule, the Contractor
shall have no obligation or liability to correct or replace supplies or lots of supplies which at
the time of delivery are defective in material or workmanship or otherwise not in conformity with
the requirements of this contract.
(g) Except as otherwise provided in the Schedule, the Contractor's obligation to correct or
replace Goverment-furnished property (which is property in the possession of or acquired directly
by the Government and delivered or otherwise made available to the Contractor) shall be governed
by the provisions of the clause of this contract entitled "Government Property."
(ASPR 7-203.5) (63 bid.)
6. BXi1QNA'rICS Gr RECORDS (Nov.. 1962)
(a) (1) The Contractor agrees to maintain books1 records., documents, and other evidence
pertaining to the costs and expenses of this contract (hereinafter collectively called the "records")
to the extent and in such detail as will properly reflect all net coats, direct and indirect, of
labor, materials, equipment, supplies and services, and other costa and expenses, of whatever nature
for which reimbursement is claimed under the provisions of this contract.
(2) The Contractor agrees to make available at the office of the Contractor at all
reasonable times during the period set forth in subparagraph (4) below any of the records for
inspection, audit or reproduction by any authorized representative of the Comptroller General.
(3) In the event the Comptroller General or any of his duly authorized representatives
determines that his audit of the amounts reimbursed under this contract as transportation charges
will be made at a place other than the office of the Contractor, the Contractor agrees to deliver,
with the reimbursement voucher covering such charges or as may be otherwise specified within two
years aftet reimbursement of charges covered by any such voucher, to such representative as may be
designated for that purpose through the Contracting Officer such documentary evidence in support of
transportation costs an may be required by the Comptroller General or any of his duly authorised
representatives.
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(4) Except for documentary evidence delivered to the Government pursuant to subparagraph (3)
above, the Contractor shall preserve and make available his records (i) for a period of three years
from the date of final payment under this contract, and (ii) for such longer period, if any, as is
required by applicable statute, by any other clause of this contract, or by (A) or (B) below.
(A) If this contract is completely or partially terminated, the records relating to
the work terminated shall be preserved and made available for a period of three years from the date
of any resulting final settlement.
(B) Records which relate to (i) appeals under the Disputes clause of this contract,
(ii) litigation or the settlement of claims arising out of the performance of this contract, or (iii)
cost and expenses of this contract as to which exception has been taken by the Comptroller General
or'any of his duly authorized representatives, shall be retained by the Contractor until such appeal's,
litigation, claims, or exceptions have been disposed of.
(5). Except for documentary evidence delivered pursuant to subparagraph (3) above, and the
records described in subparagraph (4)(B) above, the Contractor may in fulfillment of his obligation
to retain his records as required by this clause substitute photographs, microphotographs, or other
authentic reproductions of such records, after the expiration of two years following the last day
of the month of reimbursement to the Contractor of the invoice or voucher to which such records
relate, unless a shorter period is authorized by the Contracting Officer with the concurrence of the
Comptroller General or his duly authorized representative.
(6) The provisions of this paragraph (a), including this subparagraph (6), shall be
applicable to and included in each subcontract hereunder which is on a cost, cost-plus-a-fixed-fee,
time-and-material or labor-hour basis.
(b) The Contractor further agrees to include in each of his subcontracts hereunder, other than
those set forth in subparagraph (a) (6) above, a provision to the effect that the subcontractor agrees
that the Comptroller General or any of his duly authorized representatives, shall, until the expiration
of three years after final payment under the subcontract, have access to and the right to examine
any directly pertinent books, documents, papers, and records of such subcontractor, involving
transactions related to the subcontract. The term "subcontract," as used in this paragraph (b) only,
excludes (i) purchase orders not exceeding $2,500 and (ii) subcontracts or purchase orders for
public utility serviee6-at rates established for uniform applicability to the general public.
(ASPR 7-203.7) (63 Ed.)
7. SUBCONTRACTS (Nov. 1963)
(a) The Contractor shall give advance notification to the Contracting Officer of any proposed
subcontract hereunder which (i) is on a cost, cost-p-,.s-a-fee, time and material, or labor-hour
basis, or (ii) is on a fixed-price basis exceeding in dollar amount either $25,000 or five percent
(5%) of the total estimated cost of this contract.
(b) In the case of a proposed subcontract which (i) is on a cost, cost-plus-a-fee, time and
material, or labor-hour basis and which would involve an estimated amount in excess of $10,000,
including any fees or (ii) is proposed to exceed $100,000; or (iii) is one of a number of subcontracts
under this contract.with a single subcontractor for the same or related supplies or services which,
in the aggregate are expected to exceed $100,000; the advance notification required by (a) above
shall include.,
(1) a description of the supplies or services to be called for by the subcontract;
(2) identification of the proposed subcontractor and an explanation of why and how the _
proposed subcontractor was selected, including the degree of competition obtained;
0) the proposed subcontract price, together with the Contractor's cost or price analysis
thereof;
(4) the subcontractor's current, complete, and accurate cost or pricing data and
Certificate of Current Cost or Pricing Data when such data 'and certificate are required, by other
provisions, of this contract, to be obtained from the subcontractor; and
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(c) The Contractor shall not, without the prior written consent of the Contracting Officer,
place any subcontract which (i) is on a coat or cost-plus-a-fee basis, or (ii) is on a fixed-price
basis exceeding in dollar amount either $25,000 or five percent (5%) of the total estimated coat
of thie'contract, or (iii) provides for the fabrication, purchase, rental, installation or other
acquisition, of any item of industrial facilities, or of special tooling having a value in excess
of $1,000, or (iv) is on a time and material or labor-hour basis. The Contracting Officer may,
in his discretion, ratify in writing any such subcontract such action shall constitute the consent
of the Contracting Officer as required by this paragraph (c).
(d) The Contractor agrees that no subcontract placed under this contract shall provide for
payment on a oost-plus-a-percentage-of-cost basis.
(e) The Contracting Officer may, in his discretion, specifically approve in writing any of
the provisions of a subcontract. However, such approval or the consent of the Contracting Officer
obtained as required by this clause shall not be construed to constitute a determination of the
allowability of any coat under this contract, unless such approval specifically provides that
it constitutes a determination of the al owability of such cost.
(f) The Contractor shall give the Contracting Officer immediate notice in writing of any action
or suit filed, and prompt notice of any claim made against the Contractor by any subcontractor or
vendor which, in the opinion of the Contractor, may result in litigation, related in any way to
this contract with respect to which the Contractor may be entitled to reimbursement from the
Government.
(g) Notwithstanding (c) above, the Contractor mayenter into subcontracts within (ii), or, if
the subcontract is for special tooling, within (iii), of (c) above, without the prior written
consent of the Contracting Officer if the Contracting Officer has, in writing, approved the
Contractor's purchasing system and the subcontract is within the limitations of such approval.
(h) The Contractor shall (i) insert in each price redetermination or incentive price revision
subcontract hereunder the substance of the "Limitation on Payments" paragraph set forth in the
appropriate clause prescribed by paragraph 7-108 of the Armed Services Procurement Regulation,
including subparagraph (4) thereof, 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) thereof relating to tax credits, and (ii) include in each cost-reimbursement
type subcontract hereunder a requirement that each price redetermination and incentive price revision
subcontract thereunder will contain the substance of the "Limitation on Payments" provision, including
subparagraph (4) thereof, modified as outlined in (i) abcve.
(i) To facilitate small business participation in subcontracting under this contract, the Contractor
agrees to provide progress payments on the fixed-price types of subcontracts of those subcontractors
which are small business concerns, in conformity with the standards for customary progress payments
stated in paragraphs 503 and 514 of Appendix E of the Armed Services Procurement 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.
(ASPR 7-203.8 (63 Ed.) revised 15 November 1963 (Rev. No. 3))
B. UTILIZATION OF SMALL BUSINESS CONCERNS (Jan. 1958)
(a) It is the policy of the Government as declared by the Congress that a fair proportion of
the purchases and contracts for supplies and services for the Government be placed with small
business concerns.
(b) The Contractor agrees to accomplish the maximum amount of subcontracting to small business
concerns that the Contractor finds to be consistent with the efficient performance of this contract.
(ASPR 7-203.9 (63 Ed.))
9. UTILIZATION OF CONCERNS IN LABOR SURPLUS AREAS (Feb. 19(>2)--(The provisions of this clause
shall be applicable if this contract is in excess of $5,000.00) It is the pclt_cy of the Government
to place contracts with concerns which will perform such contracts substantially in areas of
persistent or substantial labor surplus where this can be done, consistent with the efficient
performance of the contract, at prices no higher than are obtainable elsewhere. The Contractor agrees
to-use his beet efforts to place his subcontracts in accordance with this policy. -In complying with
the foregoing and with paragraph (b) of the clause of this contract entitled "Utilization of Small
Business Concerns," the Contractor in placing his subcontracts shall observe the following order of
preference: (i) persistent labor surplus area cone-r"s which are also small business concerns; (ii)
other persistent labor surplus area concerns; (iii) substantial labor surplus area concerns which are
also small business concerns; (iv) other substantial labor surplus area concerns; and (v) small business
concerns which are not labor surplus area concerns.
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10. TEMlINATION (Jul. 1962) (a) The performance of work under the contract may be terminated'byr the
Government in aooordanoe with this clause in whole, or from time to time in parts
(i) whenever the Contractor shall default in performance of this contract in accordance with its,
terms (including in the term "default" any such failure by the Contractor to make progress in the
prosecution of the work hereunder as endangers such performance), and shall fail to ours such default
within a period of ten days (or such longer periods as the Contracting Officer may allow) after
receipt from the Contracting Officer of a notice specifying the default; or
(ii) whenever for any reason the Contracting Officer shall determine that such termination is
in the best interest of the Government.
Any such termination shall be effected by delivery to the Contractor of a Notice of Termination
specifying whether termination is for the default of the Contractor or for the convenience of the
Government, the extent to which performance of work under the contract is terminated, and the date
upon which such termination becomes effective. If, after notice of termination of this contract for
default under it) above, it is determined for any reason that the Contractor was not in default
pursuant to (i, or that the Contractor's failure to perform or to make progress in performance is
due to causes beyond the control and without the fault or negligence of the Contractor pursuant to
the provisions of the clause of this contract relating to excusable delays, the Notice of Termination
shall be deemed to have been issued under (ii) above, and the rights and obligations of the parties
hereto shall in such event be governed accordingly.
(b) After receipt of a Notice of Termination and except as otherwise directed by the Contracting
Officer, the Contractor shalli
(i) stop work under the contract on the date and to the extent specified in the Notioe of
Termination;
(ii) place no further orders or subcontracts for materials, services, or facilities, except
as may be necessary for completion of such portion of the work under the contract as is not terminated;
(iii) terminate all orders and suboontraots to the extent that they relate to the performance
of work terminated by the Notice of Termination;
(iv) assign to the Government, in the manner and to the extent directed by the Contracting
Officer, all of the right, title, and interest of the Contractor under the prders or subcontracts so
terminated, in which case the Government shall have the right, in its discretion, to settle or pay
any or all claims arising out of the termination of such orders and subcontracts;
(v) with the approval or ratification of the Contracting Officer, to tha.extent he may
require, which approval or ratification shall. be final and conclusive for all purposes of this clause,
settle all outstanding liabilities and all claims arising out of such termination Oforders and
subcontraots, the coat of which would be reimbursable in whole or in part, in accordance with the
provisions of this contract;
(vi) transfer title (to the extent that title has not already been tranefered) and in the
manner, to the extent, and at the times directed by the Contracting Officer, deliver to the Government
(A) the fabricated or unfabricated parts, work in process, completed work, supplies, and other
material produced as a part of or acquired in respect of the performance of, the work terminated
by the Notice of Termination, ID) the completed or partially completed plans, drawings, information,
and other property which, if the contract had been completed, would be required to be furnished to
the Government, and (C) the jigs, dies, and fixtures, and other special tools and tooling acquired
or manufactured for the performance of this contract for the cost of which the Contractor has been
or will be reimbursed under this contract;
(vii) use his best efforts to sell in the manner, at the times, to the extent, and at the
price or prices directed or authorized by the Contracting Officer, any property of the types
referred to in (vi) above; provided, however, that the Contractor (A) shall not be required to
extend credit to any purchaser, and (B) may acquire any such property under the conditions prescribed
by and at a price or prices approved by the Contracting Officer; and provided further that the
proceeds of any such transfer or disposition shall be applied in reduction of any payments to be
-made by the Government to the Contractor under this contract or shall otherwise be credited to the
price or post of the work oovered by this contract or paid in such other manner as the Contracting
Officer *Y direct;
(viii) complete performance of such part of the work as shall not have been terminated by
the Notice of Termination; and
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(ix) take such action as may be necessary, or as the Contracting Officer may direct, for
the protection and preservation of the prc+perty related to this contract which is in the possession
of Contractor in which the Government has or may acquire an interest.
,The Contractor shall proceed immediately with the performance of the above obligations notwithstanding
any delay indetermining or adjusting the amount of the fee, or any item of reimbursable cost, under
this clause. At any time after expiration of the plant olearanoe period, as defined in Section VIII,
Armed Services Procurement Regulation, as it may be mended from time to time, the Contractor may
submit to the Contracting Officer a list, certified as to quantity and quality, of any or all ites=e
of termination inventory not previously disposed of, exclusive of items the disposition of which
has been directed or authorised by the Contracting Officer, and may request the Government to remove
such items or enter into a storage agreement covering them. Not later than fifteen (15) days
thereafter, the Government will accept such items and remove them or enter into a storage agreement
covering the same; provided that the list submitted shall be subject to verification by the
Contracting Officer upon removal of the items , or if the items are stored, within forty-five (45)
days from the dateof subRiseicn of the list, and any necessary adjustment to correct the list as
submitted shall be made prior to final settlement.
(a) After receipt of a Notice of Termination, the Contractor shall submit to the Contracting
Officer his termination claim in the foam and with the oertifioation prescribed by the Contracting
Officer. Such olaia shall be submitted promptly but in no event later than one year from the
effective data of termination, unless one or more extensions in writing are granted by the Contracting
Officer, upon request of the Contractor made in writing within such one-year period or authorised
extension thereof. However, If the Contracting Offioer determines that the facts justify such
action, he may receive and act upon any such termination claim at any time after such one-year
period or any extension thereof. Upon failure of the Contractor to submit his termination claim
within the time allowed, the Contracting Officer may, subject to any Settlement Review Board approvals
required by Section VIII of the Armed Services Procurement Regulation in effect as of the date of
execution of thin contract, determine, on the basis of information available to his, the amount,
if any, due to the Contractor by reason of the termination and shall thereupon pay to the Contractor
the amount so determined.
(d) Subject to the provisions of paragraph (o), and subject to any Settlement Review Board
approvals required by Section VIII of the Armed Services Procurement Regulation in effect as of the
date of execution of this contract, the Contractor and the Contracting Officer ^ay agree upon the
whole or any part of the amount or ?ounte to be paid (including an allowance for the fee) to the
Contractor by reason of the total or partial termination of work pursuant to this clause. The contract
shall be emended a cordintigly, and the Contractor shall be paid the agreed amount.
(e) In the event of the failure of the Contractor and the Contracting Officer to agree in whole
or in part, as provided in paragraph (d), as to the amounts-with respect to costs and fee, or as to
the amount of the fee, to be paid to the Contractor in connection with the termination of work pursuant
to this clause, the Contracting Officer shall, subject to any Settlement Review Board approvals
required by Section VIII of the Armed Services Procurement Regulation in effect as of the date of
execution of this contract, determine, an the basis of information available to his, the amount, if
any, due to the Contractor by reason of the termination and shall pay to the Contractor the amount
determined as folioni
(i) if the settlement includes cost and fee
(A) there shall be included therein all costs and expenses reimbursable in aooordanoe
with this contract, not previously paid to the Contractor for the performance of this contract prior
to the effective date of the Notice of Termination, and such of these costa as may continue for a
reasonable time thereafter with the approval of or as directed by the Contracting Officer{ provided,
however, that the Contractor shall proceed es rapidly as practicable to discontinue such costal
(B) there shall be included therein so far as not included under (A) above, the cost
.of settling and paying claims arising out of the termination of work under subcontracts or orders,
as provided in paragraph (b) (v) above, which are properly chargeable to the termination portion of
the contract;
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(C) there shall be included therein the reasonable costs of settlement, including
accounting, legal, clerical, and other expenses reasonably necessary for the preparation of settlement
alaims'and supporting data with respect to the terminated portion of the contract and for the
termination and settlement of subcontracts thereunder, together with reasonable storage, transportation,
and other costs incurred in connection with the protection or disposition of termination inventory;
provided, however, that if the termination is for default of the Contractor there shall not be included
any amounts for the preparation of the Contractor's settlement proposal; and
(D) there shall be included therein a portion of the fee payable under the contract
determined as follows -
(I) in the event of the termination of this contract for the convenience of
the Government and not for the default of the Contractor, there shall be paid a percentage of the
!es e
uivalent t
th
q
o
e percentage of the completion of work contemplated by the contract, loss fee
payments previously made hereunder; or
(II) in the event of the termination of this contract for the default of the
Contractor, the total fee payable shall be euoh proportionate part of the fee (or, if this contract
calls for articles of different types, of such part of the fee as is reasonably allocable to the type
of article under consideration) as the total number of articles delivered to and aooepted by the
Government bears to the total number of articles of a like kind called for by this Contract;
if the amount determined under this subparagraph (i) is lose than the total payment` theretofore
made to the Contractor, the Contractor shall repay to the Government the excess amount; or
(ii) it the settlement includes only the fee, the amount thereof will be determined in
aooordanoe with subparagraph (i)(D) above.
?(f) The Contractor shall have the right of appeal, under the clause of this contract entitled
"Disputes," from Any determination made by the Contracting Officer under paragraphs (o) or (e)
above, except that if the Contractor has failed to submit his claim within the time provided in
paragraph (a) above and has failed to request extension of such time, he shall have no such right of
appeal. In any case where the Contracting Officer has made a determination of the amount due under
paragraph (o) or (a) above, the Government shall pay to the Contractor the followings (i) if there
is no right of appeal hereunder or if no timely appeal has been taken, the amount so determined by
the Contracting Officer, or (ii) if an appeal has been taken, the amount finally determined on such
appeal.
(g) In arriving at the amount due the Contractor under this clause there shall be deducted (i) all
unliquidated advance or other payments theretofore made to the Contractor, applicable to the terminated
portion of this contract, (ii) any claim which the Government may have against the Contractor in
connection with this contract, and (iii) the agreed price for, or the proceeds of sale of, any
materials, supplies, or other things acquired by the Contractor or sold. pursuant to the provisions of
this.olause and not otherwise recovered by or credited to. the Government.
(h) In the event of a partial termination, the portion of the fee which is payable with respect
to the work under the continued portion of the contract shall be eq%litably adjusted by agreement between
the Contractor and the Contracting Officer, and such adjustment shall be evidenced by an amendment to
this contract.
(i) The Government may from time to time, under such terms and conditions as it may prescribe,
make partial payments and payments on account aainst
t
i
poe
s
nourred by the Contractor in connection
with the terminated portion of the contract whenever in the opinion of the Contracting Officer the
aggregate of such payments shall b
i
h
e w
t
in the amount to which the Contractor will be entitled here-
under. If the total of such payments is in excess of the amount finally determined to be due under
.this clause, such excess shall be payable by the Contractor to the Government upon demand, together
with interest computed at the rata of 6 percent per annum, for the period from the date much excess
payment is received by the Contractor to the date on which such excess is repaid to the Government;
provided, however, that no interest shall be oharged with
t
respec
to any such expose payment
attributable to a reduction in the Gantraotor's claim by reason of retention or other disposition
of termination inventory until td
f
a
n as ter the date of such retention or disposition, or such
later date am determined by the Contracting Officer by reason of the Circumstances.
(j) The provisions of this clause relatins, to the fee shall be inapplicable if this oontraot
does not provide for payment of a fee.
(ian 7-203.10) (8..7c) (63 a.)
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11. E[CUBABlg DSLATS (Jul. 1958)
'&wept with respect to defaults of subcontractors, the Contractor shall not be in default by
reason of any failure in performance of this contract in accordance with its terse (including any
failure by the Contractor to sake progress in the prosecution of the work hereunder which endangers
such performance) if such failure ariaeqq out of causes beyond the control and without the fault or
negligence of the Contractor. Such oaudas say include, but are not restrioted too cots of Ood or
of the public eneayl sots of the Oovsrnment in Tither its eoverri$ or osntreatual oapsitari tire.I
flcodal epidesioss quarantine restrictiemos strikeas freight esbergoess and unusually severe weathers
tut in every case the failure to perform must be beyond the control and without the fault or
negligence of the Contractor. If the failure to perform is caused by the failure of a suboontraotor
to perform or sake progress, and if such failure arises out of causes beyond the control of both the
Contractor and subcontractor, and without the fault or negligence of either of them, the Contractor
shall not be deemed to be in default, unless (i the supplies or services to be furnished by the sub-
contractor were obtainable from other sources, ii) the Contracting Officer shal2'have ordered the
Contractor in writing to procure such supplies or services from such other sources, and (iii) the
Contractor shall have tailed to comply reasonably with such order. Upon request of the Contractor,
the Contracting Officer shall ascertain the facts and extent of such failure and, if he shall
determine that any failure to perform was occasioned by any one or more of the said causes, the
delivery schedule shall be revised sooordin4y, subject to the }sights of the Gavssssent under the
clause hereof entitled "Termination".
(ASPS 7.403.11) (8-706) (63 H.)
12. DISPV (Jan. 1958)
(a) lmooept as otherwise provided in this contract, any dispute concerning a question of fact
arising under this contrast which is not disposed of by agreement shall be decided by the Contracting
Officer, who shall reduce his decision to writing and moilor otherwise furnish a copy thereof to
the Contractor. The decision of the Contracting Officer shall be final and conclusive unless,
within 30 days from the date of receipt of such copy, the Contractor sails or otherwise furnished
to the Contracting Officer a written appeal addressed to the Secretary. The decision of the
Secretary or his duly authorised representative for the determination of such appeals shall be final
and conclusive unless determined by a court of competent jurisdiction to have been fraudulent, or
oaptrioious, or arbitrary, or so grossly erroneous an necessarily to imply bad faith, or not supported
by substantial evidence. In connection with any appeal proceeding under this clause, the Contractor
shall be afforded an opportunity to be heard and to offer evidence in support of his appeal. Pending
final decision of a dispute hereunder, the Contractor shall proceed diligently with the perforsanos
of the contract and in accordance with the Contracting Offioer's decision.
(b) This "Disputes" clause does not preoltoe consideration of law questions in connection
with decisions provided for in paragraph (a) abg1es Provided, that nothing in this contract shall
be oonstrued as making final the decision of any pdainistrative official, representative, or board
on a question of law.
(AM 7-203.12) (7-103.12) (63 m.)
13. lltiT IJ IOAW ACT (Jul. 1960)
(a) In acquiring end products, the Buy Aseriojp Act (41 U.S.C. 10 a -d) provides that the
Oevernsent give preference to domestic source, end prrcdduota. For the purpose of this oleusei
(i) "components" sears those articles,-satgrials, and supplies, whiob are directly
incorporated in the and productas
(ii) "end products" swans those articles, ssterials, and supplies, which are to be acquired
under this contract for public uses and
(iii) a "domestic source end product" seams (A) an u ;.*aotured and product which has been
mined or produced in the United States and (S) an end product manufactured in the United states
if the cost of the components thereof which arc mined, produced, or manufactured in the United
states or Cabada exoaads 50 percent of the oust of all its components. For the purposes of this
a iii) (8 , component. of foreign origin of the ease type or kind as tha?pvdduote referred to in
b ii) or (iii) of this Clause shall be treated as components mined, produced, or manufactured
in the Unit" States,
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(b) The Contractor agree that there wi).1 be deliverea under this contract only domestic son=*
end products, except end productse
(i) which are for use outside the United 8tatesl
(ii) which the Government determines are not mined, produced, or manufactured in the
United States in sufficient and, reasonably available commercial quantities and of a satisfactory
quality;
(iii) as to which the Secretary determines the domestic preference to be inoonAistent
with the public interest; or
(iv) as to which the Secretary determines the cost to the Government to be unreasonable.
(The foregoing requirements are administered in accordance with Executive Order4o. 10582, dated
December 17, 1954).
(ASM 7-204.3') (6-104.5) (63 M.)
14. 00MENOT PROP 'ry (Aug. 1961)
(a) The Government shall deliver to the Contractor, for use in connection with and under the
terms of this contract, the property described in the Schedule or specifications, together with such
related data and information as the Contractor- may request and as may reasonably be required for
the intended use of such property (hereinafter referred to an "Government-furnished Property"). The
delivery or performance dates for the supplies or services to be furnished by the Contractor under
this contract are based upon the expectation that Government-furnished Property suitable for use
will be delivered to the.Contractor at the times stated in the Schedule or, if not so stated, in
nuffioient time to enable the Contractor to meet such delivery or performance dates. In the event
that Government-furnished Property is not delivered to the Contractor by such time or times, the
Contracting Officer shall, upon timely written request made by the Contractor, sake a determination
of the delay occasioned the Contractor and shall equitably adjust the estimatod cost, fixed fee, or
delivery or performance dates, or all of them, and any other contractual provisions affected by such
delayy'in accordance with the procedures provided for in the clause of this contract entitled
"Changes". In the event that Government-furnished Property is received by the Contractor in a
condition not suitable for the intended use, the Contractor shall, upon receipt thereof notify the
Contracting Officer of such fact and, as directed by the Contracting Officer, either W return
property at the Governments expense or otherwise dispose of the property or (ii) effect repairs
or modifications. Upon completion of (i) or (ii) above, the Contracting Officer upon written
request of the Contractor shall equitably adjuwt the estimated cost, fixed fee,. or delivery or
performance dates, or all of them, and any other contractual provision affected by the return
or disposition, or the repair ar modification, in accordance with the procedures provided for in
the clause of this contract entitled "Changes". The foregoing provisions for adjustment are
exclusive and the Government shall not be liable to suit for breach of contract by reason of any
delay in delivery of Goverment-furnished Property or delivery of such property in a condition not
suitable for its intended use.
(b) title to all property furnished by the Government shall remain in the Government. Title
to all property purchased by the Contractor, for the cost of which the Contractor is entitled to
be reimbursed an a direct item of cost under this contract, shall pass to and vest in the Government
upon delivery of such property IW the vendor. Title to other property, the cost of which is
reimbursable to the Contractor under the contract, shall pass to and vest in the Government upon (i)
issuance for use of such property in the performance of this contract, or (ii) commencement of
processing or use of such property in the performance of this contract, or (iii) reimbursement
of the cost thereof by the Government in whole or in part, whichever first occurs. All Government-
furnished Property, together with all property acquired by the Contractor title to which vests in
the Government under this paragraph are subject to the provisions of this clause and are hereinafter
collectively referred to an "Government Property."
(a) Title to the Government Property shall not be affected by the incorporation or attachment
thereof to any property not owned by the Governeuont, nor shall such Government Property, or any part
thereof, be or become a fixture or lose its identity as personalty by reason of affixation to any
realty. The Contractor shall comply with the provisions of the Manual for Control of Government
Property in Possession of Contractors" (Appendix B, Armed Services Procurement Regulation), as in
effect on the date of the contract, which Pan-al is hereby incorporated by reference and made a
part of this contract.
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(d) The Government Property provided or furnie...d pursuant to the terms of this contract shall,
unless otherwise provided herein, be used nnly for the performance of this contract.
(e) The Contractor shall maintain and administer in accordance with sound industrial practice,
a program, for the maintenance, repair, protection and preservation of Government Property so as
to assure its full availability and usefulness for the performance of this contract. The Contractor
shall take all reasonable stepe to comply with all appropriate directions or instruotioIa iblob the
Contracting Off Leer may proscribe as reasonably necessary for the protection of Government Property.
(f) (1) The Contractor shall not be liable for any loss of or dame to the Government
propsr*, or for expenses incidental to ouch loss or damage, accept that the Contractor shad be
responsible for any such lose or damage (including expenses incidental thereto)-
(i) which results from willful misconduct or lack of good faith on the part of any one
of the Contractor's directors or officers, or on the part of any of his managers, superintondants,
or other equivalent representatives, who has supervision or direction ofn
(A) all or substantially all of the Contractor's business, or
(B) all or substantially all of the Contractor's operations at any one plant or
separate location, in which this contract is being performed, or
(0) a separate and complete major industrial operation in connection with the performance
of this oontraoti
(ii) which results from a failure on the part of the Contractor, due to the willful misconduct
.or lack of good faith on the part of any of his directors, officers, or other representatives
sentionad in subparagraph (i) above,
(A) to maintain and administer, in accordance with sound industrial practice, the program
for maintenance, repair, protection and preservation of Goverment Property as required by paragraph
(e) hereof, or
(B) to take all reasonable steps to comply with any appropriate written directions of
the Contracting Officer under paragraph (e) hereofs
(iii) for which the Contractor is otherwise responsible under the express term of the clause
or clauses designated in the Sohedulei
(iv) which results from a risk expressly required to be insured under this contract, but only
to the extent of the insurance so required to be procured and maintained, or to the extent of insurance
actually procured and maintained, whichever is greater; or
(v) which results from a rink which is in fact covered by insurance or for which the Contractor
is otherwise reimbursed, but only to the extent of such insurance or reimbursement;
provided that, if ^ore than one of the above exceptions shall be applicable in any case, the Contractor's
liability under any one exception shall not be limited by any other exception. This clause shall
not be construed as relieving a subcontractor from liability for loss or destruction of or damage
to Government Property in his possession or control, except to the extent that the subcontract, with
the prior approval of the Contracting Officer, may provide for the relief of the subcontractor from
such liability. In the absence of such approval, the subcontract shall -contain appropriate provisions
requiring the return of all Goverment Property in as good condition as when received except for
reasonable wear and tear or for the utilisation of the property in aooardanoe with the provisions
of the prime contract.
(2) The Contractor shall not be reimbursed for, and shall not include as an it.. of over-
head, the cost of insurance, or any provision for a reserve, covering the rink of loss of or damage
to the government Property., except to the extent that the Government may have required the Contractor
to carry such insurance under any other provision of this contract.
(3) Upon the happening of loso or destruction of or damage to the Government Property, the
Contractor shall notify the Contracting Officer thereof, and shall communicate with the Lose and
Salvage Organisation, if any, now or hereafter designated by the Contracting Officer, and with the
assistance of the Loss and Salvage Organisation so designated (unless the Contracting Officer has
designated that no such organization be employed), shall to" all reasonable ateps to protect the
Government pyopertsy from further damage, separate the damage& and undamaged Government property, at
all the Government property in the best possible order, and furnish to the Contracting O ffioer a
(i) the lost, destroyed and damaged Government Property,
(ii) the time and origin of the loss, destruction or damage,
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(iii) all known interests in commingled property of which the Government Property is a part, and
(iv) the insurance, .f any, covering any part of or interest in such commingled property.
The Contractor shall make rOpairs and renovations of the damaged Government Property or take such
other action, as the Contracting Officer diroots.
(4) In the event the Contractor is indemnified, reimbursed' or otherwise compensated for
any lose or destruction of o damage to the Government Property, he shall use the proceeds to repair,
renovate or replace the Government Property involved, or shall credit such proooods against the
cost of the work covered by tkie contract, or shall otherwise reimburse the Government, as directed
by the Contracting Officer. The Contractor shall do nothing to prej{ulice the Government's right
to recover against third parts for any such lose, destruction or damage and, upon the request of
the Contracting Officer, shall,'at _the Government's expanse, furnish to the Government all reasonable
assistance and cooperation (including the prosecution of suit and thb execution of instruments of
assignment in favor of the Government) in obtaining recovery. In addition, whore the subcontractor
has not been relieved from liability for any loss or destruction of Or damage to Government Property,
the Contractor shall enforce the liability of the subcontractor for such loss or destruction of
or damage to the Government Property for the benefit of tie Government.
(5) If this contract is for the development, production, modification, maintenance, or
overhaul of aircraft, or otherwise involves the furnishing of aircraft by the Government, the clause
of this contract entitled "Plight Risks" shall control, to the extent it is applicable, in the case
of loss or destruction of, or damage to, aircraft.
(g) The Government shall at all reasonable times have access tb the promisee where any of the
Government Property is located.
` (h) The Government Property shall remain in the possession of th,-C'ontractor for such period
of time as is required for the performance of this contract unless the Contracting Officer determines
that the interests of the Government require removal of such property. In such case the Contractor
shall promptly take such action as the Contracting Officer may direct with respect to the removal
and shipping of Government Property. In any such instance, the contract may be amended to accomplish
an equitable adjustment in the terms and provisions thereof.
(i) Upon the completion of this contract, or at such earlier dates as may be fixed by the
Contracting Officer, the Contractor shall submit to the Contracting Officer in a form acceptable
to him, inventory schedules covering all items of the Government Property not consumed in the
performance of this contract, or not theretofore delivered to the Government, and shall deliver or
make such other disposal of such Government Property as may be directed or authorized by the
Contracting Officer. The net proceeds of any such disposal shall be credited to the cost of the
work covered by the contract or shall be paid in such manner as the Contracting Officer may direct.
The foregoing provisions shall apply to scrap from Government Property; provided, however, that the
Contracting Officer may authorize or direct the Contractor to omit Pram such inventory schedules
any scrap consisting of faulty castings or forging,, or cutting and processing waate, such as chips,
cuttings, borings, turnings, short ends, circles, trimmings, clipping,, and remnants, and to dispose
of such scrap in accordance with the Contractor's normal practice and account therefor as a part
of general overhead or other reimbursable coat in accordance with the Contractor's established
accounting procedures.
(j) Unless otherwise provided herein, the Government shall not be under any duty or obligation
to restore or rehabilitate, or to;psy the costs of the restoration or rehabilitation of the Contractor's
plant or any portion thereof which is affected by the removal of any Government Property.
(k) Directions of the Contracting Officer and oosmunioations Of the Contractor issued pursuant
to this olause shall be in writing.
(AM 7-203.21, (13-503) (63 Id.))
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15. INSURANCE--LIABILITY TO THIRD PERSONS (Jan. 19bU)
(a) The Contractor shall procure and thereafter maintain workmen's compensation, employer's
liability, comprehensive general liability (bodily injury) and comprehensive automobile liability
(bodily injury and property damage) insurance, with respect to performance under this contract,
and such other insurance as the Contracting Officer may from time to time require with respect to
performance under this contract; provided,.that the Contractor may with the approval of the
Contracting Officer maintain a self-insurance program, and provided further, that with respect
to workmen's compensation the Contractor is qualified pursuant to statutory authority. All
insurance required pursuant to the provisions of this paragraph shall be in such form, in such
amounts, and for such periods of time, as the Contracting Officer may from time to time require
or approve, and with insurers approved by the Contracting Officer.
(b) The Contractor agrees, to the extent and in the manner required by the Contracting Officer,
to submit for the approval of the Contracting Officer any other insurance maintained by the
Contractor in connection with the performance of this contract and for which the Contractor seeks
reimbursement hereunder.
(o) The Contractor shall be reimbursed' (i) for the portion allocable to this, contract of
the reasonable post of insurance as required or approved pursuant to the provisions of this clause,
and (ii) for liabilities to third persons for loss of or damage to property (other than property (A)
owned, occupied or used by the Contractor or rented to the Contractor, or (B) in the care, custody,
or control of the Contractor), or for death or bodily injury, not compensated by insurance or
otherwise, arising out of the performance of this contract, whether or not caused by the negligence
of the Contractor, his agents, servants or employees, provided such liabilities are represented by
final judgments or by settlements approved in writing by the Government, and expenses incidental
to such liabilities, except liabilities (I) for which the Contractor is otherwise roe onsible under
the express terms of the clause or clauses, if any, specified in the Schedule, or (II) with respect
to which the Contractor has failed to insure as required or maintain insurance as approved by the
Contracting Officer or (III) which results from willful misconduct or lack of good faith on the
part of any of the Contractor's directors or officers, or on the part of any of his managers
superintendents, or other equivalent representatives, who has supervision or direction of (1) all
or substantially all of the Contractor's business, or (2) all or substantially all of the Contractor's
operations at any one plant or separate location in which this contract is being performed, or (3)
a separate and complete major industrial operation in connection with the performance of this
contract. The foregoing shall not restrict the right of the Contractor to be reimbursed for the
cost of insurance maintained by the Contractor in connection with the performance of this contract,
other than insurance required to be submitted for approval or required to be procured and maintained
pursuant to the provisions of this clause, provided such cost would constitute Allowable Cost under
the clause of this contract entitled "Allowable Cost, Fixed Fee and Payment."
(d) The Contractor shall give the Government or its representatives immediate notice of any
suit or action filed, or prompt notice of any claim made, against the Contractor arising out of the
performance of this contract, the cost and expense of which may be reimbursable to the Contractor
under the provisions of this contract and the risk of which is then uninsured or in which the
amount claimed exceeds the amount of ooveraga. 111'e Contractor shall furnish immediately to the
Government copies of all pertinent papers received by the Contractor. If the amount of the
liability claimed exceeds the amount of coverage, the Contractor shall authorize representatives
of the Government to collaborate with counsel for the insurance carrier, if any, in settling or
defending such claim. If the liability is-not insured or covered by bond, the Contractor shall,
if required by the Government, authorize representatives of the Government to settle or defend any
such claim and to represent the Contractor in or take charge or any litigation in connection
therewith; provided, however, that the Contractor may, at his own expense, be associated with the
representatives of the Government in the settlement or defense of any such claim or litigation.
(ASPR 7-203.22) (63 Ed.)
16. MILITARY SECURITY RBL$J $& x x s contract
Involves
acc (a) The provisions o"Confidential" this clause shall dpnlyConfidential-ModifiediHandling Authorf zed" ore higher.
to information classified including "
(b) The Government shall notify the Contractor of the security classifications of this contract
ficanion, by the
and the elements thereof, and of any suboe ent revisions in such security tin
lass
D
i
no
D Form 254), s
use of a Security Requirements Check List (
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(c) To the extent the Government has indicated as of the date of this contract or thereafter
indicates security classification under this contract as provided in paragraph (b) above, the
Contractor shall safeguard all classified elements of this contract and shall provide and maintain
a system of security controls within his own organization in accordance with the requirements of---
(i) the Security Agreement (DD Form 441), including the Department of Defense Industrial
Security Manual for Safeguarding Classified Information as in effect on the date of this contract,
and any modification to the Security Agreement for the purpose of adapting the Manual to the
Contractor's business; and
(ii) any amendments to said Manual made after the date of this contract, notide of which
has been furnished to the Contractor by the Security Office of the Military Department having
security cognizance over the facility.
(d) Representatives of the Military Department having security cognizance over the facility
and representatives of the contracting Military Department shall have the right to inspect at
,reasonable intervals the procedures, methods, and facilities utilized by the Contractor in
complying with the security requirements under this contract. Should the Government, through
these representatives, determine that the Contractor is not complying with the security requirements
of this contract the. Contractor shall be informed in writing by the Security Office of the
cognizant Military Department of the proper action to be taken in order to effect compliance with
such requirements.
(e) If, subsequent to the date of this contract, the security classifications or security
requirements under this contract are changed by the Government as provided in this clause, and if
such change causes an increase or decrease in the estimated cost of performance of this contract,
the estimated cost and fixed fee shall, to the extent appropriate, be subject to an equitable
adjustment. Any such equitable adjustment shall be accomplished in the manner set forth in the
"Changes" clause in this contract.
(f) The Contractor agrees to insert, in all subcontracts hereunder which involve access to
classified information, provisions which shall conform substantially to the language of this clause,
including this paragraph (f) but excluding paragraph (e) of this clause. The Contractor may insert
in any such subcontract, and any such subcontract entered into thereunder may contain, in lieu of
paragraph (e) of this clause, provisions which permit equitable adjustments to be made in the
subcontract price or in the estimated coat and fixed fee of the subcontract (as appropriate to the
type of subcontract involved) on account of changes in security classifications or requirements
made under the provisions of this clause subsequent to the date of the\subcontract involved.(-Oct. 1953)
f (g) The Contractor also agrees that he shall determine that any subcontract proposed by him
for the' furnishing of supplies and services which will involve access to classified information in
the Contractor's custody has been granted an appropriate facility security clearance, which is still
in effect, prior to being accorded access to such classified information.
(ASPR 7-104.12 (63 Ed.) except (e) and (f) are ASPR 7-204.12)
17. AUTHORIZATION AND CONSENT (MAR. 1964)
The Government hereby gives its authorization and consent (without prejudice to any rights
of indemnification) for all use and manufacture, in the performance of this contract or, any part
hereof or any amendment hereto or any subcontract hereunder (including any lower-tier subcontract),
of any invention described in and covered by a patent of the United States (i) embodied in the
structure or composition of any article the delivery of which is accepted by the Government under
this contract, or (ii) utilized in the machinery, tools, or methods the use of which necessarily
results from compliance by the Contractor or the using subcontractor with (a) specifications or
written provisions now or hereaftaar forming a part of this contract, or (b) specific written
instructions given by the Contracting Officer directing the manner of performance. The entire.
liability to the Government for infringement of a patent of the United States shall be determined
solely by the provisions of the indemnity clauses, if any, included in this contract or any
subcontract. hereunder (including any lower-tier subcontract), and the Government assumes liability
for all other infringement to the extent of the authorization and consent hereinabove granted.
(ASPR 7-203.23 (9-102.1) (63 Ed.) revised 6 March 1964 (Rev. No. 4))
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id. MOTION ABD ASSIBTAI O BBQABDIHG PATUT AID COPT IC U IIT8II0 iT (Feb. 1962)
The provisions of this clause shall be applicable only it the mount of this contract asoseds $10,000.
(a) '!he Contractor shall report to the Contracting Officer, promptly and in reasonable written
detail, each notice or outs of patent or oopyright iofrineesent based on the performance of this
aentraat at whieh the O meson,, has hmowledee.
(b) In the event of any suit against the Goverment, or any claim against the Government made
bettors suit has been instituted, on account of any alleged patent or oopyright infringement arising
cwt of the perfors*noe of this contract or out of the use of any supplies furnished or wookk or
services performed hereunder, the Contractor shall furnish to the Govt, upon request, all
evidence and information in possession of the Contractor pertaining to such suit or claim. Buoh
evidence and information shall be furnished at the expense of the Government except in those osssa
14 which the Contractor has agreed to indemnity the Government against the claim being asserted.
(AM 7-203.24, (9-104) (63 ft.))
19. 1TIBG OT PATUT APPLIQATICHS (Jan. 1955)
(a) Before filing or causing to be filed a patent application disclosing any subject matter
of this oontrot, which subject matter is olassifed *Booret' or higher, the Contractor shall, citing
the thirty (30) day provision below, transit the proposed application to the Contracting Offiosr
for determination whether, far reasons of national security, such application should be placed under
an order of secrecy or sealed in accordance with provisions of 35 U.S.C. 181-18d or the issuance of
a patent should be otherwise delayed under pertinent statutes or rsgulationel and the Contractor
shall observe any instruotiaos of the Contracting Officer with respect to the manner of delivery of
the patent application to the U.B. Patent Office for filing, but the Contractor shall not be
denied the right to file such patent application. If the Contracting Offioer shall not havegivan
any such instructions within thirty (30) days from the date of mailing or other transmittal of the
proposed application, the Contractor may file the application,
(b) The Contractor shall furnish to the Contracting Officer, at the time of or prior to the time
when the Contractor files or causes to be filed a patent application disclosing any subject matter
of this contract, which subject matter is classified "Confidential," a copy of such application
for determination whether for reasons of national security, such application should be placed under
aq order of secrecy or the issuance of a patent should be otherwise delayed under pertinent statutes
or regulations.
(o) In filing any patent application coming within the coops of this clause, the Contractor
shall observe all applicable security regulations covering the transmission of classified subject
matter.
(ASPS 7204.6) (9-106) (63 Ed.)
20. COIyIOT LIBOR (tar. 1949)
In connection with the performance of work under this oontraot, the Contractor agrees not to
employ any person undergoing sentence of imprishoment at hard labor.
(AM 7-203.15) (12-203) (63 Bd.)
21. WAI --H ALM PQBLIO C01MAQ'P8, AC? (Jas. 195k )
If this contract is for the manufacture or furnishing of materials, supplies, articles, or
equipment in an amount which exceeds or may exceed 110,000 and is otherwise subject to the Walsh-
,Eealey Public Contracts Act, as amended (41 O.S.C. 35-45), there are hrreb' incorporated by reference
all representations and stipulations re4nired by said Act and regulations issued thereunder by the
Secretary of Labor, such representations and stipulations being subject to all applicable rulings
and interpretations of the Secretary of labor which ors sow or mar hereafter be in effect.
(ASPS 7203.17) (12-605) (63 NO
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22. WORK HQJRS ACT OF 1962-OVERTIME C RPENSATION (Oct. 1962)
This contract, to the extent that it is of a character specified in the Work Hours Act of 1962
Public Law 87-581, 76 Stat. 357-360) and is not covered by the Walsh-Healey Public Contracts Act
41 U.S.C. 35-45), is subject to the following provisions and to all other provisions and exceptions
of said Work Rau" Act of 1962.
(a) No Contractor or subcontractor contracting for any part of the contract work shall require
or permit any laborer or mechanic to be employed on such work in excess of eight hours in any calendar
day or in excess of forty hours in any workweek unless such laborer or mechanic receives compensation
at a rate not less than one and one-half times his basic rats of pay for all hours worked in excess
of eight hours in any calendar day or in excess of forty hours in such workweek, whichever is
the greater number of overtime hours.
(b) In the event of any violation of the provisions of paragraph (a), the Contractor and any
subcontractor responsible for such violation shall be liable to any affected employee for his unpaid'
wages. In addition, such Contractor or subcontractor shall be liable to the United States for
liquidated damages. Such liquidated damages shall be computed, with respect to each individual laborer
or meohanio employed in violation of the provisions of paragraph (a), in the sum of $10 for each
oalondar day on which such employee was required or permitted to work in excess of eight hours or
in excess of forty hours in a workweek without payment of the required overtime wages.
(c) The Contracting Officer may withhold, or cause to be withhold, from moneys payable on account
of work performed by the Contractor or-subcontractor, the full amount of wages required by this
contract and such sums as may administratively be determined to be necessary to satin any liabilities
of such Contractor or subcontractor for liquidated damages as provided in paragraph (b).
(ASPR 7-203.16) (12-30.1.1) (63 Ed.)
23. PAYICE3T FOR OVERTD AND SHIFT PRE nALS (Feb. 1962)-(a) Allowable Cost shall not''inolude
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;
(0) in the performance of tests, industrial processes, laboratory prooedures, 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.
(b) The cost of overtime premiums or shift premiums otherwise allowable under (a) above shall be
allowed only to the extent the amount thereof is reasonable and properly allocable to the work under
this contract.
(ASPR 7-203.27)?(12-102.3(a) (63 Fid.))
24. NCtIDISCRIMElLATI(R IN. E> (PLOYKMT (June 1963) (The following clause is applicable unless this.'
contract is exempt under the rules and regulations of the President's Committee on Equal Elbployment
Opportunity issued pursuant to EEkeoutive Order No. 10925 of March 6, 1961, as amended.)
During the perfoxminoe of this contract, the Contractor agrees as followmt
(1) The Contractor will not discriminate against any employee or applicant for employment
because of race, creed, color, or national origin. The Contractor will take affirmative action to
ensure that applioants are employed, and that employees ai'e treated during employment, without regard
to their race, creed, color or national origin. Such action shall inolude, but not be limited, to
the followings employment, upgrading, demotion or transfer; recruitment or recruitment advertising;
layoff or termination; rates of pay or other forms of compensation; and selection 'for training,
including apprenticeship. The Contractor agrees to post in conspicuous places, available to
employees and applicants for employment, notices to be provided by the contracting officer setting
forth the provisions of this nondiscrimination clause.
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(2) The Contractor will, in all solicitations or advertisements for employees placed by or
on behalf of the Contractor, state that all qualified applicants will reosive consideration for
employment without regard to race, creed, color, or national origin.
(3) The Contractor will send to each labor union or representative of workers with which
bs?has a collective bargaining agreement or'other contract or understanding, a notion, to be
provided by the Agency Contracting Officer, advising the said labor union or workers' representative
of tare oentkraelekr's eosnIasa-ts uMes Sh .cobra, aa- shall pat copies at tae eetta is ooeyplSL a
places available to emplopress and applicants for employment.
(4) The Contractor will comply with all provisions of Sseoutive Order No. 10925 of Karoh 6,
1961, as amended, and of the rules, regulations, and relevant orders of the President's Committee
on Equal Heployment Opportunity created thereby.
(5) The Contractor will furnish all information and reports required by Executive Order No.
10925 of Xaroh 6, 1961, as amended, and by the rules, regulations, and orders of the said Committee,
or pursuant thereto, and will permit access to his books, records, and accounts by the contracting
agency and the Committee for purposes of investigation to ascertain compliance with such rules,
regulations, and orders.
(6) In the event of the Contractor's monoompiianos with the nodsterimination olause of
this contract or with any of the said rules, regulations, or orders, this contract may be cancelled,
terminated, or suspended in whole or in part and the Contractor may be declared ineligible for
further Government contracts in acoordanoe with prooedures authorised in Elceoutivv Order lo. 10925
of l(aroh 6, 1961, as amended, and such other sanction, may be imposed and remedies invoked as
provided in the said kmceoutive Order or by rule, regulation, or order of the President's Committee
on Equal ]kployment Opportunity, or as otherwise provided by law.
(7) The Contractor will include the provisions of paragraph (1) through (7) in every subcontract
or purchase order unless exempted by rules, regulations, or ordsss of the President's Cosmittel-on
Squat %ployment Opportunity issued pursuant to section 303 of Zxeoutive Order No. 10925 of Xaroh 6,
1961, as amended, so that such provisions will be binding upon each subcontractor or vendor. * The
Contractor will take such action with respect to W subcontract or purchase- order as the contracting
agency may direct as a mesas of enforcing such provisions, including sanctions for noncomplianost
Provided, however, that in the event the Contractor becomes involved in, or is threatened with,
litigation with a suboontractor or vendor an a result of such direction by the contracting agency,
the Contractor may request the United States to enter into such litigation to protect the interests
of the United States.
*In accordance with regulations of the President's Committee on ]Equal ftployment Opportunity,
Subcontractors below the first tier shall not be required to insert the Nondiscrimination in
RAployment clause in their sskboontraots, except that under contracts oalldag for construction,
rehabilitation, alteration, conversion, extension, or repair of bdildings, highways, or other
improvements to real property, each Subcontractor below the first tier shall include the clause
in every subcontract which calls for such work to be performed at the site of construction, or
except upon Special Order of the Secretary of the Department or the Executive Vice Chairman of
the President's Committee.
(RSPB 7-203.18) (12402(a)) (63 m.) revised 15 August 1943 (Rev. no. 2)
25. NOTICJ TO TSS OOV NMWi' or LABOB DISPUTBJ (Sept. 1958)
(a) Whenever the Contractor has knowledge that any actual or potential labor dispute is
delaying or threatens to delay the timely performance of this contract, the Contractor shall
immediately give notice thereof, including all relevant information with respect thereto, to the
Contracting Officer.
(b) The Contractor agrees to insert the substance of this clause, including this paragraph (b),
in any subcontract hereunder as to which a labor dispute may delay the timely performance. of this
oontraot; except that each such subcontract shall provide that in the event its timely performance
is delayed or threatened by delay by an + actual or potential labor dispute, the subcontractor shall
immediately notify his next higher tier subcontractor, or the prime oontraotor, as the case may be,
of all relevant information with respect to such dispute.
(AM 7-303.9) (7-104.4) (63 nt.)
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26. PRIORITIES, ALLOCATIONS, AND ALLOTMENTS (Jan. 1961)
The Contractor shall follow the provisions of DMS Reg. Iand all other applicable regulations
and orders of the Business and Defense Services Administration in obtaining controlled materials and
other products and materials needed to fill this order.
(ASPR 7-204.15) (7-104.18) (63 Ed.))
27. RENEGOTIATION (Oct. 1959)
(a) To the extent required by law, thin contract is subject to the Renegotiation Aot of 1951
(50 U.S.C. App. 1211, at seq.), as amended, and to any subsequent act of Congress providing for the
renegotiation of contracts. Nothing contained in this clause shall impose any renegotiation
obligation with respect to this contract or any subcontract hereunder vhioh is not imposed by an
act of Congress heretofore or hereafter enacted. Subject to the foregoing this contract shall be
deemed to contain all the provisions required by Section 104 of the Renegotiation Act of 1951, and
by any such other act, without subsequent contract amendment specifically incorporating such
provisions.
(b) The Contractor agrees to insert the provisions of this clause, including this paragraph
(b), in all subcontracts, as that term is defined in Section 103g of the Renegotiation Act of 1951,
as amended.
(ASPR 7-203.13).(7-103.13) (63 Ed.)
28. ASSItBi M OF CLAIMS (Feb. 1962)
(a) Pursuant to the provisions of the Assignment of Claims Act of 1940, as amended (31 U.S.C.
263, 41 U.S.C. 15), if this contract provides for payments aggregating $1,000 or more, claims for
monies due or to become due the Contractor from the Government under this contract may be assigned
to a bank, trust company, or other financing institution, including any Federal lending agency,
and may thereafter be further assigned and reassigned to any such institution. Any such assignment
or reassignment shall cover all amounts payable under this contract and not already paid, and
shall not be made to more than one party, except that any such assignment or reassignment may be
made to one party as agent or trustee for two or more parties participating in such financing.
Unless otherwise provided in this contract, payments to an assignee of any monies due or to booms'
due under this contract shall not, to the extent provided in said Act, as amended, be subject to
reduction or set-off.
(b) In no event shall copies of this contract or of any plans, specifications, or other
similar documents relating to work under this contract, if marked "Tap Secret," "Secret," or
"Confidential," be furnished to any assignee of any claim arising under this contract or to any
other person not entitled to receive the same. However, a copy of any part or all of this contract
so marked may be furnished, or any information contained therein may be disclosed, to such assignee
upon the prior wtitten authorization of the Contracting Officer.
(ASPS 7-203.6) (7-103.8) (63 Ed.)
29. OFFICIALS NOT TO BENEFIT (Jul. 1949)
No member of or delegate to Congress, or resident commissioner, shall be admitted to any share
or part of this contract, or to any benefit that may arise therefrom; but this provision shall not
be construed to extend to this contract if was with a corporation for its general benefit.
(ASPR 7-203.19) (7-103.19) (63 Ed.)
30. COVENANT AGAINST CONTINGENT FEES (Jan. 1958)
The Contractor warrants that no person or selling agency has been employed or retained to
solicit or secure this contract upon an agreement or understanding for a commission, percentage,
brokerage, or contingent fee, excepting bona tide employees or bona fide established commercial or
selling agencies maintained by the Contractor for the purpose of securing business. For breach
or violation of this warranty the Government shall have the right to annul this contract without
liability or in its discretion, to deduct from the contract price or consideration, or otherwise
recover, the full amount of such commission, percentage, brokerage or contingent fee.
'
(AM 7-203.20 (7-103.20) (63,Ed.))
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31. GRATUITne (liar. 1952)
(a) The Government may, by written notice to the Contractor, terminate the right of the
Contractor to proceed under this contract if it is found., after notice and hearing, by the
Secretary or his duly authorised representative, ghat gratuities (in the form of entertainment,
gifts, or otherwise) were offered or given by the Contractor, or any agent or representative
of the Contractor, to any officer or employee of the Government with a view toward securing a
contract or securing favorable treatment with respect to the awarding or nding,-or the makifg of
any determinations with respect to the performing of such ooa#raotl ,-that the esistanoe
of the facts upon whish the Secretary or his duly authorised representatii!s makes such findings
shall be in issue and may be reviewed in any oampetent court.
(b) In the event this contract is terminated as provided in paragraph (a) hereof, the Government
shall be entitled (i) to pursue the some remedies against the Contractor as it could pursue in
the event of a breach of the contract by the Contractor, and (ii) as a penalty in addition to any
other damages to which it may be entitled by law, to exemplary damages in an amount (as determined
by the Secretary or his duly authorised representative) which shall be not less than three or
more than ton times the costs incurred by the Contractor in providing any such gratuities to any
such officer or employee.
(a) The rusts 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.
(AM 7-204.14) (7-104.16) (63 ad.)
ADDI'rI aikL oB RAL PnovisrC8s
32. SHIFltRiTB. (Oct. 1957)--(a) Unless otherwise provided in this contract or unless the
Contracting Officer acting under the "Changes" clause hereof directs in writing otherwise, all
supplies to be furnished under this contract shall be delivered f.o.b. carrier's -equipment at the
plant or plants at which such supplies are to be finally inspected and accepted, or if the
facilities for shipment by carrier's equipment are not available at the Contractor's plant,
f.o.b. the point or points nsarast thereto that carrier service is available. When the carrier's
equipment is rail, any shipment occupying sufficient space in a railroad oar to oonetitute a
carload shipment subject to carload freight rates shell be properly and adequately loaded in
freight oars by the Contractor, ani any shipment subject to lees-than-carload freight rates shall
be delivered by the Contractor into the carrier's possession at the Contractor's plant,. or at
the point or points nearest thereto at which delivery can be effected.
(b) Whenever it is provided in this contract that supplies shall be delivered f.o.b. specified
destinations, such supplies shall be shipped direct by the Contractor to the specified destinations an
commercial bills of lading, at the expense of the Contractor. Provided, however, that nothing
contained herein shall preclude reimbursement of the Contractor by the Government of any such
transportationexpenses it this is a coot-reimbursement type contract.
(a) Wotwithetanding other provisions of this contract, shipments wade under ooet-reimbursement
contracts which do not exceed (13 1000 pounds if shipped by rail, truck, or freight forwarder, or
(ii) 100 pounds if shipped by railway express, or (iii) 50 pounds if shipped by oommercial air,
shall be made by commercial bills of lading, charges to destination(s) paid by. the Contractor.
(d) If the Contracting Officer directs in writing that any of the supplies to be furnished
hereunder be delivered to a carrier for shipment from a point other than specified in this
contract, equitable adjustment shall be made in the contract price in the manner provided in the
general provisions of this contract entitled "Changes".
(e) shipping Instructions. If not otherwise provided herein, names of consignees of all
supplies to be delivered by the Contractor hereunder will be furnished in writing by the Contracting
Officer at a later date. Request therefor shall be made to such address as the Contracting Officer
may direct, not later than thirty (30) days prior to the date an which any of the articles are ready
for shipment.
(f) Routing Instructions. Zr not otherwise provided herein and deliveries are other than
f.o.b. specified destinations, Government routing instructions will be furnished to the Contractor
in writing by the Contracting Officer at a later date. If the Government routing instructions have
not been received by the Contractor thirty (30) days prior to date cn which any of the articles are
anticipated to be ready for shipment, request therefor shall immediately be made to the cognisant
transportation activity speoified herein.
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(g) Notice of Shipments.(Jul. 1949) At the time of delivery of any shipment of supplies
toa carrier for transportation, the Contraotor shall give prepaid notice of shipment to the
consignee establishment, and to such other persons or installations designated by the Contracting
Officer, in accordance with instructions of the Contracting Officer. If such instructions have
not been received by the Contractor at least twenty-four (24) hours prior to such delivery to a
carrier, the Contractor shall request instructions from the Contracting Officer concerning the
notioe of shipment to be given. (ALMA 7-105.4)
(h) Computation of Delivery Time. For the purpose of determining the fulfillment of this
contract so far as delivery dates are concerned, in the event the delivery point or points are not
the same as the point or points of destination, the time of delivery of the supplies shall be the
date of delivery to the carrier ready for shipment to degtin4tion.
(i) Shipments by the Government. Unless this ii a ooet-reimbursement type contract, any
articles, supplies or other items to be delivered by the Government to the Contractor shall, unless
otherwise provided heroin, be delivered to the Contractor f.o.b. carrier's equipment at the plant
or plants of the Contractor designated, or if facilities for shipment by carrier's equipment are
not available at the Contractor's plant or plants, f.o.b. the point or points nearest thereto
that carrier's equipment is available.
(j) Where the contract provides that inspection and acceptance shall be accomplished at
a sub,ontraotor's plant (whether in whole or in part) the foregoing provisions, except paragraphs
(e} and (f), shall be equally applicable to such subcontractors as provided in said suboontraot.
Subcontreotors' shipping instructions and routing instructions, if not previously furnished, shall
be requested from the Prime Contractor.
(pPPI 7-204.50)(7-4004) (60 Ed,
33. DATA-WITEHOLDING OF PAYMENT. (Apr. 1962) (This clause is applioable only if this contract
contains the "Data" clause not forth in ASPH 9-203.1)
If "Subject Data" (as defined in the clause of this contract entitled "Data"), or any part
thereof, is not delivered within the time specified by this contract or is deficient upon delivery
(including having restrictive markings not specifically authorized by the contract), the
Contracting Officer may, until such data is delivered or deficiencies are corrected, withhold
payment due the Contractor on account of allowable costs and fixed fee, of ten percent (109)
of the contract price, unless a lesser withholding is specified in the schedule.. Payments shall
not be withheld nor any other action taken pursuant to this clause where the Contractor's failure
to make timely delivery or to deliver data without deficiencies arises out of causes beyond the
control and without the fault or negligence of the Contractor within the meaning of the clause
hereof entitled "Ecousablo Delays." The withholding of any amount or subsequent payment thereof
to the Contractor shall not be construed as a waiver of any rights accruing to the Government
under this contract.
(ASPR 9-201.2(b) (63 111.))
34. SUPERSEDING SPECIFICATIONS. (Jul. 1945)-Al1 references in any Government specification
incorporated herein to other Government specifications shall be deemed to include all speoifioatioos
supplementary to or superseding the specifications so referred to, to the extent that such
supplementary or superseding specifications are in effect at the data of Contractor's latest
quotation, if the Contraotor"'eas furnished or otherwise notified of the existence of such
supplementary or superseding specifications at the time of said quotation.
(AFPI 7-204.50 (7-4024)(60 Edo
35. QJALITY.CCt ROL SYSTEM (Jan. 1963)
The contractor shall provide and maintain a quality control system acceptable to the
Government for. the supplies covered by this contract.. The System of Quality Control shall be
in accordance with Military Speoifiottion MILrQ-9555Aty. S. Air Force Bulletin No. 515, Control
of Non-Conforming Supplies and Military Specification MIL-C-45662A, Calibration System Requirements,
(APPI 7-4013 (60 Ei.) revised 15 February 1963 (AFDC No. 11))
*(The Contraotor is deemed to mean the Manager-Market g of the Department having
primary responsibility for performing the oontraot0)
"'and only arc expressly set forth in the Scheduled
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36. GOVERNMENT BILL CF LADING. (Jul. 1961) -When it is provided in this contract that the supplies
shall be delivered other than f.o.b. specified destinations, shipment(s) will be made on a Government
Bill of Lading. The required number of such Government Bills of Lading will be furnished to the
Contractor by the cognisant transportation activity. The Contractor shall acknowledge receipt of
these Government Bills of Lading in the manner prescribed. As shipments are made, the Contractor
shall prepare and distribute, the applicable Government Bills of Lading in accordance with APLC Porn
232, "Instructions for Processing U.S. Government Bill of Lading." The Contractor also agrees that
Government Bills of Lading in excess of the requirements of this contract will be returned to the
cognisant transportation activity within a reasonable time after final shipment. The use of U. 8.
Government mailing indioia is authorised in lieu of U. S. Government Bills of Lading when oammooity,
weight, and cubs permit movement within the U. S. Postal Service.
(APPI 7-204.50) (7-4050) (60 Ed.) revised 24 July 1961 (APPI Rev. No. 8)
Deleted ,-, 3ee iCim a B014 on , 40; _ aL_ _-.ate
37. PDiANCIAL HANAOHiffitT REPORT.ihs'! i e
4"Jjjgej Mstal-A (H74.1 a-at-_ _s nsg4"1
38. LIKITATION ON WITHHOLDING or PAYKKRT8. (Sept. 1958) - If more than one clause or Schedule
provision of this contract authorises the temporary withholding of amounts otherwise payable to
the Contractor for supplies delivered or services performed, the total of the amounts so withheld
at any one time shall not exceed the greatest amount which may be withheld under any one such clause
or Schedule provision at that time; provided, that this limitation shall not apply to
(i) withholdings pursuant to any clause relating to wages or hours of employees;
(ii) withholdings not specificallyprovided for by this contract; and
(iii) the recovery of overpayments.
(ASPR7-204.18) (7-104.21) (63 ad.)
39. G ERAL SS&VICES AA{INISTRATIC3 SUPPLY SOURCES. (Jul. 1962)--'s'he Contracting Officer may
issue the Contractor an authorization to utilize General Services Adminis-. stion supply sources
for property to be used in the performance of this contract. Title to all property acquired under
such an authorization shall be in the 0overnment. All property acquired under such an authorisatioh
shall be subject to the provisions of paragraphs (b) through (k) of the clause of this contract
entitled "Government Property," unless this contract is for research and development with a-nonprofit
institution executed on a no-fee basis, in which case paragraphs (o) through (n) shall apply.
(Asps 7-204.28 (5-907) (63 Ed.))
40. MEREST. (MAT 1963) -Notwithstanding any other provision of this contract, unless paid
within 30 days all amounts that become payable by the Contractor to the Government under this
contract (net of any applicable tax credit under the Internal Revenue Code) shall bear interest
at the rate of six percent per annum from the date due until paid and shall be subject to adjustments
as provided by Part 6 of Appendix E of the Armed Services Procurement Regulation, as ineffect
an the date of this contract. *Amounts shall be due upon the earliest one of (i) the date fixed
pursuant to this contract, (ii) the date of the first written demand for payment, consistent with
this contract, (iii) the date of transmittal by the Government to the Contractor of a proposed
supplemental agreement to confirm completed negotiations fixing the amount, or (iv) if this contract
provides for revision of prices, the date of written notice to the Contractor stating the amount
of refund payable in connection with a pricing proposal or in connection with a negotiated pricing
agreement not confirmed by contract supplement.
(ASPS Appendix 3-620 (63 Ed..) revised 23 May 1963 (Rev. No. 1))
41. CCi(PB'PITIC#t IN SUBCtFPRACTD 0. (Apr. 1962)
The Contractor shall select subcontractors (including suppliers) on a competitive basis to the
maximum practical extent consistent with the objectives and requirements of the contract.
ithag od ldeemed to mean "this Basio Agreement" unless
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42. AUDIT AND RECORDS (Nov. 1962)
(a). The Contractor shall maintain books, rooords, documents, and other evidence and accounting
procedures and practices, sufficient to reflect pr erly all direct and indirect costs of whatever
nature claimed to have been incurred and antioipatoe4 to be incurred for performance of this
contract. The foregoing constitute "records for t1~e purpose of this cltause.
(b) The Contractor's plants, or such part thereof as may be engaged in the performance of this
oontraot,, and his records shall be subject at all reasonable times to inspection and audit by, the
Contracting Officer or his authorized representative.
(o) The Contractor shall preserve and make available his records (i) until the expiration of
three years from the date of final payment under this contract, and (ii) for such longer period,
if any, as is required by applicable statute, or by other clauses of this contract, or by (A) or
(B) below.
(A) If this, contract is completely or partially terminated, the records relating to the
work terminated shall be preserved and made available for a period of three years from the date of
any resulting final settlement.
B) Paoords which r.a.late to (i) appeals under the "Disputes" clause of this contract or (ii)
litigation or the settlement of claims arising out of the performance of this contract, shall be
retained until such appeals, litigation, or claims have been disposed of.
(d) (1) The Contractor shall insert the substance of this clause, including the whole of this
paragraph (d), in each subcontract hereunder that is not on a firm fixed-price basis.
(2) The Contractor shall insert the substance of the following clause in each firm fixed-
$rioe subcontract hereunder in excess of $100,000, except those subcontracts covered by subparagraph
3) below.
AUDIT---
(a) For purposes of verifying that cost or pricing data submitted in conjunction with the
negotiation of this contract or any contract change or other modification involvi. an amount in
excess of $100,000 are accurate, complete, and current, the Contracting Officer, or his authorised
representatives, shall-until the expiration of three years from the date of final payment under
this oontraot-?-have the right to examine those books, records, documents, ?M other supporting
data which will permit adequate evaluation of the cost or pricing data submitted, along with the
computations and projections used therein, which were available to the Contractor as of the date of
execution of the Contractor's Certificate of Current Cost or Pricing Data.
(b) The Contractor agrees to insert the substance of this clause including this paragraph
(b) in all subcontracts hereunder in excess of $100,000 unless the price is based on adequate
price competition, established catalog or market prices of commercial items sold in substantial
quantities to the general public, or prices set by law or regulation.
(3) The Contractor shall insert the substance of the following clause in each firm
fixed-price subcontract hereunder in excess of $100,000 where the price is based on adequate price
competition, established catalog or market prices of commercial items sold in substantial quantities
to the general public, or prices set by law or regulation.
AUDIT--PRICE ADJUSRIIENTS
(a) This clause shall become operative only with respect to any change or'other modification
made pursuant to one or more provisions of this contract which involves a pride adjustment in
excess of $100,000, unless the price adjustment is based on adequate price. competition, established
catalog or market prices of commercial items sold in substantial quantities to the general public,
or prices not by law or regulation.
(b) For purposes of verifying that any coat or pricing data submitted in conjunction with a
contract change or other modification involving an amount in excess of $100,000 are accurate,
complete, and current, the Contracting Officer, or his authorized representatives, shall--until the
expiration of three years from the data of final payment under this contract-have the right to
examine those books, records, documents and other supporting data which will permit adequate evaluation
of the coat or pricing data submitted, along with the computations and projections used therein, which
were available to the Contractor as of the data of execution of the Contractor's Certificate of Current
Cost or Pricing Data.
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(e) The Contractor agrees to insert the substance of this clause including this paragraph (a)
in all subcontracts hereunder in excess of $106,000 unless the price is based on adequate price
competition, established catalog or market prices of casmgrcial items sold in substantial quantities
to the general public, or prices set by law or regulation.
(ASPR 7-203.29) (7-104.41(c)) (63 Ed.)
43. PRIC$ REDUCTION FOR DEFECTIVE COST OR PRICING DATA (Mar. 1963)
(a) If the Contracting Officer determines that any price, including profit or fee, negotiated
in connection with this contract was increased by any significant sums because the Contractor, or any
subcontractor in connection with a subcontract covered by (c) below, furnished incomplete.or inaccurate
cost or pricing data or data not current as certified in the Contractor's Certificate of Current '
Cost or Pricing Data, then such price shall be reduced accordingly and the contract shall be modified
in writing to reflect such adjustment.
(b) Fdilure to agree on a reduction shall be a dispute concerning a question of fact within
the meaning of the "Disputes" clause of this contract.
(a) The Contractor agrees to insert the substance of paragraphs (a) and (c) of this clause in
each of his cost-reimbursement type, price redeterminable, or incentive subcontracts hereunder, and
in any other subcontract hereunder in excess of $100,000 unless the price is based on adequate price
competition, established catalog or market prices of commercial items sold in substantial quantities
to the general public, or prices set by law or regulation. In each such excepted subcontract hereunder
which exceeds $100,000, the Contractor shall insert the substance of the following clause.
PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA - PRICE ADJUSTMENTS
(a) This clause shall become operative only with respect to any change or other modification
made pursuant to one or more provisions of this contract which involves a price adjustment in excess
of $100,000, except where the price is based on adequate price competition, established catalog or
market prices of commercial items sold in substantial quantities to the general public, or prices
set by law or regulation. The right to price reduction under this clause shall be limited to such
price adjustments.
(b) If the Contractor determines that any price, including profit or fee, negotiated in
connection with any price adjustment under this contract was increased by any significant sums
because the subcontractor or any of his subcontractors in connection with a subcontract covered by
paragraph (c) below, furnished incomplete or inaccurate coat or pricing data or data not current as
of the date of execution of the subcontractor's certificate of current cost or pricing data, then such
price shall be reduced accordingly and the subcontract shall be modified in writing to reflect such
adjustment.
(c) The subcontractor agrees to insert the substance of this clause in each subcontract
hereunder which exceeds $100,000.
(ASPR 7-203.30 (7-1.04.29(a)) (63 Fd,)
44. SUBCONTRACTOR COST AND PRICING DATA (Mar. 1963)
(a) The Contractor shall require subcontractors hereunder to submit coat or pricing data under
the following circumstances: (i) prior to award of any cost-reimbursement type, incentive, or price
redeterminable subcontract; (ii) prior to the award of any subcontract the price of which is expected
to exceed $100,000; (iii) prior to the pricing of any subcontract change or other modification for
which the price adjustment is expected to exceed $100,000; except in the case of (ii) or (111) where
the price is based on adequate price competition, established catalog or market pricad'of commercial
items sold in substantial' quantities to the general public, or prices set by law or regulation.
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(b) The Contractor shall require subcontractors to certify, in substantially the same form
as that used in the certificate by the Prime Contractor to the Government, that to the best of
their knowledge and belief, the cost and pricing data submitted under (a) above is accurate,
complete, and current as of the date of execution, which date shall be as close as possible to
the data of agreement on the negotiated pride of the subcontract.
(o) The Contractnr shall insert the substanoe of this clause, including this paragraph (o),
in each subcontract hereunder which exceeds $100,000, except where the price thereof is based on
adequate price competition, established catalog or market prices of oommerioel items sold in
substantial quantities to the general public, or prices set by law or regulation. In each such
excepted subcontract hereunder in excess of $100,000 the Contractor shall insert the substance of
the following olauset
(a) Paragraphs (b) and (o) of this clause shall become operative only with respect to any
change or other modification made pursuant to one or more provisions of this oontraot which involves
a price adjustment in excess of $100,000. The requirements of this clause shall be limited to such
price adjustments.
(b) The Contractor shall require subcontractors hereunder to submit cost or pricing data under
the following oiroumatanoess (i) prior to award of any oost-reimbursement type, incentive, or
price redeterminable subcontract; (ii) prior to the award of any subcontractt the price of which is
expected to exceed $100,000; (ii1) prior to the pricing of any subcontract change or other modification
for which the price adjustment is expected to exceed $100,000; except, in the case of (ii) or (iii),
where the price is based on adequate price competition, established catalog or market prices of
commercial items sold in substantial quantities to the general public, or prices set by law or
regulation.
(a) The Contractor shall require subcontractors to certify, in substantially the same form as
that used in the Certificate by the Prime Contractor to the Government, that to the beat of their
knowledge and belief the cost and pricing data submitted under (b) above is accurate, complete,
and current as of the date of the execution, which date shall be as close as possible to the date
of agreement on the negotiated pries of the contract modification.
(d) The Contractor shall insert the subatarwe of this clause including this paragraph (d) in
each subcontract hereunder which exceed $100,000.
(ASPR 7.203.31) (7-104.42(a) (63 IM.)
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45. NEQOTIATED OVIRHELD RATES (Mar. 1963)
(a) Notwithstanding the provisions of the clause of this contract entitled "Allowable
Cost, Fixed Fee, and Payment," lithe allowable indirect costs under this contract shall be
obtained by applying negotiated overhead rates to bases agreed upon by the parties, as
specified below.
(b) The Contractor, as soon as possible but not later than ninety (90) days after the
expiration of each period specified in the Schedule, shall submit to the Contracting Officer
with a copy to the cognizant audit activity a proposed final overhead rate or rates for that
period based on the Contractor's actual cost experience during that period, together with
supporting cost data. Negotiation of final overhead rates by the Contractor and the Contract-
ing Officer shall be undertaken as promptly as practicable after receipt of the Contractor's
proposal.
(o) Allowability of costa and acceptability of cost allocation methods shall be
determined in accordance with Part 2 of Section X4 of **e Armed Services Procurement
Regulation as in effect on the data of this contract and in accordance with Clause
49 of this oontraot.
(d) The results of each negotiation shall be set forth as an amendment to the Basic
Agreement incorporated in this contracts and shall thereby constitute a codification of this
contract, which shall specify (i) the agreed final rates, (ii) the bases to which the
rates apply, and (iii) the periods for which the rates apply,
(e) Pending establishment of final overhead rates for any period, the Contractor shall
be reimbursed either at negotiated provisional rates as provided in the Schedule or at bill-
ing rates acceptable to the Contracting officer, subject to appropriate adjustment when the
final rates for that period are established. To prevent substantial over or under payment,
the provisional or billing rates may, at the request of either party, be revised by mutual
agreement, either retroactively or prospectively. Any such revision of negotiated
provisional rates provided in the Schedule shall be set forth in a modification to this
contract.
(f) Any failure by the parties to agree on any final rate or rates under this clause
shall be considered a dispute concerning a question of fact for decision by the Contracting
Officer within the meaning of the "Disputes" clause of this contract.
(g) Nothing in this clause shall preclude the administrative Contracting Officer
from negotiating final overhead rates for any fractional periods less than six (6) months
necessary to close out a contract as authorized by AFPI 3-705:
*or "Allowable Cost, Incentive Fee and Payment," as applicable to this contract
(ASPR 3-704.1 (63 Ed.) except (d) modified and (g) added.)
The term "this contract" shall be deemed to mean "this Basic Agreement"
unless otherwise provided in the Schedu ea
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46, REFUNDS - In connection with direct charges to the contract, the Contractor
.shall not be required to account or pay over to the Government any unclaimed wages.
salaries or other payments owed to employees, agents, subcontractors or vendors of.
the Contractor by reason of work porformrd undSX' this aontract or any unclaimed wags
or salary deduoti ns or jher accumulations held for the account of any employees or
agents of the Contractor so long as the Contractor is under any liability or obliga-
tion with respect to such wages, salaries, deductions, accumulations or other payments.
47, SUPPL MENTAL PROVISIONS - GOVERMENT PROPERTY - (a) Pursuant to paragraph (i)
of the clause of this contract entitled "Government Property," the Contractor is
hereby authorized to omit from the inventory schedules required by said paragraph
(i) any scrap consisting of faulty castings or forgings, or octttinrt and processing
waste, such as chips, cuttingas, borings, turnings, short ends, of 51eU,: trimming,.
clippings, and remnants, and to dispose of such scrap in accordance with the Con-
tractor's normal practice and account therefor as a part of general overhead or
other reimburseable cost in accordance with the Contraotor?s established accounting
procedures,
(b) It is further understood and agreed. that the pr:,irisions of paragraph (j)
of the clause of this contract entitled "Government Property" shall not prejudice the
right of the Contractor to include a properly allocable portion of such costs under
any other contract with the Government.
480 ADDITIONAL PROVISIONS CONCERNING PAYMENT OF ALLOWABLE COSTS - Payment of
Approved Costs Representing Progress Payments and. Cost Reimbursement to Suboon-
traotorss It is agreed that the provisions of this contract shall not be construed
as requiring the Contractor to submit proof of prior payment of progress payments and
cost reimbursement to subcontractors as a prerequisite to appro%ml for payment of
such costs by the Contracting Officer, provided. the Contractor complies with its
normal business practice of recording subcontractor's invoices or vouchers on its
books and liquidating its liabilities promptly 'hen due,
490 ALLOWABLE COSTS - Without limiting the generality of the clause entitled,
"Allowable, Cost, Fixed Fee, and Payment" or the clause entitled "Allowable Cost,
Incentive Fee, and Payment," as applicable to this contract and Clause 459 Allowable
Items of Cost hereunder shall include `hat shall not be limited to the followings
(i)
a0 There shall be added to the amount of all direct expenditures for which
reimbursement is authorized and paid to the Contractor certain negotiated
provisional rates or billing rates, subject to the provisions of the clause
of this contract entitled "Negotiated Overhead Rates."
b. For purposes of negotiation of final overhead rates under this para-
graph, a proper and reasonable amount of the corporate level general re-'
search costs incurred by the Contractor's General Engineering and Research
laboratories will be included as an allowable expensed
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c. For the purpose :,f negotiation of final overhead rates under this
paragraph, reimbursement shall also be made ureter this contract for the
cost of contractor's independent research and development programs con-
ducted at division and department level, as distinguished from corporate
level general research, to the ex+.en t that such c o:; t Is reasonable and
proper in accordance with paragraph 15= 05.5 of the Armed Services
Procurement Regulation as in effect on the dste of this basic agreement,
The extent to which the coat of such irdepender_t re?;.eAroh and development
programs is allowable may be the F:ul jec ; of advance a, reements between
the contractor and the appropriate negotiating a.ct.ivity of the Defense
Department.
(2) In connection with the work under this contract, the Contractor ahall be
free but not obligated to use any articles customarily produced or assembled by the
Contractor in the regular course of its business, provided that such articles are
billed at a price approved by the Contracting Officer and ttA- Cw'tractor hereby
agrees that the said price shall be equal to or less than the prices charged to
other commercial users in the regular ccurse of its businese. In ails ion, artioles
or services such as computer operation may be prccu rei from other operating
organization components of the Contractor on a fixed-price basis, provided the
Contracting Officer gives prior approval to such procurement.
50, MANAGERIAL PERZONYEL
The phrase "superintendents, or other equivalent reprezentatives, who has
supervision or direction of (i) all or substantially all, of the Contractor's
businessp or (ii) all or substantially all of ?he Contractor's operations at
any one plant or separate location in a:hich this contract is being performed.,
or (iii) a separate and complete major industrial operation in coreiection with
the performance of this contract" appearing in the clauses of this contract
entitled 'Inspection of Supplies and Correct-an of Defec:s", "C;verrment Property",
"Insurance-Liability To Third Persons" and "Inspect. on and Cor:ecticn OC Defects" is
modified to read "or other equivalent repreaenta.i.vea, who has F:Apervision or direction
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of (i) all or substantially all of the Oontraotor's buoineea, or (ii) all or
substantially all of the operations of a group, division, or department of the
Contractor's business wherein the oontraot in being performed, or (iii) all or
substantially all of one or more of the Contraotor's plans or other major industrial
operation within a plant wherein the oontraot is being performed."
NOTES The reference to "(i), (ii) and (iii)" is interohangeablevith (f)(1)(i)
(i)(B) and, (i)(C) in Clause 14 and (1), (2) and. (3) in (o) of Clause .15.. '
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SEf3TION B - SPECIAL PROVISIONS
The olauses not forth in this seotion shall become t of any oontraotual
instrument entered into between the and the Contraotor9
if agreed upon by the said parties orporsted by speoifio referenoe. On y
those olauses speoifioa11y referred to shall beooms a part of snob oontrootus,l
Instrument,
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.. 3.e.1...PATENT RIGHTS. (LICENSE) (Apr. 1962)-(a) As used In this clause, the following terms shall have the
meanings set forth below:
(i) The term "Subject Invention" means any invention, improvement, or discovery (whether or not patentable)
conceived or first actually reduced to practice either-
(A) in the performance of the experimental, developmental, or research work called for or required under this
contract; or
(B) in the performance of any experimental, developmental, or research work relating to the subject matter of this
contract which was done upon an understanding In writing that a contract would be awarded; provided that the term "Sub-
ject Invention" shall not include any invention which is specifically Identified and listed in the Schedule for the purpose of
excluding it from the license granted by this clause.
(other (si an (The r subcontractor whose res onsi~ es w th respect to rights ccruin to a overnment In Inventions arising
under subcontracts are net forth in (g) and (h) below), who, by reason of the nature of his duties to connection with the per-
formance of this contract, would reasonably be expected to make Inventions.
(t!i) The terms "subcontract" and "subcontractor" mean any subcontractor subcontractor of the Contractor, and any
lower-tier subcontract or subcontractor under this contract.
(b) (1) - The Contractor agrees to and does hereby grant to the Government an irrevocable nonexclusive, and royalty-
free license to practice, and cause to bepracticed by or for the United States Government, throughout the world each Subject
Invention in the manufacture, use and disposition accordingto law, of any article or material, and lathe use of any method.
Such license (I) shall be nontransferable, except that the Government shall have the rigght to grant sub licenses to any foreign
government or international organisation specifically for use in programs established by International Agreements for
research, development or production of weapons or equipment for mutual defense and (ti) shall Include the practice of Sub-
ject invention in the manufacture, use, and disposition of any article or material, in the use of any method, or in the perform-
ance of any service acquired by orforthe Government or with funds derived through the Military Assistance Program of the
Government or otherwise through the Government.
(2) With respect to:
(I) any Subject Invention made by other than. Technical Personnel; and
(it) any Subject Invention conceived prior to, but first actually reduced to practice in the course of, any of the
experimental, developmental, or research work specified in (a)(i) above;
the obligation of the Contractor to grant a license as provided In (b)(1) above, to convey title as provided In (d)(ti}(B) or
(d)(iv) below, and to convey foreign rights as provided In (e) below, shall be limited to the extent of the Contractor s rrlight
to grant the same without incurring any obligation to pay royalties or other compensation to others solely. on account of
said grant. Nothing contained in this Patent Rights clause shall be deemed to grant any license under any invention other
than a Subject Invention.
(c) The Contractor shall furnish to the Contracting Officer the following Information and reports concerning Subject
Inventions which reasonably appear to be patentable:
(1) a written disclosure promptly after conception or first actual reduction to practice of each such Invention together
with a written statement specifying whether or not a United States patent application claiming the Invention has been or will
be filed by or on behalf of the Contractor;
(ii) interim reports at least every twelve months, commencing with the date of this contract, each listing all such
Inventions conceived or first actually reduced to practice more than three months prior to the date of the report, and not
listed on a, prior Interim report, or certifying that there are no such unreported Inventions; and
(iii) prior to final settlement of this contract, a final report listing all such Inventions including all those previously
listed in interim reports.
(d) In connection with each Subject Invention referred to In (c)(i) above, the Contractor shall do the following:
(I) if the Contractor specifies that a United States patent application claiming such Invention will be filed, the Con-
tractor shall file or cause to be filed such application In due form and time; however, If the Contractor, after having specified
that such an application would be filed, decides not to file or cause to be filed said application, the Contractor shall so notify
the Contractin Officer at the earliest practicable date and in any event not later than eight months after first publication,
public use or sae.
(11) if the Contractor specifies that a United States patent application claiming such Invention has not been filed and
will not be filed (or having specified that such an application will be filed thereafter notifies the Contracting Officer to the
contrary), the Contractor shall:
(A) inform the Contracting Officer in writing at the earliest practicable date of any publication of such Invention
made by or known to the Contractor or, where applicable, of any contemplated publication by the Contractor, stating the
date and identity of such publication or contemplated publication; and
(B) convey to the Government the Contractor's entire right, title, and interest in such Invention by delivering to
the Contracting Officer upon written request such duly executed Instruments (prepared by the Government) of assignment and
application, and such other papers as are deemed necessary to vest in the Government the Contractor's right, title, and
interest aforesaid, and then httoapplyforand prosecute patent applications covering such Invention throughout the world,
subject, however, to the rights of the Contractor in foreign applications as provided in (e) below, and subject further to the
reservation of. a nonexclusive and royalty-free license to the Contractor (and to his existing and future associated and
affiliated companies, if any, within the corporate structure of which the Contractor is a part) which license shall be assignable
to the successor of that part of the Contractor's business to which such Invention pertains;
(ill) the Contractor shall furnish promptly to the Contracting Officer on request an irrevocable power of attorney to
inspect and make copies of each United States patent application filed by or on behalf of the Contractor covering any such
Invention;
(iv) In the event the Contractor, or those other than the Government deriving rights from the Contractor elects not
to continue prosecution of any such United States patent application filed by or on behalf of the Contractor, the L~ontractor
shall so notify the Contracting Officer not less than sixty days before the expiration of the response period and, upon written
request, deliver to the Contracting officer such duly executed instruments (prepared by the Government) as are deemed
necessary to vest In the Government the Contractor's entire right, title, and Interest In such Invention and the application,
subject to the reservation as specified in (d)(ii) above; and
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(v) the Contractor shall deliver to the Contracting Officer duly executed instruments fully confirmatory of any license
rights hherein agreed to be granted to the Government.
(e) The Contractor, or those other than the Government deriving rights from the Contractor, shall, as between the
parties hereto, have the exclusive right to file applications on Subject Inventions In each foreign country within:
(I) nine months from the date a corresponding United States application is filed;
(ii) six months from the date permission is granted to file foreign applications where such filing had been prohibited
for security reasons: or
(Iii) such longer period as may be approved by the Contracting Officer.
The Contractor shall, upon written request of the Contracting Officer coney to the Government the Contractor's entire
right the and Inarast in eas>:t bras ittvixt$on to tram foreign country in high 9?, applieatlpn has not been filed within
the t e above specified, subject to the reservation of a nonexclusive and royalty- ttree cense to the Contractor together with
the right of the Contractor to grant sublieenees, which license and right shall be assignable to the successor of that part of the
Contractor's business to which the Subject invention pertains.
(f) If the Contractor fails to deliver to the Contracting Officer the Interim reports required by (c)(ii) above, or fails to
furnish the written disclosures for all Subject Inventions required by (c)(i) above shown to be due in accordance with any
interim report delivered under (c)(ii) or otherwise known to be unreported, there shall be withheld from payment until the
Contractor shall have corrected such failures either ten (10) percent of the amount of this contract, as from time to time
amended, or five thousand dollars ($6,00), whichever is less. After payment of eIghty (110) percent of'the amount of this
contract, as from time to time amended payment shall be withheld until a reserve of either ten (10) percent of such amount
or five thousand dollars ($5,000), whilever Is less, shall have been set aside, such reserve or balance thereof to be retained
until the Contractor shall have furnished to the Contracting Officer:
(I) the final report required by (c)(iii) above;
(ti) written disclosures for all Subject Inventions required by (c)(i) above which are shown to be due in accordance
with Interim reports delivered under (c)(if) above, or in accordance with such final reports, or are otherwise known to be
unreported; and
(ill) the information as to any subcontractor required by (h) below.
The which
not
exceed
ten this o tract or fie tount housan dollars $6, 00), whicheverispless,gand no amount shall be withheld) unperce der this arag aphht f f
when the amount specified by this paragraph (f) is being withheld under other provisions of this contract. The witlarho ding
of any amount or subsequent payment thereof to the Contractor shall not be construed as a waiver of any rights accruing to
the Government under this contract. This paragraph (f) shall not be construed as requiring the Contractor to withhold any
amounts from a subcontractor to enforce compliance with the patent provisions of a subcontract.
(g) The Contractor shall, unless otherwise authorized by the Contracting Officer as hereafter provided, Include a
patent rights clause containing all the provisions of this Patent Rights Clause except provision (f) in any subcontract here-
under of three thousand dollars ($3,000) or more having experimental, developmental, or research work as one of Its
purposes. In the event of refusal by a subcontractor to accept such a patent rights clause, the Contractor (I) shall promptly
submit a written report to the Contracting Officer setting forth the subcontractor's reasons for such refusal and other per-
tinent Information which may expedite disposition of the matter, and (ii) shall not proceed with the subcontract without the
written authorization of the Contracting Officer. Reports, instruments, and other information required to be furnished by a
subcontractor to the Contracting Officer under the provisions of such a patent rights clause in a subcontract hereunder may
upon mutual consent of the Contractor and the subcontractor (or by direction of the Contracting Officer) be furnished to the,
Contractor for transmission to the Contracting Officer.
(h) The Contractor shall, at the earliest practicable date, notify the Contracting Officer in writing of any subcontract
containing one or more patent rights clauses; furnish the Contracting Officer a copy of each of such clauses; and notify the
Contracting Officer when such subcontract is completed. Iris understood that with respect to any subcontract clause granting
rights to the Government In Subject Inventions, the Government is a third party beneficiary; and the Contractor hereby
assigns to the Government all the rights that the Contractor would have to enforce the subcontractor's obligations for the
benefit of the Government with respect to Subject Inventions. If there are no subcontracts containing patent rights clauses, a
negative report is required. The Contractor shall not be obligated to enforce the agreements of any subcontractor hereunder
relating to the obligations of the subcontractor to the Government In regard to Subject Inventions. The Assistance Progroamror othec g rwise through the United States Government may contracthfr funds operty or ervi through withrepectct
to which the vendor may be liable to the Contractor forroyalties for the use of a Subject Invention on account of such a con-
tract. The Contractor further recognizes that It Is the policy of the Government not to pay In connection with its contracts,
or to allow to be paid in connection with contracts made with funds derived through the Military Assistance Program or
otherwise through the United States Government, charges for use of patents In which the Government holds a royalty free
license In recognition of this policy, the Contractor agrees to participate In and make appropriate arrangements for the
exclusion of such charge, from such contracts or for the refund of amounts received by the Contractor with respect to any
such charges not so excluded.
ASPR 9-107.2(b)(. ._)
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Ba?..... PATENT RIGHTS. (LICENSE)(SPACE) (Apr. 1962)--(a) As used in this clause, the following terms shall have
the meanings set forth below:
(I) The term "Subject Invention" means any invention, improvement, or discovery (whether or not patentable) con-
ceived or first actually reduced to practice either-
(A) in the performance of the experimental, developmental, or research work called for or required under this
contract; or
(B) in the performance of any experimental, developmental, or research work relating to the subject matter of this
contract which was done upon an understanding in writing that a contract would be awarded; provided that the term "Sub-
ject Invention" shall not include any invention which is specifically identified and listed In the Schedule for the purpose of
excluding it from the license granted by this clause.
(ii The term "Technical Personnel" means any person employed by or working under contract with the Contractor
(other than a subcontractor whose responsibilities with respect to rights accruing to the Government In inventions arising
under subcontracts are set forth in (g) and (h) below), who, by reason of the nature of his duties in connection with the per-
formance of this contract, would reasonably be expected to make inventions.
(tit) The terms "subcontract" and "subcontractor" mean any subcontractor subcontractor of the Contractor, and any
lower-tier subcontract or subcontractor under this contract.
(b) (1) The Contractor agrees to and does hereby grant to the Government an irrevocable nonexclusive, and royalty-
free license to practice, and cause to be practiced by or for the United States Government, throughout the world, each Subject
Invention in the manufacture, use, anddisposition accordingto law, of any article or material, and in the use of any method.
Such license (1) shall be nontransferable, except that the Government shall have (a) the right to grant sublicenses to any
foreign government or international organization specifically for use in programs established by International Agreements
for research, development or production of weapons or equipment for mutual defense and (b) the right to grant sublicenses
to others, under such terms and conditions as may be prescribed, for the practice of any Subject Invention throughout the
world in the design, development, manufacture, operation, maintenance and testing of communications satellite systems, and
of equipment, components, and ground tracking, transmitting and receiving facilities therefor, and (ii) shall include the
practice of Subject Invention in the manufacture, use, and disposition of any article or material, In the use of any method or
in the performance of any service acquired by or for the Government or with funds derived through the Military Assistance
Program of the Government or otherwise through the Government.
(2) With respect to:
(I) any Subject Invention made by other than Technical Personnel; and
(ii) any Subject Invention conceived prior to. but first actually reduced to practice In the course of, any of the
experimental, developmental, or research work specified In (a)(1) above;
the obligation of the Contractor to grant a license as provided in (b)(1) above, to convey title as provided in (d)(ii~(B) or
(d)(iv) below, and to convey foreign rights as provided in (e) below, shall be limited to the extent of the Contractor a rriight
to grant the same without incurring any obligation to pay royalties or other compensation to others solely on account of
said grant. Nothing contained In this Patent Rights clause shall be deemed to grant any license under any invention other
than a Subject Invention.
(c) The Contractor shall furnish to the Contracting Officer the following information and reports concerning Subject
Inventions which reasonably appear to be patentable:
(1) a written disclosure promptly after conception or first actual reduction to practice of each such Invention together
with a written statement specifying whether or not a United States patent application claiming the Invention has been or will
,111
the
Inventions conceivedror first actually-reduced to practice more than three months prior to the date of the report, and not
listed on a prior interim report, or certifying that there are no such unreported Inventions; and
(ill) :prior to final settlement of this contract, a final report listing all such Inventions including all those previously
listed in interim reports.
(d) In connection with each Subject Invention referred to In (c)(I) above, the Contractor shall do the following:
(1) if the Contractor specifies that a United States patent application claiming such Invention will be filed, the Con-
tractor shall file or cause to be filed such application in due form and time; however, if the Contractor, after having specified
that such an application would be filed, decides not to file or cause to be filed said application, the Contractor shall so notify
the Contracting Officer at the earliest practicable date and In any event not later than eight months after first publication,
public use or sale.
(ii) if the Contractor specifies that a United States patent application claiming such Invention has not been flied and
will not be filed (or having specified that such an application will be filed thereafter notifies the Contracting Officer to the
contrary), the Contractor shall:
(A) Inform the Contracting Officer in writing at the earliest practicable date of any publication of such Invention
made by or known to the Contractor or, where applicable, of any contemplated publication by the Contractor, stating the
date and identity of such publication or contemplated publication; and
(B) convey to the Government the Contractor's entire right, title, and interest in such Invention by delivering to
the Contracting Officer upon written request such duly executed instruments (prepared by the Government) of assignment and
application, and such other papers as are deemed necessary to vest in the Government the Contractor's right, title, and
Interest aforesaid, and the right to apply for and prosecute patent applications covering such Invention throughout the world,
subject, however, to the rights of the Contractor in foreign applications as provided in (e) below, and subject further to the
reservation of a nonexclusive and royalty-free license to the Contractor (and to his existing and future associated and
affiliated companies, if any, within the corporate structure of which the Contractor is a part) which license shall be assignable
to the successor of that part of the Contractor's business to which such Invention pertains;
((iii) the Contractor shall furnish promptly to the Contracting Officer on request an irrevocable power of attorney to
inspect and make copies of each United States patent application filed by or on behalf of the Contractor covering any such
Invention;
(iv) in the event the Contractor, or those other than the Government deriving rights from the Contractor, elects not
to continue prosecution: of any such United States patent application filed by or on behalf of the Contractor, the Contractor
shall so notify the Contracting Officer not less than sixty days before the expiration of the response period and, upon written
request, deliver to the Contracting Officer such duly executed instruments (prepared by the Government) as are deemed
necessary to vest In the Government the Contractor's entire right, title, and interest in such Invention and the application,
subject to the reservation as specified In (d)(li) above; and
ASPR 9-107.2(b) and 9-107-8 Jill=
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Cv) the Contractor shall deliver to the Contracting Officer duly executed Instruments fully confirmatory of any license
rightsereln agreed to be granted to the Government.
(e) The Contractor, or those other than the Government deriving rights from the Contractor, shall, as between the
parties hereto, have the exclusive right to file applications on Subject Inventions in each foreign country within:
(I) nine months from the date a corresponding United States application is filed;
(Ii) six months from the date permission is granted to file foreign applications where such filing had been prohibited
for security reasons; or
(ill) such longer period as may be approved by the Contracting Officer.
The Contractor shall, upon written request of the Contracting Officer convey to the Government the Contractor's entire
right, title, and Interest In each Subject invention in each foreign country in which an application has not been filed within
the time above specified, subject to the reservation of a nonexclusive and royalty-free license to the Contractor together with
theright of the Contractor to grant sublicenses, which license and right shall be assignable to the successor of that part of the
Contractor's business to which the Subject Invention pertains.
(f) If the Contractor falls to deliver to the Contracting Officer the Interim reports required by c)(ii)-above, or falls to
furnish the written disclosures for all Subject Inventions required by (c)(i) above shown to be due in accordance with any
Interim report delivered under (c)(il) or otherwise known to be unreported, there shall be withheld from payment until the
Contractor shall have corrected such failures either ten (10) percent of the amount of this contract, as from time to time
amended, or five thousand dollars ($5,000), whichever is less. After payment of eighty (80) percent of the amount of this
contract, as from time to time amended payment shallbe withheld until a reserve of either ten (10) percent of such amount
or five thousand dollars ($5,000), whichever is less, shall have been set aside, such reserve or balance thereof to be retained
until the Contractor shall have furnished to the Contracting Officer:
(I) the final report required by (c)(iIl) above;
(ii) written disclosures for all Subject Inventions required by (c)(t) above which are shown to be due in accordance
with interim reports delivered under (c)(il) above, or in accordance with such final reports, or are otherwise known to be
unreported; and
(ill) the Information as to any subcontractor required by (h) below.
The maximum amount which may be withheld under this paragraph (f) shall not exceed ten (10) percent ofthe amount of
this contract or five thousand dollars ($5,000), whichever Is less, and no amount shall be withheld under this paragraph (f)
when the amount specified by this paragraph (f) is being withheld under other provisions of this contract. The withholding
of any amount or subsequent payment thereof to the Contractor shall not be construed as a waiver of any rights accruing to
the Government under this contract. This paragraph (f) shall not be construed as requiring the Contractor to withhold any
amounts from a subcontractor to enforce compliance with the patent provisions of a subcontract.
(g) The Contractor shall, unless otherwise authorized by the Contracting Officer as hereafter provided, include a
patent rights clause containing all the provisions of this Patent Rights Clause except provision (f) in any subcontract here-
under of three thousand dollars ($3,000) or more having experimental, developmental, or research work as one of its
purposes. In the event of refusal by a subcontractor to accept such a patent rights clause, the Contractor (1) shall promptly
submit a written report to the Contracting Officer setting forth the subcontractor's reasons for such refusal and other per-
tinent Information which may expedite disposition of the matter, and (ii) shall not proceed with the subcontract without the
written authorization of the Contracting Officer. Reports, Instruments, and other information required to be furnished by a
subcontractor to the Contracting Officer under the provisions of such a patent rights clause In a subcontract hereunder may
upon mutual consent of the Contractor and the subcontractor (or by direction of the Contracting Officer) be furnished to the,
Contractor for transmission to the Contracting Officer.
(h) The Contractor shall, at the earliest-practicable date, notify the Contracting Officer In writing of any subcontract
containing one or more patent rights clauses; furnish the Contracting Officer a copy of each of such clauses; and notify the
Contracting Officer when such subcontract Is completed. It to understood that with respect to any subcontract clause granting
rights to the Government in Subject Inventions, the Government Is a third party beneficiary; and the Contractor hereby
assigns to the Government all the rights that the Contractor would have to enforce the subcontractor's obligations for the
benefit of the Government with respect to Subject Inventions. If there are no subcontracts containing patent rights clauses, a
negative report Is required. The Contractor shall not be obligated to enforce the agreements of any subcontractor hereunder
relating to the obligations of the subcontractor to the Government in regard to Subject Inventions.
(i) The Contractor recognizes that the Government, or a foreign government with funds derived through the Military
Assistance Program or otherwise through the United States Government, may contract for property or services with respect
to which the vendor may be liable to the Contractor for royalties for the use of a Subject Invention on account of such a con-
tract. The Contractor further recognizes that It Is the policy of the Government not to pay in connection with its contracts,
or to allow to be paid to connection with contracts made with funds derived through the Military Assistance Program or
otherwise through the United States Government, charges for use of patents in which the Government holds a royalty-free
license. In recognition of this policy, the Contractor agrees to participate in and make appropriate arrangements for the
exclusion of such charges from such contracts or for the refund of amounts received by the Contractor with respect to any
such charges not so excluded.
ASPR 9-107.2(b) (63 Eli,) except paragraph (b)(1) modified in accordance with
ASPR 9-107,8 and shall be used only in accordance with instructions in
ASPR 9-107?8,
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Boo' AUTHORIZATION AND CONSENT (Jan. 1961)
(a) The Government hereby gives its authorization and consent for all, use and
manufacture of any invention described in and covered by a patent of the United
States in the performance of this contract or any part hereof or any amendment
hereto or any subcontract hereunder (including any lower-tier subcontract).
(b) If this clause is made applicable to any item or items of'"^'a contract,
or to an entire contract, the provisions of the clause of Section A hereof entitled
"Authorization and Consent" are hereby made inapplicable to any such item or items
or in the case of applicability to an entire contract, to any such entire contract.
(ASPR 9-?10202 (63 Ed.) except (b) added and. such clause shall be used only in
accordance with the requirements thereof',)
.B.5 EXCESS PROFIT (June 1957)
The Contractor agrees that, unless otherwise provided by larw9 this
shall be subject to all the provisions of 10 U.S.C. 2382 and 730 be
deemed to contain all the agreements required by those sections; provided howeTo .,
'that this clause shall not be construed to enlarge or extend by contract the
obligations imposed by those sections? The Contractor agrees to insert in the
subcontracts specified in those section$ either the provisions of this clause
or the provisions required 'by those sections,
(ASPR 7-104.11(a) (63 Ed.))
B.6 EXCESS PROFIT (Jun. 1957)
The Secretary having designated the supplies called for by this contract
to be scientific equipment used for communication, target detection, navigation,
or fire control, the provisions of 10 U.S.C. 2382 and 7300 are not applicable
to thle contract..
(ASPR 7-104.11(c) (63 Ed..) )
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.. ............B,.'+? ...............DATA (Feb. 1962)
(a) The term "Subject Data" as used herein includes writings, sound recordings, pictorial reproduotiens,
drawings or other graphical representations, and works of any similar nature (whether or not copyrighted) which
are specified to be delivered under this contract. The term does not include financial reports, cost analyses, and
other Information incidental to contract administration.
(b) The Contractor agrees to and does hereby grant to the Government, and to its officers, agents, and em-
ployees acting within the scope of their official duties, a royalty-free, nonexclusive and Irrevocable license through-
out the world for Government purposes to publish, translate, reproduce, deliver, perform, dispose of, and to au-
thorize others so to do, all Subject Data now or hereafter covered by copyright.
(c) The Contractor shall not include in the Subject Data any copyrighted matter, without the written ap-
proval of the Oontraeting Officer, unless he provides the Government with the written permission of the copy-
rightowner for the Government to use such copyrighted matter in "the manner provided In paragraph (b) above.
(d) The Contractor shall report to the Contracting Officer, promptly and in reasonable written detail, each
notice or claim of copyright infringement received by the Contractor with respect to all Subject Data delivered
under this contract.
(e) Nothing contained in this clause shall imply a license to the Government under any patent or be con-
strued as affecting the scope of any license or other right otherwise granted to the Government under any patent.
(f) Unless otherwise limited below, the Govermnent may duplicate, use, and disclose in any manner and for
any purpose whatsoever, and have others so do, all Subject Data delivered under this contract.
(g) The Contractor recognizes that the Government, or a foreign government with funds derived through
the Mutual Security Program or otherwise through the United States Government, may contract for property
or services with respect to which the vendor may be liable to the Contractor for charges for the use of Subject
Data on account of such a contract. The Contractor further recognizes that it is the policy of the Government not
to pay in connection with its contracts, or to allow to be paid in connection with contracts made with funds de-
rived through the Mutual Security Program or otherwise through the United States Government, charges for
data which the Government has a right to use and disclose to others, yr which is in the public domain, or with
respect to which the Government has been placed in possession without restrictions upon its use and disclosure to
others. This policy does not apply to reasonable reproduction, handling mailing, and similar administrative costs
incident to the furnishing of such data. In recognition of this policy, the Contractor agrees to participate In and
make appropriate arrangements for the exclusion of such charges from such contracts or for the refund of
amounts received by the Oontractor with respect to any such charges not so excluded.
(h) Notwithstanding any provisions of this contract concerning inspection and acceptance, the Government
shall have the right at any time to modify, remove, obliterate or ignore any marking not authorized by the terms
of this contract on any piece of Subject Data furnished under this contract.
(I) Notwithstanding any Tables or Specifications included or incorporated in the contract by reference, "" ro-
prietary data" need not be furnished unless suitably identified in th@ Schedule of the contract as being required.
For the purpose of this clause, "proprietary data" means data providing information concerning the details of a
Cogtractor's secrets of manufacture, such as may be contained in but not limited -to his manufacturing methods-or
pprocesses, treatment and chemical composition of materials, plant layout and tooling, to the extent that such in-
iformation is not disclosed by inspection or analysis of the product itself and to the extent that the Contractor has
protected such information from unrestricted use by others. (Oct. 1958)
(ASPR 9-203'.1, 9-203.2) (63 Mi.) and shall be u,#.' c y In &oaZordoince with the
requirements thereof*
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........... 8?$.._ ...................DATA (Feb. 1962)
(a) The term "Subject Data" as used herein Includes writings, sound recordings, pictorial reproductions,
ddrawings or other graphical representations, and works of any similar -nature (whether or not copyr g )
are specified to be delivered under this contract. The term does not include financial reports, cost analyses, and
other information incidental to contract administration.
(b) The Contractor agrees to and does hereby grant to the Government, and to its officers, agents, and em-
ployees acting within the scope of their official duties, a royalty-free, nonexclusive and irrevocable license through-
out the world for Government purposes to publish, translate, reproduce, deliver, perform, dispose of, and to au-
thorize others so to do, all Subject Data now or hereafter covered by copyright.
(c) The Contractor shall not include in the Subject Data any copyrighted matter, without the written ap-
proval of the Contracting Officer, unless he provides the Government with the written permission of the copy-
right owner for the Government to use such copyrighted matter in the manner provided in paragraph (b) above.
(d) The Contractor shall report to the Contracting Officer, promptly and in reasonable written detail, each
notice or claim of copyright infringement received by the Contractor with respect to all Subject Data delivered
under this contract.
(e) Nothing contained in this clause shall imply a license to the Government under any patent or be con-
strued as affecting the scope of any license or other right otherwise granted to the Government under any patent.
contract.y manner and for
purpsUnless e otherwise limited
have others so do, all Subject Data delivered under this disclose
any
(g) The Contractor recognizes that the Government, or a foreign government with funds derived through the
Mutual Security Program or otherwise through the United States Government, may contract f or property or
services with respect to which the vendor may be liable to the Contractor for charges for the use of Subject Data
on account of such a contract. The Contractor further recognizes that it is the policy of the Government not to
pay in connection with its contracts, or to allow to be paid in connection with contracts made with funds derived
through the Mutual Security Program or otherwise through the United States Government, charges for data
which the Government has a right to use and disclose to others, or which is in the public domain, or with respect
to which the Government has been placed in possession without restrictions upon its use and disclosure to others.
This policy does not apply to reasonable reproduction, handling, mailing, and similar administrative costs incident
to the furnishing of such data. In recognition of this policy, the Contractor agrees to participate in and make
appropriate arrangements for the exclusion of such charges from such contracts or for the refund of amounts
received by the Contractor with respect to any such charges not so excluded.
(h) Notwithstanding any provisions of this contract concerning inspection and acceptance, the Government
shall have the right at any time to modify, remove, obliterate or ignore any marking not authorized by the terms
of this contract on any piece of Subject Data furnished under this contract.
(i) Data need not be furnished for standard commercial items or services which are normally or have been
sold or offered to the public commercially by any supplier and which. Are incorporated as component parts in or to
be used with the product or process being developed if in lieu thereof identification of source and characteristics
(including performance specifications, when necessary) sufficient to enable the Government to procure the part or
an adequate substitute, are furnished; and further, "proprietary data" need not be furnished for other items which
were developed at private expense and previously sold or offered for sale, including minor modifications thereof,
which are incorporated as component parts in or to he used with the product or process being developed if in
lieu thereof the Contractor shall identify such other items and that "proprietary data" pertaining thereto which is
necessary to enable reproduction or manufacture of the item or performance of the process. For the purpose of
this clause "proprietary data" means data providing information concerning the details of a Contractors secrets of
manufacture, such as may be contained in but not limited to its manufacturing methods or processes, treatment and
chemical composition of materials, plant layout and tooling, to the extent that such information is not disclosed by
inspection or analysis of the product itself and to the exte=nt that the Contractor has protected such information
from unrestricted use by others. (Oct. 1958) pppp ,D
(ASPR. 9-203.1, 9-203.4)063 Ed.) and aha,l:I be ?i ,e '.v,.,y .."LTA 4~~rFOcor1A'rtoe with the
requirements there of ,
373(657)-5176
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$09
..........................................DATA (Feb. 1962)
(a) The term "Subject Data" as used herein includes writi nggs, sound recordings, pictorial reproductions,
drawings or other graphical representations, and works of any dmiiar nature (whether or not copyrighted) which
are specified -to be delivered under this contract. The term does not include financial reports, cost analyses, and
other information incidental to contract administration.
(b) The Contractor agrees to and does hereby grant to the Government, and to its officers, agents, and em-
ployees actin within the scope of their official duties, a royalty-free, nonexclusive and irrevocable license through-
out the world for Government purposes to publish, translate, reproduce, deliver, perform, dispose of, and to au-
thorize others so to do, all Subject Data now or -hereafter covered by copyright.
(c) The Contractor shall' not include in the Subject Data any copyrightel mutter, without the written ap-
proval of the Contracting Officer, unless he provides the Government with the written permission of the copy-
right owner for the Government to use, such copyrighted matter in the manner provided in paragraph (b) above.
(d) The Contractor shall report to the Contracting Officer, promptly and in reasonable written detail, each
notice or claim of copyright infringement received by the Contractor with respect to all Subject Data delivered
under this contract.
(e)' Nothing contained in this clause shall imply a license to the Government under any patent or be con-
strued as affecting the scope of any license or other right otherwise granted to the Government under any patent.
(f) -Unless otherwise limited below, the Government may duplicate, use, and disclose In any manner and for
any purpose whatsoever, and have others so do, all Subject Data delivered under this contract.
(g) The Contractor recognizes that the Government, or a foreign government with funds derived through the
Mutual Security Program or otherwise through the United States Government, may contract f o r property or
services with respect to which the vendor may be liable to the Contractor for charges for the use of Subject Data
on account of such a contract. The Contractor further recognizes that it is the policy of the Government not to
pay in connection with its contracts, or to allow to be paid in connection with contracts made with funds derived
.through the Mutual Security Program or otherwise through the United States Government, charges for data
which the Government has a right to use and disclose to others, or which is in the public domain, or with respect
to which the Government has been placed in oesession without restrictions upon its use and disclosure to others.
This policy does not apply to reasonable reproduction, handling, mailing, and similar administrative costs incident
to the furnishing of such data. In recocnition of this policy the Contractor agrees to participate in and make
appropriate arrangements for the exclusion of such charges from such contracts or for the refund of amounts
received by the Contractor with respect to any such charges not so excluded.
(h) Notwithstanding any provisions of this contract concerning inspection and acceptance, the Government
shall have the right at any time to modify, remove obliterate or ignore any marking not authorized by the terms
of this contract on any piece of Subject Data furnished under this contract.
(i) Notwithstanding any Tables or Specifications included or incorporated in the contract by reference, "pro-
prietary data" need not be furnished unless suitably identified in the Schedule of the contract as being required.
For the purpose of this clause, "proprietary data" means data providing information concerning the details of a
Contractor's secrets of manufacture, such as may be contained in but not limited to his manufacturing methods or
processes, treatment and chemical composition of materials, plant layout and tooling, to the extent that such
hiformation is not disclosed by inspection or analysis of the product itself and to the extent that the Contractor
has protected such information from unrestricted use by others. (Oct. 1958)
(j) Viat portion of the Subject Data delivered under this contract which Is identified in the Schedule as being
subject to limitations shall not be released outside the Government, nor be duplicated, used, or disclosed in whole
or in part for procurement or manufacturing purposes (other than for manufacture required in connection with
repair or overhaul where an item is not procurable commercially so as to enable the timely performance of the
overhaul or repair work; provided, when Data is released by the Government to a Contractor for such purposes,
the release shall be made subject to the limitation of this clause; provided further, such Data shall not be used for
manufacture or procurement of spare parts for stocks), without permission of the Contractor, if the following
legend is marked on each piece of Data so limited either in its entirety or only partially as to its content:
Furnished under United States Government Contract No ........................... and only those portions hereof
which are marked (for example, by circling, underscoring or otherwise) and indicated as being subject to
this legend shall not be released outside the Government (except to foreign governments, subject to these
same limitations), nor be disclosed, used, or duplicated, for procurement or manufacturing purposes, ex-
cept as otherwise authorized by contract without the permission of ................... .. This
legend shall be marked on any reproduction hereof in whole or in part -
Provided, that such Data may be delivered -to foreign governments as the national interest of the United States may
require, subject to the limitations specified in this paragraph. The Contractor shall not impose limitations on the
_use of any piece of Data, or any portion thereof, which the Contractor has previously delivered to the Government
without limitation. (Jun. 1959)
(ASPR -9-203.1, $-208.2, 9-203.3)8fd . shall be used o iy in 'aoooj lane with the
requirements thereof,
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b~iO BL W=
It-is contemplated by the part-'.as hereto that the Government will bail (in
addition to any property listed in this contract as to be "furnished" by the
Government) to the Contractor thy: items listed elsewhere herein for use in
connection with the performance of this contracts and that an appropriate written
agreement of bailment will be entered into by and between the parties hereto
for that purpose. In the event of delay or failure of the Government to bei1.
such propertys as aforesaid., the provisions of the clause of this, contract
entitled "Government-Furnished Property" or "Government Property" (whichever
is applicable) relating to failure or delay in the furnishing of propertys
shall be applicable.
(?sPI13-550 (a))
B.J.1 BLUNT
It is anticipated that the Goverment may bail to the Contractor ouch
Government property of the categories specified elsewhere herein as may from
time to time be deemed by the Contracting Officer to be necessary in the
interest of the Government to so furnish., provided$ however, the effeet of
such bailment upon the fee
shall be reflected by adjusting the c - -fee (
??a } ~ in accordance with the procedures set forth in the Changes
clause of this contracts and the contract amended accordingly by supplemental
agreement' prior to the payment of Contractor's final invoice under this
contract. Any property bailed pursuant to this parbgraph 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.
(JFPI 13-550 (b))
B012 BL NT (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 deemd by the Contracting Officer to be necessary in the interest of
the Government to so furnish, provided,, however., the effect of such bailment
shall: be considered in any adjustments in amounts finally payable to the
Contractor at .thee time of settlement of Contractor's termination 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 & 'separate
bailment agreement or agreements and this contract shall not be construed
as effecting or committing. the Government to the bailment of such property.
(/1FPI 13-550 W)
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II iACILI^IM
The Contractor has indicated that, to the best of its knowledge and belief,
it will require no capital facilities such as land, buildinta, or general purpose
machine tools to perform this contract in addition to these which it now owes or
which it is now renting or using other than such additional capital facilities as
may be otherwise specifically listed in the particular contract. The Contractor
shall not be required, however, to pu chase'or otherwise acquire at its own expense
any such additional capital facilities wnich may be later determined to be necessary
for the performance of this contract. In the event such additional facilities are
determined by either the Government or the Contractor to be necessary for such
performance, the Government may furnish or authorize the Contractor to acquire such
facilities by purchase, rental or otherwise. If the Government authorizes the
Contractor to acquire facilities pursuant to the above costs of the acquisition
thereof shall be reimbursable under the conditions and to the extent specified
in the authorization therefor, which authorization shall be in the form of a
supplemental agreement hereto or in the form of a separate facilities contract.
Any disagreement concerning a question of fact arising under this clause shall be
considered a dispute within the meaning of the clause of this contract entitled
"Disputes"I provided, however, that nothing in this clause shall relieve the
Contractor from performing any obligation which it has contractually assumed,
B.14 FINANCIAL MANAGEMENT REPORT. (NOV. 1963)
(a) On or before the thirtieth day of the month following the end of each
calendar quarter until such time as the uninvoiced dollar amount of this contract
is less than $25,000, the Contractor hall submit to the Contracting Officer,
on DD Form 1097. dated 1 November 1959, or other authorized form calling for
substantially the same information, furnished by the Contracting Officer, a
report of the financial status of the contract, as of the end of such quarter,
The Contracting Officer may extend the time for filing said report for a period
not to exceed ten working days.
(b) Notwithstanding the provisions of paragraph (a) hereof, if the contractor
has reason to believe that the actual cost: of performance of this contract may
exceed the estimated costs contained herein, the contractor shall submit items
one (1) through fourteen (14) of the report set forth in paragraph (a) above
once each month, within ten (i0) days following the close of the month being
reported. The contractor shall furnish in such form as may be requested by the
contracting officer additional information and documentation as may be reasora.bly
required to verify the extent and causes under which the actual costs may exceed
the estimated cost of performing the contract.
(AFPI 7-204 52 (60 Ed.) revised 28 Feb. 1964 (Rev. No, 39))
3(657)-5174
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B,15 FLIGHT RISKS (NOV. 1961)
(a) Notwithstanding any other'provision of this contract, and particularly subparagraph (f)(1)
of the Government Property clause and paragraph (o) of the Insurance-Liability to Third Persons clause,
the Contractor shall not (i) be relieved of liability for, damage to, or loss or destruction of,
aircraft sustained during flight, or (ii) be reimbursed for liabilities to third persons for loss
of or damage to property, or for death or bodily injury,,which are caused by aircraft during flight,
unless the flight crew members have previously been approved in writing by the APSC Contract Management
Region Commander or his designee.
(b) For the purposes of this clause$
(i) Unless otherwise specifically provided in the Schedule, the term "aircraft"
means any aircraft, whether furnished by the Contractor under this contract
(either before or after acceptance by the Government) or furnished by the
Government to the Contractor under this contract, including all Government
,Property placed or installed therein or attached thereto; provided, however,
that such aircraft and property are not covered by a separate bailment agroemont.
(ii) The term "flight" means any flight demonstration, flight test, taxi toot, or other
flight, made in the performance of this contract, or for the purpose of safeguarding
the aircraft, or previously approved in writing by the Contracting Officer. As
to land based aircraft, "flight" shall commence with the taxi roll from a flight line
and continue until the aircraft has completed the taxi roll to a flight line; as to
sea planes, "flight" shall oacamence with the launching from a ramp and continue ,until
the aircraft has completed its landing run and is beached at a ramp; as to heli~oopters,
"flight" shall commence upon engagement of the rotors for the purpose of take-off and
continue until the aircraft has returned to the ground and rotors are disengaged;
and for vertical take-off aircraft, "flight" shall commence upon dicer sent from
any launching platform or device and continue until the aircraft has been re-engaged
to any launching platform or device.
(iii) The term "flight crew members" means the pilot, the oo-pilot and, unless otherwise
specifically provided in the Schedule, the flight engineer, navigator, bombardier-
navigator, and defensive systems operator, when required, or assigned to their
respective crew positions, to conduct any flight on behalf of the Contractor.
(o) If any aircraft is damaged, lost, or destroyed during flight, and if the amount of such)
damage, loss, or destruction exceeds one hundred thousand dollars ($100,000) or twenty percent 2
of the estimated cost (exclusive of any fee) of this contract, whichever is less, and if the Contractor
is not liable for the damage, lose, or destruction pursuant to the "Government Property" clause of
this contract together with paragraph (a) above, than an equitable adjustment for any resulting
repair, restoration, or replacement that is required under this contract shall be made (i) in the
estimated cost, delivery schedule, or both, and (ii) in the amount of any fee to be paid to the
0ontractor, and the contract.shall be modified in writing accordingly; provided, in determining the
amount of adjustment in the fee that is equitable, any fault of the Contractor, his employees,
or any subcontractor, which materially contributed to the damage, loss, or destruction shall be
taken into consideration. Failure to agree on any adjustment shall be a dispute concerning a
question of fact within the meaning of the "Disputes" clause of this contract.
(ASPR 10-504 (63 Ed.) and is authorized for use in accordance with the instructions therein)
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B,16 UU Cr oov E 4W1' FACILITIM W i xo oai oB aaSES
(a) The Contractor is rithoriesd to use' in the porfo wm of this oottrsot, the
Oowmsent-o+aard facilities provided to it undior laoiliiiss Contracts listed .luvhers heroine
in offset on the dais of this mcctraot, on a no-chap basis.
(b) Me following subcontractors having Ooroisusut-onwd facilities provuted under the
lioilitiss Oontreats sot forth below, in effect on the dais of this oantraot, as iuthorised to
vuboaataaot shall so provides
euboontraotor Facilities Contract lmber
(Listed elsewhere herein)
ftboontraot lien
(o) If the Contractor enters into other suboontraots with subcontractors who have Oov.r .nt-
owned facilities provided to than under Ysoilities Contracts which provide that no-charge use
may be authorised, the Contracting Officer may authorize the use of such facilities an a no-charge
basis, provided (i) he deisrainss that such us* will not give the-subcontractor 4 favored
competitive position, and (ii) this contract is ansnded to reflect adequate oo sidsraticn to the
Government for the urns of such facilities an a no-.barge basis. Such subcontxeoto "hall specifically
authorise the no-ohatlge use, and require the manual approval of the Oantraatiud Officer. Ito
UMndient to this eeatraot will be required, am provided in (ii) above, it the dontraotis Offioer
dstersinss that an elimination of chards for nce.of much facilities will of itself result in
an adequate dnereased coot to the Government under this cantraot.
(d) If the Oovsrlsaeat-avaod facilities provided to the Oantractor or asp subcontractor
hereunder an s no-charge basis are inoreased or dsoreao.d or do not rmm.in wiailable during
the perfcxmnoe of this eantroot, or if arg chanas in made in the term and ooaditioas under
thick they are ads available, such equitable adjustacnisas may be appropriate will b? ssde
in the terse of this contract, unless ouch inoreaso or deoreae. was omtasplatsd in the
establishment of the prior of this contract or a suubcontract.
(e) The Contractor agrees that it will not directly or indirectly, tbron,;h overhead
charges or otherwise, include in the price of this contract, or seek reimbounsoent under this.
contract for, s rental charge paid by the Omiraotar for the use an other contracts of the
facilities referred to herein. Oar subcontract hereunder thioh awthorisss the subocatraotor
to use Government facilities on a no-charge hernia shall contain a provision to *e some s"eot
as. this pirsgra h We
(AM 7402)
IOTar the use of this claws is predicated Upon the approval of the facilities contract issuing
offing as required by APPI 13-401(d)(4).
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X017. USA Cr OOV> T PACILPPIM CA A Ho-c;d lABQN Bes7S
(a) The Contractor is authorized s use, in the Pthelperf9o mince ofathis oo t act, wherethe
hexein~
Government--caned facilities provided
in effect an the date of this Contract, on a no-charge basis.
(b) It the Contractor enter* into auboant sots with suboontreatore who have Cover tr
omnmd facilities provided to then under Facilities Contracts which provide that no-ohargm use. may
be authorisedy the Contracting Officer may authorize the use of such facilities on a no-charge
basis, provided (i) he determines that such use will not give the subcontractor a favored
competitive position, and (ii) this contract is assailed to reflect adequate consideration to
the Government for the use of such facilities as a no-charge basis. Such enboontraots shall
specifically authorize the no-charge use, and require the mamlal approval of the Contracting
Officer. Ito onamdment to this contract will be required, as provided in (ii) above; if the
Contrasting Officer determines that an elimination of charge for use of such facilities will
of itself result in an adequate decreased cast to the Government under this contract.
(o) It the Cover nt-own d. facilities provided to the Contractor or any.' subcontractor
hereunder to A no-charge basis are increased or decreased or do not remain ,available during the
perfortmance of this contract, or if aa>y ahan a is wade in the terms and conditions under which
they are trade available, such equitable adjusowntsas may be appropriate will be made in the
terms this cont~reot, unless such increase or decrease was contemplated in the eatablisbmamt
at the price of this contract or a subcontract.
(d) The Co-iraotor that it vi13. not directly or indirectly, through overhead,
charges or otherwise, include in the price of this contract, or seek reimbursement under
this contract for, any rental charga paid by the Contractor for the use on other contracts
at the facilities referred to herein. Arty subooatraot heieundor which authorises the
subcontractor to use Government facilities an a no-charge basis shall contain a provision to
the ansi offset as this parag ph (d).
(IPPI 7-4052 except (i) paragraph (b) is deletad (ii) the word "other" is ceitted from
the first line of paragraph (o) and (iii) shall, be used only in aocardeaoo with the
raViretaenta of the first eante co thereof).
109121 The use of this clause predicated (u ttm approval of the facilities contract issuing
oftioe as required by
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B.18 MODIFICATION OF PAB1tGBAPHS (d) OF CLAIJSB B.16 An (a) OP CLAUSE B-17
If this clause is incorporated in this oontract paragraph (d) of Clause 8.16.
or Paragraph (o) of Clause 8.17 is amended to read as followsa
"If the Government-owned facilities provided to the Contractor
or any subcontractor hereunder on a no-charge cis are increased or
decreased or do not remain available during the performance of this
oontraot, or if any change is made in the terms and conditions under
which they are made available, .10
(i) Such equitable adjustment as may be appropriate will be made
in the terms of this contract,, including performance dates or
contract price or both, unless such increase or degrease was
contemplated in the establishment of the price of this contract or
a subcontract. In the negotiation of the aforementioned equitable
adjustment consideration will be given to but not limited to the
followings
(A) All appropriate additional costs resulting from the decrease
or unavailability of Oovernment-owned facilities, which are
authorized pursuant to Paragraph (a) of this olauaa or resulting.
from the changes in terms and conditions under which such
facilities are made available. These will inolwde, but not
be limited to, rentals, depreciation, taxes, maintenance costs
and costs attributable to relooatin and rearrangement to the
extent such costs are properly a73 ocable to this contract and
not reimbursable.under the facility contract AF3 (657)-10 31..
(ii) If the facilities made available to the Contractor pursuant to
Paragraph (a) are denied to the Contaaots,r, the Contractor will not
be required to buy substitute facilities to perform this oontraot."
NOTES This Clause is authorized for use only when this Contract authorizes use of
Government-owned Facilities at Johnson City,, New York, under Contract A133(657)-10231.
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$019 CIw o8s TO MACS-Olt-RN PROG1W (JUL. 1960)
The Contractor agrees to perform this contract in accordance with the
"make-or-buy" program attached to this contract except as hereinafter provided.
If the Contractor desires to change the "make-or-buy" program, he shall notify
the Contracting Officer in writing of the proposed change reasonably in advance
and shall submit justification in sufficient detail to permit evaluation of the
proposed change,. Changes in the place of performance of work on any "make"
item in the "make-or-buy" program are subject to this requirement. With respect
to items deferred at the time of negotiation of this contract for later additions
to the."make-or-buy" program, the Contractor shall notify the Contracting Officer
of each proposed addition at the earliest possible time, together with justifica-
tion in sufficient detail to permit evaluation. The Contractor shall not, without
the written consent of the Contracting Officer, make changes or additions?4o the
program$ provided, that in his discretion, the Contracting Officer may ratify
in writing any change 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.
(ASPIC 3.. 0201 (63 Td.) and is authorized for use in accordance with the instructions
therein.
B *20 SALTY AND ACCIDWT PRRVRNTIClt' (JUN. 1959)
In performing any'work under this contract on premises which are under
the direct control of the Qovernment, 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 oontraot*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 Oovernment 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.
(AFPY 7-4047 (60 Ed.) and is authorized foruse in accordance with the instructions
therein.)
*The term "this contract" shall be deemed to mean "this Basic Agreement"
unless otherwise provided in the Saheduleo
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B021 a rr PR7k:ADTI09s FM DA8affi07s MAT i*i (AUG. 1962)
(a) For purposes of this olauso, dangerous materials shall be deemed to include amcmunition,
explosives, acids, fuels, propellants, hazardous ohomioals, Lad other material of an explosive,
corrosive, flammable, combustible, tozio, radio-aotive, exidising nature, or so magnetic as to
affect aircraft navigation systems or of an otherwise dangerous nature.
(b) Tea, Contractor shall comply with the applicable portions of AF Technical Orders 110-1-6,
4281-1-6, 0O-i1CO 3; AP kennels 32-6, 71-4, 75-21 AV Regulation 86-6; and Manufacturing Chemists'
Association, Inc., Manual L-l, entitled "Warni.ng labels," in addition to local, state and federal
ordinances, law, and codas, inolu&i g latest Changes, TO, ions and/or supplements thereto, in
affect on the date of this contract, in the development, tasting, storage, manufacture, p okagW,
transportation, handling, disposal, or use of gawrzmsat or contractor owned dangerous materials,
which may affect the performance of this contract, whether such performance is on premises controlled
by the Oovernaent or otherwise. The Contractor shall comply with the requirement for shippers
certificate in accordance with AN 71-4 if shipment of dangerous materials in to be sade by military
air or to an aerial port of sabarlaaticn. The Contractor shall also comply with any additional
safety measures required by the Contracting officer with regard to such dangerous materials; provided,
that if compliance with such additional safety measures results in a material increase in the oast
or time of performance of the contract, an equitable adtuatment will be made in accordance with
the alums hereof entitled "Changes".
(a) The Contractor agreea to insert in every subcontract hereunder which may involve the
development, testing, storage, manufacture, pecking, transporting, handling, disposal or use of
dangerous materials, as defined in paragraph (a) above, the substance of the foregoing paragraphs
(a) and (b).
(AFPI 7-4048 (60 ]ii.) issued 30 August 1262 (AFPI Rev. No. 21) and is authorised for use in
accordance with the instructions therein).
B o22 SOTICR 4F RADIOLCTIP3 KATMIAl3
(a) Contractor shall advise the Contracting Cffioer in writing, or such office as the
Contracting Officer may designate, prior to the delivery of any it.. or completion of any service
called for under this contract if such item or may item upon which service is performed contaiam
radioactive material which requires specific licensing under the Atomic err Act of 1954,
as set forth as of the date of this contract in the Code of Federal Regulations, Title 20, Parts 30,
40 and 70. Such notice shall specify the part or parts of the items which contain radioactive
materials, a description of such material., the nano 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 use. (BOB No. 38-BM-3) Such
notification shall be made to the Contracting Officer with -sufficient lead time in ardor that the
Air Force may complete licensing requirements prior to delivery and at such time that delivery dates
will not be affeoted.
(b) All items, parts, or subassemblies which contain radioactive materials, and all containers
in which such item, parts, or subassemblies are delivered to the Government, shall be clearly marked
and labeled as required by Military Specification NIL-K-1959W o
(AFPI 7-4053 (60 lei.) revised 24 July 1961 (APPI Rev. No. 8) and is authorised for use in accordance
with the instructions therein).
*The term "this contract" shall be deemed to mean "this Basic Agreement"
.unless otherwise provided in the Schedule.
46 ^33 (657)-5176
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,DELETED-?--
Be23
f allowing ri
ently reimbm ae you for all proper expenditures made by you herea l
U) 300
Ant of auoh approved coats representing program ?, +uonta to
4 * N * 9 .'4 sn #. s n mut~r?m+trmeta. ororided. the l payment by the
t _of the oosis incurred
fiver of v
ing Of
B.24
mall bus ' es erne sttal i n z xa ou 12
uoh su c0 ?` ators who are sma 1 as
s
4 oost? epresenting coat reisi?weenent to sub-
;tracts, provided that such payments by the
jd cootso
approval; b
accomplished upon cortification t
2ara and invoices for materials, tools, labor pri
purpose of detera-iping the amounts payable to the ato:
ems of Coat will be determined by the Contracting Officer in
nt of coat p lpciples set forth in Part 2 of Section XV of the Axe
event Regulation. 'In no event shall the total reimbursement made under
SOVIET-CONTROLLED AREAS (Apr. 1962)
(a) The Contractor shall not acquire for use in the performance of this contract any
supplies or services originating from sources within Soviet-controllred areas, as listed
in the Schedule of this contract, or transported from or through Hong Kong or Hacao, with-
out the written approval of the Contracting Officer.
(b) The Contractor agrees to insert the provisions of this clause,
subparagraph (b) and the Soviet-controlled areas listed in the Schedule,
hereunder.
including this
in all subcontracts
(ASPR 7-203.25 or 7-403.8 (63 Ed.) and is authorized for use in accordance with the
instructions in ASPR 6-403)
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B.25 Ar alraBls COST, weawn FSB, AND PAY1tElT (KA8. 2964)
(a) (1). For the performance of this contract, the Oovernment shall pay to the Contractor--^-
(i) the cost thereof (hereinafter referred to as "allowable oast") determiner! by
the Contracting Officer to be allowable in accordance with -
(A) Part 2 of Ssolion XP of the Armed Services Procurement 8sgulation as in
effect an the date of this contract and
(8) the term of this ocantraoti and
(ii) a fee determined as provided in this contract.
(2) The target coat and target fee of this contract are set forth in the Schedule and
shall be subject to adjustment in accordance with (h) and (i) below. An used thrcu&out this
contract the term ----
(1) "target cost" means the estimated cost of this contract initially negotiated,
adjusted in accordance with (h) below{ and
(ii) "target. fee" means the foe which was initially negotiated on the assumption
that this contract would be-portortiaed for a cwt equal to the estimated cost
of this contract initially neggotiated, adjusted in accordance with (b) below.
(b) Once each month (or at more frequent int?raals, if approved by the Contracting Officer),
the Contractor my submit to an authorised representative of the Contracting Officer, in
such form and reasonable detail as ouch representative may require, an invoice or vou1her
supported by a statement of cost incurred by the Contractor in the perform-roe of this omtraot
end olaided to constitute allowable cost.
(a) Promptly after receipt of each invoice or voucher and statement of cost, the Government
shall, except as otherwise provided in this contract, subject to the provisions of (d) below,
make payment thereon as approved by the Omtraoting Officer. Payment of tee shall be made to
the Contractor as specified in the Bohedulei provided, however, that whenever in'the opinion
of the Contracting Officer, the Contractor's performanos or cost then incurred indicates that
target fee will not be achieved, payment of fee will be based an such lesser tee, not lower
than the minivan fee, as the Contracting Officer may determine to be appropriate) and provided
further, that after payment of eighty-five per Dent (85%) of the applicable fee, further payment
on account of the fee shall be withhold until a reserve at either fifteen per cent (i5) of the
applicable fee, or one hundred throusand dollars (8100,000), whichever is leas, shall have been
set aside. Keen the Contracting Officer has ordered that fee payments be reduced in accordance
with the foregoing, he may increase the basis for pay ant town amount not to exceed the target
fee upon an affirmative shoring by the Contractor that such action is justified and equitable.
(d) At any time or times prior to final payment under this contract, the Contracting officer
may have the invoices or vouchers and statemarhts of cost audited. Each payment theretofore made'
shall be subject to reduction for amounts Included in the related invoice or voucher which are
found by the Contracting Officer, an the, basis of such audit, not to constitute allowable cost.
Any payment may be reduced for overpaym se or increased for undsrpeymenta, an preceding invoices
or vouchers.
(e) On receipt and approval of the invoice or voucher designated by the Contractor an the
"completion invoice" or "oagpletion voucher" and upon oamplii.oe by the Contractor with- all
the provisions of this contract (including without?liaitation, the proviaiona relating to
patents and the provisions of (f below), the Government shall promptly pgy to the Contractor
any balance of allowable poet, and any part of the fee, which ban been withheld pursuant to o) above
or otherwise not paid to the Contractor. The completion invoice cr voucher shall be submitted
by the Contractor prompt y following o4mplotion of the work under this contract but in no event
later than one (1) year tar such loogor period an the Contracting Officer may in his disoriticn
approve in writing) from the date of such ocVletim.
(f) The Contractor agrees that any refunds, rebates, credits, or other amounts (including any
interest thereon) accruing to or received by the Contractor or any assignee under this contract
shall be paid by the Contractor to tht Oovorment to the extent that they are propar]y allocable
to costs fof which the Contractor has been reimbursed by the. Ocvirmment under this contract,
Reasonable expenses incurred by the Contractor for ibs purpose of woouring such refunds, rebates,
credits, or other amounts shall be allowable coats hereunder when approved by the Contracting
Officer. Prior to final payment under this ocntraot, the Contractor and each assigns under -
this contract whose assignment is in effoot at the ties of 'final payment under this contract
shall execute and deliver
* The term "this contract" shall be deemed to mean "th Basic Agreemgnt"
unless otherwise provided in the Schedle. 53(657)-5;76 25X1A
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(i) an assignment to the GoverrnLmrt, in -form swd euastance satisfactory to the
Contracting Officer, or refuMo, retates, '-rsdits, or other amounts (inalading
any interest thereon) properly'aLlocable ter coots for which the Contractor has
"boon reimbursed by the Cov acnt u cr trs contasct; and
(ii) a release discbargIng the Gsxve'r.?smont, its officoro, agents, and employees -tram all
liabilities, obligations, and claims ari.sl.ng oiat, of or under this contract, subject
only to the following exceptions
(A) specified claims in stated a ounta or in cetinated amounts where the amounts
are not susceptible of exact stattrieat by the Contractor;
(B) claims, together with rearaorakalo wgrnoGa Incidental thereto, based on liabilities- of the Contractor to third par;ins arising out -of, the performance
of this contract; provided, that such c.3aZ~ are not inwn to the Contractor
on the date of the execution of the releaJ3; and. provided further, that the
Contractor gives notice of such claims in writing to the Contracting Officer
not more than six (6) yoaxs after the date of the release or the date of any
notice to the Contractor that the Coti a:at in prepared to make final payment,
whichever is earlier; and.
(C) alAims for reimbursomenL of costs (a' or than expenses of the-Contractor by
reason of his indemnification of the Go+r n et t against patent liability), including
reasonable rrpeneeo incidan al thorctq, i currxd. by the Contractor under the
provisions of this contract relating to pmteate.
Payments under the assignment and the claim czceptcd Arm the release shall be subject to
adjustment by reason of the adjustment of fee- in acoor:aioo with (i) below.
J g) Any cost incurred by the Contractor uaricw the tevw of this contract which would constitute
allowable cost under the provisions of this elan a caU be included in determining the amount
payable under this contract, notwithstanding any prrvari::1o contained in the specifications or
other documents incorporated in this contract by ;.refer-=ce,, designating services to be performed
ok materials to be furnished by the Contractor at his swam or without cost to the Governaasnt.
(h) When the work under this contract (i i..clndrar ruinLles or cervices which are ordered ?
separately under, or otherwise added to, this co treat) In inertased or decreased by contract
modification, appropriate adjustments in the ,argot coat and target fee shall be net forth in
an amendment or supplemental agreement to this contr n.
(i) The fee payable hereunder shall be the target fee incased by * cents for every
dollar by which the total allowable cost is leans. than, the target coat or decreased by *
cents for. every dollar by which the total all +eabl.e coot exceeds the target cast. In no event
shall the fee be greater than * percent, nor lose than *. -peroet, of the target cost=.
and- within these limits ouch fee shall be subject to a4 junta, by reason .opt inareage or
decrease of total allowable cost, on account of payto under.the aseit required by
(f)(i) above, and claims excepted from the release re' .ed by (f)(ii) above.
(j) (In the event this contract calla for spare parts or other supplies and servioeg which ague
to be ordered under a provisioning docent or Govo nrant option, the following shall be applicable)r
Compensation for supplies (inaludi r, npre Far` ) and se vices which are tb be furnished
under this contract pursuant to a ,rovisiouing d,,c'~ at or Oovdzumcnt option shall be detergined
in accordance with the provisions of this ciasss notwithstanding any inconsistent provision in
such provisioning document or Government option.
(k) In the event this clause applies to this contrac`, Clause A.4 ebalt be inapplicable
unless otherwise provided in this contract.
*set forth elsewhere in this contract.
(ABPR.7-203.4(b) (63 id.) revised 6 March 194 (1ev. No. 4) kept (k) added and shall be used
only-in accordance'with the requirerreata of ASPIC 3-45.4)
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B.213 MODIFICATION at ci usz A. 6 ta)(4)
clause A. 6(a)(1) is hereby deleted and the following substituted in lieu
thereof ,
"(4) Wept for documentary evidence delivered to the Oayrernment pursuant to sub-
paragraph (3) above, the Contractor shall preserve and make available his records (i) for
a period of three years from the date of payment of the voucher or invoice submitted by
the Contractor after the completion of the work performed during any separate period of
perforaanoe established by this contract or by amendment ors lspsntal agreuraat,
without
rep" w few or subasgnsai ypeNidt sf petfaaraeaaoa, and ti) lac such l.oc "
as is required by applicable statute, by any other clause at this contract,
or by (A), (`B), or (C) below.
(A) If this contract is completely or partially terminated, the records
relating to the work terminated shall be preserved and made available for a period of
three years from the date of any resulting final settlement.
(B) Records which relate to (i) appeals under the Disputes clause of this
contract, (ii) litigation or the settlement of claims arising out of the performance
of this contraot, or (iii) cost and expenses of this contract as to which exception
has been taken by the Comptroller General or any at his duly authorised representatives,
shall be retained by the Contractor until such appeals, litigation, claims, or exceptions
have been disposed of.
(0) If the Contractor plans to destroy any records sooner than three years
after the date of the voucher or invoice to be submitted after the completion of the
mark performed during the total of the periods of performance established by this contract
and all amendments and supplemental agreements thereto, which voucher or invoice shall
be designated "completion voucher" or "completion invoice", he shall give written notice
to the Contracting Officer and to the Comptroller General of the United States, specify.-
ing any records which he plans to destroy after the expiration of 90 days from the receipt
at such notice, and shall retain any records which either the Contracting Officer or
the Cavtroller Ocusral, by written notice within 90 days after receipt of the C traot.r'n
t , requires to be retained for a further-specified period at timee. (MAT 1960)
(ASPR 7-203.7(b) (63 Id.) and shall be used only in accordance with the requirements
thereof).
B,29 I) PSOTION (FE3. 1959)
The Government, through any authorised representatives, has the right at an
reasonable times,, to inspect, or otherviae evaluate the work performed or being
perfarrod hereunder and the premises in which it is being performed. If any inspection,
or evaluation is made by the Government on the premises of the Contractor or a sub-
contractor, the Contractor shall provide and shall require his subcontractors to
provide all reasonable facilities and assistance for the safety and convenience of
the Government representatives in the performance, of their duties. All inspections
and evaluations shall be performed in such a manner as will not unduly delay the work.
(ASPR 7-02.5(b) and shall be used only in aooaardance with the requirements thereof.
If this clause is applicable to this contract it shall be doomed to be substituted
for the clause set forth under D-4 entitled "Inspection and Correction of Defects.")
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B030 LIMITATION (5'P? GO T'S OBLIGATI (Ju'N. 1963)
(1) It is estimated that the total cost to the (Jovomnent, inclusive of any fee, for the
performance of'this contract will not exceed the estimated cost and fee set forth in the schedule and
the Contractor agrees to use its beat efforts to perform the woeiic specified in the schedule and all
obligations under thin contract within such eotiotod cost. The fee for complete performance of this
oontraot is specified in the sohecule. If at cry time, the Contractor has reason to believe that the
total coat to the Covernment, inclusive of any fee, for the performance of this oontraot will be
eubetantially g giber or lens than the amounts thereof than amt forth in the Schedule to date, the
Contractor shall notify the Contracting Officer in writing to that effect, giving its reviged eetiaste
of the total cost to,the Government for the performance of this contract.
(2) The sum presently available for payment en4 allotted to this contract, the items covered
thereby and the period of performance which it in estimated the allotted amount will cover, are
specified in the schedule. It is anticipated, that from time to time adtifionm1 funds will be allotted
to this contract up to the full esi ated coat, including any fee. When additional funds are allotted
from time to time for continued performance ofth? sror!k, the parties shall agree as to the applicable
estimated period of sontraot performance which shall be covered by such funds =d the contrast
schedule amended accordingly. The contractor agrees to perform or have performed work on this
oOntract up to the point at which, in the event of termination of this contract for the convenience
of the Goverment pursuant to the clause of this contract entitled "Termination", the total
.amount paid and payable by the Government pursuant to any sottlemert, indludingcost and fee under
Paragraph (e) of such clause would, in the exercise of reaaonsble Judgment by the Contractor,
approximate the total amount at the time allotted to this contract. The Contractor shall not be
obligated to continue performance of the work beyond such point.
(3) The Government shall not be obligated to reimburse the Contractor for costs incurred
(including amounts payable in respect to subcontracts and termination settlement cots) and to
pay any fee to which the Contractor may be entitled, in excess of the total amount from time
to time allotted to this contract. aowover, when and to the extent that the total amount allottead
to this contract has been increased, any ooc.s incurred by the Contractor and any fee to which the
Contractor may be entitled, prior to the increase and in excess of the amount previously allotted,
shall be allowable to the same extent as if such costs had been incurred and fee earned after such
increase in amount allotted.
(4) In the event funds allotted are considered by the Contractor to be inadequate to cover
the work to be performed for the period not forth in the schedule, the Contractor shall notify the
Contracting Officer in writing when within the next thirty (30) days the work will reach a point,
at_ which, in the event of termination of this contract for the convenience of the Government
pursuant to the olance of this contract entitled "Termination," the total amount paid and payable
by the Government pursuant to a settlement including cost and foe under Paragraph (e) of such
clause will approximate eighty-five percent (85%) of the total amount thou allotted to the contract.
The notice shall state the estimated date when such point will be ranched and the estimated amount
of additional funds required to continua performance for the period not forth in the schedule,
The Contractor ball, thi ty (30) days prior to the end of the period epegified in the schedule,
ad Viso, the Contracting Officer in writing an to the estimated amount of additional funds which
.will be required, on the basis of the obligation for performance in aooordanoe with Paragraph (2)
of this elance, for the timely performance of t work under the contract for such further period
as maybe apacifisek in the eoheeedule or otherwise agreed to by the parties. If, after such notification,
additional funds axe not allotted, by the and of the period sot forth in the sahodule, or an agreed
date in substitution therefdr, the Contracting Officer will, upon written rea_uest of the Contractor,
terminate this contract on such date, or on a date to be specified in such request on which the
Contractor, in the exercise of his reasonable judg nt, estimates that he will have discharged, his
obligation to perform hereunder in accordance with Paragraph (2) of this clause, whichever is later,
pursuant to the provisions of the cruse of this contract entitled "Termination."
52
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(5) When additional funds are allotted from time to time for continued performance of the
work under this contrast, the parties shall agree as to the !kpjp
livable period of contract performance
which shall be covered by such funds, and the provisions of "12 E C 6'1' this clause
shall apply in like manner to such additional allotted funds and substituted date rte
grid the contract shall be amended accordingly.
(6) The Government may at any time prior to termination allot additional funds for this oontraot,
and, with the consent of the Contractor, after notice of termination, may rescind such termination,
in whole or in part, and allot additional funds for this contract.
(7) Ia the event that sufficient amounts are not allotted to this contract to allow completion
of the work contemplated by his contract, the Contractor shall be entitled, subject to the limits.tion
of Paragraph (3) of his clause, to a percentage of the tee met forth in the sohodu'le equivalent
to the percentage of completion of the work contemplated by this contract.
(8) Nothing in this clause shall affect the right of the Covernuent to terminate this contract
pursuant to the clause of this contract entitled "Termination."
(9) For the purposes of this clause the allotment or allotments specified in the schedule
shall not be decreased without the consent of the Contractor.
(10) This clause shall be applicable and the clause of this contract entitled "Limitation
of Cost* inapplicable until such time as an amount equal to the total estimated cost and fee not
forth in the sohedule is allotted to this contract, and thereafter the clause of this contract
entitled "Idaitation of Cost" shall be applicable and this clsuse~5 pplicable.
Rxce . modified
AFPI 7-4054(b) revised 31 July 1963 (APPI Rev. No. 32)?W is authorised for use 6m1 in accordance
with the requirements of APPI 53-316.
8.31 XODIrICATICK CF CLiM 88TITL8'o "x tniTILY CP oov w vs CBLIOiTICP
The clause entitled "Limitation of oovernment's (Ybligation" is amended by changing
the words and figures "thirty (30) days" and eishty-five percent 85%)" appearing in
paragraph (4) to "sixty (60) days" and "seventy-five percent (7;9)"?
(Authorised tV AYPI 744054(b)(4) revised 31 July 1963 (APPI Bev. Ito. 32) (6o Md.))
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B.32 SMALL BUSI2JESS SUBCONTBACTINO PBOORPJI (NOV. 1963)
(a) The Contractor agrees to establish and conduct a small business subcontracting
program which will enable small business concerns to be considered fairly.as subcontractors
and suppliers undter this contract. In this connection, the Contractor shall
(1) -Designate a liaison officer who will (i) maintain liaison with the Oovernmnf
on small business matters, (ii) supervise compliance with the "Utilization of Small Business
Concerns" clause, and (iii) administer the Contractor's "8ma11 Business Subcontracting
Program."
(2) Provide adequate and timely consideration of the potentialities of small
business concerns in all "make-or-buy" decisions.
(3) Assure that small business oonoarns will have an equitable opportun1ty to
compete for subcontracts, particularly by arranging solicitations, time for the prepapation
of bids, quantities, specifications, and delivery schedules so as to facilitate the
participation of small business concerns. Whe'e the Contractor's lists of potential
bmall business suboontraotore are excessively long, reasonable effort shall be made to
give all such small business concerns an opportunity to compete over a period of time.
(4) Maintain records showing (i) whather each prospective subcontractor is a
small business concern, (ii) procedures which have been adopted to comply with the policies
set forth in this clause, and (iii) with respect to the letting of any subcontract including
purohas? orders) exceeding $10,000, information substantially as followst
(A) Whether the award went to large or small business.
(:B) Whether less than tree or more than two small business concerns were
solicited.
(0) The reason for non-solicitation of small business if such was the case.
(D) The reason for small business failure to receive the award if such was the
case when small business was solicited.
The records maintained in accordance with (iii) above may be in such form as the individual
Contractor may determine, and the information shall be summarized quarterly and submitted
by the purchasing department of each individual plant or division to the Contractor's
oognisant small business liaison officer. Such quarterly summaries will be considered to
be management records only and need not be submitted routinely to the 0overnment= however,
records maintained pursuant to this clause will be kept available for review.
(5) Notify the Contracting Officer before soliciting bide or quotations on air
subcontract (including purchase orders) in excess of $10,000 if (1) no small business
concern is to be solicited, and (ii) the Contracting Officer's consent to the subcontract
(or ratification) is required by a "Subcontracts" clause in this contract. Such notice
will state the Contractor's reasons for non-zolioitation of small business concerns, and
will be given as early in the procurement cycle as possible no that the Contracting
Officer may give the Small Business Administration timely notice to permit SBA a
reasonable period to suggest potentially qualified small business concerns through
the Contracting Officer. In no case will the procurement action be held up when
to do so would, in the Contractor's judgment, delay performance under the contract.
(6) Include the "Utilization of Small Business Concerns" clause in subcontracts
which offer substantial small business subcontracting opportunities.
(7) Cooperate with the Contracting Officer in any studies and surveys of the
Contractor's subcontracting procedures and practices that the Contracting Officer
may from time to time conduct.
(8) Submit DD Form 1140-1 each month in accordance with instructions provided
on the form, except that where the Contractor elects to report on a corporate rather than
a plant basis, he may submit his reports to the Military Department having the responsibility
for the Small Business Suboontractina Prograu at the corporate headquarters. The reporting
requirements of this subparagraph (8) do not apply to Small Business Contractors or Small
Business sub-oontraotors.
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(b) A "small business concern" is a concern that meets the pertinent criteria
established by the BBA and not forth in paragraph 1-701 of the used Services Procurement
Regulation,
(a) The Contractor agrees that, in the event he fails to comply with his contractual
obligations concerning the small business subcontracting program, this contract may be
to minted, in whole or in part, for default.
(d) The Contractor further agrees to insert, in any subcontract hereunder which
is in excess of 2500,000 and which contains the "Utilisation of all Business Concerns"
clause, provisions which shall conform substantially to the language of this clause,
inoluding this paragraph (d), and to notify the Contracting Officer of the names of such
suboontraotors except that the subcontractor will submit the DD Form 1140-1 repon
to the Military Department having the responsibility for reviewing its Small Business
Subcontracting Program. (A subcontractor say request advice from the nearest military
purchasing or contract administration activity as to the military Department to which
he shosld submit his reports.)
(ASPS 7-104.22, 7-204.19, 7-303.11 or 7-403.13 revised 15 Nov. 1963 (Rev. Yo. 3) and is
authorised for use in accordance with the instructions in A8P8 1 707.3(b)).
2.33 LASM SMPM urn SUDOCBT8AoTr10 FROTHY (,S3. 1962)
(a) The Contractor agrees to establish and conduct a program which will encourage
labor surplus area concerns to compete for subcontracts within their capabilities. In
this connection, the Contractor shall -
(1) Designate a liaison officer who will (i) maintain liaison with duly authorised
representatives of the Ooverr:ment on labor surplus area matters, (ii) supervise compliance
with the 'utilisation of Concerns in Labor Surplus Arsajeolsuse, and (iii) administer
the Contractor's labor Surplus Area Subcontracting Progreal
(2) Provide adequate and timely consideration of the potentialities of labor surplus
area concerns in all "sake-c buy" deoisions{
(3) Assure that labor surplus area concerns will have an equitable opportunity to
oampete for subcontracts, particularly by arranging solicitations, tins for the preparation
of bids, quantities, speoifioations, and delivery schedules so as to facilitate the
participation of labor surplus area ocnoernsj
(4) Maintain records showing procedures which have been adopted to ova;
with the policies set forth in this olsuset and
(5) Include the "Utilisation of Concerns in Labor Surplus Areas" clause in
subcontracts which offer substantial labor surplus area subcontracting opportunities.
(b) A "labor surplus area concern" is a concern which will perform, or cause to be
performed, a substantial proportion of any contract awarded to it in "Areas of Substantial
and Persistent Labor Surplus" or in "Areas of Substantial Labor Surplus," as designated
by the Department of Labor. A concern shall be deemed to perform a substantial proportion
of a contract in a labor surplus area it the costs that the concern will incur on account
of manufaoturing or production (by itself or its first-tier subcontractors) in such areas
aaoant to more than 50 perosnt of the price of such contract.
(o) The Contractor further agrees, with respect to any subcontract hereunder which
is in excess of $500,900 and which contains the clause entitled "Utilisation of Concerns
in Labor Surplus Areas," that he will insert provisions in the subcontract which will
conform substantially to the language of this clause, including this paragraph (o), and
that he will furnish the names of such subcontractors to the Contracting Officer.
(AsP8 7-104.38, 7-204.29, 7-303.25 or 7-403.24 (63 Mi.) and is authorised for ass in
accordance with the instructions in ASPR 1-805.3(b)).
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B-34 MATERIAL INSPECTION AND RECEIVING REPORT (JUL. 1958)
At the time of each delivery under this contract the Contractor shall prepare and furnish
to the Government, in the manner and to the pxtsnt required'by the Contracting Officer, a Katerial
Inspection and Receiving Report (DD Form 250 or comparable form). The Government shall furnish
the required forms. to the Contractor upon request.
(ASPR 7-105-7 r 7-205.6 (63 Ed.) and is authorized for use in accordance with the instn otions
in APPI 7-105-7)
B-35 IURNISRIBG CP PRICING INFORKATICN (JAN. 1961)
(a) The Contractor shall furnish to the Accounting and Finance Officer as soon as practical,
but in no event later than the time of delivery of the respective item, either on the DD Form 250,
"Katerial Inspection and Receiving Report," or in such other written form as may be convenient
for the contractor, its best estimate of the price of any item (excluding complete aircraft and
missiles, drawings, blueprints, technical reports, experimental, developmental or research items),
for which a billing, estimated or firm price data not appear in the contract, or has not otherwise
been furnished to the Contracting Officer prior to the time of delivery.
(b) The Contractor shall further indicate on each DD Form 250, submitted under this contract,
the price of Government Furnished Katerial (OFfI) that is included in each line item covered by
the respeotive DD Form 250.
(o) The Contractor shall include in each of its auboontraota under which deliveries may
be made directly to the Government,a provision whereby such subcontractor agrees to prepare and
distribute the DD Form 250 and to enter thereon the price of all (VA included in items so
delivered to the Government. The price of OFK will be made available to the contractor or
subcontractor by the Government, as the case may be. No delivery shall be delayed by reason
of the failure of the Government to furnish such prices to this contractor or subcontractor.
The contractor shall require each subcontractor to include a similar provision in its subcontracts.
(AFPI 7-4061( 60 Ed.) issued 17 Jan. 1961 (Rev. No. 2) and is authorized for use in accordance
with the instructions in APPI 7-4061.)
B,36 PROGRAK PROGRE2S REMTfG REV T9 (JAB. 1961)
Contractor agrees to submit those program progress reports an are specifically ' set. forth
in APPI Form 21, "Specification of Program Progress Reporting Requirements," attached to this
contract, and made a part thereof. Reports shall be prepared in accordance with instructions
contained in AFLC/AFSC Manual No. APLCK 70-5/AFSCK 70-1, "Handbook, Contractor Program Progress
Reporting," and any amendments in effect on the data of this contract. Bureau of Budget Clearance
No. 21-R125-1 applies.
(APPI 7-4063 (60 Ed.) revised 30 August 1962 (Rev. No. 21) and is authorized for use in accordance
with the instructions therein).
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B.37 crop wept MM (Ju L 1960)
(a) The Contracting Officer me-y, at AMY time, by written carder to the Goatrsator,
require the Contractor to stop all, or any part, of the work called fore by this contract . '
for a'period of ninety (90) days after the order in delivered to the Contractor, and for
any further period to which the parties may agree. Any such order shall be specifically
identified as a Stop Work Order issued pursuant to this clause. Upon receipt of such
an order, the Contractor shall forthwith comply with its terms and take all reasonable
steps to minimize the incurrence of costs allocable to the work covered by the order
during the period of work stoppage. Within a period of ninety (90) days after-a stop
work order is delivered to the Contractor, or within any extension of that period to which
the parties shall have agreed, the Contracting Officer shall either
(i) cancel the stop work order, or
(ii) terminate the work covered by such order as provided in the
"Terainatione clause of this contract.
(b) If a atop work order issued under this clause is canceled or the period at
the order or any extension thereof expires, the Contractor shall resume work. An
equitable adjustment shall be made in the delivery schedule, the estimated cost, the fee,
or a combination thereof, and in any other provisions of the contract that may be affected,
and the contract shall be modified in writing acoardingly, if
(i) the stop work order results in an increase in the time required for, or
in the Contractor's cost properly allocable to, the performance of any
part of this contract, and
(ii) the Contractor asserts a claim for such adjustment within thirty (30)
days after the end of the period of work stoppage] provided that, if
the Contracting Officer decides that facts justify such action, he my
receive and act upon any such claim asserted at any time prior to
final payment under this contract.
Failure to agree to any adjustment shell be a dispute concerning a question of fact
within the meaning of the "Disputes" clause of this contract.
(o) If a stop work order is not canceled and the work covered by such order is
terminated for the convenience of the Oovernmsnt, the reasonabla costs resulting from
the stop work order shall be allowed in arriving at the termination settlement.
(ASIA 7-205.7 or 7-404.5 (63 Ed.) and is authorized for use in accordance with the
instructions in ,SIB 7-105.8).
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B-38 AMY-FRES ENTRY--CANADIAN SUPPLIES (Nov. 1961)
(a) Except as otherwise approved by the Contracting officer, no amount is or will be included
in the contract price on aooount of duty with respect to --
paragraph
Regulation) t to be sdelivedefined
redi under this
(i) all -101 and of ithes Armed which Seconstitute rvices Pr "Oian end
6,101
contract; and
(ii) all supplies (includingt without limitation, raw materials, components and
intermediate assemblies) produoed or made in Canada which are to be incorporated
in the and items to be delivered under this contract; provided, that such end
items are made in the United States or Canada;
except supplies imported into the United States prior to the date of this contract, at, in the
case of supplies imported by a first- or lover-tier subcontractor hereunder, prior to the date
of his subcontract.
(b,) The Contractor warrants that all such Canadian supplies, for which such duty-free
entry is to be claimed, are intended to be delivered to the Government or incorporated in the
end items to be delivered under this contract, and that duty shall be paid by the Contractor
to the extent that such supplies, or any portion thereof, (if not scrap or salvage), are
diverted to nongovernmental use other than as a result of a competitive sale made, directed
or authorized by the Contracting Officer.
(o) The Government agrees to execute duty-free entry certificates and to afford such
assistance as appropriate in order to obtain the duty-free entry of Canadian end products or
supplies as to which the shipping documents bear the notation specified in paragraph (d)
belch, except as the Contractor may otherwise agree.
(d) All shipping documents submitted to Customs, covering such Canadian end products or
supplies for which duty-free entry is to be claimed, shall bear the following informations
(i) Government prime contract number;
(ii) identification of carrier;
(iii) the notations "UNITED STATES AZii FORCE - DUTY-FRRS ENTRY To BE Cunm pursuant
to Act of August 10, 1956 (10 U J3.C. 2383)." Upon arrival. of shipment at port
of entry, Collector of Customs, kindly notify the Detroit Air Force Contract
Management District, 6233 Concord Avenue, Detroit 11, Michigan, who will
execute Customs Forms 7501 and 7501A and the Duty-Free Entry Certificate;
(iv) gross weight in pounds (if freig3at is based on space tonnage, state cubic
feet in addition to gross shipping weight); and
('v) estimated value in United States dollars.
(e) The Contractor agrees to instruct the foreign supplier to prepare a sufficient number
of copies of the bill of lading (or other shipping document so that at least two of the copies
accompanying the shipment will be available for use by the Collector of Customs at the port of,
entry. The foreign supplier shall also be instructed to forward at the time of shipment, a
memorandum copy of the bill of lading (or other shipping document) to the designated Government
representative.
(f) This clause shall not apply to purchases of Canadian supplies in obnnsbtion iri.ththis
contract if (i) such Canadian supplies are identical in nature with supplies purchased by the
Contractor or any subcontractor hereunder in oonneotion with his commercial business, and (ii) it
is not economical or feasible to account for such supplies so as to assure that the amount of such
supplies for which duty-free entry is claimed pursuant to this clause does not exceed the amount
thereof purchased in connection with this contract.
(g) The Contractor agrees to insert the substance of.thisclause, including this paragraph
(g), in all subcontracts for supplies hereunder that exceed $5,000. Each such subcontract shall
require the subcontractor to identify this contract by its contract number on any shipping
documents submitted to Customs covering supplies for which duty-free entry is to be claimed
pursuant to this clause.
(Ann 6-605.2 (63 Rd.) and is authorized for use in accordance with the instructions therein.)
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B.39 CERTIFICATE QF CONFORMANCE (SEP. 1963)*
(a) Notwithstanding (a) of the clause hereof entitled "Inspection" or "Inspection
of Supplies and Correction of Defects", as the case may be, any of the supplies or
3rvices to be furnished hereunder may be accepted without prior Government inspection
upon receipt of a Certificate of Conformance of the Contractor attached to (an invoice
or a DD Form 250 as applicable) for supplies or services reading substantially as
follows, provided the Contractor has been notified by the Inspection Aoitivity that
the Certificate is appropriates
"I hereby certify that I did,*on the (date) of (month) 19_9 (ship
via (Name of Carrier) on (Bill of Lading No., Receipt, etc.), in accordance
with shipping instructions issued by the Contracting Offioe:6, the supplies
called for by contract number (insert contract number) , that
such supplies were in the quantities and of the quality oalled for, and
were in all respects in accord with the applicable specification) or
(complete the services called for by Contract Number (insert contract
number) , item (insert item number) and
that such services were in the quantity and of the quality called for
and were in all respects in accord with the applicable specifications)).
This statement is furnished to support payment of the attached invoice."
(b) Notwithstanding any provisions of the certificate above referred to, and any
Inspection olause(s) hereof, the liability of the Contractor with respect to supplies
accepted by the Government under the provisions of paragraph (a) above will, after
inspection by the Government or after the expiration of a reasonable time following
delivery to the Government within which inspection may be made, whichever occurs first,
be limited, except as to supplies rejected upon such inspection, to liability for
latent defects, fraud, or such gross mistakes as amount to fraud. In the event of
any conflict between this paragraph (b) and the "Inspection of Supplies and Correction
of Defects", or "Inspection", or "Inspection and Correction of Defects" clause
hereof the "Inspection of Supplies and Correction of Defects", or "Inspection", or
"Inspection and Correction of Defects" clause shall govern.
(o) Five copies of the Certificate of Conformance will be attached to copies
of the DD Form 1155 or DD Form 250 which are provided the Air Force Accounting
and Finance Officer paying the contract.
(d) In connection with paragraph (a) the procedures of USAF Specification
Bulletin 515 will apply to acoeptanoe of nonconforming material of a nature which
does not require a contract change or equitable adjustment in the contract price.
*AFPI 7-4014 (central procurement supply and service oontracts)mmodified by (i)
deleting "notwithstanding the provisions of paragraph (o) of the clause hereof entitled
'Inspection' or 'Inspection of Supplies and Correction of Defects' as the case may
be," from paragraph (b) and substituting "any Inspection clause(s) hereof," (ii)
adding a sentence at the end of (b) and (iii) adding paragraph d .
When shipment by a suboontraoto is involved, substitute the word "through
he medium of-my su ontraotor (name of subcontractor and address) cause on
(month, day and year) to be shipped." Delete the words from "on" to "ship"
inclusive, in the first line in such situations.
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Be40 BASE SUPPORT
The Contractor shall, insofar as possible, avoid incurring direct or indirect costs in
duplicating-work or support capacity available at or through any Air Force installation involyj4
in the performance of this contract or any r, .jor subcontract hereunder. Therefore, the Contractor
agrees to utilize or cause to be utilized all available Government or Government controlled
working space, equipment, supplies, matorialu, ea vioep or other support (including oommunioatipn
services) at or'available through any Air Force Baa3e,, installation or office where work under this
oontraot is perrformed. Unless otherwise stip latcd in the schedule of this contract, such
itevA will be made available in reasonable eazounts on a no-charge-for-use basis and the value
thereof-shall be a part of the consideration, for this contract. The Contractor shall report
any inadequacies or non-availability of items contemplated hereby together with a recommended
plan for obtaining the requested item to the Contracting Officer who shall promptly determine
the validity and emtent of the requirement and the manner in which any approved requirement will
be filled (as.by purchase, rental, lease or otherwise). The Contractor shall not purchase or
otherwise furnish any requirement covered by this clause, or authorize others to do no, without
written approval of the Contracting Officer cf the tome of the proposed puohaae,or other
arrangement. Items of a capital nature shall not be purchased under authority of this clause.
The agreed value, amount and character of Base Support, together with other terms and conditions
appropriate to the furnishing thereof, shall be determined and set forth in the schedule and the
item(s) agreed to be furnished shall be accounted for hereurrlor by categories and Base(s). The
effect of additions or changes in such support shall be fully documented and-if appropriate
under the circumstances, equitable adjustaont shall be made in the terms and conditions
(including pride) of the contract, in accordance with the clause entitled "Changes".
Be41 sECOItITY BE LJTBEKENTS
Pursuant to paragraph 5.b of "Industrial Security Manual for Safeguarding Classified.
Information", the Contracting Officer may modify Contractor's responsibilities for security
with respect to any work being performed. hereunder within the confines of a military
installation. Such modification shall be transmitted to the Contractor by the Contracting
Officer by written notice pursuant to the clause of this contract entitled "Changes". If
such modification results in an increase or decrease of security costs under this contract,
an appropriate increase or decrease of the contract price, the estimated cost, the foe
(as applicable to this oontraot) hereunder shall be negotiated and evidenced by a supplemental
agreement to this contract.
(Authorized for use in any definitive contract wherein the Contractor may be required to
perform any portion of the work within the confines of a military installation)
B,42 OCNTRACT NUS? IDMIFIGATICK ON DATA
Contractor agrees to mark the number of this contract on all Data delivered hereunder.
(APPI 9-202.l(a)(5) (60 ii.) and is authorized for use in accordance with the instructions therein)
B.43 SCMMJLE PROVISION RMd1TI G To TBE OL&3JS] REREOP ENTITLED "DATA"
In the event the clause hereof entitled "Data" is incorporated in a contract the provisions
of this oip*ie (shat. be doomed to be incorporated in the Schedule of such contract.
tiugYts nData
If .-t ,ia, contract con 4ains Ca.e;.:ae: B050 tl~e phrase "Except as provided '.
The r obtained by the Government in Subjoot Data are set forth in the Data clause
incorporated in this contract, and nothing elsewhere in this contract or in any documents
incorporated by reference in this contract shall be construed as in any way altering such
rights.
(This clause is authorized for use in accordance t traction in APPI 8 9-202.1k)(
AFPI 9-202.1(c)(4) (o i.).and AFPI 9-2O2ol(b)(l) B (AFPC Noe 59 28 t .
l1363))
B.44 Rg OP N uTiar
No news release, public announcement, denial or confirmation of same on any part of the
subject matter of this oontraot or any phase of any program hereunder shall be made without
the prior written approval of the Office of Information (BSE), Ballistic Systems Division
if this contract is with B3D and Office of Information, Space Systems Division if this
contract is with Space Systems Division.
(Authorised for use only in contracts entered into by APSC Ballistic Systems Division and
APSO Space Systems Division)
8.45 MMMSE Cif NANAG3' T IHB'CB3 ATICC
With respect to work being performed under this oontraot, the Contractor agrees that
inf-ormation requested of the Oontraotor by Very Important Visitors as defined by APSC Regulation
11-6, dated 16 January 1962, will be coordinated, wherever feasible, with the cognizant Air
Force Plant Representative or his duly authorized representative.
*in Clause B.50" is inserted. in the first line before the words "The rights obtained".
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B?46 ACCIDENT IffV TIGATICN
In addition to conforming with other reporting requirements called for by this gontraot,
oontraotor agrees (i) to report promptly and in reasonable detail to the oontracting officer,
or take reasonable steps to cause others responsive to Contractor to do likewise, all
pertinent facts reasonably available to any of them concerning each accident or incident
within the meaning of AYE 127-4 which result in damage or injury with significant implications
directly involving an aircraft, missile, space vehicle or major component thereof (as defined
by agreement between the Contracting Officer and the Contractor) poesessed, used or operated
by or for the Contractor, which occurs during and as a result of the performance of York or
services hereunder, and `ii) to cooperate fully with the United States Air Force in fulfilling
the purposes of APE 127-4 and APSC Supplement 1 thereto. This condition shall not preclude
either the Air Force or the Contractor from conducting independent investigations. In the
event any investigation required by the Government pursuant to the conditions met forth by
this contract article affects the Contractor's ability to perforsi work under this contract, the
Contractor shall be entitled to an equitable adjustment in the provisions of this contract
in accordance with the clause hereof entitled "Changes".
B,47 PSMTBtCY AUTHORIZATION FOR AIR FCSCE CC11TRACT(2 (FSB. 1963)
(a) Authorisation of radio frequencies required in support of Air Force contracts
shall be obtained through the interested AFSC Division, Center, or CNN by the?oontractor
or euboontraotor in need thereof. The Frequency Xanagoment Procedures of AFSCS( 100-1-rill
be followed to obtain USAF Radio Frequency Authorisation.
(b) The contractor or subcontractor involved shall provide technical operating
characteristics of a proposed experimental or developmental electromagnetic radiating
device to the interested AFSC Division or Center during initial planning, experimental
or developmental stages.
(AFPI 7-4067 issued 29 April 1963 (N&Y. No. 29) and is authorised for use in accordance
with the inatruotiona therein.)
B 048 ASW MATERIAL (Nov. 1963)
Except as to any supplies and components which the Specification or Schedule
specifically provides need not be new, the Contractor represents that the supplies and
components including any former Government property identified in the "Government Surplus"
clause of this contract to be provided under this contract are new (not used or reconditioned,
and not of such age or so deteriorated ae to impair their usefulness or safety). If at any
time during the performance, of this contract, the Contractor believes that the furnishing
of supplies or components which are not new is necessary or desirable, he shall notify the
Contracting Officer immediately, in writing, including the reasons thezefor and proposing
any consideration which will flow to the Government if authorization to use such supplies.
is granted.
(ASPR 1-1208 (63 Et.) issued 15 Nov. 1963 (Rev. No. 3) and is authorised for use in aooordanoe
with the instructions therein..)
B,49 GOV T SURPWS (Nov. 1963)
(a) In the event the bid or proposal is based on furnishing items or components which
are former Government surplus property or residual inventory resulting from terminated
Government contracts, a complete description of the items or components, quantity to be used,
name of Government agency from which acquired, and date of acquisition shall be set forth
elsewhere in this contract. - -
Notwithstanding any information provided in accordance with this provision, items furnished
by the Contractor suet comply in all respects with the specifications contained herein.
(b) bcoept as disclosed by the contractor in (a) above, no property of the type described
herein shall be furnished under this contrast unless approved in writing by the Contracting
Officer.
(ASPS 1-1208 (63 Yd.) issued 15 Nov. 1963 (Rev. rv. 3) and is authorised for use in accordance
with the instruotlona therein.)
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B-50 VALUE ENGINE i1NG INCENTIVE (AUG. 1963)
(a) This clause applies to cost reduction proposals initiated and developed by the
Contractor for changing the drawings, designs, specifications or other requirements of
this contract. This clause does not, however, apply to any such proposal unless it is
identified by the Contractor at the time of its submission to the Contracting Officer,
as a proposal submitted pursuant to this clause. The cost reduotion proposals contemplated
are those that,
(i) would result in less costly items than those specified heroin without impairing
any of their essential functions and characteristics such as service life, reliability,
economy of operation, ease of maintenance, and necessary standardized features, and
(ii) would require, in order to be applied to this contract, a change order to
this oontraot.
(b) Cost reduction proposals as defined herein will be processed expeditiously and in the
same manner as proscribed for any other proposal which would likewise necessitate issuance of
a contract change order. As a minimum, the following information will be submitted by the
Contractor with each proposals
(i) a description of the difference between the existing contract requirement and
the proposed change, and the comparative advantages and disadvantages of each;
(ii) an itemization of the requirements of the oontraot which must be changed if
the proposal is adopted and a recommendation as to how to make each such change (e.g.,
suggested revision);
(iii) an estimate of the reduction in performance costs that will result from
adoption of the proposal taking into account the costs of implementation by the Contractor,
and the basis for the estimate;
(iv) a prediction of any effects the proposed change would have on other costs to
the Government, such as Government-furnished property costs, coats of related items, and costs
of maintenance and operation;
(v) a statement of the time by which a change order adopting the proposal must
be issued so as to obtain the maximum cost reduction during'the remainder of the contract,
noting any effect on maintaining the contract delivery schedule; and
(vi) the dates of any previous submissions of the proposal, the numbers of any
Government contracts under which submitted, and the previous actions by the Government,
if known.
(o) The Government shall not be liable for any delay in acting upon, or for Any failure
to act upon, any proposal submitted pursuant to this clause. The decision of the Contracting
Officer an to the acceptance of any such proposal under this contract shall be final and
shall not be subject to the "Disputes" clause of this contract. Unless and until a change
order applies such a proposal to this contract,, the Contractor shall remain obligated to
perform in accordance with its existing terms. The Contracting Officer may accept in whole
or in part any cost reduction proposal submitted pursuant to this clause by issuing a change
order which will identify the cost reduction proposal on which it is based.
-(d) If a cost reduction proposal submitted pursuant to this clause is accepted, an
equitable adjustment in target cost said fee and in any other affected provision of this
contract shall be made in accordance with this clause and the "Changes" clause of this
contract. The equitable adjustment in target cost and fee shall be established by (i)
determining the amount of the total estimated decrease in the Contractor's cost of performance
resulting from adoption of the post reduction proposal, taking into account the cost of
implementing the change by the Contractor, and (ii) deducting the full amount of this estimated
decrease from the target cost and adding percent (---! %) of such amount to the
minimum, target and maximum fees. If the equitable adjustment involves an increase in the post
of performance of the contract, such increase shall be established under the "Changes" clause
rather than under this paragraph (d). The resulting contract modification will state that
it is made pursuant to this clause. (ASPa 1-1705.5)
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(e) Cost reduction proposals submitted under the provisions of any other contract also
may be submitted under this contract for consideration pursuant to the terns of this
clause.
(f) The Contractor may restrict the Government's right to use any sheet of a value
engineering proposal cap of the supporting data, submitted pursuant to this clause, in
aocardame* with the terms of the following legend if it is marked on such shoots
This data furnished pursuant to the value engineering incentive
clause of cantraot shall not be disclosed
outside the Government, or be duplicated, used, or disclosed,
in whole or in part, for any purpose other than to evaluate a
value engineering proposal submitted under said clause. Rhin
restriction does not limit the Government?s right to use
information containedin this data if it is or has been obtained
from another source, or is otherwise available, without limitations.
If such a proposal is accepted by the Government by issuance of a
change order under the "Changos" clause of said contract after the
use of this data in such an evaluation, the Government shall have
the right to duplicate, use, and disclose any data pertinent to
the proposal as accepted, in any manner and for any purpose whatsoever,
and have others so do.
After the issuance of a change order accepting a value engineering proposal, but not
prior thereto, such proposal and the supporting data shall, for the sole purpose of
supplementing the rights granted to the Government under this paragraph, be considered
"8ubjeot Data" within the meaning of the "Data" clause of this contract.
*Percentage to be specified elsewhere herein
(lsP6 1-1705.1 (63 Md.) revised 15 Nov. 1963 (Bev. No. 3) except (d) modified as
required by ASPS 1-1705.5 for post-plus-incentive--fee oontraots and shall be used
only in accordance with the instructions in ASPB 1-1702)
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Be51 VAI JE ENGnTEERING PROGRAM REQUIg13dT (AUG. 1963)
(a) The Contractor shall engage in a value engineering program, and submit progress
reports thereon, as specified in the Schedule. In addition, the Contractor shall submit any
cost reduotion.ohange proposals resulting from the required program. This clause does not,
however, apply to any such proposal unless it is identified by the Contractor at the time of
its submission to the Contracting Officer, as a proposal submitted pursuant to this 'clause.
The cost reduction change proposals contemplated by this clause are those thats
(i) would result in less costly items than those specified herein without
impairing any of their essential functions and characteristics, such se service life,,
reliability, economy of operation, ease of maintenance, and necessary standardized
procedures; and
(ii) would require, in order to be applied to this contract, a change order to
this contract.
(b) Cost reduction proposals as defined herein will be processed expeditiously and
in the same manner as prescribed for any other proposal which would likewise necessitate
issuance of a contract change order. As a minimum, the following information will be
submitted by the Contractor with each proposals
(i) a description of the difference between the existing contract requirement
and the proposed change, and the comparative advantages and disadvantages of each;
(ii) an itemization of the requirements of the contract which must be changed
if the proposal is adopted and a reoommendation as to how to make each such ohange
(e.g., suggested revision);
(iii) an estimate of the reduction in performance costs that will result from
adoption of the proposal taking into account the costa of implementation by the Contractor,
and the basis for the estimate;
(iv) a prediction of any effects the proposed change would have on other costs
to the Government, such as Government-furnished property costs, costs of related items and
costs of maintenance and operation;
(v) a statement of the time by which a change order adopting the proposal
must be issued so as to obtain the maximsni cost reduction during the remainder of the
contract, noting any effect on maintaining the contract delivery schedule; and
(vi) the dates of any previous submissions of the proposal, the numbers of any
Government contracts under which submitted, and the previous actions by the Government,
if known.
(o) The Government shall not be liable for any delay in noting upon, or for any
failure to act upon, any proposal submitted pursuant to this clause. The decision of
the Contracting Officer as to the accept ce of any such proposal under this contract
shall be final and shall not be subject to the "Disputes" clause of this contract.
Unless and until a change order applies such a proposal to this contract, the Contractor
shall remain obligated to perform in accordance with its existing terms. The Contracting
officer may accept in whole or in part which twilluction identify proposal
proposal
to this clause by issuing a change order
on which it is based.
(d) If a coat reduction proposal submitted pursuant to this clause is accepted under
this contract, an equitable adjustment in the fixed fee and in any other affected provision
of this contract shall be made -in accordance with this clause and the "Changes" clause of
this contract. If the adjustment involves a reduction in the post of the contract, the
equitable adjustment in the fixed fee shall be established by (i) determining the amount
of the total estimated decrease in the Contractors cost of performance resulting from
adoption of the cost reduction proposal, taking into account implementing
amount toethe
percent
change by the Contractor, and (ii) adding "
fixed fee. If the equitable adjustment involves an increase in the cost of performance
of the contract, such increase shall be established under the "Changes" clause rather than
under this paragraph (d). The resulting contract modification will state ,hat it is made
pursuant to this clause.
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this contract contains the clause entitled "Allowable Coat Incentive Fee and Payment"
paragraph d above is deleted in its entiret and the following paragraph d substituted
in lieu thereof,
"(d) If a cost reduction proposal submitted pursuant to this clause is accepted,
an equitable adjustment in target cost and fee and in any other affected provision
of this contract shall be made in accordance with this clause and the 'Changes'
clause of this contract. The equitable adjustment in target cost and fee shall be
established by (i) determining the amount of the total estimated decrease in the
Contractor's cost of performance resulting from adoption of the cost reduction
proposal, taking into account the cost of implementing the change by the Contractor;
and (ii) deducting the full amount of this estimated decrease from the -target coat
and adding * percent(_I__%) of such amount to the minimum, target and
maximum fees. If-the equitable adjustment involves an increase in the cost of
performance of the contract, such increase shall be established under the 'Changes'
clause rather than under this paragraph W. The resulting contract modification
will state that it is made pursuant to this clause.'" (ASPR 1-1705.5)
(e) Cost reduction proposals submitted under the provisions of any other contract
may also be submitted under this contract for consideration pursuant to the terms of
this clause.
Cr) Any progress reports submitted pursuant to (a) above, and any value engineering
proposal, including supporting data, submitted pursuant to this clause shall constitute
"Subject Data" under the "Data" clause of this contract, whether or not change orders or
contract modifications result therefrom. Notwithstanding any other provisions of this
contract, the Government shall have the unrestricted right to apply any data pertinent
to any cost reduction proposal in any manner and for any purposes whatsoever unless the
Contracting Officer specifically agrees otherwise in writing.
*Percentage to be specified elsewhere herein
(ASPn 1-1706.1 (63 Rd.) revised 15 Nov. 1963 (Rev. No. 3) except (d) modified to include
self-deleting language in order to incorporate the CPIP type of contrsot referenced in
ASPR 1-1706.2 if applicable and shall be used only in accordance with the instructions
in ASPR 1-1703).
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$.53 RESTRICTIONS ON PRINTING (JUNE 1963)
Reproduction of reports, data or other writ en m.ateria ~ if required, is
authorized provided that the material produced. does not exceed 59000 production
units* of any page and that items .consisting of malt:.pl.e pages do not exceed
25,000 production units in the aggregate. These prod,ac;ton unit limitations.
do not apply to jobs of 225 copi..es cr lead. Pr.Ln".>.ing of mfi k erials in excess of
quantities cited above muet be in e.ocordarce with paragraph 69 AFR 6-1. These
restrcitions cp not preclude the writing, editing, preparation of manuscript or
reproducible copy or related. illustrative materials if required as a,part of
this contract. It does not, apply to the printirg or d.:.plicating required by
contractors for their own use in responding to the t.ermr? of this contract.
*DEFINITION OF PRODUCTION UNIT. One sheet si!e9 8 x 'A02?fprinted one side, one
color only.
(APPI 7-4066 (60 Ed.) revised 28 June 19C, (AFFI Rev. No. 34))
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B.52 PROVISIONS FOR KAfl TENANCR, OVERHAUL AND MODIFICATION CONTRACTS
(1) Clause 1 - Definitions - of Section A is hereby amended by adding the
following paragraphs after paragraph (e)z
"(f) The term "supplies" as used in this contract includes without
limitation, and in addition to the items mentioned in the clauses of
this contract entitled 'Inspection of Supplies and Correction of
Defeat*,' all work to be performed under this contract.
(g) The term 'Specifications' as used herein includes without
limitation the statement of work to be performed upon Air Force equipment
being maintained, modified, reconditioned, rehabilitated, or repaired
hereunder."
(AFPI 7-4603.1) (60 Ed.) revised 28 February 1963 (Rev. No. 27)
(2) Special Provisions Relating To Air Force Equipment Upon Which Work Is
To Be Performed (Jun. 1959)
(a) The Contractor's liability for Air Force equipment upon which work
is to be performed by the Contractor pursuant to this contract shall be subject
to the provisions of paragraph (f) and paragraph (e) as revised below, of the
clause of this contract entitled "Government-Property." For the purpose of
this clause, the following shall be substituted for paragraph (e) of the clause
entitled "Government-Property"s "Title to Air Force equipment furnished for
repair or modification shall remain in the Government. The Contractor shall
protect such equipment in accordance with sound industrial practice. The
Government shall at all reasonable times have access to the premises wherein
the Air Force equipment is located." However, such equipment shall not be
considered Government-property within the meaning and for the purpose of any
other paragraph of that clause.
(b) The Contractor shall maintain adequate property control records of
Air Force equipment furnished for repair or modification in accordance with the
requirements of the "Manual for Control of Government Property in Possession of
Contractors" (Appendix B, Armed Service Procuremenet Regulation) as in effect on
the date of the contract, which manual is hereby incorporated by reference and
made a part of this contract.
(Applicable if this is a definite quantity contract)
(c) In the event the Air Force equipment furnished for repair or modification
is not delivered to the Contractor by the time or times specified in the schedule,
the Contracting Officer shall, upon timely written request made by the Contractor,
make a determination of the delay occasioned by the Contractor thereby, and shall
equitably adjust the delivery or performance dates or the estimated cost, fixed
fee, or both and any other contractual provisions affected by such delay, in
accordance with the procedures provided for in the clause of this contract
entitled "Changes".
(AFPI 7-4051 (60 Ed.))
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SECTION 0---PROVISIONS FOR RESEARCH AND DEVELOPMENT CONTRACTS
This Section D shall be deemed to be incorporated in and form a part of every contract placed by the United
States Air Force with the Contractor whenever such instrument or document states that this Section D of this Basic
Agreement applies:
D-1. Clause 1-Definitions-of Section A is here)y amended by inserting therein the following paragraph:
"(f) The term 'contract work' means all work to be performed under this contract including without limita-
tion airy rtudlan eoVttring fundamental, theoretical or experimental investigations; any extension of the invest iga.
tive findings and theories of a scientific or teehnica lrt tore Into practical application,, any tangthle items, er drawings
referred to as 'supplies,' furnished to the Government;,and any reports, data, computations, plans,
specifications with respect to any of the foregoing. A P17~41
D-2. Clause 2-Changes-of Section A is hereby deleted and the following clause substituted in lieu thereof:
"2. CHANGES. (Feb. 1959) The Contracting Officer .nay at any time, by a written order, and without notice to the
sureties, if any, make changes, within the general scope of this contract, in any one or more.of the following: (i)
drawings, designs, or specifications, (ii) method of shipment or packing; (iii) place of inspection, delivery, or accep-
tance, and (iv) the amount of Government-furnished property If any such change causes an increase or decrease in the
estimated cost of, or the time required for, performance of this contract, or otherwise affects any other provisions of
this contract, whether changed or not changed by any such order, an equitable adjustment shall be made (i) in the
estimated cost or delivery schedule, or both, (ii) in the amount of any fee to be paid to the Contractor, and (iii) in
such other provisions of the contract as may he so affected, and the contract shall be modified in writing accord-
ingly. Any claim by the Contractor for adjustment under this clause must be asserted within sixty (60) days from
the date of receipt by the Contractor of the notification of change; provided, however, that the Contracting Officer,
if he decides that the facts justify such action, may receive and act upon any such claim asserted at any time prior
to final payment under this contract. Failure to agree to any adjustment shall be a dispute concerning a question
of fact within the meaning of the clause of this contract entitled 'Disputes.' However, nothing in this clause shall
excuse the Contractor from proceeding with the contract as changed."
(ASPR 7-.44.1) (60 Ed.) except the words and figures "thirty (30)" changed to "sixty (60)")
D-3. Clause 3-Limitation of Cost--of Section A is hereby amended by deleting paragraph (a) and substitut-
ing in lieu thereof the following:
"(a) It is estimated that the total cost to the Jovernment, exclusive of any fixed fee, for the performance of
this contract will not exceed the estimated cost set forth in the Schedule, and the Contractor agrees to use his best
efforts to perform the work specified in the Schedule and all obligations under this contract within such estimated
cost. If at any time the Contractor has reason to believe that the costs which he expects to incur in the performance
of this contract in the next succeeding sixty (60) days, when added to all costs previously incurred, will exceed
seventy-five per cent (75%) of the estimated cost then set forth in the Schedule, or if at any time, the Contractor
has reason to believe that the total cost to the Government, exclusive of any fixed fee, for the performance of this
contract will be substantially greater or less than the then estimated cost thereof, the Contractor shall notify the
Contracting Officer in writing to that effect, gi ing the revised estimate of such total cost for the performance of
this contract." (Feb. 1959) (ASPR 7-402.2) (6 - Ed
D-4. Clause 5-Inspection of Supplies and Correction of Defects-of Section A is hereby deleted and the fol-
lowing clause substituted in lieu thereof:
"5. INSPECTION AND CORRECTION OF DEFECTS. (May 1960) (a) All work under this contract shall be sub-
ject to inspection and test by the Government (to the extent practicable) at all times (including the period of per-
formance) and places, and in any event prior to acceptance. The Contractor shall provide and maintain an inspection
system acceptable to the Government covering the work hereunder. The Government, through any authorized repre
sentative, may inspect the plant or plants of the Contractor or of any of his subcontractors engaged in the perform=
ance of this contract. If any inspection or test is made by the Government on the premises of the Contractor or a sub-
rontractor, the Contractor shall provide and shall require subcontractors to provide all reasonable facilities and
assistance for the safety and convenience of the Government inspectors in the performance of their duties. Al] in-
spections and tests by the Government shall be performed in such a manner as will not unduly delay the work. Except
as otherwise provided in this contract, final inspection, and acceptance shall be made at the place of delivery as
promptly as practicable after delivery and shall be deemed to have been made no later than ninety (90) days after
the date of such delivery, if acceptance has not been made earlier within such period.
(b) At any time during performance of this contract, but not later than six (6) months (or such other time
as may be provided in the Schedule) after acceptance of all of the end items (other than designs, drawings, or
reports) to be delivered under this contract, the Government may require the Contractor to remedy by correction or
replacement, as directed by the Contracting Officer, any failure by the Contractor to comply with requirements of
this contract. Any time devoted to such correction or replacement shall not be included in the computation of the
period of time specified in the preceding sentence, except as provided in (d) below. Except as otherwise provided
in paragraph (c) below, the allowability of the cost of any such replacement or correction shall be determined as
provided in the clause of this contract entitled Allowable Cost, Fixed Fee, and Payment, but no additional fee
shall be payable with respect thereto. Corrected articles shall not be tendered again for acceptance unless the former
tender and the requirement of correction is disclosed. If the Contractor fails to proceed with reasonable promptness
to perform such replacement or correction, the Gov~:rnment (i) may by contract or otherwise perform such replace-
ment or correction and charge to the Contractor any increased cost occasioned the Government thereby, or may re-
duce any fixed fee payable under this contract (or r squire r cpayment of any fixed fee theretofore paid) in s u c h
amount as may be equitable under the circumstances, or (ii) in the case of articles not delivered, may require the
delivery of such articles, and shall have the right ro reduce any fixed fee payable under this contract (or to re-
quire repayment of any fixed fee theretofore paid) in such amount as may be equitable under the circumstances,
or (iii) may terminate this contract for default. Failure to agree to the amount of any such increased cost to be
charged to the Contractor or to such reduction in, or repayment of, the fixed fee shall be deemed to be a dispute con-
cerning a question of fact within the meaning of than clause of this contract entitled Disputes.
6 33(657) 5l76
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(c) Notwithstanding the provisions of paragraph (b) at.ove, the Government may at any time require the
Contractor to remedy by correction or replacement, without cost to the Government, any failure by the Contractor
to comply with the requirements of this contract if such failure is due to fraud, lack of good faith or willful mis-
conduct on the part of any of the Contractor's directors or officers, or on the Dart of any of his managers, superin-
tendents, or other equivalent representatives, who has supervision or direction of ti) all or substantially all of
the Contractor's business, or (ii) all or substantially all of the Contractor's operations at any one plant or separate
location in which this contract is being performed, jr I iii) a eeparate and complete major industrial operation in
connection with the performance of this contract. The Government may at any time also require the Contractor to
remedy by correction or replacement, without cost to the Government, any such failure caused by one or more
individual employees selected or retai~i ed by L}ra Contractor after any sesh supervisory personnel has raasafi&ble
grounds to belleve that any lush ampieye.e is habitually earelees or otherwtae unqualifle
(d) The provisions of paragraph (b) above shall apply to any corrected or replacement end item or compo.
nent until six months after its acceptance.
(e) The Contractor shall make his records of all inspection work available to the Government during the per-
formance of this contract and for such longer period as may he specified in this contract.
(f) Except as provided in this clause and as may be provided in the Schedule, the Contactor shall have no
obligation or liability to correct or replace articles which at the time of delivery are defective in material or work-
manship or otherwise not in conformity with the requirements of this contract.
(g) Except as otherwise provided in the Schedule, the Contractor's obligation to correct o: replace Govern-
ment-furnished property (which is property in the possession of or acquired directly by the (=overnment and de-
livered or otherwise made available to the Contractor) shall be governed by the provisions of the clause of this
contract entitled 'Government Property'."
(ASPR 7-402.6(a)(1) (63Ed.))
D-5. Clause 7-Subcontracts---of Section A is hereby amended by deleting the period at the end of the first
sentence of paragraph (c) and inserting in lieu thereof the following:
", or (v) has experimental, developmental. or research work as ont- of its purposes." (ASPR 7-402.8 (63 Ed.)
i AU
D-6. Clause 38--Limitation on Withholding of Payments-of Section A its hereby amended by deleting the words
"supplies -delivered or services performed" and substiuting in lieu thereof the words "work performed under this
contract."
D-7. Standards of Work (Feb. 1969)-Tht ?.ontractur agrees that the performance of work and services, pur-
suant to the requirements of this contract. +hall conform to high professional standards.
(ASPR 7-402.4) (63 Ed.)
D-8. Reports of Work (Jul. 1960)-(a) The Contractor shall submit reports making full disclosure of all work
done and the results thereof, in the manner, at the times, and to the extent set forth in the Schedule; provided that,
unless otherwise specified in the Schedule, the Contractor shall submit such reports in triplicate from time to time as
requested and upon completion (or earlier termination) of the work. Except as may be otherwise specified in the
Schedule, or unless the Contractor is otherwise instructed, the Contractor shall, upon completion (or earlier termina-
tion) of the work, deliver any working drawings and specifications of any prototypes as may have been developed.
(b) If the Contractor becomes unable to complete the contract work and to deliver at the time specified in
the Schedule because of technical difficulties, notwithstanding the exercise of good faith and diligent efforts in per-
formance of the work, he shall give, the Contracting Officer written notice of the anticipated delays with reasons
therefore not less than forty-five t45) days before the completion date specified in the Schedule or within such time
as the Contracting Officer deems sufficient. When notice is so required, the Contracting Officer may, in his dis-
cretion, extend the time specified in the Schedule for such period as he deems advisable.
(ASPR 7-404.6, (6.3 Ed. 1,
,g?hcr rtirnct Finn rntfiront costs-
D-10. ACKNOWLEDGEMENTfsw dg,i WI fto V talwt and for two years thereafter
(a) The Contractor agrees that/in the release of inferniatiur, relating w this c'ontrac't such release shall
include a statement to the effect that the project or etYnrt depicted was or is sponsored by the agency set forth in
the Schedule of this contract.
(b) For fine purpose of this claune, Information' includes Out is not ;milted to. news releases, articles,
manuscripts, brochures, advertisements, still and mutt,',, pictures. speeches. 'rade arboctatiun meetings, symposia, etc.
(c) Nothing in the foregoing shall affect- ?sinipi'arice with the requirement* of the clause of this contract
entitled "Military Security Requiremerite '
(d) The Contractor further agrees to int?lude t.he- provision' in any suhs?nntract awarded as a result of this
contract.
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SECTION E - ADDITIONAL PROVISIONS
The part of this contract describing the supplies and services to be furnished
shall refer to either Clause E-1 or E-2 of this Section$ thus, such part shall rOad
'?(a) Supplies and Services to be Furnished Pursuant to the Provisions of Clause
{Insert E-1 or E-2 and follow with lief of items)".
E-1 The parties have determined that this contract is of a highly experimental
and developmental nature and therefore that the Contractor cannot guarantee
successful performance thereof or oompletion within the time specified in the
delivery schedule set forth herein; however, the Contractor shall`use its best
efforts to perform the prescribed work until the date specified in this contract
as the date beyond which no performance on the part of the Contractor will be
required.
E-2. The Contractor shall, within the time specified in the delivery schedule
set forth in this contract, manufacture, furnish and deliver to the Government
the artioles and services set forth in this contract.
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