LETTER TO ITEK CORPORATION FROM (Sanitized)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP67B00820R000300080027-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 53
• Document Creation Date: December 9, 2016
• Document Release Date: March 9, 2001
• Sequence Number: 27
• Publication Date: July 7, 1960
• Content Type: LETTER

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ITEK Corporation
700 Commonwealth Ave.
Boston 15, Mass.
Gentlemen:
DPD -5251 -60
Amendment No. 1
Contract No. BB-375
07 Art
1. This document constitutes Amendment No. 1 to Contract
No. BB-375 between the parties hereto and said contract is amended
as hereinafter set forth.
2. Item 3 set forth in Paragraph A of Appendix I to the
Schedule is amended as follows:
By deleting the figure "60" appearing in the last
line thereof.
30 Item 4 set forth in Paragraph B of Appendix I to the
Schedule is amended as follows:
By deleting the words and figures "31 August 1960"
appearing in the last line and in lieu thereof
substitute the words and figures "18 January 1961."
4. All other terms, conditions and requirements of the contract
remain as originally stipulated,
5. Please indicate your receipt of this Amendment No. 1 to the
contract and your acceptance thereof by executing the original and
two copies of this amendment. Return the fully executed original and
one copy to the undersigned and retain the remaining copy for your
files.
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ACKNOWLEDGED AND ACCEPTED
ITEK CORPORATION
BY
TITIA
DATE
Very truly yours,
Contracting S icer
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Copy 1 of 5
DEFINITIVE CONTRACT CONTRACT NO. BB-375
]EK Corporation
700 Commonwealth Avenue
Boston 15, Massachusetts
1- /36- 3P-S"
7-
3 - ?
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Contract For: See Schedule
Mail Invoices To: Performance Period: See Schedule
Administrative Data:
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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 Massachusetts, hereinafter called the Contractor.
The Parties hereto agree that the Contractor shall furnish the necessary
facilities and deliver all supplies and shall 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 APPENDIX I and General Provisions,
which together with this signature page and the accompanying certificate
comprise this Contract NO. BB-375. In the event of any inconsistency between
the Schedule and the General Provisions, the Schedule shall control.
IN WITNV WHIREOF, the parties hereto have executed this contract as of
Y 1960 1960.
Signatures:
TTEK Corporation THE UNITED STATES OF AMERICA
Boston, Massachusetts
BY
TITLE
BY
Cotrtracting Officer
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Contract No. BB-375
CERTIFICATE
, certify that I am
the of the Corporation named
as Contractor herein; that who
signed this 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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Contract NO. BB-375
INDEX OF SCHEDULE
PAGE
PART I SCOPE OF WORK 4
PART II DELIVERY 4
PART III ESTIMATED COST AND FIXED FEE 4
PART IV PAYMENT 4
PART V LETTER CONTRACT SUPERSEDED 5
PART VI WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS 5
PART VII SPECIAL sEcuRrry RESTRICTIONS 6
PART VIII GOVERNMENT FURNISHED FACILITIES AND PROPERTY 6
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A
SCHEDULE
PART I-SCOPE OF WORK
Contract No. BB-375
The Contractor shall furnish the necessary facilities, materials
and services to accomplish the work set forth in APPENDIX I attached
hereto and made a part of this contract.
PART II-DELIVERY
Contractor shall furnish the work set forth in APPENDIX I in
accordance with the provisions thereof.
PART III-ESTIMATED COST AND FIXED Ith
a. The total estimated cost for the performance of this contract,
exclusive of the fixed fee is
b. The total fixed fee for the performance of this contract is
PART IV-PANMENT
a. In accordance with the provisions of Clause 4 of the General
Provisions of this contract entitled, "Allowable Cost Fixed Fee, and
Payment," 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
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". It being
understood and agreed, without limiting the generality of the foregoing,
that the following shall be considered as allowable items of costs
incurred or paid by the Contractor, and when necessary and required and
used for the performance of work hereunder:
(1) Premium costs for overtime work shall be an allowable
item of cost hereunder, only if, and to the extent, that over-
time work for which such payments are made, shall have been
approved by the Contracting Officer.
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(2) There shall be included as allowable indirect costs
through overhead, Contractor Research and Development costs as
are deemed reasonable and approved by the Contracting Officer
in accordance with ASPR XV Part 2 dated November 2, 1959.
(3) Costs of shipping charges of equipment procured
hereunder from Contractor's plant to final destination shall be
an allowable cost hereunder.
b. For purposes of billing current costs incurred under this
contract or until such time as an audit of Contractor's interim or
final vouchers or invoices are made by the Contracting Officer or his
duly authorized representative the Contractor shall use those rates
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 V-LETTER CONTRACT SUPERSEDED
This is the Definitive Contract contemplated by the Letter Contract
No. BB-375 dated 23 November 1959. This Definitive Contract supersedes
said Letter Contract in its entirety. Work performed and payments made
under said Letter Contract 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 Letter Contract, this Definitive
Contract shall govern.
PART VI-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 perfor-
mance of the work under this contract, shall find that the requirements
of any of the clauses of the General Provisions are in conflict with
security instructions issued to the Contractor by the Contracting Officer
or by his duly authorized representative for security matters, the Con-
tractor shall call the attention of the Contracting Officer to such con-
flict and the Contracting Officer or his duly authorized representative
for security matters shall (i) modify or rescind such security require-
ments or (ii) the Contracting Officer shall issue to the Contractor a
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waiver of compliance with the requirements of the General Provisions con-
flicting with such security requirements. Any waiver of compliance with
the General Provisions of this contract issued by the Contracting Officer
shall be in writing, except that the approval by the Contracting Officer
of any subcontract issued hereunder by the Contractor shall be deemed to
constitute approval of waiver of any clauses of the General Provisions
in conflict with the stipulations of such subcontract.
PART VII-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 sponsor-
ing this contract and the work thereunder except as the Contractor is
directed or permitted to reveal such information by the Contracting
Officer or by his duly authorized representative for security matters,
and notwithstanding any clause or section of this contract to the
contrary, the Contractor shall not interpret any clause or section of
this contract as requiring or permitting divulgence of such information
to any person, public or private, or to any officer or department of the
Government without the express consent of the Contracting Officer or his
duly authorized representative for security matters.
PART VIII-GOVERNMENT FURNISHED FACILITIES AND PROPERTY
a. Contractor is authorized to use on a no-charge-for-use basis
those facilities furnished or r furnished under
provided such use does
no n er er w e purpose or which such facilities are furnished.
b. Contractor is further authorized to use the special tooling
and/or test equipment generated under Contract NO. BB-300 between the
parties hereto at no charge for such use. Cost of repair or mainte-
nance of such tooling is included in the estimated cost hereunder.
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Contract No. BB-375
APPENDIX I
A. Contractor shall furnish the necessary facilities, materials
and services to accomplish the work set forth below:
ITEM 1-Contractor shall fabricate five (5) each Individual
Mensuration Viewers, designed and fabricated in accordance with PART I
of Contractor's Proposal No. DSDP-3075, entitled, "Proposal on Viewing
Systems" and identical to those Viewers fabricated under Contract NO.
BB-300 between the parties hereto.
MEM 2-Contractor shall furnish an Original Vellum and twenty-
five (25) copies of a Handbook of Operation and Maintenance Instructions
for Item 1 above.
'TEM 3-Contractor shall develop for SAC reconnaissance
activities, a Technique Application Program to improve the productivity
of the photo analyst. This work will be conducted in accordance with
Item I of the attached EXHIBIT "A", entitled, "Work Statement Covering
Programing and Training Program, Contract BB-375." In addition to the
final report called for in EXHIBIT "A", Contractor shall provide in-
terim reports covering the work accomplished and recommendations made
at periods of 30, 60, 90 and 120 intervals.
ITEM 4-Contractor shall furnish Computer Programing to obtain
solutions to a series of photo grammetric pi-ale= using the ALWAC
111-E Digital Computer in accordance with Item II of EXHIBIT "AP attached
hereto.
MEM 5-Contractor shall conduct a Viewer Maintenance Train-
ing Program in accordance with Item III of EXHIBIT nA7 attached hereto.
M1104 6-Contractor shall conduct a Viewer Operational Train-
ing Program in accordance with Item IV.
B. DELIVERY-Contractor shall deliver the supplies, services and/
or reports in accordance with the following schedule. Said deliveries
shall be made FOB Contractor's plant unless otherwise specified.
MEM 1-,The five (5) Viewers shall be delivered as follows:
1960 May June July
,
1 2 2
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ITEM 2-The Handbooks shall be delivered concurrently with
delivery of the first unit under Item 1 above.
ITEM 3-The Techniques Application Program shall be complete
and the final report submitted on or before 31 August 1960.
Trim 4-The Computer Programing shall be complete and the
Programs furnished on or before 31 August 1960.
ITEM 5-Contractor shall conduct the Maintenance Training
Program at its plant in accordance with Item III of EXHIBIT "A!'.
ITEM 6-Contractor shall conduct the Operational Training
Program at the SAC field activities in accordance with Item IV of
EXHIBIT "A!'.
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WORK STATEMENT
COVERING
PROGRAMMING AND TRAINING PROGRAM
CONTRACT BB-375
ITEM I - Techniques Application Program.
ltek Corporation will develop, for SAC reconnaissance technical
activities, a techniques application program whose prime purpose will
be to enable these activities to improve the productivity of the photo
analyst, including the rate and quality of his work, with particular
reference to those photo analysis tasks which relate to the specific
objectives of the Strategic Air Command. The term "photo analysis" is
construed to include photo interpretation, photogrammetrv, and other
activities concerned in extracting intelligence information from aerial
photographs. Itek will examine In detail the mechanical, physical, and
psychological factors which influence the productivity of the SAC opera-
tion, and make recommendations thereon. The program will describe in
detail how to make the best man-machine match and how to best utilize
existing equipment, and will produce recommendations for specific new
research end development that will contribute to SAC performance. Photo
analysis is an individual effort requiring complex decisions to be made
by the interpreter. At the same time, there are many facets of the
photo analysis operation that can be made more efficient and accurate
through proper equipment design and coordination, and through the appli-
cation of proper techniques. This will aid the individual to make those
decisions which he alone can make, both more rapidly and more accurately.
This Is the general philosophy that will guide the development of the
program.
General Approach
The program will consider two phases of photo analysis: the first
dealing with identification (what is it), and the second with installa-
tion location (where is it). Not only must identification and location
be accomplished accurately, but there is a constantly increasing pressure
to shorten the real time In which such data is prepared. It is recog-
nized that considerable overlap between the identification phase and the
positional phase must occur. The program will consider where such ovcr-
lap is advantageous, and where the operations should be distinct and
separate. Manpower and equipment availability will obviously affect
such decisions.
A team of ltek personnel, who possess appropriate security clearan-
ces, will spend a considerable amount of time at the 54th RTGp and the
8 RTS, specifically to examine the photo analysis techniques, problems,
equipment and Its utilization, and the present operations. The impact
of new types of reconnaissance photography, which will include high
volumes and various geometries, camera modes, formats, and scales, will
be examined. Additionally, itek will conduct a review of the existing
training programs for Photo interpreters, and study those pertinent
directives which detail the requirements for photo interpreters at the
SECTIrt
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various SAC levels. The filing and retrieval problems for both photo
and col lateral materials will also be examined as they apply to the
photo analyst.
Identification Phase
An analysis of the existing methods and techniques and of proto-
type and proposed new equipment will be made. The objective will be to
point out the strengths and weaknesses in the present system, and in
what direction research and development must go to strengthen the system.
Interfaces between equipments and techniques will be explored and/or
developed. Human engineering staff members will Insure that recommenda-
tions are based on sound man-machine matches. Primary consideration
will be given to developing techniques which will insure that the optimum
amount of intelligence information is extracted from photography ttrough
the preservation of original detail and the application of supporting
material from the graphic files or provided by other intelligence collec-
tion and exploitation systems.
Location Phase
This phase will deal directly with the Improvement of positional
information. The program will first determine the responsibility of all
contributing organizations, such as that of ACIC, to provide geodetic
base information and charts, and will study the accuracy requirements as
stated in SAC operational directives. Present and proposed methods,
equipment, mathematical techniques, and results will be studied. The
means for the best utilization of present equipment, including computer
programming and scheduling, will be explored. Methods for improving
positional accuracy, both by measurement from original material and by
improvement of analytical techniques, will be specified. Statements
concerning realistic accuracies, based on equipment errors and other
sources of errors, will be included. Methods of extension of location
Information, using either analog or digital computation, will be ex-
plored, and computer programs developed.
Pertinent Activities at Itek Corporation
As the team members define problems during the early months of the
study. Itek will devote some theoretical and some experimental efforts
to these problems. Complete optical, photographic and mechanical equip-
ment and qualified personnel are available as required to conduct such
studies. In addition, studies which have been made In these areas -dre-
viously, and which are available to ltek or this command, *ill be con-
sidered for their application to the problems outlined above.
Final Report
The final report will include, but not be limited to, the followings
)
An evaluation of existing techniques and equip-
ment used to extract intelligence Information
from serial photos and corollary information,
and recommendations for improving such techniques
and equipment.
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(2) Recommendations on means of increasing com-
patibility between various photographic in-
puts and special, or general, purpose equio-
ments.
Recommendations for new research and development
projects designed to improve SAC's photo analysis
capability.
Detailed SOP's that will assist SAC reconnaisance
technical units to implement recommended techniques.
ITEM II - Computer Programming
The principal tasks to be performed include analysis and detailed
programming to obtain solutions to a series of photogrammetric problems
using the ALWAC III-E digital computer. The following pohlts are in-
cluded in this task.
(i:)
will provide programming assistance to
ITEK Corporation for the problem of metric
analysis of aerial photography. Programming
assistance in this context Is meant to include
the mathematical analysis and the programming
and coiing efforts required in the application
of a digital computer to specific computational
tasks.
(2) A series of programs are to be created to in-
crease the problem-handling capabilities of the
existing computer system and to more adequately
satisfy the computational requirements of the
customer. The specific problems to be programmed
will be chosen in the interests of functional
necessity and compatibility with the over-all
requirements of the customer.
(3)
In addition to the above direct effort,
personnel assigned to this project will become
better acquainted with the general problem areas,
thus acquiring the necessary background for mak-
ing an evaluation of the over-all problem in the
event that a demand for increased information-
handling capabilities should be made.
ITEM III - Viewer Maintenance Training Program
A maintenance training program will be conducted at the contractor's
plant during the last thirty (30) days preceding delivery of the first
viewer. The training program will consist of formal classroom instruction
and include actual maintenance problems to be solved using the equipment.
Maintenance training manuals and visual aids, as required, will be pro-
vided.
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ITEM IV . viewer gyrational Training Program
An operational training program will be conducted at the user's
facility over a period of thirty (30) days subsequent to the delivery
of the equipment. This will cover the on-the-job training of personnel
In the operation of the equipment. It will consist of f(i-mal classroom
instruction and include demonstration in the solution of actual inter-
pretation and mensuration problems. Operational training manuals and
visual aids, as required, will be provided.
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INDEX OF GENERAL PROVISIONS
1. DEFINITIONS ? 1
2. CHANGES * 16
3* LIMITATION OF COST . 2
4. ALLOWABLE COST, FIXED FEE, AND PAYMENT 3
5. INSPECTION AND CORRECTION OF DtVECTS . 5
6, ASSIGNMENT OF CLAIMS 000 -00P613 7
7. RECORDS 411, #000800 ******** 0000030000066 7
8,
9. UTILIZATION OF SMALL BUSINESS CONCERNS OOOOOO ......P10
IO. TERMINATION O
il. EXCUSABLE DELAYS.. A430006000000 OOOO 43 15
12* DISPUTES... a OOOOOO 001,60-4413.30 OOOOOOOOOOO 001600604000015
13. NOTICE AND ASSISTANCE REGA1DING PATENT INFRINGEMENT,
14, Ea AMERICAN ACT 17
150 CONVICT LABOR .......17
16. EIGHT-.HOUR LAW OF 1912 17
17. NONDISCRIMINATION IN EMPLOYMENT 18
18, OFFICIALS NOT TO BENEFIT.... 19
19, COVENANT ACAINST CONTINGENT FEES ......... OOOOOOOO
O. PATENT PlCOOOO OOOOOO 19
21, GOVERNMENT PROPERTY 24
22. INSURANCE-LIABILITY TO THIRD PERSONS olipeeelocoa29
23, AUTHORIZATIC1 AND CONSENT.... OOOOOOOOO OOOOOOO
24. FILING OF PATENT APPLICATIONS 31
25. REPORTING OF ROYALTIES... OOOOOOO *es OOOOO 006 .01
26. RIGHTS IN DATA-UNLIMITED w 33
27. MILITARY SECURITY REQUIREMENTS 34
28. WALSH-HEALEY PUBLIC CONTRACTS
29, GRATUITIES.,, 36
30. NEGOTIATED OVERHEAD RATES 000004-4000046014^- O 0036
31. DELAY IN DELIVERY OF DLTA 00060000000000000 .037
32. SUPERSEDING SPECIFICATIONS?..??........ 37
33. FLIGHT RISK ?
34. ALTERATIONS .,039
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GENERAL PROVISIOS
D-77"ITIONS (ASPR 7-103.1 AFPI 7-403.1)
As used throughout this contract, the following terms shall
have the meanings set forth below:
(a) The term "Secretary" means the Secretary, the Under
Secretary, or any Assistant Secretary of the Department and the
head or any assistant head of the executive agency; and the term
"hie duly authorized representative" means any person or persons
or boar. (other than the Contracting Officer) authorized to act
for the Secretary,
(b) The term "Contractin7, Officer" means the person executing
thir contract on behalf of the Government, an'' any other officer
or civilian employee who is a properly designated Contracting
022icer; and the term includes/ except as otherwise provided in
this contract, the aaLhorized representative of a Contracting
Officer acting within the limits of his authority,
(c) Except as otherwise provided in this contract, the term
"subcontracts" inclvies purchase orders under this contract.
(d) 7-3C2.2) The term "contract work" means all work
to be r,rformed under this contract including any studies covering
fundamental, theoretical, or experimental investigatiens; any
ext- aion of the invetigative findings aid theories of a
scientific or technical nature into practical application; any
teeible items, hereinafter referred to as "supplies," furnished
to the Government; and any reports, data, computations, plans,
deeviings, and specifications with respect to any of the foregoing.
2. CHANGES (AM 7-403.2)
The Contracting Officer may at any time by a written order, make
changes in or additions to the drawings and specificatiors, issue
additional instructions, require additional work within the general scope
of the contract, or change the place of delivery, method of shipment,
or 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
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(CPFF Apr. 18, 158)
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other provision of this contract, an equitable adjustment shall be
made (i) in the estimated cost or delivqry schedule, or both, (ii)
in the amount of any fixed fee to be paid to the Contractor, and
(ti) in such other Trovisions of the contract as may be so affected,
aLl the contract shall be modified in writing accordingly. 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
Of-icer, 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.
LIMITATION OF COST (ASPR 7-203.3 AFRI 7-40303)
(a) It is estimated that the total cost 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 its 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 bdlieve
that the costs which it expects to incur in the performance of this
contract in the nex:, oncceeding thirty (30) days, when added to all
coets previously incurred, will exceed eighty-five percent (85%) of the
ezdmated cost then set forth in the Schedule, or if at any tine? the
Ceetractor has reason to believe that the total cost to the Govorreeent,
exelusive of any fixed fee, for the performance of this contract will
hc substantially greater or less than the then estimated cost thereof, the
Cel,ractor shall notify the Contracting Officer in writing to that
ef:ect, giving its revised estimate of such total cost for the
performance of this contract.
(b) The Government shall not be obligated to reimburse the
Contractor for costs incurred in excess of the estimated cost set
forth in the Schedule and the Contractor shall 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
Contracting Officer shall have notified the Contractor in writing that
such estimated cost has been increased 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
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extent that the estimated 60at set forth in the Schedule has been
increased, any cost incurred by the Contractor in excess 6f sudh
estimated cost prior to the increase in estimated cost shall be
al1:mable to the same extent as if such costs had beet incurred
after such increase in estimated cost.
A _OWe,PLF COST, FIXED FEE, AND PAYieEN,T (ASPR 7-203.4 AFFT 7-40304)
(a) For the performance of this contract, the Government shall
to the Contractor the cost thereof determined by the Contracting
0 icer to be allowable in accordance with Part 2 of Section XV of
t13 Armed Services Procurement Regulation as in effect on the date
oe this contract and the Schedele (hereinafter refer/ed to as "Allow-
able Cost"), plus such fixed fee, if any, as may be provided for in
the Schedule,
(b) Once each month (or at more frequent intervals, if approved
by the Contracting Officer) the Contractor may submit to an authorized
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 Alloweble Cost*
Each statement of cost shall be certified by an officer or other
responsible official of the Contractor authorized by it to certify
such statement,
(c) As promptly as may be practicable after receipt of each
invoice or voucher and statement of cost, the Government shall, except
as hereinafter provided and subject to the provisions of paragraph (d)
below, make payment thereon as approved by the Contracting Officer*
After payment of eighty-five percent (85%) of the fixed fee set forth
in the Schedule, as from time to time amended, further payment on
account of the fixed fee shell be withheld until a reserve of either
(i) fifteen percent (15%) of the total fixed fee or (ii) q0C,000,
wItchever amount is less, shall have been set aside, such reserve or
the balance thereof to be retained until the execution and delivery
cf a release by the Contractor as provided in paragraph (e) hereof.
(d) At any time or timisprier to final payment under this contract
tb, Contracting Officer may cause to be made such audit of the invoices
el vouchers and statements of cost as shall be deemed necessary. Each
payment theretofore made shall be subject to reduction to the extent of
lounts included in the related invoice or voucher and statement of cost
which are found by the Contracting Officer on the basis of such audit not
to constitute Allowable Cost, and shall also be subject to reduction for
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overpayment or to increase for underpayments on preceding invoioos
or vouchers. On receipt of the voucher or:invoice designatedby the
Contractor as the "completion voucher" or "Chmpletion invoice" and
statement of cost; which shall be submitted by the Contractor as
promptly as may be practicable following 'completion of the work under
this contract but in no event later than one (1) year (or such longer
period as the Contracting Officer may, in his discretion, approve in
writing) from the date of such completion,- and following compliance
by the Contractor with all provisions of this contract (including,
withot limitation, provisions relating to patents and the provisions
of pa7!agraphs (e) and (f) of this clause), the Government shall as
promptly as may be practicable pay any balance of Allowable Cost.
(e) The Contractor and each assignee under an assignment
entered into under this contract Ana in offoct at th6_tire. of_finta
payment under this contract shall execute and deliver at the time of
and as a condition precedent to final payment under this contract, a
release dis,:harging the :,:iovernment, its officers, agents and employaes
of ariL from all liabilities, doligations and claims arising out of or
unde,his contract, subject only to the following exceptions:
(1) Specified claims in stated amounts or in estimated
amounts where the amounts are not susceptible of
exact statement by the Contractor*
(2) Claims, together with reasonable expenses inciden?
tal thereto, based upon the liabilities of the
Contracto:,-- to third parties arising out of the per?
formance of the contract, which are not known to the
Contractor on the date of the execution of the
release, and of which the Contractor gives notice
in writing to the Contracting Officer not more than
six (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, which?
ever is earlier.
( 3 )
Claims for reimbursement of costs (other than
expenses of the Contractor by reason of its indem?
nification of the Government against patent liabil?
ity); including reasonable expenses incidental
thereto, incurred by the Contractor_under the
provisions of the contract relating to patents.
(f) The Contractor agrees that any refunds, rebates or credits
(including any interest thereon). accruing to or received by the
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Contractor or any assignee Which arise out of the performance of this
contract and on account of which the Contractor has received reimburse-
it shall be paid by the Contractor to the Government. The Contractor
ad each assignee under an assignment entered into under this contract
in effect at the time of final payment under this contract shall
execute and deliver at the time of and as a condition precedent to
final payment under this contract, an assignment to the Government of
refunds, rebates or credits (including any interest thereon) arising out
the performance of this contract, in form and substance satisfactore-
to the Contracting Officer. Reasonable expenses incurred by the
Contractor for the purpose of securing any such refunds, rebates or
credits shall constitute Allowable Cost when approved by the Contracting
Officer.
(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 determinfng the amount payable under
this contract, notwithstanding any provisions contelned in the npecifi-
catior, or other documents incorporated in this contract by reZenence,
Jesignating services to be performed or materials to be furnished by
the Contractor at ito expense or without cost to the Government.
(h) Payment of the fixed fee shall be made to the Contractor as
provided in the Schedule subject, however, to the withholding provisions
of paragraph (c) heeeof.
5. INSPECTION AND CORRECTION OF DEFECTS. (AFPI 7-403.5)
(a) All work ender this contract shall be subject to inspeetion
end test by the Government, to the extent practicable at all reasonable
thes and places including the period of performance, and in any event
eeior to final acceptance. The Contractor shall provide and maintain
en? inspection system acceptable to the Government covering the work
hereunder. The Government, through any authorized representative, may
inspect the plant or plants of the Contractor or of any of its subcon-
tractors engaged in the perfOrmence of this ccntract. If any inspection
or test is made by the Government on the premise of the Contractor or e:
subcontractor, the Contractor shall provide and shall require subece- -
tractors to provide all reasonable facilities and assistance for the
safety and convenience of the Government inspectors in the perfornance
of their duties. All inspections and tests by the Government Shall be
performed in such a manner as will not unduly delay the work. Final
inspection and acceptance by the Government shall be made as promntly as
practicable after delivery. The time and place of delivery, final
inspection, and acceptance shall be as set forth in the Schedulee
(b) The Contractor warrants that the services rendered in the
performance of this contract will conform to the requirements of this
contract and to hfgh professional standards in the field and that any
article delivered to the Government under this contract will conform
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to the requirements of this contract and will not be defective in material
or workmanship'
(c) At any time during performance of this contract, but not later
than sfoc (6) months (or such other period as may be provided in the
schedule) after final acceptance, the Government may require the Contractor
to remedy by correction or replacement as directed by the Contracting
C,fficee, any failure by the Contractor to comply with its obligations under
parag ,h (b) hereof. Except as otherwiSe provided in paragraph (d) hove?
of, the cost of any such replacement or correction shall be included in
"Allowable Cost" 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 ag An for acceptance unless the former tender and the require?
ment of correction is disclosed If the Contractor fails to proceed with
reasonable promptness to perform such replacement or correction, the
Governnont (i) nay by contract or otherwise perform such replacement or
correcton L.,' charge to the Contractor any increased cost occasioned
the Gc, ,rnmerti, thereby, or nay reduce any fixed fee payable under this
contrao!, (or require repaymont of any fixed fee theretofore paid) in such
amount as nay be equitable under the circumstances; or (ii) in the case
of articles not delivere0, may require the dolly ry of such articles and
shall have the right to 3-educe any fixed fee payable under this contract
(or to acquire repaymenb e any fixed foe theretofore paid) in such
amount as may be equitable ander the circumstances; or (iii) nay terminate
this contract for defauli as provided in the clause of this contract
entitled nTermination." Failure to agree on the amount of any such
increased cost to be charu:d to the Contractor or to such reduction in,
or repa:roent of, the fixed fee shall be a dispute concerning a question
of fact within the meaning of the clause of this contract entitled
"Disputes,".
(d) Notwithstanding the provisions of paragraph (c) hereof, the
Govermont may at any tile req*ire the contractor to remedy by correction
or replacement, without cost to the Governnent, any failure by the
Contractor to comply with its obligations under paragraph (0 hereof,
if such failure is due to fraud, lack of good faith, or willful nis?
conduct on the part of any of the contractorls directors or officers, or
on the part of any of its managers, superintendents, or other equivalent
representatives, who has supervision or direction of (i) all or
substantially all of the Contractorfs business; or (ii) all or substan?
tially all of the Contractor's operations at any one plant or separate
location in which this contract is being performed; or (iii) a separate
and complete major industrial operation in connection with the perform?
Ince on tl,is contract. Fraud, lack of good faith, or willful misconduct
-in the part of any of such supervis?:ry personnel shell be deemed to
include the selection of individual employees or the retention of employees
after any of such supervisory personnel has re_son ?to believe that such
.oployeos are habitually careless or otherwise unqualified4
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(e) Corrected articles tendered as replacements shall be subject to
the provisions of this clause in the sane manner and to the same extent
as suppies originally delivered under this contract.
(f) The Contractor shall make its records of all inspection work
available to the Government during the performance of this contract and
for such longer periods as may be specified in this contract.
(g) Except 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
eefective in materials or workmanship or otherwise not In conformity with
ale reLfirenents of this contract.
'8SIGI\T.L4E1\T OF CLAIIeS (ASPR 7-103.8 AFPI 7-403.6)
(a) Pursuant to the provisions of the Assignment of Claims Act of
t940 as amended (31 U.S. Code 203, 41 U.S. Code 15), if this contract
Nfteorovideo for ievments aggregating 1,000 or more, claims for monies due
3r to bcome due the Contractor from the Government under this contract
may be aesigned to a bank, trust company, or other financing institution,
eacludie2: any Federal Lending agency, and may thereafter be further
assigned and reassigned to any such institution. Any such assignment or
--easeignoent shall cover e.i.1 amounts payable under this contract and not
Lready paid, and shall no be made to more than one party, except that
riy- such assignment or re-e31gnment may be made to one party as agent or
rostee or two or more parties participating in such financing. Not-'
Jithstal ting any provision of this contract, payments to an assignee of
Ley monlos due or to become due under this contract shell not, to the
)%tent 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,
pecifications, or other similar documents relating to work under this
:ontract if marked "Top Secret", "Secret", or "Confidential", be
'tronished to any assignee of any claim arising under this contract or
any other person not entitled to receive the same; provided, That
copy of any part or all of this contract so narked may be furnished,
any information contained therein may be disclosed, to such assignee
.pon the prior written authorization of the Contracting Officer.
ECORDS (ASPR 7-203.7 AFP I 7-403.7)
(a)(1) The Contractor agrees to maintain books, records, documents
ad other evidence pertaining to the costs and expenses of this contract
aereinafter collectively called the "records") to the extent and in such
tail as will properly reflect all net costs, direct and indirect of
lbor, materials, equipment, supplies and services, and other costs
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and expendes of whatever nature for which reimbursement is claimed under
to revisions of this contract* The Contractors accounting procedures
?2.'d 1,, ticos shall be subject to the approval of t'ae Contracting Officer;
proViC:.2d, however, that no material change will be required to be made
in the Contractor's accoUnting procedu?nSoand practices if they conform
to generally accepted accounting practices and if the costs properly
applicable to this contract are readily ascertainable thorefrom.
(2) The Contractor agrees to make available at the office of the
Contractor at all reasonable tines during the period set forth in sub-
parag' .ph (4) below any of the records for inspection, audit or repro-
duct a by ai authorized representative of the Contracting Officer*
(3) In the event the Contracting Officer or any of his duly authorized
representatives determines that his audit of the amounts reimbursed under
this c ntract as transportation charges will be made at a place other
than tie office of the Contractor, the Contractor agrees to deliver, with
tho reimbursement voucher covering such charges or as may be otherwise
War' specIfied within two years after reimbursement of charges covered by any
such voucher, to such representative as nay be designated for that
purpose through the Contracting Officer such documenti,r:y evidence in
support of transportation costs as may be required by the Contracting
Officer or any of his duly authorized representatives*
(4) Except for documentary evidence delivered to the Government
pursnunt to subparagraph 0) above, the Contractor shall preserve and
make available its records for a period of six years (unless a longer
period of tine is provided by applicable statute) from the date of the
voucher or invoice submi,ted by the Contractor after the completion of
the work under the contract and design-ted by the Contractor as the
ccomItion voucher" or "completion invoice" or, in the: event this con-
tract has boon completely terminated, from the date of the termination
settler-lent agreement; provided, however, the records which relate, to
(A) appeals under the clause of this contract entitled "Disputes",
%my (13) litigation or the settlement of claims arising out of the performance
of this contract, or (C) costs or expenses of the contract as to
which exception has been taken by the Contracting Officer or any of his
duly autherIzcd representatives, shall be retained by the Contractor
until ouch appeals, litigation, claims, or exceptions have been disposed
of, but in no event for less than the six-year period mentioned above*
(5) Except for documentary evidence delivered pursuant to sub-
paragi (3) above, and the records described in the proviso of sub-
para r :h (4) above, the Contractor may in fulfillment of its
(blip., _ion to retain its records as required by this clause substitute
phot ,raphs, Iricrophotographs or other authentic reproductions of such
reco,r1s, after the expiration of two years following the last day of
the:tonth (f roiiihnrsellont h,o the Contractor of tho invoice or voucher
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to which such records relate, unless a shorter period is authorized by
the Contracting Officer with the concurrence of the Comptroller of the
Ceacting Government Agency or his authorized representatives.
(6) The provisions of thyara- aph (a), including this sub-
pa:aayaph (6), shall be applicable to and included in each subcontract
hca-under 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 sub-
contracts hereunder, other than those set forth in subparaaraph (a)
(6) above, a provision to the effect that the subcontractor agrees that
the. Contracting Officer 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, ahd records of such subcontractor
involving transactions related to the subcontract. The term "sulJ-
centract," as used in this paragraph (b) only excludes (i) purcI-Lae
orders net exceeding 1,000 and (ii) subcontracts or purchase orders
for public utility services at rates established for uniform applic-
ability to the general public.
80 SUBCONTRACTS (ASPR 7-203.8 AFPI 7-403.8)
(a) The Contra-tor shall give advance notification to the Con-
tracting Officer of -ay proposed subcontract hereunder which (i) is
on a cost or cost-plus-a-fixed-fee basis, or (ii) is on a fixed-price
basis exceeding iN dollar amount either 25,000 or five percent (5%)
of the total estimate.; cost of this contract.
(b) The Contractor shall not, without the prior written consent
of the Contracting Officer, place any subcontract which (i) is on a
cout or cost-plus-a-fixed-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 cost of this contract, or (iii) provides for the
fabrication, purchase, rental, installation or other acquisition, of
any item of induetrial 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, or (v) involves research and development work. 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 (b).
(c) The Contractor agrees that no subcontract placed under this
contract shall provide for payment on a cost-plus-a-percentage-of-cost
basis.
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(d) The Contracting Officer may, in his discretion, specifically
approve in writing any of the provisions of a suhcontract. However,
such approval or the consent of the Contracting Officer obtained as
required by this clause shall not be construed to constitute a deter-
mination of the allowability of any cost under this contract, unless
such approval specifically provides that it constitutes a determination
of the allowability of such cost.
(o) The Contractor shall give the Contracting Officer innediate
notice in writing of any action or suit riled, and prompt notice of
any iiro made against the Contractor by any subcontractor or vendor
which; in the opinion of the Contractor, may result in litigation,
rolat d in any way to this contract with respect to which the Con-
tractor may be entitled to reimbursement from the Government.
(f) (AFPI 7-203.8) The Contracting Officer nay approve all
or part of the Contractorts purchasing system and from time to time
rescind or reinstate such approval. Such approval shall be deemedNew' to fulfil the requirements for obtaining the Contracting Officorts
consent to subcontracts as prescribed in paragraph (b) above.
UTILIZATION OF SNAIL BUSINESS CONCERNS (AsPR 7-104.14 Am 7-403.9)
(0,)
Congrels
concrnns
It is the policy of the Government as declared by the
to bring about the greatest utilization of small business
which is consistent with efficient production.
(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 perforLAnce of this contract.
TERMINATION (ASPR 8-702 AFPI 7-403.10)
(a) The performance of work under the contract nay be terminated
by the Government in accordance with this clause in whole, or from tine
to time in part, (1) whenever the Contractor shall default in performance
of this contract in accordance with its terms (including in the torn
"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 cure such default within n period of tsn days (or such
longer periods as the Contracting Officer nay allow) after receipt from
the Contracting Officer of a notice specifying the default, or (2) when-
ov r for any reason the Contracting Officer shall doternine 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
terminati n of this contract for default under (1) above, it is
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determined 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 (2) above, and the
rights and obligations of the parties. hereto shall in such event be
governad accordingly.
(b) After receipt of a Notice of Termination and except as other-
wise directed by the Contracting Officer, the Contractor shall (1) stop
work under the contract on the date and to the extent specified in the
Notice of Taminataana,(2) place no further orders ow suboortrvets for
materitde, services, or fadilIai-ea exoapt as may be necessary for cam-
pletion of such portion of the work under the contract as is not
terminated; (3) terminate all orders and subcontracts to the extent that
they relate to the performance of work terminated by the Notice of
Termination; (4) 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 orders or subcontracts so
terminatedlin 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; (5) with the approval or
ratification of the Contracting Officer, to the extent he may require,
which approval or ratification shall be final and conclusive for all
purposes of this caeuse, settle all outstanding liabilities and all
claims arising out of such termination of orders and subcontracts the
cost of which would be reimbursable, in whole or in part, in accord-
ance with the provisions of this contract; (6) transfer title (to the
extent that title has not already been transferred) and, in the manner,
to the extent, and at the times directed by the Contracting Officer,
deliver to the Government (i) the fabricated or unfabricated parts, work
in process, completed work, supplies, and other material produced as a
_part of, or acquirod in xaspect of tne performance of, the work terminated
a by the Notice of Termination, (ii) the Completed' or paftially coral:let:3d
as 'drawings, information, and other property which, if the contract
had been completed, would be required to be furnished to the Government,
and (iii) the jigs, dies, and fixtures, and other special tools and toolir,
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; (7) use its 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
provision (6) of this paragraph, provided, however, that the Contractor
(i) shall not be required to extend credit to any purchaser, and (ii)
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
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.Contrac-APrPrirdeedrrRelease ,i9Alig9L:t19.1Actipell?Viin?fPgl???,g8-P2Zi
price or cost of the work covered by this contract or paid in such other
manner as the Contracting Officer may direct; (8) complete performance
of such part of the work as shall not have been terminated by the Notice
of Termination; and (9) take such action as may be necessary, or as the
Contracting Officer may direct, for the protection and preservation of
the property related to this contract which is in the possession of the
Contractor and 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 in determining or adjusting
the amount of the fixed-fee, or any item or reimbursable cost under this
clause. At any time after expiration of the plant clearance period, as
defined in Section VIII, Armed Services Procurement Regulation, as it
may be amended from time to time, the Contractor may submit to the
Contracting Officer a list, certified as to quantity and quality, of any
or all items of termination inventory not previously disposed of,
exclusive of items the disposition of which has been directed or author-
ized by the Contracting Officer, and may request the Government to remove
each items or enter into a storage agreement covering them. Not later than
fifteen (15) days thereafter, the GOvernment will accept title to such
items and remove them or enter into a storage agreement covering the
same, provided that the list submitted shall Ile 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 date of submission of
the list, and any necessary adjustment to correct the list as submitted
shall be made prior to final settlement.
(c) After receipt of a Notice of Termination, the Contractor shall
submit to the Contracting Officer its termination claim in the form and
with the certification prescribed by the Contracting Officer. Such
claim shall be submitted promptly but in no event later than two years
from the effective date 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 two-year period or authorized
extension thereof. However, if the Contracting Officer determines that
the facts justify such action, he may receive and act upon any such
termination claim at any time after such two-year period or any extension
thereof. Upon failure of the Contractor to submit its termination claim
within the time allowed, the Contracting Officer may determine, on the
basis of information available to him, 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 (c), the Contractor
and the Contracting Officer may agree upon the whole or any part of the
amount or amounts to be paid (including an allowance for the fixed-fee)
to the Contractor by reason of the total or partial termination of work
pursuant to this clause. The contract shall be amended accordingly,
and the Contractor shall be paid the agreed amount.
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(e) In the event of the failure of the Contractor and the
Contracting Officer to agree in whole or in part, as provided in
peeat;raph kd) above, as to the amounts with respect to costs and
-ed-fee, or as to the amount of the fixed-fee, to be paid to the
C:::tractor in connection with the terpination of work pursuant to this
eL,e,se, the Contracting Officer shall determine, on the basis of
d rmation available to him, the amount, if any, due to the
C, tractor by reason of the termination and shall pay to the
C. itractor the amount determined as follows:
(1) If the settlement includes cost and fixed-fee
(i) There shall be included therein all costs and
expenses reimbursable in eccordance with this contract, not previeusly
paid to the Contractor for the performance of this contract pric:- to the
effective date of the Notice of Termination, and such of these costs as
ccntinue for a reasonable time thereafter with th3 ap:eev-_7 of or
aireoued by the Teertracting Officer, provieel, he..;ver, thc. -e
Contractor shall proceed aF rapidly as practicable to discontiae3
such costs.
(ii) There shall be included therein so far as e
included under (i) above, the cost of settling and paying cla s ar! ,ing
ort of the terminat%en of work under subcontracts or orders, C3 provided
in paragraph (b)(5) above, which are properly chargea ble to the terminated
portion of the contract.
(iii) There shall be included therein the reasonable costs
of eettlement, including accounting, legal, clerical, and other expenses
reasonably necessary for the preparation of settlement claims and
se-eorting data with respect to the terminated portion of the contract
arai for the termination and settlement of subcontracts thereunder,
toether 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
Ccntractor there shall not be included any amounts for the preparation
of the Contractorts settlement proposal.
(iv) There shall be included therein a portion of the
fixed-fee payable under the contract determined as follows:
(A) In the event of the termination of this
contract for the convenience of the Government and not for ti,e1 default
of the Contractor, there shall be paid a percentage of the fee equivalent
to the percentage of the completion of work contemplated by the contraet,
leee fieed-fee payments preTriously made hereunder.
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(B) In the event of the termination of this
contract for the default ef the Contractor, the total fixed-fee peyable
shall be such proportionate part of the fee (or, if this contract
calls for articles of different types, of such part of the fee as is
rreqonably allocable to the type of articles under consideration) as the
nuabe 02 artic]es delivered t& and accepted by the Governacnt
be,rs to the total number of articles of a like kind called fo'? by this
contract.
If the amount determined under this paragrarh is
lees than the total payment of fixed-,fee theretofore made to tee
Contractor, the Contractor shall repay to the Government the excese
amount.
(2) If the settlement includes only the fixed-fee the
amount, thereof will be determined in accordance with subparrraph (e)
(1)(iv) above.
(f) The Contractor shall have the right of appeal, under the
clause of this contract entitled "Disputes," from any determinatiee
made by the Contracting Officer under paragraphs (c) cr (e) above, except
that if the Contractor has failed to submit its claim within the time
provided in paragraple (c) above and has failed to request extension of
seeh time, he shall have no such right of appeal. In any case where
the Contracting Officer has made a determination of the amount due
ue ar paragraph (c) or (e) above, the Government shall pay to the
Ccetractor the follow'ng: (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 (1) all unliquidated advance or other
un'elidated payments theretofore made to the Contractor, (2) any
claim which the Government may have against the Contractor in
connection with this contract, and (3) 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 clause
and not otherwise recovered by or credited to the Government.
(h) In the event of a partial termination, the portion of tho
fixed-fee which is payable with respect to the work under the continued
portion of the contract snail be equitably 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
condtioes as it may prescribe, make partial payments and ?ayments
on accouet against costs incurred by the Contractor in connection with
the tere-inated portion of the contract whenever in the opinion of the
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Contracting Officer the aggregate of such payments shall be within the
amount to which the Contractor will be entitled hereunder. If the total
ef such paynents is in excess of the anount finally determined to be duo
under this clause, such excess shall be payable by the Contractor to the
Governaent upon demand, together with interest computed at the rate of
6% per annum, for the period fron the date such excess payment is received
by the Contractor to the date on which such excess is repaid to the Govern-
ment; provided, however, that no interest shall be charged with respect to
any esc naynont attributable to a reduction in the ContracterTs
',Jason of retention or other disposition of termination inventory
until ten days after the date of such retention or disposition.
(,;) The provisions of this clause relating to the fixed-fee shall
be inapplicable if this contract does not provide for paynent of a fixed-
fee.
(k) Unless otherwise provided for in this contract, or by applicable
statute, the Contractor fron the effective date of termination and for
Nov a period of six years after final settlement under this contract, shall
preserve and make available to the Governmunt at all reasonable tines at
the office .of the Contractor, but without direct charge to the Govern-
ment, all its books, records, documents, and other evidence bearing on
the cost and expenses of the Contractor under this contract and relating
to the work terminated hereunder, or, to the extent approved by the
Contracting Officer, photographs, .licrophotographs, or other authentic
reproductions thereof.
EXCUSiJ ,E DELAYS (ASPR 7-203.11 AFPI 7-303.10)
(a) The Contractor shall not be in default by reason of any failrre
in performance of this contract in accordance with its terms (including.
any failure by the Contractor to make progress in the prosecution of the
work hereunder which endangers such perfornanco) if such failure arises out
of causes beyond the control and without the fault or negligence of the
Contractor. Such causes include, but are net rustricted to: acts of God
or of the public enemy; acts of the Government; fires; floods, epidemics;
quarantine restrictions; strikes; freight embargoes, unusually severe
weather; anl failure of subcontractors to perform or nake progress due to
such causes, unless the Contracting Officer shall have deteriAned that the
supplies or services to be furnished under the subcontract were obtainable
fron other sources and shall have ordered the Contractor in writing to
procure such services or supplies from such other sources, and the Contractor
shall have failed reasonaily to comply 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 such failure was occasioned
by any one or more of the said causes, the delivery schedule shell be
revised accordingly, subject to the rights of the Government under the
clause hereof entitled nernine.tion".
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Neof
I" tho Contractor becomes unable to complete the contract work
rlo.Livery at the tine specified in the Schedule because of technical
affieuitics? notwithstanding the exercise of good faith and diligent
efforts in the performance of the work called for hereunder, it nay give
the Contracting Officer written notice of the anticipated default with
reasens therefor, Such notice and reaspno shall be delivered not loss
than forty-five (45) days before the completion data specified in the
Schedule or within such tine as tho Contracting Officer deems sufficient.
If such notice is duly given, then to the extent the interest of tho
Government makes an extension desirable the Contracting Officer may, in
his discretion, extend the period of tine specified in the Schedule for
such period as he dooms advisable, and this contract shall then be modified
in writing accordingly.
DISPUTES (ASPR 7-103.12 AFPI 7-403.12)
(a) Except as otherwise provided in this contract, any dispute
concerning a question of fact arising under this contract which is not
disposed of by agreement shall be decided by the Contracting Officer, who
shall r-duce his decision to writing and mail or otherwise furnish a
copy th )reof to the Contractor. The decision of tho Contracting Officer
shall be final and conclusive unless, within 30 days from the date of
receipt of such copy, the Contractor nails or othcrwise furnishes to the
Contracting Officer a wr:'ten appeal addressed to the Secretary, The
decision of tho Secretary or his duly authorized representative for the
acternin.tien of such appeals shall be final and conclusive unless
deter,ined by a court of competent jurisdiction to have been fraudulent,
or capricious, or arbitr-ry, or so grossly erroneous as nocesarily to
imply bad faith, or not supported by substantial evidence. In connection
-ith 4r)-1 proceeding under this clause, tho Contractor shall be
-Ifferd, el an cpportunity to be he-rd and to offer evidence in support of
Its appal, Pending final decision of a dispute hereunder, the Contractor
shall proceed diligently with tho performance of the contract and in
accordance with the Contracting Officers decision.
(1))
This "Disputes" cl.uso does not preclude consideration of law
laostions in connection with decisions provided for in paragraph (a)
'rove,: Provided, That nothing in this contract shall be construed as
making find the decision of any administrative official, representative, or
board on a question of law.
NOTICE lND _ASSITANCE PAGALDING PATENT INFRINGTLENT (ASPR 9-104 APPI 7-404.13)
The previsions of this clause shall be applicable only if the amount
-f this c,nta.-et is in excess of c.5,000.
(a) The Contractor shall report to the Contracting Officer, promptly
dad in reasonable written detail, each notice or claim of patent infringe-
lent b-od on the porformanco of this contract of which the Contractor
as Imov2odge.
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(b) In the event of litigation against the Government on account of
any claim of patent infringement arising out of the performance of this
contr ct or out of the Use of any supplies furnished or work or services
performed hereunder, the Contractor shall furnish to the Gov,rnnent, upon
request, all evidence and infer .ation in posSession of the Contractor
pertaining to such litigation, Such evidence and information shall be
furnished at the expense of the Government except in those cases in which
thc Contractor has agreed to indemnify the Government against the claim
being assorted,
BUYA1,1=ICAN ACT (ASPR 7-103414 AFPI 7-403.14)
(a) In acquiring end products, the Buy Am:Tican Act (41 U,S, Code
10a-d) provides that the Government give preference to domestic source
end products, For the purpose of this clause:
(i) "Components" means those articles, materials, and supplies,
which are directly incorporated in the end products;
(ii) "end products" moans those articles, materials, and supplies,
which are to be acquired under this contract for public use; and
(iii) a "domestic source end product" means an unmanufacturod
end product which has been mined or produced in the United States and (B)
an end product manufactured in the United States if the cost of the
components thereof which ore mined produced, or manufactured in the United
Ctate ---ceeds 50 percent of the cost of all its components, For the
wrp_sos of the (a)(iii)(1i, components of foreign origin of the same type
or kind as the products referred to in (b)(ii) or (iii) of this clause
shall be treated as components mined, produced, or manufactured in the
United States
(b) The Contractor agrees that there will bo delivered under this
contract only domestic source end products, except end products:
(i) which are for use outside the United States;
(ii) which the Government determines are not mined, produced, or
manufactured in the United States in sufficient and reasonably available
commercial quantitius and of a satisfactory quality;
(iii) as to which the Secretary determines the domestic preference
to be Inc n,istent with the public :interest; or
(iv) as to which the Secretary determines the cost to the Govern-
.-rt be unreasonable.
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CCNVICT LABOR (ASPB 12-203 AFPI 7-40..15)
In connection with the performance of work under this contract,
the C-litractor agrees not to employ any person undergoing sentence of
impr%.nment at hard labor.
EIGH1 HOUR LAW OF 1912 (ASPR l2-303.1 FPI 7-403.16)
This contract, to tho extent that it is of a character specified in
the Eight-Hour Law of 1912 as amended (40 U.S. Code 324-326) and is not
covered by the Walsh-Healey Public Contracts Act (41 U.S. Code 35-45)/ is
subject to the following provisions and exceptions of said Eight-Hour
Law of 1912, as amended, and to all other provisions and exceptions of
said Law:
No laborer or mochanic doing any part of the work contemplated by
this contract, in the ollploy cf the Contractor or any subcontractor
contracting for any part of the said work contemplated, shall be required
or peiaitted to work more than eight hours in any one calendar day upon
such work, except upon the condition that compensation is paid to such
laborer or mechanic in accordance with the provisions of this clause.
Tho wages of every laborer and mechanic employer' by the Contractor or
any subcontractor engaged in tho performance of this contract shall be
ponputed en a basic day rate of eight hours per day; and work in excess
of eight hours per day Is permitted only upon the condition that evory
such laborer and mechanic shall be compensated for all hours worked in
excess of eight hours per day at not loss than one and one-half times the
basic rate of pay. For each :Violation of the requirements of this clause
a pflno,by of five dollars shall be imposed for each laborer or mechanic for
every oalendlr day in which such enployce is required or permitted to
labor more than eight hours upon said work without receiving compensation
computed in accordance with this clause, and all penalties thus imposed
shall be withhold for the use and benefit of the Government.
NONDISCR1LINATION IN TiliPLOYI.ENT (ASPR 12-802 AFPI 7-403.17)
(a) In connection with the performance of work undor this contract,
the Contractor agrees not to discriminate against any employee or applicant
for employment because of race, religion, color, or national origin. The
aforesaid provision shall include, but not be limited to, the following:
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 apprenticoship. The
Contractor agrees to post hereafter in conspicuous places, available for
employees and applicants for employnont, notices to be provided by tho
Contracting Officer setting forth the provisions of tho nondiscrimination
clause.
(b) The Contractor further agrees to insert the foregoing provision
in all subcontracts hereunder, except subcontracts for standard commercial
supplies or raw materials.
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OFFICIALS NOT TO PENNEFIT (ASPR 7-103.19 AFPI 7-403.18)
No member of or delegate to Congress, or resident commissioner,
sh-la u '2 Atted 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 made with a corporation for
its ge,eral benefit.
COVENANT AGAINST CONTINGENT FEES (11SPR 7403.20 AFPI 7-403.19)
The Contractor warrants that no person or selling agency has
been aaployed or retained to solicit or secure this contract upon
an agreement or understanding for a commission, percentage, broker-
age, or contingent fee, excepting bona fide employees or bona fido
established commorcial or selling agencies maintained by thc 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 liaLlity or in its discretion to deduct from the contract
price or consideration, or otherwise recovor, the full amount of such
commiscicn, percentage, brokerage or contingent fee.
PATENT idGHTS (ASPR 9-107 AFPI 7-403.20)
(a) As used in this clause, the following terms shall have the
meanings set forth below:
(i) The tern "Subject Invention" means any invention,
improvement or discovery (%Thethor or not patentable) conceived or first
a2tually 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,
develormontal, 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 "Subject 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 tern "Technical Personnel" means any person employed
by or working under contract with the Contractor (other than a sub-
contractor whose responsibilities with respect to rights accruing to
the Government in inventions arising under subcontracts sot forth in
paragraphs (g), (h), and (i) below) who, by reason of the nature of
his duties in connection with the p rfornanco of this contract, would
reasonably be expected to make inventions.
(iii) The terms "subcontract" and "subcontractor" mean any
subcontract or subcontractor of the Contractor, and any lower-tier
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subcontract or subcontractor under this contract.
(b)(1) The Contractor agrees to and does hereby grant to the
Government an irrevocable, nonexclusive, nontransferable, 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 and disposition according to law, of any article or
material, and in the use of any nethod. No license granted heroin
shall convoy any right to the Government to manufacture) have manufactured,
or use any Subject Invention for the purpose of providing services or
suppli s to the g neral public in conpotition with the Contractor or
the Cc itractorts conLorcial licensees in the licensed fields.
(2) With respect to:
(i) any Subject Invention made by other than Technical
Personnel;
(ii) any Subject Invention conceived prior to, but first
actually reduced to practice in the course of, any of the experiment-0,
developmental, or research work specified in (a) (i) al,ove; and
(iii) the practice of any Subject Invention in foreign
countries; the obligation of the Contractor to grant a license, as
provided in (b)() above; to convey title as provided in (d)(ii)(B)
or (d)(1v) below, and to convey foreign rights as provided in (e)
below; shall be limited to the extent of the Contractor's right to
grant the sane 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 domed to
grant any license under any invention ether than a Subject Invention.
(c) The Contractor shall furnish to the Centracting Officer the
following information and reports concerning Subject Invention which
reasonably appears to be patentable:
(A) 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 bcThc.lf 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
throe .!_nths 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
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(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 Contractor 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, decidea not to file ?or cause to be filed said application,
taD Contractor shall so notify the Contracting Officer at the earliest
practicable date and in any event not later than eight months after
first aublication, public use or sale.
(ii) if the Contractor-specifies that a United States
patent application claiming such Invention has not been filed and will
/ t be filed (or having specified that such an application will be
!,led thereafter notifies the Contracting Officer to the contrary),
tae Contracting Officer shall:
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 mtractor, stating the date and identity of such
publication or contemplated publication; and
(B) convey to the Government the Contractor's entire
ri-'at, title, aad interest in such Invention by deliverying to the
u Officer non written request such duly executed instruments
aTared 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 right of the Contractor
specified in (e) below to file foreign applications, and subject
further to the reservation of a non-exclusive and royalty-free
license to the Contractor (and to its existing and future associated
and affiliated companies, if any, within the cori orate 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
laiention pertains;
(iii) the Contractor shall furnish promptly to the
Contracting Officer on request an irrevocable power of attorney to
in-_ect and make copies of each United States patent application
fed by or on behalf of the Contractor covering any such
Iavention;
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(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
Ccltractinc: Officer not less than sixty days before the expiration of
t response period and, upon written request, deliver to the Contracting
Cicer such duly executed instruments (prepared by the Government) as
a-e deemed necessary to vest in t,he -Government the Contractor's entire
rieht, title, and interest in such Invention and theelication, subject
t- the reservation as specified in (d)(ii) above; and
(v) the Contractor shall deliver to the Contracting Officer
ely executed instruments fully confirmatory of any license rights
herein agreed to Le granted to the Government.
(e) The Contractor, or those other than the Government deriving
rights from the Contractor, shall have the exclusive rights to file
applications on Subject Inventions in each foreign country within:
(i) nine months from the date a corresponding United States
a:plication is filed;
(ii) six months from the date permission is granted to file
foreign application e 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, convey to tlee 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 non-exclusive and royalty-free license
to the Contractor together with the right of the Contractor to grant
sublicenses, which license and right shall be assignable to the
suecessor 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
P! own to be due in accordance with any interim report delivered under
(c)(ii) or otherwise known to be unreported, there shall be withheld
2rom payment until the Contractor shall have corrected such failures
either ten percent (10%) 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 percent (SO%) of the amount of this contract,
as from time to time amended, payment shall be withheld until a reserve
of either ten percent (10%) of such amount, or five thousand dollars
(50000), whichever is less, shall have been set aside, such reserve
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or balance thereof to be retained until tho Contractor shall have
furnished to the Contracting Officer
(i) the final report required by (c)(iii) above;
(ii) 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)(ii) above or in accordance with such final
reports or are otherwise known to be unreported; and
(iii) the information as to any subcontractor required by (h)
below. The maximum amount which my be withhold under this paragraph
(f) shall not exceed ten percent (10%) of the amount of this contract or
five thousand dollars (;>5,000)1 whichever is loss, and no amount shall
be withheld under this paragraph (f) whop the amount specified by this
paragraph (f) is being withheld under other provisions of this contract.
Tho withholding of any amount or subsequent payment thereof to the
Contractor shall not be construed as a waiver of any rights accruing to
the Go/eminent under this contract. This paragraph (f) shall not he
eonstraed as requiring the Contractor to withhold any amounts from a
subcontractor to enforce compliance with patent provisions of a subcontract.
(g) The Contractor shall exert all reasonable effort in negotiating
for the inclusion of this Patent Rights clause in any subcontract here?
under of three thousand dollars (31000) or more having exp'rinental,
developmental, or research work as one of its purposos. In the event of
refusal by a subcontractor to accept the Patent Eights clause, the
Centracter shall not proceed with the subcontract without written
authorization of the Contracting Officer, and upon obtaining such
authorization, shall cooperate with the Government in the negotiation
with such subcontractor of an ac eptablo patent rights clause; provided,
however, that the Contractor shall in any event require the subcontractor
to grant to the Government patent rights under Subject Inventions of no
loss scope and on no less favorable terns than those which the Contractor
has under such subcontracts, except that in no event shall the subcontractor
be required to grant to the Government patent rights In excess of those
herein agreed to be granted to the Government by the Contractor.
(h) The Contractor shall, at the earliest practicable date, notify
the Contracting Officer in writing of any subcontract containing a
patent rights clause, furnish the Contracting Officer a copy of such
clause, and notify the Contracting Officer when such subcontract is
completed. It is understood that with respect to such subcontract
clause, the Government is a third party beneficiary, and thc Contractor
hereby assigns to the Government all the rights that the Contractor would
have to enforce the subcontractorls obligations for the benefit of the
Government with respect to Subject Inventions. The Contractor shall not
be obligated to enforce the agreements of any
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suocontractor hereunder relating to Subject Inventions.
(i) When the Contractor shows that it has been delayed in
the performance of this contract by reason of its inability to obtain
in accordance with (g) above a suitable patent rights clause from a
qualified subcontractor for any item or service required under this
contract for which the Contractor itself does not have available
facilities or qualified personnel, the Contractorls delivery dates
sleall be extended for a period of time equal to the duration of such
clel.ay; and, upon request of the Contractor, the Contracting Officer
shall determine to what extent, if any, an additional extension of
the delivery dates and an increase in contract prices based upon
adtAtioral cost incurred by such delay are proper under the
ci-ecumstances; and the contract shall be modified ace.ordirgly. If
the Contractor, after exerting all reasonable effort, is uaable to
obtain a qualified subcontractor as set forth above, the Contractor
may submit to the Contracting Officer a written request for waiver or
modification of the reouirement that a suitable patent rights clause
be included in the subcontract.
Such request shall specifically state that the Contractor has
used all reasonable effort to obtain such qualified subcontractor, and
shall cite the waiver or termination provision hereinafter set forth.
If, within thirty-five (35) days after the date of receipt of such
request for a ativer or modification of said requirenent, the Contracting
0-rlicer shall fail to deny in writing such request, the requirement
shall be deemed to have been waived by the Government. If within such
pc--_od the Contractor shall receive a written denial of such request by
the Contracting Officer, this contract shall thereupon automatically
teminate and the rights and obligations of the parties shall be govern-
ed by the provisions of the clause of this contract providing for
termination for the convenience of the Government.
21. GOVERMENT PROPERTY (aSPR 13-503 AFPI 7-403.21)
(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, tcgother 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 as "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 sufficient
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,
make a determination of the delay occassioned the Contractor and shall
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oquitably adjust the estimated cost, fixed fee, or delivery or performance
dates, or all of tho.,, and any other contractual previsLns affected
by such delay, in accordance with the procedures provided for in the
clause of this contr,Ict entitled "Changes." In the event that Govern?
ment?furnished Property is received by the Contractor in a condition
not suitable for tho intended use, the Contractor shall, upon receipt
thereof notify the Contracting Officer of such fact and, as directed
by the Contracting Officer, either (i) return such property at the
Govern: entYs expense or otherwise dispose of the propJrty or (ii)
ei.ffect repairs or :Iodifications. Upon completion of (i) or (ii) above,
the Contracting Officer upon written request of tho Contractor shall
equitably adjust the estimated cost, fixed fee, or delivery or performance
dates, or all of thet,? and any other contractual provision affected
by the return or disposition, or the repair or modification/ in accord?
ance with tho procedures provided for in tho clause of this contract
entitled "Changes." The foregoing provisions for adjustment arc exclusive
and th- Govornm,nt sha11 not be liable tc suit for br,ach of contract
01400 by re son of any C.1.-T in delivery of Government?furnished Property
or delivery of such prop,rty in a condition not suitable for its
intended use.
(b) Title to all property furnished by the Government shall remain
in the Govermunt. Titl, to all prop, rty :urchased by tho 6ontracter,
for the cost of which the Contractor is entitled to be reimbursed as a
direct item of cost under this contract, shall pass to and vest in the
Government upon delivery of such property by the vunflor. Title to
other property, the cost of which is rciolursable to the Contractor
under this contract, shaa.1 pass to and v st in the Government upon (i)
issuance for use of such property in the performance of this contract,
or (ii) co'n)nceracnt of processing or use of such property in the
perforclance of this contract, or (iii) reimbursement of the cost thereof
by tho Government, whichever first occurs. All Government?furnished
Property, tog thsr with all property acquired by the Contractor title
?1100 to which vests in the Government under this paragraph, are subject
to th., provisicns of this clause and are hereinafter collectively
referre1 to as "Government Prcporty."
(c) Title to the Goverment Property shall not be affected by tho
incorporation or attachlacnt thereof to any property not owned by tho
Government, 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 maintain adequate
property control records of the Government Property and shall identify
the Government Property as such in accordance with the requirements
of the 'Irianual for Control of Government Property in Possession of
Contractors" (Appondix B1 Armed Services Procurement Regulation), as
in effect on the date of tho contract, which Manual is hereby incor?
porated by reference and ria:Ir: a part of this contract.
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(d) The anverrIpent Froperty Provided (Jr furnished pursuant te
the terTr:s of this contract shill, 144-b'S otherwise -,;rovided herein,
be used only fox the performance of ,this contract.
(s) The Contractor shall naintain and adrainister, in accordance
with sound industrial practise, a progr-m for the maintenance, repair,
protection and preoervatien of acvnt provrty, so as to assure
its full availabi4ty and. usefua.nesS fon the performnce of this
tOntract. The. Contract4r.sholi take all reasonable steps to comply
with ali. appropriate directions or ,instructions which the Contracting
Officer ray prescribe as reasonably necessary for the protection of
GoveInment property.
.f.`) (4) Th Contractor shall not be liable for any loss ef or
JPi to the CJevernment property, or for expenses incidental to
such loss or dam.age, except that the Contractor shall be responsible
Mr any such lnss r (2anage (including expenses incidental thereto)
(1-) 141%..ih results frou wilful misconduct or lack of good faith on the
part .of any of the Contractors directors or officers, or on the part
of any of its nanagers, superintendonts, or other equivalent represen-
tatives, who have sulaiervsion or direction of (I) all or substantially
all of the Contractorls business, or (TT) all or substantially all
of the Contractorts operations at any nne plant or separate location
in which this contract is being perforned, or (III) a separate and
comp:ete finjor industrifll o?eration -3:1 connection with the performance
of t1d3 contract; or (L) which results from a failure the part of
the 04ntractor, due to the willful udsconcluct or lack of good faith
on the part of any of its directors, officers, or other representatives
1'.-Ltinee in 5ubpnrag7ae (.,) above, (I) to pantain and administer,
In accordance with.sound industrial practice, the program for unintenance,
repair, protection and preservation of Goverment property as required
pracraph (e) hereof, or (II) to take all reasonable steps to comply
with any appropriate written directions of the Contracting Officer
under paragraph (e) hereof; or (C) for which the Contractor is -
%IS otherwise responsible under the express terns of the clause or
elauses deslgnated in the Schedule; or (1;) which results from a risk
expressly reired to be insured under t'is contract, but only to
the extent ,t-f the isurance so required to 1,:e procured and ncAntnined,
or to the extent of insurcince actually procured and maintained, which-
is greater; or (N) which resultp iron a risk which is in fact
ep,iere.1 by ins-Jrance or for which the Contract 17,,3 otherwise reinburse4.,
but oh_Ly te the extent of such insurance or reibursenent; provided that,
if than one of the c:../lve exceptions sb-ll be npfdicnle in o.ny-
eaee, the Contractor! 3liability under any nne exception shall Lot be
liAted by any other exception. lids clause shall net be construed
as relicving a suL)centractor froi . liability. for loss or destruction of
or dae to Goverment property in its possessicqi or control, except
tO tilt, extent that, tit- r2cortret, with the prior laoroval of the
ohtr-ctirg C ctir, ;f. 4:0-:C -Qv) -3110,91-itrtor
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from such liability. In the absence of such approval, the subcontract
shall contain appropriate provisions requiring the return of all Govern-
ment property in as good condition as when received, except for reasonable
weer and tear or for the utilization of the property in accordance
with the provisions of the prime contract.
(ii) The Contractor shall not be reimbursed for, and shall
not include as an item of overhead, the cost of insurance, or any
provision for a reserve, covering the risk of loss of or damage to
the Government property, except to the extent that the Government may
hsve required the Contractor to carry such insurance under any other
provision of this contract.
(iii) Upon the happening of loss or destruction of or
damage to the Government Property, the Contractor shall notify the
Contracting Officer therof, and shall communicate with the Loss and
Salvage Organization, if any, now or hereafter desigaated by the
ContracVeng Officer, and with the assistance of the Loss and Salvage
Organization so designated(unless the Contracting Officer has designated
that no such organization be employed), shall take all reasonable steps
to protect the Gov-reeent Property from further damage, separate the
damaged and undamaged Government Property, put all the Government
Property in the best possible order, and furnish to the Contracting
02ficer a statement of (A) the lost, destroyed and damaged Govern-
ment Property, (B) tH time and origin of the loss, destruction or
damage, (C) all known interests in commingled property of which the
Go,-ernment Property is a part, and (D) the insurance, if any, covering
arL part of or interest in such commingled property, The Contractor
shall make repairs and renovations of the damaged Government Property
or take such other action, as the Contracting Officer directs.
(iv) In the event the Contractor is indemnified, reimbursed,
or otherwise compensated for any loss or destruction of or damage to
/4000 the Government Property, it shall use the proceeds to repair, renovate
or replace the Government Property involved, or shall credit such
proceeds against the cost of the work covered by the contract, or shall
otherwise reimburse the Government, as directed by the Contracting
Officer, The Contractor shall do nothing to prejudice the Government's
right to recover against third parties for any such loss, destruction
or damage and, upon the request of the Contracting Officer, shall, at
the Government's expense, furnish to the Government all reasonable
assistance and coeperation (including the prosecution of suit and the
execution of instruments of assignment in favor of the Government) in
Obtaining recovery. In addition, where 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 the Government.
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For use whore applicable:
(v) In the event any aircraft are to be furnished under this
contract, any loss or destruction of, or danage to, such aircraft or other
Government property occurring in connection with operations of said air?
craft will be governed by the clause of this contract captioned /Flight
Risks", to the extent such clause is, by its toms? applicable.
(g) The Government shall at all reasonable times have access to the
premises whore any of the Government property is located.
(h) The Government Property shall remain in the possession of the
Contractor 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 nay be amended to accomplish an equitable
adjustment in the terns and previsions thereof.
(i) Upon the completion of this contr-ct/ or at such earlier dates as
ray be fixed by the Contracting Officer, the Contractor shall submit to the
Contracting Officer in a form acceptable to him, inventory schedules covering
all itc:-3 of the Government Property not consumed in the performance of
this ccntract or not theretofore delivered to the Government, and shall
deliver or make such ether disposal of such Government property as may be
directed or authorized by the Contracting Officer. The not proceeds of any
such dispesal shall be ere :ited to the cost of the work covered by the
contract or shall be paid in such manner as the Contracting Officer nay
direct. Tho foregoing provisi ns shall apply to scrap from Government
Property provided, however, that the Contracting Officer may authorize or
direct the Contractor to omit from such inventory schedules any scrap
consisting of cutting and processing waste, such as chips, cuttings, borings,
turnings, short ends, circles, trimmings, clippings, and remnants, and
to dispose of such scrap in accordance with the Centracteris normal practice
and account therefor as a part of general overhead or other reimbursable
cost in accordance with the Contractorts edtablishod accounting procedures.
(j) Unloss otherwise provided heroin, the Government shall not be under
any duty or obligation to restore or rehabilitate, or to pay the cost of the
restoration or rehabilitation of the Contractorls plant or any portion thereof
which is affected by the removal of any Government Property.
(k) Directions of the Contracting Officer and communications of the
cpntractor issued pursuant to this clause sholl be in writing,
(1) As provided in paragraph (i) of the above clause, the Contracting
Tficer may, subject to Departmental procedures, authorize or approve use
f the Centractorts established scrap disposal and accounting procedures
honevor the amount and recoverable value of scrap from the Government
toperty are relatively minor and the Centractor16' established procedures for
.ccumaiulating and disposing of scrap and crediting the proceeds thereof to
eneral overhead or other general cost will permit the Government to share
quitabl;) In Arp3M6aLkirRgidzatseizibtunagt28:,, etAIRRanzB9PURRAW-P4489, -17
3ost factor ai eorang reimbursement under the contract.
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II 1Jjq_j TC THIT.D FT:TLC:NS (Z)EP, 7.,-203.22 .117F-1 7-403.22)
(a) The Contractor shall procure and thereafter maintain liability, workTIoilysd
compensation, employer's ability, com liability prehensive general liabity
Injury) and comprehensive nut bile liability (bodily injury s.nd
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
contn:Lct; provided, that the Contractor in fulf171ment of its
obligation to procure workmenls compensation insurance may, with
the approval of the Contracting ',.)fficeb and pursuant to statutory
aul-z:rity, maintain a self-insurance program. 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 apt:rove, and uith insurers
approved by the Contracting Officer.
(h) The f::/ontracter agrees, to the extent and in the manner
reqiired by the Contracting Officer, to submit for the approval of
the Contracting Officer any ether insurance maintained by the iontrac.tor
in cennection with the perform.ance cf this contract and for which tha
Contractor seeks reimbursement hereunder.
(c) The Contractor shall be reimbursed: (i) for the portion
allocable to this contract of the reasonable c:)st of insurance as
required or approved pursuant to the provisions of this clause, and
(ii) for liabilities to third persons for loss or for damage to
prop-rty (other than property (A) owned, occupied or used by the
Contractor er rented to the Contractor or (E) in the care, custody,
or oJutrol 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
Oontretor, its agents, servants or employees, provided such
liabilities are represented by final judgments cr by settlements
%WO approved In writing by the government, and expenses incidental to
such liabilities, except liabilities (I) for which the Contractor
is otherwise resp-nsible under the express terms of the clause or
clauses, :T any, specified in the E;chedule, or (II) with respect
to which the Contractor has failed to insure as required or maintain
imurance as ap,roved by the Contracting Officer or (III) which results
from willful r]isconduct or lack of good faith on the part of any of
the Contractor's directors or officers, or on the part of any of its
managers, superintendents, or other equivalent represent,tives, who
has supervision or direction of (1) all or substantiall all of the
Contractor's business, or (2) all or substantially all of the Con-
tractor's opeimtions at any one plant or separate location in w'ich
this conl7ract is being performed, or (3) a separate and complete
major industrial operation in connection with the performance of
this cl-,n4,xact. The foregoing shall not restrict the right of the
Contractor to be ref: 'nursed for the cost of insurance maintained by
the Contractor in connection with the porfermance of this contract,
other thAn LraTLIa'6SIce t.c. be v"aini..tt. for approval cr required
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to be procur-1 and procured and maintained pursuant to the previsions
of this clause, provided such cost would constitute Allowable Costs
under the clause of this contract entitled "Allowable Cost, Fixed Foe
and Paynont."
(J) The Contractor shall give the Government or its representatives
immediate notice of any suit or action filed, or pronpt notice of any
:.ade, against the Contractor arising out of the performance of this
contract, the cost and expense of which may be roanbursable to the
Contractor under the,provisi? ns of this contract, and the risk of which is
then uninsured or inrwhich the amount claimed OXCOOOS the amount of
coverage. The Contractor shall furnish 4.mmediately to the Government
copies of all pertinent papers received by the Contractor. If the anount
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 bery'.0 the
Contractor shall, if required by the Gevernment, authorize representatives
of the Govern:JD/at to settle or defend any such claim and to represent
the C.ntracter in or take charge of any litigation in connection therewith;
proviled? hewever, that the Contractor may, at its own expense, be
associated with the representatives of the Government in the settle-
ment or defense of any such claim or litigation.
AUTHORIZATION AND CONSEYT (ASPR 9-102.2 AFPI 7-403.23)
The Government hereby gives its authorization and consent for all
use and manufacture of any patented invention in the perfo=ance of this
contract or any part hereof or any amendment hereto or any subcontract
hereunder (including any lower-tier subcontract).
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FILIFG OF PATENT APPLICATIONS (SPR 9-106 AFPI 7-4043)
(o) Pefore filing or causing to be filed a patent application
,ascicsing any subject natter of this contract, which subject natter is
classified "Secret" or higher, the Contractor shall, citing the
thirty (30) day provision below, transnit the proposed application
to the Contracting Officer for deternination whether, for reasons of
national securityy such application should be placed under an order
of secrecy cr sealed in accordance with the provisions of 35 U. S.
Code 181-188 or the issuelnce of c patent sheul', be otherwise delayed
under pertinent statutes or regulations; an: the Contractor shall
observe any instructi-ns of the C,ntracting Officer with respect to
the meeener of delivery of the patent applicatien to the U. S. Patent
Off.ico for filing, but the Contractor shall not bo denied the right
to file such patent application, If the Contracting Officer shall
no have rj_von any such instructions within thirty (30) days frun
the date of nailing or other transmittal of the proposed application
the 0-:.tractor may file theopplication.
(b) The Contractor shall furnish to the CLntracting Officer,
at the tire of or Irier to the ti :.e when the Contractor files or
causes to be filed a patent application disclosing any subject matter
of thio contract, which subject natter is classified "Confidential",
a copy of such application for determination whether,
for reasons of national Lecurity, such application sheulC, be placed
under an order of secrecy or the issuance of a patent should be
otherwise delayed under pertinent statutes or regulation.
(c) In filing any patent applic.ti n ceuing within the scope of
this clause, the Contractor shall observe all applicable security
regult4ons cov)ring the transmission of classified subject nutter.
REPORTING OF ROYALTIES (ASPR 9-110. AFPI 7-40404)
The provisions of this clause shall be applicable only if the
anount of the contract is in excess of 50,000.
(a) The Contractor shall report in writing (in quadruplicate)
to the Contracting Officer as soon as practicable after execution of
this contract whether or net any royalties in excess of 125O have
been paid or are to be paid by the Contractor directly to any person
or firm in connection with the p rfernance of this contract. If
royalties in excess of ':,250 have been paid or are to be paid to any
person or firm, the report shall include the following items of
information with respect to such royalties (including the initial r?250)?
(1) The name and address of each licensor to whom royalties
in excess of ',250 have boon paid or are to be paid,
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(2) The patent nunbers, patent application serial numbers
(with filing dates), or other identificatien of the basis for such
royalties,
(3) The manner of computing the royalties consisting of (i)
a brief identification,of each royalty-bearing unit or process, (ii)
the total amount of royalties, and (iii) the prcentage rate or dollars
and cents amcunt of royalties cn each such unit or process, provided
that if the royalties cannot be computed in terns of units or dollars
and cents value, then other data showing the Danner in which the
Contractor computes the royalties.
(') In lieu of furnishing a report under paragraph (a), the
Contractor may furnish a single, consolidator' report for each account-
ing p-riod of the Contractor during which the Contractor has contracts
with the Government, provided the Contractor has requested and obtained
the prior written approval of the Cmtracting Officer. Such consolidated
reports shall he furnished, when the furnishing thereof has been
approved, in the number of copies as approved,: as soon as practicable
after the close of the accountiag p-riod covered by the report. Such
consolidated report shall be made in accordance with Contractorfs
established accounting practice and shall include, for the accounting
period,, the total amount of royalties accruing to each licenser at a
rate in excess of000 per annum on the Contracterfs over-all business,
together with (i) the name and address of each such licensor, (ii) the
patent numbersfr patent applic tier]. serial numbers (with filing dates),
or other identification, of the basis for such royalties, (iii) a brief
description of the subject patter of the license under which royalties
are charged, (iv) the percentage rate or unit amount, or if the
royaltio;1 do not accrue by rate or unit amount, such ether data showing
the manner by which the royalties accrue to licenser, and (v) an
esti:late or approximation (without detailed accounting) of the portion
of such royalties that Lay he attributable to Government contracts,,
Tho Contractor shall, if requested by the Government, furnish at Govern-
ment expense a nero detailed allocation of such royalty payments
attributable to Government Contracts.
(c) In the event that the Contractor requests written approval
to furnish consolidated reports under paragraph (b) above, Lhe
Gontracting Officer shall promptly c nsider the request and furnish
to the Contractor a letter stating whether cr not the request is
approved and, notwithstanding any such approval, the Contracting
Officer shall have the right to question any such subsequently
furnished r--port as to accuracy or completeness of data and to ask
for additional iniornati,,n. The Contractor shall furnish a copy
of such letter of approval to the Contracting Officer administering
this contract.
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(d) After paynent of eighty percent (80%) of the anount of this
contract, as fren tine to tine anendcd, further p-ynont shall be withheld
until a reserve of either (i) ten percent (10%) of such anount or (ii)
,51000, which ever is less, shall have been set aside, such reserve or
the balance thereof -be be retained until the Contractor shall have
furnished t the Contracting Officer the report called for by para,raph
(a) hereof or the copy of the letter approving the Contractorls request
to furnish the report under paragraph (b); provided that no aneunt shall
continuo to be withheld from paynent for the causes specified in this
paragraph (d) if the Contracting Officer shall find that the Ctntractor
has not boon furnished a letter as required by paragraph (c) within a
reasonable tine after making written request to subnit a single,
consolidated report under the provisi ns of paragraph (b) of this clause;
and prei-ided further that the Contracting Officer may, in his discretion,
order paynent to be withhold in the aneunt and nanner above provided if
the report called for by paragraph (a) is unsatisfactory or the report
called for by paragraph (b) is lue but has not been received, or if
received, is found to be unsatisfactory. No aneunt shall be withheld
under this paragraph when the idnir)um aneunt specified by this
paragraph is being withhell under other pr-visions cf this c ntract.
The withholding of any aneunt or subsequent paynent thereof to the
Contractor shall not be construed as a waiver of any richt accruing to
the Gcvernmont under this centract.
RIGHTS IN DATA-UNLIAITLD (SPR 9-203.1 2iFIJI 7-404,5)
(a) The tern "bul)jcct Data" as used heroin includes writings,
sound recordings, pictorial repreducti ns, drawings or other graphical
represon-ations, and works cf any sinilar nature (whether or not
cepyri7h,e1) which are specified to Le delivpred under this contract.
rho tor_ does net include financial rop,rts, cost analyses and other
inferno tionincidental to contract administration.
(b) Subject to the proviso of (c) below, the Gevernrlent may
pplicate, use, and disclose in any nanner and for any purpose
11110hatseever1 and have others so do, all Subject Data delivered under
this contract.
(0) The Contractor agrees to and does hereby grant to the
;evernnent, and to its officers, agents, and cu,luyees acting within
the scope of their official duties, a royalty-free, nenexceluBive and
irrevocable license throughout the world, to publish, translate,
eproduco, deliver, prrforn? dispose of and to authorize others so
o do, all Subject Data now or hereafter covered by copyright; PR0VIDED
that with respect to such Subject Data not originated in the performance
)f this contract but which is incorporated in the work furnished under
'Iris contract such license shall be only to the extent that the
lontracter, its onployees, or any individuil or concern specific-11y
-npleyed or assigned Ly the Contractor to originate and prepare such Data
aider this contract, now has, or prior to conpletion or final settlement
,f this contract nay acquire the right to grant such license without
,econing liable to pay c_4Jpensation to others solely because of such
;rant.
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(d) The Contractor shall exert ail reasonable offort to advise
the Contractin:, Officer, at the time of delivery of the Subject Data
furnisnod under this contract, of all invasions of the richt of
privacy c atainc1 therein and of allfortions of such Data copied from
work not c mposed or produced in the performance of this contract and
act 1:Honsed under this clause.
( ,) The Contractor shall report to thc Contracting Officer,
prempt.,.y and in reasonable written detail, each notice or claim of
copyrght infringement received by the Contractor with respect to all
Subject Data delivered under this centraqt*
(,) Nothing contained in this clause shall imply a license to
the Government under any patent or be construed as affecting the scope
of any license or other richt otherwise granted to the Government under
any patent,
(g) The Contractor shall not affix any restrictive mc,rkinbs upon
any Sulject Data, and if such norkings arc affixed, the Government shall
have the richt at any tile to modify, rolLovc, obliterate or ignore any
such 1.arking,
MILIT-RY SECURITY REQUIREMNTS 7-104,12, 7-204,12 AFPI 7-404.7)
(a) The pr:visions of this clause shall apply to the extent that
this contract involves access to security informaticn classified
"Confidential" including "Confidential - - Modified Handling Iluthorized"
or hiPaor.
(b) The Government shall notify the Contractor of the security
classifLcatin of this contract and the elements thcreof, and of any
sulsequent rovisi-ns in such security classification, Ly the use of a
Security Requirements Chock List (DD Form 254).
(c) To the extent the Government has indicated as of the :',Lat.o of
this contract, or thereafter indicated, security classification under
this c atract as provided in paracraph (b) above, the Contractor shall
safeguard all classified (dements of this contract ara7, shall provide and
maintain a system of security controls within its own organization in
apcerdanco with the requirements on
(i) the Security 11c,roement (DD Form 4/11), including the
Department of Defense Industrial Security Manual for Safeguarding
Classified Information as in effect on the date of this contract, and
modification to the Security Lgrooment for the purpose of adapting the
Manual to the Centractorts business; and
(ii) any amendments to said Hanual made after the date of
this contract, notice of which has been furnished to the Contractor by
the Security Office of the Ltilitary Department having security cognizance
over the facility.
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(d) Representatives of the Hilitary Department having security
cccnizance over the facility and representatives of the contracting
DepartLent shell have the right to inspect at rcas-nable
intervals the procedures, methods, and.faoilitics utilized ty the
Contractor in ce:delying with the security requirements under this
contract. Sh-uld the Government, through its authorized reprosentative
deternlno that the Contractor has not c lolled with such requirements,
the Gei.ornment shall inform the CntractoF in writing of the proper
actions to to taken in order to effect copliance with such requirements.
(e) If, subsequent to the date of the 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 adjustnent,
xny such equitilo adjustment shall be accomplished in the manner set
forth in the "Changes" clause -f this contract.
(f) The C ntractor agrees to insert, in all subc ntracts hereunder
which il,volve access to classified information, provisions which shall
conftr.1 substantially to the language of this clause, including this
paragraph (f) but excluding paragraph (e) of this clause. The
Ocntractor nay insert in any such subc-ntract, and any such subcontract
entered into thercuner _lay contain, in lieu of paratraph (o) of this
clause, provisi ns which per-lit equitable adjustments to be r2adc in the
subcontract price or in the estimated cost and fixed fee of the
subc(ntract (as appropriate to the type of subc?ntract involved) on
account of changes in security classifieati ns or requirements made under
the pro-visions of this clause subsequent to the date of the subcontract
invelvcd.
The Contractor also agrees that it shall determine that any
subcontractor proposed by it for the furnishing of supplies and services
which will involve access to classified information in the Ccntractorls
custody has been granted an aFpr-cpriatc facility security clearance, which
is still in effect, prior to being accorded access to such classified
information.
WALSH-M1LEY PUBLIC CONTRACTS ACT (4ISIT 12-604 AFFT 7-464,8)
If this contract is for the manufacture or furnishing of materials,
supplies, articles or equipment in an aneunt which exceeds or may
exceed '10,CC3 and is th_,rwisn subject to the Walsh-Healey Public
Contracts Act, as amended (41 U.S. Code 35-45), there are hereby
incorporated by reference all r,,presentrAi_ns and stipulations required
by sail Act and re,,u_1_:ti ns issued thereunder by the Secretary of Labor,
such representations and stliul,ti, ns being subject to all 'applicable
rulings .nd intoriroti,us of the Secretary of labor which arc now
or IiL,y hereafter be in effect.
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GRATUITIES (ASPR 7-104.16 An' 7-404.,)
(a) 1",e Goene , iwrittu t felenta.- J--.
.actvxir p. c.esd "T 4: this
t '6. is 1,Tuee-, a_ . noldce hearenu, by the eeretary or his
dely authorized representative, that 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 amending, or the making of-any determinations
with respect to,the performing, of such contract; provided, that
the existence of the facts upon which the Secretary or his duly
authorized representative makes such findings shall be in issue
and may be reviewed in any conpetent court.
(t) In the event this contract is terminated as provided in
paragraph (a) hereof, the Government shall be entitled (i) to pursue
the same remedies against the Contractor as it could pursue in the
event of a 'breach of the contract by the Contractor, and (ii) as a
penaltL, in addition to any other damages to which it may be entitled
t2 law, to exemplary damages in an amount (as determined, by the
Secretary or his duly authorized representative) which shall be not
lass than three nor more than ten times the costs incurred by the
Contractor in nrovi.1,ing any such gratuities to any such officer or
employee.
(c) The rights and remedies of the Government provided in
ti-ls clause shall net be exclusive and are in addition to any
other rights and remedies provided by law or under this contract.
30, N2GOTLiTED OVEIIHEZ ETES (ASPR 3-704.1 AFPI 7-404.12)
(a) Notwithstanding the previsions of the clause of this
ontract entitled "salewable Cost, Fixed Fee, and Payment," the
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 seen 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 a proposed
final overhead rate or rates for that p,rial based on the Contractor's
actual cost experience during that period, together with supporting
cost data. N,gotiation of final overhead rates by the Centrector
and the Contractl.ng Officer shall be undertaken as promptly as
practicable after receipt of the Contractor's proposal.
(c) Allowability of costs and acceptability of cost
allocation methods shall be determined in accordance with ASPR,
Section XV, Part 2, as in effect on the date of this contract.
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(d) The results of each negotiation shall be set forth in an
amendment to this contract, which shall specify (i) the agreed
final rates, (ii) the bases to which the rates apply, (iii) the
periods for wlich the rates apply, and (iv) the specific items
treated as direct costs or any changes in the items previously
agreed to be direct costs.
(e) Pending establishment of final overhead rates for any
period, the Contractor shall be reimbursed either at negotiated
pr visional rates as provided in the Schedule or at billing rates
acceptable to the Schedule or at bil;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 an amendment to this contract.
(f) Any failure by the parties to agree on any final rate or
rates under this c2liuse shall be considered a dispute concerning a
question of fact for decision by the Contracting Officer within the
me-ning of the clause of this contract entitled "Disputes."
31. DET::Y IN DELIVERY OF DATA (AFPI 7-403)
(a) It is undEl2tood that the efficient use by the Government
of the supplies called for hereunder requires that the data called
for hereunder be dell-Tered not later than the tine or respective
times herein specifie:I. If such data is not deliver 1 at said time
cr tines, the Government nay at its election so long as such data
remins undelivered, unless the delay in delivery thereof arises
out of causes beyond the control and without the fault or negligence
of the Contractor within the meaning of this clause hereof entitled
"Default," withhold payment to the Contractor for any of the amounts
then due, refuse a'proval of the Contractor's vouchers and refuse to
accept further deliveries hereunder from the Contractor or take any
other action authorized by law or regulation now or hereafter in
effect including termination of the contract for default to the
extent and in the manner authorized by said clause, and may take
any or all of the foregoing actions separately or in combination.
(b) The provisions of this clause shall only be applicable to
technical data, such as handbooks, service manuals, or other
information necessary for the proper maintenance of servicing of the
end items called for herein.
32. SUPERSEDING SPECIFICATIONS (AFFI 7-404.14)
All references in any Government Specification incorporated
herein to other Government specifications shall be deemed to
include all specifications supplementary to or superseding the
specifications so referred top to the extent that such supplementary
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or superseding specifications are in effect at the date of Contractor's
latest euotation if the Contractor was furnished or otherwise notified
of the existence of such supplementary or superseding specification
at the time of said quotation.
FI ZI1 RISK (AFFI 7-4022)
(a) As used in this clause the tern "Operation" includes tests
of aircraft, tests of equipment and accessories installed therein,
and the operation of any power plant installed therein, whether or
not the aircraft is in notion during the making of any such test or
operation of any such power plant.
(b) Notwithstanding the provisiens of paragraph (f) of the
clause cf this contract captioned "Government Proper," the
Contractor shall Le liable for loss and destruction of and damage to
aircraft (including equipment and accessories installed therein),
to which the Government has title pursuant to the previsions of this
contract or otherwise, occurg in the course of operations of such
aircraft conducted by the Contractor in the performance of this
contract unless personnel conducting such operations are furnished
by the Government or are approved in writing by the Air Materiel
Area Commander having administrative responsibility for this
contract, or his representative to whom such authority has been
delegated. The provieions of this clause shall supereede any
provisions of apolica.37.e Air Force specifications insofar as such
spe:ifications relate to Contractor's liability in connection with
such operations.
(c) If prior to final acceptance by the Government, any aircraft,
as ferred to in paragraph (b), are lost, destroyed, or damaged
during such operation, and if the risk of such loss, damage, or
destruction is borne by the Government under paragraph (f) of
the clause hereof entitled "Government Property," the Government may
ter' Jmate this contract with respect to such aircraft, or in case
*1400 such aircraft is damaged o the Government may require the Contractor
to restore such aircraft to the condition in which it was immediately
prior to such damage. If the Government terminates this contract
with respect to such aircraft, the Contractor shall deliver to the
Government at the place at or from which such pporation is conducted
all or such parts of such aircraft as the Contracting Officer may
designate. If the Government requires the aircraft to be restored
as aforesaid, an equitable adjustment shall be made in the estimated
cost and fixed-fee, if any, and in the time required for its
performance, and this contract shall be modified in writing accordingly.
(d) Any dispute that may arise under the provisions of this
clause shall be determined as provided in the clause hereof entitled
"Disputes."
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34. ALT:RATIONS (ASP 7-105.1 j1FPI 7-404.10
The following alterations have been made in the provisions of
th''3 contract.
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