CONTRACT BETWEEN SANDERS ASSOCIATES, INCORPORATED AND THE UNITED STATES OF AMERICA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP68B00307R000200020004-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 31
• Document Creation Date: December 12, 2016
• Document Release Date: May 29, 2002
• Sequence Number: 4
• Publication Date: January 12, 1966
• Content Type: CONT

or Release 2002/(~~~-RDP68B00307R000~Q02~~,04 ~r~
IDEA-2711
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Sanders Associates, Inc.
95 Canal Street
Nashua, New Hampshire
CONTRACT N0. NH-1503
Mail Voucher to: Performance Period:
See Schedule
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. Corporation incorporated in the
State of Delaware, hereinafter called the Contractor.
The parties hereto agree that the Contractor shall furnish the facilities
and deliver all supplies and perform all the services set forth in the
attached schedule issued hereunder, for the consideration stated. herein.
The rights anal obligations of the parties to this contract shall be subject
to and. governed. by the attached Schedule, and General Provisions, which,
together with. this signature page and the accompanying certificate comprise
this Contract No. NH-1503. In the event of any inconsistency between the
Schedule and the General Provisions, the Schedule shall control.
IN WITNESS WHEREOF, the parties hereto have executed this contract as of
8 November 1965.
SANDERS ASSOCIATES, INCORPORATED
~~~1~
THE UNITED STATES OF AMERICA
Contracting Officer
12 January 1966
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PART I - CONTRACT WORK
The Contractor shall perform the work and services set forth
in EXHIBIT "A". Said EXHIBIT "A" is attached hereto and made a part
of this contract.
The work and services to be performed hereunder shall be completed
in accordance with the schedule set forth in EXHIBIT "A".
In accordance with the clause of the General Provisions of this ,
contract entitled ?PPAYNIENTS" the Government shall pay the Contractor
upon satisfactory performance of this contract, as full ayment for
the equipment to be furnished hereunder, the amount of ~ 2 SX~.
PART IV -.WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS
Notwithstanding the requirements of any of the General Provisions
of this contract to the contrary, whensoever the Contractor, in
performance of the work under this contract, shall find that the re-
quirements of any of the clauses of the General Provisions are in con-
flict with security instructions issued to the Contractor by the Con-
tracting Officer or by his duly authorized representative for security
matters, the Contractor shall call the attention of the Contracting
Officer to such conflict and the Contracting Officer or his duly auth-
orized representative for security matters shall (i) mod.ify or rescind
such security requirements or (ii) the Contracting Officer shall issue
to the Contractor a waiver of compliance with the requirements of the
General Provisions conflicting with such security requirements. Any
waiver of 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
any clauses of the General Provisions in conflict with the stipulations
of such subcontract.
PART V - SPECIAL SECURITY RESTRICTIONS
The Contractor shall not reveal (i) the specific nature or any
details of the work being performed hereunder or (ii) any information
whatsoever with respect to the department of the Government sponsoring
this contract and the work thereunder except as the contractor is
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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 con-
trary, -f~he Contractor shall not interpret any clause or section of
this contract as requiring or permitting divulgence of such information
to any person, public or private, or to any officer or department of
the Government without the express consent of the Contracting Officer
or his duly authorized representative for security matters.
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Contract No. NH-1503
The Contractor shall prepare and furnish the Government courses
of instructions as set forth below in accordance with its Proposal
No. 93Hx, dated 13 July 1865. Said proposal is on file with the Contractor
and the Contracting Officer and is incorporated into and made a part of
this contract by reference:
Course preparation, Student Training Manual Preparation
and. reproduction of 50 Copies of the Student Training
Manual.
Conduct two (2) ten day courses of instructions.
The Student Training Manual shall be completed, on
or before 15 February 1866.
The courses to be conducted hereunder shall be as
scheduled. by the Government, however, the Contractor
shall be given whenever possible one (1) month's
notice in advance of the commencement date of each
course. All courses shall be completed by 30 June
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Partial payments of the contract price may be made
as follows:
upon completion of course preparation and
Student Training Manual.
upon completion of two (2) ten d.ay courses
of instructions.
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INDEX TO GENERAL PROVISIONS
Clause No. Page No.
1 Definitions 1
2 Changes 1
3 Extras 1
4 Variation in Quantity 1
5 Inspection 1
6 Responsibilty for Supplies . . 2
7 Payments 2
8 Assignment of Claims 2
9 Additional Bond Security . 3
10 Federal, State, and Local Taxes 3
11 Default . 4
12 Disputes 5
13 Soviet Controlled Areas 5
14 Work Hours Act of 1962-Overtime Compensation 5
15 Walsh-Healey Public Contracts Act 5
16 Nondiscrimination in Employment 6
17 Officials Not To Benefit 6
18 Covenant Against Contingent Fees . 8
19 Termination for Convenience of the Government . 7
20 Authorization and Consent 9
21 Notice and Assistance Regarding Patent and Copyright In-
fringement 9
22 Buy American Act 10
23 Filing of Patent Applications 10
24 Patent Rights (License) 10
25 Data 13
26 Data-Withholding of Payment 13
'27 Military Security Requirements 14
28 Utilization of Small Business Concerns 14
29 Examination of Records 14
30 Gratuities 14
31 Convict Labor 15
32 Material Inspection and Receiving Report 15
33 Subcontracts (Sources) 15
34 Subcontracts 15
35 Subcontractor Cost dnd Pricing Data . 16
38 Subcontractor Cost and Pricing Data-Price Adjustments 16
37 Competition in Subcontracting 17
38 Utilization of Concerns in Labor Surplus Areas . 17
39 Standards of Work 17
40 Ground and Flight Risk 17
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INDEX (Continued)
41
Government-Furnished Property .
20
42
Interest .
22
43
Audit and Records .
22
44
Price Reduction for Defective Cost or Pricing Data .
24
45
Price Reduction for Defective Cost or Pricing Data-Price Ad-
justments
24
46
Audit-Price Adjustments .
24
47
Inspection a:nd Audit
25
48
Alterations in Contract
25
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1. DEFINITIONS (ASPR 7-103.1) (Feb. 1962)
As used throughout this contract, the following
terms shall have the meanings set forth below:
(a) The term "head of the agency" or "Secre-
tary" means the Secretary, the Under Secretary,
any Assistant Secretary, or any other head or as-
sistant head of the executive or military department
or other Federal agency; and the term "his duly
authorized representative" means any person or
persons or board (other than the Contracting Offi-
cer) authorized to act for the head of the agency
or the Secretary.
(b) The term "Contracting Officer" means the
person executing this contract on behalf of the
Government, and any other officer or civilian em-
ployee who is a properly designated Contracting
Officer; and the term includes, except as otherwise
provided in this contract, the authorized repre-
sentative of a Contracting Officer acting within
the limits of his authority.
(c) Except as otherwise provided in this con-
tract, the term "subcontracts" includes purchase
orders under this contract.
2. CHANGES (ASPR 7-103.2) (3an. 1958)
The Contracting Officer may at any time, by a
written order, and without notice to the sureties,
make changes, within the general scope of this
contract, in any one or more of the following: (i)
Drawings, designs, or specifications, where the sup-
plies to be furnished are to be specially manufac-
tured for the Government in accordance therewith;
(ii) method of shipment or packing; and (iii) place
of delivery. If any such change causes an increase
or decrease in the cost of, or the time required for
the performance of any part of the work under
this contract, whether changed or not changed by
any such order, an equitable adjustmnt shall be
made in the contract price or delivery schedule, or
both, and the contract shall be modified in writing
accordingly. Any claim by the Contractor for ad-
justment under this clause must be asserted within
30 days from th.e date of receipt by the Contractor
of the notification of change: Provided, however,
That the Contracting Officer, if he decides that the
facts justify such action, may receive and act upon
any such claim asserted at any time prior to final
payment under this contract. Where the cost of
property made obsolete or excess as a result of a
change is included in the Contractor's claim for
adjustment, the Contracting Officer shall have the
right to prescribe the manner of disposition of such
property. 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. [Rev. No. 28, 1/28/58; Rev.
No. 30, 3/17/58.]
3. EXTRAS (ASPR 7-103.3) (July 1949)
Except as otherwise provided in this contract, no
payment for extras shall be made unless such
extras and the price therefor have been authorized
in writing by the Contracting Officer.
4. VARIATION IN QUANTITY (ASPR 7-103.4)
(July 1949)
No variation in the quantity of any item called
for by this contract will be accepted unless such
variation has been caused by conditions of loading,
shipping, or packing, or allowances in manufactur-
ing processes, and then only to the extent, if any,
specified elsewhere in this contract.
5. INSPECTION (ASPR 7-103.5) (May 1955)
(a) All supplies (which term throughout this
clause includes without limitation raw materials,
components, intermediate assemblies, and end prod-
ucts) shall be subject to inspection and test by the
Government, to the extent practicable at all times
and places including the period of manufacture,
and in any event prior to acceptance. [Rev. No.
33, 5/14/58.]
(b) In case any supplies or lots of supplies are
defective in material or workmanship or otherwise
not in conformity with the requirements of this
contract, the Government shall have the right
either to reject them (with or without instructions
as to their disposition) or to require their correc-
tion. Supplies or lots of supplies which have been
rejected or required to be corrected shall be removed
or, if permitted or required by the Contracting Offi-
cer, corrected in place by and at the expense of
the Contractor promptly after notice, and shall not
thereafter be tendered for acceptance unless the
former rejection or requirement of correction is
disclosed. If the Contractor fails promptly to re-
move such supplies or lots of supplies which are
required to be removed, or promptly to replace or
correct such supplies or lots of supplies, the Gov-
ernment either (i) may by contract or otherwise
replace or correct such supplies and charge to the
Contractor the cost occasioned the Government
thereby, or (ii) may terminate this contract for
default as provided in the clause of this contract
entitled "Default." Unless the Contractor corrects
or replaces such supplies within the delivery sched-
ule, the Contracting Officer may require the delivery
of such supplies at a reduction in price which is
equitable under the circumstances. Failure to agree
to such reduction of price shall be a dispute con-
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cerning a question of fact within the meaning of
the clause of this contract entitled "Disputes."
[Rev. No. 28, 1/28/58.]
(c) If any inspection or test is made by the Gov-
ernment on the premises of the Contractor or a
subcontractor, the Contractor without additional
charge shall provide all reasonable facilities and
assistance for the safety and convenience of the
Government inspectors in the performance of their
duties. If Government inspection or test is made
at a point other than the premises of the Con-
tractor or a subcontractor, it shall be at the ex-
pense of the Government except a;~ otherwise pro-
vided in this contract: Provided, 'T'hat in case of
rejection the Government shall not be liable for
any reduction in value of samples used in connec-
tion with such inspection or test. All inspections
and tests by the Government shawl be performed
in such a manner as not to unduly delay the work.
The Government reserves the right to charge to the
Contractor any additional cost of ~Clovernment in-
spection and test when supplies are not ready at
the time such inspection and test is requested by
the Contractor or when reinspect:ion or retest is
necessitated by prior rejection. Acceptance or re-
jection of the supplies shall be made as promptly
as practicable alter delivery, except as otherwise
provided in this contxact; but failure to inspect and
accept or reject supplies shall neither relieve the
Contractor from responsibility for such supplies
as are not in accordance with the contract require-
ments nor impose liability on t]he Government
therefor. [Rev. No. 28, 1/28/58.]
(d) The inspection and test by the Government
of any supplies or lots thereof does not relieve the
Contractor from any responsibillity regarding de-
fects or other failures to meet the contract require-
ments which may be discovered prior to acceptance.
Except as otherwise provided in this contract, ac-
ceptance shall be conclusive except ass regards latent
defects, fraud, or such gross mistakes as amount
to fraud.
(e) The Contractor shall provide and maintain
an inspection system acceptable to 1';he Government
covering the supplies hereunder. Records of all in-
spection work by the Contractor shall be kept com-
plete and available to the Government during the
performance of this contract and for such longer
period as may be specified elsewhere in this con-
tract.
6. RESPONSIBILTY FOR SUPPLIES. (ASPR 7-103.6)
(Jan. 1958)
Except as otherwise provided in this contract, (i)
the Contractor shall be responsible for the supplies
covered by this contract until they are delivered at
the designated delivery point, re?;ardless of the
point of inspection; (11) after deliv~sry to the Gov-
ernment at the designed point and prior to accept-
ance by the Government or reject:fon and giving
notice thereof by the Government, t;he Government
shall be responsible for the loss or destruction of or
damage to the supplies only if such loss, destruc-
tion, or damage results from ~ the negligence of
officers, agents, or employees of the Government
acting within the scope of their employment; and
(iii) the Contractor shall bear all risks as to re-
jected supplies after notice of rejection, except that
the Government shall be responsible for the loss,
or destruction of, or damage to the supplies only
if such loss, destruction or damage results from the
gross negligence of officers, agents, or employees of
the Government acting within the scope of their
employment. [Rev. No. 28, 1/28/58.]
7. PAYMENTS (ASPR 7-103.7) (Jan. 1958)
The Contractor shall be paid, upon the submis-
sion of proper invoices or vouchers, the prices stipu-
lated herein for supplies delivered and accepted,
less deductions, if any, as herein provided. Unless
otherwise specified, payment will be made on partial
deliveries accepted by the Government when the
amount due on such deliveries so warrants; or, when
requested. by the Contractor, payment for accepted
partial deliveries shall be made whenever such pay-
ment would equal or exceed either $1,000 or 50 per-
cent of the total amount of this contract. [Rev.
No. 30, 3/17/58.]
8. ASSIGNMENT OF CLAIMS (ASPR 7-103.8 mod.)
(Feb. 1962)
(a) Pursuant to the provisions of the Assignment
of Maims Act of 1940, as amended (31 U. S. Code
203? 41 U. S. Code 15) if this contract provides for
payments aggregating $1,000 or more, claims for
monies due or to become due the Contractor from
the Government under this contract may be as-
sfgried to a bank, trust company, or other financing
institution, including any Federal lending agency,
and. may thereafter be further assigned and re-
assigned to any such institution. Any such assign-
ment or reassignment shall cover all amounts pay-
able under this contract and not already paid, and
shall not be made to more than one party, except
that any such assignment or reassignment may be
made to one party as agent or trustee for two or
more parties participating in such financing.
Unless otherwise provided in this contract, pay-
inexits to an assignee of any monies due or to be-
come due under this contract shall not, to the
extf;nt provided in said Act, as amended, be subject
to reduction or setoff.
(b) In no event shall copies of this contract or
of a~:ny plans, specifications, or other similar docu-
ments relating to work under this contract, if
marked "Top Secret," "Secret," or "Confidential,"
be furnished to any assignee of any claim arising
under this contract or to any other person not
entitled to receive the same: however a copy of any
part or all of this contract so marked may be fur-
nisYied, or any inibrmation contained therein may
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be?disclosed, to such assignee upon the prior written
authorization of the Contracting Officer. [Rev.
No. 28, 1/28/58.]
(c) The Contractor shall obtain the written au-
thorization of the Contracting Officer prior to the
assignment of any rights under this contract.
9, ADDITIONAL BOND SECURITY (ASPR 7-103.9)
(July 1949)
If any surety upon any bond furnished in con-
nection with this contract becomes unacceptable to
the Government, or if any such surety fails to fur-
nish reports as to his financial condition from time
to time as requested by the Government; the Con-
tractor shall promptly furnish such additional secu-
rity as may be required from time to time to pro-
tect the interests of the Government and of persons
supplying labor or materials in the prosecution of
the work contemplated by this contract.
10. FEDERAL, STATE, AND LOCAL TAXES (ASPR
11-401-2) (July 1960)
(a) As used throughout this clause, the term
"contract date" means the date of this contract.
As to additional supplies or services procured by
modification to this contract, the term "contract
date" means the date of such modification.
(b) Except as may be otherwise provided in this
contract, the contract price includes, to the extent
allocable to this contract, all Federal, State, and
local taxes which, on the contract date:
(i) by Constitution, statute, or ordinance, are ap-
plicable to this contract, or to the transactions
covered by this contract or to property or interests
in property, or
(11) pursuant to written ruling or regulation, the
authority charged with administering any such tax
is assessing or applying to, and is not granting or
honoring an exemption for, a contractor under this
kind of contract, or the transactions covered by this
contract, or property or interests in property.
(c) Except as may be otherwise provided in this
contract, duties in effect on the contract date are
included in the contract price to the extent allo-
cable to this contract. [Rev. No. 1, 7/22/80.7
(d) (1) If the contractor is required to pay or
bear the burden-
(i) of any tax or duty which either was not to
be included in 'the contract price pursuant to the
requirements of paragraphs (b) and (c), or of a tax
or duty specifically excluded from the contract price
by a provision of this contract; or
(ii) of an increase in rate of any tax or duty,
whether or not such tax or duty was excluded from
the contract price; or
(iii) of any interest or penalty on any tax or duty
referred to in (i) or (ii) above; the contract price
shall be increased by the amount of such. tax, duty,
interest, or penalty allocable to this contract; pro-
vided, that the Contractor warrants in writing that
no amount of such tax, duty, or rate increase was
included in the contract price as a contingency
reserve or otherwise; and provided further, that
liability for such tax, duty, rate increase, interest,
or penalty was not incurred through the fault or
negligence of the Contractor or his failure to fol-
low instructions of the Contracting Officer. [Rev.
No. 1, 7/22/60.]
(2) If the Contractor is not required to pay or
bear the burden, or obtains a refund or drawback,
in whole or in part, of any tax, duty, interest, or
penalty which:
(i> was to be included in the contract price pur-
suant to the requirements of paragraphs (b) and
(c) ;
(ii) was included in the contract price; or
(iii) was the basis of an increase in the contract
price; the contract price shall be decreased by the
amount of such relief, refund, or drawback allocable
to this contract, or the allocable amount of such
relief, refund, or drawback shall be paid to the
Government, as directed by the Contracting Offi-
cer. The contract price also shall be similarly de-
creased if the Contractor, through his fault or neg-
ligence or his failure to follow instructions of the
Contracting Officer, is required to pay or bear the
burden, does not obtain a refund or drawback of
any such tax, duty, interest, or penalty. Interest
paid or credited to the Contractor incident to a
refund of taxes shall inure to the benefit of the
Government to the extent that such interest was
earned after the Contractor was paid ar reimbursed
by the Government for such taxes.
(3) Invoices or vouchers covering any adjustment
of the contract price pursuant to this paragraph
(d) shall set forth the amount thereof as a separate
item and shall identify the particular tax or duty
involved.
(4) This paragraph (d) shall not be applicable to
social security taxes; income and franchise taxes,
other than those levied on or measured by (i) sales
or receipts from sales, or (ii) the Contractor's pos-
session of, interest in, or use of property, title to
which is in the Government; excess profits taxes;
capital stock taxes; unemployment compensation
taxes; or property taxes, other than such property
taxes, allocable to this contract, as are assessed
either on completed supplies covered by this con-
tract, or on the Contractor's possession of, interest
in, or use of property, title to which is in the Gov-
ernment.
(5) No adjustment of less than $100 is required
to be made in the contract price pursuant to this
paragraph (d).
(e) Unless there does not exist any reasonable
basis to sustain an exemption, the Government
upon request of the Contractor, without further
liability, agrees, except as otherwise provided in
this contract, to furnish evidence appropriate to
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establish exemption from any tax which the Con-
tractor warrants in writing was excluded from the
contract price. In addition, the Contracting Officer
may furnish evidence appropriate to establish ex-
emption from any tax that may, ;pursuant to this
clause, give rise to either an increase or decrease
in the contract price. Except as otherwise provided
in this contract, evidence appropriate to establish
exemption from duties will be furnished only at
the discretion of the Contracting Officer.
(f) (1) The Contractor shall prornptly notify the
Contracting Officer of all matters pertaining to
Federal, State, and local taxes, a,nd duties, that
reasonably may be expected to result in either an
increase or decrease in the contract price.
(2) Whenever an increase or decrease in the con-
tract price may be required under this clause, the
Contractor shall take action as directed by the
Contracting Officer, and the contract price shall
be equitably adjusted to cover the costs of such
action, including any interest, penalty, and reason-
able attorneys' fees.
11. DEFAULT (ASPR 7-103.11-ASPR &-707)
(July 1962)
(a) The Government may, subject to the pro-
visions of paragraph (c) below, by written notice
of default to the Contractor, terminate the whale
or any part of this contract in ;any ane of the
following circumstances:
(i) if the Contractor fails to make delivery of
the supplies or to perform the services within the
time specified herein or any extension thereof; or
(ii) if the Contractor fails to perform any of
the other provisions of this contract, or so fails
to make progress as to endanger performance of
this contract in accordance with it;s terms, and in
either of these two circumstances does not cure
such failure within a period of 1(i days (or such
longer period as the Contracting Officer may au-
thorize in writing) after receipt of notice from the
Contracting Officer specifying sucY.~ failure.
(b) In the event the Government terminates this
contract in whole or in part as provided in para-
graph (a) of this clause, the Government may pro-
cure, upon such terms and in such manner as the
Contracting Officer may deem appropriate, supplies
or services similar to those so terminated, and the
Contractor shall be liable to the government for
any excess costs for such similar supplies or serv-
ices: Provided, That the Contracto~? shall continue
the performance of this contract to the extent not
terminated under the provisions oi' this clause.
(c) Except with respect to defaults of subcon-
tractors, the Contractor shall not be liable for any
excess costs if the failure to perform the contract
arises out of causes beyond the control and with-
out the fault or negligence of the Contractor. Such
causes may include, but are not restricted to, acts
of God or of the public enemy, acts of the Govern-
ment in either its sovereign or contractual capacity,
fires, floods, epidemics, quarantine restrictions,
strikes, freight embargoes, and unusually severe
weather; but in every case the failure to perform
must be beyond the control and without the fault
or negligence of the Contractor. If the failure to
perform is caused by the default of a subcontractor,
and. if such default arises out of causes beyond the
control of both the Contractor and subcontractor,
and without the fault or negligence of either of
them, the Contractor shall nat be liable for any
excess costs for failure to perform, unless the sup-
plies or services to be furnished by the subcon-
tractor were obtainable from other soarces in sufFi-
cie:nt time to permit the Contractor to meet the re-
quired delivery schedule.
(d) If this contract is terminated as provided in
paragraph (a) of this clause, the Government, in
addition to any other rights provided in this clause,
may require the Contractor to transfer title and de-
live~r to the Government, in the manner and to
the extent directed by the Contracting Officer, (i)
any completed supplies, and (ii) such partially
completed supplies and materials, parts, tools, dies,
jig;., fixtures, plans, drawings, information, and
contract rights (hereinafter called "manufacturing
materials") as the Contractor has specifically pro-
duced or specifically acquired for the performance
of such part of this contract as has been termi-
nated; and the Contractor shall, upon direction of
the Contracting Officer, protect and preserve prop-
erty in possession of the Contractor in which the
Government has an interest. Payment for com-
pleted supplies delivered to and accepted by the
Government shall be at the contract price. Pay-
ment for manufacturing materials delivered to and
accepted by the Government and for the protection
and preservation of property shall be in an amount
agreed upon by the Contractor and the Contracting
Ofli.cer; failure to agree to such amount shall be
a dispute concerning a question of fact within the
meaning of the clause of this contract entitled "Dis-
putes." The Government may withhold from
amounts otherwise due the Contractor for such
completed supplies or manufacturing materials
such sum as the Contracting Officer determines to
be necessary to protect the Government against
loss because of outstanding liens or claims of for-
mer lien holders.
(e) If, after notice of termination of this contract
under the provisions of this clause, it is determined
for any reason that the Contractor was not in de-
fault under the provisions of this clause, or that the
defed on adequate
price competition, established catalog or market
prices of commercial items sold in substantial quan-
tities to the general public, or prices set by law or
regulation. In each such excepted subcontract
hereunder in excess of $100,000 the Contractor shall
insert the substance of the following clause:
Subcontractor Cost and Pricing Data-
Price Adjustments
(a) Paragraphs (b) and (c) of this clause shall
become operative only with respect to any change
or other modification made pursuant to one or more
provisions of this contract which involves a price
adjustment in excess of $100,000. T:he requirements
of this clause shall be limited to such price adjust-
ments.
(b) The Contractor shall require subcontractors
hey?eunder to submit cost or pricing data under the
following circumstances: (i) prior to award of any
cost-reimbursement type, incentive, or price rede-
terminable subcontract; (ii) prior to award of any
suk~contract, the price of which is expected to ex-
cee~d $100,000 except where the price thereof is based
on adequate price competition, established catalog
or market prices of commercial items sold in sub-
staxitial quantities to the general public or prices
set by law or regulation; (iii) prior to the pricing
of .any subcontract change or other modification for
which the price adjustment is expected to exceed
$100,000.
(c;) The Contractor shall require subcontractors
to certify, in substantially the same form as that
used in the certificate by the Prime Contractor
to 'the Government, that to the best of their knowl-
edge and belief the cost and pricing data submit-
ted. under (b) above is accurate, complete, and cur-
rent as of the date of the execution, which date
shall be as close as possible to the date of agree-
ment on the negotiated price of the contract modi-
fic2etion.
(d) The Contractor shall insert the substance of
this clause including this paragraph (d) in each
subcontract hereunder which exceeds $100,000.
36. SUBCONTRACTOR COST AND P R I C I N G
DATA-PRICE ADJUST1ViENTS (ASPR 7-104.42)
(Nov. 1962)
T']ze following clause shall apply to all advertised
and negotiated contracts in excess of $100,000,
where the contractor has not furnished a Certificate
of iC)urrent Cost or Pricing Data in connection with
the initial pricing thereof.
Subcontractor Cost and Pricing Data-
Price Adjustments (Nov. 1962)
(a) Paragraphs (b) and (c) of this clause shall
become operative only wfth respect to any change
or other modification made pursuant to one or more
provisions of this contract which involves a price
adjustment in excess of $100,000. The requirements
of this clause shall be limited to such price ad-
j ust;ments.
(b) The Contractor shall require subcontractors
hereunder to submit cost or pricing data under the
following circumstances: (i) prior to award of any
cost-reimbursement type, incentive, or price redeter-
minable subcontract; (ii) prior to award of any sub-
contract the price of which is expected to exceed
$100,000, except where the price thereof is based on
adequate price competition, established catalog or
market prices of commercial items sold in sub-
stantial quantities to the general public or prices
set 'by law or regulation; (iii) prior to the pricing of
any subcontract change or other modification for
which the price adjustment is expected to exceed
$loo,ooo.
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~c) The Contractor shall require subcontractors to
certify that to the best of their knowledge and belief
the cost and pricing data submitted under (b)
above is accurate, complete, and current as of the
date of the execution, which date shall be as close
as possible to the date of agreement on the ne-
gotiated price o:f the contract modification.
(d) The Contractor shall insert the substance of
this clause including this paragraph (d) in each
subcontract hereunder which exceeds $100,000.
37. COMPETITION IN SUBCONTRACTING
(ASPR 7-104.40) (Apr. 1962)
The Contractor shall select subcontractors (in-
cluding suppliers) on a competitive basis to the
maximum practical extent consistent with the ob-
jectives and requirements of the contract. [Rev.
No. 9, 4/15/62.]
38. UTILIZATION OF CONCERNS IN LABOR
SURPLUS AREAS (ASPR 1-805.3) (Feb. 1962)
It is the policy of the Government to place con-
tracts with concerns which will perform such con-
tracts substantially in areas of persistent or sub-
stantial labor surplus where this can be done, con-
sistent with the efficient performance of the con-
tract, at prices no higher than are obtainable else-
where. The Contractor agrees to use his best efforts
to place his subcontracts in accordance with this
policy.. In complying with the foregoing and with
paragraph (b) of the clause of this contract en-
titled "Utilization of Small Business Concerns," the
Contractor in placing his subcontracts shall observe
the following order of preference: (i) persistent
labor surplus area concerns which are also small
business concerns; (ii) other persistent labor sur-
plus area concerns; (iii) substantial labor surplus
area concerns which are also small business con-
cerns; (iv) other substantial labor surplus area
concerns; and (v) small business concerns which
are not labor surplus area concerns.
39. STANDARDS OF WORK (ASPR 7-302.3)
(June 1959)
The Contractor agrees that the performance of
work and services pursuant to the requirements of
this contract shall conform to high professional
standards.
40. GROUND AND FLIGHT RISK (ASPR 10-404)
(Feb. 1962)
(a) Notwithstanding any other provisions of this
contract, except as may be specifically provided in
the Schedule as an exception to this clause, the
Government, subject to the definitions and limita-
tions of this clause, assumes the risk of damage to,
or loss or destruction of, aircraft "in the open,"
during "operation," and in "flight," as these terms
are defined below, and agrees that the Contractor
shall not be liable to the Government for any such
damage, loss, or destruction, the risk of which is so
assumed by the Government.
(b) For the purposes of this clause:
(i) Unless otherwise specifically provided in the
Schedule, the term "aircraft" means-
(A) aircraft (including (I) complete aircraft, and
(II) aircraft in the course of being manufactured,
disassembled, or reassembled, .provided that an en-
gine or a portion of a wing or a wing is attached
to a fuselage of such aircraft) to be furnished to
the Government under this contract (whether be-
fore or after acceptance by the Government) ; and
(B) aircraft (regardless of whether in a state of
disassembly or reassembly) furnished by the Gov-
ernment to the Contractor under this contract; in-
cluding all property installed therein, or in the
process of installation, or temporarily removed from
such aircraft; provided, however, that such aircraft
and property are not covered by a separate bail-
ment agreement.
(ii) The term "in the open" means located wholly
outside of buildings on the Contractor's premises or
at such other places as may be described in the
Schedule as being in the open for the purposes of
this clause, except that aircraft furnished by the
Government shall be deemed to be in the open at
all times while in the Contractor's possession, care
custody, or control.
(iii) The term "flight" means any flight demon-
stration, flight test, taxi test, or other flight, made
in the performance of this contract, or for the pur-
pose of safeguarding the aircraft, or previously ap-
proved in writing by the Contracting Officer. With
respect to land based aircraft, "flight" shall com-
mence with the taxi roll from a flight line on the
Contractor's premises, and continue until the air-
craft has completed the taxi roll in returning to a
flight line on the Contractor's premises; with re-
spect to seaplanes, "flight" shall commence with
the launching from a ramp on the Contractor's
premises and continue until the aircraft has com-
pleted its landing run .upon return and is beached
at a ramp on the Contractor's premises; with re-
spect to helicopters, "flight" shall commence upon
engagement of the rotors for the purpose of take-
off from the Contractor's premises and continue
until the aircraft has returned to the ground on
the Contractor's premises and the rotors are dis-
engaged; and with respect to vertical take-off air-
craft, "flight" shall commence upon disengagement
from any launching platform or device on the Con-
tractor's premises and continue until the aircraft
has been re-engaged to any launching platform
or device on the Contractor's premises; provided,
however, that aircraft off the Contractor's premises
shall be deemed to be in flight when on the ground
or water only during periods of reasonable dura-
tion following emergency landings, other landings
made in the performance of this contract, or land-
ings approved by the Contracting Officer in writing.
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(iv) The term "Contractor's premises" means
those premises designated as such in the Schedule
or in writing by the Contracting Officer, and any
other place to which aircraft are moved for the
purpose of safeguarding the aircraft.
(v) The term "operation" means operations and
tests, other than on any production line, of air-
craft, when not in flight, whether or not the air-
craft is in the open or in motion during the making
of any such operations or tests, and includes opera-
tions and tests of equipment, accessories, and power
plants, only when installed in aircraft.
(vi) The term "flight crew members" means the
pilot, the co-pilot and, unless otherwise specifically
provided in the Schedule, the flight engineer, navi-
gator, bombardier-navigator, and defensive systems
operator, when required, or assigned. to their respec-
tive crew positions, to conduct any flight on behalf
of the Contractor.
(c) (1) The Government's assumption of risk
under this clause, as to aircraft in the open, shall
continue in effect unless terminated pursuant to
subparagraph (3) below. Where ithe Contracting
Officer finds that any of such air?craft is in the
open under unreasonable conditions, he shall notify
the Contractor in writing of the conditions he finds
to be unreasonable and require the Contractor to
correct such conditions within a reasonable time.
(2) Upon receipt of such natice, the Contractor
shall act promptly to correct such conditions, re-
gardless of whether he agrees that such condi-
tions are in fact unreasonable. To the extent that
the Contracting Officer may later determine that
such conditions were not in fact unreasonable, an
equitable adjustment shall be made in the contract
price to compensate the Contractor for any addi-
tional costs it incurred in correcting such condi-
tions and the contract shall be modified in writing
accordingly. Any dispute as to the unreasonable-
ness of such conditions or the equitable adjust-
ment shall be deemed to be a dispute concerning
a question of the fact within the meaning of the
clause of this contract entitled "Disputes."
(3) If the Contracting Officer finds that the Con-
tractor has failed to act promptly to correct such,
conditions or has failed to correct such conditions
within a reasonable time, he may terminate the
Government's assumption of risk uxider this clause?
as to any of the aircraft which is in the open under
such conditions, such termination to be effective at
12:01 A. M, on the fifteenth day following the day
of receipt by the Contractor of written notice there-
of. If the Contracting Officer later determines that
the Contractor acted promptly to correct such con-
ditions or that the time taken by the Contractor
was not in fact unreasonable, an equitable adjust-
ment shall, notwithstanding paragraph (f> of this
clause, be made in the contract price to compensate
the Contractor for any additional costs he incurred
as a result of termination of the Government's as-
sum.ption of risk under this clause and the contract
shall be modified in writing accordingly. Any dis-
pute; as to whether the Contractor failed to act
promptly- to correct such conditions, or as to the
reasonableness of the time for correction of such
conditions, or as to such equitable adjustment, shall
be deemed to be a dispute concerning a question
of :fact within the meaning of the clause of this
contract entitled "Disputes."
(~1) In the event the Government's assumption
of :risk under this clause is terminated in accord-
ance with (3) above, the risk of loss with respect
to Government-furnished property shall be deter-
mir-ed in accordance with the clause of this con-
tract, if any, entitled "Government-Furnished Prop-
erty" until the Government's assumption of risk is
reixxstated in accordance with (5) below.
(i5) When unreasonable conditions have been
corrected, the Contractor shall promptly notify the
Government thereof. .The Government may elect
to again assume the risks and relieve the Contractor
of 1aabilities as provided in this clause, or not, and
the Contracting Officer shall notify the Contractor
of t:he Government's election. If, after correction
of the unreasonable conditions, the Government
elects to again assume such risks and relieve the
Cor.~tractor of such liabilities, the Contractor shall
be ~?ntitled to an equitable adjustment in the con-
tract price for costs of insurance, if any, extending
from the end, of the third working day after the
Contractor notifies the Government of such cor-
rection until the Government notifies the Contrac-
tor of such election. If the Government elects not
to again assume such risks, and such conditions
have in fact been corrected, the Contractor shall
be entitled to an equitable adjustment for costs
of :insurance, if any, extending after such third
working day.
(ci) The Government's assumption of risk shall
not extend to damage to, or loss or destruction of,
such aircraft:
(i.) resulting from failure of the Contractor, due
to willful misconduct or lack of good faith of any
of the Contractor's managerial personnel, to main-
tair.~ and administer a program for the protection
and. preservation of aircraft in the open, and dur-
ing operation, in accordance with sound industrial
pra~:tice (the term "Contractor's managerial per-
sonnel" means the Contractor's directors, officers,
and. any of its managers, superintendents, or other
equivalent representatives, who has supervision or
direction of all or substantially all of the Contrac-
tor's business, or all or substantially all of the
Contractor's operations at any one plant or separate
location at which this contract is performed, or a
separate and complete major industrial operation
in