NEGOTIATED CONTRACT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP71B00697R001800110017-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 32
• Document Creation Date: December 12, 2016
• Document Release Date: March 26, 2002
• Sequence Number: 17
• Publication Date: June 20, 1968
• Content Type: CONT

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IDEA-0310-68
Copy i of 5
25X1A NEGOTIATED CONTRACT Contract No.
25X1A
25X1A
25X1A
Contract For: See Schedule Amount: See Schedule
Mail Vouchers To: Performance Period:
See Schedule
Administrative Data:
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, herein-
after called the Contractor.
The parties hereto agree that the Contractor shall furnish the
facilities and deliver all supplies and perform all the services
set forth in the attached Schedule issued hereunder, for the
consideration stated therein.
The rights and obligations of the parties to this contract shall
be subject to and governed by the attached Schedule and the General
Provisions, which, together with this signature page and the
accompanying certificate comprise this Contract No 1 -1 In
the event of any inconsistency between the Schedule an e
General Provisions, the Schedule shall control.
IN WITNESS WHEREOF, the parties hereto have executed this con-
tract as of 2 0 JUN 1968
igna ures:
I THE UNITED STATES OF AMERICA
25X1 A BY-i
Contracting Officer
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SECRET
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25X1A
25X1A
Contract No.
CERTIFICATE
, certify that I am the
25X1A
25X1A
Corporate Secretary of the Corporation named as Con-
tractor herein; that who signed
this contract on behalf of the Contractor was then Manager of
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.
25X1A
(Corporate Seal)
SECRET
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PART I - SERVICES AND SUPPLIES TO BE FURNISHED . . . . . . . 4
PART II - PERFORMANCE OF SERVICES . . . . . . . . . . . . . . 4
PART III - RELATED WORK AND SERVICES . . . . . . . . . . . . . 5
PART IV - CONSIDERATION AND PAYMENTS . . . . . . . . . . . 5
PART V - PERIOD OF PERFORMANCE . . . . . . . . . . . . . . . 7
PART VI - FINANCIAL REPORTS . . . . . . . . . . . . . . . . . 7
PART VII - SPECIAL SECURITY RESTRICTIONS . . . . . . . . . . . 7
PART VIII - WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS . . . 8
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The Contractor shall provide all necessary equipment, tools,
and minor items of material and shall furnish the services of
all necessary qualified personnel required to efficiently and
expeditiously operate and maintain a plant facility for performing
modifications, repairs and overhauls of equipment of the types
and kinds produced and delivered under a separate contract
between the Contractor and the Government. The Contractor shall
also provide liaison with other suppliers of related equipment
and shall furnish routine in-plant engineering to analyze equip-
ment returned for modification, repair and overhaul to determine
causes of all technical difficulties or malfunctions. Engineering
data thereon such as service bulletins, modification data, and
technical solutions to problems which will facilitate and support
successful field operations shall be furnished. The Contractor
shall furnish qualified personnel to the Government's test site
for periods of time as may be authorized by the Contracting
Officer or his authorized representatives. The Contractor shall
train employees, who are acceptable to the Government, for use
as field technicians. The Government will issue formal authoriza-
tion, i.e., Depot Work Orders, or Headquarters Contract Approvals,
numbered serially, setting forth the plant Work, test site or
training services the Government desires to be performed here-
under, together with desired delivery schedules and preservation,
packaging, packing and marking requirements therefor. All major
items of materials required for modification, repair, or overhaul
of the equipment will be available to the Contractor as Govern-
ment furnished material from the spare parts inventory to be
provided and maintained by the Contractor under a separate con-
tract between the Contractor and the Government.
A. The extent and character of the work to be done by the
Contractor under this contract shall be subject to the general
supervision, direction, control and approval of the Contracting
Officer or his authorized representative, to whom the Contractor
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shall report and be responsible. In the event there should be
any dispute with regard to the extent and character of the work
to be performed, the matter shall be determined as provided in
General Provisions 8 Disputes.
B. The Contractor agrees to furnish sufficient personnel
of the labor categories specified in APPENDIX I hereof, as well
as supervisory and administrative personnel to assure successful
prosecution of the work.
C. All operations under the terms of this contract will
be done in. an. efficient and workmanlike manner and by qualified
personnel of the Contractor's organization who are thoroughly
familiar with the type of work being performed.
D. Services required by the Contractor and performed by
the Contractor's personnel of the labor categories specified
in APPENDIX I will be considered direct labor under this contract.
PART III - RELATED WORK AND SERVICES
In addition to the services and supplies to be provided
above, the Contractor will perform such other work and services
as may be requested by the Contracting Officer or his authorized
representative and agreed to by the Contractor, which are necessary
to ensure timely performance of the contract work.
PART IV - CONSIDERATION AND PAYMENTS
A. There has been allotted to this contract the following
amount:
Period Customer Amount Total
1 July 1968 - 30 June 1969 Common $100,000
No. 2 15,000
Grand Total $l15,000.00*
*Represen.ts partial funding and is contingent upon the availability
of Government funds for this purpose during FY-69.
Unexpended funds at the end. of a period are not authorized for
use in a subsequent period. The Contractor sTiall notify the
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Contracting Officer the amount of unexpended funds at the end of
each period. If, at any time, the Contractor is of the opinion
that the cost of the work authorized will exceed the amount
allotted for each Customer for a particular period, he shall
notify the Contracting Officer of the additional amount required.
B. In accordance with the clause of this contract entitled
"Payments," the Contractor shall be paid provisionally as follows:
1. For work and services performed by the Con-
tractor's personnel of the labor categories set forth
in APPENDIX I, the Contractor shall be paid the
applicable hourly rates stated in the column entitled
"CONTRACT HOURLY RATE," in APPENDIX I, as may be
amended from time to time, for each Direct Labor
hour of work or services actually performed here-
under by such personnel. The time of non-productive
personnel will not be included in direct labor, and
the Contractor agrees that only direct labor of its
personnel of the labor categories designated in
APPENDIX I, engaged in the work called for by this
contract will be included in its billings hereunder.
2. For materials and supplies furnished by the
Contractor or subcontractors under this contract,
other than minor items of materials and supplies to
be provided without direct cost to the Government,
the Contractor shall be reimbursed at actual cost.
Materials and supplies, other than minor items of
materials and supplies withdrawn from the Contractor's
stock for use on this contract, may be charged at
prices determined by the Contractor's established
method of pricing for its other business. No amount
representing profit shall be added to the cost or
price of supplies or materials furnished under this
contract.
3. For related work and services performed
hereunder by the Contractor, payment shall be made
in accordance with Paragraph (d) of Clause 6, Pay-
ments, of the General Provisions.
C. It is hereby agreed that the "CONTRACT HOURLY RATE" as
specified in APPENDIX I are based on straight time wages of Con-
tractor's employees directly engaged in the performance of work
under this contract and include all applicable overhead, General
and Administrative Expenses and Profit. In the event overtime
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work is determined to be necessary for the performance of the
work and is specifically authorized in writing by the Contracting
Officer or his authorized representative, it is understood and
agreed that the premium portion of any such authorized overtime
pay shall be billed as a direct cost in accordance with the Con-
tractor's established accounting practices.
D. Billings submitted by the Contractor shall indicate
the Customer, the period involved, and total funds allotted for
said period less total of all previous billing thereby showing
the balance available for expenditure in. that period. Under
this amount set forth the amount of the claim for the current
month reflecting the Work Orders or other work or services as
authorized by the Contracting Officer. The billing submitted
for the final claim for a period should have indicated thereon
the words "Final Claim" and show thereon. the unexpended balance
for each customer.
E. The cost of performing work authorized under this Con-
tract shall be charges to the funds allotted for the period in
which the work was actually performed regardless of when the
authorization was received by the Contractor.
PART V - PERIOD OF PERFORMANCE
This contract shall be effective for the period 1 July 1968
through 30 June 1969. The contract may be extended by mutual
agreement between the parties hereto.
PART VI - FINANCIAL REPORTS
The Contractor shall furnish Monthly Financial Reports in
accordance with OSA-2266-67,_as amended by OSA-4006-67.
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 sponsoring this contract and the work thereunder
except as the Contractor is directed to reveal, in writing, such
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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 Con-
tractor shall not interpret any clause or section of this con-
tract as requiring or permitting divulgence of such information
to any person, public or private, or to any officer or depart-
ment of the Government without the express consent of the Con-
tracting Officer or his duly authorized representative for
security matters.
PART VIII - WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS
Notwithstanding the requirements of any of the General
Provisions of this contract to the contrary, whensoever the
Contractor, in performance of the work under this contract,
shall find that the requirements of any of the clauses of the
General Provisions are in conflict with security instructions
issued to the Contractor by the Contracting Officer or by his
duly authorized representative for security matters, the Con-
tractor shall call the attention of the Contracting Officer to
such conflict and the Contracting Officer or his duly authorized
representative for security matters shall (i) modify or rescind
such security requirements or (ii) the Contracting Officer
shall issue to the Contractor a waiver of compliance with the
requirements of the General Provisions conflicting with such
security requirements. Any waiver of 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.
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GENERAL PROVISIONS
TIME AND MATERIALS CONTRACTS
1. DEFINITIONS. (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 "Secretary" means the Secretary, the Under Secretary, any Assistant
Secretary, or any other head or assistant 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
Officer) 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 employee who is a properly designated Contracting Officer; and the term includes,
except as otherwise provided in this contract, the authorized representative of a Contracting Officer acting within
the limits of his authority.
(c) Except as otherwise provided in this contract, the term "subcontracts" includes purchase orders under this
contract.
2. CHANGES. (Mar. 1964)-The Contracting Officer may at any time, by a written order, and without notice
to the sureties, if any, make changes, within the general scope of this contract, in any one or more of the following:
(i) drawings, designs, or specifications; (ii) method of shipment or packing; (iii) place of delivery; and (iv) the
amount of Government-furnished property. If any such change requires an increase or decrease in any hourly rate
or in the ceiling price provided for in this contract, or in the time required for the performance of any part of the
work under this contract, whether changed or not changed by any such order, or otherwise affects any other
provision of this contract, an equitable adjustment shall be made in the
delivery schedule, and (iv) in such other may csoiag affected, and hthe ct teh libe
modified in writing accordingly. Any claim byl the Contractor contract
under this clause must be asserted
within thirty (30) days from the date of receipt by the Contractor of the notification of change; provided, however,
that the Contracting Officer, if he decides that the facts justify such action, may receive and act upon any such claim
asserted at any time prior to final payment under this contract. Failure to agree to any adjustment shall be a dispute
concerning a question of fact within the meaning of the "Disputes" clause of this contract. However, nothing in this
clause shall excuse. the Contractor from proceeding with the contract as changed.
3. EXCUSABLE DELAYS. (Jul. 1958)-Except with respect to defaults of subcontractors, the Contractor shall
not be in default by reason of any failure in performance of this contract in accordance with its terms (including any
failure by the Contractor to make progress in the prosecution of the work hereunder which endangers such per-
formance) if such failure arises out of causes beyond the control and without the fault or negligence of the Con-
tractor. 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
subcon-
tractor to perform or make progress, and if such failure arises out of causes beyond the control of both the Contractor
and subcontractor, and without the fault or negligence of either of them, the Contractor shall not be deemed to be
in default, unless (i) the supplies or services to be furnished by the subcontractor were obtainable from other sources,
(ii) the Contracting Officer shall have ordered the Contractor in writing to procure such supplies or services from
such other sources, and (iii) the Contractor shall have failed to comply reasonably with such order. Upon request of
the Contractor, the Contracting Officer shall ascertain the facts and extent of such failure and, if he shall determine
that any failure to perform was occasioned by any one or more of the said causes, the delivery schedule shall be
revised accordingly, subject to the rights of the Government under the clause hereof entitled "Termination."
4. TERMINATION. (Mar. 1964)-(a) The performance of work under the contract may be terminated by the
Government in accordance with this clause in whole, or from time to time, in part:
(i) whenever the Contractor shall default in performance of this contract in accordance with its terms
(including in the term "default" any such failure by the Contractor to make progress in the prosecution
of the work hereunder as endangers such performance), and shall fail to cure such default within a
period of ten (10) days (or such longer periods as the Contracting Officer may allow) after receipt
from the Contracting Officer of a notice specifying the default; or
(ii) whenever for any reason the Contracting Officer shall determine that such termination is in the best
interest of the Government.
Any such termination shall be effected by delivery to the Contractor of a Notice of Termination specifying whether
termination is for the default of the Contractor or for the convenience of the Government, the extent to which per-
formance of work under the contract is terminated, and the date upon which such termination becomes effective. If,
after notice of termination of this contract for default under (i) above, it is determined for any reason that the
Contractor was not in default pursuant to (i), or that the Contractor's failure to
performance is due to causes beyond the control and without the fault or negligenceeofothe Contractor pursuant to
the provisions of the clause of this contract relating to excusable delays, the Notice of Termination shall be
deemed to have been issued under (ii) above, and the rights and obligations of the parties hereto shall in such event
be governed accordingly.
AFPI 71-17, June 65
(Supersedes AFPI 71-17 Nov 64)
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(b) After receipt of a Notice of Termination and exeept.as Otherwise directed by the Contracting Officer, the
Contractor shall:
(i) stop work under the contract on the date and to the extent specified in the Notice of Termination;
(ii) place no further orders or subcontracts for materials, services or facilities, except as may be neces-
sary for completion of such portion of the work under the contract as is not terminated;
(iii) terminate all orders and subcontracts to the extent that they relate to the performance of work ter-
minated by the Notice of Termination;
(iv) assign to the Government, in the manner and to the extent directed by the Contracting Officer, all
right, title, and interest of the Contractor under the orders or subcontracts so terminated, in which
case the Government shall have the right in its discretion, to settle or pay any or all claims arising
out of the termination of such orders and subcontracts;
(v) with the approval or ratification of the Contracting Officer, to the extent he may require, which ap-
proval or ratification shall be final and conclusive for all purposes of this clause, settle all outstanding
liabilities and all claims arising out of such termination of orders and subcontracts, the cost of which
would be payable by the Government in whole or in part, in accordance with the provisions of this
contract;
(vi) transfer title (to the extent that title has not already been transferred) and in the manner, to the
extent, and at the times directed by the Contracting Officer, deliver to the Government (A) the fabricated
or unfabricated parts, work in process, completed work, supplies, and other material produced as a part
of, or acquired in respect of the performance of, the work terminated by the Notice of Termination,
(B) the completed or partially completed plans, drawings, information, and other property which, if the
contract had been completed, would be required to be furnished to the Government, and (C) the jigs,
dies, fixtures, and other special tools and tooling acquired or manufactured for the performance of this
contract for the cost of which the Contractor has been or will be reimbursed under this contract;
(vii) use his best efforts to sell in the manner, at the times, to the extent, and at the price or prices directed
or authorized by the Contracting Officer, any property of the types referred to in (vi) above; provided,
however, that the Contractor (A) shall not be required to extend credit to any purchaser, and (B) may
acquire any such property under the conditions prescribed by and at a price or prices approved by the
Contracting Officer; and provided further that the proceeds of any such transfer or disposition shall be
applied in reduction of any payments to be made by the Government to the Contractor under this con-
tract or shall otherwise be credited to the price or cost of the work covered by this contract or paid in
such other manner as the Contracting Officer may direct;
(viii) complete performance of such part of the work as shall not have been terminated by the Notice of
Termination; and
(ix) 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 any amount due or owing 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 authorized by the Contracting Officer and may request the Government to remove such items or
enter into a storage agreement covering' them. Not later than fifteen (15) days thereafter, the Government will
accept such items and remove them or enter into a storage agreement covering the same; provided, that the list
submitted shall be subject to verification by the Contracting Officer upon removal of the items, or if the items are
stored, within forty-five (45) days from the date of submission of the list. 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 his ter-
mination 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 one year 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 one 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 one year period
or any extension thereof. Upon failure of the Contractor to submit his termination claim within the time allowed,
the Contracting Officer may, subject to any Settlement Review Board approvals required by Section VIII of the
Armed Services Procurement Regulation in effect as of the date of execution of this contract, 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), and subject to 'any Settlement Review Board approvals re-
quired by Section VIII of the Armed Services Procurement Regulation in effect as of the date of execution of this
contract, the Contractor and the Contracting Officer may agree upon the whole or any part of the amount or amounts
to be paid to the Contractor by reason of the total or partial termination of work pursuant to this clause. The con-
tract shall be amended accordingly, and the Contractor shall be paid the agreed amount.
(e) In the event of the failure of the Contractor and the Contracting Officer to agree in whole or in part, as
provided in paragraph (d) above, as to the amounts to be paid to the Contractor in connection with the termination
of work pursuant to this clause, the Contracting Officer shall, subject to any Settlement Review Board approvals re-
quired by Section VIII of the Armed Services Procurement Regulation in effect as of the date of execution of this
contract, determine, on the basis of information available to him, the amount, if any, due to the Contractor by
reason of the termination, and shall pay to the Contractor the amount determined as follows:
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?(i) if the t ina ion. o he con ract is etermined to be or he convenience o e overnment, there
shall be included-
(A) an amount for direct labor hours (as defined in the Schedule of the contract) which shall be deter-
mined by multiplying the number of direct labor hours expended prior to the effective date of the
Notice of Termination by the hourly rate or rates set forth in the Schedule, less any hourly rate
payments theretofore made to the Contractor;
(B) an amount (computed pursuant to the provisions of the contract providing for payment for materials)
for material expenses incurred prior to the effective date of the Notice of Termination, not previously
paid to the Contractor for the performance of this contract;
(C) an amount for labor and material expenses computed as if the expenses were incurred prior to the
effective date of the termination reasonably incurred after the effective date of the Notice of
Termination with the approval of or as directed by the Contracting Officer, provided that the Con-
tractor shall discontinue such expenses as rapidly as practicable;
(D) to the extent not included in (A), (B), and (C) above, the cost of settling and paying claims arising
out of the termination of work under subcontracts or orders, as provided in paragraph (b) (v)
above, which are properly chargeable to the terminated portion of this contract; and
(E) the reasonable costs of settlement, including accounting, legal, clerical, and other expenses reason-
ably necessary for the preparation of settlement claims and supporting data with respect to the
terminated portion of the contract and for the termination and settlement of subcontracts there-
under, together with reasonable storage, transportation, and other costs incurred in connection with
the protection or disposition of termination inventory; or
(ii) if the termination of the contract is for the default of the Contractor, there shall be included the amounts
computed in accordance with (i) above except there shall not be included-
(A) any amount for the preparation of the Contractor's settlement proposal; or
(B) the portion of the hourly rate allocable to profit for any direct labor hours expended in furnishing
materials and services not delivered to and accepted by the Government.
(f) The Contractor shall have the right of appeal, under the "Disputes" clause of this contract, from any
determination made by the Contracting Officer under paragraphs (c) or (e), above, except that if the Contractor has
failed within the time provided in paragraph (c), above, to request extension of such time, he shall have no such
right of appeal. In any case where the Contracting Officer has made a determination of the amount due under para-
graph (c) or (e), above, the Government shall pay to the Contractor the following: (i) if there is no right of
appeal hereunder, or if no timely appeal has been taken, the amount so determined by the Contracting Officer; or
(ii) if an appeal has been taken, the amount finally determined on such appeal.
(g) In arriving at the amount due the Contractor under this clause, there shall be deducted (i) all unliqui-
dated advance or other payments theretofore made to the Contractor, applicable to the terminated portion of this
contract; (ii) any claim which the Government may have against the Contractor in connection with this contract;
and (iii) the agreed price for, or the proceeds of sale of, any materials, supplies, or other things acquired by the
Contractor or sold pursuant to the provisions of this clause and not otherwise recovered by or credited to the Gov-
ernment.
(h) In the event of a partial termination, the hourly rates for direct labor hours with respect to the work
under the continued portion of the contract shall 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 under such terms and conditions as it prescribes may make partial payments and pay-
ments on account against costs incurred by the Contractor in connection with the terminated portion of the contract,
whenever in the opinion of the Contracting Officer the aggregate of such payments shall be within the amount to
which the Contractor will be entitled hereunder. If the total of such payments is in excess of the amount finally
determined to be due under this clause, such excess shall be payable by the Contractor to the Government upon
demand, together with interest computed at the rate of six (6) percent per annum, for the period from the date
such excess payment is received by the Contractor to the date on which such excess is repaid to the Government;
provided, however that no interest shall be charged with respect to any such excess payment attributable to a re-
duction in the Contractor's claim by reason of retention or other disposition of termination inventory until ten (10)
days after the date of such retention or disposition, or such later date as determined by the Contracting Officer by
reason of the circumstances.
* 5. GOVERNMENT PROPERTY (COST-REIMBURSEMENT) (June 1965) (a) Government-Furnished Prop-
erty. The Government shall deliver to the Contractor, for use in connection with and under the terms of this con-
tract, the property described as Government-furnished property in the Schedule or Specifications, together with such
related data and information as the Contractor may request and as may reasonably be required for the intended use
of such property (hereinafter referred to 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 Sched-
ule 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, if any,
occasioned the Contractor and shall equitably adjust the ceiling price, hourly rate, the delivery or performance
date, or all of them, and any other contractual provisions affected by any such delay, in accordance with the pro-
cedures provided for in the clause of this contract entitled "Changes." In the event that Government-furnished
property is received by the Contractor in a condition not suitable for the intended use, the Contractor shall, upon
receipt thereof notify the Contracting Officer of such fact and, as directed by the Contracting Officer, either (i)
return such property at the Government's expense or otherwise dispose of the property or (ii) effect repairs or
modifications. Upon completion of (i) or (ii) above, the Contracting Officer upon written request of the Contractor
shall equitably adjust the ceiling price, hourly rate, the delivery or performance date, or all of them, and any other
contractual provisions affected by the return or disposition, or the repair or modification in accordance with the
procedures provided for in the clause of this contract entitled "Changes." The foregoing provisions for adjustment
are exclusive and the Government shall not be liable to suit for breach of contract by reason of any delay in de-
livery of Government-furnished property or delivery of such property in a condition not suitable for its intended use.
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(1) By notice in writing, the Contracting Officer may (i) decrease the property furnished or to be furnished
by the Government under this contract, or (ii) substitute other Government-owned property for property to be fur-
nished by the Government, or to be acquired by the Contractor for the Government, under this contract. The Con-
tractor shall promptly take such action as the Contracting Officer may direct with respect to the removal and
shipping of property covered by such notice.
(2) In the event of any decrease in or substitution of property pursuant to paragraph (1) above, or any
withdrawal of authority to use property provided under any other contract or lease, which property the Govern-
ment had agreed in the Schedule to make available for the performance of this contract, the Contracting Officer,
upon the written request of the Contractor (or, if the substitution of property causes a decrease in the cost of
performance, on his own initiative), shall equitably adjust such contractual provisions as may be affected by the
decrease, substitution or withdrawal, in accordance with the procedures provided for in the "Changes" clause of
this contract.
(c) Title. Title to all property furnished by the Government shall remain in the Government. Title to all
property purchased by the Contractor, for the cost of which the Contractor is entitled to be reimbursed as a direct
item of cost under this contract, shall pass to and vest in the Government upon delivery of such property by the
vendor. Title to other property, the cost of which is reimbursable to the Contractor under the contract, shall pass
to and vest in the Government upon (i) issuance for use of such property in the performance of this contract, or
(ii) commencement of processing or use of such property in the performance of this contract, or (iii) reimburse-
ment of the cost thereof by the Government in whole or in part, whichever first occurs. All Government-furnished
property, together with all property acquired by the Contractor title to which vests in the Government under this
paragraph, are subject to the provisions of this clause and are hereinafter collectively referred to as "Government
property." Title to the Government property shall not be affected by the incorporation or attachment thereof to any
property not owned by the 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.
(d) Property Administration. The Contractor shall comply with the provisions of the "Manual for Control of
Government Property in Possession of Contractors" (Appendix B, Armed Services Procurement Regulation), as in
effect on the date of the contract, which Manual is hereby incorporated by reference and made a part of this con-
tract. Material to be furnished by the Government shall be ordered or returned by the Contractor, when required, in
accordance with the "Manual for Military Standard Requisitioning and Issue Procedure (MILSTRIP) for Defense
Contractors" (Appendix H, Armed Services Procurement Regulation) as in effect on the date of this contract, which
Manual is hereby incorporated by reference and made a part of this contract.
(e) Use of Government Property. The Government property shall, unless otherwise provided herein or approved
by the Contracting Officer, be used only for the performance of this contract.
(f) Maintenance of Government Property. The Contractor shall maintain and administer in accordance with
sound industrial practice, a program for the maintenance, repair, protection and preservation of Government prop-
erty so as to assure its full availability and usefulness for the performance of this contract. The Contractor shall
take all reasonable steps to comply with all appropriate directions or instructions which the Contracting Officer
may prescribe as reasonably necessary for the protection of Government property.
(g) Risk of Loss.
(1) The Contractor shall not be liable for any loss of or damage to the Government property, or for expenses
incidental to such loss or damage, except that the Contractor shall be responsible for any such loss or damage
(including expenses incidental thereto):
(i) which results from willful misconduct or lack of good faith on the part of any one of the Contractor's
directors or officers, or on the part of any of his managers, superintendents, or other equivalent
representatives, who has supervision or direction of-
(A) all or substantially all of the Contractor's business; or
(B) all or substantially all of the Contractor's operations at any one plant or separate location, in which
this contract is being performed; or
(C) a separate and complete major industrial operation in connection with the performance of this con-
tract;
(ii) which results from a failure on the part of the Contractor, due to the willful misconduct or lack of
good faith on the part of any of his directors, officers, or other representatives mentioned in subpara-
graph (i) above-
(A) to maintain and administer, in accordance with sound industrial practice, the program for mainte-
nance, opair, protection and preservation of Government property as required by paragraph (f)
(B) to take all reasonable steps to comply with any appropriate written directions of the Contracting
Officer under paragraph (f) hereof;
(iii) for which the Contractor is otherwise responsible under the express terms of the clause or clauses
designated in the Schedule;
(iv) which results from a risk expressly required to be insured under this contract, but only to the extent
of the insurance so required to be procured and maintained, or to the extent of insurance actually pro-
cured and maintained, whichever is greater; or
(v) which results from a risk which is in fact covered by insurance or for which the Contractor is other-
wise reimbursed, but only to the extent of such insurance or reimbursement;
provided that, if more than one of the above exceptions shall be applicable in any case, the Contractor's liability
under any one exception shall not be limited by any other exception. If the Contractor transfers Government property
to the possession and control of a subcontractor, the transfer shall not affect the liability of the Contractor for loss
or destruction of or damage to the property as set forth above. However, the Contractor shall require the subcon-
tractor to assume the risk of, and be responsible for, any loss or destruction of or damage to the property while in
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the la#ter's possession or control, except to the extent that the subcontract, with the prior approval of the Contract-
ing Officer, provides for the relief of the subcontractor from such liability. In the absence of such approval, the
subcontract shall contain appropriate provisions requiring the return of all Government property in as good condition
as when received, except for reasonable wear and tear or for the utilization of the property in accordance with the
provisions of the prime contract.
(2) The Contractor shall not be reimbursed for, and shall not include as an item of overhead, the cost of
insurance, or any provisions for a reserve, covering the risk of loss of or damage to the Government property, except
to the extent that the Government may have required the Contractor to carry such insurance under any other pro-
visions of this contract.
(3) Upon the happening of loss or destruction of or damage to the Government property, the Contractor
shall notify the Contracting Officer thereof, and shall communicate with the Loss and Salvage Organization, if
any, now or hereafter designated by the Contracting 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 Government 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 Officer a statement of-
(i) the lost, destroyed and damaged Government property;
(ii) the time and origin of the loss, destruction or damage;
(iii) all known interests in commingled property of which the Government property is a part; and
(iv) the insurance, if any, covering any 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. For any such repairs or renovations so directed, the Contracting Officer shall,
upon written request of the Contractor, equitably adjust the ceiling price, hourly rate, delivery or performance date,
or all of them in accordance with the procedures provided for in the clause of this contract entitled "Changes." In
any such equitable adjustment due regard shall be given to the liability of the Contractor as determined under (1)
above.
(4) In the event the Contractor is indemnified, reimbursed, or otherwise compensated for any loss or
destruction of or damage to the Government property, he shall use the proceeds to repair, renovate or replace the
Government property involved, or shall credit such proceeds agaist 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 reason-
able assistance and cooperation (including the prosecution of suit and the execution of instruments of assignments
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.
(5) If this contract is for the development, production, modification, maintenance, or overhaul of aircraft,
or otherwise involves the furnishing of aircraft by the Government, the clause of this, contract entitled "Flight
Risks" shall control, to the extent it is applicable, in the case of loss or destruction of, or damage to, aircraft.
(h) Access. The Government, and any persons designated by it, shall at all reasonable times have access to
the premises where any of the Government property is located, for the purpose of inspecting the Government
property.
(i) Final Accounting and Disposition of Government Property. Upon the completion of this contract, or at such
earlier dates as may be fixed by the Contracting Officer, the Contractor shall submit, in a form acceptable to the
Contracting Officer, inventory schedules covering all items of Government property not consumed in the performance
of this contract (including any resulting scrap) or not theretofore delivered to the Government, and shall prepare
for shipment, deliver f.o.b. origin, or dispose of the Government property, as may be directed or authorized by the
Contracting Officer. The net proceeds of any such disposal shall be credited to the contract price or shall be paid in
such other manner as the Contracting Officer may direct.
(j) Restoration of Contractor's Premises. Unless otherwise provided herein, the Government:
(i) may abandon any Government property in place, and thereupon all obligations of the Government re-
garding such abandoned property shall cease; and
(ii) shall not be under any duty or obligation to restore or rehabilitate, or to pay the costs of the restor-
ation or rehabilitation of, the Contractor's plant or any portion thereof which is affected by the aban-
donment or removal of any Government property.
(k) Communications. All communications issued pursuant to this clause shall be in writing or in accordance
with the "Manual for Military Standard Requisitioning and Issue Procedure (MILSTRIP) for Defense Contractors"
(Appendix H, Armed Services Procurement Regulation).
'F 6. PAYMENTS (June 1965)-The Contractor shall be paid as follows upon the submission of invoices or vouchers
approved by the Contracting Officer.
(a) Hourly Rate.
(1) The amounts computed by multiplying the appropriate hourly rate, or rates, set forth in the Schedule
by the number of direct labor hours performed, which rates shall include wages, overhead, general and administra-
tive expense and profit. Fractional parts of an hour shall be payable on a prorated basis. Vouchers may be sub-
mitted once each month (or at more frequent intervals, if approved by the Contracting Officer), to the Contracting
Officer or his designee. The Contractor will substantiate vouchers by evidence of actual payment and by individual
daily job timecards, or such other substantiation approved by the Contracting Officer. Promptly after receipt of each
substantiated voucher, the Government shall, except as otherwise provided in this contract, and subject to the pro-
visions of (e) below, make payment thereon as approved by the Contracting Officer.
(2) Unless otherwise set forth in the Schedule, five percent (5%) of the amount due under this paragraph
(a) shall be withheld from each payment by the Contracting Officer but the total amount withheld shall not exceed
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 $50,000. r} , ,g l2OMO8 29i I W4R ,7 4%9~1r8PQ b9 the Contractor as
provided n gra {~"e
(3) Unless provisions of the Schedule hereof otherwise specify, the hourly rate or rates set forth in the
Schedule shall not be varied by virtue of the Contractor having performed work on an overtime basis. If no over-
time rates are provided in the Schedule and overtime work is approved in advance by the Contracting Officer,
overtime rates will be negotiated. Failure to agree upon these overtime rates will be treated as a dispute under the
"Disputes" clause of this contract. If the Schedule provides rates for overtime, the premium portion of those rates
will be reimbursable only to the extent the overtime is approved by the Contracting Officer.
(b) Materials and Subcontracts.
(1) Allowable costs of direct materials shall be determined by the Contracting Officer in accordance with
Part 2, Section XV, of the Armed Services Procurement Regulation in effect on the date of this contract. Reasonable
and allocable material handling costs may be included in the charge for material at cost to the extent they are
clearly excluded from the hourly rate. The Contractor shall support all material costs claimed by submitting paid
invoices or storeroom requisitions, or by other substantiation acceptable to the Contracting Officer. Direct materials,
as referenced by this clause, are defined as those materials which enter directly into the end product, or which are
used or consumed directly in connection with the furnishing of such product.
(2) The cost of subcontracts which are authorized pursuant to the "Subcontracts" clause hereof shall be
reimbursable costs hereunder, provided such costs are consistent with subparagraph (3) below. Reimbursable cost
in connection with subcontracts shall be limited to the amounts actually required to be paid by the Contractor to the
subcontractor and shall not include any costs arising from the letting, administration or supervision of performance
of the subcontract, which costs are included in the hourly rate or rates payable under (a) (1) above.
(3) The Contractor shall, to the extent of his ability, procure materials at the most advantageous prices
available with due regard to securing prompt delivery of satisfactory materials, and take all cash and trade dis-
counts, rebates, allowances, credits, salvage, commissions, and other benefits. When unable to take advantage of
such benefits, it.shall promptly notify the Contracting Officer to that effect, and give the reason therefor. Credit shall
be given to the Government for cash and trade discounts, rebates, allowances, credits, salvage, the value of result-
ing scrap when the amount of such scrap is appreciable, commissions, and other amounts which have been accrued
to the benefit of the Contractor, or would have so accrued except for the fault or neglect of the Contractor. Such
benefits lost through no fault or neglect on the part of the Contractor, or lost through fault of the Government, shall
not be deducted from gross costs.
(c) It is estimated that the total cost to the Government for the performance of this contract will not exceed
the ceiling price set forth in the Schedule, and the Contractor agrees to use his best efforts to perform the work
specified in the Schedule and all obligations under this contract within such ceiling price. If at any time the Con-
tractor has reason to believe that the hourly rate payments and material costs which will accrue in the perform-
ance of this contract in the next succeeding thirty (30) days, when added to all other payments and costs previously
accrued, will exceed eight-five percent (85%) of the ceiling price then set forth in the Schedule, the Contractor
shall notify the Contracting Officer to that effect giving his revised estimate of the total price to the Government
for the performance of this contract, together with supporting reasons and documentation. If at any time during
the performance of this contract, the Contractor has reason to believe that the total price to the Government for the
performance of this contract will be substantially greater or less than the then stated ceiling so notify the Contracting Officer, giving his revised estimate of the total price g price,
performance of this
contract, together with supporting during h for e the pmae of this on-
reasons and documentation. If at any time during the performance of this con-
tract, the Government has reason to believe that the work to be required in the performance of this contract will
be substantially greater or less than the stated ceiling price, the Contracting Officer will so advise the Contractor,
giving the then revised estimate of the total amount of effort to be required under the contract. T
shall forth din t ehSchedule, and t he C onnot be
not be bliga ed toacctor any ontinue amount in excess
e if of tdo so he ceiling wthe ceiling g price set
price set forth in the Schedule, unless and until the Contracting Officer shall have to notified the Cont ac or
in writing that such ceiling price has been increased and shall have specified in such notice a revised ceiling which
shall thereupon constitute the ceiling price for performance under this contract. When and to the extent that the
ceiling price set forth in the Schedule has been increased, any hours expended and material costs incurred by the Con-
tractor in excess of the ceiling price prior to the increase shall be allowable to the same extent as if such hours ex-
pended and material costs have been incurred after such increase in the ceiling price.
(e) At any time or times prior to final payment under this contract the Contracting Officer may cause to be
made such audit of the invoices or vouchers and substantiating material as shall be deemed necessary. Each pay-
ment theretofore made shall be subject to reduction to the extent of amounts which are found by the Contracting
Officer not to have been properly payable, and shall also be subject to reduction for overpayments, or to increase
for underpayments, on preceding invoices or vouchers. Upon receipt and appoval of the voucher or invoice desig-
nated by the Contractor as the "completion voucher" or "completion invoice" and substantiating material, and upon
compliance by the Contractor with all provisions of this contract (including, without limitation, provisions relating
to patents and the provisions of (f) and (g) below), the Government shall as promptly as may be practicable pay
any balance due and owing the Contractor. The completion invoice or voucher, and substantiating material, shall be
submitted by the Contractor as promptly as may be practicable following completion of the work under this con-
tract, 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.
(f) The Contractor and each assignee, under an assignment entered into under this contract and 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, a release discharging the Government, its officers, agents, and employees of and from
all liabilities, obligations, and claims arising out of or under this contract, subject only to the following exceptions:
(i) specified claims in stated amounts, or in estimated amounts where the amounts are not susceptible of
exact statement by the Contractor;
(ii) claims, together with reasonable expenses incidental thereto, based upon the liabilities of the Contrac-
tor to third parties arising out of the performance of this 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
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years a er he a e o he release or the date of any notice
to the Contractor that the Government is prepared to make final payment, whichever is earlier; and
(iii) claims for reimbursement of costs (other than expenses of the Contractor by reason of its indemnifica-
tion of the Government against patent liability), including reasonable expenses incidental thereto, in-
curred by the Contractor under the provisions of this contract relating to patents.
(g) The Contractor agrees that any refunds, rebates, or credits (including any interest thereon) accruing to
or received by the Contractor or any assignee, which arise under the materials portion of this contract and for
which the Contractor has received reimbursement, shall be paid by the Contractor to the Government. The Contrac-
tor and each assignee, under an assignment entered into under this contract and in effect at the time of final pay-
ment 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 such refunds, rebates, or credits (including any interest
thereon) in form and substance satisfactory to the Contracting Officer.
7. ASSIGNMENT OF CLAIMS. (Feb. 1962)-(a) Pursuant to the provisions of the Assignment of Claims Act of
1940, as amended (31 U.S.C. 203, 41 U.S.C. 15), if this contract provides for payments aggregating $1,000 or more,
claims for monies due or to become due the Contractor from the Government under this contract may be assigned
to a bank, trust company, or other financing institution, including any Federal lending agency, and may thereafter
be further assigned and reassigned to any such institution. Any such assignment or ressignment shall cover
all amounts payable under this contract and not already paid, and shall not be made to more than one party,
except that any such assignment or reassignment may be made to one party as agent or trustee for two or more
parties participating in such financing. Unless otherwise provided in this contract, payments to an assignee of any
monies due or to become due under this contract shall not, to the extent provided in said Act, as amended, be
subject to reduction or set-off.
(b) In no event shall copies of this contract or of any plans, specifications, or other similar documents re-
lating 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 furnished, or any information contained therein may be dis-
closed, to such assignee upon the prior written authorization of the Contracting Officer.
8. DISPUTES. (Jan. 1958)-(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 reduce his decision to writing and mail or otherwise furnish a copy thereof to the Contractor. The decision
of the Contracting Officer shall be final and conclusive unless, within 30 days from the date of receipt of such copy,
the Contractor. mails or otherwise furnishes to the Contracting Officer a written appeal addressed to the Secretary.
The decision of the Secretary or his duly authorized representative for the determination of such appeals shall be
final and conclusive unless determined by a court of competent jurisdiction to have beeen fraudulent, or capricious,
or arbitrary, or so grossly erroneous as necessarily to imply bad faith, or not supported by substantial evidence.
In connection with any appeal proceeding under this clause, the Contractor shall be afforded an opportunity to be
heard and to offer evidence in support of his appeal. Pending final decision of a dispute hereunder, the Contractor
shall proceed diligently with the performance of the contract and in accordance with the Contracting Officer's decision.
(b) This "Disputes" clause does not preclude consideration of law questions in connection with decisions pro-
vided for in paragraph (a) above; provided, that nothing in this contract shall be construed as making final the
decision of any administrative official, representative, or board on a question of law.
9. CONVICT LABOR. (Mar. 1949)-In connection with the performance of work under this contract, the Con-
tractor agrees not to employ any person undergoing sentence of imprisonment at hard labor.
10. SUBCONTRACTS. (Mar. 1964)-(a) No contract shall be made by the Contractor for the furnishing of
any of the work herein contracted for without the written approval of the Contracting Officer. For the purpose of
this clause, purchase of raw material or commercial stock items shall not be considered work.
(b) The Contractor agrees that no subcontract placed under this contract shall provide for payment on a cost-
plus-percentage-of-cost basis.
11. CONTRACT WORK HOURS STANDARDS ACT-OVERTIME COMPENSATION. (June 1964)-This con-
tract, to the extent that it is of a character specified in the Contract Work Hours Standards Act (40 U.S.C. 327-330),
is subject to the following provisions and to all other applicable provisions and exceptions of such Act and the
regulations of the Secretary of Labor thereunder.
(a) Overtime requirements. No Contractor or subcontractor contracting for any part of the contract work
which may require or involve the employment of laborers or mechanics shall require or permit any laborer or
mechanic in any workweek in which he is employed on such work to work in excess of eight hours in any calendar
day or in excess of forty hours in such workweek on work subject to the provisions of the Contract Work Hours
Standards Act unless such laborer or mechanic receives compensat;.on at a rate not less than one and one-half times
his basic rate of pay for all such hours worked in excess of eight hours in any calendar day or in excess of forty
hours in such workweek, whichever is the greater number of overtime hours.
(b) Violation; liability for unpaid wages; liquidated damages. In the event of any violation of the provisions
of paragraph (a), the Contractor and any subcontractor responsible therefor shall be liable to any affected employee
for his unpaid wages. In addition, such Contractor and subcontractor shall be liable to the United States for liqui-
dated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic em-
ployed in violation of the provisions of paragraph (a) in the sum of $10 for each calendar day on which such
employee was required or permitted to be employed tin such work in excess of eight hours or in excess of his standard
workweek of forty hours without payment of the overtime wages required by paragraph (a).
(c) Withholding for unpaid wages and liquidated damages. The Contracting Officer may withhold from the
Government Prime Contractor, from any moneys payable on account of work performed by the Contractor or sub-
contractor, such sums as may administratively be determined to be necessary to satisfy any liabilities of such Con-
tractor or subcontractor for unpaid wages and liquidated damages as provided in the provisions of paragraph (b).
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 (d) s pptov~d '~im~- tease 2QO2if QvarCJ~d la3lt~i?p7(~P91 % c1001 in 11 subcontracts,
and shall require their inclusion in all subcontracts of any tier.
(e) Records. The Contractor shall maintain payroll records containing the information specified in 29 CFR
516.2(a). Such records shall be preserved for three years from the completion of the contract.
12. WALSH-HEALEY PUBLIC CONTRACTS ACT. (Jan. 1958)-If this contract is for the manufacture or fur-
nishing of materials, supplies, articles, or equipment in an amount which exceeds or may exceed $10,000 and is
otherwise subject to the Walsh-Healey Public Contracts Act, as amended (41 U.S.C. 35-45), there are hereby incor-
porated by reference all representations and stipulations required by said Act and regulations issued thereunder by
the Secretary of Labor, such representations and stipulations being subject to all applicable rulings and interpreta-
tions of the Secretary of Labor which are now or may hereafter be in effect.
13. EQUAL OPPORTUNITY (Apr. 1964).
(The following clause is applicable unless this contract is exempt under the rules and regulations of the Presi-
dent's Committee on Equal Employment Opportunity (4]. C.F.R. Chapter 60). Exemptions include contracts and
subcontracts (i) not exceeding $10,000, (ii) not exceeding $100,000 for standard commercial supplies or raw mate-
rials, and (iii) under which work is performed outside the United States and no recruitment of workers within the
United States is involved.)
During the performance of this contract, the Contractor agrees as follows:
(a) The Contractor will not discriminate against any employee or applicant for employment because of race,
creed, color, or national origin. The Contractor will take affirmative action to ensure that applicants are employed,
and that employees are treated during employment, without regard to their race, creed, color, or national origin.
Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; re-
cruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selec-
tion for training, including apprenticeship. The Contractor agrees to post in conspicuous places, available to em-
ployees and applicants for employment, notices to be provided by the Contracting Officer setting forth the provisions
of this nondiscrimination clause.
(b) The Contractor will, in all solicitations or advertisements for employees placed by or on behalf of the Con-
tractor, state that all qualified applicants will receive consideration for employment without regard to race, creed,
color, or national origin.
(c) The Contractor will send to each labor union or representative of workers with which he has a collective
bargaining agreement or other contract or understanding, a notice, to be provided by the Agency Contracting
Officer, advising the said labor union or workers' representative of the Contractor's commitments under this nondis-
crimination clause, and shall post copies of the notice in conspicuous places available to employees and applicants
for employment.
(d) The Contractor will comply with all provisions of Executive Order No. 10925 of March 6, 1961, as amended,
and of the rules, regulations, and relevant orders of the President's Committee on Equal Employment Opportunity
created thereby.
(e) The Contractor will furnish all information and reports required by Executive Order No. 10925 of March 6,
1961, as amended, and by the rules, regulations, and orders of the said Committee, or pursuant thereto, and will
permit access to his books, records, and accounts by the contracting agency and the Committee for purposes of
investigation to ascertain compliance with such rules, regulations, and orders.
(f) In the event of the Contractor's noncompliance with the nondiscrimination clause of this contract or with
any of the said rules, regulations, or orders, this contract may be cancelled, terminated, or suspended in whole or
in part and the Contractor may be declared ineligible for further Government contracts in accordance with proce-
dures authorized in Executive Order No. 10925 of March 6, 1961, as amended, and such other sanctions may be
imposed and remedies invoked as provided in the said Executive Order or by rule, regulation, or order of the Presi-
dent's Committee on Equal Employment Opportunity, or as otherwise provided by law.
(g) The Contractor will include the provisions of paragraphs (a) through (g) in every subcontract or pur-
chase order unless exempted by rules, regulations, or orders of the President's Committee on Equal Employment
Opportunity issued pursuant to section 303 of Executive Order No. 10925 of March 6, 1961, as amended, so that such
provisions will be binding upon each subcontractor or vendor.* The Contractor will take such action with respect
to any subcontract or purchase order as the contracting agency may direct as a means of enforcing such provisions,
including sanctions for noncompliance: Provided, however, that in the event the Contractor becomes involved in, or
is threatened with, litigation with a subcontractor or vendor as a result of such direction by the contracting agency,
the Contractor may request the United States to enter into such litigation to protect the interest of the United States.
* Unless otherwise provided, the "Equal Opportunity" clause is not required to be inserted in subcontracts below
the second tier, except for subcontracts involving the performance of "construction work" at the "site of construc-
tion" (as those terms are defined in the Committee's rules and regulations) in which case the clause must be
inserted in all such subcontracts. Subcontracts may incorporate by reference the "Equal Opportunity" clause.
14. OFFICIALS NOT TO BENEFIT. (Jul. 1949)-No member of or delegate to Congress, or resident commis-
sioner, shall be admitted to any share or part of this contract, or to any benefit that may arise therefrom; but this
provision shall not be construed to extend to this contract if made with a corporation for its general benefit.
15. COVENANT AGAINST CONTINGENT FEES. (Jan. 1958)-The Contractor warrants that no person or sell-
ing agency has been employed or retained to solicit or secure this contract upon an agreement or understanding
for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established
commercial or selling agencies maintained by the Contractor for the purpose of securing business. For breach or
violation of this warranty the Government shall have the right to annul this contract without liability or in its
discretion, to deduct from the contract price or consideration, or otherwise recover, the full amount of such com-
mission, percentage, brokerage or contingent fee.
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1*0 NW
16.' AUDIT AND RECORDS. (Sep. 1964)
(a) The Contractor shall maintain books, records, documents, and other evidence and accounting procedures
and practices, sufficient to reflect properly all direct and indirect costs of whatever nature claimed to have been
incurred and anticipated to be incurred for the performance of this contract. The foregoing constitute "records"
for the purposes of this clause.
(b) The Contractor's plants, or such part thereof as may be engaged in the performance of this contract,
and his records shall be subject at all reasonable times to inspection and audit by the Contracting Officer or his
authorized representative.
(c) The Contractor shall preserve and make available his records (i) until the expiration of three years from
the date of final payment under this contract,-and (ii) for such longer period, if any, as is required by applicable
statute, or by other clauses of this contract, or by (A) or (B) below.
(A) If this contract is completely or partially terminated, the records relating to the work terminated shall
be preserved and made available for a period of three years from the date of any resulting final settlement.
(B) Records which relate to (i) appeals under the "Disputes" clause of this contract or (ii) litigation or
the settlement of claims arising out of the performance of this contract, shall be retained until such appeals, litigation,
or claims have been disposed of.
(d) (1) The Contractor shall insert the substance of this clause, including the whole of this paragraph (d),
in each subcontract hereunder that is not on a firm filed-price basis.
(2) The Contractor shall insert the substance of the following clause in each firm fixed-price subcontract
hereunder in excess of $100,000, except those subcontracts covered by subparagraph (3) below.
AUDIT-
(a) For purposes of verifying that cost or pricing data submitted in conjunction with the negotiation of
this contract or any contract change or other modification involving an amount in excess of $100,000 are accu-
rate, complete, and current, the Contracting Officer, or his authorized representatives, shall-until the expira-
tion of three years from the date of final payment under this contract-have the right to examine those books,
records, documents, and other supporting data which will permit adequate evaluation of the cost or pricing
data submitted, along with the computations and projections used therein, which were available to the Contrac-
tor as of the, date of execution of the Contractor's Certificate of Current Cost or Pricing Data.
(b) The Contractor agrees to insert the substance of this clause including this paragraph (b) in all sub-
contracts hereunder in excess of $100,000 unless the price is based on adequate price competition, established
catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set
by law or regulation.
(3) The Contractor shall insert the substance of the following clause in each firm fixed-price subcontract
hereunder in excess of $100,000 where the price is based on adequate price competition, established catalog or
market prices of commercial items sold in substantial quantities to the general public, or prices set by law or
regulation.
(a) This clause shall become operative only with respect to any change or other modification made pur-
suant to one or more provisions of this contract which involves a price adjustment in excess of $100,000
unless the price adjustment is based on adequate price competition, established catalog or market prices of
commercial items sold in substantial quantities to the general public, or prices set by law or regulation and
further provided that such change or other modification to this contract must result from a change or other
modification to the Government prime contract.
(b) For purposes of verifying that any cost or pricing data submitted in conjunction with a contract
change or other modification involving an amount in excess of $100,000 are accurate, complete, and current,
the Contracting Officer, or his authorized representatives, shall-until the expiration of three years from the
date of final payment under this contract-have the right to examine those books, records, documents and
other supporting data which will permit adequate evaluation of the cost or pricing data submitted, along with
the computations and projections used therein, which were available to the Contractor as of the date of execu-
tion of the Contractor's Certificate of Current Cost or Pricing Data.
(c) The Contractor agrees to insert the substance of this clause including this paragraph (c) in all sub-
contracts hereunder in excess of $100,000, so as to apply until three years after final payment of the subcontract.
17. EXAMINATION OF RECORDS. (Nov. 1962)
(a) (1) The Contractor agrees to maintain books, records, documents, and other evidence pertaining to the
costs and expenses of this contract (hereinafter collectively called the "records") to the extent and in such detail as
will properly reflect all net costs, direct and indirect, of labor, materials, equipment, supplies and services, and other
costs and expenses of whatever nature for which reimbursement is claimed under the provisions of this contract.
(2) The Contractor agrees to make available at the office of the Contractor at all reasonable times during
the period set forth in subparagraph (4) below any of the records for inspection, audit or reproduction by any
authorized representative of the Comptroller General.
(3) In the event the Comptroller General or any of his duly authorized representatives determines that his
audit of the amounts reimbursed under this contract as transportation charges will be made at a place other than
the office of the Contractor, the Contractor agrees to deliver, with the reimbursement voucher covering such charges
or as may be otherwise specified within two years after reimbursement of charges covered by any such voucher, to
such representative as may be designated for that purpose through the Contracting Officer, such documentary
evidence in support of transportation costs as may be required by the Comptroller General or any of his duly
authorized representatives.
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 (4) Excep .6l9~ iP?;#i'rRC"dMe2GO~i8d28:t]fiel LFPr7 a Qo1? pVPR17
the Contractor s a preserve and make available his records (i) for a raph (3j above,
p
of of
eriod payment under this contract, and (ii) for such longer period, if any, as is a three years from the doe, y
y, as is required by applicable statute, by
any other clause of this contract, or by (A) or (B) below.
(A) If this contract is completely or partially terminated, the records relating to the work terminated
shall be preserved and made available for a period of three years from the date of any resulting final settlement.
(B) Records which relate to (i) appeals under the Disputes clause of this contract, (ii) litigation or the
settlement of claims arising out of the performance of this contract, or (iii) cost and expenses of this contract as
to which exception has been taken by the Comptroller General or any of his duly authorized representatives, shall
be retained by the Contractor until such appeals, litigation, claims, or exceptions have been disposed of.
(5) Except for documentary evidence delivered pursuant to subparagraph (3) above, and the records de-
scribed in subparagraph (4) (B) above, the Contractor may in fulfillment of his obligation to retain his records as
required by this clause substitute photographs, microphotographs, or other authentic reproductions of such records,
after the expiration of two years following the last day of the month of reimbursement to the Contractor of the
invoice or voucher to which such records relate, unless a shorter period is authorized by the Contracting Officer
with the concurrence of the Comptroller General or his duly authorized representative.
(6) The provisions of this paragraph (a), including this subparagraph (6), shall be applicable to and in-
cluded in each subcontract hereunder which is on a cost, cost-plus-a-fixed-fee, time-and-material or labor-hour basis.
(b) The Contractor further agrees to include in each of his subcontracts hereunder, other than those set forth
in subparagraph (a) (6) above, a provision to the effect that the subcontractor agrees that the Comptroller General
or any of his duly authorized representatives, shall, until the expiration of three years after final payment under
the subcontract, have access to and the right to examine any directly pertinent books, documents, papers, and
records of such subcontractor, involving transactions related to the subcontract. The term "subcontract," as used
in this paragraph (b) only, excludes (i) purchase orders not exceeding $2,500 and (ii) subcontracts or purchase
orders for public utility services at rates established for uniform applicability to the general public.
18. GRATUITIES. (Mar. 1952)-(a) The Government may, by written notice to the Contractor, terminate the
right of the Contractor to proceed under this contract if it is found, after notice and hearing, by the Secretary or
his duly 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
amending, making existence of the facts uon of any determinations which the Secretary or with hirespect to the s duly authorized f representative makes contract;
the shall
be in issue and may be reviewed in any competent court.
such findings
(b) 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 penalty in addition to any other damages to which it may be entitled
by law, to exemplary damages in an amount (as determined by the Secretary or his duly authorized representative)
which shall be not less than three nor more than ten time. the costs incurred by the Contractor in providing any
such gratuities to any such officer or employee.
(c) The rights and remedies of the Government provided in this clause shall not be exclusive and are in addi-
tion to any other rights and remedies provided by law or under this contract.
* 19. NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT INFRINGEMENT. (Jan. 1965)_
The provisions of this clause shall be applicable only if the amount of this contract exceeds $10,000.
(a) The Contractor shall report to the Contracting Officer, promptly and in reasonable written detail, each
notice or claim of patent or copyright infringement based on the performance of this contract of which the Con-
tractor has knowledge.
(b) In the event of any claim or suit against the Government on account of any alleged patent or copyright
infringement arising out of the performance of this contract or out of the use of any supplies furnished or work
or services performed hereunder, the Contractor shall furnish to the Government, when requested by the Contract-
ing Officer, all evidence and information in possession of the Contractor pertaining to such suit or claim. Such
evidence and information shall be furnished at the expense of the Government except where the Contractor has
agreed to indemnify the Government.
(c) This clause shall be included in all subcontracts.
20. AUTHORIZATION AND CONSENT. (Mar. 1964)-.The Government hereby sent (without prejudice to any rights of indemnification) for all use and manufacture, vin lthe performance and this f contract or any part hereof or any amendment hereto or any subcontract hereunder (including anyloweretier sub-
contract), of any invention described in and covered by a patent of the United States (i) embodied in the structure
or composition of any article the delivery of which is accepted by the Government under this contract, or (ii)
utilized in the machinery, tools, or methods the use of which necessarily results from compliance by the Contractor
or the using subcontractor with (a) specifications or written provisions now or hereafter forming a part of this
contract, or (b) specific written instructions given by the Contracting Officer directing the manner of performance.
The entire liability to the Government for infringement of a
by the provisions of the indemnity clauses, if any, included int h this contract or any subcont act hereunder (including
any lower-tier subcontract), and the Government assumes liability for all other infringement to the extent of the
authorization and consent hereinabove granted.
21. INSPECTION AND CORRECTION OF DEFECTS. (Mar. 1964)-(a) All materials furnished and services
performed by the Contractor under this contract shall be subject to inspection and test by the Government to the
extent practicable at all tunes (including the period of performance) and places, and in any event prior to accept-
ance. The Government, through any authorized representative, may inspect the plant or plants of the Contractor
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Y g g performance of this contract. If any inspection or test is made by
the Government on the premises of the Contractor or a subcontractor, the Contractor shall provide and shall re-
quire subcontractors to provide all reasonable facilities and assistance for the safety and convenience of the Gov-
ernment inspectors in the performance of their duties. All inspections and tests by the Government shall be performed
in such a manner as will not unduly delay the work. Except as otherwise provided in this contract, acceptance of
services performed and materials furnished under this contract shall be made at the place of delivery as promptly
as practicable after delivery and shall be deemed to have been made no later than sixty (60) days after the date
of such delivery, if acceptance has not been made earlier within such period.
(b) At any time during performance of this contract, but not later than six (6) months (or such other period
as may be provided in the schedule) after acceptance of the services or materials last delivered in accordance with
the requirements of this contract, the Government may require the Contractor to remedy by correction or replace-
ment, as directed by the Contracting Officer, any services or materials which at the time of delivery thereof failed
to comply with the requirements of this contract. Except as otherwise provided in paragraph (c) hereof, below, the
allowability of the cost of any such replacement or correction shall be determined as provided in the "Payments"
clause of this contract, but the "hourly rate" for labor hours incurred in such replacement or correction shall be
reduced so as to exclude the portion of such rate attributable to profit. Corrected or replacement materials and
services shall not be tendered again for acceptance unless the former tender and the requirement of correction or
replacement is disclosed. If the Contractor fails to proceed with reasonable promptness to perform such replacement
or correction, and if such replacement or correction may be performed within the ceiling price, or the ceiling price
as increased by the Government, the Government (i) may by contract or otherwise perform such replacement or
correction and charge to the Contractor any increased cost occasioned the Government thereby, and may deduct such
increased cost from any amounts due the Contractor under this contract (or require repayment of any payments
theretofore made), or (ii) may terminate this contract for default as provided in the "Termination" clause of this
contract. Failure to agree to the amount of any such increased cost to be charged to the Contractor, or to such re-
duction in, or repayment of, any amount due under this contract, shall be a dispute concerning a question of fact
within the meaning of the "Disputes" clause of this contract.
(c) Notwithstanding the provisions of paragraph (b) above, the Government may at any time require the
Contractor to remedy by correction or replacement, without cost to the Government, any failure by the Contractor
to comply with the requirements of this contract, if such failure is due to fraud, lack of good faith or willful mis-
conduct on the part of any of the Contractor's directors or officers, or on the part of any of his managers, super-
intendents, or other equivalent representatives, who has supervision or direction of (i) all or substantially all of the
Contractor's business; (ii) all or substantially all of the Contractor's operations at any one plant or separate location
in which this contract is being performed; (iii) a separate and complete major industrial operation in connection with
the performance of this contract; or (iv) all or substantially all of the Contractor's operations under this contract.
The Government may at any time also require the Contractor to remedy by correction or replacement, without cost
to the Government, any such failure caused by one or more individual employees selected or retained by the Con-
tractor after any such supervisory person has reasonable grounds to believe that any such employee is habitually
careless or otherwise unqualified.
(d) The provisions of this clause shall apply to any corrected or replacement services or materials.
(e) The Contractor shall provide and maintain an inspection system acceptable to the Government covering the
material, fabricating methods, and the work and services hereunder. Records of all inspection work by the Contractor
shall be complete and available to the Government at all reasonable times during performance of this contract and
for such longer period as may be specified in this contract.
(f) 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 materials furnished and services performed under this contract which at
the time of delivery are defective in material or workmanship or otherwise not in conformity with the requirements
of this contract.
(g) Except as otherwise provided in the Schedule, the Contractor's obligation to correct or replace Government-
furnished property (which is property in the possession of or acquired directly by the Govenment and delivered or
otherwise made available to the Contractor) shall be governed by the provisions of the "Government Property" clause
of this contract.
(h) If this contract calls for inspection and acceptance at the Contractor's plant the last sentence of paragraph
(a) shall be deemed deleted and the following substituted in lieu thereof:
Acceptance by the Government of all the items (other than aircraft to be flown away, if any) to be furnished under
this contract shall be at the plant or plants of the Contractor specified in the Schedule, or any other plant or
plants approved for such purpose in writing by the Contracting Officer. The Contractor shall inform the inspector or
Contracting Officer when the work is ready for inspection. The Government reserves the right to charge to the Con-
tractor any additional cost of Government inspection and test when items are not ready at the time such inspection
and test are requested by the Contractor.
22. NEW MATERIAL. (Jan. 1965)-Except as to any supplies and components which the Specification or Schedule
specifically provides need not be new, the Contractor represents that the supplies and components including any
former Government property identified pursuant to the "Government Surplus" clause of this contract to be provided
under this contract are new (not used or reconditioned, and not of such age or so deteriorated as to impair their
usefulness or safety). If at any time during the performance of this contract, the Contractor believes that the
furnishing of supplies or components which are not new is necessary or desirable, he shall notify the Contracting
Officer immediately, in writing, including the reasons therefor and proposing any consideration which will flow to
the Government if authorization to use such supplies is granted.
23. GOVERNMENT SURPLUS. (Jan. 1965)-(a) In the event the proposal is based on furnishing items or com-
ponents which are former Government surplus property or residual inventory resulting from terminated Government
contracts, a complete description of the items or components, quantity to be used, name of Government agency
from which acquired, and date of acquisition shall be set forth on a separate sheet to be attached to proposal.
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 NotwithstanA4pprdkye"i9 a ik&QCg/QPI?1xngl,A,1RDpb7s11300.69nR,Ot0~180011100d1 -0 the Contractor
must comply in all respects with the specifications contained herein.
(b) Except as disclosed by the Contractor in (a) above, no property of the type described herein shall be
furnished under this contract unless approved in writing by the Contracting Officer.
24. RENEGOTIATION. (Oct. 1959)-(a) To the extent required by law, this contract is subject to the Rene-
gotiation Act of 1951 (50 U.S.C. App. 1211, et seq.), as amended, and to any subsequent act of Congress providing
for the renegotiation of contracts. Nothing contained in this clause shall impose any renegotiation obligation with
respect to this contract or any subcontract hereunder which is not imposed by an act of Congress heretofore or here-
after enacted. Subject to the foregoing this contract shall be deemed to contain all the provisions required by Sec-
tion 104 of the Renegotiation Act of 1951, and by any such other act, without subsequent contract amendment
specifically incorporating such provisions.
contracts, ase thatContractor agrees
section the 103g Drovisions
defined oininsert
the of
Renegotiation Act including 1951, as amended. (b), in all sub-
25. UTILIZATION OF SMALL BUSINESS CONCERNS. (Jan. 1958)-(a) It is the policy of the Government
as declared by the Congress that a fair proportion of the purchases and contracts for supplies and services for the
Government be placed with small business concerns.
(b) The Contractor agrees to accomplish the maximum amount of subcontracting to small business concerns
that the Contractor finds to be consistent with the efficient performance of this contract.
26. UTILIZATION OF CONCERNS IN LABOR SURPLUS AREAS. (Feb. 1962) (The provisions of this clause
shall be applicable if this contract is in excess of $5,000.00). It is the policy of the Government to place contracts
with concerns which will perform such contracts subtantially in areas of persistent or substantial labor surplus
where this can be done, consistent with the efficient performance of the contract, at prices no higher than are
obtainable elsewhere. The Contractor agrees to use his 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 entitled "Utili-
zation 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 surplus area concerns; (ii) substantial labor surplus area concerns which are also small business concerns;
(iv) other substantial labor surplus area concerns; and (v) small business concerns which are not labor surplus
area concerns.
27. MILITARY SECURITY REQUIREMENTS. (Jun. 1958) (a) The provisions of this clause shall apply to
the extent that this contract involves access to information classified "Confidential" including "Confidential-Modi-
fied Handling Authorized" or higher.
(b) The Government shall notify the Contractor of the security classifications of this contract and the elements
thereof, and of any subsequent revisions in such security classification, by the use of a Security Requirements Check
List (DD Form 254), or other written notification.
(c) To the extent the Government has indicated as of the date of this contract or thereafter indicates security
classification under this contract as provided in paragraph (b) above, the Contractor shall safeguard all classified
elements of this contract and shall provide and maintain a system of security controls within his own organization
in accordance with the requirements of-
(i) the Security Agreement (DD Form 441), including the Department of Defense Industrial Security
Manual for Safeguarding Classified Information as in effect on the date of this contract, and any modi-
fication to the Security Agreement for the purpose of adapting the Manual to the Contractor's business;
and
(ii) any amendments to said Manual made after the date of this contract, notice of which has been furnished
to the Contractor by the Security Office of the Military Department having security cognizance over the
facility.
(d) Representatives of the Military Department having security cognizance over the facility and representa-
tives of the contracting Military Department shall have the right to inspect at reasonable intervals the procedures,
methods, and facilities utilized by the Contractor in complying with the security requirements under this contract.
Should the Government, through these representatives, determine that the Contractor is not complying with the
security requirements of this contract the Contractor shall be informed in writing by the Security Office of the
cognizant Military Department of the proper action to be taken in order to effect compliance with such requirements.
(e) If, subsequent to the date of this contract, the security classifications or security requirements under this
contract are changed by the Government as provided in this clause and the security costs under this contract are
thereby increased or decreased, the contract price shall be subject to an equitable adjustment by reason of such
increased or decreased costs. Any equitable adjustment shall be accomplished in the same manner as if such changes
were directed under the "Changes" clause in this contract.
(f) The Contractor agrees to insert, in all subcontracts hereunder which involve access to classified informa-
tion, provisions which shall conform substantially to the language of this clause, including this paragraph (f) but
excluding the last sentence of paragraph (e) of this clause.
(g) The Contractor also agrees that he shall detea-mine that any subcontractor proposed by him for the furnish-
ing of supplies and services which will involve access to classified information in the Contractor's custody has been
granted an appropriate facility security clearance, which is still in effect, prior to being accorded access to such
classified information.
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 28: ?PRI~ 1'"I~ ~LL~CA'I"1~1VS, 2002/08/29: CIA-RDP71 B00697R 800110017-0
AL OTENTS. Jan. )-The shall follow e rvi-
sions of DMS Regulation 1 and all other a pliic ble egu ations and orders of theContractor
Business and De ense Servi es
Administration in obtaining controlled materials and other products and materials needed to fill this order.
29. BUY AMERICAN ACT. (May 1964)-(a) In acquiring end products, the Buy American Act (41 U.S.C. 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" means those articles, materials, and supplies, which are to be acquired under this con-
tract for public use; and
(iii) a "domestic source end product" means (A) an unmanufactured 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 are mined, produced, or manufactured in the United States or Canada
exceeds 50 percent of the cost of all its components. For the purposes of this (a
of foreign origin of the same type or kind as the products referred to in (b) ) (ri( (B), components
of this clause
shall be treated as components mined, produced, or manufactured in the United States.
(b) The Contractor agrees that there will be 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 quantities and of a satisfactory quality;
(iii) as to which the Secretary determines the domestic preference to be inconsistent with the public interest;
or
(iv) as to which the Secretary determines the cost to the Government to be unreasonable.
(The foregoing requirements are administered in accordance with Executive Order No. 10582, dated December 17,
1954. So as to alleviate the impact of Department of Defense expenditures on the United States balance of inter-
national payments, bids offering domestic source end products normally will be evaluated against bids offering other
end products by adding a factor of fifty percent (50%) to the latter, exclusive of import duties. Details of the eval-
uation procedure are set forth in Section VI of the Armed Services Procurement Regulation.)
30. NOTICE TO THE GOVERNMENT OF LABOR DISPUTES. (Sep. 1958)-(a) Whenever the Contractor
has knowledge that any actual or potential labor dispute is delaying or threatens to delay the timely performance
of this contract, the Contractor shall immediately give notice thereof, including all relevant information with respect
thereto, to the Contracting Officer.
(b) The Contractor agrees to insert the substance of this clause, including this paragraph (b), in any subcon-
tract hereunder as to which a labor dispute may delay the timely performance of this contract; except that each
such subcontract shall provide that in the event its timely performance is delayed or threatened by delay by any
actual or potential labor dispute, the subcontractor shall immediately notify his next higher tier subcontractor, or
the prime contractor, as the case may be, of all relevant information with respect to such dispute.
31. LIMITATION ON WITHHOLDING OF PAYMENTS. (Sep. 1958)-If more than one clause or Schedule pro-
vision of this contract authorizes the temporary withholding of amounts otherwise payable to the Contractor for
supplies delivered or services performed, the total of the amounts so withheld at any one time shall not exceed the
greatest amount which may be withheld under any one such clause or Schedule provision at that time; provided,
that this limitation shall not apply to-
(i) withholdings pursuant to any clause relating to wages or hours of employees;
(ii) withholdings not specifically provided for by this contract; and
(iii) the recovery of overpayments.
32. INTEREST. (May 1963)-Notwithstanding any other provision of this contract, unless paid within 30 days
all amounts that become payable by the Contractor to the Government under this contract (net of any applicable
tax credit under the Internal Revenue Code) shall bear interest at the rate of six percent per annum from the date
due until paid and shall be subject to adjustments as
provided
curement Regulation, as in effect on the date of this contract. Amounts s allbeddue upon the earliest oneeo f (i)
the date fixed pursuant to this contract, (ii) the date of the first written demand for payment, consistent with
this contract, (iii) the date of transmittal by the Government to the Contractor of a proposed supplemental agree-
ment to confirm completed negotiations fixing the amount, or (iv) if this contract provides for revision of prices,
the date of written notice to the Contractor stating the amount of refund payable in connection with a pricing
proposal or in connection with a negotiated pricing agreement not confirmed by contract supplement.
* 33. PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA. (Sep. 1964)
(a) If the Contracting Officer determines that any price, including rofit or fee, neotiated in connection with
this contract was increased by any significant sums because the Contrctor, or any subcontr ctor in connection with
a subcontract covered by (c) below, furnished incomplete or inaccurate cost or pricing data or data not current as
certified in the Contractor's Certificate of Current Cost or Pricing Data, then such price shall be reduced accordingly
and the contract shall be modified in writing to reflect such adjustment.
(b) Failure to agree on a reduction shall be a dispute concerning a question of fact within the meaning of
the "Disputes" clause of this contract.
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(c) The Contractor agrees to insert the substance of paragraphs (a) and (c) of this clause in each of his
cost-reimbursement type, price redeterminable, or incentive subcontracts hereunder, and in any other subcontract
hereunder in excess of $100,000 unless the price is based on adequate price competition, established catalog or market
prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation.
In each such excepted subcontract hereunder which exceeds $100,000, the Contractor shall insert the substance of
the following clause.
PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA-PRICE ADJUSTMENTS
(a) This clause shall become operative only with respect to any change or other modification made pursuant
to one or more provisions of this contract which involves a price adjustment in excess of $100,000, except where
the price is based on adequate price competition, established catalog or market prices of commercial items sold in
substantial quantities to the general public, or prices set by law or regulation. The right to price reduction under
this clause shall be limited to such price adjustments.
(b) If the Contractor determines that any price, including profit or fee, negotiated in. connection with any
price adjustment within the purview of paragraph (a) above was increased by any significant sum because the sub-
contractor or any of his subcontractors in connection with a subcontract covered by paragraph (c) below, furnished
incomplete or inaccurate cost or pricing data, or data not current as of the date of execution of the subcontractor's
certificate of current cost or pricing data, then such price shall be reduced accordingly and the subcontract shall
be modified in writing to reflect such adjustment.
(c) The subcontractor agrees to insert the substance of this clause in each subcontract hereunder which ex-
ceeds $100,000.
* 34. SUBCONTRACTOR COST AND PRICING DATA (Sep. 1964)
(a) 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 redeterminable subcontract;
(ii) prior to the award of any subcontract the price of which is expected to exceed $100,000; (iii) prior to the pricing
of any subcontract change or other modification for which the price adjustment is expected to exceed $100,000;
except in the case of (ii) or (iii) where the price is based on adequate price competition, established catalog or market
prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation.
(b) The Contractor shall require subcontractors to certify, in substantially the same form as that used in the
certificate by the Prime Contractor to the Government, that to the best of their knowledge and belief, the cost and
pricing data submitted under (a) above is accurate, complete, and current as of the date of execution, which date
shall be as close as possible to the date of agreement on the negotiated price of the subcontract.
(c) The Contractor shall insert the substance of this clause including this paragraph (c) in each of his cost-
reimbursement type, pride redeterminable, or incentive subcontracts hereunder, and in any other subcontract here-
under which exceeds $100,000 except where the price thereof is based on adequate price competition, established
catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by
law or regulation. In each such excepted subcontract hereunder 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. The requirements of this clause shall be limited to such price adjustments.
(b) The Contractor shall require subcontractors hereunder to submit cost or pricing data under the following
circumstances: (i) prior to award of any cost-reimbursement type, incentive or price redeterminable subcontract;
(ii) prior to award of any subcontract, the price of which is expected to exceed $100,000; (iii) prior to the pricing
of any subcontract change or other modification for which the price adjustment is expected to exceed $100,000; ex-
cept, in the case of (ii) or (iii), where the price is based on adequate price competition, established catalog or market
prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation.
(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 knowledge and belief the cost and
pricing data submitted under (b) above is accurate, complete, and current as of the date of execution, which date
shall be as close as possible to the date of agreement on the negotiated price of the contract modification.
(d) The Contractor shall insert the substance of this clause including this paragraph (d) in each subcontract
hereunder which exceed $100,000.
35. SHIPMENTS.-(Oct. 1957)-(a) Unless otherwise provided in this contract or unless the Contracting Officer
acting under the "Changes" clause hereof directs in writing otherwise, all supplies to be furnished under this con-
tract shall be delivered f.o.b. carrier's equipment at the plant or plants at which such supplies are to be finally
inspected and accepted, or if the facilities for shipment by carrier's equipment are not available at the Contractor's
plant, f.o.b. the point or points nearest thereto that carrier service is available. When the carrier's equipment is
rail, any shipment- occupying sufficient space in a railroad car to constitute a carload shipment subject to carload
freight rates shall be properly and adequately loaded in freight cars by the Contractor, and any shipment subject
to less-than-carload freight rates shall be delivered by the Contractor into the carrier's possession at the Contractor's
plant, or at the point or points nearest thereto at which delivery can be effected.
(b) . Whenever it is provided in this contract that supplies shall be delivered f.o.b. specified destinations, such
supplies shall be shipped direct by the Contractor to the specified destinations on commercial bills of lading, at the
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exlsenae of the Co &fi% dvlifea, ft ~eer,-thai?nofl'iIng contained herein sha 1 preclude reimbursement of the
Contractor by the Government of any such transportation expenses if this is a cost-reimbursement type contract.
(c) Notwithstanding other provisions of this contract, shipments made under cost reimbursement contracts
which do not exceed (i) 1000 pounds if shipped by rail, truck, or freight forwarder, or (ii) 100 pounds if shipped
by railway express, or (iii) 50 pounds if shipped by commercial air, shall be made by commercial bills of lading,
charges to destination(s) paid by the Contractor.
(d) If the Contracting Officer directs in writing that any of the supplies to be furnished hereunder be
delivered to a carrier for shipment from a point other than. specified in this contract, equitable adjustment shall be
made in the contract price in the manner provided in the general provisions of this contract entitled "Changes."
(e) Shipping Instructions. If not otherwise provided herein, names of consignees of all supplies to be delivered
by the Contractor hereunder will be furnished in writing by the Contracting Officer at a later date. Request therefor
shall be made to such address as the Contracting Officer may direct, not later than thirty (30) days prior to the date
on which any of the articles are ready for shipment.
(f) Routing Instructions. If not otherwise provided herein and deliveries are other than f.o.b. specified destina-
tions, Government routing instructions will be furnished to the Contractor in writing by the Contracting Officer at a
later date. If the Government routing instructions have not been received by the Contractor thirty (30) days prior
to date on which any of the articles are anticipated to be ready for shipment, request therefor shall immediately
be made to the cognizant transportation activity specified herein.
(g) Notice of Shipments. (Jul. 1949) At the time of delivery of any shipment of supplies to a carrier for
transportation, the Contractor shall give prepaid notice of shipment to the consignee establishment, and to such
other persons or installations designated by the Contracting Officer, in accordance with instructions of the Contract-
ing Officer. If such instructions have not been received by the Contractor at least 24-hotzrs prior to such delivery
to a carrier, the Contractor shall request instructions from the Contracting Officer concerning the notice of shipment
to be given.
(h) Computation of Delivery Time. For the purpose of determining the fulfillment of this contract so far as
delivery dates are concerned, in the event the delivery point or points are not the same as the point or points of
destination, the time of delivery of the supplies shall be the date of delivery to the carrier ready for shipment to
destination.
(i) Shipments by the Government. Unless this is a cost-reimbursement type contract, any articles, supplies
or other items to be delivered by the Government to the Contractor shall, unless otherwise provided herein, be
delivered to the Contractor f.o.b. carrier's equipment at the plant or plants of the Contractor designated, or if
facilities for shipment by carrier's equipment are not available at the Contractor's plant or plants, f.o.b. the point
or points nearest thereto that carrier's equipment is available.
(j) Where the contract provides that inspection and acceptance shall be accomplished at a subcontractor's plant
(whether in whole or in part) the foregoing provisions, except paragraphs (e) and (f), shall be equally applicable to
such subcontractors as provided in said subcontract. Subcontractors' shipping instructions and routing instructions,
if not previously furnished, shall be requested from the Prime Contractor.
36. SUPERSEDING SPECIFICATIONS. (Jul. 1948)-All references in any Government specification incorpo-
rated herein to other Government specifications shall be deemed to include all specifications supplementary to or
superseding the specifications so referred to, to the extent that such supplementary or superseding specifications
are in effect at the date of Contractor's latest quotation, if the Contractor was furnished or otherwise notified
of the existence of such supplementary or superseding specifications at the time of said quotation.
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 (a) Y)efnitlonc Uecd in Thlo Clauso.
(1) SubJect Invention moans any Invention or dincovorv whether or not'imtentnble, conceived or brat actually
reduced to practice in the course of or under this contract, fie term 'Subject Invontion'?Includen, but is not limited
to, any art, machine, manufacturo, dcnl,-n or composition of matter, or any now and useful Improvement thereof, or
Any variety of plant, which Is or may be patontablo under the patent lawn of the United Staten of America or any
faro)?n country.
(2) Governmental purpose mcnna the right of the Government of the United States (Including Any Agency
thereof, state or domentic municipal government) to practice And have practiced (make or have made, use or have
tined, sell or have sold) any Subject Invention throughout the world by or on behalf of the Government of the United
States. -
(3) Contract means Any contract, A grant, or other arrangement, or subcontract entered Into with
or for the benefit of the Government whore a purpose of the contract Is the conduct of experimental, developmental,
or research work,
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37 PATENT RIGHTS (LICENSE) (May 1Dx4)
:(G). To bring to the point of practical appllcntlon monnn to manufaeturo In the cane of n composition or
product, to practice in the cane of a procens, or to operate in the cane of it machine or system and, in each cane,
under such conditions as to establish that the Invention is being worked and that its benefits are reasonably accessible
to the public.
aubeontraot or subcontractor under thin contract,
(4) Subcontract And subcontractor mean any subcontract or subcontractor of the Contractor, any lower-tier
(S) Rights Granted to the Government.
(1) The Contractor Agrees to and does hereby grant to the Government nn irrevocable
nonexclusive
a
d
,
,
n
royalty-free license to practice And have practiced each Subject Invention (mmnde by the Contractor) throughout the
world for Governmental purposes. In Addition the C:overnmont shall have the right to grant licensee to Any foreign
government or international organization npecilicnily for use in programs established by International Agreements
for research, development, or production of weapons or equipment for mutual defense And shall Include the practice
of such Subject Invention in the manufacture, use, And disposition of any Article or material, In the use of any
method, or In the performance of any service Acquired by or for the Government or with: funds derived through
the Military Assistance Program of the Government or otherwise through the Government.
(b) Rights Granted to the Government.
'(1) (Thin paragraph applies It this contract line nn one of Its purposes the performance of research and
development work under it apace program, project or tank And paragraph (b)(1) above In made Inapplicable.) The
Contractor agrees to and does hereby grant to the Government an irrevocable, nonexclusive and royalty-free license
to practice And have 'practiced each Subject Invention (made by the Contractor) throughout the world for. Govern-
mental purposes, In Addition, the Government shall have (n) the right to grant licennes to Any foreign government
or international organization specifically for uno in programs established by international Agreements for research,
development or production of weapons or equipment for mutual defense and (U) the right to grant licenncn to others,
under such terms and conditions as may be preacrlbcd, for the practice of such Subject Invention throughout the
world In the design, development, manufacture, operation, maintennnco and tenting of communications satellite
syntems, and of equipment, components, and ground tracking, transmitting And receiving facilities therefor, And shall
include tho practice of such Subject Invention in the manufacture, use, and disposition of Any article or material, In
.the use of any method or In the rerformnnco of any service acquired by or for tho Government or with funds
derived through the Military Assistance Program of the Government or otherwise through the Government.
(2) The Contractor further agrees to grant, upon the request of the Government, Alicante under any Subject
Invention (made by the Contractor) to:
(1) Any applicant on a nonexclunivo, royalty-free basis, unless the Contractor, his licensee, or his assignee
demonstrates to the Government, at its request, that effective stops have been taken within three years after it
bpa
cen made tent insuca on such Invention to bring the Invention to the point of practical application or that the Invention has
_..:
cause why the nrlnlcinal orcensinalvoyalty free or ton terms that are enuonnble in the circumstance,, or can show
Nothing contained in this Patent Rights clause shall-ho doomed-to grant any rights with respect to any Invention
other than a Subject Invention,
., v~u111111ILL14{ Lvgu+nuono or as may oo necessary to fulfill health Hood
. or for other pubile purposes stipulated in to Schedule of this contract, s,
than three (3) months prior to the date of the report and not
-.nco v or ti Actual listed onda priortinterimyreporeduced r certifying that
there are no such unreported Inventions;
(ill) prior to final settlement of this contract, a Anal report listing all such Inventions Including all thoa?
previously l ated in Interim reports, or certifying that there are no such unreported Inventions; and
,
c
t
n
statement making an election an to whether a United States patent tapplication claimingnthee Inventioncwill be iflled
by or on behalf of the Contractor; .
'(ii) Interim reports at leant ovary twelve (12) months, the' initial period of which shall commence with
the data of thin contract, each report listing' All atfch Invent) I
(e) Invention Disclosures and Reports. With respect to Subject Invention, (made by the Contractor), the
Contractor shall furnish to tho Contracting OAlcer:
(1) A written disclosure of each such Invention within four (4) months After conception or first actual
reduction to practice, whichever occurs first under this contract, aufclently complete as to technical detail to convey
to one skilled in the Art to which the Invention pertains a clear understanding of the nature, purpose, operation
And, as the case may be, physical
chemical or electrical
h
I
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(Iv) written reports at reasonable Intervals, prior to and after Anal settlement, when" requested by the
Government, as tot
(A) the commercial use that is being made or Is Intended to be made of Such Invention;
(D) the stops taken by the Contractor to bring the Invention to the point of practical application.
or to make the Invention avaitalile far llsnn.lnn
(d) Domestic Filing. In connection with each Subject Invention'roforrod to In (c)(I)
b
a
ovot
Contractor) shall, wi hintsixt(6) montehs4Afterfithe election, A14tor cause to bra 111odisuolchnltf tl C
o aontrnc-
yeontracting Officer not lens than sixt
the renponno period And, upon written request, deliver to the Contracting Officer such duiy I in
ion of.
ppared by the Government) AS tir
t
d
s
o
rumente
eemed necessary tt Iher
o vesn te Government the entire right, title, and Intest
in ouch Invention and the application, subject to the reservation as Specified In paragraph (d)(11)(111) of this clause;
and
a6.ver to too contracting Omcer duly executed instruments fully confirmatory of
all rights heroin agreed to be granted or reserved to the Government, other
overnm Shall( a6) 'Forei between theFilpaing.
the exclusive rigtha ht naubject to t ee rightslvof thegGovernmento ndorm Acto ra:
graph (b) of this clause, to file applications on Subject Inventions (made by the Contractor) In each foreign country
within:
(I) nine (0) monh
f
h
s
rom t
e onto cdi
aorresponng United States application Is filed,-or nine (0) months
from the rintn the Contractor discloses a Subject Invention under paragraph (c) (1) above with an election not to Ale
a United States application;
(11) six (0) months from the data permission Is granted to il.o foreign Applications where such filing had
been prohibited for security reasons; or
(lit) such longer period as may be Approved by the Contracting officer.
The Contractor Shall notify the Contracting Officer of each foreign npppicntlon filed And, upon written request of
the Contracting Officer, convey to the Government the entire right, title, and Interest in each such Subject Invention
In each foreign country in which an application has not been filed within the time abovo specified, subject to the
reservation as specified in paragraph (d)(0)(13) of this clause.
'(f) Withholding of Payment. It the Contractor fails to deliver to the Co
required by (c)fill above
t
f
il
or
n
n
racting offi th ii
n to furih thi
cerenterm reports
,nse wrtten disclosures for all Subject Inventions required by (c)(4
above shown to be due In accordance with Any interim report delivered inter (c) (il) or otherwise known to the Cov~ ?
ernnont to be, unreported, there shall he withheld from payment, until the Contractor Shell have corrected such
failures, either don percent (10') of the amount of thin contract, as from time to time amended, or ton thounnnd
dollnra ($10,000), whichever is less. After payment of eighty r
time to time amended, payment shall be withheld until a resere of either ten o ef rcentm 10~i of thin contract, as from
contract, or ten thounnnd dollars ($10000
) whiche I ld of
this
,vernens, shall hnvo been sot asie, such retile serve amount
thereof to be retained until the Contractor Shall have furnished to the Contracting Officer,
or tbalatcs
(1) the Anal report required b
y (c) (iii) of thil
s cause;
(11) written dlnclonuren for All Inventions required b
y fel(l) Above which are shown to be duo {n occerJnnco
with interim reports delivered under (c)(11) abovo, or In accordance with such final reports, or are otherwise known
to the Government to be, unreported; and
'(iii) the Information as to any subcontrnctryr required by
No amount Shall ba withh
ld
e
under thi
s paragraph when the Amount specified by this paragraph Is being withheld
under other provisions of thin contract. Thq Withholding of Any Amount or subsequent payment thereof to
tractor shall not be construed nn a waiver of Any rights Accruing to the Government under this contract. This para.
the Con
corn ent provisnot be construed AS requiring the Contractor to withhoany Amounts from n nubcanlractor to enforce
t
?, tlmatod
"estipmated coat with of the this patent contract." provision of a subcontract. In coath old f contracts, "amount of this
contract" shall moan
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(g) Suhcontrnct..
(1) The Contractor nhnll, unless otherwise Authorized or directed by the Contracting Officer, Include n patent
rights clause cnnt.nining All of the provisions of thin Patent Itigltln clnune except i/rovininn U) In Any nuhcontract
hereunder where a nlrponn of Oho nuhcontract In the conduct of experimental, developmental, or revearch work. In
the event of refusal by n nubcontractor to accept thin Patent Rights clnune, or It In the opinion of the Contractor
this Patent Rlghtn clnune in inconsistent with too policy net forth in ASI'lt 0-107.2 And 0-107,3, the Contractor:
'(1) shall promptly submit a written report to the Contracting Officer netting forth .the. subcontractor's
rennon for such rcfunal or the r'onnonn the Contractor Is of the opinion that the inclunlon of thin clause would be so
inconsistent, and other pertinent Information whic:. may expedite disponition of the matter; And
(ii) shalt not proceed with the subcontract without the written Authorization of the Contracting Officer.
The Contractor shall not In Any subcontract or by using Aueh a subcontract nn consideration therefor, acquire any
rights to Subject Invantionc for his own use (ns distin
ula
d f
i
h
c
g
rom ouc
r
hghts as may bo required solely to fulfill
his contract obligations to the Government in the lerforinanco of this contract). Reports, lnntrument3, And other
information required to be furnished by n subcontractor to the Contracting Officer ;under the provisions of such a
patent rights clop-+c in r, subcontract hereunder rnny upon mutual convent of the Contractor And the subcontractor
(or by direction of the Contracting Officer) be furninilcd to the Contractor for traneminnion to the Contracting Officer,
1(2) The Contractor, At the enrlient practicable date, nhnll Also notify the Contracting Officer In writing of
nny subcontract containing a potent rights clnune, furnish him n copy of such clnune, And notify him when such
subcontract Is completed.' It is understood that the Government is it third party beneficinry of nny nuhcontract clnune'
granting rights to the Government In Subject Inventions, nud the Contractor hereby assigns to the Government
All tits rights that he would have to enforce the euboon trnctor'n obligationn for the, henetit of the Government with
respect to Subject Inventionn.--If there are no suheantracts containing patent rights clauses, n negative report Is
required, The Contractor shall not be obligated to enforce the agreements of Any subcontractor hereunder relating
to the obligations of the subcontractor to the Government In regard to Subject Iventions.
(h) Licenses Granted by Contractor to Others :;ubJect to Government's Rights. The Contractor recognizes that
the Government, or n foreign government with funds derived through the Military Assistance Program or otherwise
through the United Staten Government, may contract for property or services with respect to which the vendor
may be liable to the Contractor for roynitien for the use of n Subject Invention on account of such a contract. The
Contractor further recognizes that It Is the policy of the Government not to pay In connection with its contracts, or
or otherwise tl rough thenUnitedr Stets Gover nmentircl with funds for uue ofdpat ntgsh ll
Inwhicihltthe Government hholds a
royalty-free license. In recognition of this policy, the Contractor agrees to participate In and make appropriate
Arrangements for the exclusion of such charges front such contracts or for the refund of amounts received by the
Contractor with respect to any such charges not so uxciuded.
(I) Rights to Disclose Subject Inventions. The Government may duplicate And dincloso reports and disclosures
of Subjctt Inventions required to be furnished by the Contractor or a subcontractor pursuant to this Patent Rights
clause,
38 ICILINf: OF PATI,NT APPLICATIONS, (Jan. 1056) (n) I3eforo filing or causing to be filed A patent
application disclosing nny subject matter of this cnntrnct, which subject matter is clnsstficd "Secret" oY higher,
the Contractor shall, citing the thirty (30) day provision below, transmit the proposed Application to the Contrac?
tint; Officer for determination whether, for reason of national security, such Application should be placed under
nn order of secrecy or pealed in accordance with the nrovialon, of :i5 U.S. Code 1111-urn or the issuance of a patent
should be otherwise delayed under pertinent statut4'n or regulationn; and the Contractor shall observe any in-
structions of hho Contracting Ollicor with respect to the rnauner of delivery of the patent application to the
U.S. Patent Office for filing, but tho Contractor nh;dl not ho denied the right to file such
the Contracting Ofileer shall not have given nny such instructions within thirty (30) dnyn fpatent e datte of mail--
Ing or other transmittal of the proposed Application, tine Contractor may file the application,
(b) The Contractor shall furnish to the Contracting Officer, at the time of or prior -to the time when the
Contractor files or causes to"Confidential," be filed n patent application dincioslnK an subject. matter of thin contract, which
subject matter Is ciasnifcd a copy o:' such Application for dotormination whether
sat oval security
such it -
iicatio
for r
a
h
ld b
f
,
p
,
e
n s
spns o
ou
e, placed uddf
ner an orer o secrecy or the Issuance of a patent should
be otherwise delayed under pertinent statutoo or regulations.
(c) In filing any patent application coming within the scope of this c1AUSe, the Contractor shall obaervo all
applicable security regulations covering the tranamluaion of classified subject matter,
.39 RIGHTS IN TECHNICAi. DATA. (Feb. i0aif)
(a)' Definitions.
(1) Tcchnicnl Dnts, as used in thin clnuno, moans technical writings, Round recordings, pictorial reproductions,
drawings, or other graphic representations And worlcs of a technical nature, whether or not copyrighted, which are
specified to be delivered pursuant to this contract, Tho term does not include financial reports, cost analyses, and
other information Incidental to contract administration,
(2) Limited Rights means rights to time, duplicate, And disclose technical data in whole or in part, by or
for the Government, with the express limitation that such data may not be relenned outside the Covornmant, used,
.duplicated, or disclosed In'whole or In part, for manufacture or procurement, except for.
(1) 'emergency repair or overhaul work by or for the Government whore the itorn or process concerned is
not otherwise reasonably available to enable timely performance, of -the work; and
(ii) ralonno to a foreign government as the interests of the United States may require;
provided, in either case, that the roloaso of such data shall bo aubjoot to the limitations of this paragraph (2).
(3) Unlimited Rights moans rights to use, duplicate or disclose technical data, In whole or in part, In any
manner and for,any, purpono_whataoovor, and to have nr permit, othorr to do o
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(1) The Government shall have unlimited rif;htei in!
(I) technical data resulting directly from prrformnnco of cx),rimentat, developmental or research work
which was specified an nn element of porforrnaneo In thin or Any other Government contract or subcontract;
(il) technical data necennary to cnnblo mnirufaeturo of ond?Iteuin, cnmpanentn and modiilcationo, or to
enable the performrnnco of 111-oeesnen, when the end-items, components, modiflentiona or proccnncn have been, or are
being, developed under thin or Any other Government contract or subcontract In which ox rorimentni, developmental
or renenreh work in, or won apecifled nn an element of contract performance, except technical data pertaining to
items, components or proccnncn developed at private s:.ponno (but sae (2) (11) below);
(iii) technical dote constituting corrections or changen to Government-furnishod data; -
(Iv) technical data pertaining to end-Items campnncntn or proccnncn which wan prepared for the purpose
of Identifying aourcen, size configuration, meting aQ attachment charnctorintlcs functional charnetorlstics and ppore
fornianco require'rionte ("form, fit and function" data, e.g., specification control drawings, catalog shoots, onvelopo
drawinga, etc.);
(v) mnnu,la or instruotional materials prepared for installation, operation, maintenance or training pur
pease; _.
(vl) other technical data which lino boon, or i.. normally furnished without restriction by the Contractor or
subcontractor; And _
(vii) technical data tinted or described in nn agreement Incorporated Into the Schedule of this contract, which
the pnrtles have predetermined, on the basis of aubparagraph^ (I) thru (vi) above, and agreed will bo furnished
with unlimited rights.
(2) The Government ahsll_have limited rights in:
(1) technical data, listed or described In an agreement incorporated into the Schedule of this contract,
which the parties have agreed will be furnished with limited rights; and
(Ii) technical data ortainint; to items, components or proconncn developed at private oxponao, other
than such data no may be Included in the data referred to in (b) (1) (1), (Ili), (iv), (v), and (vi);
provided that each 'iioce of data to which limited rights are to be nnnortod purnunnt to (2) (1) and (11) Above is
marked with the fo~lowing legend In which in Innortod the number of the prime contract under which the technical
data In to be delivered And the name of the Contractor or subcontractor by whom the technical data wag gonoratedi
"hurnlnhed under United Staten Government Contract No .................? Shall not he either released etitalde
the Government, or used, duplicated, or dincloned in whole or in part for nrnnufneture or tii'oeurentent. without
the written perrninrdon of ............................. except for: (I) emergency repair Or Overhaul work by m' for the
Government., where the Item or procons concerned iq not otherwise" rennnnnlrly nvnilnhle to rnnble Rarely per.
formnnee of the work; or (il) relenno to,a foreign rovcrnment, on the Interent,a of the United Stater nUty require:
provided that in either cane the rclenne, une, dupii.'apron or dinclontn?e hereof shall lie nubiect to the foregoing
Iimitntioun. Thin legend nhnll be marked on Any reproduction hereof In whole or In pnrt,ic
No legend nhnli ho marked on, nor nhAll Any limitation on rights of u
h
d
ne
e nnserte
as to, any data which the Con.
tractor hnn previously delivered to the Government without rentrictinn, The limited riKhtn provided for by this -
paragraph (b) (2) shall 'lot impair the right of tho Government to use similar or Identical data acquired from other
sourccn,
(c) Material Covered by Copyright, ,
(1) Notwithstanding the proviniona of (b) above, the Contractor ngreen to find does hereby grant to the
Government, And to Its ofllcorn, agents, And emplnycen acting within the neope of their official duties, a roynlty?free,
nonexclunivo and irrevocable llconno throughout the wo,ld for Government purpoaen to puhuinh, translate, reproduce,
deliver, perform, diapoao of, and to authorize others no to do, all technical data now or hereafter covered by copy.
right, (2) N permission such
copyrighted -matter nhnll be include(]
owner for. the Government use technical l dntn lr
copyr copyrighted Matter eunder ivmanner the
above,
described
(3) The Contractor shall rejlort to the Government (or higher-tier Contractor) promptly And in reasonable ???
written detail each notice or claim of copyright infringement received by the Contractor with respect to any technical
data delivered hereunder, .
(d) Removal of Unauthorized Mnridngn, Notwithntnnding any provisions of this contract concerning inspection -
and acceptance, the Government may modify, remove, obliterate, or ignore Any marking not authorized by the terms_
of this contract on any technical data furnished hereunder, If-
(1) the Contrnctor'falln to respond within sixty (60) days td a written inquiry by the Government concern-
ing the propriety of the use of the marking, or
(it) the Contractor's rcnponno fads; to nubstnntinto his contention that the use of the marking Is authorized,
In which case the Government shall give written notice to the Contractor,
(a) Relation to Patents. Nothing contained In this elauna shall Imply a license to the Government under Any
patent or be construed as affecting the scope of any 1ico:iso or other right otherwise- granted to the Government
under any patent.
(f) Limitation on Ciiprges for Data. The Contractor recognizes that the Government, or n foreign government
with funds derived through the Military Assistance Program or otherwise through the United States Government,
may contract for I iroperty or services with respect to which the vendor may he liable to the Contractor for charges
for the use of technical data on Account of nuch n contract, The Contractor further recognizes that It Is the policy
of the Government not to pay in connection with its contracts, or to allow to be paid In connection with contracts
made with funds derived through the Military Annintnnco Program or otherwise through the United States Govern.
meat, charges for data which the Government h
i
h
as a r
g
t to uno and disclono to others, which In In the public domain,
or which tire Government has been given without restrictions upon its une and disclosure to others. This policy does
not Apply to reasonable reproduction, handling, mailing, and similar administrative costs Incident to the furnishing
of such data. In recognition of thin policy, the Contractor agrees to participate in And ate
meats for the exclusion of such char
app
make
ropri
a
f
ges
rranger
rom such contracts, or for the refund of amounts
received
with respect to any such chargon_ not_ so excluded.
by
e
th Contractor
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(g) Acqulnl(lon of Data from yubcontractora.
(1.) Whenever any technical dots Is to be obtained from n nubcontrnetor under thin contract, the Contrnetor
oha1l line this some clause In the nubcontrnct, without alteration, and no other clnuno nhnil be used to enlarge or
diminish the Governntnnt's or the Contractor's rights In that subcontractor data which in required for the Government.
(2) Technical data reryulred to be dolivered by n mil,rontrnetor nhnll norrttnlly he delivered to the next higher-
tier Contrnetor. However, when there In a requirement in the prime contract, or In the deferred order, for data
which may bo sup dlierl with limited rights pursuant to (h)(2) above, a subcontractor may hiltlil such requirement
by submitting such data directly to the Government rather than through the prime Contractor,
(3) The Contractor and higher?tier, nubcontractorn will not line their power to award subcontracts as economic
leverage to acquire rights in data from their aubcontractorn for themncivcn,
40 DATA---WC'I'1111OLI)Ii'( 0V PAY111;NT, (Ape, tars) if "Tcrltttieitl Hato" (as drilm?d In Iho cinusr of Lhiv
cnntrneL entitled "nights in TechnIcnt Ilnt ''), or nn' paiL thereof, is not delivered within Ilu' time spcelfred by
this ront.rart or in defielt tit a ton delivery including hawing restrtc?tivn markings not rtperitirniiy nuthnrizrd by the
contract), the Contracting OIIlcet' cony, m16 l much data in delivered nr tlolhIcnries nru corrected, wilhould Its}-meat
due the (.ontrnrt.nr on account of allowable ensla nod fixed fee, of ten lrerr(Int (101,4) of the root cart price, unless
n lesser withholding in npcrltrd In the schedule. Payments shall not be withheld nor nay other action taken pursue
not to this clause where the Contractor's failure to make timely delivery or to deliver ditto without deficiencies
arises hut of entlsea hryand the control And withhnut. thu fault or nrgligi'nca of the Contractor within the mean.
Ing of the clause hereof entitled "Lixcusnble l)cktyn," The wlLhhoiding of any amount or subsequent payment there.
of to the Contractor shall not be construed as a waiver of any rights accruing to the Government under this
contract.
41. FLIGHT RISKS (Oct. 1965)
(a) Notwithstanding any other provision of this contract,
and particularly subparagraph (g) (1) of the Government Property?
clause and paragraph (c) of the Insurance - Liability to Third
Persons clause, the Contractor shall not (i) be relieved of
liability for, damage to, or loss or destruction of, aircraft
sustained during flight, or (ii) be reimbursed for-liabilities
to third persons for loss of or damage to property, or for
death or bodily injury, which are caused,by aircraft during'
flight, unless the flight crew members have previously, been approved
in writing by the Contracting Officer.
(b) For'the purposes of this clause:
(i) Unless otherwise specifically provided -in the
Schedule, the term "aircraft" means any aircraft, whether furnished
by the Contractor under this contract (either before or after
acceptance by the Government) or furnished by the Government.to
the Contractor under this contract, including all-Government
Property placed or installed therein or attached thereto; provide
however, that such aircraft and property, are not covered by a
separate bailment agreement.
(ii) The term "flight" means any flight demonstration,
flight test, taxi test, or other flight
made in the performance
,
of this contract, or for the purpose of safeguarding the aircraft
,
or previously approved in writing by the Contracting Officer. As
to land based aircraft, "flight" shall commence with the taxi roll
from a flight line and continue until the aircraft has completed
the taxi roll to a flight line; as to sea planes, "flight" shall
commence with the launching from a,-ramp and continue until the
aircraft has completed its landingrun and is beached at a .ramp;
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as to helicopters, "flight" shall commence upon engagement of the
rotors for the purpose of take-off and continue until the air-
craft has returned to the ground and rotors are disengaged; and for
vertical take-off aircraft, 'flight'y shall commence upon disengage-
m nc from any launching platform or device and continue until the
aircraft has been re-engaged to any launching platform or device.
(iii) The term "flight crew members" 'means... the pilot,'`
the co-pilot and, unless otherwise specifically provided in the
Schedule, the flight engineer, navigator, bombardier-navigator,
and defense systems operator, when required, or assigned to their
respective crew positions,-to conduct any flight .on behalf of the
Contractor.
(c) If any aircraft is damaged, lost, or destroyed, during
flight, and if the amount of such damage, loss, or destruction
exceeds one hundred thousand dollars ($100,000) or twenty percent
(20%) of the ceiling price of this contract, whichever is less,
and if the Contractor is not liable for the damage, loss, or
destruction pursuant to the "Government Property" clause of this
contract together with paragraph (a) above, then an equitable
adjustment for any resulting repair, restoration, or replacement
that is required under this contract shall be made in the
ceiling price, hourly rate, delivery or performance date, or all
of them and the contract shall be modified in writing accordingly;
provided, in determining the amount of adjustment in the hourly .
rate that is equitable, any faults of the Contractor, his employees,
or any subcontractor which materially contributed to the damage,
loss, or destruction shall be taken into consideration. Failure--
to agree on any adjustment shall be a dispute concerning a.question
of fact within the meaning of the "Disputes" clause of this contract.
42. Alterations in Contract
The following alterations have been made in the provisions
of this contract:
particular paragraphs (c) and (d) thereunder shall be applicable
only to the extent as authorized by the Security Representatives..
h
are deleted and the following words substituted therefor:
"Appropriate Audit Representative of the Government."
(c) Clause-24 "Renegotiation" is-deleted in its entirety.
(d) Clause 27 "Military Security Requirements" and in
"Comptroller General or any of his duly authorized representative(s)"
(b) Under Clause 17 "Examination of Records" the words
(a) Paragraph (k) under Clause.5 "Government Property" i
deleted in its entirety.
t
e Contracting Officer.
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 (c )''NC'T'~i't~ e '3 S"F s'~? i s Fi i' ~~L s ~ ei t .'i 't
Shipments shall be made as provided in the Schedule of this
contract or as otherwise indicated by the Contracting Officer
or his authorized representative. ...
(f) Clause 5, "Government Property'(Cost=Reimbursement)
(June 1965)" is deleted and substituted in lieu there ap?d
incorporated herein b''y this reference is Paragraph 13-703
of ASPR,. "Government Property (Cost-Reimbursement)(Apr 1968)".
(g) Clause 16 "Audit land Records (Sep 1964)" is' deleted
and substituted in lieu thereof anti incorporated herein py
this reference is Paragraph 7-104.41(c) as revised by DPC No.
57 at Paragraph..79, 132-CCH, "Audit and Records (Nov. 1967)".
:Data (Nov 1967)".
7-104.29 of ASPR as revised by DPC No. 57 at.-'Paragraph 79,
132-CCH, "Price Reduction for Defective Cost or Pricing...
'thereof. and incorpo~ra,ted'herein by this reference is Paragraph
Pricing Data (Sep 1964).'"is -deleted and substituted .in' lieu
(i) Clause 33 "Price Reduction for-Defective Cost in
(h) Clause 26, "Utilization of Concerns in Labor Surplus
Ares, .' (Feb 1962)?" is deleted and substituted in lieu thereof
and - incorporated .here?in by this reference is Paragraph' 1-805.3
.(a) "Utilization of Concerns in Labor Surplus Areas (Nov 1967)"
(j) Clause' 37 "Patent Rights (License)'(May, 1964)" is,
by thisreference.is Paragraph 9-107.5(b) of ASPR, "Patent
deleted and substituted in lieu thereof and . incorporated` herein
.
(k) Clause 38, "Filing of Patent Applications (Jan 1955)"
Ibr Release. 20008129":. CIA-RDP71BOQ697R0018,O01!1.0017-0?;
herein by. this reference is Paragraph-9..106.of.ASPR; "Filing,
is deleted and. substituted in lieu thereof and incorporated
 25X1A
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25X1A
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SEC- CL. ORIGIN
DATE OFODOC 1 E1 T# REV D
TO
FROM onrac ?n O fe
r
sUBJ- Def Contr
DIS : Cy - 1-C /OSA
2-Contract
3-FOD/O$A
4
5
Co -
SUSPENSE DATE
COURIER NO. ANSWERED NO REPLY.
ID$A- O31 O-68
CROSS REFERENCE OR
POINT OF FILING
DATE
SENT
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_TCIVTROL NO