PRECONTRACT APPROVAL RECORD

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP72B00464R000600010001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 21
• Document Creation Date: December 19, 2016
• Document Release Date: November 13, 2006
• Sequence Number: 1
• Publication Date: January 21, 1971
• Content Type: FORM

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AFLC WPAFB-APR 66 Z5M
GENERAL PROVISIONS
FIXED PRICE RESEARCH AND DEVELOPMENT
CONTRACT
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 Con-
tracting 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.
(d) The term "contract work" means all work to, be performed under this contract including without limita-
tion any studies covering fundamental, theoretical, or experimental investigations; any extension of the investi-
gative findings and theories of a scientific or technical nature into practical application; any tangible items, herein-
after referred. to as "supplies," furnished to the Government; and any reports, data, computations, plans, drawings,
and specifications with respect to any of the foregoing. (Oct. 1957)
2. PAYMENTS. (Jun. 1959)-The 'Contractor shall be paid, upon submission of proper invoices or vouchers, the
prices stipulated herein for work delivered or rendered and accepted, less deductions, if any, as herein provided. Un-
less otherwise specified, payment will be made upon acceptance of any portion of the work delivered or rendered for
which a price is separately stated in the contract.
3. STANDARDS OF WORK. (Jun. 1959)-The Contractor agrees that the performance of work and services
pursuant to the requirements of this contract shall conform to high professional standards.
4. INSPECTION. (Jun. 1959)-(a) All work under this contract shall be subject to inspection and test by the
Government, to the extent practicable, at all times (including the period -of performance) and places, and in any
event prior to acceptance. The Government through any authorized representative may inspect the premises of the
Contractor or any subcontractor engaged in the performance of this contract.
(b)i The Government may reject -any work that is defective or otherwise not in conformity with the require-
ments of this contract. If the Contractor fails or is unable to correct or to replace such work, the Contracting
Officer may accept such work at a reduction in price which is equitable under the circumstances. Failure to agree
on the reduction in price shall be a dispute concerning a question of fact within the meaning of the clause of this
contract entitled "Disputes."
(c) If any inspection or test is made by the Government on the premises of the Contractor or a subcontractor,
the Contractor shall provide, without additional charge, all reasonable facilities and assistance for the safety and
convenience of the Government inspectors in the performance of their duties. If the Government inspection or test
is made at a point other than the premises of the Contractor or subcontractor, it shall be at the expense of the
Government. All inspections and tests by the Government shall be performed in such a manner as not unduly to
delay the work. Final inspection and acceptance or rejection of the work shall be made as promptly as practicable
after delivery except. as otherwise provided in this contract; but failure to inspect and accept, or reject the work
shall neither relieve the Contractor from responsibility for such of the work as is not in accordance with the con-
tract requirements nor impose liability on the Government therefor.
f(d) The inspection and test by the Government of any work shall not relieve the Contractor from any re-
sponsibility regarding defects or other failures to meet the contract requirements which may be discovered prior
to acceptance. Except as otherwise provided in this contract, acceptance shall be conclusive except as regards
latent defects, fraud, or such gross mistakes as amount to fraud.
(e) The Contractor shall provide and maintain an inspection system acceptable to the Government covering
the work hereunder. Records of all inspection work by the Contractor shall be kept complete .and available to the
Government during the performance of this contract and for such longer period as may be specified elsewhere in
this contract,.
5. 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 as-
signed to a bank, trust company, or other financing institution, including any Federal lending agency, and may
thereafter be further assigned and reassigned to any such institution. Any such assignment or reassignment shall
cover all amounts payable under this contract and not already paid, -and shall not be made to more than one party,
except that any such assignment or reassignment may be made to one party as agent or trustee for two or more
parties participating in such financing. Unless otherwise provided in this contract, payments to an assignee of any
* Chances to previous edition are marked with a star.
AFPI 71-9, June 65
FP R&D
Fd0P1/CQF Pages b8 -
(Supersedes. AFPI 71-9,. Sep 64, and
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alterations thereto, dated Dee 64)
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monies due or to become due under this contract shall not, to the extent provided in said Act, as amended, be sub.
ject 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 as-
signee of any claim arising under this contract or to any other "person not entitled to receive the same. However,
a copy of any part or all of this contract so marked may be furnished or any information contained therein may
be disclosed, to such assignee upon the prior written authorization oS the Contracting Officer.
6. EXAMINATION OF RECORDS. (Feb. 1962)-(a)~ The Contractor agrees that the Comptroller General of
the United States or any of his duly authorized representatives shall, until the expiration of three years after final
payment under this contract, have access to and the right to examine any directly pertinent books, documents,
papers, and records of the Contractor, involving transactions related to this contract.
(b) The Contractor further agrees to include, in all his subcontracts hereunder a provision to the effect that
the subcontractor agrees that the Comptroller General of the United States or any of his duly authorized repre-
sentatives 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 in-
volving transactions related to the subcontract. The term "subcontract" as used in the clause excludes (1) 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.
7. FEDERAL, STATE, AND LOCAL TAXES (Aug. 1961)-(a) Except as may be otherwise provided in this
contract, the contract price includes all applicable Federal, State, and local taxes and duties.
(b) Nevertheless, with respect to any Federal excise tax or duty on the transactions or property covered by
this contract, if a statute, court decision, written ruling, or regulation takes. effect after the contract date, and-
(1)1 results in the Contractor being required to pay or bear the burden of any such Federal excise tax or
duty or increase in the rate thereof which would not otherwise have been payable on such transactions or property,
the contract price shall be increased by the amount of such tax or duty or rate increase, provided the Contractor
warrants in writing that no amount for such newly imposed Federal excise tax or duty or rate increase was in-
cluded in the contract price as a contingency reserve or otherwise; or
(2) results in the Contractor not being required to pay or bear the burden of, or in his obtaining a refund
or drawback of, any such Federal excise tax or duty which would otherwise have been payable on such transactions
or property or which was the basis of an increase in the contract price, the contract price shall be decreased by
the amount of the relief, refund, or drawback, or that amount shall be paid to the Government, as directed by
the Contracting Officer. The contract price shall be similarly decreased if the Contractor, through his fault or
negligence or his failure to follow instructions of the Contracting Officer, is required to pay or bear the burden
of, or does not obtain a refund or drawback of, any such Federal excise tax or duty.
(c) No adjustment of less than $100 shall be made in the contract price pursuant to paragraph (b) above.
(d)? As used in paragraph (b) above, the term "contract date" means the date set for bid opening, or if
this is a negotiated contract, the contract date. As to additional supplies or services procured by modification to
this contract, the term "contract date" means the date of such modification.
(e) Unless there does not exist any reasonable basis to sustain an exemption, the Government upon the re-
quest of the Contractor shall, without further liability, furnish evidence appropriate to establish exemption from
any Federal, State, or local tax; provided that, evidence appropriate to establish exemption from any Federal
excise tax or duty which may give rise to either an increase or decrease in the contract price will be furnished only
at the discretion of the Government.
(f), The Contractor shall promptly notify the Contracting Officer of matters which will result in either an
increase or decrease in the contract price, and shall take action with respect thereto as directed by the Contract-
ing Officer.
8. 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.
9. DEFAULT. (Jul. 1962)-(a) The Government may, subject to the provisions of paragraph (c) of this clause,
by written Notice of Default to the Contractor terminate the whole or any part of this contract in any one of the
following circumstances:
(i) if the Contractor fails to perform the work called for by this contract within the time(s)- specified
herein or any extension thereof; or
(ii) if the Contractor fails to perform any of the other provisions of this contract, or so fails to prosecute
the work as to endanger performance of this contract in accordance with its terms, and in -either of these two
circumstances does not cure such failure within a period of 1.0 days (or such longer, period as the Contracting Officer
may authorize in writing) after receipt of notice from the Contracting Officer specifying such failure.
('b) In the event the Government terminates this contract in whole or in part as pprovided in paragraph (a)
of this clause, the Government may procure, upon such terms and in such manner as the Contracting Officer may
deem appropriate, work similar to the work so terminated .and the 'Contractor shall be liable to the Government for
any -excess costs for such similar work; provided, that the Contractor shall continue the performance of this con-
tract to the extent not terminated under the provisions of this clause.
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(c) Except with respect to defaults of subcontractors, the Contractor shall not be liable for any excess costs
if the failure to perform the contract arises out of causes beyond the control and without the fault or negligence
of the Contractor. Such causes may include, but are not restricted to, acts of God -or of'the public enemy, acts of
the Government in either its sovereign or contractual capacity, fires, floods, epidemics, quarantine restrictions,
strikes, freight embargoes, and unusually severe weather; but in every case the failure to perform must be beyond
the control and without the fault or negligence of the Contractor. If the failure to perform is caused by the de-
fault of a subcontractor, and if such default arises out of causes beyond the control of both the Contractor and sub-
contractor, and without the fault or negligence of either of them, the Contractor shall not be liable for any excess
costs for failure to perform, unless the supplies or service to be furnished by the subcontractor were obtainable
from other sources in sufficient time to permit the Contractor to meet the required delivery schedule or other per-
formance requirements.
(d) If this contract is terminated as provided in paragraph (a) of this clause, the Government, in addition
to any other rights provided in this clause, may require the Contractor to transfer title and deliver to the Gov-
ernment, in the manner and to the extent directed by the Contracting Officer any of the completed or -partially
completed work not theretofore delivered to, and accepted by, the Government and any other property, including
contract rights, specifically produced or specifically acquired for the performance of such part of this contract as
has been terminated; and the Contractor shall, upon the direction of the Contracting Officer, protect and preserve
property in the possession of the Contractor in which the Government has an interest. The Government shall pay
to the Contractor the contract price, if separately stated, for completed work accepted by the Government and the
amount agreed upon by the Contractor and the Contracting Officer for (i) completed work for which no separate
price is stated, (ii) partially completed work, (iii) other property described above -which is accepted by the Gov-
-ernment and, (iv) the protection and preservation of property. Failure to agree shall be a dispute concerning a
question of fact within the meaning of the clause of this contract entitled "Disputes." The Government may with-
hold from amounts otherwise due the Contractor for such completed supplies or manufacturing materials such sum
as the Contracting Officer determines to be necessary to protect the Government against loss because of outstand-
ing liens or claims of former lien holders.
(e) If, after notice of termination of this contract under the provisions of this clause, it is determined for
any reason that the Contractor was not in default under the provisions of this clause, or that the default was
excusable under the provisions of this clause, the rights and obligations of the parties shall, if the contract contains
a clause providing for termination for convenience of the Government, be the same as if the notice of ;termination
had been issued pursuant to such clause.
(f), The rights and remedies of the Government provided in this clause shall not be exclusive and are in
addition to any other rights and remedies provided by law or under this contract.
10. TERMINATION FOR CONVENIENCE OF THE GOVERNMENT. (Jan. 1961)-(a) The performance of
work under this contract may be terminated by the Government in accordance with this clause in whole, or from time
to time in part, whenever 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 the extent to which performance of work under the contract is terminated, and the date upon which
such termination becomes effective.
'(b) After receipt of a Notice of Termination, and except 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 necessary
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, at the times, and to the extent directed by the Contracting
Officer, all of the right, title, and interest of the Contractor under the orders and 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) settle all outstanding liabilities and all claims arising out of such termination of orders and subcontracts,
with the approval or ratification of the Contracting Officer, to the extent he may require, which approval or rati-
ficati-on shall be final for all the purposes of this clause; -
(vi) transfer title and deliver to the Government, in the manner, at the times, and to the extent, if any,
directed by the Contracting Officer, (A) the fabricated or unfabricated parts, work in process, completed work,
supplies, and other material produced as a part of, or acquired in connection with the performance of, the work
terminated by the Notice of Termination, and (B) the completed or partially completed plans, drawings, informa-
tion, and other property which, if the contract had been completed, would have been required to be furnished to
the Government;
(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 transferor disposition shall be applied in reduction of any
payments to be made by the Government to the Contractor under this contract or shall otherwise be credited to the
price or 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.
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At any time after expiration of the plant clearance period, as defined in Section VIII, Armed Services Procure-
ment 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 title to 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, and any necessary adjustment to correct the list as submitted shall be made prior to final
settlement.
1(c), After receipt of a Notice of Termination, the Contractor shall submit to the Contracting Officer his termi-
nation claim, in the form and with 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,
which amount or amounts may include a reasonable allowance for profit on work done; provided, that such agreed
amount or amounts, exclusive of settlement costs, shall not exceed the total contract price as reduced by the amount
of payments otherwise made and as further reduced by the contract price of work not terminated. The contract
shall be amended accordingly, and .the Contractor shall be paid the agreed amount. Nothing in paragraph (e) of
this clause, prescribing the amount to be paid to the Contractor in the event of failure of the Contractor and the
Contracting Officer to agree upon the whole amount to be paid to the Contractor by reason. of the termination of
work pursuant to this clause, shall be deemed to limit, restrict, or otherwise determine or affect the amount or
amounts which may be agreed upon to be paid to the Contractor pursuant to this paragraph (d).
(e) In the event of the failure of the Contractor and the Contracting Officer to agree as provided in paragraph
(d) upon the whole amount to be paid to the Contractor by reason of the termination of work pursuant to this
clause, the Contracting Officer shall, subject to any Settlement Review Board approvals required by Section VIII of
the Armed Services Procurement Regulation in effect as of the date of execution of ,this contract, determine, 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 amounts determined as follows:
(1) for completed supplies accepted by the Government (or sold or acquired as provided in paragraph (b)
(vii) above) and not theretofore paid for, a sum equivalent to the aggregate price for such supplies computed in
accordance with the price or prices specified in the contract, appropriately adjusted for any saving of freight or
other charges;
(ii)i the total of-
(A)i the costs incurred in the performance of the work terminated, including initial costs and preparatory
expense allocable thereto, but exclusive of any costs attributable to supplies paid or to be paid for under paragraph
(e) (i) hereof;
(B)l 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 the
contract (exclusive of amounts paid or payable on account of supplies or materials delivered or services furnished
by subcontractors or vendors prior to .the effective date of the Notice of Termination, which amounts shall be
included in the costs payable under (A) above); and
+(C) a sum, as a profit, equal to 2 percent of that part of the amount determined under (A) above which
represents the cost of articles and materials not processed by the Contractor, plus a sum equal to 8 percent of the
remainder of such amount, but the aggregate of such sums shall not exceed 6 percent of the whole of the amount
determined under (A) above; provided, however, that if it appears that the Contractor would have sustained a
loss on .the entire contract had it been completed, no profit shall be included or allowed under this subdivision (C)
and an appropriate adjustment shall be made reducing the amount of the settlement to reflect the indicated rate
of loss; and
(iii) the reasonable costs of settlement, including accounting, legal, clerical, and other expenses reasonably
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 thereunder, together with reasonable storage,
transportation, and -other costs incurred in connection with the protection or disposition of property allocable to
this contract.
The total sum to be paid to the Contractor under (i) and (ii) of .this paragraph (e) shall not exceed the total
contract price as reduced by the amount of payments otherwise made and as further reduced by the contract price
of work not terminated. Except for normal spoilage,-and except to the extent that ,the Government shall have
otherwise expressly assumed the risk of loss, there shall be excluded from the amounts payable -to the Contractor
as provided in (e),(i) and (ii) (A)' above, .the fair value, as determined by the Contracting Officer,, of property which
is destroyed, lost, stolen, or damaged so as to become undeliverable to the Government, or to a buyer pursuant to
paragraph (b) (vii).
(f) Any determination of costs under paragraph (c) or (e) hereof shall be governed by the principles for
consideration of costs set forth in Section XV, Part 2, of the Armed Services Procurement Regulation, as in
effect on the date of this contract.
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(g) The Contractor shall have the right of appeal, under the clause of this contract entitled "Disputes," from
any determination made by the Contracting Officer under paragraphs (c) or (e) above, except that if the Contractor
has failed to submit his claim within the time provided in paragraph (c) above and has failed to request extension
of such time, he shall have no such right of appeal. In any case where the Contracting Officer has made a deter-
mination of the amount due under paragraph (c) or (e) above, the Government shall pay to the Contractor the fol-
lowing: (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.
(h) In arriving at the amount due the Contractor under this clause there shall be deducted (i) all unliquidated
advance or other payments on account 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
Government.
(i) If the termination hereunder be partial, prior to the settlement of the terminated portion of this contract,
the Contractor may file with the Contracting Officer a request in writing for an equitable adjustment of the price
or prices specified in the contract relating to the continued portion of the contract (the portion not terminated by
the Notice of Termination.), and such equitable adjustment as may be agreed upon shall be made in such price or
prices.
-(j) The Government may from time to time, under such terms and conditions as it may prescribe, make partial
payments and payments on account against costs incurred by the Contractor in connection with the terminated
portion of this 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 agreed or determined to be due under this clause, such excess shall be payable by the Con-
tractor to the Government upon demand, together with interest computed at the rate of 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 reduction in the Contractor's claim by reason of retention or other disposition of termi-
nation inventory until ten days after the date of such retention or disposition, or such later date as determined by
the Contracting Officer by reason of the circumstances.
(k) Unless otherwise provided for in this contract, or by applicable statute, the Contractor, from the effective
date of termination and for a period of three years after final settlement under this contract, shall preserve and make
available to the Government at all reasonable times at the office of the Contractor but without direct charge to the
Government, all his books, records, documents, and other evidence bearing on the costs and expenses of the Con-
tractor under this contract and relating to the work terminated hereunder, or, to the extent approved by the
Contracting Officer, photographs, micro-photographs, or other authentic reproductions thereof.
(The following paragraph (1) is applicable only if this contract is subject to Incentive Price Revision)
(1) Insofar as items under this contract are subject to incentive price revision and the total final price for
such items has not been established under the incentive price revision clause of this contract, the total contract
price shall include, for the purpose of paragraphs (d) and (e) of this clause, the amount which the total final price
for such items may not exceed under the incentive price revision clause.
11. DISPUTES. (Jan. 1958)-(a) Except as otherwise provided in this contract, any dispute concerning a ques-
tion 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 turnish a copy thereof to the Contractor. The
decision of the Contracting Officer shall be final and conciusive 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 been 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 oppor-
tunity 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.
12. RENEGOTIATION. (Oct. 1959)-(a) To the extent required by law, this contract is subject to the Re-
negotiation Act of 1951 (50 U.S.C. App. 1211, et seq.), as amended, and to any subsequent act of Congress provid-
ing 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 hereafter enacted. Subject to the foregoing this contract shall be deemed to contain all the provisions required by
Section 1.04 of the Renegotiation Act of 1951, and by any such other act, without subsequent contract amendment
specifically incorporating such provisions.
(b) The Contractor agrees to insert the provisions of this clause, including this paragraph (b), in all sub-
contracts, as that term is defined in section 1.03g of the Renegotiation Act of 1951, as amended.
13. BUY AMERICAN ACT. (May 1964)-(a) In acquiring end products, the Buy American Act (41 U.S.C. 10
a-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
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(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 5:0, percent
of the cost of all its components. For the purposes of this (a) (iii) (B), components of foreign origin of the same
type or kind as the products referred to in (b) (ii) or (iii) of this clause shall be treated as components mined,
produced, or manufactured in the United States.
(b), The Contractor agrees that there will be delivered under this contract only domestic source end prod-
ucts, 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 inter-
est; 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. 10522, dated
December 17, 1954. So as to alleviate the impact of Department of Defense expenditures on the United States
balance of international payments, bids offering domestic source end products normally will be evaluated against bids
offering other end products by adding a factor of fifty percent (510,%) to the latter, exclusive of import duties. Details
of the evaluation procedure are set forth in Section VI of the Armed Services Procurement Regulation.)
14. 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.
15. 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 other-
wise subject to the Walsh-Healey Public Contracts Act, as amended (41 U.S.C. 35-45), there are hereby incorpo-
rated 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.
4 16. CONTRACT WORK HOURS STANDARDS ACT-OVERTIME COMPENSATION (June 1964)
This contract, 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 me-
chanic 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 compensation 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
employed 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 on 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).
(d) Subcontracts. The Contractor shall insert paragraphs (a) through (d) of this clause in all 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.
17. EQUAL OPPORTUNITY (Apr. 1964) (The following clause is applicable unless this contract is exempt
under the rules and regulations of the President's Committee on Equal Employment Opportunity (41 C.F.R. Chapter
60). Exemptions include contracts and subcontracts (i) not exceeding $10,000, (ii) not exceeding $100,000 for stand-
ard commercial supplies or raw materials, 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; lay-off or ter-`nation; rates of pay or other forms of compensation; and
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selection for training, including 'apprenticeship. The Contractor agrees to post in conspicuous places available to
employees and applicants for employment, notices to be provided by the Contracting Officer setting forth the pro-
visions of this nondiscrimination clause.
(b) The Contractor will, in all solicitations or advertisements for employees placed by or on behalf of the
Contractor, 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 nondiscrimina-
tion 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, ?19.61, 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. 1092& 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 procedures 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 President's Committee on Equal Employment Opportunity, or as otherwise provided by law.
gi(g) The Contractor will include the rovisions 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 3O of Executive Order No. 1,0925 of March 6, 19-61, 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 interests
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 construction"
(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.
18. 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.
19. 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.
20. 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
or amending, or the making of any determinations with respect to the performing of such contract; provided, that
the. existence of the facts upon which the Secretary or his duly authorized representative makes such findings shall
be in issue and may be reviewed in any competent court.
(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 times 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
addition to any other rights and remedies provided by law or under this contract.
21. AUTHORIZATION AND CONSENT. (Jan. 1961)-The Government hereby gives its authorization a n d
consent for all use and manufacture of any invention described in and covered by a patent of the United States
in the performance of this contract or any part hereof or any amendment hereto or any subcontract hereunder
(including any lower-tier subcontract).
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22. 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 evi-
dence 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.
23. PATENT RIGHTS (LICENSE) (May 1964)
(a) Definitions Used in This Clause.
(1) Subject Invention means any invention or discovery, whether or not patentable, conceived or first actually
reduced to practice in the course of or under this contract. The term "Subject Invention" includes, but is not limited
to, any art, machine, manufacture, design or composition of matter, or any new and useful improvement thereof, or
any variety of plant, which is or may be patentable under the patent laws of the United States of America or any
foreign country.
'(2) Governmental purpose means the right of the Government of the United States (including any agency
-thereof, state or domestic municipal government) to practice and have practiced (make or have made, use or have
used,- sell or have sold) any Subject Invention throughout the world by or on behalf of the Government of the United
States.
,or for th8) Contract means benefit of the Government econtract, nt whereaa purpose of they coor other ntract is the conduct of experimental,Ldevelopinto with
me tal,
or research work.
(4)' iSubcontract and subcontractor mean any subcontract or subcontractor of the Contractor, any lower-tier
subcontract or subcontractor under this contract.
(5) To bring to the point of practical application means to manufacture in the case of a composition or
product, to practice in .the case of a process, or to operate in the case of a machine or system and, in each case,
under such conditions as to establish that the Invention is being worked and that its benefits are reasonably accessible
to the public.
((b) Rights Granted to the Government.
(1) 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 Governmental purposes. In addition, the Government shall have the right to grant licenses to any foreign
government or international organization specifically for use in programs established by International Agreements
for research, development, or production of weapons or a uipment 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) (This paragraph applies if this contract has as one of its purposes the performance of research and
development work under a space program, project or task and paragraph (b) (1) above is 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 Governs
mental -purposes. In addition, the Government shall have (a) the right to grant licenses to any foreign government
or international organization specifically for use in programs established by International Agreements for research,
development or production of weapons or equipment for mutual defense and (b) the right to grant licenses to others,
under such terms and conditions as may be prescribed, for .the practice of such Subject Invention throughout the
world in the design, development, manufacture, operation, maintenance and testing of communications satellite
systems, and of equipment, components, and ground tracking, transmitting and receiving facilities therefor, and 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.
(2) The Contractor further agrees to grant, upon the request of the Government, a license under any Subject
Invention (made by the Contractor) to:
(1) any applicant on a nonexclusive, royalty-free basis, unless the Contractor, his licensee, or his assignee
demonstrates to the Government; at its request, that effective steps have been taken within, three years after a
patent issues on such Invention to bring the Invention to the point of practical application or that the Invention has
been made available for licensing royalty-free or on terms that are reasonable in the circumstances, or can show
cause why the principal or exclusive rights should be retained for a further period of time;
(ii) any applicant royalty-free or on terms that are reasonable in the circumstances tp the extent that
the Invention is required for public use by governmental regulations or as may be necessary to fulfill health needs,
or for other public purposes stipulated in the Schedule of this contract.
Nothing contained in this Patent Rights clause shall be deemed to grant any rights with respect to any invention
other than a Subject Invention.
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None,
~c) Invention Disclosures and Reports. With respect to Subject Inventions (made by the Contractor), the
Contractor shall furnish to the Contracting Officer:
(i) 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, sufficiently 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 characteristics of the Invention, together with a written
statement making an election as to whether a United States patent application claiming the Invention will be filed
by or on behalf of the Contractor;
(ii) interim reports at least every twelve (12) months, the initial period of which shall commence with
the date of this contract, each report listing all such Inventions conceived or first actually reduced to practice more
than three (3) months prior to the date of the report and not listed on a prior interim report, or certifying that
there are no such unreported Inventions;
(iii) prior to final settlement of this contract, a final report listing all such Inventions including all those
previously listed in interim reports, or certifying that there are no such unreported Inventions; and
(iv) written reports at reasonable intervals, prior to and after final settlement, when requested by the
Government, as to:-
(A) the commercial use that is being made or is intended to be made of such Invention;
(B) the steps taken by the Contractor to bring the Invention to the point of practical application,
or to make the Invention available for licensing.
(d) Domestic Filing. In connection with each Subject Invention referred to in (c)'(i) above:
(i), if the Contractor has elected to file a United States patent application claiming such Invention, the
Contractor shall, within six (6) months after the election, file or cause to be filed such application in due form and
shall so notify the. Contracting Officer at the time of such filing; if the Contractor does not file or cause to be filed
such application, he shall notify the Contracting Officer within the six (6) month period;
(ii) if the Contractor has elected not to file or to cause to be filed a United States patent application claim-
ing such Invention, or has made the contrary election but has not filed or caused to be filed such application within
six (6) months after the election, the Contractor shall:
(A) inform the Contracting Officer in writing, as soon as practicable, of the date and identity of
any public use, sale, or publication of such Invention made by or known to the Contractor or of any contemplated
publication by the Contractor;
(B)I upon written request, convey to the Government the Contractor's entire right, title and interest
in such Invention by delivering to the Contracting Officer such duly executed instruments (prepared by the Govern-
ment) of assignment and application, and such other papers as are deemed necessary to vest in the Government the
-entire right, title, and interest aforesaid, and the right to apply for and prosecute patent applications covering such
Invention throughout the world, subject to the reservation of a nonexclusive and royalty-free license to the Con-
tractor (and to his existing and future associated and affiliated companies, if any, within the corporate structure of
which the Contractor is a -part) which license shall be assignable to the successor of that part of the Contractor's
business to which such Invention pertains;.
(iii) the Contractor shall furnish promptly to the Contracting Officer on request an irrevocable power of
attorney to inspect and make copies of each United States patent application filed by or on behalf of the Contractor
covering any such Invention;
(iv) in the event the Contractor, or those other than the Government deriving rights from the Contractor,
elects not to continue prosecution of any such United States patent application filed by or on behalf of the Contrac-
tor, the Contractor shall so notify the Contracting Officer not less than sixty (60) days before the expiration of
the response period and, upon written request, deliver to the Contracting Officer such duly executed instruments
(prepared by the Government) as are deemed necessary to vest in the Government the entire right, title, and in-
terest in such Invention and the application, subject to the reservation as specified in paragraph (d) (ii)'(B) of this
clause; and
(v) the Contractor shall deliver to the Contracting Officer duly executed instruments fully confirmatory
,of all rights herein agreed to be granted or reserved to the Government.
(e) Foreign Filing. The Contractor, or those other than the Government deriving rights from the Contractor,
shall as between the parties hereto, have the exclusive right, subject to the rights of the Government under para-
graph (b) of this clause, to file applications on Subject Inventions (made by the Contractor) in each foreign country
within:
(i) nine (9) months from the date a corresponding United States application is filed, or nine (9) months
from the date the Contractor discloses a Subject Invention under paragraph (c)'(i) above with an election not to
file a United States application;
(ii) six (6) months from the date permission is granted to file foreign applications where such filing had
been prohibited for security reasons; or
(iii) such longer period as may be approved by the Contracting Officer.
The Contractor shall notify the Contracting Officer of each foreign application 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 above specified, subject to the
reservation as specified in paragraph (d) (1i)'(B) of this clause.
(f) Withholding of Payment. If the Contractor fails to deliver to the Contracting Officer the interim reports
required by (c) (ii) above, or fails to furnish the written disclosures for all Subject Inventions required by (c) (i)
above shown to be due in accordance with any interim.report delivered under (c)'(ii) or otherwise known to the Gov-
ernment to be unreported, there shall be withheld from payment, until the Contractor- shall have corrected such
failures, either ten percent (10%) of the amount of this contract, as from time to time amended, or ten thousand
dollars ($10,000), whichever is less. After payment of eighty percent (80%) of the amount of this contract, as from
time to time amended, payment shall be withheld until a reserve of either ten percent (10%) of the amount of this
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contract, or ten thousand dollars ($10',000) whichever is less, shall have been set aside, such reserve or balance
thereof to be retained until the Contractor shall have furnished to the Contracting Officer:
(i) the final report required by (c) (iii)' of this clause;
(ii) written disclosures for all Inventions required by (c).(i) above which are shown to be due in accordance
with interim reports delivered under (c) (ii) above, or in accordance with such final reports, or are otherwise known
to the Government to he unreported; and
(iii)' the information as to any subcontractor required by (g) below.
No amount shall be withheld under this paragraph when the amount specified by this paragraph is being withheld
under other provisions of this contract. The withholding of any amount or subsequent payment thereof to the Con-
tractor shall not be construed as a waiver of any rights accruing to the Government under this contract. This para-
graph shall not be construed as requiring the Contractor to withhold any amounts from a subcontractor to enforce
compliance with the patent provision of a subcontract. In cost-type contracts, "amount of this contract" shall mean
"'estimated cost of this contract."
(g)' Subcontracts.
(1:) The Contractor shall, unless otherwise authorized or directed by the Contracting Officer, include a patent
rights clause containing all of the provisions of this Patent Rights clause except provision (f) in any subcontract
hereunder where a purpose of the subcontract is the conduct of experimental, developmental, or research work. In
the event of refusal by a subcontractor to accept this Patent Rights clause, or if in the opinion of the Contractor
this Patent Rights clause is inconsistent with the policy set forth in ASPR 9-107.2 and 9-107.3, the Contractor:
(i) shall promptly submit a written report to the Contracting Officer setting forth the subcontractor's
reason for such refusal or the reasons the Contractor is of the opinion that the inclusion of this clause would be so
inconsistent, and other pertinent information, which may expedite disposition of the matter; and
(ii) shall not proceed with the subcontract without the written authorization of the Contracting Officer.
The Contractor shall not, in any subcontract or by using such a -subcontract as consideration therefor, acquire any
rights to Subject Inventions for his own use (as distinguished from such rights as may be required solely to fulfill
his contract obligations to the Government in the performance of this contract). Reports, instruments, and other
information required to be furnished by a subcontractor to the Contracting Officer under the provisions of such a
patent rights clause in a subcontract hereunder may, upon mutual consent of the Contractor and the subcontractor
(or by direction of the Contracting Officer) be furnished to the Contractor for transmission to the Contracting Officer.
(2)? The Contractor, at the earliest practicable date, shall also notify the Contracting Officer in writing of
any subcontract containing a patent rights clause, furnish him a copy of such clause, and notify him when such
subcontract is completed. It is understood that the Government is a third party beneficiary of any subcontract clause
granting rights to the Government in Subject Inventions, and the Contractor hereby assigns to the Government
all the rights that he would have to enforce the subcontractor's obligations for the benefit of :the Government with
respect to Subject Inventions. If there are no subcontracts containing patent rights clauses, a negative report is
required. The Contractor shall not he obligated to enforce the agreements of any subcontractor hereunder relating
to the obligations of the subcontractor to the Government in regard to Subject Inventions.
(h) Licenses Granted by Contractor to Others Subject to Government's Rights. The Contractor recognizes that
the Government, or a foreign government with funds derived through the Military Assistance Program or otherwise
through the United States Government, may contract for property or services with respect to which the vendor
may be liable to the Contractor for royalties for the use of a Subject Invention on account of such a 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 Assistance Program.
or otherwise through the United States Government, charges for use of patents in which the Government holds a
royalty-free license. In recognition of this policy, the Contractor agrees to participate in and make appropriate
arrangements for the exclusion of such charges from such contracts or for the refund of amounts received by the
Contractor with respect to any such charges not so excluded.
?(i) Rights to Disclose Subject Inventions. The Government may duplicate and disclose reports and disclosures
of Subject Inventions required to be furnished by the Contractor or a subcontractor pursuant to this Patent Rights
clause.
24. RIGHTS IN TECHNICAL DATA (Feb. 1965)
(a) Definitions.
S1) Technical Data, as used in this clause, means technical writings, sound recordings, pictorial reproduc-
tions, rawings, or other graphic representations and works of a technical nature, whether or not copyrighted,
which are specified to be delivered pursuant to this contract. The term does not include financial reports, cost
analyses, and other information incidental to contract administration.
(2)' Limited Rights means rights to use, 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 released outside the Government, used,
duplicated, or disclosed in whole or in part, for manufacture or procurement, except for:
(i) emergency repair or overhaul work by or for the Government where the item or process concerned
is not otherwise reasonably available to enable timely performance of the work; and
(ii) release to a foreign government as the interests of the United States may require;
provided, in either ease, that the release of such data shall be subject to the limitations of this paragraph (s)'.
(3) Unlimited Rights means rights to use, duplicate or disclose technical data, in whole or in part, in any
manner and for any purpose whatsoever, and to have or permit others to do so.
,(b) Government Rights.
(1) The Government shall have unlimited rights in:
(i) technical data resulting directly from performance of experimental, developmental or research work
which was specified as an element of performance in this or any other Government contract or subcontract;
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(ii) technical data necessary to enable manufacture of end-items, components and modifications, or to
enable the performance of processes, when the end-items, components, modifications or processes have been, or are
being, developed under this or any other Government contract or subcontract in which experimental, develop-
mental or research work is, or was specified as an element of contract performance, -except technical data pertain-
ing to items, components or processes developed at private expense (but see (2) (ii) below);
(iii) technical data constituting corrections or changes to Government-furnished data;
(iv) technical data pertaining to end-items, components or processes which was prepared for the pur-
pose of identifying sources, size, configuration, mating and attachment characteristics, functional characteristics
and performance requirements ("form, fit and function" data, e.g., specification control drawings, catalog sheets,
envelope drawings, etc.);
(v) manuals or instructional materials prepared for installation, operation, maintenance or training
purposes;
(vi)! other technical data which has been, or is normally furnished without restriction by the Contractor
or subcontractor; and
(vii), technical data listed or described in an agreement incorporated into the Schedule of this contract,
which the parties have predetermined, on the basis of subparagraphs (i) through (vi) above, and agreed will be
furnished with unlimited rights.
(2) The Government shall have limited rights in:
(i) 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
(H) technical data pertaining to items, components or processes developed at private expense, other than
such data as may be included in the data referred to in (b)'(1) (i), (iii), (iv), (v), and (vi);
provided, that each piece of data to which limited rights are to be asserted pursuant to (2) (i) and (ii) above is
marked with the following legend in which is inserted the number of the prime contract under which the technical
data is to be delivered and the name of the Contractor or subcontractor by whom the technical data was generated:
"Furnished under United States Government Contract No .......................... Shall not be either released outside
the Government, or used, duplicated, or disclosed in whole or in part for manufacture or procurement, with-
out the written permission of ....................................... except for: (i) emergency repair or overhaul work by
or for the Government, where the item or process concerned is not otherwise reasonably available to enable
timely performance of the work; or (ii) release to a foreign government, as the interests of the United
States may require; provided that in either case the release, use, duplication or disclosure hereof shall be
subject to the foregoing limitations. This legend shall be marked on any reproduction hereof in whole or
in part."
No legend shall be marked on, nor shall any limitation on rights of use be asserted as to, any data which the Con-
tractor has previously delivered to the Government without restriction. The limited rights provided for by this
paragraph (b) (2) shall not impair the right of the Government to use* similar or identical data acquired from
other sources.
(c) Material Covered by Copyright.
,(1) Notwithstanding the provisions of (b) above, the Contractor agrees to and does hereby grant to the
Government, and to its officers, agents, and employees acting within the scope of their official duties, a royalty-free,
nonexclusive and irrevocable license throughout the world for Government purposes to publish, translate, repro-
duce, deliver, perform, dispose of, and to authorize others so to do, all technical data now or hereafter covered
by copy gh
(2) No such copyrighted matter shall be included in technical data furnished hereunder without the written
permission of the copyright owner for the Government to use such copyrighted matter in the manner described
above.
(3.) The Contractor shall report 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 tech-
nical data delivered hereunder.
(d) Removal of Unauthorized Markings. Notwithstanding any provisions of this contract concerning inspec-
tion 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-
(i) the Contractor fails to respond within sixty (6D) days to a written inquiry by the Government con-
cerning the propriety of the use of the marking, or
(ii) the Contractor's response. fails to substantiate his contention that the use of the marking is author-
ized, in which case the Government shall be give written notice to the Contractor.
(e) Relation to Patents. Nothing contained in this clause shall imply a license to the Government under any
patent or be construed as affecting the scope of any license or other right otherwise granted to the Government
under any patent.
with Limitation on Charges for Data. The Contractor recognizes that the Government, or a foreign government
with funds derived through the Military Assistance Program or otherwise through the United States Government,
may contract for property or services with respect to which the vendor may be liable to the Contractor for. charges
for the use of technical data on account of such a contract. The Contractor further recognizes that it is the policy
of the Government not to pay in connection with its contracts, or to allow to be paid in connection with contracts
made with funds derived through the Military Assistance Program .or-otherwise through the United States Govern-
ment, charges for data which the Government has a right to use and disclose to others, which is in the public-do-
main, or which the Government has been given without restrictions upon its use and disclosure to others. This
policy does not apply to reasonable reproduction, handling mailing, and similar administrative costs incident to the
furnishing of such data. In recognition of this policy, the contractor agrees :to participate in and make appropriate
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arrangements for the exclusion of such charges from such contracts, or for the refund of amounts received by the
Contractor with respect to any such charges not so excluded.
(g) Acquisition of Data from Subcontractors.
(1) Whenever any technical data is to be obtained from a subcontractor under this contract, the Contractor
shall use this same clause in the subcontract, without alteration, and no other clause shall be used to enlarge or
diminish the Government's or the Contractor's rights in that subcontractor data which is required for .the Govern-
ment.
(2) Technical data required to be delivered by a subcontractor shall normally be delivered to the next higher-
itier Contractor. However, when there is a requirement in the prime contract, or in the deferred order, for data which
may be supplied with limited rights pursuant to (b),(2) above, a subcontractor may fulfill such requirement by
submitting such data directly to the Government rather than through the prime Contractor.
(3), The Contractor and higher-tier subcontractors will not use their power to award subcontracts as eco-
nomic leverage to acquire rights in data from their subcontractors for themselves.
25. 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 ele-
ments 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 secu-
rity classification under this contract as provided in paragraph (b) above, the Contractor shall safeguard all clas-
sified 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 44-1), including the Department of Defense Industrial Security
Manual for Safeguarding Classified Information as in effect on the date of this contract, and any modification to
the Security Agreement for the purpose of adapting the Manual to the Contractor's business; and
(ii) any amendments to said Manual made after the date of this contract, notice of which has been fur-
nished 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 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 infor-
mation, 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 determine that any subcontractor proposed by him for the fur-
nishing of sup,)lies 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.
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 substantially in areas of persistent or substantial labor
surplus where this can be done, consistent with the efficient performance of the contract, at prices no higher than
are obtainable elsewhere. The Contractor agrees to use his best efforts to place his subcontracts in accordance with
this policy. In complying with the foregoing and with paragraph (b) of this clause of this contract entitled "Utiliza-
tion 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 persist-
ent labor surplus area concerns; (iii) substantial labor surplus area concerns which are also small business con-
cerns; (iv) other substantial labor surplus area concerns; and (v) small business concerns which are not labor sur-
plus area concerns.
27. FILING OF PATENT APPLICATIONS. (Jan. 1955)-(a) Before filing or causing to be filed a patent ap-
plication disclosing any subject matter of this contract which subject matter is classified "Secret" or higher, the
Contractor shall, citing the thirty (30) day'provision below, transmit the proposed application to the Contracting
Officer for determination whether, for reasons of national security, such application should be placed under an
order of secrecy or sealed in accordance with the provisions of 35 U.S. Code 181-188 or the issuance of a patent
should be otherwise delayed under pertinent statutes or regulations; and the Contractor shall observe any in-
structions of the Contracting Officer with respect to the manner of delivery of the patent application to the U.S.
Patent Office for filing, but the Contractor shall not be denied the right to file such patent application. If the
Contracting Officer shall not have given any such instructions within thirty (34) days from the date of mailing or
other transmittal of the proposed application, the Contractor may file the application.
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(b) The Contractor shall furnish to the Contracting Officer, at the time of or prior to the time when the
Contractor files or causes to be filed a patent application disclosing any subject matter of this contract, which
subject matter is classified "Confidential," a copy of such application for determination whether, for reasons of
national security, such application should be placed under an order of secrecy or the issuance of a patent should
be otherwise delayed under pertinent statutes or regulations.
(c)' In filing any patent application coming within the scope of this clause, the Contractor shall observe all
applicable security regulations covering the transmission of classified subject matter.
28. PRIORITIES, ALLOCATIONS, AND ALLOTMENTS. (Jan. 1961)-The Contractor shall follow the pro-
visions of DMS Regulation 1 and all other applicable regulations and orders of the Business and Defense Services
Administration in obtaining controlled materials and other products and materials needed to fill this order.
29. GOVERNMENT PROPERTY (FIXED PRICE) (June 1965)-(a) Government-Furnished Property. The Gov-
ernment shall deliver to the Contractor, for use in connection with and under the terms of this contract, 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 prop-
erty (hereinafter referred to as "Government-furnished property"). The delivery or performance dates for the sup-
plies or services to be furnished by the Contractor under this contract are based upon the expectation that Govern-
ment-furnished property suitable for use (except, for such property furnished "as is") will be delivered to the
Contractor at the times stated in the Schedule or, if not so stated, in sufficient time to enable the Contractor to
meet such delivery or performance dates. In the event that Government-furnished property is not delivered to the
Contractor by such time or times, the Contracting Officer shall, upon timely written request made by the Contractor,
make a determination of the delay, if any, occasioned the Contractor thereby, and shall equitably adjust the delivery
or performance dates or the contract price, or both, and any other contractual provision affected by any such delay,
in accordance with the procedures provided for in the clause of this contract entitled "Changes." Except for Gov-
ernment-furnished property furnished "as is " in the event the 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 the com-
pletion of (i) or (ii) above, the Contracting Officer upon written request of the Contractor shall equitably adjust the de-
livery or performance dates or the contract price, or both, and any other contractual provision affected by the re-
jection 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 delivery of Government-furnished property or
delivery of such property in a condition not suitable for its intended use.
(b) Changes in Government-Furnished Property.
(1) By notice in writing, the Contracting Officer may (i) decrease the property provided or to be provided
by the Government under this contract, or (ii) substitute other Government-owned property for property to be pro-
vided 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 ship-
ping of property covered by such notice.
(2) In the event of any decrease in or substitution of property pursuant to subparagraph (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. In order to de-
fine the obligations of the parties under this clause, titla to each. item of facilities, special test equipment, and
special tooling (other than that subject to a "Special Tooling" clause) acquired by the Contractor for the Government
pursuant to this contract shall pass to and vest in the Government when its use in the performance of this contract
commences, or upon payment therefor by the Government, whichever is earlier, whether or not title previously
vested. All Government-furnished property, together with all property acquired by the Contractor title. to which
vests in the Government under this paragraph, is subject to the provisions of this clause and is hereinafter col-
lectively referred to as "Government property." Title to Government property shall not be affected by the incor-
poration or attachment thereof to any property not owned by the Government, nor shall such Government prop-
erty, 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 ap-
proved by the Contracting Officer, be used only for the performance of this contract.
(f) Maintenance and Repair of Government Property. The Contractor shall maintain and administer, in accord-
ance with sound industrial practice, a program for the maintenance, repair, protection, and preservation of Gov-
ernment property, until disposed of by the Contractor in accordance with this clause. In the event that any damage
occurs to Government property the risk of which has been assumed by the Government under this contract, the
Government shall replace such items or the Contractor shall make such repair of the property as the Government
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directs; provided,-however, that if the Contractor cannot effect such repair within the time required, the Contractor
shall dispose of such property in the manner directed by the Contracting Officer. The contract price includes no
compensation to the Contractor for the performance of any repair or replacement for which the Government is
responsible, and an, equitable adjustment will be made in any contractual provisions affected by such repair or re-
placement of Government property made at the direction of the Government, in accordance with the procedures pro-
vided for in the "Changes" clause of this contract. Any repair or replacement for which the Contractor is responsible
under the provisions of this contract shall be accomplished by the Contractor at his own expense.
(g)i Risk of Loss. Unless otherwise provided in this contract, the Contractor assumes the risk of, and shall be
responsible for, any loss of or damage to Government property provided under this contract upon its delivery to
him or upon passage of title thereto to the Government as provided in paragraph (c) hereof, except for reasonable
wear and tear and except to the extent that such property is consumed in the performance of this contract.
(If the Contractor is required to submit cost or pricing data in accordance with ASPR 3-807.3 this paragraph
(g) shall be applicable in lieu of paragraph (g) above.)
(g)' Risk of Loss.
(1) Except for loss, destruction or damage resulting from a failure of the Contractor due to willful mis-
conduct or lack of good faith of any of the Contractor's managerial personnel as defined herein, to maintain and ad-
minister the program for the maintenance, repair, protection and preservation of the Government property as re-
quired by paragraph (f) hereof, and except as specifically provided in the clause or clauses of this contract desig-
nated in the Schedule, the Contractor shall not be liable for loss or destruction of or damage to the Government
property provided under this contract:
(i) caused by any peril while: the property is in transit off the Contractor's premises; or
(ii) caused by any of the following perils while the property is on the Contractor's or subcontractor's
premises, or on any other premises where such property may properly be located, or by the removal therefrom
because of any of the following perils-
~(A) fire; lightning, windstorm, cyclone, tornado, hail; explosion; riot, riot attending a strike, civil
commotion; vandalism and malicious mischief; sabotage; aircraft or objects falling therefrom; vehicles running on
land or tracks, excluding vehicles owned or operated by the Contractor or any agent or employee of the Contractor;
smoke; sprinkler leakage; earthquake or volcanic eruption; flood, meaning thereby rising of a body of water; nu-
clear reaction, nuclear radiation or radioactive contamination; hostile or warlike action, including action in hinder-
ing, combating, or defending against an actual, impending or expected attack by any government or soverign power
(de jure or de facto), or by any authority using military, naval, or air forces; or by an agent of any such govern-
ment, power, authority, or forces; or
(B) other peril, of a type not listed above, if such other peril is customarily covered by insurance (or
by a reserve for self-insurance) in accordance with the normal practice of the Contractor, or the prevailing prac-
tice in the industry in which the Contractor is engaged with respect to similar property in the same general locale.
The perils as set forth in (i) and (ii) above are hereinafter called "excepted perils."
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 subcontractor to assume the risk of, and be responsible for, any
loss or destruction of or damage to the property while in the latter's possession or control, except to the extent
that the subcontract, with the prior approval of the Contracting Officer, provides for the relief of the subcon-
tractor from such liability. In the absence of such approval, the subcontract shall contain appropriate provisions re-
quiring 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.
The term, "Contractor's managerial personnel" as used herein means the Contractor's directors, officers and any
of his managers, superintendents, or other equivalent representatives who have supervision or direction of:
(i) all or substantially all of the Contractor's business;
(ii); all or substantially all of the Contractor's operation at any one plant or separate location at which
the contract is being performed; or
(iii)I a separate and complete major industrial operation in connection with the performance of this
(2); The Contractor represents that he is not including in the price hereunder, and agrees that he will not
hereafter include in any price to the Government, any charge or reserve for insurance (including any self-insurance
funds or reserve) covering loss or destruction of or damage to-the Government property caused by any excepted
peril.
(3) Upon the happening of loss or destruction of or damage to any Government property caused by an ex-
cepted peril, 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 directed that no such organiza-
tion be employed), shall take all reasonable steps to protect the Government property from further damage, sep-
arate 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)i 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 be entitled to an equitable adjustment in the contract price for the expenditures made by him
in performing his obligations under this subparagraph (3) (including charges made to the Contractor by the Loss
and Salvage Organization, except any of such charges the payment of which the Government has, at its option, as-
sumed, directly), in accordance with the procedures provided for in the "Changes" clause of this contract.
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(4) With the approval of the Contracting Officer after loss or destruction of or damage to Government prop-
erty, and subject to such conditions and limitations as may be imposed by the Contracting Officer, the Contractor
may, in order to minimize the loss to the Government or in order to permit resumption of business or the like,
sell for the account of the Government any item of Government property which has been damaged beyond practi-
cable repair, or which is so commingled or combined with property of others, including the Contractor, that sep-
aration is impracticable.
(5) Except to the extent of any loss or destruction of or damage to Government property for which the
Contractor is relieved of liability under the foregoing provisions of this clause, and except for reasonable wear
and tear or depreciation, or the utilization of the Government property in accordance with the provisions of this con-
tract, the Contractor assumes the risk of, and shall be rasponsible for, any loss or destruction of or damage to
the Government property, and such property (other than that which is permitted to be sold) shall be returned to
the Government in as good condition as when received by the Contractor in connection with this contract, or as
repaired under paragraph (f) above.
(6) In the event the Contractor is reimbursed or compensated for any loss or destruction of or damage to
the Government property, caused by an excepted peril, he shall equitably reimburse the Government. The Contractor
shall do nothing to prejudice the Government's rights to recover against third parties for any such loss, destruc-
tion or damage and, upon the request of the Contracting Officer, shall at the Government's expense, furnish to the
Government all reasonable assistance and cooperation (including the prosecution of suit and the execution of in-
struments of assignment in favor of the Government) in obtaining recovery. In addition, where a subcontractor
has not been relieved from liability for any loss or destruction of or damage to the Government property, the Con-
tractor 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.
(7) 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 "Ground and Flight Risk" clause of this con-
tract 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 wherein any 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 per-
formance 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
regarding 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 resto-
ration or rehabilitation of, the Contractor's plant or any portion thereof which is affected by the abandonment 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 Contractor's"
(Appendix H, 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 sub-
contract 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; pro-
vided, 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 by Part 6 of Appendix E of the Armed Services
Procurement Regulation, as in effect on the date of this contract. Amounts shall be due upon the earliest one of
(i) the date fixed pursuant to this contract, (ii) the date of the first written demand for payment, consistent with
this contract, (iii) the date of transmittal by the Government to the Contractor of a proposed supplemental agree-
ment to confirm completed negotiations fixing the amount, or (iv) if this contract provides for revision of prices,
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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. COMPETITION IN SUBCONTRACTING. (Apr. 1962)-(Applicable only if this is a negotiated contract over
$10,000.00). The Contractor shall select subcontractors (including suppliers) on a competitive basis to the maximum
practical extent consistent with the objectives and requirements of the contract.
34. CHANGES. (June 1965)-The Contracting Officer may at any time, by 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; and (iii) place of inspection, delivery, or
acceptance. If any such change causes an increase or decrease in the cost of, or the time required for performance
of, this contract, or otherwise affects any other provisions of this contract, whether changed or not changed by any
such order, an equitable adjustment shall be made (i) in the contract price or time of performance, or both, and
(ii) in such other provisions of the contract as may be so affected, and the contract shall be modified in writing
accordingly. Any claim by the Contractor for adjustment under this clause must be asserted within -sixty (60) days
from the date of receipt by the Contractor of the notification of change; provided, however, that the Contracting
Officer, if he decides that the facts justify such action, may receive and act upon any -such claim asserted at any
time prior to final payment under this contract. Failure to agree to any adjustment shall be a dispute concerning
a question of fact within the meaning of the clause of this contract entitled "Disputes." However, nothing in this
clause shall excuse the Contractor from proceeding with the contract as changed.
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 contract
shall be delivered f.o.b. carrier's equipment at the plant or plants at which such supplies are to be finally inspected
and accepted, or if the facilities for shipment by carrier's equipment are not available at the Contractor's plant f.o.b.
the point or points 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 Con-
tractor'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 expense of the Contractor. Provided, however, that nothing contained herein shall 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) 1.00 pounds if shipped
b y railway express, or (iii) 50 pounds if shipped by commercial air, shall bg 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 de-
livered 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 de-
livered 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 at 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
destinations, Government routing instructions will be furnished to the Contractor in writing by the Contracting
Officer at a later date. If the Government routing instructions have not been received by the Contractor thirty
(30) days prior to date 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 twenty-four (2.4) hours 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)i 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 de-
livered 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 plant's, f.o.b. the point
or points nearest thereto that carriers 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. Subcontractor's shipping instructions and rout-
ing instructions, if not previously furnished, shall be requested from the Prime Contractor.
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36. GOVERNMENT BILL OF LADING. (Jul. 1961) When it is provided in this contract that thesupplies shall
be delivered other than f.o.b. specified destinations, shipment(s) will be made on a Government Bill of Lading. The
required number of such Government Bills of Lading will be furnished to the Contractor by the cognizant transpor-
tation activity. The Contractor shall acknowledge receipt of these Government Bills of Lading in the manner pre-
scribed. As shipments are made, the Contractor shall prepare and distribute the applicable Government Bills of
Lading in accordance with AFLC Form 2,32, "Instructions for Processing U.S. Government Bill of Lading." The
Contractor also agrees that Government Bills of Lading in excess of the requirements of this contract will be re-
turned to the cognizant transportation activity within a reasonable time after final shipment. The use of U. S.
Government mailing indicia- is authorized in lieu of U. S. Government Bills of Lading when commodity, weight,
and cube permit movement within the U. S. Postal Service.
37. DATA-WITHHOLDING OF PAYMENT. (Apr. 1965)-(This Clause is applicable only if this contract is
in excess of $10,0010.00.) If "Technical Data" (as defined in the clause of this contract entitled "Rights of Tech-
nical Bata"), or any part thereof, is not delivered within the time specified by this contract or is deficient upon
delivery (including having restrictive markings not specifically authorized by this contract), the Contracting Offi-
cer may, until such data is delivered or deficiencies are corrected, withhold payment to the Contractor of ten per-
cent (10%) of the contract price unless a lesser withholding is specified in the schedule. Payments shall not be
withheld nor any other action taken pursuant to this clause where the Contractor's failure to make timely delivery
or to deliver data without deficiencies arises out of causes beyond the control and without the fault or negligence
of the Contractor within the meaning of the clause hereof entitled "Default." The withholding of any amount or
subsequent payment thereof to.the Contractor shall not be construed as a waiver of any rights accruing to the Gov-
ernment under this contract.
38. 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.
* 39. SUBCONTRACTS. (Apr. 1964) If this contract provides for price redetermination, or contains incentive
provisions, the following provisions shall apply to subcontracts:
(a)~ As -used in this clause, the term "subcontract" includes purchase orders.
(b)' The Contractor shall notify the Contracting Officer reasonably in advance of entering into any subcontract
which comes under any part of the Contractor's purchasing system that has not been approved by the Contracting
Officer and which-
(i) is cost-reimbursement type, time and material or labor-hour and which would involve an estimated
amount in excess of $10,000 including any fee; or
(ii)i is proposed to exceed $26,000 or five percent (5%) of the total amount of this contract; or
(iii) is one of a number of subcontracts under this contract with a single subcontractor for the same oz
related supplies or services which, in the aggregate, are expected to exceed $25,000- or five percent (5%) of the total
amount of this contract.
(c) The advance notification required by paragraph (b) above shall include:
(i)' a description of the supplies or services to be called for by the subcontract;
(ii)' identification of the proposed subcontractor and an explanation of why and how the proposed sub-
contractor was selected, including the degree of competition obtained;
'(iii), the proposed subcontract price, together with the Contractor's cost or price analysis thereof;
'(iv) the subcontractor's current, complete, and accurate cost or pricing data and Certificate of Current
Cost or Pricing Data when such data and certificate are required, by other provisions of this contract, to be ob-
tained from the subcontractor; and
(v)+ identification of the type of contract to be used.
(d), The Contractor shall not, without the prior written consent of the Contracting Officer, enter into any sub-
contract for which advance notification to the Contracting Officer is required by this clause; provided that, in his
discretion, the contracting Officer may ratify in writing any subcontract and such ratification shall constitute the
consent of the Contracting Officer required by this paragraph.
(e) No consent by the Contracting Officer to any subcontract or any provisions thereof or approval of the
Contractor's purchasing system shall be construed to be a determination of the acceptability of any subcontract
price or of any amount paid under any subcontract or to relieve the Contractor of any responsibility for performing
this contract, unless such approval or consent specifically provides otherwise.
(f) The Contractor agrees that no subcontract placed under this contract shall provide for payment on a cost-
plus-a-percentage-of-cost basis.
40. RESPONSIBILITY FOR SUPPLIES. (Jan. 1958) (If this contract is for the delivery of.end items other
than designs, drawings, or reports the following clause shall be applicable.) Except as otherwise provided in this
contract, (i) the Contractor shall be responsible for the supplies covered by this contract until they are delivered
at the designated delivery point, regardless of the point of inspection; (ii) after delivery to the Government at the
designated point and prior to acceptance by the Government or rejection and giving notice thereof by the Govern-
ment, the Government shall be responsible for the loss or destruction of or damage to the supplies only if such loss,
destruction, or damage results from the negligence of officers, agents, or employees of the Government acting
within th scope of their employment; and (Ili) the Contractor shall bear all risks as to rejected supplies after
notice of rejection, except that the Government shall be responsible for the loss, or destruction of, or damage to
the supplies only if such loss, destruction or damage results from the gross negligence of officers, agents, or em-
ployees of the Government acting within the scope of their employment.
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41. ACKNOWLEDGMENT OF SPONSORSHIP.- (a) The Contractor agrees that in the release of infor-
mation relating to this contract such release shall include a statement to the effect that the project. or effort de-
picted was or is sponsored by the agency set forth in the Schedule of this contract.
(b) For the purpose of this clause, "information" includes but is not limited to, news releases, articles, manu-
scripts, brochures, advertisements, still and motion pictures, speeches, trade association meetings, symposia, etc.
(c) Nothing in the foregoing shall affect compliance with the requirements' of the clause of this contract
entitled "Military Security Requirements."
(d) The Contractor further agrees to include this provision in any subcontract awarded as a result of this
contract.
42. DEFERRED ORDERING OF TECHNICAL. DATA (May 1964) The Government shall have the right to order,
at any time during the performance of this contract, or within two (2) years from either acceptance of all items
(other than data) to be delivered under this contract or termination of this contract, whichever is later, any data
called for in the Schedule of this contract, and the Contractor shall promptly prepare and deliver such data as is
ordered. However, the Contractor shall be relieved of the obligation to furnish data pertaining to an item obtained
from a subcontractor upon the expiration of two (2) years from the date he accepts the item. When the data is
delivered, payment shall be made, by equitable adjustment or otherwise, for converting the data into the prescribed
form, reproducing it, and preparing it for delivery. Such payment shall not be included in the application of any
incentive pricing formula.
"F 43. RESTRICTIONS ON PRINTING. (June 1963) Reproduction of reports, data or other written material, if re-
quired, is authorized provided that the material produced does not exceed 5,000, production units* of any page and
that items consisting of multiple pages do not exceed 25,000 production units in the aggregate. These production
unit limitations do not apply to jobs of 225 copies or less. Printing of materials in excess of quantities cited above
must be in accordance with paragraph 6, AFR 6-i. These restrictions do not preclude the writing, editing, prepa-
ration of manuscript or reproducible copy or related illustrative materials if required as a part of this contract. It
does not apply to the printing or duplicating required by contractors for their own use in responding to the terms
of this contract.
* DEFINITION OF PRODUCTION UNIT. One sheet size, 8x10 /2" printed one side, one color only.
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Officer.
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44. AL` T RATIONS IN CON'T'RACT. The following alterations have been made
in the prov.iniona of Clam contract :
a. Clause 5, entitled "AssignmcnL of Claims" is deleted in its entirety
and the following is substituted in lieu thereof:
b. Under clause 6, "Examination of Records" the words "Comptroller General
of the United States or any of his duly authorized representatives"
are deleted wherever they appear therein and the following words
substituted therefor: "Appropriate Audit representative of the
Government."
c. Clause 12, "Renegotiation" is deleted in its entirety.
d. Clause 35, "Shipments" and Clause 36, "Government Bill of Lading" are
deleted in their entirety. Shipments shall be made as provided in the
Schedule of this Contract or as otherwise indicated by the Contracting
Officer or his authorized representative.
e. Clause 25, "Military Security Requirements" and in particular paragraphs
(c) (d) thereunder, shall be applicable only to the extent as authorized
by the security representative of the Contracting Officer.
f. Under Clause 4O, "Responsibilities of Supplies" the following paragraph
is added:
"At the time of each delivery under this contract the Contractor shall
prepare and furnish to the Government, in the manner and to the extent
required by the Contracting Officer, a Materiel Inspection and Receiving
Report (DD Form 250 or comparable form). The Government shall furnish
the required forms to the Contractor upon request".
g. Clause 41, "Acknowledgmr nt of Sponsorship" and Clause 13, "Restrictions
on Printing", are deleted in their entirety.
"Assigrunent of Claims": No assignment of claims shall be :nadc under
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