THIS CONTRACT IS ENTERED INTO AS OF MAY 15 1958, BETWEEN THE UNITED STATES OF AMERICA (HEREINAFTER CALLED THE GOVERNMENT) REPRESENTED BY THE CONTRACTING OFFICER EXECUTING THIS CONTRACT, AND (SANITIZED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-03424A002000080040-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 42
• Document Creation Date: December 22, 2016
• Document Release Date: September 20, 2011
• Sequence Number: 40
• Publication Date: January 1, 1958
• Content Type: REGULATION

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1DENTIAL
Contract No. I
This Contract is entered into as of_i .~.. , between the United States
of America (hereinafter call Officer
x ut this ntra It nd " 25X1
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WHEREAS, the Contractor maintains facilities for research and development,
and has available the services of qualified personnel; and,
,,51ER EAS, the Government desires the Contractor to conduct certain research
1
and development work, and construct or produce whatever supplies, equipment, or
reports may be hereinafter specified; and,
WHEREAS, the Contractor is willing to provide said facilities and qualified
personnel and undertake such work on a cost-plus-a-fixed-fee basis as hereinafter
specified;
NOW THEREFOR , in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
As used throughout this contract, the following terms shall have the meanings
set forth below:
(a) "Contracting Officer" means the person executing this Contract
on behalf of the Government and his successors in office.
(b) "Director" means the present Director of the Agency and his
successors in office.
(c) "Authorized Representative" means any person designated in
writing as such by the Contracting Officer or the Director, and any
such person can act hereunder only in the limited respects and to the
extent specified in provisions of this contract wherein the term
"Authorized Representative" is specifically used.
(d) "Clause" means the numbered Articles and unnumbered paragraphs
of this contract and Task Orders.
ARTICLE 2. SCOPE OF WORK.
The Contractor shall supply the necessary qualified personnel, facilities,
and materials, and shall use its best efforts to conduct the work specified in
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each Task Order issued to and accepted by the Contractor under this master contract
in accordance with the specifications, schedules, and drawings stated in said Task
Orders. The Contractor shall cooperate in consultation and otherwise as may be
practicable with the Contracting Officer or his authorized representative upon the
request of either. Technical Progress Reports, prepared in the manner normally
practiced by the Contractor, shall be furnished the Contracting Officer at such
intervals as may be indicated by the Task Order to which the report pertains. In
addition, the Contractor shall prepare and furnish specifications and/or drawings
on reproducible masters, and full information concerning the components, devices,
apparatus and methods as provided for under each Task Order or as otherwise agreed
to between the Contractor and the Contracting Officer or his authorized represen-
tative and shall deliver them, together with all models developed thereunder,
to the Contracting Officer or his authorized representative. The Contractor
shall maintain records in which descriptions and illustrations of any inventions
made in this work shall be entered as they are made, with appropriate dates,
signatures, and the names of witnesses.
ARTICLE 3. CHANGES.
The Contracting Officer may at any time, by a written order, and without
notice to sureties, if any, make changes, within the general scope of Task
Orders issued under this contract in any one or more of the following: (i)
drawings, designs, or specifications, where the supplies or equipment to be
furnished are to be specially developed or manufactured for the Government
in accordance therewith; (ii) method of shipment or packing; (iii) place of
delivery; and (iv) the amount of Government-furnished property. If any such
change causes an increase or decrease in the estimated cost of, or the time
required for, performance of the Task Order, or otherwise affects any other
provision of this contract or a Task Order hereunder, an equitable adjustment
shall be made (i) in the estimated cost or delivery schedule, or both, (ii)
in the amount of any fixed fee to be paid to the Contractor, and (iii) in such
other provisions of the contract or a Task Order as may be so affected, and
the contract or Task Order 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 a Task Order.
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 Task Order as changed.
ARTICLE 4+. LIMITATION OF COST.
(a) It is estimated that the total cost to the Government, exclusive
of any fixed fee, for the performance of any Task Order issued under this
contract will not exceed the estimated cost set forth in such Task Order,
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QNF1DENTIAL
and the Contractor agrees to use its best efforts to perform the work specified
in each Task Order and all obligations under this contract within such estimated
cost. If at any time the Contractor has reason to believe that the costs which
it expects to incur in the performance of any Task Order in the next succeeding
thirty (30) days, when added to all costs previously incurred, will exceed
eighty-five percent (85%) of the estimated cost then set forth in the Task Order,
or if at any time, the Contractor has reason to believe that the total cost to
the Government, exclusive of any fixed fee, for the performance of any Task
Order will be substantially greater or less than the then estimated cost thereof,
the Contractor shall notify the Contracting Officer in writing to that effect,
giving its revised estimate of such total cost for the performance of the Task
Order.
(b) The Government shall not be obligated to reimburse the Contractor
for costs incurred in excess of the estimated cost set forth in the Task
Order, and the Contractor shall not be obligated to continue performance
under the Task Order or to incur costs in excess of the estimated cost set
forth in the Task Order, unless and until the Contracting Officer shall
have notified the Contractor in writing that such estimated cost has been
increased and shall have specified in such notice a revised estimated cost
which shall thereupon constitute the estimated cost of performance of the
Task Order. When and to the extent that the estimated cost set forth in
the Task Order has been increased, any costs incurred by the Contractor
in excess of such estimated cost prior to the increase in estimated cost
shall be allowable to the same extent as if such costs had been incurred
after such increase in estimated cost.
SRTICLE 5. ALLOWABLE COST, FIXED FEE, AND PAYMENT.
(a) For the performance of each Task Order issued under this contract,
the Government shall pay to the Contractor the cost thereof determined by
the Contracting Officer to be allowable in accordance with Part 2 of Section
XV of the `,rmed Services Procurement Regulation as in effect on the date of
execution of said Task Order (hereinafter referred to as "Allowable Cost"),
plus such fixed fee, if any, as my be provided for in the Task Order.
(b) Once each month (or at more frequent intervals, if approved by
the Contracting Officer) the Contractor may submit to an authorized repre-
sentative of the Contracting Officer, in such form and reasonable detail
as such representative may require, an invoice or public voucher supported
by a statement of cost incurred by the Contractor in the performance of
a Task Order and claimed to constitute Allowable Cost.
(c) As promptly as may be practicable after receipt of each invoice or
voucher and statement of cost, the Government shall, except as hereinafter
provided and subject to the provisions of paragraph (d) below, make payment
thereon as approved by the Contracting Officer. There shall be withheld
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from payment on each invoice or voucher an amount of ten percent (10%) of the
cost reimbursement portion until a reserve of either ten percent (10%) of the
cost of a Task Order or Five Thousand Dollars ($5,000), whichever is less,
shall have been set aside, such reserve or balance thereof to be retained
until the Contractor shall have furnished to the Contracting Officer:
(i) The final and satisfactory report listing all Subject
Inventions as required by Article 18 (c) (iii).
(ii) Written disclosures for all Subject Inventions required
by Article 18 (c) (i) which are shown to be due in accordance with
interim reports delivered under Article 18 (c) (ii) or in accord-
ance with such final reports or are otherwise known to be unreported.
(iii) The information as to any subcontractor required by
Article 18 (g).
(iv) Satisfactory reports of royalties as required by Article
20 (a) or (b), provided that no amount shall continue to be with-
held from payment if the Contracting Officer shall find that the
Contractor has not been furnished a letter as required by Article
20 (c) within a reasonable time after making a written request to
submit a single, consolidated report under the provisions of
Article 20 (b).
(v) The satisfactory release discharging the Government as
required by Article 5 (e).
(vi) The final inventory of all Government property as re-
quired by Article 7 (i).
The withholding-of any amount or subsequent payment thereof to the Contractor
shall not be construed as a waiver of any right accruing to the Government
under the Task Order, nor shall this paragraph (c) be construed as requiring
the Contractor to withhold any amounts from a subcontractor to enforce com-
pliance with the patent provisions of a subcontract.
(d) At any time or times prior to final payment under any Task Order
of this contract the Contracting Officer may cause to be made such audit
of the invoices or vouchers and statements of cost as he shall deem neces-
sary. Each payment theretofore made shall be subject to reduction to the
extent of amounts included in the related invoice or voucher and statement
of cost which are found by the Contracting Officer on the basis of such
audit not to constitute Allowable Cost, and shall also be subject to reduc-
tion for overpayments or to increase for underpayments on preceding invoices
or vouchers. On receipt of the voucher or invoice designated by the Con-
tractor as the "completion voucher" or "completion invoice" and statement
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of cost, which shall be submitted by the Contractor as promptly as may be practicable
following completion of the work under a Task Order but in no event later than one
(1) year (or such longer period as the Contracting Officer may, in his discretion,
approve in writing) from the date of such completion, and following compliance by
the Contractor with all provisions of the Task Order and this contract (including,
without limitation, provisions relating to patents, royalties, and the provisions
of paragraphs (e) and (f) of this clause), the Government shall as promptly as may
be practicable pay any balance of Allowable Cost.
(e) The Contractor and each assignee, if any, under an assignment entered
into under this contract and in effect at the time of final payment under any
Task Order shall execute and deliver at the time of and as a condition precedent
to final payment under any Task Order, a release discharging the Government,
its officers, agents and employees of and from all liabilities, obligations,
and claims arising out of or under such Task Order, subject only to the follow-
ing exceptions:
(1) Specified claims in stated amounts or in estimated amounts
where the amounts are not susceptible of exact statement by the
Contractor.
(%) Claims, together with reasonable expenses incidental thereto,
based upon the liabilities of the Contractor to third parties arising
out of the performance of the Task Order, which are not known to the
Contractor on the date of the execution of the release, and of which
the Contractor gives notice in writing to the Contracting Officer not
more than six (6) years after the date of the release or the date of
any notice to the Contractor that the Government is prepared to make
final payment, whichever is earlier.
(3) Claims for reimbursement of costs (other than expenses of
the Contractor by reason of its indemnification of the Government
against patent liability), including reasonable expenses incidental
thereto, incurred by the Contractor under the provisions of the con-
tract relating to patents.
(f) The contractor agrees that any refunds, rebates or credits (including
any interest thereon) accruing to or received by the Contractor or any assignee
which arise out of the performance of any Task Order and on account of which the
Contractor has received reimbursement shall be paid by the Contractor to the
Government. The Contractor and each assignee, if any, under an assignment
entered into under this contract and in effect at the time of final payment under
any Task Order shall execute and deliver at the time of and as a condition
precedent to final payment under the Task Order, an assignment to the Government
of refunds, rebates or credits (including any interest thereon) arising out of
the performance of the Task Order, in form and substance satisfactory to the
Contracting Officer. Reasonable expenses incurred by the Contractor for the
purpose of securing any such refunds, rebates or credits shall constitute
Allowable Cost when approved by the Contracting Officer.
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(g) Any cost incurred by the Contractor under the terms of this contract
which would constitute Allowable Cost under the provisions of this clause
shall be included in determining the amount payable under the Task Order, not-
withstanding any provisions contained in the specifications or other documents
incorporated in the Task Order by reference, designating services to be per-
formed or materials to be furnished by the Contractor at its expense or with-
out cost to the Government.
(h) Payment of the fixed fee shall be made to the Contractor as provided
in the Task Order.
ARTICLE 6. RECORDS.
(a) (1) The Contractor agrees to maintain books, records, documents
and other evidence pertaining to the costs and expenses of any Task
Order issued under this contract (hereinafter collectively called the
"records") to the extent and in such detail as will properly reflect
all net costs, direct and indirect, of labor, materials, equipment,
supplies and services, and other costs and expenses of whatever nature
for which reimbursement is claimed under the provisions of the Task
Order and this contract. The Contractor's accounting procedures and
practices shall be subject to the approval of the Contracting Officer;
provided, however, that no material change will be required to be
made in the Contractor's accounting procedures and practices if they
conform to generally accepted accounting practices and if the costs
properly applicable to this contract are readily ascertainable there-
from.
(2) The Contractor agrees to make available at the office of
the Contractor at all reasonable times during the period set forth
in subparagraph (4) below any of the records for inspection, audit
or reproduction by the Comptroller of the contracting Government
Agency or his authorized representatives.
(3) In the event the Comptroller of the contracting Government
Agency or his authorized representative determines that his audit of
the amounts reimbursed under this contract as transportation charges
will be made at a place other than the office of the Contractor, the
Contractor agrees to deliver, with the reimbursement voucher covering
such charges or as may be otherwise specified within two years after
reimbursement of charges covered by any such voucher, to such represen-
tative as may be designated for that purpose through the Contracting
Officer such documentary evidence in support of transportation costs
as may be required by the Comptroller of the contracting Government
Agency or his authorized representatives.
(4) Except for documentary evidence delivered to the Government
pursuant to subparagraph (3) above, the Contractor shall preserve and
make available its records for a period of six years (unless a longer
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period of time is provided by applicable statute) from the date of the
voucher or invoice submitted by the Contractor after the completion of
the work under any Task Order and designated by the Contractor as the
"completion voucher" or "completion invoice" or, in the event a Task
Order under this contract has been completely terminated, from the date
of the termination settlement agreement; provided, however, that records
which relate to (A) appeals under the clause of this contract entitled
"Disputes", (B) litigation or the settlement of claims arising out of
the performance of a Task Order under this contract, or (C) costs or ex-
penses of a Task Order under this contract as to which exception has
been taken by the Comptroller of the contracting Government Agency or
his authorized representatives, shall be retained by the Contractor
until such appeals, litigation, claims or exceptions have been disposed
of, but in no event for less than the six year period mentioned above.
(5) Except for documentary evidence delivered pursuant to sub-
paragraph (3) above, and the records described in the proviso of sub-
paragraph (4) above, the Contractor may in fulfillment of its obligation
to retain its records as required by this clause substitute photographs,
microphotographs or other authentic reproductions of such records, after
the expiration of two years following the last day of the month of
reimbursement to the Contractor of the invoice or voucher to which such
records relate, unless a shorter period is authorized by the Contracting
Officer with the concurrence of the Comptroller of the contracting
Government Agency or his authorized representative.
(6) The provisions of this paragraph (a), including this subpara-
graph (6), shall be applicable to and included in each subcontract
hereunder which is on a cost, cost-plus-a-fixed-fee, time-and-material
or labor-hour basis.
(b) The Contractor further agrees to include in each of his subcontracts
hereunder, other than those set forth in subparagraph (a) (6) above, a provision
to the effect that the subcontractor agrees that the Comptroller of the contract-
ing Government Agency or his authorized representatives, shall, until the expira-
tion of three years after final payment under the subcontract, have access to
and the right to examine any directly pertinent books, documents, papers, and
records of such subcontractor involving transactions related to the subcontract.
The term "subcontract", as used in this paragraph (b) only, excludes (i) purchase
orders not exceeding 41,000 and (ii) subcontracts or purchase orders for public
utility services at rates established for uniform applicability to the general
public.
=.RTICIW 7. GOV^RIC ENT i'ROF1 TY.
(a) The Government shall deliver to the Contractor, for use in connection
with and under the terms of Task. Orders issued under this contract, the property
described in a Task Order or specifications, together with such related data and
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information as the Contractor may request and as may reasonably be required for the
intended use of such property (hereinafter referred to as "Government-furnished
Property"). The delivery or performance dates for the supplies or services to be
furnished by the Contractor under a Task Order are based upon the expectation
that Government-furnished Property suitable for use will be delivered to the Con-
tractor at the times stated in the Task Order 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 occasioned the Contractor
and shall equitably adjust the estimated cost, fixed fee, or delivery or performance
dates, or all of them, and any other contractual provisions affected by such delay,
in accordance with the procedures provided for in the clause of this contract
entitled "Changes". In the event that Government-furnished Property is received
by the Contractor in a condition not suitable for the intended use, the Contractor
shall, upon receipt thereof notify the Contracting Officer of such fact and, as
directed by the Contracting Officer, either (i) return such property at the
:overnment's expense or otherwise dispose of the property or (ii) effect repairs
or modifications. Upon completion of (i) or (ii) above, the Contracting Officer
upon written request of the Contractor shall equitably adjust the estimated
cost, fixed fee, or delivery or performance dates, or all of them, and any other
contractual provision affected by the return or disposition, or the repair 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) Title to all property furnished by the Government shall remain in the
Government. Title to all property purchased by the Contractor, for the cost of
which the Contractor is entitled to be reimbursed as a direct item of cost under
a Task Order, shall pass to and vest in the Government upon delivery of such
property by the vendor. Title to other property, the cost of which is reimbursable
to the Contractor under a Task Order shall pass to and vest in the Government
ipon (i) issuance for use of such property in the performance of a Task Order,
or (ii) commencement of processing or use of such property in the performance of a
Task Order, or (iii) reimbursement of the cost thereof by the Government, whichever
first occurs. All Government-furnished Property, together with all property
acquired by the Contractor, title to which vests in the Government under this para-
graph, are subject to the provisions of this clause and are hereinafter collective-
ly referred to as "Government Property."
(c) Title to the Government Property shall not be affected by the incorpora-
tion or attachment thereof to any property not owned by the Government, nor shall
such Government Property, or any part thereof, be or become a fixture or lose its
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identify as personalty by reason of affixation to any realty. The Contractor shall
maintain adequate property control records of the Government Property and shall
identify the Government Property as such in accordance with the requirements of the
"Manual for Control of Government Property in Possession of Contractors" (Appendix
B, Armed Services Procurement Regulation), as in effect on the date of the Task
Order, which Manual is hereby incorporated by reference and made a part of this
contract.
(d) The Government Property provided or furnished pursuant to the terms of
this contract and Task Orders issued hereunder shall, unless otherwise provided
herein, be used only for the performance of the Task Order for which the Govern-
ment Property has been provided or furnished.
(e) The Contractor shall maintain and administer, in accordance with sound
industrial practice, a program, for the maintenance, repair, protection and
preservation of Government Property so as to assure its full availability and
usefulness for the performance of the Task Order. The Contractor shall take all
reasonable steps to comply with all appropriate directions or instructions which
the Contracting Officer may prescribe as reasonably necessary for the protection
of Government Property.
(f) (i) The Contractor shall not be liable for any loss of or damage to the
Government Property, or for expenses incidental to such loss or damage, except
that the Contractor shall be responsible for any such loss or damage (including
expenses incidental thereto) (A) which results from willful misconduct or lack
of good faith on the part of any of the Contractor's directors or officers, or
on the part of any of its managers, superintendents, or other equivalent repre-
sentatives, who has supervision or direction of (I) all or substantially all of
the Contractor's business, or (II) all or substantially all of the Contractor's
operations at any one plant or separate location in which the Task Order is being
performed, or (III) a separate and complete major industrial operation in con-
nection with the performance of the Task Order:; or (B) which results from a
failure on the part of the Contractor, due to the willful misconduct or lack of
good faith on the part of any of its directors, officers, or other representa-
tives mentioned in subparagraph (A) above, (I) to maintain and administer, in
accordance with sound industrial practice, the program for maintenance, repair,
protection and preservation of Government Property as required by paragraph (e)
hereof, or (II) to take all reasonable steps to comply with any appropriate
written directions of the Contracting Officer under paragraph (e) hereof; or
(C) for which the Contractor is otherwise responsible under the express terms
of the clause or clauses designated in the Task Order; or (D) which results
from a risk expressly required to be insured under this contract, but only to
the extent of the insurance so required to be procured and maintained, or to
the extent of insurance actually procured and maintained, whichiever is greater;
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or (E) which results from a risk which is in fact covered by insurance of for which
the Contractor is otherwise reimbursed, but only to the extent of such insurance or
reimbursement; provided that, if more than one of the above exceptions shall be
applicable in any case, the Contractor's liability under any one exception shall
not be limited by any other exception. This clause shall not be construed as re-
lieving a subcontractor from liability for loss or destruction of or damage to
Government Property in its possession or control, except to the extent that the
subcontract, with the prior approval of the Contracting Officer, may provide for
the relief of the subcontractor from such liability. In the absence of such
approval, the subcontract shall contain appropriate provisions requiring the re-
turn 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.
(ii) The Contractor shall not be reimbursed for, and shall not include as an
item of overhead, the cost of insurance, or any provision for a reserve, covering
the risk of loss of or damage to the Government Property, except to the extent
that the Government may have required the Contractor to carry such insurance under
any other provision of this contract or a Task Order hereunder.
(iii) Upon the happening of loss or destruction of or damage to the Govern-
ment Property, the Contractor shall notify the Contracting Officer thereof, and
shall communicate with the Loss and Salvage Organization, if any, now or here-
after designated by the Contracting Officer, and with the assistance of the Loss
and Salvage Organization so designated (unless the Contracting Officer has desig-
nated that no such organization be employed), shall take all reasonable steps
to protect the Government Property from further damage, separate the damaged
and undamaged Government Property, put all the Government Property in the best
possible order, and furnish to the Contracting Officer a statement of (A) the
lost, destroyed and damaged Government Property, (B) the time and origin of the
loss, destruction or damage, (C) all known interests in commingled property
of which the Government Property is a part, and (D) the insurance, if any,
covering any part of or interest in such commingled property. The Contractor
shall make repairs and renovations of the damaged Government Property or take
such other action, as the Contracting Officer directs.
(iv) In the event the Contractor is indemnified, reimbursed, or otherwise
compensated for any loss or destruction of or damage to the Government Property,
it shall use the proceeds to repair, renovate or replace the Government Property
involved, or shall credit such proceeds against the cost of the work covered by
the Task Order, or shall otherwise reimburse the Government, as directed by the
Contracting Officer. The Contractor shall do nothing to prejudice the Govern-
ment's right to recover against third parties for any such loss, destruction or
damage and, upon the request of the Contracting Officer, shall, at the Govern-
ment's expense, furnish to the Government all reasonable assistance and coopera-
tion (including the prosecution of suit and the execution of instruments of
assignment in favor of the Government) in obtaining recovery. In addition,
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,. a
where the subcontractor has not been relieved from liability for any loss or destruc-
tion of or damage to Government Property, the Contractor shall enforce the liability
of the subcontractor for such loss or destruction of or damage to the Government
Property for the benefit of the Government.
(g) The Government shall at all reasonable times have access to the premises
where any of the Government Property is located.
(h) The Government Property shall remain in the possession of the Contractor
for such period of time as is required for the performance of the Task Order un-
less the Contracting Officer determines that the interests of the Government
require removal of such property. In such case the Contractor shall promptly
take such action as the Contracting Officer may direct with respect to the removal
and shipping of Government Property. In any such instance, the Task Order may be
amended to accomplish an equitable adjustment in the terms and provisions thereof.
(i) Uaon the completion of a Task Order, or at such earlier dates as may be
fixed by the Contracting Officer, the Contractor shall submit to the Contracting
Officer in a form acceptable to him, inventory schedules covering all items of
!;he Government Property not consumed in the performance of this contract, or not
theretofore delivered to the Government, and shall deliver or make such other
disposal of such Government Property as may be directed or authorized by the Con-
trac.tinC Officer. The net proceeds of any such disposal shall be credited to
the cost of the work covered by the Task Order or shall be paid in such manner
as the Contracting Officer may direct. The foregoing provisions shall apply to
,,--rap from Government Property provided, however, that the Contracting Officer
may authorize or direct the Contractor to omit from such inventory schedules
any scrap consisting of cutting and processing waste, such as chips , cuttings,
borings, turnings, short ends, circles, trimmings, clippings, and remnants, and
to ais osc of such scrap in accordance with the Contractor's normal practice and
account therefor as a part of general overhead or other reimbursable cost in
accordance with the Contractor's established accounting procedures.
(j) Unless otherwise provided herein, the Government shall not be under
any duty or obligation to restore or rehabilitate, or to pay the costs of the
restoration or rehabilitation of the Contractor's plant or any portion thereof
which is affected by the aemo?.~al of any Government Property.
(1_) Directions of the Contracting Officer and communications of the
Contractor issued pursuant to this clause shall be in mn iti_ng.
_>FTICI. 8. Iid~tTRLS1 k=-I.L II,IT TO THIRD PEMOICS.
(a) The Contractor shall procure and thereafter maintain workmen's compen-
sation, employer's liability, comprehensive general liability (bodily injury)
and comprehensive automobile liability (bodily injury and property damage) in-
s.u ance, with respect to performance under. Task Orders, and such other insurance
as the Contracting Officer may from time to time require with respect to
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performance under Task Orders; provided, that the Contractor in fulfillment of its
obligation to procure workmen's compensation insurance may, with the approval of
the Contracting Officer and pursuant to statutory authority, maintain a self-
insurance program. All insurance required pursuant to the provisions of this para-
graph shall be in such form, in such amounts, and for such periods of time, as
the Contracting Officer may from time to time require or approve, and with in-
surers approved by the Contracting Officer.
(b) The contractor agrees, to the extent and in the manner required by the
Contracting Officer, to submit for the approval of the Contracting Officer any
other insurance maintained by the Contractor in connection with the performance
of Task Orders and for which the Contractor seeks reimbursement thereunder.
(c) The Contractor shall be reimbursed: (i) for the portion allocable
to a Task Order of the reasonable cost of insurance as required or approved
pursuant to the provisions of this clause, and (ii) for liabilities to third
persons for loss of or damage to property (other than property (A) owned,
occupied or used by the Contractor or rented to the Contractor or (B) in the
care, custody, or control of the Contractor), or for death or bodily injury,
not compensated by insurance or otherwise, arising out of the performance of
Task Orders, whether or not caused by the negligence of the Contractor, its
agents, servants or employees, provided such liabilities are represented by
final judgments or by settlements approved in writing by the Government, and
expenses incidental to such liabilities, except liabilities (I) for which
the Contractor is otherwise responsible under express terms of the clause or
clauses, if any, specified in the Schedule or Task Order, or (II) with respect
to which the Contractor has failed to insure as required or maintain insurance
as approved by the Contracting Officer or (III) which results from willful
misconduct or lack of good faith on the part of any of the Contractor's
directors or officers, or on the part of any of its managers, superintendents,
or other equivalent representatives, who has supervision or direction of (1)
all or substantially all of the Contractor's business or (2) all or substan-
tially all of the Contractor's operations at any one plant or separate loca-
tion in which the Task Order is being performed, or (3) a separate and complete
major industrial operation in connection with the performance of the Task Order.
The foregoing shall not restrict the right of the Contractor to be reimbursed
for the cost of insurance maintained by the Contractor in connection with the
performance of the Task Order, other than insurance required to be submitted
fc2 approval or required to be procured and maintained pursuant to the provi-
sions of this clause, provided such cost would constitute Allowable Cost under
the clause of this contract entitled "Allowable Cost, Fixed Fee and Payment."
(d) The Contractor shall give the Government or its representatives
immediate notice of any suit or action filed, or prompt notice of any claim
made, against the Contractor arising out of the performance of a Task Order,
the cost and expense of which may be reimbursable to the Contractor under
the provisions of this contract, and the risk of which is then uninsured or
in which the amount claimed exceeds the amount of coverage. The Contractor
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shall furnish immediately to the Government copies of all pertinent papers received
by the Contractor. If the amount of the liability claimed exceeds the amount of
coverage, the Contractor shall authorize representatives of the Government to col-
laborate with counsel for the insurance carrier, if any, in settling or defending
such claim. If the liability is not insured or covered by bond, the Contractor
shall, if required by the Government, authorize representatives of the Government
to settle or defend any such claim and to represent the Contractor in or take
charge of any litigation in connection therewith: Provided, however, that the
Contractor may, at its own expense, be associated with the representative of the
Government in the settlement or defense of any such claim or litigation.
ARTICLE 9. SUPERSEDING SPECIFICATIONS.
All references in any Government specification incorporated herein to other
Government specifications shall be deemed to include all specifications supple-
mentary 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 noti-
fied of the existence of such supplementary or superseding specification at the
time of said quotation.
ARTICLE 10. SHIPMENTS.
(a) Mode of Shipment. Unless otherwise provided in a Task Order or unless
the Contracting Officer, acting under the "Changes" clause of this contract directs
otherwise in writing, all supplies or equipment to be furnished under a Task
Order shall be delivered to the Government F.O.B. destination at which such sup-
plies or equipment are to be finally inspected.
(b) F. Q. B. Destination. Whenever it is provided in a Task Order that
supplies or equipment shall be delivered F.O.B. specified destinations, such
items shall be shipped direct by the Contractor to the specified destinations
on commercial bills of lading.
(c) Shipping Instructions. If not specified in a Task Order, names of con-
signees of all supplies or equipment to be delivered by the Contractor hereunder
will be furnished to the Contractor in writing by the Contracting Officer at a
later date. Request therefor shall be made to the Contracting Officer not later
than thirty (30) days prior to the date on which any of the articles are ready
for shipment.
ARTICLE 11. DELAY IN DELIVERY OF DATA.
(a) It is understood that the efficient use by the Government of the
supplies or equipment called for under Task Orders requires that the data called
for thereunder be delivered not later than the time or respective times therein
specified. If such data are not delivered at said time or times, the Government
may, at its election, so long as such data remain undelivered, unless the delay
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in delivery thereof arises out of causes beyond the control and without the fault
or negligence of the Contractor within the meaning of the clause hereof entitled
"Excusable Delays", withhold payment to the Contractor for any of the amounts then
due, refuse approval of the Contractor's vouchers, refuse to accept further de-
liveries thereunder from the Contractor, or take any other action authorized by
law or regulation now in effect including termination of the Task Order for default
to the extent and in the manner authorized by the clause entitled "Termination" and
may take any or all of the foregoing actions separately or in combination.
(b) The provisions of section (a) of this clause shall be applicable nnl-v to
technical data, such as drawings, specifications, handbooks, service manuals , or
other information necessary for the proper maintenance or servicing of the end
items called for under a Task Order.
ARTICLE 12. INSPECTION AND CORRECTION OF DEFECTS.
(a) All supplies (which term throughout this clause includes without limita-
tion raw materials, components, intermediate assemblies, and end products) shall
be subject to inspection and test by the Government, to the extent practicable at
all times and places including the period of manufacture, and in any event prior
to final acceptance. The Contractor shall provide and maintain an inspection
system acceptable to the Government covering the supplies, fabricating methods,
and special tooling under Task Orders. The Government, through any authorized
representative may inspect the plant or plants of the Contractor or of any of its
subcontractors engaged in the performance of a Task Order. If any inspection
or test is made by the Government on the premises of the Contractor or a subcon-
tractor, the Contractor shall provide and shall require subcontractors to provide
all reasonable facilities and assistance for the safety and convenience of the
Government inspectors in the performance of their duties. All inspections and
tests by the Government shall be performed in such a manner as will not unduly
delay the work. Except as otherwise provided in this contract or a Task Order
hereunder, final acceptance of any supplies or lots of supplies shall be made as
promptly as practicable after delivery thereof and shall be deemed to have been
made no later than sixty (60) days after the date of such delivery, if final
acceptance has not been made earlier within such period.
(b) The Contractor warrants that the services rendered in the performance
of Task Orders under this contract will conform to the requirements thereof and
to high professional. standards in the field, and that any article delivered to
the Government under Task Orders under this contract will conform to the require-
ment thereof and will not be defective in material or workmanship.
(c) At any time during performance of a Task Order, but not later than
six (6) months (or such other period as may be provided in the Task Order)
after final acceptance of the supplies or lots of supplies last delivered in
accordance with the requirements thereof, the Government may require the Con-
tractor to remedy by correction or replacement, as directed by the Contracting
Officer, any supplies or lots of supplies which at the time of delivery there-
of are defective in material or workmanship or otherwise not in conformity
with the requirements of this contract and Task Orders thereunder. Except as
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otherwise provided in paragraph (d) hereof, the cost of any such replacement or
correction shall be included in Allowable Cost determined as provided in the
clause of this contract entitled "Allowable Cost, Fixed Fee and Payment", but
no additional fee shall be payable with respect thereto. Such supplies or lots
of supplies shall not be tendered again for acceptance unless the former tender
and the requirement of correction is disclosed. If the Contractor fails to
proceed with reasonable promptness to replace or correct such supplies or lots
of supplies, the Government (i) may by contract or otherwise replace or correct
such supplies and charge to the Contractor any increased cost occasioned the
Government thereby, or may reduce any fixed fee payable under a Task Order (or
require repayment of any fixed fee theretofore paid) or (ii) in the case of
supplies not delivered may require the delivery of such supplies, and shall
have the right to reduce any fixed fee payable (or to require repayment of any
fixed fee theretofore paid) in such amount as may be equitable under the cir-
cumstances, or (iii) may terminate the Task Order for default as provided in
the clause of this contract entitled "Termination". Failure to agree to the
amount of any such increased cost to be charged to the Contractor or to such
reduction in, or repayment of, the fixed fee shall be a dispute concerning a
question of fact within the meaning of the clause of this contract entitled
"Disputes".
(d) Notwithstanding the provisions of paragraph (c) hereof, the Govern-
ment may at any time require the correction or replacement by the Contractor,
without cost to the Government, of supplies or lots of supplies which are
defective in material or workmanship, or otherwise not in conformity with
the requirements of this contract or a Task Order hereunder, if such defects
or failures are due to fraud, lack of good faith or willful misconduct on
the part of any of the Contractor's directors or officers, or on the part
of any of its managers, superintendents, or other equivalent representatives,
who has supervision or direction of (i) all or substantially all of the
Contractor's business, or (ii) all or substantially all of the Contractor's
operations at any one plant or separate location in which the Task Order is
being performed, or (iii) a separate and complete major industrial operation
in connection with the performance of the Task Order. Fraud, lack of good
faith or willful misconduct on the part of any of such supervisory personnel
shall be deemed to include the selection of individual employees or the reten-
tion of employees after any of such supervisory personnel has reason to
believe that such employees are habitually careless or otherwise unqualified.
(e) Corrected supplies or replaced supplies shall be subject to the
provisions of this clause in the same manner and to the same extent as supplies
originally delivered under a Task Order of this contract.
(f) The contractor shall make its records of all inspection work avail-
able to the Government during the performance of Task Orders under this con-
tract and for such longer period as may be specified therein.
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(g) Except as provided in this clause and as may be provided in a Task
Order, the Contractor shall have no obligation or liability to correct or
replace supplies or lots of supplies which at the time of delivery are defec-
tive in material or workmanship or otherwise not in conformity with the
requirements of this contract or a Task Order hereunder.
(h) Except as otherwise provided in the Task Order, the Contractor's
obligation to correct or replace Government-furnished property (which is
property in the possession of or acquired directly by the Government and
delivered or otherwise made available to the contractor) shall be governed
by the provisions of the clause of this contract entitled "Government
Property."
ARTICLE 13. SUBCONTRACTS.
(a) The Contr actor shall give advance notification to the Contracting
Officer of any proposed subcontract hereunder which (i) is on a cost or
cost-plus-a-fixed-fee basis, or (ii) is on a fixed-price basis exceeding in
dollar amount either $25,000 or five percent (5%) of the total estimated
cost of a Task Order under this contract.
(b) The Contractor shall not, without the prior written consent of
the Contracting Officer, place any subcontract which (i) is on a cost or
cost-plus-a-fixed-fee basis, or (ii) is on a fixed rice basis exceeding
in dollar amount either $25,000 or five percent (5i) of the total esti-
mated cost of a Task Order under this contract, or (iii) provides for the
fabrication, purchase, rental, installation or other acquisition, of any
item of industrial facilities, or of special tooling having a value in
excess of $1,000, or (iv) is on a time-and-material or labor-hour basis.
The Contracting Officer may, in his discretion, ratify in writing any such
subcontract; such action shall constitute the consent of the Contracting
Officer as required by this paragraph (b).
(c) The Contractor agrees that no subcontract placed under a Task
Order under this contract shall provide for payment on a cost-plus-
percentage-of-cost basis.
(d) The Contracting Officer may, in his discretion, specifically
approve in writing any of the provisions of a subcontract. However, such
approval or the consent of the Contracting Officer obtained as required
by this clause shall not be construed to constitute a determination of the
allowability of any cost under a Task Order, unless such approval speci-
fically provides that it constitutes a determination of the allowability
of such cost.
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(e) The Contractor shall give the Contracting Officer immediate notice
in writing of any action or suit filed, and prompt notice of any claim made
against the Contractor by any subcontractor or vendor which, in the opinion
of the Contractor, may result in litigation, related in any way to this
contract and Task Orders thereunder with respect to which the Contractor may
be entitled to reimbursement from the Government.
(f) The Contractor shall obtain the written prior approval of the Con-
tracting Officer regarding the utilization of outside consultants in the per-
formance of Task Orders under this contract.
ARTICLE 14. UTILIZATION OF SMALL BUSINESS CONCERNS.
(a) It is the policy of the Government as declared by the Congress to
bring about the greatest utilization of small business concerns which is
consistent with efficient production.
(b) The Contractor agrees to accomplish the maximum amount of subcon-
tracting to small business concerns that the Contractor finds to be consis-
tent with the efficient performance of Task Orders under this contract.
ARTICLE 15. NOTICE AND ASSISTARCE REGARDING PATENT INFRINGEMENT.
The provisions of this clause shall be applicable only if the amount
of a Task Order under this contract is in excess of $5,000.
(a) The Contractor shall report to the Contracting Officer, promptly
and in reasonable written detail, each notice or claim of patent infringe-
ment based on the performance of a Task Order under this contract of which
the Contractor has knowledge.
(b) In the event of litigation against the Government on account of
any claim of patent infringement arising out of the performance of a Task
Order under this contract or out of the use of any supplies furnished or
work or services performed thereunder, the Contractor shall furnish to the
Government, upon request, all evidence and information in possession of the
Contractor pertaining to such litigation. Such evidence and information
shall be furnished at the expense of the Government except in those cases
in which the Contractor has agreed to indemnify the Government against the
claim being asserted.
ARTICLE 16. AUTE(1 RATION AND CONSENT.
The Government hereby gives its authorization and consent for all use
and manufacture of any patented invention in the performance of Task Orders
under this contract or any part thereof or any amendment thereto or any
subcontract thereunder (including any lower-tier subcontract).
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ARTICLE 17. FILING OF PATENT APPLICATIONS.
(a) Before filing or causing to be filed a patent application disclosing
any subject matter of this contract and Task Orders thereunder, which subject
matter is classified "Secret" or higher, the Contractor shall, citing the thirty
(3o) lay provision below, transmit the proposed application to the Contracting
Offer for determination whether, for reasons of national security, such appli-
cation 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 instructions 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 instruc-
tions within thirty (30) days from the date of mailing or other transmittal
of the proposed application, the Contractor may file the application.
(b) The Contractor shall furnish to the Contracting Officer, at the
time of or prior to the time when the Contractor files or causes to be
filed a patent application disclosing any subject matter of this contract
and Task Orders thereunder, 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 otherwise be 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.
ARTICLE 18. PATENT RIGHTS.
(a) As used in this clause, the following terms shall have the meanings
set forth below:
(i) The term "Subject Invention" means any invention,improvement,
or discovery (whether or not atentable) conceived or first actually
reduced to practice either (A) in the performance of the experimental,
developmental,, or research work called for or required under this con-
tract and Task Orders thereunder, or (B) in the performance of any
experimental, developmental, or research work relating to the subject
matter of this contract and Task Orders thereunder which was done
upon an understanding in writing that a contract would be awarded;
provided that the term "Subject Invention" shall not include any
invention which is specifically identified and listed in the Task
Order for the purpose of excluding it from the license granted by
this clause.
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(ii) The term "Technical Personnel" means any person employed by
or working under contract with the Contractor (other than a subcon-
tractor whose responsibilities with respect to rights accruing to the
Government in inventions arising under subcontracts are set forth in
paragraphs (f), (g), and (h) below) who, by reason of the nature of
his duties in connection with the performance of a Task Order, would
reasonably be expected to make inventions.
(iii) The terms "subcontract" and "subcontractor" mean any sub-
contract or subcontractor of the Contractor, and any lower-tier
subcontract or subcontractor under a Task Order.
(b) (1) The Contractor agrees to and does hereby grant to the Government
an irrevocable, nonexclusive, nontransferable, and royalty-free license to
practice, and cause to be practiced by or for the United States Government,
throughout the world, each Subject Invention in the manufacture, use and dis-
position according to law, of any article or material, and in the use of any
method. No license granted herein shall convey any right to the Government
to manufacture, have manufactured, or use any Subject Invention for the purpose
of providing services or supplies to the general public in competition with
the Contractor or the Contractor's commercial licensees in the licensed fields.
(2) With respect to:
(i) any subject Invention made by other than Technical Personnel;
(ii) any Subject Invention conceived prior to, but first actually
reduced to practice in the course of, any of the experimental, develop-
mental, or research work specified in (a) (i) above; and
(iii) the practice of any Subject Invention in foreign countries;
the obligation of the Contractor to grant a license as provided in (b)
(1) above, to convey title as provided in (d)(ii)(B) or (d)(iv) below,
and to convey foreign rights as provided in (e) below, shall be limited
to the extent of the Contractor's right to grant the same without in-
curring any obligation to pay royalties or other compensation to others
solely on account of said grant. Nothing contained in this Patent
Rights clause shall be deemed to grant any license under any invention
other than a Subject Invention.
(c) The Contractor shall furnish to the Contracting Officer the following
information and reports concerning Subject Inventions which reasonably appear
to be patentable:
(i) a written disclosure promptly after conception or first
actual reduction to practice of each such Invention together with
a written statement specifying whether or not a United States
patent application claiming the Invention has been or will be filed
by or on behalf of the Contractor;
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(ii) interim reports, at least every twelve months, commencing
with the date of this contract, each listing all such Inventions
conceived or first actually reduced to practice more than three months
prior to the date of the report, and not listed on a prior interim
report, or certifying that there are no such unreported Inventions;
and
(iii) prior to final settlement of a Task Order under this con-
tract, a final report listing all such Inventions including all those
previously listed in interim reports.
(d) In connection with each Subject Invention referred to in (c)(1) above,
the Contractor shall do the following:
(i) if the Contractor specifies that a United States patent
application claiming such Invention will be filed, the Contractor
shall file or cause to be filed such application in due form and
time; however, if the Contractor, after having specified that such
an application would be filed, decides not to file or cause to be
filed said application, the Contractor shall so notify the Contract-
ing Officer at the earliest practicable date and in any event not
later than eight months after first publication, public use or
sale.
(ii) if the Contractor specifies that a United States patent
application claiming such Invention has not been filed and will not
be filed (or having specified that such an application will be
filed thereafter notifies the Contracting Officer to the contrary),
the Contractor shall:
(A) inform the Contracting Officer in writing at the
earliest practicable date of any publication of such Inven-
tion made by or known to the Contractor or, where applicable,
of any contemplated publication by the Contractor, stating
the date and identity of such publication or contemplated
publication; and
(B) convey to the Government the Contractor's entire
right, title, and interest in such Invention by delivering
to the Contracting Officer upon written request such duly
executed instruments (prepared by the Government) of assign-
ment and application, and such other papers as are deemed
necessary to vest in the Government the Contractor's right,
title, and interest aforesaid, and the right to apply for
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and prosecute patent applications covering such Invention
throughout the world, subject, however, to the right of
the Contractor specified in (e) below to file foreign appli-
cations, and subject further to the reservation of a non-
exclusive and royalty-free license to the Contractor (and
to its existing and future associated and affiliated comi-
panies, if any, within the corporate structure of which the
Contractor is a part) which license shall be assignable to
the successor of that part of the Contractor's business
to which such Invention pertains;
(iii) the Contractor shall furnish promptly to the Contracting
Officer on request an irrevocable power of attorney to inspect and
make copies of each United States patent application filed by or on
behalf of the Contractor covering any such Invention;
(iv) In the event the Contractor, or those other than the
Government deriving rights from the Contractor, elects not to
continue prosecution of any such United States patent application
filed by or on behalf of the Contractor, the Contractor shall so
notify the Contracting Officer not less than sixty days before
the expiration of the response period and, upon written request,
deliver to the Contracting Officer such duly executed instruments
(prepared by the Government) as are deemed necessary to vest in
the Government the Contractor's entire right, title, and inte-
rest in such Invention and the application, subject to the reser-
vation as specified in (d)(ii) above; and
(v) the Contractor shall deliver to the Contracting Officer
duly executed instruments fully confirmatory of any license rights
herein agreed to be granted to the Government.
(e) The Contractor, or those other than the Government deriving rights
from the Contractor, shall have the exclusive rights to file applications on
Subject Inventions in each foreign country within:
(i) nine months from the date a corresponding United States
application is filed;
(ii) six months from the date permission is granted to file
foreign applications where such filing has been prohibited for
security reasons; or
(iii) such longer period as may be approved by the Contract-
ing Officer. The Contractor shall, upon written request of the
Contracting Officer, convey to the Government the Contractor's
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entire right, title, and interest in each Subject Invention in each
foreign country in which an application has not been filed within
the time above specified, subject to the reservation of a non-
exclusive and royalty-free license to the Contractor together with
the right of the Contractor to grant sublicenses, which license
and right shall be assignable to the successor of that part of the
Contractor's business to which the Subject Invention pertains.
(f) The Contractor shall exert all reasonable effort in negotiating for
the inclusion of this Patent Rights clause in any subcontract under a Task
Order of three thousand dollars ($3,000) or more having experimental, develop-
mental, or research work as one of its purposes. In the event of refusal by
a subcontractor to accept the Patent Rights clause, the Contractor shall not
proceed with the subcontract without written authorization of the Contracting
Officer, and upon obtaining such authorization, shall cooperate with the
Government in the negotiation with such subcontractor of an acceptable patent
rights clause; provided, however, that the Contractor shall in any event re-
quire the subcontractor to grant to the Government patent rights under
Subject Inventions of no less scope and on no less favorable terms than
those which the Contractor has under such subcontracts, except that in no
event shall the subcontractor be required to grant to the Government patent
rights in excess of those herein agreed to be granted to the Government by
the Contractor.
(g) The Contractor shall, at the earliest practicable date, notify the
Contracting Officer in writing of any subcontract containing a patent rights
clause, furnish the Contracting Officer a copy of such clause, and notify the
Contracting Officer when such subcontract is completed. It is understood that
with respect to such subcontract clause, the Government is a third party
beneficiary; and the Contractor hereby assigns to the Government all.rights
that the Contractor would have to enforce the subcontractor's obligations for
the benefit of the Government with respect to Subject Inventions. The Con-
tractor shall not be obligated to enforce the agreements of any subcontractor
hereunder relating to Subject Inventions.
(h) When the Contractor shows that it has been delayed in the performance
of a Task Order by reason of its inability to obtain in accordance with (f)
above a suitable patent rights clause from a qualified subcontractor for any
item or service required under a Task Order for which the Contractor itself does
not have available facilities or qualified personnel, the Contractor's delivery
dates shall be extended for a period of time equal to the duration of such delay;
and, upon request of the Contractor, the Contracting Officer shall determine to
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what extent, if any, an additional extension of the delivery dates and an increase
in contract prices based upon additional costs incurred by such delay are proper
under the circumstances; and the Task Order shall be modified accordingly. If
the Contractor, after exerting all reasonable effort, is unable to obtain a quali-
fied subcontractor as set forth above, the, Contractor may submit to the Contract-
ing Officer a written request for waiver or modification of the requirement that
a suitable patent rights clause be included in the subcontract. Such request
shall specifically state that the Contractor has used all reasonable effort to
obtain such qualified subcontractor, and shall cite the waiver or termination
provision hereinafter set forth. If, within thirty-five (35) days after the date
of receipt of such request for a waiver or modification of said requirement, the
Contracting Officer shall fail to deny in writing such request, the requirement
shall be deemed to have been waived by the Government. If within such period
the Contractor shall receive a written denial of such request by the Contracting
Officer, the Task Order shall thereupon automatically terminate and the rights
and obligations of the parties shall be governed by the provisions of the
clause of this contract providing for termination for the convenience of the
Government.
ARTICLE 19. RIGHTS IN DATA -- LIMITED.
(a) The term "Subject Data" as used herein includes writings, sound record-
ings, pictorial reproductions, drawings or other graphical representations, and
works of any similar nature (whether or not copyrighted) which are specified to
be delivered under Task Orders of this contract. The term does not include
financial reports, cost analyses and other information incidental to contract
administration.
(b) Subject Data delivered under a Task Order shall not be released outside
the Government, nor be duplicated, used, or disclosed in whole or in part for
procurement or manufacturing purposes (other than for manufacture required in
connection with repair or overhaul where an item is not procurable commercially
so as to enable the timely performance of the overhaul or repair work and pro-
vided that when Data is released by the Government to a contractor for such
pruposes, the release shall be made subject to the limitation of this clause
and provided further that such Data shall not be used for manufacture or procure-
ment of spare parts for stock), without permission of the Contractor, if: (i)
the Subject Data to be so limited is identified in the Task Order as being
subject to limitations; and (ii) the following legend is marked on each piece
of data so limited (In third blank of legend, identify portion or pages to which
legend is applicable):
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This is furnished under U. S. Government Contract No. ,
Task Order No. , and shall not be released outside
the Government except to foreign governments, subject to these same
limitations), nor be disclosed, used, or duplicated, for procurement
or manufacturing purposes, except as otherwise authorized by said con-
tract, without the permission of This legend shall
be marked on any reproduction hereof in whole or in part.
provided that such Data may be delivered to foreign governments as the national
interest of the United States may require, subject to the limitations specified
in this paragraph. The Contractor shall not impose limitations on the use of
any piece of Data, or any portion thereof, containing information first pro-
duced in the performance of a government contract.
(c) Notwithstanding any provisions of this contract or a Task Order con-
cerning inspection and acceptance, the Government shall have the right at any
time to modify, remove, obliterate or ignore any marking not authorized by the
terms of this contract or Task Order on any piece of Subject Data furnished
under a Task Order, subject to the right of the Contractor to appeal under the
"Disputes" clause from the decision of the Contracting Officer.
(d) Subject to the proviso in (e) below, the Government may duplicate,
use, and disclose in any manner and for any purpose whatsoever, and have
others so do, all Subject Data not covered by (b) above which is delivered
under a Task Order.
(e) 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, non-exclusive and irrevocable license
throughout the world, to publish, translate, reproduce, deliver, perform,
dispose of, and to authorize others so to do, all Subject Data now or here-
after covered by copyright; provided that with respect to such Subject Data
not originated in the performance of a Task Order under this contract but
which is incorporated in the work furnished under a Task Order such license
shall be only to the extent that the Contractor, its employees, or any indi-
vidual or concern specifically employed or assigned by the Contractor to
originate and prepare such Data under a Task Order, now has, or prior to com-
pletion or final settlement of Task Order may acquire, the right to grant
such license without becoming liable to pay compensation to others solely
because of such grant.
(f) The Contractor shall exert all reasonable effort to advise the Con-
tracting Officer, at the time of delivery of the Subject Data furnished under
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k~V ..1 JAR ~..n
a Task Order, of all invasions of the right of privacy contained therein and
of all portions of such Data copied from work not coanposed or produced in
the performance of a Task Order and not licensed under this clause.
(g) The Contractor shall report to the Contracting Officer, promptly and
in reasonable written detail, each notice or claim of copyright infringement
received by the Contractor with respect to all Subject Data delivered under a
Task Order.
(h) Nothing contained in this clause shall imply a license to the Govern-
ment under any patent or be construed as affecting the scope of any license or
other right otherwise granted to the Government under any patent. Nothing
contained in this clause shall be construed as prohibiting the Government from
manufacturing, or having manufactured for it by or procuring from others than
the Contractor, that which is shown in or by such Data, so long as the Data,
or a copy in whole or in part, to which the limitation in (b) above applies,
is not used in such manufacture or procurement.
ARTICLE 20. REPORTING OF ROYALTIES.
The provisions of this clause shall be applicable only if the amount of a
Task Order is in excess of $50,000.
(a) The Contractor shall report satisfactorily in writing (in quadrupli-
cate) to the Contracting Officer as soon as practicable after execution of a
Task Order under this contract whether or not any royalties in excess of $250
have been paid or are to be paid by the Contractor directly to any person or
firm in connection with the performance of the Task Order. If royalties in
excess of $250 have been paid or are to be paid to any person or firm, the
report shall include the following items of information with respect to such
royalties (including the initial $250):
(1) The name and address of each licensor to whom royalties
in excess of $250 have been paid or are to be paid,
(2) The patent numbers, patent application serial numbers
(with filing dates), or other identification of the basis for
such royalties,
(3) The manner of computing the royalties consisting of (i)
a brief identification of each royalty-bearing unit or process,
(ii) the total amount of royalties, and (iii) the percentage rate
or dollars and cents amount of royalties on each such unit or
process; provided that if the royalties cannot be computed in
terms of units or dollars and cents value, then other data show-
ing the manner in which the Contractor computes the royalties.
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(b) In lieu of furnishing a report under paragraph (a), the Contractor
may furnish a single, consolidated report for each accounting period of
the Contractor during which the Contractor has contracts with the Government,
provided the Contractor has requested and obtained the prior written approval
of the Contracting Officer. A satisfactory consolidated report shall be fur-
nished, when the furnishing thereof has been approved, in the number of copies
as approved, as soon as practicable after the close of the accounting period
covered by the report. Such consolidated report shall be made in accordance
with Contractor's established accounting practice and shall include, for the
accounting period, the total amount of royalties accruing to each licensor
at a rate in excess of $1,000 per annum on the Contractor's over-all business,
together with (i) the name and address of each such licensor, (ii) the patent
numbers, patent application serial numbers (with filing dates), or other
identification of the basis for such royalties, (iii) a brief description
of the subject matter of the license under which royalties are charged, (iv)
the percentage rate or unit amount, or if the royalties do not accrue by
rate or unit amount, such other data showing the manner by which the royal-
ties accrue to licensor, and (v) an estimate or approximation (without
detailed accounting) of the portion of such royalties that may be attribut-
able to Government contracts.
(c) In the event that the Contractor requests written approval to fur-
nish consolidated reports under paragraph (b) above, the Contracting Officer
shall promptly consider the request and furnish to the Contractor a letter
stating whether or not the request is approved and, notwithstanding any
such approval, the Contracting Officer shall have the right to question any
such subsequently furnished report as to accuracy or completeness of data
and to ask for additional information.
ARTICLE 21. ASSIGIVENT OF RIGHTS.
No assignment of any of the Contractor's rights under this contract or
Task Orders hereunder may be made, and the Assignment of Claims Act of 1940
as amended (31 U.S. Code 203, 41 U.S. Code 15) shall not be invoked by the
Contractor.
ARTICLE 22. EXCUSABLE DELAYS.
(a) The Contractor shall not be in default by reason of any failure in
performance of Task Orders under this contract in accordance with the terms
thereof (including any failure by the Contractor to make progress in the
prosecution of the work thereunder which endangers such performance) if such
failure arises out of causes beyond the control and without the fault or
negligence of the Contractor. Such causes include, but are not restricted
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to: acts of God or of the public enemy; acts of the Government; fires; floods;
epidemics; quarantine restrictions; strikes; freight embargoes; unusually
severe weather; and failure of subcontractors to perform or make progress due
to such causes, unless the Contracting Officer shall have determined that the
supplies or services to be furnished under the subcontract were obtainable
from other sources and shall have ordered the Contractor in writing to procure
such services or supplies from such other sources, and the Contractor shall
have failed reasonably to comply with such order. Upon request of the Con-
tractor, the Contracting Officer shall ascertain the facts and extent of such
failure and, if he shall determine that such failure was occasioned by any
one or more of the said causes, the delivery schedule shall be revised accord-
ingly subject to the rights of the Government under the clause hereof entitled
"Termination".
(b) If the Contractor becomes unable to complete the contract work
and make delivery at the time specified in the Schedule because of technical
difficulties, notwithstanding the exercise of good faith and diligent efforts
in the performance of the work called for hereunder, it may give the Con-
tracting Officer written notice of the anticipated default with reasons there-
for. Such notice and reasons shall be delivered not less than forty-five
(45) days before the completion date specified in the Schedule or within such
time as the Contracting Officer deems sufficient. If such notice is duly
given, then to the extent the interest of the Government makes an extension
desirable the Contracting Officer may, in his discretion, extend the period
of time specified in the Schedule for such period as he deems advisable, and
this contract shall then be modified in writing accordingly.
ARTICLE 23. BUY AMERICAN ACT.
The Contractor agrees that there will be delivered under Task Orders
under this contract only such unmanufactured articles, materials and supplies
(which term "articles, materials and supplies" is hereinafter referred to in
this paragraph as "supplies") as have been mined or produced in the United
States, and only such manufactured supplies as have been manufactured in the
United States substantially all from supplies mined, produced, or manufactured,
as the case may be, in the United States. Pursuant to the Buy American Act
(41 U. S. Code lOa-d), the foregoing provision shall not apply (i) with
res ect to supplies excepted by the Director from the application of that Act,
(ii) with respect to supplies for use outside the United States, or (iii) with
respect to the supplies to be delivered under Task Orders which are of a
class or kind determined by the Director or his duly authorized representative
not to be mined, produced, or manufactured, as available commercial quantities
and of a satisfactory quality, or (iv) with respect to such supplies, from
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which the supplies to be delivered under a Task Order are manufactured, as are of
a class or kind determined by the Director or his duly authorized representative
not to be mined, produced, or manufactured, as the case may be, in the United
States in sufficient and reasonably available commercial quantities and of a satis-
factory quality: Provided, that this exception (iv) shall not permit delivery of
supplies manufactured outside the United States if such supplies are manufactured
in the United States in sufficient and reasonably available commercial quantities
and of a satisfactory quality.
ARTICLE 24. EIGHT HOUR LAW OF 1912.
This contract and Task Orders hereunder, to the extent that is of a character
specified in the Eight-Hour Law of 1912 as amended (40 U.S. Code 324-326) and is
not covered by the Walsh-Healey Public Contracts Act (41 U.S. Code 35-45), is
subject to the following provisions and exceptions of said Eight-Hour Law of 1912
as amended, and to all other provisions and exceptions of said Law:
No laborer or mechanic doing any part of the work contemplated by this con-
tract, in the employ of the Contractor or any subcontractor contracting for any
part of the said work, shall be required or permitted to work more than eight
hours in any one calendar day upon such work, except upon the condition that
compensation is paid to such laborer or mechanic in accordance with the provi-
sions of this clause. The wages of every such laborer and mechanic employed by
the Contractor or any subcontractor engaged in the performance of this contract
shall be computed on a basic day rate of eight hours per day and work in excess
of eight hours per day is permitted only upon the condition that every such
laborer and mechanic shall be compensated for all hours worked in excess of
eight hours per day at not less than one and one-half times the basic rate of
pay. For each violation of the requirements of this clause a penalty of five
dollars shall be imposed upon the Contractor for each such laborer or mechanic
for every calendar day in which such employee is required or permitted to labor
more than eight hours upon said work without receiving compensation cczrputed
in accordance with this clause; and all penalties thus imposed shall be with-
held for the use and benefit of the Government.
ARTICLE 25. NONDISCRIMINATION IN E1PLOY1NT.
(a) In connection with the performance of work under Task Orders under
this contract, the Contractor agrees not to discriminate against any employee
or applicant for employment because of race, religion, color, or national
origin. The aforesaid provision shall include, but not be limited to, the
following: employment, upgrading, demotion, or transfer; recruitment or
recruitment advertising; lay-off or termination; rates of pay or other forms
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of compensation; and selection for training, including apprenticeship. The con-
tractor agrees to post hereafter in conspicuous places, available for employees
and applicants for employment, notices to be provided by the Contracting Officer
setting forth the provisions of the nondiscrimination clause.
(b) The Contractor further agrees to insert the foregoing provision in all
subcontracts under Task Orders hereunder, except subcontracts for standard com-
mercial supplies or raw materials.
ARTICLE 26. CONVICT LABOR.
In connection with the performance of work under Task Orders under this
contract, the Contractor agrees not to employ any person undergoing sentence
of imprisonment at hard labor.
ARTICLE 27. NOTICE TO THE GOVERNMENT OF LABOR DISPUTES.
Whenever the Contractor has knowledge that any actual or potential labor
dispute is delaying or threatens to delay the timely performance of Task Orders
under this contract, the Contractor shall immediately give notice thereof, in-
cluding all relevant information with respect thereto, to the Contracting
Officer.
ARTICLE 28. WALSH-HEALEY PUBLIC CONTRACTS ACT.
If a Task Order under this contract is for the manufacture or furnishing of
materials, supplies, articles or equipment in an amount which exceeds or may
exceed $10,000 and is otherwise subject to the Walsh-Healey Public Contracts Act
as amended (41 U.S. Code 35-45), there are hereby incorporated by reference all
representations and stipulations required by said Act and regulations issued
thereunder by the Secretary of Labor, such representations and stipulations be-
ing subject to all applicable rulings and interpretations of the Secretary of
Labor which are now or may hereafter be in effect.
ARTICLE 29. COVENANT AGAINST CONTINGENT FEES.
The Contractor warrants that no person or selling agency has been or will
be employed or retained to solicit or secure this contract or Task Orders
thereunder upon an agreement or understanding for a commission, percentage,
brokerage, or contingent fee, except bona fide employees or bona fide estab-
lished commercial or selling agencies maintained by the Contractor for the pur-
pose of securing business. For breach or violation of this warranty the
Government shall have the right to annul this contract and Task Orders there-
under without liability or in its discretion to deduct from the contract price
or consideration the full amount of such commission, percentage, brokerage, or
contingent fee.
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ARTICIE 30. OFFICIALS NOT TO BENEFIT.
No member of or delegate to Congress or resident commissioner, shall be ad-
mitted to any share or part of this'contract and Task Orders hereunder, or to
any benefit that may arise therefrom; but this provision shall not be construed
to extend to-this contract and Task Orders hereunder if made with a corporation
for its general benefit.
ARTICLE 31. GRATUITIES.
(a) The Government may, by written notice to the Contractor, terminate the
right of the Contractor to proceed under this contract and Task Orders hereunder
if it is found, after notice and hearing, by the Director or his duly authorized
representative, that gratuities (in the form of entertainment, gifts, or other-
wise) 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 Director or his duly authorized representative makes such findings
shall be in issue and. may be reviewed in any competent court.
(b) In the event a Task Order under 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 Director or his duly authorized representative) which
shall be not less than 3 nor more than 10 times the costs incurred by the Con-
tractor 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.
ARTICLE 32. DISPUTES.
Except as otherwise provided in this contract, any dispute concerning a
question of fact arising under this contract or Task Orders hereunder which is
not disposed of by agreement shall be decided by the Contracting Officer, who
shall reduce his decision to writing and mail or otherwise furnish a copy
thereof to the Contractor. Within 30 days from the date of receipt of such
copy, the Contractor may appeal by mailing or otherwise furnishing to the Con-
tracting Officer a written appeal addressed to the Director, and the decision
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of the Director or his duly authorized representative for the hearing of such
appeals shall, unless determined by.a court, of competent jurisdictipn to have
been fraudulent or capricious or arbitrary or so grossly erroneous as neces-
sarily '-o imply bad faith, or not supported by substantial evidence, be final
and conclusive; provided that, if no such appeal is taken, the decision of
the Contracting Officer shall be final and conclusive. In connection with
any appeal proceeding under this,clause, the Contractor shall, be afforded an
opportunity to be heard and to offer evidence in support of its appeal. Pend-
ing final decision of a dispute hereunder, the Contractor shall proceed
diligently with the performance of the Task Order and in accordance with the
Contracting Officer's decision.
ARTICLE 33. SECURITY-
(a) Disclosure of Information. It is understood that disclosure of
information relating to the wor contracted for hereunder, to any person
not entitled to receive it, or failure to safeguard all Secret and Confi-
dential matter that may come to the Contractor or any person under his
control in connection with the work contracted for hereunder, may subject
the Contractor, his agents, employees and subcontractors to criminal lia-
bility under the laws of the United States (18 U.S. Code 793, 794, 798).
The provisions of the "Security Requirements for Contractors" and of the
"Contractor's Security Agreement", copies of which have been furnished to
the Contractor, are incorporated herein by reference.
(b) Subcontractors. The Contractor, when it is deemed necessary to
disclose classified information to a subcontractor to accomplish the pur-
poses of this contract and Task Orders hereunder, will request permission
of the Contracting Officer prior to such disclosure. Upon the granting of
permission, the Contractor shall cause to be inserted in all subcontracts
under Task Orders under this contract a provision similar to (a) above.
(c) Aliens. Except with the prior written consent of the Director or
his duly authorized representative, the Contractor shall not permit any
alien to have access to classified security information.
ARTICLE 34. TERMINATION.
The performance of work under Tza~sk Orders under this contract may be
terminated by the Government in whole or from time to time in part by
giving the Contractor notice in writing. Upon receipt of such notice from
the Government, the Contractor shall exercise all reasonable diligence to
cbtain the cancellation of its outstanding commitments thereunder running
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WS-WeUu
beyond such termination date. The Contractor may be reimbursed for reasonable
termination charges. APPENDIX I, entitled "Termination", is hereby made a part
of this agreement by reference and attachment hereto and its detailed provisions
shall govern this contract and Task Orders hereunder.
ARTICLE 35. ALTERATIONS.
The following alterations and/or additions were made in the provisions of
this contract prior to signature.
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Contract No.6"
SCHEDULE
Each article in this schedule has been numbered to correspond with the
article in the contract which it implements.
A. ARTICLE 2. SCOPE OF SUBJECT WORK. The work to be performed under
this contract shall be set forth in Task Orders as issued from time to time
and said Task Orders shall be for work and services for which the Contractor
has submitted proposals. In the event a Task Order issued hereunder is not
considered acceptable by the Contractor, the Contractor shall advise the
Contracting Officer as to the objections thereto within fourteen (14) days
after receipt of the Task Order or at a later time, if requested by the Con-
tractor and approved by the Contracting Officer. When applicable, the Con-
tracting Officer will advise the Contractor in the Task Orders or elsewhere
in -writing of priority ratings established for the Task Orders and such
priority or priorities may be revised by the Contracting Officer in accord-
ance with the best interests of the Government.
B. ARTICLE 4, LIMITATION OF COST. The estimated cost of the perform-
ance of any Task Order issued hereunder will. be set forth in the said Task
Order.
C. ARTICLE 5. ALLOWABLE COST, FIXED FEE, AND PAYMENT.
(1) The fixed fee applicable to each Task Order issued hereunder
shall be computed at percent (I) of the estimated cost
authorized by the said asp Order and shall be stated therein. No addi-
tional fixed fee in excess of the amount initially established in the Task
Order shall be paid the Contractor unless authorized by a written supple-
ment to the Task Order increasing the scope of performance and the amount
of the fixed fee to be paid thereunder. For the purpose of accomplishing
progress payments on the fixed fee each billing for allowable costs shall
have added thereto a sum equal to percent (,) of the
amount billed subject to the proves ons o title 5(c) of the contract.
(2) In determining the cost of performing the Task Orders pursuant
to the provisions of rticle 5 of the Contract, it is understood and
agreed without limiting the generality of'Part 2, Section XV, Armed Services
Procurement Regulation that the allowable costs of the performance of this
contract shall include the necessary cost of the direct items described in
subparagraphs (a) through (d) below, when incurred by the Contractor and
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accepted as such costs by the Government. Furthermore there shall be allowed an
amount for overhead and general administrative expenses determined in accordance
with the following stipulations:
Overhead. The amount of indirect charges allowable under this contract
shall be determined by applying negotiated rates to agreed upon bases as speci-
fied below:
i. The rates and bases used hereunder shall be the result of
negotiations between the Contractor and the Government upon the
basis of the actual cost experience of the Contractor for the period
covered. As soon as possible but not later than 90 days after the
expiration of each overhead period to be recognized herein, the Con-
tractor shall submit to the Contracting Officer a proposed final
overhead rate or rates for that period, together with supporting
cost data. When the results of such negotiations in connection with
another contract between the Contractor and the Government are avail-
able, such results may be adopted for use in this contract by
agreement of the parties hereto. The Contractor agrees to inform
the Contracting Officer promptly of such results and to make the
following certification with respect thereto:
"I certify that no item of costs claimed as a
direct charge under the terms of this contract
has been included as an element of expense in
establishing the accompanying overhead rates."
If such results are unavailable, or if agreement cannot be reached
as to their use in this contract, the parties hereto agree to nego-
tiate to determine rates and bases for special application to this
contract. In the latter event, the Contractor agrees to make avail-
able to the Contracting Officer all pertinent cost records and to
facilitate any audit of such records which may be required by the
Contracting Officer. Ordinarily the Contractor's customary account-
ing periods and cost centers shall be used in the allocation of
indirect costs hereunder, but other periods and centers may be
used upon agreement of the parties.
ii. Allowability of costs and acceptability of cost allocation
methods shall be determined in accordance with Armed Services Procure-
ment Regulation, Section XV, Part 2, as in effect on the date of this
contract.
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Sl,lji i
forth immediately below and shall be considered to be in lieu
of the actual costs of such transportation. Subsistence ex-
penses of employees of the Contractor while in travel status
shall be as set forth immediately below. All travel for
which reimbursement will be claimed hereunder shall be autho-
rized in advance by the Contracting Officer. In the event
time will not permit the Contractor to obtain advance approval,
the travel must be ratified by the Contracting Officer prior
to claiming the travel as an item of cost.
follows :
Subsistence expenses shall be as follows:
(c) Such other items not expressly excluded by other
provisions of the contract, as should, in the opinion of
the Contracting Officer, be included in the cost of the
work called for in this contract. Any such item shall be
specifically certified by the Contracting Officer as being
allowed under this subsection.
(d) The Contractor shall obtain the approval of the
Contracting Officer for (i) purchasing any item of capital
equipment at a cost of $500.00 or more, (ii) making any
building alteration at a cost of $500.00 or more, (iii)
constructing buildings, or (iv) leasing real property,
,r the cost of any portion or all of which reimbursement
will be claimed as a direct cost hereunder. For each of
the above mentioned acquisitions, the Contractor shall
obtain three bids and refer same together with the Con-
tractor's recommendations, to the Contracting Officer for
approval. In the event multiple bids are not obtainable,
an explanation of the reason therefor shall be furnished
to the Contracting Officer.
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RD TASK
January 1958
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ILLEGIB
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IN WITNESS WHEREOF, the parties hereto have executed this contract as
of the day and year first above written.
THIS UNITED STATES OF AMICA
TITLE Contracting Officer
TITLE/ ~,j
, certify that I an the
of the corporation named as Contractor herein; that
who signed this contract on behalf of the Contractor was then
t ; ;?-" "L,C.,. 17, fV /,), of said corporation; that sail
contract was duly signed
for and in behalf of said corporation by authority of its governing body, and
is within the scope of its corporate powers.
(Corporate Seal)
ILLEGIB
25X1
25X1
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'7 Ilv MI MY A
(a) Tim performance of work under the contract may be terminated by the
Government in. accordance with this cleuee in wee, or from time to time in
yart, (1) whenever the Contractor shall deta 1t. in performance of tb" ocultrlact
in accordance with its term (including in the term "default"" any such failure
by the Contractor to make ]progress in the prosecution of the work hereunder as
endangers such performance), and shall fail to cure such default within a
period of ten days (or such longer period as the Contracting officer may allot,)
after receipt from the Contracting Officer of a notice specifying the default,
or (2) whenever for any reason the Contracting Officer shall deternine that
such termination is in the best interests of the Goverment. Any such termi-
nation shall be effected by delivery to the Contractor of a Notice of Termination
specifying whether teztion is for the default of the Contractor or for the
convenience of the ootrersaarnt, the extent to which performance of Vork under
the contract is terminated, and the date upon which such termination becomes
effective. If, after not;ti of termiii tion of this contract for default ' under
(1) above, it is daternimet that the C atbr 's failure to perform or to
males progress in perforrss-me is due to eamees beyond the control and without
the fault or negligenr?e of the Contractor pearewant to the provisions of the
clause of this contract relating to ext able delays, the Notice of Termination.
shall be deemed to have been issued under (g) abcye, and the rights and
obligations of the parties hereto shs11 in such event be governed accordingly.
(b) After receipt of a Notice of Termination and except as otherwise
directed by the Contracting Officer, the Contractor 6bell (1) stay wdrk under
the contract on the date and to the extent specified in the Notice of Termiinatidn
(2) place no further orders or subscontracte for materials, services, ear facili-
ties except as may be necessary for completion of such portion of the work under
the contract as is not terminated; (3) teminate all orders and subcontract[' to
the extent that they relate to the porfoisance of work terminated by the Notice of
Termination; (4) assign to the Government, in the manner and to the extent directed
by the Contracting Officer, all of the right, title, and interest of tl^,e CetatraCtor
under the orders or subcontracts so ter ted.;' in which case the Government shall
have the right, in its discretion, to settle or pair any or all claims arising out of
the, termination of such orders and subcontracts; (5) with the approval or rat-
ification, of the contracting Officer, to the extent he ,y require, which approval
or ratification shall be final and conclusive for all purposes of this clause,
settle all outstanding liabilities and isaffi arising out of such termination
of orders and subcontracts, the cost of which would be reimbursable, in whole "O'ff'
in part, in accordance with the provisions of this' contract:; (6) traner title
(so the extent that title has not already been transferred) and, in the spanner,
to the extent, and at the times directed by the Contracting Officer, deliver
to the Government (i) the fabricated or =fabricated parts, work in proofs,
completed work, supplies and other material produced as a part of, or acquired
{n respect of the performance of, the work teag4nated by the Notice of Term-
(For Fixed-Fee con-tracts)
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'ination, (ii) the completed or partially completed plans, drawings, infor-.4
mation, and other property which, if the contract bad been completed, troUl.d
be required to be furnished to the Government, and (iii)'the sage, dies, and
fixtures, and other special tools and tooling acquired or manufactured for
the performance of this contract for the cost of which the Contractor has
been or will be reimbursed under this contract; (7) use. its best efforts
to sell in the manner, at the times, to the extent, and at the price
or prices directed or authorized by the Contracting Officer, any property of
the types referred to in.provision (6) of this paragraph, prov,ded, however,
that the Contractor (i) shall not be required to extend credit to any purelaa4er,
and (ii) may acquire any such property under the conditions proscribed by and
at a price or prices 'approved by the ContractingOtficer;-and provided further
that the proceeds of any such transfer or'disposition shall be.,ayplied in
reduction of any payments to be made by the Goxeinslert 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; (8) complete performance of such part of the work as shall not have
been terminated by the Notice of'Termination; and (9) take such action as may
be necessary,'or as the Contracting Officer may direct, for the protection awl
preservation of the property related to.this contract which is in the possession
of the Contractor and in which the Government has or may acquire an interest.
The Contractor shall proceed immediately with the performance of.the above
obligations notwithstanding any delay in det'ernining or adjusting the amount
of the. fixed-fee, or any item of reimbursable, cost, under this clause. At. 'any
time after expiration of the plant clearance. period, as defined in Section Vill$
Armed Services Procurement Regulation, as it may be amended from time to time,
the'Contractor may submit to the contracting officer a' list,. certified as to
quantity and quality, of any or all items of termination inventory.aot-pre-
viously:disposed of, exclusive of items-the disposition of. which has been
directed or authorized by the Contracting : Officer, and may request the,Govern-
ment 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 a storage agreement covering the
same, provided.tkiat 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 I necessary
adjustment to.correct the list as submitted shall be made prior to final
settlement.
. (c) After receipt of a Notice of Termina'tion,.the Contractor shall submit
to the Contracting Officer.its termination claim in the form and with the
certification prescribed by the Contracting Officer. Such claim shall be
submitted promptly but in no event later than two years'from the effective date
of termination, unless one or more extensions in writing are granted by the
CONFIDENTIAL
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CON FT77T
Contracting Officer upon request of the Contractor made in writing within such
two-year period or authorized extension thereof. However, if the Contracting
Officer determines that the facts justify such action, he may receive and act
upon any such termination claim at any time after such two-year period or any
extension thereof. Upon failure of the Contractor to submit its termination
claim within the time allowed, the Contracting Officer may determine, on the
basis of information available to him, the amount, if any, due to the Contractor
by reason of the termination and shall thereupon pay to the Contractor the amount
so determined.
(d) Subject to the provisions of paragraph (c), the Contractor and the
Contracting Officer may agree upon the whole or any part of the amount or
amounts to be paid (including an allowance for the fixed-fee) to the Contractor
by reason of the total or partial termination of work pursuant to this clause.
The contract shall be amended accordingly, and the Contractor shall be paid the
agreed amount.
(e) In the event of the failure of the Contractor and the Contracting
Officer to agree in whole or in part, as provided in paragraph (d) above, as
co the amounts with respect to costs and fixed-fee, or as to the amount of the
fixed-fee, to be paid to the Contractor in connection with the termination of
work pursuant to this clause, the Contracting Officer shall determine, on the
basis of information available to him, the amount, if any, due to the Contractor
by reason of the termination and shall pay to the Contractor the amount deter-
mined as follows:
(1) If the settlement includes cost and fixed-fee
(i) There shall be included therein all costs and expenses reimbursable
in accordance with this contract, not previously paid to the Contractor for the
performance of this contract prior to the effective date of the Notice of
Termination, and such of these costs as may continue for a reasonable the
thereafter with the approval of or as directed by the Contracting Officer,
provided, however, that the Contractor shall proceed as rapidly as practicable
to discontinue such costs.
(ii) There shall be included therein so far as not included under (t) above,
the cost of settling and paying clams arising out of the termination of work
under subcontracts or orders, as provided in paragraph (b) (5) above, which are
properly chargeable to the terminated portion of the contract.
(iii) There shall be included therein 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
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y ' E NTIAL
subcontracts thereunder, together with reasonable storage, transportatio ty.
other coots incurred in connection with the protection or disposition of ter-
mination inventory; provided, however, that If the'teraination is for default
oX the Contractor there shall not be included any amounts for the . preparation
of the Conts-ctor?s settlement proposal.
(iv) Zbere shall be included therein a portion of the. fixed-fee pab,e
under t$ a tract determined as follows-
the event of the termination of this contract for the convenience
of the Government and not for the default of the Contractor, there.shall be paid
a percentage of the fee equivalent to the percentage of the completion of work
contemplated by the contract, less fixed-fee payments previously made hereunder.
(B) In the event of the termination of this contract for the default of
the Contractor, the total fixed-fee payable shall be such proportionate part
of the fee (or, If this contract calls for articles of different types, of
ch part of the fee as is reasonably allocable to the type of article under
consideration) as the total number of articles delivered to and accepted by
the Government bears to the total number of articles of a like kind called for
by this contract.
If the amount determined under this paragraph is less than the total
payment of fixed-fee theretofore made to the Contractor, the Contractor shall
repay to the Government the excess amount.
(2) If the settlement includes only the fixed-fee, the amount thereof
will be determined in accordance with subparagraph (e)(1) (iv) above.
(f) The Contractor shall have the right of appeal, under the clause of
this contract entitled "Disputes," from any determination made by-the Con-
tracting Officer under paragraphs (c) or (e) above, except that if the
Contractor has failed to submit its claim within the time provided in paragraph
',) above and has failed to request extension of such time, he shall have no
_ach right of appeal. In any case where the Contracting Officer has made a
determination of the amount due' under paragraph (c) or (e) above, the Government
shall pay to the Contractor the following: (I) if there is no right of appeal
hereunder or if no timely appeal has been taken, the amount so determined by
the Contracting Officer, or (ii) if an appeal has been taken, the amount
finally determined on such appeal
(g) in arriving at the amount due the Contractor under this clause there
shall be deducted (1) all unliquidated advance or other unliquidated payments
theretofore made to the Contractor, (2) any claim which the Goverment may have
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VCUMI
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CO NH D ENT I A L
0,gab3.nst the Contractor in connection with this contract, and (3) the agreed
price for, or the proceeds of sale of, any materials, supplies, or other
things acquired by the contractor or sold pursuant to the provisions of this
clause and not otherwise recovered by or credited to the Government
(h) In the event of a partial termination, the portion of the fixed-fee
which is payable with respect to the work under the continued portion of the
contract shall be equitably
and such adjustment shall be evidenced by an Contractor
the Contracting Officer, amend-
meat to this contract.
(i) The Government may from time to time, under u account e and conditions
as it may prescribe, make partial payments and payments on costs incurred by the Contractor in connection with the terminated portion of
the contract whenever in the opinion of the Contracting Officer the aggregate
of such payments shall be within the amount to which the Contractor will be
entitled hereunder. If the total of such payments is in excess of the amount
4inally determined to be due under this clause, such excess shall be payable
y the Contractor to the Government upon demand, together with interest
computed at the rate of 6% 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 termination inventory
until ten days after the date of such retention or disposition.
(i) The provisions of this clause relating to the fixed-fee all bfeee
inapplicable if this contract does not provide for payment of a (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 six years after final settlement under this contract, shall preserve and make
available to the Government at all reasonable times at the office of the Con-
tractor, but without direct charge to the Government, all its books, records,
'ocuments, and other evidence bearing on the cost and expenses of the Contractor
alder this contract dcoOfthe fic~rkphterminated hereunder, o ~r~aphs, micro-photographs, the
graphs, or
extent approved by the Contracting
other authentic reproductions thereof,
(For Fixed-Fee Contracts)
VASi6'wRI&-
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