CERTIFICATE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81B00879R001100010023-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 46
• Document Creation Date: December 27, 2016
• Document Release Date: September 19, 2012
• Sequence Number: 23
• Publication Date: April 18, 1958
• Content Type: CONT

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'lore SECRET Nome
Contract No.
(PP300) 25X1
CERTIFICATE
I ,_
, certify that
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I am the.
of the
Corporation named
as Contractor
who
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herein;
signed this contract on behalf of the Contractor was then
of said Corporation; that said con-
tract was duly signed for and in behalf of said Corporation by
authority of its governing body, and is within the scope of its Cor-
porate powers.
SECRET
(Corporate Seal)
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INDEX OF GENERAL PROVISIONS
1, DEFINITIONS 6 1
2, CHANGES ?
/t) LIMITATION 01, COST
ALLOWABLE COST, FIXED FEE, AND PAYMENT 2
3
INSPECTION AND CORRECTION OF DheECTS ? 5
6, ASSIGNMENT OF CLAIMS v.eo40,0**041 7
7, RECORDS OOOOOOOOOOOO 0110, 0000000 OOOOO 0-0e00000,4140;00 7
0
00 SUBCONTRACTS 06 OOOOOOO 441004,00.0000000400020000 OOOOOOO 400(, 9
9* UTILIZATION OF SMALL BUSINESS commn.......?...?..jo
10, TERMINATION .4.00.0..???? 10
11, EXCUSABLE DELAYS ?.........0.0..0.015
12, DISPUTES....0.0....... OOOOOOOOOOOOOOOOOOOOO
13. NOTICE AND ASSISTANCE REGARDING PATENT INFRINGEMENT,
14. BUY AMERICAN ACT 17
15, CONVICT LABOR 0..0.0017
16, EIGHT?HOUR LAW OF 19120.00..0 OOOOO OOOOOOOOO 0. OOOOO 0...017
17? NONDISCRIMINATION IN EMPLOYMENT . 18
18, OFFICIALS NOT TO BENEFIT - 19
191?, COVENANT AChINST CONTINGENT FEES,?, OO OOOOOOOOO ornoesol9
2,?., PATENT RIGHT3? OOOO Qrsoseeciiceol9
GOVERNMENT MOPERTY 24
22. INSURANCE?IIAEILITY TO THIRD PERSONS......00..........029
, 23, AUTHORIZATIOA. AND CONSENT? 30
FILING OF PATENT APPLICATIONS OOOOOOO 0... OOOOOOOOO 31
,./00,25. REPORTING OF ROYALTIES????,? OOOOOOOOO ? OOOOOO .....0031
/ ?26; RIGHTS IN DATA?UNLIMITEDw. OOOOOOOOO ?eget:0m ? 33
27, MILITARY SECURITY REQUIREMENTSo* 00000010600Q0 OOOOOOOOO *434
28. WALSE,BEALEY PUBLIC CONTRACTS
29, GRATUITIES., 36
30, NEGOTIATED OVERHEAD RATES.. 00..0.0.00 OO OOOO ? OOOO 36
31? DELAY IN DELIVERY OF DATA ...00, OOO OOOO OOOOOOOOO woo,37
32, SUPERSEDING SPECIFICATIONS ???epoorno?oe OOOOOOOOOOOO co.c,a37
33* FLIGHT RISK.000.... OOOOOOOO 0000000000 00038
34, ALTERATIONS 39
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GENERAL PROVISIONS
I, DEFINITIONS (ASPR 7-103.1 AFPI 7-40341)
As used throughout this contradt, the following terms shall
have the meanings set forth below:
(a) The term 'Secretary" means the Secretary, the Under
Seoretary, or any Assistant Secretary of the Department and the
he .1 or aey assistant head of the executive agency; and the term
dr: n authorized repreEeatative" means any person or persons
or board (other than the Contracting Officer) authorized to act
for the Secretary.
(b) The term "Contracting Officer" means the person executing
t'er_s contract on behalf of the Government, and any ot'eor officer
or civilian employee Yho is a pnenerly Jcsienated C 1..acting
Officer; and the tern includes e'ceept ea ot.-eenwfne -ovided in
this contract, the aeLhorized representative of a Gentracting
Officer acting within the Units of his authority.
(c) Except as otherwiee provided in this contract, the tern
"subcontracts" inclnd,s purchase orders under this contract.
(d) (AFPI 7-3Le 2) The term "contract work" means all work
to bo nerformed unde.e this contract including any studies covering
fundamental, theoretical, or experimental investigations; any
extesion of the invenAgative findings and theeries of a
ee-entific or technical nature into practical application; any
-Le nle items, hereinafter referred to as "supplies," furnished
to the Government; and any reports, data, computations, plans,
drawings, and specifications with respect to any of the foregoing.
2. CHANGES (AFPI 7-403.2)
The Contracting Officer may at any time by a written order, make
changes in or additions to the drawings and specificatiors, issue
adcional instructions, require additional work within the general scope
oZ ene eontract, or change the place of delivery, method of shipment,
oI the eeount of Government-Furnished property. If any such change
causes an increase or decrease in the estimated cost of, or the time
recu!red for performance of this contract, or otherwise affects any
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(0RPF Apr. 18, 158)
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ot'eer provision of this contract, an equitable adjustment shall be
le (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
kill) in such other provisions of the, contract as may bo so affected,
and the contract shall be modified in writing accordingly. Any claim
by the Contractor for adjustment under this clause must be assertdd
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 facta justify such action, may receive
and act upon any such claim asserted at any time prior to final payment
under this contract. Failure to agree to any adjustment shall be a
dispute concerning a question of fact within the meaning of the clause
of this contract entitled "Disputes.v Hover, nothing in this clause
shall excuse the Contractor from proceeding with the contract as
changed,
LIMITATION OF COST (ASPR 7-203.3 AFFI 7-403.3)
(a) It is estimated that the total cost to the Government,
exclusive of any fixed fee, for the performance of this contract will
not exceed the estimated cost set forth in the Schedule, and the
Contractor agrees to use its best efforts to perform the work specified
in the Schedule and all obligations under this contract within such
estimated cost. If at any time the Contractor has reason to bdieve
thlt the costs which it expects to incur in the performance of this
cottraLe in the next succeeding thirty (30) days, when added to all
costs previously ineu.ned, will exceed eighty-five percent (85%) of the
eetimated cost then set forth in the Schedule, or if at any time, the
Cc ?;rector has reason to believe that the total cost to the Government,
e. _Waive of any fixed fee, for the performance of this contract will
1- substantially greater or less than the then estimated cost thereof, the
Centraotor shall notify the Contracting Officer in writing to that
effect, giving its revised estimate of such total cost for the
performance of this contract,
(b) The Government shall not be obligated to reimburse the
Contractor for costs incurred in excess of the estimated cost set
forth in the Schedule and the Contractor shall not be obligated to
continue performance under the contract or to incur costs in excess of
the estimated cost set forth in the Schedule, unless and until the
Contracting Officer shall have notified the Contractor in writing that
such estimated cost has been increased and shall have specified in such
notice a revised estimated cost which shall thereupon constitute the
estimated cost of performance of this contract. When and to the
(IFF Apr. 18, '58)
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extent that the estimated cost set forth in the Schedule has been
increased, any cost incurred by the Contractor in excess of such
estimated cost prior to the increase in estitIlated cost shall be
allewable to the same extent as if such cests had been incurred
ae:ter such increase in estimated cost,
ALLOHAPLE COST, FIXED FEE, AND PAYLENT 7-203.4 Am 7-403.4)
(a) For the performance of this contract, the Government shall
I- r to the Contractor the cost thereof determined by the Contracting
ficer to be allowable in accordance with Part 2 of Section XV of
the Armed Services Procurement Regulation as in effect on the date
of this contract and the Schedule (hereinafter referred to as "Allow-
able Cest"), plus such fixed fee, if any, as may be provided for in
the Schedule.
? (b) Once each month ?(or at more frequent intervals, if approved
by the Contracting Officer) the Contractor may submit to an authorized
representative of the Contracting Officer, in such form and reasonable
detail as such representative may require, an invoice or public voucher
supported by a statement of cost incurred by the Contractor in the
performance of this contract and claimed to constitute Allowable Cost.
Each statement of cost shall be certified by an officer or other
responsible official of the Contractor authorized by it to certify
suil.h statement.
(c) As promptly as may be practicable after receipt of each
invoice or voucher and statement of cost, the:Government shall, except
as hereinafter provided and subject to the provisions of paragraph (d)
below, make payment thereon as approlNd by the Contracting Officer.
After payment of eighty-five percent: (5%) of the fixed fee set forth
in the Schedule, as from time to time amended, further payment on
aceount of the fixed fee shall be withheld until a reserve of either
(i) fifteen percent (15%) of the total fixed fee or (ii) 810C,00n,
whichever amount is less, shall have been set aside, such reserve or
the balance thereof to be retained until the execution and delivery
of a release by the Contractor as provided in paragraph (e) hereof.
(d) At any time or timeaprior to final payment under this contract
the Contracting Officer may cause to be made such audit of the invoices
or vouchers and statements of cost as-shall be deemed necessary 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 reduction for
(CPFF Apr.. 18, t58)
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"Nor
Noe weir'
overpayment or to increase for underpayments on preceding invoices
or vouchers. On receipt of the voucher or invoice designated by the
Contractor as the "completion voucher" or "Completion invoice" and
statement of cost, which shall be submitted by the Contractor as
promptly as may be practicable following cempletion of the work under
this contract but in no event later than one (1) year (or such longer
7erioci as the Contracting Officer may, in his discretion, approve in
writ=,=f) from the date of such completion, and following compliance
by the Contractor with all provisions of this contract (including,
without limitation, provisions relating to patents 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) Th a Contractor and each assignee under an assignment
entered into under this contract --nd in effect ut th6.ticaof_final
payment under this contract shall execute and deliver at the tine of
and as a condition precedent to final payment under this contract, a
rele Je? di aarging the 3over- ent, its officers, agents and employees
of a-,C from all liabilities, Oeligations and claims arising out of or
uncle- this contract, subject only to the following exceptions:
(1) Specified claims in stated amounts or in estimated
amounts where the amounts are not susceptible of
exact statement by the Contractor.
(2) Claims, together with reasonable expenses inciden-
tal thereto, based upon the liabilities of the
Contractee to third parties arising out of the per-
formance of the contract, which are not known to the
Contractor on the date of the execution of the
release, and of which the Contractor gives notice
in writing to the Contracting Officer not more than
six (6) years after the date of the release or the
date of any notice to the Contractor that the
Government is prepared to make final payment, which-
ever is earlier.
( 3)
Claims for reimbursement of costs (other than
expenses of the Contractor by reason of its indem-
nification of the Government against patent liabil-
ity), including reasonable expenses incidental
thereto, incurred by the Contractoreunder the
provisions of the contract relating to patents.
(f) The Contractor agrees that any refunds, rebates or credits
(including any interest thereon) accruing to or received by the
(CPIT Apr. 180 T58)
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C atractor or any assignee which arise out of the performance of this
aentract and on account of which the Contractor has received reimburSe.i
ent shall be paid by the Contractor to the Government. The Contractor
and each assignee under an assignment entertd into under this contract
awl in effect at the time of final payment under this contract shall
eaecuto and deliver at the time of and as a cendition precedent to
Lnal payment under this contract, an assignment to the Government of
refunds, rebates or credits (including any interest thereon) arising out
of the performance of this contract, 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.
(g) Any cost incurred by the Contractor under the terms of this
contract which would constitute Allowable Cost under the provisions of
this clause shall be included in determinfng the amount puable under
this contract, notwithstanding any provisions contained in the specifi-
cation, or other documents incorporated in this contract by reference,
Lesignating services to be performed or materials to be furnished by
the Contractor at Its expense or without cost to the Government.
(h) Payment of the fixed fee shall be made to the Contractor as
provided in the ScIledule subject, however, to the withholding provisions
of paragraph (c) hereof.
5. INSPECTION AND CORILECTION OF DEFECTS (AFPI 7-403.5)
(a) All work ender this contract shall be subject to inspection
o .d test by the Government, to the extent practicable at all reasonable
.I.mes and places including the period of performance, and in any event
prior to final acceptance. The Contractor shall provide and maintain
an inspection system acceptable to the Government covering the work
hereunder. The Government, through any authorized representative, may
inspect the plant or plants of the Contractor or of any of its subcon
tractors engaged in the perfcivnce of this contract. If any inspetorc
or test is made by the Government on the premise of the Contractor or a
subcontractor, the Contractor shall provide and shall require sub eon-
tractors 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. Final
inspection and acceptance by the Government shall be made as promptly as
practicable after delivery. The time and place of 'alivery, final
inspection, and acceptance shall be as set forth in the Schedule,,
(b) The Contractor warrants that the services rendered in the
performance of this contract will conform to the requirements of this
contract and to hfgh professional standards in the field and that any
article delivered to the Government under this contract will conform
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(CPIT Apr. lap 158)
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to the requirements of this contract and will not be defective in material
or workmnnship.
(c) At any time during perfornance of this contract, but not later
than six (6) nonths (or such other period as nay be provld,d in the
echedule) after final acceptance, the Government may require the Contractor
to ready by correction or replacement as directed by tho Contracting
Office, any failure by the Contractor to comply with its obligations under
paragraph (b) hereof. Except as otherwise provided in paragraph (d) here?
of, the cost of any such replacement or correction shall be included in
"Allowable Cost" determined as provided in the clause of this contract
entitled "Allowable Cost, Fixed Fee and Payment," but no additional fee
shall be payable with respect thereto. Corrected articles shall not be
tendered again for acceptance unless the former tender and the require?
ment of correction is disclosed. If the Contractor fails to proceed with
reason-ele promptness to perform such replacement or correction, the
Ceverlo lent (1) nay by contract cr otherwise perform such replacement or and charge to the Contractor any increased cost occasioned
the Gcn'ernment thereby, or may reduce any fixed fee payable under this
contra,. (or require repayment of any fixed fee theretofore paid) in such
amount as may be equitable under the circumstances; or (ii) in the case
of articles not delivered nay require the dolly ry of such articles and
shall have the right to reduce any fixed foe payable under this cnntract
(or to require repaymeno of any fixed fee theretofore paid) in such
amount Ls may be equitabLJ under the circumstances; or (iii) may terminate
this contract for default as provided in the clause of this contract
entitled "Termination." Failure to agree on the amount of any such
increased cost to be char:d to the Contractor or to such reduction in)
or repa:nlent of, the fixed fee shall be a dispute concerning a question
of fact within the -leaning of the clause of this contract entitled
"Disputes
(d) Notwithstanding the provisions of paragraph (c) hereof, tha
Government nay at any tile req*ire the contractor to remedy by correction
or replacement, without cost to the Government, any faiLare by the
Contractor to comply with its obligations under paragraph (b) hereof,
if such failure is due to fraud, lack of good faith, or willful mis?
conduct on the part of any of the contractor's directors or officers, or
on the part of any of 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 substan?
tially all of the Contractor's operations at any one plant or separate
location in which this contract is being performed; or (iii) a separate
and comp :to major industrial operation in connection with the porform?
taco on this contract, Fraud, lack of good faith, or willful misconduct
-la the pert of any of such supervisry personnel sh,J1 be doomed to
laclude the selection of individual employees or the retention of employees
after any of such supervisory personnel has renson to believe that such
.iployee: are habitually careless or otherwise unqualifiedQ,
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(CIDEFApr, 18, '58)
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(e) Corrected articles tendered as replacements shall be subject to
the provisions of this clause in the sane manner and to the same extent
supplies originally delivered under this Contract
(f) The Contractor shall make its records of all inspection work
available to the Government during the performance of this contract and
for such longer periods as may be specified in this contract.
(g) Except as provided in this clause and as may be provided in the
Schedule, the Contractor shall have no obligation or liability to correct
or replace supplies or lots of supplies which at the time of delivery are
refect_'e in materials or workmanship or otherwise not in conformity with
the requirements of this contract,
18SIGNMaT OF CLAMS (ASPR 7-103.8 AFPI 7-403,6)
(a) Pursuant to the provisions of the Assignment of Claims Act of
040 as amended (31 U.S. Code 203, 41 U.S. Code 15), if this contract
orovides for payments aggregating .1,000 or more, claims for monies due
Jr to bemne due the Contractor from the Government under this contract
may be assigned to a bank, trust company, or other financing institution,
ancluding any Federal Lending agency, and may thereafter be further
assigned and reassigned to any such institution. Any such assignment or
reassignment shall cover all amounts payable under this contract and not
already paid, and shall noL be made to more than one party, except that
lily such assignment or reao3jgnment may be made to one party as agent or
trustee .or two or more perties participating in such financing. Not?
.1_thstaa-ling any provision of this contract, payments to an assignee of
nly monies due or to become due under this contract shall not, to the
)Ktent provided in said Act as amended, be subject to reduction or set?off?
(b) In no event shall copies of this contract or of any plans,
pecifications, or other similar documents relating to work under this
ontract, if marked "Top Secret", "Secret", or "Confidential", be
'unaished to any assignee of any claim arising under this contract or
114 any other poison not entitled to receive the same; provided, That
copy of any part or all of this contract so marked may be furnished,
any information contained therein may be disclosed, to such assignee
,00n the prior written authorization of the Contracting Officer.
ECORDS (aSPR 7-203,7 AFPI 7-403,7)
(a)(1) The Contractor agrees to maintain books, records, documents
ad other evidence pertaining to the costs and expenses of this contract
nereinafter collectively called the "records") to the extent and in such
)tail as will properly reflect all net costs, direct and indirect of
Joor, materials, equipment, supplies and services, and other costs
'JETT Apr. 18, '58)
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and expenoes of whatever nature for which reimbUrsement is claimed under
the provisions of this contract. The Contractor's accounting procedures
and practices shall be subject to the approval of the Contracting Officer;
provided, hogoVer, that no material change will be required to be made
in th, Contractorls accounting procedute4 a4d practices if they conform
to generally accepted accounting practices and if the costs properly
applicable to this contract are readily ascertainable therefrom.
(2) The Contractor agrees to malcb available at the office of the
Contractor at all reasonable tines during the period set forth in sub-
paragraph (4) below any of the records fdr inspection, audit or repro-
ducti)n by an authorized representative of the Contracting Officer*
(3) In the event the Contracting Officer or any of his duly authorized
repreeentatives determines that his audit of the amounts reimbursed under
this contract as transportation charges uiill be made at a place other
than the office of the Contractor, the Contractor agrees to deliver, with
the reillbursenent voucher covering such charges or as may be otherwise
PIDocifed within two years after reimbursement of charges covered by any
such -oucher, to such representative as may be designated for that
purpohe through the Contracting Officer such documentary evidence in
support of transportation costs as nay be required by the Contracting
Officer or any of his duly 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
period of bine is provid(d by applicable statute) from the date of the
voucher or invoice submitted by the Contractor after the completion of
the work under the contract and designated by the Contractor as the
"completion voucher" or "completion invoice" or, in the event this con-
tract has boon completely terminated, from the date of the termination
settlement agreement; provided, however, the records which relate to
GPI appeals under the clause of this contract entitled "Disputes",
Nue (13) litigation or the settlement of claims arising out of the performance
of this contract, or (C) costs or expenses of the contract as to
which exception has boon taken by the Contracting Officer or any of his
duly authorized representatives, shall be retained by the Contractor
until such appeals, litigation, claims, or exceptions have boon disposed
of, but in no event for less than the six-year period mentioned above.
(5) Except for documentary evidence delivered pursuant to sub-
paragraT)h (3) above, and the records described in the proviso of sub-
paragraph (4) above, the Contractor nay in fulfillment of its
obligation to retain its records as required by this clause substitute
photographs, microphotographs or other authentic reproductions of such
record a,. after the expiration of two years following the last day of
the a ,Ith of rc,i-abliv8oflont o the Contractor of the invoice or voucher
8-.
(CPFlo Apr. 180 758)
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to which such records relate, unless a shorter period is authorized by
the Contracting Officer with the conaurtence of the Comptroller of the
Contracting Government Agency or his authorized representatives.
(6) The provisions of thiSparagraph (a), including this sub-
paragraph (6), shall be applicable *W-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 sub-
contracts hereunder, other than those set forth in subparagraph (a)
((a) above, a provision to the effect that the subcontractor agrees that
the Contracting Officer or any of his duly authorized representatives,
shall, until the expiration of three years after final payment under
the subcontract, have access to and the right to exaldne any directly
pertinent books, documents, papers, and records of such subcontractor
involving transactions related to the subcontract. The term "sub-
contract," as used in this paragraph (b) only excludes (i) purchaTe
orders not exceeding '1.00100 and (ii) subcontracts or purchase orders
fc:: public utility services at rates established for uniform applic-
ability to the general public.
SUBCONTRACTS (ASPR 7-203.8 AFPI 7-403.8)
(a) The Contra,tor shall give advance notification to the Con-
traoting Officer of a'y proposed subcontract hereunder which (i) is
on a cost or cost-pl'as-a-fixed-fee basin, or (ii) is on a fixed-price
basis exceeding in dollar amount either '.2.5,000 or five percent (5%)
of the total estimated cost of this contract.
(b) The Contractor shall not, without the prior written consent
of the Contracting Officer, place any subcontract which (i) is on a
co-_t or cost-plus-a-fixed-fee basis, or (ii) is on a fixed-price basis
exceeding in dollar amount either ',2.5,000 or five percent (5%) of the
total estimated cost of this contract, or (iii) provides for the
fabrication, purchase, rental, installation or other acquisition, of
any item of 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
Lapis, or (v) involves research and development work. The Contracting
Officer may, in his discretion, ratify in writing any such subcontract;
such action shall constitute the consent of the Contracting Officer as
required by this paragraph (b).
(c) The Contractor agrees that no subcontract placed under this
contract shall provide for payment on a cost-plus-a-percentage-of-cost
basis.
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(CPFF Apr, 18, 158)
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Nati Nwe
(d) The Contracting Officer may, in his discretion, specifically
approve in writing any of the provisions of a sUbcentract. However,
such approval or the consent of the Contracting Officer obtained aS
required by this clause shall not be construed to constitute a deter-
nination of the allowability of any coat under this contract) Unless
such approval specifically provides that it constitutes a determination
of the allowability of such cost.
(e) The Contractor shall give the Contracting Officer iumediato
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,
rola, d in any way to this contract with respect to which the Con-
tractor may be entitled to reimbursement from the Goverinaent,
(f) (AFPT 7-203.8) The Contracting Officer may approve all
or part of the Contractors purchasing system and from time to time
rescind or reinstate such approval. Such approval shall be deemed
Nos, to fulfil tho requirements for obtaining the Contracting Officers
consent to subcontracts as proscribed in paragraph (b) above.
UTIL1/41TION OF SMALL BUSINESS CONCERNS (ASPR 7-104.14 AITI 7-03.9)
It is tho policy of the Government as declared by the
Congress to bring about the greatest utilization of small business
concercls which is consistent with efficient production.
(0) The Contractor agrees to accomplish the naxim.at amount of
subcontracting to small business concerns that the Contractor finds
to be consistent with tho efficient performance of this contract.
TEfljLILtT ION (ASPR 8-702 AFPI 7-403.10)
(a) The performance of work under the contract nay be terminated
Nowi by the Govornnent in accordance with this clause in whole, or from time
to time in part, (1) whenever the Contractor shall default in performance
of this contract in accordance with its terms (including in tho term
"default" any such failure by the Contractor to make progress in tho
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 periods as the Contracting Officer may allow) after receipt from
the Contracting Officer of a notice specifying tho default, or (2) when-
ev r for any reason the Contracting Officer shall determine that such
termination is in the best interest of the Government. Any such
termination shall be effected by delivery to the Contractor of a
Notice of Termination specifying whether termination is for the default
of the Contractor or for the convenience ef the Government, the extent
to which performance of work under the contract is terminated, and tho
date upon which such termination becomes effective. If after notice of
termination of this contract for default under (1) above, it is
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Nfte
determined that the Contractorts failure to perform or to make progress
in performance is due to causes beyond the control and without the
fault or negligence of the Contractor pursuant to the provisions of the
clause of this contract relating to excusable delays, the Notice of
Termination shall be deemed to haVebeen issued under (2) above, and the
rights and obligations of the parles:hereto shall in Such event be
governed accordingly.
(b) After receipt of a Notice of Termination and except as other-
wise directed by the Contracting Officer, the Contractor shall (I) stop
work under the contract on the date and to the extent specified in the
Notice ofeTk),eminatIoneei2.) place neefurther ordera.or.oubo,Jntracts for
materiels, services, or faellitieeemeeptals may be necessary for cam--
. Iletion of such portion of the work under the contract as is not
terminated; (3) terminate all orders and subcontracts to the extent that
they relate to the performance of Work terminated by the Notice of
Termination; (4) assign to the Government, in the manner and to the
extent directed by the Contracting Officer, all of the right, title,
and interest of the Contractor under the orders or subcontracts so
terminated, in which case the Government shall have the right, in its
discretion, to settle or pay any or all claims arising out of the
termination of such orders and subcontracts; (5) with the approval or
ratification of the Contracting Officer, to the extent he may require,
which approval or ratification shall be final and conclusive for all
purposes of this c:ee,use, settle all outstanding liabilities and all
claims arising out of such termination of orders and subcontracts the
cost of which would be reimbursable, in whole or in part, in accord-
ance with the provisions of this contract; (6) transfer title (to the
extent thattitle has not already been transferred) and, in the manner,
to the extent, and at the times directed by the Contracting Officer,
deliver to the Government (i) the fabricated or unfabricated parts, work
in process, completed work, supplies, and other material produced as a
part of,Qz_acquiroci...ln _respect of the performance of, the work terminated
e by the Notice of Termination, (ii) the dompleted or aetiallyaccimpleted
plans,adrawings2 information, and other property which, if the contract
had been completed, would be required to be furnished to the Government,
and (iii) the jigs, dies, and fixtures, and other epecial-tools-nxid-to.oliri:
acquired or manufactured for the performance of this contract for the
cost of which the Contractor has been or will be reimbursed under
this contract; (7) use its best efforts to sell in the manner, at the
times, to the extent, and at the price or prices directed or authorized
by the Contracting Officer, any property of the types referred to in
provision (6) of this paragraph, provided, however, that the Contractor
(i) shall not be required to extendcredit to any purchaser, and (ii)
may acquire any such property under the conditions prescribed by and
at a price or prices approved by the Contracting Officer; and provided
further that the proceeds of any such transfer or disposition shall be
applied in reduction of any payments to be made by the Goverment to the
(CPFF Apr. 18, 158)
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Contractor under th!Akdbontract or .shall otherwise be-Nsoedited 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 and preservation of
. the property related to this contract which is in the possession of the
Contractor and in which the Government has or may acquire an interest.
The Contractor shall proceed immediately with the performance of the
above obligations notwithstanding any delay in determining or adjusting
the amount of the fixed-fee, or any item or reimbursable cost under this
clause. At any time after expiration of the plant clearance period, as
defined in Section VIII, Armed Ser?ces Procurement Regulation, as it
may be amended from time to time??the Contractor may submit to the
Contracting Officer a list, certified as to quantity and quality, of any
or all items of termination inventOry not previously disposed of,
exclusive of items the disposition of which has been directed or author-
ized by the Contracting Officer, and may request the Government to remove
such items or enter into a storage agreement covering them. Not later than
fifteen (15) days thereafter, the.Government will accept title to such
giwW items and remove them or enter into a storage agreement covering the
same, provided that the list submitted shall be subject to verification
by the Contracting. Officer upon removal of the items, or if the items
are stored, within forty-five (45) days from the date of submission of
the list, and any necessary adjustment to correct the list as submitted
shall be made prior to final settlement.
(c) After receipt of a Notice of Termination, the Contractor shall
submit to the Contracting Officer its termination claim in the form and
with the certification prescribed by the Contracting Officer. Such
claim shall be submitted promptly but in no event later than two years
from the effective date of termination, unless one or more extensions in
writing are granted by the Contracting Officer upon request of the
Contractor made in writing within Such two-year period or authorized
extension thereof. However, if the:Contracting Officer determines that
the facts justify such action, he inay receive and act upon any such
termination claim at any time after such two-year period or any extension
Nik?are
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.
(CPFF Apr. 18, '58)
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(e) In the event of the failure of the Contractor and the
Contracting Officer to agree in whole or in part, as provided in
paragraph (d) above, as to the amounts With respect to costs and
f_-ed-fee, or as to the amount of the fixed-kfee, to be paid to the
C _tract:2 in connection with the terMination of work pursuant to tnis
clause, the Contracting Officer shall determine, on the basis of
information available to him, the amount, if any, due to the
Cc tractor by reason of the termination and shall pay to the
C ractor the amount determined as follows:
(1) If the settlement includes cost and fixed-fee
(i) There shall be included therein all costs and
expenses reimbursable in accordance with this contract, not previously
paid to the Contractor for the performance of this contract prier to the
effective date of the Notice of Termination, and such of these costs as
may continue for a reasonable time thereafter with the approval of or
as directed by the Contracting Officer, provided, however, that he
t-a,' - shell proceed as rapidly as practiceble ,o eisoentine
such costs.
(ii) There shall be included therein so far as no
included under (i) above, the cost of settling and paying claaas arisieg
cut of the terminaten of work under subcontracts or orders, as prov!ied
in paragraph (b)(5) above, which are properly chargea ble to the te-dinated
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
svpDorting data with respect to the terminated portion of the contract
an: for the termination and settlement of subcontracts thereunder,
tezether with reasonable storage, transportation, and other costs iacurred
in connection with the protection or disposition of termination inventory;
provided, however, that if the termination is for default of the
Contractor there shall not be included any amounts for the preparation
of the Contractor's settlement proposal,
(iv) There shall be included therein a portion of the
fixed-fee payable under the contract determined as follows:
(A) In the event of the termination of this
contract for the convenience of the Government and not for tho defrelit
of the Contractor, there shall be paid a percentage of the fee equvalent
to the percentage of the completion of work contemplated by the contract,
less fixed-fee payments previously made hereunder.
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(CHT Apr. 180 '58)
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(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 such part of the fee ao is
reasonably allocable to the type ef articles under consideration) as the
total number of articles delivered to and accepted by the Goverment
t) the total number of articles of a like kind called for by this
cc tract.
If the amount determined under this paragraph is
lees than the total payment of fixed-.fee theretofore made to the
Contractor, the Contractor shall repay to the Government the eecess
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
maee by the Contracting Officer under paragraphs (c) or (e) above, except
that if the Contractor has failed to submit its claim within the time
provided in paragraph. (c) above and has failed to request extension of
such time, he shall have no such right of appeal. In any case where
the Contracting Officer has made a determination of the amount due
un _r paragraph (c) or (e) above, the Government shall pay to the
Cc tractor 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 emount
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 theretoforetade to the Contractor, (2) any
claim which the Government may have against the Contractor in
connection with this contract, and (3) the agreed price for, or the
proceeds of sale of, any materials, supplies, or other things acquired
by the Contractor or sold pursuant to the provisions of this clause
and not otherwise recovered by or credited to the Government.
(h) In the event of a partial termination, the portion of the
fixed-fee which is payable with respect to the work under the eontfnued
portion of the contract shall be equitably adjusted by agreement between
the Contractor and the Contracting Officer, and such adjustment shall be
evidenced by an amendment to this contract.
(i) The Government may from time to time, under such terms and
conditions as it may prescribe, make partial payments and payments
on account against costs incurred by the Contractor in connection with
the terminated portion of the contract whenever in the opinion of the
? 14 ?
(GE F Apr. 18, 158)
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Contracting Officer the aggregate of such puyuents shall be within the
amount to which the Contractor will be entitled hereunder. If the total
of such payments is in excess of the amount finally determined to be duo
under this clause, such excess shall be payable by 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 tho Govern-
ment; provided, however, that no interest shall be charged with respect to
any such excess payment attributable to a reduction in the Contractorts
'y reason of retention or other disposition of terelination inventory
until ton days after the date of such retention or disposition,
(j) The provisions of this clause relating to the fixed-foe shall
be inapplicable if this contract does not provide for payment of a fixed-
fee.
Noe
(k) Unless otherwise provided for in this contract, or by applicable
statute, the Contractor from the effective data 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 tines at
the office .of the Contractor, but without direct charge to tho Govern-
ment, all its books, records, documents, and other evidence bearing on
the cost and expenses of the Contractor under this contract and relating
to the work terminated hereunder, or, to the extent approved by the
Contracting Officer, photographs, microphotographs, or ether authentic
reproductions thereof.
EXCUSADTE DELAYS (ASPR 7-203.11 AFPI 7-303.10)
The Contractor shall not be in default by reason of any failrre
in peatbrmance of this contract in accordance with its torus (including
any failure by the Contractor to make progress in the prosecution of the
work hereunder which endangers such performance) if such failure arises out
of causes beyond the central and without the fault or negligence of the
Contractor. Such causes include, but are not restricted 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 eecAees, unless the Contracting Officer shall have determined that the
supplies or services to be furnished under thu subcontract were obtainable
from oth,r 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 reasonally to comply with such order. Upon request of the
Contractor, the Contracting Officer shall ascertain the facts and extent
of such failure and, if he shall determine that such failure was occasioned
by any one or more of the said causes, the delivery schedule shall be
revised accerdingly, subject to the rights of the Government under the
clause hereof entitled netaiinAion"..
(CPFF Apr. 1_8, 158)
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(b) If the Contractor becomes unable to complete the contract work
and make delivery at the tine specified in the Schedule because of technical
difficulties, notwithstanding the exercise of good faith and diligent
offert in the performance of the work called for hereunder, it nay give
the '.:.ntracting Officer written notice of the anticipated default with
reasons therefor. Such notice and reasons shall be delivered not loss
than forty-five (45) days before the completion date specified in the
Schedule or within such time as the Contracting Officer dcons 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 tine specified in the Schedule for
such period as he deems advisL,ble and this contract shall then be modified
An writing accordingly,
DISPUTES (AC PR 7-103.12 AFT' 7-403.12)
(a) Except as otherwise provided in this contract, any dispute
cncernThg a question of fact arising under this contract which is not
- dispoe 1 of by agreement shall be decided by the Contracting Officer, who
shall ,oduco his decision to writing and mail or otherwise furnish a
copy thereof to the Contractor. Th c decision of the Contracting Officer
shall be final and conclusive unless, within 30 days from the data of
receipt of such copy, the Contractor nails or otherwise furnishes to the
Contracting Officer a written appeal addressed to the Secretary. The
decision of the Secretary or his duly authorized representative for the
determin Aden of such appeals shall be final and conclusive unless
deter-lined by a court of competent jurisdiction to have boon fraudulent,
'r ,_ 11-3, or arlsitrarv, or so grossly erroneous as nocesarily to
faith, or net supported by substantial evidence. In connection
with any appeal proce,ding under this clause, the Contractor shall be
afforded an opportunity to be heard and to offer evidence in support of
Its appeal, Pending final decision of a dispute hereunder, the Contractor
shall proceed diligently with the performance of the contract and in
accordance with the Contracting Officer's decision.
(b) This "Disputes" clause does not preclude consideration of law
,uestions in connection with decisions provided for in paragraph (a)
)hove: Provided, That nothing in this contract shall be construed as
flaking find the decision of any administrative official, representative, or
board on a question of law.
NOTICE Lim ASS' ,TANCE REGARDING PATENT INFRINGDIENT (ASPP. 9-104 AFPI 7-404.13)
The previsions of this clause shall be applicable only if the amount
of this c,ntract is in excess of 5,000.
(a) The Contractor shall report to the Contracting Officer, promptly
Ind in r,isonable written detail, each notice or claim of patent infringe-
ent on thc performance of this contract of which the Contractor
,as knowledge.
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(MIFF 1,4Dr..18, '58)
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Now'
'oriere
4111,
(b) In the event of litigation against the Government on account of
any claim of patent infringement arising out of the performance of this
contr ct or out of the use of any supplies furnished or work or services
performed hereunder, the Contractor shall furnish to the Government, upon
request, all evidence and information inposSession 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.
puy Al,,2ICAN ACT (ASFR 7-103.14 AFPI 7-03.14)
(a) In acquiring end products, the Buy An,rican Act (41 U.S. Code
10a-d) provides that the Government give preference to domestic source
end products. For the purpose of this clause:
(i) "components" moans those articles, materials, and supplies,
which are directly incorporated in the and products;
(ii) "ond products" means those articles, materials, and supplies,
which are to be acquired under this contract for public use; and
(iii) a "domestic source end product" means (A) an unmanufacturod
end product which has boon mined or produced in the United States and (B)
an end product manufactured in the United States if the cost of the
o, p-
thereof which are mined produced, or manufactured in the United
Stare.. exceeds 50 percent of the cost of all its components. For the
purposes of the (a)(iii)(B), components of foreign origin of the sane type
or kind as the products referred to in (b)(ii) or (iii) of this clause
shall 'he treated as components mined, produced, or manufactured in the
United States.
(b) The Contractor agrees that there will be delivered under this
contract only domestic source end products, except end products:
(I) which are for use outside the United States;
(ii) which the Government determines are not mined, produced, or
manufactured in the United States in sufficient and reasonably available
commercial qu-ntities and of a satisfactory quality;
(iii) as to which the Secretary determines the domestic preference
to be inconsistent with the public interest; or
(iv) as to which the Secretary determines the cost to the Govern-
ment to be unreasonable.
(OPFF Apr., 181 158)
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COVICT LABOR (ASPR 12-203 AFPI 7-403.15)
In connection with the performance of work under this contract,
the C-ntractor agrees not to employ any person undergoing sentence of
imprisonment at hard labor.
EIGHT-HOUR LAW OF 1912 (ASPR 12-303.1 AOTI 7-403.16)
This contract, to the extent that it is of a character specified in
the Eight-Hour Law of 1912 as auended (40 US, Code 324-326) and is not
covered by the Walsh-Healey Public Contracts Act (41 U.S. Code 35-45), is
subject to tho following provisions and oxceptions of said Eight-Hour
Law of 1912? as amended, and to all other provisions and exceptions of
said raw:
No laborer or mechanic doing any part of tho work contomplatod by
this contract, in tho employ of the Contractor or any subcontractor
contracting for any part of the said work contemplated, shall be required
or pernitted to work uore than eight hours in any one calendar day upon
such work, except upon tho condition that compensation is paid to such
laborer or nochanic in accordance with the provisions of this clause.
The wages of every 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 mochanw shall be compensatcd for all hours worked in
MCCOSS of eight hours per day at not loss than one and ono-half times the
basic rate of pay. For each1q1D1tItion of the requirenonts of this clause
a ix,naiby of five dollars shall be imposed for each laborer or mechanic for
every oalendar day in which such omployce is required or permitted to
labor more than eight hours upon said work without receiving coupensation
conpuz.d in accordance with this clause, and all penalties thus imposed
shall be withheld for the use and benefit of the Goverm.ont.
Nine NONDISCRMINaTION IN FA,IPLOYLENT (ASPR 12-802 AFPI 7-403.17)
(a) In connection with tho performance of work under this contraot,
the Contractor agroos not to cliscrinixr,to against any oLployee or applicant
for euploynent because of race, religion, color, or national origin. The
aforesaid provision shall include, but not be united to, tho following:
employment, upgrading, demotion/or transfer; recruitmont or recruitment
advertising; layoff or termination; rates of pay or other forms of
coupensation; and selection for training? including apprenticoship. Tho
Contractor agrees to post hereafter in conspicuous places, available for
employees and applicants for omploymont? 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 hereunder, except subcontracts for standard corzlercial
supplies or raw materials.
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(CPFF Apr. 18, 1958)
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OEFICIALS NOT TO BENNEFIT (ASPR 7-10.19 AFPI 7-403i)
No member of or delegato to Congress, or resident commissioner,
shall be admitted to any share or part of this contract, or to any
bone that nay arise therefrom; but this provision shall not be
ponsirued to extend to this contract if rade with a corporation for
its general benefit?
COVENANT AGAINST CONTINGENT FEES (ASPR 7,103.20 AFPI 7-403g19)
The Contractor warrants that no person or soiling agency has
been employed or retained to solicit or secure this contract upon
an agroertont or understanding for a COMILLSSi011, porcentage, broker-
age, or contingent foe, excepting bona axle employees or bona fide
establshod co:norcial or selling agenci6s maintained by the Contractor
for the purpose of securing business. For breach or violation of this
warranty the Government shall have the right to annul this contract
without liability or in its discretion -be deduct from the contract
'4'w1 price or consideration, or otherwise recovers the full amount of such
oonnisdon, percentage, brokerage or contingent foo.
PATENT RIGHTS (1SPR 9-107 AFPI 7-403.20)
(a) As used in this clause, the following torns shall have the
meanings set forth below:
(i) The term "Subject Invention" moans any invention,
Improvement or discovery (whether or not patentable) conceived or first
actually roluced to practice oithor (A) in the performance of the
oxperl- utal, developmental, or research work called for or required
under ,s contract: or (B) in the performance of any experimental,
developmental, or research work relating to the subject matter of
this contract which was done upon an undorstanding in writing that a
contract would be awarded; provided that the term "Subjoct Invention"
Nu, shall not include any invention which is specifically identified and
listod in the Schedule for the purpose of excluding it from the
license granted by this clause,
(ii) The tom "Technical Porsonnol" moans any person employed
by or working under contract with the Contractor (other than a sub-
contractor whose responsibilities with rospoct to rights accruing to
the Government in inventions arising under subcontracts sot forth in
paragraphs (g), (h), and (i) below) who, by reason of the nature of
his duties in connection with the p,rformance of this contract, would
reasonably be expected to make inventions.
(iii) Tho terms "subcontract" and "subcontractor" roan any
subcontract or subcontractor of the Contractor, and any lower-tier
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subcontract or subcontractor ander this contract*
(b)(1) The Contractor agrees to and does hereby grant to the
Govern-lent an irrevocable, nonexclusive, nontransferable, and royalty?
free ILconse to practice) and cause to bo practiced by or for the United
States Government throughout the world, puch Subject Invention in the
manufacture, use and disposition according to law, of any article or
lateriaa, and in the use of any method* No license granted heroin
shall convey any right to the Govornment to manufacture, have manufactured,
or use any Subject Invention for the purpose of providing services or
supplies to the g-neral public in competition with tho Contractor or
the C-,ntractorls commercial licensees in the licensed fields,
(2) With respect to:
(i)
personnel;
any Subject Invention made by other than Technical
c?ii) any Subject Invention conceived prior toy but first
actually reduced to practice in the course of, any of the experimental,
developmental, 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)
below2 shall be limited to the extent of the Contractors right to
grant the same without incurring any obligation to pay royalties or
other compensation to others solely on account of said grant*
Nothing contained in this Patent hights clause shall be doomed 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 invention which
reasonably appears to be patentable;
(A) a written disclosure promptly after conception or first
actual reduction to practice of each such Invention together with a
written statement specifying whether or not a United States patent
application claiming the Invention has been or will bo filed by or
on behalf of the Contractor;
(ii) interim reports, at least every twelve months,
commencing with the date of this contract, each listing all such
Inventions conceived or first actually reduced to practice more than
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
? 20 ?
(CPFF Apr. 18y 158)
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(iii) prior to fital settlement of this contract, a final
report listing all such Inventions, inclUding all those previously
listed in interim reports.
(d) In connection with each subject Invention referred to in
(c)(i) above, the Contractor shall do the following:
(i) if the Contractor 9pecifies 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
weuld he filed, decides not to file Or cause to be filed said applicationl
the Contractor shall so notify the Contracting Officer at the earliest
practicable date and in any event net later than eight months after
first publication, public use or sale.
(ii) if the Contractor ppacifies 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 Contracting Officer shall:
(A) inform the Contracting Officer in writing at the
earliest practicable date of any publication of such Invention made by
or known to the Contractor or, where applicable, of any contemplated
publication by the Oontractor, stating the date and identity of such
publication or contemplated publication; and
convey to the Government the Contractor's entire
rAee.lt, title, and interest in such Invention by deliverying to the
Contracting Officer upon written request such duly executed instruments
(eeepared by the Government) of assignment and application, and such
other papers as are deemed necessary to vest in the Government the
Contractor's right, title and interest aforesaid, and the right to
,apply for and prosecute patent applications covering such Invention
throughout the world, subject, however, to the right of the Contractor
specified in (e) below to file foreign applications, and subject
further to the reservation of a non-exclusive and royalty-free
license to the Contractor (and to its existing and future associated
and affiliated companies, if any, within the corporate structure of
wIeLch 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
Ceetracting Officer on request an irrevocable power of attorney to
iespect and make copies of each United States patent application
filed by or on behalf of the Contractor covering any such
Invention;
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(CPTT Apr. 18, 158)
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.1111./ SOY
(IV) In the event the Contractor, or those other than the
Government deriving rights from the Contractor, elects not to continue
p-,secution of any such United States patent application filed by or
oa behalf of the Contractor, the Contractor shall so notify the
Ccatracting Officer not less than sixty days before the expiration of
-L.?, response period and, upon written request, deliver to the Contracting
Of:i_cer such duly executed instruments (prepared by the Government) as
deemed necessary to vest in the Government the Contractor's entire
;ht, title, and interest in such Invention and the application, subject
t, the reservation 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 within2
(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 application 7 where such filing had been prohibited for security
reasons; or
(iii) such longer period as may be approved by the Contracting
Officer. The Contractor shall, upon written request of the Contracting
Officer, convey to tle Government the Contractor's entire right, title,
and interest in each Subject Invention in each foreign country in which
an npplication 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
suLlicenses, 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) If the Contractor fails to deliver to the Contracting Officer
the interim reports required by (c)(ii) above, or fails to furnish the
written disclosures for all Subject Inventions required by (c)(i) above
shown to be due in accordance with any interim report delivered under
(c(ii) or otherwise known to be unreported, there shall be withheld
from payment until the Contractor shall have corrected such failures
either ten percent (10%) of the amount of this contract, as from time
to time amended, or five thousand dollars (5,000)? whichever is less.
After payment of eighty percent (80%) of the amount of this contract,
as from time to time amended, payment shall be withheld until a reserve
of either ten percent (10%) of such amount, or five thousand dollars
(A5,000), whichever is less, shall have been set aside, such reserve
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(CPFF Apr. 18, 158)
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or balance thereof to be retained until the Contractor shall have
furnished to the Contracting Officer
(i) the final report required by (c)(iii) above;
(ii) written disclosures for all Subject Inventions required
by (c)(i) above which are shown to be due in accordance with interim
reports delivered under (c)(ii) above or in accordance with such final
reports or are otherwise known to be unreported; and
(iii) the information as to any subcontractor required by (h)
below, The maximum amount which nay be withhold under this paragraph
(f) shall net exceed ten percent (10%) of the amount of this contract or
five thousand dollars (5,000), whichever is less, and no amount shall
be withheld under this paragraph (f) whet' the amount specified by this
paragraph (f) is being withhold under other provisions of this contract.
The withholding of any amount or subsequent payment thereof to the
Contractor shall not be construed as a waiver of any rights accruing to
144.ge the Government under this contract. This paragraph (f) shall not be
construed as requiring the Contractor to withhold any amounts from a
subcontractor to enforce compliance with patent provisions of a subcontract.
(g) The Contractor shall exert all reasonable effort in negotiating
for the inclusion of this Patent Rights clause in any subcontract here?
under of three thousand dollars ((.3,000) or more having experimental,
developmental, or research work as one of its purposes. In the event of
refusa-i, 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 ac, eptable patent rights clause; provided,
however, that the Contractor shall in any event require the subcontractor
to grant to the Government patent rights under Subject Inventions of no
less scope and on no less favorable terms than those which the Contractor
Novi has under such subcontracts, except that in no event shall the subcontractor
bo required to grant to the Government patent rights in excess of those
herein agreed to be granted to the Government by the Contractor.
(h) The Contractor shall, at the earliest practicable date, notify
the Contracting Officer in writing of any subcontract containing a
patent rights clause, furnish the Contracting Officer a copy of such
clause, and notify the Contracting Officer when such subcontract is
completed. It is understood that with respect to such subcontract
clause, the Government is a third party beneficiary, and the Contractor
hereby assigns to the Government all the rights that the Contractor would
have to enforce the subcontractor 1s obligations for the benefit of the
Government with respect to Subject Inventions. The Contractor shall not
be obligated to enforce tho agreements of any
? 23 ?
(CPIT Apr. 18, 158)
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Nuipi
subcontractor hereunder relating to Subject Inventions.
(i) When the Contractor shows that it has been delayed in
the performance of this contract by reason of its inability to obtain
in accordance with (g) above a suitable patent rights clause from a
cralified subcontractor for any item or service required under this
ee, tract for which the Contractor itself does not have available
fe:ilities or qualified personnel, the Contractorls delivery dates
be extended for a period of time equal to the duration of such
.y; and, upon request of the Contractor, the Contracting Officer
sl Ll determine to what extent, if any, an additional extension of
tl , delivery dates and an increase in contract prices based upon
additieral cost incurred by such delay are proper under the
circumstances; and the contract shall be modified acLordie;rly. If
the Contractor, after exerting all reasonable effort, is unable to
obtain a qualified subcontractor as set forth above, the Contractor
may submit to the Contracting Officer a written request for waiver or
modification of the reeuirement 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-fdve (35) days after the date of receipt of such
request for a waiver or modification of said requireeent, the Contracting
Of'ticer 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, this contract shall thereupon automatically
terminate and the rights and obligations of the parties shall be govern-
ed by the provisions of the clause of this contract providing for
termination for the convenience of the Government.
21, GOVERMENT PROPERTY (SPR 13-503
AFPI 7-403.21)
(a) The Government shall deliver to the Contractor, for use in
connection with and under the terms of this contract, the property
described in the Schedule or specifications, together with such related
data and information as the Contractor may request and as may reasonably
be required for the intended use of such property (hereinafter referred
to as "Government-furnished Property"). The delivery or performance
dates for the supplies or services to be furnished by the Contractor
under this contract are based upon, the expectation that Government-
furnished Property suitable for use will be delivered to the Contractor
at the times stated in the Schedule or, if not so stated, in sufficient
time to enable the Contractor to meet such delivery or performance
dates. In the event that Government-furnished Property is not
delivered to the Contractor by such time or times, the Contracting
Officer shall, upon timely written request made by the Contractor,
make a determination of the delay occassioned the Contractor and shall
(CPFF Apr. 18, 158)
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Noe' 1440
'Saw'
equitably adjust the estimated cost, fixed foe, or delivery or porforuance
dates, or all of then, and any other contractual provisi,ns affected
by such delay, in accordance with the procedures provided for in tho
clauso of this contract entitled "Changes." In the event that Govern-
nent-furnishod Proporty is roccived by the Contractor in a condition
not suitable for the intended use, tho 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
Govornontts expense or otherwise dispose of the propJrty 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 foe, or delivery or porformance
dates, or all of then, and any other contractual provision affected
by tho return or disposition, or tho repair or nodificatien, in accord-
ance with the procedures provided for in the clauso of this contract
entitled "Changes." Tha foregoing prOVi8i'll$ for adjustment aro exclusive
and the Govornnont shall not be liable to suit for broach of contract
by reason of any delay in delivery of Governmont-furnishod Property
or delivery of such property in a condition not suitable for its
intend )d use,
(b) Title to all property furnished by the Government shall ronain
in the Cover/Inc/it. Title to all property purchased by the Contractor/
for the cost of which tho Contractor is entitled to be roinbursod as a
direct iten of cost under this contract, shall pass to and vost in tho
Govor--tont upon delivery of such property by the vendor. Title to
other prop rty, the cost of which is reimbursable to the Contractor
undor this contract, shall pass to and v st in the Govornnent upon (i)
issuance for use of such property in tho perfornanco of this contract,
or (ii) co-inncencnt of processing or use of such property in the
porfornanco of this contract, or (iii) reimbursement of the cost thereof
by the Government, whichever first occurs. All Govornnunt-furnished
Prop(rty? togothor with all property acquired by the Contractor title
to which vests in tho Gevornmunt under this paragraph, are subject
to tho previsions of this clause and aro hereinafter colloctively
roforrel to as "Governmont Property"
(c) Title to the Government Property shall not be affected by tho
incorporation or attachment thereof to any property not owned by tho
Governmont, nor shall such Governmont Property, or any part thereof, be
or become a fixture or lose its identity as personalty by reason of
affixation to any realty. The Contractor shall maintain adequate
prop,rty control records of the Government Property and shall identify
the Govornnont Property as such in accordance with the requiremonts
of the "Manual for Control of Govornmont Property in Possession of
Contractors" (Appondix B, Arnad Services Procurencnt Regulation), as
in effect on the date of the contract, which Manual is hereby incor-
porated by refuronce and nade a part of this contract.
(CPIT Apr 18 158)
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(d) The (:'2overnment Property provided or furnished pursuant to.
the terms of this contract sb,all, Unloss otherwise provided herein,
be used only for the performance of. this contract.
(6) The Contractor shall maintain and adiainiSter, in accordance
with sound industrial practice) a pregran for the maintenance, repair,
protection and preservation of Crove,m44nt property) so as to assure
its full availability and useinesfer the performance of this
contract. The Contractor shall take -all reasonable steps to comply
with all appropriate directions Or inStructiOns which the Contracting
Officer may preseribe as r6aAnab1y-necessary for the protection of
Government i)rOperty.
(f) (i) The Contractor shall not be liable for. any loss (g? or
damage to the Government proporty, or for expenses incidental to
such loss or damage, except that the Contractor shall he responsible
for ny such loss or damage (including expenses incidental thereto)
(A) ,;inich results from willful misconduct or lack. of ge:Jd faith on the
Nue part tof any of the Contractoris directors or off3icers) or on the part
of any of its managers, superintendnts, or other equivalent represen?
tatives) who have supervsion or direction of (I) all or substantially
all of th6 Contractarfs business, or (II) all or sulostantially all.
of the Contractor is operations at any one plant or separate location
In which this contract is being performed, or (III) a separate and
complete major industrial operation in c4nnection with the performance
of this contract; or (E) which results from a failure ?cia the part of
the Contractor) due to the willful misconduct or lack of gond faith
rYll the prt of any of its directors, officers, or other representatives
? mnntinnee in sUbparagraph (10 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
unrier paragraph (e) hereof; or (C) for which the Contractor- is
otherwise responsible under the express terms of the clause or
clauses designated in the Schedule; or (9) which results from a risk -
expressly recjuired to be insured under ttis contract, but only to
the eztent *f the irsurance so required to Le procured and maintained)
or to the -ext-nt of insurance actually.- procured and maintained, which?
ever is greater; or (E) which result from a risk which is in fact
co-vere,3 by -insurance or for which the Contract s otherwise reimburse4)
but only to the extent of such insurance or reimbursement; provided that)
more than one of the ablve exceptions Fth,..al Ipe applicable in iniy
cape) the Contractorls liability Inder any one exception shall Lot be
li:aited by any other exception. This Clause shall net be construed
as relieving a suoontractor from liability for loss or destruction of
or r1:1,1dAp;e to Government property in its possession or control, except
to the-extent th,..,,t1,,_4,:,.b,-.ontract, with the prior a2Kroval of the
Centractivg Irro.N6 "?cro-.0 +.1-4o 0.k" i..ho psfu]Jcontract r
? 26
(CFEF Apr. 18)
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Nuire`
fron such liability. In the absence of such approval, the subcontract
all contain appropriate provisions requiring the return of all Govern-
nent property in as good condition as when received, except for reasonable
year 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.
(iii) Upon the happening of loss or destruction of or
damage to the Government Property, the Contractor shall notify the
Contracting Officer therof, and shall communicate with the Loss and
Salvage Organization if any, now or hereafter designated by the
Contracting Officer, and with the assistance of the Loss and Salvage
Organization so designated (unless the Contracting Officer has designated
that no such organization te 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 Govern-
ment Property, (B) the time and origin of the loss, destruction or
damage, (0) all known interests in commingled property of which the
Goiernment Property is a part, and (D) the insurance, if any, covering
an part of or intereat 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 Preperty involved, or shall credit such
proceeds against the cost of the work covered by the contract, or shall
otherwise reimburse the Government, as directed by the Contracting
Officer. The Contractor shall do nothing to prejudice the Government's
right to recover against third parties for any such loss, destruction
or damage and, upon the request of the Contracting Cfficer, shall, at
the Government's expense, furnish to the Government all reasonable
assistance and cooperation (including the prosecution of suit and the
execution of instruments of assignment in favor of the Government) in
obtaining recovery. In addition, where the subcontractor has not been
relieved from liability for any loss or destruction of or damage to
Government property, the Contractor shall enforce the liability of the
subcontractor for such loss or destruction of or damage to the
Government property for the benefit of the Government
?27?
(CPFF Apr. 180 '58)
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?
For u0o whore applicable;
(v) in the event any aircraft are to be furnished under this
contract, any loss or destruction of, or damage to, such aircraft or other
Government property occurring in conneetion with operations of said air?
craft will be governed by the clause of this contract captioned "Flight
14"sks"2 to the extent such clause is, by its ternsy applicable*
(g) The Goverment shall at all reasenable times have access to the
prenisos 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
this contract unless the Contracting OffiCor determines that the interests
of the Goverment require removal of such property* In such case the
Contractor shall promptly take such action as the Contracting Officer nay
direct with respect to tho removal and shipping of Government Property*
In any such instance, the contract may be amended to accomplish an equitable
adjustment inthe terns and previsions thereof.
(1) Upon the completion of this contract, or at such earlier dates as
ray be fixed by the Contracting Officer, the Contractor shall submit to the
Contracting Officer in a form acceptable to him, inventory schedules covering
all itmas of the 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 nay be
directeS or authorized by the Contracting Officer* The not proceeds of any
such disposal shall be credited to the cost of the work covered by the
contract or shall be paid in such manner as the Contracting Officer nay
direct* The foregoing previsions shall apply to scrap from Government
Property prttivided? 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 rennants, and
.N4moto dispose 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 Contractorts 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 cost of the
restoration or rehabilitation of the Contractor's plant or any portion thereof
ihich is affected by the removal of any Government Property*
(k) Directions of the Contracting Officer and communications of the
lentractor issued pursuant to this clause shall be in writing*
(1) As provided in paragraph (i) of the above clause, the Contracting
'Meer may, subject to Departental procedures, authorize or approve use
f the?Centractor's established scrap disposal and accounting procedures
honever the amount and recoverable value of scrap from the Government
roperty.are relatively minor and the Contractort6 established procedures for
.nctvalinlating and disposing of scrap and crediting the proceeds thereof to
,eneral overhead or other general cost will permit the Government to share
cluitably in such scrap recovery through a reduction of overhead or other
:est faster affecting reimbursenont under the contract*
CPEF Apr. 18, t58) ? 28 ?
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TYSTI OF-LIALILM, TO THIRD FrifCTIE (A5EF, 7-263.22 AFEI 7-4O3.22)
(a) The Contractor shall procure and thereafter maintain workmenls
conT-nnation, employer's liability, comprehensive general liability (bodily
injTy) and comprehensive automobile liability (bodily injury and
pmperty damage) insurance, with respect to performance under this
contract, and such other insurance as the Contracting Officer may
from time to time require with respect to performance under this
contract; 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. 1L11 insurance required
pursuant to the provisions of this paragraph shall be in such form,
in such amounts, and for such periods qf tine as the Contracting
Ofinner may from time to time require Or approve, and Yith insurers
approved by the Contracting Officer.
(b) The Gontractcr agrees, to thE extent and in the manner
req.lired by the Contracting Officer, t Mi:CUtt, for the approval of
the Contracting Officer any other insuance maintained by the Oentraollor
oonnection with the perforrlance cf this contract and for which tho
Contractor seeks reimbursement hereunder.
(c) The Contractor shall be reinbursed: (i) for he prIrtion
allocable to this contract of the reasonable cast of insurance as
required or approved pursuant to the provisions of this clause, and
(ii) for liabilities to third persons for loss or for damage to
prop-rty (other than property (A) owned, occupied or used by the
Contractor er rented to the Contractor or (E) in the care, custody,
or cotrT1 of the Contractor), or for death or bodily injury, not
compensated by insurance or otherwise, arising out et the performance
of this contract, whether or not caused by the negligence of the
Controtor, 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 resp')nsible under the express terms of the clause or
clauses, if any, specified in the Schedule, or (II) with respect
to which the Contractor has failed to insure as required or maintain
insurance as aproved by the Contracting Officer or which results
from willful misconduct or lack tf good faith on the part of any of
the Contractor's directors or officers, or on the part of any of its
managers, superintendents, or other equivalent represent,tives, who
has supervision or direction of (1) all or substantiall all. of the
Contractors business, or (2) all or substantially all of the Con-
tractor's operations at any one plant or separate location In w'itch
t.;is contract is being performed, or (3) a separate and complete
major industrial operation in connection with the performance of
this con't.ract. The foregoing shall not restrict the right of the
Contractor to be reimbursed for the OiSt of insurance maintained by
the Gontractor in ct.nnection with the perfrulalloe of this contract,
other tiLArl ;111Turance 9111-1nittO Per approval or required
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to be procur-d and procured and naintainod pursuant to the provisions
of this clause, provided such cost would condtituoc Allowable Costs
under the clause of this contract entitled tiillowable Cost, Fixed Foe
Payment, "
Tho Contractor shall give the Government or its representatives
innodioto notice of any suit or action filed, or prompt notice of any
claim made, against the Contractor arising out of the performance of this
contract, the cost and expense of which nay bo rct,tribursablo to the
Contractor under the provisions of this ccntract, and the risk of which is
then uninsured or in which the amount claimed exceeds the amount of
cov3ra::0, The Contractor shall furnish immediately to tho Governuont
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 collaborate 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 Goverillent to settle or defend any such cLiie 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 representatives of the Government in the settle-
ment or defense of any such claim or litigation*
AUTHORIZATION AND CONSErT (ASPR 9-102,2 AFPI 7-403,23)
Tho Government hereby gives its authorization and consent for all
use and manufacture of any patented invention in the performance of this
contract or any part hereof or any amendment hereto or any subcontract
hereunder (including any lower-tier subcontract),
Nay'
Nage
(CPFF Apr. 18, t58)
?30?
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FILING OF PATENT APPLICATIONS (ASPR94O6 AFPI 7-404.3)
(a) Before filing or causing to be filed a patent application
,isclesing any subject natter of this cohtracti which subject matter is
classified "Secret" or higher, the Contractor shall, citing the
thirt; (30) day provision below, transmit the proposed application
to the Contracting Officer for determination whether, for reasons of
national security, such application should be placed under an order
of secrecy or sealed in accordance with the provisions of 35 U. S.
Code rd-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 C:ntracting Officer with respect to
the manner of delivery of the patent application to the U. S. Patent
Qffice. for filingy but the Contractor shall not be denied the right
to file such patent application. If the Contracting Officer shall
no have given any such instructions within thirty (30) days from
the date of mailing or other transmittal of the proposed application'.
the Contractor may file theopplication.
(L) The Contractor shall furnish to the Contracting Officer,
at the time of or prior to the ti e when the Contractor files or
cause:: to 'to filed a patent applic.tion disclosing any subject matter
of this contract, which subject natter is classified "Confidential",
a copy of such application for determination whether,
for reasons of national security, such application should be placed
under an order of secrecy or the issuance of a patent should be
oherwise delayed under pertinent statutes or regulation,
(e) In filing any patent application coming within the scope of
this clause, the Contractor shall observe all applicable security
regul.tiens cov)ring the transmission of classified subject natter.
REPO2aING OF ROYALTIES (ASFR 9-110 APPI 7-404,4)
The provisions of this clause shall be applicable only if the
Now/ amount of the contract is in excess of 50,000.
(a) The Contractor shall report in writing (in quadruplicate)
to the Contracting Officer as soon as practicable after execution of
this contract whether or net any royalties in excess of 250 have
been paid or are to be pail by the Contractor directly to any person
or firm in connection with the performance of this contract. If
royalties in excess of ',,250 have been paid or are to be paid to any
person or firm, the report shal) include the following items of
information with respect to such royalties (including the initial 2.50)?
(1) The name and address of each licensor to whom royalties
in excess of b25Q have been paid or are to be paid,
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(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 reyalty-bearing unit or process, (ii)
the total amount of royalties, and (iii) the p,_rcontage rate or loll-rs
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 co- ,s value, then other data showing the manner in which the
Contra 'cor computes the royalties,
(b) In lieu of furnishing a report under paragraph (a), the
Contractor nay furnish a single, consolidator' report for each account-
ing 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, Such consolidated
reports shall be furnished, when the furnishing thereof has boon
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 of111000 per annum on the Contractors over-all business,
together with (i) tho nano and address of each such licensor, (ii) the
patent numbers, patent c.pTlication 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 lo not accrue by rate or unit amount, such other data showing
the manner by which the royalties accrue to licenser, and (v) an
estimate or approxinttion (without detailed accounting) of the portion
of such royalties that may be attributable te Government contracts*
The Contractor shall, if requested by the Government, furnish at Govern-
ment expense a more detailed allocation of such royalty payments
attributable to Government dentracts,
(c) In the event that the Contractor requests written approval
to furnish consolidated reports under paragraph (b) above, Cho
contracting Officer shall promptly c,nsidor 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. The Contractor shall furnish a copy
of such letter of approval to the Contracting Officer administering
this contract,
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(d) After payment of eighty percent (80%) of the -mount of this
contract, as from time to tine L.monded, further payment shall be withhold
until a reserve of either (i) ten percent (10%) of such amunt or (ii)
?,510000 which over is less, shall have boon act aside, such reserve or
the balance thereof to be retained until the Contractor shall have
furnished to the Contracting Officer the report called for by paragraph
(a) hereof or the copy of the letter approving the Contractors request
to furnish the report under paragraph (b); provided that no amount shall
oontinno to be withheld fron payment for the causes specified in this
paragraph (d) if the Contracting Officer shall find that the Contractor
has not boon furnished a letter as required by paragraph (c) within a
reasonable tine after making written request to submit a single,
consolidated report under the provisions of paragraph (b) of this clause;
and provided further that the Contracting Officer nay, in his discretions
order payment to be withheld in the amount and manner above provided if
the report called for by paragraph (a) is unsatisfactory or the report
called for by paragraph (b) is lue but has not boon received, or if
received, is found to be unsatisfactory. No amount shall be withhold
under this paxagraph when the minimum amount specified by this
paragranh is being withhol' under ether pr-visions of this ccntract.
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 this contract.
RIGHTS IN DaTA-UNI,RTTED (nSPR 9-203.1 AFPI 7-404.5)
(a) The torn "Subject Data" as used herein includes writings,
sound recordings, pictorial reproducti nss drawings or other graphical
representations, and works of any similar nature (whether or not
copyrithted) which are specified to he delivered under this contract,
2ho torn 10()S not include financial reports, cost analyses and other
information incidental to contract adtdnistration,
(b) Subject to the proviso of (c) below, the Government nay
_ luplicate, uses and disclose in any manner and for any purpose
.1406hatsoevers and have others so dos all Subject Data delivered under
this contract.
(0) The Contractor agrees to and does hereby grant to the
'xovernments and to its officers, agents, and employees acting within
the scope of their official duties, a royalty-free? nonexcelusive and
trrevocable license throughcut the world, to publish, translates
-opreduce, delivers perform, dispose of and to authorize others so
to do, all Subject Data now or hereafter covered by copyright; PROVIDED
that with respect to such Subject Data not originated in the performance
)f this contract but which is incorporated in the work furnished under
this contract such license shall be only to the extent that the
entracter, its onployoes, or any individual or concern specifically
)nployed or assigned by the Contractor to originate and prepare such Data
meter this contract, now has, or prior to completion or final settlement
,f this contract nay acquire the right to grant such license without
2ccoming liable to pay compensabion to ethers solely because of such
rant,
(,CPFF Apr. 18, '58) ? 33 ?
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(d) The Contractor shall exert all reasonable effort to advise
the Contracting Officer.. at the time of delivery of the Subject Data
furnished under this contract, of all invasions of the right of
privacy contained therein and of allrortions of such Data copied from
work - t cmposed or produced in the performance of this contract and
not 1, onsed under this clause.
(e) 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 this contract.
(f) Nothing contained in this clause shall imply a license to
the Government under any patent or be construed as affecting the scope
of any license or other right otherwise rrantcd to the Government under
any patent.
(g) The Contractor shall not affix any restrictive markings Upon
any Subject Data, and if such markings arc affixed, the Government shall
lorevi have -.Lc right at any ti -o to modify, remove, obliterate or ignore any
such larking,
MILIT?RY SECURITY REQUIREMENTS (ASPR 7-104.12, 7-204.12 AFF1 7-404.7)
(a) The provisions of this clause shall apply to the extent that
this contract involves access to security information classified
"Ccnfidential" including "Confidential ? Modified Handling Authorized"
or higher.
(b) The Goverment shall notify the Contractor of the security
classification of this contract and the elements thereof, and of any
subsequent revisions in such security classification, by the use of a
Security Requirements Chock List (DD Form 254).
(c) To the extent tho Goverment has indicatc.1 as cf the 'late of
'Nom. this contract, or thereafter indicated, security classification under
this contract as provided in paragraph (b) above, the Contractor shall
safeguard all classified olonents of this contract and shall provide and
maintain a system of security controls within its own organization in
accordance with the requirements of:
(i) the Security Agreement (DD Form 441), including the
Department of Defense Industrial Security Manual for Safeguarding
Classified Information as in effect on the date of this contract, and
medificati n to the Security Igreenent for the purpose of adapting the
Manual to the Contractor's business; and
(ii) any aLendnents to said Manual made after the date of
this contract, notice of which has boon furnished to the Contractor by
the Security Office of the Unitary Department having security cognizance
over the facility.
? 34 ?
(CHF Apr, l8t f58)
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(d) Representatives of the Military DcplrtDent having security
cognizance over the facility and representatives of the contracting
ilitdry Pep .rtnent shall have the richt to inspect at reasonable
intervels the procedures, methods, and fagilities utilized by the
Centr,rb-r in complying with the security requirements under this
centr ct. Should. the Government, through its authorized reprosentative
deteryne that the Contractor has not ce4D11ed with such requirements,
the Geernment shall inform the Contractor in writing of the proper
acticrs to he taken in order to effect compliance with such requirements.
(o) If, subsequent to the date of the contract, the security
classifications or security requirements under this contract are
changed by the Government as provided in his clause, and if such
change causes an increase or decrease in the estimated cost of
performance of this contract, the estimated cost and fixed fee,
shall, to the extent appropriate, be sutject to an equitable adjustment.
Any such equitable adjustment shall be accomplished in the manner set
forth in the "Chances" clause of this contract.
(,) The C ntractor agrees to insert, in all subc ntracts hereunder
which involve access to classified information, previsi-rs which shall
confelL?m substantially to the language ef this clause, including this
paragraph (0 but excluding paragraph (e) of this clause. The
Contractor may insert in any such subcontract, and any such subcontract
entered into thercunder may contain, in lieu of paragraph (o) of this
clause, provisj ns which aermit equitable adjustments to be made in the
subcontract price or in the estimated cost and fixed fee of the
subcontract (as appropriate to the typo of subcontract involved) on
account of changes in security classificati ns or requireuents made under
the provisions of this clause subsequent to the date of the subcontract
involved,
(p) The Contractor also agrees that it shall deter-line that any
subcontractor proposed by it for the furnishing of supplies and services
Nome which will involve accoss to classified infornatien in the Contractor's
custody has been crarrtcd an apprpr ic facility security clearance, which
is still in effect, prior to being accorded access to such classified
information,
WALSH-HEALEY PUBLIC CONTRACTS ACT (SPR 12-604 AFPI 7-404,8)
If this contract is for the manufacture or furnishing of materiels,
supplies, articJes or equipment in an amount which exceeds or may
exceed 101(-'..) and is otherwise subject to the Walsh-Healey Public
Contracts Act, as amended (41 U.S. Cede 35-45), there are hereby
incorp rated by reference all representatiLns and stipulations required
by sai' Act and ree,ulati ns issued thereunder by the Secretary of Later,
such r..xesentatiens and stipul?tiens being subject to all applicable
rulinge and inborp.ro- Hns cf the Secretary of Labor which are now
or ma;,, hereafter be in effect.
? 35 ?
(cm Apr. 18, '58)
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29. GRATUITIES (ASPR 7-104.16 AFF1 7-404.9)
(a) The Goverment may, by written notice to the Contractor,
tcelainate the right of the Contractor to proceed under this contract
i it is found, after notice and, hearing, by the Secretary or his
day authorized representative, thatIgratuities (in the form of
entertainment, gifts, or otherwise) were offered or given by the
Contractor, or any agent or representative of the Contractor, to
any officer or employee of the Goverpment with a view toward
securing a contract or securing favoimble 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 whiqh the Secretary or his duly
authorized representative makes such findings shal2 be in issue
and may be reviewed in any competent court,
(b) In the event this contract is terminated as provided in
paragraph (a) hereof, the Government shall be entitled (i) to pursue
the same remedies against the Contractor as it could pursue in the
event of a breach of the contract by the Contractor, and (ii) as a
penalty in addition to any other damages to which it may be entitled
by law, to exemplary damages in an amount (as determined by the
Secretary or his duly authorized representative) which shall be not
less than three nor more than ten times the costs incurred by the
Contractor in providing any such gratuities to any such officer or
employee.
(0) The rights and remedies of the Government provided in
teis clause shall noc, be exclusive and are in addition to any
other rights and remedies provided by law or under this contract.
30. NEGOTIATED OVERHEAD RATES (ASPR 3-704.1 AFPI 7-404.12)
(a) Notwithstanding the provisions of the clause of this
contract entitled "Allowable Cost, Fixed Fee, and Payment," the
allowable indirect costs under this contract shall be obtained by
applying negotiated overhead rates to bases agreed upon by the parties,
as specified below.
(b) The Contractor, as soon as possible but not later than
ninety (90) days after the expiration of each period specified in
the Schedule, shall submit to the Contracting Officer a proposed
final overhead rate or rates for that period based on the Contractor's
actual cost experience during that period, together with supporting
cost data. Negotiation of final overhead rates by the Contractor
and the Contracting Officer shall be undertaken as promptly as
practicable after receipt of the Contractor's proposal.
(c) Allowability of costs and acceptability of cost
allocation methods shall be determined in accordance with ASPR, ?
Section XV, Part 21 as in effect on the date of this contract.
? 36 ?
(CPFF Apr. 18, 158)
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Nor,
(d) The results of each negotiation shall be set forth in an
amendment to this contract, which shall Specify (i) the agreed
final rates, (ii) the bases to which the rates apply, (iii) the
periods for wleich the rates apply, and (ikt) the specific items
treated as direct costs or any changes in the items previously
agreed to be direct costs.
(e) Pending establishment of final overhead rates for any
period, the Contractor shall be reiMtursed either at negotiated
provisional rates as provided in the )Schedule or at billing rates
acceptable to the Schedule or at billing rates acceptable to the
Contracting Officer subject to appropriate adjustment when the
final rates for that period are established. To prevent
substantial over or under payment, the provisional or billing
rates may, at the request of either party, be revised by mutual
agreement, either retroactively or prospectively. Any such
revision of negotiated provisional rates provided in the Schedule
shall be set forth in an amendment to this contract.
(f) Any failure by the parties to agree on any final rate or
rates under this clIkuse shall be considered a dispute concerning a
question of fact for decision by the Contracting Officer within the
meaning of the clause of this contract entitled "Disputes."
31. DELAY IN DELIVERY OF DATA (AFPI 7-4036)
(a) It is undfotood that the efficient use by the Government
cp:' the supplies called for hereunder requires that the data called
for hereunder be delleyered not later than the time or respective
times herein specified. If such data is not deliver-el at said time
or tines, the Government may at its election so long as such data
raaains undelivered, unless the delay in delivery thereof arises
out of causes beyond the control and without the fault or negligence
of the Contractor within the meaning of this clause hereof entitled
"Default," withhold payment to the Contractor for any of the amounts
then due, refuse aeproval of the Contractor's vouchers and refuse to
accept further deliveries hereunder from the Contractor or take any
other action authorized by law or regulation now or hereafter in
effect including termination of the contract for default to the
extent and in the manner authorized by said clause, and may take
any or all of the foregoing actions separately or in combination.
(b) The provisions of this clause shall only be applicable to
technical data, such as handbooks, service manuals, or other
information necessary for the proper maintenance of servicing of the
end items called for herein.
32. SUPFESEDING SPECIFICATIONS WTI 7-404,14)
All references in any Government Specification incorporated
herein to other Government specifications shall be deemed to
include all specifications supplementary to or superseding the
specifications so referred to, to the extent that such supplementary
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vale
',0?1
or superseding specifications ate in effect at the date of Contractorls
latest quotation if the Contractor was furnished or otherwise notified
of the existence of such suppletentary Or superseding specification
at the time of said quotation.
33. FLAHT RISK (AFFI 7-4022)
(a) As used in this clause the term "Operation" includes tests
of aircraft, tests of equipment and accessories installed therein,
and the operation of any power plant installed therein, whether or
not the aircraft is in motion during the making of any such test or
operation of any such power plant.
(b.) Notwithstanding the provisions of paragraph (f) of the
clause of this contract captioned "Government Property," the
Contractor shall be liable for loss and destruction of and damage to
aircraft (including equipment and accessories installed therein),
to which the Government has title pursuant to the provisions of this
contract or otherwise, occut-r.71,4 in the course of operations of such
aircraft conducted by the Contractor in the performance of this
contract unless personnel conducting such operations are furnished
by the Government or are approved in writing by the Air Materiel
Area Commander having administrative responsibility for this
contract, or his repYesentative to whom such authority has been
delegated. The provisions of this clause shall supersede any
provisions of apelicn-e Air Force specifications insofar as such
speeifications relate to Contractor's liability in connection with
such operations.
c) If prior to final acceptance by the Government, any aircraft,
as referred to in paragraph (b), are lost, destroyed, or damaged
durilig such operation, and if the risk of such loss, damage, or
destruction is borne by the Government under paragraph (f) of
the clause hereof entitled "Government Property," the Government nay
terminate this contract with respect to such aircraft, or in case
such aircraft is damaged, the Government may require the Contractor
to restore such aircraft to the condition in which it was immediately
prior to such damage. If the Government terminates this contract
with respect to such aircraft, the Contractor shall deliver to the
Government at the place at or from which such pporation is conducted
all or such parte of such aircraft as the Contracting Officer may
designate. If the Government requires the aircraft to be restored
as aforesaid, an equitable adjustment shall be made in the estimated
cost and fixed-fee, if any, and in the time required for its
performance, and this contract shall be modified in writing accordingly.
(d) Any dispute that may arise under the provisions of this
clause shall be determined as provided in the clause hereof entitled
"Disputes."
(CPFF Apr. 18, '58)
? 38 ?
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34. ALTERATIONS (ASPR 7-105.1 AFPI 7-404.10)
The following alterations have been made in the provisions of
this contract.
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(CPFF Apr. 18, 158)
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