NEGOTIATED CONTRACT CONTRACT NO. AF33(600)-37230

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89B00709R000200380058-3
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 52
• Document Creation Date: December 22, 2016
• Document Release Date: January 9, 2012
• Sequence Number: 58
• Publication Date: June 30, 1958
• Content Type: MISC

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CONTRACT CONTRACT NO. A733(600)-37230
Missile System Division
Lockheed Aircraft Corporation
Sunnyvale, California
Has, Invoices to: Performance Period/Delivery
See APr.swX S I
This contract is entered into, by and between the United States of Aiiaa, hereinafter
called the Government, represented by the Contracting Officer executing this contract,
and the above-need Contractor which is a Corporation, incorporated in the State of
California, hereinafter called the Contractor.
The Parties hereto agree that the Contractor shall furnish the necessary facilities
and deliver all supplies and shall perform all the services set forth in the attached
schedule issued hereunder for the consideration stated fierein.
The rights and obligations of the parties to this contract shall be subject to and
governed by the attached Schedule APPEWI( I and General Provisions, which together
t.h this signature page and the accompanying certificate comprise this Contract No.
A933(6oo)-3723O. In the event of any inconsistency between the Schedule and the Gen-
eral Provisions, the Schedule shall control.
IN WI'TN SS Wes', the parties hereto have executed this contract as of 30
. igs8
Signatures:
Missile Systems Division UN STAM OF AMC=
Lockheed Aircraft Corporation
L~J~ I
Title 7p",e / AJ ~titc ?- Confraati~ Officer
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PAM NMM
PART I
SUPPLIES AND SERVICES TO BR FED
iv
PART II
Cf~18IDERJITI(E< AND PAYIBNT
iv
PART III
ffi'LIPSRY SCB
iv
PART IV
PRICE A?ItZ
V
PART V
PROGRESS PAfNIM
Ti
PART VI
INSPECSICI AND ACCEPTANCE OF 8UPPLIEB AID
CORRBCTTIt'RS ENr DBIB B
Viii
PART VII
FUR IISSIND tB' NAML4L8 AND SUWLIBB AT TIE
' S OPTION .
ix
PART VIII
WAIVER (W BB TIRE1
8 a!' QENERAL PWVISI($
ix
PART IX
SPECIAL SECURITY
'RICTIf
x
PART X
INSPECTION AID AUDIT
x
PART XI
SIDC -ITRACTO FOR
( SERVIC.
x
PART in
LBSTSB CONTRACT SUPJMBBMM
XL
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Contract Mo. AF33(600)-37230
PART I - BtWPL3 SS AID SWIM TO Bi
The Contractor shall provide the supplies and services set forth in
the attached Appendix I, such Appendix I being a part of the Schedule under
this contract.
P A R T II - CO ISSRATIOp AID PAD J2
a. In accordance with the clause of this contract entitled "PAYIQffi,"
and subject to redetermination of the price in accordance with the pert of
this Schedule entitled "PRICK Op," the Qovernnsnt stall pq the
Contractor upon satisfactory perforce of this contract, as full payment
for the w2p
ies and services to be furnished hereunder, the amount of
which amount is the total price set forth in Appendix I hereto. 25X1
b. As of the date of execution of this contract, there has been
allotted for this contract the anouat net forth above. This amount is sub-
ject to increase or decrease, in accordance with the part of this Schedule
entitled, "PRICE ." In addition, the Qovernoent may increase
this amount from time to tins solely at its discretion, such increased amount
to be subject at the proper time to the redetermination provisions of the
part of this Schedule entitled "PI i CN CI." If at any time the
Contractor has reason to believe that by reason of performance by it, of this
contract, the amount doe it will exceed the sum allotted to thia contract,
it shell notify the Contracting Officer to that effect. notwithstanding any
other provision of this contract, the Contractor shall not be obligated to
furnish any services pursuant to this contract, if is the best judgement of
the Contractor, the cost of such services will exceed the count allotted to
this contract. The Gave at shall not be obligated to pq the Contractor
under this contract any amount in excess of the sea allotted.
PAW III - 1 WL.IY SC]MV=
Deliveries shall be made in accordance with the delivery schedules set
forth in Appendix I hereto. Except as otherwise specified pursuant to the
clause hereof entitled "Changes," the units shall be delivered to the Govern-
mat f.o.b. Contractor's plant.
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PART IT - PRICI 11 .. aB
a. Because of the experinental and developnsntal nature of the work
called for by this contract and the great uncertainty as to the cost of per-
fo>rnauce hereunder, the parties agree that the contract prices set forth in
Appendix I hereof my be increased or decreased in accordance with the provi-
sions of this clause.
b. Upon completion of delivery of aim (9) units or upon expenditure
of 75 percent of the total contract mount as set forth in Part II hereof,
whichever shall occur first, the parties shall negotiate to revise the price
of all itens theretofore and thereafter to be delivered.
c. As soon as practicable and is no case mare than 45 " after the
completion of delivery or expenditure of funds referred to above, the con-
tractor shall furnish to the Contracting Officer a statensat showing in such
fora and detail as the Contrracting Officer say prescribe the Contractor's
cost of producing the supplies or furnishing the services called for here-
under, together with such iafcrsatian as my be pertinent in the negotiations
for a revised price pursuant to this clause. dash stateeat of cost shall
fairly reflect the normal operation of the Contractor's cost system except
to such extent, if any, as security restrictions necessitate loons departures
therefrom.
d. Upon the of the statensat and other pertinent information
required by paragraph (e of this Clause, the Contractor and the Contracting
Officer will proWly negotiate is good faith to agree upon a reasonable re-
vised price for the entire contract which, upon the basis of such statement
and other pertinent information, will constitute fair and just ee^peasation
to the Contractor for the performance of this contract. In determining the
extent of any estimated allowance for profit to be taken, into account in
fixing such revised price, consideration will be given to the extent to
which the Contractor has perforned the contract with efficiency, econoq, and
ingenuity. She revised price shall be evidenced by a supplensatal agreement
to this contract, and in the event that the negotiations for price revision
in a co-dance with this Clause indicate that the uncertainty as to the cost
of co4-lete performance is still so great as to prevent a realistic deter-
ai nation of the final price for the over-all cagpletion of this contract,
provision MW be made for such future revision of the price as nay be appro-
priate to the circumstances at that tins.
e. If within 60 days after the completion at delivery or expenditure
of funds referred to in (b) above the parties shall fail to agree upon a re-
vised price is accordance with the provisions of this Clause, the failure to
agree shall be deemed to be a disagreement as to a question of fact which
shall be disposed of in accordance with the Clause hereof entitled "Disputes."
(v)
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f. In the event of a price increase the Government will pay or credit
to the Contractor the amount by which the revised prices shall exceed the
contract price aforesaid. In the event of a decrease in price, the Con-
tractor will repay or credit the amount of such decrease to the Government
in such manner as the Contracting Officer may direct.
PART V - PROGR88S PATI
a. Progress payments, which are hereby defined as pay uts prior to
acceptance on work in progress for the Government under this contrast, may be
made upon the following tern and conditions.
b. The Contracting Officer, may, from time to time, authorize progress
payments to the Contractor upon property acquired or produced and services
performed by it for the performance of this contract:
PROYIh#'i-, that such progress payments hail equal 90% of the prime contractors
actual incurred costs and 100% of amounts paid to subcontractors. In no
event, however., shall the total amount paid exceed 99% of the amount author-
ized for expenditure. Costs shall be determined from evidence submitted by
the Contractor and whim h most be such as is satisfactory to the Contracting
Officer as being representative of the value of the work already performed.
Provided further that in no event shell the total of unliquidated progress
payments (see (e; below) and of unliquidated aavanee payments, if cep, made
under this contract, ex"ed 80 % of the total contract price of supplies or
services still to be delivered.
a. Upon the making of any progress payments wader this contract, title
to all parts, materials, inventories, work in process and nondurable tools
theretofore acquired or produced by the Contractor for the performance of this
contract, properly chargeable thereto under sound accounting practice,
shall forthwith vest in the Government; and title to all like property there-
after acquired or produced by the Contractor for the performance of this con-
tract and properly chargeable thereto as aforesaid shall vest in the Govera-
meat forthwith upon said acquisition or production: Provided, that nothing
herein shah] deprive the Contractor of any further progress or final payments
due or to become due hereunder; or relieve the Contractor of the Government
of any of their respective rights or obligations under this contract.
d. The Contractor represents and warrants that the property, upon which
any progress payments be made hereunder, shall be cleared of all liens and
encumbrances of any kind whatsoever upon receipt of sager progress peyrment.
e. In making perment for the supplies furnished hereunder, there sha11
be deducted from the contract price therefor a proportionate amount of the
progress payments theretofore made to the Contractor, under the authority
herein contained.
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f. It is recognized that property (including, without limitation
completed selies, spare parts, drawings, information, partially completed
supplies, work in process, materials, fabricated parts and other things
called for herein) title to which is or may hereafter become vested In the
government pursuant to this Clause will frog time to time be used by or put
in the care, custody or possession of the Contractor in connection with the
performance of this contract. The Contractor, either before or after re-
ceipt of Notice of Termination at the option of the Oovernmaant, my acquire
or dispose of property to which title is vested in the government weer this
Clause, upon terms approved by the Contracting Officer; provided, that after
receipt of Notice of Termination any such property that is a part of termin-
ation inventory may be acquired or disposed of only in accordance with the
provisions of the termination clause of this contract and applicable laws
and regulations. The agreed price (in own of acquisition by the Contractor)
or the proceeds received by the Contractor (in case of any other disposition),
shall, to the extent that such price and proceeds do not exceed the unliqui-
dated balance of progress payments hereunder, be paid or credited to the Oorv-
ernment as the Contracting Officer shall direct; and such unliquidated bal-
ance shall be reduced accordingly. Ctrrent production scrap my be sold by
the Contractor without approval of the Contracting Officer but the proceeds
will be applied as provided in this paragraph (f), provided that any such
scrap which is a part of termination inventory my be sold only in accordance
with the provisions of the termination clause of this contract and applicable
laws and regulations. Upon liquidation of all progress payments hereunder or
upon completion of deliveries called for by this conntract, title to all pro-
perty (or the proceeds thereof) which had not been delivered to and accepted
by the Government under this contract or which has not been incorporated in
supplies delivered to and accepted by the government under this contract cad
to which title has vested in the government under this Clause shall vest in
the contractor.
g. Mn hprovisions of this contract referring to "Liability for Govern-
ment-furnished Property" and s my other provisions of this contract defining
liability for government-furnished property shall be inapplicable to properttiy
which the Government shall have acquired title solely by virtue of the provi-
sions of this Clause. The provisions of this Clause shall not relieve the
Contractor from risk of loss or destruction of or damage to property to which
title vests in the Government under the provisions bereef.
h. If this contract (as heretofore or hereafter supplemented or
amended) contains provisions for Advance Payments, and in addition if at the
time any progress payment is to be made to the Contractor under the provi-
sions of this progress payments clause any ualiquideted balance of advance
payments is outstanding, than notwithstanding any other provision of the Ad-
vance Payments Clause of this contract the net count, after appropriate
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deduction for liquidation of the advance payment of such progress payment
shall be deposited in the special bank account or accounts maintained as
required by the provisions of the Adveace Payments Clause, and shall there-
after be withdrawn only !e'er to such provisions.
PART VI - Id>E34SCTIOi AIM ACCXPTA1( t!' SUPPLIN AMD Cii CP DoPSCSB
a. The Contractor shall provide and maintain an inspection systsm
acceptable to the Contracting Officer covering the supplies hereunder.
b. All supplies (including raw materials, components, intermediate
assemblies and and products) may be inspected by the contracting Officer at
any time during the period of mra facture. If the Contracting officer so
elects by notice in writing to the Contractor, the Contractor shall tender
the supplies for acceptance at the specified delivery points specified in
Part III hereof, in which event the Contractin8 Officer may accept them or,
if they are defective in material or worlnabip or otherwise not in confora-
ity with the requirements of this contract, may reject them or require their
correction. In the event the Contracting Officer does not so elect, supplies
delivered shall be deemed to be accepted on the mailing by the Contractor
to the Contracting Officer of a certificate of the Contractor, reading sub-
stantially as follows:
I hereby certify that I did., on the day of
ship via
._._,
pursuant to Contract NO.
units (or per centt) at the supplies c d for in
Item therein: that such supplies were of the
quality -allele -for and were in all respects in accord
with the applicable specifications.
c. Upon completion of pertormence and final payment by the Government,
all the supplies called for herein shall be deemed to be finally accepted.,
subject to the following guaranty:
The Contractor guarantees that at the time of delivery thereat,
the articles and/or equipment provided for under this contract will
be free fron any defects in material or Morkmansbip and will con
form to the requirements of this contract. Notice of any such de-
fect or noscca4!'armaaoe sba1l be given by the Ooveraaent to the Con-
tractor within six months of the delivery of the defective or non-
conforming article and/or equipment. If required by the Government
within a reasonable tiros after such notice, the Contractor shall
with all possible speed correct or replace the defective or noncon-
forming article and/or equipment or part thereof. When such correc-
tion or replaemfaent requires transportation of the article and/or
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equipannt or pert thereof, shipping costs, not exceeding usual
charges From the delivery point to the Contractor's plant and
return, shall. be borne by the Contractor; the Government shall
bear all Other shipping costs. We Guaranty shall than con-
time as to corrected or replacing articles and/or equipment or
parts thereof, until six months after the date of redelivery.
if the Government does not require correction or replacement of
a defective or nonconforming article and,/or equipment or a part
thereof, the Contractor, if required by the Contracting Officer
within a reasonable tine after the notice of defect or nonoon-
fornence shall repay such portion of the contract price of the
article as is equitable in the circumstances.
PART VII - FUFMUM CF NAMRIAIB AND 8U LI AT TBI aW~W B OPTIOR
The Government may at its option, from time to time, furnish the con-
tractor with materials or supplies not obtainable in the open market and
which are required by the Contractor for the performance of this contract.
In such event an equitable reduction in the contract price shall be made
prior to the delivery of such materials or supplies to the Contractor or
as soon thereafter as possible, but in no event later than thirty (30) days
after such delivery.
PART VIII - WAIVE OF Im 111 lB Cr OEM= PROVIBIOM
Nbtvithstanding the requirements of my of the general Provisions of
this contract to the contrary, whensoever the Contractor, in performance of
the work under this contract, shut. find that the requirements of say of the
clauses of the General Provisions are in conflict with security instructions
issued to the Contractor by the Contracting Officer or by his duly authorized
representative for security matters, the Contractor shell call the attention
of the Contracting Officer to such conflict and the Contracti Officer or
his duly authorized representative for security matters shall(i) modify or
rescind iu security requirements or (ii) the Contracting Officer shall
issue to the Contractor a waiver of compliance with the requirements of the
General Provisions conflicting with such security requirements. Any waiver
of ccm>Alianoe with the general Provisions of this contract issued by the
Contractting Officer shall be in writing, except that the approval by the Con-
tracting Officer of anyry subcontract issued hereunder by the Contractor shall
be deemed to constitute approval of waiver of any clauses of the general Pro-
visions in conflict with the stipulations of such subcontract.
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PART IX - SPECIAL CITY 1 WIRICTIC
fte Contractor shell not reveal. (i) the specific nature or any de-
tails of the work being performed hereunder or (ii) any information what-
soever with respect to the department of the OoverNmemt sponsoring this con-
tract and the work thereunder except as the Contractor is directed or permit-
ted to reveal such information by the Contracting Officer or by his duly
authorized representative for security natters, and notwithstanding any
clause or section of this contract to the contrary, the Contractcr shall not
interpret any clause or section of this contract as requiring or permitting
divulgence of such information to any person, public or private, or to any
officer or dspmeiaeat of the Government without the express consent of the
Contracting Officer or his duly authorized representative for security net-
tars.
PART X - ]ZI1CTIC AID AUDIT
a. The Contractor agrees that its books and records and its plants,
or such part thereat as nay be engaged is the performance of this contract
shall at all reasonable time be subject to in^ .sUaa and audit when and to
the extent authorized by the Contracting Officer.
b. The Contractor agrees to include is each of his subcontracts here-
under which is on a cost or cost-plus-a-fixed fee or a price redetermination
basis, or on a time-and-material or labor-hour basis, provision for audit of
such subcontract by the Contractor. The Contractor shall camduct an audit
of any such subcontract when requested to to so by the Contracting Officer.
PAR! XI - 8UBCC'RAOTIB PM VORX OR SIHPICIB
a. No contract shall be made by the Contractor with any other party
for furnishing any of the completed or substantially oaepleted articles,
U parts or work, herein contracted for, without the written approval of
the Contracting Officer as to sources.
b. The Contractor shall give specific advance notification to the Con-
tracting Officer of any proposed subcontract hereunder which (1) is on a cost
or cost-plus-a-fixed-fee basis, or (2) is as a fixed-price basis exceeding in
dollar amount either $25,400 or five percent (5%) of the total count of this
contract.
c. The Contractor shall not, without the prior written consent of the
Contracting Officer, place any subcontract which (1) is on a cost or cost-
plus-a-fixed-fee basis, or (2) is on a fixed-price basis exceeding in dollar
amount either $25,000 or five percent (5%) of the total amount of this
(x)
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contract, or (3) provides for the fabrication, purchase, rental, installa-
tion or other-acquisition, of any item of industrial facilities, or of spe-
cial tooling having a value in excess of $1,000, or ($) is on a time-and-
material or labor-hour basis. The Confronting Officer.m y, in his discretion,
ratify in Writing any such subcon ct; such action shall constitute the con-
sent of the Contracting Officer as required by this paragraph a.
d. The Contractor agrees that no subcontract placed under this contract
shall provide for payment on a cost-plus-a-percentage-of-cost basis.
e. MW Contracting Officer aq, in his discretion, specifically approve
in Writing any of the provisions of a subcontract. Sancever, such approval or
the consent of the Contracting Officer obtained as required by this clan"
shall not be construed to constitute a determination of the acceptability of
the subcontract price, unless such approval specifically provides that it co*.
stitutes a determination of the acceptability of the subcontract price.
f. The Contracting Officer may approve all or any part of the Con-
tractor's purchasing system and from time to tine rescind or reinstate such
approval. Such approval shall be deemed to fulfill the requirements for ob-
taining the Contracting Officer's consent to subcontracts as prescribed in
paragraph c above.
PART XII - Lerxs 0QdB 'T This is the Definitive Contract contemplated by the Letter Contract
issued by the Govermaeat and accepted by the Contractor on April 29, 1958,
effective Warch 15, 1958, and supersedes said Letter Contract. Work performed
and payments made, if any, user said Letter Contract shall be deemed to be
Work performed and payments made wider this Definitive Contract. he date of
the Letter Contract shall govern for the datesidaatian of the priority status
of this Definitive Contract. In the event of conflict between this Definitive
Contract *ad said Letter Contract, this Definitive Contract shall prevail.
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WORE 8~
IZVL.0P1SPT tp A BA22LIST! AND RI00V Y SYd
Develop and provide, except as specifically set forth below, all
equiprat, services, and facilities necessary to conlete a program of
photo-re000 swam of the 80Yiet Ica. no phete-re eoanaia ce sys-
tem sba11 have the following design paransters.and objectives:
a. A satellite-borne system compatible with the
system but employing the Thor booster.
b. The design will be compatible with the overt biomedi-
cal program of
c. Photographs shell be obtained at a ground resolution
of 25 feet or better (as defined in the basie0 contract) 25X1
with a looational accuracy objective of 1 mile.
d. Nwdw R possible ground coverage shill be obtained con-
sistent with the ground resolution requireneats mad pmyrload eapa-
bility of the booster system.
e. Latent image film shall be recovered by means of ballis-
tic re-entry sad land or sea recovery.
f. The center of the recovery area shell be within 200
nanticsl miles at a desipated location with a dispersion (90% of
insets) of x = 200 nantical miles, y = 75 nautical miles or
less.
Delivery of equipment to time flight test and operations shall be in
accordance with the attached schedule. Tie actual firing dates will be gov-
erned by target operatiemal factors. The dates set forth on the delivery
schedule rap~'eaeat the flight readiness dates.
The following shall be provided by the Goverment and shall not be
developed or snplies mader this contract:
a. Thor boosters, associated receipt checkout and launch facil-
ities, equipment and services.
to. All steams end services developed or used on the E::~- 25X1
gram which can profitably support this receonaissenes program. These ele-
a nts will be progr d overtly in mate quantities and in a timely
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fashion, as part of either the basic l --Jar -the- liardfcs3_ satellite
Wopnow., or of other programs as way be dsteraiasd but will actually be
intended to support this recoverable recommissanoe program. She intent
is to retain as may elannts of the overall operation in an evert status
as possible. Where an item. or service can be programed openly without
revealing its uitisrate usage, it vill be charged to the cover program and
not to this contract.
c. Recovery ships and/or aircraft, and their normal operating
persomoel and suprport. (Special equipment, training or trained personnel
required for "arch and recovery will be provided by the contractor).
d. Special receipt and checkout space and facilities at the
=stablish and maintain technical and managensat central of such sub-
contractors as are required for the proper execution of the work statement.
lfa.or subcomtractors in&eluds :
a. I'1'i!t Corporation will develop and mm ' scture the recoomais-
sance camera and associated equipment.
b. General Xlectrie Cospay will develop and manufacture the
re-entry body.
Technical direction of the program is the point responsibility of sev-
oral agencies of the Goveraasat. In the interest of effective managiement,
however, such direction will be provided primarily by aed thneogh the Air
Force Ballistic .ssi a Division acting as the agent for all interested com-
ponents of the Government. A Project Od'tieer will be established in So as
the single day-by-day point of contact for the contractor. This Officer will
have authority to male ca-tie-spot decisions within the scope of the work
statement OR all natters pertai ing to the program other than these of major
ispcrtance. Frog tins to tins the Government agencies concerned will jointly
review the progress of the program. She Goversgs vet rill make arras fpemests
to permit the prcgt remdsriag of major decisions concerning tie program
which cannot be m a by the Project Officer.
Special security measures will be required throughout the program.
The complete security plan, clearance of facilities and at individuals knowl-
edgsable of the proms, and other matters relating to security will be
unde the direction of a designated authority within the Goverasrat. She
contractor will provide such special security measures within his ova facili-
ties, ' facilities, or Goverment facilities provided for this
project, as may be required to ooafora with the security plan.
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Prepare 1011th1Y lsttsr status rspOrts which prsseat is brief fern
the tealwicai aai fiscal status of the pro. The fiscal status sha11
shay ssparstely the status of the or aubeamiltraetOrs .
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itraeture & Instauations
Amciliary Paver Uait
Antennas
Ground Nquipment
PROTOTYF
Fabrication & Assembly
It
MOMIMIP
Complete Spam UUUZS+Aan
complete Weight & DKIAnce
FLWM iIIII'PB
Assembly & Test
Spare amits
FLIM ems
A
J
A
S
O
I
D
J
F
X
A
K
J
J
A
B
O
J
D
x
x
x
x
x
x
x
x
1
I
I
A
3
a
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INDEX TO GENERAL PROVISIONS
Article Noe
Page No.
1.
DEFINITIONS----------------------------------
1
2.
CHANGES--------------------------------------
1
3-
EXTRA.S----------- ---------------------------
2
4.
VARIATION IN QUAN''TY------------- ------------
2
5.
INSPECTION-------.... .-------------------------
2
6.
RESPONSIBILITY4%4UPPLIES------------------
3
7-
ASSIGNMENT OF -------------------------
3
8.
ADDITIONAL BONA SECURITY---------------------
4
9.
FEDERAL STATE & LOCAL TAXES------------------
4
10.
DISPUTES---------T-------------------- -------
6
11.
t3UY AMERICAN ACT--*------------ ------------- -
7
12.
EIGHT HOUR LAW OF 1912-----------------------
7
13-
WAL$H-HEALEY PUBL4P CONTRACTS ACT------------
8
14.
NONDISCRIMINATION IN EMPLOYMENT--------------
8
15.
OFFICIALS NOT TO BENEFIT---------------------
9
16.
COVENANT AGAINST CONTINGENT FEES-------------
9
17.
AIRCRAFT IN THE OPEN-------------------------
9
18.
MILITARY SECURITY REQUIREMENTS---------------
11
19.
UTILIZATION OF SMALL BUSINESS CONCERNS-------
13
20.
XAMINATION OF RECORDS-----------------------
13
21.
GRATUITIES-----------------------------------
13
22.
CONVICT LABOR--------------------------------?
14
23-
NOTICE & ASSISTANCE REGARDING PATENT
INFRINGEMENT-------------------------------
14
254.
REPORTING OF RO7GALTIES------------ -----------
14
25.
FILING OF PATENT APPLICATIONS----------------
16
2i.
AUTHORIZATION & CONSENT----------------------
17
27-
PATENT RIGHTS--,7 ------------------------------
17
28.
COPYRIGHT-- ----------------------------
22
29.
REPRODUCTION AID USA OF TECHNICAL DATA-------
22
30-
GOVERNMENT FURNISHED PROPERTY----------------
23
31-
TERMINATION FOR CONVENIENCE OF THE
GOVERNMENT---------------------------------
27
32.
PAYMENTS-------------------------------------
31
33?
DEFAULT--------------------------------------
32
34.
SUBCONTRACTS FOR WORK OR SERVICES------------
33
35?
Employment of Aliens--------------------------
35
36.
Flight Risks----------------------------------
35
37.
Renegotiation-Vinson-Trammel Act--------------
36
38.
Alterations in Contract-----------------------
36
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GENERAL PROVISIONS
As used throughout this contract, the following terms shall
have the meanings set forth below:
(a) The terra "Secretary" means the Secretary, the Under Secre-
tary, or any Assistant Secretary of the Department and the head or
any assistant head of the executive agency; and the term "his duly
authorized representative" means any person or persons or board (ether
than the Contracting Officer) authorized to act for the Secretary,-,and
the terra "Department" means that component cf the Government having
cognizance of this contruct and represented by the Contracting Officer
executing this contract.
(b) The term "Contracting Officer" means the person executing
this contract on behalf of the Government, and any other officer or
civilian employee who is a properly designated Contracting Officer,
and the terra includes, except as otherwise provided in this contract,
the authorized representative of a Contracting Officer acting within
the limits of his authority.
(c) Except as otherwise provided in this contract, the terra
"subcontracts" includes purchase orders under this contract.
(d) The term "contract work" means all work to be performed
under this contract including any studies covering fundamental, theo-
retical, or experimental investigations; any extension of the inves-
tigative findings and theories of a scientific and technical nature
into practical application; any tangible terms, hereinafter referred
to as supplies, if called for herein, furnished to the Government;
and any reports, data, computations, plans, drawings, and specifica-
tions with respect to the foregoing.
The Contracting Officer may at any time, by a written order, and
without notice to the sureties, make changes, within the general scope
of this contract, in any one or more of the following: (i) drawings,
designs, or specifications, where the supplies to be furnished are to
be specially manufactured for the Government in accordance therewith;
(ii) method of shipment or packing; and (iii) place of delivery. If
any such change causes an increase or decrease in the cost of, or the
time required for, performance of this contract, an equitable adjust-
ment shall be made in the contract price or delivery schedule, or
both, and the contract shall be modified in writing accordingly. Any
claim by the Contractor for adjustment under this clause must be as-
s:erted within 60 days from the date of receipt by the Contractor of
the notification of change; PROVIDED, however, that the Contracting
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Officer, if he decides that the facts justify such action, may receive
and act upon any such claim asserted at any time prior to final pay-
ment under this contract. Failure to agree to any adjustment shall
be a dispute concerning a question of fact within the meaning of the
clause of this contract entitled "Disputes." However, nothing in
this clause shall excuse the Contractor from proceeding with the con-
tract as changed.
Except as otherwise provided in this contract, no payment for
extras shall be made unless such extras and the price therefor have
been authorized in writing by the Contracting Officer.
4+. VARIATION IN QUANTITY
No variation in the quantity of any item called for by this con-
tract will be accepted unless such variation has been caused by con-
ditions of loading, shipping, or packing, or allowances in i.ianufac-
turing processes, and then only to the extent, if any, specified
elsewhere in this contract.
Ter}--z ttdc-
without limitation raw materials, components, intermediate assemblies,
and end products) shall be subject to inspection and test by the Gov
ernment, to the extent practicable at all times and places inclu . h
the period of r.anufacture, and in any event prior to filial ac taflce.
(b) In case any supplies or lots of supplies arc efective in
material er workmanship or otherwise not in conforr.' y with the re-
quirements of this contract, the Government sh ave the right
either to reject them (with or without inst ions as to their dis-
position) or to require their correction. upplies or lots of sup-
plies which have been rejected or re ' ed to be corrected shall be
removed or corrected in place, as quested by the Contracting Officer,
by and at the expense of the C ractor promptly after notice, and
shall not again be tendered or acceptance unless the former tender and
either the rejection or quirement of correction is disclosed. If
the Contractor fails omptly to remove such supplies or lots of sup-
plies, when request by the Contracting Officer, and to proceed
promptly with th replacement or correction thereof, the Government
either (i) ma y contract or otherwise replace or correct such sup-
plies and c rge to the Contractor the cost occasioned the Government
thereby, (ii) may terminate this contract for default as provided
in the ause of this contract entitled "Default". Unless the Con-
tract elects to correct or replace the supplies which the Government
has a right to reject and is able to make such correction or replace-
ri- t within the required delivery schedule, the Contracting Officer
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e to agree
reduction of price shall be a dispute concerning a question of fact
within the meaning of the clause of this contract entitled "Disputes
(c) If any inspection or test is made by the Government
premises of the Contractor or a subcontractor, the Contractor
additional charge shall provide all reasonable facilities and
ance for the safety and convenience of the Government inspect
the performance of their duties. If Government inspection
made at a point other than the premises of the Contractor
contractor, it shall be at the expense of the Government
that in case of rejection the Government shall not be
reduction in value of samples used in connection wi
or test. All inspections and tests by the Gove
formed in such a manner as net to unduly delay
ment reserves the right to charge to the Cont
cost of Government inspection and test when
the time such inspection and test is requ
acceptance or rejection of the supplies
practicable after delivery, except as
tract but failure to inspect and
neither relieve the Contractor fr
as are not in accordance with t
liability on the Government t
wi out
on
sist-
in
test is
a sub-
PROVIDED,
able for any
such inspection
t shall be per-
1 work. The Govern-
tor any additional
upplies are not ready at
ted by the Contractor. Final
all be made as promptly as
therwise provided in this con-
cept or reject supplies shall
responsibility for such supplies
contract requirements nor impose
(d) The inspection d test by the Government of any supplies
or lots thereof does no relieve the Contractor from nay responsibility
regarding defects or her failures to meet the contract requirements
which may be disco red prior to final acceptance. Except as other-
wise provided in is contract, final acceptance shall be eonclussivc
except as reg s latent defects, fraud, or such gross mistakes as
amount to f ud.
The Contractor shall provide and maintain an inspection
syst acceptable to the Government covering the supplies hereunder. r Re rds of all inspection - work- by the Contractor shall be kept com-
p ete and available to the Government during -the` parformance of this
ontract and for such longer period as may be specified elsewhere in
6. RESPONSIBILITY FOR SUPPLIES
Except as otherwise provided in this contract, (i) the Contractor
shall be responsible for the supplies covered by this contract until
they are delivered at the designated delivery point, regardless of
the point of inspection, and (ii) the Contractor shall bear all
risks as to rejected work after notice of rejection.
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for moneys due or to become due to the Contractor from the Govern-
ment under this contract may be assigned to a bank, trust company
or other financing institution, including any Federal lending ncy,
and may thereafter be further assigned and reassigned to an uch
institution. Any such assignment or reassignment shall ver all
amounts payable under this contract and not already d, and shall
not be made to more than one party, except that such assignment
or reassignment may be made to one party as 3-nt or trustee for two
or more parties participating in such fi ing. Nctwithhtanding any
provision of this contract, payment to assignee of any moneys due
or to become due under this contrae shall not, to the extent provided
in said Act as amended, be subje to reduction or set-cff.
(b) In no event sha
specifications, or othe
this contract, if ma
be furnished to at
or to any othe
that a copy
nished, o
assign
e Contracting Officer prior to the assignment of any rights under
opies of this contract or of any plans,
'similar documents relating to work under
'd "TOP SECRET," "SECRET," "C01'IDENTIAL,"
assignee of any claim arising under this contract
arson not entitled to receive the same; PR0VLDED,
any part or all of this contract so marked may be fur-
any information contained therein may be disclosed, to such
upon the prior written authorization of the Contracting Cffieer
(c) The Contractor shall obtain the written authorization of
8. ADDITIONAL BOND SECURITY
If any surety upon any bond furnished in connection with this
contract becomes unacceptable to the Government, or if any such
surety fails to furnish reports as to his financial condition from
time to time as requested by the Government, the Contractor shall
promptly furnish such additional security as may be required from
time to time to protect the interests of the Govermnent and of per-
sons supplying labor or materials in the prosecution of the work
contemplated by this contract.
FEDERAL, STATE AND LOCAL TAXES
(a) DEFINITIONS. As used throughout this clause, the following
terms shall have the meanings set forth below:
(i) The terra "direct tax" means any tax or duty
directly applicable to the completed supplies or
services (as distinguished from taxes directly ap-
plicable to materials and components used in the
manufacture or furnishing of the completed supplies
or services) covered by this contract or any other
tax or duty from which the Contractor or this trans-
- - _c.ction is exempt. It includes any tax or duty directly
-~T''PCSct ;? 1956)
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applicable to the i:aportation, production, processing,
manufacture, construction, sale, or use of such sup-
plies or services; it also includes any tax levied on,
with respect to, or measured by sales, receipts from
sales, or use of the supplies or services covered by
this contract. The terra does not include transportation
taxes, unemployment compensation taxes, social security
taxes, income taxes, excess profits taxes, capital stock
taxes, property taxes, and such other taxes as are not
within the definition of the term "direct tax" as set
forth above in this paragraph.
(ii) The terra "contract date" cleans the effective
data of this contract if it is a negotiated contract
or the date set for the opening of bids if it is a
contract entered into as a result of formal advertising.
For the purpose of any additional procurement of supplies
or services called for by any agreement supplemental
hereto, the terra "contract date" shall refer to the date
of such supplemental agreement.
(b) FEDERAL TAXES. Except as may be otherwise provided in this
contract, the contract price includes all applicable Federal taxes in
effect on the contract date.
(c) STATE OR LOCAL TAXES. Except as may be otherwise provided
in this contract, the contract price does not include any State or
local direct tax in effect on the contract date.
(d) EVIDENCE OF EXEMPTION: The Government agrees, upon request
cf the Contractor, unless there exists no legal basis to sustain an
exemption, to furnish a Tax Exemption Certificate or other similar
evidence of exemption with respect to any direct tax not included in
the contract price pursuant to this clause; and the Contractor agrees,
in the event of the refusal of the applicable taxing authority to ac-
cept such evidence of exemption, (i) promptly to notify the Contracting
Officer of such refusal, (ii) to cause the tax in question to be paid
in such manner as to preserve all rights to refund thereof, and (iii)
if so directed by the Contracting Officer, to take all necessary action,
in cooperation with and for the benefit of the Government, to secure
a refund of such tax (in which event the Government agrees to reim-
burse the Contractor for any and all reasonable expenses incurred at
its direction).
(e) PRICE ADJUSTMENT. If, after the contract date, (i) the
Federal Government or any State or local government either imposes
or increases (or removes an exemption with respect to) any direct
ts.x, or any tax directly applicable to the materials or components
used in the manufacture or furnishing of the completed supplies or
services covered by this contract, or (ii) the Federal Government or
any State or local government refuses to accept the evidence of exemp-
tion, furnished under paragraph (d) hereof, with respect to any direct
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tax excluded from the contract price, or (iii) the Federal Government
does not furnish a tax exemption certificate or other similar evidence
of exemption with respect to any direct tax excluded from the contract
price, and if under either (i), (ii), or (iii) the Contractor is
obliged to and does pay or bear the burden of any such tax (and does
not secure a refund thereof), the contract price shall be correspondingly
increased, and if interest and penalties are incurred by reason of
delay in payment of such tax on the instruction of the Contracting
Officer, and such interest and penalties are legally imposed, the con-
tract price shall be correspondingly increased, If, after the contract
date, '.he Contractor is relieved in whole or in part from the payment
or the burden of any direct tax included in the contract price, or any
tax directly applicable to the materials or components used in the
manufacture or furnishing of the completed supplies or services covered
by this contract, the Contractor agrees promptly to notify the Contrac-
ting Officer of such relief, and the contract price shall be corres-
pondingly decreased or the amount of such relief paid over to the
Government. Invoices or vouchers covering any increase or decrease
in cc.ritraet price pursuant to the provisions of this paragraph shall
state the amount thereof, as a separate added or deducted item, and
shall identify the particular tax imposed, increased, eliminated, or
decreased
(f ) REFUND OR DRAWBACK. If any tax or duty has been included
in the contract price cr the price as adjusted under paragraph (e) of
this clause, and if the Contractor is entitled to a refund or drawback
by reason of the export or re-export of supplies covered by this con-
tract, or of materials or components used in the manufacture or fur-
nishing of the completed supplies or services covered by this contract,
the Contractor agrees that he will promptly notify the Contracting
Officer thereof and that the amount of any such refund or drawback
obtained will be paid over to the Government or credited against amounts
due from the Government under this contract, PROVIDED, however, that
the Contractor shall not be required to apply for such refund or draw-
back unless so regliested by the Contracting Officer.
Except as otherwise provided in this contract, any dispute c:,n-
cerning a question of fact arising under this contract which is not
disposed of by agreement shall be decided by the Contracting Officer,
who shall reduce his decision to writing and mail or otherwise furnish
a copy thereof to the Contractor. Within thirty (30) days from the
date of receipt of such copy, the Contractor may appeal by mailing or
otherwise furnishing to the Contracting Officer a written appeal ad-
dressed to the Secretary, and the decision of the Secretary or his
duly authorized representative for the hearing of such appeals shall,
unless determined by a court of competent jurisdiction to have been
fraudulent or capricious or arbitrary or so grossly erroneous as neces-
sarily to imply bad faith, or not supported by substantial evidence, be
final and conclusive: PROVIDED, That, if no such appeal is taken, the
decision of the Contracting Officer shall be final and conclusive In
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cennection with any appeal proceeding under this clause, the Contractor
shall be afforded an opportunity to be heart 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 accor.".ance with the Contracting Officer's decision.
The Contractor agrees that there will be delivered under this con-
tract only such unmanufactured article*, materials and supplies (which
term "articles, materials and supplies" is hereinafter referred to in
this clause as "supplies") as have been mined or produced in the United
States, and only such manufactured supplies as have been manufactured
in the United States substantially all from supplies mined, produced
or manufactured, as the case may be, in the United States. Pursuant
to the Buy American Act (41 U. S. Code lOa-d), the fgregoing provision
shall not apply (i) with respect to supplies excepted by the Secretary
from the application of that Act, (ii) with respect to supplies for ase
outside the United States, or (iii) with respect to the supplies to be
delivered under this contract which are of a class or kind determined by
the Secretary or his duly authorized representative not to be mined, pro-
duced, or manufactured, as the case may be, in the United States in suf-
ficient and reasonably available commercial quantities and of a satis-
factn:)ty quality, or (iv) with respect to such supplies from which the
supplies to be delivered under this contract are manufactured, as are
cf a class or kind, determined by the Secretary or his duly authorized
representative not to be mined, produced, or manufactured, as the case
maybe, in the United States in sufficient and reasonably available com-
mercial quantities and of a satisfactory quality: PROVIDED, That this
exception (iv) shall not permit delivery of supplies manufactured out-
side the United States if such supplies are manufactured in the United
States in sufficient and reasonably available commercial quantities and
of a satisfactory quality.
12. EIGHT-HCUA LAW OF 1912
This contract, to the extent that it is of a character specified
in the Eight-Hour Law of 1912 as amended (40 U. S. Code 324-326) and
is not covered by the Walsh-Healey Public Contracts Act (41 U. S. Code
35-45) is subject to the following provisions and exceptions of said
Eight-Hour Law of 1912 as amended, and to all other provisions and ex-
ceptions of said Law.
No laborer or mechanic doing any part cf the work contempla-
ted by this contract, in the employ of the Contractor or any sub-
contractor contracting for any part of the said work shall be re-
quired or permitted to work more than eight hours in any one cal-
endar day upon such work, except upc 'th" condition that compen-
sation is paid to such laborer or mechanic in accordance with the
provisions cf this clause. The wages of every such laborer and
mechanic employed by the Contractor or any subcontractor engaged
in the performance of this contract shall be computed on a basic day rate of
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eight hours per day; and work in excess of eight hours per day is
? permitted only upon the condition that every such laborer and mechanic
shall be compensated for all hours worked in excess of eight hours
per day at not less than one and one-half times the basic rate of
pay. For each violation of the requirements of this clause a penalty
of fi\e dollars shall be imposed upon the Contractor for each such
laborer or mechanic for every calendar day in which such employee
is required or permitted to labor, more than eight hours upon said
work without receiving compensation computed in accordance with this
clause; and all penalties thus imposed shall be withheld for the use
and benefit of the Government.
13. WALSH-HEALEY PUBLIC CONTRACTS ACT
If this contract is for the manufacture or furnishing of mater-
ials, supplies, articles or equipment in an amount which exceeds or
may exceed $10,000 and is otherwise subject to the Walsh-Healey Public
Contracts Act as amended (41 U. S. Code 35-45), there are hereby incor-
porated by reference all representations and stipulations required by
said Act and regulations issued thereunder by the Secretary of Labor,
such representations and stipulations being subject to all applicable
rulings and interpretations of the Secretary of Labor which are now
or rriy hereafter be in effect, except that the Contractor shall not
be reg uzr ed to include this clause in subcontracts issued hereunder
when the inclusion of this clause in a Subcontract would jeopardi eZ
or conflict with the security considerations established in con.n.ec-
Lion with this contract. - - T - -
14. NONDISCRIMINATION IN EMPL0YNENT
(a) In connection with the_D=xf'.uri m e of work under this con-
tract, the Coatractorr-agreas-_not to discriminate against any employee
or applicant for employment because of race, religion, color, or
national origin. The aforesaid provision shall include, but not be
limited to, the following: employment, upgrading, demotion, or
transfer; recruitment or recruitment advertising; layoff or termina-
tion; rates of pay or other forms of compensation; and selection
fir training, including apprenticeship. The Contractor agrees to
post hereafter in conspicuous places, available for employees and
applicants for employment, notices to be provided by the Contracting
Officer setting forth the provisions of the nondiscrimination clause.
___--(b) The Contractor further agrees to insert the foregoing pro-
vision in all subcontracts issued hereunder, except subcontracts for
standard commercial supplies or raw materials, and except as insertion
of the foregoing 2rovision in a subcontract wguld.~eopasdize oror cor:-i`'~-
flict with- _thesecurl. e(';r?ider tions- established in connection with
contract. ----
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15. OFFICIALS NOT T`O BENEFIT
No member of or delegate to Congress, or resident commissioner,
shall be admitted to any share or part of this contract, or to any
benefit that may arise therefrom; but this provision shall not be con-
strued to extend to this contract if made with a corporation for its
general benefit.
16. COVENANT AGAINST CONTINGENT FEES
The Contractor warrants that no person or selling agency has been
employed or retained to solicit it secure this contract upon an agreement
or understanding for a commission, percentage, brokerage, or contingent
fee, excepting bona fide employees or bona fide established commercial
or selling agencies maintained by the contractor for the purpose of
securing business. For breach or violation of this warranty the Govern-
ment shall have the right to annul this contract without liability or in
its discretion to deduct from the contract price or consideration the
full amount of such commission, percentage, brokerage, or contingent fee.
17. AIRCRAFT IN THE OPEN
If this contract is a negotiated fixed-price type of contract for
production or modification of aircraft (or missiles having the general
characteristics of aircraft) the clause set forth below shall apply:
(a) Subject to the definitioas and limitations prescribed in
this clause, the Government assumes the risk of damage to or loss or
destruction of aircraft (or missiles having the general characteristics
of aircraft) in the open, PROVIDED, that such damage, loss, or d(struc-
tion is caused by any of the following perils;
(i) Fire; lightning, windstorm, cyclone, tornado, hail; explosion;
riot, riot attending a strike, civil commotion, vandalism and malicious
mischief; sabotage; aircraft or objects falling therefrom, vehicles running
on land or tracks, excluding vehicles owned or operated by the Contractor
or any agent or employee of the Contractor; smoke; earthquake or volcanic
eruption; flood, meaning thereby risin of a body of water, hostile or
warlike action, including action in hindering, combating, or defending
against an actual, impending or expected attack by any government or
sovereign power (de jure or de facto), or by any authority using military,
naval, or air forces, or by any agent of any such government, power, auth-
ority, or forces; or
(ii) Other peril of a type note ' c * above, if such other peril
is customarily b insurance irere ~)
covered by (or - a 'serve for self-insurance
in accordaaace with the normal practice of the Contractor, or a prevailing
practice in the industry in which the Contractoi is engaged with respect
to similar property.
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(b) For purposes of this clause :
(i) The term "Aircraft" means aircraft to be furnished to
the Government under this contract, including complete aircraft; and
aircraft in the course of manufacture or modification, including en-
gines, instruments, subassemblies, parts, and equipment installed
therein, or in process of installation, and all uninstalled property
withdrawn from stores for installation in aircraft in the open or
temporarily removed from such aircraft, provided such uninstalled pro-
perty is in the open.
(ii) The term "in the open" means located wholly outside of
buildings or roofed structures.
(c) The Government's obligation under this clause shall extend
only to aircraft in the open under conditions approved by the Contrac-
ting Officer, and shall not extend to the following:
(i) loss, destruction, or damage resulting from failure of
the Contractor, due to willful misconduct or lack of good faith of any
of the Contractor's managerial personnel, to maintain and administer a
program for the maintenance, repair, protection, and preservation of
aircraft in the open, in accordance with sound industrial practice. The
term "Contractor's managerial personnel" means the Contractor's directors,
officers, and any of its managers, superintendents, or other equivalent
representatives who have supervision or direction of all or substantially
all of the Contractor's business, or all or substantially all of the
Contractor's operation at any one plant or separate location at which
this contract is performed, or a separate and complete major industrial
operation in connection with the performance of this contract;
(ii) loss, destruction or damage to aircraft in the possession
or control of any subcontractor, except to the extent that the subcon-
tract, with the approval of the Contracting Officer and consistent with
this clause, may otherwise provide.
(d) The Contractor warrants that the contract price does not
and will not include any charge or r rve for insurance (including
self-insurance funds or reserves) cov~ing damage to or loss or destruc-
tion of aircraft in the open caused by any of the perils set forth in
paragraph (@,)' hereof.
(e) In the event of damage to or loss or, ruction of air-
crafti in the open, the Contractor shall take all reasonable steps to
protect such aircraft from further a to damaged and undam-
aged aircraft, put all aircraft in tYt'
sole order, and furnish
lob %
to the Contracting Officer a statement
(i ) the lost, destroyed, or damag~ii Alrcraft;
(ii) the time and origin of the loss, destruction, Pr damage;
(iii) all known interests in commingled property of which
in the open are a part;
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(iv) the insurance, if any, covering any part of the interest
in such commingled property.
The Contractor shall be reimbursed for expenditures made by it in
performing its obligations under this paragraph, to the extent approved
by the Contracting Officer and-this contract shall be modified in writ-
ing accordingly.
(f) If prior to acceptance by and delivery to the Government
any aircraft in the open is lest, destroyed, or damaged due to any of
the perils set forth in paragraph (a) hereof, the Government may, unless
otherwise provided in this contract, elect to require that such aircraft
be replaced by the Contractor or restored by the Contractor to the condi-
tion in which it was immediately prior to such damage. If the Government
requires the aircraft to be replaced or restored, an equitable adjust-
ment shall be made in the amount due under this contract and in the time
required for its performance, and this contract shall be modified in
;Writing accordingly. Alternatively, the Government may elect to termi-
nate this contract as to any such lost, destroyed, or damaged aircraft,
and in that event the rights of the parties shall be as provided in the
clause entitled Termination for Convenience of the Government.
(g) In the event the Contractor is at any time reimbursed or
compensated by any third person for any damage to or loss or destruction
of any aircraft in the open caused by any peril set forth in paragraph
(a) hereof for which the Contractor has been compensated by the Govern-
ment, it shall equitably reimburse the Government. The Contractor shall
d.o nothing to prejudice the Government's rights to recover against
third parties for any such loss, destruction or damage and, upon the
request of the Contracting Officer, shall at the Government's expense,
furnish to the Government all reasonable assistance and cooperation
(including the prosecution of suit and the execution of instruments of
assignment or subrogation in favor of the Government) in obtaining re-
covery.
(h) Any loss or destruction of, or damage to, property fur-
nished by the Government will be governed by the clause of this con-
tract entitled "Government-Furnished Property," to the extent that
such clause is, by its terms, applicable.
(i) Any loss, or destruction of, or damage to, aircraft oc-
curring in connection with operations of said aircraft will be governed
by the clause of this contract entitled "Flight Risk," to the extent
that such clause is, by its terms, applicable.
18. MILITARY SECURITY REQUIREMENTS
(a) The provisions of this clause shall apply to the extent that
this contract involves access to security information classified "Con-
fidential" including "Confidential - Modified Handling Authorized" or
higher.
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(b) The Government 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 Check List (DD Form 254 and 254-I).
(c) To the extent the Government has indicated as of the date
of this contract, or thereafter indicates, security classification under
this contract as provided in paragraph (b) above, the Contractor shall
safeguard all classified elements of this contract and shall provide and
maintain a system of security controls within 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 Infor-
mation as in effect on date of this contract, and any modification to
the Security Agreement for the purpose of adapting the Manual to the
Contractor's business; and
(ii) any amendments to said Manual made after the date of this
contract, notice of which has been furnished to the Contractor by the
Security Office of the Military Department having security cognizance
over the facility.
(d) Representatives of the Military Department having security
cognizance over the facility and representatives of the contracting
Military Department shall have the right to inspect at reasonable inter-
vals the procedures, methods, and facilities utilized by the Contractor
in complying with the security requirements under this contract. Should
the Government, through its authorized representative, determine that
the Contractor has not complied with such requirements, the Government
shall inform the Contractor in writing of the proper actions to be
taken in order to effect compliance with such requirements.
(e) If, subsequent to the date of this contract, the security
classifications or requirements under this contract are changed by
the Government as provided in this clause and the security costs under
this contract are thereby increased or decreased, the contract price
shall be subject to an equitable adjustment by reason of such increased
or decreased costs, Any equitable adjustment shall be accomplished in
the same manner as if such changes were directed under the "Changes"
clause in this contract.
(f) The Contractor agrees to insert, in all subcontracts hereunder
which involve access to classified security information, provisions which
shall conform substantially to the language of this clause, including
this paragraph (f) but excluding the last sentence of paragraph (e) of
this clause.
(g) The Contractor also agrees that it shall determine that any
subcontractor proposed by it for the furnishing of supplies and ser-
vices which will involve access to classified information in the Con-
tractor's custody has been granted an appropriate facility security
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clearance, which is still in effect, prior to being accorded access
to such classified security information.
19. UTILIZATION OF SMALL BUSINESS CONCERNS
(a) It is the policy sf the Government as declared by the Con-
gress to bring about the greatest utilization of small business con-
cerns which is consistent with efficient production.
(b) The Contractor agrees to accomplish the maximum amount of
subcontractng to small business concerns that the Contractor finds
to be consistent with the efficient performance of this contract.
20. EXAMINATION OF RECORDS
The following clause will be applicable in all negotiated fixed-
price supply contracts and purchase orders in excess of $1,000.
EXAMINATION OF RECORDS
(a) The Contractor agrees that the Contracting Officer or any
of his duly authorized representatives shall, until the expiration
of three years after final payment under this contract, have access
to and the right to examine any directly pertinent books, documents,
papers and records of the Contractor involving transactions related
to this contract.
(b) The Contractor further agrees to include in all his sub-
contracts hereunder 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 throe years after
final payment under the subcontract, have access to and the right to
examine any directly pertinent books, documents, papers, and records
of such subcontractor involving transactions related to the subcon-
tract. The term "subcontract" as used in this clause excludes (i)
purchase orders not exceeding $1,000 and (ii.) subcontracts or pur-
chase orders for public utility services at rates established for
uniform applicability to the general public.
(a) The Government may, by written notice to the Contractor,
terminate the right of the Contractor to proceed under this contract
if it is found, after notice and hearing, by the Secretary or his
duly authorized representative, that gratuities (in the form of
entertainment, gifts, or otherwise) were offered or given by the
Contractor, or any agent or representative of the Contractor, to any
officer or employee of the Government with a view toward securing a
contract or securing favorable treatment with respect to the awarding
or amending, or the making of any determinations with respect to the
performance of such contract; PROVIDED, That the existence of the
facts upon which the Secretary or his duly authorized representative
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makes such findings shall be in issue and may be reviewed in any com-
petent 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 ^,f the contract by the Contractor, and (ii) as a penalty in
addition to any other damages to which it may be entitled by law, to
exemplary damages in an amount (as determined by the Secretary or his
duly authorized representative) which shall be not less than three nor
more than ten times the costs incurred by the Contractor in providing
any such gratuities to any such officer or employee.
(c) The rights and remedies of the Government provided in this
clause shall not be exclusive and are in addition to any other rights
and remedies provided by law or under this contract
22. CONVICT LABOR
In connection with the performance of work under this contract,
the Contractor agrees not to employ any person undergoing sentence of
imprisonment at hard labor.
23. NOTICE AND ASSISTANCE REGARDING PATENT INFRINGEMENT
The provisions of this clause shall be applicable only if the
amount of this contract is in excess of $5,000.
(a) The Contractor shall report to the Contracting Officer,
promptly and in reasonable written detail, each notice or claim of
patent infringement based on the performance of this contract of which
the Contractor has knowledge.
(b) In the event of litigation against the Government on account
of any claim of patent infringement arising out of the performance of
this contract or cut of the use of any supplies furnished or work or
services performed hereunder, the Contractor shall furnish to the
Government, upon request, all evidence an,1 information in possession
of the Contractor pertaining to such litigation. Such evidence and
information shall be furnished at the expense of the Government except
in those cases in which the Contractor has agreed to indemnify the
Government against the claim being asserted.
24. REPORTING OF ROYALTIES
The provisions of this clause shall be applicable only if the
amount of the contract is in excess of $10,000.
(a) The Contractor shall report in writing (in quadruplicate) to
the Contracting Officer as soon as practicable after execution of this
contract whether or not any royalties in excess of $250 have been paid
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or are to be paid by the Contra^-tor directly to any person or firm in
connection with the performance of this contract If royalties in ex-
cess of $250 have been paid or are to be paid to any person or firm, the
report shall include the following iterns of information with respect t)
such royalties (including the initial $250):
(1) The name and address of each licensor to whom royalties in
excess of $250 have been paid or are to be paid,
(2) The patent numbers, patent application serial numbers (with
filing dates), or other identification of the basis for such royalties,
(3) The manner of computing the royalties consisting of (i)
a brief identification of each royalty-bearing unit or process, (ii)
the total amount of royalties, and (iii) the percentage rate or dollars
and cents amount of royalties on each such unit or process; PRCVITTr
that if the royalties cannot be computed in terms of units or dollars
and cents value, then other data showing the manner in which the Con-
tractor computes the royalties.
(b) In lieu of furnishing a report under paragraph (a), the Con-
tra^tor may furnish a single, consolidated report for each accounting
period of the Contractor during which the Contractor has contracts with
the Government, provided the Contractor has requested and obtained the
prior written approval of the Contracting Officer. Such consolidated
report :,hall be furnished, when the furnishing thereof has been approved,
in the slumber 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 account-
ing practice, and shall include, for the accounting period, the total
amount of royalties accruing to each licensor at a rate in excess of
$1,000 per annum on the Contractor's over-all business, together with
(i) the name and address of each such licensor, (ii) the patent numbers,
patent application serial numbers (with filing dates), or other identi-
fication of the basis for such royalties, (iii) a brief description of
the subject matter of the license under which royalties are charged,
(iv) the percentage rate or unit amount, or if the royalties do not
accrue by rate or unit amount, such other data showing the manner by
which the royalties accrue to licensor, and (v) an estimate or approxi-
mation (without detailed accounting) of the portion of such royalties
that may be attributable to Government contracts. The Contractor shall,
if requested by the Government, furnish at Government expense a more
detailed allocation of such royalty payments attributable to Government
contracts.
(c) In the event that the Contractor requests written approval to
furnish consolidated reports under paragraph (b) above, the Contracting
Officer shall promptly consider the request and furnish to the Contrac-
tor a letter stating whether or not the request is approved and, not-
withstanding 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 Con-
tracting Officer admi.ui.stex_ing this contract.
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(d) After payment of eighty percent (80%) of the amount of this
contract, as from time to time amended, further payment shall be with-
held until a reserve of either (i) ten percent (10%) of such amount cr
(ii) $5,000, which ever is less, shall have been set 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 Contractor's request
to furnish the report under paragraph (b); PROVIDED that no amount shall
continue to be withheld from payment for the causes specified in this
paragraph (d) if the Contracting Officer shall find that the Contractor
has not been furnished a letter as required by paragraph (c) within a
reasonable time after making written request to submit a single, con-
solidated report under the provisions of paragraph (b) of this clause;
and PROVIDED FJRTHi.R that the Contracting Officer may, in his discre-
tion, order payment to be withheld in the amount and manner above pro-
vided if the report called for by paragraph (a) is unsatisfactory or (b)
is di nbir.has not been received, or if received, is found to be unsat-
isfactory. No amount shall be withheld under this paragraph when the
minimum amount specified by this paragraph is being withheld under other
provisions of this contract The withholding of any amount or subsequent
payment thereof to the Contractor shall not be construed as a waiver of
any right accruing to the Government under this contract.
25. FILING OF PATENT APPLICATIONS
(a) Before filing or causing to be filed a patent application dis-
closing any subject matter of this contract, which subject matter is
classified "Secret" or higher, the Contractor shall, citing the thirty
(30) day provision. below, transmit the proposed application to the Con-
tracting Officer for determination whether, for reasons of national
security, such application should be placed under an order of secrecy
or sealed in accordance with the provisions of 35 U. S. Code 181-188
or the issuance of a patent should be otherwise delayed under pertinent
statutes or regulations; and the Contractor shall observe any instruc-
tions of the Contracting Officer with respect to the manner of delivery
of the patent application to the U. S. Patent Office for filing, but
the Contractor shall not be denied the right to file such patent appli-
cation. If the Contracting Officer shall not have given any such in-
structions within thirty (30) days from the date of mailing or other
transmittal of the proposed application, the Contractor may file the
application.
(b) The Contractor shall furnish to the Contracting Officer, at
the time of or prior to the time when the Contractor files or causes
to be filed a patent application disclosing any subject matter of this
contract, which subject matter is classified "Confidential," a copy of
such application for determination whether, for reasons of national
security, such application should be placed under an order of secrecy
or the issuance of a patent should be otherwise delayed under pertinent
statutes or regulations.
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(c) In filing any patent app.I.i.cat:.an cczv.n within the scope c f
this clause, the Contractor sha,.11 observe &U applicable security regu-
lations covering the transmission of elassit-ed'subject matter
2.6. AUTK0RIZATION AND CONSENT
The following clause shall be applicable in all contracts for sup-
plies (including construction work), except purchase orders of $5,000
or less :
The Government hereby gives its authorization and consent (without
prejudice to its rights of inde;.ification, if such rights are provided
,.for in this contract) for all u:ie and Inanufaeture, in the performnace of
this contract or any part hereof or any aaehd.aert hereto or any suucor.-
~tract hereunder (including any lower-tier subcontract), of any patented
invention (i) embodied in the structure or composition of any article
the delivery of which is accepted. by the Government under this ecntra.:t,
or (ii) utilized in the machinery, tools.4 or methods the use of which
necessarily results from compliance by the Contractor or the using sub-
contractor with (a) specifications or written provisions new -r heereaftc'r
forming a part of this contract, or (b) specific written instru.:tions
given by the Contracting Officer directing the manner of porfci:nance-
L e Cc: '-?ractor'a entire liability to the Government for patent infri.na~.
mont s.-.'- . be determined solely by the provisions of the in&-nn .ty claus ,
if any, included in the contract and the Government assumes liability for
all other infringement to the extort of the authorization Roc.: onsant
hereir..,bcove granted.
(a) As used in this clause, the following terms shall have the
meanings set forth below:.
(i) The term "Subject Invention" means any invention, improvc-
m_nt or discovery (whether or not patentable) conceived or first actually
reduced to practice either (A) in the performance of the experimental,
developmental, or research work called for or required under this con-
tract, or (B) in the perforrance of any exp,erimertal, development,-Ll., or
research work relating to the sub?act matter of this contract lehich Was
done upon an understand .n,-, in writing that a c : ntrac+. would. be awarded;
PROVIDED tact the term Invertior-" shall not include any inven-
tion which is specifically id:.ntified and l.ist+ d in. the Schedule fo ' the
purpose of ex0Lzding it frorr. thcc J.icensc granted by this c Jnu'e.
(ii) The term "T'echnical. Pors.cr..nel" means any pers -n employed
by or working under contract with the Contractor (ether than a subecen-
tractor whocce responsibili_ti with respect to rights accruing to the
Government in inventions arising under subcontracts are set forth in
paragraphs (g), (h), and (i) of this clause) who, by reason of the
nature of his duties in connection with the rorf(mmr,rce of this co:l-
tract, would reasonably be e,:i,~:ctcd to make Inver