INDEX TO GENERAL PROVISIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP64-00360R000700130038-0
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 36
• Document Creation Date: November 17, 2016
• Document Release Date: July 29, 1999
• Sequence Number: 38
• Content Type: REPORT

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INDEX TO GENERAL PROVISIONS
Pape No..
1.
DEFINITIONS ------ ----.--------------------------
1
2.
CHANGES----------------------------------------
1
3.
EXTRAS-----------------------------------------
2
4.
VARIATION IN QUANTITY--------------------------
2
5.
INSPECTION-------------------------------------
2
6.
RESPONSIBILITY FOR SUPPLIES--------------------
3
7.
PAYMENTS ----------- ----------------------------
3
8.
A" SIGN ENT,f-OF CLAIMS---------------------------
14
9.
ADDITIONAL B(ND SECURITY------------------_---
4
10.
FEDERAL, STATE, AND LOCAL TAXES--------- ------
4
11.
DEFAULT------ ------- ------ --------- ----------
6
12.
DISPUTES------------- ----w~.i.r.. ---------------
8
13.
SOVIET CONTROLLED AREAS--=----------------------
8
14.
EIGHT-HOUR LAW OF 191f
15.
I'~ALSH-HEALEY PUBLIC CONTRACTS ACT--------------
9
16.
NONCISCRIP'.[IiTATION IN EMPLOYMENT----------------
9
17.
OFFICIALS NOT TO BENEFIT- ----------------------
10
18 a
COVENANT AGAINST CONTINGENT FEES---------------
10
19"
TERMINATION FOR CONVENIENCE OF THE GOVERNMENT--
10
20,
AUTHORIZATION AND CONSENT ----------------------
15
21.
NOTICE AND ASSISTANCE .EGARDING Pl~TENT-
INFRINC} ?LENT------- -------------------------
15
22.
BUY AMERICAN ACT-------------------------------
15
23.
FILING OF PATENT APPLICATIONS------------------
16
24.
PATENT RIGHTS----------------------------------
17
25
REPORTING OF ROYALTIES-------------------------
21
26.
RIGHTS IN DATE - UNLIMITED ---------------------
23
27.
MILITARY SECURITY REQUIREM, ENTS--__----_-------_-
24
28.
UTILIZATION OF SMALL BUSINESS CONCERNS---------
25
29.
EXAMINATION OF RECORDS .----- ------------------
25
30.
GRATUITIES. -----------------------------------------
26
31.
CONVICT LABOR-----------------------------------
26
32.
NOTICE TO THE GOVERNMENT OF LABOR DISPUTES-----
26
33.
MATERIEL INSPECTION AND RECEIVING REPORT-- ----
26
34.
SUBCONTRACTS----------------*-------------------
27
35.
SUBCONTRACTS -----------------------------------
27
36.
AIRCRAFT IN THE OPEN---------------------------
27
37.
INSPECTION AND AUDIT---------------------------
28
38.
GOVERNMENTwFURNISHED PROPERTY------------------
28
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GENERAL PROVISIONS
1. DEFINITIONS (ASPR 7-103.1)
As used throughout this contract, the following terms shall have
the meanings set forth below:
(a) The term "Secretary" means the Secretary, or any Assistant
Secretary of the Department, and the head or any assistant head of the
Federal agency; and the term his duly authorized representative" means
any person or persons or board (other than the Contracting Officer)
authorized to act for the Secretary.
(b) The term "Contracting Officer" means the person executing
this contract on behalf of the Government, and any other officer or
civilian employee who is a prope1ly designated Contracting Officer
and the term includes, except at otherwise provided in this contract,
the quthorized representative of a Contracting Officer acting within
the limits of his authority.
(c) Except as otherwise provided in this contract, the term
"subcontracts" includes purchase orders under this contract.
2, CHANGES (ASPR 7-103.2)
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 chance causes an increase or decrease in the cost of, or the
time required for the performance of any aprt of the work under this
contract whether changed or not changed by any such order an equitable
adjustment shall be made in the contract price or delivery schedule, or
both, and the contract shall bbe modified in writing accordingly. Any
claim by the Contractor for adjustment under this clause must be asserted
within 60 days from the date of receipt by the Contractor of the noti-
fication of chago; PROVIDED, however, That the Contracting Officer, if
he decides that the facts justify such action, may receive and act
upon any such claim asserted at any time prior to final payment under
this contract. Where the cost of property made obsolete or excess
as result of a change is included in tho Contractor's claim for
adjustment, the Contracting Officer shall have the right to presctibe
the manner of disposition of such property, Failure to agree to gny
adjustment shall be a dispute concerning a question of fact within the
meaning of the clause of this contract entitled 11-Disputes.," However,
nothing in this clause shall excuse the Contractor from proceeding with
the contract as changed.
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3. EXTRAS (ASPR 7-103,3)
Except as otherwise provided in this contract, no payment for extras
shall be made unless such extras a,Id the price therefor have been
authorized in writing by the Contracting Officer..
4. VAR If T ION IN QUANT ITY
No variation in the quantit,7T of any item called for by this contract
will be accepted unless such variation has been caused by conditions of
loading?, shi?pinr, or packing, or allowances in manufacturing processes,
and then only to the extent, if any, specified elsewhere in this
contract.
5. INSPECTION (ASPR 7-105.5)
(a) all supplies (which term throughout this clause includes without
limitation raw materials, components, intermediate assemblise, and end
products) shall be subject to the inspection and test by the Government,
to the extent practicable at all tames and places including the period
of manufacture, and in any event prior to acceptance.
(b) In case any supplies or lots of supplies are defective in
material or workmanship or otherwise not in conformity with the requireme'its
of this contract, the Government shall have the right eith to reject
them (with or without instructions as to their (disposition) or to
require their correction. Supplies or lots of supplies which have been
rejected. or required to be corrected shall be removed or, if permitted
or required by the Contracting Officer, corrected in place by and at
the expense of the Contractor promptly after notice, and shall not
thereafter be tendered for acceptance unless the former rejection or
requirement of correction is disclosed. If the Contractor fails promptly
to remove such supplies or lots of supplies which are required to be
removed, or promptly to replace or correct such supplies or lots of
supplies, the Government either `(i) may by contract or otherwise replace
or correct such supplies and charge to the Contractor the cost occasioned
the Government thereby, or (ii) may terminate this contract for default
as provided in the clause of this contract entitled "Default." Unless
the Contractor corrects or replaces such supplies within the delivery
schedule, the Contracting Officer may require the delivery of such supplies
at a reduction in price which is equitable under the circumstances. Fail-
ure to agree to such reduction of price shall be a dispute concerning a
quest.on of fact within the meaning of the clause of this contract
entitled "Disputes.rr
(c) If any inspection or test is made by the Government on the premises
of the Contractor or a subcontractor, the Contractor withc:ut additional
charge shall provide all reasonable facilities and assistance for the
safety and convenience of the Government inspectors in the performance of
their duties. If Government inspection or test is made at a point other
than the promises of the Contractor or a subcontractor, it shall be at
the expense of the Government except as otherwise provided in this
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contract: PROVED, That in case of rejection the Government shall not
be liable for any reduction in value of samples used in connection with
such inspection or test. All inspegtions and tests by the Government
shall be performed in such a manner as not to unduly delay the work.
The Government reserves the right to charge to the Contractor any additional
cost of Government inspection and test when supplies are not ready at the
time such inspection and test is requested by the Contractor or when rein-
spection or retest is necessitated bey prior rejection. Acceptance or
rejection of the supplies shall be made as promptly as practicable after
delivery, except as otherwise provided in this contract; but failure to
inspect and accept or reject supplies shall neither relieve the Contractor
from responsibility for such supplies as are not in accordance with the
contract requirements nor impose liability on the Government therefor.
(d) The inspection and test by the Government of any supplies or lots
thereof does not relieve the Contractor from any responsibility regarding
defects or other failures to:aieet the contract requirements wh:i ch may be
discovered prior to acceptance. Except as otherwise provided in this
contract, acceptance shall be conclusive except as regards latent defects,
fraud, or such Fross mistakes as amount to fraud.
(e) The Contractor shall provide and maintain an inspection system
acceptobel to the Government covering the supplies hereunder. Records of
all inspection work by the Contractor shall be kept complete and available
to the Government during the performance of this contract and for such
longer period as may be specified elsewhere in this contract.
6. RESPONSIBILITY FOR SUPPLIES (ASPR 7-1C.6)
Except as otherwise provided in this contract, (i) the Contractor shall
be responsible for the supplies covered by this contract until they are
delivered at the designated delivery point, regardless of the point of
inspection; (ii) after delivery to the Government at the designated point
and prior to acceptance by the Government or rejection and giving notice
thereof by the Government, the Government shall be responsible for the loss
or destruction of or damage to the supplies only if such loss, destruction,
or damage results from the negligence of officers, agents, or employees of
the Government acting within the scope of their employment; and (iii) the
Contractor shall bear all risks as to rejected supplies after notice of
rejection, except that the Government shall be responsible for the loss, or
destruction of, or damage to the supplies only if such loss, destruction or
damage results from the gross negligence of officers, agents, or employees
of the Government acting within the scope of their employment.
7. PAY-'I NTS (ASPR 7-103-Y)
The Contractor shall be paid, upon the submission of proper invoices or
vouchers, the prices stipulated herein for supplies delivered and accepted
or services rendered and accepted, less deductions, if any, as herein
provided. Unless otherwise specifiedi payment will be made on partial
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deliveries accepted by the Government when the amount due on such de-
liveries so warrants; or, when requested by the Contractor,b payment for
accepted partial deliveries shall be made whenever such payment would
equal or exceed either 4,1,000 or 50 percent of the total amount of
this contract;
8. ASSIGILENT OF CLAIMS (ASPS. 7-103.8)
(a) Pursuant to the provisions of the Assignment of Claims Act of
19140, as amended (31 U. S. Code 203, 41U. S. Code 15) if this c oritract
provides for payments aggregating v 1,00Q or mores claims for monies due
or to become due the Contractor fr('.m the Government under this contract
may be assigned to a bank, trust company, or other financing institution,
including any Federal lending agency, and may thereafter be further
assigned and re-assigned to any such institution. Any such assignment or
reassignment shall cover all amounts payable under this 'contract and not
already paid, and shall not be made to more than one party, except that
any such assignment or reassignment maybe made to one party as agent or
trustee for two or more parties participating in such financing,. Notwith-
standing any provisions of this contract, payments to an assignee of any
monies due or to become due under this contract shall not, to the extent
provided in said Act, as amended, be subject to reduction or set-off.
(b) In no event shall copies of this contract or of any plans,
specifications, or other similar documents relating to work under this
contract, if marked "Top Secret," "Secret," or "Confidential", be
furnished to any assignee of any claim arising under this contract or to
any other- person not entitled to receive the same: PROVIDED, That a
copy of any part or all of this contract so marked may be furnished, or
any information contained therein may be djsclosed, to such assignee upon
the prior written authorization of the Contracting Officer
(c) The Contractor shall obtain the-critten authorization of the
Contracting Officer prior to the assignment of -any rights under this
contract.
9. ADDITIONAL BOND SECURITY (ASPR 7-103.9)
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 Government and of persons supplying labor or materials
in the prosecution of the work contemplated by this contract.
10. FEDERAL, STATE, AND LOCAL T1,1r
LES (ASPR 11-14.01.1)
(a) As used throughout this clause, the term "tax inclusive date" means
the date of negotiated contracts and the (late sot for the opening of bids
for contracts entered into through formal advertising. As to additional
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supplies or services procured by modification to this contract, the term
"tax inclusive date" means the date of such modification.
(b) Except as may be otherwise provided in this contract, the
contract price inc.udes all Federal, $tato, and local taxes and duties
in effect and applicable to the contract on the tax inclusive slate, except
taxes,(other than Federal transportation taxes) from which the Government,
the Contractor, or the transactions or property covered by this contract
are then exempt. Unless specifically excluded, duties are included in
the contract price, and, if freight is included in the contract price,
Federal transportation taxes are likewise included.
(c) (1) If the Contractor is required to pay or bear the burden
(i) of any tax or duty., which either was not to be included in the
contract price pursuant to the requirements of paragraph (b) or was
specifically excluded from the contract price by a provision of this
contract; or
(ii) of an increase in rate of any :tax or duty, whether or not such
tax or duty was excluded from the contract price; or of any interest or
penalty thereon, the contract price shall be correspondingly increased;
PROVIDED, that the Contractor warrants in writing that no amount for such
tax, duty, or rate increase was included in the contract price as a contin-
gency reserve or otherwise; and PROVIDED further that liability for such
tax, duty, rate increase, interest, or penalty tax,was not incurred through
the fault or negligence of the Contractor or its failure to follow instruc-
tions of the Contracting Officer.
(2) If the Contractor is not required to pay or bear the burder, or
obtains a refund or drawback, in whole or in part, of any tax, duty,
interest, or penalty which (i) was to be included in the contract price
pursuant to the requirements of parAgraph (b), (ii) was included in the
contract price, or (iii) was the basis of an increase in the contract
price, the contract price shall be correspondingly decreased or the amount
of such relief, refund, or drawback shall'be,paid to the Government, as
directed by the Contracting Officer. The contract price also shall be
correspondingly decreased if the Contractor, through its fault or negli-
gence or its failure to follow instructions of the Contracting Officer, is
required to pay or bear the burden, or does not obtain a refund or draw-
back.of any such tax, duty, interest, or penalty. Interest paid or credited
to the Contractor incident to a refund of taxes shall inure to the benefit
of the Government to the extent that such interest was earned after the
Contractor was paid or reimbursed by the Government for such taxes.
(3) Invoices or vouchers covering any adjustment of the contract price
pursuant to this paragraph (c) shall set forth the amount thereof as a
separate item and shall identify the particular tax involved.
(.) Nothing in this paragraph,(c) shall be applicable to social
security taxes; net income taxes; excess profit taxes; capital stock taxes;
Federal transportation taxes, except changes in the rate thereof, in-
cluding repeal; pertaining to shipments from the Contractor to the
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Government; unemployment compensation taxes; or any State and local
taxes, except those levied on or measured by the dontract or sales price
of the services or completed supplies furnished under this contract,
including gross income taxes,., gross receipts taxes, sales and use taxes,
excise taxes, or franchise or occupation taxes measured by sales or
receipts from sales,
(5) No adjustment of less than $1Q0 shall be made in the contract
price pursuant to this paragraph.
(d) Unless there does not exist any reasonable basis to sustain an
exemj.ption, the Government agrees upon request of the Contractor, without
further liability except as otherwise provided in this contract to
furnish evidence appropriate to establish exemption from (i) any Federal
tax, which the Contractor warrants in writing was excluded from the
contract price, or (ii) any State or local tax; PROVIDED that evidence
appropriate to establish exemption from duties will be furnished, and
Government bills of lading will be issued only at the discretion of the
Contracting Officer. In addition, the,Contracting Officer may furnish
evidence appropriate to establish exemption frcm any tax that may,
pursuant to this clause, give rise to either an increase or decrease in
the contract price.
(e)(1) The Contractor shall promptly notify the Contracting Officer
of all matters pertaining to Federal, State, end local taxes and duties
that reasonably may result in either an increase or decrease in the
contract price,
(2) Whenever an increase or decrease in the contract price may be
required under this clause the Contractor shall take action as directed
by the Contracting Officer, and the contract price shall be equitably
adjusted to cover the costs of such action, including any interest, pen-
alty, and reasonable attorney's fees.
11. DEFAULT (ASPR 7--103.11)
,(a) The Government may, subject to the provisions of paragraph (c)
below, by written notice of default to the Contractor, terminate the
whole or any part of this contract in any one of the following circum-
stances:
~.iXi)If the Contractor fails to make delivery of the supplies or to
perform the services within the time specified herein or any extension
thereof; or
(ii) if the Contractor fails to pefform any of the other provisions
of this contract, or so fails to make progress as to endanger perfommance
of this contract in accordance with its terms, and in either of these two
circumstances does not cure such failure within a period of 10 days (or
such longer period as the Contracting Officer may authorize in writing)
after receipt of notice from the Contracting Officer specifying such
failure.
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~Jl the overnnent terminates this contract in whole or
in part as provided in paragraph (a) of this clause, the Government may
procure, upon such terms and in such manner as the contracting Officer
may deem appropriate, supplies or services similar to those so terminated,
and the Contractor shall be liable to the Government for any excess
costs for such similar supplies or services: PROVIDED, That the Con-
tractor shall continue the performance of this contract to the extent
not terminated under the provisions of this clause..
(c)Except with respect to defaults of subcontractors, the Con-
tractor shall not be liable for any excess costs if the failure to
perform the contract arises out of causes beyond the control and without
the fault or negligence of the.Contractor. Such causes may include, but
are not restricted to, acts of God or of the public enemy, acts of the
Government in either its sovereign or contractual capacity, fires, floods,
epidemics, quarantine restrictions, strikes, freight embargoes, and u
unusually severe weather; but in every case the"failure to perform must
be beyond the control and without the fault or negligence of the
Contractor. If the failure to perform is caused by the default of a
subcontractor, and if such default arises out of causes beyond the control
of both the Contractor and su`icontractor, and without the fault or
negligence of either of them, the Contractor shall not be liable for any
excess costs for failure to perform, unless the supplies or dervices to
be furnished by the subcontractor were obtainable from other sources in
sufficient time to permit the'Contractor to meet the required delivery
schedule.
(d) If this paragraph (a) of this clause, the Government, in addition
to any other rights provided in this clause may require the Contractor to
transfer title and deliver to the G ,
overnment, in the manner and to the
extent directed by the Contracting Officer, (i) any completed'
ompleted supplies, and
(ii) such partially completed supplies and materials, parts, tools, dies,
jigs, fixtures, plans, drawings, inffbrmation and contract rights (herein-
after called "manufacturing materials") as the Contractor has specifi-
cally produced or specifically acquired for the performance of such part
of this contract as has been terminated; and the Contractor shall, upon
direction of the Contracting Officer, protect and preserve property in
possession of the Contractor in which the Government has an interest,
Payment for completed supplies delivered to and accepted by, the Government
shall be at the contract price? Payment for manufacturing materials
delivered to and accepted by the Government and for the protection and
preservation of property shall be in an amount agreed upon by the Con-
tractor and Contracting Officer; failure to agree to such amount shall be
a dispute concerning a question of fact within the meaning; of the clause
of this contract entitled "Disputes."
(e) If, after notice of termination of this contract under the
provisions of paragraph (a) of this clause, it is determined that the
failure to perform this contract is due to causes beyond the control and
without the fault or negligence of the Contractor or subcontractor pur-
suant to to-the provisions of paragraph (c) of this clause, such notice of
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default shall be deemed to have been issued pursuant to the clause of
this contract entitled "Termination for Convenience of the Government,"
and the rights and obligations of the Parties hereto shall in such event
be governed by such clause. Except as otherwise ;'Drovicled in this contract)
this paragraph (e) applies only if this contract is with a military
department
(f) The rights and remedies of the Government provided in this
clause shall not be exclusive and are in addition to any other rights
and remedies provided by law or under this contract.
12. DISPUTES (ASPR 7-103,12)
(a) Except as otherwise provided in this contract, any dispute
concerning a question of fact arising under this contract which is not
disposed of by agreement shall be decided by the Contracting Officer,
who shall reduce his decision to wrting and mail or otherwise furnish
a copy thereof to the Contractor. The decision of the Contracting Officer
shall' bo final and conclusive unless, within 30 days from the date of
receipt of such copy, the Contractor mails or otherwise furnishes. to
the Contracting Officer a written ap)eal addressed to the Secretary. The
decision of the Secretary or his duly authorized representative for the
determination of such appeals shall I)e 'final and conclusive unless
determined by a court of competent jurisdiction to have been fraudulent,
or capricious, or arbitrary, or so gassly erroneous as necessarily to
imply bad fiath, or not supported by'substantial evidence. In connection
with any appeal proceeding under this clause, the Contractor shall be
afforded an opportunity to be heard ,and to offer evidence in support of
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 "Dis,)utes" clause does not preclude consideration of law
questions in connection with decisions provided for in paragraph (a) above:
PROVIDED,'-That-,nothing in this contract shall be construed as making final
the decision of any administrative official, rppresentative, or board
on a question of law.
13. SOVIET CONTROLLED AREAS (!LSPR 6-403)
(a) The Contractor shall not acquire for use in the performance
of this contract any supplies or services originating from sources within
Soviet-controlled areas, as listed in the Schedule of this contract, or
from Hong Kong or Macao, without the written approval of the Contracting;
Officer.
(b) The Contractor agrees to insert the provisions of this clause,
including:; the Soviet-controlled areas listed in the Schedule and this
subparagraph (b), in all subcontracts hereunder.
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14. EIGHT-HOUR LAST OF 1912 (ASPR 12-303.1)
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-Healy Public Contracts Act (41 U. S. Code 35-45),
is subject to the following provisions and exceptions of said Eight-
Hour Law of 1912, as amended, and to all other provisions and exceptions
of said Law:
No laborer or mechanic doing any part of the work comtemplated by
this contract, in the employ of the Contractor or any subcontractor con-
tractinp for any part of the said work contemplated, shall be required
or permitted to work more than eight hours in any one calendar day upon
such work, except upon the condition that compensation is paid to such
laborer or mechanic in accordance with the 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; arid work in excess
of eight hours per day is permitted only upon the condition that every
such laborer and modhanic shall be aornpensated for all hours worked in
excess of eight hours per day at not less than one and one-half times
the basic rate of pay. For each violation of the requirements of this
clause a penalty of five dollars shall be imposed for each 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.
15. WALSH-:c ALY PUBLIC CONTRACTS ACT (ASPR 12-604 mod)
If this contract is for the manufacture of furnished of materials,
supplies, articles or equipment in an amount which exceeds or may exceed
1,10,000 and is otherwise subject to the Walsh-Healey Public Contracts
Act, as amended (41 U. S. Code 35-45), there are hereby incorporated
by reference all representations and stipulations required by said Act
and regulations issued thereunder by the Secretary of Labor, such
representations and stipulations being subject to all applicable rulings
and interpretations of the Secretary of Labor which are now or may
hereafter be in effect, "except that the Contractor shall not be required
to include this clause in subcontracts issued hereunder when the
inclusion of this clause in a subcontract would jeopardize or conflict
with the security considerations established in connection with this contract.
16. NONDISCRRI NATION IN +l'IPLOYNENT (ASPR 12-802 mod)
(a) In connection with the performance of work under this contract, the
Contractor agrees not to discriminate against any employee or applicant
for employment because of race, religion, color, or national origin. The
aforesaid provision shall include, but not be limited to, the following:
employment, upgrading, demotion/or transfer; recruitment or recruitment
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advertising, layoff or termination; rates of pay or other forms of
compensation; and selection for training, including apprenticeship.
The Contractor agrees to post hereafter in conspicuour 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 furthe agrees to insert the foregoing provision
in all subcontracts hereunder, oxcQpt subcontracts for standard com-
mercial supplies or raw materials,'-and except as insertion of the fore--
going provision in a subcontract would jeopardize or conflict with the
security considerations established in connection with this contract."
17. Or FICI_AiLS NOT TO BENEFIT (ASPR 7-103.19)
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 construed to expend
to this contract if mead with a corporation for its general benefit.
18. COVENANT AGU:I NST CONTINGENT FEES (.APR 7 103.20)
The Contractor warrants that no person or selling agency has been
employed or retained to solicit or secure this contract upon an agrrr_,-ment
or understanding for a commission, percentage, brokerage, or contirz'ent
fee, exceptin ; bona fine employees or bona fide established commercial
or selling agencies maintained by the Contractor for the purpose of
securing business. For breach or violation of this warranty the Government
shall have the right to annul this contract without liability or in its
discretion to deduct from-the contract price or consideration, or otherwise
recover, the full amount of such confkission, percentage, brokerage, or
contingent fee.
19. T'F.,RNI LOTION FOR CONVEI,TIENCE OF TIE GOVERNNIEN'T (ASPR 8-701)
(a) The performance of work under this contract may be terminated by
the Government in accordance with t his clause in whole, or from time to
time in pert, whenever the Contracting Officer shall determine that such
termination is in the best interests of the Government. Any such
termination shall be effected by delivery to the Contractor of a Notice
of Termination specifying the extent to which performance of work under
the contract is terminated, and the date upon which such termination be-
comes effective,
(b) After receipt of a Notice of Termination, and. except as other-
wise directed by the Contracting; Officer, the Contractor shall (1) stop
work under the contract on the date and to the extent specified in the
Notice of Termination; (2) place no further orders or subcontracts for
materials, services, or facilities except as may be necessary for completion
of such portion of the work under the contract as is not terminated;
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(3) terminate all orders :-nd. subcontr^-.cts to the extent that they relate
to ther performance of work terminated'. by the Notice of Termination;
(4) assign to the Gove:rnment,in the manner, at the times, and to the
extent directed by the Contracting Officer, all of the right, title and
interest of the Contractor under the orders and subcontracts so terminated,
in which case the Government shall have the right, in its discretion, to
settle or pay any or all claims arising out of the termination of such
orders and subcontract; (5) settle all outstanding liabilities and all
claims arising out of such termination of orders and subcontracts, with
the approval or ratification of the Contracting Officer, to the extent
he may require, which approval or ratification shall be final for all
the purposes of this clause; (6) transfer titled and deliver to the Govern-
ment, in the manner, at the times, and to the extent, if any, directed by
the Contracting Officer, (i) the fabricated or unfabricated parts, work in
process, completed work, supplies, and other material produced as a part of,
or acquired in connection with the performance of, the work terminated by
the Notice of Termination, and (ii) the completed or partially completed
plans, drawings, information, and other property which, if the contract had
been completed, would have been required to be furnished to the Government;
(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 Contract (i) shall not be required
to extend credit to any ,)urchaser, 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 Government to the Contractor under this Contract
or shall otherwise be credited to the price or cost of the work covered by
this contract or paid in such othr m.~nner as the Contracting Officer may
direct; (8) comolote performance of 'such part of the work as sh-nll not have
been terminated by the Notice of Termination; and (9) take such action as
may be necessary, or as the Contrad.ting Officer may direct, for the pro-
tection 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. At any time after expiration of the plant
clearance period, as defined in Section VIII, Armed. Services Procurement
Regulation, as it may be amended from time to time, the Contractor may
submit to the Contracting Officer a list, certified as to quantity and
quality, of any or all items of termination inventory not previously ('-is-
posed of, exclusive of items the disposition of which has been directed or
authorized by the Contracting; Officer, and. may request the Government to
remove such items or enter into a storage agreement covering them, Not
later than fifteen (15) days thereafter, the Government will accept title
to such items and. remove them or enter into a storage agreement covering
the same, PROVIDED that the list submitted shall be subject to verification
by the Contracting Officer upon removal of the items, or if the items are
stored, within forty-five (45) days from the date of submission of the list,
and any necessary adjustment to correct the list as submitted shall be made
prior to final settlement.
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(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 mrre 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 may receive and act upon any such termination claim at any
time after such two-year peiod or any extension thereof. Upon failure
of the Contractor to submit its termination claim withil -the time allowed,
the Contractint 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 parm ragh. (c), the Contractor and
the Contracting Officer may agree upon the whole or any part of the amount
or amounts to be paid to the Contractor by reason of the total or partial
termination of work pursuant to this clause, which amount or amounts
may include a reasonable allowance for profit on work done. The contract
shall be amended accordingly, and the Contractor shall be paid the agreed
mount, -Nothing in paragraph (e) of this clause, proscribing, the amount
to be paid to the amount to be paid to the Contractor in the event of
failure of the Contractor and the Contracting Officer to agree upon the
whole amount to be paid to the Contractor by reason of the termination of
work pursuant to this clause, shall be deemed to limit, restrict, or
otherwise determine or affect the amount or amounts which may be agreed
upon to be paid to the Contractor l)ursuant to this paragraph (a).
~o) In the event of the failure of the Contractor and the Contracting
Officer to agree as provided in paragraph (d) upon the whole amount to be
paid to the Contractor by reason of the termination of work pursuant to
this clause the Contracting Officer shall determine, on the basis of in-
formation available to him., the amount, if any, due to the Contractor by
reason of the termination and shall pay to the Contractor the amounts
determined as follows:
(1) For completed supplies accepted by the Government (or sold or
acquired as provided in paragraph (b) (7) above) and not theretofore paid
for, a sum equivalent to the aggregate price for such supplies computed in
accordance with the price or prices specified in the contract, appropri-
ately adjusted for any saving of freight or other charges;
2) The total of--
(i) The costs incurred in the performance of the work terminated,
including: initial costs and preparatory expense allocable thereto, but
exclusive of any costs attributable to supplies paid or to be paid for
under paragraph (e) (1) hereof;
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(ii) The cost of settling and paying claims arising out of the
termination of work under subcontracts or orders, as provided in
paragraph (b) () above, which are properly chargeable to the terminated
portion of the contract (exclusive of amounts paid or payable on account
of supplies or materials delivered or: services furnished by subcontractors
or vendors prior to the effective date, of the Notice of Termination,
which amounts shall be included in the costs payable under (i) above).
(iii) A sum equal to 2% of that part of the amount determined under
(i) which represents the cost of articles and materials not processed by
the Contractor, plus a sum equal to 80 of the remainder of such amount
but the aggregate of such sums shall not exceed 6% of the amount determined
under subdivision (i) above, which amount for the purpose of this sub-
division (iii) shall exclude any charges for interest on borrowings;
provided, however, that if it appears that the Contractor would have
sustained a loss on the entire contract had it been completed, no profit
shall be included or allowed under this subdivision (iii) and an appropri-
ate adjustment shall be made reducing the amount of the settlement to
reflect the indicated rate of loss.
(3) The rc:i,sonable costs of settlement including accounting, legal,
clerical, and other expenses reasonable necessary for the preparation
of settlement claims and supporting data with respect to the terminated
portion of the contract and for the termination and settlement of sub-
contracts thereunder, together with reasonable storage, transportation?
and other costs incurred in connection with the protection or disposition
of property allocable to this contract.
The total sum to be paid to thq Contractor under (1) and (2) of this
paragraph (e) shall not exceed the total contract price as reduced by the
amount of payments otherwise made and as further reduced by the contract
price of work not terminated. Except for normal spoilage, and except to
the extent that the Government shall have otherwise expressly assumed the
risk of loss, them shall be excluded from the amounts payable to the Con-
tractor as provided in paragraph (e) (1) and paragraph W (2) (i), the
fair value, as determined by the Contracting Officer, of property which
is destroyed, lost, stolen, or damaged so as to become undeliverable to the
Government, or to a buyer pursuant to paragraph (b)(7).
(f) Any determination of costs under paragraph (c) or (e) hereof shall
be governed by the Statement of Principles for Consideration of Costs set
forth in Part 4 of Section VIII of the Armed Services Procurement Regulation,
as in effect on the date of this contract.
(g) The Contractor shall have the right of appeal, under the clause
of this contract entitled "Disputes," from any determination made by the
Contracting Officer under paragraphs (c) or (e) above, except that if the
Contractor has failed to submit 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 under paragraph (c) or (e)
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above, the Government shall pay to the Contractor the following: (i) if
there is no right of appeal herc.und.er or if no timely appeal has been
taken, the amount so determined by the Contracting Officer, or (ii)
if an appeal has been taken, the amount finally c'.etermined on such
appeal.
(h) In arriving at the zrount clue the Contractor under this clause
there shall be deducted (1) all unliquidated advance or other unliquidated
payments on account theretofore made 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 re-
covered by or credited to the Government.
(i) If the termination hereunder be partial, prior to the settlement
of the terminated portion of thip contract, the Contractor may file with
the Contracting Officer a request in writing for an equitable adjustment
of the price or prices specified in the contract relating to the continued
portion of the contract (the portion not terminated by the Notice of
Termination), and such equitable adjustment as may be agreed upon shall be
made in such price or prices.
(j) The Government may from time to time, under such terms and
ccnditicns as it may prescribe, make partial payments arid payments on
account against costs incurred by the Contracto:~ in connection with the
terminated portion of this contract whenever inthe opinion of the Con-
tracting Officer the aggregate of such payments shall be within the amount
to which the Contractor will be entitled hereunder. If the total of
such payments is in excess of the amount finally agreed or determined to
be clue 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 the Govern-
ment; provided, however, that no interest shall be charged with respect to any
such excess payment attributable to a reduction in the Contractor's claim
by reason of retention or other disposition of termination inventory until
ten days after the date of such retention or disposition.
(k) Unless otherwise provided for in this contract, or by applicable
statute, the Contractor, from the effective date of termination and for
a period of six years after final settlement under this contract, shall
preserve and make available to the Government at all reasonable times at
the office of the Contractor but without direct charge to the Government,
all its books, records, documents, and other evidence bearing on the costs
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, micro-photographs, or other authentic reproductions
thereof,
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20. AUTHORIZATION AND CONSENT (ASPR 9-102.1)
The Government hereby gives its authorization and consent (without
prejudice to its rights of ift. emh .f`ication, if such rights are provided
for in this contract) for all-uso and manufacture, in the performance of
this contract or any part hereof or any amendment hereto or any subcontract
hereunder (including any lower?.tier subcontract), of any patented invention
(i) embodies in the structure or composition of any article the delivery
of which is accepted by the Government under this contract, or (ii)
utilized in the machinery, tools, or methods the use of which necessarily
results from compliance by the Contractor or the using subcontractor with
(a) sp:ecificstions or written provisions now or hereafter forming a part
of this
t
t
con
rac
, or (b) specific written instructions given by the
Contracting Officer directing the manner of performance. The Contractor's
entire liability to the Government for patent infringement shall be
determined solely by the provisions of the indemnity clause, if any,
included in the contract and the Government assumes liability for all other
infringement to the extent of the authorization and consent horeinabove
granted.
21. NOTICE AND ASSISTANCE REGARDING PATENT I.I NGENENT (ASPR 9-104)
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 retort to the Contracting Officers promptly
and in reasonable written detail, each notice or claim of paterit infringe-
ment based on the performance of this contract of which the Contractor
has knowledge.
(h) 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 out of the use of any sup, -.)lies furnished or work or services
performed hereunder, the Contractor shall furnish to the Government, upon
request; all evidence and information in ,)ossession of the Contractor
porta.ininfr 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
r)eing asserted.
22. BUY M RICAN ACT (ASPR 6-104.5)
(a) In acquiring end products, the Buy American Act (41 U. S. Code
10 a,-d) provides that the Government give preference to domestic source
end products. For the purpose of this clause:
(i) ncomponents" means those articles, materials; and u1J,lies; h.ich
are directly incorporated in the end products;
(ii) "end products" means those articles, materials, and supplies,
which are to bo: acquired under this contract for public;ancl
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(iii) a "domestic source end prodL'ct'T means (..) an un.manufactt_red
end preduc t which has been mined or proc:uged in the United Statt.. s and
Q'J) an end. product manufactured in the United States if the cost of the
coaaiponoo s thereof which are mined, prcduged, or manu: "actur. ocl in the
United States exceeds 50 percent of the cost of all its componens.. For
the purposes of this (a) (iii) (B), con2ponerits of foreign origin of the same
t};ne or kind as the products referred to in (b) (ii) or (i_i_I) of this
clause shall be treated as components mined,, produced., or manufactured in
the United Statea,
(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;
which the Government determines are not mined, producer', or
manufacttixed in the United States in sufficient and reasonably available
commercial quantities and of a satisfactory quality;
(iii) as to which the Secretary determines the domestic preference
to be inconsistent with the public interest; or
(iv) as to which the Secretary d'etormines the cost to the
Government to be unreasonable.
23, FILING OF P,' TENT fiPFLICILTIONS (I1SPR 9-?106)
(a) Before filing or causing to be filed a patent application disclosing
any subject matter of this contract, which subject matter is classified
31Sedret"T or higher, tho Contractor shall, citing the thi ty (3,0') clay
provision below, transmit the proposed application to the Contracting
Officer for determination whether, for reasons of national security, such
application should be placed under an order of secrecy or sealed in
accordance with the provisions of 35 U,, S. Code 181-188 or the issuance
of a patent should be otherwise delayed under pertinent statutes or
regualtions; and the Contractor shall observe any instructions of the Con-
tracting; Officer with r espect to the manner of delivery of the patent
application to the U. S. Patent Officer for filing, but the Contractor
shall not be denied the right to file such patent application. If the
Conttractinc Officer shall not 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 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 rcasona 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 apol:ication coming within the scope of
this clause, the Contractor shall observe all applicable security
regula-ttions covering the transmission of classified subject matter.,.
( 4O PATENT RIGHTS (ISPR 9-107.1)
(a) As used in this clause,, the following terms shall have the aeanin;s
set forth below.
(i) The term "Subject Invention" means by invention, improvement,
or discovery (whether or not patent )le) 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 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 understanding in writing ghat a contract would be awarded;
PRO'= that the term "Subject Invent?bn" shall not include any invention
which is specifically identified and listed in the Schedule for the
purpose of ?excludin g it from the license granted by this clause.
(:ii) The term "Technical Personnel" means any person employed. by or
working under contr^ct with the Contractor (other than a subcontractorr
whose responsibilities with respect to rights accruing to the Government
in ].nventic ns arising under subcontracts set forth in (U), (h), and (i)
below)- who, by reason of the nature of his duties in connection with the
performance of this contract, would reasonably be expected to make inventions.
(iii) The terms "subcontract" and "subcontractor" mean any subcontract
or subcontractor of the Contractor, and any lower?-tier subcontract or
subcontractor under this contract.
'b)(1) The Contractor agrees to and does hereby gr, nt to the
Government irrevocable, nonexclusive, nontronsferablo, and royalty-free
license to practice., and. cause to be practiced by or for the United States
Government throughout the world, each Subject Invention in the manufacture,
use and disposition according to law., of any article or material, and in
the use of any method. No license granted herein shall convey any right
to the Government to manufacture, have manufactured, or use any Subject
Invention for the purpose of providing services or sup :,lies to the general
public in competition with the Contractor or the Contractor's commercial
licenses in the license fields.
(2) With respect to:
(i)
any Shbject Invention made by other than Technical Personnel;
(ii) any Subject Invention conceived prior to, but first actually
reduced to practice in the course of, any of the experimental, developmental,
or research work specified in (a) (i) above; and
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(iii) the practice of any Subject Invention in foreign couu`itries;
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 tights as provided in (e) below, shall be limited
to the extent of the Contractor's right to grant the same witho# incurting
any obligation to pay royalties or other compensation to others solely
on account of said grant. Nothing contained in this Patent Rights
clause shall be deemed to grant any license under any invention other
than a Subject Invention.
(c) The Contractor shall furnish(. to the Contracting Officer the
following information and reports concerning Subject Inventions which
reasonably appear to be patentable:
(i) a written disclosure promptly after conception or first actual
reduction to practice of each such Invention together with a written state-
mentspecifying whether or not a United States patent application claiming
the Invention has been or will be filed by or on behalf of the Contractor;
(ii) interim reports, at least every twelve months, commencing with
the date of this contract, each l.stingr 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-Invention8; and
(iii) prior to final settlem.t 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 specifies that a United States patent
application claiming such Invention will`;be filed, the Contractor shall
file or cause to be filed such application in clue form and time; however,
if the Contractor, after having specified that such an application would
be f ilecl, decides not to file or cause to be filed said application, the
Contractor shall so notify the Contracting Officer at the earliest practica-
ble date and in any event not later than eight months after first pczbl ica-
tion, public use or sale.
(ii) if the Contractor specifies that a United States patent appli-
cation claiming such Invention has not been filed and will not be filed
(or having specified that such an application will be filed thereafter
notifies the Contracting Officer to the contrary), the Contractor shall:
(A) inform the Contracting Officer in writing, at the earliest
practicable date of any publication of such invention made by or known to
the Contractor or, where applicable, of any comtemplated publication by
the Contractor, stating the date and identity of such publication or
comtemplated publication; and
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(B) convey to the Government the Contr:.,ctorIs entire right, title, and
interest in such Invention by c..e'. iv: r ng' to the Cuntractinp Officer ui)on
written request such duly executed instruments (prepared by th J Government)
of assignment and app'lica'tion, and such other pa,-~ersas are deemed
necessary to vest in the Government the Cc_>ntractor's right, title, end
interest aforesaid, and the right to ap; for and prosecute patent
applicai~,ions covering such -invention thrcduFhout the world, sun.,ject, how-
ever, to the right o:? the Contractor slpo i.fied in (e) below to file
foreign applications, and sub j;,,ct further to the reservation of a non-
exclusive ant,I r yalby-fr. oe license to the Contractor (and, to its
existing and future associated and affiliated companies, if any, within
the corporate structure of which the Contractor is a part) which :License
shall be assignable to the succosso of that part of the Contract;_,rf s
business to which such Znven-L-L.on portains;
(iii) the Contractor shall furnish promptly to the Contracting Officer
on requr.es an irrevocable power of attorney to inspect and make copies of
each United States patent application filed by or on behalf of the
Contractor covering any such Invention;
(iv) in the event the Contra?ctor,9 or those other than the Gove rnrne.nt
deriving rights from the Contractor, elects not to continue prosecution of
any such United States ,patent application filet':.. by or on behalf of the
Contractor, the Contractor shall. so notify the Contracting Officer not less
than sixty days before the expiration of the response period and, upon
written request, deliver to the Contracting, Officer such duly executed
instruments (prepared by the Government) as are deemed necessary to vest
in the Government the Contractor's entire ritnt, title, and interest in
such Invention an(: the ajpp.lication, subject to 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 Contr, ctor, shall have the exclusive r i?hts to file
applications on Subject inventions in each foreign country within:
(i) nine months from the date a corresponding United States
application is filed;
(ii) six months from the date permission is granted to file foreign
applications where such filing. 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,
convoy to the Government the Contractor's entire right, title, and interest
in each Subject Invention in each foreign country in which an application
has not been filed within the time above specified, subject to the
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(13) convey to the Government the Cc,ntre.ctor? s entire right, title, and
interest in such Inven_ti_on by to the Contracting Officer upon
written requ.est such duly executed instruments (prepared by the Government)
Of assignment end applicat .on, end SUCK other papers as are deemed
necessary to vest in the Government the Ocontractor7s title, and
interest aforesaid, anr:'_ the right to apply for end prosecute patent
aupl!.tions covering such Invo.ntion thr.,ugghcu.t the, world., subject, how-
ever, to the right o ' the Contractor specified in (e) below to file
foreign applications, and subject further to the reservation of a non-
exclus.ive and rpyalty-free license to the Contractor. (and to its
existing and future associated and affiliated companies, If any, within
the corporate structure of which the Contra7,ctor is a part) which :License
shall be assignable to the successor of that ,,Dart of the Contra.etorts
business to which such Invention ppertain.s;
(iii) the Contractor shall furnish promptly to the Contracti_n Officer
on requrss an irrevocable power of attorney to ins sect an(d. make copies of
each United States patent application filed by or on behalf of the
Contractor covering any such Invention;
(iv) In the event the Contractor, or those other than the Government
deriving rights from the Contractor, elects not to continue -t)rosccut.tcon of
any such United States patent application filed by or on behalf of the
Cont.ractor9 the Contractor shall so notify the Contracting Officer not less
than sixty clays before the expiration of the response period. and, upon
written request, deliver to the Contracting, Officer such duly executed
instruments (prepared by the Government) as are deemed necessary to vest
in the Government the Contractor's entire right, title, and interest in
such Invention and the application, subject to the reservation as
specified in (?;) (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 :.ranted to the Government.
(e) The Contractor, or those other than the Government deriving
ri&h.ts from the Contractor, shall have the exclusive rights to file
aprlications on Subject inventions in each foreign country within:
(i) nine months from the date a corresponding:, United States
application is filed;
(Ii) six months from the date permission is granted to file foreign
applications where such filing 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 the Government the Contractor's er:tire right, title, and interest
in each Subject Invention in each foreign country in which an application
has not been filed within the time above specified, subject to the
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reservation of a non-ex6lusive and royalty-free license to the Contractor
together with the right of the Contractor to grant sublicenses, which
license and right shall be assignable to the successor of that part of
the Contractorts business to which the Subject Invention pertains.
(f) If the Contractor fails to deliver to the Contracting Officer the
interim reports required by (c)(?) 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 C6.,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 06,000), whichever is less, shall
have been set aside, such reserve or balance thereof to be retained until
the Contractor shall h-ve furnished to the Contracting Officer:
(i) the final report required by (c) (iii) above;
(ii) written disclosures for all Subject Inventions required by (c)
(;_) above which are shown to be due in accordance with interim reports
delivered under (c)(ii) above or in accordance with such final re-
l)orts or are otherwise known to be unreported; and
(iii) the information as to any subcontractor required by Jh) below.
The maximum amount which may be withheld under t his paragraph (f) shall
not exceed ten percent (10%) of the amount of this contract or five
thousand collars ($5,,000),, whichever is less, and no amount shall be
withheld under this paragraph (f) when the amount specified by this
paragraph (f) 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 rights accruing to
the Government under this contract. This paragraph (f) shall not be
c onstruecd as requiring the Contractor to withhold any amounts from a
subcontractor to enforce compliance with the patent provisions of a sub-
contract.
(gg) The Contractor shall exert all reasonable effort in negotiating
for the inclusion of this Patent Rights clause in any subcontract hereunder
of three thousand dollars ($3,000) or more having experimental, developmen-
tal, or research work as one of its purposes. In the event of refusal
by a subcontractor to accept the Patent Rid?hts clause, the Contractor shah
not proceed with the subcontract without written authorization of the
Contracting Officer,and upon obtaining such authorization, shall cooperate
with the Government in the negotiation with such subcontractor of an
acceptable patent rights clause; PROVIDED, however, that the Contractor
shall in any event 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 has under such subcontracts,
except that in no event shall the subcontractor be required to grant to the
Government patent rights in excess of those herein agreed to be granted to
the Government by the Contractor.
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(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 thi:a party beneficiary, amd the Contractor hereby assigns to the
Government all the rights that the Contractor would have to enforce the
subcontractor's obligations for the benefit of the Government with respect
to Subject Inventions. The Contractor shall not be obl aced to enforce
the agreements of any subcontractor hereunder relating to Subject Inventions.
(i) Nheh the Contractor shows that it has been delated in the
perfo:,?:nance of this contract by reason of its inability to obtain in
a;cordance with (g) above a suitable patent rights clause from a qualified
schc:ontractor for any item or service required under this contract for
w~klich the Contractor itself does not have available facilities or qualified
personnel, the Contractors delivery dates shall be extended for a period
of tLne equal to the duration of such delay; and, upon request of the
Contractor, the Contracting Officer shall determine to what extent, if any,
an additional extension of the delivery dates and an increase in contract
prices based upon additional costs incurred by such delay are proper under
the circumstances; and the contract shallbe modified accordingly. 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 requirement that a s i_table 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-give (35) days after the date of receipt of such request
for a waiver or modification of said requirement, the Contracting officer
fail to deny in writing such request,, the requirement shall be
deemed to have been waived by the Government. If within such period the
Cooatractor shall receive a written denial of such request by the Contracting
OLficet, this contract shall thereupon automatically terminate and the
r4'e;hts and obligations of the parties shall be governed by the provisions
o the clause of this contract providing for termination for the convenience
o the Government,
25. REPORTING OF ROYALTIES (ASFR 9-110 mod.)
The provisions of this clause shall be applicable only if the amount
of the contract is in excess of X50,000.
(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 4x250 have been paid or
are to be paid 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 shall include
the following items of information with respect to such royalties (including
the initial $250)
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filing dates), or other identification of the basis for such royalties,?
(3) The manner of computing the royalties consisting of (i) a
brief identification of each royalty-bearing unit or process, (ii) the
total amount of royalties, and (iii) the percentage rate or dollars and
cents amount of royalties on each such unit or process; PROVIDED, that
if the royalties cannot be computed in terms of units or dollars and
cents value, then other data showing the manner in which the Contractor
c ; es tine royaltiesa
(1) The name and address of each licensor to whom royalties in excess
v2S0 have b8en paid or are to be paid,
(2) The patent numbers, patent application serial numbers (with
(b) In lieu of furnishing a report under paragraph W, the Con-
tractor may fu::ni_sh 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 Such consolidated report
shall be furnished, when the furnibhing thereof has been approved, in
the nu her of copies as approved, as soon as practicable after the closb
of the accounting period covered by the reports, Such consolidated report
shallbe made in accordance with Contractor's established accounting practice
and shall include, for the accounting period, the total amount of royalties
accruing to each licensor at a rate in excess of ;,1,000 per annum on the
Contractor's over-all business, together with (i) the name and address
of each such licensor, (ii) the patent numbers, patent application serial
numbers (with filing dates), or other identification of the basis for such
royalties, (iii) a brief description of the subject matter of the license
under which royalties are charged, (iv) the percentage rate or unit amount,,
or if the royalties do not accrue by rate or unit amount, such other data
showing the manner by which the royalties accrue to licensor, and (v) an
estimate or approximation (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
e-pense 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 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 ab to accuracy or completeness of
data and ask for additional information. The Contractor shall furnish a
copy of such letter of approval to the Contracting Officer administering
this contract.
(d) After payment of eighty percent (80%) of the amount of this
contract, as from time to time amended, further payment shall be withheld
until a reserve of either (i) ten percent (10) of such amount or (ii)
~~5)000, whichever is less, shall have been set aside, such reserve or the
lip or PR
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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 Contractorts request to furnish
the report under paragraph (b) PROVIDED, that no amount shall continue
to be withheld from payment for the causes specified in the paragraph (d)
if the Contracting Officer shall find that the Contractor has not been
furnished a letter as requiro4 by paragraph (c) within a reasonable time
after making written request ~o submit a single, consolidated report under
the provisions of paragraph (b) of this clause; and PROVIDED further that
the Contracting Officer may, in his discretion, order payment to be with-
held in th amount and manner abo ,re provided if the report called for by
paragraph a) is unsatisfactory or if the report called for by paragraph
(b) is due but has not been received, or if received, is found to be
unsatisfactory. No amount shall'be withheld under this paragraph when
the minimum amount specified py this paragraph is being withheld under
other provisions of this contact 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.
26. RIGHTS IN DATA - UNLIMITED (ASPR 9-203.1)
(a) The term "Subject Data~f as used herein included writings, sound
recordings, pictorial reproductiono, drawings or other graphical repre-
sentations,, and works of any similar nature (whether or not copyrighted)
which are specified to be delivered under this contract. The term does
not include financial reports, cost analyses and other information
incidental to contract administration.
(b) Subjedt to the proviso of (c) below, the Government may duplicate,
use, and disclose in any manner and for any purpose whatsoever, and have
others so do, all Subject Date delvvered under this contract.
(c) The Contractor agrees to and does hereby grant to the Government,
and to its officers, agents, and Employees acting within the scope of
their official duties, a royalty-free, non-exclusive and irrevocable license
throughout the world., to publish, translate, reproduce, deliver, perform,
dispose of., and to authorize others so to do, all Subject Data now or
hereafter covered by copyright; PROVIDED that with respect to such Subject
Data not originated in the performance of this contract but which is incor-
porated in the work furnished under t his contract such license shall be
only to the extent that the Contactor., its employees, or any individual or
concern specifically employed or assigned by the Contractor to originate and
prepare such Data under thiscontract, now has, or prior to completion or
final settlement of this contract may acquire, the right tog rant such
license without becoming liable to pay compensation to bothers solely
because of such grant.
(d) The Contractor shall exert all reasonable effort to advise the
Contracting Officer, at the time of delivery of the Subject Date furnished
under this contract, of all invasions of the right of privacy contained
therein and of all portions of such Data copied from work not composed or
produced in the performance of this contract and not licensed under this
clause.
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(e) The Contractor shall report to the Contracting Officer, promptly
and in reasonable written 4etail, 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 granted to the Government under any
patent.
(g) The Contractor shall not affix any restrictive markings upon
any Subject Dats, and if such markings are affixed, the Government shall
,have the right at any time to modify, remove, obliterate or ignore any
such marking
27, MILE"IlRY SECURI'T'Y REQLTIR JENTS (ASPR 7-104.,.12 (a) The provisions of this cluse shall apply to the extent that this
contract involves access to security information classified "Confidential"
including "Confidential--Modified Handling Authorized" or higher.
(b) The Government shall notify the Contractor of the security
classifeation 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).
(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 safe-
guard 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 Information
as in effect on date of this contract, and any modification to the
Security Agreement for the purpose of adapting the Manual to the Con-
tractor's business; and
(ii) any amendments to laid 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 cog-
nizance over the f acility and representatives of the contracting Military
Department shall have the right to inspect at reasonable intervals the
procedures, methods, and facilites 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.
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(e) If, subsequent to the date of this contract, the security
classification or regairoments 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 be 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 a roes 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
paregr..^_ph (f) but excluding the last sentence of paragraph (e) of this
c:l .w 554
O The Contractor also agrees that it shall determine that any
ilbcontrator propsed by it for the furnishing of supplies and services
sw-h.Zich. will involve access to classified information in the Contractor's
c::tzstody has been granted an appropritte facility security clearance, which
is st: it in effect., prior to being accorded access to such classified
inf ormati_on.
28. UTILIZATION OF SMALL BUSINESS CONCERNS (ASPR 7-104,14)
(a) It is the policy of the Government as declared by the Congress
that a fair proportion of the purchases and contracts for supplies and
services for the Government be placed with small business concerns
(b) The Contractor agrees to accomplish the maximum amount of subcon-
tracting to small business concerns that the Contractor finds to be
consistent with the efficient performance of this contract.
29. EXAMINATION OF RECORDS (ASPR 7-104.15 mod.)
(a.) The Contractor agrees that the Contracting Officer or any of
his duly authorized representatives shall, until the expiration of three
after final payment under this contract, have access to and the right
to examine any directly pertinent books, documents, papers and records of
the Contractor involving transactions related to this contract.
(b) The Contractor further agrees to include in all his subcontracts
hereunder a provision to the effect that the subcontractor agrees that
the Contracting Officer or any of his duly authorized representatives shall,
until the expiration of three years after final payment under the sub-
contract, have access to and the right to examine any directly pertinent
books, documents, papers, and records of such subcontractor involving
transactions related to the subcontract. The term "subcontract" as used
in this clause excludes (i) purchase orders not exceeding yl,000 and
(ii) su'bcontr