NEGOTIATED CONTRACT CONTRACT NO. SP-1925

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP66B00728R000300040032-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 49
• Document Creation Date: December 12, 2016
• Document Release Date: September 21, 2001
• Sequence Number: 32
• Publication Date: August 19, 1961
• Content Type: CONT

Lockheed Aircraft Corporation
Burbank, California
Copy 1 of 6
Contract No. SP-1925
Amount: See Schedule
Performance Period:
See Schedule
CLASS. CIjARQau 701 TS S C.
AUiI4 Hi, 1
This contract is entered into by and between the United States of AmiArica
hereinafter called the Government, represented by the Contracting Officer
executing this contract, and the above-named Contractor which is a
corporation, incorporated in the State of California, hereinafter called
.the ._ on ractoro
Administrative Data: NO CHANCE iN NHS.
Q DECLASSIFIED
The parties hereto agree that the Contractor shall furnish the facilities
and deliver all supplies and perform all the services set forth in the
attached schedule issued hereunder, for.the consideration stated therein.
The rights and obligations of the parties to this contract shall be subject
to and governed by the attached schedule and General Provisions. In the
event of any inconsistency between the Schedule and the General Provisions,
the Schedule shall control.
IN WITNESS WHEREOF, the parties hereto have executed this contract as of
9 AUG t96'~ ~96i.
Signatures:
LOCI WEED AIRCRAFT CORPORATION
TITLE Vice President
12 SEC. 6
elease 2001/11/01 .2S fDP66B00728RG%S0t
THE UNITED STATES OF AMERICA
Contracting Officer
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CERTIFICATE
25X1A
I, , certify that I am
the 25X1A of the Corporation named
B* Contractor herein; that Clarence L. Johnson who
signed this contract on behalf of the Contractor was then
Vice President of said Corporation; that said contract
was duly signed for and in behalf of said Corporation by authority of
its governing body, and is within the scope of its Corporate powers.
25X1A
(Corporate Seal)
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Contract No. SP-1925
INDEX TO SCHEDULE
PAGE
PART I
PART II
SCOPE OF WORK ..................................................
DELIVERY SCBECJLE ....................... ?.....'........... "
PART III
CONSIDERATION AND PAYMENT.... ....... .......
4
PART IV
PRICE REDETE104INATION ..........................................
5
PART V
PROGRESS PAYlIENTS ..............................................
6
PART VI
INSPECTION AND ACCEPTANCE OF SUPPLIES AND CORRECTION OF STS
8
PART VII
WAIVER OF R84QIRIIaNTS OF GENERAL PROVISIONS ...................
8
PART VIII
SPECIAL SECURITY RESTRICTIONS .................................?
9
PART IX
LVTTER CONTRACT SUPERSEDED... ..................................
9
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Contract No. SP-1925
PART I - SCOPE OF WORK
The Contractor shall furnish the necessary personnel, equipment,
and facilities to provide the following:
Item 1 - Modify, as necessary, Government-owned U-2 Aircraft
#344 and install a Government-owned J-75-P2 engine.
In addition to the conversion mentioned above the
Contractor shall perform the necessary IRAN as
described in the Contractor's proposal dated 14 March
1961 Subject: Second IRAN Program-Project. The modi-
fied aircraft will receive the. following installations:
(a)
(b)
(c)
Item 2 - Modify, as necessary, Government-owned U-2 Aircraft
#378 and install a Government-owned J-75-P2 engine.
In addition to the conversion mentioned above the
Contractor shall perform the necessary IRAN as
described in the Contractor's proposal dated 14 March
1961 Subject: Second IRAN Program-Project. The modi-
fied aircraft will receive the following installations:
(a)
(b)
Item 3 - Cut parts for use in a potential conversion of two
additional U-2 Aircraft.
Total Target Price for Items 1 2 and 3 Total Ceiling
price for Items 1, 2 and 3
PART II DELIVERY SCHEDULE
Vehicle No. Fly-away Delivery
344 1 December 19 1
378 1 January 1962
Parts for 2 conversions 1 October 1961
PART III - CONSIDERATION AND PAYMffi(T
a. In accordance with the clause of this contract entitled "PAYMEWL'S"
and subject to redetermination of the price in accordance with the part of
25X1A the Schedule entitled "PRICE RLNATION" the Government shall pay the
Contractor upon satisfactory performance of this contract, as full payment
for the su lies and services to be furnished hereunder, the amount of
b. As of the date of execution of this contract there has been
Of
25X1A allotted for this contract the amount of this amount
is subject to the availability of FY- 2 Government funds for
25X1.D.
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the installations cited in (a b and c) of Item 1, and all of Items
2 and 3. The total amount of is subject to the provisions
of PART IV of the Schedule entitled "PRICE REDNATION."
PART IV - PRICE MOCENATION
a. Because of the nature of the Work called for by this contract
and the great uncertainty as to the cost of performance hereunder, the
parties agree that the contract price set forth in PART III hereof may
be increased or descreased in accordance with the provisions of this
clause.
b. Within 60 days after the completion or termination of this contract,
the Contractor will file with the Contracting officer a statement showing,
in such form and detail as the Contracting officer may prescribe, the Con-
tractor's cost of producing the supplies or furnishing the services called
for hereunder, together with such other information as may be pertinent in
the negotiations for a redetermined price pursuant to this clause. Such
statement of cost shall fairly reflect the normal operation of the Con-
tractor's cost system. The Contracting Officer shall have the right at all
reasonable times to make or cause to be made such examinations and audits
of the Contractor's books, records and accounts as he may request. The
Contractor further agrees to include in each of his subcontracts which is
on a cost orkcost-plus-a-fixed-fee or a price redetermination basis a
provision to the effect that the subcontractor agrees (i) to submit to the
Contracting Officer such cost data as may be required for price redet r-
mination, (ii) to permit the Contracting Officer to make or cause to to
made such eermination and audits of books, records and accounts as the
Contracting Officer may deem necessary, and (iii) to include a like pro-
vision in each of his subcontracts which is on a cost or cost-plus-a-
fixed-fee or a price redetermination basis.
c. Upon the filing of the statement and other pertinent information
required by paragraph b. of this clause, the Contractor and the Contract-
ing Officer will promptly negotiate in good faith to agree upon a reason-
able redetermined price for the entire contract which, upon the basis of
such statement and other pertinent information, will constitute fair and
just compensation to the Contractor for the performance of this contract.
In determining the extent of any estimated alto once for profit to be
taken into account in fixing such redetermined price, consideration will
be given to the extent to which the Contractor has performed the contract
with efficiency, economy and ingenuity. The redetermined price shall be
evidenced by a supplemental agreement to this contract In no event shall
the redetermined price exceed the sum of
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d. If within 60 days after the completion or termination of this
contract, the partiesshall fail to agree upon a redetermined price (which
term, for the purpose of this clause, shall include direct costs, indirect
costs and profit) in accordance with the provisions of this clause, the
failure to agree shall be a dispute concerning a question of fact within
the meaning of the clause of this contract entitled "Disputes."
a. In the event of a price increase the Government will pay or credit
to the Contractor the amount by which the redetermined price shall exceed
the contract price aforesaid. In the event of a decrease in price the
Contractor will repay or credit the amount of such decrease to the Govern-
ment in such manner as the Contracting Officer may direct.
f. For any of the purposes of the clause of this contract entitled
"Termination for Convenience of the Government" (including without limi-
tation, computation of "the total contract price" and "the contract price
of work not terminated"), the contract price shall be the redetermined
contract price agreed upon under paragraph c. of this clause or determined
under paragraph d. of this clause, as the case may be.
PART V - PROGRESS PAYMENTS
a. Progress payments, which are hereby defined as payments prior
to acceptance on work in progress for the Government under this contract,
may be made upon the following terms and conditions:
b. The Contracting Officer, may, from time to time, authorize pro-
gress payments to the Contractor upon property acquired or produced and
services performed by it for the performance of this contract: PROVIDED,
that such progress payments shall not exceed 90 percent of the cost to the
Contractor of the property and services upon which payment is grade, which
costs shall be determined from evidence submitted by the Contractor and
which 'nniet be such as is satisfdctory to the Contracting Officer as being
representative of the value of the work already performed: PROVIDED FURTHER,,
that in no event shall the total of unliquidated progress payments (see e.
below) and of unliquidated advance payments, if any, made under this contract,
exceed 80 percent of the total contract price of supplies or services still
to be delivered.
e. Upon the making of any progress payments under 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, and properly chargeable thereto-under sound accounting
practice, shall forthwith vest in the Government; and title to all like
property thereafter acquired or produced by the,Contractor for the performance
of this contract and properly chargeable thereto as aforesaid shall vest in
the Government forthwith upon said acquisition or production: PROVIDED, that
nothing herein shall deprive the Contractor of any further progress or final
payments due or to become due hereunder; or relieve the Contractor or 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 payment is made hereunder, shall be cleared of all liens
and encumbrances of any kind whatsoever upon receipt of any progress payments.
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Contract No. SP-1925
e. In making payment for the supplies furnished hereunder, there
shall be deducted from the Contract price therefor a proportionate amount
of the prrogress p&yments theretofore made to the Contractor, under the
authority herein contained.
f. It is recognized that property (including, without limitation
completed supplies, spare parts, drawings, information, partially com-
pleted 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 from 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 receipt of Notice of Termination at the option of
the Government, may acquire or dispose of property to which title is
vested in the Government under this clause, upon terms approved by the
Contracting Officer; PROVIE D, that after receipt of Notice of Termination
any such property that is a part of termination 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 case 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 unliquidated balance of
progress payments hereunder, be paid or credited to the Government as the
Contracting Officer shall direct; and such unliquidated balance shall be
reduced accordingly. Current production scrap may be sold by the Con-
tractor 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 pert of termination inventory may be sold only in accordance
with the provisions of the termination 'clause of this contract and appli-.
cable laws and regulations. Upon liquidation of all progress payments
hereunder or upon completion of deliveries called for by this contract,
title to all `roperty (or the proceeds thereof) which bad not been de-
livered to and accepted by the Goverment under this contract or which has
not been incorporated in supplies delivered to and accepted by the Govern-
meatwider this contract and to which title has vested in the Government
under this clause shall vest in the Contractor*
g. The provisions of this contract referring to "Liability for
Government-furnished Property" and any other provisions of this contract
defining liability for Government-furnished property shall be inapplicable
to property to which the Government shall have acquired title solely by
virtue of the provisions of this clause. The provisions of this clause rt
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
hereof.
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 provisions of this
progress payments clause any unliquidated balance of advance payments is out-
standing, then notwithstanding any other provision of the Advance Payments
Clause of this contract the net amount, after appropriate deduction for liqui-
dation 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 Advance Payments Clause, and shall thereafter be withdrawn only pursuant
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PART VI - INSPECTION AND ACCEPTANCE OF SUPPLIES AND CORA~O%V OF DBFECt'8
a. The f.o.b. point is the Government's base at Det. "G". Final
acceptance of the flyaway aircraft and related equipment will be receipted
for on Form DD-250 by the Chief,, Materiel Staff Project Headquarters or
his designated representative.
b. The Contractor shall provide and maintain an inspection system
acceptable to the Contracting Officer covering the supplies hereunder.
c. All supplies (including raw materials, components, intermediate
assemblies and end products) may be inspected by the: Contracting Officer
at any time during the period of manufacture. If the Contracting officer
so elects by notice in writing to the. Contractor, the Contractor shall
tender the supplies for acceptance at specified delivery points in which
event the Contracting Officer may accept them or, if they are defective
in material or workmanship or otherwise not in conformity with the require-
ments of. this contract, may reject them or require their correction. In
the event the Contracting Officer does not elect to inspect, the Contractor
hereby certifies that the vehicles and supplies delivered were of a quality
called for and were in all respects in accord with the applicable specifi-
cations.
d. Upon completion of performance and final payment by the Govern-
ment, 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 thereof,
the articles and/or equipment provided for under this contract will be
free from any defects in material or workmanship and will conform to the
requirements of this contract. Notice of any such defect or nonconformance
shall be given by the Government to the Contractor within six months of
the delivery of the defective or non-conforming article and/or equipment.
It required, bythe Government within a ressonable'time after such notice,
the Contractor hl 1. with all possible, speed: correct or, replace the defec-
tive or nonconforming article and/or equipment or, part thereof. '.When such
correction'or replacement requires transportation of the article and/or,
equipment or part thereof, shipping costs, nat, exceeding usual charges from'
the delivery point to:the Contractor's plant end return, shall be borne by
the Contractor; the Government'shall beer all other shipping costs. The
Guaranty shall then continue 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 defec-
tive or nonconforming hrticle and/or equipment or a part thereof, the Con-
tractor, if required by the Contracting Officer within a reasonable time
after the notice of defect or nonconformance shall repay such portion of the
contract price of the article as is equitable in the circumstances.
PART VII - WAIVER OF RE JIFO IS OF GENERAL PROVISIONS
V
Notwithstanding the requirements of'any of the General Provisions
of this contract to the contrary, vhensoever-:the Contractor, in perfor-
mance of the work under this contract, shall find that the requirements
of any 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 Con-
tractor shall call the attention of the Contracting Officer to such con-
flict and the Contracting officer or his duly authorized representative
for security matters shall (i) modify or rescind such security require-
ments oiA~jftpekh6al~d+ heeasl~L8~0W0104f MBSOW8 ?10000 8a
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waiver of compliance with the requirements of the General Provisions con-
flicting with such security requirements. Any waiver of compliance with
the General Provisions of this contract issued by the Contracting Officer
shall be in writing, except that the approval by the Contracting officer
of any subcontract issued hereunder by the Contractor shall be deemed to
constitute approval of waiver of any clauses of the General Provisions in
conflict with the stipulations of such subcontract.
PART VIII - SPECIAL SECURITY .RESTRICTIONS
The Contractor shall not reveal (i) the specific nature or any
details of the work being performed hereunder or (ii) any information
whatsoever with respect to the department of the Government sponsoring
this contract and the work thereunder except as the Contractor is
directed or permitted to reveal such information by the Contracting Officer
or by his duly authorized representative for security matters, and notwith-
standing any clause or section of this contract to the contrary, the Con-
tractor shall not interpret any clause or section of this contract as re-
quiring or permitting divulgence of such information to any person, public
or private, or to any officer or department of the Government without the
express consent of the Contracting Officer or his duly authorized represen-
tative for security matters
shall govern..
between this Definitive Contract and said TWX, this Definitive Contract
PART IX -,LETTER CONTRACT SUPERSED )
This is the Definitive Contract contemplated by TWX 1257 dated 9
June 1961 and supersedes said TWX in its entirety. Work performed and
payments made, if any, under said TWX shall be deemed to be work performed
and payments made under this Definitive Contract. In the event of conflict
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Clause No.
1, DEFINITIONS ea0oQO000000a 0000.0Of O 0000000. f O 000000000 0. .d^
20 ~V,9L3f~Xl 1 jN~GPES 0 0 0@ O O O 0 0 Q O V 0 0 a 0 0 f 0 0 0 D O D 0 0 0 Q 0 0 0. 0 0 0 .. @. O f 0 0 0 0 0 0 1
3 O E XT AS ............. 0 O O O O O f 0 0 0 f O O O O O O O O O O O O O O O O 0 O O O O o a a 2
4. VARIATION IN QUANTITYOOOOOO00000000000..oosoeooooeo.o. 2
5. INSSEC'(TION..[...o ....t..Oo o o o.......0 00......OO.000 OO O.. 2
6. RESPONSIBILITY FOR SUPPLIES 00000........... e.0ef.eeee0 3
79 PAY MENTSoooo0000 ~900o nose.0o..0.000e0.0.0..k.e00.000.00 4
80 ASSIGNMENT gOpF~7~'({C~SK~'1L'~j4j g~e 0 0 0. O O. O. O e O e f O O. O O e O f 0 0 0 tl a O O @ .O a 4
9. ADDITIONAL BOND SECURITYO,000Oeooeooo.,oo.o0O.oo.e.e0o 4
1?a FEDERA.L9 STATE., AND LOCAL TAXFS.eee....eea.eo.ooo.eooo 5
11. DEFAULTeoo?eeooeooooe0000.?aoooa.a000000.e.oooaoaoaeeo 7
,2. DISPUTES 1+Cnl0 0 0 p ~+ o e o o o e o a e o o o o a o o o o e a o e o. 8
13. AREAS ........ k 0 0 0, ? , , 0 0 0 0..... 0 o Q e. O 9
14. EIGHT.HOUR LAW OF 1c)12-OVERTIME COMPENSATION.......... 99
15. WALSH-HEALEY PUBLIC CONTRACTS ACT0.a.o..@...@e.a.O.O0 f~
16. NONDISCRIMINATION IN EMPLOYMENTe000000000000000000000. 10
1x. OFFICIALS NOT TO BENEFITfoosoaooeooeoffooefeooeoooao.. 10
18. COVENANT AGAINST CONTINGENT FEES ........... .0e@..f0.n. 10
190 TERMINATION FOR CONVENIENCE OF THE GOVERNMENT......... 11
20? AUTHORIZATION AND CONSENT..... to..... c.oo.o.oeeoeoe.. 3.6
21.. NOTICE AND ASSISTANCE REGARDING PATENT INFRINGEMENT... 16
22. BUY A1RICAN ACT.o...ooo..ooo.ooeooooooo000.000000.e00 1P7
23. FILING OF PATENT APPLICATIONS .... O.... aooo..oo.e.oeee. 18
240 PATENT RIGHTS.a..ae...@e..@..6.6.....0..0000@....@.... 18
25. DATA O O O O O tl 0 e 0. O 0 a 0@ .. 6 0? a Q e a. e a@ O D 0 0 0.@ a 0 0 D 0 0@ e 0 0 tl 0 0 b. 23
260 MILITARY SECURITY REQUIREMENTSQ.f.o. ..e.a..Q.eeeae .. 24/
270 UTILIZATION OF SMALL BUSINESS CONCERNS aeeaae..00. .a.. 26
28 EXAMINATION OF RECORDS ..oo.....ooeo.ofaaQfa..o.eeao.a? 26
29. GRAT~,JIlIP~ngafooo.o.oaoe ooooeo.aea.oo@o0oakfon000000as.e 26
300 CONVICT LABOR.@eaoe............00000 eaon.o00000*e.oo. 27
31. MATERIAL INSPECTION AND RECEIVING REPORT ...... o..... .. 27
32. [e-mail]........................... oeoe.ao. 2
[e-mail].
33. STBCO'N~f.lRACCTSmoo.o.o.Coooo.....o. 2d
340 GROUND AND FLIGHT TRPIS 0. 4 0 0 0. 0 0 0 f a O O O O o O O. O O O O O 0 O e. O. 0 28
350 INSPECTION AND A DI1 .00000000000.000.00k40..O.Otle000e? 33
36. GOVERNMENT F`~TP+NISHED PROPERTY 0 0 0 0 0@ 0 0 0 0 0 0 6 0.0 0 0 0 0 0.. O 0 34
37a ALTERATIONS N CONTRACT000..0000000.0@..60...000000040 38
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GENERAL PROVISIONS.;
4- 1
DEFINITIONS .. ASPR 7-103.1,
As used throughout this contracts, the following terms shall have
the meanings set forth below'
The term ?BSecretaryg means. the Secretary, the Under Secretarys,
or any Assistant Secretary of the Department, and the head or any
asalatant headf the Federal agency- and the term "his duly authorized
14
rppresentativ'e?Q means any person or persona or board (other than the
Contracting Officer) authorized to act for the Secretary.
(b) The term "Contracting Officer" means the person executing this
contract 9n behalf of the Government, and any other officer or civilian
employee who, is a properly designated Contracting Officer- and the term
incl des,,,except as otherwise. provided in this contract, the authorized
representative of a Contracting Officer acting within the limits of his
authority,
(c) Except as otherwise provided in this contract, the term 80sub-
contractst? includes purchase orders. under this contract,
CHANGES (ASPR 7m1O3.2)
The Contracting Officer may at any time, by a written order, and
without notice to ,the sureties, make changes, within the eneral scope
of this contract, in any one or more of the following- (iT Drawings,
d,si "S, or specifications where the supplies to be furnished. Are to
gn,
be specially manufactured for the Goverment in accordance therewith;
Me of shipment or packing; and (iii) place of deliverys of any
'pd such nge causes an increase or decrease in the cost of, or the time
requ$red for the performance of any part of the work under this contract,
whether phan$ed o ? not changed by any such order, an equitable adjust
mentrsha .be made in the contract price or delivery schedule, or both,
an~1the contract shall be modified in writing accordingly. Any claim by
the.,gntractor for adjustment under this clause must be asserted within
~O days from the date of receipt by the Contractor of the notification
of chinge =s That the Contracting Officer, if he
decides that the facts justify such action, may receive and act upon any
such claim asser%ed at any time prior to final payment under this con-
tract. Where the cost of property made obsolete or excess as result of
a chAnge is included in the Contractor ? s claim for ad j ist +ent, the
Contracting Officer shall have the right to prescribe the manner of
disposition of such property. Failure to agree to any adjustment shall
be a .disp`ute concerning a question of fact within the meaning of the
clan jt of this contract entitled "Disputes. ?" However, nothing in this
clause sia11 excuse the Contractor from proceeding with the contract as
changed. (Rev. No. 28, l/28/58, Rev. N.oa 3O9 3/17/58)
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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 and the price therefor have been auth-
orized in writing by the Contracting Officer.
4. VARIATION IN QUANTITY (ASPR 7-103.41
No-variation in the quantity of any item called for by this contract
will be accepted unless such variation has been caused by conditions of
loading, shipping, or packing, or allowances in manufacturing processes,
and then only to the extent, if any, specified elsewhere in this contract.
rm throughout this clause includes with-
h t
hi
(
c
e
w
plies
(a) All supbut tation raw materials, components, intermediate assemblies, and
end pro ucts) shall be subject to inspection and test by the Government,
to the a ent practicable at all times and places including the period
of manufac e, and in any event prior to acceptance. (Rev. No. 33,
5/14/58.)
(b) In case ny supplies or lots of supplies are defective in
material or workma hip or otherwise not in conformity with the require-
ments of this contra t, the Government shall have the right either to
reject them (with or out instructions as to their disposition) or
to-require their correct on. Supplies or lots of supplies which have
been rejected or required be corrected shall be removed or, if per-
mitted or required by the C tracting Officer, corrected in place by
and at-the expense of the Con actor promptly after notice, and shall
not thereafter be tendered for ceptance unless the former rejection
or requirement of correction is d closed. If the Contractor fails
promptly to remove such supplies or ots of supplies which are required
to be removed, or promptly to replace r correct such supplies or lots
of supplies, the Government either (i) y by contract or otherwise
replace or correct such supplies and char to the Contractor the cost
occasioned the Government thereby, or (ii y 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 r wire the delivery of
such supplies at a reduction in price which is eq ble under the cir-
cumstances. .`-Failure to agree to such reduction of p ce shall be a
dispute concerning a question of fact within the meani of the clause
of this contract entitled "Disputes." (Rev. No. 28, 1/28 8.)
(c) If any inspection or test is made by the Goverment n premises of the Contractor or a subcontractor, the Contractut
additional charge shall provide all reasonable facilities at-
a
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used in Co "%; ?n
tests by' the overnent shall be performed in such -a manner as not to
unduly delay t work. The Government reserves the right to charge to
the Contractor a additional cost of Government inspection and test
when supplies art n t ready at the time such inspection as test is
requested by the Cont etor or when reinspection or retest is necessim
fated by prior re echo Acceptance or rejection of the supplies
shall be made as promptly s practicable after delivery, except as
otherwise provided in this ntract- but failure to inspect and accept
j or reject supplies shall neit relieve the Contractor from responsi-
bility for such supplies as are eat in accordance with the contract
requirements nor impose liability the Goverment therefor. (Revd
t
e pe~?f?x~nance ? e o
ma at a point other than the premises of the Contractor or a subconm
trac rp it shall be at they expense of the Government except as other-
wise p vided in this contracto vl d p That in case of rejection
the Gove ent shall not be liable for any reduction in value of samples
ti with such inspection or test. All inspections and
duties if Government inspection or test is
f th i
Nob 289 1/28/58.)
(d) The inspection and test by the vernent of any supplies or
lots thereof does not relieve the Contract from any responsibility
regarding defects or other failures to meet a contract requirements
which may be discovered prior to acceptances cept as otherwise
provided in this contract, acceptance shall be co lusive-except as
regards latent defects, fraud, or such gross mistak as amount to
fraud
^(e) The Contractor shall provide and maintain an ins, ction system
acceptable to the Goverment covering the supplies hereunder Rercor?ds
of all inspection work by the Contractor shall be kept complet and
available to the Goverment during the performance of this cont t and
6. - RESPONSIBILITY FOR SUPPLIES (ASR. 7-103.6)
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 Goverment at the
designated point and prior to acceptance by the Goverment or .rejection
and giving notice thereof by the Government, the Goverment shall be
responsible for the lose or destruction of or damage to the supplies
only if such loss, destruction, or damage results from the negligence
of officers, agents9 or employees of the Government acting within the
scope of their employments and (iii) the Contractor shall bear all
risks as to rejected supplies after notice of rejection9 except that
the Goverment shall be responsible for the loss, or destruction ofp
or damage to the supplies only if such lose., destruction or damage
results from the gross negligence of officers, agents, or employees of
the Government acting within the scope of their employment. (Rev. No.
28p 1/28/58.)
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7. PAYMENTS (ASPR 7?10307) The Contractor shall be paid,, upon the submission of proper invoices
or vouchers, the prices stipulated herein for supplies delivered and
accepted, less deductions., if any, as herein provided. Unless otherwise
specified, payment will, be made on partial deliveries accepted by the
Government when the amount due on such deliveries so warrants; or, when
requested by the Contractor, payment for accepted partial deliveries
shall be made whenever such payment would equal or exceed either $1,000
or 50 percent of the total amount of this contract0 (Rev. No. 30a 3/17/58.)
8, ASSIGNMENT OF CLAIMS (ASPR 7=103.8)
(a) Pursuant to the provisions of the Assignment of Claims Act of
1940, as amended (31 U. S. Code 203,, 41 U. S. Code 15) if this contract
provides for payments aggregating $l,O00 or more, claims for monies due
or to become due the Contractor from 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 may be made to one party as
agent or trustee for two or more parties participating in such financing.
Notwithstanding 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, t? or "Confidential," be
furnished to any assignee of any claim arising under this contract or
to any other person not entitled to receive the same4 Pxovid d, That a.
copy of'anyy part or all of this contract so marked may be furnished, or
any information contained therein may be disclosed, to such aaeignee
upon the prior written authorization of the Contracting Officer.
(Rev. No0 28, 1/28/580)
(c) The Contractor shall obtain the written authorization of the
Contracting Officer prior to the assignment of any rights under this
contract.
90 ADDITIONAL BOND SECURITY (ASPR 7-103.9)
If ar ''surety upon any bond furnished in connection with this contract
becom+e'tcoeptable to the Government, or if any such surety fails 'to
furnish reports as to his financial condition from time to time as re-
quested 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.
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lOm, FEDERA ~ STATE AND LOCAL TAXES (ASPR 11- 41.1)
(a) As used _ throughout this clause,, the term "'tax inclusive dateu?
means the date of negotiated contracts and the date set for the opening
of bids -fcr contracts entered into through formal advertising, A. to
additional: supplies or services procured by modification to this. contract,,
the terms tax inclusive date0? means the date of such modification.
(b) !eccept as may be otherwise provided in this contract,, the
contract price includes all Federal,, State, and local taxes and duties
in effect and applicable to this contract on the tax inclusive dated
except taxes (other than Federal transportation taxes) from which the
Goven ents, 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 piice9 Federal transportation taxes are likewise included.
Qb) (l) If the Contractor is required to pay or bear the burden
(i) of any tax of duty? which either was not to be
included in the contract price pursuant to the requirements of-paragraph
(b)9 or was specifically excluded from the contract price by a provision
of this bbntraot~ or
't5
(iii) of an increase ;.fin rate of any tax or duty,, whether
or snot sbch tax or duty was excluded from the contract pr i,ce?
or of any interest o i? penalty- thereon,, the contract price shall be
correspondingly incr?easedg pj that the Contractor warrants in,
writifig; that no amount- for such tax,, duty,, or rate increase was inoluded
in the.contr?act price as a contingency reserve or otherwise- and VZ2LjdgA
that liability for such tax,, duty,, rate increase,, interest, or
penalty was not incurred through the fault or negligence of the Contractor
or its failure to follow instructions of the Contracting Officer.
If-the Contractor is not required to. pay or bear-the
burdendor",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), (iii) was included
in the' bbntract price,, or (iii) was the basis of an increase in the
contr tt price,, the contract price shall be correspondingly decreased or
the amountOaf such ?al-tef9 refund,, or: drawback shall be paid to the
Gover?nnment9' as directed by the Contracting Officer. The contract price
also shall be correspondingly decreased if the Contractor,, through its -
au1t? o ? r#egligenoe or its failure to follow instructions of the Contract-
ing 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 penaltye, Interest
paid or credited to the Contractor incident to a refund of taxes shall
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inure to the benefit of the Goverment 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,
- (4) Nothing in this paragraph (c) shall be applicable to
social security taxes; net income taxes; excess profit taxes; capital
stock taxes; Federal'transportation fixes, except changes in the rate
thereof9 including repeal9 pertaining to shipments from the Contractor
to the 'Government; unemployment compensation taxes - o any State and
local taxeasa except those levied on or measured by the contract or sales
price of the services or completed supplies furnished under this contract,
including gross income taxes gross receipts taxes9 dales and use taxes,
excise taxes, or franchise or occupation taxes measured by sales or
receipts from sales,
(5) No adjustment of less than lOO shall be made in the
contract price pursuant to this paragraph.
(d) Unless there does not exist any reasonable basis to sustain
an exemption, the Government agrees upon request of the Contractor9 with-
out further liability except as otherwise provided in this contract9 to
furnish evidence appropriate to establish exemption from (i) any Federal
tax9 which the Contractor warrants in writing was excluded from the
contract price9 or (1i) any State or local tax-,,-- that evidence
appropriate to establish exemption from duties will be furnished9 and
Goverment 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 from any tax that may. purm
scant 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, and 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 clauses the Contractor shall take action as
directed by the Contracting Officer9 and the contract price shall be
equitably adjusted to cover the costs of such abtion9 including any
interest, penalty, and reasonable attorne?s fees. (Rev. Rio. 28, 1/28/58)
(Rev. No.-39, ll/3/5~; Rev. No. 49, lO/1/59)a
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ii. DEFAULT (ASPR 7-103-11 m ASPR 8-707)
(a) The Government may, subject to the provisions of paragraph (c)
below, by written notice of default to the Contractor, terminate the
whole. air any part of this contract in any one of the following circuaa
stanoeso
(i) 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 perform any of the other
provisions of this contract, or so fails to make progress as to
endanger performance of this contract in accordance with its terms,
and in either of these two circumstances does not cure such failure
within _a period of 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.
...(b) In the event the Government 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'
, That the Contractor shall continue the performance of this
contract to the extent not terminated under the provisions of this
clause..
(e) Except with respect to defaults of subcontractors, the
Contractor shall not be liable for any excess costs if the failure to
perform the contract arises out of causes beyond the control and with-
out 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,
floods9_epidemics, quarantine restrictions, strikes, freight embargoes,,
and unusually severe weather; but in every case the failure to perform
must be beyond the control and without the fault or negligence of the
Contractor., If the failure to perform is caused by the default of a
subcontractor, and if such default arises out of causes beyond the
control of ;both the Contractor and subcontractor, 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 services
to be fu niched by the subcontractor were obtainable from othhe' sources
in-,3ufficienttime to permit the Contractor to meet the required delivery
schedule
(d) If this contract is terminated as provided in paragraph (a)
of this clause, the Government, in addition to any other rights provided
in this clause,.may require the Contractor to transfer title and deliver
to the Government, in the manner and to the extent directed by the
Contracting Officer, (i) any completed supplies, and (ii) such partially
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completed supplies and materials, parts, tools., dies., jigs, fixtures,
plans, drawings., information., and contract rights (hereinafter called
"manufacturing materials") as the Contractor has specifically produced
or specifically acquired for the performance of such part of this con-
tract 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 Goverment shall be
at then contract price, Payment for manufacturing materials delivered
to and accepted by the Government and for the protection and preservatia
of property shall be in an amount agreed upon by the Contractor and the
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
pursuant to the provisions of paragraph (c) of this clause, such notice
of default shall be deemed to have been issued pursuant to the clause
of this contract entitled "Termination for Convenience of the Govern-
meant," and the rights and obligations of the parties hereto shall in
such event be governed by such clause. (Except as otherwise provided
in this contract, this paragraph (e) applies only if this contract
contains such clause.)
(f) The rights and remedies of the Government provided in this
clause shall not be exclusive and are in addition to any other rights
and remedies provided by law or under this contract. (Rev. No. 36,
9/5/5$)0
120 DISPUTES (.ASPR 7-103.1q )
-(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 writing and mail or otherwise' furnish
a copy thereof to the Contractor. The decision of the Contracting
Officer shall be final and conclusive unless, within 30 days from the
date of receipt of such bopy, the Contractor mails or otherwise furnishes
to the Contracting Officer a written appeal addressed to the Secretary.
The decision of the Secretary or his duly authorized representative for
the determination of such appeals shall be final and conclusive unless
determined by a court of competent jurisdiction to have been fraudulent,;
or capricious, or arbitrary, or so grossly erroneous as necessarily to
imply bad faith, or not supported by substantial evidence. In connec-
tion 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.
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(b) This 'Disputes clause does not preclude consideration of law
questions, in connection with decisions provided for in paragraph (a)
aboves o..dj. That nothing in this contract shall be construed as
Making final they decision of any-,administrative official, representative,
or board on a question of law. (Rey. No... 289 1/28/58.)
lam S0VIET_CONTROLILEP AREAS (ASPR 6403)
(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 Office ?.
.. ,P(b) The Contractor agrees-to insert the provisions of this clauseg,,
including .the Sovi.et-contr?oll,.ed areas listed in the Schedule and this
subparagraph (b),,, in all subcontracts her'eunder. (:Rev. No. 399 ll/3/58.
14e EIGHT-HOUR LAW OF 19l VERT COMPENSATION 4SPR.l2m303. ,)
i
This contract, to the extent that it is of a character spec
the Eight-Hour Law of 1912-as amended (40'g0 S. Code 3T -326odandd5is not
covered by the Walsh-Healey Pablic- Contracts t of saiEight-Hour
is subject to the following provisions and exceptions
Law of 19129 as amended, and to all .other provisions and exceptions of
S44 Law.
No laborer or mechanic. doing any part of the work contemplated by
this contract, in the employ of the Contractor or any s7xbcontractor
contracting for any part of the said work contemplated, shall, be re-
quired or permitted to work more than eight hours in any one calendar
day upon such work,, except upon the condition that compensation is paid
jc s.uch lager or mechanic in accordance with the provisions of this
clause, The wages of every laborer and mechanic employed by the Con-
tractor or any subcontractor engaged in the performance of this contract
shall, be computed on a basic day rate of eight hours per day,- and work
in excess of eight hours per day is permitted only upon the condition tbat
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 rAquire
meents. of this clause a penalty of five dollars shall be imposed for each
labs eer. or mechanic for every calendar day in which such employee is
required or pertted to labor more than eight hours upon said `work
without,recceiving compensation computed in accordance with this clause.,
and all penalties thus imposed shall be withheld for the use and benefit
of the Government. (Rev,, No. 289 1/28/58.
15. WALSH ,HEALEY PUBLIC CONTRACTS ACT (ASPR. 22-604 mod)
If this contract is for the manufacture or furnishing of materials.,
supplies, articles or equipment in an amount which exceeds or may exceed
$109000 and is otherwise subject to the Walsh-Healey Public Contracts
Act.-as amended (41 U. S. Code 35-45)p there are hereby incorporated
by reference all representations and stipulations required by said Act
and regulations issued thereunder by the Secretary of Labor, such
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representations and stipulations being subject tg.;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.
160 NONDISCRIMINATION IN EMPLOYMENT (ASPft 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 followings employment,,, upgrading demotion/or transfer;; recruitment
or recruitment advertising, layoff or termination; rates of pay or other
forms of compensation- and selection for training, including apprentice-
ship. 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. (Rev. No. 28, 1/28/58.).
(b) The Contractor further agrees to insert the foregoing
provision in all subcontracts hereunder,, except subcontracts for
standard commercial supplies or raw materials,, "and except as insertion
of the foregoing provision in a subcontract would jeopardize or
conflict with the security considerations established in connection
with this contract."
17. OFFICIALS 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
extend to this contract if made with a corporation for its general
benefit,
18, COVENANT AGAINST CONTINGENT FEES (ASPR 7-103020)
The Contractor warrants that no person or selling agency has been
employed or retained to solicit or secure this contract upon an agree-
ment or understandin for a commission,, percentage,, brokerage or
contingent fee,,'excepting bona fide employees or bona fide established
commercial or selling agencies maintained by the Contractor for the
purpose of securing business. For breach or violation of this warranty
the Government shall have the right to annul this contract without
liability or in its discretion to deduct from the contract price or
consideration, or otherwise recover,, the full amount of such commission,,
percentage, brokerage,, or contingent fee.
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190 TMUNATION FOR CONVENIENCE OF THE GGVERNKM (A&PR 8J7Ol)
(a) The p erfor?mance of work under this contract. may be terminated
by the Goverment in accordance with this clause in wholes or from time
to time in part,, whenever the Contracting Officer shall determine that
such
such termination is in the beat interests of the. Goverment. Any
termination shall be effected by delivery to the Contractor.of a Notice
of Termination specifying the extent to which performance of work under
, the contract is terminated, and the date upon which such termination
becomes effective.
fib) After receipt of a Notice ofTe nnation,C ndrexcept aas
otherwise directed by the Contracting O fl the (i) stop work under the contract on the date and to the extent
specified in the Notice of Termination'
(ii)-place no further orders or subcontracts for materials,,
services or facilities9 except as may be necessary for completion of
such portion of the work under the contract as is not term n te>le the (iij) terminate all or~ew~r?~Cnn~en~~~dabyt'st he Noticetc~ft that
of
they relate to the performance
Termination,
(iv) assign to the Government,, in the man erg at the times,, and
to the extent directed by the Contracting Officer,, all of the right,, UV'=e9
and interest of the Contractor under the orders and subcontracts so ter-
minated9 in which case the Government shall have the right in its
discretion, to settle or pay any or all claims arising out of the termin-
ation of such orders and aubcontracts~
(v) settle all outstanding liabilities and all claims arising
out of such termination of orders and subcontracts,, with the approval
or ratification of the Contracting Officer,, to the extent he may required
oses cif
th
e pup
which approval or ratification shall be final for all.
this clause
(vi) transfer title and de .iver? to the Government, in the
manner, at the times,, and to the extent,, if any9 directed by the
Contracting Offiderfl (A) the fabricated or unfabr?icated parta9 work i,
process, completed work, supplies, and other material produced as a
part of9 or acquired in connection with the performance of9 the work
and (B): the completed or
of Termination
Notic
b
h
,,
e
e
y
terminated
partially completed plans,, drawinga9 infformation9 and other property wrhicha9
if the contract had been completed,, would have been required to be furnished
to the:. Government?
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(vii) use its best efforts to-sellD in the manner,, at the times,
to the exteat9 and at the price or prices directed or authorized by the
Contracting Officer,, any property of the types referred to in (vi) above;
g ' however., that the Contractor (A) shall not be required to
extend credit to any purchaser,, and (B) may acquire any such property
under the conditions prescribed by and at a price or prices approved by
the Contracting Officer? and pX2XUJgd ? z 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 other manner as the Contracting Officer
may direct;
(viii) complete performance of such part of the work as shall
not have been terminated by the Notice of Termination; and
(ix) take such action as may be necessary, or as the
Contracting Officer may direct,, for the protection and preservation
of the property related to this contract which is in the possession of
the Contractor and in which the Government has or may acquire an
interest, -
At anytime after expiration of the plant clearance period,, as defined
in Section VIII9 Armed Services Procurement Regulation? as it may be
amend, from time to times the Contractor may submit to the Contract=
i .Officer a list,, certified as to quantity and quality9 of any or all
itrtsa-of termination inventory not previously disposed of, exclusive
of items the disposition of which has been directed or authorized by
the Contracting Officer,, and may request the Goverment to remdve such
ite sT 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? that the list submitted shall be subject to verification
by the Contracting Officer upon removal of the items,, or if the items
are stored9 ; within forty-five (45) days from the date of subis'sion of
the listQ and any necessary adjustment to correct the list as Submitted
shall ? be made prior to final settlements
('?) "After receipt of a Notice of Termination,, the Contractor shall
submit'"tai the Contracting- Officer its termination claim,, in th4 for f:^
and with aP_&tification prescribed by the Contracting Officer. 'Such-"
claim, shall be submitted promptly but in no event later than one yeaf
from the" effective date. of termination,, unless one or more extelsio ns in
writing are' granted by the Contracting Officer,, upon request of then
Contractor 'maade in writing within such one year period or autha sized `ear
tensiofi''thereof. However,, if the Contracting Officer determines that
the.facts justify such action,, he may receive and act upon any'such-?'
terminati'on' claim at anytime after such one year period or any 'extension
thereof o Upon failure of the Contractor to submit its termination claim
within the time allowed,, the Contracting Officer may, subject to any
Settldm*nit Review Board approvals required by Section VIII of the Armed
Services Procurement Regulation in effect as of the date of execution
of this contract, determine,, on the basis of information available to
him,, the amount9 if any, due to the Contractor by reason of the termjn.
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atic `ti& hall thereupon pay to the Contractor the amount so determined.
- '(d) Subject to the pixovisions of paragraph (o), and subject to any
Settletezt Review ' Board approvals required by Section VIII of the Armed
Sei?vides ,?rocurenez t Regulation in effect as of the date of execution of
this contract, the Contractor and the Contracting Officer may agree.-`upon
the whole'`Oi "an part of the'amount or amounts to be paid to the
ContriiAtor`by reasorrOf the total or partial termination of work purs*nt
to. this dlauseg"w'ihichamount or amounts may include a reasonable;' allowance
f oi-'profit on- work doiie t r that such agreed -amount or amounts,
excltt i*6'of settlement costs, shall not exceed the total contract price
at redoed``y'the amount of payments otherwise made and as further
reduced by the contract price of work not terminated. The contract shall
be am ded accordingly,' and the Contractor shall be paid the agreed amount.
Nothing in paragraph (e) of this clause, proscribing the amount to be
paid to the'Contractor in-the event of failure of the Contractor and"the
Contracting` Offices' 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- afiaunt or: amounts which may' be agreed upon to be paid to the Contractor
fi.
pursuit to r thi i paragraph (d).
(e)-'Ii the event of the failure of the Contractor and the Contract
charges$
(ii) the total of
i ?Cffieer"'Wags?e& aa- provided in paragraph (d) upon the whole ` amo'tnt
eta- be Paid to' the Contractor by reason of the termination of work pu' 's oLut
to this clause, the Contracting Officer shall, subject to any Settlement
Review Board approvals required by Section VIII of the Armed Services
Prociitebtent' Regulation in effect as of the date of execution of' this
eontraot. determine, on the basis of information available to him., the
amount$ . if any,due to the Contractor by reason of the termination and
shall" pad"'t`b the Contractor 'the amounts determined as follows&.
(i) for completed supplies accepted-by the Government (?
sold or acgii.red-,as provided in paragraph (h)(vii) above) and not there-
tofore paid far,. a lsimt` euivalent to the aggregate price for such
supplies`cozriputed in accordance with the price or prices specified in
the cot t*eaet, appropriately adjusted for a saving of freight -or other
?A (A) the costs incurred in the performance ' of the work
termibatPd,`including initial costs and preparatory expense allocable there-
to., but exclusive of any costs attributable to supplies paid or to be
paid for under paragraph (e) (i) hereof
A
(B) the cost of settling and paying claims arising out of
the termination of work under subcontracts or orders, as provided in
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paragraph (b)(v) above,, which are properly'chargeable to the terminated
portion of the contract (exclusive of amounts paid or payable on account
of MIpplies`or' materials delivered or services furnished by subcontractors
or vendors-prior to the effective date of :the Notice of Terminaction,
which amounts shall be included in the costs payable under _(A) above; and
(C) a sum,, as a profit,, equal to 2 percent of that part
of the amount determined under (A) above which represents the cost of
articles and materials not processed by the Contractor, plus a sum
equal to'8 percent of tho remainAer of such amount, but the aggregate of
such sumo' shall not exceed 6 percent of the whole of the amount deter-
mined under (A) above., which amount for the purpose of this subdivision
(C) shall exclude any cruges for inter#st on borrowings;
however' that if it appears that the Contractor would have sustained a
loss on the entire contract had it been completed9no profit shall be
included or allowed under this subdivision (C) and an appropriate
adjustment shall. be made reducing the amount of the settlement to
reflect the indicated rate of loss- and
(iii) the reasonable costs of settlements including accounting,
legal, clerical, and other expenses reasonably necessary for the
preparation of settlement claims and supporting data with respect to
the terminated portion of the contract and for the termination and
settlement of subcontracts thereunder, together with reasonable storage,
transportation, and other costs incurred in connection with the protection
or disposition of property allocable to this contract.
The total sum to be paid to the Contractor under (i) and (ii) of this
paragraph (e) shall not exceed the total contract price as reduced by
the amount of payments otherwise made and as further reduced by
the contract price of work not terminated. Except for normal spoilage,
and except to the extent that the Government shall have otherwise
expressly assumed the risk of loss,, there shall be excluded from the
amounts payable to the Contractor as provided in (e)(i) and (ii)(A)
above, the fair value, as determined by the Contracting Officer, of
property which is destroyed,, lost,, stolen, or damaged so as to become
undeliverable to the Government, or to a buyer pursuant to paragraph
(b) (vii).
(f) Any determination of costs under paragraph (c) or (e) hereof
shall be governed by the principles for consideration of costs set
forth in paragraph 8-302 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
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tha't' if the, Contractor has failed to" Submit its claim within the time.
provided in paragraph (c) above and has failed to r?equ^st extension of
math time, it shall have no such right of appeal. In any case where
the Contracting Officer has made a determination of the amount due under
;a,r ;grapy (c) or (e) above, the Government shall pay to the Contractor
the followings (i)if there is no right of appeal hereunder or if no
timely appeal has been taken, the amount-so determined by the Contract-
ing Officer, or (ii) if an appeal has been taken, the amount finally.
determined on such appeal.
amount due the Contractor under this
t th
e
(h) In arriving a
clause there shall be deducted (i) all unliquida.ted advance or other
payt6tts- oxt accburit theretofore made to the Contractor, applicable to
the terminated portion of this contract, (ii) any claim which the Govern-
ment may have against the Contractor in connection with this contract,
rice -for or the proceeds of sale of, any materials,
? the agreed p a
supplies, or'other things acquired by the Contractor or sold, pursuant
to-the prbUisions-of this clause, and-hot otherwise recovered by-or,
credited to the Government.
mination hereunder be partial, prior to the
t
3)
h
er
If t
e
{` ettlement of the terminated portion of this contract, the Contractor
may file with the Contracting Officer a request` in writing for an
citable adju9tment of th^ 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 adjust-
ment .as may be agreed upon shall be made in such price or prices.
(j The Government may from time to time., under such terms and conditions it nay pro a enter
payment
cr3be~s make "- artial payments and
as
on account against costs incurred by the Contractor in connection with
the terminated portion of this contract whenever in the opinion of the
Contracting Officer the aggregate of such.-payments shall-be within the
amount to which the Contractor will be entitled hereunder. If the
total of- -ss Oh patients is in excess "of the amount finally agreed ;or
determ ned t6 be due -dtder this clause, such excess shall-be payable
by-the Contractor to the Goverment upon demand, together with
inter-st computed at the rate of 6 percent per annu, for the period
from the date such excess payment is received by the Contractor to the
date, on Which such excess is repaid to the Government; 9 how-
ever`, that nor interest shall be charged with respect to any such excess
pat attributable to a reduction in the Contractor?s claim bar
reason' of retention or -other disposition of termination inventory
until tendays"after the date of such retention or disposition, or such
later date as determined by the Contracting Officer by reason of the
t ..
circumatancese
rovided for in this 'cdntr`act, or by applicable
(k
taU
l
th
rwise
)
n
ess o
p
e
rmination
t
d
ate o
e
sta?lute, 'J he Contractor from the erieCtive
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period of three years after final settlement under this contract, shall
preserve and make available to the Goverment at all reasonable times
at the Office of the Contractor but without direct charge to the Govern-
ment, 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,, microphotographs, or other authentic
reproductions thereof, (Rev. No. 49, 10/1/59).
20. AUTHORIZATION AND CONSENT (ASPR 9-102.1)
The Government hereby gives its authorization and consent (without
prejudice to its rights of indemnification, if such rights are provided
for in this contract) for all use and manufacture, in the performance of
this contract or any part hereof or any amendment hereto or any sub-
contract 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 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) specifications or written provisions now or here-
after forming a part of this contract,, 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 infringe-
ment 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
hereinabove grantedo(Rev. No. 28, 1/28/58))
21ti NOTICE AND ASSISTANCE REGARDING PATENT INFRINGENT (ASPR 9-104)
.,.'The provisions of this clause shall be applicable only if the
amount of this contract exceeds $10,000.
(a) The Contractor shall report to the Contracting Officer,
promptly and in reasonable written detail, each notice or claim of
patent infringement based on the performance of this contract of which
the Contractor has knowledge.
(b) In the event of any suit against the Government, or any
claim against the Government made before suit has been instituted, on
account of any alleged patent infringement arising out of the performance
of this contract or out of the use of any supplies furnished or work or
services performed hereunder, the Contractor-shall furnish to the
Government, upon request.,, all evidence and information in possession of
the Contractor pertaining to such suit or claim. Such evidence and
information shall be furnished at the expense of the Government except
An thosecases in which the Contractor has agreed to indemnify the
:Government against the claim being asserted. (Rev. No. 35, 7/15/58.).
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22. BUY AMERICAN 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 clauses
(i) "components" means those articles, materials,, and`aupplies,
which ate directly incorporated in the end products;
(i3) "end products" means those articles, materials, and
supplies,-Which are to be acquired under this contract for public use;
(iii) a- . "domestio source end product" means (A) an urunanu
factured end product which has been mined or produced in the United
States and`(B an end product manufactured in. the United States if the
cost of the components thereof which are mined, produced, or manufactured
in the United States exceeds 50 percent of the cost of all its components.
For the purposes of this (a)(iii)(B), components of foreign origin of the
same type or kind as the products referred to in (b)(ii) or (iii) of this
clause shall be treated as components_ mined, produced, or manufactured
in the United States.
.(b) -The Contractor agrees that there will be delivered under this
contract. only domestic source end products, except end products::
(i) which are for use outside the United States;
(ii) which the Government determines are not mined, produced,
or manufactured in the United States in sufficient and reasonably avail-
able comm6rcial glaantities and of a_satisfactory quality;..
(iii) as to which the Secretary , determines the domestic.
preference to be inconsistent with the public interest- or
(iv) as to which the Secretary determines. the cost to-tho
Government to be unreasonable.
(c) Any component mined, produced, or manufactured in Canada, but
not set forth in the list of Canadian supplies excepted by the Secretary
and maintained pursuant to paragraph 6-103.5(a) of the Armed Services
?Procurement Regulations shall be=treated as a component mined, produced,
or manufactured outside the United States, for the purpose of -(a)-(iii) (B)
above, unless such component is to be incorporated in an end product
.to_-.be delivered under this contract which is on-such list, or is an
its,on the list set- forth in, paragraph 6105, of the.Armed Services
Procuremeht Regulations, or-Is otherwise determined to be nonavailable
s set forth in (b) (ii) above.,, .(Rev., No.- 45,, 4/20/59)
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23. FILING OF PATENT APPLICATIONS (ASPR 9-106)
e Before filing or causing to'be filed a patent application
disclosing any`subject matter.of this contract, which subject matter
is classified "Secret" or higher, the Contractor shall, citing the
thirty (30) day provision below, transmit the proposed application to
the'Contracting Officer for determination whether, for reasons of
national security, such application should be placed under an order of
secrecy or sealed in accordance with the provisions of 35 U. S. Code
181-188 or the issuance of a patent should be otherwise delayed under
pertinent statutes or togUlations; and-the Contractor shall observe
any instructions of the Contracting Officer with respect to the manner
of delivery of the patent application to the U. S. Patent Office for
filings but the Contractor shall not be denied the right to file such
patent applicationo If the Contracting Officer shall not have given
and` 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 reasons of national
security; such application should be placed under an order of secrecy
or the issuance of a patent should be otherwise delayed under pertinent
statutes or regulations,
(c) In filing any patent application coming within the scope of
this blause, the'Contractor shall observe all applicable security
regulations covering the transmission of classified subject matters
24. PATENT RIGHTS (ASPR 7-107.2)!
(a) As used in this clause, the following terms shall have the
meanings set forth below;
(i) The term "Subject Invention" means any invention, improve-
ment, 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 contracts or
erformance of any experimental, developmental,
'
th
IB) i
p
e
n
or resear work relating to the subject matter of this contract which
was done upon an understanding in writing that a contract would be
awarded; maidmd that the term "Subject Invention" shall not include any
invention which is specifically identified and listed in the Schedule
for the purpose.of excluding it from the license granted by this clause.
(Rev. No. 28, 1/28/58.)
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the performanoP: of this 7 contraot q _ would reasonably be, l .peoted to makes
09~'echnical-.Pereonne~.B? means any -person employee
ii The term
by or wri ng -under ,contract with the Contract? ?(other than a subcontractor
whose responsibilities with respect to rights accruing to., the Qover nt
in inventions arising under subcontracts are set forth in (g)s, (h)9 and
(1) belovt who,, by-;reason of the nature .of his-duties in connection with
c?mnnetcial licensees in the licensed fi e5lde o , , , - .
the use of,-any. methodo -No liceixse granted herein shall- ctonve.y any right
to' they Go' prnmeut , to- ma as fa tune , have m +,n? actured : or piss any Subject
Invention for the purpose of providing ervicces or supp er _to the
a to?_ or the Contractor ? s
general pub 3 c in competition with the anti P
use and disposition according to law,, of any article or material,, and i.
(iii) The terms 4Dsubccontr?actP and ~ be p> x?a ae?0 mean any
subcontract or subcontractor of the Contractor, and any lower tier sum
contract .or eubcontracttr under this contract,
b) (1) The Contractor agrees to and does hereby . ,nt, to the
Government an irrevocableq nonexclusive, nontransferable,, and royalty-free
license - to practice, and cause to practiced- by o for , the , U cited States
Government throughout the w. rld., each Subject. Inven ion In they man, fa tvrea
inventions-o -.. (Rev o No 0 289 :1/28/58c)
(2) 'With respect to8
invention other than a.Subject Invention a
(i) any Subject Invention conceived prior toy `hut first.
a tua] y reduced to practice in the course ofS any. of the exper3,men p
developmental or research work specified In (a) (i) abo ,, a i
(iii). the praetioe of-any Subject Invention in :.~reig i
co ntr'?iea,-.. the obligation of the Contractor to: grant a tense, at prccL~
Videsd in (b) (l) above'q to convey title as provided in (d) (iii) (B) or
(d) (iv) below,, and to convey', foreign rights, as provided in
fey) . be w
shall be limited to the extent:~ of, the Contraotor Q right to g an't_ the-
same without invarring any obligation to pay royalties or other compen-
sation .to -others" soled on account qf said grant, Nothing contained in
this- Patent Nights clause shall, be deems to grant any .kenos, under any
reasonably, appear -to -be patentab1e09
following information and reports con esrr g Sub~e t n do n which.
The Contractor shall furnish to the Contzacti ng Offi? ;e the,
,, ) .:written disclosure promptly after oonoept oa r
first act-sal reduction to- practice :of. each such Invention, tag? air, with
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(1) any Subject Invention- made by other than Technical
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a written statement specifying whether or not a United States patent
application claiming the Invention has been or will be filed by or on
behalf of the Contractor;
(ii) interim reports, at least every twelve months
commencing with the date of this contract., each listing an such
Inventions conceived or first actually reduced to practice more than
three months prior to the date of the report, or certifying that there
are no such unreported Inventions; and
(iii) prior to final settlement of this contract., a
final report listing all such Inventions including all those previously
listed in interim reports.
(d) In connection with each Subject Invention referred to in (c)
(i) above,, the Contractor shall do the followings
(i) if the Contractor specifies that a United States
patent application claiming such Invention will be filed,, the Contractor
shall file or cause to be filed such application in due form and time;
however,, if the Contractor, after having specified that such an appli-
cation would be filed, decides not to file or cause to be filed said
application, the Contractor shall so notify the Contracting Officer at
the earliest practicable date and in any event not later than eight
months after first publication, public use or sale.
(ii) if the Contractor specifies that a United States
patent application claiming such Invention has not been filed and will
not--be filed (or having specified that such an application will be
filed thereafter notifies the Contracting Officer to the contrary)) the
Contractor shalls
(A) inform the Contracting Officer in writing at
the earliest practicalbe date of any publication of such Invention made
by or'known to the Contractor or9 where applicable., of any contemplated
publication by the Contractor, stating the date and identity of such
publication or contemplated publication; and
(B) convey to the Government the Contraetor?es
entire right.-title, and interest in such Invention by delivering to
the Contracting Officer upon written request such duly executed instru.
ments (prepared by the Government) of assignment and application, and
such other papers as are deemed necessary to vest in the Goverment the
Contractor?s right., title, and interest aforesaid., and the right to
apply for and prosecute patent applications covering such Invention
throughout the world., subject, however, to the rights of the Contractor
in foreign applications as provided in (e) below., and subject further
to the reservation of a non-exclusive and royalty-free license to the
Contractor (and to its existing and future associated and affiliated
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compaanios if any- within the oorporate structure of f fti tae Conti actor
ccessor of` that
s
th
t
u
e
o
is a.parts which license shall bo assigna.b1e
pertains
nti
I
on
nve
part aof the =Contractores business,.'to which such
(iii) thtj Contractor shall furnish promptly to the
Contracting Officer on request a n ig?revooabl.e power of attorney to =
xs of each United States patent application filed
i
k
d
ct
e
e cap
ma
an
inspe
by or of behalf yof the Contractor,covering any such Invention;
(iv) in the event the ontiactorp or th6se`ot e r than the
Government deriving" rights. from t~e Cont ctnr elects not to continue
prosecution of any such United States patent application flied by or on
behalf- of the "Contractor, the Contractor sham so notify the Contracting
Officer not 'less than sixty days before the expiration of the response
period and. upon written rrequests deliver t9 "'the Contracting -Officer such
duly executed instruments(prepared by the Govermuent)"as are, deemed
necessary'to vest in the Government the Contractor?Ps entire" nighty title,,
and 7int6rpSt in such Invention and the application, subject to the
(v) they Contractor shah deliver to thee `contracting
Officp duly executed instruments fully, confirmatory or any iteenae
rights herein agreed to be granted to-the Government,
(e) The Contractor.. or those. other thaxi the Government" deriving
rights from the Contractor, shall, as between`the parties hereto.. have
s i
o
n
n
the exclusive rights to file applications on Subject Inventi
m.
each r6reigh country withinm_
W nine months from the date a corresponding United
States application is filed,
file foreign applications wheresuch filing had been prohibited ror
-'security reasons; -or
period as -may be approved by the
(iii) such longer
-
Contracti=ng Offices The Contractor shall., upon written request of
_. ..
'the Contracting Officer, convey to the Government t#e Cantractarte
entire right, titles and interest in each Subject Invention in each
`forign country in which an_application.has not been filed within the
tiue'above specified, subject to.the reservation of a non exclusive
arid` royalty-free license. to the Contractor together with the right of
-the Contractor to grant- sublicensese which license and 'right shall be
'
s business
assignable-to the successor of that part of the Contractor
tb which the Subject Invention pertainso
(f) Tf th.G~Contractor fails to deliver to the Contracting?Officer
.1u 'L j-+ rim r orts required by ( C) above. or I fails to
Ush the
C
i) above
Invent ors required '6y ( )
tr ttenedisclopsures for all Sub Cc#
shown to be due inaccordance with any interim report delivered under
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(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 M.,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 dollar
(45,000), whichever is less, shall have been set aside, such reserve
or balance thereof to be retained until-the Contractor shall have
furnished ,to_ the. Contracting Officers
the final report required by (c)(iii) above;
:(ii) written disclosures` for all Subject Inventions
squired by~(c)(3) above which are shown to be due in accordance with
interim reports delivered under(c)(i) above or in accordance with
.such final reports or are otherwise known to be unreported; and
(iii) the information as to any-subcontractor required
by (h) below, The maximum amount which may be withheld under this
paragraph (f) shall not exceed ten percent (20) of the amount of this
contract or five thousand dollars (5,000), whichever is less, and no
amount shall be withheld under this paragraph (f) when the amount
specified by this paragraph (f) is being withheld under other provi-
sions 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 contracts This
paragraph (f) shall not be construed as requiring the Contractor to
withhold any amounts from a subcontractor to enforce compliance with
the patent provisions of a subcontract.
(g) The Contractor shall exert all reasonable effort in negotiating
fqr the inclusion of a patent rights clause containing all the provisions
of this Patent Rights clause except provisions (f) and W in any sub-
contract hereunder of three thousand (13,000) or more, having experi-
mental, developmental, or research work as one of its purposes, In the
event of refusal by a subcontractor to accept such a patent rights
clause, the Contractor shall not proceed with the subcontract without
written authorization of the Contracting Officer or unless there has
been a waiver of the requirement-as hereinafter provided, The Contractor,
if unable -to comply with the requirement that such a patent rights clause
be included in a subcontract after exerting all reasonable effort to do
so, may submit to the Contracting Officer a written request for waiver
or modification of such requirement. If, within thirty-five (35) days
after the receipt of such request, the-Contracting Officer does not mail
or otherwise furnish the Contractor-written denial of such request: or
notification that the Government requests the Contractoraa cooperation
with the Government, which the Contractor agrees to provide., in negotia-
tjjng with the subcontractor for the acceptance of a suitable patent
ights clause., the requirement shall be deemed to have been waived by
the Contracting Officer as to all patent rights provisions with respect
to Subject Inventions, except such provisions, if any, relating to. the
production or utilization of special nuclear material or atomic energy.
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Such ` fequest shall specifically state' that the 'Contractor ' has `ussd`!all
reasonable effort to comply with said' requirement and shall cite the
waiver ,provision hereinabove set forth.: The Contractor is not required
when,neg?tiati:ng with a subcontractor,.to obtain ' inbehalf of the
Govextment any rights in Subject -Inventi.?ns other than as provided
herein. -However; ,the Contractor is not, precluded from separately
negotiating" ri.th a subcontractor for rights in Subject inventions for
the Contre?cicar'-s own behalf,, but any cpsts so incurred shall not be
considex'?ed as-Aft allowable charge or, cost under this 'contract.' Reports.,
instr n?ts ahd other information required to be furnished by a sub.
contra or'to the Contracting Officer under the provisions of such a
patent rights clause- in a subcontract hereunder mayupon mutual consent
of the Contractor and the subcontractor (or by direction of the-
Con-tracting Officer) be furnished to the Contractor for transriis.1ion to
the Contracting Officer.
(h) The Contractor shall.. at they earliey~t 'p ?acticable; 'date, notify
the Contraoting`Officer in-writing of..ary subcontract containing one
oi` it patent rights clauses, furnish, the Contracting,, Officer a-copy of
each: of- such clauses; -and notify the Contracting -Officer when such' sub-
contract is completed. It is understood that with respect to any sub-
contract clause granting rights to the _Covernment'in'Subjeot Inventions,
the Govexahineiit is a third party beneficiary; and the Contractor hereby
ansighs"tothe Government all the rights that the Contractor would have
to - nforoe the 'subcontractor?s ,obl.i.gations for the benefit-of-the Govern-
ment with respect to Subject Inventions.. If there are no subcontracts
containing patent rights clauses, a negative" eport"is required, The
Contractor shall not be obligated to enforce the agreements of any sub-
co itractdr lereanader relating to they obligations `o'er th6e euubcontractor to
the'Govern ent in regard to entions~o
(i) When the Contractor shows that it has been delayed in the-,
perfo noe'of this-contract by"reason of.the Contractors Inability to
obtain iaa accordance with the requirements of (g) above, `the prescribed
or other authorized suitable patent. rights clause from a qualified
subcontractor for any item par service required under this contract for
which the Contractor itself does not have available facilities or
q ified p-e~rebiinel, the Contractor's delivery dates shall, be extended
'
for ax paned of time equal to the duration of such delay.
Up ` request
it 'ah '9 an ad'd tional extension of the delivery dates and increase" in
contract prices based upon additional costs incurred by such' delay are
proper under the circumstances and the contract shall be modified accord-
ingly. (Rev. No. 38,10/15/5$40
`DATA(ASR. 9-203 -1)
(a' The -term "Subj ct Data", a usyed-_ erein in6it.des r'Fitinga
sound recordings, pictorial reproductions., drawin s`or other graphical
representations,, and works of any similar nature (whether or not copy-
righted) which are specified to be delivered under this contract. The
term does not include financial reports, cost analyses., and other irifor-
nation incidental to contract administration.
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(b)--The Contractor agrees to and does hereby grant to the
Government, and to its officers, agents, and employees acting within
the scope of their official duties, a royalty-free, nonexclusive and
irrevocable license throughout the world for Government purposes to
publish.,'translate, reproduce, deliver., perform, dispose of, and to
authorize, others so to do, all Subject Data now or hereafter covered
by copyright- r v r', , that with respect to the Subject Data now or
hereafter covered by copyright and not originated in the performance
of this contract, such license shall be only to the extent that the
Contractors its employees., or any individual or concern specifically
employed or assigned by the Contractor to originate and.prepare such
Data under this contract., now has., or prior to completion or final
settlement of this contract may acquire, the right to grant such license
without becoming liable to pay compensation to others solely because
of such grant,
(o) The Contractor shall exert all reasonable effort to advise
the Contracting Officer, at the time of delivery of the Subject Data
_furnished under this contract., (i) of all invasions of the right of
privacy contained therein and (ii) 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.
d) The Contractor shall report to the Contracting Officer,.,
promptly and in reasonable written detail, each notice or claim of
copyright infringement received by the Contractor with respect to all
Subject Data delivered under this contract,
(e) 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,
f) Subject to the proviso of (b) above and unless Otherwise
limited below, the Government may"duplicate., use, and disclose in any
manner and for any purpose-whatsoever, and have others so doe all
Subject Data delivered under this contract,
(g) Notwithetanc'ting any provisions of this contract concerning
-:inspection and acceptance.., the Government shall have the right at any
time to modify, remove., obliterate or ignore any marking not authorized
by the terms of this contract on any piece of Subject Data furnished
under this contract, (Rev. No. 38, 14/15/58.)
26, MILITARY SECURITY REQUIREMENTS (AS1R 71104.1)
(a) The provisions of this clause shall apply to the extent that
th4.s,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
cle.-esification of this contract and the elements thereof, and of any
sube-eci'uo~nt revisions in such security classification, by the use of a
Security Requirements Check List (DD Form 254) or -other, written infor
mation o
(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 a 'dofdance with the requirements ofs
(i) the Security Agreement (DD Form 441), including the
Department-of Defense Industrial Security Manual for Safeguarding
Classified Information as in effect on the date of this contract, and
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 -thP -facility.
.'ma(d) RepresentativAs 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
interlals the 'procedures, methods, and facilities utilized by, the
Contractor in complying with the security requirements under this
contracts 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
aatiois to by taken in order to-effect compliance withsuch require-
mPrits~.
91
(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
some manner as if such changes were directed under the "Changes" clause
in this contract.:
(f) The Contractor agrees to insert, in all subcontracts here-
under-'=which involve accees'to classified security information, provisions
which shall conform substantially to the-language of this clause, includ-
ing this' paragraph (f) buteccluding"the last sentence of paragraph (e)
of thi=s claihae- '
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(g) The Contractor also agrees that it Shall determine that any
subcontractor proposed by it for the furnishing of supplies and services
which will involve access to classified information in the Contractor's
custody has been granted an appropriate facility security clearance,
which is still in effect, prior to being accorded access to such classi-
field information. (Rev. No. 349 6/1/589 Rev. No. 489 8/1/59)
27. UTILIZATION OF SMALL BUSINESS CONCERNS (ASPR 7-104.3-4)
(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. (Rev. No. 28, 1/28/58.)
(b) The Contractor agrees to accomplish the maximum amount of
subcontracting to small business concerns that the Contractor finds
to be consistent with the efficient performance of this contract.
28. 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 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.
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
subcontract, have access to and the right to examine any directly
pertinent books, documents, papers, and records of such subcontractor
involving transactions related to the subcontract. The term "subcontract"
as used in this clause excludes (i) purchase orders not exceeding $2,500
and (ii) subcontracts or purchase orders for public utility services at
rates established for uniform applicability to the general public.
(Rev.-No. 39, 11/3/589 Rev. No. 42, 1/9/590)
29. GRATUITIES (ASPR 7.104.16)
(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 entertain-
ment, gifts, or otherwise) were offered or given by the Contractor,, or
any agent or representative of the Contractor, to any officer or employee
of----the-Government with a view toward securing-a contract or. securing
favorable treatment with respect to the awarding or amending or the
making of any determinations with respect to the performing of such
contract- 9 B ov , that the existence of the facts upon which the
Secretary or his duly authorized representative makes such findings
shall be in issue and may be reviewed in any competent court.
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(b) In the event this contract is -terminatedas provided in
paragraph (a) hereof, the Government shall be entitled (i) to pursue
the sameremedies against the Contractor as it could pursue in the event
of a breach of the contract by the. Contractor, and (ii) as a penalty
in'addition to any other damages to which it may be entitled by law, to
exemplary damages-in an amount (as determined by the Secretary or his
duly-authorized representative) which shall be not less than three nor
more than ten times the costs incurred by the Contractor in providing
any such gratuities to any such officer or employee.
(e) 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.
30. CONVICT LABOR (ASPR 7-14.17 ? ASPR 12-203)
In connection with the performance'of work under
Contractor agrees not to employ any person undergoing
imprisonment at hard labor*
this contract, the
sentence of
31. MATERIAL INSPECTION AND RECEIVING REPORT (ASPR 7-105.7)
At the tixe of each delivery under this contract the Contractor
shall prepare and furnish to the Government, in the manner and to the
extent required by the Contracting Officer., a Materiel Inspection and
Receiving Report (DD Form 250 or comparable-form). The Government
shall furnish the required forms to the Contractor upon request.
(Rev. No. 35, 7/15/58).
32. SUBCONTRACTS (AFPI 7-4030
iNb contract shall be made by the contractor with any other party
for furnishing any of the completed or substantially completed articles.,
spare parts., or work, herein contracted for, without the written approval
of the Contracting Officer as to sources.
3.3 .; SUBCONTRACTS (AFPI 7.4042)
If this contract provides for price redetermination, the following
additional provisions shall-apply to subcontracts
n
contract shall be made by.the Contractor with any other
(a} No
party for furnishing any of the completed or substantially completed
articles, spare parts or work, herein contracted for,- without the
written approval of the Contracting Officer as to sources,
71
(b) The Contractor shall give specific advance notification to
the Contracting Officer of any proposed subcontract-hereunder which (1)
is on a cost or cost-plus-era-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 contract.
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(c) The Contractor shall no a w thou t e
of the Contracting Officer, place any subcontract which (1) is on a cost
or cost-plea=a-fixed-fee basis, or (2) is on a-fixed-price basis exceed-
ing in'dollar .mouthyeither $259000 or five percent (5%) of the total
enioiantof this contract, or (3) provides for-the fabrication, purchase,
rentals installation or other ' acquisition,. of any item of industrial
facilitipss or~of special tooling having a value in-excess of $1,000, or
(4)'i6 on a time-arid-material or labor-hour basis, The Contracting.,
Officer may, in his discretion, ratify in writing any such subcontract;
such action shall constitute the consent of the Contracting Officer as
required by this paragraph (c).
-'(d) The Contractor agrees that no subcontract placed under this
contract shall provide for payment on?'a cost-plus-.-percentage-of-cost
basis,
(e) The Contracting Officer may, in his discretion, specifically
approve in writing any of the provisions of a subcontract. However,
such approval or`the consent of the Contracting Officer obtained as
required-by this clause shall not be construed to constitute a determin-
ation of the acceptability of the subcontract price, unless such
approval specifically provides that it constitutes a determination of
the acceptability'of the subcontract price.
.(f) The Contracting Officer may approve all or any part of the
Contractor`?s purchasing system and from time to time rescind or reinstate
such approval. Such approval shall be deemed to fulfill the require-
ments for obtai-ning'the Contracting Officer?a consent to subcontracts
as prescribed&in paragraph (c) Above.
The provisions of the clauses of this contract entitled "Subcontracts"
shall be applicable to this contract in addition to the provisions
pertaining to subcontracts appearing in the price revision clause. In
the evemt of conflict between the clauses, the clauses entitled "Sub-
contracts" shall govern. (AFDC No. 23, 8/4/59.)
34. GROUND AND FLIGHT RISK (ASPR 10-404)
(a) Notwithstanding any other provisions of this contracts except
as may be specifically provided in the Schedule as an exception to this
clauses the Government, subject to the definitions and limitations of this
clause, assumes the risk of damage top or loss or destruction of, aircraft
"in the opens," during "operation," and in "flights," as these terms are
defined below, and agrees that the Contractor shall not be liable to the
Government for any such damage, loss, or destruction, the risk of which
is so assumed by the Goverment.
(b) For the purposes of this clause8
Unless otherwise specifically provided in the
term "aircraft" means
(A) aircraft (including (Ii-) complete aircarfts and
(II) aircraft in the course of being manufactured, disassembled, or
reassembled, rov d that an engine or a portion of a wing or a wing is
attached to a fuselage of such aircraft) to be furnished to the Govern-
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Goverment); and -
ment under this contract `whether before or after acceptance by the
,.s(S) aircraft (regardless of whether in a state of
for under this contracts
disassembly or reassembly) furnished by the Government to the Gontrac'
a' process of ~instafla~
ng property a 11 installed t a or in the
t on9 u~or ter;orarilyremoved froms}ich aircraft 9 however9 that
sUid~`h aircraft and property are not covered by a separate bailment agree-
fii) The term in the open" means located wholly oat=
care `custody,,' or control.
side of buildings on the Contractor?s premises or at such other places
as may be'-drscribed'in the?Schedulo as being in the open for the purposes
of this olausoa except that aircraft furnished by the Government shall
be deomed to be in the open at all times while in Contractor?s poseession9
=fii) 1'he term "fight" means any flight demonstit?ati?n9
inge
=landings approved by the-Contracting Offieer in wri
landings, other' landings made in the performance of this cvntrac 9 V
flight tpst9-tax tst; or other flight; made in the performance of
,this bontract9 or, for the purpose of safeguarding the aircraft; or
p1 a?iously appro-Veld in writing by the Contracting Officer 0 With
respect to land-based aircraft9 "flight" shall commence with the taxi
roll from a flight line on theContrabtoros'premises9 and continue until
the aircraft has completed the taxi roll in returning to a flight line
on they Contractor?s premises; with iesppct to seaplanesa "flight" shall
Commnce=with"the launching from araip on the Contractor?s premises sand
continue7until-the aircraft has completed its landing run upon return
ai is beached at a pimp on the Contractor?s premises; with respect to
hmliooptersg "flight" shall commence upon engagement-of the rotors for
tho 'purpo0 -of take-off from the. Contractor's prermiseh and continue
.tntil the aircraft has returned to the ground on the Contractor?e-pre'-
miles and`-the rotors are disengaged; and with respect to vertical take-
:off aircraft,'1"flight" shall commence upon disengagement from any launch=
its'"platform or' -device on the Contractor ? s premises and continue until
the aircraft has been re-engaged. to any launching platform or-device-on
the Contractor?a premises, 419 however; that aircraft off the
Contractor's=premises shall be deemed to be in flight when on the ground
or eater only'during periods 'of reasonable duration following emergency
4.- 1%,
{iv) `The term "Contractor?s premises" means those
premises designated as such in the Schedule or in-writing`by the-Con`
tracting Officer, and any other place to which aircraft are moved for the
purpose of -safeguarding the aircraft,
others'than or, any production line? of ,leers. 9 when no in iiign-,V
(v) The term "operation" means operations and tests;
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whether or not the aircraft is in the open or in motion during the,
making of any such operations or tests, and includes operations and
tests of equipment, accessories., and power plants., only when installed
in aircraft.
(o) (l) The Government?s assumption of risk under this clause., as
to aircraft in the open, shall continue in effect unless terminated
pursuant to subparagraph (3) below. Where the Contracting Officer finds
that any of such aircraft is in the open under unreasonable conditions.,
he shall notify the Contractor in writing of the conditions he finds to
be unreasonable and require the Contractor to correct such conditions
within a reasonable time,
(2) Upon receipt of such notice, the Contractor shall act
promptly to correct such conditions., regardless of whether it agrees
that such conditions are in fact unreasonable. To the extent that
the Contracting Officer may later determine that such conditions were
not in fact unreasonable., an equitable adjustment shall be made-in the
contract price to compensate the Contractor for-any additional costs it
incurred in correcting such conditions and the contract shall be
modified in writing accordingly. Any dispute as to the unreasonableness
of such-conditions or the equitable adjustment shall. be deemed to be a
dispute concerning a question of the fact within the meaning of the
clause of this contract entitled "Disputes.'"
(3) If the Contracting Officer finds that the Contractor
has failed to act promptly to correct such conditions or has failed
to correct such conditions within a reasonable time., he may terminate
the Government0s assumption of risk under this clause, as to any of the
aircraft which is in the open under such conditions, such termination
to be effective at 12x01 A. M. on the fifteenth day following the day of
receipt by the Contractor of written notice thereof. If the Contracting
Officer later determines that the Contractor acted promptly to correct
such conditions or that the time taken by the Contractor was not in fact
unreasonable, an equitable adjustment shal.l9,notwithstanding paragraph
(f) of this.clause, be made in. the contract price to compensate the
Contractor for any additional costs it incurred as a result of termin-
ation of the Government?s assumption of risk under this clause and the
contract shall be modified in writing accordingly. Any dispute as to
whether the Contractor failed to act promptly to correct such conditions,
or as to the reasonableness of the time for correction of such conditions,
or as to such equitable adjustment, shall be deemed to be a dispute
concerning a question of fact within the meaning of the clause of this
contract entitled "Disputes."
(4). In the event the Government?a assumption of risk under
this clause 10 terminated in accordance with (3) above, the risk of loss
with respect to Government-furnished property shall be determined in
accordance with the clause of this contract, if any, entitled "Govern-
ment-Furnished Property" until the Government?s assumption of risk is
reinstated in accordance with (5) below.
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(5) When unreasonable conditions have been corrected, the
Contractor shall promptly notify the Government thereof o The -Govern-
mont'ni elect to-again assurue the risks and relieve the:Contractor of
liabilities as provided inthis"clause, or not., and the Contracting
Officer shall notify the Contractor of the Government?s-election. If,
after correction of the unreasonable conditions, the Government elects
to again assume such risks and relieve the Contractor of such liabilities,
the Contractor shall be entitled to an equitable adjustment in the
contract.price for costs of insurance, if any, extending from the end of
the third workingday a after-the Contractor notifies the Government of
such-eorreotion until the Government' notifies the Contractor of such
election. if theGovernment'eleets not to again assume such risks, and
such conditions have in "fact been corrected, the Contractor shall be
enti:taed tO-an equitable. adjusf rent for coats, of insurance, if any,
extending after `such_third working 'day,
(d) - The Gover ment's assumption of risk shall not extend to
damage to, or lossor`destruction of, such aircraft.
-(i) 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
protection and preservation of aircraft in the open, and during op-
eration, in accordance with sound industrial paractice (the term
B?COhtractor~s managerial personnel" means the Contractors directors,
officers and any of its managers, superintendents, or other equivalent
representatives, who has supervision or direction of all, or substantially
C0ntra0t6r0s operations at any one plant or separate location at which
this contract is performed, or a separate Wand complete major industrial
operation in connection with the performance of this contract);
(ii) sustained during flight if the pilot conducting
ch flight has not been approved-in writing by the Contracting Officer
(iii)rhile in the course of transportation by rail, or
by conveyance on public streets, highways, or`waterways, except for
(iv) to the extent that euoh damage, loss or destruction
is in fact covered by insuranceya
=(v) consisting of wear and tear? deterioration (including
rust and corrosion), freezing, or mechanical, structural, or electrical
breakdown or failure, unless such damage is the result of other loss,
damage, or destruction covered by this clause, rc v d, however, in the
case of Government furnished property, if such damage consists of
reasonable .wear 'and tear or deterioration, or results from inherent vice
in such property, this exclusion shall not-apply,
sustained while the aircraft is being worked upon aid
directly resulting- therefrom, including but not limited to 'any repairing,
=adjuating9- servicing or maintenance operation, unless such damages loss
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or destruction is of a type which would be covered by insurance which
would customarily have been maintained by the Contractor at the time of
such damage, loss, or destruction, but for the Government?s assumption
of risk under this clause; or
(vii) under this clause, where the total loss resulting
from each event separately cccuring is less than $500,
(e) A subcontractor shall not be relieved from liability for
damage to, or loss or destruction of, aircraft while in its possession
or control, except to the extent that the subcontract, with the prior
written approval of the Contracting Officer, provides for relief of
the subcontractor from such liability. In the absence of such approval,
the subcontract shall contain appropriate provisions requiring the
return of such aircraft in as good condition as when received, except
for reasonable wear and tear or for the utilization of the property in
accordance with the provisions of this contract. Where a subcontractor,
has not been relieved from liability for any damage, loss, or destruc-
tion of aircraft and any damage, loss, or destruction occurs, the
Contractor shall enforce the liability of the subcontractor for such
damage to, or loss or destruction of, the aircraft for the benefit of
the Government.
(f) The Contractor warrants that the contract price does not and
will not include, except as may be otherwise authorized in this clause,
any charge or contingency reserve for insurance (including self-
insurance funds or reserves) covering any damage to, or loss or destruc-
tion of, aircraft while in the open, during operation, or in flight,
the risk of which has been assumed by the Government under the provi-
sions of this clause, whether or not such assumption may be terminated
as to aircraft in the open?
(g) In the event of damage to, or loss or destruction of, aircraft
in the open, during operation, or in flight, the Contractor shall take
all reasonable steps to protect such aircraft from further damage, sep-
erate damaged and undamaged aircraft, put all aircraft in the best
possible order and, further, except in cases covered by (d)(vii) above,
the Contractor should furnish to the Contracting Officer a statement oft
(i) the damaged, lost, or destroyed aircraft;
(ii) the time and origin of the damage, loss, or destruction;
(iii) all known interests in commingled property of which
aircraft area part; and
:(iv) the insurance, if any, covering any part of the
interest in such commingled property.
Except in cases covered by (d)(vii) above, an equitable adjustment shall
be made in the amount due under this contract for expenditures made by
the Contractor in performing its obligations under this paragraph (g) and
this contract shall be modified in writing accordingly.
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(h) If prior to delivery and acceptance by the Government any
aircraft is damaged, lost, or.destroyed and the Government has under this
clause assumed the risk of such damage, loss, or destruction`;the Govern-
ment shall either (1) require that such aircraft be replaced or restored
by the Contractor to the condition in which it was immediately prior to
such damage, or (2) shall. termina-t_e this contract with respect to such
aircraft. In the event that the Government requires that the aircraft be
replaced or-restored,, an equitable adjustment shall be made in the amount
due under this :contract and `in the time required for its performance, and
this -contract shall 'be .m?dified in writing accordingly.' Ifs in the
alternative, this contract is terminated under this paragraph with
respect to` such aircraft. and under thus clause the Government has l assumed
the risk of such daze .ge?, loss,, or des Er iciion, the Contractor shall be
p'lid the...contract price forsaid aircraft (or, if applicable, any work
to'be performed on said aircraft) less such'amounts as the Contracting
Officer determines (i) that it wdulcid_ heave cost the contractor to complete
the aircraft (or any work to be p?rf rrned on' said aircraft) together with
anticipated profit, if any, on any such uncompleted` work, and 2) to be
?; the- value, if any, of the damaged aircraft or any remaining portion
thereof. "stained by the Contractor, Then Contracting Officer shall.. have
the right to prescribe the manner of disposition of the damaged., lost,
or destroyed aircraft, or any remaining parts thereof 9 and., if any
additionalcosts,,of such disposition are incurred by the Contractor, a
furtheer.equitable adjustment will be made in-the amount due to the
Contractors Failure of the parties to agree upon an equitable adjust.
rent - or upon the amount - to _be maid in the event of termination of the`
contract.with respect to any aircraft, shall-be a dispute concerning a
st; ^? of fact .within the meaning of the Disputes clause of this 7
Au
e
contract.
t the Contractor is at any time reinsb rs or
ve
th
(i) I
n
e e
n
.compensated by any third person`for any damage; loss, or destruction of
zany aircraft, the risk of which has been assured by the Goverment under
the prOsvisions of thins clause and for which the Contractor has been
compensated by the Goverment, it shall equitably reiimburse the Govern-
mente The Contractor shall do nothing to prejudice the_ Government a s
rights to recover against third parties for any such damage, lose, or
r shall at
Offic
n
e
g
destruction and upon the request of the Contracti
the Goverriment ? s expense furnish to the Government all reasonable
assistance and cooperation (including `the prosecution of _suit and the
execution of instrunents of assignment or subrogation in favor` of the'
overzment) in obtaining recover e
INSPECTION AND AUDIT (AFFI 7-4023
(a) The Contractor agrees that its books and records an its
plants, or such. part thereof as may be engaged in the performance of this
contract, shall -at all reasonable times be `subject to inapecctibn and
audit by any authorized representative of the Departments
(b) Thos Contractor shall cause a like provision to be included in
all.. subcontracts hereunder}
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36p GOVERI+1M iT: FURNISHED PROPERTY (ASPR 13-5O2)
(a) The Government shall deliver to the Contractors, for use in
connection with and under the terms of this contract, the property
described in the Schedule or specifications, together with such related
data and information as the Contractor may request and as may reasonably
be required for the intended use of such property (hereinafter referred
to as "Government-furnished Property"). The delivery or performance
dates for the supplies or services to be furnished by the Contractor
under this contract are based upon the expectation that Government
furnished Property suitable for use will be delivered to the Contractor
at the times stated in the Schedule or, if not so stated., in sufficient
time to enable the Contractor to meet euch delivery or performance
dates. In the event that Government-furnished Property is not delivered
to the Contractor by such time or times,, the Contracting Officer shall,
upon timely written request made by the Contractor, make a determination
of the delay occasioned the Contractor thereby, and shall equitably adjust
the delivery or performance dates or the contract prices or both, and any
other contractual provision affected by such delay, in accordance with
the procedures provided for. in the, clause of this contract entitled
"Changes." In the event the Government-furnished Property is received
by the Contractor in a condition not suitable for the intended use the
Contractor shall,, upon receipt thereof, notify the Contracting Officer
of such fact and, as directed by the Contracting Officer, either (i)
return such property at the Government?s expense or otherwise dispose
of the property, or (ii) effect repairs or modifications. Upon the
completion of'(i) or (ii) above, the Contracting Officer upon written
request of the Contractor shall equitably adjust the delivery or
performance dates or the contract price, or both,, and any other con-
tractual provision affected by the rejection or disposition, or the re-
pair or modification, in accordance with the procedures provided for in
the clause of this contract entitled "Changes." The foregoing provisions
for adjustment are exclusive and the Government shall not be liable to
suit for. breach of contract by reason of any delay in delivery of Govern-
mentmf?urnished Property or delivery of such property in a condition not
suitable for its intended use.
(b) By notice in writing the Contracting Officer may decrease
the property furnished or. to be furnished by the Government under this
contract, In any such case, the Contracting Officer upon the written
request of the Contractor shall equitably adjust the delivery or perform-
ance dates or the contract price,, or both, and any other contractual
provisions affected by the decrease,, in accordance with the procedures
provided for in the clause of this contract entitled "Changes."
(c) Title to the Government-furnished Property shall remain in
the Government. Title to Government-furnished property shall not be
affected by the incorporation or attachment thereof to any property
not owned by the Goverment, nor shall such Government-furnished prom
perty, or any part thereof,, be or become a fixture or lose its identity
as personalty by reason of affixation to any realty, The Contractor
shall comply with the provisions of the "Manual for the Control of
Government Property in the Possession of Contractors" (Appendix B,
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Armed Services Procurement Regulation) as in effect on the date of the
contractx,,hich Manual ishereby incorporated by reference and made a
part of this ' c6fttract, (Rev. No 0 33, 5/14/58. )
(d) The Government furnished property shall, ~nleso otherwise
provided herein?"be used only for the perfosmance''ofthis contracto
Vie) The Contract?r'shall maintain and administer, in accordance
with sound industrial practices, a program for the maintenance, repair,
protection and preservation of Government-furnished property, until
disposed -of-by the "Contractor in accord 6 with this- clause, In the-
event that any damage occurs to Govern ment -furnished property the
risk of which has been assumed by the' Goverritent under 'this ?contract,
the Dover meant shall replace, such items~or the Contractor shall make
such repair' of the property "as 'the Goverr.~ient' dix?cets~ ., he~t~-
ever, that' if" t ie` Cbfitractor cannot effect such repair within' the time
required, the`Contractor shall 'dispose Of such 'property in the, manner
directed by, the Contiaoting officer. The contract price includes no
compensation to" the Contractor for' the performance of any repair or
replacement for which the Government is responsible, and an equitable
adjustment will be made in the contract price for any such repair or
replac 4nt of Goverrmenta-fur ished. property made at the direction of:.
the Govextento Any repair or replacement for which the Contractor
is responsible uhder the provisiono of this contract shall be accomplished
by the-`Gontractor at' its, own -expense, -
(f) Except for lostl destr uctioon: or daa ag&''e ul. ng' rom a
fai:.luie -of 'the Contrac;'t6r, , due, to willful misoortduct or ;lack of good
faith of any of the Contractor's managerial persbhnel'as defined herein,
to maintain and administer the program for the maintenance, repair.,
protection' tad proses tion of the Government-furnished property as re-
quired by' paragraph ('e) hereof, and except as' specifically provided in
clause (at) 0o0 00ao4 00009 o000o0oof this contract or in the clause, or.
clauses' of 't his contract designated ' :n the Schedule, the' Contractor shall
not be liable far loss or destruction of or damage 'to`` the Government-
furnished property (A) caused by any peril while the property its in
transit off the Contractor?s premises, or (B) caused, by any of the
follo'lai z.
g pei?ils 'while the property is on 'the Contractor? s o? sum
contract or'8a 'premises, or on any other premises where 'such property may
properly be''located,-or by removal therefrom because. of any of the
following perilso
.XI:) -Fire., lightnings windstorms cyclone, toins do, haily
explosions riots,- riot atte hding- a strike.., 'civil corn otidn~ 'andalism -
and malicious"mischief`--"sabotage aircraft or objects falling therefroml
vehicli s 'r?unning "oh"land or tracks, excluding vehicles owned or operated
by the `Contr?adtor or any-'agent or employee of the Contractors stoke;
sprinklea? ] eakage9' " anthquake or-volcanic eruptions floods, meaning
thereby rising 'of 'a body of water hostile or' warlike action-` including
actiofi"-in hindering, -combating, or defending against an actual, impend-
ing or e .peote.d attack by & by government 'or :sovereign power (de j1are or
de facto), or by any authority using military, naval, or air forces,'-or
by an agent 6of any such government, - power,- authority, or forces; or
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(II) Other peril, of a type not listed above., if such
other prnril is customarily covered by insurance (or by a reserve for
s*lfminsurance) in accordance with the normal practice of the Contractor.,
or the prevailing practice in the. industry in which the Contractor is
engaged with respect to similar property in the same general locale,
The perils as set forth in (A) and (B) above are hereinafter called
"excepted perils"
This clause shall not be construed as relieving a subcontractor
from liability for loss or destruction of or damage to the Governarneent
furnished property while in Its possession or control., except to the
extent that the subcontract, with the prior approval of the Contracting
Officer., .ay ' provide for the relief of the subcontractor from st eh
liability. In the-absence of such approval, the subcontract shall
contain appropriate provisions requiring the return of all Govetomentm
Furnished property in as good condition as when received for the
utilization of the property in accordance. with the provisions of the -
prime contract.
The term ""Contractor ? a managerial personnel" as used herein means
the ContractorBs directors, officers and any of its managers., sUperi
tendents, or other equivalent representatives who have supervision or
direction of (1) all or substantially all of the Contractor?s business;
(II) all or substantially all of the Contractorrs operation at any one
plant or separate location at which the contract is being perfor?tned;
(III) a separate and complete major industrial operation in connection
with the performance of this contract.
The Contractor represents that it is not including in
the price hereunder, and agrees that it will not hereafter include in
any priceto?the Government, any charge or reserve for insurance
(ipcluding`self-insurance funds or reserves) covering loss or destruc
tion of or"d;ge to the. Government-furnished, property caused by any
excepted peril.
(iii) Upon the happening of loss or destruction of or. damage
to any Government-furnished property caused by an excepted peril, the
Contractor shall notify the Contracting Officer thereof.. and shall
communicate with the Lose and Salvage Organization,, if any., now~or
hereafter`dosignated by the Contracting Officer,_and with the assistance
of the Loss an&Salvage Organization so designated (unless the Contracting
Officer has directed that no such organization be employed)., shall take
all reasonable steps to protect. the Government-furnished property from
further damages separate the damaged and undamaged Government-furnished
property,"put all the Government-furnished property in the best ssible
order, and furnish to the Contracting Officer a statement ofo (A) the
lost, destroyed and damaged Government furnished property (B) the time
and origin of the lose, destruction or damage, (C) all known interests
in commingled property of which the Government-furnished property is a.
part, and (D) the insurance, if any.. covering any part of or interest
in such commingled property, The Contractor shall be reimbursed for
_
the expenditures made by it in perform.ng its obligations under this sub..
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paraaph,(iii) (including charges made to the Contractor by the Loss
alvage Organ atioi, except Any of such charges the yme t of
h e1 'the G oV ei 'erit has, at its optioa, . asst n d directly,), -ts the .:,.
exte t` pro~sed b T th'& `Contra ting Off + e ? ai d set north in a 6upplye-
(ice) "_Vl;th the approval of the 06ntr?actiaag Officer: after
loss or -d ti?Ltoti `of or damage to Government-furritshed property,
and ; iuutAct ' to ` Stich conditions and l -l%ations as may be -imposed - by
the Cdnttldctirig Officeff -the-- Contractor May, ~ii order to.t imtze
the loss to the Gd e r r i d e r i t or in order to, p4 it rrsi tpti.ou of business
or the like, sel.1 for the account of the Government any item of Govern-
meni-fur !lihP, r'r ' i '4?tr'whieh has --been damaged beyond practicable
repair, or which is so commingled or o6mbined' with `property of Pothers,-
including the Contractor, that separation is impracticable.
(v)? Except to the extent yof any loss or destruction of or
damage to 064~r~i44eft-`?n3?sh d` rd pert for' hich the Contractor
is relieved of liability -under the foregoing provisions of this
clause, and except for reasonable wear and tear or depreciation., or
the utilization of the Government furnished property in accordance
with the provisions of this contract, the Government-furnished
property (other than property permitted to be sold) shall be returned
to the Government-in as good condition as when received by the Contractor
in connection with this contract, or as repaired under paragraph (e)
above.
(vi) In the event the Contractor is reimbursed or compensated
for any loss or destruction of or damage to the Government-furnished
property, caused by an excepted peril, it shall equitably reimburse
the Government, The Contractor shall do nothing to prejudice the
Government?s rights to recover against third parties for any such loss,
destructionor? damage and, upon the request of the Contracting Officer,
shall at the Governmentos expenae9 furnish to the Government all
reasonable assistance and cooperation (including the prosecution of
suit and the execution of instruments of assignment in favor of the
Government) in obtaining recovery.I In addition, where a subcontractor
has not been relieved from liability for any loss or destruction of or
damage to the Government-Furnished property, the Contractor shall
enforce the liability of the subcontractor for such loss or destruc-
tion of or damage to the Government Furnished property for the benefit
of the Goverment
(vii) (Where applicable). In the event any aircraft are to
be furnished under this contract, any loss or destruction of, or damage
to, such aircraft or other Government-furnished property occurring in
connection with operations of said aircraft will be governed by the
clause of this contract captioned "Flight Risks?', to the extent such
clause is, by its terms, applicable,
(g) The Goverment shall at all reasonable times have access to the
premises wherein any Government-furnished property is located,
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(h) Upon the completion of this contract, or at such earlier date
as may be fixed`by the Contracting Officer, the Contractor shall submit'
in a form acceptable to the Contracting Officer.. inventory schedules
covering. all items of Government-furnished property not consumed in the
performance of this contract (including any resulting scrap), or not
theretofore delivered to the Government, and shall deliver or make such
other disposal of such Goverment-furnished property, as may be directed
or authorized by the Contracting Officer. The net proceeds of any such
disposal shall be credited to the contract price or shall be paid in
such other manner as the Contracting Officer may direct.
U) Directions of the Contracting Officer and communications of
the Contractor shall be in writing.
37. ALTERATIONS IN CONTRACT (ASFR 7-105.1)
The following alterations have been made in the provisions of
this contracts
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37. ALTERATIONS IN CONTRACT
The following alterations were made in this contract prior to
signature thereof by the parties to this contract:
a. In Clause 2, "CHANGES", substitute "90 days" in lieu of "30 days."
b. Clause 5, "Inspection" is deleted and in lieu thereof PART VII of
the Schedule has been substituted.
c. Clause 24, "Patent Rights" is amended by adding the following
sentence at the end of subparagraph (B) under paragraph (d) (ii);
"and subject also to the obligations, if any, of the Contractor,
under all terms and conditions set forth in that agreement known as the
Cross License Agreement of the Manufacturers' Aircraft Association, Inc.,
in effect as of 31 December 1928, as supplemented by the agreement of 30
September 1935."
d Clause 36, "Government-Furnished Property" is amended by adding
the following subparagraphs:
"(j) Where the words "managera, superintendents or other equi-
valent representatives" are used or referred to they shall be construed
for the purpose of this clause as?meaning "manufacturing managers, plant
managers, production wonegere, Mork =a ore, division superintendents,
or other equivalent representatives."
"(k) The provisions of this clause shall apply to all supplies
accepted and delivered but left in the possession of the Contractor for
modification, testing, or any other reason or purpose in connection with
this contract."
e. Reference is made to Paragraph (b) (iv) of Clause 34 GROUND AND
FLIGHT RISK. For the purposes of such clause, the term "Contractor's
premises" includes, without limitation, any location or geographical area
as may be used in the performance of this contract, whether or not owned
or occupied by the Contractor. While aircraft are upon promises away
from the Contractor's plant, they shall be deemed to be "in the open" at
all times.
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