LETTER TO PERKIN-ELMER CORPORATION FROM JOSEPH HARRISON WELLES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP71B00697R001600070001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 143
• Document Creation Date: December 9, 2016
• Document Release Date: April 5, 2001
• Sequence Number: 1
• Publication Date: August 11, 1958
• Content Type: LETTER

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The Perkin-Elmer Corporation
Main Avenue
Norwalk, Connecticut
00160047,0001-4
UPS-2487
Copy 1 of T
Contract No. B7-CT-695
Amendment No. 3
Jr, 11 1958
Gentlemen:
1. This document constitutes Amendment No. 3 to Contract NO.
HF-CT-695 between The Perkin-Elmer Corporation and the United
States Government and. said contract, as amended, is further amended
as hereinafter set forth.
2. PANT VII - FUNDS ALLOTTED Of the schedule is amended. by
increasing the amount allotted. to the contract for Customer No. 2
for the period 1 July 1958-30 Arne 1959 by the num of $65,000.00.
As a result of the foregoing a recapitulation of the funds
allotted to the contract is as follows:
Period Customer Amount Total Amount
1 March 1958 - 30 June 1958
1 July 1958 - 30 June 1959
(*Contingent upon the availability of funds for this purpose for
Customer No. 1 during the Government's Fiscal Year 1959)
3. All other terms, conditions and requirements of Contract No.
SF-CT-695 remain unchanged.
4. Please indicate your receipt of this Amendment NO. 3 to
Contract No. KF-Cr-695 and your acceptance thereof by executing
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the original end. two copies of this Amendment. Return the fully
executed original and. one copy to the undersigned and retain the
remaining copy for your files.
Very truly yours,
ACKNXML8DOM AND ACCEPTED
THIS 26tDAY OF August 1958
THE PERM-ELMER CORPORATION
TITLE
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The Perkin-Elmer Corporation
Main Avenue
Norwalk, Connecticut
Gentlemen:
DPS4.569
Copy j of 7
Contract No. HF-CT-695
Amendment No. 2
JUN 2 6 1958
1. This document constitutes Amendment No. 2 to Contract
No. HF-CT-695 between The Perkin-Mmer Corporation and the United
States Government and said contract, as amended, is further
amended as hereinafter set forth.
2. Pursuant to the provisions of paragraph (b) of FART V -
PERIOD OF PERFORMANCE of the Schedule, the period of performance
under this contract is hereby extended through 30 June 1959.
3. PART VII - FUNDS ALLOTTED of the Schedule is hereby
deleted in its entirety and in lieu thereof the following is
substituted:
"PART VII FUNDS LLOTTED
For the purposes of the contract there has been allotted
the following amounts:
Total
Ea= Customer Amount Amount
1 Mar 1958 - 30 June 1958
1 Jul 1958 - 30 June 1959
GRAND TOTAL
No.1
No.2
No.1
No.2
(*Contingent upon the availability of funds for this
purpose for Customer No. 1 during the Government's
Fiscal Year 1959).
When preparing the Priced Exhibits and invoices, Contractor
shall indicate thereon the Customer to which such documents
relate. Further, the invoices shall indicate (1) the period
involved, (2) the total funds allotted for said period less
the total of all previous invoices theretofore outwitted, and
thereby (3) showing the balance of funds available for
expenditure in that period. Under this amount should be set
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forth the amount currently being claimed, reflecting the
Priced Exhibit number, the line item number, quantity, unit
price and total prices therefor.
All Production Lists received prior to the end of a period
should be charged to the funds allotted for that period,
notwithstanding the work being performed and invoices being
submitted after close of the period.
Contractor will indicate on final invoices for each Customer
that such invoice is its final claim for that period and
inform the Contracting Officer of the unexpended amount for
each Customer. Unexpended funds at the end of a period for
Customer No. 1 are D21 authorized for use in a subsequent
period. Unexpended funds at the end of a period for Customer
No. 2 are authorized for use in a subsequent period and upon
notification of the amount of such funds, the Contract shall
be amended to either transfer such funds to the subsequent
period or remove them from the Contract.
If, at any time, the Contractor is of the opinion that the
cost of work authorized will exceed the amounts allotted by
Customers for a particular period, it shall notify the
Contracting Officer in accordance with the provisions of
paragraph (c) of PART I of the Schedule. 14
4. All other terms, conditions and requirements of Contract
No. HF-CT-695 remain unchanged.
5. Please indicate your receipt of this Amendment No. 2 to
Contract No. HF-CT-695 and your acceptance thereof by executing the
original and two copies of this Amendment. Return the fully
executed original and one copy to the undersigned and retain the
remaining copy for your files.
25X1A Very truly yours,
ACKNOWLEDGED AND ACCEPTED
25X1A THE PERKIN-ELMER CORPORATION
DAT
Contracting Officer
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The Perkin-Elmer Corporation
Main Avenue
Norwalk; Connecticut
Gentlemen:
Contract HF-CT-695
Amendment No. 1
APR 1 1958
1. Reference is made to Contract No. HF-CT-695 between
the United States Government and The Perkin-Elmer Corporation.
2. Pursuant to the Provisions of PART VI - ESTABLISHMENT
OF A PRICING FORMULA, the parties hereto have negotiated and
established a fixed pricing method for the first period of time
under the contract. Said pricing method and applicable time
period are attached to this Amendment No. 1 and is designated
as Appendix I to Contract No. HF-CT-695.
3. All other terms, conditions and requirements of Con-
tract HF-CT-695 remain unchanged.
4. Please indicate your receipt of this Amendment No. 1
by executing the original and two copies thereof. Return the
fully executed original and one copy thereof to the undersigned
and retain the remaining copy for your files.
ACKNOWLEDGED AND ACCEPTED
THIS 2 DAY OF April 1 1958.
THE P IN-ELMER CORPORATION
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Very truly yours,
Contracting Officer
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NEGOTIATED CONTRACT Contract No. HE-CT-695
The Perkin-Elmer Corporation
Main Avenue
Norwalk, Connecticut
Contract For: See Schedule Amount: See Schedule
Mail Invoices to: Performance Period: See Schedule
Administrative Data:
This contract is entered into by and between the United States of America,
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 New York, hereinafter called the
Contractor.
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
e
MAR 2 0 1958 4958.
Signatures:
25X1A THE PERKIN-ELMER CORPORATION THE UNITED STATES OF AMERICA
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TITLE Contracting Officer
11111111111111111V-6)1018
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Contract No. RF-CT-695
CERTIFICATE
, certify that
I am the of the Corporation named
as Contractor herein; that - who
sigaed this contract on behalf of the Contractor was then
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of said Corporation; that said con-
tract was duly signed for and in behalf of said Corporation by
authority of its governing body, and is within the scope of its Cor-
porate liowers.
-2
SL
Corporate Seal)
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SEMIContract No. HF-CT-695
INDEX TO SCHEDULE
PART I ARTICLES AND SUPPLIES TO BE FURNISHED 4
PART II PROCEDURE FOR PRICING 5
PART III DELIVERY 6
PART IV INSPECTION AND ACCEPTANCE 6
PART V PERIOD OF PERFORMANCE 6
PART VI ESTABLISHMENT OF A PRICING FORMULA 6
PART VII FUNDS ALLOTTED 6
PART VIII WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS 7
PART IX 3PECIAL SECURITY RESTRICTIONS 7
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SEC,
SCHEDULE
Contract No.
PART I - ARTICLES AND SUPPLIES TO BE FURNISHED
(a) The Contractor shall furnish to the Government such equipment,
spare parts, modification kits, components, and data for equipment of
types which are being or may hereinafter be manufactured by the Contractor
as the Government may call for hereunder. Quantities of the supplies to
be furnished shall be determined as hereinafter provided.
(b) From time to time, the Government will furnish to the Contractor,
Production Lists, numbered serially, setting forth the items which the
Government desires to procure, together with the desired delivery schedule
and preservation, packaging, packing and marking requirements therefor.
Each such Production List shall set forth therein the estimated dollar
amount thereof. Supplies of a critical nature in Production Lists shall
berearmarked with an asterisk preceding the part number and the Contractor
agrees to achieve earliest possible delivery of such items. The Contractor
will promptly delete from said lists any items rendered obsolete by design
changes and insert in lieu thereof superseding and interchangeable items,
if any, in the same or lesser quantities, as appropriate. Upon acceptance
or after these deletions and insertions, if any, the request will be an
Approved Production List. The Contractor will immediately transmit six
copies of the Approved Production List, together with any pertinent
information concerning the superseded items and any superseding
noninterchangeable items to the Contracting Officer and his duly authorized
representatives so that superseding parts numbers can be procured on
subsequent Production Lists. The Contractor will be obligated to furnish
the items in the quantities listed therein, and subject to its rights
elsewhere specified in this contract, the Government will be Obligated to
take delivery of the items so furnished on an Approved Production List.
Where Approved Production Lists do not contain a quantitative delivery
schedule, the Contractor shall forward direct to the Contracting Officer,
an interim schedule indicating the estimated data of delivery of critical
supplies. The Contractor is hereby authorized to make delivery in advance
of the schedule appearing on any Approved Production List under this contract.
(c) If it appears to the Contractor at any time that the total price
of the total quantity of items covered by any or all Approved Production
Lists is likely to exceed the funds allotted hereunder in PART VII, the
Contractor shall notify the Contracting Officer and the authorized represent-
ative of the amount of such excess. Within thirty (30) days after receipt
of such notice, the Government will either notify the Contractor it has
taken action to increase the funds allotted, or will notify the Contractor
of the items or quantities to be deleted from such Approved Production Lists
in order to bring it within the dollar amount thereof. If the Government
fails to act within said thirty-day period, the Contractor shall submit to
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h.
Contract No. isiMillekt
the Contracting Officer and the authorized representatives a recommendation
of the parts to be deleted to bring the Approved Production Lists within
said dollar amount and the Contracting Officer sh.sol approve or disapprove
such recommendations within ten (10) days after receipt thereof. If the
Contracting Officer fails to act within said ten (10) day period, the
recommendation of the Contractor shall be deemed to have been approved and
the Production Lists shall be modified accordingly. If the Government
deletes items or quantities from an Approved Production Lists, such action
shall be considered a partial termination under the clause hereof entitled
Termination for Convenience of the Government.
PART II - PROCEDURE FOR PRICING
(a) As soon as possible after receipt by the Contractor from the
Contracting Officer of a Production List, but in no event more than sixty
(60) days after wuch receipt, the Contractor shall prepare and submit to
the Contracting Officer a Proposed Priced fthibit, numbered the same as
the Approved Production List with the unit and total prices and delivery
schedule covering the items shown thereon. A reproducible original and
at least ten (10) copies of the Proposed Price Exhibit will be prepared
and shall be delivered promptly by the Contractor to the Contracting
Officer. The reproducible and three (3) copies shall carry at the end
thereof, a certificate manually signed by an officer or other person
authorized to bind the Contractor, stating that the prices therein represent
a firm quotation. Each such Exhibit shall require the written approval of
the Contracting Officer stating that the prices therein are fair and
reasonable. Each such Exhibit shall set forth therein the total dollar
amount.
(b) If the Proposed Priced Exhibit is approved by the Contracting
Officer it shall be a numbered exhibit to the contract. If the Contracting
Officer and the Contractor fail to agree on Prices in the Proposed Priced
Exhibit, the failure to agree shall be deemed a disagreement as to a
question of fact which shall be disposed of in accordance with the clause
thereof entitled "Disputes". The Contracting Officer shall reduce to
writing by a Proposed Priced Exhibit his decision, containing prices he
believes fair and reasonable. The prices decided by the Contracting
Officer shall be paid upon all deliveries, pending final decision of the
dispute.
(c) Upon approval of any Priced Exhibit, the Contracting Officer
shall) deliver a copy thereof to the Contractor and forward one copy thereof
bearing his written approval to the Finance Officer responsible for making
payments under this contract. Upon Government's acceptance of delivery of
any of the items listed on an Approved Priced Exhibit, the Contractor shall
be entitled to be paid therefor at the prices shown on the Approved Priced
Exhibit.
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Contract No. HF-CT-695
(d) The Contractor shall be paid upon the submission monthly of
properly certified invoices or, vouchers, for partial deliveries accepted
by the Government, or, when requested by the Contractor, payment for
accepted partial deliveries shall be made whenever such payment would
equal or exceed either $1,000.00 or 50% of the total amount of the
Approved Price Exhibit.
PART III - DELIVERY
Deliveries shall be made in accordance with the delivery schedules
set forth in the Approved Priced Rxhibits as May be generated under this
contract from time to time.
PART IV - INSPECTION AND ACCEPTANCE
All supplies and services to be furnished under this contract shall be
shipped F.O.B. destination in accordance with shipping instructions to be
issued at a later date. Inspection and acceptance of the\supplies or
services called for herein, shall be made by the Government at destination.
PART V - PERIOD OF PERFORMANCE
(a) The Contractor shall furnish the articles and supplies requested
hereunder during the period 1 March 1958 through 31 December 1958.
(b) The Government is granted the right and option of renewing or
extending this contract for any additional periods of time-aot-,, o
:30JUne-I9594 This option to extend will be exercised by
issuance of an Amendment to this contract.
PART VI - ESTABLISHMENT OF A PRICING FORMULA
The parties hereto shall negotiate and establish a fixed pricing method
for certain periods of time. The agreed upon formulg(ae) shall be set forth
in an amendment hereto.
PART VII - FUNDS ALLOTTED
For the purposes of this contract there has been a total
allotted for the performance of work as be called for by the Government
from time to time. Of this amount has been allotted for
If, at any time, the Contractor
o e op n on a t e cost of such work for exceed the amounts set forth above, it shall notg,111.111!nficer
,
in accordance with the provisions of paragraph (c) of PART I. The
Contractor shall segregate the Priced Exhibits by equire-
ments.
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INDEX TO GENERAL PROVISIONS
Article Noo
Page No.
1.
2.
3.
4.
DEFINITIONS
CHANGES .
EXTRAS I"
VARIATION IN QUANTITY
1
1
2
2
5.
INSPECTION , ,,,e,
2
6.
RESPONSIBILITY FOR $UPPL1ES
3
7.
ASSIGNMENT OF CLAI.
3
8.
ADDITIONAL BOND SEPURITY
4
9.
FEDERAL STATE & LOCAL TAXES
4
10.
DISPUTES ...
6
11.
BUY AMERICAN ACT ,
7
12.
EIGHT HOUR LAW OF 1512
7
13.
WALSH-HEALEY PUBLIC CONTRACTS ACT
8
14.
NONDISCRIMINATION 1$ EMPLOYMENT
8
19.
OFFICIALS NOT TO BENEFIT
9
16.
COVENANT AGAINST CONTINGENT FEES
9
17.
AIRCRAFT IN THE up
9
18.
MILITARY SECURITY REQUIREMENTS
11
19.
UTILIZATION OF SMALL BUSINESS CONCERNS
13
20.
rXAMINATION OF RECORDS
13
21.
GRATUITIES
13
22.
CONVICT LABOR
14
23.
NOTICE & ASSISTANCE REGARDING PATENT
INFRINGEMENT
14
2A..
REPORTING OF ROYALTIES
14
25.
FILING OF PATENT APPLICATIONS
16
21.
AUTHORIZATION & CONSENT
17
27.
PATENT RIGHTS
17
28.
COPYRIGHT
22
29.
REPRODUCTION AND USE OF TECHNICAL DATA
22
30.
GOVERNMENT FURNISHED PROPERTY
23
31.
TERMINATION FOR CONVENIENCE OF THE
GOVERNMENT ,-
27
32.
PAYMENTS
31
33.
DEFAULT
32
34.
SUBCONTRACTS FOR WORK OR SERVICES
33
35.
ALTERATIONS IN CONTRACT
34
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SECRET
GENERAL PROVISIONS
1. DEFINITIONS
As used throughout this contract, the following terms shall
have the meanings set forth below:
(a) The term "Secretary" means the Secretary, the Under Secre-
tary, or any Assistant Secretary of the Department and the head or
any assistant head of the executive agency; and the term "his duly
authorized representative" means any person or persons or board (other
than the Contracting Officer) authorized to act for the Secretary;and
the term "Department" means that component of the Government having
cognizance of this contract and represented by the Contracting Officer
executing this contract.
(b) The term "Contracting Officer" means the person executing
this contract on behalf of the Government, and any other officer or
civilian employee who is a properly designated Contracting Officer
and the term includes, except as otherwise provided in this contract,
the authorized representative of a Contracting Officer acting within
the limits of his authority.
(c) Except as otherwise provided in this contract, the term
"subcontracts" includes purchase orders under this contract.
(d) The term "contract work" means all work to be performed
under this contract including any studies covering fundamental, theo-
retical, or experimental investigations; any extension of the inves-
tigative findings and theories of a scientific and technical nature
into practical application; any tangible terms, hereinafter referred
to as supplies, if called for herein, furnished to the Government;
and any reports, data, computations, plans, drawings, and specifica-
tions with respect to the foregoing.
2. CHANGES
The Contracting Officer may at any time, by a written order, and
without notice to the sureties, make changes, within the general scope
of this contract, in any one or more of the following: (i) drawings,
designs, or specifications, where the supplies to be furnished are to
be specially manufactured for the Government in accordance therewith;
(ii) method of shipment or packing; and (iii) place of delivery. If
any such change causes an increase or decrease in the cost of, or the
time required for, performance of this contract, an equitable adjust-
ment shall be made in the contract price or delivery schedule, or
both, and the contract shall be modified in writing accordingly. Any
claim by the Contractor for adjustment under this clause must be as-
serted within 60 days from the date of receipt by the Contractor of
the notification of change; PROVIDED, however, that the Contracting
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Officer, if he decides that the facts justify .such action, may receive
aud act upon any such claim asserted at any time prior to final pay-
ment under this contract. Failure to agree to any adjustment shall
be a dispute concerning a question of fact within the meaning of the
clause of this contract entitled "Disputes." However, nothing in
this clause shall excuse the Contractor from proceeding with the con-
tract as changed.
3. EX
Except as otherwise provided in this payment for
extras shall be made unless.sudh eXtras and the price therefor have
lilin'allthnri7(=q9 in /Tritiza by the Contracting Officer.
4. VAPIATION IN QUANTITY
No variation in the quantity of any item called for by this con-
tract will be accepted unless such variation has been caused by con-
ditions of loading, shipping, or packing, or allowances in manufac-
turing processes, and then only to the extent, if any, specified
elsewhere in this contract.
5. INSPECTION
(a) All supplies (which term throughout this clause includes
without limitation raw materials, components, intermediate assemblies,
and end products) shall be subject to inspection and test by the Gov-
ernment, to the extent practicable at all times and places including
the Period of manufacture, and in any event prior to final acceptance.
(b) In case any supplies or lots of supplies are defective in
material or workmanship or otherwise not in conformity with the re-
quirements of this contract, the Government shall have the right
either to reject them (with or without instructions as to their dis-
position) or to require their correction. Supplies or lots of sup-
plies which have been rejected or required to be corrected shall be
removed or corrected in place, as requested by the Contracting Officer,
by and at the expense of the Contractor promptly after notice, and
shall not again be tendered for acceptance unless the former tender and
either the rejection or requirement of correction is disclosed. If
the Contractor fails promptly to remove such supplies or lots of sup-
plies, when requested by the Contracting Officer, and to proceed
promptly with the replacement or correction thereof, the Government
either (i) may by contract or otherwise replace or correct such sup-
plies and charge to the Contractor the cost occasioned the Government
thereby, or (ii) may terminate this contract for default as provided
in the clause of this contract entitled "Default". Unless the Con-
tractor elects to correct or replace the supplies which the Government
has a right to reject and is able to make such correction or replace-
ment within the required delivery schedule, the Contracting Officer
may require the delivery of such supplies at a reduction in price
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which is equitable under the circumstances. Failure to agree to such
reduction of price shall be a dispute concerning a question of fact
within the meaning of the clause of this contract entitled "Disputes".
(c) If any inspection or test is made by the Government on the
premises of the Contractor or a subcontractor, the Contractor without
additional charge shall provide all reasonable facilities and assist-
ance for the safety and. convenience of the Government inspectors in
the performance of their duties. If Government inspection or test is
made at a point other than the premises of the Contractor or a sub-
contractor, it shall be at the expense of the Government, PROVIDED,
that in case of rejection the Government shall not be liable for any
reduction in value of samples used in connection with such inspection
or test. All inspections and tests by the Government sha31 be per-
formed in such a manner as not to unduly delay the work. The Govern-
ment reserves the right to charge to the Contractor any additional
cost of Government inspection and test when supplies are not ready at
the time such inspection and test is requested by the Contractor. Final
acceptance or rejection of the supplies shall be made as promptly as
practicable after delivery, except as otherwise provided in this con-
tract; but failure to inspect and accept or reject supplies shall
neither relieve the Contractor from responsibility for such supplies
as are not in accordance with the contract requirements nor impose
liability on the Government therefor.
(d) The inspection and test by the Government of any supplies
or lots thereof does not relieve the Contractor from any responsibility
regarding defects or other failures to meet the contract requirements
which may be discovered prior to final acceptance. Except as other-
wise provided in this contract, final acceptance shall be conclusive
except as regards latent defects, fraud, or such gross mistakes as
amount to fraud.
(e) The Contractor shall provide and maintain an inspection
system acceptable to the Government covering the supplies hereunder.
Records of all inspection-work by the Contractor shall be kept com-
plete and available to the Government during -the, performance of this
contract and for such longer period as may be specified elsewhere in
this contract.
6. RESPONSIBILITY FOR SUPPLIES
Except as otherwise provided in this contract, (i) the Contractor
shall be responsible for the supplies covered by this contract until
they are delivered at the designated delivery point, regardless of
the point of inspection; and (ii) the Contractor shall bear all
risks as to rejected work after notice of rejection.
7. ASSIGNMENT OF CLAIMS
(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
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Gar
contract provides for payments aggregating $1,000 or more, claims
for moneys due or to becom.e, due to the Contractor from the Govern-
ment under this contract may be assigned to a bank, trust company,
or other financing institution, including any Federal lending agency,
and may thereafter be further assigned and reassigned to any such
institution. Any such assignment or reassignment shall cover all
amounts payable under this contract and not already paid, and shall
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. Notwithbtanding any
provision of this contract, payment to an assignee of any moneys 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-cff.
(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," "CONFIDENTIAL,"
be furnished to any assignee of any claim arising under this contract
or to any other person not entitled to receive the same; PROVIDED,
that a copy of any part or all of this contract so marked may be fur-
nished, or any information contained therein may be disclosed, to such
assignee upon the prior written authorization of the Contracting Officer
(c) The Contractor shall obtain the written authorization of
the Contracting Officer prior to the assignment of any rights under
this contract.
8. ADDITIONAL BOND SECURITY
If any surety upon any bond furnished in connection with this
contract becomes unacceptable to the Government, or if any such
surety fails to furnish reports as to his financial condition from
time to time as requested by the Government, the Contractor shall
promptly furnish such additional security as may be required from
time to time to protect the interests of the Government and of per-
sons -supplying labor or materials in the prosecution of the work
contemplated by this contract.
9. -FEDERAL, STATE AND LOCAL TAXES
(a) DEFINITIONS. As used throughout this clause, the following
terms shall have the meanings set forth below:
(i) The term "direct tax" means any tax or duty
directly applicable to the completed supplies or
services (as distinguished from taxes directly ap-
plicable to materials and components used in the
manufacture or furnishing of the completed supplies
or services) covered by this contract or any other
tax or duty from which the Contractor or this trans-
action is exempt. It includes any tax or duty directly
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applicable to the importation, production, processing,
manufacture, construction, sale, or use of such sup-
plies or services; it als includes any tax levied on,
with respect to, or measured by sales, receipts from
sales, or use of the supplies or services covered by
this contract. The term does not include transportation
taxes, unemployment compensation taxes, social security
taxes, income taxes, excess profits taxes, capital stock
taxes, property taxes, and such other taxes as are not
within the definition of the term "direct tax" as set
forth above in this paragraph.
(ii) The term "contract date" means the effective
date of this contract if it is a negotiated contract
or the date set for the opening of bids if it is a
contract entered into as a result of formal advertising.
For the purpose of any additional procurement of supplies
or services called for by any agreement supplemental
hereto, the term "contract date" shall refer to the date
of such supplemental agreement.
(b) FEDERAL TAXES. Except as maybe otherwise provided in this
contract, the contract price includes all applicable Federal taxes in
effect on the contract date.
(c) STATE OR LOCAL TAXES. Except as may be otherwise provided
in this contract, the contract price does not include any State or
local direct tax in effect on the contract date.
(d) EVIDENCE OF EXEMPTION: The Government agrees, upon request
of the Contractor, unless there exists no legal basis to sustain an
exemption, to furnish a Tax Exemption Certificate or other similar
evidence of exemption with respect to any direct tax not included in
the contract price pursuant to this clause; and the Contractor agrees,
in the event of the refusal of the applicable taxing authority to ac-
cept such evidence of exemption, (i) promptly to notify the Contracting
Officer of such refusal, (ii) to cause the tax in question to be paid
in such manner as to preserve all rights to refund thereof, and (iii)
if so directed by the Contracting Officer, to take all necessary action,
in cooperation with and for the benefit of the Government, to secure
a refund of such tax (in which event the Government agrees to reim-
burse the Contractor for any and all reasonable expenses incurred at
its direction).
(e) PRICE ADJUSTMENT. If, after the contract date, (i) the
Federal Government or any State or local government either imposes
or increases (or removes an exemption with respect to) any direct
tax, or any tax directly applicable to the materials or components
used in the manufacture or furnishing of the completed supplies or
services covered by this contract, or (ii) the Federal Government or
any State or local government refuses to accept the evidence of exemp-
tion, furnished under paragraph (d) hereof, with respect to any direct
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UR?
tax excluded from the contract price, or (iii) the Federal Government
does not furnish a tax exemption certificate or other similar evidence
of exemption with respect to any direct tax excluded from the contract
price, and if under either (i), (ii), or (iii) the Contractor is
obliged to and does pay or bear the burden of any such tax (and does
not secure a refund thereof), the contract price shall be correspondingly
increased, and if interest and penalties are incurred by reason of
delay in payment of such tax on the instruction of the Contracting
Officer, and such interest and penalties are legally *posed, the con-
tract price shall be correspondingly increased, If, after the contract
date, the Contractor is relieved in whole or in part from the payment
or the burden of any direct tax included in the contract price, or any
tax directly applicable to the materials or components used in the
manufacture or furnishing of the completed supplies or services covered
by this contract, the Contractor agrees promptly to notify the Contrac-
ting Officer of such relief, and the contract price shall be corres-
pondingly decreased or the amount of such relief paid over to the
Government. Invoices or vouchers covering any increase or decrease
in cc,ntract price pursuant to the provisions of this paragraph shall
state the amount thereof, as a separate added or deducted item, and
shall identify the particular tax imposed, increased, eliminated, or
decreased
(f) REFUND OR DRAWBACK. If any tax or duty has been included
in the contract price tr the price as adjusted under paragraph (e) of
this clause, and if the Contractor is entitled to a refund or drawback
by reason of the export or re-export of supplies covered by this con-
tract, or of materials or components used in the manufacture or fur-
nishingof the completed supplies or services covered by this contract,
the Contractor agrees that he will promptly notify the Contracting
Officer thereof and that the amount of any such refund or drawback
obtained will be paid over to the Government or credited against amounts
due from the Government under this contract PROVIDED, however, that
the Contractor shall not be required to apply for such refund or draw-
bac'k unless so requested by the Contracting Offieer,
10 DISPUTES
Except as otherwise provided in this contract, any dispute em.-
cerning a question of fact arising under this contract which is not
disposed of by agreement shall be decided by the Contracting Officer,
who shall reduce his decision to writitg and Mail or otherwise furnish
a copy thereof to the Contractor. Within thirty (30) days from the
date of receipt of such copy, the Contractor May appeal by mailing or
otherwise furnishing to the Contracting Officer a written appeal ad-
dressed to the Secretary, and the decision of the Secretary or his
duly authorized representative for the hearing of such appeals shall,
unless determined by a court of competent jurisdiction to have been
fraudulent or capricious or arbitrary or so grossly erroneous as neces-
sarily to imply bad faith, or not supported by substantial evidence, be
final and conclusive: PROVIDED, That, if no such appeal is taken, the
decision of the Contracting Officer shall be final and conclusive. In
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connection with any appeal proceeding under this clause, the Contractor
shall be afforded an opportunity to be heari 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.
U. BUY AMERICAN ACT
The Contractor agrees that there will be delivered under this con-
tract only such unmanufactured article*, materials and supplies (which
term "articles, materials and supplies" is hereinafter referred to in
this clause as "supplies") as have been mined or produced in the United
States, and only such manufactured supplies as have been manufactured
in the United States substantially all from supplies mined, produced
or manufactured, as the case may be, in the United States. Pursuant
to the Buy American Act (41 U. S. Cede 10a-d), the fregoing provision
shall not apply (i) with respect to supplies excepted by the Secretary
from the application of that Act, (ii) with respect to supplies for use
outside the United States, or (iii) with respect to the supplies to be
delivered under this contract which are of a class or kind determined by
the Secretary or his duly authorized representative not to be mined, pro-
duced, or manufactured, as the ease may be, in the United States in suf-
ficient and reasonably available commercial quantities and of a satis-
factoey quality, or (iv) with respect to such supplies from which the
supplies to be delivered under this contract are manufactured, as are
Gf a class or kind, determined by the Secretary or his duly authorized
representative not to be mined, produced, or manufactured, as the case
may be, in the United States in sufficient and reasnably available com-
mercial quantities and of a satisfactory quality: PROVIDED, That this
exception (iv) shall not permit delivery of supplies manufactured out-
side the United States if such supplies are manufactured in the United
States in sufficient and reasonably available commercial quantities and
of a satisfactory quality.
12. EIGHT-HCUR LAW OF 1912
? This contract, to the extent that it is of a character specified
in the Eight-Hour Law of 1912 as amended (4o U. S. Code 324-326) and
is not covered by the Walsh-Healey Public Contracts Act (41 U. S. Code
35-45) is subject to the following provisions and exceptions of said
Eight-Hour Law of 1912 as amended, and to all other provisions and ex-
ceptions of said Law.
No laborer or mechanic doing any part of the work contempla-
ted by this contract, in the employ of the Contractor or any sub-
contractor contracting for any part of the said work shall be re-
quired or permitted to work more than eight hours in any one cal-
endar day upon such work, except upg:10condition that cGmpen-
sation is paid to such laborer or mecE6mic in accordance with the
provisions ce this clause. The wages of every such laborer and
mechanic employed by the Contractor or any subcontractor engaged
in the performance of this contract shall be computed on a basic day rate of
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eight hours per day; and work in excess of eight hours per day is
permitted only upon the condition that every such laborer and mechanic
shall be compensated for all hours worked in excess of eight hours
per day at not less than one and one-half times the basic rate of
pay. For each violation of the requirements of this clause a penalty
of fiae dollars shall be imposed upon the Contractor for each such
laborer or mechanic for every calendar day in which such employee
is required or permitted to labor more than eight hours upon said
work without receiving compensation computed in accordance with this
clause; and all penalties thus imposed shall be withheld for the use
and benefit of the Government.
13. WALSH-HEALEY PUBLIC CONTRACTS ACT
If this contract is for the manufacture or furnishing of mater-
ials, supplies, articles or equipment in an amount which exceeds or
may exceed $10,000 and is otherwise subject to the Walsh-Healey Public
Contracts Act as amended (41 U. S. Code 35-45), there are hereby incor-
porated by reference all representations and stipulations required by
said Act and regulations issued thereunder by the Secretary of Labor,
such representations and stipulations being subject to all applicable
rulings and interpretations of the Secretary of Labor which are now
or r11::! hereafter be in effect, except that the Contractor shall
be re4Lired to include this clause in subcontracts issued hereunder
when the inclusion of this clause in a subcontract would-jeopardiS2
2,xe conflict with theseeurit
- eonsiderations established in conn
tion with this contrZA. 2S:
14. NONLISCHEINATION IN EMPLOYMENT
- (a) In connection with tiliaepo..r...f.E*rtvane-e of work under thisecon-
tract, the Contract*)r-agrGzas-not to discriminate against any employee
or applicant for employment because of race, religion, color, or
national origin. The aforesaid provision shall include, but nct be
limited to, the following: employment, upgrading, demotion, or
transfer; recruitment or recruitment advertising; layoff or termina-
tion; rates of pay or other forms of compensation; and selection
for training, including apprenticeship. The Contractor agrees to
post hereafter in conspicuous places, available for employees and.
applicants for employment, notices to be provided by the Contracting
Officer setting forth the provisions of the nondiscrimination clause.
o(b) The Contractor further agrees to insert the foregoing pro-
----vision in all subcontracts issued hereunder, except subcontracts for
standard commercial supplies or raw materials, and except as insertion
,of the foregeiqg provision in a,subcontract wO41d jeopardize or cere
filet with the security e'enoidera:tions established in connection with
. _
e ,e_this contract.
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15. OFFICIALS NOT TO BENEFIT
SECRET
No member of or delegate to Congress, or resident commissioner,
shall be admitted to any share or part of this contract, or to any
benefit that may arise therefrom; but this provision shall not be con-
strued to extend to this contract if made with a corporation for its
general benefit.
16. COVENANT AGAINST CONTINGENT bEES
The Contractor warrants that no person or selling agency has been
employed or retained to solicit or secure this contract upon an agreement
or understanding for a commission, percentage, brokerage, or contingent
fee, excepting bona fide employees or bona fide established commercial
or selling agencies maintained by the contractor for the purpose of
securing business. For breach or violation of this warranty the Govern-
ment shall have the right to annul this contract without liability or in
its discretion to deduct from the contract price or consideration the
full amount of such commission, percentage, brokerage, or contingent fee.
If this contract is a negotiated fixed-price type of contract for
production or modification of aircraft (or missiles having the general
characteristics of aircraft) the clause set forth below shall apply:
(a) Subject to the definitions and limitations prescr ed in
this clause, the Government assumes the risk of damage to or oss or
destruction of aircraft (or missiTes having the general c.; acteristics
of aircraft) in the open; PROVIDED, that such damage, oss, or destruc-
tion is caused by any of the following perils;
(i) Fire; lightning, windstorm, cycl e tornado, hail; explosion;
riot, riot attending a strike, civil commo on, vandalism and malicious
mischief; sabotage; aircraft or objects alling therefrom, vehicles running
v4,0 on land or tracks, excluding vehicle owned or operated by the Contractor
or any agent or employee of the C.- ractor; smoke; earthquake or volcanic
eruption; flood, meaning there.. risineof a body of water, hostile or
warlike action, including a on in hindering, combating, or defending
against an actual, impen g or expected attack by any government or
sovereign power (de j or de facto), or by any authority using military,
naval, or air fore , or by any agent of any such go4nment, power, auth-
ority, or forces or
Other peril of a type no ?4*bove, if such other peril
is cust.! rily covered by insurance (or a'reberve for self-insurance)
in a _ordance with the normal practice of the Contractor, or a prevailing
p Ij ctice in the industry in which the Contractor' i'S engaged with respect
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(i) The term "Aircraft" means aircraft to be furnished to
the Government under this contract, including complete aircraft; and
aircraft in the course of manufacture or modification, including en-
gines, instruments, subassemblies, parts, and equipment installed
therein, or in process of installation, and all uninstalled propert
withdrawn from stores for installation in aircraft in the open or
temporarily removed from such aircraft, provided such uninstalle pro-
perty is in the open.
(ii) The term "in the open" means located wholly o side of
buildings or roofed structures.
(c) The Government's obligation under this cl se shall extend
only to aircraft in the open under conditions approve y the Contrac-
ting Officer, and shall not extend to the following:
(i) loss, destruction, or damage result g from failure of
the Contractor, due to willful misconduct or lac of good faith of any
of the Contractor's managerial personnel, to in tam n and administer a
program for the maintenance, repair, protecti , and preservation of
aircraft in the open, in accordance with so d industrial practice. The
term "Contractor's managerial personnel" ans the Contractor's directors,
officers, and any of its managers, super tendents, or other equivalent
representatives who have supervision or direction of all or substantially
all of the Contractor's business, or a 1 or substantially all of the
Contractor's operation at any one plant or separate locatin at Tivhich
this contract is performed, or a separate and complete major industrial
operation in connection with the performance of this contract;
(ii) loss, destructic or damage to aircraft in the possession
or control of any subcontract r, except to the extent that the subcon-
tract, with the approval of he Contracting Officer and. consistent with
this clause, may otherwise rovide.
(d) The Contr tor warrants that the contract price does not
and will not include , charge or rVprve for insurance (including
self-insurance funds r reserves) coving damage to or loss or destruc-
tion of aircraft in he open caused by any of the perils sot forth in
paragraph (4). her f.
(e) I the event of damage to
craft in the n _n, the Contractor shall
protect such ircraft from further 41
aged aircraf , put all aircraft in t
to the Con acting Officer a statement
or loss or truction of air-
take all reasonable steps to
vte damaged and undam-
sible order, and furnish
(i) the lost, destroyed, or damag,4i1:aircraft;
(ii) the time and origin of the loss,-destructien, c,r damage;
(iii) all known interests in commingled property of which
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n such commingled property.
rt
The Contractor shall be reimbursed for exper.ditures made by i in
performing its obligations under this paragraph, to the extent a roved
by the Contracting Officer and-this contract shall be modified n writ-
ing accordingly.
(f) If prior to acceptance by and delivery to?th Government
any aircraft in the open is lost, destroyed, or damaged de to any of
the perils set forth in paragraph (a) hereof, the Gove ent may, unless
otherwise provided in this contract, elect to require at such aircraft
be replaced by the Contractor or restored by the Con actor to the condi-
tion in which it was immediately prior to such dama e. If the Government
requires the aircraft to be replaced or restored, An equitable adjust-
ment shall be made in the amount due under this ? ntract and in the time
required for its performance, and this e-.,ntrac shall be modified in
writing accordingly. Alternatively, the Gove, sent may elect to termi-
nate this contract as to any such lost, des oyed, or damaged_aircraft,
and in that event the rihts of the partie shall be as provided in the
clause entitled Termination for Convenie e of the Government.
(g) In the event the Contrac or is at any time reimbursed or
compensated by any third person for Ay damage to or loss or destruction
of any aircraft in the open caused y any peril set forth in paragraph
(a) hereof for which the Contract has been compensated by the Govern-
ment, it shall equitably reimbur e the Government. The Contractor shall
do nothing to prejudice the Gov-rnment's rights to recover against
third parties for any such lo destruction or damage and, upon the
request of the Contracting 0 ricer, shall at the Government ts expense,
furnish to the Government 1 reasonable assistance and cooperation
(including the prosecutio of suit and the execution of instruments of
assignment or subrogati in favor of the Government) in obtaining re-
covery.
(h) Any 1,,ss or destruction of, or damage to, property fur-
nished by the Gove nment will be governed by the clause of this con-
tract entitled "C vernment-Furnished Property," to the extent that
such clause is y its terms, applicable.
(i) Any loss, or destruction of, or damage to, aircraft oc-
curring in eionnection with operations of said aircraft will be governed
by the clause of this contract entitled "Flight Risk," to the extent
?
? ?
18. MILITARY SECURITY REQUIREMENTS
(a) The provisions of this clause shall apply to the extent that
this contract involves access to security information classified "Con-
fidential" including "Confidential - Modified Handling Authorized" or
higher.
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(b) The Government shall notify the Contractor of the security
classification of this contract and the elements thereof, and of any
subsequent revisions in such security classification, by the use of a
Security Requirements Check List (DD Form 254 and 254-1).
(c) To the extent the Government has indicated as of the date
of this contract, or thereafter indicates, security classification under
this contract as provided in paragraph (b) above, the Contractor shall
safeguard all classified elements of this contract and shall provide and
maintain a system of security controls within its own organization in
accordance with the requirements of:
(i) the Security Agreement (DD Form 441), including the Department
of Defense Industrial Security Manual for Safeguarding Classified Infor-
mation as in effect on date of this contract, and any modification to
the Security Agreement for the purpose of adapting the Manual to the
Contractor's business; and
(ii) any amendments to said Manual made after the date of this
Nose contract, notice of which has been furnished to the Contractor by the
Security Office of the Military Department having security cognizance
over the facility.
Y
(d) Representatives of the Military Department having security
cognizance over the facility and representatives of the contracting
Military Department shall have the right to inspect at reasonable inter-
vals the procedures, methods, and facilities utilized by the Contractor
in complying with the security requirements under this contract. Should
the Government, through its authorized representative, determine that
the Contractor has not complied with such requirements, the Government
shall inform the Contractor in writing of the proper actions to be
taken in order to effect compliance with such requirements.
(e) If, subsequent to the date of this contract, the security
classifications or requirements under this contract are changed by
the Government as provided in this clause and the security costs under
this contract are thereby increased or decreased, the contract price
shall be subject to an equitable adjustment by reason of such increased
or decreased costs. Any equitable adjustment shall be accomplished in
the same manner as if such changes were directed under the "Changes"
clause in this contract.
(f) The Contractor agrees to insert, in all subcontracts hereunder
which involve access to classified security information, provisions which
shall conform substantially to the language of this clause, including
this paragraph (f) but excluding the last sentence of paragraph (e) of
this clause.
(g) The Contractor also agrees that it shall determine that any
subcontractor proposed by it for the furnishing of supplies and ser-
vices which will involve access to classified information in the Con-
tractor's custody has been granted an appropriate facility security
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clearance, which is still in effect, prior to being accorded access
to such classified security information.
19. UTILIZATION OF SMALL BUSINESS CONCERNS
(a) It is the policy f the Government as declared by the Con-
gress to bring about the greatest utilization of small business con-
cerns which is consistent with efficient production.
(b) The Contractor agrees to accomplish the maximum rmount of
subcontracting to small business concerns that the Contractor finds
to be consistent with the efficient performance of this contract.
20. EXAMINATION OF RECORDS
The following clause will be applicable in all negotiated fixed-
price supply contracts and purchase eu"ders in excess of 1.,000.
EXAMINATION OF RECORDS
(a) The Contractor agrees that the Contracting Officer or any
of his duly authorized representatives shall, until the expiration
of three years after final payment under this contract, have access
to and the right to examine any directly pertinent books, documents,
papers and records of the Contractor involving transactions related
to this contract.
(b) The Contractor further agrees to include in all his sub-
contracts hereunder a provision to the effect that the subcontracter
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 subcon-
tract. The term "subcontract" as used in this clause excludes (i)
Purchase orders not exceeding $1,000 and (ii) subcontracts or pur-
chase orders for public utility services at rates established for
uniform applicability to the general public.
21. GRATUITIES
(a) The Government may, by written notice to the Contractor,
terminate the right of the Contractor to proceed under this contract
if it is found, after notice and hearing, by the Secretary or his
duly authorized representative, that gratuities (in the. form of
entertainment, gifts, or otherwise) were offered or given by the
Contractor, or any agent or representative of the Contractor, to any
officer or employee of the Government with a view toward securing a
contract or securing favorable treatment with respect to the awarding
or amending, or the making of any determinations with respect to the
performance of such contract PROVIDED, That the existence of the
facts upon which the Secretary or his duly authorized representative
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makes such findings shall be in issue and may be reviewed in any com-
petent court.
(b) In the event this contract is terminated as provided in
paragraph (a) hereof, the Government shall be entitled (i) to pursue
the same remedies against the Contractor as it could pursue in the event
of a breach of the contract by the Contractor, and (ii) RS a penalty in
addition to any other damages to which it may be entitled by law, to
exemplary damages in an amount (as determined by the Secretary or his
duly aUthorized representative) which shall be not less than three nor
more than ten times the costs incurred by the Contractor in providing
any such gratuities to any such officer or employee.
(c) The rights and remedies of the Government provided in this
clause shall not be exclusive and are in addition to any other rights
and remedies provided by law or under this contract,
22. CONVICT LABOR
In connection with the performance of work under this contract,
the Contractor agrees not to employ any person undergoing sentence of
imprisonment at hard labor.
23. NOTICE AND ASSISTANCE REGARDING PATENT INFRINGEMENT
The provisions of this clause shall be applicable only if the
amount of this contract is in excess of $5,000.
(a) The Contractor shall report to the Contracting Officer,
promptly and in reasonable written detail, each notice or claim of
patent infringement based on the performance of this contract of which
the Contractor has knowledge.
(b) In the event of litigation against the Government on account
of any claim of patent infringement arising out of the performance of
this contract or 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 litigation. Such evidence and
informatiPn shall be furnished at the expense of the Government except
in those cases in which the Contractor has agreed to indemnify the
Government against the claim being asserted.
24. REPORTING OF ROYALTIES
The provisions of this clause shall be applicable only if the
amount of the contract is in excess of 310,000.
(a) The Contractor shall report in writing (in quadruplicate) to
the Contracting Officer as soon as practicable after execution of this
contract whether or not any royalties in excess of 250 have been paid
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or are to be paid by. the Contractor dlrectly to any person or firm i:%?
connection with the perfarco of .th4.a cootact If royalties in ex-
cess of 250 have beau paie, are to be pa Ld to any person cr firm, the
repert shall include th.J follJwin7 items of information with rapoot
such. revalt!.es (inc1udg. the initial. ,250):
(1) The name and are: each licensor to whom royalties th.
excess of fe1,253 hive beer. paid or are 'r-o be paid,.
(2) The patent n,..mibecs, patent application serial. numbers (with
fiitrii dates), or other identification of the basis for Such.. r?oyalties,
(3) '211e manner of comoun the royalties consiting. of (i)
a brief identification of each royalty-bearing unit or process, ii)'(
the total. =mot of royalties, and (iii) the percentage rate or dollars
ad cents amount of royalties on each such unit or process ucvaric
that if the royaltieS cannot be computedin terms .of units cr dollars
and cents value, then other data shoviug the manner in which. the Con-
tractor computes the royalties.
(b) In lieu of furnishing a retort under. paragraph (a), thc Con-
_ tractor nay furnish a single, consolidated re?pert f.f.r each accounting
period of the Corit Cactor during which the Contractor has contracts with
the Government, provided the Contractor has req4c:sted and obtained
p.rico written. ayproval of the ContractAng Officer. Such conscadated
poria14. be furnished, whoa the furnishing thereof has been approved,
in tho .:...in*er of copies as approved, as soon as practicable after the
close of the accountiiii. period covered by tho ropert. Such consclidated
report sala, be made .in accordance with ContIactor's established accomt-
ids aeice, and shall include, for the accounting period, the total
of royalties accruing to each licensr at a rate in excess of
-prr annum on tho Contractor's over-all business, together with
the name and address of each such licensor, (ii) the patent nnmbors,
patent r4iplication serial nullibars -(with filing datos), c other identi-
fication of the basis for such royalties, (Iii) a brief description of
the So.bject matter of the license under whif:th toyaltieS are charged,
(iv) tha percentage -rate or unit amount, or if tho royalties do not
accrue by rte cr unit amount, such other data showing the - Manher by.
which tne, royalties accrue tf: licensor, and. (v) on estimate cr approxi-
matdon (without detailed accounting) of the Izortion cf such royalties
that may be attributable to Go-lerament zontracts. The Contractor shall,
if requested by the Government, furnish at Government expense a more
detai:ted ailocatu o such royalty payments attributable to Goyernment
contractS.
(c) To the event that the Contractor requests written approval to
furnish consolidated reporte under paragraph (b) above, the Contractinl
Officer shall promTtly considei' the request an furnish to the Contrac-
tor a letter stating whetbr'or r.lot the request. is approved and, not-
withstandinc any such approval, the Contractinficier shall have the
right to question any such subsequently furnished roport as to accuracy.
or comoleteness of data and to aslr. for additional Infea-matioh. The ,
Contractor shall furnish a copy of such letter of approval to the Con-
tracting Cfficer administering the, cer.tract,
FP (Oct. 8, 1956)
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(d) After payment of eighty percent (80%) of the amount of this
contract, as from time to time amended, further payment shall be with-
held until a reserve of either (i) .ten percent (10%) of such amount or
(ii) $5,000, which ever is less, shall have been aet aside, such reserve
or the balance thereof to be retained until the Contractor shall have
furnished to the Contracting Officer. the report called for by paragraph
(a) hereof or the copy of the letter approving the Contractor's request
to furnish the report under paragraph (b); PROVIDED that no amount shall
continue to be withheld from payment for the causes specified in this
Paragraph (d) if the Contracting Officer shall find that the Contractor
has not been furnished a letter as required by paragraph (c) within a
reasonable time after making written request to submit a single, con-
solidated report under the provisions of paragraph (b) of this clause;
and PROVIDED FURTHER that the Contracting Officer may, in his discre-
tion, order payment to be withheld in the amount and manner above pro-
vided if the report called for by paragraph (a) is unsatisfactory or (b)
isdaonbut,,has'not,heen reCeived, or if received, is found to be unsat-
isfactory. No amount shall be withheld under this paragraph when the
minimum amount specified by this paragraph is being withheld under other
provisions of this contract The withholding of any amount or subsequent
payment thereof to the Contractor shall not be construed as a waiver of
any right accruing to the Government under this contract.
25. FILING OF PATENT APPLICATIONS
(a) Before filing or causing to be filed a patent application dis-
closing any subject matter of this contract, which subject matter is
classified "Secret" or higher, the Contractor shall, citing the thirty
(30) day provision below, transmit the proposed application to the Con-
tracting Officer for determination whether, for reasons of national
security, such application should be placed under an order of secrecy
or sealed in accordance with the provisions of 35 U. S. Code 181-188
or the issuance of a patent should be otherwise delayed under pertinent
statutes or regulations and the Contractor shall observe any instruc-
tions of the Contracting Officer with respect to the manner of delivery
of the patent application to the U. S. Patent Office for filing, but
the Contractor shall not be denied the right to file such patent appli-
cation. If the Contracting Officer shall not have given any such in-
structions within thirty (30) days from the date of mailing or other
transmittal of the proposed application, the Contractor may file the
application.
(b) The Contractor shall furnish to the Contracting Officer, at
the time of or prior to the time when the Contractor files or causes
to be filed a patent application disclosing any subject matter of this
contract, which subject matter is classified "Confidential," a copy of
such application for determination whether, for reasons of national
security, such application should be placed under an order of secrecy
or the issuance of a patent should be otherwise delayed under pertinent
statutes or regulations.
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(n) In filing any patent apialLeati?an cin within the scope CI'
this clause, the Contraetor shnal observe all atiplicable security regu-
lations covering the transmission of classifled Subject matter
26. AUTHORIZATION AND COMFIT
The following clause shall be mpplicable in all tontrants for sup-
plies (including construction work), exeopt nu.Tchase orders of $5,000
or less:
The Government hereby gives its authorization and consent (without
prejudice to its rights of indemnificattona if such rights are Provided
for in this contract) for all. USQ and manufacture, in the perfortanne of
this contract or any part hereof or any amendAent hereto or any snbenn-
,
tract hereunder (including any lower-tier subcontract)y
of any patented
invention (i) embodied in the strnatnre or composition of any article
the delivery of which is accepted by the Government under this ccntraet,
or (ii) utilized in the machinery, tools, Or methodS the use of which
necessarily results from compliance by the Contractor or the using sub-
contractor with (a) si3ecifications or written provisions new c,r hereafter
forming a part of this contract, or (b) specific written instruetinns
given by the Contracting Officer directing the manner Of performance.
Me Contractor's entire liability to the Government for patent ?infringe-
ment shnll 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 ennsent
hexeinabnve granted.
27 PAT RIGHTS
(a) An used in this clause, the following terms shall have the
meanings set forth beloWn
(i) The term "S-uhjeet Inventii.,e means any invention, improve-
mnnt or discovery (whether or not patentable) conceived cr first actually
reduced to practice either (A) in the performance of the experimental,
developmental, or research work called for or required under this con,
traet, or (B) in the. performance of any experimental, developmental, or
research work relating to the snNact matter of this contract which was
done upon an understanding, in writing that a contract wnuld be awarded;
PROVIDED that the term "SUajent Invention" shall not include any inven-
tion vithieh is specifically ifinntlfied and listed, in the Schedule for the.
purpose of exnluding it from the license granted by this ause.
(ii) The term "Tnennical Pcrsonnel nuans any person employe-
by- or working under contract with the Contractor (other than n. sub con-
tractor whose responSibilitles with respect to rights accruing to the
Government an inventions arising under subcontracts are sot forth, in
paragraphs (g), (h), and (i) of this clause) who, by reason of the '
nature of his duties in connection with the performance nf this con-
tract, would reasonably be ennectcal to make inventions.
(Oct.8, 1956)
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(iii) The terms "subcontract" and "subcontractor" mean any
subcontract or subcontractor of the Contractor, and any lower-tier sub-
contract or subcontractor under this contract.
(b) (1) The Contractor agrees to and does hereby grant to the Govern-
ment an irrevocable, nonexclusive, nontransferable, and royalty-free
license to practice, and cause to be practiced by or for the United
States Government throughout the world, each Subject Invention in the
manufacture, use and disposition according to law, of any article or
material, and in the use of any method. No license granted herein shall
convey any right to the Government to manufacture, have manufactured, or
use any Subject Invention for the purpose of providing services or sup-
plies to the general public in competition with the Contractor or the
Contractor's commercial licensees in the licensed fields.
(2) With respect to:
(i) any Subject Invention made by other than Technical Per-
(ii) any Subject Invention conceived prior to, but first
actually reduced to practice in the course of, any of the experimental,
developmental, or research work specified in (a)(i) above: and
(iii) the practice of any Subject Invention in foreign
countries; the obligation of the Contractor to grant a license as pro-
vided in (b)(1) above, to convey title as provided in (d)(ii)(B) or (d)
(iv) below, and to convey foreign rights as provided in -(e) below; shall
be limited to the extent of the Contractor's right to grant the same
Without incurring any obligation to pay royalties or ether compensation
to others solely on account of said grant. Nothing contained in this
Patent Rights clause shall be deemed to grant any license under any in-
vention other than a Subject Invention.
(c) The Contractor shall furnish to the Contracting Cfficer the
following informatiGn and reports concerning Subject Inventions which
reasonably appear to be patentable:
(L) a written disclosure promptly after conception or first
actual reduction to practice of each such Invention together with a
written statement specifying whether or not a United States patent appli-
cation claiming the Invention has been or will be filed by or on behalf
of the Contractor;
(ii) interim reports, at least every twelve months, commen-
cing with the date of this contract, each listing all such Inventions
conceived or first actually reduced to practice more than three months
prior to the date of the report, and not listed on a prior interim re-
port, 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.
sound;
(d) In connection with each Subject Invention referred to in
(c)(i) above, the Contractor shall do the following:
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(i) if the Contractor specifies that a United States
patent application claiming such Invention will be filed, the Con-
tractor shall file or cause to be filed such application in due
form and time; however, if the Contractor, after having specified
that such an application would be filed, decides not to file or cause
to be filed said application, the Contractor shall so notify the Con-
tracting 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 Ckntracting Officer to the contrary), the
Contractor shall:
(A) inform the Contracting Officer in writing at the
earliest practicable date of any publication of such Invention. made by
or known to the Contractor or, where applicable, of any contemplated
Nirm0 publication by the Contractor, stating the date and identity of such
publication or contemplated publication; and
(B) convey to the Government the Contractor's entire
right, title, and interest in such Invention by delivering to the Con-
tracting Officer upon written request such duly executed instruments
(prepared bythe Government) of asSignment and application, and such
other papers as are deemed necessary to vest in the Government the
Contractor's right, title, and interest aforesaid, and the right to
apply for and prosecute patent applications covering such Invention
throughout the world, subject, however, to the right of the Contrac-
tor specified in (e) below to file foreign applications, and subject
further to the reservation of a non-exclusive and royalty-free license
to the Contractor (and to its existing and future associated and affi-
liated companies, if any, within the corporate structure of which the
Contractor is a part) which license shall be assignable to the succes-
sor of that part of the Contractor's business to which such Invention
pertains:
%NV
(iii) the Contractor shall furnish promptly to the Con-
tracting Officer on request an irrevocable power of attorney to in-
spect and make copies of each United States patent application filed
by or on behalf of the Contractor covering any such Invention;
(iv) In the event the Contractor, or those other than the
Government deriving rights from the Contractor, elects not to continue
prosecution of any such United States patent application filed by or
on behalf of the Contractor, the Contractor shall so notify the Con-
tracting Officer not less than sixty days before the expiration of
the response period and, upon written request, deliver to the Contrac-
ting Officer such duly executed instruments (prepared by the Government)
as are deemed necessary to vest in the Government the Contractor's
entire right, title, and interest in such Invention and the applica-
tion, subject to the reservation as specified in (d)(ii) above; and
(v) the Contractor shall deliver to the Contracting Officer
duly executed instruments fully confirmatory of any license rights
herein agreed to be granted to the Government.
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(e) The Contractor, or those other than the Government deriving
rights from the Contractor, shall have the exclusive rights to file
applications on Subject Inventions in each foreign country within:
(i) nine months from the date a corresponding United States
application is filed;
(ii) six months from the date permission is granted to file
foreign applications where snch filing had been prohibited for security
reasons; or
(iii) such longer period as may be approved by the Contrac-
ting Officer. The Contractor shall, upon written request of the Con-
tracting Officer, convey to the Government the Contractor's entire
right, title, and interest in each Subject Invention in each foreign
country in which an application has not been filed within the time
above specified, subject to the reservation of a non-exclusive and
royalty-free license to the Contractor together with the right of the
Contractor to grant sublicenses, which license and right shall be as-
signable to the successor of that part of the Contractor's business to
which the Subject Invention pertains.
(f) If the Contractor fails to deliver to the Contracting 3fficer
the interim reports required by (c)(ii) above, or fails to furnish the
written discleslAres for all Subject Inventions required by (c)(i) above
shown to be due in accordance with any interim report delivered under
(c)(ii) or otherwibe known to be unreported, there shall be withheld
from payment until the Contractor shall have corrected such failures
either ten percent (10%) of the amount of this contract, as from time
to time amended, or five thousand dollars ($5,000), whichever is less.
After payment of eighty percent (80%) of the amount of this contract,
as from time to time amended, payment shall be withheld until a reserve
of either ten percent (10%) of such amount, or five thousand dollars
4.)5,000), whichever is less, shall have been set aside, ,such reserve
or balance thereof to be retained until the Contractor shall have fur-
nished to the Contracting Officer:
(i) the final report required by (c)(iii) above;
(ii) written disclosures for all Subject Inventions required
by (c)(i)above which are shown to be due in accordance with interim re-
ports delivered under (c)(ii) above or in accordance with such final
reports or are otherwise known to be unreported; and
(iii) the information as to any subcontractor required by (h)
below. The maximum amount which may be withheld under this paragraph
(f) shall not exceed ten percent (10%) of the amount of this contract
or five thousand dollars ($5,000), whichever is less, and no amount
shall be withheld under this paragraph (f) when the amount. specified
by this paragraph (f) is being withheld under other provisions of this
contract. The withholding of any amount or subsequent payment thereof
to the Contractor shall not be construed as a waiver of any rights ac-
cruing to the Government under this contract. This paragraph (f) shall
not be construed as requiring the Contractor to withhold any amounts
from a subcontractor to enforce compliance with the patent provisions
of a subcontract.
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(g) The Contractor shall exert all reasonable effort in negotia-
ting for the inclusion of this Patent Rights clause in any subcontract
hereunder of three thousand dollars ($3,000) or more having experimen-
tal, developmental, or research work as one of its purposes. In the
event of refusal by a subcontractor to accept the Patent Rights clause,
the Contractor shall not proceed with the subcontract without written
authorization of the Contracting Officer, and upon obtaining such auth-
orization, shall cooperate with the Government in the negotiation with
such subcontractor of an acceptable patent rights clause: PROVIDED,
however, that the Contractor shall in any event require the subcontrac-
tor to grant to the Government patent rights under Subject Inventions
of no less scope and on no less favorable terms than those which the
Contractor has under such subcontracts, except that in no event shall
the subcontractor be required to grant to the Government patent rights
in excess of those herein agreed to be granted to the Government by the
Contractor.
(h) The Contractor shall, at the earliest practicable date, notify
the Contracting Officer in writing of any subcontract containing a patent
rights clause, furnish the Contracting Officer a copy of such clause, and
notify the Contracting Officer when such subcontract is completed. It is
understood that with respect to such subcontract clause, the Government
is a -b:. rd party beneficiary, and the Contractor hereby assigns to the
Government all the rights that the Contractor would have to enforce the
subcontractor's Obligations for the benefit of the Government with res-
pect to Subject Inventions. The Contractor shall not be obligated to
enforc'e the agreements of any subcontractor hereunder relating to Subject
inventions.
(i) When the Contractor shows that it has been delayed in the
performance of this contract by reason of its inability to obtain in ac-
cordance with (g) above a suitable patent rights clause from a qualified
subcontractor for any item or service required under this contract for
which the Contractor itself does not have available facilities or quali-
fied personnel, the Contractor's delivery dates shall be extended for a
period of time equal to the duration of such delay; and, upon request
of the Contractor, the Contracting Officer shall determine to what ex-
tent, if any, an additional extension of the delivery dates and an in-
crease in contract prices based upon additional costs incurred by such
delay are proper under the circumstances; and the contract shall be
modified accordingly. If the Contractor, after exerting all reasonable
effort, is unable to obtain a qualified subcontractor as sat forth above,
the Contractor may submit to the Contracting Officer a written request
for waiver or modification of the requirement that a suitable patent
rights clause be included in the subcontract.
Such request shall specifically state that the Contractor has used
all reasonable effort to obtain such qualified subcontractor, and shall
cite the waiver or termination provision hereinafter set forth. If,
within thirty-five (35) days after the date of receipt of such request
FP (Oct. 8, 1956)
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dati
for a waiver or modification of said requirement, the Contracting Offi-
cer shall fail to deny in writing such request, the requirement shall .
be deemed to have been waived by the Government. If within such period
the Contractor shall receive a written denial of such request by the
Contracting Offieer, this contract shall thereupon automatically ter-
minate and the rights and obligations of the parties shall be governed
by th provisions of the clause of this contract providing for termina-
tion for the convenience of the Government.
28. ClOPYRIGHT
(a) The Contractor agrees to and does hereby grant to the Govern-
ment, and to its officers, agents and employees acting within the scope
of their official duties, (1.) a royalty-free, nonexclusive and irrevo-
cable license to reproduce, translate, publish, use, and dispose of,
and to authorize others so to do, all copyrightable macerial first pro-
duced or composed and delivered to the Government under this contract
by the .Contractor, its employees or any individual or concern specifi-
cally employed or assigned to originate and prepare such material and
(ii) a license as aforesaid under any and all copyrighted or copyright-
able work not first produced or composed by the Contractor in the per-
formance of this contract but which is incorporated in the material fur-
nished under the contract, provided that such license shall be only to
the extent the contractor now has, or prior to completion or final set-
tlement of the contract may acquire, the right to grant such license
without becoming liable to pay compensation to others solely because
of such grant.
(b) The Contractor agrees that it will exert all reasonable effort
to advise the Contracting Officer, at the time of delivering any-copy-
rightable or copyrighted work furnished under this contract, of any
adversely held copyrighted or copyrightable material incorporated in
any such work and of any invasion of the right of privacy therein con-
tained
(c) The Contractor agrees to
promptly and in reasonable written
right infringement received by the
ml delivered under this contract.
1?1 M. ,111 NMI W 1.
W' ? V W
report to the Contracting Officer,
detail, any notice or claim of copy-
Contractor with respect to any ranter-
The Contractor agrees to and does
to the full extent of the Contractor's
of compensation to others, the right t
for governmental purposes (i
ernments for their
may deman
hereby grant to th-
right to
rnment,
without payment
educe, use, and disclose
g the right to give to foreign gov-
the national interest of the United States
or any part of the reports, drawings, blueprints, data,
information specified to be delivered by the Contractor
thet?iaothing
SP (Oct. 8, 1956)
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to grant any license under an
SECRET
30. GOVERNMENT-FURNISHED PROPERTY
J. L.. eziz
or issued or to
alp contract.-
(a) The Government shall deliver to the Contractor, for use in
connection with and under the terms of this contract, the property des-
cribed in the Schedule or specifications, together with such related
data and information as the Contractor may request and as may reason-
ably be required for the intended use of such 'property (hereinafter
referred to as "Government-furnished Property"). The delivery or per-
formance dates for the supplies or services to be furnished by the Con-
tractor under this contract are based upon the expectation that Govern-
ment-furnished Property suitable for use will be delivered to the Con-
tractor at the times stated in the Schedule or, if not so stated, in
sufficient time to enable the Contractor to meet such delivery or per-
formance dates. In the event that Government-furnished Property is not
delivered to the Contractor by such time or times, the Contracting Offi-
cer 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 price,
or both, and any other contractual provision affected by such delay, in
accordance with the procedures provided for in the clause of this con-
tract entitled "Changes-" In the event the Government-furnished Property
is received by the Contractor in a condition not suitable for the in-
tended use the Contractor shall, upon receipt thereof, notify the Con-
tracting Officer of such fact and, as directed by the Contracting Offi-
cer, either (i) return such property at the Government's expense or
otherwise dispose of the property, or (ii) effect repairs or modifica-
tions. 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 Gov-
ernment-furnished 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 con-
tract. In any such case, the Contracting Officer upon the written re-
quest of the Contractor shall equitably adjust the delivery or per-
formance dates or the contract price, or both, and any other contrac-
tual provisions affected by the decrease, in accordance with the pro-
cedures provided for in the clause of this contract entitled "Changes."
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(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 Government, nor shall such Government-furnished pro-
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 maintain adequate property control records of Government-furnished
property in accordance with the provisions of the "Manual for the Control
of Government Property in the Possession of Contractors" (Appendix B,
Armed Services Procurement Regulation) as in effect on the date of the
contract, which Manual is hereby incorporated by reference and made a
part of this contract.
(d) The Government-furnished property shall, unless otherwise
provided herein, be used only for the performance of this contract.
(e)' The Contractor shall maintain and administer, in accordance
with Sound industrial practice, a program for the, maintenance, repair,
protection and preservation of Government-furnished property, until
disposed of by the Contractor in accordance with this. clause. In the
event that any damage occurs to Government-furnished Property the risk
of which has been assumed by the Government under this contract, the
Government shall replace such items or the Contractor shall make such
repair of the property as the Government directs; provided, however,
that if the Contractor cannot effect such repair within the time re-
quired, the Contractor shall dispose of such property in the manner
directed by the Contracting 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
replacement of Government-furnished property made at the direction of
the Government. Any repair or replacement for which the Contractor
is responsible under the provisions of this contract shall be accom-
plished by the Contractor at its own expense.
(f) (i) Except for loss, destruction or damage resulting from a
failure of the Contractor, due to willful misconduct or lack of good
faith of any of the Contractor's managerial personnel as defined
-herein, to maintain and administer the program for the maintenance,
repair, protection and preservation of the Government-furnished pro-
perty as required by paragraph (e) hereof, and except as specifically
provided in clause (s) of this contract or in the clause or
clauses of this contract designated in the Schedule, the Contractor
shall not be liable for loss or destruction of or damage to the Gov-
ernment-furnished property (A) caused by any peril while the property
is in transit off the Contractor's premises, or (B) caused by any of
the following perils while the property is on the Contractor's or sub-
contractor's premises, or on any other premises where such property
may properly be located, or by renovna .t,:h,..Qem--11,,)4.7.ausa of any of the
following perils:
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(I) Fire; lightning; windstorm, cyclone, tornado, hail; explo-
sion; riot, riot attending a strike, civil commotion; vandalism and mali-
cious mischief; sabotage; aircraft or objects falling therefrom; vehicles
running on land or tracks, excluding vehicles owned or operated by the
Contractor or any agent or employee of the Contractor; smoke, sprinkler
leakage; earthquake or volcanic eruption; flood, meaning thereby rising
of a body of water; hostile or warlike action, including action in hin-
dering, combating, or defending against an actual, impending or expeeoed
attack by any government or sovereign power (de jure or de facto), or by
any authority using military, naval, or air forces, or by an agent of any
such government, power, authority, or forces; or
(II) Other peril, of a type not listed anove, if such other
peril is customarily covered by insurance (or by a reserve for self-
insurance) in accordance with the normal practice of the Contractor, or
the prevailing practice in the industry in which the Contractor is en-
gaged 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 Government-Furnished
propertr while in its possession or control, except to the extent that
the subcontract, with the prior approval of the Contracting Officer, may
provide for the relief of the subcontractor from such liability. In the
absence of such approval, the subcontract shall contain appropriate pro-
visions requiring the return of all Government-Furnished property in as
good condition as when received, except for reasonable wear and tear or
for the utilization of the property in accordance with the provisions of
the prime contract.
The term "Contractor's managerial personnel" as used herein means
the Contractor's directors, officers and any of its managers, superin-
tendents, or other equivalent representatives who have supervision or
direction of (I) all or substantially all of the Contractor's business;
(II) all or substantially all of the Contractor's operation at any one
, plant or separate location at which the contract is being performed;
/
NAM) a separate and complete major industrial operation in connection
with, the performance of this contract.
(ii) The Contractor represents that it is not including in the
price hereunder, and agrees that it will not hereafter include in any
price to the Government, any charge or reserve for insurance (including
self-insurance funds or reserves) covering loss or destruction of or
damage 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 Offiaer thereof, and shall
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communicate with the Loss and Salvage Organization, if any, now or here-
after designated by the Contracting Officer, and with the assistance of
the Loss and Salvage Organization so designated (unless the Contracting
Officer has directed that no such organization be employed), shall take
all reasonable steps to protect the Government-furnished property from
further damage, separate the damaged and undamaged Government-furnished
property, put all the Government-furnished property in the best possible
order, and furnish to the Contracting Officer a statement of: (A) the
lost, destroyed and damaged Government-furnished property (B) the time
and orlgin of the loss, 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 performing its obligations under this sub-
paragraph (iii)(including charges made to the Contractor by the Loss and
Calvage Organization, except any of such charges the payment of which
the Government has, at its option, assumed directly), to the extent ap-
proved by the Contracting Officer and set forth in a Supplemental Agree-
ment,
(iv) With the approval of the Contracting Officer after loss
or destruction of or damage to Government-furnished property, and sub-
ject to such conditions and limitations as may be imposed by the Con-
tracting Officer, the Contractor may, in order to minimize the loss to
the Government or in order to permit resumption of business or the like,
sell for the account of the Government any item of Government-furnished
property which has been damaged beyond practicable repair, or which is
so commingled or combined with property of others, including the Con-
tractor, that separation is impracticable.
(v) Except to the extent of any loss or destruction of or
damage to Government-furnished property for which the Contractor is re-
lieved 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, destruction or
damage and, upon the request of the Contracting Officer, shall at the
Government's expense, furnish to the Government all reasonable assistance
and cooperation (including the prosecution of suit and the execution of
instruments of assignment in favor of the Government) in Obtaining re-
covery. In addition, where a subcontractor has not been relieved from
liability for any loss or destruction of or damage to the Government-
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Furnished property, the Contractor shall enforce the liability of the
subcontractor for such loss or destruction of or damage to the Govern-
ment-Furnished property for the benefit of the Government.
(vii)(Where applicable). In the event any aircraft are to be
furnished under this contract, any loss or destruction of, or aomage to,
such aircraft or other Government-furnished property occurring in con-
nection 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 Government shall at all reasonable times have access to
the premises wherein any Government-furnished property is lecated.
(h) Upon the completion of this contract, or at such earlier date
as may be fixed by the Contracting Officer, the Contractor shall submit,
*ow 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 Government-furnished property, as may be directed
or authorized by the Contracting Officer. Recoverable scrap from Gov-
ernment-furnished property shall be reported in accordance with a pro-
cedure and in such form as the Contracting Officer may direct. 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..
(i) Directions of the Contracting Officer and communications of
the Contractor shall be in writing.
31. TERMINATION FOR CONVENIENCE OF THE GOVERNMENT
(a) The performance of work under this contract may be terminated
by the Government in accordance with this clause in whole, or from time
to time in part, whenever the Contracting Officer shall determine that
such termination is in the best interest of the Government. Any such
termination shall be effect 7:d by delivery to the Contractor of a Notice
of Termination specifying the extent to which performance of work under
the contract is terminated, and the date upon which such termination be-
comes effective..
(b) After receipt of a Notice of Termination, and except as other-
wise directed by the Contracting Officer, the Contractor shall (1) stop
work under the contract on the ante and to the extent specified in the
Notice of Termination; (2) place no further orders or subcontracts for
materials, services, or facilities except as may be necessary for COM-
pletion of such portion of the work under the contract as is not ter-
minated; (3) terminate all orders and subcontracts to the extent that
they relate to the performance of work terminated by the Notice of Ter-
mination; (4) assign to the Government, in the manner, at the times, and
to the extent directed by the Contracting Officer, all of the right,
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title, and interest of the Contractor under the orders and subcontracts
so terminated, in which case the Government shall have the right, in its
discretion, to settle or pay any or all claims arising out of the termina-
tion of such orders and subcontracts; (5) settle all outstanding liabi-
lities and all claims arising out of such termination of orders and sub-
contracts, with the approval or ratification of the Contracting Officer,
to the extent he may require, which approval or ratification shall be
final for all the purposes of this clause; (6) transfer title and deliver
to the Government, in the manner, at the times, and to the extent, if any,
directel by the Contracting Officer, (i) the fabricated or unfabricated
parts, work in process, completed work, st4pplies, and other material pro-
duced as a part of, or acquired in connection with the performance of,
the work terminated by the Notice of Termination, and (ii) the. completed
or partially completed plans, drawings, information, and other property
which, if the contract had been completed, would have been required to
be furnished to the Government, (7) use its best efforts to sell, in the
manner, at the -times, to the extent, and at the price or prices directed
New
or authorized by the Contracting Officer, any property of the types re-
ferred to in provision (6) of this paragraph, PROVIDED, HOWEVER, that the
Contractor (i) shall not be required to extend credit to any purchaser,
and (ii) may acquire any such property under the conditions prescribed.
by and at a price or prices approved by the Contracting Officer; and.
PROVIDED further that the proceeds of any such transfer or disposition
shall be applied in reduction of any payments to be made by the Govern-
ment to the Contractor under this Contract or shall otherwise be credited
to the price or cost of the work covered by this contract or paid in such
other manner as the Contracting Officer may direct; (8) complete perfor-
mance of such lpart of the -work as shall not have been terminated by the
Notice of Termination; and (9) take such action as may be necessary, or
as the Contracting Officer may direct, for the protection and preserva-
tion of the property related to this contract which is in the possession
of the Contractor and in which the Government has or may acquire an
interest. At any time after expiration of the plant clearance period, as
defined in Section VIII, Armed Services Procurement Regulation, as it may
be amended from timeato-tirre3---the Contractor may submit to the Contrac-
ting Officer a list, certified as to quantity and quality, of any or all
items of termination inventory not previously disposed of, exclusive of
items the disposition of which has been directed or authorized by the
Contracting Officer, and may request the Government to remove such items
or enter into a storage agreement covering them. Not later than fifteen
(15) days thereafter, the Government will accept title to such items and
remove them or enter into a storage agreement covering the sane, PROVIDED
that the list submitted shall be subject to verification by the Contrac-
ting Officer upon removal of the items, or if the items are stored, within
forty-five (45) days from the ante of submission of the list, and any
necessary adjustment to correct the list as submitted sha,1i be made prior
to final settlement.
(c) After receipt of a Notice of Termination, the Contractor shall
submit to the Contracting Officer its termination claim, in the form and
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with the certification proscribod by the Contracting Officer, Such claim
shall be submitted promptly but in no event later than two years from
the effective date of termination, unless one or more extensions in writ-
ing are granted by the Contracting Officer, upon request of the Contrac-
tor made in writing within such two-year period or auttorizod extension
thereof. However, if the Contracting Officer determines that the facts
justify such action, he may receive and act upon any such termination
claim at any time after such two-year period or any extension thereof.
Upon failure of the Contractor to submit its termination claim within
the tine allowed, the Contracting Officer may determine, on the basis of
Information available to him, the amount, if any, due to the Contractor
by reason of the termination and shall thereupon pay to the Contractor the
amount so determined.
(d) Subject to the provisions of paragraph (c), the Contractor and
the Contracting Officer may agree upon the whole or any part of the
amount or amounts to be paid to the Contractor by reason of the total
or partial termination of work pursuant to this clause, which amount
Or amounts may include a reasonable allowance for profit on work done.
The contract shall be amended accordingly, and the Contractor shall be
paid the agreed amount. Nothing in paragraph (c) of this clause, pres-
cribing the amount to be paid to the Contractor in the event of failure
of the Contractor and the Contracting Officer to agree upon the whole
amount to be paid to the Contractor byreason of the termination of work
pursuant to this clause, shall be deemed to limit, restrict, or otherwise
determine or affect the amount or amounts which may be agreed upon to be
paid to thu Contractor pursuant to this paragraph (a).
(e) In the event of the failure of the Contractor and the Contrac-
tinE -.Officer to agree as provided in paragraph (d) upon the whole amount
to be paid to the Contractor by reason of the termination of work pursuant
to this clause, the Contracting Officer shall determine, on the basis of
information available to him, the amount, if any, duo to the Contractor
by reason of the termination and shall pay to the Contractor the amounts
determined as follows:
(1) For completed supplies accepted by the Government (or sold
or acqnired as provided in paragraph (b)(7) above) and not theretofore
paid for, a sum equivalent to the aggregate price for such supplies com-
puted in accordance with the price or prices specified in the contract,
appropriately adjusted for any saving of freight or other charges;
(2) The total of --
(i) The costs incurred in the performance of the work termina-
ted, including initial costs and preparatory oxpense allocable thereto,
but exclusive of any costs attributable to supplies paid or to be paid
for under paragraph (c)(1) hereof;
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(ii) The cost of settling and paying claims arising out of the
termination of work under subcontracts or orders, as provided in para-
graph (b)(5) above, which are properly chargeable to the terminated
portion of the contract (exclusive of amounts paid or payable on account
of supplies or materials delivered or services furnished by subcontrac-
tors or vendors prior to the effective date of the Notice of Termina-
tion, which amounts shall be included in the costs payable under (i)
above).
(iii) An allowance for profit in keeping with the provisions
of the clause, "Price Redetermination," of the Schedule hereto.
(3) The reasonable costs of settlement, including accounting,
legal, clerical, and other expenses reasonably necessary for the prepara-
tion of settlement claims and supporting data with respect to the ter-
minated portion of the contract and for the termination and settlement
of subcontracts thereunder, together with reasonable storage, trans-
portation, 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 (1) and (2) of
this paragraph (e) shall not exceed the total contract price as re-
duced by the amount of payments otherwise made and as further reduced
by the contract price of work not terminated. Except for normal spoil-
age, 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 paragraph (e)(1) and
paragraph (e)(2)(i), the fair value, as determined by the Contracting
Officer, of property which is destroyed, .lost, stolen, or damaged so as
to become undeliverable to the Government, or to a buyer pursuant to
paragraph (b)(7).
(f) Any determination of costs under paragraph (c) or (e) hereof
shall be governed by the Statement of Principles for Consideration of
Costs set forth in Part 4 of Section VIII of the Armed Services Pro-
curement Regulation, as in effect on the date of this contract.
(g) The Contractor shall have the right of appeal, under the
clause of this contract entitled "Disputes," from any determination
made by the Contracting Officer under paragraphs (c) or (e) above,
except that if the Contractor has failed to submit its claim within
the time provided in paragraph (c) above and has failed to request
extension of such time, he shall have no such right of appeal. In
any case where the Contracting Officer has made a determination of the
amount due -Under paragraph (c) or (c) above, the Government shall pay
to the Contractor the following (i) if there is no right of appeal
hereunder or if no timely appeal has been taken, the amount so deter-
mined by the Contracting Officer, or (ii) if an appeal has been taken,
the amount finally determined on such appeal.
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(h) In arriving at the amount due the Contractor under this clause
There shall be deducted (1) all unliquidated advance or other unliquidated
payments on account theretofore made to the Contractor, (2) any claim
which the Government may have against the Contractor in connection with
this contract, and (3) the agreed price for, or the proceeds of sale of,
av materials, supplies, or other things acquired by the Contractor or
sold, pursuant to the provisions of this clause, and not otherwise re-
covered by or credited to the Government.
W If the termination hereunder be partial, prior to the settle-
ment dt. the terminated portion of this contract, the Contractor may file
with tiv. Contracting Officer a request in writing for an equitable ad-
justmen of the price or prices specified in the contract relating to
the coninued portion of the contract (the portion not terminated by
the No ice of Termination), and such equitable adjustment as may be
agreed bon shall be made in such price or prices_
1
(i The Government may from time to time, unaer such terms and con-
ditions as it may prescribe, make partial payments and payments on account
against cbss incurred by the Contractor in connection with the terminated
portion of this contract whenever in the opinion of the Contracting Offi-
cer the aggegate of such payments shall be withir the amount to which
T
the ContracTor will ba entitled hereunder. If the total of such payments
is in exces of the amount finally agreed or determined to be duo under
this clause,, such excess shall be payable by the Contractor to the Gov-
ernment upon demand, together with interest computed at the rate of 6%
per annuM, for the period from the date such excess payment is received
by the Contractor to the date on which such excess is repaid to the Gov-
ernment; provided, however, that no interest shall be charged with res-
pect to any such excess payment attributable to a reduction in the Con-
tractor's laim by reason of retention or other disposition of termina-
tion inventory until ten days after the date of such retention or dis-
position. !
(k) Unless otherwise provided for in this contract, or by appli-
cable statute, the Contractor, from the effective date of termination
and for a period of six years after final settlement under this con-
tract, shall preserve and make available to the Government at all rea-
Sonable times at the office of the Contractor but without direct charge
to the Government, all its books, records, documents, and other evidence
bearing on the costs and expenses of the Contractor under this contract
and relating to the work terminated hereunder, or, to the extent ap-
proved by the Contracting Officer, photographs, micro-photographs, or
other authentic reproductions thereof.
The Contractor shall be paid ,0111d MO assion of properly cer-
tified invoices n prices stipulated herein for supplies
nn a accepte. a lean Acducti ms,
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if any, as herein provided. Unless
bemade on partial deliveries accepted by the
amount due on such deliveries so war
Contractor, payment for
ever such
33. DEFAULT
would equal or
-n the
,?r, when requested by the
partial deliveries shall be made when-
exceed either $1,000 or 50% of the
(a) The Government may, subject to the provisions of paragraph
(b) below, by written Notice of Default to the Contractor, terminate
the whole or any part of this contract in any one of the following cir-
cumstances:
(i) If the Contractor fails to make delivery of the supplies or
to perform the services within the time specified herein or any exten-
sion thereof; or
(ii) If the Contractor fails to perform any of the other provi-
sions 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 auth-
orize in writing) after receipt of notice from the Contracting Officer
specifying such failure.
(b) The Contractor shall not be liable for any excess costs, if
any failure to perform the contract arises out of causes beyond the
control and without the fault or negligence of the Contractor. Such
causes include, but are not restricted to, acts of God or of the
public enemy, acts of the Government, fires, floods, epidemics, quar-
antine restrictions, strikes, freight embargoes, unusually severe
weather, and defaults of subcontractors due to any of such causes
unless the Contracting Officer shall determine that the supplies or
services to be furnished by the subcontractor were Obtainable from
other sources in sufficient time to permit the Contractor to meet the
required delivery schedule
(c) 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, PROVIDED that
the Contractor shall continue the performance of this contract to the
extent not terminated under the provisions of this clause.
(d) If this contract is terminated as provided in paragraph (a)
of this clause, the Government, in addition to any other rights pro-
vided in this clause, may require the Contractor to transfer title
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r ?
and deliver to the Governm .?
? the manner and to extent
directed by the Contracting Officer, (i) any completed supplies,
and (ii) such partially completed supplies and materials, parts,
tools, dies, jigs, fixtures, plans, drawings, information and con-
tract rights (hereinafter called "manufacturing materials") as the
Contractor has specifically produced or specifically acquired for
the performance of such part of this contract as has been terminated;
and the Contractor shall, upon direction of the Contracting Officer,
protect and preserve property in possession of the Contractor in
which the Government has an interest. The Government shall pay to
the Contractor the contract price for completed supplies delivered
to and accepted by the Government, and the amount agreed upon by the
Contractor and the Contracting Officer for manufacturing materials
delivered to and accepted by the Government and for the protection
and preservation of property. Failure to agree 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
pursuant to the provisions of paragraph (b) 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 Government" 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 applies only
if this contract is with a military department.
(f) The rights and remedies of the Government provided in this
clause shall not be exclusive and are in addition to any other rights
and remedies provided by law or under this contract.
34. SUBCONTRACTS FOR WORK OR SERVICES
(a) No 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.
(b) The Contractor shall give specific advance notification
to the Contracting Officer of any proposed subcontract hereunder
which (i) is on a cost or cost-plus-a-fixed-fee basis, or (ii) is
on a fixed-price basis exceeding in dollar amount either $25,000
or five percent (5%) of the total amount of this contract.
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(c) The Contractor shall not, without the prior written consent of
the Contracting Officer, place any subcontract Which (1) is on a cost or
cost-plus-&-fixed-fee basis, or (ii) is on a fixed price basis exceeding
in dollar amount either $25,000 or five percent (5%) of the total amount
of this contractroor (iii) provides for the fabrication, purchase, rental,
installation or other acquisition, of any item of industrial facilities,
or of special tooling having a value in excess of $1,000, or (iv) is on
a time-and-material or labor-hour basis. The Contracting Officer may,
in his discretion, ratify in writing any such subcontract; such action
shall constitute the consent of the Contracting Officer as required by
this paragraph (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 determination of the acceptabilii,
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 requirements
of paragraphs a, b, and c of this Article 34. The Contracting Officer has
approved the Contractor's purchasing system, and such approval shall remain
in effect unless rescinded by the Contracting Officer in writing.
35. ALTERATIONS IN CONTRACT
The following alterations were made in this contract prior to signature
thereof by the parties to this contract:
(a) The following articles were added:
36. INSPECTION AND AUDIT
(a) The Contractor agrees that its books and records and its plants, or
such part thereof as may be engaged in the performance of this contract, shall
at all reasonable times be subject to inspection and audit by and authorized
representative of the Contracting Officer,
(b) The Contractor shall cause a like provision to be included in all
subcontracts hereunder.
37. SUPERSEDING SPECIFICATIONS
All references in any Government specification incorporated herein to
other Government specifications shall be deemed to include all specifications
supplementary to or superseding the specifications so referred to, to the
extent that such supplementary or superseding specifications are in effect
at the date of Contractor's latest quotation, if the Contractor was furnished
or otherwise notified of the existent* of such supplementary or superseding
specification at the time of said quotation.
4 38. DELAY IN DELIVERY DATA
(a) It is understood that the efficient use by the Government of
the supplies called for hereunder requires that the data de:lied for
hereunder be delivered not later than the time or respective times herein
specified. If such data is not delivered at said time or times the ?
Government may at its election, so long as such data remains undelivered,
unless the delay in delivery thereof arises out of causes beyond the
control and without the fault or negligence of the Contractor within the
meaning of the clause hereof entitled Default,? withhold payment to the
Contractor for any of the amounts then due, refuse approval of the
Contractor's vouchers and refuse to accept further deliveries hereunder
from the Contractor or take any other action authorised by law or
regulation now or hereafter in effect including termination of the
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contract for default to the extent and in the manner authorized by said
clause, and may take any or all of the foregoing actions separately or
in combination.
(b) The provisions of this clause shall only be applicable to
technical data, such as handbooks, service manuals, or other information
necessary for the proper maintenance or servicing of the end items called
for herein.
39. QUALITY CONTROL SPECIFICATION
Except as otherwise provided in this contract, the Contractor's
system of quality control during the performance of this contract shall
be in accordance with the provisions of Military Specification MIL-41,5923,
as in effect on the date of this contract, incorporated herein by refer-
ence, unless this contract is one of the types specified in paragraph 1.2
of said specification.
40. ADDITIONAL TAX PROVISION
The term "contract date" under the clause hereof entitled "Federal,
State and Local Taxes" shall also be deemed to refer to the date of approval
of the respective Exhibits or Spare Parts Change Requests submitted pur-
suant to this contract.
41. SHIPMENTS.
(a) Unless otherwise provided in this contract or unless the
Contracting Officer acting under the "Changes" clause hereof directs in
writing otherwise, all supplies to be furnished under this contract shall
be delivered f.o.b. carrier's equipment at the plant or plants at which
such supplies are to be finally inspected and accepted, or if the facilities
for shipment by carrier's equipment are not available at the Contractor's
plant, f.o.b. the point or points nearest thereto that carrier service is
available. When the carrier's equipment is rail, any shipment occupying
sufficient space in a railroad car to constitute a carload shipment subject
to carload freight rates shall be properly and adequately loaded in freight
cars by the Contractor, and any shipment subject to less-than-carload
freight rates shall be delivered by the Contractor into the carrier's
possession at the Contractor's plant, or at the point or points nearest
thereto at which delivery can be effected.
(b) Whenever it is provided in this contract that supplies shall
be delivered f.o.b. specified destinations, such supplies shall be shipped
direct by the Contractor to the specified destinations an commercial bills
of lading, at the expense of the contractor. Provided, however, that
nothing contained herein shall preclude reimbursement of the Contractor
by the Government of any such transportation expenses if this is a cost-
reimbursement type contract.
(c) Notwithstanding other provisions of this contract, shipments
made under cost reimbursement contracts which do not exceed (i) 1000 pounds
if shipped by rail, truck, or freight forwarded, or (ii) 100 pounds if
shipped by railway express, or (iii) 50 pounds if shipped by commercial
air, shall be made by commercial bills of lading, charges to destination(s)
paid by the Contractor.
(d) Consignment Instructions. Capeigpment instructions *hall
be ds thicinthoritod'Repbesintative on:the.rempletive TrodietiewList
FP (Oct.o, 1956)
Price Rev.
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(e) Shipping Instructions. If not otherwise provided herein,
names of consignees of all supplies to be delivered by the Contractor
hereunder will be furnished in writing by the Contracting Officer at a
later date. Reqeest therefor shall be made to such address as the Con-
tracting Officer may direct, not later than thirty (30) days prior to
the date on which any of the articles are ready for shipment.
(f) Routing Instructions. If not otherwise provided herein and
deliveries are other than f.o.b. specified destinations, Government routing
instructions will be furnished to the Contractor in writing by the Con-
tracting Officer at a later date. If the Government routing instructions
have not been received by the Contractor thirty (30) days prior to date on
which any of the articles are anticipated to be ready for shipment, request
therefor shall immediately be made to the Contracting ?Mom
(g) Notice of Shipments. At the time of delivery of any shipment
of supplies to a carrier for transportation, the Contractor shall give
prepaid notice of shipment to the consignee establishment, and to such
other persons or installations designated by the Contracting Officer, in
accordance with instructions of the Contracting Officer. If such instructions
have not been received by the Contractor at least 24 hours prior to such
delivery to a carrier, the Contractor shall request instructions from the
Contracting Officer concerning the notice of shipment to be given.
(h) Computation of Delivery Time. For the purpose of determining
the fulfillment of this contract so far as delivery dates are concerned, in
the event the delivery point or points are not the same as the point or points
of destination, the time of delivery of the supplies shall be the date of
delivery to the carrier ready for shipment to destination.
0) Shipments by the Government. Unless this is a cost-reimbursement
type contract, any articles, supplies or other items to be delivered by the
Government to the Contractor shall, unless otherwise provided herein, be
delivered to the Contractor f.o.b. carrier's equipment at the plant or plants
of the Contractor designated, or if facilities for shipment by carrier's
equipment are not available at the Contractor's plant or plants, f.o.b. the
point or points nearest thereto that carrier's equipment is available.
(j) Where the contract provides that inspection and acceptance
shall be accomplished at a subcontractor's plant (whether in whole or in
part) the foregoing provisions, except paragraphs (e) and (f), shall be
equally applicable to such subcontractors as provided in said subcontract.
Subcontractors' shipping instructions and routing instructions, if not pre-
viously furnished, shall be requested from the Prime Contractor.
42. TIME FOR ISSUANCE OF PRODUCTION LISTS
No new production List shall be issued under this contract after
the date set forth in the Schedule unless such time is extended by written
agreement of the parties hereto.
43. FURMS
Attached heret are samples f the fo:-aat for Productin Lists
and Exhibits to Inlicb the parties hereto shall conform in the preparation
of such inotrnments.
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44. RIGHTS IN DATA - UNLIMITED
(a) The term "Subject Data" as used herein includes writings,
sound recordings, pictorial reproductions, drawings or other graphical
representation, and works of any similar nature (whether or not copyrighted)
which are specified to be delivered under this contract. The term does not
include financial reports, cost analyses and other information incidental
to contract administration.
(b) Subject to the proviso of (c) below, the Government may dupli-
cate, use, and disclose in any manner and for any puopose whatsoever, and
have others so do, all Subject Data delivered under this contract.
(c) The Contractor agrees to and does hereby grant to the Govern-
ment, and to its officers, agents, and employees acting within the scope of
their official duties, a royalty-free, non-exclusive and irrevocable license
throughout the world, to publish, translate, reproduce, deliver, perform,
dispose of and to authorize others so to do, all Subject Data now or here-
after covered by copyright; provided, that with respect to such Subject
Data not originated in the performance of this contract but which is incor-
porated in the work furnished under this contract such license shall be
only to the extent that the Contractor, its employees, or any individual
or concern speoifically employed or assigned by the Contractor to originate
and prepare such Data under this contract, now has, or prior to completichk
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.
(d) The Contractor shall exert all reasonable effort to advise
the Contracting Officer, at the time of delivery of the Subject Data.fur-
nished under this contract, of all invasions of the right of prioracy con-
tained therein and of all portions of such Data copied from work not com-
posed or produced in the performance of this contract and not licensed
under this clause.
(e) The Contractor shall report to the Contracting Officer,
promptly and in reasonable written detail, each notice or claim of copy-
right infringement received by the Contractor with respect to all Subject
Data delivered under this contract.
(f) Nothing contained in this clause shall imply a license to
the Government under any patent or be construed as affecting the scope of
any license or other right otherwise granted to the Government under any
patent.
(g) The Contractor shall not affix any restrictive markings upon
any Subject Data, and if such markings are affixed, the Government shall
have the right at any time to modify, remove, obliterate or ignore any
such marking."
(b) The following articles were deleted:
3 EXTRAS
17 AIRCRAFT IN THE OPEN
v29 REPRODUCTION & USE OF TECHNICAL DATA
32 PAYMENTS
FP (Oct. 8, 195(-
Price Rev..
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25X1A SEC. CL. ORIGIN
-
!DATE OF DOC DATE RECD DATE OUT
9.14-.*70
TO euu TgE RteUaid (a167)
FROM .c.;Ontracting Offictr
SUBJ. Mt # 46 to 9F-M-695/F.I.
CONTROL NO.
OSA..2219..70
SUSPENSE DATE CROSS REFERENCE,OR -
POINT OF FILING
DISTR: I - CMD/CCA
2 , BYD/OSA
ROUTING
DATE
SENT
COURIER NO.
ANSWERED
NO REPLY
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5
SECRET,
2001/041237-CrAIMPTISCRIBVTROM)00
PRECONTRACTftePPROVAL RECORD
(PART TWO) PERKIN-ELMER CORP
The services and equipment being procured by this Contract NoPF -CT-695
Mt. # 46/FINAL are in furtherance of the
Program(s), the nature of which cannot be publicly disclosed for security rea-
sons. The Contracting Officer therefore determines that this procurement must
be accomplished by negotiations pursuant to the authority of Section 3(a) of
PL 81-110 and Class Determination and Finding, OXC 2122, signed by the DDCI on
15 October 1961.
Certification of funds for this contract will be handled under the pro-
cedure approved by the Director of Central Intelligence on 15 December 1956
which, in effect, results in all covert expenses involving issuance of Treasury
Checks being accumulated, in a separate account within the Finance Division. The
amounts in this account will be periodically scheduled fOr certification of the
vouchers by the Director. This procedure eliminates the necessity for a sepa-
rate certification of authority under Section 8(b) of Public Law 110, 81st Con-
gress (formerly 10(b) - see 85-507 dated 7/7/58) for each contract.
The following comments describe the procurement hereby effected, the
terms and provisions generally of this contract/amendment, and a resume of
major iSsues negotiated:
SUBJ: A. Contract O-CT-551
B. Contract BF-CT-695
Perkin-Elmer Contracts
1. Final amendments were mailed to the Contractor. A above was dated
15 Dec 1969 and B was dated 30 Dec 1969. These amendments were returned unsign
by the Contractor on March 12, 1970. The Contractor contending the Amendments
as written did not reflect the agreement reached on March 8, 1968 for FY-67.
2. The Negotiator wrote the amendments based on the existing correspond
ence in the file without benefit of oral inputs from the Negotiator or Auditor
responsible for these contracts in March 1968.
3. The various pertinent correspondence is attached in the indexed
summary. The ensuing paragraphs paraphase and reflect contention of each party
to the March 68 meeting and the basis for the rewritten contract amendments.
4. The Contractor contends that the $90,000 refund made as a result of
the March 8, 1968 settlement meeting reflected a refund of what the Government
considered excess profit for spares delivered and billed as of 31 July 1967.
Included in the base for arriving at the settlement was the following FY-67
sell price figures (Billings for FY-67 thru 31 July 1967).
O-CT-551 $71,000
BF-cT-695 $48,000
The total of spares ordered for FY-67 had not been priced as the parties had no
agreed upon a pricing formula. FY-67 spares delivered and billed as of 31 July
1967 were priced using the FY-66 formula on a provisipnal basis. Part of the
A u s--b-UtaupaP R9ASE&Voii64/2Y:ecRliii5Ni intiaoyi w s that the F( 66
s
F,M,2167a SECRET
GROUP I
Excluded Irorn autornotic
downgrodin, and
declossificcuon
(12)
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1. Contract EF-CT-695 - IDEALIST
Effective 1 March 1958 - 30 June 1968
2. Contract O-CT-551 - OXCART
Effective 11 June 1963 - 30 June 1968
3. Type a. Fixed Price Call Type for Spares
b. Depot issues Purchase Requests
c. Contractor prices within 60 days
d. Priced by using a negotiated pricing formula.
4. Audit Rights -
a. For Contract 0-CT-551
See Att. I
b. For Contract HF-CT-695
See Att. II
5. Profit Special Report on Profits Realized for FY-63 thru 66
on FP Call Contracts 0-CT-551 and HF-CT-695
See Att. III - Audit Report c3-67-5-97 dated 21 Feb. 1968.
6. $90,000 Refund -
a. Results of Negotiation
Profit realized for FY-63 thru 67.
See Att. IV - Audit Report A-68-27-175 dated 25 Mar. 1968.
b. Contractor's letter March 8, 1968 confirming negotiation
meeting -
See Att. V.
c. Contract Officer letter of 12 Mar.1968 re (b) above.
See Att. VI.
d. Contractor transmittal of CHECK letter dated 27 Mar. 1968.
See Att. VII.
e. Transmittal of $90,000 check to CMD & BFD. See Att. VIII.
7. Final Amendment -
a. Att. EX - Copy of Amendment No. 46 to HF-CT-695
dated 30 Dec. 1969.
b. Att. X - Copy of Amendment No. 19 to D-CT-551
dated 15 Dec. 1969.
8. Unsigned Amendment -
a. Att. XI - Contractor returned Amendments unsigned per
letter dated Mar. 12, 1970, PAR-M-1958.
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9. Audit Evaluation of FY-67 PR's -
Att. XII - Audit review dated April 30, 1970 of Att. XI and re-
vised figures for 0-CT-51, FY-67.
10. Government reply to Contractor -
Att. XIII 111111111111 dated 16 May 1970 in reply to Contractor's
letter in Att. XI.
11. Contractor's reply -
Att. XIV - Contractor's letter, PAR-P-798, dated May 21, 1970
setting forth reasons why all costs were not included in
March 8, 1968 settlement.
12. Government reply -
Att. XV - dated 8 June 1970 reiterating Government
feels proposea amendments represent settlement agreement.
13. Att. XVI - Audit Review dtd 6-29-70 of FY-67 costs.
14. Att. XVII -tnenio of 8 July 1970.
15. Att. XVIII ltr. of Aug 20, 1970
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Including AppromilleFor Estleafepale4:14104/2aii_ciA-RPPIARQUIRAA1 914111cer and com-
practibable. munications of the Contractor issued pursuant to
(5) Except to the extent of any loss or destruc-
tion of or damage to Government-furnished prop-
erty for which 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 re-
turned 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.
(6) 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 reim-
burse the Government. The Contractor shall do
nothing to prejudice the Government's rights to
recover against third parties for any such loss,
destruction or damage and, upon the request of
t' Contracting Officer, shall at the Government's
jappense, furnish to the Government all reasonable
assistance and cooperation (including the prosecu-
tion of suit and the execution of instruments of
assignment in favor of the Government) in obtain-
ing recovery. In addition, where a subcontractor
has not been relieved from liability for any loss or
destruction of or damage to the Government-fur-
nished property, the Contractor shall enforce the
liability of the subcontractor for such loss or de-
struction of or damage to the Government-fur-
nished property for the benefit of the Government.
(7) If this contract is for the development, pro-
duction, modification, maintenance or overhaul of
aircraft, or otherwise involves the furnishing of air-
craft by the Government, the "Ground and Flight
Risk" clause of this contract shall control, to the
'extent it is applicable, in the case of loss or de-
struction of, or damage to, aircraft. [Rev. No. 6,
r -5/61.]
t) The Government shall at all reasonable times
have access to the premises wherein any Govern-
ment-furnished property is located.
(h) Upon the completion of this contract, or at
such earlier date as may be fixed by the Contract-
ing Officer, the Contractor shall submit, in a form
acceptable to the Contracting Officer, inventory
schedules covering all items of Government-fur-
nished 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
Government-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.
FP or PR
1 Feb. 63
this clause shall be in writing.
42. INTEREST (ASPR 7-303.26) (Feb. 1962)
Notwithstanding any other provision of this con-
tract, unless paid within 30 days all amounts that
become payable by the contractor to the Govern-
ment under this contract (net of any applicable tax
credit under the Internal Revenue Code) shall bear
Interest at the rate of six percent per annum from
the date due until paid, and shall be subject to the
adjustments as provided by Part 6 of Appendix E
of the Armed Services Procurement Regulation, as
In .effect on the date of this contract. Amounts
shall be due upon the earliest one of (i) the date
fixed pursuant to this contract, (ii) the date of the
first demand for payment, (iii) the date of a sup-
plemental agreement fixing the amount, or (iv) if
this contract provides for revision of prices, the date
of written notice to the contractor stating the
amount of refund payable in connection with a
pricing proposal or in connection with a negotiated
pricing agreement not confirmed by contract sup-
plement.
43. AUDIT AND RECORDS (ASPR 7-104.41)
(Nov. 1962)
I. The following clause shall apply to all con-
tracts, changes, or modifications where the contrac-
tor has furnished a Certificate of Current Cost or
Pricing Data.
(a) For purposes of verifying that cost or pricing
data submitted, in conjunction with the negotiation
of this contract or any contract change or other
modification involving an amount in excess of
$100,000 are accurate, complete, and current, the
Contracting Officer, or his authorized representa-
tives shall?until the expiration of three years from
the date of final payment under this contract?have
the right to examine those books, records, docu-
ments and other supporting data which will permit
adequate evaluation of the cost or pricing data sub-
mitted, along with the computations and projections
used therein, which were available to the Contrac-
tor as of the date of execution of the Contractor's
Certificate of Current Cost or Pricing Data.
(b) The Contractor agrees to insert the substance
of this clause including this paragraph (b) in all
subcontracts hereunder in excess of $100,000 unless
the price is based on adequate price competition,
established catalog or market prices of commercial
Items sold in substantial quantities to the general
public, or prices set by law or regulation.
II. In the event this contract provides for incen-
tive or price redetermination, the following alter-
nate AUDIT AND RECORDS clause shall apply.
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Audit and Records (Nov. 1962)
(a) The Contractor shall maintain books, records,
documents, and other evidence and accounting pro-
cedures and practices, sufficient to reflect properly
all direct and indirect costs of whatever nature
claimed to have been incurred and anticipated to be
Incurred for the performance of this contract. The
foregoing constitute "records" for the purposes of
this clause.
(b) The Contractor's plants, or such part thereof
as may be engaged in the performance of this con-
tract, and his records shall be subject at all rea-
sonable times to inspection and audit by the Con-
tracting Officer or his authorized representative.
(c) The Contractor shall preserve and make
available his records (i) until the expiration of three
years from the date of final payment under this
contract, and (ii) for such longer period, if any,
as is required by applicable statute, or by other
clauses of this contract, or by (A) or (B) below.
(A) If this contract is completely or partially ter-
minated, the records relating to the work termi-
nated shall be preserved and made available for a
period of three years from the date of any result-
ing final settlement.
(B) Records which relate to (i) appeals under the
"Disputes" clause of this contract or (ii) litigation
or the settlement of claims arising out of the per-
formance of this contract, shall be retained until
such appeals, litigation, or claims have been dis-
posed of.
(d) (1) The Contractor shall insert the substance
of this clause, including the whole of this paragraph
(d), in each subcontract hereunder that is not on
a firm fixed-price basis.
(2) The Contractor shall insert the substance of
the following clause in each firm fixed-price sub-
contract hereunder in excess of $100,000, except
those subcontracts covered by subparagraph (3)
below.
Audit
(a) For purposes of verifying that cost or pricing
data submitted in conjunction with the negotiation
of this contract or any contract change or other
modification involving an amount in excess of
$100,000 are accurate, complete, and current, the
Contracting Officer, or his authorized representa-
tives, shall?until the expiration of three years from
the date of final payment under this contract?have
the right to examine those books, records, docu-
ments, and other supporting data which will permit
adequate evaluation of the cost or pricing data sub-
mitted, along with the computations and projec-
tions used therein, which were available to the Con-
tractor as of the date of execution of the Contrac-
tor's Certificate of Current Cost or Pricing Data.
(b) The Contractor agrees to insert the substance
of this clause including this paragraph (b) in all
FP or PR
1 Feb. 63
23
B00697R00160004)001-4
subcontracts hereunder in excess of $100,000, unless
the price is based on adequate price competition,
established catalog or market prices of commercial
items sold in substantial quantities to the general
public, or prices set by law or regulation.
(3) The Contractor shall insert the substance of
the following clause in each firm fixed-price sub-
contract hereunder in excess of $100,000 where the
price is based on adequate price competition, estab-
lished catalog or market prices of commercial items
sold in substantial quantities to the general public,
or prices set by law or regulation.
Audit?Price Adustments
(a) This clause shall become operative only with
respect to any change or other modification made
pursuant to one or more provisions of this contract
which involves a price adjustment in excess of
$100,000, unless the price adjustment is based on
adequate price competition, established catalog or
market prices of commercial items sold in substan-
tial quantities to the general public, or prices set
by law or regulation.
(b) For purposes of verifying that any cost or
pricing data submitted in conjunction with a con-
tract change or other modification involving an
amount in excess of $100,000 are adequate, complete,
and current, the Contracting Officer, or his author-
ized representatives, shall?until the expiration of
three years from the date of final payment under
this contract?have the right to examine those
books, records, documents and other supporting
data which will permit adequate evaluation of the
cost or pricing data submitted, along with the com-
putations and projections used therein, which were
available to the Contractor as of the date of execu-
tion of the Contractor's Certificate of Current Cost
or Pricing Data.
(c) The Contractor agrees to insert the substance
of this clause including this paragraph (c) in all
subcontracts hereunder in excess of $100,000 unless
the price is based on adequate price competition,
established catalog or market prices of commercial
items sold in substantial quantities to the general
public, or prices set by law or regulation.
44. PRICE REDUCTION FOR DEFECTIVE COST
- OR PRICING DATA (ASPR 7-104.29) (Nov. 1962)
The following clause shall apply to all contracts
where the contractor has furnished a Certificate
of Current Cost or Pricing Data.
(a) If the Contracting Officer determines that
any price, including profit or fee, negotiated in
connection with this contract was increased by any
significant sums because the Contractor, or any
subcontractor in connection with a subcontract
covered by (c) below, furnished incomplete or in-
accurate cost or pricing data or data not current
as certified in the Contractor's Certificate of Cur-
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rent cost or APpilgvHdtkothEielgtneRZW9A14: CifiriMilt1PARTFP9r1#99Xffeldneate of Cur-
,reduced accordingly and the contract shall be mod-
ified in writing to reflect such adjustment.
? '(b) Failure to agree on a reduction shall be a
_ dispute concerning a question of fact within the
meaning of the "Disputes" clause of this contract.
(c) The Contractor agrees to insert the substance
of paragraphs (a) and (c) of this clause in each
,of his cost-reimbursement type, price redetermi-
nable, or incentive subcontracts hereunder, and in
any other subcontract hereunder in excess of
$100,000 unless the price is based on adequate price
competition, established catalog or market prices
of commeraial items sold in substantial quantities
to the general public, or prices set by law or regu-
lation. In each such excepted subcontract here-
under which exceeds $100,000, the Contractor shall
insert the substance of the following clause.
Price Reduction for Defective Cost or
Pricing Data?Price Adjustments
(a) This clause shall become operative only with
respect to any change or other modification made
pir ,nt to one or more provisions of this contract
whNuot involves a price adjustment in excess of
$100,000. The right to price reduction under this
clause shall be limited to such price adjustments.
(b) If the Contractor determines that any price,
including profit or fee, negotiated in connection
with any price adjustment under this contract was
Increased by any significant sums because the sub-
contractor or any of his subcontractors in connec-
tion with a subcontract covered by paragraph (c)
below, furnished incomplete or inaccurate cost or
pricing data or data not current as of the date of
execution of the subcontractor's certificate of cur-
rent cost or pricing data, then such price shall be
reduced accordingly and the subcontract shall be
modified in writing to reflect such adjustment.
(c) The subcontractor agrees to insert the sub-
stance of this clause in each subcontract hereunder
which exceeds $100,000.
45. ,,CE REDUCTION FOR DEFECTIVE COST
On PRICING DATA?PRICE ADJUSTMENTS
(ASPR 7-104.29) (Nov. 1962)
(a) This clause shall become operative only with
respect to any change or other modification made
pursuant to one or more provisions of this contract
which involves a price adjustment in excess of
$100,000. The right to price reduction under this
clause shall be limited to such price adjustments.
(b) If the Contracting Officer determines that
any price, including profit, or fee, negotiated in
connection with any price adjustment under this
contract was increased by any significant sums be-
cause the Contractor or any subcontractor in con-
nection with a subcontract covered by paragraph
(d) below, furnished incomplete or inaccurate cost
or pricing data or data not current as of the date
Flp or PR
1 Feb. 63
rent Cost or Pricing Data, then such price shall be
reduced accordingly and the contract shall be mod-
ified in writing to reflect such adjustment.
(c) Failure to agree on a reduction shall be a
dispute concerning a question of fact within the
meaning of the "Disputes" clause of this contract.
(d) The Contractor agrees to insert the substance
of paragraphs (a), (b), and (d) of this clause in
each subcontract hereunder that exceeds $100,000.
[Rev. No. 3, 1/31/61; Rev. No. 12, 11/26/62.]
46. AUDIT ?PRICE ADJUSTMENTS
(ASPR 7-104.41) (Nov. 1962)
(a) This clause shall become operative only with
respect to any change or other modification made
pursuant to one or more provisions of this con-
tract which involves a price adjustment in excess
of $100,000, unless the price adjustment is based
on adequate price competition, established catalog
or market prices of commercial items sold in sub-
stantial quantities to the general public, or prices
set by law or regulation.
(b) For purposes of verifying that cost or pric-
ing data submitted in conjunction with a contract
change or other modification involving an amount
in excess of $100,000 are accurate, complete, and
current, the Contracting Officer, the Comptroller
General of the United States, or any authorized rep-
resentatives, shall?until the expiration of three
years from the date of final payment under this
contract?have the right to examine those books,
records, documents and other supporting data
which will permit adequate evaluation of the cost
or pricing data submitted, along with the compu-
tations and projections used therein, which were
available to the Contractor as of the date of execu-
tion of the Contractor's Certificate of Current Cost
or Pricing Data.
(c) The Contractor agrees to insert the substance
of this clause including this paragraph (c) in all
subcontracts hereunder in excess of $100,000 unless
the price is based on adequate price competition,
established catalog or market prices of commercial
items sold in substantial quantities to the general
public, or prices set by law or regulation.
47. INSPECTION AND AUDIT (AFPI 7-4023)
(July 1948)
(a) The Contractor agrees that its books and
records and its plants, or such part thereOf as may
be engaged in the performance of this contract,
shall at all reasonable times be subject to inspec-
tion and audit by any authorized representative of
the Contracting Officer.
(b) The Contractor shall cause a like provision
to be included in all subcontracts hereunder.
48. ALTERATIONS IN CONTRACT (ASPR 7405.1)
The following alterations have been made in the
provisions of this contract:
24
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20. EXAMIXATION OF RECORDS
The following clause will be applicable in all negotiated fixed-
price supply contracts and purchase nrders in excess of $1,000.
EXAMINATION OF RECORDS
. (a) The Contractor agrees that the Contracting Officer or any
of his duly authorized representatives shall, until the expiration
of three years after final payment under this contract, have access
to and the right to examine any directly pertinent books, documents,
papers and records of the Contractor involving transactions related
to this contract.
(b) The Contractor further agrees to include in all his sub-
contracts hereunder a provision to the effect that the subcontractnr
agrees that the Contracting Officer o? 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 subcon-
tract. The term "subcontract" as used in this clause excludes (i)
purclInsa orders not exceeding $1,000 and (ii) subcontracts or pur-
chase orders for public utility services at rates established for
uniform applicability to the general public.
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25X1A
25X1A
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p'
91W -
oak-o644-68
c3,67-5-97
25X1A
Rosslyn Station
Arlington, Virginia 22209
February 21* 1968 7
,
4
1.=
1 7 I
1. Purpose of Audit. Per our previous discussions, we have
performed a complete analysis on fixed-price spare ca contract Nos.
O-CT-551 and 1F-CT-695 for :fiscal years 1963 thru 1?4,0, to determine the
reasonableness of the priced spare parts lists.
2. Scope of &Oita The audit was performed in accordance with
generally acceptea auditing standards, and accordingly included such tests
and procedures as were considered necessary in the circumstances, Our
analysis included the following:
a. A verification that the final negotiated pricing formulas
were used In pricing the spares;
b. A calculation of the resulting profit earned, and an
investlgation of the causes for any unreasonably high profit.
esults of Audit. As detailed in Exhibit A, the audit review
)fit 1.Alich was due mainly to the inclusion of a non-
ggetor and to errors in costing and pricing. A summary
vat axe as follows:
1*U Price
Thaurratt 0-ort
Booked "'tont
Leas: adjulpt.torpatia
Adjusted hvat
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if, -
25X1A
25X1A
25X1A
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or
Booked
Less: adjustments
Adjusted Profit
4. The results of review were discussed with the contractor's
representatives. The contractor has indicated a general willingness to
accept the adjustments mentioned under reference notes a thru d of Exhibit
A. This would mount to $52,272. At the present time they are refusing 25X1A
to refund any of the amount recovered by use of the We consider
a minim refund to be in the area of $103,000 which would reduce the over-
all realized profit t Any settlement betwcon $100,000 and25X1A
064,000 would be considered reaonab1e by this office.
5. Special Comment. It is strongly recommended that all contract
negotiator's be alerted to the dangers of negotiatinc factors which in
reality do not exist in the contractor's accounting system. Such procedures
are subject to outside criticism and should be avoided in the future.
25X1A
IMMili
DCAA Representative - APL
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25X1A
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DEFENSE CONTRACT AUDIT AGENCY
CAMERON STATION
ALEXANDRIA, VIRGINIA 22314
SUBJECT:
TO : Contracting Officer
OSA-1067-68
A-68-27-175
25X1A
Rosslyn Station
Arlington, Virginia 22209
March 25, 1968
FL& : Audit Report 03-67-5-97 dated February 21, 1968
1. Based on the mutually acceptable ground-rules discussed in
advance with the Contracting Officer, this office concluded negotiations
with the subject corporation on March 8, 1968.
2. As a result of our discussions, the contractor has agreed
to refund S90,000 of what we consider to be excess profits on the Call
Contracts mentioned above.
3. You will note that we have accepted $10,000 less than our
minimum refund recommended in the referenced audit report. This action
was taken since:
a. The contractor proved extremely reluctant to refund
any amount that had already been reported as profits and was based on a
fixed billing formula established in the contract.
b. An analysis of all agency contracts prepared by the
contractor indicated that they have realized an overal] pre tax profit of
On the initial CPFF development contract the pre tax profit was
of total cost.
25X1A
c. The resulting a.ativaIed profit of on the two contr 1A
in question is in line with the IIIIIIrecommended in our initial audit ra.
(See calculation attached to this memorandum.)
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25X1A
25X1A
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"ABF.
-2-
4, Based on our audit review we recommend that the two contracts
referenced above be closed for fiscaJ years 1963 thru 1967 for a total amount
of
DCAA Representative APL
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25X1A
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ft.w
Dear Dave:
March 8, 1968
VSH-M-1829
Subject: Spares Proposal - Fiscal Years
1963 through 1968
Contracts 0-CT-551 and HF-CT-695
After careful consideration of Auditor's Report and our own evaluation
of our costing and pricing of spares provided during the fiscal years
ended 1963 through 1967, and to be provided during fiscal 1968 and
subsequent years under the subject contracts, we propose the following:
1. A voluntary refund of $90,000 provided that the fiscal
years ended 1963 through 1967 under the subject contracts
will be closed without further claim by either party.
2. The issuance of amendments to Contracts 551 and 695:
a. Which will definitize that the spares pricing for
the fiscal year ended June 30, 1967 will be based
on the same formula and at the same rates as for
fiscal year ended June 30, 1966. In consideration
for voluntary refund there will be no adjustment in
production request prices previously approved by
Contracting Officer.
b. Which will definitize the pricing formula for fiscal
year ending June 30, 1968 and for subsequent years
as follows:
(1)
Extend estimated labor hours at current
labor and overhead quoting rates'.,
(2)
,-(2) Estimated material and other non-labor.
Pitzt-44) to-1F
6,1(
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Dave
-2- March 8, 1968
(3)
(4)
(
rh
Apply current G & A quoting rater to
total of (1) and (2).
Apply AK: of total cost of (1), (2),
(3) as profit factor.
the
and
Please promptly consider the above proposal and provide us with your
written acknowledgment and/or comments at your earliest convenience.
Upon receipt of your written acceptance of (1) and (2) above, we will
submit a credit memo, or a check for $90,000.
If you have any questions, please call me
vsh
r,
Regards,
Gus
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25X1 A
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Dear Gus:
OSA-0931-68
12. March 1968
Subject: Your Ltr. VSR-M-1829 dated /8/68
Contracts 0-CT-151 and HP-CT-695
1. Negotiations between your Company and the Government,
concluded on 8 March 1968, resulted in a mutual agreement
'hereby you agreed to refund and the Government agreed to accept
a voluntary refund of $90,000 to provide for the closing of
fiscal years 1963 through 1967 under subject contracts.
2. That agreement is hereby ratified. Said fiscal years
will be closed out without further claim for those years. We
agree that the spares pricing for the fiscal year ended June 30,
1967 will be based on the same formula and at the same rates as
for the fiscal year ended June 30, 1966, without adjustment.
3. / prefer to keep the prof
and, as I remarked during our rec
25X1A I consider the proposed factor of
this, I do agree to a pricing formula
in referent letter, with the modifica
actor a negotiated one
lephonic communication,
excessive. Aside from
substantially as proposed
ions shown below:
a. "Rates' shall be subject to audit recommendations
and possible negotiations thereof.
b. Profit factor is to be negotiated.
4. /f you are in agreement, please 'submit your check for
$90,000, payable to the U.S. Government. Upon receipt of same,
negotiations will be arranged promptly to definitize the fiscal
year rate structures for 1967 and 1968.
Regards
Dave
-
Dave
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OXC-0842-69
Copy j_ of 5
Contract No. O-CT-551
Amendment No. 19
15 DEC 1969
The Perkin-Elmer Corporation
Main Avenue
Norwalk, Connecticut
Gentlemen:
1. Reference is made to Contract No. O-CT-551 effective
for the period 11 June 1963 through 30 June 1968.
25X1A
2. Pursuant to mutual agreeient between the parties
25X1A hereto, a final consideration of for performance
of this contract has been agreed upon.
Ip
25X1A 3. The above results in a net decrease of
or a net funded final consideration of All
other terms and conditions of Contract No. 0-CT-Sb!, as
amended, remain unchanged.
4. Please indicate your receipt of this Amendment No. 19
to Contract O-CT-551, and your acceptance thereof by executing
the original and two copies of this amendment. Return the
fully executed original and one copy to the undersigned and
retain the remaining copy for your files.
25X1A
25X1A
BY
TITLE
DATE
Very truly yours,
THE UNITED STATES OF AMERICA
on rac-
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25X1A
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? Approved For ReleasP4001/04/
qmo g
UNIT ;
Err
3 : aterilfdibbafkrtA600
ROUTING
SECRET
9
10
11
DATE:
4
12
5
13
TZ
14
7
13
? FROM
14
DEFERRED
PRIORITY
?CONF:
OPfERATIONAL
1?111111At
INFO'
ROUTINE
GRIEDIATE
TO
25X1A
INFO CITE
SECRET PAGE 2.
3 YOUR COMPANY S LEIrTER. DATER MARCH 8 1968 SIGNED
(V8H=M4829) STATES IN PART AS FOLLOWS:
(A) "A VOLUNTARY REFUND OF $90, 090 00 PROVIDED THAT THE
FISCAL YEARS ENDED 1963 THROUGH 1967 UNDER THE SUBJECT CONTRACTS
75---a
25X1A
WILL BE CLOSED WITHOUT FOXE= CLAIM BY EITHER PARTY,"
AMEOWTS TO CONTRACTS 551 AND 695:
Eli/NITIZE THAT THE SPARES PRICING
"THE sspikAcE
PREVIOUSLY APPROVED BY _THE CONTRACTING OFFICER . "
(UNDERSCORING ADDED).
COORDINATING OFFICERS
awe 1
&on
RELEASING OFFICER SECRET ] desk.minewism
? AUTHENTICATING OFFICE
gaelnded gesseist4e
duormepealarq aid
REPROOPLICTIOB BY OTHER THAN THE ISSUING OFFICE IS PROHIBITER Gm b,
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25X1A
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'7:7":?._ ? '
25X1A
25X1A
25X1A
25X1A
iro
-; F50/4 s
COW:
INFO:
ApprOved For Fe!ar 2001/04123
*
TO
SECRET
ROUTING
9
10
11
NO
SECRET PAGE 4
6. SINCE ALL ORDERS WERE. PLACED BY 30 JUNE 1967 AND NEGOTIATIONS
WERE CONDUCTED ON 8 MARCH 19682 IT IS FELT' TEAT YOUR COMPANY TOOK -
INTO ACCOUNT THE ACTUAL AND PROJECTED COSTS .OF ALL FY-67 ORDERS,
FURTHERMORE, OUR RECORDS DISCLOSE THAT TKE:.BOLK or THE ITEMS WERE
DELIVERED BY THE FJ4D OF CY,1967:UNDER BOTH CONTRACTS rmrrtgm'
SUBSTANTIATING THAT YOUR CONPANY KNEW THE p** OF THIIACTUAL ,,c9s4p.
_ . ,-,,. ? 47- ?
CITE
AT THE TIME OF NEGOTIATING,
7. THE UNDERSCORED PORTIO" QUOTED INtAtA 34i3thiri Imitems
,
- . ?
THAT REPRICING WAS NOT NECESSARY ON EXISTING PRICED PR'S; THEREFORE,
WE FEEL ONE COULD NOT SUBTRACT INVOICED AMOUNTS 021 4SRE & JULY 67
FROM TOTAL PRICED EXHIBIT AMOUNTS AND CONTEND THE BALANCE , WAR WE.
8. IN VIEW OF TEE FACTS CITED ABOVE AND A RE-ancsic wits A
PARTY TO THE NEGOTIATION, WE FEEL OUR AMENDMENTS REPRESENT Tim
AGREEMENT OF MARCH 8, 1968. THEREFORE, WE ARE RETURNING THE
AMENDMENTS FOR ACCEPTANCE BY YOUR COMPANY.
COORDINATING OFFICERS
C CMD OSA
RELEASING OFFICER
RF:FFOSWIMN ,VIWP THESfl11 PRO-MUTED.
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SECRET
GROW I
etmetteiNd foe= araeastki
aimerottell 001
deekestSisiolea
ah.
25X1A
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Approved For Release 200164/23 : CIA-RDP711300697R0016000701101-4
8 July 1970
. MEMORANDUM FOR THE RECORD:
25X1A SUBJECT:
1. Management of the PE Contracts by the undersigned
commenced in March 1968. At that time I was made aware that
an audit had revealed that the Contractor had realized
unearned profits for several years as a result of the use of
a pricing formula carrying a separate factor for packing when,
in fact, a separate packing unit was not utilized by the Con-
'actor. Specific details are reflected in the audit report.
2. The matter of recoupment was discussed by me with
the Contracting Officer and frie Chief, Industrial Audit Division.
It was agreed that negotiation with the Contractor would be held
at Norwalk, Connecticut in conjunction with the negotiation of 25X1A
a contract by the Office of Special Projects.
then Deputy Chief, of the Industrial Audit Division, represented
the Government. It was agreed that it would not be necessary
for the undersigned to be present, partly because there was no
controversy over the facts and, to a lesser degree, because special
clearances were required which were not held by the undersigned.
It was the general understanding that the negotiation was to
achieve settlement and finialization of claims through the
Government's fiscal year 1966. At that time I had not negotiated
a pricing formula for FY-67, but intended to do so later, using
-he unearned profits negotiation as a guide. When the rough
mmoraft audit report of the negotiations was submitted, however,
it reflected that FY-67 was also used asabssforalump sum
25X1A settlement. I discussed this witi who also
expressed some concern over inclusionof FY-67 in the settlement.
25X1A Subsequent discussion with verified FY-67 coverage.
He stated that an impasse had been reached and that the Contractor
then proposed final settlement, to include repayment to the
Government of $90,000.00,"if you'll throw in FY-67."
25X1A
25X1A
3. My memory is not entirely clear as to the details of the
discussion vis-a-vis application of the negotiation
to final settlement for FY-67. The Contractor had not submitted
a final claim as of that time period. However, I do recall that
shortly thereafter the subject was discussed by me with the Con-
tractor who stated that only the pricing formula
for FY-67 was agreed to and not a final figure for FY-67.
He subsequently sent a letter which was understood by me to reflect
the Contractor's position that, in so far as FY-67 was concerned,
the agreement reached during the negotiations was that the same
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pricing formula would be used for FY-67 as was proposed for FY-66
25X1A- (even though said formula contained the objectionable factor for
packing). I was advised by at that time, that
25X1A invoicing was not completed for FY-67. It might be noted that
did not attend the negotiations in question, as I recall.
25X1A
4. The Contractor's letter regarding the FY-67 pricing
formula was reviewed with
ho stated that the pricing
formula for FY-67 was correctly shown. To my knowledge there
were no subsequent discussions of the negotiated agreement relative to
its application to the FY-67 contract
25X1A
astribution:
Orig - C/CMS/OSA/DDS&T
SC&PB/OEL/DDS&T
p.
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25X1 A
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THE PERKIN-ELMER CORPORATION
ROBERT H. SORENSEN SENIOR VICE PRESIDENT, OPTICAL GROUP
Dear
Subject: Contracts HF-CT-695 and O-CT-551
Voluntary Refund
NORWALK, CONNECTICUT, U.S.A.
August 20, 1970
The object of this letter is to record the intent of Perkin-Elmer
in agreeing to the voluntary refund of $90,000 relating to the subject
spares contracts. I was the principal for our company in the discussions
of March 8, 1968, leading to our agreement to make that refund; there-
fore, I feel that I can express a clear understanding of the intent of the
"Jarties. My further object in writing is to request prompt resolution
'"'""and disposition of this matter.
Following an audit of the costs and application of the contract
pricing formula for the "calls' for FY '63 through FY '66 and settlement
of the basis for computing G&A, I agreed to a voluntary refund of $90,000.
Since the FY '67 pricing formula had not yet been definitized at that time,
we agreed that priced production lists already signed by both parties
would stand without change, and that unpriced lists would be priced using
the FY '66 formula and rates. At no time did we agree to a total dollar
value for the spares for FY '63 through FY '67, but assumed that the
method and provision for pricing FY '67 spares would thus result in a
mutually agreeable total for FY '67, which would provide a profit per-
centage for that year not at significant variance with the percentage nego-
tiated for FY '63 through FY '66.
The simple question that apparently has now come to light
and remains open is: Did the refund of $90,000 close out the contracts
through FY '67, or did the remaining unpriced orders at the time require
pricing, incorporation into the contract, and payment following delivery
of the spares? My intent was clearly that the $90,000, voluntary refund
did not close out the contract and I believe our subsequent actions support
that fact. If I had intended to refund more than $90,000, I would not have
allowed my people to issue the refund prior to advising me what financial
impact the unpriced orders, then in the house, would have. Certainly
it would be imprudent on my part to enter into such an open-ended agree-
ment and expose the corporation to unknown after-the-fact cost liability.
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PRECONTRACT APPROVAL RECORD
(PART TWO)
CONTRAC
Perkin-Elmer Corporation
The services and equipment being procured by this Contract No.
HF?CT-695, Int. only are in furtherance of the IDEALIST
Program(s), the nature of which cannot be publicly disclosed for security rea-
sons. The Contracting Officer therefore determines that this procurement must
be accomplished by negotiations pursuant to the authority of Section 3(a) of
PL 81-110 and Class Determination and Finding, OXC 2122, signed by the DDCI on
15 October 1961.
Certification of funds for this contract will be handled under the pro-
cedure approved by the Director of Central Intelligence on 15 December 1956
which, in effect, results in all covert expenses involving issuance of Treasury
Checks being accumulated in a separate account within the Finance Division. The
amounts in this account will be periodically scheduled for certification of the
vouchers by the Director. This procedure eliminates the necessity for a sepa-
rate certification of authority under Section 8(h) of Public Law 110, 81st Con-
gress (formerly 10(b) - see 85-507 dated 7/7/58) for each contract.
The following comments describe the procurement hereby effected, the
terms and provisions generally of this contract/amendment, and a resume of
major issues negotiated:
1. Amendment No. 46 dated 30 December 1969 was sent to the
Contractor for signature. This amendment reflected the final
price for the total contract. The Contractor by letter dated
March 12, 1970 returned the amendment unsigned. The Contractor
contended that the amendment was understated by $58,539.15. This
difference results from the March 8, 1968 settlement agreement.
(See Audit Report A-68-27-175 dated March 25, 1968 and the Con-
tractor's letter of March, 8, 1968, USH-M-1829). The auditor
contends the $90,000 refund received as a result of the March 8,
1968 meeting representing final settlement of the fiscal years
1963-1967; whereas, the Contractor contends that the $90,000
reflected only a refund for existing profit for those years and an
agreement of a pricing formula for FY-67. The spares for FY-67
still are to be priced and paid for.
2. This internal obligation is being made to cover the
Contractor's claim in the event the Contracting Officer does agree
with the Contractor's stand which was the subject of a meeting
held on 17 June 1967. Those in attendance were as follows;
POSTED
LEDGER
CONTVA
REGISTER
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11-63 2167a SECRE GROUP I
Excluded from automatic
downgrading and
declassification
( 12)
25X1A
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2
Arr./wad Fell^ PalAASe 2nni/nA/91 ? rhgrAligiRnnAci7p n
CON T
1401070001-4
PRECONTRIET APPROVAL RECORD
(PART TWO) Perkin-Elmer Corporation
The services and equipment being procured by this Contract No
HF?CT-695, Adt. #46 are in furtherance of the IDEALIST
Program(s), the nature of which cannot be publicly disclosed for security rea-
sons. The Contracting Officer therefore determines that this procurement must
be accomplished by negotiations pursuant to the authority of Section 3(a) of
PL 81-110 and Class Determination and Finding, OXC 2122, signed by the DDCI on
15 October 1961.
Certification of funds for this contract will be handled under the pro-
cedure approved by the Director of Central Intelligence on 15 December 1956
which, in effect, results in all covert expenses involving issuance of Treasury
Checks being accumulated in a separate account within the Finance Division. The
amounts in this account will be periodically scheduled for certification of the
vouchers by the Director. This procedure eliminates the necessity for a sepa-
rate certification of authority under Section 8(h) of Public Law 110, 81st Con-
gress (formerly 10(b) - see 85-507 dated 7/7/58) for each contract.
The following comments describe the procurement hereby effected, the
terms and provisions generally of this contract/amendment, and a resume of
major issues negotiated:
1. Contract No. HF-CT-695 provides for spare parts and
support items for equipment supplied by P&E in connection with
the IDEALIST and DRAGONLADY Programs.
2. This Amendment provides for the final price for the
FY-68 period and the period 1 July 1962 through 30 June 1967.
3. FY periods from inception through 30 June 1962 had
been finalized in prior amendments. The FY-63 through FY-67
period had been negotiated in March 8, 1968, but never reflected
in the contract. This latter period had been settled in con-
junction with another contract No. O-CT-551 and a $90,000.00
refund for the two contracts had been realized. This was
prorated as follows:
O-CT-551 $71,826.00
HF-CT-695 18,174.00
$90,000.00
25X1A
This refund then reflected an overall on the two
contracts for the FY-63 - 67 period.
4. The Contractors claim for FY-68 and settlement was as
follows:
14_4
,,,pRrovcd For Rclwec 200 /04/23 : CIA RDP71B00697R001600070001 1
doww.c,?,
H.63 2167a SECRETGROUPE,cIdod fro,,
(12)
25X1A
25X1A
3
Approved For Release 2001/04/23 : CIA-RDP711300697R001600070001-4
.4?? 441#11,
6. The FY-70 spares contract provides for negotiation
of a fixed price or FP Incentive type of contract within 60
days after the end of FY-70 when all orders for spares have
been placed. This contract PE-4804-CT contemplates a
profit whereas the company in the past had beenlusing a M,
profit factor.
7. The Depot by 1525 dated 23 Aug. 1969 certifies
that all production lists have been completed.
8. The liquidation of funds has been based on BFD/OSA
records as the Audit Reports did not give information by
Customer. The Contractor claimed by Customer and by FY so
it is felt that this method of liquidation reasonably reflects
the refund to each Customer.
9. Upon receipt of the following and payment of the
final invoice, this contract can be considered complete.
a. Patent Statement
b. Property Statement
c. Signed Amendment
d. Final Invoice
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25X1A
25X1A
25X1A
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
Apprtwari FrIrRalc,1;411001/01/23 ? CIAEa6300607R00040070001-4
PRECONTRACT APPROVAL RECORD
(PART TWO)
The services and equipment being procured by this Contract No.
are in furtherance of the
Program(s), the nature of which cannot be publicly disclosed for security rea-
sons. The Contracting Officer therefore determines that this procurement must
be accomplished by negotiations pursuant to the authority of Section 3(a) of
PL 81-110 and Class Determination and Finding, OXC 2122, signed by the DDCI on
15 October 1961.
Certification of funds for this contract will be handled under the pro-
cedure approved by the Director of Central Intelligence on 15 December 1956
which, in effect, results in all covert expenses involving issuance of Treasury
Checks being accumulated in a separate account within the Finance Division. The
amounts in this account will be periodically scheduled for certification of the
vouchers by the Director. This procedure eliminates the necessity for a sepa-
rate certification of authority under Section 8(h) of Public Law 110, 81st Con-
gress (formerly 10(b) - see 85-507 dated 7/7/58) for each contract.
The following comments describe the procurement hereby effected, the
terms and provisions generally of this contract/amendment, and a resume of
major issues negotiated:
Contract No. HF-CT-695 provides for spare parts and support
items for equipment supplied by P&E in connection with the IDEALIST
and DRAGONLADY Programs.
This Amendment No. 45 incorporates a pricing formula for the
period 1 August 1967 through 30 June 1968. There is no change in the
funding status.
This Contractor was selected as a sole source due to the unique
quality of the spare parts, mod kits and supplies which are furnished
hereunder. The equipment and supplies have undergone several generations
of changes, such changes involving inventions resulting in a sophistication
of equipment which could not be duplicated elsewhere without encountering
untold expense and a great loss of time in attempting to duplicate.
Approved For Release 2001/04/23 CIA-R111D71R0097R001 Annn7nnni_a
FORM
,.?2167a SECRET
GROUP1
B.ludedfromoOorn
dovenrcinand
dedaMi
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Approved For Release 2QQ01/04/23 : CInS1B00697R001600040001-4
CS1-441LISL
Date '2_2ct 120
MEMORANDUM FOR THE RECORD
SUBJECT: Concurrence in Amendment No. 45 to HF-CT-695 with
The Perkin-Elmer Corporation.
The undersigned has reviewed the subject contract or amendment and
finds that the Scope of Work included therein is In accordance with the
requirements levied on the Project IDEALIST procurement system by the
Department of the Air Force,
25X1 A
Lt. Col. USAP
11 DEC 1968
Approved For Release 2001/04123 : CIA-RDP71600697R001600070001-4
Approved For Release4901/04/23 : CIA-RDP71600697R00160W0001-4
22 May 1968
MEMORANDUM FOR THE RECORD
SUBJECT: Concurrence in Amendment No. 441,to HF-CT-695 with
The Perkin-Elmer Corporation.
The undersigned has reviewed the subject contract or
amendment and finds that the scope of work included therein
is in accordance with the requirements levied on the Project
IDEALIST procurement system by the Department of the Air Force.
25X1 A
9NEL USAF
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
- Approved For Release/101/04/23 : CIA-RDP711300697R00160610001-4
7 MAY 1%8
MIVCRATaUM V)P, TaF_
SUBJECT Concurrence in Amendment No. 4 to Contract No. 11F-CT-695
With The Perkin-Elmer Corporation, Norwalk, Connecticut.
7
Tho urVeyigued ha$4, ..:.vve,wed the sublect col.ract
amerdm?nt and. fittla ChPt i2:11e scope of work incluld O'w1-(7
Is in a6cord,Ince with t=t;.rluirevocilits levi0 Nc,-J(:1
IDEALIST .pntretiV: syEt,em oy the Depart.rnt ?1;i1
25X1A
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25X1A
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
25X1 A
Arrroved ForRedeaV02001/01/23 ? rlhif6I1B00697R 0406700011
CONTRACT
PRECONTRACT APPROVAL RECORD
(PART TWO)
The services and equipment being procured by this Contract No.
HP-CT-695 are in furtherance of the IDEALIST 152R
Program(s), the nature of which cannot be publicly disclosed for security rea-
sons. The Contracting Officer therefore determines that this procurement must
be accomplished by negotiations pursuant to the authority of Section 3(a) of
PL 81-110 and Class Determination and Finding, OXC 2122, signed by the DDCI on
15 October 1961.
Certification of funds for this contract will be handled under the pro-
cedure approved by the Director of Central Intelligence on 15 December 1956
which, in effect, results in all covert expenses involving issuance of Treasury
Checks being accumulated in a separate account within the Finance Division. The
amounts in this account will be periodically scheduled for certification of the
vouchers by the Director. This procedure eliminates the necessity for a sepa-
rate certification of authority under Section 8(h) of Public Law 110, 81st Con-
gress (formerly 10(b) - see 85-507 dated 7/7/58) for each contract.
The following comments describe the procurement hereby effected, the
terms and provisions generally of this contract/amendment, and a resume of
major issues negotiated:
Contract HF-CT-695 provides for spare parts and support
items for equipment supplied by P&E in connection with the IDEALIST
and DRAGONLADY Programs.
j4q5rv?
This Amendment No. M deobligates $20,000 (8,000 IDEALIST/
12,000 DRAGONLADY) in FY-68 funding from the Common account (see
This reduction has been discussed with BPD/OSA and
with Warner Robbins.
Approved For Release 2001/04/23 ? CIA-RDP71B00697R001600070001-4
FORM 3
2I67a SECRET
GROUP 1
Excluded from automatic
downgrading and
declassification
( 12)
25X1A
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25X1A
A
ooroved For Releas1n001/04/73 CIAEMT7iRnnA97 ourr070001_4
PRECONTRACT APPROVAL RECORD
(PART TWO)
CONTRACT
The services and equipment being procured by this Contract Nogr-695
Amend. #43 are in furtherance of the IDEALIST U-2R
Program(s), the nature of which cannot be publicly disclosed for security rea-
sons. The Contracting Officer therefore determines that this procurement must
be accomplished by negotiations pursuant to the authority of Section 3(a) of
PL 81-110 and Class Determination and Finding, OXC 2122, signed by the DDCI on
15 October 1961.
Certification of funds for this contract will be handled under the pro-
cedure approved by the Director of Central Intelligence on 15 December 1956
which, in effect, results in all covert expenses involving issuance of Treasury
Checks being accumulated in a separate account within the Finance Division. The
amounts in this account will be periodically scheduled for certification of the
vouchers by the Director. This procedure eliminates the necessity for a sepa-
rate certification of authority under Section 8(b) of Public Law 110, 81st Con-
gress (formerly 10(b) - see 85-507 dated 7/7/58) for each contract.
The following comments describe the procurement hereby effected, the
terms and provisions generally of this contract/amendment, and a resume of
major issues negotiated:
This contract provides for spare parts and support items
for equipment supplied by P&E in connection with the Idealist,
U-2R and Dragonlady Programs.
Amendment No. 43 has been drawn to allocate additional
U-2R funds to the Contract under Customer No. 1 as recOmmended
by This increase of 815,000 is sufficient to carry the
contractthrough FY-68.
The remaining 15K under the T-35 Tracker line item and the
685K under Drift Sights will not be needed and may be reprogrammed.
Approved For RPIPaSP 7nm/um ? CIA-R111D71RMACI7P001600070001
FORM
11.632167a
SECRET
GROUP 1
Excluded horn automatic
downgrading and
declassification
Approved For Release*001/04/23 : CIA-RDP71B00697R00160140001-4
SECRET
3,7)
ABJECI: Concurrence in Amendment No. 42 to Contract No. HF-CT-695
with The Perkin-Elmer Corporation, Norwalk, Connecticut.
Thc niviersiged raviewo6 z,ft e? oi
ITC Ament ad finds tlat tht, scorw of work
Ln ccorJane wiCA. ;ria ruquixev&-ntF oc
IZAALIST rr c. c rsy.. by ChE r)eper7f2n.,,7 o!
25X1A
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
SECRET
25X1A
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
25X1A
25X1A
--41342E"P-d-Ear-a"lasea-4414"2"41"0436924N A
PRECONTRACT APPROVAL RECORD
(PART TWO)
The services and equipment being procured by this Contract No.
HF?CT-695 are in furtherance of the IDEALIST U2?R
Program(s), the nature of which cannot be publicly disclosed for security rea-
sons. The Contracting Officer therefore determines that this procurement must
be accomplished by negotiations pursuant to the authority of Section 3(a) of
PL 81-110 and Class Determination and Finding, OXC 2122, signed by the DDCI on
15 October 1961.
Certification of funds for this contract will be handled under the pro-
cedure approved by the Director of Central Intelligence on 15 December 1956
which, in effect, results in all covert expenses involving issuance of Treasury
Checks being accumulated in a separate account within the Finance Division. The
amounts in this account will be periodically scheduled for certification of the
vouchers by the Director. This procedure eliminates the necessity for a sepa-
rate certification of authority under Section 8(h) of Public Law 110, 81st Con-
gress (formerly 10(b) - see 85-507 dated 7/7/58) for each contract.
The following comments describe the procurement hereby effected, the
terms and provisions generally of this contract/amendment, and a resume of
major issues negotiated:
Contract No. HF-CT-695 covers spare parts and support items
for equipment supplied by P&E in connection with the IDEALIST and
RikPrograms. This Amendment No. 42 has been drawn to allocate
tional U-2R Funds to the contract under Customer No. 1 to enable
to order additional driftsights, driftsight spare parts and
T-35 Tracker spare parts for the Combat Shack Program.
Approved For RPIPaSP 2nniin4i23 ? CIA-PIIP71Rnn697R001600070141 1
SECRET
7M3 2I67a
GROUP I
Excluded from automatic
downgrading and
declassification
(12)
Approved For Relea40001/04/23 : CaggB00697R0016.070001-4
28 NOV '967
jELY Concurrence in Amendment No. 41 with Perkin-Elmer
Corporation, Contract No. HF-CT-695.
iThe
Uulis scop woCK.
In acc'ora',,.`"--,-..P
ELi.Tnx)c,.."..1"otwot .7)1
25X1A
?
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
SECRET
25X1A
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
25X1A
Approved For Re!eau/2001/04/23 : CIA4415P1B00697RO01awyc7nnn1-4
PREGONTRAft APPROVAL RECORD
(PART TWO)
CONTRACT
The services and equipment being procured by this Contract No
HF-CT-695 Am. #41 are in furtherance of the DiEALIST & FOG
Program(s), the nature of which cannot be publicly disclosed for security rea-
sons. The Contracting Officer therefore determines that this procurement must
be accomplished by negotiations pursuant to the authority of Section 3(a) of
PL 81-110 and Class Determination and Finding, OXC 2122, signed by the DDCI on
15 October 1961.
Certification of funds for this contract will be handled under the pro-
cedure approved by the Director of Central Intelligence on 15 December 1956
which, in effect, results in all covert expenses involving issuance of Treasury
Checks being accumulated in a separate account within the Finance Division. The
amounts in this account will be periodically scheduled for certification of the
vouchers by the Director. This procedure eliminates the necessity for a sepa-
rate certification of authority under Section 8(h) of Public Law 110, 81st Con-
gress (formerly 10(b) - see 85-507 dated 7/7/58) for each contract.
The following comments describe the procurement hereby effected, the
terms and provisions generally of this contract/amendment, and a resume of
major issues negotiated:
Contract No. HF-CT-695 covers spare parts and support
items for equipment supplied by P&E in connection with the
IDEALIST and FOG Programs. This Amendment No. 41 has been drawn
to obligate and adjust FY-67 funds in accordance with messages
attached.
Approved For Release 2001/04/23 : CIA-RDP711300697Ron1Ronn7nnn1-ti
FORM
11-63 2I67a SECRET
GROUPI
E.Wdedfromcrnsk
dvnwocEngoul
d.kmificaticm
(12)
25X1A
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
25X1A
rOtiv.?3-: AriraggVor Re lease,206/04/23 GIMPARRIBOOESS'Aiine 1 600
DATE
'
MFG. 5,87
"
0001-4 RcUTING
SECRET
-,roccarns.ormeas.cactarrsz.-=
TO 02F
25X1A SECRET 091833Z CITE
25X1
CITE
IDEAL I ST
REFER TO CONTRACT HF -CT 695 FOR FISCAL YEAR ENDED 30 JUNE 67.
TO CONFIRM OUR RECENT MEETING WE REQUIRE A REALLOCATION OF
FUND NG' AS FOLLOWS:
:..14,41,....3"..7p71.1.4ti,-,thU11,4,41,204loal.:240114,--7103,,
1
SECRET
a
0711F1S-art5V-91...till-
i8.20 1
..'2'..7.113',S5 IMICIA 11:57Y.'4.1.'
maul 0610102/111,417
/1:30 Midoriar,12111V2
REMO:CRON BY OTHER Rini ThE 15SINIII OFFICE V.3 PROHIBITED. COFY NO,
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
Ammo'
25X1A
Approved For Release 2094404/23 : CIA-RDP711300697R00160007.801-4
MEMORANDUM FOR THE RECORD
SUBJECT: Concurrence in Amendment No. 40 to Contract No. HF-CT-695
with Perkin-Elmer Corporation, Norwalk, Connecticut.
The undersigned has reviewed the subject contract or
amendment and finds that the scope of work included therein
is in accordance with the requirements levied on the Project
IDEALIST procurement system by the Department of the Air Force.
COLONEL USAF
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
25X1A
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
4ors,
25X1A
25X1A
Approved For Release 2410/04/23 ? CIA-R1g9RE60697R001 000,1001-4
PRECONTRACT APPROVAL RECORD
(PART TWO)
CONTRACT
The services and equipment being procured by this Contract No.
HF-CT-695 are in furtherance of the IDEALIST
Program(s), the nature of which cannot be publicly disclosed for security rea-
sons. The Contracting Officer therefore determines that this procurement must
be accomplished by negotiations pursuant to the authority of Section 3(a) of
PL 81-110 and Class Determination and Finding, OXC 2122, signed by the DDCI on
15 October 1961.
Certification of funds for this contract will be handled under the pro-
cedure approved by the Director of Central Intelligence on 15 December 1956
which, in effect, results in all covert expenses involving issuance of Treasury
Checks being accumulated in a separate account within the Finance Division. The
amounts in this account will be periodically scheduled for certification of the
vouchers by the Director. This procedure eliminates the necessity for a sepa-
rate certification of authority under Section 8(b) of Public Law 110, 81st Con-
gress (formerly 10(b) - see 85-507 dated 7/7/58) for each contract.
The following comments describe the procurement hereby effected, the
terms and provisions generally of this contract/amendment, and a resume of
major issues negotiated:
Contract No. HF-CT-695 covers spare parts and support items
for equipment supplied by P&E in connection with the IDEALIST and
FOG Programs. Amendment No. 40 has been drawn to establish a
Customer No. 1 account under the contract in the amount of $82,000
under may order glass and driftsights in accordance
with for the "Combat Shack" program.
! VV
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
7'6'3
2I67a SECRET
GROUP 1
Excluded from automatic
downgrading and
declassification
( 12)
p.
' Approved For Release 22P1/04/23 : CIA-
IOW
411roor.
AEMORANDUM FOR TIP: RECORD
?697R00160001.4 J&i 1967
29 JUN 1967
T.JBJECT: Concurrence in Amendment No. 39 to Contract No. HF-CT-695
with The Perkin-Elmer Corporation
It. dersigned has reviewed the subject contract or
lmendment and ands that the scope of work included thurein
is in accordance with the requirements ).evied on Lhe Project
iDEAUST procurement system by the Department of the Air Force.
25X1A
C L
IIIIIPIIIIII
Approved For Release 2001/04/23 : CIA-RDP71B00697R001600070001-4
SECRET
SECRET
Approved h::,r Release Pi/04/23 : CIA-RDtB0O7i 6O001-
A
PRECONTRACT APPROVAL
RECORD
(PART ONE)
CONTRACTOR
Perkin-Elmer Corporation
CONTROL NO.
OSA-2377-67
Copy! of 2
CONTRACT NO. AMENDMENT NO.
HF-CT-695 39
22 June 1967
THIS CONTRACT APPROVAL RECORD CONTAINS A RECOMMENDATION SUBMITTED FOR CONCURRENCE OF
THE UNDERSIGNED. CONCURRENCE IN THIS PRECONTRACT APPROVAL RECORD IS RECOMMENDED BY THE CON-
TRACTING OFFICER. BY CONCURRENCE, THE CHIEF, BUDGET AND FINANCE BRANCH, SIGNIFIES THAT SUFFICIENT
FUNDS ARE AVAILABLE (NOT INCLUDING CONTINGENT & EXPOSURE) AND/OR HAVE BEEN ADJUSTED AS PROVIDED
IN THIS DOCUMENT.
TYPE OF CONTRACT
REDETERM
CP I F
TEkM
CALL TYPE
? L.I.
? F.P.
111
N TECH REP
III DEFINITIZED
II FPIP
Il
M FISCAL YEAR
a
III F .P .
MI CPFF
FINANCIAL DATA
CONTRACT VALUE
114,000 FY-67
50,000 FY-68
PREVIOUS OBLIGATION - PRIOR FY
$ FY-67 and FY-68
stated only
PREVIOUS OBLIGATION - CURRENT FY-(,7
104,000
OBLIGATION BY THIS DOCUMENT
DESCRIPTION, PROGRAM OR LINE ITEM
FISCAL YEAR
PROJECT
AMOUNT
Cameras, Perkin-Elmer
-695)
19_67
IDEALIST
4,000
Spares, _Mod Kits (CL
prochatilionReleiiika01/04/23_,:__CIA-RDP7I-B0069-7R001-600070001
4
DRAGONLADY - HF-CT-695
1967
FOG
6 000
25X1A
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
Approved For Release 2001/04/23 : CIA-RDP71600697R001600070001-4
Approved Por Release 4).1/04/23 : CIA-RISI1g0697R0016001RoPtinn1-A.
CONTRACT
PRECONTRACT APPROVAL RECORD
(PART TWO)
The services and equipment being procured by this Contract No.
HF?CT-695 are in furtherance of the IDEALIST and FOG
Program(s), the nature of which cannot be publicly disclosed for security rea-
sons. The Contracting Officer therefore determines that this procurement must
be accomplished by negotiations pursuant to the authority of Section 3(a) of
PL 81-110 and Class Determination and Finding, OXC 2122, signed by the DDCI on
15 October 1961.
Certification of funds for this contract will be handled under the pro-
cedure approved by the Director of Central Intelligence on 15 December 1956
which, in effect, results in all covert expenses involving issuance of Treasury
Checks being accumulated in a separate account within the Finance Division. The
amounts in this account will be periodically scheduled for certification of the
vouchers by the Director. This procedure eliminates the necessity for a sepa-
rate certification of authority under Section 8(b) of Public Law 110, 81st Con-
gress (formerly 10(b) - see 85-507 dated 7/7/58) for each contract.
The following comments describe the procurement hereby effected, the
terms and provisions generally of this contract/amendment, and a resume of
major issues negotiated:
Contract No. HF-CT-695 covers spare parts and support
items for equipment supplied by P&E in connection with the IDEALIST
and FOG Programs. Amendment No. 39 has been drawn to extend the
term of the contract to 30 June 1968 to obligate additional FY-67
funds and to obligate FY-68 funds subject to availability.
Apr -caved For Release 2001404423 ? CIA ROP71-130069.744001600070001 4
FORM13.6 2I67a SECRET
Excluded from automatic
downgrading and
[
declassification
GROUP I
(12)
25X1A
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Next 2 Page(s) In Document Exempt
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Amor'
25X1A
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PRECONTRACT APPROVAL RECORD
(PART TWO)
CONTRACT
services and equipment being procured
Amend. ag are in furtherance of the
iiii.kh-ifygret No.
Program(s), the nature of which cannot be publicly disclosed for security rea-
sons. The Contracting Officer therefore determines that this procurement must
be accomplished by negotiations pursuant to the authority of Section 3(a) of
PL 81-110 and Class Determination and Finding, OKC 2122, signed by the DDCI on
15 October 1961.
Certification of funds for this contract will be handled under the pro-
cedure approved by the Director of Central Intelligence on 15 December 1956
which, in effect, results in all covert expenses involving issuance of Treasury
Checks being accumulated in a separate account within the Finance Division. The
amounts in this account will be periodically scheduled for certification of the
vouchers by the Director. This procedure eliminates the necessity for a sepa-
rate certification of authority under Section 8(h) of Public Law 110, 81st Con-
gress (formerly 10(b) - see 85-507 dated 7/7/58) for each contract.
The following comments describe the procurement hereby effected, the
terms and provisions generally of this contract/amendment, and a resume of
major issues negotiated:
Contract No. HF-CT-695 covers spare parts and support items
for equipment supplied by P&E in connection with the IDEALIST
and FOG Programs. Amendment No. 38 obligates additional"FY-67
IDEALIST and FOG Funds required for performance of the contract
through 30 June 1967. Obligation of DL Funds is authorized in
30 March 1967.
The following is a summary of FY-67 Fund obligations under the
contract by customers:
Common Customer
IDEALIST - 40%
DRAGONLADY - 60%
Customer No. 1
Customer No. 2
Total Allocation
836,000
54,000
14,000
0
8104,000
Appr-avad-Far RalanQA 9nniuniton ? CIA-RnP71ROOR97R001600070001-4
FORM2I67a
11-63
SECRET
Excludedfrornauvonlatil
downgrodingand
declassification
G11001
(12)
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SECRET
25 May 1967
MEMORANDUM FOR THE RECORD
SUBJECT: Concurrence with Amendment No. 38 to Contract HF-CT-695
with Perkin-Elmer Corporation
The undersigned has reviewed the subject contract or
amendment and finds that the scope of work included therein
is in accordance with the requirements levied on the Project
IDEALIST procurement system by the Department of the Air Force.
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? ,
MEMORANDUM FOR: Chief, Contracts Management Division, OSA
SUBJECT:
Contract No. IIF-CT-695
PERKIN-ELMER CORPORATION
OSA-2948 -70
12 November 1970
1. Our records indicate that subject contract was completed as of
1968 , and that final action was taken. 10 November 1970.
Following is a summary of cost:
Amount Obligated Amount Paid Balance
-0-
2. We are using this memorandum as a basis for closing this contract.
3. All deliveries and services have been completed.
Chief, Budget Finance Division
OSA-DD/S&T
Chief, Contracts Management Division,- OSA
Dist: Orig 1 -Addressee
1 -CMD/OSA (Urban)
1 -BUD/OSA (Budg-JCL)
1 -BUD/OSA (Contr Pmt)
1 - RB/OSA
RWE:k1b/BUD/OSA
------------
GROUP 1
Exottidad tram automatic
Onagrading and
SECRET O!.:tionWcation
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PERKIN-ELMER - HF-CT-695
List No.
Depot
Amount issue Date
Acceptance
By Contractor
Contractor
Exhibit Date
No. Days
Approval Date
Contracting Officer
Common
9,621.00 6 July 1966
516.00 27 July 1966
3,972.00 24 Aug. 1966
1,778.00 14 Oct. 1966
400.00 2 Nov. 1966
996.00 3 Nov. 1966
168.00 4 Nov. 1966
480.00 9 Nov. 1966
Customer No. 1
1,204.00 18 Nov. 1966
96.00 28 Nov. 1966
11,621.00 23 Nov. 1966
5,727.00 12 May 1967
15.00 11 Jan. 1967
83.00 7 Feb. 1967
Customer No. 1 ---
No Date
it ??
II It
,, ,,
II II
fy IT
II I
4 Jan. 1967
21 Feb. 1967
19 May 1967
19 May 1967
21 Feb. 1967
18 Oct.1966
18 Oct.1966
18 Oct.1966
22 May 1967
19 Jan. 1967
19 Jan. 1967
19 Jan. 1967
19 Jan. 1967
19 Jan. 1967
15 Mar. 1967
19 Apr. 1967
22 May 1967
22 May 1967
9 Mar. 1967
lo)-,-
83
45
218
77
76
75
70
60
135
146
10
130
28
8 Nov. 1966
8 Nov. 1966
8 Nov. 1966
11 June 1967
No Date
II II
TT II
24 Mar. 1967
26 Apr. 1967
1 June 1967
1 June 1967
20 Mar. 1967
,67-1
0
0
2
CD 3
(I;
4
co
co
5
03
1r: 6
7
o 8
"
C?1 9
?zr
lo
0
C?1
CD 11
12
13
u_
14
o. 15
0_
16
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List No.
Amount
Depot
Issue Date
Acceptance
By Contractor
Contractor
Exhibit Date
No. Days
Approval Date
Contracting Officer
Common
67-17
5,362.00
2 Feb. 1966
21 Feb. 1967
19 Apr. 1967
77
26 Apr. 1967
18
104.00
17 Mar. 1967
21 Feb. 1967
19 Apr. 1967
28
26 Apr. 1967
19
5,297.00
13 Feb. 1967
26 Apr. 1967
19 May 1967
96
1 June 1967
20
1,578.00
14 Feb. 1967
26 Apr. 1967
19 May 1967
95
1 June 1967
21
4,400.00
24 Feb. 1967
26 Apr. 1967
22 May 1967
90
1 June 1967
208.00
2 Mar. 1967
26 Apr. 1967
19 May 1967
77
1 June 1967
cr ) 23
600.00
9 Mar. 1967
26 Apr. 1967
19 May 1967
70
1 June 1967
CD
24
455.00
3 Apr. 1967
26 Apr. 1967
22 May 1967
39
1 June 1967
1r:
0- 25
176.00
11 Apr. 1967
26 Apr. 1967
22 May 1967
40
1 June 1967
26
192.00
13 Apr. 1967
26 Apr. 1967
22 May 1967
39
1 June 1967
27
140.00
12 May 1967
19 May 1967
22 May 1967
10
1 June 1967
C?1
0 28
4,299.28
19 May 1967
6 June 1967
24 July 1968
430
14 Aug. 1968
) 29
C?1
672.09
19 May 1967
6 June 1967
24 July 1968
430
14 Aug. 1968
30
10,822.27
No Date
29 June 1967
24 July 1968
14 Aug. 1968
ce 31
12,016.19
29 June 1967
24 July 1968
14 Aug. 1968
u_ 32
-o
11,845.10
It
29 June 1967
24 July 1968
14 Aug. 1968
33
58.06
9 June 1967
29 June 1967
24 July 1968
410
14 Aug. 1968
o.
o.
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List No.
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Depot Acceptance Contractor
Amount Issue Date By Contractor Exhibit Date No. Days
Approval Date
Contracting Officer
Common
67-34
16 June 1967
29 June 1967
24 July 1968
403
14 Aug. 1968
35
19 June 1967
29 June 1967
24 July 1968
400
14 Aug. 1968
Subtotal
stonier
3,991
67-9
No Date
No Date
15 Mar. 1967
24 Mar. 1967
16
27 January 1967
21 Feb. 1967
9 Mar. 1967
13
22 Mar. 1967
Subtotal
13
GRAND
TOTAT,S
4 004
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(Average days, 11)-i-)
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DEFENSE CONTRACTAUDITAGENCY
CAMERON STATION
ALEXANDRIA, VIRGINIA 22314
IN REPLY REFER TO
OSA-3341-69
NY-70-132-374
Rosslyn Station
Arlington, Virginia 22209
December 5, 1969
SUBJECT: Report on Evaluation of Proposed FY 68 Priced Exhibits
The Perkin-Elmer Corporation
Electro-Optical Division, Wilton, Conn.
Fixed Price Call Contract No. HF-CT-695
TO : Contracting Officer
25X1A
1. Purpose of Evaluation. As requested, an evaluation
was made of the contractor's proposed spare parts Priced Exhibit
Numbers 68-1 thru 68-22 in the total amount of
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2. Scope of Evaluation. Since all spare parts for Fiscal
Year 1968 have been completed and shipped, the evaluation was limited
to a comparison of incurred costs with proposed selling price, and a
verification of the proposed pricing formula with contractual terms.
3. Results of Evaluation. The results of evaluation, as
detailed in Exhibit A, are as follows:
Total Proposed Selling Price
Auditor's Recommended Selling Price
Incurred Cost
Recommended Selling Price
Recommended Adjustment
/)7A
NE.-$
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a. The proposed selling price would result in a profit
011111111of incurred cost, compared to the negotiated rate
01111111Ik the pricing formula. This significant under-run
is primarily due to an excessive estimate for labor hours
on Exhibit Numbers 12, 13, 16, and 17.
b. The recommended selling price represents actual
cost plus profit at the negotiated pricing formula rate of
4. Special Comments. Discussions were held with the
contractor in an attempt to resolve the recommended reductions of
$26,152 on the subject contract. In these discussions, the contractor
has suggested that Contract No. HF-CT-695 should be combined with two
other fixed price spare parts contracts in the determination of a
reasonable profit. The contractor's suggested basis for settlement
is detailed as follows:
Contract
No. Year*
4801 FY 69
695 FY 68
551 FY 68
Total
*Performance Period
In considering the contractor's proposal for an overall
settlement, it should be noted that a profit factor of 1111was included
in the contractor's originally proposed prices.
(7
I. ry r`Al (-0
_
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The settlement recommended by the auditor, assuming
that the basis suggested by the contractor is acceptable, is determined
as follows:
Total Incurred Costs (Contracts Nos. 4801, 695, 551)
Recommended Settlement
Proposed Settlement
Recommended Voluntary Refund
25X1A
5. Concluding Remarks. We will be pleased to furnish any
accounting counsel and any additional evaluation service which you may
require. The use of this report for other than the negotiation of the
subject proposal is not recommended without prior consultation with our
office.
DCAA Representative - APL
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EXHIBIT A
Page 2
Explanatory Notes.
1. Cost Accepted. The recommended acceptable cost
represents incurred cost.
2. Cost Questioned. Cost questioned represents the
difference between proposed cost and incurred cost. The significant
under-run is primarily due to excessive estimates for labor hours.
3. Profit. Profit is computed at the negotiated pricing
formula rate of
4. Total Selling Price. The total recommended selling
price represents actual cost plus profit at
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DATE 9-22-69
MEMORANDUM FOR-: Chief, Industrial Audit Division, OSA
SUBJECT: BEQUEST for AUDIT
CONTRACTOR:
Contract no.
Type of Contract:
Type of Audit Required:
Dollar Value of Contract:
Date Audit Required:,
NEGOTIATOR:
PERKIN-ELMER
HE-CT-695
F.P./call-type
Price Analysis
NMI
ASAP
CND 0 A
Date .43)._//(09
MEMORANDUM FOR: Contracts Management Division, OSA
? Audit Scheduled For:
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Perkin-Elmer Corporation
Main Avenue
Norwalk, Connecticut
Gentlemen:
OSA-2220-70
CopyLof 7
Contract No. HF-CT-695
Amendment No. 46
15 SEP 1970
1. This document constitutes Amendment No. 46 to Contract
No. HF-CT-695 between the Perkin-Elmer Corporation and the United
States Government. The contract was effective for the period
1 March 1958 through 30 June 1968.
2. The parties hereto have at various times agreed upon a final
price for certain periods of time. Said incremental agreements are
as follows:
Period Customer Amount Total
a. 1 Mar. 1958 - 30 June 1958
b. 1 July 1958 - 30 June 1959
c. 1 July 1959 - 30 June 1960
d. 1 July 1960 - 31 Dec. 1960
No. 1
No. 2
No. 1
No. 2
No. 1
No. 2
No. 1
No. 2
e. 1 Jan. 1961 - 30 June 1961 No. 1
No. 2
Common
f. 1 July 1961 - 30 June 1962
g. 1 July 1962 - 30 June 1967
h. 1 July 1967 - 30 June 1968
Grand Total
No. 1
No. 2
Common
Sub-total
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The above results in a funded total final consideration of
The spares ordered under this contract have been
satisfactorily delivered. All other terms and conditions, as amended,
remain unchanged.
4. Please indicate your receipt and acceptance of this Amendment
No. 46 to Contract No. HF-CT-695 by executing the original and two
copies. Please return the fully executed original and one copy to the
undersigned and retain the remaining copy for your files.
25X1A ACKNOWTPDGED AND ACCEPTED
Very truly yours,
MEM
TITLE General Manager, Electro-Optical Division
DATE October 21, 1970
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Dear
e,
linclosed is final Mendent No. 46 to
08A-3 -69
23 December 1969
act No. HF-CT-67.
1111111
The settlement of for FY-63 through FY-67 for the
two contracts was hand eP 1
as o1 owst
0-CT-551
11F-CT-65
25X1A
The period I March 1958 throug total
30 June 1962
was shown as final in Amendment No. 23. This Amendmenti No. 16 caps
h
the
above plus reflecting our agreement of for FT-68 or a 25X1A
tote], final contract price of
A recap of the payment status is as follows:
Final Price
Paid 41/0 4/16/69
Balance Due
Please submit the to11owing in. order t
a. Clime. 24 Reporting of Royalties
b. Clause 27 - Patent Rights
O . Clause 30 - Government Furnished Property
d. FT-68 Receipted Delivery Tickets
e. ftecuted Amendment No. 46
f. Fintl Invoice
Diet:
Orig & 1 -
1 - BPD/OSA
1 - CMD/Contract Section
1 - RB/OSA
25X1A
ct be p tel:
Very truly yours,
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Perkin-Elmer Corporation
Main Avenue
Norwalk, Connecticut
Gentlemen:
2
FIXIVON270001-4
P'iltiv
,c/1 cTP
0SA-3518-69
4.12r e/w)" Copy_l_of 7
A// -7Cr
0 Contract No. HF-CT-695
r
Amendment No. 46
3 0 DEO 1959
1. This document const tutes Amendment No. 46 to Contract
No. HF-CT-695 between the Perin-Elmer Corporation and the United
States Government. The contiAct was effective for the period
1 March 1958 through 30 June 1 68.
2. The parties hereto hav at various times agreed upon a final
Trice for certain periods of tim . Said incremental agreements are
as follows:
Period
a. 1 Mar. 1958 - 30 June 1958
b. 1 July 1958 - 30 June 1959
c. 1 July 1959 - 30 June 1960
?Vustomer
\\No. 1
No. 2
t` . 1
N& 2
No.
No.
d. 1 July 1960 - 31 Dec. 1960 No. 1'
No. 2
e. 1 Jan. 1961 - 30 June 1961
f. 1 July 1961 - 30 June 1962
g ?
1 July 1962 - 30 June 1967
h. 1 July 1967 - 30 June 1968
Grand Total
No. 1
No. 2
Common
No. 1
No. 2
Common
Sub-tot
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ler
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3. The above results in a net decrease of or a
total final consideration of The spares ordered under
this contract have been satisfactorily delivered. All other terms
and conditions, as amended, remain unchanged.
4. Please indicate your receipt and acceptance of this Amendment
No. 46 to Contract No. HF-CT-695 by executing the original and two
copies. Please return the fully executed original and one copy to the
undersigned and retain the remaining copy for your files.
ACKNOWTRDGED AND ACCEPTED
PERKIN-ELMER CORPORATION
BY
TITTP
DAlE
2
Very truly yours,
THE UND.ED STATES OF AMERICA
rac ing
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SEC. CL.
ORIGIN
CM OS
DATE OF DOC
23 Dec.
DATE RECD DATE OUT
CONTROL NOr'
OSA-3518-69
EROSS REFERENCE OR
POINT OF FILING
To PERKIN-ELMER/ INorwaik,Corth":
FROM Contracting Orficer
SUBJ. Cont. HF-CT-695 Amt.
r 3/ 7 da.
Diet: Cy 1 - CVDD/OSA
2 - Contractor.
2 -31- 7z) 3 - BFD/OSA
L.-
ROUTING
DATE
SENT
1
7 RB OSA
COURIER NO.
ANSWERED
NO REPLY
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OSA-2967_68
Copy / of 5
Contract No. HF-CT-695
Amendment No. 45
IC OCT is1613
The Perkin-Elmer Corporation
Main Avenue
Norwalk, Connecticut
Gentlemen:
1. This document constitutes Amendment No. 45 to Contract No.
HF-CT-695 between The Perkin-Elmer Corporation and the United States
of America.
2. Pursuant to the clause of this contract entitled "CHANGES"
and mutual agreement between the parties hereto, it is in the interest
of the Government to amend the contract as follows:
APPENDIX X, attached hereto, is added to the contract
schedule. The pricing formula set forth therein shall be
fixed for the period commencing 1 August 1967 and ending
30 June 1968. Payments made to the Contractor for work
and services performed on and after 1 August 1967 computed
on a provisional pricing formula shall be adjusted to the
pricing formula established in APPENDIX X.
3. All other term and conditions of this Contract No. HF-CT-
695, as amended, remain unchanged.
4. Please indicate your receipt of this Amendment No. 45 to
Contract No. HF-CT-695, and your acceptance thereof by executing
the original and two copies of this amendment. Return the fully
executed original and one copy to the undersigned and retain the
remaining copy for your files.
Very truly yours,
THE UNITED STALES OF AMERICA
DATE
Sr. Vice-President, Optical
Group
November 13, 1968
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APPENDIX X
Pricing Formula for Period 1 August 1967 through 30 June 1968
(1) Extend the estimated labor hours at current labor and
overhead quoting rates as recommended for acceptance by the cognizant
DCAA auditor;
(2) Estimated material and other non-labor at actual cost;
(3) Apply current G&A quoting rate, as recommended for acceptance
by the cognizant DCAA auditor, to the total of (1) and (2);
(4) Apply a profit factor of to (2) and (3);
(5) All shipments shall be F.O.B. destination and all shipping
costs shall be charged at actual cost.
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Approved For Release 20,01/04/23 : CBE B00697R001600Q0001-4
OSA-1730-68
Copy I of 5
Contract No. HF-CT-695
Amendment No. 44
28 MAY 1968
The Perkin-Elmer Corporation
Main Avenue
Norwalk, Connecticut
Gentlemen:
1. This document constitutes Amendment No. 44 to Contract No.
HF-CT-695 between The Perkin-Elmer Corporation and the United States
of America.
2. Pursuant to the clause of this contract entitled "CHANGES"
and mutual agreement between the parties hereto, it is in the interest
of the Government to amend the contract as follows:
Line 1. in PART VII - FUNDS ALLOTTED, of the contract
schedule as amended is deleted and Line 1. stated below
is substituted therefor:
"1. 1 July 1967 through
25X1A Common
Customer No. 1
25X1A
25X1A
3. The above results in a reduction of the FY-68 Common
account o
)4. All other terms and conditions of Contract No. HF-CT-695?
as amended, remain unchanged.
5. Please indicate your receipt of this Amendment No. 44 to
Contract No. HP-CT-695, and your acceptance thereof by executing the
original and two copies of this amendment. Return the fully executed
original and one copy to the undersigned and retain the remaining copy
for your files.
Very truly yours,
AeKN THE UNITED STATES OF AMERICA
THE
BY
TITTESr.'Vice-President,Optical Group
DATE 6/13/68
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OSA-1337-68
Copy /,of 5
Contract No. HF-CT-695
Amendment No. 43
MAY ru
The Perkin-Elmer Corporation
Main Avenue
Norwalk, Connecticut
Gentlemen:
1. This document constitutes Amendment No. 43 to
Contract No. HF-CT-695 between The Perkin-Elmer Corporation
and the United States of America.
2. Pursuant to the clause of this contract entitled
"CHANGES" and mutual agreement between the parties hereto,
it is in the interest of the Government to amend the contract
as follows:
Line 1. in PART VII - FUNDS ALLOTTED, of the contract
schedule as amended is deleted and Line 1. stated below
is substituted therefor:
"1. 1 July 1967 through 30 Jun 1Q1.
Common
Customer No. 1
3. The effect of the above action is to increase the
FY-68 Customer No. 1 account by $15,000.
25X1A
4. All other terms and conditions of Contract No. HF-CT-695,
as amended, remain unchanged.
5. Please indicate your receipt of this Amendment No. 43
to Contract No. HF-CT-695, and your acceptance thereof by
executing the original and two copies of this amendment. Return
the fully executed original and one copy to the undersigned and
retain the remaining copy for your files.
ACKNOWLEDGED AND ACCEPTED
Very truly yours,
THE UNITED STATES OF AMERICA
25X1A
TIMEVice-President & Chief Scientist
DATE May 16, 1968
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25X1A
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The Perkin-Elmer Corporation
Main Avenue
Norwalk, Connecticut
Gentlemen:
7R001600014V1-4
OSA-4436-67
Copy of 5
Contract No. HF-CT-695
Amendment No. 42
1. This document constitutes Amendment No. 42 to
Contract No. HF-CT-695 between the Perkin-Elmer Corporation
and the United States of America.
2. Pursuant to the clause of this contract entitled
"CHANGES" and mutual agreement between the parties hereto,
it is in the interest of the Government to amend the contract
as follows:
Line 1. in PART VII - FUNDS ALLOTTED, of the contract
schedule as amended is deleted and Line 1. stated below
is substituted therefor:
"1. 1 July 1967 through 30 June 1968: 25X1A
Common
Customer No. 1
3. All other terms and conditions of Contract No.
HF-CT-695, as amended, remain unchanged.
4. Please indicate your receipt of this Amendment No. 42
to Contract No. HF-CT-695, and your acceptance thereof by
executing the original and two copies of this amendment. Return
the fully executed original and one copy to the undersigned and
retain the remaining copy for your files.
ACKNOWLEDGED &,ACCEPTED
The Per in e or oration
DATE January 19, 1968
Very truly yours,
25X1A
THE UNITED STATES OF AMERICA,
on rac ing ? icer
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OSA-4067-67
Copy i of 5
Contract No. HF-CT-695
Amendment No. 41
The Perkin-Elmer Corporation
Main Avenue
Norwalk, Connecticut
Gentlemen:
1. This document constitutes Amendment No. 41 to Con-
tract No. HF-CT-695 between The Perkin-Elmer Corporation and
the United States of America.
2. Pursuant to mutual agreement between the parties
hereto, it is in the interest of the Government to amend the
contract as follows:
In PART VII - FUNDS ALLOTTED, of the contract schedule
as amended, Paragraph k. is deleted and Paragraph k. set
forth below is substituted therefor:
"k. 1 July 1966 through 30 June
Common
Customer No. 1
1 Q7
3. All other terms and conditions of Contract No. HF-CT-695,
as amended, remain unchanged.
4. Please indicate your receipt of this Amendment No. 41 to
Contract No. HF-CT-695, and your acceptance thereof by executing
the original and two copies of this amendment. Return the fully
executed original and one copy to the undersigned and retain the
remaining copy for your files.
ACKNOWL I AN; 'CCEPTED
THE PEARTe A,401?FbORPORA
Very truly yours,
roup
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EG.
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OSA-3281-67
Copy / of 5
Contract No. HF-CT-695
Amendment No. 40
9 OCT 1967
The Perkin-Elmer Corporation
Main Avenue
Norwalk, Connecticut
Gentlemen:
1. This document constitutes Amendment No. 40 to
Contract No. HF-CT-695 between The Perkin-Elmer Corporation
and the United States of America.
2. Pursuant to the clause of this contract entitled
"CHANGES" and mutual agreement between the parties hereto,
it is in the interest of the Government to amend the contract
as follows:
Line 1. in PART VII - FUNDS ALLOTTED, of the con-
tract schedule, as amended, is deleted and Line 1. stated
below is substituted therefor:
"1. 1 July 1967 through 30 June 1968:
Common
Customer No. 1
Customer No. 2
3. All other terms and conditions of Contract No. HF-CT-
695, as amended, remain unchanged.
4. Please indicate your receipt of this Amendment No. 40
to Contract No. HF-CT-695, and your acceptance thereof by
executing the original and two copies of this amendment. Return
the fully executed original and one copy to the undersigned and
retain the remaining copy for your files.
ACKNOWLE yPTED
THE PE RPORATION
Very truly yours,
on
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Contract No. HF-CT-695
Amendment No. 39
JUN 1967
The Perkin-Elmer Corporation
Main Avenue
Norwalk, Connecticut
Gentlemen:
1. This document constitutes Amendment No. 39 to
Contract No. HF-CT-695 between The Perkin-Elmer Corporation
and the United States of America.
2. Pursuant to the clause of this contract entitled
"CHANGES" and mutual agreement between the parties hereto,
it is in the interest of the Government to amend the contract
as follows:
a. In PART VII - FUNDS ALLOTTED, of the contract
schedule as amended, Paragraph k. is deleted and the
following Paragraphs k. and 1. are added:
"k. 1 July 1966 through 30 June 1967:
Common
Customer No. 1
Customer No. 2
July 1967 through 30 June 1968:
Common
* Contingent upon the availability of funds for this
purpose during the Government's Fiscal Year 1968."
b. Paragraph (a) in PART V - PERIOD OF PERFORMANCE
of the contract schedule as amended, is deleted and the
following paragraph is substituted therefor:
"(a) The Contractor shall furnish the articles and
supplies required hereunder during the period
1 March 1958 through 30 June 1968."
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3. All other terms and conditions of Contract No.
HF-CT-695, as amended, remain unchanged.
4. Please indicate your receipt of this Amendment
No. 39 to Contract No. HF-CT-695 and your acceptance thereof
by executing the original and two copies of this amendment.
Return the fully executed original and one copy to the under-
signed and retain the remaining copy for your files.
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Very truly yours,
AmmowLERGED AND ACCEPTED
THE PERKIN- RPORATION
/
BY
TI
DATE 6 July 1967
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The Perkin-Elmer Corporation
Main Avenue
Norwalk, Connecticut
Gentlemen:
OSA-1276-67
Copy,/ of 5
Contract No. HF-CT-695
Amendment No. 38
18 APR 197
1. This document constitutes Amendment No. 38 to Contract
No. HF-CT-695 between The Perkin-Elmer Corporation and the
United States of America.
2. Pursuant to the clause of this contract entitled
"CHANGES" and mutual agreement between the parties hereto,
it is in the interest of the Government to amend the contract
as follows:
In PART VII - FUNDS ALLOTTED, of the contract schedule, as
amended, Paragraph K. is deleted and the following Paragraph k.
is substituted therefor:
"k. 1 July 1966 through 30 June 1967
Common
Customer No. 1
Customer No. 2
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3. All other terms and conditions of Contract No. HF-
CT-695, as amended, remain unchanged.
4. Please indicate your receipt of this Amendment No.
38 to Contract No. HF-CT-695 and your acceptance thereof
by executing the original and two copies of this amendment.
Return the fully executed original and one copy to the
undersigned and retain the remaining copy for your files.
ACKNOWLEDG9EPTED
THE PERKIN CORPORATION
BY
TIT
Approved
Very truly yours,
THE ED STATES OF AMERICA
E 27 April 1967
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