NEGOTIATED CONTRACT CONTRACT NO. NOAS-58-812 (SS-100)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89B00709R000400800033-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 49
• Document Creation Date: December 22, 2016
• Document Release Date: January 10, 2011
• Sequence Number: 33
• Publication Date: August 14, 1958
• Content Type: MISC

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NEGOTIATED CONTRACT
CONTRACT NO. NOas-58-812 (SS-100)
General Dynamics Corporation
Convair Division
San Diego, California
Contract for :
Amount :
Mail Invoices to:
Performance Period:
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
Delaware, 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 gov-
ned 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 WR1', the parties hereto have executed this contract as of
14 Aug-list 1958.
Signatures:
General Dynamics Corporation
Convair Division
Title Vice President - CAnvair 14 .vision
3yq - pn~-~!m-,: ~
Bye
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SeNO
Contract No.
CERTIFICATE
I am an Assistant Secretary,
as Contractor herein; that P
certify that
of the Corporation named
__vho
signed this contract on behalf of the Contractor was then Vice
Prewrden - Convair Division of said Corporation; that said con-
tract was duly signed for and in behalf of said Corporation by
authority of its governing body, and is within the scope of its Cor-
porate powers.
(Corporate seal)
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INDEX OF SCSEDW
PART I SCOPE OF WORK ......................................... iv
PART II DELIVERY .............................................. iv
PART III ES'D4ATED COST AND FIIC;D FEE .......................... iv
PART IV PAYi4E. ............................................... iv
PART V ANTICIPATORY COST ..................................... vii
PART VI L TM CON TRAM SUPERSEDED ............................ vii
PART VII WAIVER OF REQUIREK;1TIS OF GENERAL PROVISIONS ......?.?. Vii
PART VIII SPECIAL SECURITY RE RICTIONS ......................... viii
PART IX AUDIT .......... ................................ viii
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PART I - SCOPE OF WORK
Contractor shall furnish the necessary engineering, design and de-
velopment to accomplish the work set forth in Appendix I attached hereto
and made a part of this contract.
PART II - DELIVERY
The Contractor shall accomplish the work and submit the required
reports in accordance with the provisions of Appendix I mentioned in
PART I hereof.
PART III - ESTIMATED COST AND FIM FEE
a. The total estimated cost for the performance of this contract,
exclusive of the fixed fee, is $55,9951-00-
b. The fixed fee for the performance of this contract is $3,917.00.
PART IV - PAYM iT
a. In accordance with the provisions of Clause 4 of the General
Provisions of this contract entitled, "Allowable Coat, Fixed Fee, and
Payment", the Government shall pay the Contractor, as full compensation
for the performance of this contract, the fixed fee as specified in
PART III above, and the Allowable Cost incurred by the Contractor in
the performance of this contract, and accepted by the Contracting
Officer as chargeable in accordance with "Contract Cost Principles,
Section XV, Part 2, Armed Services Procurement Regulations"; such
determination being subject to the provisions of this contract entitled
"Disputes". It being understood and agreed, without limiting the
generality of the foregoing, that the following shall be considered
as allowable items of costs incurred hereunder when incurred or paid
by the Contractor, and when necessary and required and used for the
performance of work hereunder:
1. (a) Premium costs for overtime work shall be an allowable
item of cost hereunder only if, and to the extent, that overtime work
for which such payments are made shall have been duly authorized to
the extent that such authorization is required by applicable Government
directives.
(b) Costs of personnel movement of a special or mass nature
as may be approved from time to time by the Contracting Officer or his
duly authorized representative.
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S11 CIRKY
(c) Costs of ordinary and normal rearrangement of facilities
within a department or plant. The cost of extraordinary plant rearrangement,
including relocation of plant sites shall be allowable only to the extent ap-
proved by the Contracting Officer or his duly authorized representative.
(d) Extraordinary travel and subsistence expenses incident to
the performance of this contract shall be allowed as a direct cost hereunder,
consistent with Contractor's accounting method, it being agreed and under-
stood that the portion of ordinary travel and subsistence expenses allocated
to this contract in accordance with Contractor's established accounting
method of apportioning indirect cost shall also constitute an allowable cost
hereunder, subject to approval of the Contracting Officer.
(e) Cost of subsistence and temporary housing of employees de-
tailed to duty at points away from homes shall be allowable items of cost
hereunder as approved by the Contracting Officer.
(f) Costs incurred in connection with the Contractor's Patent
Department shall.be subject to negotiation in the event the Contractor exer-
cises the option contained in paragraph (2) (h) (1) of this PART IV and this
contract is amended in accordance with paragraph (2) (h) (2) of this PART IV.
(g) Costs of engineering programs of a general nature sha11 be
subject to negotiation in the event the Contractor exercises the option con-
tained in paragraph (2) (h) (1) of this PART IV and this contract is amended
in accordance with paragraph (2) (h) (2) of.this PART IV.
(h) Costs of operations of, or in connection with, cafeterias,
dining rooms (except executive dining rooms), soda fountains, sales stores,
and similar operations, operated by the Contractor or by a concessionaire,
provided that the profits accruing to the Contractor from any such operation
will be treated as a credit to overhead. This subparagraph shall not apply
to the operating of vending machines, the profit from which is irrevocably
set over to an employee's welfare organization.
2. (a) Notwithstanding the provisions of the clause of the con-
tract entitled "Allowable Cost, Fixed Fee, and. Payment", the allowable Gen-
eral Office Administrative Overhead under this contract shall be obtained by
applying a negotiated overhead rate to a base agreed upon by the parties, as
specified below:
(b) The Contractor, as soon as possible, but not later than
ninety (90) days. after the expiration of each period specified below, shall
submit to the Contracting Officer, via the cognizant audit activity and the
Office of the Comptroller of the Navy (Contract Audit Division), a proposed
(v)
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final overhead rate for that period based on the Contractor's actual cost
experience during that period, together with supporting cost data. Negotia-
tion of the final overhead rate by the Contractor and the Contracting Officer
shall be undertaken as promptly as practicable after receipt of the Con-
tractor's proposal.
(c) Ailowability of costs and acceptability of cost allocation
methods shall be. determined in accordance with ASPR, Section XV, Part 2, as
in effect on the date of this contract.
(d) The results of each negotiation shall be set forth in an
amendment to the contract, which shall specify (i) the agreed final rate,
(ii) the base to which the rate applies and (iii).the period for which the
rate applies.
(e) Pursuant to the foregoing, a General Office Administrative
Overhead rate shall be established for the period beginning 10 February 1958
and ending 30 June 1958 and for each succeeding six (6) months, or such other
period as may be mutually agreed upon.
(f) Pending establishment of a final overhead rate for any
period, the Contractor shall be reimbursed at a billing rate set forth in
paragraph b. of this PART IV, subject to appropriate adjustment when the
final rate for that period is established. To prevent substantial over or
under payment, the billing rate may, at the request of either party, be re-
vised by mutual agreement, either retroactively or prospectively. In the
event of failure to agree on the billing rate to be used for any period, pro-
visional payments on account of allowable General Office Administrative Over-
head for that period shall be made on the basis of a provisional rate which
shall be negotiated by the Contractor and the Contracting Officer and set
forth in an amendment to the contract.
(g) Any failure by the parties to agree on any final rate under
the contract shall be considered a dispute concerning a question of fact for
decision by the Contracting Officer within the meaning of the "Disputes"
clause set forth in the contract.
(h) (1) The Contractor shall have the option to discontinue
the use of negotiated final overhead rates, as provided herein, by
giving written notice to the Contracting Officer not later than
thirty (30) days prior to the end of any period.
(2) Discontinuance of negotiated overhead rates shall
be effective on the first day of the period in which such notice is
given and shall be evidenced by an appropriate amendment to the
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contract providing for reimbursement of General Office Administra-
tive Overhead on the basis of audited actual costs in accordance
with the payment provisions of the clause of the contract entitled
"Allowable Cost, Fixed Fee and Payment."
b. For purposes of billing current costs incurred under this contract
or until such time as an audit of Contractor's interim or final vouchers or
invoices is-made by the Contracting Officer or his authorized representative,
the Contractor shall use the following rates in computing costs incurred here-
under:
"Those rates which are currently approved by the cognizant
military department for billing purposes under CPFF contracts."
c. Contractor shall be paid the fixed fee stated in PART III hereof in
monthly installments based on allowable costs incurred by the Contractor and
approved by the Contracting Officer computed at the same ratio that the total
fixed fee stated herein is to the total estimated cost stated herein, subject,
however, to the withholding provisions of paragraph (c) of Clause 4 of the
General Provisions hereof.
PART V - ANTICIPATORY COSTS
All costs which have been incurred by the Contractor on or after 26 May
1958 in anticipation of and prior to the signing of this contract, and which,
if incurred after the signing of this contract, would have been considered as
items of Allowable Costs hereunder, will be accepted by the Contracting Officer
as costs under this contract.
PART VI - LETTER CONTRACT SUPERSEDED
This is the Definitive Contract contemplated by the Letter Contract No.
NOas-58-812 dated 22 June 1958 and all amendments thereto. This Definitive
Contract supersedes said Letter Contract and all amendments thereto. Work
performed and payments made under said Letter Contract, as amended, shall be
deemed to be work performed and payments made under this Definitive Contract.
In the event of conflict between this Definitive Contract and said Letter Con-
tract, as amended, this Definitive Contract shall govern.
PART VII - WAIVER OfF REQUIREMENTS OF GENERAL PROVISIONS
Notwithstanding the requirements of any of the General Provisions of
this contract to the contrary, whensoever the Contractor, in performance of
the work under this contract, shall find that the requirements of any of the
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clauses of the General Provisions are in conflict with security instructions
issued to the Contractor, by the Contracting Officer or by his duly authorized
representative for security matters, the Contractor shall call the attention
of the Contracting Officer to such conflict and the Contracting Officer or his
duly authorized representative for security matters shall (i) modify or rescind
such security requirements or (ii) the Contracting Officer shall issue to the
Contractor a waiver of compliance .with the requirements of the General Provi-
sions conflicting with such security requirements. Any waiver of compliance
with the General Provisions of this contract issued by the Contracting Officer
shall be in witting, except that the approval of the Contracting Officer of any
subcontract issued hereunder by the Contractor shall be deemed to constitute
approval of waiver of any clauses of the General Provisions in conflict with
the stipulations of such subcontract.
PART VIII - SPECIAL SECURITY RESTRICTIONS
The Contractor shall not reveal (i) the specific nature or any details
of the work being performed hereunder or (ii) any information whatsoever with
respect to the department of the Government sponsoring this contract and the
work thereunder except as the Contractor is directed or permitted to reveal
such information by the Contracting Officer or by his duly authorized repre-
sentative for security matters, and notwithstanding any clause or section of
this contract to the contrary, the Contractor shall not interpret any clause
or section of this contract as requiring or permitting divulgence of such in-
formation to any person, public or private, or to any officer or department
of the Government without the express consent of the Contracting Officer or
his duly authorized representative for security matters.
PART IX - AUDIT
Audit of costs hereunder shall be by the cognizant military audit agency,
in accordance with security requirements which shall be agreed upon between the
Contractor and the Contracting Officer.
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APPENDIX I
A. The_ CONTRACTOR shall accomplish the Statement of Work as
set forth below:
(a) CONTRACTOR shall conduct configuration studies of an air
vehicle to meet objectives substantially as stated in Enclosure (A)
to CONVAIR letter 11-0-1678, dated 15 May 1958, and such modifi-
cations to these objectives as mutually agreed to by the CONTRACTOR
and the CONTRACTING OFFICER. Configuration studies shall include
both cruise and glide flight paths and possibly combined cruise-glide
flight path.
(b) CONTRACTOR shall conduct preliminary design studies of the
most promising configuration determined under (a) above, including
the following areas:
Structure and Materials
Stability and Control
Power Plants
Navigational and Guidance
Vehicle Detectability
(c) CONTRACTOR shall investigate human factor requirements in
the proposed environment and conduct an operations analysis of
the proposed system versus possible competitive systems.
(d) CONTRACTOR shall submit reports as specified in the docu-
ment referenced in (a) above and in addition shall be prepared to
render an informal verbal status report between 15 and 30 July 1958
at a time and place to be designated by the CONTRACTING OFFICER.
Be Delivery
Item 1 - CONTRACTOR shall complete all studies by 30 August
1958. Reports shall be submitted in accordance with Enclosure (A)
to CONVAIR letter 11-0-1678, dated 15 May 1958. All reports shall
be delivered, postage p repaid, to the CONTRACTING OFFICER.
Inspection and acceptance shall be at destination.
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INDEX OF GF,NERAL P1OVISIONS
1. DEFINITIONS ........................,................0.. 1
20 CHIli1GES ....................t........................... 1
3o LIMITATION Or, COST.... ..... ........................... 2
4. ALLO,TABLE COST, FIXED FEE, AND PAYMENT............... 3
5, INSPECTION AND CORRECTION OF DEFECTS................... 5
6. ASSIGNMENT Or CLADJS..e....t..... ....................... 7
7. RECORDS ..........................aeu?.................. 7
Og S(,lBCONTRi1CTS.o... ....es.eo...o~.e......o.o.......e..e0 9
9. UTILIZATION OF SNALL BUSINESS C0NCERNS... ..............010
1.0. TE.RMINA T ION . , .........o-..... a .... a .~ ........ w ...... 0.10
3.1. EXCUSABLE DAYS...... .......e.......e.......1..,.....,15
I2. DISPUTIIS....,.e .....................ea.......'a..",,.S0015
13, NOTICE AN,Dr ASSISTANCE REaii FDI.NG PATE `TINFRINGE1 ANT e ..,16
140 EUY A-MM T .IChN ACT........... ?00..so....A1 ?eIIPA..00...so.17
150 CONVICT
(~LABU-PTO?....O?6......... 0.e.e......0'......... o.17
16, EIGHT-~TIOUR LAW OF 191200000000000000000 ti te- ~Q..........17
_.'i. NONDISCRINI1,4.TIO1A IiV i i P L O i ' i ~ I r a ? ` 1 y . O G ?. O O., D, ...0 ...... 018
18, OFFICIALS T,O TO BELLEIT.o.............................19
19. COV,E'JANT A(_'~'_IN?ST CONTINGENT LFE! o., 00 ..................19
20. PATENT
P.IC,:'? c:...ea ................o......eo......eoooe-~~9
21. GOVERNMENT :?ERTYo ...................................24
22. INSURANCE-LI:IEILITY TO THIRD PERSONS...........ooo?.99029
.'_3. AUTHORIZATIG::I AND CONSEN'T'................... o..e....0.30
2L0 FILING OF PATENT APPLICATIONS ..........................31
2;, REPORTING OF ROYALTIES ..... ....000......oooeoo........,3l
26. RIGHTS IN DATA -UNLINITED0.1 :...:...................0...33
27. IViILITARY SECURITY REQUIREMENTS....... ..... ..............34
28. WALSH-HEALEY PUBLIC CONTRACTS A CTS..O.....1.......?,,,.35
29, GRFTUITIES.0.,..to.......tooo00 .................1......036
30. NEGOTIri.TED OVERHEAD RATES..0 ..............0............36
31. DELAY IN DELIVERY OF DATA........?.....e...oo.00510000e37
32k. SUPERSEDING SPECIFICATIONS ................0............37
33.E FLIGHT PdSK.oo...0.......0.0....0.0 ..............0...0.38
34. ALTERATIONS........10 ..............0.,0...00.........0?39
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D
GENERAL PROVISIONS
1. DEFINITIONS (ASPR 7-103.1 AFPI 7403.1)
As used throughout this contractz"jhe following terms shall
have the meanings set forth below:
(a) The term "Secretary" means the Secretary,, the Under
Secretary, or any Assistant Secretary;'of the Department and the
head or any assistant head of the exeputive agency; and the term
"his duly authorized representative" means any person or persons
or board (other than the Contracting Officer) authorized to act.
for the Secretary.
(b) The term "Contract=ing Officer" r eans the p^rson cx_acuting
this ccntract on behalf of the Government, and any other off* .cer
or civilian employee who is a properly designate:' Cc_ntraC4-.
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" inclucL s purchase orders under this contract.
(d,) (AFPI 7-30..:,1) The term "contract work" r^cans all work
to be performed unde:^ this contract including any studies covering
fui_'amental, theoretical, or experimental investigations; any
ex-:ioision of the investigative findings and thecries of a
sc~.imntific or technical nature into practical application; any
to-iF :Dle items, hereinafter re 'erred to as "supplies," furnished
to the Government; and any reports, data, computations, plans,
drw,?.:ings, and specifications with respect to any of the foregoing.
2. CF`:NGES (AFPI 7-403.2)
The Contracting Officer may at any time ? y a i ritten order, make
changes in or additions to the drawings and specifications, issue
additional instructions, require additional work within the genercii scope
of the contract, or change the place of delivery, method of shipment,
or the amount of Government Furnished property. If any such change
causes an increase or decrease in the estimated cost of, or the time
required for performance of this contract, or otherwise affects any
(CPFF Apr. 18, '58)
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cther provision of this contract, an equitable adjustment shall be
..de (i) in the estimated cost or delivery schedule, or botfi, (ii)
in the amount of any fixed fee to be paid to the Contractotp and
(iii:? in such other provisions of the contract as may be so affected,
any. the contract shall be modified in uniting accordingly. Any claim
by the Contractor for adjustment under this clause must be assertdd
within sixty (60) days from the date..of receipt by the Contractor of
the notification of change; Provided* however, That the Contracting
Officer, if he decides that the facts justify such action, may receive
and act upon any such claim asserted at any time prior to final payment
.aer 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 progeeding with the contract as
c. ".'ged.
LIMITATION OF COST (ASPR 7-203.3 AFPI 7-403.3)
(a) It is estimated that the total cost to the Government,
exclusive of any fixed fee, for the performance of this contract will
not exc-?ed the estimated cost set forth in the Schedule, and the
Contractor agrees to use its best efforts to perform the work specified
in the Schedule and all obligations under this contract within such
estimated cost. If at any time the Contractor has reason to believe
that the costs which it expects to incur in the performance of this
co:ccra in the next si:cceeding thirty (30) days, when added to all
costs previously in?'.ul?red, will exceed eighty-five percent (85%) of the
estimated cost then set forth in the Schedule, or if at any time, the
Cc-...tractor has reason. to believe that the total cost to the Government,
e:.;lusive of any fixed fee, for the performance of this contract will
r. substantially greater or less than the then estimated cost t e:?eoi, the
Contractor shall notify the Contracting Officer in :?rritimg to that
effect, giving its revised estimate of such total cost for the
performance of this contract.
(b) The Government shall not be obligated to reimburse the
Contractor for costs incurred in excess of the estimated cost set
forth in the Schedule and the Contractor shall not be obligated to
continue performance under the contract or to incur costs in excess of
the estimated cost set forth in the Sche-ule. unless and until the
Contracting Officer shall have notified the Contractor in writing that
such estimated cost has been increased and shall have specified n such
notice a revised estimated cost which shall thereupon constitute the
estimated cost of performance of this con?tracto When and to the
(C.-77 Apr. 18, 158)
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extent that the estimated oost set forth in the,Schedule has been
increased, any cost incurred by the Contractor in excess of such
estimated cost prior to the increase in estimated cost shall be
allowable to the same extent as if such costs had been incurred
after such increase in estimated cost,!,
4. ALLOIJAPLE COST, FIXED FEE, AIM PAYiENT (ASPR 7-203..4 AFPI 7-403.4)
(a) For the performance of this contract, the Government shall
pn.v to the Contractor the cost thereof determined by the Contracting'
u.Cicer to be allowable in accordance with Part 2 of Section XV of
the Armed Services Procurement Regulation as in effect on the date
of this contract and the Schedule (hereinafter referred to as "Allow-
able C_st"), plus such fixed fee, if any, as may be provided for in
the Schedule,
(b) Once each month (or at more frequent intervals, if approved
by the Contracting Officer) the Contractor may submit to an authorized
representative of the Contracting Officer, in such form and reasonable
detail as such representative may require, an invoice or public voucher
supported by a statement of cost incurred by the Contractor in the
performance of this contract and claimed to constitute Allowable Cost.
Each statement of cost shall be certified by an officer or other
ro'ponsible official of the Contractor authorized by it to certify
s u.?h statement.
(c) As promptly as may be practicable after receipt of each
invoice or voucher and statement of cost, the Goverrunent shall, except
as hereinafter provided and subject to the provisions of paragraph (d)
be'ow, make payment thereon as approved by the Contracting Officer.
After payment of eighty-five percent (55%) of the fixed fee set forth
in the Schedule, as from time to time amended, further payment on
account of the fixed fee shall be withheld until a reserve of either
(i) fifteen percent (15/"0') of the total fixed fee or (ii) -`.loC,Oi:r:,
whichever amount is less, shall have been set aside, such reserve or
the balance thereof to be retained until the execution and delivery
of a release by the Contractor as provided in paragraph (e) hereof,
(d) At any time or times prior to final payment under this contract
the Contracting Officer may cause to be made such audit of the invoices
or vouchers and statements of cost as shall be deemed necessary. Each
payment theretofore made shall be subject to reduction to the extent of
amounts included in the related invoice or voucher and statement of cost
which are found by the Contracting Officer on the basis of such audit not
to constitute Allowable Cost, and shall also be subject to reduction for
(C!-.-'F Apr. 15, t58)
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overpayment or to increase for underpayments on preceding invoices
or vouchers. On receipt of the voucher n# invoice designated by the
Contra-,.;tor as the "completion voucher" or "completion invoice" and
stater,-,ant of cost, which shall be submitted by, the Contractor as
promptly as may be practicable following completion of the work under
this contract but in no event later than.c1 (1) year (or such longer
pericc: as the Contracting Officer may, ih-his discretion, approve in
writi,,-) from the date of such completion, and following compliance
by t1 Contractor with all provisions of this contract (including,
withoxt limitation, provisions relating to patents and the provisions
of paragraihs (e) and (f) of this clause), the Government shall as
promptly as may be practicable pay any balance of Allowable Cost
(e) The Contractor and each assignee under an ass4.gnment
entered into under this contract -.bnd in effect at tae _ tire. mf ..fin: 1
payment under this contract shall execute and deliver at the time of
and as a condition precedent to final payment under this contract, a
release d Echarging the Government, its officers, agents and eaployces
of and from all liabilities, obligations and claims arising out of or
under- this contract, subject only to the following exceptions:
(1) Specified claims in stated amounts or in estimated
amounts where the amounts are not susceptible of
exact statement by the Contractor,
(2) Claims, together with reasonable expenses inciden-
tal thereto, based upon the liabilities of the
Contractc.r to third parties arising out of the per-
formance of the contract, which are not known to the
Contractor on the date of the execution of the
release, and of which the Contractor gives notice
in writing to the Contracting Officer not r..lore than
six (6) years after the date of the release or the
date of any notice to the Contractor that the
Government is prepared to ::lake final pay:lent, which-
ever is earlier,
(3) Claims for reimbursement of costs (other than
expenses of the Contractor by reason: of its indem-
nification of the Government against patent liabil-
ity), including reasonable expenses incidental
thereto, incurred by the Contractor under the
provisions of the contract relating to patents,
(f) The Contractor agrees that any refunds, rebates or credits
(including any interest thereon) accruing to or received by the
(CPP rl?. 18, T58)
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Ccntractor or any assignee which arise out of the performance of this
contract and on account of which the Contractor has received reimburse-
ment shall be paid by the Contractor to the Government: The Contractor
and each assignee under an assignment entered into under this contract
and in effect at the time of final- 'payment under this contract shall
execute and deliver at the time of aand.as a condition precedent to
:final payment under this contract"an assignment to the Government of
refunds, rebates or credits (including any interest thereon) arising out
the performance of this contract, in form and substance satisfactory
the contracting Officer. Reasonable expenses incurred by the
contractor for the purpose of securing any such refunds, rebates or
credits shall constitute Allowable Cost when approved by the Contracting
Officer.
(g) Any cost incurred by the Contractor under the terms of this
contract which would constitute Allowable Cost under the provisions of
this clause shall be included in determinf.ng the amount payable under
this contract, notwithstanding any provisions contained in the specifi-
cations or other documents incorporated in this contract by reference,
signating services to be performed or materials t, be furnished by
the Contractor at its expense or without cost to the Government,
(h) Payment of the fixed fee shall be made to the Contractor as
provided in the Schedule subject, however, to the withholding provisions
of paragraph (c) h:; 'eof.
5. INSPECTION AND COPLECTION OF DEFECTS (AFPI 7-403.5)
(a) All work under this contract shall be subject to inspection
aid test by the Government, to the extent practicable at all reasonable
':.iraes and places including the period of performance, and in any event
:rior to final acceptance. The Contractor shall provide and maintain
an inspection system acceptable to the Government covering the work
hereunder. The Government, through any authorized representative, may
inspect the plant or plants of the Contractor or of any of its subcon-
tractors engaged in the perfcrmr.nce of this contract. If any inspection
or test is made by the Government on the premise of the Contractor or a
stbcon.tractor, the Contractor shall provide and shall require subcon-
tractors to provide all reasonable facilities and assistance for the
safety and convenience of the Government inspectors in the performance
of their duties. All inspections and tests by the Government shall be
__,formed in such a manner as will not unduly delay the work. Final
spection and acceptance by the Government shall be made as promptly as
::racticable after delivery. The time and place of delivery, final
inspection, and acceptance shall be as set forth in the Schedule.
(b) The Contractor warrants that the services rendered in the
performance of this contract will conform to the requirements of this
contract and to L_'gh professional standards in the field and that a:iy
article delivered to the Government under this contract will conform
(CPFF Apr. 18, '58)
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to the requirements of this contract and will not be defective in material
or worl;,ranship.
(c) At any tine during perfornance.:of this contract, but not later
than ca.x (6) months (or such other period as ieay be provided in the
schedulo) after final acceptance, the Government may require the Contractor
to re.. 1y by correction or replacement as directed by the Contracting
Office: , any failure by the Contractor to cor.iply with its obligations under
paragraph (b) hereof. Except as otherwise provided in paragraph (d) here-
of, the cost of any such replacement or correction shall be included in
"Allowable Cost" determined as provided in the clause of this contract
entitled "Allowable Cost, Fixed Fee and Payment," but no additional fee
shall be payable with respect thereto. Corrected articles shall not be
tendered again for acceptance unless the forcer tender and the require-
rient of correction is disclosed. If the Contractor fails to proceed with
reasonable promptness to perform such replacement or correction, the
Government (i) may by contract or otherwise perform such replacement or
correction and charge to the Contractor any increased cost occasioned
the Government thereby, or nay reduce any fixed fee payable under this
contract (or require repa\raent of any fixed fee theretofore paid) in such
ariount as nay be equitable under the circumstances; or (ii) in the case
of articles not delivered, i.1ay require the delivey of such articles and
shall have the right to reduce any fixed fee payable under this contract
(or to require repaynen_t of any fixed fee theretofore paid) in such
amount as may be equitabl0 ,ender the circumstances; or (iii) may terminate
this contract for default as provided in the clause of this contract
entitled "Termination." Failure to agree on the amount of any such
increased cost to be chard to the Contractor or to such reduction in,
or repayment of, the fixed fee shall be a dispute concerning a question
of fact within the meaning of the clause of this contract entitled
"Disputtntract and not
already paid, and shall not be made to more than one party, except that
any such. assignment or reo:ss:LgnMent may be made to one party as agent or
trustee for two or i:iore parties participating in such financing. Not-
::_thstandi.ng any provision of this contract, payments to an assignee of
). iy, monies due or to become due under this contract shall not, to the
urtent r,.-".ocided in said Act as amended, be subject to reduction or set-off.
(b) In no event shall copies of this contract or of any
plans
:pec.ificetions, or other siiatilar documents relating to work under this
:ontract, if Marked "Top Secret". "Secret", or "Confidential", be
!irnished to any assignee of any claim arising under this contract or
any other person not entitled to receive the sane; provided, That
copy of any part or all of this contract so narked may be furnished,
any inForriatirn contained therein may be disclosed, to such assignee
eon the prior written authorization of the Contracting Officer.
CORDS (ASPR 7-203.7 AFPI 7-403.7)
(a)O The Contractor agrees to maintain books, records, documents
id oth.ox evidence pertaining to the costs and expenses of this contract
iereina cer collectively called the "records") to the extent and in such
;pail as will properly reflect all net costs, direct and indirect of
bor, : ater.i_:als, egiztplnent, supplies and services, and other costs
JFFF Apr. 189 '58)
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and e.:pon5es of whatever nature for which r'einbursor.ient is claimed under
the provisions of this contract. The Contractor's accounting procedures
and practices shall be subject to the approval of the Contracting Officer;
provided, however, that no material change will be required to be nade
in the Contractor's accounting procedures and,practices if they conform
.to generally accepted accounting practices ahd if the costs properly
applicable to this contract are readily ascertainable therefrom.
(2) The Contractor agrees to make available at the office of the
Contractor at all reasonable times during the period set forth in sub-
paragraph (4) below any,of the records for inspection, audit or repro-
ductian by an authorized representative,of the Contracting Officer.
(3) In the event the Contracting Officer or any of his duly authorized
representatives determines that his audit of the amounts reimbursed under
this contract as transportation charges will be nade at a place other
than the office of the Contractor, the Contractor agrees to deliver; with
the reimbursement voucher covering such charges or as nay be otherwise
specif:ied within two years after rei:_iburserient of charges covered by any
such voucher, to such representative as may be designated for that
purpose through the Contracting Officer such documentary evidence in
support of transportation-costs as May be required by the Contracting
Officer or any of his duly authorized representatives.
(4) Except for documentary evidence delivered to the Government
pursuant to subparagraph (3) above. the Contractor shall preserve and
i;iake available its records for a period of six years (unless a longer
periocl. of time is provided by applicable statute) from the date of the
vouche:a or invoice submi ced by the Contractor after the completion of
the work under the contract and designated by the Contractor as the
rrcor.,piotion voucher" or "coi:rpletion invoice" or, in the event this con-
tract has been completely terrainated, from the date of the termination
settlement agreement; provided, however, the records which relate to
(A) appeals under the clause of this contract entitled "Disputes",
(B) litigation or the settlement of claims arising out of the performance
of this contract, or (C) costs or expenses of the contract as to
-which exception has been taken by the Contracting Officer or any of his
duly authorized representatives, shall be retained by the Contractor
until such appeals, litigation, claims, or exceptions have been disposed
of, but in no event for less than the six-year period mentioned above.
(5) Except for documentary evidence delivered pursuant to sub-
paratgi_.ph (3) above, and the records described in the proviso of sub-
para`,;raph (4) above, the Contractor may in fulfillment of its
obligation to retain its records as required by this clause substitute
photographs, ::iicrophotographs or other authentic reproductions of such
records, after the expiration of two years following the last dray of
the nc th of r inhursonont to the Contractor of the invoice or voucher
(CFI ii Apr. 18, 1 58)
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z. C to which such records relate, unless a 6hdf~ter period is authorized by
the Contracting Officer with the coricirieride of the Comptroller' of the
Co:" '.'acting Government Agency or his,authorized representatives.
(6) The provisions of this~,psragraph (a), including this sub-
p?-..:agraph (6) , shall be applicable tea and included in each subcontract
l.,~reuncer which is on a cost, cost-plus-a-fixed-fee, time-and-material
or labor-hour basis.
(b) The Contractor further agrees to include in each of his sub-
contracts hereunder, other than those set forth in subparagraph (a)
(6) above, a provision to the effect that the subcontractor agrees that
the Contracting Officer or any of his duly authorized representatives,
shall, until the expiration of three years after final payment under
the subcontract, have access to and the right to examine any directly
pertinent books, documents, papers, and records of such subcontractor
involving transactions related to the' subcontract. The terns "sub-
contract," as used in this paragraph (b) only excludes i) purcha.:,,e
o ors not exceeding x,-1,000 and (ii) subcontracts c-, purchase orc'.ors
for public utility services at rates established: for uniform applic-
ability to the general public.
SUBCONTRACTS (ASPR 7?-203.8 AFPI 7-403.8)
(a) The Contra,,-tor shall give advance notification to the Con-
tracting Officer of .:;;..,.r proposed subcontract hereunder which (i) is
on a cost or cost-plus-a-fixed-fee basis, or (ii) is on a fixed-price
ba;_i.s exceeding in dollar amount either x,25,000 or five percent (5%)
of c:Ze total estimated cost of this contract.
(b) The Contractor shall not, without the prior written consent
of the Contracting Officer, place any subcontract which (i) is on a
co or cost-plus-a-fixed-fee basis, or (ii) is on a fixed-price basis
exceeding in dollar amount either t25,000 or five percent (5%) of the
total estimated cost of this contract, or (iii) provides for the
fabrication, purchase, rental, installation or other acquisition, of
any item of industrial facilities, or of special tooling having a value
in excess of ??I,000, or (iv) is on a time-and-i:material or labor-hour
basis, or (v) involves research and development work. The Contracting.
Officer may, in his discretion, ratify in writing any such subcontract;
such action shall constitute the consent of the Contracting Officer as
required by this paragraph (b).
(c) The Contractor agrees that no subcontract placed under this
contract shall provide for payment on a cost-plus-a-percentage-of-cost
basis.
(CPFF Apr. 18, 158)
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(d) The Contracting Officer nay, 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 constied to constitute a deter-
r:mination of the allowability of any cost under this contract, unless
such approval specifically provides that it constitutes a determination
of tho allowability of such cost.
(e) The Contractor shall give the Contracting Officer i.n_lediato
notice in writing of any action or suit filed, and prompt notice of
any claim made against the Contractor by any subcontractor or vendor
which. in the opinion of the Contractor, may result in litigation,
related in any way to this contract with respect to which the Con-
tractor i.:ay be entitled to reimbursement from the Government,
(f) (AFPI 7-203.8) The Contracting Officer may approve all
or part of the Contractor's purchasing system and from tine to time
rescind or roinstate such approval. Such approval shall be deemed
to fl,ufi1 the requirements for obtaining the Contracting Officer's
consc..t to subcontracts as prescribed in paragraph (b) above.
UTILIZATION OF SIaLALL BUSINESS CONCERNS (ASPR 7-104.14 AFPI 7-403 e 9)
(a) It is the poll.cy of the Government as declared by the
Congress to bring about th greatest utilization of business
concerns which is consi~,tont with efficient production.
(b) The Contractor agrees to accomplish the maximum amount of
subcontracting to si.zall business concerns that the Contractor finds
to be consistent with the efficient perform .nee of this contract.
TER&iINATION (ASPR 8-702 AFPI 7-403.1.0)
(a) The performance of work under the contract nay be terminated
by the Government in accordance with this clause in whole, or from time
to tine in part, (1) whenever the Contractor sha].1 default in performance
of this contract in accordance with its terms (including in the ter-Li
"default" any such failure by the Contractor to make progress in the
prosecution of the work hereunder as endangers such performance), and
shall fCil to cure such default within a period of ten days (or such
longer periods as the Contracting Officerr:ay allow) after receipt from
the Contracting Officer of a notice specifying the default, or (2) when-
ev-r for any reason the Contracting Officer shall determine that such
ten.,d ation is in the best interest of the Government. Any such
termination shall be effected by delivery to the Contractor of a
Notice of Termination specifying whether termination is for the default
of the Contractor or for the convenience of the Government, the extent
to which performance of work under the contract is terminated, and the
date u,.-)on which such termination becomes effective. If after notice of
termination of this contract for default under (1) above, it is
(CPFF Apr. 18, '58)
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determined that the Contractor's failure to perform or to make progress
in performance is due to causes beyond the control and without the
fault or negligence of the Contractor pursuant to the provisions of the
clause of this contract relating to excusable delays, the Notice of
Termination shall be deemed to have been issued under (2) abo-ve, and the
rights and obligations of the parties hereto shall in such event be
governed accordingly.
(b) After receipt of a Notice' of Termination and except as other-
wise directed by the Contracting Officer, the Contractor Shall (1) stop
work under the contract on the date and to the extent specified in the
Notice of .Teminat1 n;J2) place no further err'iers_ ar- st kaontracts for
materiz Is, services, or faciltti~ exce;rt as may be necessary for core--- -
.pletion of such portion of the work under the contract as is not
terminated; (3) terminate all orders and subcontracts to the extent that
they relate to the performance of work terminated by the Notice of
Termination; (4) assign to the Gov-rnment, in the manner and to the
extent directed by the Ccntracting`Officer, all of the r-i? Apt, title,
and interest of the Contractor under the orders or subcontracts so
terminated, in which case the Government shall have the right, in its
discretion, to settle or pay any or all claims arising out of the
termination of such orders and subcontracts; (5) with the approval or
ratification of the Contracting Officer, to the extent he may require,
which approval or ?atification shall be final and conclusive for all
p-arposes of this c::.ause, settle ail outstanding liabilities and all
claims arising out of such termination of orders and subcontracts the
cost of which would be reimbursable, in whole or in part, in accord-
ance with the provisions of this contract; (6) transfer title (to the
extent that title has not already been transferred) and, in the manner,
to the extent, and at the times directed by the Contracting Officer,
deliver to the Government (i) the fabricated or unfatmicated parts, work
in process, completed work, supplies, and other material produced as a
--'part of,?or. ac uired.._an_xespeet of the performance of, the work terminated
by the Notice of Termination, (ii) the dcnploted '. or paf tially' cnnpletod
plahsq',drawings, information, and other property which, if the contract
had been completed, would be required to be furnished to the Government,
and (iii) the jigs, dies, and fixtures, and other speczai Coals and toil -.
acquired or manufactured for the performance of this contract for the
cost of which the Contractor has been or will be reimbursed under
this contract; (7) use its best efforts to sell in the manner, at the
times, to the extent, and at the price or prices directed or authorized
by the Contracting Officer, any property of the types referred to in
provision (6) of this paragraph, provided, however, that the Contractor
(i) shall not be required to 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 Government to the
(CPFF Apr. 18, 158)
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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 performance
of such part of the work as shall not have been terminated by the Notice
of Termination; and (9) take such action as may be necessary, or as the
Contracting Officer may direct, for the protection and preservation of
the property related to this contract which is in the possession of the
Contractor and in which the Government has or may acquire an interest.
The Contractor shall proceed immediately with the performance of the
above obligations notwithstanding any delay in determining or adjusting
the amount of the fixed-fee, or any item or reimbursable cost under this
clause. At any time after expiration of the plant clearance period, as
defined in Section VIII, Armed Services Procurement Regulation, as it
may be amended from time to time,',the Contractor may submit to the
Contracting Officer a lists certified as to quantity and quality, of any
or all items of termination inventory not previously disposed of,
exclusive of items the disposition of which has been directed or author-
ized by the Contracting Officer, and may request the Government to remove
such items or enter into a storage agreement covering them. Not later than
fifteen (15) days thereafter, the Government will accept title to such
items and remove them or enter into a storage agreement covering the
same, provided that the list submitted shall be si;[~,ject to verification
by the Contracting Officer upon removal of the items, or if the items
are stored, within forty-five (45) days from the date of submission of
the list, and any necessary adjustment to correct the list as submitted
shall be made prior to final settlement.
(c) After receipt of a Notice of Termination, the Contractor shall
submit to the Contracting Officer its termination claim in the form and
with the certification prescribed by the Contracting Officer. Such
claim shall be submitted promptly but in no event later- than two years
from the effective date of termination, unless one or more extensions in
writing are granted by the Contracting Officer upon request of the
Contractor made in writing within such two-year period or authorized
extension thereof. However, if the Contracting Officer determines that
the facts justify such action, he 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 time allowed, the Contracting Officer may determine, on the
basis of information available to him, the amount, if any, due to the
Contractor by reason of the termination and shall 'hereupon pay to the
Contractor the amount so determined.
(d) Subject to the provisions of paragraph (c), the Contractor
and the Contracting Officer may agree upon the whole or any part of the
amount or amounts to be paid (including an allowance for the fixed-fee)
to the Contractor by reason of the total or partial termination of work
pursuant to this clause. The contract shall be amended accordingly,
and the Contractor shall be paid the agreed amount.
(CPFF Apr. 18, '58)
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(e) In the event of the failure of the Contractor and the
Contracting Officer to agree in whole or in part, as provided in
paragraph (d) above, as to the amounts with respect to costs and
fixed-fee, or as to the amount of the fixed-fee, to be paid to the
Contractor in connection with the termination of work pursuant to 4is
clause, the Contracting Officer shall determine, on the basis of
information available to him, the amount, if any., due to the
Contractor by reason of the termination and shall pay to the
C tr'ctnr the amount determined as follows:
(1) If the settlement includes cost and fixed-fee
(i) There shall be included therein all costs and.
expenses reimbursable in accordance with this contract, not p~?ev.ouslr
paid to the Contractor for the performance of this contract prior t' the
effective date of the Notice of Termination, and such of these cos-:J as
may continue for a reasonable time thereafter with the approval of or
as directed by the Contracting Officer, provided, however, that the
Contractor shall proceed as rapidly as practicable to discor'l-inue
such costs.
(ii) There shall be included therein so far as r_,~t
included under (i) above, the cost of settling and paying claims arising
outs of tho termination of work under subcontracts or orders, as provided
in paragraph (b)(5) above, which are properly chargea ble to the terminated
pcrtion of the cont. ~:.r ,.
(iii) There shall be included therein the reasonable costs
of settlement, including accounting, legal, clerical, and other expenses
reasonably necessary for the preparation of settlement claims and
r:.pporting data with respect to the terminated portion of the contract
and for the termination and settlement of subcontracts thereunder,
together with reasona:.'e storage, transportation, and other casts Licurred
in connection with the protection or disposition of termination inventory;
provided, however, that if the termination is for default of the
Contractor there shall not be included any amounts for the preparation
of the Contractor's settlement proposal.
(iv) There shall be included therein a portion of too
fixed-fee payable under the contract determined as follows:
(A) In the event of the termination of this
contract for the convenience of the Government and not for tho ~faul',
of the Contractor, there shall be paid a percentage of the fee equi.;:alent
to the percentage of the completion of work contemplated by tLe co-. ;;rac t,
less fixed-fee payments previously made hereunder,
(CFA Apr. 18, 158)
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(B) In the event of the termination of this
contract for the default of the Contractor, the total fixed-fe ; payable
shall be such proportionate part of the fee (or, if this contract
calls for articles of different types, of such part of the fee as is
reasonably allocable to the type of articles under consideration) as the
total number of articles delivered to and accepted by the Goverment
bears to the total number of articles..of-a like kind called for by this
contract.
If the amount determined under this paragraph is
less than the total payment of fixed-fee theretofore made to the
Co_itractcr, the Contractor shall repay to the Government the excess
amount.
(2) If the settlement includes only the fixed-fee, the
amount thereof will be determined in accordance with subparagraph (e)
(l) Div) above.
(f) The Contractor shall have the right of appeal, under the
clause of this contract entitled "Disputes," from any determir tion
made by the Contractiig 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 'r._ave no such right of appeal. In any case where
the Contracting Officer has made a determination of he amount due
-ragraph (c) or (e) above, the Government sha. 1 pay to the
Cc_:tra.ctor the following: (i) if there is no right of appeal hereunder
or .. no timely appeal has been taken, the amount so determined by the
Contracting Officer, or (ii) if an appeal has been taken, the amount
fin..lly determined on such appeal.
(g) In arriving at the amount due the Contractor under +.:.is
clause there shall be deducted (1) all unliquidated advance or other
unliquidated payments theretofore bade to the Contractor, (2) .rny
claim which the Government may have against the Contractor in
connection with this contract, and (3) the agreed price for, or the
proceeds of sale of, any materials, supplies, or other things acquired
by the Contractor or sold pursuant to the provisions of this clause
and not otherwise recovered by or credited to the Government.
(h) In the event of a partial termination, the portion of thF
fixed-fee which is payable with respect to the work under the continued
portion of the contract shall be equitably adjusted by agreement between
the Contractor and the Contracting Officer, and such adjustment shall be
evic:onced by an amendment to this contract.
(i) The Government may from time to time, under such terms and
conditions as it may prescribe, make partial payments and Dayments
on account against costs incurred by the Contractor in connection with
the terminated portion of the contract whenever in the opinion of the
-14-
(CPFF Apr. 18, '58)
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Officer the aggregate of such payments shall be within the
amount to which the Contractor will be entitled hereunder. If the total
of such payments is in excess of the mount finally determined to be duo
under this clause, such excess shall be payable by the Contractor to the
Government upon demand, together with.interest computed at the rate of
6% per anntu.i, for the period from the date such excess payment is received
by the Contractor to the date on which such excess is repaid to the Govern-
ment; provided, however, that no interest shall be charged with respect to
any such excess payment attributable to a reduction in the Contractor's
claim by reason of retention or other disposition of termination inventory
until ten days after the date of such retention or disposition.
(j) The provisions of this clause relating to the fixed-foe shall
be inapplicable if this contract does not provide for payment of a fixed-
fee.
(k) Unless otherwise provided for in this contract, or by applicable
statuto, the Contractor from the effective date of ton-mination and for
a pori.,3 of six years after final settlement under this contract, shall
proscr-,-e and make available to the Government at all reasonable times at
the of'ice-of the Contractor, but without direct charge to the Govern-
ment, all its books, records, documents, and other evidence bearing on
the cost and expenses of the Contractor under this contract and relating
to the work terminated hereunder, or, to the extent approved by the
Contracting Officer, photographs, r.iicrophctographs, or other authentic
reproductions thereon,
EXCUSABLE DELAYS (ASPR 7_.,2`03.11 AFFI 7-303.10)
(a The Contractor shall not be in default by reason of any failure
in performance of this contract in accordance with its tern's (including
any failure by the Contractor to make progress in the prosecution of the
work hereunder which endangers such performance) if such failure arises out
of causes beyond the 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;
quarantine restrictions; strikes; freight embargoes, unusually severe
weather; and failure of subcontractors to perform or make progress due to
such causes, unless the Contracting Officer shall have determined that the
supplies or services to be furnished under the subcontract were obtainable
frori other sources and shall have ordered the Contractor in writing to
procure such s rvicos or supplies from such other sources, and the Contractor
shall have failed reasonably to comply with such order. Upon request of the
Contractor, the Contracting Officer shall ascertain the facts and extent
of such failure and, if he shall determine that such failure was occasioned
by any ~.n.e or more of the said causes, the delivery schedule shall be
revise; accordingly., subject to the rights of the Government under the
clan.-co hereof entitled "Tesm_mi.nation".
(CPFF Apr. 18, 158)
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(b) If the Contractor becomes unable to complete the contract work
and ruke delivery at the tine specified in the Schedule because of technical
difficulties, notwithstanding the exercise of good faith and diligent
effort- --i the p orfornance of the work called for hereunder, it nay give
the :'c.Itructing Officer written notice of the anticipated default with
reasons therefor. Such notice and reasons shall be delivered not loss
than forty-five (45) days before the completion date specified in the
Schedule or within such time as the Contracting Officer deans sufficient..
If sue'- notice is duly given, then to the extent the interest of the
Govcrr ent i:iakes an extension desirable the Contracting Officer nay, in
his discretion, extend the period of tine specified in the Schedule for
such period as he deers advisable, and th .s contract shall then be modified
in writing accordingly,
DISPUTES (ASPR 7-103.12 AFPI 7-403.12)
(a) Except as otherwise provided in this contract, any dispute
concerning a question Of fact arising under this contract which is not
disposed of agreement shall io decided by the Contracting Officer, who
shall reduce his decision to writing and mail or otherwise furnish a
copy thereof to the Contractor. The decision of the Contracting Officer
shall ho final and conclusive unless, within 30 days from the date of
receipt of such copy, the Contractor nails or otherwise furnishes to the
Contracting Officer a wri.bton appeal addressed to the Secretary. The
decisi,-.n of the Secretary or his duly authorized representative for the
determination of such appeals shall be final and conclusive unless
deterrd_ned by a court of competent jurisdiction to have been fraudulent,
or capricious, or arbitrary, or so grossly erroneous as necesarily to
imply bed faith, or not supported by substantial evidence. In connection
with any appeal proceeding under this clause, the Contractor shall be
afforded an opportunity to be heard and to offer evidence in support of
its appeal. Pending final decision of a dispute hereunder, the Contractor
ha 1 oed diligently with the performance of the contract and in
accordance with the Contracting Officer's decision.
(b) This "Disputes" clause does not preclude consideration of law
luestions in connection with decisions provided for in paragraph (a)
7i.bovo: Provided, That nothing in this contract shall be construed as
making final the decision of any administrative official, representative, or
board on a question of law,
NOTICE AND ASSI:TANCE REGAINING PATENT INFRINGIiJi~ENT (ASPn 9-104 AFPI 7-404.13)
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
ind in r :ason , ae written detail, each notice or clairi of patent infringe-
lent based on the porforr:ianc of this contract of which the Contractor
.as knowlc-'_";e.
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(CPFF .9pr_.l8) 158)
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(b) In the event of litigation against the Government on account of
any claii7 of patent infringement arising out of the performance of this
contract or out of the use of any supplies f a.rnished or work or services
performed hereunder, the Contractor shall ft4 nish to the Government, upon
roquost, all evidence and information in Possession of the Contractor
pertaining to such litigation. Such evic en;Ge and infox cation shall be
furni,o'iod at the expense of the Government except in those cases in which
the Cc-itractor has agreed to indemnify the Government against the claim
being .wssortod.
BUY XL RICAN ACT (ASPR 7-103.14 AFPI 7-03.14)
(a) In acquiring end products, the 'Buy American Act (41 U.S. Code
lOa-d) provides that the Government give preference to domestic source
end products. For the purpose of this clause:
(i) "components" r..eans those articles, materials, and supplies,
which are directly incorporat;d in the and. products;
(ii) "end products" moans those articles, materials, and supplies,
which are to be acquired under this contract for public use; and
(iii) a "domestic source end product" means (A) an unrianufacturod
end product which has been mined or produced in the United States and (B)
an end product manufactured in the United States if the cost of the
components thereof which. are mined produced, or manufactured in the United
States exceeds 50 percent of tho cost of all its components, For the
purposes of the (a. (iii)(B), components of foreign on in of the sane type
or kind as the products referred to in (b)(ii) or (iii) of this clause
shall be treated as components mined, produced, or manufactured in the
United States.
(b) The Contractor agrees that there will be delivered under this
contract only domestic source end products, except end products;
(i) which are for use outside the United States;
(ii) which the Government determines are not mined, produced, or
manufactured in the United States in sufficient and reasonably available
commercial quantities and of a satisfactory quality;
(iii) as to which the Secretary determines the domestic preference
to be inconsistent with the public interest; or
(iv) as to which the Secretary deter_r_iines the cost to the Govern-
mont to be unreasonable,.
(CPFF Apr., 18, f58)
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C0VICT LABOR (ASPP 12-203 AFPI 7-403.15)
In connection with the perforDar;ce of work under this contract,
the Contractor agrees not to employ any person undergoing sentence of
inpriscn;. ont at hard labor.
EIGHT TOUR LAW OF 1912 (ASPR 12-303.1 AFYI 7-403.16)
.phis contract, to the extent that it is of a character specified in
the Eight-Hour Law of 1912 as amended (40 U.S. Code 324-326) and is not
covered by the Walsh Healey Public Contracts Act (41 U.S. Code 35-45), is
subject to the following provisions and exceptions of said Eight-Hour
Law of 1912, as amended, and to all other provisions and exceptions of
said Law:
No laborer or mechanic doing any part of the work contemplated by
this contract, in the orTploy of the Contractor or any subcontractor
contracting for any part of the said work contemplated, shall be required
or permitted to work more than eight hours in any one calendar clay upon
such work, except upon the condition that compensation is paid to such
laborer or mechanic in accordance with the provisions of this clause.
The wages of every laborer and mechanic employer by the Contractor or
any subcontractor engaged in the porforr.iance of this contract shall be
por.iputed on a basic day into of eight hours per day; and work in excess
of eight hours per day is permitted only upon the condition that every
such laborer and mechanic shall be compensated for all hours worked in
excess of eight hours per day at not less than one and one-half ties the
basic rate of pay. For each violation of the requirements of this clause
a penalty of five dollars shall be imposed for each laborer or mechanic for
every calendar day in which such employee is required or permitted to
labor more than eight hours upon said work without receiving compensation
computed in accordance with this clause, and all penalties thus imposed
shall be withheld for the use and benefit of the Government.
NONDISCRmINATION IN EIPLOYiENT (ASPR 12-802 AFPI 7-403.17)
(a) In connection with the porforr..anco of work under this contract,
the Contractor agrees not to discriminate against any o,leyoc or applicant
for employment because of race, religion, color, or national origin. The
dforesaid provision shall include, but not be limited to, the following:
e:_iploynent, upgrading, demotion/or transfer; recruitment or recruitment
advertising; layoff or termination; rates of pay or other forms of
compensation; and selection for training, including apprenticeship. The
Contractor agrees to post hereafter in conspicuous places, availaalo for
employees and applicants for employment, notices to be provided by the
Contracting Officer setting forth the provisions of the nondiscrimination
clause.
(b) The Contractor further agrees to insert the foregoing provision
in all subcontracts hereunder, except subcontracts for standard commercial
supplies or raw materials.
(CPFF Apr. 18, 1958)
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OFFICL'TS NOT TO BENNEFIT (ASPR 7-103,19 AFPI 7-403,18)
No member of or delegate to Congress, or resident ccr,
missioner,
shall be admitted to any share or part of this contract,, or to any
boneft.'-. that nay arise therefrom; but this provision shall not be
cons ,,r L..c., to extend to this contract if made, with a corporation for
its general benefits
COVE J,'T AGAINST CONTINGENT FEES (ASPR 7,103.20 AFPI 7-403.19)
The Contractor warrants that no person or selling agency has
been employed or retained to solicit or pocuro this contract upon
an agreement or understanding for a comet ssion, percentage, broker-
age, or contingent fee, excepting bona fide employees or bona fide
?stablished commercial or selling agencies maintained by the Contractor
for the purpose of securing business, For broach or violation of this
warranty the Government shall have the right to annul this contract
without liability or in its discretion to deduct from the contract
price or consideration, or otherwise recover, the full amount of such
Comm lion, percentage, brokerage or contingent fee.
PATENT i.IGHTS (ASPR 9-107 AFPI 7-403.20)
(a) As used in this clause, the following terms shall have the
cleanings set forth below:
(i) The term "Subject Invention" means any invention,
improvement or discovery (whether or not patentable) conceived or first
a;tual y reduced to practice either (A) in the performance of the
experimental, developmental, or research work called for or required
under this contract: or (B) in the performance of any experimental,
development.,:l, or research work relating to the subject matter of
this contract which was done upon an understanding in writing that a
contract would be awarded; provided that the torn:. "Subject Invention"
shall not include any invention which is specifically identified and
listed in the Schedule for the purpose of excluding it from the
license granted by this clause.
(ii) The tern "Technical Personnel" means any person employed
by or working under contract with the Contractor (other than a sub-
contractor whose responsibilities with respect to rights accruing to
the Government in inventions arising under subcontracts set forth in
paragraphs (g), (h), and (i) below) who, by reason of the nature of
his duties in connection with the p~-rforraznce of this contract, would
reasonably be expected to make inventions.
(iii) The terms "subcontract" and "subcontractor" mean any
subcontract or subcontractor of the Contractor, and any lower-tier
(CPFF ~-pr. 18, 158)
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subcontract or subcontractor under this echtract.
(b)(1) The Contractor agrees to and does hereby grant to the
Government 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
r.:anufacture, use and disposition according to law, of any article or
r:_.aterial, and in the use of any method. No license granted herein
shall convey any right to the Government to manufacture, have nanufacturcda
or use any Subject Invention for the purpose of providing services or
suppli: s to the g-.neral public in cor.:pet.tion with the Contractor or
the Contractor's colemorcial licensees in the licensed fields,
(2) With respect to:
Personnel;
,(i) any Subject Invention made by other than Technical
(ii) any Subject Invention conceived prior to, but first
actually reduced to practice in the course of, any of the experimental,
developmental, or research wort, 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
in (b)(l) above;. to convey title as provided in (d)(ii)(B)
or (d)~iv) below, and tc convey foreign rights as provided in (e)
below, ;hall be limited to the extent of the Contractorts right to
grant the same without incurring any obligation to pay royalties or
other compensation to others solely on account of said grant.
Nothing contained in this Patent bights clause shall be doomed to
grant any license under any invention other than a Subject Invention.
(c) The Contractor shoal furnish to the Contracting Officer the
following information and reports concerning Subject Invention which
reasonably appears to be patentable:
(i) a written disclosure promptly after conception or first
actual reduction to practice of each such Invention together with a
written st:.tenent specifying whether or not a United States patent
application claiming the invention has been or will be filed by or
on behalf of the Contractor;
(ii) interim reports, at least every twelve months,
co:-:Lmencing with the date of this contract, each listing all such
Inventions conceived or first actually. reduced to practice more than
throe months prior to the date of the report, and not listed on a
prior interim report, or certifying that there are no such unreported
Inventions; and
(CPF ._l~i . 18, 158)
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(iii) prior to final settlement of this contract, a final
report listing all such Inventions including all those previously
--i 'ed in interim reports,
(d) In connection with each Subject Invention referred to in
(c)(i) above, the Contractor shall do the following:
(i) if the Contractor specifies that a United States patent
application claiming such Invention will be filed, the Contractor shall
file or cause to be filed such application in 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 Contracting Officer at the earliest
practicable date and in any event nqt 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
t:'.ed thereafter notifies the Contracting Officer to the contrary),
t a' Contracting Officer shall:
(A) inform the Contracting Officer in writing at the
earliest practicable date of any publication of such Invention made by
or known to the Contractor or, where applicable, of any contemplated
publication by the contractor, stating the date and identity of such
publication or contar!plated publication; and
(B) convey to the Government the Contractor's entire
right, title, and interest in such Invention by deliverying to the
Contracting Officer upon written request such duly executed instruments
( =-;pared by the Government) of assignment and application, and such
ot-rier papers as are deemed necessary to vest in the Government the
Contractor's right, title and interest aforesaid, and the right to
apply for and prosecute patent applications covering such Invention
throughout the world, subject, however, to the right of the Contractor
specified in (e) below to file foreign applications, and subject
further to the reservation of a non-exclusive and royalty-free
license to the Contractor (and to its existing and future associated
and affiliated companies, if any, within the cor;,orate structure of
which the Contractor is a part) which license shall be assignable to
the successor of that part of the Contractor's business to which such
Invention pertains;
(iii) the Contractor shall furnish promptly to the
Contracting Officer on request an irrevocable power of attorney to
inspect and make copies of each United States patent application
filed by or on behalf of the Contractor covering any such
Invention;
(CPFF Apr. 18, '58)
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(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 State$ patent application filed by or
on behalf of the Contractor, the Contractor shall so notify the
C,.aracting Officer not less than s,cty days before the expiration of
t...~ response period and, upon written request, deliver to the Contracting
Officer such duly executed instruments (prepared by the Government) as
are deemed necessary to vest in the-Government the Contractor's entire
r ?:h_t, title, and interest in such Ipvention and theapplication, subject
t: the reservation as specified in (cl)(ii) above; and
(v) the Contractor shall deliver to the Contracting Officer
duly executed instruments fully confirmatory of any license rights
herein agreed to be granted to the Government.
(e) The Contractor, or those other than the Government deriving
rights from the Contractor, shall have the exclusive rights to file
applications on Subject Inventions in each foreign country within:
(i) nine months from the date a correspoY_aing United States
a plication is filed;
(ii) six months from the date permission is granted to file
foreign applications where such filing had been prohibited for security
reasons; or
(iii) such longer period as may be approved by the Contracting
Officer. The Contractor shall, upon written request of the Contracting
Officer, convey to ti..e 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
sup:licenses, which license and right shall be assignable to the
successor of that part of the Contractor's business to which the Subject
Invention pertains.
(f) If the Contractor fails to deliver to the Contracting Officer
the interim reports required by (c)(ii) above, or fails to furnish the
written disclosures for all Subject Inventions required by (c)(i) above
shown to be due in accordance with any interim report delivered under
(c)(ii) or otherwise known to be unreported, there shall be withheld
from payment until the Contractor shall have corrected such failures
either ten percent (10) of the amount of this contract, as from time
to time amended, or five thousand dollars (45,000), 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
0';5,000), whichever is less, shall have been set aside, such reserve
(CPFF Apr. 18, '58)
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or balance thereof to be retained until the Contractor shall have
furnished to the Contracting Officer:
(i) the final report required by (c)(iii) above;
(ii) written disclosures for all Subject Inventions required
by (c,(i) above which are shown to be diie. in accordance with interim
reports delivered under (c)(ii) above or-in accordance with such final
reports or are otherwise known to be unreported; and
(iii) the information as to any. subcontractor required by (h)
below., The r.:axirmri ar.lount which may be withheld under this paragraph
(f) shall not exceed ten percent (100) of'. the amount of this contract or
five thousand dollars (f;>5,000), whiehove' is loss, and no a;:.iount shall
be withhold under this paragraph (f) when the amount specified by t'--is
paragraph (f) is being withhold under other provisions of this contract.
The withholding of any amount or subsequent payment thereof to the
Contractor shall not be construed as a waiver of any rights accruing to
the Government under this contract. This paragraph (f) shall not be
construed as requiring the Contractor to withhold any amounts from a
subcontractor to enforce compliance with patent provisi'ns of a subcontract.
(g) The Contractor shall exert all reasonable effort in negotiating
for the inclusion of this Patent Rights clause in any subcontract here-
under of three thousand dollars (`3,000) or more having experimental,
developmental, or research work as one of its purposes. In the event of
refusal. by a subcontractor to accept the Patent Ri.4ghts clause, the
Contractor shall not proceed with the subcontract without written
authorization of the Contracting Officer, and upon obtaining such
authorization, shall cooperate with the Government in the negotiation
with such subcontractor of an ac eptable patent rights clause; provided,
however, that the Contractor shall in any event require the subcontractor
to grant to the Government patent rights under Subject Inventions of no
loss scope and on no less favorable teas 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 third party beneficiary, and the Contractor
hereby assigns to the Government all tho rights that the Contractor would
have to enforce the subcontractor's obligations for the benefit of the
Government with respect to Subject Inventions. The Contractor shall not
be obligated to enforce the agreements of any
(CWF Apr. 18, 158)
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subcontractor hereunder relating to Subject Inventions.
(i) When the Contractor shows that it has been delayed in
tho performance of this contract by reason of its inability to obtain
in accordance with (g) above a suitable patent rights clause from a
cual._fied subcontractor for any item,.or service required under this
cc tract for which the Contractor itself does not have available
f..?:ilities or qualified personnel, the Contractor's delivery dates
s. l1 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 extent, if a iy, an additional extension of
the delivery dates and an increase iri contract prices based upon
additional cost 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 i, cle to
obtain a qualified subcontractor as set forth above, the Ccntractor
may submit to the Contracting Officer a written r~ .< ._:at for waiv r 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 for a waiver or modification of said requirenent, the Contracting
Officer 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 denVil of such request by
the Contracting Officer, this contract shall thereupon automatically
terr-1inate and the rights and obligations of the parties shall be govern-
ed by the provisions of the clause of this contract providing for
to:urination for the convenience of the Government.
21. GOVERN ENT PROPERTY (ASPR 13-503 AFPI 7-403.21)
(a) The Government shall deliver to the Ccntractor, for use in
connection with and under the terms of this contract, the property
described in the Schedule or stecifications, together with such related
data and information as the Contractor may request and as may reasonably
be required for the intended use of such property (hereinafter referred
to as "Government-furnished Property"). The delivery or performance
dates for the supplies or services to be furnished by the Contractor
under this contract are based upon, the expectation that Governrient-
fu_rnished Property suitable for use will be delivered to the Contractor
at the times stated in the Schedule or, if not so stated, in sufficient
time to enable the Contractor to meet such delivery or performance
dates. In the event that Government-furnished Property is not
delivered to the Contractor by such time or times, the Contracting
Officer shall, upon timely written request made by the Contractor,
make a determination of the delay occassioned the Contractor and shall
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(CPFF Apr. 18, '58)
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equitably adjust the estinatod cost, fixes, fee, or delivery or performance
dates; or all of then, and any other contractual provisions affected
by such delay, in accordance with the procedures provided for in the
clause of this contract entitled "Changes." In the event that Govern-
r.iont-foc.rnishod Property is received by the Contractor in a condition
pot suitable for the intended use, the Contactor shall, upon, receipt
there:,-' notify the Contracting Officer of such fact and, as directed
by the Contracting Officer, either (i) return such property at the
Govorn:?.ent's expense or otherwise lispose of the property or (ii)
effect repairs or nodifications. Upon coaplotion cf (i) or (ii) above,
the Cc:.tracting Officer upon written requast of the Contractor shall
equita:oly adjust the estimated cost, fixed fee, or delivery or performance
dates, or :~11 of thou, and any other contractual provisi^n affected
by the return or disposition, or the repair or .:codification, in accord-
ance with the procedures provided for in the clause of this contract
entitled "Changes." The foregoing provisions for adjustr.icnt are exclusive
and the Government shall not be liable to suit for broach of contract
by reason of any delay in delivery of Govornrrent-furnished Property
or delivery of such property in a condition not suitable for its
intended used
(b) Title to all property furnished by the Government shall remain
in the Govornrient, Title to all property purchased by the 6ontractor,
for tho cost of which the Contractor is entitled to be rcirrbursod as a
direct iter:i of cost under this contract, shall pass to and vest in the
Gcverz:,rl;nt upon dclivory of such property by the vendor. Title to
other prop-:rty, the cost of which is roiribursablo to the Contractor
under this contract, shall pass to and v-,st in the Government upon (i)
issuance for use of such property in the porfornanco of this contract,
or (ii) co::.iencenent of processing or use of such property in the
pcrf=:k.nco of this contract, or (iii) roinbursorlent of the cost thereof
by the Government, whichever first occurs. All Government-furnished
Property, tog.~thor with all property acquired by the Contractor title
to which vests in the Goverment under this paragraph, are subject
to the provisions of this clause and are hereinafter collectively
reforrol to as "Government Property."
(c) Title to the Government Property shall not be affected by the
incorporation or attachment thereof to any property not owned by the
Govornr:.ont, nor shall such Governrlcnt Property, or any part thereof, be
or become a fixture or lose its identity as personalty by reason of
affixation to any realty. The Contractor shall maintain adequate
property control records of the Government Property and shall identify
the Govertulent Property as such in accordance with the rcquirerients
of the mr.tanual for Control of Government Property in Possession of
Contractors" (Appendix R. Arr:ed Services Procureuent Regulation), as
in effect on the date of the contract, which Manual is hereby incor-
porated by reference and rude; a part of this contract.
(CPFF Apr. 18, 1 58)
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(d) The Covernr`ent P^operty provided or furnished pursuant i
the tc rT::s of this contract sh 1, other-,r-se ,xovided herein,
be used .only for. the performance of this con"r__ct.
~e) The Contractor shall r:ainta.in aid adsyinister, in accdrdance
with sound industrial practice, a progr:.r for the maintenance, repair,
pro le-tion and preservation of G ,anent proper. ty, sn as to assure
its full availability and usatiiess for the performance of this
contract. The Contractor shall take all reasonable steps to comply
with all appropriate directions or instructions which the Contracting
Officer. r.'y prescribe as reasonably necessary for the protection of
O~1erni- e.n't pr)perty.
{f) {'_) The Contractor shall not be liable for any loss of or
r?a-r a.r = t.--. the SovArrnent proper. ty, or for errenses incidental to
such loss - r damage, except ?'r_ t the Contractor shall he responsible
f5_" any such Loss or cdanaCe (including expenses incidental thereto)
(r.) which res'.;d-ts from willf`L;1 ndsccnduct or lack of goad faith on the
a.rt :'f any of the Contractor's directors or cffAcers, or on the part
of and,. of its managers, superintendents, or other equivalent represen-
t.).t=+.-; es whD have sup erv- s n i..n or direction of (7) all or substantially
1 of thy: Contr.ac ton's business, or (II) all or substantially 1
of the Contractors operations at any one slant or Separate location
in which this ;tact: is being performed, or ( I ~.) al separate and
C3Z1p7.ete rajor operation in connection with the performance
of t'-i's contract; or (.) which results from a failurcir.n the part of
the Contractor., due to the willful misconduct or lack of good faith
or1 the par. t of any of its directors, officers, or other representatives
r.. '~-cnec :;r~ )
in sub