NEGOTIATED CONTRACT CONTRACT NO. TA 3034

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Document Number (FOIA) /ESDN (CREST): 
CIA-RDP89B00709R000400880009-0
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RIPPUB
Original Classification: 
S
Document Page Count: 
57
Document Creation Date: 
December 22, 2016
Document Release Date: 
January 10, 2011
Sequence Number: 
9
Case Number: 
Publication Date: 
May 28, 1957
Content Type: 
MISC
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Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 S4 PCB - 13993 /13 4 NEGOTIATED CONTRACT Contract No. TA 3034 Westinghouse Electric Corporation Friendship International Airport Baltimore 27, Maryland Contract for: Avoidance System Amount: $525,429 (Estimated) Mail Invoices to: Performance Period: See Schedule 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 Pensylvania, 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 herein. The rights and obligations of the parties to this contract shall be subject to and governed by the attached Schedule and General Provisions which together with this signature page and the accompanying Certificate comprise this Contract No. TA 3034. In the event of any inconsistency between the Schedule and the General Provisions, the Schedule shall control. IN WITI SS WHEREOF, the parties hereto have executed this contract as of F X77 1957. Signatures: orlyl 25X1 BY TITLE TITLE Contracting Officer Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Extracts from Minutes of a Meeting of the Board of Directors of Westinghouse Electric Corporation Held July 29, 1953 "Resolved, that the duly appointed Managers of the Regional Offices and of the Government Office in Washington, D.C., of the Corporation, be and they hereby are authorized and empowered to sign proposals and enter into contracts for the sale of apparatus and supplies on behalf of the Cor- poration." 25X1 The following named persons are the duly appointed Managers of the Regional Offices and the Government Office, Washington, D.C., of Westinghouse Electric Corporation. Atlanta Chicago New York Philadelphia Pittsburgh St. Louis San Francisco Washington, D. C. (Government Office) I, T. Fort, Vice President of Westinghouse Electric Corporation, do hereby certify that the foregoing statements are correct. Witness my hand and the seal of the said Corporation duly attested by its Assistant Secretary this Ti .... ... U ..............day of......... ......................................... 19..... .. FORM 11882Q PRINTED IN U.S.A. Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 -- 1 iI Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 INDEX OF SCHEDULE PART NO, TITLE PAGE PART I CONTRACT WORK .........................o......... 1 PART II PERIOD OF PERFORMANCE AND DELIVERIES ............ 2 PART III ESTIMATED COST AND FIRED FEE 2 PART IV PAIMENTS ........................................ 2 PART V ANTICIPATORY COST ............................... 3 PART VI SPECIAL SECURITY RESTRICTIONS ................... 3 PART VII WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS .... 3 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Contract No. TA 3034 PART I - CONTRACT WORK specification of the avoidance system equipment. the Government. This study phase shall result in detailed The Contractor shall furnish the necessary personnel, materials, supplies, facilities and services, except as otherwise provided herein, and shall do all things necessary to design, develope and test an avoidance system conforming to the Contractor's proposal AAN-30342A. dated 22 January 1957. The contract work shall consist of three phases, as follows: 1. The first will be a design phase in which all parameters will be reviewed. Reference will be made to the results of flight tests on another avoidance system program now being performed fqr 1, h 2. The second phase will consist of the development and fabrication of a breadboard model of the equipment from approved specifications and testing of the electrical designs by means of laboratory breadboard set-ups of all portions of the circuitry. 3. The third phase will consist of the design and construction of a flyable developmental model of the avoidance system. This model will be designed and built using MILE-5400 specifications as a guide only. Complete parts lists will be furnished but no formal non-standard parts and materials procedure will be used. No destructive tests will be performed on.the completed model; however, the following tests shall be made: Explosion - Temperature over the range - 55 degrees C. to ,t 55 degrees C. Vibration - in accordance with MIL-E-5400 specifications. The Contractor shall furnish the Contracting Officer Monthly Letter Progress Reports fully indicating status of design and construction by means of block diagrams, schematics and pertinent technical data as a result of calculations and measurements; and a final report together with a set of reproducible drawings, sketches and change notices to which the flyable developmental model was constructed. Consideration will be given to the fact that it is planned, subject to the results accomplished hereunder and negotiation and execution of a mutually acceptable amendment to this contract, to continue the work to include flight tests with the developmental model installed in a Government-furnished aircraft. Provisions for bailment of such aircraft together with other considerations will be included in the amendment. Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 PART II - PERIOD OF PERFORMANCE AND DELIVERIES The Contractor shall exert all reasonable efforts to complete the contract work in accordance with the following time schedule: Phase 1 - Within one (1) month after receipt of executed contract. Phase 2 - Within thirteen (13) months after receipt of approval by the Contracting officer's representative of the detailed specifications developed under Phase 1. Phase 3 - Within thirteen (13) months after receipt of approval by the Contracting Officer's representative of the detailed specification developed under Phase 1. Work on Phases 2 and 3 will be performed concurrently to reduce the over-all elapsed time. Two (z) MoANN3A'7 Delivery of the final report and drawings shall be made %igem completion of Phase 3. Deliveries of completed items under this contract shall be made f. o. b. Contractor's plant, Baltimore, Md. PART III - ESTIMATED COST AND FIXED FEE 1. The estimated cost of the performance of this contract, exclusive of the fixed-fee, is FOUR HUNDRED NINETY-ONE THOUSAND FIFTY-SIX DOLLARS ($491,056). 2. The fixed-fee for performance of this contract is THIRTY-FOUR THOUSAND THREE HUNDRED SEVENTY-THREE DOLLARS ($34,373). PART IV - PAYMENTS In accordance with the provisions of Clause 4 of the General Provisions of this contract entitled "ALLOWABLE COSTS, 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." It being understood and agreed, without limiting the generalty of the foregoing, that the following shall be considered as allowable items of costs hereunder when incurred or paid by the Contractor and when necessary and required and used for the performance of work hereunder: NEGOTIATED OVERHEAD RATES (a) Overhead Periods - The periods, as contemplated by paragraph (b) of the clause of the General Provisions hereof entitled "Negotiated Overhead Rates", shall be for twelve (12) months each, except Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 that the first period shall extend from commencement of performance under this Contract (Reference General Provision 33 hereof) to 1 January 1958. (b) Billing Rates - Provisional payment on account of all overhead will be made on the basis of billing rates acceptable to the Contracting Officer or his authorized representative pending establishment of final overhead rates in accordance with the clause of the General Provisions hereof entitled "Negotiated Overhead Rates". PART V - ANTICIPATORY COST All. costs which have been incurred by the Contractor on or after January 1957 in anticipation of and prior to the signing of this con rac , 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 cost under this contract., PART VI - 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 to reveal such information by the Contracting Officer or by his duly authorized representative 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 information to any person, public or private, or to any officer or department of the Government without the express consent of the Contracting Officer or his duly authorized rep- resentative for security matters. PART VII - WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS Notwithstanding the requirements of any of the General Provisions of this contract to the contrary, whensoever the Contractor, in perform- ance of the work under this contract, shall find that the requirements of any of the clauses of the General Provisions are in conflict with security instructions issued to the Contractor by the Contracting Officer or by his duly authorized representative for security matters, the Con- tractor shall call the attention of the Contracting Officer to such conflict and the Contracting Officer or his duly authorized representa- tive for security matters shall (i) modify or rescind such security re- quirements or (ii) the Contracting Officer shall issue to the Contractor a waiver of compliance with the requirements of the General Provisions conflicting with such security requirements. Any waiver of compliance with the General Provisions of this contract issued by the Contracting Officer shall be in writing, except that the approval by the Contracting -3- Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 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. Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 C=' rU \i; (J 1. DEFINITIONS .......................................... 1 2. CHANGES ......................... .......-....... ........ 1 3. LIMITATION OF COST ................ .. 2 4. ALLOWABLE COST, FIXED FEE, AND PAYMENT ................. 3 5. RECORDS ............................................... 5 6. GOVERNMENT PROPERTY ....................... 7 7. INSURANCE-LIABILITY TO THIRD PERSONS .................. 11 8. INSPECTION AND CORRECTION OF DEFECTS 13 9. EXCUSABLE DELAYS ...................................... 15 10. SUBCONTRACTS .......................................... 16 11. NOTICE AND ASSISTANCE REGARDING PATENT INFRINGEMENT ... 17 12. FILING OF PATENT APPLICATIONS ......................... 17 13. PATENT RIGHTS .................. ....................... 13 14. AUTHORIZATION AND CONSENT ............................. 24 15. COPYRIGHT ................................. 24 16. REPRODUCTION AND USE OF TECHNICAL DATA 25 17. REPORTING OF ROYALTIES ............... .....:........... 25 18. DISPUTES .............................................. 27 19. BUY AMERICAN ACT ...................................... 28 20. OFFICIALS NOT TO BENEFIT ................. 29 21. COVENANT AGAINST CONTINGENT FEES 29 22. CONVICT LABOR ......................... ....... 29 23. EIGHT-HOUR LATAT OF 1912 ................ ******* 29 24. NONDISCRIMINATION IN EMPLOYMENT ....................... 30 25. WALSH-HEALEY PUBLIC CONTRACTS ACTS .................... 30 26. GRATUITIES 31 ......... ............................. ... 27. EMPLOYMENT OF ALIENS .................................. 31 28. ASSIGNMENT OF CLAIMS .................................. 31 29. MILITARY SECURITY REQUIREMENTS ........................ 32 30. UTILIZATION OF SMALL BUSINESS CONCERNS ................ 34 31. SUPERSEDING SPECIFICATIONS ........ 32. TERMINATION ........................................... 34 33. NEGOTIATED OVERHEAD RATES ... .......................... 40 34. FLIGHT RISK ........................................... 41 35. QUALITY CONTROL SPECIFICATION .........0 0 .............. 36. ALTERATIONS IN CONTRACT ............................... 42 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 As used throughout this contract, the 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 assist- ant 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. (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) The term "Department" means the department or executive agency of the Government represented by the Contracting Officer executing this contract on behalf of the Government. (d) Except as otherwise provided in this contract, the term "sub- contracts" includes purchase orders under this contract. (e) The term "contract work" means all work to be performed under this contract including any studies covering fundamental, theoretical, or experimental investigations; any extension of the investigative find- ings; and theories of a scientific or technical nature into practical application; any tangible items, hereinafter referred to as "supplies," if called for herein, furnished to the Government; and any reports, data, computations, plans, drawings, and specifications with respect to any of the foregoing. The Contracting Officer may at any time, by a written order, make changes in or additions to the drawings and specifications, issue addi- tional instructions, or require additional work within the general scope of the contract. If any such change causes an increase or decrease in Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 the estimated cost of, or the time required for performance of this con- tract, or otherwise affects any other provision of this contract, an equitable adjustment shall be made (i) in the estimated cost or delivery schedule, or both, (ii) in the amount of any fixed fee to be paid to the Contractor, and (iii) in such other provisions of the contract as may be so affected, and the contract shall be modified in writing accordingly. Any claim by the Contractor for adjustment under this clause must be as- serted 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 under this contract. Failure to agree to any adjustment shall be a dis- pute 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 contract as changed. 3. LIMITATION OF COST (a) It is estimated that the total cost to the Government, exclusive of any fixed fee, for the performance of this contract will not exceed 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 hcs reason to believe that the costs which it expects to incur in the performance of this contract in the next succeed- ing thirty (30) days, when added to all costs previously incurred, will exceed eighty-five percent (85%) of the estimated cost then set forth in the Schedule, or if at any time, the Contractor has reason to believe that the total cost to the Government, exclusive of any fixed fee, for the per- formance of this contract will be substantially greater or less than the then estimated cost thereof, the Contractor shall notify the Contracting Officer in writing 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 Schedule, unless and until the Contracting Officer shall have notified the Contractor in writing that such estimated cost has been in- creased and shall have specified in such notice a revised estimated cost which shall thereupon constitute the estimated cost of performance of this contract. When and to the extent that the estimated cost set forth in the Schedule has been increased, any costs incurred by the Contractor in ex- cess 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. Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 4. ALLOWABLE COST, FIXED FEE, AND PAYMENT (a) For the performance of this contract, the Government shall pay to the Contractor the cost thereof determined by the Contracting Officer 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 "Allowable Cost"), 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 rep- resentative 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 responsible official of the Contractor authorized by it to certify such statement. (c) As promptly as may be practicable after receipt of each invoice or voucher and statement of cost, the Government shall, except as herein- after provided and subject to the provisions of paragraph (d) below, make payment thereon as approved by the Contracting Officer. After payment of eighty-five percent (85%) 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%) of the total fixed fee or (ii) $100,000, whichever amount is less, shall have been set aside, such reserve or the balance thereof to be retained until the execu- tion 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.-pay- ment 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 consti- tute Allowable Cost, and shall also be subject to reduction and overpay- ments or to increase for under payments on preceding invoices or vouchers. On receipt of the voucher or invoice designated by the Contractor as the "completion voucher" or ''completion invoice" and statement of cost, which shall be submitted by the Contractor as promptly as may be practicable fol- lowing completion of the work under this contract but in no event later than one (1) year (or such longer period as the Contracting Officer may, in his discretion, approve in writing) from the date of such completion, and following compliance by the Contractor with all provisions of this con- tract (including, without limitation, provisions relating to patents and Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 the provisions of paragraphs (e) and (f) of this clause), the Govern- ment shall as promptly as may be practicable :pay any balance of Allow- able Cost. (e) 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 and as a condition precedent to final payment under: this contract, a release dis- charging the Government its officers, agents and employees of and from all liabilities, obligetions,`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 incidental thereto-, based upon the liabilities of the Contractor to third parties arising out of the performance 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 more 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 make final pay- ment, whichever is earlier. (3) Claims for reimbursement of costs (other than expenses of the Contractor by reason of its indemnification of the Gov- ernment against patent liability), including reasonable ex- penses incidental thereto, incurred by the Contractor under the provisions of the contract relating to patents. (f) The Contractor agroes that any refunds, rebates or credits (in- cluding any interest thereon,) accruing to or received by the Contractor or any assignee which ari8e out of the performance of this contract and on account of which the 'Contractor has received reimbursement shall be paid by the Contractor to the Government. The Contractor and each assignee under an assignment entered into under this contract and in ef- fect at the time of final Payment under this contract shall execute and deliver at the time of and 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 of the perfor- mance of this contract, in form and substance satisfactory to the Con- tracting Officer. Reasonable expenses incurred by the Contractor for Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 the purpose of securing any such refunds, rebates or credits shall con- stitute 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 determining the amount payable under this contract, notwithstanding any provisions contained in the specifi- cations or other documents incorporated in this contract by reference, designating services to be performed or materials to 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 provi- sions of paragraph (c) hereof. (a) (1) The Contractor agrees to maintain books, records, documents and other evidence pertaining to the costs and expenses of this con- tract (hereinafter collectively called the "records") to the extent and in such detail as will properly reflect all net costs, direct and indirect, of labor, materials, equipment, supplies and services, and other costs and expenses of whatever nature for which reimbursement is claimed under the provisions of this contract. The Contractorts account- ing procedures and practices shall be subject to the approval of the Contracting Officer; provided, however, that no material change will be required to be made in the Contractorts accounting procedures and prac- tices if they conform to generally accepted accounting practices and 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- duction by an authorized representative of the Department. (3) In the event the Contracting Officer or any of his duly authorized representatives determines that his audit of the amounts re- imbursed under this contract as transportation charges will be made at a place other than the office of the Contractor, the Contractor agrees to deliver, with the reimbursement voucher covering such charges or as may be otherwise specified within two years after reimbursement of charges Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 II~JJ~ lu J covered by any such voucher, to such representative as may be designated for that purpose through the Contracting Officer such documentary evi- dence in support of transportation costs as may be required by the Con- tracting 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 make available its records for a period of six years (unless a longer period of time is provided by applicable statute) from the date of the voucher or invoice submitted by the Contractor after the completion of the work under the contract and designated by the Contractor as the "completion voucher" or "completion invoices" or, in the event this con- tract has been completely terminated, from the date of the termination settlement agreement; provided, however, that 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 ex- ception 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 subpara- graph (3) above, and the records described in the proviso of subpara- graph (4) above, the Contractor may in fulfillment of its obligation to retain its records as required by this clause substitute photographs, microphotographs or other authentic reproductions of such records, after the expiration of two years following the last day of the month of reim- bursement to the Contractor of the invoice or voucher to which such re- cords relate, unless a shorter period is authorized by the Contracting Officer with the concurrence of the Comptroller of the Contracting Gcv- eran-a.W'. Agency or his authorized representatives. (6) The provisions of this paragraph (a), including this subpara- graph (6), shall be applicable to and included in each subcontract here- under 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 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 pertinent books, documents, papers, and records of such subcontractor in- volving transactions related to the subcontract. The term "subcontract," as used in this paragraph (b) only, excludes (i) purchase orders not ex- ceeding $1,000 and (ii) subcontracts or purchase orders for public utility services at rates established for uniform applicability to the general public. 6. GOVERMENT PROPERTY (a) The Government shall deliver to the Contractor, for use in con- nection with and under the terms of this contract, the property described in the Schedule or specifications, together with such related data and information as the Contractor may request and as may reasonably be re- quired for the intended use of such property (hereinafter referred to as "Government-furnished property"). The delivery or performance dates for the supplies or services to be furnished by the Contractor under this contract are based upon the expectation that Government-furnished Prop- erty 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 occasioned the Contractor and shall equitably adjust the estimated cost, fixed fee, or delivery or performance dates, or all of them, and any other contract- ual provisions affected by such delay, in accordance with the procedures provided for in the clause of this contract entitled "Changes." In the event that Government-furnished Property is received by the Contractor in a condition not suitable for the intended use, the Contractor shall, upon receipt thereof notify the Contracting Officer of such fact and, as directed by the Contracting Officer, either (i) return such property at the Governmentts expense or otherwise dispose of the property or (ii) ef- fect repairs or modifications. Upon completion of (i) or (ii) above, the Contracting Officer upon written request of the Contractor shall equitably adjust the estimated cost, fixed fee, or delivery or performance dates, or all of them, and any other contractual provision affected by the return or disposition, or the repair or modification, in accordance with the proce- dures 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 de- Livery of Government-furnished Property or delivery of such property in a condition not suitable for its intended use. Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 I Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 (b) Title to all property furnished by the Government shall re- main in the Government. Title to all property purchased by the Con- tractor, for the cost of which the Contractor is entitled to be reim- bursed as a direct item of cost under this contract, shall pass to and vest in the Government upon delivery of such property by the vendor. Title to other property, the cost of which is reimbursable to the Contractor under this contract, shall pass to and vest in the Government upon (i) issuance for use of such property in the perfor- mance of this contract, or (ii) commencement of processing or use of such property in the performance of this contract, or (iii) reimburse- ment of the cost thereof by the Government, whichever first occurs. All the items to be furnished by the Government, as set forth in the Schedule or Specifications, together with all property acquired by the Contractor title to which vests in the Government under this paragraph, are subject to the provisions of this clause and are hereinafter col- lectively referred 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 Government, nor shall such Government Property, or any part thereof, be or become a fixture or lose its identity as personality by reason of affixation to any realty. The Contractor shall maintain adequate property control records of the Government Property and shall identify the Government Property as such in accordance with the requirements of the "Manual for Control of Government Property in Possession of Contractors" as in effect on the date of this contract, which is in- corporated herein by reference. (d) The Government Property provided or furnished pursuant to the terms of this contract 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 Property so as to assure its full availability and usefulness 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 may prescribe as reasonably necessary for the protection of Government Property. (f) (i) The Contractor shall not be liable for any loss of or damage to the Government Property, or for expenses incidental to such loss or damage, except that the Contractor shall be responsible for any such loss or damage (including expenses incidental thereto) Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 (A) which results from willful misconduct or lack of good faith on the part of any of the Contractorts directors or officers, or on the part of any of its managers, superintendents, or other equivalent representa- tives, who has supervision or direction of (I) all or substantially all of the Contractorts business, or (II) all or substantially all of the Contractor's operations at any one plant or separate location in which this contract is being performed, or (III) a separate and complete major industrial operation in connection with the performance of this con- tract; or (B) which results from a failure on the part of the Contractor, due to the willful misconduct or lack of good faith on the part of any of its directors, officers, or other representatives mentioned in sub- paragraph (A) above, (I) to maintain and administer, in accordance with sound industrial practice, the program for maintenance, repair, protec- tection and preservation of Government Property as required by paragraph (e) hereof, or (II) to take all reasonable steps to comply with any appropriate written directions of the Contracting Officer under para- graph (e) hereof; or (C) for which the Contractor is otherwise responsi- ble under the express terms of clause or clauses designated in the Schedule; or (D) which results from a risk expressly required to be in- sured under this contract, but only to the extent of the insurance so required to be procured and maintained, or to the extent of insurance actually procured and maintained, whichever is greater; or (E) which re- sults from a risk which is in fact covered by insurance or for which the Contractor is otherwise reimbursed, but only to the extent of such in- surance or reimbursement; provided that, if more than one of the above exceptions shall be applicable in any case, the Contractorts liability under any one exception shall not be limited by any other exception. This clause shall not be construed as relieving a subcontractor from liability for loss or destruction of or damage to Government Property 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 provisions re- quiring the return of all Government Property in as good condition as when received, except for reasonable wear and tear or for the utiliza- tion of the property in accordance with the provisions of the prime con- tract. (ii) The Contractor shall not be reimbursed for, and shall not in- clude as an item of overhead, the cost of insurance, or any provision for a reserve, covering the risk of loss of or damage to the Government Property, except to the extent that the Government may have required the Contractor to carry such insurance under any other provision of this contract. 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 (iii) Upon the happening of loss or destruction of or damage to the Government Propertyr, the Contractor shall notify the Contracting Officer thereof, and shall communicate with the Loss and Salvage Organization, if any,.now or hereafter designated by the Contracting Officer, and with the assistance of the Loss and Salvage Organization so designated (unless the Contracting Officer has designated that no such organization be employed), shall take all reasonable steps to pro- tect the Government Property from further damage, separate the damaged and undamaged Government Property, put all the Government Property in the best possible order, and furnish to the Contracting Officer a state- ment of (A) the lost, destroyed and damaged Government Property, (B) the time and origin of the loss, destruction or damage, (C) all known in- terests in commingled property of which the Government Property is a part, and (D) the insurance, if any, covering any part of or interest in such commingled property. The Contractor shall make repairs and renova- tions of the damaged Government Property or take such other action as the Contracting Officer directs. (iv) In the event the Contractor is indemnified, reimbursed, or otherwise compensated for any loss or destruction of or damage to the Government Property, it shall use the proceeds to repair, renovate or re- place the Government Property involved, or shall credit such proceeds against the cost of the work covered by the contract, or shall otherwise reimburse the Government, as directed by the Contracting Officer. The Contractor shall do nothing to prejudice the Governmentts right to re- cover against third parties for any such loss, destruction or damage and, upon the request of the Contracting Officer, shall, at the Govern- ment's expense, furnish to the Government all reasonable assistance and cooperation (including the prosecution of suit and the execution of in- struments of assignment in favor of the Government) in obtaining recovery. In addition, where the subcontractor has not been relieved from liability for any loss or destruction of or damage to Government Property, the Contractor shall enforce the liability of the subcontractor for euch loss or destruction of or damage to the Government Property for the benefit of the Government. (g) The Government shall at all reasonable times have access to the premises where any of the Government Property is located. (h) The Government Property shall remain in the possession of the Contractor for such period of time as is required for the performance of this contract unless the Contracting Officer determines that the in- terests of the Government require removal of such property. In such case the Contractor shall promptly take such action as the Contracting - 10 - 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Officer may direct with respect to the removal and shipping of Govern- ment Property. In any such instance, the contract may be amended to accomplish an equitable adjustment in the terms and provisions thereof. (i) Upon the completion of this contract, or at such earlier date as may be fixed by the Contracting Officer, the Contractor shall submit to the Contracting Officer in a form accoptable to him inventory schedules covering all items of the Government 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 the Government Property as may be directed by the Contracting Officer. Recoverable scrap shall be reported in accord- ance with a procedure and in such form as the Contracting Officer may direct. The net proceeds of any such disposal approved by the Contract- ing Officer shall be credited to the cost of the work covered by the con- tract or shall be paid in such manner as the Contracting Officer may direct.. (j) Unless otherwise provided herein, the Government shall not be under any duty or obligation to restore or rehabilitate, or to pay the costs of the restoration or rehabilitation of the Contractorts plant or any portion thereof which is affected by the removal of any Government Property. (k) Directions of the Contracting Officer and communications of the Contractor issued pursuant to this clause shall be in writing. 7. INSURANCE-LIABILITY TO THIRD PERSONS (a) The Contractor shall procure and thereafter maintain workments compensation, employerts liability, comprehensive general liability (bodily injury) and comprehensive automobile liability (bodily injury and property damage) insurance, with respect to performance under this contract, and such other insurance as the Contracting Officer may from time to time require with respect to performance under this contract; provided, that the Contractor in fulfillment of its obligation to pro- cure workments compensation insurance may, with the approval of the Con- tracting Officer and pursuant to statutory authority, maintain a self- insurance program. All insurance required pursuant to the provisions of this paragraph shall be in such form, in such amounts, and for such periods of time, as the Contracting Officer may from time to time require or approve, and with insurers approved by the Contracting Officer. Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 (b) The Contractor agrees, to the extent and in the manner re- quired by the Contracting Officer, to submit forthe approval of the Contracting Officer any other insurance maintained by the Contractor in connection with the performance of this contract and for which the Contractor seeks reimbursement hereunder. (c) The Contractor shall be reimbursed: (i) for the portion allo- cable to this contract of the reasonable cost of insurance as required or approved pursuant to the provisions of this clause, and (ii) for liabilities to third persons for loss of or damage to property (other than property (A) owned, occupied or used by the Contractor or rented to the Contractor or (B) in the care, custody, or control of the Con- tractor), or for death or bodily injury, not compensated by insurance or otherwise, arising out of the performance of this contract, whether or not caused by the negligence of the Contractor, its agents, servants or employees, provided such liabilities are represented by final judg- ments or by settlements approved in writing by the Government, and ex- penses incidental to such liabilities, except liabilities (I) for which the Contractor is otherwise responsible under the express terms of the clause or clauses, if any, specified in the Schedule, or (II) with re- spect to which the Contractor has failed to insure as required or main- tain insurance as approved by the Contracting Officer or (III) which re- sults from willful misconduct or lack of good faith on the part of any of the Contractorts directors or officers, or on the part of any of its managers, superintendents, or other equivalent representatives, who has supervision or direction of (1) all or substantially all of the Con- tractorts business, or (2) all or substantially all of the Contractorts operations at any one plant ox- separate location in wtich this contract is being performed, or (3) a separate and complete major industrial operation in connection with the performance of this contract. The fore- going shall not restrict the right of the Contractor to be reimbursed for the cost of insurance maintained by the Contractor in connection pith the performance of this contract, other than insurance required to be submitted for approval or required to be procured and maintained pursuant to the provisions of this clause, provided such cost would con- stitute allowable cost under the clause of this contract entitled "Allow- able Cost, Fixed Fee and Payment." (d) The Contractor shall give the Government or its representatives immediate notice of any suit or action filed, or prompt notice of any claim made, against the Contractor arising out of the performance of this contract, the cost and expense of which may be reimbursable to the Con- tractor under the provisions of this contract, and the risk of which is Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 then uninsured or in which the amount claimed exceeds the amount of coverage. The Contractor shall furnish immediately to the Government copies of all pertinent papers received by the Contractor. If the amount of the liability claimed exceeds the amount of coverage, the Contractor shall authorize representatives of the Government to colla- borate with counsel for the insurance carrier, if any, in settling or defending such claim. If the liability is not insured or covered by bond, the Contractor shall, if required by the Government, authorize representatives of the Government to settle or defend any such claim and to represent the Contractor in or take charge of any litigation in connection therewith: Provided, however, That the Contractor may, at its own expense, be associated with the representatives of the Govern- ment in the settlement or defense of any such claim or litigation. 8. INSPECTION AND CORRECTION OF DEFECTS (a) All supplies (which term throughout this clause includes with- out limitation raw materials, components, intermediate assemblies, and end products) shall be subject to inspection and test by the Government, to the extent practicable at all times and places including the period of manufacture, and in any event prior to final acceptance. The Con- tractor shall provide and maintain an inspection system acceptable to the Government covering the supplies, fabricating methods, and special tooling hereunder. The Government, through any authorized representa- tive, may inspect the plant or plants of the Contractor or of any of its subcontractors engaged in the performance of this contract. If any in- spection or test is made by the Government on the premises of the Con- tractor or a subcontractor, the Contractor shall provide and shall re- quire subcontractors to provide all reasonable facilities and assistance for the safety and convenience of the Government inspectors in the per- formance of their duties. All inspections and tests by the Government shall be performed in such a manner as will not unduly delay the work. Except as otherwise provided in this contract, final acceptance of any supplies or lots of supplies shall be made as promptly as practicable after delivery thereof and shall be deemed to have been made no later than sixty (60) days after the date of such delivery, if final accept- ance has not been made earlier within such period. (b) At any time during performance of this contract, but not later than six (6) months (or such other period as may be provided in the Schedule) after final acceptance of the supplies or lots of supplies last delivered in accordance with the requirements of this contract, the Government may require the Contractor to remedy by correction or re- placement, as directed by the Contracting Officer, any supplies or lots Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 - l H Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 of supplies which at the time of delivery thereof are defective in material or workmanship or otherwise not in conformity with the re- quirements of this contract. Except as otherwise provided in para- graph (c) hereof, 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. Such supplies or lots of supplies shall not be tendered again for acceptance unless the former tender and the requirement of correction be disclosed. If the Contractor fails to proceed with reasonable promptness to replace or correct such supplies or lots of supplies, the Government (i) may by contract or otherwise replace or correct such supplies and charge to the Contractor any increased cost occasioned the Government thereby, or may reduce any fixed fee payable under this contract (or require repay- ment of any fixed.fee theretofore paid) in such amount as may be equit- able under the circumstances, or (ii) in the case of supplies not de- livered, may require the delivery of such supplies, and shall have the right to reduce any fixed fee payable under this contract (or to require payment of any fixed fee theretofore paid) in such amount as may be equitable under the circumstances, or (iii) may terminate this contract for default as provided in the clause of this contract entitled "Termin- ation." Failure to agree to the amount of any such increased cost to be charged 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 "Disputes." (c) Notwithstanding the provisions of paragraph (b) hereof, the Government may at any time require the correction or replacement by the Contractor, without cost to the Government, of supplies or lots of sup- plies which are defective in material or workmanship, or otherwise not in conformity with the requirements of this contract, if such defects or failures are due to fraud, lack of good faith or willful misconduct on the part of any of the Contractorts directors or officers, or on the part of any of its managers, superintendents, or other equivalent repre- sentatives, who has supervision or direction of (i) all or substantially all of the Contractorts business, or (ii) all or substantially all of the Contractorts operations at any one plant or separate location in which this contract is being performed, or (iii) a separate and complete major industrial operation in connection with the performance of this contract. Fraud, lack of good faith or willful misconduct on the part of any of such supervisory personnel shall be deemed to include the selection of iAdividual employees or the retention of employees after any of such supervisory personnel has reason to believe that such employees are habitually careless or otherwise unqualified. - 14 - Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 I . 1 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 u~ J (d) Corrected supplies or replaced supplies shall be subject to the provisions of this clause in the same manner and to the sane ex- tent as supplies originally delivered under this contract. (e) The Contractor shall make its records of all inspection work available to the Government during; the performance of this contract and for such longer period as may be specified in this contract. (f) Except as provided in this clause and as may be provided in the Schedule, the Contractor shall have no obligation or liability to correct or replace supplies or lots of supplies which at the time of delivery are defective in material or workmanship or otherwise not in conformity with the requirements of this contract. (g) Except as otherwise provided in the Schedule, the Contractor's obligation to correct or replace Government-furnished property (which is property in the possession of or acquired directly by the Government and delivered or otherwise made available to the Contractor) shall be governed by the provisions of the clause of this contract entitled "Government Property." 9. EXCUSABLE DELAYS The Contractor shall not be in default by reason of any failure in performance of this contract in accordance with its terms (including any failure by the Contractor to make progress in the prosecutiru of the work hereunder which endangers such performance) if such failure arises out of causes beyond the control and without the fault or negli- gence 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 from other sources and shall have ordered the Contractor in writing to procure such services or supplies from such other sources, and the Contractor shall have failed reasonably to comply with such order. Upon request of the Contractor, the Contract- ing Officer shall ascertain the facts and extent of such failure and, if he shall determine that such failure was occasioned by any one or more of the said causes, the delivery schedule shall be revised accordingly, sub- ject to the rights of the Government under the clause hereof entitled "Termination." - 15 - Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 (a) The Contractor shall give advance notification to the Con- tracting 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 per- cent (5%) of the 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 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 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 $1,000, or (iv) is on a time-and-material or labor- hour basis, or (v) involves research and development work. The Con- tracting Officer may, in his discretion, ratify in writing any such subcontract; such action shall constitute the consent of the Contract- ing 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. (d) 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 cause shall not be construed to constitute a deter- mination of the allowability of any cost under this contract, unless such approval specifically provides that it constitutes a determina- tion of the allowability of such cost, (e) The Contractor shall give the Contracting Officer immediate 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 Contractor may be entitled to reimbursement from the Government. (f) The Contracting Officer may approve all or any part of the Contractorts purchasing system and from time to time rescind or rein- state such approval. Such approval shall be deemed to fulfill the re- quirements for obtaining the Contracting Officerts consent to subcon- tracts as prescribed in paragraph (b) above. Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 - 1. 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 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 per- formance 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 information shall be furnished at the expense of the Government except in those cases in which the Contractor has agreed to indemnify the Government against the claim being asserted. (a) Before filing or causing to be filed a patent application disclosing any subject matter of this contract, which subject matter is classified "Secret" or higher, the Contractor shall, citing the thirty (30) day provision below, transmit the proposed application to the Contracting Officer for determination whether, for reasons of national security, such application should be placed under an order of secrecy or sealed in accordance with the provisions of 35 U.S. Code 181-188 or the issuance of a patent should be otherwise delayed under pertinent statutes or regulations; and the Contractor shall observe any instructions of the Contracting Officer with respect to the manner of delivery of the patent application to the U.S. Patent Office for filing, but the Contractor shall not be denied the right to file such patent application. If the Contracting Officer shall not have given any such instructions within thirty (30) days from the date of mailing or other transmittal of the proposed application, the Contractor may file the application. (b) The Contractor shall furnish to the Contracting Officer, at the time of or prier 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 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 I !I. Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 rvul'iUt1L5 LI, 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 regulation. (c) In filing any patent application coming within the scope of this clause, the Contractor shall observe all applicable security regulations covering the transmission of classified subject matter. (a) As used in this clause, the following terms shall have the meanings set forth below: (i) The term "Subject Invention" means any invention, im- provement or discovery (whether or not patentable) conceived or first actually reduced to practice either (A) in the performance of the experimental, developmental, or research work called for or re- quired under this contract, or (B) in the performance of any experi- mental, developmental, or research work relating to the subject mat- ter of this contract which was done upon an understanding in writing that a contract would be awarded; provided that the term "Subject Invention" shall not include any invention which is specifically identified and listed in the Schedule for the purpose of excluding it from the license granted by this clause. (ii) The term "Technical Personnel" means any person em- ployed by or working under contract-with the Contractor (other than a subcontractor whose responsibilities with respect to rights accruing to the Government in inventions arising under subcontracts are set forth in paragraphs (g), (h), and (i) of this clause) who, by reason of the nature of his duties in connection with the perfor- mance of this contract, would reasonably be expected to make inven- tions. (iii) The terms "subcontract" and "subcontractor" mean any subcontract or subcontractor of the Contractor, and any lower- tier subcontract or subcontractor under this contract. (b) The Contractor agrees to and does hereby grant to the Gov- ernment 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; provided, however, - 18 - 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 that with respect to (i) any Subject Invention made by other than Technical Personnel, (ii) any Subject Invention conceived prior to, but first actually reduced to practice in the course of, any of the experimental, developmental, or research work specified in paragraph (a) (i) above, and (iii) the practice of any Subject Invention in foreign countries, the obligation of the Contractor to grant the aforesaid license and the other rights hereinafter provided in this clause shall be limited to the extent of the Contractor's right to grant the same without incurring any obligation to pay royalties or other compensation to others solely on account of said grant. No license granted herein shall convey any right to the Government to manufacture, have manufactured, or use any Subject Invention for the p pose of providing services or supplies to the general public in competition with the Contractor or the Contractorls commercial licensees in the licensed fields. Nothing contained in this para- graph shall be deemed to grant any license under any invention other than a Subject Invention. (c) The Contractor shall: (i) Make a written disclosure to the Contracting Officer promptly after conception or first arty al reduction to practice of each Subject Invention which reasonably appears to be patentable; (ii) Certify to the Contracting Officer not less often than every twelve months, commencing with the date of this contract, whether or not any Subject Inventions were conceived or first actually reduced to practice during the preceding twelve months; and (iii) Prior to final settlement of this contract, make a summary report of all those Subject Inventions previously disclosed and of those Subject Inventions conceived or first actually reduced to practice after the last certification but prior to the summary report. (d) The Contractor shall also, in connection with each Subject Invention referred to in paragraph (c)(i) above: (i) Specify, at the time of making written disclosure, whe- ther or not a United States Patent application claiming such Invention has been or will be filed by or on behalf of the Contractor. If the Contractor specifies that a United States Patent application will be filed claiming such Invention, the Contractor shall file or cause to be filed such application in due form and time. If the Contractor Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 LIE decides not to file or cause to be filed said application after having specified that it would file, 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) In the event the Contractor specifies that it has not filed and will not file (or having specified that it will file, thereafter notified the Contracting Officer to the contrary), (A) in- form 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 contemplated publication, and (B) convey to the Government the Con- tractor's entire right, title and interest in such Invention by de- livering to the Contracting Officer upon written request such duly executed instruments (prepared by the Government) of assignment, ap- plication and 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 cover- ing such Invention throughout the world, subject, however, to the right reserved to the Contractor in paragraph (e) to file foreign applica- tions, and subject further to the reservation of a nonexclusive and royalty-free license to the Contractor (and to its existing and future associated and affiliated companies, if any, within the corporate structure of which the Contractor is a part) which license shall be assignable to the successor of that part of the Contractor's business to which the Subject Invention pertains; (iii) Furnish promptly to the Contracting Officer on re- quest 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 Subject Invention; (iv) In the event the Contractor, or those deriving rights from the Contractor, elects not to continue prosecution of any such United States patent application filed by or on behalf of the Con- tractor, so notify the Contracting Officer not less than sixty (60) days before the expiration of the response period and, upon written request, deliver to the Contracting Officer such duly executed instru- ments (prepared by the Government) as are deemed necessary to vest in the Government the Contractor's entire right, title and interest in the Subject Invention and the application, subject to the reservations as specified in (ii) above; and 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 (v)' Deliver to the Contracting Officer duly executed in- struments fully confirmatory of any license rights herein agreed to be granted to the Government. (e) The Contractor, or those deriving rights from the Contractor, has the option of filing patent applications in foreign countries on Subject Inventions. If this option is not exercised in the time and manner set forth below, the Government shall have the right to file applications in each foreign country in which the Contractor has not exercised its option. (i) In the event that the Contractor specifies under the provisions of paragraph (d) that it has not filed and will not file a United States patent application (or having specified that it will file, thereafter notifies the Contracting Officer to the contrary) the Contractor shall have six months from the date of making the written disclosure required by paragraph (c)(i) to file foreign patent applica- tions. (ii) In the event that a United States patent application is filed by or on behalf of the Contractor under the provisions of paragraph (d), the Contractor shall have six months from the date of the United States application, or six months from the date permission is granted to file foreign applications where such filing had been prohibited for security reasons, within which to file foreign patent applications. With respect to each Subject Invention on which it has specified that a United States patent application has been or will be filed by or on behalf of the Contractor, the Contractor shall (A) inform the Contracting Officer in writing of each foreign patent ap- plication for such Invention filed by or on behalf of the Contractor within six months after the filing by the Contractor of the corres- ponding United States application, and, if practicable, prior to the publication of the Subject Invention in any country, (B) inform the Contracting Officer in writing at the earliest practicable date of any publication of the Subject Invention made by or known to the Con- tractor or, where applicable, of any contemplated publication by the Contractor, stating the date and identity of such publication or con- templated publication, (C) upon written request of the Contracting Officer, convey to the Government the Contractorts entire right, title, and interest in such Invention in those countries in which the Con- tractor has not, within six months after the filing of the correspond- ing United States application, filed foreign patent applications, and deliver to the Contracting Officer, upon written request, such duly executed instruments (prepared by the Government) of assignment, Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 application, and other papers as are deemed necessary to vest in the Government the Contractor's right, title, and interest as afore- said and the right to apply for and maintain patents covering such invention, subject, however, to the reservation of a nonexclusive and roylaty-free license to the Contractor (and to its existing and future associated and affiliated companies, if any, within the corporate structure of which the Contractor is a part) which license shall be assignable to the successor of that part of the Contractorts business to which the.Subject Invention pertains, and (D) in the event that the Contractor, or those deriving rights from the Con- tractor, elects not to continue the prosecution of any foreign ap- plication which has been filed by or on behalf of the Contractor, or elects not to maintain any patent granted on such application, so notify the Contracting Officer not less than ninety days before the expiration of the response period or patent lapse date and, upon written request, deliver to the Contracting Officer such duly executed instruments (prepared by the Government) as will convey to the Gov- ernment the Contractor's entire right, title, and interest in the ap- plication or patent, subject to a reservation as specified in (C) above. (f) If the Contractor fails to deliver to the Contracting Officer the certificates required by paragraph (c)(ii) of this clause or fails to furnish the written disclosures for all Subject Inventions required by paragraph (c)(i) of this clause shown to be due in accordance with any certificate delivered under paragraph (c)(ii), there shall be withheld from payment until the Contractor shall have corrected such failures either (i) ten percent (10%) of the amount of this contract, as from time to time amended, or (ii) X5,000, 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 re- serve of either (i) ten percent (10%) of such amount, or (ii) $5,000, whichever amount 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 (A) the summary report required by paragraph (c)(iii) of this clause, (B) written disclosures for all Subject Inventions required by paragraph (c)(i) of this clause which are shown to be.due in accordance with certificates delivered under paragraph (c)(ii) or in accordance with such summary report, and (C) the information as to any subcontractor required by paragraph (h) of this clause. The maximum amount which may be withheld under this paragraph shall not exceed ten percent (10%) of the amount of this contract or Q'6,000, whichever is less, and no amount shall be withheld 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 under this paragraph when the minimum amount specified by this para- graph is being withheld under other provisions of this contract. The withholding of any amount or subsequent payment thereof to the Contractor shall not be construed as a waiver of any rights accruing to the Government under this contract. This paragraph shall not be construed as requiring the Contractor to withhold any amounts from a subcontractor to enforce compliance with the patent provisions of a subcontract. (g) The Contractor shall exert all reasonable effort to nego- tiate for the inclusion of this Patent Rights clause in any subcon- tract hereunder of $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 Rights 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 sub- contractor of an acceptable patent rights clause; provided, however, that the Contractor shall in any event require the subcontractor to grant to the Government patent rights under Subject Inventions of no less scope and on no less favorable terms than those which the Con- tractor has under such subcontract, 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 contain- ing 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 Con- tractor hereby assigns to the Government all the rights that the Con- tractor 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 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 accordance with paragraph (g) 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 facili- ties or qualified personnel, the Contractor's delivery dates shall be -23- ii Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 extended for a period of time equal to the duration of such delay; and, upon request of the Contractor, the Contracting Officer shall deter- mine to what extent, if any, an additional extension of the delivery dates and an increase in contract prices based upon additional costs incurred by such delay are proper under the circumstances; and the con- tract shall be modified accordingly. If the Contractor, after exerting all reasonable effort, is unable to obtain a qualified subcontractor as set forth above, the Contractor may submit to the Contracting Officer a written request for waiver or modification of the requirement that a suitable patent rights clause be included in the subcontract. Such re- quest shall specifically state that the Contractor has used all reason- able 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 requirement, 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 denial of such request by the Contracting Officer, this contract shall thereupon automatically ter- minate and the rights and obligations of the parties shall be governed by the provisions of the clause of this contract entitled "Termination for the Convenience of the Government." 14. AUTHORIZATION AND CONSENT The Government hereby gives its authorization and consent for all use and manufacture of any patented invention in the performance of this contract or any part hereof or any amendment hereto or any sub- contract hereunder (including any lower-tier subcontract). 15. COPYRIGHT (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, (i) a royalty-free, nonexclusive and irrevoc- able license to reproduce, translate, publish, use, and dispose of, and to authorize others so to do, all copyrightable material first produced or composed and delivered to the Government under this contract by the Contractor, its employees or any individual or concern specifically em- ployed or assigned to originate and prepare such material; and (ii) a license as aforesaid under any and all copyrighted or copyrightable work not first produced or compcsod by the Contractor in the performance of this contract but which is incorporated in the material furnished under -24- Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 I - _~j Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 the contract, provided that such license shall be only to the extent the Contractor now has, or prior to completion or final settlement 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 ef- fort to advise the Contracting Officer, at the time of delivering any copyrightable 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 contained. (c) The Contractor agrees to report to the Contracting Officer, promptly and in reasonable written detail, any notice or claim of copyright infringement received by the Contractor with respect to any material delivered under this contract. 16. REPRODUCTION AND USE OF TECHNICAL DATA The Contractor agrees to and does hereby grant to the Government, to the full extent of the Contractorts right to do so without payment of compensation to others, the right to reproduce, use, and disclose for governmental purposes (including the right to give to foreign governments for their use as the national interest of the United States may demand) all or any part of the reports, drawings, blueprints, data, and technical information specified to be delivered by the Contractor to the Government under this contract; provided, however, that nothing contained in this paragraph shall be deemed, directly or by implica- tion, to grant any license under any patent now or hereafter issued or to grant any right to reproduce anything else called for by this contract. 17. REPORTING OF ROYALTIES The provisions of this clause shall be applicable only if the amount of the contract is in excess of $10,000. (a) The Contractor shall report in writing (in quadruplicate) to the Contracting Officer as soon as practicable after execution of this contract whether or not any royalties in excess of $250 have been paid or are to be paid by the Contractor directly to any person or firm in connection with the performance of this contract. If royalties in excess of $250 have been paid or are to be paid to any person or firm, the report shall include the following items of information with respect to such royalties (including the intial $250): 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 (1) The name and address of each licensor to whom royalties in excess of $250 have been paid or are to be paid, (2) The patent numbers, patent application serial num- bers (with filing dates), or other identification of the basis for such royalties, (3) The manner of computing the royalties consisting of (i) a brief identification of each royalty-bearing unit or pro- cess, (ii) the total amount or royalties, and (iii) the percentage rate of dollars and cents amount of royalties on each such unit or process; provided that if the royalties cannot be computed in terms of units or dollars and cents value, then other data showing the manner in which the Contractor computes the royalties. (b) In lieu of furnishing a report under paragraph (a), the Contractor may furnish a single, consolidated report for each accounting period of the Contractor during which the Contractor has contracts with the Government, provided the Contractor has requested and obtained the prior written approval of the Contracting Officer. Such consolidated report shall be furnished, when the furnishing thereof has been approved, in the number of copies as approved, as soon as practicable after the close of the accounting period covered by the report. Such consolidated report shall be made in accordance with Contractorts established accounting practice and shall include, for the accounting period, the total amount of royalties accruing to each licensor at a rate in excess of $1,000 per annum on the Con- tractorts over-all business, together with (i) the name and address of each such licensor, (ii) the patent numbers, patent application serial numbers (with filing dates), or other identification of the basis for such royalties, (iii) a brief description of the subject matter of the license under which royalties are charged, (iv) the percentage rate or unit amount, or if the royalties do not accrue by rate or unit amount, such other data showing the manner by which the royalties accrue to licensor, and (v) an estimate or approxima- tion (without detailed accounting) of the portion of such royalties that may be attributable to Government contracts. The Contractor shall, if requested by the Government, furnish at Government expense a more detailed allocation of such royalty payments attributable to Government contracts. Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved f i or Release 2011/01/10: CIA-RDP89B00709R000400880009-0 (c) In the event that the Contractor requests written ap- proval to furnish consolidated reports under paragraph (b) above, the Contracting Officer shall promptly consider the request and fur- nish to the Contractor a letter stating whether or not the request is approved and, notwithstanding any such approval, the Contracting Officer shall have the right to question any such subsequently fur- nished report as to accuracy or completeness of data and to ask for additional information. The Contractor shall furnish a copy of such letter of approval to the Contracting Officer administering this contract. (d) After payment of eighty percent (80%) of the amount of this contract, as from time to time amended, further payment shall be withheld until a reserve of either (i) ten percent (10%) of such amount or (ii) ;,5,000, whichever is less, shall have been set aside, such reserve or the balance thereof to be retained until the Contractor shall have furnished to the Contracting Officer the report called for by paragraph (a) hereof or the copy of the letter approving the Contractorts request to furnish the report under para- graph (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 fur- nished a letter as required by paragraph (c) within a reasonable time after making written request to submit a single, consolidated report under the provisions of paragraph (b) of this clause; and pro- vided further that the Contracting Officer may, in his discretion, order payment to be withheld in the amount and manner above provided if the report called for by paragraph (a) is unsatisfactory or if the report called for by paragraph (b) is due but has not been re- ceived, or if received, is found to be unsatisfactory. No amount shall be withheld under this paragraph when the minimum amount spe- cified by this paragraph is being withheld under other provisions of this contract. The withholding of any amount or subsequent pay- ment thereof to the Contractor shall not be construed as a waiver of any right accruing to the Government under this contract. 18. DISPUTES Except as otherwise provided in this contract, any dispute con- cerning a question of fact arising under this contract which is not disposed of by agreement shall be decided by the Contracting Officer, who shall reduce his decision to writing and mail or otherwise fur- nish a copy thereof to the Contractor. Within 30 days from the date of receipt of such copy, the Contractor may appeal by mailing or 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 otherwise furnishing to the Contracting Officer a written appeal addressed 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 necessarily 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 connection with any appeal pro- ceeding under this clause, the Contractor shall be afforded an op- portunity to be heard and to offer evidence in support of its appeal. Pending final decision of a dispute hereunder, the Contractor shall proceed diligently with the performance of the contract and in ac- cordance with the Contracting Officer's decision. The Contractor agrees that there will be delivered under this contract only such unmanufactured articles, materials and supplies (which term "articles, materials, and supplies" is hereinafter referred to in this clause as "supplies") as have been mined or produced in the United States, and only such manufactured supplies as have been manufactured in the United States substantially all from supplies mined, produced, or manufactured, as the case may be, in the United States. Pursuant to the Buy American Act (41 U.S. Code lOa-d), the foregoing provision shall not apply (i) with re- spect 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 Secre- tary or his duly authorized representative not to be mined, pro- duced, or manufactured, as the case may be, in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality, or (ir) with respect to such supplies, from which the supplies to be delivered under this Contract are manu- factures, as are of 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 reasonably available commercial quantities and of a satisfactory quality: Provided, That this exception (iv) shall not permit delivery of supplies manufactured outside the United States if such supplies are manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality. Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 20. OFFICIALS NOT TO BENEFIT No member of or delegate to Congress, or resident commissioner, shall be admitted to any share or part of this contract, or to any benefit that may arise therefrom; but this provision shall not be construed to extend to this contract if made with a corporation for its general benefit. 21. COVENANT AGAINST CONTINGENT FEES 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, broker- age, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by the Con- tractor for the purpose of securing business. For breach or viola- tion 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 the full amount of such commis- sion, percentage, brokerage or contingent fee. 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. EIGHT-HOUR LAW OF 1912 This contract, to the extent that it is of a character specified in the Eight-Hour Law of 1912 as amended (40 U.S. Code 324-326) and is not covered by the Walsh-Healey Public Contracts Act (41 U.S. Code 35-45), is subject to the following provisions and exceptions of said Eight-Hour Law of 1912 as amended, and to all other provisions and exceptions of said Law: No laborer or mechanic doing any part of the work contem- plated 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 calen- dar day upon such work, except upon the condition that compensation is paid to such laborer or mechanic in accordance with the provi- sions of this clause. The wages of every such laborer and mechanic employed by the Contractor or any subcontractor engaged in the -29- Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 performance of this contract shall be computed on a basic day rate or 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 five dollars shall be imposed upon the Con- tractor 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. 24. NONDISCRIMINATION IN EMPLOYMENT (a) In connection with the performance of work under this con- tract, the Contractor agrees not to discriminate against any em- ployee or applicant for employment because of race, religion, color, or national origin. The aforesaid provision shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termina- tion; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Contractor agrees to post hereafter in conspicuous places, available for employees and appli- cants for employment,notices to be provided by the Contracting Of- ficer setting forth the provisions of the nondiscrimination clause. (b) The Contractor further agrees to insert the foregoing pro- vision in all subcontracts hereunder, except subcontracts for standard commercial supplies or raw materials. 25. WALSH--HEALEY PUBLIC CONTRACTS ACTS If this oontract is for the manufacture or furnishing of ma- terials, 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 incorporated by reference all representations and stipulations required by said Act and regulations issued thereunder by the Secre- tary of Labor, such representations and stipulations being subject to all applicable rulings and interpretations of the Secretary of Labor which are now or may hereafter be in effect. Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 26. 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 en- tertainment, gifts, or otherwise) were offered or given by the Con- tractor, 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 award- ing or amending, or the making of any determinations with respect to the performing of such contract; provided, that the existence of the facts upon which the Secretary or his duly authorized representative makes such findings shall be in issue and may be reviewed in any competent court. (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) as a penalty in addition to any other damages to which it may be entitled by law, to exemplary damages in an amount (as determined by the Sec- retary or his duly authorized representative) which shall be not less than three nor more than ten times the costs incurred by the Con- tractor in providing any such gratuities to any such officer or em- ployee. (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. 27. EMPLOYMENT OF ALIENS No aliens employed by the Contractor shall be permitted to have access to the plans or specifications, or the work under construction, or to participate in the contract trials, without the written consent beforehand of the Secretary or his duly authorized representative. 28. 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 con- tract provides for payments aggregating $1,000 or more, claims for moneys due or to become due the Contractor from the Government under 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 - l 1I Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 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 in- stitution. 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 assign- ment or reassignment may be made to one party as agent or trustee for two or more parties participating in such financing. Notwithstanding any other provision of this contract, payments 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-off. (b) In no event shall copies of this contract or of any plans, specifications, or other similar documents relating to work under this contract, if marked "Top Secret," "Secret," or "Confidential," be furnished to any assignee of any claim arising under this con- tract or to any other person not entitled to receive the same; pro- vided, that a copy of any part or all of this contract so marked may be furnished, or any information contained therein may be disclosed to such assignee upon the prior written authorization of the Con- tracting Officer. 29. MILITARY SECURITY REQUIREMENTS (a) The provisions of this clause shall apply to the extent that this contract involves access to security information classified "Top Secret," "Secret," or "Confidential." (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. (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 Con- tractor shall safeguard all classified elements of this contract and shall provide and maintain a system of security controls within its on organization in accordance with the requirements of (i) the De- partment of Defense Industrial Security Manual for Safeguarding Classified Security Information as in effect on date of this con- tract, which Manual is hereby incorporated by reference and made a Fart of this contract, (ii) any a;iend::ients to said Manual required by the demands of national security as determined by the Government and made after the u Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 date of this contract, notice of which has been furnished to the Con- tractor by the Contracting Officer, and (iii) those provisions of written agreements entered into by the parties pertaining to the adaptation of the Manual to the Contractorts business. (d) Designated representatives of the Contracting Officer re- sponsible for inspection pertaining to industrial security shall have the right to inspect at reasonable intervals the procedures, methods, and facilities utilized by the Contractor in complying with the re- quirements of the terms and conditions of this clause. Should the Contracting Officer, through its authorized representative, deter- mine that the Contractor has not complied with such requirements, the Contracting Officer 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 Contracting Officer as provided in this clause, and if such changes cause an increase or decrease in the estimated cost of per- formance of this contract, the estimated cost and fixed fee, shall, to the extent appropriate, be subject to an equitable adjustment. Any such equitable adjustment shall be accomplished in the manner set forth in the clause of this contract entitled "Changes." (f) The Contractor agrees to insert, in all subcontracts here- under which involve access to classified security information, pro- visions which shall conform substantially to the language of this clause, including this paragraph (f) but excluding paragraph (e) of this clause. The Contractor may insert in any such subcontract, and any such subcontract entered into thereunder may contain, in lieu of paragraph (e) of this clause, provisions which permit equitable ad- justments to be made in the subcontract price or in the estimated cost and fixed fee of the subcontract (as appropriate to the type of subcontract involved) on account of changes in security classifica- tions or requirements made under the provisions of this clause sub- sequent to the date of the subcontract involved. (g) The Contractor also agrees that it shall determine that any subcontractor proposed by it for the furnishing of supplies and services which will involve access to classified security informa- tion in the Contractorts custody has been granted an appropriate facility security clearance, which is still in effect, prior to being accorded access to such classified security information. -33- k Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 30. UTILIZATION OF SMALL BUSINESS CONCERNS (a) It is the policy of the Government as declared by the Con- gress to bring about the greatest utilization of small business con- cerns which is consistent with efficient production. (b) The Contractor agrees to accomplish the maximum amount of subcontracting to small business concerns that the Contractor finds to be consistent with the efficient performance of this contract. 31. 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 Contractorts latest quo- tation, if the Contractor was furnished or otherwise notified of the existence of such supplementary or superseding specification at the time of said quotation. 32. TERMINATION (a) The performance of work under the contract may be termin- ated by the Government in accordance with this clause in whole, or from time to time in part, (1) whenever the Contractor shall default in performance of this contract in accordance with its terms (in- cluding in the term "default" any such failure by the Contractor to make progress in the prosecution of the work hereunder as endangers such performance), and shall fail to cure such default within a period of ten days (or such longer periods as the Contracting Offi- cer may allow) after receipt from the Contracting Officer of a notice specifying the default, or (2) whenever for any reason the Contract- ing Officer shall determine that such termination is in the best in- terests 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 upon which such termination becomes effective. If, after notice of termination of this contract for default under (1) above, it is determined that the Contractorts 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 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 contract relating to excusable delays, the Notice of Termination shall be deemed to have been issued under (2) above, and the rights and obligations of the parties hereto shall in such event be gov- erned accordingly. (b) After receipt of a Notice of Termination and except as otherwise directed by the Contracting Officer, the Contractor shall (1) stop work under the contract on the date and to the extent spe- cified in the Notice of Termination; (2) place no further orders or subcontracts for materials, services, or facilities except as may be necessary for completion of such portion of the work under the contract as is not terminated; (3) terminate all orders and subcon- tracts to the extent that they relate to the performance of work terminated by the Notice of Termination; (4) assign to the Govern- *nent, in the manner and to the extent directed by the Contracting Officer, all of the right, 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 Con- tracting Officer, to the extent he may require, which approval or ratification shall be final and conclusive for all purposes of this clause, settle all 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 accordance 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 unfabricated parts, work in process, completed work, supplies, and other material pro- duced as a part of, or acquired in respect of the performance of, the work terminated by the Notice of Termination, (ii) the com- pleted or partially completed plans, 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 special tools and tooling acquired or manu- factures 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 pro- vision (6) of this paragraph, provided, however, that the Contractor (i) shall not be required to extend credit to any purchaser, and 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 (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 dis- position shall be applied in reduction of any payments to be made by the Government to the Contractor under this contract or shall otherwise be credited to the price or cost of the work covered by this contract or paid in such other manner as the Contracting Offi- cer 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 pro- perty related to this contract which is in the possession of the Contractor 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, cr any item of reimbursable cost, under this clause. At any time after expiration of the plant clearance period, as defined in Section VIII, Armed Services Pro- curement Regulation, as it may be amended from time to time, the Contractor may submit to the Contracting Officer a list, certified as to quantity and quality, of any or all items of termination in- ventory not previously disposed of, exclusive of items the disposi- tion 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 fif- teen (15) days thereafter, the Government will accept title to such items and remove them or enter into a storage agreement covering the same, provided that the list submitted shall be subject to veri- fication 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 -36- II Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 -1- -A.1 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 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 Con- tractor 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 (including an allowance for the fixed-fee) to the Contractor by reason of the total or partial term- ination of work pursuant to this clause. The contract shall be amended accordingly, and the Contractor shall be paid the agreed amount. (e) In the event of the failure of the Contractor and the Contracting Officer to agree in whole or in part, as provided in para- graph (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 this 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 Contractor the amount deter- mined as follows: (1) If the settlement includes cost and fixed-fee: (i) There shall be included therein all costs and expenses reim- bursable in accordance with this contract, not previously paid to the Contractor for the performance of this, contract prior to the effective date of the Notice of Termination, and such of these costs 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 discontinue such costs. (ii) There shall be included therein so far as not included under (i) above, the cost of settling and paying claims arising out of the termination of work under subcontracts or orders, as provided in paragraph (b)(5) above, which are properly chargeable to the terminated portion of the contract. Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 (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 supporting data with respect to the terminated portion of the contract and for the termina- tion and settlement of subcontracts thereunder, together with reasonable storage, transportation, and other costs incurred in connection with the protection or disposition of termination inventory; provided, however, that if the termination is for default of the Contractor there shall be included any amounts for the preparation of the Con- tractor's settlement proposal. (iv) There shall be included therein a portion of the 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 the de- fault of the Contractor, there shall be paid a percent- age of the fee equivalent to the percentage of the com- pletion of work contemplated by the contract, less fixed-fee payments previously made hereunder. (B) In the event of the termination of this contract for the default of the Contractor, the total fixed-fee pay- able 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 types of article under consideration) as the total number of articles delivered to and accepted by the Government 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 Contractor, 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)(iv) above. - 38 - 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 (f) The Contractor shall have the right of appeal, under the clause of this contract entitled "Disputes," from any determination made by the Contracting Officer under paragraphs (c) or (e) above, except that if the Contractor has failed to submit its claim within the time provided in paragraph (c) above and has failed to request extension of such time, he shall have no such right of appeal. In any case where the Contracting Officer has made a determination of the amount due under paragraph (c) or (e) 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 determined by the Contracting Officer, or (ii) if an appeal has been taken, the amount finally determined on such appeal. (g) In arriving at the amount due the Contractor under this clause there shall be deducted (1) all unliquidated advance or other unliquidated payments theretofore made to the Contractor, (2) any claim which the Government may have against the Contractor in connec- tion with this contract, and (3) the agreed price for, or the pro- ceeds 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 the fixed-fee which is payable with respect to the work under the con- tinued portion of the contract shall be equitably adjusted by agree- ment between the Contractor and the Contracting Officer, and such adjustment shall be evidenced 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 payments on account against costs incurred by the Contractor in connection with the terminated portion of the contract whenever in the opinion of the Contracting Officer the aggregate of such payments shall be within the amount to which the Contractor will be entitled hereunder. If the total of such payments is in excess of the amount finally determined to be due under this clause, such excess shall be payable by the Con- tractor to the Government upon demand, together with interest com- puted 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 Government; 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. 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 I I1 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 (j) The provisions of this clause relating to the fixed-fee 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 statute, the Contractor from the effective date of term- ination and for a period of six years after final settlement under this contract, shall preserve and make available to the Government at all reasonable times at the office of the Contractor, but without direct charge to the Government, all its books, records, documents, and other evidence bearing on the 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, micro- photographs, or other authentic reproductions thereof. 33. NEGOTIATED OVERHEAD RATES. (a) Notwithstanding the provisions of the clause of this contract entitled 'Allowable Cost, Fixed Fee and Payment', the allowable indirect costs under this contract shall be obtained by applying negotiated overhead rates to bases 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 in the Schedule, shall submit to the Contracting Officer or his authorized representative, with a copy to the cognizant audit activity, a proposed final overhead rate or rates for that period based-on the Contractor's actual cost experience during that period, together with supporting cost data. Negotiation of final overhead rates by the Contractor and the Contracting Officer shall be undertaken as promptly as practicable after receipt of the Contractor's proposal. (c) Allowability of costs and acceptability of cost allocation methods shall be determined in accordance with the Armed Services Procurement Regulation, Section XV, Part 2, as in effect on the date of this contract. (d) The results of each negotiation shall be set forth in amendment to this contract, which shall specify (i) the agreed final rates, (ii) the bases to which the rates apply, (iii) the periods for which the rates apply, and (iv) the specific items treated as direct costs or any changes in the items previously agreed to be direct costs. 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 t Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 (e) Pending establishment of final overhead rates for any period, the Contractor shall be reimbursed either at negotiated provisional rates as provided in the Schedule or at billings rates acceptable to the Contracting Officer or his authorized representative, subject to appropriate adjustment when the final rates for that period are established. To prevent substantial over or under payment, the provisional or billing rates may, at the request of either party, be revised by mutual agreement, either retroactively or prospectively. Any such revision of negotiated provisional rates provided in the Schedule shall be set forth in an amendment to this contract. (f) Any failure by the parties to agree on any final rate or rates under this clause shall be considered a dispute concerning a question of fact for decision by the Contracting Officer within the meaning of the clause of this contract entitled 'Disputes'." 34. FLIGHT RISK. (a) As used in this clause the term "operation" includes tests of aircraft, tests of equipment and accessories installed therein, and the operation of any power plant installed therein, whether or not the aircraft is in motion during the making of any such test or the oper- ation of any such power plant. (b) Notwithstanding the provisions of paragraph (f) of the clause of this contract captioned "Government Property," the Contractor shall be liable for loss and destruction of and damage of aircraft (including equipment and accessories installed therein), to which'the Government has title pursuant to the provisions of this contract or otherwise occuring in the course of operations of such aircraft conducted by the Contractor in the performance of this contract unless personnel conducting such operations are furnished by the Government or are approved in writing by the Air Materiel Area Commander having administrative responsibility for this contract, or his representative to whom such authority has been delegated. The provisions of this clause shall supersede any provisions of applicable Air Force specifications insofar as such specifications relate to Contractor's liability in connection with such operations. (c) If prior to final acceptance by the Government, any aircraft, as referred to in paragraph (b), are lost, destroyed, or damaged during such operation, and if the risk of such loss, damage or destruction is borne by the Government under paragraph (f) of the clause hereof entitled "Government Property," the Government may terminate this contract with respect to such aircraft, or in case such aircraft is damaged, the Government may require the Contractor to restore such aircraft to the condition in which it was immediately prior to such damage. If the Government terminates this contract with respect to such aircraft, the Contractor shall deliver to the Government at the place at or from which such operation is conducted all or such parts of such aircraft as the Contracting Officer may designate. If the Government requires the 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 be in accordance with the provis is contract, in-co Specification NIL-Q-5923, T -this contract is one. of the tvnes sn.c erein by gxapu .L.4 of saia specirication. The following alterations shall be deemed to have been made in the following clause of the General Provisions of this contract: (a) Clause 4 -Allowable Cost, Fixed Fee and Payment - of the 0 UAL~CONTROL SPECIFICATIONS aircraft to be restored as aforesaid, an equitable adjustment shall be made in the estimated cost and fixed-fee, if any,land in the time required for its performance, and this contract'shall be modified in writing accordingly. (d) Any dispute that may arise under the provisions of this clause shall be determined as provided in the clause hereof~~entitled "Disputes." D E4. F_ T0' Except as 36. ALTERATIONS IN CONTRACT 1. Ey inserting at the - ends of paragraph (a) the following: "Allowable items of cost hereunder shall include but shall not be limited to the following: (1) To the extent not otherwise recoverable under any other provisions of this contract, costs incurred by the Contractor as approved by the Contracting officer in complying with the provisions of the clause of this contract entitled 'Government Property' shall be';allowable items of cost hereunder. (2) Indirect costs in the manner provided for in the Schedule subject, however, to the provisions of the clause hereof entitled 'Negotiated Overhead Rates', (3) Without otherwise limiting the application of good accounting practices and for the purpose of determining the Contractor's allowable costs hereunder, it is agreed as follows : J (i) (a) The Contracting Division means the division of the Contractor responsible for performance of this contract. - 42 - Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 (b) A Supplying Division means a division of the Contractor other than the Contracting Division. (ii) (a) The cost to the Contracting Division of standard commercial articles furnished it by a Supplying Division shall be the invoice price if certified by the Supplyin Division in accordance with subparagraph (3)(iii) below. A price so certified shall be treated as a direct material cost in all respects the same as the price of materials purchased from third parties. (b) The cost to the Contracting Division of non-standard articles which the Contracting Officer has agreed may have the same treatment as provided in subpara- graph (3)(ii)(a) above and which are set forth in a list furnished to the Contracting Officer by the Contractor (which list, with the approval of the Contracting Officer, may be amended from time to time by adding articles thereto), furnished it by a Supplying Division shall be the invoice price of the Supplying Division if certified by the. Supplying Division in accordance with subparagraph (3)(iii) below. A price so certified shall be treated as a direct material cost in all respects the same as the price of materials purchased from third parties. (c) The total cost to this contract of all items other than those covered by (a) and (b) above, furnished by a Supplying Division, shall be the Supplying Division's total cost which shall be determined in accordance with Part 2 of Section XV of the Armed Services Procurement Regulation and other provisions of this contract and shall be treated in all respects the same as if had been incurred hereunder by the Contracting Division. (iii) (a) The certification referred to above shall be that the price is not in excess of the amount customarily charged other divisions of the Contractor, the public or the Government, whichever is lowest. (b) For the purpose of any certification hereunder, the price charged to Westinghouse International Company and the Manufacturing and Repair Division of the Contractor need not be considered." 2. By inserting after paragraph (h) the following paragraph (i): "':(i) Except as otherwise provided in this contract, the -43- Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 1l Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 cost of premium wage compensation (premium wage compensation shall be considered to include compensation paid for overtime, extra-pay shifts, and multishifts), including overtime work, will be allowed as an item of cost hereunder only to the extent approved in writing by the Contracting Officer." (b) Clause 6 - GOVERNMENT PROPERTY - of the General Provisions is hereby amended as follows: 1. By deleting the word "personality" appearing in the fourth line of paragraph (c) and substituting in lieu thereof the word "personalty". 2. By adding the following section (v) to paragraph (f): "(v) In the event any aircraft are to be furnished under this contract, any loss or destruction of, or damage to, such aircraft or other Government Property occurring in connection with operations of said aircraft will be governed by the clause of this contract captioned 'Flight Risks', to the extent such clause is, by its terms, applicable." (c) Clause 9 - EXCUSABIE LIELAYS - of the GENERAL PROVISIONS is amended to include the following additional paragraph: "If the Contractor becomes unable to complete the work and make delivery at the time specified in the Schedule because of technical difficulties, notwithstanding the exercise of good faith and diligent efforts in the performance of the work called for hereunder, it may give the Contracting Officer written notice of the anticipated default with reasons therefor. Such notice and reasons shall be delivered not less than forty-five (45) days before the completion date specified in the Schedule or within such time as the Contracting Officer deems sufficient. If such notice is duly given, then to the extent the interest of the Government makes an extension desirable the Contracting Officer may, in his discretion, extend the period of time specified in the Schedule for such period as he deems advisable, and this contract shall then be modified in writing accordingly." (d) Clause 13 - PATENT RIGHTS - of the General Provisions is deleted and the following clause 13 is substituted therefor: -44- II Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 1 "13. PATENT RIGHTS (a) As used in this clause, the following terms shall have the meanings; set forth below: (i) The term "Subject Invention" means any invention, improve- ment or discovery (whether or not patentable) conceived or first actually reduced to practice either (A) in the performance of the experimental, developmental, or research work called for or required under this contract, or (B) in the performance of any experimental developmental, or research work relating to the subject matter of this contract which was done upon an understanding in writing that a contract would be awarded; PROVIDED that the term "Subject Invention" shall not include any invention which is specifically identified and listed in the Schedule for the purpose of excluding it from the license granted by this clause. (ii) The term "Technical Personnel" means any person employed by or working under contract with the Contractor (other than a subcon- trator whose responsibilities with respect to rights accruing to the Government in inventions arising under subcontracts are set forth in paragraphs (g), (h), and (i) of this clause) who, by reason of the nature of his duties in connection with the performance of this con- tract, would reasonably be expected to make inventions. (iii) The terms "subcontract" and "subcontractor" mean any subcontract or subcontractor of the Contractor, and any lower-tier subcontract or subcontractor under this contract. (b) (1) The Contractor agrees to and does hereby 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 manufacture, use and disposition according to law, or 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 supplies to the general public in competition with the Contractor or the Contractor's commerical licensees in the licensed fields. (2) With respect to: Personnel; M any Subject Invention made by other than Technical (i) 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 45 - 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 be limited to the extent of the Contractor's 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 Rights clause shall be deemed to grant any license under any invention other than a Subject Invention. (c) The Contractor shall furnish to the Contracting Officer the following information and reports concerning Subject Inventions which reasonably appear to be patentable: (i) a written disclosure promptly after conception or first actual reduction to practice of each such Invention together with a written statement specifying whether or not a United States patent application claiming the Invention has been or will be filed by or on behalf of the Contractor; (ii) interim reports, at least every twelve months, 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 report, or certifying that there are no such unreported Inventions; and (iii) prior to final settlement of this contract, a final report listing all such Inventions including all those previously listed in interim reports. (d) In connection with each Subject Invention referred to in (c)(i) above, the Contractor shall do the 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, decided not to file or cause to be filed said application, the Contractor shall so notify the Contracting Officer at the earliest practicable date and in any event not later than eight months after first publication, public use or sale. (ii) if the Contractor specifies that a United States patent application claiming such Invention has not been filed and will not be filed (or having specified that such an application will be filed thereafter notifies the Contracting Officer to the contrary), the Contractor 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 identify 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 Contracting Officer upon written request such duly executed instruments (prepared by the Government) of assignment and application, and such -46- Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 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 sucessor of that part of the Contractor's business to which such Invention pertains: (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. (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 application where such 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 Officer the interim reports required by (c)(ii) above, or fails to furnish the - 47 - I Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89BOO709ROO0400880009-0 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 05,000), 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 ($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. (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; PROVITED, 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, -48- 11 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89BOO709ROO0400880009-0 Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0 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 the rights that the Contractor would have to enforce the subcontractor's obligations for the benefit of the Government with respect to Subject Inventions. The Contractor shall not be obligated to enforce 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 accordance 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 qualified 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 extent, if any, an additional extension of the delivery dates and an increase in contract prices based upon additional costs incurred by such delay are proper under the circumstances; and the contract shall be modified accordingly. If the Contractor, after exerting all reasonable effort, is unable to obtain a qualified subcontractor as set forth above, the Contractor may submit to the Contracting Officer a written request for waiver or modification of the requirement that a 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 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 Officer, this contract shall thereupon automatically ter- minate and the rights and obligations of the parties shall be governed by the provisions of the clause of this contract providing for termina- tion for the convenience of the Government. -49- ii Sanitized Copy Approved for Release 2011/01/10: CIA-RDP89B00709R000400880009-0