APPENDIX III CONTRACT RATE FOR PERIOD JULY 10, 1956 THRU DECEMBER 30, 1956*

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81B00878R000700020068-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 36
• Document Creation Date: December 9, 2016
• Document Release Date: June 16, 1999
• Sequence Number: 68
• Content Type: SS

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NEGOTIATED CONTRACT
Eastman Kodak Company
Rochester, New York
Contract No. P0660
/4r33(606)?j5/716.
Contract For: See Schedule
Amount: See Part V of the
Schedule.
Mail Vouchers to:
Performance Period/Delivery
Schedule: (See Schedule
Inspection point:
Rochester, New York
Administrative Data:
This contract is entered into, by and between the United States of
America, hereinafter called the Government represented by the Contracting
Officer executing this contract, and the above-named Contractor which
is a Corporation, incorporated in the State of New Jersey, 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 attachskSchedule, Appendixes I and II
and General Provisions, which together this signature page and the
accompanying certificate comprise this Contract No. P. O. 660. In the
event of any inconsistency between the schedule and the General
Provisions, the Schedule shall control.
IN WITNESS WHEREOF, the parties hereto have executed this contract as
of 20 September 1956.
Signatures:
EASTMAN K D
TITMR Vice President & General Manager
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THE UNITED STATES CF AMERICA
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CERTIFICATE
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certify that T, am
the Assiptapt Secretary of the Corporation named as
25X1A Contractor herein; that, EMMEN _
who signed this contract on behalf of the Contractor was then the
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Vice President
of said Corporation; that
said contract was duly signed for and in behalf of said Corporation
by authority of its governing body, and is within the scope of its
Corporate powers.
Corporate Seal)
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UMACIl
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;REX OF SCHEDULE
PART I SERUMS AND SUPPLIES TO BE FURNISHED BY CONTRACTOR 1
PART II PERFOB24ANCE OF SERVICES 2
PART III - FURNISHING OF MATERIALS 2
PART IV - MATED MORK AND SEAVICES 3
PART V CONSIDERATION AND PAIYENTS 3
PART VI - REPRICING 4
PART VII PERIOD OF PEBFORMANC2 6
PART VIII - ANTICIPATORY COSTS 6
PART Ii IETTER CONTRACT SUBERSEDED 6
PART X - SPECIAL SECURITY RESTRICTIONS 7
PART XI - WAIVER OF REQUIRENENTS.CP.GEMERAL PROVISIONS 7
APPENDIXES I'and II
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PART I - SERVICES AND SUPPLIES TO BE FURNISHED BY CONTRACTOR.
The Contractor shall furnish the services of necessarY,
personnel, including the categories of Laboratory Hand, Engineer,
Draftsman, and Shop, required to efficiently and expeditiously
operate and maintain the film processing plant which is the subject
of a separate contract between the Contractor and the Government.
Such operation shall be in accordance with stated requirements of
the Government with respect to type of processing, level of operation
required (one, two or three:shift), multiples of the finished product
required to be produced, form of the finished product (minicard,
duplicates, prints, etc. ) identification, marking and coding of the
finished product, distribution, and similar basic policy natters.
The Government Shall assign representatives to work with the Contractor
and to guide the Contractor with respect to what subject material is to be
processed to completion and what material is to be discarded after
partial processing. The basic supplies and materiels including film,
paper 3i and chemicals required in the processing of subject materials are
to be furnished by the Government under another contract. The Contractor
is to furnish hereunder all other necessary materials and supplies re-
quired for the performance of the above operation and to maintain the
processing plant in good repair. Detailed instruction by the Government
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with respect to its requirements hereunder will be issued to the
Contractor from time-to-time, as operations hereunder progress.
PART II - PERFORMANCE OF SERVICES
a. The extent and character of the work to be done by the
Contractor under this Contract shall be subject to the general
supervision, direction, control and approval of the Contracting
Officer or his authorized representative, to whom the Contractor
shall report and be responeible. In the event there should be
any dispute with regard to the extent and character of the work
to be performed, the matter shall be determined as provided in
general Provision 8, -Disputes.
b. The Contractor agrees to furnish sufficient personnel
of the labor categories specified in Appendixe!4 I and II hereof, as
well as supervisory and administrative personnel to assure successful
prosecution of the work.
O. All operations under the terms of this contract will be
done in an efficient and workmanlike manner and by qualified personnel
of the Contractor's organization who are thoroughly familiar with the
type of work being performed.
d. Services required by the Contractor and performed by the
Contractor's personnel of the labor categories specified in. Appendixes
I an II will be considered Direct Labor under this contract.
PART III . FURNISHING OF MATERIALS
Materials and supplies, other than those to be furnished by the
Government, required for performance of the above operations and to
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maintain the processing plant in good repair shall be furnished
by the Contractor.
PART IV RELATED WORK AND SERVICES
In addition to the serViCet-and supplies to be provided ebove,
the Contractor will perform such other work and service, as may be
requested by the Contracting Officer or his authorized representative
and agreed to by the Contractor, which are necessary to ensure timely
performance of the contract work.
PART V CONSIDERATION AND PAIMENT
a. There has been allotted for this contract the amount of
$175,000 for the period from 1 October 1955 to 30 June 1956. The total
amount payable to the. Contractor under this contract for that period
obeli not exceed this amount without written authorization from the
Contracting Officer. The Contractor is authorized to expend or obligate
in futherance of its performance hereunder, an amount not to exceed
4500,000 during that portion of the extended contract period commencing
1 July 1956 and ending 31 December 1956. Additional :sums maybe
authorized for expenditure hereunder from time to time during the term
of this contract to meet the requirements of the Government.
b. In accordance with the. Clause of this contract entitled
"PAIMENTS", the Contractor Shall be paid as follows:
(1) For work and services performed by the Contractor's personnel
of the labor categories set forth in Appendixes I and II, the Contractor
shall be paid the applicable hourly rites stated in the column entitled
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"Contract Hourly Rate", in Appendixes I and II, for each Direct Labor hour
of work or services actually performed hereunder by such personnel. The
time of nonproductive personnel will not be included in direct labor, and
the Contractor agrees that only direct labor of its personnel of the labor
categories designated in Appendixes I and II, engaged in the work called
for by this contract will be included in its billings hereunder.
(2) For materials and supplies furnished by the Contractor under
this contract the Contractor shall be reimbursed at actual cost plus an
amount for General and Administrative expense determined by applying the
appropriate percentage rate of G & A Expense shown in Appendixes I and II
to the actual cost of such materials and supplies. Materials and supplies
withdrawn from the Contractor's stock for use on this contract may be
charged at prices determined by the Contractor's established method of
pricing for its other business. No amount representing profit shall be added to
the cost or price of supplies or materials furnished under this contract.
(3) For related work and services performed hereunder by the Contractor,
payment shall be made in accordance with Paragraph (d) of Clause 40 Payments,
of the General Provisions.
(c) It is hereby agreed that the "Contract Hourly Rates" as
specified in Appendixes I and II are based on the average accounting rates
used for Contractor's employees directly engaged in the performance of
work under this contract and include all applicable overhead General and
Administrative Expense and Profit. In the event overtime work is determined
to be necessary for the performance of the work and is specifically
authorized by the Contracting Officer or his authorized representative, it
is understood and agreed that the premium portion of any such overtime pay
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shall be charged
accounting practices.
PART VI REPRICING
a. In view of the fact that the Contractor's overhead and general
and administrative expense rates are revised from time to time
based on cost studies performed every Kodak Calendar Year by the
cognisant audit agency of the Department of Defense, the "Contract
Hourly Rates" set forth in Appendixes I and II and the "General Administra,
tive Expense Rate" referred to in PART V b. (2). above, and set forth in
Appendixes I and II are also subject to revision, as follows:
(1) The "Contract Hourly Rates" and the General and Administrative
Expense Rite shall be fixed as shown in Appendix I for the period from
the inception of this contract to 25 December 1955, and as shown in
Appendix II from 25 December 1955 to 30 December 1956 and shall apply
provisionally thereafter until new overheadand general and'administrer.
tive expense rates have been negotiated between the Contractor and the
cognizant audit agency for Kodak Calendar Year 1957. Based on these new
overhead and general and administrative expense rates, new fixed
"Contract Hourly Rates" and General and Administrative Expense Rate",
for the same period of time, shall be negotiated for incorporation
into this contract by an amendment hereto.
(2) The "Contract Hourly Rates" may also be revised from time to
time to reflect wage and salary, rate adjustments in any or all of
the labor categories stated in Appendixes I and II which may result from
any general plant wage and salary range adjustment established by
the Contractor.
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in accordance with the Contractor's established
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b. Any failure on the part of the parties hereto to agree to
any such revisions shall be considered a dispute concerning 4 question
of fact within the meaning of the article of this contract entitled
'Disputes." Pending settlement of such dispute, the Contractor Shill
diligently proceed with the performance of the subject work
hereunder.
PART VII PERIOD OF PERFORMANCE
This contract shall expire on 30 June 1957; however, the
Government shall have the option of renewing this contract for the
period 1 July 1957 to 30 June 1958? subject to the avialability of
Fiscal Year 1958 funds for this purpose.
PART VIII ANTICIPATORY COSTS
All costs which have been incurred by the Contractor on or
after 1 October 1955, in anticipation of and prior to the signing of
this contract, and which, if incurred after the signing of this
contract, would have been considered as allowable charges hereunder,
will be accepted by the Contracting Officer under this contract.
PART IX LETTER CONTRACT SUPERSEDED
This is the Definitive Contract contemplated by the Letter
contract accepted by the Contractor under date of 22 December 1955 and'Amendr.
menta Nos. 1 and 2 thereto. This Definitive Contract supersedes said
Letter Contract and Amendments Noe. 1 and 2. Work performed and payments
made under said Letter Contract as amended dial be deemed to be
work performed and payments made under this Definitive Contract. The
data of the Letter Contract Shall govern for the determination of the
priority status of the Definitive Contract. In the event of conflict be-
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Definitive Contract shall prevail.
PART X 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
whatooever 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 II arm 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
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.renr?'
awaiver of compliance with the requirements of the Oeneral Provisions
conflicting with such security requirements. Any waiver of compliance
with the General Provisions of this contract imsued:by the Contracting
Officer shall be in writing, except that the approval by the Contracting
Officer of any sdbcontract issued hereunder by the Contractor shall be
deemed to constitute approval of waiver of any Clauses of the General
Provisions in conflict with stipulations of such subcontract.
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INDEX OF GENERAL PROVISIONS
1. -DEFINITIONS . . . . . . ....... . ? ? ? ? ??? ? ?
2. 'CHANGES
3. 'INSPECTION. ....... ? ? ? ? 0 0 0 /0 OOOOOOO
4. 'PAYMENTS. ? ? ? ? OOOOO 0 ? OOOOOOOOOOOO
5. ASSIGNMENT OF CLAIMS. . . . . . . . ? 0 ? ? OOOOO ?
6. ,RECORDS ? ? ? ? O ? ?
7. EXCUSABLE DELAYS ? ? ? ? O
S. DISruTSS,? ?1 ? ? ? ? ? ? ? ? ?, ? ? ? ?
9. BUY AMERICIN ACT. O ? ? ? 6 ? ? ? ? ? OO O O O
10, CONVICT LABOR .2. ?.* ? ? . ? ? OOOOOO ? ? . ?
11. EIGHT-HOUR LAW Ur 1912, ? ? ? ? 40 40 0 0 0 40 ? OO O ? O
12. WALSH-HCAIEY PUBLIC CONTRACTS ACT OOOOOOO . ? ? ?
13. NONDISCRIKNATION IN EMPLOY/ENT . . . . .? ?
? . ? .
1
1
1
2
3
4
5
6
6
7
7
7
a
14.ornciALs NO: TO BENEFIT. ? ? ? ? ? ? ? ? ? 0 ? a
15. COVENANT AGAINST CONTINGENi iERS. ? ? ? ? ? O ? 8
16. REPORTING OF ROYALTIES. ? ? ? ? ? 0 0 OOOOO 0 ? 9
17, NOTICE AND ASSISTANCE REGARDING PATENT INFRINGEMENT . . 10
la. FILING OF PATENT APPLICATIONS . . . . OOOOO 0 0 0 0 11
19. COPYRIGHT u.
20. GRATUITIES. OO ? O ? ? ? 0 ? ? ? ? ? ? OOOOO ? 12
21. TERMINATION. . . . . . . . . . . . ....... . . 12
22, MILITARY SECGRITY REQUIREMENTS. ? ? ? ? ? ??? ? ? ? ? ? 16
23. GOVERNICNT-FURNISHED PROPZRTY .... . . .... , .17
24. EMPLOINENT OF ALIENS. . ? ? .... ? ? ? ..... . 21
25. SUBCONTRACTS. ? ? ... ? ? ? ? ? ? 6 ? ? . ? ? 0 ? 21
26. ALTERATIONS ... ? ? ? ? 22
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A
GENERAL PROVISIONS
1. DEFINITIONS
As used throughout this contract, the following terns shall have the
meanings set forth below:
(a) The term "Secretary" means the Secretary, the Under Secretary,
or any Assistant Secretary of the Department and the head or any assistant
head of the executive agency; and the term "his duly authorized represen,.
tative" means any person or persons or board (other than the Contracting
Officer) authorized to act for the Secretary; and the term "Department"
means that component of the Government having cognizance of this contract
and represented by the Contracting Officer executing this contract.
(b) The term "Contracting Officer" means the person executing this
contract on behalf of the Government, and any other officer or civilian
employee who is a properly designated Contracting Officer; and the term
includes, except as otherwise provided in this contract, the authorized
representative of a Contracting Officer acting within the limits of his
authority.
(c) Except as otherwise provided in this contract, the term "sub-
contracts" includes purchase orders Under this contract.
2. CHANGES
The Contracting Officer may at any time, by a written order, within
the general scope of this contract, and without notice to any sureties,
make changes in (i) drawings, designs, or specifications, (ii) direct the
addition of work or services, (iii) make changes in method of shipping or
packing, and (iv) make changes in place of delivery. If such changes re-
quire a change in the time of performance of the work called for hereunder,
the contract shall be modified in writing accordingly. The hourly rate set
forth in the schedule shall not be adjusted by reason of any change ordered
under this clause.
3. INSPECTION
(a) All material and workmanship shall be subject to inspection and
test by representatives of the Government. For this purpose, the 005.
tractor shall allows at all reasonable times, inspectors and other Govern.
sent personnel free access to the plant and operations and shall furnish
such facilities as may be required for the work. The Contractor shall
inform the inspector when the work is ready for inspection. The Government
representative shall have the right to (i) require the replacement of parts
which are not in accordance with applicable specifications, and (ii) require
the correction of defects.
(b) The Contractor shall provide and maintain an inspection system
acceptable to the Government covering the inspection of the supplies and
services furnished under this contract. Records of all inspection work by
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the Contractor Shall be kept complete and available to the Government
during the performance of the contract.
(c) The Contractor agrees that it will employ only qualified and
competent .employees in the performance of this contract and that the
services performed will conform to the highest professional standards for
the work involved.
(d) Prior to final acceptance by the Government, any correction, of
detects in supplies or services, or replacement of materials to make the
item conform to contract requirements, which correction or replacement is
made necessary by inferior workmanship or materials, shall be at no cost
to the Government.
(e) Final acceptance by the Government shall be conclusive except as
regards latent defects, fraud, or such gross mistakes as amount to fraud.
The Contractor shell, before or after final acceptance, remedy defects or
failures due to such causes at no cost to the Government.
4. PAYMENTS
The Contractor shall be paid as follows upon the submission of prop-
erly certified invoices or vouchers approved by the Contracting Officers
(a) Time Rate.
(i) The amounts computed by applying the appropriate time rate
or rates set forth in the schedule to the number of direct labor hours per-
formed, Which rates shall include wages, overhead, general and adminp.
istrative expense and profit. Fractional parts of an hour Shall be payable
on a prorated basis. The Contractor will substantiate vouchers by-efrii.
dence-of actual eetv-and by individual daily job timecardS, preferably
signed by the workers performing the services. Payments will normally
be made at Contractors payroll intervals, but may be varied by the
Contracting Officer if conditions so warrant.
(ii) Notwithstanding the provisions of subparagraph (i) hereof,
the Contracting Officer, as provided in the schedule, shall withhold pay-
ment of certain amounts due under this contract. Such amounts shall
become payable upon completion of this contract.
(iii) Unless provisions of the schedule hereof otherwise specify,
the hourly rate or rates set forth in the schedule shall not be varied by
virtue of the Contractor having performed work on an overtime basis. If
the schedule provides rates for overtime, the premium portion of those
rates will not be reimbursable unless the overtime in approved in writing
by the Contracting Officer.
(b) Materials (Including Subcontracts).
(i) Allowable costs of direct materials shall be determined by the
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Services Procurement Regulation. The Contractor Shall support all material
costs claimed by submitting paid invoices or storeroom requisitions.
(ii) The Cost of subcontracts which are authorised pursuant to the
clause hereof entitled "Stboontracte shall be reimbursable costs hereunder,
iitii'---The-Sontractorbtll the extent-of its abiI#yi procure.
materials at the most advantageous prices available, with due regard;bo'--
securing prompt delivery of satisfactory materials, take all OsehAfid trade
discounts, rebates, allowances, credits, salvage, C._ siodii, and bonificapp
tions and when unable to take advantage of such ts it shall promptly
notify the Contracting Officer to that ofbot4ad the reason therefor.
Credit shall to given to the GoverwentMr cash and trade discounts, re-
bates allowances, credits moIxage, the value of resulting scrap, when the
amount of such scrap iscailfgficiable, commissions and bonifioations which
have accrued tolfber1446fit of the Contractor or would have so accrued
except for?,thefault or neglect of the Contractor. Such benefits lost
thr fault or neglect on the part of the Contractor or lost through
-Governadtti-ahall-not.btrdeducted,front'gross'coste.---
(c) As of the date of execution of this contract, there has been allotted
for it the total eam set forth in the schedule. This sum may be increased
from time to time by the Government solely at its discretion, and the comp.
tract shall be amended accordingly. Notwithstanding any other provisions
of this contract the Contractor shall not be obligated to perform any wry-
ices, pursuant hereto, the aggregate price of which when added to the
aggregate price of all services theretofore furnished pursuant hereto would
exceed said sum. If at any time the Contractor considers it likely that the
aggregate amount set forth in the schedule may be exceeded 'within 45 days,
the Contractor will so notify the Contracting Officer and the parties may
thereupon enter into negotiations for an amendment to or modification
of this contract, as may be appropriate. Anything in this contract to the
contrary notwithstanding, the Government shall not be obligated to pay to
the Contractor any amount in excess of the sum allotted for this contract.
(41) In addition to the foregoing, the Government obeli pay the
Contractor upon approval by the Contracting Officer such other allowable
costs, plus reasonable profit, as may to incurred from time to time in
support of the Governmentts needs hereunder.
5. ASSIGNMENT OF CLAIMS
(a) Pursuant to the provisions of the Assignment of Claims Act of
1940 as amended (11 U. S. Code 203, 41 U. S. Code 15), if this contract
provides for payments aggregating $1,000 or more, claims for moneys due
or to become due to the Contractor froulthe Government under this contract
may be assigned to a bank, trust company, or other finanoing institution
including any Federal lending agency, and May thereafter be further assigned
and reassigned to any such institution. Any such assignment or reassignment
shall cover all amounts payable under this contract and not already paid,
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and shall not be made to more than one party, except that any such
assignment or reassignment may be made to one party or agent or trustee
for two or more parties participating in such financing. Notwithstanding
any other provision of this contract, payment to an assignee of any
moneys due or to become due under this contract shall not, to the extent
provided in said Act as amended, be subject to reduction or set-off,
(b) In no event shall copies of this contract or of any-plane,
specifications, or other similar documents relating to work under this
contract, if marked "TOP SECRET,' "SECRET,' "CONFIDENTIAL," be furnished
to any assignee of any claim arising under this contract or to any other
person not entitled to receive the same; PROVIDED, that a copy or any
part or all of this contract so marked may be furnished, or any informer.
tion contained therein may be disclosed to such assignee upon the prior
written authorization of the Contracting Officer.
(c) The Contractor -shall obtain the written authorization of the
Contracting Officer prior to the assignment of any rights under this
contract.
6? RECORpS
(a) (1) The Contractor agrees to maintain books, records, documents
and other evidence pertaining to the costs and expenses of this contract
(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 clalimmit under the
provisions of this contract. The Contractorls accounting procedures and
practices shall be subject to the approval of the Contracting Officer;
provided, however, that no material change will be required to be made in
the Contractor's accounting procedures and practices if they conform, to
generally accepted accounting practices and if the costs properly applic-
able 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 glib-
paragraph (A) 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 hie duly
authorized representatives determines that his audit of the amounts re-
imbursed under this contract as transportation charges will be made at a V/
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
covered by any such voucher, to ouch representative as may be designated
for that purpose through the Contracting Officer such documentary evi-
dence in support of transportation coots as may be required by the Con-
tracting Officer or any of his duly authorized representatives.
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(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 sdbmitted by the Contractor after the completion of
the work under the contract and designated by the Contractor as the
"completion voucher" or "completion invoice" 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 (0) costs or expenses of the contract an 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 sub-
paragraph (3) above, and the records described in the provisio 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 Govern-
ment Agency or his authorized representatives.
(6) The provisions of this paragraph (a), including this ea-
paragraph (6), shall be applicable to and included in each subcontract here-
under which is on a cost, cost-plus-amfixed-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 sub-
contract, have access to and the right to examine any directly pertinent books,
documents, papers, and records of such subcontractor involving transactions
related to the subcontract. The term "subcontract," as used in this
paragraph (b) only, excludes (i) purchase orders not exceeding $1,000 and
subcontracts or purchase orders for public utility services at
rates established for uniform applicability to the general public.
7. EXCUSABLE DELAYS
The Contractor obeli not be in default by reason of any failure in per-
formance of this contract in accordance with its terms (including any
failure by the Contractor to make progress in the prosecution of the work
hereunder which endangers such performance) if such failure arises out of
causes beyond the control and without the fault or negligence of the
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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 iourcesp and
the Contractor shall have failed reasonably to comply with such order.
Upon request of the Contractor, the Contracting Officer shall ascertain
the facts and extent of such failure and, if he shall determine that such
failure was occasioned by any one or more of the said causes, the delivery
schedule shall be revised accordingly, subject to the rights of the Govern-
ment under the clause hereof entitled "Termination."
8. DISPUTES
Except as otherwise provided in this contract, any dispute concerning
a question of fact arising under this contract which is not disposed of
by agreement shall be decided by the Contracting Officer, who shall reduce
his decision to writing and mail or otherwise furnish a copy thereof to the
Contractor. Within thirty (30) days from the date of receipt' of such copy,
the Contractor may appeal by mailing or otherwise furnishing to the Gon-
treating Officer a written appeal addressed to the Secretary, and the
decision of the Secretary or his duly authorised 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 Shell be final
and conclusive. In connection with any appeal proceeding under this clause,
the Contractor shall be afforded an opportunity to be heard and to offer
evidence in support of its appeal. Pending final decision of a dispute
hereunder, the Contractor shall proceed diligently with the performance of
the contract and in accordance with the Contracting Officer's decision.
9. BUT AMERICAN ACT
The Contractor agrees that there will be deltmedtmdsr.this contract
only such =manufactured articles, materials and supplies (wcida 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 102-4), the foregoing provision shall not apply (i) mith
respect to supplies excepted by the Secretary from the application of that
Act, (ii) with respect to supplies for use outside the United States, or
(iii) with respect to the supplies to be delivered under this contract
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which 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, or (iv) With respect
to such supplies from which the supplies to delivered under this Contract
are manufactured, 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 :reticent and reasonably available commercial quan.
tities and of a satisfactory quality,
10. 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,
11. 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. Cods 324.326) and is
not Covered by the Walsh.-.Healey Public Contracts Act (41 U. S. Code 3545)
is subject to the following provisions and embeptions of said Eight.
Hour Law of 1912 as amended, and to all other provisions and exceptions
of said Law:
No laborer or mechanic: doing any part of the work contemplated by
this contract, in the employ of the Contractor shall be required or
permitted to work more than eight hours in any one calendar day upon such
work, except upon the condition that compensation is paid to such laborer
or mechanic in accordance with the provisions of this claim. The wages
of every such laborer and mechanic employed by the Contractor: shall be
computed on a basic day rate of eight hours per day; and work in excess
of eight hours per day is permitted only upon the condition 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 Contractor for
each such laborer or meohanio 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
12, WALSH-HEALEY PUBLIC CONTRACTS ACT
If this contract is for the manufacture or furnishing of materials,
supplies articles or equipment in an amount which exceeds or may exceed
101040SaillorittiotherAdietiOSIMestUABU:ShaaliEUEMINOWOBeleBe-contracts Act
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EPZET
as amended (41 U. S. Code 3545), there are hereby incorporated by reference
all representations and stipulations required by said Act and regulations
issued thereunder by the Secretary of Labor, such representations and
stipulations being subject to all applicable rulings and interpretations of
the Secretary of Labor which are now or may hereafter be in effect, except
that the Contractor shall not be required to include this clause in sub-
contracts issued hereunder when the inclusion of this clause in a subcontract
would jeopardize or conflict with the security considerations established
in connection with this contract.
13, NONDISCRINXNATION INEMPLOINENT
(a) In connection with the performance of work under this contract,
the Contractor agrees not to diacriminate against any employee or applicant
for employment because of race, religion, color, or national origin. The
aforesaid provision shall include, but not be limited to, the following:
employment, upgrading, demotion, or transfer; recruitment or recruitment
advertising; layoff or termination; rates of pay or other forms of compen-
sation; and selection for training, including apprenticeship, The Contra?.
tor agrees to post hereafter in conspicuous places, available for employees
and applicants for employment, notices to be provided by the Contracting
Officer setting forth the provisions of the nondiscrimination clause.
(b) The Contractor further agrees to insert the foregoing provision
in subcontracts issued hereunder, except subcontracts for standard
commercial supplies or raw materials, and except as insertion of the fore-
going provision in a subcontract would jeopardize or conflict with the
security considerations established in connection with this contract.
24. 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 ehall not be construed to extend
to this contract if nada with a corporation for it:: general benefit.
15, COVEN= 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, brokerage, or 'contingent
fee excepting bona fide employees or bona fide established commercial or
selling agencies maintained by the contractor for the purpose. of securing
business. For breach or violation of this warranty the Government shall
have the right to annul this contract without liability or in its discretion
to deduct from the contract price or consideration the full amount of such
commission'percentage, brokerage or contingent fee.
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1En---11tPORTING-CIP- 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 $2C 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 royaltiek(including
the initial $250):
(1) The name and address of each licensor to v,viam royalties in
excess of $40 have been paid or are to be paid,
(2) The patent numbers, patent applicationSerial numbers (with
filing dates), or other identification of the bas3fifor such royalties,
(3) The manner of computing the royal* es consisting of (i) a
brief identification of each royalty-bearing it or process, (ii) the total
amount of royalties, and (iii) the percent l' rate or dollars and cents
cams; PROVIDED that if the
ts or dollars and cents value,
oh the Contractor computes the
amount of royalties on each such unit or
royalties cannot be computed in terms of
then other data showing the manner in
royalties.
(6) In lieu of furnishing a rpport under paragraph (a), the Contractor
may furnish a single, coneolidat report for each accounting period of the
Contractor during which the Con actor has contracts with the Government,
provided the Contractor has r sted and obtained the prior written
approval of the Contracting icor. Such consolidated report shall be
furnished, when the furni g thereof has been approved, in the number of
copies as approved, as so as practicable after the close of. the
accounting period cover by the report. Such consolidated report shall
be made in accordance th Contractor's established accounting practice
and Shall include* for the accounting period, the total amount of
royalties accruing V) each licensor at a rate in excess of $1,000 per
Ctor's over-all business, together with (i) the name
h such licensor, (ii) the patent numbers patent appli-
rs (with filing dates), or other identification of the
royalties, (iii) a brief description of the subject matter
e under which royalties are charged, (iv) the percentage rate
t, of if the royalties do not accrue by rate or unit amount,
data Showing the manner by which the royalties accrue to
* and (r) an estimate or approximation (without detailed accounting)
portion of such royalties that may be attributable to Governmentacts. The Contractor shall, if requested by the Government, furnish
mamma* expense a more detailed allocation of such royalty payments
III
annum= the Cont
and address of e
cation serial
basis for
of the lice
or unit
such oth
licen
oft
con
at
MI -
Og ?k :111
? VII
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:(tr)-13r-ttoreirintrtttttVtrilreattttitttrili4tteWtirififittot 'to'",'''
furnish consolidated reports under paragraph (b) above, the COntraotl4t-
Officer ahall promptly consider the regnant and furnish to the ContreCtor
a letter stating whether or not the request is approved and, notOthstanding
any such approval, the Contracting Officer shall have the rightAo question
any such sanegnently furnished report as to accuracy or c eteness of
data and to ask for additional information. The Contract hall furnish
a copy of such letter of approval to the Contracting 04 car idministering
this contract..
the amount of this
payment shall be with,.
t (10%) of such amount or
been set aside, such reserve or
the Contractor obeli have furnished
called for by paragraph (a) hereof or
e Contractor's request to furnish the
that no amount shall continue to be
causes specified in this paragraph (I) if
find that the Contractor has not been
uired by paragraph (c) within a reasonable time
quest to suit a single, consolidated report under
agraph (b) of this clause; and PROVIDED FURTHER that
floor may, in his discretion, order payment to be with,.
t and manner above provided if the report celled for by.
in due but has not been received, or if received, is found
isfaotory. No amount ehall be withheld under this. paragraph when
amount specified by this paragraph is being withheld under
provisions of this contract. The withholding of any amount or subsequent
t thereof to the Contractor shall not be construed as a waiver of any
tddValdirtirtherTRArelftdrilftftrlatUrtottftet4'
(d) After payment of eighty percent (SO%)
contract as from time to time amended, furt
held until a reserve of either (i) ten per
(ii) $5,000, whichever is less, shall
the balance thereof to be retained un
to the Contracting Officer the repo
the copy of the letter approving
report under paragraph (b);
withheld from payment for t
the Contracting Officer
furnished a letter as
after making written
the provisions of
the Contracting
held in the
paragraph
to be
the
ot
17. NOTICE AND ASSISTANCE REGARDING PATENT INFRINGEMENT
The provisions of this clause shall be applicable only if the amount
of this contract is in excess of 0,000.
(a) The Contractor shall report to the Contracting Officer, promptly
and in reasonable written detail, each notice or claim of patent infringement
based on the performance of this contract of which the Contractor has
knowledge.
(b) In the event of litigation against the Government on account of
any claim of patent infringement arising out of the performance of this
contract or out of the use of any supplies furnished or work or services
performed hereunder, the Contractor shall furnish to the Government, upon
regnant, 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 thostcases in which
the ell"
attaterdplie aigiffieSttii kirik$4460Paigefraaegfe*
10
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18. FILING OF PATENT APPLICATIONS
(a) Before filing or causing to be filed a patent application disclosing
any subject natter of this contract which subject matter is classified
"Secret or higher, the Contractor :hall, citing the thirty (30) day pro-
vision below, transmit the proposed application to the Contracting Officer
for determination whether, for reasons of national security, .such
applioa-
tion should be placed under an order of secrecy or sealed in accordance
with the provisions of 35 H. B. 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 prior to the time when the Contractor files or causes to be
filed a patent application disclosing any subject matter of this contract,
which subject matter is classified Confidential," a copy of such appli-
cation for determination whether, for reasons of national security, such
application should be placed under an order of secrecy or the issuance of
a patent should be otherwise delayed under pertinent statutes or regular.
tions.
(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.
19. COPYRIGHT
(a) The Contractor agrees to and does hereby grant to the Government,
and to its officers, agents and employees acting within the scope of their
official duties, (i) a royaIty-free? nonexclusive and irrevocable 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 employed 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
composed by the Contractor in the performance of this contract but which
is incorporated in the material furnithed under this contracts 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 effort to
advise the Contracting Officer, at the time of delivering any copyrightable
or copyrighted work furnished under this contract, of any adversely held
i!lidIrkgP ilgAb1674)15010001 work and of
* 118r9N%..4,
salon om
?
privacy therein contained.
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(c) The Contractor agrees to report to the Contracting Qfficert
promptly and in reasonable written detail, any notice or claim of copy-
right infringement received by the Contractor with respect to any notarial
delivered under this contract,
20, GRATUITIES
(a) The Government may, by written notice to the Contractor,
terminate the right of the Contractor to proceed under this contract if
it is found, after notice and hearing, by the Secretary or his duly
authorized representative, that gratuities (in the form of entertainment,
gifts, or otherwise) were offered or given by the Contractor, or any agent
or representative of the Contractor, to any officer or employee of the
Government with a view toward securing a contract or securing favorable
treatment with respect to the awarding or amending, or the making of any
determinations with respect to the performance of such contract; PROVIDED,
that the existence of the facts on 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 porous 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 Secretary or his duly authorized
representative) which shall be not loss than three nor more than ten times
the costs immunma by the Contractor in providing any such gratuitites to
any such officer or employee.
(o) The rights and remedies of the Government provided in this
clause Isbell not be exclusive and are in addition to any other rights and
remedies provided by law or under this contract.
21, TERMINATION
(a) The performance of work under this contract may be terminated by
the Government in accordance with this clause in whole, or from time to
time in part, (1) whenever the Contractor shall default in performance of
this contract in accordance with its terms (including 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 10 days (or such longer period as the Con-
treating Officer 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 interests of
the Government. Any such termination ahall 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 Govern-
ment, 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 the contract for default under (1) above, it is
400034ifielloisirsteiribe DitextsmettrtitAtUa8t34680036021002096Aate progress
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in performance is due to causes beyond the control and without the fault
or negligence of the Contractor purauant to the provisions of the clause
of this contract entitled "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 governed accord-
ingly.
? (b) After receipt of a Notice of Termination and except as otherwise
directed by the Contracting Officer, the Contractor shall a) stop work
under the contract on the date and to the extent specified in the Notice of
Termination; (2) place no further orders or adbcontracts for materials,
services, or facilities except as may he necessary for completion of such
portion of the work under the contract as is not terminated; (3) terminate
all orders and subcontracts to the extent that they relate to the performance
of work terminated by the Notice of Termination; (4) assign to the Govern,
meat in the &tanner 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; (5) with the approval or ratification of the
Contracting Officer, which approval or ratification shall be final and con-
clusive for all the 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 accord,
ance with the provisions of this contract; (6) transfer title (to the extent
that title has not already been transferred) and, in the manner, to the
extent, and at the times directed by the Contracting Officer, deliver to the
Government (i) the fabricated or unfabricated parts, work in process,
completed work, supplies, and other material produced as a part of, or
acquired in respect of the performance of, the work terminated by. the
Notice of Termination; (ii) the completed 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, fixtures, and other special tools and tooling acquired or
manufactured for the performance of this contract for the mat 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 authorised by the Contracting Officer,
any property of the types referred to in provision (6) of this paragraph:
PROVIDED, HOWEVER, That the Contractor (i) shall not be required to extend
credit to any purchaser, and (Li) may acquire any such property under the
conditions prescribed by and at a price or prices approved by the Contract-
ing Officer: AND PROVIDED FURTHER, That the proceeds of any such transfer
or disposition shall be applied in reduction of any payments to be made by
the Government to the Contractor under this contract or ahall otherwise be
credited to the price or cost of work covered by this contract or paid in
such manner as the Contracting Officer may direct; (8) complete performance
of such part of the work as shall not have been terminated by the Notice of
Termination; and (9) take such action as may be necessary, or as the Con,
tracting Officer may direct, for the protection and preservation of the
property related to this contract which is in the possession of the Contractor
and in which the Government has or may acquire an interest. The Contractor
shall proceed immediately with the performance of the above obligations
notwithstonding any delay in determining or adjusting any amount reimbursable
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under the provisions of this clause. At any time after expiration of the
plant clearance period, as defined in Section VIII Armed Services Procure-
ment Regulation, as it may be amended from time to time, the Contractor
may submit to the Contracting Officer a list certified as to quantity and
quality, of any or all items of termination Inventory not previously
disposed of, exclusive of items the disposition of which has been directed
or authorised by the Contracting Officer, and may request the Government
to remove such items or enter into a storage agreement covering them. Not
later than fifteen OM days thereafter, the Government will accept title
to such items and remove them or enter into a storage agreement covering
the same, provided that the list submitted shall be subject to verification
by the Contracting Officer upon removal of the items, or if the items are
stored, within forty-five (45) days from, the date of submission of the
list, and any necessary adjustment to correct the lint 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 2 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 2-year period or authorized extension thereof.
However, if the Contracting Officer determines that the facto justify such
action, he may receive and act upon any such termination claim at any
time after such 2-year period or any extension thereof. Upon failure of
the Contractor to submit its termination claim with the time allowed, the
Contracting Officer may determine, on the basis of information available
to him4 the amount if any due to the Contractor by reason of the termination
and shall thereupon pay to the Contractor the amount so determined.
(d) Subject to the provisions of paragraph (c), the Contractor and
the Contracting Officer may agree upon the whole or any part of the amount
;ww or amounts to be paid to the Contractor by reason of the total or partial
termination of work pursuant to this clause which amount or amounts may
include a reasonable allowance for profit on work done. The contract shall
be amended accordingly, and the Contractor shall be paid the agreed amount.
(e) In the event of the failure of the Contractor and the Contracting
Officio to agree in whole or in part, as provided in paragraph (d) above,
as to the amounts 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 determined as follows:
(1) If the termination of the contract is for the convenience of
the Government:
(i) There shall be included for direct labor hours (es
defined in the Schedule of the contract) an amount which shall be determined
by multiplying the number of direct labor hours expended prior and up to
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the effective date of termination by the hourly rate or rates set forth in
the Schedule less any hourly rate paymenta theretofore made to the Contractor.
(ii) There shall be included therein all costs of material
reimbursable 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.
(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
date with respect to the terminated portion of the contract and for the
termination and settlement of subcontracts thereunder, together with rea-
sonable storage, transportation, and other costs incurred in connection
with the protection or disposition of termination inventory.
(2) If the Termination of the contract is for the default of the
Contractors .
(i) There shall be included for all direct labor hours (as
defined in the Schedule of the contract) an amount which shall be determined
by multiplying the number of direct labor hours expended prior and up to
the effective date of termination by the hourly rate or rates set forth in
the Schedule less the profit factor contained therein as indicated in the
Schedule and less any hourly rate payments theretofore made.
(ii) There shall be included therein such costs as are set
forth in subparagraphs CL) (ii) and (iii) of this paragraph (Os PROVIDED,
HOWEVER, That there shall not be included any amounts for the preparation
of the ContractOrts Settlement Proposal.
(3) If the amount determined under subparagraphs (1) and (2),
above, is less than the total payments theretofore made to the Contractor,
Am, the Contractor shall repay the excess amount to the Government.
(E) 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, it
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 followings (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 to 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 connection with this contract,
and (3) the agreed price for, or the proceeds, of sale of any materials,
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supplies, or other things acquired by the Contractor or sold pursuant to
the provisions of this clause and net otherwise recovered by or credited
to the Government.
(h) In the event of a partial termination, the portion of the contract
relating to hourly rates which are payable with respect to the work under
the continued portion of the contract shall be equitably adjusted by agree..
ment between the Contractor and the Contracting Officer, and such adjust?
ment shall be evidenced by an amendment to this contract.
(i) The Government may from, time to time, under such terms and con?
ditions as it may prescribe, maks 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 Contractor to the Government upon
demand, together with interest computed at the rate of 6 percent per annum,
for the period from, the date 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
10 days after the date of such retention or disposition.
(j) Unless otherwise provided for in this contract, or by applicable
statute, the Contractor from, the effective date of termination and for a
period of 6 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, recorder 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, microphotographs, or other authentic reproductions thereof.
22. MILITARY SECURITY REQUIREMENTS
(a) The provisions of this clause shall apply to the extent that this
contract involved 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 Contractor shall safeguard
all classified elements of this contract and shall provide and maintain a
system of security controls within its awn organization in accordance with
the requirements of (i) the Department of Defense Industrial Security
Manual for Safeguarding Classified Security sprormation as in effect on
figivrcatitake FiArbnolif MaitERIUS MiNiPaPag?80 reference
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and made a part of this contract (ii) any amendments to said Manual
required by the demands of national security as determined by the
Government and Made after the date of this contract, notice of which has
been furnished to the Contractor 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 Contractor's business.
(d) Designated representatives of the Government responsible 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 requirements of the
terms and conditions of this clam. Should the Government, through its
authorized representative, determine that the Contractor has not complied
with such requirementa, the Government shall inform the Contractor in
writing of the proper actions to be taken in order to effect compliance
with such requirements.
(e) If, subsequent to the date of this contract, the security
classifications or requirements under this contract are changed by the
Government as provided in this clause and the security costs under this
contract are thereby increased or decreased, the contract price shall be
subject to an equitable adjustment by reason of such increased or decreased
costs. Any equitable adjustment shall be accomplished in the same manner as
if such. changes were directed under the clause in this contract entitled
"Changes.
(f) The Contractor agrees to insert, in all subcontracts hereunder
Which involve access to classified security information, provisions 'which
shall conform substantially to the language of this clause, including this
paragraph (f) but excluding the last sentence of paragraph (e) of this
clause,
-(g) The Contractor also agrees that it shall determine that any
subcontractor proposed by it for the furnishing of supplies and services
which will involve access to classified security information in the
Contractorta custody has been granted an appropriate facility security
clearance?.which is still in effect, prior to being accorded access to
such classified security information.
23. GOVERNMENZZURNISHED PROPERTY
(a) The Government shall deliver to the Contractor, for use in
connection with and under the terms of this contract, the property which
the schedule, appendix, or the specifications state the Government will
furnish (hereinafter referred to as "Government-Furnished property").
The delivery or performance dates for the supplies or services to be furnis13d
by the Contractor under this contract are based upon the expectation that
Government-Furnished property of a type 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
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shall, if requested by the Contractor, make a determination of the delay
occasioned the Contractor thereby, and shall grant to the Contractor a
reasonable extension of time in respect of such delivery or performance
dates. The Government shall not be liable to the Contractor for damages
or loss of profit by reason of any delay in delivery of or failure to
deliver any or all of the Government-Furnished property* except that in
case of such delay or failure, upon the written request of the Contractor,
an equitable adjustment shall be made in the delivery or performance dates,
or price, or both, or in any other contractual provision affected thereby,
in accordance with the procedures provided for in the clause of the
contract entitled "Changes."
(b) By notice in writing the Contracting Officer may decrease the
property furnished or to be furnished by the Government under this contract.
In any such case, upon the written request of the Contractor, an equitable
adjustment shall be made in the delivery or performance dates, or price*
or both, and in any other contractual provision affeCted by such decrease,
in accordance with the procedures provided for in the clause .of this
contract entitled "Changes."
(c) Title to the Government-Furnished property shall remain in the
Government. Title to Government-Furnished property shall not be affected
by the incorporation or attachment thereof to any property not owned by
the Government, nor shall such GovernmentZurnished property, or any part
thereof, be or become a fixture or lose its identity as personalty by
reason of affixation to any realty.
(d) The Government-Furnished property shall, unless otherwise
provided herein, be used only for the performance of this contract.
(e) The Contractor shall maintain and administer, in accordance with
sound industrial practice, a program for the maintenance, repair, protection
and preservation of Government4urnished property, until disposed of by
the Contractor in accordance with this clause. In the event that damaged
or defective GovernmntZurnished property is delivered to the Contractor,
or any other damage occurs to Government-Furnished property, the risk of
which has been assumed by the Government under this contract, the Govern-
ment shall replace such items or the Contractor than make such repair of
the property as the Government directs; PROVIDED, HOWEVER, That if the
Contractor cannot effect such repair within the time required, the
Contractor may reject such property. The contract price includes no
compensation to the Contractor for the performance or any repair or re-
placement for which the Government is responsible, and an equitable
adjustment will be made in the contract price for any such repair or
replacement of Government-Furnished property made at the direction of the
Government. Any repair or replacement for which the Contractor is respon-
sible under the provisions of this contract shall be accomplished by the
Contractor at its own expense.
(r) (i) Except for loss, destruction or damage resulting from a
failure of the Contractor due to willful nisoonduct or lack of good faith
pfany of the Contractor's managerial personnel as defined herein, to
rintaita erri rri ab PFNVItiff; ETANOSIN8280012iPx", protection
pprove or e ease
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and preservation of the Government-Furnished property, as required by
paragraph (e) hereof* and except as specifically provided in this
contract, the Contractor shall not be liable for loss or destruction
of or damage to the Government-Furnished property (A) caused by any
peril while the property is in transit off the Contractor's premises* or
(B) calmed by any of the following perils while the 'property is on the
Contractor's or subcontractor's premises, or on any other premises
where such property may properly be located, or by removal therefrom
because of any of the following perils:
(I) Fire; lightning; windstorm; cyclone; tornado;
hail; explosion; riot, riot attending a strike, civil
? commotion; vandalixm and malicious mischief; sabotage;
aircraft or object falling therefrom; vehicles running
on land or tracks, exoluding vehicles owned or operated
by the Contractor or any agent or employee of the Con,.
tractor; smoke; sprinkler leakage; earthquake or volcanic
eruption; flood, meaning thereby rising of a body of water;
hostile or warlike action, including action in hindering*
combating, or defending against an actual, impending or
expected attack by any government or sovereign power Cie
jure or de facto), or by any authority using military,
naval, or air forces, or by an agent of any such govara-
=mt.* power, authority, or forces; or
(II) Other peril, of a type not listed above, if
such other peril is customarily covered by insurance
(or by a reserve for self-insurance) in accordance with
the normal practice of the Contractor, or the prevailing
practice in the industry in which the Contractor is en.-.
gaged With respect to similar property in the same general
locale.
The perils as set forth in (A) and (B) above are hereinafter called
"excepted perils."
The term "Contractor's managerial personnel" as used herein means
the Contractor's directors, officers and any of its managers, superinm.
tendents, or other equivalent representatives who have supervision or
direction of (I) all or substantially all of the Contractor's business;
(II) all or substantially all of the Contractor's operation at any one
plant or separate location at which the contract is being performed;
(III) a separate and complete major industrial operation in connection
with the performance of this contract.
(ii) The Contractor represents that it is not including in
the price hereunder, and agrees that it will not hereafter include in
any price to the Government, any charge or reserve for insurance (in-
cluding self-insurance funds or reserves covering loos or destruction
of or damage to the Government-Furnished property caused by any excepted
peril).
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(iii) Upon the hapening of loss or destruction of or damage to
any Government-Furnished property caused by an excepted peril, the
Contractor shall notify the Contracting Officer thereof, and shall communi-
cate 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
directed that no such organization be employed), shall take all reasonable
steps to protect the GovernmentFurnished property from further damage,
separate the damaged and undamaged Government-Furnished property in the
best possible order, and furnish to the Contracting Officer a statement
of: (L) the loot, destroyed and damaged Government-Furnished property,
(B) the time and origin of the loss, destruction or damage (C) all known
interests in commingled property of which the Government-Fewnished
property is a part, and (D) the insurance, if any, covering any part of or
interest in such commingled property. The Contractor shall be reimbursed
for the expenditures made by it in performing its obligations under this
subparagraph (iii) (including charges made to the Contractor by the Loss
and Salvage Organization, except any of such charges the payment of which
the Government has, at its option, assumed directly), to the extent
approved by the Contracting Officer and set forth in a Supplemental
Agreement.
(iv) With the approval of the Contracting Officer after loss
or destruction of or damage to Government.Xurnished property, and subject
to such conditions and limitations as may be imposed by the Contracting
Offioer, the Contractor mey, in order to minimize the loss to the
Government or in order to permit resumption of business or the like* Dell
for the account of the Government any item of Government-Furnished property
which has been damaged beyond practicable repair, or which is so commingled
or combined with property of others, including the Contractor, that
separation is impracticable.
(v) Except to the extent of any loss or destruction of or
damage to GovernmentFunished property for which the Contractor is
relieved of liability under the foregoing provisions of this clause*
and except for reasonable wear and tear or depreciation, or the utilization
of the Government-Furnished property in accordance with the provisions of
this contract, the Government-Furnished property (other than property
permitted to be sold) shall be returned to the Government in as good
condition as when received by the Contractor in connection with this
contract, or as repaired under paragraph (e) above.
(vi) In the event the Contractor is reimbursed or compensated
for any loss or destruction of or damage to the Government-Furnished
property, caused by an excepted peril, it shall equitably reimburse the
Government. The Contractor ahall do nothing to prejudice the Govern..
ment's rights to recover against third parties for any such loss, destruc-
tion or damage and, upon the request of the Contracting Officer, shall at
the Government's expense, furnish to the Government all reasonable assis-
tance and cooperation (including the prosecution of suit and the execution
of instruments of assignment in favor of the Government) in obtaining
recovery.
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(g) The Contracting Officer or his duly authorized representative
shall at all reasonable times have access to the premises wherein any
Government-Furnished property is located*
(ii) Upon the completion of this contract, or at such earlier dates
as may be fixed by the Contracting Officer, the Contractor shall submit,
in a form acceptable to the Contrasting Officer, inventory schedules
covering all items of Government-Furnished property not consumed in the
performance of this contrast (inolviding any resulting scrap), or not
theretofore delivered to the Government, and shall deliver or make such
other disposal of such Government-Furnished property, as may be directed
or authorized by the Contracting Officer. Recoverable scrap from
Government-Furnished Property ehall be reported in accordance with a
procedure and in such form as the Contracting Officer may direct. The
net proceeds of any such disposal shall be credited to the contract
price or shall be paid in such other manner as the Contracting Officer
may direct.
(i) Directions of the Contracting Officer and communications of the
Contractor issued pursuant to this clause shall be in writing*
24, EMPLODENT OF ALIENS
If this contrast calls for furnishing or constructing aircraft,
aircraft parts, or aeronautical accessories, no aliens employed by
the Contractor Shall be permitted to have access to the plane or
specifications, or the work wider construction, or to participate in
the contract trials, without the written consent beforehand of the
Secretary or his duly authorized representative.
25. SUBCONTRACTS
(a) No contracts shall be made by the Contractor for the furnishing
of any of the work herein contracted for without the written approval Of
the Contracting Officer. For the purposes of this clause, purchase of
raw material or commercial stock items shall not be considered work*
(b) The Contractor agrees that no subcontract placed under this
contract shall provide for payment on a cost-plus-percentage-of-cost
basis.
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ALTERATIONS IN CONTRACT
The fallowing alterations have been made in the provisions of this
contract:
In General Provisions 4 PAYMENTS, Paragraph (a) (i) the phrase "by
evidence of actual payment and" was deleted from the third sentence.
In General Provisions 4 PAYMENTS, Paragraph (b) (iii) was deleted and
the following Paragraph (b) (iii) was substituted therefor:
(iii) The Contractor shall, to the extent of its ability, procure
materials at the most advantageous prices available, with due regard to
securing prompt delivery of satisfactory materials, take all cash and
trade discounts, rebates, allowances, credits, salvage, commissions, and
bonifications. Credit shall be given to the Government for cash and
trade discounts, rebates, allowances, credits, salvage, the value of
resulting scrap, when the amount of such scrap is appreciable, commissions
and bonifications which have accrued to the benefit of the Contractor
or would have so accrued except for the fault or negligence of the
Contractor. This shall be done in accordance with the Contractors
regular accounting procedures for such credits.
General Provisions 16. REPORTING OF ROYALTIES, was deleted.
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