CERTIFICATE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81B00878R001300200072-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 45
• Document Creation Date: December 20, 2016
• Document Release Date: June 28, 2006
• Sequence Number: 72
• Publication Date: August 16, 2000
• Content Type: CONT

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I,
I am the Clerk
as Contractor herein; that
who
signed this contract on behalf of the Contractor was then
Treasurer of said Corporation; that said cone
tract was duly signed for and-in behalf of said Corporation by
authority of its governing body, and is within the scope of its Cor-
porate powers.
certify that
of the Corporation named
(Corporate Seal)
SECRET
11
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cations and details of the verk to be perferued are set
'Lit the Contractor's propema March 1S,, 1951
5Prcposal for Construction of Airborne Infrared dearo
incorporated hereux by reference having the
`"feet as if fully set forth herein..
with the provisions of claw 4
t entitled "ALIiA tin,,
she pay the Contractor, as fuU compensation
contract, the fixed fee as specified
Allowable Cost incurred the Contractor in
it Re; .ati s% It being underst4od
ty of the forogaing# that the
cored as allowable item of cost 1reweder
.d by the Contractor when necessary required
fo ance of work hersu dert
retract soud accepted by the Contructiag Officer
tax ' ttract Cost Principles, S n XV,
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(b) Pagiag Of fOVOxt rates for any
1i, the tracer sbl be reimbursed, at the
IJag rat" aft forth b .ov SuNoct to s prt * to
nt vbm the Mal rates for that period am
e Li' , TO PrOVOUt su t4 over or mar
t,, the 7lov1.si 1 rattle +'P at the r t Of
th*r l 'ty, he rimed, by whal a , either
r"'streac t1vt1y or .
25X1
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ECIXL
1 October 1936 30
it s 'he toter e
prese*taative.
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0ontrft No. NY-B-5LUD
Basis of application
IV* of gm,
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PART. - 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 per-
formance of the work under this contract, shall find that the require-
mant.a 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 Contractor shall call the attention of the Contracting Officer to
such conflict and the Contracting Officer or his duly authorized repre-
sentative for security matters shall (i) modify or rescind such security
requirements or (ii) the Contracting Officer shall issue to the Contrac-
tor a waiver of compliance with the requirements of the General Provisions
conflicting with such security requirements. Any waiver of compliance
wl"th the General Provisions of this contract issued by the Contracting
Officer shall be in writing, except that the approval by the Contracting
Officer of any subcontract issued hereunder by the Contractor shall be
ISTANCE REGARDING PATENT I'_`.ly RINGRM NT . , . 16
BUTY'FC Pielur,, LABOR ....... ............... ? ................ 17
co1'r/ S,I7.' LABOR .... .+ ........... ...... .............. ? . ? 17
EIGHT-HO M LATa OF 1912 ................................ 1.7
NoNDISC: r~' NAT?:ON IN aIPLOYNZENT .... ? ? ? . ? . ? ............ 1-$
OT [37IC''..= L5 J NOT TO B ITP F??FIT (... 7. T.. ........................ 19
OoVE.r? 11 T AGAi., 9) CO,1.t'INC??:1V".L O ., ? O ? ? . A n , , .. . . . ... ? ? ? 19
.1VT J. P ,'% :SIGHTS ............................... * . ........ 19
r~ Ys /'F i. *r D CP i' TX . . . .. . . . . . .. . . . . . ... . , + ? ? + , .. ? ? ? e . . . 14
IN atJB.p TiC7Ei-LIA~,YI, ~"i TO ~mi :.ro PERSONS . + ? ............. 28
AND CO SENT . . . ... . . . . . . . . . ? . . . ? ? . ? n ? . . ? 30
F'" >ING OF PAT.E14T APPLICATIO S .......................... 31
1dEEPORTING OF ROYALTIES ................................ 31
RIGHTS 7.1 DATA.-UNLIMITED .. ? .. + ....... . .... . ..... ? .... , 33
MI.LITAL_C SECURITY FE 0TSIRE . ^TTS .... ? .................. ? 34
"4AT,S'H:--'fd-LT,,EY. :"'. s31.?IC ':::NTRACTS k 'TS ........... ? . ? , . , ? + .. 35
f
GFATUIrn IES . . . . . . . . . . . . . . . . . .. . . . . . . . . . . ? . . . . . . . .. . . . . . 36
- ,-r
1VTEG'~ Ts.i ti.r_.s'r_R ,.1~ OJ.W:?T31;1.3 ~!Ea , .... - . ? .. ? ......, ... + .. + ... , . 36
DE:-':,AY I]!: DELIVERY OF DATA ............................ 37
32 . SUPERSEDING S:L'LCIFICA'.~!IONS ? .... ? .............. + ... ? ... 37 Sill, ALTERATIONS . ............ 39
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GENEML PROVIIIONS
1.. DEFINITIONS (ASPR 7-103.1 API 7-403.1)
As used throughout this contract, the following terms shall
have the meanings set forth below:
(a) The term `tSecretary" 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 representative" means any person or persons
or board (o'i;her than the Contracting Officer) authorized to act
for the Secretary.
(b) The term "Contracting Offi ar`t means the person executing
this contract ca behalf of the Goverment, ant any other officer
or civilian employee w:io is a properly designated Contracting
Offleer; and the term.includeq, except as otherwise provided in
thi::3 contract, the authorized representative of a Contracting
Officer a?:ting within the li its of his authority.
(c) Except as otherwise provided in this contract, the term
subcontracts" includes purchase orders under this contract..
(d) (A.FPI 7-303.1) The term "contract wnAh" means all work
to be performed under this contract including any studies covering
fundamental, theoretical, or experimental investigations; any
extension of the inver;tigativo find1.ngs and theor ioe of a
seie ,?tific or technical natu.a into practical apps cation; nny
tangible items, here0r-:ftor referred to as tI upclies," furx.? shed
to '??e Gover?mnent; ease:,, any reports, data, computations, p? ane,
d.:? , a?rgs, and specifications with respect to any of the
f,-,rc;4?,?^. ing.
2. MAN NS (AFPi 7-403-2)
The Contrac',ing Officer may at any time by a written order, make
chin ;es in or additions to the drawings and specifications, issue addi-
tion%.l instructions, require additional work within the general scope
of the contract, or change the place of delivery, method of shipment,
or the amount of Government-Furnished property. If any such change
causes an increase or decrease in the estimated cost of, or the time
required for performance of this contract, or otherwise affects any
(CPFF Aug. 20, 157)
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extent that the estimated cost set forth in the Schedule has been
increased, any cost incurred by the Contractor in excess of such
estimated cost prior to the increase in estimated cost shall be
niLowable to the same extent as if such costs had been incurred
after such increase in estimated cost,
ALLOWABLE COST, FIXED FEE, MID PAYLENT (ASPR 7-203.4 AFPI 7403,4)
(a) For the performance of this contract, the Government shall
pay to the Contractor the cost there f-determined by the Contracting
Officer to be allowable in accordance with.Part2 of Section XV of
the Armed Servf,oes Procurement Regulation as in effect on the date
of this contract and the Schedule (herein&'ter referred tb as "A1loww_
able Cost"), plus such fixed fee, if any, as may be provided for in
the Schedule.
.(b) Cnce each month (,or at more frequent intervals, if approved
by th. Contracting C:fficer) the Contractor may submit to an authorized
representative of the Contracting Officer, in such form and reasonable
detail as such representative may require, an invoice or public voucher
supported by a statement of cost incurred by the Contractor in the
performance of this contract and claimed to constitute Allowable Cost.
Each statement of cost shall be certified by an officer or other
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 hereinafter provided and subject to the provisions of paragraph (d)
below, make payment thereon as approved by the Contracting Officer,.
Aftor 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) P"100,000,
whichever amount is less', shall have been set aside, such reserve or
the balance thereof to be retained until the execution and delivery
of a release by the Contractor as provided in paragraph (e) hereof,
(d) At any time or times prior to final payment under this contract
the Contracting Cfficer may cause to be made such audit of the invoices
or vouchers and statements of cost as shall be deemed necessary. Each
payment theretofore made shall be subject to reduction to the extent of
amounts included in the related invoice or voucher and statement of cost
which are found by the Contracting Officer, Qn the basis of such audit not
to constitute Allowable Cost, and shall also be subject to reduction for
(CPFF Aug. 20, 157)
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overpayment 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
c.ateaent of cost, which shall be submitted by the Contractor as
promptly as maybe practicable following 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.coipletion, and following compliance
by the Contractor with all provisions of this contract (including,
without limitation, provisiiono;relating to patents and the provisions
of paragraphs (e) and (f) of this clause), the Government; shall as
pro.iptly as may be practicable pay any balance of Allowable 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
relense discharging the Government, its officers, agents and employees
of and from all liabilities, obligations and claims arising out of or
under this contract, subject only to the following exceptions:
(1)
Specified claims in stated amounts or in estimated
amounts where the amounts are not susceptible of
exact statene t by the Contractor,
(2) Claims, together with reasonable expenses inciden-
tal thereto, based upon the liabilities of the
Contractor to third parties arising out of the per-
formanc of the contract, which are not known to the
Contractor on the date of the execution of the
releaser 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 ofany notice to the Contractor that the
Government is prepared to make final payment, which-
ever is earlier.
(3) Claims for reimbursement of costs (other than
expenses of the Contractor by reason of its indem-
nification of the Government against patent liabil-
ity), including reasonable expenses incidental
thereto, inc,rad by the Contractor under the
provisions of the contract relating to patents..
(f.) The Contractor agrees that any refunds, rebates or credits
(including any interest thereon) accruing to or received by the
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I've
Contractor or any assignee which arise 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
etch assignee under an essigzmient entered Into under this contract and
in efect at the time of final payment under this contract shall execute
and deliver at the time of and as a condition precedent to final pay-
ment under this contract, a:n assignment to thej Government of refunds,
rebates or credits (including any interest thereon) arising out of the
performance of this contract, in form and substance satisfactory to the
Contracting Officer. Reasonable expenses incurred by the Contractor
for the purpose of securing ary such refunds, rebates or credits shall
constitute A lowable 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 incliuded in detetnining the amount payable.under
this contract,, notwi.thstandi:ng 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.
INSPECTION AND CORRECTION OF DEFECTS (AFPI V-403.5)
(a) All work under this contract shall be subject to inspection
and test by the Government, to the extent practicable at all reasonable
times and places including the period of performance, and in any event
prior to final acceptance. The Contractor shall provide and maintain
..' an inspection system acceptable to the Government covering the work
hereunder, The Government, through any authorized representative, may
inspect the plant or plants of the Contractor or of any of its subcon-
tractors engaged in the performance of this contract. If any inspection
or test is made by the Covernment on the premise of the Contractor or a
subcontractor, the Contractor shall provide and shall require subcontractors
to provide all reasonable facilities and assistance for the safety and
convenience of the Government inspectors in the performance of their
duties. All inspections and tests by the Government shall be performed
in such a manner as will not Unduly delay the work. Final inspection and
acceptance by the Government shall be made as promptly as practicable
after delivery. The time and place of delivery, final inspection, and
acceptance shall be as set forth in the schedule.
(b) The Contractor warrants that the services rendered in the
performance of this contract will conform to the requirements of this
contract and to high professional standards in the field and that any
article delivered to the Government under this contract will conform
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to the requirements of this contract and will not, be:'defe ytive in material
or workmanship.
(c) At any time during performance of this contract, but not later
r, 7 :n Nix. (6; months (or such other- par3.od--ae-may be provided in the
~+~nnr~17j q a r+..n r fi nnl... aooo rcance, the Government msy- require the Contractor
to remedy by correction or replacement as directed by the Contracting
Officer; any failure by the! contractor to comply with its obligations under
paragraph (b) hereof. ,xcept as otherwise provided in
of, the cost of any such replacement or correction shallabeg included inre
"Allowable Cost" determined as provided in the clause of this contract
entitled ','Allowable Cost, Fixed Fee and Panrment," but no additional fee
shall be parable with rospect thereto. Corrected articles shall not be
tendered again for acccptanee unless the former tender and the require-
ment of correction is disclosed. If the contractor fails to proceed with
reasonable promptness to perform ;,ucl1 replacement or correction, the
Government (i) may by contract or otherwise perform such replacement or
correction and charge to the Contre,;tor any increased cost occasioned
the Government thereby-, or :may redu. e any fixed fee payable under this
contract (o.? reau:i._re repayment of any fixed fee theretofore paid) in such
amount; as may be equitable under the circumstances; or (ii) in the case
of articles not delivered, may require the delivery of such articles and
shall have the right to reduce any fixed fee payable under this contract
(or to require repayment 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 "Termination." Failure to agree on 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 i.iewing of the clause of this contract entitled
'oDi cp~ate g ~~ ,
(d) Notwithstanding the provisions of paragraph (c) hereof, the
Government may at any time require the contractor to remedy by correction
or :,:replacement, without cost to the Government, any failure by the
Contractor to comply with its obligations under paragraph (b) hereof,
if such failure is due to fraud, lack of good faith, or willful mis-
conduct 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 have supervision or direction of (i) all or
substantially all of the Con.tractor2s business; or (ii) all or substan-
tially 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 perform-
ance on 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 individual 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 .
(CPFF Aug- 2f_ 11;71
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(e) Corrected articles tendered as replacements shall be subject to
the provisions of this clause in the same mariner and to the same extent
as supplies originally delivered under tk4 contract.
(r) The Contractor shall make its records of all inspection work
available to the Goveri.mer.Lt during the performance of this contract and
for such longer periods as may be specified in this contract.
(g) 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 materials or workmanship or otherwise not in conformity with
the requirements of this contracts
6. ASSIGNMG T OF CLAIMS (A 7PR 7-103.8 _A011-403.6)
(a) Pursuant to the provisions Ofe Assignment of Claims Act of
1940 as amended (31 U.S. Code 203, 40 U.S. Code 15), if this contract
provides For payments aggregating $1,000 or more, claims for moneys due
or to become due the Contactor from the Government under this contract
may be assigned to a bank, trust company, or other financing institution,
including any Federal Lending agency, and may thereafter be further
assigned and reassigned to any such institution. Any such assignment or
reass:x,riment 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 uch assi:rment or reassignment may be made to one party as agent or
trustee for two or more parties participating in such financing. Not-
withst !,-i',din,g any provision of this contract, payments to an assignee of
:.:ay 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 setoff.
(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 Becket:, "Secret", or "Confilential", be
furnished to any assignee of any claim arising under this contract or
to any thcr person no t' er t.i -L d to receive the same; provided, that
a copy of any part or all of this contract so marked may be punished,
or any i'_nformation contained therein may be disclosed, to such assignee
upon tho prior written authorization of the Contracting Officer.
REO'DRDS (AsPR 7-203.7 AF''I 7-x+03.7)
(a)(l) 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 ne will properly reflect all net costs, direct and indirect of
labor, materials, equipment, supplies and services, and other costs
(CPFF Aug. 20, 1 57) - 7
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and expenses of whatever nature-for, which reimbursement is claimed under
the provisions of thin-contract. The Contractor's accounting procedures
and practices. shall be subject to the approval of the Contracting Officer;.
__ 1ded, however, that no pAterial change will be required to be made
tae Contractor's accounti'ng procedures and. practices if they conform
~.o 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 reimbursed 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 co.eying such charges or as may be otherwise
spe.-ified within two years after reimbursement of charges covered by any
such voucher, to such representative as may be designated for that
purpose through the Contracting Officer such documentary evidence in
support of transportation costs as may be required by the Contracting
Officer or any of his duly authorized representatives.
(4) Except for documentary evidence delivered to the Government
pursuant to subparagraph (3) above, the Contractor shall preserve and
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
"comppletion voucher's or "completion invoice't or, in the event this con-
tract has been completely terminated, from the date of the termination
settlement agreement; provided, however, the records which relate to
(A) appeals under the clause of this contract entitled "Disputes, "
(B) litigation or the settlement of claims arising out of the performance
of this contract, or (C) costs or expenses of the contract as to
which exception has been taken by the Contracting Officer or any of his
duly authorized representatives, shall be retained by the Contractor
until such appeals, litigation, claims, or exceptions have been disposed
of, but in no event for less than the six-year period mentioned above.
(5) Except for documentary evidence delivered pursuant to sub-
paragraph (3) above, and the records described in the proviso of sub-
paragraph (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 reimbursement to the Contractor of the invoice or voucher
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to which such records relate, unless a shorter period1.s _authoriized by
the Coutracting Officer -with 'tthe concurrence of the Comptrol ex., #-tom
n, Government ei:ncy or his authorized representatives.
'she provisions of this paragraph (a), including this sub-
.^ .~ taph (o), shall be applicable to and included in each subcontract
hereunder which is on a cost, cost-plus-e:-fixed-fee, time-and-material
or labor-hour basis.
(b) The Contractor further agrees to include in each of his sub-
cont'acts hereunder, other than those set forth in subparagraph (a)
(6) :t'ove, a, provision to the effect that the subcontractor agrees that
the Contracting Officer or any of his duly authorized representatives,
v ial , until the expiration of three years after final payment under
the si:.bcon tract, 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 "sub-
con-t,'e.ct," as used in this paragraph (b) only excludes (i) purchase
order-o not exceeding $1,000 and (ii) subcontracts or purchase orders
for public utility services at rates established for uniform applicability
to the general public.
SUBCONTPACTS (ASPR 7-203.8 AFPI 7-403.8)
(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 percent (5%)
of the total estimated cost of this contract.
(b) The Contractor shall not, without the prior written consent
of t`h~,, 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 tho
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 resoarch and development work. The Contracting
Officer may, in his discretion, ratify in writing any such subcontract;
such action shall constitutes the consent of the Contracting Officer as
required by this paragraph (b),
(c) The Contractor agrees that no subcontract placed under this
contract shall provide for payment on a cost-plus-a--percentage-of-
cost basis.
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(d) The Contracting Officer may, in his discretion, specifically
approve in writing any of the provisions of a subcontract. However,
suc:1 approval or the consent of the Contracting Officer obtained as
:r~~qu~:red by this c1au.se shall not be construed to constitute a deter-
=a ion of the allowability of any cost under this contract, unless
uca 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
whi.w~, in ,he opinion of the Contractor, may result in litigations
rebated in any way to this contract with respect to which the Con-
trac`.or may be entitled to reimbursement from the Government.
(f) (AFPI -- 7-203?8,) The Oontrs,cting Officer may approve all
or part of the Contractor's purchasing system and from time to time
rescind or reinstate such approval. Such approval shall be.deemed
to .ulfil the requirements for obtaining the Contracting Officerts
corscnt to subcontracts as prescribed in paragraph (b) above.
UTILIZATION OF SMALL BUSINESS CONCERNS (ASPR 7-104.14 Am 7-403-9)
(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.
TER1iINATION (ASPR 8-702 AFPI 7-403.10)
(a) The performance of work under the 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 ten days (or such
longer periods as the Contracting Officer may allow) after receipt from
the Contracting Officer of a notice specifying the default, or (2) when-
ever for any reason the Contracting Officer shall determine that such
termination is in the best interest of the Government. Any such
termination shall be effected by delivery to the Contractor of a
Notice of Termination specifying whether termination is for the default
of the Contractor or for the convenience of the Government, the extent
to which performance of work under the contract is terminated, and the
date upon which such termination becomes effective. If after notice of
termination of this contract for default under (1) above, it is
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determined that the Contractorta failure to perform or to make progress
in performance is due to causes beyond the control and without the
fault or negligence of the Contractor pursuant to the provisions of the
clause of this contract relating to excusable delays, the Notice of
Termination shall be deemed to have been issued under (2) above, and the
rights and obligations of the parties hereto shall in such event be
governed accordingly.
(b) After receipt of a Notice of Termination and except as other-
wise directed by the Contracting officer, the Contractor shall (1) stop
work under the contract on the date and to the extent specified in the
Notice of Teri .nation; (2) place no further orders or subcontracts for
m Uerial..s, services, or facilities except as may be necessary for com-
pletion of such portion of the work under the contract as is not ter-
minated; (3) terminate all orders and subcontracts to the extent that
they relate to the performance of work terminated by the Notice of
Termination; (4) assign to the Government, in the manner and to the
extent directed by the Contracting Officer, all of the right, title,
anc' .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 ter-
mination of such orders and subcontracts; (5) with the approval or
ratification of the Contracting 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 reimbursa ie, in whole or in part, in accord-
ance with the provisions of this ?=ntract; (6) transfer title (to the
extent that title has not already been transferred) and, in the manner,
to the extent9 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 te=inated
by the Notice of Termination, (ii) the completed or partially completed
plans, dra.w,-ings, 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 tool-
ing acquired or manui'act*ared for the performance of this contract for
the cost of which the Contractor has been or will be reimbursed under
this contract; (7) use its best efforts to sell in the manner, at the
times to the extent, and at the price or prices directed or authorized
by the Contracting Officer, any property of the types referred to in
provision (6) of this paragraph, provided, however, that the Contractor
(i) shall not be required to extend credit to any purchaser, and (ii)
may acquire any such property under the conditions prescribed by and
at a price or prices approved by the Contracting Officer; and provided
further that the proceeds of any such transfer or disposition shall be
applied in reduction of any payxents to be made by the Government to the
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Contractor under this contract or shall otherwise be credited to the price
or cost of the work covered by this contract or paid in such other manner
as the Contracting Officer may direct; (8) complete performance of such
part of the work as shall not have been terminated by the Notice of Termina-
tion; and (9) take such action as may be necessary, or as the Contracting
0fi?icer 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 Con-
tractor shall proceed imnedi,ately with the osrformance of the above
obligations notwithstanding any delay in determining or adjust.ng the
amount of the fixed-feej or any item or reimbursable cost under this
clause. At any time after expiration of the plant clearance period, as
defined in Section VIII, A med Services procurement Regulation, as it may
be amended from time to time the Contractor may submit to the Contract?-
i.ng Officer a list, certified as to quantity and quality, of any or all
items of termination inventory not previously disposed of, exclusive of
items the disposition of which has been directed or authorized by the
Contracting Officer, and may request the Government to remove such
ite- := or enter into a storage agreement covering them. Not later than
fifteen (15) days thereafter, the Government will accept title to such
items and remove them or enter into a storage agreement covering the
same, provided that the list submitted shall be 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 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
claims 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 Con-
tractor made in writing within such two-year period or authorized exten-
sion thereof. However, if the Contracting Officer determines that the
facts justify such action,, he may receive and act upon any such term.inat.ou
claim at any time after such two-year period or any extension thereof.
Upon failure of the Contractor to submit its termination claim within
the time allowed, the Contracting Officer may determine, on the basis
of information available to him., the amount, if any, due to the Contrac-
tor by reason of the termination and shall thereupon pay to the Contrac-
tor the amount so determined.
(d) Subject to the provisions of paragraph (c), the Contractor
and the Contracting Officer may agree upon the whole or any part of the
amount or amounts to be paid (including an allowance for the fixed-fee)
to the Contractor by reason of the total or partial termination of work
pursuant to this clause. The contract shall be amended accordingly,
and the Contractor shall be paid the agreed amount.
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(e) In the event of, the failure of the Contractor and the Contract-
ing Office. to agree in whole or in part p as provided in paragraph (d)
above, as to the amounts with respect to costs and fixed-fee, or as to
the amount of the fixed emcee, to be paid to the Contractor in connection
Twit -h the ? rmi atioA 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 amoixit determined as follows:
(1) If the settlement includes cost and fixed-fee
(i) There shall be included therein all costs and expenses
re .mi ursab?.e 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
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,
(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
ct
tr
f th
e con
a
supporting data with respect to the terminated portion o
and for the termination and settlement of subcontracts thereunder, to-
gether 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 Con-
tractor there shall not be included any amounts for the preparation of
the Contractor's settlement proposal.
(iv) There shall be included therein a portion of 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 default of the Contractor,
there shall be paid a percentage of the fee equivalent to the percentage
of the completion of work contemplated by the contract, less fixed-fee
payments previously made hereunder.
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(B) In the event of the termination of this contract for the
default of the Contractor, the total fixed-fee payable shall be such
proportionate part of the fee (or, if this contract calls for articles
of different types, of such part of the fee as is reasonably allocable
to the type of articles under consideration) as the total number of
articles delivered to and accepted by the 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 pa msnt 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
v,wo--_-4 t thereof will be determined in accordance with subparagraph (e)
-'-) (iv) above.
(f) The Contractor shall have the right of appeal, under the
clau::w of this contract entitled "Disputes", from any determination
made the Contracting Officer under paragraph: (c) or (e) above, except
that "_' 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
:rider pararaph (c) or (e) above, the Government shall pay to the
Contractor the following. 4'1) if there is no right of appeal hereunder
or If no t3 mss y appeal has been taken, the amount so determined by the
C ntracting Officor, 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 unl.i(Taidated advance or other
unliqu:dated payments theretoforemade 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
nroceeds 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 continued
portion of the contract shall be equitably adjusted by agreement 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, cake 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
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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 emow t 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 is of fived
6% per annum, for the period from the date such excess payment
by the Contractor to the date on which. such excess is repaid to the Govern-
ment; provided however., that no interest shall be charged with respect to
any such excess payment attributable to a reduction in the Contractor's claim
by reason of retention or other disposition of termination inventory until
ten days after the date of such retention or disposition.
(j) The provisions of this cleuoc relating to the fixed-fee shall
be inapplicable if this contract dose,'not pr dde 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 termination 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 Govern-
ment, all its books, records, documents, aid other evidence bearing on
the cot and expenaes of the Contractor under this contract and relating
to the work terminated hereunder, or, to the extent a .proved by the
Contracting Officer, photographs, micro-photographs, or other authentic
reproductions ther, eof.
EXCfJSABt.E DELAYS (ASPR. 7-203.11 AIM 7-303,10)
(a) The Contractor shall not be in default by reason of any failure
in performance of this contract in accordance with its terms (including
any. failure by the Contractor to make progress in the prosecution of the
work hereunder which endangers L;,,-ch performance) if such failure arises out
of causes beyond the control and without the fault or negligence of the
ContLae'.:)r. 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 ocher sources and shall have ordered the Contractor in "rs _,ting
to pro-ure 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 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 Government
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under the clause hereof entitled "Termination".
(b) If the Contractor becomes unable to complete the contract 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 (145) 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 Goverment 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, ani this contract
shall then be modified in writing accordingly.
12. DISPUTES (ASPR 7-103.:L2 AFPI 7-403.12)
Except as otherwise provided, in this contract, any dispute con-
cerning a question of fact arisig under this contract which is not
disposed of by agreement shall bt decided by the Contracting Officer,
who shall reduce his decision to! writing and mail or otherwise furnish
a copy thereof to the Contractor. Within 30 days from the date of
receipt of such ropy, the Contractor may appeal by railing or other-
wise furnishing to the C:ontractLng Officer a written appeal addressed
to the Secretary, and the decision of the Secretary or his duly au-
.-,c~,..,ed representative for the' hearing of such appeals shall, unless
determined by a court of competent jurisdiction to hare been fraudulent
or +; a j-.:Jiciou,3 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 appearl is taken, the decision of
the Contracting Of=ficer shall b:~ final and ?onclusivd, in connection
with any appeal proceeding unde-? 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.
13. NOTICE AND ASSISTANCE REGARDING PATENT INTRING24ENT (ASPS 9-104
AFPI 7-4o4.13)
The provisions of this clause shall be applicable only if the
amount of this contract is in excess of $5,000-
(a) The Contractor shall report to the Contracting officer, promptly
and in reasonable written detail, each notice or claim of patent infringe-
ment based on the performance of this contract of which the Contractor
has knowledge.
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(b) In -the event cif-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.
14. BUY VERICA9 ACT (ASPR 7-103.14 AFPI 7-403.14)
The Contractor agrees that there will be delivered under this
contract only such unmanufactured articles, materials and supplies
(which term "article, materials, and sup lies" is hereinafter
referred to in this clause as "supplies") as have been mined or
produced in the United States, and only such manufactured supplies
ao have been manufactured in the United States substantially all
fr :a supplies mined, produced, or manufactured, as the case may beg
in the United States. Pursuant to the Buy American Act (41 U.S.
Code lOa-d), the foregoing provisjpn 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, produced,
or manufactured, as the case may be, in the United States in sufficient
and reasonably available commerical quantities and of a satisfactory
quality, or (iv) with respect to such supplies, from which the supplies
to be 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 commerical 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 commerical quantities and of a satisfactory quality.
15. COMICT LABOR (ASPR 12-203 AFPI 7--403.15)
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.
16. EIGHT-HOUR LAW OF 1912 (ASPR 12-303.1 AFPI 7-403.16)
This contract, to the exctent that it is of a character specified
in the Eight-Hour Law of 1912 as amended (40 U.S. Code 324-326) and
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is not covered by the W'aish-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 I,aw:
No laborer or mechanic doing any pant of the work contem-
plated by this contract, in tbl . 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-
stons of this clause. The wages of every such laborer and mechaxki,c
employed by the Contractor or any subcontractor engaged in the
performance of this contract shall be computed on a basic day rate
o; e8,ght ?- a per day; and work in excess of eight hours per day
is permitted only upon the condition that every such laborer and
chanic shall be compensated for all hours worked in excess of
o?.ht hours per day at not less than one and one-half times the
.sic rate of pay. For each 4olation 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 Govern-
ment.
17. NONDISCRI?NATION IN EMPLUNENT (ASPR .12-802 AFPI 7-403.17)
(a) In connection with the performance of work under this con-
tract, the Contractor agrees not to discriminate against any
employee or applicant for employment because of race, religion,
color, or national origin. The aforesaid provision shall include,
but not be limited to, the following: employment, upgrading,
demotion, or transfer; recruitment or recruitment advertising;
layoff or termination;; rates of pay or other forms of compensation;
and selection for training, including apprenticeship, The Contract-
or 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 non-
discrimination clause?
(b) The Contractor further agrees to insert the foregoing pro-
vision in all subcontracts hereunder, except subcontracts for
stendard commerical supplies or raw materials.
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18. OFFICIALS NUT TO BENEFIT (ACPR 7-103.19 AFPI 7-403,18)
No member of or delegate to Congress, or resident commissioner,
shall be addmitted to eny 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.
194 COVENANT AGAINST CONTINGENT FEES (ASPR 7-103.20 AFPI 7-403,19)
The Contractor warrants that no person or selling agency has
boen employed or retained to solicit or secure this contract upon
au agreement or understanding for a commission, per. centage, broker-
age, or contingent fee, excepting bona fide employees or bona fide
established commerical 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
thii`, 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.
20. PATENT RIGHTS (ASPR 9-107 AFPI 7.-403.20)
(a) As used in this clause, the following terms shall have the
meanings set forth below:
(i) The term "Subject Invention" means any invention, gym-
provemsnt 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 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 performance of
this contract, would reasonably be expected to make inventions.
(iii) The terms "subcontract" and "subcontractor" mean any
suhcontract or subcontracto of the Contractor, and any lower-tier
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subcontract or subcontractor under this contract.
(b)(l) The Contractor agrees to and does hereby grant to the
Government an irrevocable, nonexclusive, nontransferable, and royalty-
free license to practice, and cause tp 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. Nkiltcense 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
supa,lies to the general public in co rpetition with the Contractor or
the Contractor's commerical licensees in the licensed fields.
(2) With respect to:
(i) any Subject Invention made by other than Technical
(ii) any subject invention conceived prior to, but first
actually reduced to practice in the course of, and of the experimental,
developmental, or research work specified in (a) (i) above; and
(iii.) the practice of any Subject Invention in foreign
cou`ztries, the obligation of the Contractor to grant a license as
provided in (b)(1) above, to convey title as provided in (d)(ii)(B)
or VAiv) below, and to convey foreign rights as provided. in (e)
below, shall be limited to the extent of the Contractoras right to
gre?rt: the sa?:5e 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
fol''oWmg information and reports concerning Subject Invention which
reasonably appears to be patentable:
(i) a written disclosure promptly after conception or first
actual reduction to practice of each such Invention together with a
written statement specifying whether or not a United States patent
application claiming the invention has been or will be filed by or
on behalf of the Contractor;
(ii) interim reports, at least every twelve months
commencing with the date of this contract, each listing 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 un-
reported Inventions; and
(CPFF Aug. 20,x57)
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(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 t ill.'be filed, the Contractor shall
fil: or cause to be filed such a pl.ication in due form grid time; however,
if the Contractor, after having specified that such an application
would be filed, decides not to file or cause to be filed said application,
the Contractor shall so notify the: Contracting Officer at the earliest
practicable date and. in any event not later than eight months after
first publication, public use or-sale,
(V.) if the Contractor specifies that a United States
patent; application claiming such Invention has not been filed and will
not be filed (or having spec:? fiea. that such an application will be
filed thereafter notifies the Contracting Officer to the contrary),
the C: ntrac uor shall.:
(A) inform. the Contracting Officer 'n writing at the
earliest practicable date of any publication of such Invention made
by or :.nowiz to the Contractor or, wh re applicable, of any contemplated
pull . c tion by the Contractor, stating the date and identity of such
publ4,,vation or contemplated publication; and
(B) convey to the Government the Contractor's entire right,
title, a ad. intere v `; in such Invention by delivering to ? he Contracting
Officer upon written re+~~st u duly executed instru ueats (prepared
by the Government) of assignment and application, and such other papers
as are deemed necessary to vc t in the Government the Contractor's right,
title end interest aforesaid, and the right to aptly for and proscute
pa,'I-n:t applications covering such Invention throughout the world, subject,
howeve>:r, to the right of the Contractor specified in (e) be~.ov to
file P,-reign applications, and subject further to the reservation
of a non-exclusive and royalty-free license to tb:. Contractor (and
to it. , ~ existing and future associated and affiliated con panic *, if
any, ,,.i1-._-iin the co :fora` structure of which the Contractor is a
part) rb.lch license shall be assignable to the successor of that part
of the Contractor's business to which such Invention pertains;
(iii) the Contractor shall furnish promptly to the Contract-
ing O:; ii ter on request an irrevocable power of attorney to inspect and
make copies of each United States patent application filed by or on
behalf of the Contractor covering any such Invention;
(CPF`F Aug. 20, '57)
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(iv) In the event the Contractor, r 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 Contract-
ing Officer not less than sixty days before the expiration of the response
period and, upon written request, deliver to the Contracting officer such
duly executed instruments (prepared by the Government) as are deemed
necessary to vest in the Government the Contractor's entire right,
title, and interest in such Invention and the application, subject to
the reservation ac specified in (d)(ii) above; and
(v) the Contractor shall deliver to the Contracting Officer
duly executed instl.?uments fully confirmatory of any license rights
heroin 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
c.2plications on Subject Inventions in each foreign country within:
(i) nine months from the date a corresponding United States
application is filed;
(ii) six months from the date permission is granted to file
foreign applications where such filing had been prohibited for security
reasons; or
(iii) such longer period as may be approved by the Contracting
Officer. The Contractor shall, upon written request of the Contract-in';
Officer, convoy 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 assignable to the
successor of that part of the Contractorls business to which the Subject
Invention pertains..
(f) If the Contractor fails to deliver to the Contracting Officer
the interim reports required by (c)(ii) above, or fails to furnish the
written disclosures for all Subject Inventions required by (c)(i) above
shown to be due in accordance with any interim report delivered under
(c)(ii) or otherwise known to be unreported, there shall be withheld
from payment until the Contractor shall have corrected such failures
either ten percent (10%) of the amount of this contract, as from time
to time amended, or five thousand dollars 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
(65,000), whichever is less, shall have been set aside, such reserve
(CPFF Ai,a_ 20- t57)
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or balance thereof to be retained until the Contractor shall have
f1>r xis red to the Contracting Officer:
(i) the finial 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
reports delivered under (c)(ii) above or in accordance with such
final reports or are otherwise known to be unreported; and
(iii) the informat4on as to any subcontractor required by
(h) below. The maximum amount which may be withheld under this par-
agraph (f) shall not exceed ten percent (10%) of the amount of this
contract or five thousand da lars ($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 sub-
sequent payment thereof to the Contractor shall not be construed as
a waiver of any rights accruing to the Government under this contract.
This paragraph (f) shall not be construed as requiring the Contractor
to withhold any amounts from a subcontractor to enforce compliance
with patent provisions of a subcontract,
(g) The Contractor shall exert all reasonable effort in nego-
tiating for the inclusion of this Patent Rights clause in any sub-
contract hereunder of three thousand dollars ($3,000) or more
having experimental, developmental, or research work as one of its
purposes. In the event of refusal by a subcontractor to accept the
Patent Rights clause, the Contractor shall not proceed with the sub-
contract without written authorization of the Contracting Officer,
and upon obtaining such authorization, shall cooperate with the
Government in the nego-tiation with such subcontractor of an
acceptable patent rights clause; provided, however, that the Con-
tract,:ar 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 Contractor
has under such subcontracts, except that in no event shall the sub-
contractor be required to grant to the Government patent rights in
excess of those herein agreed to be granted to the Government by
the Contractor.
(h) The Contractor shall, at the earliest practicable date,
notify the Contracting Officer in writing of any subcontract containing
a patent rights clause, furnish the Contracting Officer a copy of such
clause, and notify the Contracting Officer when such subcontract is
completed. It is understood that with respect to such subcontract
clause, the Government is a third party beneficiary, and the Contrac-
tor hereby assigns to the Government all the rights that the Contrac-
tor 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
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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 incrgaase in contract prices based upon
additional cost incurred by subh,delay are proper under the
circumstances; and the contract shall be modified accordingly. If
the Contractor, after exertin" 411 reasonable effort, is unable to
obtain a qualified subcontrac'bir as set forth above, the Contractor
Iiay submit to the ContractingrOfficer 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 sot forth,
If, within thirty-five (35) days after the date of receipt of such
request for a waiver or modification of said requirement, the Contract-,,.:
ing 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
terminate and the rights and obligations of the parties shall be govern-
ed by the provisions of the clause of this contract providing for ter-
mination for the convenience of the Government.
21. GOVERNMENT PFLPERTY (ASPR 13-503 AFPI 7-403.21)
(a) The Government shall deliver to the Contractor, for use in
connection with and under the terms of this contract, the property
described in the Schedule or specifications, together with such related
data and information as the Contractor may request and as may reasonably
be required for the intended use of such property (hereinafter referred
to as "Government-furnished Property"). The delivery or performance
dates for the supplies or services to be furnished by the Contractor
under this contract are based upon, the expectation that Government-
furnished Property suitable for use will be delivered to the Contract-
or at the times stated in the Schedule or, if not so stated, in
sufficient time to enable the Contractor to meet such delivery or per-
formance dates. In the event that Government-furnished Property is
not delivered to the Contractor by such time or times, the Contracting
Officer shall, upon timely written request made by the Contractor, make
a determination of the delay occassioned the Contractor and shall
(CPFF Aug. 20, 157)
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equitably adjust the estimated cost, fixed fee, or delivery or perform
enc` ;'aces, or all of them,&any other contractual provisions affected
by s zcA delay, in accordance with the procedures provided for in the
clause of this contract entitled "ghsnges." In the event that Govern-
ment-furnished Property is received by the Contractor in a Condition
not suitable for the intended use, the Contractor shall, upon receipt
thereof notify the Contracting Officer of such fact and, as directed
by the Contracting Officer, either (i) return such property at the
Government's expense or otherwise dispose of the property or (ii)
effect rE:pa,irs 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 perform-
ance dates, or all of them, and any other contractual provision affected
by the return or disposition,:QZ~the repair or modification, in accord-
ance with the procedures proded for in the clause of this contract
entitled "Changes." The foregoing provisions for adjustment are ex-
elusive and the Government sha t. not be liable to suit for breach of
contract by reason of any delay in delivery of Government-furnished
Property or delivery of such property in a condition not suitable for
its intended use.
(b) Title to all property furnished by the GoverbMnent shall remain
in the Government. Title to all property purchased by the Contractor,
for the cost of which the Contractor is entitled to be reimbursed 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 performance of this contract,
or (ii) commencement of processin or use of such property in the
performance of this contract, or h(iii) reimbursement of the cost thereof
by the Government, whichever first occurs. All Government-furnished
Property, 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 collectively
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 personalty 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" (Appendix B, Armed Services Procurement Regulation), as
in effect on the date of the contract, which Manual is hereby in-
corporated by reference and made a part of this contract.
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CPFF Aug. 20, 157)
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(d) The Government Property provided, or furnished pursuant to
the term 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 a,-lsure
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
Office= may prescribe as reasonably necessary for the protection of
Government property.
(f)(i) The contractor shall, ndt be liable for any loss of or
damage to the Government property,, r for expenses incidental to
such loss or damage, except that #e Contractor shall be responsible
for any such loss or damage (including expenses incidental there-o)
(A) which results from willful misconduct or lack of good faith on the
part of any of the Contractor's directors or officers,,, or on t1o part
of any of its managers, superintendents, or other equivalent represen-
tatives, who have supervision or direction of (I) all or substantially
all of the Contractor's 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 contract; 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 subparagraph (A) above, (I) to maintain and administer,
in accordance with sound industrial practice, the program for maintenance,
repair, protection 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 paragraph (e) hereof; or (C) for which the Contractor is
otherwise responsible under the express terms of the clause or
clauses designated in the Schedule; or (D) which results from a risk
expressly required to be insured 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, which-
ever is greater; or (E) which results from a risk which is in fact
covered by insurance or for which the Contract is otherwise reimbursed,
but only to the extent of such insurance or reimbursement; provided that,
if more than one of the above exceptions shall be applicable in any
case, the Contractor's liability tinder 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
(CP''''F Aug. 20,'57)
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from such liability. In the absence of such approval, the subcontract
say?, contain
i
appropr
ate provisions requiring the return of all Govern-
property roperty in as good conditions when received, except for rea,on?-
a:w-e 4rear and tear or for the util:iZstion of the property in accordance
with the provisions of the prime contract.
(ii) The Contractor shall not be reimbursed for, and shall
not include 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, exceptto the extent that the Government may
have required the Contractor to carry such insurance under any other
provision of this contract.
(iii) Upon the happening of loss or destruction of or
damage to the Government Property, the Contractor shall notify the
Contracting officer thereof,,'hd shall communicate with the Loss and
Salvage Organization, if any now or hereafter designated by the Con-
tracting Officer, and with the assistance of the Loss and Salavage
Organization so designated (unless the Contracting Officer has designated
that no such organization be employed), shall take all reasonable steps
to protect 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 statement of (A) the lost, destroyed and damaged Govern-
ment Property, (B) the time and origin of the loss, destruction or
damage, (C) all known interests in commingled property of which the
Government Property is a part, and (D) the insurance, if any, cover-
ing any part of or interest in such commingled property. The Con-
tractor shall make repairs and renovations of the damaged Govern-
ment 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 replace 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 Government's
right to recover against third parties for any such loss, destruction
or damage and, upon the request of the Contracting Officer, shall, at
the Government's expense, furnish to the Government all reasonable
assistance and cooperation (including the prosecution of suit and the
execution of instruments of assignment in favor of the Government) in
obtaining 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 such loss or destruction of or damage to the
Government property for the benefit of the Government.
(CPFF Aug. 20, 157)
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?or. use where applicable.r,
(v) In the event any aircraft are to be furnished under this contract, -My
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
~!4,7-e o this contract captioned "Flight Risks", to the extent such clause is,
Its terms, applicable.
(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 Con-
tractor for such period of time as is required for the performance of this
::ontract unless the Contracting Officer determines that the interests of the
xovernment require removal of such property. In such case the Contractor
Shall promptly take such action as the Contracting Officer may direct with
.respect to the removal and shipping of Government Property. In any such
instance, the contract may bs amended to accomplish an equitable adjustment in
the terms and provisions thereof.
(i) Upon the completion of thie contract, or at such earlier dates as
may be fixed by the Contracting Officer, the Contractor shall submit to the Con-
tracting Officer in a form acceptable to him, inventory schedules covering all
Items of the Government Property not consumed in the performance of this contract
or not theretofore delivered to the Government, and shall deliver or make such
other disposal of such Government property as may be directed or authorized by
the Contracting Officer. The net proceeds of any such disposal shall be credited
to the cost of the work covered by the contract or shall be paid in such manner
as the Contracting Officer may direct. The foregoing provisions shall apply to
scrap from Government Property provided, however, that the Contracting officer
may authorize or direct the Contractor to omit from such inventory schedules any
scrap consisting of cutting and processing waste, such as chips, cuttings,
aorings., turnings, short ends, circles, trimmings, clippings, and remnants, and
.o dispose of such scrap in accordance with the Contractor's normal practice and
account therefor as a part of general overhead or other reimbursable cost in
accordance with the Contractor's established accounting procedures.
(j) Unless otherwise provided herein, the Government shall not be under
any duty or obligation to restore or rehabilitate, or to pay the cost of the
-estoration or rehabilitation of the Contractor's plant or any portion thereof
Jhich is affected by the removal of any Government Property.
(k) Directions of the Contracting Officer and communications of the Con-
;ractor issued pursuant to this clause shall be in writing.
(1) As provided in paragraph (i) of the above clause, the Contracting
ificer may, subject to Departmental procedures, authorize or approve use of the
,cntractorts established scrap disposal and accounting procedures whenever the
imount and recoverable value of scrap from the Government property are relatively
,*nor and the Contractor's established procedures for accummulating and disposing
of scrap and crediting the proceeds thereof to general overhead or other general
:ost will permit the Government to share equitably in such scrap recovexythrough
a reduction of overhead or other cost factor affecting reimbursement under the
contract.
INSURANCE-LIABILITY TO THIRD PERSONS (ASPR 7-203.22 AFPI7-403.22)
(a) The Contractor shall procure and thereafter maintain workmen's
)mpensation, employer's liability, comprehensive general liability (bodily
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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 procure workmen's eomjpensation insurance may, with
the approval of the Contracting 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.
(b) The Contractor agrees,: to the extent and in the manner
required by the Contracting Officer, to submit for the approval. of
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
allocable to this contract of the reasonable cost of insurance as
required or approved pursuant to the provisions of this clauses and
(ii) for labiities to third persons for loss or for 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 Contractor), or for death or bodily injury, not
cotr.;sensate.i 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 b;;- final judgements or by settlements
approved in writing by the Government, and expenses incidental to
such liabilities, except liabilities (I) for which the Contractor
is otherwise responsible under the express terms of the clause or
clau,::es, if any, specified in the Schedule, or (II) with respect
to which the Contractor has failed to insure as required or maintain
ins'.i,nce as approved by Contracting officer or (III) which results
from willful misconduct or lack of good faith on the part of any of
the Contractor's directors or officers, or on th.e part of any of its
managers, supel.ntendents, or other equivalent representatives, who
have supervision or direction of (1) all or substantially all of the
Contractor's business, or (2) all or substantially all of the Con-
tractor's operations at any one plant or separate location in which
this contract is being performed, or (3) a separate and complete
major industrial operation in connection with the performance of
this contract. The foregoing shall not restrict the right of the
Contractor to be reimbursed for the cost of insurance maintained by
the Contractor in connection with the performance of this contract,
other than insurance required.to be submitted for approval or required
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to be procured and procured and iaintained pursuant to the provisions
of this clause, provided such cost would constitute Allowable
Costs under the clause of this contract entitled ".Allowable Comet.,
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 e,de, against the Contractor
arising out of the performance of this contract, the cost and
expense of which may be reimbursable to the Contractor under
the provisions of this contract, and the risk of which is then
uninsured or in which the amount claimed exceeds the amount of
coverage. Tb-. Contractor shall furnish immediately to the
Government c.4es of all pertinent papers received by the
(:oretractor. if the amount of trig -liability claimed" exceeds
the amount c coverage, the Contractor shall authorize
;?cpresentatives of the Government to collaborate with counsel
for the insurance carrier?, i' any, in settling or defending
such claim. If the liability is not insured or covered by
? ond, the Contractor shall, if required by the Government,
z,uthorJ.ze re--,resentatives of the Government to settle or
defend ony such claim and to represent, the Co.nt.:actor in or
take charge o- any :Litigation in connection therewith;
rovided, however, that the Contractor may, at its own expense,
be ass,,oiated with the representatives of the Government in
": he settlement or defense of any such claim or 1:~Y;'4-igation.
23. ADMORIZATION AND C.' 't`ISFNT (AsPR 9-102.2 AFFILm "(-4C3.23)
The Government hereby gives its authorization and consent
for all use and manufacture of any patented invention of tAe
p~L,formance of this contract or any part hereof or any arendmene
]-,.aeto or any subcontract hereunder (including any lows.-t:ter
s;~.bcontract) .
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24, FILING OF PATENT APPLICATIONS (ASPR 9-104 AFPI 7-404.3)
(n) 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 applicatiori'should be placed under an order
of secrecy or sealed in accordance'With the provisions of 35 U. 8.
Code 181-188 or the issuance of a pgtept should be otherwise delayed
under pertinent statutes or regulat,19.i5,; and the Contractor shall
observe any instructions of the Contracting Officer with respect to
the manner of delivery of the patent.&appication to the U. S. Patent
Office for filing, but the Contracto shall not be denied the right
to file such patent application. It theContractin Officer shall
not have given any such instructions within thirty 0) 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 Me when the Contractor files or
causes to be filed a patent application disclosing any subject
matter of this contract, which subject matter is classified
11 Connfidential", a copy of such application for determination whether,
for reasons of national. security, such application should be placed
under an order of secrecy or the; issuance of a patent should be other-
wise 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.
25r... REPORTING OF ROYALTIES (ASPR 9-i.lo AFPI 7-404.4)
The provisions of this clause shall be applicable only if the
amount of the contract is in excess of $50,000.
(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 initial.4250):
?(1) The name and address of each licensor to whom royalties
in excess of $250 have been paid or are to be paid,
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(2) The patent numbers, patent applicationserial numbers
(with filing dates), or other identification of the basis for such
royalties $
(3) The manner of computin .tike royalties consisting of (i)
a brief identification of each royalty-'bearing unit or process, (ii)
the total amount of royalties,. and (iii) the percentage rate or dollars
and cents amount of royalties Qn,:each such unit or process,, provided
that if the royalties cannot be computed in terms of i1nits or dollars
and cents value, then other data '4 owing the manner in which the Con-
tractor computes the royalties.
(b) In lieu of furnishing a%pbrt under paragraph (a), the
Contractor may furnish a single,; consolidated report for each account-
ing period of the Contractor dur$hg which the Contractor has contracts
with the Government, provided toe Contractor has requested and obtained
the prior written approval of the Contracting Officer. Such consolidated
reports shall be furnished, whtin 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 acetuing to each licensor at a
rate in excess of $1,000 per annum on the Contractor's over-all business,
together with (i) the name and address of each Such licensor, (ii) the
patent numbers, patent application serial numbers (with filing dated),
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 rare or unit amount, such other data showing
the manner by which the royalties accrue to licensor, and (v) an
estimate or approximation (without detailed accounting) of the portion
of such royalties that may be.'.,attributablo to Government contracts.
The Contractor shall, if requested by the Government, furnish at Govern-
ment expense a more detailed allocation of such royalty payments
attributable to Government contracts.
(c) In the event that the Contractor requests written approval
to furnish consolidated reports under paragraph (b) above, the
Contracting Officer shall promptly consider the request and furnish
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
furnished 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.
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(d) After payment of eighty jrcent (80%) of the amount of this
contract, as from time to time ame4dQd, further payment shall be with-
held r til a reserve of either (i):ten percent (10%) of such amount or
(ii) $5,000, which ever is less, Ohall 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 Contractor's request to furnish the report under paragraph tb);
provided that no ariount shall cojtinue to be withheld from payment
for the causes specified in this paragraph (a) if the Contracting
Officer shall find that the Contractor has not been furnished a
letter as required by paragraph (c) within a reasonable time after
+.?akhng written request to submit a single, consolidated report under
?:;he provisions of paragraph (b) of this clause; and provided 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 (alis unsatisfactory or the report called
for by para?;_ aph (b) is due but has not been received, or if
received, iw found to be unsatisfactory. No amount shall be with
held under his paragraph when the minimum amount specified by this
paragraph is being withheld under other provisions of this contract.
The withholding of any amount or subsequent payment thereof to the
Contractor shall not be construed as a waiver of any right accruing to
the Government under this contract.
2(. RIGHTS 10 DiTA-UNLIMITED (ASPR 9-203.1 AMT 7-40+.5)
(a) We term "Subject Data" as used herein includes writings,
sound recordings, pictorial reproductions, drawings or other graphical
?oprese-iatations, and works of any n?ture (whether or not
copyrighted) which are specified to be delivered under this contract.
The term does not include financial reports, cost analyses and other
information incidental to contract administration.
(b) Subject to the proviso of (c) below, the Government may
duplicate, uo , a::d dionlose in any manner and for any purpose
wnatsoever, and have others so do all Subject Data delivered under
this contract.
(c) The Contractor agrees to and does hereby grant to the
Government, and to its officers, agents, and employees acting
within the scope cf their official duties, a royalty-free, non-
exclusive and irrevocable license throughout the world, to
publish, translate, reproduce, deliver, perform, dispose of and
to authorize others so to do, all Subject Data now or hereafter
covered by copyright; PROVIDED that with respect to such Subject
Data not originated in the performance of this contract but which
is incorporated in the work furnished under this contract such
license shall be only to the extent that the Contractor, its
employees, or any individual or concern specifically employed or
assigned by the Contractor to originate and prepare such Data
wider this contract, now has, or prior to completion or final
settlement of this contract may acquire the right to grant such
license without becoming liable to pay compensation to others
solely because of such grant.
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(d) The Contractor shall exetall reasonable effort to
advise the Contracting Officer, at 'the time of delivery of the
Subject Data furnished under this pontract, of all invasions of
the right or privacy contained therein and of all portions of
such Data copied from work not composed or produced in the
perforimmance of this contract and iot licensed under this clause.
(e) The Contractor shall report to the Contracting Officer,
promptly and in reasonable written detail, each notice or claim
of copyright infringement received by the Contractor with respect
tv all Subject Data delivered under this contract.
(f) Nothing co; tained in this clause shall imply a license to
the Government under any patent or be construed as
affecting the scope of any license or other right otherwise
granted to the Government under any patent.
(g) The Contractor shall.,w t affix any restrictive markings
upon any Subject Data, and if such markings are affixed, the Govern-
wont shall have the right at any time to modify, remove, obliterate
or ignore any such mmirking.
27. M111TARY SECURITY RaOUIRWNT$ (ASPR 7-1O4.12 and 7-20412
AFPI 7-401.7)
(a) The provisions of this clause shall apply to the extent
that this con'1:Lact involves access to security information classified
"Confidential" including "confidential-Modified Handling Authorized"
or higher.
(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 c3 assification, by the use of
a Security Requireme.xts Chi.:sh List (DD Form 254E).
(c) To the extent the Government has indicated as of the date
of this contract, or thereafter indicated, security classificatic 7
u-.r.;r this contract as provided in paragraph (b) above, the
Ccc';ractor shall safeguard all classified elements of Ws contract
and shall provide and maintain a system of security controls within
i o own organization in accordance with the requirements of:
(i) the Security Agreement (DD Form 441), including the
Department of Defense Industrial Security Manual for Safeguarding
Classified Information as in effect on the date of this contract, and
modification to the Security Agreement for the purpose of adapting
the Manual to the Contractor' 's business; and
(ii) any amendments to said Manual made after the date of
this contract, notice of which has been furnished to the Contractor
by the Security Office of the Military Department having security
cognizance over the facility.
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(d) Representatives of the Miljtary Department having security
cognizance over the facility and representatives of the contracting
Military Dapavtment shall have the right to inspect at reasonable
intervals the procedures, methods, and facilities utilized by the
Contractor in complying with the security requirements under this
contract. Should the Government, through its authorized representa-
tive, determine that the Contractor has not complied with such
requirements, the Government shall inform the Contractor in writing
of the proper action t6 be taken In order to effect compliance with
such requirements.
(e) If, subseilient to the date of this contract, the security
classifications or security requirements under this contract are
,:hanged by the Government as provided in this clause, if such
change causes an increase or decrease in the estimated cost Of
performance 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 "Changes" clause of this contract.
(f) The Contractor agrees to insert, in all subcontracts here-
under which involve. L.cev to classified information, provisions which
shall conform substantially to the language of this clause, including
this paragr :,h (f) tut exclu4ing paragraph (e) of this clause. The
Contractor may insert in ant such subcontract, and any such sub-
contract entered into there nd.er may contain, in lieu of paragraph
(e) of this cause, provisions which permit equitable adjustments
to be made +n the subco:itrt price or in the estimated cost and
fixed fee of the subcontract (as appropriate to the type of
.,.i:hbcont.'act involved) on account of changes _.n ac3urity classifications
or requirements made under the provisions of this clause subsequent
to W We of the subcontract involved.
(g) The Cont:r v ctor ,1.so agrees that it shall determine that
any subcontractor i;'roposed by it for the furnishing of supplies
end services which will involve access to classified informatl3:n
in the Contractor's custody has been granted an appropriate facility
security clearance, which is still in effect, prior to being accorded
access to such classified information.
28. ';b.A S>g-RE LEY PUBLIC C0N'11RACTS ACT (ASPR 12-X04 AFPI VOW)
If this contract is for the manufacture or furnishing of ma-
tarials, supplies, articles or equipment in on amount which exceeds
or may exceed $10,000 and is otherwise subject to the Walsh-
Y.aleyPublic Contracts Ants as amended (41 U.S. Code 35-45), there
are hereby incorpoTated 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.
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29. GRATUITIES (ASPR 7-104.1.6 AFPI 7-4o4.9)
(a) The Government may, by written notice to the Contractor,
terminate the right of the Contractor to proceed under this contract
hi
t
s
ary or
if it is found, after notice and hearing, by the Secre
duly authorized representative, that gratuities (in the form of
entertainment, gifts, or otherwise.,). were offered or given by the
Contractor, or any agent er.representative of the Contractor, to
any officer or employee of the Government with a view toward
securing a contract or securing f4rorable treatment with respect
4 the awarding or amending, or.the making of any determinations
~?;ith respect to the performing of suoh.contract, provided, that
t~.ae existence of the facts upon which the Secretary or his duly
a+-xt:horized representative makes such findings shall be in issue
and may be reviewed in any compgtent cost,
(b) In the event this contract is terminated as provided in
paragraph (a hereof, the Govert r ent shall be entitled (i) to pursue
the same rem,~..d:ies against the,; t ontracror as it could pursue in the
event of a brc.ch of the contre".t by the Contractor, and (ii) as a
penal-11-,Y in adLlition to any other damages to which it may be entitled
by law, to exemplary darrg?a in an amount (as determined by the Sec,.
rotary or his duly authorized representative) which shall be not
:..ss ?-,t:,hn the.:e nor more than ten tires the costs incurred by the
Contr^.?3,or ir.. providing any such gratuities to en~r such officer or
employes
(c) Th' rights and remedies of the Government provided in
this cl tse shall not be exclusive and are it addition to any
c, .;her rl.=;hts and remedies pi ovided by law or under this contract.
30. NEGOTIATED OVERHEAD RATES (ASPR 3-704.1 AFPI 7-404.12)
(a) Notriithst,..',..ding '`-.e provisions of the clause of t17Ls
co',:.tract entitled " U.owabl.-~ Cost, Fiax