ADDENDUM TO SECTION A GENERAL PROVISIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89B00552R000700050008-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 20, 2016
• Document Release Date: January 7, 2004
• Sequence Number: 8
• Publication Date: July 1, 1974
• Content Type: REGULATION

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ADDENDUM TO SECTION A
GENERAL PROVISIONS
1 July 1974
(d) The Contractor will be compensated for royalties reported
under (c) above only to the extent that such royalties were in-
cluded in the contract price and are determined by the Contracting
Officer to be properly chargeable to the Government and allocable
to the contract. Therefore, to the extent that any royalties which
are included in the contract price are not in fact paid by the
Contractor or are determined by the Contracting Officer not to be
properly chargeable to the Government and allocable to the con-
tract, the contract price shall be reduced. Repayment or credit
to the Government shall be made as the Contracting Officer
directs.
7-103.16 CONTRACT WORK HOURS AND SAFETY STAND-
ARDS ACT-OVERTIME COMPENSATION (1969
NOV)
7-104.76 F.O.B. DESTINATION-EVIDENCE OF SHIPMENT
(1969 JUN)
7-103.27 LISTING OF EMPLOYMENT OPENINGS FOR
VETERANS (1971 NOV)
7-104.83 COST ACCOUNTING STANDARDS (1972 JUL)
ADDITIONS:
ARTICLE 4
7-104.49 GOVERNMENT SURPLUS (1965 JAN)
(a) In the event the bid or proposal is based on furnishing
items or components which are former Government surplus prop-
erty or residual inventory resulting from terminated Government
contracts, a complete description of the items ' or components,
quantity to be used, name of Government agency from which
acquired, and date of acquisition shall be set forth on a separate
sheet to be attached to bid or proposal. Notwithstanding any
information provided in accordance with this provision, items
furnished by the Contractor must comply in all respects with
the specifications contained herein.
(b) Except as disclosed by the Contractor in (a) above, no
property of the type described herein shall be furnished under
this contract unless approveA in writing by the Contracting Officer.
7-104.8(b) REFUND OF ROYALTIES (1968 FEB)
(a) The contract price includes certain amounts for royalties
payable by the Contractor or subcontractors or both, which
amounts have been reported to the Contracting Officer.
(b) The term "royalties" as used in this clause refers to any
costs or charges in the nature of royalties, license fees, patent
or license amortization costs, or the like, for the use or for rights
in patents and patent applications in connection with the per-
formance of this contract or any subcontract hereunder.
(c) The Contractor shall furnish to the Contracting Officer,
before final payment under this contract, a statement of royalties
paid or required to be paid in connection with the performance
of this contract and subcontracts hereunder together with the
reasons therefor.
FOM
111-R74 1424A
(e) If, at any time within three (3) years subsequent to final
payment under this contract, the Contractor for any reason is
relieved in whole or in part from the payment of the royalties
included in the final contract price as adjusted pursuant to para-
graph (d) above, the Contractor shall promptly notify the Con-
tracting Officer of that fact and shall reimburse the Government
in a corresponding amount.
(f) The substance of this clause, including this paragraph (f),
shall be included in any subcontract in which the amount of
royalties reported during negotiation of the subcontract exceeds
two hundred and fifty dollars ($250).
7-103.16(a) CONTRACT WORK HOURS AND SAFETY
STANDARDS ACT-OVERTIME COMPENSA-
TION (1971 NOV)
This contract, to the extent that it is of a character specified
in the Contract Work Hours and Safety Standards Act (40 U.S.C.
327-333), is subject to the following provisions and to all other
applicable provisions and exceptions of such Act and the regula-
tions of the Secretary of Labor thereunder.
(a) Overtime requirements. No Contractor or subcontractor
contracting for any part of the contract work which may require
or involve the employment of laborers or mechanics shall require
or permit any laborer or mechanic in any workweek in which
he is employed on such work to work in excess of eight hours
in any calendar day or in excess of forty hours in such workweek
on work subject to the provisions of the Contract Work Hours
and Safety Standards Act unless such laborer or mechanic receives
compensation at a rate not less than one and one-half times his
basic rate of pay for all such hours worked in excess of eight
hours in any calendar day or in excess of forty hours in such
workweek, whichever is the greater number of overtime hours.
(b) Violation; liability for unpaid wages; liquidated damages.
In the event of any violation of the provisions of paragraph (a),
the Contractor and any subcontractor responsible therefor shall be
liable to any affected employee for his unpaid wages. In addition,
such Contractor and subcontractor shall be liable to the United
States for liquidated damages. Such liquidated damage shall be
computed with respect to each individual laborer or mechanic
employed in violation of the provisions of paragraph (a) in the
sum of $10 for each calendar day on which such employee was
required or permitted to be employed on such work in excess
of eight hours or in excess of his standard workweek of forty
hours without payment of the overtime wages required by para-
graph (a).
(c) Withholding for unpaid wages and liquidated damages.
The Contracting Officer may withhold from the Government
Prime Contractor, from any moneys payable on account of work
performed by the Contractor or subcontractor, such sums as may
administratively be determined to be necessary to satisfy any
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liabilities of such Contractor or subcontractor for unpaid wages
and liquidated damages as provided in the provisions of paragraph
(b).
(d) Subcontracts. The Contractor shall insert paragraphs (a)
through (d) of this clause in all subcontracts, and shall require
their inclusion in all subcontracts of any tier.
(e) Records. The Contractor shall maintain payroll records
containing the information specified in 29 CFR 516.2(a). Such
records shall be preserved for three years from the completion
of the contract.
7-104.76 F.O.B. DESTINATION-EVIDENCE OF SHIP-
MENT (1968 JUN)
If this contract is awarded on an f.o.b. destination basis and if
transportation is accomplished by:
(i) common carrier, the Contractor agrees to furnish in
support of his invoice, a copy of the signed commercial bill
of lading indicating the carrier's receipt of the supplies
covered by the invoice for transportation to the destination
specified in the contract;
(ii) parcel post, the Contractor agrees to furnish a certifi-
cate of mailing with his invoice; and
(iii) other than common carrier or parcel post, the Con-
tractor agrees to attach to his invoice a receipted copy of the
appropriate delivery document showing receipt at the destina-
tion specified in the contract.
7-103.27 LISTING OF EMPLOYMENT OPENINGS (1973
SEP)
(This clause is applicable pursuant to 41 CFR 50-250 if this
contract is for $2,500 or more.)
(a) The Contractor, to provide special emphasis to the em-
ployment of qualified disabled veterans and veterans of the
Vietnam era, agrees that all suitable employment openings of the
Contractor which exist at the time of the execution of this con-
tract and those which occur during the performance of this con-
tract, including those not generated by this contract and including
those occurring at an establishment of the Contractor other than
the one wherein the contract is being performed but excluding
those of independently operated corporate affiliates, shall be
offered for listing at the appropriate office of the State employ-
ment service system wherein the opening occurs and to provide
reports to such office regarding employment openings and hires
as may be required.
(b) Listing of employment openings with the employment
service system pursuant to this clause shall be made at least con-
currently with the use of any other recruitment service or effort
and shall involve the normal obligations which attach to the
placing of a bona fide job order, including the acceptance of
referrals of veterans and non-veterans. Listing of employment
openings does not require the hiring of any particular job applicant
or from any particular group of job applicants referred by the
employment service system. Nothing contained herein is intended
to relieve the Contractor from any requirements in any Executive
Order or regulation regarding nondiscrimination in employment.
(c) (1) Reports required shall include, but not be limited to,
periodic reports which shall be filed at least quarterly with the
appropriate local State employment service office or, where the
Contractor has more than one establishment in a State, with the
central office of that State employment service. Such reports
shall indicate for each establishment (i) the number of individuals
who were hired during the reporting period, (ii) the number of
those hired who were disabled veterans, and (iii) the number
of those hired who were non-disabled veterans of the Vietnam
era. The Contractor shall maintain copies of the reports submitted
until the expiration of one year after final payment under the
contract, during which time they shall be made available, upon
request, for examination by any authorized representatives of the
Contracting Officer or the Secretary of Labor.
(2) Whenever the Contractor becomes contractually bound
to the listing provisions of this clause, he shall advise the employ-
ment service system in each state wherein he has establishments,
of the name and location of each such establishment in the State.
As long as the Contractor is contractually bound to these provisions
and has so advised the State employment service system, there
is no need to advise the State system of subsequent contracts. The
Contractor may advise the State system when he is no longer bound
by this contract clause.
(3) If the contract Is for less than $10,000 or if it is with
a State or local government, the procedures set forth in subpara-
graphs (1) and (2) of this paragraph (c) are not required.
(d) This clause does not apply to the listing of employment
openings which occur and are filled outside the 50 States, the
District of Columbia, Guam, Puerto Rico, and the Virgin Islands.
(e) This clause does not apply to openings which the Contractor
proposes to fill from within his own organization or to fill pur-
suant to a customary and traditional employer-union hiring ar-
rangement. This exclusion does not apply to a particular opening
once an employer decides to consider applicants outside of his
own organization or employer-union arrangements for that opening.
(f) As used in this clause:
(1) "All suitable employment openings" includes, but is
not limited to, openings which occur in the following job
categories: production and nonproduction; plant and office;
laborers and mechanics; supervisory and nonsupervisory;
technical; and executive, administrative, and professional
openings which are compensated on a basis of less than
$18,000 per year. This term includes full-time employment,
temporary employment of more than three (3) days' duration,
and part-time employment.
(2) "Appropriate office of the State employment service
system" means the local office of the Federal-State national
system of public employment offices with assigned respon-
sibility for serving the area of the establishment where the
employment opening is to be filled, including the District of
Columbia, Guam, Puerto Rico, and the Virgin Islands.
(3) "Openings which the Contractor proposes to fill from
within his own organization" means employment openings for
which no consideration will be given to persons outside the
Contractor's organization (including any affiliates, subsidiaries,
and the parent companies), and includes any openings which
the Contractor proposes to fill from regularly established
"recall" and "rehire" lists.
(4) "Openings which the Contractor proposes to fill from
within his own organization or to fill pursuant to a customary
and traditional employer-union hiring arrangement" means
employment openings for which no consideration will be given
to persons outside of a special hiring arrangement, including
openings which the Contractor proposes to fill from union
hiring halls, which is part of the customary and traditional
employment relationship existing between the Contractor
and representatives of his employees.
(5) "Disabled veteran" means a person entitled to dis-
ability compensation under laws administered by the Veterans
Administration for disability rated at thirty percent (30%) or
more, or a person whose discharge or release from active
duty was for disability incurred or aggravated in the line of
duty.
(6) "Veteran of the Vietnam era" means a person who was
discharged or released within the 48 months preceding his
application for employment covered under this part and who
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(i) served on active duty for a period of more than 180 days,
any part of which occurred after August 5, 1964, and was
discharged or released therefrom with other than a dis-
honorable discharge, or (ii) was discharged or released from
active duty for service-connected disability if any part of
such duty was performed after August 5, 1964.
(g) The Contractor agrees to place this clause (excluding this
paragraph (g)) in any subcontract directly under this contract
provided, such subcontract is for $2,500 or more. (Subcontracts
for personal services are exempted from this requirement.)
(h) Failure of the Contractor to comply with the requirements
of this clause may result in termination for default of the contract
concerned.
ARTICLE 41
7-104.83 COST ACCOUNTING STANDARDS (1974 JAN)
(a) Unless the Cost Accounting Standards Board has prescribed
rules or regulations exempting the Contractor or this contract
from standards, rules, and regulations promulgated pursuant to
50 U.S.C. App. 2168 (Public Law 91-379, August 15, 1970), the
Contractor, in connection with this contract shall:
(1) By submission of a Disclosure Statement, disclose in
writing his cost accounting practices as required by regula-
tions of the Cost Accounting Standards Board. The required
disclosures must be made prior to contract award unless the
Contracting Officer provides a written notice to the Contractor
authorizing post-award submission in accordance with regula-
tions of the Cost Accounting Standards Board. The practices
disclosed for this contract shall be the same as the practices
currently disclosed and applied on all other contracts and
subcontracts being performed by the Contractor and which
contain this Cost Accounting Standards clause. If the Con-
tractor has marked the Disclosure Statement to indicate that
it contains trade secrets and commercial or financial informa-
tion which is privileged and confidential, the Disclosure State-
ment will be protected and will not be released outside the
Government.
(2) Follow consistently the cost accounting practices dis-
closed pursuant to (1) above in accumulating and reporting
contract performance cost data concerning this contract. If
any change in disclosed practices is made for purposes of
any contract or subcontract subject to Cost Accounting Stand-
ards Board requirements, the change must be applied pro-
spectively to this contract, and the Disclosure Statement must
be amended accordingly. If the contract price or cost allow-
ance of this contract is affected by such changes, adjustment
shall be made in accordance with subparagraph (a) (4) or
(a) (5) below, as appropriate.
(3) Comply with all Cost Accounting Standards in effect
on the date of awards of this contract or if the Contractor
has submitted cost or pricing data, on the date of final agree-
ment on price as shown on the Contractor's signed certificate
of current cost or pricing data. The Contractor shall also
comply with any Cost Accounting Standard which hereafter
becomes applicable to a contract or subcontract of the Con-
tractor. Such compliance shall be required prospectively
from the date of applicability to such contract or subcontract.
(4) (A) Agree to an equitable adjustment as provided in
the changes clause of this contract if the contract cost is
affected by a change which, pursuant to (3) above, the Con-
tractor is required to make his established cost accounting
practices whether such practices are covered by a Disclosure
Statement or not.
(B) Negotiate with the Contracting Officer to determine
the terms and conditions under which any Disclosure State-
ment change other than changes under (4) (A) above may be
made. A change to a Disclosure Statement may be proposed
by either the Government or the Contractor, provided, how-
ever, that no agreement may be made under this provision,
that will increase costs paid by the United States.
(5) Agree to an adjustment of the contract price or cost
allowance, as appropriate, if he or a subcontractor fails to
comply with an applicable Cost Accounting Standards or to
follow any practice disclosed pursuant to subparagraphs
(a)( 1) and (a) (2) above and such failure results in any in-
creased costs paid by the United States. Such adjustment
shall provide for recovery of the increased costs to the United
States together with interest thereon computed at the rate
determined by the Secretary of the Treasury pursuant to
Public Law 92-41, 85 STAT. 97, or seven percent (7% )
per annum, whichever is less, from the time the payment by
the United States was made to the time the adjustment is
effected.
(b) If the parties fail to agree whether the Contractor or a
subcontractor has complied with an applicable Cost Accounting
Standard, rule, or regulation of the Cost Accounting Standards
Board and as to any cost adjustment demanded by the United
States, such failure to agree shall be a dispute concerning a
question of fact within the meaning of the disputes clause of this
contract.
(c) The Contractor shall permit any authorized representatives
of the head of the agency, of the Cost Accounting Standards
Board, or of the Comptroller General of the United States to ex-
amine and make copies of any documents, papers, or records
relating to compliance with the requirements of this clause.
(d) The Contractor shall include in all negotiated subcontracts
which he enters into the substance of this clause except paragraph
(b), and shall require such inclusion in all other subcontracts of
any tier, except that this requirement shall apply only to negotiated
subcontracts in excess of $100,000 where the price negotiated is
not based on:
(i) Established catalog or market prices of commercial
items sold in substantial quantities to the general public, or
(ii) prices set by law or regulation.
NOTE: (1) Subcontractors shall be required to submit their
Disclosure Statements to the Contractor. However, if a subcon-
tractor has previously submitted his Disclosure Statement to a
Government Administrative Contracting Officer (ACO) he may
satisfy that requirement by certifying to the Contractor the date
of such Statement and the address of the ACO.
(2) In any case where a subcontractor determines that the Dis-
closure Statement information is privileged and confidential and
declines to provide it to his Contractor or higher tier subcon-
tractor, the Contractor may authorize direct submission of that
subcontractor's Disclosure Statement to the same Government
offices to which the Contractor was required to make submission
of his Disclosure Statement. Such authorization shall in no way
relieve the Contractor of liability as provided in paragraph (a) (5)
of this clause. In view of the foregoing and since the contract may
be subject to adjustment under this clause by reason of any failure
to comply with rules, regulations, and Standards of the Cost Ac-
counting Standards .Board in connection with covered subcontracts,
it is expected that the Contractor may wish to include a clause
in each such subcontract requiring the subcontractor to appro-
priately indemnify the Contractor. However, the inclusion of such
a clause and the terms thereof are matters for negotiation and
agreement between the Contractor and the subcontractor, provided
that they do not conflict with he duties of the Contractor under its
contract with the Government. It is also expected that any sub-
contractor subject to such indemnification will generally require
substantially similar indemnification to be submitted by his sub-
contractors.
(e) The terms defined in Section 331.2 of Part 331 of Title 4,
Code of Federal Regulations (4CFR 331.2) shall have the same
meanings herein. As there defined, "negotiated subcontract"
means "any subcontract except a firm fixed-price subcontract made
by a Contractor or subcontractor after receiving offers from at
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least two firms not associated with each other or such Contractor
or subcontractor, providing (1) the solicitation to all competing
firms is identical, (2) price is the only consideration in selecting
the subcontractor from among the competing firms solicited, and
(3) the lowest offer received in compliance with the solicitation
from among those solicited is accepted."
7-103.15 COMMUNIST AREAS (1974 APR)
(a) Unless he first obtains the written approval of the Contract-
ing Officer, the Contractor shall not acquire for use in the per-
formance of this contract:
(i) any supplies or services originating from sources within
the following communist areas:
Albania.
Bulgaria.
China, excluding Taiwan (Formosa), but including
Manchuria, Inner Mongolia, the provinces of Tsinghai
and Sikang, Sinkiang, Tibet, the former Kwantung
Leased Territory, the present Port Arthur Naval Base
Area, and Lianoning Province.
Communist-controlled area of Viet Nam and Communist-
controlled area of Laos.
Cuba.
Czechoslovakia.
East Germany (Soviet Zone of Germany and the Soviet
Sector of Berlin).
Estonia,
Hungary.
Latvia.
Lithuania.
North Korea.
Outer Mongolia.
Poland and Danzig.
Union of Soviet Socialist Republics.
(ii) any supplies, however processed, which are or were
located in or transported from or through China (as described
in (i) above), North Korea, North Vietnam, or Cuba;
(iii) any of the following supplies, if of foreign origin
and however processed, unless acquired directly from the
countries indicated for particular supplies:
Aniseed star ............................... None.
Aniseed oil ................................ None.
Antiques, Chinese type (except Chinese porcelain,
which qualified under items 766.20-25 of Title
I-Tariff Schedules of the United States, Tariff
Act of 1930, as amended, and which is deco-
rated with the armorial bearing, crests, mono-
grams, cyphers, or badges of European or Amer-
ican families or societies or bearing motifs based
thereon, or with European or American political,
memorial, or Masonic scenes or devices, or with
European or American figures, ships, or other
scenes, or with motifs or inscriptions in English,
Latin, or any other European language). ..... None.
Bamboo, split ............................. None.
Braids, straw ........................ Italy, Japan.
Bristles, hog (except nondyed European hog
bristles) ................................ None.
Brushes, paint and hair pencil, and parts thereof,
containing hog bristles, more than 11/2 inches
in total length or more than 11/4 inches in
length out of the ferrule .................. None.
Carpet wool, Tibetan and Nepalese types ..... None.
Cashmere .................................. Iran.
Cassia ................................ Indonesia.
Cassia oil ................................. None.
Chinese type:
Art objects None.
Beverages ............................... None.
Drugs ................................... None.
Foodstuffs ............................... None.
Garments ............................... None.
Herbs .................................. None.
Ivory articles ............................ None.
Jade articles ............................. None.
Medicines, prepared ...................... None.
Rugs ................................... None.
Tea .................................. Formosa.
Cinnamic aldehyde ......................... None.
Cinnamon oil .................. Ceylon, Seychelles.
Cornmint oil .................... Argentina, Brazil.
Eggs, poultry:
Whole in the shell, preserved .............. None.
Dried (whole, albumen or yolks) .......... None.
Embroideries and embroidered articles of types
chiefly imported from China prior to Dec. 17,
1950 ................................... None.
Feathers and down, Asiatic, except peacock
feathers ................. Burma, India, Formosa,
Thailand, and those areas of
Viet-Nam which are not
under Communist control.
Firecrackers ............................... None.
Floor coverings, grass, straw and seagrass ..... Japan.
Fur skins: Goat and kid ........ Argentina, Ethiopia,
Iran, Iraq.
Kolinsky ....................... Republic of Korea.
Weasel .................................. Canada.
Gallnuts, except Aleppo gallnuts .............. None.
Ginger root, candied or otherwise prepared or
preserved ............................... None.
Hair, human, Asiatic ........................ None.
Hats, unfinished:
Manila hemp (abaca) ..................... None.
Palm leaf .................... Mexico, Philippines.
Straw ................ Brazil, Dominican Republic,
Italy, Japan, Philippines.
Jade stones, cut but not set, suitable for use in
jewelry ................................. None.
Menthol, natural and synthetic (except racemic) . . Brazil.
Musk ..................................... None,
Rutin ...................................... None.
Seagrass mats and squares ................... Japan.
Silk, tussah, muga, eri ...................... None.
Silk piece goods, tussah,. muga, eri ............ None.
Sophera Japonica ........................... None.
Tannic acid, from gallnuts other than Aleppo
gallnuts ................................. None.
Tung oil .............. Argentina, Brazil, Paraguay.
Walnuts, except black or pickled walnuts .. France, Iran,
Italy, Turkey.
Yak hair .................................. None.
(iv) any of the following supplies, however processed,
which are or were located in or transported from or through
Hong Kong, Macao, or any communist area listed in 0)
above:
Agar-agar.
Bamboo:
Bags, baskets and other manufactures, except furniture.
Poles and sticks.
Brocades and brocade articles.
Camphor, natural and synthetic.
Camphor oil, natural and synthetic.
Cane webbing.
Carpet wool.
Carpets.
Castor beans.
Castor oil.
Chinaware.
Citronella oil.
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Cotton manufactures.
Cotton waste.
Earthenware.
Embroideries and embroidered articles.
Feather manufactures.
Glass, sheet (window).
Graphite.
Hair, animal.
Hair nets of any material.
Handkerchiefs.
Hardwood manufactures, except bentwood furniture.
Hats, paper.
Hides, buffalo.
Honey.
Ivory manufactures.
Lace and lace articles.
Linen manufactures, except wearing apparel not
containing any lace, embroidery or brocade.
Marine products, edible.
Ores and metals:
Antimony.
Bismuth.
Mercury.
Molybdenum.
Tin.
Tungsten.
Peanut oil.
Peanuts.
Pigeons, frozen or otherwise prepared or preserved.
Poultry, frozen or otherwise prepared or preserved.
Ramie.
Rugs.
Seagrass manufactures.
Sesame oil.
Sesame seed.
Shoes, leather soled with non-leather uppers, except
ladies' high-heel shoes.
Silk:
Manufactures except Western style suits and
Indian saris.
Raw.
Waste.
Skins, deer and goat.
Stones, semiprecious.
Stones, semipresious, manufactures.
Straw manufactures.
Tapestries.
Tapioca.
Tapioca flour.
(b) The Contractor agrees to insert the provisions of this clause,
including this paragraph (b), in all subcontracts hereunder.
7-104.41 AUDIT (1974 APR) (AMENDED)
(a) General. The Contracting Officer or his representatives
shall have the audit and inspection rights described in the appli-
cable paragraphs (b), (c) and (d) below.
(b) Examination of Cost. If this is a cost reimbursement type,
incentive, time and materials, labor hour, or price redeterminable
contract, or any combination thereof, the Contractor shall main-
tain, and the Contracting Officer or his representatives shall have
the right to examine books, records, documents, and other evi-
dence and accounting procedures and practices, sufficient to re-
flect properly all direct and indirect costs of whatever nature
claimed to have been incurred and anticipated to be incurred for
the performance of this contract. Such right of examination
shall include inspection at all reasonable times of the Contractor's
plants, or such parts thereof, as may be engaged in the performance
of this contract.
(c) Cost or Pricing Data. If the Contractor submitted cost or
pricing data in connection with the pricing of this contract or any
change or modification thereto, unless such pricing was based on
adequate price competition, established catalog or market prices of
commercial items sold in substantial quantities to the general
public, or prices set by law or regulation, the Contracting Officer
or his representatives who are employees of the United States
Government shall have the right to examine all books, records,
documents and other data of the Contractor related to the negotia-
tion, pricing or performance of such contract, change or modifica-
tion, for the purpose of evaluating the accuracy, completeness and
currency of the cost or pricing data submitted. Additionally, in
the case of pricing any change or modification exceeding $100,000
to formally advertised contracts, the audit representative de-
signated by the Contracting Officer or his representatives who are
employees of the United States Government shall have such rights.
The right of examination shall extend to all documents necessary
to permit adequate evaluation of the cost or pricing. data sub-
mitted, along with the computations and projections used therein.
(d) Reports. If the Contractor is required to furnish Cost in-
formation Reports (CIR) or Contract Fund Status Reports
(CFSR), the Contracting Officer or his representatives shall have
the right to examine books, records, documents, and supporting
materials, for the purpose of evaluating (i) the effectiveness of
the Contractor's policies and procedures to produce data com-
patible with the objectives of these reports, and (ii) the data
reported.
(e) Availability. The materials described in (b), (c) and (d)
above shall be made available at the office of the Contractor, at
all reasonable times, for inspection, audit, or reproduction, until the
expiration of three years from the date of final payment under
this contract or such lesser time specified in Appendix M of the
Armed Services Procurement Regulation, and for such longer
period, if any, as is required by applicable statute, or by other
clauses of this contract, or by (1) and (2) below:
(1) If this contract is completely or partially terminated,
the records relating to the work terminated shall be made
available for a period of three years from the date of any
resulting final settlement.
(2) Records which relate to appeals under the "Disputes"
clause of this contract, or litigation or the settlement of claims
arising out of the performance of this contract, shall be
made available until such appeals, litigation, or claims have
been disposed of.
(f) The Contractor shall insert a clause containing all the.pro-
visions of this clause, including this paragraph (f), in all sub-
contracts exceeding $2,500 hereunder, except altered as necessary
for proper identification of the contracting parties and the Con-
tracting Officer under the Government prime contract.
ARTICLE 45
TELEPHONE SECURITY
(Applicable only if the Schedule of the contract specifies a
Security Classification.)
The Contractor is urged to bring to the attention of all of its
employees who are granted access to classified information perti-
nent to this contract the fact that telephones are not a secure means
of transmitting classified information. Hostile governments are
known to have a capability of monitoring telephone conversations,
especially those transmitted via microwave (assume all). Your
employees and/or consultants accordingly may not discuss classi-
fied information by telephone either with the Sponsor or others.
This clause should be included in any classified subcontracts
issued under this basic contract.
Approved For Release 2006/10/20: CIA-RDP89B00552R000700050008-9