GENERAL PROVISIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP61-00763A000100080203-1
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 27
• Document Creation Date: December 9, 2016
• Document Release Date: August 18, 2001
• Sequence Number: 203
• Publication Date: August 22, 1956
• Content Type: CONT

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DEFINITIONS ?? a a a? a a b? t ?? a a i o o a CHANGES
I SSPECTION. . ?. a. a a a a e a e b . e i e e 2
Ps AYIvENTS~a7T(1 ? a ? a o a? a a ,p o o e a o b a a O?? 2
~7S1t.3SIGNMEN OF,GLkIMS. ? ? ? ? f e 4 ? a a O a 4 ? 0 . ? o ? ? A.
EXCUSABLE DELAYS. ? . . ? 4
, . , ? . m c ? e
DISPUTES. e a a o o ? ? a a e u i 5
NOTICE AND ASSISTANCE REGARDINq PATENT INFRINGEIVENT ,, , . . 5
BUY PIERIGANQ ACT r 1 . ? e ? a 1 c 6
CO. VICT LABOR .. t e. a a a a . ? 6
El',N-1T-HOUR LAv-J OF 1912 6
W SH-F AT Y PUBLIC COi'JTRUCTS 1.CT ? i ? n . a ? b o . 7
i ONDISC.RIIN]INATION IN E11,IPLOY1VEN2': e ? . . m 1 y ? + . 7
OFFICIALS NOT TO R.Ei,EFI`T . . . . . . . . . . . ? . . . . . ? 8
COTENANT AGAINST COi~=LGENT FEES. . . . . . . . . . . . . . . 8
REPORT-ids OF, ROYALTIES> b d . i a e a.... o a. 8
TERNIIiv'ATION FOR CONVEivIENCE OF THE GOVERNIv NT . . e . a . , , 10
SUBMVTRACTS? . ? . . . . a . n e . n b . 15
RECORDS . e a ?. a? b ?.> e a ? a e e o o a 15
GRATUITIES, . . . . . . ? < a . a 17
GOUERJ2NENT FURNISHED PROPERTY. .. . . . . , . . . . . , ? . , 17
ENPLOYNENT OF ALIENS. . e . . . . . . . ? . . ? . a . . . 22
MILITARYr1 SECURITY REQUIREN.ENTS . . . . ? . . . . ? . . . . . . 22
COP Y.ELGHT r o a ? ? ? e ? o e ? ? o . e ? . . s . a . ? . o 0 23
FILIiiG OF PATENT APPLICATIONS a a . . . ? a . a a a . 24
NOTICE TO THE GOVERNMJNT OF LABOR DISPUTES. . . . a a . . . 24
AUTHORIZATION AND CONSENT > , , a a . . . . . . . , . . 25
ALTERATIONS IN CONTRACT a? a. e o a a a? a 25
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As used throughout this contract, the following terms shall
have the meanings set forth below:
(a) The term "Secretary" means the Secretary, the Under
Secretary, or any Assistant Secretary cf 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
(other than the Contracting Officer) authorized to act for the Secretary;
and the term "Department" means that component of the Government having
cognizance of this contract and represented by the Contracting Officer
executing this contract.
(b) The term "Contracting Officer" means thq person executing
this contract on behalf of the Government, and any other officer or
civilian employee who is a properly`desi.gnated Contracting Officer;
and the term includes, except as otherwise provided in this contract,
the authorized representative of a Qontracting Officer acting within
the limits of his authority.
(c) Except as otherwise provided in this contract, the term
"subcontracts" } includes purchase orders under this contract.
(d) The term "contract work" means all work to be performed
under this contract including any studies covering fundamental, theo-
retical, or experimental investigations; any extension of the inves-
tigative findings and theories of a pcientific and technical nature
into practical application; any tangible terms, hereinafter referred
to as supplies, if called for herein- furnished to the Government;
and any reports, data, computations,,plans, drawings, and specifica-
tions with respect to the foregoing.
(e) The term "direct labor," as used in the Payments clause,
shall be defined in the schedule.
The Contracting Officer may at any time, by a written order, within
the general scope of this contract, and without notice to any sureties,
make changes in (i) drawings, desi ns, or specifications, (ii) direct
the addition of work or services; (iii) make changes in method of
shipping or packing, and (iv) make changes in place of delivery. If
such changes require a change in the time of performance of the work
called for hereunder, the contract shall be modified in writing
accordingly. The hourly rate set forth in the schedule shall not be
adjusted by reason of any change ordered under this clause.
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3. INSPECTION
(a) ALL material and workmanship shall be subject to inspection
and test by represer: atives of the Government. For this purpose, the
Contractor snail allow, at all reasonable times, inspectors and other
Government personnel free access to the plant and operations and shall
furnish such facilities as may be required for the work. The Contractor
shall inform the inspector when t;fie work is ready for inspection, The
Government representative shall hare the right to (i) require the
replacement of parts which are not`in accordance with applicable speci--
fications, and (ii) require the correction of defects.
(b) The Contractor shall provide and maintain an inspection
system acceptable to the Government covering the inspection of the
supplies and services furnished undor this contract. Records of inspection work by the Contractor shall be kept complete and available
to the Government during the perforrance of the contract.
(c) The Contractor agrees that it will employ only qualified
and competent employees in the performance of this contract and that
the so-c Vices performed will conform to the highest professional
standards for the work invblvedb
(d) Prior to final acceptahle by the Government, any correction
of defects in supplies or services, or replacement Of material to
make the item conform to contract requirements, which dbrrection or
replacement is made necessary by inferior workmanship or materials,
shall be at no cost to the Government.
(e) Final acceptance by the Government shall be conclusive
except as regards latent defects, ,,_aud, or such gross mistakes as
amount to fraud, The Contractor s.h ll, before or after final ac-
ceptance, remedy defects or failures due to such causes at no cost
to the Government.
The Contractor shall be paid as follows upon the submission of
properly certified invoices or vouchers approved by the Contracting
Officer:
-(a)-fie ate ,
t I i ne wmonni,is-_computecr - - ro riatr-~tte rat,-
Or rates set forth in the schedule to the number k4ct 1u or ours
performed, which rates shall include , overhead, general and ad--
ministrative expense and pr ractional parts of an hour shall
be payable on a pro basis, The Contractor will substantiate
vouchers by once of actual, payment and by individual daily job
- ' Mad& r;r,n actor c s payroll intervals,
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by_ the Cont: cti ig -Officer if conditions 8o-warrant-
(ii) Not withstanding the provisions of subparagraph (i) he.r. eof,
the Contracting Officer, as provided in the schedule, shall withhold
payment of certain amounts duo under this contract. Such amounts shall
become payable upon completion of this contract.
(iii) Unless provisions of the schedule hereof otherwise
specify, the hourly rate or rates set forth in the schedule shall
not be varied by virtue of the Contractor haiathg performed work on an
overtime basis. If the schedule., reviles rates for overtime, the
premium portion of those rates wil not be reimbursable unless the over-
time is approved in writing by the Contracting Officer.
W" a_4Inciuding Suk contracts)
(i of--direct materials-shall be determi 3.
by the Contracting Officer in accardance with Fait r i ~V, of
the Armed Services Procurement Regulatio ontractor shall
support all material costs cl y submitting paid invoices or
storeroom requisi ' . irect materials as referenced by this clause
are defin those materials which enter directly into the end
pro or which are used or conytimod directly in connection with
ing of such produet.
(.i) The cost of subcontracts which are authorized pursuant
to the clause hereof entitled "Subcontracts" shell be reimbursable
costs hereunder.
(iii) The Contractor shall', to the extent of its ability,
procure materials at the most adv4:ntageous prices available, with
due regard to securing prompt delivery of satisfactory materials,
take all cash and trade discounts, rebates, allowances, credits,
salvage, commissions, and bonifiQations, and when unable to take
advantage of such benefits it shall promptly notify the Contracting
Officer to that effect and the reason therefor. Credit shall be
given to the Government for cash and trade discounts, rebates,
allowances, credits, salvage, the value of resulting scrap, when
the amount of such scrap is appreciable, commissions and bon -
fications which have accrued to the benefit of the Contractor or
would have so accrued except for the fault or neglect of the Con-
tractor. Such benefits lost through no fault or neglect on the
part of the Contractor or lost through fault of the Government,
shall not be deducted from gross costs.
(c) As of the date of execution of this contract, there has
been allotted for it the total sum set forth in the schedule. This
sum may be increased from time to time by the Government solely at
its discretion, and the contract shall be amended accordingly. Not-
withstanding any other provisions of this contract, the Contractor shall
not be obligated to perform any services, pursuant hereto, the
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aggregate price of which when added to the aggregate price of all
services theretofore ?-,_1rnished pursuant here x) would exceed said
sumrt, If at any time the Contractor considers it likely that the
aggregate amount set forth in the schedule may be exceeded within
45 days, the Contractor will so notify the Contracting Officer and
the parties may thereupon enter into negotiations for an amendment
to or .modification of this contr. &ct, as may be appropriate, AnytbJ.n.g
in this contract to the contrary notw? tlastanding, the Government shall
not be obligated to pay to the Contractor any amount in excess of the
sum allotted for this contract.
5, ASSIGNIXF;NT .01 CLAIMS
(a) Pursuant to the provisions of the Assignment of Claims
Act of 1940 as amended (31 U, S. Code 2039 41 U. S. Code 15), if
this contract provides for payments aggregating ;x1,000 or more,
claims for moneys due or to becoLie due to the Contractor from the
Government under this contract may be assigned to a bank, trust
company., or other financing institution, including any Federal
lending agency, and a.iay thereafter be further assigned and re-
assigned to any such institution, Any such assignment or re-
assignment shall cover all amounts payable under this contract
and not already paid, and shall not be made to more than one
party, except that any such assignment or reassignment may be
made to one party or agent or tr.stoo for two or more parties
participating in such financing. Notwithstanding any other
provision of this contract, payment to an assignee of any moneys
duo or to become due under this contract shall not, to the extent
provided in said Act as amended, be subject to reduction or set-off,
(b) In no event shall copies of this contract or of any plans,
specifications, or other similar-. documents relating to work under
this contract, if marked "TOP SECRET," "SECRET," "CONFIDENTIAL,"
be furnished to any assignee of any claim arising under this con-
tract or to any other person not entitled to receive the same;
PROVIDED, That a copy or any part or all of this contract so
marked may be furnished, or any information contained therein
may be disclosed, to such assignee upon the prior written author-
ization of the Contracting Officer.
(c) The Contractor shall obtain the written authorization of
the Contracting Officer prior to the assignment of any rights under
this contract,
6. EXCUSABLE DELAYS
The Contractor shall not be in default by reason of any failure
in performance of this contract in accordance with its terms (including
any failure by the Contractor to make progress in the prosecution of
the work hereunder which endangers such performance) if such failure
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arises out of causes beyond the control and without the fault or
negligence of the Contractor. Such c4use include, but are not
restricted to: acts o. God or of-the public enemy; acts of the
Government; fires; floods; epidemics; quarantine restrictions;
strikes; freight embargoes; tnusu.ally 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 ob-
tainable from other sources and shall have ordered the Contractor
in writing to procure such services or supplies from such other
sources, and the Contractor shall have failed reasonably to comply
with such order. Upon request of the Contractor, the 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 Goverment under the clauc.e
hereof entitled "Termination."
Except as otherwise provided in this contract, any dispute
concerning a question of fact arising under this contract which is
not d!sposed of by agreement shall be decided by the Contracting
Officer, who shall reduce his decision to writing and mail or
otherwise furnish a copy thereof to the Contractor. Within thirty
(30) days froti the date of receipt of such copy, the Contractor may
appeal by mailing or otherwise furnishing to the Contracting Officer
a written appeal addressed to the Secretary, and the decision of the
Secretary or his duly authorized representative for the hearing o
such appeals shall, unless deterr..nod by a court of competent juris-
diction to have been fraudulent or capricious or arbitrary or so
grossly erroneous as necessarily t4 imply bad faith, or not supported
by substantial evidence, be final and conclusive; PROVIDED,. That, if
no such appeal is taken, the decision of the Contracting Officer shall
be final and conclusive. In connection with any appeal proceeding
under this clause, the Contractor shall be afforded an opportunity
to be heard and to offer evidence in support of its appeal. Pend-
ing final decision of a dispute hereunder., the Contractor shall pro-
ceed diligently with the performance of the contract and in accord-
ance with the Contracting Officerls decision.
8. NOTICE ADD ASSISTAACE REGARDING PATENT INFRINGEIENT
The provisions of this clause shall be applicable only if the
amount of this contract is in excess of -0,0OO.
(a) The Contractor shall report to the Contracting Officer,
promptly and in reasonable written detail, each notice or claim of
patent infringement based on the performance of this contract of which
the Contractor has knowledge.
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(b) In the event of litigation against the Government on
account of any claim of patent infringement rising out of the pora-
forraaace of this contract or out of the uao of any supplies furnished
or work or services performed herotlmder, the Contractor shall furnish
to the Government, upon request, al .evidence and information in
possdssion of the Contractor pert. n ng to such litigation. Such
evidence and information shall be furnished at toe expense of the
Government except in those cases .n which the Contractor has agreed
to indemnify the Government against the claim being assorted.
9. BUY AMERICAN ACT
The Contractor agrees that Q ere will be delivered under this
contract only such unmanufactured-articles, materials and supplies
(which term "articles, materials and supplies" is hereinafter re-
ferred to in this clause as "supplies") as have been mined or pro-
duced in the United States, and only such manufactured supplies as
have been manufactured in the United States substantially all from
supplies mined, produced or manufactured, as the case may be, in
the United States. Pursuant to the Buy Anerical Act (41 Un S.
Code l0a-d), the foregoing provision shall not apply (i) with
respect to supplies excepted by tale Secretary from the applica-
tion 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 de-
termined by the Secretary or his duly authorized representative
not to be mined, pre dhcod, or manufactured, as the case may be,
in the United States in sufficient and reasonably available
commercial quantities and of a satisfactory quality, or (iv)
with respect to such supplies froz.a``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 author-
ized representative not to be mi.6d, produced, or manufactured,
as the case may be, in the United States in sufficient and rea-
sonably available commercial quantities and of a satisfactory
quality: PROVIDED, That this exception (iv) shall not permit
delivery of supplies manufactured outside the United States if
such supplies are manufactured in the United States in suffi-
cent and reasonably available commercial quantities and of a
satisfactory quality.
10, COJNVICT LABOR
In connection with the performance of work under this contract,
the Contractor agrees not to employ any person undergoing sentence
of imprisonment at hard labor.
11. EIGHT-HOUR LAW OF 1912
This contract, to the extent that it is of a character specified
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in the Eight-Hour Law of 193.2 as amended (40 U, S. Code 324 -326) and
is not covered by the Walsh H.eajey~~ 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 provi-
sions and exceptions of said Law:
No laborer" or mechanic doing, any part of the work contemplated
by this contract, in the employ of the Contractor shall be required
.-or parzLttted to work more than eight hours in any one c J_endar day
upon such work, excerpt upon the condition that compensation is paid
to such laborer or mechanic in accordance with the provisions of
this clause. The wages of every such laborer and mechanic employed
by the Contractor shall be computed on a basic day rate of eight
hours per day; and work in excess of eight hours per day is pcr.-
t.dtted only upon the condition that every such laborer and 1:~echa,:.,c,
shall be compensated for all hour' worked in excess of eight hours
per day at not less than one and one-half times the basic rate of
pay. For each violation of the r0quirerlents of this clause a
penalty of five dollars shall be imposed upon the Contractor 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 accord-
ance with this clause;, and all penalties thus imposed shall be
withheld for the use dnd benefit of the Government,
12, 1ALSH-HEJUEY PUBLIC CONTRACTS ACT
If this contract is for the manufacture or furnishing of
materials, supplies, articles or Qquipment in an amount which
exceeds or may exceed :;1.09000 and is otherwise subject to the
Walsh-Healey Public Contracts Act as amended (41 U. S. Code
35-45), there are hereby incorporated by reference all repre-
sentations 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 inter-
pretations of the Secretary of Labor which are now or may hereafter
be in effect, except that the Contractor shall not be required to in-
elude this clause in subcontracts issued hereunder when the inclusion
of this clause in a subcontract would jeopardize or conflict with
the security considerations established in connection with this
contract.
13, NONDISCRIMINATION IN EMPLOYMENT
(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 termina-
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tion; rates of pay or other forms of compensation; and selection for
training, including apprenticeshjp, The Contractor agrees to post
hereafter in conspicuous places, ayailable for employees and appli.-
cants for employment,, notices to,yp ,provided by the Contracting
Officer setting forth the provisions of the nondiscrimination clause.
(b) The Contractor further agrees to insert the foregoing
provision in subcontracts issued hereunder, except subcontracts for
standard commercial supplies or raw laaterials, and except as in-
sertion of the foregoing provision in a subcontract would jeopardize
or conflict with the security consjderations established in connec-
tion with this contract.
OFFICIALS NOT TO BENEFIT
No member of or delegate to Congress,. or resident commissioner,
shall be admitted to any share or part of this contract, or to any
benefit that may arise therefrom; but this provision shall not be
construed to extend to this contract if made with a corporation for
its general benefit.
15, COVENANT AGAINST CONTINGENT FEES
The Contractor warrants that no person or selling agency has
been employed or retained to soligjt or secure this contract upon
an agreeaent or understanding for i commission, percentage, broker-
age, or contingent fee, excepting bona fide employees or bona fide
established connercial or selling; agencies maintained by the Contractor
for the purpose of securing business. For breach or violation
of this warranty the Government shall have the right to annul
this contract without liability op in its discretion to deduct
from the contract price or conside ,tion the full amount of such
commission, percentage, brokerage or contingent fee.
26, REPORTING OF ROYALTIES
The provisions of this clause shall be applicable only if
the amount of the contract is in excess of 40,000.
(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
havo 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 45O 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
W250):
(1) The name and address of each licensor to whom royalties
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in excess of 050 have boon paid or are to be pa.-i_d,
(2) The patent numbers pa Ent application serial numbers
(with filing dates), or other identification of the
basis for such royaltJ,es,
(3) The manner of computing the 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 royal-
ties on each such unit or process; PROVIDED that if the
royalties cannot be competed in terms of units or dollars
and cents value, then other data showing the manner in
which the Contractor computes the royalties.
(b) In lieu of furnishing 4-report under paragraph (a), the
Contractor may furnish a single, consolidated report for each
accounting period of the Contractor during which the Contractor
has contracts with the Government, provided the Contractor has
requested and obtained the prior Written approval of the Contracting
Officer. Such consolidated report shall be furnished, when the
furnishing thereof has been approved, in the number of copies as
approved, as soon as practicable after the close of the accounting
period covered by the report, Such consolidated report shall be
made in accordance with Contractofts established accounting practice
and shall include) for the accounting period, the total amount of
royalties accruing to each licensor at a rate in excess of l,OOO
per annvu on the Contractorts over-all business together with (i)
the name and address of each such licensor, (ii) the patent numbers,
patent application serial numbers (with filing dates), or other
identification of the basis for s' oh royalties, (iii) a brief
description of the subject matter 6f the license under which
royalties are charged, (iv) the percentage rate or unit w.lount,
or if the royalties do not accrue by rate or unit amount, such
other data showing the manner by which the royalties accrue to
licensor, and (v) an estimate or approximation (without detailed
accounting) of the portion of such royalties that may be attrib-
ti?:table to Government contracts, The Contractor shall, if requested
by the Government, furnish at Government expense a more detailed
allocation of such royalty pigments attributable to Government
contracts,
(c) In the event that the Contractor requests written approval
to furnish consolidated reports under paragraph (b) above, the Con-
tracting 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 in-
formation.. 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. percent (80%) of the amount of
this contract, as from ti~:no to time amended, further payment shall
be withheld until a reserve of either (i) ten percent (10%) of
such amount or (ii) ;,5,000, whichever is loss, shall have been
set aside, such reserve or the balance thereof to be retained
until the Contractor shall have furnished to the Contracting
Officer the report called for by paragraph (a) hereof or the
copy of the letter approving the Contractorrs request to furnish
the report under paragraph (b); PROVIDED that no amount shall
continue to be withheld from payment for the causes specified in
this paragraph (d) if the Contracting Officer shall find that the
Contractor has not been furnished a letter as required by paragraph
(c) within a reasonable time aw,ter making written request to sub~.)it
a single, consolidated report under the provisions of paragraph (b)
of this clause; and PROVIDED FURTHER that the Contracting Officer
may, in his discretion, order payment to be withhold in the amount
and manner above provided if the report called for by paragraph (a)
is unsatisfactory or if the report called for by paragraph (b) is
due but has not been received, orif received, is found to be unsat-
isfactory. No amount shall be withheld under this 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.
(b) The Contractor agrees that it will exert all reasonable
effort to advise the Contracting 7fficer, at the time of
delivering any copyrightable or copyrighted work furnished
under this contract, of any adversely held copyrighted or
copyrightablc material incorporated in any such work and of
any invasion of the right of privacy therein contained,
(c) The Contractor agrees to report to the Contracting Officer,
promptly and in reasonable written detail, any notice or claim
of copyright infringement received by the Contractor with re-
spect to any material delivered under this contract.
17 , TER1v2NATION FOR CONVENIENCE OF THE GOVERNMENT
(a) The performance of work under this contract may be
terminated by the Government in accordance with this clause in
whole, or from time to ti o in part, (1) whenever the Contractor
shall default in performance of this contract in accordance with
its tends (including in the torn. default any such failure by the
Contractor to make progress in the prosecution of the work here-
under as endangers such performance), and shall fail to cure such
default within a period of 10 days (or such longer period as the
Contracting Officer may allow) after receipt from the Contracting
Officer of a notice specifying the default, or (2) whenever for
any reason the Contracting Officer shall determine that such
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termination is in the best intorgpts of the Governriento Any such
termination shall be effected by delivery to the Contractor of a
Notice of Termination specifying i hethcr 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 TQrmination of this contract for
default under (1) above, it is determined that the Contractor's
failure to perform or to make progress in performance is due to
causes beyond the control and without the fault or negligence of
the Contractor pursuant to the provisions of the clause of this
contract entitled "Excusable Delays," the Notice of Termination
shall be deemed to have been issued under (2) above, and the rights
and obligations of the parties herfto shall in such event be governed
accordingly,
(b) After receipt of a Notice of Termination and except as
otherwise directed by the Contracting Officer, the Contractor shall
(1) stop work under the contract on the date and to extent specified
in the Notice of Termination; (2) place no further orders or sub--
contracts for materials, services, or facilities except as may be
necessary for completion of such portion of the work under the contract
as is not terminated; (3) terminate all orders and subcontracts to
the extent that they relate to thee' 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, and interest of the Contractor' under the orders or
subcontracts so terr:Linated; (5) willh the approval or ratification of
the Contracting Officer, which approval or ratification shall be final
and conclusive for all the purposed of this clause, settle all out-
standing liabilities and all claim;1 arising out of such termination of
orders and subcontracts, the cost off' which would be reimbursable, in
whole or in part, in accordance with the provisions of this contract;
(6) transfer title (to the extent that title has not already been
transferred) and, in the manner, to the extent, and at the times
directed by the Contracting Officer, deliver to the Government (i)
the fabricated or unfabricated parts, work in process, completed
work, supplies, and other material produced as a part of, or acquired
in respect of the performance of, the work terminated by the Notice of
Termination; (ii) the completed or partially completed plans, drawings,
information, and other property which, if the contract had been corl-
pleted, would be required to be furnished to the Government; and (iii)
the ji.s, dies, fixtures, and other special tools and tooling acquired
or manufactured for the performance of this contract for the cost of
which the Contractor has been or will be reimbursed under this con-
tract; (7) use its best efforts to sell in the rianzier, at the tiny ,
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?
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and (ii) l.'ay acquire any such property under the conditions prescribed
by and at C. price or prices approvod by the Contracting Officer: AND
PROVIDED FURTI R, That the proceeds, of any such transfer or disposition
shall be applied in reduction og' any payments to be made by the
Government to the Contractor under this contract or shall otherwise
be credited to the price or cost of work covered by this contract or
paid in such manner as the Contracting Officer may direct; (8) complete
porformance of such part of the work as shall not have boon terminated
by the Notice of Termination; and (9) take such action as may be
necessary, or as the Contracting Officer may direct, for the protection
and preservation of the property ,related to this contract which is in
the possession of the Contractor and in which the Government has or
may acquire an interest, The Contractor shall proceed immediately with
the performance of the above obligations notwithstanding any delay 3.n
determining or adjusting any ar.iouxit reimbursable under the provi.,s:.ons
of this clause. At any time afte? expiration of the plant clearance
period, as defined in Section VIII, Armed Services Procurement Re ~_at +,.o..u
as it may be amended from time to time, the Contractor may submit to the
Contracting Officer a list, certified as to quantity and quality, of
any or all items of termination inventory not previously disposed of,
exclusive of items the dispositio'+z of which has been directed or
authorized by the Contracting Officer, ard may request the Government
to remove such items or enter into a storage agreement covering tbom,
Not later than fifteen (15) days theioafter, the Government will accept
title to such items and remove them or enter into a storage agreement
covering the sane, provided that the list subr:rittdd shall be subject to
verification by the Contracting Oficer 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 nocossary adjustment to correct the
list as submitted shall be made prior to final settlement,
(c) After receipt of a Notice of Termination, the Contractor
shall submit to the Contracting Officer its termination claii.m, in
the fora and with the certification prescribed by the Contracting
Officer. Such claim shall be submitted promptly but in no event
later than 2 years from the effective date of teri:rination, unless one
or more extensions in writing are granted by the Contracting officer
upon request of the Contractor made in writing within such 2-year
period or authorized extension thereof. However, if the Contracting
Officer determines that the facts justify such action, he may receive
and act upon any such termination claim at any tilde after such 2-year
period or any extension thereof. Upon failure of the Contractor to
submit its termination claim within the tine allowed, the Contracting
Officer may determine on the basis of information available to him, the
amount if any due to the Contractor by reason of the termination Qnd
shall thereupon pay to the Contractor the amount so determined.
(d) Subject to the provisions of paragraph (c), the Contractor
and the Contracting Officer may agree upon the whole or any part of
the amount or amounts to be paid to the Contractor by reason of the
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total or partial termination of work pursuant to this clause which
anount or amounts may include a - ?e .sonablo allowance for profit on
work done. The contract shell be amended accordingly, and the Con-
tractor shall be paicl the agreed a.r:iount,
(e) In the event of the failure of the Contractor and the Con-
tracting Officer to agree in whole or in part, as provided in paragraph
(d) above, as to the amounts to bo paid to the Contractor in connection
with the termination of work pursuant to this clause, the Contracting
Officer shell determine on the basis of information available to hx.',
the ca_rount, if any, due to the Contractor by reason of the termination
and shall pay to the Contractor the amount determined as follows:
(1) If the termination of the contract is for the convenience of
the Government :
(i.) There shall be included for direct labor hours (as defined
in the Schedule of the contract) an amount which shall be determin:d
by multiplying the ntuober of direct labor hours expended prior and up
to the effective date of termination by the hourly rate or rates set
forth in the Schedule less any hourly rate payments theretofore made
to the Contractor.
(ii) There shall be included therein all costs of material
reimbursable in accordance with this contract not previously paid to
the Contractor for the performance of this contract prior to the offecive
date of the Notice of TerUnation,
(iii) There shall be included therein the reasonable costs of
settle lent, including accounting,, legal, clerical, and other o-, penses
reasonably necessary for the preparation of settliaent claims and
supporting data with respect to they terminated portion of the contract
and for the termination and settlenont of subcontracts thereunder,
together with reasonable storage, transportation, and other costs
incurred in connection with the protection or u:lisposition of terr.-dna~tion
inventory.
(2) If the termination of the contract is for the default of the
Contractor:
(i) There shall be included for all direct labor hours (as
defined in the Schedule of the contract) an amount which shall be
determined by multiplying the number of direct labor hours expended
prior and up to the effective date of termination by the hourly rate
or rates set forth in the Schedule less the profit factor contained
therein as indicated in the Schedule and less any hourly rate pay-
monts theretofore made,
(ii) There shall be included therein such costs as are set
forth in subparagraphs (1) (ii) and (iii) of this paragraph (o) :
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PROVIDED, HO +]EVEiR, That there shall not be included any ai:lourit8 for the
preparation of the Contractorrs Settlement Proposal.
(3) If the amount determined under subparagraphs (1) and (2),
above, is less than the total payi:cents theretofore made to the Con-
tractor, the Contractor shall repay' the excess amount to the Governm.en,,,
(f) The Contractor shall have the right of appeal, under the
clause of this contract entitled "Disputes," from any determination
Linde by the Contracting Officer under paragraphs (c) or (e) above,
except that if the Contractor has.failed to submit its claim within
the time provided in paragraph (c) above, and has failed to request
extension of such time, it shall have no such right of appeal. In
any case where the Contracting Officer has made a dotermination of the
amount due under paragraph (c) or e) above, the Governi.ient s r.all. pay
to the Contractor the following: `i) if there is no right of appeal
hereunder or if no timely appeal has been taken, the amount so do-M
teri:Tined by tho Contracting Officer, or (ii) if an appeal has been
taken, the amount finally detori-iined on such appeal.
() In arriving at the amount due to the Contractor under this
clause there shall be deducted (1) all unliquidated advance or other
unligtnida:tod payments theretofore made to the Contractor, (2) any
claim which the Government may have against the Contractor in connection.
with this contract, and (3) the adroed price for' or the proceeds of
sale of any materials, supplies, or other things acquired by the Con-
tractor 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
contract relating to hourly rates which are payable with respect to
the work under the continued portion of the contract shall be equitabl..y
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 tine, under such terms and
conditions as it may prescribe, rake 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
Contractile; Officer the aLgrogato of such payments shall be within the
amount to which the Contractor will be entitled hereunder, If the
total of such payments is in excess of the amount finally determined
-be be due under this clause, such excess shall be payable by the Con-
tractor to the Government upon demand, together with interest coi:-
putod at the rate of 6 percent per annur.i, for the period froi:l the
date such excess is repaid to the Government; PROVIDED, HOWEVER, That
no interest shall be charged with respect to any such excess payment
attributable to a reduction in the Contractoris claim by reason of
retention or other disposition of termination inventory until 10 days
after the date of such retention or disposition,
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(j) Unless otherwise provided for in this contract, or by
applicable statute, the Contractor from the effective date of
termination and for a period of 0years after final settlement under
this contract shall preserve and Make available to the Government
at all reasonable tines at the office of the Contractor, but without
direct charge to the Government, all its books, records, documents,
and other evidence bearing on the cost and expenses of the Contractor
under this contract and relating to the work terminated hereunder, or,
to the extent approved by the Contracting Officer, photographs,
microphotographs, or other authentic reproductions thereof.
18. SUBCONTRACTS
(a) No contracts shall be made by the Contractor for the
furnishing of any of the work herein contracted for without the
written approval of the Contracting;Offi6or. For the purposes of
this clause, purchase of raw uateri' 1. or commercial stock items shall
not be considered work.
(b) The Contractor agrees that no subcontract Flaced under this
contract shall provide for payment on a cost-plus-'percentage-of-cost
basis.
(a) (1) The Contractor agrees to maintain books; records,
documents and other evidence pertaining to the costs and expenses of
this contract (hereinafter collectively called the "records") to the
extent and in such detail as will properly reflect all net costs,
direct and indirect, of labor, nateliois, equipment, supplies and
services, and other costs and expenes of whatever nature for which
reimbursement is claimed under the provisions of this contract, The
Contrautorrs accounting procedures;:Ond practices shall be subject to
the approval of the Contracting Officer;. PROVIDED, however, that no
material change will be required to be made in the Contractorfs
accounting procedures and practices if they conform to generally
accepted accounting practices and if the costs properly applicable to
this contract are readily ascertainable therefrom,
(2) The Contractor agrees to u:lake available at the office
of the Contractor at all reasonable times during the period set
forth in subpara:,reph (4) below any of the records for inspection,
audit or reproduction by the Cor_Ttroller of the Contracting
Government agency or his authorized representatives.
(3) In the event the Comptroller of the Contracting
Government agency or any of his duly authorized representatives
determines that his audit of the amounts reimbursed under this
contract as transportation charges will be wade at a place other
than the office of the Contractor, the Contractor agrees to deliver,
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with the reii:mburserient voucher covering such charCes or as may be
otherwise specified within two years after reimbursement of charCes
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 nay be
required by the Comptroller of the Contracting Governmont agency
or any of his duly authorized reproscnt,--ivesry
(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 tiz.ie is provided by applicable statute)
from the date of the voucher or invoice subtiittecl by the Contractor
after the completion of the work wider the contract and designated
by the Contractor as the "coilplet.on voucher" or "completion '.nVo..,OoH
or, in the event this Contract has been completely toruinated,, from
the date of the termination settlement agreement; PROVIDED, however,
that records which relate to (A) appeals under the clause of this
contract entitled "Disputes," (B)'litigation or the settlement of
claims arising out of the performance of this contract, or (C) costs
or expenses of.the contract as'to which exception has been taken by
the Comptroller of the Contractint, Government agency or any of his
duly authorized representatives, skull be retained by the Contractor
until such appeals, litigation clra,i:ms, or exceptions have been d_is-
posed of, but in no event for less than the six-year period mentioned
above.
(5) Except for documentary evidence delivered pursuant to
subparagraph (3) tbovo, and the records described in the proviso of
subparagraph (4) above, the Contractor may in fulfillment of its
oblibation. to retain its records as required by this clause, sub-
stitute photog;.raphs, micro-photo??..raphs or other authentic reproduc-
tions of such records, after the expiration of two years following
the last day of the month of reimburseneiht to the Contractor of the
invoice or voucher to which such records relate, unless a shorter
period is authorized by the Contracting Officer with the concurrence
of the Comptroller of the Contracting Government agency or his duly
authorized representative.
(6) The provisions of this paragraph (a), including this
subparagraph (6), shall be applicable to and included in each sub-
contract hereunder which is on a cost, cost-plus-a-.fixed-.fee, time--
and--material or labor-hour basis.
(b) The Contractor further agrees to include in each of his
subcontracts hereunder, other than those sot forth in subparagraph
(a) (6) above., a provision to the effect that the subcontractor
agrees that the Comptroller of the Contracting Government agency or any
of his duly authorized representatives, shall, until the expiration:
of three yetis after final payment under the subcontract, have access
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to and the right to exaj::d.ne any directly pertinent books, documents,
papers, and records of such subcontractor involving transactions
related to the subcontract, The teri.1 "subcontract," as used in this
paragraph (b) only, excludes (i) purchase orders not exceeding 4p1,000
and (ii) subcontracts or purchase dryers for public utility services
at rates established for uniform appJ,icability to the genercl public.
20, GRATUITIES
(a) The Governs:lent may, by written notice to the Contractor,
terminate the right of tiie Contractor to proceed under this
contract if it is found, after notice and hearin`) by the
Secretary or his duly authorized representative) that grat-
uities (in the fora of entertainment) gifts) or otherwise)
were offered or given by the Contractor, or any agent or
representative of the Contractor, to any officer or employee
of the Government with a view tower r'd securing a contract or
securing favorable treatment with respect to the atarding or
amending, or the rucking of any detrrainations with respect to
the performance of such contract; PROVIDED, That the existence
of the facts upon which the Secretary of his duly authorized
representative makes such findings shall be in issue and may
be re-~~iewed in any competent court,
(b) In the event this contract is terminated as provided in
paragraph (a) hereof, the Governme~:lt shall be entitled (i) to
pursue the sane remedies against the Contractor as it could
pursue in the event of a breach of. the contract by the Con-,
tractor, and (ii) as a penalty in