(Sanitized)COST-REIMBURSEMENT BASIC AGREEMENT WITH HUGHES AIRCRAFT COMPANY
Document Type:
Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP66B00728R000400090018-8
Release Decision:
RIPPUB
Original Classification:
K
Document Page Count:
55
Document Creation Date:
December 12, 2016
Document Release Date:
March 29, 2002
Sequence Number:
18
Case Number:
Publication Date:
September 6, 1961
Content Type:
CONT
File:
Attachment | Size |
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CIA-RDP66B00728R000400090018-8.pdf | 4.25 MB |
Body:
TATINTL
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SECTION A
5
6
7
8
9
10
11
-12
13
14
15
16
17
-18
19
20
'21
22
23
24
25
26.,
27
28
'9
j0
31
32
33
34
35
36
.37
38
39
40
41
Definitions
Changes
Limitation of Cost
Allowable Cost, Fixed Fee,
Inspection of Supplies and
Records
Subcontracts
Utilization of
Utilization of
Termination
and Payment
Correction of Defects
Small Business Concerns
Concerns in-Labor Surplus Areas
Excusable Delays
Disputes
Buy American Act
Government Property
Insurance-Liability To Third Persons
Military Security Requirements
Authorization and Consent
Notice and Assistance Regarding Patent
Filing of Patent Applications
Convict Labor
Walsh-Healey Public Contracts Act
Infringement
Eight-Hour Law of 1912 -Overtime Compensation
Payment for Overtime and Shift Premiums
Nondiscrimination in Employment
Notice to the Government of Labor Disputes
Priorities, Allocations, and Allotments
Renegotiation
Assignment of Claims
Officials not to Benefit
Covenant Against Contingent
Gratuities
Shipments
Delay in Delivery of Data
Superseding Specifications
Quality Control System
Government Bill of Lading
Financial Management Report
Limitation on Withholding of
Allowable Cost
Variation in Quantity
Negotiated Overhead Rates
Payments
CT TNT
Page
1
1
2,3
3
4
4,5
5
5
5,6,7
7
7
7,8
8,9,10
10
10,11
11
11
11
12
12
12
12
12,12A
12A
13
13
13
13
13
13
14
14
14
15
15
15
15
15
16
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INDEX
SECTION B
Clause
P
B,1
Patent Rights
18,19
B.2
Patent Indemnity (Predetermined)
20
B,3
Patent Indemnity
21
B,4
Data
22
B.5
Data
23
B.6
Data
24
B.7
Authorization and Consent
25
B.8
Excess Profit
25
B.9
Use of Government Facilities on a 2+o-Charge Basis
26
8.10
Use of Government Facilities on a No-Charge Basis
27
8.11
Bailment
28
B.12
Bailment
28
B.13
Bailment (For Use in Letter Contracts Only)
28
B.14
Flight Risks
29
B.15
Special Test Equipment
30
B.16
Special Tooling
30
8.17
Parts and Components
30
B.18
Ammunition and Explosive Material Safety
31
B.19
Changes to Make or Buy Program
31
_-B.20
Safety and Accident Prevention
31
-.- B,21
Notice of Radioactive Materials
32
B.22
Preparation of Dnagerous Materials for S
hipment
32
B.23
Current Reimbursement (For Use in Letter
Contracts Only)
33
B.24
Soviet-Controlled Areas
33
B.25
Allowable Cost, Incentive Fee, and Payme
nt
34,35
B.26
Modification of Clause A.6(a)(4)
36
B.27
Inspection
36,37
B.28
Limitation of Government's Obligation
38,39
B.29
Defense Subcontracting Small Business et
c,-
40
B.30
Special Provisions Relating to Air Force
Equipment
Upon Which Work is to be Performed
41
B.31
Material Inspection and Receiving Report
42
B.32
Furnishing of Pricing Information
42
B.33
Stop Work Order
.43
B.34
Program Progress Reporting Requirements
4-4
B.35
Duty-Free Entry - Canadian Supplies
4
B.36
Accelerated Delivery
SECTION C
Latter Contract Provisions (Cost-Reimbursement)
46,47
SECTION D
Provisions for Research and Development Contracts
48,49
SECTION E
Provisions for Maintenance, Overhaul and Modification Contracts 50,51
_C_ STATINTL
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(ASPR 7-203.5) (60 Ed.) I I STATINTL
contract entitled "Government Property."
(B) claims, together with reasonable expenses incidental thereto, based upon liabilities of the Contrac-
tor to third parties arising out of the performance of this contract; r.ovided, that such claims are not known to
the Contractor on the date of the execution of the release; and provided further that the Contractor gives notice of
such claims in writing to the Contracting Officer not more than six (6) years after the date of the release or the
date of any notice to the Contractor that the Government is prepared to make final payment, whichever is earlier;
and
(C) claims for reimbursement of costs (other than expenses of the Contractor by reason of his indemni-
fication of the Government against patent liability), including reasonable expenses incidental thereto, incurred
by the Contractor under the provisions of this contract relating to patents.
(g) Any cost incurred by the Contractor under the terms of this contract which would constitute allowable
cost under the provisions of this clause shall be included in determining the amount payable under this contract,
notwithstanding any provisions contained in the specifications or other documents incorporated in this contract by
reference, designating services to be performed or materials to be furnished by the Contractor at his expense or
without cost to the Government.
(ASPR 7-203.4(a) (60 Ed.), revised 1 May 1961 (ASPR Rev. No. 4)).
5. INSPECTION OF SUPPLIES AND CORRECTION OF DEFECTS (May 1960)
(a) All supplies (which term throughout this clause includes without limitation raw materials, components,
intermediate assemblies, and end products) shall be subi_ct to inspection and test by the Government, to the ex-
tent practicable at all times and places including the period of manufacture, and in any event prior to acceptance.
The Contractor shall provide and maintain an inspection system acceptable to the Government covering the sup-
p'ies, fabricating methods, and special tooling hereunder. The Government, through any authorized representative.
may inspect the plant or plants of the Contractor or of any of his subcontractors engaged in the performance of
this contract. If any inspection or test is made by the Government on the premises of the Contractor or a subcon-
tractor, the Contractor shall provide and shall require subcontractors to provide all reasonable factilities and as-
sistance for the safety and convenience of the Government inspectors in the performance of their duties. All in-
spections and tests by the Government shall be performed in such a manner as will not unduly delay the work.
Except as otherwise provided in this contract, acceptance of any supplies or lots of supplies shall be made as prompt-
l?. as practicable after delivery thereof and shall be deemed to have been made no later than sixty (60) days after
the date of such delivery, if acceptance has not been made earlier within such period.
(b) At any time during performance of this contract. but not later than six (6) months (or such other period
as may be provided in the Schedule) after acceptance of the supplies or lots of supplies last delivered in accord-
ance with the requirements of this contract. the Government may require the Contractor to remedy by correction
or replacement, as directed by the Contracting Officer, any supplies or lots of supplies which at the time of de-
livery thereof are defective in material or workmanship or otherwise not in conformity with the requirements of
this contract. Except as otherwise provided in paragraph (c) hereof, the cost of any such replacement or correction
shall be included in Allowable Cost determined as provided in the clause of this contract entitled "Allowable Cost,
Fixed Fee and Payment," but no additional fee shall be payable with respect thereto. Such supplies or lots of
supplies shall not be tendered thereafter for acceptance unless the former requirement of correction is disclosed.
If the Contractor fails to proceed with reasonable prommness to replace or correct such supplies or lots of supplies,
the Government (i) may by contract or otherwise replace or correct such supplies and charge to the Contractor
any increased cost occasioned the Government thereby, or may reduce any fixed fee payable under this contract
(or require repayment of any fixed fee theretofore paid) in such amount as may be equitable under the circum-
stances, or (ii) in the case of supplies not delivered, may require the delivery of such supplies, and shall have the
right to reduce any fixed fee payable under this contract or to require repayment of any fixed fee theretofore
p-id) in such amount as may be equitable under the circ'.imstances, or (iii) may terminate this contract for de-
fault as provided in the clause of this contract entitled "Termination." Failure to agree to t be amount of any
such increased cost to be charged to the Contractor or to such reduction in, or repayment of, the fixed fee shall
be a dispute concerning a question of fact within the meaning of the clause of this contract entitled "Disputes."
(c) Notwithstanding the provisions of paragraph (b) hereof, the Government may at any time require the
correction or replacement by the Contractor, without cost to the Government, of supplies or lots of supplies which
are defective in material or workmanship, or otherwise no: in conformity with the requirements of this contract,
if such defects or failures are due to fraud, lack of good faith or willful misconduct on the part of any of the Con-
tractor's directors or officers, or on the Hart of any of his managers, superintendents, or other equivalent repre-
sentatives, who has 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. The Government may at any time also re-:wire correction or replacement by the Contractor, without
cost to the Government, of any such defective supplies or tots of supplies if the defects or failures are caused by
one or more individual employees selected or retained by the Contractor after any such supervisory personnel has
reasonable grounds to believe that any such employee is habitually careless or otherwise unqualified.
(d) Corrected supplies or replaced supplies shall be subject to the provisions of this clause in the same
manner and to the same extent as supplies originally delivered under this contract.
(e) The Contractor shall make his records of all inspection work available to the Government during the
performance of this contract and for such longer period as may be specified in this contract.
(f) Except as provided in this clause and as may be provided in the Schedule, the Contractor shall have
no obligation or liability to correct or replace supplies or lots of supplies which at the time of delivery are defec-
tive in material or workmanship or otherwise not in conformity with the requirements of this contract
(g) Except as otherwise provided in the Schedule, the Contractor's obligation to correct or replace Govern-
ment-furnished property (which is property in the possession of or acquired directly by the Government and de-
livered or otherwise made available to the Contractor) shall be governed by the provisions of the clause of this
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(f) The Contractor shall have the right of appeal, under the clause of this contract entitled "Disputes," from
any determination made by the Contracting Officer under paragraphs (c) or (e) above, except that if the Contractor
has failed to submit his 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 determi-
nation of the amount due under paragraph (c) or (e) above, the Government shall pay to the Contractor the fol-
lowing: (i) if there is no right of appeal hereunder Z= if no timely appeal has been taken, the amount so deter-
mined by the Contracting Officer, or (ii) if an appeal has been taken, the amount finally determined on such appeal
(g) In arriving at the amount due the Contractor under this clause there shall be deducted (i) all unliqui-
dated advance or other payments theretofore made to the Contractor, applicable to the terminated portion of this
contract, (ii) any claim which the Government may have against the Contractor in connection with this contract,
and (iii) the agreed price for, or the proceeds 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 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, make par-
tial payments and payments on account against costs incurred by the Contractor in connection with the terminated
portion of the contract whenever in the opinion of the Contracting Officer the aggregate of such payments shall
be within the amount to which the Contractor will be entitled hereunder. If the total of such payments is in excess
of the amount finally determined to be due under this clause, such excess shall be payable by the Contractor to
the Government upon demand, together with interest computed at the rate of 6 percent per annum, for the period
from the date such excess payment is received by the Contractor to the date on which such excess is repaid to
the Government; provided, however, that no interest shall be charged with respect to any such excess payment
attributable to a reduction in the Contractor's claim by reason of retention or other disposition of termination in-
ventory until ten days after the date of such retention or disposition, or such later date as determined by the
Contracting Officer by reason of the circumstances.
(j) The provisions of this clause relating to the fee shall be inapplicable if this contract does not provide for
payment of a fee.
(ASPR 7-2,03.10) (8-702) (60 Ed.)
11. EXCUSABLE DELAYS (Jul. 1958)
Except with respect to defaults of subcontractors, the Contractor shall not be in default by reason of any fail-
ure 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 arises out of
causes beyond the control and without the fault or negligence of the Contractor. Such causes may, include, but
are not restricted to, acts of God or of the public enemy, acts of the Government in either its sovereign or contrac-
tual capacity, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe
weather; but in every case the failure to perform must be beyond the control and without the fault or negligence
of the Contractor. If the failure to perform is caused by the failure of a subcontractor to p e r form or make
progress, and if such failure arises out of causes beyond the control of both the Contractor and subcontractor, and
without the fault or negligence of either of them, the Contractor shall not be deemed to be in default, unless (i)
the supplies or services to be furnished by the subcontractor were obtainable from other sources, (ii) the Contract-
ing Officer shall have ordered the Contractor in writing to procure such supplies or services from such other
sources, and (iii) the Contractor shall have failed to comply reasonably with such order. Upon request of the Con-
tractor, the Contracting Officer shall ascertain the facts and extent of such failure and. if he shall determine that
any failure to perform was occasioned by any one or more of the said causes, the delivery schedule shall be re-
vised accordingly, subject to the rights of the Government under the clause hereof entitled "Termination."
(ASPR 7-203.11 (8-708) (60 Ed.))
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12. DISPUTES (Jan. 1958)
(a) Except as otherwise provided in this contract, any dispute concerning a question of fact arising under
this contract which is not disposed of by agreement shall be decided by the Contracting Officer, who shall reduce
his decision to writing and mail or otherwise furnish a copy thereof to the Contractor. The decision of the Contract-
ing Officer shall be final and conclusive unless, within 30 days from the date of receipt of such copy, the Contrac-
tor mails or otherwise furnishes to the Contracting Officer a written appeal addressed to the Secretary. The de-
cision of the Secretary or his duly authorized representative for the determination of such appeals shall be final
and conclusive unless determined by a court of competent jurisdiction to have been fraudulent, or capricious, or
arbitrary, or so grossly erroneous as necessarily to imply bad faith, or not supported by substantial evidence. In
connection with any appeal proceeding under this clause, the Contractor shall be afforded an opportunity to be
heard and to offer evidence in support of its appeal. Pending final decision of a dispute hereunder, the Contractor
shall proceed diligently with the performance of the contract and in accordance with the Contracting Officer's de-
cision.
(b) This "Disputes" clause does not preclude consideration of law questions in connection with decisions
provided for in paragraph (a) above: Provided, That nothing in this contract shall be construed as making final the
decision of any administrative official, representative, or board on a question of law.
(ASPR 7-203.12 (7-103.12) (60 Ed.)
13. BUY AMERICAN ACT (Jul. 1960)
(a) In acquiring end products, the Buy American Act (41 U.S.C. 10 a-d) provides that the Government give
preference to domestic source end products. For the purpose of this clause:
(i) "components" means those articles, materials, and supplies, which are directly incorporated in the end
products;
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(ii) "end products" means those articles, materials, and supplies, which are to be acquired under this con-
tract for public use; and
(iii) a "domestic source end product" means (A) an unmanufactured end product which has been mined
or produced in the United States and (B) an end product manufactured in the United States if the cost of the com-
ponents thereof which are mined, produced, or manufactured in the United States or Canada exceeds 50 percent of
the cost of all its components. For the purposes of this (a) (iii) (B), components of foreign origin of the same
type or kind as the products referred to in (b) (ii) or (iii) of this clause shall be treated as components mined,
produced, or manufactured in the United States.
(b) The Contractor agrees that there will be delivered under this contract only domestic source end products6
except end products:
(i) which are for use outside the United States;
(ii) which the Government determines are not mined. produced, or manufactured in the United States In suf-
ficient and reasonably available commercial quantities and of a satisfactory quality;
(iii) as to which the Secretary determines the domestic preference to be inconsistent with the public In-
terest; or
(iv) as to which the Secretary determines the cost to the Government to be unreasonable.
(The foregoing requirements are administered in accordance with Executive Order No. 10582, dated December 17,
1954.)
(ASPR 7-204.3) (6-104.5) (60 Ed.), revised 22 July 1960 (ASPR Rev. No. 1))
14. GOVERNMENT PROPERTY (May 1961)
(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 (herein-
after referred to as "Government-furnished Property"). The delivery or performance dates for the supplies or serv-
ices 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 Contractor at the times stated in the Schedule or, if not so stated.
in sufficient time to enable the Contractor to meet such delivery or performance dates. In t h e event that Govern-
ment-furnished Property is not delivered to the Contractor by such time or times, the Contracting Officer shall, upon
timely written request made by the Contractor, make a determination of the delay occasioned the Contractor and
shall equitably adjust the estimated cost, fixed fee, or delivery or performance dates, or all of them, and any
- other contractual provisions affected by such delay, in accordance with the procedures provided for in the clause
of this contract entitled "Changes." In the event that Government-furnished Property is received by the Contractor
in a condition not suitable for the intended use, the Contractor shall. upon receipt thereof notify the Contracting
Officer of such fact and, as directed by the Contracting Officer, either (i) return such property at the Govern-
ment's expense or otherwise dispose of the property or (ii) effect repairs or modifications. Upon completion of (i)
or (ii) above, the Contracting Officer upon written request of the Contractor shall equitably adjust the estimated
cost, fixed fee, or delivery or performance dates, or all of them, and any other contractual provision affected by
the return or disposition, or the repair or modification, in accordance with the procedures provided for in the clause
of this contract entitled "Changes." The foregoing provisions for adjustment are exclusive and the Government
shall not be liable to suit for breach of contract by reason of any delay in delivery of Government-furnished Prop-
erty or delivery of such property in a condition not suitable for its intended use.
(b) Title to all property furnished by the Government 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 the contract, shall pass to and
- est in the Government upon (i) issuance for use of such property in the performance of this contract, or (ii)
)mmencement of processing or use of such property in the performance of this contract, or (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
comply with the provisions 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 incorporated by reference and made a part of this contract.
(d) The Government Property provided or furnished pursuant to the terms of this contract shall, unless other-
wise provided herein, be used only for the performance of this contract.
(e) The Contractor shall maintain and administer in accordance with sound industrial practice, a program,
for the maintenance, repair, protection and preservation of Government Property so as to assure its full avail-
ability and usefulness for the performance of this contract. The Contractor shall take all reasonable steps to
comply with all appropriate directions or instructions which the Contracting Officer may prescribe as reasonably
necessary for the protection of Government Property.
(f) (1) The Contractor shall not be liable for any loss of or damage to the Government Property, or for
expenses incidental to such loss or damage, except that the Contractor shall be responsible for any such loss or
damage (including expenses incidental thereto)-
(i) which results from willful misconduct or lack of good faith on the part of any one of the Contractor's
directors or officers, or on the part of any of his managers, superintendents, or other equivalent representatives, who
has supervision or direction of:
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(B) all or substantially all of the Contractor's operations at any one plant or separate location in which
this contract is being performed, or
(C) a separate and complete major industrial operation in connection w i t h the performance of this
contract;
(ii) 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 his directors, officers, or o t h e r representatives mentioned in subparagraph (1)
above:
(A) to maintain and administer, in accordance with sound industrial practice, the program for mainte-
nance, repair, protection and preservation of Government Property as required by paragraph (e) hereof, or
(B) to take all reasonable steps to comply with any appropriate written directions of the Contracting
Officer under paragraph (e) hereof;
(iii) for which the Contractor is otherwise responsible under the express terms of the clause or clauses
designated in the Schedule;
(iv) 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, whichever is greater; or
(v) which results from a risk which is In fact covered by insurance or for which the Contractor Is other-
wise 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
under any one exception shall not be limited by any other exception. This clause shall not be construed as relieving
a subcontractor from liability for loss or destruction of or damage to Government Property in his possession or
control, except to the extent that the subcontract, with the prior approval of the Contracting Officer, may provide
for the relief of the subcontractor from such liability. In the absence of such approval, the subcontract shall eon-
.-tain appropriate provisions requiring the return of all Government Property in as good condition as when received,
xcept for reasonable wear and tear or for the utilization of the property in accordance with the provisions of the
grime contract.
(2) The Contractor shall not be reimbursed for, and shall not include as an item of overhead, the cost of In-
surance, or any provision for a reserve, covering the risk of loss of or damage to the Government Property, except
to the extent that the Government may have required the Contractor to carry such insurance under any other pro-
vision of this contract.
(3) Upon the happening of loss or destruction of or damage to the Government Property, the Contractor
shall notify the Contracting Officer thereof, and shall communicate with the Loss and Salvage Organization, if
any, now or hereafter designated by the Contracting Officer, and with the assistance of the Loss and Salvage
Organization so designated (unless the Contracting Officer has designated that no such organization be employed)
shall take all reasonable steps to 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-
(i) the lost, destroyed and damaged Government Property,
(ii) the time and origin of the loss, destruction or damage,
(iii) all known interests in commingled property of which the Government Property is a part, and
(iv) the insurance, if any, covering any part of or interest in such commingled property.
The Contractor shall make repairs and renovations of the damaged Government Property or take such other action,
as the Contracting Officer directs.
(4) In the event the Contractor is indemnified, reimbursed, or otherwise compensated for any loss or destrue-
)n of or damage to the Government Property, he shall use the proceeds to repair, renovate or replace the Gov-
nment 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 nothin
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 cf suit and the execution of instruments of assign-
ment in favor of the Government) in obtaining recovery. In addition, where the subcontractor has not been re-
lieved 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.
(5) If this contract is for the development, production, modification, maintenance, or overhaul of aircraft,
or otherwise involves the furnishing of aircraft by the Government, the clause of this contract entitled "Flight
Risks" shall control, to the extent it is applicable, in the case of loss or destruction of, or damage to, aircraft.
(g) The Government shall at all reasonable times have access to the premises where any of the Government
Property is located.
(h) The Government Property shall remain in the possession of the Contractor for such period of time as
is required for the performance of this contract unless the Contracting Officer determines that the interests of
the Government 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 be amended to accomplish an equitable adjustment in the terms and provisions
thereof.
(i) Upon the completion of this contract, or at such earlier dates as may be fixed by the Contracting Officer,
the Contractor shall submit to the Contracting 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 de-
livered to the Government, and shall deliver or make such other disposal of such Government Property as may
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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 cut-
ting and processing waste, such as chips, cuttings, borings, turnings, short ends, circles, trimmings, clippings, and
remnants, and to 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 costs of the restoration or rehabilitation of the Contractor's plant or any portion
thereof which is affected by the removal of any Government Property.
(k) Directions of the Contracting Officer and communications of the Contractor issued pursuant to this clause
shall be in writing.
(ASPR 7-263.21, (13-503) (60 Ed.), revised 1 May 1961 (ASPR Rev. No. 4)).
15. INSURANCE-LIABILITY TO THIRD PERSONS (Jan. 1960)
(a) The Contractor shall procure and thereafter maintain workmen's compensation, employer's liability, com-
prehensive general liability (bodily injury) and comprehensive automobile liability (bodily i nj u r y and property
damage) insurance, with respect to performance under this contract, and such other insurance as the ontract-
ing Officer may from time to time require with respect to performance under this contract; provided, that the
Contractor may with the approval of the Contracting Otrcer, maintain a self-insurance program, and provided fur-
ther, that with respect to workmen's compensation the Contractor is qualified pursuant to statutory authority. 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 ap-
proved by the Contracting Officer.
(b) The Contractor agrees, to the extent and in the manner required by t h e Contracting Officer, to submit
for the approval of the Contracting Officer any other insurance maintained by the Contractor in connection with
the performance of this contract and for which the Contractor seeks reimbursement hereunder.
(c) The Contractor shall be reimbursed: (i) for the portion allocable to this contract of the reasonable cost
of insurance as required or approved pursuant to the provisions of this clause, a n d (ii) for liabilities to third
persons for loss of or damage to property (other than property (A) owned, occupied or used by the Contractor or
rented to the Contractor or (B) in the care. custody, or control of the Contractor), or for death or bodily injury, not
compensated by insurance or otherwise, arising out of the performance of this contract, whether or not caused by
the neeligence of the Contractor, his agents. servants or employees, provided such liabilities are represented by
final judgments or by settlements approved in writing by the Government, and expenses incidental to such liabili-
ties, except liabilities (I) for which the Contractor is otherwise responsible under the express terms of the clause
or clauses. if any, specified in the Schedule, or (II) with respect to which the Contractor has failed to insure as
required or maintain insurance as approved by the Contracting Officer or (III) which results from willful miscon-
duct or lack of good faith on the part of any of the Contractor's directors or officers, or on the part of any of his
managers, superintendents, or other equivalent representatives, who has supervision or direction of (1) all or sub.
stantially all of the Contractor's business, or (2) all or substantially all of the Contractor's operations at any
one plant or separate location in which this contract is b~!irg performed, or (3) a separate and complete major in-
dustrial 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 t h e Contractor in connection with the
the performance of this contract, other than insurance required to be submitted for approval or required to be pro-
cured and maintained pursuant to the provisions of this clause, provided such cost would constitute Allowable Cost
under the clause of this contract entitled "allowable Cost, Fixed Fee and Payment."
(d) The Contractor shall give the Government or its representatives immediate notice of any suit or action
filed, or prompt notice of any claim made, against the Contractor arising out of the performance of this contra
^. ct,
e cost and expense of which may be reimbursable to the Contractor under the provisions of this contract, and
.he risk of which is then uninsured or in which the amour: claimed exceeds the amount of coverage. The Contractor
shall furnish immediately to the Government copies of all pertinent papers received by the Contractor. If the amount
o; the liability claimed exceeds the amount of coverage, the Contractor shall authorize representatives of the Gov-
ernment to collaborate with counsel for the insurance carrier, if any, in settling or defending such claim. If the
:'.abiii:y is not insured or covered by bond, the Contractor shall, if required by the Government, authorize represent-
ativES of the Government to settle or defend any such claim and to represent the Contractor in or take charge
of any litigation in connection therewith: provided, however, that the Contractor may, at his own expense, be asso-
ciated with the representatives of the Government in the settlement or defense of any such claim or litigation.
(ASPR 7-203.22) (60 Ed.)
16. MILITARY SECURITY REQUIREMENTS (Nov. 1958)
(a) The provisions of this clause shall apply to the extent that this contract involves access to information
c:assified "Confidential" including "Confidential-Modified Handling Authorized" or higher.
(b) The Government shall notify the Contractor of the security classifications of this contract and the ele-
ments thereof, and of any subsequent revisions in such security classification, by the use of a Security Require-
ments Check List (DD Form 254), or other written notification.
(c) To the extent the Government has indicated as of the date of this contract or thereafter indicates se?
curity classification under this contract as provided in paragraph (b) above, the Contractor shall safeguard all
classified elements of this contract and shall provide and maintain a system of security controls within his 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 any modification to the
Securi:y 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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20. CONVICT LABOR (Mar. 1949)
In connection with the performance of work under this contract, the Contractor agrees not to employ any person
undergoing sentence of . imprisonment at bard labor.
(ASPR 7-203.15) (12-203) (60 Ed.)
21. WALSH-HEALEY PUBLIC CONTRACTS ACT (Jan. 1958) '1''
If this contract is for the manufacture or furnishing of materials, supplies, articles, or equipment in an amount
which exceeds or may exceed $10,000 and is otherwise subject to the Walsh-Healey Public C o n t r a e t s Act, as
amended (41 U.S.C. 36-45), there are hereby incorporated by reference all representations and stipulations re-
quired by said Act and regulations issued thereunder by the Secretary of Labor, such representations and stipu-
lations being subject to all applicable rulings and interpretations of the Secretary of Labor which are now or may
hereafter be in effect.
(ASPIC 7-203.17) (12-684) (60 Ed.)
22. EIGHT-HOUR LAW OF 191: --OVE.RTEIE COMPENSATION (Jan. 1958)
This contract, to the extent that it is of a character spec1Sed in the Eight-Hour Law of 1912, as amended (40 U.B.O.
824-326) and is not covered by the 'Vi alsh-Healey Public Contracts Act (41 U.S.C. 35-35), is subject to the follow.
lag provisions and exceptions of said Eight-Hour Law of 1912, as amended, and to all other provisions and excep.
tions of said Law: .. . ? , .
No laborer or mechanic doing any part of the work contemplated by this contract, In the employ of the Contractor
or any subcontractor contracting f or any part of said work contemplated, shall be required or permitted to work more
than eight hours in any one calendar day upon such work, except upon the condition that compensation is paid to
such laborer or mechanic in accordance with the provisions of this clause. The wages of every laborer and mech$bie
employed by the Contractor or any subcontractor engaged in the performance of this contract shall be computed
on a basic day rate of eight hours per day; and work in excess of eight hours per day is permitted only upon the
condition that every such laborer and mechanic shall be compensated for all hours worked in excess of eight bourn
per day at not less than one and one-half times the basic rate of pay. For each violation of the requirements of this
clause a penalty of five dollars shall be imp-osed for each laborer or mechanic for every calendar day In which such
employee is required or permitted to labor more than eight hours upon said work without receiving compensation
computed in accordance with this clause, and all penalties thus imposed shall be withheld for the use and benefit of
the Government.
(ASPR.7-203.16) (12-303.1) (60 Ed.)
23. PAY11ENT FOR OVEIiTI!. E AND SLIFT PRE.', IUMS (May 1960)-(a) Allowable Cost shall not Include
any amount on account of overtime premiums or shift premiums, except to the extent that they either (1) have
been approved in writing on behalf of the Government or (ii) are paid for work-
(A) necessary to cope with emergencies such as those resulting from accidents, natural disasters, break-
downs of production equipment, or occa.: ional production bottlenecks of a sporadic nature;
(B) by Indirect labor employees such as those performing duties in connection with administration, pro-
tection, transportation, maintenance, standby plant protection, operation of utilities, or accounting;
(C) in the performance of tests, industrial processes, laboratory procedures, loading or unloading of trans-
portation media, and operations in flight or afloat, which are continuous in nature and cannot reasonably be In-
terrupted or otherwise completed; or
(D) which will result in lower overall cost to the Government
(b) The cost of overtime premiums or shift premiums otherwise allowable under (a) above shall be allowed
only to the extent the amount thereof is reasonable and properly allocable to the work under this contract.
(ASPR 7-203.27) (12-102.3(c)) (60 Ed.) - - -
24. NONDISCRIMINATION IN E_!;.PLOY 1ENT (Apr. 1961)
In connection with the performance of work under this contract, the C-ontractor agrees as follows:
(a) The Contractor will not discriminate against any employee or applicant for employment because of race,
creed, color, or national origin. The Contractor will take affirmative action to ensure that applicants are employed,
and that employees are treated during employment, without regard to their race. creed, color, or national origin.
Such action shall include, but not be limited to, the following- Employment, upgrading, demotion or transfer; re-
cruitment or recruitment sdverrisiug. layoff or termination, rates of pay oz other forms of compensation; and
selection for training, including apprenticeship. The Contractor agrees to post in conspicuous places, available to
employees and applicants for employment, notices to be provided by the Contracting Officer setting forth the pro-
visions of this nondiscrimination clause.
(b) The Contractor will, in all solicitations or advertisements f or employees placed by or on behalf of the
Contractor, state that all qualified applicants will receive consideration for employment without regard to race,
creed, color, or national origin.
(c) The Contractor will send to each labor union or representative of workers with which he has a collective
bargaining agreement or other contract or understanding, a notice, to be provided by the agency contracting officer
advising the said labor union or worker's representative of the Contractor's commitments under this section, anA
shall post copies of .the notice in conspicuous places available to employees and applicants for employment.
(d) The Contractor will comply with all provisionss of Executive Order No, 10925 of March 6, 1961, and of
the rules, regulations, and relevant orders of The President's Committee on Equal Employment Opportunity created
thereby.
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(a) The Contractor will furnish all information and reports requ!red by Executive Order No. 10925 of March
6, U31, end by the rules, reputations, and orders of the aaid Committee, or pursuant thereto, and will permit
access to his books, raeords, end necounta by the coutr etirq agency and the Committee for purposes of iaveetiga.
tion to ascertain-compliance with such rules, regult:!aoas, and orders.
(f) In the event of the Contractor's noncompliance with the nondiscrimination clauses of this contract or
with any of the said rules, re* 'lotions, or orders, this contract may be cancelled in whole or in r)--A and the Con-
tractor may be declared ineliaibla for further Government contracts in accordance with procc,,lures authorized in
Executive Order No. 10-.125 or Uarch 6, lt161. and Ec_h other sanctions may be imposed and remedies Invoked as
provided in the said 1 xeenti,;ive Order or by rule, r~s E. } c c .:."L ? i'c r to ?.i c ,tf c ort ty to MW
such entir:4 cc.: ~..1t 4
u8e 4n T E,- Z ?: . by a '!J patent of
C is s G C. l C
the Uniica r"-t hereof or
any azcE< { e Ily
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B,11 NT
It is contemplated by the part'.as hereto that the Governzent will bail (in
addition to any property listed in this contract as to be "furnished" by the
Oovernm3nt) to the Contractor t?:~ items listed elsewhere herein for use in
connoction with the p3rforriance of this contract, and that an appropriate written
agreement of bailment will be entered into by and batwcen the parties h3roto
for that purpose. In the event of dally or failure of the Government to bail
such property, as aforesaid, the provisions of the clause of this. contract
entitled "Government-Furnished Property" or "Government Property" (whichever
is applicable) relating to failure or delay in the furnishing of property,
shall be applicable.
(isrPI 13-550 (a))
BC12 Pm
It is anticipated that the Governn nt may bail to the Contractor eush
Governzrrnt property of the categories spccifiod elsewhere herein as may fros
time to time be d emcd by the Contracting Officer to be necessary in the
interest of the Govern nvnt to so furnish, provided, however, the effect of
such bailrrnnt upon the contract price or fixed fee (whichever is applicable)
shall be re; acted by adjusting the contract prig or fixed fee (,hfiichever is
applicable) in accordance with the procedures set forth in the Changes
clause of this contract, and the contract amended accordingly by supplemental
agreement prior to the payment of Contractor's final invoice under this
contract. Arty property bailed pursuant to thin paragraph shall be made
available to the Contractor only under the provisions of a separate bailment
agreement or agreements and this contract shall not be construed as effecting
or comrd.tting the G+verrr nt to the bailment of such property.
(D.F'PI 13-550 (b))
B013 BAMENT (For Use in Lotter Contracts Only)
It is anticipated that the Govern-ant may bail to the Contractor such
items of Oovermm3nt property specified elsewhere herein as may from tim3 to
time be deenW d by the Contracting Officer to be necessary in the interest of
the Goverrrrwent to so furni;shs provided, however, the effect of such bailment
shall be considered in any ad Justa ncs in r-mounts finally payable to the
Contractor at the tf_=?e of settlement of Contractor's termination claim or
taken into account at the tine of execution of the definitive contract
contemplated hereby. 1 V p= operty bailed pursuant to Q is para'aph shell
be m.rdo available to the Contractor only u 1.d r the provisions of a soparate
bailr:. nt agroerant or ? cc_-.ants and this contract shall not be construed
as offecti Z or connitting the Goverment to the bailrent of such property.
W PI 13-550 (a))
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B.14 FLIGHT RISKS (May 1960)
(a) Notwithstanding any other provision of this contract, and
particularly subparagraph ((1) of the Government Property clause and
paragraph (c) of the Insurance-Liability to Third Persons clause, the
Contractor shall not (i) be relieved of liability for, damage to or
loss or destruction of, aircraft sustained during flight, or (iii be
reimbursed for liabilities to third persons for loss of or damage to
property) or for death or bodily injury, which are caused by aircraft
during flight, unless the flight crew members have previously been
approved in writing by The IF CContract Management Region Commander
or his designee.
(b) For the purposes of this clauses
(i) Unless otherwise specifically provided in the Schedule,
the term "aircraft" means any aircraft, whether furnished, by the
Contractor under this contract or furnished by the Government to
-the Contractor under this contact, including all Government
Property placed or installed therein or attached thereto.
(ii) The term "flight" means any flight :.emonstration, flight
test, taxi test, or other flight, made in the performance of this
contract, or for the purpose of safeguarding the aircraft, or.
previously approved in writing by the Contracting Officer. As to
land based aircraft, "flight" shall co- ence with the taxi roll from
a flight line and continue until the aircraft has completed the taxi
roll to a flight line; as to sea planes, "flight" shall commence
with the launching from a ramp and continue until the aircraft has
completed its landing run and is beached at a ramp; as to helicopters,
"flight" shall commence upon engagement of the rotors for the purpose
of take-off and continue until the aircraft has returned to the
'ground and rotors are disengaged; and for vertical take-off aircraft,
"flight" shall commence upon disengagement from any launching plat-
form or device and continue until the aircraft has been re-engaged
to any launching platform or device.
(iii) The term "flight crew members" means those persons in the
aircraft who have been designated by the Contractor to conduct any
flight, as defined in subparagraph (ii) above, on behalf of the
Contractor.
(ASPR 10-4O14.2 (60 FA.))
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8.15 SPECIAL TEST EQUIP TT
In the performance of this contract, Contraotcr may fabricate or procure
special test equipment. Further, the Contractor may fabricate and/or procure
general purpose test equipment, where unit cost is $100.00 or less, or the life
expeotancy is four years or less, or where the general purpose test equipment is
to be modified and/or incorporated into a test system or test position so as to
become special test equipment. Such costs shall be allowable direct oosts to this
contract. The authority set forth in this paragraph is subject to the approval of
the 1~.dministrative Contracting Officer and capital items shall not to procured
hereunder.
B.16 SPECIAL TOOLING
Special tooling acquired by or furnished to the Contractor under an. other
contracts with the United States Air Force may be utilized on a no-charge :or-use
basis in the performance of this contract; provided, however, that the contract or
ontracts for which the special tooling was originally acquired shall not be
adversely affected by the utilization of said tooling in the performance of this
contract. Upon completion, termination, and/or the result of said tooling becoming
obsolete and/or surplus to the contracts under which said tooling was acquired, title
and accountability for said tooling may be transferred, as regdired, to this contract
;subject to the approval of the Administrative Contracting Officer. The Ccntractor
currants that the estimated cost and fixed fee for any supplies to be furnished
hereunder do not include the cost of such tooling or any allowance or charge to
-cover depreciation or amortization of the same.
Further, any special tooling acquired by or furnished under this contract may
be used, subject t the same non-interference provisions noted above, in the
performance of any other contracts with and upon STATINTL
completion, termination, and./or the res rr m obsolete and/or
surplus, may be transferred, as requireds subject to the approval of the Administrative
Contracting Officer, to any other contracts with STATINTL
.17 PARTS AND C WPCNENPS
All purchased parts, fabricated parts, sub-assemblies, or finished components
common to other items produced by the Contractor, except by Contractor's Hashes
Components Group (consisting by way of identification but not of limitation of
the Vacuum Tube Products Division, Microwave Tube Division, Industrial Systems
Division, Semiconductor Division and Electronic Products Division), may be billed
on the basis of inventory costs in accordance with Contractor's approved accounting
policy. When an item is transferred to this contract at a partial stage of
completion, it shall be transferred on a cost basis, as approved by the Contracting
Officer. Components transferred to this contract will be accepted. on the basis
of Air Force unit test; any rework necessitated by failure under systems test will
be a direct charge to this contract. To the extent that-engineering charges under
this contract cause obsolescense of raw materials, purchased parts, fabricated
parts or components which are in the Contractor-owned-work-in-process or inventories,
which items were acquired or fabricated for the benefit of this contract, the cost
of such articles will be a direct charge to this contract subject to the approval
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B.18 AMMUNITION AND EXPLOSIV MATERIAL SAFL'TY
The Contractor shall comply with the applicable portions of
(AFP 7-6048
B.19 C}{ NGES TO MAKE OR BUY PROG7414 (Jul. 1960)
The Contractor agrees to p3rform this contract in accordance with the "make or
buy" program attached to this contract except as hereinafter provided. Ifithe
Pontractor desiresto change th3 "make or buy" program, he shall notify the Contracting
Officer in writing of the proposed change reasonably in advance and shall subcsit`
justification in sufficient detail to permit evaluation of the proposed change.
Changes in the place of performance of work on any "rake" item in the 'make or buy*
program are subject to this rrquiremcnt. With resp3ct to items deferred at the time
of negotiation of this contract for later additions to the, ke or buy" program, the
Contractor shall notify the Contracting Officer of each propocod addition 4t the
earliest possible time, together with uatification in sufficient detail to-p3rmit
evaluation. The Contractor shall not, without the written consent of the Contracting
Officer, make changes or additions to the programs provided, that in his discretion,
the Contracting Officer may ratify in writing any chcngas or editions and such
ratification shall-constitute the content of tho Contracting Officer required by this
clause. The "rake or buy" program attached to this contract shall be deem3d to be
modified in accordance with the written consent or ratification by the Contracting
Officer.
ASPR 3-902(d) (60 Ed.) Revised 22 July 1960 (E v.-No..1) and is authorized for use
in accordance therewith.
8.20 SAFETY A_I D ACCIDENT PREY ITI
In performing any vork undor this contract on premises -itch are under the
direct control of the Governynt,-.the Contractor shall (i) conform to all safety
rules and reauirem3nts prescribed in Air Force Manual 32-3, as in effect on the
-date of this contract and (ii) tike such additional procautions as the Contracting
Officer may reasonably require for safety and accident prevention purposes. The
Contractor agrees to take all reasonable stops and precautions to prevent accidents
and preserve the life and health of Contractor and Government pcrconnel performing
or in any way coming in contact with the p3rforr nco of this contract on such
premises. Any violation of such rules and requircrients, unless promptly corrected,
as directed by the Contracting Officer, shall be.grounds for termination of this
contract in accordance with the default proviai.ons hereof. If compliance by the
'Contractor with ('a) above results in a material increase in the cost or time of
performance of the contract, an equitable adjustment will be made in accordance with
the clause hereof entitled "Changes".
xcept last sentence added thereto-.)
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