CONTRACT NO. SC-58 LOCKHEED AIRCRAFT CORPORATION BURBANK CALIFORNIA PROJECT (SANITIZED) (AQUATONE)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP67B00074R000500300102-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 23
• Document Creation Date: December 21, 2016
• Document Release Date: January 5, 2009
• Sequence Number: 102
• Publication Date: June 27, 1957
• Content Type: MEMO

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SECRET
SAPC
.16900
Copy of 3
27 June 1957
CINTRAL IN72LIZOENCE AGENCY
CONTRACTING OFFIC1R'3
IRTf NATION AND FINDINGS
AVTHORITY Tn NEGOTIATE CONTRACT
The Central Intelligence Agency proposes to enter into a
contract with Lockheed Aircraft Corporation, Burbank, California
for services in the ZI and overseas of contractor personnel for
maintenance of the U-2 airplanes.
I hereby find that this procurement, Project DYEMEED 1 B (APO
is estimated to cost $120,000 for the period 1 July 1957 through
30 June 1938 chargeable during Fiscal Year 1958 to No Year" funds
transferred to Project AQUATOEM the Department of the Air Force. I
also find that this procurement is in the interest of National
Defense and that it will be certified by the Director of Central
Intelligence in accordance with the procedure of 15 December 1956
to be for objects of a confidential, extraordinary and emergency
nature and therefore is within the purview of the procurement
authority of the Agency as stated in Section 10(b) of Public Law
110, Slat Congress. Procurement by torn advertising of the
services called for by Contract No. SC-58 would result in public
disclosure of the nature and character of the equipment being
serviced by the technicians and would thereby jeopardise the
security classification of this project.
I hereby determine as Contracting Officer for this contract,
that the necessity and authority for negotiation of this contract
have been properly documented by proper Agency authority, and
that the proposed contract not necessarily be negotiated without
formal advertising.
Contracting Officer
Distribution:
Orig.
--' 2. - Finance
3. - Chrono
K-58
25X1
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4$~~ `SET
SAPC.~ ., 99
Copy of 3
27 Tune 1957
W kNDUM FOR THE p OECD
/I
SUBJECT: Contract No. 3C- 8 Lockheed Aircraft Corporation
Burbank, California, Project DY1F.*D 1 B(AY)
(AQUATONE).
1. This memorandum contains a reoonimendation submitted for
the approval of the Project Director. Such recommendation is
included in paragraph 6.
2. Contract No. SC-57 with the Lockheed Aircraft Corporation
covered training of government personnel, furnishing of warehouse:
technicians and the training and furnishing of technical representatives.
This contract expired on 30 June 1957.
3. As the only service to be continued is that of technical
representatives Contract No. SC-58 has been prepared to cover this
service for the FOG requirement for the period 1 July 1957 through
30 June 1953. The man-month rates for the technical representatives
are fixed for the entire period. The rates for the Auto-Pilot
Field Engineers furnished by Lear, Incorporated, a subcontractor?
are subject to renewal as the present subcontract expires on 16 July
195,. Upon renewal of this subcontract the contract will be amended
to indicate the firm fixed rates for said Fngineerg.
4. This contract has been prepared with the stipulation that
it is contingent upon the availability of funds during Fiscal Year
1953 for this service. An amount of $56,000 has been allotted at
this time to cover services through December 1957 which will be
recorded by the Comptroller as a firm obligation when "No Year"
funds are transferred by the Air Force. Additional funds will be
added during December 1957 to cover the balance of the contract
period.
5. Certification of funds in accordance with Section 10(b)
of Public Law 110 will be made by the DCI in accordance with the
procedure established on 15 December 195E-.
ET
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. Approval of Contract No. SC-58 and execution thereof on
behalf of the Agency by the authorised project contracting Officer
is recommended.
Contracting officer
CONCUBA `i1C "S t
Director of D and P
1k __D fice of Gene Counsel
Approval requested in Paragraph
`':, granted.
RICHARD M. BISSELL, JR.
SA/PC/DCI - Project Director
Distribution:
Orig. - Contract No. SC-58 H
--2. - Finance
,--0. - Chrono
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16898
NN UATSD COMPACT
Corporation
Hurbsnk, California
Contract No. C-58
Contract Fors Contract work (ass stele) Mounts
Mai1 Invoices to $
Performance Periods 1 July
1957 through 30 June 1958
Adidnistrative Datas
This contract is entered into,, by and between the United States of
America, hereinafter called the Government, represented by the
Contracting Officer executing this contract, and the above-named
Contractor which is a corporation, incorporated in the State of
California, hereinafter called the Contractor.
The parties berets agree that the Contractor shall furnish the
facilities and deliver all supplies and perform all the services
set forth in the attached schedule issued hereunder, for the
consideration stated therein.
The rights and obligations of the parties to this contract shall be
subject to and governed by the attached sahedule and General Provisions.
In the event of any inconsistency between the schedule and the General
Provisions, the Schedule shall control.
-, the parties hereto have executed this contract as
1957.
Signatures:
Title ~_. ,.,.., t441-e414
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Contrast No. 3C..58
CERTIFICATE
I- . certify that I am
the Assistant Secretary of the Corporation
..,....,
naesd as Contractor herein; that C ren a L. Johnson
who signed this contract on behalf of the Contractor was than
Vice President.r...*r.w.r..rir...Mrr..rn.~..- of said Corporation; that
said Contrast was duly signed for and in behalf of said
Corporation by authority of its so arnins body, and is within
the seeps of its Corporate pmeri.
(Corporate seal)
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Ooetrrt No. &C-58
i0'"t 1
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OND
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Oatraot no. ,'9C-`'6'S$
SCTICN A _ C T~ ~t l t1Q
Tbo Ci itarastow air' ttnA#h the aervieas set forth in the
attasbsd Appaodix I, *a* hpp+a*liz I Wing a pert of the 9sAsdtrle
=dsr this aontarast, to awrsiart is the itrtaalatiaa, asintanstrae,
repair and oisit anl, within the osntti t&. linrtta at the Sadtod
States, or overseas, of c si nt tnraislaed Grader Cntrwt No.
SP-1914.
*CTICS1 S -
In eena'i+brrstian St the Cantrs.tor'a PWararnoo of the
hetolmder, the Cantraetor aiaaar 1 be Pm M aonthl.y at the
forth in the at1-p I for sub math at am1b
a
With the
1 s Whined "ftwats" of the
Provisions. Trarstle l parts of a atwth echo
the basis of the -r of aa2aaiar days sardiess
Gay aalsodar Math to the aosarer of days in that
aonth.
2.Itis
psraezu*l to
to the Ate or sites
that tits neaarMy for C oatrastor
trap the plant or plants of the Centraetor
s the pester -1 of aerriass beratloder
11 be emus iftred as
Dsraaxrder. It is also
of Centnotor premawl be
of sarvisss brrataadsr and
porssmel to the pert of the
tie, "put in the pert.
3. Asst the date of
event in the perforuamm of wrviasr
that tits nenssssry for the tra .tor
diffo eett sites for the psrfer~n s
nsaarssary for the at Musk
trsrviass Derrsmadsr. Z--e ' , `ea.
bona alIoaated for this asatraat the
at~t as w*21 as the tat is
sa i1ama daring FisMi. Tur 1"d flow
+j
this aunt Got G Dos .k b
~'w rtaaarnt Ow inareass this aumt i
kAt'
Voon f$
swiss. The
its discretion. Teo total a>raanr, ppaabl to
this *=trust atsal not asntraad this aweeat vi
antba:iaaa-tion fra? the Caatrasting dttiaer. The
% Mw j ?O+ w- "3 -1
Contraotsr a darn +6
written .0-
notify the Centrastsag "new wm as of the total
futnds, above, have been m*ei"d.
C+CTION c
taetor ahou
.
The nont raptor ahsu perfbra the hereunder as required
by the Csowrt nt for the part" 1 July 1 tirungh 30 June 1958.
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Contract NO. SC-58
SECTION D - NTIGIP?' T Co1B
All assts which haw been iozwsd bF the Contractor on or
after 17 3'nas 1957, in satiaipatiaa of and prior to the suing
of this *=treat, and ud-isia-, it inmarrod sf er' the Aping of
this *=treat and wssld haw been , m&UWrad as s i.s wsbls charges
hereunder, Will be osnsidered to bww been inwarred wdsr this
contrast and shall be peya'b1s )WrW dsr.
MOTION ' -
(a) contraster's personnel shall at all tines : 4-' as
esiplsyses of the Contractor and be rsrisr its administrative
control, lourswr, the Contractor and its personnel shall, in
the performance of services bervaAers, be Vdde tr by azA
With the airestieas end re~tirw
or offieears or persons issig nstsd by bin ini'nding the Caswtanding
Officer of the activity to 4dah the Cantrastor person st is
assigned. u ndsr moss sutbority said sonless shall be port rand
in a mower satisfactory to smote effiosrs or persons.
(b) Contractor personne3 aast be available for re ssigismsnt
Within the oantiz t$l 1#`dts of the Chited States or oversees
upon rwaaonab~e notice.
i9CTION F - ~'
(a) Contracted s personnel assigned to Air Force activities
w ll be accorded the assn Priiilagss as an Air Force stain with
regard to ba31sr effiosr hers essommowicust
trsnsporti.tion and g. Cantrs *Urs personnel asy occupy
fssdly type gwartsr* only idnen sash gwrtors and a ilitary and
civilian personnel rrgair a ' ts. In the rant quarters we mWW
available theatre aowaasnsr and bane oearrsxna r policies and
regulations will $ ly. its of any quarters furnished will
be required to pay rental sharps at the ease, rates that are shared
occupants who an of the military rank of an Air Force Captain or
the eigi,nalaut. Said rental charges will be determined by appropriate
provisions of OR 93.4.
(b) zxwmange privileges are not authorised for contractor's
personnel. Sswptions mW be granted only Where eztram hardship
is estslished tnaer pracidns of AM 1474 and 1447-9 ore ' ates
of Forces Agreirnts' perdt.
(a) Cosraissary pridLlages are not spnthorised for contractor's
personnel. twee do ns arD- be granted way When specifically and
individnislly justified to and W roved by the SeoretarY of the Air
Force in saoordscus With AM 14545.
SECRET
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Contrast No. SC..58
(d) All oontraoter'a personnel who are officially accredited
as each by the Air Pores mag- be provided necessary asdical oars in
Air Pores asdisal treatment facilities as authorised by 160-73.
(s) The above privilogss will not be accorded eiopendonts of
contractors a personnel.
MOON 0 -- Ql , II V1
8orvicea of Cantraestorts personnel outside the continental
limits of the f rsited States shall be provided as sot forth in the
attached App radix 1. further, the Contrasting Officer soy, upon
consent of Contractor, transfer Oentracterts personnel to other
overseas am s requiring todwissl, services of the Contra stort s
personnel. lob transfer requires that the Contrasting Officer
notify the Centrastor thirty dart prior to the transfer. duah
notification may be given after transfer if the Contracting Officer
dstorminss that the period of notification required would prevent
efficient use of the personnel t o services.
MOTION M - MAZY or A` T1 C!' Qr i ,B /IBZONJ
Notwithstanding the requirement* of any of the General Provisions
of this contract to the contrary, whensoovsr the Contractor, in
performance 4f the work wider this contrast, shall. find that the
r+egiatil^ensnts of any of the alums, of the amoral Provisions are
in conflict '4th security instructions issued to the Contractor by
the Contrasting Officer or by his duly authorised representative
for security matters, the Contractor shad call the attention of the
Contrasting Cffissr to sunk conflict and the Contrasting Officer or
his duly saathorlaed ropreseatstin for security matters shall (i)
modify or rescind such security requirements or (ii) the Contracting
Officer ahs)1, isauts to the Contractor a waiver of compliance with
the rsgaireso nts of the General Provisions conflicting with sutah
security rsgroiroments. Any waiver of compliance with the General
Provisions of this contrast issued by the Contrasting Officer shall
be in writing;, e?sept that the approval by the Contracting Officer
of any smbooi tract lowed hsreaaroder by the Contractor shall be
deemrd to oaa otitats approval of waiver of any classes of the amoral
Provisions iri conflict with the atipalatisns of sash subcontract.
d6CTiON I
The contractor shall not reveal (i) the specific nature of any
details of t k s work being performed hereander or (ii) any information
whatsoever with respect to the department of the Government spswering
this contrast and the work thorn rr except as the Contractor is
SECRET
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Contract No. 8-58
directed or psruitted to reveal such information by the Contracting
officer or by his duly authorized representative for security matters.
And notvithst msding any clause or section of this contrast to the
contrary, the Contractor ill not interpret any clause or section
of this contrast as requiring or permitting divulgence of such information
to a person, public or private, or to ash officer or department of
the Govermawt without the +sWross osnsent of the Contrasting Officer
or his duly authorised representative for security matters.
JMCTXON J - I TAT1ON
h ttof
(a) Transportation which is essential to the acoospl4a purposes
required are ices will be furnished by the OovenWO nt ?
of definitior, such essential transportation will Include transportation
for only the: a personnel rendering services and their baggy, and
for any equijmant to be fnraished by the contractor, from the
contractor's plant to the site or sites of work, at the site of
work while o=, official business, between the sites of work, and
return to the i plant of the contractor. Government transportation
facilities for essential travel will -provided only for official
business and on an as needed" basis when approved by the appropriate
military unii: mommoder. Normally, Government transportation requests
will be iseoid for procuring oosmeraisl transportation aooo~raidatlons.
(b) In oases where the Government does not Provide such
essential tr u sportation and the contractor, upon receipt proper
approval, fu?nishes the necessary transportation, tljp. !rill ,diall
be an atl ar As item for redmburssmsat at the actuala cad ;i
obixta bbor r. i t',b orisation for reimbursable travel will be limited
to t $t ubid a is essential to the aaoemplishment of the required
services' and such autdaarisa dues not include authority for the
tranaportati an of dependents, household goods or privately-owned
vehicles.
89CTION I - BUM
(a) The Air Force uniform is not authorised for wear by the
contractor's personnel. In the cent tal- limits of the United States.
The uniform will be worn in overseas theatre when proscribed by the
theatre smss audsr and then in the assnsr as outlined in T. 0. 00-25-174.
Any such required Air Pores uniform, will be purchased from the Air
Force clothing sales stores under the authority and in accordance
with prooodsr" outlined in paragraph 3.2(7) Section 5, Tolvaee I
ON 67-1. t pecicific items and quantities viii be controlled by the
theatre coca ender in accordance with paragraph 22, Section 5, Votmr
II, ON 67-1.. leisbu~rsement claims for required uniform purchases
will be subs itantiated by receipted sales slips (dT Form 656). Total
reimb s -t for uniforms for each contractor personnel viii not
exceed $1b0?
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Cantrsot No. 50-58
(b)
item of prc1aiothiag aid .Pr' br its rd by the using
for the psrtorwnes
Air Toros oat: titY as ooasi"rsd nsmmarY
of rsgnirsd wprtioq. Tbs iu d arti03s0 win be roturnsd to
tbt issuing a Mies prior to rwrarl.t or rotation.
SPRIT
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SECRET
Contrast No. SC-58
1, Paridsh the serviees of contractor personnel to assist in
the naintensane e< of +squipssnt being procured by the 0ovsrnrnt under f 3
$ ~ ~7J
Contrast No. 11.1914. SUM ssrvfees shall not ezoeed four (4) c 1"''
CA~
aircraft teeht deal representatives and shall be furnished at the las(s) and the price(s) set forth belows
a. Domestic Service
$1,543.38 per mm%-e'nth
50.77 per mob -day
b. Oversees Servioss
$1,593.85 per wan?srcnth
52.43 per n-day
2. Purn!.eh the services of Auto Pilot Held Engineers. Such
services absX. not wooed tuo (2) Auto Pilot Field and
shall be iurn:.shsd at the place(s) and at the prices set forth
below: r 6
a, Domestic Services o V L4, luks .
$1., 31,3.00 per errs-math r ,
b. loreripn Services
$1,622.58 per aan..ao nth r
53.37 per nan-filar
Note: '1's rates set forth in Itia 2 a and b above are subject
?eo confirsatien by Lear, Incorporated subcontractor as
jr WaMecontract with Lockheed expires on 16 July 1957.
An extension of another year has been requested by
.
3. Trannportation. The rates do not include costs for
trawl. An a shunt of $803 has included in the sans set forth
in ZCTION D, paragraph 3 to cover rtation furnished under the
previsions of dECTIon J. At Ps,' ..-14.x. (
~Lj
-9-
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C tract No. SC-58
IU CV GIN L MMIMON3
1.
MOVIIIE:O11113
2.
CHADIM
3.
I1DPMON
4.
S.
PAS;
AIIIGMXT C! CI-A
6.
T 3 .,, 1? AID LOCs M TAM
7.
7AULT
8.
irtt
9.
OO i9ICT X AM
10.
U.
!3(z *-Dt 1J I Ci 1912
IO DI MAT1OP IN IWIDVIGR
12.
c2tl MA S SOT TO B IT
13.
O 0 Y P A1' A GAM ' ODi T Y-US
14.
TUN 101 >P O0N CE OF 2VE G
RMNT
15.
==SAM FM W= M 1319" CBS
16.
I l=A* AND AMT
17.
EZM NA'!'TOI or ITAXMA
3a.
GRA21MIS
19.
20.
P IOD CT YMMUNUMAGE,
21.
'M" TG' ~ 1 11-" 1"' IMMI BY TIM Q i t VT
22.
KCLITAX 3g0*ITY RAIDUU A
23.
QOV== IT?WOU PliL PW=
24.
ALTSAT] O
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GENERAL PROVISIONS
(TECHNICAL SERVICES CONTRACTS)
1. DEFINITIONS.--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 of the
Department, and the head or any assistant head of the executive agency; and the term "his duly authorized repre-
sentative" means any person or persons or board (other than the Contracting Officer) authorized to act for the
Secretary.
(b) The term "Contracting Officer" means the person executing this contract on behalf of the Government,
and any other officer or civilian employee who is a properly designated Contracting Officer; and the term includes,
except as otherwise provided in this contract, the authorized representative of a Contracting Officer acting within
the limits of his authority. The Commander of the Air Force activity to which any contractor personnel may be
assigned hereunder is hereby designated an authorized representative of the Contracting Officer with regard to con-
tractor personnel so assigned.
(c) Except as otherwise provided in this contract, the term "subcontracts" includes purchase orders under
this contract.
(d) The terms "contractor employee" and "contractor personnel" as used throughout this contract shall be
deemed to refer to all contract technical services personnel, including all of the specific types of technicians referred
to in the Schedule, and shall be defined as persons, such as advisers, instructors, or technical specialists, obtained
through the contractor to perform services pertaining to the operation and maintenance engineering of Air Force
equipment. The terms include both:
(i) "Technical representatives" who are employees of a manufacturer furnishing end items of equipment
to the Air Force, and furnishing services only in connection with such end items; and
(ii) "Contract technicians" who are employees of a commercial concern furnishing services to the Air
Force at least a part of which are in connection with end items not manufactured by the Contractor.
(e) The term "man month" as used herein shall be deemed to be the time devoted to the performance of
services hereunder by one contractor employee during a period of one calendar month.
(f) The term "continental limits of the United States" as used herein means any place within the territorial
limits of the 48 states and the District of Columbia.
(g) The term "domestic services" as used herein means services within the continental limits of the United
States.
(h) The term "overseas" as used herein means any place outside the continental limits of the United States.
2. CHANGES.-The Contracting Officer may, at any time, by a written order, and without notice to the sureties,
if any, make changes in or additions to drawings and specifications, issue additional instructions, require modified
or additional work or services within the general scope of the contract, change the place of delivery or method of
shipment, or the amount of Government furnished property. If ant' such change causes an increase or decrease in
the cost of, or the time required for, performance of this contract, an equitable adjustment shall be made in the
contract price, or time of performance, or both; and the contract shall be modified in writing accordingly. Any claim
by the Contractor for adjustment under this clause must be asserted within sixty (60) days from the date of
receipt by the Contractor of the notification of change: provided, however, that the Contracting Officer, if he decides
that the facts justify such action, may receive and act upon any such claim asserted at any time prior to final
payment under this contract. Failure to agree to any adjustment shall be a dispute concerning a question of fact
within the meaning of the clause of this contract entitled "Disputes." However, nothing in this clause shall excuse
the Contractor from proceeding with the contract as changed.
3. INSPECTION.-All services, material and workmanship, shall be subject to inspection and test by repre-
sentatives of the Government. For this purpose, the Contractor shall allow at all reasonable times inspectors and
other Government personnel free access to the plant and operations and shall furnish such facilities, supplies, and
services as may be required for this work. >4?- (, awl
GV
4. PAYMENTS PIS/1
MZ.rr''~ AG~
(a) The Contractor shall be pa" 1n monthly installments upon submissio f properly certified invoices there-
for for services rendered and acc ed less deductions, if any, as herein provided'..
.
(b) Any payments in reimbursement of the cost of any transportation furnished by the Contractor for which
it is entitled to be reimbursed under paragraph (a) of the Clause hereof entitled "Services Furnished by the Gov-
ernment" shall be made upon the submission of properly certified invoices and other evidence satisfactory to the
Contracting Officer covering the expenditures for which reimbursement is so sought.
(c) If this contract provides for overseas services, the domestic rates, if any, specified in the Schedule are
applicable to that portion of the time necessary for travel between the Contractor's plant and the overseas site
which is spent within the continental limits of the United States.
5. ASSIGNMENT OF CLAIMS.-(a) Pursuant to the provisions of the Assignment of Claims Act of 1940,
as amended (31 U.S. Code 203, 41 U.S. Code 15,) if this contract provides for payments aggregating $1,000 or more,
claims for moneys due or to become due 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 may thereafter
be further assigned and reassigned to any such institution. Any such assignment- or reassignment shall cover all
amounts payable under this contract and not already paid, and shall not be made to more than one party, except
that any such assignment or reassignment may be made to one party as agent or trustee for two or more parties
participating in such financing. Notwithstanding any other provision of this contract, payments to any assignee of
any moneys due or to become due under this contract shall not, to the extent provided in said Act, as amended, be
subject to reduction or set-off.
MCP 71-14 (I JUL 56)
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(b) In no event shall copies of this contract or of any plans, specifications, or other similar documents relat-
ing to work under this contract, if marked "Top Secret, Secret," or Confidential, " be furnished to any assignee
of any claim arising under this contract or to any other person not entitled to receive the same; provided that
a copy of 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 authorization of the Contracting Officer.
6. FEDERAL, STATE AND LOCAL TAXES.-(a) Definitions. As used throughout this clause, the following
terms shall have the meanings set forth below-
(i) The term "direct tax" means any tax or duty directly applicable to the completed supplies or services
(as distinguished from taxes directly applicable to materials and components used in the manufacture or furnish-
ing of the completed supplies or services) covered by this contract, or any other tax or duty from which the Con-
tractor or this transaction is exempt. It includes any tax or duty directly applicable to the importation, produc-
tion, processing, manufacture, construction, sale, or use of such supplies or services; it also includes any tax
levied on, with respect to, or measured by sales, receipts from sales, or use of the supplies or services covered
by this contract. The term does not include transportation taxes, unemployment compensation taxes, social security
taxes, income taxes, excess-profits taxes, capital stock taxes, property taxes, and such other taxes as are not with-
in the definition of the term "direct tax" as set forth above in this paragraph.
(ii) The term "contract date" means the effective date of this contract if it is a negotiated contract, or
the date set for the opening of bids if it is a contract entered into as a result of formal advertising. For the pur-
pose of any additional procurement of supplies or services called for by an agreement supplemental hereto, the
term "contract date" shall refer to the date of such supplemental agreement.
(b) Federal Taxes. Except as may be otherwise provided in this contract, the contract price includes all ap-
plicable Federal taxes in effect on the contract date.
(c) State or Local Taxes. Except as may be otherwise provided in this contract, the contract price does not
include any State or local direct tax in effect on the contract date.
(d) Evidence of Exemption. The Government agrees, upon request of the Contractor, unless there exists no
legal basis to sustain an exemption, to furnish a Tax Exemption Certificate or other similar evidence of exemption
with respect to any direct tax not included in the contract price pursuant to this clause; and the Contractor
agrees, in the event of the refusal of the applicable taxing authority to accept such evidence of exemption, (i)
promptly to notify the Contracting Officer of such refusal, (ii) to cause the tax in question to be paid in such
manner as to preserve all rights to refund thereof, and (iii) if so directed by the Contracting Officer, to take all
necessary action, in cooperation with and for the benefit of the Government, to secure a refund of such tax (in
which event the Government agrees to reimburse the Contractor for any and all reasonable expenses incurred at
its direction.)
(e) Price Adjustment. If, after the contract date, (i) the Federal Government or any State or local govern-
ment either imposes or increases (or removes an exemption with respect to) any direct tax or any tax directly
applicable to the materials or components used in the manufacture or furnishing of the completed supplies or
services covered by this contract, or (ii) the Federal Government or any State or local government refuses to
accept the evidence of exemption, furnished under paragraph (d) hereof, with respect to any direct tax excluded
from the contract price, or (iii) the Federal Government does not furnish a tax exemption certificate or other similar
evidence of exemption with respect to any direct tax excluded from the contract price, and if under either (i), (ii), or
(iii) the Contractor is obliged to and does pay or bear the burden of any such tax (and does not secure a refund
thereof), the contract price shall be correspondingly increased, and if interest and penalties are incurred by reason of
delay in payment of such tax on the instruction of the Contracting Officer, and such interest and penalties are legally
imposed, the contract price shall be correspondingly increased. If, after the contract date, the Contractor is re-
lieved in whole or in part from the payment or the burden of any direct tax included in the contract price, or any
tax directly applicable to the materials or components used in the manufacture or furnishing of the completed
supplies or services covered by this contract, the Contractor agrees promptly to notify the Contracting Officer of
such relief, and the contract price shall be correspondingly decreased or the amount of such relief paid over to
the Government. Invoices or vouchers covering any increase or decrease in contract price pursuant to the provisions
of this paragraph shall state the amount thereof, as a separate added or deducted item, and shall identify the
particular tax imposed, increased, elminated, or decreased.
(f) Refund or Drawback. If any tax or duty has been included in the contract price as adjusted under para-
graph (e) of this clause, and if the Contractor is entitled to a refund or drawback by reason of the export or re-
export of supplies covered by this contract, or of materials or components used in the manufacture or furnishing
of the completed supplies or services covered by this contract, the Contractor agrees that he will promptly notify
the Contracting Officer thereof and that the amount of any such refund or drawback obtained will be paid over to
the Government or credited against amounts due from the Government under this contract; provided, however, that
the Contractor shall not be required to apply for such refund or drawback unless so requested by the Contracting
Officer.
7. DEFAULT.-(a) The Government may, subject to the provisions of paragraph (b) below, by written
Notice of Default to the Contractor terminate the whole or any part of this contract in any one of the following
circumstances:
(i) if the Contractor fails to make delivery of the supplies or to perform services within the time specified
herein or any extension thereof; or
(ii) if the Contractor fails to perform any of the other provisions of this contract, or so fails to make
progress as to endanger performance of this contract in accordance with its terms, and in either of these two
circumstances does not cure such failure within a period of ten (10) days (or such longer period as the Contract-
ing Officer may authorize in writing) after receipt of notice from the Contracting Officer specifying such a failure.
(b) The Contractor shall not be liable for any excess costs if any failure to perform the contract arises out
of causes beyond the control and without the fault or negligence of the Contractor. Such causes include, but are
not restricted to, acts of God or of the public enemy, acts of the Government, fires, floods, epidemics, quarantine
restrictions, strikes, freight embargoes, unusually severe weather, and defaults of subcontractors due to any of
such causes unless the Contracting Officer shall determine that the supplies or services to be furnished by the sub-
contractor were obtainable from other sources in sufficient time to permit the Contractor to meet the required
delivery schedule.
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(c) In the event the Government terminates this contract in whole or in part as provided in paragraph (a)
of this clause, the Government may procure, upon such terms and in such manner as the Contracting Officer may
deem appropriate, supplies or services similar to those so terminated, and the Contractor shall be liable to the
Government for any excess costs for such similar supplies or services, provided that, the Contractor shall continue
the performance of this contract to the extent not terminated under the provisions of this clause.
(d) If this contract is terminated as provided in paragraph (a) of this clause, the Government, in addition
to any other rights provided in this clause, may require the Contractor to transfer title and deliver to the Govern-
ment in the manner and to the extent directed by the Contracting Officer, (i) any completed supplies, and (ii)
such partially completed supplies and materials, parts, tools, dies, jigs, fixtures, plans, drawings, information, and
contract rights (hereinafter called "manufacturing materials") as the Contractor has specifically produced or
specifically acquired for the performance of such part of this contract as has been terminated; and the Contractor
shall, upon direction of the Contracting Officer, protect and preserve property in possession of the Contractor in
which the Government has an interest. The Government shall pay to the Contractor the contract price for com-
pleted supplies delivered to and accepted by the Government, and the amount agreed upon by the Contractor and
the Contracting Officer for manufacturing materials delivered to and accepted by the Government and for the
protection and preservation of property. Failure to agree shall be a dispute concerning a question of fact within
the meaning of the clause of this contract entitled "Disputes."
(e) If, after notice of termination of this contract under the provisions of paragraph (a) of this clause, it is
determined that the failure to perform this contract is due to causes beyond the control and without the fault or
negligence of the Contractor pursuant to the provisions of paragraph (b) of this clause, such Notice of Default
shall be deemed to have been issued pursuant to the clause of this contract entitled "Termination for Convenience
of the Government," and the rights and obligations of the parties hereto shall in such event be governed by such
clause. (Except as otherwise provided in this contract, this paragraph (e) applies only if this contract is with a
military department.)
(f) The rights and remedies of the Government provided in this clause shall not be exclusive and are in
addition to any other rights and remedies provided by law or under this contract.
8. DISPUTES.-Except as otherwise provided in this contract, any dispute concerning a question of fact aris-
ing under this contract which is not disposed of by agreement shall be decided by the Contracting Officer, who
shall reduce his decision to writing and mail or otherwise furnish a copy thereof to the Contractor. Within thirty
(30) days from the date of receipt of such copy, the Contractor may appeal by mailing or otherwise furnishing
to the Contracting Officer a written appeal addressed to the Secretary, and the decision of the Secretary or his duly
authorized representative for the hearing of such appeals shall, unless determined by a court of competent juris-
diction to have been fraudulent or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad
faith or not supported by substantial evidence be final and conclusive; provided that, if no such appeal is taken,
the decision of the Contracting Officer 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. Pending final decision of a dispute hereunder, the Contractor shall proceed diligently with the per-
formance of the contract and in accordance with the Contracting Officer's decision.
9. CONVICT LABOR.-In connection with the performance of work under this contract, the Contractor agrees
not to employ any persons undergoing sentence of imprisonment at hard labor.
10. EIGHT-HOUR LAW OF 1912.-This contract to the extent that it is of a character specified in the Eight-
Hour Law of 1912 as amended (40 U.S. Code 324-326) and is not covered by the Walsh-Healey Public Contracts
Act (41 U.S. Code 35-45), is subject to the following provisions and exceptions of said Eight-Hour Law of 1912
as amended, and to all other provisions and exceptions of said 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 for any part of the said work, 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 such laborer and mechanic 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 hours per day at not less than one and one-
half times the basic rate of pay. For each violation of the requirements of this clause a penalty of five dol-
lars 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 accordance with this clause; and all penalties thus imposed shall be
withheld for the use and benefit of the Government.
11. NONDISCRIMINATION IN EMPLOYMENT.-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 employ-
ment, upgrading, demotion, or transfer; recruitment or recruitment advertising; lay-off or termination; rates of pay
or other forms of compensation; and selection for training, including apprenticeship. The Contractor agrees to post
hereafter in conspicuous places, available for employees and applicants for employment, notices to be provided by the
Contracting Officer setting forth the provisions of the nondiscrimination clause.
The Contractor further agrees to insert the foregoing provision in all subcontracts hereunder, except subcon-
tracts for standard commercial supplies or raw materials.
12. 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.
13. COVENANT AGAINST CONTINGENT FEES.-The Contractor warrants that no person or selling agency
has been employed or retained to solicit or secure this contract upon an agreement or understanding for a com-
mission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established com-
mercial 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 oL,in its
discretion to deduct from the contract price or consideration the full amount of such commission, percentage,
brokerage, or contingent fee. - ..~e.
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14.. TERMINATION 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 time
in part, whenever the Contracting Officer shall determine that such termination is in the best interests of the
Government. Any such termination shall be effected by delivery to the Contractor of a Notice of Termination
specifying the extent to which performance of work under the contract is terminated, and the date upon which
such termination becomes effective.
(b) After receipt of a Notice of Termination, and except as otherwise directed by the Contracting Officer, the
Contractor shall (1) discontinue all work to the extent and on the dates specified in such Notice; (2) proceed
promptly with the return to its plant of such of its Contractor personnel as may be covered by said Notice; and
(3) transfer title and deliver to the Government, in the manner, and to the extent and at the times directed by
the Contracting Officer, the completed and partially completed work, material, plans, drawings, data, information,
reports, and other property produced as a part of, or acquired in connection with the performance of the work
terminated in such Notice.
(c) Upon termination of work, as provided in this clause, the Contractor shall, in respect to such Contractor
Personnel as may be covered by said Notice of Termination, be paid that part of the fixed price set forth in the
Clause of this contract entitled "Consideration and Payment" which has accrued for services rendered hereunder
up to the effective date of such Notice, and for time necessary for such Contractor Personnel to return to the plant
of the Contractor after the effective date of said Notice and any other amounts properly owing to the Contractor
under said "Consideration and Payment" clause which are theretofore unpaid. If, at the date of said Notice, certain
costs have actually been incurred by the Contractor in connection with the contract preliminary to the departure
of the Contractor Personnel covered by said Notice of Termination from the plant of the Contractor which are
allocable to the entire period of performance contemplated hereunder, the Government will pay to the Con-
tractor such sum as the Contracting Officer and the Contractor may agree is properly allocable to the termi-
nated portion of the contract. Settlement under the provisions of this paragraph (c) shall be evidenced by a Supple-
mental Agreement to the contract. In the event of the failure of -the Contractor and the Contracting Officer to
agree upon the whole amount to be paid to the Contractor by reason of the termination of work pursuant to this
clause, the Contracting Officer shall determine, on the basis of information available to him, the amount, if any,
due to the Contractor by reason of the termination and shall pay to the Contractor the amount so determined.
(d) Any dispute arising out of the termination of the contract under this clause shall be decided in accordance
with the procedure prescribed in the "Disputes" clause hereof.
15. SUBCONTRACTS FOR WORK OR SERVICES.-No contract shall be made by the Contractor with any
other party for furnishing any of the work or services herein contracted for without the written approval of the
Contracting Officer, but this provision will not be taken as requiring the approval of contracts of employment be-
tween the Contractor and personnel assigned for services thereunder.
16. INSPECTION AND AUDIT.-(a) The Contractor agrees that its books and records and its plant, or such
parts thereof. as may be engaged in the performance of this contract shall at all reasonable times be subject to
inspection and audit by any authorized representative of the department.
(b) The Contractor shall cause a like provision to be included in all subcontracts hereunder.
17. EXAMINATION OF RECORDS.-(The provisions of this clause shall be applicable only if this contract
is a negotiated contract in excess of $1,000.)-(a) The Contractor agrees that the Comptroller General of the
United States or any of his duly authorized representatives shall, until the expiration of three (3) years after
final payment under this contract, have access to and the right to examine any directly pertinent books, documents,
papers, and records of the Contractor involving transactions related to this contract.
(b) The Contractor further agrees to include in all his subcontracts hereunder a provision to the effect that
the subcontractor agrees that the Comptroller General of the United States or any of his duly authorized repre-
sentatives shall, until the expiration of three (3) years after final payment under the subcontract have access to
and the right to examine any directly pertinent books, documents, papers, and records of such subcontractor in-
volving transactions related to the subcontract. The term "Subcontract" as used in this clause excludes (i) pur-
chase orders not exceeding $1,000 and (ii) subcontracts or purchase orders for public utility services at rates
established for uniform applicability to the general public.
(c) The provisions of paragraphs (a) and (b) above are in addition to any other provisions of this contract
relating to access to, retention of, and inspection of records.
18. GRATUITIES.-(a) The Government may, by written notice to the Contractor, terminate the right of the
Contractor to proceed under this contract if it is found, after notice and hearing, by the Secretary or his duly
authorized representative that gratuities (in the form of entertainment gifts or otherwise) were offered or given
by the Contractor, or any agent or representative of the Contractor, to any officer or employee of the Govern-
ment with a view toward securing a contract or securing favorable treatment with respect to the awarding or
amending, or the making of any determinations with respect to the performing, of such contract; provided that
the existence of the facts upon which the Secretary or his duly authorized representative makes such findings shall
be in issue and may be reviewed in any competent court.
(b) In the event this contract is terminated as provided in paragraph (a) hereof, the Government shall be
entitled (i) to pursue the same remedies against the Contractor as it could pursue in the event of a breach of
the contract by the Contractor, and (ii) as a penalty in addition to any other damages to which it may be entitled
by law, to exemplary damages in an amount (as determined by the Secretary or his duly authorized representa-
tive) which shall be not less than three nor more than ten times the cost incurred by the Contractor in providing
any such gratuities to any such officer or employee.
(c) The rights and remedies of the Government provided in this clause shall not be exclusive and are in
addition to any other rights and remedies provided by law or under this contract.
19. CONTRACTOR PERSONNEL.-(a) Subject to the provisions of PART II of the Schedule, the number of
contractor personnel and the number of man-months specified in the Schedule may be exceeded with the prior
written approval of the Contracting Officer, but only to the extent necessary to provide continuous service in the
event that a transfer, reassignment, or other cause would result in an interruption of service.
(b) Contractor personnel will normally be assigned to major air command headquarters. Such personnel
shall perform services at such places within the command as the Contracting Officer may direct.
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(c) The Contractor shall be responsible for selecting personnel who are well qualified to perform the requix
services, for supervising techniques used in their work, and for keeping them informed of all improvements, change.
and methods of operations.
(d) Contractor personnel, upon assignment, either within the continental limits of the United States or
overseas, are subject to call 24 hours a day. Normally they will perform their assigned duties on the same
daily and hourly basis as the personnel of the organization to which they are assigned. Holidays will be observed
in accordance with the direction of the Commander of the air activity to which Contractor personnel are assigned.
In the event that a Contractor employee is required to perform services hereunder on an observed holiday, reim-
bursement shall be made as provided in the Schedule.
(e) The Contractor shall be required to furnish a replacement for any Contractor personnel who may be
returned to the Contractor's plant or become incapacitated or die or otherwise be unable to complete performance
hereunder prior to the expiration of the period of performance, unless otherwise agreed upon by the parties hereto.
(f) The Contractor shall furnish all necessary equipment, salaries and wages of its personnel, all costs of
subsistence and lodging, costs of passports, insurance, and any and all other costs in connection with the services to
be rendered hereunder except as otherwise provided in the Clause hereof entitled "Services Furnished by the Gov-
ernment."
(g) The Contractor, promptly after receipt of official notice from the Contracting Officer that the services
of Contractor personnel are required hereunder, shall furnish in writing to the Contracting Officer the name of
each person assigned by the Contractor under this contract, his qualifications, his security clearance, and such
other pertinent information as the Contracting Officer may request. The Contractor shall have the right to replace
or transfer its personnel and to substitute other qualified personnel in lieu thereof; provided, however, that such
transfers or reassignments will not be due cause for a break in services rendered and that such replacements or
transfers have been coordinated with the Contracting Officer. Any transfers or reassignments for the convenience
of the Contractor, including travel and training cost of replacement personnel, shall be at the Contractor's expense.
Transfers and reassignments of personnel shall be construed as being for the convenience of the Contractor unless
directed or approved by the Contracting Officer or his authorized representative. The selection of personnel by
the Contractor shall be subject to approval of the Contracting Officer.
(h) The Contracting Officer may, if he finds it to be in the best interest of the Government, direct the Con-
tractor to remove, and the Contractor shall remove, any employee from an assignment to perform services under
this contract.
(i) The Contractor shall furnish to and file with the Contracting Officer such copies of the Employment Con-
tracts, if any, entered into with Contractor personnel engaged in performing the services to be rendered under
this contract, as may be required by the Contracting Officer.
(j) Personnel employed by the Contractor hereunder and sent overseas Jllall ue accremted to the United States
Air Force with a recognized status under the Hague Regulations and the Geneva Covenants, shall be given
proper credentials and identification cards, shall wear a uniform when prescribed by the theater commander, shall
be subject to appropriate recognition under the rules of war, and shall be subject to such regulations as have been
or may hereafter be issued by the United States Air Force governing Contractor personnel serving with the United
States Air Force in foreign theaters of operation.
(k) In accordance with the Uniform Code of Military Justice, Article 2, Contractor personnel serving with,
employed by, or accompanying an armed force outside the continental limits of the United States and territories
specified in Article 2(11) and 2(12) are subject to the Uniform Code of Military Justice.
20. PERIOD OF PERFORMANCE.-(a) The services shall be performed during the period set forth in PART
III of the Schedule, but the time of starting and ending performance and the number of Contractor personnel fur-
nished at any time shall be as directed by the Contracting Officer.
(b) It is understood that time necessary for Contractor personnel to proceed from the plant or plants of the
Contractor to the site or sites for the performance of services hereunder shall be considered as time spent in the
performance of services hereunder. It is also understood that time necessary for the transfer of Contractor per-
sonnel between different sites for the performance of services hereunder and time necessary for the return of
such personnel to the plant of the Contractor shall be considered as time spent in the performance of services
hereunder.
21. SERVICES FURNISHED BY THE GOVERNMENT.-In connection with services to be rendered hereunder,
the Government shall furnish and supply to the Contractor the following facilities and services:
(a) Suitable transportation for Contractor personnel and their baggage and for any equipment to be furnished
by the Contractor hereunder from the Contractor's plant to the site or sites of work, at any site of work while
on official business, between sites of work, and return to the plant of the Contractor. In the event of failure by
the Government to furnish suitable transportation, the Contractor shall furnish such transportation, and the Gov-
ernment will reimburse the Contractor for the actual and reasonable cost of such transportation, provided the
same has been approved as provided in this paragraph. All travel of Contractor personnel will require prior approval
from the Commander, Air Materiel Command, or the Commander of the major Air Command having operating
responsibility in connection with this contract, except that prior approval of nonexpense travel in connection with
the unit mission is not required.
(b) Use of Government communication facilities for the exchange of messages between Contractor personnel
and the Contractor, where and when available if the Contractor is unable to procure commercial communication
services; but the use thereof shall be subject to the regulations of the Representatives of the Government in charge
thereof.
(c) Use of Government services and agencies in the transmittal of funds to Contractor personnel and as a
medium of commercial exchange for said personnel when adequate commercial services and facilities are not
available.
(d) Contractor personnel assigned to Air Force activities will be accorded the same privileges as commis-
sioned officers with regard to bachelor officer quarters, local transportation and messing, when available. Emer-
gency medical facilities may be furnished as prescribed by applicable regulations. -?-r
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22. MILITARY SECURITY REQUIREMENTS.-(a) The provisions of this clause shall apply to the extent
that this contract involves access to information classified "Confidential" including "Confidential-Modified Handling
Authorized" or higher.
(b) The Government shall notify the Contractor of the security classification of this contract, and the
elements thereof, and of any subsequent revisions in such security classification, by the use of a Security Require-
ments Check List (DD Forms 254 and 254-1).
(c) To the extent the Government has indicated as of the date of this contract or thereafter indicates
security classification under this contract as provided in paragraph (b) above, the Contractor shall safeguard
all classified elements of this contract and shall provide and maintain a system of security controls within its
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 date of this contract, and any modification to the Security
Agreement for the purpose of adapting the Manual to the Contractor's business; and
(ii) any amendments to said Manual made after the date of this contract, notice of which has been fur-
nished to the Contractor by the Security Office of the Military Department having security cognizance over the
facility.
(d) Representatives of the Military Department having security cognizance over the facility and representa-
tives of the Contracting Military Department shall have the right to inspect at reasonable intervals the proce-
dures, methods, and facilities utilized by the Contractor in complying with the security requirements under this
contract. Should the Government, through these representatives, determine that the Contractor is not complying
with the security requirements of this contract, the Contractor shall be informed in writing by the Security Office
of the cognizant Military Department of the proper action to be taken in order to effect compliance with such
requirements.
(e) If subsequent to the date of this contract, the security classifications or security requirements under this
contract are changed by the Government as provided in this clause and the security costs under this contract
are thereby increased or decreased, the contract price shall be subject to an equitable adjustment by reason of
such increased or decreased costs. Any equitable adjustment shall be accomplished in the same manner as if such
changes were directed under the "Changes" clause in this contract.
(f) The Contractor agrees to insert, in all subcontracts hereunder which involve access to classified infor-
mation, provisions which shall conform substantially to the language of this clause, including this paragraph (f)
but excluding the last sentence of paragraph (e) of this clause.
(g) The Contractor also agrees that it shall determine that any subcontractor proposed by it for the fur-
nishing of supplies and services which will involve access to classified information in the Contractor's custody has
been granted an appropriate facility security clearance, which is still in effect, prior to being accorded access to
such classified information.
23. GOVERNMENT-FURNISHED PROPERTY..-(a) The Government shall deliver to the Contractor, for use
in connection with and under the terms of this contract, the property described in the Schedule or specifications,
together with such related data and information as the Contractor may request and as may reasonably be required
for the intended use of such property (hereinafter referred to as "Government-furnished Property"). The delivery
or performance dates for the supplies or services to be furnished by the Contractor under this contract are based
upon the expectation that Government-furnished Property suitable for use will be delivered to the Contractor at
the times stated in the Schedule or, if not so stated, in sufficient time to enable the Contractor to meet such de-
livery or performance dates. In the event that Government-furnished Property is not delivered to the Contractor
by such time or times, the Contracting Officer shall, upon timely written request made by the Contractor, make
a determination of the delay occasioned the Contractor thereby, and shall equitably adjust the delivery or per-
formance dates or the contract price, or both, and any other contractual provision affected by such delay, in ac-
cordance with the procedures provided for in the clause of this contract entitled "Changes." In the event the
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 Con-
tracting Officer, either (i) return such property at the Government's expense or otherwise dispose of the property,
or (ii) effect repairs or modifications. Upon the completion of (i) or (ii) above, the Contracting Officer upon
written request of the Contractor shall equitably adjust the delivery or performance dates or the contract price,
or both, and any other contractual provision affected by the rejection 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 Property or delivery of such property in a condition not
suitable for its intended use.
(b) By notice in writing the Contracting Officer may decrease the property furnished or to be furnished by
the Government under this contract. In any such case, the Contracting Officer upon the written request of the Con-
tractor shall equitably adjust the delivery or performance dates or the contract price, or both, and any other
contractual provisions affected by the decrease, in accordance with the procedures provided for in the clause of
this contract entitled "Changes."
(c) Title to the Government-furnished Property shall remain in the Government. Title to Government-fur-
nished Property shall not be affected by the incorporation or attachment thereof to any property not owned by
the Government, nor shall such Government-furnished Property, or any part thereof, be or become a fixture or
lose its idenity as personalty by reason of affixation to any realty. The Contractor shall maintain adequate prop-
erty control records of Government-furnished Property in accordance with the requirements of the "Manual for
Control of Government Property in Possession of Contractors" (Appendix B, Armed Services Procurement Reg-
ulation) 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-furnished Property shall, unless otherwise provided herein, be used only for the per-
formance 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-furnished Property, until disposed of by the
Contractor in accordance with this clause. In the event that any damage occurs to Government-furnished Property
the risk of which has been assumed by the Government under this contract, the Government shall replace such items
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or the Contractor shall make such repair of the property as the Government directs; provided, however, that if
the Contractor cannot effect such repair within the time required, the Contractor shall dispose of such property
in the manner directed by the Contracting Officer. The contract price includes no compensation to the Contractor
for the performance of any repair or replacement for which the Government is responsible, and an equitable ad-
justment will be made in the contract price for any such repair or replacement of Government-furnished Property
made at the direction of the Government. Any repair or replacement for which the Contractor is responsible under
the provisions of this contract shall be accomplished by the Contractor at its own expense.
(f) (i) Except for loss, destruction or damage resulting from a failure of the Contractor due to willful
misconduct or lack of good faith of any of the Contractor's managerial personnel as defined herein, to maintain
and administer the program for the maintenance, repair, protection and preservation of the Government-furnished
Property, as required by paragraph (e) hereof, and except as specifically provided in this contract, the Contractor
shall not be liable for loss or destruction of or damage to the Government-furnished Property (A) caused by any
peril while the property is in transit off the Contractor's premises, or (B) caused by any of the following perils
while the property is on the Contractor's or subcontractor's premises, or on any other premises where such prop-
erty may properly be located, or by removal therefrom because of any of the following perils:
(I) Fire; lightning; windstorm, cyclone, tornado, hail; explosion; riot, riot attending a strike, civil com-
motion; vandalism and malicious mischief; sabotage; aircraft or objects falling therefrom; vehicles run-
ning on land or tracks, excluding vehicles owned or operated by the Contractor or any agent or employee
of the Contractor; smoke; sprinkler leakage; earthquake or volcanic eruption; flood, meaning thereby ris-
ing of a body of water; hostile or warlike action, including action in hindering, combating, or defending
against an actual, impending or expected attack by any government or sovereign power (de jure or de
facto), or by any authority using military, naval, or air forces, or by an agent of any such government,
power, authority, or forces; or
(II) Other peril, of a type not listed above, if such other peril is customarily covered by insurance (or
by a reserve for self-insurance) in accordance with the normal practice of the Contractor, or the prevail-
ing practice in the industry in which the Contractor is engaged with respect to similar property in the same
general locale.
The perils as set forth in (A) and (B) above are hereinafter called "excepted perils."
This clause shall not be construed as relieving a subcontractor from liability for loss or destruction of or damage
to the Government-furnished Property while in its possession or control, except to the extent that the sub-
contract, 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 contain appropriate provisions requiring
the return of all Government-furnished Property in as good condition as when received, except for reasonable wear
and tear or for the utilization of the property in accordance with the provisions of the prime contract.
The term "Contractor's managerial personnel" as used herein means the Contractor's directors, officers and any
of its managers, superintendents, or other equivalent representatives who have supervision or direction of (I) all
or substantially all of the Contractor's business; (II) all or substantially all of the Contractor's operation at any
one plant or separate location at which the contract is being performed; (III) a separate and complete major in-
dustrial operation in connection with the performance of this contract.
(ii) The Contractor represents that it is not including in the price hereunder, and agrees that it will not
hereafter include in any price to the Government, any charge or reserve for insurance (including self-insurance
funds or reserve) covering loss or destruction of or damage to the Government-furnished Property caused by
any excepted peril.
(iii) Upon the happening of loss or destruction of or damage to any Government-furnished Property caused
by an excepted peril, the Contractor shall notify the Contracting Officer thereof, and shall communicate with the
Loss and Salvage Organization, if any, now or hereafter designated by the Contracting Officer, and with the as-
sistance of the Loss and Salvage Organization so designated (unless the Contracting Officer has directed that no
such organization be employed), shall take all reasonable steps to protect the Government-furnished Property from
further damage, separate the damaged and undamaged Government-furnished Property, put all the Government-
furnished Property in the best possible order, and furnish to the Contracting Officer a statement of: (A) the lost,
destroyed and damaged Government-furnished Property (B) the time and origin of the loss, destruction or damage,
(C) all known interests in commingled property of which the Government-furnished Property is a part, and (D)
the insurance, if any, covering any part of or interest in such commingled property. The Contractor shall be re-
imbursed for the expenditures made by it in performing its obligations under this subparagraph (iii) (including
charges made to the Contractor by the Loss and Salvage Organization, except any of such charges the payment
of which the Government has, at its option, assumed directly), to the extent approved by the Contracting Officer
and set forth in a Supplemental Agreement.
(iv) With the approval of the Contracting Officer after loss or destruction of or damage to Government-
furnished Property, and subject to such conditions and limitations as may be imposed by the Contracting Officer,
the Contractor may, in order to minimize the loss to the Government or in order to permit resumption of business
or the like, sell for the account of the Government any item of Government-furnished Property which has been
damaged beyond practicable repair, or which is so commingled or combined with property of others, including
the Contractor, that separation is impracticable.
(v) Except to the extent of any loss or destruction of or damage to Government-furnished Property for
which the Contractor is relieved of liability under the foregoing provisions of this clause, and except for reasonable
wear and tear or depreciation, or the utilization of the Government-furnished Property in accordance with the pro-
visions of this contract, the Government-furnished Property (other than property permitted to be sold) shall be
returned to the Government in as good condition as when received by the Contractor in connection with this con-
tract, or as repaired under paragraph (e) above.
(vi) In the event the Contractor is reimbursed or compensated for any loss or destruction of or damage
to the Government-furnished Property, caused by an excepted peril, it shall equitably reimburse the Government.
The Contractor shall do nothing to prejudice the Government's rights 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 ex-
pense, furnish to the Government all reasonable assistance and cooperation (including the prosecution of suit and
the execution of instruments of assignment in favor of the Government) in obtaining recovery. In addition, where
-raw"T
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a subcontractor has not been relieved from liability for any loss or destruction of or damage to the Government-
furnished Property, the Contractor shall enforce the liability of.the subcontractor for such loss or destruction of
or damage to the Government-furnished Property for the benefit of the Government.
(vii) [Where applicable] In the event any aircraft are to be furnished under this contract, any loss or
destruction of, or damage to, such aircraft or other Government-furnished Property occurring in connection with
operations of said aircraft will be governed by the clause of this contract captioned "Flight Risks," to the extent
such clause is, by its terms, applicable.
(g) The Government shall at all reasonable times have access to the premises wherein any Government-fur-
nished Property is located.
(h) Upon the completion of this contract, or at such earlier dates as may be fixed by the Contracting
Officer, the Contractor shall submit, in a form acceptable to the Contracting Officer, inventory schedules covering
all items of Government-furnished Property not consumed in the performance of this contract (including any re-
sulting scrap), or not theretofore delivered to the Government, and shall deliver or make such other disposal of
such Government-furnished Property, as may be directed or authorized by the Contracting Officer. Recoverable
scrap from Government-furnished Property shall be reported in accordance with a procedure and in such form as
the Contracting Officer may direct. The net proceeds of any such disposal shall be credited to the contract price
or shall be paid in such other manner as the Contracting Officer may direct.
(i) Directions of the Contracting Officer and communications of the Contractor issued pursuant to this Clause
shall be in writing.
(j) Such equipment, services, and facilities as are to be furnished and paid for by the Contractor under the
provisions of the clause hereof entitled "Contractor Personnel," if not commercially available to the Contractor
after the Contractor has made every effort to procure the same, may be furnished by the Government. Such equip-
ment, services, and facilities, when supplied by the Government for the Contractor personnel shall be approxi-
mately of the same standard as supplied to commissioned officers of the United States Air Force. In the event
that such equipment, services, and facilities are supplied by the Government, an equitable adjustment of the fixed
price to be paid to the Contractor hereunder shall be made by the Contracting Officer and the contract amended
accordingly. Such equipment and facilities shall be considered Government-furnished Property and subject to the
provisions of this clause.
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contrast No. SC-"B
24. a
(a) Clawrse 16 hersinabove is hereby deleted in its entirety
and in lists thereof substitute the followings
"16.
Thi tractor agrees that its books and records and
its plant, or OMh parts thereof as my be engaged in the
performers a of this contrast shall at all rooaseosblS times
be subject to inspection, and audit when and to the extant
authorised by the Contracting Officer.
(b) The Contractor egress to include in each of his sub-
contracts hereunder which is on a seat or a asst-plus-a?-
fimsd-fee or a prise redetermination basis, Or as a time-
and-material or labor-hour basis, provision for such auzdit
of such swsbeontraets by the Contractor. The Contractor
s sl oondsuct an audit of any such suboentrast when ra-
qia stod to do se by the Contracting Officer.
(b) Clause 17 hereinabove is hereby deleted in its entirety
and in lieu thereof substitute the followings
"17.
A The Contrester agrees that the Contrasting Officer
or any of his duly authorized reprwentatiws shall, until
the expiration of three years after final pgnsnt under
this contract, haw access to and the right to sumdns any
directly pertinent books, doeuveats, papers and records
of the Contractor involving transactions related to this
contrast, including subaorntrects hereemrAer.
(a) Classes 19 heroinabwre is amended by deleting the wards and
figures 'PAST II" in the first line thereof, and substitute the wards
and figures, " AP*NDIX 18.
(d) Clam 20 hereinab ve is amended by deleting the wards and
figures, 'PAW III", in the first and second line reapectivsly, and
in lio thereof substitute the records and figure., ' GTIOI C".
(e) Clause 24 is hereby added to the General Provisions and
reads as follows,
124. In the event any Contractor personnel assigned to duty
under this contrast is found to be missing from his place
of eviployment, whether or not such personnel then actually
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Contract No. SC-58
was engaged in the course of his employment, under
cuiroumrtanoos supporting an inference that his absence
was due to the action of a hostile tome or the force of
any power not allied with the United States in a common
military effort, or is known to have been taken prisoner,
hostage, or otherwise detained by a hostile tome or the
force of any power not allied with the United States in
a semen military effort, the tier spent by such personnel
during mush detention (which shall. be construed to include
the period until such personnel is returned to his place
of employment, or to the United States, or death in fact
is established by a finding by a Federal Security
Mdid nistrator (hereinafter referred to as "Administrator")
or other Federal body having jurisdiction or by other
ovidenoe satisfactory to the Contracting ?tfiser, or death
can legally be premed to have occurred) shall not be
oonsidsred as time spent in the perforasnee of services
hereunder and the Goverment shall not be obligated to make
any payment on account of such personnel ammept as provided
in this paragraph. The Contractor is authorised to and
shall enter into agresrnts with personnel hereunder to pay
benefits to the extent not otherwise paid to such personnel
in the event of, and d ring the time spent by such personnel
during such detention, as construed above, which will equal
the total wage der for such detention, as construed above,
computed an the basis of wage rate being paid such personnel
at the tiws of such detention. Claims for benefits shall be
made under opplisabie law with the Administrator. In the
event that the Contractor is obligated by agreements,
ontharised above, to per and shall have paid benefits in an
amount not paid or payable by the Administrator on account
of such detention of such personnel, the Goverment shall
ply to the Contractor, in respect of such personnel during
the period of such dtsntion, as construed above, such amount
which when added to the=-amount paid or to be paid in respect
of such personnel by the Adainistrator, whether to the
Contractor or otherwise, will equal, the total wale due for
such period of deterntioa-, as construed above, computed on
the basis of wage rate being paid such personnel at the
ties of such, detention. Subject to the availability of
funds theristar, the obligation of the Government to asks
pgornts provided for by this paragraph shall continue in
effect during the period of such detention, as construed
above, and shall survive the earlier expiration or termination
of this centraot."
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