PRECONTRACT APPROVAL RECORD (PART ONE)

Document Type: 
Collection: 
Document Number (FOIA) /ESDN (CREST): 
CIA-RDP67B00820R000200340001-6
Release Decision: 
RIPPUB
Original Classification: 
S
Document Page Count: 
48
Document Creation Date: 
December 9, 2016
Document Release Date: 
April 21, 2001
Sequence Number: 
1
Case Number: 
Publication Date: 
January 16, 1964
Content Type: 
FORM
File: 
AttachmentSize
PDF icon CIA-RDP67B00820R000200340001-6.pdf3.81 MB
Body: 
25X1A 25X1A 25X1A 25X1A A SECRET PRECONTRACT APPROVAL CONTRACTOR Eastman Kodak C ompan.y CONTROL NO. XO-6 /1O C opy f 3 RECORD (PART ONE) CONTRACT NO. AMENDMENT NO. PEI-5 - 16 January 1964 THIS CONTRACT APPROVAL RECORD CONTAINS A RECOMMENDATION SUBMITTED FOR CONCURRENCE OF THE UNDERSIGNED. CONCURRENCE IN THIS PRECONTRACT APPROVAL RECORD IS RECOMMENDED BY THE CON- TRACTING OFFICER. BY CONCURRENCE, THE CHIEF, BUDGET AND FINANCE BRANCH, SIGNIFIES THAT SUFFICIENT FUNDS ARE AVAILABLE (NOT INCLUDING CONTINGENT & EXPOSURE) AND/OR HAVE BEEN ADJUSTED AS PROVIDED IN THIS DOCUMENT. TYPE OF CONTRACT ? L.I. . F.P. REDETERM ? CP I F 0 TECH REP gDEF INITI ZED . PPM, II T&M 0 FISCAL YEAR ? F.P. MI CPFF 0 CALL TYPE 'NO COST FINANCIAL DATA CONTRACT VALUE PREVIOUS OBLIGATION - PRIOR FY NONE PREVIOUS OBLIGATION . CURRENT FY NONE OBLIGATION BY THIS DOCUMENT DESCRIPTION, PROGRAM OR LINE ITEM FISCAL YEAR PROJECT AMOUNT NONE TOTAL THIS OBLIGATION NONE CONTINGENT UPON AVAILABILITY OF FUNDS EXPOSURE LIABILITY RATE DATE RATE DATE CPFF 0/H RATES FIXED THRU T&M RATES FIXED THRU .... NO L DATEDATE /7A PRECONTRACT CONCURREN S , UNIT TYPED NAME SIGNATURE DATE CONTRACTING OFFICER ?1 BUDGET a FINANCE GENERAL COUNSEL Mitell TECHNICAL REPRESENTATIVE 0-...- 4 14 TECHNICAL REPRESENTATIVE CONTRACT SIGNATURE Contracting Officer) DATE DATE MAILED DATE DISTRIBUTED prroved : CIA-R 67IL130 i - 1002003)10-0 _ (79 A FORM 2167 11.63 SECRET GROUP Excluded horn utomcnic downgrading and declassifica ion (12) Approvod For R I 11.001/06/04.ali PRECONTRACT APPROVAL RECORD (PART TWO) IT 020 17KNMA ?40001-0 Eastman Kodak Co. The services and equipment being procured by this Contract No. PNL-5 are in furtherance of the National Defense Program(s), the nature of which cannot be publicly disclosed for security rea- sons. The Contracting Officer therefore determines that this procurement must be accomplished by negotiations pursuant to the authority of Section 3(a) of PL 81-110 and Class Determination and Finding, OXC 2122, signed by the DDCI on 15 October 1961. Certification of funds for this contract will be handled under the pro- cedure approved by the Director of Central Intelligence on 15 December 1956 which, in effect, results in all covert expenses involving issuance of Treasury Checks being accumulated in a separate account within the Finance Division. The amounts in this account will be periodically scheduled for certification of the vouchers by the Director. This procedure eliminates the necessity for a sepa- rate certification of authority under Section 8(b) of Public Law 110, 81st Con- gress (formerly 10(b) - see 85-507 dated 7/7/58) for each contract. The following comments describe the procurement hereby effected, the terms and provisions generally of this contract/amendment, and a resume of major issues negotiated: Contract No. PNL-5 has been drawn to provide for participation by Eastman Kodak Company in a photo working panel comprised of representatives of the Government, educational institutions and commercial organizations. The term of the contract commences on,15 November l963 and expires on 15 March l961 subject to extension by mutual agreement. No monitary payment will be made to Eastman Kodak Company by the Government for performance of this contract since it is the intent of the contractor to render all services, including travel, for the consideration of other contracts currently in force between the contractor and the Government and in the interest of the National Defense. Approved For Roloaso 2001/05/01 : CIA RDP67800820R000200340001 6 SECRET FOl M2 11-63167a GROUP 1 Excluded from automatic downgrading and declassification (12) 25X1A 25X1A Approvkl F61'141ease 2001/05/04: CIA- RI71300820R000200340001-6 (1, 077 kk1 OXC-63l1 Copy,/ of 4 NEGOTIATED CONTRACT Contract No. PNL-5 Eastman Kodak Company Rochester, New York Contract for: See Schedule Amount: See Schedule Mail Invoices to: Performance Period: See Schedule Administrative Data: 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 New Jersey, hereinafter called the Contractor. The parties hereto agree that the Contractor shall perform the services ? set forth in the attached Schedule issued hereunder, for the consider- ation statedtherein. The rights and obligations of the parties to this contract shall be subject to and governed by the attached Schedule, and General Provisions. In the event of any inconsistency between the Schedule and the General Provisions, the Schedule shall control. IN WITNESS WHEREOF, the parties hereto have executed this contract as of 23 JAN 1964 1964. Signatures: THE UNITED STATES OF AMERICA Contracting Officer Approved For Release 2001/05/04: CIA:RQE07B00820R000200340001-6 25X1A 25X1A Approved For Release 2001/05/04: B00820R000200340001-6 CERTIFICATE Contract No.PNL-5 , certify that I am the of the Corpor-Ition named Contractor herein; that who signed this contract on behalf of the Contractor was then 25X1A of said Corporation; that saic Contract w:As duly signed for and in behalf of said Corporation by wIthority of its governing body, and is within scope of its Corporate Powers. 25X1A Approved For Release 2001/05/04: Cl --2- (Corporote Seal) 00820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 INDEX TO SCHEDUTE Page PART I - SERVICES TO BE SUPPLIED AND CONSIDERATION 4 PART II - PERIOD OF PERFORMANCE 5 PART III - PAYMENT FOR WORK AND SERVICES 5 PART IV - WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS. . 5 PART V - SPECIAL SECURITY RESTRICTIONS 6 Approved For Release 2001/05/04: CIA-RD 67600820R000200340001-6 "Moo Approved For Release 2001/05/04 : CIA--RER,67B00820R000200340001-6 PART I - SERVICES TO BE SUPPLIED AND CONSIDERATION a. In consideration of other contracts currently in force between the Contractor and the Government and in the interest of the National Defense the Contractor agrees that it will furnish the services of certain personnel to participate in a scientific panel comprised of representatives of the Government, educational institutions and commercial organizations. The extent to which the contractor may participate in the scientific and technical problems to be considered by the panel shall be subject to mutual agreement between the Technical Representative of the Contracting Officer and the Contractor. The Contractor agrees that it will perform such travel which in its discretion is in the interest of the panel. b. It is understood and agreed that all transactions of the panel and the Contractor's participation in such transactions shall conform to the following conditions: 1) That the panel be organized and meetings conducted in accordance with the requirements of Federal Laws relating to restraint of trade and Executive Order 11007, dated 27 February 1962. 2) That care be exercised to insure that participation by the Contractor's representatives shall not jeopardize the Contractor's subsequent participation in Government contract work through organizational conflict of interest. 3) That in the legal sense, no confidential relationship be established involving the receipt of or disclosure to the Contractor's representatives of information from other members of any committee. 25X1A 4) That the Contractor's representatives on any committee be 25X1A cautioned to consult with Contractor's management i.e. var. concerning further participation in the event that, problems are submitted involving the disclosure of substantial information about or requiring comment or action with respect to equipment produced by others engaged in fields of activity similar to that of the Contractor's organization; and that the Contractor's representatives refrain from making criticisms of competitor's equipment and/or re-engineering competitor's equipment; b) problems are submitted to the committee which would require the disclosure of proprietary information in order to supply what in the Contractor's view might be the most effective solution, and that only submitted information such as engineering reports, test results, etc., required by contract, be made available to the Approved For ReleaiT266r0S/04 : CIA-RDP67b00820R000200340001-6 L. 25X1A Nur' Approved For Release 2001/05/04: CIA-R14'67B00820R000200340001-6 5) That Contractor's representatives do not accept receipt of or disclosure of information of a classified nature which cannot be fully disclosed to at least two members of the Contractor's management, i.e. 6) That since it is the Contractor's intent to supply the integrated capabilities and skills from its organization, the Contractor may alternate panel members to a reasonable degree and in accordance with its judgment. 7) That two rough draft copies of the minutes of the panel's actions be submitted to the Contractor's panel participant, one for the Contractor's f2e and the other to be corrected if necessary and returned to the panel prior to the issuance of the final minutes. PART II - PERIOD OF PERFORMANCE This contract shall commence on or about 15 November 1963 and shall expire on 15 March 1964; however, the term of this contract may be extended by mutual agreement. PART III - PAYMENT FOR WORK AND SERVICES It is the intent of the Contractor to perform this contract for the considerations stated in Paragraph 1, above, with no monetary payments being made to the Contractor by the Government under this Contract. PART IV - WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS Notwithstanding the requirements of any of the General Provisions of this contract to the contrary, whensoever the Contractor, in performance of the work under this contract, shall find that the requirements of any of the clauses of the General Provisions are in conflict with security instructions issued to the Contractor by the Contracting Officer or by his duly authorized representative for security matters, the Contractor shall call the attention of the Contracting Officer to such conflict and the Contracting Officer or his duly authorized representative for security matters shall (i) modify or rescind such security requirements or (ii) the Contracting Officer shall issue to the Contractor a waiver of compliance with the requirements of the General Provisions conflicting with such security requirements. Any waiver of compliance with the General Provisions of this contract issued by the Contracting Officer shall be in writing, except that the approval by the Contracting Officer of any subcontract issued hereunder by the Contractor shAll be deemed to constitute approval of waiver of any clauses of the General Provisions in conflict with the stipulations of such subcontract. Approved For Release 2001/05/04 : CIA-RDA7B00820R000200340001-6 5 - 'Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 INDEX TO GENERAL PROVISIONS Clause No. Page No. 1 Definitions 1 . 43 --Extras- . . . . . . . . . ....... 4- Variation in Quewitity Inspection . . . . . . . 6..----Responsibilty for Supplies . . . 2, 7-- Payments ? 2. Assignment of Claims . . . % Additional Bond Security. . 3, 4---Federal, State, and Local Taxes . It- Default . . . . ? ? ..... 12 Disputes 5 13 Soviet Controlled Areas 5 14 Work Hours Act of 1962?Overtime Compensation 5 15 ? Walsh-Healey Public Contracts Act 5 16 Nondiscrimination in Employment 6 17 Officials Not To Benefit 6 18 Covenant Against Contingent Fees 6 1.9 Termination for Convenience of the Government 7. 20 Authorization and Consent 9 21 Notice and Assistance Regarding Patent and Copyright In- fringement 9 22 Buy American Act 10 23 Filing of Patent Applications 10 24 Patent Rights (License) 10 25 Data 13 26 Data?Withholding of Payment 13 27 Military Security Requirements 14 28 Utilization of Small Business Concerns 14 29 Examination of Records 14 30 Gratuities 14 31 Convict Labor 15 -IvrateTial Inspection and- Recel vilig Report . 33 Subcontracts (Sources) 15 34 Subcontracts . . . . . . . . . 15 35 Subcontractor Cost and Pricing Data 16 3fr Subcontractor Cost and Pricing Data?Price Adjustments . . 16 - Competition in Subcontracting . . . . . 86? Utilization of Concerns in Labor Surplus Areas 17- 39 Standards of Work 17 46-- Ground and Flight Risk ? e ? '"-4. Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 INDEX (Continued) Clause No. Page No. 41 Government-Furnished Property 20 42 Interest 22, 43 Audit and Records . ? ? ? ? 44 Price Reduction for Defective Cost or Pricing Data . . . . . . 24 46 Price Reduction for- Defective-ost- or Pricing' Data?Price-Ad- justments ...... . . . . . . 46 Audit?Piiec Adjustments- _24 47 Inspection and Audit 25 48 Alterations in Contract 25 Ii Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 - *Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 GENERAL PROVISIONS 1. DEFINITIONS (ASPR 7-103.1) (Feb. 1962) As used throughout this contract, the following terms shall have the meanings set forth below: (a) The term "head of the agency" or "Secre- tary" means the Secretary, the Under Secretary, any Assistant Secretary, or any other head or as- sistant head of the executive or military department or other Federal agency; and the term "his duly authorized representative" means any person or persons or board (other than the Contracting Offi- cer) authorized to act for the head of the agency or the Secretary. (b) The term "Contracting Officer" means the person executing this contract on behalf of the Government, and any other officer or civilian em- ployee who is a properly designated Contracting Officer; and the term includes, except as otherwise provided in this contract, the authorized repre- sentative of a Contracting Officer acting within the limits of his authority. (c) Except as otherwise provided in this con- tract, the term "subcontracts" includes purchase orders under this contract. 241 CHANGES (ASPR 7-103.2) (Jan. 1958) The Contracting Officer may at any time, by a written order, and without notice to the sure es, make\changes, within the general scope of this contraet? in any one or more of the followi g: Drawingk designs, or specifications, where e sup- plies to bkfurnished are to be specially anufac- tured for tlic Government in accordance herewith; (ii) method oshIpment or packing; a d (iii) place of delivery. It*.ny such change cau s an increase or decrease in CI cost of, or the t e required for the performance f any part of the work under this contract, whet hr changed er not changed by any such order, an quitable adjustmnt shall be made in the contract i ice o delivery schedule, or both, and the contract s be modified in writing accordingly. Any claim the Contractor for ad- justment under this cla ust be asserted within 30 days from the date f rec 'pt by the Contractor of the notification o change. Provided, however, That the Contracti Officer, if e decides that the facts justify such ction, may rec ve and act upon any such claim serted at any ti e prior to final payment under this contract. Whe the cost of property madl obsolete or excess as result of a change is i luded in the Contractor' claim for adjustmen the Contracting Officer shal have the right to p escribe the manner of dispositio of such proper Failure to agree to any adjustme shall be a spute concerning a question of fact 'thin the nleaning of the clause of this contract ent ed "Pi6utes." However, nothing in this clause sh FP or PR 1 Feb. 63 1 Rxcuse the Contractor from proceeding with cRntract as changed. [Rev. No. 28, 1/28/58; R Nik 30, 3/17/58.] 3. kk,XTRAS (ASPR 7-103.3) (July 1949) Ex6ept as otherwise provided in this contra t, no paym t for extras shall be made un1esI such extras nd the price therefor have been aut orized in writilig by the Contracting Officer. 4. VARIAFION IN QUANTITY (ASPR 7103.4) (July I49) No varia on in the quantity of any item called for by this contract will be accepted unless such variation has been caused by conditio s of loading, shipping, or p eking, or allowances i manufactur- ing processes, knd then only to the/extent, if any, specified elsewh re in this contrac 5. INSPECTION ASPR 7-103.5) May 1958) (a) All supplies (which teriyf throughout this clause includes wi out limit ion raw materials, components, interm late asse blies, and end prod- ucts) shall be subjec to insp ction and test by the Government, to the e tent ? acticable at all times and places including he eriod of manufacture, and in any event prio t acceptance. [Rev. No. 33, 5/14/58.] (b) In case any suppl defective in material or not in conformity wit contract, the Gover either to reject them as to their dispositi tion. Supplies or I rejected or require or, if permitted o cer, corrected i the Contractor thereafter be former reject' disclosed. If move such required to correct su ernment replace Contrac thereb defau entit or r ule of s or lots of supplies are w i rkmanship or otherwise t requirements of this ent shall have the right (with without instructions n) or to require their correc- s of supp 'es which have been to be correc d shall be removed required by th Contracting Offl- place by and t the expense of romptly after not e, and shall not endered for accept nce unless the n or requirement ? correction is the Contractor fails p omptly to re- pplies or lots of suppl s which are e removed, or promptly o replace or supplies or lots of suppli , the Gov- ither (i) may by contract o otherwise correct such supplies and cha ge to the or the cost occasioned the G ernment , or (ii) may terminate this con act for as provided in the clause of this ontract d "Default." Unless the Contractor birrects laces such supplies within the delivery hed- the Contracting Officer may require the de 'very such supplies at a reduction in price whi is e uitable under the circumstances. Failure to a ee to such reduction of price shall be a dispute c Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 ..,rning a question of fact within the meaning of th? ,, clause of this contract entitled "Disputes.? [Re, No. 28, 1/28/58.1 (c) If any inspection or test is made by the Gov- ernment\ on the premises of the Contractor or a subcontractor, the Contractor without additional charge shall provide all reasonable facilities and assistance for, the safety and convenience of the Government inspectors in the performance of their duties. If Govetriment inspection or test is made at a point other than the premises of the Con- tractor or a subcontractor, it shall be at the ex- pense of the Govermnent except as otherwise pro- vided in this contract:\Frovided, That in case of rejection the Government shall not be liable for any reduction in value of 'Namples used in connec- tion with such inspection ots. test. All inspections and tests by the Government\shall be performed in such a manner as not to undIlly delay the work. The Government reserves the riglitk to charge to the Contractor any additional cost of Oovernment in- spection and test when supplies are\not ready at the time such inspection and test is lcquested by the Contractor or when reinspection o\ retest is necessitated by prior rejection. Acceptan or re- jection of the supplies shall be made as p mptly as practicable after delivery, except as oth?ise provided in this contract; but failure to inspect nd accept or reject supplies shall neither relieve t e Contractor from responsibility for such supplie as are not in accordance with the contract require- ments nor impose liability on the Government therefor. [Rev. No. 28, 1/28/58.1 (d) The inspection and test by the Government of any supplies or lots thereof does not relieve the Contractor from any responsibillity regarding de-. fects or other failures to meet the contract require.ments which may be discovered prior to acceptanee. Except as otherwise provided in this contractf; ac- ceptance shall be conclusive except as regardsclatent defects, fraud, or such gross mistakes as/amount to fraud. (e) The Contractor shall provide a,nd maintain an inspection system acceptable to the Government covering the supplies hereunder. R'ecords of all in- spection work by the Contractor shall be kept com- plete and available to the Government during the performance of this contract' and for such longer period as may be specified/elsewhere in this con- tract. x 6. RESFONSIB1LTY FOR SUPPLIES (AR% 7-103.6) (Jan. 1958) Except as otherVise provided in this contract, (i) the Contractor shall be responsible for the supplies covered by thie contract until they are delivered at the designated delivery point, regardless of the point of inSpection; (ii) after delivery to the Gov- ernment ltt the designed point and prior to accept- ance by the Government or rejection and giving not iie thereof by the Government, the Government FP or PR 1 Feb. 63 shall be responsible for the loss or destruction of or damage to the supplies only if such loss, destruc- tion, or damage results from the negligence of officers, agents, or employees of the Government acting within the scope of their employment; and (iii) the Contractor shall bear all risks as to re- jected supplies after notice of rejection, except that the Government shall be responsible for the loss, or destruction of, or damage to the supplies Only if such loss, destruction or damage results from the gross negligence of officers, agents, or employees of the Government acting within the scope of their employment. [Rev. No. 28, 1/28/58.1 7. PAYMENTS (AN% 7-103.7) (Jan-. 1958) The Contractor shall be paidyupon the submis- sion of proper invoices or vouc rs, the prices stipu- lated herein for supplies d vered and accepted, less deductions, if any, as erein provided. Unless otherwise specified, paym t will be made on partial deliveries accepted by 4ie Government when the amount due on such geliveries so warrants; or, when requested by the Contractor, payment for accepted partial deliveries hall be made whenever such pay- ment would equ or exceed either $1,000 or 50 per- cent of the t al amount of this contract. [Rev. No. 30, 3/17%8.] 8. ASSIG,NMENT OF CLAIMS (ASPR 7-103.8 mod.) (Fey 1962) \ (ay Pursuant to the provisions of the Assignment /Claims Act of 1940, as amended (31 U. S. Code 41 U. S. Code 15) if this contract provides for /-pay ents aggregating $1,000 or more, claims for . mom due or to become due the Contractor from the Go ernment under this contract may be as- signed to bank, trust company, or other financing institution, including any Federal lending agency, and may th reafter be further assigned and re- assigned to an such institution. Any such assign- ment or reassig ent shall cover all amounts pay- able under this c tract and not already paid, and shall not be made more than one party, except that any such assign ent or reassignment may be made to one party as gent or trustee for two or more parties participati in such financing. Unless otherwise provide in this contract, pay- ments to an assignee of an monies due or to be- come due under this contra shall not, to the extent provided in said Act, as ended, be subject to reduction or setoff. (b) In no event shall copies of tiis contract or of any plans, specifications, or other imilar docu- ments relating to work under this'contract, if marked "Top Secret," "Secret," or "Co dential," be furnished to any assignee of any claifi arising under this contract or to any other persIsp not entitled to receive the same: however a copy o any part or all of this contract so marked may be r- nished, or any information contained therein m 2 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 bkdisclosed, to such assignee upon the prior written ant orization of the Contracting Officer. [Rev. No. , 1/28/58.] (c) Ihe Contractor shall obtain the written au- thorizatign of the Contracting Officer prior to the assignment. of any rights under this contract. 9. ADDITION4L BOND SECURITY (ASPR 7-103.9) (July 1949) \ If any surety on any bond furnished in con- nection with this c ntract becomes unacceptable to the Government, or any such surety fails to fur- nish reports as to his 1iancial condition from time to time as requested byNthe Government, the Con- tractor shall promptly furVsh such additional secu- rity as may be required fthn time to time to pro- tect the interests of the Gove nment and of persons supplying labor or materials the prosecution of the work contemplated by this'contract. 10. FEDERAL, STATE, AND LOCA TAXES (ASPR 11-401-2) (July 1960) (a) As used throughout this claus the term "contract date" means the date of thi contract. As to additional supplies or services pro red by modification to this contract, the term "jitract date" means the date of such modification. (b) Except as may be otherwise provided in is contract, the contract price includes, to the exte t allocable to this contract, all Federal, State, an local taxes which, on the contract date: (i) by Constitution, statute, or ordinance, are a9, plicable to this contract, or to the transacti ns covered by this contract or to property or inte ests In property, or (ii) pursuant to written ruling or regula on, the authority charged with administering an such tax is assessing or applying to, and is not Jranting or honoring an exemption for, a contrac r under this kind of contract, or the transactions overed by this contract, or property or interests i property. (c) Except as may be otherwi6 provided in this contract, duties in effect on t contract date are Included in the contract pri to the extent allo- cable to this contract. [Re . No. 1, '7/22/60.] (d) (1) If the contrac r is required to pay or bear the burden? (i) of any tax or s ty which either was not to be included in the ntract price pursuant to the requirements of p agraphs (b) and (c), or of a tax or duty specifical ? excluded from the contract price by a provision this contract; or (ii) of an crease in rate of any tax or duty, whether or ot such tax or duty was excluded from the contr t price; or (iii) any interest or penalty on any tax or duty ref err to in (i) or (ii) above; the contract price sha9/be increased by the amount of such tax, duty, interest, or penalty allocable to this contract; pro- IT or PR 1 Feb. 63 3 vided, that the Contractor warrants in writing thwt no amount of such tax, duty, or rate increase Was Included in the contract price as a conting?ncy reserve or otherwise; and provided furthey; that liability for such tax, duty, rate increase, ?Interest, or penalty was not incurred through thp' fault or negligence of the Contractor or his f atlfire to fol- low instructions of the Contracting yfflcer. [Rev. No. 1, 7/22/60.] (2) If the Contractor is not ryinired to pay or bear the burden, or obtains a rgirund or drawback, in whole or in part, of any tat duty, interest, or penalty which: (i) was to be included ii/the contract price pur- suant to the requiremen of paragraphs (b) and (c) ; (ii) was included X the contract price; or (iii) was the basg of an increase in the contract price; the contrafit price shall be decreased by the amount of suchifelief, refund, or drawback allocable to this contrOt, or the allocable amount of such relief, refund, or drawback shall be paid to the Governmep f, as directed by the Contracting Offi- cer.r Th contract price also shall be similarly de- creased/ f the Contractor, through his fault or neg- ligenV or his failure to follow instructions of the Con fading Officer, is required to pay or bear the bqiden, does not obtain a refund or drawback of a y such tax, duty, interest, or penalty. Interest paid or credited to the Contractor incident to a refund of taxes shall inure to the benefit of the Government to the extent that such interest was arned after the Contractor was paid or reimbursed b the Government for such taxes. ( Invoices or vouchers covering any adjustment of th contract price pursuant to this paragraph (d) sh 1 set forth the amount thereof as a separate item an shall identify the particular tax or duty involved. (4) This ragraph (d) shall not be applicable to social securit taxes; income and franchise taxes, other than tho levied on or measured by (i) sales or receipts from les, or (ii) the Contractor's pos- session of, interes in, or use of property, title to which is in the Go rnment; excess profits taxes; capital stock taxes; nemployment compensation taxes; or property taxe other than such property taxes, allocable to this ontract, as are assessed either on completed supp s covered by this con- tract, or on the Contractor' .ossession of, interest in, or use of property, title to hich is in the Gov- ernment. (5) No adjustment of less tha $100 is required to be made in the contract price rsuant to this paragraph (d). (e) Unless there does not exist an reasonable basis to sustain an exemption, the t svernment upon request of the Contractor, withou further liability, agrees, except as otherwise pro ? ed in this contract, to furnish evidence appropri te to Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 establish exemption from any tax which the Con- tractor warrants in writing was excluded from the contract price. In addition, the Contracting Officer may furnish evidence appropriate to establish ex- emption from any tax that may, pursuant to this clause, give rise to either an increase or decrease in the contract price. Except as otherwise provided in this contract, evidence appropriate to establish exemption froni duties will be furnished only at the discretion at the Contracting Officer. (f) (1) The Contractor shall promptly notify the Contracting Officer of all matters pertaining to Federal, State, and local taxes, and duties, that reasonably may be exp?ected to result in either an increase or decrease in 'the contract price. (2) Whenever an increase or decrease in the con- tract price may be required 'under this clause, the Contractor shall take action \as directed by the Contracting Officer, and the contract price shall be equitably adjusted to cover the costs of such action, including any interest, penalty, and reason- able attorneys' fees. 11. DEFAULT (ASPR 7-103.11 ?ASPR 81,707) (July 1962) (a) The Government may, subject to this pro- visions of paragraph (c) below, by written ri'sztice of default to the Contractor, terminate the wile or any part of this contract in any one of die following circumstances: \. (i) if the Contractor fails to make delivery of the supplies or to perform the 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 performanee of this contract in accordance with its terms,?end in either of these two circumstances does not cure such failure within a period of 10 days (or such longer period as the Contracting Officer may au- thorize in writing) after receipt of notice from the Contracting Officer specifying such ;failure. (b) In the event the Government terminates this contract in whole or in part as provided in para- graph (a) of this clause, the Government may pro- cure, 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 serv- ices: Provided, That the Contractor shall continue the performance of this contract to the extent not terminated under the provisions of this clause. (c) Except with respect to defaults of subcon- tractors, the Contractor shall not be liable for any excess costs if the failure to perform the contract arises out of causes beyond the control and with- out the fault or negligence of the Contractor. Such ' causes may include, but are not restricted to, acts FP or PR 1 Feb. 63 of God or of the public enemy, acts of the Govern- ment in either its sovereign or contractual 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 Ahe failure to perform is caused by the default of ,a subcontractor, and if such default arises out of causes beyond the control of both the Contractor and subcontractor, and without the fault or nefgence of either of them, the Contractor shall ot be liable for any excess costs for failure to perform, unless the sup- plies or services to be furnished by the subcon- tractor were obtainable from other sources in suffi- cient time to permit thy Contractor to meet the re- quired delivery schedgle. (d) If this contrajt is terminated as provided in paragraph (a) of this clause, the Government, in addition to any Ober rights provided in this clause, may require thVoontractor to transfer title and de- liver to the government, in the manner and to the extent directed by the Contracting Officer, (i) any completed supplies, and (ii) such partially complete 'supplies and materials, parts, tools, dies, jigs, fixtures, plans, drawings, information, and contract rights (hereinafter called "manufacturing materials") as the Contractor has specifically pro- duc,ed or specifically acquired for the performance of/such part of this contract as has been termi- nated; and the Contractor shall, upon direction of ?N- the Contracting Officer, protect and preserve prop- ,' rty in possession of the Contractor in which the vernment has an interest. Payment for com- ple ed supplies delivered to and accepted by the Government shall be at the contract price. Pay- ment r manufacturing materials delivered to and accepte by the Government and for the protection and pres vation of property shall be in an amount agreed upo by the Contractor and the Contracting Officer; faili?to agree to such amount shall be a dispute con rning a question of fact within the meaning of the Nause of this contract entitled "Dis- putes." The Go ernment may withhold from amounts otherwise\due the Contractor for such completed supplies \or manufacturing materials such sum as the ContNcting Officer determines to be necessary to protec the Government against loss because of outstandin liens or claims of for- mer lien holders. (e) If, after notice of termin ion of this contract under the provisions of this clau , it is determined for any reason that the Contractk was not in de- fault under the provisions of this cle,u,se, or that the default was excusable under the proiNtsions of this clause, the rights and obligations of "the parties shall, if the contract contains a clause "providing for termination for convenience of the Government, be the same as if the notice of termination had been issued pursuant to such clause. 4 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 after notice of termination of this contract unde the provisions of this clause, it is determi d for an? 'reason that the Contractor was not de- fault undb the provisions of this claus , and if this contrac does not contain a clau providing for terminatio'1 for convenience o the Govern- ment, the contra shall be equ' ly adjusted to compensate for suc'Kterminat1 and the contract modified accordingly; fpur rto agree to any such adjustment shall be a a ute concerning a ques- tion of fact within tp m ning of the clause of this contract en,flid "Dis tes." [Rev. No. 10, 7/30/62.] (f) The 4-4s and remedies of se Government providedz,th this clause shall not be elusive and are in-lddition to any other rights a remedies prgvlaed by law or under this contract. ev. No. 36?, 9/5/58]. 12. DISPUTES (ASPR 7-103.12) (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 Offi- cer, who shall reduce his decision to writing and mail or otherwise furnish a copy thereof to the Contractor. The decision of the Contracting Offi- cer shall be final and conclusive unless, within 30 days from the, date of receipt of such copy, the Contractor mails or otherwise furnishes to the Contracting Officer a written appeal addressed to the Secretary. The decision of the Secretary or his duly authorized representative for the determina- tion of such appeals shall be final and conclusive 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. In connection with any appeal proceed- ing under this clause, the Contractor shall be af- forded 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 Contract- ing Officer's decision. (b) This "Disputes" clause does not preclude con- sideration of law questions in connection with de- cisions provided for in paragraph (a) above: Pro- vided, That nothing in this contract shall be con- strued as making final the decision of any ad- ministrative official, representative, or board on a question of law. [Rev. No. 28, 1/28/58.] 13. SOVIET-CONTROLLED AREAS (ASPR 6-403) (April 1962) (a) The Contractor shall not acquire for use in the performance of this contract any supplies or services originating from sources within Soviet- controlled areas, as listed in the schedule of this FP or PR 1 Feb. 63 5 contract, or transported from or through Hong Kong or Macao, without the written approval of the Contracting Officer. (b) The contractor agrees to insert the provisions of this clause including this subparagraph (b) and the Soviet-controlled areas listed in the schedule, in all subcontracts hereunder. 14. WORK HOURS ACT OF 1962?OVERTIME COMPENSATION (ASPR 12-303.1) (Oct. 1962) This contract, to the extent that it is of a char- acter specified in the Work Hours Act of 1962 (Pub- lic Law 87-581, 76 Stat. 357-360) and is not covered by the Walsh-Healey Public Contracts Act (41 U.S.C. 35-45), is subject to the following provisions and to all other provisions and exceptions of said Work Hours Act of 1962. (a) No contractor or subcontractor contracting for any part of the contract work shall require or permit any laborer or mechanic to be employed on such work in excess of eight hours in any calendar day or in excess of forty hours in any workweek un- less such laborer or mechanic receives compensation at a rate not less than one and one-half times his basic rate of pay for all hours worked in excess of eight hours in any calendar day or in excess of forty hours in such workweek, whichever is the greater number of overtime hours. (b) In the event of any violation of the pro- visions of paragraph (a), the contractor and any subcontractor responsible for such violation shall be liable to any affected employee for his unpaid wages. In addition, such contractor or subcon- tractor shall be liable to the United States for liquidated damages. Such liquidated damages shall be computed, with respect to each individual laborer or mechanic employed in violation of the provisions of paragraph (a), in the sum of $10 for each calendar day on which such employee was required or permitted to work in excess of eight hours or in excess of forty hours in a workweek without pay- ment of the required overtime wages. (c) The Contracting Officer may withhold, or cause to be withheld, from moneys payable on ac- count of work performed by the contractor or sub- contractor, the full amount of wages required by this contract and such sums as may administratively be determined to be necessary to satisfy any li- abilities of such contractor or subcontractor for liquidated damages as provided in paragraph (b). [Rev. No. 13, 12/31/62.1 15. WALSH-HEALEY PUBLIC CONTRACTS ACT (ASPR 12-605 mod.) (Jan. 1958) If this contract is for the manufacture or fur- nishing of materials, supplies, articles or equipment in an amount which exceeds or may exceed $10,000 and is otherwise subject to the Walsh-Healey Pub- lic Contracts Act, as amended (41 U. S. Code 35-45), there are hereby incorporated by reference all rep- Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 resentations and stipulations required by said Act and regulations issued thereunder by the Secretary of Labor, such representations and stipulations being subject to all applicable rulings and inter- pretations of the Secretary of Labor which are now or may hereafter be in effect, except that the Con- tractor shall not be required to include this clause in subcontracts issued hereunder when the inclusion of this clause in a subcontract would jeopardize or conflict with the security considerations established in connection with this contract. [Rev. No. 11, 9/30/62.1 16. NONDISCRIMINATION IN EMPLOYMENT (ASPR 12-802) (July 1962) In connection with the performance of work un- der this contract, the contractor 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 Con- tractor 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 advertising; layoff or termination; rates of pay or other forms of com- pensation; and selection for training, including ap- prenticeship. The contractor agrees to post in conspicuous places, available to employees and ap- plicants for employment, notices to be provided by the contracting officer setting forth the provisions of this nondiscrimination clause. (b) The contractor will, in all solicitations or ad- vertisements for 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 workers' representative of the contractor's commitments under this section, and shall post copies of the notice in conspicuous places available to employees and applicants for employment. (d) The contractor will comply with all provi- sions of Executive Order No. 10925 of March 6, 1961, and of the rules, regulations, and relevant orders of The President's Committee on Equal Employ- ment Opportunity in effect as of the date of this contract. (e) The contractor will furnish all information and reports required by Executive Order No. 10925 of March 6, 1961, and by the rules, regulations, and orders of the said Committee or pursuant thereto, and will permit access to his books, records, and accounts by the contracting agency and the Corn- FP or PR 1 Feb. 63 6 mittee for purposes of investigation to ascertain compliance with such rules, regulations, and orders. (1) In the event of the contractor's non-com- pliance with the nondiscrimination clauses of this contract or with any of the said rules, regulations, or orders, this contract may be cancelled in whole or in part and the contractor may be declared ineligible for further government contracts in ac- cordance with procedures authorized in Executive Order No. 10925 of March 6, 1961, and such other sanctions may be imposed and remedies invoked as provided in the said Executive Order or by rule, regulation, or order of The President's Committee on Equal Employment Opportunity, or as otherwise provided by law. (g) The. contractor will include the provisions of the foregoing paragraphs (a) through (f) in every subcontract or purchase order unless exempted by rules, regulations, or orders of The President's Com- mittee on Equal Employment Opportunity issued pursuant to Section 303 of Executive Order No. 10925 of March 6, 1961, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontractor or purchase order as the contract- ing agency may direct as a means of enforcing such provisions, including sanctions for noncompliance: Provided however that in the event the contractor becomes involved in, or is threatened with, litiga- tion with a subcontractor or vendor as a result of such direction by the contracting agency, the con- tractor may request the United States to enter into such litigation to protect the interests of the United States. 17. OFFICIALS NOT TO BENEFIT (ASPR 7-103.19) (July 1949) 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. 18. COVENANT AGAINST CONTINGENT FEES (ASPR 7-103.20) (Jan. 1958) The Contractor warrants that no person or sell- ing agency has been employed or retained to solicit or secure this contract upon an agreement or under- standing for a commission, percentage, brokerage or contingent fee, excepting bona fide employees or bona fide established commercial 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 or in its discretion to deduct from the contract price or con- sideration, or otherwise recover, the full amount of such commission, percentage, brokerage, or con- tingent fee. Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 19. TERMINATION FOR CONVENIENCE OF THE GoNERNMENT (ASPR 8-701) (Jan. 1961) \ (a) Ti performance of work under this con- tract\ may e terminated by the Government in ac- cordance wi , this clause in whole, or from time to 14,\ time in part, whenever the Contracting Officer shall determine, that such termination is in the best interests of "-khe Government. Any such ter- mination shall be Kfected by delivery to the Con- tractor of a Notice 14 Termination specifying the extent to which perf Ormance of work under the contract is terminated, nd the date upon which such termination become effective. (b) After receipt of a No ? e of Termination, and except as otherwise directe by the Contracting Officer, the Contractor shall: (1) stop work under the con act on the date and to the extent specified in the notice of Termi- nation; (ii) place no further orders or sub ontracts for materials, services or facilities, except s may be necessary for completion of such porti of the work under the contract as is not termin ted; (iii) terminate all orders and subcontra s to the extent that they relate to the performanc of work terminated by the Notice of Termination; (iv) assign to the Government, in the manner, at the times, and to the extent directed by the Contracting Officer, all of the right, title, and in- terest of the Contractor tuader the orders and sub- / contracts so terminated, in which case the Goy- ernment shall have the right in its discretion/to settle or pay any or all claims arising out offithe termination of such orders and subcontracts': (v) settle all outstanding liabilities and t?11 claims arising out of such termination of ordei)s and sub- contracts, with the approval or ratification of the ContracTing Officer, to the extent 119,-/may require, which approval or ratification shalOoe final for all the purposes of this clause; / (vi) transfer title and deliver to the Govern- ment, in the manner, at the _pfMes, and to the ex- tent, if any, directed by the Contracting Officer, (A) the fabricated or unfabricated parts, work in process, completed work, 'supplies, and other ma- terial produced as a part of, or acquired in connec- tion with the performince of, the work terminated by the Notice of Tffrmination, and (B) the com- pleted or partially' completed plans, drawings, in- formation, and other property which, if the con- tract had been,Completed, would have been required to be furnishdd to the Government; (vii) use/its best efforts to sell, in the manner, at the tithes, to the extent, and at the price or prices directed or authorized by the Contracting Office,: any property of the types referred to in (vi) 'above; provided, however, that the Contractor (A) shall not be required to extend credit to any ipiuchaser, and (B) may acquire any such property / FP or PR 1 Feb. 63 7 under the conditions prescribed by and at a price or prices approved by the Contracting Officer', and provided further that the proceeds of ap'Sr such transfer or disposition shall be applied in /reduction of any payments to be made by the GovAnment to the Contractor under this contract orAhall other- wise be credited to the price or cost( of the work covered by this contract or paiyin such other manner as the Contracting Office may direct; (viii) complete performance if such part of the work as shall not have bee terminated by the Notice of Termination; and y (ix) take such action a may be necessary, or as the Contracting Officer ay direct, for the protec- tionlc/ and preservation /Of the property related to this contract which iyin the possession of the Con- tractor and in whip the Government has or may acquire an intere/t. At any time afVr expiration of the plant clearance period, as defied in Section VIII, Armed Services Procurement' Regulation, as it may be amended from time / 'to time, the Contractor may submit to the Conyacting Officer a list, certified as to quan- tity and quality, of any or all items of termination inve5tory not previously disposed of, exclusive of items the disposition of which has been directed or autSorized by the Contracting Officer, and may re- "quest the Government to remove such items or 'enter into a storage agreement covering them. Not ter than fifteen (15) days thereafter, the Gov- e ment will accept title to such items and remove the or enter into a storage agreement covering the sam provided that the list submitted shall be sub- ject to verification by the Contracting Officer upon removal if the items, or if the items are stored, within fo y-five (45) days from the date of sub- mission of e list, and any necessary adjustment to correct th list as submitted shall be made prior to final settle -nt. (c) After recei t of a Notice of Termination, the Contractor shall s mit to the Contracting Officer its termination clai in the form and with certi- fication prescribed by e Contracting Officer. Such claim shall be submitte promptly but in no event later than one year from the effective date of ter- mination, unless one or mi e extensions in writing are granted by the Contra ing Officer, upon re- quest of the Contractor made i writing within such one year period or authorize extension thereof. However, if the Contracting Offic determines that the facts justify such action, he ma receive and act upon any such termination claim at nytime after such one year period or any exten on thereof. Upon failure of the Contractor to sub it its ter- mination claim within the time allowed, he Con- tracting Officer may, subject to any Se lement Review Board approvals required by Sectio VIII of the Armed Services Procurement Regulati in effect as of the date of execution of this contr t, determine, on the basis of information available Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 him, the amount, if any, due to the Contractor by reason of the termination and shall thereupon pay to the Contractor the amount so determined. (d) Subject to the provisions of paragraph (c), and subject to any Settlement Review Board ap- provals required by Section VIII of the Armed Serv- ices Procurement Regulation in effect as of the date of execution of this contract, the Contractor and the Contracting Officer may agree upon the whole or any part of the amount or amounts to be paid to the Contractor by reason of the total or partial termination of work pursuant to this clause, which amount or amounts may include a reasonable al- lowance for profit on work done; provided that such agreed amount or amounts, exclusive of settlement costs, shall not exceed the total contract price as reduced by the amount of payments otherwise made and as further reduced by the contract price of work not terminated. The contract shall be amended accordingly, and the Contractor shall be paid the agreed amount. Nothing in paragraph (e) of this clause, prescribing the amount to be paid to the Contractor in the event of failure of the Con- tractor and the Contracting Officer to agree upon the whole amount to be paid to the Contactor by reason of the termination of work pursuant to this clause, shall be deemed to limit, restrict, or other- wise determine or affect the amount or amounts which may be agreed upon to be paid to the Con- tractor pursuant to this paragraph (d). (e) In the event of the failure of the Contractor and the Contracting Officer to agree as provided in paragraph (d) 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, subject to any Settlement Review Board ap- provals required by Section VIII of the Armed Serv- ices Procurement Regulation in effect as of the da of execution of this contract, determine, on e basis of information available to him, the amo nt, if any, due to the Contractor by reason of th ter- mination and shall pay to the Contract the amounts determined as follows: (i) for completed supplies accepted by e Gov- ernment (or sold or acquired as provide in para- graph (b) (vii) above) and not there ofore paid for, a sum equivalent to the aggreg e price for such supplies computed in accord ce with the price or prices specified in the c tract, appro- priately adjusted for any saving o freight or other charges; (ii) the total of ? (A) the costs incurred in thf performance of the work terminated, including tial costs and pre- paratory expense allocable ereto, but exclusive of any costs attributable to s plies paid or to be paid for under paragraph (e) i) hereof; (B) the cost of settling and paying claims arising out of the terminati7 of work under subcontracts or orders, as provide in paragraph (b) (v) above, FP or PR 1 Feb. 63 8 which are properly chargeable to the terminated portion of the contract (exclusive of amounts paid or payable on account of supplies or materials delivered or services furnished by subcontractors or vendors prior to the effective date os/the Notice of Termination, which amounts shall/be included in the costs payable under (A) above and (C) a sum, as a profit, equal t12 percent of that part of the amount determine under (A) above which represents the cost of a/tides and materials not processed by the Contra or, plus a sum equal to 8 percent of the remainc?of such amount, but the aggregate of such sum/ shall not exceed 6 per- cent of the whole of the amount determined under (A) above; provided, hjwever, that if it appears that the Contractor uld have sustained a loss on the entire contra had it been completed, no profit shall be inclu ed or allowed under this sub- division (C) and th appropriate adjustment shall be made reducing 'the amount of the settlement to reflect the indic ed rate of loss; and (iii) the rea ?nable costs of settlement, including accounting, I al, clerical, and other expenses rea- sonably nec sary for the preparation of settlement claims and upporting data with respect to the ter- minated srtion of the contract and for the ter- minatio and settlement of subcontracts there- under, ? gether with reasonable storage, transporta- tion, d other costs incurred in connection with the ? otection or disposition of property allocable to thi contract. The total sum to be paid to the Con- r- tor under (i) and (ii) of this paragraph (e) s all not exceed the total contract price as reduced y the amount of payments otherwise made and as furthtzr reduced by the contract price of work not terminhted. Except for normal spoilage, and ex- cept to ite extent that the Government shall have otherwise 'expressly assumed the risk of loss, there shall be exCluded from the amounts payable to the Contractor as\provided in (e) (i) and (ii) (A) above, the fair value,\As determined by the Contracting Officer, of propeity which is destroyed, lost, stolen, or damaged so as to become undeliverable to the Government, or to ?buyer pursuant to paragraph (b) (vii) . (f) Any determinatio'n\of costs under paragraph (c) or (e) hereof shall be governed by the principles for consideration of costs Nd forth in Section XV, Part 2, of the Armed ServicaProcurement Regula- tion, as in effect on the date &this contract. (g) The Contractor shall have?the right of ap- peal, under the clause of this ntract entitled "Disputes," from any determinatiorimade by the Contracting Officer under paragraph (c) or (e) above, except that if the Contractor hhs failed to submit his claim within the time provides in para- graph (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 rade a determination of the amount due under pa?a- Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 - Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 graph (c) or (e) above, the Government shall psfy to the Contractor the following: (i) if there is fao rightkof appeal hereunder or if no timely appeal as been aken, the amount so determined by the don- tractiriF Officer, or (ii) if an appeal has been t ken, the am,Runt finally determined on such appe I. (h) th arriving at the amount due the Coiitrac- tor undeil this clause there shall be deduc,,ted (i) all unliqul ated advance or other payment on ,g\ac- count ther tofore made to the Contractor, applicable to the termI ated portion of this contract, (ii) any claim which the Government may have vgainst the Contractor i connection with this coptract, and (iii) the agre d price for, or the procAeds of sale of, any mate 'als, supplies, or othei things ac- quired by the ontractor or sold, puisuant to the provisions of t s clause, and not/otherwise re- covered by or crn ited to the Govement. (i) If the termi ation hereunder/be partial, prior to the settlement ? the terminated portion of this contract, the Cont ctor may ffle with the Con- tracting Officer a req est in writVig for an equitable adjustment of the p *ce or pries specified in the contract relating to tie conti ' ued portion of the Itcontract (the portion t ter inated by the Notice of Termination), and s h equitable adjustment as may be agreed upon sh U pe made in such price or prices. (j) The Government y from time to time, under such terms and c s itions as it may pre- scribe, make partial pay en and payments on ac- count against costs inc rred by the Contractor in connection with the ter,ininat portion of this con- tract whenever in th opinio of the Contracting Officer the aggregat of such payments shall be within the amount t,? which the Contractor will be entitled hereunder. If the total of such payments is in excess of the/ mount finall agreed or deter- mined to be due/ under this cla se, such excess shall be payable Ay the Contractor to the Govern- ment upon denlUnd, together with interest com- puted at the rate of 6 percent per a num, for the g" period from t e date such excess p ment is re- ceived by the ontractor to the date o which such excess is repaid to the Government; pr vided, how- ever, that riyi interest shall be charged th respect to any sucyi excess payment attributable to a re- duction in/the Contractor's claim by rea in of re- tention op' other disposition of terminatio i inven- tory untif ten days after the date of such r tention or disposition, or such later date as determ ed by the Contracting Officer by reason of the c T11111- stances. (k) Unless otherwise provided for in this on- tract; or by applicable statute, the Contractor, om the effective date of termination and for a pe od of three years after final settlement under this co tract, shall preserve and make available to the Go ernment at all reasonable times at the Office of th Contractor but without direct charge to the Gov- FP or PR 1 Feb. 63 9 ernment, all his books, records, documents, and Othei-? evidence bearing on the costs a_nd exfienses of the Conli"actor..._under this egntratcand relating to the work termingW-hge-under, or, to the ex- tent approved lay-tre Concrleting Officer, photo- grap crophotographs, or othe?-fttit tic re- oductions thereof. [Rev. No. 49, 10/1/59.1 20. AUTHORIZATION AND CONSENT (ASPR 9-102.1) (Jan. 1961) The Government hereby gives its authorization and consent (without prejudice to its rights of indemnification, if such rights are provided for in this contract) for all use and manufacture, in the performance of this contract or any part hereof or any amendment hereto or any subcontract here- under (including any lower-tier subcontract), of any invention described in and covered by a patent of the United States (i) embodied in the structure or composition of any article the delivery of which is accepted by the Government under this contract, or (ii) utilized in the machinery, tools, or methods the use of which necessarily results from compliance by the Contractor or the using subcontractor with (a) specifications or written provisions now or here- after forming a part of this contract, or (b) specific written instructions given by the Contracting Officer directing the manner of performance. The Con- tractor's entire liability to the Government for in- fringement of a patent of the United States shall be determined solely by the provisions of the in- demnity clause if any, included in the contract and the Government assumes liability for all other in- fringement to the extent of the authorization and consent hereinabove granted. [Rev. No. 28, 1/28/58; Rev. No. 3, 1/31/61.1 21. NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT INFRINGEMENT (ASPR 9-104) (Feb. 1962) The provisions of this clause shall be applicable only if the amount of this contract exceeds $10,000. (a) The Contractor shall report to the Contract- ing Officer, promptly and in reasonable written de- tail, each notice or claim of patent infringement based on the performance of this contract of which the Contractor has knowledge. (b) In the event of any suit against the Govern- ment, or any claim against the Government made before suit has been instituted, on account of any alleged patent or copyright infringement arising out of the performance of this contract or out of the use of any supplies furnished or work or serv- ices performed hereunder, the Contractor shall fur- nish to the Government, upon request, all evidence and information in possession of the Contractor pertaining to such suit or claim. Such evidence and information shall be furnished at the expense of the Government except in those cases in which Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04 : CIA-RDP67600820R000200340001-6 the Contractor has agreed to indemnify the Gov- ernment against the claim being asserted. [Rev. No. 35, '7/15/58; Rev. No. 7, 2/15/62.] 22. BUY AMERICAN ACT (ASPR 6-104.5) (July 1960) (a) In acquiring end products, the Buy American Act (41 U. S. Code 10 a-d) provides that the Gov- ernment 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; (ii) "end products" means those articles, ma- terials, and supplies, which are to be acquired under this contract 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 components 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 de- livered under this contract only domestic source end products, 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 sufficient and reasonably available com- mercial quantities and of a satisfactory quality; (iii) as to which the Secretary determines the domestic preference to be inconsistent with the public interest; or (iv) as to which the Secretary determines the cost to the Government to be unreasonable. 23. FILING OF PATENT APPLICATIONS (ASPR 9-106) (Jan. 1955) (a) Before filing or causing to be filed a patent application disclosing any subject matter of this contract, which subject matter is classified "Secret" or higher, the Contractor shall, citing the thirty (30) day provision below, transmit the proposed application to the Contracting Officer for determi- nation whether, for reasons of national security, such application should be placed under an order of secrecy or sealed in accordance with the pro- visions of 35 U. S. Code 181-188 or the issuance of a patent should be otherwise delayed under perti- nent statutes or regulations; and the Contractor shall observe any instructions of the Contracting Officer with respect to the manner of delivery of the patent application to the U. S. Patent Office FP or PR 1 Feb. 63 10 for filing, but the Contractor shall not be denied the right to file such patent application. If the Contracting Officer shall not have given any such instructions within thirty (30) days from the date of mailing or other transmittal of the proposed ap- plication, the Contractor may file the application. (b) The Contractor shall furnish to the Contract- ing Officer, at the time of or prior to the time when the Contractor flies or causes to be filed a patent application disclosing any subject matter of this contract, which subject matter is classified "Confi- dential," a copy of such application for determina- tion whether, for reasons of national security, such application should be placed under an order of se- crecy or the issuance of a patent should be other- wise delayed under pertinent statutes or regulations. (c) In filing any patent application coming within the scope of this clause, the Contractor shall ob- serve all applicable security regulations covering the transmission of classified subject matter. 24. PATENT RIGHTS (LICENSE) (ASPR 9-107.2 ? 7-204.7) (April 1962) (a) As used in this clause, the following terms shall have the meanings set forth below: (i) The term "Subject Invention" means any in- vention, improvement, or discovery (whether or not patentable) conceived or first actually reduced to practice either (A) in the performance of the experimental, de- velopmental, or research work called for or re- quired under this contract: or (B) in the performance of any experimental, de- velopmental, or research work relating to the sub- ject matter of this contract which was done upon an understanding in writing that a contract would be awarded; provided that the term "Subject In- vention" shall not include any invention which is specifically identified and listed in the Schedule for the purpose of excluding it from the license granted by this clause. [Rev. No. 28, 1/28/58.] (ii) The term "Technical Personnel" means any person employed by or working under contract with the Contractor (other than a subcontractor whose responsibilities with respect to rights accruing to the Government in inventions arising under sub- contracts are set forth in (g) and (h), below), who, by reason of the nature of his duties in connection with the performance of this contract, would rea- sonably be expected to make inventions. (Rev. No. 28, 1/28/58.1 (iii) The terms "subcontract" and "subcontrac- tor" mean any subcontract or subcontractor of the Contractor, and any lower-tier subcontract or sub- contractor under this contract. [Rev. No. 10, 7/30/62.] (b) (1) The Contractor agrees to and does hereby grant to the Government an irrevocable, nonexclu- sive, nontransferable, and royalty-free license to practice, and cause to be practiced by or for the Approved For Release 2001/05/04 : CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 United States Government throughout the world, each Subject Invention in the manufacture, use and disposition according to law, of any article or ma- terial, and in the use of any method. Such license (i) shall be non-transferable except that the Gov- ernment shall have the right to grant sub-licenses to any foreign government or international organ- ization specifically for use in programs established by international agreements for research develop- ments or production of weapons or equipment for mutual defense and (ii) shall include the practice of Subject Invention in the manufacture, use, and disposition of any articles or material, in the use of any method, or in the performance of any service acquired by or for the Government or with funds derived through the Military Assistance Program of the Government or otherwise through the Government. [Rev. No. 9, 4/15/82.] (2) With respect to: (i) any Subject Invention made by other than Technical Personnel; (ii) any Subject Invention conceived prior to, but first actually reduced to practice in the course of, any of the experimental, developmental, or research work specified in (a) (i) above; and (iii) the practice of any Subject Invention in for- eign countries; the obligation of the Contractor to grant a license as provided in (b) (1) above, to con- vey title as provided in (d) (ii) (B) or (d) (iv) below, and to convey foreign rights as provided in (e) below, shall be limited to the extent of the Con- tractor's right to grant the same without incurring any obligation to pay royalties or other compen- sation to others solely on account of said grant. Nothing contained in this Patent Rights clause shall be deemed to grant any license under any invention other than a Subject Invention. (c) The Contractor shall furnish to the Contract- ing Officer the following information and reports concerning Subject Inventions which reasonably ap- pear to be patentable: (i) a written disclosure promptly after concep- tion or first actual reduction to practice of each such Invention together with a written statement specifying whether or not a United States patent application claiming the Invention has been or will be filed by or on behalf of the Contractor; (ii) interim reports, at least every twelve months, commencing with the date of this contract, each listing all such Inventions conceived or first ac- tually reduced to practice more than three months prior to the date of the report, and not listed on a prior interim report, or certifying that there are no such unreported inventions; and (iii) prior to final settlement of this contract, a final report listing all such Inventions including all those previously listed in interim reports. (d) In connection with each Subject Invention referred to in (c) (i) above, the Contractor shall do the following: FP or PR 1 Feb. 63 11 (i) if the Contractor specifies that a United States patent application claiming such Invention will be filed, the Contractor shall file or cause to be filed such application in due form and time; however, if the Contractor, after having specified that such an application would be filed, decides not to file or cause to be filed said application, the Con- tractor shall so notify the Contracting Officer at the earliest practicable date and in any event not later than eight months after first publication, public use or sale. (ii) if the Contractor specifies that a United States patent application claiming such Invention has not been filed and will not be filed (or having specified that such an application will be filed there- after notifies the Contracting Officer to the con- trary), the Contractor shall: (A) inform the Contracting Officer in writing at the earliest practicable date of any publication of such Invention made by or known to the Contractor or, where applicable, of any contemplated publica- tion by the Contractor, stating the date and iden- tity of such publication or contemplated publica- tion; and (B) convey to the Government the Contractor's entire right, title, and interest in such Invention by delivering to the Contracting Officer upon writ- ten request such duly executed instruments (pre- pared by the Government) of assignment and ap- plication, and such other papers as are deemed necessary to vest in the Government the Contrac- tor's right, title, and interest aforesaid, and the right to apply for and prosecute patent applications covering such Invention throughout the world, sub- ject, however, to the rights of the Contractor in foreign applications as provided in (e) below, and subject further to the reservation of a non-exclu- sive and royalty-free license to the Contractor (and to its existing and future associated and affiliated companies, if any, within the corporate structure of which the Contractor is a part) which license shall be assignable to the successor of that part of the Contractor's business to which such Invention pertains; (iii) the Contractor shall furnish promptly to the Contracting Officer on request an irrevocable power of attorney to inspect and make copies of each United States patent application filed by or on be- half of the Contractor covering any such Inven- tion; (iv) in the event the Contractor, or those other than the Government deriving rights from the Contractor, elects not to continue prosecution of any such United States patent application filed by or on behalf of the Contractor, the Contractor shall so notify the Contracting Officer not less than sixty days before the expiration of the response period and, upon written request, deliver to the Contract- ing Officer such duly executed instruments (pre- pared by the Government) as are deemed necessary to vest in the Government the Contractor's entire Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 right, title, and interest in such Invention and the application, subject to the reservation as specified in (d) (ii) above; and (v) the Contractor shall deliver to the Contract- ing Officer duly executed instruments fully con- firmatory of any license rights herein agreed to be granted to the Government. (e) The Contractor, or those other than the Gov- ernment deriving rights from the Contractor, shall, as between the parties hereto, have the exclusive rights to file applications on Subject Inventions in each foreign country within: (i) nine months from the date a corresponding United States application is filed; (ii) six months from the date permission is granted to file foreign applications where such filing had been prohibited for security reasons; or (iii) such longer period as may be approved by the Contracting Officer. The Contractor shall, upon written request of the Contracting Officer, convey to the Government the Contractor's entire right, title, and interest in each Subject Invention in each foreign country in which an application has not been filed within the time above specified, subject to the reservation of a non- exclusive and royalty-free license to the Contrac- tor together with the right of the Contractor to grant sublicenses, which license and right shall be assignable to the successor of that part of the Con- tractor's business to which the Subject Invention pertains. (f) If the Contractor fails to deliver to the Con- tracting Officer the interim reports required by (c) (ii) above, or fails to furnish the written dis- closures for all Subject Inventions required by (c) (I) above shown to be due in accordance with any interim report delivered under (c) (ii) or other- wise known to be unreported, there shall be with- held from payment until the Contractor shall have corrected such failures either ten percent (10%) of the amount of this contract, as from time to time amended, or five thousand dollars ($5,000), whichever is less. After payment of eighty per- cent (80%) of the amount of this contract, as from time to time amended, payment shall be withheld until a reserve of either ten percent (10%) of such amount, or five thousand dollars ($5,000), which- ever is less, shall have been set aside, such reserve or balance thereof to be retained until the Con- tractor shall have furnished to the Contracting Officer: (i) the final report required by (c) (iii) above; (ii) written disclosures for all Subject Inventions required by (c) (i) above which are shown to be due in accordance with interim reports delivered under (c) (ii) above or in accordance with such final reports or are otherwise known to be unre- ported; and FP or PR 1 Feb. 63 12 (iii) the information as to any subcontractor re- quired by (h) below. The maximum amount which may be withheld under this paragraph (f) shall not exceed ten percent (10%) of the amount of this contract or five thousand dollars ($5,000), whichever is less, and no amount shall be withheld under this paragraph (f) when the amount speci- fied by this paragraph (f) is being withheld under other provisions of this contract. The withhold- ing of any amount or subsequent payment thereof to the Contractor shall not be construed as a waiver of any rights accruing to the Government under this contract. This paragraph (f) shall not be con- strued as requiring the Contractor to withhold any amounts from a subcontractor to enforce compli- ance with the patent provisions of a subcontract. (g) The Contractor shall, unless otherwise au- thorized by the Contracting Officer as hereafter pro- vided, include a patent rights clause containing all the provisions of this Patent Rights Clause except provision (f) in any subcontract hereunder of three thousand dollars ($3,000) or more having experi- mental, developmental, or research work as one of its purposes. In the event of refusal by a subcon- tractor to accept such a patent rights clause, the contractor (i) shall promptly submit a written re- port to the Contracting Officer setting forth the subcontractor's reasons for such refusal and other pertinent information which may expedite disposi- tion of the matter, and (ii) shall not proceed with the subcontract without the written authorization of the Contracting Officer. Reports, instruments, and other information required to be furnished by a subcontractor to the Contracting Officer under the provisions of such a patent rights clause in a subcontract hereunder may, upon mutual consent of the Contractor and subcontractor, (or by direc- tion of the Contracting Officer) be furnished to the Contractor for transmission to the Contracting Offi- cer. [Rev. No. 9, 4/15/62.1 (h) The Contractor shall, at the earliest prac- ticable date, notify the Contracting Officer in writ- ing of any subcontract containing one or more patent rights clauses, furnish the Contracting Offi- cer a copy of each of such clauses; and notify the Contracting Officer when such subcontract is com- pleted. It is understood that with respect to any subcontract clause granting rights to the Govern- ment in Subject Inventions, the Government is a third party beneficiary; and the Contractor hereby assigns to the Government all the rights that the Contractor would have to enforce the subcontrac- tor's obligations for the benefit of the Government with respect to Subject Inventions. If there are no subcontracts containing patent rights clauses, a negative report is required. The Contractor shall not be obligated to enforce the agreements of any subcontractor hereunder relating to the obligations of the subcontractor to the Government in regard to Subject Inventions. Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 (i) The contractor recognizes that the Govern- ment, or a foreign Government with funds derived through the Military Assistance Program or other- wise through the United States Government, may contract for property or services with respect to which the vendor may be liable to the Contractor for royalties for the use of a Subject Invention on account of such a contract. The Contractor fur- ther recognizes that it is the policy of the Govern- ment not to pay in connection with its contracts, or to allow to be paid in connection with contract made with funds derived through the Military As- sistance Program or otherwise through the United States Government, charges for use of patents in which the Government holds a royalty free license. In recognition of this policy, the Contractor agrees to participate in this policy and to make ap- propriate arrangements for the exclusion of such charges from such contracts or for the refund of amounts received by the contractor with respect to any such charges not so excluded. [Rev. No. 9, 4/15/62.] 25. DATA (ASPR 9-203.1) (Feb. 1962) (a) The term "Subject Data" as used herein in- cludes writings, sound recordings, pictorial repro- ductions, drawings or other graphical representa- tions, and works of any similar nature (whether or not copyrighted) which are specified to be delivered under this contract. The term does not include financial reports, cost analyses, and other informa- tion incidental to contract administration. (b) The Contractor agrees to and does hereby grant to the Government, and to its officers, agents, and employees acting within the scope of their official duties, a royalty-free, nonexclusive and ir- revocable license throughout the world for Govern- ment purposes to publish, translate, reproduce, de- liver, perform, dispose of, and to authorize others so to do, all Subject Data now or hereafter covered by copyright. [Rev. No. 7, 2/15/62.1 (c) The Contractor shall not include in the Sub- ject Data any copyrighted matter, without the written approval of the Contracting Officer, unless he provides the Government with the written per- mission of the copyright owner for the Government to use such copyrighted matter in the manner pro- vided in paragraph (b) above. [Rev. No. 7, 2/15/62.1 (d) The Contractor shall report to the Contract- ing Officer, promptly and in reasonable written de- tail, each notice or claim of copyright infringement received by the Contractor with respect to all Sub- ject Data delivered under this contract. (e) Nothing contained in this clause shall imply a license to the Government under any patent or be construed as affecting the scope of any license or other right otherwise granted to the Govern- ment under any patent. (f) Unless otherwise limited below, the Govern- ment may duplicate, use, and disclose in any man- FP or PR 1 Feb. 63 13 ner and for any purpose whatsoever, and have others so do, all Subject Data delivered under this contract. [Rev. No. 7, 2/15/62.1 (g) The Contractor recognizes that the Govern- ment, or a foreign government with funds derived through the Mutual Security Program or otherwise through the United States Government, may con- tract for property or services with respect to which the vendor may be liable to the Contractor for charges for the use of Subject Data on account of such a contract. The Contractor further recognizes that it is the policy of the Government not to pay in connection with its contracts, or to allow to be paid in connection with contracts made with funds de- rived through the Mutual Security Program or otherwise through the United States Government, charges for data which the Government has a right to use and disclose to others, or which is in the public domain, or with respect to which the Gov- ernment has been placed in possession without restrictions upon its use and disclosure to others. This policy does not apply to reasonable reproduc- tion, handling, mailing, and similar administrative costs incident to the furnishing of such data. In recognition of this policy, the Contractor agrees to participate in and make appropriate arrangements for the exclusion of such charges from such con- tracts or for the refund of amounts received by the Contractor with respect to any such charges not so excluded. [Rev. No. 52, 3/15/60.] (h) Notwithstanding any provisions of this con- tract concerning inspection and acceptance, the Government shall have the right at any time to modify, remove, obliterate or ignore any marking not authorized by the terms of this contract on any piece of Subject Data furnished under this contract. [Rev. No. 38, 10/15/58; Rev. No. 52, 3/15/60.] 26. DATA ? WITHHOLDING OF PAYMENT (ASPR 9-207.2) (Apr. 1962) If "Subject Data" (as defined in the clause of this contract entitled "Data") , or any part thereof, is not delivered within the time specified by this contract or is deficient upon delivery (including having restrictive markings not specifically author- ized by the contract) , the Contracting Officer may, until such data is delivered or deficiencies are cor- rected, withhold payment to the Contractor of ten percent (10%) of the contract price unless a lesser withholding is specified in the schedule. Payments shall not be withheld nor any other action taken pursuant to this clause where the Contractor's fail- ure to make timely delivery or to deliver data with- out deficiencies arises out of causes beyond the con- trol and without the fault or negligence of the Con- tractor within the meaning of the clause hereof entitled "Default." The withholding of any amount or subsequent payment thereof to the Contractor shall not be construed as a waiver of any rights accruing to the Government under this contract. Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 27. MILITARY SECURITY REQUIREMENTS (ASPR 7-104.12) (June 1958) (a) The provisions of this clause shall apply to the extent that this contract involves access to security information classified "Confidential" in- cluding "Confidential-Modified Handling Author- ized" or higher. (b) The Government shall notify the Contractor of the security classification of this contract and the elements thereof, and of any subsequent re- visions in such security classification, by the use of a Security Requirements Check List (DD Form 254) or other written information. (c) To the extent the Government has indicated as of the date of this contract, or thereafter indi- cates, security classification under this contract as provided in paragraph (b) above, the Contractor shall safeguard all classified elements of this con- tract 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), in- cluding the Department of Defense Industrial Secu- rity Manual for Safeguarding Classified Informa- tion as in effect on the date of this contract, and any modification to the Security Agreement for the purpose of adapting the Manual to the Con- tractor'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 cogni- zance over the facility. (d) Representatives of the Military Department having security cognizance over the facility and representatives of the contracting Military Depart- ment shall have the right to inspect at reasonable intervals the procedures, methods, and facilities utilized by the Contractor in complying with the security requirements under this contract. Should the Government, through its authorized representa- tives, determine that the Contractor is not comply- ing with such requirements, the Government shall inform the Contractor in writing of the proper ac- tions to be taken in order to effect compliance with such requirements. (e) If, subsequent to the date of this contract, the security classifications or 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 de- creased 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 sub- contracts hereunder which involve access to clas- FP or PR 1 Feb. 63 14 sifled security information, 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 de- termine that any subcontractor proposed by it for the furnishing of supplies and services which will involve access to classified information in the Con- tractor's custody has been granted an appropriate facility security clearance, which is still in effect, prior to being accorded access to such classified information. [Rev. No. 34, 6/11/58; Rev. No. 48, 8/1/59.1 28. UTILIZATION OF SMALL BUSINESS CONCERNS (ASPR 7-104.14) (Jan. 1958) (a) It is the policy of the Government as de- clared by the Congress that a fair proportion of the purchases and contracts for supplies and serv- ices for the Government be placed with small business concerns. [Rev. No. 28, 1/28/58.] (b) The Contractor agrees to accomplish the maximum amount of subcontracting to small busi- ness concerns that the Contractor finds to be con- sistent with the efficient performance of this con- tract. 29. EXAMINATION OF RECORDS (ASPR 7-104.15) (Med.) (Feb. 1962) (a) The Contractor agrees that the Contracting Officer or any of his duly authorized representatives shall, until the expiration of three 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 Con- tractor involving transactions related to this con- tract. (b) The Contractor further agrees to include in all his subcontracts hereunder a provision to the effect that the subcontractor agrees that the Con- tracting Officer or any of his duly authorized repre- sentatives shall, until the expiration of three 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 involving transactions related to the subcontract. The term "subcontract" as used in this clause excludes (i) purchase orders not exceeding $2,500 and (ii) subcontracts or purchase orders for public utility services at rates established for uniform applicability to the general public. [Rev. No. 39, 11/3/58; Rev. No. 42, 1/9/59.1 30. GRATUITIES (ASPR 7-104.16) (Mar. 1952) (a) The Government may, by written notice to the Contractor, terminate the right of the Con- tractor to proceed under this contract if it is found, after notice and hearing, by the Secretary or his duly authorized representative, that gratuities (in Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 -Approved For Release 2001/05/04: CIA-RDP67B0 820R000200340001-6 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 Government with a view toward securing a contract or securing favorable treat- ment 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 find- ings 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 costs incurred by the Contrac- tor 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. 31. CONVICT LABOR (ASPR 7-104.17? ASPR 12-203) (Mar. 1949) In connection with the performance of work un- der this contract, the Contractor agrees not to em- ploy any person undergoing sentence of imprison- ment at hard labor. 32..1IATERIEL INSPECTION AND RECEIVING RITow_r (ASPR 7-105.7) At the tim-eThf each delivery under this contract the Contractor shalt-prepare and furnish to the Government, in the mann& an,c1 to the *tent re- quired by the Contracting Offic6,4, Materiel In- spection and Receiving Report- (DD Perm_ 250 or comparable form). T.be-dovernment shall fi111iis.4, the required for o the Contractor upon request. [Rev. No. 1J,-9730/62.] 33. SUBCONTRACTS (SOURCES) (AFPI 7-4030) (Mar. 1960) No contract shall be made by the Contractor with any other party for furnishing any of the completed or substantially completed articles, spare parts, or work, herein contracted for, without the written approval of the Contracting Officer as to sources. IC SUBCONTRACTS (ASPR 3-903.1)_ (Noy... 1962) If this contract prWaes -far 1) tion or incentive,tliCir011owing additionOirOvisiGns, _shall-101Y to subcontracts. FP or PR 1 Feb. 63 15 ( ) As used in this clause, the term "subcontra incl des purchase orders. (b Except as provided in paragraph (d) below, the ntractor shall notify the Contracting Officer reason bly in advance of entering into any; sub- contra which? (i) is n a cost-plus-a-fee, time and matqiial, or labor-ho r basis and which would involve An esti- mated a ount in excess of $10,000, inducting any fee; or (ii) is p posed to exceed $100,000; or' (iii) is o e of a number of subcont acts under this contrac with a single subcontra tor for the same or rela d supplies or services vihich, in the aggregate, are expected to exceed $1,90,000. (c) The adv nce notification reqyired by para- graph (b) abov shall include: (i) a descripti n of the suppliq or services to be called for by I e subcontract; of the proased subcontractor of why an how the proposed lected, inc ding the degree of (ii) identificatio and an explanatio subcontractor was s competition obtaine (iii) the proposed stitcontra t price, together with the Contractor's cost r pric analysis thereof, in- cluding current, compl te, a d correct cost or pric- ing data accompanied it a certificate from the subcontractor to the effc that all cost or pricing data has been considere by the subcontractor in preparing his proposal ad that such data is cur- rent, and has been pro ed the Contractor; and [Rev. No. 6, 11/15/61; o. 7, 2/15/62.1 (iv) identification of he t e of contract proposed to be used. (d) Advance noti ations o subcontracts, as re- quired by paragra (b) abo e, are not required for any subcontra (i) not o a cost-plus-a-fee, time and materia or labor-hou basis, if the Con- tracting Officer as in writing proved the Con- tractor's purcha ng system and he subcontract is within the limit tions of such app oval, or (ii) con- sented to in w ting by the Contra sting Officer as a proposed subc ntract prior to the e ecution of this contract. (e) The .ntractor shall not, wit out the prior written co ent of the Contracting ?fficer, enter into any bcontract for which adva ce notifica- tion to t Contracting Officer is req ed by this clause; ? ovided that, in his discretio the Con- tracting Officer may ratify in writing a y subcon- tract a d such ratification shall constitut the con- sent o the Contracting Officer require by this parag aph. (f) No consent by the Contracting Office to any sub ntract or any provisions thereof or a royal of e Contractor's purchasing system shall be con- st t ed to be a determination of the accepta lity o any subcontract price or of any amount p id nder any subcontract or to relieve the Contract a r Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Oc any responsibility for performing this contract, unless such approval or consent specifically provides otherwise. (g) The Contractor agrees that no subcontract placed under this contract shall provide for pay- ment on a cost-plus-a-percentage-of-cost basis. [Rev. No. 6, 11/15/61; AFPC No. 37, 8/14/62; Rev. No. 11, 9/30/62; Hey. No. 12, 11/26/62.1 35. SUBCONTRACTOR COST AND PRICING DATA (ASPR '7-104.42) (Nov. 1962) The following claus)5. shall apply to all incentive and redeterminable type._ contracts, and to all other negotiated contracts when the contractor has fur- nished a Certificate of Curiknt Cost or Pricing Data in connection with the initial pricing thereof. (a) The Contractor shall retfuire subcontractors hereunder to submit cost or pricing data under the following circumstances: (i) prior lb award of any cost-reimbursement type, incentive, ?or price rede- terminable subcontract; (ii) prior to the award of any subcontract the price of which is expected to exceed $100,000, except where the price thereof is based on adequate price competition, established catalog or market prices of commercial item's sold in substantial quantities to the general publik or prices set by law or regulation; (iii) prior to flie pricing of any subcontract change or other modifil.? cation for which the price adjustment is expected to exceed $100,000. (b) The Contractor shall require subcontractors to certify, in substantially the same form as that used in the certificate by the Prime Contractor to the Government, that to the best of their knowledge and belief, the cost and pricing data submitted under (a) above is accurate, complete, and current as of the date of execution, which date shall be as close as possible to the date of agreement on the negotiated price of the subcontract. (c) The Contractor shall insert the substance of this clause, including this paragraph (c), in each subcontract hereunder which exceeds $100,000, ex- cept where the price thereof is bEised on adequate price competition, established catalog or market prices of commercial items soldtin substantial quan- tities to the general public, or prices set by law or regulation. In each such/ excepted subcontract hereunder in excess of $100,000 the Contractor shall insert the substance of the following clause: Subcontractor Cost and Pricing Data? Price Adjustments (a) Paragraph S (b) and (c) of this clause shall become operatite only with respect to any change or other modification made pursuant to one or more provisions a this contract which involves a price adjustment in excess of $100,000. The requirements of this use shall be limited to such price adjust- FP or PR 1 Feb. 63 (b) The Contractor shall require subcontractors hereunder to submit cost or pricing data under the following circumstances: (i) prior to award of any cost-reimbursement type, incentive, or price rede- terminable subcontract; (ii) prior to award of any subcontract, the price of which is expected to ex- ceed $100,000 except where the price thereof is based on adequate price competition, established catalog or market prices of commercial items sold in sub- stantial quantities to the general public or prices set by law or regulation; (iii) prior to the pricing of any subcontract change or other modification for which the price adjustment i expected to exceed $100,000. (c) The Contractor shall require subcontractors to certify, in substantially the same form as that used in the certificate by the Prime Contractor to the Government, that to the best of their knowl- edge and belief the cost and pricing data submit- ted under (b) above is accurate, complete, and cur- rent as of the date of the execution, which date shall be as close as possible to the date of agree- ment on the negotiated price of the contract modi- fication. (d) The Contractor shall insert the substance of this clause including this paragraph (d) in each subcontract hereunder which exceeds $100,000. 36. SUBCONTRACTOR COST AND PRICING 'DATA?PRICE ADJUSTMENTS (ASPR 7-104.42) (Nov. 1962) ," \The following clause shall apply to all advertised anh* negotiated contracts in excess of $100,000, ? wheN the contractor has not furnished a Certificate of CuAent Cost or Pricing Data in connection with the inittal pricing thereof. 16 Subco ractor Cost and Pricing Data? Pri Adjustments (Nov. 1962) (a) Paragraph become operative or other modificatio provisions of this con adjustment in excess of of this clause shall be j ustments. (b) The Contractor shall quire subcontractors hereunder to submit cost or pr ng data under the following circumstances: (i) pri to award of any cost-reimbursement type, incentive or price redeter- minable subcontract; (ii) prior to a rd of any sub- contract the price of which is expec d to exceed $100,000, except where the price thereofN based on adequate price competition, established ?alog or market prices of commercial items sold "4i sub- stantial quantities to the general public or rices set by law or regulation; (iii) prior to the pricalg of any subcontract change or other modification 'pr which the price adjustment is expected to exceed $100,000. (b) and (c) of this clause shall ly with respect to any change made pursuant to one or more act which involves a price 100,000. The requirements led to such price ad- Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 (c) The Contractor shall require subcontractors t ce ify that to the best of their knowledge and bel f the cost and pricing data submitted under b) abov is accurate, complete, and current as o the date o the execution, which date shall be as close as poss le to the date of agreement on t e ne- gotiated rice of the contract modification/ (d) Th Contractor shall insert the sugitance of this clause ncluding this paragraph ( ) in each subcontract ereunder which exceeds $ 00,000. 37. COMPETI ON IN SUBCONTRACTING (ASPR 7-10 40) (Apr. 1962) The Contractor shall select s contractors (in- cluding suppliers) on a compesftive basis to the maximum practical xtent con stent with the ob- jectives and require ents of the contract. [Rev. No. 9, 4/15/62.] 38. UTILIZATION OF ONCERNS IN LABOR SURPLUS AREAS ( ? R 1-805.3) (Feb. 1962) It is the policy of th Gi ernment to place con- tracts with concerns ? ich ill perform such con- tracts substantially areas f persistent or sub- stantial labor surpl where th can be done, con- sistent with the e dent perfor ance of the con- tract, at prices n higher than a? obtainable else- where. The Co ractor agrees to u e his best efforts to place his s contracts in accor nce with this policy. In co plying with the fore ging and with paragraph ( ) of the clause of this \contract en- titled "Util' ation of Small Business Co cerns," the Contract? in placing his subcontracts s% pll observe the Loll.ing order of preference: (i) \ ersistent labor s rplus area concerns which are a o small busin s concerns; (ii) other persistent lalQr sur- plus 'rca concerns; (iii) substantial labor rplus are concerns which are also small business con- ce s; (iv) other substantial labor surplus acrea c ncerns; and (v) small business concerns which re not labor surplus area concerns. 39. STANDARDS OF WORK (ASPR 7-302.3) (June 1959) The Contractor agrees that the performance of work and services pursuant to the requirements of this contract shall conform to high professional standards. 40*-,GROUND AND FLIGHT RISK (ASPR 10-404-) 1962) (a) Notwithstanding any other provisions of this contract, except'ls- ay be sped caffy provided in the Schedule as an eoe i o this clause, the Government, subject to hdeQnitions and limita- tions of this clauseAstilmes the of damage to, or loss or desirunion of, aircraft '9 e open," during "o rtion," and in "flight," as the erms are d ed below, and agrees that the Contrac not be liable to the Government for any such FP or PR 1 Feb. 63 17 amage, loss, or destruction, the risk of which is sp a sumed by the Government. b) For the purposes of this clause: ( Unless otherwise specifically provided in the Sch ule, the term "aircraft" means? f (A) aircraft (including (I) complete aircraft/ and (II) a rcraft in the course of being manufaciUred, disasse bled, or reassembled, provided that an en- gine or portion of a wing or a wing is attached to a fus age of such aircraft) to be furnished to the Gove nment under this contract (whether be- fore or af r acceptance by the GovernmOnt) ; and i (B) airc ft (regardless of whether in,' a state of disassembly r reassembly) furnished by the Gov- ernment to tie Contractor under this6ntract; iin- cluding all p operty installed therei , or in the process of inst llation, or temporarily emoved from such aircraft; s ovided, however, that such aircraft and property a not covered by al separate bail- ment agreement. , (ii) The term "' the open" mea/is located wholly outside of building on the Contrqttor's premises or at such other plac as may bqf described in the Schedule as being i the open for the purposes of this clause, except t at aircraft furnished by the Government shall be eemedo be in the open at of all times while in the ontra tor's possession, care custody, or control. / (iii) The term "flight' mg/ans any flight demon- stration, flight test, taxi eit, or other flight, made in the performance of this contract, or for the pur- pose of safeguarding the i craft, or previously ap- proved in writing by the o tracting Officer. With respect to land based a'rera t, "flight" shall com- mence with the taxi ro I fro a flight line on the Contractor's premises, nd co tinue until the air- craft has completed the taxi r 1 in returning to a flight line on the Cintractor's remises; with re- spect to seaplanes, 'flight" sha commence with the launching froill a ramp on the Contractor's premises and cont'llue until the a rcraft has com- pleted its landing run upon return and is beached at a ramp on t Contractor's pre ises; with re- spect to helicop ers, "flight" shall cs mence upon engagement of he rotors for the pu ?ose of take- off from the ontractor's premises d continue until the aircraft has returned to th ground on the Contract r's premises and the rot s are dis- engaged; a with respect to vertical ta e-off air- craft, "fig " shall commence upon disen agement from any 1 unching platform or device on he Con- tractor's remises and continue until the aircraft has bee re-engaged to any launching p tform or devic on the Contractor's premises; pr vided, howeve , that aircraft off the Contractor's pr ises shall b deemed to be in flight when on the gr und or wa er only during periods of reasonable d ra- tion ollowing emergency landings, other landi gs mad in the performance of this contract, or Ian - ing approved by the Contracting Officer in writin Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 Approved For Release 2001/05/04: CIA-RDP67600820R000200340001-6 (iv) The term "Contractor's premises" means thos