NEGOTIATED CONTRACT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP67B00820R000300220042-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 38
• Document Creation Date: December 12, 2016
• Document Release Date: February 25, 2002
• Sequence Number: 42
• Publication Date: November 27, 1962
• Content Type: CONT

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NEGOTIATED CONTRACT
uoltract No. CA-20
Lockheed Aircraft Corporation
Burbank, California
Contract For: SeeSdhedule
Amount: See Schedule
Mail Invoice To: Performance Period
See Schedule
AdMinistrative Data:
This contract is entered into by and between the United States of America, herein-
after called the Government, represented by the Contracting Officer executing this
contract, and the above-named Contractor which is a corporation, incorporated in the
State of California, hereinafter called the Contractor.
The parties hereto agree that the Contractor shall furnish the facilities and
deliver all supplies and perform all the services set forth in the attached schedule
issued hereunder, for the consideration stated therein.
The rights and obligations of the parties to this contract shall be subject to and
overned by the attached schedule and General Provisions. In the event of any in-
mmeonsistency between the Schedule and the General Provisions, the Schedule shall
control.
IN WITNESS WEEREOk, the parties hereto have executed this contract as of
a 7 NOV 19134" 1962.
Signatures:
LOCKHEED AIRCRAFT CORPORATION
25X1A
BY
TITLE
7CEARENCE L. VIHNSON
Vice President
nib UNTED STATES OF AMERICA
25X1
BY
A
Contracting Officer
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Contract No. CA-20
CERTIFICATE
25X1A
25X1A I/ certify that I am
the 1 1 of the Corporation named
as Contractor herein; that Clarence L. Johnson
who
signed this contract on behalf of the Contractor was then
Vice President of said Corporation; that said contract
was duly signed for and in behalf of said Corporation by authority of
its governing body, and is within the scope of its Corporate powers.
25X1A
(Corporate Seal)
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INDEX TO SCHEDULE
Contract No. CA-20
Page
PART I - SERVICES AND SUPPLIES TO BE FURNISHED BY
TM CONTRACTOR 4
FART II- PERFORMANCE OF SERVICES 5
PART III-RELATED WORIC AND SERVICES 5
PART IV -CONSIDERATION AND PAYMENTS 6
FART V - REPRICING 7
PART VI -PERIOD OF PERFORMANCE 7
PART VII-SFECIAL SECURITY RESTRICTIONS 7
PART VIII-WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS 8
APPENDIX I 9
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Contract No. CA-20
SCHEDULE
PART I - SERVICES AND SUPPLIES TO BE FURNISHED BY Tilt: CONTRACTOR
(a) The Contractor shall furnish the services and supplies designated
in the three categories identified below:
Category I - Services Primarily At Or For Operations
25X1A
25X1A
25X1A
Item 1. The Contractor shall calibrate, certify and accom-
plish minor repairs to, such instrumentation
equipment used by it and other Contrators at the
Site. This effort will be accomplished primarily
through or at the Contractors plant.
Item 2.
The Contractor shall operate a Base Support Shop
(Machine Shop) in such a manner as to
provide material support to the Base and other
Contractors. On occasion, When necessary due to
workload conditions or the need for the use of
specialized equipment or facilities not available
the Contractor may "farm out" such
work to its plant.
25X1A Item 3. The Contractor shall furnish a crew
of mechanics as required to maintain in good
operating condition, the Ground Support Equipment
(GSE) in use AF equipment will be
maintained in accordance with USAF T.O. 00-20A-1
and other applicable T.O.'s.
25X1A
25X1A
25X1A
Item 4. The Contractor shall operate in accordance with
standard control procedures, the necessary Tool
Cribs for common usage
Category II - Services Primarily At The Contractor's Plant
Item 5. The Contractor shall, to the extent that in his
judgement it is necessary, inspect, test and
repair GFAE and GB? (including tool crib equip-
ment) Which is returned from or the
Depot for that purpose.
Item 6. The Contractor shall provide security investi-
gative services as necessary to' maintain clearance
for project personnel in accordance with the
requirements of Project Headquarters Security.
The Contractors may, with the approval of the
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Item 7.
Contracting Officer, subcontract such portion
Of this work as is required due to temporary
overload conditions.
The Contractor shall provide telephone and TWX
services to support the COMMO operations and to
provide sterile telephone service for customer
representatives located at the Contractor's plant.
Category III - Supplies
Item 8. The Contractor shall furnish such miscellaneous
supplies, of kinds commonly referred to by the
Contractor as "accomodation sales" and other
such kinds as agreed upon including tool crib
support items, as the Government calls for here-
under. Such calls will be written order lists;
serially numbered by each location, issued by
the Governments' Depot representatives (at the
depot Such lists may be in
the form of teletyped messages.
PART II - PERFORMANCE OF SERVICES
(a) The services performed by the Contractor shall be subject to the
surveillance and general direction of the Contracting Officer or his
authorized representatives.
(b) The Contractor shall supply to the Contracting Officer monthly
reports on the status of funds expenditure, and shall from time to time
furnish such other information as the Contracting Officer may require.
(c) The Contractor shall perform all operations under this contract
and complete each item of work as expeditiously as is reasonable.
(d) All operations under the terms of this contract will be per-
formed in an efficient and workmanlike manner and by qualified personnel
of the Contractor's organization Who are thoroughly familiar with the
type of work being performed.
(e) Services required by the Government and performed by the Con-
tractor's personnel of the labor categories specified in Appendix I will
be considered Direct Labor under this contract.
PART III - RELATED WORK AND SERVICES
In addition to the services and supplies to be provided above, the
Contractor will perform such other work and services as may be requested
by the Contracting Officer or his authorized representative and agreed to
by the Contractor, which are necessary to ensure performance of the con-
tract work.
7
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PART IV - CONSIDERATION AND PAYMENTS
(a) There has been allotted for this contract the following
amounts:
Period
1 July 1962 - 30 June 1963
Customer
No. 1
Amount
Total Amount
25X1A
*Represents approximately 6 months of funding
and is contingent upon the availability of funds
for this purpose during the Government's FY-1963.
(b) In accordance with the clause of this contract entitled
"PAYMENTS", the Contractor shall be paid as followst
(1) The Contractor shall charge labor on this contract con-
sistent with accounting practices approved by Government auditors for other
Government work being performed by the Contractor. The Contractor agrees
that only direct labor of its personnel of the labor categories designated
in Appendix I, engaged in the work called for .:by this contract will be in-
cluded in its billings hereunder. The Contractor shall be paid for all
receiving and inspection labor Whether or not repairs and overhaul are
accomplished and as provided in this contract.
(2) For materials and supplies furnished by the Contractor
or subcontractors under Category I and Category II of Part I of this con-
tract, the Contractor shall be reimbursed at actual cost in accordance
with Paragraph I of Appendix I. Materials and supplies may be charged
at prices determined by the Contractor's established method of pricing
for its other business. No amount representing profit shall be added to
the cost or price of supplies.or materials furnished under Category I and
Category II Of Part I of this contract. For materials and supplies pro-
cured and furnished by the Contractor under Category III Of Part I of this
contract, the Contractor shall be reimbursed at actual cost and in addi-
tion the service fee specified in Appendix I therefor.
(3)
The Contractor's invoices shall indicate the following:
(i) the period involved,
(ii) the total funds allotted for said period less the
total of all paid and unpaid invoices,
(iii) the balance of funds remaining unclaimed,
(4) The Contractor will indicate on its final invoice that
such invoice in fact is its "FINAL CIAIM" for the period and simultaneously
inform the Contracting Officer of the unexpeP4ed amount. The unexpended
amounts are not authorized for use in the subsequent period. Upon receipt
of this information and the cost audit report, the contract will be amended
to reflect the final amount for the applicable period.
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(5) The cost of performing work authorized under this con-
tract shall be charged to the funds allotted for the period in Which the
work was actually performed regardless of when the authorization was re-
ceived by the Contractor.
(c) It is hereby agreed that the "Contract Hourly Rates" as
specified in Appendix I are based on straight time wages of Contractor's
employees directly engaged in the performance of work under this contract
and includes all applicable overhead, General and Administrative Expense
and Profit. Extensive overtime is not contemplated under this contract.
It is understood and agreed that overtime worked by direct labor shall be
a direct charge and that overtime performed by indirect labor shall be
charged to overhead in accordance with the Contractor's established
accounting procedures. If there is a change in such established account-
ing practice, the parties shall negotiate an equitable revision of this
paragraph.
PART V - REPRICING
(a) In view of the fact that the Contractor's overhead and
general and administrative expense rates are revised from time to time
based on cost studies performed, the "Contract Hourly Rates" set forth
in Appendix I are also subject to revision as follows:
Rates stated for the period 1 July 1962 through 31 Dec 1962
shall apply provisionally until fixed "Contract:Hquay-Ratee have,been
negotiated between the Contractor and the Contracting Officer. Such new
"Contract Hourly Rates" will be negotiated within sixty (60) Days after
the beginning of each six-month period in Which they are to take effect,
and shall be incorporated into this contract by an amendment thereto.
(b) Any failure on the part of the parties hereto to agree to
any such revisions shall be considered a dispute concerning a quettion of
fact within the meaning of the article of this contract entitled "Disputes."
Pending settlement of such dispute, the Contractor shall diligently pro-
ceed with the performance of the subject work ,hereunder.
PART VI - PERIOD OF PERFORMANCE
(a) This contract shall be effective for the period 1 July 1962
through 30 June 1963.
(b) The Government is granted the right and option of newing or
extending this contract for any additional periods of time as agreed upon
by the parties hereto. This option to extend will be exercised by issuance
of an amendment to this contract.
PART VII - SPECIAL SECURITY RESTRICTIONS
The Contractor shall not reveal (i) the specific nature or any
details of the work being performed hereunder or (ii) any information What-
soever with respect to the department of the Government sponsoring this con-
tract and the work thereunder except as the Contractor is directed to reveal
such information by the Contracting Officer or by his duly authorized
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section of this contract to the contrary, the Contractor shall not interpret
any clause or section of this contract as requiring or permitting divul-
gence of such information to any person, public or private, or to any
officer or department of the Government without the express consent of the
Contracting Officer or his duly authorized representative for security
matters.
PART VIII - WAIVER OF REQVIREMENTS 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 thatthe requirement of any
of the clauses of the General Provisions are in conflict with security in-
structions 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 Provi-
sions of this contract issued by the Contracting Officer shall be in
writing, except that the approval by the Contracting Officer of any sub-
contract 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.
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ATTENDIX /4
( In consideration of the faithful performance of the work called for
under this contract, the Contractor will be paid for each hour of direct
labor and for material expended in performance of the work, as follows:
1. Materials - For raw materials and fabricated parts entering
directly into the products, the Contractor will be reimbursed allowable
costs of direct material, freight, transportation and material handling
as determined by the Contracting Officer in accordance with Part 2
Section XV, of the Armed Services Procurement Regulations. For materials
and supplies procured and furnished by the Contractor under Category III
of Part I of this contract, the Contractor will be reimbursed, in addition
a service fee ofl 0 actual costs to the Contractor
of such materials and supplies. 25X1A
Unless other specified on appropriate shipping documents, the return
of an item of equipment to the Contractor constitutes authorization for
all repair of overhaul work considered necessary in the Contractor's
judgment without further authorization or approval from the Contracting
Officer. The Contractor shall be paid for all inspection labor performed
whether or not repairs and overhauls are accomplished, at the appropriate rates
specified below.
2. Direct Labor - For each direct labor hour expended under any of
the categories listed below, the Contractor will be paid the appropriate
hourly rates specified opposite thereof:
Rates for the Period 1 July 1962 through 30 December 1962 )
At Contractor's Plant and/or at the Site
Category of Direct Labor
Base Support Shop Labor
Tool Crib Attendant
Shop& Factory Assistance
Ground Support Equipment Crews:
Foreman
Supervisor
Flight Line Mechanic
General Mechanic
Inspector
25X1A
Contract Hourly Rates
1/42)
(2)
(2)
(2)
(2)
Note (1) The Contractor shall be paid, the amounts paid by it to these
employees for transportation, separation allowance and an
amount equal to the total sum of overtime premium paid for
such direct labor hours during the six (6) month period
specified above.
Note (2) If these people are required to work the night shift.
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1.
2.
3.
4.
5.
6.
7.
8.
9,
10.
11,
12.
13.
14.
35,
:6.
17.
18,
39.
20.
21,
22,
23,
24.
25.
26.
27.
28.
INDEX OF GENERAL PROVISIONS
DEFINITIONS . ? ..
e40 ucovo *yew
?voodo ? ? .
CHANGES ..... . 06?0*Ire 0*000?
? ? ?????
INSPECTION. ? . . . . . . . ,. . a a ? . . . . . .
PAYPENTS. . . . . . . .....?..
.... ? 0
.
. . . .
iSSIGNNENT OF. CLAIMS . . T?0..,?, .. . . . . .
EXCUSABLE DELAYS. . . . . . . ?
DISPUTES. 0 . . . . ..... t . ..... 0 . . .. . ? .
NOTICE AND ASSISTANCE REGARDING PATENT INFRINGE/ENT . a 0
BUY ANERICAN ACT. , .
CONVICT L8BOR . . . . 6 ? 0 i 06
??????????
EIGHT-HOUR ',la OF 1912. .... i 6 4?6????????1.?
0M?BE.4,TEY PUBLTO CONTRACTS ACTid * ii.06..a,
a a
NOADISCRININATION IN ENPLOYNENT a . 4 4 . . . . * 4 4
OFFICIALS NOT TO BENEFIT. . . . . . ? . . . .a a aa 6e
COVENANT AGAINST CONTINGENT FES 6 6
REPORTyUC OF ROYALTili,S. . . 0 . 0 . . . . . . ? . . . ? a 0
TEMINATION FOR CONVENIENCE OF THE GOVERNMENT . . . . . . .
SUBCONTRACTS. .6.?-???? 0 ? ? 0 0 ? 0 ........ a
RECORDS . a .? ? . a . ? 0 ? ? 0 0 0
156
GRATUITIES, . . . 0 . . . ,
GOVERNMENT FURNISHED PROPERTY
EPLOYI/ENT OF ALIENS. . . 0 . . .
*? 09000?0?0 0
MILITARY SECURITY REQUIREANTS. 0?000009?0**
COPY;iIGHT . , . . . . . . . 0 . 0 6 0 p*vvir?se?
FILING OF PATENT APPLICATIONS . 0 . 0 . . .......
NOTICE TO THE GOVERNMENT OF LABOR DISPUTES. 0 . . . . G :49?
AUTHORIZATION Afll) CONSENT , . . a a . . . 006 ? 5 0 0 1
ALTERATIONS IN CONTRACT . . . . . . . . 0 , 0 . . . . . .
.
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GENERAL PROVISIONS
1. DEFINITIONS
As used throughout this contract, the following terms shall
have the meanings set forth below:
(a) The term "Secretary" means the Secretary, the Under
Secretary, or any Assistant Secretary of the Department and the bead
or any assistant head of the executive agency; and the term "his duly
authorized representative" means any person or' persons or board
(other than the Contracting Officer) authorized to act for the Secretary;
and the term "Department" means that component of the Government having
cognizance of this contract and represented by the Contracting Officer
executing this contract.
(b) The term "Contracting Officer" means the person executing
this contract on behalf of the Government, and any other officer or
civilian employee whe is a properlyAesignated Contracting Officer;
and. the term include8, except as otherwise provided in this contract,
the authorized representative of aContracting Officer acting within
the limits of his authority.
(c) Except as otherWise provided in this contract, the term
"subcontracts" includes purchase oder d under this c6rIttact
(d) The term "contract work" means all work to be performed
under this contract including any studies covering fundamental, theo?
retical, or experimental investigations; any extension of the inves?
tigative findings and theories of a scientific and technical nature
into practical application; any tangible terms, hereinafter referred
to as supplies, if called for here14, furnished to the Government;
and any reports, data, computations, plans, drawings, and specifica?
tions with respect to the foregoing.
(e) The term "direct labor," as used in the Payments clause,
shall be defined in the schedule.
2,? CHANGES
The Contracting Officer may at any time, by a written order, within
the general scope of this contract, and without notice to any sureties,
make changes in (i) drawings, designs, or specifications, (ii) direct
the addition of work or services, (iii) make changes in method of
shipping or packing, and (iv) make changes in place of delivery. If
such changes require a change in the time of performance of the work
called for hereunder, the contract shall be modified in writing
accordingly. The hourly rate set forth in the schedule shall not be
adjusted by reason of any change ordered under this clause.
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3. INSPECTION
(a) All material and workmanship shall be subject to inspection
and test by representatives of the Government. For this purpose, the
Contractor shall allow, at all reasonable times, inspectors and other
Government personnel free access to the plant and operations and shall
furnish such facilities as may be required for the work. The Contractor
shall inform the inspector when the work is ready for inspection. The
Government representative shall have the right to (i) require the
replacement of parts which are not in accordance with applicable speci?
fications, and (ii) require the correction of defects.
(b) The Contractor shall provide and maintain an inspection
system acceptable to the Government covering the inspection of the
supplies and services furnished under this contract. Records of ail
inspection work by the Contractor shall be kept complete and available
to the Government during the performance of the contract.
(c) The Contractor agrees that it will employ only qualified
and competent employees in the performance of this contract and that
the services performed will conform to the highest professional
standards for the work involved.
(d) Prior to final acceptance by the Government, any Correction
Of defects in supplies or services, or repladement of materials to
make the itet conform to contract requirements, which correction or
replacement is made necessary by inferior workmanship or material,
shall be at no cost to the Government.
(e) Finnl acceptance by the Government shall be conclusive
except as regards latent defects, 4aud, or such gross mistakes as
amount to fraud. The Contractor shall, befsre or after final ac?
ceptance, remedy defects or failures due to such causes at no cost
to the Government.
4, PAYMENTS
The Contractor shall be paid as follows upon the submission of
properly certified invoices or vouchers approved by the Contracting
Officer:
(a) Time Rate.
(i) The amounts computed by applying the appropriate time rate
or rates set forth in the schedule to the number of direct labor hours
performed, which rates shall include wages, overhead, general and ad?
ministrative expense and profit. Fractional parts of an hour shall
be payable on a prorated basis. The Contractor will substantiate
vouchers by evidence of actual payment and by individual daily job
timecards, preferably signed by the workers performing the services.
Payments will normally be made at Contracterls payroll intervals,
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but may be varied by the Contracting Officer if conditions so warrant.
(ii) At withstanding the provisions of subparagraph (i) hereof,
the Contracting Officer, as provided in the schedule, shall withhold
payment of certain amounts due under this contract. Such amounts shall
become payable upon completion of this contract.
(iii) Unless provisions of the schedule hereof otherwise
specify, the hourly rate or rate set forth in the schedule shall
not be varied by virtue of the Contractor having performed work on an
overtime basis, If the schedule provides rates for overtime, the
premium portion of those rates will not be reimbursable unless the over-
time is approved in writing by the Contracting Officer.
(b) Materials (Including Subcontracts).
(i) Allowable costs of direct materials shall be determined
by the Contracting Officer in accordance with Part 21 Section IV, of
the Armed Services Procurement Regulation. The Contractor shall
support all material costs claimed by submitting paid invoices or
storeroom requisitions, Direct materials as referenced by this clause
are defined as those materials which enter directly into the end
product, or which are used or consiped directly in connection with
the furnishing of such product,
(]i) The cost of subcontracts which are authorized pursuant
to the clause hereof entitled "Subcontracts" shall be reimbursable
costs hereunder.
(iii) The Contractor shall, to the extent of its ability,
procure materials at the most advantageous prices available, with
due regard to securing prompt delivery of satisfactory materials,
take all cash and trade discounts?rebates, allowances, credits,
salvage, commissions, and bonifications? and when unable to take
advantage of such benefits it shall promptly notify the Contracting
Officer to that effect and the reason therefor. Credit shall be
given to the Government for cash and trade discounts, rebates,
allowances, credits, salvage, the value of resulting scrap, when
the amount of such scrap is appreciable, commissions and beni-
fications which have accrued to the benefit of the Contractor or
would have so accrued except for the fault or neglect of the Con-
tractor. Such benefits lost through no fault or neglect on the
part of the Contractor or lost through fault of the Government,
shall not be deducted from gross costs.
(c) As of the date of execution of this contract, there has ILLEGIB
been allotted for it the total sum set forth in the scnedule. This
sum may be increased from time to time by the Government solely at
its discretion, and the contract shall be amended accordingly. Not-
withstanding any other provisions of this contract, the Contractor shall
not be obligated to perform any services, pursuant hereto, the
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aggregate price of which when added to the aggregate price of all
services theier,ofore furnished puxsuaut hereto would exceed said
sun. If at any time the Contractor considers it likely that the
aggregate amount set forth in the schedule may be exceeded within
45 days, the Contractor will so notify the Contracting Officer and
the parties ma thereupon enter into negotiations for an a7endment
to or modification of this contract, as may be appropriate. Anything
in this contract to the contrary. notwithstanding, the Government shall
not be obligated to pay to the Contractor any amount in excess of the
sum pllotted for this contract.
5 ASSIGNMENT -OF CLAIMS
(a) Pursuant to the provisions of the Assignment of Claims
Act of 1940 CB amended (31 U. S. Code 203, 41 U. S. Code 15), if
this contract provides for payments aggregating a,000 or more,
claims for moneys due or to become due to the Contractor from the
Government under this contract may be assigned to a bank, trust
company, or other financing institution, including any Federal
lending agency, and may thereafter be further assigned and re-
assigned to any such institution, Any such assignment or re-
assignment shall cover all amounts payable under this contract
and not already paid, and shall not be made to more than one
party, except that any such assignment or reassignment may be
Made to one party or agent or truStee for two or tore parties
participating in such financing. :Notwithstanding any other
provision of this contract, payment to an assignee of any moneys
due or to become due under this contract shall not, to the extent
provided, in said Act as amended, be subject to reduction or set-off.
(b) In no event shall copies of this contract or of any plans,
specifications, or other similar documents relating to work under
this contract, if marked nOP SECRET," "SECRET," "CONFIDENTIAL,"
be furnished to any assignee of any claim arising under this con-
tract or to any other person not entitled to receive the same;
PROVIDED, That a copy or any part or all of this contract so
marked may be furnished, or any information contained therein
may be disclosed, to such assignee upon the prior written author-
ization of the Contracting Officer.
(c)- The Contractor shall obtain the written authorization of
the Contracting Officer prior to the assignment of any rights under
this contract.
6. EXCUSABLE DELAYS
The Contractor shall not be in default by reason of any failure
in performance of this contract in accordance with its terms (including
any failure by the Contractor to make progress in the prosecution of
the work hereunder which endangers such performance) if such failure
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arises out of causes beyond the control and without the fault or
negligence of the Contractor. Suck C0.1.10E include, but are not
restricted to: acts of God or of the public enemy; acts of the
Government; fires; floods; epidemic6; quarantine restrictions;
strikes; freight embargoes; unusually severe weather; and failure of
subcontractors to perform or make progress due to such causes,
unless the Contracting Officer shall have determined that the
supplies or services to be furnished under the subcontract were ob-
tainable from other sources and shall have ordered the Contractor
in writing to procure such services or supplies from such other
sources, and the Contractor shall have failed reasonably to comply
with such order. Upon request of the Contractor, the Contracting
Officer shall ascertain the facts and extent of such failure and,
if he shall determine that such fallure was occasioned by any one
or more of the said causes, the dOvivery schedule shall be reisod
accordingly subject to the rights of the Government under the clause
hereof entitled "Termination."
DISPUTES
Except as otherwise provided in this contract, any dispute
concerning a question of fact arising under this contract which is
not disposed of by agreement shall be decided by the Contracting
Officer, who shall reduce his decision to writing and mail or
otherwise furnish a copy thereof to the ContraCtor. Within thirty
(30) days from the date of receipt of such copy, the Contractor may
appeal by mailing or otherwise furnishing to the Contracting Officer
a written appeal addressed to the Secretary, and the decision of the
Secretary or his duly authorized representative for the hearing or
suCh appeals shall, unless determined by a court of competent juris-
diction to have been fraudulent or capricious or arbitrary or so
grossly erroneous as necessarily to imply bad faith, or not supported
by substantial evidence, be final and conclusive; PROVIDED, That) if
no such appeal is taken, the decision of the Contracting Officer shall
be final and conclusive. In connection with any appeal proceeding
under this clause, the Contractor shall be afforded an opportunity
to be heard and to offer evidence in support of its appeal. Pend-
ing final decision of a dispute hereunder, the Contractor shall pro-
ceed diligently with the performance of the contract and in accord-
ance with the Contracting Officers decision.
8. NOTICE AND ASSISTANCE REGARDING PATENT INFRINGEPENT
The provisions of this clause shall be applicable only if the
amount of this contract is in excess of 46,000.
(a) The Contractor shall report to the Contracting Officer,
promptly and in reasonable written detail, each notice or claim of
patent infringement based on the performance of this contract of which
the Contractor has knowledge.
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(b) In the event of litigation against the Government on
account of any claim of patent infringement arising out of the per-
formance of this contract or out of the use of any supplies furnished
or work or services performed hereunder, the Contractor shall furnish
to the Government, upon request, all evidence and information in
possession of the Contractor pertaining to such litigation. Such
evidence and information shall be furnished at tne expense of the
Government except in those cases in which the Contractor has agreed
to indemnify the Government against the claim being asserted.
9, BUY ANERICAN ACT
The Contractor agrees that there will be delivered under this
contract only such unnanufactured articles, materials and supplies
(which term "articles, materials and supplies" is hereinafter re-
ferred to in this clause as "supplies") as have been mined or pro-
duced in the United States, and only such manufactured supplies as
have been manufactured in the United States substantially all from
supplies mined, produced or manufactured, as the case nay be, in
the United States. Pursuant to the Buy Amorical Act (41 U, S.
Code 10a-d), the foregoing provision shall not apply (i) with
respect to supplies excepted by the Secretary from the applica-
tion of that Act, (ii) with respect to supplies for use outside
the United States, or (iii) with respect to the supplies to be
delivered tinder this contract which are of a class or kind de
termined by the Secretary or his duly authorized representative
not to be mined, produced, or manufactured, as the case may be,
in the United States in sufficient and reasonably available
commercial quantities and of a satisfactory quality, or (iv)
with respect to such supplies from, which the supplies to be
delivered under this Contract are manufactured, as are of a
class or kind, determined by the 4cretary or his duly author-
ized representative not to be mined, produced, or manufactured,
as the case may be, in the United States in sufficient and rea-
sonably available commercial quantities and of a satisfactory
quality: PROVIDED, That this exception (iv) shall not permit
delivery of supplies manufactured outside the United States if
such supplies are manufactured in the United States in suffi-
cent and reasonably available commercial quantities and of a
satisfactory quality.
10, CONVICT LABOR
In connection with the performance of work under this contract,
the Contractor agrees not to employ any person undergoing sentence
of imprisonment at hard labor.
11. EIGHT-HOUR LAW OF 1912
This contract, to the extent that it is of a character specified
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in the Eight-Hour Law of 1912 as amended (40 U. S. Code 32A-326) and
is not covered by the Walsh-He4ey Public Contracts Act (41 U. S.
Code 35-45) is subject to the following provisions and exceptions
of said Eight-Hour Law of 1912 4s mended, and to all other provi-
sions and exceptions of said Lai:
No laborer or mechanic doing any part of the work contemplated
by this contract, in the employ of the Contractor shall be required
--or permitted to work more than eight hours in any one cillandar day
upon such work, except upon the gondition that compensation is paid
to such laborer or mechanic in accordance with the provisions of
this clause. The wages of every such laborer and mechanic employed
by the Contractor shall be computed on a basic day rate of eight
hours per day; and work in excess of eight hours per day is per-
mitted only upon the condition that every such laborer and mechanc
shall be compensated for all hours worked in excess of eight hours
per day at not less than one and one-half times the basic rate of
pay, For each violation of the requirements of this clause a
penalty of five dollars shall be Imposed upon the Contractor for
each such laborer or mechanic for' every calendar day in which such
employee is required or permitted to labor more than eight hours
upon said work without redeiVing compensation computed in accord-
ance with this clause; and all penalties thus imposed shall be
withheld for the use and benefit of the Government.
WALSH-HEALEY PUBLIC CONTRACTS ACT
If this contract is for the manufacture or furnishing of
materials, supplies, articles or equipment in an amount which
exceeds or may exceed a0,000 and is otherwise subject to the
Walsh-Healey Public Contracts Act as amended (41 U. S. Code
35-45), there are hereby incorporated by reference ell repre-
sentations and stipulations required by said Act and regulations
issued thereunder by the Secretary of Labor, such representations
and stipulations being subject to all applicable rulings and inter-
pretations of the Secretary of Labor which are now or nay hereafter
be in effect, except that the Contractor shell not be required to in-
clude this clause in subcontracts issued hereunder when the inclusion
of this clause in a subcontract would jeopardize or conflict with
the security considerations established in connection with this
contract.
13. NONDISCRIMINATION IN EMPLOYMENT
(a) In connection with the performance of work under this con-
tract, the Contractor agrees not to discriminate against any employee
or applicant for employment because of race, religion, color, or
national origin. The aforesaid provision shall include, but not
be limited to, the following: employment, upgrading, demotion, or
transfer; recruitment or recruitment advertising; layoff or ternina-
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tion; rates of pay or other forms of compensation; and selection for
training, including apprenticeship The Contractor agrees to post
hereafter in conspicuous places, available for employees and appli?
cants for employment, notices to 1)0 provided by the Contracting
Officer setting forth the provisions of the nondiscrimination clause.
(b) The Contractor further agrees to insert the foregoing
provision in subcontracts issued hereunder, except subcontracts for
standard commercial supplies or raw materials, and except as in?
sertion of the foregoing provision in a subcontract would jeopardize
or conflict with the security considerations established in connec?
tion with this contract.
14. OFFICIALS NOT TO BENEFIT
No muter 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.
JL COVENANT AGAINST CONTINGENT FEES
The Contractor warrants that no person or selling agency has
been employed or retained to solicit or secure this contract upon
an atreemont or understanding for a commission, percentage, broker?
age, or contingent fee, excepting bona fide employees or bona fide
established connercial or selling agencies maintained by the Contractor
for the purpose of securing business. For breach or violation
of this warranty the Government shall have the right to annul
this contract without liability or in its discretion to deduct
from the contract price or consideration the full amount of such
commission, percentage, brokerage or contingent fee.
16? REPORTING OF ROYALTIES
The provisions of this clause shall be applicable only if
the amount of the contract is in excess of 40,000.
(a) The Contractor shall report in writing (in quadruplicate)
to the Contracting Officer as soon as practicable after execution
of this contract whether or not any royalties in excess of ,p250
have benn paid or are to be paid by the Contractor directly to any
person or firm in connection with the performance of this contract.
If royalties in excess of"0250 have been paid or are to be paid to
any person or firm, the report shall include the following items of
information with respect to such royalties (including the initial
(1) The name and address of each licensor to whom royalties
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in excess of ,I2.50 have been paid or are to be paid,
(2) The patent numbers$ patent application serial numbers
(with filing dates), or other identification of the
basis for such royalties,
(3) The manner of computing the royalties consisting of
(i) a brief identification of each royalty-bearing unit
or process, (ii) the total amount of royalties, and (ill)
the percentage rate or dollars and cents amount of royal-
ties on each such unit or process; PROVIDED that if the
royalties cannot be computed in terms of units or dollars
and cents value, then other data showing the manner in
which the Contractor computes the royalties.
(b) In lieu of furnishing a report under paragraph (a), the
Contractor may furnish a single, consolidated report for each
accounting period of the Contractor during which the Contractor
has contracts with the Government provided the Contractor has
requested and obtained the prior written approval of the Contracting
Officer. Such consolidated report shall be furnished, when the
furnishing thereof has been approved, in the number of copies as
approved, as soon as practicable after the close of the accounting
Period covered by the report. Such consolidated report shall be
made in accordance with Contractors established aCcounting practice
and shall include, for the accounting period, the total auount of
royalties accruing to each licensor at a rate in excess of gp1,000
per annum on the Contractorls overran business, together with (i)
the name and address of each such licensor, (ii) the patent numbers,
patent application serial numbers (with filing dates), or other
identification of the basis for such royalties, (iii) a brief
description of the subject matter of the license under which
royalties are charged, (iv) the percentage rate or unit amount,
or if the royalties do not accrue by rate or unit amount, such
other data showing the manner by which the royalties accrue to
licensor, and (v) an estimate or approximation (without detailed
accounting) of the portion of such royalties that nay be attrib-
utable to Government contracts. The Contractor shall, if requested
by the Government, furnish at Government expense a more detailed
allocation of such royalty payments attributable to Government
contracts.
(c) In the event that the Contractor requests written approval
to furnish consolidated reports under paragraph (b) above, the Con-
tracting Officer shall promptly consider the request and furnish to
the Contractor a letter stating whether or not the request is approved
and, notwithstanding any such approval, the Contracting Officer shall
have the right to question any such subsequently furnished report as
to accuracy or completeness of data and to ask for additional in-
formation. The Contractor shall furnish a copy of such letter of
approval to the Contracting Officer administering this contract.
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(d) After payment of eighty percent (80%) of the amount of
this contract, as from time to time amended, further payment shall
be withheld until a reserve of either (i) ton percent (10%) of
such amount or (ii) ';p5,000, whichever is less) shall have been
set aside, such reserve or the balance thereof to be retained
until the Contractor shall have furnished to the Contracting
Officer the report called for by paragraph (c) hereof or the
copy of the letter approving the Contractorfs request to furnish
the report under paragraph (b); PROVIDED that no amount shall
continue to be withheld from payment for the causes specified in
this paragraph (d) if the Contracting Officer shall find that the
Contractor has not been furnished a letter as required by paragraph
(c) within a reasonable time after making written request to submit
a single, consolidated report under the provisions of paragraph (b)
of this clause; and PROVIDED FURTHER that the Contracting Ofiicer
may, in his discretion, order payment to be withhold in the amount
and manner above provided if the report called for by paragraph (a)
is unsatisfactory or if the report called for by paragraph (b) is
due but has not been received) or if received, is found to be unsat?
isfactory. No amount shall be withheld under this paragraph when
the minimum amount specified by this paragraph is being withheld
under other provisions of this contract. The withholding of any
amount or subsequent payment thereof to the Contractor shall not
be construed as a waiver of any right accruing to the Government
under this contract.
(b) The Contractor agrees that it will exert all reasonable
effort to advise the Contracting Officer, at the time of
delivering any copyrightable or copyrighted work furnished
under this contract, of any adversely held copyrighted or
copyrightable material incorporated in any such work and of
any invasion of the right of privacy therein contained.
(c) The Contractor agrees to report to the Contracting Officer)
promptly and in reasonable written detail) any notice or claim
of copyright infringement received by the Contractor with re?
spect to any material delivered under this contract.
17. TERMINATION FOR CONVENIENCE OF THE GOVERNMENT
(a) The performance of work under this contract may be
terminated by the Government in accordance with this clause in
wholo: or from time to time in part, (1) whenever the Contractor
Shall default in performance of this contract in accordance with
its terms (including in the term default any such failure by the
Contractor to make progress in the prosecution of the work here?
under as endangers such performance), and shall fail to cure such
default within a period of 10 days (or such longer period as the
Contracting Officer may allow) after receipt from the Contracting
Officer of a notice specifying the default, or (2) whenever for
any reason the Contracting Officer shall determine that such
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termination is in the best interests of the Government. Any such
termination shall be effected by delivery to the Contractor of a
Notice of Termination specifying whether termination is for the
default of the Contractor or for the convenience of the Government,
the extent to which performance of work under the contract is
terminated, and the date upon whieh..such termination becomes
effective. If, after Notice of TerMination of this contract for
default under (1) above, it is determined that the Contractor's
failure to perform or to nnke pregress in performance is due to
causes beyond the control and without the fault or negligence of
the Contractor pursuant to the provisions of the clause of this
contract entitled "Excusable Delays," the Notice of Termination
shall be deemed to have been issued under (2) above, and the rights
end obligations of the parties hereto shall in such event be governed
accordingly.
(b) After receipt of a Notice of Termination and except as
otherwise directed by the Contracting Officer, the Contractor shall
(1) stop work under the contract On the date and to extent specified
in the Notice of Termination; (2) -place no further orders or sub?
contracts for materials, services, or facilities except as may be
necessary for completion of such portion of the work under the contract
as is not terminated; (3) terminate all orders and subcontracts to
the extent that they relate to the performance of work terminated
by the Notice of Termination; (4) -assign to the Government, in the
manner and to the extent directed by the Contracting Officer all of
the right, title, and interest of the Contractor under the orders or
subcontract 8 so terminated; (5) with the approval or ratification of
the Contracting Officer, which approval or ratification shall be final
and conclusive for all the purposes of this clause, settle all out?
standing liabilities and all dal:4 arising out of such termination of
-orders and subcontracts, the cost of which would be reimbursable, in
whole or in part, in accordance with the provisions of this contract;
(6) transfer title (to the extent that title has not already been
transferred) and, in the manner, to the extent, and at the times
directed by the Contracting Officer, deliver to the Government (I):
the fabricated or unfabricated parts, work in process, completed
work, supplies, and other material produced as a part of, or acquired
in respect of the performance of, the work terminated by the Notice of
Termination; (ii) the completed or partially completed plans, drawings,
information, and other property which, if the contract had :been com-
pleted, would be required to be furnished to the Government; and (iii)
the jigs, dies, fixtures, and other special tools and tooling acquired
or manufactured for the performance of this contract for the cost of
which the Contractor has been or will be reimbursed under this con?
tract; (7) use its best efforts to sell in the nanner, at the tine,
to the extent, and at the price or prices directed or authorized
by the Contracting Officer, any property of the types referred to 1,.n
provision (6) of this paragraph: PROVIDED, HOWEVER, That the
Contractor (i) shall not be required to extend credit to any purchtser?
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and (ii) may acquire any such property under the conditions prescribed
by and at a price or prices approved by the Contracting Officer: AND
PROVIDED FURTHER, Thad, the procecas of any such transfer or disposition
shall be applied in reduction of? any payments to be made by the
Government to the Contractor under this contract or shall otherwise
be credited to the price or cost of work covered by this contract or
paid in such manner as the Contracting Officer may direct; (8) complete
performance of such part of the work as shall not have been terminated
by the Notice of Termination; and (9) take such action as may be
necessary, or as the Contracting Officer may direct, for the protection
and preservation of the property related to this contract which is in
the possession of the Contractor and in which the Government has or
nay acquire an interest. The Contractor shall proceed immediately with
the performance of tne above obligations notwithstanding any delay in
determining or adjusting any amount reimbursable under the provic:ons
of this clause. At any time after expiration of the plant clearance
period, as defined in Section VIII, Armed Services Procurement Regnloi,;_un,
as it may be amended from tine to time, the Contractor may submit to the
Contracting Officer a list, certified as to quantity and quality, Of
any or all items of termination inventory not previously disposed of,
exclusive of items the disposition of which has been directed or
authorized by the Contracting Officer, and may request the Government
to re-dove such items or enter into a storage agreement covering them,
Not later than fifteen (15) days thereafter, the Government will accept
title to such items and remove them or enter into a storage agreement
covering the same, provided that the list submitted shall be subject to
verification by the Contracting Officer upon removal of the items, or
if the items are stored, within forty?five (45) days from the date of
submission of the list, and any necessary adjustment to correct the
list as submitted shall be made prior to final settlement.
(c) After receipt of a Notiqe of Termination, the Contractor
shall submit to the Contracting Officer its termination claim, in
the form and with the certification prescribed by the Contracting
Officer. Such claim shall be submitted promptly but in no event
later than 2 years from the effective date of termination, unless one
or more extensions in writing are granted by the Contracting Officer
upon request of the Contractor made in writing within such 2?year
period or authorized extension thereof. However, if the Contracting
Officer determines that the facts justify such action, he may receive
and act upon any such termination claim at any time after such 2?year
period or any extension thereof, Upon failure of the Contractor to
submit its termination claim within the tine allowed, the Contracting
Officer may determine on the basis of information available to nim, 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), the Contractor
and the Contracting Officer may agree upon the whole or any part of
the amount or amounts to be paid to the Contractor by reason of the
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total or partial termination of work pursuant to this clause which
amount or amounts may include a reasonable allowance for profit on
work done. The contract shall be amended accordingly, and the Con-
tractor shall be paid the agreed amount.
(e) In the event of the f-ilure of the Contractor and the Con-
tracting Officer to agree in whole or in part, as provided in paragraph
(d) above, as to the amounts to be paid to the Contractor in connection
with the termination of work pursuant to this clause, the Contracting
Officer shall determine on the basis of information available to h':.0
the amount, if any, due to the Contractor by reason of the termination
and shall pay to the Contractor the amount determined as follows:
(1) If the termination of the contract is for the convenience of
the Government:
(i) There shall be included for direct labor hours (as defined
in the Schedule of the contract) o4 amount which shall be determimd
by multiplying the nUmber of direct labor hours expended prior and up
to the effective date of termination by the hourly rato or rates sot
forth in the Schedule less any hourly rate payments theretofore made
to the Contractor.
(ii) There shall be included therein all costs of material
reimbursable in accordance with this contract not previously paid to
the Contractor for the performance of this contract prior to the effecive
date of the Notice of Termination,
(iii) There shall be included therein the reasonable costs of
settlement, including accounting, legal, clerical, and other expenses
reasonably necessary for the preparation of sottlment claims and
supporting data with respect to tho terminated portion of the contract
and for the termination and settlement of subcontracts thereunder,
together with reasonable storage, transportation, and other costs
incurred in connection with the protection or disposition of termination
inventory.
(2) If the termination of the contract is for the default of the
Contractor:
(i) There shall be included for all direct labor hours (as
defined in the Schedule of the contract) an amount which shall be
determined by multiplyin3 the number of direct labor hours expended
prior and up to the effective date of termination by the hourly rate
or rates set forth in the Schedule less the profit factor contained
therein as indicated in the Schedule and loss any hourly rate pay-
ments theretofore made.
(ii) There shall be included therein such costs as are set
forth in subparagraphs (1)(ii) and (iii) of this paragraph (e):
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PROVIDED, HOWEVER, That there shall not be included any amounts for the
preparation of the Contractors Settlement Proposal.
(3) If the amount determined under subparagraphs (1) and (2),
above, is less than the total payments theretofore made to the Con-
tractor, the Contractor shall repay the excess amount to the Government.
(f) The Contractor shall have the right of appeal, under the
clause of this contract entitled "Disputes," from any determination
made by the Contracting Officer under paragraphs (c) or (e) above,
except that if the Contractor has failed to submit its claim withn
the time provided in paragraph (c) above, and has failed to request
extension of such time, it shall have no such right of appeal. In
any case where the Contracting Offilcer has made a determination of the
amount due under paragraph (c) or (e) above, the Government shall ?eay
to the Contractor the following: (i) if there is no right of appeal
hereunder or if no timely appeal has been taken, the amount so de-
termined by the Contracting Officer, or (ii) if an appeal has beer
taken, the amount finally determined on such appeal.
(g) In arriving at the amount due to the Contractor under thin
clause there shall be deducted (1) all unliquidated advance or oth3r
unliquidated payments theretofore made to the Contractor, (2) any
claim which the Government may have against the Contractor in connection
with this contract, and (3) the agreed price for, or the proceeds of
sale of any materials, supplies, or other things acquired by the Con-
tractor or sold pursuant to the provisions of this clause and not
otherwise recovered by or credited to the Government.
(h) In the event of a partial termination, the portion of the
contract relating to hourly rates which are payable with respect to
the work under the continued portiep of the contract shall be equitably
adjusted by agreement between the Contractor and the Contracting Officer,
end such adjustment shall be evidenced by an amendment to this contract.
(i) The Government may from time to time, under such terms and
conditions as it may prescribe, make partial payments and payments on
account against costs incurred by the Contractor in connection with the
terminated portion of the contract whenever in the opinion of the
Contracting Officer the aggregate of such payments shall be within the
amount to which the Contractor will be entitled hereunder, If the
total of such payments is in excess of the amount finally determined
to be due under this clause, such excess shall be payable by the Con-
tractor to the Government upon demand, together with interest com-
puted at the rate of 6 percent per annum, for the period from the
date such excess is repaid to the Government; PROVIDED, HOWEVER, That
no interest shall be charged with respect to any such excess payment
attributable to a reduction in the Contractoris claim by reason of
retention or other disposition of termination inventory until 10 days
after the date of such retention or disposition.
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(j) Unless otherwise provided for in this contract, or by
applicable statute, the Contractor from the effective date of
termination and for a period of 6 years after final settlement under
this contract shall preserve and make available to the Government
at all reasonable times at the office of the Contractor, but without
direct charge to the Government, all its books, records, documents,
and other evidence bearing on the cost and expenses of the Contractor
under this contract and relating to the work terminated hereunder, or,
to the extent approved by the Contracting Officer, photographs,
microphotographs, or other authentic reproductions thereof.
18. SUBCONTRACTS
(a) No contracts shall be made by the Contractor for the
furnishing of any of the work herein contracted for without the
written approval of the Contracting OffiCer. For the purposes of
this clause, purchase of raw material or commercial stock items shall
not be considered work.
(b) The Contractor agrees that no subcontract rlaced under this
contract shall provide for payment on a cost-plus-percentage-of-cost
basis.
RECORDS
(a) (1) The Contractor agrees to maintain books, records,
documents and other evidence pertaining to the costs and expenses of
this contract (hereinafter collectively called the "records") to the
extent .and in such detail as will properly reflect all net costs,
direct and indirect, of labor, materials, equipment, supplies and
services, and other costs and expenses of whatever nature for which
reimbursement is claimed under the provisions of this contract. The
Contractorls accounting procedures and practices shall be subject to
the approval of the Contracting Officer;. PROVIDED, however, that no
material change will be required to be made in the Contractorts
accounting procedures and practices if they conform to generally
accepted accounting practices and if the costs properly applicable to
this contract are readily ascertainable therefrom.
(2) The Contractor agrees to make available at the office
of the Contractor at all reasonable times during the period set
forth in subparagraph (4) below any of the records for inspection,
audit or reproduction by the Comptroller of the Contracting
Government agency or his authorized representatives.
(3) In the event the Comptroller of the Contracting
Government agency or any of his duly authorized representatives
determines that his audit of the amounts reimbursed under this
contract as transportation charges will be made at a place other
than the office of the Contractor, the Contractor agrees to deliver,
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with the reimbursement voucher covering such charges or as may be
otherwise specified within two ye:ars after reimbursement of charges
covered by any such voucher, to such representative as may be
designated for that purpose through the Contracting Officer such
documentary evidence in support of transportation costs as may be
required by the Comptroller of the Contracting Government agency
or any of his duly authorized representaives.
(4) Except for documentary evidence delivered to the
Government pursuant to subparabraph (3) above, the Contractor shall
preserve and make avnilable its records for a period of six years
(unless a longer period of time is provided by applicable statute)
from the date of the voucher or invoice submitted by the Contractor
after the completion of the work under the contract and designated
by the Contractor as the "completion voucher" or "completion ._vo:Le"
or, in the event this contract hap been completely terminated, from
the date of the termination settlement agreement; PROVIDF,D, however,
that records which relate to (A) appeals under the clause of this
contract entitled "Disputes," (3) litigation or the settlement of
claims arising out of the performance of this contract, or (C) costs
or expenses of the contract as to which exception has been taken by
the Comptroller of the Contracting Government agency or any of his
duly authorized representatives, shall be retained by the Contractor
until such appeals, litigation, 4aims, or exceptions have been dis
posed of, but in no event for los than the six-year period mentioned
abovo.
(5) Except for documentary evidence delivered pursuant to
subparagraph (3) above, and the records described in the proviso of
subparagraph (4) above, the Contractor may in fulfillment of its
oblicpation to retain its records d$, required by this clause, sub-
stitute photographs, nicro-photographs or other authentic reproduc-
tions of such records, after the expiration of two years following
the last day of the month of reimbursement to the Contractor of the
invoice or voucher to which such records relate, unless a shorter
period is authorized by the Contracting Officer with the concurrence
of the Comptroller of the Contracting Government agency or his duly
authorized representative.
(6) The provisions of this paragraph (a), including this
subparagraph (6), shall be applicable to and included in each sub-
contract hereunder which is on a cost, cost-plus-a-fixed-fee, time-
and-material or labor-hour basis.
(b) The Contractor further agrees to include in each of his
subcontracts hereunder, other than those set forth in subparagraph
(a) (6) above, a provision to the effect that the subcontractor
agrees that the Comptroller of the Contracting Government agency or any
of his duly authorized representatives, shall, until the expiration
of three years after final payment under the subcontract, have access
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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
paragraph (b) only, excludes (i) purchase orders not exceeding 41,000
and (ii) subcontracts or purchase orders for public utility services
at rates established for uniform applicability to the general public,
20, GRATUITIES
(a) The Government nay, by written notice to the Contractors
terminate the right of the Contractor to proceed under this
contract if it is found, after notice and hearing, by the
Secretary or his duly authorized representative, that grat-
uities (in the form of entertainment, gifts, or otherwise)
were offered or given by the Contractor, or any agent or
representative of the Contractor, to any officer or employee
of the Government with a view toward securing a contract or
securing favorable treatment with respect to the awarding or
amending, or the making of any determinations with respect to
the performance of such contract; PROVIDED, That the existence
of the facts upon which the Secretary of his duly authorized
representative makes such findings shall be in issue and may
be re-:iewed in any competent court,
(b) In the event this contract is terminated as provided in
paragraph (a) hereof, the Government shall be entitled (i) to
pursue the sane remedies against the Contractor as it could
pursue in the event of a breach of the contract by the Con-
tractor, and (ii) as a penalty in 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
representative) which shall be not ;.oss than three nor more
than ten tines the costs incurred by the Contractor in provid-
ing any such bratuities to any such officer of employee.
(c) Tho 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,
21, GOVERNMENT-FURNISHED PROPERTY
ILLEGIB
(a) The Government shall deliver to the Contractor, for use
in connection with and under the terns of this contract, the
property described in the Schedule or specifications, together
with such related data and information as the Contractor may re-
quest and as nay reasonably be required for the intended use of
such property (hereinafter referred to as "Government-furnished
Property"). The delivery or performance dates for the supplies or
services to be furnished by the Contractor under this contract are
based upon the expectation that Government-furnished Property
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suitable for use will be delivered to the Contractor at the times
stated in the Schedule or, if not so stated, in sufficient time to
enable the Contractor to meet such delivery or performance dates.
In the event that Government-furnished Property is not delivered to
the Contractor by such time or times, the Contracting Officer snall,
upon timely written request made by the Contractor, make a determination
of the delay occasioned the Contractor thereby, and shall equitably
adjust the delivery or performance dates or the contract price, or
both, and any other contractual provision affected by such delay, in
accordance with the procedures provided for in the clause of this
contract entitled "Changes." In the event the Government-furnished
Property is received by the Contractor in a condition not suitable
for the intended use the Contractor shall, upon receipt thereof,
notify the Contracting Officer of such fact and, as directed by tho!
Contracting Officer, either (i) return such property at the Govcr-m-
mentls expense or otherwise dispose of the property, or (ii) effect
repairs or Lodifications. Upon the completion of (i) or (ii) above,
the Contracting Officer upon written request of the Contractor shall
equitably adjust the delivery or performance dates or the contract
price, or both, and any other contractual provision affected by the
rejection or disposition or the repair or modification, in accordance
with the procedures provided for in the clause of this contract doll-led
Chanes," The foregoing provisions for adjuStment are exclusive and
the Government shall not be liable to suit for breach of contract by
reason of any delay in delivery of Government-furnished Property or
delivery of such property in a condition not suitable for its intended
use, 4 a
(b) By notice inwriting the Contracting Officer may decrease
the property furnished or to be furnished by the Government under
this contract. In any such case, he Contracting Officer upon the /
written request of the Contractor all equitably adjust the delivery
or performance dates or the contract price, or both, and any other
contractual provisions affectedby the decrease, in accordance with the
procedures provided for in the clause of this contract entitled "Chan0eFJ1J
(c) Title to the Government-furnished property sht111 remain in the
Government. Title to Government-furnished property shall not be
affected by the incorporation or attachment thereof to any property
not owned by the Government, nor shall such Government-furnished
property, or any part thereof, be or become a fixture or lose its
identity as personalty by reason of affixation to any realty. The
Contractor shall maintain adequate property control records of
Government-furnished property in accordance with the provisions of the
"Manual for the Control of Government Property in the Possession of
Contractors" (Appendix B, Armed Services Procurement Regulation) as
in effect on the date of the contract, which Manual is hereby incor-
porated by reference and made a part of this contract.
(d) The Governmet-furnished property shall, unless otherwise
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provided herein, be used only for the performance of this contract.
(e) The Contractor shell maintain and administer, in accordance
with sound industrial practice, a program for the maintenance, repair,
protection and preservation of Government-furnished property, until
disposed of by the Contractor in accordance with this clause. In the
event that any damage occurs to Gevernment-furnished Property the
risk of which has been assumed by the Government under this contract,
the Government shall replace such items or the Contractor shall make
such repair of the property as the Government directs; provided,
however, that if the Contractor cannot effect such repair within the
time required, the Contractor shall dispose of such property in the
manner directed by the Contracting Officer. The contract price
includes no compensation to the Contractor for the performance of
any repair or replacement for which the Government is respons2ble9
and an equitable adjustment will be made in the contract price for
any such repair or replacement of Government-furnished property made
at the direction of the Government. Any repair or replacement for
which the Contractor is responsible under the provisions of this
contract shall be accomplished by the Contractor at its own expense.
(f) (i) Except for loss, destruction or damage resulting from
a failure of the Contractor, due to willful misconduct or lack of
good faith of any of the Contractorts managerial personnel as defined
herein, to maintain and administer the program for the maintenance,
repair, protection and preservation of the Government-furnidhed
property as required by paragraph (e) hereof, and except as specifically
provided in clause (s) of this contract or in the clause or
clauses of this contract designated in the Schedule, the Contractor
shall not be liable for loss or destruction of or damage to the Govern-
ment-furnished property (A) caused '4 any peril while the property is
in transit off the Contracterrs premises, or (B) caused by any of the
following perils while the property is on the Contractorts or sub-
contractorrs premises, or on any other premises where such property
may properly be located, or by removal therefrom because of any of the
following perils:
(I) Fire; lightning; windstorm, cyclone, tornado, hail;
explosion; riot, riot attending a strike, civil commotion; vandalism
and malicious mischief; sabotage; aircraft or objects falling therefrom;
vehicles running on land or tracks, -excluding vehicles owned or
operated by the Contractor or any agent or employee of the Contractor;
smoke; sprinkler leakage; earthquake or volcanic eruption; flood, meaninc
thereby rising of a body of water; hostile or warlike action, including
action in hindering, combating, or defending against an actual, impend-
ing or expected attack by any government or sovereign power (de jure
or de faoto), or by any authority using military, naval, or air forces,
or by an agent of any such government, power, authority, or forces; or
(II) Other peril, of a type not listed above, if such ether
peril is customarily covered by insurance (or by a reserve for self-
,
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insurance) in accordance with the normal practice of the Contractor,
or the prevailing practice in the industry in which the Contractor is
engaged with respect to similar property in the same general locale.
The perils as set fcrth in (A) and (B) above arc hereinafter
called "excepted perils."
This clause sharn not be conStrued as relieving a subcontractor
from liability for loss or destruction of or damage to the Government-
Furnished property while in its possession or control, except to tnc
extent that the subcontract, with the prior approval of the Controoting
Officer, nay provide for the relief of the subcontractor from such
liability. In the absence of such approval, the subcontract shall
contain appropriate provisions requiring the return of all Governi?:mt-
Furnished property in as good condition as when received, except ler
reasonable wear and tear or for the utilization of the property in
accordance with the provisions of the prime contract.
The term "Contractor's managerial personnel" as used herein moons
the Contractor's directors, officers and any of its managers, superinten-
dents, or other equivalent representatives who have supervision or
direction of (I) all or substantially all of the Contractor's busineJo;
(II) all or substantially all of the Contractor's operation at any one
plant or separate location at which the contract is being perf9rned;
(III) a separate and complete najor industrial operation in connection
with the performance of this contract.
(ii) The Contractor represents that it is not including in the
price hereunder, and agrees that it will not hereafter include in any
price to the Government, anycharge or reserve for insurance (including
self-insurance funds or reserves) covering loss or destruction of or
damage to the Government-furnished property caused by any excepted peril.
(III) Upon the happening of loss or destruction of or damage to
any Government-furnished property caused by an excepted peril, the
Contractor shall notify the Contracting Officer thereof, and shall
communicate with the bmss and Salvage Ori;anization?.if any, now or
hereafter designated by the Contracting Officer, and with the assistance
of the Loss and Salvage Organization so designated (unless the Con-
tracting Officer has directed that no such organization be employed),
shall take all reasonable steps to protect the Government-furnished
property from further damage, separate the damaged and undamaged Govern-
ment-furnished property, put all the Government-furnished property
in the best possible order, and furnish to the Contracting Officer a
statement of ; (A) the lost, destroyed and damaged Government-furnished
property (B) the time and origin of the loss, destruction or damage,
(C) all known interests in commingled property of which the Government-
furnished property is a part, and (D) the insurance, if any, covering'
any part of or interest in such commingled property. The Contractor
shall be reimbursed for the expenditures made by it in performing
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its obligations under this subparagraph (iii) (including charges made
to the Contractor by the Loss and Salvage Organization, except any of
such charges the payment of which the Government has, at its option,
assumed directly), to the extent approved by the Contracting Officer
and set forth in a Supplemental ilgreement.
(iv) With the approval of the Contracting Officer after loss or
destruction of or damage to Government-furnished property, and subject
to such conditions and limitations as may be irvosed by the Contracting
Officer, the Contractor may, in order to minimize the loss to the Gov-
ernment or in order to permit resqmption of business or the like, sell
for the account of the Government any item of Government-furnished
property which has Leen damaged beyond practicable repair, or which
is so commingled or combined with property of others, including the
Contractor, that separation is impracticable.
(v) Except to the extent of any loss or destruction of or
damage to Government-furnished property for which the Contractor ic
relieved of liability under the foregoing provisions of this clause,
and except for reasonable wear and tear or depreciation, or the_utilizatl-n
of the Government-furnished property it accordance with the provisions
of this contract, the Government-furnished property (other than properly
permitted to be sold) shall be returned to the Government in as geed
condition as when received by thel Contractor in connection with this
contract, or as repaired under paragraph (e) above.
(vi) In the event the Contractor is reimbursed or compensated
for any loss or destruction of or ,damage to the Government-furnished
property, caused by an excepted peril, it shall equitably reimburse
tne Government. The Contractor shall do nothing to prejudice the
Governmentts rights to recover against third parties for any such
loss, destruction or damage and, upon the request of the Contracting
Officer, shall at the Governmentrs expense, furniSh to the Government
all reasonable assistance and cooperation (including the prosecution
of suit and the execution of instruments of assignment in favor of the
Government) in obtaining recovery. In addition, where a subcontractor
has not been relieved from liability for any loss or destruction of or
damage to the Government-Furnished property, the Contractor shall enforce
the liability of the subcontractor for such loss or destruction of or
damage to the Government-Furnished property for the benefit of the
Government.
(vii) (Where applicable). In the event any aircraft are to be
furnished under this contract, any loss or destruction of, or damage
to, such aircraft or other Government-furnished property occurring in
connection with operations of said aircraft will be governed by the
clause of this contract captioned "Flight Risks", to the extent such
clause is, by its terms, applicable,
(E) The Government shall at all reasonable times have access to
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the premises wherein any Government-furnished property is located.
(h) Upon the completion of this contract, or at such earlier
date as may Le fixed by the Contracting Officer, the Contractor
shall submit, in a form acceptable to the Contracting Officer;
inventory schedules covering all items of Government-furnished property
not consumed in the performance of this contract (including any result-
ing scrap), or not theretofore delivered to the Governments and shall
deliver or make such other disposal of such Government-furnished
property, as may Le directed or authorized by the Contracting Officer.
Recoverable scrap from Government?furnished property shall Le reported
in accordance with a procedure and in such form as the Contracting OffA-
cer may direct. The net proceeds of any such disposal shall be credited
to the contract price or shall be paid in such other manner as the Con-
tracting Officer may direct.
(i) Directions of the Contractinr Officer and communications of
the Contractor shall be in writing.
ER2LOYNENT OF ALIENS
If this contract calls for furnishing or constructing aircraft
aircraft parts, or aeronautical accessories, no aliens employed by
the Contractor shall be permitted to have access to the plans or
specifications, or the work Under constructions or to participate
in the contract trials, without the written consent beforehand of
the Secretary or his duly authorized representative.
23, MILITARY SECURITY REQUIREMENTS
(a) The provisions of this clause shall apply to the extent
that this contract involves access to security information classified
"Confidential" including "Confidential?Modified Handling Authorized"
or higi:Or
(b) The Government shall notify the Contractor of the security
classification of this contract and the elements thereof, and of any
subsequent revisions in such security classification, by the use of
a Security Requirements Check List (DD Form 254 and 254-l).
(c) To the extent the Government has indicated as of the date
of this contract, or thereafter indicates, security classification
under this contract as provided in paragraph (b) above, the Con-
tractor shall safeguard all classified elements of this contract and
shall provide and maintain a system of security controls within its
own organization in accordance with the requirements of:
(i) the Security Agreement (DD Form 441), including the
Department of Defense Industrial Security Manual for Safeguarding
Classified Information as in effect on date of this contract, and
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any modification to the Security Agreement for the purpose of
adapting the Manual to the Contractors business; and
(ii) any amendments to said Manual made after the date of
this contract, notice of which has been furnished to the Contractor
by the Security Office of the Military Department having security
cognizance over the facility.
(d) Representatives of the Military Department having
security cognizance over the facility and representatives of the
contracting Military Department 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 repre-
sentative, determine that the Contractor has not complied with
requirements, the Government shall inform the Contractor in writing
of the proper actions 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 con-
tract price shall be Subject to an equitable adjustment by reason
of such increased or decreased costs. Any equitable adjustment
shall be accomplished in the same manner as if such chanes were
directed under the "Changes" clause in this contract.
(f) The Contractor agrees to insert, in ell subcontracts here-
under which involve access to classified security information, pro-
visions which shall conform substantially to the language of this
clause, includin?; this paragraph (e) but excluding the last sentence
of paragraph (e) of this clause.
(a) The Contractor also agrees that it shall determine that
any subcontractor proposed by it for the furnishing of supplies
and services which will involve access to classified information
in the Contractorls custody has Loon granted an appropriate facility
security clearance, which is still in effect, prior to being accorded
access to such classified security information.
24,, COPYRIGHT
(a) The Contractor agrees to and does hereby grant to the Govern-
ment, and to its officers, agents and employees acting within the
scope of thier official duties, (i) a royalty-free, nonexclusive
and irrevocable license to reproduce, translate, publish, use,
and dispose of, and to authorize others so to do, all copyright-
able material first produced or composed and delivered to the
Government under this contract by the Contractor, its employees
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or any individual or concern specifically cuployed or assigned to
originate and prepare such material; and (ii) n Jicmse as afore?
said under any and all copyrighted or copyrightaLle work not first
produced or composed by the Contractor in the performance of this
contract but widen is incorporated in the material furnished under
this contract, provided that such license shall be only to the
extent the Contractor now has, or prior to completion or final
settlement of the contract may acquire, the right to grant such
license without becoming liable to pay compensation to others
solely because of such grant.
25, FILING OF PATENT APPLICATIONS
(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 pro?
posed application to the Contracting Officer for determination
whether, for reasons of national security, such application
should be placed under an order of secrecy or sealed in accord?
ance with the provisions of 35 1.% S. Code 181-188 or the issuance
of a patent shoal 1 be otherwiSe delayed under pertinent statutes
or regulations; and the Contractor shall observe any instructions
of the ContractinL, Officer with respect to the manner of delivery
of the patent application to the U. S. Patent Office 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 X3b)days from the date
of mailing or other transmittal of the proposed application, the
Contractor may file the application.
(b) The Contractor shall furnish to the Contracting Officer, at
the tine of or prior to the time when the Contractor files or
causes to he filed a patent application disclosing any subject
matter of this contract, which subject matter is classified
"Confidential," a copy of such application for determination
whether, for reasons of national security, such application
should be placed under an order of secrecy or the issuance of
a patent should be otherwise delayed under pertinent statutes
or regulations,
(c) In filing any patent applic.ation coming within the scope of
this clause, the Contractor shall observe all applicable security
regulations 'covering the transuission of classified subject matter.
26. NOTICE TO THE'GOVEBAWENT'AOY LABOR DISPUTES
Whenever the Contractor has knowledge that any actual or potential
labor dispute is delnyinE, or threatens to delay the timely performance
of this contract, the Contractor shall immediately give notice thereof,
including all relevant information with respect thereto, to the Con?
tracting Officer,
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27., AUTHORIZATION AND CONSENT
The Govern,aent hereby Lives its authorization and consent
(without prejudice to its ribats of indenification, if such riEhts
Ere provided for in this contract) for all uso and manufacture, in
tne perfonnance of this contract or any part hereof or any alend-
mont hereto or any subcontract hereunder (includin any lower-tier
subcontract), of any patented invention (i) eiaLo-ied in tne struc-
ture or coL.Iposition of any article the delivery of which is accepted
by the Government under this contract, or (ii) utilized in tae
machinery, tools, or .methods the upe of which necessarily results
from co..xplianco by the Contractor or the usint subcontractor with
(a) specifications or written provisions now or hereafter fornint_
a part of this contract, or CO specific written instructions
Eiven by the Contractin, Officer directinL the uanner of perfor-
Laance. The Contracteris entire liEbility to the Government fur
patent infrinLaaent shall be dcteruined solely by the provisions
of the inaemnity clause, if any, included in the contract and the
Government assumes liability for all other infrinLeent to the
extent of the authorization and consent hereinabove ?,ranted.
28? ALTERZIONS IN CONTRACT
The followinL niterations were undo in this contract prior to
siEnature thereof by the parties te thin contract:
See page 26.
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13. NONDISCRIMINATION IN EMPLOYMENT contained herein is deleted and
a new clause 13 NONDISCRIMINATION IN EMPLOYMENT, attached hereto, is
substituted therefor.
a. In General Provision 4, PAYMENTS, Paragraph (a) (i) is deleted
and the followineparagraph is substituted therefor:
(a) Time Rate.
(i) The amounts computed by applying the appropriate time rate
or rates set forth in the Schedule to the number of direct labor hours
performed, which rates shall include wages, overhead, general and
administrative expense and profit. Fractional parts of an hour shall
be payable on a proratatasis. Vouchers will be subsequently substantiated
by the Contractor during site audit by the cognizant Government auditor
by evidence of actual payment and by individual daily job time-cards,
preferably signed by the workers performing the services or equivalent
records. Evidence of deliveries of completed work will be furnished by
the Contractor during site audit. Payments will notmally be made monthly.
b. In General Provision 4, PAYMENTS, Paragraph (b) (i) is deleted
and thefbllowing paragraph is substituted therefor:
(b) Materials (Including Subcontracts).
(i) Allowable costs of direct materials shall be determined
by the Contracting Officer in accordance with Part 2, Section XVI of the
Armed Services Procurement Regulations. Vouchers will be subsequently
substantiated by the Contractor during site audit by the cognizant
Government auditor by supporting all material costs claimed by
maintaining paid invoices or storeroom requisitions. Evidence of
deliveries of completed work will be furnished by the Contractor during
site audit. Direct materilas as referenced by this clause are defined
'Name' as those materilas which enter directly into the end product, or which
are used or consumed directly in connection with the furnishing of
such product, and such material costs shall be %lined monthly.
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ILLEGIB
t-Uou.
reerees ns aollows:
torrtxice of torA nnoer Co IC eae
coatraeaor vaii not discrimieste against aee eeployee or
capfloev t for employment because of race, creea, color, netional oriele,
T or.tractor will take affirmative action to ensure east sepeiceeeo are
empioyea, and that employees are treated during emploemeet, wiehout eegard
to their race, creed, color or national oragen, Such aeeien saall
but not be limited to the followingz Emploement? upepeeinge aemotlon or
traasfer; recruitment or recrultment advertising; layoff or termlnateoa;
rates of pay or other forms of compensation; and oelectien ior trainevg?
Including apprenticeship. The contractor agrees to post ln ewe:pie:wee
places, available to employees and applicants for employaent, aetices to be
provided by the contracting officer setting forth the provasions of this
"ewe eoadescrimleation clause.
(2) The contractor vill, in all solicitations or aevertiaemente for
employees placed by or on behalf of the contractor, stete that nil stiefied
applicants viii receive consideration, for emploenent untaout regard to racee
creed, color, or national origin-
(3) The contractor will send to each laboe erion or repreeentaeive et
workers with which he has a collective bargainire agreezunt or other contract
or understanding, a notice, to be provided by tae ageecy contracting officer,
advising the said labor union or vorkers repreleneative or the contractor's
eommitments under this section, and shall post opies ef tee notice AA
zonopicuous places available to employees and replicautr aor employmeat,
(4) Tbe contractor will comply with all provisions ef Executave Order
lie. 10925 of March 6, 19614 and of the rules, regulatione, bed relevant
orders of The President's Committee on Equal EMployment epyortunity created
,aerebT,
The contractor viii furnish all irformation env reports required
Executive Order Nee 10925 of March 61 19611 and by thy ruler, regulations,
and orders of the said Committee or pursuant thereto, nut wili remit acceea
to his books, recorde, ana accounts by the contracting agency ane tbe Committec
for pureoses of investigation to ascertain compliance eite such reles?
regulations, and orders.
ur ,.ri.ractc ti
imtnation clauses of th.s contract or vetb any of the veld Les, regulatleesa
or ordevs, this contract may be cancelled in Whole or in art and the
eontractor may be eeclared ineligible for further government contracts ea
aecordance with procedures authorized in axecutive Order ao. i0925 of earca
6, 1961, and such other sanctions may be imposed and remedies 7nvoiled f5A
9rov'Lded in the said Executive Order or by rule, regulateor, or erdee of t;be
Presedent's Committee an Equal Employment appartunity, or as otherwaee pro ied
by Imte.
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Approved For Release 2002/06/11: CIA-RDP67600820R000300220042-3
(7) The contractor will include the provisions of the foregoing
yrayngra.phs 1,1) through (6) in every subcontract or purchase orr unless
exempted by rules, reguL,iations? or orders of The President" i4 Committee
qua]. Rsployment Opportunity issued parsuent to Section 303 of Executive
Order No, 10925 of March 6, 1961, so that such provisions 7431 be binding
respect to any subcontract or purchase order as the contacting agency
way direct as a means or enforcing such prosrisions? including 56.11CtiOnS for
non--compliance; Provided., however?. that in the event the. contrictor becomes
avolved in, or is tnreatened with, litigation vith a sCocceltrIctor or vandor
as a result ox such direction by the contracting agency, co9.tractor uy
request the United. F?ates to enter into such litigation i protect the
-ZAe United States,.
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