CONTRACT NO. DG-456

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Collection: 
Document Number (FOIA) /ESDN (CREST): 
CIA-RDP68B00307R000100190014-9
Release Decision: 
RIPPUB
Original Classification: 
K
Document Page Count: 
35
Document Creation Date: 
December 9, 2016
Document Release Date: 
April 6, 2001
Sequence Number: 
14
Case Number: 
Publication Date: 
December 1, 1965
Content Type: 
CONT
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PDF icon CIA-RDP68B00307R000100190014-9.pdf3.44 MB
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Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 OSA-4158-65 Copy of 5 STATINTL NEGOTIATED CONTRACT Contract No. DG-456 AF33(657)-15227 CONTRACT FOR: See Schedule AMOUNT: See Schedule MAIL INVOICES TO: PERFORMANCE PERIOD: See Schedule , ADMINISTRATIVE DATA: This is a Fixed Price Type Contract This contract is entered into by and between the. United States of STATINTL America, hereinafter called the Government, represented by the Contracting Officer executing this contract, and the above named hich is a corporation, incorporated in the State of 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 governed by the attached Schedule and the. General Provisions. The the event of any inconsistency between the Schedule and the General Provisions, the Schedule shall control. IN WITNESS WHEREOF, the parties hereto have executed this contract as of 24 NOV 196 STATINTL THE UNITED STATES OF AMERICA B TITLE Contracting Officer Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Contract No. DG-456 AF33(657)-1.5227 CERTIFICATE STATINTL , certify that I am of the Corporation named STATINTL Corporate Seal) as Contractor herein; thatL - M-- -.-,TA signed this contract on behalf of the Contractor was then 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 scope of its Corporate Powers. the Secretary -2- Approved For Release 2001/04/20 : CIA-RDP68BOO307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Contract No. DG-456 AF33(657)-15227 INDEX TO SCHEDULE Page PART I - MATERIAL AND SERVICES TO BE FURNISHED . . . . . . 4 PART II - DELIVERY SCHEDULE . . . . . . . . . . . . . . . 5 PART III - GOVERNMENT FURNISHED PROPERTY . . . . . . . . . 5 PART IV - INSPECTION AND ACCEPTANCE . . . . . . . . . . . . 5 PART V - PROGRESS PAYMENTS . . . . . . . . . ... . . . . . 5 PART VI - FUNDS ALLOTTED, CONSIDERATION, AND PAYMENT. . . . 8 PART VII - SPECIAL SECURITY RESTRICTIONS . . . . . . . . . . 8 PART VIII - WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS. . . 8 PART IX - LETTER CONTRACT SUPERSEDED. . . . . . . . . . . . 9 PART X - ALTERATIONS IN SCHEDULE . . . . . . . . . . . . .9 Approved For Release 2001/04/20 : CIA RDP68B00307R000100190014-9 STATINTL Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 PART II - DELIVERY SCHEDULE A. The first set (consisting of one each of Item 1, 2, and 3 of PART I above) to be delivered by 7 January 1966. Second set by 28 January 1966. Third set by 11 February 1966, and the fourth set by 4 March 1966. Items four (4) designated locations. to be delivered in sets to B. The manuals (Item 4) to be delivered with the equipment. C. Progress Reports (Item 5) to be furnished monthly. D. The technical field services (Item 6) to be furnished, as required, at the four (4) designated locations after delivery of the sets to be furnished under Items 1, 2, and 3 of PART I above. PART III - GOVERNMENT FURNISHED PROPERTY For the performance of this contract, the. Government will supply the Contractor with such property as agreed to by the Contractor and the Contracting Officer, or his authorized technical representative. Such property shall be subject to the provisions of the clause of the General Provisions entitled "Government Property." It is contemplated that the property to be furnished shall be substantially: STATINTL 1. Test materials as set forth in Attachment "D" to Contractor's technical proposal dated August 5, 1965. 2. That equipment as set forth under Item 2, page 3, of Attachment "E" to Contractor's technical proposal dated August 5, 1965. PART IV - INSPECTION AND ACCEPTANCE Items to be delivered hereunder shall be inspected and accepted at Contractor's plant in accordance with inspection and acceptance criteria agreed to between the Contractor and the Technical Representative(s) of the Contracting Officer. However, if the Items are shipped by other than by Government carrier, the Contractor shall be responsible for these Items until they are delivered the designated delivery point{:,' Shipping costs, if any, shall be submitted and paid under a separate voucher. PART V - PROGRESS PAYMENTS Progress payments, which are hereby defined as payments prior to acceptance on work in progress for the Government under this contract, may be made upon the following terms and conditions: Approved For Release 2001/04/20 : CIA-FDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 1. The Contracting Officer, may from time to time, authorize progress payments to the Contractor upon property acquired or produced and services performed by it for the performance of this contract: PROVIDED, that such progress payments shall not exceed 90 percent of the cost to the Con- tractor of the property and services upon which payment is made, which costs shall be determined from evidence submitted by the Contractor and which must be such as is satisfactory to the Contracting Officer as being representative of the value of the work already performed: PROVIDED FURTHER, that in no event shall the total of unliquidated progress payments (see 4 below) and of unliquidated advance payments, if any, made under this contract, exceed 80 percent of the total contract price of supplies or services still to be delivered. 2. Upon the making of any progress payments under this contract, title to all parts, materials, inventories, work in process and nondurable tools theretofore acquired or produced by the Contractor for the performance of this contract, and properly chargeable thereto under sound accounting practice, shall forthwith vest in the Government; and title to all like property thereafter acquired or produced by the Contractor for the performance of this contract and properly chargeable thereto as aforesaid shall vest in the Government forthwith upon said acquisition or production: PROVIDED, that nothing herein shall deprive the Contractor of any further progress of final payments due or to become due hereunder; or relieve the Contractor or the Government of any of their respective rights or obligations under this contract. 3. The Contractor represents and warrants that the property upon which any progress payment is made hereunder, shall be cleared of all liens and encumbrances of any kind whatsoever upon receipt of any progress payments. 4. In making payment for the supplies furnished hereunder, there shall be deducted from the contract price therefor a pro- portionate amount of the progress payments theretofore made to the Contractor, under the authority herein contained. 5. It is recognized that property (including, without limitation completed supplies, spare parts, drawings, infor- mation, partially completed supplies, work in process, materials, fabricated parts, and other things called for herein) title to which is or may hereafter become vested in the Government pur- suant to this clause will from time to time be used by or out in the care, custody or possession of the Contractor in connection with the performance of this contract. The Contractor, either before or after receipt of Notice of Termination at the option of the Government, may acquire or dispose of property to which Approved For Release 2001/04/20 : CIA-RbW68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 title is vested in the Government under this clause, upon terms approved by the Contracting Officer; PROVIDED, that after receipt of Notice of Termination any such property that is a part of termination inventory may be acquired or disposed of only in accordance with the provisions of the termination clause of this contract and applicable laws and regulations. The agreed price (in case of acquisition by the Contractor) or the pro- ceeds received by the Contractor (in case of any other disposi- tion), shall, to the extent that such price and proceeds do not exceed the unliquidated balance of progress payments hereunder, be paid or credited to the Government as the Contracting Officer shall direct; and such unliquidated balance shall be reduced accordingly. Current production scrap may be sold by the Con- tractor without approval of the Contracting Officer but the proceeds will be applied as provided in this paragraph (5), provided that any such scrap which is a part of termination inventory may be sold only in accordance with the provisions of the termination clause of this contract and applicable laws and regulations. Upon liquidation of all progress payments hereunder or upon completion of deliveries called for by this contract, title to all property (or the proceeds thereof) which had not been delivered to and accepted by the Government under this contract or which has not been incorporated in supplies delivered to and accepted by the Government under this contract and to which title has vested in the Government under this clause shall vest in the Contractor. 6. The provisions of this contract referring to "Liability for Government-furnished Property" and any other provisions of this contract defining liability for Government-furnished property shall be inapplicable to property to which the Govern- ment shall have acquired title solely by virtue of the provisions of this clause. The provisions of this clause shall not relieve the Contractor from risk of loss or destruction of or damage to property to which title vests in the Government under the provisions hereof. 7. If this contract (as heretofore or hereafter supplemented or amended) contains provisions for Advance Payments, and in addition if at the time any progress payment is to be made to the Contractor under the provisions of this progress payments clause any unliquidated balance of advance payments is outstanding, then notwithstanding any other provision of the Advance Payments Clause of this contract the net amount, after appropriate deduction for liquidation of the advance payment of such progress payment shall be deposited in the special bank account or accounts maintained as required by the provisions of the Advance Payments Clause, and shall thereafter be withdrawn only pursuant to such provisions. Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 his contract there has been allotted which, in accordance with Clause 7 of e General rovislons, the Government will pay the Contractor upon his satisfactory performance and delivery of the Items called for in PART I of this Schedule. The Contractor shall submit evidence of completion and acceptance with the final invoice in order that final payment may be made. 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 whatsoever with respect to the department of the Government sponsoring this contract and the work there- under except as the Contractor is authorized or directed in writing to reveal such information by the Contracting Officer or by his duly authorized representative for security matters, and notwithstanding any clause or section of this contract to the contrary, the Contractor shall not interpret any clause or section of this contract as requiring or permitting divulgence 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 rep- resentative for security matters. PART VIII - WAIVER OF REQUIREMENTS OF GENERAL PROVISIONS Notwithstanding the requirements of any of the General Provisions of this contract to the contrary, whensoever, the Contractor, in performance of the work under this contract, shall find the requirements of any of the clauses of the General Provisions are in conflict with security instructions issued to the Contractor by the Contracting Officer or by his authorized representative for security matters, the Contractor shall call the attention of the. Contracting Officer to such conflict and the Contracting Officer or his duly authorized representative for security matters shall (i) modify or rescind such security requirements or (ii) the Contracting Officer shall issue to the Contractor a waiver of compliance with the requirements of the General Provisions conflicting with such security requirements. Any waiver of compliance with the General Provisions of this contract issued by the Contracting Officer shall be in writing, except that the approval by the Contracting Officer of any subcontract issued hereunder by the Contractor shall be deemed to constitute approval of waiver of any clause of the. General Provisions in conflict with the stipulations of such subcontract. Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 PART IX - LETTER CONTRACT SUPERSEDED ` This is d by Letter Contract No. DG-456, AF33(657)-15227, dated-l-& August 1965, between the parties hereto, and supersedes said Letter Contract in its entirety. Work performed and payments made under the Letter Contract shall be deemed to be work performed and payments made under this Definitive Contract. PART X - ALTERATIONS IN SCHEDULE The following alterations were made in this Schedule prior to execution of this contract: Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 CIA-RDP68B00307R000100190014-9 1 Definitions . . . . . . . . . . . . . . . . . . . . . 1 2 Changes . . . . . . . . . . . . . . . . . . . . . . 1 3 Extras . . . . . . . . . . . . . . . . . . . . . . . 1 4 Variation in Quantity . . . . . . . . . . . . . . . . . 1 5 Inspection . . . . . . . . . . . . . . . . . . . . . 1 6 Responsibilty for Supplies . . . . . . . . . . . . . . . 2 7 Payments . . . . . . . . . . . . . . . . . . . . . . 2 8 Assignment of Claims . . . . . . . . . . . . . . . . . 2 9 Additional Bond Security . . . . . . . . . . . . . . . . 3 10 Federal, State, and Local Taxes . . . . . . . . . . . . . 3 11 Default . . . . . . . . . . . . . . . . . . . . . . . 4 12 Disputes . . . . . . . . . . . . . . . . . . . . . . 5 13 Soviet Controlled Areas . . . . . . . . . . . . . . 5 14 Work Hours Act of 1962-Overtime Compensation . . . . . . 5 15 Walsh-Healey Public Contracts Act . . . . . . . . . . . 5 16 Nondiscrimination in Employment . . . . . . . . . . . . 6 17 Officials Not To Benefit . . . . . . . . . . . . . . . . 6 18 Covenant Against Contingent Fees . . . . . . . . . . . . 6 19 Termination for Convenience of the Government . . . . . . . 7 20 Authorization and Consent . . . . . . . . . . . . . . . 9 21 Notice and Assistance Regarding Patent and Copyright In- fringement . . . . . . . . . . . . . . . . . . . . 9 22 Buy American Act . . . . . . . . . . . . . . . . . . 10 23 Filing of Patent Applications . . . . . . . . . . . . . . 10 24 Patent Rights (License) . . . . . . . . . . . . . . . . 10 25 Data . . . . . . . . . . . . . . . . . . . . . . . 13 26 Data-Withholding of Payment . . . . . . . . . . . . . 13 27 Military Security Requirements . . . . . . . . . . . . . 14 28 Utilization of Small Business Concerns . . . . . . . . . . 14 29 Examination of Records . . . . . . . . . . . . . . . . 14 30 Gratuities . . . . . . . . . . . . . . . . . . . . . 14 31 Convict Labor . . . . . . . . . . . . . . . . . . . . 15 32 Material Inspection and Receiving Report . . . . . . . . . 15 33 Subcontracts (Sources) . . . . . . . . . . . . . . . . 15 34 Subcontracts . . . . . . . . . . . . . . . . . . . . 15 35 Subcontractor Cost and Pricing Data . . . . . . . . . . . 16 36 Subcontractor Cost and Pricing Data-Price Adjustments . . . 16 37 Competition in Subcontracting . . . . . . . . . . . . . 17 38 Utilization of Concerns in Labor Surplus Areas . . . . . . . 17 39 Standards of Work . . . . . . . . . . . . . . . . . . 17 40 Ground and Flight Risk . . . . . . . . . . . . . . . . 17 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 - INDEX (Continued) Clause No. Page No. 41 Government-Furnished Property . . . . . . . . . . . . . 20 42 Interest . . . . . . . . . . . . . . . . . . . . . . 22 43 Audit and Records . . . . . . . . . . . . . . . . . 22 44 Price Reduction for Defective Cost or Pricing Data . . . . . . 24 45 Price Reduction for Defective Cost or Pricing Data-Price Ad- j ustments . . . . . . . . . . . . . . . . . . . . . 24 46 Audit-Price Adjustments . . . . . . . . . . . . . . . 24 47 Inspection and Audit . . . . . . . . . . . . . . . . . 25 48 Alterations in Contract . . . . . . . . . . . . . . . 25 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 1. DEFINITIONS (ASPR 7-103.1) (Feb. 1962) As used throughout this contract, the following terms shall have the meanings set forth below: (a) The term "head of the agency" or "Secre- tary" means the Secretary, the Under Secretary, any Assistant Secretary, or any other head or as- sistant head of the executive or military department or other Federal agency; and the term "his duly authorized representative" means any person or persons or board (other than the Contracting Offi- cer) authorized to act for the head of the agency or the Secretary. (b) The term "Contracting Officer" means the person executing this contract on behalf of the Government, and any other officer or civilian em- ployee who is a properly designated Contracting Officer; and the term includes, except as otherwise provided in this contract, the authorized repre- sentative of a Contracting Officer acting within the limits of his authority. (c) Except as otherwise provided in this con- tract, the term "subcontracts" includes purchase orders under this contract. 2. CHANGES (ASPR 7-103.2) (Jan. 1958) The Contracting Officer may at any time, by a written order, and without notice to the sureties, make changes, within the general scope of this contract, in any one or more of the following: (i) Drawings, designs, or specifications, where the sup- plies to be furnished are to be specially manufac- tured for the Government in accordance therewith; (ii) method of shipment or packing; and (iii) place of delivery. If any such change causes an increase or decrease in the cost of, or the time required for the performance of any part of the work under this contract, whether changed or not changed by any such order, an equitable adjustmnt shall be made in the contract price or delivery schedule, or both, and the contract shall be modified in writing accordingly. Any claim by the Contractor for ad- justment under this clause must be asserted within 30 days from the date of receipt by the Contractor of the notification of change: Provided, however, That the Contracting Officer, if he decides that the facts justify such action, may receive and act upon any such claim asserted at any time prior to final payment under this contract. Where the cost of property made obsolete or excess as a result of a change is included in the Contractor's claim for adjustment, the Contracting Officer shall have the right to prescribe the manner of disposition of such property. Failure to agree to any adjustment shall be a dispute concerning a question of fact within the meaning of the clause of this contract entitled "Disputes." However, nothing in this clause shall FP or PR 1 Feb. 63 excuse the Contractor from proceeding with the contract as changed. [Rev. No. 28, 1/28/58; Rev. No. 30, 3/17/58.] 3. EXTRAS (ASPR 7-103.3) (July 1949) Except as otherwise provided in this contract, no payment for extras shall be made unless such extras and the price therefor have been authorized in writing by the Contracting Officer. 4. VARIATION IN QUANTITY (ASPR 7-103.4) (July 1949) No variation in the quantity of any item called for by this contract will be accepted unless such variation has been caused by conditions of loading, shipping, or packing, or allowances in manufactur- ing processes, and then only to the extent, if any, specified elsewhere in this contract. 5. INSPECTION (ASPR 7-103.5) (May 1958) (a) All supplies (which term throughout this clause includes without limitation raw materials, components, intermediate assemblies, and end prod- ucts) shall be subject to inspection and test by the Government, to the extent practicable at all times and places including the period of manufacture, and in any event prior to acceptance. [Rev. No. 33, 5/14/58.] (b) In case any supplies or lots of supplies are defective in material or workmanship or otherwise not in conformity with the requirements of this contract, the Government shall have the right either to reject them (with or without instructions as to their disposition) or to require their correc- tion. Supplies or lots of supplies which have been rejected or required to be corrected shall be removed or, if permitted or required by the Contracting Offi- cer, corrected in place by and at the expense of the Contractor promptly after notice, and shall not thereafter be tendered for acceptance unless the former rejection or requirement of correction is disclosed. If the Contractor fails promptly to re- move such supplies or lots of supplies which are required to be removed, or promptly to replace or correct such supplies or lots of supplies, the Gov- ernment either (f) may by contract or otherwise replace or correct such supplies and charge to the Contractor the cost occasioned the Government thereby, or (ii) may terminate this contract for default as provided in the clause of this contract entitled "Default." Unless the Contractor corrects or replaces such supplies within the delivery sched- ule, the Contracting Officer may require the delivery of such supplies at a reduction in price which is equitable under the circumstances. Failure to agree to such reduction of price shall be a dispute con- Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 cerning a question of fact within the meaning of the clause of this contract entitled "Disputes" [Rev. No. 28, 1/28/58.) (c) If any inspection or test is made by the Gov- ernment on the premises of the Contractor or a subcontractor, the Contractor without additional charge shall provide all reasonable facilities and assistance for the safety and convenience of the Government inspectors in the performance of their duties. If Government Inspection or test is made at a point other than the premises of the Con- tractor or a subcontractor, It shall be at the ex- pense of the Government except as otherwise pro- vided in this contract: Provided, That In case of rejection the Government shall not be liable for any reduction in value of samples used in connec- tion with such inspection or test. All inspections and tests by the Government shall be performed in such a manner as not to unduly delay the work. The Government reserves the right to charge to the Contractor any additional cost of Government in- spection and test when supplies are not ready at the time such inspection and test is requested by the Contractor or when reinspection or retest is necessitated by prior rejection. Acceptance or re- jection of the supplies shall be made as promptly as practicable after delivery, except as otherwise provided in this contract; but failure to inspect and accept or reject supplies shall neither relieve the Contractor from responsibility for such supplies as are not in accordance with the contract require- ments nor impose liability on the Government therefor. [Rev. No. 28, 1/28/58.) (d) The inspection and test by the Government of any supplies or lots thereof does not relieve the Contractor from any responsibillity regarding de- fects or other failures to meet the contract require- ments which may be discovered prior to acceptance. Except as otherwise provided in this contract, ac- ceptance shall be conclusive except as regards latent defects, fraud, or such gross mistakes as amount to fraud. (e) The Contractor shall provide and maintain an inspection system acceptable to the Government covering the supplies hereunder. Records of all In- spection work by the Contractor shall be kept com- plete and available to the Government during the performance of this contract and for such longer period as may be specified elsewhere In this con- tract. 6. RESPONSIBILTY FOR SUPPLIES (ASPR 7-103.6) (Jan. 1958) Except as otherwise provided In this contract, (1) the Contractor shall be responsible for the supplies covered by this contract until they are delivered at the designated delivery point, regardless of the point of inspection; (Ii) after delivery to the Gov- ernment at the designed point and prior to accept- ance by the Government or rejection and giving notice thereof by the Government, the Government shall be responsible for the loss or destruction of or damage to the supplies only if such loss, destruc- tion, or damage results from the negligence of officers, agents, or employees of the Government acting within the scope of their employment; and (iii) the Contractor shall bear all risks as to re- jected supplies after notice of rejection, except that the Government shall be responsible for the loss, or destruction of, or damage to the supplies only if such loss, destruction or damage results from the gross negligence of officers, agents, or employees of the Government acting within the scope of their employment. [Rev. No. 28, 1/28/58.1 7. PAYMENTS (ASPR 7-103.7) (Jan. 1958) The Contractor shall be paid, upon the submis- sion of proper invoices or vouchers, the prices stipu- lated herein for supplies delivered and accepted, less deductions, if any, as herein provided. Unless otherwise specified, payment will be made on partial deliveries accepted by the Government when the amount due on such deliveries so warrants; or, when requested by the Contractor, payment for accepted partial deliveries shall be made whenever such pay- ment would equal or exceed either $1,000 or 50 per- cent of the total amount of this contract. [Rev. No. 30, 3/17/58.) 8. ASSIGNMENT OF CLAIMS (ASPR 7-103.8 mod.) (Feb. 1962) (a) Pursuant to the provisions of the Assignment of Claims Act of 1940, as amended (31 U. S. Code 203, 41 U. S. Code 15) If this contract provides for payments aggregating $1,000 or more, claims for monies due or to become due the Contractor from the Government under this contract may be as- signed 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 assign- ment or reassignment shall cover all amounts pay- able under this contract and not already paid, and shall not be made to more than one party, except that any such assignment or reassignment may be made to one party as agent or trustee for two or more parties participating In such financing. Unless otherwise provided In this contract, pay- ments to an assignee of any monies due or to be- come due under this contract shall not, to the extent provided In said Act, as amended, be subject to reduction or setoff. (b) In no event shall copies of this contract or of any plans, specifications, or other similar docu- ments relating to work under this contract, if marked "Top Secret," "Secret," or "Confidential," be furnished to any assignee of any claim arising under this contract or to any other person not entitled to receive the same: however a copy of any part or all of this contract so marked may be fur- nished, or any information contained therein may FP or PR 1 Feb. 63 2 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 be disclosed, to such assignee upon the prior written authorization of the Contracting Officer.[Rev. No. 28, 1/28/58.] (c) The Contractor shall obtain the written au- thorization of the Contracting Officer prior to the assignment of any rights under this contract. 9. ADDITIONAL BOND SECURITY (ASPR 7-103.9) (July 1949) If any surety upon any bond furnished in con- nection with this contract becomes unacceptable to the Government, or if any such surety fails to fur- nish reports as to his financial condition from time to time as requested by the Government, the Con- tractor shall promptly furnish such additional secu- rity as may be required from time to time to pro- tect the interests of the Government and of persons supplying labor or materials in the prosecution of the work contemplated by this contract. 10. FEDERAL, STATE, AND LOCAL TAXES (ASPR 11-401-2) (July 1960) (a) As used throughout this clause, the term "contract date" means the date of this contract. As to additional supplies or services procured by modification to this contract, the term "contract date" means the date of such modification. (b) Except as may be otherwise provided in this contract, the contract price includes, to the extent allocable to this contract, all Federal, State, and local taxes which, on the contract date: (1) by Constitution, statute, or ordinance, are ap- plicable to this contract, or to the transactions covered by this contract or to property or interests in property, or (ii) pursuant to written ruling or regulation, the authority charged with administering any such tax is assessing or applying to, and is not granting or honoring an exemption for, a contractor under this kind of contract, or the transactions covered by this contract, or property or interests in property. (c) Except as may be otherwise provided in this contract, duties in effect on the contract date are included in the contract price to the extent allo- cable to this contract. [Rev. No. 1, 7/22/60.1 (d) (1) If the contractor is required to pay or bear the burden- (s) of any tax or duty which either was not to be included in the contract price pursuant to the requirements of paragraphs (b) and (c), or of a tax or duty specifically excluded from the contract price by a provision of this contract; or (ii) of an increase in rate of any tax or duty, whether or not such tax or duty was excluded from the contract price; or (iii) of any interest or penalty on any tax or duty referred to in (i) or (ii) above; the contract price shall be increased by the amount of such tax, duty, interest, or penalty allocable to this contract; pro- vided, that the Contractor warrants in writing that no amount of such tax, duty, or rate increase was included in the contract price as a contingency reserve or otherwise; and provided further, that liability for such tax, duty, rate increase, interest, or penalty was not incurred through the fault or negligence of the Contractor or his failure to fol- low instructions of the Contracting Officer. [Rev. No. 1, 7/22/60.] (2) If the Contractor is not required to pay or bear the burden, or obtains a refund or drawback, in whole or in part, of any tax, duty, interest, or penalty which: (1) was to be included in the contract price pur- suant to the requirements of paragraphs (b) and (ii) was included in the contract price; or (iii) was the basis of an increase in the contract price; the contract price shall be decreased by the amount of such relief, refund, or drawback allocable to this contract, or the allocable amount of such relief, refund, or drawback shall be paid to the Government, as directed by the Contracting Offi- cer. The contract price also shall be similarly de- creased if the Contractor, through his fault or neg- ligence or his failure to follow instructions of the Contracting Officer, is required to pay or bear the burden, does not obtain a refund or drawback of any such tax, duty, interest, or penalty. Interest paid or credited to the Contractor incident to a refund of taxes shall inure to the benefit of the Government to the extent that such interest was earned after the Contractor was paid or reimbursed by the Government for such taxes. (3) Invoices or vouchers covering any adjustment of the contract price pursuant to this paragraph (d) shall set forth the amount thereof as a separate item and shall identify the particular tax or duty involved. (4) This paragraph (d) shall not be applicable to social security taxes; income and franchise taxes, other than those levied on or measured by (i) sales or receipts from sales, or (ii) the Contractor's pos- session of, interest in, or use of property, title to which is in the Government; excess profits taxes; capital stock taxes; unemployment compensation taxes; or property taxes, other than such property taxes, allocable to this contract, as are assessed either on completed supplies covered by this con- tract, or on the Contractor's possession of, interest in, or use of property, title to which is in the Gov- ernment. (5) No adjustment of less than $100 is required to be made in the contract price pursuant to this paragraph (d). (e) Unless there does not exist any reasonable basis to sustain an exemption, the Government upon request of the Contractor, without further liability, agrees, except as otherwise provided in this contract, to furnish evidence appropriate to FP or PR 1 Feb. 63 3 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 establish exemption from any tax which the Con- tractor warrants in writing was excluded from the contract price. In addition, the Contracting Officer may furnish evidence appropriate to establish ex- emption from any tax that may, pursuant to this clause, give rise to either an increase or decrease in the contract price. Except as otherwise provided in this contract, evidence appropriate to establish exemption from duties will be furnished only at the discretion of the Contracting Officer. (f) (1) The Contractor shall promptly notify the Contracting Officer of all matters pertaining to Federal, State, and local taxes, and duties, that reasonably may be expected to result in either an increase or decrease In the contract price. (2) Whenever an increase or decrease in the con- tract price may be required under this clause, the Contractor shall take action as directed by the Contracting Officer, and the contract price shall be equitably adjusted to cover the costs of such action, including any interest, penalty, and reason- able attorneys' fees. 11. DEFAULT (ASPR 7-103.11-- ASPR 8-707) (July 1962) (a) The Government may, subject to the pro- visions of paragraph (c) below, by written notice of default to the Contractor, terminate the whole or any part of this contract In any one of the following circumstances: (1) if the Contractor fails to make delivery of the supplies or to perform the services within the time specified herein or any extension thereof; or (ii) if the Contractor fails to perform any of the other provisions of this contract, or so fails to make progress as to endanger performance of this contract in accordance with Its terms, and In either of these two circumstances does not cure such failure within a period of 10 days (or such longer period as the Contracting Officer may au- thorize in writing) after receipt of notice from the Contracting Officer specifying such failure. (b) In the event the Government terminates this contract in whole or in part as provided in para- graph (a) of this clause, the Government may pro- cure, upon such terms and in such manner as the Contracting Officer may deem appropriate, supplies or services similar to those so terminated, and the Contractor shall be liable to the Government for any excess costs for such similar supplies or serv- ices: Provided, That the Contractor shall continue the performance of this contract to the extent not terminated under the provisions of this clause. (c) Except with respect to defaults of subcon- tractors, the Contractor shall not be liable for any excess costs if the failure to perform the contract arises out of causes beyond the control and with- out the fault or negligence of the Contractor. Such causes may include, but are not restricted to, acts of God or of the public enemy, acts of the Govern- ment In either its sovereign or contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather; but in every case the failure to perform must be beyond the control and without the fault or negligence of the Contractor. If the failure to perform is caused by the default of a subcontractor, and If such default arises out of causes beyond the control of both the Contractor and subcontractor, and without the fault or negligence of either of them, the Contractor shall not be liable for any excess costs for failure to perform, unless the sup- plies or services to be furnished by the subcon- tractor were obtainable from other sources in suffi- cient time to permit the Contractor to meet the re- quired delivery schedule. (d) If this contract is terminated as provided in paragraph (a) of this clause, the Government, in addition to any other rights provided in this clause, may require the Contractor to transfer title and de- liver to the Government, in the manner and to the extent directed by the Contracting Officer, (I) any completed supplies, and (ii) such partially completed supplies and materials, parts, tools, dies, jigs, fixtures, plans, drawings, information, and contract rights (hereinafter called "manufacturing materials") as the Contractor has specifically pro- duced or specifically acquired for the performance of such part of this contract as has been termi- nated; and the Contractor shall, upon direction of the Contracting Officer, protect and preserve prop- erty in possession of the Contractor in which the Government has an interest. Payment for com- pleted supplies delivered to and accepted by the Government shall be at the contract price. Pay- ment for manufacturing materials delivered to and accepted by the Government and for the protection and preservation of property shall be in an amount agreed upon by the Contractor and the Contracting Officer; failure to agree to such amount shall be a dispute concerning a question of fact within the meaning of the clause of this contract entitled "Dis- putes." The Government may withhold from amounts otherwise due the Contractor for such completed supplies or manufacturing materials such sum as the Contracting Officer determines to be necessary to protect the Government against loss because of outstanding liens or claims of for- mer lien holders. (e) If, after notice of termination of this contract under the provisions of this clause, it Is determined for any reason that the Contractor was not in de- fault under the provisions of this clause, or that the default was excusable under the provisions of this clause, the rights and obligations of the parties shall, if the contract contains a clause providing for termination for convenience of the Government, be the same as If the notice of termination had been Issued pursuant to such clause. FP or PR 1 Feb. 83 4 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 If, after notice of termination of this contract under the provisions of this clause, it is determined for any reason that the Contractor was not in de- fault under the provisions of this clause, and if this contract does not contain a clause providing for termination for convenience of the Govern- ment, the contract shall be equitably adjusted to compensate for such termination and the contract modified accordingly; failure to agree to any such adjustment shall be a dispute concerning a ques- tion of fact within the meaning of the clause of this contract entitled "Disputes." [Rev. No. 10, 7/30/62.1 (f) The rights and remedies of the Government provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or under this contract. [Rev. No. 36, 9/5/581. 12. DISPUTES (ASPR 7-103.12) (Jan. 1958) (a) Except as otherwise provided in this contract, any dispute concerning a question of fact arising under this contract which is not disposed of by agreement shall be decided by the Contracting Offi- cer, who shall reduce his decision to writing and mail or otherwise furnish a copy thereof to the Contractor. The decision of the Contracting Offi- cer shall be final and conclusive unless, within 30 days from the date of receipt of such copy, the Contractor mails or otherwise furnishes to the Contracting Officer a written appeal addressed to the Secretary. The decision of the Secretary or his duly authorized representative for the` determina- tion of such appeals shall be final and conclusive unless determined by a court of competent juris- diction to have been fraudulent, or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad faith, or not supported by substantial evidence. In connection with any appeal proceed- ing under this clause, the Contractor shall be af- forded an opportunity to be heard and to offer evidence in support of its appeal. Pending final decision of a dispute hereunder, the Contractor shall proceed diligently with the performance of the contract and in accordance with the Contract- ing Officer's decision. (b) This "Disputes" clause does not preclude con- sideration of law questions in connection with de- cisions provided for in paragraph (a) above: Pro- vided, That nothing in this contract shall be con- strued as making final the decision of any ad- ministrative official, representative, or board on a question of law. [Rev. No. 28, 1/28/58.] contract, or transported from or through Hong Kong or Macao, without the written approval of the Contracting Officer. (b) The contractor agrees to insert the provisions of this clause including this subparagraph (b) and the Soviet-controlled areas listed in the schedule, in all subcontracts hereunder. 14. WORK HOURS ACT OF 1962-OVERTIME COMPENSATION (ASPR 12-303.1) (Oct. 1962) This contract, to the extent that it is of a char- acter specified in the Work Hours Act of 1962 (Pub- lic Law 87-581, 76 Stat. 357-360) and is not covered by the Walsh-Healey Public Contracts Act (41 U.S.C. 35-45), is subject to the following provisions and to all other provisions and exceptions of said Work Hours Act of 1962. (a) No contractor or subcontractor contracting for any part of the contract work shall require or permit any laborer or mechanic to be employed on such work in excess of eight hours in any calendar day or in excess of forty hours in any workweek un- less such laborer or mechanic receives compensation at a rate not less than one and one-half times his basic rate of pay for all hours worked in excess of eight hours in any calendar day or in excess of forty hours in such workweek, whichever is the greater number of overtime hours. (b) In the event of any violation of the pro- visions of paragraph (a), the contractor and any subcontractor responsible for such violation shall be liable to any affected employee for his unpaid wages. In addition, such contractor or subcon- tractor shall be liable to the United States for liquidated damages. Such liquidated damages shall be computed, with respect to each individual laborer or mechanic employed in violation of the provisions of paragraph (a), in the sum of $10 for each calendar day on which such employee was required or permitted to work in excess of eight hours or in excess of forty hours in a workweek without pay- ment of the required overtime wages. (c) The Contracting Officer may withhold, or cause to be withheld, from moneys payable on ac- count of work performed by the contractor or sub- contractor, the full amount of wages required by this contract and such sums as may administratively be determined to be necessary to satisfy any li- abilities of such contractor or subcontractor for liquidated damages as provided in paragraph (b). [Rev. No. 13, 12/31/62.1 15. WALSH-HEALEY PUBLIC CONTRACTS ACT (ASPR 12-605 mod.) (Jan. 1958) 13. SOVIET-CONTROLLED AREAS (ASPR 6-403) (April 1962) (a) The Contractor shall not acquire for use in the performance of this contract any supplies or services originating from sources within Soviet- controlled areas, as listed in the schedule of this FP or PR 1 Feb. 63 5 If this contract is for the manufacture or fur- nishing of materials, supplies, articles or equipment in an amount which exceeds or may exceed $10,000 and is otherwise subject to the Walsh-Healey Pub- lic Contracts Act, as amended (41 U. S. Code 35-45), there are hereby incorporated by reference all rep- Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 resentations and stipulations required by said Act and regulations issued thereunder by the Secretary of Labor, such representations and stipulations being subject to all applicable rulings and inter- pretations of the Secretary of Labor which are now or may hereafter be In effect, except that the Con- tractor shall not be required to include this clause in subcontracts issued hereunder when the inclusion of this clause in a subcontract would jeopardize or conflict with the security considerations established in connection with this contract. [Rev. No. 11, 9/30/62.1 16. NONDISCRIMINATION IN EMPLOYMENT (ASPR 12-802) (July 1962) In connection with the performance of work un- der this contract, the contractor agrees as follows: (a) The contractor will not discriminate against any employee or applicant for employment because of race, creed, color, or national origin. The Con- tractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color or national origin. Such action shall include, but not be limited to, the following: Employment, upgrading, demotion or transfer; re- cruitment or recruitment advertising; layoff or termination; rates of pay or other forms of com- pensation; and selection for training, including ap- prenticeship. The contractor agrees to post In conspicuous places, available to employees and ap- plicants for employment, notices to be provided by the contracting officer setting forth the provisions of this nondiscrimination clause. (b) The contractor will, in all solicitations or ad- vertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, creed, color, or national origin. (c) The contractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice, to be provided by the agency contracting officer, advising the said labor union or workers' representative of the contractor's commitments under this section, and shall post copies of the notice In conspicuous places available to employees and applicants for employment. (d) The contractor will comply with all provi- sions of Executive Order No. 10925 of March 6, 1961, and of the rules, regulations, and relevant orders of The President's Committee on Equal Employ- ment Opportunity in effect as of the date of this contract. (e) The contractor will furnish all Information and reports required by Executive Order No. 10925 of March 6, 1961, and by the rules, regulations, and orders of the said Committee or pursuant thereto, and will permit access to his books, records, and accounts by the contracting agency and the Com- mittee for purposes of investigation to ascertain compliance with such rules, regulations, and orders. (f) In the event of the contractor's non-com- pliance with the nondiscrimination clauses of this contract or with any of the said rules, regulations, or orders, this contract may be cancelled in whole or in part and the contractor may be declared Ineligible for further government contracts in ac- cordance with procedures authorized in Executive Order No. 10925 of March 6, 1961, and such other sanctions may be imposed and remedies invoked as provided in the said Executive Order or by rule, regulation, or order of The President's Committee on Equal Employment Opportunity, or as otherwise provided by law. (g) The contractor will include the provisions of the foregoing paragraphs (a) through (f) in every subcontract or purchase order unless exempted by rules, regulations, or orders of The President's Com- mittee on Equal Employment Opportunity Issued pursuant to Section 303 of Executive Order No. 10925 of March 6, 1961, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontractor or purchase order as the contract- ing agency may direct as a means of enforcing such provisions, including sanctions for noncompliance: Provided however that in the event the contractor becomes involved in, or Is threatened with, litiga- tion with a subcontractor or vendor as a result of such direction by the contracting agency, the con- tractor may request the United States to enter into such litigation to protect the interests of the United States. 17. OFFICIALS NOT TO BENEFIT (ASPR 7-103.19) (July 1949) No member of or delegate to Congress or resident commissioner, shall be admitted to any share or part of this contract, or to any benefit that may arise therefrom; but this provision shall not be construed to extend to this contract if made with a corporation for its general benefit. 18. COVENANT AGAINST CONTINGENT FEES (ASPR 7-103.20) (Jan. 1958) The Contractor warrants that no person or sell- ing agency has been employed or retained to solicit or secure this contract upon an agreement or under- standing for a commission, percentage, brokerage or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by the Contractor for the purpose of securing business. For breach or violation of this warranty the Government shall have the right to annul this contract without liability or in its discretion to deduct from the contract price or con- sideration, or otherwise recover, the full amount of such commission, percentage, brokerage, or con- tingent fee. FP or PR 1 Feb. 63 6 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 19. TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (ASPR 8-701) (Jan. 1961) (a) The performance of work under this con- tract may be terminated by the Government in ac- cordance with this clause in whole, or from time to time in part, whenever the Contracting Officer shall determine that such termination is in the best interests of the Government. Any such ter- mination shall be effected by delivery to the Con- tractor of a Notice of Termination specifying the extent to which performance of work under the contract is terminated, and the date upon which such termination becomes effective. (b) After receipt of a Notice of Termination, and except as otherwise directed by the Contracting Officer, the Contractor shall: (i) stop work under the contract on the date and to the extent specified in the Notice of Termi- nation; (ii) place no further orders or subcontracts 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; (iii) terminate all orders and subcontracts to the extent that they relate to the performance of work terminated by the Notice of Termination; (iv) assign to the Government, in the manner, at the times, and to the extent directed by the Contracting Officer, all of the right, title, and in- terest of the Contractor under the orders and sub- contracts so terminated, in which case the Gov- ernment shall have the right in its discretion, to settle or pay any or all claims arising out of the termination of such orders and subcontracts; (v) settle all outstanding liabilities and all claims arising out of such termination of orders and sub- contracts, with the approval or ratification of the Contracting Officer, to the extent he may require, which approval or ratification shall be final for all the purposes of this clause; (vi) transfer title and deliver to the Govern- ment, in the manner, at the times, and to the ex- tent, if any, directed by the Contracting Officer, (A) the fabricated or unfabricated parts, work in process, completed work, supplies, and other ma- terial produced as a part of, or acquired in connec- tion with the performance of, the work terminated by the Notice of Termination, and (B) the com- pleted or partially completed plans, drawings, in- formation, and other property which, if the con- tract had been completed, would have been required to be furnished to the Government; (vii) use its best efforts to sell, in the manner, at the times, to the extent, and at the price or prices directed or authorized by the Contracting Officer, any property of the types referred to in (vi) above; provided, however, that the Contractor (A) shall not be required to extend credit to any purchaser, and (B) may acquire any such property under the conditions prescribed by and at a price or prices approved by the Contracting Officer; and provided further that the proceeds 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 other- wise be credited to the price or cost of the work covered by this contract or paid in such other manner as, the Contracting Officer may direct; (viii) complete performance of such part of the work as shall not have been terminated by the Notice of Termination; and (ix) take such action as may be necessary, or as the Contracting Officer may direct, for the protec- tion and preservation of the property related to this contract which is in the possession of the Con- tractor and in which the Government has or may acquire an interest. At any time after expiration of the plant clearance period, as defined in Section VIII, Armed Services Procurement Regulation, as it may be amended from time to time, the Contractor may submit to the Contracting Officer a list, certified as to quan- tity 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 re- quest the Government to remove such items or enter into a storage agreement covering them. Not later than fifteen (15) days thereafter, the Gov- ernment 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 sub- ject 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 sub- mission 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 Notice of Termination, the Contractor shall submit to the Contracting Officer its termination claim, in the form and with certi- fication prescribed by the Contracting Officer. Such claim shall be submitted promptly but in no event later than one year from the effective date of ter- mination, unless one or more extensions in writing are granted by the Contracting Officer, upon re- quest of the Contractor made in writing within such one 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 anytime after such one year period or any extension thereof. Upon failure of the Contractor to submit its ter- mination claim within the time allowed, the Con- tracting Officer may, subject to any Settlement Review Board approvals required by Section VIII of the Armed Services Procurement Regulation in effect as of the date of execution of this contract, determine, on the basis of information available to FP or PR 1 Feb. 63 7 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 him, the amount, if any, due to the Contractor by reason of the termination and shall thereupon pay to the Contractor the amount so determined. (d) Subject to the provisions of paragraph (c), and subject to any Settlement Review Board ap- provals required by Section VIII of the Armed Serv- ices Procurement Regulation in effect as of the date of execution of this contract, the Contractor and the Contracting Officer may agree upon the whole or any part of the amount or amounts to be paid to the Contractor by reason of the total or partial termination of work pursuant to this clause, which amount or amounts may include a reasonable al- lowance for profit on work done; provided that such agreed amount or amounts, exclusive of settlement costs, shall not exceed the total contract price as reduced by the amount of payments otherwise made and as further reduced by the contract price of work not terminated. The contract shall be amended accordingly, and the Contractor shall be paid the agreed amount. Nothing In paragraph (e) of this clause, prescribing the amount to be paid to the Contractor in the event of failure of the Con- tractor and the Contracting Officer to agree upon the whole amount to be paid to the Contractor by reason of the termination of work pursuant to this clause, shall be deemed to limit, restrict, or other- wise determine or affect the amount or amounts which may be agreed upon to be paid to the Con- tractor pursuant to this paragraph W. (e) In the event of the failure of the Contractor and the Contracting Officer to agree as provided in paragraph (d) upon the whole amount to be paid to the Contractor by reason of the termination of work pursuant to this clause, the Contracting Officer shall, subject to any Settlement Review Board ap- provals required by Section VIII of the Armed Serv- ices Procurement Regulation in effect as of the date of execution of this contract, determine, on the basis of information available to him, the amount, if any, due to the Contractor by reason of the ter- mination and shall pay to the Contractor the amounts determined as follows: (1) for completed supplies accepted by the Gov- ernment (or sold or acquired as provided in para- graph (b) (vii) above) and not theretofore paid for, a sum equivalent to the aggregate price for such supplies computed in accordance with the price or prices specified in the contract, appro- priately adjusted for any saving of freight or other charges; (ii) the total of - (A) the costs Incurred In the performance of the work terminated, including initial costs and pre- paratory expense allocable thereto, but exclusive of any costs attributable to supplies paid or to be paid for under paragraph (e) (1) hereof; (B) the cost of settling and paying claims arising out of the termination of work under subcontracts or orders, as provided In paragraph (b) (v) above, which are properly chargeable to the terminated portion of the contract (exclusive of amounts paid or payable on account of supplies or materials delivered or services furnished by subcontractors or vendors prior to the effective date of the Notice of Termination, which amounts shall be included in the costs payable under (A) above; and (C) a sum, as a profit, equal to 2 percent of that part of the amount determined under (A) above which represents the cost of articles and materials not processed by the Contractor, plus a sum equal to 8 percent of the remainder of such amount, but the aggregate of such sums shall not exceed 6 per- cent of the whole of the amount determined under (A) above; provided, however, that if it appears that the Contractor would have sustained a loss on the entire contract had It been completed, no profit shall be Included or allowed under this sub- division (C) and an appropriate adjustment shall be made reducing the amount of the settlement to reflect the Indicated rate of loss; and (lit) the reasonable costs of settlement, including accounting, legal, clerical, and other expenses rea- sonably necessary for the preparation of settlement claims and supporting data with respect to the ter- minated portion of the contract and for the ter- mination and settlement of subcontracts there- under, together with reasonable storage, transporta- tion, and other costs Incurred in connection with the protection or disposition of property allocable to this contract. The total sum to be paid to the Con- tractor under (1) and (ii) of this paragraph (e) shall not exceed the total contract price as reduced by the amount of payments otherwise made and as further reduced by the contract price of work not terminated. Except for normal spoilage, and ex- cept to the extent that the Government shall have otherwise expressly assumed the risk of loss, there shall be excluded from the amounts payable to the Contractor as provided In (e) (1) and (ii) (A) above, the fair value, as determined by the Contracting Officer, of property which Is destroyed, lost, stolen, or damaged so as to become undeliverable to the Government, or to a buyer pursuant to paragraph (b) (vii) . (f) Any determination of costs under paragraph (c) or (e) hereof shall be governed by the principles for consideration of costs set forth in Section XV, Part 2, of the Armed Services Procurement Regula- tion, as in effect on the date of this contract. (g) The Contractor shall have the right of ap- peal, under the clause of this contract entitled "Disputes," from any determination made by the Contracting Officer under paragraphs (c) or (e) above, except that If the Contractor has failed to submit his claim within the time provided in para- graph (c) above and has jailed to request extension of such time, he shall have no such right of appeal. In any case where the Contracting Officer has made a determination of the amount due under para- FP or PR 2 Feb. 63 8 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 graph (c) or (e) above, the Government shall pay to the Contractor the following: (1) if there is no right of appeal hereunder or if no timely appeal has been taken, the amount so determined by the Con- tracting Officer, or (ii) if an appeal has been taken, the amount finally determined on such appeal. (h) In arriving at the amount due the Contrac- tor under this clause there shall be deducted (i) all unliquidated advance or other payments on ac- count theretofore made to the Contractor, applicable to the terminated portion of this contract, (ii) any claim which the Government may have against the Contractor in connection with this contract, and (iii) the agreed price for, or the proceeds of sale of, any materials, supplies, or other things ac- quired by the Contractor or sold, pursuant to the provisions of this clause, and not otherwise re- covered by or credited to the Government. (i) If the termination hereunder be partial, prior to the settlement of the terminated portion of this contract, the Contractor may file with the Con- tracting Officer a request in writing for an equitable adjustment of the price or prices specified in the contract relating to the continued portion of the contract (the portion not terminated by the Notice of Termination), and such equitable adjustment as may be agreed upon shall be made in such price or prices. (j) The Government may from time to time, under such terms and conditions as it may pre- scribe, make partial payments and payments on ac- count against costs incurred by the Contractor in connection with the terminated portion of this con- tract 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 agreed or deter- mined to be due under this clause, such excess shall be payable by the Contractor to the Govern- ment upon demand, together with interest com- puted at the rate of 6 percent per annum, for the period from the date such excess payment is re- ceived by the Contractor to the date on which such excess is repaid to the Government; provided, how- ever, that no interest shall be charged with respect to any such excess payment attributable to a re- duction in the Contractor's claim by reason of re- tention or other disposition of termination inven- tory until ten days after the date of such retention or disposition, or such later date as determined by the Contracting Officer by reason of the circum- stances. (k) Unless otherwise provided for in this con- tract, or by applicable statute, the Contractor, from the effective date of termination and for a period of three years after final settlement under this con- tract, shall preserve and make available to the Gov- ernment at all reasonable times at the Office of the Contractor but without direct charge to the Gov- ernment, all his books, records, documents, and other evidence bearing on the costs and expenses of the Contractor under this contract and relating to the work terminated hereunder, or, to the ex- tent approved by the Contracting Officer, photo- graphs, microphotographs, or other authentic re- productions thereof. [Rev. No. 49, 10/1/59.1 20. AUTHORIZATION AND CONSENT (ASPR 9-102.1) (Jan. 1961) The Government hereby gives its authorization and consent (without prejudice to its rights of indemnification, if such rights are provided for in this contract) for all use and manufacture, in the performance of this contract or any part hereof or any amendment hereto or any subcontract here- under (including any lower-tier subcontract), of any invention described in and covered by a patent of the United States (i) embodied in the structure or composition of any article the delivery of which is accepted by the Government under this contract, or (ii) utilized in the machinery, tools, or methods the use of which necessarily results from compliance by the Contractor or the using subcontractor with (a) specifications or written provisions now or here- after forming a part of this contract, or (b) specific written instructions given by the Contracting Officer directing the manner of performance. The Con- tractor's entire liability to the Government for in- fringement of a patent of the United States shall be determined solely by the provisions of the in- demnity clause if any, included in the contract and the Government assumes liability for all other in- fringement to the extent of the authorization and consent hereinabove granted. [Rev. No. 28, 1/28/58; Rev. No. 3, 1/31/61.] 21. NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT INFRINGEMENT (ASPR 9-104) (Feb. 1962) The provisions of this clause shall be applicable only if the amount of this contract exceeds $10,000. (a) The Contractor shall report to the Contract- ing Officer, promptly and in reasonable written de- tail, each notice or claim of patent infringement based on the performance of this contract of which the Contractor has knowledge. (b) In the event of any suit against the Govern- ment, or any claim against the Government made before suit has been instituted, on account of any alleged patent or copyright infringement arising out of the performance of this contract or out of the use of any supplies furnished or work or serv- ices performed hereunder, the Contractor shall fur- nish to the Government, upon request, all evidence and information in possession of the Contractor pertaining to such suit or claim. Such evidence and information shall be furnished at the expense of the Government except in those cases in which FP or PR 1 Feb. 63 9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 the Contractor has agreed to indemnify the Gov- ernment against the claim being asserted. [Rev. No. 35, 7/15/58; Rev. No. 7, 2/15/82.1 22. BUY AMERICAN ACT (ASPR 6-101.5) (July 1960) (a) In acquiring end products, the Buy American Act (41 U. S. Code 10 a-d) provides that the Gov- ernment give preference to domestic source end products. For the purpose of this clause: (1) "components" means those articles, materials, and supplies, which are directly incorporated in the end products; (U) "end products" means those articles, ma- terials, and supplies, which are to be acquired under this contract for public use; and (ill) a "domestic source end product" means (A) an unmanufactured end product which has been mined or produced in the United States and (B) an end product manufactured in the United States if the cost of the components thereof which are mined, produced, or manufactured in the United States or Canada exceeds 50 percent of the cost of all its components. For the purposes of this (a) (iii) (B), components of foreign origin of the same type or kind as the products referred to in (b) (11) or (iii) of this clause shall be treated as components mined, produced, or manufactured in the United States. (b) The Contractor agrees that there will be de- livered under this contract only domestic source end products, except end products: (f) which are for use outside the United States; (ii) which the Government determines are not mined, produced, or manufactured in the United States in sufficient and reasonably available com- mercial quantities and of a satisfactory quality; (iii) as to which the Secretary determines the domestic preference to be inconsistent with the public interest; or (iv) as to which the Secretary determines the cost to the Government to be unreasonable. 23. FILING OF PATENT APPLICATIONS (ASPR 9-106) (Jan. 1955) (a) Before filing or causing to be filed a patent application disclosing any subject matter of this contract, which subject matter is classified "Secret" or higher, the Contractor shall, citing the thirty (30) day provision -below, transmit the proposed application to the Contracting Officer for determi- nation whether, for reasons of national security, such application should be placed under an order of secrecy or sealed In accordance with the pro- visions of 35 U. S. Code 181-188 or the issuance of a patent should be otherwise delayed under perti- nent statutes or regulations; and the Contractor shall observe any instructions of the Contracting Officer with respect to the manner of delivery of the patent application to the U. S. Patent Office for filing, but the Contractor shall not be denied the right to file such patent application. If the Contracting Officer shall not have given any such instructions within thirty (30) days from the date of mailing or other transmittal of the proposed ap- plication, the Contractor may file the application. (b) The Contractor shall furnish to the Contract- ing Officer, at the time of or prior to the time when the Contractor files or causes to be filed a patent application disclosing any subject matter of this contract, which subject matter Is classified "Confi- dential," a copy of such application for determina- tion whether, for reasons of national security, such application should be placed under an order of se- crecy or the issuance of a patent should be other- wise delayed under pertinent statutes or regulations. (c) In filing any patent application coming within the scope of this clause, the Contractor shall ob- serve all applicable security regulations covering the transmission of classified subject matter. 24. PATENT RIGHTS (LICENSE) (ASPR 9-107.2 7-204,7) (April 1962) a) As used in this clause, the following terms shall have the meanings set forth below: 11) The term "Subject Invention" means any in- vention, improvement, or discovery (whether or not patentable) conceived or first actually reduced to practice either (A) in the performance of the experimental, de- velopmental, or research work called for or re- quired under this contract: or 4B) in the performance of any experimental, de- velopmental, or research work relating to the sub- ject matter of this contract which was done upon an understanding in writing that a contract would be awarded; provided that the term "Subject In- vention" shall not include any invention which is specifically identified and listed in the Schedule for the purpose of excluding it from the license granted by this clause. (Rev. No. 28, 1/28/58.1 (il) The term "Technical Personnel" means any person employed by or working under contract with the Contractor (other than a subcontractor whose responsibilities with respect to rights accruing to the Government in inventions arising under sub- contracts are set forth In (g) and (h), below), who, by reason of the nature of his duties In connection with the performance of this contract, would rea- sonably be expected to make inventions. [Rev. No. 28, 1/28/58.1 (iii) The terms "subcontract" and "subcontrac- tor" mean any subcontract or subcontractor of the Contractor, and any lower-tier subcontract or sub- contractor under this contract. [Rev. No. 10, 7/30/62.1 (b) (1) The Contractor agrees to and does hereby grant to the Government an irrevocable, nonexclu- sive, nontransferable, and royalty-free license to practice, and cause to be practiced by or for the FP or PR 1 Feb. 63 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved United States Government throughout the world, each Subject Invention in the manufacture, use and disposition according to law, of any article or ma- terial, and in the use of any method. Such license (1) shall be non-transferable except that the Gov- ernment shall have the right to grant sub-licenses to any foreign government or international organ- ization specifically for use in programs established by international agreements for research develop- ments or production of weapons or equipment for mutual defense and (ii) shall include the practice of Subject Invention in the manufacture, use, and disposition of any articles or material, in the use of any method, or in the performance of any service acquired by or for the Government or with funds derived through the Military Assistance Program of the Government or otherwise through the Government. [Rev. No. 9, 4/15/62.1 (2) With respect to: (I) any Subject Invention made by other than Technical Personnel; (ii) any Subject Invention conceived prior to, but first actually reduced to practice in the course of, any of the experimental, developmental, or research work specified in (a) (i) above; and (iii) the practice of any Subject Invention in for- eign countries; the obligation of the Contractor to grant a license as provided in (b) (1) above, to con- vey title as provided in (d) (li) (B) or (d) (iv) below, and to convey foreign rights as provided in (e) below, shall be limited to the extent of the Con- tractor's right to grant the same without incurring any obligation to pay royalties or other compen- sation to others solely on account of said grant. Nothing contained in this Patent Rights clause shall be deemed to grant any license under any invention other than a Subject Invention. (c) The Contractor shall furnish to the Contract- ing Officer the following information and reports concerning Subject Inventions which reasonably ap- pear to be patentable: (i) a written disclosure promptly after concep- tion or first actual reduction to practice of each such Invention together with a written statement specifying whether or not a United States patent application claiming the Invention has been or will be filed by or on behalf of the Contractor; (ii) interim reports, at least every twelve months, commencing with the date of this contract, each listing all such Inventions conceived or first ac- tually reduced to practice more than three months prior to the date of the report, and not listed on a prior interim report, or certifying that there are no such unreported inventions; and (iii) prior to final settlement of this contract, a final report listing all such Inventions including all those previously listed in interim reports. (d) In connection with each Subject Invention referred to in (c) (I) above, the Contractor shall do the following: FP or PR 1 Feb. 63 11 (i) if the Contractor specifies that a United States patent application claiming such Invention will be filed, the Contractor shall file or cause to be filed such application in due form and time; however, if the Contractor, after having specified that such an application would be filed, decides not to file or cause to be filed said application, the Con- tractor shall so notify the Contracting Officer at the earliest practicable date and in any event not later than eight months after first publication, public use or sale. (ii) if the Contractor specifies that a United States patent application claiming such Invention has not been filed and will not be filed (or having specified that such an application will be filed there- after notifies the Contracting Officer to the con- trary), the Contractor shall: (A) inform the Contracting Officer in writing at the earliest practicable date of any publication of such Invention made by or known to the Contractor or, where applicable, of any contemplated publica- tion by the Contractor, stating the date and iden- tity of such publication or contemplated publica- tion; and (B) convey to the Government the Contractor's entire right, title, and interest in such Invention by delivering to the Contracting Officer upon writ- ten request such duly executed instruments (pre- pared by the Government) of assignment and ap- plication, and such other papers as are deemed necessary to vest in the Government the Contrac- tor's right, title, and interest aforesaid, and the right to apply for and prosecute patent applications covering such Invention throughout the world, sub- ject, however, to the rights of the Contractor in foreign applications as provided in (e) below, and subject further to the reservation of a non-exclu- sive and royalty-free license to the Contractor (and to its existing and future associated and affiliated companies, if any, within the corporate structure of which the Contractor is a part) which license shall be assignable to the successor of that part of the Contractor's business to which such Invention pertains; (iii) the Contractor shall furnish promptly to the Contracting Officer on request an irrevocable power of attorney to inspect and make copies of each United States patent application filed by or on be- half of the Contractor covering any such Inven- tion; (iv) in the event the Contractor, or those other than the Government deriving rights from the Contractor, elects not to continue prosecution of any such United States patent application filed by or on behalf of the Contractor, the Contractor shall so notify the Contracting Officer not less than sixty days before the expiration of the response period and, upon written request, deliver to the Contract- ing Officer such duly executed instruments (pre- pared by the Government) as are deemed necessary to vest in the Government the Contractor's entire Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 right, title, and interest in such Invention and the application, subject to the reservation as specified in (d) (ii) above; and (v) the Contractor shall deliver to the Contract- ing Officer duly executed instruments fully con- firmatory of any license rights herein agreed to be granted to the Government. (e) The Contractor, or those other than the Gov- ernment deriving rights from the Contractor, shall, as between the parties hereto, have the exclusive rights to file applications on Subject Inventions in each foreign country within: (i) nine months from the date a corresponding United States application is filed; (ii) six months from the date permission is granted to file foreign applications where such filing had been prohibited for security reasons; or (iii) such longer period as may be approved by the Contracting Officer. The Contractor shall, upon written request of the Contracting Officer, convey to the Government the Contractor's entire right, title, and interest in each Subject Invention in each foreign country in which an application has not been filed within the time above specified, subject to the reservation of a non- exclusive and royalty-free license to the Contrac- tor together with the right of the Contractor to grant sublicenses, which license and right shall be assignable to the successor of that part of the Con- tractor's business to which the Subject Invention pertains. (f) If the Contractor fails to deliver to the Con- tracting Officer the interim reports required by (c) (ii) above, or fails to furnish the written dis- closures for all Subject Inventions required by (c) (I) above shown to be due in accordance with any interim report delivered under (c) (ii) or other- wise known to be unreported, there shall be with- held from payment until the Contractor shall have corrected such failures either ten percent (10%) of the amount of this contract, as from time to time amended, or five thousand dollars ($5,000), whichever is less. After payment of eighty per- cent (80%) of the amount of this contract, as from time to time amended, payment shall be withheld until a reserve of either ten percent (10%) of such amount, or five thousand dollars ($5,000), which- ever is less, shall have been set aside, such reserve or balance thereof to be retained until the Con- tractor shall have furnished to the Contracting Officer: (1) the final report required by (c) (111) above; (ii) written disclosures for all Subject Inventions required by (c) (1) above which are shown to be due in accordance with interim reports delivered under (c) (11) above or in accordance with such final reports or are otherwise known to be unre- ported; and (111) the information as to any subcontractor re- quired by (h) below. The maximum amount which may be withheld under this paragraph U) shall not exceed ten percent (10%) of the amount of this contract or five thousand dollars ($5,000), whichever is less, and no amount shall be withheld under this paragraph (f) when the amount speci- fied by this paragraph (f) Is being withheld under other provisions of this contract. The withhold- ing of any amount or subsequent payment thereof to the Contractor shall not be construed as a waiver of any rights accruing to the Government under this contract. This paragraph (f) shall not be con- strued as requiring the Contractor to withhold any amounts from a subcontractor to enforce compli- ance with the patent provisions of a subcontract. (g) The Contractor shall, unless otherwise au- thorized by the Contracting Officer as hereafter pro- vided, include a patent rights clause containing all the provisions of this Patent Rights Clause except provision (f) In any subcontract hereunder of three thousand dollars ($3,000) or more having experi- mental, developmental, or research work as one of its purposes. In the event of refusal by a subcon- tractor to accept such a patent rights clause, the contractor (1) shall promptly submit a written re- port to the Contracting Officer setting forth the subcontractor's reasons for such refusal and other pertinent information which may expedite disposi- tion of the matter, and (11) shall not proceed with the subcontract without the written authorization of the Contracting Officer. Reports, instruments, and other information required to be furnished by a subcontractor to the Contracting Officer under the provisions of such a patent rights clause in a subcontract hereunder may, upon mutual consent of the Contractor and subcontractor, (or by direc- tion of the Contracting Officer) be furnished to the Contractor for transmission to the Contracting Offi- cer. [Rev. No. 9, 4/15/62.1 (h) The Contractor shall, at the earliest prac- ticable date, notify the Contracting Officer in writ- ing of any subcontract containing one or more patent rights clauses, furnish the Contracting Offi- cer a copy of each of such clauses; and notify the Contracting Officer when such subcontract is com- pleted. It is understood that with respect to any subcontract clause granting rights to the Govern- ment in Subject Inventions, the Government is a third party beneficiary; and the Contractor hereby assigns to the Government all the rights that the Contractor would have to enforce the subcontrac- tor's obligations for the benefit of the Government with respect to Subject Inventions. If there are no subcontracts containing patent rights clauses, a negative report is required. The Contractor shall not be obligated to enforce the agreements of any subcontractor hereunder relating to the obligations of the subcontractor to the Government in regard to Subject Inventions. FP or PR 1 Feb. 63 12 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved (i) The contractor recognizes that the Govern- ment, or a foreign Government with funds derived through the Military Assistance Program or other- wise through the United States Government, may contract for property or services with respect to which the vendor may be liable to the Contractor for royalties for the use of a Subject Invention on account of such a contract. The Contractor fur- ther recognizes that it is the policy of the Govern- ment not to pay in connection with its contracts, or to allow to be paid in connection with contract made with funds derived through the Military As- sistance Program or otherwise through the United States Government, charges for use of patents in which the Government holds a royalty free license. In recognition of this policy, the Contractor agrees to participate in this policy and to make ap- propriate arrangements for the exclusion of such charges from such contracts or for the refund of amounts received by the contractor with respect to any such charges not so excluded. [Rev. No. 9, 4/15/62.] 25. DATA (ASPR 9-203.1) (Feb. 1962) (a) The term "Subject Data" as used herein in- cludes writings, sound recordings, pictorial repro- ductions, drawings or other graphical representa- tions, and works of any similar nature (whether or not copyrighted) which are specified to be delivered under this contract. The term does not include financial reports, cost analyses, and other Informa- tion incidental to contract administration. (b) The Contractor agrees to and does hereby grant to the Government, and to its officers, agents, and employees acting within the scope of their official duties, a royalty-free, nonexclusive and Ir- revocable license throughout the world for Govern- ment purposes to publish, translate, reproduce, de- liver, perform, dispose of, and to authorize others so to do, all Subject Data now or hereafter covered by copyright. [Rev. No. 7, 2/15/62.] (c) The contractor shall not include in the Sub- ject Data any copyrighted matter, without the written approval of the Contracting Officer, unless he provides the Government with the written per- mission of the copyright owner for the Government to use such copyrighted matter in the manner pro- vided in paragraph (b) above. [Rev. No. 7, 2/15/62.] (d) The Contractor shall report to the Contract- ing Officer, promptly and in reasonable written de- tail, each notice or claim of copyright infringement received by the Contractor with respect to all Sub- ject Data delivered under this contract. (e) Nothing contained in this clause shall imply a license to the Government under any patent or be construed as affecting the scope of any license or other right otherwise granted to the Govern- ment under any patent. (f) Unless otherwise limited below, the Govern- ment may duplicate, use, and disclose in any man- FP or PR 1 Feb. 63 13 ner and for any purpose whatsoever, and have others so do, all Subject Data delivered under this contract. [Rev. No. 7, 2/15/62.1 (g) The Contractor recognizes that the Govern- ment, or a foreign government with funds derived through the Mutual Security Program or otherwise through the United States Government, may con- tract for property or services with respect to which the vendor may be liable to the Contractor for charges for the use of Subject Data on account of such a contract. The Contractor further recognizes that it is the policy of the Government not to pay in connection with its contracts, or to allow to be paid in connection with contracts made with funds de- rived through the Mutual Security Program or otherwise through the United States Government, charges for data which the Government has a right to use and disclose to others, or which is in the public domain, or with respect to which the Gov- ernment has been placed in possession without restrictions upon its use and disclosure to others. This policy does not apply to reasonable reproduc- tion, handling, mailing, and similar administrative costs incident to the furnishing of such data. In recognition of this policy, the Contractor agrees to participate in and make appropriate arrangements for the exclusion of such charges from such con- tracts or for the refund of amounts received by the Contractor with respect to any such charges not so excluded. [Rev. No. 52, 3/15/60.1 (h) Notwithstanding any provisions of this con- tract concerning inspection and acceptance, the Government shall have the right at any time to modify, remove, obliterate or ignore any marking not authorized by the terms of this contract on any piece of Subject Data furnished under this contract. [Rev. No. 38, 10/15/58; Rev. No. 52, 3/15/60.] 26. DATA - WITHHOLDING OF PAYMENT (ASPR 9-207.2) (Apr. 1962) If "Subject Data" (as defined in the clause of this contract entitled "Data"), or any part thereof, is not delivered within the time specified by this contract or is deficient upon delivery (including having restrictive markings not specifically author- ized by the contract), the Contracting Officer may, until such data is delivered or deficiencies are cor- rected, withhold payment to the Contractor of ten percent (10%) of the contract price unless a lesser withholding is specified In the schedule. Payments shall not be withheld nor any other action taken pursuant to this clause where the Contractor's fail- ure to make timely delivery or to deliver data with- out deficiencies arises out of causes beyond the con- trol and without the fault or negligence of the Con- tractor within the meaning of the clause hereof entitled "Default." The withholding of any amount or subsequent payment thereof to the Contractor shall not be construed as a waiver of any rights accruing to the Government under this contract. Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 27. MILITARY SECURITY REQUIREMENTS (ASPR 7-104.12) (June 1958) (a) The provisions of this clause shall apply to the extent that this contract involves access to security information classified "Confidential" In- cluding "Confidential-Modified Handling Author- ized" or higher. (b) The Government shall notify the Contractor of the security classification of this contract and the elements thereof, and of any subsequent re- visions in such security classification, by the use of a Security Requirements Check List (DD Form 254) or other written information. (c) To the extent the Government has indicated as of the date of this contract, or thereafter indi- cates, security classification under this contract as provided In paragraph (b) above, the Contractor shall safeguard all classified elements of this con- tract and shall provide and maintain a system of security controls within Its own organization In accordance with the requirements of: (1) the Security Agreement (DD Form 441), In- cluding the Department of Defense Industrial Secu- rity Manual for Safeguarding Classified Informa- tion as in effect on the date of this contract, and any modification to the Security Agreement for the purpose of adapting the Manual to the Con- tractor's business; and (ii) any amendments to said Manual made after the date of this contract, notice of which has been furnished to the Contractor by the Security Office of the Military Department having security cogni- zance over the facility. (d) Representatives of the Military Department having security cognizance over the facility and representatives of the contracting Military Depart- ment shall have the right to inspect at reasonable intervals the procedures, methods, and facilities utilized by the Contractor in complying with the security requirements under this contract. Should the Government, through its authorized representa- tives, determine that the Contractor Is not comply- ing with such requirements, the Government shall inform the Contractor in writing of the proper ac- tions to be taken In order to effect compliance with such requirements. (e) If, subsequent to the date of this contract, the security classifications or requirements under this contract are changed by the Government as provided in this clause and the security costs under this contract are thereby increased or decreased, the contract price shall be subject to an equitable adjustment by reason of such increased or de- creased costs. Any equitable adjustment shall be accomplished in the same manner as if such changes were directed under the "Changes" clause in this contract. (f) The Contractor agrees to insert, In all sub- contracts hereunder which involve access to clas- sified security information, provisions which shall conform substantially to the language of this clause, including this paragraph (f) but excluding the last sentence of paragraph (e) of this clause. (g) The Contractor also agrees that it shall de- termine that any subcontractor proposed by it for the furnishing of supplies and services which will Involve access to classified information In the Con- tractor's custody has been granted an appropriate facility security clearance, which is still In effect, prior to being accorded access to such classified information. [Rev. No. 34, 6/11/58; Rev, No. 48, 8/1/59.1 28. UTILIZATION OF SMALL BUSINESS CONCERNS (ASPR 7-104.14) (Jan. 1958) (a) It is the policy of the Government as Glared by the Congress that a fair proportion of the purchases and contracts for supplies and serv- ices for the Government be placed with small business concerns. [Rev. No. 28, 1/28/58.] (b) The Contractor agrees to accomplish the maximum amount of subcontracting to small busi- ness concerns that the Contractor finds to be con- sistent with the efficient performance of this con- tract. 29. EXAMINATION OF RECORDS (ASPR 7-104.15) (Mod.) (Feb. 1962) (a) The Contractor agrees that the Contracting Officer or any of his duly authorized representatives shall, until the expiration of three years after final payment under this contract, have access to and the right to examine any directly pertinent books, documents, papers and records of the Con- tractor involving transactions related to this con- tract. (b) The Contractor further agrees to Include in all his subcontracts hereunder a provision to the effect that the subcontractor agrees that the Con- tracting Officer or any of his duly authorized repre- sentatives shall, until the expiration of three years after final payment under the subcontract, have access to and the right to examine any directly pertinent books, documents, papers, and records of such subcontractor Involving transactions related to the subcontract. The term "subcontract" as used In this clause excludes (1) purchase orders not exceeding $2,500 and (ii) subcontracts or purchase orders for public utility services at rates established for uniform applicability to the general public. [Rev. No. 39, 11/3/58; Rev. No. 42, 1/9/59.] 30. GRATUITIES (ASPR 7-104.16) (Mar. 1852) (a) The Government may, by written notice to the Contractor, terminate the right of the Con- tractor to proceed under this contract if it is found, after notice and hearing, by the Secretary or his duly authorized representative, that gratuities (in FP or PR 1 Feb. 63 14 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved the form of entertainment, gifts, or otherwise) were offered or given by the Contractor, or any agent or representative of the Contractor, to any officer or employee of the Government with a view toward securing a contract or securing favorable treat- ment with respect to the awarding or amending or the making of any determinations with respect to the performing of such contract; provided, that the existence of the facts upon which the Secretary or his duly authorized representative makes such find- ings shall be in issue and may be reviewed in any competent court. (b) In the event this contract is terminated as provided in paragraph (a) hereof, the Government shall be entitled (i) to pursue the same remedies against the Contractor as it could pursue in the event of a breach of the contract by the Contractor, and (ii) as a penalty in addition to any other damages to which it may be entitled by law, to exemplary damages in an amount (as determined by the Secretary or his duly authorized representa- tive) which shall be not less than three nor more than ten times the costs incurred by the Contrac- tor in providing any such gratuities to any such officer or employee. (c) The rights and remedies of the Government provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or under this contract. 31. CONVICT LABOR (ASPR 7-104.17- ASPR 12-203) (Mar. 1949) In connection with the performance of work un- der this contract, the Contractor agrees not to em- ploy any person undergoing sentence of imprison- ment at hard labor. 32. MATERIEL INSPECTION AND RECEIVING REPORT (ASPR 7-105.7) At the time of each delivery under this contract the Contractor shall prepare and furnish to the Government, in the manner and to the extent re- quired by the Contracting Officer, a Materiel In- spection and Receiving Report (DD Form 250 or comparable form). The Government shall furnish the required forms to the Contractor upon request. [Rev. No. 11, 9/30/62.] 33. SUBCONTRACTS (SOURCES) (AFPI 7-4030) (Mar. 1960) No contract shall be made by the Contractor with any other party for furnishing any of the completed or substantially completed articles, spare parts, or work, herein contracted for, without the written approval of the Contracting Officer as to sources. 34. SUBCONTRACTS (ASPR 3-903.1) (Nov. 1962) If this contract provides for price redetermina- tion or incentive, the following additional provisions shall apply to subcontracts. FP or PR 1 Feb. 63 15 (a) As used in this clause, the term "subcontract" includes purchase orders. (b) Except as provided in paragraph (d) below, the Contractor shall notify the Contracting Officer reasonably in advance of entering into any sub- contract which- (i) is on a cost-plus-a-fee, time and material, or labor-hour basis and which would involve an esti- mated amount in excess of $10,000, including any fee; or (ii) is proposed to exceed $100,000; or (iii) is one of a number of subcontracts under this contract with a single subcontractor for the same or related supplies or services which, in the aggregate, are expected to exceed $100,000. (c) The advance notification required by para- graph (b) above shall include: (i) a description of the supplies or services to be called for by the subcontract; (ii) identification of the proposed subcontractor and an explanation of why and how the proposed subcontractor was selected, including the degree of competition obtained; (iii) the proposed subcontract price, together with the Contractor's cost or price analysis thereof, in- cluding current, complete, and correct cost or pric- ing data accompanied with a certificate from the subcontractor to the effect that all cost or pricing data has been considered by the subcontractor in preparing his proposal and that such data is cur- rent, and has been provided the Contractor; and [Rev. No. 6, 11/15/61; Rev. No. 7, 2/15/62.] (iv) identification of the type of contract proposed to be used. (d) Advance notifications of subcontracts, as re- quired by paragraph (b) above, are not required for any subcontract (i) not on a cost-plus-a-fee, time and material, or labor-hour basis, if the Con- tracting Officer has in writing approved the Con- tractor's purchasing system and the subcontract is within the limitations of such approval, or (ii) con- sented to in writing by the Contracting Officer as a proposed subcontract prior to the execution of this contract. (e) The Contractor shall not, without the prior written consent of the Contracting Officer, enter into any subcontract for which advance notifica- tion to the Contracting Officer is required by this clause; provided that, in his discretion, the Con- tracting Officer may ratify in writing any subcon- tract and such ratification shall constitute the con- sent of the Contracting Officer required by this paragraph. (f) No consent by the Contracting Officer to any subcontract or any provisions thereof or approval of the Contractor's purchasing system shall be con- strued to be a determination of the acceptability of any subcontract price or of any amount paid under any subcontract or to relieve the Contractor Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 of any responsibility for performing this contract, unless such approval or consent specifically provides otherwise. (g) The Contractor agrees that no subcontract placed under this contract shall provide for pay- ment on a cost-plus-a-percentage-of-cost basis. [Rev. No. 6, 11/15/61; AFPC No. 37, 8/14/82; Rev. No. 11, 9/30/62; Rev. No. 12, 11/26/62.1 35. SUBCONTRACTOR COST AND PRICING DATA (ASPR 7-104.42) (Nov. 1962) The following clause shall apply to all incentive and redeterminable type contracts, and to all other negotiated contracts when the contractor has fur- nished a Certificate of Current Cost or Pricing Data in connection with the initial pricing thereof. (a) The Contractor shall require subcontractors hereunder to submit cost or pricing data under the following circumstances: (1) prior to award of any cost-reimbursement type, incentive, or price rede- terminable subcontract; (11) prior to the award of any subcontract the price of which is expected to exceed $100,000, except where the price thereof Is based on adequate price competition, established catalog or market prices of commercial Items sold in substantial quantities to the general public, or prices set by law or regulation; (111) prior to the pricing of any subcontract change or other modifi- cation for which the price adjustment is expected to exceed $100,000. (b) The Contractor shall require subcontractors to certify, in substantially the same form as that used in the certificate by the Prime Contractor to the Government, that to the best of their knowledge and belief, the cost and pricing data submitted under (a) above is accurate, complete, and current as of the date of execution, which date shall be as close as possible to the date of agreement on the negotiated price of the subcontract. (c) The Contractor shall Insert the substance of this clause, Including this paragraph (c), in each subcontract hereunder which exceeds $100,000, ex- cept where the price thereof is based on adequate price competition, established catalog or market prices of commercial items sold in substantial quan- tities to the general public, or prices set by law or regulation. In each such excepted subcontract hereunder in excess of $100,000 the Contractor shall insert the substance of the following clause: Subcontractor Cost and Pricing Data- Price Adjustments (a) Paragraphs (b) and (c) of this clause shall become operative only with respect to any change or other modification made pursuant to one or more provisions of this contract which involves a price adjustment in excess of $100,000. The requirements of this clause shall be limited to such price adjust- ments. (b) The Contractor shall require subcontractors hereunder to submit cost or pricing data under the following circumstances: (1) prior to award of any cost-reimbursement type, incentive, or price rede- terminable subcontract; (Ii) prior to award of any subcontract, the price of which is expected to ex- ceed $100,000 except where the price thereof is based on adequate price competition, established catalog or market prices of commercial items sold in sub- stantial quantities to the general public or prices set by law or regulation; (iii) prior to the pricing of any subcontract change or other modification for which the price adjustment is expected to exceed $100,000. (c) The Contractor shall require subcontractors to certify, in substantially the same form as that used in the certificate by the Prime Contractor to the Government, that to the best of their knowl- edge and belief the cost and pricing data submit- ted under (b) above is accurate, complete, and cur- rent as of the date of the execution, which date shall be as close as possible to the date of agree- ment on the negotiated price of the contract modi- fication. (d) The Contractor shall insert the substance of this clause including this paragraph (d) in each subcontract hereunder which exceeds $100,000. 36. SUBCONTRACTOR COST AND PRICING DATA-PRICE ADJUSTMENTS (ASPR 7-104.42) (Nov. 1962) The following clause shall apply to all advertised and negotiated contracts In excess of $100,000, where the contractorhas not furnished a Certificate of Current Cost or Pricing Data in connection with the initial pricing thereof. Subcontractor Cost and Pricing Data- Price Adjustments (Nov. 1962) (a) Paragraphs (b) and (c) of this clause shall become operative only with respect to any change or other modification made pursuant to one or more provisions of this contract which involves a price adjustment in excess of $100,000. The requirements of this clause shall be limited to such price ad- justments. (b) The Contractor shall require subcontractors hereunder to submit cost or pricing data under the following circumstances: (f) prior to award of any cost-reimbursement type, incentive, or price redeter- minable subcontract; (11) prior to award of any sub- contract the price of which is expected to exceed $100,000, except where the price thereof is based on adequate price competition, established catalog or market prices of commercial items sold in sub- stantial quantities to the general public or prices set by law or regulation; (Iii) prior to the pricing of any subcontract change or other modification for which the price adjustment is expected to exceed $100,000. FP or PR 1 Feb. 63 16 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 (c) The Contractor shall require subcontractors to certify that to the best of their knowledge and belief the cost and pricing data submitted under (b) above is accurate, complete, and current as of the date of the execution, which date shall be as close as possible to the date of agreement on the ne- gotiated price of the contract modification. (d) The Contractor shall insert the substance of this clause including this paragraph (d) in each subcontract hereunder which exceeds $100,000. 37. COMPETITION IN SUBCONTRACTING (ASPR 7-104.40) (Apr. 1962) The Contractor shall select subcontractors (in- cluding suppliers) on a competitive basis to the maximum practical extent consistent with the ob- jectives and requirements of the contract. [Rev. No. 9, 4/15/62.] 38. UTILIZATION OF CONCERNS IN LABOR SURPLUS AREAS (ASPR 1-805.3) (Feb. 1962) It is the policy of the Government to place con- tracts with concerns which will perform such con- tracts substantially in areas of persistent or sub- stantial labor surplus where this can be done, con- sistent with the efficient performance of the con- tract, at prices no higher than are obtainable else- where. The Contractor agrees to use his best efforts to place his subcontracts in accordance with this policy. In complying with the foregoing and with paragraph (b) of the clause of this contract en- titled "Utilization of Small Business Concerns," the Contractor in placing his subcontracts shall observe the following order of preference: (i) persistent labor surplus area concerns which are also small business concerns; (ii) other persistent labor sur- plus area concerns; (iii) substantial labor surplus area concerns which are also small business con- cerns; (iv) other substantial labor surplus area concerns; and (v) small business concerns which are not labor surplus area concerns. 39. STANDARDS OF WORK (ASPR 7-302.3) (June 1959) The Contractor agrees that the performance of work and services pursuant to the requirements of this contract shall conform to high professional standards. 40. GROUND AND FLIGHT RISK (ASPR (Feb. 1962) (a) Notwithstanding any other provisions of this contract, except as may be specifically provided in the Schedule as an exception to this clause, the Government, subject to the definitions and limita- tions of this clause, assumes the risk of damage to, or loss or destruction of, aircraft "in the open," during "operation," and in "flight," as these terms are defined below, and agrees that the Contractor shall not be liable to the Government for any such FP or PR 1 Feb. 63 17 damage, loss, or destruction, the risk of which is so assumed by the Government. (b) For the purposes of this clause: (i) Unless otherwise specifically provided in the Schedule, the term "aircraft" means- (A) aircraft (including (I) complete aircraft, and (II) aircraft in the course of being manufactured, disassembled, or reassembled, provided that an en- gine or a portion of a wing or a wing is attached to a fuselage of such aircraft) to be furnished to the Government under this contract (whether be- fore or after acceptance by the Government) ; and (B) aircraft (regardless of whether in a state of disassembly or reassembly) furnished by the Gov- ernment to the Contractor under this contract; in- cluding all property installed therein, or in the process of installation, or temporarily removed from such aircraft; provided, however, that such aircraft and property are not covered by a separate bail- ment agreement. (ii) The term "in the open" means located wholly outside of buildings on the Contractor's premises or at such other places as may be described in the Schedule as being in the open for the purposes of this clause, except that aircraft furnished by the Government shall be deemed to be in the open at all times while in the Contractor's possession, care custody, or control. (iii) The term "flight" means any flight demon- stration, flight test, taxi test, or other flight, made in the performance of this contract, or for the pur- pose of safeguarding the aircraft, or previously ap- proved in writing by the Contracting Officer. With respect to land based aircraft, "flight" shall com- mence with the taxi roll from a flight line on the Contractor's premises, and continue until the air- craft has completed the taxi roll in returning to a flight line on the Contractor's premises; with re- spect to seaplanes, "flight" shall commence with the launching from a ramp on the Contractor's premises and continue until the aircraft has com- pleted its landing run upon return and is beached at a ramp on the Contractor's premises; with re- spect to helicopters, "flight" shall commence upon engagement of the rotors for the purpose of take- off from the Contractor's premises and continue until the aircraft has returned to the ground on the Contractor's premises and the rotors are dis- engaged; and with respect to vertical take-off air- craft, "flight" shall commence upon disengagement from any launching platform or device on the Con- tractor's premises and continue until the aircraft has been re-engaged to any launching platform or device on the Contractor's premises; provided, however, that aircraft off the Contractor's premises shall be deemed to be in flight when on the ground or water only during periods of reasonable dura- tion following emergency landings, other landings made in the performance of this contract, or land- ings approved by the Contracting Officer in writing. Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 (iv) The term "Contractor's premises" means those premises designated as such in the Schedule or in writing by the Contracting Officer, and any other place to which aircraft are moved for the purpose of safeguarding the aircraft. (v) The term "operation" means operations and tests, other than on any production line, of air- craft, when not in flight, whether or not the air- craft is in the open or in motion during the making of any such operations or tests, and includes opera- tions and tests of equipment, accessories, and power plants, only when installed in aircraft. (vi) The term "flight crew members" means the pilot, the co-pilot and, unless otherwise specifically provided in the Schedule, the flight engineer, navi- gator, bombardier-navigator, and defensive systems operator, when required, or assigned to their respec- tive crew positions, to conduct any flight on behalf of the Contractor. (c) (1) The Government's assumption of risk under this clause, as to aircraft in the open, shall continue in effect unless terminated pursuant to subparagraph (3) below. Where the Contracting Officer finds that any of such aircraft is in the open under unreasonable conditions, he shall notify the Contractor in writing of the conditions he finds to be unreasonable and require the Contractor to correct such conditions within a reasonable time. (2) Upon receipt of such notice, the Contractor shall act promptly to correct such conditions, re- gardless of whether he agrees that such condi- tions are In fact unreasonable. To the extent that the Contracting Officer may later determine that such conditions were not in fact unreasonable, an equitable adjustment shall be made in the contract price to compensate the Contractor for any addi- tional costs it incurred in correcting such condi- tions and the contract shall be modified in writing accordingly. Any dispute as to the unreasonable- ness of such conditions or the equitable adjust- ment shall be deemed to be a dispute concerning a question of the fact within the meaning of the clause of this contract entitled "Disputes." (3) If the Contracting Officer finds that the Con- tractor has failed to act promptly to correct such conditions or has failed to correct such conditions within a reasonable time, he may terminate the Government's assumption of risk under this clause, as to any of the aircraft which Is In the open under such conditions, such termination to be effective at 12:01 A. M. on the fifteenth day following the day of receipt by the Contractor of written notice there- of. If the Contracting Officer later determines that the Contractor acted promptly to correct such con- ditions or that the time taken by the Contractor was not In fact unreasonable, an equitable adjust- ment shall, notwithstanding paragraph (f) of this clause, be made In the contract price to compensate the Contractor for any additional costs he incurred as a result of termination of the Government's as- sumption of risk under this clause and the contract shall be modified In writing accordingly. Any dis- pute as to whether the Contractor failed to act promptly to correct such conditions, or as to the reasonableness of the time for correction of such conditions, or as to such equitable adjustment, shall be deemed to be a dispute concerning a question of fact within the meaning of the clause of this contract entitled "Disputes." (4) In the event the Government's assumption of risk under this clause is terminated in accord- ance with (3) above, the risk of loss with respect to Government-furnished property shall be deter- mined in accordance with the clause of this con- tract, If any, entitled "Government-Furnished Prop- erty" until the Government's assumption of risk is reinstated in accordance with (5) below. (5) When unreasonable conditions have been corrected, the Contractor shall promptly notify the Government thereof. The Government may elect to again assume the risks and relieve the Contractor of liabilities as provided In this clause, or not, and the Contracting Officer shall notify the Contractor of the Government's election. If, after correction of the unreasonable conditions, the Government elects to again assume such risks and relieve the Contractor of such liabilities, the Contractor shall be entitled to an equitable adjustment in the con- tract price for costs of Insurance, If any, extending from the end of the third working day after the Contractor notifies the Government of such cor- rection until the Government notifies the Contrac- tor of such election. If the Government elects not to again assume such risks, and such conditions have in fact been corrected, the Contractor shall be entitled to an equitable adjustment for costs of insurance, if any, extending after such third working day. (d) The Government's assumption of risk shall not extend to damage to, or loss or destruction of, such aircraft: (1) resulting from failure of the Contractor, due to willful misconduct or lack of good faith of any of the Contractor's managerial personnel, to main- tain and administer a program for the protection and preservation of aircraft in the open, and dur- Ing operation, in accordance with sound industrial practice (the term "Contractor's managerial per- sonnel" means the Contractor's directors, officers, and any of Its managers, superintendents, or other equivalent representatives, who has supervision or direction of all or substantially all of the Contrac- tor's business, or all or substantially all of the Contractor's operations at any one plant or separate location at which this contract is performed, or a separate and complete major industrial operation in connection with the performance of this con- tract) ; (it) sustained during flight If the flight crew members conducting such flight have not been ap- proved in writing by the Contracting Officer; FP or PR 1 Feb. 63 18 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 (iii) while in the course of transportation by rail, or by conveyance on public streets, highways, or waterways, except for Government-furnished prop- erty; (iv) to the extent that such damage, loss or destruction is in fact covered by insurance; (v) consisting of wear and tear, deterioration (including rust and corrosion), freezing, or me- chanical, structural, or electrical breakdown or failure, unless such damage is the result of other loss, damage, or destruction covered by this clause; provided, however, in the case of Government- furnished property, if such damage consists of reasonable wear and tear or deterioration, or re- sults from inherent vice in such property, this ex- clusion shall not apply; (vi) sustained while the aircraft is being worked upon and directly resulting therefrom, including but not limited to any repairing, adjusting, serv- icing or maintenance operation, unless such dam- age, loss or destruction is of a type which would be covered by insurance which would customarily have been maintained by the Contractor at the time of such damage, loss, or destruction, but for the Government's assumption of risk under this clause; or (vii) under this clause, where the total loss re- sulting from each event separately occurring is less than $500. (e) A subcontractor shall not be relieved from liability for damage to, or loss or destruction of, aircraft while in its possession or control, except to the extent that the subcontract, with the prior written approval of the Contracting Officer, pro- vides for relief of the subcontractor from such liability. In the absence of such approval, the sub- contract shall contain appropriate provisions re- quiring the return of such aircraft in as good con- dition as when received, except for reasonable wear and tear or for the utilization of the property in accordance with the provisions of this contract. Where a subcontractor has not been relieved from liability for any damage, loss, or destruction of air- craft and any damage, loss, or destruction occurs, the Contractor shall enforce the liability of the subcontractor for such damage to, or loss or de- struction of, the aircraft for the benefit of the Government. (f) The Contractor warrants that the contract price does not and will not include, except as may be otherwise authorized in this clause, any charge or contingency reserve for insurance (including self-insurance funds or reserves) covering any damage to, or loss or destruction of, aircraft while in the open, during operation, or in flight, the risk of which has been assumed by the Government under the provisions of this clause, whether or not such assumption may be terminated as to aircraft in the open. (g) In the event of damage to, or loss or destruc- tion of, aircraft in the open, during operation, or in flight, the Contractor shall take all reasonable steps to protect such aircraft from further dam- age, separate damaged and undamaged aircraft, put all aircraft in the best possible order and, fur- ther, except in cases covered by (d) (vii) above, the Contractor should furnish to the Contracting Offi- cer a statement of: (i) the damaged, lost, or destroyed aircraft; (ii) the time and origin of the damage, loss, or destruction; (iii) all known interests in commingled property of which aircraft are a part; and (iv) the insurance, if any, covering any part of the interest in such commingled property. Except in cases covered by (d) (vii) above, an equi- table adjustment shall be made in the amount due under this contract for expenditures made by the Contractor in performing its obligations under this paragraph (g) and this contract shall be modified in writing accordingly. (h) If prior to delivery and acceptance by the Government any aircraft is damaged, lost, or de- stroyed and the Government has under this clause assumed the risk of such damage, loss, or destruc- tion, the Government shall either (1) require that such aircraft be replaced or restored by the Con- tractor to the condition in which it was immediately prior to such damage, or (2) shall terminate this contract with respect to such aircraft. In the event that the Government requires that the air- craft be replaced or restored, an equitable adjust- ment shall be made in the amount due under this contract and in the time required for its perform- ance, and this contract shall be modified in writing accordingly. If, in the alternative, this contract is terminated under this paragraph with respect to such aircraft and under this clause the Govern- ment has assumed the risk of such damage, loss, or destruction, the Contractor shall be paid the contract price for said aircraft (or, if applicable, any work to be performed on said aircraft) less such amounts as the Contracting Officer determines (1) that it would have cost the contractor to com- plete the aircraft (or any work to be performed on said aircraft) together with anticipated profit, if any, on any such uncompleted work, and (2) to be the value, if any, of the damaged aircraft or any remaining portion thereof retained by the Con- tractor. The Contracting Officer shall have the right to prescribe the manner of disposition of the damaged, lost, or destroyed aircraft, or any remain- ing parts thereof; and, if any additional costs of such disposition are incurred by the Contractor, a further equitable adjustment will be made in the amount due to the Contractor. Failure of the par- ties to agree upon an equitable adjustment or upon the amount to be paid in the event of termination of the contract with respect to any aircraft, shall be a dispute concerning a question of fact within the meaning of the Disputes clause of this con- tract. [Rev. No. 6, 11/15/61.] FP or PR 1 Feb. 63 19 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 (f) In the event the Contractor is at any time reimbursed or compensated by any third person for any damage, loss, or destruction of any aircraft, the risk of which has been assumed by the Govern- ment under the provisions of this clause and for which the Contractor has been compensated by the Government, he shall equitably reimburse the Gov- ernment. The Contractor shall do nothing to prej- udice the Government's rights to recover against third parties for any such damage, loss, or destruc- tion and upon the request of the Contracting Officer shall at the Government's expense furnish to the Government all reasonable assistance and coopera- tion (including the prosecution of suit and the ex- ecution of instruments of assignment or subroga- tion in favor of the Government) In obtaining re- covery. 41. GOVERNMENT-FURNISHED PROPERTY (ASPR 13-502) (Nov. 1958) (a) The Government shall deliver to the Contrac- tor, for use in connection with and under the terms of this contract, the property described in the Schedule or specifications, together with such re- lated data and information as the, Contractor may request and as may reasonably be required for the intended use of such property (hereinafter re- ferred to as "Government-furnished Property"). The delivery or performance dates for the supplies or services to be furnished by the Contractor under this contract are based upon the expectation that Government-furnished Property suitable for use will be delivered to the Contractor at the times stated In the Schedule or, if not so stated, In suf- ficient 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 Contract- ing Officer shall, upon timely written request made by the Contractor, make a determination of the delay occasioned the Contractor thereby, and shall equitably adjust the delivery or performance dates or the contract price, or both, and any other con- tractual provision affected by such delay, in ac- cordance with the procedures provided for in the clause of this contract entitled "Changes." In the event the Government-furnished Property is re- ceived by the Contractor in a condition not suitable for the intended use the Contractor shall, upon receipt thereof, notify the Contracting Officer of such fact and, as directed by the Contracting Officer, either (I) return such property at the Government's expense or otherwise dispose of the property, or (ii) effect repairs or modifications. Upon the com- pletion of (1) or (ii) above, the Contracting Officer upon written request of the Contractor shall equi- tably adjust the delivery or performance dates or the contract price, or both, and any other con- tractual provision affected by the rejection or dis- position, or the repair or modification, in accord- ance with the procedures provided for in the clause of this contract entitled "Changes." The foregoing provisions for adjustment are exclusive and the Government shall not be liable to suit for breach of contract by reason of any delay in delivery of Government-furnished Property or delivery of such property in a condition not suitable for its intended use.. (b) By notice in writing the Contracting Officer may decrease the property furnished or to be fur- nished by the Government under this contract. In any such case, the Contracting Officer upon the written request of the Contractor shall equitably adjust the delivery or performance dates or the contract price, or both, and any other contractual provisions affected by the decrease, in accordance with the procedures provided for in the clause of this contract entitled "Changes." (c) Title to the Government-furnished Property shall remain in the Government. Title to Govern- ment-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 feason of affixation to any realty. The Contractor shall comply with the provisions of the "Manual for the Control of Government Prop- erty in the Possession of Contractors" (Appendix B, Armed Services Procurement Regulation) as in effect on the date of the contract, which Manual is hereby incorporated by reference and made a part of this contract. (d) The Government-furnished Property shall, unless otherwise provided herein, be used only for the performance of this contract. (e) The Contractor shall maintain and admin- ister, in accordance with sound industrial practice, a program for the maintenance, repair, protection and preservation of Goverment-furnished Property, until disposed of by the Contractor in accordance with. this clause. In the event that any damage occurs to Government-furnished Property the risk of which has been assumed by the Government under this contract, the Government shall replace such items 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 in- cludes no compensation to the Contractor for the performance of any repair or replacement for which the Government is responsible, 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 Con- tractor at his own expense. FP or PR 1 Feb. 63 20 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 (f) (1) Except for loss, destruction or damage resulting from a failure of the Contractor, due to willful misconduct or lack of good faith of any of the Contractor's managerial personnel as defined herein, to maintain and administer the program for the maintenance, repair, protection and preserva- tion of the Government-furnished Property as re- quired by paragraph (e) hereof, and except as spe- cifically provided in clause (s) .................. ................ of this contract or in the clause or clauses of this contract designated in the Sched- ule, the Contractor shall not be liable for loss or destruction of or damage to the Government-fur- nished Property (I) caused by any peril while the property is in transit off the Contractor's premises, or (ii) caused by any of the following perils while the property is on the Contractor's or subcontrac- tor's premises, or on any other premises where such property may properly be located, or by removal therefrom because of any of the following perils: (A) 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 vehi- cles owned or operated by the Contractor or any agent or employee of the Contractor; smoke; sprin- kler leakage; earthquake or volcanic eruption; flood, meaning thereby rising of a body of water; hostile or warlike action, including action in hinder- ing, combating, or defending against an actual, impending or expected attack by any government or sovereign power (de jure or de facto), or by any authority using military, naval, or air forces, or by an agent of any such government, power, au- thority, or forces; or (B) Other peril, of a type not listed above, if such other peril is customarily covered by insurance (or by a reserve for self-insurance) in accordance with the normal practice of the Contractor, or the prevailing practice in the industry in which the Contractor is engaged with respect to similar prop- erty in the same general locale. The perils as set forth in (I) and (ii) above are hereinafter called "excepted perils." This clause shall not be construed as relieving a subcontractor from liability for loss or destruction of or damage to the Government-furnished Prop- erty while in its possession or control, except to the extent that the subcontract, with the prior approval of the Contracting Officer, may provide for the relief of the subcontractor from such liability. In the absence of such approval, the subcontract shall contain appropriate provisions requiring the re- turn of all Government-furnished Property in as good condition as when received except for rea- sonable wear and tear or for the utilization of the property in accordance with the provisions of the prime contract. The term "Contractor's managerial personnel" as used herein means the Contractor's directors, offi- cers and any of its managers, superintendents, or other equivalent representatives who have supervi- sion or direction of (i) all or substantially all of the Contractor's business; (ii) all or substantially all of the Contractor's operation at any one plant or separate location at which the contract is being performed; (iii) a separate and complete major in- dustrial operation in connection with the perform- ance of this contract. (2) The Contractor represents that it is not in- cluding in the price hereunder, and agrees that it will not hereafter include in any price to the Gov- ernment, any charge or reserve for insurance (in- cluding self-insurance funds or reserves) cover- ing loss or destruction of or damage to the Gov- ernment-furnished Property caused by any ex- cepted peril. (3) Upon the happening of loss or destruction of or damage to any Government-furnished property caused by an excepted peril, the Contractor shall notify the Contracting Officer thereof, and shall communicate with the Loss and Salvage Organiza- tion, if any, now or hereafter designated by the Con- tracting Officer, and with the assistance of the Loss and Salvage Organization so designated (unless the Contracting officer has directed that no such or- ganization be employed), shall take all reasonable steps to protect the Government-furnished prop- erty from further damage, separate the damaged and undamaged Government-furnished property, put all the Government-furnished property in the best possible order, and furnish to the Contracting Officer a statement of: (i) the lost, destroyed and damaged Government-furnished property (ii) the time and origin of the loss, destruction or damage, (iii) all known interests in commingled property of which the Government-furnished property is a part, and (iv) the insurance, if any, covering any part of or interest in such commingled property. The Contractor shall be reimbursed for the expendi- tures made by it in performing its obligations under this subparagraph (3) (including charges made to the Contractor by the Loss and Salvage Organiza- tion, except any of such charges the payment of which the Government has, at its option, assumed directly), to the extent approved by the Contract- ing Officer and set forth in a Supplemental Agree- ment. (4) With the approval of the Contracting Officer after loss or destruction of or damage to Govern- ment-furnished property, and subject to such con- ditions and limitations as may be imposed by the Contracting Officer, the Contractor may, in order to minimize the loss to the Government or in order to permit resumption of business or the like, sell for the account of the Government any item of Government-furnished property which has been damaged beyond practicable repair, or which is so commingled or combined with property of others, FP or PR 1 Feb. 63 21 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 including the Contractor, that separation practicable. (5) Except to the extent of any loss or destruc- tion of or damage to Government-furnished prop- erty for which the Contractor is relieved of liability under the foregoing provisions of this clause, and except for reasonable wear and tear or depreciation, or the utilization of the Government-furnished property in accordance with the provisions of this contract, the Government-furnished property (other than property permitted to be sold) shall be re- turned to the Government in as good condition as when received by the Contractor In connection with this contract, or as repaired under paragraph (e) above. (8) 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 reim- burse the Government. The Contractor shall do nothing to prejudice the Government's rights to recover against third parties for any such loss, destruction or damage and, upon the request of the Contracting Officer, shall at the Government's expense, furnish to the Government all reasonable assistance and cooperation (including the prosecu- tion of suit and the execution of instruments of assignment in favor of the Government) In obtain- ing recovery. In addition, where a subcontractor has not been relieved from liability for any loss or destruction of or damage to the Government-fur- nished property, the Contractor shall enforce the liability of the subcontractor for such loss or de- struction of or damage to the Government-fur- nished property for the benefit of the Government. (7) If this contract is for the development, pro- duction, modification, maintenance or overhaul of aircraft, or otherwise involves the furnishing of air- craft by the Government, the "Ground and Flight Risk" clause of this contract shall control, to the extent it is applicable, in the case of loss or de- struction of, or damage to, aircraft. [Rev. No. 6, 11/15/61.1 (g) The Government shall at all reasonable times have access to the premises wherein any Govern- ment-furnished property is located. (h) Upon the completion of this contract, or at such earlier date as may be fixed by the Contract- ing Officer, the Contractor shall submit, in a form acceptable to the Contracting Officer, inventory schedules covering all items of Government-fur- nished property not consumed In the performance of this contract (including any resulting scrap), or not theretofore delivered to the Government, and shall deliver or make such other disposal of such Government-furnished property, as may be directed or authorized by the Contracting Officer. The net proceeds of any such disposal shall be credited to the contract price or shall be paid in such other manner as the Contracting Officer may direct. (i) Directions of the Contracting Officer and com- munications of the Contractor issued pursuant to this clause shall be in writing. Notwithstanding any other provision of this con- tract, unless paid within 30 days all amounts that become payable by the contractor to the Govern- ment under this contract (net of any applicable tax credit under the Internal Revenue Code) shall bear Interest at the rate of six percent per annum from the date due until-paid, and shall be subject to the adjustments as provided by Part 6 of Appendix E of the Armed Services Procurement Regulation, as in effect on the date of this contract. Amounts shall be due upon the earliest one of (i) the date fixed pursuant to this contract, (ii) the date of the first demand for payment, (iii) the date of a sup- plemental agreement fixing the amount, or (iv) If this contract provides for revision of prices, the date of written notice to the contractor stating the amount of refund payable In connection with a pricing proposal or In connection with a negotiated pricing agreement not confirmed by contract sup- plement. 43. AUDIT AND RECORDS (ASPR 7-104.41) (Nov. 1962) I. The following clause shall apply to all con- tracts, changes, or modifications where the contrac- tor has furnished a Certificate of Current Cost or Pricing Data. (a) For purposes of verifying that cost or pricing data submitted, In conjunction with the negotiation of this contract or any contract change or other modification Involving an amount in excess of $100,000 are accurate, complete, and current, the Contracting Officer, or his authorized representa- tives shall-until the expiration of three years from the date of final payment under this contract-have the right to examine those books, records, docu- ments and other supporting data which will permit adequate evaluation of the cost or pricing data sub- mitted, along with the computations and projections used therein, which were available to the Contrac- tor as of the date of execution of the Contractor's Certificate of Current Cost or Pricing Data. (b) The Contractor agrees to :insert the substance of this clause Including this paragraph (b) in all subcontracts hereunder in excess of $100,000 unless the price Is based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation. II, In the event this contract provides for incen- tive or price redetermination, the following alter- nate AUDIT AND RECORDS clause shall apply. FP or PR 1 Feb. 63 22 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Audit and Records (Nov. 1962) (a) The Contractor shall maintain books, records, documents, and other evidence and accounting pro- cedures and practices, sufficient to reflect properly all direct and indirect costs of whatever nature claimed to have been incurred and anticipated to be incurred for the performance of this contract. The foregoing constitute "records" for the purposes of this clause. (b) The Contractor's plants, or such part thereof as may be engaged in the performance of this con- tract, and his records shall be subject at all rea- sonable times to inspection and audit by the Con- tracting Officer or his authorized representative. (c) The Contractor shall preserve and make available his records (i) until the expiration of three years from the date of final payment under this contract, and (ii) for such longer period, if any, as is required by applicable statute, or by other clauses of this contract, or by (A) or (B) below. (A) If this contract is completely or partially ter- minated, the records relating to the work termi- nated shall be preserved and made available for a period of three years from the date of any result- ing final settlement. (B) Records which relate to (I) appeals under the "Disputes" clause of this contract or (ii) litigation or the settlement of claims arising out of the per- formance of this contract, shall be retained until such appeals, litigation, or claims have been dis- posed of. (d) (1) The Contractor shall insert the substance of this clause, including the whole of this paragraph (d), in each subcontract hereunder that is not on a firm fixed-price basis. (2) The Contractor shall insert the substance of the following clause in each firm fixed-price sub- contract hereunder in excess of $100,000, except those subcontracts covered by subparagraph (3) below. Audit (a) For purposes of verifying that cost or pricing data submitted in conjunction with the negotiation of this contract or any contract change or other modification involving an amount in excess of $100,000 are accurate, complete, and current, the Contracting Officer, or his authorized representa- tives, shall-until the expiration of three years from the date of final payment under this contract-have the right to examine those books, records, docu- ments, and other supporting data which will permit adequate evaluation of the cost or pricing data sub- mitted, along with the computations and projec- tions used therein, which were available to the Con- tractor as of the date of execution of the Contrac- tor's Certificate of Current Cost or Pricing Data. (b) The Contractor agrees to insert the substance of this clause including this paragraph (b) in all FP or PR 1 Feb. 63 subcontracts hereunder in excess of $100,000, unless the price is based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation. (3) The Contractor shall insert the substance of the following clause in each firm fixed-price sub- contract hereunder in excess of $100,000 where the price is based on adequate price competition, estab- lished catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation. Audit-Price Adustments (a) This clause shall become operative only with respect to any change or other modification made pursuant to one or more provisions of this contract which involves a price adjustment in excess of $100,000, unless the price adjustment is based on adequate price competition, established catalog or market prices of commercial items sold in substan- tial quantities to the general public, or prices set by law or regulation. (b) For purposes of verifying that any cost or pricing data submitted in conjunction with a con- tract change or other modification involving an amount in excess of $100,000 are adequate, complete, and current, the Contracting Officer, or his author- ized representatives, shall-until the expiration of three years from the date of final payment under this contract-have the right to examine those books, records, documents and other supporting data which will permit adequate evaluation of the cost or pricing data submitted, along with the com- putations and projections used therein, which were available to the Contractor as of the date of execu- tion of the Contractor's Certificate of Current Cost or Pricing Data. (c) The Contractor agrees to insert the substance of this clause including this paragraph (c) in all subcontracts hereunder in excess of $100,000 unless the price is based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation. 44. PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA (ASPR 7-104.29) (Nov. 1962) The following clause shall apply to all contracts where the contractor has furnished a Certificate of Current Cost or Pricing Data. (a) If the Contracting Officer determines that any price, including profit or fee, negotiated in connection with this contract was increased by any significant sums because the Contractor, or any subcontractor in connection with a subcontract covered by (c) below, furnished incomplete or in- accurate cost or pricing data or data not current as certified in the Contractor's Certificate of Cur- Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9 rent Cost or Pricing Data, then such price shall be reduced accordingly and the contract shall be mod- ified in writing to reflect such adjustment. (b) Failure to agree on a reduction shall be a dispute concerning a question of fact within the meaning of the "Disputes" clause of this contract. (c) The Contractor agrees to insert the substance of paragraphs (a) and (c) of this clause in each of his cost-reimbursement type, price redeterml- nable, or incentive subcontracts hereunder, and In any other subcontract hereunder in excess of $100,000 unless the price is based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regu- lation. In each such excepted subcontract here- under which exceeds $100,000, the Contractor shall insert the substance of the following clause. Price Reduction for Defective Cost or Pricing Data-Price Adjustments (a) This clause shall become operative only with respect to any change or other modification made pursuant to one or more provisions of this contract which involves a price adjustment In excess of $100,000. The right to price reduction under this clause shall be limited to such price adjustments- (b) If the Contractor determines that any price, including profit or fee, negotiated in connection with any price adjustment under this contract was increased by any significant sums because the sub- contractor or any of his subcontractors in connec- tion with a subcontract covered by paragraph (c) below, furnished incomplete or Inaccurate cost or pricing data or data not current as of the date of execution of the subcontractor's certificate of cur- rent cost or pricing data, then such price shall be reduced accordingly and the subcontract shall be modified in writing to reflect such adjustment. (c) The subcontractor agrees to Insert the sub- stance of this clause in each subcontract hereunder which exceeds $100,000. 45. PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA-PRICE ADJUSTMENTS (ASPR 7-104.29) (Nov. 1962) (a) This clause shall become operative only with respect to any change or other modification made pursuant to one or more provisions of this contract which involves a price adjustment in excess of $100,000. The right to price reduction under this clause shall be limited to such price adjustments. (b) If the Contracting Officer determines that any price, including profit, or fee, negotiated in connection with any price adjustment under this contract was increased by any significant sums be- cause the Contractor or any subcontractor in con- nection with a subcontract covered by paragraph (d) below, furnished incomplete or inaccurate cost or pricing data or data not current as of the date FP or PR 1 Feb. 63 24 of execution of the Contractor's Certificate of Cur- rent Cost or Pricing Data, then such price shall be reduced accordingly and the contract shall be mod- ified in writing to reflect such adjustment. (c) Failure to agree on a reduction shall be a dispute concerning a question of fact within the meaning of the "Disputes" clause of this contract. (d) The Contractor agrees to Insert the substance of paragraphs (a), (b), and (d) of this clause In each subcontract hereunder that exceeds $100,000. [Rev. No. 3, 1/31/61; Rev. No. 12, 11/26/62.] 46. AUDIT-PRICE ADJUSTMENTS (ASPR 7-104.41) (Nov. 1962) (a) This clause shall become operative only with respect to any change or other modification made pursuant to one or more provisions of this con- tract which Involves a price adjustment In excess of $100,000, unless the price adjustment is based on adequate price competition, established catalog or market prices of commercial Items sold in sub- stantial quantities to the general public, or prices set by law or regulation. (b) For purposes of verifying that cost or pric- ing data submitted in conjunction with a contract change or other modification Involving an amount in excess of $100,000 are accurate, complete, and current, the Contracting Officer, the Comptroller General of the United States, or any authorized rep- resentatives, shall-until the expiration of three years from the date of final payment under this contract-have the right to examine those books, records, documents and other supporting data which will permit adequate evaluation of the cost or pricing data submitted, along with the compu- tations and projections used therein, which were available to the Contractor as of the date of execu- tion of the Contractor's Certificate of Current Cost or Pricing Data. (c) The Contractor agrees to insert the substance of this clause including this paragraph (c) in all subcontracts hereunder in excess of $100,000 unless the price Is based on adequate price competition, established catalog or market prices of commercial Items sold In substantial quantities to the general public, or prices set by law or regulation. 47. INSPECTION AND AUDIT (AFPI 7-4023) (July 1948) (a) The Contractor agrees that its books and records and Its plants, or such part thereof as may be engaged in the performance of this contract, shall at all reasonable times be subject to inspec- tion and audit by any authorized representative of the Contracting Officer. (b) The Contractor shall cause a like provision to be Included in all subcontracts hereunder. 48. ALTERATIONS IN CONTRACT (ASPR 7-105.1) The following alterations have been made in the provisions of this contract: Approved For Release 2001/04/20 : CIA-RDP68B00307R000100190014-9