R&D MASTER TYPE CONTRACT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-03172A000300020004-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 42
• Document Creation Date: December 22, 2016
• Document Release Date: February 14, 2012
• Sequence Number: 4
• Publication Date: July 1, 1955
• Content Type: REPORT

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Title of Article
I N D E X
R & D MASTER TYPE CONTRACT
Article No. -page-N-0--
Reporting of Royalties . . . . . . . . . . . 19 . . . . . . . . . . 22
Reproduction and Use of Technical Data . . . 18 . . . . . . . . . . 22
Scope of the Subject Work. . . . . . . . . . 2 . . . . . . . . . . 1
Security . . . . . . . . . . . . . . . . 20 . . . . . . . . . . 21
Shipments . . . . . . . . . . . . . . . . . 9 . . . . . . . . . . 12
Small Business Concerns, Utilization of. . 13 . . . . . . . . . . 16
Statement of Costs . . . . . . . . . . . . . 5 (b) & (d). . . . . 3 & 4
Subcontracts . . . . . . . . . . . . . . . . 12 . . . . . . . . . . 15
Superseding Specifications . . . . . . . . . 8 . . . . . . . . . . 12
Termination . . . 35 . . . . . . . . . . 29
Vouchering . 5 (b)* . . . . . . . . 3
Walsh-Healey Public Contracts Act . . . . . 24 . . . . . . . . . . 26
July 1955
CONFIDENTIAL
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I.p DEX
R & D MASTER TYPE CONTRACT
Title of Article
Accounting System . . . . . . . . . . .
Aliens, Employment of . . . . . . . . .
Allowable Cost . . . . . . . . . . . .
Alterations . . . . . . . . . . . . . .
Assignment of Rights. . . . . . . . . .
Audit . . . . . . . . . . . . . . . . .
Authorization and Consent . . . . . . .
Buy American . . . . . . . . . . . . . .
Changes . . . . . . . . . . . . .
Convict Labor . . . . . . . . . . . . .
Copyrights . . . . . . . . . . . . . . .
Costs, Allowable. . . . . . . . . . . ?
Costs, Limitation of.
Costs, Statement of
Covenant Against Contingent Fees. .
Defects, Correction of. . . . . . . . .
Definitions . . . . . . . . . . . .
Delay in Delivery of Data . . . . . .
Delays, Excusable . . . . . . . . .
Disputes . . . . . . . . . . . . . .
Eight-Hour Law. . . . . . . . . . . .
Fixed Fee . . . . . . . . . . . . . .
Government Property . . . . . . . .
Gratuities . . . . . . . . . . . . .
Inspection . . . . . . . . . . .
Insurance-Liability to Third Persons . .
Invoicing . . . . . . . . . . . . . . .
Labor, Convict . . . . . . . . . . . . .
Labor Disputes, Notice to the Govt. of.
Limitation of Cost. . . . . . . . . . .
Material Listing . . . . . . ?
Non-Discrimination In Employment. .
Officials Not to Benefit. . . . . .
Patent Applications, Filing of. . . . .
Patent Infringement, Notice and
Assistance Regarding . . . . . . .
Patent Rights . . . . . . . . . . . ? .
Payment . . . . . . . . . . . . . . . .
Property. Government . . . . . . . . .
Records . . . . . . . . . . . . . . . .
Release . . . . . . . . . . . . . . . .
July 1955
(i)
?
ILLEGIB
Article No. Page No.
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. 5A (a) (1) . . . .
5
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. 32 . . . . . .
28
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. 5 (a) . . . . . . . .
3
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. 36 . . . . . . . . . . .
30
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? 31 ? ? ? ? ? ? ? . .
28
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. 5 (d) . . . . . . . . . .
3
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. 15 . . ? . . ? ? ? ? . .
16
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. 29 . . . . . . . . . . .
27
3
2
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. 27 . . . . . . . . . . .
26
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. 33 . . . . . . . . . . .
28
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? 5 (a). . . . . . . . . .
3
4 . . . . . . . . . .
2
5 (b) & (d). . . . . . .
3
. 22 . . . . . . . . . . .
25
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. 11 . ? ? ? ? ? ? ?
13
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1
1
. 10 . ? ? ? ? . . .
13
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. 30 . . ? . . . . . . .
27
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. 21 . . . . . . . . . . .
24
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. 23 . . . . . . . . . .
25
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. 5 (a). . . . . . . . .
3
. 6 . ? ? ? ? ? ? ? . ?
7
. 34 . . . . . . . . ... .
29
. 11 . . . . . . . . . . .
13
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. 7 . . . . . . . . . . .
11
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. 5 (b) . . . . . . . .
3
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. 27 . . . . .. . . . . . .
26
. 25 . . . . . . . . . . .
26
. 4 ? ? ? . . . . . . .
2
? 5 (e) ? . . . . . . . . .
4
. 26 . . . . . . . . . . .
26
. 28 . . . . . . . . . . .
26
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. 16 . . . . . . . . . . .
16
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. 14 . . . . . . . . . . .
16
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. 17 . . ? . ? . . .
17
. 5 (c) . . . . . . . . .
3
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. 6 . . . ? ? ? . . .
7
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. 5A . . . . . . . . . . .
5
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. 5 (f) . . . . . . . . . .
4
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undffr t 25X1
ha :ng :t$ prlnc,Ap&l p ace tnesS et 25X1
I f..?113
Agreement made this lit day of ;pr. 1954 between the United States
of America (hereinafter called "the Government") represented by the Contracting
Officer executing this contract and 25X1
(hare ;t ft*r ct .1e& "the cuntrrctcr*).
WHEREAS, the Contractor maintains facilities for research and development,
and has available the services of qualified personnel; and,
WHEREAS, the Government desires the Contractor to conduct certain research
and development work and construct whatever equipment or articles may be
hereinafter specified; and,
WHEREAS, the Contractor is willing to provide said facilities and qualified
personnel and undertake such work on a cost-plus-a-fixed-fee basis as hereinafter
specified;
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
"Contracting Officer" refers to the present Contracting Officer and his
successors in office. "Director" refers to the present Director of the Agency
and his successors in office. "Authorized Representative" refers to any
person designated in writing as such by the Contracting Officer or the
Director, and such person can act hereunder only in the limited respects and
to the extent specified in provisions of this contract wherein the term
"Authorized Representative" is specifically used.
The Contractor shall supply the necessary qualified personnel, facilities,
and materials, and shall use its best efforts to conduct the work specified
in each Task Order established hereunder in accordance with the specifications,
schedules, and drawings stated in said Task Orders. The Contractor shall
cooperate in consultation and otherwise as may be practicable with the
Contracting Officer or his authorized representative upon the request of
either. Monthly progress reports showing expenditures of funds, funds
committed, and funds remaining, as well as an outline of the work accomplished
under each Task Order, shall be furnished the Contracting Officer. Technical
Reports, prepared in the manner normally practiced by the Contractor, shall
be furnished the Contracting Officer at such intervals as may be indicated by
the Task Order to which the report pertains. In addition, the Contractor.
shall prepare specifications, drawings on reproducible masters, and shall supply
full information concerning the components, devices, apparatus and methods as
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IAL
provided for under each Task Order or as directed by the Contracting Officer or
his designee and shall deliver them, together with all models developed
thereunder, to the Contracting Officer or his designee upon their request. The
Contractor shall maintain records in which descriptions and illustrations of
any inventions made in this work shall be entered as they are made, with
appropriate dates, signatures, and witnesses.
ARTICLE 3. CHANGES.
The Contracting Officer may at any time, by a written order, make changes
in or additions to the drawings and specifications, issue addtional instructions,
require additional work within the general scope of the Tal5k Orders issued under
this contract or change the place of delivery, method of shipment, or the amount
of Government-Furnished property. If any such change causes an increase or decrease
in the estimated cost of, or the time required for performance of the Task Order,
or otherwise affects any other provision of the Task Order, an equitable adjust-
ment shall be made (i) in the estimated cost or delivery schedule, or both, (ii)
in the amount of any fixed fee to be paid the contractor, and (iii) in such
other provisions of the Task Order as may be so affected, and the Task Order
shall be modified in writing accordingly. Any claim by the contractor for
adjustment under this clause must be asserted within sixty (60) days from the
date of receipt by the contractor of the notification of change; Provided,
however, that the Contracting Officer, if he decides that the facts justify
such action, may receive and act upon any such claim asserted at any time prior
to final payment under the Task Order. Failure to agree to any adjustment shall
be a dispute concerning a question of fact within the meaning of the clause of
this contract entitled "Disputes". However, nothing in this clause shall excuse
the Contractor from proceeding with the Task Order as changed.
ARTICLE )+.. LIMITATION OF COST.
(a) It is estimated that the total cost to the Government exclusive
of any fixed fee, for the performance of any Task Order issued under this
contract will not exceed the estimated cost set forth in such Task Order,
and the Contractor agrees to use its best efforts to perform the work
specified in each Task Order and all obligations under this contract within
such estimated cost. If at any time the Contractor has reason to believe
that the costs which it expects to incur in the performance of any Task
Order in the next succeeding thirty (30) days, when added to all costs
previously incurred, will exceed eighty-five percent (85%) of the estimated
cost then set forth in the Task Order, or if at any time, the Contractor
has reason to believe that the total cost to the Government, exclusive of
any fixed fee, for the performance of any Task Order will be substantially
greater or less than the then estimated cost thereof, the Contractor shall
notify the Contracting Officer in writing to that effect, giving its
revised estimate of such total cost for the performance of the Task Order.
RD TASK
January 1956,
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(b) The Government shall not be obligated to reimburse the Contractor
for costs incurred in excess of the estimated cost set forth in the Task
Order, and the Contractor shall not be obligated to continue performance under
the Task Order or to incur costs in excess of the estimated cost set forth in
the Task Order, unless and until the Contracting Officer shall have notified
the Contractor in writing that such estimated cost has been increased
and shall have specified in such notice a revised estimated cost which shall
thereupon constitute the estimated cost of performance of the Task Order.
When and to the extent that the estimated cost set forth in the Task Order
has been increased, any costs incurred by the Contractor in excess of such
estimated cost prior to the increase in estimated cost shall be allowable
to the same extent as if such costs had been incurred after such increase
in estimated cost.
ARTICLE 5. ALLOWABLE COST, FIXED FEE, AND PAYMENT.
(a) For the performance of Task Orders issued under this contract, the
Government shall pay to the Contractor the cost thereof determined by the
Contracting Officer to be allowable in accordance with Part 2 of Section XV
of the Armed Services Procurement Regulation as in effect on the date of this
contract and the Schedule (hereinafter referred to as "Allowable Cost")..
plus such fixed fee, if any, as may be provided for in the Schedule.
(b) Once each month (or at more frequent intervals, if approved by
the Contracting Officer) the Contractor may submit to an authorized representa-
tive of the Contracting Officer, in such form and reasonable detail as such
representative may require, an invoice or public voucher supported by a
statement of cost incurred by the Contractor in the performance of this
contract and claimed to constitute Allowable Cost. Each statement of cost
shall be certified by an officer or other responsible official of the
Contractor authorized by it to certify such statements.
(c) As promptly as may be practicable after receipt of each invoice or
voucher and statement of cost, the Government shall, except as hereinafter
provided and subject to the provisions of paragraph (d) below, make payment
thereon as approved by the Contracting Officer. After payment of eighty-
five percent (85%) of the fixed fee set forth in the Schedule, as from time
to time amended, further payment on account of the fixed fee shall be with-
held until a reserve of either (i) fifteen percent (15%) of the total fixed
fee or (ii) $100,000, whichever amount is less, shall have been set aside,
such reserve or the balance thereof to be retained until the execution and
delivery of a release by the Cont.nactor as provided in paragraph (f) hereof.
(d) At any time or times prior to final payment under any Task Order of
this contract the Contracting Officer may cause to be made such audit of
the invoices or vouchers and statements of cost as shall be deemed necessary.
Each payment theretofore made shall be subject to reduction to the extent of
RD TASK
July 1955
I ~J L
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11 tJ I I L i _ , . , ... %,-
amounts6included in a related invoice or voucher an statement of cost which
are found by the Contracting Officer on the basis of such audit not to constitute
Allowable Cost, and shall also be subject to reduction for overpayments or
to increase for underpayments on preceding invoices or vouchers. On receipt
of the voucher or invoice designated by the Contractor as the " completion
voucher" or "completion invoice" and statement of cost, which shall be submitted
by the Contractor as promptly as may be practicable following completion of
the work under a Task Order but in no event later than one (1) year (or such
longer period as the Contracting Officer may, in his discretion, approve in
writing) from the date of such completion, and following compliance by the
Contractor with all provisions of this contract (including, without limitation,
provisions relating to patents, royalties, and the provisions of paragraphs (e)
(f) and (g) of this clause), the Government shall as promptly as may be practic-
able pay any balance of Allowable Cost.
(e) The Contractor shall furnish with the completion voucher as provided
in (d) above and as a condition precedent to final payment under the Task Order
a complete listing of all material, both expendable and non-expendable purchased
during the performance of the Task Order.
(f) The contractor and each assignee, if any, under an assignment entered
into under this contract and in effect at the time of final payment under any
Task Order shall execute and deliver at the time of and as a condition precedent
to final payment under the Task Order, a release discharging the Government,
its officers, agents and employees of and from all liabilities, obligations,
and claims arising out of or under such Task Order, subject only to the following
exceptions:
(1) Specified claims in stated amounts or in estimated
amounts where the amounts are not susceptible of
exact statement by the Contractor.
(2) Claims, together with reasonable expenses incidental
thereto, based upon the liabilities of the Contractor
to third parties arising out of the performance of
the Task Order, which are not known to the Contractor
on the date of the execution of the release, and of
which the Contractor gives notice in writing to the
Contracting Officer not more than six (6) years
after the date of the release or the date of any
notice to the Contractor that the Government is
prepared to make final payment, whichever is earlier.
(3) Claims for reimbursement of costs (other than expenses
of the Contractor by reason of its indemnification of
the Government against patent liability), including
reasonable expenses incidental thereto, incurred by the
Contractor under the provisions of the contract relating
to patents.
(g) The Contractor agrees that any refunds, rebates or credits (including
any interest thereon) accruing to or received by the Contractor or any assignee
which arise out of the performance of any Task Order and on account of which
the Contractor has received reimbursement shall be paid by the Contractor to
the Government. The Contractor and each assignee, if any, under an assignment
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July 1955
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entered into under this contract and in effect at the time of final payment
under any Task Order shall execute and deliver at the time of and as a
condition precedent to final payment under the Task Order, an assignment to
the Government of refunds, rebates or credits (including any interest thereon)
arising out of the performance of the Task Order, in form and substance
satisfactory to the Contracting Officer. Reasonable expenses incurred by the
Contractor for the purpose of securing any such refunds, rebates or credits
shall constitute Allowable Cost when approved by the Contracting Officer.
(h) Any cost incurred by the Contractor under the terms of this contract
which would constitute Allowable Cost under the provisions of this clause
shall be included in determining the amount payable under the Task Order,
notwithstanding any provisions contained in the specifications or other
documents incorporated in the Task Order by reference, designating services
to be performed or materials to be furnished by the Contractor at its
expense or without cost to the Government.
(i) Payment of the fixed fee shall be made to the Contractor as provided
in the Schedule subject, however, to the withholding provisions of paragraph (c)
hereof.
ARTICLE 5A. RECORDS.
(a) (1) The contractor agrees to maintain books, records, documents
and other evidence pertaining to the costs and expenses of this
contract (hereinafter collectively called the "records") to the
extent and in such detail as will properly reflect all net costs,
direct and indirect, of labor, materials, equipment, supplies and
services, and other costs and expenses of whatever nature for which
reimbursement is claimed under the provisions of this contract.
The Contractor's accounting procedures and practices shall be subject
to the approval of the Contracting Officer; provided, however, that
no material change will be required to be made in the Contractor's
accounting procedures and practices if they conform to generally
accepted accounting practices and if the costs properly applicable
to this contract are readily ascertainable therefrom.
(2) The contractor agrees to make available at the office
of the Contractor at all reasonable times during the period set
forth in subparagraph (4+) below any of the records for inspection,
audit or reproduction by the Comptroller of the contracting Government
Agency or his authorized representatives.
(3) In the event the Comptroller of the contracting Government
Agency or his authorized representative determines that his audit of
the amounts reimbursed under this contract as transportation charges
will be made at a place other than the office of the Contractor, the
Contractor agrees to deliver, with the reimbursement voucher covering
such charges or as may be otherwise specified within two years after
RD TASK
July 1955
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reimbursement of charges covered by any such voucher, to such representative
as may be designated for that purpose through the Contracting Officer
such documentary evidence in support of transportation costs as may be
required by the Comptroller of the contracting Government Agency or
his authorized representatives.
(4) Except for documentary evidence delivered to the Government
pursuant to subparagraph (3) above, the Contractor shall preserve and
make available its records for a period of six years (unless a longer
period of time is provided by applicable statute) from the date of
the voucher or invoice submitted by the Contractor after the completion
of the work under the contract and designated by the Contractor as the
"completion voucher" or "completion invoice" or, in the event this
contract has been completely terminated, from the date of the
termination settlement agreement; provided, however, that records
which relate to (A) appeals under the clause of this contract entitled
"Disputes,," (D) litigation or the settlement of claims arising out of
the performance of this contract, or (C) costs or expenses of the
contract as to which exception has been taken by the Comptroller of
the contracting Government Agency or his authorized representatives,
shall be retained by the Contractor until such appeals, litigation,
claims or exceptions have been disposed of, but in no event for less
than the six-year period mentioned above.
(5) Except for documentary evidence delivered pursuant to
subparagraph (3) above, and the records described in the proviso of
subparagraph (4) above, the Contractor may in fulfillment of its
obligation to retain its records as required by this clause substitute
photographs, microphotographs or other authentic reproductions of such
records, after the expiration of two years following the last day of
the month of reimbursement to the Contractor of the invoice or voucher
to which such records relate, unless a shorter period is authorized
by the Contracting Officer with the concurrence of the Comptroller
of the contracting Government Agency or his authorized representative.
(6) The provisions of this paragraph (a), including this
subparagraph,(6), shall be applicable to and included in each
subcontract hereunder which is on a cost, cost-plus?a-fixed-fee, time-
and-material or labor-hour basis.
(b) The contractor further agrees to include in each of his subcontracts
hereunder, other than those set forth in subparagraph (a) (6) above, a provision
to the effect that the subcontractor agrees that the Comptroller of the
contracting Government Agency or his authorized representatives,, shall, until
the expiration of three years after final payment under the subcontract,
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have access to and the right to examine any directly pertinent books, documents,
papers, and records of such subcontractor involving transactions related tc the
subcontract. The term "subcontract," as used in this paragraph (b) only,
excludes (i) purchase orders not exceeding ",,1,000 and (ii) subcontracts or
purchase orders for public utility services at rates established for uniform
applicability to the general public.
ARTICLE 6 GOVERNI1 ITT PROPERTY
(a) The Government shall deliver to the Contractor, for use in con-
nection with and under the terms of this contract, the property described
in the Schedule or specifications, together with such related data and
information as the Contractor may request and as may reasonably be re-
quired for the intended use of such property (hereinafter referred to as
"Government-furnished Property"). The delivery or performance dates
for the supplies or services to be furnished by the Contractor under this con-
tract are based upon the expectation that Government-furnished Property
suitable for use will be delivered to the Contractor at the times stated
in the Schedule or, if not so stated, in sufficient time to enable the
Contractor to meet such delivery or performance dates. In the event that
Government-furnished Property is not delivered to the Contractor by such
time or times, the Contracting Officer shall, upon timely written request
made by the Contractor, make a determination of the delay occasioned the
Contractor and shall equitably adjust the estimated cost, fixed fee, or
delivery or performance dates, or all of them, and any other contractual
provisions affected by such delay, in accordance with tip` procedures pro-
vided for in the clause of this contract entitled "Chances." In the event
that Government-furnished Property is received by the Contractor in a con-
dition not suitable for the intended use, the Contractor shall, upon re-
ceipt thereof notify the Contracting Officer of such fact any., as directed
by the Contracting Officer, either (i) return such property at the Govern-
ment's expense or otherwise dispose of the property or (ii) effect repairs
or modifications. Upon completion of (i) or (ii) above, the Contracting
Officer upon written request of the Contractor shall equitably adjust the
estimated cost, fixed fee, or delivery or performance dates, or all of
them, and any other contractual provision. affected by the return or dis-
position, or the repair or modification, in accordance with the procedures
provided for in the clause of this contract entitled "Changes." The fore-
going 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) Title to all property furnished by the Government shall remain in
the Government. Title to all property purchased by the Contractor, for
the cost of which the Contractor is entitled to be reimbursed as a direct
item of cost under this contract, shall pass to and vest in the Government
upon delivery of such property by the vendor. Title to other property, the
cost of which is reimbursable to the Contractor under this contract,
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RD TASK --5--777'
July 1955
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shall pass to and vest in the Government upon (i) issuance for use of such prop-
erty in the performance of this contract, or (ii) commencement of process-
ing or use of such property in the performance of this contract, or (iii)
reimbursement of the cost thereof by the Government, whichever first
occurs. All Government-furnished Property, together with all property
acquired by the Contractor title to which vests in the Government under
this paragraph, are subject to the provisions of this clause and are herein-
after collectively referred to as "Government Property."
(c) Title to the Government Property shall not be affected by the incor-
poration or attachment thereof to any property not owned by the Govern-
ment, nor shall such Government Property, or any part thereof, be or be-
come a fixture or lose its identity as personalty by reason of affixation
to any realty. The Contractor shall maintain adequate property control
records of the Government Property and shall identify the Government
Property as such in accordance with the requirements of the "Manual for
Control of Government Property in Possession of Contractors" (Appen-
dix B, Armed Services Procurement Regulation), as in effect on the date
of the contract, which Manual is hereby incorporated by reference and
made a part of this contract.
(d) The Government Property provided or furnidhed pursuant to the
terms of this contract shall, unless otherwise provided herein, be used only
for the performance of this contract.
(e) The contractor shall maintain and administer, in accordance with
sound industrial practice, a program for the maintenance, repair, protec-
tion and preservation of Government Property so as to assure its full
availability and usefulness for the performance of this contract. The
Contractor shall take all reasonable steps to comply with all appropriate
directions or instructions which the Contracting Officer may prescribe
as reasonably necessary for the protection of Government Property.
(f) (i) The Contractor shall not be liable for any loss of or damage
to the Government Property, or for expenses incidental to such loss or
damage, except that the Contractor shall be responsible for any such loss
or damage (including expenses incidental thereto) (A) which results from
willful misconduct or lack of good faith on the part of any of the Con-
tractor's directors or officers, or on the part of any of its mangers, super-
intendents, or other equivalent representatives, who has supervision or
direction of (I) all or substantially all of the Contractor's business, or
(II) all or substantially all of the Contractor's operations at any one
plant or separate location in which this contract is being performed, or
(III) a separate and complete major industrial operation in connection
with the performance of this contract; or (B) which results from a failure
on the part of the Contractor, due to the willful misconduct or lack of good
faith on the part of any of its directors, officers, or other representatives
mentioned in subparagraph (A) above, (I) to maintain and administer, in
accordance with sound industrial practice, the program for maintenance,
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repair, protection and preservation of Government Property as required
by paragraph (e) hereof, or (II) to take all reasonable steps to comply with
any appropriate written directions of the Contracting Officer under para-
graph (e) hereof; or (C) for which the Contractor is otherwise respon-
sible under the express terms of the clause or clauses designated in the
Schedule; or (D) which results from a risk expressly required to be insured
under this contract, but only to the extent of the insurance so required to
be procured and maintained, or to the extent of insurance actually pro-
cured and maintained, whichever is greater; or (E) which results from a
risk which is in fact covered by insurance or for which the Contractor is
otherwise reimbursed, but only to the extent of such insurance or reim-
bursement; provided that, if more than one of the above exceptions shall
be applicable in any case, the Contractor's liability under any one exception
shall not be limited by any other exception. This clause shall not be
construed as relieving a subcontractor from liability for loss or destruction
of or damage to Government Property in its possession or control, except
to the extent that the subcontract, with the prior approval of the Con-
tracting Officer, may provide for the relief of the subcontractor from such
liability. In the absence of such approval, the subcontract shall contain
appropriate provisions requiring the return of all Government Property
in as good condition as when received, except for reasonable wear and tear
or for the utilization of the property in accordance with the provisions
of the prime contract.
(ii) The Contractor shall not be reimbursed for, and shall not include
as an item of overhead, the cost of insurance, or any provision for a
reserve, covering the risk of loss of or damage to the Government Property,
except to the extent that the Government may have required the Con-
tractor to carry such insurance under any other provision of this contract.
(iii) Upon the happening of loss or destruction of or damage to the
Government Property, the Contractor shall notify the Contracting Officer
thereof, and shall communicate with the Loss and Salvage Organization,
if any, now or hereafter designated by the Contracting Officer, and with
the assistance of the Loss and Salvage Organization so designated (unless
the Contracting Officer has designated that no such organization be em-
ployed), shall take all reasonable steps to protect the Government property
from further damage, separate the damaged and undamaged Government
property, put all the Government property in the best possible order, and
furnish to the Contracting Officer a statement of (A) the lost, destroyed
and damaged Government Property, (B) the time and origin of the loss,
destruction or damage, (C) all known interests in commingled property
of which the Government Property is a part, and (D) the insurance, if
any, covering any part of or interest in such commingled property. The
Contractor shall make repairs and renovations of the damaged Government
Property or take such other action, as the Contracting Officer directs.
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(iv) In the event the Contractor is indemnified, reimbursed, or otherwise
compensated for any loss or destruction of or damage to the Government
Property, it shall use the proceeds to repair, renovate or replace the
Government Property involved, or shall credit such proceeds against the
cost of the work covered by the contract, or shall otherwise reimburse the
Government, as directed by the Contracting Officer. The Contractor shall
do nothing to prejudice the Government's right to recover against third
parties for any such loss, destruction or damage and, upon the request
of the Contracting Officer, shall, at the Government's expense, furnish
to the Government all reasonable assistance and cooperation (including
the prosecution of suit and the execution of instruments of assignment
in favor of the Government) in obtaining recovery. In addition, where
the subcontractor has not been relieved from liability for any loss or de-
struction of or damage to Government Property, the Contractor shall
enforce the liability of the subcontractor for such loss or destruction of
or damage to the Government Property for the benefit of the Government.
(g) The Government shall at all reasonable times have access to the
premises where any of the Government Property is located.
(h) The Government Property shall remain in the possession of the
Contractor for such period of time as is required for the performance
of this contract unless the Contracting officer determines that the.interests
of the Government require removal of such property. In such case the
Contractor shall promptly take such action as the Contracting Officer
may direct with respect to the removal and shipping of Government
Property. In any such instance, the contract may be amended to accom-
plish an equitable adjustment in the terms and provisions thereof.
(i) Upon the completion of this contract, or at such earlier date as
may be fixed by the Contracting Officer, the Contractor shall submit to
the Contracting Officer in a form acceptable to him, inventory schedules
covering all items of the Government Property not consumed in the per-
formance of this contract (including any resulting scrap), or not there-
tofore delivered to the Government, and shall deliver or make such other
disposal of the Government Property as may be directed by the Contract-
ing Officer. Recoverable scrap shall be reported in accordance with a
procedure and in such form as the Contracting Officer may direct. The
net proceeds of any such disposal approved by the Contracting Officer
shall be credited to the cost of the work covered by the contract or shall
be paid in such manner as the Contracting Officer may direct.
(j) Unless otherwise provided herein, the Government shall not be
under any duty or obligation to restore or rehabilitate, or to pay the costs
of the restoration or rehabilitation of the Contractor's plant or any portion
thereof which is affected by the removal of any Government Property.
(k) Directions of the Contracting Officer and communications of the
Contractor issued pursuant to this clause shall be in writing.
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ARTICLE 7 INSURANCE=LIABILITY TO THIRD PERSONS
(a) The contractor shall procure and thereafter maintain workmen's
compensation, employer's liability, comprehensive general liability
(bodily injury) and comprehensive automobile liability (bodily injury
and property damage) insurance, with respect to performance under this
contract, and such other insurance as the Contracting Officer may from
time to time require with respect to performance under this contract;
provided, that the Contractor in fulfillment of its obligation to procure
workmen's compensation insurance may, with the approval of the Contracting
Officer and pursuant to statutory authority, maintain a self-insurance
program. All insurance required pursuant to the provisions of this para-
graph shall be in such form, in such amounts, and for such periods of time,
as the Contracting Officer may from time to time require or approve, and
with insurers approved by the Contracting Officer.
(b) The Contractor agrees, to the extent and in the manner required
by the Contracting Officer, to submit for the approval of the Contracting
Officer any other insurance maintained by the Contractor in connection with
the performance of this contract and for which the Contractor seeks reim-
bursement hereunder.
(c) The contractor shall be reimbursed: (i) for the'portion allocable
to this contract of the reasonable cost of insurance as required or approved
pursuant to the provisions of this clause, and (ii) for liabilities to third
persons for loss of or damage to property (other than property (A) owned,
occupies or used by the Contractor or rented to the Contractor or (B) in
the care, custody, or control of the Contractor), or for death or bodily
injury, not compensated by insurance or otherwise, arising out of the
performance of this contract, whether or not ceeaee.by the negligence of the
Contractor, its agents, servants or employees, provided such liabilities are
represented by final judgments or by settlements approved in writing by
the Government, and expenses incidental to such liabilities, except lia-
bilities (I) for which the Contractor is otherwise responsible under the
express terms of the clause or clauses, if any, specified in the Schedule, or
(II) with respect to which the Contractor has failed to insure as required
or maintain insurance as approved by the Contracting Officer or (III) which
results from willful misconduct or lack of good faith on the part of any of
the Contractor's directors or officers, or on the part of any of its managers,
superintendents, or other equivalent representatives, who has supervision
or direction of (1) all or substantially all of the Contractor's business
or (2) all or substantially all of the Contractor's operations at any one
plant or separate location in which this contract is being performed, or
(3) a separate and complete. major industrial operation in connection with
the performance of this contract. The foregoing. shall, not restrict the
right of the Contractor to be reimbursed for the cost of'insurance main-
tained by the Contractor in connection with the performance of this con-
tract, other than insurance required. to be submitted for approval
or required to be procured and maintained pursuant to the provisions of
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this clause, provided such cost would constitute Allowable Cost under the
clause of this contract entitled "Allowable Cost, Fixed Fee and Payment."
(d) The Contractor shall give the Government or its representatives
immediate notice of any suit or action filed, or prompt notice of any claim
made, against the Contractor arising out of the performance of this contract,
the cost and expense of which may be reimbursable to the Contractor under
the provisions of this contract, and the risk of which is then uninsured
or in which the amount claimed exceeds the amount of coverage. The Con-
tractor shall furnish immediately to the Government copies of all pertinent
papers received by the Contractor. If the amount of the liability claimed
exceeds the amount of coverage, the Contractor shall authorize representa-
tives of the Government to collaborate with counsel for the insurance
carrier, if any, in settling or defending such claim. If the liability
is not insured or covered by bond, the Contractor shall, if required by
the Government, authorize representatives of the Government to settle or
defend any such claim and to represent the Contractor in or take charge of
any litigation in connection therewith: Provided, however, That the
Contractor may, at its own expense, be associated with the representatives
of the Government in the settlement or defense of any such claim or
litigation..
ARTICLE 8 SUPERSEDING SPECIFICATIONS
All references in any Government specification.: inc?rpcn bed herein
to other Government specifications shall be deemed to include all specifica-
tions supplementary to or superseding the specifications so referred to, to
the extent that such supplementary or superseding specifications are in
effect at the date of Contractor's latest quotation, if the Contractor was
furnished or otherwise notified of the existence of such supplementary or
superseding specification at the time of said quotation.
ARTICLE 9 SHIPMENTS
(a) Mode of Shipment. Unless otherwise provided in this contract or
unless the Contracting Officer, acting under the "Changes" clause hereof,
directs in writing otherwise, all supplies to be furnished under this con-
tract shall be delivered to the Government f.o.b. destination at which such
supplies are to be finally inspected.
(b) F. 0. B. Destination. Whenever it is provided in this contract
that supplies shall be delivered f.o.b. specified destinations, such supplies
shall be shipped direct by the Contractor to the specified destinations on
commercial bills of lading.
(c) Shipping Instructions. If not otherwise provided herein, names of
consignees of all supplies to be delivered by the Contractor hereunder will
be furnished to the Contractor in writing by the Contracting Officer at a
later date. Request therefor shall be made to the Contracting Officer not
later than thirty (30) days prior to the date on which any of the articles
are ready for shipment.
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ARTICLE 10 DELAY IN DELIVERY OF DATA
(a) It is understood that the efficient use by the Government of
the supplies called for hereunder requires that the data called for
hereunder be delivered not later than the time or respective times here-
in specified. If such data are not delivered at said time or times, the
Government may at its election, so long as such data remains undelivered,
unless the delay in delivery thereof arises out of causes beyond the con-
trol and without the fault or negligence of the Contractor within the
meaning of the clause hereof entitled "Default," withhold payment to the
Contractor for any of the amounts then due, refuse approval of the Con-
tractor's vouchers and refuse to accept further deliveries hereunder from-
the Contractor or take any other action authorized by law or regulation now
or hereafter in effect including termination of the contract for default to
the extent and in the manner authorized by said clause, and may take any
or all of the foregoing actions separately or in combination.
(b) The provisions of this clause shall only be applicable to tech-
nical data, such as handbooks, service manuals, or other information nec-
essary for the proper maintenance or servicing of the end items called
for herein.
ARTICLE 11 INSPECTION AND CORRECTION OF DEFECTS
(a) All work under this contract shall be subject to inspection and
test by the Government, to the extent practicable at all reasonable times
and places including the period of performance, and in any event prior to
final acceptance. The Contractor shall provide and maintain an inspection
system acceptable to the Government covering the work hereunder. The
Government, through any authorized representative, may inspect the plant
or plants of the Contractor or of any of its subcontractors engaged in
the performance of this contract. If any inspection or test is made by
the Government on the premise of the Contractor or a subcontractor, the Con-
tractor shall provide and shall require subcontractors to provide all reason-
able facilities and assistance for the safety and convenience of the
Government inspectors in the performance of their duties. All inspections
and test by the Government shall be performed in such a manner as will not
unduly delay the work. Final inspection and acceptance by the Government
shall be made as promptly as practicable after delivery. The time and
place of delivery, final inspection, and acceptance shall be set forth in
the schedule.
(b) The Contractor warrants that the services rendered in the per-
formance of this contract will conform to the requirements of this contract
and to high professional standards in the field, and that any article
delivered to the Government under this contract will conform to the re-
quirements of this contract and will not be defective in material or work-
manship.
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(c) At any time during performance of this contract, but not
later than six (6) months (or such other period as may be provided in
the schedule) after final acceptance, the Government may require the
Contractor to remedy by correction or replacement as directed by the
Contracting Officer, any failure by the Contractor to comply with its
obligations under paragraph (b) hereof. Except as otherwise provided
in paragraph (d) hereof, the cost of any such replacement or correction
shall be included in "Allowable Cost" determined as provided in the clause
of this contract entitled "Allowable Cost, Fixed Fee and Payment," but no
additional fee shall be payable with respect thereto. Corrected articles
shall not be tendered again for acceptance unless the former tender and
the requirement of correction is disclosed. If the contractor fails to
proceed with reasonable promptness to perform such replacement or correction,
the Government (i) may by contract or otherwise perform such replacement
or correction and charge to the Contractor any increased cost occasioned
the Government thereby, or may reduce any fixed fee payable under this
contract (or require repayment of any fixed fee theretofore paid) in such
amount as may be equitable under the circumstances; or (ii) in the case of
articles not delivered, may require the delivery of such articles, and shall have
the right to reduce any fixed fee payable under this contract (or to require
repayment of any fixed fee theretofore paid) in such amount as may be equit-
able under the circumstances; or (iii) may terminate this contract for de-
fault as provided in the clause of this contract entitled "Termination."
Failure to agree on the amount of any such increased cost to be charged to
the Contractor or to such reduction in, or repayment of, the fixed fee shall
be a dispute concerning a question of fact within the meaning of the clause
of this contract entitled "Disputes."
(d) Notwithstanding the provisions of paragraph (c) hereof, the
Government may at any time require the contractor to remedy by correction
or replacement, without cost to the Government, any failure by the Con-
tractor to comply with its obligations under paragraph (b) hereof, if such
failure is due to fraud, lack of good faith, or willful misconduct on the
part of any of the contractor's directors or officers, or on the part of any
of its manages, superintendents, or other equivalent representatives, who has
supervision or direction of (i) all or substantially all of the Contractor's
business; or (ii) all or substantially all of the Contractor's operations at
any one plant or separate location in which this contract is being performed;
or (iii) a separate and complete major industrial operation in connection with
the performance on this contract. Fraud, lack of good faith, or willful
misconduct on the part of any of such supervisory personnel shall be deemed
to include the selection of individual employees or the retention of employees
after any of such supervisory personnel has reason to believe that such
employees are habitually careless or otherwise unqualified.
(e) Corrected articles tendered as replacements shall be subject to the
provisions of this clause in the same manner and to the same extent as supplies
originally delivered under this contract.
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(f) The contractor shall make its records of all inspection work
available to the Government dtring the performance of this contract and
for such longer period as may be specified in this contract.
(g) Except as otherwise provided in the schedule, the contractor's
obligation to correct. or replace Government-furnished property (which is
property in the possession of or acquired directly by the Government and
delivered or otherwise made available to the contractor) shall be governed
by the provisions of the clause of this contract entitled "Government
Property."
ARTICLE 12 SUBCONTRACTS
(a) The Contractor shall give advance notification to the Contracting
Officer of any proposed subcontract hereunder which (i) is on a cost or
cost-plus-a-fixed-fee basis, or (ii) is on a fixed-price basis exceeding in
dollar amount either $25,000 or five percent (5%) of the total estimated cost
of this contract.
(b) The Contractor shall not, without the prior written consent of the
Contracting Officer, place any subcontract which (i) is on a cost or cost-plus-
a-fixed-fee basis, or (ii) is on a fixed-price basis exceeding in dollar
amount either $25,000 or five percent (5%) of the total estimated cost of
this contract, or (iii) provides for the fabrication, purchase, rental,
installation.or other acquisition, of any item of industrial facilities, or of'
special tooling having a value in excess of $1,000, or (iv) is on a time-and-
material or labor-hour basis or (v) involves research and development work.
The Contracting Officer'may, in his discretion, ratify in writing any such
subcontract; such action shall constitute the consent of the Contracting
Officer as required by this paragraph (b).
(c) The contractor-agrees that no subcontract placed under this contract
shall provide for payment on a cost-plus-a-percentage-of-cost basis.
(d) The Contracting Officer may, in his discretion, specifically
approve in writing.any of the provisions of a subcontract. However, such
approval or the consent of the Contracting Officer obtained as required by this
clause shall not be construed to constitute a, determination of the allowability
of any cost under this contract, unless such approval speeifiea]ly provides
that it constitutes a?determination of the allowability of such cost.
(e) The Contractor shall give the Contracting Officer immediate notice
in writing of any action or suit filed, and prompt notice of any claim made
against the Contractor by any subcontractor or vendor which, in the opinion
of the Contractor,'may result in litigation, related in any way to this
contract with respect to which the Contractor may be entitled to reimbursement
from the Government.
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(f) The Contracting Officer may approve all or any part of the Contractor's
purchasing system and from time to time rescind or reinstate such approval. Such
approval shall be deemed to fulfill the requirements for obtaining the Contract-
ing Officer's consent to subcontracts as prescribed in paragraph (b) above.
ARTICLE 13 UTILIZATION OF SMALL BUSINESS CONCERNS
(a) It is the policy of the Government as declared by the Congress to
bring about the greatest utilization of small business concerns which is
consistent with efficient production.
(b) The Contractor agrees to accomplish the maximum amount of sub-
contracting to small business concerns that the Contractor finds to be con-
sistent with the efficient performance of this contract.
ARTICLE 14 NOTICE AND ASSISTANCE REGARDING PATENT INFRINGEMENT
The provisions of this clause shall be applicable only if the amount of
this contract is in excess of $5,000.
(a) The contractor shall report to the Contracting Officer, promptly
and in reasonable written detail, each notice or claim of patent infringe-
ment based on the performance of this contract of which the Contractor has
knowledge.
(b) In the event of litigation against the Government on account of any
claim of patent infringement arising out of the performance of this contract
or out of the use of any supplies furnished or work or services performed
hereunder, the Contractor shall furnish to the Government, upon request, all
evidence and information in possession of the Contractor pertaining to such
litigation. Such evidence and information shall be furnished at the expense
of the Government except in those cases in which the Contractor has agreed
to indemnify the Government against the claim being asserted.
ARTICLE 15 AUTHORIZATION AND CONSENT
The Government hereby gives its authorization and consent for all use
and manufacture of any patented invention in the performance of this contract
or any part hereof or any amendment hereto or any subcontract hereunder
(including any lower-tier subcontract).
ARTICLE 16 FILING OF PATENT APPLICATIONS
(a) Before filing or causing to be filed a patent application disclosing
any subject matter of this contract, which subject matter is classified
"Secret" or higher, the Contractor shall, citing the thirty (30) day pro-
vision below, transmit the proposed application to the Contracting Officer
for determination whether, for reasons of national security, such applica-
tion should be placed under an order of secrecy or sealed in accordance
with the provisions of 35 U. S. Code 181-188 or the issuance of a patent
should be otherwise delayed under pertinent statutes or regulations; and
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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 application, the Contractor
may file the application.
(b) The Contractorshall'furnish to the Contracting 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 "Confidential," a copy of such application for
determination whether, for reasons of national security, such application
should be placed under an'order of secrecy or the issuance of a patent
should otherwise be delayed under pertinent statutes or regulations.
(c) In filing any patent application coming within the scope of this
clause, the Contractor shall observe all applicable security regulations
covering the transmission.of classified subject matter.
ARTICLE 17 PATENT RIGHTS
(a) As used in this clause, the following terms shall have the meanings
set forth below:
(i) The term "Subject Invention" means any invention improvement or
discovery (whether or not patentable) conceived or first actually reduced
to practice either (A) in the performance of the experimental, develop-
mental, or research work called for or'required under this contract, or (B)
in the performance of any experimental, developmental, or research work
relating to the'subject matter of this contract which was done upon an
understanding in writing that a contract would be awarded; provided that
the term "Subject Invention" 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.
(ii) The term "Technical Personnel" means any person employed by or
working under contract with the Contractor (other'than a subcontractor
whose responsibilities with respect to rights., accruing to the Government
in inventions arising under subcontracts are set forth in paragrapbs(g),
(h), and (i) of this clause) who, by reason of the nature of his duties in
connection with the performance of this contract, would reasonably be
expected to make inventions,
(111) The terms "subcontract" and "subcontractor" mean.any subcon-
tract or subcontractor. of the Contractor., and any lower-tier subcontract
or subcontractor under this contract.
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(b) The contractor agrees to and does hereby grant to the Government
an irrevocable, nonexclusive, nontransferable, and royalty-free license
to practice, and cause to be practiced by or for the United States Govern-
ment throughout the world, each Subject Invention in the manufacture,
use and disposition according to law, of any article or material, and in
the use of any method; provided, however, that with respect to (i) any
Subject Invention made by other than Technical Personnel, (ii) any Sub-
ject Invention conceived prior to, but first actually reduced to practice
in the course of, any of the experimental, developmental, or research work
specified in paragraph (a) (i) above, and (iii) the practice of any Subject
Invention in foreign countries, the obligation of the Contractor to grant
the aforesaid license and the other rights hereinafter provided in this
clause shall be limited to the extent of the Contractor'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. No license granted herein
shall convey any right to the Government to manufacture, have manu-
factured, or use any Subject Invention for the purpose of providing
services or supplies to the general public in competition with the Con-
tractor or the Contractor's commercial licensees in the licensed fields.
Nothing contained in this paragraph shall be deemed to grant any license
under any invention other than a Subject Invention.
(c) The contractor shall:
(i) Make a written disclosure to the Contracting Officer promptly after
conception or first actual reduction to practice of each Subject Invention
which reasonably appears to be patentable;
(ii) Certify to the Contracting officer not less often than every twelve
months, commencing with the date of this contract, whether or not any
Subject Inventions were conceived or first actually reduced to practice
during the preceding twelve months; and
(iii) Prior to final settlement of this contract, make a summary report
of all those Subject Inventions previously disclosed and of those Subject
Inventions conceived or first actually reduced to practice after the last
certification but prior to the summary report.
(d) The Contractor shall also, in connection with each Subject Inven-
tion referred to in paragraph (c) (i) above;
(i) Specify, at the time of making written disclosure, whether or not a
United States patent application claiming such Invention has been or will
be filed by or on behalf of the Contractor. If the Contractor specifies that
a United States patent application will be filed claiming such Invention,
the Contractor shall file or cause to be filed such application in due form
and time. If the Contractor decides not to file or cause to be filed said
application after having specified that it would file, the Contractor 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;
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(ii) In the event the Contractor specifies that it has not filed and will
not file (or having specified that it will file, thereafter notifies the Con-
tracting Officer to the contrary), (A) inform the Contracting Officer in
writing at the earliest practicable date of any publication of such Inven-
tion made by or known to the Contractor or, where applicable, of any con-
templated publication by the Contractor, stating the date and identity of
such publication or contemplated publication, and (B) convey to the Gov-
ernment the Contractor's erntiie right, title and interest in such Invention
by delivering to the Contracting Officer upon written request such duly
executed instruments (prepared by the Government) of assignment, ap-
plication and other papers as are deemed necessary to vest in the Govern-
ment the Contractor's right, title and interest aforesaid, and the right to
apply for and prosecute patent applications covering such Invention
throughout the world, subject, however, to the right reserved to the Con-
tractor in paragraph (e) to file foreign applications, and subject further
to the reservation of a nonexclusive and royalty-free license to the Con-
tractor (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 Con-
tractor's business to which the Subject Invention pertains;
(iii) Furnish promptly to the Contracting Officer on request an irrevo-
cable power of attorney to inspect and make copies of each United States
patent application filed by or on behalf of the Contractor covering any
Subject Invention;
(iv) In the event the Contractor, or those 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, so notify the
Contracting Officer not less than sixty days before the expiration of the
response period and, upon written request, deliver to the Contracting Offi-
cer such duly executed instruments (prepared by the Government) as are
deemed necessary to vest in the Government the Contractor's entire right,
title and interest in the Subject Invention and the application, subject to
the reservations as specified in (ii) above; and
(v) Deliver to the Contracting Officer duly executed instruments fully
confirmatory of any license rights herein agreed to be granted to the
Government.
(e) The Contractor, or those deriving rights from the Contractor, has
the option of filing patent applications in foreign countries on Subject
Inventions. If this option is not exercised in the time and manner set
forth below, the Government shall have the right to file applications in
each foreign country in which the Contractor has not exercised its option.
(i) In the event that the Contractor specifies under the provisions of
paragraph (d) that it has not filed and will not file a United States
patent application (or having specified that it will file, thereafter notifies
the Contracting Officer to the contrary) the Contractor shall have six
months from the date of making the written disclosure required by para-
graph (c) (i) to file foreign patent applications.
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LI
(ii) In the event that a United States patent application is filed by
or on behalf of the Contractor under the provisions of paragraph (d),
the Contractor shall have six months from the date of the United States
application, or six months from the date permission is granted to file
foreign applications where such filing had been prohibited for security
reasons, within which to file foreign patent applications. With respect
to each Subject Invention on which it has specified that a United States
patent application has been or will be filed by or on behalf of the Con-
tractor, the Contractor shall (A) inform the contracting Officer in writing
of each foreign patent application for such Invention filed by or on behalf
of the Contractor within six months after the filing by the Contractor of
the corresponding United States application, and, if practicable, prior
to the publication of the Subject Invention in any country, (B) inform
the Contracting Officer in writing at the earliest practicable date of any
publication of the Subject Invention made by or known to the Contractor
or, where applicable, of any contemplated publication by the Contractor,
stating the date and identity of such publication or contemplated publica-
tion, (C) upon written request of the Contracting Officer convey to the
Government the Contractor's entire right, title, and interest in such
Invention in those countries in which the Contractor has not, within six
months after the filing of the corresponding United States application,
filed foreign patent applications, and deliver to the Contracting Officer,
upon written request, such duly executed instruments (prepared by the
Government) of assignment, application, and other papers as are deemed
necessary to vest in the Government the Contractor's right, title, a.nd
interest as aforesaid and the right to apply for and maintain patents
covering such invention, subject, however, to the reservation of a non-
exclusive and royalty-free license to the Contractor (and to its existing
and future associated and affiliated companies, if any, within the corpo-
rate 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 the Subject Invention pertains, and (D) in the event that the
Contractor, or those deriving rights from the Contractor, elects not to
continue the prosecution of any foreign application which has been filed
by or on behalf of the Contractor, or elects not to maintain any patent
granted on such application, so notify the Contracting Officer not less
than ninety days before the expiration of the response period or patent
lapse date and, upon written request, deliver to the Contracting Officer
such duly executed instruments (prepared by the Government) as will
convey to the Government the Contractor's entire right, title, and interest
in the application or patent, subject to a reservation as specified in (C)
above.
(f) If the Contractor fails to deliver to the Contracting officer the
certificates required by paragraph (c) (ii) of this clause or fails to furnish
the written disclosures for all Subject Inventions required by paragraph
(c) (i) of this clause shown to be due in accordance with any certificate
delivered under paragraph (c) (ii), there shall be withheld from payment
until the Contractor shall have corrected such failures either (i) ten per-
cent (10%) of the amount of this contract, as from time to time amended,
or (ii) $5,000, whichever is less. After payment of eighty percent (80%)
of the amount of this contract, as from time to time amended, payment
shall be withheld until a reserve of either (i) ten percent (10%) of such
amount, or (ii) $5,000, whichever amount is less, shall have been set aside,
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such reserve or balance thereof to be retained until the Contractor shall
have furnished to the Contracting Officer (A) the summary report re-
quired by paragraph (c) (iii) of this clause, (B) written disclosures for
all Subject Inventions required by paragraph (c) (i) of this clause which
are shown to be due in accordance with certificates delivered under para-
graph (c) (ii) or in accordance with such summary report, and (C) the
information as to any subcontractor required by paragraph (h) of this
clause. The maximum amount which may be withheld under this para-
graph shall not exceed ten percent (10%) of the amount of this contract
or $5,000, whichever is less, and no amount shall be withheld under this
paragraph when the minimum amount specified by this paragraph is being
withheld under other provisions of this contract. The withholding of
any amount or subsequent payment thereof to the Contractor shall not be
construed as a waiver of any rights accruing to the Government under
this contract. This paragraph shall not be construed as requiring the
Contractor to withhold any amounts from a subcontractor to enforce com-
pliance with the patent provisions of a subcontract.
(g) The Contractor shall exert all reasonable effort to negotiate for
the inclusion of this Patent Rights clause in any subcontract hereunder of
$3,000 or more having experimental, developmental, or research work as
one of its purposes. In the event of refusal by a subcontractor to accept
the Patent Rights clause, the Contractor shall not proceed with the sub-
contract without written authorization of the Contracting Officer, and
upon obtaining such authorization, shall cooperate with the Government
in the negotiation with such subcontractor of an acceptable patent rights
clause; provided, however, that the Contractor shall in any event require
the subcontractor to grant to the Government patent rights under Sub-
ject Inventions of no less scope and on no less favorable terms than those
which the Contractor has under such subcontracts, except that in no event
shall the subcontractor be required to grant to the Government patent
rights in excess of those herein agreed to be granted to the Government
by the Contractor.
(h) The Contractor shall, at the earliest practicable date, notify
the Contracting Officer in writing of any subcontract containing a patent
rights clause, furnish the Contracting Officer a copy of such clause, and
notify the Contracting Officer when such subcontract is completed. It is
understood that with respect to such subcontract clause, the Government is,
a third party beneficiary; and the Contractor hereby assigns to the Gov-
ernment all the rights that the Contractor would have to enforce the
subcontractor's obligations for the benefit of the Government with respect
to Subject Inventions. The Contractor shall not be obligated to enforce
the agreements of any subcontractor hereunder relating to Subject Inventions.
(i) When the Contractor shows that it has been delayed in the per-
formance of this contract by reason of its inability to obtain in accordance
with paragraph (g) a suitable patent rights clause from a qualified sub-
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contractor for any item or service required under this contract for which
the Contractor itself does not have availatle facilities or qualified per-
sonnel, the Contractor's delivery dates shall be extended for a period of
time equal to the duration of such delay; and, upon request of the Con-
tractor, the Contracting Officer shall determine to what extent, if any,
an additional extension of the delivery dates and an increase in contract
prices based upon additional costs incurred by such delay are proper under
the circumstances; and the contract shall be modified accordingly. If the
Contractor, after exerting all reasonable effort, is unable to obtain a quali-
fied subcontractor as set forth above, the Contractor may submit to the
Contracting Officer a written request for waiver or modification of the
requirement that a suitable patent rights clause be included in the sub-
contract. Such request shall specifically state that the Contractor has
used all reasonable effort to obtain such qualified subcontractor, and shall
cite the waiver or termination provision hereinafter set forth. If, within
thirty-five (35) days after the date of receipt of such request for a waiver
or modification of said requirement, the Contracting Officer shall fail
to deny in writing such request, the requirement shall be deemed to have
been waived by the Government. If within such period the Contractor
shall receive a written denial of such request by the Contracting Officer,
this contract shall thereupon automatically terminate and the rights and
obligations of the parties shall be governed by the provisions of the
clause of this contract entitled "Termination for the Convenience of the
Government."
ARTICLE 18 REPRODUCTION AND USE OF TECHNICAL DATA
The Contractor agrees to and does hereby grant to the Government,
to the full extent of the Contractor's right to do so without payment of
compensation to others, the right to reproduce, use, and disclose for
governmental purposes (including the right to give to foreign govern-
ments for their use as the national interest of the United States may
demand) all or any part of the reports, drawings, blueprints, data, and
technical information specified to be delivered by the Contractor to the
Government under this contract; provided, however, that nothing con-
tained in this paragraph shall be deemed, directly or by implication, to
grant any license under any patent now or hereafter issued or to grant
any right to reproduce anything else called for by this contract.
ARTICLE 19 REPORTING OF ROYALTIES
The provisions of this clause shall be applicable only if the amount of
the contract is in excess of $10,000.
(a) The Contractor shall report in writing (in quadruplicate) to the
Contracting Officer as soon as practicable after execution of this contract
whether or not any royalties in excess of $250 have been paid or are to be
paid by the Contractor directly to any person or firm in connection with
the performance of this contract. If royalties in excess of $250 have been
paid or are to be paid to any person or firm, the report shall include the
following items of information with respect to such royalties (including
the initial $250):
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(1) The name and address of each licensor to whom royalties in excess
of $250 have been paid or are to be paid,
(2) The patent numbers, patent application serial numbers (with filing
dates), or other identification of the basis for such royalties,
(3) The manner of computing the royalties consisting of (i) a brief
identification of each royalty-bearing unit or process, (ii) the total amount
of royalties, and (iii) the percentage rate or dollars and cents amount of
royalties on each such unit or process; provided that if the royalties can-
not be computed in terms of units or dollars and cents value, then other
data showing the manner in which the Contractor computes the royalties.
(b) In lieu of furnishing a report under paragraph (a), the Contractor
may furnish a single, consolidated report for each accounting period of
the Contractor during which the Contractor has contracts with the Govern-
ment, provided the Contractor has requested and obtained the prior writ-
ten approval of the Contracting Officer. Such consolidated report shall be
furnished, when the furnishing thereof has been approved, in the num-
ber of copies as approved, as soon as practicable after the close of the ac-
counting period covered by the report. Such consolidated report shall be
made in accordance with Contractor's established accounting practice and
shall include, for the accounting period, the total amount of royalties
accruing to each licensor at a rate in excess of $1,000 per annum on the
Contractor's over-all business, together with (i) the name and address of
each such licensor, (ii) the patent numbers, patent application serial num-
bers (with filing dates), or other identification of the basis for such royal-
ties, (iii) a brief description of the subject matter of the license under
which royalties are charged, (iv) the percentage rate or unit amount,
or if the royalties do not accrue by rate or unit amount, such other data
showing the manner by which the royalties accrue to licensor, and (v) an
estimate or approximation (without detailed accounting) of the portion
of such royalties that may be attributable to Government contracts. The
Contractor shall, if requested by the Government, furnish at Government
expense a more detailed allocation of such royalty payments attributable
to Government contracts.
(c) In the event that the Contractor requests written approval to fur-
nish consolidated reports under paragraph (b) above, the Contracting Officer
shall promptly consider the request and furnish to the Contractor a letter
stating whether or not the request is approved and, notwithstanding any
such approval, the Contracting officer shall have the right to question
any such subsequently furnished report as to accuracy or completeness of
data and to ask for additional information. The Contractor shall furnish
a copy of such letter of approval to the Contracting Officer administering
this contract.
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(d) After payment of eighty percent (80%) of the amount of this
contract, as from time to time amended, further payment shall be with-
held until a reserve of either (i) ten percent (10%) of such amount or
(ii) $5,000, which ever is less, shall have been set aside, such reserve or
the balance thereof to be retained until the Contractor shall have furnished
to the Contracting Officer the report called for by paragraph (a) hereof
or the copy of the letter approving the Contractor's request to furnish
the report under paragraph (b); provided that no amount shall continue to be
withheld from payment for the causes specified in this paragraph (d) if the
Contracting Officer shall find that the Contractor has not been furnished a
letter as required by paragraph (c) within a reasonable time after making
written request to submit a single, consolidated report under the provisions
of paragraph (b) of this clause; and provided further that the Contracting
Officer may, in his discretion, order payment to be withheld in the amount
and manner above provided if the report called for by paragraph (a) is un-
satisfactory or if the report called for by paragraph (b) is due but has not
been received, or if received, is found to be unsatisfactory. No amount shall
be withheld under this paragraph when the minimum amount specified by this
paragraph is being withheld under other provisions of this contract. The
withholding of any amount or subsequent payment thereof to the Contractor shall
not be construed as a waiver of any right accruing to the Government under this
contract.
ARTICLE 20 SECURITY
(a) Disclosure of Information. It is understood that disclosure of
information relating to the work contracted for hereunder, to any person not
entitled to receive it, or failure to safeguard all secret, confidential, and
restricted matter that may come to the Contractor or any person under his con-
trol in connection with the work under this contract, may subject the Con-
tractor, his agents, employees and subcontractors to criminal liability under
the laws of the United States (Act of 25 June 1948, c.645, 62 Stat. 736 as
amended). The provisions of the "Security Requirements for Contractors" and
of the "Contractor's Security Agreement", copies of which have been furnished
to the Contractor, are incorporated herein by reference.
(b) Subcontractors. The Contractor when it is deemed necessary to
disclose classified information to a subcontractor to accomplish the purposes
of this contract, will request permission of the Contracting Officer prior
to such disclosure. Upon the granting of permission, the Contractor shall
cause to be inserted in all subcontracts under this contract a provision
similar to (a) above.
ARTICLE 21 DISPUTES
Except as otherwise provided in this contract, any dispute concerning
a question of fact arising under this contract which is not disposed of
by agreement shall be decided by the Contracting Officer, who shall reduce
his decision to writing and mail or otherwise furnish a copy thereof to
the Contractor. Within 30 days from the date of receipt of such copy, the
Contractor may appeal by mailing or otherwise furnishing to the Contract-
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ing Officer a written appeal addressed to the Director, and the decision
of the Director or his duly authorized representative for the hearing of
such appeals shall, unless determined by a court of competent jurisdiction
to have been fraudulent or capricious or arbitrary or so grossly erroneous
as necessarily to imply bad faith, or not supported by substantial evidence,
be final and conclusive; provided that, if no such appeal is taken, the deci-
sion of the contracting officer shall be final and conclusive. In connec-
tion with any appeal proceeding under this clause, the Contractor shall be
afforded an opportunity to be heard and to offer evidence in support of
its appeal. Pending final decision of a dispute hereunder, the Contractor
shall proceed diligently with the performance of the contract and in
accordance with the Contracting Officer's decision.
ARTICLE 22 COVENANT AGAINST CONTINGENT FEES
The Contractor warrants that no person or selling agency has been employed
or retained to solicit or secure this contract upon an agreement or understanding
for a commission,.' )ercentage, 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
consideration the full amount of such commission, percentage, brokerage, or con-
tingent fee.
ARTICLE 23 EIGHT-HOUR LAW
This contract, to the extent that is of a character specified in the
Eight-Hour Law of 1912 as amended (40 U. S. Code 324-36) and is not covered
by the Walsh-Healey Public Contracts Act (41 U. S. Code 35-45), is subject to
the following provisions and exceptions of said Eight-Hour Law of 1912 as amended,
and to all other provisions and exceptions of said Law:
No laborer or mechanic doing any part of the work contemplated by this
contract, in the employ of the Contractor or any subcontractor contracting for
any part of the said work, shall be required or permitted to work more than
eight hours in any one calendar day upon such work, except upon the condition
that compensation is paid to such laborer or mechanic in accordance with the
provisions of this clause. The wages of every such laborer and mechanic em-
ployed by the Contractor or any subcontractor engaged in the performance of
this contract shall be computed on a basic day rate of eight hours per day and
work in excess of eight hours per day is permitted only upon the condition
that every such laborer and mechanic shall be compensated for all hours worked
in excess of eight hours per day at not less than one and one-half times the
basic rate of pay. For each violation of the requirements of this clause a
penalty of five dollars shall be imposed upon the Contractor for each such
laborer or mechanic for every calendar day in which such employee is required
or permitted to labor more than eight hours upon said work without receiving
compensation computed in accordance with this clause; and all penalties thus
imposed shall be withheld for the use and benefit of the Government.
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ARTICLE 24 WALSH-HEALEY PUBLIC CONTRACTS ACT
If this contract is for the manufacture or furnishing of materials, sup-
plies, articles or equipment in an amount which exceeds or may exceed $10,000
and is otherwise subject to the Walsh-Healey Public Contracts Act as amended
(41 U. S. Code 35-45), there are hereby incorporated by reference all repre-
sentations and stipulations required by said Act and regulations issued there-
under by the Secretary of Labor, such representations and stipulations being sub-
ject to all applicable rulings and interpretations of the Secretary of Labor
which are now or may hereafter be in effect.
ARTICLE 25 NOTICE TO THE GOVERNMENT OF LABOR DISPUTES
Whenever the Contractor has knowledge that any actual or potential
labor dispute is delaying or threatens to delay the timely performance
of this contract, the Contractor shall immediately give notice thereof, in
cluding all relevant information with respect thereto, to the Contracting
Officer.
ARTICLE 26 NONDISCRIMINATION IN ENPLOYI TT
(a) In connection with the performance of work under this contract the Con-
tractor agrees not to discriminate against any employee or applicant for
employment because of race, religion, color, or national origin. The afore-
said provision shall include, but not be limited to, the following: employ-
ment, upgrading, demotion, or transfer; recruitment or recruitment adver=
tising; lay-off or termination; rates of pay or other forms of compensation
and selection for training, including apprenticeship. The contractor agrees to
post hereafter in conspicuous places, available for employees and applicants
for employment, notices to be provided by the Contracting Officer setting forth
the provisions of the nondiscrimination clause.
(b) The Contractor further agrees to insert the foregoing provision in all
subcontracts hereunder, except subcontracts for standard commercial supplies
or raw materials.
ARTICLE 27 CONVICT LABOR
In connection with the performance of work under this contract, the
Contracto agrees not to employ any person undergoing sentence of imprison-
ment at hard labor.
ARTICLE 28 OFFICIALS NOT TO BENEFIT
No member of or delegate t.) Congress or resident commissioner shall be ad-
mitted 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.
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ARTICLE 29 BUY AMERICAN
The Contractor agrees that there will be delivered under this contract
only such unmanufactured articles, materials and supplies (which term
"articles, materials and supplies" is hereinafter referred to in this clause
as "supplies") as have been mined or produced in the United States, and only
such manufactured supplies as have been manufactured in the United States
substantially all from supplies mined, produced, or manufactured, as the
case may be, in the United States. Pursuant to the Buy American Act
(4+1 U. S. Code lOa-d), the foregoing provision shall not apply (i) with
respect to supplies excepted by the Director from the application of that
Act, (ii) with respect to supplies for use outside the United States, or
(iii) with respect to the supplies to be delivered under this contract
which are of a class or kind determined by the Director or his duly
authorized representative not to be mined, produced, or manufactured, as
the case may be, in the United States in sufficient and reasonably
available commercial quantities and of a satisfactory quality, or (iv) with
respect to such supplies, from which the supplies to be delivered under
this contract are manufactured, as are of a class or kind determined by the
Director or his duly authorized representative not to be mined, produced, or
manufactured, as the case may be, in the United States in sufficient and
reasonably available commercial quantities and of a satisfactory quality,
provided that this exception (iv) shall not permit delivery of supplies
manufactured outside the United States if such supplies are manufactured in
the United States in sufficient and reasonably available commercial
quantities and of a satisfactory quality.
ARTICLE 30 EXCUSABLE DELAYS
(a) The Contractor shall not be in default by reason of any failure in
performance of this contract in accordance with its terms (including any
failure by the Contractor to make progress in the prosecution of the work
hereunder which endangers such performance) if such failure arises out of
causes beyond the control and without the fault or negligence of the Con-
tractor. Such causes include, but are not restricted to: acts of God
or of the public enemy; acts of the Government; fires; floods; epidemics;
quarantine restrictions; strikes; freight embargoes; unusually severe weather;
and failure of subcontractors to perform or make progress due to such causes,
unless the Contracting Officer shall have determined that the supplies or
services to be furnished under the subcontract were obtainable from other
sources and shall have ordered the Contractor in writing to procure such
services or supplies from such other sources, and the Contractor shall have
failed reasonably to comply with such order. Upon request of the Contractor,
the Contracting Officer shall ascertain the facts and extent of such failure
and, if he shall determine that such failure was occasioned by any one or
more of the said causes, the delivery schedule shall be revised accordingly
subject to the rights of the Government under the clause hereof entitled
"Termination".
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(b) If the Contractor becomes unable to complete the contract work
and make delivery at the time specified in the Schedule because of tech-
nical difficulties, notwithstanding the exercise of good faith and dili-
gent efforts in the performance of the work called for hereunder, it may
give the Contracting Officer written notice of the anticipated default
with reasons therefor. Such notice and reasons shall be delivered not
less than forty-five (45) days before the completion date specified in
the Schedule or within such time as the Contracting Officer deems suffi-
cient. If such notice is duly given, then to the extent the interest of the
Government makes an extension desirable the Contracting Officer may, in his
discretion, extend the period of time specified in the Schedule for such
period as he deems advisable, and this contract shall then be modified in
writing accordingly.
ARTICLE 31 ASSIGNMENT OF RIGHTS
No assignment of any of the Contractor's rights under this contract
may be made.
ARTICLE 32 EMPLOYMENT OF ALIENS
If any Task Order calls for furnishing or constructing aircraft,
aircraft parts, or aeronautical accessories no aliens employed by the
Contractor shall be permitted to have access to the plans or specifications,
or the work under construction, or to participate in the contract trials,
without the written consent beforehand of the Director or his duly
authorized representative.
ARTICLE 33 COPYRIGHTS
(a) 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, (i) a royalty-free, nonexclusive and irrevocable license to
reproduce, translate, publish, use, and dispose of, and to authorize others
so to do, all copyrightable material first produced or composed and delivered
to the Government under this contract by the Contractor, its employees or
any individual or concern specifically employed or assigned to originate
and prepare such material; and (ii) a license as aforesaid under any and
all copyrighted or copyrightable work not first produced or composed by
the Contractor in the performance of this contract but which is incorporated
in the material furnished under the contract, provided that such license shall
be only to the extent the Contractor now has, or prior to completion or final
settlement of the contract may acquire, the right to grant such license
without becoming liable to pay compensation to others solely because of such
grant.
(b) The Contractor agrees that it will exert all reasonable effort to
advise the Contracting Officer, at the time of delivering any copyrightable
or copyrighted work furnished under this contract, of any adversely held
copyrighted or copyrightable material incorporated in any such work and of
any invasion of the right of privacy therein contained.
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(c) The Contractor agrees to report to the Contracting Officer,
promptly and in reasonable written detail, any notice or claim of copyright
infringement received by the Contractor with respect to any material delivered
under this contract.
ARTICLE 34 GRATUITIES
(a) The Government may, by written notice to the Contractor,
terminate the right of the Contractor to proceed under this contract if
it is found, after notice and hearing, by the Director or his duly
authorized representative, that gratuities (in the form of entertainment,
gifts, or otherwise) were offered or given by the Contractor, or any
agent or representative of the Contractor, to any officer or employee of
the Government with a view toward securing a contract or securing favorable
treatment with respect to the awarding or amending, or the making of any
determinations with respect to the performing of such contract;
PROVIDED, That the existence of the facts upon which the Director or his
duly authorized representative makes such findings shall be in issue and
may be reviewed in any competent court.
(b) In the event this contract is terminated as provided in paragraph
(a) hereof, the Government shall be entitled (i) to pursue the same remedies
against the Contractor as it could pursue in the event of a breach of the
contract by the Contractor, and (ii) as a penalty in addition to any other
damages to which it may be entitled by law, to exemplary damages in an
amount (as determined by the Director or his duly authorized representative)
which shall be not less than 3 nor more than 10 times the costs incurred by
the Contractor in providing any such gratuities to any such officer or employee.
(c) The rights and remedies of the Government provided in this clause
shall not be exclusive and are in addition to any other rights and remedies
provided by law or under this contract.
ARTICLE 35 TERMIIQATION
The performance of work under this contract may be terminated by the
Government in whole or from time to time in part by giving the Contractor
notice in writing. Upon receipt of such notice from the Government, the
Contractor shall exercise all reasonable diligence to obtain the cancellation
of its outstanding commitments hereunder running beyond such termination date,
but may be reimbursed for reasonable termination charges in conformance with
the standards established in APPENDIX I, entitled "Termination," which is
hereby made a part of this agreement by reference and attachment hereto.
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RD TASK
July 1955
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?
c CREW
ARTICLE 36 ALTERATIONS
The following alterations were made in the provisions of this contract
prior to signature:
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i ?otW1tt
W
Contract Po. RD-113
SCHEDULE
C . MTICL3 5. ALLOWABLE COSTA FIx FEE AND PAYbM,
(1) The f 1x:od fee applicable to each Task Order issued hereunder
shall be computed at six percent (6) of the estimated
cost authorized by the said Task Order and shall be stated
therein. Ho additional fixed fee in excess of the amount
initially established in the Task Order shall be paid the
Contractor unless authorized by a written supplement to the
Task Order increasing the scope of performance and the amount
of tha fixed fee to be paid thereunder. For the purpose of
arcccntni fishing progress payments on the fixed fee, each billing
for a11ax7able costs shams. have added thereto a slam equaal to
six pj9x?eent () of the amount billed subject to the provisions
of Article 5((c,) of the contract.
In detemoirdiig the cost of performing the Task Orders pursuant
to the provie ions of Article 5 of the contract, it is understood
and a,,rf.'ed without limiting the generality of Part 2,, Section XV,
Armed Services Procurement Regulation that the allocable costs of
the performance of this contract are hereby defined as the nec-
essarr cost of direct labor, materiels, and other direct items
of that nature described' in subparagraphs A through H below,
incurred by the Contractor directly in the performance of this
contract and are claimed by the Contractor and accepted as
such cc fists by the Governments and at scoo t for overhead and
gener, .1 edmiMistrative expenses determined in accordance with
subpa:i?e ;rapfi (I) belcz :
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Each article in this schedule has been numbered to correspond with
the article in the contract which it implements.
time: to time and said Task Orders shall be for work and services for which
the Contractor bass submitted proposals. Unless the Contractor rejects
a Task Order issued hereunder within fourteen (14) days after receipt
thereof for causes which the Contracting Officer considers reasonable,
the Contractor shall, promptly after receipt thereof, proceed with per-
forL:E3.n.,~e. When necessary, the Contracting Officer will establish priority
ratixgs for the Teak Orders and may revise the priority in accordance with
the beat Interests of the Government.
A. i#BTICLE 2. SCOPE OF SUBJECT WORK. The work to be performed
under this contract sBe art Forth M -Task Orders as issued from
B~ !i? TICLE: #. LIMITATION OF COST. The estimated cost of the per-
i'orr nce of any Task 67e-r issued hereunder exclusive of any fixed fee will
t ,e r et forth in the said Task Order.
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SECRET
(A) The cost of materials including (i) the net cost, after deducting
all discounts, of materials and parts purchased directly for the,
performance of this contract; (ii) the cost of materials. end.
withdrawn from the Contractor's store or stockrooms; and (iii)
the cost of materials and parts fabricated or partially fabricated,.
by the Contractor and charged in accordance with a sound account-
ing method consistently followed by the Contractor, provided
that, articles customarily produced or assembled by the Contractor
in the regular course of its business, whether or not listed in
the Contractor's catalogs, and supplies as required in connec-
tion vvith this contract shall be billed at the lowest commercial
prices which would be charged to an outside purchaser for
similar quantities, less the percentage of fee stipulated above
representing profit.
(B) The salaries and wages of the following personnel directly employed
in the performance of this contract, provided, such wages and salaries
are in accordance with established company policy, excluding there-
from old age benefit, social security, and unemployment compensation
taxes pertaining to such employment, payments made for. workmen's
compensation insurance, overtime premiums, shift. premiums, bonuses,
pension contributions, and holiday, vacation and sick leave
allowances pertaining thereto:
(I) Personnel employed in direct productive labor, generally
referred to as "shop labor" or "factory labor".
(ii) Personnel employed in direct engineering labor, includ-
ing professional, engineers, scientists, draftsmen,
technicians, and other salaried employees.
(C) Purchase, fabrication, or installation cost of special tools, dies,
jigs, and other equipment necessary for the performance of this
contract, as well as the cost of necessary plant rearrangement
for the installation of such specia.ll tools, dies, jigs, test equip-
ment, etc., Etnd the cost of removal thereof
() The costs which the Government is obligated to assume under the
Article of the contract entitled "Insurance--Liability to Third
Persons," exclusive of the cost of any insurance allocable to
this contract, or any insurance which the Government may require
or approve under that Article entitled "insurance--Liability to
Third Persons," it being understood that the cost of all such
insurance has been taken into account in computing the amount
aLllowvd for overhead in subsection (Y), bellow.
(E) Paymer o of taxes to the extent provided in Part 2, Section XV
of Armed Services Procurement Regulations; and payments of royalties,
to the! extent rovideci in the Articite of the contract, entitled
"Paymc!n t of Royail.ties."
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SECRET w
(F)
(H)
(I)
(J)
The cost of services directly subcontracted hereunder in accordance
Transportation expenses (excluding local transportation expense)
.actually incurred by employees of the Contractor in performance
of the work under this contract. Transportation by automobile
for required travel of employees under this contract. shall be
reimbursed at the rate of seven cents (7w).per mile in lieu of
the actual costs of such transportation. Subsistence expenses
of employees of the Contractor while in travel status shall be
on an actual basis but ahell not exceed Twelve Dollars ($12.00)
per day. All travel for which reimbursement will be claimed
hereunder shall be authorized in advance by the Contracting
Officer. In the event time viii not permit the Contractor to
obtain advance approval the travel must be ratified by the
Contracting Officer prior to claiming the travel as an item
of cost.
covered by subsection (C), above,
with the Article of 'the contract entitled "Subcontracts" and not
Such other items not expressly excluded by other provisions of
the contract, as should, in the opinion of the Contracting Officer,
be included in the coat of the work called for in this contract,
Any such item shall be specifically certified by the Contracting
Officer as being allowed under this subsection.
An amount for overhead, indirect charges and other elements of
cost excluded from or not covered by subsections (A) through (H),
above,, equal to the percentages, set forth below:
the Contractor and the Contracting Officer. Upon the complete
execution. of such Change Order, an equitable adjustment shall
be made in the amounts previously invoiced on a tentative basis.
The actual rates shall remain in effect for the period set forth
in the: Change Order or any extension thereof, after which they
shall become tentative and the Contractor shall be provisionally
reimbe:irsed at such rates pending a further revision thereof.
The rartes specified in subparagraph (I) are tentative rates under
which the Contractor shall be provisionally reimbursed pending
the establishment of actual rates for the first accounting period.
Actua]. rates shall be as determined by Government audit. Said actual
rates shall be set forth in a Change Order to the contract signed-by
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SECRET
Any failure on the part of the Contractor and Contracting Officer
to agree on a revision of the overhead rates shall be considered.
a dispute concerning a question of fact within the meaning of the
Article of this contract entitled "Disputes"; pending settlement
under such article, the Contractor shall diligently proceed with
perfo:!mance. In the event that actual or negotiated rates are
established between the Contractor and another component of the
Government for CPFF contracts, the Contractor shall promptly ad-
vise the Contracting Officer for informational purposes only as
to the rates agreed upon for applicable accounting period.
Said notification shall be accompanied with the following
certi:'ication:
"I certify that no item. of cost, claimed as a direct
charge under terms of this contract has been included
its an element of expense in establishing the overhead
:rate(s)."
The Contractor shall, obtain the approval of the Contracting Officer
for (i) purchasing any item of capital equipment at a cost of
$500.00 or more, (ii) making any building alteration at a cost
of $500.00 or more, (iii) constructing buildings, or (iv) leasing
real property, for the cost of any portion or all of which
reimbursement will be claimed as a direct cost hereunder. For
each of the above mentioned acquisitions, the Contractor shall
obtain three bids and refer same together with the Contractor's
recannendations, to the Contracting Officer for approval. In the
event multiple bids are not obtainable, an explanation of the
reason therefor shall be furnished to the Contracting Officer.
SECRET
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9
qW
IN WITNESS WHEREOF, the parties hereto have executed this contract as
of the day and year first above written.
Regn. No. T88-APD-377-56
Order No. 56-5482
you. No. 9518-56
Regn.Cy to: T S/APD~
Contract No. RD-113
THE UNITED STATES OF AMERICA
BY
TITLE Contracting Officer
TITLE c c~c l i~-v
I , certify that I am the
of the corporation named as Contractor herein; that
T
25X1
25X1
25X1
25X1
who signed this contract on behalf of the Contractor was then C 25X1
of said corporation; that said contract was duly signed
for and in behalf of said corporation by authority of its governing body,
and is within the scope of its corporate powers.
25X1
(Corporate Seal)
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TERMINATION
(a) The performance of work under the contract may be terminated by the
Government in accordance with this clause in whole, or from time to time in
part, (1) whenever the Contractor shall default in performance of this contract
in accordance with its terms (including in the term "default" any such failure
by the Contractor to make progress in the prosecution of the work hereunder as
endangers such performance), and shall fail to cure such default within a
period of ten days (or such longer period as the Contracting Officer may allow)
after receipt from the Contracting Officer of a notice specifying the default,
or (2) whenever for any reason the Contracting Officer shall determine that
such termination is in the best interests of the Government. Any such termi-
nation shall be effected by delivery to the Contractor of a Notice of Termination
specifying whether termination is for the default of the Contractor or for the
convenience of the Government, the extent to which performance of work under
the contract is terminated, and the date upon which such termination becomes
effective. If, after notice of termination of this contract for default under
(1) above, it is determined that the Contractor's failure to perform or to
make progress in performance is due to causes beyond the control and without
the fault or negligence of the Contractor pursuant to the provisions of the
clause of this contract relating to excusable delays, the Notice of Termination
shall be deemed to have been issued under (2) above, and the rights and
obligations of the parties hereto shall in such event be governed accordingly.
(b) After receipt of a Notice of Termination and except as otherwise
directed by the Contracting Officer, the Contractor shall (1) stop work under
the contract on the date and to the extent specified in the Notice of Termination
(2) place no further orders or subcontracts for materials, services, or facili-
ties except as may be necessary for completion of such portion of the work under
the contract as is not terminated; (3) terminate all orders and subcontracts to
the extent that they relate to the performance of work terminated by the Notice of
Termination; (4) assign to the Government, in the manner and to the extent directed
by the Contracting Officer, all of the right, title, and interest of the Contractor
under the orders or subcontracts so terminated; in which case the Government 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; (5) with the approval or rat-
ification of the Contracting Officer, to the extent he may require, which approval
or ratification shall be final and conclusive for all purposes of this clause,
settle all outstanding liabilities and all claims arising out of such termination
of orders and subcontracts, the cost of which would be reimbursable, in whole or
in part, in accordance with the provisions of this contract; (6) transfer title
(to the extent that title has not already been transferred) and, in the manner,
to the extent, and at the times directed by the Contracting Officer, deliver
to the Government (i) the fabricated or unfabricated parts, work in process,
completed work, supplies and other material produced as a part of, or acquired
in respect of the performance of, the work terminated by the Notice of Term-
(For Fixed-Fee Contracts)
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ination, (ii) the completed or partially completed plans, drawings, infor-
mation, and other property which, if the contract had been completed, would
be required to be furnished to the Government, and (iii) the jigs, dies, and
fixtures, and other special tools and tooling acquired or manufactured for
the performance of this contract for the cost of which the Contractor has
been or will be reimbursed under this contract; (7) 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 provision (6) of this paragraph, provided, however,
that the Contractor (i) shall not be required to extend credit to any purchaser,
and (ii) may acquire any such property under the conditions prescribed by and
at a price or prices approved by the Contracting Officer; and provided further
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 otherwise 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; (8) complete performance of such part of the work as shall not have
been terminated by the Notice of Termination; and (9) take such action as may
be necessary, or as the Contracting Officer may direct, for the protection and
preservation of the property related to this contract which is in the possession
of the Contractor and in which the Government has or may acquire an interest.
The Contractor shall proceed immediately with the performance of the above
obligations notwithstanding any delay in determining or adjusting the amount
of the fixed-fee, or any item of reimbursable cost, under this clause. 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
quantity and quality, of any or all items of termination inventory not pre-
viously disposed of, exclusive of items the disposition of which has been
directed or authorized by the Contracting Officer, and may request the Govern-
ment to remove such items or enter into a storage agreement covering them.
Not later than fifteen (15) days thereafter, the Government will accept title
to such items and remove them or enter a storage agreement covering the
same, provided that the list submitted shall be subject to verification by the
Contracting Officer upon removal of the items, or if the items are stored, within
forty-five (45) days from the date of submission of the list, and any necessary
adjustment to correct j:he 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 the
certification prescribed by the Contracting Officer. Such claim shall be
submitted promptly but in no event later than two years from the effective date
of termination, unless one or more extensions in writing are granted by the
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Contracting Officer upon request of the Contractor made in writing within such
two-year period or authorized extension thereof. However, if the Contracting;
Officer determines that the facts justify such action, he may receive and act
upon any such termination claim at any time after such two-year period or any
extension thereof. Upon failure of the Contractor to submit its termination
claim within the time allowed, the Contracting Officer may determine, on the
basis of information available to 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), the Contractor and the
Contracting Officer may agree upon the whole or any part of the amount or
amounts to be paid (including an allowance for the fixed-fee) to the Contractor
by reason of the total or partial termination of work pursuant to this clause.
The contract shall be amended accordingly, and the Contractor shall be paid the
agreed amount.
(e) In the event of the failure of the Contractor and the Contracting
Officer to agree in whole or in part, as provided in paragraph (d) above, as
to the amounts with respect to costs and fixed-fee, or as to the amount of the
fixed-fee, to be paid to the Contractor in connection with the termination of
work pursuant to this clause, the Contracting Officer shall determine, on the
basis of information available to him, the amount, if any, due to the Contractor
by reason of the termination and shall pay to the Contractor the amount deter-
mined as follows:
(1) If the settlement includes cost and fixed-fee
(i) There shall be included therein all costs and expenses reimbursable
in accordance with this contract, not previously paid to the Contractor for the
performance of this contract prior to the effective date of the Notice of
Termination, and such of these costs as may continue for a reasonable time
thereafter with the approval of or as directed by the Contracting Officer,
provided, however, that the Contractor shall proceed as rapidly as practicable
to discontinue such costs.
(ii) There shall be included therein so far as not included under (i) above,
the cost of settling and paying claims arising out of the termination of work
under subcontracts or orders, as provided in paragraph (b) (5) above, which are
properly chargeable to the terminated portion of the contract.
(iii) There shall be included therein the reasonable costs of settlement,
including accounting, legal, clerical, and other expenses reasonably necessary
for the preparation of settlement claims and supporting data with respect to the
terminated portion of the contract and for the termination and settlement of
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subcontracts thereunder, together with reasonable storage, transportation, and
other costs incurred in connection with the protection or disposition of ter-
mination inventory; provided, however, that if the termination is for default
of the Contractor there shall not be included any amounts for the preparation
of the Contractor's settlement proposal.
(iv) There shall be included therein a portion of the fixed-fee payable
under the contract determined as follows:
(A) In the event of the termination of this contract for the convenience
of the Government and not for the default of the Contractor, there shall be paid
a percentage of the fee equivalent to the percentage of the completion of work
contemplated by the contract, less fixed-fee payments previously made hereunder.
(B) In the event of the termination of this contract for the default of
the Contractor, the total fixed-fee payable shall be such proportionate part
of the fee (or, if this contract calls for articles of different types, of
such part of the fee as is reasonably allocable to the type of article under
consideration) as the total number of articles delivered to and accepted by
the Government bears to the total number of articles of a like kind called for
by this contract.
If the amount determined under this paragraph is less than the total
payment of fixed-fee theretofore made to the Contractor, the Contractor shall
repay to the Government the excess amount.
(2) If the settlement includes only the fixed-fee, the amount thereof
will be determined in accordance with subparagraph (e)(1) (iv) above.
(f) The Contractor shall have the right of appeal, under the clause of
this contract entitled "Disputes," from any determination made by the Con-
tracting Officer under paragraphs (c) or (e) above, except that if the
Contractor has failed to submit its claim within the time provided in paragraph
(c) above and has failed to request extension of such time, he shall have no
such right of appeal.. In any case where the Contracting Officer has made a
determination of the amount due under paragraph (c) or (e) above, the Government
shall pay to the Contractor the following: (i) if there is no right of appeal
hereunder or if no timely appeal has been taken, the amount so determined by
the Contracting Officer, or (ii) if an appeal has been taken, the amount
finally determined on such appeal.
(g) In arriving at the amount due the Contractor under this clause there
shall be deducted (1) all unliquidated advance or other unliquidated payments
theretofore made to the Contractor, (2) any claim which the Government may have
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against the Contractor in connection with this contract, ', (3) the agreed
price for, or the proceeds of sale of, any materials, suppl s or other
things acquired by the Contractor or sold pursuant to the pr~isions of this
clause and not otherwise recovered by or credited to the Goveiient.
(h) In the event of a partial termination, the portion of 'I-,e fixed-fee
which is payable with respect to the work under the continued port.or. of the
contract shall be equitably adjusted by agreement between the Contra,;!tnr and
the Contracting Officer, and such adjustment shall be evidenced by an amend-
ment to this contract.
(i) The Government may from time to time, under such terms and conditions
as it may prescribe, make partial payments and payments on account against
costs incurred by the Contractor in connection with the terminated portion of
the contract whenever in the opinion of the Contracting officer the aggregate
of such payments shall be within the amount to which the Contractor will be
entitled hereunder. If the total of such payments is in excess of the amount
finally determined to be due under this clause, such excess shall be payable
by the Contractor to the Government upon demand, together with interest
computed at the rate of 6% per annum, for the period from the date such excess
payment is received by the Contractor to the date on which such excess is repaid
to the Government; provided, however, that no interest shall be charged with
respect to any such excess payment attributable to a reduction in the Contractor's
claim by reason of retention or other disposition of termination inventory
until ten days after the date of such retention or disposition.
(,i) The provisions of this clause relating to the fixed-fee shall be
inapplicable if this contract does not provide for payment of a fixed-fee.
(k) Unless otherwise provided for in this contract, or by applicable
statute, the Contractor from the effective date of termination and for a period
of six years after final settlement under this contract, shall preserve and make!
available to the Government at all reasonable times at the office of the Con-
tractor, but without direct charge to the Government, all its books, records,
documents, and other evidence bearing on the cost and expenses of the Contractor
under this contract and relating to the work terminated hereunder, or, to the
extent approved by the Contracting Officer, photographs, micro-photographs, or
other authentic reproductions thereof.
(For Fixed-Fee Contracts)
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