ACCEPTANCE OF PROPOSAL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-04782A000100090012-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: December 9, 2016
• Document Release Date: September 12, 2000
• Sequence Number: 12
• Content Type: FORM

Approved For Release 2001/03/02 : CIA-RDP78-04782A000100090012-9
ACCEPTANCE OF PROPOSAL
(NEGOTIATED CONTRACT) CONTRACT)
CONTRACT NO.
PAGE
No.
1
NUMBER
OF PAGES
OF
CEPTANCE
DATE OF ACCEPTANCE
REQUEST NO.
TO (Contractor and Address)
ISSUED BY
INVOICE FOR PAYMENT SHOULD BE MAILED TO
Your proposal on the above numbered request for proposals is hereby accepted as to the items enumerated below with the additions
or changes made by you, which additions or changes are set forth in full below.
ITEMUNIT
NO.
SUPPLIES OR SERVICES
QUANTITY
(Number of
Unita)
UNIT
PRICE
AMOUNT 1
_
TOTAL
This Acceptance consummates the contract which consists of the follow-
ing documents, including any Continuation Sheets thereto: (a) the
Government's Request for Proposals and your Proposal, (b) the Schedule,
(c) the General Provisions, and (d) the Government's Acceptance. No
further contractual document is necessary.
This Contract is negotiated pursuant to Statutory Authority, and any
required determinations and findings have been 'Made.
UNITED STATES OF AMERICA
BY
CONTRACTING OFFICER
FORM 1410
3-58
NOTICE
This material contains information affecting the National Defense of the United
States within the meaning of the Espionage Laws, Title 18, U.S.C. Secs. 793 and
794, the transmission or revelation of which in any manner to an unauthorized
person is prohibited by law.
aillgemproilftkin.?
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*Approved For Release 2001/03/02 : CIA-RDP78-04782A000100090012-9
Post Office Box 8043
Southwest Station
Washington 24, D. C. 20024
REGISTERED
Attention:
Subject :
Gentlemen:
The enclosed Request for Proposal invites you to bid upon furnishing the
sUpplies and services therein described. The association of this Request for
Proposals, any resulting proposal or contract award, and all correspondence
relating thereto with the procuring Government Activity or the Contracting
Officer, or with previous contracts with the same procuring Government Activity
or Contracting Officer, is classified, p information. Such
information shall, therefore, be made available and disclosed only to persons
who have been security cleared by the procuring Government Activity, and then
only On a need-to7know basis,
The handling, mailing, and storage of this letter, the enclosed documents,
and any and all correspondence relating thereto, shall be in strict compliance
with the security instructions conveyed to you in previous classified transactions
with this Activity.
If yoU. do not wish to submit a proposal, (i) you are requested to so
indicate promptly, and (ii) you shall return all documents, including this letter,
to the undersigned Contracting Officer at the?iFove address.
Your proposal must be mailed insufficient time to reach this office on
or before the date specified. in the enclosed request for opening of protocols.
Telegraphic proposals will not be considered unless specifically authorized by
the Schedule of the Request for Proposals.
In the event any information is needed prior to your Submission of a
proposal, you may contact Mr, onliAtional 8-3997.
MasiII.
Approved r
Very truly yours,
25X1A9a
?Contracting Officer
?
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' ? -
1?W? R-1 _ . ?
- REQUEST FOR PROPOSALS AND PROPOSAL
(NEGOTIATED CONTRACT)
W-11 0A1W1.1V
REQUISITION NO. OR PURCHASE AUTHORITY
ISSUED BY
ADDRESS
REQUEST FOR PROPOSALS
DATE ISSUED
REQUEST NO.
WRITTEN PROPOSALS IN TRIPLICATE, SUBJECT TO THE TERMS
SCHEDULE, AND THE ATTACHED GENERAL PROVISIONS, WILL
BUSINESS (date),
AND CONDITIONS OF THIS REQUEST FOR PROPOSALS, ITS ?
BE RECEIVED AT THE ABOVE OFFICE UNTIL THE CLOSE OF
FOR FURNISHING THE SUPPLIES OR SERVICES OR SERVICES
ARE CONTAINED IN THE TERMS AND CONDITIONS ON THE
SET FORTH IN 11-IE ACCOMPANYING SCHEDULE.
GENERAL INFORMATION AND INSTRUCTIONS RELATIVE TO PROPOSALS
REVERSE HEREOF.
PROPOSAL
DATE
IN COMPLIANCE WITH THE ABOVE, THE UNDERSIGNED OFFERS
CALENDAR DAYS ( calendar days unless a different
AND AGREES, IF
period be inserted
PROPOSALS,
EACH ITEM,
REQUEST FOR
THIS PROPOSAL BE ACCEPTED WITHIN
by the Offeror) AFTER THE LAST DATE FOR
TO FURNISH ANY OR ALL OF THE ITEMS
DELIVERED AT THE DESIGNATED POINT(s)
PROPOSALS.
RECEIPT OF PROPOSALS AS INDICATED IN THE REQUEST FOR
UPON WHICH PRICES ARE QUOTED, AT THE PRICE SET OPPOSITE
AND WITHIN THE TIME SPECIFIED IN THE SCHEDULE OF THE
OFFEROR REPRESENTS (Check appropriate boxes)
(1) (a) That it n is, El is not, a small business concern. For this
dominant in its field of operation and, with its affiliates, employs
concern by the Small Business Administration. (See Code of Fed.
contains the detailed definition and related procedures), (b) that it
Certificate by the Small Business Administration, and (c) if offeror
furnished hereunder 0 will, 0 will not, be manufactured or produced
small business manufacturer or producer;
(2) That it is a El regular dealer in, In manufacturer of, the supplies
(3) (a) That it n has, n has not, employed or retained any company
solely for the contractor) to solicit or secure this contract, and (b)
or person (other than a full-time bona fide employee working solely
fee, contingent upon or resulting from the award of this contract;
the contracting officer. (Note: For interpretation of the representation,
Services Administration Regulations, Title 44, Secs. 150.7 and 150.5
(4) That it operates as 0 individual, 0 partnership, 0 corporation,
purpose, a small
fewer than 500 employees,
Reg., Title
0 has, n has
is a regular
in the United
offered;
or person (other
that it n has,
for the contractor)
and agrees to furnish
including
(d), Fed. Reg.
incorporated
business concern is a concern that (i) is not
or (ii) is certified as a small business
13, Ch. II, Part 103, 21 Fed. Reg. 9709, which
not, previously been denied a Small Business
dealer, .it also represents that all supplies to be
States or its Territories or possessions by a
than a full-time bona fide employee working
n has not, paid or agreed to pay to any company
any fee, commission, percentage or brokerage
information relating thereto as requested by
the term "bona fide employee" see General
Dec. 31, 1952, Vol. 17, No. 253);
in the state of
FULL NAME OF OFFEROR (Type or Print)
TELEPHONE NO.
BUSINESS ADDRESS OF OFFEROR (Street, city, zone, and State)
(Type or print)
SIGNATURE AND TITLE OF PERSON AUTHORIZED TO SIGN THIS
PROPOSAL (Type or print name and title, under signature)
FC)R1s4
NOTICE
This material contains information affecting the National Defense of the United
States within the meaning of the Espionage Laws, Title 18, U.S.C. Secs. 793 and
794, the transmission or revelation of which in any manner to an unauthorized
person is prohibited by law.
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TERMS AND CONDITIONS OF REQUEST FOR PROPOSALS
1. ACCEPTANCE.--(a) The Government may accept any
item or group of items of any proposal unless qualified
by specific limitation of the offeror.
(b) Unless otherwise provided in the schedule, proposals
may be submitted for any quantities less than those speci-
fied: and the Government reserves the right to make an
award on any item for a quantity less than the quantity
proposed at the unit price offered unless the offeror speci-
fies otherwise in its proposal.
(c) Negotiations with any or all offerors may be required
after receipt of proposals. Such further negotiations shall
not be deemed to be a resection or a counter-offer on the
part of the Government. Notwithstanding such further
negotiations, the Government may accept the offeror's
proposal within the time specified in the proposal unless
the proposal is withdrawn in writing prior to acceptance.
(d) It is contemplated that a contract will be awarded
to the responsible offeror whose proposal will be most
advantageous to the Government, price and other factors
considered. The right is reserved to accept other than
the lowest proposal and to reject any or all proposals.
(e) An Acceptance of Proposal mailed (or otherwise
furnished) to the successful offeror within the time for
acceptance and upon the terms specified in the proposal
results in a binding contract, without further action by
either party.
(f) Any cost or financial analysis data submitted with
any proposal hereunder or any representation concerning
facilities or financing shall not form a part of any re-
sulting contract.
2. LABOR INFORMATION.--Attention is invited to the pos-
sibility that wage determinations may have been made under
the Walsh-Healey Public Contracts Act providing minimum
wages for employees engaged in the manufacture for sale
to the Government of the supplies covered by this Request
for Proposals. Information in this connection, as well as
general information as to the requirements of the act
concerning overtime payment, child labor, safety, and health
provisions, etc., may be obtained from the Wage and Hour
and Public Contracts Divisions, Department of Labor, Wash-
ington 25, D. C. Requests for information should state
the request number, the issuing agency, and the supplies
covered.
3. NONDISCRIMINATION IN EMPLOYMENT. --Any contract
resulting from this Request For Proposals will contain a
"Nondiscrimination in Employment" Article.
4. DISCOUNTS.--(a) Prompt payment discounts will be in-
cluded in the evaluation of proposals, provided the period
of the offered discount is sufficient to permit payment within
such period in the regular course of business under the
delivery, inspection, and payment provisions of the Request
and Proposal.
(b) In connection with any discount offered, time will
I lied by the Government if the latter date is later than
the date of delivery.
5. PRICES.--Unit price for each unit quoted on shall be
shown and such unit price shall include packing unless
otherwise specified.
6. DELIVERY TIME.--When not otherwise specified, offeror
must definitely state time of proposed delivery.
,7. COMPUTATION OF TIME.--Time, if stated as number of
days, will include Sundays and holidays.
8. SAMPLES.--Samples of items, when required, must be
submitted within the time specified and at no expense to the
Government; if not destroyed by testing, they will be re-
turned at offeror's request and expense, unless otherwise
specified in the Schedule.
9. GOVERNMENT-FURNISHED PROPERTY.--No material,
labor, or facilities will be furnished by the Government
unless otherwise provided in the Schedule.
10. AGENTS.--Proposals signed by an Agent must be made
in the name of the Principal and must be accompanied
by evidence of his authority.
11. PROPOSALS.--(a) Data. Each offeror shall furnish
the information required by the Request for Proposals form.
The offeror should print or type his name on the Schedule
and each Continuation Sheet thereof upon which he makes
an entry.
(b) Corrections. Erasures or other changes in Pro-
posals made by offeror must be explained or otherwise
noted over signature of offeror.
(c) Late Proposals. The Government reserves the
right to consider proposals or modifications thereof re-
ceived after the date indicated for such purpose, but before
award is made, should such action be in the interest of
the Government.
(d) Mistake. In case of mistake in extension of price,
the unit price will govern.
(e) Addressing. Proposals and modifications thereof shall
be enclosed in double sealed envelopes, addressed to the
issuing office, and transmitted by Registered Mail, in
strict accordance with Procedure For Mailing Material
Classified "Secret and Confidential".
12. NO PROPOSAL.--In the event no proposal is to be sub-
mitted, return the Request For Proposals together with
all specifications and drawings, if any, to the issuing
office, in accordance with Procedure for Mailing Material
Classified "Secret and Confidential".
13. SELLER'S INVOICES.--Invoices shall be prepared and
submitted in quadruplicate unless otherwise specified, and
shall contain the following information: Contract Number,
Order Number (if any), and Item Number, contract descrip-
tion of supplies or services, sizes, quantities, unit prices,
and extended totals. Bill of Lading Number and weight of
shipment will be shown for shipments on Government Bills
of Lading. The contractor or his authorized representative
be computed from date of delivery of the supplies to car- will sign ONLY the original (ribbon typed copy, if typed).
rier when delivery and acceptance are at point of origin,' When the invoice is signed or receipted in the name of the
or from date of delivery at destination or port of embarka- company or corporation, the name of the person signing,
tion when delivery and acceptance are at either of those as well as the capacity in which he signs, must appear.
points, or from date correct invoice or voucher (properly For example: "John Doe Company, by John Smith, Sec -
ecertified by the contractor) is received in the office sped-,r tary," "Treasurer," or as the case may be.
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' SCHEDULE
(SUPPLY CONTRACT)
PAGE
NO.
1
NUMBER
OF PAGES
OF
SCHEDULE
The supplies or services to be furnished, the specifications, the discounts, the time and place of delivery, and any other special terms
and conditions applicable to the Contract, Invitation for Bids, or Request for Proposals (as applicable) are set forth below.
REQUISITION NO. OR OTHER PURCHASE AUTHORITY
CONTRACT/TASK ORDER/INVITATION/REQUEST NO. (as applicable)
SHIP TO (consignee and destination)
MAIL INVOICES TO
PAYMENT
PERFORMANCE PERIOD/DELIVERY SCHEDULE
DELIVERY F.O.B.
INSPECTION
FOLLOWING DISCOUNTS WILL BE ALLOWED BY CONTRACTOR, BIDDER OR OFFEROR FOR PROMPT
10 CALENDAR DAYS PERCENT 20 CALENDAR DAYS PERCENT 30 CALENDAR DAYS PERCENT
ITEM
NO.
SUPPLIES OR SERVICES
QUANTITY
(Number of
Units)
UNIT
UNIT
PRICE
AMOUNT
TOTAL
NAME OF CONTRACTOR, BIDDER OR OFFEROR
.......
FORM
3-58
NOTICE
This material contains information affecting the National Defense of the United
States within the meaning of the Espionage Laws, Title 18, U.S.C. Secs. 793 and
794, the transmission or revelation of which in any manner to an unauthorized
person is prohibited by law.
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(SCHEDULE) SECRET
OF 2 PAGES
CONTRACT/TASK ORDER NO.
GENERAL SCHEDULE PRavisIos
ction 1. Standard Price: The price for any standard. eemmercial equipment here nsler
is not in excess of that charged by the Cortractor to the public or other
Government activities for like quantiti e of similar equipment.
action 2. Ruittiati: Unless specified otherwise in the contractual &segment.,
inspection during the course of the performanee of the work hereunder
may be made by the technical representatist(s) of the Contracting
Officer. In any event, final inspection and. aceeptance shall be at
consignee destination.
Section 3a. Delive F 0.B.: Unless speeified otherwise in the contractual document,0
the item hereunder is (art) f.o.b. the Contraetor's plant. It is
understood that the Contractor shall ship by the most economical meth
and routing, unless otherwise directed, the saidite(s) prepaid to the
consignee, risk of loss or damage in tran it remaining with the Contractor
to the point of destination. The Goverment, shall. raiMburse the Contractor
for such transportation costs when billed Ise a eparatt item supported
by a copy of the prepaid shipping document. The Contractor shall make
every effort to meet the apeeified delivery sehedule(a).
Section 3b. Late Deli: In the event the Contractor eneounters difficulty in
meeting performance reqnlremetts, or when he anticipates difficulty in
complying with the Contract delivery schedule or date, he shall immed-
iately notify' the Contracting Officer in writing giving pertinent details;
provided, however, that this data shall be informational only in charac-
ter and that this provision shall not be conetraed as a waiver by the
GoVernment of any delivery schedule or dale for any rights or remedies
provided by law or wider this contract.
Section 3c. Personal Delivery: In the event any it under this conteact is personally
delivered to the Technical Representative of the Contracting Officer, a
signed receipt in duplicate mast be obtained from said reemsentative
and one copy attached to any invoice submitted. for reimiretment for
such item(s).. Failure to do so will result in suspension of payment,
?since the Disbursing Officer is prohibited from making payment without
evidence of delivery to other than the designated eonsignen.
Section 4a. PackelPackaging Unless otherwise epteified in this contractual
document, packing and packaging shall be treaeeordanee with standard
commercial practice for domestic shipmenie as set forth In the Uniform
Freight Classification for eamnereial praetieen to assure arrival at
destination in serviceable condition. The Exterior of the container(s)
shall bear the consignee address. Iii the event the Shipment Indicator
is set forth under the Item(s) being procured, then sueh Shipment
Indicator, shown usually as (64-___ Item ) shall also
be included in the consignee address.
NAME OF CONTRACTOR
NOTICE
This material contains information affecting the National Defense of the United
States within the meaning of the Espionage Laws, Title 18, U.S.C. Secs. 793 and
794, the transmission or revelation of which in any manner to an unauthorized
person is prohibited by law.
SECRET GROUP I
EXCLUDED FROM AUTOMATIC DOWNGRADING
AND DECLASSIFICATION
FORM 1412Approved For Release 2001/0*12n:ICIAdRIPP78-04782A000100090012-9
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iRtURPTIOaWil -9)F 2 PAGES
CONTRACT/TASK ORDER NO.
Section. 1.1h. Markings: Vo markings shall be applied on any interior packing material
or container(s) or exterior of such container(s) that would identify the
sponsor. Further, ETRiarrigs shall be applied on any interior packing
material or container that would identify the consignee.
Section 5. Manuals for Production-Typts_Its:
each production-type item and each
deliverable hereunder, a manual or
to satisfactorily inspect, operate
The Contractor will farnish with
standard commercial type item
other data necessary for the user
and maintain the equipment.
,Section 6. CSecurity Requirements: The Item(s) per se under this contractual
document is ciFirWLASSIFIED.
The association of the sponsor with the item(s) being procured here-
under is classified SECRET. The classified information shall be
divulged only on a "need-to-know" basis and then only to those whd
have been authorized in writing by this Government component to have
access to classified information.
Section 7. Non-Publicity: It is a specific condition of the agreement that the
Contractor shall not use or allow to be used any aspect, of this agree-
ment for publicity or advertisement purposes. The Contractor may
request a waiver of the fbregoing but shall not, deviate therefrom
unless so authorized in writing by the Contracting Officer.
NAME OF CONTRACTOR
NOTICE
This material contains information affecting the National Defense of the United
States within the meaning of the Espionage Laws, Title 18, U.S.C. Secs. 793 and
794, the transmission or revelation of which in any manner to an unauthorized
person is prohibited by law.
SECRET
GROUP 1
EXCLUDED FROM AUTOMATIC DOWNGRADING
AND DECLASSIFICATION
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GENERAL PROVISIONS
(Supply Contract)
INDEX
Page
Page
1. Definitions
1
18. Termination for Convenience of the Government
4
2. Changes
1
19. Authorization and Consent
5
3. Extras
1
20. Notice and Assistance Regarding Patent Infringement
5
4. Variation in Quantity
1
21. Buy American Act
5
5. Inspection
1
22. Notice to the Government of Labor Disputes
5
6. Responsibility for Supplies
1
23. Patent Indemnity (Predetermined)
5
7. Payments
2
24. Filing of Patent Applications
5
8. Assignment of Claims
2
25. Data
6
9. Additional Bond Security
2
26. Data - Withholding of Payment
6
10. Federal, State and Local Taxes
2
27. Utilization of Small Business Concerns
6
11. Default
2
28. Examination of Records
6
12. Disputes
3
29. Gratuities
6
13. Work Hours Act of 1962 - Overtime Compensation
3
30. Convict Labor
6
14. Walsh-Healy Public Contracts Act
3
31. Priorities, Allocations and Allotments
6
15. Nondiscrimination in Employment
3
32. Packing and Processing Charges
6
16. Officials Not to Benefit
3
33. Identification and Marking of Shipments
6
17. Covenant Against Contingent Fees
3
34. Security Requirements
7
1. DEFINITIONS
As used throughout this contract, the following terms shall have the
meanings set forth below:
(a) The term ahead of the agency" or 'Secretary" means the Secre-
tary, the Under Secretary, any Assistant Secretary, or any other head or
assistant head of the executive or military department or other Federal
agency; and the term his duly authorized representative" means any
person or persons or board (other than the Contracting Officer) author-
ized to act for the head of the agency or the Secretary.
(b) The term "Contracting Officer" means the person executingthis
contract on behalf of the Government, and any other officer or civilian
employee who is a properly designated Contracting Officer; and the term
includes, except as otherwise provided in this contract, the authorized
representative of a Contracting Officer acting within the limits of his
authority.
(c) Except as otherwise provided inthis contract, the term "subcon-
tracts" includes purchase orders under this contract.
2. CHANGES
The Contracting Officer may at any time, by a written order, and
without notice to the sureties, make changes,within the general scope of
this contract, in any one or more of the following: (I) Drawings, designs,
or specifications, where the supplies to be furnished are to be specially
manufactured for the Government in accordance therewith; (ii) method of
shipment or packing; and (iii) place of delivery. If any such change
causes an increase or decrease in the cost of, or the time required for,
the performance of any part of the work under this contract, whether
changed or not changed by any such order, an equitable adjustment shall
be made in the contract price or delivery schedule, or both, and the con-
tract shall be modified in writing accordingly. Any claim by the Con-
tractor for adjustment under this clause must be asserted within 30 days
from the date of receipt by the Contractor of the notification of change:
Provided, however, That the Contracting Officer, if he decides that the
facts justify such action, may receive and act upon any such claim as-
serted at any time prior to final payment under this contract. Where the
cost of property made obsolete or excess as a result of a change is in-
cluded in the Contractor's claim for adjustment, the Contracting Officer
shall have the right to prescribe the manner of disposition of such prop-
erty. Failure to agree to any adjustment shall be a dispute concerning a
question of fact within the meaning of the clause of this contract entitled
"Disputes." However, nothing in this clause shall excuse the Contractor
from proceeding with the contract as changed.
3. EXTRAS
Except as otherwise provided in this contract, no payment for extras
shall be made unless such extras and the price therefor have been au-
thorized in writing by the Contracting Officer.
4. VARIATION IN QUANTITY
No variation in the quantity of any item called for by this contract
will be accepted unless such variation has been caused by conditions of
loading, shipping, or packing, or allowances in manufacturing processes,
and then only to the extent, if any, specified elsewhere in this contract.
5. INSPECTION
(a) All supplies (which term throughout this clause includes without
limitation raw materials, components, intermediate assemblies, and
end products) shall be subject to inspection and test by the Government,
to the extent practicable at all times and places including the period of
manufacture, and in any event prior to acceptance.
(b) In case any supplies or lots of supplies are defective in material
or workmanship or otherwise not inconformity with the requirements of
this contract, the Government shall have the right either to reject them
(with or without instructions as to their disposition) or to require their
correction. Supplies or lots of supplies which have been rejected or
1
required to be corrected shall be removed or, if permitted or required
by the Contracting Officer, corrected in place by and at the expense of
the Contractor promptly after notice, and shall not thereafter be tendered
for acceptance unless the former rejection or requirement of correction
IS disclosed. If the Contractor fails promptly to remove such supplies
or lots of supplies which are required to be removed, or promptly to re-
place or correct such supplies or lots of supplies, the Government either
(1) may by contract or otherwise replace or correct such supplies and
charge to the Contractor the cost occasioned the Government thereby;
or (ii) may terminate this contract for default as provided in the clause
of this contract entitled 'Default." Unless the Contractor corrects or
replaces such supplies within the delivery schedule,the Contracting Of-
ficer may require the delivery of such supplies at a reduction in price
which is equitable under the circumstances. Failure to agree to such re -
duction of price shall be a dispute concerning a question of fact within
the meaning of the clause of this contract entitled "Disputes."
(c) If any inspection or testis made by the Government on the prem-
ises of the Contractor or a subcontractor, the Contractor without addi-
tional charge shall provide all reasonable facilities and assistance for the
safety and convenience of the Government inspectors in the performance
of their duties. If Government inspection or testis made at a point other
than the premises of the Contractor or a subcontractor, it shall be at the
expense of the Government except as otherwiseprovided_in this contract:
Provided, That in case of rejection the Government shall not be liable
for any reduction in value of samples used in connection with such in-
spection or test. AU inspections and tests by the Government shall be
performed in such a manner as not to unduly delay the work. The Gov-
ernment reserves the right to charge to the Contractor any additional
cost of Government inspection and test when supplies are not ready at
the time such inspection and testis requestedby the Contractor or when
reinspection or retest is necessitated by prior rejection. Acceptance
or rejection of the supplies shall be made as promptly as practicable
after delivery, except as otherwise provided in this contract; but failure
to inspect and accept or reject supplies shall neither relieve the Con-
tractor from responsibility for such supplies as are not in accordance
with the contract requirements nor impose liability on the Government
therefor.
(d) The inspection and test by the Government of any supplies or lots
thereof does not relieve the Contractor from any responsibility regarding
defects or other failures to meet the contract requirements which may
be discovered prior to acceptance. Except as otherwise provided in this
contract, acceptance shall be conclusive except as regards latent defects,
fraud, or such gross mistakes as amount to fraud.
(e) The Contractor shall provide and maintain an inspection system
acceptable to the Government covering the supplies hereunder. Records
of all inspection work by the Contractor shall be kept complete and
available to the Government during the performance of this contract and
for such longer period as may be specified elsewhere in this contract.
6. RESPONSIBILITY FOR SUPPLIES
Except as otherwise provided in this contract, (i)the Contractor shall
be responsible for the supplies covered by this contract until they are de -
livered at the designated delivery point, regardless of the point of in-
spection; (ii) after delivery to the Government at the designated point and
prior to acceptance by the Government or rejection and,giving notice
thereof by the Government, the Government shall be responsible for the
loss or destruction of or damage to the supplies only if such loss, de-
struction, or damage results from the negligence of officers, agents, or
employees of the Government acting within the scope of their employ-
ment; and (iii) the Contractor shall bear all risks as to rejected supplies
after notice of rejection, except that the Government shall be responsible
for the loss, or destruction of, or damage to the supplies only if such
loss, destruction or damage results from the gross negligence of offi-
cers, agents, or employees of the Government actingwithin the scope of
their employment.
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7. PAYMENTS
The Contractor shall be paid, upon the submission of proper invoices
or vouchers, the prices stipulated herein for supplies delivered and ac-
cepted or services rendered and accepted, less deductions, if any, as
herein provided. Unless otherwise specified, payment will be made on
partial deliveries accepted by the Government when the amount due on
such deliveries so warrants; or, when requested by the Contractor, pay-
ment for accepted partial deliveries shall be made whenever such pay-
ment would equal or exceed either $1,000 or 50 percent of the total
amount of this contract.
8. ASSIGNMENT OF CLAIMS
(a) Pursuant to the provisions of the Assignment of Claims Act of
1940, as amended (31 U. S. Code 203, 41 U. S. Code 15), if this contract
provides for payments aggregating $1,000 or more, claims for monies
due or to become due the Contractor from the Government under this
contract may be assigned to a bank, trust company, or other financing
institution, including any Federal lending agency, and may thereafter be
further assigned and reassigned to any such institution. Any such as-
signment or reassignment shall cover all amounts payable under this
contract and not already paid, and shall not be made to more than one
party, except that any such assignment or reassignment raay be made to
one party as agent or trustee for two or more parties participating in
such financing. Notwithstanding any provisions of this contract, payments
to an assignee of any monies due or to become due under this contract
shall not, to the extent provided in said Act, as amended, be subject to
reduction or set-off. (The preceding sentence apOies oiLly if this con-
tract is with the Department of Defense, the General Services Adminis-
tration, the Atomic Energy Commission, or any other department or
agency of the United States designated by the President pursuant to clause
4 of the proviso of section 1 of the Assignment of Claims Act of 1940, as
amended by the Act of May 15, 1951, 65 Stat. 41.)
(b) In no event shall copies of this contract or of any plans, specifi-
cations, or other similar documents relating to workunder this contract,
if marked "Top Secret," 'Secret," or 'Confidential," be furnished to any
assignee of any claim arising under this contract or to any other person
not entitled to receive the same: Provided, That a copy of any part or
all of this contract so marked may be furnished, or any information
contained therein may be disclosed, to such assignee upon the prior
written authorization of the Contracting Officer. (See General Provision
33 - "Security Requirements.")
9. ADDITIONAL BOND SECURITY
If any surety upon any bond furnished in connection with this contract
becomes unacceptable to the Government, or if any such surety fails to
furnish reports as to his financial condition from time to time as re-
quested by the Government, the Contractor shall promptly furnish such
additional security as may be required from time to time to protect the
interests of the Government and of persons supplyinglabor or materials
in the prosecution of the work contemplated by this contract.
10. FEDERAL, STATE, AND LOCAL TAXES (The provisions of this
clause shall be applicable only if the amount of the contract ex-
ceeds $2,500.00)
(a) As used throughout this clause, the term "tax inclusive date"
means the date of negotiated contracts and the date set for the opening of
bids for contracts entered into through formal advertising. As to addi-
tional supplies or services procuredby modification to this contract, the
term "tax inclusive date" means the date of such modification.
(h) Except as may be otherwise provided in this contract, the con-
tract price includes all Federal, State ,and local taxes and duties in effect
and applicable to this contract on the tax inclusive date, except taxes
(other than Federal transportation taxes) from which the Government, the
Contractor, or the transactions or property covered by this contract are
then exempt. Unless specifically excluded, duties are included in the
contract price, and, if freight is included in the contract price, Federal
transportation taxes are likewise included.
(c) (1) If the Contractor is required to pay or bear the burden
(i) of any tax or duty, which either was not to be included in the
contract price pursuant to the requirements of paragraph (b), or was
specifically excluded from the contract price by a provision of this
contract; or
(ii) of an increase in rate of any tax or duty, whether or not such
tax or duty was excluded from the contract price;
or of any interest or penalty thereon, the contract price shall be cor-
respondingly increased; provided that the Contractor warrants in
writing that no amount for such tax, duty, or rate increase was in-
cluded in the contract price as a contingency reserve or otherwise; and
provided further that liability for such tax, duty, rate increase, in-
terest, or penalty was not incurred through the fault or negligence of
the Contractor or his failure to follow instructions of the Contracting Of -
ficer.
(2) If the Contractor is not required to pay or bear the burden,
or obtains ?a refund or drawback, in whole or in part, of any tax, duty, in
or penalty which (I) was to be included in the contract price
pursuant to the requirements of paragraph (b), (ii) was included in the
contract price, or (iii) was the basis of an increase in the contract
price, the contract price shall be correspondingly decreased or the
amount of such relief, refund, or drawback shall be paid to the Gov-
ernment, as directed by the Contracting Officer. The contract price
also shall be correspondingly decreased if the Contractor, through its
fault or negligence or its failure to follow instructions of the Con-
tracting Officer, is required to pay or bear the burden, or does not
obtain a refund or drawback of any such tax, duty, interest, or penalty.
Interest paid or credited to the Contractor incident to a refund of taxes
shall inure to the benefit of the Government to the extent that such in-
terest was earned after the Contractor was paid or reimbursed by the
Government for such taxes.
(3) Invoices or vouchers covering any adjustment of the contract
price pursuant to this paragraph (c) shall set forth the amount thereof
as a separate item and shall identify the particular tax involved.
(4) Nothing in this paragraph (c) shall be applicable to social
security taxes; net income taxes; excess profit taxes; capital stock
taxes; Federal transportation taxes, except changes in the rate thereof,
including repeal, pertaining to shipments from the Contractor to the
Government; unemployment compensation taxes; or any State and local
taxes, except those levied on or measured by the contract or sales
price of the services or completed supplies furnished under this con-
tract, including gross income taxes, gross receipts taxes, sales and
use taxes, excise taxes, or franchise or occupation taxes measured by
sales or receipts from sales.
(5) No adjustment of less than $100 shall be made in the contract
price pursuant to this paragraph.
(d) Unless there does not exist any reasonable basis to sustain an
exemption, the Government agrees upon request of the Contractor, with-
out further liability except as otherwise provided in this contract, to fur-
nish evidence appropriate to establish exemption from (I) any Federal
tax, which the Contractor warrants in writing was excluded from the con-
tract price, or (II) any State or local tax; provided that evidence appro-
priate to establish exemption from duties will be furnished, and Govern-
ment bills of lading will be issued, only at the discretion of the Con-
tracting Officer. In addition, the Contracting Officer may furnish evi-
dence appropriate to establish exemption from any tax that may, pursuant
to this clause, give rise to either an increase or decrease in the contract
price.
(e) (1) The Contractor shall promptly notify the Contracting Officer
of all matters pertaining to Federal, State, and local taxes and duties
that reasonably may result in either an increase or decrease in the con-
tract price.
(2) Whenever an increase or decrease in the contractprice may
be required under this clause, the Contractor shall take action as di-
rected by the Contracting Officer, and the contract price shall be
equitably adjusted to cover the costs of such action, including any in-
terest, penalty, and reasonable attorney's fees.
11. DEFAULT
(a) The Government may, subject to the provisions of paragraph (c)
below, by written notice of default to the Contractor, terminate the whole
or any part of this contract in any one of the following circumstances:
(1) if the Contractor fails to make delivery of the supplies or to
perform the services within the time specified herein or any exten-
sion thereof; or
(ii) if the Contractor fails to perform any of the other provisions
of this contract, or so fails to make progress as to endanger per-
formance of this contract inaccordance with its terms, and in either
of these two circumstances does not cure suchfailure within a peri-
od of 10 days (or such longer period as the Contracting Officer may
authorize in writing) after receipt of notice from the Contracting Of-
ficer specifying such failure.
(b) In the event the Government terminates this contract in whole or
in part as provided in paragraph (a) of this clause, the Government may
procure, upon such terms and in such manner as the Contracting Officer
may deem appropriate, supplies or services similar to those so ter-
minated, and the Contractor shall be liable to the Government for any ex-
cess costs for such similar supplies or services: Provided, That the
Contractor shall continue the performance of this contract to the extent
not terminated under the provisions of this clause.
(c) Except with respect to defaults of subcontractors , the Contractor
shall not be liable for any excess costs if the failure to perform the con-
tract arises out of causes beyond the control and without the fault or
negligence of the Contractor. Such causes may include, but are not re-
stricted to, acts of God or of the public enemy, acts of the Government
in either its sovereign or contractual capacity, fires, floods, epidemics,
quarantine restrictions, strikes ,freight embargoes , and unusually severe
weather; but in every case the failure to perform must be beyond the
control and without the fault or negligence of the Contractor. If the
failure to perform is caused by the default of a subcontractor, and if
such default arises out of causes beyond the control of both the Con-
tractor and subcontractor, and without the fault or negligence of either
of them, the Contractor shall not be liable for any excess costs for fail-
ure to perform, unless the supplies or services to be furnished by the
subcontractor were obtainable from other sources in sufficient time to
permit the Contractor to meet the required delivery schedule.
(d) If this contract is terminated as provided in paragraph (a) of
this clause, the Government, in addition to any other rights provided in
this clause, may require the Contractor to transfer itle and deliver to
the Government, in the manner and to the extent dii.ected by the Con-
tracting Officer, (1) any completed supplies, and (ii) such partially com-
pleted supplies and materials, parts, tools, dies, jigs, fixtures, plans,
2
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drawings, infOrmation, and contract rights (hereinafter called "manu-
facturing materials") as the Contractor has specifically produced or
specifically acquired for the performance of such part of this contract
as has been terminated; and the Contractor shall, upon direction of the
Contracting Officer, protect and preserve property in possession of the
Contractor in which the Government has an interest. Payment for
completed supplies delivered to and accepted by the Government shall
be at the contract price. Payment for manufacturing materials de-
livered to and accepted by the Government and for the protection and
preservation of property shall be in an amount agreed upon by the Con-
tractor and the Contracting Officer; failure to agree to such amount
shall be a dispute concerning a question of fact within the meaning of
the clause of this contract entitled "Disputes." The Government may
withhold from amounts otherwise due the Contractor for such com-
pleted supplies or manufacturing materials such sum as the Contract-
ing Officer determines to be necessary to protect the Government against
loss because of outstanding liens or claims of former lien holders.
(e) If, after notice of termination of this contract under the pro-
visions of this clause, it is determined for any reason that the Contractor
was not in default under the provisions of this clause, or that the default
was excusable under the provisions of this clause, the rights and ob-
ligations of the parties shall, if the contract contains a clause providing
for termination for convenience of the Government, be the same as if
the notice of termination had been issued pursuant to such clause.
If, after notice of termination of this contract under the provisions
of this clause, it is determined for any reason that the Contractor was
not in default under the provisions of this clause, and if this contract
does not contain a clause providing for termination for convenience of
the Government, the contract shall be equitably adjusted to compensate
for such termination and the contract modified accordingly; failure to
agree to any such adjustment shall be a dispute concerning a question of
fact within the meaning of the clause of this contract entitled "Disputes."
(f) The rights and remedies of the Government provided in this
clause shall not be exclusive and are in addition to any other rights
and remedies provided by law or under this contract.
12. DISPUTES
(a) Except as otherwise provided in this contract, any dispute
concerning a question of fact arising under this contract which is not
disposed of by agreement shall be decided by the Contracting Officer,
who shall reduce his decision to writing and mail or otherwise furnish
a copy thereof to the Contractor. The decision of the Contracting Of-
ficer shall be final and conclusive unless, within 30 days from the date
of receipt of such copy, the Contractor mails or otherwise furnishes
to the Contracting Officer a written appeal addressed to the Secre-
tary. The decision of the Secretary or his duly authorized representa-
tive for the determination of such appeals shall be final and conclu-
sive 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 evi-
dence. In connection with any appeal proceeding under this clause,
the Contractor shall be afforded an opportunity to be heard and to offer
evidence in support of its appeal. Pending final decision of a dispute
hereunder, the Contractor shall proceed diligently with the perform-
ance of the contract and in accordance with the Contracting Officer's
decision.
(b) This 'Disputes" clause does not preclude consideration of law
questions in connection with decisions provided for in paragraph (a)
above: Provided, That nothing in this contract shall be construed as
making final the decision of any administrative official, representative,
or board on a question of law.
13. WORK HOURS ACT OF 1962--OVERTIME COMPENSATION
This contract, to the extent that it is of a character specified in the
Work Hours Act of 1962 (Public Law 87-581, 76 Stat. 357-360) and is
not covered by the Walsh-Healey Public Contracts Act (41 U.S.C. 35-45),
is subject to the following provisions and to all other provisions and ex-
ceptions of said Work Hours Act of 1962.
(a) No contractor or subcontractor contracting for any part of the
contract work shall require or permit any laborer or mechanic to be
employed on such work in excess of eight hours in any calendar day or
in excess of forty hours in any workWeek'unless such laborer or me-
chanic receives compensation at a rate not less than one and one-half
times his basic rate of pay for all hours worked in excess of eight hours
in any calendar day or in excess of forty hours in such workweek, which-
ever is the greater number of overtime hours.
(b) In the event of any violation of the provisions of paragraph (a),
the contractor and any subcontractor responsible for such violation shall
be liable to any affected employee for his unpaid wages. In addition, such
contractor or subcontractor shall be liable to the United States for liq-
uidated damages. Such liquidated damages shall be computed, with
respect to each individual laborer or mechanic employed in violation
of the provisions of paragraph (a), in the sum of $10 for each calendar
day on which such employee was required or permitted to work in excess
of eight hours or in excess of forty hours in a workweek without payment
of the required overtime wages.
(c) The Contracting Officer may withhold, or cause to be withheld,
from moneys payable on account of workperformed by the contractor or
subcontractor, the full amount of wages required by this contract and
3
such sums as may administratively be determined to be necessary to
satisfy any liabilities of such contractor or subcontractor for liquidated
damages as provided in paragraph (b).
14. WALSH-HEALY PUBLIC CONTRACTS ACT
If this contract is for the manufacture or furnishing of materials,
supplies, articles, or equipment in an amount which exceeds or may ex-
ceed $10,000 and is otherwise subject to the Walsh-Healy Public Con-
tracts Act, as amended (41 U.S. Code 35-45),there are hereby incorpo-
rated by reference all representations and stipulations required by said
Act and regulations issued thereunder by the Secretary of Labor, such
representations and stipulations being subject to all applicable rulings
and interpretations of the Secretary of Labor which are now or may
hereafter be in effect.
15. NONDISCRIMINATION IN EMPLOYMENT
In connection with the performance of work under this contract, the
Contractor agrees as follows:
(a) The Contractor will not discriminate against any employee or
applicant for employment because of race, creed, color, or national
origin. The Contractor will take affirmative action to ensure that appli-
cants are employed, and that employees are treated during employment,
without regard to their race, creed, color , or national origin. Such action
shall include, but not be limited to, the following: Employment, up-
grading, demotion or transfer; recruitment or recruitment advertising;
layoff or termination; rates of pay or other forms of compensation; and
selection for training, including apprenticeship. The Contractor agrees
to post in conspicuous places, available to employees and applicants for
employment, notices to be provided by the Contracting Officer setting
forth the provisions of this nondiscrimination clause.
(b) The Contractor will, in all solicitations or advertisements for
employees placed by or on behalf of the Contractor, state that all quali-
fied applicants will receive consideration for employment without regard
to race, creed, color, or national origin.
(c) The Contractor will send to each labor union or representative
of workers with which he has a collective bargaining agreement or other
contract or understanding, a notice, to be provided by the agency Con-
tracting Officer, advising the said labor union or workers representative
of the Contractor's commitments under this section, and shall post copies
of the notice in conspicuous places available to employees and applicants
for employment.
(d) The Contractor will comply with all provisions of Executive
Order No. 10925 of March 6, 1961, and of the rules, regulations, and
relevant orders of the President's Committee on Equal Employment
Opportunity created thereby.
(e) The Contractor will furnish all information and reports required
by Executive Order No. 10925 of March 6,1961, and by the rules, regula-
tions, and orders of the said Committee or pursuant thereto, and will
permit access to his books, records, and accounts by the Contracting
agency and the Committee for purposes of investigation to ascertain com-
pliance with such rules, regulations, and orders.
(f) In the event of the Contractor's non-compliance with the nondis-
crimination clauses of this contractor withany of the said rules, regula-
tions, or orders, this contract may be cancelled in whole or in part and
the Contractor may be declared ineligible for further Government con-
tracts in accordance with procedures authorized in Executive Order No.
10925 of March 6, 1961, and such other sanctions may be imposed and
remedies invoked as provided in the said Executive Order or by rule,
regulation, or order of the President's Committee on Equal Employment
Opportunity, or as otherwise provided by law.
(g) The Contractor will include the provisions of the foregoing para-
graphs (a) through (f) in every subcontract or purchase order unless ex-
empted by rules, regulations, or orders of the President's Committee on
Equal Employment Opportunity issued pursuant to Section 303 of Ex-
ecutive Order No. 10925 of March 6, 1961, so that such provisions will
be binding upon each subcontractor or vendor. The Contractor will take
such action with respect to any subcontract or purchase order as the con -
tracting agency may direct as a means of enforcing such provisions, in
sanctions for non-compliance; provided, however, that in the
event the Contractor becomes involved in, or is threatened with, litiga-
tion with a subcontractor or vendor as a result of such direction by the
contracting agency, the Contractor may request the United States to enter
into such litigation to protect the interests of the United States.
16. OFFICIALS NOT TO BENEFIT
No member of or delegate to Congress, or resident commissioner,
shall be admitted to any share or part of this contract, or to any benefit
that may arise therefrom; but this provision shall not be construed to ex-
tend to this contract if made with a corporation for its general benefit.
17. 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, percentage, brokerage, or contingent
fee, excepting bona fide employees or bona fide established commercial
or selling agencies maintained by the Contractor for the purpose of se-
curing business. For breach or violation of this warranty the Govern-
ment shall have the right to annul this contract without liability or in its
discretion to deduct from the contract price or consideration, or other-
wise recover, the full amount of such commission, percentage, broker-
age, or contingent fee.
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18. TERMINATION FOR CONVENIENCE OF THE GOVERNMENT
(a) The performance of work under this contract maybe terminated
by the Government in accordance with this clause in whole, or from time
to time in part, whenever the Contracting Officer shall determine that
such termination is in the best interest of the Government. Any such
termination shall be effected by delivery to the Contractor of a Notice of
Termination specifying the extent to which performance of work under
the contract is terminated, and the date upon which such termination be
effective.
(b) After receipt of a Notice of Termination, and except as other-
wise directed by the Contracting Officer, the Contractor shall:
(i) stop work under the contract on the date and to the extent
specified in the Notice of Termination;
(ii) place no further orders or subcontracts for materials, serv-
ices or facilities, except as may be necessary for completion
of such portion of the work under the contract as is not
terminated;
(iii) terminate all order and subcontracts to the extent that they
relate to the performance of work terminated by the Notice
of Termination;
(iv) assign to the Government, in the manner , at the times, and to
the extent directed by the Contracting Officer, all of the
right, title, and interest of the Contractor under the orders
and subcontracts so terminated, in which case the Govern-
ment shall have the right, in its discretion, to settle or pay
any or all claims arising out of the termination of such
orders and subcontracts;
(v) settle all outstanding liabilities and all claims arising out of
such termination of orders and subcontracts, with the ap-
proval or ratification of the Contracting Officer, to the extent
he may require, which approval or ratification shall be final
for all the purposes of this clause;
(vi) transfer title and deliver to the Government, in the manner,
at the times, and to the extent, if any, directed by the Con-
tracting Officer, (A) the fabricated, or unfabricated parts,
work in process, completed work, supplies, and other mate-
rial produced as a part of, or acquired in connection with
the performance of, the work terminated by the Notice of
Termination, and (B) the completed or partially completed
plans, drawings, information, and other property which, if the
contract had been completed, would have been required to be
furnished to the Government;
(vii) use his best efforts to sell, in the manner, at the times, to
the extent, and at the price or prices directed or authorized
by the Contracting Officer, any property of the types referred
to in (vi) above; provided, however, that the Contractor (A)
shall not be required to extend credit to any purchaser, and
(B) may acquire any such property under the conditions pre-
scribed by and at a price or prices approved by the Contract-
ing 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 Contrac-
tor 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;
(viii) complete performance of such part of the work as shall not
have been terminated by the Notice of Termination; and
(ix) take such action as may be necessary, or as the Contracting
Officer may direct, for the 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 ac-
quire an interest.
At any time after expiration of the plant clearance period., as defined in
Section VIII, Armed Services Procurement Regulation, as it may be
amended from time to time, the Contractor may submit to the Contracting
Officer a list, certified as to quantity and quality, of any or all items of
terminations inventory not previously disposed of, exclusive of items the
disposition of which has been directed or authorized by the Contracting
Officer, and may request the Government to remove such items or enter
into a storage agreement covering them. Notlater than fifteen (15) days
thereafter, the Government will accept title to such items and remove
them or enter into a storage ageement covering the same; provided, that
the list submitted shall be subject to verificationby the Contracting Of-
ficer upon removal of the items, or if the items are stored, within forty -
five (45) days from the date of submission of the list, and any necessary
adjustment to correct the list as submitted shall be made prior to final
settlement.
(c) After receipt of a Notice of Termination, the Contractor shall
submit to the Contracting Officer his termination claim, in the form and
with certification prescribed by the Contracting Officer. Such claim shall
be submitted promptly but in no event later than one year from the ef -
fective date of termination, unless one or more extensions in writing are
granted by the Contracting Officer, upon request of the Contractor made
in writing within such one year period or authorized extension thereof.
However, if the Contracting Officer determines that the facts justify such
action, he may receive and act upon any such termination claim at any
time after such one year period or any extension thereof. Upon failure of
the Contractor to submit his termination claim within the time allowed,
the Contracting Officer may, subject to any Settlement Review Board ap-
provals required by Section VIII of the Armed Services Procurement
4
Regulation in effect as of the date of execution of this contract, deter -
mine, 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), and subject to any
Settlement Review Board approvals required by Section VIII of the Armed
Services Procurement Regulation in effect as of the date of execution of
this contract, the Contractor and the Contracting Officer may agree upon
the whole or any part of the amount or amounts to be paid to the Con-
tractor by reason of the total or partial termination of work pursuant to
this clause, which amount or amounts may include a reasonable allowance
for profit on work done; provided, that such agreed amount or amounts,
exclusive of settlement costs, shall not exceed the total contract price as
reduced by the amount of payments otherwise made and as further re-
duced by the contract price of work not terminated. The contract shall
be amended accordingly, and the Contractor shall be paid the agreed
amount. Nothing in paragraph (e) of this clause, prescribing the amount
to be paid to the Contractor in the event of failure of the Contractor and
the Contracting Officer to agree upon the whole amount to be paid to the
Contractor by reason of the termination of workpursuant to this clause,
shall be deemed to limit, restrict, or otherwise determine or affect the
amount or amounts which may be agreedupon to be paid to the Contrac-
tor pursuant to this paragraph (d).
(e) In the event of the failure of the Contractor and the Contracting
Officer to agree as provided in paragraph (d) upon the whole amount to be
paid to the Contractor by reason of the termination of work pursuant to
this clause, the Contracting Officer shall, subject to any Settlement Re-
view Board approvals required by Section VIII of the Armed Services
Procurement Regulation in effect as of the date of execution of this con-
tract, 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 amounts determined as follows:
(i) for completed supplies accepted by the Government (or sold
or acquired as provided in paragraph (b) (vii)above) and not
theretofore paid for, a sum equivalent to the aggregate price
for such supplies computed in accordance with the price or
prices specified in the contract, appropriately adjusted for
any saving of freight or other charges;
(ii) the total of --
(A ) the costs incurred in the performance of the work termi -
nated, including initial costs and preparatory expense
allocable thereto, but exclusive of any costs attributable
to supplies paid or to be paid for under paragraph (e) (i)
hereof;
(B) the cost of settling and paying claims arising out of the
termination of work under subcontracts or orders, as
provided in paragraph (b) (v) above ,which are properly
chargeable to the terminated portion of the contract (ex-
clusive of amounts paid or payable on account of supplies
or materials delivered or services furnished by subcon-
trctors or vendors prior to the effective date of the No-
tice of Termination, which amounts shall be included in
the costs payable under (A) above; and
(C) a sum, as a profit, equal to 2percent of that part of the
amount determined under (A) above which represents the
cost of articles and materials not processed by the Con -
tractor , plus a sum equal to 8percent of the remainder
of such amount, but the aggregate of such sums shall not
exceed 6 percent of the whole of the amount determined
under (A) above; provided, however, that if it appears
that the Contractor would have sustained a loss on the
entire contract had it been completed, no profit shall be
included or allowed under this subdivision (C) and an ap-
propriate adjustment shall be made reducing the amount
of the settlement to reflect the indicated rate of loss; and
(iii) 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 subcontracts thereunder, to-
gether with reasonable storage, transportation, and other
costs incurred in connection with the protection or disposi-
tion of property allocable to this contract.
The total sum to be paid to the Contractor under (i) and (ii) of this para-
graph (e) shall not exceed the total contract price as reduced by the
amount of payments otherwise made and as further reduced by the con-
tract price of work not terminated. Except for normal spoilage, and
except to the extent that the Government shall have otherwise expressly
assumed the risk of loss, there shall be excluded from the amounts pay-
able to the Contractor as provided in (e) (i) and (ii) (A) above, the fair
value, as determined by the Contracting Officer, of property which is
destroyed, lost, stolen, or damaged so as to become undeliverable to the
Government, or to a buyer pursuant to paragraph (b) (vii).
(f) Any determination of costs under paragraph (c) or (e) hereof
shall be governed by the principles for consideration of costs set forth
in Section XV, Part 2, of the Armed Services Procurement Regulation,
as in effect on the date of this contract.
(g) The Contractor shall have the right of appeal, under the clause
of this contract entitled "Disputes," from any determination made by the
Contracting Officer under paragraph (c) or (e) above, except that if the
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Contractor has'ittiled to submit his 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 Of -
ficer has made a determination of the amount due under paragraph (c) or
(e) above, the Government shall pay to the Contractor the following: (1)
if there is no right of appeal hereunder of 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.
(h) In arriving at the amount due the Contractor under this clause
there shall be deducted (i) all unliquidated advance or other payments
on account theretofore made to the Contractor, applicable to the ter -
minated portion of this contract, (ii) any claim which the Government
may have against the Contractor in connection with this contract, and
(iii) the agreed price for, or the proceeds of sale of, any materials, sup-
plies, or other things acquired by the Contractor or sold, pursuant to the
provisions of this clause, and not otherwise recovered by or credited to
the Government.
(1) If the termination hereunder be partial, prior to the settlement
of the terminated portion of this contract, the Contractor may file with
the Contracting Officer a request in writing for an equitable adjustment
of the price or prices specified in the contract relating to the continued
portion of the contract (the portion not terminated by the Notice of Ter -
mination), and such equitable adjustment as may be agreed upon shall
be made in such price or prices.
(j) The Government may from time to time, under such terms and
conditions as it may prescribe, make partial payments and payments on
account against costs incurred by the Contractor in connection with the
terminated portion of this contract whenever in the opinion of the Con-
tracting Officer the aggregate of such payments shall be within the
amount to which the Contractor will be entitled hereunder. If the total
of such payments is in excess of the amount finally agreed or deter-
mined to be due under this clause, such excess shall be payable by the
Contractor to the Government upon demand, together with interest com-
puted at the rate of 8 percent 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 in-
terest shall be charged with respect to any such excess payment attribut-
able 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, or such later date as determined by the
Contracting Officer by reason of the circumstances.
(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 three years after final settlement under this contract, shall
preserve and make available to the Government at all reasonable times
at the office of the Contractor but without direct charge to the Govern-
ment, all his books, records, documents, and other evidence bearing on
the costs and expenses of the Contractor under this contract and relating
to the work terminated hereunder, or ,to the extent approved by the Con-
tracting Officer, photographs, micro-photographs, or other authentic re -
productions thereof.
19. AUTHORIZATION AND CONSENT
The Government hereby gives its authorization and consent (without
prejudice to its rights of indemnification, if such rights are provided for
in this contract) for all use and manufacture, in the performance of this
contract or any part hereof or any amendment hereto or any subcontract
hereunder (including any lower -tier subcontract), of any invention de-
scribed in and covered by a patent of the United States (i) embodied in the
structure or composition of any article the delivery of which is accepted
by the Government under this contract, or (11)utilized in the machinery,
tools, or methods the use of which necessarily results from compliance
by the Contractor or the using subcontractor with (a) specifications or
written provisions now or hereafter forming a part of this contract, or
(b) specific written instructions given by the Contracting Officer direct-
ing the manner of performance. The Contractor's entire liability to the
Government for infringement of a patent of the United States shall be de-
termined solely by the provisions of the indemnity clause, if any, in-
cluded in the contract and the Government assumes liability for all other
infringement to the extent of the authorization and consent hereinabove
granted.
20. NOTICE AND ASSISTANCE REGARDING PATENT INFRINGEMENT
The provisions of this clause shall be applicable only if the amount
of this contract exceeds $10,000.
(a) The Contractor shall report to the 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 any suit against the Government, or any claim
against the Government made before suit has been instituted, on account
of any alleged 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 Contrac-
tor pertaining to such suit or claim. Such evidence and information shall
be furnished at the expense of the Government except in those cases in
which the Contractor has agreed to indemnify the Government against the
claim being asserted.
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21. BUY AMERICAN ACT
(a) In acquiring end products, the Buy American Act (41 U.S.C.
10a -d) provides that the Government give preference to domestic source
end products. For the purpose of this clause:
(i) "components" means those articles, materials, and sup-
plies, which are directly incorporated in the end products;
(ii) "end products" means those articles, materials, and sup-
plies, which are to be acquired under this contract for public use; and
(iii) a "domestic source end product" means (A) an unmanu-
factured end product which has been mined or produced in the United
States and (B) an end product manufactured in the United States if the
cost of the components thereof which are mined, produced, or manu-
factured in the United States or Canada exceeds 50 percent of the cost
of all its components. For the purposes of this (a) (iii) (B), components
of foreign origin of the same type or kind as the products referred to in
(b) (ii) of this clause shall be treated as components mined, produced,
or manufactured in the United States.
(b) The Contractor agrees that there will be delivered under this
contract only domestic source end products, except end products:
(1) which are for use outside the United States;
(ii) which the Government determines are not mined,produced,
or manufactured in the United States in sufficient and reasonably avail-
able commercial quantities and of a satisfactory quality;
(iii) as to which the Secretary determines the domestic prefer -
ence to be inconsistent with the public interest; or
(iv) as to which the Secretary determines the cost to the Govern-
ment to be unreasonable.
(The foregoing requirements are administered in accordance
with Executive Order Na. 10582, dated December 17, 1954.)
22. NOTICE TO THE GOVERMENT OF LABOR DISPUTES
(a) Whenever the Contractor has knowledge that any actual or poten-
tial labor dispute is delaying or threatens to delay the timely perform-
ance of this contract, the Contractor shall immediately give notice there-
of , including all relevant information with respect thereto, to the Con-
tracting Officer.
(b) The Contractor agrees to insert the substance of this clause, in
this paragraph (b), in any subcontract hereunder as to which a la-
bor dispute may delay the timely performance of this contract; except
that each such subcontract shall provide that in the event its timely per
is delayed or threatened by delay by any actual or potential
labor dispute, the subcontractor shall immediately notify his next higher
tier subcontractor, or the prime contractor, as the case may be, of all
relevant information with respect to such dispute.
23. PATENT INDEMNITY (PREDETERMINED)
The provisions of this clause shall be applicable only to such sup-
plies, ordered hereunder which normally are or have been sold or of-
fered for sale by the Contractor to the public in the commercial open
market or are such supplies with relatively minor modifications made
thereto. If the amount of this contract is in excess of $5,000, the Con-
tractor shall indemnify the Governmentand its officers,agents, and em-
ployees against liability, including costs, for infringement of any United
States letters patent (except letters patent issued upon an application
which is now or may hereafter be kept secret or otherwise withheld from
issue by order of the Government) arising out of the manufacture or de-
livery of supplies or out of construction, alteration, modification, or re-
pair of real property (hereinafter referred to as "construction works)
under this contract, or out of the use or disposal by or for the account
of the Government of such supplies or construction work. The foregoing
indemnity shall not apply unless the Contractor shall have been informed
as soon as practicable by the Government of the suit or action alleging
such infringement, and shall have been given such opportunity as is af-
forded by applicable laws, rules, or regulations to participate in the de-
fense thereof; and further, such indemnity shall notapply if: (i) the in-
fringement results from compliance with specific written instructions of
the Contracting Officer directing a change in the supplies to be delivered
or in the materials or equipment to be used, or directing a manner of
performance of the contract not normally used by the Contractor; or (ii)
the infringement results from the addition to, or change in, the supplies
furnished or construction work performed, which addition or change was
made subsequent to delivery or performance by the Contractor; or (iii)
the claimed infringement is settled without the consent of the Contractor,
unless required by final decree of a court of competent jurisdiction.
The foregoing shall not apply to the contract items, if any, specifi-
cally excluded herefrom in the SCHEDULE.
24. FILING OF PATENT APPLICATIONS
(a) Before filing or causing to be filed a patent application dis-
closing any subject matter of this contract, which subject matter is clas-
sified "SECRET" or higher, the Contractor shall, citing the thirty (30)
day provision below, transmit the proposed application to the Contracting
Officer for determination whether, for reasons of national security, such
application should be placed under an order of secrecy or sealed in ac-
cordance with the provisions of 35 U.S. Code 181 - 188 or the issuance
of a patent should be otherwise delayed under pertinent statutes or reg-
ulations; and the Contractor shall observe any instructions of the Con-
tracting Officer with respect to the manner of delivery of the patent ap-
plication to the U.S. Patent Office for filing, but the Contractor shall not
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be denied the right to file suchpatent application. If the Contracting Of-
ficer 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 Contractor shall 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 appli-
cation for determination whether, for reasons of national security, such
application should be placed under an order of secrecy or the issuance
of a patent should be otherwise delayed under pertinent statutes or reg-
ulations.
(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.
25. DATA
(a) The term 'Subject Data" as used herein includes writings , sound
recordings, pictorial reproductions, drawings or other graphical repre-
sentations, and works of any similar nature (whether or not copyrighted)
which are specified to be delivered under this contract. The term does
not include financial reports, cost analyses, and other information in-
cidental to contract administration.
(b) The Contractor agrees to and does hereby grant to the Govern-
ment, and to its officers, agents, and employees acting within the scope
of their official duties, a royalty-free, nonexclusive and irrevocable li-
cense throughout the world for Government purposes to publish, trans-
late, reproduce, deliver, perform, dispose of , and to authorize others so
to do, all Subject Data now or hereafter covered by copyright.
(c) The Contractor shall not include in the Subject Data any copy-
righted matter, without the written approval of the Contracting Officer,
unless he provides the Government with the written permission of the
copyright owner for the Government to use such copyrighted matter in
the manner provided in paragraph (b) above.
(d) The Contractor shall report to the Contracting Officer , promptly
and in reasonable written detail, each notice or claim of copyright in-
fringement received by the Contractor with respect to all Subject Data
delivered under this contract.
(e) Nothing contained in this clause shall imply a license to the
Government under any patent or be construed as affecting the scope of
any license or other right otherwise granted to the Government under
any patent.
(f) Unless otherwise limited below, the Government may duplicate,
use, and disclose in any manner and for any purpose whatsoever, and
have others so do, all Subject Data delivered under this contract.
(g) The Contractor recognizes that the Government, or a foreign
government with funds derived through the Mutual Security Program
or otherwise through the United States Government, may contract for
property or services with respect to which the vendor may be liable
to the Contractor for charges for the use of Subject Data on account
of such a contract. The Contractor further recognizes that it is the
policy of the Government not to pay in connection with its contracts, or
to allow to be paid in connection with contracts made with funds derived
through the Mutual Security Program or otherwise through the United
States Government, charges for data which the Government has a right
to use and disclose to others, or which is in the public domain, or with
respect to which the Government has been placed in possession without
restrictions upon its use and disclosure to others. This policy does not
apply to reasonable reproduction, handling, mailing, and similar admin-
istrative costs incident to the furnishing of such data. In recognition of
this policy, the Contractor agrees to participate inand make appropriate
arrangements for the exclusion of such charges from such contracts or
for the refund of amounts received by the Contractor with respect to any
such charges not so excluded.
(h) Notwithstanding any provisions of this contract concerning in-
spection and acceptance, the Government shall have the right at any time
to modify, remove, obliterate or ignore any marking not authorized by
the terms of this contract on any piece of Subject Data furnished under
this contract.
26. DATA - WITHHOLDING OF PAYMENT
If "Subject Data" (as defined in the clause of this contract entitled
"Data"), or any part thereof , is not delivered within the time specified by
this contract or is deficient upon delivery (including having restrictive
markings not, specifically authorized by the contract), the Contracting Of-
ficer may, until such data is delivered or deficiencies are corrected,
withhold payment to the Contractor of ten percent (10%) of the contract
price unless a lesser withholding is specified in the schedule. Payments
shall not be withheld nor any other action taken pursuant to this clause
where the Contractor's failure to make timely delivery or to deliver data
without deficiencies arises out of causes beyond the control and without
the fault or negligence of the Contractor within the meaning of the clause
hereof entitled "Default." The withholding of any amount or subsequent
payment thereof to the Contractor shall not be construed as a waiver of
any rights accruing to the Government under this contract.
27. UTILIZATION OF SMALL BUSINESS CONCERNS
(a) It is the policy of the Government as declared by the Congress
that a fair proportion of the purchases and contracts for supplies and
services for the Government be placed with small business concerns.
6
(b) The Contractor agrees to accomplish the maximum amount of
subcontracting to small business concerns that the Contractor finds to be
consistent with the efficient performance of this contract.
28. EXAMINATION OF RECORDS
The provisions of the clause are applicable if the amount of the con-
tract exceeds $2,500 and was entered into by means of negotiation, but is
not applicable if entered into by means of formal advertising.
(a) The Contractor agrees that the Comptroller of the Contracting
Agency or any of his duly authorizedrepresentatives shall, until the ex-
piration of three years after final payment under this contract, have ac-
cess to and the right to examine any directly pertinent books, documents,
papers, and records of the Contractor, involving transactions related to
this contract.
(b) The Contractor further agrees to include in all his subcontracts
hereunder a provision to the effect that the subcontractor agrees that
the Comptroller of the Contracting Agency or any of his duly authorized
representatives shall, until the expiration of three years after final pay-
ment under the subcontract, have access to and the right to examine any
directly pertinent books, documents, papers, and records of such subcon-
tractor, involving transactions related to the subcontract. The term
"subcontract" as used in the clause excludes (i)purchase orders not ex-
ceeding $2,500 and (ii) subcontracts or purchase orders for public utility
services at rates established for uniform applicability to the general pub -
lie.
29. GRATUITIES
(a) The Government may, by written notice to the Contractor, ter -
minate the right of the Contractor to proceed under this contract if it is
found, after notice and hearing, by the Secretary or his duly authorized
representative, that gratuities (in the form of entertainment, gifts, or
otherwise) were offered or given by the Contractor, or any agent or
representative of the Contractor, to any officer or employee of the
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 whichthe Secretary or his duly auth-
orized representative makes such findings shall be in issue and may be
reviewed in any competent court.
(b) In the event this contract is terminated as provided in paragraph
(a) hereof, the Government shall be entitled (i) to pursue the same
remedies against the Contractor as it could pursue in the event of a
breach of the contract by the Contractor,and (ii) as a penalty in addition
to any other damages to which it may be entitled by law, to exemplary
damages in an amount (as determined by the Secretary or his duly au-
thorized representative) which shall be not less than three nor more than
ten 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.
30. CONVICT LABOR
In connection with the performance of work under this contract, the
Contractor agrees not to employ any person undergoing sentence of im-
prisonment at hard labor.
31. PRIORITIES, ALLOCATIONS, AND ALLOTMENTS
The Contractor shall follow the provisions of DMS Reg. 1 and all
other applicable regulations and orders of the Business Defense Services
Administration in obtaining controlled materials and other products and
materials needed to fill this order.
32. PACKING AND PROCESSSING CHARGES
The prices herein include all charges for packing and processing in
accordance with the provisions of this contract.
33. IDENTIFICATION AND MARKING OF SHIPMENTS
I. General:
A. It is an express condition of this contract that the Contractor
will make no reference of any nature to the purchaser in connection
with the shipment of materials or the shipping documents pertaining
to this contract. This includes, but it is not limited to the items
being furnished, instruction books, blueprints, manuals, packing
lists, instruction plates or identification plates. Neither shall
there be any reference to the purchaser on or in any shipping con-
tainer, shipping documents or billing documents.
II. Bills of Lading:
A. The Bill of Lading shall show the consignee as cited on Schedule
"A" of the contract.
III. Exterior Markings:
A. No stenciling shall be applied to the shipping container except for
the following:
(1) Weight, dimensions and cubic content of container
(2) Caution markings for handling purposes, such as; 'DELI-
CATE INSTRUMENT", "THIS SIDE UP", "FRAGILE", AND
"CENTER OF BALANCE" (on large items), and etc.
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BA The casignee address as given above in paragraph Il A shall be
marked on a shipping tag or label that shall be securely fixed on the
container by use of a waterproof adhesive or stapled to the container.
Such markings shall be protected by a coat of transparent water -
repellant material.
C. Container Numbering
(1) Each exterior container shall bear a number relative to the
total number of containers in the shipment, e.g. PKG. 1 of 5.
(2) Set marking -- where an equipment item constitutes a set,
and is packed and shipped unassembled in two or more sep-
arate pieces, each container shall be markedwith the set or
assembly number, the number of the container relative to the
number of containers comprising the complete set, and
the total number of containers in the particular set or as-
sembly, together with a brief description of the component
part contained therein. Thus, a box containing a control
panel which is the third container of a group of four making
up set number two would require the following special set
markings: Set No. 2, Package 3 of 4, Control Panel.
(3) Container numbering shall not be stenciled on the containers
but shall be applied by tag or label as described in paragraph
III B.
W. Interior Markings:
A. No markings shall be applied on any interior packaging material
or container that would identify the purchaser.
B. Each primary wrapper, envelope, bag, folding carton or other
packaging material, enclosing each assembly, part or group of
similar parts shall be marked or labeled so that it may be readily
identified against the packing list. Each secondary and all other
overwrap material shall be marked as to the contents enclosed in
the package. The markings shall include the following:
(1) One of the following headings:
a. Part of basic unit (removed to facilitate packing)
b. Operating Spare Parts
c. Base Spare Parts
d. Tools
e. Service Equipment
f. Other category indicated in the contract
(2) Brief Nomenclature
(3) Quantity
Items that are not enclosed inawrapper or carton shall be iden-
tified with a tag that includes the above information.
V. Packing Lists
A. A master packing list shall accompany each shipment or be for-
warded under separate cover so that it reaches the consignee prior
7
to the receipt of the shipment. The master packing list shall in-
clude:
(I)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
Name and address of consignor
Name and address of consignee as in paragraph II A above
Contract or Purchase order number
Government Bill of Lading Number covering the shipment if any
Items being shipped shall be listed as required under one or
more of the headings listed in paragraph IV B (1) above
Stock and item number
Nomenclature of item
Quantity of each item
Location of each item by container number and set number when
applicable
Any data specifically required to be included on the packing list,
by the terms of the contract.
VI. Unassembled Items
A. Identification of connection components
When it is necessary to remove components to facilitate packing,
all connecting wires, conduits, leads and other objects discon-
nected shall be tagged in sucha manner so as to readily identify
lines of the various components.
B. Shipping bolts, collars and etc.
All objects that are attached to assemblies for packing purposes
that require removal before the item can be put in operation,
shall be labelled accordingly in a conspicuous manner.
34. SECURITY REQUIREMENTS (Applicable only if the Schedule of the
Contract specifies a Security Classification)
(a) Disclosure of Information. It is understood that disclosure of in-
formation relating to the work contracted for hereunder, to any person
not entitled to receive it, or failure to safeguard all SECRET and CONFI-
DENTIAL matter that may come to the Contractor or any person under
his control in connection with the work under this contract, may subject
the Contractor, his agents, employees and subcontractors to criminal
liability under the laws of the United States (18 U.S. Code 793, 794, 798).
See 'Contractor's Security Agreement" and "Security Requirements for
Contractor's' which are incorporated herein by reference only.
(b) Subcontractors. When it is deemed necessary to disclose clas-
sified information to a subcontractor to accomplish the purposes of this
contract the Contractor will request permission of the Contracting Offi-
cer prior to such disclosure. Upon the granting of permission, the Con-
tractor shall cause to be inserted in all subcontracts under this contract
a provision similar to (a) above.
(c) Employment of Aliens. 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 Contracting Officer.
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