FFP NEGOTIATED CONTRACT

• Document Type: CREST
• Collection: NGA Records (Formerly NIMA)
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78B04747A000900060002-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 41
• Document Creation Date: December 28, 2016
• Document Release Date: October 9, 2002
• Sequence Number: 2
• Publication Date: February 11, 1965
• Content Type: CONT

Approved For Rd1&e 2002/11/08: CIA-RDP7847A0009
F NEGOTIATED CONTRACT
REQ. O. OR OT ER PURCHASE AUTH.
Zl.rv a ; RCg1YC t 655-382
ISSUED BY
NEGOTIATED PURSUANT
TO ;ryryyy'~
t0 U.S.C. 2304 (A) 11..11
Rome Air Development Center
Pror.omn+ent Division (E1 )
GTrzq-.ffissAirFor?,eT~Base, New York 1341,4;'
INITIATOR: Lt R. B. Stenstr slm, EMIRCC
NEOrOTTdTOR? M ?. K. P. 7 on-I',+ EMT
CONTRACTOR (Name and Address)
David W. Mann Company`
DiA : ' O.n Of c oPij sins Corp. of America.
174 112.did-logpex ''urnp kt3 . -
Burlington, Massachusetts
SHIP TO (Consignee and Address)
SEE SCHEDULE
DEPARTMENT EFFECTIVE DATE
Air Force
DISCOUNT TERMS
N/A
MAIL INVOICES TO
CONTRAC N(
AFJC(E 02.
ES(;; 1
W
36,58
Rome Air Development Center
Pro urement Division
( ~5')
Air Force Base, New York 1311-' 2
PAYMENT WILL BE MADE BY
Finance Officer, USAF
Gw'?6iffisS A!' .I'orcce Base
New Yo k 17 At"2
DELIVERY
F.O.B.
SEE SCHEDULE
CONTRACT FOR. Quai`'.ty Ins ecu1C~'1 njeahleS
ACCOUNTING AND APPROPRIATION DATA
MAILING DATE: l ' Feb 1965
CONTRACTOR REPRESENTS DEFINITION CHANGED, SEE
iONTII~UATTON PAGE .LA
1. That it CJ IS, '^ IS NOT, a small business concern. Generally/ a small business concern for the purpose of Government
procurement is a concern that (1) is not dominant in its field of operation and with its affiliates, employs fewer than 500
employees, or (2) is certified as a small business concern by the Small Business Administration. (See Code of Federal
Regulations, Title 13, Part 103, as amended, which contains the detailed definition and related procedures.) If Contractor
is a small business concern and is not the manufacturer of the supplies covered by this contract, it also represents that all
supplies to be furnished hereunder ^ WILL, ^ WILL NOT, be manufactured or produced by a small business concern in
the United States, its Territories, its Possessions, or The Commonwealth of Puerto Rico.
2. That it is a '?^ REGULAR DEALER IN, ^ MANUFACTURER OF, the supplies covered by this contract. N/A
3. (a) That it 0 HAS, ZXHAS'NOT, employed or retained any company or person (other than a full-time bona fide employee
working solely for the contractor) to solicit or secure this contract, and (b) that it ^ HAS, OXHAS NOT, paid or agreed
to pay any company or person (other than a full-time bona fide employee working solely for the contractor) any fee, com-
mission, percentage or brokerage fee, contingent upon or resulting from the award of this contract; and agrees to furnish
information relating to (a) and (b) above as requested by the Contracting Officer. (For interpretation of the representation,
including the term "bona fide employee", see Code of Federal Regulations, Title 44, Part 150.)
4. That it operates as [INDIVIDUAL C] PARTNERSHIP K CORPORATION incorporated in the State of. Delaware.
The Contractor agrees to furnish and deliver all the supplies and perform all the services set forth in the attached Sched-
ule, for the consideration stated therein. The rights and obligations of the parties to this contract shall be subject to and
governed by the Schedule and the General Provisions. To the extent of any inconsistency between the Schedule or the General
Provisions and any specifications or other provisions which are made a part of this contract, by reference or otherwise, the
Schedule and the General Provisions shall control. To the ex tent of any inconsistency between the Schedule and the General
Provisions, the Schedule shall control.
The total amount of this contract is $ "L4, 6.00
DAVIr) W. MANN COMPANY
Q . '__ OPH STCSCORP. OF AMERICA UNITED STATES OF AMERICA
NAME OF CONTRACTOR
r ~y~ r
rl +~1. ~~ on `i. T/V ~1:. x.t~ C~-i?9 Jr.
By _
SIGNATURE DATE
BURTON W Wri7 ELER, p R
SEE SC,011DULE
^ DESTINATION ^ OTHER (See Schedule)
l
4 Al :tG;:C4 .' a Nlar"_
1Feb 65
TYPED NAME OF CONT ACTINd OFFICER
A-RDP78B04747A000900060002-5
FORM
EC 58 1261 On file USAF release instructions apply. Y~ U. aGO'VERNiMENT PRINTING OFFICE: 1960-537805
DD D
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DD Form 1261 continuation Page
CONTRACTOR. David W. Mann Company
D on of 3ophys.i_cs Corp. of Am6 ica
174, ; _dd1 -sex Tur ke
.Burlington; Massac usetts
ADMINISTRATION OFFICE: Rome Air Development center
Proouremen i; Division (EMK )
Griff-'Lss AFB 11Y 13442
DO-C9C Rating Certified Under DMS Regulation No. lq as amended.
FOR: REHB 6,5-1-<
*Geneoal De ioit ~.oY . A smaal:l, business once n is a concern that is 'Independently
owned and operated, is not domi.nan:t in the field of operation, in which it is bidding
on Government, coirtrjacts, and with its a_.,fa.i.iate , can further quality under the
criteria set forth In regulations of the Small Business Ad i.ni.stration Cdde of
Federal Regul.ati.on ,, Title 13, Section. 12143-8).
Government; furnished property is authorized in the performance of this contract.
On file USAF release
instructions apply.
1A
M-30(602)-3658
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ADMINISTRATIVE COMMITMENT DOCUMENT FFP - SMALL BUSINESS
TO: EMKS
DATE
CONTRACTUAL INSTRUMENT NO.
EMLCD
AE30(602)-3658
IN TURN
13 Jan 1965
CONTRACTOR D. W. Mann Coo
Burlin ton Massachusetts
PR
ITEM
CONTR
ITEM
CONTRACT
PR OR MIPR NUMBER
AND
UNIT
TOTAL
NO.
NO.
QUANTITY
ACCOUNTING CLASSIFICATION
PRICE
COST
SSD/RADC 65-1-1
N/A
Purchase Request 65-382 (Complete)
$147,036.00
57x3600 2854730 6369AJ 4000 75664011 5594200
The Initiator concurs n the increase.
ANTICIPATED OBLIGATION DATE: 1 March 1965
PREPARED BY (Typed Name, Org Code, Telephone No., and Signature)
The supplies and services to be obtained by this instrument are authorized by, are for the purpose set
forth in, and are chargeable to allotments enumerated above, the available balance of which is sufficient
rr n t ~+*Tr snudT- x25189
rx-~~orsa, La u~~
Q36..0~? ..... ..........
to cover the c tin an amount not t teed ~...l..7.9...
DATE SIGNATURE (Accounting Of fa er)
AFPI 2FOR
4 6
7 M
REPLACES YIMlT'I?vR'M-g3#,o24' JtdeASaVACFT &?ETECIA-RDP78B04747A000900060002-5
 Approved For Rely 2002/11/08: CIA-RDP78B04747A0 OQ9 0060002-5
PART I - SUPPLIES AND SERVICES TO RE FURNISHED
(a) The Contractor shall furnish and deliver to the Government at the prices
stated, the items listed below in accordance with the requirements of Exhibit "wA*"
Consisting of Purchase Request Conti nuation. Sheet Fore Quality Inspection Tables,
dated 17 September 1964.
1
1 each
Experimental Model
726
$137
2
t
i
ll
,
3
a
ns
ation
1,985
E
Test and
valuation 2
013
4
5.1
1 kit
2 co
ies
,
Interim Spare Parts Subject to Option
p
Test Procedures
608
5,2
7 final copies
instruction Manuals
2
013
5.3
1 set
Drawings
,
4
5
1 set
987
,
Spare Parts Data
272
5-5
3 Copies
Contract Status R.?:port
523
5* 6
1 set.
Technical Documentary Report
909
TOTAL PRICE
(except item 4)
$11777,7037.7-
(b) Exhibit "A" s ; attanhed. hereto snd as it may be amended below, is here` by
made a part of this contract,
(c) The total fixed price stated above does not include any amounts for Item 4,
Interim Spare Parts, The Contractor agree 5 that this item is within the general
scope of the work of this contract, and may be ordered by the completion date
thereof, in accordance with a C :pee f F: provisions provided therefor elsewhere
herein, or in accordance with and subject to the terms of the Changes clause of
this contract,
(d) The total fixed pr i_e e of this cont.:ac.. is stated in part (a) above,
Payment however shall be in accordance with the a yments and Progress Payment
clauses of this contract. Pa;eiments shill be 75% of total costs incurred as
contemplated h A$ B, C, D, & E of said clause.
PART II - DELIVERY
(a) Subject to any limitati.onc, in Part I above, the Contractor shall com-
plete all services required thereunder and shall deliver all other items required
thereunder to the Government in accordance with the following schedule and terms.-
Completion or Prepaid to
Item Quantity Delivery Date o,
~.~ a. _ or FOR
1 1 each 12 months after receipt Westover AFB, Mass 01022
of contract
Services 15 days after item l
Weeto;veP AFB, Mass 01022
3 Services (Preliminary)with Item 1 Contrantor?as Plant
(Knal) with item 2 Westov ass 01022
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AFFF3o (602)-3658
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1 kit subject to Option
501 2 Copies 11 months after receipt of
Contract
5.2 1 drafty & (draft) with item I
7 final, cys (Final.) 30 days after approval,
of draft
5.3 1 set 13 months after receipt of
c os qtr act
5?4 1 set 9 mor:iths aj-.+,ar :receipt of
contract
5.5 3 copies MMTorif-,h:1yq uath.In 10 days after
the month being reported
5.6 1 set 13 months after receipt of
contract
5,1, 502, 5.3, 5.4,
595, 5.6
(b) The drafts of any reports required hereunder which are not approved or
disapproved by the Gover?nmer t within 30 days after their receipt shall be deemed.
to have been approved.
(c) Specific addresses and shipping i nstmotion;s not given above. shall be
provided the contractor at suii nh time or times as required for h--'.s perfonrta.n.ce
'hereunder, provided that such requests shall be in n iting and reasonably in
advance of his need.
PART III - RESERVED
PART IV - INSPECTION AND ACCEPTANCE
13!442
Thxe points of fina3, inspection and final, acceptance of all item req.:ired under
contract shall k those Indicated below, for each l:7.?.em.:
ITEM INSPECTION
RADC (EMIRC) ~A NY 13442
Mar"'.kked: For Corntr?acct
M30(602)-3658
(drat) with :Cte'm 1
(Final) RADC (EYTRC) GAFB NY
:13442, Marked Form Contract
AF3O(602)-3658
RADC (EMEA1) GAFt3 NY 131142
Marked fort Contract
Ay3o(602)-3658
RADC (E1NKI) GAFB NY 1,32442
Marked: For Contract
.AF30(60)-3658
RADC (EMIR C) GAFB NY 1341?2
Marked: For Contract
AF3O (6O2)m36.8
RADC (PP?3)9 CAFB
Marked: For contract
AF3o(602)-3658
19 2 9 3 We stover AFD, Mas s R.ADC
RADO RADC
3
o(602)-3658
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PART V -- MILITARY SECURITY CLASSIFICATION
Military Security requirements in the performance of this Contract shall. be
maintained in accordance with "Security Requirements Check List", DD 251k, dated
12 January 1965, a copy of which is attached hereto and hereby made a part hereof.
The highest classification involved in the performance of this contract is SECRET.
This contract document, with all attachments, has a security classification of
Unclassified.
(a) For the purposes of the clause of the General Provisions of this Contract,
entitled Acknowledgement of Sponsorship, the sponsoring ageny is the Air Force
Systems Command,, Research and Technology Division, Rome Air Development
Center, Griffiss Air Force Base, New York 13442.
(b) Rights in Data. The rights obtained by the Government in Technical data are
set forth a7Flause incorporated in this contract, and nothing elsewhere
in this contract or in any documents incorporated by reference in this contract
shall be construed. as in any way altering such rights.
(c) Contract Schedule Items Requiring Experimental, Developmental or Research
Work - For purposes of defining the nature of the work and the scope of rights
in data granted to the Government pursuant. to the clause of this contract entitled
"Rights in Technical Data", it is understood and agreed that Item 1 requires the
performance of experimental, developmental or research work.
(d) For the purposes of the clause of this contract entitled "Rights in
Technical Data", it is understood and agreed. that the Contractor shall furnish the
Government with unlimited rights that technical data defined in paragraph (b)(1) of
said clause. Further, it is understood and agreed that there is no data which is
to be furnished the Goversmient v.-.th limited rights, as defined in paragraph (b)(2) of
said clause.
(e) Use of Official Mail Indicia - In accordance with, AFR 182-1.5 as in effect
on this date, the contractor is authorized to use "Official Mail" Indicia in lieu
of postage stamps to ship material for the Department of the Air Force. However,
each such shipment must be cleared for release by the Admi.nistrative Contracting
Officer or his representative and will be, subject to the definitions, criteria, and
procedural requirements stated in AFR 182-.15. Subject to the same conditions, a
subcontractor's shipments are equally qualified for "Official indicia mailing when
the prime contract; involved is qualified. Request for information on "Official
Mail" Indicia supplies should be directed to the Administrative contracting officer.
The Government reserves the right to make an equitable adjustment in the price
of this contract for any use that Contractor makes Of "Official Ma-11" 1ndicia as he
is otherwise authorized above. i"f -the Contractor intends to use or does use such,
authorization, he shall so notify in writing the Administrative Contrasting Officer
at once and submit his proposal for equitable adjustment within d, reasonable time.
AF5O(602)-3658
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SCHEDULE
(f) The contractor shall have access to the Government site wherein the
equipment is to be installed at such times as are necessary to fulfill the
requirements of this contract. Access however shall be in accordance with
"Safety and Accident Prevention" clause of this contract and all other
regulations, including security regulations, in effect at the site. The
Contractor shall give reasonably timely notice of his intended date or dates
of access.
(g) Subject to the provisions of the Government Property clause, the
Government will provide the Contractor with space and dimensional drawings
and data of the Zeiss Standard Microscope Head, Type GFL, within thirty (30)
days after- ' ptv f't6ntrA,ct4,TheHead will be provided within 90 days after receipt
of contract.
(a) This contract consists of (1) DD Form 1261 and Continuation page lA;
(2) Administrative Commitment Document dated 13 Jan 65; (3) Schedule containing
parts I through VII; (4) General provisions as shown in paragraph (b) below;
(5) Exhibit "A" consisting of PROS for: Quality Inspection Tables, dated 17
September 1964, and (6) DD 254, security Requirements Check List, dated 12 San 65.
(b) The following are the General Provisions of this Contract:
1. FP R&D AFPI 71-9 (Nov 1963)
2. Further General Provisions consisting of the following:
Clause 44 - Alterations in Contract
45 - Buy American Act
46 - Equal opportunity
47 - Patent Rights (License)
48 - Stop work order
49 - Reports of Work
50 - Rights in Technical Data
51 - Interchangeability of Terms
52 - Marking Technical Data
53 - Limitation on Technical Data Requirements
54 - Progress Payments
55 - Safety and Accident Prevention
56 - Price Reduction for Defective Cost or Pricing Data -
Price Adjustments
57 - Audit - Price Adjustments
58 - Subcontractor Cost and Pricing Data - Price Adjustments
5
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GENERAL PROVISIONS
FIXED PRICE RESEARCH AND DEVELOPMENT
CONTRACT
1. DEFINITIONS. (Feb. 1962)-As used throughout this contract, the following terms shall have the meanings
set forth below:
(a) The term "head of the agency" or "Secretary" means the Secretary, ,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 Con-
tracting Officer) authorized to act for the head of the agency or the Secretary.
(b) The term "Contracting Officer" means The person executing this contract on behalf of the Government,
and any other officer or civilian 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 in this contract, the term "subcontracts" includes purchase orders under
this contract.
(d) The term "contract work" means all work to be performed under this contract including without limita-
tion any studies covering fundamental, theoretical, or experimental investigations; any extension of the investi-
gative findings and theories of a scientific or technical nature into practical application; any tangible items, herein-
after referred to as "supplies;" furnished to the Government; and any reports, data, computations, plans, drawings,
and specifications with respect to any of the foregoing. (Oct. 1957)
2. PAYMENTS. (Jun. 1959)-The Contractor shall be paid, upon submission of proper invoices or vouchers, the
prices stipulated herein for work delivered or rendered and accepted, less deductions, if any, as herein provided. Un-
less otherwise specified, payment will be made upon acceptance of any portion of the work delivered or rendered for
which a price is separately stated in the contract.
3. STANDARDS OF WORK. (Jun. 1959)-The Contractor agrees that the performance of work and services
pursuant to the requirements of this contract shall conform to high professional standards.
4. INSPECTION.. (Jun. 1959)-(a) All work under this contract shall be ,subject to inspection and test by the
Government, to the extent practicable, at all times (including the period of performance) and places, and in any
event prior to acceptance. The Government through any authorized representative may inspect the premises of the
Contractor. or any subcontractor engaged in the performance of this contract.
(b) The Government may reject any work that is defective or otherwise not in conformity with the require-
ments of this contract. If the Contractor fails or is unable to correct or to replace such work, the Contracting
Officer may accept such work at a reduction in price which is equitable under the circumstances. Failure to agree
on the reduction in 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 test is made by the Government on the premises of the Contractor or a subcontractor,
the Contractor shall provide, without additional charge, all reasonable facilities and assistance for the safety and
convenience of the Government inspectors in the performance of their duties. If the Government inspection or test
is made at a point other than the premises of the Contractor or subcontractor, it shall be at the expense of the
Government. All inspections and tests by the Government shall be performed in such a manner as not unduly to
delay the work. Final inspection and acceptance or rejection of the work shall be made as promptly as practicable
after delivery except as otherwise provided in this contract; but failure to inspect and accept, or reject the work
shall neither relieve the Contractor from responsibility for such of the work as is not in accordance with the con-
tract requirements nor impose liability on the Government therefor.
(d) The inspection and test by the Government of any work shall not relieve the Contractor from any re-
sponsibility 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 s h all 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 work 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.
5. ASSIGNMENT OF CLAIMS. (Feb. 1962)-('a) Pursuant to the provisions of the Assignment of Claims Act
of 1940, as amended (31 U.S.C. 203, 41 U.S.C. 15), if this contract provides for payments aggregating $1,000 or
more, claims for monies due or to become due the Contractor from the Government under this contract may be as-
signed to a bank, trust company, or other financing institution, including any Federal lending agency, and may
thereafter be further assigned and reassigned to any such institution. Any such assignment 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 may be made to one party as agent or ,trustee for two or more
parties participating in such financing. Unless otherwise provided in this.contract, 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 sub-
ject to reduction or set-off.
(b) In no event shall copies of this contract or of any plans, specifications, or other similar documents re-
lating to work under this contract, if marked "Top Secret," "Secret," or "Confidential," be furnished to any as-
signee of any claim arising under this contract or to any other person not entitled to receive the same. However,
a copy of any part or all of this contract so marked may be furnished, or any information contained therein may
be disclosed, to such assignee upon the prior written authorization of the Contracting Officer.
* Changes to previous edition are marked with a star.
AFPI 71-9, Nov 63
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(Supersedes A11~V,
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6. EXAMINATION OF RECORDS. (Feb. 1962)-(a) The Contractor agrees that the Comptroller General of
the United States or any of his duly authorized representatives shall, until the expiration of three years after final
payment under this contract, have access to and the right to examine any directly pertinent books, documents,
papers, and records of the 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 General of the United States or any of his duly authorized repre-
sentatives shall, until the expiration of three years after final payment under the subcontract, have access to
and the right to examine any directly pertinent books, documents, papers, and records of such subcontractor, in-
volving transactions related to the subcontract. The term "subcontract" as used in the clause excludes (i) purchase
orders not exceeding $2,500 and (ii) subcontracts or purchase orders for public utility services at rates established
for uniform applicability to the general public.
7. FEDERAL, STATE, AND LOCAL TAXES (Aug. 1961)-(a) Except as may be otherwise provided in this
contract, the contract price includes all applicable Federal, State, and local taxes and duties.
(b) Nevertheless, with respect to any Federal excise tax or duty on the transactions or property covered by
this contract, if a statute, court decision, written ruling, or regulation takes effect after the contract date, and--
(1) results in ,the Contractor being required to pay or bear the burden of any such Federal excise tax or
duty or increase in the rate thereof which would not otherwise have been payable on such transactions or property,
the contract price shall be increased by the amount of such tax or duty or rate increase, provided the Contractor
warrants in writing that no amount for such newly imposed Federal excise tax or duty or rate increase was in-
cluded in the contract price as a contingency reserve or otherwise; or
(2) results in the Contractor not being required to pay or bear the burden of, or in his obtaining a refund
or drawback of, any such Federal excise tax or duty which would otherwise have been payable on such transactions
or property or which was the basis of an increase in the contract price, the contract price shall be decreased by
the amount of the. relief, refund, or drawback, or that amount shall be paid to the Government, as directed by
the Contracting Officer. The contract price shall be similarly decreased if the Contractor, through his fault or
negligence or his failure to follow instructions of the Contracting Officer, is required to pay or bear the bur-
den of, or does not obtain -a refund or drawback of, any such Federal excise tax or duty.
(c) No adjustment of less than $100 shall be made in the contract price pursuant to paragraph (b) above.
(d) As used in paragraph (b) above, the term "contract date" means the date set f or bid opening, or if
this is a negotiated contract, the contract date. As to additional supplies or services procured by modification to
this contract, the term "contract date" means the date of such modification.
(e) Unless there does not exist any reasonable basis to sustain an exemption, the Government upon the re-
quest of the Contractor shall, without further liability, furnish evidence appropriate to establish exemption from
any Federal, State, or local tax; provided that, evidence appropriate to establish exemption f r o in any Federal
excise tax or duty which may give rise to either an increase or decrease in the contract price will be furnishd only
at the discretion of the Government.
(f) The Contractor shall promptly notify the Contracting Officer of matters which will result in either an
increase or decrease in the contract price, and shall take action with respect thereto as directed by the Contract-
ing Officer.
8. UTILIZATION OF SMALL BUSINESS CONCERNS. (Jan. 1958)-(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.
(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.
9. DEFAULT. (Jul. 1962)-(a) The Government may, subject to the provisions of paragraph (c) of this clause,
by written Notice of Default to the Contractor terminate the whole or any part of this contract in any one of the
following circumstances:
(i) if the Contractor fails to perform the work called for by this contract within the time(s) specified
herein or any extension thereof; or
(ii) if the Contractor fails to perform any of the other provisions of this contract, or so fails to prosecute
the work as to endanger performance of this contract in accordance with its terms, and in either of these two
circumstances does not cure such failure within a period of 10 days (or such longer period as the Contracting Officer
may authorize in writing) after receipt of notice from the Contracting Officer specifying such failure.
(b) In the event the Government terminates this contract in whole or in part as provided in paragraph (a)
of this clause, the Government may procure, upon such terms and in such manner as the Contracting Officer may
deem appropriate, work similar to the work so terminated and the Contractor shall be liable to the Government for
any excess costs for such similar work; provided, that the Contractor shall continue the performance of this con-
tract 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 contract arises out of causes beyond the control and without the fault or negligence
of the Contractor. Such causes may include, but are not restricted to, acts of God or of the public enemy, acts of
the 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 de-
fault of a subcontractor, and if such default arises out of causes beyond the control of both the Contractor and sub-
contractor, and without the fault or negligence of either, of them, the Contractor shall not be liable for any excess
costs for failure to perform, unless the supplies or service to be furnished by the subcontractor were obtainable
from other sources in sufficient time to permit the Contractor to meet the required delivery schedule or other per-
formance requirements.
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(d) If this contract is terminated as provided in paragraph (a) of this clause, the Government, in addition
to any other rights provided in this clause, may require the Contractor to transfer title and deliver to the Gov-
ernment, in the manner and to the extent directed by the Contracting Officer any of t h e completed or partially
completed work not theretofore delivered to, and accepted by, the Government and any other property, including
contract rights, specifically produced or specifically acquired for the performance of such part of this contract as
has been terminated; and the Contractor shall, upon the direction of the Contracting Officer, protect and preserve
property in the possession of the Contractor' in which the Government has an interest. The Government shall pay
to the Contractor the contract price, if separately stated, for completed work accepted by the Government and the
amount agreed upon by the Contractor and the Contracting Officer for (i) completed work for which no separate
price is stated, (ii) partially completed work, (iii) other property described above which is accepted by the Gov-
ernment and, (iv) the protection and preservation of property. Failure to agree shall be a dispute concerning a
question of fact within the meaning of the clause of this contract entitled "Disputes." The Government may with-
hold from amounts otherwise due the Contractor for such completed supplies or manufacturing materials s u c h
sum as the Contracting Officer determines to be necessary to protect the Government against loss because of out-
standing liens or claims of former lien holders.
(e) If, after notice of termination of this contract under the provisions of this clause, it is determined for
any reason that the Contractor was not in default under the provisions of this clause, or that the default was
excusable under the provisions of this clause, the rights and obligations of the parties shall, if the contract contains
a clause providing for termination for convenience of the Government, be the same as if the notice of termination
had been issued pursuant to such clause.
(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.
10. TERMINATION FOR CONVENIENCE OF.THE GOVERNMENT. (Jan. 1961)-(a) The performance of
work under this contract may be 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 becomes effective.
(b) After receipt of a Notice of Termination, and except as otherwise directed by the Contracting Officer, the
Contractor shall:
(i) stop work under the contract on the date and to the extent specified in the Notice of Termination;
(ii) place no further orders or subcontracts for materials, services or facilities, except as may be necessary
for completion of such portion of the work under the contract as is not terminated;
(iii) terminate all orders and subcontracts to the extent that they relate to the performance of work ter-
minated 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 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;
(v) settle all outstanding liabilities and all claims arising out of such termination of orders and subcontracts,
with the approval or ratification of the Contracting Officer, to the extent he may require, which approval or
ratification shall be final for all the purposes of this clause;
(vi) transfer title and deliver to the Government, in the manner, at the times, and to the extent, if any,
directed by the Contracting Officer, (A) the fabricated or unfabricated parts, work in process, completed work,
supplies, and other material 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, informa-
tion, 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 manlier, at the times, to the extent, and at the price or prices
directed or authorized by the Contracting Officer, any property of the types referred to in (vi) above; provided,
however, that the Contractor (A) shall not be required to extend credit to any purchaser, and (B) may Acquire
any such property under the conditions prescribed by and at a price or prices approved by the Contracting Officer;
and provided further that the proceeds of Any such transfer or disposition shall be applied in reduction of any
payments to be made by the Government to the Contractor under this contract or shall 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 acquire an interest.
At any time after expiration of the plant clearance period, as defined in Section VIII, Armed Services Procure.
ment 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 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. Not later than
fifteen (15) days thereafter, the Government will accept title to such items and remove them or enter into a
storage agreement covering the same; provided, that the list submitted shall be subject to verification by the
Contracting Officer upon removal of the items, or if the items are stored, within forty-five (45) days from the date
of submission of the list, and any necessary adjustment to correct the list as submitted shall be made prior to final
settlement.
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(c) After receipt of a Notice of Termination, the Contractor shall submit to the Contracting Officer his termi-
nation 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 effective date of termination, unless one or more extensions
in writing are granted by the Contracting Officer, upon request of the Contractor made in writing within such 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 approvals required by. Section VIII of the Armed
Services Procurement Regulation in effect as of the date of execution of this contract, determine, on the basis of
information available to him, the amount, if any, due to the Contractor by reason of the determination 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 re-
quired 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 Contractor 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 reduced by the contract price of work not terminated. The contract
shall be amended accordingly, and the Contractor shall be paid the agreed amount. Nothing in paragraph (e) of
this clause, prescribing the amount to be paid to the Contractor in the event of failure of the Contractor and the
Contracting Officer to agree upon the whole amount to be paid to the Contractor by reason of the termination of
work pursuant to this clause, shall be deemed to limit, restrict, or otherwise determine or affect the amount or
amounts which may be agreed upon to be paid to the Contractor pursuant to this paragraph (d).
(e) In the event of the failure of the Contractor and the Contracting Officer to agree as provided in paragraph
(d) upon the whole amount to be paid to the Contractor by reason of the termination of work pursuant to this
clause, the Contracting Officer shall, subject to any Settlement Review Board approvals required by Section VIII of
the Armed Services Procurement Regulation in effect as of the date of execution of this contract, determine, on
the basis of information available to 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 terminated, 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 (exclusive of amounts paid or payable on account of supplies or materials delivered or services furnished
by subcontractors or vendors prior to the effective date of the Notice of Termination, which amounts shall be
included in the costs payable under (A) above); and
(C) a sum, as a profit, equal to 2 percent of that part of the amount determined under (A) above which
represents the cost of articles and materials not processed by the Contractor, plus a sum equal to 8 percent of the
remainder of such amount, but the aggregate of such sums shall not exceed 6 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 appropriate adjustment shall be made reducing the amount of the settlement to reflect the indicated rate
(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, together with reasonable storage,
transportation, and other costs incurred in connection with the protection or disposition of property allocable to
this contract.
The total sum to be paid to the Contractor under (i) and (ii) of this paragraph (e) shall not exceed the total
contract price as reduced by the amount of payments otherwise made and as further reduced by the contract price
of work not terminated. Except for normal spoilage, and except to the extent that the Government shall have
otherwise expressly assumed the risk of loss, there shall be excluded from the amounts payable to the Contractor
as provided in (e) (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 paragraphs (c) or (e) above, except that if the Contractor
has failed 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 Officer has made a deter-
mination of the amount due under paragraph (c) or (e) above, the Government, shall pay to the Contractor the fol-
lowing: (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.
(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 terminated portion of
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this contract, (ii) any claim which the Government may have against the Contractor in connection with this contract,
and (iii) the agreed price for, or the proceeds of sale of, any materials, supplies, or other things acquired by the
Contractor or sold, pursuant to the provisions of this clause, and not otherwise recovered by or credited to the
Government.
(i) If the termination hereunder be partial, prior to the settlement of the terminated portion of this contract,
the Contractor may file with the 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 Termination), and such equitable adjustment as may be agreed upon shall be made in such price or
prices. - -
(j) The Government may from time to time, under such terms and conditions as it may 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 Contracting - Officer the aggregate of such payments shall
be within the amount to which the Contractor will be entitled hereunder. If the total of such payments is in excess
of the amount finally agreed or determined to be due under this clause, such excess shall be payable by the Con-
tractor to the Government upon demand, together with interest computed at the rate of 6 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 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 termi-
nation 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
Government, all his books, records, documents, and other evidence bearing on the costs and expenses of the Con-
tractor 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.
(The following paragraph (1) is applicable only if this contract is subject to Incentive Price Revision)
(1) Insofar as items under this contract are subject to incentive price revision and the total final price for
such items has not been established under the incentive price revision clause of this contract,. the total contract
price shall include, for the purpose of paragraphs (d) and (e) of this clause, the amount which the total final price
for such items may not exceed under the incentive price revision clause. (Nov. 1962)
11. DISPUTES. (Jan. 1958)-(a) Except as otherwise provided in this contract, any dispute concerning a ques-
tion 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 Officer shall be final and conclusive unless, within 30 days from the date of receipt of
such copy, the Contractor mails or otherwise furnishes to the Contracting Officer a written appeal addressed to the
Secretary. The decision of the Secretary or his duly authorized representative for the determination of such appeals
shall be final and conclusive 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. In connection with any appeal proceeding under this clause, the Contractor shall be afforded an oppor-
tunity to be heard and to offer evidence in support of his 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. -
(b) This "Disputes" clause does not preclude consideration of law questions in connection with decisions pro-
vided 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.
12. RENEGOTIATION. (Oct. 1959)-(a) To the extent required by law, this contract is subject to the Re-
negotiation Act of 195,1 (50 U.S.C. App. 1211, et seq.), as amended, and to any subsequent act of Congress provid-
ing for the renegotiation of contracts. Nothing contained in this clause shall impose any renegotiation obligation
with respect to this contract or any subcontract hereunder which is not imposed by an act of Congress heretofore
or hereafter enacted. Subject to the foregoing this contract shall be deemed to contain all the provisions required by
Section 104 of the Renegotiation Act of 1951, and by any such other act, without subsequent contract amendment
specifically incorporating such provisions.
(b) The Contractor agrees to insert the provisions of this clause, including this paragraph (b), in all sub-
contracts, as that term is defined in section 103g of the Renegotiation Act of 1961, as amended.
13. BUY AMERICAN ACT. (Jul. 1960)-(a) In acquiring end products, the Buy American Act (41 U.S.C. 10
a-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 supplies, which are directly incorporated in the end
products;
(ii) "end products" means those articles, materials, and supplies, which are to be acquired under this contract
for public use; and -
(iii) a "domestic source end product" means (A) an unmanufactured end product which has been mined
or produced in the United States and (B) an end product manufactured in the United States if the cost of the
components thereof which are mined, produced, or manufactured in the United States or Canada exceeds 50 percent
of the cost of all its components. For the purposes of this (a) (iii) (B), components of foreign origin of the same
type or kind as the products referred to in (b) (ii) or (iii) of this clause shall be treated as components mined,
produced, or manufactured in the United States.
(b) The Contractor agrees ;that there will be delivered under this contract only domestic source end prod-
ucts, except end products:
(i) which ar for use outside the United States;
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(ii) which the Government determines are not mined, produced, or manufactured in the United States in
sufficient and reasonably available commercial quantities' and of a satisfactory quality;
(iii) as to which the Secretary determines the domestic preference to be inconsistent with the public inter-
rest; or
(iv) as to which the Secretary determines the cost to the Government to be unreasonable.
(The foregoing requirements are administered in accordance with Executive Order No. 10582, dated December
17, 1954.)
14. CONVICT LABOR. (Mar. 1949)-In connection with the performance of work under this contract, the Con-
tractor agrees not to employ any person undergoing sentence of imprisonment at hard labor.
15. WALSH-HEALEY PUBLIC CONTRACTS ACT. (Jan. 1958)-If this contract is for the manufacture or fur-
nishing of materials, supplies, articles, or equipment in an amount which exceeds or may exceed $10,000 and is other-
wise subject to the Walsh-Healey Public Contracts Act, as amended (41 U.S.C. 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 interpreta-
tions of the Secretary of Labor which are now or may hereafter be in effect.
16. WORK HOURS ACT OF 1962 - OVERTIME COMPENSATION. (Oct. 1952)-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 exceptions of said Work Hours Act of 1962.
(a) No Contractor or subcontractor contracting for any part of the contract work shall require or permit
any laborer or mechanic to be employed on such work in excess of eight hours in any calendar day or in excess
of forty hours in any workweek unless such laborer or mechanic receives compensation at a rate not less than
one and one-half times his basic rate of pay for all hours worked in excess of eight hours in any calendar day or
in excess of forty hours in such workweek, whichever is the greater number of overtime hours.
(b) In the event of any violation of the 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 liquidated damages. Such liquidated damages
shall be computed, with respect to each individual laborer or mechanic employed in violation of the provisions of
paragraph (a), in the sum of $10 for each calendar day on which such employee was required or permitted to
work in excess of eight hours or in excess of forty hours in a workweek without payment of the required overtime
wages.
(c) The Contracting Officer may withhold, or cause to be withheld, from moneys payable on account of work
performed by the Contractor or subcontractor, the full amount of wages required by this contract and 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).
17. NONDISCRIMINATION IN EMPLOYMENT. (June 1963)-(The following clause is applicable unless this
contract is exempt under the rules and regulations of the President's Committee on Equal Employment Opportunity
issued pursuant to Executive Order No. 10925 of March 6, 1961, as amended.)
During the performance of this contract, the Contractor agrees as follows:
(a)i 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 applicants are employed,
and that employees are treated during employment, without regard to their race, creed, color, or national origin.
Such action shall include, but not be limited, to the following: employment, upgrading, demotion, or transfer; re-
cruitment or recruitment advertising;" layoff or termination;. rates of pay or other forms of compensation; aWd
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 pro-
visions 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 qualified applicants will receive consideration for employment without regard to race,
creed, color, or national origin.
(c) The Contractor will send to?,each labor union or representative of workers with which he has a collective
bargaining agreement or other contract or understanding, a notice, to be provided by the Agency Contracting Officer
advising the said labor union or workers' representative of the Contractor's commitments under this section, am!
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, as
amended, 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, as amended, and by the rules, regulations, and orders of the said Committee, or pursuant thereto, and will
permit access to his books, records, and accounts by the contracting agency and the Committee for purposes of
investigation to ascertain compliance with such rules, regulations, and orders.
'(f)~ In the event of the 'Contractor's noncompliance with the nondiscrimination clause of this contract or
with any of the said rules, regulations, or orders, this contract may be cancelled, terminated, or suspended in
whole or in part and the Contractor may be declared ineligible for further Government contracts in accordance
with procedures authorized in Executive Order No. 10925 of March 6, 1961, as amended, 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 paragraphs (a) through (g) in every subcontract or pur-
chase.order unless exempted by rules, regulations, or orders of the President's Committee on Equal Employment
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Opportunity issued pursuant to Section 303 of Executive Order No. 10925 of March 6, 1951, as amended, 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 contracting agency may direct as a means of enforcing such
provisions, including sanctions for noncompliance: Provided, however, that in the event the Contractor becomes
involved in, or is threatened with, litigation 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.
* In accordance with regulations of the President's Committee on Equal Employment O
tors below the first tier shall not be .required to insert the Nondiscrimination in Employment clauseyin their ~sub-
contracts, except that under contracts calling for construction, rehabilitation, alteration, conversion, extension, or
repair of buildings, highways, or other improvements to real property, each Subcontractor below the first tier
shall include the clause in every subcontract which calls for such work to be performed at the site of construction,
or except upon Special Order of the Secretary of the Department or the Executive Vice Chairman of the Presi-
dent's Committee.
18. OFFICIALS NOT TO BENEFIT (Jul. 1949)-No member of or delegate to Congress, or resident commis-
sioner, shall be admitted to any share or part of this contract, or to any benefit that may arise therefrom; but this
provision shall not be construed to extend to this contract if made with a corporation for its general benefit.
19. COVENANT AGAINST CONTINGENT FEES. (Jan. 1958)-The Contractor warrants that no person or sell-
ing agency has been employed or retained to solicit or secure this contract upon, an agreement or 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 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, or otherwise recover, the full amount of such com-
mission, percentage, brokerage or contingent fee.
20. GRATUITIES. (Mar. 1952)-(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 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 which the Secretary 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 Secretary or his duly authorized 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.
21. AUTHORIZATION AND CONSENT. (Jan. 1961) -The Government hereby gives its authorization and
consent for all use and manufacture of any invention described in and covered by a patent of the United States
in the performance of this contract or any part hereof or any amendment hereto or any subcontract hereunder
(including any lower-tier subcontract).
22. NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT INFRINGEMENT. (Feb. 1962)
-The provisions of this clause shall be applicable only if the amount of this contract exceeds $10,000.
(a) The Contractor shall report to the Contracting Officer, promptly and in reasonable written detail, each
notice or claim of patent or copyright infringement' based on the performance of this contract of which the con-
tractor 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 or copyright 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 per-
taining 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.
23. PATENT RIGHTS. (LICENSE) (Apr. 1962)-(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 patent-
able) conceived or first actually reduced to practice either-
(A) in the performance of the experimental, developmental, 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 (g). and (h) below), who, by reason of the nature of
his duties in connect* n with the performance of this contract, would reasonably be expected to make inventions.
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(iii) The terms "subcontract" and "subcontractor" mean any subcontract or subcontractor of the Con-
tractor, and any lower-tier subcontract or subcontractor under this contract.
,(b) (1) The Contractor agrees to and does hereby grant to the Government an irrevocable, nonexclusive, and
royalty-free license to practice, and cause to be practiced by or for the United States Government, 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. Such license (i) shall be nontransferable, except that the Government shall have the
right to grant sublicenses to any foreign government or international organization specifically for use in programs
established by International Agreements for research, development or production of weapons or equipment for
mutual defense, and (ii) shall include the practice of Subject Invention. in the manufacture, use, and disposition of
any article or material, in the use of any method, or in the performance of any service acquired .by or for the
Government or with funds derived through the Military Assistance Program of the Government or otherwise
through the Government.
(b) (1) (This paragraph applies if this contract has as one of its purposes the performance of research and
development work under a space program, project or task and paragraph (b) (1) above is made inapplicable.) The
Contractor agrees to and does hereby grant to the Government an irrevocable, nonexclusive, and royalty-free
license to practice, and cause to be practiced by or for the United States Government, 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. Such license (i) shall be nontransferable, except that the Government shall have (a) the right
to grant sublicenses to any foreign government or international organization specifically for use in programs estab-
lished by International Agreements for research, development or production of weapons or equipment for mutual
defense and (b) the right to grant sublicenses to others, under such terms and conditions as may be prescribed,
for the practice of any Subject Invention throughout the world in the design, development, manufacture, operation,
maintenance and testing of communications satellite systems, and of equipment, components, and ground tracking,
transmitting and receiving facilities therefor, and (ii) shall include the practice of Subject Invention in the
manufacture, use, and disposition of any article or material, in the use of any method or in the performance of any
service acquired by or for the Government or with funds derived through the Military Assistance Program of the
Government or otherwise through the Government.
(2) With respect to:
(I) any Subject Invention made by other than Technical Personnel; and
(ii) any Subject Invention conceived prior to, but first actually reduced-to practice in the course of, any
of the experimental, developmental, or research work specified in (a) (,I)! above;
the obligation of the Contractor to grant a license as. provided in (b) (1) above, to convey title as provided in (d)
(ii)' (B) or (d) (iv) below, and to convey foreign rights as provided in (e) below, shall be limited to the extent
of the Contractor's right to grant the same without incurring any obligation to pay royalties or other compensation
to others solely on account of said grant. Nothing contained in this Patent Rights clause shall be deemed to grant
any license under any invention other than a Subject Invention.
(c) The ,Contractor shall furnish to the Contracting Officer the following information and reports concerning
Subject Inventions which reasonably appear to be patentable:
(i) a written disclosure promptly after conception or first actual reduction to practice of each such inven-
tion together with a written statement specifying whether or not a United States patent application claiming the
Invention .has been or will be filed by or on behalf of the -Contractor;
(ii) interim reports at least every twelve months, commencing with the date of this contract, each listing. all
such Inventions conceived or first actually reduced to practice more than three months prior to the date of the report,
and not listed on a prior interim report, or certifying that there are no such unreported Inventions; and
(iii) prior t: final settlement of this contract, a final report listing all such Inventions including
all those
previously listed in interim reports.
(d) In connection with each Subject Invention referred to in (c) (i)above, the Contractor shall do the following:
(i) if ,the Contractor specifies that a United States patent application claiming such Invention will be
filed, the Contractor shall file or cause. to be filed such application in due form and time; however, if the Con-
tractor, .after having specified that such. an application would be filed, decides not to file or cause to be filed said
application, 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.
(ii) if the Contractor specifies that a United States patent application claiming such Invention has not
been filed and will not be filed (or having specified that such an application will be filed thereafter notifies the
Contracting Officer to the contrary), the Contractor shall:
(A) Inform the Contracting Officer in writing at the earliest practicable date of any publication of
such Invention made by or known to the Contractor or, where applicable, of any contemplated publication by the
Contractor, stating the date and identity of such publication or contemplated publication; and
(B) convey to the Government the Contractor's entire right, title, and interest in such Invention by
delivering to the Contracting Officer upon written request such duly executed instruments (prepared by the Gov-
ernment) of assignment and application, and such 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 appli-
cations covering such Invention throughout the world, subject, however, to .the rights of the Contractor in foreign
applications as provided in (e)-below, and subject further to the reservation of a nonexclusive and royalty-free
license to the Contractor (and to his existing and future associated and affiliated companies, if any, within the
corporate structure of which the Contractor is a part) which license shall be assignable to the successor of that
part of the Contractor's business to which such Invention pertains;
(iii) the Contractor shall furnish promptly to the Contracting Officer on request an irrevocable power of
attorney to inspect and make copies of each United States patent application filed by or on behalf of the Contractor
covering any such Invention;
(iv) in the event the Contractor, or those other than the Government deriving rights from the Contractor,
elects not to continue prosecution of any such United States patent application filed by or on behalf of the
Contractor, the Contractor shall so notify the Contracting Officer not less than sixty days before the expiration
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of the response period and, upon written, request, deliver to the Contracting Officer 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 such Invention and the application, subject to the reservation as specified in (d) (ii) above; and
(v) the Contractor shall 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 other than the Government deriving rights from the Contractor, shall, as between
the parties hereto, have the exclusive right to file applications on Subject Inventions in each foreign country within:
(i) nine months from the date a corresponding United States application is filed;
(ii) six months from the date permission is granted to file foreign applications where such filing had been
prohibited for security reasons; or
(iii) such longer period as may be approved by the Contracting Officer.
The Contractor shall, upon written request of the Contracting Officer convey to the Government the Contractor's
entire right, title, and interest in each Subject Invention in each foreign country in which an application has not
been filed within the time above specified, subject to the reservation of a nonexclusive and royalty-free license
to the Contractor together with .the right of the Contractor to grant sublicenses, which licensee and right shall
be assignable to the successor of that part of the Contractor's business to which the Subject Invention pertains.
(f) If the Contractor fails to deliver to the Contracting Officer the interim reports required by (c) (ii) above,
or fails to furnish the written disclosures for all Subject Inventions required by (c) (i) above shown to be due in,
accordance with any interim report delivered under (c) (ii) or otherwise known to be unreported, there shall be
withheld from payment until the Contractor shall have corrected such failures ?either ten percent (10%) of the
amount of this contract, as from time to time amended, or five thousand dollars ($5,000), whichever is less. After
payment of eighty percent (80%) of the amount of this contract, as from time to time amended, payment shall be
withheld until a reserve of either ten percent (101%) of such amount, or five thousand dollars ($5,000), whichever
is less shall have been set aside, such reserve or balance thereof to be retained until the Contractor shall have
furnished to the Contracting Officer:
(i) the final report required by (c) (iii) above;
(ii) written disclosures for all Subject Inventions required by (c) (i) above which are shown to be due in
accordance with interim reports delivered under (c) (ii) above, or in accordance with such final reports, or are
otherwise known to be unreported; and
(iii) the information as to any subcontractor required by (h) below.
The maximum amount which may be withheld under this paragraph (f) shall not exceed ben percent (10%) of
the amount of this contract or five thousand dollars ($5,000), whichever is less, and no amount shall be withheld
under this paragraph (f) when the amount specified by this paragraph (f) 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 (f) shall not
be construed as requiring the Contractor to withhold any amounts from a subcontractor to enforce compliance
with the patent provision of a subcontract.
(g) The Contractor shall, unless otherwise authorized by the Contracting Officer as hereafter provided,
include a patent rights clause containing all the provisions of this Patent Rights Clause except provision (f) in any
subcontract hereunder of three thousand dollars ($3,000) or more having experimental, developmental, or research
work as one of its purposes. In the event of refusal by a subcontractor to accept such a patent rights clause, the
Contractor (i) shall promptly submit a written report to the -Contracting Officer setting forth the subcontractor's
reasons for such refusal and other pertinent information which may expedite disposition of the matter, and (ii)
shall not proceed with the subcontract without the written authorization of .the Contracting Officer. Reports, instru-
ments, and other information required to be furnished by a subcontractor to the Contracting Officer under the
provisions of such a patent rights clause in a subcontract hereunder may, upon mutual consent of the Contractor
and the subcontractor (or by direction of the Contracting Officer) be furnished to the Contractor for transmission
to the Contracting Officer.
(h) The Contractor shall, at the earliest practicable date, notify the -Contracting Officer in writing of any
subcontract containing one or more patent rights clauses; furnish the Contracting Officer a copy of each of such
clauses; and notify the Contracting Officer when such subcontract is completed. It is understood that with respect
to any subcontract clause granting rights to the Government in Subject Inventions, the Government is a third
party beneficiary; and the Contractor hereby assigns to the Government all the rights that the Contractor would
have to enforce the subcontractor's obligations for the benefit of the Government with respect to Subject Inventions.
If there are no subcontracts containing patent rights clauses, a negative report is required. The Contractor shall
not be obligated to -enforce the agreements of any subcontractor hereunder relating to the obligations of the sub-
contractor to the Government in regard to Subject Inventions.
(i) The Contractor recognizes that the Government, or a foreign government with funds derived through the
Military Assistance 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 royalties for the use of a Subject
Invention 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 Military Assistance Program or otherwise through the United States Government, charges for
use of patents in which the Government holds a royalty-free license. In recognition of this policy, the Contractor
agrees to participate in and 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.
24. DATA (Feb. 1962)-(a) The term "Subject Data" as used herein includes writings, sound recordings, picto-
rial reproductions, drawings or other graphical representations, 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 incidental to contract administration.
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(b) The Contractor agrees to and does hereby grant to the Government, and to its officers, agents, and
employees acting- within the scope of their official duties, a royalty-free, nonexclusive and irrevocable license
throughout the world for Government purposes to publish, translate, 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 copyrighted 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 vontiraculig viuco=, 'y=v++.1.-., ?N--_ ?-- " ---delivered
notice or claim of copyright infringement received by the Contractor with respect to all Subject Data
under this contract.
(e)' Nothing contained in this clause shall imply a license to the Government under any patent or be con-
strued 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.
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 administrative costs incident to the
furnishing of such data. In recognition of this policy, the Contractor agrees to participate in and make appropriate
arrangements for the exclusion of such charges from such 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 inspection and acceptance, the Government
shall have the right at any time to modify, remove, obliterate or ignore any marking not authorized by the terms
of this contract on any piece of Subject Data furnished under this contract.
(i) Data need not be furnished for standard commercial items or services which are normally or have been
sold or offered to the public commercially by any supplier and which are incorporated as component parts in or to
be used with the product or process being developed if in lieu thereof 'identification of source and characteristics
(including performance specifications, when necessary) sufficient to enable the Government to procure the part or
an adequate substitute, are furnished; and-further, "proprietary data" need not be furnished for other items which
were developed at private expense and previously sold or offered for sale, including minor modifications thereof,
which are incorporated as component parts in or to be used with the product or process being developed, if in
lieu thereof the Contractor shall identify such other items and that "proprietary data" pertaining thereto which is
necessary to enable reproduction or manufacture of the item or performance of the process. For the purpose of
this clause "proprietary data" means data providing information concerning the details of a Contractor's secrets of
manufacture, such as may be contained in but not limited to its manufacturing methods or processes, treatment
and chemical composition of materials, plant layout and tooling, to the extent that such information is not dis-
closed by inspection or analysis of the product itself and to the extent that the Contractor has protected such
information from unrestricted use by others. (Oct. 1958)
25. MILITARY SECURITY REQUIREMENTS. (Jan. 1958)-(a) The provisions of this clause shall apply to
the extent that this contract involves access to information classified "Confidential" including "Confidential-Modi-
fied Handling Authorized" or higher. -
(b) The`-Government shall notify the Contractor of the security classifications of this contract and,the ele-
ments thereof, and of any subsequent revisions in such security classification, by the use of a Security Requirements
Check List (DD Form 254), or other written notification.
(c) To the extent the Government has indicated as of the date of this contract or thereafter indicates secu-
rity classification under this contract as provided in paragraph (b) above, the Contractor shall safeguard all clas-
sified elements of this contract and shall provide and maintain a system of security controls within his own
organization in accordance with the requirements of -
(i) the Security Agreement (DD Form 441), including the Department of Defense Industrial Security
Manual for Safeguarding Classified Information as in effect on the date of this contract, and any modification to
t)Se Security Agreement for the purpose of adapting the Manual to the Contractor's business; and
(ii) any amendments to said Manual made after the date of this contract, notice of which, has been furnished
to the Contractor by the Security Office of the Military Department having security cognizance over the facility.
(d) Representatives of the Military Department having security cognizance over the facility and representatives
of the contracting Military Department shall have the right to inspect at reasonable intervals the procedures,
methods, and facilities utilized by the Contractor in complying with the security requirements under thi contract.
Should the Government, through these representatives, determine that the Contractor is not complying with the
security requirements of this contract the Contractor shall be informed in writing by the Security Office of the
cognizant Military Department of the proper action to be taken in order to effect compliance with such requirements.
I(e) If, -subsequent to the date of this contract, the security classifications or security requirements under this
contract are changed by the Government as provided in this clause and the security costs under this contract
are thereby increased or decreased, the contract price shall be subject to an equitable adjustment by reason of
such increased or decreased costs. Any -equitable adjustment shall be accomplished in the same manner as if such
changes were directed under the "Changes" clause in this contract.
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 (f) The Contractor agrees to insert, in all subcontracts hereunder which invo ve access to classified infor-
mation, provisions which shall conform substantially to the language of this clause, including this paragraph
(f) but excluding the last sentence of paragraph (e) of this clause.
(g) The Contractor also agrees that he shall determine that any subcontractor proposed by him for the fur-
nishing of supplies and services which will involve access to classified information in the Contractor's custody
has been granted an appropriate facility security clearance, which is still in effect, prior to being accorded access
to such classified information.
26. UTILIZATION OF CONCERNS IN LABOR SURPLUS AREAS. (Feb. 1962)-(The provisions of this
clause shall be applicable if this contract is in excess of $5,000.00.) It is the policy of the Government to place
contracts with concerns which will perform such contracts substantially in areas of persistent or substantial labor
surplus where this can be done, consistent with the efficient performance of the contract, at prices no higher than
are obtainable elsewhere. The Contractor agrees to use his best efforts to place his subcontracts in accordance with
this policy. In complying with the foregoing and with paragraph (b) of the clause of this contract entitled "Utiliza-
tion of Small Business Concerns," the Contractor in placing his subcontracts shall observe the following order of
preference: (i) persistent labor surplus area concerns which are also small business concerns; (ii) other persist-
ent labor surplus area concerns; (iii) substantial labor surplus area concerns which are also small business con-
cerns; (iv) other substantial labor surplus area concerns; and (v) small business concerns which are not labor sur-
plus area concerns.
27. FILING OF PATENT APPLICATIONS. (Jan. 1955)-(a) Before filing or causing to be filed a patent ap-
plication disclosing any subject matter of this contract, which subject matter is classified "Secret" or higher, the
Contractor shall, citing the thirty (30) day provision below, transmit the proposed application to the Contracting
Officer for determination whether, for reasons of national security, such application 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 the Contractor shall observe any in-
structions 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 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 application for determination whether, for reasons of
national security, such application should be placed under an order of secrecy or the issuance of a patent should
be otherwise delayed under pertinent statutes or regulations.
(c) In filing any patent application coming within the scope of this clause, the Contractor shall observe all
applicable security regulations covering the transmission of classified subject matter.
28. PRIORITIES, ALLOCATIONS, AND ALLOTMENTS. (Jan. 1961)-The Contractor shall follow the pro-
visions of DMS Regulation 1 and all other applicable regulations and orders of the Business and Defense Services
Administration in obtaining 'controlled materials and other products and materials needed to fill this order.
29. GOVERNMENT-FURNISHED PROPERTY. (Nov. 1961)-(a) The Government shall deliver to the Con-
tractor, for use in connection 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 reasona-
bly be required for the intended use of such property (hereinafter referred to as "Government-furnished Property").
The delivery or performance dates for the supplies or services to be furnished by the Contractor under this contract
are based upon the expectation that Government-furnished Property suitable for use will be delivered to the Con-
tractor 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 Con-
tractor 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 thereby, and shall equitably adjust the delivery or
performance dates or the contract price, or both, and any other contractual provision affected by such delay, in
accordance with the procedures provided for in the clause of this contract entitled "Changes." In the event the
Government-furnished Property is received by the Contractor in a condition not suitable for the intended use the
Contractor shall, upon receipt thereof, notify the Contracting Officer of such fact and, as directed by the Contract-
ing Officer, either (i) return such property at the Government's expense or otherwise dispose of the property, or
(ii) effect repairs or modifications. Upon the completion of (i) or (ii) above, the Contracting Officer upon written
request of the Contractor shall equitably adjust the delivery or performance dates or the contract price, or both,
and any other contractual provision affected by the rejection or disposition, or the repair or modification, in ac-
cordance with the procedures provided for in the clause of this contract entitled "Changes." The foregoing pro-
visions for adjustment are exclusive and the Government shall not be liable to suit for breach of contract by
reason of any delay in delivery of Government-furnished Property or delivery of such property in a condition
not suitable for its intended use.
(b) By notice in writing the Contracting Officer may decrease the property furnished or to be furnished by
the Government under this contract. In any such case, the Contracting officer upon the written request of the
Contractor shall equitably adjust the delivery or performance dates or the contract price or both, and any other
contractual provisions affected by the decrease, in accordance with the procedures provided for in the clause of
this contract entitled "Changes."
(c) Title to the Government-furnished Property shall remain in the Government. Title to Government-fur-
nished Property shall not be affected by the incorporation or attachment thereof to any property not owned by
the Government, nor shall such Government-furnished Property, or any part thereof, be or become a fixture or
lose its identity as personalty by reason of affixation to any realty. The Contractor shall comply with the provisions
of the "Manual for Control of Government Property in Possession of Contractors" (Appendix B, Armed Services
Procurement Regulation) as in effect on the date of the contract, which Manual is hereby incorporated by reference
and made a part of this contract.
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(d) The Government-furnished Property shall, unless otherwise provided herein, be used only for the per-
formance of this contract.
(e) The Contractor shall maintain and administer, in accordance with sound industrial practice, a program
for the maintenance, repair, protection and preservation of Government-furnished Property, until disposed of by
the Contractor in accordance with this clause. In the event that any damage occurs to Government-furnished
Property the risk of which has been assumed by the Government under this contract, the Government shall replace
such items or the Contractor shall make such repair of the property as the Government directs; provided, however,
that if the Contractor cannot effect such repair within the time required, the Contractor shall dispose of such
property in the manner directed by the Contracting Officer. The contract price includes no compensation to the
Contractor for the performance of any repair or replacement for which the Government is responsible, and an
equitable adjustment will be made in the contract price for any such repair or replacement of Government-furnished
Property made at the direction of the Government. Any repair or replacement for which the Contractor is respon-
sible under the provisions of this contract shall be accomplished by the Contractor at his own expense.
(f) (1) Except for loss, destruction or damage resulting from a failure of the Contractor due to willful mis-
conduct or lack of good faith of any of the Contractor's managerial personnel as defined herein, to maintain and
administer the program for the maintenance, repair, protection and preservation of the Government-furnished
Property, as required by paragraph (e) hereof, and except as specifically provided in the clause or clauses of
this contract designated in the Schedule, the Contractor shall not be liable for loss or destruction of or damage
to the Government-furnished Property -
(i) caused by any peril while the property is in transit off the Contractor's premises, or
(ii) caused by any of the following perils while the property is on the Contractor's or subcontractor's premises,
or on any other premises where such property may properly be located, or by removal therefrom because of any of
the following perils:
(A) Fire; lightning, windstorm, cyclone, tornado, hail; explosion; riot, riot attending a strike, civil com-
motion; vandalism and malicious mischief; sabotage; aircraft or objects falling therefrom; vehicles running on
land or tracks, excluding vehicles owned or operated by the Contractor or any agent or employee of the Contractor;
smoke; sprinkler leakage; earthquake or volcanic eruption; flood, meaning thereby rising of a body of water; hostile
or warlike action, including action in hindering, combating, or defending against an actual, impending or expected
attack by any government or sovereign power (de jure or de facto), or by any authority using military, naval, or
air forces; or by an agent of any such government, power, authority, or forces; or
(B) Other peril, of a type not listed above, if such other peril is customarily covered by insurance (or by
a reserve for self-insurance) in accordance with the normal practice of the Contractor, or the prevailing practice
in the industry in which the Contractor is engaged with respect to similar property in the same general locale.
The perils as set forth in (i) and (ii) above are hereinafter called "excepted perils."
This clause shall not be construed as relieving a subcontractor from liability for loss or destruction of
or damage to the Government-furnished Property while in his possession or control, except to the extent that the
subcontract, with the prior approval of the Contracting Officer, may provide for the relief of the subcontractor from
such liability. In the absence of such approval, the subcontract shall contain appropriate provisions requiring the
return of all Government-furnished 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.
The term "Contractor's managerial personnel" as used herein means the Contractor's directors, officers
and any of his managers, superintendents, or other equivalent representatives who have supervision or direction of-
(i) all or substantially all of the Contractor's business;
(ii) all or substantially all of the Contractor's operation at any one plant or separate location at which
the contract is being performed;
(iii) a separate and complete major industrial operation in connection with the performance of this
contract.
(2) The Contractor represents that he is not including in the price hereunder, and agrees that he will
not hereafter include in any price to the Government, any charge or reserve for insurance (including self-insurance
funds or reserve) covering loss or destruction of or damage to the Government-furnished Property caused by any
excepted peril.
(3) Upon the happening of loss or destruction of or damage to any Government-furnished Property caused
by an excepted peril, the Contractor shall notify the Contracting Officer thereof, and shall communicate with the
Loss and Salvage Organization, if any, now or hereafter designated by the Contracting Officer, and with the as-
sistance of the Loss and Salvage Organization so designated (unless the Contracting Officer has directed that no
such organization be employed), shall take all reasonable steps to protect the Government-furnished Property from
further damage, separate the damaged and undamaged Government-furnished Property, put all the Government-
furnished Property in the best possible order, and furnish to the Contracting Officer a statement of:
part; and
(i)
(ii)
(iii)
(iv)
the lost, destroyed and damaged Government-furnished Property;
the time and origin of the loss, destruction or damage;
all known interests in commingled property of which the Government-furnished Property is a
the insurance, if any, covering any part of or interest in such commingled property.
The Contractor shall be reimbursed for the expenditures made by him in performing his obligations under this
subparagraph (3) (including charges made to the Contractor by the Loss and Salvage Organization, except any
of such charges the payment of which the Government has, at its option, assumed directly), to the extent approved
by the Contracting Officer and set forth in a Supplemental Agreement.
(4) With the approval of the Contracting Officer after loss or destruction of or damage to Government-
furnished Property, and subject to such conditions and limitations as may be imposed by the Contracting Officer,
the Contractor may, in order to minimize the loss to the Government or in order to. permit resumption of busi-
ness or the like, sell for the account of the Government any item of Government-furnished Property which has
been damaged beyond practicable repair, or which is so commingled or combined with property of others, including
the Contractor, that separation is impracticable.
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(5) Except to the extent of any loss or destruction of or damage to Government-furnished Property for
which the Contractor is relieved of liability under the foregoing. provisions of this clause, and except for reason-
able wear and tear or depreciation, or the utilization of the Government-furnished Property in accordance with the
provisions of this contract, the Government-furnished Property (other than property permitted to be sold) shall
be returned to the Government in as good condition as when received by the Contractor in connection with this
contract, or as repaired under paragraph (e) above.
(6) In the event the Contractor is reimbursed or compensated for any loss or destruction of or damage
to the Government-furnished Property, caused by an excepted peril, he shall equitably reimburse the Govern-
ment. The Contractor shall do nothing to prejudice the Government's rights to recover against third parties for
any such loss, destruction or damage and, upon the request of the Contracting Officer, shall at the Government's
expense, furnish to the Government all reasonable assistance and cooperation (including the prosecution of suit
and the execution of instruments of assignment in favor of the Government) in obtaining recovery. In addition,
where a subcontractor has not been relieved from liability for any loss or destruction of or damage to the Govern-
ment-furnished Property, the Contractor shall enforce the liability of the subcontractor for such loss or destruction
of or damage to the Government-furnished Property for the benefit of the Government.
(7) If this contract is for the development, production, modification, maintenance or overhaul of aircraft,
or otherwise involves the furnishing of aircraft by the Government, the "Ground and Flight Risk" clause of this
contract shall control, to the extent it is applicable, in the case of loss or destruction of, or damage to, aircraft.
(g) The Government shall at all reasonable times have access to the premises wherein any Government-
furnished Property is located.
(h) Upon the completion of this contract, or at such earlier dates as may be fixed by the Contracting Officer,
the Contractor shall submit, in a form acceptable to the Contracting Officer, inventory schedules covering all
items of Government-furnished Property not consumed in the performance of this contract (including any result-
ing scrap) or not theretofore delivered to the Government, and shall deliver or make such other disposal of such
Government-furnished Property, as may be directed or authorized by the Contracting Officer. The net proceeds of
any such disposal shall be credited to the contract price or shall be paid in such other manner as the Contracting
Officer may direct.
(i) Directions of the Contracting Officer and communications of the Contractor issued pursuant to this
Clause shall be in writing.
30. NOTICE TO THE GOVERNMENT OF LABOR DISPUTES. (Sep. 1958)-(a) 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, including all relevant information with
respect thereto, to the Contracting Officer.
(b) The Contractor agrees to insert the substance of this clause, including this paragraph (b), in any sub-
contract hereunder as to which a labor dispute may delay the timely performance of this contract; except that
each such subcontract shall provide that in the event its timely performance 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.
31. LIMITATION ON WITHHOLDING OF PAYMENTS. (Sep. 1958)-If more than one clause or Schedule pro-
vision of this contract authorizes the temporary withholding of amounts otherwise payable to the Contractor for
supplies delivered or services performed, the total of the amounts so withheld at anyone time shall not exceed
the greatest amount which may be withheld under any one such clause or Schedule provision at that time; pro-
vided, that this limitation shall not apply to-
(i) withholdings pursuant to any clause relating to wages or hours of employees;
(ii) withholdings not specifically provided for by this contract; and
(iii) the recovery of overpayments.
32. INTEREST (May 1963). Notwithstanding any other provision of this contract, unless paid within 30 days
all amounts that become payable by the Contractor to the Government under this contract (net of any applicable
tax credit under the Internal Revenue Code) shall bear interest at the rate of six percent per annum from the date
due until paid and shall be subject to adjustments as provided by Part 6 of Appendix E of the Armed Services
Procurement Regulation, as in effect on the date of this contract. Amounts shall be due upon the earliest one of
(i) the date fixed pursuant to this contract, (ii) the date of the first written demand for payment, consistent with
this contract, (iii) the date of transmittal by the Government to the Contractor of a proposed supplemental agree-
ment to confirm completed negotiations fixing the amount, or (iv) if this contract provides for revision of prices,
the date of written notice to the Contractor stating the amount of refund payable in connection with a pricing
proposal or in connection with a negotiated pricing agreement not' confirmed by contract supplement.
33. COMPETITION IN SUBCONTRACTING. (Apr. 1962)-(Applicable only if this is a negotiated contract over
$10,000.00.) The Contractor shall select subcontractors (including suppliers) on a competitive basis to the maximum
practical extent consistent with the objectives and requirements of the contract.
34. CHANGES. (Jun. 1959)-The Contracting Officer may at any time, by written order, and without notice
to the sureties, if any, make changes, within the general scope of this contract, in any one or more of the following:
(i) drawings, designs, or specifications, (ii) method of shipment or packing, (iii) place of inspection, delivery, or ac-
ceptance, and (iv) the amount of Government-furnished property. If any such change causes an increase or de-
crease in the cost of, or the time required for performance of, this contract, or otherwise affects any other pro-
visions of this contract, whether changed or not changed by any such order, an equitable adjustment shall be
made (i) in the contract price or time of performance, or both, and (ii) in such other provisions of the contract
as may be so affected, and the contract 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 Contrac-
tor of the notification of change; provided, however, that the Contracting Officer, if he decides that the facts
justify such action, may receive and act upon any such claim asserted at any time prior to final payment under
this contract. Failure to agree to any adjustment shall be a dispute concerning a question of fact within the mean-
ing of the clause of this contract entitled "Disputes." However, nothing in this clause shall excuse the Contractor
from proceeding with the contract as changed.
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35. SHIPMENTS. (Oct. 1957)-(a) Unless otherwise provided in this contract or unless the Contracing Officer
acting under the "Changes" clause hereof directs in writing otherwise, all supplies to be furnished under this contract
shall be delivered f.o.b. carrier's equipment at the plant or plants at which such supplies are to be finally inspected
and accepted, or if the facilities for shipment by carrier's equipment are not available at the Contractor's plant, f.o.b.
the point or points nearest thereto that carrier service is available. When the carrier's equipment is rail, any
shipment occupying sufficient space in a railroad car to constitute a carload shipment subject to carload freight
rates shall be properly and adequately loaded in freight cars by the Contractor, and any shipment subject to
less-than-carload freight rates shall be delivered by the Contractor into the carrier's possession at the Con-
tractor's plant, or at the point or points nearest thereto at which delivery can be effected.
(b) 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, at
the expense of the Contractor. Provided, however, that nothing contained herein shall preclude reimbursement of
the Contractor by the Government of any such transportation expenses if this is a cost-reimbursement type
contract.
(c) Notwithstanding other provisions of this contract, shipments made under cost-reimbursement contracts
which do not exceed (i) 1000 pounds if shipped by rail, truck, or freight forwarder, or (ii) 100 pounds if shipped
by railway express, or (iii) 50 pounds if shipped by commercial air, shall be made by commercial bills of lading,
charges to destination(s) paid by the Contractor.
(d) If the Contracting Officer directs in writing that any of the supplies to be furnished hereunder be de-
livered to a carrier for shipment from a point other than specified in this contract, equitable adjustment shall be
made in the contract price in the manner provided in the general provisions of this contract entitled "Changes."
(e) Shipping Instructions. If not otherwise provided herein, names of consignees of all supplies to be de-
livered by the Contractor hereunder will be furnished in writing by the Contracting Officer at a later date. Request
therefor shall be made to such address as the Contracting Officer may direct, not later than thirty (30) days prior
to the date on which any of the articles are ready for shipment.
(f) Routing Instructions. If not otherwise provided herein and deliveries are other than f.o.b. specified
destinations, Government routing instructions will be furnished to the Contractor in writing by the Contracting
Officer at a later date. If the Government routing instructions have not been received by the Contractor thirty
(30) days prior to date on which any of the articles are anticipated to be ready for shipment, request therefor
shall immediately be made to the cognizant transportation activity specified herein.
(g) Notice of Shipments. (Jul. 1949) At the time of delivery of any shipment of supplies to a carrier for
transportation, the Contractor shall give prepaid notice of shipment to the consignee establishment, and to such
other persons or installations designated by the Contracting Officer, in accordance with instructions of the Contract-
ing Officer. If such instructions have not been received by the Contractor at least twenty-four (2t) hours prior to
such delivery to a carrier, the Contractor shall request instructions from the Contracting Officer concerning the
notice of shipment to be given.
(h) Computation of Delivery Time. For the purpose of determining the fulfillment of this contract so far
as delivery dates are concerned, in the event the delivery point or points are not the same as the point or points
of destination, the time of delivery of the supplies shall be the date of delivery to the carrier ready for shipment
to destination.
(i) Shipments by the Government. Unless this is a cost-reimbursement type contract, any articles, supplies
or other items to be delivered by the Government to the Contractor shall, unless otherwise provided herein, be de-
livered to the Contractor f.o.b. carrier's equipment at the plant or plants of the Contractor designated, or if
facilities for shipment by carrier's equipment are not available at the Contractor's plant or plants, f.o.b. the point
or points nearest thereto that carrier's equipment is available.
(j) Where the contract provides that inspection and acceptance shall be accomplished at a subcontractor's
plant (whether in whole or in part) the foregoing provisions, except paragraphs (e) and (f), shall be equally
applicable to such subcontractors as provided in said subcontract. Subcontractors' shipping instructions and rout-
ing instructions, if not previously furnished, shall be requested from the Prime Contractor.
36. GOVERNMENT BILL OF LADING. (Jul. 1961) When it is provided in this contract that the supplies shall
be deliverd other than f.o.b. specified destinations, shipment(s) will be made on a Government Bill of Lading. The
required number of such Government Bills of Lading will be furnished to the Contractor by the cognizant transpor-
tation activity. The Contractor shall acknowledge receipt of these Government Bills of Lading in the manner pre-
scribed. As shipments are made, the Contractor shall prepare and distribute the applicable Government Bills of
Lading in accordance with AFLC Form 232, "Instructions for Processing U. S. Government Bill of Lading." The
Contractor also agrees that Government Bills of Lading in excess of the requirements of this contract will be re-
turned to the cognizant transportation activity within a reasonable time after final shipment. The use of U. S.
Government mailing indicia is authorized in lieu of U. S. Government Bills of Lading when commodity, weight,
and cube permit movement within the U. S. Postal Service.
37. DATA-WITHHOLDING OF PAYMENT. (Apr. 1962)-If "Subject Data" (as defined in the clause of this
contract entitled "Data"), or any part thereof, is not delivered within the time specified by this contract or is de-
ficient upon delivery (including having restrictive markings not specifically authorized by this contract), the Con-
tracting Officer may, until such data is delivered or deficiences 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.
38. SUPERSEDING SPECIFICATIONS. (Jul. 1948)-All references in any Government specification incorpo-
rated herein to other Government specifications shall be deemed to include all specifications 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 specifications at the time of said quotation.
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39. SUBCONTRACTS.-No contract shall be made by the Contractor with any'Mher party for furnishing any
of the completed or substantially completed articles, spare parts, or work, herein contracted for, without the
written approval of the Contracting Officer as to sources.
4
40. SUBCONTRACTS. (Nov. 1963)-If this contract provides for price redetermination or contains incentive
provisions, the following provisions shall apply to subcontracts in lieu of Clause 39 above:
(a) As used in this clause, the term "subcontract" includes purchase orders.
(b) Except as provided in paragraph (d) below, the Contractor shall notify the Contracting Officer reasonably
in advance of entering into any subcontract which-
(i) is on a cost-plus-a-fee, time and material, or labor-hour basis and which would involve an esti-
mated amount in excess of $10,000 including any fee; or
(ii) is proposed to exceed $25,000 or five per cent (5%) of the total amount of this contract; or
(iii) is one of a number of subcontracts under this contract with a single subcontractor for the same
or related supplies or services which, in the aggregate, are expected to exceed $25,000 or five per
cent (5%) of the total amount of this contract.
(c) The advance notification required by paragraph (b) above shall include:
(i) a description of the supplies or services to be called for by the subcontract;
(ii) identification of the proposed subcontractor and an explanation of why and how the proposed sub-
contractor was selected, including the degree of competition obtained;
(iii) the proposed subcontract price, together with the Contractor's cost or price analysis thereof;
(iv)) the subcontractor's current, complete, and accurate cost or pricing data and Certificate of Current
Cost or Pricing Data when such data and certificate are required, by other provisions of this contract, to be ob-
tained from the subcontractor; and
(v) identification of the type of contract to be used.
(d) Advance notifications of subcontracts, as required bye paragraph (b) above, are not required for any
subcontract (i) not on a cost-plus-a-fee, time and material, or labor-hour basis, if the Contracting Officer has in
writing approved the Contractor's purchasing system and the subcontract is within the limitations of such approval,
or (ii) consented to in writing by the Contracting Officer as a proposed subcontract prior to the execution of this
contract.
(e) The Contractor shall not, without the prior written consent of the Contracting Officer, enter into any
subcontract for which advance notification to the Contracting Officer is required by this clause; provided that, in
his discretion, the Contracting Officer may ratify in writing any subcontract and such ratification shall constitute
the consent of the Contracting Officer required by this paragraph.
(f) No consent by the Contracting Officer to any subcontract or any provisions thereof or approval of the
Contractor's purchasing system shall be construed to be a determination of the acceptability of any subcontract
price or of any amount paid under any subcontract or to relieve the Contractor of any responsibility for per-
forming this contract, unless such approval or consent specifically provides otherwise.
(g) The Contractor agrees that no subcontract placed under this contract shall provide for payment on a
cost-plus-a-percentage-of-cost basis.
41. QUALITY CONTROL SYSTEM. (Jan. 1963)-The Contractor shall provide and maintain a quality control
system acceptable to the Government for the supplies covered by this contract. The system of Quality Control shall
be in accordance with Military Specification MIL-Q-9858, U. S. Air Force Bulletin No. 515, Control of Nonconform-
ing Supplies and Military Specification MIL-C-45662A, Calibration System Requirements, as in effect on the date
of this contract. The provisions of this clause shall be inapplicable if this contract is one of the types specified in
Paragraph 1.2 of MIL-Q-9858.
42. RESPONSIBILITIES FOR SUPPLIES. (Jan. 1958) (If this contract is for the delivery of end items other
than designs, drawings, or reports the following clause shall be applicable.) Except as otherwise provided in this
contract, (i) the Contractor shall be responsible for the supplies covered by this contract until they are delivered
at the designated delivery point, regardless of the point of inspection; (ii) after delivery to the Government at the
designated point and prior to acceptance by the Government or rejection and giving notice thereof by the Govern-
ment, 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 negligence of officers, agents, or employees of the Government acting
within the scope of their employment; and (iii) the Contractor shall bear all risks as to 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 officers, agents, or em-
ployees of the Government acting within the scope of their employment.
43. ACKNOWLEDGEMENT OF SPONSORSHIP.-(a) The Contractor agrees that in the release of infor-
mation relating to this contract such release shall include a statement to the effect that the project or effort de-
picted was or is sponsored by the agency set forth in the Schedule of this contract.
(b) For the purpose of this clause, "information" includes but is not limited to, news releases, articles,
manuscripts, brochures, advertisements, still and motion pictures, speeches, trade association meetings, symposia,
etc.
(c) Nothing in the foregoing shall affect compliance with the requirements of the clause of this contract
entitled "Military Security Requirements."
(d) The Contractor further agrees to include this provision in any subcontract awarded as a result of this
contract. ,, ((5`~
SEE CLAUSE.....`1....ALTERAPTQN~
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4 -ALTERATIONS IN CONTRACT, (JUL. 19)49). The following alterations have
been made in the provisions of this contract:
Clause 13 - Buy American Act (Jul. 1960) - of the General Provisions is hereby
deleted.
Clause 17 - Nondiscrimination in Employment (June 1963) - of the General
Provisions is hereby deleted.
Clause 23 - Patent Rights (License) (Apr. 1962) - of the General Provisions is
hereby deleted.
Clause 24 - Data (Feb. 1962) - of the General Provisions is hereby deleted.
Clause 25 - Military Security Requirements (Jan 1958) - of the General Provisions
is amended by changing the date in the title to (Jun. 1958).
Clause 40 - Subcontracts (Nov. 1963) - of the General Provisions is hereby deleted.
Any reference.in any clause to "Subject Data" shall be deemed to be a
reference to "Technical Data" as defined in any basic Data Clause of this
contract.
Clause 41 - Quality Control System (Jan. 1963) - of the General Provisions is
hereby deleted.
AFPI 71-,9_ (Nov., 1.963) FP R&D 23 July 1961
For use with commercial concerns or not-for-profit organizations (receiving
profit) where equipment items are being purchased. With new Data Provisions.
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BUY AMERICAN ACT (MAY 1964)
(a) In acquiring end products, the Buy American Act (41 U.S.C, lOa-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 supplies,
which are directly incorporated in the end products;
"end products" means those articles, materials, and supplies,
which are to be acquired under this contract for public use;
and
(iii) a "domestic source end product" means (A) an unmanufactured
end product which has been mined or produced in the United
States and (B) an end product manufactured in the United
States if the cost of the components thereof which are mined,
produced, or manufactured in the United States or Canada
exceeds 50 percent of the cost of all its components,, For
the purposes of this (a.)(iii)(B), oomponents of foreign
origin of the same type or kind as the products referred
to in (b) (ii) or (iii) of this clause shall be treated
as components mined, produced, or manufactured in the United
States.
(b) The Contractor agrees that there wil.J_ be delivered under this
contract only domestic source end products, except end products:
(I) which are for use outside the United States;.
(ii) which the Government determines are not mined, produced, or
manufactured in the Untied State:, in sufficient and reasonably
available commercial quantities- and of a satisfactory quality;
(iii) as to which the Secretary determines the domestic preference
to be inconsistent with the public interest; or
as to which the Secretary determines the cost to the Government
to be unreasonable.
(The foregoing requirements are administered in accordance with Executive Order
No. 10582, dated December 17, 1951. So as to alleviate the impact of Department
of Defense expenditures on the United States balance of international payments,
bids offering domestic source end products normally will be evaluated against
bids offering other end products by adding a factor of fifty percent (50%) to
the latter, exclusive of import duties. Details of the evaluation procedure
are set forth in Section Vi of the Armed Services Procurement Regtulation.
ASPR 6-104.5 23 July 1.96
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QFIAL OPPORTUNITY (APR. 1964)
(The following clause is applicable unless this contract is exempt
under the rules and regulations of the President's Committee on Equal
Employment Opportunity (4l C.F.R. Chapter 60). Exemptions include con-
tracts and subcontracts (i) not exceeding $10,000, (ii) not exceeding
$100,000 for standard commercial supplies or. raw materials, and (iii)
under which work is-performed outside the United States and no recruit-
ment of workers within the United States is?involved.)
During the performance of this contract, the Contractor agrees as
follows:
(a) The Contractor will not discriminate against any employee or appli-
cant for employment because of race, creed, color, or national origin.
The Contractor will take affirmative action to ensure that applicants
are employed, and that employees are treated during employment, without
regard to their race, creed, color, or national origin. Such action
shall include, but not be limited to, the following: employment, upgrad-
ing, demotion, or transfer; recruitment or recruitment advertising; lay-
off 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 con-
tract or understanding, a notice, to be provided by the Agency Contract-
ing Officer, advising the said labor union of workers' representative of
the Contractor's commitments under this nondiscrimination clause, and
shall post copies of the notice in conspicuous places available to em-
ployees and applicants for employment.
(d) The Contractor will comply with all provisions of Executive Order
No. 10925 of March 6, 1961, as amended, 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, as amended, and by the
rules, regulations, and orders of the said Committee, or pursuant there-
to, and will permit access to his books, records, and accounts by the
contracting agency and the Committee for purposes of investigation to
ascertain compliance with such rules, regulations, and orders.
Page 1
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..............PATENT RIGHTS (LICENSE) (May 1964)
(a) Definitions Used in This Clause.
(1) Subject Invention means any invention or discovery, whether or not patentable, conceived or first actually
reduced to practice in the course of or under this contract. The term "Subject Invention" includes, but is not limited
to, any art, machine, manufacture, design or composition of matter, or any new and useful improvement thereof,
or any variety of plant, which is or may be patentable under the patent laws of the United States of America or
any foreign country.
(2) Governmental purpose means the right of the Government of the United States (including any agency
on behalf of heeGovernmuse or have
any municipal
Subject Invention )th to practice and have throughout the world racticed (make or
ent of the
have domestic
used, thereof, sell state or
United States.
(3) Contract means any contract, agreement, grant, or other arrangement, or subcontract entered into with
or for the benefit of the Government where a purpose of the contract is the conduct of experimental, developmen-
tal, or research work.
(4) Subcontract and subcontractor mean any subcontract or subcontractor of the Contractor, any lower-tier
subcontract or subcontractor under this contract.
(5) To bring to the point of practical application means to manufacture in the case of a composition or
product, to practice in the case of a process, or to operate in the case of a machine or system and, in each case,
under such conditions as to establish that the Invention is being worked and that its benefits are reasonably ac-
cessible to the public.
(b) Rights Granted to the Government.
(1) The Contactor agrees to and does hereby grant to the Government an irrevocable, nonexclusive, and
royalty-free license to practice and have practiced each Subject Invention (made-by the Contractor) throughout the
world for Governmental purposes. In addition, the Government shall have the right to grant licenses to any foreign
government or international organization specifically for use in programs established by International Agreements
for research, development, or production of weapons or equipment for mutual defense and shall include the rac-
tice of such Subject Invention in the manufacture, use, and disposition of any article,or material, in the use of any
method, or in the performance of any service acquired by or for the Government or with funds derived through the
Military Assistance Program of the Government or otherwise through the Government.
(2) The Contractor further agrees to grant, upon the request of the Government, a license under any Subject
Invention (made by the Contractor) to:
(i-) any applicant on a nonexclusive, royalty-free basis, unless the Contractor, his licensee, or his assignee
demonstrates to the Government, at its request, that effective steps have been taken within three years after a
patent issues on such Invention to bring the Invention to the point of practical application or that the Invention
has been made available for licensing royalty-free or on terms that are reasonable in the circumstances, or can
show cause why the principal or exclusive rights should be retained fora further period of time;
(ii) any applicant royalty-free or on terms that are reasonable in the circumstances to the extent that the
.Invention is required for public use by governmental regulations or as may be necessary to fulfill health needs, or for
other public purposes stipulated in the Schedule of this contract.
Nothing contained in this Patent Rights clause shall be deemed to grant any rights with respect to any inven-
tion other than a Subject Invention.
(c) Invention Disclosures and Reports. With respect to Subject Inventions (made by the Contractor), the
Contractor shall furnish to the Contracting Officer:
(i) a written disclosure of each such Invention within four (4) months after conception or first actual
reduction to practice, whichever occurs first under this contract, -sufficiently complete as to technical detail to con-
vey to one skilled in the art to which the Invention pertains a clear understanding of the nature, purpose, opera-
tion and, as the case may be, physical, chemical or electrical characteristics of the Invention, together with a
written statement making an election as to whether a United States patent application claiming the Invention will
be filed by or on behalf of the Contractor;
(ii) interim reports at least every twelve (12) months, the initial period of which shall commence with the
date of this contract, each report listing all such Inventions conceived or first actually reduced to practice more
than three (3) months prior to the date of the report and not listed on a prior interim report, or certifying that
there are no such unreported Inventions;
(iii) prior to final settlement of this contract, a final report listing all such Inventions including all those
previously listed in interim reports, or certifying that there are no such unreported Inventions; and
(iv) written reports at reasonable intervals, prior to and after final settlement, when requested by the
Government, as to
(A) the commercial use that is being made or is intended to be made of such Invention;
(B) the steps taken by the 'Contractor to bring the Invention to the point of practical- application, or to
make the Invention available for licensing.
(d) Domestic Filing. In connection with each Subject Invention referred to in (c) (i) above:
(i) if the Contractor has elected to file a United States patent application claiming such Invention, the
Contractor shall, within six (6) months after the election, file -or cause to be filed such application in due form and
shall so notify the Contracting Officer at the time of such filing; if the Contractor does not file or cause to be
filed such application, he shall notify the Contracting Officer within the six (6) month period;
(ii)' if the Contractor has elected not -to file or to cause to be filed a United States patent application claim-
ing such Invention, or has made the contrary election but has not filed or caused to be filed such application within
six (6) months after the election, the Contractor shall:
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APPI 71-591, May 1964
(ASPR 9-107.5(b))
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(A) inform the Contracting Officer in writing, as soon as practicable, of the date and identity of any
public use, sale, or publication of such Invention made by or known to the Contractor or of any contemplated pub-
lication by the Contractor;
(B) upon written request, convey to the Government the Contractor's entire right, title and interest in
such Invention by delivering to the Contracting Officer such duly executed instruments (prepared by the Govern-
ment) of assignment and application, and such other papers as are deemd necessary to vest in the Government
the entire right, title, and interest aforesaid, and the right to apply for and prosecute patent applications cover-
ing such Invention throughout the world, subject to the reservation of a nonexclusive and royalty-free license to
the Contractor (and to his existing and future associated and affiliated companies, if any, within the corporate
structure of which the Contractor is a part) which license shall be assignable to the successor of that part of the
Contractor's business to which such Invention pertains;
(iii) the Contractor shall furnish promptly to the Contracting Officer on request an irrevocable power of
attorney to inspect and make copies of each United States patent application filed by or on behalf of the Con-
tractor covering any such Invention;
(iv) in the event the Contractor, or those other than the Government deriving rights from the Contractor,
elects not to continue prosecution of any such United States patent application filed by or on behalf of the Con-
tractor, the Contractor shall so notify the Contracting Officer not less than sixty (60) days before the expiration
of the response period and, upon written request, deliver to the Contracting Officer such duly executed instruments
(prepared by the Government) as are deemed necessary to vest in the Government the entire right, -title, and in-
terest in -such Invention and the application, subject to the reservation as specified in paragraph (d) (ii) (B) of this
clause; and
(v) the Contractor shall deliver to the Contracting Officer duly executed instruments fully confirmatory
of all rights herein agreed to be granted or reserved to the Government.
(?e) Foreign Filing. The Contractor, or those other than the Government deriving rights from the Contractor,
shall as between the parties hereto, have the exclusive right, subject to the rights -of the Government under para-
graph (b) of this clause, to file applications on Subject Inventions (made by the Contractor) in each foreign
country within:
(i) nine (9) months from the date a corresponding United States application is filed, or nine (9) months
from the date the Contractor discloses a Subject Invention under paragraph (c) (i) above with an election not to
file a United States application;
(ii) six (6) months from the date permission is granted to file foreign applications where such filing had.
been prohibited for security reasons; or
(iii) such longer period as may be approved by the Contracting Officer.
The Contractor shall notify the Contracting Officer of each foreign application filed and, upon written request of
the Contracting Officer, convey to the Government the entire right, title, and interest in each such Subject Inven-
tion in each foreign country in which an application has not been filed within the time above specified, subject to
the reservation as specified in paragraph (d) (ii) (B) of this clause.
(f) Withholding of Payment. If the Contractor fails to deliver to the Contracting Officer the interim reports
required by (c) (ii) above, or fails to furnish the written disclosures for all Subject Inventions required by (c) (1)
above shown to be due in accordance with any interim report delivered under (c) (ii) or otherwise known to the
Government to be unreported, there shall be withheld from payment, until the Contractor shall have corrected such
failures, either ten percent (10%) of the amount of this contract, as from time to time amended, or ten thousand
dollars ($10,000), 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 ten percent (10%) of the amount
of this contract, or ten thousand dollars ($10,000) whichever is less, shall have been set aside, such reserve or
balance thereof to be retained until the Contractor shall have furnished to the Contracting Officer:
(?i) the final report required by (c) (iii) of this clause;
(ii) written disclosures for all Inventions required by (c) (i) above which are shown to be due in accord-
ance with interim reports delivered under (c) (ii) above, or in accordance with such final reports, or are otherwise
known to the Government to be unreported; and
(iii) the information as to any subcontractor required by (g) below.
No amount shall be withheld under this paragraph when the amount specified by this paragraph is being with-
held 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 compliance with the patent provision of a subcontract. In cost-type contracts, "amount of this contract"
shall mean "estimated cost of this contract."
(g) Subcontracts.
(1) The Contractor shall, unless otherwise authorized or directed by the Contracting Officer, include a patent
rights -clause containing all of the provisions of this Patent Rights clause except provision (f) in any subcontract
hereunder where a purpose of the subcontract is the conduct of experimental, developmental, or research work. In
the event of refusal by a subcontractor to accept this Patent Rights clause, or if in the opinion of the Contractor
this Patent Rights clause is inconsistent with the policy set forth in ASPR 9-107.2 and 9_107.3', the Contractor:
(i) shall promptly submit a written report to the Contracting Officer setting forth the subcontractor's
reason for such refusal or the reasons the Contractor is of the opinion that the inclusion of this clause would be
so inconsistent, -and other pertinent information which may expedite disposition of the matter; and -
(ii) shall not proceed with the subcontract without the written authorization of the Contracting Officer.
The Contractor shall not, in any subcontract or by using such a subcontract as consideration therefor, acquire any
rights to Subject Inventions for his own use (as distinguished from such rights as may 'be required solely to fulfill
his contract obligations to the Government in the performance of this contract). Reports, instruments, and other in-
formation required to be furnished by a subcontractor to the Contracting Officer under the provisions of such a
patent rights clause in a subcontract hereunder may, upon mutual consent of the Contractor and the subcontractor
(or by direction of the Contracting Officer) be furnished to the Contractor for transmission to the Contracting
Officer.
('Continuation of AFPI 71- . or 1.59,115
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(2) The o ractor, at b e ear lest practicable ate, s al2a so no i y the acting cer in writing of
any subcontract containing a patent rights clause, furnish him a copy of such clause, and notify him when such
subcontract is completed. It is understood that the Government is a third party beneficiary of any subcontract
clause granting rights to the Government in Subject Inventions, and the Contractor hereby assigns to the Govern-
ment all the rights that he would have to enforce the subcontractor's obligations for the benefit of the Government
with respect to Subject Inventions. If there are no subcontracts containing patent rights clauses, a negative re-
port is required. The Contractor shall not be obligated to enforce the agreements of any subcontractor hereunder
relating to the obligations of the subcontractor to the Government in regard to Subject Inventions.
(h) Licenses Granted by Contractor to Others Subject to Government's Rights. The Contractor recognizes that
the Government,,or a foreign government with funds derived through the Military Assistance Program or other-
wise through the United States Government, may contract for property or services with respect to which the ven-
dor may be liable to the Contractor for royalties for the use of a Subject Invention 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 con-
tracts, or to allow to be paid in connection with contracts made with funds derived through the Military Assistance
Program or otherwise through the United States Government, charges for use of patents in which the Government
holds a royalty-free license. In recognition of this policy, the Contractor agrees to participate in and make appro-
priate 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.
(1) Rights to Disclose Subject Inventions. The Government may duplicate and disclose reports and disclosures of
Subject Inventions required to be furnished by the Contractor or a subcontractor pursuant to this Patent Rights
clause.
(Continuation ,l ~l P ei 42 26ftlW87: M-~DP78B04747A000900060002-5
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CLAUSE STOP WORK ORDER (Jul 1960)
(a) The Contracting Officer may, at any time, by written order to the
Contractor, require the Contractor to stop all, or any part, of the work called
for by the contract for a period -of ninety (90) days after the order is delivered
to the Contractor, and for any ffr.?ther period to which the parties may agree.
Any such order shall be specifically identified as a Stop Work Order fissured
pursuant to this clause. Upon receipt of such an order, the Contractor, shall
forthwith comply with its terms and take all reasonable steps to minimize the
incurrence of costs allowable to the work covered by the order during the
period of work stoppage. Within a period of ninety (90) days after 'a stop work
order is delivered to the Contractor, or within any extension of that period
to which: the parties shall have agreed, the Contracting Officer shall either
(1) cancel the stop work order, or.
(ii.) terminate the work covered by such order as provided in the
"Termination for Convenience" clause of this contract.
(b) If a stop work order is.- ured under this clause is canceled or the
period of the order or any extension thereof expires, the Contractor shall,
resume work. An equitable adjustment shall be made in theideliverytschedule
or contract price,, or both, and the contract shall be modified in- sting
accordingly, if
(i) the stop work order results in an increase in the time required
for, or in the Contractor's cost properly allowable to, the performance of any
part of this contract, and
(ii) the-Contract asserts a claim for such adjustment within thirty
(30) days after the end of the period of work stoppage; provided that, if the
Contracting Officer decides the facts justify such action, he may receive and
act upon any such claim asserted at any time prior to final payment ender this
contract.
Failure to agree to- any adjustment shall be a dispute concerning a question of
fact within the meaning of the "Disputes" clause of this contract.
(o) If a stop work order is not canceled and the work covered by: such order,'
3s terminated for the convenience of the Government, the reasonable costs re-
sulting from the stop work order shall be allowed in arriving atthe termination .
settlement.
ASPR 7-105.8(o)
11Marph 1963
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49 t
Clause REPORTS OF WORK (JUL 60)
(a) The Contractor shall submit reports making full disclosure
of all work done and the results thereof, in the manner, at the times,
and to the extent set forth in the Schedule; provided that, unless
otherwise specified in the Schedule, the Contractor shall submit such
reports in triplicate from time to time as requested and upon completion
(or earlier termination) of the work. Except as may be otherwise specified
in the Schedule, or unless the Contractor is otherwise instructed,, the
Contractor shall, upon completion (or earlier termination) of the work,
deliver any working drawings and specifications of any prototypes as
may have been developed,
(b) If the Contractor becomes unable to complete the contract work
and to deliver at the time specified in the Schedule because of technical
difficulties, notwithstanding the exercise of good faith and diligent
efforts in performance of the work, he shall give, the Contracting Officer
written notice of the anticipated delays with reasons therefor not less
than forty-five (4) days before the completion date specified in the
Schedule or within such time as the Contracting Officer deems sufficient.
When notice is so required, the Contracting Officer may, in his discretion,
extend the time specified in the Schedule for such period as he deems
advisable..
ASPR 7-404.6
7 May 1962
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RIGHTS IN TECHNICAL DATA (MAY 19611)
(a) Definitions.
(1) Technical Data, as used in this clause, means technical
writing, sound recordings, pictorial reproductions, drawings, or other
graphic representations and works of a technical nature, whether or
not copyrighted, which are specified to be delivered pursuant to this
contract. The term does not include financial reports, cost analyses,
and other information incidental to contract administration.
(2) Limited Rights means rights to use, duplicate, and disclose
technical data in whole or in part, by or for the Government, with
the express limitation that such data may not be released outside
the Government, used, duplicated, or disclosed in wl;ule or in part,
for manufacture or procurement, except fore
(i) emergency repair or overhaul work by or for the Government
where the item or process concerned is not otherwise
reasonably available to enable timely performance of the
work; and
release to a foreign government as the interests of the
United States may require;
provided, in either case, that the release of such data shall be
subject to the limitations of this paragraph (2).
(3) Unlimited Rights means rights to use, duplicate or disclose
technical data, n whole or in part, in any manner and for any purpose
whatsoever, and to have or permit others to do so.
(b) Government Rights,.
(1) The Government shall have unlimited rights in-
(i) technical data resulting directly from performance of
experimental, developmental or research work which was
specified as an element of performance in this or any
other Government contract or subcontract;
(ii) technical data necessary to enable manufacture of end-
items, components and modifications, or to enable the
performance of processes, when the end-items, components,
modifications or processes have been, or are being
developed under this or any other Government contract or
subcontract in which experimental, developmental or
research work is, or was specified as an element of contract
performance, except that technical data pertaining to
components or processes which were developed at private
expense and incorporated into, or used in making, the end-
items, components, modifications or processes developed,
shall be acquired with limited rights if the Contractor
furnishes with unlimited rights the "form, fit and function"
data, as described under (iv) below, for the components or
processes developed at private expense;
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(iii) technical data constituting corrections or changes to
Government-furnished data;
(iv) technical data pertaining to end-items, components or
processes which was prepared for the purpose of identifying
sources, size, configuration, mating and attachment
characteristics, functional characteristics and performance
requirements ("form, fit and function" data, ems. .,
specification control drawings, catalog sheets, envelope
drawings, etc.);
(v) manuals or instructional materials prepared for
installation, operation, maintenance or training purposes;
(vi) other technical data which has been, or is normally
furnished without restriction by the Contractor or sub-
contractor; and
(vii) technical data listed or described in an agreement in-
corporated into the Schedule of this contract, which the
parties have predetermined, on the basis of subparagraphs
(i) thru (vi) above, and agreed will be furnished with
unlimited rights.
(2) The Government shall have limited' rights in
(1)
technical data, listed or described in an agreement
incorporated into the Schedule of this contract, which
the parties have agreed will be furnished with limited
rights; and
(ii) except as provided in (1) above, other technical data
pertaining to items, components or processes developed at
private expense;
provided that each piece of such data is marked with the following
legend in which is inserted the number of the prime contract under
which the technical data is to be delivered and the name of the
Contractor or subcontractor by whom the technical data was generated:
"Furnished under United States Government Contract No.
Shall not be either released outside the Government, or used,
duplicated, or disclosed in whole or in part for manufacture or
procurement, without the written permission of , except
for: (i) emergency repair or overhaul work by or for the Government,
where the item or process concerned is not otherwise reasonable
available to enable timely perfotm;~nce of the work; or (ii) release
to a foreign government, as the interests of the United States may
require; provided that in either case the release, use, duplication
or disclosure hereof shall be subject to the foregoing limitations.
This legend shall be marked on any reproduction hereof in whole or
in part."
No legend shall be marked on, nor shall any limitation on rights of use
be asserted as to, any data which the Contractor has previously
delivered to the Government without restriction. The limited rights
provided for by this paragraph (b)(2) shall not impair the right of
the Government to use similar or identical data acquired from other
sources.
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(c) Material Covered by Copyright
(1 Notwithstanding the provisions of (b) above, the Contractor
agrees to and does hereby grant to the Government, and to its
officers, agents, and employees acting within the scope of their
official duties, a royalty-free, nonexclusive and irrevocable license
throughout the world for Government purposes to publish, translate,
reproduce, deliver, perform dispose of, and to authorize others so
to do, all technical data now or hereafter covered by copyright.
(2) No such copyrighted matter shall be included in technical
date furnished hereunder without the written permission of the copy-
right owner for the Government to use such copyrighted matter in the
manner described above.
(3) The Contractor shall report to the Government (or higher-
tier Contractor) promptly and in reasonable written detail each
notice or claim of copyright infringement received by the Contractor
with respect to any technical data delivered hereunder.
(d) Removal of Unauthorized Markings. Notwithstanding any
provisions his contraac concerning inspection and acceptance, the
Government may modify, remove, obliterate, or ignore any marking not
authorized by the terms of this contract on any technical data
furnished hereunder, if --
(i) the Contractor fails to respond within sixty (60) days to
a written inquiry by the Government concerning the propriety
of the use of the marking, or
(ii) the Contractor's response fails to substantiate his
contention that the use of the marking is authorized, in
which case the Government shall give written notice to the
Contractor.
(e) Relation to Patents. 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) Limitation on Charges for Data. The Contractor recognizes
that the Government, or a foreign government with funds derived through
the Military Assistance 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
technical data on account of such a contract. The Contractor further
recognizes that it is the policy of the Government hot to pay in
connection with its contracts, or to allow to be paid in connection
with contracts made with funds derived through the Military Assistance
Program or otherwise through the United States Government, charges for
data which the Government has a right to use and disclose to others,
which is in the public domain, or which the Government has been
given without restrictions upon its use and disclosure to others,
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This policy does not apply to reasonable reproduction, handling, mailing
and similar administrative costs incident to the furnishing of such
data. In recognition of this policy, the Contractor agrees to participate
in and make appropriate arrangements for the exclusion of such charges
from such contracts, or for the refund of amounts received by the Contractor
with respect to any such charges not so excluded.
(g) Acquisition of Data from Subcontractors.
(1) Whenever any technical data is to be obtained from a sub-
contractor under this contract, the Contractor shall use this same
clause in the subcontract, without alteration, and no other clause
shall be used to enlarge or diminish the Government's or the
Contractor's rights in that subcontractor data which is required for
the Government.
(2) Technical data required to be delivered by a subcontractor shall
normally be delivered to the next higher-tier Contractor. However, when
there is a requirement in the prime contract, or in the deferred order, for
data which may be supplied with limited rights pursuant to (b) and (c)
above, a subcontractor may fulfill such requirement by submitting such data
directly to the Government rather than through the prime Contractor.
(3) The Contractor and higher-tier subcontractors will. not use their
power to award subcontracts as economic leverage to acquire rights in data
from their subcontractors for themselves.
(h) The Contractor will promptly notify the Contracting Officer in
writing of the intended use in the performance of the contract of any
end-item, component, modification or process for which the Contractor in-
tends to furnish data with limited rights; provided, that no such notice
is required with respect to standard commercial items which are manu-
factured by more than one source of supply or with respect to data which
the parties have specified in the Schedule would be furnished with limited
rights.
Defense Procurement Circular
No. 6
2.3 Jul. 64
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IWWO
CLAUSE I 'TTJTERCHANGEABILTTY OF TERMS. (JUL. 1964)
Whenever used in this contract the term "Subject Data" is one and the same
as "Technical Data."
AFPI 9-203.50(a)
CLAUSE MARKING TECHNICAL DATA (JUL. 1964)
The Contractor agrees to mark the number of this contract, and the name and ad-
dress of the Contractor or subcontractor who generated the data, on technical data
delivered to the Government pursuant to any requirement of this contract.
AFPI 9-203.50(d)
CLAUSE LIMITATION ON TECHNICAL DATA REQUIREMENTS (JUL. 1964)
All the technical data and reports requirements of this contract are set forth in
the contractor data requirements list (DD Form 1)123) attached thereto and made a part
hereof and in the ASPR and AFPI clauses included herein. In case of difference or
conflict between the data requirements list and the ASPR and AFPI clause, the latter
shall govern. Nothing in any other documents or specifications made a part hereof
shall be construed as altering such data and reports requirements in any way.
AFPI 9-203.51
AFPC #39 gg
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....PROGRESS PAYMENTS (Total Costs) (Jan. 1961)
Progress payments shall be made to the Contractor as work progresses, from time to time upon request, in
amounts approved by the Contracting Officer upon the following terms and conditions:
(a) Computation of Amounts. (1) Unless a smaller a m o u n t is requested, each progress payment shall
be (i) ______A* percent of the amount of the Contractor's total costs incurred under this contract plus (ii) the amount
of progress payments to subcontractors as provided in (j) below; all less the sum of previous progress payments.
(2) The Contractor's total costs ((a)(1)(i)) shall be reasonable, allocable to this contract, and consistent
with sound and generally accepted accounting principles and practices. However, such costs shall not include (i) any
costs incurred by subcontractors or suppliers, or (ii) any payments or amounts payable to subcontractors or suppliers,
except for completed work (including partial deliveries) to which the Contractor has acquired title and except
for amounts paid or payable under cost-reimbursement or time and material subcontracts for work to which the
Contractor has acquired title, or (iii) costs ordinarily capitalized and subject to depreciation or amortization
except for the property depreciated or amortized portion of such costs.
- (3) The amount of unliquidated progress payments shall not exceed the lesser of (i) ......B* percent of the
costs mentioned in (a) (1) (i), above, plus any unliquidated progress payments mentioned in item (a) (1). (ii) above,
both of which are applicable only to the supplies and services not yet delivered and invoiced to and accepted by
the Government, or (ii) ........C* percent of the total contract price of supplies and services not yet delivered and
invoiced to and accepted by the Government, less unliquidated advance payments.
(4) The aggregate amount of progress payments made shall not exceed ......D* percent of the total contract
(5) If at any time a progress payment or the unliquidated progress payments exceed the amount permitted
by this paragraph (a), the Contractor shall pay the amount of such excess to the Government upon demand.
(b) Liquidation. Except as provided in the clause entitled "Termination For Convenience of the Government,"
all progress payments shall be liquidated by deducting from any payment under this contract, other than advance
or progress, the amount of unliquidated progress payments, or ......E* percent of the gross amount invoiced, whichever
is less. Repayment to the Government required by a retroactive price reduction will be made after recalculating
liquidations and payments on past invoices at the reduced prices and adjusting the unliquidated progress payments
accordingly.
(c) Reduction or Suspension. The Contracting Officer may reduce or suspend progress payments, or liquidate
them at a rate higher than the percentage stated in (b) above, or both, whenever he finds upon substantial evi-
dence that the Contractor (i) has failed to comply with any material requirement of this contract, (ii) has so failed
to make progress, or is in. such unsatisfactory financial condition, as to endanger performance of this contract, (iii)
has allocated inventory to this contract substantially exceeding reasonable requirements, (iv) is delinquent in pay-
ment of the costs of performance of this contract in the ordinary course of business, (v) has so failed to make
progress that the unliquidated progress payments exceed the fair value of the work accomplished on the undelivered
portion of this contract, or (vi) is realizing less profit than the estimated profit used for establishing a liquidation
percentage in paragraph (b), if that liquidation percentage is less than the percentage stated in paragraph (a) (1).
. (d) Title. Immediately, upon the date of this contract, title to all parts; materials; inventories; work in
process; special tooling as defined in the clause of this contract e n t i t l e d "Special Tooling"; nondurable (i.e.,
noncapital) tools, jigs, dies, fixtures, molds, patterns, taps, gauges, test equipment, and other similar manufactur-
ing aids not included within the definition of special tooling in such "Special Tooling" clause; and drawings and
technical data (to the extent delivery thereof to the Government is. required by other provisions of this contract) ;
theretofore acquired or produced by the Contractor and allocated or properly chargeable to this contract under
sound and generally accepted accounting principles and practices shall forthwith vest in the Government; and title
to all like property thereafter acquired or produced by the Contractor and allocated or properly chargeable to this
contract as aforesaid shall forthwith vest in the Government upon said acquisition, production or allocation. Not-
withstanding that title to property is in the Government through the operation of this clause, the handling and
disposition of such property shall be determined by the applicable provisions of this contract such as: the Default
clause and paragraph (h) of this clause; Termination for Convenience of the Government clause; and the Special
Tooling clause, Current production scrap may be sold by the Contractor without approval of t he Contracting
Officer and the proceeds shall be credited against the costs of contract performance. With the consent of the
Contracting Officer and on terms approved by him, the Contractor may acquire or dispose of property to which
title is vested in the Government pursuant to this clause, and in that event, the costs allocable to the property
so transferred from this contract shall be eliminated from the costs of contract performance and the Contractor
shall repay to the Government (by cash or credit memorandum) an amount equal to the unliquidated progress
payments allocable to the property so transferred. Upon completion of performance of all the obligations of the
Contractor under this contract, including liquidation of all progress payments hereunder, title to all property (or
the proceeds thereof) which had not been delivered to, and accepted by the Government under this contract or
which had not been incorporated in supplies delivered to and accepted by the Government under this contract and
to which title has vested in the Government under this clause shall vest in the Contractor. The provisions of this
contract referring to or defining liability for Government-furnished property shall not apply to property to which
the Government shall have acquired title solely by virtue of the provisions of this clause.
(e) Risk of Loss. Except to the extent that the Government shall have otherwise expressly assumed the risk
of loss of property, title to which vests in the Government pursuant to this clause, in the event of the loss, theft
or destruction of or damage to any such property before its delivery to and acceptance by the Government, the
Contractor shall bear the risk of loss and shall repay the Government an amount equal to the unliquidated progress
payments based on costs allocable to such lost, stolen, destroyed or damaged property.
MCP 71-512 (Cont'd)
Jan 61
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(f) Control of Costs and Property. The Contractor shall maintain an accounting system and controls adequate
for the proper administration of this clause.
(g) Reports-Access to Records. Insofar as pertinent to the administration of this clause, the Contractor will
(i) furnish promptly such relevant reports, certificates, financial statements, and other information as may be
reasonably requested by the Contracting Officer, and (ii) give the Government reasonable opportunity to examine
and verify his books, records and accounts.
(h) Special Provisions Regarding Default. If this contract is terminated pursuant to t he clause entitled
"Default," (i) the Contractor shall, upon demand, pay to the Government the amount of unliquidated progress
payments and (ii) with respect to all property as to which the Government elects not to require delivery under
the clause entitled "Default," title shall vest in the Contractor upon full liquidation of progress payments, and
the Government shall be liable for no payment except as provided. by the "Default" clause.
(i) Reservations of Rights. 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. No pay-
ment, or vesting of title pursuant to this clause, shall excuse the Contractor from performance of his obligations
under this contract, nor constitute a waiver of any of the rights and remedies of the parties under this contract.
No delay or failure of the Government in exercising any right, power or privilege under this clause shall affect
any such right, power or privilege, nor shall any single or partial exercise thereof preclude or impair any further
exercise thereof or the exercise of any other right, power or privilege of the Government.
(]`) Progress Payments to Subcontractors. (1) The amount mentioned in item (a) (1) (ii) above shall be the sum
of (i) all the progress payments made by the Contractor to his subcontractors a n d remaining unliquidated, and
(ii) unpaid billings for progress payments to subcontractors which have been approved for current payment in the
ordinary course of business, when under subcontracts which conform to (2) below.
(2) Subcontracts on which progress payments to subcontractors may be included in the base for progress
payments "lead to paragraph (a) of this clause are limited to those subcontracts in which there is expected to
be a long lead time," approximating six months or more between the beginning of work and the first delivery, con-
taining subcontract progress payment provisions which (i) are substantially similar to an d as favorable to the
Government as this "Progress Payments" clause, no more favorable to the subcontractor than this clause is to the
Contractor and on a basis of not more than 70 percent of total costs or 85 percent of direct labor and material
costs (except that these percentages may be 75 percent of total costs or 90 percent of direct labor and material
costs for those subcontractors which are small business concerns), and (ii) make all rights of the subcontractor
with respect to all property to which the Government has title under the subcontract subordinate to the rights of
the Government to require delivery of such property to it in the event of default by the Contractor under this
contract or in the event of the bankruptcy or insolvency of the subcontractor.
(3) The Government agrees that any proceeds received by it from property to which it has acquired title
by virtue of such provisions in any subcontract shall be applied to reduce the amount of unliquidated progress pay-
ments made by the Government to the Contractor under this contract. In the event the Contractor fully liquidates
such progress payments made by the Government to him hereunder and there are progress payments to any sub-
contractors which are unliquidated, the Contractor shall be subrogated to all the Government's rights by virtue of
such provisions in the subcontract or subcontracts involved as if all such rights had been thereupon assigned and
transferred to the Contractor.
(4) The billings described in (j) (1) (ii) above shall be paid promptly by the Contractor in the ordinary course
of business, not later than a reasonable time after payment of equivalent amounts by the Government to the
Contractor.
(5) To facilitate small business participation in subcontracting under this contract, the Contractor agrees
to provide progress payments to those subcontractors which are small business concerns, in conformity with t he
standards for customary progress payments stated in paragraph 503 of Appendix E of the Armed Services Procure-
ment Regulation, as in effect on the date of this contract. The Contractor further agrees that the need for such
progress payments will not be considered as a handicap or adverse factor in the award of subcontracts.
* Percentages for A, B, C, D and E above are specified in the Schedule hereof.
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CLAUSE - m SAFETY AND ACCIDENT PREVENTION
In performing any work under this contract on premises which are under the
direct control of the Government, the Contractor shall (i) conform to all safety
rules and requirements prescribed in Air Force Manual 32-3, as in effect on the
,date-of this contract and (ii) take such additional precautions as the Contracting
Officer may reasonably require for safety and accident prevention purposes, The.
Contractor agrees to take all reasonable steps .and precautions to prevent accidents
and. preserve the life and health of Contractor and Government personnel performing
or ' in' any way coming in contact with the performance of t hip contract on such pre
-
iJ aea. Any. violation of such rules-and requirements, unless promptly corrected, as
directed. 'by the.Contracting Officer, shall be grounds for termination.of this con-
tract-in.accordance with the default provisions hereof.
AC..?I' T-404 T
dd.. 2,7; June 59
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50
PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA - PRICE ADJUSTMENTS (Mar. 1963)
(a) This clause shall become operative only with respect to any change or other modification made pursuant
to one or more provisions of this contract which involves a price adjustment in excess of $100,000, except where
the price is based on adequate price competition, established catalog or market prices of commercial items sold in
substantial quantities to the general public, or prices set by law or regulation. The right to price reduction under
this clause shall be limited to such price adjustments.
(b) If the Contracting Officer determines that any price, including profit, or fee, negotiated in connection
with any price adjustment under this contract was increased by any significant sums because the Contractor or
any subcontractor in connection with a subcontract covered by paragraph (d) below, furnished incomplete or in-
accurate cost or pricing data or data not current as of the date of execution of the Contractor's Certificate of
Current Cost or Pricing Data, then such price shall be reduced accordingly and the contract shall be modified in
writing to reflect such adjustment.
(c) Failure to agree on a reduction shall be a dispute concerning a question of fact within the meaning of
the "Disputes" clause of this contract.
(d) The Contractor agrees to insert the substance of paragraphs (a), (b), and (d) of this clause in each
subcontract hereunder that exceeds $100,000.
AFPI 71-41, Mar. 63
ASPR 7-104.29(b)
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AUDIT-PRICE ADJUSTMENTS (SEP. 1964) AF-WP-O-NOV 64 ISM
(a) This clause shall become operative only with respect to any change or other modification made pursuant
to one or more provisions of this contract which involves a price adjustment in excess of $100,000, unless the price
adjustment is based on adequate -price competition, established catalog or market prices of commercial items sold
in substantial quantities to the general public, or prices set by law or regulation.
(b) For purposes of verifying that cost or pricing. data submitted in conjunction with a contract change or
other modification involving an amount in excess of $100,000 are accurate, complete, and current, the Contracting
Officer, the Comptroller General of the United States, or any authorized representatives, shall-until the expira-
tion of three years from the date of final payment under this contract-have the right to examine those books,
records, documents and other supporting data which will permit adequate evaluation of the cost or pricing data
submitted, along with the computations and projections used therein, which were available to the Contractor as of
the date of execution of the Contractor's Certificate of Current Cost or Pricing Data.
(c) The Contractor agrees to insert the substance of this clause in all subcontracts hereunder in excess of
$100,000 so as to apply until three years after final payment under the subcontract and only when the change or
other modification to the subcontract results from a change or other modification to the Government prime contract.
AFPI 71-39, Sep 64
(ASPR 7-104.41,(b) (Formerly Advertised Contracts Only) )
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AC_wn_n_unv ILA AnM
SUBCONTRACTOR COST AND PRICING DATA (Sep. 1964)
circumstances: (i) prior to award of any cost-reimbursement type, incentive, or price redeterminable subcontract;
(ii) prior to the award. of any subcontract the price of which is expected to exceed $100,000; (iii) prior to the pricing
of any subcontract change or other modification for which the price adjustment is expected to exceed $100,000;
except in the case of (ii) or (iii) where the price is based on adequate price competition, established catalog
or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or
regulation.
(b) The Contractor shall require subcontractors to certify, in substantially the same form as that used in the
certificate by the Prime Contractor to the Government, that to the best of their knowledge and belief, the cost and
pricing data submitted under (a) above is accurate, complete, and current as of the date of execution, which date
shall be as close as possible to the date of agreement on the negotiated price of the subcontract.
(c) The Contractor shall insert the substance of this clause including this paragraph (c), in each of his cost
reimbursement type, price redeterminable, or incentive subcontracts hereunder, and in any other subcontract here-
under which exceeds $100,000 except where the price thereof is based on adequate price competition,. established
catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by
law or regulation. In each such excepted subcontract hereunder in excess of $100,000, the Contractor shall insert
the substance of the following clause:
SUBCONTRACTOR COST AND PRICING DATA-PRICE ADJUSTMENTS
(a) Paragraphs (b) and (c) of this clause shall become operative only with respect to any change or other
modification made pursuant to one or more provisions of this contract which involves a. price adjustment in excess
of $100,000. The requirements of this clause shall be limited to such price adjustments.
(b) The Contractor shall require subcontractors -hereunder to submit cost or pricing data under the fol-
lowing. circumstances: (i) prior to award of any cost-reimbursement type, incentive, or price redeterminable
subcontract; (ii) prior to the award of any subcontract, the price of which is expected to exceed $100,000;
(iii) prior to the pricing of any subcontract change or other modification for which the price adjustment is
expected to exceed $100,000; except, in the case of (ii) or (iii), where the price is based on adequate price
competition, established catalog or market prices of commercial items sold in substantial quantities to the
general public, or prices set by law or regulation.
(c) The Contractor shall require subcontractors to certify, in substantially the same form as that used in
the certificate by the Prime Contractor to the Government, that to the best of their knowledge and belief the
cost and pricing data submitted under (b) above is accurate, complete, and current as of the date of the exe-
cution, which date shall be as close as possible to the date of agreement on the negotiated price of the con-
tract modification.
(d) The Contractor shall insert the substance of this clause including this paragraph (d) in each subcon-
tract hereunder which exceeds $100,000.
APPI 71-45, Sep 64
ASPR 7-104.42(a)
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