AGREEMENT OF EMPLOYMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81B00878R001200020319-9
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 21
• Document Creation Date: December 9, 2016
• Document Release Date: August 30, 1999
• Sequence Number: 319
• Content Type: CONT

Contract No. OS-100
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HYCON MFG. COMPANY
2961 E. Colorado Street
Pasadena 8, California
AGREEMENT OF EMPLOYMENT
AGREEMENT made this day of 195 by and
between Hycon Mfg. Company, a Delaware corporation with its principal
place of business in Pasadena, California, (hereinafter sometimes referred
to as the Company), and (hereinafter
sometimes referred to as Employee), an individual residing at
Company does or may do work in foreign countries throughout the world.
In contracting with employees for such work, it is essential that the Employee
understand as fully as possible the conditions prevailing in the particular
foreign country to which he may be assigned and that the conditons under
which he is expected and agrees to there do work for the Company may be
rigorous in any and all respects.
Company is required by its clients to maintain in strictest confidence the
nature of the work it does and the results thereof. Any violation of that
confidence by the Company or any of its employees may result in serious
consequences to Company.
It is extremely important to the Company that an employee fulfill his duties
for the full. term of contracted service, because the replacement of an em-
ployee who does not do so works a financial and operational hardship upon
the Company. The purpose of this Agreement is to set forth the respective
rights and obligations of the parties to it.
There is attached hereto as Exhibit "A" an executed schedule which is by
execution of the agreement incorporated herein and made a part hereof.
SECTION 1. CONTINENTAL UNITED STATES
For the purpose of this Agreement the terms "Continental limits of the United
States" or. "Continental United States" shall be deemed to, and shall include
only the forty-eight states of the United States and the District of Columbia.
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SECTION 2.. EMPLOYMENT AND DUTIES
The Company hereby employs Employee to render such services and per-
form such duties as the Company may direct or designate; and Employee
accepts such employment with knowledge of the terms and conditions herein
set forth and agrees throughout the term of this Agreement of Employment
to give his exclusive time and attention to the diligent and faithful performance
of such services and duties, and to abide by and be subject to all rules, regu-
lations and requirements of the Company, its officers, agents and supervisory
employees, as well as all civil laws and regulations in effect from time to
time at the place or places of duty where Employee may be assigned during
the continuance of, and in connection with, Employee's employment hereunder.
SECTION 3; CANCELLATION OF PRIOR
AGREEMENTS
If Employee is presently employed by the Company under any agreement of
employment, written or oral, the parties hereto agree that such agreement
of employment will be cancelled and terminated concurrently with the execution
of this Agreement of Employment which shall be substituted in lieu of the
agreement so cancelled and shall set forth the terms and conditions of
Employee's employment by the Company, provided, however, that if Employee
at the time of execution of this agreement shall enjoy seniority with the..
Company, the execution of this agreement shall not deprive Employee of such
seniority or of any rights that may accrue to him by reason thereof, including
without limitation the right to participate in any retirement plan of the Company,
in accordance with the requirements of said plan as they may be amended from
time to time.
SECTION 4, TERM OF EMPLOYMENT
The term of Employee's employment hereunder shall commence on the date
when employee reports for duty hereunder at the time and place designated
by the Company and as stated in Exhibit "A" of this agreement.
SECTION 5. AMOUNT, TIME, AND MODE OF
PAYMENT OF SALARY
A. Beginning with the date the Employee's Term of Employment commences,
as provided in Exhibit "A" entitled "TERM OF EMPLOYMENT", and until
said Term of Employment shall expire under the terms of this Agreement or
be terminated in accordance with Section 15 of this Agreement, Employee shall
be paid for such. portions of said Term of Employment as are expressly spelled
out in Exhibit "A" of this Agreement.
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SECTION 5. AMOUNT, TIME, AND MODE OF
PAYMENT OF SALARY, Cont'd.
B. Employee shall designate in writing the portion of his salary which he
desires paid to him at his place of duty while employed outside the Contin-
ental United States. The balance, if any, of Employee's salary shall be
deposited (less any lawful deductions) for the account and risk of Employee
in a bank or trust company in the United States to be mutually agreed upon
by Employer and Employee, or, in the absence of such designation, in a
member bank of the Federal Reserve System selected by the Company. The
receipt therefor of such bank or trust company shall constitute conclusive
evidence of payment to Employee.
C. Salary payments. shall be monthly; subject, however, to the payment of
a portion thereof only on completion of all obligations under this Agreement,
as specified in Section 7, A. Failure on the part of the Company to respond
to the precise time and mode of payment of salary prescribed herein shall
not be considered as a breach or default on the part of the Company in those
cases in which such failure is the result of causes beyond the Company's
control,
D. Employee will not seek reimbursement from the Company for any foreign
exchange loss that he may incur as a result of converting into foreign or
American money any sums paid or payable to him under the terms. of this
Agreement of Employment, and it is understood that the Company shall be
under no obligation to exchange foreign exchange or currency of any country
into American currency or exchange.
E. There shall be no restriction upon the number of Employee's work hours
per day or the number of Employee's work days per week. The salary and
compensation herein provided to be paid Employee is substantially in excess
of that which Employee would receive for similar services rendered in the
United States at the date hereof and includes compensation for any extra or
overtime services to be performed, and Employee shall not be paid or com-
pensated otherwise for services which ordinarily would be extra or overtime
services.
SECTION 6. SUBSISTENCE ALLOWANCE
Subsistence will be furnished to the Employee when away from the factory,
(except when on Leave Status) therefore payment of a subsistence allowance
will be unnecessary,
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SECTION 7. SALARY AND OVERSEAS DIFFERENTIAL
UPON COMPLETION OF CONTRACT
A, Of the monthly salary specified in Exhibit "A", the sum of one hundred
dollars ($100. 00) per month shall be payable only upon satisfactory completion
by the employee of all of his obligations under this Agreement, or upon termina-
tion of the employment without cause under Paragraph "B" of Section 15 hereof.
In the event employee does not complete his obligations under this Agreement,
including termination of his employment for cause under Paragraph "A" of
Section 15 hereof, the employee's salary as set forth in Exhibit "A" shall be
reduced by the sum of one hundred dollars ($100. 00) per month.
B. The Company will, upon satisfactory completion by the employee of all of
his obligations under this a,n1ent, pay to the employee a contract overseas
differential in the sum of-0 'N in addition to the amount of contingent
salary referred to in Paragri "A" of this Section 7, above. If the employment
of the employee is terminated ithout cause under Paragraph "B" of Section 15
hereof, a portion of the total overseas differential amount shall be paid equal to
the proportionate completion of the total term of employment specified in this
agreement.
SECTION 8. VACATION,, SICK LEAVE AND OTHER
BENEFITS
A. An employee shall be given three weeks' _(21 days)_of vacation with pay al
,
approximately the mid point of the term of employment set forth in Exhibit "All hereof. Such vacation must be spent in the United States if so specified by the
Company. Immediately preceding or following such vacation the employee shall
spend a week at the plant or plants of the Company in the Pasadena area in
accordance 'with instructions from the Company. The vacation rights specified
in.this paragraph shall not impair the accrual of vacation rights under the standard
personnel practices of the Company provided that any vacation rights accrued in
excess of those specified herein shall be deferred until completion or term ion
of emplment under this agreement If this Agreement of Employment shall be
terminated for any reason other than in accordance with the provisions of Para-
graph "A" and Paragraph "C" of Section 15, hereof, the Company will pay to
Employee pro-rata compensation for said vacation time accrued and unused by the
Employee to the date of such termination. Vacation accrued and unused by the
Employee to the date of such termination will be computed as._6. 6 hours for each
full month o s r Tice, In the event Employee should, at the request of the
Company continue service for a period of time beyond the Term of Employment
provided under Exhibit "A" hereof, Employee shall accrue a right to vacation
pay at the same rate provided above, on a pro-rata basis, for the period of time-
of such additional service. Such paid vacation shall be at the base salary rate_
set forth in Exhibit "A" hereof, -
B. Sick Leave: Employee shall be entitled to sick leave benefits in accordance
with the plan for sick leave benefits as presently in effect for salaried employees
of the Company at its Pasadena, California, base. During any period of paid
sick leave an Employee shall be entitled to his regular pay and if during such
period of paid sick leave employee is outside the Continental limits of the United
States he sell lTo bet bb 16 : bt Section 6 hereof,
Approve or a ease
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SECTION 8. VACATION, SICK LEAVE AND
OTHER BENEFITS, Continued
C. Local Leave: Employees will be subject to duty 7-days per week, 24 hours
per day, however employee may receive Local Leave from time to time at the
location of employment outside the Continental limits of the United States.
Such local leave will be granted subject to Operational requirements at the
sole discretion of the Team Supervisor, or other person designated by Hycon,
on the basis of 8-1/2 days leave per month of employment. Unused Local Leave
shall accrue to a maximum of 30 days. Leave as granted shall be applied first
against Local Leave allowance for the current month and thereafter to reduce
the amount of accrued Local Leave. Employees will be paid for the local leave
allowance remaining on completion of employment contract period at the base
salary rate.
D. Retirement Plan: The provisions of the Hycon Profit Sharing Retirement
Plan and Trust shall be made available to Employee on the same basis and
subject to the same conditions and requirements as they are made available to
salaried employees of the Company, at its Pasadena, California, base.
E. The provisions of the Hycon Group Insurance Plan as presently in effect
for salaried employees of the Company at its Pasadena, California, base shall
be made available to Employees on the same basis as they are made available to
said employees of Hycon Mfg. Company.
F. The Company may, in it sole discretion, grant emergency leave to -the
Employee. In the event such leave is granted and the Employee returns to his
station within the time limit specified, in the written consent by the Company,
(which period shall in no event exceed forty-five days from the time the leave
commences) the Employee's right to receive payment of the overseas differential
and contingent salary specified in Section 7 hereof, shall not be impaired.
Failure to return to work within the period specified shall constitute a failure
to satisfactorily complete the obligations under this Agreement. Transportation
in connection with emergency leave shall be solely at the expense of the Employee.
SECTION 9. TRANSPORTATION AND TRAVEL
EXPENSE
A. In reporting for and rendering services during his employment hereunder,
and in traveling to and from his place or places of duty hereunder., Employee
consents to travel by land, sea and air, according to routes and by any mode
of conveyance which the Company may specify. When so directed by the
Company, Employee agrees to return to the United States without delay by
such routes and means as the Company may designate.
B. Except as herein otherwise provided, and subject to the rules and regulations
prescribed in respect thereof by the Company, the Company shall furnish or
cause to be furnished to Employee transportation necessary to the employment
which is the subject of this Agreement, including transportation for vacations
required to be spent in the United States under Section 8, Paragraph "A", hereof.
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SECTION 10. PASSPORTS AND PREPARATION
FOR TRAVEL
A. This Agreement is predicated upon satisfactory proof furnished by
Employee that he is a citizen of the United States of America and upon his
ability to secure necessary passports, visas and such other permits as may
be necessary, to authorize his departure and absence from the United States,
and entrance into and stay in such foreign countries as may be necessary,
to pass such physical examination, and to submit to such disease immuniza-
tion, fip.ger printing and to comply with other regulations as may be required
by proper authority or by the Company.
B. If Employee is so qualified, the Company shall assist Employee in
obtaining the necessary passports, travel permits and visas.
SECTION 11. SECURITY AND OTHER
REGULATIONS
A. The employment which is the subject of this Agreement will involve
access to information affecting the national defense of the United States
within the meaning of the Espionage Laws, Title 18, United States Code,
Sections 793 and 794. Transmission or revelation of such information in
any manner to unauthorized persons may be a criminal offense and may lead
to prosecution and conviction. It will also be a cause for immediate termina-
tion of employment within the meaning of Paragraph "A" of Section 15. The
Employee agrees to abide by all security rules and regulations applicable
to the employment.
B. Employee agrees to comply with all applicable customs, laws and
regulations of the countries from, to or through which Employee or any of
his property may be transported.
SECTION 12. MEDICAL SERVICES
A. Prior to each departure from the United States, Employee shall submit
to such physical examination, vaccination and inoculation as the Company
shall direct, at no expense to Employee. Employee shall further from time to
time, while engaged in overseas service, and shall immediately prior to
Employee's termination as provided herein under this Agreement of Employment,
submit, without expense to Employee, to such further examination, vaccination,
inoculation and other medical, dental, surgical, nursing and hospital treatment,
preventative or curative, as the Company's medical staff (or medical examiners
appointed by the Company) at Employee's place of duty or elsewhere, may from
time to time specify as necessary or desirable.
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SECTION 13. COMPENSATION FOR DEATH
OR DISABILITY
A. Employees shall be covered by Workman's Compensation insurance.
B. If the Company pays salary as provided for under Section 8 (B) hereof
during any period in which Employee or his beneficiaries are entitled to
benefits under the first paragraph of this Section 13, any benefits so payable
for such period, shall be a part of, and not in addition to, the salary thus paid.
C. Employer will take out accidental death and dismemberment insurance
providing benefits up to $25, 000 for accidents involving employees which
occur as a result of travel, or any other activity incident to the discharge
of the responsibility of the employee under this agreement, including flying
as observers in any aircraft, but excluding accidents which are directly or
indirectly caused or contributed to by war or invasion. Coverage will extend
anywhere in the world, except in countries specifically excluded.from the
policy provisions by the insurance carrier,
D. It is understood and agreed that if any Insurer providing insurance under
the terms of this Section 13, fails to pay claims arising thereunder for any
reason whatsoever, the Company will not be liable for the payment of such
claims,
E. In the event of the death of the Employee while outside the Continental
limits of the United States during the term of this Employment Agreement,
the Employee authorizes the Company to make appropriate disposition, as
shall be deemed best by it under the prevailing circumstances, of the body
and personal effects of the Employee.
F. Employee is required to furnish the Company with a copy of his last will
and testament or provide the Company with an execution accomplishing the
same purpose .
Dependents of the Employee will not be permitted to join the Employee. at his
foreign duty station.
A. The Company may by notice in writing or by telegram or cablegram
terminate Employee's employment and his right to receive further salary and
other benefits hereunder for any of the following causes:
1. If Employee, in the opinion of the Company, is not trust-
worthy, careful., or is otherwise disqualified to render
the services required hereunder, or does not abide by all
rules, regulations and requirements of the Company, its
-7-
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SECTION 15. TERMINATION, Continued
officers, agents and supervisory employees, or does not
abide by the rules, regulations and requirements of the
customer of the Company to which services are being
rendered.
2. If Employees, in the opinion of the medical examiner or
examiners designated or approved by the Company, is
found to be afflicted with any venereal disease.
3. If Employee violates any of the provisions of this Agreement
or fails to perform faithfully and diligently the services and
duties required of him hereunder,
4. If Employee in any respect fails to meet the standards or
requirements of the Company for overseas service,
5. If the performance or the personal conduct of the. Employee
is unsatisfactory to the Company.
Upon termination by the Company under this Paragraph (A), the Company
will make available to Employee return transportation to Pasadena, and/or
the place of Employee's recruitment or last permanent residence in the
Continental United States, but will not be required to pay Employee any
salary or other benefits for any period from and after such termination.
B. The Company may further by notice in writing or by telegram or cable-
gram terminate Employee's employment under this Agreement, without
cause under the following circumstances-
1. Upon or after completion of Employee's performance underthis
Agreement as determined by the Company,
2. If, in the opinion of the Company, the performance provided
for in this Agreement not having been completed or terminated,
the services of Employee are no longer required hereunder.
3. If the Employee shall be inducted into or recalled to active
duty (as distinguished from voluntarily entering) in the
Armed Forces of the United States,
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SECTION 15. TERMINATION Continued
Upon termination by the Company under this Paragraph "B", the Company
shall make available to Employee return transporation and his salary
until he shall be returned to the place of his recruitment or last permanent
residence in the Continental United States.
C. In the event that Employee terminates his employment hereunder volun-
tarily, he shall not from and .after such termination be entitled to any salary
or other benefits, including without limitation overseas differential payments
or per diem allowances hereunder.
SECTION 16. CONFIDENTIAL INFORMATION
Employee shall treat as confidential any information or knowledge received
or acquired by him relating to his employment or to his services hereunder,
or to the products or processes of manufacture of the Company not disclosed
by the Company to the general public, and shall not, without the prior written
consent of the Company, publish or cause to be published, or disclose to any
person, firm or corporation, in any manner or by any means, either by
statements, photographs, pictures, books, articles, reports, charts, graphs,
maps, or in any other manner or by any other means, written, pictorial,
oral or otherwise, any information directly or indirectly relating to such
employment, services, products acid/or processes of manufacture. The
provisions of this Section may be enforced by injunctive relief or by any
other legal means.
SECTION 17. SEPARABILITY OF CONTRACT
TERMS
In the event that any one or more of the provisions of this Agreement shall,
for any reason whatsoever, be held by competent authority to be invalid
or unenforceable, such particular provision or provisions shall be deemed
to be separable from the remainder of this Agreement; and all of the remain-
ing provisions, terms and conditions of this Agreement shall continue in full
force and effect and be binding upon the parties hereto, in the same manner
as if the severed provision or provisions had never been included herein.
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This Agreement of Employment constitutes the entire Agreement between
the parties hereto relating to the subject matter hereof and the provisions
thereof shall be construed and interpreted solely in accordance with the
laws of the State of California. It is specifically agreed that the Company
may assign its rights and delegate its duties under this Agreement of
Employment or subsequent Agreements requiring the services of the Em-
ployee.to any Hycon Mfg. Company organization, affiliate or subsidiary.
It is further agreed that no assignment of rights under this Agreement of
Employment or subsequent agreements requiring the services of the
Employee shall be made by Employee without the written consent of the
Company. Unless this Agreement of Employment is executed on behalf
of the Company by an officer or authorized representative thereof, it shall
not become binding.
SECTION 19. FINAL SETTLEMENT
On the termination of this agreement and payment to the Employee of all
amounts due to him hereunder, the Employee shall execute and deliver to
the Company upon a form prepared by it a receipt for said sums and a re-
lease of all claims, except claim for compensation insurance or such claims
as may have been submitted pursuant to the provisions of Section 13 hereof
and which may remain undisposed. It is understood that in preparing the
final record of employment on termination, the Employee shall submit to
such physical examinations, both at the job site and after his return to the
United States, as the Company may deem necessary for the preparation of
such record herein required.
SECTION 20. CERTIFICATION BY EMPLOYEE
The Employee certifies to the Company that he has read the foregoing Agree-
ment and that he fully understands its terms and conditions, and further
certifies that the foregoing terms and conditions constitute his entire agree-
ment with the Employer, and that no promises or understandings have been
made other than those stated above; and it is specifically agreed by the
parties hereto that this Agreement shall be subject to modification only by
written instrument signed by both the Company and the Employee.
No promises or representations of any kind have been made to the Employee
regarding exemption from payment of the United States or any other income
tax. United States income tax will be withheld as well as any other appli-
cable tax. (United States and California)
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SECTION 20. CERTIFICATION BY EMPLOYEE
Continued
Employee certifies that he is a citizen of United States of.America; that
he does not advocate and is not a member of any political party or organi-
zation which advocates the overthrow of our constitutional form of govern-
ment in the United States.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in triplicate in the City of
State of by its officer or other person there-
unto duly authorized and its corporate seal to be affixed hereto, and Employee
has executed the same, in triplicate, the day and year first above written.
HYCON MFG, COMPANY
By
Employee
Witness to Signature of Employee:
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EXHIBIT "A"
Attached to and Part of
.AGREEMENT OF EMPLOYMENT
Item
No.
1. Area of Employment
2. Starting Point
3. Capacity (Type of Work)
4. Term of Continuous Service month commencing
date of departure for foreign assignment 195
5. Base Salary (US Dollars per month)
6. Regular Vacation
7. Special Agreements
Employee
Approved at on
(Place) (Date)
by
(Signature) (Title)
(Company)
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TERMINATION OF AGREEMENT
This Agreement is made this _ day of '19
by and between Hycon Mfg. Company, a Delaware corporation with its
principal place of business in Pasadena, California, (hereinafter. some-
times referred to as the "Company"), and
(hereinafter sometimes referred to as "Employee"), an individual re-
siding at
Company and Employee are parties to an "Agreement of
Employment" dated the day of , 19
The services of Employee are no longer. required under such Agreement
and, pursuant to the provisions of said Agreement, the Company desires
to terminate Employee's employment thereunder. The Company and the
Employee desire, however,, that the cancellation of such-Agreement shall
not affect Employee's general employment benefits with the Company so
long as Employee shall remain in the employ of the Company.
NOW, THEREFORE , in consideration of the terms and
provisions hereof, the parties hereto agree as follows-
I. The agreement of employment between.. the parties. hereto
dated the day of ,19 is hereby terminated.
Z. Termination of said agreement of employment shall not
prejudice Employee's enjoyment of any seniority, so long as. he continues
as an employee of. the Company, or any rights, that may have. accrued to
him by virtue of his employment by the Company.
IN WITNESS. WHEREOF the Company and the Employees have
caused this Agreement to be executed in triplicate the. day and year first
above written.
HYCON MFG. COMPANY
Witness to Signature of Employee
Employee
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GENERAL PROVISIONS
(TECHNICAL SERVICES CONTRACTS)
1. DEFINITIONS.--As used throughout this contract, the following terms shall have the meanings set forth
below:
(a) The term "Secretary" means the Secretary, the Under Secretary, or any Assistant Secretary of the
Department, and the head or any assistant head of the executive agency; and the term "his duly authorized repre-
sentative" means any person or persons or board (other than the Contracting Officer) authorized to act for 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. The Commander of the Air Force activity to which any contractor personnel may be
assigned hereunder is hereby designated an authorized representative of the Contracting Officer with regard to con-
tractor personnel so assigned.
(c) Except as otherwise provided in this contract, the term "subcontracts" includes purchase orders under
this contract.
(d) The terms "contractor employee" and "contractor personnel" as used throughout this contract shall be
deemed to refer to all contract technical services personnel, including all of the specific types of technicians referred
to in the Schedule, and shall be defined as persons, such as advisers, instructors, or technical specialists, obtained
through the contractor to perform services pertaining to the operation and maintenance engineering of Air Force
equipment. The terms include both:
(i) "Technical representatives" who are employees of a manufacturer furnishing end items of equipment
to the Air Force, and furnishing services only in connection with such end items; and
(ii) "Contract technicians" who are employees of a commercial concern furnishing services to the Air
Force at least a part of which are in connection with end items not manufactured by the Contractor.
(e) The term "man month" as used herein shall be deemed to be the time devoted to the performance of
services hereunder by one contractor employee during a period of one calendar month.
(f) The term "continental limits of the United States" as used herein means any place within the territorial
limits of the 48 states and the District of Columbia.
(g) The term "domestic services" as used herein means services within the continental limits of the United
States.
(h) The term "overseas" as used herein means any place outside the continental limits of the United States.
2. CHANGES.-The Contracting Officer may, at any time, by a written order, and without notice to the sureties,
if any, make changes in or additions to drawings and specifications, issue additional instructions, require modified
or additional work or services within the general scope of the contract, change the place of delivery or method of
shipment, or the amount of Government furnished property. If any such change causes an increase or decrease in
the cost of, or the time required for, performance of this contract, an equitable adjustment shall be made in the
contract price, or time of performance, or both; 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 Contractor of the notification of change: provided, however, that the Contracting Officer, if he decides
that the facts justify such action, may receive and act upon any such claim asserted at any time prior to final
payment under this contract. Failure to agree to any adjustment shall be a dispute concerning a question of fact
within the meaning of the clause of this contract entitled "Disputes." However, nothing in this clause shall excuse
the Contractor from proceeding with the contract as changed.
3. INSPECTION.-All services, material and workmanship, shall be subject to inspection and test by repre-
sentatives of the Government. For this purpose, the Contractor shall allow at all reasonable times inspectors and
other Government personnel free access to the plant and operations and shall furnish such facilities, supplies, and
services as may be required for this work.
4. PAYMENTS
(a) The Contractor shall be paid in monthly installments upon submission of properly certified invoices there-
for for services rendered and accepted less deductions, if any, as herein provided.
(b) Any payments in reimbursement of the cost of any transportation furnished by the Contractor for which
it is entitled to be reimbursed under paragraph (a) of the Clause hereof entitled "Services Furnished by the Gov-
ernment" shall be made upon the submission of properly certified invoices and other evidence satisfactory to the
Contracting Officer covering the expenditures for which reimbursement is so sought.
(c) If this contract provides for overseas services, the domestic rates, if any, specified in the Schedule are
applicable to that portion of the time necessary for travel between the Contractor's plant and the overseas site
which is spent within the continental limits of the United States.
5. ASSIGNMENT OF CLAIMS.-(a) Pursuant to the provisions of the Assignment of Claims Act of 1940,
as amended (31 U.S. Code 203, 41 U.S. Code 15,) if this contract provides for payments aggregating $1,000 or more
claims for moneys due or to become due the Contractor from the Government under this contract may be assigned
to a bank, trust company, or other financing institution, including any Federal lending agency, and may thereafter
be further assigned and reassigned to any such institution. Any such 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 ay be made to one party as agent or trustee for two or more parties
participating in such financing Notwith t~p~l}~,g ,,any p ,~~p i ~q,Q nt c t to any assignee of
any mone pmt/EBbF6Ol~oReIB S@n~l Hil~4dchitrh~'trl~l#Itf ItStB~~~~t7a ~ ~- ct, as amended, be
subject to reduction or set-off.
 ?ap~q deg ~ q ra '_tdt," iQ~~prq miler documents relat-
ing ktidi~l~ `GFi i~ 'tHi~ Lb*W'C, 7Y'th~ fl9Abpd e~,~ oar on Ii aMiaT;''b~e~f rnished to any assignee
of any claim arising under this contract or to any other person not entitled to receive the same; provided that
a copy of any part or all of this contract so marked may be furnished or any information contained therein may
be disclosed, to such assignee upon the prior written authorization oY the Contracting Officer.
6. FEDERAL, STATE AND LOCAL TAXES.-(a) Definitions. As used throughout this clause, the following
terms shall have the meanings set forth below:
(i) The term "direct tax" means any tax or duty directly applicable to the completed supplies or services
(as distinguished from taxes directly applicable to materials and components used in the manufacture or furnish-
ing of the completed supplies or services) covered by this contract, or any other tax or duty from which the Con-
tractor or this transaction is exempt. It includes any tax or duty directly applicable to the importation, produc-
tion, processing, manufacture, construction, sale, or use of such supplies or services; it also includes any tax
levied on, with respect to, or measured by sales, receipts from sales, or use of the supplies or services covered
by this contract. The term does not include transportation taxes, unemployment compensation taxes, social security
taxes, income taxes, excess-profits taxes, capital stock taxes, property taxes, and such other taxes as are not with-
in the definition of the term "direct tax" as set forth above in this paragraph.
(ii) The term "contract date" means the effective date of this contract if it is a negotiated contract, or
the date set for the opening of bids if it is a contract entered into as a result of formal advertising. For the pur-
pose of any additional procurement of supplies or services called for by an agreement supplemental hereto, the
term "contract date" shall refer to the date of such supplemental agreement.
(b) Federal Taxes. Except as may be otherwise provided in this contract, the contract price includes all ap-.
plicable Federal taxes in effect on the contract date.
(c) State or Local Taxes. Except as may be otherwise provided in this contract, the contract price does not
include any State or local direct tax in effect on the contract date.
(d) Evidence of Exemption. The Government agrees, upon request of the Contractor, unless there exists no
legal basis to sustain an exemption, to furnish a Tax Exemption Certificate or other similar evidence of exemption
with respect to any direct tax not included in the contract price pursuant to this clause; and the Contractor
agrees, in the event of the refusal of the applicable taxing authority to accept such evidence of exemption, (i)
promptly to notify the Contracting Officer of such refusal, (ii) to cause the tax in question to be paid in such
manner as to preserve all rights to refund thereof, and (iii) if so directed by the Contracting Officer, to take all
necessary action, in cooperation with and for the benefit of the Government, to secure a refund of such tax (in
which event the Government agrees to reimburse the Contractor for any and all reasonable expenses incurred at
its direction.)
(e) Price Adjustment. If, after the contract date, (i) the Federal Government or any State or local govern-
ment either imposes or increases (or removes an exemption with respect to) any direct tax or any tax directly
applicable to the materials or components used in the manufacture or furnishing of the completed supplies or
services covered by this contract, or (ii) the Federal Government or any State or local government refuses to
accept the evidence of exemption, furnished under paragraph (d) hereof, with respect to any direct tax excluded
from the contract price, or (iii) the Federal Government does not furnish a tax exemption certificate or other similar
evidence of exemption with respect to any direct tax excluded from the contract price, and if under either (i), (ii), or
(iii) the Contractor is obliged to and does pay or bear the burden of any such tax (and does not secure a refund
thereof), the contract price shall be correspondingly increased, and if interest and penalties are incurred by reason of
delay in payment of such tax on the instruction of the Contracting Officer, and such interest and penalties are legally
imposed, the contract price shall be correspondingly increased. If, after the contract date, the Contractor is re-
lieved in whole or in part from the payment or the burden of any direct tax included in the contract price, or any
tax directly applicable to the materials or components used in the manufacture or furnishing of the completed
supplies or services covered by this contract, the Contractor agrees promptly to notify the Contracting Officer of
such relief, and the contract price shall be correspondingly decreased or the amount of such relief paid over to
the Government. Invoices or vouchers covering any increase or decrease in contract price pursuant to the provisions
of this paragraph shall state the amount thereof, as a separate added or deducted item, and shall identify the
particular tax imposed, increased, elminated, or decreased.
(f) Refund or Drawback. If any tax or duty has been included in the contract price as adjusted under para-
graph (e) of this clause, and if the Contractor is entitled to a refund or drawback by reason of the export or re-
export of supplies covered by this contract, or of materials or components used in the manufacture or furnishing
of the completed supplies or services covered by this contract, the Contractor agrees that he will promptly notify
the Contracting Officer thereof and that the amount of any such refund or drawback obtained will be paid over to
the Government or credited against amounts due from the Government under this contract; provided, however, that
the Contractor shall not be required to apply for such refund or drawback unless so requested by the Contracting
Officer.
7. DEFAULT.-(a) The Government may, subject to the provisions of paragraph (b) below, by written
Notice of Default to the Contractor terminate the whole or any part of this contract in any one of the following
circumstances:
(i) if the Contractor fails to make delivery of the supplies or to perform services within the time specified
herein or any extension thereof; or
(ii) if the Contractor fails to perform any of the other provisions of this contract, or so fails to make
progress as to endanger performance of this contract in accordance with its terms, and in either of these two
circumstances does not cure such failure within a period of ten (10) days (or such longer period as the Contract-
ing Officer may authorize in writing) after receipt of notice from the Contracting Officer specifying such a failure.
(b) The Contractor shall not be liable for any excess costs if any failure to perform the contract arises out
of causes beyond the control and without the fault or negligence of the Contractor. Such causes include, but are
not restricted to, acts of God or of the public enemy, acts of the Government, fires, floods, epidemics, quarantine
restrictions, strikes, freight embargoes, unusually severe weather, and defaults of subcontractors due to any of
such causes unless the Contracting Officer shall determine that the supplies or services to be furnished by the sub-
contractor were obtainable from other sources in sufficient time to permit the Contractor to meet the required
delivery schedule.
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(c) In the event the Government terminates this n ract in whole or in part as provided in paragraph (a)
of this clause, the Government may procure, upon such terms and in such manner as the Contracting Officer may
deem appropriate, supplies or services similar to those so terminated, and the Contractor shall be liable to the
Government for any excess costs for such similar supplies or services, provided that, the Contractor shall continue
the performance of this contract to the extent not terminated under the provisions of this clause.
(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 Govern-
ment in the manner and to the extent directed by the Contracting Officer, (i) any completed supplies, and (ii)
such partially completed supplies and materials, parts, tools, dies, jigs, fixtures, plans, drawings, information, and
contract rights (hereinafter called "manufacturing materials") as the Contractor has specifically produced or
specifically acquired for the performance of such part of this contract as has been terminated; and the Contractor
shall, upon direction of the Contracting Officer, protect and preserve property in possession of the Contractor in
which the Government has an interest. The Government shall pay to the Contractor the contract price for com-
pleted supplies delivered to and accepted by the Government, and the amount agreed upon by the Contractor and
the Contracting Officer for manufacturing materials delivered to and accepted by the Government and for 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."
(e) If, after notice of termination of this contract under the provisions of paragraph (a) of this clause, it is
determined that the failure to perform this contract is due to causes beyond the control and without the fault or
negligence of the Contractor pursuant to the provisions of paragraph (b) of this clause, such Notice of Default
shall be deemed to have been issued pursuant to the clause of this contract entitled "Termination for Convenience
of the Government," and the rights and obligations of the parties hereto shall in such event be governed by such
clause. (Except as otherwise provided in this contract, this paragraph (e) applies only if this contract is with a
military department.)
(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.
8. DISPUTES.-Except as otherwise provided in this contract, any dispute concerning a question of fact aris-
ing under this contract which is not disposed of by agreement shall be decided by the Contracting Officer, who
shall reduce his decision to writing and mail or otherwise furnish a copy thereof to the Contractor. Within thirty
(30) days from the date of receipt of such copy, the Contractor may appeal by mailing or otherwise furnishing
to the Contracting Officer a written appeal addressed to the Secretary, and the decision of the Secretary or his duly
authorized representative for the hearing of such appeals shall, unless determined by a court of competent juris-
diction to have been fraudulent or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad
faith or not supported by substantial evidence be final and conclusive; provided that, if no such appeal is taken,
the decision of the Contracting Officer shall be final and conclusive. In connection with any appeal proceeding
under this clause, the Contractor shall be afforded an opportunity to be heard and to offer evidence in support
of its appeal. Pending final decision of a dispute hereunder, the Contractor shall proceed diligently with the per-
formance of the contract and in accordance with the Contracting Officer's decision.
9. CONVICT LABOR.-In connection with the performance of work under this contract, the Contractor agrees
not to employ any persons undergoing sentence of imprisonment at hard labor.
10. EIGHT-HOUR LAW OF 1912.-This contract to the extent that it is of a character specified in the Eight-
Hour Law of 1912 as amended (40 U.S. Code 324-326) and is not covered by the Walsh-Healey Public Contracts
Act (41 U.S. Code 35-45), is subject to the following provisions and exceptions of said Eight-Hour Law of 1912
as amended, and to all other provisions and exceptions of said Law:
No. laborer or mechanic doing any part of the work contemplated by this contract, in the employ of the
Contractor or any subcontractor contracting for any part of the said work, shall be required or permitted
to work more than eight hours in any one calendar day upon such work, except upon the condition that
compensation is paid to such laborer or mechanic in accordance with the provisions of this clause. The
wages of every such laborer and mechanic employed by the Contractor or any subcontractor engaged in
the performance of this contract shall be computed on a basic day rate of eight hours per day; and work in
excess of eight hours per day is permitted only upon the condition that every such laborer and mechanic
shall be compensated for all hours worked in excess of eight hours per day at not less than one and one-
half times the basic rate of pay. For each violation of the requirements of this clause a penalty of five dol-
lars shall be imposed upon the Contractor for each such laborer or mechanic for every calendar day in
which such employee is required or permitted to labor more than eight hours upon said work without
receiving compensation computed in accordance with this clause; and all penalties thus imposed shall be
withheld for the use and benefit of the Government.
11. NONDISCRIMINATION IN EMPLOYMENT.-In connection with the performance of work under this con-
tract, the Contractor agrees not to discriminate against any employee or applicant for employment because of race,
religion, color, or National origin. The aforesaid provision shall include, but not be limited to, the following employ-
ment, upgrading, 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
hereafter in conspicuous places, available for employees and applicants for employment; notices to be provided by the
Contracting Officer setting forth the provisions of the nondiscrimination clause.
The Contractor further agrees to insert the foregoing provision in all subcontracts hereunder, except subcon-
tracts for standard commercial supplies or raw materials.
12. OFFICIALS NOT TO BENEFIT.-No member of or delegate to Congress or resident commissioner shall
be admitted to any share or part of this contract or to any benefit that may arise therefrom; but this provision
shall not be construed to extend to this contract if made with a corporation for its general benefit.
13. 'COVENANT AGAINST CONTINGENT FEES.-The Contractor warrants that no person or selling agency
has been employed or retained to solicit or secure this contract upon an agreement or understanding for a com-
mission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established com-
mercial 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 ri ht o ann t i co t i hout liability o;,,in its
discreApplt?Vde4laFE*J?kWSST2WI/t64JJOr:6NkE 1&6 OO ch mmission, percentage,
 14.. TERMIN,1 (, }~~F Q~ r~i ~1'a ?fprmance of work under
this ~JR, ~V+a'S'~ ~Vbv~'rnr~ t` ~}~ Yzft1l'ioor from time to time
in part, whenever the Contracting Officer shall determine that such termination is in the best interests of the
Government. Any such 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 (1) discontinue all work to the extent and on the dates specified in such Notice; (2) proceed
promptly with the return to its plant of such of its Contractor personnel as may be covered by said Notice; and
(3) transfer title and deliver to the Government, in the manner, and to the extent and at the times directed by
the Contracting Officer, the completed and partially completed work, material, plans, drawings, data, information,
reports, and other property produced as a part of, or acquired in connection with the performance of the work
terminated in such Notice.
(c) Upon termination of work, as provided in this clause, the Contractor shall, in respect to such Contractor
Personnel as may be covered by said Notice of Termination, be paid that part of the fixed price set forth in the
Clause of this contract entitled "Consideration and Payment" which has accrued for services rendered hereunder
up to the effective date of such Notice, and for time necessary for such Contractor Personnel to return to the plant
of the Contractor after the effective date of said Notice and any other amounts properly owing to the Contractor
under said "Consideration and Payment" clause which are theretofore unpaid. If, at the date of said Notice, certain
costs have actually been incurred by the Contractor in connection with the contract preliminary to the departure
of the Contractor Personnel covered by said Notice of Termination from the plant of the Contractor which are
allocable to the entire period of performance contemplated hereunder, the Government will pay to the Con-
tractor such sum as the Contracting Officer and the Contractor may agree is properly allocable to the termi-
nated portion of the contract. Settlement under the provisions of this paragraph (c) shall be evidenced by a Supple-
mental Agreement to the contract. In the event of the 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, the Contracting Officer shall determine, on the basis of information available to him, the amount, if any,
due to the Contractor by reason of the termination and shall pay to the Contractor the amount so determined.
(d) Any dispute arising out of the termination of the contract under this clause shall be decided in accordance
with the procedure prescribed in the "Disputes" clause hereof.
15. SUBCONTRACTS FOR WORK OR SERVICES.-No contract shall be made by the Contractor with any
other party for furnishing any of the work or services herein contracted for without the written approval of the
Contracting Officer, but this provision will not be taken as requiring the approval of contracts of employment be-
tween the Contractor and personnel assigned for services thereunder.
16. INSPECTION AND AUDIT.-(a) The Contractor agrees that its books and records and its plant, or such
parts thereof. as may be engaged in the performance of this contract shall at all reasonable times be subject to
inspection and audit by any authorized representative of the department.
(b) The Contractor shall cause a like provision to be included in all subcontracts hereunder.
17. EXAMINATION OF RECORDS.-(The provisions of this clause shall be applicable only if this contract
is a negotiated contract in excess of $1,000.)-(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 (3) 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 (3) 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 this clause excludes (i) pur-
chase orders not exceeding $1,000 and (ii) subcontracts or purchase orders for public utility services at rates
established for uniform applicability to the general public.
(c) The provisions of paragraphs (a) and (b) above are in addition to any other provisions of this contract
relating to access to, retention of, and inspection of records.
18. GRATUITIES: (a) The Government may, by written notice to the Contractor, terminate the right of the
Contractor to proceed under this contract if it is found, after notice and hearing, by the 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 Govern-
ment 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 representa-
tive) which shall be not less than three nor more than ten times the cost 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.
19. CONTRACTOR PERSONNEL.-(a) Subject to the provisions of PART II of the Schedule, the number of
contractor personnel and the number of man-months specified in the Schedule may be exceeded with the prior
written approval of the Contracting Officer, but only to the extent necessary to provide continuous service in the
event that a transfer, reassignment, or other cause would result in an interruption of service.
(b) Contractor personnel will normally be assigned to major air command headquarters. Such personnel
shall perform services at such places within the command as the Contracting Officer may direct.
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(c) The Contractor shall be responsible for selecting personnel who are well qualified to perform the required
services, for supervising techniques used in their work, and for keeping them informed of all improvements, changes
and methods of operations.
(d) Contractor personnel, upon assignment, either within the continental limits of the United States or
overseas, are subject to call 24 hours a day. Normally they will perform their assigned duties on the same
daily and hourly basis as the personnel of the organization to which they are assigned. Holidays will be observed
in accordance with the direction of the Commander of the air activity to which Contractor personnel are assigned.
In the event that a Contractor employee is required to perform services hereunder on an observed holiday, reim-
bursement shall be made as provided in the Schedule.
(e) The Contractor shall be required to furnish a replacement for any Contractor personnel who may be
returned to the Contractor's plant or become incapacitated or die or otherwise be unable to complete performance
hereunder prior to the expiration of the period of performance, unless otherwise agreed upon by the parties hereto.
(f) The Contractor shall furnish all necessary equipment, salaries and wages of its personnel, all costs of
subsistence and lodging, costs of passports, insurance, and any and all other costs in connection with the services to
be rendered hereunder except as otherwise provided in the Clause hereof entitled "Services Furnished by the Gov-
ernment."
(g) The Contractor, promptly after receipt of official notice from the Contracting Officer that the services
of Contractor personnel are required hereunder, shall furnish in writing to the Contracting Officer the name of
each person assigned by the Contractor under this contract, his qualifications, his security clearance, and such
other pertinent information as the Contracting Officer may request. The Contractor shall have the right to replace
or transfer its personnel and to substitute other qualified personnel in lieu thereof; provided, however, that such
transfers or reassignments will not be due cause for a break in services rendered and that such replacements or
transfers have been coordinated with the Contracting Officer. Any transfers or reassignments for the convenience
of the Contractor, including travel and training cost of replacement personnel, shall be at the Contractor's expense.
Transfers and reassignments of personnel shall be construed as being for the convenience of the Contractor unless
directed or approved by the Contracting Officer or his authorized representative. The selection of personnel by
the Contractor shall be subject to approval of the Contracting Officer.
(h) The Contracting Officer may, if he finds it to be in the best interest of the Government, direct the Con-
tractor to remove, and the Contractor shall remove, any employee from an assignment to perform services under
this contract.
(i) The Contractor shall furnish to and file with the Contracting Officer such copies of the Employment Con-
tracts, if any, entered into with Contractor personnel engaged in performing the services to be rendered under
this contract, as may be required by the Contracting Officer.
(j) Personnel employed by the Contractor hereunder and sent overseas a,1a? ue accrealted to the United States
Air Force with a recognized status under the Hague Regulations and the Geneva Covenants, shall be given
proper credentials and identification cards, shall wear a uniform when prescribed by the theater commander, shall
be subject to appropriate recognition under the rules of war, and shall be subject to such regulations as have been
or may hereafter be issued by the United States Air Force governing Contractor personnel serving with the United
States Air Force in foreign theaters of operation.
(k) In accordance with the Uniform Code of Military Justice, Article 2, Contractor personnel serving with,
employed by, or accompanying an armed force outside the continental limits of the United States and territories
specified in Article 2(11) and 2(12) are subject to the Uniform Code of Military Justice.
20. PERIOD OF PERFORMANCE.-(a) The services shall be performed during the period set forth in PART
III of the Schedule, but the time of starting and ending performance and the number of Contractor personnel fur-
nished at any time shall be as directed by the Contracting Officer.
(b) It is understood that time necessary for Contractor personnel to proceed from the plant or plants of the
Contractor to the site or sites for the performance of services hereunder shall be considered as time spent in the
performance of services hereunder. It is also understood that time necessary for the transfer of Contractor per-
sonnel between different sites for the performance of services hereunder and time necessary for the return of
such personnel to the plant of the Contractor shall be considered as time spent in the performance of services
hereunder.
21. SERVICES FURNISHED BY THE GOVERNMENT.-In connection with services to be rendered hereunder,
the Government shall furnish and supply to the Contractor the following facilities and services:
(a) Suitable transportation for Contractor personnel and their baggage and for any equipment to be furnished
by the Contractor hereunder from the Contractor's plant to the site or sites of work, at any site' of work while
on official business, between sites of work, and return to the plant of the Contractor. In the event of failure by
the Government to furnish suitable transportation, the Contractor shall furnish such transportation, and the Gov-
ernment will reimburse the Contractor for the actual and reasonable cost of such transportation, provided the
same has been approved as provided in this paragraph. All travel of Contractor personnel will require prior approval
from the Commander, Air Materiel Command, or the Commander of the major Air Command having operating
responsibility in connection with this contract, except that prior approval of nonexpense travel in connection with
the unit mission is not required.
(b) Use of Government communication facilities for the exchange of messages between Contractor personnel
and the Contractor, where and when available if the Contractor is unable to procure commercial communication
services; but the use thereof shall be subject to the regulations of the Representatives of the Government in charge
thereof.
(c) Use of Government services and agencies in the transmittal of funds to Contractor personnel and as a
medium of commercial exchange for said personnel when adequate commercial services and facilities are not
available.
(d) Contractor personnel assigned to Air Force activities will be accorded the same rivileges as commis-
sionedAV ghp~gg l1 ? dO'4ttO4 1$kgRD 8t86 8a~i8Rmt2808a3@39 lien available. Emer-
geney m ica ac,hties may a urms 1
ed as prescribed by applicable regulations.
 22.1 11 apply to the extent
that the on rac invo ves access to in ormat~on c asst a on en ~a inc u in d n gal-Modified Handling
Authorized" or higher.
(b) The Government shall notify the Contractor of the security classification of this contract, and the
elements thereof, and of any subsequent revisions in such security classification, by the use of a Security Require-
ments Check List (DD Forms 254 and 254-1).
(c) To the extent the Government has indicated as of the date of this contract or thereafter indicates
security classification under this contract as provided in paragraph (b) above, the Contractor shall safeguard
all classified elements of this contract and shall provide and maintain a system of security controls within its
own organization in accordance with the requirements of:
(i) the Security Agreement (DD Form 441), including the Department of Defense Industrial Security Manual
for Safeguarding Classified Information as in effect on date of this contract, and any modification to the 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 fur-
nished 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 representa-
tives of the Contracting Military Department shall have the right to inspect at reasonable intervals the proce-
dures, methods, and facilities utilized by the Contractor in complying with the security requirements under this
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.
(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.
(f) The Contractor agrees to insert, in all subcontracts hereunder which involve 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 it shall determine that any subcontractor proposed by it 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.
23. GOVERNMENT-FURNISHED PROPERTY.-(a) The Government shall deliver to the Contractor, 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 reasonably be required
for the intended use of such property (hereinafter referred to as "Government-furnished Property"). The delivery
or performance dates for the supplies or services to be furnished by the Contractor under this contract are based
upon the expectation that Government-furnished Property suitable for use will be delivered to the Contractor at
the times stated in the Schedule or, if not so stated, in sufficient time to enable the Contractor to meet such de-
livery or performance dates. In the event that Government-furnished Property is not delivered to the Contractor
by such time or times, the Contracting Officer shall, upon timely written request made by the Contractor, make
a determination of the delay occasioned the Contractor thereby, and shall equitably adjust the delivery or per-
formance dates or the contract price, or both, and any other contractual provision affected by such delay, in ac-
cordance with the procedures provided for in the clause of this contract. entitled "Changes." In the event the
Government-furnished Property is 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 Con-
tracting 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 accordance with the procedures provided for in the clause of this contract entitled "Changes." The foregoing
provisions for adjustment are exclusive and the Government shall not be liable to suit for breach of contract by
reason of any delay in delivery of Government-furnished Property or delivery of such property in a condition not
suitable for its intended use.
(b) By notice in writing the Contracting Officer may decrease the property furnished or to be furnished by
the Government under this contract. In any such case, the Contracting Officer upon the written request of the Con-
tractor 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 idenity as personalty by reason of affixation to any realty. The Contractor shall maintain adequate prop-
erty control records of Government-furnished Property in accordance with the requirements of the "Manual for
Control of Government Property in Possession of Contractors" (Appendix B, Armed Services Procurement Reg-
ulation) as in effect on the date of the contract, which Manual is hereby incorporated by reference and made a part
of this contract.
(d) The Government-furnished Property shall, unless otherwise provided herein, be used only for the 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
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 Approved For Releas 001/0'4/10: CIA-RDP81 B00878RO01 20319-9
or the Contractor shall make such repair of the property as the Government erects; 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 ad-
justment will be made in the contract price for any such repair or replacement of Government-furnished Property
made at the direction of the Government. 'Any repair Or replacement for which the Contractor is responsible under
the provisions of .this contract shall be accomplished by the Contractor at its own expense.
(f) (i) Except for loss, destruction or damage resulting from a failure of the Contractor due to willful
misconduct or lack of good faith of any of the 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 this contract, the Contractor
shall not be liable for loss or destruction of or damage to the Government-furnished Property (A) caused by any
peril while the property is in transit off the Contractor's premises, or (B) 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 prop-
erty may properly be located, or by removal therefrom because of any of the following perils:
(I) Fire; lightning; windstorm, cyclone, tornado, hail; explosion; riot, riot attending a strike, civil com-
motion; vandalism and malicious mischief; sabotage; aircraft or objects falling therefrom; vehicles run-
ning 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 ris-
ing 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
(II) 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 prevail-
ing 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 (A) and (B) 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 its possession or control, except to the extent that the sub-
contract, 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 its 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 in-
dustrial operation in connection with the performance of this contract.
(ii) The Contractor represents that it is not including in the price hereunder, and agrees that it will not
hereafter include in any price to the Government, 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.
(iii) Upon the happening of loss or destruction of or damage to any Government-furnished Property caused
by an excepted peril, the Contractor shall notify the Contracting Officer thereof, and shall communicate with the
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: (A) the lost,
destroyed and damaged Government-furnished Property (B) the time and origin of the loss, destruction or damage,
(C) all known interests in commingled property of which the Government-furnished Property is a part, and (D)
the insurance, if any, covering any part of or interest in such commingled property. The Contractor shall be re-
imbursed for the expenditures made by it in performing its obligations under this subparagraph (iii) (including
charges made to the Contractor by the Loss and Salvage Organization, except any of such charges the payment
of which the Government has, at its option, assumed directly), to the extent approved by the Contracting Officer
and set forth in a Supplemental Agreement.
(iv) With the approval of the Contracting Officer after loss or destruction of or damage to Government-
furnished Property, and subject to such conditions and limitations as may be imposed by the Contracting Officer,
the Contractor may, in order to minimize the loss to the Government or in order to permit resumption of business
or the like, sell for the account of the Government any item of Government-furnished Property which has been
damaged beyond practicable repair, or which is so commingled or combined with property of others, including
the Contractor, that separation is impracticable.
(v) Except to the extent of any loss or destruction of or damage to Government-furnished Property for
which the Contractor is relieved of liability under the foregoing provisions of this clause, and except for reasonable
wear and tear or depreciation, or the utilization of the Government-furnished Property in accordance with the pro-
visions 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 con-
tract, or as repaired under paragraph (e) above.
(vi) In the event the Contractor is reimbursed or compensated for any loss or destruction of or damage
to the Government-furnished Property, caused by an excepted peril, it shall equitably reimburse the Government.
The Contractor shall do nothing to prejudice the Government's rights to recover against third parties for any
such loss, destruction or damage and, upon the request of the Contracting Officer, shall at the Government's ex-
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f urnis h~ operty' , fhe Uontractor shall enforce hl `e liabili#y of t~~e s'u~con acto or such loss or destruction of
or damage to the Government-furnished Property for the benefit of the Government.
(vii) [Where applicable) In the event any aircraft are to be furnished under this contract, any loss or
destruction of, or damage to, such aircraft or other Government-furnished Property occurring in connection with
operations of said aircraft will be governed by the clause of this contract captioned "Flight Risks," to the extent
such clause is, by its terms, applicable.
(g) The Government shall at all reasonable times have access to the premises wherein any Government-fur-
nished 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 re-
sulting 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. Recoverable
scrap from Government-furnished Property shall be reported in accordance with a procedure and in such form as
the Contracting Officer may direct. The net proceeds of any such disposal 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.
(j) Such equipment, services, and facilities as are to be furnished and paid for by the Contractor under the
provisions of the clause hereof entitled "Contractor Personnel," if not commercially available to the Contractor
after the Contractor has made every effort to procure the same, may be furnished by the Government. Such equip-
ment, services, and facilities, when supplied by the Government for the Contractor personnel shall be approxi-
mately of the same standard as supplied to commissioned officers of the United States Air Force. In the event
that such equipment, services, and facilities are supplied by the Government, an equitable adjustment of the fixed
price to be paid to the Contractor hereunder shall be made by the Contracting Officer and the contract amended
accordingly. Such equipment and facilities shall be considered Government-furnished Property and subject to the
provisions of this clause.
24. ~OPYR he T
a) The Contractor agrees to and does hereby grant to the Government, and
to its officers, agents and employees acting within the scope of their official
duties, (i) a royalty-free, nonexclusive and irrevocable license to reproduce,
translate, publish, use, and dispose of, and to authorize others so to do, all
copyrightable material first produced or composed and delivered to the Government
under this contract by the Contractor, its employees or any individual or concern
specifically employed or assigned to originate and prepare such material; and (ii)
a license as aforesaid under any and all copyrighted or copyrightable work not
first produced or composed by the Contractor in the performance of this contract
but which is incorporated in the material furnished under the contract, provided
that such license shall be only to the extent the Contractor now has, or prior to
completion or final settlement of the contract may acquire, the right to grant such
license without becoming liable to pay compensation to others solely because of
such grant.
(b) The Contractor agrees that it will exert all reasonable effort to advise
the Contracting Officer, at the time of delivering any copyrightable or copyrighted
work furnished under this contract, of any adversely-held copyrighted or copy-
rightable material incorporated in any such work and of any invasion of the right
of privacy therein contained.
(c) The Contractor agrees to report to the Contracting Officer promptly and
in reasonable written detail, any notice or claim of copyright infringement
received by the Contractor with respect to any material delivered under this
contract.
25. ALTERATIONS
The following alterations were made in this contract prior to signature
thereof by the parties to this contract:
(a) In Paragraph 17 entitled "EXAMINATION OF RECORDS" delete the words
? , "Comptroller General of the United States" and substitute "Comptroller of the
Contracting Agency."
Approved For Release 2001/04/10 : CIA-RDP81B00878R001200020319-9