NEGOTIATED CONTRACT - CONTRACT NO. SP-1920

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89B00487R000300630006-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 50
• Document Creation Date: December 22, 2016
• Document Release Date: August 9, 2011
• Sequence Number: 6
• Publication Date: June 1, 1959
• Content Type: REPORT

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Lockheed Aircraft Corporation
Burbank, California
Contract No. SP-1920
Contract for: (See Schedule) Alount : $l, 6k2, 50.00
Mail Invoices to: Performance Period/Delivery
Schedule: See Schedule
Adrinistrative ta:
WD-392-59
Inspection Point:
Contractor's Plant, Burbank or
Bakersfield California, and/or
Teat Site(ss
This contract is entered into, by and between the titet States
of America, hereinafter called the (ioverasrent, represented by the
Contracting Officer executing this contract, and the above-maned
Contractor which is a Corporation, Incorporated in the State of
California, hereinafter called the Contractor,
he parties hereto agree that the Contractor shall furnish the fae-
ilities and deliver all supplies and perfora all the services set
forth in the attached Schedule issued hereunder, for the considera-
tion stated therein.
The rights and obligations of the parties to this contract shall be
subject to and governed by the attached Schedule, and General Pro-
visions, which together with this signature page and the accompany-
ing certificate comprise this Contract No. SP-1920. In the event
of any inconsistency between the Schedule and the General Provi-
sions, the Schedule shall control.
IN WITIRSS WMWP, the parties hereto have executed this contract
as of , 1959.
S1~atures :
'Lt Cl?s6D AIRCRA1?CO 'DRAT' ~ M baMINE On= OF AimRICA
25X1.1
Clarence L--Xd son
Title Vice President
Contracting Officer
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Contract No. SP-1920
C'ICATS
certify that
I an the Assistant Secretary of the Corporation
named as Contractor herein; that Clarence L. Johnson
who signed this contract on behalf of the Contractor was then
Vice President of said Corporation; that
said contract was duly signed for and in behalf of said Corporation
by authority of its governing body, and is within the scope of its
Corporate powers.
(Corporate seal)
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Contract No. SP-1920
INDIM TO SCEOULE
Page
PART I SUPPLIES AND SERVICES TO BE FURNIS?------------
4
PART II
DELIVERY ------------------------?----
5
-
PART III - PROGRESS PA7f1Q1iTS ---?--------?---------?-----
5
PART IV - INSPECTION AND ACCEPTANCE OF SUPPLIES AND
CORRECTIONS OF N----N-r-------------- 7
PART V - WAIVER OF REV JIR-NdItTS OF GRERRAL PROVISIONS ---- 8
PART VI - SPECIAL SECURITY RESTRICTIONS ?-------?------- 9
PART VII - PRICE ON-------N-r-N-----r--r- 10
PART VIII - L ZTZR CONTRACT WC r-r-rr-rr-rr------- 12
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Contract No. SP-1924
a. The Contractor shall furnish the supplies and services
PART I - SOPPLISB AND SE2VICID TO 11 FUMIISEID
follows:
Its 1.
# 358, 360, 351 and 352
5 es. $265,125.
Contractor shall modify., as necessary,
4overnseat-oimed U-2 aircraft and install
Government-ovasd J-75-P2 engines. she
Contractor shall perfora the necessary
flight tests consisting of a four (4) south
program on aircraft #342 (prototype) and
shakedown and delivery an rawaining aircraft*
Its 2. Spare parts for initial operations.
she contract will be amended at
a later date to reflect the spare
listing.
$1,325,6'25
For the Lot $109,500
Its 3. Ground Handling Pgaipaent for
initial operations. me contract
will be amended at a later date
to reflect this egaipaent.
For the Lot $ 27,375
Its 4. Repair fuselage of aircraft #358
which was damaged during flight
test
For the Job $ 20,000
Its 5 Furnish services of pilot, test
engineer and crew chief with
initial deployaest of a vehicle
to either Rstacbment "R" or "C"
$204.48 per d~1r based on a five
day week or #1472.44 per week.
Per dim in accordance with
established Cc^gaay policy. Trans-
portation will be furnish" by the
t. The allocation is
based on a total of six weeks.
Allocated for Itaa 5
10,000
TOTAL TARGIV PRICH
2# 00
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Contract Mo. SP-1920
PART II - DZLIVZRY SC LB
Aircraft No.
Begin
modification
Deliver to
Test Site
Available
for Dot
342
18 l'eb.1959
4 MAY 1959
30 August 1959
358
23 mar. 1959
8 June 1959
13 J'n1y 1959
351
18 may 1959
6 Ju y 1959
31 July 1959
360
8 Mine 1959
10 Aug.1959
21 Aug. 1959
352
Will be stipulated at a later date.
PART III - PRESS PAXM TS
a. Progress payments, which are hereby defined as payments
prior to acceptance on work in progress for the Ooverneent under
this contract, may be made upon the following terms and conditions:
b. The Contracting Officer may., from time to time, authorise
progress payments to the Contractor upon property acquired or produced
and services performed by it for the performance of this contract:
PROVI] D, that such progress payments shall not exceed 90 percent of
the cost to the Contractor of the property and services upon which
payment is made, which costs sha11 be determined from evidence sub-
mitted by the Contractor and which must be such as is satisfactory
to the Contracting Officer as being representative of the value of
the work already performed: PAOVIDZD FUMM., that in no event shall
the total of unliquidated progress payments (see (e) below) and of
unliquidated advance payments, if any, made under this contract,
esaeed 80 per cent of the total contract price of supplies or services
still to be delivered.
c. Upon the making of any progress payments under this contract,
title to all parts, materials, inventories, work in process and
nondurable tools theretofore acquired or produced by the Contractor
for the performance of this contract, and properly chargeable thereto
under sound accounting practice, shall forthwith vest in the Govern-
went; and title to all like property thereafter acquired or produced
by the Contractor for the performance of this contract and properly
chargeable thereto as aforesaid shall vest in the Government forthwith
upon said acquisition or production: PHOVIDBD, that nothing herein
shall deprive the Contractor of any further progress or final payments
due or to become due hereunder; or relieve the Contractor or the
Government of any of their respective rights or obligations under
this contract.
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Contract No. SP-1920
d. The Contractor represents and Warrants that the property,
upon which any progress payment is made hereunder, shell be cleared
of all liens and encumbrances of any kind whatsoever upon receipt
of any progress payments.
e. In making payment for the supplies furnished hereunder,
there shall be deducted from the contract price therefor a propor-
tionate amount of the progress payments theretofore made to the
Contractor, under the authority herein contained.
f. It is recognized that property (including, Without limita-
tion completed supplies, spare parts, drawings, information, par-
tially completed supplies, work in process, materials, fabricated
parts and other things (called for herein) title to which is or may
hereafter become vested in the Government pursuant to this Clause
will from, time to time be used by or put in the care, custody or
possession of the Contractor in connection with the performance of
this contract. The Contractor, either before or after receipt of
Notice of Termination at the option of the Government, may acquire
or dispose of property to which title is vested in the Government
under this clause, upon terms approved by the Contracting Officer;
PROVIM, that after receipt of Notice of Termination any such
property that is a part of termination inventory may be acquired or
disposed of only in accordance with the provisions of the termination
clause of this contract and applicable laws and regulations. She
agreed price (in case of gaquisition by the Contractor) or the pro-
ceeds received by the Contractor (in case of any other disposition),
shall, to the extent that such price and proceeds do not exceed the
unliquidated balance of progress payments hereunder, be paid or
credited to the Government as the Contracting Officer shall direct;
and such unliquidated balance shall be reduced accordingly. Current
production scrap may be sold by the Contractor without approval of
the Contracting Officer but the proceeds will be applied as provided
in this paragraph (f), provided that any such scrap which is a part
of termination inventory may be sold only in accordance with the
provisions of the termination clause of this contract and applicable
laws and regulations. tlpon liquidation of all progress payments
hereunder or upon completion of deliveries called for by this con-
tract, title to all property (or the proceeds thereof) which bad not
been delivered to and accepted by the Government under this contract
or which has not been incorporated in supplies delivered to and
accepted by the Government under this contract and to which title
has vested in the Goverment under this clause shall vest in the
Contractor.
g. The provisions of this contract referring to "Liability
for Government furnished Property" and any other provisions of
this contract defining liability for Government-furnished property
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Contract No. $P..1920
shall be inapplicable to property to which the Government shall
have acquired title solely by virtue of the provisions of this
Clause. The provisions of this Clause shall not relieve the Con-
tractor from risk of loss or destruction of or damage to property
to which title vests in the Goverment wader the provisions hereof.
h. If this contract (as heretofore or hereafter supplemented
or amended) contains provisions for Advance Payments, and in addi-
tion, if at the time any progress payment is to be and, to the
Contractor under the provisions of this progress payments clause
any unligaidated balance of advance payments is outstanding, then
notwithstanding any other provision of the Advance Payments Clause
of this contract the net amount, after appropriate deduction far
liquidation of the advance payment of such pv sss payment shall
be deposited in the special bank account or accounts asintainsd as
required by the provisions of the Advance Payments Clause, and shall
thereafter be withdrawn only pursuant to such provisions.
PART IV - SON AND ACCIPTINCB OF SUPPLIES AND CORRNCTICIS OF
D~ECTN
a. The Contractor shall provide and maintain an inspection
system acceptable to the Contracting Officer covering the supplies
hereunder.
b. All supplies (including raw materials, components, inter-
mediate assemblies and end products) my be inspected by the Con-
tracting Officer at any time during the period of manufacture. If
the Contracting Officer so elects by notice in writing to the Con-
tractor, the Contractor shell tender the supplies for acceptance at
specified delivery points in which event the Contracting Officer may
accept then or, if they are defective in material or workmaship or
otherwise not in conformity with the requirements of this contract,
may reject them or require their correction. In the event the Con-
tracting Officer does not so elect, supplies delivered shall be
deemed to be accepted upon the mailing by the Contractor to the Con-
tracting Officer of a certificate of the Contractor, reading substan-
tially as follows:
I hereby certify that I did, on the day of
ship via
pursuant to contract Nos
-VE units (or___per cent) of the s es called for
in Item therein; that such supplies were
of the ity ed for and were in all respects in
accord with the applicable specifications.
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Contract No. SP-1980
a. Upon completion of performance and final payment by the
Government, all the supplies called for herein shall be deemed to
be finally accepted, subject to the following guarantyt
The Contractor guarantees that at the time of delivery
thereof, the articles and/or equipment provided for under
this contract will be free from any defects in material or
workra~mship and will conform to the requirements of this
contract. Notice of any such defeat or nonconformance shall
be given by the Government to the Contractor within six months
of the delivery of the defective or nonconforming article
and/or equipment. If required by the Government 'within a
reaswnble time after such notice, the Contractor shall with
all possible speed correct or replace the defective or am-
conforming article and/or equipment or part thereof. When
such correction or replacement requires transportation of the
article and/or equipment or part thereof, shipping costs, not
ez eeding usual charges from the delivery point to the Con-
tractor's plant and return, shall be borne by the Contractor;
the Goverment shall bear all other shipping costs. The
Guaranty shall than continue as to corrected or replacing
articles and/or equipment or parts thereof, until siz months
after the data of redelivery. If the Government does not
require correction or replacement of a defective or noncon-
forming article and/or equipment or a part thereof, the
Contractor, if required by the Contracting officer within a
reasonable time after the notice of defeat or nonccaformammee
shall repay such portion of the contract price of the article
as is equitable in the circumstances.
PART V - WAIV1Gt OF IMMUMN OF G1 NRAL PROVISIONS
Notwithstanding the requirements of any of the General Provi-
sions of this contract to the contrary, whensoever the Contractor,
in performance of the work under this contract, shall find that
the requirements of any of the clauses of the General Provisions
are in conflict with security instructions issued to the Contractor
by the Contracting officer or by his duly authorized representative
for security matters, the Contractor shall call the attention of
the Contracting Officer to such conflict and the Contracting
officer or his duly authorized representative for security matters
shall (i) modify or rescind such security requirements or (ii) the
Contracting officer shall issue to the Contractor a waiver of com-
pliance with the requirements of the General Provisiens conflicting
with such security requirements. Any waiver of compliance with the
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Contract No. SP-1920
General Provisions of this contract issued by the Contracting
Officer shall be in 'writing, except that the approval by the Con..
tracting Officer of any subcontract issued hereunder by the Con-
tractor shall be deemed to constitute approval of waiver of any
clauses of the General Provisions in conflict 'with the stipulations
of such subcontract.
PART VI ? SPRCIAL BECURIT! RSSTAICTIt1IS
The Contractor shall not reveal (i) the specific nature or
any details of the work being performed hereunder or (ii) any in-
formation whatsoever 'with respect to the department of the Govern-
went sponsoring this contract and the 'work thereunder except as the
Contractor is directed or permitted to reveal such information by
the Contracting Officer or by his duly authorised representative
for security matters, and notwithstanding any clause or section of
this contract to the contrary, the Contractor shall not interpret
any clause or section of this contract as requiring or permitting
divulgence of such information to any person, public or private,
or to any officer or department of the Government without the
express consent of the Contracting Officer or his duly authorised
representative for security matters.
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Contract No. SP-1920
A. Because of the nature of the work called for by this contract
and the great uncertainty as to the cost of performance hereunder, the
parties agree that the contract price set forth in APPENDIX I hereof
may be increased or decreased in accordance with the provisions of this
clause.
B. Within 60 days after the completion or termination of this
contract, the Contractor will file with the Contracting Officer a
sta-z:ement showing, in such form and detail as the Contracting Officer
may prescribe, the Contractor's cost of producing the supplies or
furnishing the services called for hereunder, together with such
other information as may be pertinent in the negotiations for a re-
determined price pursuant to this clause. Such statement of cost
shawl fairly reflect the normal operation of the Contractor's cost
eystem. The Contracting Officer shall have the right at all reason-
able times to make or cause to be made such examinations and audi?cc
of the Contractor's books, records and accounts as he may request.
The Contractor further agrees to include in each of his subcontracts
which is on a cost or cost-plus-a-fixed-fee or a price redetermination
basis a provision to the effect that the subcontractor agrees (i) to
submit to the Contracting Officer such cost data as may be require;.
for price redetermination, (ii) to permit the Contracting Officer to
make or cause to be made such examination and audits of books, records
and accounts as the Contracting Officer may deem necessary, and (iii)
to include a like provision in each of his subcontracts which is on a
cost or coot-plus-a-fixed,-fee or a price redetermination basis.
C. Upon the filing of the statement and other pertinent informa-
tion required by paragraph (B) of this clause, the Contractor and the
Contracting Officer will promptly negotiate in good faith to agree
upon a reasonable redetermined price for the entire contract which,
upon the basis of such statement and other pertinent information, will
constitute fair and just compensation to the Contractor for the per-
formance of this contract. In determining the extent of any estimated
allowance for profit to be taken into account in fixing such redeter-
mined price, consideration will be given to the extent to which .the:
Contractor has performed the contract with efficiency, economy and
ingenuity. The redetermined price shall be evidenced by a supplemen-
tal agreement to this contract. In no event shall the redetermined
price exceed the sum of $1,61.2,500.04.
D. If within 60 days after the completion or termination of this
contract, the parties shall fail to agree upon a redetermined price
(which term, for the purpose of this clause, shall include direct
costs, indirect costs and profit) in accordance with the provisions of
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Contract No. SP-1920
this clause, the failure to agree shall be a dispute concerning a
question of fact within the meaning of the clause of this contract
entitled "Disputes."
E. In the event of a price increase the Government will pay or
credit to the Contractor the amount by which the redetermined price
shall exceed the contract price aforesaid. In the event of a decrease
in price the Contractor will repay or credit the amount of such de-
creaee to the Government in such manner as the Contracting Officer
may direct.
F. For any of the purposes of the clause of this contract en-
titled "Termination for Convenience of the Government" (including
without limitation, computation of "the total contract price" and
"the contract price of work not terminated"), the contract price shall
be the redetermined contract price agreed upon under paragraph (C) of
this clause or determined under paragraph (D) of this clause, as the
case may be.
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Contract No. SP-1920
PART VIII - L 'xsi CONTRACT
This is the Definitive Contract contemplated by the Letter
Contract No. SP-1920, dated May 18, 1959, between the parties
hereto, and supersedes said letter contract in its entirety. Work
performed and pareents made, if any, under said letter contract
shall be deemed to be work performed and paymeats made under this
Definitive Contract. In the event of conflict between this Defini-
tive Contract and said letter contract, this Definitive Contract
shall govern.
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Pape No.
1.
DEFINITIONS -----------------------------------
1
2.
CHANGES----------------------------------------
1
3.
EXTRAS------------ -----------------------------
2
4.
VARIATION IN QUANTITY --------------------------
2
5.
INSPECTION-------------------------------------
2
6.
Ij.ESPONS IBILITY FOR SUPPLIES---------------------
3
7.
PAYMENTS------------------- --------------------
3
8.
9.
Af.SIGNIEIW OF CLAIMS-
--------------------------ADDITIONAL Br ND SECURITY-----------------------
4
4
10.
FEDERAL, STATE, AND 14OCAL TAXES----------------
4
11.
DEFAULT----------------------------------------
6
12.
DISPUT7S------------- --------------------- ------
8
13.
SOVIET CONTROLLED AREAS------------------------
8
14.
EIGHT-HOUR LAW OF 1912-------------------------
9
15.
KALSH-HEALEY PUBLIC CONTRACTS ACT--------------
9
16.
NONCISCR.UILTATION IN EMPLOYMENT----------------
9
17.
OFFICIALS NOT TO BENEFIT-----------------------
10
1.8.
COVENANT AGAINST CONTINGENT FEES---------------
10
19,
T.ERNINATTON FOR CONVEN ENCE OF THE GOVERNMENT--
10
20,
AUTHORIZATION AND CONSENT----------------------
15
21.
NOTICE AND ASSISTANCE REGARDING PATENT-
'
INFRINGa0NT------- ?------------------------
15
22.
BUY AMERICAN ACT-------- 4-----------------------
15
23.
FILING OF PATENT APPLICATIONS ---------- -------
16
24.
PATENT RIGHTS----------------------------------
17
25A
REPORTING OF ROYALTIES_________________________
21
26.
RIGHTS IN DATA - UNLIMITED---------------------
23
27.
MILITARY SECURITY REQUIREMENTS-----------------
24
28.
UTILIZATION OF SILL BUSINESS CONCERNS---------
25
29.
EXAMINATION OF RECORDS------------------------
25
30.
GRATUITIES--------------------------------------
26
31.
CONVICT LABOR----------------------------------
26
32.
NOTICE TO THE GOVERNMENT OF LABOR DISPUTES-----
26
33,
MATERIEL INSPECTION AND RECEIVING REPORT-------
26
34.
SUBCONTRACTS -----------------------------------
27
35.
SUBCONTRACTS----- ----
----------------------
21
36.
AIRCRAFT IN THE OPEN ---------------------------
27
37.
INSPECTION AND AUD IT--------------------------
28
38.
GOVERNIEIT::FURNISHED PROPERTY -------___________
28
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GEN L PROVISIONS
1. DEFINITIONS (ASPR 7103.1)
As used throughout this contract, the following terms shall have
the meanings set forth below:
(a) The term "Secretary" means the Secretary, or any Assistant
Secretary of the Department, and the head or any assistant head of the
Federal agency; and the term "his duly authorized representative" 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 at 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.
2. C} iNGES (ASPR 7-103.2)
The Contracting Officer may at any time, by a written order, and
without notice to the sureties, make changes, within the general scope
of this contract, in any one or more of the following; (i) Drawings,
designs, or specifications, where the supplies to be furnished are to
be specially manufactured for the Government in accordance therewith;
(ii) method of shipment or packing; and (iii) place of delivery. If
any such change causes an increase or decrease in the cost of, or the
time required for the performance of any aprt of the work under this
contract whether changed or not changed by any such order an equitable
adjustment shall be made in the contract ,rice or delivery schedule, or
both, and the contract shall b e modified in writing accordingly. Any
claim by the Contractor for adjustment under this clause must be asserted
within 60 days from the date of receipt by the Contractor of the noti-
fication of chage; PROVIDED, however, That the Contracting Officer, if
he decides that the facts justify such action, may receive and act
upon any such claim asserted at any time prior to final payment under
this contract. Where the cost of property made obsolete or excess
as result of a change is included in the Contractor's claim for
adjustment, the Contracting Officer shall have the right to presctibe
the manner of disposition of such property, Failure to agree to any
adjustment shall be a dispute concerning a question of fact within the
meaning of the clause of this contract entitled "Disputes" However,
nothing in this clause shall excuse the Contractor from proceeding with
the contract as changed.
BP or PR
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3. EXTRAS (ASPR 7-103.3)
Except as otherwise provided in this contract, no payment for extras
shall be made unless such extras and the price therefor have been
authorized in writing, by the Contracting Officer.
4. VARIATION IN QUANTITY
TJo variation in the qunAity of any item called for by this contract
will be accepted unless such variation has been caused by conditions of
loadinf, shipping, or packing, or allowances in manufacturing processes,
and then only to the extent, if any, specified elsewhere in this
contract.
5. INSPECTION (ASPR 7-105.5)
(a) all supplies (which term throughout this clause includes without
limitation raw materials, components, intermediate assemblise) and end
products) shall be subject to the inspection and test by the Government,
to the extent practicable at all tunes and places including the period
of manufacture, and in any event prior to acceptance.
(b) In case any supplies or lots of supplies are defective in
material or workmanship or otherwise not in conformity with the requireme is
of this contract, the Government shall have the right eith to reject
them (with or without instructions as to their (disposition) or to
require their correction. Supplies or lots of supplies which have been
rejected or required to be corrected shall be removed or, if permitted
or required by the Contracting Officer, corrected in place by and at
the expense of the Contractor promptly after notice, and shall not
thereafter be tendered for acceptance unless the former rejection or
requirement of correction is disclosed. If the Contractor fails promptly
to remove such supplies or lots of supplies which are required to be
removed, or promptly to replace or correct such supplies or lots of
supplies, the Government either 1(i) may by contract or otherwise replace
or correct such supplies and charge to the Contractor the cost occasioned
the Government thereby, or (ii) may terminate this contr^ct for default
as provided in the clause of this contract entitled "Default." Unless
the Contractor corrects or replaces such supplies within the delivery
schedule, the Contracting Officer may require the delivery of such supplies
at a reduction in price which is equitable under the circumstances. Fail-
ure to agree to such reduction of price shall be a dispute concerning a
question of fact within the meaning of the clause of this contract
entitled "Disputes."
(c) If any inspection or test is made by the Government on the premises
of the Contractor or a subcontractor, the Contractor without additional
charge shall provide all reasonable facilities and assistance for the
safety and convenience of the Government inspectors in the performance of
their duties. If Government inspection or test is made at a point other
than the premises of the Contractor or a subcontractor, it shall be at
the expense of the Government except as otherwise provided in this
FP or PR
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contract: PRCVIDED, That in case of rejection the Government shall not
be liable for any reduction in value of samples used in connection with
such inspection or test. All inspections and tests by the Government
shall be performed in such a manner as not to unduly delay the work.
The Government reserves the right to charge to the Contractor any additional
cost of Government inspection and test when supplies are not ready at the
time such inspection and test is requested by the Contractor or when rein-
spection or retest is necessitated by prior rejection. Acceptance or
rejection of the supplies shall'be made as promptly as practicable after
delivery, except as otherwise provided in this contract; but failure to
inspect and accept or reject supplies shall neither relieve the Contractor
from responsibility for such supplies as are not in accordance with the
contract requirements nor impose liability on the Government therefor.
(d) The inspection and test by the Government of any supplies or lots
thereof does not relieve the Contractor from any responsibility regarding
defects or other failures to:meet the contract requirements wh:; ch may be
discovered prior to acceptance. Except as otherwise provided in this
contract, acceptance shall be conclusive e.:cept as regards latent defects,
fraud, or such gross mistakes as amount to fraud.
(e) The Contractor shall provide and maintain an inspection system
acceptabel to the Government covering the supplies hereunder. Records of
all inspection work by the Contractor shall be kept complete and available
to the Government during the performance of this contract and for such
longer period as may be specified elsewhere in this contract.
6. RESPONSIBILITY FOR SUPPLIES (ASPR 7-103.6)
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 Government, 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 sup,.,lies after notice of
rejection, except that the Government shall be responsible for the loss,or
destruction of, or damage to the supplies only if such loss, destruction or
damage results from the gross negligence of officers, agents, or employees
of the Government acting within the scope of their employment.
7. PAYIIL NTS (ASPR 7-103-Y)
The Contractor shall be paid, upon the submission of proper invoices or
vouchers, the prices stipulated herein for supplies delivered and accepted
or services rendered and accepted, less deductions, if any, as herein
provided. Unless otherwise specified4i payment will be made on partial
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deliveries accepted by the Government when the amount due on such de-
liveries so warrants; or, when requested by the Contractor, payment for
accepted partial deliveries shall be made whenever such payment would
equal or exceed either :p1,000 or 50 percent of the total amount of
this contract.
8. ASSIGIL: EiNT OF CLAIMS (ASPR 7,-103.8)
(a) Pursuant to the provisions of the Assignment of Claims Act of
194O, as emended (31 U. S. Code 203, 41 U. S. Code 15) if this contract
provides for payments aggregating 81,000 or more, claims for monies due
or to become due the Contractor from the Government under this contract
may be assigned to a bank, trust company, or other financing institution,
including any Federal lending agency, and may thereafter be further
assigned and. re-assigned 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. Notwith-
standing any provisions of this contract, payments to an assignee of any
monies due or to become due under this contract shall not, to the extent
provided in said Act, as amended, be subject to reduction or set-off.
(b) In no event shall copies of this contract or of any plans,
specifications, or other similar documents relating to work under this
contract, if marked "Top Secret," "Secret," or "Confidential", be
furnished to any assignee of any claim arising under this contract or to
any other person not entitled to receive the same: PROVIDED, That a
copy of any part or all of this contract so marked may be furnished, or
any information contained therein may be disclosed, to such assignee upon
the -prior written authorization of the Contracting Officer
(c) The Contractor shall obtain the mitten authorization of the
Contracting Officer prier to the assignment of cny rights under this
contract.
9. ADDITIONAL BOND SECURITY (ASPR 7-103.9)
If any surety upon any bond furnished in connection with this contract
becomes unacceptable to the Government, or if any such surety fails to
furnish reports as to his financial condition from time to time as
requested by the Government, the Contractor shall promptly furnish such
additional security as may be required from time to time to protect the
interests of the Government and of persons supplying labor or materials
in the Prosecution of the work contemplated by this contract.
10. FEDERAL, STATE, AND LOCAL TI:XES (ASPR 11-L of . l)
(a) As used throughout this clause, the term "tax inclusive date" mean s
the date of negotiated contracts and the (late set for the opening of bids
for contracts entered into through formal advertising. As to additional
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supplies or services procured by modification to this contract, the term
"tax inclusive date" means the Cate of such modification.
(b) Except as may be otherwise provided in this contract, the
contract price includes all Federal, State, and local taxes and duties
in effect and applicable to the contract on the tax inclusive date, except
taxes,(other than Federal transpcrtation taxes) from which the Government,
the Contractor, or the tr'dnsrcti.ons or property covered by this contract
are then exempt. Unless spea.fihally excluded, duties are included in
the contract price, and, if freight is included in the contract price,
Federal transportation taxes are likewise included.
(c) (1) If the Contractor is required to pay or bear the burden
(1) of any tax or duty, which either was not to be included in the
contract price pursuant to the requirements of paragraph (b) or was
specifically excluded from the contract price by a provision of this
contract; or
(ii) of an increase in rate of any tax or duty, whether or not such
tax or duty was excluded from the contract price; or of any interest or
penalty thereon, the contract price shall be correspondingly increased;
PROVIDED, that the Contractor warrants in writing that no amount for such
tax, duty, or rate incrcnse was included in the contract price as a contin-
gency reserve or othc:erwise; and PROVIDED further that liability for such
tax, duty, rate increase, interest, or penalty tax,was not incurred through
the fault or negligence of the Contractor or its failure to follow instruc-
tions of the Contracting Officer.
(2) If the Contractor is not required to hay or bear the burder, or
obtains a refund or drawback, in whole or in part, of any tax, duty,
interest, or penalty which (i) was. to be included in the contract price
pursuant to the requirements of paragraph (b), (ii) was included in the
contract price, or (iii) was the baAis of an increase in the contract
price, the contract price shall be ccrrespondingly decreased or the amount
of such relief, refund, or drawback shall'be paid to the Government, as
directed by the Contracting Officer. The contract price also shall be
correspondingly decreased if the Contractor, through its fault or negli-
gence or its failure to follow instructions of the Contracting Officer,is
required to pay or bear the burden, or does not obtain a refund or draw-
back of any such tax, duty, interest, or penalty. Interest paid or credited
to the Contractor incident to a refund of taxes shall inure to the benefit
of the Government to the extent that such interest was earned after the
Contractor was paid or reimbursed by the Government for such taxes.
(3) Invoices or vouchers covering any adjustment of the contract price
pursuant to this paragraph (c) shall set forth the amount thereof as a
separate item and shall identify the particular tax involved.
(Li) Nothing in this paragraph,(c) shall be applicable to social
security taxes; net income taxes; excess profit taxes; capital stock taxes;
Federal transportation taxes, except changes in the rate thereof, in-
cluding repeal; pertaininp, to shipments from the Contractor to the
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Government; unemployment compensation taxes; or any State and local
taxes, except those levied on or measured by the dontract or sales price
of the services or completed supplies furnished under this contract,
including gross income taxes, gross receipts taxes, sales and use taxes,
excise taxes, or franchise or occupation taxes measured by soles or
receipts from sales.
(5) No adjustment of leas than $$lpO shall be made in the contract
price pursuant to this paragraph.
(d) Unless there does not exist any reasonable basis to sustain an
exemption, the Government agrees upon request of the Contractor, without
further liability except as otherwise provided in this contract to
furnish evidence appropriate to establish exemption from (i) any Federal
tax, which the Contractor warrants in writing was excluded from the
contract price, or (ii) any State or local tax; PROVIDED that evidence
appropriate to establish exemption from duties will be furnished, and
Government bills of lading will be issued only at the discretion of the
Contracting Officer. In addition, the Contracting Officer may furnish
evidence appropriate to establish exemption from any tax that may,
pursuant to this clause, give rise to either an increase or decrease in
the contract price.
(e) (1) The Contractor shall promptly notify the Contracting Officer
of all matters pertaining to Federal, State, and local taxes and duties
that reasonably may result in either an increase or decrease in the
contract price.
(2) Whenever an increase or decrease in the contract price may be
required under this clause, the Contractor shall take action as directed
by the Contracting Officer, and the contract price shall be equitably
adjusted to cover the costs of such action, including any interest, pen-
alty, and reasonable attorneyts fees.
11. DEFAULT (ASPR 7,103.11)
(a) The Government may, subject to the previsions of paragraph (c)
below, by written notice of default to the Contractor, terminate the
whole or any part of this contract in any one of the following circum-
stances:
J.]_(i)If the Contractor fails to make delivery of the supplies or to
perform the services within the time specified herein or any extension
thereof; or
(ii) if the Contractor fails to perform any of the other provisions
of this contract, or so fails to make progress as to endanger perfo2~mance
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.
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N In the event the Government terminates this contract in whole or
in part as provided in paragraph (a) of this clause, the Government may
procure, upon such terms and in such manner as the Contracting Officer
may deem appropriate, supplies or services similar to those so terminated,
and the Contractor shall be liable to the Government for any excess
costs for such similar supplies or services: PROVIDED, That the Con-
tractor shall continue the performance, of this contract to the extent
not terminated under the provisions of this clause.
(c) Except with respect to defaults of subcontractors, the Con-
tractor shall not be liable for any excess costs if the failure to
perform the contract arises out of causes beyonc', 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 u
unusually severe weather; but in dvery case the"failure to perform must
be beyond the control and without the fault or negligence of the
Contractor. If the failure to"perform is caused by the default of a
subcontractor, and if such default arises out of causes beyond the control
of both the Contractor and subcontractor, and without the fault or
negligence of either of them, the Contractor shall not be liable for any
excess costs for failure to perform, unless the supplies or dervices to
be furnished by the subcontractor were obtainable from other sources in
sufficient time to permit the Contractor to meet the required delivery
schedule.
(c?) If this 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 &:vernment, 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 (herein-
after called "manufacturing materials") as the Contractor has specifi-
cally produced or specifically acquired for the performance of such part
of this contract as has been terminated; and the Contractor shall, upon
direction of the Contracting Officer, protect and preserve property in
possession of the Contractor in which the Government has an interest,
Payment for completed supplies delivered to and accepted by the Government
shall be at the contract price. Payment for manufacturing materials
delivered to and accepted by the Government and for the protection and
preservation of property shall be in an amount agreed upon by the Con-
tractor and Contracting Officer; failure to agree to such amount shall be
a dispute concerning a question of fact within the meaning of the clause
of this contract entitled "Disputes."
(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 or subcontractor pur-
suant to to-the provisions of paragraph (c) of this clause, such notice of
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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 exclusi re ,ahd are in addition to any other rights
and remedies provided by law or under this c ontr,-.ct.
12. DISPUTES (ASPR 7-103,12)
(a) Except as otherwise provided in this contract, any dispute
concerning a question of fact arising under this contract which is not
disposed of by agreement shall be decided by the Contracting Officer,
who shall reduce his decision to writing and mail or otherwise furnish
a copy thereof to the Contractor. The decision of the Contracting 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 aj;ieal 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 fiath, or not supported by substantial evidence. 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 performance of the contract and in
accordance with the Contracting Offiger's decision.
(b) This "Disputes" clause does not preclude consideration of law
questions in connection with decisions provided for in paragraph (a) above:
PROVIDID,'..That_.nothing in this contract shall be construed as making final
the decision of any administrative official, rppresentative, or board
on a question of law.
13. SOVIET CONTROLLED AREAS (ASPR 6-103)
(a) The Contractor shall not acquire for use in the performance
of this contract any supplies or services originating- from sources within
Soviet-controlled areas, as listed in the Schedule of this contract, or
from Hong Kong or Macao, without the written approval of the Contracting
Officer.
(b) The Contractor agrees to insert the provisions of this clause,
including the Soviet-controlled areas listed in the Schedule and this
subparagraph (b), in all subcontracts hereunder.
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14. EIGHT-HOUR LAP OF 1912 (ASPR .2-303.1)
This contract, to the extent that it is of a character specified in
the Eight-Hour Law of 1912 as amended .(1.0 U. S. Code 321-326) and is not
covered by the Walsh-Healy 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,, Ad to all other provisions and exceptions
of sod Law:
No laborer or mechanic doing any part of the work comtemplated by
this contract, in the employ of the Contractor or any subcontractor con-
tracting for any part of the said work contemplated, 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 laborer and mechanic employed by the Contractor or
any suL)contrcctor 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 b~.sic rate of pay. For each violation of the requirements of this
clause a penalty of five dollars shall be imposed for each 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 imosed shall be withheld for the use and benefit of the Government.
15. 11ALSH-HE: LY PUBLIC CONTRACTS AGT (ASPR 12-604 mod)
If this contract is for the manufacture of furnished of materials,
supplies, articles or equipment in an amount which exceeds or may exceed
;10,000 and is otherwise subject to the Walsh-Healey Public Contracts
Act, as amended (41 U. S. Code 35-45), there are hereby incorporated
by reference all representations and stipulations required by said Act
and regulations issued thereunder by the Secretary of Labor, such
representations and stipulations being subject to all applicable rulings
and interpretations of the Secretary of Labor which are now or may
hereafter be in effect, "except that the Contractor shall not be required
to include this clause in subcontracts issued hereunder when the
inclusion of this clause in a subcontract would jeopardize or conflict
with the security considerations established in connection with this contract.
16. NONDISCRDiAll[IATION IN E:IPLOYIIENT (ASPR 12-802 mod)
(a) In connection with the performance of work under this contract 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:
employment, upgrading, demotion/or transfer; recruitment or recruitment
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advertising, layoff or termination; rates of pay or other forms of
compensation; and selection for training, incluaing apprenticeship.
The Contractor agrees to post hereafter in conspicuour places, available
for employees and applicants for employment, notices to be provided
by the Contracting Officer setting forth the provisions of the
nondiscrimination clause.
(b) The Contractor further agrees to insert the foregoing provision
in all subcontracts hereunder, cxce;t subcontracts for standard com-
mercial supplies or raw materials,"and except as insertion of the fore-
goinV provision in a subcontract would jeopardize or conflict with the
security considerations established in connection with this contract."
17. OFFICIALS NOT TO BENEFIT (AASPR 7-103.19)
No member of or delegate to Congress or resident commissic:ner, 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 mead with a corporation for its general benefit.
18. COVENANT AGAINST CONTINGENT FEES (ASPR 7103.20 )
The Contractor warrants that no person or selling agency has been
employed or retained to solicit or cecurc 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 sellinf agencies maintained by the Contractor for the purpose of
securing business. For breach or violation of this warranty the Government
shall have the rir-ht 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 commission, percentage, brokerage, or
contingent fee.
19. TFR:AI"?d.iTION FOR CON1TE1dIENCE OF THE GOVERNMENT (ASPR 8-701)
(a) The performance of work under this contract may be terminated by
the Government in accordance with t his clause in whole, or from time to
time in p-rt, 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
cf Termination specifying the extent to which performance of work under
the contract is terminated, and the date upon which such termination be-
comes effective.
(b) After receipt of a Notice of Termination, and except as other-
wise directed by the Contracting Officer, the Contractor shall (1) stop
work under the contract on the date and to the extent specified in the
Notice of Termination; (2) place no further orders or subcontracts for
materials, services, or facilities except as may be necessary for completion
of such portion of the work under the contract as is not terminated;
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(3) terminate all orders and subcontracts to the extent that they relate
to ther performance of work terminated by the Notice of Termination;
(L) assign to the Govcrnment,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 ari;sine out of the termination of such
orders and subcontract; (5) 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 ap>roval , or ratification shall be final for all
the purposes of this clause; (6) transfer titled and deliver to the Govern-
ment, in the manner, at the times, and to the extent, if any, directed by
the Contracting Officer, (i) 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 (ii) the completed or partially completed
plans, drewings, information, and other property which, if the contract had
been completed, would have been required to be furnished to the Government;
(7) use its best efforts to sell, in the manner, at the times, to the
extent, and at the price or prices directed or authorized by the Contracting
Officer, any property of the types referred to in provision (6) of this
paragraph, PROVIDED, however, that the Contract (i) shall not be required
to extend credit to any purchaser, and (ii) may acquire any such
property under the conditi;ns 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 t4c price or cost of the work covered by
this contract or paidl in such other manner as the Contracting Officer may
direct; (8) complete performance of such part of the work as shall not have
been terminated by the 'Notice of Termination; and (9) take such action as
may be necessary, or as the Contracting Officer may direct, for the pro-
tection and ;reservation 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 Procurement
Regulation, as it may be amended from time to time, the Contractor may
submit to the Contracting- Officer a list, certified as to quantity and
quality, of any or all items of termination inventory not previously dis-
posed 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 anc, 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 its termination claim, in the form and
with the certification prescribed by the Contracting Officer. Such claim
shall be submitted promptly but in no event later than two years from the
effective sate of termination.. unless one or metre extensions in writing
are granted by the Contracting Officer, upon request of the Contractor
mace in writing within such two-year period or authorized extension thereof.
However, if the Contracting Office determines that the facts justify
such action, he may receive and act upon any such termination claim at any
time after such two-year peiod or any extension thereof. Upon failure
of the Contractor to submit its termination claim within-the time allowed,
the Contracting Officer may determine, on the basis of information
available to him, the amount, if any., clue to the Contractor by reason of
the termination and shall thereupon pay to the Contractor the amount so
determined,
(d) Subject to the pr ovis; ons of paragraph (c), the Contractor and
the Contracting Officer may agree upon the whole or any part of the amount
or amounts to be paid to the Contractor by reason of the total or partial
terminati n of work pursuant to this clause, which amount or amounts
may include a reasonable allowance for profit on work done. The contract
shall be amended accordingly, and te Contractor shall be paid the agreed
amount. Nothing in paragraph (e) of' this clause, prescribing the amount
to be paid to 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).
~c) 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 Ccntractor by reason of the termination of work pursuant to
this clause the Contracting Officer shall determine, on the basis of in-
formation 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:
(1) For completed supplies accepted by the Government (or sold or
acquired as provided in paragraph (b) (7) 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, appropri-
ately adjusted for any saving of freight or other charges;
k2) The total of--
(i) 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) (1) hereof;
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(ii) The cost of settling and paying; claims arising out of the
termination of work under subcontracts or orders, as provided in
paragraph (b) (5) above, which are properly chargeable to the terminated
portion of the contract (exclusive of amounts paid or payable on account
of supplies or materials delive^ed 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 (i) above).
(iii) A sum equal to 2% of that part of the amount determined under
(i) which represents the cost of articles and materials not processed by
the Contractor, plus a sum equal to 8% of the remainder of such amount
but the aggregate of such sums shall not exceed 6% of the amount determined
under subdivision (i) above, which amount for the purpose of this sub-
division (iii) shall exclude any charges for interest on borrowings;
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 (iii) and an appropri-
ate adjustment shall be made reducing the amount of the settlement to
reflect the indicated rate of loss.`
(3) The re-sona.hle costs of settlement including accounting, legal,
clerical, and other expenses reascr ble 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 sub-
contracts 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 tha Contractor under (1) and (2) 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 ayable to the Con-
tractor as provided in paragraph (e) (1) and paragraph e) (2) (i), 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)(7).
(f) Any determination of costs under paragraph (c) or (e) hereof shall
be governed by the Statement of Principles for Consideration of Costs set
forth in Part 4 of Section VIII 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
ContrectinF Officer under paragraphs (c) or (e) above, except that if the
Contractor has failed to submit its claim within the time provided in
paragraph (c) above and has failed to request extension of such time, he
shall have no such right of appeal. In any case where the Contracting
Officer has made a determination of the amount due under paragraph (c) or (e)
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above, the Government shall pay to the Contractor the following: (i) if
there is no right of app>oal hercund.or or if no timely appeal has been
taken, the amount so determined by the Contracting Officer, or (ii)
if an appeal h-_s 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 (1) all unliquidated advance or other unliquidated
payments on account theretofore made to the Contractor, (2) any ciAim
which the Government may have against the Contractor in connection with
this contract, and (3) 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 re-
covered by or credited to the Government.
(i) If the termination hereunder be partial, prior to the settlement
of the terminated portion of this contract, the Contractor may file with
the 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 prescri'bei make partial payments and payments on
account a?ai_nst costs incurred by the Contractor in connection with the
terminated portion of this contract whenever in the opinion of the Con-
tracting Officer the aggregate of such payments shall be within the amount
to which the Contractor will be entitled hereunder. If the total of
such payments is in excess of the amount finally agreed or determined to
be due under this clause, such excess shall be payable by the Contractor to
the Government upon demand, together with interest computed at the rate of
61-61 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 Govern-
ment; provided, however, that no interest shall be charged with respect to any
such excess payment attributable to a reduction in the Contractor's claim
by reason of retention or other disposition of termination inventory until
ten days after the date of such retention or disposition.
(k) Unless otherwise provided for in this contract, or by applicable
statute, the Contractor, from the effective date of termination and for
a period of six years after final settlement under this contract, shall
preserve and make available to the Government at all reasonable times at
the office of the Contractor but without direct charge to the Government,
all its books, records, documents, ?nd. other evic'ence bearing on the costs
and expenses of the Contractor under this contract and relating to the
work terminated hcreunc'.er, or, to the extent approved by the Contracting
Officer, photographs, micro-photographs, or other authentic reproductions
thereof.
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20. AUTHORIZATION AND CONSENT (I,SPR 9-102.1)
The Government hereby gives its authorization and consent (without
prejudice to its rights of ir4demnification, if such rights are provided
for in this contract) for all use and manufacture, in the performance of
this contract or any part hereof or any amendment hereto or any subcontract
hereunder (including any lower-tier subcontract), of any patented invention
(i) embodies in the structure or composition of any article the delivery
of which is accepted by the Government under this contract, or (ii)
utilized in the machinery, tools, or methods the use of which necessarily
results from compliance by the Contractor or the using subcontractor with
(a) specificstions or written provisions now or hereafter forming a part
of this contract, or (b) specific written instructions given by the
Contracting Officer directing the minner of performance. The Contractor's
entire liability to the Govurnmer}t for patent infringement shall be
determined solely by the provisions of the indemnity clause, if any,
included in the contract and the Government assumes liability for all other
infringement to the extent of the authorization and consent hereinabove
granted.
21. NOTICE , ND ASSIST.:NCE REGARDING PATENT I"1FRIING 4ENT (ASPR 9-1011)
The provisions of this clause shall be applicable only if the amount
of this contract is in excess of 0.,000.
(a) The Contractor shall report to the Contracting Officer, promptly
and in reasonable written detail, each notice or claim of patent infringe-
ment based on the performance of this contract of which the Contractor
has knowledge.
(b) In the event of litigation against the Government on account of
any claim of patent infringementsarising out of the performance of this
contract or out of the use of any supplies furnished or work or services
performed hereunder, the Contractor shall furnish to the Government, upon
request, all evidence and information in possession of the Contractor
pertaining to such litigation. Such evidence and information shall be
furnished at the expense of the Government except in those cases in which
the Contractor has agreed to indemnify the Government against the claim
being asserted.
22. BUY AAMRICAN ACT (ASPR 6-104.5)
(a) Li acquiring end products, the Buy American Act (41 U. S. Code
10 a-d) provides that the Government give preference to domestic source
end products. For the purpose of this clause:
(i) neomponents" means those articles, materials;-and supplies; a3hich
are-directly incorporated in the end products;
(ii) "end products" means those articles, matt:rials, and supplies,
which are to U: acquired under this contract for public;and
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a "domestic source end -product" means (20 an vn:rarlu_'actLred
end pruducti: which has bean miner', or produced in the United. State. s and
an end product manufactured in the United States if the cost of the
coioponoats thereof which are mined, produced, or mmiufncturod in the
United States exceeds 50 percent of the cost of all its components. For
,he p, noses of this (a) (ia.i) (B), components of foreign origin cf the same
t:,'ppe or kind as the products referred to in (b) (ii) or (iii) of this
clause shall be treater, as components mined, produced, or manufactured in
the United States,
(b) 17he Contractor agrees that there will be delivered under this
contract only domestic source en products, except end products:
(i) which are for use outside the United States;
(ii) which the Government determines are not mined, ~roduce.d, or
manufactured in the United States in sufficient and reascnayjy available
commercial quantities and of a satisfactory quality;
(iii) as to which the Secretary determines the domestic prefcrence
to be inconsiotent with the public interest; or
(iv) as to which the Secretary determines the cost to the
Government to be unreasonable.
23. FILING OF _,.TENT APPLICATIONS (t SPR 9-106)
(a) Before filing or causing to be file,', a patent application disclosing
any subject matter of this contract, which subject matter is classified
1i U
"Sedret" or higher, the Contractor shall, citing the thi ty (3() 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
regualtions; and the Contractor shall observe any instructions of the Ccn-
tracting: Officer with r espect to the manner of delivery of the latent
application to the U. S, Patent Officer for filing, but the Contractor
shall not be denied the right to file such patent application. If the
Contracting Officer shall not have ?iven any such instructions within
thirty (30) days from the date of mailing or other transmittal cf the
proposed application, the Contractor may file the applicationq
(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 sifbject matter of this c cntract, 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 iss.zance of a patent
should be otherwise delayed under pertinent statutes or regulations,
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(c) In filing any -,.-tent a,,,.;)11-cation coming within the scope of
the?s clause, the Contractor shall observe all applicable security
regulations covering the transmission of classified subject natter.
c.`L1.. PATENT RIGHTS (ASPR 9-107.1)
(a) As used in this clause, the fo7low4in?' terms shall have the :leanings
set forth Lelcw:
(i) The term "subject Invention" means by invention, improvement,
or discovery (whether or not patenable) conceived or first actually
reduced to practice either
(A) in the performance of the experimental, development,.ol, 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 contr.:.ct would be awarded;
PR0UJDF) that the term "Subject Invention" shall not include any invention
which is specifically identified and listed, in the Schedule for the
purpose of Eexeluc:ing' it from the license [-grantee by this Clouse.
(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 set forth in (g), (h), and (i)
below) who, by reason of the nature of his duties in connection with the
performance of this contract, would reasonably be expected to make inventions.
(iii) The terms "subcontract" and "subcontractor" mean any subcontract
or subcontractor of the Contractor, and any lower-tier subcontract or
subcontractor under this cc:untracte
(b)(1) The Contractor agrees to and does hereby gr,nt to the
Government irrevocable, nonexclusive, nontronsfcrablc, 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, anc' in
the use of any method. No license granted herein shall convey any right
to the Government to manufacture, have manufactured, or use any Subject
Invention for the purpose of providing services or sup:.,lies to the generAl
public in competition with the Contractor or the Contractor's commercial
licenses in the license fiefs.
(2) With respect to:
(i) any Shhbject Invention made by other than Technical Personnel;
(ii) any Subject Invention conceived prior to, but first actually
reduced to practice in the course of, any of the experimental, developmental,
or research work specified in (a) (i) above; and
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(iii) the practice of any Subject Invention in foreign cotztitries;
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 tights 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 ether
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 Invention together with a written state-
ment 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 to final settlement of this contract, a final report
listing all such Inventions including all those previously listed in
interim reports.
(d) In connection with each Subject Invention referred to in
(c)(i) above, the Contractor shall do the following:
(i) if the Contractor specifies that a United States patent
application claiming such Invention will-be filed, the Contractor shall
file or cause to be filed such application in due form and time; however,
if the Contractor, after having specified that such an application would
be filed, decides not to file or cause to be filed said application, the
Contractor shall so notify the Contracting Officer at the earliest practica-
ble date and in any event not later than eight months after first publica-
tion, public use or sale.
(ii) if the Contractor specifies that a United States patent appli-
cation 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 comtemplated publication by
the Contractor, stating the date and identity of such publication or
comtemplated publication; and
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(B) convey to the Government the Contractor Is entire right, title, and
interest in such invention by cellivcrjng to the Contracting Officer upon
written request such duly executed instruments (prepared by the Government)
of assignment end application, and such other papers as are deemed
necessary to vest in the Government the Ccntractcrfs right, title., and
interest aforesaid, an('_ the r if-ht to apply for and prosecute patent
a pplications covering such Invention thr_:ugghcut the world', subject, hc.ow-
ever, to the right o_? the Contractor specified in (e) below to file
foreign applications, and subject further to the reservation of a non-
exclusive and royalty-free license to the Contractor (end to its
existing and future associated and affiliated companies, if any, within
the corporate structure of which the Contractor is a part) which license
shall be assignable to the successor of that part of the Cuntra.ctor's
business to which such Invention ertains;
(iii) the Contractor shall furnish promptly to the Contracting Of_"icer
on requures an irrevocable power of attorney to inspect anc. make copies of
each Unites' 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 Govern:n_ent
deriving rights from the Contractor, elects not to continue prosecution of
any such United States patent application filed by or on behalf of the
Contractor, the Contractor shall so notify the Contracting Officer not less
than sixty days before the expiration of the response period and, u,oon
written request, deliver to the Contracting Officer such duly executed
instruments (prepared by the Government) as arc deemed necessary to vest
in the Government the Contractor's entire right, title, and interest in
such Invention and the ap licati.on, subject to the reservation as
specified in (') (ii) above; and
(v) the Contractor shall deliver to the Contracting Officer duly
executes' 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 have the exclusive rf_ghts to file
applications on Subject Inventions in each foreign country within:
(i) nine mc;nths from the sate a correspon~'_ing 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 Gontractor,shali, 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
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reservation of a non-ex&lusive and royalty-free license to the Contractor
together with the right of the Contractor to grant sublicenses, which
license and right shall be assignable to the Ruccessor of that part of
the Contractorts 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 sue in accordance with any i tet m 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 the usand dollars ($,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
such amount, or five thousand dollars ($5,000), whichever is less, shall
have b,-en 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 Inventicns 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 re-
ports or are otherwise known to be unreported; and
(iii) the information as to any subcontractor required by fh) below.
The max -mum amount which may be withheld under this paragraph (f) shall
not exceed ten percent (10%) of the amount of this contract or five
thousand ; collars 05,000), 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 t,_: enforce compliance with the patent provisions of a sub-
contract.
(?-) The Contractor shall exert all reasonable effort in negotiating
for the inclusion of this Patent Rights clause in any subcontract hereunder
of three thousand dollars ($3,000) or more having experimental, developmen-
tal, or research work as one of its purposes. In the event of refusal
by a subcontractor to accept the Patent Rights clause, the Contractor shalt
not proceed with the subcontract without written authorization of the
Contracting Officer, and upon obtaining such authorization, shall cooperate
with the Government in the negotiation with such subcontractor of an
acceptable patent rights clause; PROVIDED, however, that the Contractor
shall in any event require the subcontractor to grant to the Government
patent rights under Subject Inventions of no less scope and on no less
favorable terms than those which the Contractor has under such subcontracts,
except that in no event shall the subcontractor be required to grant to the
Government patent rights in excess of those herein agreed to be granted to
the Government by the Contractor.
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(h) The Contractor shall, at the earliest practicable date, notify
the Contracting Officer in writing of any subcontract containing a patent
rights clause, furnish the Contracting Officer a copy of such clause, and
notify the Contracting Officer when such subcontract is completed. It is
understood that with respect to such subcontract clause, the Government
is a third party beneficiary, amd the Contractor hereby assigns to the
Government all the rights that the Contractor would have to enforce the
oubcontractcr's obligations for the benefit of the Government with respect
to Subject Inventions. The Contractor shall not be obl ated to enforce
,he agreements of any subcontractor hereunder relating to Subject Inventions.
(1) wheh the Contractor shows that it has been delated in the
performance of this contract by reason of its inability to obtain in
acrj^dance with (g) above a suitable patent rights clause from a qualified
s:~,:ontractor for any item or service required under this contract for
w:~!.ch the Contractor itself does not have available facilities or qualified
person:tel, the Contractor's delivery dates shall be extended for a period
of tine equal to the duration of such delay; and, upon request of the
Contractor, the Contracting Officer shall determine to what extent, if any,
an additional extension of the delivery dates and an increase in contract
prices based upon additiQiial costs incurred by such delay are proper under
the circumstances; and the contract shallbe modified accordingly. If
the Contractor, after exerting all reasonable effort, is unable to obtain
a qualified subcontractor as set forth above, the Contractor may submit
to the Contracting Officer a written request for waiver or modification
of the requirement that a suitable patent rights clause be included in the
oubcontract.
Such request shall specifically state that the Contractor has used
all reasonable effort to obtain such qualified subcontractor, and shall
cite the waiver or termination provision hereinafter set forth. If,
within thirty-give (35) days after the date of receipt of such request
for a waiver or modification of said requirement, the Contracting efficer
:-'fall fail to deny in writing such request, the requirement shall be
deemed to have been waived by the Government. If within such period the
C~.,Ztractor shall receive a written denial of such request by the Contracting
0-cficer, this contract shall thereupon automatically terminate and the
rights and obligations of the parties shall be governed by the provisions
of the clause of this contract providing for termination for the convenience
of the Government.
25. REPORTING OF ROYALTIES (ASPR 9-110 mod.)
The provisions of this clause shall be applicable only if the amount
of the contract is in excess of $501000.
(a) The Contractor shall report in writing (in quadruplicate) to
the Contracting Officer as soon as practicable after execution of this
contract whether or not any royalties in excess of $250 have been paid or
are to be paid by the Contractor directly to any person or firm in connection
with the performance of this contract. If royalties in excess of $250 have
been paid or are to be paid to any person or firm, the report shall include
the following items of information with respect to such royalties (including
the initial $250)
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(1) The name and address of each licensor to whom royalties in excess
of X250 have been paid or are to be paid,
42) The patent numbers, patent application serial numbers (with
filing dates), or other identification of the basis for such royalties,
(3) The manner of computing the royalties consisting of (i) a
brief identification of each royalty-bearing unit or process, (ii) the
L\>tal amount of royalties, and (iii) the percentage rate or dollars and
cents amount of royalties on each such unit or process; PROVIDED, that
if the royalties cannot be computed in terms of units or dollars and
cents value, then other data showing the manner in which the Contractor
comoitt,es the royalties.
(b) In lieu of furnishing a report under paragraph Wa), the Con-
1-actor may furnish a single, consolidated report for each accounting
eeried of the Contractor during which the Contractor has contracts with
the u-cvernment, provided the Contractor has requested and obtained the
prior written approval of the Such consolidated report
shall be furnished, when the furnishing thereof has been approved, in
the nu.,iber of copies as approved, as soon as practicable after the closb
of the accounting period covered by the report. Such consolidated report
shall be made in accordance with Contractor's established accounting practice
and shall include, for the accounting period, the total amount of royalties
accruing to each licensor at a rate in excess of w1,000 per annum on the
Contractor's over-all bi}siness, together with (i) the name and address
of each such licensor, `ii) the patent numbers, patent application serial
numbers (with filing dates), or other identification of the basis for such
royalties, (iii) a brief description of the subject matter of the license
under which royalties are charged, (iv) the percentage rate or unit amount,
or if the royalties do not accrue by rate or unit amount, such other data
cowing the manner by which the royalties accrue to licensor, and (v) an
estimate or approximation (without detailed accounting) of the portion
of such royalties that may be attributable to Government contracts. The
Contractor shall, if requested by the Government, furnish at Government
expense a more detailed allocation of such royalty payments attributable
t,_ Government contracts.
(c) In the event that the Contractor requests written approval to
furnish consolidated reports under paragraph (b) above, the Contracting
Officer shall promptly consider the request and furnish to the Contractor
a letter stating whether or not the request is approved and, notwithstanding
any; such approval, the Contracting Officer shall have the right to question
any such subsequently furnished report as to accuracy or completeness of
data and ask for additional information, The Contractor shall furnish a
copy of such letter of approval to the Contracting Officer administering
this contract.
(d) After payment of eighty percent (80%) of the amount of this
contract, as from time to time amended, further payment, shall be withheld
until a reserve of either (i) ten percent (1001) of such amount or (ii)
>5 OOO, whichever is less, shall have been set aside, such reserve or the
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balance thereof to be retained until the Contractor shall have furnished
to the Contracting Officer they report called for by paragraph (a)hereof
or the copy of the letter approving the Contractor1s request to furnish
the report under paragraph (b); PROVIDED, that no amount shall continue
to be withheld from payment fer the causes specified in the paragraph (d)
if the Contracting Officer shqLl1 find that the Contractor has not been
furnished a letter as requiired by paragraph (c) within a reasonable time
after making written request to submit a singles consolidated report under
the provisions of paragraph (S) of this clause; and PROVIDED further that
the Contracting Officer may, n his discretion, order payment to be with-
held in th amount and manner`abq e provided if the report called for by
paragraph (a) is unsatisfactory or if the report called for by paragraph
(b) is due but has not been received, or if received, is found to be
unsatisfactory. No amount shall ~e withheld under this paragraph when
the minimum amount specified by this paragraph is being withheld under
other provisions of this contract. The withhblding of any amount or
subsequent payment thereof to the Contractor shall not be construed as a
waiver of any right accruing to 4he Government under this contract.
26. RIGHTS IN DATA - UNLIMITED (4SPR 9-203.1)
(a) The term "Subject Data"'-as used herein includes writings, sound
recordings, pictorial reproductiois, drawings or other graphical repre-
sentations, and works of any simi. .ar 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.
(b) Subject to the proviso of (c) below, the Government may duplicate,
use, and disclose in any manner and for any purpose whatsoever, and have
others so do, all Subject Date delivered under this contract.
(c) 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, non-exclusive and irrevocable license
throughout the world, to publish, translate, reproduce, deliver, perform,
dispose of, and to authorize others so to do, all Subject Data now or
hereafter covered by copyright; PROVIDED that with respect to such Subject
Data not originated in the performance of this contract but which is incor-
porated in the work furnished under t his contract such license shall be
only to the extent that the Contractor, its employees, or any individual or
concern specifically employed or assigned by the Contractor to originate and
prepare such Data under this contract, now has, or prior to completion or
final settlement of this contract may acquire, the right to grant such
license without becoming liable to pay compensation to tothers solely
because of such grant.
(d) The Contractor shall exert all reasonable effort to advise the
Contracting Officer, at the time of delivery of the Subject Date furnished
under this contract, of all invasions of the right of privacy contained
therein and of all portions of such Data copied from work not composed or
produced in the performance of this contract and not licensed under this
clause.
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(e) The Contractor shall report to the Contracting Officer, promptly
and in reasonable written detail, each notice or claim of copyright
infringement received by the Contractor with respect to all Subject
Data delivered wider this contract.
(f) 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.
(g) The Contractor shall not affix any restrictive markings upon
any Subject Dats, and if such markings are affixed, the Government shall
.have the right at any time to modify, remove, obliterate or ignore any
such marking.
27. MILITARY SECURITY REQUIREIENTS (ASPR 7-104.12)
(a) The provisions of this clause shall apply to the extent that this
contract involves access to security information classified "Confidential"
including "Condidential--Noda.:fied Handling Authorized" or higher.
(b) The Government shall notify the Contractor of the security
classifcation of this contract and the elements thereof, and of any
subsequent revisions in such security classification, by the use of a
Security Requirements Check List (DD Form 254).
(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 safe-
guard all classified elements of tt}is contract and shall provide and
maintain a system of security controls within its own organization in
accordance with the requirements off:
(i) the Security Agreement (DD Form 441), including the Department of
Defense industrial Security Manual for Safeguarding Classified :fnformation
as in effect on date of this contract, and any modification to the
Security Agreement for the purpose of adapting the Manual to the Con-
tractor's business; and
(ii) any amendments to laid 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 havisig security cog-
nizance over the facility and representatives of the contracting Military
Department shall have the right to inspect at reasonable intervals the
procedures, methods, and facilites utilized by the Contractor in complying
with the security requirements under this contract. Should the Government,
through its authorized representative, determine that the Contractor has not
complied with such requirements, the Government shall inform the Contractor
in writing of the proper actions to be taken in order to effect compliance
with such requirements.
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(e) If, subsequent to the date of this contract, the security
classification or regtiirements under this contract are changed by the
r-cvernment 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 security information, provisions which
shall conform substantially to the language of this clause, including this
paragraph (f) but excluding the last sentence of paragraph (e) of this
ca:~SO.
(g) The Contractor also agrees that it shall determine that any
imbcontrator propsed by it for the furnishing of supplies and services
which will involve access to classified information in the ContractorTs
;;ttsi:o.T has been granted an appropriate facility security clearance, which
is st.'yl in effect, prior to being accorded access to such classified
inforrtation.
28. UTILIZATION CF SIiALL BUSINESS CONCERNS (ASPR 7-1o4o- 4)
Xa.) It is the policy of the Government as declared by the Congress
that a fair proportion of the purchases and contracts for supplies and
sorv,-;es for the Government be placed with small business concerns,
('o) The Contractor agrees to accomplish the maximum amount of subcon-
tracting to small business concerns that the Contractcr finds to be
consisten? with the effici nt performance of this contract.
29, EMINATION OF RECORDS (ASPR 7-1011..15 mod.)
(a) The Contractor agrees that the Contracting Officer or any of
...his duly authorized representatives shall, until the expiration of three
gars after final payment under this contract, have access to and the right
to examine any directly pertinent books, documents, papers and records of
Contractor involving transactions related to this contract.
k-ha (b) The Contractor further agrees to include in all his subcontracts
hereunder a provision to the effect that the subcontractor agrees that
the Contracting Officer or any of his duly authorized representatives shall,
until the expiration of three years after final payment under the sub-
contract; have access to and the right to examine any directly pertinent
books, documents, papers, and records of such subcontractor involving
transact ions related to the subcontract. The term "subcontract" as used
in this clause excludes (i) purchase orders not exceeding X1,000 and
(ii) su';contracts or purchase orders for public utility services at
rates established for uniform applicability to the general public.
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304 GRATUITIES (ASPR 7-104.16)
(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 f'.cts upon which the Secretary or
his da.ly 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.
3:'_. CONVICT LABOR (ASPR 7--104.17)
In connection with the performance of work under this contract,
the Contractor agrees not to employ any person undergoing sentence of
imprisonment at hard labor.
32. NOTICE TO THE GOVERN''IENT OF LABOR DISPUTES-(ASPR 7-105.3)
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.
33. MATERIEL IdSPECTION AND RECEIVING REPORT (ASPR 7-105.7)
At the time of each delivery under this contract the Contr2ctor shall
prepare and furnish to the Government, in the manner and to the extent
required by the Contracting Officer, a Materiel Inspection and Receiving
Report (DD Form 250 or comparable form). The government shall furnish
the required forms to the Contractor upon request.
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34. SUBCONTRACTS (AFPI 7-4030)
No contract shall be made by the contractor with any other party
for furnishing any of the completed or substantially completed articles,
spare parts, or work, herein contracted for, without written approval
of the Contracting Officer as to sources.
35. SUBCOi1TRaCTS (AFPI 7-4x42)
If this contract provides for price redermination, the following
additional provisions shall apply to subcontracts:
(a) The Contractor shall give specific advance notification to
the Contracting Officer of any proposed subcontract hereunder which (1)
is on a cost or cost-plus-a-fixed-fee basis, or (2) is on a fixed-price
basis exceeding in dollar amount either ,x25,000 or five percent (5%)
of the total amount of this contract.
(b) The Contractor shall not, without the prior written consent of
Contracting Officer, place any subcontract which (1) is on a cost or cost-
plus-a-fixed-fee basis, or (2) is on a fia:ed-price basis exceeding in
dollar amount either 425,000 or five (5%) of the total amount of this
contract or (3) provides for the fabrication, purchase, rental, installation
or other acquisition, of any item of industrial facilities, or of special
tooling having a value in excess of 01,000,or (4) is on a time-and-material
or labor-hour basis. The Contracting Officer may, in his discretion, ratify
in writing any such subcontract; such action shall constitute the consent
of the Contracting Officer as required by this paragraph (b).
(c) The Contractor agrees that no subcontract placed under this
contract shall provide for payment on a cost-plus-a-percentage-of-cost
basis.
(d) The Contracting Officer may, in his discretion, specifically
approve in writing any of the provisions of a subcontract. However, such
approval or the consent of the Contracting Officer obtained as required
by this clause shall not be construed to constitute a determination of the
acceptability of the subcontract price, unless such approval specifically
provides that it constitutes a determination of the acceptability of the
subcontract price.
(e) The Contracting Officer may approve all or any part of the
Contractor's purchasing system and from time to time rescind or reinstate
such approval. Such approval shall be deemed to fulfill the requirements
for obtaining the Contracting Officer's consent to subcontracts as
prescribed in paragraph (b) above.
36. AIRCRAFT IN THE OPEN (ASPR io-404)
(a) Subject to the definitions and limitations prescribed in this
clause, the Government assumes the risk of damage to or loss or:destruction
of aircraft-, in the open; PROVIDED, that such damage, loss, or destruction
i,9 cau: e.( by any of the following perils:
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(i) Fire, lightning, windstorm, cyclone, tornado, hail; explosion;
riot, riot attending a strike, civil commotion, vandalism and malicious
mischief; sabotage; aircraft dr objects falling therefrom; ehicles
running on. land or tracks, excluding vehicles owned or operated by the
Contractor or any agent or employee of the Contractor; smoke; earthquake
or volcanic eruption; flood, theaning 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 any 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 a prevailing
practice in the industry in which the Contractor is engaged with respect
to similar property.
(b) For purposes of this clause:
(i) The term "Aircraft" means the aircraft to be furnished to the
Government under this contract, Including complete aircraft; and aircraft
in the course of manufacture or modification, including engines, instru-
ments, subassemblies, parts, and1equipment installed therein, or in
process of installation, and all uninstalled property withdrawn from
stores for installation in aircraft in the open or temporarily removed
from such aircraft, provided such uninstalled property is in the open.
(ii) The term "in the open" means located wholly outside of
buildings or roofed structures,
(c) The GovcrnmentTs obligation under this clause shall extend only
to aircraft in the open under conditions approved by the Contracting Officer,
and shall not extend to the following: .
(i) loss, destruction, or damage resulting from failure bf the
Contra ter, due to willful misconduct or lack of good faith of any of
the Contractor's managerial personnel, to maintain and administer a program
for the maintenance ? repair, protection, and preservation of aircraft in
the open, in accordance with sound industrial practice. The term
"Contractor's managerial personnel" means the Contractor's directors, officers,
and any of its managers, superintendents, or other equivalent representatives
who have supervision or direction of all or substantially all of the
Contractor's business, or all or substantially all of the Contractor's
operation at any one plant or separate location at which this contract is
performed, or a spparate end complete major industrial operation in
connection with the performance of this contract;
(ii) loss, destruction or damage to aircraft in the possession or con-
trol of any subcontractor, except to the extent that the subcontract, with
the approval of the Contracting Officer and consistent with this clause,
may otherwise provide.
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(d) The Contractor warrants that the 6ontract price does not and will
not include any charge or reserve for insurance (including self-insurance
funds or reserves) covering damage to or loss or destruction of aircraftf~
in the open caused by any of the perils set forth in paragraph (a)
(e) In the event of damage to or loss or destruction of aircraft
in the open, the Contractor shall take all reasonable steps to protect
such aircraft from further damage, spparage damaged and undamaged aircraft,
out all aircraft in the best possible order, and furnish to the Contracting
Officer a statement of:
(i) the lost, destroyed, or damaged aircraft;
(ii) the time and origin of the loss, destruction, or damage;
(iii) all known interests in commingled property of which aircraft
in the open are a part;
(iv) the insurance, if any, covering any part of the interest in
such commingled property.
The Contractor shall be reimbursed for expenditures made by it in
performing its obligations under this paragraph, to the extent approved
by the Contracting Officer and this contract shall be modified in
writing accordingly.
(f) If prior to acceptance by and delivery to the Government any
aircraft in the open is lost, destroyed, or damaged due to any of the
perils set forth in paragraph (a) hereof, the Government may, unless
otherwise provided in this contract, elect to require that such aircraft
be replaced by the Contractor or restored by the Contractor to the condition
in which it was immediately prior to such damage. If the Governm--nt
requires the aircraft to be replaced or restored, an dquitable adjustment
shall be made in the amount due under this contract and in the time
required for its performance, and this ccntract shall be modified in
writing accordingly. Alternatively, the Government may elect to terminate
this contract as to any such lost, destroyed, or damaged aircraft, and
in that event the rights of the parties shall be as provided in the clause
entitled Termination for Convenience of the Government.
(g) In the event the Contractor is at any time reimbursed or com-
pensated by any third person for any damage to or loss or destruction of
any aircraft in the open caused by any peril set forth in paragraph (a)
hereof for which the Contractor has been compensated by the Government, it
shall equitably reimburse the Government. The Contractor shall do nothing
to prejudice the Governmentis rights to recover against third parties for
any such loss, destruct ion or damage and, upon the request of the Contracting
Officer, shall. at the Gcvernmentts expense, furnish to the Government all
reasonable assistance and cooperation (including the prosecution of suit and
the execution of instruments of assignoment or subrogation in favor of the
Government) in obtaining recovery.
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(h) Any loss or destruction of, or damage to, property furnished
by the Government will be governed by the clause of this contract
entitled "Government-Furnished Property," to the extent that such clause
is, by its terms, applicable.
(i) Any loss, or destruction of, or damage to, aircraft occurring
in connection with operations of paid aircraft will be governed by the
clause of this contract entitled "Flight Risk," to the extent that such
clause is, by its terms, applicable.
37. INSPECTION AND AUDIT (AFPI 7-4023)
(a) The Contractor agrees that its books and records and its plants,
or such part thereof as may be engaged in the performance of this contract,
shall at all reasonable times be subject to 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.
38. GO'VERNMENT:-FURNISF D PROPERTY (ASPR 13-502)
(a) The Government shall. deliver to the Contractor, for use in
connection with and under the testis 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
"Go ernment-furnished Eroperty't). 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 mdet such delivery or performance dates. In the event
that Government-furnished Property is not delivered to the Contractor by
such time or times, the Contracting Officer shall, upon timely writ-
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
provisions 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 Contracting Officer, either (i) return such property at the Government's
expense or otherwise dispose of the property, or (ii) effect repairs Cr
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 provisions 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
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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
cf the Contractor shall equitably adjust the delivery or performance
dates or the contract price, or both, and any other contractual pro-
visions 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-furnished property shall not be affected
by the incorporation or attachment thereof to any property not owned by
the Government, nor shall such Government-furnished property, or any part
thereof, be or become a fixture or lose its identity as personalty by
reason of affixation to any realty. The Contractor shall comply with
the provisions of the "Manual for the Control of Government Property in
the Possession of Contractors" (Appendix B., Armed Services Procurement
Regulation) as in effect on the date of the contract, which Manual is
hereby incorporated by reference and made a part of this contract
(Rev. No. 33, 5/14/58.)
(d) The Government-furnished property shall, nuless otherwise
provided herein, be used only for the performance of this contract.
(e) The Contractor shall maintain and administer, in accordance
with sound industrial practice, a program for the maintenance, repair,
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 C~ntracting Officer,, The contract price includes no compensation
to the Contractor for the performance of any repair or replacement for
which the Government is repponsible, and an equitable adjustment will be
made in the contract price for any such repair or replacement of Government-
furnished property made at the direction of the Government. Any repair
or replacement for which the Contractor is responsible under the provisions
of this contract shall be accomplishes 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 Contractorts 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
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paragraph (e) hereof, and except as specifically provided in c3 .use (s)
.. ; of this contract or 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
(A) caused by any peril while the property is in transit off the Ccntractor(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 property may properly be located, or by removal there-
from because of any of the following perils:
(I) Fire; lightning; windstorm, cyclone, tornado, hail; explosion;
riot, riot attending a strike, civil commotion; vandalism and malicious
mischief; sabotage; aircraft or objects falling therefrom; vehicles running
on land or tracks exclusing 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-tat-tack 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, ~,r forces; or
(ii) Other peril, of a type not listed above, if such other peril is
customarily covered by insurancb (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 repsect
to similar property in the same general locale.
The perils as set forth in (A) and (B) above are hereinafter coiled
"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
p:^operty while in its possession or c'.,ntrol, except to the extent that
tI.e 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 pro-
visions 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 Contr=actor'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 industrial operation in connection with the
performance of this euntract.
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(ii) The Contractor represents that it is not including in the price
here ndei, and agrees that it will not hereafter include in any price to
the .rove-r-u nt, any charge or reserve for insurance (including self-
insurance funds or reserves) 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 assistance of the Loss and Sal-
v?e Organization so designated (unless the Contracting Officer has
ir.,cte that no such organization be employed), shall take all reasonable
steps to protect the Government--furnished property from further damage,
sepa e.te the damaged and undamaged Goveniment-furnished property, put all
the Government-fi,,.rni?hed property in the best possible order, and furnish
t, the Contracting Officer a statement of: (A) the lost, destroyed and
o':amage~' Government-furnished property (B) the time and origin of the loss,
destruction or damage,, (C) all kncwm interests in commingled property of
;rhich the Government-furnished property is a part, and ID) the insurance,
if anv., covering any part of or interest in such commingled property. The
Cc,ntroctcr shall be reimbursed for the expenditures made by it in performing
its obligations under this subparagraph (iii) (including charges made to
the Contractor by the Loss and Selvage Organization, except any of such
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 apL.)roval of the Contracting Officer after loss of
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 Gov-
ernment fir 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
sc commingled or combined with property of others, including the Ccntra.c-
tLr, that separation is impracticable.
(v) Except to the extent of any loss or destruction of or damage to
C(_vernment-furnished property for which the Contractor is relieved of
liability under the foregoing provisions of this clause, and except for
reasonable wear and ter or depreciation, or the utilization of the Gov-
ernment-furnished property in accordance with the provisions of this con-
tract, the Government-furnished property (other than property permitted
to be sol(-'..) shall be returned to the Government in as good condition
as when received by the Contractor in connection with this c-retract, or
as repaired under paragraph (e) above,
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(vi) In the event the Contractor is reimbursed or compensated for
any loss or destruction of or damage to the Government-furnished propptty,
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 Officetj shall at the Government's
expense, furnish to the Government all reasonable assistance and coopera-
tion (including the prosecution of suit and the execution of instruments
of assignment in favor of the Governments in obtaining recovery. In
addition, where a subcontractor has not been relieved from liability for
any loss cr destruction of or damage to the Government-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.
(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-furnished property is located.
(h) Upon the completion of this contract, or at such earlier date as
may be fixed by the Contracting Officer, the Ccntractor 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 resulting scrap), or not theretofore
delivered: to the Government, and shall deliver or make such other disposal
of such Governrent-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) Direct ions of the Contracting Officer and communications of the
Contractor shall be in writing.
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39. AU ATIOI i IN CONTRACT
The following alterations were made in this contract prior
to signature thereof by the parties to this contract:
(a) In Article 2, "CHANGES", substitute "90 days" in lieu of
"60 days".
(b) Article 5, "Inspection" is deleted and in lieu thereof
PART IV of the Schedule has been substituted.
(c) Article 24, "Patent Rights" is amended by adding the
following sentence at the end of subparagraph (B) under paragraph
(d)(ii)3
"and subject also to the obligations, if any, of the
Contractor, under all terns and conditions set forth in that agree-
ment known as the Cross License Agreement of the ) nufacturers'
Aircraft Association, Inc., in effect as of 31 December 1928, as
supplemented by the agreement of 30 September 1935"?
(d) Article 38, "Goverrmrent-Furnished Property" is amended
by adding the following subparagraphs:
"(3) Where the words "managers, superintendents or
other equivalent representatives" are used or referred to they
shall be construed for the purpose of this clause as meaning
"manufacturing managers, plant managers, production managers,
work managers, division superintendents, or other equivalent
representatives".
"(k) The provisions of this clause shall apply to all
supplies accepted and delivered but left in the possession of the
Contractor for modification, testing, or any other reason or pur-
pose in connection with this contract."
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(e) Article 39 ? YLIM AIBI0! teas added as tel]+ u s
39, lilts,! raw
(a) leak and irv+sgry cperstttiaa of any aircraft (inelarlios
in the tors "aseratioa" tests at airsrsaatt, test at ::peach sat
amsesserrioss installed therela, am the ersersstios at ::rays PON" plant
iasbsll I thterein, vrbetbs r or act the sirasat't is In action dad"
the asahi as at a w such test or the aleaastian of any svasrh p r tit )
(1) to be fu rniebel to the to of asadsar this comweet, or (2)
fu rvaihed to the Contractor by the O.rsrararrrrrsat for the ysrtorucaee CC
this eoaatsaet, rbether sasiaeted by the Contractor, by the tiev rameat
or by My Patens ssatheriasd by that Oaveararaas st, shell be ceIMANOted at
the risk of the Oarverasasaat ,rioter Y 10114 or dsratrw~tion of at dump
to such aircraft (lasludias slat; aid aess~esreari~ss iartall~ed ithe rein)
is eeraeeraed, ooivrithariradias ssroT ether par,evisier at this aasrsosasst)
provided that it lrosssrarWWI ooodaaetiss soft erysraticn we not either
furnished by the tfarwassacat or qWqVe d is vrarrltias by the Contrasting
O fiebr as defined bevel t, snsh aPaanatiaar shall be esndaaated at the
risk at the CCOtrswstor sand the Co artractorr shell be liable for fors sad
destrsasltion of :awl assess: to tswsraasrat pity oesmrrins is the sourer
CC such csersties, need fin fherr pro vidsI that 0 0 Contractor shall bear
the risk at sod, with reupsst to ra ertar, shall be
liable for loss sad destruction at sod ds^ase to sash aircraatt, opaisrssat
cad aeeeeeerias aeaerarl'ias is the e@Yrae act s operation Mad resulting
Oros villat l alssasadwt or Ililaars to +asrrreisea dot faith an Was
)
at Conta sete is abobissrial PMOMWI as defined la PVG~ 3001043
(b)
defined endear yasra~rgk (a))(l) abovej, WO last, dss s trvani,er charged & WING
such awns atieaa thereat saat It the risk at such lass, r^rads cos 11111010 UUMUM
to beams by the Govsararssaab vacates sas+a p ss k (a) he'refrC, the oo'ves uuat shall
hays tie riit to tersrardoster this eersrtia+arlti VIM reaspeat to such aircraft,
or in case sash aircraft is dmassed, the vat my ou" to regal"
Vat two airrsrealt be restessd by the Ceetaaraster to the sonditiaa is which
It was iaaaediatolar prier to s ch daasge. It thr Ga v reran t sleet. to
toaolraaa-te this ecsratasart with respect to such air+aarssaft, the Corstr ctor
shall deliver to the aevenissdt at the place at or arras chub such q"No?
ties is ocadraaied all car svrsh parts at swlla airrarwak"It as the Cantrssctles
Officer my dsssioate, MA the Cestsurtear shill be paid the sa ostraast price
ter said aircraft less wrrMa pert as shall be deseasiaed by Was Cost'
teas Officer M the rereaable Value of say parties at said Simutt sot
sat tha- eersssaaserasssstt at said apasa+atia. It the Uarvnorrar^cnt re-
4atres the aiir+arrrra t, it isrsrrsd, to be restored as atosraaid, an epaltable
ewl.Jsrtrarsasat shall be sad aft the meant #ne trader this contrast and is the
tine rawgrairod ter its Irssfasrrrrsa aaat O U soatmet shall be aedified is
vrritias asaseardlrars3,~. My hispaaries that hays arise 90"r the provisioasa at
this Clsaase shall be hats rariaed as provided is : Class bearsot ea titled
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(.) This C,1eosse sss11 be Marred to .a',z the airsz ti s
by w CMWMtW of aixs raft a~arrate.turs 1 err the tab m at this
s t m s t s s t v L t b s t w *A- as t e s t t sari on aileron aye bars
tiosaas w powky of Us Ommoia^r.at ad provided that swb opra?
Uses sba11 be ssirJ.st to OW r hsai>ratiar or gps+arwil 144110196A Is
Pas~ (a) .tiara..
37~'
per:-__~
ILI
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