SECTION F TIME AND MATERIAL PROVISIONS INDEX

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89B00552R000700050017-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 8
• Document Creation Date: December 20, 2016
• Document Release Date: January 7, 2004
• Sequence Number: 17
• Publication Date: October 31, 1975
• Content Type: REGULATION

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SECTION F
TIME AND MATERIAL PROVISIONS
INDEX
Article
Page
No.
Alterations in Contract .........................
14
8
Audit ........................................
1
.I
Authorization and Consent .....................
9
5
Changes ......................................
3
2
Examination of Records ........................
2
1
Excusable Delays ..............................
8
5
Flight Risks ..................................
10
6
Page
Article No.
Government Property .......................... 11 6
inspection and Correction of Defects ............ 7 5
Payments .................................... 5 3
Pricing of Adjustments ......................... 13 8
Subcontracts .................................. 6 4
Technical Data--Withholding of Payment ....... 12 8
Termination .................................. 4 2
7-901.16 AUDIT (1971 APR.) (AMENDED)
(a) Insert the clause set forth below in all contracts other than con-
tracts entered into by formal advertising which are not expected to
exceed $100,000.
AUDIT (1971 APR.) (AMENDED)
(a) General. The Contracting Officer or his representatives shall
have the audit and inspection rights described in the applicable
paragraphs (b), (c) and (d) below.
(b) Examination of Costs. If this is a cost reimbursement type,
incentive, time and materials, labor hour, or price redeterminable
contract, or any combination thereof, the Contractor shall maintain,
and the Contracting Officer or his representatives shall have the right
to examine books, records, documents, and other evidence and ac-
counting procedures and practices, sufficient to reflect properly all
direct and indirect costs of whatever nature claimed to have been
incurred and anticipated to be incurred for the performance of this
contract. Such right of examination shall include inspection at all
reasonable times of the Contractor's plants, or such parts thereof, as
may be engaged in the performance of this contract.
(c) Cost or Pricing Data. If the Contractor submitted cost or
pricing data in connection with the pricing of this contract or any
change or modification thereto, unless such pricing was based on
adequate price competition, established catalog or market prices of
commercial items sold in substantial quantities to the general public,
or prices set by law or regulation, the Contracting Officer or his
representatives who are employees of the United States Government
shall have the right to examine all books, records, documents and
other data of the Contractor related to the negotiation, pricing or
performance of such contract, change or modification, for the purpose
of evaluating the accuracy, completeness and currency of the cost or
pricing data submitted. Additionally, in the case of pricing any
change or modification exceeding $100,000 to formally advertised
contracts, the Appropriate Audit Representative of the Government
or his representatives who are employees of the United States Govern-
ment shall have such rights. The right of examination shall extend to
all documents necessary to permit adequate evaluation of the cost or
pricing data submitted, along with the computations and projections
used therein.
(d) Reports. If the Contractor is required to furnish Cost Informa-
tion Reports (CIR) or Contract Fund Status Reports (CFSR), the
Contracting Officer or his representatives shall have the right to
examine books, records, documents, and supporting materials, for
the purpose of evaluating (i) the effectiveness of the Contractor's
policies and procedures to produce data compatible with the objectives
of these reports, and (ii) the data reported.
(e) Availability. The materials described in (b), (e) and (d) above
shall be made available at the office of the Contractor, at all reasonable
times, for inspection, audit, or reproduction, until the expiration of
three years from the date of final payment under this contract or such
lesser time specified in Appendix M of the Armed Services Procurement
Regulation, and for such longer period, if any, as is required by ap-
plicable statute, or by other clauses of this contract, or by (1) and
(2) below:
(1) If this contract is completely or partially terminated, the
records relating to the work terminated shall be made available for a
period of three years from the date of any resulting final settlement.
(2) Records which relate to appeals under the "Disputes" clause
of this contract, or litigation or the settlement of claims arising out
of the performance of this contract, shall be made available until such
appeals, litigation, or claims have been disposed of.
(f) The Contractor shall insert a clause containing all the provisions
of this clause, including this paragraph (f), in all subcontracts here-
under, except altered as necessary for proper identification of the
contracting parties and the Contracting Officer under the Government
prime contract.
7-901.17 EXAMINATION OF RECORDS (1971 MAR.)
(AMENDED)
(a) This clause is applicable if the amount of this contract exceeds
$2,500 and was entered into by means of negotiation, including shall
business restricted advertising, but is not applicable if this contract
was entered into by means of formal advertising.
(b) The Contractor agrees that the Appropriate Audit Representa-
tive of the Government or any of his duly authorized representatives
shall, until the expiration of three years after final payment under
this contract or such lesser time specified in either Appendix M of
the Armed Services Procurement Regulation or the Federal Procure-
ment Regulations Part 1-20, as appropriate, have access to and the
right to examine any directly pertinent books, documents, papers,
and records of the Contractor involving transactions related to this
contract.
(c) The Contractor further agrees to include in all his subcontracts
hereunder a provision to the effect that the subcontractor agrees that
the Appropriate Audit Representative of the Government or any of
his duly authorized representatives shall, until the expiration of three
years after final payment under the subcontract or such lesser time
specified in either Appendix M of the Armed Services Procurement
Regulation or the Federal Procurement Regulations Part 1-20, as
appropriate, have access to and the right to examine any directly
pertinent books, documents, papers, and records of such subcon-
tractor, involving transactions related to the subcontract. The term
"subcontract" as used in this clause excludes (i) purchase orders not
exceeding $2,500 (ii) subcontracts or purchase orders for public utility
services at rates established for uniform applicability to the general
public.
(d) The periods of access and examination described in (b) and (c)
above for records which relate to (i) appeals under the "Disputes"
clause of this contract, (ii) litigation or the settlement of claims arising
out of the performance of this contract, or (iii) costs and expenses of
this contract as to which exception has been taken by the Appropriate
Audit Representative of the Government or any of his duly authorized
representatives, shall continue until such appeals, litigation, claims or
exceptions have been disposed of.
a-7BM 1424E OBSOLETE PREVIOUS
(12)
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7-901.2 CHANGES (1964 MAR.)
The Contracting Officer may at any time, by a written order, and
without notice to the sureties, if any, make changes, within the general
scope of this contract, in any one or more of the following: (i) drawings,
designs, or specifications; (ii) method of shipment or packing; (iii)
place of delivery; and (iv) the amount of Government-furnished
property. If any such change requires an increase or decrease in any
hourly rate or in the ceiling price provided for in this contract, or in
the time required for the performance of any part of the work under
this contract, whether changed or not changed by any such order, or
otherwise affects any other provision of this contract, an equitable
adjustment shall be made in the (i) ceiling price, (ii) hourly rates,
(iii) delivery schedule, and (iv) in such other provisions of the contract
as may be so affected, and the contract shall be modified in writing
accordingly. Any claim by the Contractor for adjustment under this
clause must be asserted within thirty (30) days from the date of receipt
by the Contractor of the notification of change; provided, however,
that the Contracting Officer, if he decides that the facts justify such
action, may receive and act upon any such claim asserted at any time
prior to final payment under this contract. Failure to agree to any
adjustment shall be a dispute concerning a question of fact within the
meaning of the "Disputes" clause of this contract. However, nothing
in this clause shall excuse the Contractor from proceeding with the
contract as changed.
(a) The performance of work under the contract may be terminated
by the Government in accordance with this clause in whole, or from
time to time, in part:
(i) whenever the Contractor shall default in performance of
this contract in accordance with its terms (including in the term
"default" any such failure by the Contractor to make progress
in the prosecution of the work hereunder as endangers such
performance), and shall fail to cure such default within a period
of ten (10) days (or such longer periods as the Contracting
Officer may allow) after receipt from the Contracting Officer of
a notice specifying the default; or
(ii) whenever for any reason the Contracting Officer shall
determine that such termination is in the best interest of the
Government.
Any such termination shall be effected by delivery to the Contractor
of a Notice of Termination specifying whether termination is for the
default of the Contractor or for the convenience of the Government,
the extent to which performance of work under the contract is
terminated, and the date upon which such termination becomes
effective. If, after notice of termination of this contract for default
under (i) above, it is determined for any reason that the Contractor
was not in default pursuant to (i), or that the Contractor's failure to
perform or to make progress in performance is due to causes
beyond the control and without the fault or negligence of the
Contractor pursuant to the provisions of the clause of this contract
relating to excusable delays, the Notice of Termination shall he
deemed to have been issued under (ii) above, and the rights and
obligations of the parties hereto shall in such event be governed
accordingly.
(b) After receipt of a Notice of Termination and except as otherwise
directed by the Contracting Officer, the Contractor shall:
(i) stop work inder the contract on the date and to the extent
specified in the Notice of Termination;
(ii) place no further orders or subcontracts for materials,
services or facilities, except as may be necessary for completion
of such portion of the work under the contract as is not
terminated;
(iii) terminate all orders and subcontracts to the extent that
they relate to the performance or work terminated by the Notice
of Termination;
(iv) assign to the Government, in the manner and to the
extent directed by the Contracting Officer, all right, title, and
interest of the Contractor under the orders or subcontracts so
terminated, in which case the Government shall have the right
in its discretion, to settle or pay any or all claims arising out of
the termination of such orders and subcontracts;
(v) with the approval or ratification of the Contracting Officer,
to the extent he may require, which approval or ratification
shall be final and conclusive for all purposes of this clause, settle
all outstanding liabilities and all claims arising out of such
termination of orders and subcontracts, the cost of which would
be payable by the Government in whole or in part, in accordance
with the provisions of this contract;
(vi) transfer title (to the extent that title has not already been
transferred) and in the manner, to the extent, and at the times
directed by the Contracting Officer, deliver to the Government
(A) the fabricated or unfabricated parts, work in process,
completed work, supplies, and other material produced as a part
of, or acquired in respect of the performance of, the work
terminated by the Notice of Termination, (B) the completed or
partially completed plans, drawings, information, and other
property which, if the contract had been completed, would be
required to be furnished to the Government, and (C) the jigs,
dies, fixtures, and other special tools and tooling acquired or
manufactured for the performance of this contract for the cost
of which the Contractor has been or will be reimbursed under
this contract; other special tools and
(vii) use his best efforts to sell in the manner, at the times, to
the extent, and at the price or prices directed or authorized by
the Contracting Officer, any property of the types referred to
in (vi) above; provided, however, that the Contractor (A) shall
not be required to extend credit to any purchaser, and (B) may
acquire any such property under the conditions prescribed by
and at a price or prices approved by the Contracting Officer;
and provided further that the proceeds of any such transfer or
disposition shall be applied in reduction of any payments to be
made by the Government to the Contractor under this contract
or shall otherwise be credited to the price or cost of the work
covered by this contract or paid in such other manner as the
Contracting Officer may direct;
(viii) complete performance of such part of the work as shall
not have been terminated by the Notice of Termination; and
(ix) take such action as may be necessary, or as the Contract-
ing Officer may direct, for the protection and preservation of the
property related to this contract, which is in the possession of
the Contractor and in which the Government has or may
acquire an interest.
The Contractor shall proceed immediately with the performance of
the above obligations notwithstanding any delay in determining or
adjusting any amount due or owing under this clause. At any time
after expiration of the plant clearance period, as defined in Section
VIII, Armed Services Procurement Regulation, as it may be
amended from time to time, the Contractor may submit to the
Contracting Officer a list, certified as to quantity and quality, of any
or all items of termination inventory not previously disposed of,
exclusive of items the disposition of which has been directed or
authorized by the Contracting Officer and may request the
Government to remove such items or enter into a storage agreement
covering them. Not later than fifteen (15) days thereafter, the
Government will accept such items and remove them or enter into a
storage agreement covering the same; provided, that the list sub-
mitted 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. Any necessary
adjustment to correct the list as submitted shall be made prior to
final settlement.
(c) After receipt of a Notice of Termination, the Contractor shall
submit to the Contracting Officer his termination claim in the form
and with the certification prescribed by the Contracting Officer.
Such claim shall be submitted promply but in no event later than
one year from the effective date of termination, unless one or more
extensions in writing are granted by the Contracting Officer, upon
request of the Contractor made in writing within such one year
period or authorized extension thereof. However, if the Contracting
Officer determines that the facts justify such action, he may receive
and act upon any such termination claim at any time after such one
year period or any extension thereof. Upon failure of the Contractor
to submit his termination claim within the time allowed, the
Contracting Officer may determine, on the basis of information
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available to him, the amount, if any, due to the Contractor by
reason of the termination and shall thereupon pay to the Contractor
the amount so determined.
(d) Subject to the provisions of paragraph (c), the Contractor
and the Contracting Officer may agree upon the whole or any part
of the amount or amounts to be paid to the Contractor by reason of
the total or partial termination of work pursuant to this clause. The
contract shall be amended accordingly, and the Contractor shall be
paid the agreed amount.
(e) In the event of the failure of the Contractor and the Contract-
ing Officer to agree in whole or in part, as provided in paragraph (d)
above, as to the amounts to be paid to the Contractor in connection
with the termination of work pursuant to this clause, the Contracting
Officer shall determine, on the basis of information available to him,
the amount, if any, due to the Contractor by reason of the termination,
and shall pay to the Contractor the amount determined as follows:
(i) if the termination of the contract is determined to be for
the convenience of the Government, there shall be included-
(A) an amount for direct labor hours (as defined in the
Schedule of the contract) which shall be determined by
multiplying the number of direct labor hours expended prior
to the effective date of the Notice of Termination by the
hourly rate or rates set forth in the Schedule, less any hourly
rate payments theretofore made to the Contractor;
(B) an amount (computed pursuant to the provisions of
the contract providing for payment for materials) for material
expenses incurred prior to the effective date of the Notice of
Termination, not previously paid to the Contractor for the
performance of this contract;
(C) an amount for labor and material expenses computed as
if the expenses were incurred prior to the effective date of the
termination reasonably incurred after the effective date of the
Notice of Termination with the approval of or as directed by
the Contracting Officer, provided, that the Contractor shall
discontinue such expenses as rapidly as practicable;
(D) to the extent not included in (A), (13), and (C) above,
the cost of settling and paying claims arising out of the
termination of work under subcontracts or orders, as provided
in paragraph (b) (v) above, which are properly chargeable to
the terminated portion of this contract; and
(E) the reasonable costs of settlement, including accounting,
legal, clerical, and other expenses reasonably necessary for the
preparation of settlement claims and supporting data with
respect to the terminated portion of the contract and for the
termination and settlement of subcontracts thereunder,
together with reasonable storage, transportation, and other
costs incurred in connection with the protection or disposition
of termination inventory; or
(ii) if the termination of the contract is for the default of the
Contractor, there shall be included the amounts computed in
accordance with (i) above except there shall not be included---
(A) any amount for the preparation of the Contractor's
settlement proposal; or
(B) the portion of the hourly rate allocable to profit for
any direct labor hours expended in furnishing materials and
services not delivered to and accepted by the Government.
(f) Costs claimed, agreed to, or determined pursuant to (c), (d)
and (e) hereof shall be in accordance with the Section XV Contract
Cost Principles and Procedures 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
"Disputes" clause of this contract, from any determination made by
the Contracting Officer under paragraphs (c) or (e), above, except
that if the Contractor has failed within the time provided in
paragraph (c), above, to request extension of such time, he shall
have no such right of appeal. In any case where the Contracting
Officer has made a determination of the amount due under paragraph
(c) or (e), above, the Government shall pay to the Contractor the
following: (i) if there is no right of appeal hereunder, or if no timely
appeal has been taken, the amount so determined by the Contracting
Officer; or (ii) if an appeal has been taken, the amount finally
determined on such appeal.
(h) In arriving at the amount due the Contractor under this
clause, there shall be deducted (i) all unliquidated advance or other
payments theretofore made to the Contractor, applicable to the
terminated portion of this contract; (ii) any claim which the
Government may have against the Contractor in connection with this
contract; and (iii) the agreed price for, or the proceeds of sale of,
any materials, supplies, or other things acquired by the Contractor
or sold pursuant to the provisions of this clause and not otherwise
recovered by or credited to the Government.
(i) In the event of a partial termination, the hourly rates for direct
labor hours with respect to the work under the continued portion of
the contract shall be equitably adjusted by agreement between the
Contractor and the Contracting Officer, and such adjustment shall
be evidenced by an amendment to this contract.
(j) The Government under such terms and conditions as it
prescribes may make partial payments and payments on account
against costs incurred by the Contractor in connection with the
terminated portion of the contract, whenever in the opinion of the
Contracting Officer the aggregate of such payments shall be within
the amount to which the Contractor will be entitled hereunder.
If the total of such payments is in excess of the amount finally
determined to be due under this clause, such excess shall be payable
by the Contractor to the Government upon demand, together with
interest computed at the rate established by the Secretary of the
Treasury pursuant to Public Law 92-41, 85 STAT 97 for the
Renegotiation Board, for the period from the date such excess
payment is received by the Contractor to the date on which such
excess is repaid to the Government; provided, however, that no interest
shall be charged with respect to any such excess payment attributable
to a reduction in the Contractor's claim by reason of retention or
other disposition of termination inventory until ten (10) days after
the date of such retention or disposition, or such later date as
determined by the Contracting Officer by reason of the circumstances.
7-901.6 PAYMENTS (1972 MAY)
The Contractor shall be paid as follows upon the submission of
invoices or vouchers approved by the Contracting Officer.
(a) Hourly rate.
(I) The amounts computed by multiplying the appropriate
hourly rate, or rates, set forth in the Schedule by the number of
direct labor hours performed, which rates shall include wages,
overhead, general and administrative expense and profit. Fractional
parts of an hour shall be payable on a prorated basis. Vouchers may
be submitted once each month (or at more frequent intervals, if
approved by the Contracting Officer), to the Contracting Officer
or his designee. The Contractor will substantiate vouchers by
evidence of actual payment and by individual daily job timecards,
or such other substantiation approved by the Contracting Officer.
Promptly after receipt of each substantiated voucher, the Government
shall, except as otherwise provided in this contract, and subject to
the provisions of (e) below, make payment thereon as approved by
the Contracting Officer.
(2) Unless otherwise set forth in the Schedule, five percent (5%)
of the amount due under this paragraph (a) shall be withheld from
each payment by the Contracting Officer but the total amount
withheld shall not exceed $50,000. Such amounts withheld shall be
retained until the execution and delivery of a release by the
Contractor as provided in paragraph (f) hereof.
(3) Unless provisions of the Schedule hereof otherwise specify,
the hourly rate or rates set forth in the Schedule shall not be varied
by virture of the Contractor having performed work on an overtime
basis. If no overtime rates are provided in the Schedule and overtime
work is approved in advance by the Contracting Officer, overtime
rates will be negotiated. Failure to agree upon these overtime rates
will be treated as a dispute under the "Disputes" clause of this
contract. If the Schedule provides rates for overtime, the premium
portion of those rates will be reimbursable only to the extent the
overtime is approved by the Contracting Officer.
(b) Materials and Subcontracts
(1) Allowable costs of direct materials shall be determined by
the Contracting Officer in accordance with Part 2, Section XV, of
the Armed Services Procurement Regulation in effect on the date
of this contract. Reasonable and allocable material handling costs
may be included in the charge for material to the extent they are
clearly excluded from the hourly rate. Material handling costs are
comprised of indirect costs, including, when appropriate, General
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and Administrative expense, allocated to direct materials in
accordance with the Contractor's usual accounting practices
consistent with Part 2, Section XV of the Armed Services Procurement
Regulation. The Contractor shall be reimbursed for items and services
purchased directly for the contract only when cash, checks, or other
forms of actual payment has been made for such purchased items or
services. Direct materials, as referenced by this clause, are defined
as those materials which enter directly into the end product, or
which are used or consumed directly in connection with the
furnsihing of such product.
(2) The cost of subcontracts which are authorized pursuant to
the "Subcontracts" clause hereof shall be reimbursable costs here-
under, provided such costs are consistent with subparagraph (3)
below. Reimbursable cost in connection with subcontracts shall be
limited to the amounts paid to the subcontractor in the same
manner as for items and services purchased directly for the contract
under subparagraph (2) above. The requirement of payment for
reimbursement shall not apply to the Contractor who is a small
business concern. Reimbursable costs shall not include any costs
arising from the letting, administration, or supervision of performance
of the subcontract, which costs are included in the hourly rate or
rates payable under (a) (1) above.
(3) The Contractor shall, to the extent of his ability, procure
materials at the most advantageous prices available with due regard
to securing prompt delivery of satisfactory materials, and take all
cash and trade discounts, rebates, allowances, credits, salvage,
commissions, and other benefits. When unable to take advantage of
such benefits, it shall promptly notify the Contracting Officer to
that effect, and give the reason therefor. Credit shall be given to the
Government for cash and trade discounts, rebates, allowances, credits,
salvage, the value of resulting scrap when the amount of such scrap
is appreciable, commissions, and other amounts which have been
accrued to the benefit of the Contractor, or would have so accrued
except for the fault or neglect of the Contractor. Such benefits lost
through no fault or neglect on the part of the Contractor, or lost
through fault of the Government, shall not be deducted from gross
costs.
(c) It is estimated that the total cost to the Government for the
performance of this contract will not exceed the ceiling price set forth
in the Schedule, and the Contractor agrees to use his best efforts to
perform the work specified in the Schedule and all obligations under
this contract within such ceiling price. If at any time the Contractor
has reason to believe that the hourly rate payments and material
costs which will accrue in the performance of this contract in the next
succeeding thirty (30) days, when added to all other payments and
costs previously accrued, will exceed eighty-five percent (85%) of
the ceiling price then set forth in the Schedule, the Contractor shall
notify the Contracting Officer to that effect giving his revised estimate
of the total price to the Government for the performance of this
contract, together with supporting reasons and documentation. If
at any time during the performance of this contract, the Contractor
has reason to believe that the total price to the Government for the
performance of this contract will be substantially greater or less than
the then stated ceiling price, the Contractor shall so notify the Con-
tracting Officer, giving his revised estimate of the total price for the
performance of his contract, together with supporting reasons and
documentation. If at any time during the performance of this
contract, the Government has reason to believe that the work to he
required in the performance of this contract will be substantially
greater or less than the stated ceiling price, the Contracting Officer
will so advise the Contractor, giving the then revised estimate of the
total amount of effort to be required under the contract.
(d) The Government shall not be obligated to pay the Contractor
any amount in excess of the ceiling price set forth in the Schedule,
and the Contractor shall not be obligated to continue performance
if to do so would exceed the ceiling price set forth in the Schedule,
unless and until the Contracting Officer shall have notified the
Contractor in writing that such ceiling price has been increased and
shall have specified in such notice a revised ceiling which shall
thereupon constitute the ceiling price for performance under this
contract. When and to the extent that the ceiling price set forth in
the Schedule has been increased, any hours expended and material
costs incurred by the Contractor in excess of the ceiling price prior
to the increase shall be allowable to the same extent as if such hours
expended and material costs had been incurred after such increase in
the ceiling price.
(e) At any time or times prior to final payment under this
contract the Contracting Officer may cause to be made such audit
of the invoices or vouchers and substantiating material as shall be
deemed necessary. Each payment theretofore made shall be subject
to reduction to the extent of amounts which are found by the
Contracting Officer not to have been properly payable, and shall
also be subject to reduction for overpayments, or to increase for
underpayments, on preceding invoices or vouchers. Upon receipt
and approval of the voucher or invoice designated by the Contractor
as the "completion voucher" or "completion invoice" and sub-
stantiating material, and upon compliance by the Contractor with
all provisions of this contract (including, without limitation,
provisions relating to patents and the provisions of (f) and (g) below),
the Government shall as promply as may be practicable pay any
balance due and owing the Contractor. The completion invoice or
voucher, and substantiating material, shall be submitted by the
Contractor as promptly as may be practicable following completion
of the work under this contract, but in no event later than one (1)
year (or such longer period as the Contracting Officer may, in his
discretion, approve in writing) from the date of such completion.
(f) The Contractor and each assignee, under an assignment entered
into under this contract and in effect at the time of final payment
under this contract, shall execute and deliver, at the time of and as a
condition precedent to final payment under this contract, a release
discharging the Government, its officers, agents, and employees of
and from all liabilities, obligations, and claims arising out of or under
this contract, subject only to the following exceptions:
(i) specified claims in stated amounts, or in estimated amounts
where the amounts are not susceptible of exact statement by the
Contractor;
(ii) claims, together with reasonable expenses incidental
thereto, based upon the liabilities of the Contractor to third
parties arising out of the performance of this contract, which are
not known to the Contractor on the date of the execution of the
release, and of which the Contractor gives notice in writing to
the Contracting Officer not more than six (6) years after the date
of the release or the date of any notice to the Contractor that
the Government is prepared to make final payment, whichever
is earlier; and
(iii) claims for reimbursement of costs (other than expenses
of the Contractor by reason of its indemnification of the
Government against patent liability), including reasonable
expenses incidental thereto, incurred by the Contractor under
the provisions of this contract relating to patents.
(g) The Contractor agrees that any refunds, rebates, or credits
(including any interest thereon) accruing to or received by the
Contractor or any assignee, which arise under the materials portion
of this contract and for which the Contractor has received reim-
bursement, shall be paid by the Contractor to the Government. The
Contractor and each assignee, under an assignment entered into under
this contract and in effect at the time of final payment under this
contract, shall execute and deliver, at the time of and as a condition
precedent to final payment under this contract, an assignment to the
Government of such refunds, rebates, or credits (including any
interest thereon) in form and substance satisfactory to the Contracting
Officer.
(4) When the nature of the work to be performed requires the
Contractor to furnish material which is regularly sold to the general
public in the normal course of business by the Contractor, the price
to be paid for such material, notwithstanding (b) (1), above, shall
be on the basis of an established catalog or list price, in effect when
the material is furnished, less all applicable discounts to the
Government; provided that in no event shall such price be in excess
of the Contractor's sales price to his most favored customer for the
same item in like quantity, or the current market price, whichever
is lower.
ARTICLE 6
7-901.10 SUBCONTRACTS (1964 MAR.)
(a) No contract shall be made by the Contractor for the furnishing
of any of the work herein contracted for without the written approval
of the Contracting Officer. For the purpose of this clause, purchase of
raw material or commercial stock items shall not be considered work.
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(b) The Contractor agrees that no subcontract placed under this
contract shall provide for payment on a cost-plus-percentage-of-cost
basis.
ARTICLE 7
7-901.21 INSPECTION AND CORRECTION OF DEFECTS (1964
MAR.)
(a) All material furnished and services performed by the Con-
tractor under this contract shall be subject to inspection and test
by the Government to the extent practicable at all times (including
the period of performance) and places, and in any event prior to
acceptance. The Government, through any authorized representative,
may inspect the plant or plants of the Contractor or of any of his
subcontractors engaged in the performance of this contract. If any
inspection or test is made by the Government on the premises of the
Contractor or a subcontractor, the Contractor shall provide and shall
require subcontractors to provide all reasonable facilities and assist-
ance for the safety and convenience of the Government inspectors
in the performance of their duties. All inspections and tests by the
Government shall be performed in such a manner as will not unduly
delay the work. Except as otherwise provided in this contract, accept-
ance of services performed and materials furnished under this contract
shall be made at the place of delivery as promptly as practicable after
delivery and shall be deemed to have been made no later than sixty
(60) days after the date of such delivery, if acceptance has not been
made earlier within such period.
(b) At any time during performance of this contract, but not
later than six (6) months (or such other period as may be provided in
the schedule) after acceptance of the services or materials last delivered
in accordance with the requirements of this contract, the Government
may require the Contractor to remedy by correction or replacement,
as directed by the Contracting Officer, any services or materials
which at the time of delivery thereof failed to comply with the require-
ments of this contract. Except as otherwise provided in paragraph (c)
hereof, below the allowability of the cost of any such replacement or
correction shall be determined as provided in the "Payments" clause
of this contract, but the "hourly rate" for labor hours incurred in
such replacement or correction shall be reduced so as to exclude the
portion of such rate attributable to profit. Corrected or replacement
materials and services shall not be tendered again for acceptance un-
less the former tender and the requirement of correction or replace-
ment is disclosed. If the Contractor fails to proceed with reasonable
promptness to perform such replacement or correction, and if such
replacement or correction may be performed within the ceiling price,
or the ceiling price as increased by the Government, the Government
(i) may by contract or otherwise perform such replacement or correc-
tion and charge to the Contractor any increased cost occasioned the
Government thereby, and may deduct such increased cost from any
amounts due the Contractor under this contract (or require repay-
ment of any payments theretofore made), or (ii) may terminate this
contract for default as provided in the "Termination" clause of this
contract. Failure to agree to the amount of any such increased cost
to be charged to the Contractor, or to such reduction in, or repayment
of, any amount due under this contract, shall be a dispute concerning
a question of fact within the meaning of the "Disputes" clause of this
contract.
(c) Notwithstanding the provisions of paragraph (b) above, the
Government may at any time require the Contractor to remedy by
correction or replacement, without cost to the Government, any fail-
ure by the Contractor to comply with the requirements of this contract,
if such failure is due to fraud, lack of good faith or willful misconduct
on the part of any of the Contractor's directors or officers, or on the
part of any of his managers, superintendents, or other equivalent
representatives, who has supervision or direction of (i) all or sub-
stantially all of the Contractor's business; (ii) all or substantially all
of the Contractor's operations at any one plant or separate location
in which this contract is being performed; (iii) a separate and com-
plete major industrial operation in connection with the performance
of this contract; or (iv) all or substantially all of the Contractor's
operations under this contract. The Government may at any time
also require the Contractor to remedy by correction or replacement,
without cost to the Goverment, any such failure caused by one or
more individual employees selected or retained by the Contractor
after any such supervisory person has reasonable grounds to believe
that any such employee is habitually careless or otherwise unqualified.
(d) The provisions of this clause shall apply to any corrected or
replacement services or materials.
(e) The Contractor shall provide and maintain an inspection
system acceptable to the Government covering the material, fabri-
cating methods, and the work and services hereunder. Records of
all inspection work by the Contractor shall be complete and available
to the Government at all reasonable times during performance of this
contract and for such longer period as may be specified in this contract.
(f) Except as provided in this clause and as may be provided
in the Schedule, the Contractor shall have no obligation or liability
to correct or replace materials furnished and services performed
under this contract which at the time of delivery are defective in
material or workmanship or otherwise not in conformity with the
requirements of this contract.
(g) Except as otherwise provided in the Schedule, the Contractor's
obligation to correct or replace Government-furnished property
(which is property in the possession of or acquired directly by the
Government and delivered or otherwise made available to the Con-
tractor) shall be governed by the provisions of the "Government
Property" clause of this contract.
ARTICLE 8
7-901.3 EXCUSABLE DELAYS (1969 AUG.)
Except with respect to defaults of subcontractors, the Contractor
shall not be in default by reason of any failure in performance of
this contract in accordance with its terms (including any failure by
the Contractor to make progress in the prosecution of the work here-
under which endangers such performance) if such failure arises out of
causes beyond the control and without the fault or negligence of the
Contractor. Such causes may include, but are not restricted to:
acts of God or of the public enemy; acts of the Government in either
its sovereign or contractual capacity; fires; floods; epidemics; quaran-
tine restrictions; strikes; freight embargoes; and unusually severe
weather; but in every case the failure to perform must be beyond the
control and without the fault or negligence of the Contractor. If
the failure to perform is caused by the failure of a subcontractor to
perform or make progress, and if such failure arises out of causes be-
yond the control of both the Contractor and subcontractor, and
without the fault or negligence of either of them, the Contractor shall
not be deemed to be in default, unless (i) the supplies or services to
be furnished by the subcontractor were obtainable from other sources,
(ii) the Contracting Officer shall have ordered the Contractor in
writing to procure such supplies or services from such other sources,
and (iii) the Contractor shall have failed to comply reasonably with
such order. Upon request of the Contractor, the Contracting Officer
shall ascertain the facts and extent of such failure and, if he shall
determine that any failure to perform was occasioned by any one or
more of the said causes, the delivery schedule shall be revised accord-
ingly, subject to the rights of the Government under the clause
hereof entitled "Termination." (As used in this clause, the terms
"subcontractor" and "subcontractors" mean subcontractor(s) at
any tier.)
ARTICLE 9
7-901.20 AUTHORIZATION AND CONSENT (1964 MAR.)
The Government hereby gives its authorization and consent
(without prejudice to any rights of indemnification) for all use and
manufacture, in the performance of this contract or any part hereof
or any amendment hereto or any subcontract hereunder (including
any lower-tier subcontract), of any invention described in and cov-
ered by a patent of United States (i) embodied in the structure or
composition of any article the delivery of which is accepted by the
Government under this contract, or (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) specifications
or written provisions now or hereafter forming a part of this contract,
or (b) specific written instructions given by the Contracting Officer
directing the manner of performance. The entire liability to the
Government for infringement of a patent of the United States shall
be determined solely by the provisions of the indemnity clauses, if
any, included in this contract or any subcontract hereunder (includ-
ing any lower-tier subcontract), and the Government assumes liability
for all other infringement to the extent of the authorization and
consent hereinabove granted.
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7-902.13 FLIGHT RISKS (1965 OCT.)
(a) Notwithstanding any other provision of this contract, and
particularly subparagraph (g) (1) of the Government Property clause
and paragraph (c) of the Insurance-Liability to Third Persons clause,
the Contractor shall not (i) be relieved of liability for, damage to, or
loss or destruction of, aircraft sustained during flight, or (ii) be re-
imbursed for liabilities to third persons for loss of or damage to
property, or for death or bodily injury, which are caused by aircraft
during flight, unless the flight crew members have previously been
approved in writing by the Contracting Officer.
(b) For the purposes of this clause:
(i) Unless otherwise specifically provided in the Schedule,
the term "aircraft" means any aircraft, whether furnished by
the Contractor under this contract (either before or after accept-
ance by the Government) or furnished by the Government to the
Contractor under this contract, including all Government Prop-
erty placed or installed therein or attached thereto; provided,
however, that such aircraft and property are not covered by a
separate bailment agreement.
(ii) The term "flight" means any flight demonstration, flight
test, taxi test, or other flight, made in the performance of this
contract, or for the purpose of safeguarding the aircraft, or
previously approved in writing by the Contracting Officer. As
to land based aircraft, "flight" shall commence with the taxi roll
from a flight line and continue until the aircraft has completed
the taxi roll to a flight line; as to sea planes, "flight" shall com-
mence with the launching from a ramp and continue until the
aircraft has completed its landing run and is beached at a ramp;
as to helicopters, "flight" shall commence upon engagement of
the rotors for the purpose of take-off and continue until the
aircraft has returned to the ground and rotors are disengaged;
and for vertical take-off aircraft, "flight" shall commence upon
disengagement from any launching platform or device and
continue until the aircraft has been re-engaged to any launching
platform or device.
(iii) The term "flight crew members" means the pilot, the co-
pilot and, unless otherwise specifically provided in the Schedule,
the flight engineer, navigator, bombardier-navigator, and
defense systems operator,when required, or assigned to their
respective crew positions, to conduct any flight on behalf of the
Contractor.
(c) If any aircraft is damaged, lost, or destroyed during flight,
and if the amount of such damage, loss, or destruction exceeds one
hundred thousand dollars ($100,000) or twenty percent (20%) of
the estimated cost (exclusive of any fee) of this contract, whichever is
less, and if the Contractor is not liable for the damage, loss, or de-
struction pursuant to the "Government Property" clause of this con-
tract together with paragraph (a) above, then an equitable adjust-
ment for any resulting repair, restoration, or replacement that is
required under this contract shall be made (i) in the estimated cost,
delivery schedule, or both, and (ii) in the amount of any fee to be paid
to the Contractor, and the contract shall be modified in writing
accordingly; provided, in determining the amount of adjustment in
the fee that is equitable, any fault of the Contractor, his employees,
or any subcontractor which materially contributed to the damage,
loss, or destruction shall be taken into consideration. Failure to
agree on any adjustment shall be it dispute concerning a question of
fact within the meaning of the "Disputes" clause of this contract.
7-901.5 GOVERNMENT PROPERTY (TIME AND MATERIAL
OR LABOR HOUR) (1970 SEP.)
(a) Government-Furnished Property. The Government shall deliver
to the Contractor, for use in connection with and under the terms of
this contract, the property described as Government-furnished prop-
erty in the Schedule or specifications, together with such related
data and information as the Contractor may request and as may re-
sonably be required for the intended use of such property (herein-
after referred to as "Government-furnished property"). The delivery
or performance dates for the supplies or services to be furnished by the
Contractor under this contract are based upon the expectation that
Government-furnished property suitable for use will be delivered to
the Contractor at the times stated in the Schedule or, if not so stated,
in sufficient time to enable the Contractor to meet such delivery or
performance dates. In the event that Government-furnished prop-
erty is not delivered to the Contractor by such time or times, the
Contracting Officer shall, upon timely written request made by the
Contractor, make a determination of the delay, if any, occasioned the
Contractor and shall equitably adjust the ceiling price, hourly rate,
the delivery or performance date, or all of them, and any other
contractual provisions affected by any such delay, in accordance
with the procedures provided for in the clause of this contract entitled
"Changes." In the event that 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 or modifications. Upon
completion of (i) or (ii) above, the Contracting Officer upon written
request of the Contractor shall equitably adjust the ceiling price, rate,
the delivery or performance date, or all of them, and any other con-
tractual provision affected by the return or disposition, or the repair
or modification in accordance with the procedures provided for in the
clause of this contract entiled "Changes." The foregoing provisions
for adjustment are exclusive and the Government shall not be liable
to suit for breach of contract by reason of any delay in delivery of
Government-furnished property or delivery of such property in a
condition not suitable for its intended use.
(b) Changes in Government-Furnished Property
(1) By notice in writing, the Contracting Officer may (i) decrease
the property furnished or to be furnished by the Government under
this contract, or (ii) substitute other Government-owned property for
property to be furnished by the Government, or to be acquired by
the Contractor for the Government, under this contract. The Con-
tractor shall promptly take such action as the Contracting Officer
may direct with respect to the removal and shipping of property
covered by such notice.
(2) In the event of any decrease in or substitution of property
pursuant to paragraph (1) above, or any withdrawal of authority to
use property provided under any other contract or lease, which
property the Government had agreed in the Schedule to make avail-
able for the performance of this contract, the Contracting Officer,
upon the written request of the Contractor (or, if the substitution of
property causes a decrease in the cost of performance, on his own
initiative), shall equitably adjust such contractual provisions as may
be affected by the decrease, substitution or withdrawal, in accordance
with the procedures provided for in the "Changes" clause of this
contract.
(c) Title. Title to all property furnished by the Government shall
remain in the Government. Title to all property purchased by the
Contractor, for the cost of which the Contractor is entitled to be
reimbursed as a direct item of cost under this contract, shall pass to
and vest in the Government upon delivery of such property by the
vendor. Title to other property, the cost of which is reimbursable to
the Contractor under the contract, shall pass to and vest in the
Government upon (i) issuance for use of such property in the per-
formance of this contract, or (ii) commencement of processing or use
of such property in the performance of this contract, or (iii) reim-
bursement of the cost thereof by the Government in whole or in
part, whichever first occurs. All Government-furnished property,
together with all property acquired by the Contractor title to which
vests in the Government under this paragraph, are subject to the
provisions of this clause and are hereinafter collectively referred to
as "Government property." Title to the Government property shall
not be affected by the incorporation or attachment thereof to any
property not owned by the Government, nor shall such Government
property, or any part thereof, be or become a fixture or lose its
identity as personalty by reason of affixation to any realty.
(d) Property Administration. The Contractor shall comply with
the provisions of Appendix B, Armed Services Procurement Regu-
lation, as in effect on the date of the contract, which is hereby
incorporated by reference and made a part of this contract. Material
to be furnished by the Government shall be ordered or returned by
the Contractor, when required, in accordance with the "Manual for
Military Standard Requisitioning and Issue Procedure (MILSTRIP)
for Defense Contractors" (Appendix II, Armed Services Procure-
ment Regulation) as in effect on the date of this contract, which
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Manual is hereby incorporated by reference and made a part of this
contract.
(e) Use of Government Property. The Government property shall,
unless otherwise provided herein or approved by the Contracting
Officer, be used only for the performance of this contract.
(f) Utilization, Maintenance and Repair of Government Property.
The Contractor shall maintain and administer, in accordance with
sound industrial practice, and in accordance with applicable pro-
visions of Appendix B, a program for the utilization, maintenance,
repair, protection and preservation of Government property so as to
assure its full availability and usefulness for the performance of this
contract. The Contractor shall take all reasonable steps to comply
with all appropriate directions or instructions which the Contracting
Officer may prescribe as reasonably necessary for the protection of
Government property.
(g) Risk of Loss.
(1) The Contractor shall not be liable for any loss of or damage
to the Government property, or for expenses incidental to such loss
or damage, except that the Contractor shall be responsible for any
such loss or damage (including expenses incidental thereto):
(i) which results from willful misconduct or lack of good faith
on the part of any one of the Contractor's directors or officers,
or on the part of any of his managers, superintendents, or other
equivalent representatives, who has supervision or direction of--
(A) All or substantially all of the Contractor's business; or
(B) all or substantially all of the Contractor's operations
at any one plant or separate location, in which this contract
is being performed; or
(C) a separate and complete major industrial operation in
connection with the performance of this contract;
(ii) which results from a failure on the part of the Contractor,
due to the willful misconduct or lack of good faith on the part of
any of his directors, officers, or other representatives mentioned
in subparagraph (i) above --
(A) to maintain and administer, in accordance with sound
industrial practice, the program for utilization, maintenance,
repair, protection and preservation of Government property
as required by paragraph (f) hereof, or to take all reasonable
steps to comply with any appropriate written directions of the
Contracting Officer under paragraph (f) hereof; or
(B) to established, maintain and administer, in accordance
with (d) above, a system for control of Government property;
(iii) for which the Contractor is otherwise responsible under
the express terms of the clause or clauses designated in the
Schedule;
(iv) which results from a risk expressly required to be insured
under this contract, but only to the extent of the insurance so
required to be procured and maintained, or to the extent of
insurance actually procured and maintained, whichever is
greater; or
(v) which results from a risk which is in fact covered by
insurance or for which the Contractor is otherwise reimbursed,
but only to the extent of such insurance or reimbursement.
Any failure of the Contractor to act, as provided in subparagraph
(ii) above, shall be conclusively presumed to be a failure resulting
from willful misconduct, or lack of good faith on the part of such
directors, officers, or other representatives mentioned in subpara-
graph (i) above, if the Contractor is notified by the Contracting
Officer by registered or certified mail addressed to one of such
directors, officers, or other representatives, of the Government's
disapproval, withdrawal of approval, or nonacceptance of the Con-
tractor's program or system. In such event, it shall be presumed that
any loss or damage to Government property resulted from such failure.
The Contractor shall be liable for such loss or damage unless he can
establish by clear and convincing evidence that such loss or damage
did not result from his failure to maintain an approved program or
system, or occurred during such time as an approved program or
system for control of Government property was maintained.
If more than one of the above exceptions shall be applicable
in any case, the Contractor's liability under any one exception
shall not be limited by any other exception. If the Contractor
transfers Government property to the possession and control of
a subcontractor, the transfer shall not affect the liability of the
Contractor for loss or destruction of or damage to the property
as set forth above. However, the Contractor shall require the
subcontractor to assume the risk of, and be responsible for, any
loss or destruction of or damage to the property while in the
latter's possession or control, except to the extent that the sub-
contract, with the prior approval of the Contracting Officer, pro-
vides for the relief of the subcontractor from such liability. In
the absence of such approval, the subcontract shall contain ap-
propriate provisions requiring the return of all Government property
in as good condition as when received, except for reasonable wear
and tear or for the utilization of the property in accordance with the
provisions of the prime contract.
(2) The Contractor shall not be reimbursed for, and shall
not include as an item of overhead, the cost of insurance, or any
provision for a reserve, covering the risk of loss of or damage to the
Government property, except to the extent that the Government
may have required the Contractor to carry such insurance under
any other provisions of this contract.
(3) Upon the happening of loss or destruction of or damage
to the Government property, the Contractor shall notify the Con-
tracting Officer thereof, and shall communicate with the Loss and
Salvage Organization, if any, now and hereafter designated by
the Contracting Officer, and with the assistance of the Loss and
Salvage Organization so designated (unless the Contracting Officer
has designated that no such organization be employed), shall
take all reasonable steps to protect the Government property from
further damage, separate the damaged and undamaged Government
property, put all the Government property in the best possible
order, and furnish to the Contracting Officer a statement of
(i) the lost, destroyed and damaged Government property;
(ii) the time and origin of the loss, destruction or damage;
(iii) all known interests in commingled property of which the
Government property is a part; and
(iv) the insurance, if any, covering any part of or interest in
such commingled property.
The Contractor shall make repairs and renovations of the damaged
Government property or take such other action, as the Contracting
Officer directs. For any such repairs or renovations so directed, the
Contracting Officer shall, upon written request of the Contractor,
equitably adjust the ceiling price, hourly rate, delivery or per-
formance date, or all of them in accordance with the procedures
provided for in the clause of this contract entitled "Changes."
In any such equitable adjustment due regard shall be given to
the liability of the Contractor as determined under (1) above.
(4) In the event the Contractor is indemnified, reimbursed,
or otherwise compensated for any loss or destruction of or damage
to the Government property, he shall use the proceeds to repair,
renovate or replace the Government property involved, or shall
credit such proceeds against the cost of the work covered by
the contract, or shall otherwise reimburse the Government, as
directed by the Contracting Officer. The Contractor shall do nothing
to prejudice the Government's right to recover against third
parties for any such loss, destruction, or damage and, upon the
request of the Contracting Officer, shall, at the Government's expense,
furnish to the Government all reasonable assistance and cooperation
(including the prosecution of suit and the execution of instruments
of assignment in favor of the Government) in obtaining recovery.
In addition, where the subcontractor has not been relieved from
liability for any loss or destruction of or damage to Government
property, the Contractor shall enforce the liability of the subcon-
tractor for such loss or destruction of of damage to the Government
property for the benefit of the Government.
(5) If this contract is for the development, production, modi-
fication, maintenance, or overhaul of aircraft, or otherwise involves
the furnishing of aircraft by the Government, the clause of this
contract entitled "Flight Risks" shall control, to the extent it is
applicable, in the case of loss or destruction of, or damage to,
aircraft.
(h) Access. The Government, and any persons designated by it,
shall at all reasonable times have access to the premises where any
of the Government property is located, for the purpose of inspecting
the Government property.
(i) Final Accounting and Disposition of Government Property.
Upon the completion of this contract, or at such earlier dates as
may be fixed by the Contracting Officer, the Contractor shall
submit, in a form acceptable to the Contracting Officer, inventory
schedules covering all items of Government property not consumed
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in the performance of this contract (including any resulting scrap)
or not theretofore delivered to the Government, and shall prepare
for shipment, delivery f.o.b. origin, or dispose of the Government
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.
(j) Restoration of Contractor's Premises and Abandonment. Unless
otherwise provided herein, the Government:
(i) may abandon any Government property in place, and
thereupon all obligations of the Government regarding such
abandoned property shall cease; and
(ii) has no obligation to the Contractor with regard to
restoration or rehabilitation of the Contractor's premises,
neither in case of abandonment (paragraph (j) (i) above),
disposition on completion of need or of the contract (paragraph
(i) above), nor otherwise, except for restoration or rehabilitation
costs caused by removal of Government property pursuant to
paragraph (b) above.
(k) Communications. All communications issued pursuant to this
clause shall be in writing or in accordance with the "Manual
for Military Standard Requisitioning and Issue Procedure (MIL-
STRIP) for Defense Contractors" (Appendix II, Armed Services
Procurement Regulation).
7-902.9 TECHNICAL DATA-WITHHOLDING OF PAYMENT
(1973 APR.)
(a) If "Technical Data" (as defined in the clause of this contract
entitled "Rights in Technical Data"), or any part thereof, specified
to be delivered under this contract, is not delivered within the time
specified by this contract or is deficient upon delivery (including
having restrictive markings not specifically authorized by this
contract), the Contracting Officer may until such data is accepted
by the Government, withhold payment to the Contractor of ten
percent (10%) of the total contract price or amount unless a lesser
withholding specified in the Schedule. Payments shall not be withheld
nor any other action taken pursuant to this paragraph when the
Contractor's failure to make timely delivery or to deliver such
data without deficiencies arises out of causes beyond the control and
without the fault or negligence of the Contractor.
(b) After payments total ninety percent (90%) of the total contract
price or amount and if all technical data specified to be delivered
under this contract has not been accepted. the Contracting Officer
may, withhold from further payment such sum as he considers
appropriate, not exceeding ten percent (10%) of the total contract
price or amount unless a lesser withholding limit is specified in the
Schedule.
(c) The withholding of any amount or subsequent payment to the
Contractor shall not be construed as a waiver of any rights accruing
to the Government under this contract.
When costs are a factor in any determination of a contract
price adjustment pursuant to the "Changes" clause or any other
provision of this contract, such costs shall be in accordance with
Section XV of the Armed Services Procurement Regulations, as in
effect on the date of this contract.
ARTICLE 14
7-902.10 ALTERATIONS IN CONTRACT (1949 JUL.)
The following alterations have been made in the provisions of this
contract:
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