GENERAL PROVISION COST-REIMBURSEMENT RESEARCH AND DEVELOPMENT CONTRACT (WITH FIXED FEE)

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Collection: 
Document Number (FOIA) /ESDN (CREST): 
CIA-RDP90B00224R000300260019-4
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RIFPUB
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K
Document Page Count: 
26
Document Creation Date: 
December 22, 2016
Document Release Date: 
August 22, 2011
Sequence Number: 
19
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Content Type: 
MISC
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PDF icon CIA-RDP90B00224R000300260019-4.pdf2.56 MB
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Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Clause No. Page No. 1. Definitions (Feb. 1962) (ASPR 7-103.1) . . . . . . . . . . . 1 2. Limitation of Cost (Feb. 1959) (ASPR 7-402.2) . . . . . . . . . 1 3. Allowable Cost, Fixed Fee, and Payment (Sept. 1962) (ASPR 7-402.3) 1 4. Standards of Work (Feb. 1959) (ASPR 7-402.4) . . . . . . . . 2 5. Inspection and Correction of Defects (May 1960) (ASPR 7-402.5) . 2 6. Assignment of Claims (Feb. 1962) (ASPR 7-103.8) . . . . . . . 3 7. Examination of Records (Nov. 1962) (ASPR 7-203.7) . . . . . . 4 8. Subcontracts (Nov. 1962) (ASPR 7-402.8) . . . . . . . . . . 4 9. Utilization of Small Business Concerns (Jan. 1958) (ASPR 1-707.3) 5 10. Termination (Jul. 1962) (ASPR 8-702) . . . . . . . . . . . 5 11. Disputes (Jan. 1958) (ASPR 7-103.12) . . . . . . . . . . . . 8 12. Buy American Act (Jul. 1960) (ASPR 6-104.5) . . . . . . . . . 8 13. Convict Labor (Mar. 1949) (ASPR 12-203) . . . . . . . . . . 9 14. Walsh-Healey Public Contracts Act (Jan. 1958) (ASPR 12-604) . . 9 15. Nondiscrimination in Employment (Jul. 1962) (ASPR 12-802) . . . 9 16. Officials Not to Benefit (Jul. 1949) (ASPR 7-103.19) . . . . . . . 10 17. Covenant Against Contingent Fees (Jan. 1958) (ASPR 7-103.20) . 10 18. Authorization and Consent (Jan. 1961) (ASPR 9-102) . . . . . 10 19. Notice and Assistance Regarding Patent and Copyright Infringe- ment (Feb. 1962) (ASPR 9-104) . . . . . . . . . . . . . 10 20. Patent Rights (License) (Apr. 1962) (ASPR 9-107) . . . . . . . 10 21. Data (Feb. 1962) (ASPR 9-203.1) . . . . . . . . . . . . . 13 22. Military Security Requirements (Jun. 1958) (ASPR 7-104.12) . . . 14 23. Government Property (Aug. 1961) (ASPR 7-402.25) . . . . . . 15 24. Insurance-Liability to Third Persons (Jan. 1960) (ASPR 7-203.22) . 17 25. Utilization of Concerns in Labor Surplus Areas (Feb. 1962) . . . . 18 26. Payment for Overtime and Shift Premiums (Feb. 1962) (ASPR 1-805.3 (a) ) . . . . . . . . . . . . . . . . . . . . . 18 27. Competition in Subcontracting (Apr. 1962) (ASPR 7-104.40) . . . 18 28. Filing of Patent Applications (Jan. 1955) (ASPR 9-106) . . . . . 18 29. Excusable Delays (Jul. 1958) (ASPR 8-708) . . . . . . . . . . 19 30. Notice to the Government of Labor Disputes (Sep. 1958) (ASPR 7-403.10) . . . . . . . . . . . . . . . . . . . . . . 19 31. Gratuities (Mar. 1952) (ASPR 7-104.16) . . . . . . . . . . . 19 32. Limitation on Withholding of Payments (Feb. 1959) (ASPR 7-403.12) 19 33. Changes (Feb. 1959) (ASPR 7-404.1) . . . . . . . . . . . . 19 34. Stop Work Order (Jul. 1960) (ASPR 7-404.5) . . . . . . . . . 20 35. Reports of Work (Jul. 1960) (ASPR 7-404.6) . . . . . . . . . . 20 36. Data-Withholding of Payment (Apr. 1962) (ASPR 9-207) . . . 20 37. Submission of Vouchers (Jun. 1959) . . . . . . . . . . . . . 21 38. Interest (Feb. 1962) (ASPR E-620) . . . . . . . . . . . . . 21 39. Competition in Subcontracting (Apr. 1962) (ASPR 7-402.29) . . . 21 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 INDEX TO GENERAL PROVISIONS (Continued) Clause No. Page No. 40. Utilization of Concerns in Labor Surplus Areas (Feb. 1962) (ASPR 7-402.27) . . . . . . . . . . . . . . . . . . . . 21 41. Work Hours Act of 1962-Overtime Compensation (Oct. 1962) (ASPR 12-303) . . . . . . . . . . . . . . . . 21 42. Audit (Nov. 1962) (ASPR 7-104.41) . . . . . . . . . . . 22 43. Price Reduction for Defective Cost or Pricing Data (Nov. 1962) (ASPR 7-104.29) . . . . . . . . . . . . . . . . . . . 22 44. Subcontractor Cost and Pricing Data (Nov. 1962) (ASPR 7-104.42) 22 45. Negotiated Overhead Rates (Dec. 1962) (ASPR 3-704.1) . . . . . 23 46. Alterations in Contract (Jul. 1949) (ASPR 7-105.1) . . . . . . . 24 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 COST-REIMBURSEMENT RESEARCH AND DEVELOPMENT CONTRACT (With Fixed Fee) 1. DEFINITIONS (Feb. 1962) As used throughout this contract, the following terms shall have the meanings set forth below: (a) The term "head of the agency" or "Secretary" means the Secretary, the Under Secretary, any As- sistant Secretary, or any other head or assistant head of the executive or military department or other Federal agency; and the term "his duly au- thorized representative" means any person or per- sons or board (other than the Contracting Officer) authorized to act for the head of the agency or the Secretary. (b) The term "Contracting Officer" means the person executing this contract on behalf of the Government, and any other officer or civilian em- ployee who is a properly designated Contracting Officer; and the term includes, except as otherwise provided in this contract, the authorized representa- tive of a Contracting Officer acting within the limits of his authority. (c) Except as otherwise provided in this contract, the term "subcontracts" includes purchase orders under this contract. (d) The term "contract work" means all work to be performed under this contract including with- out limitation any studies covering fundamental, theoretical, or experimental investigations; any ex- tension of the investigative findings and theories of a scientific or technical nature into practical ap- plication; any tangible items, hereinafter referred to as "supplies," furnished to the Government; and any reports, data, computations, plans, drawings, and specifications with respect to any of the fore- going. (Oct. 1957) 2. LIMITATION OF COST (Feb. 1959) (a) It is estimated that the total cost to the Gov- ernment, exclusive of any fixed fee, for the per- formance of this contract will not exceed the esti- mated cost set forth in the Schedule, and the Con- tractor agrees to use his best efforts to perform the work specified in the Schedule, and all obligations under this contract within such estimated cost. If at any time the Contractor has reason to believe that the costs which he expects to incur in the per- formance of this contract in the next succeeding sixty (60) days, when added to all costs previously incurred, will exceed seventy-five per cent (75%) of the estimated cost then set forth in the Schedule, or if at any time, the Contractor has reason to believe that the total cost to the Government, ex- clusive of any fixed fee, for the performance of this contract will be substantially greater or less than the then estimated cost thereof, the Contractor shall notify the Contracting Officer in writing to that effect, giving the revised estimate of such total cost for the performance of this contract. (b) The Government shall not be obligated to reimburse the Contractor for costs incurred in ex- cess of the estimated cost set forth in the Schedule, and the Contractor shall not be obligated to con- tinue performance under the contract or to incur costs in excess of the estimated cost set forth in the Schedule, unless and until the Contracting Officer shall have notified the Contractor in writing that such estimated cost has been increased and shall have specified in such notice a revised estimated cost which shall thereupon constitute the estimated cost of performance of this contract. When and to the extent that the estimated cost set forth in the Schedule has been increased, any costs incurred by the Contractor in excess of such estimated cost prior to the increase in estimated cost shall be allowable to the same extent as if such costs had been in- curred after such increase in estimated cost. 3. ALLOWABLE COST, FIXED FEE, AND PAY- MENT (Sept. 1962) (a) For the performance of this contract, the Government shall pay to the Contractor: (i) the cost thereof (hereinafter referred to as "allowable cost") determined by the Contracting Officer to be allowable in accordance with- (A) Part 2 of Section XV of the Armed Services Procurement Regulation as in effect on the date of this contract; and (B) the terms of this contract; and (ii) such fixed fee, if any, as may be provided for in the Schedule. (b) Once each month (or at more frequent in- tervals, if approved by the Contracting Officer) the Contractor may submit to an authorized representa- tive of the Contracting Officer, in such form and reasonable detail as such representative may re- quire, an invoice or public voucher supported by a statement of cost incurred by the Contractor in the performance of this contract and claimed to con- stitute allowable cost. Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 (c) Promptly after receipt of each invoice or voucher the Government shall, subject to the pro- visions of (d) below, make payment thereon as ap- proved by the Contracting Officer. Payment of the fixed fee, if any, shall be made to the Contractor as specified in the Schedule; Provided, however, that after payment of eighty-five per cent (85%) of the fixed fee set forth in the Schedule, further payment on account of the fixed fee shall be with- held until a reserve of either fifteen per cent (15%) of the total fixed fee, or one hundred thousand dollars ($100,000), whichever is less, shall have been set aside. (d) At any time or times prior to final payment under this contract the Contracting Officer may have the invoices or vouchers and statements of cost audited. Each payment theretofore made shall be subject to reduction for amounts included in the related invoice or voucher which are found by the Contracting Officer, on the basis of such audit, not to constitute allowable cost. Any payment may be reduced for overpayments, or increased for under- payments, on preceding invoices or vouchers. (e) On receipt and approval of the invoice or voucher designated by the Contractor as the "com- pletion invoice" or "completion voucher" and upon compliance by the Contractor with all the provi- sions of this contract (including, without limitation, the provisions relating to patents and the provisions of (f) below), the Government shall promptly pay to the Contractor any balance of allowable cost, and any part of the fixed fee which has been with- held pursuant to (c) above or otherwise not paid to the Contractor. The completion invoice or voucher shall be submitted by the Contractor promptly fol- lowing 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 agrees that any refunds, re- bates, credits, or other amounts (including any interest thereon) accruing to or received by the Contractor or any assignee under this contract shall be paid by the Contractor to the Government, to the extent that they are properly allocable to costs for which the Contractor has been reimbursed by the Government under this contract. Reason- able expenses incurred by the Contractor for the purpose of securing such refunds, rebates, credits, or other amounts shall be allowable costs hereunder when approved by the Contracting Officer. Prior to final payment under this contract, the Contrac- tor and each assignee under this contract whose assignment is in effect at the time of final payment under this contract shall execute and deliver- (s) an assignment to the Government, in form and substance satisfactory to the Contracting Officer, of refunds, rebates, credits, or other amounts (including any interest thereon) properly allocable to costs for which the Contractor has been reim- bursed by the Government under this contract; and (ii) a release discharging the Government, its officers, agents, and employees from all liabilities, obligations, and claims arising out of or under this contract, subject only to the following exceptions- (A) specified claims in stated amounts or in estimated amounts where the amounts are not susceptible of exact statement by the Contractor; (B) claims, together with reasonable expenses incidental thereto, based upon liabilities of the Con- tractor to third parties arising out of the perform- ance of this contract; provided, that such claims are not known to the Contractor on the date of the execution of the release; provided further, that the Contractor gives notice of such claims in writ- ing 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 (C) claims for reimbursement of costs (other than expenses of the Contractor by reason of any indemnification of the Government against patent liability), including reasonable expenses incidental thereto, incurred by the Contractor under the pro- visions of this contract relating to patents. (g) Any cost incurred by the Contractor under the terms of this contract which would constitute allowable cost under the provisions of this clause shall be included in determining the amount pay- able under this contract, notwithstanding any pro- visions contained in the specifications or other docu- ments incorporated in this contract by reference, designating services to be performed or materials to be furnished by the Contractor at his expense or without cost to the Government. 4. STANDARDS OF WORK (Feb. 1959) The Contractor agrees that the performance of work and services, pursuant to the requirements of this contract, shall conform to high professional standards. 5. INSPECTION AND CORRECTION OF DEFECTS (May 1960) (a) All work under this contract shall be subject to inspection and test by the Government (to the extent practicable) at all times (including the period of performance) and places, and in any event prior to acceptance. The Contractor shall provide and maintain an inspection system ac- ceptable to the Government covering the work hereunder. The Government, through any author- ized 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 subcontrac- Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 tor, the Contractor shall provide and shall require subcontractors to provide all reasonable facilities and assistance for the safety and convenience of the Government inspectors in the performance of their duties. All inspections and tests by the Gov- ernment shall be performed in such a manner as will not unduly delay the work. Except as other- wise provided in this contract, final inspection, and acceptance 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 ninety (90) days after the date of such delivery, if ac- ceptance has not been made earlier within such period. (b) At any time during performance of this con- tract, but not later than six (6) months (or such other time as may be provided in the Schedule) after acceptance of all of the end items (other than designs, drawings, or reports) to be delivered under this contract, the Government may require the Contractor to remedy by correction or replacement, as directed by the Contracting Officer, any failure by the Contractor to comply with the requirements of this contract. Any time devoted to such correc- tion or replacement shall not be included in the computation of the period of time specified in the preceding sentence, except as provided in (d) below. Except as otherwise provided in paragraph (c) below, the allowability of the cost of any such re- placement or correction shall be determined as pro- vided in the clause of this contract entitled "Allow- able Cost, Fixed Fee, and Payment," but no addi- tional fee shall be payable with respect thereto. Corrected articles shall not be tendered again for acceptance unless the former tender and the re- quirement of correction is disclosed. If the Con- tractor fails to proceed with reasonable promptness to perform such replacement or correction, the Gov- ernment (i) may by contract or otherwise perform such replacemnt or correction and charge to the Contractor any increased cost occasioned the Gov- ernment thereby, or may reduce any fixed fee pay- able under this contract (or require repayment of any fixed fee theretofore paid) in such amount as may be equitable under the circumstances, or (11) in the case of articles not delivered, may require the delivery of such articles, and shall have the right to reduce any fixed fee payable under this contract (or to require repayment of any fixed fee thereto- fore paid) in such amount as may be equitable under the circumstances, or (iii) may terminate this contract for default. Failure to agree to the amount of any such increased cost to be charged to the Contractor or to such reduction in, or repay- ment of, the fixed fee shall be deemed to be a dispute concerning a question of fact within the meaning of the clause of this contract entitled "Disputes." (c) Notwithstanding the provisions of paragraph (b) above, the Government may at any time require the Contractor to remedy by correction or replace- ment, without cost to the Government, any failure 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 supervi- sion or direction of (I) all or substantially all of the Contractor's business, or (ii) all or substantially all of the Contractor's operations at any one plant or separate location in which this contract is being performed, or (111) a separate and complete major industrial operation in connection with the per- formance of this contract. The Government may at any time also require the Contractor to remedy by correction or replacement, without cost to the Government, any such failure caused by one or more individual employees selected or retained by the Contractor after any such supervisory person- nel has reasonable grounds to believe that any such employee is habitually careless or otherwise un- qualified. (d) The provisions of paragraph (b) above shall apply to any corrected or replacement end item or component until six months after its acceptance. (e) The Contractor shall make his records of all inspection work available to the Government during the 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 articles 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 Gov- ernment and delivered or otherwise made available to the Contractor) shall be governed by the pro- visions of the clause of this contract entitled "Gov- ernment Property." 6. ASSIGNMENT OF CLAIMS (Feb. 1962) (a) Pursuant to the provisions of the Assignment of Claims Act of 1940, as amended (31 U.S.C. 203, 41 U.S.C. 15), if this contract provides for payments aggregating $1,000 or more, claims for monies due or to become due the Contractor from the Govern- ment under this contract may be assigned to a bank, trust company, or other financing institution, including any Federal lending agency, and may thereafter be further assigned and reassigned to any such institution. Any such assignment or re- assignment 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 par- Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 ties participating in such financing. Unless other- wise provided in this contract, payments to an as- signee 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 fur- nished to any assignee of any claim arising under this contract or to any other person not entitled to receive the same. However, a copy of any part or all of this contract so marked may be furnished, or any information contained therein may be dis- closed, to such assignee upon the prior written au- thorization of the Contracting Officer. 7. EXAMINATION OF RECORDS (Nov. 1962) (a) (1) The Contractor agrees to maintain books, records, documents, and other evidence pertaining to the costs and expenses of this contract (herein- after collectively called the "records") to the extent and in such detail as will properly reflect all net costs, direct and indirect, of labor, materials, equip- ment, supplies and services, and other costs and expenses of whatever nature for which reimburse- ment is claimed under the provisions of this con- tract. (2) The Contractor agrees to make available at the office of the Contractor at all reasonable times during the period set forth in subparagraph (4) be- low any of the records for inspection, audit or re- production by any authorized representative of the Department or of the Comptroller General. (3) In the event the Comptroller General or any of his duly authorized representatives determines that his audit of the amounts reimbursed under this contract as transportation charges will be made at a place other than the office of the Contractor, the Contractor agrees to deliver, with the reimburse- ment voucher covering such charges or as may be otherwise specified within two years after reim- bursement of charges covered by any such voucher, to such representative as may be designated for that purpose through the Contracting Officer such documentary evidence in support of transportation costs as may be required by the Comptroller Gen- eral or any of his duly authorized representatives. (4) Except for documentary evidence delivered to the Government pursuant to subparagraph (3) above, the Contractor shall preserve and make available his records (I) for a period of three years from the date of final payment under this contract, and (ii) for such longer period, if any, as is required by applicable statute, by any other clause of this contract, or by (A) or (B) below. (A) If this contract is completely or partially terminated, the records relating to the work ter- minated shall be preserved and made available for a period of three years from the date of any final settlement. (B) Records which relate to (1) appeals under the Disputes clause of this contract, (ii) litigation or the settlement of claims arising out of the per- formance of this contract, or (iii) cost and expenses of this contract as to which exception has been taken by the Comptroller General or any of his duly authorized representatives, shall be retained by the Contractor until such appeals, litigation, claims, or exceptions have been disposed of. (5) Except for documentary evidence delivered pursuant to subparagraph (3) above, and the rec- ords described in subparagraph (4) (B) above, the Contractor may in fulfillment of his obligation to retain his records as required by this clause sub- stitute photographs, microphotographs, or other authentic reproductions of such records, after the expiration of two years following the last day of the month of reimbursement to the Contractor of the invoice or voucher to which such records relate, unless a shorter period is authorized by the Con- tracting Officer with the concurrence of the Comp- troller General or his duly authorized representa- tive. (6) The provisions of this paragraph (a), includ- ing this subparagraph (6), shall be applicable to and included in each subcontract hereunder which is on a cost, cost-plus-a-fixed-fee, time-and-ma- terial or labor-hour basis. (b) The Contractor further agrees to include in each of his subcontracts hereunder, other than those set forth in subparagraph (a) (6) above, a provision to the effect that the subcontractor agrees that the Comptroller General or the Department, or any of their duly authorized representatives, shall, until the expiration of three (3) years after final payment under the subcontract, have access to and the right to examine any directly pertinent books, documents, papers, and records of such sub- contractor, involving transactions related to the subcontract. The term "subcontract," as used in this paragraph (b) only, excludes (I) purchase or- ders not exceeding $2,500 and (ii) subcontracts or purchase orders for public utility services at rates established for uniform applicability to the general public. 8. SUBCONTRACTS (Nov. 1962) (a) The Contractor shall give advance notifica- tion to the Contracting Officer of any proposed sub- contract hereunder which (i) is on a cost, cost-plus- a-fee, time and material, or labor-hour basis, or (ii) is on a fixed-price basis exceeding in dollar amount either $25,000 or five per cent (5%) of the total estimated cost of this contract. (b) In the case of a proposed subcontract which (I) is on a cost, cost-plus-a-fee, time and material, or labor-hour basis and which would involve an estimated amount in excess of $10,000, including Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 any fee; or (ii) is proposed to exceed $100,000; or (iii) is one of a number of subcontracts under this contract with a single subcontractor for the same or related supplies or services which, in the aggre- gate are expected to exceed $100,000; the advance notification required by (a) above shall include: (1) a description of the supplies or services to be called for by the subcontract; (2) identification of the proposed subcontractor and an explanation of why and how the proposed subcontractor was selected, including the degree of competition obtained; (3) the proposed subcontract price, together with the Contractor's cost of price analysis thereof, in- cluding curent, complete and correct cost or pric- ing data accompanied, except when the requirement is specifically waived by the Contracting Officer, by a certificate from the subcontractor to the effect that all cost or pricing data has been considered by the subcontractor in preparing his proposal and that such data is current, and has been provided the Contractor; and (4) identification of the type of contract proposed to be used. (c) The Contractor shall not, without the prior written consent of the Contracting Officer, place any subcontract which (i) is on a cost or cost-plus- a-fee basis, or (ii) is on a fixed-price basis exceed- ing in dollar amount either $25,000 or five per cent (5%) of the total estimated cost of this contract, or (iii) provides for the fabrication, purchase, rent- al, installation, or other acquisition, of any item of industrial facilities, or of special tooling having a value in excess of $1,000, or (iv) is on a time and material or labor-hour basis, or (v) has experimen- tal, developmental, or research work as one of its purposes. The Contracting Officer may, in his dis- cretion, ratify in writing any such subcontract; such action shall constitute the consent of the Contract- ing Officer as required by this paragraph (c). (d) The Contractor agrees that no subcontract placed under this contract shall provide for pay- ment on a cost-plus-a-percentage-of-cost basis. (e) 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 re- quired by this clause shall not be construed to con- stitute a determination of the allowabiilty of any cost under this contract, unless such approval spe- cifically provides that it constitutes a determination of the allowability of such cost. (f) The Contractor shall give the Contracting Officer immediate notice in writing of any action or suit filed, and prompt notice of any claim made against the Contractor by any subcontractor or vendor which, in the opinion of the Contractor, may result in litigation, related in any way to this contract with respect to which the Contractor may be entitled to reimbursement from the Government. (g) Notwithstandng (c) above the Contractor may enter into subcontracts within (ii), or, if the subcontract is for special tooling, within (iii), of (c) above, without the prior written consent of the Contracting Officer if the Contracting Officer has, in writing, approved the Contractor's purchasing system and the subcontract is within the limita- tions of such approval. (h) The Contractor shall (i) insert in each price redetermination or incentive price revision subcon- tract hereunder the substance of the "Limitation on Payments" provision set forth in paragraph (f) of the clause prescribed by paragraph 7-108 of the Armed Services Procurement Regulation, including subparagraph (4) thereof, modified to omit mention of the Government and reflect the position of the Contractor as purchaser and of the subcontractor as vendor, and to omit that portion of subparagraph (3) thereof relating to tax credits, and (ii) include in each cost-reimbursement type subcontract here- under a requirement that each price redetermina- tion and incentive price revision subcontract there- under will contain the substance of the "Limita- tion on Payments" provision, including subpara- graph (4) thereof, modified as outlined in (I) above. (I) To facilitate small business participation in subcontracting under this contract, the Contractor agrees to provide progress payments on the fixed- price types of subcontracts of those subcontractors which are small business concerns, in conformity with the standards for customary progress pay- ments stated in paragraphs 503 and 514 of Appen- dix E of the Armed Services Procurement Regula- tion, as in effect on the date of this contract. The Contractor further agrees that the need for such progress payments will not be considered as a handicap or adverse factor in the award of sub- contracts. 9. UTILIZATION OF SMALL BUSINESS CONCERNS (Jan. 1958) (a) It is the policy of the Government as declared by the Congress that a fair proportion of the pur- chases and contracts for supplies and services for the Government be placed with small business con- cerns. (b) The Contractor agrees to accomplish the maximum amount of subcontracting to small busi- ness concerns that the Contractor finds to be con- sistent with the efficient performance of this con- tract. 10. TERMINATION (Jul. 1962) (a) The performance of work under the contract may be terminated by the Government in accord- ance with this clause in whole, or from time to time in part: (I) whenever the Contractor shall default in per- formance of this contract in accordance with its terms (including in the term "default" any such Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 failure by the Contractor to make progress in the prosecution of the work hereunder as endangers such performance), and shall fail to cure such de- fault within a period of ten 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 interests of the Government. Any such termination shall be effected by delivery to the Contractor of a Notice of Termination speci- fying whether termination is for the default of the Contractor or for the convenience of the Govern- ment, 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 (1) above, it is determined for any reason that the Contractor was not in default pur- suant to (1), or that the Contractor's failure to per- form 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 pro- visions of the clause of this contract relating to excusable delays, the Notice of Termination shall be 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 under the contract on the date and to the extent specified in the Notice of Termina- tion; (fi) place no further orders or subcontracts for materials, services, or facilities, except as may be necessary for completion of such portion of the work under the contract as is not terminated; (iii) terminate all orders and subcontracts to the extent that they relate to the performance of work terminated by the Notice of Termination; (iv) assign to the Government, in the manner and to the extent directed by the Contracting Officer, all of the 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 Con- tracting 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 termina- tion of orders and subcontracts, the cost of which would be reimbursable in whole or in part, in ac- cordance 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 times directed by the Contract- ing Officer, deliver to the Government (A) the fabri- cated or unfabricated parts, work in process, com- pleted work, supplies, and other material produced as a part of, or acquired in respect of the perform- ance of, the work terminated by the Notice of Ter- mination, (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, and 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; (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 pay- ments to be made by the Government to the Con- tractor under this contract or shall otherwise be credited to the price or cost of the work covered by this contract or paid in such other manner as the Contracting Officer may direct; (viii) complete performance of such part of the work as shall not have been terminated by the Notice of Termination; and (ix) take such action as may be necessary, or as the Contracting Officer may direct, for the protec- tion and preservation of the property related to this contract which is in the possession of Contrac- tor in which the Government has or may acquire an interest. The Contractor shall proceed immediately with the performance of the above obligations notwith- standing any delay in determining or adjusting the amount of the fee, or any item of reimbursable cost, under this clause. At any time after expira- tion of the plant clearance period, as defined in Section VIII, Armed Services Procurement Regula- tion, 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 Con- tracting Officer, and may request the Government to remove such items or enter into a storage agree- ment covering them. Not later than fifteen (15) days thereafter, the Government will accept such items and remove them or enter into a storage Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 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 sub- mitted 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 promptly but in no event later than one year from the effective date of termination, unless one or more extensions in writing are granted by the Contracting Officer, upon request of the Contractor made in writing within such one year period or authorized extension thereof. However, If the Contracting Officer deter- mines 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 ex- tension thereof. Upon failure of the Contractor to submit his termination claim within the time allowed, the Contracting Officer may, subject to any Settlement Review Board approvals required by Sec- tion VIII of the Armed Services Procurement Regu- lation in effect as of the date of execution of this contract, determine, on the basis of information available to him, the amount, if any, due to the Contractor by reason of the termination and shall thereupon pay to the Contractor the amount so determined. (d) Subject to the provisions of paragraph (c), and subject to any Settlement Review Board ap- provals required by Section VIII of the Armed Serv- ices Procurement Regulation in effect as of the date of execution of this contract, the Contractor and the Contracting Officer may agree upon the whole or any part of the amount or amounts to be paid (including an allowance for the fee) to the Con- tractor 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 Contracting Officer to agree in whole or in part, as provided in paragraph (d), as to the amounts with respect to costs and fee, or as to the amount of the fee, to be paid to the Contractor in connection with the termination of work pursuant to this clause, the Contracting Officer shall, sub- ject to any Settlement Review Board approvals re- quired by Section VIII of the Armed Services Pro- curement Regulation in effect as of the date of execution of this contract, determine, on the basis of information available to him, the amount, if any, due to the Contractor by reason of the termination and shall pay to the Contractor the amount deter- mined as follows: (1) if the settlement includes cost and fee- (A) there shall be included therein all costs and expenses reimbursable in accordance with this con- tract, not previously paid to the Contractor for the performance of this contract prior to the effec- tive date of the Notice of Termination, and such of these costs as may continue for a reasonable time thereafter with the approval of or as directed by the Contracting Officer; provided, however, that the Contractor shall proceed as rapidly as practi- cable to discontinue such costs; (B) there shall be included therein so far as not included under (A) 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 charge- able to the terminated portion of the contract; (C) there shall be included therein the reason- able costs of settlement, including accounting, legal, clerical, and other expenses reasonably necessary for the preparation of settlement claims and sup- porting data with respect to the terminated portion of the contract and for the termination and settle- ment of subcontracts thereunder, together with reasonable storage, transportation, and other costs incurred in connection with the protection or dis- position of termination inventory; provided, how- ever, that if the termination is for default of the Contractor there shall not be included any amounts for the preparation of the Contractor's settlement proposal; and (D) there shall be included therein a portion of the fee payable under the contract determined as follows- (I) in the event of the termination of this con- tract for the convenience of the Government and not for the default of the Contractor, there shall be paid a percentage of the fee equivalent to the percentage of the completion of work contemplated by the contract, less fee payments previously made hereunder; or (II) in the event of termination of this con- tract for the default of the Contractor, the total fee payable shall be such proportionate part of the fee (or, if this contract calls for articles of different types, of such part of the fee as is reasonably allocable to the type of article under consideration) as the total number of articles delivered to and ac- cepted by the Government bears to the total num- ber of articles of a like kind called for by this contract; if the amount determined under this subparagraph (I) is less than the total payment theretofore made to the Contractor, the Contractor shall repay to the Government the excess amount; or (ii) if the settlement includes only the fee, the amount thereof will be determined in accordance with subparagraph (I) (D) above. Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 (f) The Contractor shall have the right of ap- peal, under the clause of this contract entitled "Disputes," from any determination made by the Contracting Officer under paragraphs (c) or (e) above, except that if the Contractor has failed to submit his claim within the time provided in para- graph (c) above and has failed to request exten- sion 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 ap- peal 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. (g) In arriving at the amount due the Contractor under this clause there shall be deducted (i) all unliquidated advance or other payments thereto- fore made to the Contractor, applicable to the ter- minated portion of this contract, (ii) any claim which the Government may have against the Con- tractor 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 cred- ited to the Government. (h) In the event of a partial termination, the portion of the fee which is payable 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. (i) The Government may from time to time, under such terms and conditions as it may pre- scribe, make partial payments and payments on account against costs incurred by the Contractor in connection with the terminated portion of the con- tract 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 of 6 percent per annum, for the period from the date such excess payment is received by the Contractor to the date on which such excess is repaid to the Government; provided, however, that no interest shall be charged with respect to any such excess payment attributable to a reduction in the Contrac- tor's claim by reason of retention or other disposi- tion of termination inventory until ten days after the date of such retention or disposition, or such later date as determined by the Contracting Officer by reason of the circumstances. (j) The provisions of this clause relating to the fee shall be inapplicable if this contract does not provide for payment of a fee. 11. DISPUTES (Jan. 1958) (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 Con- tracting Officer a written appeal addressed to the Secretary. The decision of the Secretary or his duly authorized representative for the determina- tion of such appeals shall be final and conclusive unless determined by a court of competent jurisdic- tion to have been fraudulent, or capricious, or arbi- trary, or so grossly erroneous as necessarily to im- ply bad faith, or not supported by substantial evi- dence. In connection with any appeal proceeding under this clause, the Contractor shall be afforded an opportunity to be heard and to offer evidence in support of his appeal. Pending final decision of a dispute hereunder, the Contractor shall proceed diligently with the performance of the contract and in accordance with the Contracting Officer's decision. (b) This "Disputes" clause does not preclude con- sideration of law questions in connection with deci- sions provided for in paragraph (a) above; pro- vided, that nothing in this contract shall be con- strued as making final the decision of any admin- istrative official, representative, or board on a ques- tion of law. (a) In acquiring end products, the Buy American Act (41 U.S.C. lOa-d) provides that the Government give preference to domestic source end products. For the purpose of this clause: (i) "components" means those articles, materials, and supplies, which are directly incorporated in the end products; (ii) "end products" means those articles, ma- terials, and supplies, which are to be acquired under this contract for public use; and (iii) a "domestic source end product" means (A) an unmanufactured end product which has been mined or produced in the United States and (B) an end product manufactured in the United States if the cost of the components thereof which are mined, produced, or manufactured in the United States or Canada exceeds 50 percent of the cost of all its components. For the purposes of this (a) (iii) (B), components of foreign origin of the same Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 type or kind as the products referred to in (b) (ii) or (iii) of this clause shall be treated as components mined, produced, or manufactured in the United States. (b) The Contractor agrees that there will be de- livered under this contract only domestic source end products, except end products: (I) which are for use outside the United States; (ii) which the Government determines are not mined, produced, or manufactured in the United States in sufficient and reasonably available com- mercial quantities and of a satisfactory quality; (iii) as to which the Secretary determines the domestic preference to be inconsistent with the public interest; or (iv) as to which the Secretary determines the cost to the Government to be unreasonable. (The foregoing requirements are administered in accordance with Executive Order No. 10582, dated December 17, 1954.) 13. CONVICT LABOR (Mar. 1949) In connection with the performance of work under this contract, the Contractor agrees not to employ any person undergoing sentence of im- prisonment at hard labor. 14. WALSH-HEALEY PUBLIC CONTRACTS ACT (Jan. 1958) If this contract is for the manufacture or fur- nishing of materials, supplies, articles, or equip- ment 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.C. 35-45), there are hereby incorporated by reference all representations and stipulations required by said Act and regulations issued thereunder by the Sec- retary of Labor, such representations and stipula- tions being subject to all applicable rulings and in- terpretations of the Secretary of Labor which are now or may hereafter be in effect. 15. NONDISCRIMINATION IN EMPLOYMENT (Jul. 1962) The following clause is applicable unless this con- tract is exempt under the rules and regulations of the President's Committee on Equal Employment Opportunity issued pursuant to Executive Order No. 10925 of March 6, 1961 (26 FR 1977).) In connection with the performance of work un- der this contract, the Contractor agrees as follows: (a) The Contractor will not discriminate against any employee or applicant for employment because of race, creed, color, or national origin. The Con- tractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color, or national origin. Such action shall include, but not be limited to, the following: employment, upgrading, demotion, or transfer; re- cruitment or recruitment advertising; layoff or ter- mination; rates of pay or other forms of compen- sation; and selection for training, including ap- prenticeship. The Contractor agrees to post in conspicuous places, available to employees and ap- plicants for employment, notices to be provided by the Contracting Officer setting forth the provisions of this Nondiscrimination in Employment clause. (b) The Contractor will, in all solicitations or ad- vertisements for employees placed by or on behalf of the Contractor, state that all qualified applicants will receive consideration for employment without regard to race, creed, color, or national origin. (c) The Contractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice, to be provided by the Contracting Officer, advising the said labor union or workers' representative of the Contractor's com- mitments under this section, and shall post copies of the notice in conspicuous places available to em- ployees and applicants for employment. (d) The Contractor will comply with all pro- visions of Executive Order No. 10925 of March 6, 1961, and of the rules, regulations, and relevant orders of the President's Committee on Equal Em- ployment Opportunity in effect as of the date of this contract. (e) The Contractor will furnish all information and reports required by Executive Order No. 10925 of March 6, 1961, and by the rules, regulations, and orders of the said Committee, or pursuant thereto, and will permit access to his books, records, and ac- counts by the contracting agency and the Commit- tee for purposes of investigation to ascertain com- pliance with such rules, regulations, and orders. (f) In the event of the Contractor's noncompli- ance with the Nondiscrimination in Employment clause of this contract or with any of the said rules, regulations, or orders, this contract may be can- celled in whole or in part and the Contractor may be declared ineligible for further Government con- tracts in accordance with procedures authorized in Executive Order No. 10925 of March 6, 1961, and such other sanctions may be imposed and remedies invoked as provided in the said Executive Order or by rule, regulation, or order of the President's Com- mittee on Equal Employment Opportunity, or as otherwise provided by law. (g) The Contractor will include the provisions of the foregoing paragraphs (a) through (f) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the President's Com- mittee on Equal Employment Opportunity issued pursuant to Section 303 of Executive Order No. 10925 of March 6, 1961, so that such provisions will be Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 binding upon each subcontractor or vendor.* The Contractor will take such action with respect to any subcontract or purchase order as the contracting agency may direct as a means of enforcing such provisions, including sanctions for noncompliance: Provided, however, that in the event the Contractor becomes involved in, or is threatened with, litiga- tion with a subcontractor or vendor as a result of such direction by the contracting agency, the Con- tractor may request the United States to enter into such litigation to protect the interests of the United States. 16. OFFICIALS NOT TO BENEFIT (Jul. 1949) No member of or delegate to Congress, or resident commissioner, shall be admitted to any share or part of this contract, or to any benefit that may arise therefrom; but this provision shall not be construed to extend to this contract if made with a corporation for its general benefit. 17. COVENANT AGAINST CONTINGENT FEES (Jan. 1958) The Contractor warrants that no person or selling agency has been employed or retained to solicit or secure this contract upon an agreement or under- standing for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by the Contractor for the purpose of securing business. For breach or violation of this warranty the Government shall have the right to annul this contract without liability or in its dis- cretion, to deduct from the contract price or con- sideration, or otherwise recover, the full amount of such commission, percentage, brokerage or con- tingent fee. 18. AUTHORIZATION AND CONSENT (Jan. 1961) The Government hereby gives its authorization and consent for all use and manufacture of any in- vention described in and covered by a patent of the United States in the performance of this contract or any part hereof or any amendment hereto or any * The President's Committee on Equal Employment Opportunity interprets the first sentence of para- graph (g) to mean that the Contractor will include the provisions of the foregoing paragraphs (a) through (f) in every first-tier subcontract or pur- chase order, so that such provisions will be binding upon each such subcontractor or vendor, and will require each first-tier subcontractor or vendor similarly to include the provisions of paragraphs (a) through (f) in any subcontract or purchase order which he places, unless exempted by rules, regulations, or orders of the President's Commit- tee on Equal Employment Opportunity issued pur- suant to section 303 of Executive Order 10925 of March 6, 1961. subcontract hereunder (including any lower-tier subcontract). 19. NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT INFRINGEMENT (Feb. 1962) The provisions of this clause shall be applicable only if the amount of this contract exceeds $10,000. (a) The Contractor shall report to the Contract- ing Officer, promptly and in reasonable written de- tail, each notice or claim of patent or copyright in- fringement based on the performance of this con- tract of which the Contractor has knowledge. (b) In the event of any suit against the Govern- ment, or any claim against the Government made before suit has been instituted, on account of any alleged patent or copyright infringement arising out of the performance of this contract or out of the use of any supplies furnished or work or serv- ices performed hereunder, the Contractor shall fur- nish to the Government, upon request, all evidence and information in possession of the Contractor pertaining to such suit or claim. Such evidence and information shall be furnished at the expense of the Government except in those cases in which the Contractor has agreed to idemnify the Govern- ment against the claim being asserted. 20. PATENT RIGHTS (LICENSE) (Apr. 1962) (a) As used in this clause, the following terms shall have the meanings set forth below: (1) The term "Subject Invention" means any in- vention, improvement, or discovery (whether or not patentable) conceived or first actually reduced to practice either- (A) in the performance of the experimental, de- velopmental, or research work called for or required under this contract; or (B) in the performance of any experimental, de- velopmental, or research work relating to the sub- ject matter of this contract which was done upon an understanding in writing that a contract would be awarded; provided, that the term "Subject In- vention" shall not include any invention which is specifically identified and listed in the Schedule for the purpose of excluding it from the license granted by this clause. (ii) The term "Technical Personnel" means any person employed by or working under contract with the Contractor (other than a subcontractor whose responsibilities with respect to rights accruing to the Government in inventions arising under sub- contracts are set forth in (g) and (h) below), who, by reason of the nature of his duties in connection with the performance of this contract, would rea- sonably be expected to make inventions. (iii) The terms "subcontract" and "subcontractor" mean any subcontract or subcontractor of the Con- tractor, and any lower-tier subcontract or subcon- tractor under this contract. Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 (b) (1) The Contractor agrees to and does hereby grant to the Government an irrevocable, nonexclu- sive, and royalty-free license to practice, and cause to be practiced by or for the United States Govern- ment, throughout the world, each Subject Invention in the manufacture, use, and disposition according to law, of any article or material, and in the use of any method. Such license (i) shall be nontrans- ferable, except that the Government shall have the right to grant sublicenses to any foreign gov- ernment or international organization specifically for use in programs established by International Agreements for research, development or produc- tion of weapons or equipment for mutual defense, and (ii) shall include the practice of Subject Inven- tion in the manufacture, use, and disposition of any article or material, in the use of any method, or in the performance of any service acquired by or for the Government or with funds derived through the Military Assistance Program of the Government or otherwise through the Government. (b) (1) (This paragraph applies if this contract has as one of its purposes the performance of re- search and development work under a space pro- gram, project or task and paragraph (b) (1) above is made inapplicable.) The Contractor agrees to and does hereby grant to the Government an ir- revocable, nonexclusive, and royalty-free license to practice, and cause to be practiced by or for the United States Government, throughout the world, each Subject Invention in the manufacture, use, and disposition according to law, of any article or material, and in the use of any method. Such license (i) shall be nontransferable, except that the Government shall have (a) the right to grant sub- licenses to any foreign government or international organization specifically for use in programs estab- lished by International Agreements for research, de- velopment or production of weapons or equipment for mutual defense and (b) the right to grant sub- licenses to others, under such terms and conditions as may be prescribed, for the practice of any Sub- ject Invention throughout the world in the design, development, manufacture, operation, maintenance and testing of communications satellite systems, and of equipment, components, and ground track- ing, transmitting and receiving facilities therefor, and (ii) shall include the practice of Subject Inven- tion in the manufacture, use, and disposition of any article or material, in the use of any method or in the performance of any service acquired by or for the Government or with funds derived through the Military Assistance Program of the Govern- ment or otherwise through the Government. (2) With respect to: (i) any Subject Invention made by other than Technical Personnel; and (ii) any Subject Invention conceived prior to, but first actually reduced to practice in the course of, any of the experimental, developmental, or research work specified in (a) (1) above; the obligation of the Contractor to grant a license as provided in (b) (1) above, to convey title as pro- vided in (d) (ii) (B) or (d) (iv) below, and to convey foreign rights as provided in (e) below, shall be limited to the extent of the Contractor's right to grant the same without incurring any obligation to pay royalties or other compensation to others solely on account of said grant. Nothing contained in this Patent Rights clause shall be deemed to grant any license under any invention other than a Sub- ject Invention. (c) The Contractor shall furnish to the Contract- ing 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 statement specifying whether or not a United States patent application claiming the Invention has been or will be filed by or on behalf of the Contractor; (ii) interim reports at least every twelve months, commencing with the date of this contract, each listing all such Inventions conceived or first ac- tually 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 practicable date and in any event not later than eight months after first publication, public use or sale. (ii) if the Contractor specifies that a United States patent application claiming such Invention has not been filed and will not be filed (or having specified that such an application will be filed thereafter notifies the Contracting Officer to the contrary), the Contractor shall: (A) inform the Contracting Officer in writing at the earliest practicable date of any publication of such Invention made by or known to the Contrac- tor or, where applicable, of any contemplated pub- lication by the Contractor, stating the date and identity of such publication or contemplated pub- lication; and Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 (B) convey to the Government the Contractor's entire right, title, and interest in such Invention by delivering to the Contracting Officer upon written request such duly executed instruments (prepared by the Government) of assignment and application, and such other papers as are deemed necessary to vest in the Government the Contractor's right, title, and interest aforesaid, and the right to apply for and prosecute patent applications covering such Invention throughout the world, subject, however, to the rights of the Contractor in foreign applica- tions as provided in (e) below, and subject further to the reservation of a nonexclusive and royalty-free license to the Contractor (and to his existing and future associated and affiliated companies, if any, within the corporate structure of which the Con- tractor is a part) which license shall be assignable to the successor of that part of the Contractor's business to which such Invention pertains; (iii) the Contractor shall furnish promptly to the Contracting Officer on request an irrevocable power of attorney to inspect and make copies of each United States patent application filed by or on be- half of the Contractor covering any such Invention; (iv) in the event the Contractor, or those other than the Government deriving rights from the Con- tractor, 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, upon written request, deliver to the Contract- ing Officer such duly executed instruments (pre- pared by the Government) as are deemed necessary to vest in the Government the Contractor's entire right, title, and interest in such Invention and the application, subject to the reservation as specified in (d) (1i) above; and (v) the Contractor shall deliver to the Contract- ing Officer duly executed instruments fully con- firmatory of any license rights herein agreed to be granted to the Government. (e) The Contractor, or those other than the Gov- ernment deriving rights from the Contractor, shall, as between the parties hereto, have the exclusive right to file applications on Subject Inventions in each foreign country within: (1) nine months from the date a corresponding United States application is filed; (ii) six months from the date permission is granted to file foreign applications where such filing had been prohibited for security reasons; or (iii) such longer period as may be approved by the Contracting Officer. The Contractor shall, upon written request of the Contracting Officer convey to the Government the Contractor's entire right, title, and interest in each Subject Invention in each foreign country in which an application has not been filed within the time above specified, subject to the reservation of a nonexclusive and royalty-free license to the Con- tractor together with the right of the Contractor to grant sublicenses, which license and right shall be assignable to the successor of that part of the Contractor's business to which the Subject Inven- tion pertains. (f) If the Contractor fails to deliver to the Con- tracting Officer the interim reports required by (c) (ii) above, or fails to furnish the written disclosures for all Subject Inventions required by (c) (1) above shown to be due in accordance with any interim report delivered under (c) (ii) or otherwise known to be unreported, there shall be withheld from pay- ment until the Contractor shall have corrected such failures either ten per cent (10%) of the amount of this contract, as from time to time amended, or five thousand dollars ($5,000), whichever is less. After payment of eighty per cent (80%) of the amount of this contract, as from time to time amended, payment shall be withheld until a reserve of either ten per cent (10%) of such amount, or five thousand dollars ($5,000), whichever is less, shall have been set aside, such reserve or balance thereof to be retained until the Contractor shall have fur- nished to the Contracting Officer: (i) the final report required by (c) (iii) above; (ii) written disclosures for all Subject Inventions required by (c) (i) above which are shown to be due in accordance with interim reports delivered under (c) (ii) above, or in accordance with such final re- ports, or are otherwise known to be unreported; and (iii) the information as to any subcontractor re- quired by (h) below. The maximum amount which may be withheld un- der this paragraph (f) shall not exceed ten per cent (10%) of the amount of this contract or five thousand dollars ($5,000), whichever is less, and no amount shall be withheld under this paragraph (f) when the amount specified by this paragraph (f) is being withheld under other provisions of this contract. The withholding of any amount or sub- sequent payment thereof to the Contractor shall not be construed as a waiver of any rights accruing to the Government under this contract. This para- graph (f) shall not be construed as requiring the Contractor to withhold any amounts from a sub- contractor to enforce compliance with the patent provisions of a subcontract. (g) The Contractor shall, unless otherwise au- thorized by the Contracting Officer as hereafter provided, include a patent rights clause containing all the provisions of this Patent Rights Clause ex- cept provision (f) in any subcontract hereunder of three thousand dollars ($3,000) or more having ex- perimental, developmental, or research work as one of its purposes. In the event of refusal by a sub- contractor to accept such a patent rights clause, the Contractor (i) shall promptly submit a written re- port to the Contracting Officer setting forth the subcontractor's reasons for such refusal and other Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 pertinent information which may expedite disposi- tion of the matter, and (11) shall not proceed with the subcontract without the written authorization of the Contracting Officer. Reports, instruments, and other information required to be furnished by a subcontractor to the Contracting Officer under the provisions of such a patent rights clause in a subcontract hereunder may, upon mutual consent of the Contractor and the subcontractor (or by di- rection of the Contracting Officer) be furnished to the Contractor for transmission to the Contract- ing Officer. (h) The Contractor shall, at the earliest practi- cable date, notify the Contracting Officer in writing of any subcontract containing one or more patent rights clauses; furnish the Contracting Officer a copy of each of such clauses; and notify the Con- tracting Officer when such subcontract is com- pleted. It is understood that with respect to any subcontract clause granting rights to the Govern- ment in Subject Inventions, the Government is a third party beneficiary; and the Contractor hereby assigns to the Government all the rights that the Contractor would have to enforce the subcontrac- tor's obligations for the benefit of the Government with respect to Subject Inventions. If there are no subcontracts containing patent rights clauses, a negative report is required. The Contractor shall not be obligated to enforce the agreements of any subcontractor hereunder relating to the obligations of the subcontractor to the Government in regard to Subject Inventions. (1) The Contractor recognizes that the Govern- ment, or a foreign government with funds derived through the Military Assistance Program or other- wise through the United States Government, may contract for property or services with respect to which the vendor may be liable to the Contractor for royalties for the use of a Subject Invention on account of such a contract. The Contractor fur- ther recognizes that it is the policy of the Govern- ment not to pay in connection with its contracts, or to allow to be paid in connection with contracts made with funds derived through the Military As- sistance Program or otherwise through the United States Government, charges for use of patents in which the Government holds a royalty-free license. In recognition of this policy, the Contractor agrees to participate in and make appropriate arrange- ments for the exclusion of such charges from such contracts or for the refund of amounts received by the Contractor with respect to any such charges not so excluded. 21. DATA (Feb. 1962) (a) The term "Subject Data" as used herein in- cludes writings, sound recordings, pictorial repro- ductions, drawings or other graphical representa- tions, and works of any similar nature (whether or not copyrighted) which are specified to be delivered under this contract. The term does not include financial reports, cost analyses, and other informa- tion incidental to contract administration. (b) The Contractor agrees to and does hereby grant to the Government, and to its officers, agents, and employees acting within the scope of their official duties, a royalty-free, nonexclusive and ir- revocable license throughout the world for Govern- ment purposes to publish, translate, reproduce, de- liver, perform, dispose of, and to authorize others so to do, all Subject Data now or hereafter covered by copyright. (c) The Contractor shall not include in the Sub- ject Data any copyrighted matter, without the written approval of the Contracting Officer, unless he provides the Government with the written per- mission of the copyright owner for the Government to use such copyrighted matter in the manner pro- vided in paragraph (b) above. (d) The Contractor shall report to the Contract- ing Officer, promptly and in reasonable written detail, each notice or claim of copyright infringe- ment received by the Contractor with respect to all Subject Data delivered under this contract. (e) Nothing contained in this clause shall imply a license to the Government under any patent or be construed as affecting the scope of any license or other right otherwise granted to the Government under any patent. (f) Unless otherwise limited below, the Govern- ment may duplicate, use, and disclose in any man- ner and for any purpose whatsoever, and have others so do, all Subject Data delivered under this contract. (g) The Contractor recognizes that the Govern- ment, or a foreign government with funds derived through the Mutual Security Program or otherwise through the United States Government, may con- tract for property or services with respect to which the vendor may be liable to the Contractor for charges for the use of Subject Data on account of such a contract. The Contractor further recognizes that it is the policy of the Government not to pay in connection with its contracts, or to allow to be paid in connection with contracts made with funds derived through the Mutual Security Program or otherwise through the United States Government, charges for data which the Government has a right to use and disclose to others, or which is in the public domain, or with respect to which the Gov- ernment has been placed in possession without restrictions upon its use and disclosure to others. This policy does not apply to reasonable reproduc- tion, handling, mailing, and similar administrative costs incident to the furnishing of such data. In recognition of this policy, the Contractor agrees to participate in and make appropriate arrangements for the exclusion of such charges from such con- tracts or for the refund of amounts received by the Contractor with respect to any such charges not so excluded. Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 (h) Notwithstanding any provisions of this con- tract concerning inspection and acceptance, the Government shall have the right at any time to modify, remove, obliterate or ignore any marking not authorized by the terms of this contract on any piece of Subject Data furnished under this contract. (I) Data need not be furnished for standard com- mercial items or services which are normally or have been sold or offered to the public commercially by any supplier and which are incorporated as component parts in or to be used with the product or process being developed if in lieu thereof iden- tification of source and characteristics (including performance specifications, when necessary) suffi- cient to enable the Government to procure the part or an adequate substitute, are furnished; and fur- ther, "proprietary data" need not be furnished for other items which were developed at private ex- pense and previously sold or offered for sale, includ- ing minor modifications thereof, which are incor- porated as component parts in or to be used with the product or process being developed, if in lieu thereof the Contractor shall identify such other items and that "proprietary data" pertaining there- to which is necessary to enable reproduction or manufacture of the item or performance of the process. For the purpose of this clause "proprietary data" means data providing information concern- ing the details of a Contractor's secrets of manu- facture, such as may be contained in but not limited to its manufacturing methods or processes, treat- ment and chemical composition of materials, plant layout and tooling, to the extent that such informa- tion is not disclosed by inspection or analysis of the product itself and to the extent that the Contractor has protected such information from unrestricted use by others. (Oct. 1958) 22. MILITARY SECURITY REQUIREMENTS (Jun. 1958) (a) The provisions of this clause shall apply to the extent that this contract involves access to in- formation classified "Confidential" including "Con- fidential-Modified Handling Authorized" or higher. (b) The Government shall notify the Contractor of the security classification of this contract and the elements thereof, and of any subsequent revisions in such security classification, by the use of a Secu- rity Requirements Check List (DD Form 254), or other written notification. (c) To the extent the Government has indicated as of the date of this contract or thereafter indi- cates security classification under this contract as provided in paragraph (b) above, the Contractor shall safeguard all classified elements of this con- tract and shall provide and maintain a system of scurity controls within his own organization in ac- cordance with the requirements of- (i). the Security Agreement (DD Form 441), in- cluding the Department of Defense Industrial Secu- rity Manual for Safeguarding Classified Informa- tion as in effect on the date of this contract, and any modification to the Security Agreement for the purpose of adapting the Manual to the Contractor's business; and (ii) any amendments to said Manual made after the date of this contract, notice of which has been furnished to the Contractor by the Security Office of the Military Department having security cogni- zance over the facility. (d) Representatives of the Military Department having security cognizance over the facility and representatives of the contracting Military Depart- ment shall have the right to inspect at reasonable intervals the procedures, methods, and facilities utilized by the Contractor in complying with the security requirements under this contract. Should the Government, through these representatives, de- termine that the Contractor is not complying with the security requirements of this contract the Con- tractor shall be informed in writing by the Security Office of the cognizant Military Department of the proper action to be taken in order to effect com- pliance with such requirements. (e) If, subsequent to the date of this contract, the security classifications or security requirements under this contract are changed by the Government as provided in this clause, and if such change causes an increase or decrease in the estimated cost of performance of this contract, the estimated cost and fixed fee shall, to the extent appropriate, be subject to an equitable adjustment. Any such equitable ad- justment shall be accomplished in the manner set forth in the "Changes" clause in this contract. (f) The Contractor agrees to insert, in all sub- contracts hereunder which involve access to clas- sified information, provisions which shall conform substantially to the language of this clause, includ- ing this paragraph (f) but excluding paragraph (e) of this clause. The Contractor may insert in any such subcontract, and any such subcontract entered into thereunder may contain, in lieu of paragraph (e) of this clause, provisions which permit equitable adjustments to be made in the subcontract price or in the estimated cost and fixed fee of the subcon- tract (as appropriate to the type of subcontract involved) on account of changes in security clas- sifications or requirements made under the provi- sions of this clause subsequent to the date of the subcontract involved. (Oct. 1953) (g) The Contractor also agrees that he shall de- termine that any subcontractor proposed by him for the furnishing of supplies and services which will involve access to classified information in the Con- tractor's custody has been granted an appropriate facility security clearance, which is still in effect, prior to being accorded access to such classified information. Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 23. GOVERNMENT PROPERTY (Aug. 1961) (a) The Government shall deliver to the Contrac- tor, for use in connection with and under the terms of this contract, the property described in the Schedule or specifications, together with such re- lated data and information as the Contractor may request and as may reasonably be required for the intended use of such property (hereinafter referred to as "Government-furnished Property"). The de- livery or performance dates for the supplies or serv- ices to be furnished by the Contractor under this contract are based upon the expectation that Gov- ernment-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 Govern- ment-furnished Property is not delivered to the Contractor by such time or times, the Contracting Officer shall, upon timely written request made by the Contractor, make a determination of the delay occasioned the Contractor and shall equitably adjust the estimated cost, fixed fee, or delivery or per- formance dates, or all of them, and any other con- tractual provisions affected by such delay, in ac- cordance with the procedures provided for in the clause of this contract entitled "Changes." In the event that Government-furnished Property is re- ceived by the Contractor in a condition not suitable for the intended use, the Contractor shall, upon re- ceipt 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 estimated cost, fixed fee, or delivery or performance dates, or all of them, and any other contractual provision affected by the return or dis- position, or the repair or modification, in accordance with the procedures provided for in the clause of this contract entitled "Changes." The foregoing provisions for adjustment are exclusive and the Government shall not be liable to suit for breach of contract by reason of any delay in delivery of Government-furnished Property or delivery of such property in a condition not suitable for its intended use. (b) Title to all property furnished by the Govern- ment shall remain in the Government. Title to all property purchased by the Contractor, for the cost of which the Contractor is entitled is 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 performance of this con- tract, or (ii) commencement of processing or use of such property in the performance of this con- tract, or (iii) reimbursement 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 Contrac- tor 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." (c) 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 there- of, be or become a fixture or lose its identity as personalty by reason of affixation to any realty. The Contractor shall comply with the provisions of the "Manual for Control of Government Property in Possession of Contractors" (Appendix B, Armed Services Procurement Regulation), as in effect on the date of the contract, which Manual is hereby incorporated by reference and made a part of this contract. (d) The Government Property provided or fur- nished pursuant to the terms of this contract shall, unless 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 pro- gram, for the maintenance, repair, protection and preservation of Government Property so as to as- sure its full availability and usefulness for the performance of this contract. The Contractor shall take all reasonable steps to comply with all appro- priate directions or instructions which the Contract- ing Officer may prescribe as reasonably necessary for the protection of Government Property. (f) (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 Contrac- tor'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 op- eration 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, Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 officers, or other representatives mentioned in sub- paragraph (I) above, (A) to maintain and administer, in accordance with sound industrial practice, the program for maintenance, repair, protection and preservation of Government Property as required by paragraph (e) hereof, or (B) to take all reasonable steps to comply with any appropriate written directions of the Contract- ing Officer under paragraph (e) hereof; (iii) for which the Contractor is otherwise re- sponsible 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; provided that, if more than one of the above excep- tions shall be applicable in any case, the Contrac- tor's liability under any one exception shall not be limited by any other exception. This clause shall not be construed as relieving a subcontractor from liability for loss or destruction of or damage to Gov- ernment Property in his possession or control, except to the extent that the subcontract, with the prior approval of the Contracting Officer, may provide for the relief of the subcontractor from such liabil- ity. In the absence of such approval, the subcon- tract shall contain appropriate 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 Gov- ernment 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 Con- tractor 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 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 Prop- erty 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 state- ment of- (f) 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. (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, reno- vate 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 Con- tracting 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 Contract- ing 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 Con- tractor shall enforce the liability of the subcontrac- tor for such loss or destruction of or damage to the Government Property for the benefit of the Gov- ernment. (5) If this contract is for the development, pro- duction, modification, maintenance, or overhaul of aircraft, or otherwise involves the furnishing of air- craft by the Government, the clause of this con- tract entitled "Flight Risks" shall control, to the extent it is applicable, in the case of loss or destruc- tion of, or damage to, aircraft. (g) The Government shall at all reasonable times have access to the premises where any of the Gov- ernment Property is located. (h) The Government Property shall remain in the possession of the Contractor for such period of time as is required for the performance of this contract unless the Contracting Officer determines that the interests of the Government require removal of such property. In such case the Contractor shall promptly take such action as the Contracting Offi- cer may direct with respect to the removal and shipping of Government Property. In any such Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 instance, the contract may be amended to accom- plish an equitable adjustment in the terms and pro- visions thereof. (i) Upon the completion of this contract, or at such earlier dates as may be fixed by the Contract- ing Officer, the Contractor shall submit to the Con- tracting Officer in a form acceptable to him, inven- tory schedules covering all items of the Govern- ment Property not consumed in the performance of this contract, or not theretofore delivered to the Government, and shall deliver or make such other disposal of such Government Property as may be directed or authorized by the Contracting Officer. The net proceeds of any such disposal shall be cred- ited to the cost of the work covered by the con- tract or shall be paid in such manner as the Con- tracting Officer may direct. The foregoing provi- sions shall apply to scrap from Government Prop- erty; provided, however, that the Contracting Offi- cer may authorize or direct the Contractor to omit from such inventory schedules any scrap consisting of faulty castings or forgings, or cutting and proc- essing waste, such as chips, cuttings, borings, turn- ings, short ends, circles, trimmings, clippings, and remnants, and to dispose of such scrap in accord- ance with the Contractor's normal practice and ac- count therefor as a part of general overhead or other reimbursable cost in accordance with the Con- tractor's established accounting procedures. (j) Unless otherwise provided herein, the Gov- ernment shall not be under any duty or obligation to restore or rehabilitate, or to pay the costs of the restoration or rehabilitation of the Contractor's plant or any portion thereof which is affected by the removal of any Government Property. (k) Directions of the Contracting Officer and communications of the Contractor issued pursuant to this clause shall be in writing. 24. INSURANCE-LIABILITY TO THIRD PERSONS (Jan. 1960) (a) The Contractor shall procure and thereafter maintain workmen's compensation, employer's lia- bility, comprehensive general liability (bodily in- jury) and comprehensive automobile liability (bod- ily injury and property damage) insurance, with respect to performance under this contract, and such other insurance as the Contracting Officer may from time to time require with respect to per- formance under this contract; provided, that the Contractor may with the approval of the Contract- ing Officer maintain a self-insurance program, and provided further, that with respect to workmen's compensation the Contractor is qualified pursuant to statutory authority. All insurance required pursuant to the provisions of this paragraph shall be in such form, in such amounts, and for such periods of time, as the Contracting Officer may from time to time require or approve, and with insurers approved by the Contracting Officer. (b) The Contractor agrees, to the extent and in the manner required by the Contracting Officer, to submit for the approval of the Contracting Officer any other insurance maintained by the Contractor in connection with the performance of this contract and for which the Contractor seeks reimbursement hereunder. (c) The Contractor shall be reimbursed: (i) for the portion allocable to this contract of the reason- able cost of insurance as required or approved pur- suant to the provisions of this clause, and (ii) for liabilities to third persons for loss of or damage to property (other than property (A) owned, occupied or used by the Contractor or rented to the Contrac- tor, or (B) in the care, custody, or control of the Contractor), or for death or bodily injury, not com- pensated by insurance or otherwise, arising out of the performance of this contract, whether or not caused by the negligence of the Contractor, his agents, servants or employees, provided such liabil- ities are represented by final judgments or by settle- ments approved in writing by the Government, and expenses incidental to such liabilities, except liabil- ities (I) for which the Contractor is otherwise re- sponsible under the express terms of the clause or clauses, if any, specified in the Schedule, or (II) with respect to which the Contractor has failed to insure as required or maintain insurance as ap- proved by the Contracting Officer or (III) which results from willful misconduct or lack of good faith 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 (1) all or sub- stantially all of the Contractor's business, or (2) all or substantially all of the Contractor's operations at any one plant or separate location in which this contract is being performed, or (3) a separate and complete major industrial operation in connection with the performance of this contract. The fore- going shall not restrict the right of the Contractor to be reimbursed for the cost of insurance main- tained by the Contractor in connection with the performance of this contract, other than insurance required to be submitted for approval or required to be procured and maintained pursuant to the pro- visions of this clause, provided such cost would con- stitute Allowable Cost under the clause of this con- tract entitled "Allowable Cost, Fixed Fee, and Pay- ment." (d) The Contractor shall give the Government or its representatives immediate notice of any suit or action filed, or prompt notice of any claim made, against the Contractor arising out of the perform- ance of this contract, the cost and expense of which may be reimbursable to the Contractor under the provisions of this contract, and the risk of which is then uninsured or in which the amount claimed exceeds the amount of coverage. The Contractor shall furnish immediately to the Government copies of all pertinent papers received by the Contractor. Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 If the amount of the liability claimed exceeds the amount of coverage, the Contractor shall authorize representatives of the Government to collaborate with counsel for the insurance carrier, if any, in settling or defending such claim. If the liability is not insured or covered by bond, the Contractor shall, if required by the Government, authorize representatives of the Government to settle or de- fend any such claim and to represent the Contrac- tor in or take charge of any litigation in connec- tion therewith; provided, however, that the Con- tractor may, at his own expense, be associated with the representatives of the Government in the settle- ment or defense of any such claim or litigation. 25. UTILIZATION OF CONCERNS IN LABOR SUR- PLUS AREAS (Feb. 1962) (The provisions of this clause shall be applicable if this contract is in excess of $5,000.00.) It is the policy of the Government to place con- tracts with concerns which will perform such con- tracts substantially in areas of persistent or sub- stantial labor surplus where this can be done, con- sistent with the efficient performance of the con- tract, at prices no higher than are obtainable else- where. The Contractor agrees to use his best efforts to place his subcontracts in accordance with this policy. In complying with the foregoing and with paragraph (b) of the clause of this contract entitled "Utilization of Small Business Concerns," the Con- tractor in placing his subcontracts shall observe the following order of preference: (1) persistent labor surplus area concerns which are also small business concerns; (ii) other persistent labor surplus area concerns; (111) substantial labor surplus area con- cerns which are also small business concerns; (iv) other substantial labor surplus area concerns; and (v) small business concerns which are not labor surplus area concerns. 26. PAYMENT FOR OVERTIME AND SHIFT PREMIUMS (Feb. 1962) (a) Allowable cost shall not include any amount on account of overtime premiums or shift premi- ums, except to the extent that they either (1) are approved in writing on behalf of the Government or (11) are paid for work- (A) necessary to cope with emergencies such as those resulting from accidents, natural disasters, breakdowns of production equipment, or occasional production bottlenecks of a sporadic nature; (B) by indirect labor employees such as those performing duties in connection with administra- tion, protection, transportation, maintenance, stand- by plant protection, operation of utilities, or ac- counting; (C) in the performance of tests, industrial proc- esses, laboratory procedures, loading or unloading of transportation media, and operations in flight or afloat, which are continuous in nature and can- not reasonably be interrupted or otherwise com- pleted; or (D) which will result in lower overall cost to the Government. (b) The cost of overtime premiums or shift premi- ums otherwise allowable under (a) above shall be allowed only to the extent the amount thereof is reasonable and properly allocable to the work under this contract. 27. COMPETITION IN SUBCONTRACTING (Apr. 1962) The Contractor shall select subcontractors (in- cluding suppliers) on a competitive basis to the maximum practical extent consistent with the ob- jectives and requirements of the contract. 28. FILING OF PATENT APPLICATIONS (Jan. 1955) (a) Before filing or causing to be filed a patent application disclosing any subject matter of this contract, which subject matter is classified "Secret" or higher, the Contractor shall, citing the thirty (30) days provision below, transmit the proposed application to the Contracting Officer for deter- mination whether, for reasons of national security, such application should be placed under an order of secrecy or sealed in accordance with the provi- sions of 35 U.S. Code 181-188 or the issuance of a patent should be otherwise delayed under perti- nent statutes or regulations; and the Contractor shall observe any instructions of the Contracting Officer with respect to the manner of delivery of the patent application to the U.S. Patent Office for fil- ing, but the Contractor shall not be denied the right to file such patent application. If the Con- tracting Officer shall not have given any such in- structions with thirty (30) days from the date of mailing or other transmittal of the proposed ap- plication, the Contractor may file the application. (b) The Contractor shall furnish to the Con- tracting Officer, at the time of or prior to the time when the Contractor files or causes to be filed a patent application disclosing any subject matter of this contract, which subject matter is classified "Confidential," a copy of such application for de- termination whether, for reasons of national secu- rity, such application should be placed under an order of secrecy or the issuance of a patent should be otherwise delayed under pertinent statutes or regulation. (c) In filing any patent application coming with- in the scope of this clause, the Contractor shall ob- serve all applicable security regulations covering the transmission of classified subject matter. Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 29. EXCUSABLE DELAYS (Jul. 1958) 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 ac- cordance with its terms (including any failure by the Contractor to make progress in the prosecution of the work hereunder which endangers such per- formance) if such failure arises out of causes beyond the control and without the fault or negli- gence 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; epi- demics; quarantine restrictions; strikes; freight em- bargoes; 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 beyond the control of both the Contractor and subcontractor, and without the fault or negli- gence 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 Con- tracting 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 accordingly, subject to the rights of the Government under the clause hereof entitled "Ter- mination." 30. NOTICE TO THE GOVERNMENT OF LABOR DISPUTES (Sep. 1958) (a) Whenever the Contractor has knowledge that any actual or potential labor dispute is delaying or threatens to delay the timely performance of this contract, the Contractor shall immediately give notice thereof, including all relevant information with respect thereto, to the Contracting Officer. (b) The Contractor agrees to insert the substance of this clause, including this paragraph (b), in any subcontract hereunder as to which a labor dispute may delay the timely performance of this contract; except that each such subcontract shall provide that in the event its timely performance is delayed or threatened by delay by any actual or potential labor dispute, the subcontractor shall immediately notify his next higher tier subcontractor, or the prime contractor, as the case may be, of all relevant in- formation with respect to such dispute. 31. GRATUITIES (Mar. 1952) (a) The Government may, by written notice to the Contractor, terminate the right of the Contrac- tor to proceed under this contract if it is found, after notice and hearing, by the Secretary or his duly authorized representative, that gratuities (in the form of entertainment, gifts, or otherwise) were offered or given by the Contractor, or any agent or representative of the Contractor, to any officer or employee of the Government with a view toward securing a contract or securing favorable treatment with respect to the awarding or amending, or the making of any determinations with respect to the performing of such contract; provided, that the existence of the facts upon which the Secretary or his duly authorized representative makes such find- ings 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 dam- ages to which it may be entitled by law, to exem- plary 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. 32. LIMITATION ON WITHHOLDING OF PAY- MENTS (Feb. 1959) If more than one clause or Schedule provision of this contract authorizes the temporary withhold- ing of amounts otherwise payable to the Contractor for work performed under this contract, the total of the amounts so withheld at any one time shall not exceed the greatest amount which may be with- held under any one such clause or Schedule pro- vision at that time; provided, that this limitation shall not apply to: (1) withholdings pursuant to any clause relating to wages or hours of employees; (ii) withholdings not specifically provided for by this contract; and (iii) the recovery of overpayments. 33. CHANGES (Feb. 1959) 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 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 of shipment or packing; (111) place of inspection, delivery, or acceptance, and (iv) the amount of Government-furnished Property. If any such change causes an increase or decrease in the esti- mated cost of, or the time required for performance of this contract, or otherwise affects any other pro- visions of this contract, whether changed or not changed by any such order, an equitable adjustment shall be made (I) in the estimated cost or delivery schedule, or both, (ii) in the amount of any fee to be paid to the Contractor, and (iii) in such other provisions of the contract as may be so affected, and the contract shall be modified in writing ac- cordingly. Any claim by the Contractor for ad- justment under this clause must be asserted within sixty (60) days from the date of receipt by the Con- tractor 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 concern- ing a question of fact within the meaning of the clause of this contract entitled "Disputes." How- ever, nothing in this clause shall excuse the Con- tractor from proceeding with the contract as changed. 34. STOP WORK ORDER (Jul. 1960) (a) The Contracting Officer may, at any time, by written order to the Contractor, require the Con- tractor to stop all, or any part, of the work called for by this contract for a period of ninety (90) days after the order is delivered to the Contractor, and for any further period to which the parties may agree. Any such order shall be specifically identi- fied as a Stop Work Order issued pursuant to this clause. Upon receipt of such an order, the Contrac- tor shall forthwith comply with its terms and take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the order during the period of work stoppage. Within a pe- riod of ninety (90) days after a stop work order is delivered to the Contractor, or within any extension of that period to which the parties shall have agreed, the Contracting Officer shall either- (i) cancel the stop work order, or (ii) terminate the work covered by such order as provided in the "Termination" clause of this con- tract. (b) If a stop work order issued under this clause is canceled or the period of the order or any ex- tension thereof expires, the Contractor shall resume work. An equitable adjustment shall be made in the delivery schedule, the estimated cost, the fee, or a combination thereof, and in any other pro- visions of the contract that may be affected, and the contract shall be modified in writing accord- ingly, if- (1) the stop work order results in an increase in the time required for, or in the Contractor's cost properly allocable to, the performance of any part of this contract, and (ii) the Contractor asserts a claim for such ad- justment within thirty (30) days after the end of the period of work stoppage; provided that, if the Contracting Officer decides the facts justify such action, he may receive and act upon any such claim asserted at any time prior to final payment under this contract. Failure to agree to any adjustment shall be a dis- pute concerning a question of fact within the mean- ing of "Disputes" clause of this contract. (c) If a stop work order is not canceled and the work covered by such order is terminated for the convenience of the Government, the reasonable costs resulting from the stop work order shall be allowed in arriving at the termination settlement. 35. REPORTS OF WORK (Jul. 1960) (a) The Contractor shall submit reports making full disclosure of all work done and the results there- of, in the manner, at the times, and to the extent set forth in the Schedule; provided that, unless otherwise specified in the Schedule, the Contractor shall submit such reports in triplicate from time to time as requested and upon completion (or earlier termination) of the work. Except as may be other- wise specified in the Schedule, or unless the Con- tractor is otherwise instructed, the Contractor shall, upon completion (or earlier termination) of the work deliver any working drawings and specifica- tions of any prototypes as may have been developed. (b) If the Contractor becomes unable to complete the contract work and to deliver at the time speci- fied in the Schedule because of technical difficul- ties, notwithstanding the exercise of good faith and diligent efforts in performance of the work, he shall give the Contracting Officer written notice of the anticipated delays with reasons therefor, not less than forty-five (45) days before the completion date specified in the Schedule or within such time as the Contracting Officer deems sufficient. When no- tice is so required, the Contracting Officer may, in his discretion, extend the time specified in the Schedule for such period as he deems advisable. 36. DATA-WITHHOLDING OF PAYMENT (Apr. 1962) (This clause is applicable only if this contract contains the "Data" clause set forth in ASPR 9-203.1) If "Subject Data" (as defined in the clause of this contract entitled "Data"), or any part thereof, is not delivered within the time specified by this con- tract or is deficient upon delivery (including hav- ing restrictive markings not specifically authorized Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 by the contract), the Contracting Officer may, until such data is delivered or deficiencies are corrected. withhold payment due the Contractor on account of allowable costs and fixed fee, of ten percent (10%) of the contract price, unless a lesser with- holding is specified in the schedule. Payments shall not be withheld nor any other action taken pursuant to this clause where the Contractor's fail- ure to make timely delivery or to deliver data with- out deficiencies arises out of causes beyond the con- trol and without the fault or negligence of the Contractor within the meaning of the clause hereof entitled "Excusable Delays." 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. Pursuant to the Allowable Cost, Fixed Fee, and Payment (or Allowable Cost and Payment) General Provision of this contract, the Contractor shall sub- mit vouchers to the Contracting Officer, with the supporting statement of costs describing the amounts claimed for: direct salaries and wages, labor burden or overhead, materials, and other di- rect and indirect costs. Notwithstanding any other provisions of this con- tract, unless paid within 30 days all amounts that become payable by the Contractor to the Govern- ment under this contract (net of any applicable tax credit under the Internal Revenue Code) shall bear interest at the rate of six percent per annum from the date due until paid, and shall be subject to the adjustments as provided by Part 6 of Ap- pendix E of the Armed Services Procurement Regu- lation, as in effect on the date of this contract. Amounts shall be due upon the earliest one of (1) the date fixed pursuant to this contract, (ii) the date of the first demand for payment, (iii) the date of a supplemental agreement fixing the amount, or (iv) if this contract provides for revision of prices, the date of written notice to the Contractor stating the amount of refund payable in connec- tion with a pricing proposal or in connection with a negotiated pricing agreement not confirmed by contract supplement. 39. COMPETITION IN SUBCONTRACTING (Apr. 1962) The contractor shall select subcontractors (in- cluding suppliers) on a competitive basis to the maximum practical extent consistent with objec- tives and requirements of the contract. 40. UTILIZATION OF CONCERNS IN LABOR SUR- PLUS AREAS (Feb. 1962) It is the policy of the Government to place con- tracts with concerns which will perform such con- tracts substantially in areas of persistent or sub- stantial labor surplus where this can be done, con- sistent with the efficient performance of the con- tract, at prices no higher than are obtainable else- where. The Contractor agrees to use his best ef- forts to place his subcontracts in accordance with this policy. In complying with the foregoing and with paragraph (b) of the clause of this contract entitled "Utilization of Small Business Concerns," the Contractor in placing his subcontracts shall observe the following order of preference: (I) per- sistent labor surplus area concerns which are also small business concerns; (ii) other persistent labor surplus area concerns; (iii) substantial labor sur- plus area concerns which are also small business concerns; (iv) other substantial labor surplus area concerns; and (v) small business concerns which are not labor surplus area concerns. 41. WORK HOURS ACT OF 1962-OVERTIME COMPENSATION (Oct. 1962) This contract to the extent that it is of a char- acter specified in the Work Hours Act of 1962 (Public Law 87-581, 76 Stat. 357-360) and is not covered by the Walsh-Healey Public Contracts Act (41 U. S. C. 35-45) is subject to the following pro- visions and to all other provisions and exceptions of said Work Hours Act of 1962. (a) No contractor or subcontractor contracting for any part of the contract work shall require or permit any laborer or mechanic to be employed on such work in excess of eight hours in any calen- dar day or in excess of forty hours in any work- week unless such laborer or mechanic receives com- pensation at a rate not less than one and one-half times his basic rate of pay for all hours worked in excess of eight hours in any calendar day or in excess of forty hours in such workweek, which- ever is the greater number of overtime hours. (b) In the event of any violation of the pro- visions of paragraph (a), the contractor and any subcontractor responsible for such violation shall be liable to any affected employee for his unpaid wages. In addition, such contractor,, or subcon- tractor shall be liable to the United States for liqui- dated damages. Such liquidated damages shall be computed, with respect to each individual laborer or mechanic employed in violation of the provisions of paragraph (a), in the sum of $10 for each calendar day on which such employee was required or permitted to work in excess of eight hours or in excess of forty hours in a workweek without payment of the required overtime wages. (c) The Contracting Officer may withhold, or cause to be withheld, from moneys payable on ac- count of work performed by the contractor or sub- Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 contractor, the full amount of wages required by this contract and such sums as may administra- tively be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for liquidated damages as provided in paragraph (b). 42. AUDIT (Nov. 1962) (a) For purposes of verifying that cost or pricing data submitted, in conjunction with the negotiation of this contract or any contract change or other modification involving an amount in excess of $100,000 are accurate, complete, and current, the Contracting Officer, or his authorized representa- tives, shall-until the expiration of three years from the date of final payment under this contract- have the right to examine those books, records, documents and other supporting data which will permit adequate evaluation of the cost or pricing data submitted, along with the computations and projections used therein, which were available to the Contractor as of the date of execution of the Contractor's Certificate of Current Cost or Pricing Data. (b) The Contractor agrees to insert the substance of this clause including this paragraph (b) in all subcontracts hereunder in excess of $100,000 unless the price is based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation. 43. PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA (Nov. 1962) (a) If the Contracting Officer determines that any price, including profit or fee, negotiated in connection with this contract was increased by any significant sums because the Contractor, or any subcontractor in connection with a subcontract covered by (c) below, furnished incomplete or in- accurate cost or pricing data or data not current as certified in the Contractor's Certificate of Cur- rent Cost or Pricing Data, then such price shall be reduced accordingly and the contract shall be modified in writing to reflect such adjustment. (b) Failure to agree on a reduction shall be a dis- pute concerning a question of fact within the mean- ing of the "Disputes" clause of this contract. (c) The Contractor agrees to insert the substance of paragraphs (a) and (c) of this clause in each of his cost-reimbursement type, price redetermi- nable, or incentive subcontracts hereunder, and in any other subcontract hereunder in excess of $100,000 unless the price is based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regula- tion. In each such excepted subcontract hereunder which exceeds $100,000, the Contractor shall insert the substance of the following clause. Price Reduction for Defective Cost or Pricing Data-Price Adjustments (a) This clause shall, become operative only with respect to any change or other modification made pursuant to one or more provisions of this contract which involves a price adjustment in excess of $100,000 that is not based on adequate price com- petition, established catalog or market price of com- mercial items sold in substantial quantities to the general public or prices set by law or regulation. The right to price reduction under this clause shall be limited to such price adjustments. (b) If the Contractor determines that any price, including profit or fee, negotiated in connection with any price adjustment under this contract was increased by any significant sums because the sub- contractor or any of his subcontractors in connec- tion with a subcontract covered by paragraph (c) below; furnished incomplete or inaccurate cost or pricing data or data not current as of the date of execution of the subcontractor's certificate of cur- rent cost or pricing data, then such price shall be reduced accordingly and the subcontract shall be modified in writing to reflect such adjustment. (c) The subcontractor agrees to insert the sub- stance of this clause in each subcontract hereunder which exceeds $100,000. 44. SUBCONTRACTOR COST AND PRICING DATA (Nov. 1962) (a) The Contractor shall require subcontractors hereunder to submit cost or pricing data under the following circumstances: (1) prior to award of any cost-reimbursement type, incentive, or price-redeterminable subcon- tract; (ii) prior to the award of any subcontract the price of which is expected to exceed $100,000; (iii) prior to the pricing of any subcontract change or other modification for which the price adjust- ment is expected to exceed $100,000; except, in the case of (ii) or (iii), where the price is based on adequate price competition, established catalog or* market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation. (b) The Contractor shall require subcontractors to certify, in substantially the same form as that used in the certificate by the Prime Contractor to the-Government, that to the best of their knowl- edge and belief, the cost and pricing data submitted under (a) above is accurate, complete, and current as of the date of execution, which date shall be as close as possible to the date of agreement on the negotiated price of the subcontract. (c) The Contractor shall insert the substance of this clause, including this paragraph (c), in each subcontract hereunder which exceeds $100,000, ex- cept where the price thereof is based on adequate Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 price competition, established catalog or market prices of commercial items sold in substantial quan- tities to the general public, or prices set by law or regulation. In each such excepted subcontract hereunder in excess of $100,000 the Contractor shall insert the substance of the following clause: Subcontractor Cost and Pricing Data- Price Adjustments (a) Paragraphs (b) and (c) of this clause shall become operative only with respect to any change or other modification made pursuant to one or more provisions of this contract which involves a price adjustment in excess of $100,000. The re- quirements of this clause shall be limited to such price adjustments. (b) The Contractor shall require subcontractors hereunder to submit cost or pricing data under the following circumstances: (i) prior to award of any cost-reimbursement type, incentive, or price-redeterminable subcon- tract; (ii) prior to the award of any subcontract the price of which is expected to exceed $100,000; (iii) prior to the pricing of any subcontract change or other modification for which the price adjustment is expected to exceed $100,000; except, in the case of (ii) or (iii), where the price is based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation. (c) The Contractor shall require subcontractors to certify, in substantially the same form as that used in the Certificate by the Prime Contractor to the Government, that to the best of their knowledge and belief the cost and pricing data submitted under (b) above is accurate, complete, and current as of the date of the execution, which date shall be as close as possible to the date of agreement on the negotiated price of the contract modification. (d) The Contractor shall insert the substance of this clause including this paragraph (d) in each subcontract hereunder which exceeds $100,000. 45. NEGOTIATED OVERHEAD RATES (Dec. 1962) (a) Notwithstanding the provisions of the clause of this contract entitled "Allowable Cost, Fixed Fee, and Payment," the allowable indirect costs under this contract shall be obtained by applying negoti- ated overhead rates to bases agreed upon by the parties, as specified below. (b) The Contractor, as soon as possible but not later than ninety (90) days after the expiration of each period specified in the Schedule, shall submit to the Contracting Officer with a copy to the cogni- zant audit activity a proposed final overhead rate or rates for that period based on the Contractor's actual cost experience during that period, together with supporting cost data. Negotiation of final overhead rates by the Contractor and the Contract- ing Officer shall be undertaken as promptly as prac- ticable after receipt of the Contractor's proposal. (c) Allowability of costs and acceptability of cost allocation methods shall be determined in accord- ance with Part 2 of Section XV of the Armed Serv- ices Procurement Regulation as in effect on the date of this contract. (d) The results of each negotiation shall be set forth in a modification to this contract, which shall specify (I) the agreed final rates, (ii) the bases to which the rates apply, and (iii) the periods for which the rates apply. (e) Pending establishment of final overhead rates for any period, the Contractor shall be reimbursed either at negotiated provisional rates as provided in the Schedule or at billing rates acceptable to the Contracting Officer, subject to appropriate adjust- ment when the final rates for that period are estab- lished. To prevent substantial over or under pay- ment, the provisional or billing rates may, at the request of either party, be revised by mutual agree- ment, either retroactively or prospectively. Any such revision of negotiated provisional rates pro- vided in the Schedule shall be set forth in an amendment to this contract. (f) Any failure by the parties to agree on any final rate or rates under this clause shall be considered a dispute concerning a question of fact for decision by the Contracting Officer within the meaning of the "Disputes" clause of this contract. Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4 46. ALTERATIONS IN CONTRACT The following alterations have been made in the provisions of this contract. In Clause 8, SUBCONTRACTS, of the contract General Provisions, Part (iii) in Paragraph (c) is deleted and the following is substituted therefor: "(iii) provides for the fabrication, purchase, rental, installation or other acquisition of any item of industrial facilities exceeding $500.00 or of special tooling haveing a value in excess of $1,000. or" Approved For Release 2011/08/22 : CIA-RDP90B00224R000300260019-4