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**GENERAL PROVISIONS -- FIXED-PRICE CONTRACTS**

**Commercial Items - Services**

For the Pacific Northwest National Laboratory

Operated by Battelle Memorial Institute

Applicable to Contract Number \_\_\_\_\_

Battelle Memorial Institute has executed and is engaged in the
performance of Prime Contract DE-AC05-76RL01830 with the United States
Department of Energy (DOE), for the management, operation, and
maintenance of the Pacific Northwest National Laboratory (PNNL) in
Richland, Washington. This contract is entered into in furtherance of
the performance of the work provided in the Prime Contract, and is
subject to the following general provisions:

***[GENERAL PROVISIONS]{.underline} [1](#__RefHeading___Toc64686018)***

DEFINITIONS *(cl. 301 -- Apr 2000)* [1](#__RefHeading___Toc64686019)

DISPUTES *(cl. 331 - Oct 1979)* [1](#__RefHeading___Toc64686020)

PATENT INDEMNITY *(cl 367a / Apr 1984)* [2](#__RefHeading___Toc64686021)

USE OF BATTELLE NAME *(cl. 374 -- Jan 2003)*
[2](#__RefHeading___Toc64686022)

CHANGES ‑ FIXED PRICE *(cl. 346b - Aug 1987)*
[2](#__RefHeading___Toc64686023)

PAYMENTS - FIXED PRICE *(cl. 350 -- Aug 1984)*
[2](#__RefHeading___Toc64686024)

FEDERAL, STATE, AND LOCAL TAXES -- FIXED PRICE *(cl. 354b - Apr 1984)*
[3](#__RefHeading___Toc64686025)

INSPECTION OF SERVICES --FIXED-PRICE *(cl 379b - Aug 1996)*
[3](#__RefHeading___Toc64686026)

DEFAULT - FIXED PRICE SUPPLY AND SERVICE *(cl. 365c - Dec 1985)*
[3](#__RefHeading___Toc64686027)

TERMINATION FOR CONVENIENCE OF THE GOVERNMENT -- FIXED PRICE *(cl.
365d - Sep 1996)* [4](#__RefHeading___Toc64686028)

CLAUSES INCORPORATED BY REFERENCE [8](#BM1046839)

FAR 52.222-26 Equal Opportunity (Apr 2002)
[8](#__RefHeading___Toc64686030)

FAR 52.222-35 Equal Opportunity for Special Disabled Veterans, Veterans
of the Vietnam Era, and Other Eligible Veterans (Dec 2001)
[8](#__RefHeading___Toc64686031)

FAR 52.222-36 Affirmative Action for Workers with Disabilities
(June 1998) [8](#__RefHeading___Toc64686032)

FAR 52.222-41 Service Contract Act of 1965, as Amended (May 1989)
[8](#__RefHeading___Toc64686033)

DEAR 952.204-2 Security (May 2002) [8](#__RefHeading___Toc64686034)

DEAR 952.250-70 Nuclear Hazards Indemnity Agreement (June 1996)
[8](#__RefHeading___Toc64686035)

[]{#__RefHeading___Toc64686018 .anchor}[GENERAL PROVISIONS]{.underline}

[]{#__RefHeading___Toc64686019 .anchor}DEFINITIONS *(cl. 301 -- Apr
2000)*

A. The terms "Battelle," "Pacific Northwest National Laboratory,"
"PNNL," and "Laboratory" mean Battelle Memorial Institute, Pacific
Northwest Division.

B. The term "Government" means the Government of the United States of
America.

C. The term "DOE" means the U.S. Department of Energy.

D. "Battelle Contracts Representative" means an employee of Battelle
Memorial Institute, Pacific Northwest Division, acting within the limits
of a written authorization to execute legally binding commitments on
behalf of Battelle.

E. Except as otherwise provided in this contract, the term
"Subcontracts" includes purchase orders under this contract.

[]{#__RefHeading___Toc64686020 .anchor}**DISPUTES** *(cl. 331 -
Oct 1979)*

Except as otherwise provided or agreed any dispute relating to this
contract which is not disposed of by agreement shall be decided by
litigation in a court of competent jurisdiction upon filing of a legal
action by the aggrieved party. It is further agreed by the Contractor
that litigation shall be limited and confined exclusively to the
appropriate state or Federal court located within the State of
Washington. Determination of any substantive issue of law shall be based
upon application of Federal law. During the pendency of any dispute, the
Contractor shall proceed diligently with the performance of the contract
and in accordance with the direction of Battelle.

[]{#__RefHeading___Toc64686021 .anchor}**PATENT INDEMNITY** *(cl 367a /
Apr 1984)*

A.  The Contractor shall indemnify Battelle and the Government and their
    officers, agents, and employees against liability, including costs,
    for infringement of any United States patent (except a patent issued
    upon an application that is now or may hereafter be withheld from
    issue pursuant to a Secrecy Order under 35 U.S.C. 181) arising out
    of the manufacture or delivery of supplies, the performance of
    services, or the construction, alteration, modification, or repair
    of real property (hereinafter referred to as \"construction work\")
    under this contract, or out of the use or disposal by or for the
    account of the Government of such supplies or construction work.

B.  This indemnity shall not apply unless the Contractor shall have been
    informed as soon as practicable by Battelle of the suit or action
    alleging such infringement and shall have been given such
    opportunity as is afforded by applicable laws, rules, or regulations
    to participate in its defense. Further, this indemnity shall not
    apply to---

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1.  An infringement resulting from compliance with specific written
    instructions of the Battelle Contracts Representative directing a
    change in the supplies to be delivered or in the materials or
    equipment to be used, or directing a manner of performance of the
    contract not normally used by the Contractor;

2.  An infringement resulting from addition to or change in supplies or
    components furnished or construction work performed that was made
    subsequent to delivery or performance; or

3.  A claimed infringement that is unreasonably settled without the
    consent of the Contractor, unless required by final decree of a
    court of competent jurisdiction.

[]{#__RefHeading___Toc64686022 .anchor}USE OF BATTELLE NAME *(cl. 374 --
Jan 2003)*

The Contractor agrees not to use Battelle's name or identifying
characteristics for advertising, sales promotion, or other publicity
purposes.

[]{#__RefHeading___Toc64686023 .anchor}CHANGES ‑ FIXED PRICE *(cl.
346b - Aug 1987)*

A.  A Battelle Contracts Representative 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: 1) description of services, drawings, designs, or
    specifications when the supplies to be furnished are to be specially
    manufactured for Battelle in accordance with the drawings, designs,
    or specifications; 2) method of shipment, packing, or routing;
    3) place of delivery .

B.  If such change causes an increase or decrease in the cost of, or the
    time required for, the performance of any part of the work under
    this contract, whether changed or not changed by any such order, an
    equitable adjustment shall be made in the contract price or delivery
    schedule, or both, and the contract shall be modified in writing
    accordingly.

C.  The Contractor must assert its right to an adjustment under this
    clause within 30 days from the date of receipt by the Contractor of
    the written order. However, if the Battelle Contracts Representative
    decides that the facts justify it, the Battelle Contracts
    Representative may receive and act upon a proposal submitted before
    final payment of the contract.

D.  If the Contractor's proposal includes the cost of property made
    obsolete or excess by the change, Battelle shall have the right to
    prescribe the manner of the disposition of the property.

E.  Failure to agree to any adjustment shall be a dispute within the
    meaning of the clause of this contract entitled Disputes". Nothing
    in this clause shall excuse the Contractor from proceeding with the
    contract as changed.

F.  No communication, written or oral, from any person other than a
    Battelle Contracts Representative, shall constitute a change order
    in accordance with this provision.

G.  Where the cost of property made obsolete or excess as a result of a
    change is included in the Contractor's proposal for adjustment,
    Battelle shall have the right to prescribe the manner of disposition
    of such property.

    []{#__RefHeading___Toc64686024 .anchor}**PAYMENTS - FIXED PRICE**
    *(cl. 350 -- Aug 1984)*

Battelle shall pay the Contractor upon submission of a proper invoice
the prices stipulated in this contract for supplies delivered or
services rendered and accepted, less any deductions provided in this
contract. Unless otherwise specified, payment shall be made upon
acceptance of any portion of the supplies delivered or services rendered
for which a price is separately stated in the contract. Payment date and
discount period, if any, shall be calculated from the date of acceptance
or receipt of a proper invoice whichever is later.

[]{#__RefHeading___Toc64686025 .anchor}FEDERAL, STATE, AND LOCAL TAXES
-- FIXED PRICE *(cl. 354b - Apr 1984)*

Except as may be otherwise provided in this contract, the contract price
includes all applicable Federal, State, and local taxes and duties.
(Washington State Contractors Note: The supplies/services specified
herein are deemed to be for resale to DOE and are exempt from Washington
Retail Sales Tax.)

[]{#__RefHeading___Toc64686026 .anchor}**INSPECTION OF SERVICES
--FIXED-PRICE** *(cl 379b - Aug 1996)*

A.  *Definition.* \"Services,\" as used in this clause, includes
    services performed, workmanship, and material furnished or utilized
    in the performance of services.

B.  The Contractor shall provide and maintain an inspection system
    acceptable to Battelle covering the services under this contract.
    Complete records of all inspection work performed by the Contractor
    shall be maintained and made available to Battelle during contract
    performance and for as long afterwards as the contract requires.

C.  Battelle has the right to inspect and test all services called for
    by the contract, to the extent practicable at all times and places
    during the term of the contract. Battelle shall perform inspections
    and tests in a manner that will not unduly delay the work.

D.  If Battelle performs inspections or tests on the premises of the
    Contractor or a subcontractor, the Contractor shall furnish, and
    shall require subcontractors to furnish, at no increase in contract
    price, all reasonable facilities and assistance for the safe and
    convenient performance of these duties.

E.  If any of the services do not conform to contract requirements,
    Battelle may require the Contractor to perform the services again in
    conformity with contract requirements, at no increase in contract
    amount. When the defects in services cannot be corrected by
    reperformance, Battelle may---

    1.  Require the Contractor to take necessary action to ensure that
        future performance conforms to contract requirements; and

    2.  Reduce the contract price to reflect the reduced value of the
        services performed.

F.  If the Contractor fails to promptly perform the services again or to
    take the necessary action to ensure future performance in conformity
    with contract requirements, Battelle may---

    1.  By contract or otherwise, perform the services and charge to the
        Contractor any cost incurred by the Government that is directly
        related to the performance of such service; or

    2.  Terminate the contract for default.

[]{#__RefHeading___Toc64686027 .anchor}DEFAULT - FIXED PRICE SUPPLY AND
SERVICE *(cl. 365c - Dec 1985)*

A. Battelle may, subject to the provisions of Paragraph C of this
clause, by written notice of default to the Contractor, terminate the
whole or any part of this contract in any one of the following
circumstances:

1\. If the Contractor fails to perform the work called for by this
contract within the time(s) specified herein or any extension thereof;
or

2\. If the Contractor fails to perform any of the other provisions of
this contract, or so fails to prosecute the work as to endanger
performance of this contract; or

3\. If the Contractor ceases to conduct its operations in the normal
course of business (including inability to meet its obligations as they
mature); or

4\. If any proceeding for bankruptcy or insolvency is brought by or
against the Contractor under bankruptcy or insolvency laws.

B. In the event Battelle terminates this contract in whole or in part as
provided in Paragraph A of this clause, Battelle may procure, upon such
terms and in such manner as it may deem appropriate, work similar to the
work so terminated and the Contractor shall be liable for any excess
costs for such similar work: provided, that the Contractor shall
continue the performance of this contract to the extent not terminated
under the provisions of this clause.

C. Except with respect to defaults of subcontractors, the Contractor
shall not be terminated for default if the failure to perform the
contract arises out of causes beyond the control and without the fault
or negligence of the Contractor. Such causes may include, but are not
restricted to, acts of God or of the public enemy, acts of the
Government in its sovereign capacity, fires, floods, epidemics,
quarantine restrictions, strikes, freight embargoes, and unusually
severe weather; but in every case the failure to perform must be beyond
the control and without the fault or negligence of the Contractor. If
the failure to perform is caused by the default of a subcontractor, and
if such default arises out of causes beyond the control of both the
Contractor and subcontractor and without the fault or negligence of
either of them, the Contractor shall not be terminated for default for
failure to perform unless the supplies or services to be furnished by
the subcontractor were obtainable from other sources in sufficient time
to permit the Contractor to meet the required delivery schedule or other
performance requirement.

D. If this contract is terminated as provided in Paragraph A of this
clause, Battelle, in addition to any other rights provided in this
clause, may require the Contractor to transfer title and deliver, in the
manner and to the extent directed by Battelle, any of the completed or
partially completed work not theretofore delivered to, and accepted by,
Battelle and any other property, including contract rights, specifically
produced or specifically acquired for the performance of such part of
this contract as has been terminated; and the Contractor shall, upon the
direction of Battelle, protect and preserve property in the possession
of the Contractor in which Battelle has an interest. Battelle shall pay
to the Contractor the contract price, if separately stated, for
completed work accepted by Battelle and the amount agreed upon by the
Contractor and Battelle for 1) completed work for which no separate
price is stated, 2) partially completed work, 3) other property
described above which is accepted by Battelle, and 4) the protection and
preservation of property. Failure to agree shall be a dispute within the
meaning of the clause entitled "Disputes." Battelle may withhold from
amounts otherwise due the Contractor for such completed supplies or
manufacturing materials such sum as Battelle determines to be necessary
to protect Battelle against loss because of outstanding liens or claims
of former lien holders.

E. If, after notice of termination of this contract under the provisions
of this clause, it is determined for any reason that the Contractor was
not in default under the provisions of this clause, or that the default
was excusable under the provisions of Paragraph C of this clause, the
rights and obligations of the parties shall, if the contract contains a
clause providing for termination for convenience of the Government, be
the same as if the notice of termination had been issued pursuant to
such clause. If, after notice of termination of this contract under the
provisions of this clause, it is determined for any reason that the
Contractor was not in default under the provisions of this clause, and
if this contract does not contain a clause providing for termination for
convenience of the Government, the contract shall be equitably adjusted
to compensate for such termination and the contract modified
accordingly. Failure to agree to any such adjustment shall be a dispute
within the meaning of the clause of this contract entitled "Disputes."

F. The rights and remedies of Battelle 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.

G. As used in Paragraph C of this clause, the terms "subcontractor" and
"subcontractors" mean subcontractor(s) at any tier.

[]{#__RefHeading___Toc64686028 .anchor}**TERMINATION FOR CONVENIENCE OF
THE GOVERNMENT -- FIXED PRICE** *(cl. 365d - Sep 1996)*

A.  Battelle may terminate performance of work under this contract in
    whole or, from time to time, in part if Battelle determines that a
    termination is in the Government\'s interest. The Battelle Contracts
    Representative shall terminate by delivering to the Contractor a
    Notice of Termination specifying the extent of termination and the
    effective date.

B.  After receipt of a Notice of Termination, and except as directed by
    Battelle, the Contractor shall immediately proceed with the
    following obligations, regardless of any delay in determining or
    adjusting any amounts due under this clause:

    1.  Stop work as specified in the notice.

    2.  Place no further subcontracts or orders (referred to as
        subcontracts in this clause) for materials, services, or
        facilities, except as necessary to complete the continued
        portion of the contract.

    3.  Terminate all subcontracts to the extent they relate to the work
        terminated.

    4.  Assign, as directed by Battelle, all right, title, and interest
        of the Contractor under the subcontracts terminated, in which
        case Battelle shall have the right to settle or to pay any
        termination settlement proposal arising out of those
        terminations.

    5.  With approval or ratification to the extent required by
        Battelle, settle all outstanding liabilities and termination
        settlement proposals arising from the termination of
        subcontracts; the approval or ratification will be final for
        purposes of this clause.

    6.  As directed by Battelle, transfer title and deliver to the
        Government-

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a.  The fabricated or unfabricated parts, work in process, completed
    work, supplies, and other material produced or acquired for the work
    terminated; and

b.  The completed or partially completed plans, drawings, information,
    and other property that, if the contract had been completed, would
    be required to be furnished to Battelle.

    1.   Complete performance of the work not terminated.

    2.  Take any action that may be necessary, or that the Battelle
        Contracts Representative may direct, for the protection and
        preservation of the property related to this contract that is in
        the possession of the Contractor and in which the Government has
        or may acquire an interest.

    3.  Use its best efforts to sell, as directed or authorized by
        Battelle, any property of the types referred to in Paragraph
        B.6. of this clause; *provided*, however, that the Contractor --

        a.  is not required to extend credit to any purchaser and

        b.  may acquire the property under the conditions prescribed by,
            and at prices approved by, Battelle. The proceeds of any
            transfer or disposition will be applied to reduce any
            payments to be made by Battelle to the Contractor under this
            contract, credited to the price or cost of the work, or paid
            in any other manner directed by Battelle.

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C.  The Contractor shall submit complete termination inventory schedules
    no later than 120 days from the effective date of termination,
    unless extended in writing by Battelle upon written request of the
    Contractor within this 120-day period.

D.  After expiration of the plant clearance period as defined in Subpart
    45.6 of the Federal Acquisition Regulation, the Contractor may
    submit to Battelle a list, certified as to quantity and quality, of
    termination inventory not previously disposed of, excluding items
    authorized for disposition by Battelle. The Contractor may request
    Battelle to remove those items or enter into an agreement for their
    storage. Within 15 days, Battelle will remove those items or enter
    into a storage agreement. Battelle may verify the list upon removal
    of the items, or if stored, within 45 days from submission of the
    list, and shall correct the list, as necessary, before final
    settlement.

E.  After termination, the Contractor shall submit a final termination
    settlement proposal to Battelle in the form and with the
    certification prescribed by Battelle. The Contractor shall submit
    the proposal promptly, but no later than 1 year from the effective
    date of termination, unless extended in writing by the Battelle
    Contracts Representative upon written request of the Contractor
    within this 1-year period. However, if Battelle determines that the
    facts justify it, a termination settlement proposal may be received
    and acted on after 1 year or any extension. If the Contractor fails
    to submit the proposal within the time allowed, Battelle may
    determine, on the basis of information available, the amount, if
    any, due the Contractor because of the termination and shall pay the
    amount determined.

F.  Subject to Paragraph E of this clause, the Contractor and Battelle
    may agree upon the whole or any part of the amount to be paid or
    remaining to be paid because of the termination. The amount may
    include a reasonable allowance for profit on work done. However, the
    agreed amount, whether under this Paragraph F or Paragraph G of this
    clause, exclusive of costs shown in Paragraph G.3. of this clause,
    may not exceed the total contract price as reduced by (1) the amount
    of payments previously made and (2) the contract price of work not
    terminated. The contract shall be modified, and the Contractor paid
    the agreed amount. Paragraph G of this clause shall not limit,
    restrict, or affect the amount that may be agreed upon to be paid
    under this paragraph.

G.  If the Contractor and Battelle fail to agree on the whole amount to
    be paid because of the termination of work, the Battelle Contracts
    Representative shall pay the Contractor the amounts determined by
    the Battelle Contracts Representative as follows, but without
    duplication of any amounts agreed on under Paragraph F of this
    clause:

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1.  The contract price for completed supplies or services accepted by
    Battelle (or sold or acquired under Paragraph B.9. of this clause)
    not previously paid for, adjusted for any saving of freight and
    other charges.

2.  The total of---

    a.  The costs incurred in the performance of the work terminated,
        including initial costs and preparatory expense allocable
        thereto, but excluding any costs attributable to supplies or
        services paid or to be paid under Paragraph G.1. of this clause;

    b.  The cost of settling and paying termination settlement proposals
        under terminated subcontracts that are properly chargeable to
        the terminated portion of the contract if not included in
        subdivision G.1.a. of this clause; and

    c.  A sum, as profit on Subdivision G.2.a. of this clause,
        determined by Battelle under 49.202 of the Federal Acquisition
        Regulation, in effect on the date of this contract, to be fair
        and reasonable; however, if it appears that the Contractor would
        have sustained a loss on the entire contract had it been
        completed, Battelle shall allow no profit under this Subdivision
        G.2.c. and shall reduce the settlement to reflect the indicated
        rate of loss.

3.  The reasonable costs of settlement of the work terminated, including
    --

    a.  Accounting, legal, clerical, and other expenses reasonably
        necessary for the preparation of termination settlement
        proposals and supporting data;

    b.  The termination and settlement of subcontracts (excluding the
        amounts of such settlements); and

    c.  Storage, transportation, and other costs incurred, reasonably
        necessary for the preservation, protection, or disposition of
        the termination inventory.

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H.  Except for normal spoilage, and except to the extent that Battelle
    expressly assumed the risk of loss, Battelle shall exclude from the
    amounts payable to the Contractor under Paragraph G of this clause,
    the fair value, as determined by Battelle, of property that is
    destroyed, lost, stolen, or damaged so as to become undeliverable to
    the Government or to a buyer.

I.  The cost principles and procedures of Part 31 of the Federal
    Acquisition Regulation, in effect on the date of this contract,
    shall govern all costs claimed, agreed to, or determined under this
    clause.

J.  The Contractor shall have the right of appeal, under the Disputes
    clause, from any determination made by Battelle under Paragraph E,
    G, or L of this clause, except that if the Contractor failed to
    submit the termination settlement proposal or request for equitable
    adjustment within the time provided in Paragraph E or L,
    respectively, and failed to request a time extension, there is no
    right of appeal.

K.  In arriving at the amount due the Contractor under this clause,
    there shall be deducted---

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1.   All unliquidated advance or other payments to the Contractor under
    the terminated portion of this contract;

2.  Any claim which Battelle has against the Contractor under this
    contract; and

3.  The agreed price for, or the proceeds of sale of, materials,
    supplies, or other things acquired by the Contractor or sold under
    the provisions of this clause and not recovered by or credited to
    Battelle.

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L.  If the termination is partial, the Contractor may file a proposal
    with Battelle for an equitable adjustment of the price(s) of the
    continued portion of the contract. Battelle shall make any equitable
    adjustment agreed upon. Any proposal by the Contractor for an
    equitable adjustment under this clause shall be requested within 90
    days from the effective date of termination unless extended in
    writing by the Battelle Contracts Representative.

M. 1. Battelle may, under the terms and conditions it prescribes, make
partial payments and payments against costs incurred by the Contractor
for the terminated portion of the contract, if Battelle believes the
total of these payments will not exceed the amount to which the
Contractor will be entitled.

2.  If the total payments exceed the amount finally determined to be
    due, the Contractor shall repay the excess to Battelle upon demand,
    together with interest computed at the rate established by the
    Secretary of the Treasury under 50 U.S.C. App. 1215(b)(2). Interest
    shall be computed for the period from the date the excess payment is
    received by the Contractor to the date the excess is repaid.
    Interest shall not be charged on any excess payment due to a
    reduction in the Contractor\'s termination settlement proposal
    because of retention or other disposition of termination inventory
    until 10 days after the date of the retention or disposition, or a
    later date determined by Battelle because of the circumstances.

    N.  Unless otherwise provided in this contract or by statute, the
        Contractor shall maintain all records and documents relating to
        the terminated portion of this contract for 3 years after final
        settlement. This includes all books and other evidence bearing
        on the Contractor\'s costs and expenses under this contract. The
        Contractor shall make these records and documents available to
        the Battelle and the Department of Energy, at the Contractor\'s
        office, at all reasonable times, without any direct charge. If
        approved by Battelle, photographs, microphotographs, or other
        authentic reproductions may be maintained instead of original
        records and documents.

**WARRANTY OF SUPPLIES OF A NONCOMPLEX NATURE** *(cl 383b / May 2001)*

A.  Definitions: As used in this clause, \"Acceptance\" means the act of
    an authorized representative of Battelle by which Battelle assumes
    for itself, or as an agent of another, ownership of existing
    supplies, or approves specific services as partial or complete
    performance of the contract. \"Supplies\" means the end items
    furnished by the Contractor and related services required under this
    contract. The word does not include \"data.\"

B.  Contractor\'s obligations.

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1.  Notwithstanding inspection and acceptance by Battelle of supplies
    furnished under this contract, or any condition of this contract
    concerning the conclusiveness thereof, the Contractor warrants that
    for \_\_\_\_\_\_\_\_

    a.  All supplies furnished under this contract will be free from
        defects in material or workmanship and will conform with all
        requirements of this contract; and

    b.  The preservation, packaging, packing, and marking, and the
        preparation for, and method of, shipment of such supplies will
        conform with the requirements of this contract.

2.  When return, correction, or replacement is required, transportation
    charges and responsibility for the supplies while in transit shall
    be borne by the Contractor. However, the Contractor\'s liability for
    the transportation charges shall not exceed an amount equal to the
    cost of transportation by the usual commercial method of shipment
    between the place of delivery specified in this contract and the
    Contractor\'s plant, and return.

3.  Any supplies or parts thereof, corrected or furnished in replacement
    under this clause, shall also be subject to the terms of this clause
    to the same extent as supplies initially delivered. The warranty,
    with respect to supplies or parts thereof, shall be equal in
    duration to that in paragraph B.1. of this clause and shall run from
    the date of delivery of the corrected or replaced supplies.

4.  All implied warranties of merchantability and \"fitness for a
    particular purpose\" are excluded from any obligation contained in
    this contract.

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C.  Remedies available to Battelle.

    1.  The Battelle Contracts Representative shall give written notice
        to the Contractor of any breach of warranties in paragraph B.1
        of this clause within 365 days.

    2.  Within a reasonable time after the notice, the Battelle
        Contracts Representative may either --

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a.  Require, by written notice, the prompt correction or replacement of
    any supplies or parts thereof (including preservation, packaging,
    packing, and marking) that do not conform with the requirements of
    this contract within the meaning of paragraph B.1 of this clause; or

b.  Retain such supplies and reduce the contract price by an amount
    equitable under the circumstances.

> 3\. a. If the contract provides for inspection of supplies by sampling
> procedures, conformance of supplies or components subject to warranty
> action shall be determined by the applicable sampling procedures in
> the contract. The Battelle Contracts Representative --

i.  May, for sampling purposes, group any supplies delivered under this
    contract;

ii. Shall require the size of the sample to be that required by sampling
    procedures specified in the contract for the quantity of supplies on
    which warranty action is proposed;

iii. May project warranty sampling results over supplies in the same
     shipment or other supplies contained in other shipments even though
     all of such supplies are not present at the point of reinspection;
     provided, that the supplies remaining are reasonably representative
     of the quantity on which warranty action is proposed; and

iv. Need not use the same lot size as on original inspection or
    reconstitute the original inspection lots.

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1.  Within a reasonable time after notice of any breach of the
    warranties specified in paragraph B.1 of this clause, the Battelle
    Contracts Representative may exercise one or more of the following
    options:

    i.  Require an equitable adjustment in the contract price for any
        group of supplies.

    ii. Screen the supplies grouped for warranty action under this
        clause at the Contractor\'s expense and return all nonconforming
        supplies to the Contractor for correction or replacement.

    iii. Require the Contractor to screen the supplies at locations
         designated by Battelle or the Government within the continental
         United States and to correct or replace all nonconforming
         supplies.

    iv. Return the supplies grouped for warranty action under this
        clause to the Contractor (irrespective of the f.o.b. point or
        the point of acceptance) for screening and correction or
        replacement.

> 4\. a. The Battelle Contracts Representative may, by contract or
> otherwise, correct or replace the nonconforming supplies with similar
> supplies from another source and charge to the Contractor the cost
> occasioned to Battelle thereby if the Contractor-

(i) Fails to make redelivery of the corrected or replaced supplies
    within the time established for their return; or

(ii) Fails either to accept return of the nonconforming supplies or
     fails to make progress after their return to correct or replace
     them so as to endanger performance of the delivery schedule, and in
     either of these circumstances does not cure such failure within a
     period of 10 days (or such longer period as the Battelle Contracts
     Representative may authorize in writing) after receipt of notice
     from the Battelle Contracts Representative specifying such failure.

> b\. Instead of correction or replacement by Battelle, the Battelle
> Contracts Representative may require an equitable adjustment of the
> contract price. In addition, if the Contractor fails to furnish timely
> disposition instructions, the Battelle Contracts Representative may
> dispose of the nonconforming supplies for the Contractor\'s account in
> a reasonable manner. Battelle is entitled to reimbursement from the
> Contractor, or from the proceeds of such disposal, for the reasonable
> expenses of the care and disposition of the nonconforming supplies, as
> well as for excess costs incurred or to be incurred.

5.  The rights and remedies of Battelle provided in this clause are in
    addition to and do not limit any rights afforded to Battelle by any
    other clause of this contract.

[]{#BM1046839 .anchor}

**[CLAUSES INCORPORATED BY REFERENCE]{.underline}**

The following additional Federal Acquisition Regulation (FAR) and
Department of Energy Acquisition Regulation (DEAR) clauses may also
apply to this contract as specified on the contract schedule and are,
therefore, incorporated by reference:

[]{#__RefHeading___Toc64686030 .anchor}FAR 52.222-26 Equal Opportunity
(Apr 2002)

[]{#__RefHeading___Toc64686031 .anchor}FAR 52.222-35 Equal Opportunity
for Special Disabled Veterans, Veterans of the Vietnam Era, and Other
Eligible Veterans (Dec 2001)

[]{#__RefHeading___Toc64686032 .anchor}FAR 52.222-36 Affirmative Action
for Workers with Disabilities (June 1998)

[]{#__RefHeading___Toc64686033 .anchor}FAR 52.222-41 Service Contract
Act of 1965, as Amended (May 1989)

[]{#__RefHeading___Toc64686034 .anchor}DEAR 952.204-2 Security (May
2002)

[]{#__RefHeading___Toc64686035 .anchor}DEAR 952.250-70 Nuclear Hazards
Indemnity Agreement (June 1996)