**FAA Acquisition Management System Clauses**

**Change 40 -- April 2006**

This document transmits changes to FAA Acquisition Management System
clauses and provisions. Unless otherwise specified, these changes are
effective April 7, 2006 and apply to all screening information requests
and contracts issued after April 7, 2006.

**A. CLAUSES REVISED**

3.1.7-6 Disclosure of Certain Employee Relationships

3.3.1-33 Central Contractor Registration

3.13-4 Contractor Identification Numbering System (DUNS)

**B. CLAUSES ADDED**

3.3.1.35 Certification of Registration in Central Contractor
Registration

## C. CLAUSES REMOVED

None.

#### D. PRESCRIPTIONS CHANGED

3.1.7-6 Disclosure of Certain Employee Relationships

3.3.1-35 Certification of Registration in Central Contractor
Registration

**3.1.7-6 Disclosure of Certain Employee Relationships** (April 2006)

\(a\) The policy of the FAA is to avoid doing business with contractors,
subcontractors, and consultants who have a conflict of interest or an
appearance of a conflict of interest. The purpose of this policy is to
maintain the highest level of integrity within its workforce and to
ensure that the award of procurement contracts is based upon fairness
and merit.

\(b\) The contractor must provide to the Contracting Officer the
following information with its proposal and must provide an information
update within 30 days of the award of a contract, any subcontract, or
any consultant agreement, or within 30 days of the retention of a
Subject Individual or former FAA employee subject to this clause:

> \(1\) The names of all Subject Individuals who:
>
> \(i\) participated in preparation of proposals for award; or
>
> \(ii\) are planned to be used during performance; or
>
> \(iii\) are used during performance; and
>
> \(2\) The names of all former FAA employees, retained by the
> contractor who were employed by FAA during the two year period
> immediately prior to the date of:
>
> \(i\) the award; or
>
> \(ii\) their retention by the contractor; and
>
> \(3\) The date on which the initial expression of interest in a future
> financial arrangement was discussed with the contractor by any former
> FAA employee whose name is required to be provided by the contractor
> pursuant to subparagraph (2); and
>
> \(4\) The location where any Subject Individual or former FAA employee
> whose name is required to be provided by the contractor pursuant to
> subparagraphs (1) and (2), are expected to be assigned.

\(c\) \"Subject Individual\" means a current FAA employee\'s father,
mother, son, daughter, brother, sister, uncle, aunt, first cousin,
nephew, niece, husband, wife, father-in-law, mother-in-law, son-in-law,
daughter-in-law, brother-in-law, sister-in-law, stepfather, stepmother,
stepson, stepdaughter, stepbrother, stepsister, half brother, half
sister, spouse of an in-law, or a member of his/her household.

\(d\) The contractor must incorporate this clause into all subcontracts
or consultant agreements awarded under this contract and must further
require that each such subcontractor or consultant incorporate this
clause into all subcontracts or consultant agreements at any tier
awarded under this contract unless the Contracting Officer determines
otherwise.

\(e\) The information as it is submitted, must be certified as being
true and correct. If there is no such information, the certification
must so state.

\(f\) Remedies for nondisclosure: The following are possible remedies
available to the FAA should a contractor misrepresent or refuse to
disclose or misrepresent any information required by this clause:

> \(1\) Termination of the contract.
>
> \(2\) Exclusion from subsequent FAA contracts.
>
> \(3\) Other remedial action as may be permitted or provided by law or
> regulation or policy or by the terms of the contract.

**[PRESCRIPTION]{.underline}**:

Shall be used in all support services SIRs and contracts with an
estimated total value of \$10,000 or more, and in all support services
modifications with an estimated total value of \$1,000,000 or more.

**3.3.1-33 Central Contractor Registration** (April 2006)

\(a\) Definitions. As used in this clause

\"Central Contractor Registration (CCR) database\" means the primary
Government repository for Contractor information required for the
conduct of business with the Government.

\"Data Universal Numbering System (DUNS) number\" means the 9-digit
number assigned by Dun and Bradstreet, Inc. (D&B) to identify unique
business entities.

\"Data Universal Numbering System +4 (DUNS+4) number\" means the DUNS
number assigned by D&B plus a 4-character suffix that may be assigned by
a business concern. (D&B has no affiliation with this 4-character
suffix.) This 4-character suffix may be assigned at the discretion of
the business concern to establish additional CCR records for identifying
alternative Electronic Funds Transfer (EFT) accounts for the same parent
concern.

\"Registered in the CCR database\" means that the Contractor has entered
all mandatory information, including the DUNS number or the DUNS+4
number, into the CCR database.

\(b\) (1) By submission of an offer, the offeror acknowledges the
requirement that a prospective awardee shall be registered in the CCR
database prior to award, during performance, and through final payment
of any contract, basic agreement, basic ordering agreement, or blanket
purchasing agreement resulting from this solicitation.

> \(2\) The offeror shall enter, in Representations, Certifications and
> Other Statements of Offerors Section of the solicitation, the DUNS or
> DUNS +4 number that identifies the offeror\'s name and address exactly
> as stated in the offer. The DUNS number will be used by the
> Contracting Officer to verify that the offeror is registered in the
> CCR database.

\(c\) If the offeror does not have a DUNS number, it should contact Dun
and Bradstreet directly to obtain one.

> \(1\) An offeror may obtain a DUNS number
>
> \(i\) If located within the United States, by calling Dun and
> Bradstreet at 1-866-705-5711 or via the Internet at
> <http://www.dnb.com/>; or
>
> \(ii\) If located outside the United States, by contacting the local
> Dun and Bradstreet office.
>
> \(2\) The offeror should be prepared to provide the following
> information:
>
> \(i\) Company legal business.
>
> \(ii\) Tradestyle, doing business, or other name by which your entity
> is commonly recognized.
>
> \(iii\) Company Physical Street Address, City, State, and ZIP Code.
>
> \(iv\) Company Mailing Address, City, State and ZIP Code (if different
> from physical street address).
>
> \(v\) Company Telephone Number.
>
> \(vi\) Date the company was started.
>
> \(vii\) Number of employees at your location.
>
> \(viii\) Chief executive officer/key manager.
>
> \(ix\) Line of business (industry).
>
> \(x\) Company Headquarters name and address (reporting relationship
> within your entity).

\(d\) If the offeror does not become registered in the CCR database in
the time prescribed by the Contracting Officer, the Contracting Officer
may proceed to award to the next otherwise successful registered
offeror.

\(e\) Processing time, which normally takes 48 hours, should be taken
into consideration when registering. Offerors who are not registered
should consider applying for registration immediately upon receipt of
this solicitation.

\(f\) The Contractor is responsible for the accuracy and completeness of
the data within the CCR database, and for any liability resulting from
the Government\'s reliance on inaccurate or incomplete data. To remain
registered in the CCR database after the initial registration, the
Contractor is required to review and update on an annual basis from the
date of initial registration or subsequent updates its information in
the CCR database to ensure it is current, accurate and complete.
Updating information in the CCR does not alter the terms and conditions
of this contract and is not a substitute for a properly executed
contractual document.

\(g\) (1) (i) If a Contractor has legally changed its business name,
\"doing business as\" name, or division name (whichever is shown on the
contract), or has transferred the assets used in performing the
contract, but has not completed the necessary requirements regarding
novation and change-of-name agreements in AMS Procurement Guidance
T3.10.1.A-8, the Contractor shall provide the responsible Contracting
Officer a minimum of one business day\'s written notification of its
intention to:

> \(A\) change the name in the CCR database;
>
> \(B\) comply with the requirements of T3.10.1.A-8; and
>
> \(C\) agree in writing to the timeline and procedures specified by the
> responsible Contracting Officer. The Contractor must provide the
> Contracting Officer with the notification, sufficient documentation to
> support the legally changed name.
>
> \(ii\) If the Contractor fails to comply with the requirements of
> paragraph (g)(1)(i) of this clause, or fails to perform the agreement
> at paragraph (g)(1)(i)(C) of this clause, and, in the absence of a
> properly executed novation or change-of-name agreement, the CCR
> information that shows the Contractor to be other than the Contractor
> indicated in the contract will be considered to be incorrect
> information within the meaning of the \"Suspension of Payment\"
> paragraph of the electronic funds transfer (EFT) clause of this
> contract.
>
> \(2\) The Contractor shall not change the name or address for EFT
> payments or manual payments, as appropriate, in the CCR record to
> reflect an assignee for the purpose of assignment of claims. Assignees
> shall be separately registered in the CCR database. Information
> provided to the Contractor\'s CCR record that indicates payments,
> including those made by EFT, to an ultimate recipient other than that
> Contractor will be considered to be incorrect information within the
> meaning of the \"Suspension of payment\" paragraph of the EFT clause
> of this contract.

\(h\) Offerors and Contractors may obtain information on registration
and annual confirmation requirements via the internet at
<http://www.ccr.gov/> or by calling 1-888-227-2423, or 269-961-5757.

(End of clause)

**[PRESCRIPTION]{.underline}:**

Shall be used in all SIRs and contracts.

**3.13-4 Contractor Identification Number Data Universal Numbering
System (DUNS) Number** (April 2006)

\(a\) Definitions. As used in this clause

\"Contractor Identification Number,\" as used in this provision, means
\"Data Universal Numbering System (DUNS) number, which is a nine-digit
number assigned by Dun and Bradstreet Information Services, to identify
unique business entities (taken from CCR clause)

\"Data Universal Numbering System +4 (DUNS+4) number\" means the DUNS
number assigned by D&B plus a 4-character suffix that may be assigned by
a business concern. (D&B has no affiliation with this 4-character
suffix.) This 4-character suffix may be assigned at the discretion of
the business concern to establish additional CCR records for identifying
alternative Electronic Funds Transfer.

\(b\) Contractor identification is essential for receiving payment and
complying with statutory contract reporting requirements. Therefore, the
offeror shall provide its DUNS or DUNS+4 number below. The DUNS number
will be used by the Contracting Officer to verify that the offeror is
registered in the CCR database.

> DUNS OR DUNS+4 NUMBER:
> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(c\) If the offeror does not have a DUNS number, it should contact Dun
and Bradstreet directly to obtain one.

> \(1\) An offeror may obtain a DUNS number
>
> \(i\) If located within the United States, by calling Dun and
> Bradstreet at 1-866-705-5711 or via the Internet at
> <http://www.dnb.com/>; or
>
> \(ii\) If located outside the United States, by contacting the local
> Dun and Bradstreet office.
>
> \(2\) The offeror should be prepared to provide the following
> information:
>
> \(i\) Company legal business.
>
> \(ii\) Tradestyle, doing business, or other name by which your entity
> is commonly recognized.
>
> \(iii\) Company Physical Street Address, City, State, and ZIP Code.
>
> \(iv\) Company Mailing Address, City, State and ZIP Code (if different
> from physical street address).\
> (v) Company Telephone Number.
>
> \(vi\) Date the company was started.
>
> \(vii\) Number of employees at your location.
>
> \(viii\) Chief executive officer/key manager.
>
> \(ix\) Line of business (industry).
>
> \(x\) Company Headquarters name and address (reporting relationship
> within your entity).

(End of provision)

[PRESCRIPTION]{.underline}

Shall be used in all SIRs.

**3.3.1-35 Certification of Registration in Central Contractor
Registration (CCR)** (April 2006)

In accordance with Clause 3.3.1-33, Central Contractor Registration,
offeror certifies that they are registered in the CCR Database and have
entered all mandatory information including the DUNS or DUNS+4 Number.

Name: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Title: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Phone Number: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(End of provision)

**[PRESCRIPTION]{.underline}**:

Shall be used in all SIRs.

END OF SUMMARY

**1.13-1** **Notice of Earned Value Management System (EVMS)** (March
2006)

The offeror\'s (you/your) response to this screening information request
(SIR) must include proof of a certified EVMS or provide a plan (the
plan) to implement a certified system that complies with the EVMS
criteria (the criteria) stated in subparagraph (b) of clause 1.13-2,
\"EVMS.\" You must submit the following as part of your proposal for
Contracting Officer (CO) approval:

\(a\) Documentation demonstrating that your EVMS has been American
National Standard ANSI/EIA 748 certified and EVM surveillance
documentation demonstrating that you have maintained an American
National Standard ANSI/EIA 748 compliant EVMS at the time this SIR is
issued; or

\(b\) The plan that explains how your EVMS will be certified for each
guideline of the American National Standard ANSI/EIA 748 Standard.

\(c\) Names of subcontractors. If you have not yet identified
subcontractors, you must identify any part of the work you intend to
award to subcontractors. The CO must approve the subcontractors before
you sign contracts with them.

(End of provision)

PRESCRIPTION:

The CO must use this provision in SIRs consistent with AMS policy
paragraph 4.16.2, Contract Requirements.

**1.13-2** **Earned Value Management System** (March 2006)

\(a\) The Earned Value Management System (EVMS)is a management tool that
provides for integrating technical, cost and schedule information about
contract performance. This information enables the FAA (we) and
contractor program managers to manage contracts more effectively.
Industry standard American National Standard ANSI/EIA -748-A specifies
the EVMS criteria that are incorporated by reference into this clause.

\(b\) The Contractor (you/your) must use an EVMS complying with American
National Standard ANSI/EIA-748-A that the FAA Contracting Officer (CO)
or the contracting officer from another federal agency certified before
contract award. If you do not have a certified EVMS in place at the time
of award, you must provide the CO with your plan to create an EVMS that
complies with American National Standard ANSI/EIA-748-A before award and
implement the system within 90 days after award.

\(c\) Approved subcontractor EVM plans:

\(1\) The CO must approve subcontractor EVMS plans before they begin
work. The CO has approved the following subcontractor EVMS systems.

\[CO to insert name of approved subcontractor and EVMS plan here\]

\[CO to insert name of approved subcontractor and EVMS plan here\]

\(2\) You must require subcontractors listed in the contract and subject
to EVMS certification to comply with this clause, paragraphs (a) and
(b).

\(d\) You must submit a Contract Performance Report prepared under
\[Contracting Officer to insert reference to location of the applicable
DID DI-MGMT-81466A that specifies the contract\'s reporting
requirements. The CO may request customized earned value management
reports\].

\(e\) You must obtain approval for EVMS system revisions consistent with
the EVM system change process approved with the EVM certification or
similar agreement, i.e., EVM Advance Agreement, with the controlling
certification approval or acceptance party.

\(f\) You must participate in FAA EVM Surveillance and provide access to
all pertinent records and data requested by the CO so the we can verify
that your EVMS complies with the criteria specified in subparagraph (b)
at the time of award and throughout contract performance consistent with
the FAA EVMS Guide.

(End of clause)

PRESCRIPTION:

The CO must use this clause in SIRs and contracts consistent with AMS
policy paragraph 4.16.2, Contract Requirements. The CO must insert data
in this clause.

**1.13-5** **Integrated Master Schedule** (March 2006)

\(a\) Offerors (you) must submit an Integrated Master Schedule (IMS)
report prepared under IMS DID DI-MGMT-81650.

\(b\) You must manage the execution of the \[CO to insert program name\]
program using the IMS as a day-to-day execution tool and periodically
assess program progress in meeting program requirements. You must report
on program progress consistent with the IMS at each program management
review, at selected technical reviews and at other times at the
Government\'s request.

\(c\) You must revise the IMS, where necessary, to reflect current
contract milestones and deliverables. The IMS will include all
activities of the prime contractor, subcontractors, and dependencies on
the Government. All contractor schedule information delivered to the
Government or presented at program reviews shall originate from the IMS.
You must perform appropriate analyses of the IMS tasks and report
potential or existing problem areas and recommend corrective actions to
eliminate or reduce schedule impact to the program.

(End of clause)

PRESCRIPTION:

PRESCRIPTION:

The CO must use this clause in SIRS and contracts consistent with AMS
policy paragraph 4.16.2, Contract Requirements. The CO must insert data
in this clause.

**1.13-6** **Contractor Integrated Baseline Review** (March 2006)

\(a\) The Contractor (you) must participate in a Government-conducted
Integrated Baseline Review (IBR) with acceptable action plans approved
by the Contracting Officer within \[CO to insert date or event\] after
contract award or significant (as determined by the CO) contract
modifications.

\(b\) The IBR will be conducted consistent with the NDIA Integrated
Baseline Review (IBR) Guide.

(End of clause)

PRESCRIPTION:

PRESCRIPTION:

The CO must use this clause in SIRs and contracts consistent with AMS
policy paragraph 4.16.2 Contract Requirements. The CO must insert data
in this clause.

**3.1-1** **Clauses and Provisions Incorporated by Reference** (December
2005)

This screening information request (SIR) or contract, as applicable,
incorporates by reference the provisions or clauses listed below with
the same force and effect as if they were given in full text. Upon
request, the Contracting Officer will make the full text available, or
offerors and contractors may obtain the full text via Internet at:

<http://www.asu.faa.gov/conwrite>/ (on this web page, select \"Search
and View Clauses\").

PRESCRIPTION:

Shall be used in all SIR\'s and contract when clauses are used in
reference.

**3.1.7-1** **Exclusion from Future Agency Contracts** (August 1997)

\(a\) Work under this contract may create a future organizational
conflict of interest (OCI) that could prohibit the Contractor from
competing for, or being awarded future Government contracts.

The following examples illustrate situations in which questions
concerning organizational conflicts of interest may arise. They are not
all inclusive, but are intended to help the Contracting Officer apply
general guidance to individual contract situations:

\(1\) Unequal access to information. Access to \"nonpublic information\"
as part of the performance of an FAA contract could provide the
contractor a competitive advantage in a later competition for another
FAA contract. Such an advantage could easily be perceived as unfair by a
competing vendor who is not given similar access to the relevant
information. If the requirements of the FAA procurement anticipate the
successful vendor may have access to nonpublic information, the
successful vendor should be required to submit and negotiate an
acceptable mitigation plan. Alternatively, the \"nonpublic information\"
may be provided to all vendors.

\(2\) Biased ground rules. A contractor in the course of performance of
an FAA contract, has in some fashion established important \"ground
rules\" for another FAA contract, where the same contractor may be a
competitor. For example, a contractor may have drafted the statement of
work, specifications, or evaluation criteria of a future FAA
procurement. The primary concern of the FAA in this case is that a
contractor so situated could slant key aspects of a procurement in its
own favor, to the unfair disadvantage of competing vendors. If the
requirements of the FAA procurement anticipate the contractor may have
been in a position to establish important ground rules, including but
not limited to those described herein, the contractor should be required
to submit and negotiate an acceptable mitigation plan.

\(3\) Impaired objectivity. A contractor in the course of performance of
an FAA contract, is placed in a situation of providing assessment and
evaluation findings over itself, or another business division, or
subsidiary of the same corporation, or other entity with which it has a
significant financial relationship. The concern in this case is that the
contractor\'s ability to render impartial advice to the FAA could appear
to be undermined by the contractor\'s financial or other business
relationship to the entity whose work product is being assessed or
evaluated. In these situations, a \"walling off\" of lines of
communication may well be insufficient to remove the perception that the
objectivity of the contractor has been tainted. If the requirements of
the FAA procurement indicate that the successful vendor may be in a
position to provide evaluations and assessments of itself or corporate
siblings, or other entity with which it has a significant financial
relationship, the affected contractor should provide a mitigation plan
that includes recusal by the vendor from the affected contract work.
Such recusal might include divestiture of the work to a third party
vendor.

\(b\) In order to prevent a future OCI resulting from potential bias,
unfair competitive advantage, or impaired objectivity, the Contractor
shall be subject to the following restrictions:

\(1\) The Contractor shall be excluded from competition for, or award of
any government contracts as to which, in the course of performance of
this contract, the Contractor has received advance procurement
information before such information has been made generally available to
other persons or firms.

\(2\) The Contractor shall be excluded from competition for, or award of
any FAA contract for which the contractor actually assists in the
development of the screening information request (SIR), specifications
or statements of work.

\(3\) The Contractor shall be excluded from competition for or award of
any government contract which calls for the evaluation of system
requirements, system definitions, or other products developed by the
Contractor under this contract.

\(4\) The Contractor shall be excluded from competition for, or award of
any government contract which calls for the construction or fabrication
of any system, equipment, hardware, and/or software for which the
Contractor participated in the development of requirements or
definitions pursuant to this contract.

\(c\) This clause shall not exclude the Contractor from performing work
under any amendment or modification to this contract or from competing
for award for any future contract for work that is the same or similar
to work performed under this contract.

\(d\) The term \"contractor\" as used in this clause, includes any
person, firm or corporation which has a majority or controlling interest
in the contractor or in any parent corporation thereof, any person, firm
, or corporation in or as to which the contractor (or any parent or
subsidiary corporation thereof) has a majority or controlling interest.
The term also includes the corporate officers of the contractor, those
of any corporation which has a majority or controlling interest in the
contractor, and those of any corporation in which the contractor (or any
parent or subsidiary corporation thereof) has a majority or controlling
interest.

\(e\) The agency may in its sole discretion, waive any provisions of
this clause if deemed in the best interest of the Government. The
exclusions contained in this clause shall apply for the duration of this
contract and for three (3) years after completion and acceptance of all
work performed hereunder.

\(f\) If any provision of this clause excludes the Contractor from
competition for, or award of any contract, the Contractor shall not be
permitted to serve as a subcontractor, at any tier, on such contract.
This clause shall be incorporated into any subcontracts or consultant
agreements awarded under this contract unless the Contracting Officer
determines otherwise.

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contract when the Contracting Officer
has determined an organizational conflict of interest exists.

**3.1.7-2** **Organizational Conflicts of Interest** (August 1997)

\(a\) The offeror or Contractor warrants that, to the best of the
Contractor\'s knowledge and belief, there are no relevant facts or
circumstances which could give rise to an organizational conflict of
interest (OCI), as defined in the FAA Acquisition Management System,
\"Organizational Conflicts of Interest (3.1.7)\", or that the Contractor
has disclosed all such relevant information.

\(b\) The offeror or Contractor agrees that if an actual or potential
OCI is discovered after award, the Contractor shall make a full
disclosure in writing to the Contracting Officer. The disclosure shall
include a mitigation plan describing actions the Contractor has taken or
proposed to take, to avoid, mitigate, or neutralize the actual or
potential conflict. Changes in the Contractor\'s relationships due to
mergers, consolidations or any unanticipated circumstances may create an
unacceptable organizational conflict of interest might necessitate such
disclosure.

\(c\) The FAA reserves the right to review and audit OCI mitigation
plans as needed after award, and to reject mitigation plans if the OCI,
in the opinion of the Contracting Officer cannot be avoided, or
mitigated.

\(d\) The Contracting Officer may terminate this contract for
convenience in whole or in part, if it deems such termination necessary
to avoid an OCI. If the Contractor was aware of a potential OCI prior to
award or discovered an actual or potential conflict after award and did
not disclose or misrepresented relevant information to the Contracting
Officer, the Government may terminate this contract for default, debar
the Contractor from government contracting, or pursue such other
remedies as may be permitted by law or this contract.

\(e\) The Contractor further agrees to insert provisions which shall
conform substantial to the language of this clause including this
paragraph (d) in any subcontract or consultant agreement hereunder.

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contract when the Contracting Officer
has reason to believe an organizational conflict of interest could
occur.

**3.1.7-4** **Organizational Conflict of Interest SIR Provision** (March
2006)

\(a\) The policy of the FAA is to avoid contracting with contractors who
have unacceptable organizational conflicts of interest. An
organizational conflict of interest means that because of existing or
planned activities, an offeror or contractor is unable or potentially
unable to render impartial assistance to the agency, or has an unfair
competitive advantage, or the offeror or contractor\'s objectivity is,
or might be, impaired.

It is not the intention of the FAA to foreclose a vendor from a
competitive acquisition due to a perceived OCI. FAA Contracting Officers
are fully empowered to evaluate each potential OCI scenario based upon
the applicable facts and circumstances. The final determination of such
action may be negotiated between the impaired vendor and the Contracting
Officer. The Contracting Officer\'s business judgment and sound
discretion in identifying, negotiating, and eliminating OCI scenarios
should not adversely affect the FAA\'s policy for competition. The FAA
is committed to working with potential vendors to eliminate or mitigate
actual and perceived OCI situations, without detriment to the integrity
of the competitive process, the mission of the FAA, or the legitimate
business interests of the vendor community.

\(b\) Mitigation plans. The successful contractor will be required to
permit a Government audit of internal OCI mitigation procedures for
verification purposes. The FAA reserves the right to reject a mitigation
plan, if in the opinion of the Contracting Officer, such a plan is not
in the best interests of the FAA. Additionally, after award the FAA will
review and audit OCI mitigation plans as needed, in the event of changes
in the vendor community due to mergers, consolidations, or any
unanticipated circumstances that may create an unacceptable
organizational conflict of interest.

\(c\) Potential organizational conflict of interest. The following
examples illustrate situations in which questions concerning
organizational conflicts of interest may arise. They are not all
inclusive.

\(1\) Unequal access to information. Access to \"nonpublic information\"
as part of the performance of an FAA contract could provide the
contractor a competitive advantage in a later competition for another
FAA contract. Such an advantage could easily be perceived as unfair by a
competing vendor who is not given similar access to the relevant
information. If the requirements of the FAA procurement anticipate the
successful vendor may have access to nonpublic information, the
successful vendor should be required to submit and negotiate an
acceptable mitigation plan.

\(2\) Biased ground rules. A contractor in the course of performance of
an FAA contract, has in some fashion established important \"ground
rules\" for another FAA contract, where the same contractor may be a
competitor. For example, a contractor may have drafted the statement of
work, specifications, or evaluation criteria of a future FAA procurement
. The primary concern of the FAA in this case is that a contractor so
situated could slant key aspects of a procurement in its own favor, to
the unfair disadvantage of competing vendors. If the requirements of the
FAA procurement indicate the successful vendor may be in a position to
establish, or may have important ground rules, including but not limited
to those described herein, the successful vendor should be required to
submit and negotiate an acceptable mitigation plan.

\(3\) Impaired objectivity. A contractor in the course of performance of
an FAA contract, is placed in a situation of providing assessment and
evaluation findings over itself, or another business division, or
subsidiary of the same corporation, or other entity with which it has a
significant financial relationship. The concern in this case is that the
contractor\'s ability to render impartial advice to the FAA could appear
to be undermined by the contractor\'s financial or other business
relationship to the entity whose work product is being assessed or
evaluated. In these situations, a \"walling off\" of lines of
communication may well be insufficient to remove the perception that the
objectivity of the contractor has been tainted. If the requirements of
the FAA procurement indicate that the successful vendor may be in a
position to provide evaluations and assessments of itself or corporate
siblings, or other entity with which it has a significant financial
relationship, the affected contractor should provide a mitigation plan
that includes recusal by the vendor from the affected contract work.
Such recusal might include divestiture of the work to a third party
vendor.

\(d\) Disclosure by offerors or contractors participating in FAA
acquisitions

\(1\) Offerors or contractors should provide information which concisely
describes all relevant facts concerning any past, present or currently
planned interest, (financial, contractual, organizational, or otherwise)
relating to the work to be performed and bearing on whether the offeror
or contractor has a possible OCI.

\(2\) If the offeror or contractor does not disclose any relevant facts
concerning an OCI, the offeror or contractor, by submitting an offer or
signing the contract, warrants that to its best knowledge and belief no
such facts exist relevant to possible OCI.

\(e\) Remedies for Nondisclosure. The following are possible remedies
should an offeror or contractor refuse to disclose, or misrepresent, any
information regarding a potential OCI:

\(1\) Refusal to provide adequate information may result in
disqualification for award.

\(2\) Nondisclosure or misrepresentation of any relevant interest may
also result in the disqualification of the offeror for award.

\(3\) Termination of the contract, if the nondisclosure or
misrepresentation is discovered after award.

\(4\) Disqualification from subsequent FAA contracts.

\(5\) Other remedial action as may be permitted or provided by law or in
the resulting contract.

(End of provision)

PRESCRIPTION:

This is the only Organizational Conflict of Interest clause.

**3.1.7-5** **Disclosure of Conflicts of Interest** (May 2001)

It is the Federal Aviation Administration (FAA) policy to award
contracts to only those offerors whose objectivity is not impaired
because of any related past, present, or planned interest, financial or
otherwise, in organizations regulated by FAA or in organizations whose
interests may be substantially affected by Agency activities. Based on
this policy:

\(a\) The offeror shall provide a statement in its proposal which
describes in a concise manner all past, present or planned
organizational, financial, contractual or other interest(s) with an
organization regulated by FAA, or with an organization whose interests
may be substantially affected by Agency activities, and which is related
to the work under this solicitation. The interest(s) described shall
include those of the proposer, its affiliates, proposed consultants,
proposed subcontractors and key personnel of any of the above. Past
interest shall be limited to within one year of the date of the
offeror\'s technical proposal. Key personnel shall include any person
owning more than 20% interest in the offeror, and the offeror\'s
corporate officers, its senior managers and any employee who is
responsible for making a decision or taking an action on this contract
where the decision or action can have an economic or other impact on the
interests of a regulated or affected organization.

\(b\) The offeror shall describe in detail why it believes, in light of
the interest(s) identified in (a) above, that performance of the
proposed contract can be accomplished in an impartial and objective
manner.

\(c\) In the absence of any relevant interest identified in (a) above,
the offeror shall submit in its proposal a statement certifying that to
its best knowledge and belief no affiliation exists relevant to possible
conflicts of interest. The offeror must obtain the same information from
potential subcontractors prior to award of a subcontract.

\(d\) The Contracting Officer will review the statement submitted and
may require additional relevant information from the offeror. All such
information, and any other relevant information known to FAA, will be
used to determine whether an award to the offeror may create a conflict
of interest. If any such conflict of interest is found to exist, the
Contracting Officer may:

\(1\) disqualify the offeror, or

\(2\) determine that it is otherwise in the best interest of the United
States to contract with the offeror and include appropriate provisions
to mitigate or avoid such conflict in the contract awarded.

\(e\) The refusal to provide the disclosure or representation, or any
additional information required, may result in disqualification of the
offeror for award. If nondisclosure or misrepresentation is discovered
after award, the resulting contract may be terminated. If after award
the Contractor discovers a conflict of interest with respect to the
contract awarded as a result of this solicitation, which could not
reasonably have been known prior to award, an immediate and full
disclosure shall be made in writing to the Contracting Officer. The
disclosure shall include a full description of the conflict, a
description of the action the contractor has taken, or proposes to take,
to avoid or mitigate such conflict. The Contracting Officer may,
however, terminate the contract for convenience if he or she deems that
termination is in the best interest of the Government.

(End of provision)

PRESCRIPTION:

Shall be used in all SIRS, contracts and Broad Agency Announcements for
research and development.

**3.1.7-6** **Disclosure of Certain Employee Relationships** (October
2005)

\(a\) The policy of the FAA is to avoid doing business with contractors,
subcontractors, and consultants who have a conflict of interest or an
appearance of a conflict of interest. The purpose of this policy is to
maintain the highest level of integrity within its workforce and to
ensure that the award of procurement contracts is based upon fairness
and merit.

\(b\) The contractor must provide to the Contracting Officer the
following information with its proposal and must provide an information
update within 30 days of the award of a contract, any subcontract, or
any consultant agreement, or within 30 days of the retention of a
Subject Individual or former FAA employee subject to this clause:

\(1\) The names of all Subject Individuals who:

\(i\) participated in preparation of proposals for award; or

\(ii\) are planned to be used during performance; or

\(iii\) are used during performance; and

\(2\) The names of all former FAA employees, retained by the contractor
who were employed by FAA during the two year period immediately prior to
the date of:

\(i\) the award; or

\(ii\) their retention by the contractor; and

\(3\) The date on which the initial expression of interest in a future
financial arrangement was discussed with the contractor by any former
FAA employee whose name is required to be provided by the contractor
pursuant to subparagraph (2); and

\(4\) The location where any Subject Individual or former FAA employee
whose name is required to be provided by the contractor pursuant to
subparagraphs (1) and (2), are expected to be assigned.

\(c\) \"Subject Individual\" means a current FAA employee\'s father,
mother, son, daughter, brother, sister, uncle, aunt, first cousin,
nephew, niece, husband, wife, father-in-law, mother-in-law, son-in-law,
daughter-in-law, brother-in-law, sister-in-law, stepfather, stepmother,
stepson, stepdaughter, stepbrother, stepsister, half brother, half
sister, spouse of an in-law, or a member of his/her household.

\(d\) The contractor must incorporate this clause into all subcontracts
or consultant agreements awarded under this contract and must further
require that each such subcontractor or consultant incorporate this
clause into all subcontracts or consultant agreements at any tier
awarded under this contract unless the Contracting Officer determines
otherwise.

\(e\) The information as it is submitted, must be certified as being
true and correct. If there is no such information, the certification
must so state.

\(f\) Remedies for nondisclosure: The following are possible remedies
available to the FAA should a contractor misrepresent or refuse to
disclose or misrepresent any information required by this clause:

\(1\) Termination of the contract.

\(2\) Exclusion from subsequent FAA contracts.

\(3\) Other remedial action as may be permitted or provided by law or
regulation or policy or by the terms of the contract.

(End of clause)

PRESCRIPTION:

Shall be used in all support services SIRs and contracts with an
estimated total value of \$10,000 or more, and in all support services
modifications with an estimated total value of \$1,000,000 or more.

**3.1.8-1** **Cancellation, Recission, and Recovery of Funds for Illegal
or Improper Activity** (September 2000)

\(a\) If the Government receives information that a contractor or person
has engaged in conduct constituting a violation of subsection (a), (b),
(c), or (d) of section 27 of the Office of Federal Procurement Policy
Act (41 U.S.C. 423) (the Act), as amended by section 4304 of the
National Defense Authorization Act for Fiscal Year 1996 (Pub. L.
104-106), the Government may-

\(1\) Cancel the screening information request, if the contract has not
been awarded or issued; or

\(2\) Rescind the contract with respect to which-

\(i\) The Contractor or someone acting for the Contractor has been
convicted for an offense where the conduct constitutes a violation of
subsection 27 (a) or (b) of the Act for the purpose of either-

\(A\) Exchanging the information covered by such subsections for
anything of value; or

\(B\) Obtaining or giving anyone a competitive advantage in the award of
an FAA procurement contract; or

\(ii\) The head of the contracting activity has determined, based upon a
preponderance of the evidence, that the Contractor, or someone acting
for the Contractor has engaged in conduct constituting an offense
punishable under subsection 27 (e)(1) of the Act.

\(b\) If the Government rescinds the contract under paragraph (a) of
this clause, the Government is entitled to recover, in addition to any
penalty prescribed by law, the amount expended under the contract.

\(c\) The rights and remedies of the Government specified herein are not
exclusive, and are in addition to any other rights and remedies provided
by law, regulation, or under this contract.

(End of clause)

PRESCRIPTION:

Use in all SIRs and Contracts \$5,000,000 and above

**3.1.8-2** **Price or Fee Adjustment for Illegal or Improper Activity**
(September 2000)

\(a\) The Government, at its election, may reduce the price of a
fixed-price type contract and the total cost and fee under a cost-type
contract by the amount of profit or fee determined as set forth in
paragraph (b) of this clause if the head of the contracting activity or
designee determines that there was a violation of subsection 27 (a),
(b), or (c) of the Office of Federal Procurement Policy Act, as amended
(41 U.S.C. 423), as implemented in the FAA\'s Acquisition Management
System (AMS).

\(b\) The price or fee reduction referred to in paragraph (a) of this
clause shall be-

\(1\) For cost-plus-fixed-fee contracts, the amount of fee specified in
the contract at the time of award;

\(2\) For cost-plus-incentive-fee contracts, the target fee specified in
the contract at the time of award, notwithstanding any minimum fee or
\"fee floor\" specified in the contract;

\(3\) For cost-plus-award-fee contracts-

\(i\) The base fee established in the contract at the time of contract
award;

\(ii\) If no base fee is specified in the contract, 30 percent of the
amount of each award fee otherwise payable to the Contractor for each
award fee evaluation period or at each award fee determination point.

\(4\) For fixed-price-incentive contracts, the Government may-

\(i\) Reduce the contract target price and contract target profit both
by an amount equal to the initial target profit specified in the
contract at the time of contract award; or

\(ii\) If an immediate adjustment to the contract target price and
contract target profit would have a significant adverse impact on the
incentive price revision relationship under the contract, or adversely
affect the contract financing provisions, the contracting officer may
defer such adjustment until establishment of the total final price of
the contract. The total final price established in accordance with the
incentive price revision of the contract shall be reduced by an amount
equal to the initial target profit specified in the contract at the time
of contract award and such reduced price shall be the total final
contract price.

\(5\) For firm-fixed price contracts, by 10 percent of the initial
contract price or a profit amount determined by the Contracting Officer
from records or documents in existence prior to the date of the contract
award.

\(c\) The Government, may, at its election, reduce a prime contractor\'s
price or fee in accordance with the procedures of paragraph (b) of this
clause for violations of the Act by its subcontractors by an amount not
to exceed the amount of profit or fee reflected in the subcontract at
the time the subcontract was first definitively priced.

\(d\) In addition to the remedies in paragraph (a) and (c) of this
clause, the Government may terminate this contract for default. The
rights and remedies of the Government specified herein are not exclusive
and are in addition to any rights and remedies provided by law or under
this contract.

(End of clause)

PRESCRIPTION:

Use in all SIRs and contracts \$5,000,000 and above

**3.2.1.3-1** **Notice of Competitive Sourcing** (October 2003)

\(a\) This screening information request (SIR) is part of a Government
competitive sourcing process to determine whether accomplishing the
specified work under contract or by a Government organization provides
the best value to the Government. If Government performance is
determined to be more economical, then a Letter of Obligation will be
issued to the competing Government organization and a contract will not
be awarded.

\(b\) Cost estimates for performance by the Government of the services
identified in the Performance Work Statement (PWS) in this SIR will be
calculated in accordance with OMB Circular No. A-76 (Revised) and
submitted by designated agency personnel to the Contracting Officer in a
sealed envelope not later than the time set for receipt of cost
submittals from all offerors.

(End of Provision)

PRESCRIPTION:

This provision shall be used in all SIRs issued under OMB Circular A-76
procedures for competition of commercial activities.

**3.2.1.3-2** **Right of First Refusal of Employment** (September 2003)

\(a\) The Contractor shall give Government employees who have been or
will be adversely affected or separated as a result of award of this
contract the right of first refusal for employment openings under the
contract in positions for which they are qualified, if that employment
is consistent with post-Government employment conflict of interest
standards.

\(b\) Within \_\_\_\_ \[insert a numeral from 10 to 90, depending on the
complexity\] days after contract award, the Contracting Officer will
provide to the Contractor a list of all Government employees who have
been or will be adversely affected or separated as a result of award of
this contract.

\(c\) The Contractor shall report to the Contracting Officer the names
of individuals identified on the list who are hired within 90 days after
contract performance begins. This report shall be forwarded within 120
days after contract performance begins.

(End of clause)

PRESCRIPTION:

This clause shall be used in all SIRs and contracts issued under OMB
Circular A-76 procedures for competition of commercial activities.

**3.2.2.3-1** **False Statements in Offers** (July 2004)

The offeror must provide full, accurate, and complete information in
responding to this SIR. 18 U.S.C. 1001 prescribes the penalty for making
false statements in offers.

(End of Provision)

PRESCRIPTION:

The CO must use this provision in all SIRs.

**3.2.2.3-2** **Minimum Offer Acceptance Period** (July 2004)

\(a\) \'Acceptance period,\' as used in this provision, means the number
of calendar days the FAA (we, us) has to award a contract from the date
the SIR specifies for receiving offers.

\(b\) This provision supersedes any language about the acceptance period
appearing elsewhere in this SIR.

\(c\) We require a minimum acceptance period of \_\_\_\_\_ calendar days
\[the CO should insert the number of days\].

\(d\) The offeror (you) may specify a longer acceptance period than the
period shown in paragraph (c). To specify a longer period, fill in the
blank: The offeror allows the following acceptance period: \_\_\_\_\_
calendar days.

\(e\) We may reject an offer allowing less than the FAA\'s minimum
acceptance period.

\(f\) You agree to fulfill your offer completely if the FAA accepts your
offer in writing within:

\(1\) The acceptance period stated in paragraph (c) of this provision;
or

\(2\) Any longer acceptance period stated in paragraph (d) of this
provision.

(End of provision)

PRESCRIPTION:

The CO must use this provision in SIRs that specify a minimum acceptance
period.

Note: The CO must insert data in this provision.

**3.2.2.3-3** **Affiliated Offerors** (July 2004)

\(a\) Business concerns are affiliates of each other when, either
directly or indirectly,

\(1\) One entity controls or has the power to control the other, or

\(2\) A third party controls or has the power to control both.

\(b\) Each offeror (you) must submit an affidavit stating that it has no
affiliates, or containing the following information:

\(1\) The names and addresses of all affiliates.

\(2\) The names and addresses of all persons and concerns that exercise
control or ownership over the offeror and all of your affiliates,
regardless of how they exercise control or ownership.

(End of provision)

PRESCRIPTION:

The CO must use this provision in SIRs if the FAA needs to know
affiliated bidders to prevent practices prejudicial to effective
competition.

**3.2.2.3-4** **Samples** (July 2004)

\(a\) \'Samples\' are item samples the offeror (you) must provide to
show characteristics of your products that cannot be described
adequately (for example, balance, ease of use, or pattern).

\(b\) You must provide samples required elsewhere in this SIR as part of
your offer by the time specified for receiving offers. The FAA may
reject offers that do not provide samples on time (see provision
3.2.2.3-14 - \"Late Submissions, Modifications, and Withdrawals of
Offers\").

\(c\) The Contracting Officer (CO) will evaluate samples to determine if
they comply with all the characteristics listed in this SIR. The CO may
reject offers if they do not provide samples meeting the requirements.

\(d\) Unless otherwise specified in the SIR, you must:

\(1\) Provide samples at no expense to the FAA, and

\(2\) Pay for the samples to be returned if you want them back.

\(e\) The CO may waive the requirement to provide samples; if

\(1\) You provided the same product to us \_\_\_\_\_\_\_\_ \[the CO
should designate the FAA contracting office or an alternate activity or
office that previously received this product\] on a previous
acquisition,

\(2\) The CO determines that your product was accepted or tested and
found to be technically acceptable, conforming in every material respect
with those of this SIR, and

\(3\) You will produce the product offered under this SIR at the same
plant where you produced the previously acquired or tested product.

(End of provision)

PRESCRIPTION:

The CO must use this provision in SIRs that require product samples to
show the characteristics of an offered product.

Note: The CO must insert data in this provision.

**3.2.2.3-5** **Descriptive Literature** (July 2004)

\(a\) \"Descriptive literature\" means information (for example cuts,
illustrations, drawings, and brochures) submitted as part of an offer.
The FAA (we) may need descriptive literature to evaluate details of the
product. These details may be about:

\(1\) Design;

\(2\) Materials;

\(3\) Components;

\(4\) Performance characteristics; or

\(5\) Methods of manufacture, assembly, construction, or operation.

\(b\) Descriptive literature includes only information the FAA needs to
determine that the offeror (you) will provide technically-acceptable
products.

\(c\) The offeror (you) must mark or highlight the items you are
submitting as descriptive literature so we can readily find them in you
offer.

\(d\) The Contracting Officer (CO) may reject offers that fail to submit
descriptive literature on time (see the \"Late Submissions,
Modifications, and Withdrawals of Offers\" provision of this SIR) or in
which the descriptive literature does not show that the product offered
conforms to the SIR requirements.

\(e\) The CO may waive the SIR requirement for descriptive literature if
you indicate in subparagraph (e)(1) below that you supplied a comparable
product under an earlier FAA contract and the CO determines that the
product meets this SIR\'s requirements.

\(1\) You represent that you \[ \] have, \[ \] have not \[check
applicable box\] supplied a product to
us\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[the CO should designate
the contracting office or an alternate activity or office\] under an
earlier FAA contract that is the same as the product offered under this
SIR.

\(2\) If you checked \'have\' in paragraph (e)(1), and seek a waiver of
the requirement for descriptive literature, submit the following
information as part of your offer:

Earlier contract number
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date of earlier contract
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Contract line item number of product supplied
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Name and address of government activity

to which you delivered the product
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date of final delivery of product
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(f\) You must submit offers on the basis of required descriptive
literature or on the basis of a product you supplied previously under
paragraph (e). Once you submit an offer on one of these two bases and
the deadline for us to receive offers has passed, you may not elect to
have your offer considered on the alternative basis. The Government will
disregard your request for a waiver under paragraph (e) above if you
have submitted the descriptive literature this SIR requires.

(End of provision)

PRESCRIPTION:

The CO must use this provision in SIRs that require (1) descriptive
literature to evaluate the technical acceptability of an offered
product; or (2) information that is not readily available unless
offerors submit it.

Note: The CO must insert data in this provision.

**3.2.2.3-6** **Submittals in the English Language** (July 2004)

The FAA will reject offers that are not in English.

(End of provision)

PRESCRIPTION:

The CO must use this provision in SIRs subject to the North America Free
Trade Agreements Implementation Act (NAFTA). The CO may also use this
provision in other SIRs not subject to NAFTA.

**3.2.2.3-7** **Submittals in U.S. Currency** (July 2004)

The FAA will reject proposals that are not in U.S. dollars.

(End of provision)

PRESCRIPTION:

The CO must use this provision in SIRs subject to the North America Free
Trade Agreements Implementation Act (NAFTA). The CO may also use this
provision in other SIRs not subject to NAFTA.

**3.2.2.3-8** **Audit and Records** (July 2004)

\(a\) As used in this clause, \'records\' includes books, documents,
accounting procedures and practices, and other data, regardless of type
and form.

\(b\) Examination of costs. If this is a cost-reimbursement, incentive,
time-and-materials, labor-hour, or price-redeterminable contract, or any
combination of these, the Contractor (you) must maintain, and the
Contracting Officer (CO) must be able to examine and audit, all records
and other evidence that reflect costs you claim or anticipate incurring
directly or indirectly in performing this contract. The CO must be able
to inspect during normal business hours the parts of your plants where
you are performing work under this contract.

\(c\) Cost or pricing data. If you submitted cost or pricing data for
this contract, the CO may examine and audit all of your records,
including computations and projections, to evaluate the accuracy,
completeness, and currency of your cost or pricing data. This includes
information related to\--

\(1\) The proposal for the contract, subcontract, or modification;

\(2\) Communicating about the proposal(s), including negotiating;

\(3\) Pricing the contract, subcontract, or modification; or

\(4\) Performing the contract, subcontract or modification.

\(d\) The Comptroller General of the United States, or an authorized
representative, may examine any of your records involving transactions
related to this contract or any subcontract. This does not mean you or
your subcontractors must create or maintain records other than those you
maintain in the ordinary course of business or required by law.

\(e\) Reports. If you must provide cost, funding, or performance
reports, the CO may examine and audit the supporting records and
materials, to evaluate:

\(1\) The effectiveness of how you produce data for these reports; and

\(2\) The data reported.

\(f\) Availability of Records. You must make records, materials and
other evidence described in paragraphs (a), (b), (c), (d), and (e)
available at your office during normal business hours until 3 years
after final payment under this contract, or for any longer period
required by statute or by other clauses of this contract. We must be
able to examine, audit, or reproduce this information. In addition, you
must make available to us\--

\(1\) The records relating to any contract that is completely or
partially terminated for three years after any final termination
settlement; and

\(2\) Any records relating to appeals under the \"Contract Disputes\"
clause, to litigation, or to the settlement of contract disputes
relating to this contract until any appeals, litigation, or contract
disputes are finally resolved.

\(g\) You must include all the terms of this clause in all subcontracts
under this contract that exceed \$1,000,000, and

\(1\) That are cost-reimbursement, incentive, time-and-materials,
labor-hour, or price-redeterminable or any combination of these;

\(2\) For which the FAA requires cost or pricing data; or

\(3\) That require the subcontractor to provide reports as described in
paragraph (e).

\(h\) Neither party may change this clause except to properly identify
the contracting parties.

(End of clause)

PRESCRIPTION:

The CO must use this clause in contracts that require the contractor to
submit cost or pricing data for the basic award or subsequent
modifications.

Do not use this clause in contracts for:

\(a\) Commercial items or

\(b\) utility services at rates that do not exceed those that apply
uniformly to the general public (including any reasonable connection
charge).

**3.2.2.3-9** **Notice of Possible Standardization** (July 2004)

The Contracting Officer may later determine that the supplies covered by
this SIR will be standardized. If this happens, the FAA may award future
contracts for the same supplies without competition.

(End of provision)

PRESCRIPTION:

The CO should use this provision in SIRs for supplies that subsequently
might be standardized.

**3.2.2.3-10** **Type of Business Organization** (July 2004)

By checking the applicable box, the offeror (you) represents that\--

\(a\) You operate as \[ \] a corporation incorporated under the laws of
the State of \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ , \[ \] an
individual, \[ \] a partnership, \[ \] a nonprofit organization, \[ \] a
joint venture or \[ \] other \_\_\_\_\_\_\_\_\_\_\_\_\[specify what type
of organization\].

\(b\) If you are a foreign entity, you operate as \[ \] an individual,
\[ \] a partnership, \[ \] a nonprofit organization, \[ \] a joint
venture, or \[ \] a corporation, registered for business in
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
.

(country)

(End of provision)

PRESCRIPTION:

The CO should use this provision in all SIRs.

**3.2.2.3-11** **Unnecessarily Elaborate Submittals** (July 2004)

The FAA (we) does not want unnecessarily elaborate brochures or other
presentations beyond those needed to present a complete and effective
offer. We do not want or require elaborate art work, expensive paper and
bindings, and expensive visual and other presentation aids. We may
construe these offers as an indication of the offeror\'s lack of
cost-consciousness.

(End of provision)

PRESCRIPTION:

The CO should use this provision in all SIRs

**3.2.2.3-12** **Amendments to Screening Information Requests** (July
2004)

\(a\) Offerors (you) must acknowledge receiving amendments to this SIR
by the time specified in the SIR for receiving offers by:

\(1\) Signing and returning the amendment, or

\(2\) Identifying the amendment number and date in the space provided on
the form for submitting an offer.

\(b\) You may send FAA your acknowledgement by letter or by an
electronic means if this SIR authorizes electronic offers.

(End of provision)

PRESCRIPTION:

The CO must use this provision in all SIRs.

**3.2.2.3-13** **Submission of Information/Documentation/Offers** (July
2004)

\(a\) The offeror (you) must submit information, documentation, and
offers, including any modifications, in sealed envelopes or packages

\(1\) Addressed to the office specified in the SIR, and

\(2\) Showing the time specified for receipt, the SIR number, and your
name and address.

\(b\) The FAA will consider electronic offers, modifications or
withdrawals only if the SIR authorizes them.

\(c\) You must submit Item samples, if required. This SIR includes
provision 3.2.2.3-4, \"Samples.\"

(End of provision)

PRESCRIPTION:

The CO should use this provision in all SIRs to instruct offerors of
general requirements for submitting offers.

**3.2.2.3-14** **Late Submissions, Modifications, and Withdrawals of
Submittals** (July 2004)

\(a\) The FAA (we) will consider an offers received after the time
specified for receipt only if we receive it before making an award and
\--

\(1\) The offeror (you) sent it by registered or certified mail not
later than the fifth calendar day before the date specified for
receiving offers (for example, you must have mailed an offer by the 15th
in response to a SIR requiring that we receive offers by the 20th);

\(2\) You sent it by mail or, if authorized by the SIR, by telegram and
we determine that we received it late only because of mishandling by the
FAA;

\(3\) You sent it by U.S. Postal Service Express Mail Next Day
Service-Post Office to Addressee, not later than 5:00 p.m. in the time
zone from which you mailed it, two working days before the date
specified for receiving offers. The term \'working days\' excludes
weekends and U.S. Federal holidays;

\(4\) You transmitted it electronically by a method the SIR authorized
and the Contracting Officer (CO) received it by 5:00 p.m. in the CO\'s
office on the date specified for receiving offers; or

\(5\) It is the only offer we received.

\(b\) Any modification you make to your offer for a reason other than
the CO\'s request is subject to subparagraphs (a)(1), (2), and (3).

\(c\) We will not consider a modification resulting from the CO\'s
request received after the time and date specified in the request. The
exception to this is if we received it before we awarded the contract
and we received it late only because we mishandled it;

\(d\) The U.S. or Canadian postmark is the only acceptable evidence of
the date you mailed a late offer or modification sent by registered or
certified mail. The postmark must be on the envelope or wrapper and on
the original receipt from the U.S. or Canadian postal service. Both
postmarks must show a legible date or we will consider the offer to have
been mailed late. \'Postmark\' means a printed, stamped, or otherwise
placed impression (exclusive of a postage meter machine impression) that
is readily identifiable without further action as having been applied by
the postal service on the date of mailing. Therefore, you should ask the
postal clerk to place a legible hand cancellation bull\'s eye postmark
on both the receipt and the envelope or wrapper.

\(e\) Our time and date stamp on the wrapper or other documentary
evidence of receipt are the only acceptable evidence of when we received
it.

\(f\) The date the post office receiving clerk enters is the only
acceptable evidence of the date you mailed a late offer, modification,
or withdrawal sent by Express Mail Next Day Service. The postmark must
be on the envelope or wrapper and on the original receipt from the
postal service. \'Postmark\' has the same meaning as in paragraph (d),
excluding Canadian postmarks. Therefore, you should ask the postal clerk
to place a legible hand cancellation bull\'s eye postmark on both the
receipt and the envelope or wrapper.

\(g\) Despite paragraph (a), we will consider a late modification of an
otherwise acceptable offer if the modification makes the offer\'s terms
more favorable to the FAA.

\(h\) You may withdraw your offer by written notice or by any other
means specified in this SIR for submitting offers. If the SIR allows
electronic offers, this provision is subject to the conditions specified
in provision 3.2.2.3-20, \_Electronic Offers.\' You may withdraw offers
in person either directly or through an authorized representative
identified to FAA through the procedures in provision 3.2.2.3-77,
\"Authorizing Agents.\" We must receive any withdrawal before we award
the contract.

(End of provision)

PRESCRIPTION:

The CO must use this provision in all SIRs issued in the U.S. and Canada
in which the FAA needs the offers at precise times and dates.

**3.2.2.3-15** **Authorized Negotiators** (July 2004)

The offeror states that the following persons are authorized to
negotiate on your behalf with the FAA in connection with this offer:

Name:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Title:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Phone number:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(End of provision)

PRESCRIPTION:

The CO must use this provision in all SIRs.

**3.2.2.3-16** **Restricting, Disclosing and Using Data** (July 2004)

If the offeror (you) includes data in your offer that you do not want to
be disclosed to the public or for the FAA to use except for evaluation
purposes\-\-\-\--

\(a\) Mark the title page with the following legend:

This offer includes data that must not be (1) disclosed outside the FAA
and (2) duplicated, used, or disclosed -in whole or in part- for any
purpose other than to evaluate this offer.

\(b\) Contracts awarded as a result of this SIR are subject to the
disclosure requirements specified in this contract. This restriction
does not limit our right to use information from another source that may
be contained in your offer.

\(c\) Use the following space to identify the pages containing the
restricted data:

Numbers or other identification of pages:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(d\) Mark each page you want to restrict with the following legend:
\'Using or disclosing data contained on this page is subject to the
restriction on the title page of this offer.\'

(End of provision)

PRESCRIPTION:

The CO must use this provision in all SIRs

**3.2.2.3-17** **Preparing Offers** (July 2004)

\(a\) The offeror (you) should examine any drawings, specifications,
schedule, and instructions. Failure to do so will be at your own risk.

\(b\) You must provide the information the SIR requires. Print or type
your name and sign the offer. The person signing the offer must initial
erasures or other changes. If an agent signs your offer, include
evidence of the agent\'s authority unless you previously gave that
evidence to the issuing office.

\(c\) For each item offered:

\(1\) Show the unit price or cost, including, unless otherwise
specified, packaging, packing, and preservation; and

\(2\) Enter the extended price or cost for the quantity of each item
offered in the \'Amount\' column of the Schedule. If there is a
discrepancy between a unit price or cost and an extended price or cost,
the FAA (we) will assume the unit price or cost is correct, subject to
your correction to the same extent and in the same manner as any other
mistake.

\(d\) We will not consider offers for supplies or services other than
those specified unless the SIR authorizes it.

(End of provision)

PRESCRIPTION:

The CO should use this provision in all SIRs.

**3.2.2.3-18** **Prospective Offeror\'s Requests for Explanations**
(July 2004)

If the offeror (you) wants the FAA (we, our) to explain or interpret the
SIR, drawings, specifications, or other information, request it early
enough to allow us to send our response to all prospective offerors
before they submit their offers. Oral explanations or instructions we
give before contract award will be binding only if we confirm them in
writing. We will promptly provide any information we give you about a
SIR to all other prospective offerors as a SIR amendment if the lack of
that information would be prejudicial to any other offerors.

(End of provision)

PRESCRIPTION:

The CO should use this provision in all SIRs.

**3.2.2.3-19** **Contract Award** (July 2004)

\(a\) The FAA (we, us, our) will award a contract resulting from this
SIR to the responsible offeror whose offer conforms to the SIR and will,
as determined by the source selection official, be the best value to us,
considering the technical quality, cost or price, and other SIR
criteria.

\(b\) We may:

\(1\) Reject any offer if it is in our best interest to do so,

\(2\) Accept other than the lowest cost/price offer, and

\(3\) Waive minor irregularities in offers received.

\(c\) We will evaluate offers and award a contract on your initial
offer, without communicating with you, or on subsequent offers after
communicating with you. In evaluating the offers, we may communicate
with any offeror, and may eliminate some firms, limiting offerors
participating in the competition to only those most likely to receive a
contract award. You should submit your best terms from a cost or price
and technical standpoint in your initial offer..

\(d\) We may accept any item or group of items in an offer, unless you
qualify the offer by specific limits. Unless otherwise provided in the
SIR, you may submit offers for quantities less than those specified. We
reserve the right to make an award on any item for a quantity less than
the quantity offered, at the unit cost or prices offered, unless you
specify otherwise in the offer.

\(e\) Our award of a contract or acceptance of an offer in writing
within the time for acceptance specified in the offer creates a binding
contract. Before the offer\'s specified expiration time, we may accept
an offer (or part of an offer, as provided in paragraph (d)), whether or
not we communicate with you, unless we get a written notice of
withdrawal from you before contract award. Communication between the
parties after we receive your offer does not constitute a rejection or
counteroffer by us.

\(f\) If the prices you propose are materially unbalanced between line
items or subline items, we may determine that your offer is
unacceptable. An offer is materially unbalanced when it is based on
prices significantly less than cost for some work and greater than cost
for other work. We may reject unbalanced offers if there is a reasonable
doubt that the offer will result in the lowest overall cost to the FAA,
even though it may be the low evaluated offer, or if it is so unbalanced
as to be tantamount to allowing an advance payment.

\(g\) We may disclose the following information in post-award
debriefings to you:

\(1\) The source selection official\'s decision;

\(2\) Your evaluated standings relative to the successful offeror(s);
and

\(3\) A summary of your evaluation findings.

(End of provision)

PRESCRIPTION:

The CO must use this provision in all SIRs.

**3.2.2.3-20** **Electronic Offers** (July 2004)

\(a\) The offeror (you) may submit responses to this SIR by the
following electronic means
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\[CO should insert
acceptable means \_ fax, e-mail, telegraph, e-commerce, and so on\]..
Your offer must arrive at the place and by the time specified in the
SIR.

\(b\) Electronic offers must refer to this SIR and include, as
applicable, the item or sub-items, quantities, unit prices, time and
place of delivery, all representations and other information required
and a statement specifying the extent of your agreement with all the
FAA\'s (we) terms, conditions, and provisions..

\(c\) We may decline to consider electronic offers that do not include
required information, or that reject any of the terms, conditions and
provisions of the SIR.

\(d\) We reserve the right to make award solely on the electronic offer.
However, if the CO requests, you must promptly submit the complete
original (hard copy) signed proposal.

\(e\) Send your offer electronically to
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[CO should insert fax
number, e-mail address, other offer information\].

\(f\) If you chose to sent your offer electronically, we will not be
responsible for any failure attributable to transmitting or receiving
the offer.

(End of provision)

PRESCRIPTION:

The CO should use this provision in all SIRs.

Note: The CO must insert data in this provision.

**3.2.2.3-21** **RESERVED** (July 2004)

.

PRESCRIPTION:

.

**3.2.2.3-22** **Period for Acceptance of Offer** (July 2004)

The offeror (you) agrees that if this offer is accepted within
\_\_\_\_\_\_\_\_ calendar days (60 calendar days unless you insert a
different period) from the date the SIR specifies for receiving offers,
to provide all items for which you offer prices at the price set
opposite each item, delivered at the designated point(s), within the
time specified in the Schedule.

(End of provision)

PRESCRIPTION:

The CO must use this provision in all SIRs not issued on an SF 33 or SF
1447, except when the FAA specifies a minimum acceptance period.

**3.2.2.3-23** **Place of Performance** (July 2004)

\(a\) The offeror (you), in fulfilling any contract resulting from this
SIR, \[ \] intends, \[ \] does not intend (check applicable block) to
use one or more plants or facilities located at a different address from
your address as stated in this offer.

\(b\) If you check \'intends\' in paragraph (a) above, insert the
following information:

Place of Performance Street:

City:

State:

Zip Code:

Name of owner and operator, if other than the owner

(End of provision)

PRESCRIPTION:

The CO must use this provision in all SIRs, except those in which FAA
specifies the place of performance.

**3.2.2.3-24** **Changes or Additions to Make-or-Buy Program** (July
2004)

\(a\) The Contractor (you) must follow the make-or-buy program in this
contract. If you propose to change the program, including changing where
you perform any activities or make any items for which you are using
your own facilities, you must, reasonably in advance of the proposed
change:

\(1\) Notify the Contracting Officer (CO) in writing and

\(2\) Justify it in sufficient detail for the CO to evaluate it.

\(b\) When the contract allows items to be added after award, you must,
at the earliest possible time:

\(1\) Notify the CO of each proposed addition, and

\(2\) Justify it in sufficient detail for the CO to evaluate it.

\(c\) Modifications of the make-or-buy program will be effective when
you get the CO\'s written approval.

(End of clause)

PRESCRIPTION:

The CO should use this clause in contracts when we intend to include a
make-or-buy program.

**3.2.2.3-25** **Reducing the Price of a Contract or Modification for
Defective Cost or Pricing Data** (July 2004)

\(a\) For purposes of this clause, an actual subcontract is a
subcontract the Contractor (you) awards; a prospective subcontract is
one that you considered but did not award; and any subcontract includes
both.

\(b\) If after contract award you increased the negotiated price of the
contract, including the profit or fee, and later discover the increase
was based on \"defective data,\" you must reduce the price or cost of
this contract or a contract modification (contract) accordingly.
\"Defective data\" includes the following:

\(1\) You or your actual subcontractors submitted certificates of
current cost or pricing data (CCCPD) that included incomplete,
inaccurate or outdated pricing data;

\(2\) You certified incomplete, inaccurate or outdated data from
prospective subcontractors in your CCCPD; or

\(3\) You, your actual subcontractors, or prospective subcontractors
provided any data that were incomplete, inaccurate, or outdated.

\(c\) You must reduce the price of this contract by an amount equal to
the increase in the negotiated price cited in (b).

\(d\) When you reduce your contract price because of a prospective
subcontractor\'s defective data that had no affect on the actual
subcontract price, you may limit your reduction to the amount of your or
your subcontractor\'s actual cost decrease from the prospective
subcontractor\'s cost estimate. You must also include applicable
overhead and profit markup in the reduction.

\(e\) You may not use the following to defend against a price reduction:

\(i\) The price of the contract would not have been reduced even if you
had submitted accurate, complete, and current cost or pricing data
because you or your subcontractor was a sole source supplier, or was in
an otherwise superior bargaining position;

\(ii\) The Contracting Officer (CO) should have known that the cost or
pricing data at issue were defective even though you or any
subcontractor did not bring the defective data to the CO\'s attention.

\(iii\) The contract was based on an agreement about the total cost of
the contract and there was no agreement about the cost of each item
procured under the contract.

\(iv\) You or any subcontractor did not submit CCCPD.

\(f\) You may request an offset to the contract price reduction if you
certify that you are entitled to the offset to the best of your
knowledge and belief, and you prove that, while you had the cost or
pricing data before the date of agreement on the contract price,(or
price of the modification), your unintentionally failed to give that
data to the CO. The CO may consider facts you submit to support the
offset.

\(g\) You may not have an offset when:

\(1\) You knew that the data were understated when you signed the CCCPD;
or

\(2\) The FAA (we, us) proves that the contract price would not have
increased in the amount to be offset if you submitted correct data
before the date of contract price agreement.

\(h\) You must repay us any overpayment we gave you before you reduced
the contract price under this clause, including the following:

\(1\) Simple interest (prescribed by the Secretary of the Treasury under
26 U.S.C. 6621(a)(2) for that quarter) on the overpayment computed from
the date(s) of overpayment to the date you repay us; and

\(2\) A penalty that equals the amount of the overpayment if you or any
subcontractor knowingly submitted cost or pricing data which were
incomplete, inaccurate, or out of date.

(End of clause)

PRESCRIPTION:

The CO must use this clause in contracts when the government requires
the contractor or subcontractor to submit cost or price data.

**3.2.2.3-26** **RESERVED** (July 2004)

.

PRESCRIPTION:

.

**3.2.2.3-27** **Subcontractor Cost or Pricing Data** (July 2004)

\(a\) If the Contractor (you) intends to award a contract or to modify a
subcontract with a value exceeding \$1,000,000, you must require the
subcontractor to submit cost or pricing data by the date of agreement or
the date of award, whichever is later. You do not have to do this if the
award is based on price competition, catalog or market price, or prices
set by law or regulation.

\(b\) You must require the subcontractor to certify that, to the best of
the contractor\'s knowledge and belief, the data submitted under
paragraph (a) are accurate, complete, and current as of the date of
agreement on the negotiated price of the subcontract or subcontract
modification.

\(c\) When entering into a subcontract that exceeds \$1,000,000, you
must insert the substance of this clause, including this paragraph (c),
if paragraph (a) requires submitting cost or pricing data for the
subcontract.

(End of clause)

PRESCRIPTION:

The CO must use this clause in all contracts that include AMS clause
3.2.2.3-25.

**3.2.2.3-28** **RESERVED** (July 2004)

.

PRESCRIPTION:

.

**3.2.2.3-29** **Integrity of Unit Prices** (July 2004)

\(a\) If the offeror (you) want to negotiate prices for items, you must
distribute costs so prices are proportionate to the items\' base cost
(for example, manufacturing or acquisition costs). Do not distort unit
prices in distributing costs to line items. For example, distribute
costs equally among line items only if there is little or no variation
in base cost. You do not need to submit cost or pricing data not
otherwise required by law or regulation.

\(b\) The requirement in paragraph (a) does not apply to:

\(1\) Any contract or subcontract item of supply for which the unit
price is, or is based on, an established catalog or market price for a
commercial item sold in substantial quantities to the general public. A
price is based on an established catalog or market price only if the
item being purchased is sufficiently similar to the catalog or market
price commercial item to ensure that any difference in prices can be
identified and justified without resort to cost analysis; or

\(2\) An item qualifying for a commercial item exception to cost or
pricing data.

\(c\) You must also identify those supplies you will not manufacture or
to which you will not contribute significant value when the Contracting
Officer (CO) requests this information. The FAA will not require this
information for commercial items sold in substantial quantities to the
general public when the price is, or is based on, established catalog or
market prices.

\(d\) You must insert the substance of this clause, except paragraph
(c), in all subcontracts.

(End of provision)

PRESCRIPTION:

May be used in all SIR\'s and contracts except: (a) construction or
architect-engineer services, (b) utility services contracts where
supplies are not required, (c) contracts for petroleum products, and (d)
service contracts where supplies are not required..

**3.2.2.3-30** **Termination of Defined Benefit Pension Plans** (July
2004)

The Contractor (you) must promptly notify the Contracting Officer (CO)
in writing when you decide to terminate a defined benefit pension plan
or otherwise recapture pension fund assets. If pension fund assets
revert to you or are constructively received by you under a termination
or otherwise, you must refund or give a credit to the FAA for its
equitable share. You must include the substance of this clause in all
subcontracts under this contract requiring cost and price data and with
a value exceeding \$1,000,000.

(End of clause)

PRESCRIPTION:

The CO must use this clause in all contracts when the government
requires certified cost and pricing data or when any preaward or
postaward cost determinations will be subject to FAA cost principles.

**3.2.2.3-31** **Facilities Capital Cost of Money** (July 2004)

\(a\) You (the offeror) may consider facilities capital cost of money as
an allowable cost under the contemplated contract only if you propose
facilities capital cost of money in your offer.

\(b\) If you do not propose this cost, you waive facilities capital cost
of money as an allowable cost.

(End of provision)

PRESCRIPTION:

The CO must use this provision in SIRs for contracts subject to the FAA
cost principles for commercial organizations.

**3.2.2.3-32** **Waiving Facilities Capital Cost of Money** (July 2004)

Facilities capital cost of money is not an allowable cost under this
contract.

(End of clause)

PRESCRIPTION:

The CO must use this clause in contracts when the offeror did not
propose facilities capital cost of money in its offer.

**3.2.2.3-33** **Order of Precedence** (July 2004)

The order of precedence is:

\(a\) The Schedule (excluding the specifications);

\(b\) Representations;

\(c\) Contract clauses;

\(d\) Other documents, exhibits, and attachments;

\(e\) The specifications; and

\(f\) The drawings.

(End of clause or provision)

PRESCRIPTION:

The CO should use this as a clause or as a provision. You must use it
for all negotiated contracts that use the uniform contract format.

\*\*Note to CO: Using this clause with Clause 3.2.2.3-60,
Specifications, Drawings and Material Offers, may create a conflict. To
avoid this, ensure that the drawings are listed in the contract as
attachments to the specifications and not separately as \"other
documents, exhibits, and attachments\". Listing them as attachments
clarifies that the specification takes precedence over the drawings.

**3.2.2.3-34** **Evaluating Offers for Multiple Awards** (July 2004)

In addition to other factors, the FAA (we, us) will evaluate offers on
the basis of advantages and disadvantages to us that might result from
making more than one award (multiple awards). We estimate that our
administrative cost for issuing and administering each contract awarded
under this SIR is \$500. We will make individual awards for the items or
combinations of items that result in the lowest aggregate cost to us,
including the assumed administrative costs.

(End of provision)

PRESCRIPTION:

The CO should use this provision in SIRs when FAA may make multiple
awards.

**3.2.2.3-35** **Annual Representations and Certifications** (July 2004)

The offeror certifies that annual representations and certifications
(check the appropriate block):

\[ \] (a) Dated \_\_\_\_\_\_\_\_\_\_ (insert date of signature on offer)
which are incorporated by reference, have been submitted to the
contracting office issuing this SIR and that the information is current,
accurate, and complete as of the date of this offer, except as follows
(insert changes that affect only this SIR; if \'none,\' say so):

\[ \] (b) Are enclosed.

(End of provision)

PRESCRIPTION:

The CO should use this provision in SIRs that use annual representations
and certifications.

**3.2.2.3-36** **Reversing or Adjusting Plans for Postretirement
Benefits Other Than Pensions (PRB)** (July 2004)

The Contractor (you) must promptly notify the Contracting Officer (CO)
in writing when you plan to terminate or reduce a PRB plan. If PRB fund
assets revert to you or are constructively received by you under a plan
termination or otherwise, you must refund or credit the FAA (we, our)
for our equitable share. You must include the substance of this clause
in all subcontracts under this contract which exceed \$1,000,000 in
value and for which we require cost and price data. The CO will
determine and apply the resulting adjustment to earlier years\' PRB
costs.

(End of clause)

PRESCRIPTION:

The CO should use this clause in all contracts when FAA may require
certified cost and pricing data.

**3.2.2.3-37** **Notification of Ownership Changes** (July 2004)

\(a\) The Contractor (you) must notify FAA in writing within 30 days
when you become aware that a change in ownership has occurred or will
occur and that the change could affect the value of your capitalized
assets in the accounting records, asset valuations, or cause any other
cost changes.

\(b\) You must:

\(1\) Maintain current, accurate, and complete inventory records of
assets and their costs;

\(2\) Provide the Contracting Officer (CO) access to the records on
request;

\(3\) Ensure that all individual and grouped assets, their capitalized
values, accumulated depreciation or amortization, and remaining useful
lives are identified accurately before and after each of your ownership
changes; and

\(4\) Retain and maintain depreciation and amortization schedules based
on the asset records maintained before each ownership change.

\(c\) You must include the substance of this clause in all subcontracts
under this contract with a value exceeding \$1,000,000 and that require
cost and price data.

(End of clause)

PRESCRIPTION:

The CO must use this clause in all contracts that require certified cost
and pricing data.

**3.2.2.3-38** **Requirements for Cost or Pricing Data or Other
Information** (July 2004)

Offerors (you) may submit certificates of current cost or pricing data
(CCCPD) or you may request an exception to this requirement. Depending
on the option you use, you must submit either the CCCPD shown in
paragraph (e) of clause 3.2.2.3-39, \"Requirements for Cost or Pricing
Data or Information - Modifications\" (the clause) or request an
exception consistent with the information in the clause. Any information
in the clause regarding the CCCPD or the exception that is relevant to
an offer is incorporated into this provision.

(End of provision)

PRESCRIPTION:

The CO should include this provision when the FAA requires cost or
pricing information other than cost and pricing data.

**3.2.2.3-38/alt1** **Requirements for Cost or Pricing Data or Other
Information Alternate I** (July 2004)

\(c\) Submit the cost proposal electronically by \[Contracting Officer
(CO) to insert media format, for example electronic spreadsheet format,
electronic mail, etc.\].

(End of provision)

PRESCRIPTION:

The CO must add this paragraph to 3.2.2.3-38 when the SIR allows
offerors to submit cost proposals by electronic media.

Note: The CO must insert data in this provision.

**3.2.2.3-38/alt2** **Requirements for Cost or Pricing Data or Other
Information Alternate II** (July 2004)

\(a\) The FAA does not require cost or pricing data.

\(b\) The offeror must provide the following information:

1.\_\_\[Contracting Officer (CO) insert requirements\]\*\_

2.\_\_\_\_\_\_\_\_\_\_\"\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

3.\_\_\_\_\_\_\_\_\_\_\"\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

4.\_\_\_\_\_\_\_\_\_\_\"\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[CO should describe the information and format required for this
provision.

(End of provision)

PRESCRIPTION:

The CO should substitute this provision for the basic provision when FAA
requires information other than cost or pricing data.

Note: The CO must insert data in this provision.

**3.2.2.3-39** **Requirements for Cost or Pricing Data or Other
Information \--Modifications** (July 2004)

\(a\) When there are price adjustments in the contract, the Contractor
(you, your) must submit the following:

\(1\) A certificate of current cost or pricing data (CCCPD) described in
paragraph (e), or

\(2\) For information other than current cost or pricing data (CPD), a
request for an exception to CCCPD. You must request this exception from
the CO in writing with the following types of information or data that
would establish the reasonableness of the prices you offer:

\(i\) Information on an exception you received on earlier or repetitive
acquisitions;

\(ii\) Catalog price information including:

\(A\) A dated catalog with the prices;

\(B\) The applicable catalog pages; or

\(C\) A statement that the catalog is on file in the contracts office
that will issue this contract modification;

\(iii\) Information on the current discount policies and price lists
(published or unpublished), for example wholesale, original equipment
manufacturer, and reseller;

\(iv\) Evidence of substantial sales to the general public for catalog
items that exceed \[Contracting Officer (CO) to insert extended value -
not unit price\]. Your evidence may consist of verifiable records such
as a sales order, contract, shipment, invoice, actual recorded sales; or
sales by your affiliates, other manufacturers or vendors when your price
proposal is based on sales of essentially the same commercial item. You
must also explain the relationship of the offered price to the (1)
established catalog price, or (2) the price of recent and substantial
sales of similar quantities of the items that were sold to the general
public at prices that differ from catalog or list prices;

\(v\) The basis for the market price including:

\(A\) The source, date or period of the market quotation;

\(B\) Any other basis for the market price, the base amount, and
applicable discounts;

(C). The nature of the market for the supply or service you are offering
(should be the same as or similar to the market price supply or
service); or

\(D\) Data supporting substantial sales to the general public.

\(vi\) Laws or regulations that establish your offered prices. If the
price is controlled under law by periodic rulings, reviews, or similar
actions of a governmental body, attach a copy of a controlling document
that you did not previously submit to the contracting office;

\(vii\) Information on modifications of contracts or subcontracts for
commercial items that relate to the offered price, as follows:

\(A\) If you received an exception based on adequate price competition,
catalog or market prices of commercial items, or prices set by law or
regulation under the original contract or subcontract, and this
modification is not covered by these exceptions, you must provide
information to establish that the modification would not change the
contract or subcontract from one for a commercial item to one for a
non-commercial item;

\(B\) For commercial items, you may provide information on selling
prices of the same item or similar items in the commercial market; and

\(viii\) Any other information the CO requests to support your request
for an exception or to conclude that your price is fair and reasonable.

\(b\) You give the CO the right to examine books, records, documents, or
other directly pertinent records to verify your request for an exception
under this clause or the reasonableness of price at any time before
award.

\(c\) The CO will not require you to provide access to cost or price
information or other data that apply to prices offered in the catalog or
marketplace.

\(d\) Submitting information to qualify for an exception does not mean
that this is the only exception that may apply.

\(e\) You must submit under paragraph (a):

CERTIFICATE OF CURRENT COST OR PRICING DATA

I certify that, to the best of my knowledge and belief, the cost or
pricing data we submit, either actually or by specific identification in
writing, to the Contracting Officer or to the Contracting Officer\'s
representative to support \[\*\] are accurate, complete, and current as
of \[\*\*\]. This certification includes the cost or pricing data
supporting any advance agreements and forward pricing rate agreements
between the us and the Government that are part of the proposal.

\[Contractor insert the following information.\]

Firm
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Signature
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Name
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Title
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date of execution
\[\*\*\*\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\]

\*Contractor identify the proposal, request for price adjustment, or
other submission involved, giving the appropriate identifying number
(for example, SIR No.)

\*\* Contractor insert the day, month, and year when price negotiations
were concluded and price agreement was reached or, if applicable, an
earlier date agreed upon between the parties that is as close as
practicable to the date of a price agreement.

\*\*\* Contractor insert the day, month, and year of signing, which
should be as close as practicable to the date when the price
negotiations were concluded and the parties agreed on the contract
price.

(End of certificate)

(End of clause)

PRESCRIPTION:

The CO should use this clause in a contract that requires either cost or
pricing data or an exception to cost and pricing data.

Note: The CO must insert data in this clause.

**3.2.2.3-40** **Precontract Costs** (July 2004)

Precontract costs are costs the Offeror (you) incur before the
contract\'s effective date under a negotiated agreement that anticipates
contract award. The FAA will pay for precontract costs if:

\(a\) You are awarded the contract;

\(b\) You must incur these costs to comply with the proposed contract
delivery schedule;

\(c\) The delivery schedule is non-negotiable; and

\(d\) The costs would be allowable if they were incurred after contract
award and the Contracting Officer (CO) has expressly authorized the
payments in writing.

(End of provision)

PRESCRIPTION:

The CO must use this provision in SIRS when FAA may negotiate an
agreement that allows the offeror to incur costs before contract award.

**3.2.2.3-41** **Performing Work** (July 2004)

The Contractor (you) must perform, using your own organization, work
equivalent to at least \_\_\_\_\_ percent \[Contracting Officer (CO)
insert percent\] of the total amount of work under the contract on the
site. The CO may modify this contract to reduce this percentage if you
request a reduction and the CO determines that it would be to the
Government\'s advantage to do so.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price construction contracts.

Note: The CO must insert data in this clause.

**3.2.2.3-42** **Differing Site Conditions** (July 2004)

\(a\) Before the conditions are disturbed, the Contractor (you) must
promptly notify the Contractor Officer (CO) in writing of either or both
of the following conditions:

\(1\) Subsurface or latent physical conditions at the site which differ
materially from those described in this contract.

\(2\) Unknown physical conditions at the site, of an unusual nature,
which differ materially from those ordinarily encountered and generally
recognized as inherent to the type of work the contract covers.

\(b\) FAA (we) will investigate the site conditions promptly after
receiving the notice. If the CO determines that the conditions do
materially differ and cause an increase or decrease in your cost of, or
the time required for, performing any part of the work under this
contract, the CO will make an equitable adjustment under this clause and
modify the contract accordingly in writing.

\(c\) The CO will not accept your request for an equitable adjustment to
the contract unless you give the written notice. However, the CO may
extend the time for giving written notice.

\(d\) The CO will not accept your request for an equitable adjustment
for differing site conditions after we make final payment under this
contract.

(End of clause)

PRESCRIPTION:

The CO should use this clause in a fixed price construction contract or
a fixed price dismantling, demolition or removal of improvements
contract.

**3.2.2.3-43** **Site Investigation and Conditions Affecting the Work**
(July 2004)

\(a\) The Contractor (you) acknowledges that you have taken reasonable
steps to determine the nature and location of the work, and you have
investigated and are satisfied about the general and local conditions
which can affect the work or its cost, including but not limited to:

\(1\) Conditions bearing upon transportation, disposal, handling, and
storage of materials;

\(2\) The availability of labor, water, electric power, and roads;

\(3\) Uncertainties of weather, river stages, tides, or similar physical
conditions at the site;

\(4\) The conformation and conditions of the ground; and

\(5\) The character of equipment and facilities needed before and during
the work.

You also acknowledge that you are satisfied as to the character,
quality, and quantity of surface and subsurface materials or obstacles
you might find, to the extent you can, from an inspection of the site,
including all exploratory work done by FAA (we, us), as well as from the
drawings and specifications that are a part of this contract. If you do
not take the actions described and acknowledged in this paragraph, you
will still be responsible for properly estimating the difficulty and
cost of successfully performing the work, and for proceeding to
successfully perform the work without additional expense to us.

\(b\) We are not responsible for your conclusions or interpretations of
information we provided before contract award. We are not responsible
for your understanding of conditions you get from any of our officers or
agents before contract award. You can rely on representations we make
about conditions that we put into the contract.

(End of clause)

PRESCRIPTION:

The CO should use this clause in a fixed price construction contract or
a fixed price dismantling, demolition or removal of improvements
contract.

**3.2.2.3-44** **Physical Data** (July 2004)

Data and information the FAA (we, us) provides or refers to below is for
the Contractor\'s (your) information. We are not responsible for your
interpretation of or conclusions based on the data or information.
Further, we do not warrant construction methodology which may be
included in these documents.

\(a\) The descriptions of physical conditions on the drawings and in the
specifications are the result of site investigations by
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[CO insert a description of
investigation methods used, such as surveys, auger borings, core
borings, test pits, probings, test tunnels\].

\(b\) Other relevant information
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[CO insert other
pertinent information such as weather and transportation\].

(End of clause)

PRESCRIPTION:

The CO must use this clause in fixed price construction contracts when
the FAA provides physical data (such as test boring, hydrographic data,
weather conditions data) to offerors.

Note: The CO must insert data in this clause.

**3.2.2.3-45** **Material and Workmanship** (July 2004)

\(a\) The Contractor (you) must incorporate equipment, material, and
articles that are new and of the most suitable grade for the purpose
intended to do the work this contract covers, unless the contract
provides otherwise. The FAA (we) encourages you to use recycled
materials to manufacture the products. If the contract specifies
equipment, material, or articles by trade name, make, or catalog number,
you must use those specific items. We will not accept equivalent items
unless the specification authorizes it.

\(b\) You must perform all work under this contract in a skillful and
workmanlike manner. The Contracting Officer (CO) may require, in
writing, that you remove employees whom the CO determines are
incompetent, careless, or otherwise objectionable.

(End of clause)

PRESCRIPTION:

The CO must use this clause in construction contracts.

**3.2.2.3-46** **Supervising the Contract Work** (July 2004)

At all times while the Contractor (you) performs this contract, and
until you complete the work and FAA accepts it, you must directly
supervise the work or assign and have on the worksite a competent
supervisor who the Contracting Officer (CO) is satisfied with and who
has authority to act for you.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price construction contracts or
fixed price dismantling, demolition or removal of improvements
contracts.

**3.2.2.3-47** **Permits and Responsibilities** (July 2004)

The Contractor (you) must get any necessary licenses and permits, and
comply with any Federal, state, and municipal laws, codes, and
regulations applicable to the work, at no additional expense to FAA
(we). You are also responsible for all damages to persons or property
that happen due to your fault or negligence, and you must take proper
safety and health precautions to protect the work, the workers, the
public, and the property of others. You are also responsible for all
materials delivered and work performed until you complete and we accept
the entire work, except for any completed unit of work that may have
already been accepted under the contract.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price or cost reimbursement
construction contracts, or fixed price dismantling, demolition or
removal of improvements contracts.

**3.2.2.3-48** **Other Contracts** (July 2004)

FAA (we, our) may undertake or award other contracts for additional
work, or may use in-house construction resources that are at or near the
work site. The Contractor (you) must cooperate fully with those other
contractors and with our employees, and carefully adapt scheduling the
work under this contract to accommodate simultaneous work, following any
direction from the Contracting Officer (CO). You must not commit or
permit any act that will interfere with the work of any other
contractors or FAA employees.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price construction contracts or
fixed price dismantling, demolition or removal of improvements contracts
where there may be other work activities at the work site during the
term of this contract.

**3.2.2.3-49** **Protecting of Existing Vegetation, Structures,
Equipment, Utilities, and Improvements** (July 2004)

\(a\) The Contractor (you) must preserve and protect all structures,
equipment, and vegetation (such as trees, shrubs, and grass) on or
adjacent to the work site that are not to be removed and which do not
unreasonably interfere with the work required under this contract. You
must remove trees only when specifically authorized to do so, and must
avoid damaging vegetation that will remain in place. If any tree limbs
or branches break while you work, you must trim those limbs or branches
with a clean cut.

\(b\) You must protect from damage all existing improvements and
utilities at or near the work site and on a third party\'s adjacent
property, if you are or should be aware of them. You must repair any
damage to those facilities, including those that are a third party\'s
property, resulting from your failure to comply with the contract
requirements or to exercise reasonable care in performing the work. If
you fail or refuse to repair the damage promptly, the Contracting
Officer (CO) may have another vendor perform the work and charge you for
it.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price construction contracts or
fixed price dismantling, demolition or removal of improvements
contracts.

**3.2.2.3-50** **Property Protection** (July 2004)

\(a\) The Contractor (you) must construct and maintain any temporary
fences, gates and other facilities needed to preserve crops, control
livestock, and protect property. Before cutting a fence, you must take
necessary precautions to prevent livestock from straying. You must also
prevent loss of tension in or damage to adjacent portions of the fence.
You must immediately replace all fencing and gates you cut, remove,
damage, or destroy with new materials to the original standard. You may
reuse undamaged gates.

\(b\) You must comply with the property owner\'s requests to leave gates
open or closed.

\(c\) You must use all necessary precautions to avoid destroying
surveying markers such as section corners, witness trees, property
corners, mining claim markers, bench markers, triangulation stations,
and the like. If you must destroy any marker, you must first notify the
agency responsible for the marker, as well as the Contracting Officer\'s
(CO) technical representative, and replace the markers.

\(d\) You must use care to prevent unnecessary damage to property in or
near the work area caused by your work. Unnecessary damage is that which
you can avoid through efficient and careful performance of the work,
taking into account the land rights you have. If you damage any
property, you must at once notify the owner or custodian and make or
arrange to make prompt and full restitution.

\(e\) Maps and specifications FAA (we, us) provides may not give the
location of all water supply, drainage, irrigation, and other
underground facilities. Before entering a tract of land for contract
purposes, you must find out from the property owner (or other reasonably
available source) the location of any irrigation system, domestic water
system, source of water, and drainage system existing on the property,
whether serving that property or other property. You must avoid damaging
or obstructing these facilities or polluting water supplies.

\(f\) You must hold us harmless from any and all suits, actions, and
claims for damages, including environmental impairment, to property
arising from any of your acts or omissions, your subcontractors, or any
of your employees or subcontractor employees, in any way related to the
work or operations under this contract.

\(g\) You must indemnify and hold harmless the property owners or
parties lawfully in possession against all claims or liabilities
asserted by third parties, including all governmental agencies,
resulting directly or indirectly from your wrongful or negligent acts or
omissions.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price construction contracts or
fixed price dismantling, demolition or removal of improvements
contracts.

**3.2.2.3-50/alt1** **Property Protection Alternate I** (July 2004)

\(h\) Managing and disposing of hazardous wastes and materials may
expose the Contractor (you) and FAA (we) to short- and long-term
liabilities. To reduce these possible liabilities you must be fully
aware of the hazards and regulatory requirements associated with the
hazardous materials involved in this project. You must use qualified
personnel to handle and transport hazardous materials.

\(i\) Before commencing work, you must:

\(1\) Do an environmental assessment of the work the contract requires,
identifying tasks which involve using, handling or transporting
hazardous materials or wastes. The following work items are known to
involve such substances:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\[Contracting Officer (CO) list items here\]

\(2\) Submit an environmental plan identifying and dealing with each
specific task involving the wastes. The plan must be specific enough to
demonstrate a thorough understanding of the environmental risks and the
appropriate method for dealing with them. The plan must also list the
required permits and reference the regulations that govern the
activities needed to deal with the materials or wastes.

\(3\) Meet with the CO\'s representatives during the preconstruction
conference to discuss and to develop a mutual understanding on
implementing the plan.

\(4\) The CO may require other tasks to be added to the plan. If the CO
considers your planned methods for dealing with the risks insufficient,
the CO may require you to revise the plan. Work involving hazardous
materials or wastes must not start until we have approved your plan. Our
review of your plan does not relieve you of liability for environmental
law and regulatory compliance.

(End of clause)

PRESCRIPTION:

The CO should add this material to the end of 3.2.2.3-51 if hazardous
wastes or materials will be involved in contract performance.

**3.2.2.3-51** **Operations and Storage Areas** (July 2004)

\(a\) The Contractor (you) must confine all operations (including
storaging materials) on FAA (we, us) premises to areas the Contracting
Officer\'s Technical Representative (COTR) authorized or approved.

\(b\) You may erect temporary buildings (for example, storage sheds,
shops, offices) and utilities only with the Contracting Officer\'s (CO)
approval. You must build them with labor and materials you provide at no
cost to us. The temporary buildings and utilities remain your property
and you must remove them at your expense when you complete the work. You
must have the CO\'s written consent to abandon the buildings and
utilities.

\(c\) You must use only established roadways. The CO may authorize you
to construct temporary roadways at your expense. When you transport
materials for this purpose, you may not load vehicles beyond the loading
capacity of the vehicle or as prescribed by law or regulation. When you
must cross curbs or sidewalks, you must protect them from damage. If
they are damaged you must repair or pay for the repair of any damaged
curbs, sidewalks, or roads.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price construction contracts or
fixed price dismantling, demolition or removal of improvements
contracts.

**3.2.2.3-52** **Use and Possession Before the Project is Complete**
(July 2004)

\(a\) FAA (we) may take possession of or use any completed or partially
completed part of the work. Before taking possession of or using any
work, the Contracting Officer (CO) will provide the Contractor (you) a
list of work items you still need to do to correct those parts of the
work that we intend to possess or use. However, you are still
responsible for complying with the terms of the contract, even if the CO
fails to list any work item. Just because we use or possess any work you
produce under the contract does not necessarily mean we have accepted
it.

\(b\) You are not responsible for loss or damage to work resulting from
our use or possession, despite the terms of the clause in this contract
entitled \"Permits and Responsibilities.\" If our earlier possession or
use delays the progress of the work or causes you additional expense, we
will make an equitable adjustment in the contract price or extend the
time you have to complete work, and will so modify the contract in
writing.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price construction contracts when
there is a reasonable probability that the FAA will take early
possession of the work.

**3.2.2.3-53** **Cleaning Up and Roadway Maintenance** (July 2004)

\(a\) The Contractor (you) must keep the work area, including storage
areas, free from waste material accumulations at all times. Before
completing the work, you must remove from the work and premises any
rubbish, tools, scaffolding, equipment, and materials that are not
FAA\'s property. Upon completing the work, you must leave the work area
in a clean, neat, and orderly condition satisfactory to the Contracting
Officer (CO).

\(b\) Unless the contract specifically specifies otherwise, you must not
burn any material on site, on the right-of-ways, or on the access roads
to the sites. You must haul all material and debris to an appropriate
disposal site.

\(c\) You must maintain all roads you use, and when you finish the job
you must leave them in as good a condition as when first used. You must
use a road grading machine - not a bulldozer - for maintenance and final
grading. You may not interfere with the property owner\'s use of roads
existing before your entry.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price construction contracts or
fixed price dismantling, demolition or removal of improvements
contracts.

**3.2.2.3-54** **Preventing Accidents** (July 2004)

\(a\) The Contractor (you) must provide and maintain work environments
and procedures which will:

\(1\) safeguard the public and Government personnel, property,
materials, supplies, and equipment exposed to your operations and
activities;

\(2\) avoid interruptions of Government operations and delays in project
completion dates; and

\(3\) control costs in performing this contract.

\(b\) In contracts for construction or dismantling, demolition, or
removal of improvements, you must\--

\(1\) Provide appropriate safety barricades, signs, and signal lights;

\(2\) Comply with the standards issued by the Secretary of Labor at 29
CFR Part 1926 and 29 CFR Part 1910; and

\(3\) Ensure that you take any additional measures the Contracting
Officer (CO) determines to be reasonably necessary.

\(c\) If this contract is for construction or dismantling, demolition or
removal of improvements with any Department of Defense agency or
component, you must comply with all pertinent provisions of the latest
version of U.S. Army Corps of Engineers Safety and Health Requirements
Manual, EM 385-1-1, in effect on the date of the SIR.

\(d\) Whenever the CO becomes aware on any noncompliance with these
requirements or any condition which poses a serious or imminent danger
to the health or safety of the public or Government personnel, the CO
will notify you orally, with written confirmation, and ask you to start
corrective actions immediately. You must consider this notice to be
sufficient notice of noncompliance when you or your representative
receive it at the work site. You must immediately undertake corrective
action. After receiving the notice, you must immediately take corrective
action. If you fail or refuse to promptly take this action, the CO may
issue a partial or total stop-work order until you take satisfactory
corrective action. You are not entitled to any equitable adjustment of
the contract price or extension of the performance schedule if the CO
issues a stop work order under this clause.

\(e\) You must insert this clause, including this paragraph (e), with
appropriate changes in the designation of the parties, in all
subcontracts.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price construction contracts or
fixed price dismantling, demolition or removal of improvements
contracts.

**3.2.2.3-55** **Availability and Use of Utility Services** (July 2004)

\(a\) FAA (we, us) will make all reasonable required utilities amounts
available to the Contractor (you) from existing outlets and supplies, as
the contract specifies. You must pay for each utility service you use at
the prevailing rates we are charged, or at rates the Contracting Officer
(CO) determines to be reasonable. You must carefully conserve any
utilities we provide.

(b), You must install and maintain all necessary temporary connections
and distribution lines, and all meters required to measure each utility
used. You must do this at no cost to us and in a workmanlike manner
satisfactory to us. Before our final acceptance of your work, you must
remove all the temporary connections, distribution lines, meters, and
associated paraphernalia.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price construction contracts or
fixed price dismantling, demolition or removal of improvements contracts
if the contract is to be performed on Government sites and the CO
decides (a) that the existing utility system(s) is adequate for the
needs of both the Government and the contractor; and (b) providing
utilities is in the Government\'s best interest.

**3.2.2.3-56** **Schedules for Construction Contracts** (July 2004)

\(a\) The Contractor (you) must, within five days after the work on the
contract starts or after another period determined by the Contracting
Officer (CO), prepare and submit to the CO for approval three copies of
a practicable schedule showing the order in which you propose to perform
the work, and the dates you plan to start and finish the important
stages of the work (including acquiring materials, plant, and
equipment). The schedule must be in a progress chart of suitable scale
to indicate appropriately the percentage of work scheduled for
completion during the contract period. If you do not submit a schedule
within the time prescribed, FAA (us) may withhold payments until you
submit the schedule. If you fall behind your schedule, you must send a
revised schedule with your next request for payment. Provide us
additional schedules as soon as practicable if the CO requests them.

\(b\) With each payment request, submit a copy of the last schedule you
submitted, annotated to show progress to date. If at any time, in the
CO\'s opinion, you have fallen behind the schedule to an extent which
would jeopardize timely completion, you must take steps to improve
progress, including those the CO may require, to enable timely
completion without additional cost to us. The CO may require you to
increase the number of shifts, the amount of overtime, days of work each
week, or the amount of constructor plant being used. You must submit any
supplementary schedules the CO deems necessary to demonstrate how you
will regain the rate of progress necessary for timely completion.

\(c\) If you fail to comply with the CO\'s requirements under this
clause, the CO may determine that you are not performing the work with
enough diligence to ensure completing it within the time the contract
requires. If the CO makes this determination, the CO may terminate this
contract for default.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price construction contracts
where the period of work performance exceeds 60 days. Do not use the
clause in term type (level of effort) contracts.

**3.2.2.3-57** **Quantity Surveys** (July 2004)

\(a\) The Contractor (you) must conduct quantity surveys and use the
data from these surveys in computing the quantities of work performed
and the actual construction completed and in place.

\(b\) The FAA will conduct the original and final surveys and make the
computations based on them. You must conduct the surveys for any periods
for which you request payment and must make the computations based on
these surveys. You must conduct all surveys under the direction of the
Contracting Officer (CO) or his or her representative, unless the CO
specifically waives this requirement.

\(c\) As soon as you finish a survey, you must provide the CO the
originals of all field notes and all other records relating to the
survey or to the layout of the work. The CO will use them as necessary
to determine the amount of payment. You must retain copies of all survey
material you give the CO.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price construction contracts that
provide for unit pricing of items and for payment based on quantity
surveys.

**3.2.2.3-58** **Layout of Work** (July 2004)

The Contractor (you) must lay out your work from FAA (us)-established
baselines and bench marks indicated on the drawings, and must be
responsible for all measurements in connection with the layout. You must
provide, at no cost to us, all stakes, templates, platforms, equipment,
tools, materials, and labor required to lay out any part of the work.
You must be responsible for executing the work to the lines and grades
that the Contracting Officer (CO) may establish or indicate. You must
also be responsible for maintaining and preserving all stakes and other
marks the CO establishes until authorized to remove them. If you destroy
those marks or they are destroyed through your negligence before the CO
authorizes you to remove them, the CO may replace them and deduct the
expense from any amounts due to you.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed-price construction contracts
where is a need for accurate work layout and for siting verification
during work performance.

**3.2.2.3-59** **Organization and Direction of the Work** (July 2004)

\(a\) When this contract is awarded, the Contractor (you) must submit to
the Contracting Officer (CO) a chart showing your general executive and
administrative organization, the personnel you will use for this work,
and their respective duties. You must keep the data provided current by
supplementing it as additional information becomes available.

\(b\) Work under this contract must be under the full-time resident
direction of:

\(1\) you, if you are an individual;

\(2\) one or more principal partners, if you are a partnership; or

\(3\) one or more senior officers, if you are a corporation,
association, or similar legal entity.

However, if the CO approves, a specific person or persons holding
positions other than those identified in this paragraph may direct the
work.

(End of clause)

PRESCRIPTION:

The CO should use this clause in cost reimbursement construction
contracts.

**3.2.2.3-60** **Specifications, Drawings, and Material Offers** (July
2004)

\(a\) If either the specifications or the drawings (but not both)
mention tasks, the Contractor (you) must assume that the tasks are in
both. If the drawings and specifications differ, the specifications
govern. If there is a discrepancy in the figures, in the drawings, or in
the specifications, submit the matter promptly to the Contracting
Officer (CO), who will promptly determine which governs, and notify you
in writing. Any adjustment you make without the CO\'s determination is
at your own risk and expense. From time to time the CO will provide
necessary detailed drawings and other information, unless otherwise
provided.

\(b\) Wherever in the specifications or the drawings FAA (we, our) uses
\"directed,\" \"required,\" \"ordered,\" \"designated,\" \"prescribed,\"
or similar words, they refer to the CO\'s requirements. Similarly,
\"approved,\" \"acceptable,\" \"satisfactory,\" or similar words refer
to the CO\'s approval, unless otherwise expressly stated. You must have
a complete set of plans and specifications on site and available for our
use.

\(c\) Where we use \"as shown,\" \"as indicated,\" \"as detailed,\" or
similar words, they refer to the drawings accompanying this contract,
unless stated otherwise. The word \"provided\" means \"provided and
installed.\"

\(d\) Omissions from the drawings and specifications or the erroneous
description of details of work which are necessary to carry out the
intent of the drawings and specifications, or which are customarily
performed, does not relieve you from performing those omitted or
erroneously described details of the work. You must perform them as if
fully and correctly set forth and described in the drawings and
specifications.

\(e\) You must check all drawings we provide to you before starting work
and must promptly notify the CO of any discrepancies. In general you
should follow figures marked on drawings, rather than scale
measurements. In general, large scale drawings have precedence over
small scale drawings. You must compare all drawings and verify the
figures before laying out the work. If you do not verify the figures,
you will be responsible for any errors you might have avoided had you
verified them.

\(f\) \"Shop drawings\" means drawings, you or any subcontractor submit
to us under a construction contract, showing in detail the proposed
fabrication and assembly of structural elements and the installation
(that is, form, fit, and attachment details) of materials or equipment.
It includes drawings, diagrams, layouts, schematics, descriptive
literature, illustrations, schedules, performance and test data, and
similar materials you provided to explain in detail specific portions of
the work the contract requires.

FAA may duplicate, use, and disclose in any manner and for any purpose
shop drawings you deliver under this contract.

\(g\) If this contract requires material offers (for example, shop
drawings, catalog cuts, certificates of conformance), you must
coordinate all of your offers, and review them for accuracy,
completeness, and compliance with contract requirements. You must
provide evidence that you approve the submittals. If you submit
materials to us without this evidence, we may return them and ask you to
resubmit them. The CO will indicate whether he or she approves or
disapproves your offer, and if the CO does not approve it as submitted,
will indicate our reasons for rejecting it. Any work done before the
CO\'s approval is at your risk. The CO\'s approval does not relieve you
from responsibility for any errors or omissions in the submittals, nor
from responsibility for complying with the contract requirements, except
as described under (h).

\(h\) If you submittals vary from the contract requirements, you must
describe the variations in writing, separate from the submittal, when
you submit them. Send this description, a copy of the offer, and a
proposal to incorporate it into the contract directly to the CO. If the
CO approves a variation, the CO must issue an appropriate contract
modification, unless the variation is minor or does not involve a change
in price or in time of performance.

\(i\) You must submit to the CO for approval four copies (unless
otherwise indicated) of all shop drawings as called for under the
various headings of these specifications. The CO will keep three sets
(unless otherwise indicated) of all offers and will return one set to
you.

\(j\) You must insert this clause, with appropriate changes in the
designation of the parties, in all subcontracts.

(End of clause)

PRESCRIPTION:

The CO should use this clause in contracts for fixed price construction.

\*\*Note to CO: If you use this clause with Clause 3.2.2.3-33, Order of
Precedence, you may create a conflict in precedence of documents. To
avoid this, assure that the drawings are listed in the SIR or contract
as attachments to the specifications and not separately as \"other
documents, exhibits, and attachments\". This will clarify that the
specification takes precedence over the drawings.

**3.2.2.3-60/alt1** **Specifications, Drawings, and Material Offers
Alternate I** (July 2004)

\(k\) When you finish the work under this contract, you must provide
\_\_\_\_\_\_\_\_\_\_ \[CO insert number\] complete reproducible sets of
all shop drawings as we finally approve them. These drawings must show
all changes and revisions made up to the time you finish the work and we
accept it.

(End of clause)

PRESCRIPTION:

: The CO should add this provision to AMS 3.2.2.3-60 when we need
reproducible shop drawings.

Note: The CO must insert data in this clause.

**3.2.2.3-60/alt2** **Specifications, Drawings, and Material Offers
Alternate II** (July 2004)

\(k\) When you finish the work under this contract, you must provide
\_\_\_\_\_\_\_\_\_\_ \[CO insert number\] complete sets of all shop
drawings as we finally approve them. These drawings must show all
changes and revisions made up to the time you finish the work and we
accept it.

(End of clause)

PRESCRIPTION:

The CO may add this provision to AMS 3.2.2.3-60 when we need shop
drawings.

**3.2.2.3-61** **Responsibility of the Architect-Engineer Contractor**
(July 2004)

\(a\) The Contractor (you) are responsible for the professional quality,
technical accuracy, and coordination of all designs, drawings,
specifications, and other services you provide under this contract. You
must, at no additional cost to us, correct or revise any errors or
deficiencies in your designs, drawings, specifications, and other
services.

\(b\) FAA\'s (we, our) review, approval or acceptance of, or payment
for, the services this contract requires are not a waiver of our rights
under this contract or of any cause of action arising out of performing
this contract. You remain liable to us under applicable law for damages
resulting from your negligent performance of any of the services
provided under this contract.

\(c\) The rights and remedies this contract gives FAA are in addition to
any other rights and remedies the law provides.

\(d\) If you are comprised of more than one legal entity, each entity is
be jointly and severally liable under this clause.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price architect and engineer
services contracts.

**3.2.2.3-62** **Preconstruction Conference** (July 2004)

The successful offeror must attend a pre-construction conference at a
site the Contracting Officer designates before starting the work.

(End of clause)

PRESCRIPTION:

The CO may use this clause in construction contracts.

**3.2.2.3-63** **Site Visit (Construction)** (July 2004)

\(a\) AMS clauses 3.2.2.3-42, Differing Site Conditions, and 3.2.2.3-43,
Site Investigations and Conditions Affecting the Work, will be included
in any contract awarded under this SIR. Accordingly, FAA urges and
expects offerors to inspect the site where the work will be performed.

\(b\) Site visits may be arranged during normal duty hours by
contacting:

Name: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Address: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Telephone:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(End of provision)

PRESCRIPTION:

The Contracting Officer must use this provision in SIRs that include
clauses 3.2.2.3-42 and 3.2.2.3-43, if there will be an organized site
visit.

**3.2.2.3-64** **Dismantling and Demolishing Property** (July 2004)

The Contractor (you) must get title to all property to be dismantled or
demolished that is not specifically designated in the contract as being
FAA (we) property. The title must vest in you immediately upon contract
award, or if you are required to provide a performance bond after award,
when we issue a notice to proceed with the work. We will not be
responsible for the condition of, or any loss or damage to, the
property.

(End of clause)

PRESCRIPTION:

The Contracting Officer should use this clause in contracts for
dismantling and demolition when title of the property to be demolished
will be transferred to the contractor at award.

**3.2.2.3-65** **Use of Explosives** (July 2004)

\(a\) Precautions for using explosives:

\(1\) The Contractor (you) must use the utmost care to prevent danger to
life and to prevent property damage beyond the blast area. The
Contracting Officer (CO) may suspend work if you fail to observe
necessary precautions. You must use blasting mats or other measures to
prevent rocks and debris from being thrown onto cultivated pasture
lands, recreational areas, and other sensitive areas.

\(2\) You must not use electric blasting caps near energized power
lines. You must detonate individual charges detonated by approved
detonating safety fuse cords.

\(3\) You must comply with applicable laws and regulations, including
local laws, in transporting, storing, and using all exploders, fuses,
and explosives.

\(b\) Warning Lights: You must provide and use a flashing high intensity
warning light at each blasting site. You must place the light where it
will be visible in all directions from low flying aircraft. The light
must be fumed on about five minutes before, and remain on during, the
blasting. Each light must be enclosed in a red lens, produce one million
candle power, be visible vertically and horizontally, and flash at no
less than 80 but not more than 130 times a minute.

\(c\) Fire Danger. When you are blasting and there is a danger of fire:

\(1\) You may not use fuse and caps.

\(2\) The CO may stop blasting during periods of high fire danger.

\(3\) When the relative humidity is below 50 percent, you must have a
watchman at each blasting site for at least one hour after blasting.

(End of clause)

PRESCRIPTION:

The CO should use this clause for contracts where explosives may be
used.

**3.2.2.3-66** **Contractor\'s Daily Log** (July 2004)

The Contractor (you) must submit a \"Daily Log.\" You must complete the
forms daily and deliver them to the designated FAA Contracting
Officer\'s (CO) Technical Representative. The forms must include, but is
not limited to, workers by classification, construction equipment moved
on and off the site, materials and equipment delivered to the site,
inspections and tests performed, and total cumulative hours worked.

(End of clause)

PRESCRIPTION:

The CO should use this clause in construction contracts when a daily log
is required.

**3.2.2.3-67** **Special Precautions for Work at Operating Airports**
(July 2004)

\(a\) When the Contractor (you) performs work at an operating airport,
you must arrange your work schedule so it will not interfere with flight
operations. Those operations take precedence over construction
convenience. You must perform work that would otherwise interfere with
or endanger the operations of aircraft only at times and in the manner
the Contracting Officer (CO) directs. The FAA will make every effort to
reduce the disruption of your operation.

\(b\) Unless otherwise specified by local regulations, you must mark all
areas in which construction operations are underway with yellow flags
during daylight hours and with red lights at other times. The red lights
along the edge of the construction areas within the existing aprons must
be the electric type of not less than 100 watts intensity, placed and
supported as required. All other construction markings on roads and
adjacent parking lots may be either electric or battery type lights. You
must place these lights and flags to outline the construction areas, and
the distance between any two flags or lights must not be greater than 25
feet. You must provide adequate watch to maintain the lights in working
condition at all times other than daylight hours. The CO will determine
the hour daylight begins and ends.

\(c\) All equipment and material in the construction areas or when moved
outside the construction area must be marked with airport safety flags
during the day and at other times the CO directs, and with red
obstruction lights at nights. You must have clearance lights conforming
with the CO\'s instructions for all equipment operating on the apron,
taxiway, runway, and intermediate areas after dark. You must not operate
construction equipment within 50 feet of aircraft undergoing fuel
operations. You must not have open flames on the ramp except at times
the CO authorizes.

\(d\) Your trucks and other motorized equipment must enter the airport
or construction area only over routes the CO identifies. You must not
use runways, aprons, taxiways, or parking areas as truck or equipment
routes unless specifically authorized for such use. You must provide
flag personnel at points on apron and taxiway to safely guide your
equipment over these areas to assure right of way to aircraft. You must
return areas and routes you used during the contract to their original
condition. You must not exceed the airport management\'s maximum speed
at the airport. Your vehicles must be under safe control at all times,
weather and traffic conditions considered. Vehicles must have with head
and tail lights when it\'s dark.

(End of clause)

PRESCRIPTION:

The CO must use this clause in contracts where the work will be
performed at an operating airport.

**3.2.2.3-68** **Safety and Health** (July 2004)

\(a\) The Contractor (you) must assure your employees on this contract
do not work in surroundings or under conditions that are unsanitary,
hazardous, or dangerous to their health or safety. In fulfilling these
requirements, you must comply with:

\(1\) Department of Labor Safety and Health Standards for Construction
under Section 107 of the Contract Work Hours and Safety Standards Act
(40 U.S.C. 327 and following sections).

\(2\) Occupational Safety and Health Act of 1970, (Public Law 91-598)
and applicable state rules and regulations.

\(3\) Supplemental FAA safety and health requirements stated below or
elsewhere in the contract.

\(b\) If there are conflicts between any of the requirements referenced
in this contract, the more stringent requirement will prevail.

\(c\) The Contracting Officer\'s (CO) Technical Representative will
promptly notify the CO of your deficiencies in meeting the requirements
of this clause. The CO will take action appropriate to the deficiencies
that are identified, such as:

\(1\) The CO may notify you of the deficiencies and establish a date for
your compliance with this clause;

\(2\) The CO may notify you in writing to stop work until you eliminate
the deficiencies;

\(3\) In emergency situations the CO may notify you orally to stop work
with written confirmation following promptly; or

\(4\) The CO may pursue other remedies the contract provides.

\(d\) When you have taken satisfactory corrective action, you must
request permission from the CO to resume work. You will not receive a
time extension or additional costs resulting from the directive to stop
work. The CO\'s failure to provide notice of noncompliance or to stop
work must not relieve you of your responsibility to safely perform the
work.

\(e\) You must provide hard hats and other required safety equipment,
except those that the FAA provides. Everyone on all construction
projects must wear hard hats meeting the requirements of Occupational
Safety and Health Administration (OSHA), unless their use creates a more
serious hazardous condition.

(End of clause)

PRESCRIPTION:

The CO should use this clause in construction contracts.

**3.2.2.3-68/alt1** **Safety and Health Alternate I** (July 2004)

\(a\) Before beginning work, the Contractor (you) must:

\(1\) Perform a hazards analysis of the work specified in this contract.
Consider both the site and adjacent conditions. Identify all significant
hazards. Some of the hazards you might encounter are
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[Contracting Officer (CO) list
possible hazards\]

\(2\) Submit a safety plan for dealing with each specific hazard
identified, whether you or FAA identified it.

\(3\) Meet with the CO\'s representatives during the preconstruction
conference to discuss and to develop a mutual understanding about the
content and implementation of the plan.

\(4\) The CO or her or his representatives may require other hazards to
be added to the plan. If the CO determines that your planned hazard
avoidance measures are insufficient, the CO or a designated
representative may require you to revise the plan. You may not begin
work involving identified hazards unless you have submitted adequate
plans to the CO and the CO has reviewed them. This approval does not
relieve you of your liability for safe performance.

(End of clause)

PRESCRIPTION:

The CO should use this alternate clause if the contractor must identify
hazards and develop a safety plan.

Note: The CO must insert data in this clause.

**3.2.2.3-69** **Subcontracts - Construction** (July 2004)

The Contractor (you) must submit proposed subcontracts to the
Contracting Officer (CO) for approval before you award them. The CO\'s
approval to subcontract any portion of the contract does not relieve you
of any responsibility under the contract.

(End of clause)

PRESCRIPTION:

The CO should use this clause in contracts when the CO needs to review
subcontracts.

**3.2.2.3-69/alt1** **Subcontracts - Construction Alternate I** (July
2004)

\(a\) If the subcontract is for managing or handling hazardous or toxic
wastes, before you begin work FAA must get a copy of EPA Notification of
Hazardous Waste Activity (EPA form 8700-12 or equivalent) and
acknowledgment of the notification filing (EPA form 8700-12A or
equivalent).

\(b\) If the subcontract involves managing PCBs, before you begin work
FAA must get a copy of EPA Notification of PCB Activity (EPA form
7710-53 or equivalent) and acknowledgment of the filing (a letter from
EPA). EPA\'s acknowledgment will include the identification number EPA
assigned.

(End of clause)

PRESCRIPTION:

The CO should add this paragraph when subcontracts could involve work
with toxic or hazardous waste.

**3.2.2.3-70** **Taxpayer Identification** (July 2004)

\(a\) Definitions.

\(1\) \"Common parent,\" as used in this clause, means a corporate
entity that owns or controls an affiliated group of corporations that
files an offeror\'s (you, your) Federal income tax returns on a
consolidated basis, and of which you are a member.

\(2\) \"Corporate status,\" as used in this clause, means a designation
as to whether you are a corporate entity, an unincorporated entity (for
example, sole proprietorship or partnership), or a corporation providing
medical and health care services.

\(3\) \"Taxpayer Identification Number (TIN),\" as used in this clause,
means the number the Internal Revenue Service (IRS) requires you use in
reporting income tax and other returns.

\(b\) All offerors must submit the information required in paragraphs
(c) through (e) of this provision to comply with reporting requirements
of 26 U.S.C. 6041, 6041A, and 6050M and implementing regulations issued
by IRS. The FAA will use this information to collect and report on any
delinquent amounts arising out of your relation with the Federal
Government, under Public Law 104 -134, the Debt Collection Improvement
Act of 1996, Section 31001(I)(3). If the resulting contract is subject
to the reporting requirements and you refuse or fail to provide the
information, the Contracting Officer (CO) may reduce your payments 31
percent under the contract.

\(c\) Taxpayer Identification Number (TIN).

\[ \] TIN: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[ \] TIN has been applied for.

\[ \] TIN is not required because:

\[ \] Offeror is a nonresident alien, foreign corporation, or foreign
partnership that does not leave income effectively connected with the
conduct of a trade or business in the U.S. and does not have an office
or place of business or a fiscal paying agent in the U.S.;

\[ \] Offeror is an agency or instrumentality of a foreign government;

\[ \] Offeror is an agency or instrumentality of a Federal, state, or
local government;

\[ \] Other\--State basis.
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

\(d\) Corporate Status.

\[ \] Corporation providing medical and health care services, or engaged
in the billing and collecting of payments for such services;

\[ \] Other corporate entity

\[ \] Not a corporate entity

\[ \] Sole proprietorship

\[ \] Partnership

\[ \] Hospital or extended care facility described in 26 CFR 501(c)(3)
that is exempt from taxation under 26 CFR 501(a).

\(e\) Common Parent.

\[ \] A common parent does not own or control the offeror as defined in
paragraph (a).

\[ \] Name and TIN of common parent:

Name
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

TIN
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(End of provision)

PRESCRIPTION:

The CO must use this provision in all SIRs unless the FAA already has
the offeror\'s taxpayer identification number.

**3.2.2.3-71** **Starting, Performing, and Completing Work** (July 2004)

The Contractor (you) must

\(a\) begin work under this contract within \_\_\_\_\_\_\_ \[Contracting
Officer (CO) insert number\] calendar days after the date you receive
the notice to proceed,

\(b\) perform the work diligently, and

\(c\) complete the entire work ready for use not later than
\_\_\_\_\_\_\_\_ \[CO insert date\]. The time allowed for completion
must include final cleanup of the premises.

(End of clause)

PRESCRIPTION:

The CO should use this clause in fixed price construction contracts to
specify beginning and ending dates.

Note: The CO must insert data in this clause.

**3.2.2.3-71/alt1** **Starting, Performing, and Completing Work.
Alternate I** (July 2004)

\(d\) The completion date assumes that the successful offeror will
receive the notice to proceed by \_\_\_\_\_\_ \[Contracting Officer
insert date\]. The CO will extend the completion date by the number of
calendar days after the above date that you receive the notice to
proceed, except to the extent that the delay in issuing the notice to
proceed results from your failure to execute the contract and give the
required performance and payment bonds to FAA within the time specified.

(End of clause)

PRESCRIPTION:

The CO should add this paragraph in contracts for fixed price
construction to state a commencement and completion date based on an
assumed date the offeror will receive notice to proceed.

Note: The CO must insert data in this clause.

**3.2.2.3-72** **Announcing Competing Offerors** (July 2004)

\(a\) To encourage small businesses to seek subcontracting opportunities
with possible FAA contractors, the Contracting Officer (CO) may publicly
announce the names and addresses of offerors responding to this SIR
before selection and award.

\(b\) Competing offerors (you) must notify the CO in writing, at the
time you submit your proposal, if you do not want your name and address
made public for subcontracting opportunities. The CO will not release
your information if you request it be withheld.

(End of provision)

PRESCRIPTION:

The CO must use this provision in SIRs when the CO plans to publicly
announce offeror\'s names.

**3.2.2.3-73** **Shipping Spare Parts** (July 2004)

When shipping spare parts, the Contractor (you) must include a packing
list with the shipment. The packing list must include at least the
following information for each different item shipped: noun name, part
number, Commercial and Government Entity (CAGE) Code, quantity, unit
price, and national stock number (if available).

(End of Clause)

PRESCRIPTION:

The CO must use this clause in contracts for purchasing spare parts.

**3.2.2.3-74** **Site And Depot Level Spare Parts** (July 2004)

Offerors responding to this SIR must include the following in their
proposals:

A separately-priced recommended initial site and depot-level spare parts
list for CLIN \[Contracting Officer (CO) insert CLIN number here\]. The
list must contain each item\'s noun name, part number, Commercial and
Government Entity (CAGE) Code, quantity, unit price, national stock
number (if available) and the recommended quantity.

The CO reserves the right to approve, disapprove, or modify the
recommended spare parts list as part of ongoing negotiations regarding
spare parts before contract award.

(End of Provision)

PRESCRIPTION:

The CO must use this provision in SIRs requiring purchase and delivery
of spare parts.

**3.2.2.3-75** **Requests for Contract Information** (July 2004)

Any contract resulting from this SIR is a public document, subject to
release under the Freedom of Information Act (FOIA), 5 U.S.C. Section
552. Unless covered by an exemption described in the Act, the
Contracting Officer (CO) may release all information contained in the
contract, including unit price, hourly rates and their extensions, to
the public on request. Offerors (you) are urged to mark any sensitive
documents you submit in response to this SIR that you consider to be
trade secrets, proprietary information, or privileged or confidential
financial information.

\[End of Provision\]

PRESCRIPTION:

The CO must use this provision in all SIRs except \"classified\"
contracts. Use with AMS provision 3.2.2.3-76.

**3.2.2.3-76** **Representation- Release of Contract Information** (July
2004)

\(a\) Any contract resulting from this SIR may be subject to release
under the Freedom of Information Act (FOIA), 5 U.S.C. Section 552.

\(b\) The offeror\'s (you, your) position regarding the possible release
of information you provide in response to this SIR is as follows:

\(c\) REPRESENTATION CONCERNING RELEASE OF CONTRACT INFORMATION\--

The offeror (you) represents that\--(1)\[ \] You have made a complete
review of your offer(s) in response to this SIR and no exemption from
mandatory release under FOIA exists, and, (2)\[ \] You have no objection
to the release of any contract you may be awarded in whole or in part
resulting from this SIR.

OR

The offeror (you) represents that \[ \] your offer(s) in response to
this SIR contains information that is exempt from mandatory release
under FOIA. Accordingly, you represent that\--(1)\[ \] You have
identified any sensitive documents you submitted in response to this SIR
by placing restrictive markings on them. This may include trade secrets,
proprietary information, or commercial or financial information that is
privileged or confidential, and (2)\[ \] As the party that provided the
information, you have provided the Contracting Officer (by separate
letter concurrent with this offer) detailed information listing the
page(s) to be withheld complete with any and all legal justifications
which would permit the FAA to invoke a FOIA exemption.

\[End of Provision\]

PRESCRIPTION:

The CO should use this provision with AMS provision 3.2.2.3-75.

**3.2.2.7-1** **Qualification Requirements** (April 1996)

\(a\) Definition: \'Qualification requirement,\' as used in this clause,
means a Government requirement for testing or other quality assurance
demonstration that must be completed before award.

\(b\) One or more qualification requirements apply to the supplies or
services covered by this contract. For those supplies or services
requiring qualification, whether the covered product or service is an
end item under this contract or simply a component of an end item, the
product, manufacturer, or source must have demonstrated that it meets
the standards prescribed for qualification before award of this
contract. The product, manufacturer, or source must be qualified at the
time of award whether or not the name of the product, manufacturer, or
source is actually included on a qualified products list, qualified
manufacturers list, or qualified bidders list. Offerors should contact
the agency activity designated below to obtain all requirements that
they or their products or services, or their subcontractors or their
products or services, must satisfy to become qualified and to arrange
for an opportunity to demonstrate their abilities to meet the standards
specified for qualification.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(Agency Name and Contact)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(Address)

\(c\) If an offeror, manufacturer, source, product or service covered by
a qualification requirement has already met the standards specified, the
relevant information noted below should be provided.

Offeror\'s Name
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Manufacturer\'s Name
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Source\'s Name
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Item Name
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Service Identification
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Test Number
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(to the extent known)
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(d\) Even though a product or service subject to a qualification
requirement is not itself an end item under this contract, the product,
manufacturer, or source must nevertheless be qualified at the time of
award of this contract. This is necessary whether the Contractor or a
subcontractor will ultimately provide the product or service in
question. If, after award, the Contracting Officer discovers that an
applicable qualification requirement was not in fact met at the time of
award, the Contracting Officer may either terminate this contract for
default or allow performance to continue if adequate consideration is
offered and the action is determined to be otherwise in the
Government\'s best interests.

\(e\) If an offeror, manufacturer, source, product, or service has met
the qualification requirement but is not yet on a qualified products
list or qualified vendors list, the offeror shall submit evidence of
qualification prior to award of this contract. Unless determined to be
in the Government\'s interest, award of this contract shall not be
delayed to permit an offeror to submit evidence of qualification.

\(f\) Any change in location or ownership of the plant where a
previously qualified product or service was manufactured or performed
requires reevaluation of the qualification. Similarly, any change in
location or ownership of a previously qualified manufacturer or source
requires reevaluation of the qualification. The reevaluation must be
accomplished before the date of award.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when acquisition is subject to
qualification requirements ( e.g., testing or demonstration) prior to
award. The Contracting Officer should insert appropriate information in
the clause.

**3.2.2.7-2** **Reserved** (April 1996)

.

PRESCRIPTION:

.

**3.2.2.7-3** **Reserved** (April 1996)

.

PRESCRIPTION:

.

**3.2.2.7-4** **RESERVED.**

PRESCRIPTION:

**3.2.2.7-5** **RESERVED.**

PRESCRIPTION:

**3.2.2.7-6** **Protecting the Government\'s Interest when
Subcontracting with Contractors Debarred, Suspended, or Proposed for
Debarment** (April 1996)

\(a\) The Government suspends or debars Contractors to protect the
Government\'s interests. The Contractor shall not enter into any
subcontract with a Contractor that is debarred, suspended, or proposed
for debarment unless there is a compelling reason to do so.

\(b\) The Contractor shall require each proposed first-tier
subcontractor, to disclose to the Contractor, in writing, whether as of
the time of award of the subcontract, the subcontractor, or its
principals, is or is not debarred, suspended, or proposed for debarment
by the Federal Government.

\(c\) A corporate officer or a designee of the Contractor shall notify
the Contracting Officer, in writing, before entering into a subcontract
with a party that is debarred, suspended, or proposed for debarment. The
notice must include the following:

\(1\) The name of the subcontractor.

\(2\) The Contractor\'s knowledge of the reasons for the subcontractor
being on the List of Parties Excluded from Procurement Programs.

\(3\) The compelling reason(s) for doing business with the subcontractor
notwithstanding its inclusion on the List of Parties Excluded From
Procurement Programs.

\(4\) The systems and procedures the Contractor has established to
ensure that it is fully protecting the Government\'s interests when
dealing with such subcontractor in view of the specific basis for the
party\'s debarment, suspension, or proposed debarment.

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contracts.

**3.2.2.7-7** **Certification Regarding Debarment, Suspension, Proposed
Debarment, and Other Responsibility Matters** (April 1996)

\(a\) The Offeror certifies, to the best of its knowledge and belief,
that\--

\(i\) The Offeror and/or any of its Principals\--

\(A\) Are \[ \] are not \[ \] presently debarred, suspended, proposed
for debarment, or declared ineligible for the award of contracts by any
Federal agency;

\(B\) Have \[ \] have not \[ \] within a three-year period preceding
this offer, been convicted of or had a civil judgment rendered against
them for: commission of fraud or a criminal offense in connection with
obtaining, attempting to obtain, or performing a public (Federal, state,
or local) contract or subcontract; violation of Federal or state
antitrust statutes relating to the submission of offers: or commission
of embezzlement, theft, forgery, bribery, falsification or destruction
of records, making false statements, or receiving stolen property; and

\(C\) Are \[ \] are not \[ \] presently indicted for, or otherwise
criminally or civilly charged by a governmental entity with, commission
of any of the offenses enumerated in subdivision (a)(1)(i)(B) of this
provision.

\(ii\) The Offeror has \[ \] has not \[ \] within a three-year period
preceding this offer, had one or more contracts terminated for default
by any Federal agency.

\'Principals,\' for the purposes of this certification, means officers;
directors; owners; partners; and, persons having primary management or
supervisory responsibilities within a business entity (e.g., general
manager; plant manager; head of a subsidiary, division, or business
segment, and similar positions). THIS CERTIFICATION CONCERNS A MATTER
WITHIN THE JURISDICTION OF AN AGENCY OF THE UNITED STATES AND THE MAKING
OF A FALSE, FICTITIOUS, OR FRAUDULENT CERTIFICATION MAY RENDER THE MAKER
SUBJECT TO PROSECUTION UNDER SECTION 1001, TITLE 18, UNITED STATES CODE.

\(b\) The Offeror shall provide immediate written notice to the
Contracting Officer if, at any time prior to contract award, the Offeror
learns that its certification was erroneous when submitted or has become
erroneous by reason of changed circumstances.

\(c\) A certification that any of the items in paragraph (a) of this
provision exists will not necessarily result in withholding of an award
under this SIR. However, the certification will be considered in
connection with a determination of the Offeror\'s responsibility.
Failure of the Offeror to furnish a certification or provide such
additional information as requested by the Contracting Officer may
render the Offeror nonresponsible.

\(d\) Nothing contained in the foregoing shall be construed to require
establishment of a system of records in order to render, in good faith,
the certification required by paragraph (a) of this provision. The
knowledge and information of an Offeror is not required to exceed that
which is normally possessed by a prudent person in the ordinary course
of business dealings.

\(e\) The certification in paragraph (a) of this provision is a material
representation of fact upon which reliance was placed when making award.
If it is later determined that the Offeror knowingly rendered an
erroneous certification, in addition to other remedies available to the
Government, the Contracting Officer may terminate the contract resulting
from this SIR for default.

(End of provision)

PRESCRIPTION:

Shall be used in all SIRs and contracts.

**3.2.2.8-1** **New Material** (October 1996)

\(a\) Definitions.

\(1\) \"Material\" as used in this clause, includes, but is not limited
to, raw materials, parts, items, components, and end products.

\(2\) \"New,\" as used in this clause, means previously unused or
composed of previously unused materials and may, if authorized, include
unused residual property or unused former Government surplus property.

\(3\) \"Other than new,\" as used in this clause, includes, but is not
limited to, recycled, recovered, remanufactured, used and reconditioned.

\(b\) Unless this contract specifies otherwise, the Contractor
represents that the supplies, including, if authorized by the
Contracting Officer, any residual inventory and former Government
surplus property included in its offer, are new and are not of such age
or so deteriorated as to impair their usefulness or safety.

\(c\) If the Contractor proposes to furnish other than new material,
residual inventory resulting from terminated Government contracts, or
former Government surplus, the Contractor shall provide the following
information in its offer:

\(1\) a complete description of the materials;

\(2\) quantity;

\(3\) name of Government agency from which acquired;

\(4\) date of acquisition, if applicable.

\(d\) The Contractor shall not furnish any other than new material,
residual inventory, or former Government surplus unless authorized in
writing by the Contracting Officer.

\(e\) All material to be furnished under the contract shall comply with
the terms and specifications contained in the contract.

\(f\) If during contract performance the Contractor believes use of
other than new material, residual inventory, or former Government
surplus property will be in the Government\'s interest, the Contractor
shall so notify the Contracting Officer in writing and request authority
to use such material. The Contractor\'s notice shall include the reasons
for the request along with a proposal for any consideration due the
Government if the Contracting Officer authorizes the use of such
material.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for supplies.

**3.2.2.8-2** **Variation in Quantity** (April 1996)

\(a\) A variation in the quantity of any contract item will not be
accepted unless the variation has been caused by conditions of loading,
shipping, or packing or allowances in manufacturing processes, and then
only to the extent, if any, specified in paragraph (b) below.

\(b\) The permissible variation shall be limited to: \_\_\_\_ % increase
and \_\_\_% decrease \[Contracting Officer insert percentages\]. This
permissible variation shall be limited
to\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \*

\*Contracting Officer insert the designations(s) to which the
percentages apply, such as (1) the total contract quantity, (2) item 1
only, (3) each quantity specified in the delivery schedule, (4) the to
total item quantity for each destination, or (5) the total quantity of
each item without regard to destination.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when a fixed price supply contract
is contemplated for supplies and services that involve the furnishing of
supplies. The Contracting Officer should insert appropriate information
in the clause.

**3.2.2.8-3** **Delivery of Excess Quantities** (April 1996)

The Contractor is responsible for the delivery of each item quantity
within allowable variations, if any. If the Contractor delivers and the
Government receives quantities of any item in excess of the quantity
called for (after considering any allowable variation in quantity), such
excess quantities will be treated as being delivered for the convenience
of the Contractor. The Government may retain such excess quantities up
to \$500 in value without compensating the Contractor therefor, and the
Contractor waives all right, title, or interests therein. Quantities in
excess of \$500 will, at the option of the Government, either be
returned at the Contractor\'s expense or retained and paid for by the
Government at the contract unit price.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when a fixed price supply contract
is contemplated.

**3.2.2.8-4** **Variation in Estimated Quantities** (April 1996)

If the quantity of a unit-priced item in this contract is an estimated
quantity and the actual quantity of the unit-priced item varies more
than \_\_\_\_ percent \[insert percentage\] above or below the estimated
quantity, an equitable adjustment in the contract price shall be made
upon demand of either party. The equitable adjustment shall be based
upon any increase or decrease in costs due solely to the variation above
\_\_\_\_ percent \[insert percentage\] or below \_\_\_\_ percent
\[insert percentage\] of the estimated quantity. If the quantity
variation is such as to cause an increase in the time necessary for
completion, the Contractor may request, in writing, an extension of
time, to be received by the Contracting Officer within 10 days from the
beginning of the delay, or within such further period as may be granted
by the Contracting Officer before the date of final settlement of the
contract. Upon the receipt of a written request for an extension, the
Contracting Officer shall ascertain the facts and make an adjustment for
extending the completion date as, in the judgment of the Contracting
Officer, is justified.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when a fixed price construction
contract is contemplated that authorizes a variation in the estimated
quantity of unit-priced items.. The Contracting Officer should insert
appropriate information in the clause.

**3.2.2.8-5** **Liquidated Damages\--Construction** (April 1996)

\(a\) If the Contractor fails to complete the work within the time
specified in the contract, or any extension, the Contractor shall pay to
FAA as liquidated damages, the sum of \$\_\_\_\_\_ \[insert amount\] for
each day of delay.

\(b\) If FAA terminates the Contractor\'s right to proceed, the
resulting damage will consist of liquidated damages until such
reasonable time as may be required for final completion of the work,
together with any increased costs to FAA in completing the work.

\(c\) If FAA does not terminate the Contractor\'s right to proceed, the
resulting damage will consist of liquidated damages until the work is
completed or accepted.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for construction, except
construction on a cost-plus-fixed-fee basis. The Contracting Officer
should insert appropriate information in the clause.

**3.2.2.8-6** **Time of Delivery** (November 1997)

\(a\) The Government requires delivery to be made according to the
following schedule:

REQUIRED DELIVERY SCHEDULE

\[Contracting Officer insert specific details\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS

AFTER DATE

OF CONTRACT

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

The Government will evaluate equally, as regards time of delivery,
offers that propose delivery of each quantity within the applicable
delivery period specified above. Offers that propose delivery that will
not clearly fall within the applicable required delivery period
specified above, may be rejected. The Government reserves the right to
award under either the required delivery schedule or the proposed
delivery schedule, when an offeror offers an earlier delivery schedule
than required above. If the offeror proposes no other delivery schedule,
the required delivery schedule above will apply.

OFFEROR\'S PROPOSED DELIVERY SCHEDULE

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS

AFTER DATE

OF CONTRACT

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(b\) Attention is directed to provisions of the screening information
request/contract that provide that a written award or acceptance of
offer mailed, or otherwise furnished to the successful offeror, results
in a binding contract. The Government will mail or otherwise furnish to
the offeror an award or notice of award not later than the day award is
dated. Therefore, the offeror should compute the time available for
performance beginning with the actual date of award, rather than the
date the written notice of award is received from the Contracting
Officer through the ordinary mails. However, the Government will
evaluate an offer that proposes delivery based on the Contractor\'s date
of receipt of the contract or notice of award by adding (i) five
calendar days for delivery of the award through the ordinary mails, or
(ii) one working day if the solicitation states that the contract or
notice of award will be transmitted electronically. (The term \'working
day\' excludes weekends and U.S. Federal holidays.) If, as so computed,
the offered delivery date is later than the required delivery date, the
offer may be rejected.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts, other than those for construction
and architect-engineering services, when the Government requires
delivery by a specific time and delivery schedule will be based upon a
specific date of award. The Contracting Officer should insert
appropriate information in the clause.

**3.2.2.8-6/alt1** **Time of Delivery. Alternate I** (November 1997)

Substitute the following paragraph (b) for paragraph

\(b\) of the basic clause and express the time by substituting \'on or
before\'; \'during the months \_\_\'; or \'not sooner than \_\_ or later
than \_\_ \' as headings for the third column of paragraph (a) the basic
clause.

\(a\) The Government requires delivery to be made according to the
following schedule:

REQUIRED DELIVERY SCHEDULE

\[Contracting Officer insert specific details\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY ON OR BEFORE\*
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

The Government will evaluate equally, as regards time of delivery,
offers that propose delivery of each quantity within the applicable
delivery period specified above. Offers that propose delivery that will
not clearly fall within the applicable required delivery period
specified above, may be rejected. The Government reserves the right to
award under either the required delivery schedule or the proposed
delivery schedule, when an offeror offers an earlier delivery schedule
than required above. If the offeror proposes no other delivery schedule,
the required delivery schedule above will apply.

OFFEROR\'S PROPOSED DELIVERY SCHEDULE

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY ON OR BEFORE\*
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(b\) The delivery dates or specific periods above are based on the
assumption that the Government will make award by \_\_\_\_\_\_\_\_\_\_\_
\[Contracting Officer insert date\]. Each delivery date in the delivery
schedule above will be extended by the number of calendar days after the
above date that the contract is in fact awarded. Attention is directed
to the Contract Award provision of the solicitation that provides that a
written award or acceptance of offer mailed or otherwise furnished to
the successful offeror results in a binding contract. Therefore, the
offeror should compute the time available for performance beginning with
the actual date of award, rather than the date the written notice of
award is received from the Contracting Officer through the ordinary
mails.

(End of clause)

\*This column heading may also be expressed as: during the months
\_\_\_\_\_\_; not sooner than \_\_\_\_\_; not later than \_\_\_\_.

PRESCRIPTION:

May be used in SIR\'s and contracts other than those for construction
and architect-engineering services when the delivery schedule will be
expressed in terms of specific calendar dates or specific periods and is
based upon an assumed date of award.

**3.2.2.8-6/alt2** **Time of Delivery. Alternate II** (November 1997)

Substitute the following paragraph (b) for paragraph

\(b\) of the basic clause and express the time of delivery by
substituting \'within days after the date of receipt of a written notice
of award\' as the heading for the third column of paragraph (a) of the
basic clause.

\(a\) The Government requires delivery to be made according to the
following schedule.

REQUIRED DELIVERY SCHEDULE

\[Contracting Officer insert specific details\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS AFTER DATE

OF RECEIPT OF WRITTEN

AWARD NOTICE
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

The Government will evaluate equally, as regards time of delivery,
offers that propose delivery of each quantity within the applicable
delivery period specified above. Offers that propose delivery that will
not clearly fall within the applicable required delivery period
specified above, may be rejected. The Government reserves the right to
award under either the required delivery schedule or the proposed
delivery schedule, when an offeror offers an earlier delivery schedule
than required above. If the offeror proposes no other delivery schedule,
the required delivery schedule above will apply.

OFFEROR\'S PROPOSED DELIVERY SCHEDULE

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS AFTER DATE

OF RECEIPT OF WRITTEN

AWARD NOTICE
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(b\) The delivery dates or specific periods above are based on the
assumption that the successful offeror will receive notice of award by
\_\_\_\_\_\_\_\_ \[Contracting Officer insert date\]. Each delivery date
in the delivery schedule above will be extended by the number of
calendar days after the above date that the Contractor receives notice
of award; provided, that the Contractor promptly acknowledges receipt of
notice of award.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts other than those for construction
and architect-engineering services, when the delivery schedule will be
expressed in terms of specific calendar dates or specific periods and is
based upon an assumed date the contractor will receive notice of award.

**3.2.2.8-6/alt3** **Time of Delivery. Alternate III** (November 1997)

Substitute the following paragraph for paragraph(a) of the basic clause
and delete paragraph (b) in its entirety.

The Government requires delivery to be made according to the following
schedule:

REQUIRED DELIVERY SCHEDULE

\[Contracting Officer insert specific details\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS AFTER DATE

OF RECEIPT OF WRITTEN

AWARD NOTICE
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

The Government will evaluate equally, as regards time of delivery,
offers that propose delivery of each quantity within the applicable
delivery period specified above. Offers that propose delivery that will
not clearly fall within the applicable required delivery period
specified above may be rejected. The Government reserves the right to
award under either the required delivery schedule or the proposed
delivery schedule, when an offeror offers an earlier delivery schedule
than required above. If the offeror proposes no other delivery schedule,
the required delivery schedule above will apply.

OFFEROR\'S PROPOSED DELIVERY SCHEDULE

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS AFTER DATE

OF RECEIPT OF WRITTEN

AWARD NOTICE
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts other than those for construction
and architect-engineering services, when the delivery schedule will be
based upon the actual date the contractor receives a written notice of
award.

**3.2.2.8-7** **Desired and Required Time of Delivery** (November 1997)

\(a\) The Government desires delivery to be made according to the
following schedule:

DESIRED DELIVERY SCHEDULE

\[Contracting Officer insert specific details\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS AFTER

DATE OF CONTRACT

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

If the offeror is unable to meet the desired delivery schedule, it may,
without prejudicing evaluation of its offer, propose a delivery schedule
below. However, the offeror\'s proposed delivery schedule must not
extend the delivery period beyond the time for delivery in the
Government\'s required delivery schedule as follows:

REQUIRED DELIVERY SCHEDULE

\[Contracting Officer insert specific details\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS AFTER

DATE OF CONTRACT

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Offers that propose delivery of a quantity under such terms or
conditions that delivery will not clearly fall within the applicable
required delivery period specified above, may be rejected. If the
offeror proposes no other delivery schedule, the desired delivery
schedule above will apply.

OFFEROR\'S PROPOSED DELIVERY SCHEDULE

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS AFTER

DATE OF CONTRACT

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(b\) Attention is directed to the Contract Award provision of the
solicitation that provides that a written award or acceptance of offer
mailed or otherwise furnished to the successful offeror results in a
binding contract. The Government will mail or otherwise furnish to the
offeror an award or notice of award not later than the day the award is
dated. Therefore, the offeror shall compute the time available for
performance beginning with the actual date of award, rather than the
date the written notice of award is received from the Contracting
Officer through the ordinary mails. However, the Government will
evaluate an offer that proposes delivery based on the Contractor\'s date
of receipt of the contract or notice of award by adding (i) five
calendar days for delivery of the award through the ordinary mails, or
(ii) one working day if the solicitation states that the contract or
notice of award will be transmitted electronically. (The term \'working
day\' excludes weekends and U.S. Federal holidays.) If, as so computed,
the offered delivery date is later than the required delivery date, the
offer may be rejected.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts other than those for construction
and architect-engineering services when the delivery schedule will be
expressed in terms of a specified time and the delivery schedule is
based on the date of contract. The Contracting Officer should insert
appropriate information in the clause.

**3.2.2.8-7/alt1** **Desired and Required Time of Delivery. Alternate
I.** (November 1997)

Substitute the following paragraph (b) for paragraph (b)

\(b\) of the basic clause. Also substitute one of the following for the
third column of paragraph (a): \* \'on or before\'; \'during the months
\_\_\_\'; or \'not sooner than \_\_\_ ,or later than \_\_\_ \'as
headings for the third column of paragraph (a) of the basic clause.

\(a\) The Government desires delivery to be made according to the
following schedule:

DESIRED DELIVERY SCHEDULE

\[Contracting Officer insert specific details\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
ITEM NO. QUANTITY ON OR BEFORE\*
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

If the offeror is unable to meet the desired delivery schedule, it may,
without prejudicing evaluation of its offer, propose a delivery schedule
below. However, the offeror\'s proposed delivery schedule must not
extend the delivery period beyond the time for delivery in the
Government\'s required delivery schedule as follows:

REQUIRED DELIVERY SCHEDULE

\[Contracting Officer insert specific details\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
ITEM NO. QUANTITY ON OR BEFORE\*
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Offers that propose delivery of a quantity under such terms or
conditions that delivery will not clearly fall within the applicable
required delivery period specified above, may be rejected. If the
offeror proposes no other delivery schedule, the desired delivery
schedule above will apply.

OFFEROR\'S PROPOSED DELIVERY SCHEDULE

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
ITEM NO. QUANTITY ON OR BEFORE\*
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(b\) The delivery dates or specific periods above are based on the
assumption that the Government will make award by\_\_\_\_\_\_\_\_\_\_
\[Contracting Officer insert date\]. Each delivery date in the delivery
schedule above will be extended by the number of calendar days after the
above date that the contract is in fact awarded. Attention is directed
to the Contract Award provision of the solicitation that provides that a
written award or acceptance of offer mailed or otherwise furnished to
the successful offeror results in a binding contract. Therefore, the
offeror shall compute the time available for performance beginning with
the actual date of award, rather than the date the written notice of
award is received from the Contracting Officer through the ordinary
mails.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts other than those for construction
and architect-engineering services when the delivery schedule will be
expressed in terms of specific calendar dates or specific periods and is
based upon an assumed date of award.

**3.2.2.8-7/alt2** **Desired and Required Time of Delivery. Alternate
II** (November 1997)

Substitute the following (1) heading for the third column and (2)
paragraph (b) for paragraph (b) of the basic clause.

\(a\) The Government desires delivery to be made according to the
following schedule:

DESIRED DELIVERY SCHEDULE

\[Contracting Officer insert specific details\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS AFTER

RECEIPT OF WRITTEN

NOTICE OF AWARD
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

If the offeror is unable to meet the desired delivery schedule, it may,
without prejudicing evaluation of its offer, propose a delivery schedule
below. However, the offeror\'s proposed delivery schedule must not
extend the delivery period beyond the time for delivery in the
Government\'s required delivery schedule as follows:

REQUIRED DELIVERY SCHEDULE

\[Contracting Officer insert specific details\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS AFTER

RECEIPT OF WRITTEN

NOTICE OF AWARD
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Offers that propose delivery of a quantity under such terms or
conditions that delivery will not clearly fall within the applicable
required delivery period specified above, may be rejected. If the
offeror proposes no other delivery schedule, the desired delivery
schedule above will apply.

OFFEROR\'S PROPOSED DELIVERY SCHEDULE

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS AFTER

RECEIPT OF WRITTEN

NOTICE OF AWARD
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(b\) The delivery dates or specific periods above are based on the
assumption that the successful offeror will receive notice of award by
\_\_\_\_\_\_\_\_\_ \[Contracting Officer insert date\]. Each delivery
date in the delivery schedule above will be extended by the number of
calendar days after the above date that the Contractor receives notice
of award; provided, that the Contractor promptly acknowledges receipt of
notice of award.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts other than those for construction
and architect-engineering services when the delivery schedule is
expressed in terms of specific calendar dates or specific periods and is
based on an assumed date the contractor will receive notice of award.

**3.2.2.8-7/alt3** **Desired and Required Time of Delivery. Alternate
III.** (November 1997)

Delete paragraph (b) of the basic clause and substitute the following
heading for the third column .

\(a\) The Government desires delivery to be made according to the
following schedule:

DESIRED DELIVERY SCHEDULE

\[Contracting Officer insert specific details\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS AFTER

RECEIPT OF WRITTEN

NOTICE OF AWARD
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

If the offeror is unable to meet the desired delivery schedule, it may,
without prejudicing evaluation of its offer, propose a delivery schedule
below. However, the offeror\'s proposed delivery schedule must not
extend the delivery period beyond the time for delivery in the
Government\'s required delivery schedule as follows:

REQUIRED DELIVERY SCHEDULE

\[Contracting Officer insert specific details\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS AFTER

RECEIPT OF WRITTEN

NOTICE OF AWARD
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Offers that propose delivery of a quantity under such terms or
conditions that delivery will not clearly fall within the applicable
required delivery period specified above, may be rejected. If the
offeror proposes no other delivery schedule, the desired delivery
schedule above will apply.

OFFEROR\'S PROPOSED DELIVERY SCHEDULE

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

ITEM NO. QUANTITY WITHIN DAYS AFTER

RECEIPT OF WRITTEN

NOTICE OF AWARD
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts other than those for construction
and architect-engineering services when the delivery schedule is to be
based on the actual date the contractor received a written notice of
award.

**3.2.3-1** **Cost Accounting Standards Notices and Certification**
(April 1996)

Note: This notice does not apply to small businesses or foreign
governments. This notice is in three parts, identified as the following
subsections I through III.

Offerors shall examine each part and provide the requested information
in order to determine Cost Accounting Standards (CAS) requirements
applicable to any resultant contract.

I. DISCLOSURE STATEMENT-COST ACCOUNTING PRACTICES AND CERTIFICATION

\(a\) Any contract in excess of \$500,000 resulting from this Screening
Information Request (SIR), except contracts in which the price
negotiated is based on

\(1\) established catalog or market prices of commercial items sold in
substantial quantities to the general public, or

\(2\) prices set by law or regulation, will be subject to the
requirements of CAS rules, except for those contracts which are exempt
as specified in CAS rules.

\(b\) Any offeror submitting a offer which, if accepted, will result in
a contract subject to the requirements of CAS rules must, as a condition
of contracting, submit a Disclosure Statement as required by CAS rules.
The Disclosure Statement must be submitted as a part of the offer under
this SIR unless the offeror has already submitted a Disclosure Statement
disclosing the practices used in connection with the pricing of this
offer. If an applicable Disclosure Statement has already been submitted,
the offeror may satisfy the requirement for submission by providing the
information requested in paragraph (c) of Part I of this provision.

Caution: In the absence of specific regulations or agreement, a practice
disclosed in a Disclosure Statement shall not, by virtue of such
disclosure, be deemed to be a proper, approved, or agreed-to practice
for pricing offers or accumulating and reporting contract performance
cost data.

\(c\) Check the appropriate box below:

\[ \] (1) Certificate of Concurrent Submission of Disclosure Statement.

The offeror hereby certifies that, as a part of the offer, copies of the
Disclosure Statement have been submitted as follows: (i) Original and
one copy to the cognizant Contracting Officer (CO), and (ii) One copy to
the cognizant contract auditor. (Disclosure must be on Form No. CASB
DS-1. Forms may be obtained from the cognizant CO.)

Date of Disclosure Statement
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Name and Address of Cognizant ACO where filed
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

The offeror further certifies that practices used in estimating costs in
pricing this offer are consistent with the cost accounting practices
disclosed in the Disclosure Statement.

\[ \] (2) Certificate of Previously Submitted Disclosure Statement.

The offeror hereby certifies that Disclosure Statement was filed as
follows:

Date of Disclosure Statement:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Name and Address of Cognizant CO where filed:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

The offeror further certifies that the practices used in estimating
costs in pricing this offer are consistent with the cost accounting
practices disclosed in the applicable disclosure statement.

\[ \] (3) Certificate of Monetary Exemption.

The offeror hereby certifies that the offeror, together with all
divisions, subsidiaries, and affiliates under common control, did not
receive net awards of negotiated prime contracts and subcontracts
subject to CAS totaling more than \$25 million (of which at least one
award exceeded \$1 million) in the cost accounting period immediately
preceding the period in which this proposal was submitted. The offeror
further certifies that if such status changes before an award resulting
from this offer, the offeror will advise the Contracting Officer
immediately.

\[ \] (4) Certificate of Interim Exemption.

The offeror hereby certifies that

\(i\) the offeror first exceeded the monetary exemption for disclosure,
as defined in (3) of this subsection, in the cost accounting period
immediately preceding the period in which this offer was submitted and

\(ii\) in accordance with CAS rules, the offeror is not yet required to
submit a Disclosure Statement.

The offeror further certifies that if an award resulting from this offer
has not been made within 90 days after the end of that period, the
offeror will immediately submit a revised certificate to the Contracting
Officer, in the form specified under subparagraph (c)(1) or (c)(2) of
Part I of this provision, as appropriate, to verify submission of a
completed Disclosure Statement.

Caution: Offerors currently required to disclose because they were
awarded a CAS-covered prime contract or subcontract of \$25 million or
more in the current cost accounting period may not claim this exemption
(4). Further, the exemption applies only in connection with offers
submitted before expiration of the 90-day period following the cost
accounting period in which the monetary exemption was exceeded.

II\. COST ACCOUNTING STANDARDS-ELIGIBILITY FOR MODIFIED CONTRACT
COVERAGE

If the offeror is eligible to use the modified provisions of CAS rules
and elects to do so, the offeror shall indicate by checking the box
below. Checking the box below shall mean that the resultant contract is
subject to the Disclosure and Consistency of Cost Accounting Practices
clause in lieu of the Cost Accounting Standards clause.

\[ \] The offeror hereby claims an exemption from the Cost Accounting
Standards clause under the provisions of CAS rules and certifies that
the offeror is eligible for use of the Disclosure and Consistency of
Cost Accounting Practices clause because during the cost accounting
period immediately preceding the period in which this offer was
submitted, the offeror received less than \$25 million in awards of
CAS-covered prime contracts and subcontracts, or the offeror did not
receive a single CAS-covered award exceeding \$1 million. The offeror
further certifies that if such status changes before an award resulting
from this proposal, the offeror will advise the Contracting Officer
immediately.

Caution: An offeror may not claim the above eligibility for modified
contract coverage if this offer is expected to result in the award of a
CAS-covered contract of \$25 million or more or if, during its current
cost accounting period, the offeror has been awarded a single
CAS-covered prime contract or subcontract of \$25 million or more.

III\. ADDITIONAL COST ACCOUNTING STANDARDS APPLICABLE TO EXISTING
CONTRACTS

The offeror shall indicate below whether award of the contemplated
contract would, in accordance with subparagraph (a)(3) of the Cost
Accounting Standards clause, require a change in established cost
accounting practices affecting existing contracts and subcontracts.

\_\_\_Yes \_\_\_No

(End of provision)

PRESCRIPTION:

Should be used in SIR\'s and contracts which are cost-type, subject to
Cost Accounting Standards as specified in 48 CFR 99, Subpart 9903.201
with the following exceptions: (a) contracts awarded on the basis of
price alone; (b) negotiated contracts and subcontracts under \$500,000;
(c) contracts and subcontracts with small businesses; (d) in which price
is set by law or regulation; (e) for commercial items; (f) to be
executed outside the U.S., its territories or possessions; or (g) with
educational institutions other than those to be performed by Federally
Funded Research and Development Centers.

**3.2.3-2** **Cost Accounting Standards** (April 1996)

\(a\) Unless the contract is exempt from CAS rules, the provisions of
CAS rules are incorporated herein by reference and the Contractor, in
connection with this contract, shall\--

\(1\) (CAS-covered Contracts Only) By submission of a Disclosure
Statement, disclose in writing the Contractor\'s cost accounting
practices as required by CAS rules, including methods of distinguishing
direct costs from indirect costs and the basis used for allocating
indirect costs. The practices disclosed for this contract shall be the
same as the practices currently disclosed and applied on all other
contracts and subcontracts being performed by the Contractor and which
contain a Cost Accounting Standards (CAS) clause. If the Contractor has
notified the Contracting Officer that the Disclosure Statement contains
trade secrets and commercial or financial information which is
privileged and confidential, the Disclosure Statement shall be protected
and shall not be released outside of the Government.

\(2\) Follow consistently the Contractor\'s cost accounting practices in
accumulating and reporting contract performance cost data concerning
this contract. If any change in cost accounting practices is made for
the purposes of any contract or subcontract subject to CAS requirements,
the change must be applied prospectively to this contract and the
Disclosure Statement must be amended accordingly. If the contract price
or cost allowance of this contract is affected by such changes,
adjustment shall be made in accordance with subparagraph (a)(4) or
(a)(5) of this clause, as appropriate.

\(3\) Comply with all CAS, including any modifications and
interpretations indicated thereto contained in CAS rules, in effect on
the date of award of this contract or, if the Contractor has submitted
cost or pricing data, on the date of final agreement on price as shown
on the Contractor\'s signed certificate of current cost or pricing data.
The Contractor shall also comply with any CAS (or modifications to CAS)
which hereafter become applicable to a contract or subcontract of the
Contractor. Such compliance shall be required prospectively from the
date of applicability to such contract or subcontract.

\(4\)

\(i\) Agree to an equitable adjustment as provided in the Changes clause
of this contract if the contract cost is affected by a change which,
pursuant to subparagraph (a)(3) of this clause, the Contractor is
required to make to the Contractor\'s established cost accounting
practices.

\(ii\) Negotiate with the Contracting Officer to determine the terms and
conditions under which a change may be made to a cost accounting
practice, other than a change made under other provisions of
subparagraph (a)(4) of this clause; provided that no agreement may be
made under this provision that will increase costs paid by the United
States.

\(iii\) When the parties agree to a change to a cost accounting
practice, other than a change under subdivision (a)(4)(i) of this
clause, negotiate an equitable adjustment as provided in the Changes
clause of this contract.

\(5\) Agree to an adjustment of the contract price or cost allowance, as
appropriate, if the Contractor or a subcontractor fails to comply with
an applicable Cost Accounting Standard, or to follow any cost accounting
practice consistently and such failure results in any increased costs
paid by the United States. Such adjustment shall provide for recovery of
the increased costs to the United States, together with interest thereon
computed in accordance with the \"Interest\" clause, from the time the
payment by the United States was made to the time the adjustment is
effected. In no case shall the Government recover costs greater than the
increased cost to the Government, in the aggregate, on the relevant
contracts subject to the price adjustment, unless the Contractor made a
change in its cost accounting practices of which it was aware or should
have been aware at the time of price negotiations and which it failed to
disclose to the Government.

\(b\) If the parties fail to agree whether the Contractor or a
subcontractor has complied with an applicable CAS rule and as to any
cost adjustment demanded by the United States, such failure to agree
will constitute a dispute.

\(c\) The Contractor shall permit any authorized representatives of the
Government to examine and make copies of any documents, papers, or
records relating to compliance with the requirements of this clause.

\(d\) The Contractor shall include in all negotiated subcontracts which
the Contractor enters into, the substance of this clause, except
paragraph (b), and shall require such inclusion in all other
subcontracts, of any tier, including the obligation to comply with all
CAS in effect on the subcontractor\'s award date or if the subcontractor
has submitted cost or pricing data, on the date of final agreement on
price as shown on the subcontractor\'s signed Certificate of Current
Cost or Pricing Data. This requirement shall apply only to negotiated
subcontracts in excess of \$500,000 where the price negotiated is not
based on-

\(1\) Established catalog or market prices of commercial items sold in
substantial quantities to the general public; or

\(2\) Prices set by law or regulation, and except that the requirement
shall not apply to negotiated subcontracts otherwise exempt from the
requirement to include a CAS clause as specified in CAS rules.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts which are cost-type, subject to
Cost Accounting Standards as specified in 48 CFR 99, Subpart 9903.201
with the following exceptions: (a) contracts awarded on the basis of
price alone; (b) negotiated contracts and subcontracts under \$500,000;
(c) contracts and subcontracts with small businesses; (d) in which price
is set by law or regulation; (e) for commercial items, (f) to be
executed outside the U.S., its territories or possessions, (g) with
educational institutions other than those to be performed by Federally
Funded Research and Development Centers; (h) contracts and subcontracts
subject to modified CAS coverage in accordance with 48 CFR 9903.201-2 or
(i) if clause 3.2.3-4\" Consistency in Cost Accounting Practices\" is
used.

**3.2.3-3** **Disclosure and Consistency of Cost Accounting Practices**
(April 1996)

\(a\) The Contractor, in connection with this contract, shall\--

\(1\) Comply with the requirements of CAS rules, Consistency in
Estimating, Accumulating, and Reporting Costs; Consistency in Allocating
Costs Incurred for the Same Purpose; Accounting for Unallowable Costs;
and Cost Accounting Standard-Cost Accounting Period, in effect on the
date of award of this contract as indicated in CAS rules.

\(2\) (CAS-covered Contracts Only) If it is a business unit of a company
required to submit a Disclosure Statement, disclose in writing its cost
accounting practices as required by CAS rules. If the Contractor has
notified the Contracting Officer that the Disclosure Statement contains
trade secrets and commercial or financial information which is
privileged and confidential, the Disclosure Statement shall be protected
and shall not be released outside of the Government.

\(3\)

\(i\) Follow consistently the Contractor\'s cost accounting practices. A
change to such practices may be proposed, however, by either the
Government or the Contractor, and the Contractor agrees to negotiate
with the Contracting Officer the terms and conditions under which a
change may be made. After the terms and conditions under which the
change is to be made have been agreed to, the change must be applied
prospectively to this contract, and the Disclosure Statement, if
affected, must be amended accordingly.

\(ii\) The Contractor shall, when the parties agree to a change to a
cost accounting practice and the Contracting Officer has made the
finding required CAS rules, that the change is desirable and not
detrimental to the interests of the Government, negotiate an equitable
adjustment as provided in the Changes clause of this contract. In the
absence of the required finding, no agreement may be made under this
contract clause that will increase costs paid by the United States.

\(4\) Agree to an adjustment of the contract price or cost allowance, as
appropriate, if the Contractor or a subcontractor fails to comply with
the applicable CAS or to follow any cost accounting practice, and such
failure results in any increased costs paid by the United States. Such
adjustment shall provide for recovery of the increased costs to the
United States together with interest thereon computed at the annual rate
of interest established under the Internal Revenue Code of 1986 (26
U.S.C. 6621), from the time the payment by the United States was made to
the time the adjustment is effected.

\(b\) If the parties fail to agree whether the Contractor has complied
with an applicable CAS, rule, or regulation as specified in CAS rules
and as to any cost adjustment demanded by the United States, such
failure to agree will constitute a dispute.

\(c\) The Contractor shall permit any authorized representatives of the
Government to examine and make copies of any documents, papers, and
records relating to compliance with the requirements of this clause.

\(d\) The Contractor shall include in all negotiated subcontracts, which
the Contractor enters into, the substance of this clause, except
paragraph (b), and shall require such inclusion in all other
subcontracts of any tier, except that-

\(1\) If the subcontract is awarded to a business unit which pursuant
CAS rules is required to follow all CAS, the clause entitled \"Cost
Accounting Standards\", shall be inserted in lieu of this clause; or

\(2\) This requirement shall apply only to negotiated subcontracts in
excess of \$500,000 where the price negotiated is not based

\(i\) Established catalog or market prices of commercial items sold in
substantial quantities to the general public; or

\(ii\) Price set by law or regulation; or

\(3\) The requirement shall not apply to negotiated subcontracts
otherwise exempt from the requirement to include a CAS clause as
specified CAS rules.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts which are cost-type, where the
offeror certifies its eligibility for or is otherwise subject to
modified Cost Accounting Standards as specified in 48 CFR 99, Subpart
9903.201-2 with the following exceptions: (a) contracts awarded on the
basis of price alone; (b) negotiated contracts and subcontracts under
\$500,000; (c) contracts and subcontracts with small businesses; (d) in
which price is set by law or regulation; (e) for commercial items; (f)
to be executed outside the U.S., its territories or possessions; or (g)
with educational institutions other than those to be performed by
Federally Funded Research and Development Centers.

**3.2.3-4** **Consistency in Cost Accounting Practices** (April 1996)

The Contractor agrees that it will consistently follow the cost
accounting practices disclosed on Form CASB DS-1 in estimating,
accumulating and reporting costs under this contract. In the event the
Contractor fails to follow such practices, it agrees that the contract
price shall be adjusted, together with interest, if such failure results
in increased cost paid by the U.S. Government. Interest shall be
computed in accordance with the \"Interest\" clause from the time
payment by the Government was made to the time adjustment is effected.
The Contractor agrees that the Disclosure Statement filed with the U.K.
Ministry of Defence shall be available for inspection and use by
authorized representatives of the United States Government.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts that are exempt from clause
3.2.3-2 solely on the basis that contract is awarded to a United Kingdom
contractor to be performed substantially in the United Kingdom.

**3.2.3-5** **Administration of Cost Accounting Standards** (April 1996)

For the purpose of administering the Cost Accounting Standards (CAS)
requirements under this contract, the Contractor shall take the steps
outlined in paragraphs (a) through (g) of this clause:

\(a\) Submit to the Contracting Officer a description of any cost
accounting practice change, the total potential impact of the change on
contracts containing a CAS clause, and a general dollar magnitude of the
change which identifies the potential shift of costs between CAS-covered
contracts by contract type (i.e., firm-fixed-price, incentive,
cost-plus-fixed fee, etc.) and other contractor business activity. As
related to CAS-covered contracts, the analysis should identify the
potential impact on funds of the various Agencies/Departments (i.e.,
Department of Energy, National Aeronautics and Space Administration,
Army, Navy, Air Force, other Department of Defense, other Government) as
follows:

\(1\) For any change in cost accounting practices required to comply
with a new or modified CAS in accordance with subparagraph (a)(3) and
subdivision (a)(4)(i) of the clause \"Cost Accounting Standards\" within
60 days (or such other date as may be mutually agreed to) after award of
a contract requiring this change.

\(2\) For any change in cost accounting practices proposed in accordance
with subdivision (a)(4)(ii) or (iii) of the clause \"Cost Accounting
Standards\" or with subparagraph (a)(3) of the clause \"Disclosure and
Consistency of Cost Accounting Practices\" not less than 60 days (or
such other date as may be mutually agreed to) before the effective date
of the proposed change.

\(3\) For any failure to comply with an applicable CAS or to follow a
disclosed practice (as contemplated by subparagraph (a)(5) of the clause
\"Cost Accounting Standards\" or by subparagraph (a)(4) of the clause
\"Disclosure and Consistency of Cost Accounting Practice\":

\(i\) Within 60 days (or such other date as may be mutually agreed to)
after the date of agreement with the initial finding of noncompliance,
or

\(ii\) In the event of Contractor disagreement with the initial finding
of noncompliance, within 60 days of the date the Contractor is notified
by the Contracting Officer of the determination of noncompliance.

\(b\) After an Contracting Officer determination of materiality, submit
a cost impact proposal in the form and manner specified by the
Contracting Officer within 60 days (or such other date as may be
mutually agreed to) after the date of determination of the adequacy and
compliance of a change submitted pursuant to paragraph (a) of this
clause. The cost impact proposal shall be in sufficient detail to permit
evaluation, determination, and negotiation of the cost impact upon each
separate CAS-covered contract and subcontract.

\(1\) Cost impact proposals submitted for changes in cost accounting
practices required to comply with a new CAS in accordance with
subparagraph (a)(3) and subdivision (a)(4)(i) of the clause \"Cost
Accounting Standards\" shall identify the applicable standard and all
contracts and subcontracts containing the clause in this contract
entitled Cost Accounting Standards, which have an award date before the
effective date of that standard.

\(2\) Cost impact proposals submitted for any change in cost accounting
practices proposed in accordance with subdivisions (a)(4) (ii) or (iii)
of the clause \"Cost Accounting Standards\" or with subparagraph (a)(3)
of the clause \"Disclosure and Consistency of Cost Accounting
Practices\" shall identify all contracts and subcontracts containing the
clause \"Cost Accounting Standards\" and \"Disclosure and Consistency of
Cost Accounting Practices.\"

\(3\) Cost impact proposals submitted for failure to comply with an
applicable CAS or to follow a disclosed practice as contemplated by
subparagraph (a)(5) of the clause \"Cost Accounting Standards\" or by
subparagraph (a)(4) of the clause \"Disclosure and Consistency of Cost
Accounting Practices\" shall identify the cost impact on each separate
CAS covered contract from the date of failure to comply until the
noncompliance is corrected.

\(c\) If the submissions required by paragraphs (a) and (b) of this
clause are not submitted within the specified time, or any extension
granted by the Contracting Officer, an amount not to exceed 10 percent
of each subsequent amount determined payable related to the
Contractor\'s CAS-covered prime contracts, up to the estimated general
dollar magnitude of the cost impact, may be withheld until such time as
the required submission has been provided in the form and manner
specified by the Contracting Officer.

\(d\) Agree to appropriate contract and subcontract amendments to
reflect adjustments established in accordance with subparagraphs (a)(4)
and (a)(5) of the CAS clause or with subparagraphs (a)(3) or (a)(4) of
the \"Disclosure and Consistency of Cost Accounting Practices\" clause.

\(e\) For all subcontracts subject either to the CAS clause or to the
Disclosure and Consistency of Cost Accounting Practices clause-

\(1\) So state in the body of the subcontract, in the letter of award,
or in both (self-deleting clauses shall not be used);

\(2\) Include the substance of this clause in all negotiated
subcontracts. In addition, within 30 days after award of the
subcontract, submit the following information to the Contractor\'s
cognizant contract administration office for transmittal to the contract
administrative office cognizant of the subcontractor\'s facility:

\(i\) Subcontractor\'s name and subcontract number.

\(ii\) Dollar amount and date of award.

\(iii\) Name of Contractor making the award.

\(iv\) Any changes the subcontractor has made or proposes to make to
cost accounting practices that affect prime contracts or subcontracts
containing the CAS clause or Disclosure and Consistency of Cost
Accounting Practices clause, unless these changes have already been
reported. If award of the subcontract results in making one or more CAS
effective for the first time, this fact shall also be reported.

\(f\) Notify the Contracting Officer in writing of any adjustments
required to subcontracts under this contract and agree to an adjustment,
based on them, to this contract price or estimated cost and fee. This
notice is due within 30 days after proposed subcontract adjustments are
received and shall include a proposal for adjusting the higher tier
subcontract or the prime contract appropriately.

\(g\) For subcontracts containing the CAS clause, require the
subcontractor to comply with all Standards in effect on the date of
award or of final agreement on price, as shown on the subcontractor\'s
signed Certificate of Current Cost or Pricing Data, whichever is
earlier.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts that contain clause 3.2.3-2
\"Cost Accounting Standards\" or clause 3.2.3-3 \"Disclosure and
Consistency of Cost Accounting Practices.\"

**3.2.4-1** **Type of Contract** (April 1996)

The FAA contemplates award of a \_\_\_\_\_\_\_\_\_\_\_\_ \[Contracting
Officer insert specific type(s) of contract\] contract resulting from
this Screening Information Request.

(End of provision)

PRESCRIPTION:

Should be used in SIR\'s unless it is for information or planning
purposes. The Contracting Officer should insert appropriate information
in the clause.

**3.2.4-2** **Fixed-Priced Contracts with Economic Price
Adjustment-Standard Supplies** (April 1996)

\(a\) The Contractor warrants that the unit price stated in the
\"Schedule\" for \_\_\_\_\_\_\_\_ \[insert \"Schedule\" line item
number(s)\] is not in excess of the Contractor\'s applicable established
price in effect on the contract date for like quantities of the same
item. The term unit price excludes any part of the price directly
resulting from requirements for preservation, packaging, or packing
beyond standard commercial practice. The term established price means a
price that

\(1\) is an established catalog or market price for a commercial item
sold in substantial quantities to the general public, and

\(2\) is the net price after applying any standard trade discounts
offered by the Contractor.

\(b\) The Contractor shall promptly notify the Contracting Officer of
the amount and effective date of each decrease in any applicable
established price. Each corresponding contract unit price shall be
decreased by the same percentage that the established price is
decreased. The decrease shall apply to those items delivered on and
after the effective date of the decrease in the Contractor\'s
established price, and this contract shall be modified accordingly. The
Contractor shall certify

\(1\) on each invoice that each unit price stated in it reflects all
decreases required by this clause or

\(2\) on the final invoice that all required price decreases have been
applied as required by this clause.

\(c\) If the Contractor\'s applicable established price is increased
after the contract date, the corresponding contract unit price shall be
increased, upon the Contractor\'s written request to the Contracting
Officer, by the same percentage that the established price is increased,
and the contract shall be modified accordingly, subject to the following
limitations:

\(1\) The aggregate of the increases in any contract unit price under
this clause shall not exceed 10 percent of the original contract unit
price.

\(2\) The increased contract unit price shall be effective:

\(i\) on the effective date of the increase in the applicable
established price if the Contracting Officer receives the Contractor\'s
written request within 10 days thereafter or

\(ii\) if the written request is received later, on the date the
Contracting Officer receives the request.

\(3\) The increased contract unit price shall not apply to quantities
scheduled under the contract for delivery before the effective date of
the increased contract unit price, unless failure to deliver before that
date results from causes beyond the control and without the fault or
negligence of the Contractor.

\(4\) No modification increasing a contract unit price shall be executed
under this paragraph (c) until the Contracting Officer verifies the
increase in the applicable established price.

\(5\) Within 30 days after receipt of the Contractor\'s written request,
the Contracting Officer may cancel, without liability to either party,
any undelivered portion of the contract items affected by the requested
increase.

\(d\) During the time allowed for the cancellation provided for in
subparagraph (c)(5) above, and thereafter if there is no cancellation,
the Contractor shall continue deliveries according to the contract
delivery schedule, and the Government shall pay for such deliveries at
the contract unit price, increased to the extent provided by paragraph
(c) above.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts if the Contracting Officer
determines that it is necessary to protect the contractor and the
Government against significant fluctuations in labor or material costs
or to provide for contractor price adjustments in the event of changes
in the contractor\'s established prices and: a. a fixed price type
contract is contemplated; and b. the requirement is for standard
supplies that have an established catalogue or market price.

**3.2.4-3** **Fixed-price Contracts with Economic Price
Adjustment-Semistandard Supplies** (April 1996)

\(a\) The Contractor warrants that the supplies identified as line items
\_\_\_\_\_\_\_\_\_ \[offeror insert \"Schedule\" line item number\] in
the \"Schedule\" are, except for modifications required by the contract
specifications, supplies for which it has an established price. The term
established price means a price that

\(1\) is an established catalog or market price for a commercial item
sold in substantial quantities to the general public, and

\(2\) is the net price after applying any standard trade discounts
offered by the Contractor. The Contractor further warrants that, as of
the date of this contract, any difference between the unit prices stated
in the contract for these line items and the Contractor\'s established
prices for like quantities of the nearest commercial equivalents are due
to compliance with contract specifications and with any contract
requirements for preservation, packaging, and packing beyond standard
commercial practice.

\(b\) The Contractor shall promptly notify the Contracting Officer of
the amount and effective date of each decrease in any applicable
established price. Each corresponding contract unit price (exclusive of
any part of the unit price that reflects modifications resulting from
compliance with specifications or with requirements for preservation,
packaging, and packing beyond standard commercial practice) shall be
decreased by the same percentage that the established price is
decreased. The decrease shall apply to those items delivered on and
after the effective date of the decrease in the Contractor\'s
established price, and this contract shall be modified accordingly. The
Contractor shall certify:

\(1\) on each invoice that each unit price stated in it reflects all
decreases required by this clause or

\(2\) in the final invoice that all required price decreases have been
applied as required by this clause.

\(c\) If the Contractor\'s applicable established price is increased
after the contract date, the corresponding contract unit price
(exclusive of any part of the unit price resulting from compliance with
specifications or with requirements for preservation, packaging, and
packing beyond standard commercial practice) shall be increased, upon
the Contractor\'s written request to the Contracting Officer, by the
same percentage that the established price is increased, and the
contract shall be modified accordingly, subject to the following
limitations:

\(1\) The aggregate of the increases in any contract unit price under
this clause shall not exceed 10 percent of the original contract unit
price.

\(2\) The increased contract unit price shall be effective:

\(i\) on the effective date of the increase in the applicable
established price if the Contracting Officer receives the Contractor\'s
written request within 10 days thereafter or

\(ii\) if the written request is received later, on the date the
Contracting Officer receives the request.

\(3\) The increased contract unit price shall not apply to quantities
scheduled under the contract for delivery before the effective date of
the increased contract unit price, unless failure to deliver before that
date results from causes beyond the control and without the fault or
negligence of the Contractor.

\(4\) No modification increasing a contract unit price shall be executed
under this paragraph (c) until the Contracting Officer verifies the
increase in the applicable established price.

\(5\) Within 30 days after receipt of the Contractor\'s written request,
the Contracting Officer may cancel, without liability to either party,
any undelivered portion of the contract items affected by the requested
increase.

\(d\) During the time allowed for the cancellation provided for in
subparagraph (c)(5) above, and thereafter if there is no cancellation,
the Contractor shall continue deliveries according to the contract
delivery schedule, and the Government shall pay for such deliveries at
the contract unit price, increased to the extent provided by paragraph
(c) above.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts if the Contracting Officer
determines that it is necessary to protect the contractor and the
Government against significant fluctuations in labor or material costs
or to provide for contractor price adjustments in the event of changes
in the contractor\'s established prices and: (a) a fixed price type
contract is contemplated; and (b) the requirement is for semistandard
supplies for which the prices can be reasonably related to the prices of
nearly equivalent standard supplies that have an established catalogue
or market price. The Contracting Officer should insert appropriate
information in the clause.

**3.2.4-4** **Fixed-Price Contracts with Economic Price Adjustment-Labor
and Material** (April 1996)

\(a\) The Contractor shall notify the Contracting Officer if, at any
time during contract performance, the rates of pay for labor (including
fringe benefits) or the unit prices for material shown in the
\"Schedule\" either increase or decrease. The Contractor shall furnish
this notice within 60 days after the increase or decrease, or within any
additional period that the Contracting Officer may approve in writing,
but not later than the date of final payment under this contract. The
notice shall include the Contractor\'s proposal for an adjustment in the
contract unit prices to be negotiated under paragraph (b) below, and
shall include, in the form required by the Contracting Officer,
supporting data explaining the cause, effective date, and amount of the
increase or decrease and the amount of the Contractor\'s adjustment
proposal.

\(b\) Promptly after the Contracting Officer receives the notice and
data under paragraph (a) above, the Contracting Officer and the
Contractor shall negotiate a price adjustment in the contract unit
prices and its effective date. However, the Contracting Officer may
postpone the negotiations until an accumulation of increases and
decreases in the labor rates (including fringe benefits) and unit prices
of material shown in the \"Schedule\" results in an adjustment allowable
under subparagraph (c)(3) below. The Contracting Officer shall modify
this contract

\(1\) to include the price adjustment and its effective date and

\(2\) to revise the labor rates (including fringe benefits) or unit
prices of material as shown in the \"Schedule\" to reflect the increases
or decreases resulting from the adjustment.

The Contractor shall continue performance pending agreement on, or
determination of, any adjustment and its effective date.

\(c\) Any price adjustment under this clause is subject to the following
limitations:

\(1\) Any adjustment shall be limited to the effect on unit prices of
the increases or decreases in the rates of pay for labor (including
fringe benefits) or unit prices for material shown in the Schedule.
There shall be no adjustment for:

\(i\) supplies or services for which the production cost is not affected
by such changes,

\(ii\) changes in rates or unit prices other than those shown in the
Schedule, or

\(iii\) changes in the quantities of labor or material used from those
shown in the \"Schedule\" for each item.

\(2\) No upward adjustment shall apply to supplies or services that are
required to be delivered or performed before the effective date of the
adjustment, unless the Contractor\'s failure to deliver or perform
according to the delivery schedule results from causes beyond the
Contractor\'s control and without its fault or negligence.

\(3\) There shall be no adjustment for any change in rates of pay for
labor (including fringe benefits) or unit prices for material which
would not result in a net change of at least 3 percent of the
then-current total contract price. This limitation shall not apply,
however, if, after final delivery of all contract line items, either
party requests an adjustment under paragraph (b) above.

\(4\) The aggregate of the increases in any contract unit price made
under this clause shall not exceed 10 percent of the original unit
price. There is no percentage limitation on the amount of decreases that
may be made under this clause.

\(d\) The Contractor shall include with the final invoice a
certification that the Contractor either (1) has not experienced a
decrease in rates of pay for labor (including fringe benefits) or unit
prices for material shown in the \"Schedule\" or (2) has given notice of
all such decreases in compliance with paragraph (a) above.

\(e\) The Contracting Officer may examine the Contractor\'s books,
records, and other supporting data relevant to the cost of labor
(including fringe benefits) and material during all reasonable times
until the end of 3 years after the date of final payment under this
contract.

(End of clause)

PRESCRIPTION:

Should used in SIR\'s and contracts if the Contracting Officer
determines that it is necessary to protect the contractor and the
Government against significant fluctuations in labor or material costs
or to provide for contractor price adjustments in the event of changes
in the contractor\'s established prices and: (a) a fixed price type
contract is contemplated; (b) there is no major element of design
engineering or development work involved; and (c) one or more
identifiable labor or material cost factors are subject to change.

**3.2.4-5** **Allowable Cost and Payment** (April 2001)

\(a\) Invoicing. The Government shall make payments to the Contractor
when requested as work progresses, but (except for small business
concerns) not more often than once every 2 weeks, in amounts determined
to be allowable by the Contracting Officer in accordance with the
Federal Aviation Administration\'s (FAA) \"Contract Cost Principles\" in
effect on the date of this contract and the terms of this contract (upon
request, the Contracting Officer will provide a copy of the FAA Contract
Cost Principles). The Contractor may submit to an authorized
representative of the Contracting Officer, in such form and reasonable
detail as the representative may require, an invoice or voucher
supported by a statement of the claimed allowable cost for performing
this contract. Any payments for costs under this contract, particularly
for costs of Indirect Rates under paragraph (d), shall be subject to the
provisions of the \"Limitation of Costs\" clause, or the \"Limitation of
Funds\" clause, if applicable. The Contractor shall be responsible to
manage and control the allowable cost of performance of the contract,
such that payments for any allowable costs, including Indirect Rates
under paragraph (d), shall not exceed the estimated cost set forth in
the schedule, or the funded amount, less an allowance for fee, if the
contract is incrementally funded.

\(b\) Reimbursing costs.

\(1\) For the purpose of reimbursing allowable costs (except as provided
in subparagraph (2) below, with respect to pension, deferred profit
sharing, and employee stock ownership plan contributions), the term
costs includes only:

\(i\) Those costs the Contractor has incurred and recorded at the time
of the request for reimbursement,;

\(ii\) When the Contractor is not delinquent in paying costs of contract
performance in the ordinary course of business, costs incurred, but not
necessarily paid for-

\(A\) Materials issued from the Contractor\'s inventory and placed in
the production process for use on the contract;

\(B\) Direct labor;

\(C\) Direct travel;

\(D\) Other direct in-house costs; and

\(E\) Properly allocable and allowable indirect costs, as shown in the
records maintained by the Contractor for purposes of obtaining
reimbursement under FAA contracts; and

\(iii\) The amount of payments that have been paid to the Contractor\'s
subcontractors under similar cost standards.

\(2\) Contractor contributions to any pension or other post retirement
benefit, profit-sharing or employee stock ownership plan funds that are
paid quarterly or more often may be included in indirect costs for
payment purposes: Provided, that the Contractor pays the contribution to
the fund within 30 days after the close of the period covered. Payments
made 31 days or more after the close of a period shall not be included
until the Contractor actually makes the payment. Accrued costs for such
contributions that are paid less often than quarterly shall be excluded
from indirect costs for payment purposes until the Contractor actually
makes the payment.

\(3\) Notwithstanding the audit and adjustment of invoices or vouchers
under paragraph (g) below, allowable indirect costs under this contract
shall be obtained by applying indirect cost rates established in
accordance with paragraph (d) below.

\(4\) Any statements in specifications or other documents incorporated
in this contract by reference designating performance of services or
furnishing of materials at the Contractor\'s expense or at no cost to
the Government shall be disregarded for purposes of cost-reimbursement
under this clause.

\(c\) Small business concerns. A small business concern may be paid more
often than every 2 weeks and may invoice and be paid for recorded costs
for items or services purchased directly for the contract, even though
the concern has not yet paid for those items or services.

\(d\) Final indirect cost rates.

\(1\) Final annual indirect cost rates and the appropriate bases shall
be established for the period covered by the indirect cost rate
proposal.

\(2\) The Contractor shall, within 90 days after the expiration of each
of its fiscal years, or by a later date approved by the Contracting
Officer, submit to the cognizant Contracting Officer responsible for
negotiating its final indirect cost rates and, if required by agency
procedures, to the cognizant audit activity proposed final indirect cost
rates for that period and supporting cost data specifying the contract
and/or subcontract to which the rates apply. The proposed rates shall be
based on the Contractor\'s actual cost experience for that period. The
appropriate Government representative and Contractor shall establish the
final indirect cost rates as promptly as practical after receipt of the
Contractor\'s proposal.

\(3\) The Contractor and the appropriate Government representative shall
execute a written understanding setting forth the final indirect cost
rates. The understanding shall specify (i) the agreed-upon final annual
indirect cost rates, (ii) the bases to which the rates apply, (iii) the
periods for which the rates apply, (iv) any specific indirect cost items
treated as direct costs in the settlement, and (v) the affected contract
and/or subcontract, identifying any with advance agreements or special
terms and the applicable rates. The understanding shall not change any
monetary ceiling, contract obligation, or specific cost allowance or
disallowance provided for in this contract. The understanding is
incorporated into this contract upon execution.

\(4\) Failure by the parties to agree on a final annual indirect cost
rate may be the basis of a claim under the \"Contract Disputes\" clause.

\(e\) Billing rates. Until final annual indirect cost rates are
established for any period, the Government shall reimburse the
Contractor at billing rates established by the Contracting Officer or by
an authorized representative (the cognizant auditor), subject to
adjustment when the final rates are established. These billing rates-

\(1\) Shall be the anticipated final rates; and

\(2\) May be prospectively or retroactively revised by mutual agreement,
at either party\'s request, to prevent substantial overpayment or
underpayment.

\(f\) Quick-close-out procedures. When the Contractor and Contracting
Officer agree, the quick-close-out procedures may be used.

\(1\) Procedures. Settlement of indirect cost rates shall apply to this
contract, in advance of the determination of final indirect cost rates,
if:

\(i\) The contract is physically complete;

\(ii\) The amount of unsettled indirect cost to be allocated to this
contract is not more than \$500,000 and the cumulative unsettled
indirect costs to be allocated to one or more contracts in a single
fiscal year do not exceed 15 percent of the estimated, total unsettled
indirect costs allocable to cost-type contracts for that fiscal year;
and

\(iii\) Agreement can be reached on a reasonable estimate of allocable
dollars.

\(2\) The settlement shall be final for this contract and no adjustment
shall be made to other contracts for over- or under-recoveries of costs
allocated or allocable to this contract.

\(3\) The settlement shall not be considered a binding precedent when
establishing the final indirect costs for other contracts.

\(g\) Audit. At any time or times before final payment, the Contracting
Officer may have the Contractor\'s invoices or vouchers and statements
of cost audited. Any payment may be (1) reduced by amounts found by the
Contracting Officer not to constitute allowable costs or (2) adjusted
for prior overpayments or underpayments.

\(h\) Final payment.

\(1\) The Contractor shall submit a completion invoice or voucher,
designated as such, promptly upon completion of the work, but no later
than one year (or longer, as the Contracting Officer may approve in
writing) from the completion date. Upon approval of that invoice or
voucher, and upon the Contractor\'s compliance with all terms of this
contract, the Government shall promptly pay any balance of allowable
costs and that part of the fee (if any) not previously paid.

\(2\) The Contractor shall pay to the Government any refunds, rebates,
credits, or other amounts (including interest, if any) accruing to or
received by the Contractor or any assignee under this contract, to the
extent that those amounts are properly allocable to costs for which the
Contractor has been reimbursed by the Government. Reasonable expenses
incurred by the Contractor for securing refunds, rebates, credits, or
other amounts shall be allowable costs if approved by the Contracting
Officer. Before final payment under this contract, the Contractor and
each assignee whose assignment is in effect at the time of final payment
shall execute and deliver-

\(i\) An assignment to the Government, in form and substance
satisfactory to the Contracting Officer, of refunds, rebates, credits,
or other amounts (including interest, if any) properly allocable to
costs for which the Contractor has been reimbursed 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, except-

\(A\) Specified claims stated in exact amounts, or in estimated amounts
when the exact amounts are not known;

\(B\) Claims (including reasonable incidental expenses) based upon
liabilities of the Contractor to third parties arising out of the
performance of this contract; provided, that the claims are not known to
the Contractor on the date of the execution of the release, and that the
Contractor gives notice of the claims in writing to the Contracting
Officer within 6 years following the release date or notice of final
payment date, whichever is earlier; and

\(C\) Claims for reimbursement of costs, including reasonable incidental
expenses, incurred by the Contractor under the patent clauses of this
contract, excluding, however, any expenses arising from the
Contractor\'s indemnification of the Government against patent
liability.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a cost-reimbursement
contract is contemplated

**3.2.4-5/alt1** **Allowable Cost and Payment alt1** (April 2001)

Delete subparagraph (b)(1)(i) and insert the following in its place:

\(b\) Reimbursing costs.

\(1\) For the purpose of reimbursing allowable costs (except as provided
in subparagraph (2) below, with respect to pension, deferred profit
sharing, and employee stock ownership plan contributions), the term
costs include only:

\(i\) Those costs the Contractor has incurred and recorded at the time
of the request for reimbursement provided that the Contractor complies
with The Contractor requests application of this Alternate I
provisionthe following from the FAA Contracting Officer

\(A\) The Contractor requests application of this alternate provision
and the and FAA Contracting Officer\'s adopts this alternate via a
bilateral contract modification reflecting this Alternate III to the
basic clause.; and

\(B\) The Contractor flows down the provisions of this subparagraph to
its subcontractors at all tiers. The Contractor shall submit
documentation to this effect at the time it requests a contract
modification adopting this subparagraph (b)(1)(i).

PRESCRIPTION:

May be used in cost reimbursement contracts in existence prior to
inception of this alternate clause (April 2001).

**3.2.4-6** **Fixed Fee** (April 2003)

\(a\) The FAA shall pay the Contractor for performing this contract the
fixed fee specified in the Schedule.

\(b\) Payment of the fixed fee shall be made as specified in the
Schedule; provided, that after payment of 85 percent of the fixed fee,
the Contracting Officer shall withhold further payment of fee until a
reserve is set aside in an amount that the Contracting Officer considers
necessary to protect the FAA\'s interest. This reserve shall not exceed
15 percent of the total fixed fee or \$100,000, whichever is less.

(End of Clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a cost plus fixed fee
contract (other than facilities contract) is contemplated.

**3.2.4.7** **Fixed Fee\--Construction** (April 1996)

\(a\) The FAA shall pay to the Contractor for performing this contract
the fixed fee specified in the Schedule.

\(b\) Payment of the fixed fee shall be made in installments based upon
the percentage of completion of the work as determined from estimates
submitted to and approved by the Contracting Officer, but subject to the
withholding provisions of paragraph (c) below.

\(c\) After the payment of 85 percent of the fixed fee, the Contracting
Officer may withhold further payment of fee until a reserve is set aside
in an amount that the Contracting Officer considers necessary to protect
the Government\'s interest. This reserve shall not exceed 15 percent of
the total fixed fee or \$100,000, whichever is less.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a cost plus fixed fee
construction contract is contemplated

**3.2.4.8** **Incentive Fee** (April 1996)

\(a\) General. The FAA shall pay the Contractor for performing this
contract a fee determined as provided in this contract.

\(b\) Target cost and target fee. The target cost and target fee
specified in the \"Schedule\" are subject to adjustment if the contract
is modified in accordance with paragraph (d) below.

\(1\) Target cost, as used in this contract, means the estimated cost of
this contract as initially negotiated, adjusted in accordance with
paragraph (d) below.

\(2\) Target fee, as used in this contract, means the fee initially
negotiated on the assumption that this contract would be performed for a
cost equal to the estimated cost initially negotiated, adjusted in
accordance with paragraph (d) below.

\(c\) Withholding of payment. Normally, the FAA shall pay the fee to the
Contractor as specified in the Schedule. However, when the Contracting
Officer considers that performance or cost indicates that the Contractor
will not achieve target, the FAA shall pay on the basis of an
appropriate lesser fee. When the Contractor demonstrates that
performance or cost clearly indicates that the Contractor will earn a
fee significantly above the target fee, the Government may, at the sole
discretion of the Contracting Officer, pay on the basis of an
appropriate higher fee. After payment of 85 percent of the applicable
fee, the Contracting Officer may withhold further payment of fee until a
reserve is set aside in an amount that the Contracting Officer considers
necessary to protect the FAA\'s interest. This reserve shall not exceed
15 percent of the applicable fee or \$100,000, whichever is less.

\(d\) Equitable adjustments. When the work under this contract is
increased or decreased by a modification to this contract or when any
equitable adjustment in the target cost is authorized under any other
clause, equitable adjustments in the target cost, target fee, minimum
fee, and maximum fee, as appropriate, shall be stated in a supplemental
agreement to this contract.

\(e\) Fee payable.

\(1\) The fee payable under this contract shall be the target fee
increased by \_\_\_\_\_\_\_\_\_\_\_ \[Contracting Officer insert
Contractor\'s participation\] cents for every dollar that the total
allowable cost is less than the target cost or decreased by
\_\_\_\_\_\_\_\_\_\_\_ \[Contracting Officer insert Contractor\'s
participation\] cents for every dollar that the total allowable cost
exceeds the target cost. In no event shall the fee be greater than
\_\_\_\_\_\_\_\_\_\_\_\_ \[Contracting Officer insert percentage\]
percent or less than \_\_\_\_\_\_\_\_\_\_\_\_\_ \[Contracting Officer
insert percentage\] percent of the target cost.

\(2\) The fee shall be subject to adjustment, to the extent provided in
paragraph (d) above, and within the minimum and maximum fee limitations
in subparagraph (1) above, when the total allowable cost is increased or
decreased as a consequence of (i) payments made under assignments or
(ii) claims excepted from the release as required by paragraph (h)(2) of
the \"Allowable Cost and Payment\" clause.

\(3\) If this contract is terminated in its entirety, the portion of the
target fee payable shall not be subject to an increase or decrease as
provided in this paragraph. The termination shall be accomplished in
accordance with other applicable clauses of this contract.

\(4\) For the purpose of fee adjustment, total allowable cost shall not
include allowable costs arising out of-

\(i\) Any of the causes covered by the \"Excusable Delays\" clause to
the extent that they are beyond the control and without the fault or
negligence of the Contractor or any subcontractor;

\(ii\) The taking effect, after negotiating the target cost, of a
statute, court decision, written ruling, or regulation that results in
the Contractor\'s being required to pay or bear the burden of any tax or
duty or rate increase in a tax or duty;

\(iii\) Any direct cost attributed to the Contractor\'s involvement in
litigation as required by the Contracting Officer pursuant to a clause
of this contract, including furnishing evidence and information
requested pursuant to the \"Notice and Assistance Regarding Patent and
Copyright Infringement\" clause;

\(iv\) The purchase and maintenance of additional insurance not in the
target cost and required by the Contracting Officer, or claims for
reimbursement for liabilities to third persons pursuant to the
\"Insurance-Liability to Third Persons\" clause;

\(v\) Any claim, loss, or damage resulting from a risk for which the
Contractor has been relieved of liability by the FAA Property clause; or

\(vi\) Any claim, loss, or damage resulting from a risk defined in the
contract as unusually hazardous or as a nuclear risk and against which
the FAA has expressly agreed to indemnify the Contractor.

\(5\) All other allowable costs are included in total allowable cost for
fee adjustment in accordance with this paragraph (e), unless otherwise
specifically provided in this contract.

\(f\) Contract modification. The total allowable cost and the adjusted
fee determined as provided in this clause shall be evidenced by a
modification to this contract signed by the Contractor and Contracting
Officer.

\(g\) Inconsistencies. In the event of any language inconsistencies
between this clause and provisioning documents or FAA options under this
contract, compensation for spare parts or other supplies and services
ordered under such documents shall be determined in accordance with this
clause.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a cost plus incentive fee
contract (other than facilities contract) is contemplated. The
Contracting Officer should insert appropriate information in the clause.

**3.2.4-9** **Cost Contract\--No Fee** (April 1996)

\(a\) The FAA shall not pay the Contractor a fee for performing this
contract.

\(b\) After payment of 80 percent of the total estimated cost shown in
the Schedule, the Contracting Officer may withhold further payment of
allowable cost until a reserve is set aside in an amount that the
Contracting Officer considers necessary to protect the FAA interest.
This reserve shall not exceed one percent of the total estimated cost
shown in the \"Schedule\" or \$100,000, whichever is less.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a cost reimbursement
contract is contemplated that provides no fee and is not a cost sharing
contract or a facilities contract.

**3.2.4-10** **Cost-Sharing Contract\--No Fee** (April 1996)

\(a\) The FAA shall not pay to the Contractor a fee for performing this
contract.

\(b\) After paying 80 percent of the FAA\'s share of the total estimated
cost of performance shown in the Schedule, the Contracting Officer may
withhold further payment of allowable cost until a reserve is set aside
in an amount that the Contracting Officer considers necessary to protect
the Government\'s interest. This reserve shall not exceed one percent of
the FAA\'s share of the total estimated cost shown in the \"Schedule\"
or \$100,000, whichever is less.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a cost sharing contract is
contemplated that provides no fee and is not a facilities contract

**3.2.4-11** **Allowable Cost and Payment-Facilities** (October 1996)

\(a\) General.

\(1\) For the performance of any work, duty, or obligation specified in
this contract to be at Government expense, the Government shall pay the
Contractor all allowable costs as determined by the Contracting Officer
in accordance with the contract terms and the Federal Aviation
Administration\'s (FAA) \"Contract Cost Principles\" in effect on the
contract date (upon request the Contracting Officer will provide a copy
of the FAA Contract Cost Principles).

\(2\) Except as otherwise specifically provided in this contract, the
failure of this contract to provide for reimbursement does not preclude
the Contractor from including, as part of the price for cost under any
other Government contract or subcontract, an allocable portion of the
costs incurred for any work, duty, for obligation performed under this
contract, but not reimbursable under it.

\(b\) Invoicing. The Government shall make payments to the Contractor
when requested once each month. The Contractor may submit to an
authorized representative of the Contracting Officer, in such form and
reasonable detail as the representative may require, an invoice or
voucher supported by a statement of the claimed allowable cost for the
performance of this contract.

\(c\) Negotiated indirect costs. Notwithstanding the audit and
adjustment of invoices or vouchers under paragraph (f) below, allowable
indirect costs under this contract shall be obtained by applying final
indirect cost rates established as follows:

\(1\) Final annual indirect cost rates and the appropriate bases shall
be established for the period covered by the indirect cost rate
proposal.

\(2\) The Contractor shall, within 90 days after the expiration of each
of its fiscal years, or by a later date approved by the Contracting
Officer, submit to the Contracting Officer and to the cognizant audit
activity proposed final indirect cost rates for that period and
supporting cost and data specifying the contract and/or subcontract to
which the rates apply. The proposed rates shall be based on the
Contractor\'s actual cost experience for that period. The appropriate
Government representative and the Contractor shall establish the final
indirect cost rates as promptly as practical after receipt of the
contractor\'s proposal.

\(3\) The Contractor and the appropriate Government representative shall
execute a written understanding setting forth the final indirect cost
rates. The understanding shall specify (i) the agreed-upon final annual
indirect cost rates, (ii) the bases to which the rates apply, (iii) the
periods for which the rates apply, (iv) any specific indirect cost items
treated as direct costs in the settlement, and (v) the affected contract
and/or subcontract, identifying any with advance agreements or special
terms and the applicable rates. The understanding shall not change any
monetary ceiling, contract obligation, or specific cost allowance or
disallowance provided for in this contract. The understanding is
incorporated into this contract upon execution.

\(4\) Failure by the parties to agree on a final annual indirect cost
rate may be the basis of a claim under the \"Contract Disputes\" clause.

\(d\) Billing rates. Until final annual indirect cost rates are
established for any period, the Government shall reimburse the
Contractor at billing rates established by the Contracting Officer by an
authorized representative (the cognizant auditor), subject to adjustment
when the final rates are established. These billing rates\--

\(1\) Shall be the anticipated final rates; and

\(2\) May be prospectively or retroactively revised by mutual agreement,
at either party\'s request, to prevent substantial overpayment or
underpayment.

\(e\) Quick-close-out procedures. When the Contractor and Contracting
Officer agree, quick-close-out procedures may be used.

\(1\) Procedures. Settlement of indirect cost rates shall apply to this
contract, in advance of the determination of final indirect cost rates,
if:

\(i\) The contract is physically complete;

\(ii\) The amount of unsettled indirect cost to be allocated to this
contract is not more than \$500,000 and the cumulative unsettled
indirect costs to be allocated to one or more contracts in a single
fiscal year do not exceed 15 percent of the estimated, total unsettled
indirect costs allocable to cost-type contracts for that fiscal year;
and

\(iii\) Agreement can be reached on a reasonable estimate of allocable
dollars.

\(2\) The settlement shall be final for this contract and no adjustment
shall be made to other contracts for over- or under-recoveries of costs
allocated or allocable to this contract.

\(3\) The settlement shall not be considered a binding precedent when
establishing the final indirect costs for other contracts.

\(f\) Audit. At any time or times before final payment, the Contracting
Officer may have the Contractor\'s invoices or vouchers and statements
of cost audited. Any payment may be (1) reduced by amounts found by the
Contracting Officer not to constitute allowable costs for (2) adjusted
for prior overpayments or underpayments.

\(g\) Assignments and releases. The Contractor shall pay to the
Government any refunds, rebates, credits, or other amounts (including
interest, if any) accruing to or received by the Contractor for any
assignee under this contract, to the extent that those amounts are
properly allocable to costs for which the Contractor has been reimbursed
by the Government. Reasonable expenses incurred by the Contractor for
securing refunds, rebates, credits, or other amounts shall be allowable
costs if approved by the Contracting Officer. Before final payment under
this contract, the Contractor and each assignee shall execute and
deliver-

\(1\) An assignment to the Government, in form and substance
satisfactory to the Contracting Officer, of refunds, rebates, credits,
or other amounts (including interest, if any) properly allocable to
costs for which the Contractor has been reimbursed by the Government
under this contract; and

\(2\) A release discharging the Government, its officers, agents, and
employees from all liabilities, obligations, and claims arising out of
or under this contract, except-

\(i\) Specified claims stated in exact amounts, or in estimated amounts
when the exact amounts are not known;

\(ii\) Claims (including reasonable incidental expenses) based upon
liabilities of the Contractor to third parties arising out of
performance of this contract; provided that the claims are not known to
the Contractor on the date of the execution of the release, and that the
Contractor gives notice of the claims in writing to the Contracting
Officer within 6 years following the release date or notice of final
payment date, whichever is earlier; and

\(iii\) Claims for reimbursement of costs, including related expenses,
incurred by the Contractor under the patent clauses of this contract,
excluding, however, any expenses arising from the Contractor\'s
indemnification of the Government against patent liability.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a cost-reimbursement
consolidated facilities contract or a cost reimbursement facilities
acquisition contract is contemplated

**3.2.4-11/alt1** **Allowable Cost and Payment-Facilities Alternate I**
(October 1996)

Note: If the contract is for facilities acquisition, and the Contracting
Officer considers it appropriate, add the following paragraphs (g) and
(h) to the basic clause, and redesignate paragraph (g) of the basic
clause as paragraph (i):

\(g\) Withholding. After payment of 80 percent of the total estimated
cost shown in the Schedule, the Contracting Officer may withhold payment
of allowable costs until a reserve is set aside in an amount that the
Contracting Officer considers necessary to protect the Government\'s
interest. This reserve shall not exceed one percent of the total
estimated cost shown in the \"Schedule\" or \$100,000, whichever is
less.

\(h\) Final Payment. The Contractor shall submit a completion invoice or
voucher, designated as such, no later than one year (or longer, as the
Contracting Officer may approve in writing) from the completion date.
Upon approval of the invoice or voucher, and upon the Contractor\'s
compliance with all terms of this contract, the Government shall
promptly pay any balance of allowable costs not previously paid.

PRESCRIPTION:

Should be used if the contract is for facilities acquisition and the
Contracting Officer considers the Alternate appropriate.

**3.2.4-12** **Allowable Cost and Payment-Facilities Use** (April 1996)

\(a\) For the performance of any work, duty, or obligations specified in
this contract to be at FAA expense, the FAA shall pay the Contractor all
allowable costs as determined by the Contracting Officer in accordance
with the contract terms and the FAA\'s contract cost principles in
effect on the contract date.

\(b\) Except as otherwise specifically provided in this contract, the
failure of this contract to provide for reimbursement does not preclude
the Contractor from including, as part of the price or cost under any
other Government contract or subcontract, an allocable portion of the
costs incurred for any work, duty, or obligation performed under this
contract, but not reimbursed under it.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a cost-reimbursement
facilities use contract is contemplated

**3.2.4-13** **Predetermined Indirect Cost Rates** (April 1996)

\(a\) Notwithstanding the \"Allowable Cost and Payment\" clause of this
contract, the allowable indirect costs under this contract shall be
obtained by applying predetermined indirect cost rates to bases agreed
upon by the parties, as specified below.

\(b\) Not later than 90 days after the expiration of the Contractor\'s
fiscal year, the Contractor shall submit to the cognizant Contracting
Officer proposed predetermined indirect cost rates and supporting cost
data. The proposed rate shall be based on the Contractor\'s actual cost
experience during that fiscal year. Negotiations of predetermined
indirect cost rates shall begin as soon as practical after receipt of
the contractor\'s proposal.

\(c\) Allowability of costs and acceptability of cost allocation methods
shall be determined in accordance with the cost principles for
educational institutions in effect on the date of this contract.

\(d\) Predetermined rate agreements in effect on the date of this
contract shall be incorporated into the contract Schedule. The
Contracting Officer and Contractor shall negotiate rates for subsequent
periods and execute a written indirect cost rate agreement setting forth
the results. The agreement shall specify

\(1\) the agreed-upon predetermined indirect cost rates,

\(2\) the bases to which the rates apply,

\(3\) the fiscal year (unless the parties agree to a different period)
for which the rates apply, and

\(4\) the specific items treated as direct costs or any changes in the
items previously agreed to be direct costs.

The indirect cost rate agreement shall not change any monetary ceiling,
contract obligation, or specific cost allowance or disallowance provided
for in this contract. The agreement is incorporated into this contract
upon execution.

\(e\) Pending establishment of predetermined indirect cost rates for any
fiscal year (or other period agreed to by the parties), the Contractor
shall be reimbursed either at the rates fixed for the previous fiscal
year (or other period) or at billing rates acceptable to the Contracting
Officer, subject to appropriate adjustment when the final rates for that
period are established.

\(f\) Any failure by the parties to agree on any predetermined indirect
cost rates under this clause shall not be considered a dispute within
the meaning of the \"Disputes\" clause. If for any fiscal year (or other
period specified in the Schedule) the parties fail to agree to
predetermined indirect cost rates, the allowable indirect costs shall be
obtained by applying final indirect cost rates established in accordance
with the \"Allowable Cost and Payment\" clause.

\(g\) Allowable indirect costs for the period from the beginning of
performance until the end of the Contractor\'s fiscal year shall be
obtained using the predetermined indirect cost rates and the bases shown
in the Schedule.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a cost-reimbursement
research and development contract with an educational institution is
contemplated and predetermined indirect cost rates are to be used

**3.2.4-14** **Incentive Price Revision\--Firm Target** (April 1996)

\(a\) General. The supplies or services identified in the \"Schedule\"
as Items \_\_\_\_\_\_ \[Contracting Officer insert \"Schedule\" line
item numbers\] are subject to price revision in accordance with this
clause; provided, that in no event shall the total final price of these
items exceed the ceiling price of \_\_\_\_\_ dollars
(\$\_\_\_\_\_.\_\_). Any supplies or services that are to be:

\(1\) ordered separately under, or otherwise added to, this contract and

\(2\) subject to price revision in accordance with the terms of this
clause shall be identified as such in a modification to this contract.

\(b\) Definition. Costs, as used in this clause, means allowable costs
in accordance with the FAA\'s cost principles in effect on the date of
this contract.

\(c\) Data submission.

\(1\) Within \-\-\-- \[Contracting Officer insert number of days\] days
after the end of the month in which the Contractor has delivered the
last unit of supplies and completed the services specified by item
number in paragraph (a) above, the Contractor shall submit-

\(i\) A detailed statement of all costs incurred up to the end of that
month in performing all work under the items;

\(ii\) An estimate of costs of further performance, if any, that may be
necessary to complete performance of all work under the items;

\(iii\) A list of all residual inventory and an estimate of its value;
and

\(iv\) Any other relevant data that the Contracting Officer may
reasonably require.

\(2\) If the Contractor fails to submit the data required by
subparagraph (1) above within the time specified and it is later
determined that the Government has overpaid the Contractor, the
Contractor shall repay the excess to the Government immediately. Unless
repaid within 30 days after the end of the data submittal period, the
amount of the excess shall bear interest, computed from the date the
data were due to the date of repayment, at the rate established in
accordance with the \"Interest\" clause.

\(d\) Price revision. Upon the Contracting Officer\'s receipt of the
data required by paragraph (c) above, the Contracting Officer and the
Contractor shall promptly establish the total final price of the items
specified in (a) above by applying to final negotiated cost an
adjustment for profit or loss, as follows:

\(1\) On the basis of the information required by paragraph (c) above,
together with any other pertinent information, the parties shall
negotiate the total final cost incurred or to be incurred for supplies
delivered (or services performed) and accepted by the FAA and which are
subject to price revision under this clause.

\(2\) The total final price shall be established by applying to the
total final negotiated cost an adjustment for profit or loss, as
follows:

\(i\) If the total final negotiated cost is equal to the total target
cost, the adjustment is the total target profit.

\(ii\) If the total final negotiated cost is greater than the total
target cost, the adjustment is the total target profit, less
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[Contracting Officer insert
percent\] percent of the amount by which the total final negotiated cost
exceeds the total target cost.

\(iii\) If the final negotiated cost is less than the total target cost,
the adjustment is the total target profit plus \-- \[Contracting Officer
insert percent\] percent of the amount by which the total final
negotiated cost is less than the total target cost.

\(e\) Contract modification. The total final price of the items
specified in paragraph (a) above shall be evidenced by a modification to
this contract, signed by the Contractor and the Contracting Officer.
This price shall not be subject to revision, notwithstanding any changes
in the cost of performing the contract, except to the extent that-

\(1\) The parties may agree in writing, before the determination of
total final price, to exclude specific elements of cost from this price
and to a procedure for subsequent disposition of those elements; and

\(2\) Adjustments or credits are explicitly permitted or required by
this or any other clause in this contract.

\(f\) Adjusting billing prices.

\(1\) Pending execution of the contract modification (see paragraph (e)
above), the Contractor shall submit invoices or vouchers in accordance
with billing prices as provided in this paragraph. The billing prices
shall be the target prices shown in this contract.

\(2\) If at any time it appears from information provided by the
contractor under subparagraph (g)(2) below that the then-current billing
prices will be substantially greater than the estimated final prices,
the parties shall negotiate a reduction in the billing prices.
Similarly, the parties may negotiate an increase in billing prices by
any or all of the difference between the target prices and the ceiling
price, upon the Contractor\'s submission of factual data showing that
final cost under this contract will be substantially greater than the
target cost.

\(3\) Any billing price adjustment shall be reflected in a contract
modification and shall not affect the determination of the total final
price under paragraph (d) above. After the contract modification
establishing the total final price is executed, the total amount paid or
to be paid on all invoices or vouchers shall be adjusted to reflect the
total final price, and any resulting additional payments, refunds, or
credits shall be made promptly.

\(g\) Quarterly limitation on payments statement. This paragraph (g)
shall apply until final price revision under this contract has been
completed.

\(1\) Within 45 days after the end of each quarter of the Contractor\'s
fiscal year in which a delivery is first made (or services are first
performed) and accepted by the FAA under this contract, and for each
quarter thereafter, the Contractor shall submit to the contract
administration office (with a copy to the contracting office and the
cognizant contract auditor) a statement, cumulative from the beginning
of the contract, showing-

\(i\) The total contract price of all supplies delivered (or services
performed) and accepted by the FAA and for which final prices have been
established;

\(ii\) The total costs (estimated to the extent necessary) reasonably
incurred for, and properly allocable solely to, the supplies delivered
(or services performed) and accepted by the FAA and for which final
prices have not been established;

\(iii\) The portion of the total target profit (used in establishing the
initial contract price or agreed to for the purpose of this paragraph
(g)) that is in direct proportion to the supplies delivered (or services
performed) and accepted by the FAA and for which final prices have not
been established-increased or decreased in accordance with subparagraph
(d)(2) above, when the amount stated under subdivision (ii), immediately
above, differs from the aggregate target costs of the supplies or
services;

\(iv\) The total amount of all invoices or vouchers for supplies
delivered (or services performed) and accepted by the Government
(including amounts applied or to be applied to liquidate payments).

\(2\) Notwithstanding any provision of this contract authorizing greater
payments, if on any quarterly statement the amount under subdivision
(1)(iv) above exceeds the sum due the Contractor, as computed in
accordance with subdivisions (1)(i), (ii), and (iii) above, the
Contractor shall immediately refund or credit to the Government the
amount of this excess. The Contractor may, when appropriate, reduce this
refund or credit by the amount of any applicable tax credits due the
Contractor under 26 U.S.C. 1481 and by the amount of previous refunds or
credits effected under this clause. If any portion of the excess has
been applied to the liquidation of payments, then that portion may,
instead of being refunded, be added to the unliquidated payment account
consistent with the payments clause. The Contractor shall provide
complete details to support any claimed reductions in refunds.

\(3\) If the Contractor fails to submit the quarterly statement within
45 days after the end of each quarter and it is later determined that
the Government has overpaid the Contractor, the Contractor shall repay
the excess to the Government immediately. Unless repaid within 30 days
after the end of the statement submittal period, the amount of the
excess shall bear interest, computed from the date the quarterly
statement was due to the date of repayment, at the rate established in
accordance with the \"Interest\" clause.

\(h\) Subcontracts. No subcontract placed under this contract may
provide for payment on a cost-plus-a-percentage-of-cost basis. The
Contractor shall\--

\(1\) Insert in each price redetermination or incentive price revision
subcontract the substance of paragraph (g), above, and of this paragraph
(h), modified to omit mention of the FAA and to reflect the position of
the Contractor as purchaser and of the subcontractor as vendor, and to
omit that part of subparagraph (g)(2) above relating to tax credits; and

\(2\) Include in each cost-reimbursement subcontract a requirement that
each lower-tier price redetermination or incentive price revision
subcontract contain the substance of paragraph (g) above and of this
paragraph (h), modified as required by subparagraph (1) above.

\(i\) Disagreements. If the Contractor and the Contracting Officer fail
to agree upon the total final price within 60 days (or within such other
period as the Contracting Officer may specify) after the date on which
the data required by paragraph (c) above are to be submitted, the
Contracting Officer shall promptly issue a decision in accordance with
the \"Disputes\" clause.

\(j\) Termination. If this contract is terminated before the total final
price is established, prices of supplies or services subject to price
revision shall be established in accordance with this clause for (1)
completed supplies and services accepted by the FAA and (2) those
supplies and services not terminated under a partial termination. All
other elements of the termination shall be resolved in accordance with
other applicable clauses of this contract.

\(k\) Equitable adjustment under other clauses. If an equitable
adjustment in the contract price is made under any other clause of this
contract before the total final price is established, the adjustment
shall be made in the total target cost and may be made in the maximum
dollar limit on the total final price, the total target profit, or both.
If the adjustment is made after the total final price is established,
only the total final price shall be adjusted.

\(l\) Exclusion from target price and total final price. If any clause
of this contract provides that the contract price does not or will not
include an amount for a specific purpose, then neither any target price
nor the total final price includes or will include any amount for that
purpose.

\(m\) Separate reimbursement. If any clause of this contract expressly
provides that the cost of performance of an obligation shall be at FAA
expense, that expense shall not be included in any target price or in
the total final price, but shall be reimbursed separately.

\(n\) Taxes. As used in the \"Federal, State, and Local Taxes\" clause
or in any other clause that provides for certain taxes or duties to be
included in, or excluded from, the contract price, the term contract
price includes the total target price or, if it has been established,
the total final price. When any of these clauses requires that the
contract price be increased or decreased as a result of changes in the
obligation of the Contractor to pay or bear the burden of certain taxes
or duties, the increase or decrease shall be made in the total target
price or, if it has been established, in the total final price, so that
it will not affect the Contractor\'s profit or loss on this contract.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a fixed price incentive
(firm target) contract is contemplated. The Contracting Officer should
insert appropriate information in the clause.

**3.2.4-14/alt1** **Incentive Price Revision\--Firm Target Alternate I**
(April 1996)

Provisioning and options. Parts, other supplies, or services that are to
be furnished under this contract on the basis of a provisioning document
or Government option shall be subject to price revision in accordance
with this clause. Any prices established for these parts, other
supplies, or services under a provisioning document or Government option
shall be treated as target prices. Target cost and profit covering these
parts, other supplies, or services may be established separately, in the
aggregate, or in any combination, as the parties may agree.

PRESCRIPTION:

Should be used when the contract calls for supplies or services to be
issued under a provisioning document or option and prices will be
subject to incentive price revisions.

**3.2.4-15** **Incentive Price Revision\--Successive Targets** (October
1996)

\(a\) General. The supplies or services identified in the \"Schedule\"
as Items \_\_\_\_\_\_\_\_\_\_\_ \[Contracting Officer insert line item
numbers\] are subject to price revision in accordance with this clause;
provided, that in no event shall the total final price of these items
exceed the ceiling price of \_\_\_\_\_\_\_\_\_\_\_ dollars
(\$\_\_\_\_\_\_\_\_). The prices of these items shown in the
\"Schedule\" are the initial target prices, which include an initial
target profit of \_\_\_\_\_\_\_\_\_\_\_ \[Contracting Officer insert
percent\] percent of the initial target cost. Any supplies or services
that are to be (1) ordered separately under, or otherwise added to, this
contract and (2) subject to price revision in accordance with this
clause shall be identified as such in a modification to this contract.

\(b\) Definition. Costs, as used in this clause, means allowable costs
in accordance with the FAA\'s contract cost principles in effect on the
date of this contract.

\(c\) Submitting data for establishing the firm fixed price or a final
profit adjustment formula. (1) Within \_\_\_\_\_ \[Contracting Officer
insert number of days\] days after the end of the month in which the
Contractor has completed \_\_\_\_\_ \[see Note 1\], the Contractor shall
submit the following data:

\(i\) A proposed firm fixed price or total firm target price for
supplies delivered and to be delivered and services performed and to be
performed.

\(ii\) A detailed statement of all costs incurred in the performance of
this contract through the end of the month specified above with
sufficient supporting data to disclose unit costs and cost trends for-

\(A\) Supplies delivered and services performed; and

\(B\) Inventories of work in process and undelivered contract supplies
on hand (estimated to the extent necessary).

\(iii\) An estimate of costs of all supplies delivered and to be
delivered and all services performed and to be performed under this
contract, using the statement of costs incurred plus an estimate of
costs to complete performance, together with-

\(A\) Sufficient data to support the accuracy and reliability of the
estimate; and

\(B\) An explanation of the differences between this estimate and the
original estimate used to establish the initial target prices.

\(2\) The Contractor shall also submit, to the extent that it becomes
available before negotiations establishing the total firm price are
concluded-

\(i\) Supplemental statements of costs incurred after the end of the
month specified in subparagraph (1) above for-

\(A\) Supplies delivered and services performed; and

\(B\) Inventories of work in process and undelivered contract supplies
on hand (estimated to the extent necessary); and

\(ii\) Any other relevant data that the Contracting Officer may
reasonably require.

\(3\) If the Contractor fails to submit the data required by
subparagraphs (1) and (2) above within the time specified and it is
later determined that the Government has overpaid the Contractor, the
Contractor shall repay the excess to the Government immediately. Unless
repaid within 30 days after the end of the data submittal period, the
amount of the excess shall bear interest, computed from the date the
data were due to the date of repayment, at the rate established in
accordance with the \"Interest\" clause.

\(d\) Establishing firm fixed price or final profit adjustment formula.
Upon the Contracting Officer\'s receipt of the data required by
paragraph (c) above the Contracting Officer and the Contractor shall
promptly establish either a firm fixed price or a profit adjustment
formula for determining final profit, as follows:

\(1\) The parties shall negotiate a total firm target cost, based upon
the data submitted under paragraph (c) above.

\(2\) If the total firm target cost is more than the total initial
target cost, the total initial target profit shall be decreased. If the
total firm target cost is less than the total initial target cost, the
total initial target profit shall be increased. The initial target
profit shall be increased or decreased by \-\-\-- percent \[see Note 2\]
of the difference between the total initial target cost and the total
firm target cost. The resulting amount shall be the total firm target
profit; provided, that in no event shall the total firm target profit be
less than \_\_\_\_\_ percent or more than \_\_\_\_\_ percent
\[Contracting Officer insert percents\] of the total initial target
cost.

\(3\) If the total firm target cost plus the total firm target profit
represent a reasonable price for performing that part of the contract
subject to price revision under this clause, the parties may agree on a
firm fixed price, which shall be evidenced by a contract modification
signed by the Contractor and the Contracting Officer.

\(4\) Failure of the parties to agree to a firm fixed price shall not
constitute a dispute under the \"Disputes\" clause. If agreement is not
reached, or if establishment of a firm fixed price is inappropriate, the
Contractor and the Contracting Officer shall establish a profit
adjustment formula under which the total final price shall be
established by applying to the total final negotiated cost an adjustment
for profit or loss, determined as follows:

\(i\) If the total final negotiated cost is equal to the total firm
target cost, the adjustment is the total firm target profit.

\(ii\) If the total final negotiated cost is greater than the total firm
target cost, the adjustment is the total firm target profit, less \--
percent of the amount by which the total final negotiated cost exceeds
the total firm target cost.

\(iii\) If the total final negotiated cost is less than the total firm
target cost, the adjustment is the total firm target profit, plus \--
percent of the amount by which the total final negotiated cost is less
than the total firm target cost.

\(iv\) The total firm target cost, total firm target profit, and the
profit adjustment

formula for determining final profit shall be evidenced by a
modification to this contract signed by the Contractor and the
Contracting Officer.

\(e\) Submitting data for final price revision. Unless a firm fixed
price has been established in accordance with paragraph (d) above within
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[Contracting Officer insert number of
days\] days after the end of the month in which the Contractor has
delivered the last unit of supplies and completed the services specified
by item number in paragraph (a) above, the Contractor shall submit -

\(1\) A detailed statement of all costs incurred up to the end of that
month in performing all work under the items;

\(2\) An estimate of costs of further performance, if any, that may be
necessary to complete performance of all work under the items;

\(3\) A list of all residual inventory and an estimate of its value; and

\(4\) Any other relevant data that the Contracting Officer may
reasonably require.

\(f\) Final price revision. Unless a firm fixed price has been agreed to
in accordance with paragraph (d) above, the Contractor and the
Contracting Officer shall, promptly after submission of the data
required by paragraph (e) above, establish the total final price, as
follows:

\(1\) On the basis of the information required by paragraph (e) above,
together with any other pertinent information, the parties shall
negotiate the total final cost incurred or to be incurred for the
supplies delivered (or services performed) and accepted by the
Government and which are subject to price revision under this clause.

\(2\) The total final price shall be established by applying to the
total final negotiated cost an adjustment for final profit or loss
determined as agreed upon under subparagraph (d)(4) above.

\(g\) Contract modification. The total final price of the items
specified in paragraph (a) above shall be evidenced by a modification to
this contract, signed by the Contractor and the Contracting Officer.
This price shall not be subject to revision, notwithstanding any changes
in the cost of performing the contract, except to the extent that-

\(1\) The parties may agree in writing, before the determination of
total final price, to exclude specific elements of cost from this price
and to a procedure for subsequent disposition of these elements; and

\(2\) Adjustments or credits are explicitly permitted or required by
this or any other clause in this contract.

\(h\) Adjustment of billing prices.

\(1\) Pending execution of the contract modification (see paragraph (e)
above), the Contractor shall submit invoices or vouchers in accordance
with billing prices as provided in this paragraph. The billing prices
shall be the initial target prices shown in this contract until firm
target prices are established under paragraph (d) above. When
established, the firm target prices shall be used as the billing prices.

\(2\) If at any time it appears from information provided by the
contractor under subparagraph (i)(1) below that the then-current billing
prices will be substantially greater than the estimated final prices,
the parties shall negotiate a reduction in the billing prices.
Similarly, the parties may negotiate an increase in billing prices by
any or all of the difference between the target prices and the ceiling
price, upon the Contractor\'s submission of factual data showing that
the final cost under this contract will be substantially greater than
the target cost.

\(3\) Any adjustment of billing prices shall be reflected in a contract
modification and shall not affect the determination of any price under
paragraph (d) or (f) above. After the contract modification establishing
the total final price is executed, the total amount paid or to be paid
on all invoices or vouchers shall be adjusted to reflect the total final
price, and any resulting additional payments, refunds, or credits shall
be made promptly.

\(i\) Quarterly limitation on payments statement. This paragraph (i)
shall apply until a firm fixed price or a total final price is
established under subparagraph (d)(3) or (f)(2).

\(1\) Within 45 days after the end of each quarter of the Contractor\'s
fiscal year in which a delivery is first made (or services are first
performed) and accepted by the Government under this contract, and for
each quarter thereafter, the Contractor shall submit to the contract
administration office (with a copy to the contracting office and the
cognizant contract auditor) a statement, cumulative from the beginning
of the contract, showing-

\(i\) The total contract price of all supplies delivered (or services
performed) and accepted by the Government and for which final prices
have been established;

\(ii\) The total cost (estimated to the extent necessary) reasonably
incurred for, and properly allocable solely to, the supplies delivered
(or services performed) and accepted by the Government and for which
final prices have not been established;

\(iii\) The portion of the total interim profit (used in establishing
the initial contract price or agreed to for the purpose of this
paragraph (i)) that is in direct proportion to the supplies delivered
(or services performed) and accepted by the Government and for which
final prices have not been established-increased or decreased in
accordance with subparagraph (d)(4) above when the amount stated under
subdivision (ii), immediately above, differs from the aggregate firm
target costs of the supplies or services; and

\(iv\) The total amount of all invoices or vouchers for supplies
delivered (or services performed) and accepted by the Government
(including amounts applied or to be applied to liquidate payments).

\(2\) Notwithstanding any provision of this contract authorizing greater
payments, if on any quarterly statement the amount under subdivision
(1)(iv) above exceeds the sum due the Contractor, as computed in
accordance with subdivisions (1)(i), (ii), and (iii) above, the
Contractor shall immediately refund or credit to the Government the
amount of this excess. The Contractor may, when appropriate, reduce this
refund or credit by the amount of any applicable tax credits due the
Contractor under 26 U.S.C. 1481 and by the amount of previous refunds or
credits effected under this clause. If any portion of the excess has
been applied to the liquidation of payments, then that portion may,
instead of being refunded, be added to the unliquidated payment account
consistent with the payments clause. The Contractor shall provide
complete details to support any claimed reductions in refunds.

\(3\) If the Contractor fails to submit the quarterly statement within
45 days after the end of each quarter and it is later determined that
the Government has overpaid the Contractor, the Contractor shall repay
the excess to the Government immediately. Unless repaid within 30 days
after the end of the statement submittal period, the amount of the
excess shall bear interest, computed from the date the quarterly
statement was due to the date of repayment, at the rate established in
accordance with the \"Interest\" clause.

\(j\) Subcontracts. No subcontract placed under this contract may
provide for payment on a cost-plus-a-percentage-of-cost basis. The
Contractor shall-

\(1\) Insert in each price redetermination or incentive price revision
subcontract the substance of paragraph (i) above, and of this paragraph
(j), modified to omit mention of the Government and to reflect the
position of the Contractor as purchaser and of the subcontractor as
vendor, and to omit that part of subparagraph (i)(2) above relating to
tax credits; and

\(2\) Include in each cost-reimbursement subcontract a requirement that
each lower-tier price redetermination or incentive price revision
subcontract contain the substance of paragraph (i) above, and of this
paragraph (j), modified as required by subparagraph (j)(1), immediately
above.

\(k\) Disagreements. If the Contractor and the Contracting Officer fail
to agree upon (1) a total firm target cost and a final profit adjustment
formula or (2) a total final price, within 60 days (or within such other
period as the Contracting Officer may specify) after the date on which
the data required in paragraphs (c) and (e) above are to be submitted,
the Contracting Officer shall promptly issue a decision in accordance
with the \"Contract Disputes\" clause.

\(l\) Termination. If this contract is terminated before the total final
price is established, prices of supplies or services subject to price
revision shall be established in accordance with this clause for (1)
completed supplies and services accepted by the Government and (2) those
supplies or services not terminated under a partial termination. All
other elements of the termination shall be resolved in accordance with
other applicable clauses of this contract.

\(m\) Equitable adjustments under other clauses. If an equitable
adjustment in the contract price is made under any other clause of this
contract before the total final price is established, the adjustment
shall be made in the total target cost and may be made in the maximum
dollar limit on the total final price, the total target profit, or both.
If the adjustment is made after the total final price is established,
only the total final price shall be adjusted.

\(n\) Exclusion from target price and total final price. If any clause
of this contract provides that the contract price does not or will not
include an amount for a specific purpose, then neither any target price
nor the total final price includes or will include any amount for that
purpose.

\(o\) Separate reimbursement. If any clause of this contract expressly
provides that the cost of performance of an obligation shall be at
Government expense, that expense shall not be included in any target
price or in the total final price, but shall be reimbursed separately.

\(p\) Taxes. As used in the \"Federal, State, and Local Taxes-Fixed
Price Contract\" clause or in any other clause that provides for certain
taxes or duties to be included in, or excluded from, the contract price,
the term contract price includes the total target price or, if it has
been established, the total final price. When any of these clauses
requires that the contract price be increased or decreased as a result
of changes in the obligation of the Contractor to pay or bear the burden
of certain taxes or duties, the increase or decrease shall be made in
the total target price or, if it has been established, in the total
final price, so that it will not affect the Contractor\'s profit or loss
on this contract.

(End of clause)

NOTES: (1) The degree of completion may be based on a percentage of
contract performance or any other reasonable basis.

\(2\) The language may be changed to describe a negotiated adjustment
pattern under which the extent of adjustment is not the same for all
levels of cost variation.

PRESCRIPTION:

Should be used in SIR\'s and contracts when a fixed price incentive
(successive target) contract is contemplated. The Contracting Officer
should insert appropriate information in the clause.

**3.2.4-15/alt1** **Incentive Price Revision\--Successive Targets
Alternate I** (October 1996)

If the contract calls for supplies or services to be ordered under a
provisioning document or Government option and the prices are to be
subject to the incentive price revision described in the basic clause,
add the following paragraph (q) to the basic clause:

\(q\) Provisioning and options. Parts, other supplies, or services that
are to be furnished under this contract on the basis of a provisioning
document or Government option shall be subject to price revision in
accordance with this clause. Any prices established for these parts,
other supplies, or services under a provisioning document or Government
option shall be treated as initial target prices, or target prices as
agreed upon and stipulated in the pricing document supporting the
provisioning or added items. Initial or firm target costs and profits
and final prices covering these parts, other supplies, or services may
be established separately, in the aggregate, or in any combination, as
the parties may agree.

PRESCRIPTION:

Should be used when the contract calls for supplies or services to be
issued under a provisioning document or option and prices will be
subject to incentive price revisions.

**3.2.4-16** **Ordering** (October 1996)

\(a\) Any supplies and services to be furnished under this contract
shall be ordered by issuance of delivery orders or task orders by the
individuals or activities designated in the Schedule. Such orders may be
issued from \_\_\_\_\_ through \_\_\_\_\_ \[insert dates\].

\(b\) All delivery orders or task orders are subject to the terms and
conditions of this contract. In the event of conflict between a delivery
order or task order and this contract, the contract shall control.

\(c\) If mailed, a delivery order or task order is considered \"issued\"
when the Government deposits the order in the mail. Orders may be issued
orally, by facsimile, or by electronic commerce methods only if
authorized in the Schedule.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a definite quantity
contract, a requirements contract, or indefinite quantity contract is
contemplated. The Contracting Officer should insert appropriate
information in the clause.

**3.2.4-16/alt1** **Ordering Alternate I** (October 1996)

Include the following paragraph (d) in cost reimbursement indefinite
quantity contracts:

\(d\) The provisions of the clauses entitled \"Limitation of Costs\",
\"Limitation of Funds\", and \"Allowable Cost and Payment\" shall apply
to individual delivery orders or task orders.

(End of clause)

PRESCRIPTION:

Should be used in cost reimbursable, indefinite quantity.

**3.2.4-17** **Order Limitations** (October 1996)

\(a\) Minimum order. When the Government requires supplies or services
covered by this contract in an amount of less than \_\_\_\_\_\_ \[insert
dollar figure or quantity\], the Government is not obligated to
purchase, nor is the Contractor obligated to furnish, those supplies or
services under the contract.

\(b\) Maximum order. The Contractor is not obligated to honor-

\(1\) Any order for a single item in excess of \_\_\_\_\_\_ \[insert
dollar figure or quantity\];

\(2\) Any order for a combination of items in excess of \_\_\_\_\_\_
\[insert dollar figure or quantity\]; or

\(3\) A series of orders from the same ordering office within \_\_\_\_\_
days that together call for quantities exceeding the limitation in
subparagraph (1) or (2) above.

\(c\) If this is a requirements contract, the Government is not required
to order a part of any one requirement from the Contractor if that
requirement exceeds the maximum-order limitations in paragraph (b)
above.

\(d\) Notwithstanding paragraphs (b) and (c) above, the Contractor shall
honor any order exceeding the maximum order limitations in paragraph
(b), unless that order (or orders) is returned to the ordering office
within \_\_\_\_\_ days after issuance, with written notice stating the
Contractor\'s intent not to ship the item (or items) called for and the
reasons. Upon receiving this notice, the Government may acquire the
supplies or services from another source.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a definite quantity
contract, a requirements contract, or indefinite quantity contract is
contemplated. The Contracting Officer should insert appropriate
information in the clause.

**3.2.4-18** **Definite Quantity** (April 1996)

\(a\) This is a definite-quantity, indefinite-delivery contract for the
supplies or services specified, and effective for the period stated, in
the Schedule.

\(b\) The FAA shall order the quantity of supplies or services specified
in the Schedule, and the Contractor shall furnish them when ordered.
Delivery or performance shall be at locations designated in orders
issued in accordance with the \"Ordering\" clause and the \"Schedule.\"

\(c\) Except for any limitations on quantities in the \"Order
Limitations\" clause or in the Schedule, there is no limit on the number
of orders that may be issued. The FAA may issue orders requiring
delivery to multiple destinations or performance at multiple locations.

\(d\) Any order issued during the effective period of this contract and
not completed within that time shall be completed by the Contractor
within the time specified in the order. The contract shall govern the
Contractor\'s and FAA\'s rights and obligations with respect to that
order to the same extent as if the order were completed during the
contract\'s effective period; provided, that the Contractor shall not be
required to make any deliveries under this contract after
\_\_\_\_\_\_\_\_\_\_\_ \[insert date\].

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when a definite quantity contract
is contemplated. The Contracting Officer should insert appropriate
information in the clause.

**3.2.4-19** **Requirements** (October 1996)

\(a\) This is a requirements contract for the supplies or services
specified, and effective for the period stated, in the Schedule. The
quantities of supplies or services specified in the \"Schedule\" are
estimates only and are not purchased by this contract. Except as this
contract may otherwise provide, if the Government\'s requirements do not
result in orders in the quantities described as \"estimated\" or
\"maximum\" in the Schedule, that fact shall not constitute the basis
for an equitable price adjustment.

\(b\) Delivery or performance shall be made only as authorized by orders
issued in accordance with the Ordering clause. Subject to any
limitations in the Order Limitations clause or elsewhere in this
contract, the Contractor shall furnish to the Government all supplies or
services specified in the \"Schedule\" and called for by orders issued
in accordance with the Ordering clause. The Government may issue orders
requiring delivery to multiple destinations or performance at multiple
locations.

\(c\) Except as this contract otherwise provides, the Government shall
order from the Contractor all the supplies or services specified in the
\"Schedule\" that are required to be purchased by the Government
activity or activities specified in the \"Schedule.\"

\(d\) The Government is not required to purchase from the Contractor
requirements in excess of any limit on total orders under this contract.

\(e\) If the Government urgently requires delivery of any quantity of an
item before the earliest date that delivery may be specified under this
contract, and if the Contractor will not accept an order providing for
the accelerated delivery, the Government may acquire the urgently
required goods or services from another source.

\(f\) Any order issued during the effective period of this contract and
not completed within that period shall be completed by the Contractor
within the time specified in the order. The contract shall govern the
Contractor\'s and Government\'s rights and obligations with respect to
that order to the same extent as if the order were completed during the
contract\'s effective period; provided, that the Contractor shall not be
required to make any deliveries under this contract after
\_\_\_\_\_\_\_\_\_\_\_\_\_ \[insert date\].

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when a requirements contract is
contemplated. The Contracting Officer should insert appropriate
information in the clause.

**3.2.4-19/alt1** **Requirements Alternate I** (October 1996)

If the requirements contract is for nonpersonal services and related
supplies and covers estimated requirements that exceed a specific
Government activity\'s internal capability to produce or perform,
substitute the following paragraph (c) for paragraph (c) of the basic
clause:

\(c\) The estimated quantities are not the total requirements of the
Government activity specified in the Schedule, but are estimates of
requirements in excess of the quantities that the activity may itself
furnish within its own capabilities. Except as this contract otherwise
provides, the Government shall order from the Contractor all of that
activity\'s requirements for supplies and services specified in the
\"Schedule\" that exceed the quantities that the activity may itself
furnish within its own capabilities.

PRESCRIPTION:

Shall be used if the contract is for nonpersonal services and related
supplies and covers estimated requirements that exceed a specific
Government activity\'s internal capability.

**3.2.4-19/alt2** **Requirements Alternate II** (October 1996)

If the requirements contract includes subsistence for both Government
use and resale in the same Schedule, and similar products may be
acquired on a brand-name basis, add the following paragraph (g) to the
basic clause:

\(g\) The requirements referred to in this contract are for items to be
manufactured according to FAA specifications. Notwithstanding anything
to the contrary stated in the contract, the Government may acquire
similar products by brand name from other sources for resale.

PRESCRIPTION:

Shall be used if the contract includes subsistence for both Government
use and resale, and similar products may be acquired on a brand name
basis.

**3.2.4-19/alt3** **Requirements Alternate III** (October 1996)

If the requirements contract involves a partial small business
set-aside, substitute the following paragraph (c) for paragraph (c) of
the basic clause:

\(c\) The Government\'s requirements for each item or subitem of
supplies or services described in the \"Schedule\" are being purchased
through one non-set-aside contract and one set-aside contract.
Therefore, the Government shall order from each Contractor approximately
one-half of the total supplies or services specified in the \"Schedule\"
that are required to be purchased by the specified FAA activity or
activities. The Government may choose between the set-aside Contractor
and the non-set-aside Contractor in placing any particular order.
However, the Government shall allocate successive orders, in accordance
with its delivery requirements, to maintain as close a ratio as is
reasonably practicable between the total quantities ordered from the two
Contractors.

PRESCRIPTION:

Shall be used if the contract involves a partial small business
set-aside.

**3.2.4-19/alt4** **Requirements Alternate IV** (October 1996)

If the contract includes subsistence for both Government use and resale
in the same \"Schedule\" and similar products may be acquired on a
brand-name basis and the contract also involves a partial small business
set-aside, substitute the following paragraph (c) for paragraph (c) of
the basic clause and add the following paragraph (g) to the basic
clause:

\(c\) The Government\'s requirements for each item or subitem of
supplies or services described in the \"Schedule\" are being purchased
through one non-set-aside contract and one set-aside contract.
Therefore, the Government shall order from each Contractor approximately
one-half of the total supplies or services specified in the \"Schedule\"
that are required to be purchased by the specified FAA activity or
activities. The Government may choose between the set-aside Contractor
and the non-set-aside Contractor in placing any particular order.
However, the Government shall allocate successive orders, in accordance
with its delivery requirements, to maintain as close a ratio as is
reasonably practicable between the total quantities ordered from the two
Contractors.

\(g\) The requirements referred to in this contract are for items to be
manufactured according to the Government specifications. Notwithstanding
anything to the contrary stated in the contract, the Government may
acquire similar products by brand name from other sources for resale.

PRESCRIPTION:

Shall be used if the contract includes subsistence for both Government
use and resale, and similar products may be acquired on a brand name
basis and the contract involves a partial small business set-aside.

**3.2.4-20** **Indefinite Quantity** (July 1996)

\(a\) This is an indefinite-quantity contract for the supplies or
services specified, and effective for the period stated, in the
Schedule. The quantities of supplies and services specified in the
Schedule are estimates only and are not purchased by this contract.

\(b\) Delivery or performance shall be made only as authorized by orders
issued in accordance with the \"Ordering\" clause. The Contractor shall
furnish to the Government, when and if ordered, the supplies or services
specified in the Schedule up to and including the quantity designated in
the Schedule as the maximum. The Government shall order at least the
quantity of supplies or services designated in the Schedule as the
minimum.

\(c\) Except for any limitations on quantities in the \"Order
Limitations\" clause or in the Schedule, there is no limit on the number
of orders that may be issued. The Government may issue orders requiring
delivery to multiple destinations or performance at multiple locations.

\(d\) Any order issued during the effective period of this contract and
not completed within that period shall be completed by the Contractor
within the time specified in the order. The contract shall govern the
Contractor\'s and Government\'s rights and obligations with respect to
that order to the same extent as if the order were completed during the
contract\'s effective period; provided, that the Contractor shall not be
required to make any deliveries under this contract after \_\_\_\_\_\_
\[insert date\].

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when an indefinite quantity
contract is contemplated. The Contracting Officer should insert
appropriate information in the clause.

**3.2.4-21** **Execution and Commencement of Work** (April 1996)

The Contractor shall indicate acceptance of this letter contract by
signing three copies of the contract and returning them to the
Contracting Officer not later than \_\_\_\_\_\_\_\_\_\_\_ \[insert
date\]. Upon acceptance by both parties, the Contractor shall proceed
with performance of the work, including purchase of necessary materials.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when a letter contract is
contemplated except on letter contracts awarded on SF 26. The
Contracting Officer should insert appropriate information in the clause.

**3.2.4-22** **Limitation of Government Liability** (April 1996)

\(a\) In performing this contract, the Contractor is not authorized to
make expenditures or incur obligations exceeding \_\_\_\_\_\_\_\_\_\_\_
dollars.

\(b\) The maximum amount for which the Government shall be liable if
this contract is terminated is \_\_\_\_\_\_\_\_\_\_\_ dollars.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when a letter contract is
contemplated. The Contracting Officer should insert appropriate
information in the clause.

**3.2.4-23** **Contract Price Definitization** (April 1996)

\(a\) A \_\_\_\_\_ \[insert the type of contract\] contract is
contemplated. The Contractor agrees to begin promptly negotiating with
the Contracting Officer the price and any price related terms of a
\_\_\_\_\_ \[ insert the type of contract\] contract. The Contractor
agrees to submit a \_\_\_\_\_ \[insert specific type of proposal (e.g.,
fixed-price or cost-and-fee)\] proposal and cost or pricing data
supporting its proposal.

\(b\) The schedule for negotiating the price of this contract is
\[insert target date for definitization of the contract price and dates
for submission of proposal, beginning of negotiations, and, if
appropriate, submission of make-or-buy and subcontracting plans and cost
or pricing data\]:

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

\(c\) If agreement on the contract price is not reached by the target
date in paragraph (b) above, or within any extension of it granted by
the Contracting Officer, the Contracting Officer may, with the approval
of the head of the contracting activity, determine a reasonable price or
fee, subject to Contractor appeal as provided in the \"Contract
Disputes\" clause. In any event, the Contractor shall proceed with
completion of the contract, subject only to the \"Limitation of FAA
Liability\" clause.

\(1\) After the Contracting Officer\'s determination of price or fee,
the contract shall be governed by-

\(i\) All clauses required by the FAA Acquisition Management System on
the date of execution of this letter contract for either fixed-price or
cost-reimbursement contracts, as determined by the Contracting Officer
under this paragraph (c);

\(ii\) All clauses required by law as of the date of the Contracting
Officer\'s determination; and

\(iii\) Any other clauses, terms, and conditions mutually agreed upon.

\(2\) To the extent consistent with subparagraph (c)(1) above, all
clauses, terms, and conditions included in this letter contract shall
continue in effect, except those that by their nature apply only to a
letter contract.

\(d\) The definitive contract resulting from this letter contract will
include a total negotiated \_\_\_\_\_\_\_ \[insert the description of
the amount mutually agreed for the price ceiling, e.g. firm-fixed-price,
total estimated-cost-plus-fixed-fee, or other appropriate description\]
in no event to exceed \-\-\-- \[insert the mutually agreed amount of the
price ceiling\].

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when a letter contract is
contemplated. The Contracting Officer should insert appropriate
information in the clause.

**3.2.4-24** **Payments of Allowable Costs Before Definitization**
(April 2001)

\(a\) Reimbursement rate. Pending the completion of the negotiation to
definitize the estimated cost and fee of this letter contract, the
Government shall promptly reimburse the Contractor for all allowable
costs under this contract at the following rates:

\(1\) One hundred percent of approved costs representing payments to
subcontractors under fixed-price subcontracts; provided, that the
Government\'s payments to the Contractor shall not exceed 80 percent of
the allowable costs of those subcontractors.

\(2\) One hundred percent of approved costs representing cost-
reimbursement subcontracts; provided, that the Government\'s payments to
the Contractor shall not exceed 85 percent of the allowable costs of
those subcontractors.

\(3\) Eighty-five percent of all other approved costs.

\(b\) Limitation of reimbursement. To determine the amounts payable to
the Contractor under this letter contract, the Contracting Officer shall
determine allowable costs in accordance with the applicable cost
principles in the FAA Acquisition Management System. The total
reimbursement made under this paragraph shall not exceed 85 percent of
the maximum amount of the Government\'s liability, as stated in this
contract.

\(c\) Invoicing. Payments shall be made promptly to the Contractor when
requested as work progresses, but (except for small business concerns)
not more often than every 2 weeks, in amounts approved by the
Contracting Officer. The Contractor may submit to an authorized
representative of the Contracting Officer, in such form and reasonable
detail as the representative may require, an invoice or voucher
supported by a statement of the claimed allowable cost incurred by the
Contractor in the performance of this contract.

\(d\) Allowable costs. For the purpose of determining allowable costs,
the term costs includes-

\(1\) Costs that the contractor has incurred and recorded at the time of
the request for reimbursement;

\(2\) When the Contractor is not delinquent in payment of costs of
contract performance in the ordinary course of business, costs incurred,
but not necessarily paid, for\--

\(i\) Materials issued from the Contractor\'s stores inventory and
placed in the production process for use on the contract;

\(ii\) Direct labor;

\(iii\) Direct travel;

\(iv\) Other direct in-house costs; and

\(v\) Properly allocable and allowable indirect costs as shown on the
records maintained by the Contractor for purposes of obtaining
reimbursement under Government contracts; and

\(3\) The amount of payments that have been paid to the Contractor\'s
subcontractors under similar cost standards.

\(e\) Small business concerns. A small business concern may receive more
frequent payments than every 2 weeks and may invoice and be paid for
recorded costs for items or services purchased directly for the
contract, even though it has not yet paid for such items or services.

\(f\) Audit. At any time before final payment, the Contracting Officer
may have the Contractor\'s invoices or vouchers and statements of costs
audited. Any payment may be (1) reduced by any amounts found by the
Contracting Officer not to constitute allowable costs or (2) adjusted
for overpayments or underpayments made on preceding invoices or
vouchers.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when a letter/ceiling priced
contract is contemplated and a cost reimbursement definitized contract
is anticipated.

**3.2.4-25** **Single or Multiple Awards** (April 1996)

The FAA may elect to award a single delivery order contract or task
order contract or to award multiple delivery order contracts or task
order contracts for the same or similar supplies or services to two or
more sources.

(End of provision)

PRESCRIPTION:

Should be used in SIR\'s for indefinite quantity contracts that may
result in multiple contract awards. Do not use for advisory and
assistance services contracts that exceed 3 years and \$10,000,000. Can
be modified to specify the number of awards anticipated.

**3.2.4-26** **Multiple Awards for Advisory and Assistance Services**
(April 1996)

The FAA intends to award multiple contracts for the same or similar
advisory and assistance services to two or more sources unless the FAA
determines, after evaluation of offers, that only one offeror is capable
of providing the services at the level of quality required.

(End of provision)

PRESCRIPTION:

Should be used in SIR\'s for task order contracts for advisory and
assistance services contracts that exceed 3 years and \$10,000,000

**3.2.4-27** **Limitation of Price and Contractor Obligations** (April
1996)

\(a\) Funds available for performance are described in the Schedule. The
amount of funds available at award is not considered sufficient for the
performance required for any program year other than the first program
year. When additional funds are available for the full requirements of
the next succeeding program year, the Contracting Officer shall, not
later than the date specified in the \"Schedule\" (unless a later date
is agreed to), so notify the Contractor in writing. The Contracting
Officer shall also modify the amount of funds described in the
\"Schedule\" as available for contract performance. This procedure shall
apply for each successive program year.

\(b\) The FAA is not obligated to the Contractor for any amount over
that described in the \"Schedule\" as available for contract
performance.

\(c\) The Contractor is not obligated to incur costs for the performance
required for any program year after the first unless and until written
notification is received from the Contracting Officer of an increase in
availability of funds. If so notified, the Contractor\'s obligation
shall increase only to the extent contract performance is required for
the additional program year for which funds are made available.

\(d\) If this contract is terminated under the \"Termination for
Convenience of the Government\" clause, \'total contract price\' in that
clause means the amount available for performance of this contract, as
in paragraph (a) above, plus the amount established as the cancellation
ceiling. \'Work under the contract\' in that clause means the work under
program year requirements for which funds have been made available. If
the contract is terminated for default, the Government\'s rights under
this contract shall apply to the entire multi-year requirements.

\(e\) Notification to the Contractor of an increase or decrease in the
funds available for performance of this contract under another clause
(e.g., an \"Option\" or \"Changes\" clause) shall not constitute the
notification contemplated by paragraph (a) of this clause.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when a multiyear contract or a
multiyear modified requirements contract is contemplated

**3.2.4-28** **Cancellation of Items** (April 1996)

\(a\) \"Cancellation,\" as used in this clause, means that the
Government is canceling its requirements for all items in program years
subsequent to that in which notice of cancellation is provided.
Cancellation shall occur, by the date or within the time period
specified in the Schedule, (unless a later date is agreed to) if the
Contracting Officer (1) notifies the Contractor that funds are not
available for contract performance for any subsequent program year or
(2) fails to notify the Contractor that funds are available for
performance of the succeeding program year requirement.

\(b\) Except for cancellation under this clause or termination under the
\"Default\" clause, any reduction by the Contracting Officer in the
requirements of this contract shall be considered a termination under
the \"Termination for Convenience of the Government\" clause.

\(c\) If cancellation under this clause occurs, the Contractor will be
paid a cancellation charge not over the cancellation ceiling specified
in the \"Schedule\" as applicable at the time of cancellation.

\(d\) The cancellation charge will cover only (1) costs (i) incurred by
the prime contractor and/or subcontractor, (ii) reasonably necessary for
performance of the contract, and (iii) that would have been equitably
amortized in the unit prices for the entire multi-year contract period
but, because of the cancellation, are not so amortized, and (2) a
reasonable profit on the costs.

\(e\) The cancellation charge shall be computed and the claim made for
it as if the claim were being made under the \"Termination for
Convenience of the Government\" clause of this contract. The Contractor
shall submit the contract dispute promptly but no later than 1 year from
the date (1) of notification of the nonavailability of funds, or (2)
specified in the \"Schedule\" by which notification of the availability
of additional funds for the next succeeding program year is required to
be issued, whichever is earlier, unless extensions in writing are
granted by the Contracting Officer.

\(f\) The Contractor\'s contract dispute may include\--

\(1\) Reasonable nonrecurring costs which are applicable to and normally
would have been amortized in all items to be furnished under the
multi-year requirements;

\(2\) Allocable portions of the costs of facilities acquired or
established for the conduct of the work, to the extent that it is
impracticable for the Contractor to use the facilities in its commercial
work and if the costs are not charged to the contract through overhead
or otherwise depreciated;

\(3\) Costs incurred for the assembly, training, and transportation to
and from the job site of a specialized work force; and

\(4\) Costs not amortized by the unit price solely because the
cancellation had precluded anticipated benefits of Contractor or
subcontractor learning.

\(g\) The contract dispute shall not include\--

\(1\) Labor, material, or other expenses incurred by the Contractor or
subcontractors for performance of the canceled work;

\(2\) Any cost already paid to the Contractor;

\(3\) Anticipated profit on the canceled work; or

\(4\) For service contracts, the remaining useful commercial life of
facilities. \'Useful commercial life\' means the commercial utility of
the facilities rather than their physical life with due consideration
given to such factors as location of facilities, their specialized
nature, and obsolescence.

\(h\) This contract may include an \"Option\" clause with the period for
exercising the option limited to the date in the contract for
notification that funds are available for the next succeeding program
year. If so, the Contractor agrees not to include in the price for
option quantities any costs of a startup or nonrecurring nature, that
have been fully provided for in the unit prices of the firm quantities
of the program years. The Contractor further agrees that the prices
offered for option quantities will reflect only those recurring costs,
and a reasonable profit necessary to furnish the additional option
quantities.

\(i\) Quantities added to the original contract through the \"Option\"
clause of this contract shall be included in the quantity canceled for
the purpose of computing allowable cancellation charges.

(End of clause)

PRESCRIPTION:

Should be used a multiyear contract is contemplated

**3.2.4-28/alt1** **Cancellation of Items Alternate I** (April 1996)

Substitute the following paragraph (a) for paragraph (a) of the basic
clause, delete paragraph (b) of the basic clause, and redesignate the
remaining paragraphs accordingly:

CANCELLATION OF ITEMS

\(a\) As used herein, the term \'cancellation\' means that the FAA is
canceling, pursuant to this clause, its anticipated requirements for
items as set forth in the \"Schedule\" for all program years subsequent
to that in which notice of cancellation is provided. Such cancellation
shall occur if, by the date of within the time period specified in the
\"Schedule\" or such further time as may be agreed to, the Contracting
Officer:

\(1\) notifies the Contractor that funds will not be available for
contract performance for any subsequent program year or

\(2\) fails to notify the Contractor that funds will be available for
performance of a requirement for the succeeding program year.

\'Cancellation\' shall also be deemed to have occurred if, upon
expiration of a final program year, the Government has failed to order
the specified items in quantities up to the aggregate Best Estimated
Quantity set forth in the Schedule.

\(b\) Following cancellation under this clause of any program year(s),
the Government shall not be obligated to issue nor the Contractor to
accept any further orders under this contract occurs, the Contractor
will be paid a cancellation charge not over the cancellation ceiling
specified in the \"Schedule\" as applicable at the time of cancellation.

(End of clause)

PRESCRIPTION:

Should be used a multiyear modified requirements contract is awarded for
more than one program year

**3.2.4-29** **Evaluation Exclusive of Options** (April 1996)

The Government will evaluate offers for award purposes by including only
the price for the basic requirement; i.e., options will not be included
in the evaluation for award purposes.

(End of provision)

PRESCRIPTION:

Should be used in SIR\'s that include an option clause and do not
include provision 3.2.4-30 - Evaluation of Options Exercised at Time of
Contract Award or 3.2.4-31- Evaluation of Options.

**3.2.4-30** **Evaluation of Options Exercised at Time of Contract
Award** (April 1996)

Except when it is determined not to be in the Government\'s best
interests, the Government will evaluate the total price for the basic
requirement together with any option(s) exercised at the time of award.

(End of provision)

PRESCRIPTION:

Should be used in SIR\'s that include an option clause and there is a
reasonable likelihood that the option will be exercised and the option
may be exercised at time of award.

**3.2.4-31** **Evaluation of Options** (April 1996)

Except when it is determined not to be in the Government\'s best
interests, the Government will evaluate offers for award purposes by
adding the total price for all options to the total price for the basic
requirement. Evaluation of options will not obligate the Government to
exercise the option(s).

(End of provision)

PRESCRIPTION:

Should be used in SIR\'s that: (a) include an option clause; (b) the
option will not be exercised at time of award; (c) a firm fixed price
contract, a fixed price contract with economic price adjustment, or
other type of contract; and (d) the CO has determined that there is a
reasonable likelihood that the option will be exercised. The Contracting
Officer should insert appropriate information in the provision.

**3.2.4-32** **Option for Increased Quantity** (April 1996)

The Government may increase the quantity of supplies called for in the
Schedule at the unit price specified. The Contracting Officer may
exercise the option by written notice to the Contractor within
\_\_\_\_\_ \[insert in the clause the period of time in which the
Contracting Officer has to exercise the option\]. Delivery of the added
items shall continue at the rate as the like items called for under the
contract, unless the parties otherwise agree.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts, other than those for services,
when the option is expressed as a percentage of the basic contract
quantity or as an additional quantity of a specific line item. The
Contracting Officer should insert appropriate information in the
provision.

**3.2.4-33** **Option for Increased Quantity\--Separately Priced Line
Item** (April 1996)

The Government may require the delivery of the numbered line item,
identified in the Schedule as an option item, in the quantity and at the
price stated in the Schedule. The Contracting Officer may exercise the
option by written notice to the Contractor within \_\_\_\_\_ \[insert in
the clause the period of time in which the Contracting Officer has to
exercise the option\]. Delivery of added items shall continue at the
same rate that like items are called for under the contract, unless the
parties otherwise agree.

(End of clause)

PRESCRIPTION:

be used in SIR\'s and contracts, other than those for services, when the
option quantity is identified as a separately priced line item having
the same nomenclature as a corresponding basic contract line item. The
Contracting Officer should insert appropriate information in the
provision.

**3.2.4-34** **Option to Extend Services** (April 1996)

The Government may require continued performance of any services within
the limits and at the rates specified in the contract. These rates may
be adjusted only as a result of revisions to prevailing labor rates
provided by the Secretary of Labor. The option provision may be
exercised more than once, but the total extension of performance
hereunder shall not exceed 6 months. The Contracting Officer may
exercise the option by written notice to the Contractor within the
period specified in the Schedule.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when inclusion of an option is
appropriate.

**3.2.4-35** **Option to Extend the Term of the Contract** (April 1996)

\(a\) The Government may extend the term of this contract by written
notice to the Contractor within \_\_\_\_\_ \[insert in the clause the
period of time in which the Contracting Officer has to exercise the
option\]; provided, that the Government shall give the Contractor a
preliminary written notice of its intent to extend at least 60 days
before the contract expires. The preliminary notice does not commit the
Government to an extension.

\(b\) If the Government exercises this option, the extended contract
shall be considered to include this option provision.

\(c\) The total duration of this contract, including the exercise of any
options under this clause, shall not exceed \_\_\_ (months) \_\_\_\_
(years).

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when it is necessary to include a
requirement that the FAA give the contractor a preliminary written
notice of its intent to extend the contract, a stipulation that an
extension of the option, and/or a specified limitation on the total
duration of the contract. The Contracting Officer should insert
appropriate information in the clause.

**3.2.4-36** **Award Fee** (January 2004)

a\. The FAA shall pay the Contractor a base fee as well as an award fee
for performing this contract.

b\. The award fee will be determined based on a Contractor Performance
Evaluation Plan (PEP) which will be unilaterally established by the FAA.
The PEP will include the criteria to be considered under each area
evaluated; the percentage of award fee, if any, available for each area;
and the frequency of evaluation periods. A copy of the PEP will be
provided to the Contractor within thirty (30) days after contract award,
and within thirty (30) days subsequent to any approved revisions made to
the PEP during the execution of the contract. There will be no carry
forward of any unearned award fee to any subsequent award fee period.
Award fee will not be paid for performance that is below average or
unsatisfactory.

The award fee earned and payable will be determined by the Fee
Determining Official (FDO) in accordance with procedures in the PEP. The
FDO may, at any time, make unilateral administrative changes concerning
Contract award fee such as changes to the Performance Evaluation Board
membership, Performance Monitors, and other changes that do not impact
on evaluation procedures, computation of earned award fee, or
determination of award fee pools for specific evaluation performance
periods.

The FDO may also make unilateral changes that do impact on evaluation
procedures, computation of award fee, or determination of award fee
pools for specific evaluation performance periods, provided that any
such changes are communicated to the Contractor in writing no later than
30 calendar days after the commencement of the award fee evaluation
period in which the changes become effective. If no conflicts exist
between the changes to the Plan and the Contract, then changes will be
unilaterally invoked into the PEP without formal modification to the
Contract.

The PEP shall set forth the criteria upon which the Contractor will be
evaluated for performance relating to any:

\(1\) Technical (including Schedule) requirements as appropriate;

\(2\) Management; and

\(3\) Cost functions selected for evaluation.

Specific evaluation factors are identified in the PEP.

The award fee described in this clause and in the PEP is the only fee
payable to the prime or any other teammate/subcontractor. Any other
attempts to invoice the FAA for fees of any kind on the part of the
prime contractor, or on behalf of any other subcontractor, consultant,
interdivisional entity, etc. will be disallowed. The FAA will promptly
make payment of any Award Fee upon the submission by the Contractor to
the Contracting Officer, or his authorized representative, of a public
voucher or invoice in the amount of the total fee earned for the period
evaluated. The earned award fee will be incorporated into the contract
by modification.

It is agreed that the evaluation of Contractor performance shall be in
accordance with the PEP and that the Contractor shall be promptly
advised in writing of the award fee determination and the reasons why it
was or was not earned. The Contractor further agrees that the
determination as to the amount of award fee earned will be made by the
FDO and such determination concerning the amount of award fee earned is
binding on both parties and shall not be subject to appeal under the
FAA\'s Dispute Resolution Provisions or to any other administrative
board or court of law.

It is further agreed that the Contractor may submit a self-evaluation of
performance of each period under consideration. While it is recognized
that the basis for determination of the fee shall be the evaluation by
the FAA, any self-evaluation which is received within 20 days after the
end of the period being evaluated may be given such consideration, if
any, as the FDO shall find appropriate.

(End of Clause)

PRESCRIPTION:

To be used in SIRs and contracts when an award fee type of contract is
anticipated.

**3.2.5-1** **Officials Not to Benefit** (April 1996)

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
arising from it. However, this clause does not apply to this contract to
the extent that this contract is made with a corporation for the
corporation\'s general benefit.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 41 U.S.C. 22).

**3.2.5-2** **Independent Price Determination** (October 1996)

The offeror warrants that:

\(1\) The prices in this offer have been arrived at independently,
without, for the purpose of restricting competition, any consultation,
communication, or agreement with any other competitor relating to

\(i\) those prices,

\(ii\) the intention to submit an offer, or

\(iii\) the methods or factors used to calculate the prices offered;

\(2\) The prices in this offer have not been knowingly disclosed by the
contractor, directly or indirectly, to any other competitor before
receipt of offers unless otherwise required by law; and

\(3\) No attempt has been made by the contractor to induce any other
concern to submit or not to submit an offer for the purpose of
restricting competition.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s for firm fixed price or firm fixed price with
economic price adjustment if there is a possibility of price collusion
among the offerors.

**3.2.5-3** **Gratuities or Gifts** (January 1999)

\(a\) The FAA may terminate this contract for default if, after notice
and a hearing, the FAA Office of Dispute Resolution for Acquisition
determines that the Contractor, the contractor\'s agent, or other
representative:

\(1\) Offered or gave a gratuity or gift to an employee of the FAA; and

\(2\) Intended, by the gratuity or gift to obtain a contract or
favorable treatment under a contract.

\(b\) If this contract is terminated under paragraph (a) of this clause,
the FAA is entitled to pursue the same remedies as in a breach of
contract.

The rights and remedies of the FAA 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.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts.

**3.2.5-4** **Contingent Fees** (October 1996)

\(a\) The Contractor warrants that no person or selling agency has been
employed or retained to solicit or obtain this contract for a
commission, percentage, brokerage, or contingent fee, except bona fide
employees or bonafide, established commercial or selling agencies
employed by the contractor for the purpose of obtaining business.

\(b\) For breach or violation of this warranty, the Government has the
right to annul this contract without liability or to deduct from the
contract price or otherwise recover, the full amount of the contingent
fee.

\(c\) Definitions.

\(1\) \"Bona fide agency,\" as used in this clause, means an established
commercial or selling agency, maintained by a contractor for the purpose
of securing business, that neither exerts nor proposes to exert improper
influence to solicit or obtain Government contracts nor holds itself out
as being able to obtain any Government contract or contracts through
improper influence.

\(2\) \"Bona fide employee,\" as used in this clause, means a person,
employed by a contractor and subject to the contractor\'s supervision
and control as to time, place, and manner of performance, who neither
exerts nor proposes to exert improper influence to solicit or obtain
Government contracts nor holds out as being able to obtain any
Government contract or contracts through improper influence.

\(3\) \"Contingent fee,\" as used in this clause, means any commission,
percentage brokerage, or other fee that is contingent upon the success
that a person or concern has in securing a Government contract.

\(4\) \"Improper influence,\" as used in this clause, means any
influence that induces or tends to induce a Government employee or
officer to give consideration or to act regarding a Government contract
on any basis other than the merits of the matter.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts.

**3.2.5-5** **Anti-Kickback Procedures** (October 1996)

\(a\) Definitions.

\(1\) \'Kickback,\' as used in this clause, means any money, fee,
commission, credit, gift, gratuity, thing of value, or compensation of
any kind which is provided, directly or indirectly, to any prime
Contractor, prime Contractor employee, subcontractor, or subcontractor
employee for the purpose of improperly obtaining or rewarding favorable
treatment in connection with a prime contract or in connection with a
subcontract relating to a prime contract.

\(2\) \'Person,\' as used in this clause, means a corporation,
partnership, business association of any kind, trust, joint-stock
company, or individual.

\(3\) \'Prime contract,\' as used in this clause, means a contract or
contractual action entered into by the United States for the purpose of
obtaining supplies, materials, equipment, or services of any kind.

\(4\) \'Prime Contractor,\' as used in this clause, means a person who
has entered into a prime contract with the United States.

\(5\) \'Prime Contractor employee,\' as used in this clause, means any
officer, partner, employee, or agent of a prime Contractor.

\(6\) \'Subcontract,\' as used in this clause, means a contract or
contractual action entered into by a prime Contractor or subcontractor
for the purpose of obtaining supplies, materials, equipment, or services
of any kind under a prime contract.

\(7\) \'Subcontractor,\' as used in this clause, (1) means any person,
other than the prime Contractor, who offers to furnish or furnishes any
supplies, materials, equipment, or services of any kind under a prime
contract or a subcontract entered into in connection with such prime
contract and (2) includes any person who offers to furnish or furnishes
general supplies to the prime Contractor or a higher tier subcontractor.

\(8\) \'Subcontractor employee,\' as used in this clause, means any
officer, partner, employee, or agent of a subcontractor.

\(b\) The contractor warrants that it has not and will not be:

\(1\) Providing or attempting to provide or offering to provide any
kickback;

\(2\) Soliciting, accepting, or attempting to accept any kickback; or

\(3\) Including, directly or indirectly, the amount of any kickback in
the contract price charged by a prime Contractor to the United States or
in the contract price charged by a subcontractor to a prime Contractor
or higher tier subcontractor.

\(c\)

\(1\) The Contractor shall have in place and follow reasonable
procedures designed to prevent and detect possible violations described
in paragraph (b) of this clause in its own operations and direct
business relationships.

\(2\) When the Contractor has reasonable grounds to believe that a
violation described in paragraph (b) of this clause may have occurred,
the Contractor shall promptly report in writing the possible violation.
Such reports shall be made to the Inspector General of the Department of
Transportation or the Department of Justice.

\(3\) The Contractor shall cooperate fully with any Federal agency
investigating a possible violation described in paragraph (b) of this
clause.

\(4\) The Contracting Officer may

\(i\) offset the amount of the kickback against any moneys owed by the
United States under the prime contract and/or

\(ii\) direct that the Prime Contractor withhold from sums owed a
subcontractor under the prime contract the amount of the kickback. The
Contracting Officer may order that moneys withheld under subdivision
(c)(4)(ii) of this clause be paid over to the Government unless the
Government has already offset those moneys under subdivision (c)(4)(i)
of this clause. In either case, the Prime Contractor shall notify the
Contracting Officer when the moneys are withheld.

\(5\) The Contractor agrees to incorporate the substance of this clause,
including subparagraph (c)(5) but excepting subparagraph (c)(1), in all
subcontracts under this contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with (41 U.S.C.
51-58).

**3.2.5-6** **Restrictions on Subcontractor Sales to the FAA** (April
1996)

\(a\) Except as provided in (b) below, the Contractor shall not enter
into any agreement with an actual or prospective subcontractor, nor
otherwise act in any manner, which has or may have the effect of
restricting sales by such subcontractors directly to the FAA of any item
or process (including computer software) made or furnished by the
subcontractor under this contract or under any follow-on production
contract.

\(b\) The prohibition in (a) above does not preclude the Contractor from
asserting rights that are otherwise authorized by law or regulation.

\(c\) The Contractor agrees to incorporate the substance of this clause,
including this paragraph (c), in all subcontracts under this contract.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts expected to include subcontracts.

**3.2.5-6/alt1** **Restrictions on Subcontractor Sales to the FAA
Alternate I** (April 1996)

\(b\) The prohibition in paragraph (a) of this clause does not preclude
the Contractor from asserting rights that are otherwise authorized by
law or regulation. For acquisitions of commercial items, the prohibition
in paragraph (a) applies only to the extent that any agreement
restricting sales by subcontractors results in the FAA being treated
differently from any other prospective purchaser for the sale of the
commercial item(s).

PRESCRIPTION:

May be used when the acquisition is for commercial items.

**3.2.5-7** **Disclosure Regarding Payments to Influence Certain Federal
Transactions** (June 1999)

\(a\) Definitions.

\(1\) \"The Act,\" as used in this clause, means section 1352, title 31,
United States Code.

\(2\) \"Agency,\" as used in this clause, means executive agency, within
the meaning of 5 U.S.C. 101, 102, and 104(I), and any wholly owned
Government corporation within the meaning of 31 U.S.C. 9101..

\(3\) \"Covered Federal action,\" as used in this clause, means any of
the following Federal actions:

\(i\) The awarding of any Federal contract.

\(ii\) The making of any Federal grant.

\(iii\) The making of any Federal loan.

\(iv\) The entering into of any cooperative agreement.

\(v\) The extension, continuation, renewal, amendment, or modification
of any Federal contract, grant, loan, or cooperative agreement.

\(4\) \"Indian tribe\" and \"tribal organization,\" as used in this
clause, have the meaning provided in section 4 of the Indian
Self-Determination and Education Assistance Act (25 U.S.C. 450B) and
include Alaskan Natives.

\(5\) \"Influencing or attempting to influence,\" as used in this
clause, means making, with the intent to influence, any communication to
or appearance before an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member
of Congress in connection with any covered Federal action.

\(6\) \"Local government,\" as used in this clause, means a unit of
government in a State and, if chartered, established, or otherwise
recognized by a State for the performance of a governmental duty,
including a local public authority, a special district, an intrastate
district, a council of governments, a sponsor group representative
organization, and any other instrumentality of a local government.

\(7\) \"Officer or employee of an agency,\" as used in this clause,
includes the following individuals who are employed by an agency:

\(i\) An individual who is appointed to a position in the Government
under title 5, United States Code, including a position under a
temporary appointment.

\(ii\) A member of the uniformed services, as defined in subsection
101(3), title 37, United States Code.

\(iii\) A special Government employee, as defined in section 202, title
18, United States Code.

\(iv\) An individual who is a member of a Federal advisory committee, as
defined by the Federal Advisory Committee Act, title 5, United States
Code, appendix 2.

\(8\) \'Person,\' as used in this clause, means an individual,
corporation, company, association, authority, firm, partnership,
society, State, and local government, regardless of whether such entity
is operated for profit, or not for profit. This term excludes an Indian
tribe, tribal organization, or any other Indian organization with
respect to expenditures specifically permitted by other Federal law.

\(9\) \'Reasonable compensation,\' as used in this clause, means, with
respect to a regularly employed officer or employee of any person,
compensation that is consistent with the normal compensation for such
officer or employee for work that is not furnished to, not funded by, or
not furnished in cooperation with the Federal Government.

\(10\) \'Reasonable payment,\' as used in this clause, means, with
respect to professional and other technical services, a payment in an
amount that is consistent with the amount normally paid for such
services in the private sector.

\(11\) \'Recipient,\' as used in this clause, includes the Contractor
and all subcontractors. This term excludes an Indian tribe, tribal
organization, or any other Indian organization with respect to
expenditures specifically permitted by other Federal law.

\(12\) \'Regularly employed,\' as used in this clause, means, with
respect to an officer or employee of a person requesting or receiving a
Federal contract, an officer or employee who is employed by such person
for at least 130 working days within 1 year immediately preceding the
date of the submission that initiates agency consideration of such
person for receipt of such contract. An officer or employee who is
employed by such person for less than 130 working days within 1 year
immediately preceding the date of the submission that initiates agency
consideration of such person shall be considered to be regularly
employed as soon as he or she is employed by such person for 130 working
days.

\(13\) \'State,\' as used in this clause, means a State of the United
States, the District of Columbia, the Commonwealth of Puerto Rico, a
territory or possession of the United States, an agency or
instrumentality of a State, and multi-State, regional, or interstate
entity having governmental duties and powers.

\(b\) Prohibitions. The offeror, by signing its offer, hereby certifies
to the best of his or her knowledge and belief that:

\(1\) No Federal appropriated funds have been paid or will be paid to
any person for influencing or attempting to influence an officer or
employee of any agency, a Member of Congress, an officer or employee of
Congress, or an employee of a Member of Congress on his or her behalf in
connection with the awarding of any Federal contract, the making of any
Federal grant, the making of any Federal loan, the entering into of any
cooperative agreement, and the extension, continuation, renewal,
amendment or modification of any Federal contract, grant, loan, or
cooperative agreement;

\(2\) If any funds other than Federal appropriated funds (including
profit or fee received under a covered Federal action) have been paid,
or will be paid, to any person for influencing or attempting to
influence an officer or employee of any agency, a Member of Congress, an
officer or employee of Congress, or an employee of a Member of Congress
on his or her behalf in connection with the screening information
request (SIR), the offeror shall complete and submit, with its offer,
OMB Standard Form LLL, Disclosure of Lobbying Activities, to the
Contracting Officer; and

\(3\) He or she will include the language of this clause in all
subcontract awards at any tier and require that all recipients of
subcontract awards in excess of \$100,000 shall disclose accordingly.

\(4\) This certification and disclosure is a prerequisite for making or
entering into this contract imposed by the Act. Any person who makes a
prohibited expenditure or fails to file or amend a disclosure form,
shall be subject to a civil penalty of not less than \$10,000 and not
more than \$100,000, for each such failure.

\(c\) The prohibitions of the Act do not apply under the following
conditions:

\(1\) Agency and legislative liaison by own employees.

\(i\) The prohibition on the use of appropriated funds, in subparagraph
(b)(1) of this clause, does not apply in the case of a payment of
reasonable compensation made to an officer or employee of a person
requesting or receiving a covered Federal action if the payment is for
agency and legislative liaison activities not directly related to a
covered Federal action.

\(ii\) For purposes of subdivision (c)(1)(i) of this clause, providing
any information specifically requested by an agency or Congress is
permitted at any time.

\(iii\) The following agency and legislative liaison activities are
permitted at any time where they are not related to a specific
solicitation for any covered Federal action:

\(A\) Discussing with an agency the qualities and characteristics
(including individual demonstrations) of the person\'s products or
services, conditions or terms of sale, and service capabilities.

\(B\) Technical discussions and other activities regarding the
application or adaptation of the person\'s products or services for an
agency\'s use.

\(iv\) The following agency and legislative liaison activities are
permitted where they are prior to Screening Information Request (SIR) of
any covered Federal action:

\(A\) Providing any information not specifically requested but necessary
for an agency to make an informed decision about initiation of a covered
Federal action;

\(B\) Technical discussions regarding the preparation of an unsolicited
proposal prior to its official submission; and

\(C\) Capability presentations by persons seeking awards from an agency
pursuant to the provisions of a law authorizing such actions;

\(v\) Only those services expressly authorized by subdivision (c)(1)(i)
of this clause are permitted under this clause.

\(2\) Professional and technical services.

\(i\) The prohibition on the use of appropriated funds, in subparagraph
(b)(1) of this clause, does not apply in the case of:

\(A\) A payment of reasonable compensation made to an officer or
employee of a person requesting or receiving a covered Federal action or
an extension, continuation, renewal, amendment, or modification of a
covered Federal action, if payment is for professional or technical
services rendered directly in the preparation, submission, or
negotiation of submittal/offer or application for that Federal action or
for meeting requirements imposed by or pursuant to law as a condition
for receiving that Federal action.

\(B\) Any reasonable payment to a person, other than an officer or
employee of a person requesting or receiving a covered Federal action or
an extension, continuation, renewal, amendment, or modification of a
covered Federal action if the payment is for professional or technical
services rendered directly in the preparation, submission, or
negotiation of any submittal/offer or application for that Federal
action or for meeting requirements imposed by or pursuant to law as a
condition for receiving that Federal action. Persons other than officers
or employees of a person requesting or receiving a covered Federal
action include consultants and trade associations.

\(ii\) For purposes of subdivision (c)(2)(i) of this clause,
\'professional and technical services\' shall be limited to advice and
analysis directly applying any professional or technical discipline. For
example, drafting of a legal document accompanying a submittal/offer by
a lawyer is allowable. Similarly, technical advice provided by an
engineer on the performance or operational capability of a piece of
equipment rendered directly in the negotiation of a contract is
allowable. However, communications with the intent to influence made by
a professional (such as a licensed lawyer) or a technical person (such
as a licensed accountant) are not allowable under this section unless
they provide advice and analysis directly applying their professional or
technical expertise and unless the advice or analysis is rendered
directly and solely in the preparation, submission or negotiation of a
covered Federal action. Thus, for example, communications with the
intent to influence made by a lawyer that do not provide legal advice or
analysis directly and solely related to the legal aspects of his or her
client\'s submittal/offer, but generally advocate one proposal over
another are not allowable under this section because the lawyer is not
providing professional legal services. Similarly, communications with
the intent to influence made by an engineer providing an engineering
analysis prior to the preparation or submission of a submittal/offer are
not allowable under this section since the engineer is providing
technical services but not directly in the preparation, submission or
negotiation of a covered Federal action.

\(iii\) Requirements imposed by or pursuant to law as a condition for
receiving a covered Federal award include those required by law or
regulation and any other requirements in the actual award documents.

\(iv\) Only those services expressly authorized by subdivisions
(c)(2)(i) and (ii) of this clause are permitted under this clause.

\(v\) The reporting requirements herein shall not apply with respect to
payments of reasonable compensation made to regularly employed officers
or employees of a person.

\(d\) Disclosure.

\(1\) The Contractor who requests or receives from an agency a Federal
contract shall file with that agency a disclosure form, OMB Standard
Form LLL, Disclosure of Lobbying Activities, if such person has made or
has agreed to make any payment using nonappropriated funds (to include
profits from any covered Federal action), which would be prohibited
under subparagraph (b)(1) of this clause, if paid for with appropriated
funds.

\(2\) The Contractor shall file a disclosure form at the end of each
calendar quarter in which there occurs any event that materially affects
the accuracy of the information contained in any disclosure form
previously filed by such person under subparagraph (e)(1) of this
clause. An event that materially affects the accuracy of the information
reported includes:

\(i\) A cumulative increase of \$25,000 or more in the amount paid or
expected to be paid for influencing or attempting to influence a covered
Federal action; or

\(ii\) A change in the person(s) or individual(s) influencing or
attempting to influence a covered Federal action; or

\(iii\) A change in the officer(s), employee(s), or Member(s) contacted
to influence or attempt to influence a covered Federal action.

\(3\) The Contractor shall require the certification, and if required, a
disclosure form by any person who requests or receives any subcontractor
exceeding \$100,000 under the Federal contract.

\(4\) All subcontractor disclosure forms shall be forwarded from tier to
tier until received by the prime Contractor. The prime Contractor shall
submit all disclosures to the Contracting Officer at the end of the
calendar quarter in which the disclosure form is submitted by the
subcontractor.

\(e\) Agreement. The Contractor agrees not to make any payment
prohibited by this clause.

\(f\) Penalties.

\(1\) Any person who makes an expenditure prohibited under paragraph (b)
of this clause or fails to file or amend the disclosure form to be filed
or amended by paragraph (b) shall be subject to civil penalties as
provided for by 31 U.S.C. 1352. An imposition of a civil penalty does
not prevent the Government from seeking any other remedy that may be
applicable.

\(2\) Contractors may rely without liability on the representations made
by their subcontractors in the certification and in the disclosure form.

\(g\) Cost allowability. Nothing in this clause makes allowable or
reasonable any costs which would otherwise be unallowable or
unreasonable. Conversely, costs made specifically unallowable by the
requirements in this clause will not be made allowable under any other
provision.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts expected to exceed \$100,000 (in
accordance with 31 U.S.C. 1353).

**3.2.5-8** **Whistleblower Protection for Contractor Employees** (April
1996)

The contractor agrees not to discharge, demote or otherwise discriminate
against an employee as a reprisal for disclosing information to a Member
of Congress, or an authorized official of an agency or of the Department
of Justice, relating to a substantial violation of law related to this
contract (including the competition for or negotiation of a contract).

Definitions:

\(1\) \"Authorized official of the agency\" means an employee
responsible for contracting, program management, audit, inspection,
investigation, or enforcement of any law or regulation relating to FAA
procurement or the subject matter of the contract.

\(2\) \"Authorized official of the Department of Justice\" means any
person responsible for the investigation, enforcement, or prosecution of
any law or regulation.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts.

**3.2.5-9** **RESERVED.**

PRESCRIPTION:

**3.2.5-10** **RESERVED.**

PRESCRIPTION:

**3.2.5-11** **RESERVED** (April 1996)

.

PRESCRIPTION:

.

**3.2.5-12** **RESERVED** (July 2002)

.

PRESCRIPTION:

.

**3.3.1-1** **Payments** (April 1996)

The FAA shall pay the Contractor, upon the submission of proper
invoices, the prices stipulated in this contract for supplies delivered
and accepted or services rendered and accepted, less any deductions
provided in this contract. Unless otherwise specified, payment shall be
made upon acceptance of partial deliveries or any portion of the work
delivered or rendered for which a price is separately stated in the
contract.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a fixed price supply
contract, fixed price service contract or a contract for nonregulated
communications services is contemplated

**3.3.1-2** **Payments under Fixed-Price Construction Contracts** (April
1996)

\(a\) The FAA shall pay the Contractor the contract price as provided in
this contract.

\(b\) The FAA shall make financing payments monthly as the work
proceeds, or at more frequent intervals as determined by the Contracting
Officer, on estimates of work accomplished which meets the standards of
quality established under the contract, as approved by the Contracting
Officer. The Contractor shall furnish a breakdown of the total contract
price showing the amount included therein for each principal category of
the work, which shall substantiate the payment amount requested in order
to provide a basis for determining financing payments, in such detail as
requested by the Contracting Officer. In the preparation of estimates
the Contracting Officer may authorize material delivered on the site and
preparatory work done to be taken into consideration. Material delivered
to the Contractor at locations other than the site may also be taken
into consideration if \--

\(1\) Consideration is specifically authorized by this contract; and

\(2\) The Contractor furnishes satisfactory evidence that it has
acquired title to such material and that the material will be used to
perform this contract.

\(c\) Along with each request for financing payments, the contractor
shall furnish the following certification, or payment shall not be made:

I hereby certify, to the best of my knowledge and belief, that-

\(1\) The amounts requested are only for performance in accordance with
the specifications, terms, and conditions of the contract;

\(2\) Payments to subcontractors and suppliers have been made from
previous payments received under the contract, and timely payments will
be made from the proceeds of the payment covered by this certification,
in accordance with subcontract agreements and the requirements of
chapter 39 of Title 31, United States Code; and

\(3\) This request for financing payments does not include any amounts
which the prime contractor intends to withhold or retain from a
subcontractor or supplier in accordance with the terms and conditions of
the subcontract.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(Name)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(Title)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(Date)

\(d\) If the Contractor, after making a certified request for financing
payments, discovers that a portion or all of such request constitutes a
payment for performance by the Contractor that fails to conform to the
specifications, terms, and conditions of this contract (hereinafter
referred to as the unearned amount), the Contractor shall-

\(1\) Notify the Contracting Officer of such performance deficiency;

\(2\) Be obligated to pay the FAA an amount (computed by the Contracting
Officer in the manner provided in \"Interest\" clause) equal to interest
on the unearned amount from the date of receipt of the unearned amount
until-

\(i\) The date the Contractor notifies the Contracting Officer that the
performance deficiency has been corrected; or

\(ii\) The date the Contractor reduces the amount of any subsequent
certified request for financing payments by an amount equal to the
unearned amount.

\(e\) If the Contracting Officer finds that satisfactory progress was
achieved during any period for which a progress payment is to be made,
the Contracting Officer shall authorize payment to be made in full.
However, if satisfactory progress has not been made, the Contracting
Officer may retain a maximum of 10 percent of the amount of the payment
until satisfactory progress is achieved. When the work is substantially
complete, the Contracting Officer may retain from previously withheld
funds and future financing payments that amount the Contracting Officer
considers adequate for protection of the FAA and shall release to the
Contractor all the remaining withheld funds. Also, on completion and
acceptance of each separate building, public work, or other division of
the contract, for which the price is stated separately in the contract,
payment shall be made for the completed work without retention of a
percentage.

\(f\) All material and work covered by financing payments made shall, at
the time of payment, become the sole property of the FAA , but this
shall not be construed as\--

\(1\) Relieving the Contractor from the sole responsibility for all
material and work upon which payments have been made or the restoration
of any damaged work; or

\(2\) Waiving the right of the FAA to require the fulfillment of all of
the terms of the contract.

\(g\) In making these financing payments, the FAA shall, upon request,
reimburse the Contractor for the amount of premiums paid for performance
and payment bonds (including coinsurance and reinsurance agreements,
when applicable) after the Contractor has furnished evidence of full
payment to the surety. The retainage provisions in paragraph (e) above
shall not apply to that portion of financing payments attributable to
bond premiums.

\(h\) The FAA shall pay the amount due the Contractor under this
contract after-

\(1\) Completion and acceptance of all work;

\(2\) Presentation of a properly executed voucher; and

\(3\) Presentation of release of all claims against the FAA arising by
virtue of this contract, other than claims, in stated amounts, that the
Contractor has specifically excepted from the operation of the release.
A release may also be required of the assignee if the Contractor\'s
claim to amounts payable under this contract has been assigned.

\(i\) Notwithstanding any provision of this contract, financing payments
shall not exceed 80 percent on work accomplished on undefinitized
contract actions. A contract action is any action resulting in a
contract, including contract modifications for additional supplies or
services, but not including contract modifications that are within the
scope and under the terms of the contract, such as contract
modifications issued pursuant to the \"Changes\" clause, or funding and
other administrative changes.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for construction when a fixed
price contract is contemplated

**3.3.1-3** **Payments under Fixed-Price Architect-Engineer Contracts**
(April 1996)

\(a\) Estimates shall be made monthly of the amount and value of the
work accomplished and services performed by the Contractor under this
contract which meet standards of quality established under this
contract. The estimates shall be prepared by the Contractor and
accompanied by any supporting data required by the Contracting Officer.

\(b\) Upon approval of the estimate by the Contracting Officer, payment
upon properly executed vouchers shall be made to the Contractor, as soon
as practicable, of 90 percent of the approved amount, less all previous
payments; provided, that payment may be made in full during any months
in which the Contracting Officer determines that performance has been
satisfactory. Also, whenever the Contracting Officer determines that the
work is substantially complete and that the amount retained is in excess
of the amount adequate for the protection of the FAA , the Contracting
Officer may release the excess amount to the Contractor.

\(c\) Upon satisfactory completion by the Contractor and acceptance by
the Contracting Officer of the work done by the Contractor under the
Statement of Architect-Engineer Services, the Contractor will be paid
the unpaid balance of any money due for work under the statement,
including retained percentages relating to this portion of the work.
Upon satisfactory completion and final acceptance of the construction
work, the Contractor shall be paid any unpaid balance of money due under
this contract.

\(d\) Before final payment under the contract, or before settlement upon
termination of the contract, and as a condition precedent thereto, the
Contractor shall execute and deliver to the Contracting Officer a
release of all claims against the FAA arising under or by virtue of this
contract, other than any claims that are specifically excepted by the
Contractor from the operation of the release in amounts stated in the
release.

\(e\) Notwithstanding any other provision in this contract, and
specifically paragraph (b) of this clause, financing payments shall not
exceed 80 percent on work accomplished on undefinitized contract
actions. A contract action is any action resulting in a contract,
including contract modifications for additional supplies or services,
but not including contract modifications that are within the scope and
under the terms of the contract, such as contract modifications issued
pursuant to the \"Changes\" clause, or funding and other administrative
changes.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a fixed price
architect-engineering contract is contemplated

**3.3.1-4** **Payment under Communication Service Contracts with Common
Carriers** (April 1996)

The FAA shall pay the Contractor, in arrears, upon submission of
invoices for services and facilities furnished in accordance with the
terms of CSAs issued under this contract, the rates and charges for the
services and facilities as set forth in the clause entitled \"Rates,
Charges and Services.\"

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for regulated communication
services by common carriers

**3.3.1-5** **Payments under Time-and-Materials and Labor-Hour
Contracts** (April 2001)

The Government shall pay the Contractor as follows upon the submission
of invoices or vouchers approved by the Contracting Officer:

\(a\) Hourly rate.

\(1\) The amounts shall be computed by multiplying the appropriate
hourly rates prescribed in the \"Schedule\" by the number of direct
labor hours performed. The rates shall include wages, indirect costs,
general and administrative expense, and profit. Fractional parts of an
hour shall be payable on a prorated basis. Vouchers may be submitted
once each month (or at more frequent intervals, if approved by the
Contracting Officer), to the Contracting Officer or designee. The
Contractor shall substantiate vouchers by evidence of actual payment and
by individual daily job timecards, or other substantiation approved by
the Contracting Officer. Promptly after receipt of each substantiated
voucher, the Government shall, except as otherwise provided in this
contract, and subject to the terms of (e) below, pay the voucher as
approved by the Contracting Officer.

\(2\) Unless otherwise prescribed in the \"Schedule\", the Contracting
Officer shall withhold 5 percent of the amounts due under this paragraph
(a), but the total amount withheld shall not exceed \$50,000. The
amounts withheld shall be retained until the execution and delivery of a
release by the Contractor as provided in paragraph (f) below.

\(3\) Unless the \"Schedule\" prescribes otherwise, the hourly rates in
the \"Schedule\" shall not be varied by virtue of the Contractor having
performed work on an overtime basis. If no overtime rates are provided
in the \"Schedule\" and they are required for overtime work that is
approved in advance by the Contracting Officer, overtime rates shall be
negotiated. Failure to agree upon these overtime rates shall be treated
as a dispute. If the \"Schedule\" provides rates for overtime, the
premium portion of those rates will be reimbursable only to the extent
the overtime is approved by the Contracting Officer.

\(b\) Materials and subcontracts.

\(1\) Allowable costs of direct materials shall be determined by the
Contracting Officer in accordance with the Federal Aviation
Administration\'s (FAA) \"Contract Cost Principles\" in effect on the
date of this contract. Reasonable and allocable material handling costs
may be included in the charge for material to the extent they are
clearly excluded from the hourly rate. Material handling costs are
comprised of indirect costs, including, when appropriate, general and
administrative expense allocated to direct materials in accordance with
the Contractor\'s usual accounting practices consistent with FAA
\"Contract Cost Principles.\" The Contractor shall be reimbursed for
items and services purchased directly for the contract only. Direct
materials, as used in this clause, are those materials which enter
directly into the end product, or which are used or consumed directly in
connection with the furnishing of the end product.

\(2\) The cost of subcontracts that are authorized under the
subcontracts clause of this contract shall be reimbursable costs under
this clause; provided, that the costs are consistent with subparagraph
(3) below. Reimbursable costs in connection with subcontracts shall be
limited to the amounts incurred by the subcontractor in the same manner
as for items and services purchased directly for the contract under
subparagraph (1) above; however, this requirement shall not apply to a
Contractor that is a small business concern. Reimbursable costs shall
not include any costs arising from the letting, administration or
supervision of performance of the subcontract, if the costs are included
in the hourly rates payable under (a)(1) above.

\(3\) To the extent able, the Contractor shall-

\(i\) Obtain materials at the most advantageous prices available with
due regard to securing prompt delivery of satisfactory materials; and

\(ii\) Take all cash and trade discounts, rebates, allowances, credits,
salvage, commissions, and other benefits. When unable to take advantage
of the benefits, the Contractor shall promptly notify the Contracting
Officer and give the reasons. Credit shall be given to the Government
for cash and trade discounts, rebates, allowances, credits, salvage, the
value of any appreciable scrap, commissions, and other amounts that have
accrued to the benefit of the Contractor, or would have accrued except
for the fault or neglect of the Contractor. The benefits lost without
fault or neglect on the part of the Contractor, or lost through fault of
the Government, shall not be deducted from gross costs.

\(c\) Total cost. It is estimated that the total cost to the Government
for the performance of this contract shall not exceed the ceiling price
set forth in the \"Schedule\" and the Contractor agrees to use its best
efforts to perform the work specified in the \"Schedule\" and all
obligations under this contract within such ceiling price. If at any
time the Contractor has reason to believe that the hourly rate payments
and material costs that will accrue in performing this contract in the
next succeeding 30 days, if added to all other payments and costs
previously accrued, will exceed 85 percent of the ceiling price in the
\"Schedule\", the Contractor shall notify the Contracting Officer giving
a revised estimate of the total price to the Government for performing
this contract with supporting reasons and documentation. If at any time
during performing this contract, the Contractor has reason to believe
that the total price to the Government for performing this contract will
be substantially greater or less than the then stated ceiling price, the
Contractor shall so notify the Contracting Officer, giving a revised
estimate of the total price for performing this contract, with
supporting reasons and documentation. If at any time during performing
this contract, the Government has reason to believe that the work to be
required in performing this contract will be substantially greater or
less than the stated ceiling price, the Contracting Officer will so
advise the Contractor, giving the then revised estimate of the total
amount of effort to be required under the contract.

\(d\) Ceiling price. The Government shall not be obligated to pay the
Contractor any amount in excess of the ceiling price in the
\"Schedule\", and the Contractor shall not be obligated to continue
performance if to do so would exceed the ceiling price set forth in the
\"Schedule\", unless and until the Contracting Officer shall have
notified the Contractor in writing that the ceiling price has been
increased and shall have specified in the notice a revised ceiling that
shall constitute the ceiling price for performance under this contract.
When and to the extent that the ceiling price set forth in the
\"Schedule\" has been increased, any hours expended and material costs
incurred by the Contractor in excess of the ceiling price before the
increase shall be allowable to the same extent as if the hours expended
and material costs had been incurred after the increase in the ceiling
price.

\(e\) Audit. At any time before final payment under this contract the
Contracting Officer may request audit of the invoices or vouchers and
substantiating material. Each payment previously made shall be subject
to reduction to the extent of amounts, on preceding invoices or
vouchers, that are found by the Contracting Officer not to have been
properly payable and shall also be subject to reduction for overpayments
or to increase for underpayments. Upon receipt and approval of the
voucher or invoice designated by the Contractor as the completion
voucher or completion invoice and substantiating material, and upon
compliance by the Contractor with all terms of this contract (including,
without limitation, terms relating to patents and the terms of (f) and
(g) below), the Government shall promptly pay any balance due the
Contractor. The completion invoice or voucher, and substantiating
material, shall be submitted by the Contractor as promptly as
practicable following completion of the work under this contract, but in
no event later than 1 year (or such longer period as the Contracting
Officer may approve in writing) from the date of completion.

\(f\) Assignment. The Contractor, and each assignee under an assignment
entered into under this contract and in effect at the time of final
payment under this contract, shall execute and deliver, at the time of
and as a condition precedent to final payment under this contract, a
release discharging the Government, its officers, agents, and employees
of and from all liabilities, obligations, and claims arising out of or
under this contract, subject only to the following exceptions:

\(1\) Specified claims in stated amounts, or in estimated amounts if the
amounts are not susceptible of exact statement by the Contractor.

\(2\) Claims, together with reasonable incidental expenses, based upon
the liabilities of the Contractor to third parties arising out of
performing this contract, that are not known to the Contractor on the
date of the execution of the release, and of which the Contractor gives
notice in writing to the Contracting Officer not more than 2 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.

\(3\) Claims for reimbursement of costs (other than expenses of the
Contractor by reason of its indemnification of the Government against
patent liability), including reasonable incidental expenses, incurred by
the Contractor under the terms of this contract relating to patents.

\(g\) Refunds. The Contractor agrees that any refunds, rebates, or
credits (including any related interest) accruing to or received by the
Contractor or any assignee, that arise under the materials portion of
this contract and for which the Contractor has received reimbursement,
shall be paid by the Contractor to the Government. The Contractor and
each assignee, under an assignment entered into under this contract and
in effect at the time of final payment under this contract, shall
execute and deliver, at the time of and as a condition precedent to
final payment under this contract, an assignment to the Government of
such refunds, rebates, or credits (including any interest) in form and
substance satisfactory to the Contracting Officer.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a time and materials or
labor hour contracts contemplated

**3.3.1-5/alt1** **Payments under Time-and-Materials and Labor-Hour
Contracts Alternate I** (October 1996)

If the nature of the work to be performed requires the contractor to
furnish material that is regularly sold to the general public in the
normal course of business by the contractor, and the material will be
charged at other than cost (and material to be charged is identified in
the contract and no element of profit on material is included as profit
in the fixed hourly labor rates) add the following subparagraph (4) to
paragraph (b) of the basic clause:

\(4\) If the nature of the work to be performed requires the Contractor
to furnish material which is regularly sold to the general public in the
normal course of business by the Contractor, the price to be paid for
such material, notwithstanding (b)(1) above, shall be on the basis of an
established catalog or list price, in effect when the material is
furnished, less all applicable discounts to the Government; provided,
that in no event shall such price be in excess of the Contractor\'s
sales price to its most favored customer for the same item in like
quantity, or the current market price, whichever is lower.

PRESCRIPTION:

Should be used when the work to be performed requires the contractor to
furnish material that is regularly sold to the general public in the
normal course of business, material is: (a) less than 20% of the
contract price;(b) identified in the contract; and c. excluded from
profit in the hourly rate, and the contract states material prices will
be based on catalog/list prices which do not exceed prices for most
favored customers.

**3.3.1-5/alt2** **Payments under Time-and-Materials and Labor-Hour
Contracts Alternate II** (October 1996)

If a labor-hour contract is contemplated, and if no specific
reimbursement for materials furnished is intended, the Contracting
Officer may add the following paragraph (h) to the basic clause:

\(h\) The terms of this clause that govern reimbursement for materials
furnished are considered to have been deleted.

PRESCRIPTION:

Should be used if a labor hour contract is contemplated and if no
specific reimbursement for materials furnished is intended..

**3.3.1-5/alt3** **Payments Under Time-and-Materials and Labor-Hour
Contracts** (April 2001)

Substitute the following subparagraph (b) for subparagraph (b) of the
basic clause.

\(b\) Materials and subcontracts.

\(1\) Allowable costs of direct materials shall be determined by the
Contracting Officer in accordance with the Federal Aviation
Administration\'s (FAA) \"Contract Cost Principles\" in effect on the
date of this contract. Reasonable and allocable material handling costs
may be included in the charge for material to the extent they are
clearly excluded from the hourly rate. Material handling costs are
comprised of indirect costs, including, when appropriate, general and
administrative expense allocated to direct materials in accordance with
the Contractor\'s usual accounting practices consistent with FAA
\"Contract Cost Principles.\" Direct materials, as used in this clause,
are those materials which enter directly into the end product, or which
are used or consumed directly in connection with the furnishing of the
end product.

\(2\) The Contractor shall be reimbursed for costs incurred for items
and services purchased directly for the contract only, subject to the
following:

\(i\) The Contractor requests application of this alternate provision
and the and FAA Contracting Officer\'s adopts this alternate via a
bilateral contract modification reflecting this Alternate III to the
basic clause.; and

\(ii\) The Contractor flows down the provisions of this subparagraph to
its subcontractors at all tiers. The Contracotr shall submit
documentation to this effect at the time it requests a contract
modification adopting this subparagraph (b)(2).

\(3\) The cost of subcontracts that are authorized under the
subcontracts clause of this contract shall be reimbursable costs under
this clause; provided, that the costs are consistent with subparagraph
(3) below. Reimbursable costs in connection with subcontracts shall be
limited to the amounts incurred by the subcontractor in the same manner
as for items and services purchased directly for the contract under
subparagraph (1) above; however, this requirement shall not apply to a
Contractor that is a small business concern. Reimbursable costs shall
not include any costs arising from the letting, administration or
supervision of performance of the subcontract, if the costs are included
in the hourly rates payable under (a)(1) above.

\(4\) To the extent able, the Contractor shall-

\(i\) Obtain materials at the most advantageous prices available with
due regard to securing prompt delivery of satisfactory materials; and

\(ii\) Take all cash and trade discounts, rebates, allowances, credits,
salvage, commissions, and other benefits. When unable to take advantage
of the benefits, the Contractor shall promptly notify the Contracting
Officer and give the reasons. Credit shall be given to the Government
for cash and trade discounts, rebates, allowances, credits, salvage, the
value of any appreciable scrap, commissions, and other amounts that have
accrued to the benefit of the Contractor, or would have accrued except
for the fault or neglect of the Contractor. The benefits lost without
fault or neglect on the part of the Contractor, or lost through fault of
the Government, shall not be deducted from gross costs.

PRESCRIPTION:

May be used in time and material or labor hour contracts in existence
prior to inception of this alternate clause (April 2001).

**3.3.1-6** **Discounts for Prompt Payment** (April 1996)

\(a\) Discounts for prompt payment will not be considered in the
evaluation of offers. However, any offered discount will form a part of
the award, and will be taken if payment is made within the discount
period indicated in the offer by the offeror. As an alternative to
offering a prompt payment discount in conjunction with the offer,
offerors awarded contracts may include prompt payment discounts on
individual invoices.

\(b\) In connection with any discount offered for prompt payment, time
shall be computed from the date of the invoice. For the purpose of
computing the discount earned, payment shall be considered to have been
made on the date which appears on the payment check or the date on which
an electronic funds transfer was made.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when a fixed price supply contract
or fixed price service contract is contemplated

**3.3.1-7** **Limitation on Withholding of Payments** (April 1996)

If more than one clause or \"Schedule\" term of this contract authorizes
the temporary withholding of amounts otherwise payable to the Contractor
for supplies delivered or services performed, the total of the amounts
withheld at any one time shall not exceed the greatest amount that may
be withheld under any one clause or \"Schedule\" term at that time;
provided, that this limitation shall not apply to-

\(a\) Withholdings pursuant to any clause relating to wages or hours of
employees;

\(b\) Withholdings not specifically provided for by this contract;

\(c\) The recovery of overpayments; and

\(d\) Any other withholding for which the Contracting Officer determines
that this limitation is inappropriate.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when a supply contract, research and
development contract, service contract, time and materials contractor
labor hour contract is contemplated that includes two or more terms
authorizing the temporary withholding of amounts otherwise payable to
the contractor for supplies delivered or services performed.

**3.3.1-8** **Extras** (April 1996)

Except as otherwise provided in this contract, no payment for extras
shall be made unless such extras and the price therefor have been
authorized in writing by the Contracting Officer.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when a fixed price supply contract,
fixed price service contract or a transportation contract is
contemplated.

**3.3.1-9** **Interest** (April 1996)

\(a\) Notwithstanding any other clause of this contract, all amounts
that become payable by the Contractor to the FAA or by the FAA to the
Contractor under this contract (net of any applicable tax credit under
the Internal Revenue Code (26 U.S.C. 1481)) shall bear simple interest
from the date due until paid unless paid within 30 days of becoming due.
The interest rate shall be the interest rate established by the
Secretary of the Treasury, referred to as the \'Renegotiation Board
Interest Rate,\' (It is published in the Federal Register semiannually
on or about January 1 and July 1), which is applicable to the period in
which the amount becomes due, as provided in paragraph (b) of this
clause, and then at the rate applicable for each six-month period as
fixed by the Secretary until the amount is paid.

\(b\) Amounts shall be due at the earliest of the following dates:

\(1\) The date fixed under this contract.

\(2\) The date of the first written demand for payment consistent with
this contract, including any demand resulting from a default
termination.

\(3\) The date the FAA transmits to the Contractor a proposed
supplemental agreement to confirm completed negotiations establishing
the amount of debt.

\(4\) If this contract provides for revision of prices, the date of
written notice to the Contractor stating the amount of refund payable in
connection with a pricing proposal or a negotiated pricing agreement not
confirmed by contract modification.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts that are not cost reimbursement,
time and materials or labor hour. In addition, use of the clause is
optional if the contract falls into one of the following categories: (a)
contracts at or below \$100,000; (b) contracts with Government agencies;
(c) contracts with a state or local government or instrumentality; (d)
contracts with a foreign government or instrumentality; (e) contracts
without any provision for profit or fee with a nonprofit organization;
(f) contracts for paid advertisements; or (g) any other exceptions
authorized under FAA procedures.

**3.3.1-10** **Availability of Funds** (April 1996)

Funds are not presently available for this contract. The FAA \'s
obligation under this contract is contingent upon the availability of
appropriated funds from which payment for contract purposes can be made.
No legal liability on the part of the FAA for any payment may arise
until funds are made available to the Contracting Officer for this
contract and until the Contractor receives notice of such availability,
to be confirmed in writing by the Contracting Officer.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 31 U.S.C.
1341) if the contract will be chargeable to funds of the new fiscal year
and the contracting action is to be initiated before the funds are
available.

**3.3.1-11** **Availability of Funds for the Next Fiscal Year** (April
1996)

Funds are not presently available for performance under this contract
beyond \-\-\-\--. The FAA \'s obligation for performance of this
contract beyond that date is contingent upon the availability of
appropriated funds from which payment for contract purposes can be made.
No legal liability on the part of the FAA for any payment may arise for
performance under this contract beyond \-\-\-\--, until funds are made
available to the Contracting Officer for performance and until the
Contractor receives notice of availability, to be confirmed in writing
by the Contracting Officer.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 31 U.S.C. 1301
and 42 U.S.C. 2459) if a one year indefinite quantity or requirements
contract for services is contemplated and the contract is: a. funded by
annual appropriations and; b. is to extend beyond the initial fiscal
year. The Contracting Officer should insert appropriate information in
the clause.

**3.3.1-12** **Limitation of Cost** (April 1996)

\(a\) The parties estimate that performance of this contract, exclusive
of any fee, will not cost the FAA more than (1) the estimated cost
specified in the \"Schedule\" or, (2) if this is a cost-sharing
contract, the FAA \'s share of the estimated cost specified in the
\"Schedule\". The Contractor agrees to use its best efforts to perform
the work specified in the \"Schedule\" and all obligations under this
contract within the estimated cost, which, if this is a cost-sharing
contract, includes both the FAA \'s and the Contractor\'s share of the
cost.

\(b\) The Contractor shall notify the Contracting Officer in writing
whenever it has reason to believe that-

\(1\) The costs the Contractor expects to incur under this contract in
the next 60 days, when added to all costs previously incurred, will
exceed 75 percent of the estimated cost specified in the \"Schedule\";
or

\(2\) The total cost for the performance of this contract, exclusive of
any fee, will be either greater or substantially less than had been
previously estimated.

\(c\) As part of the notification, the Contractor shall provide the
Contracting Officer a revised estimate of the total cost of performing
this contract.

\(d\) Except as required by other provisions of this contract,
specifically citing and stated to be an exception to this clause-

\(1\) The FAA is not obligated to reimburse the Contractor for costs
incurred in excess of:

\(i\) the estimated cost specified in the \"Schedule\" or,

\(ii\) if this is a cost-sharing contract, the estimated cost to the FAA
specified in the \"Schedule\";

\(2\) The Contractor is not obligated to continue performance under this
contract (including actions under the \"Termination\" clause of this
contract) or otherwise incur costs in excess of the estimated cost
specified in the \"Schedule\", until the Contracting Officer:

\(i\) notifies the Contractor in writing that the estimated cost has
been increased and

\(ii\) provides a revised estimated total cost of performing this
contract.

If this is a cost-sharing contract, the increase shall be allocated in
accordance with the formula specified in the \"Schedule\".

\(e\) No notice, communication, or representation in any form other than
that specified in subparagraph (d)(2) above, or from any person other
than the Contracting Officer, shall affect this contract\'s estimated
cost to the FAA . In the absence of the specified notice, the FAA is not
obligated to reimburse the Contractor for any costs in excess of the
estimated cost or, if this is a cost-sharing contract, for any costs in
excess of the estimated cost to the FAA specified in the \"Schedule\",
whether those excess costs were incurred during the course of the
contract or as a result of termination.

\(f\) If the estimated cost specified in the \"Schedule\" is increased,
any costs the Contractor incurs before the increase that are in excess
of the previously estimated cost shall be allowable to the same extent
as if incurred afterward, unless the Contracting Officer issues a
termination or other notice directing that the increase is solely to
cover termination or other specified expenses.

\(g\) Change orders shall not be considered an authorization to exceed
the estimated cost to the FAA specified in the \"Schedule\", unless they
contain a statement increasing the estimated cost.

\(h\) If this contract is terminated or the estimated cost is not
increased, the FAA and the Contractor shall negotiate an equitable
distribution of all property produced or purchased under the contract,
based upon the share of costs incurred by each.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 31 U.S.C. 1301
and 42 U.S.C. 2459) if a fully funded cost reimbursement contract is
anticipated except those for consolidated facilities, facilities
acquisition, or facilities use whether or not the contract provides for
payment of a fee.

**3.3.1-13** **Limitation of Cost (Facilities)** (April 1996)

\(a\) The parties estimate that performance of this contract will not
cost the FAA more than the estimated cost specified in the \"Schedule\".
The Contractor agrees to use its best efforts to perform the work
specified in the \"Schedule\" within the estimated cost.

\(b\) The Contractor shall notify the Contracting Officer in writing
whenever it has reason to believe that-

\(1\) The costs that the Contractor expects to incur under this contract
in the next 30 days, when added to all costs previously incurred, will
exceed 85 percent of the estimated cost specified in the \"Schedule\";
or

\(2\) The total cost to the FAA for the performance of this contract
will be either greater or substantially less than had previously been
estimated.

\(c\) As part of the notification, the Contractor shall provide the
Contracting Officer a revised estimate of the total cost of performing
this contract.

\(d\) Except as required by other provisions of this contract,
specifically citing and stated to be an exception to this clause-

\(1\) The FAA is not obligated to reimburse the contractor for costs
incurred in excess of the estimated cost specified in the \"Schedule\";
and

\(2\) The Contractor is not obligated to continue performance under this
contract (including actions under the \"Termination \" of this contract)
or otherwise incur costs in excess of the estimated cost specified in
the \"Schedule\", until the Contracting Officer (i) notifies the
Contractor in writing that the estimated cost has been increased and
(ii) provides a revised estimated total cost of performing this
contract.

\(e\) No notice, communication, or representation in any form other than
that specified in subparagraph (d)(2) above, or from any person other
than the Contracting Officer, shall affect this contract\'s estimated
cost to the FAA . In the absence of the specified notice, the FAA is not
obligated to reimburse the Contractor for any costs in excess of the
estimated cost, whether those excess costs were incurred during the
course of the contract or as a result of termination.

\(f\) If the estimated cost specified in the \"Schedule\" is increased,
any costs the Contractor incurs before the increase that are in excess
of the previously estimated cost shall be allowable to the same extent
as if incurred afterward, unless the Contracting Officer issues a
termination or other notice directing that the increase is solely to
cover termination or other specified expenses.

\(g\) Change orders shall not be considered an authorization to exceed
the estimated cost to the FAA specified in the \"Schedule\", unless they
contain a statement increasing the estimated cost.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 31 U.S.C. 1301
and 42 U.S.C. 2459) for consolidated facilities, facilities acquisition
or facilities use.

**3.3.1-14** **Limitation of Funds** (April 1996)

\(a\) The parties estimate that performance of this contract will not
cost the FAA more than:

\(1\) the estimated cost specified in the \"Schedule\" or,

\(2\) if this is a cost-sharing contract, the FAA \'s share of the
estimated cost specified in the \"Schedule\".

The Contractor agrees to use its best efforts to perform the work
specified in the \"Schedule\" and all obligations under this contract
within the estimated cost, which, if this is a cost-sharing contract,
includes both the FAA \'s and the Contractor\'s share of the cost.

\(b\) The \"Schedule\" specifies the amount presently available for
payment by the FAA and allotted to this contract, the items covered, the
FAA\'s share of the cost if this is a cost-sharing contract, and the
period of performance it is estimated the allotted amount will cover.
The parties contemplate that the FAA will allot additional funds
incrementally to the contract up to the full estimated cost to the FAA
specified in the \"Schedule\", exclusive of any fee. The Contractor
agrees to perform, or have performed, work on the contract up to the
point at which the total amount paid and payable by the FAA under the
contract approximates but does not exceed the total amount actually
allotted by the FAA to the contract.

\(c\) The Contractor shall notify the Contracting Officer in writing
whenever it has reason to believe that the costs it expects to incur
under this contract in the next 60 days, when added to all costs
previously incurred, will exceed 75 percent of:

\(1\) the total amount so far allotted to the contract by the FAA or,

\(2\) if this is a cost-sharing contract, the amount then allotted to
the contract by the FAA plus the Contractor\'s corresponding share. The
notice shall state the estimated amount of additional funds required to
continue performance for the period specified in the \"Schedule\".

\(d\) Sixty days before the end of the period specified in the
\"Schedule\", the Contractor shall notify the Contracting Officer in
writing of the estimated amount of additional funds, if any, required to
continue timely performance under the contract or for any further period
specified in the \"Schedule\" or otherwise agreed upon, and when the
funds will be required.

\(e\) If, after notification, additional funds are not allotted by the
end of the period specified in the \"Schedule\" or another agreed-upon
date, upon the Contractor\'s written request the Contracting Officer
will terminate this contract on that date in accordance with the
provisions of the \"Termination\" clause of this contract. If the
Contractor estimates that the funds available will allow it to continue
to discharge its obligations beyond that date, it may specify a later
date in its request, and the Contracting Officer may terminate this
contract on that later date.

\(f\) Except as required by other provisions of this contract,
specifically citing and stated to be an exception to this clause\--

\(1\) The FAA is not obligated to reimburse the Contractor for costs
incurred in excess of the total amount allotted by the FAA to this
contract; and

\(2\) The Contractor is not obligated to continue performance under this
contract (including actions under the \"Termination\" clause of this
contract) or otherwise incur costs in excess of (i) the amount then
allotted to the contract by the FAA or, (ii) if this is a cost-sharing
contract, the amount then allotted by the FAA to the contract plus the
Contractor\'s corresponding share, until the Contracting Officer
notifies the Contractor in writing that the amount allotted by the FAA
has been increased and specifies an increased amount, which shall then
constitute the total amount allotted by the FAA to this contract.

\(g\) The estimated cost shall be increased to the extent that:

\(1\) the amount allotted by the FAA or,

\(2\) if this is a cost-sharing contract, the amount then allotted by
the FAA to the contract plus the Contractor\'s corresponding share,
exceeds the estimated cost specified in the \"Schedule.\"

If this is a cost-sharing contract, the increase shall be allocated in
accordance with the formula specified in the \"Schedule.\"

\(h\) No notice, communication, or representation in any form other than
that specified in subparagraph (f)(2) above, or from any person other
than the Contracting Officer, shall affect the amount allotted by the
FAA to this contract. In the absence of the specified notice, the FAA is
not obligated to reimburse the Contractor for any costs in excess of the
total amount allotted by the FAA to this contract, whether incurred
during the course of the contract or as a result of termination.

\(i\) When and to the extent that the amount allotted by the FAA to the
contract is increased, any costs the Contractor incurs before the
increase that are in excess of

\(1\) the amount previously allotted by the FAA or,

\(2\) if this is a cost-sharing contract, the amount previously allotted
by the FAA to the contract plus the Contractor\'s corresponding share,
shall be allowable to the same extent as if incurred afterward, unless
the Contracting Officer issues a termination or other notice and directs
that the increase is solely to cover termination or other specified
expenses.

\(j\) Change orders shall not be considered an authorization to exceed
the amount allotted by the FAA specified in the \"Schedule\", unless
they contain a statement increasing the amount allotted.

\(k\) Nothing in this clause shall affect the right of the FAA to
terminate this contract. If this contract is terminated, the FAA and the
Contractor shall negotiate an equitable distribution of all property
produced or purchased under the contract, based upon the share of costs
incurred by each.

\(l\) If the FAA does not allot sufficient funds to allow completion of
the work, the Contractor is entitled to a percentage of the fee
specified in the \"Schedule\" equaling the percentage of completion of
the work contemplated by this contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts if an incrementally funded cost
reimbursement contract is contemplated

**3.3.1-15** **Assignment of Claims** (April 1996)

\(a\) The Contractor may assign its rights to be paid amounts due or to
become due as a result of the performance of this contract to a bank,
trust company, or other financing institution, including any Federal
lending agency. The assignee under such an assignment may thereafter
further assign or reassign its right under the original assignment to
any type of financing institution described in the preceding sentence.

\(b\) Any assignment or reassignment authorized under this clause shall
cover all unpaid amounts payable under this contract, and shall not be
made to more than one party, except that an assignment or reassignment
may be made to one party as agent or trustee for two or more parties
participating in the financing of this contract.

\(c\) The Contractor shall not furnish or disclose to any assignee under
this contract any classified document (including this contract) or
information related to work under this contract until the Contracting
Officer authorizes such action in writing.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts unless the contract will prohibit
assignment of claims.

**3.3.1-15/alt1** **Assignment of Claims Alternate I** (April 1996)

If the President authorizes a no-setoff commitment, add the following
sentence at the end of paragraph (a) of the basic clause:

Unless otherwise stated in this contract, payments to an assignee of any
amounts due or to become due under this contract shall not be subject to
reduction or setoff.

PRESCRIPTION:

Should be used if a no-setoff commitment has been authorized by the
President

**3.3.1-16** **Prohibition of Assignment of Claims** (April 1996)

The assignment of claims is prohibited for this contract.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when the Contracting Officer
determines assignment of claims is not in the Government\'s interest

**3.3.1-17** **Prompt Payment** (January 2003)

Notwithstanding any other payment clause in this contract, the
Government will make invoice payments and contract financing payments
under the terms and conditions specified in this clause. Payment shall
be considered as being made on the day a check is dated or an electronic
funds transfer is made. All days referred to in this clause are calendar
days, unless otherwise specified.

\(a\) Invoice Payments.

\(1\) For purposes of this clause, invoice payment means a Government
disbursement of monies to a Contractor under a contract or other
authorization for supplies or services accepted by the Government. This
includes payments for partial deliveries that have been accepted by the
Government, final payments under T&M and labor-hour contracts, and final
cost or fee payments where amounts owed have been settled between the
Government and the Contractor.

\(2\) Except as indicated in subparagraph (a)(3) and paragraph (c) of
this clause, the due date for making invoice payments by the designated
payment office shall be the later of the following two events:

\(i\) The 30th day after the designated billing office has received a
proper invoice from the Contractor.

\(ii\) The 30th day after Government acceptance of supplies delivered or
services performed by the Contractor. On a final invoice where the
payment amount is subject to contract settlement actions, acceptance
shall be deemed to have occurred on the effective date of the contract
settlement. However, if the designated billing office fails to annotate
the invoice with the actual date of receipt, the invoice payment due
date shall be deemed to be the 30th day after the date the Contractor\'s
invoice is dated, provided a proper invoice is received and there is no
disagreement over quantity, quality, or Contractor compliance with
contract requirements.

\(3\) An invoice is the Contractor\'s bill or written request for
payment under the contract for supplies delivered or services performed.
An invoice shall be prepared and submitted to the designated billing
officer specified in the contract. A proper invoice must include the
items listed in subdivisions (a)(3)(i) through (a)(3)(viii) of this
clause. If the invoice does not comply with these requirements, then the
Contractor will be notified of the defect within 7 days after receipt of
the invoice at the designated billing office. Untimely notification will
be taken into account in the computation of any interest penalty owed
the Contractor in the manner described in subparagraph (a)(6) of this
clause.

\(i\) Name and address of the Contractor.

\(ii\) Invoice date.

\(iii\) Contract number or other authorization for supplies delivered or
services performed (including order number and contract line item
number).

\(iv\) Description, quantity, unit of measure, unit price, and extended
price of supplies delivered or services performed and applicable
contract line item.

\(v\) Shipping and payment terms (e.g., shipment number and date of
shipment, prompt payment discount terms). Bill of lading number and
weight of shipment will be shown for shipments on Government bills of
lading.

\(vi\) Name and address of Contractor official to whom payment is to be
sent (must be the same as that in the contract or in a proper notice of
assignment).

\(vii\) Name (where practicable), title, phone number and mailing
address of person to be notified in event of a defective invoice.

\(viii\) Any other information or documentation required by other
requirements of the contract (such as evidence of shipment).

\(4\) An interest penalty shall be paid automatically by the Government
, without request from the contractor, if payment is not made by the due
date and the conditions listed in subdivisions (a)(4)(i) through
(a)(4)(iii) of this clause are met, if applicable.

\(i\) A proper invoice was received by the designated billing office.

\(ii\) A receiving report or other Government documentation authorizing
payment was processed and there was no disagreement over quantity,
quality, or contractor compliance with any contract term or condition.

\(iii\) In the case of a final invoice for any balance of funds due the
Contractor for supplies delivered or services performed, the amount was
not subject to further contract settlement actions between the
Government and the Contractor.

\(5\) The interest penalty shall bear simple interest from the date due
until paid unless paid within 30 days of becoming due. The interest rate
shall be the interest rate established by the Secretary of the Treasury,
referred to as the \'Renegotiation Board Interest Rate,\' (It is
published in the Federal Register semiannually on or about January 1 and
July 1), which is applicable to the period in which the amount becomes
due. . The interest penalty amount, interest rate and the period for
which the interest penalty was computed, will be separately stated by
the designated payment office on the check, in accompanying remittance
advice, or, in the case of wire transfers, by an appropriate electronic
data message accompanying the wire transfer. If the designated billing
office failed to notify the Contractor of a defective invoice within the
periods prescribed in subparagraph (a)(3) of this clause, then the due
date on the corrected invoice will be adjusted by subtracting the number
of days taken beyond the prescribed notification of defects period. Any
interest penalty owed the Contractor will be based on this adjusted due
date. Adjustments will be made by the designated payment office for
errors in calculating interest penalties, if requested by the
Contractor.

\(i\) For the sole purpose of computing an interest penalty that might
be due the contractor, Government acceptance shall be deemed to have
occurred constructively on the 7th day (unless otherwise specified in
this contract) after the contractor delivered the supplies or performed
the services in accordance with the terms and conditions of the
contract, unless there is a disagreement over quantity, quality, or
contractor compliance with a contract provision. In the event that
actual acceptance occurs within the constructive acceptance period, the
determination of an interest penalty shall be based on the actual date
of acceptance. The constructive acceptance requirement does not,
however, compel Government officials to accept supplies or services,
perform contract administration functions, or make payment prior to
fulfilling their responsibilities.

\(ii\) The following periods of time will not be included in the
determination of an interest penalty:

\(A\) The period taken to notify the Contractor of defects in invoices
submitted to the Government, but this may not exceed 7 days.

\(B\) The period between the defects notice and resubmission of the
corrected invoice by the Contractor.

\(C\) Any period of delay caused by incorrect electronic funds transfer
(EFT) information, in accordance with the EFT clause of this contract.

\(iii\) Interest penalties will not continue to accrue after the filing
of a claim for such penalties under Federal Aviation Administration
(FAA) contract disputes resolution procedures. Interest penalties of
less than \$1.00 need not be paid.

\(iv\) Interest penalties are not required on payment delays due to
disagreement between the Government and Contractor over the payment
amount or other issues involving contract compliance or on amounts
temporarily withheld or retained in accordance with the terms of the
contract. Contract disputes, and any interest that may be payable, will
be resolved in accordance with FAA contract disputes resolution
procedures.

\(6\) An interest penalty shall also be paid automatically by the
designated payment office, without request from the contractor, if a
discount for prompt payment is taken improperly. The interest penalty
will be calculated as described in subparagraph (a)(5) of this clause on
the amount of discount taken for the period beginning with the first day
after the end of the discount period through the date when the
contractor is paid.

\(b\) Contract Financing Payments.

\(1\) For purposes of this clause, contract financing payments mean
Government disbursements of monies to a Contractor under a contract
clause or other authorization without regard to acceptance of supplies
or services by the Government. Contract financing payments include but
are not limited to payments made according to commercial terms and
installment payments. They also include interim vouchers under T&M,
labor-hour, and cost reimbursement contracts (regardless of whether
goods or services were delivered and received by the Government).

\(2\) For contracts that provide for contract financing payments,
requests for payment shall be submitted to the designated billing office
as specified in this contract or as directed by the Contracting Officer.
Payments shall be made on the 30th day after receipt of a proper payment
request by the designated billing office. In the event that an audit or
other review of a specific payment request is required to ensure
compliance with the terms and conditions of the contract, the designated
payment office is not compelled to make payment by the due date
specified.

\(3\) Contract financing payments shall not be assessed an interest
penalty for payment delays.

\(c\) If this contract contains the Fast Payment Procedures, payments
will be made within 15 days after the date of receipt of the invoice.

(End of clause)

PRESCRIPTION:

May be used in all SIR\'s and contracts except construction, fixed price
architect-engineer contracts, or when payment terms and late payment
penalties are established by other governmental authority (e.g.,
tariffs)

**3.3.1-18** **Prompt Payment for Fixed-Price Architect-Engineer
Contracts** (January 2003)

3.3.1-18 Prompt Payment for Fixed-Price Architect-Engineer Contracts
(January 2003)

Notwithstanding any other payment clause in this contract, the FAA will
make invoice payments and contract financing payments under the terms
and conditions specified in this clause. Payment shall be considered as
being made on the day a check is dated or an electronic funds transfer
is made. All days referred to in this clause are calendar days, unless
otherwise specified.

\(a\) Invoice Payments.

\(1\) For purposes of this clause, invoice payment means a FAA
disbursement of monies to a Contractor under a contract or other
authorization for work or services accepted by the FAA, payments for
partial deliveries that have been accepted by the FAA, and financing
payments based on Contracting Officer approval of the estimated amount
and value of work or services performed.

\(2\) The due date for making invoice payments shall be as described in
this subparagraph (a)(2)(i).

\(i\) The due date for work or services completed by the Contractor
shall be the later of the following two events:

\(A\) The 30th day after the designated billing office has received a
proper invoice from the Contractor.

\(B\) The 30th day after FAA acceptance of the work or services
completed by the Contractor. On a final invoice where the payment amount
is subject to contract settlement actions (e.g., release of claims),
acceptance shall be deemed to have occurred on the effective date of the
contract settlement.

\(ii\) The due date for financing payments shall be the 30th day after
FAA approval of Contractor estimates of work or services accomplished.

\(iii\) However, if the designated billing office fails to annotate the
invoice or payment request with the actual date of receipt, the payment
due date shall be deemed to be the 30th day after the date the
Contractor\'s invoice or payment request is dated, provided a proper
invoice or payment request is received and there is no disagreement over
quantity, quality, or Contractor compliance with contract requirements.

\(3\) An invoice is the Contractor\'s bill or written request for
payment under the contract for work or services performed under the
contract. An invoice shall be prepared and submitted to the designated
billing office. A proper invoice must include the items listed in
subdivisions (a)(3)(i) through (a)(3)(viii) of this clause. If the
invoice does not comply with these requirements, then the Contractor
will be notified of the defect within 7 days after receipt of the
invoice at the designated billing office. Untimely notification will be
taken into account in the computation of any interest penalty owed the
Contractor in the manner described in subparagraph (a)(5) of this
clause:

\(i\) Name and address of the Contractor.

\(ii\) Invoice date.

\(iii\) Contract number or other authorization for work or services
performed (including other number and contract line item number.)

\(iv\) Description of work or services performed, and applicable
contract line item..

\(v\) Delivery and payment terms (e.g., prompt payment discount terms).

\(vi\) Name and address of Contractor official to whom payment is to be
sent (must be the same as that in the contract or in a proper notice of
assignment).

\(vii\) Name (where practicable), title, phone number, and mailing
address of person to be notified in event of a defective invoice.

\(viii\) Any other information or documentation required by the
contract.

\(4\) An interest penalty shall be paid automatically by the designated
payment office, without request from the Contractor, if payment is not
made by the due date and the conditions listed in subdivisions (a)(4)(i)
through (a)(4)(iii) of this clause are met, if applicable.

\(i\) A proper invoice was received by the designated billing office.

\(ii\) A receiving report or other FAA documentation authorizing payment
was processed and there was no disagreement over quantity, quality,
Contractor compliance with any contract term or condition, or requested
progress payment amount.

\(iii\) In the case of a final invoice for any balance of funds due the
Contractor for work or services performed, the amount was not subject to
further contract settlement actions between the FAA and the Contractor.

\(5\) The interest penalty shall bear simple interest from the date due
until paid unless paid within 30 days of becoming due. The interest rate
shall be the interest rate established by the Secretary of the Treasury,
referred to as the \'Renegotiation Board Interest Rate,\' (It is
published in the Federal Register semiannually on or about January 1 and
July 1), which is applicable to the period in which the amount becomes
due. If the designated billing office failed to notify the Contractor of
a defective invoice within the periods prescribed in subparagraph (a)(3)
of this clause, then the due date on the corrected invoice will be
adjusted by subtracting the number of days taken beyond the prescribed
notification of defects period. Any interest penalty owed the Contractor
will be based on this adjusted due date. Adjustments will be made by the
designated payment office for errors in calculating interest penalties,
if requested by the Contractor.

\(i\) For the sole purpose of computing an interest penalty that might
be due the Contractor, FAA acceptance or approval shall be deemed to
have occurred constructively as shown in subdivisions (a)(5)(i) (A) and
(B) of this clause. In the event that actual acceptance or approval
occurs within the constructive acceptance or approval period, the
determination of an interest penalty shall be based on the actual date
of acceptance or approval. Constructive acceptance or constructive
approval requirements do not apply if there is a disagreement over
quantity, quality, Contractor compliance with a contract provision, or
requested progress payment amounts. These requirements also do not
compel FAA officials to accept work or services, approve Contractor
estimates, perform contract administration functions, or make payment
prior to fulfilling their responsibilities.

\(A\) For work or services completed by the Contractor, FAA acceptance
shall be deemed to have occurred constructively on the 7th day after the
Contractor has completed the work or services in accordance with the
terms and conditions of the contract.

\(B\) For financing payments, FAA approval shall be deemed to have
occurred on the 7th day after Contractor estimates have been received by
the designated billing office.

\(ii\) The following periods of time will not be included in the
determination of an interest penalty:

\(A\) The period taken to notify the Contractor of defects in invoices
submitted to the FAA, but this may not exceed 7 days.

\(B\) The period between the defects notice and resubmission of the
corrected invoice by the Contractor.

\(C\) The period attributable to incorrect electronic funds transfer
(EFT) information in accordance with the EFT clause of this contract.

\(iii\) Interest penalties will not continue to accrue after the filing
of a claims for such penalties under FAA contract disputes resolution
procedures. Interest penalties of less than \$1.00 need not be paid.

\(iv\) Interest penalties are not required on payment delays due to
disagreement between the FAA and Contractor over the payment amount or
other issues involving contract compliance, or on amounts temporarily
withheld or retained in accordance with the terms of the contract.
Contract disputes, and any interest that may be payable will be resolved
in accordance with FAA contract disputes resolution procedures.

\(6\) An interest penalty shall also be paid automatically by the
designated payment office, without request from the Contractor, if a
discount for prompt payment is taken improperly. The interest penalty
will be calculated on the amount of discount taken for the period
beginning with the first day after the end of the discount period
through the date when the Contractor is paid.

\(b\) Contract Financing Payments.

\(1\) For purposes of this clause, if applicable, contract financing
payments, mean FAA disbursements of monies to a Contractor under a
contract clause or other authorization without regard to acceptance of
supplies or services by the FAA, other than financing payments based on
estimates of amount and value of work performed.

\(2\) If this contract provides for contract financing payments,
requests for payment shall be submitted to the designated billing office
as specified in this contract or as directed by the Contracting Officer.
Contract financing payments shall be made on the 30th day after receipt
of a proper contract payment request by the designated billing office.
In the event that an audit or other review of a specific payment request
is required to ensure compliance with the terms and conditions of the
contract, the designated payment office is not compelled to make payment
by the due date specified. Contract financing payments shall not be
assessed an interest penalty for payment delays.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts which contain clause 3.3.1-3,
Payments under Fixed-Price Architect-Engineer Contracts

**3.3.1-19** **Prompt Payment for Construction Contracts** (August 1998)

3.3.1-19 Prompt Payment for Construction Contracts (January 2003)

Notwithstanding any other payment clause in this contract, the FAA will
make invoice payments and contract financing payments under the terms
and conditions specified in this clause. Payment shall be considered as
being made on the day a check is dated or an electronic funds transfer
is made. All days referred to in this clause are calendar days, unless
otherwise specified.

\(a\) Invoice Payments.

\(1\) For purposes of this clause, there are several types of invoice
payments which may occur under this contract, as follows:

\(i\) Financing payments, if provided for elsewhere in this contract,
based on Contracting Officer approval of the estimated amount and value
of work or services performed, including payments for reaching
milestones in any project:

\(A\) The due date for making such payments shall be 14 days after
receipt of the payment request by the designated billing office.
However, if the designated billing office fails to annotate the payment
request with the actual date of receipt, the payment due date shall be
deemed to be the 14th day after the date the Contractor\'s payment
request is dated, provided a proper payment request is received and
there is no disagreement over quantity, quality, or Contractor
compliance with contract requirements.

\(B\) The due date for payment of any amounts retained by the
Contracting Officer in accordance with the clause \"Payments Under
Fixed-Price Construction Contracts,\" shall be as specified in the
contract or, if not specified, 30 days after approval for release to the
Contractor by the Contracting Officer.

\(ii\) Final payments based on completion and acceptance of all work and
presentation of release of all claims against the FAA arising by virtue
of the contract, and payments for partial deliveries that have been
accepted by the FAA (e.g., each separate building, public work, or other
division of the contract for which the price is stated separately in the
contract):

\(A\) The due date for making such payments shall be either the 30th day
after receipt by the designated billing office of a proper invoice from
the Contractor, or the 30th day after FAA acceptance of the work or
services completed by the Contractor, whichever is later. However, if
the designated billing office fails to annotate the invoice with the
date of actual receipt, the invoice payment due date shall be deemed to
be the 30th day after the date the Contractor\'s invoice is dated,
provided a proper invoice is received and there is no disagreement over
quantity, quality, or Contractor compliance with contract requirements.

\(B\) On a final invoice where the payment amount is subject to contract
settlement actions (e.g., release of claims), acceptance shall be deemed
to have occurred on the effective date of the contract settlement.

\(2\) An invoice is the Contractor\'s bill or written request for
payment under the contract for work or services performed under the
contract. An invoice shall be prepared and submitted to the designated
billing office. A proper invoice must include the items listed in
subdivisions (a)(2)(i) through (a)(2)(ix) of this clause. If the invoice
does not comply with these requirements, the Contractor will be notified
of the defect within 7 days after receipt of the invoice at the
designated billing office. Untimely notification will be taken into
account in the computation of any interest penalty owed the Contractor
in the manner described in subparagraph (a)(4) of this clause:

\(i\) Name and address of the Contractor.

\(ii\) Invoice date.

\(iii\) Contract number of other authorization for work or services
performed (including order number and contract line item number).

\(iv\) Description of work or services performed, and applicable
contract line item.

\(v\) Delivery and payment terms (e.g., prompt payment discount terms).

\(vi\) Name and address of Contractor official to whom payment is to be
sent (must be the same as that in the contract or in a proper notice of
assignment).

\(vii\) Name (where practicable), title, phone number, and mailing
address of person to be notified in event of a defective invoice.

\(viii\) For payments described in subdivision (a)(1)(i) of this clause,
substantiation of the amounts requested and certification in accordance
with the requirements of the clause \"Payments Under Fixed-Price
Construction Contracts.\"

\(ix\) Any other information or documentation required by the contract.

\(3\) An interest penalty shall be paid automatically by the designated
payment office, without request from the Contractor, if payment is not
made by the due date and the conditions listed in subdivisions (a)(3)(i)
through (a)(3)(iii) of this clause are met, if applicable.

\(i\) A proper invoice was received by the designated billing office.

\(ii\) A receiving report or other FAA documentation authorizing payment
was processed and there was no disagreement over quantity, quality,
Contractor compliance with any contract term or condition, or requested
progress payment amount.

\(iii\) In the case of a final invoice for any balance of funds due the
Contractor for work or services performed, the amount was not subject to
further contract settlement actions between the FAA and the Contractor.

\(4\) The interest penalty shall bear simple interest from the date due
until paid unless paid within 30 days of becoming due. The interest rate
shall be the interest rate established by the Secretary of the Treasury,
referred to as the \'Renegotiation Board Interest Rate,\' (It is
published in the Federal Register semiannually on or about January 1 and
July 1), which is applicable to the period in which the amount becomes
due. If the designated billing office failed to notify the Contractor of
a defective invoice within the periods prescribed in subparagraph (a)(2)
of this clause, then the due date on the corrected invoice will be
adjusted by subtracting the number of days taken beyond the prescribed
notification of defects period. Any interest penalty owed the Contractor
will be based on this adjusted due date. Adjustments will be made by the
designated payment office for errors in calculating interest penalties,
if requested by the Contractor.

\(i\) For the sole purpose of computing an interest penalty that might
be due the Contractor for payments described in subdivision (a)(1)(ii)
of this clause, FAA acceptance or approval shall be deemed to have
occurred constructively on the 7th day after the Contractor has
completed the work or services in accordance with the terms and
conditions of the contract. In the event that actual acceptance or
approval occurs within the constructive acceptance or approval period,
the determination of an interest penalty shall be based on the actual
date of acceptance or approval. Constructive acceptance or constructive
approval requirements do not apply if there is a disagreement over
quantity, quality, or Contractor compliance with a contract provision.
These requirements also do not compel FAA officials to accept work or
services, approve Contractor estimates, perform contract administration
functions, or make payment prior to fulfilling their responsibilities.

\(ii\) The following periods of time will not be included in the
determination of an interest penalty:

\(A\) The period taken to notify the Contractor of defects in invoices
submitted to the FAA, but this may not exceed 7 days.

\(B\) The period between the defects notice and resubmission of the
corrected invoice by the Contractor.

\(C\) The period attributable to incorrect electronic funds transfer
(EFT) in accordance with the EFT clause of this contract.

\(iii\) Interest penalties will not continue to accrue after the filing
of a claim for such penalties under FAA contract disputes resolution
procedures. Interest penalties of less than \$1.00 need not be paid.

\(iv\) Interest penalties are not required on payment delays due to
disagreement between the FAA and Contractor over the payment amount or
other issues involving contract compliance, or on amounts temporarily
withheld or retained in accordance with the terms of the contract.
Contract disputes, and any interest that may be payable, will be
resolved under FAA contract disputes resolution procedures.

\(5\) An interest penalty shall also be paid automatically by the
designated payment office, without request from the Contractor, if a
discount for prompt payment is taken improperly. The interest penalty
will be calculated on the amount of discount taken for the period
beginning with the first day after the end of the discount period
through the date when the Contractor is paid.

\(b\) Contract Financing Payments.

\(1\) For purposes of this clause, if applicable, contract financing
payments, mean FAA disbursements of monies to a Contractor under a
contract clause or other authorization without regard to acceptance of
supplies or services by the FAA, other than financing payments based on
estimates of amount and value of work performed.

\(2\) If this contract provides for contract financing payments,
requests for payment shall be submitted to the designated billing office
as specified in this contract or as directed by the Contracting Officer.
Contract financing payments shall be made on the 30th day after receipt
of a proper contract payment request by the designated billing office.
In the event that an audit or other review of a specific payment request
is required to ensure compliance with the terms and conditions of the
contract, the designated payment office is not compelled to make payment
by the due date specified. Contract financing payments shall not be
assessed an interest penalty for payment delays.

\(c\) The Contractor shall include in each subcontract for property or
services (including a material supplier) for the purpose of performing
this contract the following:

\(1\) A payment clause which obligates the Contractor to pay the
subcontractor for satisfactory performance under its subcontract not
later than 7 days from receipt of payment out of such amounts as are
paid to the Contractor under the contract.

\(2\) An interest penalty clause obligates the Contractor to pay to the
subcontractor an interest penalty for each payment not made in
accordance with the payment clause-

\(i\) For the period beginning on the day after the required payment
date and ending on the date on which payment of the amount due is made;
and

\(ii\) Computed in accordance with the \"Interest\" clause.

\(3\) A clause requiring each subcontractor to include a payment clause
and an interest penalty clause conforming to the standards set forth in
subparagraphs (c)(1) and (c)(2) of this clause in each of its
subcontracts, and to require each of its subcontractors to include such
clauses in their subcontracts with each lower- tier subcontractor or
supplier.

\(d\) The clauses required by paragraph (c) of this clause shall not be
constructed to impair the right of Contractor or a subcontractor at any
tier to negotiate, and to include in their subcontract, provisions
which-

\(1\) Permit the Contractor of a subcontractor to retain (without cause)
a specified percentage of each progress payment otherwise due to a
subcontractor for satisfactory performance under the subcontract without
incurring any obligation to pay a late payment interest penalty, in
accordance with terms and conditions agreed to by the parties to the
subcontract, giving such recognition as the parties deem appropriate to
the ability of a subcontractor to furnish a performance bond and a
payment bond;

\(2\) Permit the Contractor or subcontractor to make determination that
part or all of the subcontractor\'s request for payment may be withheld
in accordance with the subcontract agreement;

\(3\) Permit such withholding without incurring any obligation to pay a
late payment penalty if-

\(i\) A notice conforming to the standards of paragraph (g) of this
clause has been previously furnished to the subcontractor,

\(ii\) A copy of any notice issued by a Contractor pursuant to
subdivision (d)(3)(i) of this clause has been furnished to the
Contracting Officer.

\(e\) If a Contractor, after making a request for payment to the FAA but
before making a payment to a subcontractor for the subcontractor\'s
performance covered by the payment request, discovers that all or a
portion of the payment otherwise due such subcontractor is subject to
withholding from the subcontractor in accordance with the subcontract
agreement, then the Contractor shall-

\(1\) Furnish to the subcontractor a notice conforming to the standards
of paragraph (g) of this clause as soon as practicable upon ascertaining
the cause giving rise to a withholding, but prior to the due date for
subcontractor payment;

\(2\) Furnish to the Contracting Officer, as soon as practicable, a copy
of the notice furnished to the subcontractor pursuant to subparagraph
(e)(1) of this clause;

\(3\) Reduce the subcontractor\'s progress payment by an amount not to
exceed the amount specified in the notice of withholding furnished under
subparagraph (e)(1) of this clause;

\(4\) Pay the subcontractor as soon as practicable after the correction
of the identified subcontract performance deficiency, and-

\(i\) Make such payment within-

\(A\) Seven days after correction of the identified subcontract
performance deficiency (unless the funds therefore must be recovered
from the FAA because of a reduction under subdivision (e)(5)(i)) of this
clause; or

\(B\) Seven days after the Contractor recovers such funds from the FAA;
or

\(ii\) Incur an obligation to pay a late payment interest penalty
computed in accordance with the \"Interest\" clause;

\(5\) Notify the Contracting Officer upon-

\(i\) Reduction of the amount of any subsequent certified application
for payment; or

\(ii\) Payment to the subcontractor of any withheld amounts of a
progress payment, specifying-

\(A\) The amounts withheld under subparagraph (e)(1) of this clause;

\(B\) The dates that such withholding began and ended; and

\(6\) Be obligated to pay to the FAA an amount equal to interest on the
withheld from the 8th day after receipt of the withheld amounts from the
FAA until-

\(i\) The day the identified subcontractor performance deficiency is
corrected; or

\(ii\) The date that any subsequent payment is reduced under subdivision
(e)(5)(i) of this clause.

(f)(1) If a Contractor, after making payment to a first-tier
subcontractor, receives from a supplier or subcontractor of the
first-tier subcontractor (hereafter referred to as a second-tier
subcontractor) a written notice in accordance with section 2 of the Act
of August 24, 1935 (40 U.S.C. 270b, Miller Act), asserting a deficiency
in such first-tier subcontractor\'s performance under the contract for
which the Contractor may be ultimately liable, and the Contractor
determines that all or a portion of future payments otherwise due such
first-tier subcontractor is subject to withholding in accordance with
the subcontract agreement, then the Contractor may, without incurring an
obligation to pay an interest penalty under subparagraph (e)(6) of this
clause-

\(i\) Furnish to the first-tier subcontractor a notice conforming to the
standards of paragraph (g) of this clause as soon as practicable upon
making such determination; and

\(ii\) Withhold from the first-tier subcontractor\'s next available
progress payment or payments an amount not to exceed the amount
specified in the notice of withholding furnished under subdivision
(f)(1)(i) of this clause.

\(2\) As soon as practicable, but not later than 7 days after receipt of
satisfactory written notification that the identified subcontract
performance deficiency has been corrected, the Contractor shall pay the
amount withheld under subdivision (f)(1)(ii) of this clause to such
first-tier subcontractor, or shall incur an obligation to pay a late
payment interest penalty to such first-tier subcontractor computed in
accordance with the \"Interest\" clause.

\(g\) A written notice of any withholding shall be issued to a
subcontractor (with a copy to the Contracting Officer of any such notice
issued by the Contractor), specifying:

\(1\) The amount to be withheld;

\(2\) The specific causes for the withholding under the terms of the
subcontract; and

\(3\) The remedial actions to be taken by the subcontractor in order to
receive payment of the amounts withheld.

\(h\) The Contractor may not request payment from the FAA of any amount
withheld or retained in accordance with paragraph (d) of this clause
until such time as the Contractor has determined and certified to the
Contracting Officer that the subcontractor is entitled to the payment of
such amount.

\(i\) A dispute between the Contractor and subcontractor relating to the
amount or entitlement of a subcontractor to a payment or a late payment
interest penalty under a clause included in the subcontract pursuant to
paragraph (c) of this clause does not constitute a dispute to which the
FAA is a party. The FAA may not be interpleaded in any judicial or
administrative proceeding involving such a dispute.

\(j\) Except as provided in paragraph (i) of this clause, this clause
shall not limit or impair any contractual, administrative, or judicial
remedies otherwise available to the Contractor or a subcontractor in the
event of a dispute involving late payment or nonpayment by the
Contractor or deficient subcontract performance or nonperformance by a
subcontractor.

\(k\) The Contractor\'s obligation to pay an interest penalty to a
subcontractor pursuant to the clauses included in a subcontract under
paragraph (c) of this clause shall not be construed to be an obligation
of the FAA for such interest penalty. A cost reimbursement claim may not
include any amount for reimbursement of such interest penalty.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts which contain clause 3.3.1-2,
Payments under Fixed-Price Construction Contracts

**3.3.1-20** **RESERVED.**

PRESCRIPTION:

**3.3.1-21** **Financing Payment Terms for Purchases of Commercial
Items** (August 1997)

Definition: Financing payments are payments made without regard to
acceptance of supplies or services. They include interim and advance
payments that are customary in the commercial marketplace. They do not
include payments for delivery, receipt, and acceptance of supplies or
services.

\(a\) Contractor entitlement to financing payments for commercial items.
The Contractor may request, and the Government may pay, contract
financing payments as specified elsewhere in this contract when: the
payment requested is properly due in accordance with this contract; the
supplies deliverable or services due under the contract will be
delivered or performed in accordance with the contract; and there has
been no impairment or diminution of the Government\'s security under
this contract.

\(b\) Special terms regarding termination for default. If this contract
is terminated for default, the Contractor shall, on demand, repay to the
Government the amount of outstanding contract financing payments. The
Government shall be liable for no payment except as provided by the
termination for default clause of this contract.

\(c\) Security for Government financing payments. In the event the
Contractor fails to provide adequate security, as required in this
contract, no financing payments shall be made under this contract. Upon
receipt of adequate security, financing payments shall be made,
including all previous payments to which the Contractor is entitled, in
accordance with the terms of the provisions for contract financing
payments. If at any time the Contracting Officer determines that the
security provided by the Contractor is insufficient, the Contractor
shall promptly provide such additional security as the Contracting
Officer determines necessary. In the event the Contractor fails to
provide such additional security, the Contracting Officer may collect or
liquidate such security that has been provided and suspend further
payments to the Contractor; and the Contractor shall repay to the
Government the amount of outstanding financing payments as the
Contracting Officer at his sole discretion deems repayable.

\(d\) Reservation of rights.

\(1\) No payment or other action by the Government under this clause
shall:

\(i\) Excuse the Contractor from performance of obligations under this
contract, or

\(ii\) Constitute a waiver of any of the rights or remedies of the
parties under the contract.

\(2\) The Government \'s rights and remedies under this clause

\(i\) Shall not be exclusive, but rather shall be in addition to any
other rights and remedies provided by law or this contract; and

\(ii\) Shall not be affected by delayed, partial, or omitted exercise of
any right, remedy, power, or privilege, nor shall such exercise or any
single exercise preclude or impair any further exercise under this
clause or the exercise of any other right, power, or privilege of the
Government.

\(e\) Content of Contractor\'s request for financing payments. The
contractor\'s request for financing payments shall contain the
following:

\(1\) The name and address of the Contractor;

\(2\) The date of the request;

\(3\) The contract number and/or other identifier of the contract or
order under which the request is made; and

\(4\) An appropriately itemized and totaled statement of the financing
payments requested and such other information as is necessary for
computation of the payment, prepared in accordance with the direction of
the Contracting Officer.

\(f\) Limitation on frequency of financing payments. Contractor
financing payments shall be provided no more frequently than monthly.

\(g\) In the event of any conflict between the terms proposed by the
offeror in response to an invitation to propose financing payments terms
and the terms in this clause, the terms of this clause shall govern.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for commercial supplies or services
when financing payments are customary or in the best interest of the
FAA.

**3.3.1-22** **Installment Payments** (April 1996)

\(a\) Contractor entitlement to installment payments. The Contractor may
request, and the FAA shall pay, a contract installment payment as
specified in this contract when: the payment requested is properly due
in accordance with this contract; the supplies deliverable or services
due under the contract will be delivered or performed in accordance with
the contract; and there has been no impairment or diminution of the FAA
\'s security under this contract.

\(b\) Computation of amounts. Installment payments shall be paid to the
Contractor when requested for each separately priced unit of supply of
each contract line item in amounts approved by the Contracting Officer
pursuant to this clause.

\(1\) Number of installment payments for each contract line item. Each
separately priced unit of each contract line item is authorized a fixed
number of monthly installment payments. The number of installment
payments authorized for each unit of a contract line item is equal to
the number of months from the date of contract award to the date one
month before the first delivery of the first separately priced unit of
the contract line item. For example, if the first scheduled delivery of
any separately priced unit of a contract line item is 9 months after
award of the contract, all separately priced units of that contract line
item are authorized 8 installment payments.

\(2\) Amount of each installment payment. The amount of each installment
payment for each separately priced unit of each contract line item is
equal to \_\_\_\_ percent of the unit price divided by the number of
installment payments authorized for that unit.

\(3\) Date of each installment payment. Installment payments for any
particular separately priced unit of a contract line item begin the
number of months prior to the delivery of that unit that are equal to
the number of installment payments authorized for that unit. For
example, if 8 installment payments are authorized for each separately
priced unit of a contract line item, the first installment payment for
any particular unit of that contract line item would be 8 months before
the scheduled delivery date for that unit. The last installment payment
would be 1 month before scheduled delivery of a unit.

\(4\) Limitation on payment. Prior to the delivery payment for a
separately priced unit of a contract line item, the sum of all
installment payments for that unit shall not exceed \_\_\_\_ percent of
the price of that unit.

\(c\) Contractor request for installment payment. The Contractor may
submit requests for payment of installment payments not more frequently
than monthly, in a form and manner acceptable to the Contracting
Officer. Unless otherwise authorized by the Contracting Officer, all
installment payments in any month for which payment is being requested
shall be included in a single request, appropriately itemized and
totaled.

\(d\) Recoupment of installment payments. Installment payments shall be
recouped by deducting from the delivery payment of each item the total
outstanding amount of installment payments made for that separately
priced unit of that contract line item. The liquidation amounts for each
unit of each line item shall be clearly delineated in each request for
delivery payment submitted by the Contractor.

\(e\) Security for installment payments. In the event the Contractor
fails to provide adequate security as required in this contract, no
installment payment shall be made under this contract. Upon receipt of
adequate security, installment payments shall be made, including all
previous payments to which the Contractor is entitled, in accordance
with the terms of the contract. If at any time the Contracting Officer
determines that the security provided by the Contractor is insufficient,
the Contractor shall promptly provide such additional security as the
Contracting Officer determines necessary. In the event the Contractor
fails to provide such additional security, the Contracting Officer may
collect or liquidate such security that has been provided, and suspend
further payments to the Contractor; the Contractor shall repay to the
FAA the amount of outstanding installment payments as the Contracting
Officer at his sole discretion deems repayable.

\(f\) Special terms regarding termination. If this contract is
terminated, the Contractor shall, on demand, repay to the FAA the amount
of outstanding installment payments. The FAA shall be liable for no
payment except as provided by the applicable termination clauses.

\(g\) Reservation of rights.

\(1\) No payment, vesting of title under this clause, or other action
taken by the FAA under this clause shall

\(i\) Excuse the Contractor from performance of obligations under this
contract, or

\(ii\) Constitute a waiver of any of the rights or remedies of the
parties under the contract.

\(2\) The FAA \'s rights and remedies under this clause

\(i\) Shall not be exclusive, but rather shall be in addition to any
other rights and remedies provided by law or this contract, and

\(ii\) Shall not be affected by delayed, partial, or omitted exercise of
any right, remedy, power, or privilege, nor shall such exercise or any
single exercise preclude or impair any further exercise under this
clause or the exercise of any other right, power, or privilege of the
FAA .

\(h\) Content of Contractor\'s request for installment payment. The
Contractor\'s request for installment payment shall contain the
following:

\(1\) The name and address of the Contractor;

\(2\) The date of the request for installment payment;

\(3\) The contract number and/or other identifier of the contract or
order under which the request is made; and

\(4\) An itemized and totaled statement of the items, installment
payment amount, and month for which payment is being requested, for each
separately priced unit of each contract line item.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for commercial supplies or services
when financing payments are customary or in the best interest of the
FAA.

**3.3.1-23** **Invitation to Propose Payment Terms** (April 1996)

Definition: Financing payments are payments made without regard to
acceptance of supplies or services. They include interim and advance
payments that are customary to the commercial marketplace. They do not
include payments for delivery, receipt, and acceptance of supplies or
services.

\(a\) The offeror is invited to propose terms under which the FAA shall
make contract financing payments during contract performance. The
payment terms proposed by the offeror shall be a factor in the
evaluation of the offeror\'s proposal. The payment terms of the
successful offeror and the clause \"Financing Payment Terms for
Purchases of Commercial Items\" shall be incorporated in any resulting
contract.

\(b\) The offeror agrees that in the event of any conflict between the
terms proposed by the offeror and the terms in the \"Financing Payment
Terms for Purchases of Commercial Items,\" the terms of the clause shall
govern.

\(c\) The offeror\'s proposed financing payments shall not be acceptable
if it does not conform to the following limitations:

\(1\) Delivery payments shall be made only for supplies delivered and
accepted, or services rendered and accepted in accordance with the
payment terms of this contract;

\(2\) The terms and conditions of the contract financing payments must
be appropriate or customary in the commercial marketplace; and

\(3\) The terms and conditions of the contract financing payments must
be in the best interests of the FAA.

\(d\) The offeror\'s proposal of payment terms shall include the
following:

\(1\) The proposed contractual language describing the contract
financing payments; and

\(2\) A listing of the earliest date and greatest amount at which each
contract financing payment may be payable and the amount of each
delivery payment. Any resulting contract shall provide that no contract
financing payment shall be made at any earlier date or in a greater
amount than shown in the offeror\'s listing.

\(e\) The offeror\'s proposed prices and payment terms shall be
evaluated to determine the cost to the FAA of the proposal using the
interest rate and delivery schedule specified elsewhere in this
document.

(End of provision)

PRESCRIPTION:

May be used in SIR\'s and contracts for commercial supplies or services
when financing payments are customary or in the best interest of the
FAA.

**3.3.1-24** **Fast Payment Procedures** (October 1996)

\(a\) General. Invoices will be paid on the basis of the Contractor\'s
delivery to a post office or common carrier (or, in shipment by other
means, to the point of first receipt by the Government).

\(b\) Responsibility for Supplies. Title to the supplies shall vest in
the Government upon delivery to a post office or common carrier for
shipment to the specific destination. If shipment is by means of other
than Postal Service or common carrier, title to supplies shall vest in
the Government upon delivery to the point of first receipt by the
Government. Notwithstanding any other provision of the contract, order,
blanket purchase agreement, the Contractor shall assume all
responsibility and risk of loss for supplies

\(1\) not received at destination,

\(2\) damaged in transit, or

\(3\) not conforming to purchase requirements.

The Contractor shall either replace, repair or correct those supplies
promptly at the Contractor\'s expense, but only if instructions to do so
are furnished by the Contracting Officer within 180 days from the date
title to the supplies vests in the Government.

\(c\) Preparation of the Invoice.

\(1\) Upon delivery of supplies to a post office or common carrier (or
shipment by other means, the point of first receipt by the Government)
the Contractor shall prepare an invoice as provided in this contract,
order, or blanket purchase agreement. In addition, the invoice shall be
prominently marked \"FAST PAY.\"

\(2\) If the purchase price excluded the cost of transportation, the
Contractor shall enter the prepaid shipping cost on the invoice as a
separate item. The cost of parcel post insurance will not be paid by the
Government. If transportation charges are separately stated on the
invoice, the Contractor agrees to retain related paid freight bills or
other transportation billings paid separately for a period of 3 years
and to furnish the bill to the Government when requested for audit
purposes.

\(3\) If this contract, order, or blanket purchase agreement requires
the preparation of receiving report on a prescribed form , the
Contractor has the option of either preparing the receiving report on
the prescribed form or including the following information on the
invoice, in addition to that required in subparagraph (c)(1) above:

\(i\) A statement in prominent letters \"NO RECEIVING REPORT PREPARED.\"

\(ii\) Shipment number.

\(iii\) Mode of shipment.

\(iv\) At line item level (A) national stock number and/or
manufacturer\'s part number, (B) unit of measure, (C) Ship-to Point, (D)
Mark-for Point, and (E) FEDSTRIP/MILSTRIP document number if in
contract.

\(4\) If this contract, order or blanket purchase agreement does not
require preparation of a receiving report on a prescribed form, the
invoice will include at the line item level in addition to that required
in subparagraph (c)(1) above:

\(i\) Ship-to Point.

\(ii\) Mark-for Point.

\(iii\) FEDSTRIP/MILSTRIP document number if in contract, in addition to
that required in (c)(1) above.

\(5\) Certification of Invoice. The Contractor agrees that the
submission of an invoice to the Government for payment is a
certification that the supplies for which the Government is being billed
have been shipped or delivered in accordance with shipping instructions
issued by the ordering officer, in the quantities shown on the invoice,
and that the supplies are in the quantity and of the quality designated
by the contract, order, or blanket purchase agreement.

\(e\) Fast Pay Container Identification. All outer shipping container
shall be marked \"FAST PAY.\"

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for supplies when: (a) it may not be
possible for the receiving location to make timely notice to payment
office that the supplies have been accepted; (b) title will vest in the
Government upon either shipment or receipt; (c) the supplier agrees to
replace or repair supplies damaged in transit; and (d) there are
safeguards to ensure supplies are shipped, received, and acceptable.

**3.3.1-25** **RESERVED** (June 2001)

.

PRESCRIPTION:

.

**3.3.1-26** **RESERVED** (October 2001)

.

PRESCRIPTION:

.

**3.3.1-27** **Invoices for Equipment Delivered** (March 1997)

\(a\) The contractor shall submit a copy of FAA Form 4500-1, Project
Materiel Shipping and Receiving with invoices submitted to the FAA for
payment of equipment previously delivered to the FAA. Further, the
contractor\'s invoice shall indicate the appropriate Contract Line Item
number (CLIN) and, when applicable, the sub-CLIN under which each piece
of equipment was ordered.

\(b\) In addition, for each piece of equipment previously delivered, the
contractor shall list the price according to each CLIN or sub-CLIN, and
indicate the corresponding Form 4500-1 outgoing number.

\(c\) If the contractor fails to submit the FAA Form 4500-1, or fails to
submit the form in the format required by this clause, payment may be
delayed.

(End of clause)

PRESCRIPTION:

Shall be used in all Headquarters SIR\'s and contracts for equipment
purchased with F&E funds.

**3.3.1-28** **Notice of Progress Payments** (November 1997)

The need for progress payments will not be considered a handicap or
adverse factor in the award of the contract. The Progress Payments
clause included in this screening information request will be included
in any resulting contract. Even though the clause is included in the
contract, the clause shall be inoperative during any time the
contractor\'s accounting system and controls are determined by the
Government to be inadequate for segregation and accumulation of contract
costs.

(End of provision)

PRESCRIPTION:

Shall be used in fixed price SIR\'s that include a progress payment
clause.

**3.3.1-29** **Notice of Availability of Progress Payments Exclusively
For Small Business Concerns** (November 1997)

The Progress Payments clause will be available only to small business
concerns. Any submission conditioned upon inclusion of a progress
payment clause in the resulting contract may be rejected if the
submitter is not a small business concern.

(End of provision)

PRESCRIPTION:

Shall be used in fixed price SIR\'s that anticipate offers from small
and other businesses and only small businesses would need progress
payments.

**3.3.1-30** **Progress Payments Not Included** (November 1997)

A progress payments clause is not included in this screening information
request, and will not be added to the resulting contract at the time of
award. Submissions conditioned upon inclusion of a progress payment
clause in the resulting contract will not be considered.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s that will result in fixed price contracts and
progress payments will not be available.

**3.3.1-31** **Progress Payments** (November 2000)

Progress payments shall be made to the Contractor when requested as work
progresses, but not more frequently than monthly in amounts approved by
the Contracting Officer, under the following conditions:

\(a\) Computation of amounts.

\(1\) Unless the Contractor requests a smaller amount, each progress
payment shall be computed as:

\(i\) 80 percent of the Contractor\'s cumulative total costs under this
contract, whether or not actually paid plus financing payments to
subcontractors (see paragraph (j)), as shown by records maintained by
the Contractor for the purpose of obtaining payment under Government
contracts, plus

\(ii\) progress or financing payments to subcontractors (see paragraph
(j) below), all less the sum of all previous progress payments made by
the Government under this contract.

\(iii\) Cost of money is allowable subject to the requirements of clause
3.3.2-1, \"FAA Cost Principles\".

\(2\) The following conditions apply to the timing of including costs in
progress payment requests:

\(i\) The costs of supplies and services purchased by the Contractor
from subcontractors directly for this contract may be included whether
or not actually paid.

\(ii\) Costs for the following may be included when incurred, even if
before payment, when the Contractor is not delinquent in payment of the
costs of contract performance in the ordinary course of business: In
support of this, the Contractor shall include a certification in its
request for progress payment indicating that it is not delinquent in
payment of costs of contract performance in the ordinary course of
business.

\(A\) Materials issued from the Contractor\'s stores and placed in the
production process for use on this contract.

\(B\) Direct labor, direct travel, and other direct in-house costs.

\(C\) Properly allocable and allowable indirect costs.

\(iii\) Accrued costs of Contractor contributions under employee pension
or other postretirement benefit, profit sharing, and stock ownership
plans shall be excluded until actually paid unless\-\--

\(A\) The Contractor\'s practice is to contribute to the plans quarterly
or more frequently; and

\(B\) The contribution does not remain unpaid 30 days after the end of
the applicable quarter or shorter payment period (any contributions
remaining unpaid shall be excluded from the Contractor\'s total costs
for progress payments until paid).

\(iv\) If the contract is subject to the special transition method
authorized in Cost Accounting Standard (CAS) 410, Allocation of Business
Unit General and Administrative Expense to Final Cost Objective, General
and Administrative expenses (G&A) shall not be included in progress
payment requests until the suspense account prescribed in CAS 410 is
less than\--

\(A\) Five million dollars; or

\(B\) The value of the work-in-process inventories under contracts
entered into after the suspense account was established (only a pro rata
share of the G&A allocable to the excess of the inventory over the
suspense account value is includable in progress payment requests under
this contract).

\(3\) The Contractor shall not include the following in total costs for
progress payment purposes in subparagraph (a)(1)(i) above:

\(i\) Costs that are not reasonable, allocable to this contract, and
consistent with sound and generally accepted accounting principles and
practices.

\(ii\) Costs incurred by subcontractors or suppliers.

\(iii\) Costs ordinarily capitalized and subject to depreciation or
amortization except for the properly depreciated or amortized portion of
such costs.

\(iv\) Payments made or amounts payable to subcontractors or suppliers,
except for\--

\(A\) Completed work, including partial deliveries, to which the
Contractor has acquired title; and

\(B\) Work under cost-reimbursement or time-and-material subcontracts to
which the Contractor has acquired title.

\(4\) The amount of unliquidated progress payments may exceed neither
(i) the progress payments made against incomplete work (including
allowable unliquidated progress payments to subcontractors) nor (ii) the
value, for progress payment purposes, of the incomplete work. Incomplete
work shall be considered to be the supplies and services required by
this contract, for which delivery and invoicing by the Contractor and
acceptance by the Government are incomplete.

\(5\) The total amount of progress payments shall not exceed 80 percent
of the total contract price.

\(6\) If a progress payment or the unliquidated progress payments exceed
the amounts permitted by subparagraphs (a)(4) or (a)(5) above, the
Contractor shall repay the amount of such excess to the Government on
demand subject to \[CO to insert appropriate interest rate\] calculated
from the time the excess payment was received by the contractor until
such time as the reimbursement is received by the Government

\(b\) Liquidation. Except as provided in termination clauses of the
contract, all progress payments shall be liquidated by deducting from
any payment under this contract, other than advance or progress
payments, the unliquidated progress payments, or 80 percent of the
amount invoiced, whichever is less. The Contractor shall repay to the
Government any amounts required by a retroactive price reduction, after
computing liquidations and payments on past invoices at the reduced
prices and adjusting the unliquidated progress payments accordingly. The
Government reserves the right to unilaterally change from the ordinary
liquidation rate to an alternate rate when deemed appropriate for proper
contract financing.

\(c\) Reduction or suspension. The Contracting Officer may reduce or
suspend progress payments, increase the rate of liquidation, or take a
combination of these actions, after finding on substantial evidence any
of the following conditions:

\(1\) The Contractor failed to comply with any material requirement of
this contract (which includes paragraphs (f) and (g) below).

\(2\) Performance of this contract is endangered by the Contractor\'s
(i) failure to make progress or (ii) unsatisfactory financial condition.

\(3\) Inventory allocated to this contract substantially exceeds
reasonable requirements.

\(4\) The Contractor is delinquent in payment of the costs of performing
this contract in the ordinary course of business.

\(5\) The unliquidated progress payments exceed the fair value of the
work accomplished on the undelivered portion of this contract.

\(6\) The Contractor is realizing less profit than that reflected in the
establishment of any alternate liquidation rate in paragraph (b) above,
and that rate is less than the progress payment rate stated in
subparagraph (a)(1) above.

\(d\) Title.

\(1\) Title to the property described in this paragraph (d) shall vest
in the Government. Vestiture shall be immediately upon the date of this
contract, for property acquired or produced before that date. Otherwise,
vestiture shall occur when the property is or should have been allocable
or properly chargeable to this contract.

\' (2) Property,\' as used in this clause, includes all of the
below-described items acquired or produced by the Contractor that are or
should be allocable or properly chargeable to this contract under sound
and generally accepted accounting principles and practices.

\(i\) Parts, materials, inventories, and work in process;

\(ii\) Special tooling and special test equipment to which the
Government is to acquire title under any other clause of this contract;

\(iii\) Nondurable (i.e., noncapital) tools, jigs, dies, fixtures,
molds, patterns, taps, gauges, test equipment, and other similar
manufacturing aids, title to which would not be obtained as special
tooling under subparagraph (ii) above; and

\(iv\) Drawings and technical data, to the extent the Contractor or
subcontractors are required to deliver them to the Government by other
clauses of this contract.

\(3\) Although title to property is in the Government under this clause,
other applicable clauses of this contract; e.g., the termination or
special tooling clauses, shall determine the handling and disposition of
the property.

\(4\) The Contractor may sell any scrap resulting from production under
this contract without requesting the Contracting Officer\'s approval,
but the proceeds shall be credited against the costs of performance.

\(5\) To acquire for its own use or dispose of property to which title
is vested in the Government under this clause, the Contractor must
obtain the Contracting Officer\'s advance approval of the action and the
terms. The Contractor shall (i) exclude the allocable costs of the
property from the costs of contract performance, and (ii) repay to the
Government any amount of unliquidated progress payments allocable to the
property. Repayment may be by cash or credit memorandum.

\(6\) When the Contractor completes all of the obligations under this
contract, including liquidation of all progress payments, title shall
vest in the Contractor for all property (or the proceeds thereof) not-

\(i\) Delivered to, and accepted by, the Government under this contract;
or

\(ii\) Incorporated in supplies delivered to, and accepted by, the
Government under this contract and to which title is vested in the
Government under this clause.

\(7\) The terms of this contract concerning liability for
Government-furnished property shall not apply to property to which the
Government acquired title solely under this clause.

\(e\) Risk of loss. Before delivery to and acceptance by the Government,
the Contractor shall bear the risk of loss for property, the title to
which vests in the Government under this clause, except to the extent
the Government expressly assumes the risk. The Contractor shall repay
the Government an amount equal to the unliquidated progress payments
that are based on costs allocable to property that is damaged, lost,
stolen, or destroyed.

\(f\) Control of costs and property. The Contractor shall maintain an
accounting system and controls adequate for the proper administration of
this clause.

\(g\) Reports and access to records. The Contractor shall promptly
furnish reports, certificates, financial statements, and other pertinent
information reasonably requested by the Contracting Officer for the
administration of this clause. Also, the Contractor shall give the
Government reasonable opportunity to examine and verify the
Contractor\'s books, records, and accounts.

\(h\) Special terms regarding default. If this contract is terminated
under the contract default clause,

\(1\) The Contractor shall, on demand, repay to the Government the
amount of unliquidated progress payments and

\(2\) Title shall vest in the Contractor, on full liquidation of
progress payments, for all property for which the Government elects not
to require delivery under the contract default clause. The Government
shall be liable for no payment except as provided by the contract
default clause.

\(i\) Reservations of rights.

\(1\) No payment or vesting of title under this clause shall

\(i\) excuse the Contractor from performance of obligations under this
contract or

\(ii\) constitute a waiver of any of the rights or remedies of the
parties under the contract.

\(2\) The Government\'s rights and remedies under this clause

\(i\) shall not be exclusive but rather shall be in addition to any
other rights and remedies provided by law or this contract and

\(ii\) shall not be affected by delayed, partial, or omitted exercise of
any right, remedy, power, or privilege, nor shall such exercise or any
single exercise preclude or impair any further exercise under this
clause or the exercise of any other right, power, or privilege of the
Government.

\(j\) Finance payments to subcontractors. The amounts mentioned in
(a)(1)(ii) above shall be all financing payments to subcontractors or
divisions, if the following conditions are met:

\(1\) The amounts included are limited to (i) the unliquidated remainder
of progress payments made plus (ii) for small business concerns any
unpaid subcontractor requests for progress payments that the Contractor
has approved for current payment in the ordinary course of business.

\(2\) The subcontract or interdivisional order is expected to involve a
minimum of approximately 6 months between the beginning of work and the
first delivery, or, if the subcontractor is a small business concern, 4
months.

\(3\) If the financing payments are in the form of progress payments,
the terms of the subcontract or interdivisional order concerning
progress payments\--

\(i\) Are substantially similar to the terms of this clause at 3.3.1-31,
Progress Payments, for any subcontractor that is a large business
concern;

\(ii\) Are at least as favorable to the Government as the terms of this
clause;

\(iii\) Are not more favorable to the subcontractor or division than the
terms of this clause are to the Contractor;

\(iv\) Shall indicate that the Contractor, and not the Government,
awards the subcontract and administers the progress payments. (v)
Subordinate all subcontractor rights concerning property to which the
Government has title under the subcontract to the Government\'s right to
require delivery of the property to the Government for valid reasons not
limited to (A) default of the Contractor, or (B) bankrupcy or or
insolvency of the subcontractor.

\(4\) If the financing payments are in the form of performance-based
payments, the terms of the subcontract or interdivisional order
concerning payments\--

\(i\) Are substantially similar to clause 3.3.1-32 -Performance-Based
Payments;

\(ii\) Subordinate all subcontractor rights concerning property to which
the Government has title under the subcontract to the Government\'s
right to require delivery of the property to the Government for valid
reasons, not limited to \--

\(A\) the default of the Contractor; or

\(B\) The bankruptcy or insolvency of the subcontractor.

\(5\) If the financing payments are in the form of commercial item
financing payments, the subcontract or interdivisional order concerning
payments subordinates all subcontractor rights concerning property to
which the Government has title under the subcontract to the
Government\'s right to require delivery of the property to the
Government if\--

\(i\) The Contractor defaults; or

\(ii\) The subcontractor becomes bankrupt or insolvent.

\(6\) The progress payment rate in the subcontract is 80% unless the
subcontractor specifies a lesser amount. If the subcontractor is a small
business concern, the progress payment rate may be up to 85%.

\(7\) The parties agree concerning any proceeds received by the
Government for property to which title has vested in the Government
under the subcontract terms, that the proceeds shall be applied to
reducing any unliquidated progress payments by the Government to the
Contractor under this contract.

\(8\) If no unliquidated progress payments to the Contractor remain, but
there are unliquidated progress payments that the Contractor has made to
any subcontractor, the Contractor shall be subrogated to all the rights
the Government obtained through the terms required by this clause to be
in any subcontract, as if all such rights had been assigned and
transferred to the Contractor.

\(9\) The Contractor shall pay the subcontractor\'s progress payment
request under subdivision (j)(1)(ii) above, within a reasonable time
after receiving the Government progress payment covering those amounts.

\(10\) To facilitate small business participation in subcontracting
under this contract, the Contractor agrees to provide progress payments
to small business concerns of up to 85%. The Contractor further agrees
that the need for such progress payments shall not be considered as a
handicap or adverse factor in the award of subcontracts.

\(k\) Limitations on Undefinitized Contract Actions.

Notwithstanding any other progress payment provisions in this contract,
progress payments may not exceed 80 percent of costs incurred on work
accomplished under undefinitized contract actions. A contract action\'
is any action resulting in a contract, including contract modifications
for additional supplies or services, but not including contract
modifications that are within the scope and under the terms of the
contract, such as contract modifications issued pursuant to the Changes
clause, or funding and other administrative changes. This limitation
shall apply to the costs incurred, as computed in accordance with
paragraph (a) of this clause, and shall remain in effect until the
contract action is definitized. Costs incurred which are subject to this
limitation shall be segregated on Contractor progress payment requests
and invoices from those costs eligible for higher progress payment
rates. For purposes of progress payment liquidation, as described in
paragraph (b) of this clause, progress payments for undefinitized
contract actions shall be liquidated at 80 percent of the amount
invoiced for work performed under the undefinitized contract action as
long as the contract action remains undefinitized. The amount of
unliquidated progress payments for undefinitized contract actions shall
not exceed 80 percent of the maximum liability of the Government under
the undefinitized contract action or such lower limit specified
elsewhere in the contract. Separate limits may be specified for separate
actions.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts that will be awarded on a fixed
price basis and will provide progress payments based upon cost.

**3.3.1-31/alt1** **Progress Payments. Alternate I** (November 1997)

Substitute the following paragraphs(a)(1) and (a)(2) in the basic clause

Progress payments shall be made to the Contractor when requested as work
progresses, but not more frequently than monthly in amounts approved by
the Contracting Officer, under the following conditions:

(a)Computation of amounts.

\(1\) Unless the Contractor requests a smaller amount, each progress
payment shall be computed as

\(i\) 85 percent of the Contractor\'s total costs incurred under this
contract whether or not actually paid, plus

\(ii\) Progress payments to subcontractors (see paragraph (j) below),
all less the sum of all previous progress payments made by the
Government under this contract.

\(iii\) Cost of money is allowable subject to the requirements of clause
3.3.2-1, \"FAA Cost Principles\".

\(2\) Accrued costs of Contractor contributions under employee pension
plans shall be excluded until actually paid unless?

\(i\) The Contractor\'s practice is to make contributions to the
retirement fund quarterly or more frequently; and

\(ii\) The contribution does not remain unpaid 30 days after the end of
the applicable quarter or shorter payment period (any contribution
remaining unpaid shall be excluded from the Contractor\'s total costs
for progress payments until paid).

\(A\) Materials issued from the Contractor\'s stores inventory and
placed in the production process for use on this contract.

\(B\) Direct labor, direct travel, and other direct in-house costs.

\(C\) Properly allocable and allowable indirect costs.

\(iii\) Accrued costs of Contractor contributions under employee pension
or other postretirement benefit, profit sharing, and stock ownership
plans shall be excluded until actually paid unless\-\--

\(A\) The Contractor\'s practice is to contribute to the plans quarterly
or more frequently; and

\(B\) The contribution does not remain unpaid 30 days after the end of
the applicable quarter or shorter payment period (any contributions
remaining unpaid shall be excluded from the Contractor\'s total costs
for progress payments until paid).

\(iv\) If the contract is subject to the special transition method
authorized in Cost Accounting Standard (CAS) 410, Allocation of Business
Unit General and Administrative Expense to Final Cost Objective, General
and Administrative expenses (G&A) shall not be included in progress
payment requests until the suspense account prescribed in CAS 410 is
less than\--

\(A\) Five million dollars; or

\(B\) The value of the work-in-process inventories under contracts
entered into after the suspense account was established (only a pro rata
share of the G&A allocable to the excess of the inventory over the
suspense account value is includable in progress payment requests under
this contract).

PRESCRIPTION:

Shall be used in fixed price contracts with small business that will
provide progress payments based upon cost.

**3.3.1-31/alt2** **Progress Payments. Alternate II** (November 1997)

Add the following \"l\" and \"m\" to the basic clause:

\(l\) Progress payments made under this letter contract shall, unless
previously liquidated under paragraph

\(b\) of this clause, be liquidated under the following procedures:

\(1\) If this letter contract is superseded by a definitive contract,
unliquidated progress payments made under this letter contract shall be
liquidated by deducting the amount from the first progress or other
payments made under the definitive contract.

\(2\) If this letter contract is not superseded by a definitive contract
calling for the furnishing of all or part of the articles or services
covered under the letter contract, unliquidated progress payments made
under the letter contract shall be liquidated by deduction from the
amount payable under the Termination clause.

\(3\) If this letter contract is partly terminated and partly superseded
by a contract, the Government shall allocate the unliquidated progress
payments to the terminated and unterminated portions as the Government
deems equitable, and shall liquidate each portion under the relevant
procedure in subparagraphs (l)(1) and (l)(2) of this clause.

\(4\) If the method of liquidating progress payments provided in this
clause does not result in full liquidation, the Contractor shall
immediately pay the unliquidated balance to the Government on demand.

\(m\) The amount of unliquidated progress payments shall not exceed
\_\_\_\_\_\_\_\_\_(specify dollar amount).

(End of clause)

PRESCRIPTION:

Shall be used in fixed price letter contracts that will provide progress
payments based upon cost.

**3.3.1-31/alt3** **Progress Payments** (April 2001)

Replace subparagraph (a)(2) with the following:

\(2\) Payment of costs

\(i\) Elimination of paid cost provisions. Paid cost requirements in
existence prior to November 2000 may be deleted from contracts existing
prior to elimination of paid cost requirements subject to the following:

\(A\) The Contractor requests application of this Alternate I provision
from the FAA Contracting Officer\'s who will execute a bilateral
contract modification if adopted; and

\(B\) The Contractor flows down the provisions of this subparagraph to
its subcontractors at all tiers. The Contractor shall submit
documentation to this effect at the time it requests a contract
modification adopting this subparagraph (b)(1)(i).

\(ii\) The following conditions apply to the timing of including costs
in progress payment requests:

\(A\) The costs of supplies and services purchased by the Contractor
from subcontractors directly for this contract may be included whether
or not actually paid.

\(B\) Costs for the following may be included when incurred, even if
before payment, when the Contractor is not delinquent in payment of the
costs of contract performance in the ordinary course of business: In
support of this, the Contractor shall include a certification in its
request for progress payment indicating that it is not delinquent in
payment of costs of contract performance in the ordinary course of
business.

\(1\) Materials issued from the Contractor\'s stores and placed in the
production process for use on this contract.

\(2\) Direct labor, direct travel, and other direct in-house costs.

\(3\) Properly allocable and allowable indirect costs.

PRESCRIPTION:

May be used in fixed price contracts that provide progress payments
based upon cost that were in existence prior to inception of this
alternate clause (April 2001).

**3.3.1-32** **Performance Based Payments** (November 2000)

\(a\) Amount of payments and limitations on payments. Subject to such
other limitations and conditions as are specified in this contract and
this clause, the amount of payments and limitations on payments shall be
specified in the contract\'s description of the basis for payment.

\(b\) Contractor request for performance-based payment. The Contractor
may submit requests for payment of performance-based payments not more
frequently than monthly, in a form and manner acceptable to the
Contracting Officer. Unless otherwise authorized by the Contracting
Officer, all performance-based payments in any period for which payment
is being requested shall be included in a single request, appropriately
itemized and totaled. The Contractor\'s request shall contain the
information and certification detailed in paragraphs (l) and (m) of this
clause.

\(c\) Approval and payment of requests. (1) The Contractor shall not be
entitled to payment of a request for performance-based payment prior to
successful accomplishment of the event or performance criterion for
which payment is requested. The Contracting Officer shall determine
whether the event or performance criterion for which payment is
requested has been successfully accomplished in accordance with the
terms of the contract. The Contracting Officer may, at any time, require
the Contractor to substantiate the successful performance of any event
or performance criterion which has been or is represented as being
payable.

\(2\) A payment under this performance-based payment clause is a
contract financing payment under the Prompt Payment clause of this
contract, and approved requests shall be paid in accordance with the
prompt payment period and provisions specified for contract financing
payments by that clause. However, if the Contracting Officer requires
substantiation as provided in paragraph (c)(1) of this clause, or
inquires into the status of an event or performance criterion, or into
any of the conditions listed in paragraph (e) of this clause, or into
the Contractor certification, payment is not required, and the prompt
payment period shall not begin until the Contracting Officer approves
the request.

\(3\) The approval by the Contracting Officer of a request for
performance-based payment does not constitute an acceptance by the
Government and does not excuse the Contractor from performance of
obligations under this contract.

\(d\) Liquidation of performance-based payments. (1) Performance-based
finance amounts paid prior to payment for delivery of an item shall be
liquidated by deducting a percentage or a designated dollar amount from
the delivery payment. If the performance-based finance payments are on a
delivery item basis, the liquidation amount for each such line item
shall be the percent of that delivery item price that was previously
paid under performance-based finance payments or the designated dollar
amount. If the performance-based finance payments are on a whole
contract basis, liquidation shall be by either predesignated liquidation
amounts or a liquidation percentage.

\(2\) If at any time the amount of payments under this contract exceeds
any limitation in this contract, the Contractor shall repay to the
Government the excess. Unless otherwise determined by the Contracting
Officer, such excess shall be credited as a reduction in the
unliquidated performance-based payment balance(s), after adjustment of
invoice payments and balances for any retroactive price adjustments.

\(e\) Reduction or suspension of performance-based payments. The
Contracting Officer may reduce or suspend performance-based payments,
liquidate performance-based payments by deduction from any payment under
the contract, or take a combination of these actions after finding upon
substantial evidence any of the following conditions:

\(1\) The Contractor failed to comply with any material requirement of
this contract (which includes paragraphs (h) and (i) of this clause).

\(2\) Performance of this contract is endangered by the Contractor\'s\--

\(i\) Failure to make progress; or

\(ii\) Unsatisfactory financial condition.

\(3\) The Contractor is delinquent in payment of any subcontractor or
supplier under this contract in the ordinary course of business.

\(f\) Title. (1) Title to the property described in this paragraph (f)
shall vest in the Government. Vestiture shall be immediately upon the
date of the first performance-based payment under this contract, for
property acquired or produced before that date. Otherwise, vestiture
shall occur when the property is or should have been allocable or
properly chargeable to this contract

\(2\) \"Property,\" as used in this clause, includes all of the
following described items acquired or produced by the Contractor that
are or should be allocable or properly chargeable to this contract under
sound and generally accepted accounting principles and practices:

\(i\) Parts, materials, inventories, and work in process;

\(ii\) Special tooling and special test equipment to which the
Government is to acquire title under any other clause of this contract;

\(iii\) Nondurable (i.e., noncapital) tools, jigs, dies, fixtures,
molds, patterns, taps, gauges, test equipment and other similar
manufacturing aids, title to which would not be obtained as special
tooling under subparagraph (f)(2)(ii) of this clause; and

\(iv\) Drawings and technical data, to the extent the Contractor or
subcontractors are required to deliver them to the Government by other
clauses of this contract.

\(3\) Although title to property is in the Government under this clause,
other applicable clauses of this contract (e.g., the termination or
special tooling clauses) shall determine the handling and disposition of
the property.

\(4\) The Contractor may sell any scrap resulting from production under
this contract, without requesting the Contracting Officer\'s approval,
provided that any significant reduction in the value of the property to
which the Government has title under this clause is reported in writing
to the Contracting Officer. The contractor shall credit the proceeds
against the cost of performance.

\(5\) In order to acquire for its own use or dispose of property to
which title is vested in the Government under this clause, the
Contractor must obtain the Contracting Officer\'s advance approval of
the action and the terms. If approved, the contractor shall exclude the
allocable costs of the property from the costs of contract performance,
and repay to the Government any amount of unliquidated payments
allocable to the property.

\(6\) When the Contractor completes all of the obligations under this
contract, including liquidation of all performance-based payments, title
shall vest in the Contractor for all property (or the proceeds thereof)
not\--

\(i\) Delivered to, and accepted by, the Government under this contract;
or

\(ii\) Incorporated in supplies delivered to, and accepted by, the
Government under this contract and to which title is vested in the
Government under this clause.

\(7\) The terms of this contract concerning liability for
Government-furnished property shall not apply to property to which the
Government acquired title solely under this clause.

\(g\) Risk of loss. Before delivery to and acceptance by the Government,
the Contractor shall bear the risk of loss for property, the title to
which vests in the Government under this clause, except to the extent
the Government expressly assumes the risk. If any property is damaged,
lost, stolen, or destroyed, the basis of payment (the events or
performance criteria) to which the property is related shall be deemed
to be not in compliance with the terms of the contract and not payable
(if the property is part of or needed for performance), and the
Contractor shall refund the related performance-based payments in
accordance with paragraph (d) of this clause.

\(h\) Records and controls. The Contractor shall maintain records and
controls adequate for administration of this clause. The Contractor
shall have no entitlement to performance-based payments during any time
the Contractor\'s records or controls are determined by the Contracting
Officer to be inadequate for administration of this clause.

\(i\) Reports and Government access. The Contractor shall promptly
furnish reports, certificates, financial statements, and other pertinent
information requested by the Contracting Officer for the administration
of this clause and to determine that an event or other criterion
prompting a financing payment has been successfully accomplished. The
Contractor shall give the Government reasonable opportunity to examine
and verify the Contractor\'s records and to examine and verify the
Contractor\'s performance of this contract for administration of this
clause.

\(j\) Special terms regarding default. If this contract is terminated
under the default provisions of any termination clause, (1) the
Contractor shall, on demand, repay to the Government the amount of
unliquidated performance-based payments, and (2) title shall vest in the
Contractor, on full liquidation of all performance-based payments, for
all property for which the Government elects not to require delivery
under the Default clause of this contract. The Government shall be
liable for no payment except as provided by the Default clause.

\(k\) Reservation of rights. (1) No payment or vesting of title under
this clause shall\--

\(i\) Excuse the Contractor from performance of obligations under this
contract; or

\(ii\) Constitute a waiver of any of the rights or remedies of the
parties under the contract.

\(2\) The Government\'s rights and remedies under this clause\--

\(i\) Shall not be exclusive, but rather shall be in addition to any
other rights and remedies provided by law or this contract; and

\(ii\) Shall not be affected by delayed, partial, or omitted exercise of
any right, remedy, power, or privilege, nor shall such exercise or any
single exercise preclude or impair any further exercise under this
clause or the exercise of any other right, power, or privilege of the
Government.

\(l\) Content of Contractor\'s request for performance-based payment.
The Contractor\'s request for performance-based payment shall contain
the following:

\(1\) The name and address of the Contractor;

\(2\) The date of the request for performance-based payment;

\(3\) The contract number and/or other identifier of the contract or
order under which the request is made;

\(4\) Such information and documentation as is required by the
contract\'s description of the basis for payment; and

\(5\) A certification by a Contractor official authorized to bind the
Contractor, as specified in paragraph (m) of this clause.

\(m\) Content of Contractor\'s certification. As required in paragraph
(l)(5) of this clause, the Contractor shall make the following
certification in each request for performance-based payment:

I certify to the best of my knowledge and belief that\--

\(1\) This request for performance-based payment is true and correct;
this request (and attachments) has been prepared from the books and
records of the Contractor, in accordance with the contract and the
instructions of the Contracting Officer;

\(2\) (Except as reported in writing on \_\_\_\_\_\_\_\_\_\_), all
payments to subcontractors and suppliers under this contract have been
paid, or will be paid, currently, when due in the ordinary course of
business;

\(3\) There are no encumbrances (except as reported in writing on
\_\_\_\_\_\_\_\_\_) against the property acquired or produced for, and
allocated or properly chargeable to, the contract which would affect or
impair the Government\'s title;

\(4\) There has been no materially adverse change in the financial
condition of the Contractor since the submission by the Contractor to
the Government of the most recent written information dated
\_\_\_\_\_\_\_\_\_\_\_\_\_; and

\(5\) After the making of this requested performance-based payment, the
amount of all payments for each deliverable item for which
performance-based payments have been requested will not exceed any
limitation in the contract, and the amount of all payments under the
contract will not exceed any limitation in the contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts that will be awarded on a fixed
price basis and will provide performance based payments.

**3.3.1-33** **Central Contractor Registration** (April 2006)

\(a\) Definitions. As used in this clause

\"Central Contractor Registration (CCR) database\" means the primary
Government repository for Contractor information required for the
conduct of business with the Government.

\"Data Universal Numbering System (DUNS) number\" means the 9-digit
number assigned by Dun and Bradstreet, Inc. (D&B) to identify unique
business entities.

\"Data Universal Numbering System +4 (DUNS+4) number\" means the DUNS
number assigned by D&B plus a 4-character suffix that may be assigned by
a business concern. (D&B has no affiliation with this 4-character
suffix.) This 4-character suffix may be assigned at the discretion of
the business concern to establish additional CCR records for identifying
alternative Electronic Funds Transfer (EFT) accounts for the same parent
concern.

\"Registered in the CCR database\" means that the Contractor has entered
all mandatory information, including the DUNS number or the DUNS+4
number, into the CCR database.

(b)(1) By submission of an offer, the offeror acknowledges the
requirement that a prospective awardee shall be registered in the CCR
database prior to award, during performance, and through final payment
of any contract, basic agreement, basic ordering agreement, or blanket
purchasing agreement resulting from this solicitation.

\(2\) The offeror shall enter, in Representations, Certifications and
Other Statements of Offerors Section of the solicitation, the DUNS or
DUNS +4 number that identifies the offeror\'s name and address exactly
as stated in the offer. The DUNS number will be used by the Contracting
Officer to verify that the offeror is registered in the CCR database.

\(c\) If the offeror does not have a DUNS number, it should contact Dun
and Bradstreet directly to obtain one.

\(1\) An offeror may obtain a DUNS number

\(i\) If located within the United States, by calling Dun and Bradstreet
at 1-866-705-5711 or via the Internet at
[http://www.dnb.com](http://www.dnb.com/)/; or

\(ii\) If located outside the United States, by contacting the local Dun
and Bradstreet office.

\(2\) The offeror should be prepared to provide the following
information:

\(i\) Company legal business.

\(ii\) Tradestyle, doing business, or other name by which your entity is
commonly recognized.

\(iii\) Company Physical Street Address, City, State, and ZIP Code.

\(iv\) Company Mailing Address, City, State and ZIP Code (if different
from physical street address).

\(v\) Company Telephone Number.

\(vi\) Date the company was started.

\(vii\) Number of employees at your location.

\(viii\) Chief executive officer/key manager.

\(ix\) Line of business (industry).

\(x\) Company Headquarters name and address (reporting relationship
within your entity).

\(d\) If the offeror does not become registered in the CCR database in
the time prescribed by the Contracting Officer, the Contracting Officer
may proceed to award to the next otherwise successful registered
offeror.

\(e\) Processing time, which normally takes 48 hours, should be taken
into consideration when registering. Offerors who are not registered
should consider applying for registration immediately upon receipt of
this solicitation.

\(f\) The Contractor is responsible for the accuracy and completeness of
the data within the CCR database, and for any liability resulting from
the Government\'s reliance on inaccurate or incomplete data. To remain
registered in the CCR database after the initial registration, the
Contractor is required to review and update on an annual basis from the
date of initial registration or subsequent updates its information in
the CCR database to ensure it is current, accurate and complete.
Updating information in the CCR does not alter the terms and conditions
of this contract and is not a substitute for a properly executed
contractual document.

(g)(1)(i) If a Contractor has legally changed its business name, \"doing
business as\" name, or division name (whichever is shown on the
contract), or has transferred the assets used in performing the
contract, but has not completed the necessary requirements regarding
novation and change-of-name agreements in AMS Procurement Guidance
T3.10.1.A-8, the Contractor shall provide the responsible Contracting
Officer a minimum of one business day\'s written notification of its
intention to:

\(A\) change the name in the CCR database;

\(B\) comply with the requirements of T3.10.1.A-8; and

\(C\) agree in writing to the timeline and procedures specified by the
responsible Contracting Officer. The Contractor must provide the
Contracting Officer with the notification, sufficient documentation to
support the legally changed name.

\(ii\) If the Contractor fails to comply with the requirements of
paragraph (g)(1)(i) of this clause, or fails to perform the agreement at
paragraph (g)(1)(i)(C) of this clause, and, in the absence of a properly
executed novation or change-of-name agreement, the CCR information that
shows the Contractor to be other than the Contractor indicated in the
contract will be considered to be incorrect information within the
meaning of the \"Suspension of Payment\" paragraph of the electronic
funds transfer (EFT) clause of this contract.

\(2\) The Contractor shall not change the name or address for EFT
payments or manual payments, as appropriate, in the CCR record to
reflect an assignee for the purpose of assignment of claims. Assignees
shall be separately registered in the CCR database. Information provided
to the Contractor\'s CCR record that indicates payments, including those
made by EFT, to an ultimate recipient other than that Contractor will be
considered to be incorrect information within the meaning of the
\"Suspension of payment\" paragraph of the EFT clause of this contract.

\(h\) Offerors and Contractors may obtain information on registration
and annual confirmation requirements via the internet at
[http://www.ccr.gov](http://www.ccr.gov/)/ or by calling 1-888-227-2423,
or 269-961-5757.

(End of clause)

PRESCRIPTION:

Shall be used in all SIRs and contracts.

**3.3.1-34** **Payment by Electronic Funds Transfer/Central Contractor
Registration** (October 2005)

\(a\) Method of payment.

\(1\) All payments by the Government under this contract shall be made
by electronic funds transfer (EFT), except as provided in paragraph
(a)(2) of this clause. As used in this clause, the term \"EFT\" refers
to the funds transfer and may also include the payment information
transfer.

\(2\) In the event the Government is unable to release one or more
payments by EFT, the Contractor agrees to either?

\(i\) Accept payment by check or some other mutually agreeable method of
payment; or

\(ii\) Request the Government to extend the payment due date until such
time as the Government can make payment by EFT (but see paragraph (d) of
this clause).

\(b\) Contractor\'s EFT information. The Government shall make payment
to the Contractor using the EFT information contained in the Central
Contractor Registration (CCR) database. In the event that the EFT
information changes, the Contractor shall be responsible for providing
the updated information to the CCR database.

\(c\) Mechanisms for EFT payment. The Government may make payment by EFT
through either the Automated Clearing House (ACH) network, subject to
the rules of the National Automated Clearing House Association, or the
Fedwire Transfer System. The rules governing Federal payments through
the ACH are contained in 31 CFR Part 210.

\(d\) Suspension of payment. If the Contractor\'s EFT information in the
CCR database is incorrect, then the Government need not make payment to
the Contractor under this contract until correct EFT information is
entered into the CCR database; and any invoice or contract financing
request shall be deemed not to be a proper invoice for the purpose of
prompt payment under this contract. The prompt payment terms of the
contract regarding notice of an improper invoice and delays in accrual
of interest penalties apply.

\(e\) Liability for uncompleted or erroneous transfers.

\(1\) If an uncompleted or erroneous transfer occurs because the
Government used the Contractor\'s EFT information incorrectly, the
Government remains responsible for?

\(i\) Making a correct payment;

\(ii\) Paying any prompt payment penalty due; and

\(iii\) Recovering any erroneously directed funds.

\(2\) If an uncompleted or erroneous transfer occurs because the
Contractor\'s EFT information was incorrect, or was revised within 30
days of Government release of the EFT payment transaction instruction to
the Federal Reserve System, and?

\(i\) If the funds are no longer under the control of the payment
office, the Government is deemed to have made payment and the Contractor
is responsible for recovery of any erroneously directed funds; or

\(ii\) If the funds remain under the control of the payment office, the
Government shall not make payment, and the provisions of paragraph (d)
of this clause shall apply.

\(f\) EFT and prompt payment. A payment shall be deemed to have been
made in a timely manner in accordance with the prompt payment terms of
this contract if, in the EFT payment transaction instruction released to
the Federal Reserve System, the date specified for settlement of the
payment is on or before the prompt payment due date, provided the
specified payment date is a valid date under the rules of the Federal
Reserve System.

\(g\) EFT and assignment of claims. If the Contractor assigns the
proceeds of this contract as provided for in the assignment of claims
terms of this contract, the Contractor shall require as a condition of
any such assignment, that the assignee shall register separately in the
CCR database and shall be paid by EFT in accordance with the terms of
this clause. Notwithstanding any other requirement of this contract,
payment to an ultimate recipient other than the Contractor, or a
financial institution properly recognized under an assignment of claims,
is not permitted. In all respects, the requirements of this clause shall
apply to the assignee as if it were the Contractor. EFT information that
shows the ultimate recipient of the transfer to be other than the
Contractor, in the absence of a proper assignment of claims acceptable
to the Government, is incorrect EFT information within the meaning of
paragraph (d) of this clause.

\(h\) Liability for change of EFT information by financial agent. The
Government is not liable for errors resulting from changes to EFT
information made by the Contractor\'s financial agent.

\(i\) Payment information. The payment or disbursing office shall
forward to the Contractor available payment information that is suitable
for transmission as of the date of release of the EFT instruction to the
Federal Reserve System. The Government may request the Contractor to
designate a desired format and method(s) for delivery of payment
information from a list of formats and methods the payment office is
capable of executing. However, the Government does not guarantee that
any particular format or method of delivery is available at any
particular payment office and retains the latitude to use the format and
delivery method most convenient to the Government. If the Government
makes payment by check in accordance with paragraph (a) of this clause,
the Government shall mail the payment information to the remittance
address contained in the CCR database.

(End of clause)

PRESCRIPTION:

Use in all solicitations and contracts

**3.3.1-35** **Certification of Registration in Central Contractor
Registration (CCR)** (April 2006)

In accordance with Clause 3.3.1-33, Central Contractor Registration,
offeror certifies that they are registered in the CCR Database and have
entered all mandatory information including the DUNS or DUNS+4 Number.

Name: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Title: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Phone Number: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(End of provision)

PRESCRIPTION:

Shall be used in all SIRs.

**3.3.2-1** **FAA Cost Principles** (October 1996)

\(a\) Federal Aviation Administration (FAA) \"Contract Cost Principles\"
shall be used for:

\(1\) The pricing of contracts, subcontracts, and modifications to
contracts and subcontracts whenever cost analysis is performed; and

\(2\) The determination, negotiation, or allowance of costs when
required by a contract clause.

\(b\) The Contracting Officer shall incorporate the FAA cost principles
and procedures in contracts with commercial organizations as the basis
for:

\(1\) Determining reimbursable costs under

\(i\) Cost-reimbursement contracts and cost-reimbursement subcontracts
under these contracts performed by commercial organizations and

\(ii\) The cost-reimbursement portion of time-and-materials contracts
except when material is priced on a basis other than at cost;

\(2\) Negotiating indirect cost rates, when:

\(i\) FAA has division or corporate contract administration
responsibilities;

\(ii\) Quick Close-out procedures are used; or

\(iii\) Indirect rate caps are negotiated in the contract.

\(3\) Proposing, negotiating, or determining costs under terminated
contracts;

\(4\) Price revision of fixed-price incentive contracts;

\(5\) Price redetermination of price redetermination contracts; and

\(6\) Pricing changes and other contract modifications.

\(c\) When division or corporate contract administration
responsibilities rest with another Government agency, the FAA will apply
the cost principles of the administering agency for the determination or
negotiation of indirect rates not covered by (2)(ii) or (2)(iii) above.

\(d\) Upon request, the Contracting Officer will provide a copy of the
FAA \"Contract Cost Principles.\"

(End of clause)

PRESCRIPTION:

Should be used in all SIR\'s and contracts.

**3.4.1-1** **Proposal Guarantee** (April 1996)

\(a\) Offerors must furnish a proposal guarantee in the form of a
proposal bond, a postal money order, a certified or cashier\'s check, an
irrevocable letter of credit, or United States bonds or notes with a
maturity of less than five years.

\(b\) The required amount of the proposal guarantee is set forth in the
\"Schedule.\"

\(c\) The Contracting Officer will return proposal guarantees, other
than proposal bonds:

\(1\) To unsuccessful offerors as soon as possible after an award
decision is made; and

\(2\) To the successful offeror after it signs the contract and submits
acceptable bonds required under the contract.

\(d\) If the successful offeror fails to sign the contract or submit the
required bonds within the time specified by the Contracting Officer, the
contract may be terminated for default.

\(e\) If the contract is terminated for default, the offeror is liable
for any cost of acquiring the work in excess of its proposed price, and
the guarantee is available to offset the difference. However, the
guarantee is not an exclusive remedy.

PRESCRIPTION:

May be used in SIR\'s and contracts when performance bonds are required
or when otherwise deemed by the CO to be in the best interest of the
FAA.

**3.4.1-2** **Deposit of Assets Requirements** (April 1996)

\(a\) Except for payment bonds required for construction contracts, any
offeror required to submit a surety bond as a result of this Screening
Information Request may instead deposit assets in a form acceptable to
the Federal Aviation Administration in an amount set forth in the
\"Schedule.\"

\(b\) When assets are deposited, the offeror must execute the bond form
made a part of this SIR. Failure to deposit assets acceptable to the
Federal Aviation Administration may be cause for termination of the
contract for default.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts that allow assets to be used in
support of bonds in lieu of sureties.

**3.4.1-3** **RESERVED.**

PRESCRIPTION:

**3.4.1-4** **Performance Bond Requirements** (April 1996)

\(a\) The contractor is required to submit a performance bond in a penal
amount equal to 100 percent of the contract price, unless another amount
is specified in the contract \"Schedule,\" within the time specified by
the Contracting Officer.

\(b\) The bond must be executed on specified forms, and sureties must be
acceptable to the Federal Aviation Administration. Corporate sureties
must appear on the list in Treasury Circular 570, and the amount of the
bond may not exceed the underwriting limit stated for the surety on that
list.

\(c\) Failure to submit an acceptable bond may be cause for termination
of the contract for default.

(End of clause)

PRESCRIPTION:

The CO must use this clause in contracts (in accordance with 40 U.S.C.
270(a))for construction that are estimated to exceed \$100,000, or in
other contracts when in the best interest of the FAA.

**3.4.1-5** **Payment Bond Requirements** (April 1996)

\(a\) The contractor is required to submit a payment bond in the penal
amount set forth in the \"Schedule,\" within the time required by the
Contracting Officer.

\(b\) The bond must be executed on the forms attached to this SIR, and
sureties must be acceptable to the Federal Aviation Administration.
Corporate sureties must appear on the list in Treasury Circular 570, and
the amount of the bond may not exceed the underwriting limit stated for
the surety on that list.

\(c\) Failure to submit an acceptable bond may be cause for termination
of the contract for default.

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 40 U.S.C.
270(a)) for construction, or may be included in other contracts when
deemed to be in the best interest of the FAA.

**3.4.1-6** **Additional Bond Security** (April 1996)

If any surety furnishing a bond in connection with this contract becomes
unacceptable to the Federal Aviation Administration or fails to furnish
reports on its financial condition as requested by the Contracting
Officer, or if the contract price increases to the point where the
security furnished becomes inadequate in the Contracting Officer\'s
opinion, the contractor must promptly furnish additional security as
required to protect the interests of the Federal Aviation Administration
and of persons supplying labor or materials in performance of this
contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 40 U.S.C.
270(a)) for construction be used in contracts that require any form of
bonds.

**3.4.1-7** **Notice to Proceed** (April 1996)

The contractor shall not initiate work under this contract until it has
received a notice to proceed in writing from the Contracting Officer.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts that require bonds, guarantees,
insurance or other forms of protection for the FAA.

**3.4.1-8** **Patent Infringement Bond Requirements** (October 1996)

The Contractor shall be required to submit a patent infringement bond in
a penal amount set by the Contracting Officer and in a form acceptable
to the Government. Failure to submit an acceptable bond may be cause for
termination of the contract for default.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts that have the potential for patent
infringement.

**3.4.1-9** **Deposit of Assets Instead of Surety Bonds** (April 1996)

\(a\) If the contractor has deposited assets instead of furnishing
sureties for any bond required under this contract and the assets are in
the form of checks, or drafts, the Contracting Officer will hold the
assets in an account for the contractor\'s benefit.

\(b\) Upon contract completion, the contractor\'s funds will be returned
as soon as possible, unless the Contracting Officer determines that part
or all of the account is required to compensate the Federal Aviation
Administration for costs it incurs as a result of the contractor\'s
delay, default, or failure to perform. In such a case, the entire
account will be available to compensate the Federal Aviation
Administration.

PRESCRIPTION:

Shall be used SIR\'s and contracts that allow alternate assets to
support bonds in lieu of sureties.

**3.4.1-10** **Insurance\--Work on a Government Installation** (July
1996)

\(a\) The Contractor shall, at its own expense, provide and maintain
during the entire performance of this contract, at least the kinds and
minimum amounts of insurance required in the \"Schedule\" or elsewhere
in the contract.

\(b\) Before commencing work under this contract, the Contractor shall
certify to the Contracting Officer in writing by letter or certificate
of insurance, reflecting the FAA\'s contract number, that the required
insurance has been obtained. The policies evidencing required insurance
shall contain an endorsement to the effect that any cancellation or any
material change adversely affecting the Federal Aviation
Administration\'s interest shall not be effective:

\(1\) for such period as the laws of the State in which this contract is
to be performed prescribe, or

\(2\) until 30 days after the insurer or the Contractor gives written
notice to the Contracting Officer, whichever period is longer.

\(c\) The Contractor shall insert the substance of this clause,
including this paragraph (c), in subcontracts under this contract that
require work on a Government installation and shall require
subcontractors to provide and maintain the insurance required in the
\"Schedule\" or elsewhere in the contract. The Contractor shall maintain
a copy of all subcontractors\' proofs of required insurance, and shall
make copies (reflecting the FAA\'s contract number to ensure proper
filing of documents) available to the Contracting Officer upon request.

(End of clause)

PRESCRIPTION:

Shall be used SIR\'s and contracts which are fixed price and the
contractor may work at a Government installation.

**3.4.1-11** **Insurance\--Liability to Third Persons** (October 1996)

\(a\)

\(1\) Except as provided in subparagraph (a)(2) of this clause, the
Contractor shall provide and maintain workers\' compensation,
employer\'s liability, comprehensive general liability (bodily injury),
comprehensive automobile liability (bodily injury and property damage)
insurance, and such other insurance as the Contracting Officer may
require under this contract.

\(2\) The Contractor may, with the approval of the Contracting Officer,
maintain a self-insurance program; provided that, with respect to
workers\' compensation, the Contractor is qualified pursuant to
statutory authority.

\(3\) All insurance required by this paragraph shall be in a form and
amount and for those periods as the Contracting Officer may require or
approve and with insurers approved by the Contracting Officer.

\(b\) The Contractor agrees to submit for the Contracting Officer\'s
approval, to the extent and in the manner required by the Contracting
Officer, any other insurance that is maintained by the Contractor in
connection with the performance of this contract and for which the
Contractor seeks reimbursement.

\(c\) The Contractor shall be reimbursed:

\(1\) For that portion

\(i\) of the reasonable cost of insurance allocable to this contract,
and

\(ii\) required or approved under this clause; and

\(2\) For certain liabilities (and expenses incidental to such
liabilities) to third persons not compensated by insurance or otherwise
without regard to and as an exception to the limitation of cost or the
limitation of funds clause of this contract. These liabilities must
arise out of the performance of this contract, whether or not caused by
the negligence of the Contractor or of the Contractor\'s agents,
servants, or employees, and must be represented by final judgments or
settlements approved in writing by the Government. These liabilities are
for:

\(i\) Loss of or damage to property (other than property owned,
occupied, or used by the Contractor, rented to the Contractor, or in the
care, custody, or control of the Contractor); or

\(ii\) Death or bodily injury.

\(d\) The Government\'s liability under paragraph (c) of this clause is
subject to the availability of appropriated funds at the time a
contingency occurs. Nothing in this contract shall be construed as
implying that the Congress will, at a later date, appropriate funds
sufficient to meet deficiencies.

\(e\) The Contractor shall not be reimbursed for liabilities (and
expenses incidental to such liabilities)-

\(1\) For which the Contractor is otherwise responsible under the
express terms of any clause specified in the \"Schedule\" or elsewhere
in the contract;

\(2\) For which the Contractor has failed to insure or to maintain
insurance as required by the Contracting Officer; or

\(3\) That result from willful misconduct or lack of good faith on the
part of any of the Contractor\'s directors, officers, managers,
superintendents, or other representatives who have supervision or
direction of:

\(i\) All or substantially all of the Contractor\'s business;

\(ii\) All or substantially all of the Contractor\'s operations at any
one plant or separate location in which this contract is being
performed; or

\(iii\) A separate and complete major industrial operation in connection
with the performance of this contract.

\(f\) The provisions of paragraph (e) of this clause shall not restrict
the right of the Contractor to be reimbursed for the cost of insurance
maintained by the Contractor in connection with the performance of this
contract, other than insurance required in accordance with this clause;
provided, that such cost is allowable under the \"Allowable Cost and
Payment\" clause of this contract.

\(g\) If any suit or action is filed or any claim is made against the
Contractor, the cost and expense of which may be reimbursable to the
Contractor under this contract, and the risk of which is then uninsured
or is insured for less than the amount claimed, the Contractor shall:

\(1\) Immediately notify the Contracting Officer and promptly furnish
copies of all pertinent papers received;

\(2\) Authorize Government representatives to collaborate with counsel
for the insurance carrier in settling or defending the claim when the
amount of the liability claimed exceeds the amount of coverage; and

\(3\) Authorize Government representatives to settle or defend the claim
and to represent the Contractor in or to take charge of any litigation,
if required by the Government, when the liability is not insured or
covered by bond. The Contractor may, at its own expense, be associated
with the Government representatives in any such claim or litigation.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts other than those for construction
contracts and those for A&E services when a cost reimbursement contract
is contemplated.

**3.4.1-12** **Insurance** (July 1996)

\(a\) During the term of this contract and any extension, the contractor
shall maintain at its own expense the insurance required by this clause.
Insurance companies shall be acceptable to the Federal Aviation
Administration. Policies shall include all terms and provisions required
by the Federal Aviation Administration.

\(b\) The contractor shall maintain and furnish evidence of the
following insurance, with the stated minimum limits:

\(1\) Worker\'s Compensation and Employer\'s Liability. The contractor
shall comply with applicable Federal and State workers\' compensation
and occupational disease statutes. The contractor shall maintain
employer\'s liability coverage of at least \$100,000, except in States
with exclusive or monopolistic funds that do not permit worker\'s
compensation to be written by private carriers.

\(2\) General Liability. The contractor shall maintain bodily injury
general liability insurance written on a comprehensive form of policy of
at least \$100,000\* per person and \$500,000\* per occurrence. Property
damage limits, if any, will be set forth elsewhere in the \"Schedule.\"

\(3\) Automobile Liability. If automobiles will be used in connection
with performance of this contract, the contractor shall maintain
automobile liability insurance written on a comprehensive form of policy
with coverage of at least \$200,000\* per person and \$500,000\* per
occurrence for bodily injury and \$20,000\* per occurrence for property
damage.

\(4\) Aircraft Liability. If aircraft will be used in connection with
performance of this contract, the contractor shall maintain aircraft
public and passenger liability insurance with coverage of at least
\$200,000\* per person and \$500,000\* per occurrence for bodily injury
other than passenger liability, and \$200,000\* per occurrence for
property damage. Coverage for passenger liability bodily injury shall be
at least \$200,000\* multiplied by the number of seats or passengers,
whichever is greater.

\(5\) Watercraft Liability When watercraft will be used in connection
with performing the contract, the contractor shall provide watercraft
liability insurance. Limits shall be at least \$1,000,000\* per
occurrence. The policy shall include coverage for owned, non-owned and
hired watercraft.

\(6\) Environmental Impairment Liability. When the contract may involve
hazardous wastes, the contractor shall provide environmental impairment
liability insurance with coverage of at least \$1,000,000\* bodily
injury per occurrence and \$1,000,000\* property damage per occurrence.
Such insurance shall include coverage for the clean up, removal,
storage, disposal, transportation, and use of pollutants.

\(7\) Medical Malpractice. When the contract will involve health care
services, the contractor shall maintain medical malpractice liability
insurance with coverage of at least \$500,000\* per occurrence.

\(c\) Each policy shall include substantially the following provision:

\"It is a condition of this policy that the company furnish written
notice to the U.S. Federal Aviation Administration 30 days in advance of
the effective date of any reduction in or cancellation of this policy.\"

\(d\) The contractor shall furnish a certificate of insurance or, if
required by the Contracting Officer, true copies of liability policies
and manually countersigned endorsements of any changes, including the
FAA\'s contract number to ensure proper filing of documents. Insurance
shall be effective, and evidence of acceptable insurance furnished,
before beginning performance under this contract. Evidence of renewal
shall be furnished not later than five days before a policy expires.

\(e\) The maintenance of insurance coverage as required by this clause
is a continuing obligation, and the lapse or termination of insurance
coverage without replacement coverage being obtained will be grounds for
termination for default.

\*Unless modified in the \"Schedule\"

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts if other than fixed price or in
other contracts where it is in the best interest of the FAA.

**3.4.1-13** **Errors and Omissions** (July 1996)

\(a\) The contractor warrants that it is insured for \$200,000 (unless
another amount is set forth in the \"Schedule\") for errors and
omissions per claim in an amount in excess of the minimum set forth in
the \"Schedule\" in the performance of this contract.

\(b\) Unless the contractor\'s policy is prepaid, noncancelable, and
issued for a period at least equal to the term of this contract on an
occurrence basis, the contractor must have the policy amended to include
substantially the following provision:

\"It is a condition of this policy that the company furnish written
notice to the U.S. Federal Aviation Administration 30 days in advance of
the effective date of any reduction in or cancellation of this policy.\"

\(c\) The contractor must furnish a certificate of insurance or, if
required by the Contracting Officer, true copies of liability policies
and manually countersigned endorsements of any changes, including the
FAA\'s contract number to ensure proper filing of documents.. Insurance
must be effective, and evidence of acceptable insurance furnished,
before beginning performance under this contract. Evidence of renewal
must be furnished not later than five days before a policy expires

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for professional services when in
the best interest of the FAA.

**3.4.1-14** **Liability and Insurance?Leased Motor Vehicles** (August
1997)

\(a\) The Government shall be responsible for loss of or damage to\--

\(1\) Leased vehicles, except for

\(i\) normal wear and tear and

\(ii\) loss or damage caused by the negligence of the Contractor, its
agents, or employees; and

\(2\) Property of third persons, or the injury or death of third
persons, if the Government is liable for such loss, damage, injury, or
death under the Federal Tort Claims Act (28 U.S.C. 2671-2680).

\(b\) The Contractor shall be liable for, and shall indemnify and hold
harmless the Government against, all actions or claims for loss of or
damage to property or the injury or death of persons, resulting from the
fault, negligence, or wrongful act or omission of the Contractor, its
agents, or employees.

\(c\) The Contractor shall provide and maintain insurance covering its
liabilities under paragraph (b) of this clause, in amounts of at least
\$200,000 per person and \$500,000 per occurrence for death or bodily
injury and \$20,000 per occurrence for property damage or loss.

\(d\) Before commencing work under this contract, the Contractor shall
certify to the Contracting Officer in writing that the required
insurance has been obtained. The policies evidencing required insurance
shall contain an endorsement to the effect that any cancellation or any
material change adversely affecting the interests of the Government
shall not be effective

\(1\) for such period as the laws of the State in which this contract is
to be performed prescribe or

\(2\) until 30 days after written notice to the Contracting Officer,
whichever period is longer.

The policies shall exclude any claim by the insurer for subrogation
against Government by reason of any payment under the policies.

\(e\) The Contractor warrants that the contract price includes no cost
for insurance or contingency to cover losses, damage, injury, or death
for which the Government is responsible under paragraph (a) of this
clause.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts that include the leasing of motor
vehicles.

**3.4.2-1** **State of New Mexico Gross Receipts and Compensating Tax**
(April 1996)

\(a\) Within thirty (30) days after award of this contract, the
Contractor shall advise the State of New Mexico of this contract by
registering with the State of New Mexico, Taxation and Revenue
Department, Revenue Division, pursuant to the Tax Administration Act of
the State of New Mexico and shall identify the contract number.

\(b\) The Contractor shall pay the New Mexico gross receipts taxes,
pursuant to the Gross Receipts and Compensating Tax Act of New Mexico,
assessed against the contract fee and costs paid for performance of this
contract, or of any part or portion thereof, within the State of New
Mexico. The allowability of any gross receipts taxes or local option
taxes lawfully paid to the State of New Mexico by the Contractor or its
subcontractors will be determined in accordance with the \"Allowable
Cost and Payment\" clause of this contract except as provided in
paragraph (d) of this clause.

\(c\) The Contractor shall submit applications for Nontaxable
Transaction Certificates, Form CSR-3C, to the State of New Mexico
Taxation and Revenue Department, Revenue Division, P.O. Box 630, Santa
Fe, New Mexico 87509. When the Type 15 Nontaxable Transaction
Certificate is issued by the Revenue Division, the Contractor shall use
these certificates strictly in accordance with this contract, and the
agreement between the FAA and the New Mexico Taxation and Revenue
Department.

\(d\) The Contractor shall provide Type 15 Nontaxable Transaction
Certificates to each vendor in New Mexico selling tangible personal
property to the Contractor for use in the performance of this contract.
Failure to provide a Type 15 Nontaxable Transaction Certificate to
vendors will result in the vendor\'s liability for the gross receipt
taxes and those taxes, which are then passed on to the Contractor, shall
not be reimbursable as an allowable cost by the Government.

\(e\) The Contractor shall pay the New Mexico compensating user tax for
any tangible personal property which is purchased pursuant to a
Nontaxable Transaction Certificate if such property is not used for
Federal purposes.

\(f\) Out-of-state purchase of tangible personal property by the
Contractor which would be otherwise subject to compensation tax shall be
governed by the principles of this clause. Accordingly, compensating tax
shall be due from the contractor only if such property is not used for
Federal purposes.

\(g\) The FAA may receive information regarding the Contractor from the
Revenue Division of the New Mexico Taxation and Revenue Department and,
at the discretion of the FAA, may participate in any matters or
proceedings pertaining to this clause or the above-mentioned Agreement.
This shall not preclude the Contractor from having its own
representative nor does it obligate the FAA to represent its Contractor.

\(h\) The Contractor agrees to insert the substance of this clause,
including this paragraph (h), in each subcontract which meets these
criteria is a cost reimbursement contract; tangible personal property
will be a direct cost and title will vest in the FAA upon delivery to
the contractor; and the contract will be for services performed in whole
or in part within New Mexico.

\(i\) Paragraphs (a) through (h) of this clause shall be null and void
should the Agreement referred to in paragraph (c) of this clause be
terminated; provided, however, that such termination shall not nullify
obligations already incurred prior to the date of termination.

\*Insert appropriate agency name in blanks

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the contract is anticipated
to be a cost reimbursable contract, which directs or authorizes the
contractor to acquire tangible personal property as a direct cost under
a contract and title to such property passes directly to and vests in
the United States upon delivery by the vendor and the contract will be
for services to be performed in whole or in part within the State of New
Mexico.

**3.4.2-2** **Taxes\--Cost-Reimbursement Contracts with Foreign
Governments** (April 1996)

\(a\) Any tax or duty from which the United States Government is exempt
by agreement with the Government of \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\[insert name of the foreign government\], or from which any
subcontractor under this contract is exempt under the laws of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[insert name of country\], shall not
constitute an allowable cost under this contract.

\(b\) If any subcontractor obtains a foreign tax credit that reduces its
Federal income tax liability under the United States Internal Revenue
Code (Title 26, U.S. Code) because of the payment of any tax or duty
that was reimbursed under this contract, the amount of the reduction
shall be paid (not credited to the contract) to the Treasurer of the
United States at the time the Federal income tax return is filed.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when a cost-reimbursement contract
is contemplated and the contract will be with a foreign government. The
Contracting Officer should insert appropriate information in the clause.

**3.4.2-3** **Taxes\--Foreign Cost-Reimbursement Contracts** (April
1996)

\(a\) Any tax or duty from which the United States Government is exempt
by agreement with the Government of \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\[insert name of the foreign government\], or from which the Contractor
or any subcontractor under this contract is exempt under the laws of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[insert name of country\], shall
not constitute an allowable cost under this contract.

\(b\) If the Contractor or subcontractor under this contract obtains a
foreign tax credit that reduces its Federal income tax liability under
the United States Internal Revenue Code (Title 26, U.S. Code) because of
the payment of any tax or duty that was reimbursed under this contract,
the amount of the reduction shall be paid or credited at the time of
such offset to the Government of the United States as the Contracting
Officer directs.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when a cost-reimbursement contract
is contemplated and the contract will be performed in whole or in part
in a foreign country, unless it is contemplated that the contract will
be with a foreign government. The Contracting Officer should insert
appropriate information in the clause.

**3.4.2-4** **Taxes\--Fixed-Price Contracts with Foreign Governments**
(April 1996)

\(a\) \'Contract date,\' as used in this clause, means effective date of
this contract, or if a modification, the effective date of the
modification.

\(b\) The contract price, including the prices in any subcontracts under
this contract, does not include any tax or duty that the Government of
the United States and the Government of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[insert name of the foreign
government\] have agreed shall not apply to expenditures made by the
United States in \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[insert name of
country\], or any tax or duty not applicable to this contract or any
subcontracts under this contract, pursuant to the laws of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.\[insert name of country\]. If any
such tax or duty has been included in the contract price, through error
or otherwise, the contract price shall be correspondingly reduced.

\(c\) If, after the contract date, the Government of the United States
and the Government of \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[insert name of
the foreign government\] agree that any tax or duty included in the
contract price shall not apply to expenditures by the United States in
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[insert name of country\], the contract
price shall be reduced accordingly.

\(d\) No adjustment shall be made in the contract price under this
clause unless the amount of the adjustment exceeds \$250.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts which are fixed price and with a
foreign government. . The Contracting Officer should insert appropriate
information in the clause.

**3.4.2-5** **Taxes\--Foreign Fixed-Price Contracts** (April 1996)

\(a\) To the extent that this contract provides for furnishing supplies
or performing services outside the United States, its possessions, and
Puerto Rico, this clause applies in lieu of any \"Federal, State, and
Local Taxes\" clause of the contract.

\(b\) Definitions:

\(1\) \'Contract date,\' as used in this clause, means the effective
date of this contract, or if a modification, effective date of this
modification.

\(2\) \'Country concerned,\' as used in this clause, means any country,
other than the United States, its possessions, and Puerto Rico, in which
expenditures under this contract are made.

\(3\) \'Tax\' and \'taxes,\' as used in this clause, include fees and
charges for doing business that are levied by the government of the
country concerned or by its political subdivisions.

\(4\) \'All applicable taxes and duties,\' as used in this clause, means
all taxes and duties, in effect on the contract date, that the taxing
authority is imposing and collecting on the transactions or property
covered by this contract, pursuant to written ruling or regulation in
effect on the contract date.

\(5\) \'After-imposed tax,\' as used in this clause, means any new or
increased tax or duty, or tax that was exempted or excluded on the
contract date but whose exemption was later revoked or reduced during
the contract period, other than excepted tax, on the transactions or
property covered by this contract that the Contractor is required to pay
or bear as the result of legislative, judicial, or administrative action
taking effect after the contract date.

\(6\) \'After-relieved tax,\' as used in this clause, means any amount
of tax or duty, other than an excepted tax, that would otherwise have
been payable on the transactions or property covered by this contract,
but which the Contractor is not required to pay or bear, or for which
the Contractor obtains a refund, as the result of legislative, judicial,
or administrative action taking effect after the contract date.

\(7\) \'Excepted tax,\' as used in this clause, means social security or
other employment taxes, net income and franchise taxes, excess profits
taxes, capital stock taxes, transportation taxes, unemployment
compensation taxes, and property taxes. \'Excepted tax\' does not
include gross income taxes levied on or measured by sales or receipts
from sales, property taxes assessed on completed supplies covered by
this contract, or any tax assessed on the Contractor\'s possession of,
interest in, or use of property, title to which is in the U.S.
Government.

\(c\) Unless otherwise provided in this contract, the contract price
includes all applicable taxes and duties, except taxes and duties that
the Government of the United States and the government of the country
concerned have agreed shall not be applicable to expenditures in such
country by or on behalf of the United States.

\(d\) The contract price shall be increased by the amount of any
after-imposed tax or of any tax or duty specifically excluded from the
contract price by a provision of this contract that the Contractor is
required to pay or bear, including any interest or penalty, if the
Contractor states in writing that the contract price does not include
any contingency for such tax and if liability for such tax, interest, or
penalty was not incurred through the Contractor\'s fault, negligence, or
failure to follow instructions of the Contracting Officer or to comply
with the provisions of paragraph (i) below.

\(e\) The contract price shall be decreased by the amount of any
after-relieved tax, including any interest or penalty. The Government of
the United States shall be entitled to interest received by the
Contractor incident to a refund of taxes to the extent that such
interest was earned after the Contractor was paid by the Government of
the United States for such taxes. The Government of the United States
shall be entitled to repayment of any penalty refunded to the Contractor
to the extent that the penalty was paid by the Government.

\(f\) The contract price shall be decreased by the amount of any tax or
duty, other than an excepted tax, that was included in the contract and
that the Contractor is required to pay or bear, or does not obtain a
refund of, through the Contractor\'s fault, negligence, or failure to
follow instructions of the Contracting Officer or to comply with the
provisions of paragraph (i) below.

\(g\) No adjustment shall be made in the contract price under this
clause unless the amount of the adjustment exceeds \$250.

\(h\) If the Contractor obtains a reduction in tax liability under the
United States Internal Revenue Code (Title 26, U.S. Code) because of the
payment of any tax or duty that either was included in the contract
price or was the basis of an increase in the contract price, the amount
of the reduction shall be paid or credited to the Government of the
United States as the Contracting Officer directs.

\(i\) The Contractor shall take all reasonable action to obtain
exemption from or refund of any taxes or duties, including interest or
penalty, from which the United States Government, the Contractor, any
subcontractor, or the transactions or property covered by this contract
are exempt under the laws of the country concerned or its political
subdivisions or which the governments of the United States and of the
country concerned have agreed shall not be applicable to expenditures in
such country by or on behalf of the United States.

\(j\) The Contractor shall promptly notify the Contracting Officer of
all matters relating to taxes or duties that reasonably may be expected
to result in either an increase or decrease in the contract price and
shall take appropriate action as the Contracting Officer directs. The
contract price shall be equitably adjusted to cover the costs of action
taken by the Contractor at the direction of the Contracting Officer,
including any interest, penalty, and reasonable attorneys\' fees.

(End of clause)

PRESCRIPTION:

Shall be used in fixed price SIR\'s and contracts expected to be
performed partly or wholly in a foreign country..

**3.4.2-6** **Taxes\--Contracts Performed in U.S. Possessions or Puerto
Rico** (October 1996)

The term \'local taxes,\' as used in the \"Federal, State, and Local
Taxes - Fixed Price Contract\" clause of this contract, includes taxes
imposed by a possession of the United States or by Puerto Rico.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts which include clauses 3.4.2-7 or
3.4.2-8.

**3.4.2-7** **Federal, State, and Local Taxes\--Fixed-Price,
Noncompetitive Contract** (April 1996)

\(a\) Definitions:

\(1\) \'Contract date,\' as used in this clause, means the effective
date of this contract and, for any modification to this contract, the
effective date of the modification.

\(2\) \'All applicable Federal, State, and local taxes and duties,\' as
used in this clause, means all taxes and duties, in effect on the
contract date, that the taxing authority is imposing and collecting on
the transactions or property covered by this contract.

\(3\) \'After-imposed tax,\' as used in this clause, means any new or
increased Federal, State, or local tax or duty, or tax that was excluded
on the contract date but whose exclusion was later revoked or amount of
exemption reduced during the contract period, other than an excepted
tax, on the transactions or property covered by this contract that the
Contractor is required to pay or bear as the result of legislative,
judicial, or administrative action taking effect after the contract
date.

\(4\) \'After-relieved tax,\' as used in this clause, means any amount
of Federal, State, or local tax or duty, other than an excepted tax,
that would otherwise have been payable on the transactions or property
covered by this contract, but which the Contractor is not required to
pay or bear, or for which the Contractor obtains a refund or drawback,
as the result of legislative, judicial, or administrative action taking
effect after the contract date.

\(5\) \'Excepted tax,\' as used in this clause, means social security or
other employment taxes, net income and franchise taxes, excess profits
taxes, capital stock taxes, transportation taxes, unemployment
compensation taxes, and property taxes. \'Excepted tax\' does not
include gross income taxes levied on or measured by sales or receipts
from sales, property taxes assessed on completed supplies covered by
this contract, or any tax assessed on the Contractor\'s possession of,
interest in, or use of property, title to which is in the Government.

\(b\) Unless otherwise provided in this contract, the contract price
includes all applicable Federal, State, and local taxes and duties.

\(c\) The contract price shall be increased by the amount of any
after-imposed tax, or of any tax or duty specifically excluded from the
contract price by a term or condition of this contract that the
Contractor is required to pay or bear, including any interest or
penalty, if the Contractor states in writing that the contract price
does not include any contingency for such tax and if liability for such
tax, interest, or penalty was not incurred through the Contractor\'s
fault, negligence, or failure to follow instructions of the Contracting
Officer.

\(d\) The contract price shall be decreased by the amount of any
after-relieved tax. The Government shall be entitled to interest
received by the Contractor incident to a refund of taxes to the extent
that such interest was carried after the Contractor was paid by the
Government for such taxes. The Government shall be entitled to repayment
of any penalty refunded to the Contractor to the extent that the penalty
was paid by the Government.

\(e\) The contract price shall be decreased by the amount of any
Federal, State, or local tax, other than an excepted tax, that was
included in the contract price and that the Contractor is required to
pay or bear, or does not obtain a refund of, through the Contractor\'s
fault, negligence, or failure to follow instructions of the Contracting
Officer.

\(f\) No adjustment shall be made in the contract price under this
clause unless the amount of the adjustment exceeds \$250.

\(g\) The Contractor shall promptly notify the Contracting Officer of
all matters relating to Federal, State, and local taxes and duties that
reasonably may be expected to result in either an increase or decrease
in the contract price and shall take appropriate action as the
Contracting Officer directs. The contract price shall be equitably
adjusted to cover the costs of action taken by the Contractor at the
direction of the Contracting Officer, including any interest, penalty,
and reasonable attorneys\' fees.

\(h\) The Government shall furnish evidence appropriate to establish
exemption from any Federal, State, or local tax when:

\(1\) the Contractor requests such exemption and states in writing that
it applies to a tax excluded from the contract price and

\(2\) a reasonable basis exists to sustain the exemption.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts in fixed-price noncompetitive
contracts to be performed wholly or partly within the United States its
possessions or Puerto Rico when satisfied the contract does not contain
contingencies for state and local taxes.

**3.4.2-8** **Federal, State, and Local Taxes\--Fixed Price Contract**
(April 1996)

\(a\) Definitions:

\(1\) \'Contract date,\' as used in this clause, means the effective
date of this contract or modification.

\(2\) \'All applicable Federal, State, and local taxes and duties,\' as
used in this clause, means all taxes and duties, in effect on the
contract date, that the taxing authority is imposing and collecting on
the transactions or property covered by this contract.

\(3\) \'After-imposed Federal tax,\' as used in this clause, means any
new or increased Federal excise tax or duty, or tax that was exempted or
excluded on the contract date but whose exemption was later revoked or
reduced during the contract period, on the transactions or property
covered by this contract that the Contractor is required to pay or bear
as the result of legislative, judicial, or administrative action taking
effect after the contract date. It does not include social security tax
or other employment taxes.

\(4\) \'After-relieved Federal tax,\' as used in this clause, means any
amount of Federal excise tax or duty, except social security or other
employment taxes, that would otherwise have been payable on the
transactions or property covered by this contract, but which the
Contractor is not required to pay or bear, or for which the Contractor
obtains a refund or drawback, as the result of legislative, judicial, or
administrative action taking effect after the contract date.

\(b\) The contract price includes all applicable Federal, State, and
local taxes and duties.

\(c\) The contract price shall be increased by the amount of any
after-imposed Federal tax, provided the Contractor warrants in writing
that no amount for such newly imposed Federal excise tax or duty or rate
increase was included in the contract price, as a contingency reserve or
otherwise.

\(d\) The contract price shall be decreased by the amount of any
after-relieved Federal tax.

\(e\) The contract price shall be decreased by the amount of any Federal
excise tax or duty, except social security or other employment taxes,
that the Contractor is required to pay or bear, or does not obtain a
refund of, through the Contractor\'s fault, negligence, or failure to
follow instructions of the Contracting Officer.

\(f\) No adjustment shall be made in the contract price under this
clause unless the amount of the adjustment exceeds \$250.

\(g\) The Contractor shall promptly notify the Contracting Officer of
all matters relating to any Federal excise tax or duty that reasonably
may be expected to result in either an increase or decrease in the
contract price and shall take appropriate action as the Contracting
Officer directs.

\(h\) The Government shall, without liability, furnish evidence
appropriate to establish exemption from any State, or local tax when the
Contractor requests such evidence and a reasonable basis exists to
sustain the exemption.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts if the contract is to be performed
wholly or partly within the United States, its possessions or Puerto
Rico when a competitive fixed price contract is contemplated.

**3.4.2-9** **North Carolina State and Local Sales and Use
Tax\--Construction Contracts** (April 1996)

\(a\) \'Materials,\' as used in this clause, means building materials,
supplies, fixtures, and equipment that become a part of or are annexed
to any building or structure erected, altered, or repaired under this
contract.

\(b\) If this is a fixed-price contract, the contract price includes
North Carolina State and local sales and use taxes to be paid on
materials, notwithstanding any other provision of this contract. If this
is a cost-reimbursement contract, any North Carolina State and local
sales and use taxes paid by the Contractor on materials shall constitute
an allowable cost under this contract.

\(c\) At the time specified in paragraph (d) below, the Contractor shall
furnish the Contracting Officer certified statements setting forth the
cost of the materials purchased from each vendor and the amount of North
Carolina State and local sales and use taxes paid. In the event the
Contractor makes several purchases from the same vendor, the certified
statement shall indicate the invoice numbers, the inclusive dates of the
invoices, the total amount of the invoices, and the North Carolina State
and local sales and use taxes paid. The statement shall also include the
cost of any tangible personal property withdrawn from the Contractor\'s
warehouse stock and the amount of North Carolina State and local sales
or use tax paid on this property by the Contractor. Any local sales or
use taxes included in the Contractor\'s statements must be shown
separately from the State sales or use taxes. The Contractor shall
furnish any additional information the Commissioner of Revenue of the
State of North Carolina may require to substantiate a refund claim for
sales or use taxes. The Contractor shall also obtain and furnish to the
Contracting Officer similar certified statements by its subcontractors.

\(d\) If this contract is completed before the next October 1, the
certified statements to be furnished pursuant to paragraph (c) above
shall be submitted within 60 days after completion. If this contract is
not completed before the next October 1, the certified statements shall
be submitted on or before November 30 of each year and shall cover taxes
paid during the 12-month period that ended the preceding September 30.

\(e\) The certified statements to be furnished pursuant to paragraph (c)
above shall be in the following form:

I hereby certify that during the period \_\_\_\_\_\_\_\_\_\_ to
\_\_\_\_\_\_\_\_\_ \[insert dates\], \_\_\_\_\_\_\_\_\_ \[insert name of
Contractor or subcontractor\] paid North Carolina State and local sales
and use taxes aggregating \$ \_\_\_\_\_\_ (State) and \$ \_\_\_\_\_
(local), with respect to building materials, supplies, fixtures, and
equipment that have become a part of or annexed to a building or
structure erected, altered, or repaired by . \_\_\_\_\_\_\_\_\_\_
\[insert name of Contractor or subcontractor\] for the United States of
America, and that the vendors from whom the property was purchased, the
dates and numbers of the invoices covering the purchases, the total
amount of the invoices of each vendor, the North Carolina State and
local sales and use taxes paid on the property (shown separately), and
the cost of property withdrawn from warehouse stock and North Carolina
State and local sales or use taxes paid on this property are as set
forth in the attachments.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for construction to be performed
in North Carolina.

**3.4.2-10** **State and Local Taxes\--Indefinite Delivery Contracts for
Leased Equipment** (April 1996)

Notwithstanding the terms of the \"Federal, State, and Local Taxes\"
clause, the contract price excludes all State and local taxes levied on
or measured by the contract or sales price of the services or completed
supplies furnished under this contract. The Contractor shall state
separately on its invoices taxes excluded from the contract price, and
the Government agrees either to pay the amount of the taxes to the
Contractor or provide evidence necessary to sustain an exemption.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for leased equipment when a
fixed-price indefinite-delivery contract is contemplated, the contract
will be performed wholly or partly within the United States, its
possessions or Puerto Rico, and the place or places of delivery are not
known at the time of contracting.

**3.5-1** **Authorization and Consent** (April 1996)

\(a\) The Government authorizes and consents to all use and manufacture,
in performing this contract or any subcontract at any tier, of any
invention described in and covered by a United States patent

\(1\) Embodied in the structure or composition of any article the
delivery of which is accepted by the Government under this contract or

\(2\) Used in machinery, tools, or methods whose use necessarily results
from compliance by the Contractor or a subcontractor with

\(i\) Specifications or written provisions forming a part of this
contract or

\(ii\) Specific written instructions given by the Contracting Officer
directing the manner of performance. The entire liability to the
Government for infringement of a patent of the United States may be
determined solely by the provisions of the \"Indemnity\" clause, if any,
included in this contract or any subcontract hereunder (including any
lower-tier subcontract), and the Government assumes liability for all
other infringement to the extent of the authorization and consent
hereinabove granted.

\(b\) The Contractor agrees to include, and require inclusion of, this
clause, suitably modified to identify the parties, in all subcontracts
at any tier for supplies or services (including construction,
architect-engineer services, and materials, supplies, models, samples,
and design or testing services. However, omission of this clause from
any subcontract does not affect this authorization and consent.)

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts (including construction;
architect engineering services; dismantling, demolition, or removal of
improvements; and noncommon carrier communications) to the contract work
is not halted because of patent infringement lawsuit, except when both
complete performance and delivery are outside the United States, its
possession, and Puerto Rico.

**3.5-1/alt1** **Authorization and Consent Alternate I** (April 1996)

The following is substituted for paragraph (a) of the clause:

\(a\) The Government authorizes and consents to all use and manufacture
of any invention described in and covered by a United States patent in
the performance of this contract or any subcontract at any tier.

PRESCRIPTION:

Should be used in SIR\'s and contracts for research and development
(including construction and architect engineering services exclusively
for research and development), except when both complete performance and
delivery are outside the United States, its possessions, and Puerto
Rico. When the contract involves R&D and supplies or services, and the
R&D work is the primary purpose of the contract, Alternate I should be
used.

**3.5-1/alt2** **Authorization and Consent Alternate II** (April 1996)

The following is substituted for paragraph (a) of the clause:

\(a\) The Government authorizes and consents to all use and manufacture
in the performance of any order at any tier or subcontract at any tier
placed under this contract for communication services and facilities for
which rates, charges, and tariffs are not established by a Government
regulatory body, of any invention described in and covered by a United
States patent

\(1\) Embodied in the structure or composition of any article the
delivery of which is accepted by the Government under this contract or

\(2\) Used in machinery, tools, or methods whose use necessarily results
from compliance by the contractor or a subcontractor with specifications
or written provisions forming a part of this contract or with specific
written instructions given by the Contracting Officer directing the
manner of performance.

PRESCRIPTION:

Should be used for communications services with a common carrier and the
services are unregulated and not priced by a tariff schedule set by a
regulatory body.

**3.5-2** **Notice and Assistance Regarding Patent and Copyright
Infringement** (April 1996)

\(a\) The Contractor shall report to the Contracting Officer, promptly
and in reasonable written detail, each notice or claim of patent or
copyright infringement based on the performance of this contract of
which the Contractor has knowledge.

\(b\) In the event of any claim or suit against the Government 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 services performed under this contract, the
Contractor shall furnish to the Government, when requested by the
Contracting Officer, all evidence and information in possession of the
Contractor pertaining to such suit or claim. Such evidence and
information may be furnished at the expense of the Government except
where the Contractor has agreed to indemnify the Government.

\(c\) The Contractor agrees to include, and require inclusion of, this
clause in all subcontracts at any tier for supplies or services
(including construction and architect-engineer subcontracts and those
for material, supplies, models, samples, or design or testing services).

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for supplies, services and
research and development (including construction and architect
engineering services), except when both complete performance and
delivery are outside the United States, its possessions, and Puerto Rico
or when the contract indicates that the supplies or other deliverables
are ultimately to be shipped into one of those areas.

**3.5-3** **Patent Indemnity** (April 1996)

\(a\) The Contractor shall indemnify the Government and its 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 the Government 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

\(1\) An infringement resulting from compliance with specific written
instructions of the Contracting Officer 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.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for supplies or services that
normally are or have been sold or offered for sale by any supplier to
the public in the commercial open market or are the same as such
supplies or services with relatively minor modifications, except when:
(a) clause 3.5-1, Alternate I is included (except that clause 3.5-3 may
also be solely applied to supplies or services that have been sold or
offered for sale in the commercial market or are the same as such
supplies or services with relatively minor modification); (b) the
supplies or services clearly are not or have not been sold to the public
in the commercial market (but clause 3.5-3 may be included if a patent
owner contends that the planned acquisition would result in patent
infringement and the prospective contractor is willing to indemnify the
FAA without an increase in contract amount on the basis that the patent
is invalid or not infringed); (c) performance and delivery will be
outside of the U.S., its possessions, or Puerto Rico or the contract
specifies the supplies or deliverables are ultimately to be shipped into
one of those areas; or (d) the contract is solely for architect
engineering services. Recommend legal counsel be consulted regarding
applicability.

**3.5-3/alt1** **Patent Indemnity Alternate I** (April 1996)

The following paragraph (c) is added to the clause:

\(c\) This patent indemnification shall not apply to the following
items: \_\_\_\_\_\_\_\_\_ \[Contracting Officer list and/or identify the
items to be excluded from this indemnity\]

PRESCRIPTION:

Should be used to identify specific parts, components, spare parts, or
services that are excluded from clause 3.5-3. The Contracting Officer
should insert appropriate information in the clause.

**3.5-3/alt2** **Patent Indemnity Alternate II** (April 1996)

The following paragraph (c) is added to the clause:

\(c\) This patent indemnification shall cover the following
items:\_\_\_\_\_\_\_\_\_\_ \[List and/or identify the items to be
included under this indemnity\]

PRESCRIPTION:

Should be used to identify specific parts, components, spare parts, or
services that clause 3.5-3 applies to. The Contracting Officer should
insert appropriate information in the clause

**3.5-3/alt3** **Patent Indemnity Alternate III** (April 1996)

The following paragraph is added to the clause:

( ) As to subcontracts at any tier for communication service, this
clause shall apply only to individual communication service
authorizations over the amount agreed to by the parties and covering
those communications services and facilities

\(1\) That are or have been sold or offered for sale by the Contractor
to the public,

\(2\) That can be provided over commercially available equipment, or

\(3\) That involve relatively minor modifications.

PRESCRIPTION:

Should be used for communication services and facilities where
performance is by a common carrier and the services are unregulated and
are not priced by a tariff schedule set by a regulatory body.

**3.5-4** **Patent Indemnity\--Construction Contracts** (April 1996)

Except as otherwise provided, the Contractor agrees to indemnify the
Government and its officers, agents, and employees against liability,
including costs and expenses, for infringement upon 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 performing this contract or out of the use or
disposal by or for the account of the Government of supplies furnished
or work performed under this contract.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for construction or fixed price
dismantling, demolition, or removal of improvements (subject to the same
conditions as clause 3.5-3)

**3.5-4/alt1** **Patent Indemnity\--Construction Contracts Alternate I**
(April 1996)

Designate the first paragraph as paragraph(a) and add the following to
the basic clause as paragraph (b):

\(b\) This patent indemnification shall not apply to the following
items:

\_\_\_\_\_\_\_\_\_\_\_ \[Contracting Officer specifically identify the
item to be excluded\]

Note: Exclusion from indemnity of specified, identified patents, as
distinguished from items, is the exclusive prerogative of the agency
head or designee.

PRESCRIPTION:

Should used to exclude clause 3.5-4 from nonstandard, noncommercial, or
special products, materials, equipment, or methods to be used. The
Contracting Officer should insert appropriate information in the clause.

**3.5-5** **Waiver of Indemnity** (April 1996)

Any provision or clause of this contract to the contrary
notwithstanding, the Government hereby authorizes and consents to the
use and manufacture, solely in performing this contract, of any
invention covered by the United States patents identified below and
waives indemnification by the Contractor with respect to such patents:

\_\_\_\_\_\_\_\_\_\_\_ \[Contracting Officer identify the patents by
number or by other means if more appropriate\]

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when it is appropriate to exempt
one or more specific U.S. patents from the patent indemnity clause and
it has been approved by the Contracting Officer. The Contracting Officer
should insert appropriate information in the clause.

**3.5-6** **Royalty Information** (April 1996)

\(a\) Cost or charges for royalties. When the response to this
solicitation contains costs or charges for royalties totaling more than
\$250, the following information may be included in the response
relating to each separate item of royalty or license fee:

\(1\) Name and address of licenser.

\(2\) Date of license agreement.

\(3\) Patent numbers, patent application serial numbers, or other basis
on which the royalty is payable.

\(4\) Brief description, including any part or model numbers of each
contract item or component on which the royalty is payable.

\(5\) Percentage or dollar rate of royalty per unit.

\(6\) Unit price of contract item.

\(7\) Number of units.

\(8\) Total dollar amount of royalties.

\(b\) Copies of current licenses. In addition, if specifically requested
by the Contracting Officer before execution of the contract, the offeror
shall furnish a copy of the current license agreement and an
identification of applicable claims of specific patents.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a negotiated contract for
which royalty information is desired.

**3.5-6/alt1** **Royalty Information Alternate I** (April 1996)

Substitute the following for the introductory portion of paragraph (a)
of the basic clause:

When the response to this solicitation covers charges for special
construction or special assembly that contain costs or charges for
royalties totaling more than \$250, the following information shall be
included in the response relating to each separate item of royalty or
license fee:

PRESCRIPTION:

Should be used when the SIR is for communication services and facilities
by a common carrier.

**3.5-7** **Patents\--Notice of Government Licensee** (April 1996)

The Government is obligated to pay a royalty applicable to the proposed
acquisition because of a license agreement between the Government and
the patent owner. The patent number is

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\[Contracting Officer fill in\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\[Contracting Officer fill in\]

If the offeror is the owner of, or a licensee under, the patent,
indicate below:

( ) Owner ( ) Licensee

If an offeror does not indicate that it is the owner or a licensee of
the patent, its offer will be evaluated by adding thereto an amount
equal to the royalty.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts where the FAA is obligated to pay
a royalty on a patent involved in the prospective contract and offerors
will be required to submit information whether or not they are a
licensee under the patent or are the patent owner. The Contracting
Officer should insert appropriate information in the clause.

**3.5-8** **Refund of Royalties** (April 1996)

\(a\) The contract price includes certain amounts for royalties payable
by the Contractor or subcontractors or both, which amounts have been
reported to the Contracting Officer.

\(b\) The term royalties as used in this clause refers to any costs or
charges in the nature of royalties, license fees, patent or license
amortization costs, or the like, for the use of or for rights in patents
and patent applications in connection with performing this contract or
any subcontract hereunder.

\(c\) The Contractor shall furnish to the Contracting Officer, before
final payment under this contract, a statement of royalties paid or
required to be paid in connection with performing this contract and
subcontracts hereunder together with the reasons.

\(d\) The Contractor will be compensated for royalties reported under
paragraph (c) above, only to the extent that such royalties were
included in the contract price and are determined by the Contracting
Officer to be properly chargeable to the Government and allocable to the
contract. To the extent that any royalties that are included in the
contract price are not in fact paid by the Contractor or are determined
by the Contracting Officer not to be properly chargeable to the
Government and allocable to the contract, the contract price may be
reduced. Repayment or credit to the Government may be made as the
Contracting Officer directs.

\(e\) If, at any time within 3 years after final payment under this
contract, the Contractor for any reason is relieved in whole or in part
from the payment of the royalties included in the final contract price
as adjusted pursuant to paragraph (d) above, the Contractor shall
promptly notify the Contracting Officer of that fact and shall reimburse
the Government in a corresponding amount.

\(f\) The substance of this clause, including this paragraph (f), shall
be included in any subcontract in which the amount of royalties reported
during negotiation of the subcontract exceeds \$250.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts which are fixed price,
contemplating such contracts if the Contracting Officer determines that
circumstances make it questionable whether or not substantial amounts of
royalties will have to be paid by the contractor or a subcontractor at
any tier. The clause should be modified for incentive type contracts by
substituting \"target cost and target profit\" for \"price\" wherever it
appears.

**3.5-9** **Filing of Patent Applications\--Classified Subject Matter**
(April 1996)

\(a\) Before filing or causing to be filed a patent application in the
United States disclosing any subject matter of this contract classified
Secret or higher, the Contractor shall, citing the 30-day provision
below, transmit the proposed application to the Contracting Officer. The
Government shall determine whether, for reasons of national security,
the application should be placed under an order of secrecy, sealed in
accordance with the provision of 35 U.S.C. 181-188, or the issuance of a
patent otherwise delayed under pertinent United States statutes or
regulations. The Contractor shall observe any instructions of the
Contracting Officer regarding the manner of delivery of the patent
application to the United States Patent Office, but the Contractor shall
not be denied the right to file the application. If the Contracting
Officer shall not have given any such instructions within 30 days from
the date of mailing or other transmittal of the proposed application,
the Contractor may file the application.

\(b\) Before filing a patent application in the United States disclosing
any subject matter of this contract classified Confidential, the
Contractor shall furnish to the Contracting Officer a copy of the
application for Government determination whether, for reasons of
national security, the application should be placed under an order of
secrecy or the issuance of a patent should be otherwise delayed under
pertinent United States statutes or regulations.

\(c\) Where the subject matter of this contract is classified for
reasons of security, the Contractor shall not file, or cause to be
filed, in any country other than in the United States as provided in
paragraphs (a) and (b) of this clause, an application or registration
for a patent containing any of the subject matter of this contract
without first obtaining written approval of the Contracting Officer.

\(d\) When filing any patent application coming within the scope of this
clause, the Contractor shall observe all applicable security regulations
covering the transmission of classified subject matter and may promptly
furnish to the Contracting Officer the serial number, filing date, and
name of the country of any such application. When transmitting the
application to the United States Patent Office, the Contractor shall by
separate letter identify by agency and number the contract or contracts
that require security classification markings to be placed on the
application.

\(e\) The Contractor agrees to include, and require the inclusion of,
this clause in all subcontracts at any tier that cover or are likely to
cover classified subject matter.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts which are classified and where the
nature of the work or classified subject matter involved in the work
reasonably might be expected to result in a patent application
containing classified subject matter.

**3.5-10** **Patent Rights\--Retention by the Contractor (Short Form)**
(October 1996)

\(a\) Definitions.

\(1\) \"Invention\" means any invention or discovery which is or may be
patentable or otherwise protectable under title 35 of the United States
Code, or any novel variety of plant which is or may be protected under
the Plant Variety Protection Act (7 U.S.C. 2321, et seq.).

\(2\) \"Made\" when used in relation to any invention means the
conception of first actual reduction to practice of such invention.

\(3\) \"Nonprofit organization\" means a university or other institution
of higher education or an organization of the type described in section
501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)) and
exempt from taxation under section 501(a) of the Internal Revenue Code
(26 U.S.C. 501(a)) or any nonprofit scientific or educational
organization qualified under a state nonprofit organization statute.

\(4\) \"Practical application\" means to manufacture, in the case of a
composition of product; to practice, in the case of a process or method,
or to operate, in the case of a machine or system; and, in each case,
under such conditions as to establish that the invention is being
utilized and that its benefits are, to the extent permitted by law or
Government regulations, available to the public on reasonable terms.

\(5\) \"Small business firm\" means a small business concern as defined
in the Federal Aviation Administration (FAA) Acquisition Management
System. For the purpose of this clause, the size standards for small
business concerns involved in Government procurement and subcontracting
at 13 CFR 121.3-8 and 13 CFR 121.3-12, respectively, will be used.

\(6\) \"Subject invention\" means any invention of the contractor
conceived or first actually reduced to practice in the performance of
work under this contract, provided that in the case of a variety of
plant, the date of determination (as defined in section 41(d) of the
Plant Variety Protection Act, 7 U.S.C. 2401(d)) must also occur during
the period of contract performance.

\(b\) Allocation of principal rights. The Contractor may retain the
entire right, title, and interest throughout the world to each subject
invention subject to the provisions of this clause and 35 U.S.C. 203.
With respect to any subject invention in which the Contractor retains
title, the Federal Government shall have a nonexclusive,
nontransferable, irrevocable, paid-up license to practice or have
practiced for or on behalf of the United States the subject invention
throughout the world.

\(c\) Invention disclosure, election of title, and filing of patent
application by contractor.

\(1\) The Contractor will disclose each subject invention to the Federal
agency within 2 months after the inventor discloses it in writing to
Contractor personnel responsible for patent matters. The disclosure to
the agency shall be in the form of a written report and shall identify
the contract under which the invention was made and the inventor(s). It
shall be sufficiently complete in technical detail to convey a clear
understanding to the extent known at the time of the disclosure, of the
nature, purpose, operation, and the physical, chemical, biological or
electrical characteristics of the invention. The disclosure shall also
identify any publication, on sale or public use of the invention and
whether a manuscript describing the invention has been submitted for
publication and, if so, whether it has been accepted for publication at
the time of disclosure. In addition, after disclosure to the agency, the
contractor will promptly notify the agency of the acceptance of any
manuscript describing the invention for publication, or of any on sale
or public use planned by the Contractor.

\(2\) The Contractor will elect in writing whether or not to retain
title to any such invention by notifying the Federal agency within 2
years of disclosure to the Federal agency. However, in any case where
publication, on sale or public use has initiated the 1 year statutory
period wherein valid patent protection can still be obtained in the
United States, the period for election of title may be shortened by the
agency to a date that is no more than 60 days prior to the end of the
statutory period.

\(3\) The Contractor will file its initial patent application on a
subject invention to which it elects to retain title within 1 year after
election of title, or, if earlier, prior to the end of any statutory
period wherein valid patent protection can be obtained in the United
States after a publication, on sale, or public use. The Contractor will
file patent applications in additional countries or international patent
offices within either 10 months of the corresponding initial patent
application or 6 months from the date permission is granted by the
Commissioner of Patents and Trademarks to file foreign patent
applications where such filing has been prohibited by a Secrecy Order.

\(4\) Requests for extension of the time for disclosure election, and
filing under subparagraphs (c) (1), (2), and (3) of this clause may, at
the discretion of the agency, be granted.

\(d\) Conditions when the Government may obtain title. The Contractor
will convey to the Federal agency, upon written request, title to any
subject invention-

\(1\) If the Contractor fails to disclose or elect title to the subject
invention within the times specified in paragraph (c) of this clause, or
elects not to retain title; provided, that the agency may only request
title within 60 days after learning of the failure of the Contractor to
disclose or elect within the specified times.

\(2\) In those countries in which the Contractor fails to file patent
applications within the times specified in paragraph (c) of this clause;
provided, however, that if the Contractor has filed a patent application
in a country after the times specified in paragraph (c) of this clause,
but prior to its receipt of the written request of the Federal agency,
the Contractor may continue to retain title in that country.

\(3\) In any country in which the Contractor decides not to continue the
prosecution of any application for, to pay the maintenance fees on, or
defend in reexamination or opposition proceeding on, a patent on a
subject invention.

\(e\) Minimum rights to Contractor and protection of the Contractor
right to file.

\(1\) The Contractor will retain a nonexclusive royalty-free license
throughout the world in each subject invention to which the Government
obtains title, except if the Contractor fails to disclose the invention
within the times specified in paragraph (c) of this clause. The
Contractor\'s license extends to its domestic subsidiary and affiliates,
if any, within the corporate structure of which the Contractor is a
party and includes the right to grant sublicenses of the same scope to
the extent the Contractor was legally obligated to do so at the time the
contract was awarded. The license is transferable only with the approval
of the Federal Agency, except when transferred to the successor of that
part of the Contractor\'s business to which the invention pertains.

\(2\) The Contractor\'s domestic license may be revoked or modified by
the funding Federal agency to the extent necessary to achieve
expeditious practical application of subject invention pursuant to an
application for an exclusive license submitted in accordance with
applicable provisions at 37 CFR part 404 and agency licensing
regulations (if any). This license will not be revoked in that field of
use or the geographical areas in which the Contractor has achieved
practical application and continues to make the benefits of the
invention reasonably accessible to the public. The license in any
foreign country may be revoked or modified at the discretion of the
funding Federal agency to the extent the Contractor, its licensees, or
the domestic subsidiaries or affiliates have failed to achieve practical
application in that foreign country.

\(3\) Before revocation or modification of the license, the funding
Federal agency will furnish the Contractor a written notice of its
intention to revoke or modify the license, and the Contractor will be
allowed 30 days (or such other time as may be authorized by the funding
Federal agency for good cause shown by the Contractor) after the notice
to show cause why the license should not be revoked or modified. The
Contractor has the right to appeal, in accordance with applicable
regulations in 37 CFR part 404 and agency regulations, if any,
concerning the licensing revocation of modification of the license.

\(f\) Contractor action to protect the Government\'s interest.

\(1\) The Contractor agrees to execute or to have executed and promptly
deliver to the Federal agency all instruments necessary to (i) establish
or confirm the rights the Government has throughout the world in those
subject inventions to which the Contractor elects to retain title, and
(ii) convey title to the Federal agency when requested under paragraph
(d) of this clause and to enable the Government to obtain patent
protection throughout the world in that subject invention.

\(2\) The Contractor agrees to require, by written agreement, its
employees, other than clerical and nontechnical employees, to disclose
promptly in writing to personnel identified as responsible for the
administration of patent matters and in a format suggested by the
Contractor each subject invention made under contract in order that the
Contractor can comply with the disclosure provisions of paragraph (c) of
this clause, and to execute all papers necessary to file patent
applications on subject inventions and to establish the Government\'s
rights in the subject inventions. This disclosure format should require,
as a minimum, the information required by subparagraph (c)(1) of this
clause. The Contractor may instruct such employees, through employee
agreements or other suitable educational programs, on the importance of
reporting inventions in sufficient time to permit the filing of patent
applications prior to U.S. or foreign statutory bars.

\(3\) The Contractor will notify the Federal agency of any decisions not
to continue the prosecution of a patent application, pay maintenance
fees, or defend in a reexamination or opposition proceeding on a patent,
in any country, not less than 30 days before the expiration of the
response period required by the relevant patent office.

\(4\) The Contractor agrees to include, within the specification of any
United States patent application and any patent issuing thereon covering
a subject invention, the following statement, \"The invention was made
with Government support under (identify the contract) awarded by
(identify the Federal agency). The Government has certain rights in the
invention.\"

\(g\) Subcontracts.

\(1\) The Contractor will include this clause, suitably modified to
identify the parties, in all subcontracts, regardless of tier, for
experimental, developmental, or research work to be performed by a small
business firm or domestic nonprofit organization. The subcontractor will
retain all rights provided for the Contractor in this clause, and the
Contractor will not, as part of the consideration for awarding the
subcontract, obtain rights in the subcontractor\'s subject inventions.

\(2\) The Contractor will include in all other subcontracts, regardless
of tier, for experimental, developmental, or research work the patent
rights clause required to adequately protect the Government\'s interests
consistent with section 3.5 of the FAA Acquisition Management System.

\(3\) In the case of subcontracts, at any tier, the agency,
subcontractor, and the Contractor agree that the mutual obligations of
the parties created by this clause constitute a contract between the
subcontractor and the Federal agency with respect to the matters covered
by the clause; provided, however, that nothing in this paragraph is
intended to confer any jurisdiction under the FAA disputes resolution
process, or any board or judicial proceeding, in connection with
proceedings under paragraph (j) of this clause.

\(h\) Reporting on utilization of subject inventions. The Contractor
agrees to submit, on request, periodic reports no more frequently than
annually on the utilization of a subject invention or on efforts at
obtaining such utilization that are being made by the Contractor or its
licensees or assignees. Such reports may include information regarding
the status of development, date of first commercial sale or use, gross
royalties received by the Contractor, and such other data and
information as the agency may reasonably specify. The Contractor also
agrees to provide additional reports as may be requested by the agency
in connection with any march-in proceeding undertaken by the agency in
accordance with paragraph (j) of this clause. As required by 35 U.S.C.
202(c)(5), the agency agrees it will not disclose such information to
persons outside the Government without permission of the Contractor.

\(i\) Preference for United States industry. Notwithstanding any other
provision of this clause, the Contractor agrees that neither it nor any
assignee will grant to any person the exclusive right to use or sell any
subject invention in the United States unless such person agrees that
any product embodying the subject invention or produced through the use
of the subject invention will be manufactured substantially in the
United States. However, in individual cases, the requirement for such an
agreement may be waived by the Federal agency upon a showing by the
Contractor or its assignee that reasonable but unsuccessful efforts have
been made to grant licenses on similar terms to potential licensees that
would be likely to manufacture substantially in the United States or
that under the circumstances domestic manufacture is not commercially
feasible.

\(j\) March-in rights. The Contractor agrees that, with respect to any
subject invention in which it has acquired title, the Federal agency has
the right in accordance with the procedures in 37 CFR 401.6 and any
supplemental regulations of the agency to require the Contractor, an
assignee or exclusive licensee of a subject invention to grant a
nonexclusive, partially exclusive, or exclusive license in any field of
use to a responsible applicant or applicants, upon terms that are
reasonable under the circumstances, and if the Contractor, assignee, or
exclusive licensee refuses such a request the Federal agency has the
right to grant such a license itself if the Federal agency determines
that\--

\(1\) Such action is necessary because the Contractor or assignee has
not taken, or is not expected to take within a reasonable time,
effective steps to achieve practical application of the subject
invention in such field of use;

\(2\) Such action is necessary to alleviate health or safety needs which
are not reasonably satisfied by the Contractor, assignee, or their
licensees;

\(3\) Such action is necessary to meet requirements for public use
specified by Federal regulations and such requirements are not
reasonably satisfied by the Contractor, assignee, or licensees;

\(4\) Such action is necessary because the agreement required by
paragraph (i) of this clause has not been obtained or waived or because
a licensee of the exclusive right to use or sell any subject invention
in the United States is in breach of such agreement.

\(k\) Special provisions for contracts with nonprofit organizations. If
the Contractor is a nonprofit organization, it agrees that\--

\(1\) Rights to a subject invention in the United States may not be
assigned without the approval of the Federal agency, except where such
assignment is made to an organization which has as one of its primary
functions the management of inventions, provided that such assignee will
be subject to the same provisions as the Contractor;

\(2\) The Contractor will share royalties collected on a subject
invention with the inventor, including Federal employee co-inventors
(when the agency deems it appropriate) when the subject invention is
assigned in accordance with 35 U.S.C. 202(e) and 37 CFR 401.10;

\(3\) The balance of any royalties or income earned by the Contractor
with respect to subject inventions, after payment of expenses (including
payments to inventors) incidental to the administration of subject
inventions will be utilized for the support of scientific research or
education; and

\(4\) It will make efforts that are reasonable under the circumstances
to attract licensees of subject inventions that are small business
firms, and that it will give a preference to a small business firm when
licensing a subject invention if the Contractor determines that the
small business firm has a plan or proposal for marketing the invention
which, if executed, is equally as likely to bring the invention to
practical application as any plans or proposals from applicants that are
not small business firms; provided, that the Contractor is also
satisfied that the small business firm has the capability and resources
to carry out its plan or proposal. The decision whether to give a
preference in any specific case will be at the discretion of the
contractor. However, the Contractor agrees that the Secretary of
Commerce may review the Contractor\'s licensing program and decisions
regarding small business applicants, and the Contractor will negotiate
changes to its licensing policies, procedures, or practices with the
Secretary of Commerce when the Secretary\'s review discloses that the
Contractor could take reasonable steps to more effectively implement the
requirements of this subparagraph (k)(4).

\(l\) Communications. (Reserved)

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for research and development if(
the contractor is a small business concern, nonprofit organization, or
any other type of contractor and; no alternative patent rights clause is
used (i.e., clause 3.5-12).

**3.5-10/alt1** **Patent Rights\--Retention by the Contractor (Short
Form) Alternate I** (October 1996)

Add the following to the end of paragraph (b) of the basic clause.

The license may include the right of the Government to sublicense
foreign government , their nationals and international organizations
pursuant to the following treaties or international agreements:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\*

\[\*Contracting Officer complete with the names of applicable existing
treaties or international agreements. The above language is not intended
to apply to treaties or agreements that are in effect on the date of the
award but are not listed.\]

PRESCRIPTION:

Should be used when patent rights are for the benefit of a foreign
government under a foreign treaty or executive agreement, or if the
agency head or a designee determines at the time of contracting that it
would be in the national interest to acquire the right to sublicense
foreign governments or international organizations pursuant to an
existing or future treaty or agreement. Alternate I may be appropriately
modified to effectuate the treaty or agreement.

**3.5-10/alt2** **Patent Rights\--Retention by the Contractor (Short
Form) Alternate II** (October 1996)

Add the following to the end of paragraph (b) of the basic clause.

The agency reserves the right to unilaterally amend this contract to
identify specific treaties or international agreements entered into or
to be entered into by the Government after the effective date of the
contract and effectuate those license or other rights which are
necessary for the Government to meet its obligations to foreign
government , their nationals and international organizations under such
treaties or international agreements with respect to subject inventions
made after the date of the amendment.

PRESCRIPTION:

Should be used in long term contracts.

**3.5-10/alt3** **Patent Rights\--Retention by the Contractor (Short
Form) Alternate III** (October 1996)

Substitute the following in place of paragraph (k)(3) of the basic
clause.

\(3\) After payment of patenting costs, licensing costs, payments to
inventors, and other expenses incidental to the administration of
subject inventions, the balance of any royalties or income earned and
retained by the Contractor during any fiscal year on subject inventions
under this or any successor contract containing the same requirement, up
to any amount equal to 5 percent of the budget of the facility for that
fiscal year, may be used by the Contractor for the scientific research,
development, and education consistent with the research and development
mission and objectives of the facility, including activities that
increase the licensing potential of other inventions of the facility. If
the balance exceeds 5 percent, 75 percent of the excess above 5 percent
may be paid by the Contractor to the Treasury of the United States and
the remaining 25 percent may be used by the Contractor only for the same
purposes as described above. To the extent it provides the most
effective technology transfer, the licensing of subject inventions may
be administered by Contractor employees on location at the facility.

PRESCRIPTION:

Should be used in contracts with nonprofit organization for the
operation of a Government owned facility.

**3.5-10/alt4** **Patent Rights\--Retention by the Contractor (Short
Form) Alternate IV** (October 1996)

Include the following subparagraph in paragraph (f) of the basic clause.

\(5\) The Contractor may establish and maintain active and effective
procedures to ensure that subject inventions are promptly identified and
timely disclosed, and may submit a description of the procedures to the
Contracting Officer so that the Contracting Officer may evaluate and
determine their effectiveness.

PRESCRIPTION:

Should be used in contracts for the operation of a Government owned
facility.

**3.5-11** **Patent Rights\--Retention by the Contractor (Long Form)**
(October 1996)

\(a\) Definitions.

\(1\) \"Invention\" means any invention or discovery which is or may be
patentable or otherwise protectable under title 35 of the United States
Code or any novel variety of plant that is or may be protectable under
the Plant Variety Protection Act (7 U.S.C. 2321 et seq.).

\(2\) \"Made\" when used in relation to any invention means the
conception or first actual reduction to practice of such invention.

\(3\) \"Nonprofit organization\" means a domestic university or other
institution of higher education or an organization of the type described
in section 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C.
501(c)) and exempt from taxation under section 501(a) of the Internal
Revenue Code (26 U.S.C. 501(a)) or any nonprofit scientific or
educational organization qualified under a state nonprofit organization
statute.

\(4\) \"Practical application\" means to manufacture in the case of a
composition or product, to practice in the case of a process or method,
or to operate in the case of a machine or system; and, in each case,
under such conditions as to establish that the invention is being
utilized and that its benefits are, to the extent permitted by law or
Government regulations, available to the public on reasonable terms.

\(5\) \"Small business firm\" means a small business concern as defined
in the Federal Aviation Administration (FAA) Acquisition Management
System. For the purpose of this clause, the size standards for small
business concerns involved in Government procurement and subcontracting
at 13 CFR 121.3-8 and 13 CFR 121.3-12, respectively, will be used.

\(6\) \"Subject invention\" means any invention of the Contractor
conceived or first actually reduced to practice in the performance of
work under this contract; provided, that in the case of a variety of
plant, the date of determination (as defined in section 41(d) of the
Plant Variety Protection Act, 7 U.S.C. 2401(d)) must also occur during
the period of contract performance.

\(b\) Allocation of principal rights. The Contractor may elect to retain
the entire right, title, and interest throughout the world to each
subject invention subject to the provisions of this clause and 35 U.S.C.
203. With respect to any subject invention in which the Contractor
elects to retain title, the Federal Government shall have a
nonexclusive, nontransferable, irrevocable, paid-up license to practice
or have practiced for or on behalf of the United States the subject
invention throughout the world.

\(c\) Invention disclosure, election of title, and filing of patent
applications by Contractor.

\(1\) The Contractor shall disclose each subject invention to the
Contracting Officer within 2 months after the inventor discloses it in
writing to Contractor personnel responsible for patent matters or within
6 months after the Contractor becomes aware that a subject invention has
been made, whichever is earlier. The disclosure to the Contracting
Officer shall be in the form of a written report and shall identify the
contract under which the invention was made and the inventor(s). It may
be sufficiently complete in technical detail to convey a clear
understanding, to the extent known at the time of the disclosure, of the
nature, purpose, operation, and physical, chemical, biological, or
electrical characteristics of the invention. The disclosure may also
identify any publication, on sale, or public use of the invention and
whether a manuscript describing the invention has been submitted for
publication and, if so, whether it has been accepted for publication at
the time of disclosure. In addition, after disclosure to the Contracting
Officer, the Contractor shall promptly notify the Contracting Officer of
the acceptance of any manuscript describing the invention for
publication or of any on sale or public use planned by the Contractor.

\(2\) The Contractor shall elect in writing whether or not to retain
title to any such invention by notifying the Federal agency at the time
of disclosure or within 8 months of disclosure, as to those countries
(including the United States) in which the Contractor will retain title;
provided, that in any case where publication, on sale, or public use has
initiated the 1-year statutory period wherein valid patent protection
can still be obtained in the United States, the period of election of
title may be shortened by the agency to a date that is no more than 60
days prior to the end of the statutory period.

\(3\) The Contractor shall file its initial patent application on an
elected invention within 1 year after election or, if earlier, prior to
the end of any statutory period wherein valid patent protection can be
obtained in the United States after a publication, on sale, or public
use. The Contractor shall file patent applications in additional
countries (including the European Patent Office and under the Patent
Cooperation Treaty) within either 10 months of the corresponding initial
patent application or 6 months from the date permission is granted by
the Commissioner of Patents and Trademarks to file foreign patent
applications where such filing has been prohibited by a Secrecy Order.

\(4\) Requests for extension of the time for disclosure to the
Contracting Officer, election, and filing may, at the discretion of the
funding Federal agency, be granted, and will normally be granted unless
the Contracting Officer has reason to believe that a particular
extension would prejudice the Government\'s interest.

\(d\) Conditions when the Government may obtain title. The Contractor
shall convey to the Federal agency, upon written request, title to any
subject invention-

\(1\) If the Contractor elects not to retain title to a subject
invention;

\(2\) If the Contractor fails to disclose or elect the subject invention
within the times specified in paragraph (c) above (the agency may only
request title within 60 days after learning of the Contractor\'s failure
to report or elect within the specified times);

\(3\) In those countries in which the Contractor fails to file patent
applications within the times specified in paragraph ( ) above;
provided, however, that if the Contractor has filed a patent application
in a country after the times specified in paragraph (c) above, but prior
to its receipt of the written request of the Federal agency, the
Contractor may continue to retain title in that country; or

\(4\) In any country in which the Contractor decides not to continue the
prosecution of any application for, to pay the maintenance fees on, or
defend in reexamination or opposition proceeding on, a patent on a
subject invention.

\(e\) Minimum rights to Contractor.

\(1\) The Contractor shall retain a nonexclusive, royalty-free license
throughout the world in each subject invention to which the Government
obtains title except if the Contractor fails to disclose the subject
invention within the times specified in paragraph (c) above. The
Contractor\'s license extends to its domestic subsidiaries and
affiliates, if any, within the corporate structure of which the
Contractor is a part and includes the right to grant sublicenses of the
same scope to the extent the Contractor was legally obligated to do so
at the time the contract was awarded. The license is transferable only
with the approval of the funding Federal agency except when transferred
to the successor of that part of the Contractor\'s business to which the
invention pertains.

\(2\) The Contractor\'s domestic license may be revoked or modified by
the funding Federal agency to the extent necessary to achieve
expeditious practical application of the subject invention pursuant to
an application for an exclusive license submitted in accordance with
applicable Federal licensing provisions and agency licensing regulations
(if any). This license shall not be revoked in that field of use or the
geographical areas in which the Contractor has achieved practical
application and continues to make the benefits of the invention
reasonably accessible to the public. The license in any foreign country
may be revoked or modified at the discretion of the funding Federal
agency to the extent the Contractor, its licensees, or its domestic
subsidiaries or affiliates have failed to achieve practical application
in that foreign country.

\(3\) Before revocation or modification of the license, the funding
Federal agency shall furnish the Contractor a written notice of its
intention to revoke or modify the license, and the Contractor shall be
allowed 30 days (or such other time as may be authorized by the funding
Federal agency for good cause shown by the Contractor) after the notice
to show cause why the license should not be revoked or modified. The
Contractor has the right to appeal, in accordance with applicable agency
licensing regulations and 37 CFR 404 concerning the licensing of
Government-owned inventions, any decision concerning the revocation or
modification of its license.

\(f\) Contractor action to protect the Government\'s interest.

\(1\) The Contractor agrees to execute or to have executed and promptly
deliver to the Federal agency all instruments necessary to

\(i\) Establish or confirm the rights the Government has throughout the
world in those subject inventions to which the Contractor elects to
retain title, and

\(ii\) Convey title to the Federal agency when requested under paragraph
(d) above and subparagraph (n)(2) below, and to enable the Government to
obtain patent protection throughout the world in that subject invention.

\(2\) The Contractor agrees to require, by written agreement, its
employees, other than clerical and nontechnical employees, to disclose
promptly in writing to personnel identified as responsible for the
administration of patent matters and in a format suggested by the
Contractor each subject invention made under contract in order that the
Contractor can comply with the disclosure provisions of paragraph (c)
above, and to execute all papers necessary to file patent applications
on subject inventions and to establish the Government\'s rights in the
subject inventions. This disclosure format should require, as a minimum,
the information required by subparagraph (c)(1) above. The Contractor
shall instruct such employees through employee agreements or other
suitable educational programs on the importance of reporting inventions
in sufficient time to permit the filing of patent applications prior to
U.S. or foreign statutory bars.

\(3\) The Contractor shall notify the Federal agency of any decision not
to continue the prosecution of a patent application, pay maintenance
fees, or defend in a reexamination or opposition proceeding on a patent,
in any country, not less than 30 days before the expiration of the
response period required by the relevant patent office.

\(4\) The Contractor agrees to include, within the specification of any
United States patent application and any patent issuing thereon covering
a subject invention, the following statement: \"This invention was made
with Government support under \_\_\_\_\_\_\_\_\_\_\_\_\_\_ (identify the
contract) awarded by \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (identify the
Federal agency). The Government has certain rights in this invention.\'

\(5\) The Contractor shall establish and maintain active and effective
procedures to assure that subject inventions are promptly identified and
disclosed to Contractor personnel responsible for patent matters within
6 months of conception and/or first actual reduction to practice,
whichever occurs first in performance of work under this contract. These
procedures shall include the maintenance of laboratory notebooks or
equivalent records and other records as are reasonably necessary to
document the conception and/or the first actual reduction to practice of
subject inventions, and records that show that the procedures for
identifying and disclosing the inventions are followed. Upon request,
the Contractor may furnish the Contracting Officer a description of such
procedures for evaluation and for determination as to their
effectiveness.

\(6\) The Contractor agrees, when licensing a subject invention, to
arrange to avoid royalty charges on acquisitions involving Government
funds, including funds derived through Military Assistance Program of
the Government or otherwise derived through the Government, to refund
any amounts received as royalty charges on the subject invention in
acquisitions for, or on behalf of, the Government, and to provide for
such refund in any instrument transferring rights in the invention to
any party.

\(7\) The Contractor shall furnish the Contracting Officer the
following:

\(i\) Interim reports every 12 months (or such longer period as may be
specified by the Contracting Officer) from the date of the contract,
listing subject inventions during that period and certifying that all
subject inventions have been disclosed or that there are no such
inventions.

\(ii\) A final report, within 3 months after completion of the
contracted work, listing all subject inventions or certifying that there
were no such inventions, and listing all subcontracts at any tier
containing a patent rights clause or certifying that there were no such
subcontracts.

\(8\) The Contractor shall promptly notify the Contracting Officer in
writing upon the award of any subcontract at any tier containing a
patent rights clause by identifying the subcontractor, the applicable
patent rights clause, the work to be performed under the subcontract,
and the dates of award and estimated completion. Upon request of the
Contracting Officer, the Contractor may furnish a copy of such
subcontract, and no more frequently than annually, a listing of the
subcontracts that have been awarded.

\(9\) In the event of a refusal by a prospective subcontractor to accept
one of the clauses in subparagraph (g)(1) or (2) below, the Contractor
(i) shall promptly submit a written notice to the Contracting Officer
setting forth the subcontractor\'s reasons for such refusal and other
pertinent information that may expedite disposition of the matter and
(ii) may not proceed with such subcontracting without the written
authorization of the Contracting Officer.

\(10\) The Contractor shall provide, upon request, the filing date,
serial number and title, a copy of the patent application (including an
English-language version if filed in a language other than English), and
patent number and issue date for any subject invention for which the
Contractor has retained title.

\(11\) Upon request, the Contractor shall furnish the Government an
irrevocable power to inspect and make copies of the patent application
file.

\(g\) Subcontracts.

\(1\) The Contractor shall include the clause at 3.5-10, suitably
modified to identify the parties, in all subcontracts, regardless of
tier, for experimental, developmental, or research work to be performed
by a small business firm or nonprofit organization. The subcontractor
may retain all rights provided for the Contractor in this clause, and
the Contractor shall not, as part of the consideration for awarding the
subcontract, obtain rights in the subcontractor\'s subject inventions.

\(2\) The Contractor shall include this clause (3.5-11) in all other
subcontracts, regardless of tier, for experimental, developmental, or
research work.

\(3\) In the case of subcontracts, at any tier, when the prime award
with the Federal agency was a contract (but not a grant or cooperative
agreement), the agency, subcontractor, and the Contractor agree that the
mutual obligations of the parties created by this clause constitute a
contract between the subcontractor and the Federal agency with respect
to those matters covered by this clause.

\(h\) Reporting utilization of subject inventions. The Contractor agrees
to submit on request periodic reports no more frequently than annually
on the utilization of a subject invention or on efforts at obtaining
such utilization that are being made by the Contractor or its licensees
or assignees. Such reports may include information regarding the status
of development, date of first commercial sale or use, gross royalties
received by the Contractor, and such other data and information as the
agency may reasonably specify. The Contractor also agrees to provide
additional reports as may be requested by the agency in connection with
any march-in proceedings undertaken by the agency in accordance with
paragraph (j) of this clause. To the extent data or information supplied
under this paragraph is considered by the Contractor, its licensee or
assignee to be privileged and confidential and is so marked, the agency
agrees that, to the extent permitted by law, it may not disclose such
information to persons outside the Government.

\(i\) Preference for United States industry. Notwithstanding any other
provision of this clause, the Contractor agrees that neither it nor any
assignee will grant to any person the exclusive right to use or sell any
subject invention in the United States unless such person agrees that
any products embodying the subject invention will be manufactured
substantially in the United States. However, in individual cases, the
requirement for such an agreement may be waived by the Federal agency
upon a showing by the Contractor or its assignee that reasonable but
unsuccessful efforts have been made to grant licenses on similar terms
to potential licensees that would be likely to manufacture substantially
in the United States or that under the circumstances domestic
manufacture is not commercially feasible.

\(j\) March-in rights. The Contractor agrees that with respect to any
subject invention in which it has acquired title, the Federal agency has
the right to require the Contractor, an assignee, or exclusive licensee
of a subject invention to grant a nonexclusive, partially exclusive, or
exclusive license in any field of use to a responsible applicant or
applicants, upon terms that are reasonable under the circumstances, and
if the Contractor, assignee, or exclusive licensee refuses such a
request, the Federal agency has the right to grant such a license itself
if the Federal agency determines that\--

\(1\) Such action is necessary because the Contractor or assignee has
not taken, or is not expected to take within a reasonable time,
effective steps to achieve practical application of the subject
invention in such field of use;

\(2\) Such action is necessary to alleviate health or safety needs which
are not reasonably satisfied by the Contractor, assignee, or their
licensees;

\(3\) Such action is necessary to meet requirements for public use
specified by Federal regulations and such requirements are not
reasonably satisfied by the Contractor, assignee, or licensees,

\(4\) Such action is necessary because the agreement required by
paragraph (i) of this clause has not been obtained or waived or because
a licensee of the exclusive right to use or sell any subject invention
in the United States is in breach of such agreement.

\(k\) Special provisions for contracts with nonprofit organizations.
(Reserved)

\(l\) Communications. (Reserved)

\(m\) Other inventions. Nothing contained in this clause may be deemed
to grant to the Government any rights with respect to any invention
other than a subject invention.

\(n\) Examination of records relating to inventions.

\(1\) The Contracting Officer or any authorized representative shall,
until 3 years after final payment under this contract, have the right to
examine any books (including laboratory notebooks), records, and
documents of the Contractor relating to the conception or first
reduction to practice of inventions in the same field of technology as
the work under this contract to determine whether\--

\(i\) Any such inventions are subject inventions;

\(ii\) The Contractor has established and maintains the procedures
required by subparagraphs (f)(2) and (f)(3) of this clause;

\(iii\) The Contractor and its inventors have complied with the
procedures.

\(2\) If the Contracting Officer determines that an inventor has not
disclosed a subject invention to the Contractor in accordance with the
procedures required by subparagraph (f)(5) of this clause, the
Contracting Officer may, within 60 days after the determination, request
title in accordance with subparagraphs (d)(2) and (d)(3) of this clause.
However, if the Contractor establishes that the failure to disclose did
not result from the Contractor\'s fault or negligence, the Contracting
Officer may not request title.

\(3\) If the Contracting Officer learns of an unreported Contractor
invention which the Contracting Officer believes may be a subject
invention, the Contractor may be required to disclose the invention to
the agency for a determination of ownership rights.

\(4\) Any examination of records under this paragraph may be subject to
appropriate conditions to protect the confidentiality of the information
involved.

\(o\) Withholding of payment (this paragraph does not apply to
subcontracts).

\(1\) Any time before final payment under this contract, the Contracting
Officer may, in the Government\'s interest, withhold payment until a
reserve not exceeding \$50,000 or 5 percent of the amount of the
contract, whichever is less, may have been set aside if, in the
Contracting Officer\'s opinion, the Contractor fails to\--

\(i\) Establish, maintain, and follow effective procedures for
identifying and disclosing subject inventions pursuant to subparagraph
(f)(5) above;

\(ii\) Disclose any subject invention pursuant to subparagraph (c)(1)
above;

\(iii\) Deliver acceptable interim reports pursuant to subdivision
(f)(7)(i) above; or

\(iv\) Provide the information regarding subcontracts pursuant to
subparagraph (f)(8) of this clause.

\(2\) Such reserve or balance may be withheld until the Contracting
Officer has determined that the Contractor has rectified whatever
deficiencies exist and has delivered all reports, disclosures, and other
information required by this clause.

\(3\) Final payment under this contract shall not be made before the
Contractor delivers to the Contracting Officer all disclosures of
subject inventions required by subparagraph (c)(1) above, an acceptable
final report pursuant to subdivision (f)(7)(ii) above, and all past due
confirmatory instruments.

\(4\) The Contracting Officer may decrease or increase the sums withheld
up to the maximum authorized above. No amount may be withheld under this
paragraph while the amount specified by this paragraph is being withheld
under other provisions of the contract. The withholding of any amount or
the subsequent payment thereof may not be construed as a waiver of any
Government right.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts if the contractor is other than a
small business firm or nonprofit organization and no alternative patent
rights clause is used.

**3.5-11/alt1** **Patent Rights\--Retention by the Contractor (Long
Form) Alternate I** (October 1996)

Add the following sentence to the end of paragraph (b).

The license shall include the right of the Government to sublicense
foreign governments, their nationals, and international organizations
pursuant to the following treaties or international
agreements:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\*

\[\*Contracting Officer complete with the names of applicable existing
treaties or international agreements. The above language is not intended
to apply to treaties or agreements that are in effect on the date of the
award but are not listed.\]

PRESCRIPTION:

Should be used when patent rights are for the benefit of a foreign
government under a foreign treaty or executive agreement, or if the
agency head or a designee determines at the time of contracting that it
would be in the national interest to acquire the right to sublicense
foreign governments or international organizations pursuant to an
existing or future treaty or agreement.

**3.5-11/alt2** **Patent Rights\--Retention by the Contractor (Long
Form) Alternate II** (October 1996)

Add the following sentence to the end of paragraph (b).

The agency reserves the right to unilaterally amend this contract to
identify specific treaties or international agreements entered into or
to be entered into by the Government after the effective date of this
contract and effectuate those license or other rights which are
necessary for the Government to meet its obligations to foreign
governments, their nationals, and international organizations under such
treaties or international agreements with respect to subject inventions
made after the date of the amendment.

PRESCRIPTION:

Should be used in long term contracts.

**3.5-12** **Patent Rights\--Acquisition by the Government** (October
1996)

\(a\) Definitions.

\(1\) \"Invention,\" as used in this clause, means any invention or
discovery which is or may be patentable or otherwise protectable under
title 35 of the United States Code or any novel variety of plant that is
or may be protectable under the Plant Variety Protection Act (7 U.S.C.
2321, et seq.).

\(2\) \"Subject invention,\" as used in this clause, means any invention
of the Contractor conceived or first actually reduced to practice in the
performance of work under this contract; provided, that in the case of a
variety of plant, the date of determination (as defined in section 41(d)
of the Plant Variety Protection Act, 7 U.S.C. 2401(d)) must also occur
during the period of contract performance.

\(3\) \"Practical application,\" as used in this clause, means to
manufacture, in the case of a composition or product; to practice, in
the case of a process or method; or to operate, in the case of a machine
or system; and, in each case, under such conditions as to establish that
the invention is being utilized and that its benefits are, to the extent
permitted by law or Government regulations, available to the public on
reasonable terms.

\(b\) Allocations of principal rights.

\(1\) Assignment to the Government. The Contractor agrees to assign to
the Government the entire right, title, and interest throughout the
world in and to each subject invention, except to the extent that rights
are retained by the Contractor under subparagraph (b)(2) and paragraph
(d) below.

\(2\) Greater rights determinations

\(i\) The Contractor, or an employee-inventor after consultation with
the Contractor, may retain greater rights than the nonexclusive license
provided in paragraph (d) below.. A request for a determination of
whether the Contractor or the employee-inventor is entitled to retain
such greater rights must be submitted to the Head of the Contracting
Agency or designee at the time of the first disclosure of the invention
pursuant to subparagraph (e)(2) below, or not later than 8 months
thereafter, unless a longer period is authorized in writing by the
Contracting Officer for good cause shown in writing by the Contractor.
Each determination of greater rights under this contract normally may be
subject to paragraph (c) below, and to the reservations and conditions
deemed to be appropriate by the Head of the Contracting Agency or
designee.

\(ii\) Upon request, the Contractor shall provide the filing date,
serial number and title, a copy of the patent application (including an
English-language version if filed in a language other than English), and
patent number and issue date for any subject invention in any country
for which the Contractor has retained title.

\(iii\) Upon request, the Contractor shall furnish the Government an
irrevocable power to inspect and make copies of the patent application
file.

\(c\) Minimum rights acquired by the Government.

\(1\) With respect to each subject invention to which the Contractor
retains principal or exclusive rights, the Contractor agrees as follows:

\(i\) The Contractor hereby grants to the Government a nonexclusive,
nontransferable, irrevocable, paid-up license to practice or have
practiced each subject invention throughout the world by or on behalf of
the Government of the United States (including any Government agency).

\(ii\) The Contractor agrees that with respect to any subject invention
in which it has acquired title, the Federal agency has the right to
require the Contractor, an assignee, or exclusive licensee of a subject
invention to grant a nonexclusive, partially exclusive, or exclusive
license in any field of use to a responsible applicant or applicants,
upon terms that are reasonable under the circumstances, and if the
Contractor, assignee, or exclusive licensee refuses such a request, the
Federal agency has the right to grant such a license itself if the
Federal agency determines that\--

\(A\) Such action is necessary because the Contractor or assignee has
not taken, or is not expected to take within a reasonable time,
effective steps to achieve practical application of the subject
invention in such field of use;

\(B\) Such action is necessary to alleviate health or safety needs which
are not reasonably satisfied by the Contractor, assignee, or their
licensees;

\(C\) Such action is necessary to meet requirements for public use
specified by Federal regulations and such requirements are not
reasonably satisfied by the Contractor, assignee, or licensees;

\(D\) Such action is necessary because the agreement required by
paragraph (i) of this clause has neither been obtained nor waived or
because a licensee of the exclusive right to use or sell any subject
invention in the United States is in breach

of such agreement.

\(iii\) The Contractor agrees to submit on request periodic reports no
more frequently than annually on the utilization of a subject invention
or on efforts at obtaining such utilization of a subject invention or on
efforts at obtaining such utilization that are being made by the
Contractor or its licensees or assignees. Such reports shall include
information regarding the status of development, date of first
commercial sale or use, gross royalties received by the Contractor, and
such other data and information as the agency may reasonably specify.
The Contractor also agrees to provide additional reports as may be
requested by the agency in connection with any march-in proceedings
undertaken by the agency in accordance with subdivision (ii) above. To
the extent data or information supplied under this section is considered
by the Contractor, its licensee, or assignee to be privileged and
confidential and is so marked, the agency agrees that, to the extent
permitted by law, it will not disclose such information to persons
outside the Government.

\(iv\) The Contractor agrees, when licensing a subject invention, to
arrange to avoid royalty charges on acquisitions involving Government
funds, including funds derived through a Military Assistance Program of
the Government or otherwise derived through the Government, to refund
any amounts received as royalty charges on a subject invention in
acquisitions for, or on behalf of, the Government, and to provide for
such refund in any instrument transferring rights in the invention to
any party.

\(v\) The Contractor agrees to provide for the Government\'s paid-up
license pursuant to subdivision (i) above in any instrument transferring
rights in a subject invention and to provide for the granting of
licenses as required by subdivision (ii) above, and for the reporting of
utilization information as required by subdivision (iii) above, whenever
the instrument transfers principal or exclusive rights in a subject
invention.

\(2\) Nothing contained in this paragraph (c) may be deemed to grant to
the Government any rights with respect to any invention other than a
subject invention.

\(d\) Minimum rights to the Contractor.

\(1\) The Contractor is hereby granted a revocable nonexclusive,
royalty-free license in each patent application filed in any country on
a subject invention and any resulting patent in which the Government
obtains title, unless the Contractor fails to disclose the subject
invention within the times specified in subparagraph (e)(2) below. The
Contractor\'s license extends to its domestic subsidiaries and
affiliates, if any, within the corporate structure of which the
Contractor is a part and includes the right to grant sublicenses of the
same scope to the extent the Contractor was legally obligated to do so
at the time the contract was awarded. The license is transferable only
with the approval of the funding Federal agency except when transferred
to the successor of that part of the Contractor\'s business to which the
invention pertains.

\(2\) The Contractor\'s domestic license may be revoked or modified by
the funding Federal agency to the extent necessary to achieve
expeditious practical application of the subject invention pursuant to
an application for an exclusive license submitted in accordance with
applicable provisions in 37 CFR part 404 and agency licensing
regulations. This license will not be revoked in that field of use or
the geographical areas in which the Contractor has achieved practical
application and continues to make the benefits of the invention
reasonably accessible to the public. The license in any foreign country
may be revoked or modified at the discretion of the funding Federal
agency to the extent the Contractor, its licensees, or its domestic
subsidiaries or affiliates have failed to achieve practical application
in that foreign country.

\(3\) Before revocation or modification of the license, the funding
Federal agency will furnish the Contractor a written notice of its
intention to revoke or modify the license, and the Contractor will be
allowed 30 days (or such other time as may be authorized by the funding
Federal agency for good cause shown by the Contractor) after the notice
to show cause why the license should not be revoked or modified. The
Contractor has the right to appeal, in accordance with applicable agency
licensing regulations and 37 CFR part 404 concerning the licensing of
Government-owned inventions, any decision concerning the revocation or
modification of its license.

\(4\) When the Government has the right to receive title, and does not
elect to secure a patent in a foreign country, the Contractor may elect
to retain such rights in any foreign country in which the Government
elects not to secure a patent, subject to the Government\'s rights in
subparagraph (c)(1) of this clause.

\(e\) Invention identification, disclosures, and reports.

\(1\) The Contractor shall establish and maintain active and effective
procedures to assure that subject inventions are promptly identified and
disclosed to Contractor personnel responsible for patent matters within
6 months of conception and/or first actual reduction to practice,
whichever occurs first in the performance of work under this contract.
These procedures shall include the maintenance of laboratory notebooks
or equivalent records and other records as are reasonably necessary to
document the conception and/or the first actual reduction to practice of
subject inventions, and records that show that the procedures for
identifying and disclosing the inventions are followed. Upon request,
the Contractor may furnish the Contracting Officer a description of such
procedures for evaluation and for determination as to their
effectiveness.

\(2\) The Contractor shall disclose each subject invention to the
Contracting Officer within 2 months after the inventor discloses it in
writing to Contractor personnel responsible for patent matters or, if
earlier, within 6 months after the Contractor becomes aware that a
subject invention has been made, but in any event before any on sale,
public use, or publication of such invention known to the Contractor.
The disclosure to the agency shall be in the form of a written report
and shall identify the contract under which the invention was made and
the inventor(s). It may be sufficiently complete in technical detail to
convey a clear understanding, to the extent known at the time of the
disclosure, of the nature, purpose, operation, and physical, chemical,
biological, or electrical characteristics of the invention. The
disclosure shall also identify any publication, on sale, or public use
of the invention and whether a manuscript describing the invention has
been submitted for publication and, if so, whether it has been accepted
for publication at the time of disclosure. In addition, after disclosure
to the agency, the Contractor shall promptly notify the agency of the
acceptance of any manuscript describing the invention for publication or
of any on sale or public use planned by the Contractor.

\(3\) The Contractor shall furnish the Contracting Officer the
following:

\(i\) Interim reports every 12 months (or such longer period as may be
specified by the Contracting Officer) from the date of the contract,
listing subject inventions during that period, and certifying that all
subject inventions have been disclosed (or that there are not such
inventions) and that the procedures required by subparagraph (e)(1)
above have been followed.

\(ii\) A final report, within 3 months after completion of the
contracted work, listing all subject inventions or certifying that there
were no such inventions, and listing all subcontracts at any tier
containing a patent rights clause or certifying that there were no such
subcontracts.

\(4\) The Contractor agrees to require, by written agreement, its
employees, other than clerical and nontechnical employees, to disclose
promptly in writing to personnel identified as responsible for the
administration of patent matters and in a format suggested by the
Contractor each subject invention made under contract in order that the
Contractor can comply with the disclosure provisions of paragraph (c)
above, and to execute all papers necessary to file patent applications
on subject inventions and to establish the Government\'s rights in the
subject inventions. This disclosure format should require, as a minimum,
the information required by subparagraph (2) above.

\(5\) The Contractor agrees that the Government may duplicate and
disclose subject invention disclosures and all other reports and papers
furnished or required to be furnished pursuant to this clause.

\(f\) Examination of records relating to inventions.

\(1\) The Contracting Officer or any authorized representative shall,
until 3 years after final payment under this contract, have the right to
examine any books (including laboratory notebooks), records, and
documents of the Contractor relating to the conception or first actual
reduction to practice of inventions in the same field of technology as
the work under this contract to determine whether-

\(i\) Any such inventions are subject inventions;

\(ii\) The Contractor has established and maintains the procedures
required by subparagraphs (e)(1) and (4) of this clause; and

\(iii\) The Contractor and its inventors have complied with the
procedures.

\(2\) If the Contracting Officer learns of an unreported Contractor
invention which the Contracting Officer believes may be a subject
invention, the Contractor may be required to disclose the invention to
the agency for a determination of ownership rights.

\(3\) Any examination of records under this paragraph will be subject to
appropriate conditions to protect the confidentiality of the information
involved.

\(g\) Withholding of payment (this paragraph does not apply to
subcontracts).

\(1\) Any time before final payment under this contract, the Contracting
Officer may, in the Government\'s interest, withhold payment until a
reserve not exceeding \$50,000 or 5 percent of the amount of this
contract, whichever is less, may have been set aside if, in the
Contracting Officer\'s opinion, the Contractor fails to\--

\(i\) Establish, maintain, and follow effective procedures for
identifying and disclosing subject inventions pursuant to subparagraph
(e)(1) above;

\(ii\) Disclose any subject invention pursuant to subparagraph (e)(2)
above;

\(iii\) Deliver acceptable interim reports pursuant to subdivision
(e)(3)(i) above; or

\(iv\) Provide the information regarding subcontracts pursuant to
subparagraph (h)(4) below.

\(2\) Such reserve or balance may be withheld until the Contracting
Officer has determined that the Contractor has rectified whatever
deficiencies exist and has delivered all reports, disclosures, and other
information required by this clause.

\(3\) Final payment under this contract shall not be made before the
Contractor delivers to the Contracting Officer all disclosures of
subject inventions required by subparagraph (e)(2) above, and acceptable
final report pursuant to subdivision (e)(3)(ii) above, and all past due
confirmatory instruments.

\(4\) The Contracting Officer may decrease or increase the sums withheld
up to the maximum authorized above. No amount shall be withheld under
this paragraph while the amount specified by this paragraph is being
withheld under other provisions of the contract. The withholding of any
amount or the subsequent payment thereof may not be construed as a
waiver of any Government rights.

\(h\) Subcontracts.

\(1\) The Contractor shall include this clause (suitably modified to
identify the parties) in all subcontracts, regardless of tier, for
experimental, developmental, or research work. The subcontractor shall
retain all rights provided for the Contractor in this clause, and the
Contractor shall not, as part of the consideration for awarding the
subcontract, obtain rights in the subcontractor\'s subject inventions.

\(2\) In the event of a refusal by a prospective subcontractor to accept
such a clause the Contractor-

\(i\) Shall promptly submit a written notice to the Contracting Officer
setting forth the subcontractor\'s reasons for such refusal and other
pertinent information that may expedite disposition of the matter; and

\(ii\) Shall not proceed with such subcontract without the written
authorization of the Contracting Officer.

\(3\) In the case of subcontracts at any tier, the agency,
subcontractor, and Contractor agree that the mutual obligations of the
parties created by this clause constitute a contract between the
subcontractor and the Federal agency with respect to those matters
covered by this clause.

\(4\) The Contractor shall promptly notify the Contracting Officer in
writing upon the award of any subcontract at any tier containing a
patent rights clause by identifying the subcontractor, the applicable
patent rights clause, the work to be performed under the subcontract,
and the dates of award and estimated completion. Upon request of the
Contracting Officer, the Contractor shall furnish a copy of such
subcontract, and, no more frequently than annually, a listing of the
subcontracts that have been awarded.

\(i\) Preference for United States industry. Unless provided otherwise,
no Contractor that receives title to any subject invention and no
assignee of any such Contractor shall grant to any person the exclusive
right to use or sell any subject invention in the United States unless
such person agrees that any products embodying the subject invention
will be manufactured substantially in the United States. However, in
individual cases, the requirement may be waived by the Government upon a
showing by the Contractor or assignee that reasonable but unsuccessful
efforts have been made to grant licenses on similar terms to potential
licensees that would be likely to manufacture substantially in the
United States or that under the circumstances domestic manufacture is
not commercially feasible.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts if the work is to be performed
outside the US, its possessions, and Puerto Rico by contractors that are
not small business firms, nonprofit organizations, or domestic firms.
The Contracting Officer may presume that a contractor is not a domestic
firm unless it is known that the firm is not foreign owned, controlled
or influenced.

**3.5-12/alt1** **Patent Rights\--Acquisition by the Government
Alternate I** (October 1996)

Add to the end of paragraph (c)(1)(i).

The license shall include the right of the Government to sublicense
foreign governments, their nationals, and international organizations
pursuant to the following treaties or international agreements:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \*

\[\*Contracting Officer complete with the names of applicable existing
treaties or international agreements. The above language is not intended
to apply to treaties or agreements that are in effect on the date of the
award but are not listed.\]

PRESCRIPTION:

Should be used when patent rights are for the benefit of a foreign
government under a foreign treaty or executive agreement, or if the
agency head or a designee determines at the time of contracting that it
would be in the national interest to acquire the right to sublicense
foreign governments or international organizations pursuant to an
existing or future treaty or agreement. Alternate I may be appropriately
modified to effectuate the treaty or agreement.

**3.5-12/alt2** **Patent Rights\--Acquisition by the Government
Alternate II** (October 1996)

Add to the end of paragraph (c)(1)(i).

The agency reserves the right to unilaterally amend this contract to
identify specific treaties or international agreements entered into or
to be entered into by the Government after the effective date of this
contract, and effectuate those license or other rights which are
necessary for the Government to meet its obligations to foreign
governments, their nationals, and international organizations under such
treaties or international agreements with respect to subject inventions
made after the date of the amendment.

PRESCRIPTION:

Should be used if necessary to effectuate treaties or agreements to be
entered into.

**3.5-13** **Rights in Data\--General** (October 1996)

\(a\) Definitions.

\(1\) \"Computer software,\" as used in this clause, means computer
programs, computer data bases, and documentation thereof.

\(2\) \"Data,\" as used in this clause, means recorded information,
regardless of form or the media on which it may be recorded. The term
includes technical data and computer software. The term does not include
information incidental to contract administration, such as financial,
administrative, cost or pricing, or management information.

\(3\) \"Form, fit, and function data,\" as used in this clause, means
data relating to items, components, or processes that are sufficient to
enable physical and functional interchangeability, as well as data
identifying source, size, configuration, mating, and attachment
characteristics, functional characteristics, and performance
requirements; except that for computer software it means data
identifying source, functional characteristics, and performance
requirements but specifically excludes the source code, algorithm,
process, formulae, and flow charts of the software.

\(4\) \"Limited rights,\" as used in this clause, means the rights of
the Government in limited rights data as set forth in the Limited Rights
Notice of subparagraph (g)(2) if included in this clause.

\(5\) \"Limited rights data,\" as used in this clause, means data (other
than computer software) that embody trade secrets or are commercial or
financial and confidential or privileged, to the extent that such data
pertain to items, components, or processes developed at private expense,
including minor modifications thereof.

\(6\) \"Restricted computer software,\" as used in this clause, means
computer software developed at private expense and that is a trade
secret; is commercial or financial and is confidential or privileged; or
is published copyrighted computer software; including minor
modifications of such computer software.

\(7\) \"Restricted rights,\" as used in this clause, means the rights of
the Government in restricted computer software, as set forth in a
Restricted Rights Notice of subparagraph (g)(3) if included in this
clause, or as otherwise may be provided in a collateral agreement
incorporated in and made part of this contract, including minor
modifications of such computer software.

\(8\) \"Technical data,\" as used in this clause, means data (other than
computer software) which are of a scientific or technical nature.

\(9\) \"Unlimited rights,\" as used in this clause, means the right of
the Government to use, disclose, reproduce, prepare derivative works,
distribute copies to the public, and perform publicly and display
publicly, in any manner and for any purpose, and to have or permit
others to do so.

\(b\) Allocations of rights.

\(1\) Except as provided in paragraph (c) of this clause regarding
copyright, the Government shall have unlimited rights in-

\(i\) Data first produced in the performance of this contract;

\(ii\) Form, fit, and function data delivered under this contract;

\(iii\) Data delivered under this contract (except for restricted
computer software) that constitute manuals or instructional and training
material for installation, operation, or routine maintenance and repair
of items, components, or processes delivered or furnished for use under
this contract; and

\(iv\) All other data delivered under this contract unless provided
otherwise for limited rights data or restricted computer software in
accordance with paragraph (g) of this clause.

\(2\) The Contractor shall have the right to\--

\(i\) Use, release to others, reproduce, distribute, or publish any data
first produced or specifically used by the Contractor in the performance
of this contract, unless provided otherwise in paragraph (d) of this
clause;

\(ii\) Protect from unauthorized disclosure and use those data which are
limited rights data or restricted computer software to the extent
provided in paragraph (g) of this clause;

\(iii\) Substantiate use of, add or correct limited rights, restricted
rights, or copyright notices and to take other appropriate action, in
accordance with paragraphs (e) and (f) of this clause; and

\(iv\) Establish claim to copyright subsisting in data first produced in
the performance of this contract to the extent provided in subparagraph
(c)(1) of this clause.

\(c\) Copyright.

\(1\) Data first produced in the performance of this contract. Unless
provided otherwise in paragraph (d) of this clause, the Contractor may
establish, without prior approval of the Contracting Officer, claim to
copyright subsisting in scientific and technical articles based on or
containing data first produced in the performance of this contract and
published in academic, technical or professional journals, symposia
proceedings or similar works. The prior, express written permission of
the Contracting Officer is required to establish claim to copyright
subsisting in all other data first produced in the performance of this
contract. When claim to copyright is made, the Contractor shall affix
the applicable copyright notices of 17 U.S.C. 401 or 402 and
acknowledgment of Government sponsorship (including contract number) to
the data when such data are delivered to the Government, as well as when
the data are published or deposited for registration as a published work
in the U.S. Copyright Office. For data other than computer software the
Contractor grants to the Government, and others acting on its behalf, a
paid-up, nonexclusive, irrevocable worldwide license in such copyrighted
data to reproduce, prepare derivative works, distribute copies to the
public, and perform publicly and display publicly, by or on behalf of
the Government. For computer software, the Contractor grants to the
Government and others acting in its behalf, a paid-up nonexclusive,
irrevocable worldwide license in such copyrighted computer software to
reproduce, prepare derivative works, and perform publicly and display
publicly by or on behalf of the Government.

\(2\) Data not first produced in the performance of this contract. The
Contractor shall not, without prior written permission of the
Contracting Officer, incorporate in data delivered under this contract
any data not first produced in the performance of this contract and
which contains the copyright notice of 17 U.S.C. 401 or 402, unless the
Contractor identifies such data and grants to the Government, or
acquires on its behalf, a license of the same scope as set forth in
subparagraph (c)(1) of this clause; provided, however, that if such data
are computer software the Government may acquire a copyright license as
set forth in subparagraph (g)(3) of this clause if included in this
contract or as otherwise may be provided in a collateral agreement
incorporated in or made part of this contract.

\(3\) Removal of copyright notices. The Government agrees not to remove
any copyright notices placed on data pursuant to this paragraph (c), and
to include such notices on all reproductions of the data.

\(d\) Release, publication and use of data.

\(1\) The Contractor shall have the right to use, release to others,
reproduce, distribute, or publish any data first produced or
specifically used by the Contractor in the performance of this contract,
except to the extent such data may be subject to the Federal export
control or national security laws or regulations, or unless otherwise
provided in this paragraph of this clause or expressly set forth in this
contract.

\(2\) The Contractor agrees that to the extent it receives or is given
access to data necessary for the performance of this contract which
contain restrictive markings, the Contractor shall treat the data in
accordance with such markings unless otherwise specifically authorized
in writing by the Contracting Officer.

\(e\) Unauthorized marking of data.

\(1\) Notwithstanding any other provisions of this contract concerning
inspection or acceptance, if any data delivered under this contract are
marked with the notices specified in subparagraph (g)(2) or (g)(3) of
this clause and use of such is not authorized by this clause, or if such
data bears any other restrictive or limiting markings not authorized by
this contract, the Contracting Officer may at any time either return the
data to the Contractor, or cancel or ignore the markings. However, the
following procedures shall apply prior to canceling or ignoring the
markings.

\(i\) The Contracting Officer shall make written inquiry to the
Contractor affording the Contractor 30 days from receipt of the inquiry
to provide written justification to substantiate the propriety of the
markings;

\(ii\) If the Contractor fails to respond or fails to provide written
justification to substantiate the propriety of the markings within the
30-day period (or a longer time not exceeding 90 days approved in
writing by the Contracting Officer for good cause shown), the Government
shall have the right to cancel or ignore the markings at any time after
said period and the data will no longer be made subject to any
disclosure prohibitions.

\(iii\) If the Contractor provides written justification to substantiate
the propriety of the markings within the period set in subdivision
(e)(1)(i) of this clause, the Contracting Officer shall consider such
written justification and determine whether or not the markings are to
be canceled or ignored. If the Contracting Officer determines that the
markings are authorized, the Contractor shall be so notified in writing.
If the Contracting Officer determines, with concurrence of the head of
the contracting activity, that the markings are not authorized, the
Contracting Officer shall furnish the Contractor a written
determination, which determination may become the final agency decision
regarding the appropriateness of the markings unless the Contractor
files suit in a court of competent jurisdiction within 90 days of
receipt of the Contracting Officer\'s decision. The Government shall
continue to abide by the markings under this subdivision (e)(1)(iii)
until final resolution of the matter either by the Contracting
Officer\'s determination becoming final (in which instance the
Government may thereafter have the right to cancel or ignore the
markings at any time and the data will no longer be made subject to any
disclosure prohibitions), or by final disposition of the matter by court
decision if suit is filed.

\(2\) The time limits in the procedures set forth in subparagraph (e)(1)
of this clause may be modified in accordance with agency regulations
implementing the Freedom of Information Act (5 U.S.C. 552) if necessary
to respond to a request thereunder.

(3)Reserved.

\(4\) Except to the extent the Government\'s action occurs as the result
of final disposition of the matter by a court of competent jurisdiction,
the Contractor is not precluded by this paragraph (e) from filing a
claim under the \"Contract Disputes\" clause of this contract, as
applicable, that may arise as the result of the Government removing or
ignoring authorized markings on data delivered under this contract.

\(f\) Omitted or incorrect markings.

\(1\) Data delivered to the Government without either the limited rights
or restricted rights notice as authorized by paragraph (g) of this
clause, or the copyright notice required by paragraph (c) of this
clause, may be deemed to have been furnished with unlimited rights, and
the Government assumes no liability for the disclosure, use, or
reproduction of such data. However, to the extent the data has not been
disclosed without restriction outside the Government, the Contractor may
request, within 6 months (or a longer time approved by the Contracting
Officer for good cause shown) after delivery of such data, permission to
have notices placed on qualifying data at the Contractor\'s expense, and
the Contracting Officer may agree to do so if the Contractor-

\(i\) Identifies the data to which the omitted notice is to be applied;

\(ii\) Demonstrates that the omission of the notice was inadvertent;

\(iii\) Establishes that the use of the proposed notice is authorized;

\(iv\) Acknowledges that the Government has no liability with respect to
the disclosure, use, or reproduction of any such data made prior to the
addition of the notice or resulting from the omission of the notice.

\(2\) The Contracting Officer may also (i) permit correction at the
Contractor\'s expense of incorrect notices if the Contractor identifies
the data on which correction of the notice is to be made, and
demonstrates that the correct notice is authorized, or (ii) correct any
incorrect notices.

\(g\) Protection of limited rights data and restricted computer
software. (1) When data other than that listed in subdivisions (b)(1)
(i), (ii), and (iii) of this clause are specified to be delivered under
this contract and qualify as either limited rights data or restricted
computer software, if the Contractor desires to continue protection of
such data, the Contractor may withhold such data and not furnish them to
the Government under this contract. As a condition to this withholding,
the Contractor may identify the data being withheld and furnish form,
fit, and function data in lieu thereof. Limited rights data that are
formatted as a computer data base for delivery to the Government are to
be treated as limited rights data and not restricted computer software.

\(2\) Reserved.

\(3\) Reserved

\(h\) Subcontracting. The Contractor has the responsibility to obtain
from its subcontractors all data and rights therein necessary to fulfill
the Contractor\'s obligations to the Government under this contract. If
a subcontractor refuses to accept terms affording the Government such
rights, the Contractor shall promptly bring such refusal to the
attention of the Contracting Officer and not proceed with subcontract
award without further authorization.

\(i\) Relationship to patents. 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.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts if it is contemplated that data
(defined as recorded information, regardless or form or media) will be
produced, furnished, or acquired under the contract.

**3.5-13/alt1** **Rights in Data\--General Alternate I** (October 1996)

Substitute the following definition in paragraph (a).

Limited rights data, as used in this clause, means data (other than
computer software) developed at private expense that embody trade
secrets or are commercial or financial and confidential or privileged.

PRESCRIPTION:

Should be used when the contract does not require delivery of items,
components, or processes intended to be acquired by or for the use of
the Government. Data need not pertain to an item, component, or process,
and were developed at private expense and embody a trade secret or are
commercial or financial and confidential or privileged.

**3.5-13/alt2** **Rights in Data\--General Alternate II** (October 1996)

Insert the following in paragraph (g).

(g)(2) Notwithstanding subparagraph (g)(1) of this clause, the contract
may identify and specify the delivery of limited rights data, or the
Contracting Officer may require by written request the delivery of
limited rights data that has been withheld or would otherwise be
withholdable. If delivery of such data is so required, the Contractor
may affix the following Limited Rights Notice to the data and the
Government will thereafter treat the data, subject to the provisions of
paragraphs (e) and (f) of this clause, in accordance with such Notice:

LIMITED RIGHTS NOTICE

\(a\) These data are submitted with limited rights under Government
Contract No. \_\_\_\_\_\_\_\_\_\_\_ (and
subcontract\_\_\_\_\_\_\_\_\_\_\_\_, if appropriate). These data may be
reproduced and used by the Government with the express limitation that
they will not, without written permission of the Contractor, be used for
purposes of manufacture nor disclosed outside the Government; except
that the Government may disclose these data outside the Government for
the following purposes, if any, provided that the Government makes such
disclosure subject to prohibition against further use and disclosure:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[Agencies may list
additional purposes or if none, so state\]

\(b\) This Notice may be marked on any reproduction of these data, in
whole or in part.

(End of notice)

PRESCRIPTION:

Should be used when the Contracting Officer determines it is necessary
to require delivery of limited rights data rather than allowing the
contractor to withhold such data.

**3.5-13/alt3** **Rights in Data\--General Alternate III** (October
1996)

Insert the following in paragraph (g).

(g)(3)(i) Notwithstanding subparagraph (g)(1) of this clause, the
contract may identify and specify the delivery of restricted computer
software, or the Contracting Officer may require by written request the
delivery of restricted computer software that has been withheld or would
otherwise be withholdable. If delivery of such computer software is so
required, the Contractor may affix the following Restricted Rights
Notice to the computer software and the Government will thereafter treat
the computer software, subject to paragraphs (e) and (f) of this clause,
in accordance with the Notice:

RESTRICTED RIGHTS NOTICE

\(a\) This computer software is submitted with restricted rights under
Government Contract No. \_\_\_\_\_\_\_\_\_\_\_ (and subcontract
\_\_\_\_\_\_\_\_\_\_\_, if appropriate). It may not be used, reproduced,
or disclosed by the Government except as provided in paragraph (b) of
this Notice or as otherwise expressly stated in the contract.

\(b\) This computer software may be-

\(1\) Used or copied for use in or with the computer or computers for
which it was acquired, including use at any Government installation to
which such computer or computers may be transferred;

\(2\) Used or copied for use in a backup computer if any computer for
which it was acquired is inoperative;

\(3\) Reproduced for safekeeping (archives) or backup purposes;

\(4\) Modified, adapted, or combined with other computer software,
provided that the modified, combined, or adapted portions of the
derivative software incorporating restricted computer software are made
subject to the same restricted rights;

\(5\) Disclosed to and reproduced for use by support service Contractors
in accordance with subparagraphs (b) (1) through (4) of this clause,
provided the Government makes such disclosure or reproduction subject to
these restricted rights; and

\(6\) Used or copied for use in or transferred to a replacement
computer.

\(7\) Other uses
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(c\) Notwithstanding the foregoing, if this computer software is
published copyrighted computer software, it is licensed to the
Government, without disclosure prohibitions, with the minimum rights set
forth in paragraph (b) of this clause.

\(d\) Any other rights or limitations regarding the use, duplication, or
disclosure of this computer software are to be expressly stated in, or
incorporated in, the contract.

\(e\) This Notice shall be marked on any reproduction of this computer
software, in whole or in part.

(End of notice)

\(ii\) Where it is impractical to include the Restricted Rights Notice
on restricted computer software, the following short- form Notice may be
used in lieu thereof:

RESTRICTED RIGHTS NOTICE (SHORT FORM)

Use, reproduction, or disclosure is subject to restrictions set forth in
Contract No. \_\_\_\_\_\_\_\_\_\_\_ (and subcontract
\_\_\_\_\_\_\_\_\_\_\_, if appropriate) with \_\_\_\_\_\_\_\_\_\_\_
(name of Contractor and subcontractor).

(End of notice)

\(iii\) If restricted computer software is delivered with the copyright
notice of 17 U.S.C. 401, it will be presumed to be published copyrighted
computer software licensed to the Government without disclosure
prohibitions, with the minimum rights set forth in paragraph (b) of this
clause, unless the Contractor includes the following statement with such
copyright notice: Unpublished-rights reserved under the Copyright Laws
of the United States.

PRESCRIPTION:

Should be used when the Contracting Officer determines it is necessary
to require delivery of restricted computer software rather than allowing
the contractor to withhold such data.

**3.5-13/alt4** **Rights in Data\--General Alternate IV** (October 1996)

Substitute for paragraph (c)(1).

\(c\) Copyright.

\(1\) Data First Produced in the Performance of the Contract. Except as
otherwise specifically provided in this contract, the Contractor may
establish claim to copyright subsisting in any data first produced in
the performance of this contract. When claim to copyright is made, the
Contractor shall affix the applicable copyright notice of 17 U.S.C. 401
or 402 and acknowledgment of Government sponsorship (including contract
number) to the data when such data are delivered to the Government, as
well as when the data are published or deposited for registration as a
published work in the U.S. Copyright Office. For data other than
computer software, the Contractor grants to the Government, and others
acting on its behalf, a paid-up, nonexclusive, irrevocable, worldwide
license for all such data to reproduce, prepare derivative works,
distribute copies to the public, and perform publicly and display
publicly, by or on behalf of the Government. For computer software, the
Contractor grants to the Government and others acting on its behalf, a
paid up, nonexclusive, irrevocable worldwide license for all such
computer software to reproduce, prepare derivative works, and perform
publicly and display publicly, by or on behalf of the Government.

PRESCRIPTION:

Should be used in basic contracts for applied research (other than those
for the management or operation of Government facilities, or where
international agreements require otherwise), to be performed solely by
universities and colleges. May also be used if blanket permission is
granted for the contractor to establish claim to copyright subsisting in
all data first produced without further request being made by the
contractor.

**3.5-13/alt5** **Rights in Data\--General Alternate V** (October 1996)

Add the following paragraph (j).

\(j\) The Contractor agrees, except as may be otherwise specified in
this contract for specific data items listed as not subject to this
paragraph, that the Contracting Officer or an authorized representative
may, up to three years after acceptance of all items to be delivered
under this contract, inspect at the Contractor\'s facility any data
withheld pursuant to paragraph (g)(1) of this clause, for purposes of
verifying the Contractor\'s assertion pertaining to the limited rights
or restricted rights status of the data or for evaluating work
performance. Where the Contractor whose data are to be inspected
demonstrates to the Contracting Officer that there would be a possible
conflict of interest if the inspection were made by a particular
representative, the Contracting Officer may designate an alternate
inspector.

PRESCRIPTION:

Should be used when the Contracting Officer needs to have the right to
inspect certain data at a contractors facility.

**3.5-14** **Representation of Limited Rights Data and Restricted
Computer Software** (October 1996)

\(a\) This Screening Information Request (SIR) sets forth the work to be
performed if a contract award results, and the Government\'s known
delivery requirements for data, as defined in the clause \"Rights in
Data-General.\" Any resulting contract may also provide the Government
the option to order additional data under the \"Additional Data
Requirements\" clause, if included in the contract. Any data delivered
under the resulting contract will be subject to the \"Rights in
Data-General\" clause that is to be included in this contract. Under the
latter clause, a Contractor may withhold from delivery data that qualify
as limited rights data or restricted computer software, and deliver
form, fit, and function data in lieu thereof. The latter clause also may
be used with its Alternates II and/or III to obtain delivery of limited
rights data or restricted computer software, marked with limited rights
or restricted rights notices, as appropriate. In addition, use of
Alternate V with this latter clause provides the Government the right to
inspect such data at the Contractor\'s facility.

\(b\) As an aid in determining the Government\'s need to include any of
the aforementioned Alternates in the clause \"Rights in Data-General,\"
the offeror\'s response to this Screening Information Request (SIR) may,
to the extent feasible, complete the representation in paragraph (b) of
this provision to either state that none of the data qualify as limited
rights data or restricted computer software, or identify which of the
data qualifies as limited rights data or restricted computer software.
Any identification of limited rights data or restricted computer
software in the offeror\'s response is not determinative of the status
of such data should a contract be awarded to the offeror.

REPRESENTATION CONCERNING DATA RIGHTS

Offeror has reviewed the requirements for the delivery of data or
software and states (offeror check appropriate block)\--

\[ \] None of the data proposed for fulfilling such requirements
qualifies as limited rights data or restricted computer software.

\[ \] Data proposed for fulfilling such requirements qualify as limited
rights data or restricted computer software and are identified as
follows:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Note: \"Limited rights data\" and \"Restricted computer software\" are
defined in the contract clause titled \"Rights In Data-General.\"

(End of provision)

PRESCRIPTION:

Should be used in any SIR that contains the clause 3.5-13, Rights in
Data - General.

**3.5-15** **Additional Data Requirements** (April 1996)

\(a\) In addition to the data (as defined in the \"Rights in
Data-General\" clause, or other equivalent included in this contract)
specified elsewhere in this contract to be delivered, the Contracting
Officer may, at any time during contract performance or within a period
of 3 years after acceptance of all items to be delivered under this
contract, order any data first produced or specifically used in the
performance of this contract.

\(b\) The \"Rights in Data-General\" clause or other equivalent included
in this contract is applicable to all data ordered under this
\"Additional Data Requirements\" clause. Nothing contained in this
clause shall require the Contractor to deliver any data the withholding
of which is authorized by the \"Rights in Data-General\" or other
equivalent clause of this contract, or data which are specifically
identified in this contract as not subject to this clause.

\(c\) When data are to be delivered under this clause, the Contractor
will be compensated for converting the data into the prescribed form,
for reproduction, and for delivery.

\(d\) The Contracting Officer may release the Contractor from the
requirements of this clause for specifically identified data items at
any time during the 3-year period set forth in paragraph (a) of this
clause.

PRESCRIPTION:

Should be used in SIR\'s and contracts involving experimental,
developmental, research, or demonstration work. Does not apply to basic
or applied research to be performed solely by a university or college
unless all the requirements for data are believed to be known at the
time of contracting and specified in the contract.

**3.5-16** **Rights in Data\--Special Works** (April 1996)

\(a\) Definitions.

\(1\) Data, as used in this clause, means recorded information
regardless of form or the medium on which it may be recorded. The term
includes technical data and computer software. The term does not include
information incidental to contract administration, such as financial,
administrative, cost or pricing or management information.

\(2\) Unlimited rights, as used in this clause, means the right of the
Government to use, disclose, reproduce, prepare derivative works,
distribute copies to the public, and perform publicly and display
publicly, in any manner and for any purpose whatsoever, and to have or
permit others to do so.

\(b\) Allocation of Rights.

\(1\) The Government shall have\--

\(i\) Unlimited rights in all data delivered under this contract, and in
all data first produced in the performance of this contract, except as
provided in paragraph (c) of this clause for copyright.

\(ii\) The right to limit exercise of claim to copyright in data first
produced in the performance of this contract, and to obtain assignment
of copyright in such data, in accordance with subparagraph (c)(1) of
this clause.

\(iii\) The right to limit the release and use of certain data in
accordance with paragraph (d) of this clause.

\(2\) The Contractor shall have, to the extent permission is granted in
accordance with subparagraph (c)(1) of this clause, the right to
establish claim to copyright subsisting in data first produced in the
performance of this contract.

\(c\) Copyright.

\(1\) Data first produced in the performance of this contract.

\(i\) The Contractor agrees not to assert, establish, or authorize
others to assert or establish, any claim to copyright subsisting in any
data first produced in the performance of this contract without prior
written permission of the Contracting Officer. When claim to copyright
is made, the Contractor may affix the appropriate copyright notice of 17
U.S.C. 401 or 402 and acknowledgment of Government sponsorship
(including contract number) to such data when delivered to the
Government, as well as when the data are published or deposited for
registration as a published work in the U.S. Copyright Office. The
Contractor grants to the Government, and others acting on its behalf, a
paid-up nonexclusive, irrevocable, worldwide license for all such data
to reproduce, prepare derivative works, distribute copies to the public,
and perform publicly and display publicly, by or on behalf of the
Government.

\(ii\) If the Government desires to obtain copyright in data first
produced in the performance of this contract and permission has not been
granted as set forth in subdivision (c)(1)(i) of this clause, the
Contracting Officer may direct the Contractor to establish, or authorize
the establishment of, claim to copyright in such data and to assign, or
obtain the assignment of, such copyright to the Government or its
designated assignee.

\(2\) Data not first produced in the performance of this contract. The
Contractor may not, without prior written permission of the Contracting
Officer, incorporate in data delivered under this contract any data not
first produced in the performance of this contract and which contain the
copyright notice of 17 U.S.C. 401 or 402, unless the Contractor
identifies such data and grants to the Government, or acquires on its
behalf, a license of the same scope as set forth in subparagraph (c)(1)
of this clause.

\(d\) Release and use restrictions. Except as otherwise specifically
provided for in this contract, the Contractor may not use for purposes
other than the performance of this contract, nor may the Contractor
release, reproduce, distribute, or publish any data first produced in
the performance of this contract, nor authorize others to do so, without
written permission of the Contracting Officer.

\(e\) Indemnity. The Contractor may indemnify the Government and its
officers, agents, and employees acting for the Government against any
liability, including costs and expenses, incurred as the result of the
violation of trade secrets, copyrights, or right of privacy or
publicity, arising out of the creation, delivery, publication, or use of
any data furnished under this contract; or any libelous or other
unlawful matter contained in such data. The provisions of this paragraph
do not apply unless the Government provides notice to the Contractor as
soon as practicable of any claim or suit, affords the Contractor an
opportunity under applicable laws, rules, or regulations to participate
in the defense thereof, and obtains the Contractor\'s consent to the
settlement of any suit or claim other than as required by final decree
of a court of competent jurisdiction; nor do these provisions apply to
material furnished to the Contractor by the Government and incorporated
in data to which this clause applies.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts primarily for the production or
compilation of data (other than limited rights data or restricted
computer software) for the Government\'s internal use, or when there is
a specific need to limit distribution and use of the data and/or to
obtain indemnity for liabilities that may arise out of the content,
performance, or disclosure of the data.

**3.5-17** **Rights in Data\--Existing Works** (April 1996)

\(a\) Except as otherwise provided in this contract, the Contractor
grants to the Government, and others acting on its behalf, a paid-up
nonexclusive, irrevocable, worldwide license to reproduce, prepare
derivative works, and perform publicly and display publicly, by or on
behalf of the Government, for all the material or subject matter called
for under this contract, or for which this clause is specifically made
applicable.

\(b\) The Contractor shall indemnify the Government and its officers,
agents, and employees acting for the Government against any liability,
including costs and expenses, incurred as the result of

\(1\) the violation of trade secrets, copyrights, or right of privacy or
publicity, arising out of the creation, delivery, publication or use of
any data furnished under this contract; or

\(2\) any libelous or other unlawful matter contained in such data.

The provisions of this paragraph do not apply unless the Government
provides notice to the Contractor as soon as practicable of any claim or
suit, affords the Contractor an opportunity under applicable laws,
rules, or regulations to participate in the defense thereof, and obtains
the Contractor\'s consent to the settlement of any suit or claim other
than as required by final decree of a court of competent jurisdiction;
and do not apply to material furnished to the Contractor by the
Government and incorporated in data to which this clause applies.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts exclusively for the acquisition,
without modification, of existing audiovisual and similar works.

**3.5-18** **Commercial Computer Software\--Restricted Rights** (October
1996)

\(a\) As used in this clause, \"restricted computer software\" means any
computer program, computer data base, or documentation thereof, that has
been developed at private expense and either is a trade secret, is
commercial or financial and confidential or-privileged, or is published
and copyrighted.

\(b\) Notwithstanding any provisions to the contrary contained in any
Contractor\'s standard commercial license or lease agreement pertaining
to any restricted computer software delivered under this purchase
order/contract, and irrespective of whether any such agreement has been
proposed prior to or after issuance of this purchase order/contract or
of the fact that such agreement may be affixed to or accompany the
restricted computer software upon delivery, vendor agrees that the
Government may have the rights that are set forth in paragraph (c) of
this clause to use, duplicate or disclose any restricted computer
software delivered under this purchase order/contract. The terms and
provisions of this contract, including any commercial lease or license
agreement, shall be subject to paragraph (c) of this clause and shall
comply with applicable Federal laws.

\(c\)

\(1\) The restricted computer software delivered under this contract
shall not be used, reproduced or disclosed by the Government except as
provided in subparagraph (c)(2) of this clause or as expressly stated
otherwise in this contract.

\(2\) The restricted computer software may be-

\(i\) Used or copied for use in or with the computer or computers for
which it was acquired, including use at any Government installation to
which such computer or computers may be transferred;

\(ii\) Used or copied for use in or with backup computer if any computer
for which it was acquired is inoperative;

\(iii\) Reproduced for safekeeping (archives) or backup purposes;

\(iv\) Modified, adapted, or combined with other computer software,
provided that the modified, combined, or adapted portions of the
derivative software incorporating any of the delivered, restricted
computer software shall be subject to same restrictions set forth in
this purchase order/contract;

\(v\) Disclosed to and reproduced for use by support service Contractors
or their subcontractors, subject to the same restrictions set forth in
this purchase order/contract; and

\(vi\) Used or copied for use in or transferred to a replacement
computer.

\(3\) If the restricted computer software delivered under this purchase
order/contract is published and copyrighted, it is licensed to the
Government, without disclosure prohibitions, with the rights set forth
in subparagraph (c)(2) of this clause

unless expressly stated otherwise in this purchase order/contract.

\(4\) To the extent feasible the Contractor shall affix a Notice
substantially as follows to any restricted computer software delivered
under this purchase order/contract; or, if the vendor does not, the
Government has the right to do so: \"Notice-Notwithstanding any other
lease or license agreement that may pertain to, or accompany the
delivery of, this computer software, the rights of the Government
regarding its use, reproduction and disclosure are as set forth in
Government Contract No. \_\_\_\_\_\_\_.\"

\(d\) If any restricted computer software is delivered under this
contract with the copyright notice of 17 U.S.C. 401, it will be presumed
to be published and copyrighted and licensed to the Government in
accordance with subparagraph (c)(3) of this clause, unless a statement
substantially as follows accompanies such copyright notice:
\"Unpublished-rights reserved under the copyright laws of the United
States.\"

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for the acquisition of existing
computer software, other than from GSA\'s Multiple Award Schedule
contracts.

**3.5-19** **RESERVED.**

PRESCRIPTION:

**3.5-20** **Technical Data Certification, Revision, and Withholding of
Payment\--Major Systems** (October 1996)

\(a\) Scope of clause. This clause shall apply to all technical data (as
defined in the Rights in Data\--General clause included in this
contract) that have been specified in this contract as being subject to
this clause. It shall apply to all such data delivered, or required to
be delivered, at any time during contract performance or within 3 years
after acceptance of all items (other than technical data) delivered
under this contract unless a different period is set forth herein. The
Contracting Officer may release the Contractor from all or part of the
requirements of this clause for specifically identified technical data
items at any time during the period covered by this clause.

\(b\) Technical data certification.

\(1\) All technical data that are subject to this clause shall be
accompanied by the following certification upon delivery:

TECHNICAL DATA CERTIFICATION (OCTOBER 1996)

The Contractor, \_\_\_\_\_\_\_\_\_\_\_\_ , hereby certifies that to the
best of its knowledge and belief the technical data delivered herewith
under Government contract No. \_\_\_\_\_\_\_\_\_\_\_\_ (and
subcontract\_\_\_\_\_\_\_\_\_\_\_\_, if appropriate) are complete,
accurate, and comply with the requirements of the contract concerning
such technical data.

(End of certification)

\(2\) The Government shall rely on the certification set out in
subparagraph (b)(1) of this clause in accepting delivery of the
technical data, and in consideration thereof may, at any time during the
period covered by this clause, request correction of any deficiencies
which are not in compliance with contract requirements. Such corrections
shall be made at the expense of the Contractor. Unauthorized markings on
data shall not be considered a deficiency for the purpose of this
clause, but will be treated in accordance with paragraph (e) of the
Rights in Data\--General clause included in this contract.

\(c\) Technical data revision. The Contractor also agrees, at the
request of the Contracting Officer, to revise technical data that are
subject to this clause to reflect engineering design changes made during
the performance of this contract and affecting the form, fit, and
function of any item (other than technical data) delivered under this
contract. The Contractor may submit a request for an equitable
adjustment to the terms and conditions of this contract for any
revisions to technical data made pursuant to this paragraph.

\(d\) Withholding of payment.

\(1\) At any time before final payment under this contract the
Contracting Officer may, in the Government\'s interest, withhold payment
until a reserve not exceeding \$100,000 or 5 percent of the amount of
this contract, whichever is less, if in the Contracting Officer\'s
opinion respecting any technical data that are subject to this clause,
the Contractor fails to\--

\(i\) Make timely delivery of such technical data as required by this
contract;

\(ii\) Provide the certification required by subparagraph (b)(1) of this
clause;

\(iii\) Make the corrections required by subparagraph (b)(2) of this
clause; or (iv) Make revisions requested under paragraph (c) of this
clause.

\(2\) Such reserve or balance shall be withheld until the Contracting
Officer has determined that the Contractor has delivered the data and/or
has made the required corrections or revisions. Withholding shall not be
made if the failure to make timely delivery, and/or the deficiencies
relating to delivered data, arose out of causes beyond the control of
the Contractor and without the fault or negligence of the Contractor.

\(3\) The Contracting Officer may decrease or increase the sums withheld
up to the sums authorized in subparagraph (d)(1) of this clause. The
withholding of any amount under this paragraph, or the subsequent
payment thereof, shall not be construed as a waiver of any Government
rights.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for major systems.

**3.6.1-1** **Notice of Total Small Business Set-Aside** (April 1996)

\(a\) Definition. Small business concern, as used in this clause, means
a concern, including its affiliates, that is independently owned and
operated, not dominant in the field of operation in which it is bidding
on Government contracts, and qualified as a small business under the
standard industrial classification size standards in thisScreening
Information Request (SIR).

\(b\) General.

\(1\) Information and/or offers are requested only from small business
concerns. Information and/or offers received from concerns that are not
small business concerns shall be considered nonresponsive and will be
rejected.

\(2\) Any award resulting from this SIR will be made to a small business
concern.

\(c\) Agreement. A manufacturer or regular dealer submitting information
and/or an offer in its own name agrees to furnish, in performing the
contract, only end items manufactured or produced by small business
concerns inside the United States, its territories and possessions, the
Commonwealth of Puerto Rico, the Trust Territory of the Pacific Islands,
or the District of Columbia. However, this requirement does not apply in
connection with construction or service contracts.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts involving total small business
set-asides.

**3.6.1-2** **Notice of Very Small Business Set-Aside** (December 2001)

\(a\) Definition. \"Very small business concern,\" as used in this
clause, means a concern, including its affiliates, that is independently
owned and operated, not dominant in the field of operation in which it
is bidding on Government contracts, whose size is no greater than 50
percent of the numerical size standard applicable to the North American
Industrial Classification Code assigned to a contracting opportunity.

\(b\) General.

\(1\) Information and/or offers under this acquisition are requested
from very small business concerns only. Information and/or offers that
are not from a very small business shall not be considered and shall be
rejected.

\(2\) Any award resulting from this SIR will be made to a very small
business concern.

\(c\) Agreement. A manufacturer or regular dealer submitting information
and/or an offer in its own name agrees to furnish, in performing the
contract, only end items manufactured or produced by very small business
concerns inside the United States, its territories and possessions, the
Commonwealth of Puerto Rico, the Trust Territory of the Pacific Islands,
or the District of Columbia. However, this requirement does not apply in
connection with construction or service contracts.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts involving small business
set-asides restricted to very small businesses.

**3.6.1-3** **Utilization of Small, Small Disadvantaged, Women-Owned,
and Service-Disabled Veteran Owned Small Business Concerns** (September
2001)

\(a\) It is the policy of the Federal Aviation Administration that small
business concerns and small business concerns owned and controlled by
socially and economically disadvantaged individuals shall be provided
reasonable opportunities to participate in performing contracts it lets,
including contracts and subcontracts for subsystems, assemblies,
components, and related services for major systems. It is further the
policy of the United States that its prime contractors establish
procedures to ensure the timely payment of amounts due pursuant to the
terms of their subcontracts with small business concerns and small
business concerns owned and controlled by socially and economically
disadvantaged individuals.

\(b\) The Contractor hereby agrees to carry out this policy in the
awarding of subcontracts to the fullest extent consistent with efficient
contract performance. The Contractor further agrees to cooperate in any
studies or surveys as may be conducted by the FAA as may be necessary to
determine the extent of the Contractor\'s compliance with this clause.

\(c\) The terms \"small disadvantaged business, and small business
concern owned and controlled by socially and economically disadvantaged
individuals\" shall mean a small business concern

\(1\) Which is at least 51 percent unconditionally owned by one or more
socially and economically disadvantaged individuals; or, in the case of
any publicly owned business, at least 51 per centum of the stock of
which is unconditionally owned by one or more socially and economically
disadvantaged individuals; and

\(2\) Whose management and daily business operations are controlled by
one or more of such individuals.

\(3\) This term also means a small business concern that is at least 51
percent unconditionally owned by an economically disadvantaged Indian
tribe or Native Hawaiian Organization, or a publicly owned business
having at least 51 percent of its stock unconditionally owned by one of
these entities which has its management and daily business controlled by
members of an economically disadvantaged Indian tribe or Native Hawaiian
Organization. The Contractor shall presume that socially and
economically disadvantaged individuals include Black Americans, Hispanic
Americans, Native Americans, Asian- Pacific Americans, Subcontinent
Asian Americans, and other minorities, or any other individual found to
be disadvantaged by the FAA. The Contractor shall presume that socially
and economically disadvantaged entities also include Indian Tribes and
Native Hawaiian Organizations.

\(d\) The term \`\`small business concern owned and controlled by
women\'\' shall mean a small business concern:

\(1\) Which is at least 51 percent owned by one or more women, or, in
the case of any publicly owned business, at least 51 percent of the
stock of which is owned by one or more women; and

\(2\) Whose management and daily business operations are controlled by
one or more women; and

\(e\) The term \"service-disabled veteran owned small business concern\"
shall mean a small business that is 51% owned and controlled by a
service-disabled veteran(s).

\(f\) Contractors acting in good faith may rely on written
representations by their subcontractors regarding their status as a
small business concern, a small disadvantaged business concern, a small
business concern owned and controlled by socially and economically
disadvantaged individuals, a small business concern owned and controlled
by women or a service-disabled veteran owned small business concern.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when there are potential
subcontracting opportunities.

**3.6.1-4** **Small, Small Disadvantaged, Women-Owned and
Service-Disabled Veteran Owned Small Business Subcontracting Plan**
(September 2001)

\(a\) This clause does not apply to small business concerns.

\(b\) Definitions:

\(1\) Commercial product, as used in this clause, means a product in
regular production that is sold in substantial quantities to the general
public and/or industry at established catalog or market prices. It also
means a product which, in the opinion of the Contracting Officer,
differs only insignificantly from the Contractor\'s commercial product.

\(2\) Subcontract, as used in this clause, means any agreement (other
than one involving an employer-employee relationship) entered into by a
Federal Government prime Contractor or subcontractor calling for
supplies or services required for performance of the contract or
subcontract.

\(3\) The terms \"small disadvantaged business and small business
concern owned and controlled by socially and economically disadvantaged
individuals\" shall mean a small business concern:

\(i\) Which is at least 51 percent unconditionally owned by one or more
socially and economically disadvantaged individuals; or, in the case of
any publicly owned business at least 51 percentum of the stock of which
is unconditionally owned by one or more socially and economically
disadvantaged individuals; and

\(ii\) Whose management and daily business operations are controlled by
one or more of such individuals.

\(iii\) This term also means a small business concern that is at least
51 percent unconditionally owned by an economically disadvantaged Indian
tribe or Native Hawaiian Organization, or a publicly owned business
having at least 51 percent of its stock unconditionally owned by one of
these entities which has its management and daily business controlled by
members of an economically disadvantaged Indian tribe or Native Hawaiian
Organization. The Contractor shall presume that socially and
economically disadvantaged individuals include Black Americans, Hispanic
Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian
Americans and other minorities, or any other individual found to be
disadvantaged by the FAA. The contractor shall presume that socially and
econmically disadvantaged entities also include Indian Tribes and Native
Hawaiian Organizations

\(4\) The term \"small business concern owned and controlled by women\"
shall mean a small business concern:

\(i\) Which is at least 51 percent owned by one or more women or in the
case of any publicly owned business, at least 51 percent of the stock of
which is owned by one or more women; and

\(ii\) Whose management and daily business operations are controlled by
one or more women.

\(5\) The term \"service disabled veteran owned small business concern\"
shall mean a small business that is 51 percent owned and controlled by a
service disabled veteran(s).

\(c\) The offeror, upon request by the Contracting Officer, shall submit
and negotiate a subcontracting plan, where applicable, which separately
addresses subcontracting with small business concerns, with small
disadvantaged business concerns, with women-owned small business
concerns, and with service- disabled veteran owned small business
concerns. If the offeror is submitting an individual contract plan, the
plan must separately address subcontracting with small business
concerns, small disadvantaged business concerns, women-owned small
business concerns and service-disabled veteran owned small business
concerns with a separate part for the basic contract and separate parts
for each option (if any). The plan shall be included in and made a part
of the resultant contract. The subcontracting plan shall be negotiated
within the time specified by the Contracting Officer. Failure to submit
and negotiate the subcontracting plan shall make the offeror ineligible
for award of a contract.

\(d\) The offeror\'s subcontracting plan shall include the following:

\(1\) Goals, expressed in terms of percentages of total planned
subcontracting dollars, for the use of small business concerns, small
disadvantaged business concerns, women-owned small business concerns,
and service-disabled veteran owned small business concerns as
subcontractors. The offeror shall include all subcontracts that
contribute to contract performance, and may include a proportionate
share of products and services that are normally allocated as indirect
costs.

\(2\) A statement of\--

\(i\) Total dollars planned to be subcontracted;

\(ii\) Total dollars planned to be subcontracted to small business
concerns;

\(iii\) Total dollars planned to be subcontracted to small disadvantaged
business concerns;

\(iv\) Total dollars planned to be subcontracted to women-owned small
business concerns: and

\(v\) Total dollars planned to be subcontracted to service-disabled
veteran owned small business concerns.

\(3\) A description of the principal types of supplies and services to
be subcontracted, and an identification of the types planned for
subcontracting to

\(i\) small business concerns,

\(ii\) small disadvantaged business concerns,

\(iii\) women-owned small business concerns and

\(iv\) service-disabled veteran owned small business concerns.

\(4\) A description of the method used to develop the subcontracting
goals in paragraph (d)(1) of this clause.

\(5\) A description of the method used to identify potential sources for
solicitation purposes (e.g., existing company source lists, the
Procurement Automated Source System (PASS) of the Small Business
Administration, the National Minority Purchasing Council Vendor
Information Service, the Research and Information Division of the
Minority Business Development Agency in the Department of Commerce, or
small, small disadvantaged and women- owned small business concerns
trade associations). A firm may rely on the information contained in
PASS as an accurate representation of a concern\'s size and ownership
characteristics for purposes of maintaining a small business source
list. A firm may rely on PASS as its small business source list. Use of
the PASS as its source list does not relieve a firm of its
responsibilities (e.g., outreach, assistance, counseling, publicizing
subcontracting opportunities) in this clause.

\(6\) A statement as to whether or not the offeror included indirect
costs in establishing subcontracting goals, and a description of the
method used to determine the proportionate share of indirect costs to be
incurred with

\(i\) small business concerns,

\(ii\) small disadvantaged business concerns,

\(iii\) women-owned small business concerns and

\(iv\) service-disabled veteran owned small business concerns.

\(7\) The name of the individual employed by the offeror who will
administer the offeror\'s subcontracting program, and a description of
the duties of the individual.

\(8\) A description of the efforts the offeror will make to assure that
small, small disadvantaged, women-owned, service-disabled veteran owned
small business concerns have an equitable opportunity to compete for
subcontracts.

\(9\) Assurances that the offeror will include the clause in this
contract titled \`\`Utilization of Small, Small Disadvantaged,
Women-Owned, and Service-Disabled Veteran Owned Small Business
Concerns\'\' in all subcontracts that offer further subcontracting
opportunities, and that the offeror will require all subcontractors
(except small business concerns) who receive subcontracts in excess of
\$5,000,000 (\$1,000,000 for construction of any public facility) to
adopt a plan similar to the plan agreed to by the offeror.

\(10\) Assurances that the offeror will:

\(i\) Cooperate in any studies or surveys as may be required,

\(ii\) Submit periodic reports in order to allow the Government to
determine the extent of compliance by the offeror with the
subcontracting plan,

\(iii\) Submit Subcontracting Reports for Individual Contracts in
electronic format (MS Excel File Size 4KB) via FAA web site located at
[http://www.sbo.faa.gov](http://www.sbo.faa.gov/) (\"Subcontracting
Report for Individual Contracts\") to the contracting officer and to
<Fred.Dendy@faa.gov> (include electronic signature on Page 2 of the
report). Additionally, these reports shall be submitted in accordance
with the instructions contained at FAA web site
[http://www.sbo.faa.gov](http://www.sbo.faa.gov/), Instructions for
Completing the Subcontracting Report for Individual Contracts. Submit SF
295, Summary Subcontract Report, in accordance with the instructions on
the SF 295; and

\(iv\) Ensure that its subcontractors agree to submit Subcontracting
Reports for Individual Contracts and Standard Form 295.

\(11\) A recitation of the types of records the offeror will maintain to
demonstrate procedures that have been adopted to comply with the
requirements and goals in the plan, including establishing source lists;
and a description of its efforts to locate small, small disadvantaged,
women-owned, and service-disabled veteran owned small business concerns
and award subcontracts to them. The records shall include at least the
following (on a plant-wide or company-wide basis, unless otherwise
indicated):

\(i\) Source lists (e.g., PASS), guides, and other data that identify
small, small disadvantaged, women-owned and service-disabled veteran
owned small business concerns.

\(ii\) Organizations contacted in an attempt to locate sources that are
small, small disadvantaged women-owned, or service-disabled veteran
owned small business concerns.

\(iii\) Records on each subcontract solicitation resulting in an award
of more than \$100,000, indicating

\(A\) Whether small business concerns were solicited and if not, why
not,

\(B\) Whether small disadvantaged business concerns were solicited and
if not, why not,

\(C\) Whether women-owned small business concerns were solicited and if
not, why not,

\(D\) Whether service-disabled veteran owned small business concerns
were solicited and if not, why not, and

\(E\) If applicable, the reason award was not made to a small business
concern.

\(iv\) Records of any outreach efforts to contact the following:

\(A\) Trade associations,

\(B\) Business development organizations, and

\(C\) Conferences and trade fairs to locate small, small disadvantaged,
women-owned, and service-disabled small business sources.

\(v\) Records of internal guidance and encouragement provided to buyers
through

\(A\) Workshops, seminars, training, etc., and

\(B\) Monitoring performance to evaluate compliance with the program\'s
requirements.

\(vi\) On a contract-by-contract basis, records to support award data
submitted by the offeror to the Government, including the name, address,
and business size of each subcontractor. Contractors having company or
division-wide annual plans need not comply with this requirement.

\(e\) In order to effectively implement this plan to the extent
consistent with efficient contract performance, the Contractor shall
perform the following functions:

\(1\) Assist small, small disadvantaged, women-owned, and
service-disabled veteran owned small business concerns by arranging
solicitations, time for the preparation of bids, quantities,
specifications, and delivery schedules so as to facilitate the
participation by such concerns. Where the contractor\'s lists of
potential small, small disadvantaged, women-owned, and service-disabled
veteran owned small business subcontractors are excessively long,
reasonable effort shall be made to give all such small business concerns
an opportunity to compete over a period of time.

\(2\) Provide adequate and timely consideration of the potentialities of
small, small disadvantaged, women-owned, and service-disabled veteran
owned small business concerns in all \`\`make-or-buy\'\' decisions.

\(3\) Counsel and discuss subcontracting opportunities with
representatives of small, small disadvantaged, women-owned, and
service-disabled veteran owned small business concerns,.

\(4\) Provide notice to subcontractors concerning penalties and remedies
for misrepresentations of business status as small, small disadvantaged,
women-owned or service-disabled veteran owned small business for the
purpose of obtaining a subcontract that is to be included as part or all
of a goal contained in the Contractor\'s subcontracting plan.

\(f\) A master subcontracting plan on a plant or division-wide basis
which contains all the elements required by (d) above, except goals, may
be incorporated by reference as a part of the subcontracting plan
required of the offeror by this clause; provided:

\(1\) The master plan has been approved,

\(2\) The offeror provides copies of the approved master plan and
evidence of its approval to the Contracting Officer, and

\(3\) Goals and any deviations from the master plan deemed necessary by
the Contracting Officer to satisfy the requirements of this contract are
set forth in the individual subcontracting plan.

\(g\)

\(1\) If a commercial product is offered, the subcontracting plan
required by this clause may relate to the offeror\'s production
generally, for both commercial and noncommercial products, rather than
solely to the Government contract. In these cases, the offeror shall,
with the concurrence of the Contracting Officer, submit one company-wide
or division-wide annual plan.

\(2\) The annual plan shall be reviewed for approval by the agency
awarding the offeror its first prime contract requiring a subcontracting
plan during the fiscal year, or by an agency satisfactory to the
Contracting Officer.

\(3\) The approved plan shall remain in effect during the offeror\'s
fiscal year for all of the offeror\'s commercial products.

\(h\) Prior compliance of the offeror with other such subcontracting
plans under previous contracts will be considered by the Contracting
Officer in determining the responsibility of the offeror for award of
the contract.

\(i\) The failure of the Contractor or subcontractor to comply in good
faith with (1) the clause of this contract titled \"Utilization Of
Small, Small Disadvantaged, Women-Owned, and Service-Disabled Veteran
Owned Small Business Concerns,\" or (2) an approved plan required by
this clause, shall be a material breach of the contract.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when there are potential
subcontracting opportunities.

**3.6.1-5** **RESERVED.**

PRESCRIPTION:

**3.6.1-6** **Liquidated Damages\--Subcontracting Plan** (September
2001)

\(a\) Failure to make a good faith effort to comply with the
subcontracting plan, as used in this clause, means a willful or
intentional failure to perform in accordance with the requirements of
the subcontracting plan approved under the clause in this contract
titled \"Small, Small Disadvantaged, Women-Owned, and Service-Disabled
Veteran Owned Small Business Subcontracting Plan,\" or willful or
intentional action to frustrate the plan.

\(b\) If, at contract completion, or in the case of a commercial product
plan, at the close of the fiscal year for which the plan is applicable,
the Contractor has failed to meet its subcontracting goals and the
Contracting Officer decides in accordance with paragraph (c) of this
clause that the Contractor failed to make a good faith effort to comply
with its subcontracting plan, established in accordance with the clause
in this contract titled \"Small, Small Disadvantaged, Women-Owned, and
Service-Disabled Veteran Owned Small Business Subcontracting Plan,\" the
Contractor shall pay the Government liquidated damages in an amount
stated. The amount of damages attributable to the Contractor\'s failure
to comply shall be an amount equal to the actual dollar amount by which
the Contractor failed to achieve each subcontract goal or, in the case
of a commercial products plan, that portion of the dollar amount
allocable to Government contracts by which the Contractor failed to
achieve each subcontract goal.

\(c\) Before the Contracting Officer makes a final decision that the
Contractor has failed to make such good faith effort, the Contracting
Officer shall give the Contractor written notice specifying the failure
and permitting the Contractor to demonstrate what good faith efforts
have been made. Failure to respond to the notice may be taken as an
admission that no valid explanation exists. If, after consideration of
all the pertinent data, the Contracting Officer finds that the
Contractor failed to make a good faith effort to comply with the
subcontracting plan, the Contracting Officer shall issue a final
decision to that effect and require that the Contractor pay the
Government liquidated damages as provided in paragraph (b) of this
clause.

\(d\) With respect to commercial product plans; i.e., company- wide or
division-wide subcontracting plans approved under paragraph (g) of the
clause in this contract titled \"Small, Small Disadvantaged,
Women-Owned, and Service-Disabled Veteran Owned Small Business
Subcontracting Plan,\" the Contracting Officer of the agency that
originally approved the plan will exercise the functions of the
Contracting Officer under this clause on behalf of all agencies that
awarded contracts covered by that commercial product plan.

\(e\) The Contractor shall have the right of appeal from any final
decision of the Contracting Officer.

\(f\) Liquidated damages shall be in addition to any other remedies that
the Government may have.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when there are potential
subcontracting opportunities

**3.6.1-7** **Limitations on Subcontracting** (August 1997)

By submission of an offer and execution of a contract, the
Offeror/Contractor agrees that in performance of the contract in the
case of a contract for:

\(a\) Services (except construction). At least 50 percent of the cost of
contract performance incurred for personnel shall be expended for
employees of the prime contractor.

\(b\) Supplies (other than procurements from a regular dealer in such
supplies). The prime contractor shall perform work for at least 50
percent of the cost of manufacturing the supplies, not including the
cost of materials.

\(c\) General construction. The prime contractor shall perform at least
15 percent of the cost of the contract, not including the cost of
materials, with its own employees.

\(d\) Construction by special trade contractors. The prime contractor
shall perform at least 25 percent of the cost of the contract, not
including the cost of materials, with its own employees.

Compute small business subcontracting labor cost percentages as follows:

Contractor Subcontractor

Direct Labor \$ \_\_\_\_\_\_\_\_ \$ \_\_\_\_\_\_\_\_

Allowable Overhead \_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

Subtotal (A) \_\_\_\_\_\_\_\_ (B) \_\_\_\_\_\_\_\_

Labor G&A \@\_\_\_\_\_% \_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

Total Labor Costs (C) \_\_\_\_\_\_\_\_ (D) \_\_\_\_\_\_\_\_

To calculate the subcontracting percentage, first add Direct Labor and
Allowable Overhead and enter the figures for the contractor in space (A)
and for the subcontractor (if available)\* in space (B).

Next, calculate Labor G & A by multiplying the G & A rate by the
subtotal figure in space (A). Calculate subcontractor Labor G & A by
multiplying the subcontractor\'s G & A rate by figure (B). Add the Labor
G & A to the Subtotal and record that figure in the spaces for Total
Labor Costs (C) and (D).

Now, using the formula (D)/(C) + (D), calculate the subcontracting labor
cost percentage.

\*You need to be comparing as like figures as possible; therefore, if
you have a breakdown of the subcontractor\'s costs, use it in the
formulation above. If you do not have a breakdown of the
subcontractors\' costs, you should use the Total Subcontracting Amount
for item (D), though you should still breakdown the contractor\'s costs.

(End of clause)

PRESCRIPTION:

Shall be included used in SIR\'s and contracts if any portion of the
requirement is to be set aside for small businesses, very small
businesses, or SEDB\'s.

**3.6.1-8** **Notification of Competition Limited to Eligible SEDB
Concerns** (April 2000)

\(a\) Offers are solicited only from \"eligible socially and
economically disadvantaged business (SEDB)\" concerns. As used herein,
an \"eligible SEDB\" concern is a small business concern expressly
certified by the Small Business Administration (SBA) for participation
in the SBA\'s 8(a) program and which meets the following criteria at the
time of release of the initial SIR or public announcement (if issued),
whichever is first:

\(1\) The offeror is in conformance with the 8(a) support limitation set
forth in its approved business plan; and

\(2\) The offeror is in conformance with the Business Activity Targets
set forth in its approved business plan or any remedial action direct by
the SBA.

\(b\) By submission of its offer, the offeror certifies that it meets
all of the criteria set forth in paragraph (a) of this clause.

\(c\)

\(1\) Agreement. A manufacturer or regular dealer submitting an offer in
its own name agrees to furnish, in performing the contract, only end
items manufactured or produced by small business concerns inside the
United States, its territories or possessions, the Commonwealth of
Puerto Rico, or the Trust Territory of the Pacific Islands. However ,
this requirement does not apply in connection with construction or
service contracts.

\(2\) The \[Offeror insert name here\] will notify the \[Insert name of
FAA Contracting Officer\] in writing immediately upon entering an
agreement (either oral or written) to transfer all or part of its stock
or other ownership interest to any other party.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts set-aside for competition among
socially and economically disadvantaged business (SEDB) concerns. The
Contracting Officer should insert appropriate information in the clause.

**3.6.1-9** **Mentor Protégé Program** (January 1999)

\(a\) Large and small businesses are encouraged to participate in the
FAA pilot Mentor-Protégé program for the purpose of providing
developmental assistance to eligible protégé entities to enhance their
capabilities and increase their participation in FAA contracts.

\(b\) The pilot program consists of:

\(1\) Mentor firms, which are large prime contractors or eligible small
businesses capable of providing developmental assistance;

\(2\) Protégé firms, which include socially and economically
disadvantaged businesses, historically black colleges and universities,
minority educational institutions, and woman-owned small businesses; and

\(3\) Mentor-Protégé agreements, approved by the FAA Team (Office of
Small and Disadvantaged Business Utilization -(OSDBU) and Integrated
Product Team/Product Team);

\(c\) Mentor participation in the program means providing technical,
managerial, and financing assistance to aid protégés in developing
requisite high-tech expertise and business systems to compete for and
successfully perform FAA contracts and subcontracts.

\(d\) Contractors interested in participating in the pilot program are
encouraged to contact the FAA OSDBU, (202) 267-8881 or (202) 267-7454,
for further information.

(End of clause)

PRESCRIPTION:

Should be used in all SIRs and contracts with subcontracting plans and
in SIRs and contracts exceeding \$5,000,000 (\$1,000,000 for
construction) that are set aside for small business that offer
subcontracting opportunities.

**3.6.1-10** **Evaluation of Contractor Participation in the FAA Mentor
Protégé Program** (January 1999)

FAA will evaluate the proposed participation and extent of developmental
assistance to be provided by mentor firms to protégé firms as an
approved mentor firm in the FAA Mentor-Protege Program.

PRESCRIPTION:

Should be used in SIR\'s containing the provisions at 3.6.1-9, FAA
Mentor-Protégé Program and require subcontracting plans.

**3.6.1-11** **Mentor Requirements and Evaluation** (January 1999)

\(a\) The purpose of the FAA Mentor-Protégé Program is for a FAA prime
contractor to provide developmental assistance to qualifying eligible
protégés include Historically Black Colleges and Universities, Minority
Institutions, Small Socially and Economically Disadvantaged Business
concerns including women-owned small businesses, as those terms are
defined herein.

\(b\) Performance Evaluation Process. The FAA will evaluate the
contractor\'s performance through the performance evaluation process
(PEP). The PEP will consider the following:

\(1\) Specific actions taken by the contractor, during the evaluation
period , to increase the participation of protégés as suppliers to the
Federal Government;

\(2\) Specific actions taken by the contractor, during the evaluation
period, to develop the technical and corporate administrative expertise
of a protégé as defined in the agreement;

\(3\) To what extent the protégé has met the developmental objectives in
the agreement; and

\(4\) To what extent the mentor-firm\'s participation in the
Mentor-Protégé Program resulted in the protégé\'s receiving competitive
contract(s) and subcontract(s) from private firms and agencies other
than the FAA.

\(c\) Semi-annual reports shall be submitted by the mentor to the FAA
Mentor-Protégé Program Manager in OSDBU.

\(d\) The mentor shall notify the OSDBU and the Integrated Product
Team/Product Team, in writing, at least 30 days in advance of the
mentor-firm\'s intent to voluntarily withdraw from the program or upon
receipt of a protégé\'s notice to withdraw from the Program.

\(e\) Mentor- and protégé-firms shall submit a \"lessons learned\"
evaluation to the FAA\'s OSDBU at the conclusion of the pilot program
period or the conclusion of their efforts whichever comes first. At the
conclusion of each year in the mentor-protégé program, the prime
contractor and protégé, as appropriate, will formally brief the FAA
Mentor-Protégé Program Manager, the technical program manager, and the
contracting officer during the formal program review regarding program
accomplishments as pertains to the approved agreement.

\(f\) FAA may terminate Mentor-Protégé agreements and exclude mentor or
protégé-firms from participating in the FAA program if FAA determines
that such actions are in FAA\'s best interest. These actions shall be
approved by the FAA Team. FAA will terminate an agreement by delivering
to the contractor a notice specifying the reason for termination and the
effective date. Termination of an agreement does not constitute a
termination of the subcontract between the mentor and the protégé. A
plan for accomplishing the subcontract effort, should the agreement be
terminated, shall be submitted with the agreement.

(End of clause)

PRESCRIPTION:

Shall be used in contracts with contractors that participate in the FAA
Mentor-Protégé Program.

**3.6.2-1** **Contract Work Hours and Safety Standards Act-Overtime
Compensation** (September 2003)

\(a\) Overtime requirements. No Contractor or subcontractor contracting
for any part of the contract work which may require or involve the
employment of laborers or mechanics shall require or permit any such
laborers or mechanics in any workweek in which the individual is
employed on such work to work in excess of 40 hours in such workweek
unless such laborer or mechanic receives compensation at a rate not less
than 1 1/2 times the basic rate of pay for all hours worked in excess of
40 hours in such workweek.

\(b\) Violation; liability for unpaid wages; liquidated damages. In the
event of any violation of the provisions set forth in paragraph (a) of
this clause, the Contractor and any subcontractor responsible therefor
shall be liable for the unpaid wages. In addition, such Contractor and
subcontractor shall be liable to the United States (in the case of work
done under contract for the District of Columbia or a territory, to such
District or to such territory), for liquidated damages. Such liquidated
damages shall be computed with respect to each individual laborer or
mechanics employed in violation of the provisions set forth in paragraph
(a) of this clause in the sum of \$10 for each calendar day on which
such individual was required or permitted to work in excess of the
standard workweek of 40 hours without payment of the overtime wages
required by provisions set forth in paragraph (a) of this clause.

\(c\) Withholding for unpaid wages and liquidated damages. The
Contracting Officer shall upon his or her own action or upon written
request of an authorized representative of the Department of Labor
withhold or cause to be withheld, from any moneys payable on account of
work performed by the Contractor or subcontractor under any such
contract or any other Federal contract with the same Prime Contractor,
or any other Federally-assisted contract subject to the Contract Work
Hours and Safety Standards Act which is held by the same Prime
Contractor, such sums as may be determined to be necessary to satisfy
any liabilities of such Contractor or subcontractor for unpaid wages and
liquidated damages as provided in the provisions set forth in paragraph
(b) of this clause.

\(d\) Payrolls and basic records.

\(1\) The Contractor or subcontractor shall maintain payrolls and basic
payroll records during the course of contract work and shall preserve
them for a period of 3 years from the completion of the contract for all
laborers and mechanics working on the contract. Such records shall
contain the name and address of each such employee, social security
number, correct classifications, hourly rates of wages paid, daily and
weekly number of hours worked, deductions made, and actual wages paid.
Nothing in this paragraph shall require the duplication of records
required to be maintained for construction work by Department of Labor
regulations at 29 CFR 5.5(a)(3) implementing the Davis-Bacon Act.

\(2\) The records to be maintained under paragraph (d)(1) of this clause
shall be made available by the Contractor or subcontractor for
inspection, copying, or transcription by authorized representatives of
the Contracting Officer or the Department of Labor. The Contractor or
subcontractor shall permit such representatives to interview employees
during working hours on the job.

\(e\) Subcontracts. The Contractor or subcontractor shall insert in any
subcontracts, exceeding \$100,000, the provisions set forth in
paragraphs (a) through (e) of this clause and also a clause requiring
the subcontractors to include these provisions in any lower tier
subcontracts. The Prime Contractor shall be responsible for compliance
by any subcontractor or lower tier subcontractor with the provisions set
forth in paragraphs (a) through (e) of this clause.

(End of clause)

PRESCRIPTION:

: Shall be used in SIR\'s and contracts (in accordance with 40 U.S.C.
327) when the contract may require or involve the employment of laborers
or mechanics. However, the Contracting Officer may not include the
clause in SIR\'s or contracts for any contract under \$100,000,
contracts for commercial products, transportation, transmission of
intelligence, foreign contracts, contracts under the Walsh-Healey Public
Contracts Act, or when supplies are incidental to the service
requirement or any other contract exempt according to the Secretary of
Labor.)

**3.6.2-2** **Convict Labor** (April 1996)

The Contractor agrees not to employ any person undergoing sentence of
imprisonment in performing this contract except as provided by 18 U.S.C.
4082(c)(2) and Executive Order 11755.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts except for: (a) contracts subject
to Walsh-Healey Public Contracts Act, (b) purchases from Federal Prison
Industries; or (c) acquisitions involving purchases from state prisons
of finished supplies that may be secured in the open market or from
existing stocks, as distinguished from special fabrication.

**3.6.2-3** **Walsh-Healey Public Contracts Act Representation**
(January 1998)

The offeror represents as a part of this offer that the offeror:

is \[ \] or is not \[ \] a regular dealer in, or

is \[ \] or is not \[ \] a manufacturer of, the supplies offered.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s (in accordance with 41 U.S.C. 35-45) for the
manufacture or furnishing of materials, supplies, articles and equipment
in any amount exceeding \$10,000.

**3.6.2-4** **Walsh-Healey Public Contracts Act** (April 1996)

\(a\) All representations and stipulations required by the Act and
regulations issued by the Secretary of Labor (41 CFR Chapter 50) are
incorporated by reference. These representations and stipulations are
subject to all applicable rulings and interpretations of the Secretary
of Labor that are now, or may hereafter, be in effect.

\(b\) All employees whose work relates to this contract shall be paid
not less than the minimum wage prescribed by regulations issued by the
Secretary of Labor (41 CFR 50-202.2). Learners, student learners,
apprentices, and handicapped workers may be employed at less than the
prescribed minimum wage (see 41 CFR 50-202.3) to the same extent that
such employment is permitted under Section 14 of the Fair Labor
Standards Act (41 U.S.C. 40).

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 41 U.S.C.
35-45) for the manufacture or furnishing of materials, supplies,
articles and equipment in any amount exceeding \$10,000.

**3.6.2-5** **Certification of Nonsegregated Facilities** (April 1996)

\(a\) \'Segregated facilities,\' as used in this provision, means any
waiting rooms, work areas, rest rooms and wash rooms, restaurants and
other eating areas, time clocks, locker rooms and other storage or
dressing areas, parking lots, drinking fountains, recreation or
entertainment areas, transportation, and housing facilities provided for
employees, that are segregated by explicit directive or are in fact
segregated on the basis of race, color, religion, or national origin
because of habit, local custom, or otherwise.

\(b\) By the submission of this offer, the offeror certifies that it
does not and will not maintain or provide for its employees any
segregated facilities at any of its establishments, and that it does not
and will not permit its employees to perform their services at any
location under its control where segregated facilities are maintained.
The offeror agrees that a breach of this certification is a violation of
the \"Equal Opportunity\" clause in the contract.

\(c\) The offeror further agrees that (except where it has obtained
identical certifications from proposed subcontractors for specific time
periods) it will\--

\(1\) Obtain identical certifications from proposed subcontractors
before the award of subcontracts under which the subcontractor will be
subject to the \"Equal Opportunity\" clause;

\(2\) Retain the certifications in the files; and

\(3\) Forward the following notice to the proposed subcontractors
(except if the proposed subcontractors have submitted identical
certifications for specific time periods):

NOTICE TO PROSPECTIVE SUBCONTRACTORS OF REQUIREMENT FOR CERTIFICATIONS
OF NONSEGREGATED FACILITIES

A Certification of Nonsegregated Facilities must be submitted before the
award of a subcontract under which the subcontractor will be subject to
the \"Equal Opportunity\" clause. The certification may be submitted
either for each subcontract or for all subcontracts during a period
(i.e., quarterly, semiannually, or annually).

Note: The penalty for making false statements in offers is prescribed in
18 U.S.C. 1001.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s expected to exceed \$10,000 and when the clause
3.6.2-9 will be included..

**3.6.2-6** **Previous Contracts and Compliance Reports** (April 1996)

The offeror represents that\--(a) It \[ \] has, \[ \] has not,
participated in a previous contract or subcontract subject either to the
\"Equal Opportunity\" clause of this solicitation, the clause originally
contained in Section 310 of Executive Order No. 10925, or the clause
contained in Section 201 of Executive Order No. 11114; (b) It \[ \] has,
\[ \] has not, filed all required compliance reports; and (c)
Representations indicating submission of required compliance reports,
signed by proposed subcontractors, will be obtained before subcontract
awards.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s and contract when the clause 3.6.2-9 will be
included..

**3.6.2-7** **Preaward On-Site Equal Opportunity Compliance Review**
(November 1997)

An award in the amount of \$10 million or more will not be made under
this screening information request unless the offeror and each of its
known first-tier subcontractors (to whom it intends to award a
subcontract of \$10 million or more are found, on the basis of a
compliance review, to be able to comply with the provisions of the
\"Equal Opportunity\" clause of this screening information request.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s other than those for construction when contract
clause 3.6.2.9 is used and the contract amount is expected to exceed
\$10 million.

**3.6.2-8** **Affirmative Action Compliance** (April 1996)

The offeror represents that (a) it \[ \] has developed and has on file,
\[ \] has not developed and does not have on file, at each
establishment, affirmative action programs required by the rules and
regulations of the Secretary of Labor (41 CFR 60-1 and 60-2), or (b) it
\[ \] has not previously had contracts subject to the written
affirmative action programs requirement of the rules and regulations of
the Secretary of Labor.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s, other than those for construction, when
contract clause 3.6.2.9 is used.

**3.6.2-9** **Equal Opportunity** (August 1998)

\(a\) If, during any 12-month period (including the 12 months preceding
the award of this contract), the Contractor has been or is awarded
nonexempt Federal contracts and/or subcontracts that have an aggregate
value in excess of \$10,000, the Contractor shall comply with
subparagraphs (b)(1) through (11) below. Upon request, the Contractor
shall provide information necessary to determine the applicability of
this clause.

\(b\) During performing this contract, the Contractor agrees as follows:

\(1\) The Contractor shall not discriminate against any employee or
applicant for employment because of race, color, religion, sex, or
national origin.

\(2\) The Contractor shall take affirmative action to ensure that
applicants are employed, and that employees are treated during
employment, without regard to their race, color, religion, sex, or
national origin. This shall include, but not be limited to,

\(i\) employment,

\(ii\) upgrading,

\(iii\) demotion,

\(iv\) transfer,

\(v\) recruitment or recruitment advertising,

\(vi\) layoff or termination,

\(vii\) rates of pay or other forms of compensation, and

\(viii\) selection for training, including apprenticeship.

\(3\) The Contractor shall post in conspicuous places available to
employees and applicants for employment the notices that explain this
clause.

\(4\) The Contractor shall, in all solicitations or advertisement for
employees placed by or on behalf of the Contractor, state that all
qualified applicants will receive consideration for employment without
regard to race, color, religion, sex, or national origin.

\(5\) The Contractor shall send, to each labor union or representative
of workers with which it has a collective bargaining agreement or other
contract or understanding, the notice to be provided by the Contracting
Officer advising the labor union or workers\' representative of the
Contractor\'s commitments under this clause, and post copies of the
notice in conspicuous places available to employees and applicants for
employment.

\(6\) The Contractor shall comply with Executive Order 11246, as
amended, and the rules, regulations, and orders of the Secretary of
Labor.

\(7\) The Contractor shall furnish to the FAAall information required by
Executive Order 11246, as amended, and by the rules, regulations, and
orders of the Secretary of Labor. Standard Form 100 (EEO-1), or any
successor form, is the prescribed form to be filed within 30 days
following the award, unless filed within 12 months preceding the date of
award.

\(8\) The Contractor shall permit access to its books, records, and
accounts by the FAA or the Office of Federal Contract Compliance
Programs (OFCCP) for the purposes of investigation to ascertain the
Contractor\'s compliance with the applicable rules, regulations, and
orders.

\(9\) If the OFCCP determines that the Contractor is not in compliance
with this clause or any rule, regulation, or order of the Secretary of
Labor, the contract may be canceled, terminated, or suspended in whole
or in part and the Contractor may be declared ineligible for further
Government contracts, under the procedures authorized in Executive Order
11246, as amended. In addition, sanctions maybe imposed and remedies
invoked against the Contractor as provided in Executive Order 11246, as
amended, the rules, regulations, and orders of the Secretary of Labor,
or as otherwise provided by law.

\(10\) The Contractor shall include the terms and conditions of
subparagraph (b)(1) through (11) of this clause in every subcontract or
purchase order that is not exempted by the rules, regulations, or orders
of the Secretary of Labor issued under Executive Order 11246, as
amended, so that these terms and conditions will be binding upon each
subcontractor or vendor.

\(11\) The Contractor shall take such action with respect to any
subcontract or purchase order as the FAAmay direct as a means of
enforcing these terms and conditions, including sanctions for
noncompliance; provided, that if the Contractor becomes involved in, or
is threatened with, litigation with a subcontractor or vendor as a
result of any direction, the Contractor may request the United States to
enter into the litigation to protect the interests of the United States.

\(c\) Notwithstanding any other clause in this contract, disputes
relative to this clause will be governed by the procedures in 41 CFR
60-1.1.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contract expected to exceed \$10,000 unless
the Contracting Officer has obtained an exemption from all of the terms
of the clause.

**3.6.2-9/alt1** **Equal Opportunity Alternate I** (April 1996)

If one or more, but not all of the terms of the clause are exempt from
the requirements of EO11246, add the following as a preamble to the
basic clause:

The following terms of this clause are waived for this contract:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[Contracting Officer shall list terms.\]

(End of clause)

PRESCRIPTION:

Shall be used when the Contracting Officer has obtained a waiver of
specific terms of the clause. The Contracting Officer should insert
appropriate information in the clause.

**3.6.2-10** **Equal Opportunity Preaward Clearance of Subcontracts**
(November 1997)

Notwithstanding the clause of this contract titled 3.10.2-1,
Subcontracts (Fixed-Price Contracts), the Contractor shall not enter
into a first-tier subcontract for an estimated or actual amount of \$10
million or more without obtaining in writing from the Contracting
Officer a clearance that the proposed subcontractor is in compliance
with equal opportunity requirements and therefore is eligible for award.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts, other than those for
construction, when the amount of the contract is expected to exceed \$10
million and other clauses included in the contract, e.g., 3.10.2-1, will
require consent or notification prior to subcontracting.

**3.6.2-11** **Notification of Visa Denial** (April 1996)

It is a violation of Executive Order 11246, as amended, for a Contractor
to refuse to employ any applicant or not to assign any person hired in
the United States, on the basis that the individual\'s race, color,
religion, sex, or national origin is not compatible with the policies of
the country where the work is to be performed or for whom the work will
be performed (41 CFR 60-1.10). The Contractor agrees to notify the
Department of State, Washington, DC, Attention: Director, Bureau of
Politico-Military Affairs, and the Director, Office of Federal Contract
Compliance Programs, when it has knowledge of any employee or potential
employee being denied an entry visa to a country in which the Contractor
is required to perform this contract, and it believes the denial is
attributable to the race, color, religion, sex, or national origin of
the employee or potential employee.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s when contract clause 3.6.2.9 is used and the
contractor is required to perform in or on behalf of a foreign country.

**3.6.2-12** **Affirmative Action for Special Disabled and Vietnam Era
Veterans** (January 1998)

\(a\) Definitions.

\(1\) \"Appropriate office of the State employment service system,\" as
used in this clause, means the local office of the Federal-State
national system of public employment offices assigned to serve the area
where the employment opening is to be filled, including the District of
Columbia, Guam, Puerto Rico, Virgin Islands, American Samoa, and the
Trust Territory of the Pacific Islands.

\(2\) \"Openings that the Contractor proposes to fill from within its
own organization,\" as used in this clause, means employment openings
for which no one outside the Contractor\'s organization (including any
affiliates, subsidiaries, and the parent companies) will be considered
and includes any openings that the Contractor proposes to fill from
regularly established \'recall\' lists.

\(3\) \"Openings that the Contractor proposes to fill under a customary
and traditional employer-union hiring arrangement,\" as used in this
clause, means employment openings that the Contractor proposes to fill
from union halls, under their customary and traditional employer-union
hiring relationship.

\(4\) \"Suitable employment openings,\" as used in this clause\--(1)
Includes, but is not limited to, openings that occur in jobs categorized
as?

\(i\) Production and nonproduction;

\(ii\) Plant and office; (iii) Laborers and mechanics;

\(iv\) Supervisory and nonsupervisory;

\(v\) Technical; and

\(vi\) Executive, administrative, and professional positions compensated
on a salary basis of less than \$25,000 a year; and (2) Includes
full-time employment, temporary employment of over 3 days, and part-time
employment, but not openings that the Contractor proposes to fill from
within its own organization or under a customary and traditional
employer-union hiring arrangement, nor openings in an educational
institution that are restricted to students of that institution.

\(b\) General.

\(1\) Regarding any position for which the employee or applicant for
employment is qualified, the Contractor shall not discriminate against
the individual because the individual is a special disabled or Vietnam
Era veteran. The Contractor agrees to take affirmative action to employ,
advance in employment and otherwise treat qualified special disabled and
Vietnam Era veterans without discrimination based upon their disability
or veterans\' status in all employment practices such as?

\(i\) Employment;

\(ii\) Upgrading;

\(iii\) Demotion or transfer;

\(iv\) Recruitment;

\(v\) Advertising;

\(vi\) Layoff or termination;

\(viii\) Rates of pay or other forms of compensation; and

\(viii\) Selection for training, including apprenticeship.

\(2\) The Contractor agrees to comply with the rules, regulations, and
relevant orders of the Secretary of Labor (Secretary) issued under the
Vietnam Era Veterans\' Readjustment Assistance Act of 1972 (the Act), as
amended.

\(c\) Listing openings.

\(1\) The Contractor agrees to list all suitable employment openings
existing at contract award or occurring during contract performance, at
an appropriate office of the State employment service system in the
locality where the opening occurs. These openings include those
occurring at any Contractor facility, including one not connected with
performing this contract. An independent corporate affiliate is exempt
from this requirement.

\(2\) State and local government agencies holding Federal contracts of
\$10,000 or more shall also list all their suitable openings with the
appropriate office of the State employment service.

\(3\) The listing of suitable employment openings with the State
employment service system is required at least concurrently with using
any other recruitment source or effort and involves the obligations of
placing a bona fide job order, including accepting referrals of veterans
and nonveterans. This listing does not require hiring any particular job
applicant or hiring from any particular group of job applicants and is
not intended to relieve the Contractor from any requirements of
Executive orders or regulations concerning nondiscrimination in
employment.

\(4\) Whenever the Contractor becomes contractually bound to the listing
terms of this clause, it shall advise the State employment service
system, in each State where it has establishments, of the name and
location of each hiring location in the State. As long as the Contractor
is contractually bound to these terms and has so advised the State
system, it need not advise the State system of subsequent contracts. The
Contractor may advise the State system when it is no longer bound by
this contract clause.

\(5\) Under the most compelling circumstances, an employment opening may
not be suitable for listing, including situations when (i) the
Government\'s needs cannot reasonably be supplied, (ii) listing would be
contrary to national security, or (iii) the requirement of listing would
not be in the Government\'s interest.

\(d\) Applicability.

\(1\) This clause does not apply to the listing of employment openings
which occur and are filled outside the 50 States, the District of
Columbia, Puerto Rico, Guam, Virgin Islands, American Samoa, and the
Trust Territory of the Pacific Islands.

\(2\) The terms of paragraph (c) above of this clause do not apply to
openings that the Contractor proposes to fill from within its own
organization or under a customary and traditional employer-union hiring
arrangement. This exclusion does not apply to a particular opening once
an employer decides to consider applicants outside of its own
organization or employer-union arrangement for that opening.

\(e\) Postings.

\(1\) The Contractor agrees to post employment notices stating (i) the
Contractor\'s obligation under the law to take affirmative action to
employ and advance in employment qualified special disabled veterans and
veterans of the Vietnam era, and (ii) the rights of applicants and
employees.

\(2\) These notices shall be posted in conspicuous places that are
available to employees and applicants for employment. They shall be in a
form prescribed by the Director, Office of Federal Contract Compliance
Programs, Department of Labor (Director), and provided by or through the
Contracting Officer.

\(3\) The Contractor shall notify each labor union or representative of
workers with which it has a collective bargaining agreement or other
contract understanding, that the Contractor is bound by the terms of the
Act, and is committed to take affirmative action to employ, and advance
in employment, qualified special disabled and Vietnam Era veterans.

\(f\) Noncompliance. If the Contractor does not comply with the
requirements of this clause, appropriate actions may be taken under the
rules, regulations, and relevant orders of the Secretary issued pursuant
to the Act.

\(g\) Subcontracts. The Contractor shall include the terms of this
clause in every subcontract or purchase order of \$10,000 or more unless
exempted by rules, regulations, or orders of the Secretary. The
Contractor shall act as specified by the Director to enforce the terms,
including action for noncompliance.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts expected to exceed \$10,000,
unless the work will be performed outside the U.S. by non-U.S. employees
or the Contracting Officer has obtained an exemption from all of the
terms of the clause..

**3.6.2-12/alt1** **Affirmative Action for Special Disabled and Vietnam
Era Veterans Alternate I** (July 1996)

Add the following as a preamble to the basic clause:

Notice: The following term(s) of this clause are waived for this
contract: \[List term(s).\]

(End of clause)

PRESCRIPTION:

Shall be used when the Contracting Officer has obtained a waiver of
specific terms of the clause. The Contracting Officer should insert
appropriate information in the clause.

**3.6.2-13** **Affirmative Action for Workers With Disabilities** (April
2000)

\(a\) General.

\(1\) Regarding any position for which the employee or applicant for
employment is qualified, the Contractor shall not discriminate against
any employee or applicant because of physical or mental disability. The
Contractor agrees to take affirmative action to employ, advance in
employment, and otherwise treat qualified individuals with disabilities
without discrimination based upon their physical or mental disability in
all employment practices such as\--

\(i\) Recruitment, advertising, and job application procedures;

\(ii\) Hiring, upgrading, promotion, award of tenure, demotion,
transfer, layoff, termination, right of return from layoff, and
rehiring;

\(iii\) Rates of pay or any other form of compensation and changes in
compensation;

\(iv\) Job assignments, job classifications, organizational structures,
position descriptions, lines of progression, and seniority lists;

\(v\) Leaves of absence, sick leave, or any other leave;

\(vi\) Fringe benefits available by virtue of employment, whether or not
administered by the Contractor;

\(vii\) Selection and financial support for training, including
apprenticeships, professional meetings, conferences, and other related
activities, and selection for leaves of absence to pursue training;

\(viii\) Activities sponsored by the Contractor, including social or
recreational programs; and

\(ix\) Any other term, condition, or privilege of employment.

\(2\) The Contractor agrees to comply with the rules, regulations, and
relevant orders of the Secretary of Labor (Secretary) issued under the
Rehabilitation Act of 1973 (29 U.S.C. 793) (the Act), as amended.

\(b\) Postings.

\(1\) The Contractor agrees to post employment notices stating\--

\(i\) The Contractor\'s obligation under the law to take affirmative
action to employ and advance in employment qualified individuals with
disabilities; and

\(ii\) The rights of applicants and employees.

\(2\) These notices shall be posted in conspicuous places that are
available to employees and applicants for employment. The Contractor
shall ensure that applicants and employees with disabilities are
informed of the contents of the notice (e.g., the Contractor may have
the notice read to a visually disabled individual, or may lower the
posted notice so that it might be read by a person in a wheelchair). The
notices shall be in a form prescribed by the Deputy Assistant Secretary
for Federal Contract Compliance of the U.S. Department of Labor (Deputy
Assistant Secretary) and shall be provided by or through the Contracting
Officer.

\(3\) The Contractor shall notify each labor union or representative of
workers with which it has a collective bargaining agreement or other
contract understanding, that the Contractor is bound by the terms of
Section 503 of the Act and is committed to take affirmative action to
employ, and advance in employment, qualified individuals with physical
or mental disabilities.

\(c\) Noncompliance. If the Contractor does not comply with the
requirements of this clause, appropriate actions may be taken under the
rules, regulations, and relevant orders of the Secretary issued pursuant
to the Act.

\(d\) Subcontracts. The Contractor shall include the terms of this
clause in every subcontract or purchase order in excess of \$10,000
unless exempted by rules, regulations, or orders of the Secretary. The
Contractor shall act as specified by the Deputy Assistant Secretary to
enforce the terms, including action for noncompliance.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts expected to exceed \$2,500, unless
the Contracting Officer has obtained a waiver from all of the terms of
the clause.

**3.6.2-13/alt1** **Affirmative Action for Workers With Disabilities
Alternate I** (April 2000)

Add the following as a preamble to the clause:

Notice: The following term(s) of this clause are waived for this
contract: \[CO to list terms here\]

PRESCRIPTION:

Shall be used when the Contracting Officer has obtained a waiver of
specific terms of the clause.

**3.6.2-14** **Employment Reports on Special Disabled Veterans and
Veterans of Vietnam Era** (January 1998)

\(a\) The contractor shall report at least annually, as required by the
Secretary of Labor, on:

\(1\) The number of special disabled veterans and the number of veterans
of the Vietnam era in the workforce of the contractor by job category
and hiring location; and

\(2\) The total number of new employees hired during the period covered
by the report, and of that total, the number of special disabled
veterans, and the number of veterans of the Vietnam era.

\(b\) The above items shall be reported by completing the form titled
\'Federal Contractor Veterans\' Employment Report VETS-100.\'

\(c\) Reports shall be submitted no later than March 31 of each year
beginning March 31, 1988.

\(d\) The employment activity report required by paragraph (a)(2) of
this clause shall reflect total hires during the most recent 12-month
period as of the ending date selected for the employment profile report
required by paragraph (a)(1) of this clause. Contractors may select an
ending date: (1) As of the end of any pay period during the period
January through March 1st of the year the report is due, or (2) as of
December 31, if the contractor has previous written approval from the
Equal Employment Opportunity Commission to do so for purposes of
submitting the Employer Information Report EEO-1 (Standard Form 100).

\(e\) The count of veterans reported according to paragraph (a) of this
clause shall be based on voluntary disclosure. Each contractor subject
to the reporting requirements at 38 U.S.C. 2012(d) shall invite all
special disabled veterans and veterans of the Vietnam era who wish to
benefit under the affirmative action program at 38 U.S.C. 2012 to
identify themselves to the contractor. The invitation shall state that
the information is voluntarily provided, that the information will be
kept confidential, that disclosure or refusal to provide the information
will not subject the applicant of employee to any adverse treatment and
that the information will be used only in accordance with the
regulations promulgated under 38 U.S.C. 2012.

\(f\) Subcontracts. The Contractor shall include the terms of this
clause in every subcontract or purchase order of \$10,000 or more unless
exempted by rules, regulations, or orders of the Secretary.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts containing clause 3.2.6-12.

**3.6.2-15** **Evaluation of Compensation for Professional Employees**
(April 1996)

\(a\) Recompetition of service contracts may in some cases result in
lowering the compensation (salaries and fringe benefits) paid or
furnished professional employees. This lowering can be detrimental in
obtaining the quality of professional services needed for adequate
contract performance. It is therefore in the Government\'s best interest
that professional employees, as defined in 29 CFR 541, be properly and
fairly compensated. As part of their submittals, offerors will provide a
total compensation plan setting forth salaries and fringe benefits
proposed for the professional employees who will work under the
contract. The Government will evaluate the plan to assure that it
reflects a sound management approach and understanding of the contract
requirements. This evaluation will include an assessment of the
offeror\'s ability to provide uninterrupted high-quality work. The
professional compensation proposed will be considered in terms of its
impact upon recruiting and retention, its realism, and its consistency
with a total plan for compensation. Supporting information will include
data, such as recognized national and regional compensation surveys and
studies of professional, public and private organizations, used in
establishing the total compensation structure.

\(b\) The compensation levels proposed should reflect a clear
understanding of work to be performed and should indicate the capability
of the proposed compensation structure to obtain and keep suitably
qualified personnel to meet mission objectives. The salary rates or
ranges must take into account differences in skills, the complexity of
various disciplines, and professional job difficulty. Additionally,
submittals envisioning compensation levels lower than those of
predecessor contractors for the same work will be evaluated on the basis
of maintaining program continuity, uninterrupted high-quality work, and
availability of required competent professional service employees.
Offerors are cautioned that lowered compensation for essentially the
same professional work may indicate lack of sound management judgment
and lack of understanding of the requirement.

\(c\) The Government is concerned with the quality and stability of the
work force to be employed on this contract. Professional compensation
that is unrealistically low or not in reasonable relationship to the
various job categories, since it may impair the Contractor\'s ability to
attract and retain competent professional service employees, may be
viewed as evidence of failure to comprehend the complexity of the
contract requirements.

\(d\) Failure to comply with these provisions may constitute sufficient
cause to justify rejection of asubmittal.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s for negotiated service contracts when the
services to be provided include a meaningful number of professional
employees.

**3.6.2-16** **Notice to the Government of Labor Disputes** (April 1996)

\(a\) If 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, including all
relevant information, to the Contracting Officer.

\(b\) The Contractor agrees to insert the substance of this clause,
including this paragraph (b), in any subcontract to which a labor
dispute may delay the timely performance of this contract; except that
each 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 the next higher tier
subcontractor or the prime Contractor, as the case may be, of all
relevant information concerning the dispute.

(End of clause)

PRESCRIPTION:

Shall be used in contracts if the possibility of a labor conflict exists
which could impact the performance of the contract.

**3.6.2-17** **Payment for Overtime Premiums** (April 1996)

\(a\) The use of overtime is authorized under this contract if the
overtime premium cost does not exceed \_\_\_\_\_\_\_\_\_\_ \*\[insert
amount\] or the overtime premium is paid for work\--

\(1\) 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;

\(2\) By indirect-labor employees such as those performing duties in
connection with administration, protection, transportation, maintenance,
standby plant protection, operation of utilities, or accounting;

\(3\) To perform tests, industrial processes, laboratory procedures,
loading or unloading of transportation conveyances, and operations in
flight or afloat that are continuous in nature and cannot reasonably be
interrupted or completed otherwise; or

\(4\) That will result in lower overall costs to the Government.

\(b\) Any request for estimated overtime premiums that exceeds the
amount specified above shall include all estimated overtime for contract
completion and shall\--

\(1\) Identify the work unit; e.g., department or section in which the
requested overtime will be used, together with present workload,
staffing, and other data of the affected unit sufficient to permit the
Contracting Officer to evaluate the necessity for the overtime;

\(2\) Demonstrate the effect that denial of the request will have on the
contract delivery or performance schedule;

\(3\) Identify the extent to which approval of overtime would affect the
performance or payments in connection with other Government contracts,
together with identification of each affected contract; and

\(4\) Provide reasons why the required work cannot be performed by using
multishift operations or by employing additional personnel.

\*\[insert either \"zero\" or the dollar amount agreed to during
communications. The inserted figure does not apply to the exceptions in
subparagraph (a)(1) through (a)(4) of the clause.\]

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when a cost reimbursement contract
is contemplated and the contract value is expected to exceed \$100,000.
The Contracting Officer should insert appropriate information in the
clause.

**3.6.2-18** **Davis Bacon Act** (April 1996)

\(a\) All laborers and mechanics employed or working upon the site of
the work will be paid unconditionally and not less often than once a
week, and without subsequent deduction or rebate on any account (except
such payroll deductions as are permitted by regulations issued by the
Secretary of Labor under the Copeland Act (29 CFR Part 3)), the full
amount of wages and bona fide fringe benefits (or cash equivalents
thereof due at time of payment computed at rates not less than those
contained in the wage determination of the Secretary of Labor which is
attached hereto and made a part hereof, regardless of any contractual
relationship which may be alleged to exist between the Contractor and
such laborers and mechanics. Contributions made or costs reasonably
anticipated for bona fide fringe benefits under section 1(b)(2) of the
Davis-Bacon Act on behalf of laborers or mechanics are considered wages
paid to such laborers or mechanics, subject to the provisions of
paragraph (d) of this clause; also, regular contributions made or costs
incurred for more than a weekly period (but not less often than
quarterly) under plans, funds, or programs which cover the particular
weekly period are deemed to be constructively made or incurred during
such period. Such laborers and mechanics shall be paid not less than the
appropriate wage rate and fringe benefits in the wage determination for
the classification of work actually performed, without regard to skill,
except as provided in the clause titled \"Apprentices, Trainees, and
Helpers.\" Laborers or mechanics performing work in more than one
classification may be compensated at the rate specified for each
classification for the time actually worked therein; provided, that the
employer\'s payroll records accurately set forth the time spent in each
classification in which work is performed. The wage determination
(including any additional classifications and wage rates conformed under
paragraph (b) of this clause) and the Davis-Bacon poster (WH-1321) shall
be posted at all times by the Contractor and its subcontractors at the
site of the work in a prominent and accessible place where it can be
easily seen by the workers.

\(b\) Additional wage classifications.

\(1\) The Contracting Officer shall require that any class of laborers
or mechanics, including helpers, which is not listed in the wage
determination and which is to be employed under the contract shall be
classified in conformance with the wage determination. The Contracting
Officer shall approve an additional classification, and wage rate and
fringe benefits therefor, only when all the following criteria have been
met:

\(A\) Except with respect to helpers as defined in 29 CFR 5.2(n)(4), the
work to be performed by the classification requested is not performed by
a classification in the wage determination.

\(B\) The classification is utilized in the area by the construction
industry.

\(C\) The proposed wage rate, including any bona fide fringe benefits,
bears a reasonable relationship to the wage rates contained in the wage
determination.

\(D\) With respect to helpers, such classification prevails in the area
in which the work is performed.

\(2\) If the Contractor and the laborers and mechanics to be employed in
the classification (if known), or their representatives, and the
Contracting Officer agree on the classification and wage rate (including
the amount designated for fringe benefits where appropriate), a report
of the action taken shall be sent by the Contracting Officer to the
Administrator of the Wage and Hour Division, Employment Standards
Administration, U.S. Department of Labor, Washington, DC 20210. The
Administrator or an authorized representative will approve, modify, or
disapprove every additional classification action within 30 days of
receipt and so advise the Contracting Officer or will notify the
Contracting Officer within the 30-day period that additional time is
necessary.

\(3\) In the event the Contractor, the laborers or mechanics to be
employed in the classification, or their representatives, and the
Contracting Officer do not agree on the proposed classification and wage
rate (including the amount designated for fringe benefits, where
appropriate), the Contracting Officer shall refer the questions,
including the views of all interested parties and the recommendation of
the Contracting Officer, to the Administrator of the Wage and Hour
Division for determination. The Administrator, or an authorized
representative, will issue a determination within 30 days of receipt and
so advise the Contracting Officer or will notify the Contracting Officer
within the 30-day period that additional time is necessary.

\(4\) The wage rate (including fringe benefits, where appropriate)
determined pursuant to subparagraphs (b)(2) or (b)(3) of this clause
shall be paid to all workers performing work in the classification under
this contract from the first day on which work is performed in the
classification.

\(c\) Whenever the minimum wage rate prescribed in the contract for a
class of laborers or mechanics includes a fringe benefit which is not
expressed as an hourly rate, the Contractor shall either pay the benefit
as stated in the wage determination or shall pay another bona fide
fringe benefit or an hourly cash equivalent thereof.

\(d\) If the Contractor does not make payments to a trustee or other
third person, the Contractor may consider as part of the wages of any
laborer or mechanic the amount of any costs reasonably anticipated in
providing bona fide fringe benefits under a plan or program; provided
that the Secretary of Labor has found, upon the written request of the
Contractor, that the applicable standards of the Davis-Bacon Act have
been met. The Secretary of Labor may require the Contractor to set aside
in a separate account assets for the meeting of obligations under the
plan or program.

\(e\) The FAA reserves the unilateral right to modify this contract to
incorporate changes to the wage rates issued by the Department of Labor.
If such changes cause an increase or decrease in the contractor\'s cost
of performance, the Contracting Officer shall equitably adjust the
contract price.

\(f\) The Contractor shall comply with the requirements of the Copeland
(\"Anti-Kickback\") Act (18 U.S.C. 874 and 40 U.S.C. 276c) and its
implementing regulations (29 CFR Part 3), which prohibit inducing or
intimidating employees to accept lessor compensation than they are
entitled to under a contract of employment.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 40 U.S.C. 276a
et seq.), for contracts over \$2,000 for construction, alteration or
repair of public buildings or public works to be performed within the
United States.

**3.6.2-19** **Withholding\--Labor Violations** (April 1996)

The Contracting Officer may withhold, or cause to be withheld, from the
Contractor under this contract, or any other Federal contract with the
same Prime Contractor, as much of the otherwise due payments, advances,
or guarantee of funds, as may be considered necessary to pay laborers
and mechanics, including apprentices, trainees, and helpers, employed by
the Contractor or any subcontractor the full amount of wages and fringe
benefits required by the contract. In the event of failure to pay any
laborer or mechanic, including any apprentice, trainee, or helper,
employed, or working on the site of the work, all or part of the wages
required by the contract, the Contracting Officer may, after written
notice to the Contractor, take such action as may be necessary to cause
the suspension of any further payment, advance, or guarantee of funds
until such violations have ceased

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for construction which are
expected to exceed \$2,000.

**3.6.2-20** **Payrolls and Basic Records** (June 1999)

\(a\) Payrolls and basic records relating thereto shall be maintained by
the Contractor during the course of the work and preserved for a period
of 3 years thereafter for all laborers and mechanics working at the site
of the work. Such records shall contain the name, address and social
security number of each such worker, his or her correct classification,
hourly rates of wages paid (including rates of contributions or costs
anticipated for bona fide fringe benefits or cash equivalents thereof of
the types described in section 1(b)(2)(B) of the Davis-Bacon Act), daily
and weekly number of hours worked, deductions made, and actual wages
paid. Whenever the Secretary of Labor has found under paragraph (d) of
the clause entitled \"Davis-Bacon Act\" that the wages of any laborer or
mechanic include the amount of any costs reasonably anticipated in
providing benefits under a plan or program described in section 1
(b)(2)(B) of the Davis-Bacon Act, the Contractor shall maintain records
which show that the commitment to provide such benefits is enforceable,
that the plan or program is financially responsible, that the plan or
program has been communicated in writing to the laborers or mechanics
affected, and records which show the costs anticipated or the actual
cost incurred in providing such benefits. Contractors employing
apprentices or trainees under approved programs shall maintain written
evidence of the registration of apprenticeship programs and
certification of trainee programs, the registration of the apprentices
and trainees, and the ratios and wage rates prescribed in the applicable
programs.

\(b\) (1) Submission of Payroll Records. The Contractor shall submit a
copy of all payrolls to the Contracting Officer weekly for each week in
which any contract work is performed. The payrolls submitted shall set
out the information required under paragraph (a) of this clause
accurately and completely. Optional Form WH-347 (Federal Stock Number
029-005-00014-1) is available for this purpose and may be purchased from
the Superintendent of Documents, U.S. Government Printing Office,
Washington, DC 20402. The Contractor is responsible for the submission
of copies of payrolls by all subcontractors.

\(2\) Each payroll submitted shall be accompanied by a \"Statement of
Compliance,\" signed by the Contractor or subcontractor or his or her
agent who pays or supervises the payment of the persons employed under
the contract and shall certify

\(i\) That the payroll for the payroll period contains the information
required to be maintained under paragraph (a) of this clause and that
such information is correct and complete;

\(ii\) That each laborer or mechanic (including each helper, apprentice,
and trainee) employed on the contract during the payroll period has been
paid the full weekly wages earned, without rebate, either directly or
indirectly, and that no deductions have been made either directly or
indirectly from the full wages earned, other than permissible deductions
as set forth in the Regulations, 29 CFR Part 3; and

\(iii\) That each laborer or mechanic has been paid not less than the
applicable wage rates and fringe benefits or cash equivalents for the
classification of work performed, as specified in the applicable wage
determination incorporated into the contract.

\(3\) The submission of a properly executed certification set forth on
the reverse side of Optional Form WH-347 shall satisfy the requirement
for submission of the \"Statement of Compliance\" required by paragraph
(b)(2) of this clause.

\(4\) The falsification of any of the above certifications in this
clause may subject the Contractor or subcontractor to civil or criminal
prosecution under Section 1001 of Title 18 and Section 3729 of Title 31
of the United States Code.

\(c\) The Contractor or subcontractor shall make the records required
under paragraph (a) of this clause available for inspection, copying, or
transcription by the Contracting Officer or authorized representatives
of the Contracting Officer or the Department of Labor. The Contractor or
subcontractor shall permit the Contracting Officer or representatives of
the Contracting Officer or the Department of Labor to interview
employees during working hours on the job. If the Contractor or
subcontractor fails to submit required records or to make them
available, the Contracting Officer may, after written notice to the
Contractor, take such action as may be necessary to cause the suspension
of any further payment. Furthermore, failure to submit the required
records upon request or to make such records available may be grounds
for debarment action pursuant to 29 CFR 5.12.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for construction which are
expected to exceed \$2,000.

**3.6.2-21** **Apprentices, Trainees, and Helpers** (April 1996)

\(a\) Apprentices. Apprentices will be permitted to work at less than
the predetermined rate for the work they performed when they are
employed pursuant to and individually registered in a bona fide
apprenticeship program registered with the U.S. Department of Labor,
Employment and Training Administration, Bureau of Apprenticeship and
Training, or with a State Apprenticeship Agency recognized by the
Bureau, or if a person is employed in his or her first 90 days of
probationary employment as an apprentice in such an apprenticeship
program, who is not individually registered in the program, but who has
been certified by the Bureau of Apprenticeship and Training or a State
Apprenticeship Agency (where appropriate) to be eligible for
probationary employment as an apprentice. The allowable ratio of
apprentices to journeymen on the job site in any craft classification
shall not be greater than the rate permitted to the Contractor as to the
entire work force under the registered program. Any worker listed on a
payroll at an apprentice wage rate, who is not registered or otherwise
employed as stated in this paragraph, shall be paid not less than the
applicable wage determination for the classification of work actually
performed. In addition, any apprentice performing work on the job site
in excess of the ratio permitted under the registered program shall be
paid not less than the applicable wage rate on the wage determination
for the work actually performed. Where a contractor is performing
construction on a project in a locality other than that in which its
program is registered, the ratios and wage rates (expressed in
percentages of the journeyman\'s hourly rate) specified in the
Contractor\'s or subcontractor\'s registered program shall be observed.
Every apprentice must be paid at not less than the rate specified in the
registered program for the apprentice\'s level of progress, expressed
as; a percentage of the journeyman hourly rate specified in the
applicable wage determination. Apprentices shall be paid fringe benefits
in accordance with the provisions of the apprenticeship program. If the
apprenticeship program does not specify fringe benefits, apprentices
must be paid the full amount of fringe benefits listed on the wage
determination for the applicable classification. If the DOL determines
that a different practice prevails for the applicable apprentice
classification, fringes shall be paid in accordance with that
determination. In the event the Bureau of Apprenticeship and Training,
or a State Apprenticeship Agency recognized by the Bureau, withdraws
approval of an apprenticeship program, the Contractor will no longer be
permitted to utilize apprentices at less than the applicable
predetermined rate for the work performed until an acceptable program is
approved.

\(b\) Trainees. Except as provided in 29 CFR 5.16, trainees will not be
permitted to work at less than the predetermined rate for-the work
performed unless they are employed pursuant to and individually
registered in a program which has received prior approval, evidenced by
formal certification by the U.S. Department of Labor, Employment and
Training Administration. The ratio of trainees to journeymen on the job
site shall not be greater than permitted under the plan approved by the
Employment and Training Administration. Every trainee must be paid at
not less than the rate specified in the approved program for the
trainee\'s level of progress, expressed as a percentage of the
journeyman hourly rate specified in the applicable wage determination.
Trainees shall be paid fringe benefits in accordance with the provisions
of the trainee program. If the trainee program does not mention fringe
benefits, trainees shall be paid the full amount of fringe benefits
listed in the wage determination unless the Wage and Hour Division
determines that there is an apprenticeship program associated with the
corresponding journeyman wage rate in the wage determination which
provides for less than full fringe benefits for apprentices. Any
employee listed on the payroll at a trainee rate who is not registered
and participating in a training plan approved by the Employment and
Training Administration shall be paid not less than the applicable wage
rate in the wage determination for the classification of work actually
performed. In addition, any trainee performing work on the job site in
excess of the ratio permitted under the registered program shall be paid
not less than the applicable wage rate on the wage determination for the
work actually performed. In the event the Employment and Training
Administration withdraws approval of a training program, the Contractor
will no longer be permitted to utilize trainees at less than the
applicable predetermined rate for the work performed until an acceptable
program is approved.

\(c\) Helpers. Helpers will be permitted to work on a project if the
helper classification is specified on an applicable wage determination
or is approved pursuant to the conformance procedures set forth in
paragraph (b) of the Davis Bacon Act clause. The allowable ratio of
helpers to journeymen employed by the Contractor or subcontractor on the
job site shall not be greater than two helpers for every three
journeymen (in other words, not more than 40% of the total number of
journeymen and helpers in each contractor\'s, or in each
subcontractor\'s own workforce employed on the job site). Any worker
listed on a payroll at a helper wage rate, who is not a helper as
defined in 29 CFR 5.2(n)(4), shall be paid not less than the applicable
wage rate on the wage determination for the classification of work
actually performed. In addition, any helper performing work on The job
site in excess of the ratio permitted shall be paid not less than the
applicable journeymen\'s (or laborer\'s, where appropriate) wage rate on
the wage determination for the work actually performed.

\(d\) Equal employment opportunity. The utilization of apprentices,
trainees, helpers and journeymen under this clause shall be in
conformity with the equal employment opportunity requirements of
Executive Order 11246 and 29 CFR Part 30.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for construction which are
expected to exceed \$2,000.

**3.6.2-22** **Subcontracts (Labor Standards)** (April 1996)

\(a\) The Contractor or subcontractor shall include in any subcontracts
the clauses entitled \"Davis-Bacon Act,\" \"Apprentices ,Trainees and
Helpers,\" \"Payrolls and Basic Records,\" \'Withholding \-- Labor
Violations,\" \"Subcontracts (Labor Standards),\" and \"Certificate of
Eligibility.\" The Contractor shall include a clause requiring its
subcontractors to include these clauses in any lower-tier subcontracts.
The Prime Contractor shall be responsible for compliance by any
subcontractor or lower tier subcontractor with all the contract clauses
cited in this paragraph.

\(b\) Notification of subcontracting.

\(1\) Within 14 days after award of the contract, the Contractor shall
deliver to the Contracting Officer a completed Statement and
Acknowledgment Form (SF 1413) for each subcontract, including the
subcontractor\'s signed and dated acknowledgment that the clauses set
forth in paragraph (a) of this clause have been included in the
subcontract.

\(2\) Within 14 days after the award of any subsequently awarded
subcontract the Contractor shall deliver to the Contracting Officer an
updated completed SF 1413 for such additional subcontract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for construction which are
expected to exceed \$2,000.

**3.6.2-23** **Certification of Eligibility** (April 1996)

\(a\) By entering into this contract, the Contractor certifies that
neither it (nor he or she) nor any person or firm who has an interest in
the Contractor\'s firm is a person or firm ineligible to be awarded
Government contracts by virtue of section 3(a) of the Davis-Bacon Act or
29 CFR 5.12(a)(1)

\(b\) No part of this contract shall be subcontracted to any person or
firm ineligible for award of a Government contract by virtue of section
3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1).

\(c\) The penalty for making false statements is prescribed in the U.S.
Criminal Code, 18 U.S.C. 1001.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for construction which are
expected to exceed \$2,000.

**3.6.2-24** **Affirmative Action Compliance Requirements for
Construction** (November 1997)

\(a\) Definitions.

\(1\) \"Employer identification number,\" as used in this clause, means
the Federal Social Security number used on the employer\'s quarterly
federal tax return, U.S. Treasury Department Form 941.

\(2\) \"Minority,\" as used in this clause, means

\(i\) Black (all persons having origins in any of the black African
racial groups not of Hispanic origin);

\(ii\) Hispanic (all persons of Mexican, Puerto Rican, Cuban, Central or
South American, or other Spanish culture or origin, regardless of race);

\(iii\) Asian and Pacific Islander (all persons having origins in any of
the original peoples of the Far East, Southeast Asia, the Indian
Subcontinent, or the Pacific Islands); and

\(iv\) American Indian or Alaskan Native (all persons having origins in
any of the original peoples of North America and maintaining
identifiable tribal affiliations through membership and participation or
community identification).

\(b\) If the Contractor, or a subcontractor at any tier, subcontracts a
portion of the work involving any construction trade, each such
subcontract in excess of \$10,000 shall include this clause, including
the goals for minority and female participation stated herein.

\(c\) The goals for minority and female participation, expressed in
percentage terms for the Contractor\'s aggregate work force in each
trade on all construction work in the covered area, are as follows:

Goals for minority participation:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Goals for female participation:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[Contracting Officer insert goals\]

Compliance with the goals will be measured against the total work hours
performed.

\(d\) The Contractor shall provide written notification to the Office of
Federal Contract Compliance Programs (OFCCP) area office within 10
working days following award of any construction subcontract in excess
of \$10,000 at any tier for construction work under the contract
resulting from this screening information request. The notification
shall list the:

\(1\) Name, address, and telephone number of the subcontractor,

\(2\) Employer identification number of the subcontractor;

\(3\) Estimated dollar amount of the subcontract;

\(4\) Estimated starting and completion dates of the subcontract; and

\(5\) Geographical area in which the subcontract is to be performed.

\(e\) The Contractor shall implement the affirmative action procedures
in subparagraphs (f)(1) through (7) of this clause. The goals stated in
this contract are expressed as percentages of the total hours of
employment and training of minority and female utilization that the
Contractor should reasonably be able to achieve in each construction
trade in which it has employees in the covered area. If the contractor
performs construction work in a geographical area located outside of the
covered area, it shall apply the goals established for the geographical
area where that work is actually performed. The Contractor is expected
to make substantially uniform progress toward its goals in each craft.

\(f\) The contractor shall take affirmative action steps at least as
extensive as the following:

\(1\) Ensure a working environment free of harassment, intimidation, and
coercion at all sites, and in all facilities where the Contractor\'s
employees are assigned to work. The Contractor, if possible, will assign
two or more women to each construction project. The Contractor shall
ensure that foremen, superintendents, and other on-site supervision,
personnel are aware of and carry out the Contractor\'s obligation to
maintain such a working environment, with specific attention to minority
or female individuals working at these sites or facilities.

\(2\) Immediately notify the OFCCP area office when the union or unions,
with which the Contractor has a collective bargaining agreement, has not
referred back to the Contractor a minority or woman sent by the
Contractor, or when the Contractor has other information that the union
referral process has impeded the Contractor\'s efforts to meet its
obligations.

\(3\) Develop on-the-job training opportunities and/or participate in
training programs for the area that expressly include minorities and
women, including upgrading programs and apprenticeship and trainee
programs relevant to the Contractor\'s employment needs, especially
those programs funded or approved by the Department of Labor. The
Contractor shall provide notice of these programs to the sources
compiled under subparagraph (f)(2) above.

\(4\) Review, at least annually, the Contractor\'s equal employment
policy and affirmative action obligations with all employees having
responsibility for hiring, assignment, layoff, termination, or other
employment decisions. Conduct reviews of this policy with all on-site
supervision, personnel prior to initiation of construction work at a job
site. A written record shall be made and maintained identifying the time
and place of these meetings, persons attending, subject matter
discussed, and disposition of the subject matter.

\(5\) Disseminate the Contractor\'s equal employment policy externally
by including it in any advertising in the news media, specifically
including minority and female news media. Provide written notification
to, and discuss this policy with, other Contractors and subcontractors
with which the Contractor does or anticipates doing business.

\(6\) Conduct, at least annually, an inventory and evaluation at least
of all minority and female personnel for promotional opportunities.
Encourage these employees to seek or to prepare for, through appropriate
training, etc., opportunities for promotion.

\(7\) Maintain a record of solicitations for subcontracts for minority
and female construction contractors and suppliers, including circulation
of solicitations to minority and -female contractor associations and
other business associations.

\(g\) The Contractor is encouraged to participate in voluntary
associations that may assist in fulfilling one or more of the
affirmative action obligations contained in subparagraphs (f)(1) through
(7). The efforts of a contractor association, joint contractor-union,
contractor-community, or similar group of which the contractor is a
member and participant, may be useful in achieving one or more of its
obligations under subparagraphs (f)(1) through (7).

\(h\) A single goal for minorities and a separate single goal for women
shall be established. The Contractor is required to provide equal
employment opportunity and to take affirmative action for all minority
groups, both male and female, and all women, both minority and
non-minority. Consequently, the Contractor may be in violation of
Executive Order 11246, as amended, if a particular group is employed in
a substantially disparate manner.

\(i\) The contractor shall not use goals or affirmative action standards
to discriminate against any person because of race, color, religion,
sex, or national origin.

\(j\) The Contractor shall not enter into any subcontract with any
person or firm debarred from Government contracts under Executive Order
11246, as amended.

\(k\) The Contractor shall carry out such sanctions and penalties for
violation of this clause and of the Nondiscrimination and Affirmative
Action clause, including suspension, termination, and cancellation of
existing subcontracts, as may be imposed or ordered under Executive
Order 11246, as amended, and its implementing regulations, by the OFCCP.
Any failure to carry out these sanctions and penalties as ordered shall
be a violation of this clause and Executive Order 11246, as amended.

\(l\) Nothing contained herein shall be construed as a limitation upon
the application of other laws that establish different standards of
compliance.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for construction which are
expected to exceed \$10,000 and include clause 3.6.2-9. The Contracting
Officer should insert appropriate information in the clause.

**3.6.2-28** **Service Contract Act of 1965, as Amended** (April 1996)

\(a\) Definitions.

\(1\) Act, as used in this clause, means the Service Contract Act of
1965, as amended (41 U.S.C. 351, et seq.).

\(2\) Contractor, as used in this clause or in any subcontract, shall be
deemed to refer to the subcontractor, except in the term Government
Prime Contractor.

\(3\) Service employee, as used in this clause, means any person engaged
in the performance of this contract other than any person employed in a
bona fide executive, administrative, or professional capacity, as these
terms are defined in Part 541 of title 29, Code of Federal Regulations,
as revised. It includes all such persons regardless of any contractual
relationship that may be alleged to exist between a Contractor or
subcontractor and such persons.

\(b\) Applicability. This contract is subject to the following
provisions and to all other applicable provisions of the Act and
regulations of the Secretary of Labor (29 CFR Part 4). This clause does
not apply to contracts or subcontracts administratively exempted by the
Secretary of Labor or exempted by 41 U.S.C. 356, as interpreted in
subpart C of 29 CFR Part 4.

\(c\) Compensation.

\(1\) Each service employee employed in the performance of this contract
by the Contractor or any subcontractor shall be paid not less than the
minimum monetary wages and shall be furnished fringe benefits in
accordance with the wages and fringe benefits determined by the
Secretary of Labor, or authorized representative, as specified in any
wage determination attached to this contract.

\(2\) (i) If a wage determination is attached to this contract, the
Contractor shall classify any class of service employee which is not
listed therein and which is to be employed under the contract (i.e., the
work to be performed is not performed by any classification listed in
the wage determination) so as to provide a reasonable relationship
(i.e., appropriate level of skill comparison) between such unlisted
classifications and the classifications listed in the wage
determination. Such conformed class of employees shall be paid the
monetary wages and furnished the fringe benefits as are determined
pursuant to the procedures in this paragraph (c).

\(ii\) This conforming procedure shall be initiated by the Contractor
prior to the performance of contract work by the unlisted class of
employee. The Contractor shall submit Standard Form (SF) 1444, Request
for Authorization of Additional Classification and Rate, to the
Contracting Officer no later than 30 days after the unlisted class of
employee performs any contract work. The Contracting Officer shall
review the proposed classification and rate and promptly submit the
completed SF 1444 (which must include information regarding the
agreement or disagreement of the employees\' authorized representatives
or the employees themselves together with the agency recommendation),
and all pertinent information to the Wage and Hour Division, Employment
Standards Administration U.S. Department of Labor. The Wage and Hour
Division will approve, modify, or disapprove the action or render a
final determination in the event of disagreement within 30 days of
receipt or will notify the Contracting Officer within 30 days of receipt
that additional time is necessary.

\(iii\) The final determination of the conformance action by the Wage
and Hour Division shall be transmitted to the Contracting Officer who
shall promptly notify the Contractor of the action taken. Each affected
employee shall be furnished by the Contractor with a written copy of
such determination or it shall be posted as a part of the wage
determination.

\(iv\) (A) The process of establishing wage and fringe benefit rates
that bear a reasonable relationship to those listed in a wage
determination cannot be reduced to any single formula. The approach used
may vary from wage determination to wage determination depending on the
circumstances. Standard wage and salary administration practices which
rank various job classifications by pay grade pursuant to point schemes
or other job factors may, for example, be relied upon. Guidance may also
be obtained from the way different jobs are rated under Federal pay
systems (Federal Wage Board Pay System and the General Schedule) or from
other wage determinations issued in the same locality. Basic to the
establishment of any conformable wage rate(s) is the concept that a pay
relationship should be maintained between job classifications based on
the skill required and the duties performed.

\(B\) In the case of a contract modification, an exercise of an option,
or extension of an existing contract, or in any other case where a
Contractor succeeds a contract under which the classification in
question was previously conformed pursuant to paragraph (c) of this
clause, a new conformed wage rate and fringe benefits may be assigned to
the conformed classification by indexing (i.e., adjusting) the previous
conformed rate and fringe benefits by an amount equal to the average
(mean) percentage increase (or decrease, where appropriate) between the
wages and fringe benefits specified for all classifications to be used
on the contract which are listed in the current wage determination, and
those specified for the corresponding classifications in the previously
applicable wage determination. Where conforming actions are accomplished
in accordance with this paragraph prior to the performance of contract
work by the unlisted class of employees, the Contractor shall advise the
Contracting Officer of the action taken but the other procedures in
subdivision (c)(2)(ii) of this clause need not be followed.

\(C\) No employee engaged in performing work on this contract shall in
any event be paid less than the currently applicable minimum wage
specified under section 6(a)(1) of the Fair Labor Standards Act of 1938,
as amended.

\(v\) The wage rate and fringe benefits finally determined under this
subparagraph (c)(2) of this clause shall be paid to all employees
performing in the classification from the first day on which contract
work is performed by them in the classification. Failure to pay the
unlisted employees the compensation agreed upon by the interested
parties and/or finally determined by the Wage and Hour Division
retroactive to the date such class of employees commenced contract work
shall be a violation of the Act and this contract.

\(vi\) Upon discovery of failure to comply with subparagraph (c)(2) of
this clause, the Wage and Hour Division shall make a final determination
of conformed classification, wage rate, and/or fringe benefits which
shall be retroactive to the date such class or classes of employees
commenced contract work.

\(3\) Adjustment of Compensation. If the term of this contract is more
than 1 year, the minimum monetary wages and fringe benefits required to
be paid or furnished thereunder to service employees under this contract
shall be subject to adjustment after 1 year and not less often than once
every 2 years, under wage determinations issued by the Wage and Hour
Division.

\(d\) Obligation to Furnish Fringe Benefits. The Contractor or
subcontractor may discharge the obligation to furnish fringe benefits
specified in the attachment or determined under subparagraph (c)(2) of
this clause by furnishing equivalent combinations of bona fide fringe
benefits, or by making equivalent or differential cash payments, only in
accordance with subpart D of 29 CFR Part 4

\(e\) Minimum Wage. In the absence of a minimum wage attachment for this
contract, neither the Contractor nor any subcontractor under this
contract shall pay any person performing work under this contract
(regardless of whether the person is a service employee) less than the
minimum wage specified by section 6(a)(1) of the Fair Labor Standards
Act of 1938. Nothing in this clause shall relieve the Contractor or any
subcontractor of any other obligation under law or contract for payment
of a higher wage to any employee.

\(f\) Successor Contracts. If this contract succeeds a contract subject
to the Act under which substantially the same services were furnished in
the same locality and service employees were paid wages and fringe
benefits provided for in a collective bargaining agreement, in the
absence of the minimum wage attachment for this contract setting forth
such collectively bargained wage rates and fringe benefits, neither the
Contractor nor any subcontractor under this contract shall pay any
service employee performing any of the contract work (regardless of
whether or not such employee was employed under the predecessor
contract), less than the wages and fringe benefits provided for in such
collective bargaining agreement, to which such employee would have been
entitled if employed under the predecessor contract, including accrued
wages and fringe benefits and any prospective increases in wages and
fringe benefits provided for under such agreement. No Contractor or
subcontractor under this contract may be relieved of the foregoing
obligation unless the limitations of 29 CFR 4.1b(b) apply or unless the
Secretary of Labor or the Secretary\'s authorized representative finds,
after a hearing as provided in 29 CFR 4.10 that the wages and/or fringe
benefits provided for in such agreement are substantially at variance
with those which prevail for services of a character similar in the
locality, or determines, as provided in 29 CFR 4.11, that the collective
bargaining agreement applicable to service employees employed under the
predecessor contract was not entered into as a result of arm\'s length
negotiations. Where it is found in accordance with the review procedures
provided in 29 CFR 4.10 and/or 4.11 and Parts 6 and 8 that some or all
of the wages and/or fringe benefits contained in a predecessor
Contractor\'s collective bargaining agreement are substantially at
variance with those which prevail for services of a character similar in
the locality, and/or that the collective bargaining agreement applicable
to service employees employed under the predecessor contract was not
entered into as a result of arm\'s length negotiations, the Department
will issue a new or revised wage determination setting forth the
applicable wage rates and fringe benefits. Such determination shall be
made part of the contract or subcontract, in accordance with the
decision of the Administrator, the Administrative Law Judge, or the
Board of Service Contract Appeals, as the case may be, irrespective of
whether such issuance occurs prior to or after the award of a contract
or subcontract (53 Comp. Gen. 401 (1973)). In the case of a wage
determination issued solely as a result of a finding of substantial
variance, such determination shall be effective as of the date of the
final administrative decision.

\(g\) Notification to Employees. The Contractor and any subcontractor
under this contract shall notify each service employee commencing work
on this contract of the minimum monetary wage and any fringe benefits
required to be paid pursuant to this contract, or shall post the wage
determination attached to this contract. The poster provided by the
Department of Labor (Publication WH 1313) shall be posted in a prominent
and accessible place at the worksite. Failure to comply with this
requirement is a violation of section 2(a)(4) of the Act and of this
contract.

\(h\) Safe and Sanitary Working Conditions. The Contractor or
subcontractor shall not permit any part of the services called for by
this contract to be performed in buildings or surroundings or under
working conditions provided by or under the control or supervision of
the Contractor or subcontractor which are unsanitary, hazardous, or
dangerous to the health or safety of the service employees. The
Contractor or subcontractor shall comply with the safety and health
standards applied under 29 CFR Part 1925.

\(i\) Records.

\(1\) The Contractor and each subcontractor performing work subject to
the Act shall make and maintain for 3 years from the completion of the
work, and make them available for inspection and transcription by
authorized representatives of the Wage and Hour Division, Employment
Standards Administration, a record of the following:

\(i\) For each employee subject to the Act-

\(A\) Name and address and social security number;

\(B\) Correct work classification or classifications, rate or rates of
monetary wages paid and fringe benefits provided, rate or rates of
payments in lieu of fringe benefits, and total daily and weekly
compensation;

\(C\) Daily and weekly hours worked by each employee; and

\(D\) Any deductions, rebates, or refunds from the total daily or weekly
compensation of each employee.

\(ii\) For those classes of service employees not included in any wage
determination attached to this contract, wage rates or fringe benefits
determined by the interested parties or by the Administrator or
authorized representative under the terms of paragraph (c) of this
clause. A copy of the report required by subdivision (c)(2)(ii) of this
clause will fulfill this requirement.

\(iii\) Any list of the predecessor Contractor\'s employees which had
been furnished to the Contractor as prescribed by paragraph (n) of this
clause.

\(2\) The Contractor shall also make available a copy of this contract
for inspection or transcription by authorized representatives of the
Wage and Hour Division.

\(3\) Failure to make and maintain or to make available these records
for inspection and transcription shall be a violation of the regulations
and this contract, and in the case of failure to produce these records,
the Contracting Officer, upon direction of the Department of Labor and
notification to the Contractor, shall take action to cause suspension of
any further payment or advance of funds until the violation ceases.

\(4\) The Contractor shall permit authorized representatives of the Wage
and Hour Division to conduct interviews with employees at the worksite
during normal working hours.

\(j\) Pay Periods. The Contractor shall unconditionally pay to each
employee subject to the Act all wages due free and clear and without
subsequent deduction (except as otherwise provided by law or
Regulations, 29 CFR Part 4), rebate, or kickback on any account. These
payments shall be made no later than one pay period following the end of
the regular pay period in which the wages were earned or accrued. A pay
period under this Act may not be of any duration longer than
semi-monthly.

\(k\) Withholding of Payments and Termination of Contract. The
Contracting Officer shall withhold or cause to be withheld from the
Government Prime Contractor under this or any other Government contract
with the Prime Contractor such sums as an appropriate official of the
Department of Labor requests or such sums as the Contracting Officer
decides may be necessary to pay underpaid employees employed by the
Contractor or subcontractor. In the event of failure to pay any
employees subject to the Act all or part of the wages or fringe benefits
due under the Act, the Contracting Officer may, after authorization or
by direction of the Department of Labor and written notification to the
Contractor, take action to cause suspension of any further payment or
advance of funds until such violations have ceased. Additionally, any
failure to comply with the requirements of this clause may be grounds
for termination of the right to proceed with the contract work. In such
event, the Government may enter into other contracts or arrangements for
completion of the work, charging the Contractor in default with any
additional cost.

\(l\) Subcontracts. The Contractor agrees to insert this clause in all
subcontracts subject to the Act.

\(m\) Collective Bargaining Agreements Applicable to Service Employees.
If wages to be paid or fringe benefits to be furnished any service
employees employed by the Government Prime Contractor or any
subcontractor under the contract are provided for in a collective
bargaining agreement which is or will be effective during any period in
which the contract is being performed, the Government Prime Contractor
shall report such fact to the Contracting Officer, together with full
information as to the application and accrual of such wages and fringe
benefits, including any prospective increases, to service employees
engaged in work on the contract, and a copy of the collective bargaining
agreement. Such report shall be made upon commencing performance of the
contract, in the case of collective bargaining agreements effective at
such time, and in the case of such agreements or provisions or
amendments thereof effective at a later time during the period of
contract performance such agreements shall be reported promptly after
negotiation thereof.

\(n\) Seniority List. Not less than 10 days prior to completion of any
contract being performed at a Federal facility where service employees
may be retained in the performance of the succeeding contract and
subject to a wage determination which contains vacation or other benefit
provisions based upon length of service with a Contractor (predecessor)
or successor (29 CFR 4.173), the incumbent Prime Contractor shall
furnish the Contracting Officer a certified list of the names, of all
service employees on the Contractor\'s or subcontractor\'s payroll
during the last month of contract performance. Such list shall also
contain anniversary dates of employment on the contract either with the
current or predecessor Contractors of each such service employee. The
Contracting Officer shall turn over such list to the successor
Contractor at the commencement of the succeeding contract.

\(o\) Rulings and Interpretations. Rulings and interpretations of the
Act are contained in Regulations, 29 CFR Part 4.

\(p\) Contractor\'s Certification.

\(1\) By entering into this contract, the Contractor (and officials
thereof) certifies that neither it (nor he or she) nor any person or
firm who has a substantial interest in the Contractor\'s firm is a
person or firm ineligible to be awarded Government contracts by virtue
of the sanctions imposed under section 5 of the Act.

\(2\) No part of this contract shall be subcontracted to any person or
firm ineligible for award of a Government contract under section 5 of
the Act.

\(3\) The penalty for making false statements is prescribed in the U.S.
Criminal Code, 18 U.S.C. 1001.

\(q\) Variations, Tolerances, and Exemptions Involving Employment.
Notwithstanding any of the provisions in paragraphs (b) through (o) of
this clause, the following employees may be employed in accordance with
the following variations, tolerances, and exemptions, which the
Secretary of Labor, pursuant to section 4(b) of the Act prior to its
amendment by P. L. 92-473, found to be necessary and proper in the
public interest or to avoid serious impairment of the conduct of
Government business.

\(1\) Apprentices, student-learners, and workers whose earning capacity
is impaired by age, physical or mental deficiency or injury may be
employed at wages lower than the minimum wages otherwise required by
section 2(a)(1) or 2(b)(1) of the Act without diminishing any fringe
benefits or cash payments in lieu thereof required under section 2(a)(2)
of the Act, in accordance with the conditions and procedures prescribed
for the employment of apprentices, student-learners, handicapped
persons, and handicapped clients of sheltered workshops under section 14
of the Fair Labor Standards Act of 1938, in the regulations issued by
the Administrator (29 CFR Parts 520, 521, 524, and 525).

\(2\) The Administrator will issue certificates under the Act for the
employment of apprentices, student-learners, handicapped persons, or
handicapped clients of sheltered workshops not subject to the Fair Labor
Standards Act of 1938, or subject to different minimum rates of pay
under the two acts, authorizing appropriate rates of minimum wages (but
without changing requirements concerning fringe benefits or
supplementary cash payments in lieu thereof), applying procedures
prescribed by the applicable regulations issued under the Fair Labor
Standards Act of 1938 (29 CFR Parts 520, 521, 524, and 525).

\(3\) The Administrator will also withdraw, annul, or cancel such
certificates in accordance with the regulations in 29 CFR Parts 525 and
528.

\(r\) Apprentices. Apprentices will be permitted to work at less than
the predetermined rate for the work they perform when they are employed
and individually registered in a bona fide apprenticeship program
registered with a State Apprenticeship Agency which is recognized by the
U.S. Department of Labor, or if no such recognized agency exists in a
State, under a program registered with the Bureau of Apprenticeship and
Training, Employment and Training Administration, U.S. Department of
Labor. Any employee who is not registered as an apprentice in an
approved program shall be paid the wage rate and fringe benefits
contained in the applicable wage determination for the journeyman
classification of work actually performed. The wage rates paid
apprentices shall not be less than the wage rate for their level of
progress set forth in the registered program, expressed as the
appropriate percentage of the journeyman\'s rate contained in the
applicable wage determination. The allowable ratio of apprentices to
journeymen employed on the contract work in any craft classification
shall not be greater than the ratio permitted to the Contractor as to
his entire work force under the registered program.

\(s\) Tips. An employee engaged in an occupation in which the employee
customarily and regularly receives more than \$30 a month in tips may
have the amount of these tips credited by the employer against the
minimum wage required by section 2(a)(1) or section 2(b)(1) of the Act,
in accordance with section 3(m) of the Fair Labor Standards Act and
Regulations 29 CFR part 531. However, the amount of credit shall not
exceed \$1.34 per hour beginning January l, 1981. To use this provision-

\(1\) The employer must inform tipped employees about this tip credit
allowance before the credit is utilized;

\(2\) The employees must be allowed to retain all tips (individually or
through a pooling arrangement and regardless of whether the employer
elects to take a credit for tips received);

\(3\) The employer must be able to show by records that the employee
receives at least the applicable Service Contract Act minimum wage
through the combination of direct wages and tip credit;

\(4\) The use of such tip credit must have been permitted under any
predecessor collective bargaining agreement applicable by virtue of
section 4(c) of the Act.

\(t\) Disputes Concerning Labor Standards. The U.S. Department of Labor
has set forth in 29 CFR Parts 4, 6, and 8 procedures for resolving
disputes concerning labor standards requirements. Such disputes shall be
resolved in accordance with those procedures and not the \"Disputes\"
clause of this contract. Disputes within the meaning of this clause
include disputes between the Contractor (or any of its subcontractors)
and the contracting agency, the U.S. Department of Labor, or the
employees or their representatives.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 41 U.S.C. 351)
for services if the contract is subject to the Act and is expected to
exceed \$2,500.

**3.6.2-29** **Statement of Equivalent Rates for Federal Hires** (April
1996)

In compliance with the Service Contract Act of 1965, as amended, and the
regulations of the Secretary of Labor (29 CFR Part 4), this clause
identifies the classes of service employees expected to be employed
under the contract and states the wages and fringe benefits payable to
each if they were employed by the contracting agency subject to the
provisions of 5 U.S.C. 5341 or 5332. This Statement is for Information
Only: It Is Not a Wage Determination

Employee class Monetary Wage-Fringe Benefits

\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for services if the contract is
subject to the Act and is expected to exceed \$2,500 and equivalent
rates for federal hires exist or can be reasonably estimated. The
Contracting Officer should insert appropriate information in the clause.

**3.6.2-30** **Fair Labor Standards Act and Service Contract Act\--Price
Adjustment (Multiple Year and Option Contracts)** (April 1996)

\(a\) This clause applies to both contracts subject to area prevailing
wage determinations and contracts subject to collective bargaining
agreements.

\(b\) The Contractor warrants that the prices in this contract do not
include any allowance for any contingency to cover increased costs for
which adjustment is provided under this clause.

\(c\) The wage determination, issued under the Service Contract Act of
1965, as

amended, (41 U.S.C. 351, et seq.), by the Administrator, Wage and Hour
Division, Employment Standards Administration, U.S. Department of Labor,
current on the anniversary date of a multiple year contract or the
beginning of each renewal option period, shall apply to this contract.
If no such determination has been made applicable to this contract, then
the Federal minimum wage as established by section 6(a)(1) of the Fair
Labor Standards Act of 1938, as amended, (29 U.S.C. 206) current on the
anniversary date of a multiple year contract or the beginning of each
renewal option period, shall apply to this contract.

\(d\) The contract price or contract unit price labor rates will be
adjusted to reflect the Contractor\'s actual increase or decrease in
applicable wages and fringe benefits to the extent that the increase is
made to comply with or the decrease is voluntarily made by the
Contractor as a result of:

\(1\) The Department of Labor wage determination applicable on the
anniversary date of the multiple year contract, or at the beginning of
the renewal option period. For example, the prior year wage
determination required a minimum wage rate of \$4.00 per hour. The
Contractor chose to pay \$4.10. The new wage determination increases the
minimum rate to \$4.50 per hour. Even if the Contractor voluntarily
increases the rate to \$4.75 per hour, the allowable price adjustment is
\$.40 per hour;

\(2\) An increased or decreased wage determination otherwise applied to
the contract by operation of law; or

\(3\) An amendment to the Fair Labor Standards Act of l938 that is
enacted after award of this contract, affects the minimum wage, and
becomes applicable to this contract under law.

\(e\) Any adjustment will be limited to increases or decreases in wages
and fringe benefits as described in paragraph (c) of this clause, and
the accompanying increases or decreases in social security and
unemployment taxes and workers\' compensation insurance, but shall not
otherwise include any amount for general and administrative costs,
overhead, or profit.

\(f\) The Contractor shall notify the Contracting Officer of any
increase claimed under this clause within 30 days after receiving a new
wage determination unless this notification period is extended in
writing by the Contracting Officer. The Contractor shall promptly notify
the Contracting Officer of any decrease under this clause, but nothing
in the clause shall preclude the Government from asserting a claim
within the period permitted by law. The notice shall contain a statement
of the amount claimed and any relevant supporting data, including
payroll records, that the Contracting Officer may reasonably require.
Upon agreement of the parties, the contract price or contract unit price
labor rates shall be modified in writing. The Contractor shall continue
performance pending agreement on or determination of any such adjustment
and its effective date.

\(g\) The Contracting Officer or an authorized representative shall have
access to and the right to examine any directly pertinent books,
documents, papers and records of the Contractor until the expiration of
3 years after final payment under the contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for fixed price service contracts
with multiple year options, and will include clause 3.6.2-28.

**3.6.2-31** **Fair Labor Standards Act and Service Contract Act-Price
Adjustment** (April 1996)

\(a\) This clause applies to both contracts subject to area prevailing
wage determinations and contracts subject to Contractor collective
bargaining agreements.

\(b\) The Contractor warrants that the prices in this contract do not
include any allowance for any contingency to cover increased costs for
which adjustment is provided under this clause.

\(c\) The contract price or contract unit price labor rates will be
adjusted to reflect increases or decreases by the Contractor in wages
and fringe benefits to the extent that these increases or decreases are
made to comply with-

\(1\) An increased or decreased wage determination applied to this
contract by operation of law; or

\(2\) An amendment to the Fair Labor Standards Act of 1938 that is
enacted subsequent to award of this contract, affects the minimum wage,
and becomes applicable to this contract under law.

\(d\) Any such adjustment will be limited to increases or decreases in
wages and fringe benefits as described in paragraph (b) of this clause,
and to the accompanying increases or decreases in social security and
unemployment taxes and workers\' compensation insurance; it shall not
otherwise include any amount for general and administrative costs,
overhead, or profit.

\(e\) The Contractor shall notify the Contracting Officer of any
increase claimed under this clause within 30 days after the effective
date of the wage change, unless this period is extended by the
Contracting Officer in writing. The Contractor shall promptly notify the
Contracting Officer of any decrease under this clause, but nothing in
the clause shall preclude the Government from asserting a claim within
the period permitted by law. The notice shall contain a statement of the
amount claimed and any relevant supporting data that the Contracting
Officer may reasonably require. Upon agreement of the parties, the
contract price or contract unit price labor rates shall be modified in
writing. The Contractor shall continue performance pending agreement on
or determination of any such adjustment and its effective date.

\(f\) The Contracting Officer or an authorized representative shall,
until the expiration of 3 years after final payment under the contract,
have access to and the right to examine any directly pertinent books,
documents, papers, and records of the Contractor.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for fixed price service contracts
which are not multiple year or contain options, and will include clause
3.6.2-28.

**3.6.2-32** **SCA Minimum Wages and Fringe Benefits (Applicable to
Successor Contract Pursuant to Predecessor Contractor Collective
Bargaining Agreements (CBA))** (April 1996)

An SCA wage determination applicable to this work has been requested
from the U.S. Department of Labor. If an SCA wage determination is not
incorporated herein, the offerors shall consider the economic terms of
the collective bargaining agreement (CBA) between the incumbent
Contractor \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ and the
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (union). If the economic terms of the
collective bargaining agreement or the collective bargaining agreement
itself is not attached to the solicitation, copies can be obtained from
the Contracting Officer. Pursuant to Department of Labor Regulation, 29
CFR 4.1b and paragraph (g) of the clause \"Service Contract Act of 1965,
As Amended,\" the economic terms of that agreement will apply to the
contract resulting from thisScreening Information Request (SIR),
notwithstanding the absence of a wage determination reflecting such
terms, unless it is determined that the agreement was not the result of
arm\'s length negotiations or that after a hearing pursuant to section
4(c) of the Act, the economic terms of the agreement are substantially
at variance with the wages prevailing in the area.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for services if the successor
contract will be for substantially the same services in the same
locality, the incumbent contractor has a collective bargaining
agreement, and a wage determination has been requested, but not yet
received. The Contracting Officer should insert appropriate information
in the clause.

**3.6.2-33** **Exemption from Application of Service Contract Act
Provisions (for Contracts for Maintenance, Calibration, and/or Repair of
Certain ADP, Scientific and Medical, and/or Office and Business
Equipment-Contractor Certification)** (April 1996)

\(a\) The following certification shall be checked:

Certification

The offeror certifies ( )/does not certify ( ) that: (1) The items of
equipment to be serviced under this contract are commercial items which
are used regularly for other than Government purposes, and are sold or
traded by the Contractor in substantial quantities to the general public
in the course of normal business operations; (2) The contract services
are furnished at prices which are, or are based on, established catalog
or market prices for the maintenance, calibration, and/or repair of
certain ADP, scientific and medical and/or office and business
equipment. An \"established catalog price\" is a price (including
discount price) recorded in a catalog, price list, schedule, or other
verifiable and established record that is regularly maintained by the
manufacturer or the Contractor and is either published or otherwise
available for inspection by customers. An \"established market price\"
is a current price, established in the course of ordinary and usual
trade between buyers and sellers free to bargain, which can be
substantiated by data from sources independent of the manufacturer or
Contractor; and (3) The Contractor utilizes the same compensation (wage
and fringe benefits) plan for all service employees performing work
under the contract as the Contractor uses for equivalent employees
servicing the same equipment of commercial customers.

\(b\) If a negative certification is made and a Service Contract Act
wage determination is not attached to the solicitation, the Contractor
shall notify the Contracting Officer as soon as possible.

\(c\) Failure to execute the certification in paragraph (a) of this
clause or to contact the Contracting Officer as required in paragraph
(b) of this clause may render the bid or offer nonresponsive.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s for maintenance, calibration and/or repair of
ADP, scientific and medical, and office and business, equipment if the
Contracting Officer determines the resultant contract may be exempt from
the Service Contract Act based on the commercial nature of the services
to be provided.

**3.6.2-34** **Service Contract Act\--Place of Performance Unknown**
(April 1996)

\(a\) This contract is subject to the Service Contract Act, and the
place of performance was unknown when the Screening Information Request
(SIR) was issued. In addition to places or areas identified in wage
determinations, if any, attached to theSIR, wage determinations have
also been requested for the following: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
(insert places or areas). The Contracting Officer will request wage
determinations for additional places or areas of performance if asked to
do so in writing by \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (insert time and
date).

\(b\) Offerors who intend to perform in a place or area of performance
for which a wage determination has not been attached or requested may
nevertheless submitoffers. However, a wage determination shall be
requested and incorporated in the resultant contract retroactive to the
date of contract award, and there shall be no adjustment in the contract
price.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for services when the Contracting
Officer believes that there may be offerors interested in performing in
unidentified places or areas. The Contracting Officer should insert
appropriate information in the clause.

**3.6.2-35** **Prevention of Sexual Harassment** (August 1998)

\(a\) \'Sexual Harassment\', as used in this clause, means unwelcome
sexual advances, requests for sexual favors, or other verbal or physical
conduct of a sexual nature when (i) submission to such conduct is made
either explicitly or implicitly a term or condition of an individual\'s
employment; (ii) submission to or rejection of such conduct by an
individual is used as the basis for employment decisions affecting such
individuals; or (iii) such conduct has the purpose or effect of
unreasonably interfering with an individual\'s work performance, or
creating an intimidating, hostile, or offensive working environment.

\(b\) It is FAA policy that sexual harassment will not be tolerated or
condoned in the FAA workplace. It is also FAA\'s intent to effectively
address inappropriate conduct before it rises to the levels proscribed
by the Equal Employment Opportunity Commission as \"sexual harassment\".

\(c\) The Contractor agrees to support this policy in performing work
under this contract, and that sexual harassment in any form will not be
tolerated in the FAA workplace.

\(d\) If the Contractor, or a subcontractor of any tier, subcontracts
any portion of the work under this contract, each such subcontract shall
include this provision.

\(e\) The Contractor shall take whatever corrective action it deems
necessary to promptly address sexual harassment in the FAA workplace, or
on an FAA site. The Contractor agrees to immediately provide the
Contracting Officer all relevant information pertaining to any such
conduct, and notify him/her of its planned action.

\(f\) The Contracting Officer may require the Contractor to remove
employee(s) from the FAA worksite that the Contracting Officer deems to
have engaged in sexual harassment.

\(g\) Any FAA action under subsection (f) above does not relieve the
Contractor of its liability or obligations under the Civil Rights Act of
1964, or any other applicable law or regulation.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts that will be performed at an FAA
work location.

**3.6.2-36** **RESERVED** (April 2002)

.

PRESCRIPTION:

.

**3.6.3-1** **Clean Air and Water Certification** (April 2000)

The Offerors signature on this contract constitutes an affirmative
attestation that:

\(a\) Any facility to be used in the performance of this contract is not
listed on the Environmental Protection Agency (EPA) List of Violating
Facilities;

\(b\) The Offeror will immediately notify the Contracting Officer, of
the receipt of any communication from the Administrator, or a designee,
of the EPA, indicating that any facility that the Offeror uses for the
performance of the contract is under consideration to be listed on the
EPA List of Violating Facilities; and

\(c\) The Offeror will include a certification substantially the same as
this certification, including this paragraph (c), in every nonexempt
subcontract.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s (in accordance with 42 U.S.C. 7401) which
includes clause

3.6.3-2.

**3.6.3-2** **Clean Air and Clean Water** (April 1996)

\(a\) Definitions:

\(1\) Air Act, as used in this clause, means the Clean Air Act (42
U.S.C. 7401 et seq.).

\(2\) Clean air standards, as used in this clause, means\--

\(i\) Any enforceable rules, regulations, guidelines, standards,
limitations, orders, controls, prohibitions, work practices, or other
requirements contained in, issued under, or otherwise adopted under the
Air Act or Executive Order 11738;

\(ii\) An applicable implementation plan as described in section 110(d)
of the Air Act (42 U.S.C. 7410(d));

\(iii\) An approved implementation procedure or plan under section
111(c) or section 111(d) of the Air Act (42 U.S.C. 7411(c) or (d)); or

\(iv\) An approved implementation procedure under section 112(d) of the
Air Act (42 U.S.C. 7412(d)).

\(3\) Clean water standards, as used in this clause, means any
enforceable limitation, control, condition, prohibition, standard, or
other requirement promulgated under the Water Act or contained in a
permit issued to a discharger by the Environmental Protection Agency
(EPA) or by a State under an approved program, as authorized by section
402 of the Water Act (33 U.S.C. 1342), or by local government to ensure
compliance with pretreatment regulations as required by section 307 of
the Water Act (33 U.S.C. 1317).

\(4\) Compliance, as used in this clause, means compliance with\--

\(i\) Clean air or water standards; or

\(ii\) A schedule or plan ordered or approved by a court of competent
jurisdiction, the Environmental Protection Agency (EPA), or an air or
water pollution control agency under the requirements of the Air Act or
Water Act and related regulations.

\(5\) Facility, as used in this clause, means any building, plant,
installation, structure, mine, vessel or other floating craft, location,
or site of operations, owned, leased, or supervised by a Contractor or
subcontractor, used in the performance of a contract or subcontract.
When a location or site of operations includes more than one building,
plant, installation, or structure, the entire location or site shall be
deemed a facility except when the Administrator, or a designee, of the
Environmental Protection Agency (EPA) determines that independent
facilities are collocated in one geographical area.

\(6\) Water Act, as used in this clause, means Clean Water Act (33
U.S.C. 1251 et seq.).

\(b\) The Contractor agrees:

\(1\) To comply with all the requirements of section 114 of the Clean
Air Act (42 U.S.C. 7414) and section 308 of the Clean Water Act (33
U.S.C. 1318) relating to inspection, monitoring, entry, reports, and
information, as well as other requirements specified in section 114 and
section 308 of the Air Act and the Water Act, and all regulations and
guidelines issued to implement those acts before the award of this
contract;

\(2\) That no portion of the work required by this prime contract will
be performed in a facility listed on the EPA List of Violating
Facilities on the date when this contract was awarded unless and until
the EPA eliminates the name of the facility from the listing;

\(3\) To use best efforts to comply with clean air standards and clean
water standards at the facility in which the contract is being
performed; and

\(4\) To insert the substance of this clause into any nonexempt
subcontract, including this subparagraph (b)(4).

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 33 U.S.C.
1251) expected to exceed \$100,000.

**3.6.3-3** **Hazardous Material Identification and Material Safety
Data** (April 1996)

\(a\) Hazardous material, as used in this clause, includes any material
defined as hazardous under the latest version of Federal Standard No.
313 (including revisions adopted during the term of the contract).

\(b\) The offeror must list any hazardous material, as defined in
paragraph (a) of this clause, to be delivered under this contract. The
hazardous material shall be properly identified and include any
applicable identification number, such as National Stock Number or
Special Item Number. This information shall also be included on the
Material Safety Data Sheet submitted under this contract.

Material (If none, insert None)
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Identification No.
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(c\) The apparently successful offeror, by acceptance of the contract,
certifies that the list in paragraph (b) of this clause is complete.
This list must be updated during performance of the contract whenever
the Contractor determines that any other material to be delivered under
this contract is hazardous.

\(d\) The apparently successful offeror agrees to submit, for each item
as required prior to award, a Material Safety Data Sheet, meeting the
requirements of 29 CFR 1910.1200(g) and the latest version of Federal
Standard No. 313, for all hazardous material identified in paragraph (b)
of this clause. Data shall be submitted in accordance with Federal
Standard No. 313, whether or not the apparently successful offeror is
the actual manufacturer of these items. Failure to submit the Material
Safety Data Sheet prior to award may result in the apparently successful
offeror being considered nonresponsible and ineligible for award.

\(e\) If, after award, there is a change in the composition of the
item(s) or a revision to Federal Standard No. 313, which renders
incomplete or inaccurate the data submitted under paragraph (d) of this
clause or the certification submitted under paragraph (c) of this
clause, the Contractor shall promptly notify the Contracting Officer and
resubmit the data.

\(f\) Neither the requirements of this clause nor any act or failure to
act by the Government shall relieve the Contractor of any responsibility
or liability for the safety of Government, Contractor, or subcontractor
personnel or property.

\(g\) Nothing contained in this clause shall relieve the Contractor from
complying with applicable Federal, State, and local laws, codes,
ordinances, and regulations (including the obtaining of licenses and
permits) in connection with hazardous material.

\(h\) The Government\'s rights in data furnished under this contract
with respect to hazardous material are as follows:

\(1\) To use, duplicate and disclose any data to which this clause is
applicable. The purposes of this right are to-

\(i\) Apprise personnel of the hazards to which they may be exposed in
using, handling, packaging, transporting, or disposing of hazardous
materials;

\(ii\) Obtain medical treatment for those affected by the material;

\(iii\) Have others use, duplicate, and disclose the data for the
Government for these purposes.

\(2\) To use, duplicate, and disclose data furnished under this clause,
in accordance with subparagraph (h)(1) of this clause, in precedence
over any other clause of this contract providing for rights in data.

\(3\) The Government is not precluded from using similar or identical
data acquired from other sources.

\(i\) Except as provided in paragraph (i)(2) the Contractor shall
prepare and submit a sufficient number of Material Safety Data Sheets
(MSDS\'s), meeting the requirements of 29 CFR 1910.1200(g) and the
latest version of Federal Standard No. 313, for all hazardous materials
identified in paragraph (b) of this clause.

\(1\) For items shipped to consignees, the Contractor shall include a
copy of the MSDS with the packing list or other suitable shipping
document which accompanies each shipment. Alternatively, the Contractor
is permitted to transmit MSDS\'s to consignees in advance of receipt of
shipments by consignees, if authorized in writing by the Contracting
Officer.

\(2\) For items shipped to consignees identified by mailing address as
agency depots, distribution centers or customer supply centers, the
Contractor shall provide one copy of the MSDS\'s in or on each shipping
container. If affixed to the outside of each container, the MSDS must be
placed in a weather resistant envelope.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts expected to require the delivery
of hazardous materials.

**3.6.3-4** **Recovered Material Certification** (October 2002)

As required by the Resource Conservation and Recovery Act of 1976 (42
U.S.C. 6962(c)(3)(A)(i), the offeror certifies by signing this offer,
that the percentage of recovered material to be used in the performance
of the contact will be at least the amount required by the applicable
contract specifications.

(End of Clause)

PRESCRIPTION:

Shall be used in SIR\'s (in accordance with 42 U.S.C. 6901) that
incorporate specifications requiring the use of recovered materials.

**3.6.3-5** **Estimate of Percentage of Recovered Material for
Designated Items to be Used in the Performance of the Contract** (August
1997)

\(a\) By signing this offer, the submitter estimates that the total
percentage(s) of recovered material for EPA Designated Items (see 40
CFR, Chapter 1, Subchapter I) to be used in the products and services to
be provided under the terms and specifications set forth in this
screening information request shall be as follows:

Item Estimated percentage

of recovered material\*

\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\*In addition, for paper products, include the percentage of
postconsumer material.

\(b\) Prospective offerors are cautioned that the Government will
conclude that the percentage(s) of recovered materials to be used in
products and services to be provided under any resulting contract shall
be \'0%\' if the estimate(s) requested in this solicitation provision
are left blank.

\(c\) Prospective offerors are further cautioned that estimated
percentage(s) of recovered materials to be used in products and services
to be provided under any resulting contract that are less than the
requirements set forth in this solicitation may render a prospective
offeror\'s offer nonresponsive.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s (in accordance with 40 CFR, Chapter 1) where the
contractor may use EPA designated recovered materials.

**3.6.3-5/alt1** **Alternate I** (August 1997)

Substitute the following paragraph (a) for paragraph (a) of the basic
provision:

\(a\) By signing this offer, the submitter estimates that the total
percentage(s) of recovered material for Government Designated Items to
be used in the products and services to be provided under the terms and
specifications set forth in this solicitation shall be as follows:

Item Estimated percentage

of recovered material\*

\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\*In addition, for paper products, include the percentage of
postconsumer material.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s where the contractor may use FAA designated
recovered material.

**3.6.3-5/alt2** **Alternate II** (August 1997)

Substitute the following paragraph (a) for paragraph (a) of the basic
provision:

\(a\) By signing this offer, the offeror?

\(1\) Estimates that the total percentage(s) of recovered material for
EPA Designated Items (see 40 CFR, Chapter 1, Subchapter I) and
Government designated items in the products and services to be provided
under the terms and specifications set forth in this solicitation shall
be as follows:

Item Estimated percentage

of recovered material\*

\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\*In addition, for paper products, include the percentage of
postconsumer material.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s where the contractor may use EPA or FAA
designated recovered material.

**3.6.3-6** **Notice of Radioactive Materials** (August 1997)

\(a\) The Contractor shall notify the Contracting Officer or designee,
in writing, \_\_\_\_\_\_\_\_\_\_\_\_\_\* days prior to the delivery of,
or prior to completion of any servicing required by this contract of,
items containing either (1) radioactive material requiring specific
licensing under the regulations issued pursuant to the Atomic Energy Act
of 1954, as amended, as set forth in Title 10 of the Code of Federal
Regulations, in effect on the date of this contract, or (2) other
radioactive material not requiring specific licensing in which the
specific activity is greater than 0.002 microcuries per gram or the
activity per item equals or exceeds 0.01 microcuries. Such notice shall
specify the part or parts of the items which contain radioactive
materials, a description of the materials, the name and activity of the
isotope, the manufacturer of the materials, and any other information
known to the Contractor which will put users of the items on notice as
to the hazards involved (OMB No. 9000-0107).

\(b\) If there has been no change affecting the quantity of activity, or
the characteristics and composition of the radioactive material from
deliveries under this contract or prior contracts, the Contractor may
request that the Contracting Officer or designee waive the notice
requirement in paragraph (a) of this clause. Any such request shall\--

\(1\) Be submitted in writing;

\(2\) Contain a certification that the quantity of activity,
characteristics, and composition of the radioactive material have not
changed; and

\(3\) Cite the contract number on which the prior notification was
submitted and the contracting office to which it was submitted.

\(c\) All items, parts, or subassemblies which contain radioactive
materials in which the specific activity is greater than 0.002
microcuries per gram or activity per item equals or exceeds 0.01
microcuries, and all containers in which such items, parts or
subassemblies are delivered to the Government shall be clearly marked
and Labeled as required by the latest revision of MIL-STD 129 in effect
on the date of the contract.

\(d\) This clause, including this paragraph (d), shall be inserted in
all subcontracts for radioactive materials meeting the criteria in
paragraph (a) of this clause.

(End of clause)

\*The Contracting Officer shall insert the number of days required in
advance of delivery of the item or completion of the servicing to assure
that required licenses are obtained and appropriate personnel are
notified to institute any necessary safety and health precautions.

PRESCRIPTION:

Shall be used in SIR\'s and contracts that could involve use or handling
or radioactive material.

**3.6.3-7** **Waste Reduction Program** (August 1998)

\(a\) Definition. \"Waste reduction,\" as used in this clause, means
preventing or decreasing the amount of waste being generated through
waste prevention, recycling, or purchasing recycled and environmentally
preferable products.

\(b\) Consistent with the requirements of Section 701 of Executive Order
12873, the Contractor shall establish a program to promote
cost-effective waste reduction in all operations and facilities covered
by this contract. Any such program shall comply with applicable Federal,
State, and local requirements, specifically including Section 6002 of
the Resource Conservation and Recovery Act (42 U.S.C. 6901, et seq.) and
implementing regulations.

(End of clause)

PRESCRIPTION:

Shall be used in all solicitations and contracts for contractor
operation of Government-owned or leased facilities.

**3.6.3-8** **Ozone Depleting Substance** (August 1998)

\(a\) Definition. \"Ozone-depleting substance\", as used in this clause,
means any substance designated as Class I by the Environmental
Protection Agency (EPA) (40 CFR Part 82), including but not limited to
chlorofluorocarbons, halons, carbon tetrachloride, and methyl
chloroform; or any substance designated as Class II by EPA (40 CFR Part
82), including but not limited to hydrochlorofluorocarbons.

\(b\) The Contractor shall label products which contain or are
manufactured with ozone-depleting substances in the manner and to the
extent required by 42 U.S.C. 7671j (b), (c), and (d) and 40 CFR Part 82,
Subpart E, as follows:

\"Warning

Contains (or manufactured with, if applicable) \[Contractor to insert
information\], a substance(s) which harm(s) public health and
environment by destroying ozone in the upper atmosphere.\"

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for ozone-depleting substances or
for supplies that may contain or be manufactured with ozone-depleting
substances, except for contracts to be performed outside the United
States, its possessions, and Puerto Rico.

**3.6.3-9** **Refrigeration Equipment and Air Conditioners** (August
1998)

The Contractor shall comply with the applicable requirements of Sections
608 and 609 of the Clean Air Act (42 U.S.C. 7671g and 7671h) as each or
both apply to this contract.

(End of clause

PRESCRIPTION:

Shall be used in SIR\'s and contracts for services when the contract
includes the maintenance, repair, or disposal of any equipment or
appliance using ozone-depleting substances as a refrigerant, such as air
conditioners, including motor vehicles, refrigerators, chillers, or
freezers, except for contracts to be performed outside the United
States, its possessions, and Puerto Rico.

**3.6.3-10** **Certification of Toxic Chemical Release Reporting**
(August 1998)

\(a\) Submission of this certification is a prerequisite for making or
entering into this contract imposed by Executive Order 12969, August 8,
1995.

\(b\) By signing this offer, the offeror certifies that\--

\(1\) As the owner or operator of facilities that will be used in the
performance of this contract that are subject to the filing and
reporting requirements described in section 313 of the Emergency
Planning and Community Right-to-Know Act of 1986 (EPCRA) (42 U.S.C.
11023) and section 6607 of the Pollution Prevention Act of 1990 (PPA)
(42 U.S.C. 13106), the offeror will file and continue to file for such
facilities for the life of the contract the Toxic Chemical Release
Inventory Form (Form R) as described in sections 313(a) and (g) of EPCRA
and section 6607 of PPA; or

\(2\) None of its owned or operated facilities to be used in the
performance of this contract is subject to the Form R filing and
reporting requirements because each such facility is exempt for at least
one of the following reasons: \[Offeror check each block that is
applicable.\]

\_\_(i) The facility does not manufacture, process, or otherwise use any
toxic chemicals listed under section 313(c) of EPCRA, 42 U.S.C.
11023(c);

\_\_(ii) The facility does not have 10 or more full-time employees as
specified in section 313(b)(1)(A) of EPCRA, 42 U.S.C. 11023(b)(1)(A);

\_\_(iii) The facility does not meet the reporting thresholds of toxic
chemicals established under section 313(f) of EPCRA, 42 U.S.C. 11023(f)
(including the alternate thresholds at 40 CFR 372.27, provided an
appropriate certification form has been filed with EPA);

\_\_(iv) The facility does not fall within Standard Industrial
Classification Code (SIC) designations 20 through 39 or;

\_\_(v) The facility is not located within any State of the United
States, the District of Columbia, the Commonwealth of Puerto Rico, Guam,
American Samoa, the United States Virgin Islands, the Northern Mariana
Islands, or any other territory or

possession over which the United States has jurisdiction.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s for competitive contracts expected to exceed
\$100,000 (including all options) and competitive 8(a) contracts, unless
it has been determined in accordance with AMS Guidance
T3.6.3.A.1h(4)that to do so is not practicable.

**3.6.3-11** **Toxic Chemical Release Reporting** (August 1998)

\(a\) Unless otherwise exempt, the Contractor, as owner or operator of a
facility used in the performance of this contract, shall file by July 1
for the prior calendar year an annual Toxic Chemical Release Inventory
Form (Form R) as described in sections 313(a) and (g) of the Emergency
Planning and Community Right-to-Know Act of 1986 (EPCRA) (42 U.S.C.
11023(a) and (g)), and section 6607 of the Pollution Prevention Act of
1990 (PPA) (42 U.S.C. 13106). The Contractor shall file, for each
facility subject to the Form R filing and reporting requirements, the
annual Form R throughout the life of the contract.

\(b\) A Contractor owned or operated facility used in the performance of
this contract is exempt from the requirement to file an annual Form R
if\--

\(1\) The facility does not manufacture, process, or otherwise use any
toxic chemicals listed under section 313(c) of EPCRA, 42 U.S.C.
11023(c);

\(2\) The facility does not have 10 or more full-time employees as
specified in section 313(b)(1)(A) of EPCRA, 42 U.S.C. 11023(b)(1)(A);

\(3\) The facility does not meet the reporting thresholds of toxic
chemicals established under section 313(f) of EPCRA, 42 U.S.C. 11023(f)
(including the alternate thresholds at 40 CFR 372.27, provided an
appropriate certification form has been filed with EPA);

\(4\) The facility does not fall within Standard Industrial
Classification Code (SIC) designations 20 through 39 or;

\(5\) The facility is not located within any State of the United States,
the District of Columbia, the Commonwealth of Puerto Rico, Guam,
American Samoa, the United States Virgin Islands, the Northern Mariana
Islands, or any other territory or possession over which the United
States has jurisdiction.

\(c\) If the Contractor has certified to an exemption in accordance with
one or more of the criteria in paragraph (b) of this clause, and after
award of the contract circumstances change so that any of its owned or
operated facilities used in the performance of this contract is no
longer exempt\--

\(1\) The Contractor shall notify the Contracting Officer; and

\(2\) The Contractor, as owner or operator of a facility used in the
performance of this contract that is no longer exempt, shall\--

\(i\) Submit a Toxic Chemical Release Inventory Form (Form R) on or
before July 1 for the prior calendar year during which the facility
becomes eligible; and

\(ii\) Continue to file the annual Form R for the life of the contract
for such facility.

\(d\) The Contracting Officer may terminate this contract or take other
action as appropriate, if the Contractor fails to comply accurately and
fully with the EPCRA and PPA toxic chemical release filing and reporting
requirements.

\(e\) Except for acquisitions of commercial items shall\--

\(1\) For competitive subcontracts expected to exceed \$100,000
(including all options), include a solicitation provision substantially
the same as the provision entitled Certification of Toxic Chemical
Release Reporting; and

\(2\) Include in any resultant subcontract exceeding \$100,000
(including all options), the substance of this clause, except this
paragraph (e).

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts that contain the provision
entitled Certification of Toxic Chemical Release Reporting, if the
contract is expected to exceed \$100,000 (including all options).

**3.6.3-12** **Asbestos-Free Construction** (August 1998)

In performing this contract, the Contractor shall not use asbestos or
asbestos-containing building materials during construction, renovation,
and/or modernization of this facility and shall provide to the
Contracting Officer (CO) a signed statement \[CO state due date of
statement here related to completion of the project\] indicating that to
the best of its knowledge, no asbestos or asbestos-containing building
materials were used during construction, renovation, and/or
modernization of this facility. The Contractor\'s certification under
this clause is considered to be a material requirement of the contract
and the FAA may withhold payment pending submittal and receipt of an
acceptable certification.

The FAA CO may authorize sample testing of contractor building materials
used during construction, renovation, and/or modernization of this
facility to verify that they are asbestos-free. The FAA will bear the
expense of this testing unless the testing reveals that the Contractor
used asbestos-containing building material in performing this contract.
If asbestos-containing material is found, the Contractor shall remove
and replace the asbestos-containing material and decontaminate the site
of asbestos contamination caused by the Contractor at no additional cost
to the Government. In addition, the Contractor shall bear the expense of
the original testing and retesting to determine that the asbestos
removal and site decontamination are satisfactorily completed.

(End of clause)

PRESCRIPTION:

Shall be used in contracts for construction, renovation and or
modernization of facilities. CO to insert information.

**3.6.3-13** **Recycle Content and Environmentally Preferable Products**
(January 2002)

Contractors are required to purchase and use materials that contain
recycled content and environmentally preferable products as outlined in
the EPA Comprehensive Procurement Guidelines (CPG), listed below, in
accordance with E.O. 13101.

EPA\'s LIST OF DESIGNATED PRODUCTS

<http://www.asu.faa.gov/ConWrite/Docs/Full_Text_of_6.3.6-13.doc>

(End of Clause)

PRESCRIPTION:

Shall be used in SIRS and contracts for construction.

**3.6.3-14** **Use Of Environmentally Preferable Products** (January
2002)

\(a\) The offeror\'s signature on this contract certifies that
environmentally preferable products will be used in products and
services for construction where applicable

\(b\) Definition.

Environmentally preferable as used in this clause means products or
services that have a lesser or reduced effect on human health and the
environment when compared with competing products or services that serve
the same purpose.

(End of Clause)

PRESCRIPTION:

Shall be used in Sirs and contracts for construction (in accordance with
E.O. 13101).

**3.6.3-15** **Material Requirements** (October 2002)

\(a\) Definitions:

\(1\) \"New\" as used in this clause, means composed of previously
unused components, whether manufactured from virgin material, recovered
material in the form of raw material, or materials and by-products
generated from, and reused within, an original manufacturing process;
provided that the supplies meet contract requirements, including but not
limited to, performance, reliability, and life expectancy.

\(2\) \"Reconditioned\" as used in this clause, means restored to the
original normal operating condition by readjustments and material
replacement.

\(3\) \"Recovered material\" as used in this clause, means waste
materials and by-products recovered or diverted from solid waste, but
the term does not include those materials and by-products generated
from, and commonly reused within, an original manufacturing process.

\(4\) \"Remanufactured\" as used in this clause, means factory rebuilt
to original specifications.

\(5\) \"Virgin material\" as used in this clause, means\--

\(i\) Previously unused raw material, including previously unused
copper, aluminum, lead, zinc, iron, other metal or metal ore; or

\(ii\) Any undeveloped resource that is, or with new technology will
become, a source of raw materials.

\(b\) The Contractor agrees:

To provide supplies that are new, reconditioned, or remanufactured, as
defined in this clause, unless this contract otherwise requires virgin
material or supplies composed of or manufactured from virgin material.

\(c\) A proposal to provide unused former Government surplus property
shall include a complete description of the material, the quantity, the
name of the Government agency from which acquired, and the date of
acquisition.

\(d\) A proposal to provide used, reconditioned, or remanufactured
supplies shall include a detailed description of such supplies and shall
be submitted to the Contracting Officer for approval.

\(e\) Used, reconditioned, or remanufactured supplies, or unused former
Government surplus property, may be used in contract performance if the
Contractor has proposed the use of such supplies, and the Contracting
Officer has authorized their use.

(End of clause)

PRESCRIPTION:

To be used in SIRs and contracts in accordance with E.O. 13101

**3.6.3-16** **Drug Free Workplace** (January 2004)

\(a\) Definitions. As used in this clause,

1\. Controlled substance\" means a controlled substance in schedules I
through V of section 202 of the Controlled Substances Act (21 U.S.C.
812) and as further defined in regulation at 21 CFR 1308.11 - 1308.15.

2\. \"Conviction\" means a finding of guilt (including a plea of nolo
contendere) or imposition of sentence, or both, by any judicial body
charged with the responsibility to determine violations of the Federal
or State criminal drug statutes.

3\. \"Criminal drug statute\" means a Federal or non-Federal criminal
statute involving the manufacture, distribution, dispensing, possession,
or use of any controlled substance.

4\. \"Drug-free workplace\" means the site(s) for the performance of
work done by the Contractor in connection with a specific contract at
which employees of the Contractor are prohibited from engaging in the
unlawful manufacture, distribution, dispensing, possession, or use of a
controlled substance.

5\. \"Employee\" means an employee of a Contractor directly engaged in
the performance of work under a Government contract.

6\. \"Directly engaged\" is defined to include all direct cost employees
and any other Contractor employee who has other than a minimal impact or
involvement in contract performance.

7\. \"Individual\" means an offeror/contractor that has no more than one
employee including the offeror/contractor.

\(b\) The Contractor, if other than an individual shall within 30
calendar days after award (unless a longer period is agreed to in
writing for contracts of 30 calendar days or more performance duration),
or as soon as possible for contracts of less than 30 calendar days
performance duration:

\(1\) Publish a statement notifying its employees that the unlawful
manufacture, distribution, dispensing, possession, or use of a
controlled substance is prohibited in the Contractor\'s workplace and
specifying the actions that will be taken against employees for
violations of such prohibition;

\(2\) Establish an ongoing drug-free awareness program to inform such
employees about:

\(i\) The dangers of drug abuse in the workplace;

\(ii\) The Contractor\'s policy of maintaining a drug-free workplace;

\(iii\) Any available drug counseling, rehabilitation, and employee
assistance programs; and

\(iv\) The penalties that may be imposed upon employees for drug abuse
violations occurring in the workplace;

\(3\) Provide all employees engaged in performance of the contract with
a copy of the statement required by subparagraph (b)(1) of this clause;

\(4\) Notify such employees in writing in the statement required by
subparagraph (b)(1) of this clause that, as a condition of continued
employment on this contract, the employee will:

\(i\) Abide by the terms of the statement; and

\(ii\) Notify the employer in writing of the employee\'s conviction
under a criminal drug statute for a violation occurring in the workplace
no later than 5 calendar days after such conviction.

\(5\) Notify the Contracting Officer in writing within 10 calendar days
after receiving notice under subdivision (b)(4)(ii) of this clause, from
an employee or otherwise receiving actual notice of such conviction. The
notice shall include the position title of the employee;

\(6\) Within 30 calendar days after receiving notice under subdivision
(b)(4)(ii) of this clause of a conviction, take one of the following
actions with respect to any employee who is convicted of a drug abuse
violation occurring in the workplace:

\(i\) Taking appropriate personnel action against such employee, up to
and including termination; or

\(ii\) Require such employee to satisfactorily participate in a drug
abuse assistance or rehabilitation program approved for such purposes by
a Federal, State, or local health, law enforcement, or other appropriate
agency.

\(7\) Make a good faith effort to maintain a drug-free workplace through
implementation of subparagraphs (b)(1) though (b)(6) of this clause.

\(c\) The Contractor, if an individual, agrees by award of the contract
or acceptance of a purchase order, not to engage in the unlawful
manufacture, distribution, dispensing, possession, or use of a
controlled substance in the performance of this contract.

\(d\) In addition to other remedies available to the Government, the
Contractor\'s failure to comply with the requirements of paragraphs (b)
or (c) of this clause may render the Contractor subject to suspension of
contract payments, termination of the contract for default, and
suspension or debarment.

(End of clause)

PRESCRIPTION:

Use in all SIRs and contracts

**3.6.4-1** **Waiver of Buy American Act for Civil Aircraft and Related
Articles** (April 1996)

\(a\) \"Civil aircraft and related articles,\" as used in this
provision, means\--

\(1\) All aircraft other than aircraft to be purchased for use by the
Department of Defense or the U.S. Coast Guard;

\(2\) The engines (and parts and components for incorporation into the
engines) of these aircraft;

\(3\) Any other parts, components, and subassemblies for incorporation
into the aircraft; and

\(4\) Any ground flight simulators, and parts and components of these
simulators, for use with respect to the aircraft, whether to be used as
original or replacement equipment in the manufacture, repair,
maintenance, rebuilding, modification, or conversion of the aircraft,
and without regard to whether the aircraft or articles receive duty-free
treatment under section 601(a)(2) of the Trade Agreements Act of 1979.

\(b\) The U.S. Trade Representative has waived applying of the Buy
American Act to the acquisition of civil aircraft and related articles
(as defined in paragraph (a) of this clause) of countries or
instrumentalities that are parties to the Agreement on Trade in Civil
Aircraft. As of January 1, 1996, those countries and instrumentalities
include Canada, the European Union (Austria, Belgium, Denmark, Finland,
France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands,
Portugal, Spain, Sweden, and the United Kingdom), Japan, Norway,
Romania, and Switzerland.

\(c\) For the purpose of this waiver, an article is a product of a
country or instrumentality only if\--

\(1\) It is wholly the growth, product, or manufacture of that country
or instrumentality; or

\(2\) In the case of an article that consists in whole or in part of
materials from another country or instrumentality, it has been
substantially transformed into a new and different article of commerce
with a name, character, or use distinct from that of the article or
articles from which it was so transformed.

\(d\) The waiver is subject to modification or withdrawal by the U.S.
Trade Representative.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s for the acquisition of civil aircraft and
related articles.

**3.6.4-2** **Buy American Act\--Supplies** (July 1996)

\(a\) The Buy American Act (41 U.S.C. 10) and Executive Order No. 10582,
dated December 17, 1954, as amended, provide that the Government give
preference to domestic end products.

\(b\) Definitions:

\(1\) \"Components,\" as used in this clause, means those articles,
materials, and supplies incorporated directly into the end products.

\(2\) \"Domestic end product,\" as used in this clause, means (1) an
unmanufactured end product mined or produced in the United States, or
(2) an end product manufactured in the United States, if the cost of its
components mined, produced, or manufactured in the United States exceeds
50 percent of the cost of all its components. Components of foreign
origin of the same class or kind as the products referred to in
subparagraphs (c)(2) or (3) of this clause shall be treated as domestic.
Scrap generated, collected, and prepared for processing in the United
States is considered domestic.

\(3\) \"End products,\" as used in this clause, means those articles,
materials, and supplies to be acquired for public use under this
contract.

\(4\) \"Foreign offer,\" as used in this clause, means an offered price
for a foreign end product, including transportation to destination and
duty (whether or not a duty free entry certificate is issued).

\(c\) The Contractor shall deliver only domestic end products, except
those\--

\(1\) For use outside the United States;

\(2\) That the FAA determines are not mined, produced, or manufactured
in the United States in sufficient and reasonably available commercial
quantities of a satisfactory quality;

\(3\) For which the FAA determines that domestic preference would be
inconsistent with the public interest; or

\(4\) For which the FAA determines the cost to be unreasonable.

\(i\) Unless the FAA determines otherwise, the offered price of a
domestic end product is unreasonable when the lowest acceptable domestic
offer exceeds the lowest acceptable foreign offer, inclusive of duty,
by:

\(A\) More than 6 percent, if a domestic offer is from a large business
that is not a labor surplus area concern; or

\(B\) More than 12 percent, if a domestic offer is from a small business
concern or any labor surplus area concern.

\(ii\) The evaluation in subparagraph (i) above shall be applied on an
item by item basis or to any group of items on which award may be made,
as specifically provided by the screening information request.

\(iii\) If an award of more than \$250,000 would be made to a domestic
concern if the 12 percent factor were applied, but not if the 6 percent
factor were applied, the FAA will decide whether award to the domestic
concern would involve unreasonable cost.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 49 U.S.C. 10)
for the acquisition of supplies, or for services involving the
furnishing of supplies for use within the United States.

**3.6.4-3** **Buy American Act\--Construction Materials** (July 1996)

\(a\) The Buy American Act (41 U.S.C. 10) and Executive Order No. 10582,
dated December 17, 1954, as amended, provide that the Government give
preference to domestic construction material. The restrictions of the
Buy American Act do not apply when the FAA determines use of a
particular domestic construction material: (i) would unreasonably
increase the cost; (ii) would be impracticable; or (iii) is not mined,
produced, or manufactured in sufficient and reasonably available
commercial quantities of a satisfactory quality.

\(b\) Definitions:

\(1\) \"Components,\" as used in this clause, means those articles,
materials, and supplies incorporated directly into construction
materials.

\(2\) \"Construction material,\" as used in this clause, means an
article, material, or supply brought to the construction site for
incorporation into the building or work. Construction material also
includes an item brought to the site pre-assembled from articles,
materials or supplies. However, emergency life safety systems, such as
emergency lighting, fire alarm, and audio evacuation systems, which are
discrete systems incorporated into a public building or work and which
are produced as a complete system, shall be evaluated as a single and
distinct construction material regardless of when or how the individual
parts or components of such systems are delivered to the construction
site.

\(3\) \"Domestic construction material,\" as used in this clause, means
(i) an unmanufactured construction material mined or produced in the
United States, or (ii) a construction material manufactured in the
United States, if the cost of its components mined, produced, or
manufactured in the United States exceeds 50 percent of the cost of all
its components. Components of foreign origin of the same class or kind
as the construction materials determined to be unavailable shall be
treated as domestic.

\(c\) The Contractor agrees that only domestic construction material
will be used by the Contractor, subcontractors, material men, and
suppliers in the performance of this contract, except for foreign
construction materials, if any, listed in this contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and construction contracts (in accordance with
49 U.S.C. 49101) except when 3.6.4-4 is used.

**3.6.4-4** **Buy American Act\--Construction Materials under North
American Free Trade Agreement** (July 1996)

\(a\) Definitions. As used in the clause\--

\(1\) \"Components\" means those articles, materials, and supplies
incorporated directly into construction materials.

\(2\) \"Construction material\" means an article, material, or supply
brought to the construction site for incorporation into the building or
work. Construction material also includes an item brought to the site
pre-assembled from articles, materials, or supplies. However, emergency
life safety systems, such as emergency lighting, fire alarm, and audio
evacuation systems, which are discrete systems incorporated into a
public building or work and which are produced as a complete system,
shall be evaluated as a single and distinct construction material
regardless of when or how the individual parts or components of such
systems are delivered to the construction site.

\(3\) \"Domestic construction material\" means (1) an unmanufactured
construction material mined or produced in the United States, or (2) a
construction material manufactured in the U.S., if the cost of its
components mined, produced, or manufactured in the United States exceeds
50 percent of the cost of all its components. Components of foreign
origin of the same class or kind as the construction materials
determined to be unavailable shall be treated as domestic.

\(4\) \"North American Free Trade Agreement (NAFTA) country\" means
Canada or Mexico.

\(5\) \"NAFTA country construction material\" means a construction
material that (1) is wholly the growth, product, or manufacture of a
NAFTA country, or (2) in the case of a construction material which
consists in whole or in part of materials from another country or
instrumentality, has been substantially transformed in a NAFTA country
into a new and different construction material distinct from the
materials from which it was transformed.

\(6\) \"Unavailable construction materials,\" as determined by the FAA,
means those articles, materials, and supplies not mined produced, or
manufactured in the United States in sufficient and reasonably available
commercial quantities of a satisfactory quality (upon request, the
Contracting Officer will provide lists of articles, materials, and
supplies excepted from the Buy American Act).

\(b\) The Buy American Act (41 U.S.C. 10) provides that the Government
give preference to domestic material. In addition, the North American
Free Trade Agreement (NAFTA), provides that NAFTA construction materials
are exempted from application of the Buy American Act when:

\(1\) The acquisition value of the construction contract is \$6,500,000
or more; and

\(2\) NAFTA country construction material will be used.

\(c\) The Contractor agrees that only domestic construction materials,
or NAFTA country construction materials will be used by the Contractor,
subcontractors, material men and suppliers in the performance of this
contract, except for other foreign construction materials, if any,
listed in this contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for construction with an estimated
acquisition value of \$6,500,000 or more.

**3.6.4-5** **Buy American\--Steel and Manufactured Products** (July
1996)

\(a\) Section 9129 of the Aviation Safety and Capacity Expansion Act of
1990 (Subtitle B of Title IX of Pub. L. 101-508, the Omnibus Budget
Reconciliation Act of 1990) requires the use of steel and manufactured
products produced in the United States when a project such as that
covered by this contract receives funding.

\(b\) The Contractor shall deliver only steel and manufactured products
produced in the United States. This requirement shall not apply where
the Secretary or his or her designee has found\--

\(1\) That its application would be inconsistent with the public
interest;

\(2\) That such materials are not produced in the United States in
sufficient and reasonably available quantities and of a satisfactory
quality;

\(3\) In the case of the procurement of facilities and equipment under
the Airport and Airway Improvement Act of 1982, (i) the cost of
components and subcomponents which are produced in the United States is
more than 60 percent of the cost of all components to be delivered under
this contract, and (ii) final assembly of the facility or equipment to
be delivered under this contract has taken place in the United States;
or

\(4\) That inclusion of domestic material will increase the cost of the
overall contract by more than 25 percent.

\(c\) In calculating components\' costs, labor costs involved in final
assembly shall not be included in the calculation.

\(d\) This clause takes precedence over the provisions of clause \"Buy
American Act\--Supplies\" and clause \"Buy American Act\--Construction
Materials\" in respect to their applicability to steel and manufactured
products.

\(e\) The offeror warrants that steel and manufactured products to be
used in the project are produced in the United States, and that
components of unknown origin are considered to have been produced or
manufactured outside the United States. Should any end product be of
foreign origin, the Contractor shall identify, in writing, such products
and country of origin to the Contracting Officer prior to contract
award. Such information is required in implementation of Section 9129 of
the Aviation Safety and Capacity Expansion Act of 1990, (Subtitle B of
Title IX of P. L. 101-508, the Omnibus Budget Reconciliation Act of
1990).

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 49 U.S.C.
49101) if the procurement includes the acquisition of steel or
manufactured products.

**3.6.4-6** **Balance of Payments Program** (July 1996)

\(a\) This clause, which applies to contracts for use outside of the
United States, implements the Balance of Payments Program by providing a
preference for domestic end products or services over foreign end
products or services.

\(b\) Definition:

\(1\) \"Components,\" as used in this clause, means those articles,
materials, and supplies directly incorporated into the end products.

\(2\) \"Domestic end product,\" as used in this clause, means:

\(i\) An unmanufactured end product mined or produced in the United
States; or

\(ii\) An end product manufactured in the United States, if the cost of
its components mined, produced, or manufactured in the United States
exceeds 50 percent of the cost of all its components. Components of
foreign origin of the same class or kind as those that the agency
determines are not mined, produced, or manufactured in the United States
in sufficient reasonably available commercial quantities of a
satisfactory quality shall be treated as domestic. Components of unknown
origin shall be considered foreign. Scrap generated, collected, and
prepared for processing in the United States is considered domestic.

\(3\) \"Domestic services,\" as used in this clause, means services
performed in the United States. If services provided under a single
contract are performed both in and outside the United States, they shall
be considered domestic if 25 percent or less of their total cost is
attributable to services (including incidental supplies used in
connection with these services) performed outside the United States.

\(4\) \"End product,\" as used in this clause, means an article,
material, or supply acquired for public use under this contract.

\(5\) \"Foreign end product,\" as used in this clause, means a product
other than a domestic end product.

\(c\) The Contractor agrees that there will be delivered under this
contract only domestic end products or services unless, in its offer, it
specified delivery of foreign end products or services in the provision
\"Balance of Payments Program Certificate.\" . An offer based on
supplying a foreign end product or service, if accepted, will permit the
Contractor to supply a product or service without regard to the
requirements of this clause.

\(d\) Offers will be evaluated in accordance with the following. Each
offer of an end product other than a domestic end product shall be
increased by 50 percent. If this procedure results in a tie between a
foreign offer as evaluated and a domestic offer, the domestic offer
shall be considered the successful offer. Any domestic end product offer
that exceeds such evaluated other end product shall be considered
unreasonable in cost or inconsistent with the public interest.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for supplies or services for use
outside the United States unless the contract is for: (a) perishable
subsistence; (b) involves an end item that it is not feasible for a
domestic firm to furnish; (c) ice, books, utilities, or communications;
(d) subsistence items for resale; (e) items required by treaty; (f)
petroleum products; (g) items paid for with near excess currency; (h)
end items from Panama; or (i) involves a NAFTA country.

**3.6.4-7** **RESERVED.**

PRESCRIPTION:

**3.6.4-8** **Buy American Act\--NAFTA Implementation Act\--Balance of
Payments Program** (July 1996)

\(a\) Definitions. As used in this clause\--

\(1\) \"Components\" means those articles, materials, and supplies
incorporated directly into the end products. Domestic end product means
(i) an unmanufactured end product mined or produced in the United
States, or (ii) an end product manufactured in the United States, if the
cost of its components mined, produced, or manufactured in the United
States exceeds 50 percent of the cost of all its components. A component
shall also be considered to have been mined, produced, or manufactured
in the United States (regardless of its source in fact) if the end
product in which it is incorporated is manufactured in the United States
and the component is of a class or kind (i) determined by the
Government, to be not mined, produced, or manufactured in the United
States in sufficient and reasonably available commercial quantities of a
satisfactory quality, or (ii) to which the agency head concerned has
determined that it would be inconsistent with the public interest to
apply the restrictions of the Buy American Act.

\(2\) \"End products\" means those articles, materials, and supplies to
be acquired under this contract for public use.

\(3\) \"Foreign end product\" means an end product other than a domestic
end product.

\(4\) \"North American Free Trade Agreement (NAFTA) country\" means
Canada or Mexico.

\(5\) \"NAFTA country end product\" means an article that (i) is wholly
the growth, product, or manufacture of a NAFTA country, or (ii) in the
case of an article which consists in whole or in part of materials from
another country or instrumentality, has been substantially transformed
in a NAFTA country into a new and different article of commerce with a
name, character, or use distinct from that of the article or articles
from which it was transformed. The term refers to a product offered for
purchase under a supply contract, but for purposes of calculating the
value of the end product includes services (except transportation
services) incidental to its supply; provided, that the value of those
incidental services does not exceed that of the product itself.

\(b\) This clause implements the Buy American Act (41 U.S.C. 10), the
North American Free Trade Agreement Implementation Act (Pub. L. 103-182,
107 Stat. 2057), and the Balance of Payments Program by providing a
preference for domestic end products over foreign end products, except
for certain foreign end products which meet the requirements for
classification as NAFTA country end products.

\(c\) The Contracting Officer has determined that the NAFTA applies to
this acquisition. Unless otherwise specified, the Acts apply to all
items in the schedule. The Contractor agrees to deliver under this
contract only domestic end products unless in its offer, it specifies
delivery of foreign end products in the provision \"Buy American
Act-North American Free Trade Agreement Implementation Act-Balance of
Payments Program Certificate.\" An offer based on supplying a NAFTA
country end product requires the Contractor to supply a NAFTA country
end product or, at the Contractor\'s option, a domestic end product.

\(d\) The restrictions of the Buy American Act or the Balance of
Payments Program will be applied to foreign offers, except as follows:

\(1\) Canadian end products under supply contracts with an estimated
value above \$25,000 and Mexican end products under supply contracts
with an estimated value above \$50,000.

\(2\) NAFTA country construction materials under construction contracts
with an estimated acquisition value of \$6,500,000 or more.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts which the Contracting Officer
determines are subject to NAFTA.

**3.6.4-9** **RESERVED.**

PRESCRIPTION:

**3.6.4-10** **Restrictions on Certain Foreign Purchases** (April 1996)

\(a\) Unless advance written approval of the Contracting Officer is
obtained, the Contractor shall not acquire for use in the performance of
this contract\--

\(1\) Any supplies or services originating from sources within the
communist areas of North Korea, Vietnam, Cambodia, or Cuba;

\(2\) Any supplies that are or were located in or transported from or
through North Korea, Vietnam, Cambodia, or Cuba; or

\(3\) Arms, ammunition, or military vehicles produced in South Africa,
or manufacturing data for such articles.

\(b\) The Contractor shall not acquire for use in the performance of
this contract supplies or services originating from sources within Iraq,
any supplies that are or were located in or transported from or through
Iraq, or any supplies or services from entities controlled by the
Government of Iraq.

\(c\) The Contractor agrees to insert the provisions of this clause,
including this paragraph (c), in all subcontracts hereunder.

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contracts.

**3.6.4-11** **Inconsistency Between English Version and Translation of
Contract** (April 1996)

In the event of inconsistency between any terms of this contract and any
translation thereof into another language, the English language meaning
shall control.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when translation into another
language is anticipated.

**3.6.4-12** **European Union Sanction for End Products** (April 1996)

\(a\) Definitions. As used in this clause\--

\(1\) \"Sanctioned European Union (EU) end product\" means an article
that (i) is wholly the growth, product or manufacture of a sanctioned
member state of the EU, or (ii) in the case of an article which consists
in whole or in part of materials from another country or
instrumentality, has been substantially transformed in a sanctioned EU
country into a new and different article of commerce with a name,
character or use distinct from that from which it was so transformed.
The term refers to a product offered for purchase under a supply
contract, but for purposes of calculating the value of the end product
includes services (except transportation services) incidental to its
supply; provided, that the value of these incidental services does not
exceed that of the product itself.

\(2\) \"Sanctioned member state of the EU\" is any of the following
countries: Austria, Belgium, Denmark, Finland, France, Ireland, Italy,
Luxembourg, the Netherlands, Sweden, and the United Kingdom.

\(b\) Agreement. The Contractor agrees that no sanctioned EU end
products will be delivered under this contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for supplies less than \$190,000.

**3.6.4-13** **European Union Sanction for Services** (April 1996)

\(a\) Definition. \"Sanctioned member state of the European Union
(EU),\" as used in this clause, is any of the following countries:
Austria, Belgium, Denmark, Finland, France, Ireland, Italy, Luxembourg,
the Netherlands, Sweden, and the United Kingdom.

\(b\) Agreement. The Contractor agrees not to perform services under
this contract in a sanctioned member state of the EU. This does not
apply to subcontracts.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for services less than \$190,000,
or regardless of dollar value, contracts for: (a) transportation
services, dredging, management and operations of government-owned
facilities; (c) motion pictures; (d) research and development; (e)
airport concessions; (f) legal services; (g) hotel and restaurant
services; (h) personnel services; (i) investigation and security
services; (j) education and training; (k) health and social services;
(l) recreation and sporting services; and (m) telecommunications
services.

**3.6.4-14** **Balance of Payments Program\--Construction
Materials\--NAFTA** (July 1996)

\(a\) This clause applies to construction contracts outside of the
United States.

\(b\) Definitions. As used in this clause:

\(1\) \"Construction material,\" as used in this clause, means an
article, material, or supply brought to the construction site for
incorporation into the building or work. Construction material also
includes an item brought to the site pre-assembled from articles,
materials or supplies. However, emergency life safety systems, such as
emergency lighting, fire alarm, and audio evacuation systems, which are
discrete systems incorporated into a public building or work and which
are produced as a complete system, shall be evaluated as a single and
distinct construction material regardless of when or how the individual
parts or components of such systems are delivered to the construction
site.

\(2\) \"Domestic construction material,\" as used in this clause, means
(i) an unmanufactured construction material mined or produced in the
United States, or (ii) a construction material manufactured in the
United States, if the cost of its components mined, produced, or
manufactured in the United States exceeds 50 percent of the cost of all
its components. Components of foreign origin of the same class or kind
as the construction materials determined to be unavailable shall be
treated as domestic.

\(3\) \"NAFTA country construction material\" means a construction
material that (a) is wholly the growth, product, or manufacture of a
NAFTA country in the case of a construction material which consists in
whole or in part of materials from another country or instrumentality,
has been substantially transformed in a designated country into a new
and different construction material distinct from the materials from
which it was transformed.

\(4\) \"North American Free Trade Agreement (NAFTA) country\" means
Canada or Mexico.

\(5\) \"Unavailable construction materials,\" as determined by the FAA,
are those articles, materials, and supplies not mined produced, or
manufactured in the United States in sufficient and reasonably available
commercial quantities of a satisfactory quality (upon request, the
Contracting Officer will provide lists of articles, materials, and
supplies excepted from the Buy American Act).

\(c\) The Balance of Payments Program provides that the FAA give
preference to domestic construction material.

\(d\) The Contractor agrees that only domestic construction material or
NAFTA country construction material will be used by the Contractor,
subcontractors, material men, and suppliers in the performance of this
contract, except for any nondomestic material, if any, listed in this
contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for construction contracts outside
of the U.S. and the Contracting Officer determines is subject to NAFTA.

**3.6.4-15** **Buy American Act Certificate** (July 1996)

\(a\) The offeror certifies that each end product, except as listed
below, is a domestic end product (as defined in the clause \"Buy
American Act-Supplies,\") and components of unknown origin are
considered to have been mined, produced, or manufactured outside the
United States.

Excluded End Product Country of Origin

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[list as necessary\]

\(b\) The offeror agrees to furnish any additional information as the
Contracting Officer may request to verify the above information and to
evaluate the offer. Offerors may obtain from the Contracting Officer
lists of articles, materials, and supplies excepted from the Buy
American Act.

(End of provision)

PRESCRIPTION:

Should be used in SIR\'s for supplies or services involving the
furnishing of supplies and clause 3.6.4-2 is used.

**3.6.4-16** **Balance of Payments Program Certificate** (July 1996)

\(a\) The offeror certifies that each end product or service, except as
listed below, is a domestic end product or service (as defined in the
clause \"Balance of Payments Program\") and components of unknown origin
are considered to have been mined, produced, or manufactured outside the
United States.

Excluded End Product Country of Origin or Service

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[list as necessary\]

\(b\) The offeror agrees to furnish any additional information as the
Contracting Officer may request to verify the above information and to
evaluate the offer. Offerors may obtain from the Contracting Officer
lists of articles, materials, and supplies excepted from the Buy
American Act.

(End of provision)

PRESCRIPTION:

Should be used in SIR\'s for supplies or services, contract performance
will be outside of the U.S. and clause 3.6.4-4-6 is used.

**3.6.4-17** **Buy American Act\--NAFTA Implementation Act\--Balance of
Payments Certificate** (July 1996)

\(a\) The offeror certifies that each end product or service, except as
listed below, is a domestic end product or service (as defined in the
clause \"Buy American Act-NAFTA Implementation Act-Balance of Payments
Program\") and components of unknown origin are considered to have been
mined, produced, or manufactured outside the United States.

Excluded End Product Country of Origin

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[list as necessary\]

\(b\) Under certain circumstances, offers of North American Free Trade
Agreement (NAFTA) country end products (as defined in the clause \"Buy
American Act-North American Free Trade Agreement Act Implementation
Act-Balance of Payments\") will be given the same preference as domestic
end products. To obtain this preference, offerors must identify below
those end products that are NAFTA country end products. Products that
are not identified and certified below will not be deemed NAFTA country
end products

Excluded End NAFTA Country of Origin

Product

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[list as necessary\]

\(c\) The offeror agrees to furnish any additional information as the
Contracting Officer may request to verify the above information and to
evaluate the offer. Offerors may obtain from the Contracting Officer
lists of articles, materials, and supplies excepted from the Buy
American Act.

(End of provision)

PRESCRIPTION:

Should be used in SIR\'s for supplies when clause 3.6.4-8 is used.

**3.6.5-1** **Utilization of Indian Organizations and Indian Owned
Economic Enterprises** (January 1999)

\(a\) This clause applies only if the contract includes a subcontracting
plan incorporated under the terms of the clause titled, \"Small Business
and Small Disadvantaged Business Subcontracting Plan.\"

\(b\) Definitions.

\(1\) As used in this clause, \"Indian organization\" means the
governing body of any Indian tribe (as defined by 25 U.S.C. 1452(c)) or
entity established or recognized by the governing body for the purposes
of 25 U.S.C., chapter 17.

\(2\) \"Indian-owned economic enterprise\" means any Indian-owned (as
determined by the Secretary of the Interior) commercial, industrial, or
business activity established or organized for the purpose of profit,
provided that Indian ownership shall constitute not less than 51percent
of the enterprise.

\(c\) The Contractor agrees to use its best efforts to give Indian
organizations and Indian-owned economic enterprises the (25 U.S.C. 1544)
maximum practicable opportunity to participate in the subcontracts it
awards to the fullest extent consistent with efficient performance of
its contract.

\(1\) The Contractor may rely on the written representation of the
Indian organization or Indian-owned economic enterprise.

\(2\) If the cost of subcontracting with an Indian organization or
Indian-owned economic enterprise exceeds the cost of acquiring the
supplies or services from a non-Indian source, the Contractor may
request an adjustment to the following: (i) The estimated cost of a
cost-type contract; (ii) The target cost of a cost-plus-incentive-fee
prime contract; (iii) The target cost and ceiling price of a fixed-price
incentive prime contract; or (iv) The price of a firm-fixed-price prime
contract.

\(3\) The amount of the equitable adjustment to the prime contract shall
be the lesser of\--

\(i\) The difference between the estimated cost, target cost or
firm-fixed-price included in the subcontract initially awarded to the
Indian organization or enterprise and the corresponding estimated cost,
target cost or firm-fixed-price which would have been included in a
subcontract with the otherwise low, non-Indian offeror; or

\(ii\) Five percent of the estimated cost, target cost or
firm-fixed-price included in the subcontract initially awarded to the
Indian organization or enterprise.

\(4\) The Contractor has the burden of proving the amount claimed and
must assert its request for an adjustment prior to completion of
contract performance.

\(d\) The Contracting Officer shall decide the amount of the adjustment
and modify the contract accordingly. The Contracting Officer\'s decision
is final and not subject to the \"Contract Disputes\" clause of this
contract.

(End of clause)

PRESCRIPTION:

Use as applicable

**3.7-1** **Privacy Act Notification** (October 1996)

The Contractor will be required to design, develop, or operate a system
of records on individuals, to accomplish an agency function subject to
the Privacy Act of 1974, Public Law 93-579, December 31, 1974 (5 U.S.C.
552a) and applicable agency regulations (49 CFR Part 10). Violation of
the Act may involve the imposition of criminal penalties.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 5 U.S.C. 552)
when the design, development or operation of a system of records on
individuals is required to accomplish an agency function.

**3.7-2** **Privacy Act** (October 1996)

\(a\) The Contractor agrees to\--

\(1\) Comply with the Privacy Act of 1974 (the Act) and the agency rules
and regulations (49 CFR Part 10) issued under the Act in the design,
development, or operation of any system of records on individuals to
accomplish an agency function when the contract specifically
identifies\--

\(i\) The systems of records; and

\(ii\) The design, development, or operation work that the contractor is
to perform;

\(2\) Include the Privacy Act notification contained in this contract in
every solicitation and resulting subcontract and in every subcontract
awarded without a solicitation, when the work statement in the proposed
subcontract requires the redesign, development, or operation of a system
of records on individuals that is subject to the Act; and

\(3\) Include this clause, including this subparagraph (3), in all
subcontracts awarded under this contract which requires the design,
development, or operation of such a system of records.

\(b\) In the event of violations of the Act, a civil action may be
brought against the agency involved when the violation concerns the
design, development, or operation of a system of records on individuals
to accomplish an agency function, and criminal penalties may be imposed
upon the officers or employees of the agency when the violation concerns
the operation of a system of records on individuals to accomplish an
agency function. For purposes of the Act, when the contract is for the
operation of a system of records on individuals to accomplish an agency
function, the Contractor is considered to be an employee of the agency.

\(c\) (1) \'Operation of a system of records,\' as used in this clause,
means performance of any of the activities associated with maintaining
the system of records, including the collection, use, and dissemination
of records.

\(2\) \'Record,\' as used in this clause, means any item, collection, or
grouping of information about an individual that is maintained by an
agency, including, but not limited to, education, financial
transactions, medical history, and criminal or employment history and
that contains the person\'s name, or the identifying

number, symbol, or other identifying particular assigned to the
individual, such as a fingerprint or voiceprint or a photograph.

\(3\) \'System of records on individuals,\' as used in this clause,
means a group of any records under the control of any agency from which
information is retrieved by the name of the individual or by some
identifying number, symbol, or other identifying particular assigned to
the individual.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts (in accordance with 5 U.S.C. 552)
when the design, development or operation of a system of records on
individuals is required to accomplish an agency function.

**3.8.2-1** **RESERVED.**

PRESCRIPTION:

**3.8.2-2** **RESERVED.**

PRESCRIPTION:

**3.8.2-3** **RESERVED.**

PRESCRIPTION:

**3.8.2-4** **RESERVED.**

PRESCRIPTION:

**3.8.2-5** **RESERVED.**

PRESCRIPTION:

**3.8.2-6** **RESERVED.**

PRESCRIPTION:

**3.8.2-7** **RESERVED.**

PRESCRIPTION:

**3.8.2-8** **RESERVED.**

PRESCRIPTION:

**3.8.2-9** **Site Visit** (April 1996)

Offerors or quoters are urged and expected to inspect the site where
services are to be performed and to satisfy themselves regarding all
general and local conditions that may affect the cost of contract
performance, to the extent that the information is reasonably
obtainable. In no event shall failure to inspect the site constitute
grounds for a dispute after contract award.

(End of provision)

PRESCRIPTION:

May be used in SIR\'s and contracts for services to be performed on
Government installations, except for construction.

**3.8.2-10** **Protection of Government buildings, Equipment, and
Vegetation** (April 1996)

The Contractor shall use reasonable care to avoid damaging existing
buildings, equipment, and vegetation on the Government installation. If
the Contractor\'s failure to use reasonable care causes damage to any of
this property, the Contractor shall replace or repair the damage at no
expense to the Government as the Contracting Officer directs. If the
Contractor fails or refuses to make such repair or replacement, the
Contractor shall be liable for the cost, which may be deducted from the
contract price.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for services to be performed on
Government installations, except for construction.

**3.8.2-11** **Continuity of Services** (April 1996)

\(a\) The Contractor recognizes that the services under this contract
are vital to the Government and must be continued without interruption
and that, upon contract expiration, a successor, either the Government
or another contractor, may continue them. The Contractor agrees to:

\(1\) furnish phase-in training and

\(2\) exercise its best efforts and cooperation to effect an orderly and
efficient transition to a successor.

\(b\) The Contractor shall, upon the Contracting Officer\'s written
notice:

\(1\) furnish phase-in, phase-out services for up to 90 days after this
contract expires and

\(2\) negotiate in good faith a plan with a successor to determine the
nature and extent of phase-in, phase-out services required. The plan
shall specify a training program and a date for transferring
responsibilities for each division of work described in the plan, and
shall be subject to the Contracting Officer\'s approval. The Contractor
shall provide sufficient experienced personnel during the phase- in,
phase-out period to ensure that the services called for by this contract
are maintained at the required level of proficiency.

\(c\) The Contractor shall allow as many personnel as practicable to
remain on the job to help the successor maintain the continuity and
consistency of the services required by this contract. The Contractor
also shall disclose necessary personnel records and allow the successor
to conduct onsite interviews with these employees. If selected employees
are agreeable to the change, the Contractor shall release them at a
mutually agreeable date and negotiate transfer of their earned fringe
benefits to the successor.

\(d\) The Contractor shall be reimbursed for all reasonable phase-in,
phase-out costs (i.e., costs incurred within the agreed period after
contract expiration that result from phase-in, phase-out operations) and
a fee (profit) not to exceed a prorata portion of the fee (profit) under
this contract.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when the services under the
contract are considered vital to the Government and must be continued
without interruption and when upon contract expiration, a successor,
either the Government or another contractor, may continue them; and the
Government anticipates difficulties during the transition from one
contractor to another or to the Government. (i.e. Services or remote
locations or requiring special security clearances)

**3.8.2-12** **Payment by Government to Contractor** (April 1996)

\(a\) In \_\_\_\_\_ \[insert \"full\" if Alternate I is used; otherwise
insert \"partial\"\] consideration of the performance of the work called
for in the Schedule, the Government will pay to the Contractor
\_\_\_\_\_ \[fill in amount\].

\(b\) The Government shall make financing payments monthly as the work
proceeds, or at more frequent intervals as determined by the Contracting
Officer, on estimates approved by the Contracting Officer. Except as
provided in paragraph (c) below, in making financing payments the
Contracting Officer shall retain 10 percent of the estimated payment
until final completion and acceptance of the contract work. However, if
the Contracting Officer finds that satisfactory progress was achieved
during any period for which a financing payment is to be made, the
Contracting Officer may authorize such payment in full, without
retaining a percentage. Also, on completion and acceptance of each unit
or division for which the price is stated separately, the Contracting
Officer may authorize full payment for that unit or division without
retaining a percentage.

\(c\) When the work is substantially completed, the Contracting Officer
shall retain an amount considered adequate for the protection of the
Government and, at the Contracting Officer\'s discretion, may release
all or a portion of any excess amount.

\(d\) In further consideration of performance, the Contractor shall
receive title to all property to be dismantled or demolished that is not
specifically designated as being retained by the Government. The title
shall vest in the Contractor immediately upon the Government\'s issuing
the notice of award, or if a performance bond is to be furnished after
award, upon the Government\'s issuance of a notice to proceed with the
work. The Government shall not be responsible for the condition of, or
any loss or damage to, the property. If the Contractor does not wish to
remove from the site any of the property acquired, the Contracting
Officer may, upon written request, grant the Contractor permission to
leave the property on the premises. As a condition to the granting of
this permission, the Contractor agrees to waive any right, title, claim,
or interest in and to the property.

\(e\) Upon completion and acceptance of all work and receipt of a
properly executed voucher, the Government shall make final payment of
the amount due the Contractor under this contract. If requested, the
Contractor shall release all claims against the Government arising under
this contract, other than any claims the Contractor specifically
excepts, in stated amounts, from operation of this release.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for dismantling, demolition, or
removal of improvements whenever the Contracting Officer determines the
Government shall make payments to the contractor in addition to any
title to property that the contractor may receive under the contract.
The Contracting Officer should insert appropriate information in the
clause.

**3.8.2-12/alt1** **Payment by Government to Contractor Alternate I**
(April 1996)

If the contracting officer determines that the Government shall retain
all material resulting from the dismantling or demolition work, delete
paragraph (d) from the basic clause and renumber the remaining
paragraphs.

PRESCRIPTION:

May be used with the basic clause when the Contracting Officer
determines that all material resulting from the dismantling or
demolition work is to be retained by the Government.

**3.8.2-13** **Payment by Contractor to Government** (April 1996)

\(a\) The Contractor shall receive title to all property to be
dismantled, demolished, or removed under this contract and not
specifically designated in the Schedule as being retained by the
Government. The title shall vest in the Contractor immediately upon the
Government\'s issuing the notice of award, or if a performance bond is
to be furnished, upon the Government\'s issuing a notice to proceed with
the work. The Government shall not be responsible for the condition of,
or any loss or damage to, the property.

\(b\) The Contractor shall promptly remove from the site all property
acquired by the Contractor. The Government shall not permit storage of
property on the site beyond the completion date. If the Contractor does
not wish to remove from the site any of the property acquired, the
Contracting Officer may, upon written request, grant the Contractor
permission to leave the property on the premises. As a condition of the
granting of the permission, the Contractor agrees to waive any right,
title, claim, or interest in and to the property.

\(c\) The Contractor shall perform the work called for under this
contract and within \_\_\_\_ days of receipt of notice of award, unless
otherwise provided in the Schedule and before proceeding with the work,
shall pay \_\_\_\_\_ \[fill in amount\]. Checks shall be made payable to
the office designated in the contract and shall be forwarded to the
Contracting Officer.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for dismantling, demolition, or
removal of improvements whenever the contractor is to receive title to
dismantled or demolished property and a set amount of compensation is
due to the Government, except if the Contracting Officer determines that
it would be advantageous to the Government for the contractor to pay in
increments then see Clause 3.8.2-14. The Contracting Officer should
insert appropriate information in the clause.

**3.8.2-14** **Incremental Payment by Contractor to Government** (April
1996)

\(a\) The Contractor shall perform the work called for under this
contract and within \_\_\_\_ days of receipt of notice of award, unless
otherwise provided in the Schedule, and before proceeding with the work,
shall pay \_\_\_\_ \[fill in amount\]. Thereafter, the Contractor shall
make payment to the Government in the amount and frequency specified in
the Schedule. Checks shall be made payable to the office designated in
the contract and shall be forwarded to the Contracting Officer.

\(b\) Upon the Government\'s receipt of each increment of payment, the
Contractor shall receive title to such property as the Contracting
Officer determines to be fair and reasonable for that increment of
payment. Upon receipt of the Contractor\'s final payment, all title that
has not passed to the Contractor shall vest in the Contractor, unless
specifically designated in the Schedule as being retained by the
Government. The Government shall not be responsible for the condition
of, or any loss or damage to, the property.

\(c\) The Contractor shall promptly remove from the site all property
acquired by the Contractor. The Government will not permit storage of
property on the site beyond the completion date. If the Contractor does
not wish to remove from the site any of the property acquired, the
Contracting Officer may, upon written request, grant the Contractor
permission to leave the property on the premises. As a condition of the
granting of this permission, the Contractor agrees to waive any right,
title, claim, or interest in and to the property.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for dismantling, demolition, or
removal of improvements if (1) the contractor is to receive title to
dismantled or demolished property and a net amount of compensation is
due the Government, and (2) the Contracting Officer determines that it
would be advantageous to the Government for the contractor to pay in
increments, and for the Government to transfer title to the contractor
for increments of property only upon receipt of those payments. The
Contracting Officer should insert appropriate information in the clause.

**3.8.2-15** **Indemnification and Medical Liability Insurance** (April
1996)

\(a\) It is expressly agreed and understood that this is a nonpersonal
services contract, as defined in FAA Acquisition Management System,
3.8.2, under which the professional services rendered by the Contractor
are rendered in its capacity as an independent contractor. The
Government may evaluate the quality of professional and administrative
services provided, but retains no control over professional aspects of
the services rendered, including by example, the Contractor\'s
professional medical judgment, diagnosis, or specific medical
treatments. The Contractor shall be solely liable for and expressly
agrees to indemnify the Government with respect to any liability
producing acts or omissions by it or by its employees or agents. The
Contractor shall maintain during the term of this contract liability
insurance issued by a responsible insurance carrier of not less than the
following amount(s) per specialty per occurrence:\_\_\_\_\_\_.

\(b\) An apparently successful offeror, upon request by the Contracting
Officer, shall furnish prior to contract award evidence of its
insurability concerning the medical liability insurance required by
paragraph (a) of this clause.

\(c\) Liability insurance may be on either an occurrences basis or on a
claims-made basis. If the policy is on a claims-made basis, an extended
reporting endorsement (tail) for a period of not less than 3 years after
the end of the contract term must also be provided.

\(d\) A certificate of insurance evidencing the required coverage shall
be provided to the Contracting Officer prior to the commencement of
services under this contract. If the insurance is on a claims- made
basis and evidence of an extended reporting endorsement is not provided
prior to the commencement of services, evidence of such endorsement
shall be provided to the Contracting Officer prior to the expiration of
this contract. Final payment under this contract shall be withheld until
evidence of the extended reporting endorsement is provided to the
Contracting Officer.

\(e\) The policies evidencing required insurance shall also contain an
endorsement to the effect that any cancellation or material change
adversely affecting the Government\'s interest shall not be effective
until 30 days after the insurer or the Contractor gives written notice
to the Contracting Officer. If during the performance period of the
contract the Contractor changes insurance providers, the Contractor must
provide evidence that the Government will be indemnified to the limits
specified in paragraph (a) of this clause, for the entire period of the
contract, either under the new policy, or a combination of old and new
policies.

\(f\) The Contractor shall insert the substance of this clause,
including this paragraph (f), in all subcontracts under this contract
for health care services and shall require such subcontractors to
provide evidence of and maintain insurance in accordance with paragraph
(a) of this clause. At least 5 days before the commencement of work by
any subcontractor, the Contractor shall furnish to the Contracting
Officer evidence of such insurance.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s, contracts for nonpersonal health care services.
The Contracting Officer should insert appropriate information in the
clause.

**3.8.2-16** **Restriction on Severance Payments to Nationals** (April
1996)

\(a\) The costs of severance payments to foreign nationals employed
under a service contract performed outside the United States are
unallowable to the extent that such payments exceed amounts typically
paid to employees providing similar services in the same industry in the
United States. However, the head of the agency, or designee, may
determine that such costs are allowable.

\(b\) In making the determination, the head of the agency, or designee,
will determine that\--

\(1\) The application of the severance pay limitations to the contract
would adversely affect the continuation of a program, project, or
activity that provides significant support services for:

\(i\) members of the armed forces stationed or deployed outside the
United States, or

\(ii\) employees of an executive agency posted outside the United
States;

\(2\) The Contractor has taken (or has established plans to take)
appropriate actions within its control to minimize the amount and number
of incidents of the payment of severance pay to employees under the
contract who are foreign nationals; and

\(3\) The payment of severance pay is necessary in order to comply with
a law that is generally applicable to a significant number of businesses
in the country in which the foreign national receiving the payment
performed services under the contract, or is necessary to comply with a
collective bargaining agreement.

(End of provision)

PRESCRIPTION:

May be used in SIR\'s and contracts with Foreign Nationals when the
Contracting Officer determines to limit the cost allowability of
severance payments to foreign nationals employed under a service
contract performed outside the United States.

**3.8.2-17** **Key Personnel and Facilities** (July 1996)

\(a\) The personnel and/or facilities as specified below are considered
essential to the work being performed hereunder and may, with the
consent of the contracting parties, be changed from time to time during
the course of the contract.

\(b\) Prior to removing, replacing, or diverting any of the specified
personnel and/or facilities, the Contractor shall notify in writing, and
receive consent from, the Contracting Officer reasonably in advance of
the action and shall submit justification (including proposed
substitutions) in sufficient detail to permit evaluation of the impact
on this contract.

\(c\) No diversion shall be made by the Contractor without the written
consent of the Contracting Officer.

\(d\) The key personnel and/or facilities under this contract are:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[List key personnel and/or facilities\]

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when contractor selection will be
based substantially on having key personnel or facilities..

**3.8.2-18** **Certification of Data** (October 1996)

\(a\) The offeror represents and certifies that to the best of its
knowledge and belief, the information and/or data (e.g., company
profile, qualifications, background statements, brochures) submitted
with its offer is current, accurate, and complete as of the date of its
offer.

\(b\) The offeror understands that any inaccurate data provided to the
Department of Transportation may subject the offeror, its employees, or
its representatives to: (1) prosecution for false statements pursuant to
18 U.S.C. 1001 and/or; (2) enforcement action for false claims or
statements pursuant to the Program Fraud Civil Remedies Act of 1986, 31
U.S.C. 3801-3812 and 49 CFR Part 31 and/or; (3) termination for default
under any contract resulting from its offer and/or; (4) debarment or
suspension.

\(c\) The offeror agrees to obtain a similar certification from its
subcontractors.

Signature: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Typed Name and
Title:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Company Name: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

This certification concerns a matter within the jurisdiction of an
agency of the United States and the making of a false, fictitious, or
fraudulent certification may render the maker subject to prosecution
under Title 18, United States Code, Section 1001.

(End of provision)

PRESCRIPTION:

May be used in SIR\'s and contracts for training services, or other
service contracts if appropriate.

**3.8.2-19** **Prohibition on Advertising** (October 1996)

The Contractor or its representatives (including training instructors)
shall not advertise or solicit business from attendees for private,
non-Government training during contracted-for training sessions. This
prohibition extends to unsolicited oral comments, distribution or sales
of written materials, and/or sales of promotional videos or audio tapes.
The contractor agrees to insert this clause in its subcontracts.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for training services.

**3.8.2-20** **RESERVED** (October 2001)

.

PRESCRIPTION:

.

**3.8.2-21** **RESERVED** (October 2001)

.

PRESCRIPTION:

.

**3.8.4-1** **Vehicle Lease Payments** (April 1996)

\(a\) Upon the submission of proper invoices or vouchers, the Government
shall pay rent for each vehicle at the rate(s) specified in this
contract.

\(b\) Rent shall accrue from the beginning of this contract, or from the
date each vehicle is delivered to the Government, whichever is later,
and shall continue until the expiration of the contract term or the
termination of this contract. However, rent shall accrue only for the
period that each vehicle is in the possession of the Government.

\(c\) Rent shall not accrue for any vehicle that the Contracting Officer
determines does not comply with the \"Condition of Leased Vehicles\"
clause of this contract or otherwise does not comply with the
requirements of this contract, until the vehicle is replaced or the
defects are corrected.

\(d\) Rent shall not accrue for any vehicle during any period when the
vehicle is unavailable or unusable as a result of the Contractor\'s
failure to render services for the operation and maintenance of the
vehicle as prescribed by this contract.

\(e\) Rent stated in monthly terms shall be prorated on the basis of
1/30th of the monthly rate for each day the vehicle is in the
Government\'s possession. If this contract contains a mileage provision,
the Government shall pay rent as provided in the Schedule.

(End of clause)

PRESCRIPTION:

Should be used SIR\'s and contracts for leasing of motor vehicles,
unless the motor vehicles are leased in foreign countries.

**3.8.4-2** **Condition of Leased Vehicles** (April 1996)

Each vehicle furnished under this contract shall be of good quality and
in safe operating condition, and shall comply with the Federal Motor
Vehicle Safety Standards (49 CFR 571) and State safety regulations
applicable to the vehicle. The Government shall accept or reject the
vehicles promptly after receipt. If the Contracting Officer determines
that any vehicle furnished is not in compliance with this contract, the
Contracting officer shall promptly inform the Contractor in writing. If
the Contractor fails to replace the vehicle or correct the defects as
required by the Contracting Officer, the Government may (a) by contract
or otherwise, correct the defect or arrange for the lease of a similar
vehicle and shall charge or set off against the Contractor any excess
costs occasioned thereby, or (b) terminate the contract under the
\"Default\" clause of this contract.

(End of clause)

PRESCRIPTION:

Should be used SIR\'s and contracts for leasing of motor vehicles,
unless the motor vehicles are leased in foreign countries.

**3.8.4-3** **Marking of Leased Vehicles** (April 1996)

\(a\) The Government may place nonpermanent identification markings or
decals, on each side, and on the front and rear bumpers, of any motor
vehicle leased under this contract. The Government shall use markings or
decals that are removable without damage to the vehicle.

\(b\) The Contractor may use placards for temporary identification of
vehicles except that the placards may not contain any references to the
Contractor that may be construed as advertising or endorsement by the
Government of the Contractor.

(End of clause)

PRESCRIPTION:

Should be used SIR\'s and contracts for leasing of motor vehicles,
unless the motor vehicles are leased in foreign countries.

**3.8.4-4** **Tagging of Leased Vehicles** (April 1996)

While it is the intent that vehicles leased under this contract will
operate on Federal tags, the Government reserves the right to utilize
State tags if necessary to accomplish its mission. Should State tags be
required, the Contractor shall furnish the Government documentation
necessary to allow acquisition of such tags. Federal tags are the
responsibility of the Government.

(End of clause)

PRESCRIPTION:

May be used SIR\'s and contracts for vehicles leased over 60 days.

**3.8.4-5** **Government Supply Sources** (April 1996)

The Contracting Officer may issue the Contractor an authorization to use
Government supply sources in the performance of this contract. Title to
all property acquired by the Contractor under such an authorization
shall vest in the Government unless otherwise specified in the contract.
Such property shall not be considered to be Government-furnished
property, as distinguished from Government property. The provisions of
the \"Government Property\" clause, except its paragraphs (a) and (b),
shall apply to all property acquired under such authorization.

(End of clause)

PRESCRIPTION:

May be used SIR\'s and contracts when the Contracting Officer may
authorize the contractor to acquire supplies or services from a
Government supply source

**3.8.4-5/alt1** **Government Supply Sources Alternate I** (April 1996)

If a facilities contract is contemplated, delete the last sentence from
the basic clause.

PRESCRIPTION:

May be used SIR\'s and contracts if a facilities contract is
contemplated

**3.8.4-6** **Interagency Fleet Management System Vehicles and Related
Services** (April 1996)

The Contracting officer may issue the Contractor an authorization to
obtain interagency fleet management system vehicles and related services
for use in the performance of this contract. The use, service, and
maintenance of interagency fleet management system vehicles and the use
of related services by the Contractor shall be in accordance with 41 CFR
101-39 and 41 CFR 101-38.301-1.

(End of clause)

PRESCRIPTION:

May be used SIR\'s and contract for a cost-reimbursement contract where
the Contracting Officer may authorize the contractor to use interagency
fleet management system vehicles and related services.

**3.9.1-1** **Contract Disputes** (November 2002)

\(a\) All contract disputes arising under or related to this contract
shall be resolved through the Federal Aviation Administration (FAA)
dispute resolution system at the Office of Dispute Resolution for
Acquisition (ODRA) and shall be governed by the procedures set forth in
14 C.F.R. Parts 14 and 17, which are hereby incorporated by reference.
Judicial review, where available, will be in accordance with 49 U.S.C.
46110 and shall apply only to final agency decisions. A contractor may
seek review of a final FAA decision only after its administrative
remedies have been exhausted.

\(b\) The filing of a contract dispute with the ODRA may be accomplished
by mail, overnight delivery, hand delivery, or by facsimile. A contract
dispute is considered to be filed on the date it is received by the
ODRA.

\(c\) Contract disputes are to be in writing and shall contain:

\(1\) The contractor\'s name, address, telephone and fax numbers and the
name, address, telephone and fax numbers of the contractor\'s legal
representative(s) (if any) for the contract dispute;

\(2\) The contract number and the name of the Contracting Officer;

\(3\) A detailed chronological statement of the facts and of the legal
grounds for the contractor\'s positions regarding each element or count
of the contract dispute (i.e., broken down by individual claim item),
citing to relevant contract provisions and documents and attaching
copies of those provisions and documents;

\(4\) All information establishing that the contract dispute was timely
filed;

\(5\) A request for a specific remedy, and if a monetary remedy is
requested, a sum certain must be specified and pertinent cost
information and documentation (e.g., invoices and cancelled checks)
attached, broken down by individual claim item and summarized; and

\(6\) The signature of a duly authorized representative of the
initiating party.

\(d\) Contract disputes shall be filed at the following address:

\(1\) Office of Dispute Resolution for Acquisition, AGC-70,

Federal Aviation Administration,

800 Independence Ave, S.W., Room 323,

Washington, DC 20591,

Telephone: (202) 267-3290,

Facsimile: (202) 267-3720; or

\(2\) other address as specified in 14 CFR Part 17.

\(e\) A contract dispute against the FAA shall be filed with the ODRA
within two (2) years of the accrual of the contract claim involved. A
contract dispute by the FAA against a contractor (excluding contract
disputes alleging warranty issues, fraud or latent defects) likewise
shall be filed within two (2) years after the accrual of the contract
claim. If an underlying contract entered into prior to the effective
date of this part provides for time limitations for filing of contract
disputes with the ODRA which differ from the aforesaid two (2) year
period, the limitation periods in the contract shall control over the
limitation period of this section. In no event will either party be
permitted to file with the ODRA a contract dispute seeking an equitable
adjustment or other damages after the contractor has accepted final
contract payment, with the exception of FAA claims related to warranty
issues, gross mistakes amounting to fraud or latent defects. FAA claims
against the contractor based on warranty issues must be filed within the
time specified under applicable contract warranty provisions. Any FAA
claims against the contractor based on gross mistakes amounting to fraud
or latent defects shall be filed with the ODRA within two (2) years of
the date on which the FAA knew or should have known of the presence of
the fraud or latent defect.

\(f\) A party shall serve a copy of the contract dispute upon the other
party, by means reasonably calculated to be received on the same day as
the filing is to be received by the ODRA.

\(g\) After filing the contract dispute, the contractor should seek
informal resolution with the Contracting Officer.

\(h\) The FAA requires continued performance with respect to contract
disputes arising under this contract, in accordance with the provisions
of the contract, pending a final FAA decision.

\(i\) The FAA will pay interest on the amount found due and unpaid from
(1) the date the Contracting Officer receives the contract dispute, or
(2) the date payment otherwise would be due, if that date is later,
until the date of payment. Simple interest on contract disputes shall be
paid at the rate fixed by the Secretary of the Treasury that is
applicable on the date the Contracting Officer receives the contract
dispute and then at the rate applicable for each 6-month period as fixed
by the Treasury Secretary until payment is made.

\(j\) Additional information and guidance about the ODRA dispute
resolution process for contract disputes can be found on the ODRA
Website at [http://www.faa.gov](http://www.faa.gov/).

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contracts.

**3.9.1-2** **Protest After Award** (August 1997)

\(a\) Upon receipt of a notice that a protest has been filed with the
FAA Office of Dispute Resolution, or a determination that a protest is
likely, the Administrator or his designee may instruct the Contracting
Officer) to direct the Contractor to stop performance of the work called
for by this contract. The order to the Contractor shall be in writing,
and shall be specifically identified as a stop-work order issued under
this clause. Upon receipt of the order, the Contractor shall immediately
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. Upon receipt of the final decision or other
resolution of the protest, the Contracting Officer shall either\--

\(1\) Cancel the stop-work order; or

\(2\) For other than cost-reimbursement contracts, terminate the work
covered by the order as provided in the \"Default\" or the \"Termination
for Convenience of the Government\" clause(s) of this contract; or

\(3\) For cost-reimbursement contracts, terminate the work covered by
the order as provided in the \"Termination\" clause of this contract.

\(b\) If a stop-work order issued under this clause is canceled either
before or after the final resolution of the protest, the Contractor
shall resume work. The Contracting Officer shall make for other than
cost-reimbursement contracts, an equitable adjustment in the delivery
schedule or contract price, or both; and for cost-reimbursement
contracts, an equitable adjustment in the delivery schedule, the
estimated cost, the fee, or a combination thereof, and in any other
terms of the contract that may be affected; and the contract shall be
modified, in writing, accordingly, 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

\(2\) The Contractor asserts its right to an adjustment within 30 days
after the end of the period of work stoppage; provided, that if the
Contracting Officer decides the facts justify the action, the
Contracting Officer may receive and act upon a proposal submitted at any
time before final payment under this contract.

\(c\) If a stop-work order is not canceled and the work covered by the
order is terminated for the convenience of the Government, the
Contracting Officer shall allow reasonable costs resulting from the
stop-work order in arriving at the termination settlement.

\(d\) If a stop-work order is not canceled and the work covered by the
order is terminated for default, the Contracting Officer shall allow, by
equitable adjustment or otherwise, reasonable costs resulting from the
stop-work order.

\(e\) The Government\'s rights to terminate this contract at any time
are not affected by action taken under this clause.

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contracts.

**3.9.1-3** **Protest** (November 2002)

AS A CONDITION OF SUBMITTING AN OFFER OR RESPONSE TO THIS SIR (OR OTHER
SOLICITATION, IF APPROPRIATE), THE OFFEROR OR POTENTIAL OFFEROR AGREES
TO BE BOUND BY THE FOLLOWING PROVISIONS RELATING TO PROTESTS:

\(a\) Protests concerning Federal Aviation Administration Screening
Information Requests (SIRs) or awards of contracts shall be resolved
through the Federal Aviation Administration (FAA) dispute resolution
system at the Office of Dispute Resolution for Acquisition (ODRA) and
shall be governed by the procedures set forth in 14 C.F.R. Parts 14 and
17, which are hereby incorporated by reference. Judicial review, where
available, will be in accordance with 49 U.S.C. 46110 and shall apply
only to final agency decisions. A protestor may seek review of a final
FAA decision only after its administrative remedies have been exhausted.

\(b\) Offerors initially should attempt to resolve any issues concerning
potential protests with the Contracting Officer. The Contracting Officer
should make reasonable efforts to answer questions promptly and
completely, and, where possible, to resolve concerns or controversies.
The protest time limitations, however, will not be extended by attempts
to resolve a potential protest with the Contracting Officer.

\(c\) The filing of a protest with the ODRA may be accomplished by mail,
overnight delivery, hand delivery, or by facsimile. A protest is
considered to be filed on the date it is received by the ODRA.

\(d\) Only an interested party may file a protest. An interested party
is one whose direct economic interest has been or would be affected by
the award or failure to award an FAA contract. Proposed subcontractors
are not \"interested parties\" within this definition.

\(e\) A written protest must be filed with the ODRA within the times set
forth below, or the protest shall be dismissed as untimely:

\(1\) Protests based upon alleged improprieties in a solicitation or a
SIR that are apparent prior to bid opening or the time set for receipt
of initial proposals shall be filed prior to bid opening or the time set
for the receipt of initial proposals.

\(2\) In procurements where proposals are requested, alleged
improprieties that do not exist in the initial solicitation, but which
are subsequently incorporated into the solicitation, must be protested
not later than the next closing time for receipt of proposals following
the incorporation.

\(3\) For protests other than those related to alleged solicitation
improprieties, the protest must be filed on the later of the following
two dates:

\(i\) Not later than seven (7) business days after the date the
protester knew or should have known of the grounds for the protest; or

\(ii\) If the protester has requested a post-award debriefing from the
FAA Product Team, not later than five (5) business days after the date
on which the Product Team holds that debriefing.

\(f\) Protests shall be filed at:

\(1\) Office of Dispute Resolution for Acquisition, AGC-70,

Federal Aviation Administration,

800 Independence Ave., S.W.,

Room 323,

Washington, DC 20591,

Telephone: (202) 267-3290,

Facsimile: (202) 267-3720; or

\(2\) other address as specified in 14 CFR Part 17.

\(g\) At the same time as filing the protest with the ODRA, the
protester shall serve a copy of the protest on the Contracting Officer
and any other official designated in the SIR for receipt of protests by
means reasonably calculated to be received by the Contracting Officer on
the same day as it is to be received by the ODRA. The protest shall
include a signed statement from the protester, certifying to the ODRA
the manner of service, date, and time when a copy of the protest was
served on the Contracting Officer and other designated official(s).

\(h\) Additional information and guidance about the ODRA dispute
resolution process for protests can be found on the ODRA Website at
[http://www.faa.gov](http://www.faa.gov/).

(End of provision)

PRESCRIPTION:

Shall be used in all SIR\'s.

**3.10.1-1** **Notice of Intent To Disallow Costs** (April 1996)

\(a\) Notwithstanding any other clause of this contract\--

\(1\) The Contracting Officer may at any time issue to the Contractor a
written notice of intent to disallow specified costs incurred or planned
for incurrence under this contract that have been determined not to be
allowable under the contract terms; and

\(2\) The Contractor may, after receiving a notice under subparagraph
(1) above, submit a written response to the Contracting Officer, with
justification for allowance of the costs. If the Contractor does respond
within 60 days, the Contracting Officer shall, within 60 days of
receiving the response, either make a written withdrawal of the notice
or issue a written decision.

\(b\) Failure to issue a notice under this \"Notice of Intent to
Disallow Costs\" clause shall not affect the Government\'s rights to
take exception to incurred costs.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts other than firm fixed price, when
cost-reimbursement, or fixed-price incentive contracts are contemplated.

**3.10.1-2** **Production Progress Reports** (April 1996)

\(a\) The Contractor shall prepare and submit to the Contracting Officer
the production progress reports specified in the contract Schedule.

\(b\) During any delay in furnishing a production progress report
required under this contract, the Contracting Officer may withhold from
payment an amount not exceeding \$25,000 or 5 percent of the amount of
this contract, whichever is less.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when production progress reporting
will be required.

**3.10.1-3** **Penalties for Unallowable Costs** (October 1996)

\(a\) Definition. Proposal, as used in this clause, means either-

\(1\) A final indirect cost rate proposal submitted by the Contractor
after the expiration of its fiscal year which:

\(i\) Relates to any payment made on the basis of billing rates; or

\(ii\) Will be used in negotiating the final contract price;

\(2\) The final statement of costs incurred and estimated to be incurred
under the \"Incentive Price Revision\" clause (if applicable), which is
used to establish the final contract price.

\(b\) Contractors which include unallowable indirect costs in a proposal
may be subject to penalties, as described in paragraph (d) below..

\(c\) The Contractor shall not include in any proposal any cost which is
unallowable, as defined in the FAA Contract Cost Principles.

\(d\) If the Contracting Officer determines that a cost submitted by the
Contractor in its proposal is unallowable , the Contractor shall be
assessed a penalty equal to:

\(1\) The amount of the disallowed cost allocated to this contract; plus

\(2\) Simple interest, to be computed:

\(i\) On the amount the Contractor was paid (whether as a progress or
billing payment) in excess of the amount to which the Contractor was
entitled; and

\(ii\) Using the applicable rate effective for each six-month interval
prescribed by the Secretary of the Treasury pursuant to Pub. L. 92-41
(85 Stat. 97).

\(e\) If the Contracting Officer determines that a cost submitted by the
Contractor in its proposal includes a cost previously determined to be
unallowable for that Contractor, then the Contractor will be assessed a
penalty in an amount equal to two times the amount of the disallowed
cost allocated to this contract.

\(f\) Determinations under paragraphs (d) and (e) of this clause, if
disputed, may be the basis of a claim under the \"Contract Disputes\"
clause.

\(g\) The Contracting Officer may waive the penalties in paragraph (d)
or (e) of this clause if the contractor demonstrates that the error was
unintentional, or the proposal is withdrawn prior to commencement of an
audit.

\(h\) Payment by the Contractor of any penalty assessed under this
clause does not constitute repayment to the Government of any
unallowable cost which has been paid by the Government to the
Contractor.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when reimbursement and incentive
type contracts are contemplated.

**3.10.1-4** **FOB Origin\--Government Bills of Lading or Prepaid
Postage** (April 1996)

\(a\) F.o.b. origin shipments shall be made on Government bills of
lading, or, if the supplies are mailable, via the U.S. Postal Service or
a foreign postal system, as appropriate, with postage costs prepaid by
the Contractor. Any direct charge for postage costs shall be listed as a
separate item on invoices for the supplies shipped. Use of agency
official indicia mail by Contractors is not authorized. Quantities shall
not be divided into mailable lots for the express purpose of avoiding
movement by other modes of transportation.

\(b\) If Government bills of lading are not furnished with the contract
or applicable ordering document, the Contractor shall obtain them from
the Contracting Officer or designated representative.

\(c\) Unless otherwise directed, the Contractor shall address overseas
parcel post to an ultimate DOD consignee in care of a designated Army,
Air Force, or Navy (fleet) post office and not to, or in care of, a
transportation officer, or other activity at a CONUS water or aerial
terminal for transshipment.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when f.o.b. origin shipments are
to be made using FAA bills of lading or prepaid postage.

**3.10.1-5** **FOB Government Bills of Lading or Indicia Mail** (April
1996)

\(a\) F.o.b. origin shipments shall be made on Government bills of
lading, or, if the supplies are mailable, via the U.S. Postal System,
using \`\`Penalty Permit Imprint\'\' indicia labels.

\(b\) If Government bills of lading are not furnished with the contract
or applicable ordering document, the Contractor shall obtain them from
the Contracting Officer or designated representative.

\(c\) Unless otherwise directed, the Contractor shall address overseas
parcel post to an ultimate DOD consignee in care of a designated Army,
Air Force, or Navy (fleet) post office and not to, or in care of, a
transportation officer, or other activity at a CONUS water or aerial
terminal for transshipment.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when f.o.b. origin shipments are to
be made using FAA bills of lading or indicia mail.

**3.10.1-6** **Nonrefundable, Nonrecurring Service Charge** (April 1996)

As provided herein, the Government will pay a nonrefundable,
nonrecurring charge when the rules and regulations of a Contractor
require that a customer pay (1) a charge for the initiation of service,
(2) a contribution in aid of construction, or (3) a nonrefundable
membership fee. This charge may be in addition to or in lieu of a
connection charge. Therefore, there is hereby added to the Contractor\'s
schedule a nonrefundable, nonrecurring charge for
\_\_\_\_\_\_\_\_\_\_\_\_\_ in the amount of \$\_\_\_\_\_\_\_\_\_\_\_\_\_
dollars payable \[specify dates or schedules\].

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when the FAA is required to pay a
nonrefundable, nonrecurring membership fee.

**3.10.1-7** **Bankruptcy** (April 1996)

In the event the Contractor enters into proceedings relating to
bankruptcy, whether voluntary or involuntary, the Contractor agrees to
furnish, by certified mail or electronic commerce method authorized by
the contract, written notification of the bankruptcy to the Contracting
Officer responsible for administering the contract. This notification
shall be furnished within five days of the initiation of the proceedings
relating to bankruptcy filing. This notification shall include the date
on which the bankruptcy petition was filed, the identity of the court in
which the bankruptcy petition was filed, and a listing of Government
contract numbers and contracting offices for all Government contracts
against which final payment has not been made. This obligation remains
in effect until final payment under this contract.

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contracts.

**3.10.1-8** **Suspension of Work** (August 1998)

\(a\) The Contracting Officer may order the Contractor, in writing, to
suspend, delay, or interrupt all or any part of the work of this
contract for the period of time that the Contracting Officer determines
appropriate for the convenience of the Government. The Contracting
Officer may, in emergency or life threatening situations notify the
contractor orally to suspend, delay or interrupt all or any part of the
work and issue the notice in writing immediately after the oral notice.

\(b\) If the performance of all or any part of the work is, for an
unreasonable period of time, suspended, delayed, or interrupted:

\(1\) by an act of the Contracting Officer in the administration of this
contract, or

\(2\) by the Contracting Officer\'s failure to act within the time
specified in this contract (or within a reasonable time if not
specified), an adjustment shall be made for any increase in the cost of
performance of this contract (excluding profit) necessarily caused by
the unreasonable suspension, delay, or interruption, and the contract
modified in writing accordingly.

However, no adjustment shall be made under this clause for any
suspension, delay, or interruption to the extent that performance would
have been so suspended, delayed, or interrupted by any other cause,
including the fault or negligence of the Contractor, or for which an
equitable adjustment is provided for or excluded under any other term or
condition of this contract.

\(c\) A claim under this clause shall not be allowed:

\(1\) for any costs incurred more than 20 days before the Contractor
shall have notified the Contracting Officer in writing of the act or
failure to act involved (but this requirement shall not apply as to a
claim resulting from a suspension order), and

\(2\) unless the claim, in an amount stated, is asserted in writing as
soon as practicable after the termination of the suspension, delay, or
interruption, but not later than the date of final payment under the
contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when a fixed-price construction or
architect-engineer contract is contemplated.

**3.10.1-9** **Stop-Work Order** (October 1996)

\(a\) The Contracting Officer may, at any time, by written order to the
Contractor, require the Contractor to stop all, or any part, of the work
called for by this contract for a period of 90 days after the order is
delivered to the Contractor, and for any further period to which the
parties may agree. The order shall be specifically identified as a
stop-work order issued under this clause. Upon receipt of the order, the
Contractor shall immediately 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
period of 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\--

\(1\) Cancel the stop-work order; or

\(2\) Terminate the work covered by the order as provided in the
termination for default or the termination for convenience clause of
this contract.

\(b\) If a stop-work order issued under this clause is canceled or the
period of the order or any extension thereof expires, the Contractor
shall resume work. The Contracting Officer shall make an equitable
adjustment in the delivery schedule or contract price, or both, and the
contract shall be modified, in writing, accordingly, 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

\(2\) The Contractor asserts its right to the adjustment within 30 days
after the end of the period of work stoppage; provided, that, if the
Contracting Officer decides the facts justify the action, the
Contracting Officer may receive and act upon a claim submitted at any
time before final payment under this contract.

\(c\) If a stop-work order is not canceled, and the work covered by the
order is terminated for the convenience of the Government, the
Contracting Officer shall allow reasonable costs resulting from the
stop-work order in arriving at the termination settlement.

\(d\) If a stop-work order is not canceled and the work covered by the
order is terminated for default, the Contracting Officer shall allow, by
equitable adjustment or otherwise, reasonable costs resulting from the
stop-work order.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for supplies, services, or
research and development.

**3.10.1-9/alt1** **Stop-Work Order Alternate I** (October 1996)

If this clause is inserted in a cost-reimbursement contract, substitute
in subparagraph (a)(2) \"termination clause\" for \"termination for
default or termination for convenience clause\" and in paragraph (b)
substitute the words \"an equitable adjustment in the delivery schedule,
the estimated cost, the fee, or a combination thereof, and in any other
terms of the contract that may be affected\" for the words \"an
equitable adjustment in the delivery schedule or contract price, or
both.\"

PRESCRIPTION:

Shall be used in SIR\'s and contracts which are cost reimbursement.

**3.10.1-10** **Stop-Work Order\--Facilities** (June 1999)

\(a\) The Contracting Officer may, at any time, by written order to the
Contractor, require the Contractor to stop all, or any part, of the
acquisition, construction, or installation work called for by this
contract for a period of 90 days after the order is delivered to the
Contractor, and for any further period to which the parties may agree.
The order shall be specifically identified as a stop-work order issued
under this clause. Upon receipt of the order, the Contractor shall, at
Government expense, immediately comply with its terms and take all
reasonable steps to minimize the incurrence of cost allocable to the
work covered by the order during the period of work stoppage. Within a
period of 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-

\(1\) Cancel the stop-work order; or

\(2\) Terminate the work covered by the order as provided in the
termination provisions clause of this contract.

\(b\) If a stop-work order issued under this clause is canceled or the
period of the order or any extension thereof expires, the Contractor
shall resume work. The Contracting Officer shall make an equitable
adjustment in the delivery completion schedule, the estimated cost, or
both, and the contract shall be modified, in writing, accordingly, 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

\(2\) The Contractor asserts its right to the adjustment within 30 days
after the end of the period of work stoppage; provided, that, if the
Contracting Officer decides the facts justify the action, the
Contracting Officer may receive and act upon a proposal submitted at any
time before final payment under this contract.

\(c\) If a stop-work order is not canceled and the work covered by the
order is terminated, the Contracting Officer shall allow reasonable
costs resulting from the stop-work order in arriving at the termination
settlement.

\(d\) An appropriate equitable adjustment may be made in any related
contract of the Contractor that provides for adjustment and is affected
by any stop-work order under this clause. The Government shall not be
liable to the Contractor for damages or loss of profits because of a
stop-work order issued under this clause.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when a facilities acquisition
contract or a consolidated facilities contract is contemplated.

**3.10.1-11** **Government Delay of Work** (April 1996)

\(a\) If the performance of all or any part of the work of this contract
is delayed or interrupted (1) by an act of the Contracting Officer in
the administration of this contract that is not expressly or impliedly
authorized by this contract, or (2) by a failure of the Contracting
Officer to act within the time specified in this contract, or within a
reasonable time if not specified, an adjustment (excluding profit) shall
be made for any increase in the cost of performance of this contract
caused by the delay or interruption and the contract shall be modified
in writing accordingly. Adjustment shall also be made in the delivery or
performance dates and any other contractual term or condition affected
by the delay or interruption. However, no adjustment shall be made under
this clause for any delay or interruption to the extent that performance
would have been delayed or interrupted by any other cause, including the
fault or negligence of the Contractor, or for which an adjustment is
provided or excluded under any other term or condition of this contract.

\(b\) A claim under this clause shall not be allowed:

\(1\) for any costs incurred more than 20 days before the Contractor
shall have notified the Contracting Officer in writing of the act or
failure to act involved, and

\(2\) unless the claim, in an amount stated, is asserted in writing as
soon as practicable after the termination of the delay or interruption,
but not later than the day of final payment under the contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when a fixed-price contract is
contemplated.

**3.10.1-12** **Changes\--Fixed-Price** (April 1996)

\(a\) The Contracting Officer may at any time, by 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:

\(1\) Drawings, designs, or specifications when the supplies to be
furnished are to be specially manufactured for the Government in
accordance with the drawings, designs, or specifications.

\(2\) Method of shipment or packing.

\(3\) Place of delivery.

\(b\) If any such change causes an increase or decrease in the cost of,
or the time required for, performance of any part of the work under this
contract, whether or not changed by the order, the Contracting Officer
shall make an equitable adjustment in the contract price, the delivery
schedule, or both, and shall modify the contract.

\(c\) The Contractor must assert its right to an adjustment under this
clause within 30 days from the date of receipt of the written order.
However, if the Contracting Officer decides that the facts justify it,
the Contracting Officer 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, the Contracting Officer 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 under the
\"Disputes\" clause. However, nothing in this clause shall excuse the
Contractor from proceeding with the contract as changed.

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contracts when fixed-price contracts for
supplies are contemplated.

**3.10.1-12/alt1** **Changes\--Fixed-Price Alternate I** (April 1996)

If the requirement is for services, other than architect-engineer or
other professional services, and no supplies are to be furnished,
substitute the following paragraph (a) for paragraph (a) of the basic
clause:

\(a\) The Contracting Officer may at any time, by 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 to be performed.

\(2\) Time of performance (i.e., hours of the day, days of the week,
etc.).

\(3\) Place of performance of the services.

PRESCRIPTION:

Shall be used in SIR\'s and fixed price contracts for services (other
than architect-engineer or other professional services) and no supplies
will be furnished.

**3.10.1-12/alt2** **Changes\--Fixed-Price Alternate II** (April 1996)

If the requirement is for services (other than architect-engineer
services, transportation, or research and development) and supplies are
to be furnished, substitute the following paragraph (a) for paragraph
(a) of the basic clause:

\(a\) The Contracting Officer may at any time, by 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 to be performed.

\(2\) Time of performance (i.e., hours of the day, days of the week,
etc.).

\(3\) Place of performance of the services.

\(4\) Drawings, designs, or specifications when the supplies to be
furnished are to be specially manufactured for the Government in
accordance with the drawings, designs, or specifications.

\(5\) Method of shipment or packing of supplies.

\(6\) Place of delivery.

PRESCRIPTION:

Shall be used in SIR\'s and fixed price contracts for services (other
than architect-engineer, transportation, or research and development)
and supplies will be furnished.

**3.10.1-12/alt3** **Changes\--Fixed-Price Alternate III** (April 1996)

If the requirement is for architect-engineer or other professional
services, substitute the following paragraph (a) for paragraph (a) of
the basic clause and add the following paragraph (f):

\(a\) The Contracting Officer may at any time, by written order, and
without notice to the sureties, if any, make changes within the general
scope of this contract in the services to be performed.

\(f\) No services for which an additional cost or fee will be charged by
the Contractor shall be furnished without the prior written
authorization of the Contracting Officer.

PRESCRIPTION:

Shall be used in SIR\'s and fixed price contracts for architect-engineer
or other professional services.

**3.10.1-12/alt4** **Changes\--Fixed-Price Alternate IV** (April 1996)

If the requirement is for transportation services, substitute the
following paragraph (a) for paragraph (a) of the basic clause:

\(a\) The Contracting Officer may at any time, by 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:

\(1\) Specifications.

\(2\) Work or services.

\(3\) Place of origin.

\(4\) Place of delivery.

\(5\) Tonnage to be shipped.

\(6\) Amount of Government-furnished property.

PRESCRIPTION:

Shall be used in SIR\'s and fixed price contracts for transportation
services.

**3.10.1-12/alt5** **Changes\--Fixed-Price Alternate V** (April 1996)

If the requirement is for research and development and it is desired to
include the clause, substitute the following subparagraphs (a) (1) and
(a)(3) and paragraph (b) for subparagraphs (a)(1) and (a)(3) and
paragraph (b) of the basic clause:

\(1\) Drawings, designs, or specifications.

\(3\) Place of inspection, delivery, or acceptance.

\(b\) If any such change causes an increase or decrease in the cost of,
or time required for, performing this contract, whether or not changed
by the order, the Contracting Officer shall make an equitable adjustment
in (1) the contract price, the time of performance, or both; and (2)
other affected terms of the contract, and shall modify the contract
accordingly.

PRESCRIPTION:

Shall be used in SIR\'s and contracts for fixed price research and
development.

**3.10.1-13** **Changes\--Cost-Reimbursement** (April 1996)

\(a\) The Contracting Officer may at any time, by 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:

\(1\) Drawings, designs, or specifications when the supplies to be
furnished are to be specially manufactured for the Government in
accordance with the drawings, designs, or specifications.

\(2\) Method of shipment or packing.

\(3\) Place of delivery.

\(b\) If any such change causes an increase or decrease in the estimated
cost of, or the time required for, performance of any part of the work
under this contract, whether or not changed by the order, or otherwise
affects any other terms and conditions of this contract, the Contracting
Officer shall make an equitable adjustment in the:

\(1\) estimated cost, delivery or completion schedule, or both;

\(2\) amount of any fixed fee; and

\(3\) other affected terms and shall modify the contract accordingly.

\(c\) The Contractor must assert its right to an adjustment under this
clause within 30 days from the date of receipt of the written order.
However, if the Contracting Officer decides that the facts justify it,
the Contracting Officer may receive and act upon a proposal submitted
before final payment of the contract.

\(d\) Failure to agree to any adjustment shall be a dispute under the
Disputes clause. However, nothing in this clause shall excuse the
Contractor from proceeding with the contract as changed.

\(e\) Notwithstanding the terms and conditions of paragraphs (a) and (b)
above, the estimated cost of this contract and, if this contract is
incrementally funded, the funds allotted for the performance of this
contract, shall not be increased or considered to be increased except by
specific written modification of the contract indicating the new
contract estimated cost and, if this contract is incrementally funded,
the new amount allotted to the contract. Until this modification is
made, the Contractor shall not be obligated to continue performance or
incur costs beyond the point established in the \"Limitation of Cost or
Limitation of Funds\" clause of this contract.

(End of clause)

PRESCRIPTION:

Shall be used in all cost reimbursement SIR\'s and contracts for
supplies.

**3.10.1-13/alt1** **Changes\--Cost-Reimbursement Alternate I** (April
1996)

If the requirement is for services and no supplies are to be furnished,
substitute the following paragraph (a) for paragraph (a) of the basic
clause:

\(a\) The Contracting Officer may at any time, by 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 to be performed.

\(2\) Time of performance (i.e., hours of the day, days of the week,
etc.).

\(3\) Place of performance of the services.

PRESCRIPTION:

Shall be used in cost reimbursement SIR\'s and contracts when services
and no supplies will be furnished.

**3.10.1-13/alt2** **Changes\--Cost-Reimbursement Alternate II** (April
1996)

If the requirement is for services and supplies are to be furnished,
substitute the following paragraph (a) for paragraph (a) of the basic
clause:

\(a\) The Contracting Officer may at any time, by 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 to be performed.

\(2\) Time of performance (i.e., hours of the day, days of the week,
etc.).

\(3\) Place of performance of the services.

\(4\) Drawings, designs, or specifications when the supplies to be
furnished are to be specially manufactured for the Government in
accordance with the drawings, designs, or specifications.

\(5\) Method of shipment or packing of supplies.

\(6\) Place of delivery.

PRESCRIPTION:

Shall be used in cost reimbursement SIR\'s and contracts when services
and supplies will be furnished.

**3.10.1-13/alt3** **Changes\--Cost-Reimbursement Alternate III** (April
1996)

If the requirement is for construction, substitute the following
paragraph (a) for paragraph (a) of the basic clause:

\(a\) The Contracting Officer may at any time, by written order, and
without notice to the sureties, if any, make changes within the general
scope of this contract in the plans and specifications or instructions
incorporated in the contract.

PRESCRIPTION:

Shall be used in cost reimbursement SIR\'s and contracts for
construction.

**3.10.1-13/alt4** **Changes\--Cost-Reimbursement Alternate IV** (April
1996)

If a facilities contract is contemplated, substitute the following
paragraphs (a) and (e) for paragraphs (a) and (e) of the basic clause:

\(a\) The Contracting Officer may at any time, by written order, and
without notice to the sureties, if any, make changes within the general
scope of this contract in the facilities or work described in the
schedule.

\(e\) Any related contract with the Contractor may be equitably adjusted
if it provides for adjustment and is affected by a change ordered under
this clause.

PRESCRIPTION:

Shall be used in cost reimbursement SIR\'s and contracts for a
facilities contract.

**3.10.1-13/alt5** **Changes\--Cost-Reimbursement Alternate V** (April
1996)

If the requirement is for research and development, and it is desired to
include the clause, substitute the following subparagraphs (a)(1) and
(a)(3) for subparagraphs (a)(1) and (a)(3) of the basic clause:

\(1\) Drawings, designs, or specifications.

\(3\) Place of inspection, delivery, or acceptance.

PRESCRIPTION:

Shall be used in cost reimbursement SIR\'s and contracts when a research
and development contract is contemplated.

**3.10.1-14** **Changes\--Time and Materials or Labor Hours** (April
1996)

\(a\) The Contracting Officer may at any time, by 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:

\(1\) Drawings, designs, or specifications.

\(2\) Method of shipment or packing.

\(3\) Place of delivery.

\(4\) Amount of Government-furnished property.

\(b\) If any change causes an increase or decrease in any hourly rate,
the ceiling price, or the time required for performance of any part of
the work under this contract, whether or not changed by the order, or
otherwise affects any other terms and conditions of this contract, the
Contracting Officer shall make an equitable adjustment in the:

\(1\) ceiling price,

\(2\) hourly rates,

\(3\) delivery schedule, and

\(4\) other affected terms, and shall modify the contract accordingly.

\(c\) The Contractor must assert its right to an adjustment under this
clause within 30 days from the date of receipt of the written order.
However, if the Contracting Officer decides that the facts justify it,
the Contracting Officer may receive and act upon a proposal submitted
before final payment of the contract.

\(d\) Failure to agree to any adjustment shall be a dispute under the
\"Disputes\" clause. However, nothing in this clause shall excuse the
Contractor from proceeding with the contract as changed.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when a time and material or
labor-hours contract is contemplated

**3.10.1-15** **Changes\--Construction, Dismantling, Demolition, or
Removal of Improvements** (July 1996)

\(a\) The Contracting Officer may, at any time, without notice to the
sureties, if any, by written order designated or indicated to be a
change order, make changes in the work within the general scope of the
contract, including changes-

\(1\) In the specifications (including drawings and designs);

\(2\) In the method or manner of performance of the work;

\(3\) In the Government-furnished facilities, equipment, materials,
services, or site; or

\(4\) Directing acceleration in the performance of the work.

\(b\) Any other written or oral order (which, as used in this paragraph
(b), includes direction, instruction, interpretation, or determination)
from the Contracting Officer that causes a change shall be treated as a
change order under this clause; provided, that the Contractor gives the
Contracting Officer written notice stating

\(1\) the date, circumstances, and source of the order and

\(2\) that the Contractor regards the order as a change order.

\(c\) Except as provided in this clause, no order, statement, or conduct
of the Contracting Officer shall be treated as a change under this
clause or entitle the Contractor to an equitable adjustment.

\(d\) If any change under this clause causes an increase or decrease in
the Contractor\'s cost of, or the time required for, the performance of
any part of the work under this contract, whether or not changed by any
such order, the Contracting Officer shall make an equitable adjustment
and modify the contract in writing. However, except for an adjustment
based on defective specifications, no adjustment for any change under
paragraph (b) of this clause shall be made for any costs incurred more
than 20 days before the Contractor gives written notice as required. In
the case of defective specifications for which the Government is
responsible, the equitable adjustment shall include any increased cost
reasonably incurred by the Contractor in attempting to comply with the
defective specifications.

\(e\) The Contractor must assert its right to an adjustment under this
clause within 30 days after:

\(1\) receipt of a written change order under paragraph (a) of this
clause or

\(2\) the furnishing of a written notice under paragraph (b) of this
clause, by submitting to the Contracting Officer a written statement
describing the general nature and amount of proposal, unless this period
is extended by the Government. The statement of proposal for adjustment
may be included in the notice under paragraph (b) above.

\(f\) No proposal by the Contractor for an equitable adjustment shall be
allowed if asserted after final payment under this contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for dismantling, demolition, or
removal of improvements, or when a fixed-price contract is contemplated.

**3.10.1-16** **Changes and Changed Conditions** (April 1996)

\(a\) The Contracting Officer may, in writing, order changes in the
drawings and specifications within the general scope of the contract.

\(b\) The Contractor shall promptly notify the Contracting Officer, in
writing, of subsurface or latent physical conditions differing
materially from those indicated in this contract or unknown unusual
physical conditions at the site before proceeding with the work.

\(c\) If changes under paragraph (a) or conditions under paragraph (b)
increase or decrease the cost of, or time required for performing the
work, the Contracting Officer shall make an equitable adjustment (see
paragraph (d)) upon submittal of a proposal for adjustment (hereafter
referred to as proposal) by the Contractor before final payment under
the contract.

\(d\) The Contracting Officer shall not make an equitable adjustment
under paragraph (b) unless-

\(1\) The Contractor has submitted and the Contracting Officer has
received the required written notice; or

\(2\) The Contracting Officer waives the requirement for the written
notice.

\(e\) Failure to agree to any adjustment shall be a dispute under the
\"Disputes\" clause.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for construction.

**3.10.1-17** **Change Order Accounting** (April 1996)

The Contracting Officer may require change order accounting whenever the
estimated cost of a change or series of related changes exceeds
\$100,000. The Contractor, for each change or series of related changes,
shall maintain separate accounts, by job order or other suitable
accounting procedure, of all incurred segregable, direct costs (less
allocable credits) of work, both changed and not changed, allocable to
the change. The Contractor shall maintain such accounts until the
parties agree to an equitable adjustment for the changes ordered by the
Contracting Officer or the matter is conclusively disposed of in
accordance with the \"Disputes\" clause.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for supply and research and
development contracts of significant technical complexity, if numerous
changes are anticipated.

**3.10.1-18** **Notification of Changes** (April 1996)

\(a\) Definitions.

\"Contracting Officer,\" as used in this clause, does not include any
representative of the Contracting Officer. Specifically Authorized
Representative (SAR), as used in this clause, means any person the
Contracting Officer has so designated by written notice (a copy of which
shall be provided to the Contractor) which shall refer to this
subparagraph and shall be issued to the designated representative before
the SAR exercises such authority.

\(b\) Notice. The primary purpose of this clause is to obtain prompt
reporting of Government conduct that the Contractor considers to
constitute a change to this contract. Except for changes identified as
such in writing and signed by the Contracting Officer, the Contractor
shall notify the Contracting Officer in writing promptly, within \-\--
(to be negotiated) calendar days from the date that the Contractor
identifies any Government conduct (including actions, inactions, and
written or oral communications) that the Contractor regards as a change
to the contract terms and conditions. On the basis of the most accurate
information available to the Contractor, the notice shall state\--

\(1\) The date, nature, and circumstances of the conduct regarded as a
change;

\(2\) The name, function, and activity of each Government individual and
Contractor official or employee involved in or knowledgeable about such
conduct;

\(3\) The identification of any documents and the substance of any oral
communication involved in such conduct;

\(4\) In the instance of alleged acceleration of scheduled performance
or delivery, the basis upon which it arose;

\(5\) The particular elements of contract performance for which the
Contractor may seek an equitable adjustment under this clause,
including-

\(i\) What contract line items have been or may be affected by the
alleged change;

\(ii\) What labor or materials or both have been or may be added,
deleted, or wasted by the alleged change;

\(iii\) To the extent practicable, what delay and disruption in the
manner and sequence of performance and effect on continued performance
have been or may be caused by the alleged change;

\(iv\) What adjustments to contract price, delivery schedule, and other
provisions affected by the alleged change are estimated;

\(6\) The Contractor\'s estimate of the time by which the Government
must respond to the Contractor\'s notice to minimize cost, delay or
disruption of performance.

\(c\) Continued performance. Following submission of the notice required
by (b) above, the Contractor shall diligently continue performance of
this contract to the maximum extent possible in accordance with its
terms and conditions as construed by the Contractor, unless the notice
reports a direction of the Contracting Officer or a communication from a
SAR of the Contracting Officer, in either of which events the Contractor
shall continue performance; provided, however, that if the Contractor
regards the direction or communication as a change as described in (b)
above, notice shall be given in the manner provided. All directions,
communications, interpretations, orders and similar actions of the SAR
shall be reduced to writing promptly and copies furnished to the
Contractor and to the Contracting Officer. The Contracting Officer shall
promptly countermand any action which exceeds the authority of the SAR.

\(d\) Government response. The Contracting Officer shall promptly,
within \-\-- (to be negotiated) calendar days after receipt of notice,
respond to the notice in writing. In responding, the Contracting Officer
shall either\--

\(1\) Confirm that the conduct of which the Contractor gave notice
constitutes a change and when necessary direct the mode of further
performance;

\(2\) Countermand any communication regarded as a change;

\(3\) Deny that the conduct of which the Contractor gave notice
constitutes a change and when necessary direct the mode of further
performance; or

\(4\) In the event the Contractor\'s notice information is inadequate to
make a decision under (1), (2), or (3) above, advise the Contractor what
additional information is required, and establish the date by which it
should be furnished and the date thereafter by which the Government will
respond.

\(e\) Equitable adjustments.

\(1\) If the Contracting Officer confirms that Government conduct
effected a change as alleged by the Contractor, and the conduct causes
an increase or decrease in the Contractor\'s cost of, or the time
required for, performance of any part of the work under this contract,
whether changed or not changed by such conduct, an equitable adjustment
shall be made\--

\(i\) In the contract price or delivery schedule or both; and

\(ii\) In such other provisions of the contract as may be affected.

\(2\) The contract shall be modified in writing accordingly. In the case
of drawings, designs or specifications which are defective and for which
the Government is responsible, the equitable adjustment shall include
the cost and time extension for delay reasonably incurred by the
Contractor in attempting to comply with the defective drawings, designs
or specifications before the Contractor identified, or reasonably should
have identified, such defect. When the cost of property made obsolete or
excess as a result of a change confirmed by the Contracting Officer
under this clause is included in the equitable adjustment, the
Contracting Officer shall have the right to prescribe the manner of
disposition of the property. The equitable adjustment shall not include
increased costs or time extensions for delay resulting from the
Contractor\'s failure to provide notice or to continue performance as
provided, respectively, in (b) and (c) above.

Note: The phrases contract price and cost wherever they appear in the
clause, may be appropriately modified to apply to cost-reimbursement or
incentive contracts, or to combinations thereof.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for negotiated R&D or for supply
contracts involving major systems/subsystems. The Contracting Officer
should insert appropriate information in the clause.

**3.10.1-19** **Modification Cost Proposal - Price Breakdown
(Construction)** (April 1996)

\(a\) The contractor, in connection with any proposal it makes for a
contract modification, shall furnish a price breakdown, itemized as
required by the Contracting Officer. The breakdown shall be in enough
detail to permit an analysis of all material, labor, equipment,
subcontract, and overhead costs, as well as profit, and shall cover all
work involved in the modification, whether such work was deleted, added
or changed. Any amount claimed for subcontracts shall be supported by
similar price breakdowns from those subcontractors.

\(b\) In addition, if the proposal includes a time extension, a
justification thereof shall also be furnished. Notwithstanding any other
provisions of this contract, it is mutually understood that the time
extension for changes in the work will depend upon the extent, if any,
by which the changes cause delay in the completion of the various
elements of work. The contract completion dates will be extended only
for those specific elements so delayed and the remaining contract
completion dates for all other portions of the work will not be altered.

\(c\) The proposal, together with the price breakdown and time extension
justification, shall be furnished by the date specified by the
Contracting Officer.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for construction.

**3.10.1-20** **Warranty\--Construction** (April 1996)

\(a\) In addition to any other warranties in this contract, the
Contractor warrants, except as provided in paragraph (i) of this clause,
that work performed under this contract conforms to the contract
requirements and is free of any defect in equipment, material, or design
furnished, or workmanship performed by the Contractor or any
subcontractor or supplier at any tier.

\(b\) This warranty shall continue for a period of 1 year from the date
of final acceptance of the work. If the Government takes possession of
any part of the work before final acceptance, this warranty shall
continue for a period of 1 year from the date the Government takes
possession.

\(c\) The Contractor shall remedy at the Contractor\'s expense any
failure to conform, or any defect. In addition, the Contractor shall
remedy at the Contractor\'s expense any damage to Government owned or
controlled real or personal property, when that damage is the result of
:

\(1\) The Contractor\'s failure to conform to contract requirements; or

\(2\) Any defect of equipment, material, workmanship, or design
furnished by the Contractor.

\(d\) The Contractor shall restore any work damaged in fulfilling the
terms and conditions of this clause. The Contractor\'s warranty with
respect to work repaired or replaced will run for 1 year from the date
of repair or replacement.

\(e\) The Contracting Officer will notify the Contractor, in writing,
within a reasonable time after the discovery of any failure, defect, or
damage.

\(f\) If the Contractor fails to remedy any failure, defect, or damage
within a reasonable time after receipt of notice, the Government shall
have the right to replace, repair, or otherwise remedy the failure,
defect, or damage at the Contractor\'s expense.

\(g\) With respect to all warranties, express or implied, from
subcontractors, manufacturers, or suppliers for work performed and
materials furnished under this contract, the Contractor shall:

\(1\) Obtain all warranties that would be given in normal commercial
practice;

\(2\) Require all warranties to be executed, in writing, for the benefit
of the Government, if directed by the Contracting Officer, and

\(3\) Enforce all warranties for the benefit of the Government if
directed by the Contracting Officer.

\(h\) In the event the Contractor\'s warranty under paragraph (b) of
this clause has expired, the Government may bring suit at its expense to
enforce a subcontractor\'s, manufacturer\'s, or supplier\'s warranty.

\(i\) Unless a defect is caused by the negligence of the Contractor or
subcontractor or supplier at any tier, the Contractor shall not be
liable for the repair of any defects of material or design furnished by
the Government nor for the repair of any damage that results from any
defect in Government furnished material or design.

\(j\) This warranty shall not limit the Government\'s rights under the
Inspection and Acceptance clause of this contract with respect to latent
defects, gross mistakes, or fraud.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for fixed price construction.

**3.10.1-21** **RESERVED.**

PRESCRIPTION:

**3.10.1-22** **Contracting Officer\'s Technical Representative** (July
1996)

\(a\) The Contracting Officer may designate other Government personnel
(known as the Contracting Officer\'s Technical Representative) to act as
his or her authorized representative for contract administration
functions which do not involve changes to the scope, price, schedule, or
terms and conditions of the contract. The designation will be in
writing, signed by the Contracting Officer, and will set forth the
authorities and limitations of the representative(s) under the contract.
Such designation will not contain authority to sign contractual
documents, order contract changes, modify contract terms, or create any
commitment or liability on the part of the Government different from
that set forth in the contract.

\(b\) The Contractor shall immediately contact the Contracting Officer
is there is any question regarding the authority of an individual to act
on behalf of the Contracting Officer under this contract.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts.

**3.10.1-23** **Contracting Officer\'s Representative\--Construction
Contracts** (July 1996)

\(a\) The Contracting Officer may appoint other Government personnel to
accomplish certain contract administration matters. While there shall be
various titles and divisions of duties for these individuals,
generically they are known as Contracting Officer\'s Technical
Representatives (COTR\'s). The Contracting Officer will provide written
notice of COTR appointment(s), setting forth the authorities and
limitations, to the Contractor within \_\_\_\_ calendar days prior to
the notice to proceed. COTR duties may include, but are not limited to:

\(1\) Perform as the authorized representative of the Contracting
Officer for technical matters, including interpretation of
specifications and drawings, and inspection and review of work
performed.

\(2\) Perform as the authorized representative of the Contracting
Officer for administrative matters, including reviewing payments, and
updated delivery schedules.

\(b\) These representatives are authorized to act for the Contracting
Officer in all specifically delegated matters pertaining to the
contract, except:

\(1\) contract modifications that change the contract price or cost,
technical requirements or time for performance, unless delegated field
modification authority;

\(2\) suspension or termination of the Contractor\'s right to proceed,
either for default or for convenience;

\(3\) final decisions on any matters subject to appeal, e.g., disputes
under the \"Contract Disputes\" clause; and

\(4\) final acceptance under the contract.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for construction. The Contracting
Officer should insert appropriate information in the clause.

**3.10.1-24** **Notice of Delay** (November 1997)

If the Contractor becomes unable to complete the contract work at the
time(s) specified because of technical difficulties, notwithstanding the
exercise of good faith and diligent efforts in the performance of the
work called for hereunder, the contractor shall give the Contracting
officer written notice of the anticipated delay and the reasons
therefor. Such notice and reasons shall be delivered promptly after the
condition creating the anticipated delay becomes known to the
contractor, but in no event less than forty-five (45) days before the
completion date specified in this contract, unless otherwise directed by
the Contracting Officer. When notice is so required, the Contracting
officer may extend the time specified in the Schedule for such period as
deemed advisable.

(End of clause)

PRESCRIPTION:

May be included in SIR\'s and contracts when receiving contractor\'s
notice regarding delay is in the best interest of the Government.

**3.10.1-25** **Novation and Change-Of-Name Agreements** (January 2003)

a\. In the event the Contractor wishes the Government to recognize a
successor in interest to the contract due to a complete transfer of
assets required to perform the contract or an applicable merger, the
Contractor must submit a written request to the Contracting Officer with
the required documentation. This is required in order to obtain the
Government\'s consent for the successor Contractor to assume contract
performance and receive payments for deliveries.

b\. For a change of Contractor name the contractor agrees to provide the
necessary documentation to establish that a legal name change has been
made, including any revision to payment addresses/accounts.

c\. The Contractor agrees to follow the procedures and provide the
documents, as requested by the cognizant Contracting Officer, described
in FAA Procurement Guidance entitled \"Novation and Change-Of-Name
Agreements\" published at
<http://fast.faa.gov/procurement_guide/html/3-10-1.htm>.

d\. When it is in the Government\'s interest not to concur in the
transfer of the contract from one company to another, the Contractor
remains subject to all contract terms and conditions including
termination for default should the Contractor fail to perform.

(End of Clause)

PRESCRIPTION:

Shall be used in all SIRs and contracts.

**3.10.2-1** **Subcontracts (Fixed-Price Contracts)** (April 1996)

\(a\) This clause does not apply to firm-fixed-price contracts and
fixed-price contracts with economic price adjustment. However, it does
apply to subcontracts resulting from unpriced modifications to such
contracts.

\(b\) Subcontract, as used in this clause, includes but is not limited
to purchase orders, and changes and modifications to purchase orders.
The Contractor shall notify the Contracting Officer reasonably in
advance of entering into any subcontract if the Contractor does not have
an approved purchasing system and if the subcontract:

\(1\) Is proposed to exceed \$100,000; or

\(2\) Is one of a number of subcontracts with a single subcontractor,
under this contract, for the same or related supplies or services, that
in the aggregate are expected to exceed \$100,000.

\(c\) The advance notification required by paragraph (b) above shall
include-

\(1\) A description of the supplies or services to be subcontracted;

\(2\) Identification of the type of subcontract to be used;

\(3\) Identification of the proposed subcontractor and an explanation of
why and how the proposed subcontractor was selected, including the
competition obtained;

\(4\) The proposed subcontract price and the Contractor\'s cost or price
analysis;

\(5\) The subcontractor\'s current, complete, and accurate cost or
pricing data and Certificate of Current Cost or Pricing Data, if
required by other contract provisions;

\(6\) The subcontractor\'s Disclosure Statement or Certificate relating
to Cost Accounting Standards when such data are required by other
provisions of this contract; and

\(7\) A negotiation memorandum reflecting-

\(i\) The principal elements of the subcontract price negotiations;

\(ii\) The most significant considerations controlling establishment of
initial or revised prices;

\(iii\) The reason cost or pricing data were or were not required;

\(iv\) The extent, if any, to which the Contractor did not rely on the
subcontractor\'s cost or pricing data in determining the price objective
and in negotiating the final price;

\(v\) The extent, if any, to which it was recognized in the negotiation
that the subcontractor\'s cost or pricing data were not accurate,
complete, or current; the action taken by the Contractor and
subcontractor; and the effect of any such defective data on the total
price negotiated;

\(vi\) The reasons for any significant difference between the
Contractor\'s price objective and the price negotiated; and

\(vii\) A complete explanation of the incentive fee or profit plan when
incentives are used. The explanation shall identify each critical
performance element, management decisions used to quantify each
incentive element, reasons for the incentives, and a summary of all
trade-off possibilities considered.

\(d\) The Contractor shall obtain the Contracting Officer\'s written
consent before placing any subcontract for which advance notification is
required under paragraph (b) above. However, the Contracting Officer may
ratify in writing any such subcontract. Ratification shall constitute
the consent of the Contracting Officer.

\(e\) Even if the Contractor\'s purchasing system has been approved, the
Contractor shall obtain the Contracting Officer\'s written consent
before placing subcontracts identified below:

\(f\) Unless the consent or approval specifically provides otherwise,
neither consent by the Contracting Officer to any subcontract nor
approval of the Contractor\'s purchasing system shall constitute a
determination:

\(1\) of the acceptability of any subcontract terms or conditions,

\(2\) of the acceptability of any subcontract price or of any amount
paid under any subcontract, or

\(3\) to relieve the Contractor of any responsibility for performing
this contract.

\(g\) No subcontract placed under this contract shall provide for
payment on a cost-plus-a-percentage-of-cost basis.

\(h\) The Government reserves the right to review the Contractor\'s
purchasing system.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a fixed-price contract is
contemplated.

**3.10.2-1/alt1** **Subcontracts (Fixed-Price Contracts) Alternate I**
(April 1996)

If the Contracting Officer elects to delete the requirement for advance
notification of, or consent to, any subcontracts that were evaluated
during negotiations (this election is not authorized for acquisition of
major systems and subsystems or their components), add the following
paragraph (i) to the basic clause:

\(i\) Paragraphs (b) and (c) of this clause do not apply to the
following subcontracts, which were evaluated during negotiations:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\[list subcontracts\]

PRESCRIPTION:

Should be used in SIR\'s and contracts when the Contracting Officer
elects not to require advance notification or consent to subcontracts
evaluated during negotiations. The Contracting Officer should insert
appropriate information in the clause.

**3.10.2-2** **Subcontracts (Cost-Reimbursement and Ceiling Priced
Contracts)** (October 1996)

\(a\) Subcontract, as used in this clause, includes but is not limited
to purchase orders, and changes and modifications to purchase orders.
The Contractor shall notify the Contracting Officer reasonably in
advance of entering into any subcontract if:

\(1\) The proposed subcontract is of the cost-reimbursement,
time-and-materials, or labor-hour type;

\(2\) The proposed subcontract is fixed-price and exceeds either
\$100,000 or 5 percent of the total estimated cost of this contract;

\(3\) The proposed subcontract has experimental, developmental, or
research work as one of its purposes; or

\(4\) This contract is not a facilities contract and the proposed
subcontract provides for the fabrication, purchase, rental,
installation, or other acquisition of special test equipment valued in
excess of \$25,000 or of any items of facilities.

\(b\)

\(1\) In the case of a proposed subcontract that

\(i\) is of the cost-reimbursement, time-and-materials, or labor-hour
type and is estimated to exceed \$25,000, including any fee,

\(ii\) is proposed to exceed \$100,000, or (iii) is one of a number of
subcontracts with a single subcontractor, under this contract, for the
same or related supplies or services that, in the aggregate, are
expected to exceed \$100,000, the advance notification required by
paragraph (a) above shall include the information specified in
subparagraph (2) below.

\(2\)

\(i\) A description of the supplies or services to be subcontracted.

\(ii\) Identification of the type of subcontract to be used.

\(iii\) Identification of the proposed subcontractor and an explanation
of why and how the proposed subcontractor was selected, including the
competition obtained.

\(iv\) The proposed subcontract price and the Contractor\'s cost or
price analysis.

\(v\) The subcontractor\'s current, complete, and accurate cost or
pricing data and Certificate of Current Cost or Pricing Data, if
required by other contract provisions.

\(vi\) The subcontractor\'s Disclosure Statement or Certificate relating
to Cost Accounting Standards when such data are required by other
provisions of this contract.

\(vii\) A negotiation memorandum reflecting-

\(A\) The principal elements of the subcontract price negotiations;

\(B\) The most significant considerations controlling establishment of
initial or revised prices;

\(C\) The reason cost or pricing data were or were not required;

\(D\) The extent, if any, to which the Contractor did not rely on the
subcontractor\'s cost or pricing data in determining the price objective
and in negotiating the final price;

\(E\) The extent to which it was recognized in the negotiation that the
subcontractor\'s cost or pricing data were not accurate, complete, or
current; the action taken by the Contractor and the subcontractor; and
the effect of any such defective data on the total price negotiated;

\(F\) The reasons for any significant difference between the
Contractor\'s price objective and the price negotiated; and

\(G\) A complete explanation of the incentive fee or profit plan when
incentives are used. The explanation shall identify each critical
performance element, management decisions used to quantify each
incentive element, reasons for the incentives, and a summary of all
trade-off possibilities considered.

\(c\) The Contractor shall obtain the Contracting Officer\'s written
consent before placing any subcontract for which advance notification is
required under paragraph (a) above. However, the Contracting Officer may
ratify in writing any such subcontract. Ratification shall constitute
the consent of the Contracting Officer.

\(d\) If the Contractor has an approved purchasing system and the
subcontract is within the scope of such approval, the Contractor may
enter into the subcontracts described in subparagraphs (a)(1) and (a)(2)
of this clause without the consent of the Contracting Officer.

\(e\) Even if the Contractor\'s purchasing system has been approved, the
Contractor shall obtain the Contracting Officer\'s written consent
before placing subcontracts identified below:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(f\) Unless the consent or approval specifically provides otherwise,
neither consent by the Contracting Officer to any subcontract nor
approval of the Contractor\'s purchasing system shall constitute a
determination:

\(1\) of the acceptability of any subcontract terms or conditions,

\(2\) of the allowability of any cost under this contract, or

\(3\) to relieve the Contractor of any responsibility for performing
this contract.

\(g\) No subcontract placed under this contract shall provide for
payment on a cost-plus-a-percentage-of-cost basis.

\(h\) The Contractor shall give the Contracting Officer immediate
written notice of any action or suit filed and prompt notice of any
claim made against the Contractor by any subcontractor or vendor that,
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.

\(i\)

(1)Reserved.

\(2\) Additionally, the Contractor shall include in each cost-
reimbursement subcontract under this contract a requirement that the
subcontractor insert the substance of the appropriate modified
subparagraph referred to in subparagraph (1) above in each lower tier
price redetermination or incentive price revision subcontract under that
subcontract.

\(j\) To facilitate small business participation in subcontracting, the
Contractor agrees to provide payments on subcontracts under this
contract that are fixed-price subcontracts with small business concerns
in conformity with the standards for customary payments, as in effect on
the date of this contract. The Contractor further agrees that the need
for such financing payments will not be considered a handicap or adverse
factor in the award of subcontracts.

\(k\) The Government reserves the right to review the Contractor\'s
purchasing system.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a cost-reimbursement or
ceiling priced contract is contemplated.

**3.10.2-3** **Subcontracts (Time-and-Materials and Labor-Hour
Contracts)** (April 1996)

\(a\) Subcontract, as used in this clause, includes but is not limited
to purchase orders, and changes and modifications to purchase orders.
The Contractor shall obtain the Contracting Officer\'s written consent
before placing any subcontract for furnishing any of the work called for
in this contract, except for purchase of raw material or commercial
stock items.

\(b\) No subcontract placed under this contract shall provide for
payment on a cost-plus-a-percentage-of-cost basis.

\(c\) The Government reserves the right to review the Contractor\'s
purchasing system.

\(d\) Unless the consent or approval specifically provides otherwise,
neither consent by the Contracting Officer to any subcontract nor
approval of the Contractor\'s purchasing system shall constitute a
determination:

\(1\) of the acceptability of any subcontract terms or conditions,

\(2\) of the acceptability of any subcontract price or of any amount
paid under any subcontract, or

\(3\) to relieve the Contractor of any responsibility for performing
this contract.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a time-and-materials or
labor-hour contracts is contemplated.

**3.10.2-4** **Subcontractors and Outside Associates and Consultants**
(April 1996)

Any subcontractors and outside associates or consultants required by the
Contractor in connection with the services covered by the contract will
be limited to individuals or firms that were specifically identified and
agreed to during Screening Information Request (SIR) communications. The
Contractor shall obtain the Contracting Officer\'s written consent
before making any substitution for these subcontractors, associates, or
consultants.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a fixed-price
architect-engineer contract is contemplated.

**3.10.2-5** **Competition in Subcontracting** (January 1998)

The Contractor shall select subcontractors (including suppliers) on a
competitive basis to the maximum practical extent consistent with the
objectives and requirements of the contract.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts if the contract will be other
than fixed price awarded with price competition/prices set by law or
regulation.

**3.10.2-6** **Subcontracts for Commercial Items and Commercial
Components** (April 1996)

I. Definition.

\(a\) \"Commercial item,\" as used in this clause, means:

\(1\) Any item, other than real property, that is of a type customarily
used for nongovernmental purposes and that\--

\(A\) Has been sold, leased, or licensed to the general public; or

\(B\) Has been offered for sale, lease, or license to the general
public;

\(2\) Any item that evolved from an item described in paragraph I(a)(1)
of this clause through advances in technology or performance and that is
not yet available in the commercial marketplace, but will be available
in the commercial marketplace in time to satisfy the delivery
requirements under a pending Government contract;

\(3\) Any item that would satisfy a criterion expressed in paragraphs
I(a)(1) or (a)(2) of this clause, but for-

\(A\) Modifications of a type customarily available in the commercial
marketplace; or

\(B\) \'Minor\' modifications of a type not customarily available in the
commercial marketplace made to meet Federal Government requirements.
\'Minor\' modifications means modifications that do not significantly
alter the nongovernmental function or essential physical characteristics
of an item or component, or change the purpose of a process. Factors to
be considered in determining whether a modification is minor include the
value and size of the modification and the comparative value and size of
the final product. Dollar values and percentages may be used as
guideposts, but are not conclusive evidence that a modification is
minor.

\(4\) Any combination of items meeting the requirements of paragraphs
I(a)(1), (2), (3), or (5) of this clause that are of a type customarily
combined and sold in combination to the general public;

\(5\) Installation services, maintenance, services, repair services,
training services, and other services if such services are procured for
support of an item referred to in paragraphs I(a)(1), (2), (3), or (4)
of this clause, and if the source of such services\--

\(A\) Offers such services to the general public and the Federal
Government contemporaneously and under similar terms and conditions; and

\(B\) Offers to use the same work force for providing the Federal
Government with such services as the source uses for providing such
services to the general public;

\(6\) Services of a type offered and sold competitively in substantial
quantities in the commercial marketplace based on established catalog or
market prices for specific tasks performed, under standard commercial
terms and conditions. This does not include services that are sold based
on hourly rates without an established catalog or market price for a
specific service performed;

\(7\) Any item, combination of items, or service referred to in
subparagraphs I(a)(1) through (a)(6), notwithstanding the fact that the
item, combination of items, or service is transferred between or among
separate divisions, subsidiaries, or affiliates of a Contractor; or

\(8\) A nondevelopmental item, if the procuring agency determines the
item was developed exclusively at private expense and sold in
substantial quantities, on a competitive basis, to multiple State and
local Governments.

\(b\) \"Subcontract,\" as used in this clause, includes a transfer of
commercial items between divisions, subsidiaries, or affiliates of the
Contractor or subcontractor at any tier.

II\. To the maximum extent practicable, the Contractor shall
incorporate, and require its subcontractors at all tiers to incorporate,
commercial items or nondevelopmental items as components of items to be
supplied under this contract.

III\. Notwithstanding any other clause of this contract, the Contractor
is not required to include any FAA Acquisition Management System
provision or clause, other than those listed below to the extent they
are applicable and as may be required to establish the reasonableness of
prices, in a subcontract at any tier for commercial items or commercial
components:

\(i\) Equal Opportunity (E.O. 11246);

\(ii\) Affirmative Action for Special Disabled and Vietnam Era Veterans
(38 U.S.C. 4212(a));

\(iii\) Affirmative Action for Handicapped Workers (29 U.S.C. 793); and

\(iv\) Preference for Privately Owned U.S.-Flagged Commercial Vessels
(46 U.S.C. 1241) (flow down not required for subcontracts awarded
beginning May 1, 1996).

IV\. The Contractor shall include the terms of this clause, including
this paragraph IV, in subcontracts awarded under this contract.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for supplies or services other
than commercial items.

**3.10.3-1** **Definitions** (April 2004)

\(a\) Accessory item - an item that facilitates or enhances the
operation of plant equipment but which is not essential for its
operation.

\(b\) Agency-peculiar property - Government-owned personal property that
is peculiar to the mission of an agency (e.g., military or space
property). It excludes Government material, special test equipment,
special tooling, and facilities.

\(c\) Auxiliary item - an item without which the basic unit of plant
equipment cannot operate.

\(d\) Common item - material that is common to the applicable Government
contract and the Contractor\'s other work.

\(e\) Contractor-acquired property (CAP) - property acquired or
otherwise provided by the Contractor for performing a contract and to
which the Government has title.

\(f\) Contractor inventory -

\(1\) Any property acquired by and in the possession of a Contractor or
subcontractor under a contract for which title is vested in the
Government and which exceeds the amounts needed to complete full
performance under the entire contract;

\(2\) Any property that the Government is obligated or has the option to
take over under any type of contract as a result either of any changes
in the specifications or plans thereunder or of the termination of the
contract (or subcontract thereunder), before completion of the work, for
the convenience or at the option of the Government; and

\(3\) Government-furnished property that exceeds the amounts needed to
complete full performance under the entire contract.

\(g\) Contracting Officer Technical Representative (COTR) a designated
representative of the Contracting Officer responsible for the technical
aspects of contract administration

\(h\) Custodial records - written memoranda of any kind, such as
requisitions, issue hand receipts, tool checks, and stock record books,
used to control items issued from tool cribs, tool rooms, and
stockrooms.

\(i\) Discrepancies incident to shipment - all deficiencies incident to
shipment of Government property to or from a Contractor\'s facility
whereby differences exist between the property purported to have been
shipped and property actually received. Such deficiencies include loss,
damage, destruction, improper status and condition coding, errors in
identity or classification, and improper consignment.

\(j\) Facilities - when used in other than a facilities contract, means
property used for production, maintenance, research, development, or
testing. It includes plant equipment and real property. It does not
include material, special test equipment, special tooling, or
agency-peculiar property.

\(k\) Facilities contract - a contract under which Government facilities
are provided to a Contractor; or subcontractor by the Government for use
in connection with performing one or more related contracts for supplies
or services. A \"related contract\" as used in this clause, means a
Government contract or subcontract for supplies or services under which
the use of the facilities is or may be authorized. It is used
occasionally to provide special tooling or special test equipment.
Facilities contracts may take any of the following forms:

\(1\) Facilities acquisition contract providing for the acquisition,
construction , and installation of facilities.

\(2\) Facilities use contract providing for the use, maintenance,
accountability, and disposition of facilities.

\(3\) A consolidated facilities contract, which is a combination of
facilities acquisition and a facilities use contract.

\(l\) Government-furnished property (GFP) - property in the possession
of, or directly acquired by, the Government and subsequently made
available to the Contractor.

\(m\) Government production and research property - Government-owned
facilities, Government owned special test equipment, and special Blank
Side-tooling to which the Government has title or the right to acquire
title.

\(n\) Government property - all property owned by or leased to the
Government or acquired by the Government under the terms of the
contract. It includes both Government-furnished property and
Contractor-acquired property as defined in this section.

\(o\) Individual item record - a separate card, form, document or
specific line(s) of computer data used to account for one item of
property.

\(p\) Line item - a single line entry on a reporting form that indicates
a quantity of property having the same description and condition code
from any one contract at any one reporting location.

\(q\) Material - property that may be incorporated into or attached to a
deliverable end item or that may be consumed or expended in performing a
contract. It includes assemblies, components, parts, raw and processed
materials, and small tools and supplies that may be consumed in normal
use in performing a contract.

\(r\) Nonprofit organization - any corporation, foundation, trust, or
institution operated for scientific, educational, or medical purposes,
not organized for profit, and no part of the net earnings of which
inures to the benefit of any private shareholder or individual.

\(s\) Nonseverable - when related to Government production and research
property, means property that cannot be removed after erection or
installation without substantial loss of value or damage to the property
or to the premises where installed.

\(t\) Personal property - property of any kind or interest in it, except
real property, records of the Federal Government, and naval vessels of
the following categories: battleships, cruisers, aircraft carriers,
destroyers, and submarines.

\(u\) Plant clearance - all actions relating to the screening,
redistribution, and disposal of Contractor inventory from a
Contractor\'s plant or work site. The term \'Contractor\'s plant\'
includes a Contractor-operated Government facility.

\(v\) Plant clearance officer - an authorized representative of the
Contracting Officer assigned responsibility for plant clearance.

\(w\) Plant clearance period - the period beginning on the effective
date of contract completion or termination and ending 90 days (or such
longer period as may be agreed to) after receipt by the Contracting
Officer of acceptable inventory schedules for each property
classification. The final phase of the plant clearance period means that
period after receipt of acceptable inventory schedules.

\(x\) Plant equipment - personal property of a capital nature (including
equipment, machine tools, test equipment, furniture, vehicles, and
accessory and auxiliary items) for use in manufacturing supplies, in
performing services, or for any administrative or general plant purpose.
It does not include special tooling or special test equipment.

\(y\) Precious metals - uncommon and highly valuable metals
characterized by their superior resistance to corrosion and oxidation.
Included are silver, gold, and the platinum group metals-platinum,
palladium, iridium, osmium, rhodium, and ruthenium.

z\) Property - all property, both real and personal. It includes
facilities, material, special tooling, special test equipment, and
agency-peculiar property.

(aa) Property Administrator (PA) - an authorized representative of
Contracting Officer assigned to administer the contract requirements and
obligations relating to Government property.

(bb) Public body - any State, Territory, or possession of the United
States, any political subdivision thereof, the District of Columbia, the
Commonwealth of Puerto Rico, any agency or instrumentality of any of the
foregoing, any Indian tribe, or any agency of the Federal Government.

\(cc\) Real property - land and rights in land, ground improvements,
utility distribution systems, and buildings and other structures. It
does not include foundations and other work necessary for installing
special tooling, special test equipment, or plant equipment.

(dd) Reportable property - Contractor inventory that must be reported
for screening in accordance with this subpart before disposition as
surplus, to a separate contract or to a special contract requirement
governing their use or disposition.

(ee) Reporting activity - the Government activity that initiates the
Standard Form 120, Report of Excess Personal Property (or when
acceptable to GSA, by data processing output).

(ff) Salvage - property that because of its worn, damaged, deteriorated,
or incomplete condition or specialized nature, has no reasonable
prospect of sale or use as serviceable property without major repairs,
but has some value in excess of its scrap value.

(gg) Scrap - personal property that has no value except for its basic
material content.

(hh) Screening completion date - the date on which all screening
required by this subpart is to be completed. It includes screening
within the Government and the donation screening period.

\(ii\) Serviceable or usable property - property that has a reasonable
prospect of use or sale either in its existing form or after minor
repairs or alterations.

(jj) Special test equipment - either single or multipurpose integrated
test units engineered, designed, fabricated, or modified to accomplish
special purpose testing in performing a contract. It consists of items
or assemblies of equipment including standard or general purpose items
or components that are interconnected and interdependent so as to become
a new functional entity for special testing purposes. It does not
include material, special tooling, facilities (except foundations and
similar improvements necessary for installing special test equipment),
and plant equipment items used for general plant testing purposes.

(kk) Special tooling - jigs, dies, fixtures, molds, patterns, taps,
gauges, other equipment and manufacturing aids, all components of these
items, and replacement of these items, which are of such a specialized
nature that without substantial modification or alteration their use is
limited to the development or production of particular supplies or parts
thereof or to the performance of particular services. It does not
include material, special test equipment, facilities (except foundations
and similar improvements necessary for installing special tooling),
general or special machine tools, or similar capital items.

(ll) Stock record - perpetual inventory record which shows by
nomenclature the quantities of each item received and issued and the
balance on hand.

\(mm\) Summary Record - a separate card, form, document or specific
line(s) of computer data used to account for multiple quantities of a
line item of special tooling, special test equipment, or plant equipment
costing less than \$5,000 per unit.

(nn) Surplus property - Contractor inventory not required by any Federal
agency.

(oo) Surplus release date (SRD) - the date on which screening of
personal property for Federal use is completed and the property is not
needed for any Federal use. On that date, property becomes surplus and
is eligible for donation.

(pp) Termination inventory - any property purchased, supplied,
manufactured, furnished, or otherwise acquired for the performance of a
contract subsequently terminated and properly allocable to the
terminated portion of the contract. It includes Government-furnished
property. It does not include any facilities, material, special test
equipment, or special tooling that are subject to a separate contract or
to a special contract requirement governing their use or disposition.

(qq) Utility distribution system - includes distribution and
transmission lines, substations, or installed equipment forming an
integral part of the system by which gas, water, steam, electricity,
sewerage, or other utility services are transmitted between the outside
building or structure in which the services are used and the point of
origin, disposal, or connection with some other system. It does not
include communication services.

(rr) Work-in-process - material that has been released to manufacturing,
engineering, design or other services under the contract and includes
undelivered manufactured parts, assemblies, and products, either
complete or incomplete.

(End of clause)

PRESCRIPTION:

Shall be used in all SIRs and contracts when any of the clauses 3.10.3-2
through 3.10.3-7/alt 1 are used.

**3.10.3-2** **Government Property - Basic Clause** (April 2004)

Government property is all property owned by or leased to the
Government/FAA or acquired by the Government/FAA under the terms of the
contract. It includes both Government-furnished property and
Contractor-acquired property. Government and FAA are synonymous
throughout this document.

\(a\) Government-Furnished Property.

\(1\) The FAA should deliver to the Contractor, for use in connection
with and under the terms of this contract, the Government-furnished
property (GFP) also referred to as Federal Aviation Administration (FAA)
Furnished Property, collectively known as Government property described
in the Schedule or specifications together with any related data and
information that the Contractor may request and is reasonably required
for the intended use of the GFP.

\(2\) The delivery or performance dates for this contract are based upon
the expectation that GFP suitable for use (except for GFP \"as is\")
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 the contract\'s delivery or performance dates.

\(3\) If the Contractor receives GFP is received by the Contractor in a
condition not suitable for the intended use, the Contractor shall, upon
receipt, notify the Contracting Officer (CO), detailing the facts, and,
as directed by the Property Administrator and at FAA expense, either
repair, modify, return, or otherwise dispose of the property. After
completing the directed action and upon written request of the
Contractor, the Contracting Officer may make an equitable adjustment as
provided in Section A (e) of this clause.

\(4\) If GFP is not delivered to the Contractor by the required time,
the Contracting Officer will, upon the Contractor\'s timely written
request, make a determination of the delay, if any, caused the
Contractor and shall make an equitable adjustment in accordance with
Section A (e) of this clause.

\(b\) Changes in Government-furnished property.

\(1\) The Contracting Officer may, by written notice, decrease GFP
provided or to be provided under this contract, or substitute other GFP
for the property to be provided by the Government, or to be acquired by
the Contractor for the Government, under this contract. The Contractor
shall promptly take such action as the Property Administrator may direct
regarding the removal, shipment, or disposal of the GFP covered by such
notice.

\(2\) Upon the Contractor\'s written request, the Contracting Officer,
will make an equitable adjustment to the contract in accordance with
paragraph (h) of this clause, if the Government has agreed in the
Schedule to make the property available for performing this contract and
there is any;

\(i\) Decrease or substitution in this property pursuant to subparagraph
(b)(1) above; or

\(ii\) Withdrawal of authority to use this property, if provided under
any other contract or lease.

\(c\) Title in Government property.

The Government shall retain title to all GFP and Contractor-acquired
property (CAP) (collectively referred to as \"Government property\").

\(d\) Use of Government property

The Government property shall be used only for performing this contract
unless otherwise provided in this contract or approved by the
Contracting Officer.

.

Section A - Management of Government Property in Contractor\'s
Possession

\(a\) The Contractor shall be directly responsible and accountable for
all Government property provided under this contract, including GFP and
CAP in the possession or control of a subcontractor and should comply
with associated Federal Aviation Administration (FAA) property clauses
and contract requirements.

\(b\) The Contractor shall establish and maintain a program for the use,
maintenance, repair, protection, and preservation of Government property
in accordance with sound industrial practice and the provisions of FAA
Acquisition Management System (AMS) Clauses Section 3.10.3 Government
Property in effect on the date of this contract. The provisions of the
AMS Clauses Section 3.10.3 are hereby incorporated by reference and made
a part of this contract.

\(c\) Access. The FAA and all its designees shall have access at all
reasonable times to the premises in which any Government property is
located for the purpose of inspecting the Government property.

\(d\) Risk of loss or damage to Government Property.

\(1\) Unless otherwise provided in this contract, the Contractor assumes
the risk of, and shall be responsible for, any loss or destruction of,
or damage to, Government property upon its delivery to the Contractor or
upon passage of title to the Government under paragraph (c) Title in
Government Property of this clause. However, the Contractor is not
responsible for reasonable wear and tear to Government property or for
Government property properly consumed in performing this contract.

\(2\) If damage occurs to Government property, the risk of which has
been assumed by the FAA under this contract, the FAA will replace the
items or the Contractor shall make such repairs as the FAA directs.
However, if the Contractor cannot effect such repairs within the time
required, the Contractor shall dispose of the property as directed by
the Property Administrator. When any property for which the FAA is
responsible is replaced or repaired, the Contracting Officer will make
an equitable adjustment to GFP records in accordance with Section A (e)
of this clause.

\(e\) Equitable adjustment. When this clause specifies an equitable
adjustment, it shall be made to any affected contract provision in
accordance with the procedures of the Changes clause. When appropriate,
the Contracting Officer may initiate an equitable adjustment in favor of
the FAA. The right to an equitable adjustment shall be the Contractor\'s
exclusive remedy. The FAA will not be liable to suit for breach of
contract for any delay in delivery of Government-furnished property;
delivery of GFP in a condition not suitable for its intended use; a
decrease in or substitution of GFP; or failure to repair or replace GFP
for which the FAA is responsible.

\(f\) Final accounting and disposition of Government property. Upon
completing this contract, or at such earlier dates as may be determined
by the Contracting Officer, the Contractor shall submit, in a form
acceptable to the Property Administrator, inventory schedules covering
all items of Government property (including any resulting scrap) not
consumed in performing this contract or delivered to the FAA. The
Contractor shall prepare for shipment, deliver f.o.b. origin/f.o.b.
destination, or dispose of the Government property as directed by the
Contracting Officer. The net proceeds of any such disposal shall be
credited to the contract price or shall be paid to the FAA as directed
by the Contracting Officer.

\(g\) Abandonment and restoration of Contractor\'s premises. Unless
otherwise provided herein, the FAA:

\(1\) May abandon any Government property in place, at which time all
obligations of the FAA regarding such abandoned Government property
shall cease; and

\(2\) Has no obligation to restore or rehabilitate the Contractor\'s
premises under any circumstances (e.g., abandonment, disposition upon
completion of need, or upon contract completion). However, if the GFP
(listed in the Schedule or specifications) is withdrawn or is unsuitable
for the intended use, or if other Government property is substituted,
then the equitable adjustment under Section A (e) of this clause may
properly include restoration or rehabilitation costs.

\(h\) Communications. All communications under this clause shall be in
writing.

\(i\) Overseas Contracts. If this contract is to be performed outside of
the United States of America, its territories, or possessions, the words
\"Government\" and \"Government-furnished\" (wherever they appear in
this clause) shall be construed as \"United States Government\" and
\"United States Government-furnished,\" respectively.

\(j\) Contractor responsibility.

\(1\) In accordance with (b) above, the Contractor shall establish and
maintain a property control system (PCS) to control, protect, preserve,
use, maintain, and repair all Government property in accordance with
sound industrial and business practices and the requirements of this
contract. The PCS shall be in writing unless the Property Administrator
determines that maintaining a written system is unnecessary. The PCS
shall be reviewed and, if satisfactory, approved in writing by the
Property Administrator.

\(2\) With regard to subcontractors, the PCS shall include procedures
for the Contractor to maintain oversight of the GFP provided to
subcontractors and require subcontractors to comply with contract
requirements by flowing down all contract property requirements to
subcontractors. The Contractor shall require its subcontractors
possessing or controlling GFP to adequately safeguard and maintain GFP
and that it is used only as authorized by the contract.

\(3\) The PCS shall include procedures to ensure property disposition is
in accordance with the instructions of the Contracting Officer or
designated representative, including any return to the supplier for
appropriate credit whenever feasible.

Section B - Review and Correction of Contractors\' Property Control
Systems (April 2004)

\(a\) The review and approval of a contractor\'s property control system
shall be accomplished by the agency responsible for contract
administration at a contractor\'s plant or installation. If another
Government agency has reviewed and approved the Contractor\'s property
control system, the FAA may accept that approval if there is an
interagency agreements with the approving agency. Otherwise, the
Property Administrator will conduct a property control system review.

\(b\) The Contracting Officer or the representative assigned the
responsibility as Property

Administrator shall review contractors\' property control systems to
ensure compliance with the Government property clauses of the contract.

\(c\) The Property Administrator shall notify the Contractor in writing
when its property control system does not comply with FAA\'s contract
requirements and shall request prompt correction of deficiencies. If the
Contractor does not correct the deficiencies within a specified period
of time, the Property Administrator shall request action by the
Contracting Officer administering the contract. The Contracting Officer
shall-

\(1\) Notify the Contractor in writing of any required corrections and
establish a schedule for completion of actions:

\(2\) Caution the Contractor that failure to take the required
corrective actions within the time specified will result in withholding
or withdrawing system approval; and

\(3\) Advise the Contractor that its liability for loss of or damage to
Government property may increase if approval is withheld or withdrawn.

\(4\) Audit of property control system.

The FAA may audit the Contractor\'s PCS as frequently as conditions
warrant. These audits may take place at any time during contract
performance, upon contract completion or termination, or at any time
thereafter during the period the Contractor is required to retain such
records. The Contractor shall make all such records and related
correspondence available to the auditors.

Section C - Contractor\'s Liability (April 2004)

\(a\) Subject to the terms of the contract and the circumstances
surrounding the particular case, the Contractor may be liable for
shortages, loss, damages, or destruction of Government property. The
Contractor may also be liable when the use or consumption of Government
property unreasonably exceeds the allowances provided for by the
contract, the bill of material, or other appropriate criteria.

\(1\) The Contractor shall investigate and report to the Property
Administrator and the Contracting Officer\'s Technical Representative,
all cases of loss, damage or destruction of Government property in its
possession or control as soon as the facts become known or when
requested by the Property Administrator. A report shall be furnished
when completed and accepted products or end items are lost, damaged or
destroyed while in the Contractor\'s possession or control.

\(2\) The Contractor shall require any of its subcontractors possessing
or controlling Government property accountable under the contract to
investigate and report all instances of loss, damage or destruction of
such property.

Section D - Relief from Responsibility (April 2004)

\(a\) Unless the contract or Contracting Officer provides otherwise, the
Contractor should be relieved of property control responsibility for
Government property under the following circumstances:

\(1\) The Property Administrator determines that reasonable and proper
consumption of property in the performance of the contract has occurred.

\(2\) The Property Administrator authorizes retention by the Contractor
in return for appropriate consideration from the Contractor;

\(3\) The Property Administrator authorizes the sale of property,
provided the proceeds are returned to the Government;

\(4\) The property is transferred to another contractor.

\(b\) Nonprofit organizations are relieved of responsibility for
property when title to the property is transferred to the Contractor.

Section E - Acquisition of Government Property (April 2004)

\(a\) The Contractor may obtain Government property through a transfer
from an FAA office, another contract, or by securing excess property.
The Contractor may be authorized to acquire property by purchasing it
from GSA supply sources (this requires a special contract authorization)
from a private vendor, or may be required to fabricate, lease or rent
the property. Regardless of how the Contractor acquires property; the
Contracting Officer must authorize any use of Government property, under
a FAA contract in writing.

\(b\) The Contractor\'s property control system shall include procedures
to ensure that; acquisition authority exists; items ordered are in
accordance with quantities specified in the contract; existing equipment
on-hand is screened before submitting requisitions; and, material
controls are established.

\(c\) Receipts for Government property.

The Contractor shall provide written receipts for all
Contractor-acquired property before submitting its request for payment
for the property. For FAA-furnished property, the Contractor shall
provide the required receipt immediately upon receipt of the property.
All receipts shall be provided to the Contracting Officer\'s Technical
Representative (COTR).

\(d\) Discrepancies incident to shipment.

\(1\) Government-furnished property. If overages, shortages, or damages
are discovered upon receipt of GFP, the Contractor shall provide a
statement of the condition and apparent causes to the COTR. Official
records shall reflect the quantity actually received.

\(2\) Contractor-acquired property. The Contractor shall remedy
overages, shortages, or damages in shipment of Contractor-acquired
property from a vendor or supplier. However, when the shipment has moved
by Bill of Lading and carrier liability is indicated, the Contractor
shall report the discrepancy in accordance with paragraph (1) above.

Section F - Special Tooling (April 2004)

\(a\) Title. The Government retains title to Government-owned special
tooling and option to take title to all special tooling subject to this
clause until such time as title or option to take title is relinquished
by the Contracting Officer as provided for in subparagraphs (i)(2) and
(i)(3) Section F of this clause.

\(b\) Risk of loss. Except to the extent that the Government shall have
otherwise assumed the risk of loss to special tooling applicable to this
clause, in the event of the loss, theft or destruction of or damage to
any such property, the repair or replacement shall be accomplished by
the Contractor at its own expense.

\(c\) Special tooling furnished by the Government.

\(1\) Except as otherwise provided in this contract, all
Government-furnished special tooling is provided \"as is\". The
Government makes no warranty whatsoever with respect to special tooling
furnished \"as is,\" except that the property is in the same condition
when placed at the f.o.b. point specified in the solicitation as when
last available for inspection by the Contractor under the solicitation.

\(2\) The Contractor may repair any special tooling made available on an
\"as is\" basis. Such repair will be at the Contractor\'s expense,
except as otherwise provided in this clause. Such property may be
modified as necessary for use under this contract at the contractor\'s
expense, except as otherwise directed by the Contracting Officer. Any
repair or modification of property furnished \"as is\" shall not affect
the title of the Government.

\(3\) If there is any change in the condition of special tooling
furnished \"as is\" from the time inspected or last available for
inspection under the solicitation to the time placed on board at the
location specified in the solicitation or the Government directs a
change in the quantity of special tooling furnished or to be furnished,
and such change will adversely affect the Contractor, the Contractor
shall, upon receipt of the property, notify the Contracting Officer
detailing the facts, and, as directed by the Contracting Officer,
either:

\(i\) return such items at the Government\'s expense or otherwise
dispose of the property, or

\(ii\) effect repair to return the property to its condition when
inspected under the solicitation or, if not inspected, last available
for inspection under the solicitation.

After completing the directed action and upon written request of the
Contractor, the Contracting Officer shall equitably adjust any
contractual provisions affected by the return, disposition, or repair in
accordance with procedures provided for in the Changes clause of this
contract. The foregoing provisions for adjustment are the exclusive
remedy available to the Contractor, and the Government shall not be
otherwise liable for any delivery of special tooling in a condition or
in quantities other than that when originally offered.

\(d\) Use of special tooling.

The Contractor may use special tooling subject to this clause on other
Government effort when specifically approved in writing by the
Contracting Officer for this contract and the Contracting Officer for
the contract under which the special tooling will be used. Any other use
of the special tooling should be subject to advance written approval of
the Contracting Officer. In the event the Government elects to remove
any special tooling that is required for continued contract performance,
the contract shall be equitably adjusted in accordance with paragraph
(l) Section F of this clause.

\(e\) Property control.

\(1\) Records. The Contractor\'s special tooling records shall provide
the following minimum information regarding each item of special tooling
subject to this clause and shall be made available for Government
inspection at all reasonable times:

\(i\) Number or code of the contract to which the tooling is accountable
and the number or code of the contract for which the tooling was
originally acquired or fabricated.

\(ii\) Retention codes as defined below:

\(A\) Primary Code. Assign one of the following to each item of special
tooling:

Code A. Spares Tooling. Required to produce a provisioned spare

part or assembly.

Code B. Judgment (Insurance) Tooling. Fabrication tools for parts that
are not provisioned spares but which in the judgment of the Contractor
will be required at some time for logistic support of the end item.

Code C. Rate Tooling. Necessary to economically produce increased rates
(e.g., for mobilization or surge) but not essential for parts
fabrication at low production rates.

Code D. Assembly Tooling. Required for manufacture of the end product
but not required for production of spare parts. Those items having no
postproduction need except for potential modification or resumed
production programs.

\(B\) Secondary Code. Assign one or more of the following codes, as
applicable, to each item of special tooling:

Code 1. Repair Tooling. Items that are capable of being used for repair
of provisioned parts or assemblies.

Code 2. Replaceable Tooling. Spares or judgment tooling (primary
retention codes A or B) which, in the opinion of the Contractor, can be
effectively and economically replaced by \"soft\" tooling on an \"as
required\" basis in lieu of retention of the \"hard\" production tooling
for supporting postproduction requirements.

Code 3. Maintenance Tooling. Items that are capable of being used for
depot level maintenance of the applicable end item or components
thereof.

Code 4. Crash Damage Tooling. Items which apply to provisioned or
nonprovisioned parts or assemblies which are designated as or have the
potential of being required for crash damage repairs.

\(iii\) Nomenclature, function, or comparable code.

\(iv\) Tool part number or code.

\(v\) Tool identification number, or quantity of each tool part number
or code, if tool identification number is not assigned.

\(vi\) Part number(s) of item(s) on which used (complete hierarchy of
part numbers).

\(vii\) Unit price. (Estimates are acceptable.)

\(viii\) Storage method code. Assign one of the following:

Code J. Inside storage.

Code K. Outside storage.

Code L. Other.

\(ix\) Estimated weight of tool, if over 25 pounds.

\(x\) Estimated volume of tool, if over 3 cubic feet.

\(xi\) Location of Contractor, subcontractor, vendor for each item. Use
Federal Supply Code for Manufacturers (FSCM), or name and address if
code is not available.

\(xii\) All operation sheets or other data as are necessary to show the
manufacturing operation or processes for which such items were used,
designed, or modified.

\(2\) Identification or tagging. To the extent practicable, the
Contractor shall identify all special tooling subject to this clause in
accordance with the Contractor\'s identification procedures.

\(f\) Maintenance. The Contractor shall maintain special tooling in
accordance with sound industrial practice. These requirements do not
apply to those items designated by the Contracting Officer for disposal
as scrap or identified as of no further interest to the Government under
paragraph (i)

Section F of this clause.

\(g\) Identification of excess special tooling. The Contractor shall
promptly identify and report all special tooling in excess of the
amounts needed to complete full performance under this contract (see
subdivision (h)(2)(i) Section F of this clause).

\(h\) Lists of special tooling. The Contractor shall periodically
prepare and distribute lists of special tooling as described below:

\(1\) Special tooling list.

The list shall be furnished within 60 days after delivery of the first
production end item under this contract or completion of the initial
provisioning process, whichever is later, and shall include all special
tooling subject to this clause as of the reporting date. However, if
this contract represents the final production contract, the Contractor
shall provide this list of all tools not later than 180 days prior to
scheduled delivery of the last production end item. If this is a
contract for storage of special tooling, the list shall be provided
within 60 days of contract implementation.

\(2\) Excess special tooling list.

\(i\) Excess special tooling. Except for items subject to subdivision
(h)(2)(ii) Section F of this clause, lists of special tooling excess to
this contract shall be furnished within 60 days of the date that the
item is determined to be excess. The Contractor shall include in this
list the information prescribed in Format of lists, subparagraph (h)(3)
Section F of this clause, as well as the applicable excess code as
follows:

Code V. Excess to contract requirements with no follow-on requirements.

Code W. Excess to contract requirements but can be used to support
actual or anticipated follow-on requirements.

Code X. Excess due to changes in design or specification of the end
items.

Code Y. Excess due to nonserviceable or nonrepairable condition.

Code Z. Other.

\(ii\) Termination inventory. The Contractor shall submit these items on
SF 1432 Inventory Schedule D (Special Tooling and Special Test
Equipment) and SF 1433 Inventory Schedule D (Continuation Sheet). The
Contractor may use computer generated inventory schedules provided no
change is made in the name, content, or sequence of the data elements.
All essential elements of data must be included and the form must be
signed. Format and content of this submission will be as prescribed by
subparagraph (h)(3) Format of lists, of this clause. When subcontractor
termination inventory is involved, the subcontractor shall execute the
certificate (SF 1432/SF 1433).

\(3\) Format of lists. Lists furnished by the Contractor shall state the
type of list and shall include all information from subparagraph (e)(1),
Records, of this clause, items (i) through (xii). All lists will be
grouped by primary retention code as prescribed in subdivision
(e)(1)(ii)(A) of this clause and further listed in tool part number
sequence.

\(4\) Distribution of lists. The Contractor shall submit two copies of
lists to each of the following recipients unless otherwise directed:

\(i\) The Contracting Officer.

\(ii\) The Contracting Officer\'s Technical Representative

(iii)The Administrative Contracting Officer.

\(iv\) The inventory control point designated by the contracting office.

\(v\) Disposition instructions.

The Contracting Officer shall provide the Contractor with written
disposition instructions within 180 days of receipt of the list as
prescribed by subparagraph (h)(1) of this clause and within 90 days of
the receipt of excess special tooling lists reported in accordance with
subparagraph (h)(2) of this clause. The Contracting Officer may direct
disposition by any of the methods listed in subparagraphs (i)(1) through
(i)(3) of this clause, or a combination of such methods. The Contractor
shall comply with such disposition instructions.

\(1\) The Contracting Officer may identify specific items of special
tooling to be retained or give the Contractor a list specifying the
products, parts, or services including follow-on requirements for which
the Government may require special tooling and request the Contractor to
identify all usable items of special tooling on hand that were designed
for or used in the production or performance of such products, parts, or
services. Once items of usable special tooling required by the
Government are identified, the Contracting Officer may:

\(i\) Direct the Contractor to transfer specified items of special
tooling to follow-on contracts requiring their use. Those items shall be
furnished for use on the contract(s) as specified by the Contracting
Officer and shall be subject to the provisions of the gaining
contract(s); or

\(ii\) Request the Contractor to enter into an appropriate storage
contract for special tooling specified to be retained by the Contractor
for the Government. Tooling to be stored shall be stored pursuant to a
storage contract between the Government and the Contractor; or

\(iii\) Direct the Contractor to transfer title to the Government (to
the extent not previously transferred) and deliver to the Government
those items of special tooling, which are specified for removal from the
Contractor\'s plant.

\(2\) The Contracting Officer may direct the Contractor to sell, or
dispose of as scrap, for the account of the Government, any special
tooling not specified by the Government pursuant to subparagraph (i)(1)
of this clause. To the extent that the Contractor incurs any costs
occasioned by compliance with such direction, for which it is not
otherwise compensated, the contract price shall be equitably adjusted in
accordance with the Changes clause of this contract. The net proceeds of
all sales shall either be credited to the cost of contract performance
or shall be otherwise paid to the Government as directed by the
Contracting Officer. Sale of special tooling to the prime Contractor or
any of its subcontractors is subject to the prior written approval of
the Contracting Officer.

\(3\) The Contracting Officer may furnish the Contractor with a
statement disclaiming further Government interest or right in specified
special tooling.

\(4\) Restoration of Contractor\'s premises. Unless otherwise provided
in this contract, the Government has no obligation to restore or
rehabilitate the Contractor\'s premises under any circumstances (e.g.,
abandonment, disposition upon completion of need, or upon contract
completion). However, if special tooling is withdrawn or if other
special tooling is substituted, then the equitable adjustment under
paragraph (l) Section F of this clause may properly include restoration
or rehabilitation costs.

\(j\) Access to special tooling. The Contractor shall provide access to
special tooling subject to this clause at all reasonable times to all
individuals designated by the Contracting Officer.

\(k\) Storage or shipment. The Contractor shall promptly arrange for
either the shipment or the storage of special tooling specified in
accordance with the final disposition instructions in subdivisions
(i)(1)(ii) or (i)(1)(iii) of this clause. Tooling to be shipped shall be
properly packaged, packed, and marked in accordance with the directions
of the Contracting Officer. All operation sheets or other appropriate
data necessary to show the manufacturing operations or processes for
which the items were used or designed shall accompany special tooling to
be shipped or stored or shall otherwise be provided to the Government as
directed by the Contracting Officer. To the extent that the Contractor
incurs costs for storage, shipment, packing, crating, or handling under
this paragraph and not otherwise compensated for, the contract price
shall be equitably adjusted in accordance with the Changes clause of
this contract.

\(l\) Equitable adjustment. When this clause specifies an equitable
adjustment, it shall be made to any affected contract provision in
accordance with the procedures of the Changes clause. When appropriate,
the Contracting Officer may initiate an equitable adjustment in favor of
the Government. The right to an equitable adjustment shall be the
contractor\'s exclusive remedy. The Government shall not be liable to
suit for breach of contract for:

\(1\) Any delay in delivery of Government-furnished special tooling;

\(2\) Delivery of Government-furnished special tooling in a condition
not suitable for its intended use;

\(3\) A decrease in or substitution of specified tooling; or

\(4\) Failure to repair or replace Government-furnished special tooling
for which the Government is responsible.

\(m\) Subcontract provisions. In order to perform this contract, the
Contractor may place subcontracts (including purchase orders) involving
the use of special tooling. If the full cost of the tooling is charged
to those subcontracts, the Contractor agrees to include in the
subcontract appropriate provisions to obtain Government rights and data
comparable to the rights of the Government under this clause (unless the
Contractor and Contracting Officer agree in writing that such rights are
not of interest to the Government). The Contractor agrees to exercise
such rights for the benefit of the Government as directed by the
Contracting Officer.

Section G - Special Test Equipment (April 2004)

\(a\) The Contractor may either acquire or fabricate special test
equipment at FAA expense when the equipment is not otherwise itemized in
this contract and the prior approval of the Contracting Officer has been
obtained. The Contractor shall provide the Contracting Officer with a
written notice, at least 30 days in advance, of the Contractor\'s
intention to acquire or fabricate the special test equipment. As a
minimum, the notice shall also include an estimated aggregate cost of
all items and components of the equipment the individual cost of which
is less than \$5,000, and the following information on each item or
component of equipment costing \$5,000 or more:

\(1\) The end use application and function of each proposed special test
unit, identifying special characteristics and the reasons for the
classification of the test unit as special test equipment.

\(2\) A complete description identifying the items to be acquired and
the items to be fabricated by the Contractor.

\(3\) The estimated cost of the item of special test equipment or
component.

\(4\) A statement that intra-plant screening of Contractor and FAA-owned
special test equipment and components has been accomplished and that
none are available for use in performing this contract.

\(b\) The FAA may furnish any special test equipment or components
rather than approve their acquisition or fabrication by the Contractor.
Such FAA-furnished items shall be subject to the Government property
clause; except that the FAA should not be obligated to deliver such
items any sooner than the Contractor could have acquired or fabricated
them after expiration of the 30-day notice period in paragraph (a)
Section G of this clause. However, unless the FAA notifies the
Contractor of its decision to furnish the items within the 30-day notice
period, the Contractor may proceed to acquire or fabricate the equipment
or components subject to any other applicable provisions of this
contract.

\(c\) The Contractor shall, in any subcontract that provides that
special test equipment or components may be acquired or fabricated for
the FAA, insert provisions that conform substantially to the language of
this clause, including this paragraph (d). The Contractor shall furnish
the names of such subcontractors to the Contracting Officer.

\(d\) If an engineering change requires either the acquisition or
fabrication of new special test equipment or substantial modification of
existing special test equipment the Contractor shall comply with Section
G, paragraph (a) above. In so complying, the Contractor shall identify
the change order, which requires the proposed acquisition, fabrication,
or modification.

Section H \_ Government Furnished Information (April 2004)

\(a\) The Contractor shall manage Government Furnished Information (GFI)
as any other Government asset in accordance with the terms of the
contract. The Contractor shall record all GFI promptly upon receipt.

\(b\) When practical, the Contractor shall tag or label the GFI
indicating FAA ownership and contract number, as a minimum. The GFI
shall be used only for the performance of this contract, unless
otherwise approved by the Contracting Officer.

\(c\) Special controls shall be provided to safeguard sensitive GFI.
Access to sensitive GFI shall be limited. Records shall be maintained to
track the movement of GFI. Inventory reports of GFI shall be provided in
accordance with the terms and conditions of the contract.

\(d\) When GFI is no longer required for the contract, the Contractor
shall notify the FAA in writing and request disposal instructions.
Unless otherwise specified in the contract, all GFI shall be returned to
FAA in the original format delivered to the Contractor.

\(e\) The Contractor shall establish a flowdown of responsibility for
property control provisions to subcontractors that have Government
furnished information in their possession and control.

Section I - Government Property Furnished \"As Is\" (April 2004)

\(a\) The FAA makes no warranty whatsoever with respect to Government
property furnished \"as is,\" except that the property is in the same
condition when placed at the f.o.b. point specified in the solicitation
as when inspected by the Contractor pursuant to the solicitation or, if
not inspected by the Contractor, as when last available for inspection
under the solicitation.

\(b\) The Contractor may repair any property made available on an \"as
is\" basis. Such repair will be at the Contractor\'s expense except as
otherwise provided in this clause. Such property may be modified at the
Contractor\'s expense, but only with the written permission of the
Contracting Officer. Any repair or modification of property furnished
\"as is\" shall not affect the title of the Government.

\(c\) If there is any change in the condition of Government property
furnished \"as is\" from the time inspected or last available for
inspection under the solicitation to the time placed on board at the
location specified in the solicitation, and such change will adversely
affect the Contractor, the Contractor shall, upon receipt of the
property, notify the Contracting Officer detailing the facts and, as
directed by the Contracting Officer, either (1) return such property at
the Government\'s expense or otherwise dispose of the property or (2)
effect repairs to return the property to its condition when inspected
under the solicitation or, if not inspected, last available for
inspection under the solicitation. After completing the directed action
and upon written request of the Contractor, the Contracting Officer
shall equitably adjust any contractual provisions affected by the
return, disposition, or repair in accordance with the procedures
provided for in the Changes clause of this contract. The foregoing
provisions for adjustment are the exclusive remedy available to the
Contractor, and the Government shall not be otherwise liable for any
delivery of Government property furnished \"as is\" in a condition other
than that in which it was originally offered.

\(d\) Except as otherwise provided in this clause, Government property
furnished \"as is\" shall be governed by the Government Property clause
of this contract.

Section J - Identification of Government Property (April 2004)

\(a\) Upon receipt of Government property, the Contractor shall
promptly:

\(1\) Identify the property in accordance with agency regulations;

\(2\) Mark the property in accordance with this section; and

\(3\) Record the property in its property control records.

\(b\) (1) Except for the following, the Contractor shall mark all
Government property with an identifier of FAA ownership:

\(i\) Items issued to individuals for use in their work (e.g.,
protective clothing or tool crib tools) where adequate physical control
is maintained over the items.

\(ii\) Property of a bulk type, or where its general nature of packing
or handling precludes adequate marking.

\(iii\) Where the Property Administrator agrees that marking is
impractical.

\(2\) Exempted items shall be entered and described on the accountable
property records.

\(c\) (1) In addition to marking with an indication of Government
ownership, the following property shall be marked with a serial number
in accordance with procedures approved by the Property Administrator:

\(i\) Special tooling.

\(ii\) Special test equipment.

\(iii\) Components of special test equipment that have an acquisition
cost of \$5,000 or more and are incorporated in a manner that makes
removal and reutilization feasible and economical.

\(iv\) Plant equipment.

\(v\) Accessory or auxiliary equipment associated with a specific item
of plant equipment that is recorded on the property records, if
necessary to assure return with the associated basic item.

\(2\) The Contractor shall record assigned numbers on all applicable
documents pertaining to the property control system.

\(3\) If the property is included in a standard agency registration
system, the Contractor may use the property\'s registration number as
the serial number. The Contractor shall obtain the registration number
through the Property Administrator from the owning agency.

\(d\) The markings in Section J paragraphs (b) and (c) of this section
shall be:

\(1\) securely affixed to the property,

\(2\) legible, and

\(3\) conspicuous.

Examples of appropriate markings are bar coding, decals, and stamping.
If marking will damage the property or is otherwise impractical, the
Contractor shall promptly notify the Property Administrator and ask for
the item to be exempted (see paragraph (b) of this clause). Markings
shall be removed or obliterated when Government property is sold,
scrapped, or donated.

Section K - Records and Reports of FAA Property (April 2004)

\(a\) The Contractor\'s property control records shall constitute the
FAA\'s official property records unless the Contracting Officer
indicates otherwise. The Contractor shall establish and maintain
adequate control records for all Government property, including property
provided to and in the possession or control of a subcontractor. When a
subcontractor has an approved property control system for Government
property provided under its own prime contracts, the Contractor may use
the records created and maintained under that system.

\(b\) The Contractor\'s property control system shall provide financial
accounts for Government-owned property in the Contractor\'s possession
or control until relieved of that responsibility. The system should be
subject to internal control standards and be supported by property
control.

\(c\) The Contractor\'s property control records shall identify all
Government property and provide a complete, current, auditable record of
all transactions. Records shall be accessible to authorized FAA
personnel and safeguarded against destruction and tampering.

\(d\) The Contractor shall keep separate property records for each
contract unless otherwise authorized by the Property Administrator.

\(e\) Special tooling and special test equipment fabricated from
materials that are the property of the Government shall be recorded as
Government-owned immediately upon fabrication. Special tooling and
special test equipment fabricated from materials that are the property
of the Contractor shall be recorded as Government property at the time
title passes to the Government.

\(f\) The Contractor shall establish property records for serviceable
components permanently removed from items of Government property as a
result of modification as the type established for components acquired
separately.

\(g\) The Contractor\'s property control system shall contain a system
or technique to locate any item of Government property within a
reasonable period of time.

\(h\) Basic information.

\(1\) Unless summary records are used as authorized under subparagraph
(f)(2) of this clause, the Contractor\'s property control records shall
provide the following basic information for every item of Government
property in the Contractor\'s possession, regardless of value:

\(i\) The name, description, and National Stock Number (if furnished by
the FAA or available in the property control system).

\(ii\) Quantity received (or fabricated), issued, and on hand.

\(iii\) Unit price (and unit of measure).

\(iv\) Contract number or equivalent code designation.

\(v\) FAA Decal number

\(vi\) Acquisition date

\(vii\) Manufacturer\'s name, model and serial numbers

\(viii\) Condition Code

\(ix\) Location.

\(x\) Disposition.

\(xi\) Posting reference and date of transaction.

\(2\) Summary records are normally adequate for special tooling, special
test equipment, and plant equipment costing less than \$5,000 per unit,
except where the Property Administrator specifies that individual item
records are necessary for effective control, calibration, or
maintenance. Summary records shall provide the information listed in
paragraphs (h) (1)(i) through (1)(xi) above, but may reference a general
location, provided the Contractor can locate the property within a
reasonable period of time.

\(i\) Records of pricing information. Requirement for unit prices.

\(1\) The Contractor\'s property control system shall contain the unit
price for each item of Government property except as provided in (2)
below. When a Contractor records the unit price of property on other
than the quantitative inventory records, those supplementary records
shall become part of the official Government property records.

\(2\) (Note: This subparagraph (2) does not apply to nonprofit
organizations.) The requirement that unit prices be contained in the
official Government property records does not apply to those separate
property records located at a Contractor\'s secondary sites and
subcontractor plants; provided, that:

\(i\) Records maintained by the prime Contractor at its primary site
include unit prices; and

(ii ) The prime Contractor agrees to furnish actual or estimated unit
prices to the secondary site or subcontractor as the need arises.

\(3\) When definite information as to unit price cannot be obtained,
reasonable estimates shall be used.

\(j\) Determining unit price.

\(1\) Contractor-acquired and Contractor-fabricated property.

Except for items fabricated by nonprofit organizations for research and
development purposes, the unit price of Contractor-acquired and
Contractor-fabricated property shall be determined in accordance with
the system established by the Contractor in conformance with
consistently applied sound accounting principles. The Contractor shall
apply separate unit prices to items of special tooling and special test
equipment fabricated or acquired by the Contractor unless the Property
Administrator approves group pricing for special tooling, special test
equipment, and work-in-process in accordance with the Contractor\'s
acceptable cost accounting system. All processed material, fabricated
parts, components, and assemblies charged to the Contractor\'s
work-in-process inventory, including items in temporary storage while
awaiting processing, may be considered as work-in-process for this
purpose.

\(2\) Government-furnished property. The FAA shall determine and furnish
to the Contractor the unit price of Government-furnished property.
Transportation and installation costs shall not generally be considered
as part of the unit price for this purpose. Normally, the unit price of
Government-furnished property will be provided on the document covering
shipment of the property to the Contractor. In the event the unit price
is not provided on the document, the Contractor shall take action to
obtain the information.

\(k\) Records of material.

\(1\) General. The Contractor shall record, in accordance with contract
requirements and the Contractor\'s property control system, the
following:

\(i\) all Government material furnished to the Contractor,

\(ii\) all material to which title has passed to the FAA by reason of
allocation from Contractor-owned stores,

\(iii\) all material acquired by the Contractor for direct charge to an
FAA contract..

\(2\) Consolidated stock record. The Contractor shall not use
consolidated stock records without the prior consent of the Property
Administrator.

\(3\) Custodial records. The Contractor shall maintain custodial records
for tool crib items, guard force items, protective clothing, and other
items issued to individuals for use in their work.

\(4\) Use of receipt and issue documents. (Note: This paragraph (4) is
not applicable to nonprofit organizations.) The Property Administrator
may authorize the Contractor to maintain, in lieu of stock records, a
file of appropriately cross-referenced documents evidencing receipt,
issue, and use of Government-provided material that is issued for
immediate consumption and is not entered in the inventory record. This
method of control may be authorized for:

\(i\) Material charged through overhead;

\(ii\) Material under research and development contracts;

\(iii\) Subcontracted or outside production items;

\(iv\) Non stock or special items;

\(v\) Items that are produced for direct charge to a contract, or are
acquired and issued for installation upon receipt, and involve no
spoilage; and

\(vi\) Items issued from Contractor-owned inventory direct to production
or maintenance, etc.

\(5\) Material issued directly upon receipt. (Note: This paragraph (5)
applies only to nonprofit organizations.)

\(i\) Under fixed-price contracts, the Contractor\'s documents
evidencing receipt and issue will be accepted as property control
records for Government-furnished material issued directly by the
Contractor upon receipt so as to be considered consumed under the
contract.

\(ii\) Under cost-reimbursement contracts, FAA invoices, Contractor\'s
purchase documents, or other evidence of acquisition and issue will be
accepted as adequate property records for material furnished to or
acquired by the Contractor and issued directly so as to be considered
consumed under the contract.

\(6\) Multicontract cost and material control. (Note: This paragraph (6)
does not apply to nonprofit organizations.)

\(i\) Description and scope. A multicontract cost and material control
system substitutes a system of financial accounting for the requirements
for physical identification of FAA material. The Contractor shall not
use multicontract cost and material control without the prior consent of
the Contracting Officer. (See (ii) below.) The system operates as
follows:

\(A\) The Contractor may acquire, requisition, receive, store, and issue
like items of material for the total requirements of all contracts
involved in the system without identifying the material to each
contract.

\(B\) The Contractor may commingle, during any stage of contract
performance, Government-owned and Contractor-owned material and
work-in-process that was furnished, acquired, or produced for all FAA
contracts covered by the system, without physical segregation or
identification to the individual contracts.

\(C\) In lieu of physical segregation and identification to individual
contracts, periodic calculation of requirements and distribution of
costs to all contracts permits the allocation of costs of material to
products delivered. This system, by reflecting the material expended to
perform each contract at any stage in production, permits usage analysis
to determine the reasonableness of consumption and expenditure of
Government material.

\(D\) The system may include all FAA contracts of any type that involve
common repetitive operations.

\(E\) The system does not require commingling of all common materials
under all contracts. For example, items of Government-furnished material
of high value or in short supply may be excluded from commingling and
reserved for use in performing the contract under which furnished.

\(F\) The Contractor shall take physical inventories of material in
stores included in the systems (other than work-in-process) at least
annually, extend and reconcile prices to the quantitative balance for
each item, and record adjustments in the stock record and financial
inventory control accounts. Such physical inventories and adjustments,
as well as equitable distribution to cost accounts of any inventory
losses, shall be reviewed by and are subject to the approval of the
Property Administrator.

\(ii\) Criteria. A multicontract cost and material control system may be
authorized if \_

\(A\) The Contractor demonstrates that adopting the system would result
in savings or improved operations or that it will otherwise be in the
Government\'s interest;

\(B\) The system is applied to existing FAA contracts only and excludes
materials acquired or costs incurred for non-FAA work or in anticipation
of future FAA work; and

\(C\) The Contractor\'s accounting system is adequate to:

(aa) Provide on a complete and timely basis a clear \'audit trail\' from
costs of materials acquired for each contract to materials used or
disposed of on each contract;

(bb) Reflect separately for Government-furnished and Contractor-acquired
material in stores (except work-in-process) the inventory balances as
affected by receipts, issues, adjustments, and other dispositions;

\(cc\) Determine unit costs for each identifiable part, component,
subassembly, assembly, end item, and contract item;

(dd) Calculate amounts for cost reimbursements and progress payments
during the life of the contract by applying or allocating such unit
costs developed through each stage of work-in-process to contract items
for the requirements of each contract; and

(ee) Assure that when Government material furnished for use under one
contract is authorized for use on another contract, the initial contract
receives credit.

\(iii\) Authorization. The Contracting Officer may authorize a
Contractor who is performing or will perform more than one Government
contract to use the multicontract cost and material control system. .
The Property Administrator shall approve whatever detailed operating
procedures are necessary for each system authorized.

\(iv\) Requirement. Whenever a multicontract cost and material control
system is authorized, the Contractor\'s financial accounts shall include
all material in the system acquired or furnished for FAA work and shall
satisfy the requirements of this clause.

(l ) Records of special tooling and special test equipment. (This
sub-section does not apply to nonprofit organizations except for
paragraph (3).)

\(1\) Unless the Property Administrator has authorized summary records,
the Contractor\'s property control system shall provide the basic
information listed above (h)(1) regarding each item of Government-owned
special tooling and special test equipment, including any general
purpose test equipment incorporated as components in such a manner that
removal and reuse may be feasible and economical.

\(2\) If the Contractor uses group pricing of special tooling or special
test equipment, as recognized above in (j), unit prices shall be
computed when required.

\(3\) In the case of special tooling acquired or fabricated by nonprofit
organizations or furnished by the FAA to nonprofit organizations for
research and development, the Contractor may use invoices, Contractor\'s
purchase document or other documents that evidence acquisition or issue
may be accepted as adequate property control records.

\(4\) Records identifying special tooling and special test equipment
shall include the identification number and item on which used.

\(5\) The Contractor shall, when specified by the contract, identify and
report special tooling and special test equipment by retention category
(e.g., assembly tooling or critical tooling for spares or replacements).

\(m\) Records of plant equipment.

\(1\) Unless the Property Administrator authorizes summary records, the
Contractor shall maintain individual item records for each item of plant
equipment.

\(2\) In addition to information required in Section K, paragraph (m) of
this clause, the Contractor\'s records of Government-owned plant
equipment, regardless of value, shall include:

\(i\) Federal Supply Code for the manufacturer (as listed in Cataloging
Handbook H4-1 and H4-2) (available from the Superintendent of Documents,
Government Printing Office (GPO), Washington, DC 20402);

\(ii\) Federal Supply Classification (Cataloging Handbooks H2-1, H2-2,
and H2-3) (available from GPO); and

\(iii\) The original manufacturer\'s model or part number.

\(3\) Unless otherwise authorized by the Property Administrator, the
Contractor shall also include the following for each item of
Government-owned plant equipment having a unit cost of \$5,000 or more:

\(i\) Serial number and year built (when available);

\(ii\) Government identification/tag number; and

\(iii\) Acquisition and disposition document references and dates.

\(4\) The Property Administrator may determine that the information in
(3)(i) and (3)(ii) above shall be recorded in the property records for
plant equipment costing less than \$5,000.

\(5\) The Contractor shall record accessory and auxiliary equipment on
the record of the associated item of plant equipment. If the accessory
or auxiliary item is not attached to, a part of, or acquired for use
with a specific item of plant equipment, it shall be recorded either in
an individual item record or in a summary stock record. When accessory
and auxiliary items are permanently separated from the basic item of
plant equipment, the unit price of the basic item shall be appropriately
reduced.

\(n\) Records of real property.

\(1\) The Contractor shall maintain an itemized record of the
description, location, acquisition cost, and disposition of all
Government real property (including unimproved real property); all
alterations, all construction work, and sites connected with such
alteration and construction, acquired by purchase, lease, or otherwise.
These records, including maps, drawings, plans, specifications, and
supplementary data where necessary, shall:

\(i\) be complete,

\(ii\) show the original cost of the property and improvements and the
cost of any changes and additions, and

\(iii\) be appropriately indexed.

\(2\) Costs incurred by the Contractor or the FAA for new construction,
including erection, installation, or assembly of Government real
property in possession of the Contractor, shall be capitalized in the
official Government real property records and financial accounts
maintained by the Contractor for the FAA.

\(3\) Costs incurred for additions, expansions, extensions, conversions,
alterations, and improvements, including applicable portions of capital
maintenance, that increase the value, life, utility, capability, or
serviceability of Government real property shall be capitalized.

\(4\) Costs incurred for portable buildings or facilities specifically
constructed for tests that involve destruction of the facility shall not
be capitalized in the Government real property records or financial
accounts.

\(5\) Costs incurred for maintenance, repair, or rearrangement to
maintain the Government real property in good physical condition,
utility, capacity, or serviceability shall be charged to expense, and
the real property records shall not be affected.

\(6\) When Government-owned real property is sold , transferred,
donated, destroyed by fire or other cause, abandoned-in-place, or
condemned, the financial accounts shall be reduced by the presently
recorded costs and the real property records annotated with a supporting
statement, including pertinent facts.

\(o\) Records of scrap or salvage.

\(1\) The Contractor shall maintain records of all scrap or salvage
generated, except as provided in Section N. These records shall conform
to the Contractor\'s established system of scrap and salvage control
approved by the Property Administrator.

\(2\) The Contractor\'s property control system shall provide the
following information:

\(i\) Contract number, if practical, or equivalent code designation from
which the scrap or salvage derived.

\(ii\) Nomenclature or description of salvable items or classification
(material content) of scrap.

\(iii\) Quantity on hand.

\(iv\) Posting reference and date of transaction.

\(v\) Disposition.

\(p\) Records of related data and information. The Contractor shall
maintain property control and accountability, in accordance with sound
business practice, of manufacturing or assembly drawings; installation,
operation, repair, or maintenance instructions; and other similar
information furnished to the Contractor by the FAA or generated or
acquired by the Contractor under the contract and for which title vests
in the FAA. The requirements of this subpart do not otherwise apply to
such property.

\(q\) Records of completed products. The Contractor shall maintain a
record of all completed products produced under a contract as follows:

\(1\) When there is no time lapse between FAA inspection and acceptance
of the completed products and shipment from the plant site, the records
shall, as a minimum, consist of a summary of quantities accepted and
shipped. When end items are accepted by the FAA and stored with the
Contractor awaiting, shipment, the record shall identify quantities
stored, location, and disposition action.

\(2\) On contracts that provide for the Contractor to retain completed
products for further use under the contract or other contracts, such
items shall be considered \'Government-furnished property\' upon
acceptance and shall be recorded as required by this contract.

\(3\) When completed products are returned to a Contractor under the
terms of a warranty clause, the Contractor shall maintain, by contract,
a record containing a description of the items involved, quantities
received and returned to the FAA, and other pertinent data necessary to
determine that a proper accounting for all property has been made.

\(r\) Records of transportation and installation costs of plant
equipment. (Note: This subsection does not apply to nonprofit
organizations.)

\(1\) Transportation costs.

\(i\) The Contractor shall record within the property control system the
transportation and installation costs directly borne by the FAA for each
item of Government-owned plant equipment with an acquisition cost of
\$5,000 or more. The Property Administrator may require the Contractor
to provide such recorded costs for use in computing rental charges.

\(ii\) If transportation costs are not included in the price of
equipment delivered, the Contractor shall contact the Property
Administrator for instructions for obtaining applicable freight data.

\(2\) Installation costs.

\(i\) When the Contractor performs installation, the cost shall be
computed in accordance with the Contractor\'s accounting system (if the
system is acceptable for other contract cost determination purposes) and
recorded in the property record.

\(ii\) When installation is subcontracted, the Contractor shall record
the cost paid to the subcontractor in the property record.

\(iii\) When installation costs are included in the price of equipment
delivered to the using location, the Contractor shall annotate the
property records accordingly.

\(s\) Records of misdirected shipments. The Contractor\'s property
control system shall provide the following information regarding each
misdirected shipment of Government property received:

\(1\) Identity of shipment, such as shipping document or bill of lading.

\(2\) Origin of shipment.

\(3\) Content (items in the shipment) per shipping documents, if
available.

\(4\) Location.

\(5\) Disposition.

\(t\) Records of property returned for rework.

\(1\) The Contractor shall maintain quantitative records of property
returned for processing to assure control from time of receipt through
return of the items to the FAA. The Contractor shall establish item
records under its property control system and shall include the
information required in (h) above.

\(2\) The records shall specify the quantity of units returned to the
FAA and the quantity otherwise disposed of with proper authority.

\(u\) Reports of FAA property.

\(1\) The Contractor\'s property control system shall provide annually
the total acquisition cost of Government property for which the
Contractor is accountable under each contract with the FAA, including
Government property at subcontractor plants and alternate locations. The
following classifications (property classifications may be varied to
meet individual agency needs) shall be reported:

\(i\) Plant equipment.

\(ii\) Special tooling.

\(iii\) Special test equipment.

\(iv\) Material.

\(v\) Agency peculiar property.

\(2\) The Contractor shall report the information under paragraph (1) as
directed by the Property Administrator.

\(3\) The Contractor shall maintain and provide the following reports to
the Contracting Officer_s Technical Representative and Property
Administrator when appropriate:

\(i\) Receipt of Property. The Contractor_s written notice of receipt of
Government property and any discrepancies, if required, must precede
request for payment.

\(ii\) Lost, Damaged, Destroyed Property. The Contractor_s written
report to the Property Administrator of cases of loss, damage, or
destruction of Government property in the Contractor_s possession or
control. The Contractor shall also require its subcontractors possessing
or controlling Government property accountable under the contract to
investigate and report all instances of loss, damage, or destruction of
such property.

\(iii\) Annual Financial and Inventory Reports. A copy of the
Contractor_s annual financial and inventory reports of Government
property. The Contractor shall account for all Government property until
relieved of responsibility.

.

Section L - Contractor_s Use of Government Property (April 2004)

\(a\) The Contractor_s procedures shall be adequate and sufficient for
the following use:

\(1\) To assure that Government property will be used only for those
purposes authorized in the contract and that any required approval will
be obtained; and

\(2\) To provide a basis for determining and allocating rental charges.

\(b\) With respect to plant equipment with an acquisition value of
\$5,000 or more, the PCS, as a minimum, shall:

\(1\) Establish a minimum level of use below which an analysis of need
will be made and retention justified, except for inactive plants and
equipment retained for mobilization (the use level may be established
for individual items or families of items, depending upon circumstances
of use);

\(2\) Provide for recording authorized and actual use consistent with
the established use levels;

\(3\) Require periodic analyses of production needs for plant equipment
utilization based upon known requirements; and

\(4\) Provide for prompt reporting to the Property Administrator of all
plant equipment for which retention is not justified.

Section M - Contractor_s Maintenance Program (April 2004)

The Contractor shall be responsible for the proper care, maintenance,
and use of Government property in its possession or control from the
time of receipt until properly relieved of responsibility, in accordance
with sound industrial practice and the terms of the contract. The
removal of Government property to storage, or its contemplated transfer,
does not relieve the Contractor of these responsibilities.

\(a\) Consistent with the terms of the contract, the Contractor\'s
maintenance program shall provide for:

\(1\) Disclosure of need for and the performance of preventive
maintenance;

\(2\) Disclosure and reporting of need for capital rehabilitation; and

\(3\) Recording of work accomplished under the program.

\(b\) Preventive maintenance is maintenance performed on a regularly
scheduled basis to prevent the occurrence of defects and to detect and
correct minor defects before they result in serious consequences. An
effective preventive maintenance program shall include at least:

\(1\) Inspection of buildings at periodic intervals to assure detection
of deterioration and the need for repairs;

\(2\) Inspection of plant equipment at periodic intervals to assure
detection of maladjustment, wear, or impending breakdown;

\(3\) Regular lubrication of bearings and moving parts in accordance
with a lubrication plan;

\(4\) Adjustments for wear, repair, or replacement of worn or damaged
parts and the elimination of causes of deterioration;

\(5\) Removal of sludge, chips, and cutting oils from equipment that
will not be used for a period of time;

\(6\) Taking necessary precautions to prevent deterioration caused by
contamination, corrosion, and other substances; and

\(7\) Proper storage and preservation of accessories and special tools
furnished with an item of plant equipment but not regularly used with
it.

\(c\) The Contractor\'s maintenance program shall provide for disclosing
and reporting the need for major repair, replacement, and other capital
rehabilitation work for Government property in its possession or
control.

\(d\) The Contractor shall keep records of maintenance actions performed
and any deficiencies in the Government property discovered as a result
of inspections.

Section N - Segregation of Government Property (April 2004)

The Contractor shall physically separate Government property from
Contractor-owned property. However, when advantageous to the FAA and
consistent with the Contractor\'s authority to use such property, the
property may be commingled:

\(a\) When the Government property is special tooling, special test
equipment, or plant equipment clearly identified and recorded as
Government property;

\(b\) When approved by the Property Administrator in connection with
research and development contracts;

\(c\) When material is included in a multicontract cost and material
control system;

\(d\) When scrap of a uniform nature is produced from both
Government-owned and Contractor-owned material and physical segregation
is impracticable;

\(e\) When scrap produced from FAA-owned material is insignificant in
consideration of the cost of segregation and control;

\(f\) When FAA contracts involved are fixed-price and provide for the
retention of the scrap by the Contractor; or

\(g\) When otherwise approved by the Property Administrator.

Section O \_ Property Inventories (April 2004)

\(a\) Inventory Listings.

\(1\) The Contractor shall provide to the Contracting Officer_s
Technical Representative a listing of all Government property in their
possession, as required by the contract. This listing should include GFP
and CAP.

\(b\) Physical Inventories.

The Contractor shall periodically physically inventory all Government
property (except materials issued from stock for manufacturing,
research, design, or other services required by the contract) in its
possession or control and shall cause subcontractors to do likewise. The
Contractor, with the approval of the Property Administrator, shall
establish the type, frequency, and procedures. These may include
electronic reading, recording and reporting or other means of reporting
the existence and location of the property and reconciling the records.
Type and frequency of inventory shall be based on the Contractor\'s
established practices, the type and use of the Government property
involved, or the amount of Government property involved and its monetary
value, and the reliability of the Contractor\'s property control system.
Type and frequency of physical inventories normally shall not vary
between contracts being performed by the Contractor, but may vary with
the type of properly being controlled. Personnel who perform the
physical inventory should not be the same individuals who maintain the
property records or have custody of the property unless the
Contractor\'s operation is too small to do otherwise.

\(c\) Inventories upon termination or completion.

\(1\) General. Immediately upon termination or completion of a contract,
the Contractor shall perform and cause each subcontractor to perform a
physical inventory, adequate for disposal purposes, of all Government
property applicable to the contract, unless the requirement is waived as
provided in paragraph (2) below.

\(2\) Exception. The requirement for physical inventory at the
completion of a contract may be waived by the Property Administrator
when the property is authorized for use on a follow-on contract;
provided, that:

\(i\) Experience has established the adequacy of property controls and
an acceptable degree of inventory discrepancies; and

\(ii\) The Contractor provides a statement indicating that record
balances have been transferred in lieu of preparing a formal inventory
list and that the Contractor accepts responsibility and accountability
for those balances under the terms of the follow-on contract.

\(3\) Listings for disposal purposes. (Note: This paragraph (3) applies
only to nonprofit organizations.)

\(i\) Standard items that have been modified may be described on
listings for disposal purposes as standard items with a general
description of the modification.

\(ii\) Items that have been fabricated, such as test equipment, shall be
described in sufficient detail to permit a potential user to determine
whether they are of sufficient interest to warrant further inspection.

\(d\) Reporting results of inventories. The Contractor shall, as a
minimum, submit the following to the Property Administrator promptly
after completing the physical inventory:

\(1\) A listing that identifies all discrepancies disclosed by a
physical inventory.

\(2\) A signed statement that physical inventory of all or certain
classes of Government property was completed on a given date and that
the official property records were found to be in agreement except for
discrepancies reported.

\(e\) Quantitative and monetary control. When requested by the Property
Administrator, the Contractor\'s reports of results of physical
inventory shall be prepared on a quantitative and monetary basis and
segregated by categories of property.

Section P - Disposition of Government Property (April 2004)

\(a\) Disposal methods.

The Property Administrator may require delivery of any contractor
inventory, including transfers of Government property to another FAA
contract. If the Property Administrator does not exercise these rights,
the Contractor inventory will be disposed of by one of the following
methods in the priority indicated:

\(1\) Purchase or retention at cost by prime contractor or subcontractor
of contractor-acquired property;

\(2\) Return of contractor-acquired property to suppliers;

\(3\) Use within the Government through the use of prescribed screening
procedures;

\(4\) Donation to eligible donees;

\(5\) Sale (including purchase or retention at less than cost by the
prime contractor or subcontractor);

\(6\) Donation to public bodies in lieu of abandonment; or

\(7\) Abandonment or destruction.

\(b\) Restrictions on purchase or retention of contractor inventory. A
contractor\'s or subcontractor\'s authority to purchase, retain, or
dispose of contractor inventory is subject to any contract provisions
and to applicable Government restrictions on the disposition of property
that is classified for security reasons, possesses military offensive or
defensive characteristics, or is dangerous to public health, safety, or
welfare.

\(c\) Contractor-acquired property.

\(1\) Purchase or retention at cost.

\(i\) The Property Administrator should encourage contractors to
purchase or retain contractor-acquired property at cost. However, the
Contractor should not include any part of the cost of property purchased
or retained in any claim for reimbursement against the FAA. The
Contracting Officer should adjust cost-reimbursement contracts for
previously reimbursed costs. When the property is for use on a
continuing FAA contract or commercial operation, handling and
transportation charges may be considered an allowable cost (included in
the Contractor\'s settlement proposal as \'other costs\' in the case of
a termination), provided that the charges are reasonable.

\(ii\) If a contractor purchases or retains contractor inventory for use
on a continuing FAA contract that is subsequently terminated, the
property should be allocated to the continuing contract, even though its
purchase would otherwise constitute undue anticipation of production
schedules. If, as a result of the purchase or retention of property from
a terminated contract for use on other FAA contracts, the Contractor
terminates subcontracts under the other FAA contracts, reasonable
termination charges of the subcontracts may be included as an allocable
cost under the contract that generated the excess property.

\(2\) Return to suppliers.

The Property Administrator should encourage contractors to return
allocable quantities of contractor-acquired property to suppliers for
full credit less either the supplier\'s normal restocking charge or 25
percent of the cost, whichever is less. Contractors may be reimbursed
for reasonable transportation, handling, and restocking charges, but not
for the cost of the returned property. Under cost-reimbursement
contracts, appropriate adjustments should be made for costs previously
reimbursed. A contractor\'s property control system should include
procedures to ensure property is returned to the supplier for
appropriate credit whenever feasible.

\(d\) Cost-reimbursement contracts.

Under cost-reimbursement contracts, property purchased or retained by
the Contractor or returned to suppliers should not be reported on
inventory schedules. The cognizant contract administration office, in
coordination with the cognizant auditor, should periodically review such
transactions to protect the Government\'s interests.

\(e\) Instructions for preparing schedules of contractor inventory.

The contractor will report inventory on the following forms as
appropriate:

\(1\) Standard Form 1426, Inventory Schedule A (Metals In Mill Product
Form) and SF 1427, Inventory Schedule A\--Continuation Sheet. These
forms are to be used to list metals in raw or primary form as furnished
by the mill and on which there has been no subsequent fabricating
operation.

.

\(2\) Standard Form 1428, Inventory Schedule B and SF 1429, Inventory
Schedule B-Continuation Sheet. These forms are to be used to list all
contractor inventory (including plant equipment). However, agencies may
direct listing of particular categories of plant equipment on agency
forms when standard forms are not appropriate.

\(3\) Standard Form 1430, Inventory Schedule C (Work in Process) and SF
1431, Inventory Schedule C\--Continuation Sheet. These forms are to be
used to list all work in process.

\(4\) Standard Form 1432, Inventory Schedule D (Special Tooling and
Special Test Equipment) and SF 1433, Inventory Schedule D\--Continuation
Sheet. These forms are to be used to list such contractor inventory as
dies, jigs, gauges, fixtures, special tools, and special test equipment.

\(5\) Standard Form 1434, Termination Inventory Schedule E. This is a
short form to be used with SF 1438, Settlement Proposal (Short Form).
Applicability is limited to termination settlement proposals under
\$10,000.

The Contractor shall enter in column c one of the following codes to
indicate the condition of each item of property:

Disposal ConditionCode Definition

1 New. Property which is in new condition or unused condition and can be
used immediately without modifications or repairs.

4 Usable. Property which shows some wear, but can be used without
significant repair.

7 Repairable. Property which is unusable in its current condition but
can be economically repaired.

X Salvage. Property which has value in excess of its basic material
content, but repair or rehabilitation is impractical and/or
uneconomical.

S Scrap. Property which has no value except for its basic material
content.

\(f\) Submission of inventory schedules.

\(1\) When property is no longer needed to perform the contract, the
Contractor shall prepare inventory schedules in accordance with the
contract and instructions from the plant clearance officer or Property
Administrator and shall promptly submit the schedules to the delegated
Property Administrator. Inventory schedules may also be used for
screening with other Federal agencies.

\(2\) The certificate on the inventory schedule must be executed when
Contractor inventory is reported. The prime Contractor shall execute
this certificate, except that for subcontractor termination inventory
the subcontractor shall execute the certificate.

\(3\) The Contractor\'s inventory schedules shall not include any items
that the Contractor can reasonably use on other Government work without
financial loss. However, the schedules shall include common items
specified by the Contracting Officer for delivery to the Government or
which are Government-furnished property.

\(4\) The contract may authorize the Contractor to electronically
reproduce inventory schedules provided no change is made in the name,
content or sequence of the data elements. All essential elements of data
must be included and the form must be signed. (Reference AMS Guidance
T3.10.3-A.27 for list of forms)

\(a\) Acceptance.

Within 15 days after receipt of inventory schedules, the plant clearance
officer or Property Administrator should review them, determine their
acceptability, and request the Contractor to correct any inadequate
listings. Inventory schedules should not be rejected if the information
is adequate for disposal purposes, even if complete cost data on
work-in-process are not available. Rejection should be limited, when
possible, to specific items and should not necessarily render the entire
schedule unacceptable. If substantial errors are discovered that were
not apparent on termination inventory schedules previously found
acceptable, the final phase of a plant clearance period should not begin
until corrected schedules have been submitted, unless the plant
clearance officer or Property Administrator determines otherwise.

\(b\) Excess inventories.

\(1\) Contractors shall report Contractor inventory promptly after
determining it to be excess, unless a later date is authorized by the
Contracting Officer or Property Administrator.

\(2\) The Contractor shall not submit partial schedules unless
authorized by the FAA Property Administrator. The first page of each
schedule submitted shall be identified as partial or final in the title
block of the schedule.

\(c\) Scrap

\(1\) The Contractor may not be required to itemize scrap on inventory
schedules if (a) the material is physically segregated in the
Contractor\'s plant and (b) the Contractor submits a statement
describing the material, estimating its cost, and providing other
information necessary for the Property Administrator to verify whether
the property is scrap. The Contractor should sort the scrap to the
extent economically feasible to assure the highest sale proceeds.

\(2\) The Property Administrator should review the schedules of property
reported as scrap and, if necessary, physically inspect the property
involved. If the Property Administrator determines that any of the
property is serviceable, usable, or salvable, the Contractor should
resubmit it on appropriate inventory schedules.

\(d\) Withdrawals

If, before final disposition, the Contractor becomes aware that any
items of contractor-acquired property listed in the inventory schedules
are usable on other work without financial loss, the Contractor shall
purchase the items or retain them at cost and amend the inventory
schedules and claim accordingly. Upon notifying the Property
Administrator, the Contractor may purchase or retain at cost any other
items of property included in the inventory schedules. Withdrawal of any
Government-furnished property may be subject to the written approval of
the Property Administrator.

Section Q - Final Accounting of Government Property (April 2004)

\(a\) Final Inventory and Certification

At the expiration or termination of the Contract, the Contractor must
conduct a final physical inventory. This requirement may be waived by
the Property Administrator when the property is authorized for use on a
follow-on contract, and adequate controls have been established.

\(1\) Inventory Requirements

The final inventory will cover all property items furnished or acquired
under the terms of the Contract, including nonexpendable/expendable
property items regardless of cost, and supply items and materiel not
consumed during contract performance. The amount of accrued lease credit
for any leased property should be included on the Final Inventory. The
Property Administrator should be advised of all unusual circumstances
related to this inventory. Failure to provide the prescribed Final
Inventory may delay contract closeout.

The Contractor is required to report on the Final Inventory, as a
minimum, the information listed in (Section K (h)); and

Certification

Final Inventory must include the following certifications:

\_I certify that except for items consumed in the performance of the
contract, this inventory includes all materials, supplies and equipment
furnished by the Government or acquired by the contractor for the
account of the Government under contract number

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

\_I further certify that all property is in a state free from
contamination by any hazardous or toxic substances, and requires no
additional clean-up or decontamination efforts.\_

(NOTE: Contractors that have no government property in their possession
must submit a certification to that effect.)

\(2\) Subcontractor Inventory

1\. Subcontractors at all tiers are subject to the requirements
pertaining to contractor inventory. Prime contractors and subcontractors
are responsible for review and approval of inventory schedules submitted
by their respective next-lower-tier subcontractors. This includes review
and, if necessary, physical survey of subcontractor inventory that is
contained in a termination settlement proposal to assure that it is
physically, technically, and quantitatively allocable to the contract,
and cannot be reasonably diverted to other work of the subcontractor

2\. The Property Administrator is responsible for determining the
adequacy of reviews and assuring the proper crediting of proceeds for
the disposal of subcontractor inventory by the prime contractor.

End of clause)

PRESCRIPTION:

Shall be used in all SIRs and contracts that include Government
property.

**3.10.3-2/alt1** **Government Property - Basic Clause Alternate I**
(April 2004)

\(a\) Title in Government property.

\(1\) Fixed price contracts.

Title to Government property shall not be affected by its incorporation
into or attachment to any property not owned by the Government, nor
shall Government property become a fixture or lose its identity as
personal property by being attached to any real property.

\(2\) Title to each item of facilities and special test equipment
acquired by the Contractor for the Government under this contract shall
pass to and vest in the Government when its use in performing this
contract commences or when the Government has paid for it, which ever is
earlier, whether or not title previously vested in the Government.

\(3\) If this contract contains a provision directing the Contractor to
purchase material for which the Government will reimburse the Contractor
as a direct item of cost under this contract\--

\(a\) Title to material purchased from a vendor shall pass to and vest
in the Government upon the vendor\'s delivery of such material; and

\(4\) Title to all other material shall pass to and vest in the
Government upon:

\(a\) Issuance of the material for use in contract performance;

\(b\) Commencement of processing of the material or its use in contract
performance; or

\(c\) Reimbursement of the cost of the material by the Government,
whichever occurs first.

\(g\) Risk of loss or damage to GFP.

\(3\) Fixed price. The Contractor assumes the risk of, and shall be
responsible for, any loss or destruction of, or damage to, Government
property upon its delivery to the Contractor (or upon passage of title
to the Government under paragraph (c) of this clause). However, the
Contractor is not responsible for reasonable wear and tear to Government
property or for Government property properly consumed in performing this
contract.

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contracts that are fixed price and
include property.

**3.10.3-2/alt2** **Government Property - Basic Clause Alternate II**
(April 2004)

\(a\) Title in Government property.

\(2\) Cost, labor hour, time and materials contracts.

\(i\) Title to all property purchased by the Contractor for which the
Contractor is entitled to be reimbursed as a direct item of cost under
this contract shall pass to and vest in the Government upon the
vendor\'s delivery of such property.

\(ii\) Title to all other property, the cost of which is reimbursable to
the Contractor, shall pass to and vest in the Government upon:

\(A\) Issuance of the property for use in contract performance;

\(B\) Commencement of processing of the property for use in contract
performance; or

\(C\) Reimbursement of the cost of the property by the Government,
whichever occurs first.

\(iii\) All Government-furnished property and all property acquired by
the Contractor, title to which vests in the Government under this
paragraph (collectively referred to as \"Government property\"), are
subject to the provisions of this clause. Title to Government property
shall not be affected by its incorporation into or attachment to any
property not owned by the Government, nor should Government property
become a fixture or lose its identity as personal property by being
attached to any real property.

\(b\) Risk of loss or damage to GFP.

\(1\) Cost-reimbursement, labor hour or time and materials contracts -
limited risk of loss. The Contractor shall not be liable for loss or
destruction of, or damage to, the Government property provided under
this contract (or, if an educational or nonprofit organization, for
expenses incidental to such loss, destruction, or damage), except as
provided in subparagraph (2) below.

\(2\) The Contractor shall be responsible for loss or destruction of, or
damage to, the Government property provided under this contract
(including expenses incidental to such loss, destruction, or damage)-

\(i\) That results from a risk expressly required to be insured under
this contract but only to the extent of the insurance required to be
purchased and maintained or to the extent of insurance actually
purchased and maintained, whichever is greater;

\(ii\) That results from a risk that is in fact covered by insurance or
for which the Contractor is otherwise reimbursed, but only to the extent
of such insurance or reimbursement;

\(iii\) For which the Contractor is otherwise responsible under the
express terms of this contract;

\(iv\) That results from willful misconduct or lack of good faith on the
part of the Contractor\'s managerial personnel; or

\(v\) That results from a failure on the part of the Contractor, due to
willful misconduct or lack of good faith on the part of the
Contractor\'s managerial personnel, to establish and administer a
program or system for the control, use, protection, preservation,
maintenance, and repair of Government property as required by this
clause.

\(3\) If the Contractor fails to act as provided by subdivision
(g)(4)(v) above, after being notified (by certified mail addressed to
one of the Contractor\'s managerial personnel) of the Government\'s
disapproval, withdrawal of approval, or nonacceptance of the system or
program, it shall be conclusively presumed that such failure was due to
willful misconduct or lack of good faith on the part of the
Contractor\'s personnel. In such event, any loss or destruction of, or
damage to, the Government property shall be presumed to have resulted
from such failure unless the Contractor can establish by clear and
convincing evidence that such loss, destruction, or damage:

\(i\) Did not result from the Contractor\'s failure to maintain an
approved program or system; or

\(ii\) Occurred while an approved program or system was maintained by
the Contractor.

\(4\) If the Contractor transfers Government property to the possession
and control of a subcontractor, the transfer shall not affect the
liability of the Contractor for loss or destruction of, or damage to,
the property as set forth above. However, the Contractor shall require
the subcontractor to assume the risk of, and be responsible for, any
loss or destruction of, or damage to, the property while in the
subcontractor\'s possession or control, except to the extent that the
subcontract, with the advance approval of the Contracting Officer,
relieves the subcontractor from such liability. In the absence of such
approval, the subcontract should 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 its use in
accordance with the provisions of the prime contract.

\(5\) Upon loss or destruction of, or damage to, Government property
provided under this contract, the Contractor shall so notify the
Contracting Officer and shall communicate with the loss and salvage
organization, if any, designated by the Contacting Officer. With the
assistance of any such organization, the Contractor shall take all
reasonable action to protect the Government property from further
damage, separate the damaged and undamaged Government property, put all
the affected Government property in the best possible order, and furnish
to the Contracting Officer a statement of:

\(i\) The lost, destroyed, or 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.

\(6\) The Contractor shall repair, renovate, and take such other action
with respect to damaged Government property as the Contracting Officer
directs. If the Government property is destroyed or damaged beyond
practical repair, or is damaged and so commingled or combined with
property of others (including the Contractor\'s) that separation is
impractical, the Contractor may, with the approval of and subject to any
conditions imposed by the Contracting Officer, sell such property for
the account of the Government. Such sales may be made in order to
minimize the loss to the Government, to permit the resumption of
business, or to accomplish a similar purpose. The Contractor shall be
entitled to an equitable adjustment in the contract price for the
expenditures made in performing the obligations under this subparagraph
(g)(8) in accordance with this clause. However, the Government may
directly reimburse the loss and salvage organization for any of their
charges. The Contracting Officer should give due regard to the
Contractor\'s liability under this paragraph (g) when making any such
equitable adjustment.

\(7\) The Contractor represents that it is not including in the price,
and agrees it will not hereafter include in any price to the Government,
any charge or reserve for insurance (including any self-insurance fund
or reserve) covering loss or destruction of, or damage to, Government
property, except to the extent that the Government may have expressly
required the Contractor to carry such insurance under another provision
of this contract.

\(8\) The Contractor shall not be reimbursed for, and shall not include
as an item of overhead, the cost of insurance or of any reserve covering
risk of loss or destruction of, or damage to, Government property,
except to the extent that the Government may have expressly required the
Contractor to carry insurance under another provision of this contract.

\(9\) In the event the Contractor is reimbursed or otherwise compensated
for any loss or destruction of, or damage to, Government property, the
Contractor shall use the proceeds to repair, renovate, or replace the
lost, destroyed, or damaged Government property or shall otherwise
credit the proceeds to, or equitably reimburse the Government, as
directed by the Contracting Officer.

\(10\) The Contractor shall do nothing to prejudice the Government\'s
rights to recover against third parties for any loss or destruction of,
or damage to, Government property. Upon the request of the Contracting
Officer, the Contractor shall, at the Government\'s expense, furnish to
the Government all reasonable assistance and cooperation (including the
prosecution of suit and execution of instruments of assignment in favor
of the Government) in obtaining recovery. In addition, where a
subcontractor has not been relieved from liability for any loss or
destruction of, or damage to, Government property, the Contractor shall
enforce for the benefit of the Government the liability of the
subcontractor for such loss, destruction, or damage.

\(11\) The foregoing provisions shall apply to scrap from Government
property; provided, however, that the Contracting Officer may authorize
or direct the Contractor to omit from such inventory schedules any scrap
consisting of faulty castings or forgings or of cutting and processing
waste, such as chips, cuttings, borings, turnings, short ends, circles,
trimmings, clippings, and remnants, and to dispose of such scrap in
accordance with the Contractor\'s normal practice and account for it as
a part of general overhead or other reimbursable costs in accordance
with the Contractor\'s established accounting procedures.

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contracts that are cost, labor hour, or
time and materials and include property.

**3.10.3-3** **Government Property Consolidated Facilities** (April
2004)

\(a\) Facilities to be provided.

\(1\) The Contractor, at Government expense and subject to the
provisions of this contract, shall acquire, construct, or install the
facilities and perform the related work as described in the Schedule.

\(2\) The Government, subject to the provisions of the Schedule as
Government-furnished facilities. The Contractor, at Government expense,
shall perform the work with respect to those facilities as is described
in the Schedule.

\(3\) All shipments of the facilities shall be made on approved bills of
lading/shipping documents, unless otherwise authorized by the
Contracting Officer. The required number of such bills of
lading/shipping documents will be furnished to the Contractor by, and
the Contractor shall be accountable therefore to, the transportation
activity designated by the Contracting Officer.

\(b\) Period of this contract. If not otherwise specified in the
contract and if not previously terminated under paragraph (m), the use
of the facilities authorized under this contract shall terminate 5 years
after its effective date. Thereafter, if continued use of the facilities
by the Contractor is mutually desired, the parties shall enter into a
new contract that shall incorporate such provisions as may then be
required by applicable laws and regulations. The parties may, by written
agreement, extend the use of the facilities under this contract beyond
this 5-year period to permit the completion of any then-existing related
contracts and subcontracts.

\(c\) Title in the facilities.

\(1\) The FAA shall retain title to all Government-furnished property.

\(2\) Title to all facilities and components shall pass to and vest in
the Government upon delivery by the vendor of all such items purchased
by the Contractor for which it is entitled to be reimbursed as a direct
item of cost under this contract.

\(3\) Title to replacement parts furnished by the Contractor in carrying
out its normal maintenance obligations under paragraph (h) shall pass to
and vest in the Government upon completion of their installation in the
facilities.

\(4\) Title to other property, the cost of which is reimbursable to the
Contractor under this contract, shall pass to and vest in the Government
upon:

\(i\) Issuance of the property for use in performing this contract;

\(ii\) Commencement of processing or use of the property in performing
this contract; or

\(iii\) Reimbursement of the cost of the property by the Government,
whichever occurs first.

\(5\) Title to the facilities shall not be affected by their
incorporation into or attachment to any property not owned by the
Government, nor shall any item of the facilities become a fixture or
lose its identity as personal property by being attached to any real
property. The Contractor shall keep the facilities free and clear of all
liens and encumbrances and, except as otherwise authorized by this
contract or by the Contracting Officer, shall not remove or otherwise
part with possession of, or permit the use by others of, any of the
facilities.

\(6\) The Contractor may, with the written approval of the Contracting
Officer, install, arrange, or rearrange, on Government-furnished
premises, readily movable machinery, equipment, and other items
belonging to the Contractor. Title to any such item shall remain in the
Contractor even though it may be attached to real property owned by the
Government, unless the Contracting Officer determines that it is so
permanently attached that removal would cause substantial injury to
Government property.

\(7\) The Contractor shall not construct or install, at its own expense,
any fixed improvement or structural alterations in Government buildings
or other real property without advance written approval of the
Contracting Officer. Fixed improvement or structural alterations, as
used herein, means any alteration or improvement in the nature of the
building or other real property, that, after completion, cannot be
removed without substantial loss of value or damage to the premises. The
term does not include foundations for production equipment.

\(d\) Transfer of title to the facilities.

\(1\) The Contracting Officer may, at any time during the term of this
contract, transfer title to equipment to the Contractor upon mutually
agreeable terms and conditions. This clause takes precedence over the
title paragraph of the Government property clause of this contract.
However, every agreement to transfer title to equipment shall provide
that the Contractor will not include in the contract price or charge the
Government in any manner for depreciation, amortization, or use of such
equipment.

\(2\) Vesting title under paragraph (1) above is subject to rights
legislation, 42 U.S.C. 2000d. Before title is vested and by signing this
contract, the Contractor accepts and agrees that\_\"No person in the
United States shall, on the ground of race, color, or national origin,
be excluded from participation in, be denied the benefits of, or be
otherwise subjected to discrimination under this contemplated financial
assistance (title to equipment).\"

\(e\) Location of the facilities. The Contractor may use the facilities
at any of the locations specified in the Schedule and, with the prior
written approval of the Contracting Officer, at any other location. In
granting this approval, the Contracting Officer may prescribe such terms
and conditions as may be deemed necessary for protecting the FAA\'s
interest in the facilities involved. Those terms and conditions shall
take precedence over any conflicting provisions of this contract.

\(f\) Notice of use of the facilities. The Contractor shall notify the
Contracting Officer in writing:

\(1\) Whenever use of all facilities for Government work in any
quarterly period averages less than 75 percent of the total use of the
facilities; or

\(2\) Whenever any item of the facilities is no longer needed or usable
for performing existing related contracts that authorize such use.

\(g\) Property control. The Contractor shall maintain property control
procedures and records and a system of identification of the facilities.

\(h\) Maintenance.

\(1\) Except as otherwise provided in the Schedule, the Contractor shall
perform normal maintenance of the facilities in accordance with sound
industrial practice, including protection, preservation, and repair of
the facilities and normal parts replacement for equipment.

\(2\) As soon as practicable after the execution of this contract the
Contractor shall submit to the Contracting Officer a written proposed
maintenance program, including a maintenance records system, in
sufficient detail to show its adequacy. If the Contracting Officer
agrees to the proposed program, it shall become the normal maintenance
obligation of the Contractor. The Contractor\'s performance according to
the approved program shall satisfy the Contractor\'s obligations under
subparagraphs (h)(1) and (h)(5) of this clause.

\(3\) The Contracting Officer may at any time direct the Contractor in
writing to reduce the work required by the normal maintenance program.
If such order reduces the cost of performing the maintenance, an
appropriate equitable adjustment may be made in any affected related
contract that so provides.

\(4\) The Contractor shall perform any maintenance work directed by the
Contracting Officer in writing. Work in excess of the maintenance
required under subparagraphs (h)(1) through (h)(3) of this clause should
be at Government expense. The Contractor shall notify the Contracting
Officer in writing when sound industrial practice requires maintenance
in excess of the normal maintenance program.

\(5\) The Contractor shall keep records of all work done on the
facilities and shall give the Government reasonable opportunity to
inspect these records. When facilities are disposed of under this
contract, the Contractor shall deliver the related records to the
Government or, if the Contracting Officer directs, to third persons.

\(6\) The Contractor\'s obligation under this clause for each item of
facilities shall continue until the item is removed, abandoned, or
disposed of, until the expiration of the 120-day period stated in
subparagraph (n)(4) of this clause; and until the Contractor has
discharged its other obligations under this contract with respect to
such items.

\(i\) Access. The Government and any persons designated by it shall, at
all reasonable times, have access to the premises where any of the
facilities are located.

\(j\) Indemnification of the Government. The Contractor shall indemnify
the Government and hold it harmless against claims for injury to persons
or damage to property of the Contractor or others arising from the
Contractor\'s possession or use of the facilities, except as specified
in AMS clause 3.4.1-11, Insurance\--Liability to Third Persons. However,
the provisions of the Contractor\'s related contracts shall govern any
assumption of liability by the Government for claims arising under those
contracts.

\(k\) Late delivery, diversion, and substitution.

\(1\) The Government should not be liable for breach of contract for any
delay in delivery or nondelivery of facilities to be furnished under
this contract.

\(2\) The Government has the right, at its expense, to divert the
facilities under this contract by directing the Contractor to:

\(i\) Deliver any of the facilities to locations other than those
specified in the Schedule; or

\(ii\) Assign purchase orders or subcontracts for any of the facilities
to the Government or third parties.

\(3\) The Government may furnish any facilities instead of having the
Contractor acquire or construct them. In such event, the Contractor is
entitled to reimbursement for the cost related to the acquisition or
construction of the facilities, including the cost of terminating
purchase orders and subcontracts.

\(4\) Appropriate equitable adjustment may be made in any related
contract that so provides and that is affected by any nondelivery,
delay, diversion, or substitution under this paragraph (k).

\(l\) Representations and warranties.

\(1\) The Government makes no warranty, express or implied, regarding
the condition or fitness for use of any facilities. To the extent
practical, the Contractor shall be allowed to inspect all the facilities
to be furnished by the Government before their shipment.

\(2\) If the Contractor receives facilities in a condition not suitable
for the intended use, the Contractor shall, within 30 days after receipt
and installation thereof, so notify the Contracting Officer, detailing
the facts and, as directed by the Contracting Officer and at Government
expense, either (i) return such item or otherwise dispose of it or (ii)
effect repairs or modifications. An appropriate equitable adjustment may
be made in any related contract that so provides and that is affected by
the return, disposition, repair, or modification of any facilities.

\(m\) Termination of the use of the facilities.

\(1\) The Contractor may at any time, upon written notice to the
Contracting Officer, terminate its authority to use any or all of the
facilities. Termination under this paragraph (m) shall not relieve the
Contractor of any of its obligations or liabilities under any related
contract or subcontract affected by the termination.

\(2\) The Contracting Officer may at any time, upon written notice,
terminate or limit the contractor\'s authority to use any of the
facilities. Except as otherwise provided in the Failure to Perform
clause of this contract, an equitable adjustment may be made in any
related contract of the Contractor that so provides and that is affected
by such notice.

\(n\) Disposition of the facilities.

\(1\) The provisions of this paragraph (n) shall apply to facilities for
which either the Contracting Officer or the Contractor under paragraph
(m) has terminated use, except as provided in subparagraph (n)(2).

\(2\) Unless otherwise directed by the Contracting Officer, this
paragraph shall not apply to facilities terminated by the Contractor
if\--

\(i\) The facilities terminated do not comprise all of the facilities in
the possession of the Contractor; and

\(ii\) The Contracting Officer determines that continued retention of
the facilities will not interfere with the Contractor\'s operations.

\(3\) Within 60 days after the effective date of any notice of
termination given under paragraph (m), or within such longer period as
the Contracting Officer may approve in writing, the Contractor shall
submit to the Contracting Officer, in a form satisfactory to the
Contracting Officer, an accounting for all the facilities covered by the
notice.

\(4\) Within 120 days after the Contractor accounts for any facilities
under subparagraph (n)(3), the Contracting Officer should give written
notice to the Contractor as to the disposition of the facilities, except
as otherwise provided in subparagraph (n)(6). In its disposition of the
facilities, the Government may either:

\(i\) Abandon the facilities in place, in which case all obligations of
the Government regarding such abandoned facilities and the restoration
or rehabilitation of the premises in and on which they are located shall
immediately cease; or

\(ii\) Require the Contractor to comply, at Government expense, with
such directions as the Contracting Officer may give with respect to:

\(A\) The preparation, protection, removal, or shipment of the affected
facilities;

\(B\) The retention or storage of the affected facilities; provided,
that the Contracting Officer should not direct the Contractor to retain
or store any items of facilities in or on real property not owned by the
Government if such retention or storage will interfere with the
contractor\'s operations;

\(C\) The restoration of Government-owned property incident to the
removal of the facilities from such property; and

\(D\) The sale of any affected facilities in such manner, at such times,
and at such price as may be approved by the Government, except that the
Contractor shall not be required to extend credit to any purchaser.

\(5\) If the Contracting Officer fails to give the written notice
required by subparagraph (n)(4) within the prescribed 120-day period,
the Contractor may, upon not less than 30 days\' written notice to the
Government and at Government risk and expense, (i) retain the facilities
in place or (ii) remove any of the affected severable facilities located
in Contractor-owned property and store them at the Contractor\'s plant
or in a public insured warehouse, in accordance with sound practice and
in a manner compatible with their security classification. Except as
provided in this subparagraph, the Government shall not be liable to the
Contractor for failure to give the written notice required by
subparagraph (n)(4).

\(6\) Nonseverable items of the facilities or items of the facilities
subject to patent or proprietary rights shall be disposed of in such
manner as the parties may have agreed to in writing.

\(7\) The Government, either directly or by third persons engaged by it,
may remove or otherwise dispose of any facilities for which the
Contractor\'s authority to use has been terminated, other than those for
which specific provision is made in subparagraph (n)(6).

\(8\) The Contractor shall, within a reasonable time after the
expiration of the 120-day period specified in subparagraph (n)(4),
remove all of its property from the Government property and take such
action as the Contracting Officer may direct in writing with respect to
restoring that Government property (to the extent that it is affected by
the installation of the Contractor\'s property) to its condition before
such installation.

\(9\) Unless otherwise specifically provided in this contract, the
Government shall not be obligated to the Contractor to restore or
rehabilitate any property at the Contractor\'s plant, except for
restoration or rehabilitation costs caused by removal of the facilities
under subdivision (n)(4)(ii). The Contractor agrees to indemnify the
Government against all suits or claims for damages arising out of the
Government\'s failure to restore or rehabilitate any property at the
Contractor\'s plant or property of its subcontractors, except any damage
as may be caused by the negligence of the Government, its agents, or
independent Contractors.

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contracts that include Government
property in the form of facilities.

**3.10.3-4** **Liability for the Facilities** (April 2004)

\(a\) The term \"Contractor\'s managerial personnel,\" as used in this
clause, means any of the Contractor\'s directors, officers, managers,
superintendents, or equivalent representatives who have supervision or
direction of:

\(1\) All or substantially all of the Contractor\'s business;

\(2\) All or substantially all of the Contractor\'s operations at any
one plant or separate location in which the facilities are installed or
located; or

\(3\) A separate and complete major industrial operation in connection
with which the facilities are used.

\(b\) The Contractor shall not be liable for any loss or destruction of,
or damage to, the facilities or for expenses incidental to such loss,
destruction, or damage, except as provided in this clause.

\(c\) The Contractor shall be liable for loss or destruction of, or
damage to, the facilities, and for expenses incidental to such loss,
destruction, or damage:

\(1\) That results from a risk expressly required to be insured under
this contract, but only to the extent of the insurance required to be
purchased and maintained, or to the extent of insurance actually
purchased and maintained, whichever is greater;

\(2\) That results from a risk that is in fact covered by insurance or
for which the Contractor is otherwise reimbursed, but only to the extent
of such insurance or reimbursement;

\(3\) For which the Contractor is otherwise responsible under the
express terms of this contract;

\(4\) That results from willful misconduct or lack of good faith on the
part of the Contractor\'s managerial personnel; or

\(5\) That results from a failure, due to willful misconduct or lack of
good faith on the part of the Contractor\'s managerial personnel:

\(i\) To establish, maintain, and administer a system for control of the
facilities in accordance with AMS Clause 3.10.3-2, or

\(ii\) To maintain and administer a program for maintenance, repair,
protection, and preservation of the facilities, in accordance with AMS
Clause 3.10.3-2, or to take reasonable steps to comply with any
appropriate written direction that the Contracting Officer may prescribe
as reasonably necessary for the protection of the facilities. If the
Government Property clause does not include Section A paragraph (b),
then the Contractor shall exercise sound industrial practice in
complying with the requirements of this subdivision (c)(5)(ii).

\(d\) If the Contractor fails to act as provided by subparagraph (c)(5)
above, after being notified (by certified mail addressed to one of the
Contractor\'s managerial personnel) of the Government\'s disapproval,
withdrawal of approval, or nonacceptance of the system or program, it
shall be conclusively presumed that such failure was due to willful
misconduct or lack of good faith on the part of the Contractor\'s
managerial personnel. Furthermore, any loss or destruction of, or damage
to, the Government property shall be presumed to have resulted from such
failure unless the Contractor can establish by clear and convincing
evidence that such loss, destruction, or damage:

\(1\) Did not result from the Contractor\'s failure to maintain an
approved program or system; or

\(2\) Occurred while an approved program or system was maintained by the
Contractor.

\(e\) If the Contractor transfers facilities to the possession and
control of a subcontractor, the transfer shall not affect the liability
of the Contractor for loss or destruction of, or damage to, the
facilities. However, the Contractor shall require the subcontractor to
assume the risk of, and be responsible for, any loss or destruction of,
or damage to, the facilities while in the subcontractor\'s possession or
control, except to the extent that the subcontract, with the advance
approval of the Contracting Officer, relieves the subcontractor from
such liability. In the absence of such approval, the subcontract should
contain appropriate provisions requiring the return of all the
facilities in as good condition as when received, except for reasonable
wear and tear or for their utilization in accordance with the provisions
of the prime contract.

\(f\) Unless expressly directed in writing by the Contracting Officer,
the Contractor shall not include in the price or cost under any contract
with the Government the cost of insurance (including self-insurance)
against any form of loss, destruction, or damage to the facilities. Any
insurance required under this clause shall be in such form, in such
amounts, for such periods of time, and with such insurers (including the
Contractor as self-insurer in appropriate circumstances) as the
Contracting Officer shall require or approve. Such insurance shall
provide for 30 days advance notice to the Contracting Officer, in the
event of cancellation or material change in the policy coverage on the
part of the insurer. A certificate of insurance or a certified copy of
such insurance shall be deposited promptly with the Contracting Officer.
The Contractor shall, not less than 30 days before the expiration of
such insurance, deliver to the Contracting Officer a certificate of
insurance or a certified copy of each renewal policy. The insurance
shall be in the name of the United States of America (Agency Name), the
Contractor, and such other interested parties as the Contracting Officer
should approve, and should contain a loss payable clause reading
substantially as follows:

\"Any loss under this policy shall be adjusted with (Contractor) and the
proceeds, at the direction of the Government, shall be paid to
(Contractor). Proceeds not paid to (Contractor) shall be paid to the
office designated by the Contracting Officer.\"

\(g\) When there is any loss or destruction of, or damage to, the
facilities:

\(1\) The Contractor shall promptly notify the Contracting Officer and,
with the assistance of the Contracting Officer, shall take all
reasonable steps to protect the facilities from further damage, separate
the damaged and undamaged facilities, put all the facilities in the best
possible order, and promptly furnish to the Contracting Officer (and in
any event within 30 days) a statement of:

\(i\) The facilities lost or damaged;

\(ii\) The time and origin of the loss or damage;

\(iii\) All known interests in commingled property of which the
facilities are a part; and

\(iv\) Any insurance covering any part of or interest in such commingled
property;

\(2\) The Contractor shall make such repairs, replacements and
renovations of the lost, destroyed, or damaged facilities, or take such
other action as the Contracting Officer may direct in writing; and
paragraph (g) at Government expense, except to the terms of this clause,
and except as any damage, destruction, or loss is compensated by
insurance.

\(h\) The Government is not obliged to replace or repair the facilities
that have been lost, destroyed, or damaged. If the Government does not
replace or repair the facilities, price, or both, and in any other
contractual condition of the related contracts affected shall be
governed by the terms and conditions of those contracts.

\(i\) Except to the extent of any loss or destruction of, or damage to,
the facilities for which the Contractor is relieved of liability, the
facilities shall be returned to the Government or otherwise disposed of
under the terms of this contract

\(1\) in as good condition as when received by the Contractor,

\(2\) improved, or

\(3\) as required under the terms of this contract, less ordinary wear
and tear.

\(j\) If the Contractor is in any way compensated (excepting proceeds
from use and occupancy insurance, the cost of which is not borne
directly or indirectly by the Government) for any loss or destruction
of, or damage to, the facilities, the Contractor, as directed by the
Contracting Officer, shall:

\(1\) Use the proceeds to repair, renovate, or replace the facilities
involved; or

\(2\) Pay such proceeds to the Government.

\(k\) The Contractor shall do nothing to prejudice the Government\'s
right to recover against third parties for any loss or destruction of,
or damage to, the facilities. Upon the request of the Contracting
Officer, the Contractor shall furnish to the Government, at Government
expense, 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.

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contracts that include Government
property in the form of facilities.

**3.10.3-5** **Use and Charges** (April 2004)

\(a\) The Contractor may use the facilities without charge in the
performance of:

\(1\) Contracts with the Government that specifically authorize such use
without charge;

\(2\) Subcontracts of any tier under Government prime contracts if the
Contracting Officer having cognizance of the prime contract (i) approves
a subcontract specifically authorizing such use or (ii) otherwise
authorizes such use in writing; and

\(3\) Other work, if the Contracting Officer specifically authorizes in
writing use without charge for such work.

\(b\) If granted written permission by the Contracting Officer, or if it
is specifically provided for in the Schedule, the Contractor may use the
facilities for a rental fee for work other than that provided in
paragraph (a) above. Authorizing such use of the facilities does not
waive any rights of the Government to terminate the Contractor\'s right
to use the facilities. The rental fee shall be determined in accordance
with the following paragraphs.

\(c\) The following bases are or shall be established in writing for the
rental computation prescribed in paragraphs (d) and (e) below in advance
of any use of the facilities on a rental basis:

\(1\) The rental rates shall be those set forth in Table I.

\(2\) The acquisition cost of the facilities shall be the total cost to
the Government, as determined by the Contracting Officer, and includes
the cost of transportation and installation, if borne by the Government.

\(i\) When Government-owned special tooling or accessories are rented
with any of the facilities, the acquisition cost of the facilities shall
be increased by the total cost to the Government of such tooling or
accessories, as determined by the Contracting Officer.

\(ii\) When any of the facilities are substantially improved at
Government expense, the acquisition cost of the facilities shall be
increased by the increase in value that the improvement represents, as
determined by the Contracting Officer.

\(iii\) The determinations of the Contracting Officer under this
subparagraph (c)(2) shall be final.

\(3\) For the purpose of determining the amount of rental due under
paragraph (d), the rental period shall be not less than 1 month nor more
than 6 months, as approved by the Contracting Officer.

\(4\) For the purpose of computing any credit under paragraph (e), the
unit in determining the amount of use of the facilities shall be direct
labor hours, sales, hours of use, or any other unit of measure that will
result in an equitable apportionment of the rental charge, as approved
by the Contracting Officer.

\(d\) The Contractor shall compute the amount of rentals to be paid for
each rental period by applying the appropriate rental rates to the
acquisition cost of such facilities as may have been authorized for use
in advance for the rental period.

\(e\) The full rental charge for each period shall be reduced by a
credit. The credit equals the rental amount that would otherwise be
properly allocable to the work for which the facilities were used
without charge under paragraph (a). The credit shall be computed by
multiplying the full rental for the rental period by a fraction in which
the numerator is the amount of use of the facilities by the Contractor
without charge during the period, and the denominator is the total
amount of use of the facilities by the Contractor during the period.

\(f\) Within 90 days after the close of each rental period, the
Contractor shall submit to the Contracting Officer a written statement
of the use made of the facilities by the Contractor and the rental due
the Government. At the same time, the Contractor shall make available
such records and data as are determined by the Contracting Officer to be
necessary to verify the information contained in the statement.

\(g\) If the Contractor fails to submit the information as required in
paragraph (f) above, the Contractor shall be liable for the full rental
for the period. However, if the Contractor\'s failure to submit was not
the fault of the Contractor, the Contracting Officer should grant to the
Contractor in writing a reasonable extension of time to submit.

\(h\) Unless otherwise directed in writing by the Contracting Officer,
the Contractor shall give priority in the use of the facilities to
performing contracts and subcontracts of the Contracting Officer having
cognizance of the facilities and shall not undertake any work involving
the use of the facilities that would interfere with performing existing
Government contracts or subcontracts.

\(i\) Concurrently with the submission of the written statement
prescribed by paragraph (f) of this clause, the Contractor shall pay the
rental due the Government under this clause. Payment shall be by check
made payable to the office designated for contract administration and
mailed or delivered to the Contracting Officer. Receipt and acceptance
by the Government of the Contractor\'s check pursuant to this paragraph
shall constitute an accord and satisfaction of the final amount due the
Government hereunder, unless the Contractor is notified in writing
within 180 days following receipt that the amount received is not
regarded by the Government as the final amount due.

\(j\) If the Contractor uses any item of the facilities without
authorization, the Contractor shall be liable for the full monthly
rental, without credit, for such item for each month or part of a month
in which such unauthorized use occurs; provided, however, that the
agency head concerned may, in writing, waive the Contractor\'s liability
for such unauthorized use if the agency head determines that without
such a waiver gross inequity would result. The acceptance of any rental
by the Government under this clause shall not be construed as a waiver
or relinquishment of any rights it may have against the Contractor
growing out of the Contractor\'s unauthorized use of the facilities or
any other failure to perform this contract according to its terms.

TABLE I - Rental Rates

\(i\) For real property and associated fixtures, a fair and reasonable
rental shall be established, based on sound commercial practice.

\(ii\) For plant equipment of the types covered in Federal Supply
classes 3405, 3408, 3410, and 3411 through 3419, machine tools; and in
3441 through 3449, secondary metal forming and cutting machines, the
following monthly rates shall apply:

Age of Equipment Monthly Rental Rate

Under 2 years old 3.0 percent

Over 2 to 3 years old 2.0 percent

Over 3 to 6 years old 1.5 percent

Over 6 to 10 years old 1.0 percent

Over 10 years old 0.75 percent

The age of each item of the equipment shall be based on the year in
which it was manufactured, with a birthday on January 1 of each year
thereafter. For example, an item of equipment manufactured on July 15,
1978, will be considered to be over 1 year old on and after January 1,
1979, and over 2 years old on and after January 1, 1980.

\(iii\) For personal property and equipment not covered in (i) or (ii)
above, a rental shall be established at not less than the prevailing
commercial rate, if any, or, in the absence of such rate, not less than
2 percent per month for electronic test equipment and automotive
equipment and not less than 1 percent per month for all other property
and equipment.

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contracts that include Government
property in the form of facilities.

**3.10.3-6** **Government Property(Facilities Acquisition)** (April
2004)

\(a\) Facilities to be provided.

\(1\) The Contractor, at Government expense and subject to the
provisions of this contract, shall acquire, construct, or install the
facilities and perform the related work as described in the Schedule.

\(2\) The Government, subject to the provisions of this contract, shall
furnish to the Contractor the facilities identified in the Schedule as
Government-furnished facilities. The Contractor, at Government expense,
shall perform the work with respect to those Government-furnished
facilities as is described in the Schedule.

\(b\) Title in the facilities

\(1\) The Government shall retain title to all Government-furnished
property.

\(2\) Title to all facilities and components shall pass to and vest in
the Government upon delivery by the vendor of all such items purchased
by the Contractor for which it is entitled to be reimbursed as a direct
item of cost under this contract.

\(3\) Title to other property, the cost of which is reimbursable to the
Contractor under this contract, shall pass to and vest in the Government
upon:

\(i\) Issuance of the property for use in performing this contract;

\(ii\) Commencement of processing or use of the property in performing
this contract; or

\(iii\) Reimbursement of the cost of the property by the Government,
whichever occurs first.

\(4\) Title to the facilities shall not be affected by their
incorporation into, or attachment to, any property not owned by the
Government, nor shall any item of the facilities become a fixture or
lose its identity as personal property by being attached to any real
property. The Contractor shall keep the facilities free and clear of all
liens and encumbrances and, except as otherwise authorized by this
contract or by the Contracting Officer, shall not remove or otherwise
part with possession of, or permit the use by others of, any of the
facilities.

\(5\) The Contractor may, with the written approval of the Contracting
Officer, install, arrange, or rearrange, on Government-furnished
premises, readily movable machinery, equipment, and other items
belonging to the Contractor. Title to any such item shall remain in the
Contractor even though it may be attached to real property owned by the
Government, unless the Contracting Officer determines that it is so
permanently attached that removal would cause substantial injury to
Government property.

\(6\) The Contractor shall not construct or install, at its own expense,
any fixed improvement or structural alterations in Government buildings
or other real property without advance written approval of the
Contracting Officer. Fixed improvement, or structural alterations, as
used herein, means any alteration or improvement in the nature of the
building or other real property that, after completion, cannot be
removed without substantial loss of value or damage to the premises. The
term does not include foundations for production equipment.

\(c\) Property control. The Contractor shall maintain property control
procedures and records and a system of identification of the facilities
in accordance with the provisions of FAA Acquisition Management System
(AMS) Clauses Section 3.10.3 Government Property in effect on the date
of this contract. The provisions of the AMS Clauses Section 3.10.3, as
specified in the contract, are hereby incorporated by reference and made
a part of this contract.

\(d\) Access. The Government and any persons designated by it shall, at
all reasonable times, have access to the premises where any of the
facilities are located.

\(e\) Indemnification of the Government. The Contractor shall indemnify
the Government and hold it harmless against claims for injury to persons
or damage to property of the Contractor or others arising from the
Contractor\'s possession or use of the facilities, except as specified
in clause 3.4.1-11, Insurance\--Liability to Third Persons. However, the
provisions of the Contractor\'s related contracts shall govern any
assumption of liability by the Government for claims arising under such
related contracts.

\(f\) Late delivery, diversion, and substitution.

\(1\) The Government shall not be liable for breach of contract for any
delay in delivery or non delivery of facilities to be furnished under
this contract,

\(2\) The Government has the right, at its expense, to divert the
facilities under this contract by directing the Contractor to:

\(i\) Deliver any of the facilities to locations other than those
specified in the Schedule; or

\(ii\) Assign purchase orders or subcontracts for any of the facilities
to the Government or third parties.

\(3\) The Government may furnish any facilities instead of having the
Contractor acquire or construct them. In such event, the Contractor is
entitled to reimbursement for the cost related to the acquisition or
construction of the facilities, including the cost of terminating
purchase orders and subcontracts.

\(4\) Appropriate equitable adjustment may be made in any related
contract that so provides and that is affected by nondelivery, delay,
diversion, or substitution under this paragraph (f).

\(g\) Representations and warranties.

\(1\) The Government makes no warranty, express or implied, regarding
the condition or fitness for use of any facilities. To the extent
practical, the Contractor shall be allowed to inspect all the facilities
to be furnished by the Government before their shipment.

\(2\) If the Contractor receives facilities in a condition not suitable
for the intended use, the Contractor shall, within 30 days after receipt
and installation thereof, so notify the Contracting Officer, detailing
the facts, and, as directed by the Contracting Officer and at Government
expense, either (i) return such item or otherwise dispose of it or (ii)
effect repairs or modifications. An appropriate equitable adjustment may
be made in any related contract that so provides and that is affected by
the return, disposition, repair, or modification of any facilities.

\(h\) Supersedure.

Upon acquisition, construction, or installation of the facilities called
for by this contract, or any usable increment of the facilities, and
acceptance by the Government, the facilities shall then be subject to
the provisions of the facilities contract that authorizes the use of the
items.

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contracts that include Government
property in the form of facilities.

**3.10.3-7** **Government Property - Facilities Use** (April 2004)

\(a\) Period of this contract. If not otherwise specified in this
contract and if not previously terminated under paragraph (j), the use
of the facilities authorized under this contract shall terminate 5 years
after its effective date. Thereafter, if continued use of the facilities
by the Contractor is mutually desired, the parties shall enter into a
new contract that shall incorporate such provisions as may then be
required by applicable laws and regulations. The parties may, by written
agreement, extend the use of the facilities under this contract beyond
this 5-year period to permit the completion of any then-existing related
contracts and subcontracts.

\(b\) Title in the facilities.

\(1\) Title to the facilities shall remain in the Government. Title to
parts replaced by the Contractor in carrying out its normal maintenance
obligations under paragraph (f) shall pass to and vest in the Government
upon completion of their installation in the facilities.

\(2\) Title to the facilities shall not be affected by their
incorporation into or attachment to any property not owned by the
Government, nor shall any item of the facilities become a fixture or
lose its identity as personal property by being attached to any real
property. The Contractor shall keep the facilities free and clear of all
liens and encumbrances and, except as otherwise authorized by this
contract or by the Contracting Officer, shall not remove or otherwise
part with possession of, or permit the use by others of, any of the
facilities.

\(3\) The Contractor may, with the written approval of the Contracting
Officer, install, arrange, or rearrange, on Government-furnished
premises, readily movable machinery, equipment, and other items
belonging to the Contractor. Title to any such item shall remain in the
Contractor even though it may be attached to real property owned by the
Government, unless the Contracting Officer determines that it is so
permanently attached that removal would cause substantial injury to
Government property.

\(4\) The Contractor shall not construct or install, at its own expense,
any fixed improvement or structural alterations in Government buildings
or other real property without advance written approval of the
Contracting Officer. Fixed improvement or structural alterations, as
used herein, means any alteration or improvement in the nature of the
building or other real property that, after completion, cannot be
removed without substantial loss of value or damage to the premises. The
term does not include foundations for production equipment.

\(c\) Location of the facilities. The Contractor may use the facilities
at any of the locations specified in the Schedule and, with the prior
written approval of the Contracting Officer, at any other location. In
granting this approval, the Contracting Officer may prescribe such terms
and conditions as may be deemed necessary for protecting the
Government\'s interest in the facilities involved. Those terms and
conditions shall take precedence over any conflicting provisions of this
contract.

\(d\) Notice of use of the facilities. The Contractor shall notify the
Contracting Officer in writing\--

\(1\) Whenever use of all facilities for Government work in any
quarterly period averages less than 75 percent of the total use of the
facilities; or

\(2\) Whenever any item of the facilities is no longer needed or usable
for performing existing related contracts that authorize such use.

\(e\) Property control.

The Contractor shall maintain property control procedures and records,
and a system of identification of the facilities, in accordance with the
provisions of FAA guidance Section 3.10.3 in effect on the date of this
contract. The provisions of FAA guidance Section 3.10.3 are hereby
incorporated by reference and made a part of this contract.

\(f\) Maintenance.

\(1\) Except as otherwise provided in the Schedule, the Contractor shall
protect, preserve, maintain (including normal parts replacement), and
repair the facilities in accordance with sound industrial practice.

\(2\) As soon as practicable after the execution of this contract, the
Contractor shall submit to the Contracting Officer a written proposed
maintenance program, including a maintenance records system, in
sufficient detail to show the adequacy of the proposed program. If the
Contracting Officer agrees to the proposed program, it shall become the
normal maintenance obligation of the Contractor. The Contractor\'s
performance according to the approved program shall satisfy the
Contractor\'s obligations under subparagraphs (f)(1) and (f)(5) of this
clause.

\(3\) The Contracting Officer may at any time direct the Contractor in
writing to reduce the work required by the normal maintenance program.
If such order reduces the cost of performing the maintenance, an
appropriate equitable adjustment may be made in any affected related
contract that so provides.

\(4\) The Contractor shall perform any maintenance work directed by the
Contracting Officer in writing. Work in excess of the maintenance
required under subparagraphs (f)(1) through (f)(3) of this clause shall
be at Government expense. The Contractor shall notify the Contracting
Officer in writing when sound industrial practice requires maintenance
in excess of the normal maintenance program.

\(5\) The Contractor shall keep records of all work done on the
facilities and shall give the Government reasonable opportunity to
inspect such records. When facilities are disposed of under this
contract, the Contractor shall deliver the related records to the
Government or, if directed by the Contracting Officer, to third persons.

\(6\) The Contractor\'s obligation under this clause for each item of
facilities shall continue until the item is removed, abandoned, or
disposed of at the expiration of the 120-day period stated in
subparagraph (k)(4) of this clause and when the Contractor has
discharged its other obligations under this contract with respect to
such items.

\(g\) Access. The Government and any persons designated by it shall, at
all reasonable times, have access to the premises where any of the
facilities are located.

\(h\) Indemnification of the Government. The Contractor shall indemnify
the Government and hold it harmless against claims for injury to persons
or damage to property of the Contractor or others arising from the
Contractor\'s possession or use of the facilities under this contract.
However, the provisions of the Contractor\'s related contracts shall
govern any assumption of liability by the Government for claims arising
under those contracts.

\(i\) Representations and warranties.

\(1\) The Government makes no warranty, express or implied, regarding
the condition or fitness for use of any facilities. To the extent
practical, the Contractor shall be allowed to inspect all the facilities
to be furnished by the Government before their shipment.

\(2\) If the Contractor receives facilities in a condition not suitable
for the intended use, the Contractor shall, within 30 days after receipt
and installation thereof, so notify the Contracting Officer, detailing
the facts, and, as directed by the Contracting Officer and at Government
expense, either (i) return such item or otherwise dispose of it or (ii)
effect repairs or modifications. An appropriate equitable adjustment may
be made in any related contract that so provides and that is affected by
the return, disposition, repair, or modification of any facilities.

\(j\) Termination of use of the facilities.

\(1\) The Contractor may at any time, upon written notice to the
Contracting Officer, terminate its authority to use any or all of the
facilities. Termination under this paragraph (j) shall not relieve the
Contractor of any of its obligations or liabilities under any related
contract or subcontract affected by the termination.

\(2\) The Contracting Officer may at any time, upon written notice,
terminate or limit the Contractor\'s authority to use any of the
facilities. Except as otherwise provided in the Failure to Perform
clause of this contract, an equitable adjustment may be made in any
related contract of the Contractor that so provides and that is affected
by such notice.

\(k\) Disposition of the facilities.

\(1\) The provisions of this paragraph (k) shall apply to facilities
whose use has been terminated by either the Contracting Officer or the
Contractor under paragraph (j), except as provided in subparagraph
(k)(2).

\(2\) Unless otherwise directed by the Contracting Officer, this
paragraph (k) shall not apply to facilities terminated by the Contractor
if\--(i) The facilities terminated do not comprise all of the facilities
in the possession of the Contractor; and (ii) The Contracting Officer
determines that continued retention of the facilities will not interfere
with the Contractor\'s operations.

\(3\) Within 60 days after the effective date of any notice of
termination given under paragraph (j) or within such longer period as
the Contracting Officer may approve in writing, the Contractor shall
submit to the Contracting Officer an accounting for all the facilities
covered by such notice. The submission of the Contractor shall be in a
form satisfactory to the Contracting Officer.

\(4\) Within 120 days after the Contractor accounts for any facilities
under subparagraph (k)(3), the Contracting Officer shall give written
notice to the Contractor as to the disposition of the facilities, except
as otherwise provided in subparagraph (k)(6). In its disposition of the
facilities, the Government may either\--

\(i\) Abandon the facilities in place, in which case all obligations of
the Government regarding such abandoned facilities and the
rehabilitation of the premises in and on which they are located shall
immediately cease; or

\(ii\) Require the Contractor to comply, at Government expense, with
such directions as the Contracting Officer may give with respect to\--

\(A\) The preparation, protection, removal, or shipment of the affected
facilities;

\(B\) The retention or storage of the affected facilities; provided,
that the Contracting Officer shall not direct the Contractor to retain
or store any items of facilities in or on real property not owned by the
Government if such retention or storage will interfere with the
Contractor\'s operations;

\(C\) The restoration of Government-owned property incident to the
removal of the facilities from such property; and

\(D\) The sale of any affected facilities in such manner, at such times,
and at such price as may be approved by the Government, except that the
Contractor shall not be required to extend credit to any purchaser.

\(5\) If the Contracting Officer fails to give the written notice
required by subparagraph (k)(4) of this clause within the prescribed
120-day period, the Contractor may, upon not less than 30 days\' written
notice to the Government, and at Government risk and expense,

\(i\) retain the facilities in place or

\(ii\) remove any of the affected severable facilities located in
Contractor-owned property and store them at the Contractor\'s plant or
in a public insured warehouse.

Such removal and storage shall be in accordance with sound practice and
in a manner compatible with the security classification of the
facilities. Except as provided in this subparagraph (k)(5), the
Government shall not be liable to the Contractor for failure to give the
written notice required by subparagraph (k)(4).

\(6\) Nonseverable items of the facilities or items of the facilities
subject to patent or proprietary rights shall be disposed of in such
manner as the parties may have agreed to in writing.

\(7\) The Government, either directly or by third persons engaged by it,
may remove or otherwise dispose of any facilities for which the
Contractor\'s authority to use has been terminated, other than those for
which specific provision is made in subparagraph (k)(6).

\(8\) The Contractor shall, within a reasonable time after the
expiration of the 120-day period specified in subparagraph (k)(4),
remove all of its property from the Government property and take such
action as the Contracting Officer may direct in writing with respect to
restoring such Government property, to the extent that it is affected by
the installation of the Contractor\'s property, to its condition before
such installation.

\(9\) Unless otherwise specifically provided in this contract, the
Government shall not be obligated to the Contractor to restore or
rehabilitate any property at the Contractor\'s plant, except for
restoration or rehabilitation costs caused by removal of the facilities
under subdivision (k)(4)(ii). The Contractor agrees to indemnify the
Government against all suits or claims for damages arising out of the
Government\'s failure to restore or rehabilitate any property at the
Contractor\'s plant or property of its subcontractors, except any damage
as may be caused by the negligence of the Government, its agents, or
independent contractors.

\(l\) Supersedure.

\(1\) Facilities previously provided to the Contractor under the
contracts specified in the Schedule of this contract shall become
subject to this contract upon its effective date. The terms of those
contracts by which such facilities were previously provided to the
Contractor are hereby superseded with respect to such facilities, except
for rights and obligations that may have accrued under such other
contract before the effective date of this contract.

\(2\) Facilities subsequently provided the Contractor under any contract
shall, if that contract so specifies, be subject to this contract upon
the completion of their construction, acquisition, and installation or
upon their availability for use, whichever occurs first, except as
otherwise provided in the contract or other document by which such
facilities are provided to the Contractor.

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contracts that include Government
property in the form of facilities.

**3.10.3-7/alt1** **Government Property (Facilities Use). Alternate I**
(April 2004)

\(b\) Title to equipment.

\(1\) Title to equipment (and other tangible personal property) having a
unit acquisition cost of less than \$5,000 purchased with funds
available for research shall vest in the Contractor upon acquisition or
as soon thereafter as feasible, provided that the Contractor received
the Contracting Officer\'s approval before acquiring the equipment.
Title to other equipment purchased with Government funds shall vest in
the Government. The Government may at any time during the term of this
contract or upon its completion or termination transfer to the
Contractor the title to any equipment purchased with funds available for
research. The parties shall upon terms and conditions, agree to any such
transfer. The Contractor agrees that it shall not charge under any
Government contract or subcontract any depreciation, amortization, or
use of the equipment purchased or transferred under this paragraph. When
title to equipment is vested in the Contractor or is transferred under
this paragraph to the Contractor, the equipment ceases to be Government
property. Within 10 days after the end of the calendar quarter in which
such acquisition or transfer of title occurs, the Contractor shall
furnish the Contracting Officer a list of all equipment, title to which
is vested in the Contractor.

\(2\) The Government shall retain title to all Government-furnished
property.

\(i\) Except as set forth in paragraph (b) of this clause, title to all
property shall pass to and vest in the Government upon delivery by the
vendor of all such items purchased by the Contractor for which it is
entitled to be reimbursed as a direct item of cost under this or a
related contract.

\(ii\) Title to replacement parts furnished by the Contractor in
performing its normal obligations under paragraph (f) of this clause
shall pass to and vest in the Government upon completion of their
installation in the facilities.

\(iii\) Title to other property, the cost of which is reimbursable to
the Contractor under this contract or a related contract, shall pass to
and vest in the Government upon:

\(A\) Issuance of the property for use in performing this contract;

\(B\) Commencement of processing or use of the property in performing
this contract; or

\(C\) Reimbursement of the cost of the property by the Government,
whichever occurs first.

\(3\) Title to the facilities shall not be affected by their
incorporation into or attachment to any property not owned by the
Government, nor shall any item of the facilities become a fixture or
lose its identity as personal property by being attached to any real
property. The Contractor shall keep the facilities free and clear of all
liens and encumbrances and, except as otherwise authorized by this
contract or by the Contracting Officer, shall not remove or otherwise
part with possession of, or permit the use by others of, any of the
facilities.

\(4\) The Contractor may, with the written approval of the Contracting
Officer, install, arrange, or rearrange, on Government-furnished
premises, readily movable machinery, equipment, and other items
belonging to the Contractor. Title to any such items shall remain in the
Contractor even though it may be attached to real property owned by the
Government, unless the Contracting Officer determines that it is so
permanently attached that removal would cause substantial injury to
Government property.

\(5\) The Contractor shall not construct or install, at its own expense,
any fixed improvement or structural alterations in Government buildings
or other real property without advance written approval of the
Contracting Officer. Fixed improvement, as used herein, means any
alteration or improvement in the nature of the building or other real
property that, after completion, cannot be removed without substantial
loss of value or damage to the premises. The term does not include
foundations for production equipment.

\(6\) Vesting title under this paragraph (b) is subject to civil rights
legislation, 42 U.S.C. 2000d. Before title is vested and by signing this
contract, the Contractor accepts and agrees that\--

\"No person in the United States shall, on the ground of race, color, or
national origin, be excluded from participation in, be denied the
benefits of, or be otherwise subjected to discrimination under this
contemplated financial assistance (title to equipment).\"

(End of clause)

PRESCRIPTION:

Shall be used in all SIR\'s and contracts that include Government
property in the form of facilities.

**3.10.3-8** **RESERVED** (April 2004)

.

PRESCRIPTION:

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**3.10.3-9** **RESERVED** (April 2004)

.

PRESCRIPTION:

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**3.10.3-10** **RESERVED** (April 2004)

.

PRESCRIPTION:

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**3.10.3-11** **RESERVED** (April 2004)

.

PRESCRIPTION:

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**3.10.3-12** **RESERVED** (April 2004)

.

PRESCRIPTION:

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**3.10.3-13** **RESERVED** (April 2004)

.

PRESCRIPTION:

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**3.10.3-14** **RESERVED** (April 2004)

.

PRESCRIPTION:

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**3.10.3-15** **RESERVED** (April 2004)

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PRESCRIPTION:

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**3.10.4-1** **Contractor Inspection Requirements** (April 1996)

The Contractor is responsible for performing or having performed all
inspections and tests necessary to substantiate that the supplies or
services furnished under this contract conform to contract requirements,
including any applicable technical requirements for specified
manufacturers\' parts.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for non-complex, non-critical
items, where Government inspection is deemed unnecessary.

**3.10.4-2** **Inspection of Supplies\--Fixed-Price** (November 1997)

\(a\) Definition. \'Supplies,\' as used in this clause, includes but is
not limited to raw materials, components, intermediate assemblies, end
products, and lots of supplies.

\(b\) The Contractor shall provide and maintain an inspection system
acceptable to the Government covering supplies under this contract and
shall tender to the Government for acceptance only supplies that have
been inspected in accordance with the inspection system and have been
found by the Contractor to be in conformity with contract requirements.
As part of the system, the Contractor shall prepare records evidencing
all inspections made under the system and the outcome. These records
shall be kept complete and made available to the Government during
contract performance and for as long afterwards as the contract
requires. The Government may perform reviews and evaluations as
reasonably necessary to ascertain compliance with this paragraph. These
reviews and evaluations shall be conducted in a manner that will not
unduly delay the contract work. The right of review, whether exercised
or not, does not relieve the Contractor of the obligations under the
contract.

\(c\) The Government has the right to inspect and test all supplies
called for by the contract, to the extent practicable, at all places and
times, including the period of manufacture, and in any event before
acceptance. The Government shall perform inspections and tests in a
manner that will not unduly delay the work. The Government assumes no
contractual obligation to perform any inspection and test for the
benefit of the Contractor unless specifically set forth elsewhere in
this contract.

\(d\) If the Government performs inspection or test on the premises of
the Contractor or a subcontractor, the Contractor shall furnish, and
shall require subcontractors to furnish, without additional charge, all
reasonable facilities and assistance for the safe and convenient
performance of these duties. Except as otherwise provided in the
contract, the Government shall bear the expense of Government
inspections or tests made at other than the Contractor\'s or
subcontractor\'s premises; provided, that in case of rejection, the
Government shall not be liable for any reduction in the value of
inspection or test samples.

\(e\) (1) When supplies are not ready at the time specified by the
Contractor for inspection or test, the Contracting Officer may charge to
the Contractor the additional cost of inspection or test.

\(2\) The Contracting Officer may also charge the Contractor for any
additional cost of inspection or test when prior rejection makes
reinspection or retest necessary.

\(f\) The Government has the right either to reject or to require
correction of nonconforming supplies. Supplies are nonconforming when
they are defective in material or workmanship or are otherwise not in
conformity with contract requirements. The Government may reject
nonconforming supplies with or without disposition instructions.

\(g\) The Contractor shall remove supplies rejected or required to be
corrected. However, the Contracting Officer may require or permit
correction in place, promptly after notice, by and at the expense of the
Contractor. The Contractor shall not tender for acceptance corrected or
rejected supplies without disclosing the former rejection or requirement
for correction, and, when required, shall disclose the corrective action
taken.

\[If the contract type is fixed price incentive, the following applies;
Cost of removal, replacement, or correction shall be considered a cost
incurred, or to be incurred, in the total final negotiated cost fixed
under the incentive price revision clause. However, replacements or
corrections by the Contractor after the establishment of the total final
price shall be at no increase in the total final price.\]

\[If the contract type is a fixed-ceiling price contract with
retroactive price redetermination, the following applies; Cost of
removal, replacement, or correction shall be considered a cost incurred,
or to be incurred, when determining the price under the price
redetermined clause. However, replacements or corrections by the
contractor after the establishment of the redetermined prices shall be
at no increase in the redetermined price.\]

\(h\) If the Contractor fails to promptly remove, replace, or correct
rejected supplies that are required to be removed or to be replaced or
corrected, the Government may either:

\(1\) by contract or otherwise, remove, replace, or correct the supplies
and charge the cost to the Contractor or

\(2\) terminate the contract for default.

Unless the Contractor corrects or replaces the supplies within the
delivery schedule, the Contracting Officer may require their delivery
and make an equitable price reduction. Failure to agree to a price
reduction shall be a dispute.

\[If the contract type is fixed-price incentive, substitute the
following for subparagraph (h). \"(h) If the Contractor fails to
promptly remove, replace, or correct rejected supplies that are required
to be removed or to be replaced or corrected, the Government may either:

\(1\) by contract or otherwise, remove, replace, or correct the supplies
and equitably reduce the target price or, if established, the total
final price or

\(2\) may terminate the contract for default.

Unless the Contractor corrects or replaces the nonconforming supplies
within the delivery schedule, the Contracting Officer may require their
delivery and equitably reduce any target price or, if it is established,
the total final contract price. Failure to agree upon an equitable price
reduction shall be a dispute.\"\]

\[If the contract type is fixed-ceiling price contract with retroactive
price redetermination, substitute the following for subparagraph (h).
\"(h) If the Contractor fails to promptly remove, replace, or correct
rejected supplies that are required to be removed or to be replaced or
corrected, the Government may either:

\(1\) by contract or otherwise, remove, replace, or correct the supplies
and equitably reduce the initial contract price or, if established, the
redetermined contract price or

\(2\) may terminate the contract for default.

Unless the Contractor corrects or replaces the nonconforming supplies
within the delivery schedule, the Contracting Officer may require their
delivery and equitably reduce the initial contract price or, if it is
established, the redetermined contract price. Failure to agree upon an
equitable price reduction shall be a dispute.\"\]

\(i\) If this contract involves government quality assurance at source,
the contractor shall provide adequate advance notification as to when
supplies are scheduled for inspection and test, and when the supplies
will be ready for government inspection. Unless otherwise stated in the
contract, this shall normally be at least 2 days if a Government
representative is in residence in the Contractor\'s plant, or 7 days
otherwise.

\(j\) The Government shall accept or reject supplies as promptly as
practicable when presented for inspection and test, or after delivery,
unless otherwise provided in the contract. Government failure to inspect
and accept or reject the supplies shall not relieve the Contractor from
responsibility, nor impose liability on the Government, for
nonconforming supplies.

\(k\) Inspections and tests by the Government do not relieve the
Contractor of responsibility for defects or other failures to meet
contract requirements discovered before acceptance. Acceptance shall be
conclusive, except for latent defects, fraud, gross mistakes amounting
to fraud, or as otherwise provided in the contract.

\(l\) If acceptance is not conclusive for any of the reasons in
paragraph (k) hereof, the Government, in addition to any other rights
and remedies provided by law, or under other provisions of this
contract, shall have the right to require the Contractor:

\(1\) at no increase in contract price, (or target price, total final
price, initial contract price, or the redetermined price of the
contract) to correct or replace the defective or nonconforming supplies
at the original point of delivery or at the Contractor\'s plant at the
Contracting Officer\'s election, and in accordance with a reasonable
delivery schedule as may be agreed upon between the Contractor and the
Contracting Officer; provided, that the Contracting Officer may require
a reduction in contract price (or any target price, total final price,
the initial price, or redetermined price of the contract) if the
Contractor fails to meet such delivery schedule, or

\(2\) within a reasonable time after receipt by the Contractor of notice
of defects or nonconformance, to repay such portion of the contract
price as is equitable under the circumstances if the Contracting Officer
elects not to require correction or replacement.

When supplies are returned to the Contractor, the Contractor shall bear
the transportation cost from the original point of delivery to the
Contractor\'s plant and return to the original point when that point is
not the Contractor\'s plant. If the Contractor fails to perform or act
as required in (1) or (2) above and does not cure such failure within a
period of 10 days (or such longer period as the Contracting Officer may
authorize in writing) after receipt of notice from the Contracting
Officer specifying such failure, the Government shall have the right by
contract or otherwise to replace or correct such supplies and charge to
the Contractor the cost occasioned by the Government thereby, to
equitably reduce any target price or, if established, the total final
price, or to equitably reduce the initial contract price, or, if
established, the redetermined price of the contract.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for fixed price supplies.

**3.10.4-2/alt1** **Inspection of Supplies\--Fixed-Price. Alternate I**
(November 1997)

If the contract type is fixed price incentive, the following (g) and (h)
should be substituted for (g) and (h) of the basic clause:

\(g\) The Contractor shall remove supplies rejected or required to be
corrected. However, the Contracting Officer may require or permit
correction in place, promptly after notice, by and at the expense of the
Contractor. The Contractor shall not tender for acceptance corrected or
rejected supplies without disclosing the former rejection or requirement
for correction, and, when required, shall disclose the corrective action
taken.

Cost of removal, replacement, or correction shall be considered a cost
incurred, or to be incurred, in the total final negotiated cost fixed
under the incentive price revision clause. However, replacements or
corrections by the Contractor after the establishment of the total final
price shall be at no increase in the total final price.

\(h\) If the Contractor fails to promptly remove, replace, or correct
rejected supplies that are required to be removed or to be replaced or
corrected, the Government may either:

\(1\) by contract or otherwise, remove, replace, or correct the supplies
and equitably reduce the target price or, if established, the total
final price or

\(2\) may terminate the contract for default.

Unless the Contractor corrects or replaces the nonconforming supplies
within the delivery schedule, the Contracting Officer may require their
delivery and equitably reduce any target price or, if it is established,
the total final contract price. Failure to agree upon an equitable price
reduction shall be a dispute.

PRESCRIPTION:

Should be used in SIR\'s and contracts for fixed price incentive
contracts for supplies.

**3.10.4-2/alt2** **Inspection of Supplies\--Fixed-Price. Alternate II**
(November 1997)

If the contract is a fixed-ceiling price contract with retroactive price
redetermination, the following (g) and (h) will replace the (g) and (h)
of the basic clause:

\(g\) The Contractor shall remove supplies rejected or required to be
corrected. However, the Contracting Officer may require or permit
correction in place, promptly after notice, by and at the expense of the
Contractor. The Contractor shall not tender for acceptance corrected or
rejected supplies without disclosing the former rejection or requirement
for correction, and, when required, shall disclose the corrective action
taken.

Cost of removal, replacement, or correction shall be considered a cost
incurred, or to be incurred, when determining the price under the price
redetermined clause. However, replacements or corrections by the
contractor after the establishment of the redetermined prices shall be
at no increase in the redetermined price.

\(h\) If the Contractor fails to promptly remove, replace, or correct
rejected supplies that are required to be removed or to be replaced or
corrected, the Government may either (1) by contract or otherwise,
remove, replace, or correct the supplies and equitably reduce the
initial contract price or, if established, the redetermined contract
price or (2) may terminate the contract for default. Unless the
Contractor corrects or replaces the nonconforming supplies within the
delivery schedule, the Contracting Officer may require their delivery
and equitably reduce the initial contract price or, if it is
established, the redetermined contract price. Failure to agree upon an
equitable price reduction shall be a dispute.\"

PRESCRIPTION:

Should be used in SIR\'s and contracts for fixed ceiling price with
retroactive price redetermination.

**3.10.4-3** **Inspection of Supplies\--Cost Reimbursement** (April
1996)

\(a\) Definitions

\(1\) \'Contractor\'s managerial personnel,\' as used in this clause,
means any of the Contractor\'s directors, officers, managers,
superintendents, or equivalent representatives who have supervision or
direction of\--

\(i\) All or substantially all of the Contractor\'s business;

\(ii\) All or substantially all of the Contractor\'s operation at a
plant or separate location at which the contract is being performed; or

\(iii\) A separate and complete major industrial operation connected
with performing this contract.

\(2\) \'Supplies,\' as used in this clause, includes but is not limited
to raw materials, components, intermediate assemblies, end products,
lots of supplies, and, when the contract does not include the \"Warranty
of Data\" clause.

\(b\) The Contractor shall provide and maintain an inspection system
acceptable to the Government covering the supplies, fabricating methods,
and special tooling under this contract. Complete records of all
inspection work performed by the Contractor shall be maintained and made
available to the Government during contract performance and for as long
afterwards as the contract requires.

\(c\) The Government has the right to inspect and test the contract
supplies, to the extent practicable at all places and times, including
the period of manufacture, and in any event before acceptance. The
Government may also inspect the plant or plants of the Contractor or any
subcontractor engaged in the contract performance. The Government shall
perform inspections and tests in a manner that will not unduly delay the
work.

\(d\) If the Government performs inspection or test on the premises of
the Contractor or a subcontractor, the Contractor shall furnish and
shall require subcontractors to furnish all reasonable facilities and
assistance for the safe and convenient performance of these duties.

\(e\) Unless otherwise specified in the contract, the Government shall
accept supplies as promptly as practicable after delivery, and supplies
shall be deemed accepted 60 days after delivery, unless accepted
earlier.

\(f\) At any time during contract performance, but no later than 6
months (or such other time as may be specified in the contract) after
acceptance of the supplies to be delivered under the contract, the
Government may require the Contractor to replace or correct any supplies
that are nonconforming at time of delivery. Supplies are nonconforming
when they are defective in material or workmanship or are otherwise not
in conformity with contract requirements. Except as otherwise provided
in paragraph (h) below, the cost of replacement or correction shall be
included in allowable cost, determined as provided in the \"Allowable
Cost and Payment\" clause, but no additional fee shall be paid. The
Contractor shall not tender for acceptance supplies required to be
replaced or corrected without disclosing the former requirement for
replacement or correction, and, when required, shall disclose the
corrective action taken.

\(g\) (1) If the Contractor fails to proceed with reasonable promptness
to perform required replacement or correction, the Government may\--

\(i\) By contract or otherwise, perform the replacement or correction
and charge to the Contractor any increased cost or make an equitable
reduction in any fixed fee paid or payable under the contract;

\(ii\) Require delivery of undelivered supplies at an equitable
reduction in any fixed fee paid or payable under the contract; or

\(iii\) Terminate the contract for default.

\(2\) Failure to agree on the amount of increased cost to be charged to
the Contractor or to the reduction in the fixed fee shall be a dispute.

\(h\) Notwithstanding paragraphs (f) and (g) above, the Government may
at any time require the Contractor to correct or replace, without cost
to the Government, nonconforming supplies, if the nonconformances are
due to:

\(1\) fraud, lack of good faith, or willful misconduct on the part of
the Contractor\'s managerial personnel or

\(2\) the conduct of one or more of the Contractor\'s employees selected
or retained by the Contractor after any of the Contractor\'s managerial
personnel has reasonable grounds to believe that the employee is
habitually careless or unqualified.

\(i\) This clause applies in the same manner to corrected or replacement
supplies as to supplies originally delivered.

\(j\) The Contractor shall have no obligation or liability under this
contract to replace supplies that were nonconforming at the time of
delivery, except as provided in this clause or as may be otherwise
provided in the contract.

\(k\) Except as otherwise specified in the contract, the Contractor\'s
obligation to correct or replace Government-furnished property shall be
governed by the clause pertaining to Government property.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for supplies, or services that
involve the furnishing of supplies, when a cost-reimbursement contract
is contemplated.

**3.10.4-4** **Inspection of Services\--Both Fixed-Price & Cost
Reimbursement** (April 1996)

\(a\) \'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 the Government covering the services under this contract.
Complete records of all inspection work performed by the Contractor
shall be maintained and made available to the Government during contract
performance and for as long afterwards as the contract requires.

\(c\) The Government 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. The Government shall perform
inspections and tests in a manner that will not unduly delay the work.

\(d\) If the Government performs inspections or tests on the premises of
the Contractor or a subcontractor, the Contractor shall furnish, and
shall require subcontractors to furnish, without additional charge if a
fixed-price contract, all reasonable facilities and assistance for the
safe and convenient performance of these duties.

\(e\) If any of the services do not conform with contract requirements,
the Government may require the Contractor to perform the services again
in conformity with contract requirements, at no increase in contract
amount, or if a cost reimbursement type contract, for no additional fee.
When the defects in services cannot be corrected by reperformance, the
Government may:

\(1\) require the Contractor to take necessary action to ensure that
future performance conforms to contract requirements and

\(2\) reduce the contract price, or any fee payable under the contract,
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, the Government 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 if a cost reimbursement
contract, reduce any fee payable by an amount that is equitable under
the circumstances), or

\(2\) terminate the contract for default.

(End of clause)

PRESCRIPTION:

Should be used clause in SIR and contracts for services, or supplies
that involve the furnishing of services, when a fixed-price or
cost-reimbursement contract is contemplated.

**3.10.4-5** **Inspection\--Time-and-Material and Labor-Hour** (April
1996)

\(a\) Definitions.

\(1\) \'Contractor\'s managerial personnel,\' as used in this clause,
means any of the Contractor\'s directors, officers, managers,
superintendents, or equivalent representatives who have supervision or
direction of\--

\(i\) All or substantially all of the Contractor\'s business;

\(ii\) All or substantially all of the Contractor\'s operation at any
one plant or separate location at which the contract is being performed;
or

\(iii\) A separate and complete major industrial operation connected
with the performance of this contract.

\(2\) \'Materials,\' as used in this clause, includes data when the
contract does not include the \"Warranty of Data\" clause.

\(b\) The Contractor shall provide and maintain an inspection system
acceptable to the Government covering the material, fabricating methods,
work, and services under this contract. Complete records of all
inspection work performed by the Contractor shall be maintained and made
available to the Government during contract performance and for as long
afterwards as the contract requires.

\(c\) The Government has the right to inspect and test all materials
furnished and services performed under this contract, to the extent
practicable at all places and times, including the period of
performance, and in any event before acceptance. The Government may also
inspect the plant or plants of the Contractor or any subcontractor
engaged in contract performance. The Government shall perform
inspections and tests in a manner that will not unduly delay the work.

\(d\) If the Government performs inspection or test on the premises of
the Contractor or a subcontractor, the Contractor shall furnish and
shall require subcontractors to furnish all reasonable facilities and
assistance for the safe and convenient performance of these duties.

\(e\) Unless otherwise specified in the contract, the Government shall
accept or reject services and materials at the place of delivery as
promptly as practicable after delivery, and they shall be presumed
accepted 60 days after the date of delivery, unless accepted earlier.

\(f\) At any time during contract performance, but not later than 6
months (or such other time as may be specified in the contract) after
acceptance of the services or materials last delivered under this
contract, the Government may require the Contractor to replace or
correct services or materials that at time of delivery failed to meet
contract requirements. Except as otherwise specified in paragraph (h)
below, the cost of replacement or correction shall be determined under
the \"Payments Under Time-and-Materials and Labor-Hour Contracts\"
clause, but the \'hourly rate\' for labor hours incurred in the
replacement or correction shall be reduced to exclude that portion of
the rate attributable to profit. The Contractor shall not tender for
acceptance materials and services required to be replaced or corrected
without disclosing the former requirement for replacement or correction,
and, when required, shall disclose the corrective action taken.

\(g\) (1) If the Contractor fails to proceed with reasonable promptness
to perform required replacement or correction, and if the replacement or
correction can be performed within the ceiling price (or the ceiling
price as increased by the Government), the Government may\--

\(i\) By contract or otherwise, perform the replacement or correction,
charge to the Contractor any increased cost, or deduct such increased
cost from any amounts paid or due under this contract; or

\(ii\) Terminate this contract for default.

\(2\) Failure to agree to the amount of increased cost to be charged to
the Contractor shall be a dispute.

\(h\) Notwithstanding paragraphs (f) and (g) above, the Government may
at any time require the Contractor to remedy by correction or
replacement, without cost to the Government, any failure by the
Contractor to comply with the requirements of this contract, if the
failure is due to:

\(1\) fraud, lack of good faith, or willful misconduct on the part of
the Contractor\'s managerial personnel or

\(2\) the conduct of one or more of the Contractor\'s employees selected
or retained by the Contractor after any of the Contractor\'s managerial
personnel has reasonable grounds to believe that the employee is
habitually careless or unqualified.

\(i\) This clause applies in the same manner and to the same extent to
corrected or replacement materials or services as to materials and
services originally delivered under this contract.

\(j\) The Contractor has no obligation or liability under this contract
to correct or replace materials and services that at time of delivery do
not meet contract requirements, except as provided in this clause or as
may be otherwise specified in the contract.

\(k\) Unless otherwise specified in the contract, the Contractor\'s
obligation to correct or replace Government-furnished property shall be
governed by the clause pertaining to Government property.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts involving time and material and
labor hours.

**3.10.4-6** **Inspection of Research and Development\--Fixed-Price**
(April 1996)

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

\(b\) The Government has the right to inspect and test all work called
for by the contract, to the extent practicable at all places and times,
including the period of performance, and in any event before acceptance.
The Government may also inspect the premises of the Contractor or any
subcontractor engaged in contract performance. The Government shall
perform inspections and tests in a manner that will not unduly delay the
work.

\(c\) If the Government performs any inspection or test on the premises
of the Contractor or a subcontractor, the Contractor shall furnish and
shall require subcontractors to furnish, without additional charge, all
reasonable facilities and assistance for the safe and convenient
performance of these duties. Except as otherwise provided in the
contract, the Government shall bear the expense of Government
inspections or tests made at other than the Contractor\'s or
subcontractor\'s premises.

\(d\) The Government shall accept or reject the work as promptly as
practicable after delivery, unless otherwise specified in the contract.
Government failure to inspect and accept or reject the work shall not
relieve the Contractor from responsibility, nor impose liability on the
Government, for nonconforming work. Work is nonconforming when it is
defective in material or workmanship or is otherwise not in conformity
with contract requirements.

\(e\) The Government has the right to reject nonconforming work. If the
Contractor fails or is unable to correct or to replace nonconforming
work within the delivery schedule (or such later time as the Contracting
Officer may authorize), the Contracting Officer may accept the work and
make an equitable price reduction. Failure to agree on a price reduction
shall be a dispute.

\(f\) Inspection and test by the Government does not relieve the
Contractor from responsibility for defects or other failures to meet the
contract requirements that may be discovered before acceptance.
Acceptance shall be conclusive, except for latent defects, fraud, gross
mistakes amounting to fraud, or as otherwise specified in the contract.
If acceptance is not conclusive for any of these causes, the Government,
in addition to any other rights and remedies provided by law, or under
other provisions of this contract shall have the right to require the
Contractor:

\(1\) at no increase in contract price, to correct or replace the
defective or nonconforming supplies (work) at the original point of
delivery or at the Contractor\'s plant at the Contracting Officer\'s
election, and in accordance with a reasonable delivery schedule as may
be agreed upon between the Contractor and the Contracting Officer;
provided, the Contracting Officer may require a reduction in contract
price if the Contractor fails to meet such delivery schedule; or

\(2\) within a reasonable time after the Contractor\'s receipt of notice
of defects or nonconformance, to repayment of such portion of the
contract price as is equitable under the circumstances if the Government
elects not to require correction or replacement.

When supplies (work) are (is) returned to the Contractor, the Contractor
shall bear transportation costs from the original point of delivery to
the Contractor\'s plant and return to the original point of delivery
when that point is not the Contractor\'s plant.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for fixed-price R&D where the
primary objective of the contract is end items other than designs,
drawings, or reports.

**3.10.4-7** **Inspection of Research and
Development\--Cost-Reimbursement** (November 1997)

\(a\) Definitions.

\(1\) \'Contractor\'s managerial personnel,\' as used in this clause,
means the Contractor\'s directors, officers, managers, superintendents,
or equivalent representatives who have supervision or direction of\--

\(i\) All or substantially all of the Contractor\'s business;

\(ii\) All or substantially all of the Contractor\'s operation at any
one plant or separate location at which the contract is being performed;
or

\(iii\) A separate and complete major industrial operation connected
with performing this contract.

\(2\) \'Work,\' as used in this clause, includes data when the contract
does not include the \"Warranty of Data\" clause.

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

\(c\) The Government has the right to inspect and test all work called
for by the contract, to the extent practicable at all places and times,
including the period of performance, and in any event before acceptance.
The Government may also inspect the plant or plants of the Contractor or
its subcontractors engaged in the contract performance. The Government
shall perform inspections and tests in a manner that will not unduly
delay the work.

\(d\) If the Government performs any inspection or test on the premises
of the Contractor or a subcontractor, the Contractor shall furnish and
shall require subcontractors to furnish all reasonable facilities and
assistance for the safe and convenient performance of these duties.

\(e\) Unless otherwise provided in the contract, the Government shall
accept work as promptly as practicable after delivery, and work shall be
deemed accepted 90 days after delivery, unless accepted earlier.

\(f\) At any time during contract performance, but no later than 6
months (or such other time as may be specified in the contract) after
acceptance of all of the end items (other than designs, drawings, or
reports) to be delivered under the contract, the Government may require
the Contractor to replace or correct work not meeting contract
requirements. Time devoted to the replacement or correction of such work
shall not be included in the computation of the above time period.
Except as otherwise provided in paragraph (h) below, the cost of
replacement or correction shall be determined as specified in the
\"Allowable Cost and Payment\" clause, but no additional fee shall be
paid. The Contractor shall not tender for acceptance work required to be
replaced or corrected without disclosing the former requirement for
replacement or correction, and, when required, shall disclose the
corrective action taken.

\(g\) (1) If the Contractor fails to proceed with reasonable promptness
to perform required replacement or correction, the Government may\--

\(i\) By contract or otherwise, perform the replacement or correction,
charge to the Contractor any increased cost, or make an equitable
reduction in any fixed fee paid or payable under the contract;

\(ii\) Require delivery of any undelivered articles and shall have the
right to make an equitable reduction in any fixed fee paid or payable
under the contract; or

\(iii\) Terminate the contract for default.

\(2\) Failure to agree on the amount of increased cost to be charged the
Contractor or to the reduction in fixed fee shall be a dispute.

\(h\) Notwithstanding paragraphs (f) and (g) above, the Government may
at any time require the Contractor to remedy by correction or
replacement, without cost to the Government, any failure by the
Contractor to comply with the requirements of this contract, if the
failure is due to:

\(1\) fraud, lack of good faith, or willful misconduct on the part of
the Contractor\'s managerial personnel or

\(2\) the conduct of one or more of the Contractor\'s employees selected
or retained by the Contractor after any of the Contractor\'s managerial
personnel has reasonable grounds to believe that the employee is
habitually careless or unqualified.

\(i\) This clause shall apply in the same manner to a corrected or
replacement end item or components as to work originally delivered.

\(j\) The Contractor has no obligation or liability under the contract
to correct or replace articles not meeting contract requirements at time
of delivery, except as provided in this clause or as may otherwise be
specified in the contract.

\(k\) Unless otherwise provided in the contract, the Contractor\'s
obligations to correct or replace Government-furnished property shall be
governed by the clause pertaining to Government property.

\(l\) If the contract is on a no-fee basis, substitute the following
paragraphs \"(f)\" and \"(g)\" for paragraphs (f) and (g) above.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for R&D when: (a) the primary
objective is the delivery of end items other than designs, drawings, or
reports; and (b) a cost-reimbursement contract is contemplated
(including contracts on a no-fee basis); unless use of the clause is
impractical and the clause 3.10.4-8 is considered to be more
appropriate.

**3.10.4-7/alt1** **Inspection of Research and
Development\--Cost-Reimbursement. Alternate I** (November 1997)

If the contract is on a no-fee basis, substitute the following
paragraphs \"(f)\" and \"(g)\" for paragraphs (f) and (g) above.

\(f\) At any time during contract performance, but not later than 6
months (or such other time as may be specified in the contract) after
acceptance of all of the end items (other than designs, drawings, or
reports) to be delivered under the contract, the Government may require
the Contractor to correct or replace work not meeting contract
requirements. Time devoted to the correction or replacement of such work
shall not be included in the computation of the above time period.
Except as otherwise provided in paragraph (g) below, the allowability of
the cost of any such replacement or correction shall be determined as
specified in the \"Allowable Cost and Payment\" clause. The Contractor
shall not tender for acceptance corrected work without disclosing the
former requirement for correction, and, when required, shall disclose
the corrective action taken.

\(g\) If the Contractor fails to proceed with reasonable promptness to
perform required replacement or correction, the Government may;

\(1\) by contract or otherwise, perform the replacement or correction
and charge to the Contractor any increased cost,

\(2\) require delivery of any undelivered articles, or

\(3\) terminate the contract for default.

Failure to agree on the amount of increased cost to be charged to the
Contractor shall be a dispute.

PRESCRIPTION:

Should be used in SIR\'s and contracts for R&D when: (a) the primary
objective is the delivery of end items other than designs, drawings, or
reports; and (b) a no-fee cost reimbursement contract is contemplated;
unless use of the clause is impractical and the clause 3.10.4-8 is
considered to be more appropriate.

**3.10.4-8** **Inspection of Research and Development (Short Form)**
(April 1996)

The Government has the right to inspect and evaluate the work performed
or being performed under the contract, and the premises where the work
is being performed, at all reasonable times and in a manner that will
not unduly delay the work. If the Government performs inspection or
evaluation on the premises of the Contractor or a subcontractor, the
Contractor shall furnish and shall require subcontractors to furnish all
reasonable facilities and assistance for the safe and convenient
performance of these duties.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts in lieu of clauses 3.10.4-6 or
3.10.4-7, when those clauses may not be appropriate.

**3.10.4-9** **Inspection of Facilities** (April 1996)

\(a\) Definition. \'Contractor\'s managerial personnel,\' as used in
this clause, is defined in the \"Liability for the Facilities\" clause
of this contract.

\(b\) The Contractor shall provide and maintain an inspection system
acceptable to the Government covering the facilities and work called for
by this contract. Complete records of all inspection work performed by
the Contractor shall be maintained and made available to the Government
during contract performance and for as long afterwards as the contract
requires.

\(c\) The Government has the right to inspect and test the facilities
and work called for by the contract, to the extent practicable at all
places and times, including the period of manufacture. The Government
may also inspect the facilities and work at the plant or plants of the
Contractor or its subcontractors engaged in the performance of the
contract. The Government shall perform inspections and tests in a manner
that will not unduly delay the work to be performed by the Contractor
under this contract or any related contract.

\(d\) If the Government performs inspection or test on the premises of
the Contractor or a subcontractor, the Contractor shall furnish and
shall require subcontractors to furnish all reasonable facilities and
assistance for the safe and convenient performance of these duties.

\(e\) The Contracting Officer may, at any time, require the Contractor
to correct or replace facilities or work that is defective or does not
conform to contract requirements. Except as provided in paragraph (f)
below, corrections and replacements shall be at Government expense if,
under the terms of this contract, the facilities or work corrected or
replaced were initially furnished, or required to be performed at
Government expense.

\(f\) The Contracting Officer may, at any time, require the Contractor
to correct or replace facilities or work that is defective or does not
conform to contract requirements, without cost to the Government under
this contract or any related contract or subcontract, if the defects or
failures are due to fraud, lack of good faith, or willful misconduct on
the part of the Contractor\'s managerial personnel; or to the conduct of
one or more of the Contractor\'s employees selected or retained by the
Contractor after any of the Contractor\'s managerial personnel has
reasonable grounds to believe that the employee is habitually careless
or unqualified.

\(g\) Corrected or replacement facilities or work shall be subject to
this clause in the same manner as facilities or work originally
completed under the contract.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a facilities contract is
contemplated.

**3.10.4-10** **Inspection of Construction** (July 2001)

\(a\) \'Work\' includes, but is not limited to, materials, workmanship,
and manufacture and fabrication of components.

\(b\) The Contractor shall maintain an adequate inspection system and
perform such inspections as will ensure that the work performed under
the contract conforms to contract requirements. The Contractor shall
maintain complete inspection records and make them available to the
Government. All work shall be conducted under the general direction of
the Contracting Officer and is subject to Government inspection and test
at all places and at all reasonable times before acceptance to ensure
strict compliance with the terms of the contract.

\(c\) Government inspections and tests are for the sole benefit of the
Government and do not\--

\(1\) Relieve the Contractor of responsibility for providing adequate
quality control measures;

\(2\) Relieve the Contractor of responsibility for damage to or loss of
the material before acceptance;

\(3\) Constitute or imply acceptance; or

\(4\) Affect the continuing rights of the Government after acceptance of
the completed work under paragraph (i) below.

\(d\) The presence or absence of a Government inspector does not relieve
the Contractor from any contract requirement, nor is the inspector
authorized to change any term or condition of the specification without
the Contracting Officer\'s written authorization.

\(e\) The Contractor shall promptly furnish, without additional charge,
all facilities, labor, and material reasonably needed for performing
such safe and convenient inspections and tests as may be required by the
Contracting Officer. The Government may charge to the Contractor any
additional cost of inspection or test when work is not ready at the time
specified by the Contractor for inspection or test, or when prior
rejection makes reinspection or retest necessary. The Government shall
perform all inspections and tests in a manner that will not
unnecessarily delay the work. Special, full size, and performance tests
shall be performed as described in the contract.

\(f\) The Contractor shall, without charge, replace or correct work
found by the Government not to conform to contract requirements, unless
the Government determines that it is in the public interest to accept
the work with an appropriate adjustment in contract price. The
Contractor shall promptly segregate and remove rejected material from
the premises.

\(g\) If the Contractor does not promptly replace or correct rejected
work, the Government may:

\(1\) by contract or otherwise, replace or correct the work and charge
the cost to the Contractor or

\(2\) terminate for default the Contractor\'s right to proceed.

\(h\) If, before acceptance of the entire work, the Government decides
to examine already completed work by removing it or tearing it out, the
Contractor, on request, shall promptly furnish all necessary facilities,
labor, and material. If the work is found to be defective or
nonconforming in any material respect due to the fault of the Contractor
or its subcontractors, the Contractor shall defray the expenses of the
examination and of satisfactory reconstruction. However, if the work is
found to meet contract requirements, the Contracting Officer shall make
an equitable adjustment for the additional services involved in the
examination and reconstruction, including, if completion of the work was
thereby delayed, an extension of time.

\(i\) Unless otherwise specified in the contract, the Government shall
accept, as promptly as practicable after completion and inspection, all
work required by the contract or that portion of the work the
Contracting Officer determines can be accepted separately. Acceptance
shall be final and conclusive except for latent defects, fraud, gross
mistakes amounting to fraud, or the Government\'s rights under any
warranty or guarantee.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for fixed-price construction SIR
and contracts.

**3.10.4-11** **Inspection\--Dismantling, Demolition, or Removal of
Improvements** (April 1996)

\(a\) Unless otherwise designated by the specifications, all workmanship
performed under the contract is subject to Government inspection at all
times and places where dismantling or demolition work is being
performed. The Contractor shall furnish promptly and without additional
charge all reasonable facilities, labor, and materials necessary for
safe and convenient inspection by the Government. The Government shall
perform inspections in a manner that will not unduly delay the work.

\(b\) The Contractor is responsible for damage to property caused by
defective workmanship. The Contractor shall promptly segregate and
remove from the premises any unsatisfactory facilities, materials, and
equipment used in contract performance, and promptly replace them with
satisfactory items. If the Contractor fails to proceed at once in a
workmanlike manner with performance of the work or with the correction
of defective workmanship, the Government may:

\(1\) by contract or otherwise, replace the facilities, materials, and
equipment or correct the workmanship and charge the cost to the
Contractor and

\(2\) terminate for default the Contractor\'s right to proceed.

The Contractor and any surety shall be liable, to the extent specified
in the contract for any damage or cost of repair or replacement.

(End of clause)

PRESCRIPTION:

Should be used in SIR and contracts for dismantling, demolition, or
removal of improvements.

**3.10.4-12** **Inspection of Transportation** (April 1996)

The Government has the right to inspect and test the Contractor\'s
services, facilities, and equipment at all reasonable times. The
Contractor shall furnish Government representatives with the free access
and reasonable facilities and assistance required to accomplish their
inspections and tests.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for freight transportation
services (including local drayage) by rail, motor (including bus),
domestic freight forwarder, and domestic water carriers (including
inland, coastwise, and intercoastal). The clause should not be used for
transportation services by domestic or international air carriers or by
international ocean carriers, or to freight services provided under
bills of lading or to those negotiated for reduced rates under 49 U.S.C.
1072(b)(1).

**3.10.4-13** **Higher-Level Contract Quality Requirement** (April 2004)

\(a\) The Contractor shall comply with the standard titled
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[Contracting Officer insert the
title and number of the standard\], which is hereby incorporated into
this contract.

\(b\) The Contractor shall establish and maintain a Quality System in
accordance with the above referenced standard(s) and the contractor\'s
Quality System Plan (QSP). This QSP is hereby incorporated into this
contract when approved by the Contracting Officer. If the QSP is
submitted as part of a response to a Screening Information Request (SIR)
submission and approved before award, then the QSP is hereby
incorporated into this contract at time of award. The QSP shall describe
the Contractor\'s provisions for quality assurance, inspection and test
of all supplies to be provided under this contract, in accordance with
the terms of this contract, including but not limited to the contract
specifications and the above referenced standard. (Note; Formal
third-party ISO9000 registration is not required. Formal third-party
ISO9000 registration does not relieve the contractor from the
requirements of submitting a QSP.)

\(c\) In the event of conflict between the Quality System Plan (QSP) and
the above referenced standard(s), the applicable standards shall
control.

\(d\) Calibration systems and measuring and test equipment shall be
controlled in accordance with a nationally recognized standard, such as:
ISO 10012 or ANSI/NCSL Z250-1.

\(e\) Government Furnished Property shall be controlled to assure
acceptability upon receipt, preclude degradation, damage or misuse
during storage, use or test, and assure proper final disposition in
accordance with the contract.

\(f\) Site installation activities, maintenance, and support services
shall be controlled in accordance with contract requirements.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when the inclusion of a higher-level
contract quality requirement is appropriate. The clause may be modified
to suit unique circumstances. The specific standard(s) to be used should
be coordinated with the Quality Assurance Division (ASU-200). The
Contracting Officer should insert appropriate information in the clause.

**3.10.4-14** **Assignment of a Quality Reliability Officer (QRO)**
(April 1996)

The following provisions are a part of this contract.

\(a\) The Government\'s Quality and Reliability Officer (QRO) assigned
to this contract, and designated as such by the Government, has the
authority to verify that the contractor\'s quality system complies with
contract requirements, including the contractor\'s Quality System Plan
(QSP) (if applicable), to witness tests, and to inspect and accept or
reject supplies provided under this contract.

\(b\) Prior to shipment thereof, the Contractor shall submit to the QRO,
for inspection and preliminary acceptance, all supplies which are
subject to final Government inspection and acceptance at destination.
Preliminary acceptance by the QRO constitutes verification by the
Government that supplies comply with all contract requirements which are
to be completed prior to shipment, including satisfactory completion of
factory tests. Any supplies determined by the QRO to be nonconforming
shall be corrected prior to shipment. All other supplies, except those
specified to be accepted by the Contracting Officer, shall be submitted
to the QRO for final inspection and acceptance prior to shipment. For
all supplies subject to preliminary acceptance, final acceptance and
passage of title to the Government shall occur at destination.

\(c\) Failure of the Contractor to maintain and operate a Quality System
in accordance with the terms of the contract may, based upon a written
determination of the QRO (and consistent with the quality system
requirements of the contract), be grounds for rejection of affected
supplies.

\(d\) The Contractor shall provide appropriate office space for the QRO
and

his/her staff for the performance of Government evaluations and
administrative functions. The office area shall be secure to accommodate
meetings of a sensitive nature. File cabinets and suitable desks, both
with locking capabilities, typewriters and chairs, all in good repair,
and other miscellaneous office equipment, as required, shall be supplied
by the Contractor. The Contractor shall provide secretarial help, as
required by the QRO, for typing documents related to the contract. A
telephone shall be provided to each desk, with no less than one line per
two QRO staff members. The cost of long distance calls placed by the QRO
staff will be borne by the Government. The contractor shall provide
parking space to the extent available. In the event a change in location
of the QRO staff is required, Contractor/QRO coordination will take
place in order to facilitate Government planning and implementation of a
smooth transition.

\(e\) Notification of Readiness for Inspection. Unless otherwise
specified in the

contract, the contractor shall notify the designated resident QRO in
writing within 2 workdays (7 workdays if there is not a resident FAA
QRO) of the time:

\(1\) when contractor inspection or tests will be performed in
accordance with the conditions of the contract and

\(2\) when the supplies or services performed will be ready for
government inspection.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts where it is contemplated that a QRO
will be assigned to the contract for source inspection (to be used with
either \"Standard Inspection\" or \"Higher-Level\" Quality
Requirements). The specific wording in the clause may be modified to
suit any unique circumstances.

**3.10.4-15** **Certificate of Conformance** (April 1996)

\(a\) When authorized in writing by the Contracting Officer, the
Contractor shall ship with a Certificate of Conformance any supplies for
which the contract would otherwise require inspection at source. In no
case shall the Government\'s right to inspect supplies under the
inspection provisions of this contract be prejudiced. Shipments of such
supplies will not be made under this contract until use of the
Certificate of Conformance has been authorized in writing by the
Contracting Officer, or inspection and acceptance have occurred.

\(b\) The Contractor\'s signed certificate shall be attached to or
included on the top copy of the inspection or receiving report
distributed to the payment office or attached to the Contracting Officer
copy when requested by the Contracting Officer. In addition, a copy of
the signed certificate shall also be attached to or entered on copies of
the inspection or receiving report accompanying the shipment.

\(c\) The Government has the right to reject defective supplies or
services within a reasonable time after delivery by written notification
to the Contractor. The Contractor shall in such event promptly replace,
correct, or repair the rejected supplies or services at the
Contractor\'s expense.

\(d\) The certificate shall read as follows:

\'I certify that on \_\_\_\_ \[insert date\], the \_\_\_\_ \[insert
Contractor\'s name\] furnished the supplies or services called for by
Contract No. \_\_\_\_ via \_\_\_\_ \[Carrier\] on .\_\_\_\_ \[identify
the bill of lading or shipping document\] in accordance with all
applicable requirements. I further certify that the supplies or services
are of the quality specified and conform in all respects with the
contract requirements, including specifications, drawings, preservation,
packaging, packing, marking requirements, and physical item
identification (part number), and are in the quantity shown on this or
on the attached acceptance document.\'

Date of Execution:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Signature:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Title:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts for supplies or services when it is
contemplated that a certificate of conformance may be used instead of
source inspection.

**3.10.4-16** **Responsibility for Supplies** (April 1996)

\(a\) Title to supplies furnished under this contract shall pass to the
Government upon formal acceptance, regardless of when or where the
Government takes physical possession, unless the contract specifically
provides for earlier passage of title.

\(b\) Unless the contract specifically provides otherwise, risk of loss
of or damage to supplies shall remain with the Contractor until, and
shall pass to the Government upon\--

\(1\) Delivery of the supplies to a carrier, if transportation is f.o.b.
origin; or

\(2\) Acceptance by the Government or delivery of the supplies to the
Government at the destination specified in the contract, whichever is
later, if transportation is f.o.b. destination.

\(c\) Paragraph (b) above shall not apply to supplies that so fail to
conform to contract requirements as to give a right of rejection. The
risk of loss of or damage to such nonconforming supplies remains with
the Contractor until cure or acceptance. After cure or acceptance,
paragraph (b) above shall apply.

\(d\) Under paragraph (b) above, the Contractor shall not be liable for
loss of or damage to supplies caused by the negligence of officers,
agents, or employees of the Government acting within the scope of their
employment.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts for: (a) supplies, (b) services
involving the furnishing of supplies, or (c) research and development,
when a fixed-price contract is contemplated.

**3.10.4-19** **Government Industry Data Exchange Program (GIDEP)**
(January 2002)

\(a\) The Contractor shall within thirty (30) days after contract award
enroll and participate in the Failure Experience Data Interchange of the
Government-Industry Data Exchange Program (GIDEP). Compliance with this
clause shall not relieve the Contractor from complying with any other
provision of the contract.

\(b\) The Contractor shall access Failure Experience Data to identify
material discrepancies/problems which have adversely impacted or have
the potential to adversely impact spares/repair parts reliability. The
Contractor shall notify the FAA Contracting Officer or the designated
Contracting Officer\'s representative, in writing, within five (5)
working days after identification of findings.

\(c\) The FAA GIDEP coordinator will arrange GIDEP enrollment and
training for the Contractor.

\(d\) GIDEP provides:

\(1\) A means for reporting Suspected Unapproved Parts (SUPS)

\(2\) Source for Diminishing Manufacturing Sources and Material
Shortages (DMSMS) information.

\(3\) Source for Parts Obsolescence Resolutions.

\(4\) Source for Non-Conforming Products.

\(5\) Source for Failure Experience Data.

\(6\) Source for Safe Alerts.

\(7\) Source for Urgent Data Request (UDR) A service and process for
finding information not available in the GIDEP data base.

Applications and additional information may be obtained by contacting:

GIDEP Operations Center

P.O. Box 8000

Corona, CA. 92878-8000

Electronic Mail:

<GIDEP.@GIDEP.Corona.Navy.MIL>

World Wide Web:

[HTTP://www.GIDEP.ORG](http://www.GIDEP.ORG/)

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts: (a) over \$50M, or (b) for
construction contracts for NAS application over \$2M, or (c) for office
equipment and/or supplies for NAS applications over \$1M.

**3.10.4-20** **Software Measures Proposal requirements** (August 1997)

The offeror shall provide historical data regarding software development
from at least three prime contracts or subcontracts awarded to and
completed by the offeror to demonstrate the offeror\'s capability to
perform the software requirements of the contract. (\*\*See note to IPT)
The technical characteristics of the historical programs shall be
similar to the proposed system with respect to domain, size, and
complexity. If the offeror does not have experience within these
criteria, data from other completed programs shall be provided. The data
shall include measures of size, schedule, effort, cost, and productivity
by work breakdown structure element. Any models and methodologies used
shall be documented for each historical program to a sufficient level of
detail to allow replication by the evaluation team.

(End of provision)

\*\*Note to Integrated Product Team (IPT): This sentence should identify
whether this information will have equal weight in the evaluation of the
offeror\'s capability.

PRESCRIPTION:

Shall be used in SIR\'s that require development of software code
exceeding 20K lines. This provision shall be used in full text. The
Contracting Officer should insert appropriate information.

**3.10.4-21** **Requirements for Software Measures** (August 1997)

\(a\) Software Measurements Plan

\(1\) Draft.

\(i\) Content. The Contractor shall provide a draft software
measurements plan for collecting and reporting software measurement
data. The plan shall include the following:

\(A\) a measurement definition;

\(B\) the measurement approach ;

\(C\) how data will be collected;

\(D\) measurement methodologies;

\(E\) how the data will be utilized in the Contractor\'s internal
management of the program;

\(F\) issues to be addressed;

\(G\) the measures to be utilized;

\(H\) an estimation methodology;

\(I\) the method used to measure actual data;

\(J\) the data reporting format and associated mechanism

\(K\) a description of any tools utilized;

\(L\) points of contact and responsibilities;

\(M\) organizational communications and interfaces.

\(ii\) Approval. The Contractor shall submit the plan to the Contracting
Officer for review and approval within \*\* days after date of award.
The Contracting Officer will notify the Contractor of the approval or
rejection of the plan within \*\* days after receipt.

\(iii\) Substitute Measures. In the event that an FAA-specified measure
is unavailable, the Contractor shall request a substitution in its plan.
The request shall identify the substitute software measure with a data
definition, rationale for the change, a description of how this measure
addresses the identified issue, and a description of how this measure
will be used internally. The proposed substitute software measure shall
be readily available from the Contractor\'s software development
process.

\(2\) Modifying the Approved Plan. After the draft software measurements
plan is approved by the Contracting Officer, the Contractor shall not
modify the approved plan without the prior review and approval of the
Contracting Officer. The Contractor shall notify the Contracting Officer
immediately of a proposed change to the software measurement parameters
defined in the approved plan and provide an updated plan in writing to
the Contracting Officer within 30 days of the change. The updated plan
shall document the proposed changes, such as those related to
definitions, estimation methodologies, or actual measurement approaches.
The updated plan requires approval by the Contracting Officer.

\(b\) Monthly Reports. The Contractor shall submit a monthly progress
report on actual data collected during the previous calendar month
related to the software development. The report shall address each data
item at the specified collection level on each software measure
specified in the plan and use the same measurement methodology specified
in the plan. The Contractor shall not report data as actuals, until the
criteria for counting actuals has been successfully met. The Contractor
shall submit this report to the Contracting Officer on a monthly basis,
within 30 days after the data is collected.

\(c\) Contractor Access. The Contracting Officer may require access at
reasonable times to contractor personnel, contract software records and
processes from time to time to gather or validate information related to
the software that is not otherwise provided under the contract. The
access could be for the purpose of interviewing contractor personnel,
conducting audits of the software development processes and practices,
and performing other examinations related to the software development or
software measures. In these instances, the Contractor shall also provide
explanations and rationale for changes, answer questions, and provide
clarifications regarding the measurement process and associated data and
information to the product team members engaged in administering the
contract. The Contractor shall contact the Contracting Officer in the
event of requested access that appears to be inappropriate or
unreasonable.

\*\* To be inserted by the Integrated Product Team (IPT)/Product Team
(PT).

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts that require development of
software code exceeding 20K lines. The Contracting Officer should insert
appropriate information.

**3.10.4-22** **RESERVED** (July 2002)

.

PRESCRIPTION:

.

**3.10.4-23** **Contractor and Subcontractor Compliance with Fastener
Act** (November 1997)

\(a\) Definitions. \"Fastener\" means

\(1\) A screw, nut, bolt, or stud having internal or external threads;
or a load-indicating washer, with a nominal diameter of 5 millimeters or
greater, in the case of such items described in metric terms, or 1/4
inch or greater, in the case of such items described in terms of the
English system of measurement, which contains any quantity of metal and
is held out as meeting a standard or specification which requires
through-hardening, or

\(2\) A screw, nut, bolt, or stud having internal or external threads
which bears a grade identification marking required by a standard or
specification, or

\(3\) A washer to the extent that it is subject to a standard or
specification applicable to a screw, nut, bolt, or stud described in
subparagraph (2).

\(b\) The prime contractor and all subcontractors shall utilize
fasteners that comply with the requirements of National Institute of
Standards and Technology (NIST).

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts that utilize nondevelopmental
items to meet system, subsystem or subassembly requirements. The
Contracting Officer should insert appropriate information.

**3.10.4-25** **Alternate Quality System Plan** (June 1999)

Offerors may submit alternate quality system plan proposals that depart
from the stated quality assurance standard requirements. These alternate
proposals shall be submitted in addition to the proposal that satisfies
the stated quality assurance standard requirements in the SIR. The
offeror, in its submission of the alternate proposal that departs from
the stated requirements, shall clearly identify why the acceptance of
the alternate proposal would be advantageous to the Government. Any
deviations from the terms and conditions of the SIR, as well as the
comparative advantage to the Government, shall be clearly identified and
explicitly defined. The Government is not liable for the alternate
proposal preparation costs or any delay in acting upon any proposal. The
decision of the Contracting Officer as to acceptance of the alternate
proposal is final and not subject to dispute in any forum. The offeror
shall submit as a minimum the following information along with the
alternate proposal:

\(a\) A description of the difference between the primary and the
alternate proposal, and the comparative advantages and disadvantages of
each;

\(b\) Itemized requirements of the SIR which must be changed if the
alternate proposal is adopted, and the proposed revision to the
resulting contract for each change;

\(c\) An estimate of the changes in performance, schedule, and cost, if
any, that will result from adoption of the alternate proposal;

\(d\) A reasonable method for sharing in the proposed savings, if any,
between the Government and the offeror, if the proposed change would
result in the overall lifecycle costs.

(End of provision)

PRESCRIPTION:

Shall be included in SIR\'s for procurements in support of the Aviation
Capital Investment Plan when ANSI/ISO/ASQC standards Q9001, Q9002, Q9003
and ISO 9000-3 are referenced..

**3.10.4-26** **Technical Data Quality Requirement for NAS
Procurements** (December 2003)

\(a\) Requirement. The Contractor shall comply with FAA-STD-060, Data
Standard for the National Airspace System (NAS) incorporated into this
contract by reference.

\(b\) Data Quality System. The Contractor shall establish and maintain a
data quality system in accordance with the contractor\'s FAA approved
Data Quality Plan (DQP). Any DQP, or proposed revisions submitted after
award, will be incorporated into the DQP when approved by the
Contracting Officer. If an approved DQP exists prior to contract award
the FAA may incorporate it into the contract by reference at time of
award or require revisions before it may be incorporated into the
contract.

\(c\) Data Quality Plan (DQP) The DQP may be in Contractor\'s format.
The DQP shall contain the following:

1\. The DQP shall describe the Contractor\'s provisions for data quality
assurance including

a\. Assessment, remediation and monitoring the data quality to insure
compliance with business requirements.

b\. Inspection and test of all technical data to be provided under the
contract, in accordance with the terms of this contract, including but
not limited to the contract specifications.

2\. The DQP shall describe the Contractor\'s provisions for review of
and alignment with DOT/FAA data management requirements, with specific
provision for review of the FAA Data Registry for standardized and
certified technical data elements in accordance with FAA-STD-060.

\(d\) In the event of conflict between the Contractor\'s DQP and the
above referenced Standard(s), the FAA Standard(s) shall control. In the
event of conflict between referenced standards and the contract, the
contract shall control.

(End of clause)

PRESCRIPTION:

May be used in SIRs and contracts when the inclusion of a higher-level
contract quality requirement is appropriate to technical data designed,
developed or applied in NAS software. The specific standard(s) to be
used should be coordinated with the FAA Chief of Information Office
(CIO).

**3.10.5-1** **Product Improvement/Technology Enhancement** (April 1996)

\(a\) At any time during the performance of a contract, a Contractor may
submit, or the FAA may solicit product improvement/technology
enhancement proposals for FAA review. Contractors are encouraged to
discuss product improvement/ technology enhancement ideas with the FAA
prior to preparing and submitting a formal proposal. These proposals
should suggest methods for performing more economically and/or methods
for incorporating emerging technology. Changes may be proposed to save
money, to improve performance or reliability, to save energy or space,
to satisfy increased data processing requirements, to incorporate
technological advances in software, or for other technical or business
reasons that the Contractor believes may be advantageous to the FAA.
Discontinuance of equipment is subject to negotiations and to the FAA\'s
written approval prior to the introduction of a substitute product.

\(b\) The Government is not liable for product improvement/technology
enhancement proposal preparation costs or any delay in acting upon any
proposal. The Contractor has the right to withdraw, in whole or in part,
any proposal not accepted by the FAA within the period specified in the
proposal. The decision of the Contracting Officer as to the acceptance
or rejection of a proposed change is final and not subject to dispute.
Proposals will be valid for a reasonable period of time but not less
than 30 days.

\(c\) The FAA may approve any proposed change either, in whole or in
part, and, if approved, the change will be incorporated into the
contract by mutual agreement. The contract modification will include an
equitable adjustment for the resultant costs or savings, if any, and
modify any other affected provision of the contract, if any. Until the
effective date of the modification, the Contractor shall perform in
accordance with the existing contract.

\(d\) As a minimum, the following information should be submitted by the
Contractor with each proposal. The extent and detail provided should be
proportionate to the complexity and/or value of the proposed change.

\(1\) A description of the difference between the existing contract
requirement and the proposed change, and the comparative advantages and
disadvantages of each;

\(2\) A discussion of the functions of systems, equipment, facilities,
services and supplies for the purpose of achieving the essential
functions at the lowest life cycle cost and consistent with required
performance, reliability, quality, and safety;

\(3\) Itemized requirements of the contract which must be changed if the
proposal is adopted, and the proposed revision to the contract for each
such change;

\(4\) An estimate of the changes in performance and cost, if any, that
will result from adoption of the proposal;

\(5\) An evaluation of the effects the proposed change would have on
collateral costs to the Government, such as FAA-furnished property
costs, costs of related items, and costs of maintenance and operation;

\(6\) A statement of the time by which work must begin on change so as
to obtain the maximum benefits of the changes during the remainder of
the contract;

\(7\) A statement of the effect on the contract completion date or
delivery schedule; and

\(8\) A reasonable method for sharing in the proposed savings, if any,
if the proposed change would result in a reduction in the overall life
cycle costs.

(End of clause)

PRESCRIPTION:

May be used in SIR\'s and contracts when product
improvement/enhancements are contemplated.

**3.10.6-1** **Termination for Convenience of the Government (Fixed
Price)** (October 1996)

\(a\) The Government may terminate performance of work under this
contract in whole or, from time to time, in part if the Contracting
Officer determines that a termination is in the Government\'s interest.
The Contracting Officer 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 the Contracting Officer, 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 to the Government, as directed by the Contracting Officer,
all right, title, and interest of the Contractor under the subcontracts
terminated, in which case the Government 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 the
Contracting Officer, 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 the Contracting Officer, transfer title and deliver
to the Government:

\(i\) the fabricated or unfabricated parts, work in process, completed
work, supplies, and other material produced or acquired for the work
terminated, and

\(ii\) 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 the Government.

\(7\) Complete performance of the work not terminated.

\(8\) Take any action that may be necessary, or that the Contracting
Officer 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.

\(9\) Use its best efforts to sell, as directed or authorized by the
Contracting Officer, any property of the types referred to in
subparagraph (6) above; provided, however, that the Contractor:

\(i\) is not required to extend credit to any purchaser and

\(ii\) may acquire the property under the conditions prescribed by, and
at prices approved by, the Contracting Officer.

The proceeds of any transfer or disposition will be applied to reduce
any payments to be made by the Government under this contract, credited
to the price or cost of the work, or paid in any other manner directed
by the Contracting Officer.

\(c\) The Contractor may submit to the Contracting Officer a list,
certified as to quantity and quality, of termination inventory not
previously disposed of, excluding items authorized for disposition by
the Contracting Officer. The Contractor may request the Government to
remove those items or enter into an agreement for their storage. Within
15 days, the Government will accept title to those items and remove them
or enter into a storage agreement. The Contracting Officer 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.

\(d\) After termination, the Contractor shall submit a final termination
settlement proposal to the Contracting Officer in the form and with the
certification prescribed by the Contracting Officer. 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
Contracting Officer upon written request of the Contractor within this
1-year period. However, if the Contracting Officer 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, the Contracting Officer 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.

\(e\) Subject to paragraph (d) above, the Contractor and the Contracting
Officer may agree upon the whole or any part of the amount 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 (e) or paragraph (f) below, exclusive of costs
shown in subparagraph (f)(3) below, 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 amended, and the Contractor paid the agreed
amount. Paragraph (f) below shall not limit, restrict, or affect the
amount that may be agreed upon to be paid under this paragraph.

\(f\) If the Contractor and the Contracting Officer fail to agree on the
whole amount to be paid because of the termination of work, the
Contracting Officer shall pay the Contractor the amounts determined by
the Contracting Officer as follows, but without duplication of any
amounts agreed on under paragraph (e) above:

\(1\) The contract price for completed supplies or services accepted by
the Government (or sold or acquired under subparagraph (b)(9) above) not
previously paid for, adjusted for any saving of freight and other
charges.

\(2\) The total of\--

\(i\) 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 subparagraph (f)(1) above;

\(ii\) The cost of setting and paying termination settlement proposals
under terminated subcontracts that are properly chargeable to the
terminated portion of the contract if not included in subdivision (i)
above; and

\(iii\) A sum, as profit on subdivision (i) above, determined by the
Contracting Officer 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, the Contracting Officer shall allow no profit
under this subdivision (iii) and shall reduce the settlement to reflect
the indicated rate of loss.

\(3\) The reasonable costs of settlement of the work terminated,
including\--

\(i\) Accounting, legal, clerical, and other expenses reasonably
necessary for the preparation of termination settlement proposals and
supporting data;

\(ii\) The termination and settlement of subcontracts (excluding the
amounts of such settlements); and

\(iii\) Storage, transportation, and other costs incurred, reasonably
necessary for the preservation, protection, or disposition of the
termination inventory.

\(g\) Except for normal spoilage, and except to the extent that the
Government expressly assumed the risk of loss, the Contracting Officer
shall exclude from the amounts payable to the Contractor under paragraph
(f) above, the fair value, as determined by the Contracting Officer, of
property that is destroyed, lost, stolen, or damaged so as to become
undeliverable to the Government or to a buyer.

\(h\) The cost principles and procedures, in effect on the date of this
contract, shall govern all costs claimed, agreed to, or determined under
this clause.

\(i\) The Contractor may file a claim with the Federal Aviation
Administration Office of Dispute Resolution based on any determination
made by the Contracting Officer under paragraph (d), (f), or (k), except
that if the Contractor failed to submit the termination settlement
proposal within the time provided in paragraph (d) or (k), and failed to
request a time extension, there is no right of appeal. If the
Contracting Officer has made a determination of the amount due under
paragraph (d), (f), or (k), the Government shall pay the Contractor:

\(1\) the amount determined by the Contracting Officer if there is no
right to file a claim or if no claim has been filed, or

\(2\) the amount finally determined allowable by the Office of Dispute
Resolution.

\(j\) In arriving at the amount due the Contractor under this clause,
there shall be deducted\--

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

\(2\) Any claim which the Government 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 the
Government.

\(k\) If the termination is partial, the Contractor may file a proposal
with the Contracting Officer for an equitable adjustment of the price(s)
of the continued portion of the contract. The Contracting Officer 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 Contracting Officer.

\(l\) (1) The Government 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 the
Contracting Officer 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 the Government 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 the
Contracting Officer because of the circumstances.

\(m\) 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 Government, at the Contractor\'s
office, at all reasonable times, without any direct charge. If approved
by the Contracting Officer, photographs, microphotographs, or other
authentic reproductions may be maintained instead of original records
and documents.

(End of clause)

PRESCRIPTION:

Shall be included in SIR\'s and contracts which are fixed price. The
clause shall not be modified without the prior approval of legal
counsel.

**3.10.6-2** **Termination for Convenience of the Government
(Educational and Other Nonprofit Institutions)** (October 1996)

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

\(b\) After receipt of a Notice of Termination and except as directed by
the Contracting Officer, the Contractor shall immediately proceed with
the following obligations:

\(1\) Stop work as specified in the notice.

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

\(3\) Terminate all applicable subcontracts and cancel or divert
applicable commitments covering personal services that extend beyond the
effective date of termination.

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

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

\(6\) Transfer title (if not already transferred) and, as directed by
the Contracting Officer, deliver to the Government any information and
items that, if the contract had been completed, would have been required
to be furnished, including (i) materials or equipment produced, in
process, or acquired for the work terminated and (ii) completed or
partially completed plans, drawings, and information.

\(7\) Complete performance of the work not terminated.

\(8\) Take any action that may be necessary, or that the Contracting
Officer may direct, for the protection and preservation of the property
related to this contract and is in the possession of the Contractor and
in which the Government has or may acquire an interest.

\(9\) Use its best efforts to sell, as directed or authorized by the
Contracting Officer, termination inventory other than that retained by
the Government under subparagraph (6) above; provided, however, that the
Contractor:

\(i\) is not required to extend credit to any purchaser and

\(ii\) may acquire the property under the conditions prescribed by, and
at prices approved by, the Contracting Officer.

The proceeds of any transfer or disposition will be applied to reduce
any payments to be made by the Government under this contract, credited
to the price or cost of the work, or paid in any other manner directed
by the Contracting Officer.

\(c\) After termination, the Contractor shall submit a final termination
settlement proposal to the Contracting Officer in the form and with the
certification prescribed by the Contracting Officer. 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
Contracting Officer upon written request of the Contractor within this
1-year period. If the Contractor fails to submit the termination
settlement proposal within the time allowed, the Contracting Officer 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.

\(d\) Subject to paragraph (c) above, the Contractor and the Contracting
Officer may agree upon the whole or any part of the amount to be paid
because of the termination. This amount may include reasonable
cancellation charges incurred by the Contractor and any reasonable loss
on outstanding commitments for personal services that the Contractor is
unable to cancel; provided, that the Contractor exercised reasonable
diligence in diverting such commitments to other operations. The
contract shall be amended and the Contractor paid the agreed amount.

\(e\) The cost principles and procedures, in effect on the date of the
contract, shall govern all costs claimed, agreed to, or determined under
this clause.

\(f\) The Government may, under the terms and conditions it prescribes,
make partial payments against costs incurred by the Contractor for the
terminated portion of this contract, if the Contracting Officer believes
the total of these payments will not exceed the amount to which the
Contractor will be entitled.

\(g\) The Contractor may file a claim with the Federal Aviation
Administration Office of Dispute Resolution, except that if the
Contractor failed to submit the termination settlement proposal within
the time provided in paragraph (c) and failed to request a time
extension, there is no right to file a claim.

(End of clause)

PRESCRIPTION:

Shall be included in SIR\'s and contracts for fixed price or cost
reimbursement research and development with educational or other
nonprofit institutions on a no-fee or nonprofit basis. The clause shall
not be modified without the prior approval of legal counsel.

**3.10.6-3** **Termination (Cost-Reimbursement)** (October 1996)

\(a\) The Government may terminate performance of work under this
contract in whole or, from time to time, in part, if\--

\(1\) The Contracting Officer determines that a termination is in the
Government\'s interest; or

\(2\) The Contractor defaults in performing this contract. \'Default\'
includes failure to make progress in the work so as to endanger
performance.

\(b\) The Contracting Officer shall terminate by delivering to the
Contractor a Notice of Termination specifying whether termination is for
default of the Contractor or for convenience of the Government, the
extent of termination, and the effective date. If, after termination for
default, it is determined that the Contractor was not in default or that
the Contractor\'s failure to perform or to make progress in performance
is due to causes beyond the control and without the fault or negligence
of the Contractor as set forth in the \"Excusable Delays\" clause, the
rights and obligations of the parties will be the same as if the
termination was for the convenience of the Government.

\(c\) After receipt of a Notice of Termination, and except as directed
by the Contracting Officer, 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), 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 to the Government, as directed by the Contracting Officer,
all right, title, and interest of the Contractor under the subcontracts
terminated, in which case the Government 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 the
Contracting Officer, settle all outstanding liabilities and termination
settlement proposals arising from the termination of subcontracts, the
cost of which would be reimbursable in whole or in part, under this
contract; approval or ratification will be final for purposes of this
clause.

\(6\) Transfer title (if not already transferred) and, as directed by
the Contracting Officer, deliver to the Government:

\(i\) the fabricated or unfabricated parts, work in process, completed
work, supplies, and other material produced or acquired for the work
terminated,

\(ii\) 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 the Government, and

\(iii\) the jigs, dies, fixtures, and other special tools and tooling
acquired or manufactured for this contract, the cost of which the
Contractor has been or will be reimbursed under this contract.

\(7\) Complete performance of the work not terminated.

\(8\) Take any action that may be necessary, or that the Contracting
Officer 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.

\(9\) Use its best efforts to sell, as directed or authorized by the
Contracting Officer, any property of the types referred to in
subparagraph (6) above; provided, however, that the Contractor:

\(i\) is not required to extend credit to any purchaser and

\(ii\) may acquire the property under the conditions prescribed by, and
at prices approved by, the Contracting Officer.

The proceeds of any transfer or disposition will be applied to reduce
any payments to be made by the Government under this contract credited
to the price or cost of the work, or paid in any other manner directed
by the Contracting Officer.

\(d\) The Contractor shall submit to the Contracting Officer a list,
certified as to quantity and quality, of termination inventory not
previously disposed of, excluding items authorized for disposition by
the Contracting Officer. The Contractor may request the Government to
remove those items or enter into an agreement for their storage. Within
15 days, the Government will accept the items and remove them or enter
into a storage agreement. The Contracting Officer 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 the Contracting Officer in the form and with the
certification prescribed by the Contracting Officer. 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
Contracting Officer upon written request of the Contractor within this
1-year period. However, if the Contracting Officer 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, the Contracting Officer 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) above, the Contractor and the Contracting
Officer may agree on the whole or any part of the amount to be paid
(including an allowance for fee) because of the termination. The
contract shall be amended, and the Contractor paid the agreed amount.

\(g\) If the Contractor and the Contracting Officer fail to agree in
whole or in part on the amount of costs and/or fee to be paid because of
the termination of work, the Contracting Officer shall determine, on the
basis of information available, the amount, if any, due the Contractor,
and shall pay that amount, which shall include the following:

\(1\) All costs reimbursable under this contract, not previously paid,
for the performance of this contract before the effective date of the
termination, and those costs that may continue for a reasonable time
with the approval of or as directed by the Contracting Officer; however,
the Contractor shall discontinue those costs as rapidly as practicable.

\(2\) 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 subparagraph (1)
above.

\(3\) The reasonable costs of settlement of the work terminated,
including\--

\(i\) Accounting, legal, clerical, and other expenses reasonably
necessary for the preparation of termination settlement proposals and
supporting data;

\(ii\) The termination and settlement of subcontracts (excluding the
amounts of such settlements); and

\(iii\) Storage, transportation, and other costs incurred, reasonably
necessary for the preservation, protection, or disposition of the
termination inventory.

If the termination is for default no amounts for the preparation of the
Contractor\'s termination settlement proposal may be included.

\(4\) A portion of the fee payable under the contract determined as
follows:

\(i\) If the contract is terminated for the convenience of the
Government, the settlement shall include a percentage of the fee equal
to the percentage of completion of work contemplated under the contract,
but excluding subcontract effort included in subcontractors\'
termination proposals, less previous payments for fee.

\(ii\) If the contract is terminated for default, the total fee payable
shall be such proportionate part of the fee as the total number of
articles (or amount of services) delivered to and accepted by the
Government is to the total number of articles (or amount of services) of
a like kind required by the contract.

\(5\) If the settlement includes only fee, it will be determined under
subparagraph (g)(4) above.

\(h\) The cost principles and procedures, in effect on the date of this
contract shall govern all costs claimed, agreed to, or determined under
this clause.

\(i\) The Contractor may file a claim with the Federal Aviation
Administration Office of Dispute Resolution based on any determination
made by the Contracting Officer under paragraph (e) or (g) above or
paragraph (k) below, except that if the Contractor failed to submit the
termination settlement proposal within the time provided in paragraph
(e) and failed to request a time extension, there is basis for a claim.
If the Contracting Officer has made a determination of the amount due
under paragraph (e), (g) or (k), the Government shall pay the
Contractor:

\(1\) the amount determined by the Contracting Officer if there is no
right to file a claim or if no claim has been filed, or

\(2\) the amount finally determined allowable by the Office of Dispute
Resolution.

\(j\) In arriving at the amount due the Contractor under this clause,
there shall be deducted\--

\(1\) All unliquidated advance or other payments to the Contractor,
under the terminated portion of this contract;

\(2\) Any claim which the Government 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 this
clause and not recovered by or credited to the Government.

\(k\) The Contractor and Contracting Officer must agree to any equitable
adjustment in fee for the continued portion of the contract when there
is a partial termination. The Contracting Officer shall amend the
contract to reflect the agreement.

\(l\) (1) The Government 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 the
Contracting Officer 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 the Government 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 the
Contracting Officer because of the circumstances.

\(m\) The provisions of this clause relating to fee are Inapplicable if
this contract does not include a fee.

(End of clause)

PRESCRIPTION:

Shall be included in SIR\'s and contracts which are cost reimbursable,
except contracts for architectural and engineering services or for
research and development with an educational or other nonprofit
organization on a no-fee basis. The clause and its alternates shall not
be modified without the prior approval of legal counsel.

**3.10.6-3/alt1** **Termination (Cost-Reimbursement) Alternate I**
(October 1996)

Construction. If the contract is for construction, the contracting
officer may substitute the following subparagraph (g)(4) for
subparagraph (g)(4) of the basic clause as follows:

\(g\) (4) A portion of the fee payable under the contract determined as
follows:

\(i\) If the contract is terminated for the convenience of the
Government, the settlement shall include a percentage of the fee equal
to the percentage of completion of work contemplated under the contract,
but excluding subcontract effort included in subcontractors\'
termination settlement proposals, less previous payments for fee.

\(ii\) If the contract is terminated for default, the total fee payable
shall be such proportionate part of the fee as the actual work in place
is to the total work in place required by the contract.

PRESCRIPTION:

Shall be included in cost reimbursement contracts for construction.

**3.10.6-3/alt2** **Termination (Cost-Reimbursement) Alternate II**
(January 1998)

Partial Payments. If the contract is with an agency of the U.S.
Government or with State, local, or foreign governments or their
agencies, and if the contracting officer determines that the requirement
to pay interest on excess partial payments is inappropriate, the
contracting officer may use Alternate II which deletes subparagraph
(l)(2) from the basic clause.

PRESCRIPTION:

Shall be included in contracts with agencies of the Federal Government,
or with state, local or foreign governments or their agencies, when the
Contracting Officer determines that the requirement to pay interest on
excess partial payments is inappropriate.

**3.10.6-3/alt3** **Termination (Cost-Reimbursement) Alternate III**
(October 1996)

Partial Payments Construction. If the contract is for construction and
with an agency of the U.S. Government or with State, contracting officer
determines that the requirement to pay interest on excess partial, use
Alternate III which substitutes the following subparagraph (g)(4) for
(g)(4) of the basic clause. Alternate III also allows deletion of
subparagraph (l)(2) from the basic clause if the contracting officer
determines that the requirement to pay interest on excess partial
payments is inappropriate.

(g)(4) A portion of the fee payable under the contract determined as
follows:

\(i\) If the contract is terminated for the convenience of the
Government, the settlement shall include a percentage of the fee equal
to the percentage of completion of work contemplated under the contract,
but excluding subcontract effort included in subcontractors\'
termination settlement proposals, less previous payments for fee.

\(ii\) If the contract is terminated for default, the total fee payable
shall be such proportionate part of the fee as the actual work in place
is to the total work in place required by the contract.

PRESCRIPTION:

Shall be included in contracts for construction with agencies of the
Federal Government, state, local or foreign governments or their
agencies, when the Contracting Officer determines that the requirement
to pay interest on excess partial payments is inappropriate.

**3.10.6-3/alt4** **Termination (Cost-Reimbursement) Alternate IV**
(October 1996)

Time and Material and Labor Hour Contracts. If the contract is a
time-and-material or labor-hour contract, the contracting officer may
use Alternate IV, which substitutes the following paragraphs (g) and (k)
for paragraphs (g) and (k) of the basic clause:

\(g\) If the Contractor and the Contracting Officer fail to agree in
whole or in part on the amount to be paid because of the termination of
work, the Contracting Officer shall determine, on the basis of
information available, the amount, if any, due the Contractor and shall
pay the amount determined as follows:

\(1\) If the termination is for the convenience of the Government,
include\--

\(i\) An amount for direct labor hours (as defined in the Schedule of
the contract) determined by multiplying the number of direct labor hours
expended before the effective date of termination by the hourly rate(s)
in the Schedule, less any hourly rate payments already made to the
Contractor;

\(ii\) An amount (computed under the provisions for payment of
materials) for material expenses incurred before the effective date of
termination, not previously paid to the Contractor;

\(iii\) An amount for labor and material expenses computed as if the
expenses were incurred before the effective date of termination, if they
are reasonably incurred after the effective date, with the approval of
or as directed by the Contracting Officer; however, the Contractor shall
discontinue these expenses as rapidly as practicable;

\(iv\) If not included in (i), (ii), or (iii) above, the cost of
settling and paying termination settlement proposals under terminated
subcontracts that are properly chargeable to the terminated portion of
contract; and

\(v\) 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;

\(B\) termination and settlement of subcontracts (excluding the amounts
of such settlements); and

\(C\) Storage, transportation, and other costs incurred, necessary for
the protection or disposition of the termination inventory.

\(2\) If the termination is for default of the Contractor, include the
amounts computed under (1) above but omit-

\(i\) Any amount for preparation of the Contractor\'s termination
settlement proposal; and

\(ii\) The portion of the hourly rate allocable to profit for any direct
labor hours expended in furnishing materials and services not delivered
to and accepted by the Government.

\(k\) If the termination is partial, the Contractor may file with the
Contracting Officer a proposal for an equitable adjustment of price(s)
for the continued portion of the contract. The Contracting Officer 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 determination,
unless extended in writing by the Contracting Officer.

PRESCRIPTION:

Shall be included in time and material or labor hour contracts.

**3.10.6-3/alt5** **Termination (Cost-Reimbursement) Alternate V**
(October 1996)

Time and Material and Labor Hour Contracts. If the contract is with an
agency of the U.S. Government or with State, local, or foreign
governments or their agencies, and if the contracting officer determines
that the requirement to pay interest on excess partial payments is
inappropriate, the contracting officer may use Alternate V, which
substitutes the following paragraphs (g) and (k) for paragraphs (g) and
(k) of the basic clause. Also, subparagraph (l)(2) may be deleted from
the basic clause if the contracting officer determines that the
requirement to pay interest on excess partial payments is inappropriate.

\(g\) If the Contractor and the Contracting Officer fail to agree in
whole or in part on the amount to be paid because of the termination of
work, the Contracting Officer shall determine, on the basis of
information available, the amount, if any, due the Contractor and shall
pay the amount determined as follows:

\(1\) If the termination is for the convenience of the Government,
include\--

\(i\) An amount for direct labor hours (as defined in the Schedule of
the contract) determined by multiplying the number of direct labor hours
expended before the effective date of termination by the hourly rate(s)
in the Schedule, less any hourly rate payments already made to the
contractor;

\(ii\) An amount (computed under the provisions for payment of
materials) for material expenses incurred before the effective date of
termination, not previously paid to the Contractor;

\(iii\) An amount for labor and material expenses computed as if the
expenses were incurred before the effective date of termination if they
are reasonably incurred after the effective date, with the approval of
or as directed by the Contracting Officer; however, the Contractor shall
discontinue these expenses as rapidly as practicable;

\(iv\) If not included in (i), (ii), or (iii) above, the cost of
settling and paying termination settlement proposals under terminated
subcontracts that are properly chargeable to the terminated portion of
the contract; and

\(v\) 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 protection or disposition of the termination
inventory.

\(2\) If the termination is for default of the Contractor, include the
amounts computed under (1) above but omit\--

\(i\) Any amount for preparation of the Contractor\'s termination
settlement proposal; and

\(ii\) The portion of the hourly rate allocable to profit for any direct
labor hours expended in furnishing materials and services not delivered
to and accepted by the Government.

\(k\) If the termination is partial, the Contractor may file with the
Contracting Officer a proposal for an equitable adjustment of the
price(s) for the continued portion of the contract. The Contracting
Officer 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 Contracting Officer.

PRESCRIPTION:

Shall be included in time and material or labor hour contracts with
agencies of the Federal Government, state, local or foreign governments
or their agencies, when the Contracting Officer determines that the
requirement to pay interest on excess partial payments is inappropriate.

**3.10.6-4** **Default (Fixed-Price Supply and Service)** (October 1996)

\(a\) (1) The Government may, subject to paragraphs (c) and (d) below,
by written notice of default to the Contractor, terminate this contract
in whole or in part if the Contractor fails to\--

\(i\) Deliver the supplies or to perform the services within the time
specified in this contract or any extension;

\(ii\) Make progress, so as to endanger performance of this contract
(but see subparagraph (a)(2) below); or

\(iii\) Perform any of the other provisions of this contract (but see
subparagraph (a)(2) below).

\(2\) Prior to terminating a contract for default, the Government will
issue a show cause notice permitting the Contractor to present any
defenses it may have to the default termination.

\(b\) If the Government terminates this contract in whole or in part, it
may acquire, under the terms and in the manner the Contracting Officer
considers appropriate, supplies or services similar to those terminated,
and the Contractor will be liable to the Government for any excess costs
for those supplies or services. However, the Contractor shall continue
the work not terminated.

\(c\) Except for defaults of subcontractors at any tier, the Contractor
shall not be liable for any excess costs if the failure to perform the
contract arises from causes beyond the control and without the fault or
negligence of the Contractor. Examples of such causes include:

\(1\) acts of God or of the public enemy,

\(2\) acts of the Government in either its sovereign or contractual
capacity,

\(3\) fires,

\(4\) floods,

\(5\) epidemics,

\(6\) quarantine restrictions,

\(7\) strikes,

\(8\) freight embargoes, and

\(9\) unusually severe weather.

In each instance the failure to perform must be beyond the control and
without the fault or negligence of the Contractor.

\(d\) If the failure to perform is caused by the default of a
subcontractor at any tier, and if the cause of the default is beyond the
control of both the Contractor and subcontractor, and without the fault
or negligence of either, the Contractor shall not be liable for any
excess costs for failure to perform, unless the subcontracted supplies
or services were obtainable from other sources in sufficient time for
the Contractor to meet the required delivery schedule.

\(e\) If this contract is terminated for default, the Government may
require the Contractor to transfer title and deliver to the Government,
as directed by the Contracting Officer, any:

\(1\) completed supplies, and

\(2\) partially completed supplies and materials, parts, tools, dies,
jigs, fixtures, plans, drawings, information, and contract rights
(collectively referred to as \'manufacturing materials\' in this clause)
that the Contractor has specifically produced or acquired for the
terminated portion of this contract.

Upon direction of the Contracting Officer, the Contractor shall also
protect and preserve property in its possession in which the Government
has an interest.

\(f\) The Government shall pay contract price for completed supplies
delivered and accepted. The Contractor and Contracting Officer shall
agree on the amount of payment for manufacturing materials delivered and
accepted and for the protection and preservation of the property.
Failure to agree will be a dispute under the \"Contract Disputes\"
clause. The Government may withhold from these amounts any sum the
Contracting Officer determines to be necessary to protect the Government
against loss because of outstanding liens or claims of former lien
holders.

\(g\) If, after termination, it is determined that the Contractor was
not in default, or that the default was excusable, the rights and
obligations of the parties shall be the same as if the termination had
been issued for the convenience of the Government.

\(h\) The rights and remedies of the Government in this clause are in
addition to any other rights and remedies provided by law or under this
contract.

(End of clause)

PRESCRIPTION:

Shall be included in SIR\'s and contracts which are for fixed price
supply or services. The clause should not be modified without the prior
approval of legal counsel.

**3.10.6-5** **Default (Fixed-Price Research and Development)** (October
1996)

\(a\) The Government may, subject to paragraphs (c) and (d) below, by
written Notice of Default to the Contractor, terminate this contract in
whole or in part if the Contractor fails to\--

\(1\) Perform the work under the contract within the time specified in
this contract or any extension;

\(2\) Prosecute the work so as to endanger performance of this contract
(but see subparagraph (a)(2) below); or

\(3\) Perform any of the other provisions of this contract (but see
subparagraph (a)(2) below).

\(b\) Prior to terminating a contract for default, the Government will
issue a show cause notice permitting the Contractor to present any
defenses it may have to the default termination.

\(c\) If the Government terminates this contract in whole or in part, it
may acquire, under the terms and in the manner the Contracting Officer
considers appropriate, work similar to the work terminated, and the
Contractor will be liable to the Government for any excess costs for the
similar work. However, the Contractor shall continue the work not
terminated.

\(d\) Except for defaults of subcontractors at any tier, the Contractor
shall not be liable for any excess costs if the failure to perform the
contract arises from causes beyond the control and without the fault or
negligence of the Contractor. Examples of such causes include

\(1\) acts of God or of the public enemy,

\(2\) acts of the Government in either its sovereign or contractual
capacity,

\(3\) fires,

\(4\) floods,

\(5\) epidemics,

\(6\) quarantine restrictions,

\(7\) strikes,

\(8\) freight embargoes, and

\(9\) unusually severe weather.

In each instance the failure to perform must be beyond the control and
without the fault or negligence of the Contractor.

\(e\) If the failure to perform is caused by the default of a
subcontractor at any tier, and if the cause of the default is beyond the
control of both the Contractor and subcontractor, and without the fault
or negligence of either, the Contractor shall not be liable for any
excess costs for failure to perform, unless the subcontracted supplies
or services were obtainable from other sources in sufficient time for
the Contractor to meet the required delivery schedule or other
performance requirements.

\(f\) If this contract is terminated for default, the Government may
require the Contractor to transfer title and deliver to the Government,
as directed by the Contracting Officer, any

\(1\) completed or partially completed work not previously delivered to,
and accepted by, the Government and

\(2\) other property, including contract rights, specifically produced
or acquired for the terminated portion of this contract.

Upon direction of the Contracting Officer, the Contractor shall also
protect and preserve property in its possession in which the Government
has an interest.

\(g\) The Government shall pay the contract price, if separately stated,
for completed work it has accepted and the amount agreed upon by the
Contractor and the Contracting Officer for:

\(1\) completed work for which no separate price is stated,

\(2\) partially completed work,

\(3\) other property described above that it accepts, and

\(4\) the protection and preservation of the property.

Failure to agree will be a dispute under the Acquisition Management
System, Resolution of Protests and Disputes. The Government may withhold
from these amounts any sum the Contracting Officer determines to be
necessary to protect the Government against loss from outstanding liens
or claims of former lien holders

\(h\) If, after termination, it is determined that the Contractor was
not in default, or that the default was excusable, the rights and
obligations of the parties shall be the same as if the termination had
been issued for the convenience of the Government.

\(i\) The rights and remedies of the Government in this clause are in
addition to any other rights and remedies provided by law or under this
contract.

(End of clause)

PRESCRIPTION:

Shall be included in SIR\'s and contracts for fixed price research and
development except those with educational or nonprofit organizations on
a no-profit basis. The clause shall not be modified without the prior
approval of legal counsel.

**3.10.6-6** **Default (Fixed Price Construction)** (October 1996)

\(a\) If the Contractor refuses or fails to prosecute the work or any
separable part, with the diligence that will insure its completion
within the time specified in this contract including any extension, or
fails to complete the work within this time, the Government may, by
written notice to the Contractor, terminate the right to proceed with
the work (or the separable part of the work) that has been delayed. In
this event, the Government may take over the work and complete it by
contract or otherwise, and may take possession of and use any materials,
appliances, and plant on the work site necessary for completing the
work. The Contractor and its sureties shall be liable for any damage to
the Government resulting from the Contractor\'s refusal or failure to
complete the work within the specified time, whether or not the
Contractor\'s right to proceed with the work is terminated. This
liability includes any increased costs incurred by the Government in
completing the work.

\(b\) The Contractor\'s right to proceed shall not be terminated nor the
Contractor charged with damages under this clause, if\--

\(1\) The delay in completing the work arises from unforeseeable causes
beyond the control and without the fault or negligence of the
Contractor. Examples of such causes include;

\(i\) acts of God or of the public enemy,

\(ii\) acts of the Government in either its sovereign or contractual
capacity, (iii) acts of another Contractor in the performance of a
contract with the Government,

\(iv\) fires,

\(v\) floods,

\(vi\) epidemics,

\(vii\) quarantine restrictions,

\(viii\) strikes,

\(ix\) freight embargoes,

\(x\) unusually severe weather, or

\(xi\) delays of subcontractors or suppliers at any tier arising from
unforeseeable causes beyond the control and without the fault or
negligence of both the Contractor and the subcontractors or suppliers;
and

\(2\) The Contractor, within 10 days from the beginning of any delay
(unless extended by the Contracting Officer), notifies the Contracting
Officer in writing of the causes of delay. The Contracting Officer shall
ascertain the facts and the extent of delay. If, in the judgment of the
Contracting Officer, the findings of fact warrant such action, the time
for completing the work shall be extended. The findings of the
Contracting Officer shall be final and conclusive on the parties, but
subject to the right of the Contractor to file a claim with the Federal
Aviation Administration Office of Dispute Resolution.

\(c\) If, after termination of the Contractor\'s right to proceed it is
determined that the Contractor was not in default, or that the delay was
excusable, the rights and obligations of the parties will be the same as
if the termination had been issued for the convenience the Government.

\(d\) The rights and remedies of the Government in this clause are in
addition to any other rights and remedies provided by law or under this
contract.

(End of clause)

PRESCRIPTION:

Shall be included in SIR\'s and contracts for fixed price construction.
The clause shall not be modified without the prior approval of legal
counsel.

**3.10.6-7** **Excusable Delays** (October 1996)

\(a\) Except for defaults of subcontractors at any tier, the Contractor
shall not be in default because of any failure to perform this contract
under its terms if the failure arises from causes beyond the control and
without the fault or negligence of the Contractor. Examples of these
causes are

\(1\) acts of God or of the public enemy,

\(2\) acts of the Government in either its sovereign or contractual
capacity,

\(3\) fires,

\(4\) floods,

\(5\) epidemics,

\(6\) quarantine restrictions,

\(7\) strikes,

\(8\) freight embargoes, and

\(9\) unusually severe weather.

In each instance, the failure to perform must be beyond the control and
without the fault or negligence of the Contractor. \'Default\' includes
failure to make progress in the work so as to endanger performance.

\(b\) If the failure to perform is caused by the failure of a
subcontractor at any tier to perform or make progress, and if the cause
of the failure was beyond the control of both the Contractor and
subcontractor, and without the fault or negligence of either, the
Contractor shall not be deemed to be in default, unless\--

\(1\) The subcontracted supplies or services were obtainable from other
sources;

\(2\) The Contracting Officer ordered the Contractor in writing to
purchase these supplies or services from the other source; and

\(3\) The Contractor failed to comply reasonably with this order.

\(c\) Upon request of the Contractor, the Contracting Officer shall
ascertain the facts and extent of the failure. If the Contracting
Officer determines that any failure to perform results from one or more
of the causes above, the delivery schedule shall be revised, subject to
the rights of the Government under the termination clause of this
contract.

(End of clause)

PRESCRIPTION:

Shall be included in SIR\'s and contracts which are cost reimbursement,
time and material, or labor hour for supplies, services, construction or
research and development contracts on a fee basis. The clause shall not
be modified without the prior approval of legal counsel.

**3.10.7-1** **Indemnification under Public Law 85-804** (October 1996)

\(a\) A Contractor\'s principal officials, as used in this clause, means
directors, officers, managers, superintendents, or other representatives
supervising or directing

\(1\) All or substantially all of the Contractor\'s business;

\(2\) 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.

\(b\) Under Public Law 85-804 and Executive Order 10789, as amended, and
regardless of any other provisions of this contract, the Government
will, subject to the limitations contained in the other paragraphs of
this clause, indemnify the Contractor against:

\(1\) Claims (including reasonable expenses of litigation or settlement)
by third persons (including employees of the Contractor) for death;
personal injury; or loss of, damage to, or loss of use of property;

\(2\) Loss of, damage to, or loss of use of Contractor property,
excluding loss of profit; and (c) loss of, damage to, or loss of use of
Government property, excluding loss of profit.

\(c\) This indemnification applies only to the extent that the claim,
loss or damage:

\(1\) Arises out of or results from a risk defined in the contract as
unusually hazardous or nuclear and

\(2\) Is not compensated for by insurance or otherwise. Any such claim,
loss, or damage, to the extent that it is within the deductible amounts
of the Contractor\'s insurance, is not covered under this clause. If
insurance coverage or other financial protection in effect on the date
the approving official authorizes use this clause is reduced, the
Government\'s liability under this clause shall not increase as a
result.

\(d\) When the claim, loss, or damage is caused by willful misconduct or
lack of good faith on the part of any of the Contractor\'s principal
officials, the Contractor will not be indemnified for:

\(1\) Government claims against the Contractor (other than those arising
through subrogation); or

\(2\) Loss or damage affecting the Contractor\'s property.

\(e\) With the Contracting Officer\'s prior written approval, the
Contractor may, in any subcontract under this contract, indemnify the
subcontractor against any risk defined in the contract as unusually
hazardous or nuclear. This indemnification will provide, between the
Contractor and the subcontractor, the same rights and duties, and the
same evidence or proof, and Government settlement or defense of claims
as this clause provides. The Contracting Officer may also approve
indemnification of subcontractor\'s at any lower tier, under the same
terms and conditions. The Government will indemnify the Contractor
against liability to subcontractors incurred under subcontract
provisions approved by the Contracting Officer.

\(f\) The rights and obligations of the parties under this clause will
survive this contract\'s termination, expiration, or completion. The
Government will make no payment under this clause unless the agency head
determines that the amount is just and reasonable. The Government may
pay the Contractor or subcontractors, or may directly pay parties to
whom the Contractor or subcontractors may be liable.

\(g\) The Contractor will:

\(1\) Promptly notify the Contracting Officer of any claim or action
against, or any loss by, the Contractor or any subcontractors that may
reasonably be expected to involve indemnification under this clause;

\(2\) Immediately furnish to the Government copies of all pertinent
papers the Contractor receives;

\(3\) Furnish evidence or proof of any claim, loss, or damage covered by
this clause in the manner and form the Government requires; and

\(4\) Comply with the Government\'s directions and execute any
authorizations required in connection with settlement or defense of
claims or actions.

\(h\) The Government may direct, control, or assist in settling or
defending any claim or action that may involve indemnification under
this clause.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts if the contractor will be exposed
to unusually hazardous or nuclear risks and the DOT Secretary has
authorized the use of the clause.

**3.10.7-1/alt1** **Indemnification under Public Law 85-804 Alternate
I** (October 1996)

In cost reimbursement contracts, add the following paragraph to the end
of the basic clause:

The cost of insurance (including self-insurance programs) covering a
risk defined in this contract as unusually hazardous or nuclear shall
not be reimbursed except to the extent that the Contracting Officer has
required or approved this insurance. The Government\'s obligations under
this clause are (a) excepted from the release required under this
contract\'s clause relating to allowable cost; and (b) not affected by
this contract\'s \"Limitation of Cost\" or \"Limitation of Funds\"
clause.

PRESCRIPTION:

Should be used in cost reimbursement SIR\'s and contracts if the
contractor will be exposed to unusually hazardous or nuclear risks and
the DOT Secretary has authorized the use of the clause.

**3.10.9-1** **First Article Approval\--Contractor Testing** (July 2003)

\(a\) The Contractor shall test \_\_\_\_\_\_ unit(s) of Lot/Item
\_\_\_\_\_\_ as specified in this contract. At least \_\_\_\_\_\_
calendar days before the beginning of first article tests, the
Contractor shall notify the Contracting Officer, in writing, of the time
and location of the testing so that the Government may witness the
tests.

\(b\) The Contractor shall submit the first article test report within
\_\_\_\_\_\_ calendar days from the date of this contract to
\_\_\_\_\_\_\[insert address of the Government activity to receive the
report\] marked \'FIRST ARTICLE TEST REPORT: Contract No. \_\_\_\_\_\_,
Lot/Item No. \_\_\_\_\_\_ \' Within \_\_\_\_\_\_ calendar days after the
Government receives the test report, the Contracting Officer shall
notify the Contractor, in writing, of the conditional approval,
approval, or disapproval of the first article. The notice of conditional
approval or approval shall not relieve the Contractor from complying
with all requirements of the specifications and all other terms and
conditions of this contract. A notice of conditional approval shall
state any further action required of the Contractor. A notice of
disapproval shall cite reasons for the disapproval.

\(c\) If the first article is disapproved, the Contractor, upon
Government request, shall repeat any or all first article tests. After
each request for additional tests, the Contractor shall make any
necessary changes, modifications, or repairs to the first article or
select another first article for testing. All costs related to these
tests are to be borne by the Contractor, including any and all costs for
additional tests following a disapproval. The Contractor shall then
conduct the tests and deliver another report to the Government under the
terms and conditions and within the time specified by the Government.
The Government shall take action on this report within the time
specified in paragraph (b) above. The Government reserves the right to
require an equitable adjustment of the contract price for any extension
of the delivery schedule, or for any additional costs to the Government
related to these tests.

\(d\) If the Contractor fails to deliver any first article report on
time, or the Contracting Officer disapproves any first article, the
Contractor shall be deemed to have failed to make delivery within the
meaning of the Default clause of this contract.

\(e\) Unless otherwise provided in the contract, and if the approved
first article is not consumed or destroyed in testing, the Contractor
may deliver the approved first article as part of the contract quantity
if it meets all contract requirements for acceptance.

\(f\) If the Government does not act within the time specified in
paragraph (b) or (c) above, the Contracting Officer shall, upon timely
written request from the Contractor, equitably adjust under the changes
clause of this contract the delivery or performance dates and/or the
contract price, and any other contractual term affected by the delay.

\(g\) Before first article approval, the acquisition of materials or
components for, or the commencement of production of the balance of the
contract quantity is at the sole risk of the Contractor. Before first
article approval, the costs thereof shall not be allocable to this
contract for

\(1\) payments, or

\(2\) termination settlements if the contract is terminated for the
convenience of the Government.

\(h\) The Government may waive the requirement for first article
approval test where supplies identical or similar to those called for in
the schedule have been previously furnished by the offeror/contractor
and have been accepted by the Government. The offeror/contractor may
request a waiver.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a fixed-price contract is
contemplated with the contract requiring first article approval and the
contractor performing the testing. The Contracting Officer should insert
appropriate information in the clause.

**3.10.9-1/alt1** **First Article Approval\--Contractor Testing
Alternate I** (July 2003)

\(a\) The Contractor shall test \_\_\_\_\_\_ unit(s) of Lot/Item
\_\_\_\_\_\_ as specified in this contract. At least \_\_\_\_\_\_
calendar days before the beginning of first article tests, the
Contractor shall notify the Contracting Officer, in writing, of the time
and location of the testing so that the Government may witness the
tests.

\(b\) The Contractor shall submit the first article test report within
\_\_\_\_\_\_ calendar days from the date of this contract to
\_\_\_\_\_\_\[insert address of the Government activity to receive the
report\] marked \'FIRST ARTICLE TEST REPORT: Contract No. \_\_\_\_\_\_,
Lot/Item No. \_\_\_\_\_\_ \' Within \_\_\_\_\_\_ calendar days after the
Government receives the test report, the Contracting Officer shall
notify the Contractor, in writing, of the conditional approval,
approval, or disapproval of the first article. The notice of conditional
approval or approval shall not relieve the Contractor from complying
with all requirements of the specifications and all other terms and
conditions of this contract. A notice of conditional approval shall
state any further action required of the Contractor. A notice of
disapproval shall cite reasons for the disapproval.

\(c\) If the first article is disapproved, the Contractor, upon
Government request, shall repeat any or all first article tests. After
each request for additional tests, the Contractor shall make any
necessary changes, modifications, or repairs to the first article or
select another first article for testing. All costs related to these
tests are to be borne by the Contractor, including any and all costs for
additional tests following a disapproval. The Contractor shall then
conduct the tests and deliver another report to the Government under the
terms and conditions and within the time specified by the Government.
The Government shall take action on this report within the time
specified in paragraph (b) above. The Government reserves the right to
require an equitable adjustment of the contract price for any extension
of the delivery schedule, or for any additional costs to the Government
related to these tests.

\(d\) If the Contractor fails to deliver any first article report on
time, or the Contracting Officer disapproves any first article, the
Contractor shall be deemed to have failed to make delivery within the
meaning of the Default clause of this contract.

\(e\) Unless otherwise provided in the contract, and if the approved
first article is not consumed or destroyed in testing, the Contractor
may deliver the approved first article as part of the contract quantity
if it meets all contract requirements for acceptance.

\(f\) If the Government does not act within the time specified in
paragraph (b) or (c) above, the Contracting Officer shall, upon timely
written request from the Contractor, equitably adjust under the changes
clause of this contract the delivery or performance dates and/or the
contract price, and any other contractual term affected by the delay.

\(g\) Before first article approval, the acquisition of materials or
components for, or the commencement of production of the balance of the
contract quantity is at the sole risk of the Contractor. Before first
article approval, the costs thereof shall not be allocable to this
contract for

\(1\) payments, or

\(2\) termination settlements if the contract is terminated for the
convenience of the Government.

\(h\) The Government may waive the requirement for first article
approval test where supplies identical or similar to those called for in
the schedule have been previously furnished by the offeror/contractor
and have been accepted by the Government. The offeror/contractor may
request a waiver.

\(i\) The Contractor shall produce both the first article and the
production quantity at the same facility and shall submit a
certification to this effect with each first article.

(End of clause)

PRESCRIPTION:

Should be used if it is intended that the contractor be required to
produce the first article and the production quantity at the same
facility. The Contracting Officer should insert appropriate information
in the clause.

**3.10.9-1/alt2** **First Article Approval\--Contractor Testing
Alternate II** (July 2003)

\(a\) The Contractor shall test \_\_\_\_\_\_ unit(s) of Lot/Item
\_\_\_\_\_\_ as specified in this contract. At least \_\_\_\_\_\_
calendar days before the beginning of first article tests, the
Contractor shall notify the Contracting Officer, in writing, of the time
and location of the testing so that the Government may witness the
tests.

\(b\) The Contractor shall submit the first article test report within
\_\_\_\_\_\_ calendar days from the date of this contract to
\_\_\_\_\_\_\[insert address of the Government activity to receive the
report\] marked \'FIRST ARTICLE TEST REPORT: Contract No. \_\_\_\_\_\_,
Lot/Item No. \_\_\_\_\_\_ \' Within \_\_\_\_\_\_ calendar days after the
Government receives the test report, the Contracting Officer shall
notify the Contractor, in writing, of the conditional approval,
approval, or disapproval of the first article. The notice of conditional
approval or approval shall not relieve the Contractor from complying
with all requirements of the specifications and all other terms and
conditions of this contract. A notice of conditional approval shall
state any further action required of the Contractor. A notice of
disapproval shall cite reasons for the disapproval.

\(c\) If the first article is disapproved, the Contractor, upon
Government request, shall repeat any or all first article tests. After
each request for additional tests, the Contractor shall make any
necessary changes, modifications, or repairs to the first article or
select another first article for testing. All costs related to these
tests are to be borne by the Contractor, including any and all costs for
additional tests following a disapproval. The Contractor shall then
conduct the tests and deliver another report to the Government under the
terms and conditions and within the time specified by the Government.
The Government shall take action on this report within the time
specified in paragraph (b) above. The Government reserves the right to
require an equitable adjustment of the contract price for any extension
of the delivery schedule, or for any additional costs to the Government
related to these tests.

\(d\) If the Contractor fails to deliver any first article report on
time, or the Contracting Officer disapproves any first article, the
Contractor shall be deemed to have failed to make delivery within the
meaning of the Default clause of this contract.

\(e\) Unless otherwise provided in the contract, and if the approved
first article is not consumed or destroyed in testing, the Contractor
may deliver the approved first article as part of the contract quantity
if it meets all contract requirements for acceptance.

\(f\) If the Government does not act within the time specified in
paragraph (b) or (c) above, the Contracting Officer shall, upon timely
written request from the Contractor, equitably adjust under the changes
clause of this contract the delivery or performance dates and/or the
contract price, and any other contractual term affected by the delay.

\(g\) Before first article approval, the Contracting Officer may, by
written authorization, authorize the Contractor to acquire specific
materials or components or to commence production to the extent
essential to meet the delivery schedules. Until first article approval
is granted, only costs for the first article and costs incurred under
this authorization are allocable to this contract for (1) ) payments, or
(2) termination settlements if the contract is terminated for the
convenience of the Government. If first article tests reveal deviations
from contract requirements, the Contractor shall, at the location
designated by the Government, make the required changes or replace all
items produced under this contract at no change in the contract price.

\(h\) The Government may waive the requirement for first article
approval test where supplies identical or similar to those called for in
the schedule have been previously furnished by the offeror/contractor
and have been accepted by the Government. The offeror/contractor may
request a waiver.

(End of clause)

PRESCRIPTION:

Should be used when it is necessary to authorize the contractor to
purchase material or to commence production before first article
approval. The Contracting Officer should insert appropriate information
in the clause.

**3.10.9-2** **First Article Approval\--Government Testing** (July 2003)

\(a\) The Contractor shall deliver \_\_\_\_\_\_ unit(s) of Lot/Item
\_\_\_\_\_\_ within \_\_\_\_\_\_ calendar days from the date of this
contract to the Government at \_\_\_\_\_\_\[insert name and address of
the testing facility\] for first article tests. The shipping
documentation shall contain this contract number and the Lot/Item
identification. The characteristics that the first article must meet and
the testing requirements are specified elsewhere in this contract.

\(b\) Within \_\_\_\_\_\_ calendar days after the Government receives
the first article, the Contracting Officer shall notify the Contractor,
in writing, of the conditional approval, approval, or disapproval of the
first article. The notice of conditional approval or approval shall not
relieve the Contractor from complying with all requirements of the
specifications and all other terms and conditions of this contract. A
notice of conditional approval shall state any further action required
of the Contractor. A notice of disapproval shall cite reasons for the
disapproval.

\(c\) If the first article is disapproved, the Contractor, upon
Government request, shall submit an additional first article for
testing. After each request, the Contractor shall make any necessary
changes, modifications, or repairs to the first article or select
another first article for testing. All costs related to these tests are
to be borne by the Contractor, including any and all costs for
additional tests following a disapproval. The Contractor shall furnish
any additional first article to the Government under the terms and
conditions and within the time specified by the Government. The
Government shall act on this first article within the time limit
specified in paragraph (b) of this clause. The Government reserves the
right to require an equitable adjustment of the contract price for any
extension of the delivery schedule or for any additional costs to the
Government related to these tests.

\(d\) If the Contractor fails to deliver any first article on time, or
the Contracting Officer disapproves any first article, the Contractor
shall be deemed to have failed to make delivery within the meaning of
the Default clause of this contract.

\(e\) Unless otherwise provided in the contract, the Contractor\--

\(1\) May deliver the approved first article as a part of the contract
quantity, provided it meets all contract requirements for acceptance and
was not consumed or destroyed in testing; and

\(2\) Shall remove and dispose of any first article from the Government
test facility at the Contractor\'s expense.

\(f\) If the Government does not act within the time specified in
paragraphs (b) or (c) of this clause, the Contracting Officer shall,
upon timely written request from the Contractor, equitably adjust under
the Changes clause of this contract the delivery or performance dates
and/or the contract price, and any other contractual term affected by
the delay.

\(g\) The Contractor is responsible for providing operating and
maintenance instructions, spare parts support, and repair of the first
article during any first article test.

\(h\) Before first article approval, the acquisition of materials or
components for, or the commencement of production of, the balance of the
contract quantity is at the sole risk of the Contractor. Before first
article approval, the costs thereof shall not be allocable to this
contract for

\(1\) payments, or

\(2\) termination settlements if the contract is terminated for the
convenience of the Government.

\(i\) The Government may waive the requirement for first article
approval test where supplies identical or similar to those called for in
the schedule have been previously furnished by the Offeror/Contractor
and have been accepted by the Government. The Offeror/Contractor may
request a waiver.

(End of clause)

PRESCRIPTION:

Should be used in SIR\'s and contracts when a fixed-price contract is
contemplated and it is intended that the contract require first article
approval and that the FAA will be responsible for conducting the first
article test. The Contracting Officer should insert appropriate
information in the clause.

**3.10.9-2/alt1** **First Article Approval\--Government Testing
Alternate I** (July 2003)

\(a\) The Contractor shall deliver \_\_\_\_\_\_ unit(s) of Lot/Item
\_\_\_\_\_\_ within \_\_\_\_\_\_ calendar days from the date of this
contract to the Government at \_\_\_\_\_\_\[insert name and address of
the testing facility\] for first article tests. The shipping
documentation shall contain this contract number and the Lot/Item
identification. The characteristics that the first article must meet and
the testing requirements are specified elsewhere in this contract.

\(b\) Within \_\_\_\_\_\_ calendar days after the Government receives
the first article, the Contracting Officer shall notify the Contractor,
in writing, of the conditional approval, approval, or disapproval of the
first article. The notice of conditional approval or approval shall not
relieve the Contractor from complying with all requirements of the
specifications and all other terms and conditions of this contract. A
notice of conditional approval shall state any further action required
of the Contractor. A notice of disapproval shall cite reasons for the
disapproval.

\(c\) If the first article is disapproved, the Contractor, upon
Government request, shall submit an additional first article for
testing. After each request, the Contractor shall make any necessary
changes, modifications, or repairs to the first article or select
another first article for testing. All costs related to these tests are
to be borne by the Contractor, including any and all costs for
additional tests following a disapproval. The Contractor shall furnish
any additional first article to the Government under the terms and
conditions and within the time specified by the Government. The
Government shall act on this first article within the time limit
specified in paragraph (b) of this clause. The Government reserves the
right to require an equitable adjustment of the contract price for any
extension of the delivery schedule or for any additional costs to the
Government related to these tests.

\(d\) If the Contractor fails to deliver any first article on time, or
the Contracting Officer disapproves any first article, the Contractor
shall be deemed to have failed to make delivery within the meaning of
the Default clause of this contract.

\(e\) Unless otherwise provided in the contract, the Contractor\--

\(1\) May deliver the approved first article as a part of the contract
quantity, provided it meets all contract requirements for acceptance and
was not consumed or destroyed in testing; and

\(2\) Shall remove and dispose of any first article from the Government
test facility at the Contractor\'s expense.

\(f\) If the Government does not act within the time specified in
paragraphs (b) or (c) of this clause, the Contracting Officer shall,
upon timely written request from the Contractor, equitably adjust under
the Changes clause of this contract the delivery or performance dates
and/or the contract price, and any other contractual term affected by
the delay.

\(g\) The Contractor is responsible for providing operating and
maintenance instructions, spare parts support, and repair of the first
article during any first article test.

\(h\) Before first article approval, the acquisition of materials or
components for, or the commencement of production of, the balance of the
contract quantity is at the sole risk of the Contractor. Before first
article approval, the costs thereof shall not be allocable to this
contract for

\(1\) payments, or

\(2\) termination settlements if the contract is terminated for the
convenience of the Government.

\(i\) The Government may waive the requirement for first article
approval test where supplies identical or similar to those called for in
the schedule have been previously furnished by the Offeror/Contractor
and have been accepted by the Government. The Offeror/Contractor may
request a waiver.

\(j\) The Contractor shall produce both the first article and the
production quantity at the same facility and shall submit a
certification to this effect with each first article.

(End of clause)

PRESCRIPTION:

Should be used when it is intended that the contractor be required to
produce the first article and the production quantity at the same
facility.

**3.10.9-2/alt2** **First Article Approval\--Government Testing
Alternate II** (July 2003)

\(a\) The Contractor shall deliver \_\_\_\_\_\_ unit(s) of Lot/Item
\_\_\_\_\_\_ within \_\_\_\_\_\_ calendar days from the date of this
contract to the Government at \_\_\_\_\_\_\[insert name and address of
the testing facility\] for first article tests. The shipping
documentation shall contain this contract number and the Lot/Item
identification. The characteristics that the first article must meet and
the testing requirements are specified elsewhere in this contract.

\(b\) Within \_\_\_\_\_\_ calendar days after the Government receives
the first article, the Contracting Officer shall notify the Contractor,
in writing, of the conditional approval, approval, or disapproval of the
first article. The notice of conditional approval or approval shall not
relieve the Contractor from complying with all requirements of the
specifications and all other terms and conditions of this contract. A
notice of conditional approval shall state any further action required
of the Contractor. A notice of disapproval shall cite reasons for the
disapproval.

\(c\) If the first article is disapproved, the Contractor, upon
Government request, shall submit an additional first article for
testing. After each request, the Contractor shall make any necessary
changes, modifications, or repairs to the first article or select
another first article for testing. All costs related to these tests are
to be borne by the Contractor, including any and all costs for
additional tests following a disapproval. The Contractor shall furnish
any additional first article to the Government under the terms and
conditions and within the time specified by the Government. The
Government shall act on this first article within the time limit
specified in paragraph (b) of this clause. The Government reserves the
right to require an equitable adjustment of the contract price for any
extension of the delivery schedule or for any additional costs to the
Government related to these tests.

\(d\) If the Contractor fails to deliver any first article on time, or
the Contracting Officer disapproves any first article, the Contractor
shall be deemed to have failed to make delivery within the meaning of
the Default clause of this contract.

\(e\) Unless otherwise provided in the contract, the Contractor\--

\(1\) May deliver the approved first article as a part of the contract
quantity, provided it meets all contract requirements for acceptance and
was not consumed or destroyed in testing; and

\(2\) Shall remove and dispose of any first article from the Government
test facility at the Contractor\'s expense.

\(f\) If the Government does not act within the time specified in
paragraphs (b) or (c) of this clause, the Contracting Officer shall,
upon timely written request from the Contractor, equitably adjust under
the Changes clause of this contract the delivery or performance dates
and/or the contract price, and any other contractual term affected by
the delay.

\(g\) The Contractor is responsible for providing operating and
maintenance instructions, spare parts support, and repair of the first
article during any first article test.

\(h\) Before first article approval, the Contracting Officer may, by
written authorization, authorize the Contractor to acquire specific
materials or components or to commence production to the extent
essential to meet the delivery schedules. Until first article approval
is granted, only costs for the first article and costs incurred under
this authorization are allocable to this contract for (1) payments, or
(2) termination settlements if the contract is terminated for the
convenience of the Government. If first article tests reveal deviations
from contract requirements, the Contractor shall, at the location
designated by the Government, make the required changes or replace all
items produced under this contract at no change in the contract price.

\(i\) The Government may waive the requirement for first article
approval test where supplies identical or similar to those called for in
the schedule have been previously furnished by the Offeror/Contractor
and have been accepted by the Government. The Offeror/Contractor may
request a waiver.

(End of clause)

PRESCRIPTION:

Should be used when it become necessary to authorize the contractor to
purchase material or to commence production before first article
approval. The Contracting Officer should insert appropriate information
in the clause.

**3.11-1** **Commercial Bill of Lading Notations** (April 1999)

If the Contracting Officer authorizes supplies to be shipped on a
commercial bill of lading and the Contractor will be reimbursed these
transportation costs as direct allowable costs, the Contractor shall
ensure before shipment is made that the commercial shipping documents
are annotated with either of the following notations, as appropriate:

\(a\) If the Government is shown as the consignor or the consignee, the
annotation shall be:

Transportation is for the Federal Aviation Administration and the actual
total transportation charges paid to the carrier(s) by the consignor or
consignee are assignable to, and shall be reimbursed by, the Government.

\(b\) If the Government is not shown as the consignor or the consignee,
the annotation shall be:

Transportation is for the Federal Aviation Administration and the actual
total transportation charges paid to the carrier(s) by the consignor or
consignee shall be reimbursed by the Government, pursuant to
cost-reimbursement contract number. This may be confirmed by contacting
\[CO insert name and address of the point of contact\].

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when commercial bill of lading
will be authorized by the Contracting Officer

CO to insert information

**3.11-2** **Permits, Authorities, or Franchises** (April 1999)

\(a\) The offeror does \[ \], does not \[ \], hold authorization from
the Federal Highway Administration (FHWA) or other cognizant regulatory
body. If authorization is held, it is as follows:

\[Offeror to insert name of regulatory body\]

\[Offeror to insert authorization no.\]

\(b\) The offeror shall furnish to the Government, if requested, copies
of the authorization before moving the material under any contract
awarded. In addition, the offeror shall, at the offeror\'s expense,
obtain and maintain any permits, franchises, licenses, and other
authorities issued by State and local governments.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and Contracts when regulated transportation is
involved. This clause need not be used when a Federal Office move is
intrastate and the Contracting Officer determines that it is in the
Government\'s interest not to apply the requirement for holding or State
authority to operate within the State.

**3.11-3** **Capability to Perform a Contract for the Relocation of a
Federal Office** (April 1999)

\(a\) If the move specified in this contract is to be performed by the
Contractor as a carrier within the borders of more than one State,
including the District of Columbia, (i.e., an interstate move), the
Contractor shall have obtained and hold appropriate and current
operating authority from the Interstate Commerce Commission.

\(b\) (1) If the move specified in this contract is to be performed by
the Contractor as a carrier wholly within the borders of one State or
the District of Columbia (i.e., an intrastate move), the Contractor
shall, when required by the State, or the District of Columbia, in which
the move is to take place, have obtained and hold appropriate and
current operating authority from that jurisdiction in the form of a
certificate, permit, or equivalent license to operate.

\(2\) If no authority to operate is required by the State or the
District of Columbia, the Contractor as carrier shall maintain
facilities, equipment, and a business address within the jurisdiction in
which the move is to take place. However, if the move is to originate
and/or terminate within an area of one State or the District of
Columbia, that comprises a part of a recognized Commercial Zone (see 49
CFR 1048) the boundaries of which encompass portions of more than one
State or the District of Columbia, it shall be sufficient if the
Contractor as carrier maintains facilities, equipment, and a business
address within the Commercial Zone and holds appropriate operating
authority, if required, from the jurisdiction within which the
Contractor maintains the facilities, equipment, and business address.

\(c\) If the move specified in this contract will not be performed by
the Contractor as carrier, it must be performed for the Contractor by a
carrier operating under a subcontract with the Contractor. In this case,
the Contractor shall not be subject to the requirements of paragraphs
(a) and (b) above, but shall be responsible for requiring and ensuring
that the subcontractor carrier complies with those requirements in every
respect.

\(d\) The Contractor shall be in compliance with the applicable
requirements of this clause at least 14 days before the date on which
performance of the contract shall commence under the terms specified;
except that, if the period from the date of award of the contract to the
date that performance shall commence is less than 28 days, the
Contractor shall comply with the applicable requirements of this clause
midway between the time of award and the time of commencement of
performance.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation-related services when a Federal Office is relocated, to
ensure that offerors are capable to perform interstate or intrastate
moving contracts involving the relocation of Federal Offices.

**3.11-3/alt1** **Capability to Perform a Contract for the Relocation of
a Federal Office** (April 1999)

\(a\) If the move specified in this contract is to be performed by the
Contractor as a carrier within the borders of more than one State,
including the District of Columbia, (i.e., an interstate move), the
Contractor shall have obtained and hold appropriate and current
operating authority from the Interstate Commerce Commission.

\(b\) If the move specified in this contract will not be performed by
the Contractor as carrier, it must be performed for the Contractor by a
carrier operating under a subcontract with the Contractor. In this case,
the Contractor shall not be subject to the requirements of paragraph (a)
above, but shall be responsible for requiring and ensuring that the
subcontractor carrier complies with those requirements in every respect.

\(c\) The Contractor shall be in compliance with the applicable
requirements of this clause at least 14 days before the date on which
performance of the contract shall commence under the terms specified;
except that, if the period from the date of award of the contract to the
date that performance shall commence is less than 28 days, the
Contractor shall comply with the applicable requirements of this clause
midway between the time of award and the time of commencement of
performance.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts if a Federal office move is
intrastate and the contracting officer determines that it is in the
Government\'s interest not to apply the requirements for holding or
obtaining State authority to operate within the State, and to maintain a
facility within the State or commercial zone.

**3.11-4** **Inspection of Shipping and receiving Facilities** (April
1999)

\(a\) Offerors are urged to inspect the shipping and receiving
facilities where services are to be performed and to satisfy themselves
regarding all general and local conditions that may affect the cost of
contract performance.

\(b\) Site visits have been scheduled as follows:\[CO to insert
information\]

(Locations)

(Dates)

(Times).

\(c\) For further information offerors may contact:\[CO to insert
information\]

(Name)

(Telephone).

(End of provision)

PRESCRIPTION:

Should be used in SIR\'s and contracts for transportation or for
transportation-related services when it is desired for offerors to
inspect the shipping, receiving, or other sites to ensure realistic
bids.

CO to insert information.

**3.11-5** **Reserved** (April 1999)

Reserved

PRESCRIPTION:

Reserved

**3.11-6** **Financial Statement** (April 1999)

The offeror shall, upon request, promptly furnish the Government with a
current certified statement of the offeror\'s financial condition and
such data as the Government may request with respect to the offeror\'s
operations. The Government will use this information to determine the
offeror\'s financial responsibility and ability to perform under the
contract. Failure of an offeror to comply with a request for information
will subject the offer to possible rejection on responsibility grounds.

(End of provision)

PRESCRIPTION:

Should be used in SIR\'s and contracts for transportation or for
transportation-related services to ensure that offerors are prepared to
furnish financial statements.

**3.11-7** **Freight Excluded** (April 1999)

Excluded from the scope of this contract are shipments that can be more
advantageously or economically moved via parcel post or small package
carrier; shipments of unusual value, explosives and other dangerous
articles, household goods, commodities in bulk, commodities injurious or
contaminating to other freight; and shipments that the Government may
elect to move in Government vehicles.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation-related services when any commodities or types of
shipments have been identified for exclusion.

**3.11-8** **Estimated Weights or Quantities Not Guaranteed** (April
1999)

The estimated weights or quantities are not a guarantee of actual
weights or quantities, as the Government does not guarantee any
particular volume of traffic described in this contract. However, to the
extent services are required as described in this contract and in
accordance with the terms of this contract, orders for these services
will be placed with the Contractor.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation-related services when weights or quantities are
estimates.

**3.11-9** **Agreed Weight- General Freight** (April 1999)

The shipping activity shall determine the weight of each shipment. The
weight shall be shown on the covering shipping document and shall be
accepted by the Contractor as the agreed weight.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation- related services when the shipping activity determines
the weight of shipments of freight other than household goods or office
furniture.

**3.11-10** **Net Weight - General Freight** (April 1999)

\(a\) The net weight of the shipment shall be determined by deducting
the tare weight of the vehicle (determined by having the empty vehicle
with a full tank of fuel weighed by a certified weighmaster on a
certified scale) from the gross weight of the vehicle (determined by
having the loaded vehicle with a full tank of fuel weighed by a
certified weighmaster on a certified scale).

\(b\) The Contractor shall attach the original copies of the empty and
loaded weight certificates to the invoice for services.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation- related services when the weight of shipments of freight
other than household goods or office furniture is not known at the time
of shipment and the contractor is responsible for determining the net
weight of the shipments.

**3.11-11** **Net Weight \--Household Goods or Office Furniture** (April
1999)

\(a\) Net weight\--full loads. The net weight of the shipment shall be
determined by deducting the tare weight of the vehicle (determined by
having a certified weighmaster weigh on a certified scale the empty
vehicle with a full tank of fuel and all blankets, pads, chains,
dollies, hand trucks, and all other necessary equipment inside the
vehicle) from the gross weight of the vehicle (determined by having a
certified weighmaster weigh on a certified scale the fully loaded
vehicle before arrival at destination).

\(b\) Net weight\--part loads. The net weight of the first part load
shall be determined in the same manner as specified for a full load. The
net weight of the second part load shall be determined by using as the
tare weight of the vehicle the gross weight of the vehicle containing
the first part load and deducting this weight from the new gross weight
(determined by having the loaded vehicle weighed again, in the same
manner as specified for the full load). The same procedure shall apply
for each succeeding part load.

\(c\) Weight certificates. The contractor shall attach the original copy
of each weight certificate to the invoice for services.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation- related services when movements of Government
employees\' household goods or relocations of Government offices are
involved.

**3.11-12** **Supervision, Labor or Materials** (April 1999)

The Contractor shall furnish adequate supervision, labor, materials,
supplies, and equipment necessary to perform all the services
contemplated under this contract in an orderly, timely, and efficient
manner.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation- related services when the contractor is required to
furnish supervision, labor, or materials.

**3.11-13** **Accessorial Services\--Moving Contracts** (April 1999)

\(a\) Packing and/or crating and padding. The Contractor shall \--

\(1\) Perform all of the packing and/or crating and padding necessary
for the protection of the goods to be transported;

\(2\) Furnish packing containers, including, but not limited to,
barrels, boxes, wardrobes, and cartons; all crating materials; and all
padding materials and equipment;

\(3\) Furnish or cause to be furnished, when necessary, padding or other
protective material for the interior of the buildings, including
elevators, from and to which the property will be moved under this
contract; and

\(4\) Ensure that all containers and materials are clean and of quality
sufficient for protection of the goods.

\(b\) Disassembling and reassembling of property and servicing
appliances. The disassembling of property; e.g., beds and sectional
bookcases, and the preparing of appliances; e.g., washers, dryers, and
record players, for shipment shall be performed by the Contractor. The
Contractor shall reassemble the property and service the appliances upon
delivery at the new location.

\(c\) Unpacking and/or uncrating and placement of property. The
Contractor shall unpack and/or uncrate all property that was packed
and/or crated for movement under this contract. The Contractor shall
also place the property in the new location as instructed by the owner
of the property or authorized representative, and shall remove all
packing and similar or related material from the premises as requested
by the owner.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation of household
goods or office furniture.

**3.11-14** **Contractor Responsibility for Receipt of Shipment** (April
1999)

The Contractor shall diligently count and examine all goods tendered for
shipment, receipt for them, and make appropriate written exception for
any goods not in apparent good order.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or
transportation-related services when the contractor is responsible for
loading and unloading shipments.

**3.11-15** **Contractor Responsibility for Loading and Unloading**
(April 1999)

\(a\) Unless otherwise specified in this contract to cover store-door or
inside delivery, the Contractor shall load and unload shipments at no
additional expense to the Government.

\(b\) The Government or its agent will place or receive freight at the
tailgate of the Contractor\'s vehicle. Tailgate delivery, for purposes
of this contract, is defined as that which enables a forklift truck or
similar equipment, with operator only, to place or remove cargo from the
tailgate of the Contractor\'s vehicle.

\(c\) If loading is the responsibility of the Contractor, the Contractor
shall perform all

shoring, blocking, and bracing. The Contractor shall provide dunnage at
the Contractor\'s expense.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or
transportation-related services when the contractor is responsible for
loading and unloading shipments.

**3.11-16** **Contractor Responsibility for Returning Undelivered
Freight** (April 1999)

\(a\) When, through no fault of the Contractor, a shipment cannot be
delivered, the Contractor shall contact the shipper for disposition
instructions. If the shipment is ordered returned to the origin point,
the charges assessed for the return trip shall be the same as the
charges assessed for the outbound trip. The shipper shall maintain a
record of the goods that, through no fault of the Contractor, could not
be delivered and are returned to the shipper. If, at a future date, the
returned goods are determined to be related to a claim against the
Contractor, the claim will be adjusted accordingly.

\(b\) When, through the fault of the Contractor, a shipment cannot be
delivered, the Contractor shall return the shipment to the origin point
at no charge to the Government. Any charges incurred for redelivery,
which are in excess of the charges that would have been incurred under
this contract, shall be for the Contractor\'s account in accordance with
the Default clause of the contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or
transportation-

related services when the contractor is responsible for returning
undelivered freight.

**3.11-17** **Charges** (April 1999)

In no event shall charges under this contract be in excess of charges
based on the Contractor\'s lowest rate available to the general public,
or be in excess of charges based on rates otherwise tendered to the
Government by the Contractor for the same type of service.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or
transportation-

related services.

**3.11-18** **Multiple Shipments** (April 1999)

When multiple shipments are tendered at one time to the Contractor for
movement from one origin to multiple consignees at the same destination,
the rate charged for each shipment shall be the rate applicable to the
aggregate weight.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation- related services when multiple shipments are tendered at
one time to the contractor for transportation from one origin to two or
more consignees at the same destination.

**3.11-19** **Stopping in Transit for Partial Unloading** (April 1999)

When multiple shipments are tendered at one time to the Contractor for
movement from one origin to two or more consignees along the route
between the origin and the last destination, the rate charged shall be
the rate applicable to the aggregate weight, plus a charge of \$\[CO
insert dollar amount\] for each shipment unloaded at an intermediate
point enroute to the last destination.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation-related services when multiple shipments are tendered at
one time to the contractor for transportation from one origin to two or
more consignees along the route between origin and last destination.

CO to insert information.

**3.11-20** **Estimated Quantities or Weights for Evaluation of Offers**
(April 1999)

For the purpose of evaluating offers, and for no other purpose, the
following estimated quantities or weights will be considered as the
quantities or weights to be shipped between each origin and destination
listed:\[CO to insert information\]

Origin Destination Estimated quantity or weight

\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(End of provision)

PRESCRIPTION:

Should be used in SIR\'s and contracts for transportation or for
transportation-related services when quantities or weights of shipments
between each origin and destination are not known, stating estimated
quantity or weight for each origin/destination pair.

CO to insert information

**3.11-21** **Contractor Liability for Personal Injury and/or Property
Damage** (April 1999)

\(a\) The Contractor assumes responsibility for all damage or injury to
persons or property occasioned through the use, maintenance, and
operation of the Contractor\'s vehicles or other equipment by, or the
action of, the Contractor or the Contractor\'s employees and agents.

\(b\) The Contractor, at the Contractor\'s expense, shall maintain
adequate public liability and property damage insurance during the
continuance of this contract, insuring the Contractor against all claims
for injury or damage.

\(c\) The Contractor shall maintain Workers\' Compensation and other
legally required insurance with respect to the Contractor\'s own
employees and agents.

\(d\) The Government shall in no event be liable or responsible for
damage or injury to any person or property occasioned through the use,
maintenance, or operation of any vehicle or other equipment by, or the
action of, the Contractor or the Contractor\'s employees and agents in
performing under this contract, and the Government shall be indemnified
and saved harmless against claims for damage or injury in such cases.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation- related services.

**3.11-22** **Contractor Liability for Loss of and/or Damage to Freight
Other Than Household Goods** (April 1999)

Except when loss and/or damage arises out of causes beyond the control
and without the fault or negligence of the Contractor, the Contractor
shall assume full liability for any and all goods lost and/or damaged in
the movement covered by this contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for the transportation of freight
other than household goods.

**3.11-23** **Contractor Liability for Loss of and/or Damage to
Household Goods** (April 1999)

\(a\) Except when loss and/or damage arise out of causes beyond the
control and without the fault or negligence of the Contractor, the
Contractor shall be liable to the owner for the loss of and/or damage to
any article while being \--

\(1\) Packed, picked up, loaded, transported, delivered, unloaded, or
unpacked;

\(2\) Stored in transit; or

\(3\) Serviced (appliances, etc.) by a third person hired by the
Contractor to perform the servicing.

\(b\) The Contractor shall be liable for loss and/or damage discovered
by the owner if written notice of such loss and/or damage is dispatched
to the Contractor not later than 75 days following the date of delivery.

\(c\) The Contractor shall indemnify the owner of the goods at full
value coverage up to the carrier\'s maximum liability

(End of clause)

PRESCRIPTION:

Shall be used in SIR\' and the contracts for the transportation of
household goods.

**3.11-24** **Advance Notification by the Government** (April 1999)

The Government will notify the Contractor \[CO to insert number\] hours
in advance of the number of pieces and weight of all normal shipments
and the time the shipment will be available for pickup. On
other-than-normal shipments, the Government will furnish additional
information; e.g., dimension of oversized pieces, as necessary to
determine the resources needed to perform the required services.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation-related services when the Government is responsible for
notifying the contractor of specific service times or unusual shipments.

CO to insert information

**3.11-25** **Government-Furnished Equipment With or Without Operators**
(April 1999)

The Government will provide \[Co to insert equipment; e.g., forklifts\]
with or without operators at \[strike out \"with\" or \"without\", as
applicable, and insert origin, destination, or both\] to assist in
\[insert loading, unloading, or both\], when required.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation when office relocations are involved.

CO to insert information

**3.11-26** **Government Direction and Marketing** (April 1999)

The Federal Aviation Administration (FAA) shall tag or mark property,
showing floor, room number, and location where property is to be placed
in the new building. The FAA shall provide sufficient personnel to
direct the Contractor\'s personnel in the placement of the property at
destination.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation when office relocations are involved.

**3.11-27** **Contract Not Affected by Oral Agreement** (April 1999)

No oral statement of any person shall modify or otherwise affect the
terms, conditions, or specifications stated in this contract. All
modifications to the contract must be made in writing by the Contracting
Officer or an authorized representative.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation for
transportation-related services.

**3.11-28** **Contractor\'s Invoices** (April 1999)

The Contractor shall submit itemized invoices as instructed by the
Federal Aviation Administration (FAA) ordering services under this
contract. The Contractor shall annotate each invoice with the contract
number and other ordering office document identification.

(End of clause)

PRESCRIPTION:

Shall be used In SIR\'s and contracts for drayage or other term
contracts for transportation or for transportation-related services.

**3.11-29** **F.O.B. Origin** (April 1999)

\(a\) The term \"f.o.b. origin,\" as used in this clause, means free of
expense to the Government delivered \--

\(1\) On board the indicated type of conveyance of the carrier (or of
the Government, if specified) at a designated point in the city, county,
and State from which the shipment will be made and from which line-haul
transportation service (as distinguished from switching, local drayage,
or other terminal service) will begin;

\(2\) To, and placed on, the carrier\'s wharf (at shipside, within reach
of the ship\'s loading tackle, when the shipping point is within a port
area having water transportation service) or the carrier\'s freight
station;

\(3\) To a U.S. Postal Service facility; or

\(4\) If stated in the SIR to any Government designated point located
within the same city or commercial zone as the f.o.b. origin point
specified in the contract (commercial zones are prescribed by the
Interstate Commerce Commission at 49 CFR 1048).

\(b\) The Contractor shall\--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment in
conformance with carrier requirements to protect the goods and to ensure
assessment of the lowest applicable transportation charge;

\(2\) (i) Order specified carrier equipment when requested by the
Government; or

\(ii\) If not specified, order appropriate carrier equipment not in
excess of capacity to accommodate shipment;

\(3\) Deliver the shipment in good order and condition to the carrier,
and load, stow, trim, block, and/or brace carload or truckload shipment
(when loaded by the Contractor) on or in the carrier\'s conveyance as
required by carrier rules and regulations;

\(4\) Be responsible for any loss of and/or damage to the goods\--

\(i\) Occurring before delivery to the carrier;

\(ii\) Resulting from improper packing and marking; or

\(iii\) Resulting from improper loading, stowing, trimming, blocking,
and/or bracing of the shipment, if loaded by the Contractor on or in the
carrier\'s conveyance;

\(5\) Complete the Government bill of lading supplied by the (Federal
Aviation Administration) FAA or, when a Government bill of lading is not
supplied, prepare a commercial bill of lading or other transportation
receipt. The bill of lading shall show\--

\(i\) A description of the shipment in terms of the governing freight
classification or tariff (or Government rate tender) under which lowest
freight rates are applicable;

\(ii\) The seals affixed to the conveyance with their serial numbers or
other identification;

\(iii\) Lengths and capacities of cars or trucks ordered and furnished;

\(iv\) Other pertinent information required to effect prompt delivery to
the consignee, including name, delivery address, postal address and ZIP
code of consignee, routing, etc.;

\(v\) Special instructions or annotations requested by the ordering
agency for commercial bills of lading; e.g.,

\(A\) \"To be converted to a Government bill of lading,\" or

\(B\) \"This shipment is the property of, and the freight charges paid
to the carrier(s) will be reimbursed by, the Government\"; and

\(vi\) The signature of the carrier\'s agent and the date the shipment
is received by the carrier; and

\(6\) Distribute the copies of the bill of lading, or other
transportation receipts, as directed by the FAA.

\(c\) These Contractor responsibilities are specified for performance at
the plant or plants at which the supplies are to be finally inspected
and accepted, unless the facilities for shipment by carrier\'s equipment
are not available at the Contractor\'s plant, in which case the
responsibilities shall be performed f.o.b. the point or points in the
same or nearest city where the specified carrier\'s facilities are
available; subject, however, to the following qualifications:

\(1\) If the Contractor\'s shipping plant is located in the State of
Alaska or Hawaii, the Contractor shall deliver the supplies listed for
shipment outside Alaska or Hawaii to the port of loading in Alaska or
Hawaii, respectively, as specified in the contract, at Contractor\'s
expense, and to that extent the contract shall be \"f.o.b.
destination.\"

\(2\) Notwithstanding subparagraph (c)(1) of this clause, if the
Contractor\'s shipping plant is located in the State of Hawaii, and the
contract requires delivery to be made by container service, the
Contractor shall deliver the supplies, at the Contractor\'s expense, to
the container yard in the same or nearest city where seavan container
service is available.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the delivery term is f.o.b.
origin.

**3.11-30** **F.O.B. Origin, Contractor\'s Facility** (April 1999)

\(a\) The term \"f.o.b. origin, contractor\'s facility,\" as used in
this clause, means free of expense to the Government delivered on board
the indicated type of conveyance of the carrier (or of the Government,
if specified) at the designated facility, on the named street or
highway, in the city, county, and State from which the shipment will be
made.

\(b\) The Contractor shall\--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment in
conformance with carrier requirements to protect the goods and to ensure
assessment of the lowest applicable transportation charge;

\(2\) (i) Order specified carrier equipment when requested by the
Government; or

\(ii\) If not specified, order appropriate carrier equipment not in
excess of capacity to accommodate shipment;

\(3\) Deliver the shipment in good order and condition to the carrier,
and load, stow, trim, block, and/or brace carload or truckload shipment
(when loaded by the Contractor) on or in the carrier\'s conveyance as
required by carrier rules and regulations;

\(4\) Be responsible for any loss of and/or damage to the goods\--

\(i\) Occurring before delivery to the carrier;

\(ii\) Resulting from improper packing and marking; or

\(iii\) Resulting from improper loading, stowing, trimming, blocking,
and/or bracing of the shipment, if loaded by the Contractor on or in the
carrier\'s conveyance;

\(5\) Complete the Government bill of lading supplied by the Federal
Aviation Administration (FAA) or, when a Government bill of lading is
not supplied, prepare a commercial bill of lading or other
transportation receipt. The bill of lading shall show\--

\(i\) A description of the shipment in terms of the governing freight
classification or tariff (or Government rate tender) under which lowest
freight rates are applicable;

\(ii\) The seals affixed to the conveyance with their serial numbers or
other identification;

\(iii\) Lengths and capacities of cars or trucks ordered and furnished;

\(iv\) Other pertinent information required to effect prompt delivery to
the consignee, including name, delivery address, postal address and ZIP
code of consignee, routing, etc.;

\(v\) Special instructions or annotations requested by the FAA for
commercial bills of lading; e.g.,

\(A\) \"To be converted to a Government bill of lading,\" or

\(B\) \"This shipment is the property of, and the freight charges paid
to the carrier(s) will be reimbursed by, the Government\"; and

\(vi\) The signature of the carrier\'s agent and the date the shipment
is received by the carrier; and

\(6\) Distribute the copies of the bill of lading, or other
transportation receipts, as directed by the FAA.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the delivery term is f.o.b.
origin contractor\'s facility.

**3.11-31** **F.O.B. Origin, Freight Allowed** (April 1999)

\(a\) The term \"f.o.b. origin, freight allowed,\" as used in this
clause, means\--

\(1\) Free of expense to the Government delivered\--

\(i\) On board the indicated type of conveyance of the carrier (or of
the Government, if specified) at a designated point in the city, county,
and State from which the shipments will be made and from which line-haul
transportation service (as distinguished from switching, local drayage,
or other terminal service) will begin;

\(ii\) To, and placed on, the carrier\'s wharf (at shipside within reach
of the ship\'s loading tackle when the shipping point is within a port
area having water transportation service) or the carrier\'s freight
station;

\(iii\) To a U.S. Postal Service facility; or

\(iv\) If stated in the SIR, to any Government-designated point located
within the same city or commercial zone as the f.o.b. origin point
specified in the contract (commercial zones are prescribed by the
Interstate Commerce Commission at 49 CFR 1048).

\(2\) An allowance for freight, based on applicable published tariff
rates (or Government rate tenders) between the points specified in the
contract, is deducted from the contract price.

\(b\) The Contractor shall\--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment in
conformance with carrier requirements to protect the goods and to ensure
assessment of the lowest applicable transportation charge;

\(2\) (i) Order specified carrier equipment when requested by the
Government; or

\(ii\) If not specified, order appropriate carrier equipment not in
excess of capacity to accommodate shipment;

\(3\) Deliver the shipment in good order and condition to the carrier,
and load, stow, trim, block, and/or brace carload or truckload shipment
(when loaded by the Contractor) on or in the carrier\'s conveyance as
required by carrier rules and regulations;

\(4\) Be responsible for any loss of and/or damage to the goods\--

\(i\) Occurring before delivery to the carrier;

\(ii\) Resulting from improper packing and marking; or

\(iii\) Resulting from improper loading, stowing, trimming, blocking,
and/or bracing of the shipment, if loaded by the Contractor on or in the
carrier\'s conveyance;

\(5\) Complete the Government bill of lading supplied by the Federal
Aviation Administration, (FAA), or when a Government bill of lading is
not supplied, prepare a commercial bill of lading or other
transportation receipt. The bill of lading shall show\--

\(i\) A description of the shipment in terms of the governing freight
classification or tariff (or Government rate tender) under which lowest
freight rates are applicable;

\(ii\) The seals affixed to the conveyance with their serial numbers or
other identification;

\(iii\) Lengths and capacities of cars or trucks ordered and furnished;

\(iv\) Other pertinent information required to effect prompt delivery to
the consignee, including name, delivery address, postal address and ZIP
code of consignee, routing, etc.;

\(v\) Special instructions or annotations requested by the FAA for
commercial bills of lading; e.g.,

\(A\) \"To be converted to a Government bill of lading,\" or

\(B\) \"This shipment is the property of, and the freight charges paid
to the carrier(s) will be reimbursed by, the Government\"; and

\(vi\) The signature of the carrier\'s agent and the date the shipment
is received by the carrier; and

\(6\) Distribute the copies of the bill of lading, or other
transportation receipts, as directed by the FAA.

\(c\) These Contractor responsibilities are specified for performance at
the plant or plants at which the supplies are to be finally inspected
and accepted, unless the facilities for shipment by carrier\'s equipment
are not available at the Contractor\'s plant, in which case the
responsibilities shall be performed f.o.b. the point or points in the
same or nearest city where the specified carrier\'s facilities are
available; subject, however, to the following qualifications:

\(1\) If the Contractor\'s shipping plant is located in the State of
Alaska or Hawaii, the Contractor shall deliver the supplies listed for
shipment outside Alaska or Hawaii to the port of loading in Alaska or
Hawaii, respectively, as specified in the contract, at Contractor\'s
expense, and to that extent the contract shall be \"f.o.b.
destination.\"

\(2\) Notwithstanding subparagraph (c)(1) of this clause, if the
Contractor\'s shipping plant is located in the State of Hawaii, and the
contract requires delivery to be made by container service, the
Contractor shall deliver the supplies, at Contractor\'s expense, to the
container yard in the same or nearest city where seavan container
service is available.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the delivery term is f.o.b.
origin, freight allowed.

**3.11-32** **F.O.B. Origin, Freight Prepaid** (April 1999)

\(a\) The term \"f.o.b. origin, freight prepaid,\" as used in this
clause, means\--

\(1\) Free of expense to the Government delivered\--

\(i\) On board the indicated type of conveyance of the carrier (or of
the Government, if specified) at a designated point in the city, county,
and State from which the shipments will be made and from which line-haul
transportation service (as distinguished from switching, local drayage,
or other terminal service) will begin;

\(ii\) To, and placed on, the carrier\'s wharf (at shipside, within
reach of the ship\'s loading tackle, when the shipping point is within a
port area having water transportation service) or the carrier\'s freight
station;

\(iii\) To a U.S. Postal Service facility; or

\(iv\) If stated in the SIR, to any Government-designated point located
within the same city or commercial zone as the f.o.b. origin point
specified in the contract (commercial zones are prescribed by the
Interstate Commerce Commission at 49 CFR 1048); and

\(2\) The cost of transportation, ultimately the Government\'s
obligation, is prepaid by the contractor to the point specified in the
contract.

\(b\) The Contractor shall\--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment in
conformance with carrier requirements to protect the goods and to ensure
assessment of the lowest applicable transportation charge;

\(2\) (i) Order specified carrier equipment when requested by the
Government; or

\(ii\) If not specified, order appropriate carrier equipment not in
excess of capacity to accommodate shipment;

\(3\) Deliver the shipment in good order and condition to the carrier,
and load, stow, trim, block, and/or brace carload or truckload shipment
(when loaded by the Contractor) on or in the carrier\'s conveyance as
required by carrier rules and regulations;

\(4\) Be responsible for any loss of and/or damage to the goods\--

\(i\) Occurring before delivery to the carrier;

\(ii\) Resulting from improper packing or marking; or

\(iii\) Resulting from improper loading, stowing, trimming, blocking,
and/or bracing of the shipment, if loaded by the Contractor on or in the
carrier\'s conveyance;

\(5\) Prepare a commercial bill of lading or other transportation
receipt. The bill of lading shall show \--

\(i\) A description of the shipment in terms of the governing freight
classification or tariff (or Government rate tender) under which lowest
freight rates are applicable;

\(ii\) The seals affixed to the conveyance with their serial numbers or
other identification;

\(iii\) Lengths and capacities of cars or trucks ordered and furnished;

\(iv\) Other pertinent information required to effect prompt delivery to
the consignee, including name, delivery address, postal address and ZIP
code of consignee, routing, etc.;

\(v\) Special instructions or annotations requested by the Federal
Aviation Administration, (FAA), for commercial bills of lading; e.g.,\--

\(A\) \"To be converted to a Government bill of lading,\" or

\(B\) \"This shipment is the property of, and the freight charges paid
to the carrier(s) will be reimbursed by, the Government\"; and

\(vi\) The signature of the carrier\'s agent and the date the shipment
is received by the carrier;

\(6\) Distribute the copies of the bill of lading, or other
transportation receipts, as directed by the FAA; and

\(7\) Prepay all freight charges to the extent specified in the
contract.

\(c\) These Contractor responsibilities are specified for performance at
the plant or plants at which these supplies are to be finally inspected
and accepted, unless the facilities for shipment by carrier\'s equipment
are not available at the Contractor\'s plant, in which case the
responsibilities shall be performed f.o.b. the point or points in the
same or nearest city where the specified carrier\'s facilities are
available; subject, however, to the following qualifications:

\(1\) If the Contractor\'s shipping plant is located in the State of
Alaska or Hawaii, the Contractor shall deliver the supplies listed for
shipment outside Alaska or Hawaii to the port of loading in Alaska or
Hawaii, respectively, as specified in the contract, at Contractor\'s
expense, and to that extent the contract shall be \"f.o.b.
destination.\"

\(2\) Notwithstanding subparagraph (c)(1) of this clause, if the
Contractor\'s shipping plant is located in the State of Hawaii, and the
contract requires delivery to be made by container service, the
Contractor shall deliver the supplies, at Contractor\'s expense to the
container yard in the same or nearest city where seavan container
service is available.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the delivery term is f.o.b.
origin, freight prepaid.

**3.11-33** **F.O.B. Origin With Differentials** (April 1999)

\(a\) The term \"f.o.b. origin, with differentials,\" as used in this
clause, means\--

\(1\) Free of expense to the Government delivered\--

\(i\) On board the indicated type of conveyance of the carrier (or of
the Government, if specified) at a designated point in the city, county,
and State from which the shipments will be made and from which line-haul
transportation service (as distinguished from switching, local drayage,
or other terminal service) will begin;

\(ii\) To, and placed on, the carrier\'s wharf (at shipside, within
reach of the ship\'s loading tackle, when the shipping point is within a
port area having water transportation service) or the carrier\'s freight
station;

\(iii\) To a U.S. Postal Service facility; or

\(iv\) If stated in the SIR, to any Government-designated point located
within the same city or commercial zone as the f.o.b. origin point
specified in the contract (commercial zones are prescribed by the
Interstate Commerce Commission at 49 CFR 1048); and

\(2\) Differentials for mode of transportation, type of vehicle, or
place of delivery as indicated in Contractor\'s offer may be added to
the contract price.

\(b\) The Contractor shall\--

\(1\) (i) Pack and mark the shipment to comply with contract
specification; or

\(ii\) In the absence of specifications, prepare the shipment in
conformance with carrier requirements to protect the goods and to ensure
assessment of the lowest applicable transportation charge;

\(2\) (i) Order specified carrier equipment when requested by the
Government; or

\(ii\) If not specified, order appropriate carrier equipment not in
excess of capacity to accommodate shipment;

\(3\) Deliver the shipment in good order and condition to the carrier,
and load, stow, trim, block, and/or brace carload or truckload shipment
(when loaded by the Contractor) on or in the carrier\'s conveyance as
required by carrier rules and regulations;

\(4\) Be responsible for any loss of and/or damage to the goods\--

\(i\) Occurring before delivery to the carrier;

\(ii\) Resulting from improper packing and marking; or

\(iii\) Resulting from improper loading, stowing, trimming, blocking,
and/or bracing of the shipment, if loaded by the Contractor on or in the
carrier\'s conveyance;

\(5\) Complete the Government bill of lading supplied by the Federal
Aviation Administration, (FAA), or, when a Government bill of lading is
not supplied, prepare a commercial bill of lading or other
transportation receipt. The bill of lading shall show\--

\(i\) A description of the shipment in terms of the governing freight
classification or tariff (or Government rate tender) under which lowest
freight rates are applicable;

\(ii\) The seals affixed to the conveyance with their serial numbers or
other identification;

\(iii\) Lengths and capacities of cars or trucks ordered and furnished;

\(iv\) Other pertinent information required to effect prompt delivery to
the consignee, including name, delivery address, postal address and ZIP
code of consignee, routing, etc.;

\(v\) Special instructions or annotations requested by the FAA for
commercial bills of lading; e.g.,\--

\(A\) \"To be converted to a Government bill of lading,\" or

\(B\) \"This shipment is the property of, and the freight charges paid
to the carrier(s) will be reimbursed by, the Government\"; and

\(vi\) The signature of the carrier\'s agent and the date the shipment
is received by the carrier; and

\(6\) Distribute the copies of the bill of lading, or other
transportation receipts, as directed by the FAA.

\(c\) (1) It may be advantageous to the offeror to submit f.o.b. origin
prices that include only the lowest cost to the Contractor for loading
of shipment at the Contractor\'s plant or most favorable shipping point.
The cost beyond that plant or point of bringing the supplies to the
place of delivery and the cost of loading, blocking, and bracing on the
type vehicle specified by the Government at the time of shipment may
exceed the offeror\'s lowest cost when the offeror ships for the
offeror\'s account. Accordingly, the offeror may indicate differentials
that may be added to the offered price. These differentials shall be
expressed as a rate in cents for each 100 pounds (CWT) of the supplies
for one or more of the options under this clause that the Government may
specify at the time of shipment.

\(2\) The differential(s) will be considered in the evaluation of offers
to determine the lowest overall cost to the Government. If, at the time
of shipment, the Government specifies (normally on a Government bill of
lading) a mode of transportation, type of vehicle, or place of delivery
for which the offeror has set forth a differential, the Contractor shall
include the total of such differential costs (the applicable
differential multiplied by the actual weight on the Government bill of
lading) as a separate reimbursable item on the Contractor\'s invoice for
the supplies.

\(3\) The Government shall have the option of performing or arranging at
its own expense any transportation from Contractor\'s shipping plant or
point to carrier\'s facility at the time of shipment and, whenever this
option is exercised, the Government shall make no reimbursement based on
a quoted differential.

\(4\) Offeror\'s differentials in cents for each 100 pounds for optional
mode of transportation, types of vehicle, transportation within a mode,
or place of delivery, specified by the Government at the time of
shipment and not included in the f.o.b. origin price indicated in the
Schedule by the offeror, are as follows: (carload, truckload, less-than
truckload, wharf, flatcar, driveaway, etc.)

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the delivery term is f.o.b.
origin, with differentials when it is likely offerors may include in
f.o.b. origin offers a contingency to compensate for unfavorable routing
conditions by the Government at the time of shipment.

**3.11-34** **F.O.B. Destination** (April 1999)

\(a\) The term \"f.o.b. destination,\" as used in this clause, means\--

\(1\) Free of expense to the Government, on board the carrier\'s
conveyance, at a specified delivery point where the consignee\'s
facility (plant, warehouse, store, lot, or other location to which
shipment can be made) is located; and

\(2\) Supplies shall be delivered to the destination consignee\'s wharf
(if destination is a port city and supplies are for export), warehouse
unloading platform, or receiving dock, at the expense of the Contractor.
The Government shall not be liable for any delivery, storage, demurrage,
accessorial, or other charges involved before the actual delivery (or
\"constructive placement\" as defined in carrier tariffs) of the
supplies to the destination, unless such charges are caused by an act or
order of the Government acting in its contractual capacity. If rail
carrier is used, supplies shall be delivered to the specified unloading
platform of the consignee. If motor carrier (including \"piggyback\") is
used, supplies shall be delivered to truck tailgate at the unloading
platform of the consignee, except when the supplies delivered meet the
requirements of Item 568 of the National Motor Freight Classification
for \"heavy or bulky freight.\" When supplies meeting the requirements
of the referenced Item 568 are delivered, unloading (including movement
to the tailgate) shall be performed by the consignee, with assistance
from the truck driver, if requested. If the Contractor uses rail carrier
or freight forwarded for less than carload shipments, the Contractor
shall ensure that the carrier will furnish tailgate delivery, when
required if transfer to truck is required to complete delivery to
consignee.

\(b\) The Contractor shall\--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment in
conformance with carrier requirements;

\(2\) Prepare and distribute commercial bills of lading;

\(3\) Deliver the shipment in good order and condition to the point of
delivery specified in the contract;

\(4\) Be responsible for any loss of and/or damage to the goods
occurring before receipt of the shipment by the consignee at the
delivery point specified in the contract;

\(5\) Furnish a delivery schedule and designate the mode of delivering
carrier; and

\(6\) Pay and bear all charges to the specified point of delivery.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the delivery term is f.o.b.
destination.

**3.11-35** **F.O.B. Destination, Within Consignee\'s Premises** (April
1999)

\(a\) The term \"f.o.b. destination, within consignee\'s premises,\" as
used in this clause, means free of expense to the Government delivered
and laid down within the doors of the consignee\'s premises, including
delivery to specific rooms within a building if so specified.

\(b\) The Contractor shall\--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment in
conformance with carrier requirements;

\(2\) Prepare and distribute commercial bills of lading;

\(3\) Deliver the shipment in good order and condition to the point of
delivery specified in the contract;

\(4\) Be responsible for any loss of and/or damage to the goods
occurring before receipt of the shipment by the consignee at the
delivery point specified in the contract;

\(5\) Furnish a delivery schedule and designate the mode of delivering
carrier; and

\(6\) Pay and bear all charges to the specified point of delivery.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the delivery term is f.o.b.
destination, within consignee\'s premises.

**3.11-36** **F.A.S. Vessel, Port of Shipment** (April 1999)

\(a\) The term \"f.a.s. vessel, port of shipment,\" as used in this
clause, means free of expense to the Government delivered alongside the
ocean vessel and within reach of its loading tackle at the specified
port of shipment.

\(b\) The Contractor shall \--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment for ocean
transportation in conformance with carrier requirements to protect the
goods and to ensure assessment of the lowest applicable transportation
charge;

\(2\) (i) Deliver the shipment in good order and condition alongside the
ocean vessel and within reach of its loading tackle, at the point of
delivery and on the date or within the period specified in the contract;
and

\(ii\) Pay and bear all applicable charges, including transportation
costs, wharfage, handling, and heavy lift charges, if necessary, up to
this point;

\(3\) Provide a clean dock or ship\'s receipt;

\(4\) Be responsible for any loss of and/or damage to the goods
occurring before delivery of the shipment to the point specified in the
contract; and

\(5\) At the Government\'s request and expense, assist obtaining the
documents required for

\(i\) Exportation; or

\(ii\) Importation at destination.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the delivery term is f.a.s.
vessel, port of shipment.

**3.11-37** **F.O.B. Vessel, Port of Shipment** (April 1999)

\(a\) The term \"f.o.b. vessel, port of shipment,\" as used in this
clause, means free of expense to the Government loaded, stowed, and
trimmed on board the ocean vessel at the specified port of shipment.

\(b\) The Contractor shall \--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment for ocean
transportation in conformance with carrier requirements to protect the
goods and to ensure assessment of the lowest applicable transportation
charge;

\(2\) (i) Deliver the shipment on board the ocean vessel in good order
and condition on the date or within the period fixed; and

\(ii\) Pay and bear all charges incurred in placing the shipment
actually on board;

\(3\) Provide a clean ship\'s receipt or on-board ocean bill of lading;

\(4\) Be responsible for any loss of and/or damage to the goods
occurring before delivery of the shipment on board the ocean vessel; and

\(5\) At the Government\'s request and expense, assist in obtaining the
documents required for \--

\(i\) Exportation; or

\(ii\) Importation at destination.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the delivery term is f.a.s.
vessel. Port of shipment.

**3.11-38** **F.O.B. Inland Carrier, Point of Exportation** (April 1999)

\(a\) The term \"f.o.b. inland carrier, point of exportation,\" as used
in this clause, means free of expense to the Government, on board the
conveyance of the inland carrier, delivered to the specified point of
exportation.

\(b\) The Contractor shall \--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment for ocean
transportation in conformance with carrier requirements to protect the
goods and to ensure assessment of the lowest applicable transportation
charge;

\(2\) Prepare and distribute commercial bills of lading;

\(3\) (i) Deliver the shipment in good order and condition in or on the
conveyance of the carrier on the date or within the period specified;
and

\(ii\) Pay and bear all applicable charges, including transportation
costs, to the point of delivery specified in the contract;

\(4\) Be responsible for any loss of and/or damage to the goods
occurring before delivery of the shipment to the point of delivery in
the contract; and

\(5\) At the Government\'s request and expense, assist in obtaining the
documents required for \--

\(i\) Exportation; or

\(ii\) Importation at destination.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the delivery term is f.o.b.
inland carrier, point of exportation.

**3.11-39** **F.O.B. Inland Point, Country of Importation** (April 1999)

\(a\) The term \"f.o.b. inland point, country of importation,\" as used
in this clause, means free of expense to the Government, on board the
indicated type of conveyance of the carrier, delivered to the specified
inland point where the consignee\'s facility is located.

\(b\) The Contractor shall\--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment for ocean
transportation in conformance with carrier requirements to protect the
goods;

\(2\) (i) Deliver, in or on the inland carrier\'s conveyance, the
shipment in good order and condition to the specified inland point where
the consignee\'s facility is located; and

\(ii\) Pay and bear all applicable charges incurred up to the point of
delivery, including transportation costs; export, import, or other fees
or taxes; costs of landing; wharfage costs; customs duties and costs of
certificates of origin; consular invoices; and other documents that may
be required for importation; and

\(3\) Be responsible for any loss of and/or damage to the goods until
their arrival on or in the carrier\'s conveyance at the specified inland
point.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the delivery term is f.o.b.
inland point country of importation.

**3.11-40** **Ex Dock, Pier, or Warehouse, Port of Importation** (April
1999)

\(a\) The term \"ex dock, pier, or warehouse, port of importation,\" as
used in this clause, means free of expense to the Government delivered
on the designated dock or pier or in the warehouse at the specified port
of importation.

\(b\) The Contractor shall \--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment for ocean
transportation in conformance with carrier requirements to protect the
goods;

\(2\) (i) Deliver shipment in good order and condition; and

\(ii\) Pay and bear all charges up to the point of delivery specified in
the contract, including transportation costs; export, import, or other
fees or taxes; costs of wharfage and landing, if any; customs duties;
and costs of certificates of origin, consular invoices, or other
documents that may be required for exportation or importation; and

\(3\) Be responsible for any loss of and/or damage to the goods
occurring before delivery of the shipment to the point of delivery
specified in the contract.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the delivery term is ex dock,
pier, or warehouse, port of importation.

**3.11-41** **C. & F. Destination** (April 1999)

\(a\) The term \"c.& f. destination,\" as used in this clause, means
free of expense to the Government delivered on board the ocean vessel to
the specified point of destination, with the cost of transportation paid
by the Contractor.

\(b\) The Contractor shall \--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment for ocean
transportation in conformance with carrier requirements;

\(2\) (i) Deliver the shipment in good order and condition; and

\(ii\) Pay and bear all applicable charges to the point of destination
specified in the contract, including transportation costs and export
taxes or other fees or charges levied because of exportation;

\(3\) Obtain and dispatch promptly to the Government clean on-board
ocean bills of lading to the specified point of destination;

\(4\) Be responsible for any loss of and/or damage to the goods
occurring before delivery; and

\(5\) At the Government\'s request and expense, provide certificates of
origin, consular invoices, or any other documents issued in the country
of origin or of shipment, or both, that may be required for importation
into the country of destination.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when delivery term is c.&f.
destination.

**3.11-42** **C.I.F. Destination** (April 1999)

\(a\) The term \"c.i.f. destination,\" as used in this clause, means
free of expense to the Government delivered on board the ocean vessel to
the specified point of destination, with the cost of transportation and
marine insurance paid by the Contractor.

\(b\) The Contractor shall \--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment for ocean
transportation in conformance with carrier requirements;

\(2\) (i) Deliver the shipment in good order and condition; and

\(ii\) Pay and bear all applicable charges to the point of destination
specified in the contract, including transportation costs and export
taxes or other fees or charges levied because of exportation;

\(3\) Obtain and dispatch promptly to the Government clean on-board
ocean bills of lading to the specified point of destination;

\(4\) Be responsible for any loss of and/or damage to the goods
occurring before delivery;

\(5\) At the Government\'s request and expense, provide certificates of
origin, consular invoices, or any other documents issued in the country
of origin or of shipment, or both, that may be required for importation
into the country of destination; and

\(6\) Obtain and dispatch to the Government an insurance policy or
certificate providing the amount and extent of marine insurance coverage
specified in the contract or agreed upon by the Government Contracting
Officer.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the delivery term is c.i.f.
destination.

**3.11-43** **F.O.B. Designated Air Carrier\'s Terminal, Point of
Exportation** (April 1999)

\(a\) The term \"f.o.b. designated air carrier\'s terminal, point of
exportation,\" as used in this clause, means free of expense to the
Government loaded aboard the aircraft, or delivered to the custody of
the air carrier (if only the air carrier performs the loading), at the
air carrier\'s terminal specified in the contract.

\(b\) The Contractor shall \--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment for air
transportation in conformance with carrier requirements to protect the
goods and to ensure assessment of the lowest applicable transportation
charge;

\(2\) (i) Deliver the shipment in good order and condition into the
conveyance of the carrier, or to the custody of the carrier (if only the
carrier performs the loading), at the point of delivery and on the date
or within the period specified in the contract; and

\(ii\) Pay and bear all applicable charges up to this point;

\(3\) Provide a clean Government bill of lading and/or air waybill;

\(4\) Be responsible for any loss of and/or damage to the goods
occurring before delivery of the goods to the point specified in the
contract; and

\(5\) At the Government\'s request and expense, assist in obtaining the
documents required for the purpose of exportation.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when the delivery term is f.o.b.
designated air carrier\'s terminal, point of exportation.

**3.11-44** **F.O.B. Designated Air Carrier\'s Terminal, Point of
Importation** (April 1999)

\(a\) The term \"f.o.b. designated air carrier\'s terminal, point of
importation,\" as used in this clause, means free of expense to the
Government delivered to the air carrier\'s terminal at the point of
importation specified in the contract.

\(b\) The Contractor shall \--

\(1\) (i) Pack and mark the shipment to comply with contract
specifications; or

\(ii\) In the absence of specifications, prepare the shipment for air
transportation in conformance with carrier requirements to protect the
goods;

\(2\) Prepare and distribute bills of lading or air waybills;

\(3\) (i) Deliver the shipment in good order and condition to the point
of delivery specified in the contract; and

\(ii\) Pay and bear all charges incurred up to the point of delivery
specified in the contract, including transportation costs; export,
import, or other fees or taxes; cost of landing, if any; customs duties;
and costs of certificates of origin, consular invoices, or other
documents that may be required for exportation or importation; and

\(4\) Be responsible for any loss of and/or damage to the goods until
delivery of the goods to the Government at the designated air carrier\'s
terminal.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when he delivery term is f.o.b.
designated air carrier\'s terminal, point of importation.

**3.11-45** **F.O.B. Origin and/or F.O.B. Destination Evaluation**
(April 1999)

Offers are invited on the basis of both f.o.b. origin and f.o.b.
destination, and the Government will award on the basis the Contracting
Officer determines to be most advantageous to the Government. An offer
on the basis of f.o.b. origin only or f.o.b. destination only is
acceptable, but will be evaluated only on the basis submitted.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s when offers are solicited on the basis of both
f.o.b. origin and f.o.b. destination.

**3.11-46** **Shipping Point(s) Used in Evaluation of F.O.B. Origin
Offers** (April 1999)

\(a\) If more than one shipping point or plant is designated by the
offeror and the offeror fails to indicate the quantity per shipping
point or plant before bid opening, the Government will evaluate the
offer on the basis of delivery of the entire quantity from the point or
plant where cost of transportation is most favorable to the Government.

\(b\) If the offeror, before bid opening (or the closing date specified
for receipt of offers) fails to indicate any shipping point or plant,
the Government will evaluate the offer on the basis of delivery from the
plant at which the contract will be performed, as indicated in the
offer. If no plant is indicated in the offer, the offer will be
evaluated on the basis of delivery from the Contractor\'s business
address indicated in the offer.

\(c\) If the offeror uses a shipping point other than that which has
been used by the Government as a basis for the evaluation of offers, any
increase of transportation costs shall be borne by the Contractor and
any saving shall revert to the Government.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s when price evaluation for shipments from various
shipping points is contemplated.

**3.11-47** **Evaluation- F.O.B. Origin** (April 1999)

Land methods of transportation by regulated common carrier are the
normal means of transportation used by the Government for shipment
within the United States (excluding Alaska and Hawaii). Accordingly, for
the purpose of evaluating offers, only these methods will be considered
in establishing the cost of transportation between offeror\'s shipping
point and destination (tentative or firm, whichever is applicable) in
the United States (excluding Alaska and Hawaii). This transportation
cost will be added to the offer price in determining the overall cost of
the supplies to the Government. When tentative destinations are
indicated, they will be used only for evaluation purposes, the
Government having the right to use any other means of transportation or
any other destination at the time of shipment.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s that require prices f.o.b. origin for the
purpose of establishing the basis on which offers will be evaluated.

**3.11-48** **F.O.B. Destination- Evidence of Shipment** (April 1999)

\(a\) If this contract is awarded on an f.o.b. destination basis and if
transportation is accomplished by \--

\(1\) Common carrier, the Contractor agrees to furnish in support of the
Contractor\'s invoice, a copy of the signed commercial bill of lading
indicating the carrier\'s receipt of the supplies covered by the invoice
for transportation to the destination specified in the contract;

\(2\) Parcel post, the Contractor agrees to furnish a certificate of
mailing with the Contractor\'s invoice; and

\(3\) Other than common carrier or parcel post, the Contractor agrees to
attach to the Contractor\'s invoice a receipted copy of the appropriate
delivery document showing receipt at the destination specified in the
contract.

\(b\) Electronic transmission of the information required by paragraph
(a) of this clause is acceptable.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when supplies will or may be
purchased f.o.b. destination but inspection and acceptance will be at
origin.

**3.11-49** **Destination Unknown** (April 1999)

For the purpose of evaluating offers and for no other purpose, the final
destination(s) for the supplies will be considered to be as follows:
\[CO insert appropriate information\]

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s when destinations are tentative and only for the
purpose of evaluating offers.

CO to insert information

**3.11-50** **No Evaluation of Transportation Costs** (April 1999)

Costs of transporting supplies to be delivered under this contract will
not be an evaluation factor for award.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s when exact destinations are not known and it is
impractical to establish tentative or general delivery places for the
purpose of evaluating transportation costs.

**3.11-51** **Evaluation of Export Offerors** (April 1999)

\(a\) Port handling and ocean charges\--other than DOD water terminals.
Port handling and ocean charges in tariffs on file with the Federal
Maritime Commission or other appropriate regulatory authorities as of
the date of bid opening (or the closing date specified for receipt
offers) and which will be effective for the date of the expected initial
shipment will be used in the evaluation of offers.

\(b\) F.o.b. origin, transportation under Government bill of lading.

\(1\) Offers shall be evaluated and awards made on the basis of the
lowest laid down cost to the Government at the overseas port of
discharge, via methods and ports compatible with required delivery dates
and conditions affecting transportation known at the time of evaluation.
Included in this evaluation, in addition to the f.o.b. origin price of
the item, shall be the inland transportation costs from the point of
origin in the United States to the port of loading, port handling
charges at the port of loading, and ocean shipping costs from the United
States port of loading (see paragraph (d) of this clause) to the
overseas port of discharge. The Government may designate the mode of
routing of shipment and may load from other than those ports specified
for evaluation purposes.

\(2\) Offers shall be evaluated on the basis of shipment through one of
the ports set forth in paragraph (d) of this clause to the overseas port
of discharge. Evaluation shall be made on the basis of shipment through
the port that will result in the lowest cost to the Government.

\(3\) Ports of loading shall be considered as destinations within the
meaning of the term \"f.o.b. destination\" as that term is used in the
F.o.b. Origin clause of this contract.

\(c\) F.o.b. port of loading with inspection and acceptance at origin.

\(1\) F.o.b. port of loading with inspection and acceptance at origin.
Offers shall be evaluated on the basis of the lowest laid down cost to
the Government at the overseas port of discharge via methods compatible
with required delivery dates and conditions affecting transportation
known at the time of evaluation. Included in this evaluation, in
addition to the price to the United States port of loading (see
paragraph (c)(2) of this clause), shall be the port handling charges at
the port of loading and the ocean shipping cost from the port of loading
(see paragraph (d) of this clause) to the overseas port of discharge.

\(2\) Unless offers are applicable only to f.o.b. origin delivery under
Government bills of lading (see paragraph (b) of this clause), offerors
shall designate below at least one of the ports of loading listed in
paragraph (d) of this clause as their place of delivery. Failure to
designate at least one of the ports as the point to which delivery will
be made by the Contractor may render the offer non responsive. PLACE OF
DELIVERY \[Offerors insert at least one of the ports listed in paragraph
(d) of this clause.\]

\(d\) Ports of loading for evaluation of offers. Terminals to be used by
the Government in evaluating offers are as follows: (For the information
of the offerors, ocean and port handling charges are set forth if the
terminal named is a DOD water terminal.)\[CO to insert information\]

Ports/Terminals of Loading

Combined Ocean and Port Handling Charges to (Indicate Country)

Unit of measure; i.e. metric ton, measurement ton, cubic foot, etc.

\(e\) Ports of loading nominated by offeror. The ports of loading named
in paragraph (d) of this clause are considered by the Government to be
appropriate for this SIR due to their compatibility with methods and
facilities required to handle the cargo and types of vessels and to meet
the required overseas delivery dates. Notwithstanding the foregoing,
offerors may nominate additional ports of loading that the offeror
considers to be more favorable to the Government. The Government may
disregard such nominated ports if, after considering the quantity and
nature of the supplies concerned, the requisite cargo handling
capability, the available sailing\'s on U.S.-flag vessels, and other
pertinent transportation factors, it determines that use of the
nominated ports is not compatible with the required overseas delivery
date. United States Great Lakes ports of loading may be considered in
the evaluation of offers only for those items scheduled for delivery
during the ice-free or navigable period as proclaimed by the authorities
of the St. Lawrence Seaway (normal period is between April 15 and
November 30 annually). All ports named, including those nominated by
offerors and determined to be eligible as provided in this provision,
shall be considered in evaluating all offers received in order to
establish the lowest laid down cost to the Government at the overseas
port of discharge. All determinations shall be based on availability of
ocean services by U.S.-flag vessels only. Additional U.S. port(s) of
loading nominated by offeror, if any:

\(f\) Price basis: Offeror shall indicate whether prices are based on
\--

\[ \] Paragraph (b), f.o.b. origin, transportation by GBL to port listed
in paragraph (d);

\[ \] Paragraph (c), f.o.b. destination (i.e., a port listed in
paragraph (d));

\[ \] Paragraph (e), f.o.b. origin, transportation by GBL to port
nominated in paragraph (e); and/or

\[ \] Paragraph (e), f.o.b. destination (i.e., a port nominated in
paragraph (e)).

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s when supplies are to be protected through CONUS
ports and offers are solicited on a f.o.b. origin or f.o.b. destination
basis.

CO to insert information.

**3.11-51/alt1** **Evaluation of Export Offers** (April 1999)

Delete paragraph (a) from the basic clause and substitute the following
Paragraph (a):

\(a\) Port handling and ocean charges\--DOD water terminals. The port
handling and ocean charges are set forth in paragraph (d) of this
provision for the information of offerors and are current as of the time
of issuance of the solicitation. For evaluation of offers, the
Government will use the port handling and ocean charges made available
by the Directorate of International Traffic, Military Traffic Management
Command rate information letters, on file as of the date bid opening (or
the closing date specified for receipt of offers) and which will be
effective for the date of the expected initial shipment.

PRESCRIPTION:

Shall be used In SIR\'s when supplies are to be protected through CONUS
ports of export that are DOD water terminals and offers are solicited on
a f.o.b. origin or f.o.b. destination basis.

**3.11-51/alt2** **Evaluation of Export Offers** (April 1999)

Delete paragraphs (c) and (f) from the basic provision, but do not
designate the ensuing paragraphs. Add the following basic paragraph (g)
to the provision:

\(g\) Paragraphs (c) and (f) have been deleted but ensuing paragraphs
have not been designated

PRESCRIPTION:

Shall be used in SIR\'s when supplies are to be protected through CONUS
ports and offers are solicited on a f.o.b. origin basis

**3.11-51/alt3** **Evaluation of Export Offers** (April 1999)

Delete paragraph (b) from the basic provision but do not designate the
ensuing paragraphs. Delete subparagraph (c)(2) and paragraph (f) from
the provision and substitute the following subparagraph (c)(2) and
paragraph (f). Add paragraph (g) below.

(c)(2) Offerors shall designate below at least one of the ports of
loading listed in paragraph (d) below as their place of delivery.
Failure to designate at least one of the ports as the point to which
delivery will be made by the Contractor may render the offer
nonresponsive.

PLACE OF DELIVERY: \[Offerors insert at least one of the ports listed in
paragraph (d) of this clause.\]

\(f\) Price basis. Offerors shall indicate whether prices are based
on\--

\[ \] Paragraph (c), f.o.b. destination (i.e., a port listed in
paragraph (d)); or

\[ \] Paragraph (e), f.o.b. destination (i.e., a port nominated in
paragraph (e)).

\(g\) Paragraph (b) has been deleted, but ensuing paragraphs have not
been designated.

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s when supplies are to be protected through CONUS
ports and offers are solicited on a f.o.b. destination basis

**3.11-52** **Freight Classification Description** (April 1999)

Offerors are requested to indicate below the full Uniform Freight
Classification (rail) description, or the National Motor Freight
Classification description applicable to the supplies, the same as
offeror uses for commercial shipment. This description should include
the packing of the commodity (box, crate, bundle, loose, setup, knocked
down, compressed, unwrapped, etc.), the container material (fiberboard,
wooden, etc.), unusual shipping dimensions, and other conditions
affecting traffic descriptions. The Government will use these
descriptions as well as other information available to determine the
classification description most appropriate and advantageous to the
Government. Offeror understands that shipments on any f.o.b. origin
contract awarded, as a result of this solicitation, will be made in
conformity with the shipping classification description specified by the
Government, which may be different from the classification description
furnished below.

FOR FREIGHT CLASSIFICATION PURPOSES, OFFEROR DESCRIBES THIS COMMODITY
AS: \[Offeror to insert information\].

(End of provision)

PRESCRIPTION:

Shall be used in SIR\'s when the supplies being acquired are new to the
supply system, nonstandard, or modifications of previously shipped
items,, and different freight classifications may apply.

CO to insert information

**3.11-53** **F.O.B. Point for Delivery of Government Furnished
Property** (April 1999)

\(a\) Unless otherwise specified in this SIR, any Government property
furnished to the Contractor for use within the United States (excluding
Alaska and Hawaii) or Canada will be delivered by the Government at a
point to be specified by the Contractor in the offer. Should the
Government elect to make delivery by railroad, the f.o.b. point shall be
private siding, Contractor\'s plant. If the Contractor\'s plant is not
served by rail, the f.o.b. point shall be railroad cars in the same or
nearest city having rail service. All line-haul transportation costs to
the specified destination shall be borne by the Government. The
Government may choose the mode of transportation and the carriers.

\(b\) If the destination of such Government-furnished property is a
Contractor\'s plant located outside the 48 contiguous states, the
District of Columbia or Canada, the f.o.b. point for Government delivery
of Government-furnished property shall be a location in the United
States (excluding Alaska and Hawaii) specified by the Contractor. If the
Contractor fails to name a point, then the f.o.b. point shall be the
port city in the United States nearest to the Government source of the
Government-furnished property that has regular commercial water
transportation services to the offshore port nearest Contractor\'s
plant.

\(c\) Unless otherwise directed by the Contracting Officer or provided
in the contract, the Contractor shall return all Government-furnished
equipment, supplies, and property, including all property not returned
in the form of acceptable end items, to the point at which the
Government property was originally furnished to the Contractor under the
contract. Notwithstanding the fact that the Government may have
furnished the property at the Contractor\'s plant, the Contracting
Officer may direct the Contractor to deliver the Government property
being returned to, and load, block, and brace it in, railway cars in the
city in which the Contractor\'s plant is located, or, if the
Contractor\'s city is not served by rail service, in the nearest city
having rail service. Unless otherwise specified in the contract, all
property shall be packed in containers conforming with the rules of
common carrier published tariffs so as to be free of penalty charges by
the carrier designated for shipment by the Government.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when Government property is to be
furnished under a contract and Government will be responsible for
transportation arrangements and costs.

**3.11-54** **Transit Arrangements** (April 1999)

The lowest appropriate common carrier transportation costs, including
offeror\'s through transit rates and charges when applicable, from
offeror\'s shipping points, via the transit point, to the ultimate
destination will be used in evaluating offers.

\[CO to insert information\]

Transit point(s) Destination(s)

\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_

(End of provision)

PRESCRIPTION:

Shall be used in SIR;s when benefits may accrue to the Government
because transit arrangements may apply.

CO to insert information

**3.11-55** **Transit Privilege Credits** (April 1999)

\(a\) If the offeror has established with regulated common carriers
transit privileges that can be applied to the supplies when shipped from
the original source, the offeror is invited to propose to use these
credits for shipping the supplies to the designated Government
destinations. The offeror will ship these supplies under commercial
bills of lading, paying all remaining transportation charges connected
with the shipment, subject to reimbursement by the Government in an
amount equal to the remaining charges but not exceeding the amount
quoted by the offeror.

\(b\) After loading on the carrier\'s equipment and acceptance by the
carrier, these shipments under paid commercial bills of lading will move
for the account of and at the risk of the Government (unless, pursuant
to the Changes clause, the office administering the contract directs use
of Government bills of lading).

\(c\) The amount quoted below by the offeror represents the
transportation costs in cents per 100 pounds (freight rate) for full
carload/truckload shipments of the supplies from offeror\'s original
source, via offeror\'s transit plant or point, to the Government
destination(s) including the carrier\'s transit privilege charge, less
the applicable transit credit (i.e., the amount (rate) initially paid to
the carrier for shipment from original source to offeror\'s transit
plant or point).

\(d\) The rate per CWT quoted will be used by the Government to evaluate
the offered f.o.b. origin price unless a lower rate is applicable on the
date of bid opening (or closing date specified for receipt of offers).
To have the offer evaluated on this basis, the offeror must insert below
the remaining transportation charges that the offeror agrees to pay,
including any transit charges, subject to reimbursement by the
Government, as explained in this clause, to destinations listed in the
Schedule as follows:

RATE PER CWT IN CENTS: \[Offeror to insert information\].

TO DESTINATION: \[Offeror to insert information\].

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when supplies are of such a
nature, or when it is the custom of the trade, that offerors may have
potential transit credits available and the Government may reduce
transportation costs through the use of transit credits.

**3.11-56** **Loading, Blocking and Bracing of Freight Car Shipments**
(April 1999)

\(a\) Upon receipt of shipping instructions, as provided in this
contract, the supplies to be included in any carload shipment by rail
shall be loaded, blocked, and braced by the Contractor in accordance
with the standards published by the Association of American Railroads
and effective at the time of shipment.

\(b\) Shipments, for which the Association of American Railroads has
published no such standards, shall be loaded, blocked, and braced in
accordance with standards established by the shipper as evidenced by
written acceptance of an authorized representative of the carrier.

\(c\) The Contractor shall be liable for payment of any damage to any
supplies caused by the failure to load, block, and brace in accordance
with acceptable standards set forth herein.

\(d\) A copy of the appropriate pamphlet of the Association of American
Railroads may be obtained from that Association.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when supplies may be shipped in
carload lots by rail.

**3.11-57** **F.O.B. Origin -Carload and Truckload Shipments** (April
1999)

\(a\) The Contractor agrees that shipment shall be made in carload or
truckload lots when the quantity to be delivered to any one destination
in any delivery period pursuant to the contract schedule of deliveries
is sufficient to constitute a carload or truckload shipment, except as
may otherwise be permitted or directed, in writing, by the Contracting
Officer.

\(b\) For evaluation purposes, the agreed weight of a carload or
truckload shall be the highest applicable minimum weight that will
result in the lowest freight rate (or per car charge) on file or
published in common carrier tariffs or tenders as of the date of bid
opening (or the closing date specified for receipt of proposals).

\(c\) For purposes of actual delivery, the agreed weight of a carload or
truckload will be the highest applicable minimum weight that will result
in the lowest possible freight rate (or per car charge) on file or
published as of date of shipment.

\(d\) If the total weight of any scheduled quantity to a destination is
less than the highest carload/truckload minimum weight used for
evaluation of offers, the Contractor agrees to ship such scheduled
quantity in one shipment.

\(e\) The Contractor shall be liable to the Government for any increased
costs to the Government resulting from failure to comply with the above
requirements.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when it is contemplated that they
may result in f.o.b. origin contracts

**3.11-58** **Guaranteed Shipping Characteristics** (April 1999)

\(a\) The offeror is requested to complete subparagraph (a)(1) of this
clause, for each part or component which is packed or packaged
separately. This information will be used to determine transportation
costs for evaluation purposes. If the offeror does not furnish
sufficient data in subparagraph (a)(1) of this clause, to permit
determination by the Government of the item shipping costs, evaluation
will be based on the shipping characteristics submitted by the offeror
whose offer produces the highest transportation costs or in the absence
thereof, by the Contracting Officer\'s best estimate of the actual
transportation costs. If the item shipping costs, based on the actual
shipping characteristics, exceed the item shipping costs used for
evaluation purposes, the Contractor agrees that the contract price shall
be reduced by an amount equal to the difference between the
transportation costs actually incurred, and the costs which would have
been incurred if the evaluated shipping characteristics had been
accurate.

\(1\) \[Offeror to provide the following information\]:

\(i\) Type of container: Wood Box \[ \], Fiber Box \[ \], Barrel \[ \],
Reel \[ \], Drum \[ \], Other (Specify);

\(ii\) Shipping configuration: Knocked-down \[ \], Set-up\[ \], Nested
\[ \], Other (specify);

\(iii\) Size of container: \" (Length), x \" (Width), x \" (Height) =
Cubic FT;

\(iv\) Number of items per container each;

\(v\) Gross weight of container and contents Lbs;

\(vi\) Palletized/skidded \[ \]Yes \[ \] No;

\(vii\) Number of containers per pallet/skid;

\(viii\) Weight of empty pallet bottom/skid and sides Lbs;

\(ix\) Size of pallet/skid and contents Lbs Cube;

\(x\) Number of containers or pallets/skids per railcar \_\_\_\_\_\* \--

Size of railcar \_\_\_\_\_

Type of railcar \_\_\_\_\_

\(xi\) Number of containers or pallets/skids per trailer \_\_\_\_\_\*
\--

Size of trailer Ft \_\_\_\_\_

Type of trailer \_\_\_\_\_

\*Number of complete units (contract line item) to be shipped in
carrier\'s equipment.

\(2\) \[CO to insert information after evaluation but prior to award\]:

\(i\) Rate used in evaluation;

\(ii\) Tender/Tariff;

\(iii\) Item.

\(b\) The guaranteed shipping characteristics requested in subparagraph
(a)(1) of this clause do not establish actual transportation
requirements, which are specified elsewhere in this solicitation. The
guaranteed shipping characteristics will be used only for the purpose of
evaluating offers and establishing any liability of the successful
offeror for increased transportation costs resulting from actual
shipping characteristics which differ from those used for evaluation in
accordance with paragraph (a) of this clause.

(End of clause)

PRESCRIPTION:

Shall be used in Sir\'s and contracts, excluding those at or below the
simplified acquisition threshold, when shipping and other
characteristics are required to evaluate offers as to transportation
costs. When all of the shipping characteristics listed in paragraph (a)
of clause 3.11-60 are not required to evaluate offers as to
transportation costs, the contracting officer shall delete the
characteristics not required from the clause.

CO to insert information.

**3.11-59** **F.O.B. Origin- Minimum Size of Shipments** (April 1999)

The Contractor agrees that shipment will be made in carload and
truckload lots when the quantity to be delivered to any one destination
in any delivery period pursuant to the contract schedule of deliveries
is sufficient to constitute a carload or truckload shipment, except as
may otherwise be permitted or directed in writing by the Contracting
Officer. The agreed weight of a carload or truckload will be the highest
applicable minimum weight which will result in the lowest freight rate
(or per car charge) on file or published in common carrier tariffs or
tenders as of date of shipment. In the event the total weight of any
scheduled quantity to a destination is less than the highest
carload/truckload minimum weight, the Contractor agrees to ship such
scheduled quantity in one shipment. The Contractor shall be liable to
the Government for any increased costs to the Government resulting from
failure to comply with the above requirements. This liability shall not
attach if supplies are outsized or of such nature that they cannot be
loaded at the highest minimum weight bracket.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when volume rates may apply.

**3.11-60** **Specific Quantities Unknown** (April 1999)

\(a\) For the purpose of evaluating \"f.o.b. destination\" offers, the
Government estimates that the quantity specified will be shipped to the
destinations indicated: \[CO to insert the following information\]

Estimated quantity Destination

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(b\) If the quantity shipped to each destination varies from the
quantity estimated, and if the variation results in a change in the
transportation costs, appropriate adjustment shall be made.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when total requirements and
destinations to which shipments will be made are known, but the specific
quantity to be shipped to each destination cannot be predetermined. This
clause protests the interests of both the Government and the contractor
during the course of the performance of the contract.

CO to insert information

**3.11-61** **Preference for U.S. Flag Carriers** (April 1999)

\(a\) \"International air transportation,\" as used in this clause,
means transportation by air between a place in the United States and a
place outside the United States or between two places both of which are
outside the United States. \"United States,\" as used in this clause,
means the 50 States, the District of Columbia, the Commonwealth of
Puerto Rico, and possessions of the United States. \"U.S.-flag air
carrier,\" as used in this clause, means an air carrier holding a
certificate under section 49 U.S.C. Chapter 411.

\(b\) Section 5 of the International Air Transportation Fair Competitive
Practices Act of 1974 (49 U.S.C. 40118) (Fly America Act) requires that
all Federal agencies and Government contractors and subcontractors use
U.S.-flag air carriers for U.S. Government-financed international air
transportation of personnel (and their personal effects) or property, to
the extent that service by those carriers is available. It requires the
Comptroller General of the United States, in the absence of satisfactory
proof of the necessity for foreign-flag air transportation, to disallow
expenditures from funds, appropriated or otherwise established for the
account of the United States, for international air transportation
secured aboard a foreign-flag air carrier if a U.S.-flag air carrier is
available to provide such services.

\(c\) The Contractor agrees, in performing work under this contract, to
use U.S.-flag air carriers for international air transportation of
personnel (and their personal effects) or property to the extent that
service by those carriers is available.

\(d\) In the event that the Contractor selects a carrier other than a
U.S.-flag air carrier for international air transportation, the
Contractor shall include a statement on vouchers involving such
transportation essentially as follows:

STATEMENT OF UNAVAILABILITY OF U.S.-FLAG AIR CARRIERS

International air transportation of persons (and their personal effects)
or property by U.S.-flag air carrier was not available or it was
necessary to use foreign-flag air carrier service for the following
reasons : \[State reasons\]

(End of statement)

\(e\) The Contractor shall include the substance of this clause,
including this paragraph (e), in each subcontract or purchase under this
contract that may involve international air transportation.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts whenever possible U.S.
Government-financed international air transportation of personnel (and
their personal effects) or property will occur in the performance of the
contract. This clause does not apply to contracts awarded using the
simplified acquisition procedures or contracts for commercial items.

**3.11-62** **Preference for Privately Owned U.S. Flag Commercial
Vessels** (April 1999)

\(a\) The Cargo Preference Act of 1954 (46 U.S.C. 1241(b)) requires that
Federal departments and agencies shall transport in privately owned
U.S.-flag commercial vessels at least 50 percent of the gross tonnage of
equipment, materials, or commodities that may be transported in ocean
vessels (computed separately for dry bulk carriers, dry cargo liners,
and tankers). Such transportation shall be accomplished when any
equipment, materials, or commodities, located within or outside the
United States, that may be transported by ocean vessel are \--

\(1\) Acquired for a U.S. Government agency account;

\(2\) Furnished to, or for the account of, any foreign nation without
provision for reimbursement;

\(3\) Furnished for the account of a foreign nation in connection with
which the United States advances funds or credits, or guarantees the
convertibility of foreign currencies; or

\(4\) Acquired with advance of funds, loans, or guaranties made by or on
behalf of the United States.

\(b\) The Contractor shall use privately owned U.S.-flag commercial
vessels to ship at least 50 percent of the gross tonnage involved under
this contract (computed separately for dry bulk carriers, dry cargo
liners, and tankers) whenever shipping any equipment, materials, or
commodities under the conditions set forth in paragraph (a) above, to
the extent that such vessels are available at rates that are fair and
reasonable for privately owned U.S.-flag commercial vessels.

\(c\) (1) The Contractor shall submit one legible copy of a rated
on-board ocean bill of lading for each shipment to both \--

\(i\) The Contracting Officer, and

\(ii\) The:

Office of Cargo Preference

Maritime Administration (MAR-590)

400 Seventh Street, SW

Washington, DC 20590

Subcontractor bills of lading shall be submitted through the Prime
Contractor.

\(2\) The Contractor shall furnish these bill of lading copies;

\(i\) Within 20 working days of the date of loading for shipments
originating in the United States, or;

\(ii\) Within 30 working days for shipments originating outside the
United States. Each bill of lading copy shall contain the following
information:

\(A\) Sponsoring U.S. Government agency.

\(B\) Name of vessel.

\(C\) Vessel flag of registry.

\(D\) Date of loading.

\(E\) Port of loading.

\(F\) Port of final discharge.

\(G\) Description of commodity.

\(H\) Gross weight in pounds and cubic feet if available.

\(I\) Total ocean freight revenue in U.S. dollars.

\(d\) Except for contracts at or below the simplified acquisition
threshold, the Contractor shall insert the substance of this clause,
including this paragraph (d), in all subcontracts or purchase orders
under this contract.

\(e\) The requirement in paragraph (a) does not apply to -

\(1\) Contracts at or below the simplified acquisition threshold;

\(2\) Cargoes carried in vessels of the Panama Canal Commission or as
required or authorized by law or treaty;

\(3\) Ocean transportation between foreign countries of supplies
purchased with foreign currencies made available, or derived from funds
that are made available, under the Foreign Assistance Act of 1961 (22
U.S.C. 2353); and

\(4\) Shipments of classified supplies when the classification prohibits
the use of non-

\(f\) Guidance regarding fair and reasonable rates for privately owned
U.S.-flag commercial vessels may be obtained from the:

Office of Cost and Rates

Maritime Administration

400 Seventh Street, SW

Washington, DC 20590

Phone: 202-366-4610.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts that ma involve ocean
transportation of supplies subject to the Cargo Preference Act of 1954.

**3.11-62/alt1** **Preference for Privately Owned U.S. Flag Commercial
Vessels** (April 1999)

Delete paragraphs (a) and (b) from the basic clause and substitute for
them the following paragraphs (a) and (b):

\(a\) Except as provided in paragraph (b) below, the Contractor shall
use privately owned U.S.-flag commercial vessels, and no others, in the
ocean transportation of any supplies to be furnished under this
contract.

\(b\) If such vessels are not available for timely shipment at rates
that are fair and reasonable for privately owned U.S.-flag commercial
vessels, the Contractor shall notify the Contracting Officer and request
(1) authorization to ship in foreign-flag vessels or (2) designation of
available U.S.-flag vessels. If the Contractor is authorized in writing
by the Contracting Officer to ship the supplies in foreign-flag vessels,
the contract price shall be equitably adjusted to reflect the difference
in costs of shipping the supplies in privately owned U.S.-flag
commercial vessels and in foreign-flag vessels.

PRESCRIPTION:

Shall be used in SIR\'s and contracts when supplies to be furnished
subject to the Cargo Preference Act of 1954 shall be transported
exclusively in privately owned U.S. flag commercial vessels.

**3.11-62/alt2** **Preference for Privately Owned U.S. Flag Commercial
Vessels** (April 1999)

Delete paragraphs (a) and (b) from the clause and substitute for them
the following paragraphs (a) and (b):

\(a\) When ocean transportation is required to bring supplies,
materials, or equipment to the construction site from the United States
either for use in performance of, or for incorporation in, the work
called for by this contract, the Contractor shall use privately owned
U.S. flag commercial vessels to the extent that such vessels are
available at rates that are fair and reasonable for privately owned
U.S.-flag commercial vessels.

\(b\) The Contractor shall not make any shipment exceeding 10
measurement tons (400 cubic feet) by vessels other than privately owned
U.S.-flag commercial vessels without (1) notifying the Contracting
Officer that U.S.-flag commercial vessels are not available at rates
that are fair and reasonable for such vessels and (2) obtaining
permission to ship in other vessels. If permission is granted, the
contract price shall be equitably adjusted to reflect the difference in
cost.

PRESCRIPTION:

Shall be used in SIR\'s and contracts when supplies, equipment or
materials to be shipped under construction contracts subject to the
Cargo Preference Act of 1954 shall be transported exclusively in
privately owned U.S. flag commercial vessels.

**3.11-63** **F.O.B. Origin, Prepaid Freight - Small Package Shipments**
(April 1999)

\(a\) When authorized by the Contracting Officer, f.o.b. origin freight
shipments which do not have a security classification shall move on
prepaid commercial bills of lading or other shipping documents to
domestic destinations, including air and water terminals. Weight of
individual shipments shall be governed by carrier restrictions but shall
not exceed 150 pounds by any form of commercial air or 1,000 pounds by
other commercial carriers. The Government will reimburse the Contractor
for reasonable freight charges.

\(b\) The Contractor shall annotate the commercial bill of lading as
required by the clause of this contract entitled \"Commercial Bill of
Lading Notations.\"

\(c\) The Contractor shall consolidate prepaid shipments in accordance
with procedures established by the cognizant transportation office. The
Contractor is authorized to combine Government prepaid shipments with
the Contractor\'s commercial shipments for delivery to one or more
consignees and the Government will reimburse its pro rata share of the
total freight costs. The Contractor shall provide a copy of the
commercial bill of lading promptly to each consignee. Quantities shall
not be divided into mailable lots for the purpose of avoiding movement
by other modes of transportation.

\(d\) Transportation charges will be billed as a separate item on the
invoice for each shipment made. A copy of the pertinent bill of lading,
shipment receipt, or freight bill shall accompany the invoice unless
otherwise specified in the contract.

\(e\) Loss and damage claims will be processed by the Government.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when f.o.b. origin, prepaid
freight-small package shipments are made.

**3.11-64** **Returnable Cylinders** (April 1999)

\(a\) Cylinder, referred to in this clause, is a pressure vessel
designed for pressures higher than 40 psia and having a circular cross
section excluding a portable tank, multi-tank car tank, cargo tank or
tank car.

\(b\) Returnable cylinders shall remain the Contractor\'s property but
shall be loaned without charge to the Government for a period of days
\[CO to insert number of days\] (hereafter referred to as loan period)
following the day of delivery to the f.o.b. point specified in the
contract. Any cylinder not returned within the loan period shall be
charged a daily rental beginning with the first day after the loan
period expires, to and including the day the cylinders are delivered to
the Contractor (if the original delivery was f.o.b. origin) or are
delivered or made available for delivery to the Contractor\'s designated
carrier (if the original delivery was f.o.b. destination). The
Government shall pay the Contractor a rental of \$ \[CO to insert dollar
amount for rental, after evaluation of offers\] per cylinder, per day,
computed separately for cylinders by type, size, and capacity and for
each point of delivery named in the contract. No rental shall accrue to
the Contractor in excess of replacement value per cylinder specified in
paragraph (c) of this clause.

\(c\) For each cylinder lost or damaged beyond repair while in the
Government\'s possession, the Government shall pay to the Contractor the
replacement value, less the allocable rental paid for that cylinder as
follows: \[CO to insert the cylinder types, sizes, capacities, and
associated replacement values.\] These cylinders shall become Government
property.

\(d\) If any lost cylinder is located within \[CO to insert number of
days\] calendar days after payment by the Government, it may be returned
to the Contractor by the Government, and the Contractor shall pay to the
Government an amount equal to the replacement value, less rental
computed in accordance with paragraph (b) of this clause, beginning at
the expiration of the loan period specified in paragraph (b) of this
clause, and continuing to the date on which the cylinder was delivered
to the Contractor.

(End of clause)

PRESCRIPTION:

Shall be used in SIR;s and contracts whenever the contract involves the
purchase of gas in contract-furnished returnable cylinders and the
contractor retains title to the cylinders.

CO to insert information

**3.11-65** **Submission of Commercial transportation Bills to the
General Services Administration for Audit** (April 1999)

\(a\) (1) In accordance with paragraph (a)(2) of this clause, the
Contractor shall submit to the General Services Administration (GSA) for
audit, legible copies of all paid freight bills/invoices, commercial
bills of lading (CBL\'s), passenger coupons, and other supporting
documents for transportation services on which the United States will
assume freight charges that were paid \--

\(i\) By the Contractor under a cost-reimbursement contract; and

\(ii\) By a first-tier subcontractor under a cost reimbursement
subcontract thereunder.

\(2\) Cost-reimbursement Contractors shall only submit for audit those
CBL\'s with freight shipment charges exceeding \$50.00. Bills under
\$50.00 shall be retained on-site by the contractor and made available
for GSA on-site audits. This exception only applies to freight shipment
bills and is not intended to apply to bills and invoices for any other
transportation services.

\(b\) The Contractor shall forward copies of paid freight
bills/invoices, GBL\'s, passenger coupons, and supporting document as
soon as possible following the end of the month, in one package to the:

General Services Administration

ATTN: FWA

1800 F Street, NW

Washington, DC 20405

The Contractor shall include the paid freight bills/invoices, CBL\'s,
passenger coupons, and supporting documents for first-tier
subcontractors under a cost-reimbursement contract. If the inclusion of
the paid freight bills/invoices CBL\'s passenger coupons, and supporting
documents for any subcontractor in the shipment is not practicable, the
documents may be forwarded to GSA in a separate package.

\(c\) Any original transportation bills or other documents requested by
GSA shall be forwarded promptly by the Contractor to GSA. The Contractor
shall insure that the name of the contracting agency is stamped or
written in the face of the bill before sending it to GSA.

\(d\) A statement prepared in duplicate by the Contractor shall
accompany each shipment of transportation documents. GSA will
acknowledge receipt of the shipment by signing and returning the copy of
the statement. The statement shall show \--

\(1\) The name and address of the Contractor.

\(2\) The contract number, including any alpha-numeric prefix
identifying the contracting office.

\(3\) The name and address of the contracting office.

\(4\) The total number of bills submitted with the statement: and

\(5\) A listing of the respective amounts paid or, in lieu of such
listing, an adding machine tape of the amounts paid showing the
Contractor\'s voucher or check numbers.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when a cost-reimbursement contract
is contemplated and the contract or a first-tier cost reimbursement a
subcontract thereunder

**3.11-66** **Cargo Insurance** (April 1999)

\(a\) The Contractor, at the Contractor\'s expense, agrees to provide
and maintain, during the continuance of this contract, cargo liability
insurance of \$\[Contracting Officer to insert information\] per vehicle
to cover the value of property on each vehicle and of \$\[Contracting
Officer to insert information\] to cover the total value of the property
in the shipment.

\(b\) All insurance shall be written on companies acceptable to the
Federal Aviation Administration (FAA), and policies shall include such
terms and conditions as required by the FAA. As evidence of insurance
maintained, an authenticated copy of the cargo liability insurance
policy or policies shall be furnished to the FAA. Evidence of acceptable
cargo insurance shall be furnished before commencing operations under
this contract.

\(c\) Each cargo insurance policy shall include the following statement:
It is a condition of this policy that the Company shall furnish \--

\(1\) Written notice to the FAA at the address shown on the face sheet
of this contract, 30 days in advance of the effective February 1999 of
any reduction in, or cancellation of, this policy; and

\(2\) An authenticated copy of any renewal policy to the FAA not less
than 15 days prior to the expiration of any current policy on file with
the FAA.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation-related services, except when freight is shipped under
rates subject to released or declared value.

CO to insert information

**3.11-67** **Vehicular and General Public Liability Insurance** (April
1999)

\(a\) The Contractor, at the Contractor\'s expense, agrees to maintain,
during the continuance of this contract, vehicular liability and general
public liability insurance with limits of liability for:

\(1\) bodily injury of not less than \$\[Contracting Officer to insert
information\]for each person and \$\[Contracting Officer to insert
information \] for each occurrence, and

\(2\) property damage of not less than \$\[Contracting Officer to insert
information\] for each accident and \$\[Contracting Officer to insert
information\] in the aggregate.

\(b\) The Contractor also agrees to maintain workers\' compensation and
other legally required insurance with respect to the Contractor\'s own
employees and agents.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts for transportation or for
transportation-related services when the contracting officer determines
that vehicular liability or general public liability insurance required
by law is not sufficient.

CO to insert information.

**3.11-68** **F.O.B. Origin - Government Bills of Lading or Prepaid
Postage** (April 1999)

\(a\) F.o.b. origin shipments shall be made on Government bills of
lading, or, if the supplies are mailable, via the U.S. Postal Service or
a foreign postal system, as appropriate, with postage costs prepaid by
the Contractor. Any direct charge for postage costs shall be listed as a
separate item on invoices for the supplies shipped. Use of Federal
Aviation Administration (FAA) official indicia mail by Contractors is
not authorized. Quantities shall not be divided into mailable lots for
the express purpose of avoiding movement by other modes of
transportation.

\(b\) If Government bills of lading are not furnished with the contract
or applicable ordering document, the Contractor shall obtain them from
the Contracting Officer or designated representative.

\(c\) Unless otherwise directed, the Contractor shall address overseas
parcel post to an ultimate DOD consignee in care of a designated Army,
Air Force, or Navy (fleet) post office and not to, or in care of, a
transportation officer, or other activity at a CONUS water or aerial
terminal for transshipment.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when f.o.b. origin shipments are
to be made using Government bills of lading or prepaid postage.

**3.11-69** **Report of Shipment (RESHIP)** (April 1999)

Unless otherwise directed by the Contracting Officer, the Contractor
shall send a prepaid notice of shipment to the consignee transportation
officer for all shipments of classified material, protected sensitive,
and protected controlled material; explosives and poisons, classes A and
B; radioactive materials requiring the use of a III bar label; or when a
truckload/carload shipment of supplies weighing 20,000 pounds or more,
or a shipment of less weight that occupies the full visible capacity of
a railway car or motor vehicle, is given to any carrier (common,
contract or private) for transportation to a domestic (i.e., within the
United States excluding Alaska or Hawaii, or if shipment originates in
Alaska or Hawaii within Alaska or Hawaii, respectively) destination
(other than a port for export). The notice shall be transmitted by rapid
means to be received by the consignee transportation officer at least 24
hours before the arrival of the shipment. The Government bill of lading,
commercial bill of lading or letter or other document that contains all
of the following shall be addressed and sent promptly to the receiving
transportation officer. This document shall be prominently identified by
the Contractor as being a \"Report of Shipment\" or \"REPSHIP FOR T.O.\"

Message Example:

REPSHIP FOR T.O. 81 JUN 01

TRANSPORTATION OFFICER

DEFENSE DEPOT, MEMPHIS, TENN.

SHIPPED YOUR DEPOT 1981 JUN 1 540 CTNS

MENS COTTON TROUSERS, 30,240 LB, 1782

CUBE, VIA XX-YY\*

IN CAR NO. XX 123456\*\*-GBL\*\*\*-C98000031\*\*\*\*

CONTRACT DLA ETA\*\*\*\*\*-JUNE 5

JONES & CO., JERSEY CITY, N.J.

\* Name of rail carrier, trucker, or other carrier.

\*\* Vehicle identification.

\*\*\* Government bill of lading.

\*\*\*\* If not shipped by GBL, identify lading document and state
whether paid by contractor.

\*\*\*\*\* Estimated time of arrival.

(End of clause)

PRESCRIPTION:

Shall be used in SIR\'s and contracts when advance notice of shipment is
required for safety or security reasons, or where carload or truckload
shipments will be made to DoD installations or, as required, to civilian
agency facilities.

**3.13-1** **Approval of Contract** (April 1996)

This contract is subject to the written approval of \[identify title of
designated agency official here\] and shall not be binding until so
approved.

(End of clause)

PRESCRIPTION:

Should be used in SIRs and contracts to notify contractors of the person
who has the delegated procurement authority to sign the contract if the
Contracting Officer determines that it is in the best interest of the
agency to do so.

**3.13-2** **RESERVED** (July 2002)

.

PRESCRIPTION:

.

**3.13-3** **Printing/Copying Double-sided on Recycled Paper** (April
1996)

In accordance with Executive Order 12873, dated October 20, 1993, the
Offeror/Contractor is encouraged to submit paper documents, such as
offers, letters, or reports, that are printed/copied double-sided on
recycled paper that has at least 20% postconsumer material. If the
contractor can only print/copy double-sided or use recycled paper, the
contractor should accomplish whichever one the contractor has the
ability to achieve.

(End of clause)

PRESCRIPTION:

May be used in SIRs and contracts at the Contracting Officer\'s
discretion.

**3.13-4** **Contractor Identification Number?Data Universal Numbering
System (DUNS) Number** (April 2006)

\(a\) Definitions. As used in this clause

\"Contractor Identification Number,\" as used in this provision, means
\"Data Universal Numbering System (DUNS) number, which is a nine-digit
number assigned by Dun and Bradstreet Information Services, to identify
unique business entities (taken from CCR clause)

\"Data Universal Numbering System +4 (DUNS+4) number\" means the DUNS
number assigned by D&B plus a 4-character suffix that may be assigned by
a business concern. (D&B has no affiliation with this 4-character
suffix.) This 4-character suffix may be assigned at the discretion of
the business concern to establish additional CCR records for identifying
alternative Electronic Funds Transfer.

\(b\) Contractor identification is essential for receiving payment and
complying with statutory contract reporting requirements. Therefore, the
offeror shall provide its DUNS or DUNS+4 number below. The DUNS number
will be used by the Contracting Officer to verify that the offeror is
registered in the CCR database.

DUNS OR DUNS+4 NUMBER:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\(c\) If the offeror does not have a DUNS number, it should contact Dun
and Bradstreet directly to obtain one.

\(1\) An offeror may obtain a DUNS number

\(i\) If located within the United States, by calling Dun and Bradstreet
at 1-866-705-5711 or via the Internet at
[http://www.dnb.com](http://www.dnb.com/)/; or

\(ii\) If located outside the United States, by contacting the local Dun
and Bradstreet office.

\(2\) The offeror should be prepared to provide the following
information:

\(i\) Company legal business.

\(ii\) Tradestyle, doing business, or other name by which your entity is
commonly recognized.

\(iii\) Company Physical Street Address, City, State, and ZIP Code.

\(iv\) Company Mailing Address, City, State and ZIP Code (if different
from physical street address).

\(v\) Company Telephone Number.

\(vi\) Date the company was started.

\(vii\) Number of employees at your location.

\(viii\) Chief executive officer/key manager.

\(ix\) Line of business (industry).

\(x\) Company Headquarters name and address (reporting relationship
within your entity).

(End of provision)

PRESCRIPTION:

Shall be used in all SIRs.

**3.13-5** **Seat Belt Use by Contractor Employees** (January 1999)

In accordance with Executive Order 13043 entitled \"Increasing Seat Belt
Use in the U.S.,\" the contractor is encouraged to implement,
communicate and enforce on the job seat belt policies and programs for
their employees and subcontractors when operating company-owned, rented
or personally-owned vehicles.

(End of clause)

PRESCRIPTION:

Shall be used in SIRs and contracts.

**3.13-6** **RESERVED** (July 2002)

.

PRESCRIPTION:

.

**3.13-7** **RESERVED** (October 2001)

.

PRESCRIPTION:

.

**3.13-8** **RESERVED** (July 2002)

.

PRESCRIPTION:

.

**3.13-9** **RESERVED** (July 2002)

.

PRESCRIPTION:

.

**3.13-10** **Contractor Attendance at FAA Sponsored Training** (January
2003)

This clause applies to FAA support contractors who wish to attend
FAA-sponsored training.

\(a\) If FAA is providing training in a unique area (such as training

for tasks required to be performed at FAA exclusively, e.g. the AMS),

support contractors may be allowed to attend on a space-available basis.

The training hours may be billed as direct hours to the contract.
However, FAA will not pay direct hourly charges associated with the
number of hours spent in training unless specifically authorized in the
provisions of the contract.

\(b\) The Contracting Officer is the only person with the authority to
approve

FAA training for a contractor, since it involves the expenditure of
government funds.

\(c\) The support contractor must provide the Contracting Officer\'s
signed

authorization to the Course Manager on or before the first day of the
class.

Original signed authorizations will be retained in the contract file.

(End of Clause)

PRESCRIPTION:

Shall be used in all SIRs and contract actions when the Contracting
Officer has determined that the support contractor may participate in
FAA-sponsored training on a space available basis.

**3.14-1** **Security Requirements-Classified Contracts** (July 2002)

\(a\) This clause applies to the extent that this contract involves
access to information that is classified as \"Confidential,\"
\"Secret,\" or \"Top Secret.\"

\(b\) The Contractor shall comply with the requirements in (1) the
Contract Security Classification Specification (DD Form 254) included in
the current edition of the National Industrial Security Operating Manual
(DOD 5220.22-M) for the protection of classified information at its
cleared facility, if applicable, as directed by the Defense Security
Service. If the Contactor has access to classified information at an FAA
owned or FAA leased facility, it shall comply with the security
requirements of the FAA.

\(c\) If, subsequent to the date of this contract, the security
classification or security requirements under this contract are changed
by the Government and if the changes cause an increase or decrease in
security costs or otherwise affect any other term or condition of this
contract, the contract shall be subject to an equitable adjustment.

\(d\) The Contractor agrees to insert terms that conform substantially
to the language of this clause, including this paragraph d) but
excluding any reference to the \"Changes\" clause of this contract, in
all subcontracts under this contract that involve access to classified
information.

(End of clause)

PRESCRIPTION:

Shall be used in SIRs and contracts when the contract may require access
to information that is classified as \"Confidential\", \"Secret\", or
\"Top Secret\".

**3.14-1/alt1** **Security Requirements-Classified Contracts Alternate
I** (July 2002)

If a cost contract for research and development with an educational
institution is contemplated, add the following paragraphs (e), (f), and
(g) to the basic clause: 3.14.1 - \"Security Requirements.\"

\(e\) If a change in security requirements, as provided in paragraphs
(b) and (c), results in:

\(1\) a change in the security classification of this contract or any of
its elements from an unclassified status or a lower classification to a
higher classification, or

\(2\) more restrictive area controls than previously required, the
Contractor shall exert every reasonable effort compatible with the
Contractor\'s established policies to continue the performance of work
under the contract in compliance with the change in security
classification or requirements.

If, despite reasonable efforts, the Contractor determines that the
continuation of work under this contract is not practicable because of
the change in security classification or requirements, the Contractor
shall notify the Contracting Officer in writing. Until resolution of the
problem is made by the Contracting Officer, the Contractor shall
continue safeguarding all classified material as required by this
contract.

\(f\) After receiving the written notification, the Contracting Officer
shall explore the circumstances surrounding the proposed change in
security classification or requirements, and shall endeavor to work out
a mutually satisfactory method whereby the Contractor can continue
performance of the work under this contract.

\(g\) If, 15 days after receipt by the Contracting Officer of the
notification of the Contractor\'s stated inability to proceed,

\(1\) the application to this contract of the change in security
classification or requirements has not been withdrawn, or

\(2\) a mutually satisfactory method for continuing performance of work
under this contract has not been agreed upon, the Contractor may request
the Contracting Officer to terminate the contract in whole or in part.
The Contracting Officer shall terminate the contract in whole or in
part, as may be appropriate, and the termination shall be deemed a
termination under the terms of the \"Termination for the Convenience of
the Government\" clause.

(End of clause)

PRESCRIPTION:

Shall be used in SIRs and contracts for research and development with an
educational institution when the contract requires access to information
that is classified as \"Confidential\", or \"Secret\", or \"Top
Secret\".

**3.14-1/alt2** **Security Requirements-Classified Contracts Alternate
II** (July 2002)

If employee identification is required for security or other reasons in
a construction contract or architect-engineer contract, add the
following paragraph (e) to the basic clause: 3.14.1, \"Security
Requirements.\"

\(e\) The Contractor shall be responsible for furnishing to each
employee and for requiring each employee engaged on the work to display
such identification as may be approved and directed by the Contracting
Officer. All prescribed identification shall immediately be delivered to
the Contracting Officer, for cancellation upon the release of any
employee. When required by the Contracting Officer, the Contractor shall
obtain and submit fingerprints of all persons employed or to be employed
on the project.

(End of clause)

PRESCRIPTION:

Should be used in SIRs and contracts if employee identification is
required for security or other reasons in a construction or architect
engineer contract.

**3.14-2** **Contractor Personnel Suitability Requirements** (April
2004)

\(a\) This clause applies to the extent that this contract requires
contractor employees, subcontractors, or consultants to have unescorted
access to FAA:

\(1\) facilities,

\(2\) sensitive information, and/or

\(3\) resources regardless of the location where such access occurs, and
none of the exceptions of FAA Order 1600.72, Contractor and Industrial
Security Program, chapter 4, paragraphs 403g, 403i-I, and/or 409,
pertains.

Definitions of applicable terminology are contained in the corresponding
guidance and Order 1600.72, appendix 1.

\(b\) Consistent with FAA Order 1600.72, the FAA Servicing Security
Element (SSE) has approved designated risk levels for the following
positions under the contract:

Position Risk Level

\[CO to insert information here\]

\(c\) Not later than \[CO to insert information here\] days, not to
exceed a maximum of 30 days, after contract award (or date of
modification, if this provision is included by modification to an
existing contract), for each employee in a listed position, provided, no
previous background investigations can be supported as described below,
the contractor shall submit the following documentation to the SSE for
an employment suitability determination:

\- Standard Form (SF) 85P, Questionnaire for Public Trust Positions,
revised September 1995. The SF 85P shall be completed (all questions
answered) in accordance with the instruction sheet.

\- One fingerprint card (FD-258). Fingerprinting facilities are
available through the SSE and local police department. All fingerprint
cards shall be written in black ink or typewritten with all answerable
question blocks completed and shall be signed and dated within the
60-day period preceding the submission.

The type of investigation conducted will be determined by the position
risk level designation for all duties, functions, and/or tasks performed
and shall serve as the basis for granting a favorable employment
suitability authorization as described in FAA Order 1600.72. If an
employee has had a previous Government-directed background investigation
which meets the requirements of Chapter 4 of FAA Order 1600.72, it will
be accepted by the FAA. However, the FAA reserves the right to conduct
further investigations, if necessary. For each contractor employee for
which a previous background investigation was completed, the Contractor
shall provide, in writing to the SSE, the name, date of birth, place of
birth, and social security number of the employee, the name of the
investigating entity, type of background investigation conducted, and
approximate date the previous background investigation was completed.

The Contractor shall submit the required information with a transmittal
letter referencing the contract number and this request to:

Headquarters Contracts:

Manager, Personnel Security Division, ASN-200

Office of Investigations

400 7th Street, SW, Room 5402a

Washington, D.C. 20591

Regional and Center Contracts:

\[CO insert appropriate Regional or Center information here or enter
\"none\" if not applicable\]

The transmittal letter shall also include a list of all of the names of
contractor employees and their positions for which completed forms will
be submitted to the SSE pursuant to this Clause. A copy of the
transmittal letter shall also be provided to the Contracting Officer.

\(d\) The contractor shall submit the information required by Section
(c) of this Clause for any new employee not listed in the Contractor\'s
initial thirty (30) day submission who is hired into any position
identified in Section (c) of this Clause.

\(e\) The contracting officer will provide notice to the contractor when
any contractor employee is found to be unsuitable or otherwise
objectionable, or whose conduct appears contrary to the public interest,
or inconsistent with the best interest of national security. The
contractor shall take appropriate action, including the removal of such
employee from working on this FAA contract, at their own expense.

\(f\) No contractor employee shall work in a high, moderate, or low risk
position unless the SSE has received all forms necessary to conduct any
required investigation and has authorized the contractor employee to
begin work. However, if this provision is added by modification to an
existing contract, contractor employees performing in the positions
listed above may continue work on the contract pending:

\(1\) The submittal of all necessary forms within \[CO to insert
information\] days, but not to exceed a maximum of 30 days, and

\(2\) completion of a suitability investigation by the SSE, subject to
the following conditions:

(State any SSE conditions such as restricted access to sensitive
information or facilities. Specify information or facilities. If the SSE
imposes no conditions, state \"None\").

\(3\) If the necessary forms are not submitted by the Contractor to the
SSE within 30 days of the effective date of the modification, the
contractor employee shall be denied access to FAA facilities, sensitive
information and/or resources until such time as the forms are submitted
and the SSE has approved the contractor employee to begin work.

\(g\) As applicable, the Contractor shall submit quarterly reports to
the Contracting Officer with a copy to the SSE and the Operating Office
on or before the fifth (5th) day following each report period. This
report shall include a complete alphabetical listing of all current
contractors who have access to FAA facilities, sensitive information,
and/or resources.

\(h\) The Contractor shall notify the CO within one (1) day after any
employee identified pursuant to Section (c) of this Clause is terminated
from performance on the contract.

\(i\) The Contracting Officer may also, after coordination with the SSE
and other security specialists, require contractor employees to submit
any other security information (including additional fingerprinting)
deemed reasonably necessary to protect the interests of the FAA. In this
event, the Contractor shall provide, or cause each of its employees to
provide such security information to the SSE, and the same transmittal
letter requirements of Section (c) of this Clause shall apply.

\(j\) The contractor and/or subcontractor(s) will immediately contact
the Servicing Security Elements (Regional and/or Center Security
Divisions) or ASN-200 at Headquarters in the event an employee is
arrested (detained by law enforcement for any offenses, other than minor
traffic offenses) or is involved in theft of government property or the
contractor becomes aware of any information that may raise a question
about the suitability of a contractor employee.

\(k\) Failure to submit information required by this clause within the
time required may be determined by the Contracting Officer a material
breach of the contract.

\(l\) If subsequent to the effective date of this contract, the security
classification or security requirements under this contract are changed
by the Government and if the changes cause an increase or decrease in
direct contract costs or otherwise affect any other term or condition of
this contract, the contract shall be subject to an equitable adjustment.

\(m\) The contractor agrees to insert terms that conform substantially
to the language of this clause, including this paragraph (l) but
excluding any reference to the Changes clause of this contract, in all
subcontracts under this contract that involve access and where the
exceptions under Chapter 4, paragraphs 403g, 403i-I, and 409 of FAA
Order 1600.72 do not apply.

\(n\) The contracting officer shall ensure the SSE receives a list of
all proposed contractor employees, the name of the contracting company,
contract number, duty location, identification of the funding line of
business, and the names of the contracting officers and COTR for each
contract within 5 days of contract award.

\(o\) Contractor employees who have not undergone a background
investigation must be escorted at all times. In some instances, a
contractor employee may be required to serve as an escort. In this
situation, the contractor employee must have a completed and favorably
adjudicated National Agency Check with Inquiries (NACI).

(End of clause)

PRESCRIPTION:

Shall be inserted into all FAA SIRs and contract actions when the
contractor may require access to FAA facilities, sensitive information
and/or resources, and is applicable

**3.14-3** **Foreign Nationals as Contractor Employees** (July 2002)

\(a\) Each employee of the Contractor shall be a citizen of the United
States of America, or an alien who has been lawfully admitted for
permanent residence as evidenced by Alien Registration Receipt Card Form
I-151, or who presents other evidence from the U.S. Citizenship and
Immigration Service that employment will not affect his/her immigration
status.

\(b\) Aliens and foreign nationals proposed under this contract must
meet the following conditions in accordance with FAA Order 1600.72,
chapter 4, paragraph 407:

\(1\) must have resided within the United States for 3 of the last 5
years unless a waiver of this requirement is requested and approved in
accordance with the requirements stated in FAA Order 1600.72, chapter 4,
paragraph 409(b)(3);

\(2\) a risk or sensitivity level designation can be made for the
position; and

\(3\) the appropriate security screening can be adequately conducted.

(End of clause)

PRESCRIPTION:

Shall be used in FAA SIRs and contract actions where the contracting and
operating offices and/or the SSE determines that it is necessary to
restrict access or work on a contract to individuals identified as
United States citizens or as otherwise noted in the clause.

**3.14-4** **Government-Issued Keys, Identification Badges, and Vehicle
Decals** (July 2002)

\(a\) It may become necessary for the Government to issue keys,
identification (ID) cards, vehicle decals, and/or access control cards
to contractor employees. Prior to or upon completion or termination of
the work required hereunder, the contractor shall return all such
Government-issued items to the issuing office with notification to the
Contracting Officer\'s Technical Representative (COTR). When contractor
employees who have been issued such items are terminated or no longer
required to perform the work, the Government-issued items shall be
returned to the Government within three workdays or upon termination of
the contract or the employee. Improper use, possession or alteration of
FAA issued keys, ID cards and/or vehicle decals is subject to penalties
under Title 18, USC 499, 506, and 701.

\(b\) In the event such keys, ID cards, or vehicle decals are not
returned, the contractor understands and agrees that the Government may,
in addition to any other withholding provision of the contract, withhold
\[CO to enter appropriate amount\] for each key, ID card, and vehicle
decal not returned. If the keys, ID cards, or vehicle decals are not
returned within 30 days from the date the withholding action was
initiated, any amount so withheld will be forfeited by the contractor.

\(c\) Access to aircraft ramp/hangar areas is authorized only to those
persons displaying a flight line identification card and for vehicles, a
current ramp permit issued pursuant to Part 107 of the Federal Aviation
Regulations.

\(d\) The Government retains the right to inspect inventory, or audit ID
cards, keys, vehicle decals, and access control cards issued to the
contractor in connection with the contract at the convenience of the
Government. Any items not accounted for, to the satisfaction of the
Government shall be assumed to be lost and the provisions of section (b)
shall apply.

\(e\) Keys shall be obtained from the COTR who will require the
contractor to sign a receipt for each key obtained. Lost keys, ID cards,
vehicle decals, and access control cards shall immediately be reported
concurrently to the Contracting Officer (CO), COTR, and \[CO to insert
name of local security division or staff and facility management
office\]. Electronic keying cards are handled in the same manner as
metal keys.

\(f\) Each contract employee, during all times of on-site performance at
the \[CO to insert location\] shall prominently display his/her current
and valid identification card on the front portion of his/her body
between the neck and waist.

\(1\) Prior to any contractor employee obtaining any ID media or vehicle
decals, the contractor shall submit complete documentation required
under AMS clause 3.14-2, Contractor Personnel Suitability Requirements
and shall be approved to begin work by the SSE.

\(2\) To obtain the ID card, contractor employee shall submit an
identification Card/Credential Application (DOT 1681) signed by the
contractor employee and authorized by the CO or the COTR. . The DOT 1681
shall be submitted at the same time the personnel security investigation
paperwork required by AMS clause 3.14-2, Contractor Personnel
Suitability Requirements is submitted. The DOT 1681 shall contain, as a
minimum, under the \"Credential Justification\" heading, the name of the
contractor/company, the contract number or the appropriate acquisition
identification number, the expiration date of the contract or the task
(whichever is sooner), and the required signatures. This paperwork shall
be submitted to \[CO to insert name and location of security division or
staff\] by the contractor in a sealed envelope either hand carried by
the contractor or sent via U.S. mail to: \[CO to insert mailing
address\]. The contractor will be notified when the DOT 1681 has been
approved and is ready for processing by the \[CO to insert name and
location of the person who will process the document\]. Arrangement for
processing the identification cards, including photographs and
lamination can be made by the contacting \[CO to insert point of contact
with phone number\].

\(3\) The contractor\'s project manager shall receive and sign for each
ID card issued on the reverse of the DOT 1681. The DOT 1681 will be
tracked by the Government for accountability purposes.

\(g\) The contractor is responsible for ensuring final out-processing is
accomplished for all departing contractor employees. Final
out-processing will be accomplished by close of business the final
workday of the contractor employee or the next day under special
conditions. \[CO to insert name of local contract employee clearance
form\] will be completed by the contractor and copies will be
distributed to the COTR, CO, and \[CO to insert security division or
staff\] after completion.

(End of clause)

PRESCRIPTION:

Shall be inserted into all FAA SIRs and contract actions when the
contract may require access to FAA facilities, sensitive information
and/or resources.

**3.14-5** **Sensitive Unclassified Information (SUI)** (April 2003)

\(a\) Sensitive information shall be restricted to specific contractors
who:

\(1\) have a need \"to know\" to perform contract tasks;

\(2\) meet personnel suitability security requirements to access
sensitive information; and

\(3\) successfully complete a non-disclosure agreement (NDA).

\(b\) The contractor shall develop and implement procedures to ensure
that sensitive information is handled in accordance with FAA
requirements and at a minimum, will address:

\(1\) steps to minimize risk of access by unauthorized persons during
business and non-business hours to include storage capability;

\(2\) procedures for safeguarding during electronic transmission (voice,
data, fax) mailing or hand carrying;

\(3\) procedures for protecting against co-mingling of information with
general contractor data system/files;

\(4\) procedures for marking documents with both the protective marking
and the distribution limitation statement as needed;

\(5\) procedures for the reproduction of subject material;

\(6\) procedures for reporting unauthorized access; and

\(7\) procedures for the destruction and/or sanitization of such
material.

(End of clause)

PRESCRIPTION:

Shall be inserted into all FAA SIRs and contract actions when the
contract may require access to Sensitive Unclassified Information (SUI),
For Official Use Only (FOUO), Sensitive Security Information (SSI), or
any other designator assigned by the Federal Government to identify
unclassified information that may be withheld from public release.