Reimbursable cost in connection with subcontracts shall be limited to the amounts actually required to be paid by the Contractor to the subcontractor and 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. The term "subcontracts" does not include the purchase of raw material or commercial stock items. Cost for items of capital property as defined herein if applicable, shall be separately listed in invoices. (3) The Contractor shall, to the extent of its ability, procure materials at the most advantageous prices available with due regard to securing prompt delivery of satisfactory materials, and take all cash and trade discounts, rebates, allowances, credits, salvage, commissions, and other benefits. When unable to take advantage of such benefits, it shall promptly notify the SCR to that effect, and give the reason therefore. Credit shall be given to Sandia for cash and trade discounts, rebates, allowances, credits, salvage, the value of resulting scrap when the amount of such scrap is appreciable, commissions, and other amounts, which have been accrued to the benefit of the Contractor, or would have so accrued except for the fault or neglect of the Contractor. Such benefits lost through no fault or neglect on the part of the Contractor, or lost through fault of Sandia or the government, shall not be deducted from gross costs. (4) When the nature of the work to be performed requires the Contractor to furnish material which is regularly sold to the general public in the normal course of business by the Contractor, the price to be paid for such material, notwithstanding (b) (1), above, shall be on the basis of an established catalog or list price in effect when the material is furnished, less all applicable discounts to Sandia or the government. (5) Where under the clause of Section I entitled "Allowable Charges," any equipment usage time is chargeable to this contract, the Contractor shall record the total working time of such equipment on readily auditable and certified correct time records. Each time record shall identify the equipment, shall show dates and time used, and shall segregate total usage time between that used hereunder, identified by reference to this contract and applicable suborder number or numbers, and all other usage. (c) Notice of Cost Approaching Ceiling Price . It is estimated that the total cost to Sandia for the performance of this contract will not exceed the ceiling price set forth in Section I and the Contractor agrees to use its best efforts to perform the work specified in Section I and all obligations under this contract within such ceiling price. If at any time the Contractor has reason to believe the hourly rate payments and material costs which will accrue in the performance of this contract in the next succeeding thirty (30) days, when added to all other payments and costs previously accrued, will exceed seventy-five (75) percent of the ceiling price then set forth in Section 1, the Contractor shall notify the SCR to that effect giving its revised estimate of the total price to Sandia for the performance of this contract, together with supporting reasons and documentation. If at any time during the performance of this contract, the Contractor has reason to believe that the total price to Sandia for the performance of this contract will be substantially greater or less than the then-

Control #: SF 6432-TM Title: Standard Terms and Conditions for Time and Materials Labor-Hour Contracts Owner: Procurement Policy Department Release Date: 03/17/16 Page 9 of 25 Printed copies of this document are uncontrolled. Retrieve latest version electronically.