ivecaster ute to the theme has not artady been trastered and in the manner to the extent, and at the times directed by de Contracting Officer driver i Jovem A the state or unishcant res work in process, completed work suretes, and other matera, product as a part of or acquired a set af the seriormance of the work terminated as the Notice of Termination. Be completed or partially completed pans, drawigs, mtematon, and other property which of the contract at reen compies would be required to be furnished to the Government, and (C) the pas des faurs, ac de geca vos a long acquired or manufacture for the performance of this contract for the cost of which the Contracts or wil be reimbursed under this contract

(va) use is best dors i sela the manter at the times to the extent, and at the price or prices directed or authorized by the Contracting Officer a proper of de vos rent a v pove, men however, that the Contractor - A shall not be required to extend credit to any purchaser and B may acquire any such property under the conditions prescribed by and at a price or prices inproved is the Contracting Officer and provided further that the proceeds of any such transfer or disposition stal be ampied in reduction of any payments to be made by the Government to the Contractor under this contract or stal otherwise be created to the price or cost of the work covered by this contract or paid in such other manner as the Contracting Officer may direct

(van) complete performance of such part of the work as stal not have been terminated by the Nonce of Termination, and

(11) take such action as may be necessary or as the Contracting Officer may direct, for the protection and preservation of the property related to this contract, which is in the possession of the Contractor and in which the Government has of may acquire an interest

The Contractor shall proceed inmediate with the performance of the above obligations norwebstanding any delay in determining or adjusting any amount due or owing under this cause. At any time after expiration of the pan, clearance period, as defined in Part & NASA Procurement Requation as it may be amended from time to time, the Contractor may submit to the Contracting Officer a ist, certified as to quantity and quary, of any or all items of termination inventory not previously disposed of exclusive of tens the disposition of which has been directed or suthorized by the Contracting Officer and may request the Government to remove such items or enter into a storage agreement covering them. Not later than fifteen (15) days thereaher, the Government wil, accept such items and remove them or enter into à storage agreement covering the same proved the he is submitted sha. be subject to ventication by the Contracting Officer upon removal of the nems, or if the nems are stored, within forty-five 48 days from the date of submission of the list. Any necessary adjustment to correct the is as submitted shall be made prior to final settlement.

(c) After receipt of a Notice of Termination, the Contractor shall submit to the Contracting Officer his termination claim in the form and with the certification prescribed by the Contracting Officer Such claim she be submitted promptly but in no event later than one year from the effective date of termination, unless one or more extensions in writing are granted by the Contracting Officer, upon request of the Contractor made in writing within such one year penod or authorized extension thereof However, if the Contracting Officer determines that the facts justify sach schion, he may receive and act upon any such termination claim at any time after such one year period or any extension thereof Upon failure of the Contractor to submit his termination claim within the time allowed, the Contracting Officer may subject to any Settlement Review Board approvals required by Part 8 of the NASA Procurement Regulation in effect as of the date of execution of this contract, determine, on the basis of information available to him, the amount, if any due to the Contractor by reason of the termination and shall thereupon pay to the Contractor the amount so determined (d) Subject to the provisions of paragraph (c) and subject to any Settlement Review Board approvals required by Part 8 of the NASA Procurement Regulation in effect as of the date of execution of this contract, the Contractor and the Contracting Officer may agree upon the whole or any part of the amount or amounts to be paid to the Contractor by reason of the total or partial termination of work pursuant to this clause. The contract shall be amended accordingly, and the Contractor shall be paid the agreed amount.

(e) In the event of the failure of the Contractor and the Contracting Officer to agree in whole or in part, as provided in paragraph (d) above, as to the amounts to be paid to the Contractor in connection with the termination of work pursuant to this clause, the Contracting Officer shall, subject to any Settlement Review Board approvals required by Part 8 of the NASA Procurement Regulation in effect as of the date of execution of this contract, determine, on the basis of information available to him, the amount, if any, due to the Contractor by reason of the termination, and shall pay to the Contractor the amount determined as follows

(i) if the termination of the contract is determined to be for the convenience of the Government, there shall be included

(A) an amount for direct labor hours (as defined in the Schedule of the contract) which shall be determined by multiplying the number of direct labor hours expended prior to the effective date of the Notice of Termination by the hourly rate or rates set forth in the Schedule, less any hourly rate payments theretofore made to the Contractor,

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CFR TITLE 41 CHAPTER 18

TIME AND MATERIAL AND LABOR HOUR CONTRACTS

(B) an amount (computed pursuant to the provisions of the contract providing for payment for materials) for material expenses incurred prior to the effective date of the Notice of Termination, not previously paid to the Contractor for the performance of this contract;

(C) an amount for labor and material expenses computed as if the expenses were incurred prior to the effective date of the termination reasonably incurred after the effective date of the Notice of Termination with the approval of or as directed by the Contracting Officer, provided, that the Contractor shall discontinue such expenses as rapidly as practicable; (D) to the extent not included in (A), (B), and (C) above, the cost of settling and paying claims arising out of the termination of work under subcontracts or orders, as provided in paragraph (b)(v) above, which are properly chargeable to the terminated portion of this contract; and

(E) the reasonable costs of settlement, including accounting, legal, clerical, and other expenses reasonably necessary for the preparation of settlement claims and supporting data with respect to the terminated portion of the contract and for the termination and settlement of subcontracts thereunder, together with reasonable storage, transportation, and other costs incurred in connection with the protection or disposition of termination inventory; or

(ii) if the termination of the contract is for the default of the Contractor, there shall be included the amounts computed in accordance with (i) above except there shall not be included

(A) any amount for the preparation of the Contractor's settlement proposal; or

(B) the portion of the hourly rate allocable to profit for any direct labor hours expended in furnishing materials and services not delivered to and accepted by the Government.

(f) The Contractor shall have the right of appeal, under the "Disputes" clause of this contract, from any determination made by the Contracting Officer under paragraphs (c) or (e), above, except that if the Contractor has failed within the time provided in paragraph (c), above, to request extension of such time, he shall have no such right of appeal. In any case where the Contracting Officer has made a determination of the amount due under paragraph (c) or (e), above, the Government shall pay to the Contractor the following: (i) if there is no right of appeal hereunder, or if no timely appeal has been taken, the amount so determined by the Contracting Officer; or (ii) if an appeal has been taken, the amount finally determined on such appeal.

(g) In arriving at the amount due to the Contractor under this clause, there shall be deducted (i) all unliquidated advance or other payments theretofore made to the Contractor, applicable to the terminated portion of this contract; (ii) any claim which the Government may have against the Contractor in connection with this contract; and (iii) the agreed price for, or the proceeds of sale of, any materials, supplies, or other things acquired by the Contractor or sold pursuant to the provisions of this clause and not otherwise recovered by or credited to the Government.

(h) In the event of a partial termination, the hourly rates for direct labor hours with respect to the work under the continued portion of the contract shall be equitably adjusted by agreement between the Contractor and the Contracting Officer, and such adjustment shall be evidenced by an amendment to this contract.

(i) The Government under such terms and conditions as it prescribes may make partial payments and payments on account against costs incurred by the Contractor in connection with the terminated portion of the contract, whenever in the opinion of the Contracting Officer the aggregate of such payments shall be within the amount to which the Contractor will be entitled hereunder. If the total of such payments is in excess of the amount finally determined to be due under this clause, such excess shall be payable by the Contractor to the Government upon demand, together with interest computed at the rate established by the Secretary of the Treasury pursuant to Public Law 92-41, 85 STAT 97, for the period from the date such excess payment is received by the Contractor to the date on which such excess is repaid to the Government; provided, however, that no interest shall be charged with respect to any such excess payment attributable to a reduction in the Contractor's claim by reason of retention or other disposition of termination inventory until ten (10) days after the date of such retention or disposition, or such later date as determined by the Contracting Officer by reason of the circumstances.

7.901-5 Government Property. In accordance with 13.703, insert the clause(s) required therein except that:

(i) the phrase "estimated cost, fixed-fee or delivery or performance dates, or all of them,” appearing in paragraph (a) shall be deleted and the phrase "ceiling price, hourly rate, the delivery or performance date, or all of them," substituted therefor;

(ii) paragraph (i) shall be deleted, and paragraph (i) of the clause set forth in 13.702(a) substituted therefor; and

(iii) add to the end of (g)(3), the following: "For any such repairs or renovations so directed, the Contracting Officer shall, upon written request of the Contractor, equitably adjust the ceiling price, hourly rate, delivery or performance date, or all of them in accordance with the procedures provided for in the clause of this contract entitled "Changes". In any such equitable adjustment due regard shall be given to the liability of the Contractor as determined under (1) above."

7.901-6 Payments.

PAYMENTS (JUNE 1972)

The Contractor shall be paid as follows upon the submission of invoices or vouchers approved by the Contracting Officer. (a) Hourly Rate.

NASA PROCUREMENT REGULATION

7.901-6

TIME AND MATERIAL AND LABOR HOUR CONTRACTS

invoices or vouchers. 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 provisions of this contract (including, without limitation, provisions relating to patents and the provisions of (f) and (g) below), the Government shall as promptly as may be practicable pay any balance due and owing the Contractor. The completion invoice or voucher, and substantiating material, shall be submitted by the Contractor as promptly as may be practicable following completion of the work under this contract, but in no event later than one (1) year (or such longer period as the Contracting Officer may, in his discretion, approve in writing) from the date of such completion. (f) The Contractor and each assignee, under an assignment entered into under this contract and in effect at the time of final payment under this contract, shall execute and deliver, at the time of and as a condition precedent to final payment under this contract, a release discharging the Government, its officers, agents, and employees of and from all liabilities, obligations, and claims arising out of or under this contract, subject only to the following exceptions:

(i) specified claims in stated amounts, or in estimated amounts where the amounts are not susceptible of exact statement by the Contractor;

(ii) claims, together with reasonable expenses incidental thereto, based upon the liabilities of the Contractor to third parties arising out of the performance of this contract, which are not known to the Contractor on the date of the execution of the release, and of which the Contractor gives notice in writing to the Contracting Officer not more than six (6) years after the date of the release or the date of any notice to the Contractor that the Government is prepared to make final payment, whichever is earlier; and

(iii) claims for reimbursement of costs (other than expenses of the Contractor by reason of its indemnification of the Government against patent liability), including reasonable expenses incidental thereto, incurred by the Contractor under the provisions of this contract relating to patents.

(g) The Contractor agrees that any refunds, rebates, or credits (including any interest thereon) accruing to or received by the Contractor or any assignee, which arise under the materials portion of this contract and for which the Contractor has received 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 thereon) in form and substance satisfactory to the Contracting Officer.

The following may be inserted as paragraph (b)(4) in the foregoing "Payments" clause where 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, and in accordance with the limitations contained in 3.406-1(d)(i) and (ii):

(4) When the nature of the work to be performed requires the Contractor to furnish material which is regularly sold to the general public in the normal course of business by the Contractor, the price to be paid for such material, notwithstanding (b)(1), above, shall be on the basis of an established catalog or list price, in effect when the material is furnished, less all applicable discounts to the Government; provided that in no event shall such price be in excess of the Contractor's sales price to his most favored customer for the same item in like quantity, or the current market price, whichever is lower.

7.901-7 Assignment of Claims. In accordance with 7.103-8, insert the clause set forth therein. 7.901-8 Disputes. Insert the clause set forth in 7.103-12.

7.901-9 Convict Labor. In accordance with Part 12, Subpart 2, insert the clause set forth in 7.104-17.

7.901-10 Subcontracts.

SUBCONTRACTS (JUNE 1966)

(a) No contract shall be made by the Contractor for the furnishing of any of the work herein contracted for without the written approval of the Contracting Officer. For the purpose of this clause, purchase of raw material or commercial stock items shall not be considered work.

(b) The Contractor agrees that no subcontract placed under this contract shall provide for payment on a cost-pluspercentage-of-cost basis.

7.901-11 Contract Work Hours Standards Act-Overtime Compensation. Insert the clause set forth in 12.303-1.

7.901-12 Walsh-Healey Public Contracts Act. Insert the clause set forth in 12.605.

7.901-13 Equal Opportunity. In accordance with the provisions in 12.804, insert the appropriate clause set forth therein.

7.901-14 Officials Not To Benefit. Insert the clause set forth in 7.103-19. 7.901-15 Covenant Against Contingent Fees. Insert the clause set forth in 1.503.

NASA PROCUREMENT REGULATION

7.901-15

CONTRACT CLAUSIS

7901–36 Audi: by National Aeronautics and Space Administration. Ir. sccordance with 7 106– 42(a), insert the clause se forth therem.

7901-1′′ Examination of Records by the Comptroller Genera. In accordance with 7.184–15, insert the clause set forth therem

7.901-18 Clear. Ar and Water Inser, the clause se: forth m 12302-2

7901-19 Notice and Assistance Regarding Paten: ane Copyrigh: Infringement. Insert the clause set forth in 9.104.

7901–20 Authoraation and Consen: Inser: the clause se forth in § 102(a), or § 102/b) if the contract is required i support of research and developmen: work

7.901-21 Inspection and Correction of Defects.

INSPECTION AND CORRECTION OF DEFECTS JUNE 1966

te: All material furnished and services performed by the Contractor under the contrac shall be subiect to inspection

and test by the Government to the exten: practicable at all times including the period of performance, and places, and to

any event prior to acceptance The Government through any authorized representative, may inspect the plan, or plants of the Contractor or of any of he subcontractors engaged in the performance of this contrac. I am inspection at test S made by the Government or the premises of the Contractor or a subcontractor the Contractor shal, provide and shal: require subcontractors to provide al reasonable facilities and assistance for the saters and convenience of the Government inspectors in the performance of ther duties. All inspections and tests by the Government shai; be performed in such a manner as will not unduly delay the work Except as otherwise provided in this contract acceptance of services performed and materials furnished under this contract shall be made at the place of delivery as promptly as practicable after delivery and shall be deemed to have beer made no later than sixty (60) days after the date of such delivery, if acceptance has not been made cariter within such period

(b) At any time during performance of the contract but not later than sn (6 months (or such other veroë is may be provided in the schedule after acceptance of the services or materials as delivered in accordance with the requirements of this contract, the Government may require the Contractor to remedy by correction or replacement, as directed by the Contracting Officer, any services or material which at the time of deivers thereof failed to comply with the requirement of this contract. Except as otherwise provided in paragraph (c) hereal below the allowability of the cost of any such replacement or correction shall be determined as provided in the "Payments clause of this contract, but the “hourly rate" for labor hours incurred in such replacement or correction shall be reduced so as to exclude the portion of such rate attributable to profit. Corrected or replacemen: materials and services shall not be tendered again for acceptance unless the former tender and the requirement of correction or replacement is disclosed If the Contractor fails to proceed with reasonable promptness to perform such replacement or correction and if such replacement or correction may be performed within the ceiling price, or the ceiling price as increased by the Government, the Government (1) may by contract or otherwise perform such replacement or correction and charge to the Contractor any increased coST DOCKsioned the Government thereby, and may deduct such increased cost from any amounts due the Contractor under this contract (or require repayment of any payments theretofore made, or (ii) may terminate this contract for default as provided in the "Termination" clause of this contract Failure to agree to the amount of any such mcreased cost to de charged to the Contractor, or to such reduction in or repayment of any amount due under this contract, shall be a dispute concerning a question of fact within the meaning of the "Disputes" clause of this contract.

(c) Notwithstanding the provisions of paragraph: (b) above, the Government may at any time require the Contractor to remedy by correction or replacement, without cost to the Government, any failure by the Contractor to comply with the riquirements of this contract, if such failure is due to fraud, lack of good faith or willful misconduct on the part of any of the Contractor's directors or officers, or on the part of any of his managers, superintendents, or other equivalent representatives, who has supervision or direction of (i) all or substantially all of the Contractor's business; (ii) al' or substantially all of the Contractor's operations at any one plant or separate location in which this contract is being performed; (ii) a separate and complete major industrial operation in connection with the performance of this contract, at (iv) all or substantially all of the Contractor's operations under this contract The Government may at any time also require the Contractor to remedy by correction or replacement, without cost to the Government, any such failure caused by one or more individual employees selected or retained by the Contractor after any such supervisory person has reasonable grounds to believe that any such employer is habitually careless or otherwise unqualified.

(d) The provisions of this clause shall apply to any corrected or replacement services or materials.

(e) The Contractor shall provide and maintain an inspection system acceptable to the Government covering the material, fabricating methods, and the work and services hereunder. Records of all inspection work by the Contractor shall be complete and available to the Government at all reasonable times during performance of this contract and for such longer period as may be specified in this contract.

(f) Except as provided in this clause and as may be provided in the Schedule, the Contractor shall have no obligation or liability to correct or replace materials furnished and services performed under this contract which at the time of delivery are defective in material or workmanship or otherwise not in conformity with the requirements of this contract (g) Except as otherwise provided in the Schedule, the Contractor's obligation to correct or replace Governmentfurnished property (which is property in the possession of or acquired directly by the Government and delivered or otherwise made available to the Contractor) shall be governed by the provisions of the "Government Property" clause of

this contract.

7.901-16

CFR TITLE 41 CHAPTER 18