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the proposed modification should be stated e.g., reasons for changes, existence of changed conditions, causes of delay and excusability. If the modification is pursuant to the "Changes" clause, the details of the change should be set forth. If the time of performance is increased or decreased, the extension or decrease should be stated definitely or a statement made that the time for performance remains unchanged. If the contract price is increased or decreased the increase or decrease should be stated definitely or a statement made that the contract price remains unchanged. The contractor should be requested to indicate his acceptance on Standard Form 30. (See 16.103.)

16.815-2 Supplemental Agreements. Amendments of Solicitation/Modification of Contract (Standard Form 30) shall be used to formalize contract modifications providing for work not within the scope of the contract except that provision shall be made for consent of surety in accordance with the format set forth in 10.111. (See 16.103.)

16.815-3 Continuation of Modifications. Standard Form 36 or blank sheet(s) of paper may be used for continuation of modifications (see 16.101-2(d)).

16.816 Identical Bid Report for Procurement (DJ 1500). This form shall be used in reporting identical bids, pursuant to 1.114.

16.817 [Reserved]

16.818 Inventory Schedules (DD Forms 542, 543, 544, and 545). The following forms are prescribed for use by contractors to report contractor inventory for disposition and to support settlement proposals submitted on DD Forms 540, 541, or 547:

(i) DD Form 542 (Inventory Schedule A-Metals in Mill Product Form) and DD Form 542c (Continuation Sheet);

(ii) DD Form 543 (Inventory Schedule B-Raw Materials) and DD Form 543c (Continuation Sheet);

(iii) DD Form 544 (Inventory Schedule C-Work in Process) and DD Form 544c (Continuation Sheet); and

(iv) DD Form 545 (Inventory Schedule D-Dies, Jigs, Fixtures, etc., and Special Tools) and DD Form 545c (Continuation Sheet).

16.850 NASA Small Business Subcontracting Program Quarterly Report of Participating Large Company on Subcontract Commitments to Small and Minority Business Concerns (NASA Form 524). NASA Form 524, NASA Small Business Subcontracting Program Quarterly Report of Participating Large Company on Subcontract Commitments to Small and Minority Business Concerns, shall be used for the submission of reports by all NASA contractors who participate in the NASA Subcontracting Small Business Program as required by 1.707-5. Instructions for its use are printed on the form.

16.851 Pre-Award Survey of Prospective Contractor (DD Form 1524). DD Form 1524, PreAward Survey, shall be used in accordance with instructions contained in Part 1, Subpart 9. 16.852 Procurement Request (NASA Form 404). NASA Form 404, Procurement Request, shall be used for initiating procurements in accordance with 1.356 and NASA Management Instruction 5101.12, "Policy and Procedures Concerning Procurement Requests."

16.853 Checklist for Negotiated and Advertised Contract File Content (Award File) (NASA Form 1098.) NASA Form 1098, Checklist for Negotiated and Advertised Contract File Content (Award File) is to be used in the official contract file of all negotiated and advertised procurements in excess of $10,000 to provide an index to the documentation contained therein. If additional space is necessary, supplemental pages may be added and the added pages identified in the last spaces of the right hand column of page two of the form. This form is not necessary for documents such as Change Orders, Novation Agreements, and Administrative changes.

16.854 Request for Contractor Clearance (NASA Form 446). NASA Form 446, Request for Contractor Clearance, shall be used in accordance with NASA Management Instruction 1650.1, if the proposed procurement will involve access to classified information.

16.855 [Reserved]

16.856 Contractor Financial Management Report (NASA Form 533 Series of Reports).

The NASA Form 533 series of reports is designed for contractors to use in submitting, at required intervals, their financial and manpower experience and projections. The basic policy, procedures, and instructions for the preparation and submission of the reports are set forth in NASA Management Instruction 9501.1A, "Contractor Financial Management Reporting Sys

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tems" and in the NASA Handbook "Procedures for Contractor Reporting of Correlated Cost and Performance Data" (NHB 9501.2A) and on the reverse side of the forms.

16.857 Bills of Material (DD Forms 346 and 347). DD Form 346, Raw (Basic Processed) and Semi-Fabricated Stock Form, and DD Form 347, Bill of Materials for Subcontracted PartsPurchased Parts-Government-Furnished Property, are authorized for use to describe the materials required for furnishing the supplies to be delivered under contract, in accordance with 7.105

6.

16.858 [Reserved]

16.859 Letter Contracts.

16.859-1 General. This paragraph prescribes the forms to be used in connection with letter contracts contemplating cost-reimbursement type or fixed-price type definitive contracts.

16.859-2 Cost-Reimbursement Type Letter Contract. The following forms are prescribed for use in letter contracts contemplating cost-reimbursement type definitive contracts:

(i) Cover Page-NASA Form 551;

(ii) Letter of Transmittal-NASA Form 551-1;

(iii) Schedule Format-NASA Form 551-2;

(iv) General Provisions-NASA Form 551-3; and

(v) NASA Form 417 or 418, as appropriate, in accordance with the instructions contained in Article V of the Schedule Format-NASA Form 551-2. In addition, the prescribed clauses set forth in NASA Form 417 or 418 shall be modified or deleted and additional clauses, applicable to the kinds of such contracts for which such forms were designed, shall be included in the contracts as required or authorized by 7.402 through 7.404, or 7.203 through 7.205, respectively. Also, see instructions contained in Article Vb. of the Schedule Format-NASA Form 551-2. 16.859-3 Fixed-Price Type Letter Contract. The following forms are prescribed for use in letter contracts contemplating fixed-price type definitive contracts:

(i) Cover Page-NASA Form 551;

(ii) Letter of Transmittal-NASA Form 551-1;

(iii) Schedule Format-NASA Form 551-2;

(iv) General Provisions-NASA Form 551-3, except that Clause 5, "Termination," shall be deleted and the "Termination" clause set forth in 8.701-1 shall be substituted therefor; and (v) NASA Form 247, or Standard Form 32 and NASA Form 250, as appropriate, in accordance with the instructions contained in Article V of the Schedule Format-NASA Form 551-2. In addition, the prescribed clauses set forth in NASA Form 247, Standard Form 32, or NASA Form 250 shall be modified or deleted and additional clauses, applicable to the kinds of such contracts for which such forms were designed, shall be included in the contract as required or authorized by 7.302 through 7.304, or 7.103 through 7.109, respectively. Also, see instructions contained in Article Vb. of the Schedule Format.

16.859-4 Letter Contract Forms.

(a) Format Cover Page for Letter Contracts (NASA FORM 551, April 1962).

is designated as the office to make payments, if any, in accordance with this contract. The sums to be expended by the Government hereunder are chargeable to the following appropriations, the available balances of which are sufficient to cover the same:

The office having overall administrative responsibility for this contract is:

Purchase Request No:

Negotiator:

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Priority Rating

Program:

MISCELLANEOUS FORMS

is certified for national defense use, under DMS Regulation No. 1.

This instrument has been negotiated pursuant to 10 U.S.C. 2304(a)( )

(b) Format Letter of Transmittal for Letter Contracts (NASA Form 551-1, April 1962).

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

Date:

Letter Contract
Contract No:

To:
Gentlemen:

1. This letter, when accepted by you, will constitute a Letter Contract bearing the contract number above indicated, whereby you, as Contractor, agree to furnish to the Government the supplies or services set forth in the attached Contract Schedule in accordance with the terms, conditions, and administrative provisions set forth in the Schedule and in the current edition of the NASA Forms identified in the Enclosures listed below, and such NASA Forms, if any, as are referenced therein, all of which are attached hereto and made a part hereof. This letter, Schedule, and the Forms are submitted to you in quadruplicate.

2. If you agree to the terms set forth in the attached Schedule and in the NASA Forms listed in the Enclosures, please indicate your acceptance by signing the original and two copies of this Letter in the place provided in the lower left corner and return the executed copies to the Contracting Officer who signed this letter on behalf of the United States. 3. It is understood by your acceptance hereof that you will undertake, without delay, to enter into negotiations with the National Aeronautics and Space Administration looking to the execution of a definitive contract and to furnish all cost and price information requested by the Contracting Officer. The form and provisions of the definitive contract which the National Aeronautics and Space Administration intends to use as the basis for negotiation are set forth in the Schedule.

3 Enclosures

By.

1. Schedule-NASA Form 551-2

2. NASA Form 551-3

3. NASA Form ...........

THE UNITED STATES OF AMERICA

(Contracting Officer)

(Local reproduction is authorized)

(c) Schedule Format for Letter Contracts (NASA Form 551-2, September 1962).

ARTICLE I STATEMENT OF WORK

SCHEDULE FORMAT

a. [Include a complete description of the supplies to be furnished or work to be done in the same detail as in a definitive contract.]

b. [Include all pertinent specifications or references thereto in the same detail as in a definitive contract.] ARTICLE II DELIVERY OR PERFORMANCE SCHEDULE

[Self-explanatory, but state, by item, whether delivery will be f.o.b. origin or transportation prepaid to destination. If f.o.b. origin, include statement "for shipment on G.B.L.]

ARTICLE III CONSIDERATION AND PAYMENT

a. The maximum amount for which the Government will be liable if this Letter Contract is terminated is $......... b. Contractor's invoices or vendor's shipping documents used as invoices shall be made out to the Office designated to make payment marked, "Attention: Fiscal Officer," and delivered to the Contracting Officer. Payment will be made as provided in the Payment clause of NASA Form 551-3, except as otherwise stated below:

c. [Set forth any prices or rates of payment which the Government and Contractor may have agreed to or which the Government is offering to pay for supplies to be delivered or services to be performed under this Letter Contract or for identified portions of such work or services.]

ARTICLE IV INSPECTION AND ACCEPTANCE

[Name the place where inspection is to be made and specify details concerning inspection and acceptance in the same detail as in a definitive contract.]

ARTICLE V CLAUSES INCORPORATED

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a. There are incorporated by reference in this Letter Contract all the clauses contained in NASA Form ..... for the following clauses, which are to be deleted for the purpose of this Letter Contract:

(.....) except

(i) [Where a fixed-price R & D contract is contemplated, insert NASA Form 247 and date of the current form in the blank above, and list as the clauses to be deleted "Payments" and "Termination for Convenience of the Government.” (ii) [Where a fixed-price supply contract is contemplated, the reference in the blank above should be to Standard Form 32 and NASA Form 250 and dates of the current forms, and list as the clauses to be deleted "Payments" and "Termination for Convenience of the Government"; or

(iii) [Where a cost-reimbursement type contract is contemplated, insert NASA Form 417 or 418 and the date of the current form, as appropriate, in the blank above, and list as the clauses to be deleted “Limitation of Cost," "Allowable Cost, Fixed-Fee, and Payment," "Termination," and "Limitation on Withholding of Payments."]

b. [Identify and reference any other clause appropriate to the contract and attach such clause to the Schedule.] ARTICLE VI DEFINITIVE CONTRACT

a. The definitive contract will be negotiated and executed on or before ....., unless such date is extended in writing by the Contracting Officer.

.....

b. It is contemplated that the definitive contract will be negotiated on the basis of NASA Form (.....) and such additional clauses as are appropriate to the subject matter of this contract. However, the parties are not hereby committed to the negotiation of this type of contract. (Local reproduction is authorized)

(d) General Provisions for Letter Contracts (NASA Form 551-3, 1962).

GENERAL PROVISIONS FOR LETTER CONTRACTS

INDEX OF CLAUSES

1. Direction to Proceed

2. Contract Clauses Incorporated

3. Authority to Obligate Funds

4. Payments

5. Termination

1. DIRECTIONS TO PROCEED

Except as otherwise expressly provided to the contrary in this Letter Contract, the Contractor is directed, upon his acceptance of this Letter Contract, to proceed immediately to procure the necessary materials, and to commence the manufacture of the supplies or performance of the services called for herein, and to pursue such work with all diligence to the end that the supplies or services called for under Article I of the Schedule will be delivered or performed in accordance with Article II of the Schedule and all other terms of this Letter Contract.

2. CONTRACT CLAUSES INCORPORATED

The contract clauses set forth in the NASA contract form identified in the Schedule, subject to the alterations in such form shown in the Schedule, and including any other clauses referenced in the Schedule as applicable to this Letter Contract and attached to the Schedule, are hereby incorporated into this Letter Contract and made a part hereof. 3. AUTHORITY TO OBLIGATE FUNDS

The maximum amount for which the Government shall be liable if this contract is terminated is specified in the Schedule, and any expenditure or obligation by the Contractor in excess of that amount, in furtherance of performance hereunder, shall be at the Contractor's own risk.

4. PAYMENTS

(a) If this Letter Contract is on a fixed-price basis, and is governed generally by the provisions of a fixed-price contract form (SF-32 and NASA Form 250, or NASA Form 247), the Government will pay to the Contractor, not to exceed the maximum amount specified in Article IIIa of the Schedule, upon the submission of proper invoices or vouchers, the prices, if any, specified in Article III of the Schedule for supplies delivered and accepted or services rendered and accepted, less deductions, if any, provided for in this Letter Contract. Unless otherwise specified, payment will be made on partial deliveries accepted by the Government.

(b) If this Letter Contract is on a cost-reimbursement basis and is governed generally by the provisions of a costreimbursement type contract form (NASA Form 417 or 418) referenced in the Schedule, the Government will pay to the Contractor, not to exceed the maximum amount specified in Article IIIa of the Schedule, upon the submission of proper invoices or vouchers, his costs for the performance of this contract determined by the Contracting Officer to be allowable in accordance with (i) Part 15, Subpart 2 of the NASA Procurement Regulation as in effect on the date of this Letter Contract, and (ii) any special provisions concerning allowable costs or payment set forth in the Schedule.

(c) Nothing shall be paid under this Letter Contract to the Contractor for profit or fee, except as provided in the Termination clause of this Letter Contract.

5. TERMINATION

(a) In case a definitive contract is not executed by the date specified in Article VI of the Schedule, because of the inability of the parties to agree upon a definitive contract, this Letter Contract may be terminated in its entirety by either party by delivering to the other party a notice in writing specifying the effective date of termination, which date shall not be earlier than thirty (30) days after receipt of such notice.

(b) The performance of work under this Letter Contract also may be terminated by the Government in accordance with this clause in whole, or from time to time in part:

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CFR TITLE 41 CHAPTER 18

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(i) whenever the Contractor shall default in performance of this Letter Contract in accordance with its terms (including in the term "default" any such failure by the Contractor to make progress in the prosecution of the work hereunder as endangers such performance), and shall fail to cure such default within a period of ten days (or such longer period as the Contracting Officer may allow) after receipt from the Contracting Officer of a notice specifying the default;

or

(ii) whenever for any reason the Contracting Officer shall determine that such termination is in the best interest of the Government. Any such termination shall be effected by delivery to the Contractor of a Notice of Termination specifying whether termination is for the default of the Contractor or for the convenience of the Government, the extent to which performance of work under this Letter Contract is terminated, and the date upon which such termination becomes effective. If, after notice of termination of this Letter Contract for default under (i) above, it is determined for any reason that the Contractor was not in default pursuant to (i) above, 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 pursuant to the provisions of the clause of this Letter Contract relating to excusable delays, the Notice of Termination shall be considered to have been issued under (ii) above, and the rights and obligations of the parties hereto shall in such event be governed accordingly.

(c) After receipt of a Notice of Termination and except as otherwise directed by the Contracting Officer, the Contractor shall:

(i) stop work under this Letter Contract on the date and to the extent specified in the Notice of Termination; (ii) place no further orders or subcontracts for materials, services, or facilities, except as may be necessary for completion of such portion of the work under this Letter Contract as is not terminated;

(iii) terminate all orders and subcontracts to the extent that they relate to the performance of work terminated by the Notice of Termination;

(iv) assign to the Government, in the manner, at the times, and to the extent directed by the Contracting Officer, all of the right, title, and interest of the Contractor under the orders and subcontracts so terminated, in which case the Government shall have the right, in its discretion, to settle or pay any or all claims arising out of the termination of such orders and subcontracts;

(v) with the approval or ratification of the Contracting Officer, to the extent he may require, which approval or ratification shall be final and conclusive for all purposes of this clause, settle all outstanding liabilities and all claims arising out of such termination of orders and subcontracts, the cost of which would be reimbursable in whole or in part, in accordance with the provisions of this Letter Contract;

(vi) transfer title (to the extent that title has not already been transferred) and, in the manner, to the extent, and at the times directed by the Contracting Officer, deliver to the Government (A) the fabricated or unfabricated parts, work in process, completed work, supplies, and other material produced as a part of, or acquired in respect of the performance of, the work terminated by the Notice of Termination, (B) the completed or partially completed plans, drawings, information, and other property which, if this Letter Contract had been completed, would be required to be furnished to the Government, and (C) the jigs, dies, and fixtures, and other special tools, and tooling acquired or manufactured for the performance of this Letter Contract, for the cost of which the Contractor has been or will be reimbursed under this Letter Contract;

(vii) use his best efforts to sell in the manner, at the times, to the extent, and at the price or prices directed or authorized by the Contracting Officer, any property of the types referred to in (vi) above, provided, however, that the Contractor (A) shall not be required to extend credit to any purchaser, and (B) may acquire any such property under the conditions prescribed by and at a price or prices approved by the Contracting Officer; and provided further that the proceeds of any such transfer or disposition shall be applied in reduction of any payments to be made by the Government to the Contractor under this Letter Contract or shall otherwise be credited to the price or cost of the work covered by this Letter Contract or paid in such other manner as the Contracting Officer may direct;

(viii) complete performance of such part of the work as shall not have been terminated by the Notice of Termination; and

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

The Contractor shall proceed immediately with the performance of the above obligations notwithstanding any delay in determining the amount of any items of reimbursable cost, under this clause. At any time after expiration of the plant clearance period, as defined in Part 8 of the NASA Procurement Regulation as it may be amended from time to time, the Contractor may submit to the Contracting Officer a list, certified as to quantity and quality, of any or all items of termination inventory not previously disposed of exclusive of items the disposition of which has been directed or authorized by the 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 thereafter, the Government will accept such items and remove them or enter into a storage agreement covering the same, provided that the list submitted shall be subject to verification by the Contracting Officer upon removal of the items, or if the items are stored, within forty-five (45) days from the date of submission of the list, and any necessary adjustment to correct the list as submitted shall be made prior to final settlement.

(d) After receipt of a Notice of Termination, the Contractor shall submit to the Contracting Officer his termination claim in the form and with the certification prescribed by the Contracting Officer. Such claim shall be submitted promptly, but in no event later than one (1) 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 (1) year period or authorized extension thereof. However, if the Contracting Officer determines that the facts justify such action, he may receive and act upon any such termination claim at any time after such one (1) year period or any extension

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16.859-4