order, or refusal to ship against an accepted purchase order under these circumstances will not be considered justification for a waiver of the purchase requirement and adjustment in the contract price as specified in paragraph (b) of the contract clause in § 18-1.315(e). In the event the contractor or subcontractor whose purchase order is rejected or to whom shipments are refused for the foregoing reasons, and the customer and the management of the plant are in disagreement on whether such indebtedness actually exists or the amount of such indebtedness, the Government will require the plant to accept the contractor's purchase order and to make shipments against such purchase order on a "cash-on-delivery" (C.O.D.) basis for each lot shipped. If necessary, arrangements can be made with the contracting officer for "progress payments" by the Government to finance the C.O.D. requirements. Such measures will be independent of and have no effect on the final disposition of the alleged indebtedness or controversy between the contractor and management of the Langer plant.

(5) The cost differential between Langer-made bearings and imported bearings shall not be used as justification to avoid the purchase and use of bearings from the plant.

(6) Subsequent to award of a contract which includes the clause, the contracting officer will waive the "use" requirement of the clause, when the prime contractor or his subcontractor, whichever is required to place a purchase order on the plant pursuant to the contract or the subcontract, submits a written request for waiver and the contracting officer determines that the contractor or subcontractor has on hand jewelled subassemblies or jewelled end items such as required to be delivered under the contract; and either:

(i) The production of such subassemblies or end items, specifically in performance of all or a part of the contract using Langer bearings would increase his costs or interfere with economical or normal production scheduling of the product under contract or with the production of another item; or

(ii) The delivery schedule under the contract or subcontract is such that the use of on hand jewel bearings or jewelled subassemblies or parts is necessary. (7) A contractor (or subcontractor) will not be authorized to purchase from

(e) In all procurements subject to these procedures the following clause shall be used:

REQUIRED SOURCE FOR JEWEL BEARINGS
(MARCH 1973)

(a) For the purpose of this clause:

(1) "Jewel bearings" means a piece of synthetic sapphire or ruby of any shape, except a phonograph needle, which is suitable for use in an instrument, mechanism, subassembly or part without any additional processing to the synthetic sapphire or ruby. A jewel bearing may be either unmounted, or mounted into a ring or bushing. Examples of types of jewel bearings are: watch holeolive, watch hole-straight, pallet stones (caps), vee (cone) jewels, instrument rings, cups, double cups and orifice jewels.

(2) "Price List" means the official United States Government Jewel Bearing Price List for jewel bearings which are produced by the William Langer Jewel Bearing Plant in Rolla, North Dakota, published periodically by the General Services Administration.

(3) "Plant" means the Government-owned William Langer Jewel Bearing Plant, Rolla, North Dakota.

(4) "Military Standard Jewel Bearing" means a jewel bearing conforming to Military Specification No. MIL-B-27497 (latest revision) entitled "Bearings, Jewel, Sapphire or Ruby, Synthetic."

(b) Jewel bearings required in the performance of this contract shall be procured from the Plant at prices established in the Price List dated (insert latest effective date). Each purchase order issued to the Plant under this contract shall include the prime contract number and date of the Price List cited above. The Contractor agrees that the quantities, types and sizes (including tolerances) of jewel bearings so ordered will be those required for the performance of this contract. The Contractor agrees to notify the Contracting Officer promptly of the rejection of his (or any subcontractor's) purchase order in whole or in part by the Plant. The requirement for purchase and use of jewel bearings from the Plant will be waived to the extent of such rejected orders. If such a waiver is granted, an equitable adjustment shall be made in the contract price or delivery schedule, or both, in accordance with the "Changes" clause of this contract. Further, the requirement for use (but not the requirement for purchase from the Plant) of jewel bearings may be waived by the Contracting Officer when such waiver is determined by him to be consistent with established policy.

(c) Whenever it is necessary for the Contractor or any subcontractor to redesign or re-engineer jewelled items in order to satisfy performance requirements, the Contractor or subcontractor shall provide in such redesign for the use of military standard jewel bearings. This requirement does not apply when the dimensional tolerances or config

urations of military standard jewel bearings are such that their use in the product would prevent attainment of the required level of performance specified for the item. However, when one or more nonstandard bearings must be used to satisfy performance requirements of the jewelled product but military standard bearings will function satisfactorily for other applications within the same item, the item will be required to be redesigned to provide for the use of military standard bearings in such other applications. The Contractor or subcontractor is not required to redesign a jewelled item solely for the purpose of converting from the use of nonstandard to the use of military standard jewel bearings. Nothing in this contract shall prevent any Contractor or subcontractor from voluntarily redesigning a jewelled item solely to accommodate the use of military standard bearings.

(d) The Contractor agrees to retain until the expiration of three years from the date of final payment under this contract and to make available during such period, upon request of the Contracting Officer, records showing compliance with this clause.

(e) The Contractor agrees to insert this clause, including this paragraph (e), in every subcontract and purchase order issued in performance of this contract unless he knows that the subassembly, component or part being purchased does not contain jewel bearings.

[38 FR 23327, Aug. 29, 1973]

§ 18-1.316 Disclosure of contractor performance data to other government agencies and foreign governments.

(a) Subject to any applicable security requirements, NASA installations shall honor the requests of other Government agencies for readily available information relating to the performance of prime contractors. The agency requesting the information shall be advised that it will be responsible for any further release of such information.

(b) Requests from foreign governments should similarly be honored. When such information is furnished to a foreign government, a copy of the request from the foreign government and the information furnished will be forwarded to the Assistant Administrator for International Affairs, NASA Headquarters.

(c) If there is any question as to the propriety of divulging the information to other Government agencies or to any foreign government for any reason, including the security aspect, the request shall be forwarded to the Director of Procurement for consideration, with an explanation of the reasons why the release of such information is questioned. The Director of Procurement will, prior

to approving the release of information, obtain the concurrence of:

(1) The General Counsel;

(2) The Assistant Administrator for International Affairs, if the request for information is from a foreign government; and

(3) The Director, Security Division, NASA Headquarters, if the information appears to involve a problem of security. § 18-1.317 Lease versus purchase criterion.

(a) There are many situations in which the Government's equipment requirements may be more economically filled by lease than by purchase. This is particularly true in the case of certain expensive commercial equipments. The decision to lease rather than purchase must be made on a case-by-case basis. Leasing should be used where it is in the Government's interest. The criteria to be considered in each case include the following:

(1) The Government requirement is of short duration, and purchase would be costlier than leasing (generally, longterm leasing should be avoided in the absence of compelling circumstances);

(2) The probability that the equipment will become obsolete and that replacement within a short period will be necessary; and

(3) The equipment is special or technical, and the lessor will provide the equipment, as well as maintenance and repair services, at a lower cost than would otherwise be available to the Government.

(b) Lease versus purchase decisions should be based on an economic analysis and the contract file documented to support the final decision (see §§ 18-3.501 (b) (49) and 18-3.804-2(c) (2)).

(a) Authorization to span fiscal years. When an appropriation act so provides, contracts for maintenance and operation of facilities, and contracts for support services may be entered into for periods not in excess of 12 months beginning at any time during the fiscal year covered by such act. This authority should be used to reduce the number of contracts that would otherwise have to be placed at the beginning of the new fiscal year. However, it shall not be used to place contracts that exceed a 12-month period.

(b) Contracts conditioned upon the availability of funds. When it is necessary to initiate a procurement properly chargeable to funds of a new fiscal year prior to the availability of such funds, the following clause shall be included in the invitation for bids or other solicitation and the resultant contract:

AVAILABILITY OF FUNDS (FEBRUARY 1967)

Funds are not presently available for this procurement. The Government's obligation hereunder is contingent upon the availability of appropriated funds from which payment for the contract purposes can be made. No legal liability on the part of the Government for payment of any money shall arise unless and until funds are made available to the Contracting Officer for this procurement and notice of such availability, to be confirmed in writing by the Contracting Officer, is given to the Contractor.

(c) The authority set forth in paragraph (b) of this section shall be used only for administrative operations and continuing services (such as rentals, utilities, and items of supply) which are necessary for normal operation and for which the Congress consistently appropriates funds. When this authority is used, the supplies or services shall not be accepted by the Government until funds are available to the contracting officer for the procurement and until the contracting officer has given notice to the contractor (to be confirmed in writing) of such availability. Appropriate records will be maintained to insure adequate administrative control of funds. § 18-1.319 Renegotiation performance reports.

The provisions of this section are applicable to all contracts except, (a) purchase orders made pursuant to the provisions of Subpart 18-3.6; (b) delivery orders placed under Federal Supply Schedule contracts; and (c) those contracts known to be exempt from renegotiation.

§ 18-1.319-1 Renegotiation board.

Pursuant to the Renegotiation Act of 1951, as amended (50 U.S.C. App. 12111233), the Renegotiation Board reviews profits of NASA contractors performing renegotiable contracts and subcontracts aggregating more than $1 million in a fiscal year in order to eliminate any excessive profits therefrom. Such review involves consideration of financial statements and other information furnished by both contractors and NASA.

The contracting officer shall include in the file of each contract information pertaining to the extent and effectiveness of competition obtained in the negotiation and award of the contract, the reasonableness of the prices, fees, and profits negotiated, any incentive and target formulae incorporated in the contract, the extent of risk assumed by the contractor, the contractor's efficiency in performance of the contract, and any other information which would facilitate compilation of the renegotiation performance reports described in § 18-1.319-3 below. This is particularly important in the case of incentive-type contracts where the question may be raised as to whether additional profits paid to the contractor by operation of the incentive provisions have been earned. Incentive-type contract information should be complete but succinct. To insure the collection of accurate and detailed information, the aforementioned data shall be included in the contract file as soon as it becomes available.

§ 18-1.319-3 Performance reports.

(a) Performance reports should provide complete, accurate, and objective data to the Renegotiation Board. When the Board requests contractor performance reports, the procuring installation concerned shall furnish information substantially in accordance with the checklist set forth below, including any favorable recommendations giving due credit for better than average contract performance and any unfavorable recommendations because of unsatisfactory performance. Extensive performance data shall be accumulated on incentivetype contracts in sufficient detail so that the report will clearly show, as to the basis for payment of any increments of profit or fee provided as a part of the incentive arrangement in the contract, whether such increments were earned as the result of the contractor's performance or as the result of unreliable cost estimates or unrealistic performance targets when the incentive arrangements were negotiated.

(1) Date of report;

(2) Installation making report;

(3) Source and date of request for report;

(4) Name and address of contractor (if subsidiary or division, show name of parent company);

(5) Period covered by report;

(6) List of contracts being performed during the period concerned, showing as to each:

(i) Contract number;

(ii) Date;

(iii) Total amount of contract;

(iv) Brief description of the scope of work, service, product, etc.;

(v) Method of procurement (advertised or negotiated, and extent of competition);

(vi) Type of contract;

(vii) Total billings during period; and (viii) Principal place of performance. (7) Brief description of manufacturing techniques and type of work normally performed by contractor (e.g., production, fabrication, assembly) and relative complexity of the work. State the percentage of work subcontracted;

(8) Information concerning contractor performance, including extent to which:

(i) The product or service exceeded, met, or fell below the contract requirements;

(ii) Delivery schedules were met (indicate reasons for failures to meet schedules, and compliance with requests for early deliveries, if any);

(iii) Rejections and spoilage rates were high or low and reasons therefor; (iv) Contractor met targets under incentive contracts and reasons therefor;

(v) Contractor was economical in use of materials, facilities, and manpower, and was otherwise effective in controlling production costs:

(vi) Contractor made effective use of his facilities (state whether he expanded facilities to undertake renegotiable business, and if so, was such expansion excessive); and

(vii) Strikes, stoppages, or other significant developments in labor management affected contract performance.

(9) Information concerning reasonableness of costs and profits, including:

(1) The basis for use of a particular type of contract in significant contracts (if an incentive contract, describe also the basis for negotiation of target and cost sharing formulae);

(ii) Adequacy and reliability of cost information furnished by the contractor;

(iii) Unusual risks assumed by contractor in particular contracts, e.g., close pricing, labor and material cost increases, engineering changes, shortage of materials, inventory spoilage and obso

lescence, cutbacks, terminations, and quality or performance guarantees (explain extent to which risks were reduced or minimized by types of contracts used);

(iv) Contingencies included in quoted prices;

(v) Experience as to profits received by contractor in significant contracts, especially incentive contracts, with appraisal as to whether or not profits were earned by contractor's efforts (state whether any important contracts were negotiated with no profit or at less than normal profit);

(vi) Significant refunds and voluntary price reductions, with circumstances of each;

(vii) Evaluation of contractor as a high, average, or low cost producer;

(viii) Partial financing by prompt payments under cost-plus-fixed-fee contracts;

(ix) Reasonableness of contractor's pricing policies;

(x) Return on invested capital (where applicable);

(xi) Comparison of prices with competitors' prices for same or similar products or services;

(xii) Reason for cost overruns and underruns in cost-reimbursement type contracts;

(xiii) Assistance given contractor by NASA technical and engineer personnel which reduces the contractor's risk;

(10) List of capital funds and facilities employed by contractor, with particular reference to their source, e.g., contractor's equity capital, borrowed or rented, Government-financed, or Gov

ernment-furnished;

(11) Extent to which the contractor has complied with Government policies, such as the small business program, labor surplus area program, competition in subcontracting, "make-or-buy" program, and nondiscrimination;

(12) Full information as to any terminations for default or for the convenience of the Government, to include the status of appeals or claims, if any, and the extent to which payments were made during the period concerned;

(13) Status of price revision actions and the basis for any revision completed in the period concerned;

(14) Such pertinent information on subcontracts, as is available;

(15) Appraisal of contractor's contribution to the aerospace effort, with particular emphasis on work done by him

(b) Requests for performance reports received by the Director of Procurement will be forwarded to the installation concerned. Installations will be instructed to submit their reports to the Director of Procurement (Code DKO-1). The Director of Procurement (DKO-1) will review such reports prior to forwarding them to the Renegotiation Board to ensure that the reports are consistent with each other or that discrepancies are appropriately explained.

[39 FR 13074, Apr. 11, 1974]

§ 18-1.320 Security requirements.

When NASA contractors or their employees, subcontractors, vendors, or suppliers require access to classified information, or originate classified information, at any stage in the performance of NASA contracts, the NASA installation shall follow the security procedures set forth in NASA Management Instruction 1650.1, "Industrial Security Policies and Procedures", which implements, within NASA, the Department of Defense Industrial Security Regulation (DOD 5220.22) and its companion publication, the Department of Defense Industrial Security Manual for Safeguarding Classified Information (DOD 5220.22M).

[36 F.R. 25103, Dec. 29, 1971] § 18-1.324 Warranties. § 18-1.324-1

General

A warranty clause gives the Government a contractual right to assert claims