(b)

RFP No. DE-RP08-95NV11718

se, or misappropriation; all encumbrances and costs that are incurred under
the contract and fees that are earned are in compliand with applicable
and other current terms, conditions, and intended purposes; all

claus
collectio accruing to the Contractor in connection with the work under this
contract, enditures, and all other transactions d assets are properly
recorded, maged, and reported; and financial statistical, and other reports
necessary to main accountability and man erial control are accurate,
reliable, and timely he systems of controls mployed by the Contractor shall
be documented and isfactory to DOE. ch systems shall be an integral
part of the Contractor's nagement fu dons, including defining specific
roles and responsibilities each leve of management, and holding
employees accountable for th ade acy of the management systems and
controls in their areas of assign sponsibility. The Contractor shall, as part
of the internal audit program read elsewhere in this contract, periodically
review the management syster and controls employed in programs and
administrative areas to ensure that the are adequate to provide reasonable
assurance that the objective of the systs are being accomplished and that
these systems and contres are working entively.

The Contractor shall responsible for maintaing, as a part of its operational responsibilities, aseline quality assurance prog that implements documented ormance, quality standards, and cool and assessment techniques

(a)

(b)

Furnishing of Government property. The Government reserves the right to
furnish any property or services required for the performance of the work
under this contract.

(MODIFIED) Title to property. Except as otherwise provided by the Contracting
Officer, title to all materials, equipment, supplies, and tangible personal
property of every kind and description purchased by the Contractor, for the
cost of which the Contractor is entitled to be reimbursed as a direct item of
cost under this contract, shall pass directly from the vendor to the
Government. The Government reserves the right to inspect, and to accept or
reject, any item of such property. The Contractor shall make such disposition
of rejected items as the Contracting Officer shall direct. Title to other property,
the cost of which is reimbursable to the Contractor under this contract under
the cost reimbursement portion of the contract or purchased for the
performance of work under the fixed price portion of the contract,, shall pass
to and vest in the Government upon (1) issuance for use of such property in
the performance of this contract, or (2) commencement of processing or use of
such property in the performance of this contract, or (3) reimbursement of the
cost thereof by the Government, whichever first occurs. Property furnished by

(၁)

(d)

RFP No. DE-RP08-95NV11718

the Government and property purchased or furnished by the Contractor, title to
which vests in the Government, under this paragraph are hereinafter referred to
as Government property. Title to Government property shall not be affected by
the incorporation of the property into or the attachment of it to any property
not owned by the Government, nor shall such Government property or any
part thereof, be or become a fixture or lose its identity as personality by reason
of affixation to any realty. The above requirements do not apply to items
purchased with Contractor's corporate funds in compliance with the contract
clause entitled "Promise and Commitments".

Identification. To the extent directed by the Contracting Officer, the Contractor shall identify Government property coming into the Contractor's possession or custody, by marking and segregating in such a way, satisfactory to the Contracting Officer, as shall indicate its ownership by the Government.

Disposition. The Contractor shall make such disposition of Government
property which has come into the possession or custody of the Contractor
under this contract as the Contracting Officer may direct during the progress of
the work or upon completion or termination of this contract. The Contractor
may, upon such terms and conditions as the Contracting Officer may approve,
sell, or exchange such property, or acquire such property at a price agreed
upon by the Contracting Officer and the Contractor as the fair value thereof.
The amount received by the Contractor as the result of any disposition, or the
agreed fair value of any such property acquired by the Contractor, shall be
applied in reduction of costs allowable under this contract or shall be
otherwise credited to account to the Government, as the Contracting Officer
may direct. Upon completion of the work or the termination of this contract,
the Contractor shall render an accounting, as prescribed by the Contracting
Officer, of all Government property which had come into the possession or
custody of the Contractor under this contract.

(e) Protection of government property-Management of high-risk property and classifed materials.

(1) The Contractor shall take all reasonable precautions, as directed by the Contracting Officer, or in the absence of such direction, in accordance with sound business practice, to safeguard and protect government property in the Contractor's possession or custody. Policies, practices and procedures for management of property, and in particular high-risk property and classified materials, are contained in the Department of Energy Property Management Regulations.

(2)

The Contractor must ensure that adequate safeguards are in place, and adhered to, for the handling, control and disposition of high risk property throughout its life cycle.

(3)

(1) (1)

(2)

RFP NO. DE-RP08-95NV11718

High-risk property is property that the loss or transfer of which could
pose risks to the public, the environment, or the national security
interests of the United States, and includes proliferation-sensitive,
nuclear-related or dual-use, export controlled, chemically or radioactively
contaminated, hazardous, and specially designed and produced
property, including property on the militarily critical technologies list.

Risk of loss of Government property. The Contractor shall be responsible and compensate the Government for the loss or destruction of, or damage to, Government property unless the Contractor establishes to the reasonable satisfaction of the Contracting Officer that such loss, damage or destruction was not caused by any of the following:

willful misconduct or lack of good faith or failure to exercise due care or failure to exercise prudent business judgment on the part of the Contractor's managerial personnel; or

failure of the Contractor to manage Government property in
accordance with sound business practice and an approved
property management system; or

failure of the Contractor to comply with any appropriate written direction of the Contracting Officer to safeguard such property under subparagraph (e) of this clause; or

failure of the Contractor to establish or properly maintain or
administer an approved property management system in
accordance with subparagraph (i) of this clause.

For purposes of subparagraph (f)(1) of this clause, the value of
Government property shall be determined as follows:

(i)

(ii)

For damaged property, the value of the property shall be the cost of repairing such damaged property, together with any costs incurred for temporary replacement of the damaged property. However, the value of repair costs shall not exceed the fair market value of the damaged property. If a fair market value of the property does not exist, the Contracting Officer shall determine the value of such property, consistent will all relevant facts and circumstances.

For destroyed or lost property, the value of the property shall be the fair market value of such property at the time of such loss or destruction, together with any costs associated with the

(g)

(h)

(i)

(3)

RFP NO. DE-RP08-95NV11718

disposition of destroyed property. If a fair market value of the property does not exist, the Contracting Officer shall determine the value of such property, consistent with all relevant facts and circumstances.

The cost of insurance obtained by the Contractor to cover the risk of loss referred to in subparagraph (1)(1) of this clause is not allowable.

Steps to be taken in event of loss. Upon the happening of any damage. destruction, or loss to Government property in the possession or custody of the Contractor, the Contractor shall immediately inform the Contracting Officer of the occasion and extent thereof, shall take all reasonable steps to protect the property remaining, and shall repair or replace the damaged, destroyed, or lost property in accordance with the written direction of the Contracting Officer. but shall take no action prejudicial to the right of the Government to recover therefore and shall furnish to the Government, on request, all reasonable assistance in obtaining recovery.

Use of Government property. Government property shall be used only in
accordance with the terms of this contract.

(MODIFIED) Property Management.

(1)

(2)

The Contractor shall maintain and administer an approved property
management system of accounting for and control, utilization,
maintenance, repair, protection and preservation of Government
property in its possession under the contract. The Contractor's property
management system shall be approved by the Contracting Officer and
maintained and administered in accordance with sound business
practice and in accordance with Department of Energy Property
Management Regulations and such directives or instructions which the
Contracting Officer may from time to time prescribe. The Contractor's
performance will be evaluated on meeting or exceeding agreed upon
expectations.

In order for a property management system to be approved, the Contractor shall be obligated to employ and maintain a property management system that incorporates the best business practices and methods. The system shall provide for:

(i)

(ii)

comprehensive coverage from the requirement identification,
through its life cycle to final disposition;

employee personal responsibility for Government-owned property;

(3)

(iii)

RFP No. DE-RP08-95NV11718

full integration with the Contractor's other administrative and
financial systems; and

(iv) . maintenance of a reliable method for implementing continuous
improvements established by "best in class" performers.

Additionally, in order for a property management system to be
approved, the Contractor shall: within six months after execution of the
contract, and upon such dates as required by the Contracting Officer,
complete a baseline inventory covering all items of property furnished
by the Government; and upon completion of the contract, and to
establish the liability of the outgoing Contractor, conduct a joint
reconciliation of the property inventory with the incoming Contractor.

In the event the Contractor fails to establish or maintain an approved
property management system, or fails to administer its property
management program in accordance with the approved property
management system, any damage, loss, or destruction to property
which occurs thirty (30) calendar days after the Contractor receives
written notification of such event by the Contracting Officer (by certified
mail, return receipt requested, addressed to one of the Contractor's
managerial personnel), shall be presumed to have occurred as a result
of willful misconduct or lack of good faith on the part of the Contractor's
managerial personnel, unless the Contractor can establish by clear and
convincing evidence that such damage, destruction, or loss either did
not result from the Contractor's failure to establish, maintain or
administer an approved property management system, or occurred
while an approved program or system was maintained by the
Contractor.

The term "Contractor's managerial personnel" as used in this clause means the
Contractor's directors, officers and any of its managers, superintendents, or
other equivalent representatives who have supervision or direction of:

t

1

all or substantially all of the Contractor's operations at any one facility or
separate location to which this contract is being performed; or

(i)

all or substantially all of the Contractor's business; or

(ii)

(iii)

(iv)

a separate and complete major industrial operation in connection with
the performance of this contract; or

a separate and complete major construction, alteration, or repair
operation in connection with performance of this contract; or