supplies or services covered by this contract, or (ii) the Federal Government or any state or local government refuses to accept the evidence of exemption furnished under paragraph (d) hereof, with respect to any direct tax excluded from the contract price, or (iii) the Federal Government does not furnish a tax exemption certificate or other similar evidence of exemption with respect to any direct tax excluded from the contract price, and if under either (i), (ii), or (iii) the Contractor is obliged to and does pay or bear the burden of any such tax (and does not secure a refund thereof), the contract price shall be correspondingly increased, and if interest and penalties are incurred by reason of delay in payment of such tax on the instruction of the Contracting Officer, and such interest and penalties are legally imposed, the contract price shall be correspondingly increased. If, after the contract date, the Contractor is relieved in whole or in part from the payment or the burden of any direct tax included in the contract price, or any tax directly applicable to the materials or components used in the manufacture or furnishing of the completed supplies or services by this contract, the Contractor agrees promptly to notify the Contracting Officer of such relief, and the contract price shall be correspondingly decreased or the amount of such relief paid over to the Government. Invoices or vouchers covering any increase or decrease in contract price pursuant to the provisions of this paragraph shall state the amount thereof, as a separate added or deducted item, and shall identify the particular tax imposed, increased, eliminated, or decreased.

(f) Refund or drawback.-If any tax or duty has been included in the contract price or the price as adjusted under paragraph (e) of this clause, and if the Contractor is entitled to a refund or drawback by reason of the export or re-export of supplies covered by this contract, or of materials or components used in the manufacture or furnishing of the completed supplies or services covered by this contract, the Contractor agrees that he will promptly notify the Contracting Officer thereof and that the amount of any such refund or drawback obtained will be paid over to the Government or credited against amounts due from the Government under this contract; provided, however, that the Contractor shall not be required to apply for such refund or drawback unless so requested by the Contracting Officer.

(g) Indiana gross income and bonus tax (applicable to all supplies delivered at origin hereunder f. o. b. Contractor's plant within the State of Indiana). The Indiana Gross Income and Bonus Tax is hereby construed, for the purpose of this clause, to be a direct tax as defined in paragraph (a) of this clause. All contract prices for supplies to be furnished hereunder shall include such Indiana Gross Income and Bonus Taxes as are imposed by the State of Indiana. The Contractor agrees, however, in any instance where the State of Indiana seeks to impose such tax on receipts from supplies which are shipped outside the State of Indiana either by the Contractor or by the Government, to pay such taxes under protest. The Contractor further agrees, as directed by the Contracting Officer to do so, to take all necessary action, in cooperation with and for the benefit of the Government, to secure a refund of such tax, in which event the Government agrees to reimburse the Contractor for any and all reasonable expenses incurred at the direction of the Contracting Officer. In the event the State of Indiana exempts the Contractor from the payment of such tax, or in the event the Contractor is successful in securing a refund of such tax, the Contractor agrees to reimburse the Government for the amount of such tax and any interest refunded. In the event of administrative proceedings or litigation concerning such tax, the Contractor shall keep the Contracting Officer informed thereof and shall authorize representatives of the Government to collaborate with counsel for the Contractor in settling or prosecuting claims for refund of such tax.

$2. Assignment of claims (this clause 32 supersedes clause 8 of the general provisions)

(a) Pursuant to the provisions of the Assignment of Claims Act of 1940 as amended (31 U. S. Code 203, 41 U. S. Code 15), if this contract provides for payments aggregating $1,000 or more, claims for moneys due or to become due the Contractor from the Government under this contract may be assigned to a bank, trust company, or other financing institution, including any Federal lending agency, and may thereafter be further assigned and reassigned to any such institution. Any such assignment or reassignment shall cover all amounts payable under this contract and not already paid, and shall not be made to more than one party, except that any such assignment or reassignment may be made to one party as agent or trustee for two or more parties participating in such financing. Notwithstanding any other provision of this contract, payments to an assignee

of any moneys due or to become due under this contract shall not, to the extent provided in said Act as amended, be subject to reduction or set-off.

(b) In no event shall copies of this contract or of any plans, specifications, or other similar documents relating to work under this contract, if marked "top secret," "secret," "confidential," or "restricted," be furnished to any assignee of any claim arising under this contract or to any other person not entitled to receive the same; provided, that a copy of any part or all of this contract so marked may be furnished, or any information contained therein may be disclosed, to such assignee upon the prior written authorization of the Contracting Officer.

33. Subcontracting

It is the policy of the Government as declared by the Congress to bring about the greatest utilization of small business concerns which is consistent with efficient production. The Contractor agrees to accomplish the maximum amount of subcontracting to small business concerns that the Contractor finds to be consistent with the efficient performance of this contract.

34. Notice to the Government of labor disputes

Whenever the Contractor has knowledge that any actual or potential labor disputes, either in its own plant or in the plant of any Subcontractor supplying an essential component for use in the production of the supplies to be delivered hereunder, is delaying or threatens to delay timely performance of this contract, the Contractor shall immediately give concurrent notice thereof, including all relevant information with respect thereto, to the Contracting Officer and to the applicable Armed Services Inspector.

35. Patent indemnity

The Contractor agrees to indemnify the Government and its officers, agents and employees against liability, including costs and expenses, for infringement upon any Letters Patent of the United States (except Letters Patent issued upon an application which is now or may hereafter be, for reasons of national security, ordered by the Government to be kept secret or otherwise withheld from issue) arising out of the performance of this contract or out of the use or disposal by or for the account of the Government of supplies furnished or construction work performed hereunder. The foregoing indemnity shall not apply unless the Contractor shall have been informed as soon as practicable by the Government of the suit or action alleging such infringement, and shall have been given an opportunity to present recommendations as to the defense thereof; and further, such indemnity shall not apply in any one of the following situations: (i) any infringement resulting from the addition to any such supplies of other supplies not furnished by the Contractor for the purpose of such addition; (ii) any settlement of a claim of infringement made without the consent of the Contractor, unless required by final decree of a court of competent jurisdiction; (iii) any claim of infringement arising from use or disposal outside the scope of any license limitation under which the Contractor is bound, provided that the Contractor has notified the Government of the limitation prior to the first delivery under this contract; (iv) any infringement necessarily resulting from changes (other than the substitution of another standard commercial part or component manufactured or supplied by the Contractor) order pursuant to this contract, or from specific written instructions given by the Contracting Officer directing a manner of performing the contract not normally utilized by the Contractor.

36. Disputes (supersedes clause 12 of the general provisions)

Except as otherwise provided in this contract, any dispute concerning a question of fact arising under this contract which is not disposed of by agreement shall be decided by the Contracting Officer, who shall reduce his decision to writing, and mail or otherwise furnish a copy thereof to the Contractor. Within 30 days from the date of receipt of such copy, the Contractor may appeal by mailing or otherwise furnishing to the Contracting Officer a written appeal addressed to the Secretary, and the decision of the Secretary or his duly authorized representative for the hearing of such appeals shall, unless determined by a court of competent jurisdiction to have been fraudulent, arbitrary, capricious, or so grossly erroneous as necessarily to imply bad faith, be final and conclusive; provided that, if no such appeal is taken, the decision of the Contracting Officer shall be final and conclusive. In connection with any appeal proceeding under this clause, the Contractor shall be afforded an opportunity to be heard and to offer evidence in support of its appeal. Pending final decision of a dispute here

under, the Contractor shall proceed diligently with the performance of the contract and in accordance with the Contracting Officer's decision.

87. Gratuities

(a) The Government may, by written notice to the Contractor, terminate the right of the Contractor to proceed under this contract if it is found, after notice and hearing, by the Secretary or his duly authorized representative, that gratuities (in the form of entertainment, gifts, or otherwise) were offered or given by the Contractor, or any agent or representative of the Contractor, to any officer or employee of the Government with a view toward securing a contract or securing favorable treatment with respect to the awarding or amending, or the making of any determinations with respect to the performing, of such contract; provided, that the existence of the facts upon which the Secretary or his duly authorized representative makes such findings shall be in issue and may be reviewed in any competent court.

(b) In the event this contract is terminated as provided in paragraph (a) hereof, the Government shall be entitled (i) to pursue the same remedies against the Contractor as it could pursue in the event of a breach of the contract by the Contractor, and (ii) as a penalty in addition to any other damages to which it may be entitled by law, to exemplary damages in an amount (as determined by the Secretary or his duly authorized representative) which shall be not less than three nor more than ten times the costs incurred by the Contractor in providing any such gratuities to any such officer or employee.

(c) The rights and remedies of the Government provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or under this contract.

38. Examination of records (this clause is applicable if this contract was entered into by means of negotiation, but is not applicable if this contract was entered into by means of formal advertising)

(a) The Contractor agrees that the Comptroller General of the United States or any of his duly authorized representatives shall, until the expiration of three years after final payment under this contract, have access to and the right to examine any directly pertinent books, documents, papers, and records of the Contractor involving transactions related to this contract.

(b) The Contractor further agrees to include in all his subcontracts hereunder a provision to the effect that the subcontractor agrees that the Comptroller General of the United States or any of his duly auhorized representatives shall, until the expiration of three years after final payment under the subcontract, have access to and the right to examine any directly pertinent books, documents, papers, and records of such subcontractor involving transactions related to the subcontract. The term "subcontract" as used in this clause excludes (i) purchase orders not exceeding $1,000 and (ii) subcontracts or purchase orders for public utility services at rates established for uniform applicability to the general public.

39. Reporting of royalties

(a) The Contractor agrees to report in writing to the Contracting Officer within sixty days after 30 June and 31 December of each calendar year during the period of this contract, as it may be extended, all running royalty rates, and the total amount (if in excess of $1,000) of such running royalties for the six months period ending on each such date, paid or to be paid by Contractor directly to a licensor under a patent or invention on

(i) the quantity of each additive used as a component in the product or products delivered pursuant to this contract,

(ii) each refinery process operation from which, during the period covered by the report, 75% or more of the liquid output is incorporated into Contractor's production of finished products of the same class as the respective product or products covered by this contract ("finished products of the same class" refers to such commodity types as aviation lubricating oils, heavy duty engine oils, Grade 100 and higher aviation gasolines, other gasolines, diesel fuels, jet fuels, residual fuel oils, etc.), and

(iii) the finished product or products delivered pursuant to this contract. Each such report with respect to (ii) shall contain an allocation or estimate by the Contractor of the percent of such total payments set forth pursuant to (ii) which is attributable to deliveries to the Government hereunder. Such reports shall also indicate the names and addresses of the licensors to whom such payments are made, and either the patent numbers involved or such other informa

tion known to Contractor as will permit identification of the patents or patent applications on which such royalties were or are to be paid. The Contractor shall, at Government expense, furnish such further detailed information relating to such royalties as may be requested in writing by the Contracting Officer.

(b) Reports to be furnished hereunder may be consolidated with reports applicable under any or all other contracts which Contractor has with the Armed Services; a written reference by Contractor to any such consolidated report or reports furnished to any Government agency and covering the period of performance of this contract shall constitute compliance with this clause. The reference to any such consolidated report shall include the date of preparation, the period it covered and the office with which filed.

40. Scope of contract

The Contractor shall furnish and deliver all the supplies and perform all the services as set forth in the Schedule for the prices stated therein. The rights and obligations of the parties to this contract shall be subject to and governed by the General Provisions, these Additional General Provisions and the Schedule. To the extent of any inconsistency between any specifications which are incorporated in this contract by reference and the General Provisions (including the Additional General Provisions) or the Schedule, the General Provisions (including the Additional General Provisions) and the Schedule shall control. To the extent of any inconsistency between the General Provisions (including the Additional General Provisions) and the Schedule, the Schedule shall control. Clause 41. Price escalation (Leave this Section blank if firm prices are bid) (a) The price (s) payable for items shall be the unit price set forth opposite such items in Section II hereof increased or decreased by (insert ratio applicable, such as "same number of cents, or fractions thereof, per gallon") that the posted (or published price(s) for

at

(indicate item or items)

(low) (reference price commodity, such as crude oil, housebrand gasoline, etc.) f. o. b.

(location where reference price is applicable)

(method of delivery of referencep rice commodity, such as "barge," "tank car," etc.) as posted (or published) by (name of company or publication and heading under which published) all of which is hereinafter referred to as the "Reference Price," shall have increased or decreased to and including the date of delivery. The Contractor represents and warrants that the Reference Price on...---

was:

NOTE. In the event the bid is subject to escalation and none of the blank spaces in paragraph (c) of this Clause 41 are filled in, the bid shall be construed as providing for no maximum price.

(b) The Contractor shall notify the Contracting Officer, Armed Services Petroleum Purchasing Agency, Washington 25, D. C., of any change in the Reference Price by telegram dated (preferably confirmed promptly by letter), registered letter mailed, or unregistered letter received, within five (5) days from the date thereof.

(1) In the event the Contractor fails so to notify the Contracting Officer, any upward adjustments in the unit price(s) shall apply only to deliveries made on and after the date of receipt by the Contracting Officer of a written notification from the Contractor of such change.

(ii) In the event the Contractor fails to give notice of a decrease, a downward adjustment in unit prices shall be later effected as to all deliveries made on or subsequent to the date of the decrease.

(iii) Upon receipt of notice of such a change in price, the Contracting Officer will issue a Change Notice to the contract with respect to each change in unit price (s).

(c) Notwithstanding the foregoing provisions of this Section I, the unit price(s) payable under this contract shall in no event exceed either (i) the lower of Contractor's posted or established selling price in effect on the date of delivery for the product supplied in the form of delivery made at the point of delivery, or (ii) the unit price (s) shown in Section II hereof plus

per (amount) (gallon or barrel) for

(gallon or barrel) (item(s) or product)

(d) The Contractor warrants that the certificate affixed to its invoices to the effect that the bill is correct and just also means that the price (s) therein has (have) been computed in accordance with these escalation provisions.

(e) In the event the said Reference Price is based upon an average of postings by more than one source, and any one or more of such sources shall fail or cease to declare or publish their respective price, the price of the remaining sources which are so declared or published shall be used to determine the average; provided, however, that the Government at its option may solicit statements of prices being commercially used from each of the sources whose prices are not declared or published and such statements will be used to determine the average price. In the event the said Reference Price is designated to be found in a trade publication and such publication shall cease to publish said Reference Price or changes its method of quoting prices, the parties hereto shall modify the contract to (i) incorporate the applicable price quotations of the publication then generally recognized by the petroleum industry as the successor publication to the type of postings originally published by the said trade publication named herein, or (ii) conform to the new method of price quotations. In the event deliveries hereunder are made into tankers, the date and time the vessel commences to load will be, for the purposes of this clause, construed to be the date of delivery.

ABSTRACT OF BIDS

Request for proposals 57-N-43. Office: Armed Services Petroleum Purchasing Agency.

· Open close of business, October 25, 1956.

1. Esso Export Corp----

2. Sinclair Refining Co.--.

3. The Texas Co---

4. Texas Petroleum_..

5. Hess, Inc.

5,100,000 barrels Navy special, at $2.48 per barrel, ex. Aruba, Netherlands West Indies, f. o. b. Government vessel. The price of $2.48 per barrel to escalate "cent for cent" with any change in the low posting in Platts Oil Gram, United States gulf coast/Caribbean, whichever is lower, for bunker C fuel oil ($2.10 per barrel date of bid). Maximum price not to exceed $2.728 per barrel. 900,000 barrels Navy special, at $2.48 per barrel, ex. Houston/Corpus Christi, Tex., f. o. b. Government vessel. Price of $2.48 per barrel to escalate "cent for cent" with any change in the low posting in Platts Oil Gram, United States gulf, for bunker C fuel oil ($2.10 per barrel date of bid). Maximum price payable not to exceed $2.728 per barrel.

450,000 barrels Navy special, at $2.48 per barrel, ex. Port Arthur, Tex., f. o. b. Government vessels. Price of $2.48 per barrel to escalate "cent for cent" with any change in the low posting in Platts Oil Gram, United States gulf coast, for bunker C fuel oil ($2.10 per barrel date of bid). Maximum price payable not to exceed $2.71 per barrel. 500,000 barrels Navy special, at $2.48 per barrel, ex. Pointe-A-Pierre, British West Indies, f. o. b. Government vessels. Price escalation-same as Texas company offer above. 500,000 barrels Navy special, at $3.30 per barrel, ex., contractors terminal, Woodbridge, N. J., f. o. b. Government vessels. Price of $3.30 to escalate "cent for cent" with the Esso Standard Oil Co., New York. Harbor barge price for No. 6 fuel oil ($2.80 per barrel on date of bid). 1 percent discount to be allowed for payment within 30 calendar days.

NOTE: No ceiling or maximum price offered.