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CONTRACT CLAUSES AND SOLICITATION PROVISIONS

such failure within a period of ten (10) days (or such
longer period as the Contracting Officer may authorize
in writing) after receipt of notice from the Contracting
Officer specifying such failure, the Government shall
have the right by contract or otherwise to replace or
correct such supplies and equitably reduce any target
price or, if it is established, the total final price
of this contract.

(c) The clause set forth in (a) above shall be included in contracts utilizing the clause in 7-109.3 except that paragraphs (c) and (f) shall be deleted and the following substituted:

(c) In case any supplies or lots of supplies are defective in material or workmanship or otherwise not in conformity with the requirements of this contract, the Government shall have the right either to reject them (with or without instructions as to their disposition) or to require their correction. Supplies or lots of supplies which have been rejected or required to be corrected shall be removed or, if permitted or required by the Contracting Officer, corrected in place by the Contractor promptly after notice, and shall not thereafter be tendered for acceptance unless the former rejection or requirement of correction is disclosed. Prior to the establishment of the redetermined prices, the cost of replacement or correction shall be considered as a cost incurred, or to be incurred, for the purpose of negotiation to redetermine the fair and reasonable contract prices under the price redetermination clause of this contract. After the establishment of the redetermined prices all replacements shall be accomplished at no increase in the redetermined prices. If the Contractor fails either promptly to remove such supplies or lots of supplies which are required to be removed, or promptly to replace or correct such supplies or lots of supplies, the Government either (i) may by contract or otherwise replace or correct such supplies and equitably reduce the initial contract prices, or if it is established, the redetermined prices of this contract, or, (ii) may terminate this contract for default as provided in the clause of this contract entitled "Default". Unless the Contractor corrects or replaces such supplies within the delivery schedule, the Contracting Officer may require the delivery of such supplies, and equitably reduce the initial contract price or, if it is established, the redetermined prices of this contract. Failure to agree to such equitable reduction shall be a dispute concerning a question of fact within the meaning of the clause of this contract entitled "Disputes".

(f) If acceptance is not conclusive for any of the reasons in paragraph (e) hereof, the Government, in addition to any other rights and remedies provided by law, or under other provisions of this contract, shall have the right to require the Contractor (1) at no increase in the initial contract prices, or, if it is established, the redetermined prices of this contract, to correct or replace the defective or nonconforming supplies at the original point of delivery or at the Contractor's plant at the Contracting Officer's election, and in accordance with a reasonable delivery schedule as may be agreed upon between the Contractor and the Contracting Officer; Provided, That the Contracting Officer may require a reduction in the initial contract prices, or, if it is established, the redetermined prices of this contract, if the Contractor

7-103.5

ARMED SERVICES PROCUREMENT REGULATION

CONTRACT CLAUSES AND SOLICITATION PROVISIONS

fails to meet such delivery schedule; or (2) within a reasonable time after receipt by the Contractor of notice of defects or nonconformance, to repay such portion of the initial contract prices, or, if it is established, the redetermined prices of this contract, as is equitable under the circumstances if the Contracting Officer elects not to require correction or replacement. When supplies are returned to the Contractor, the Contractor shall bear the transportation costs from the original point of delivery to the Contractor's plant and return to the original point when that point is not the Contractor's plant. If the Contractor fails to perform or act as required in (1) or (2) above and does not cure such failure within a period of ten (10) days (or such longer period as the Contracting Officer may authorize in writing) after receipt of notice from the Contracting Officer specifying such failure, the Government shall have the right by contract or otherwise to replace or correct such supplies and equitably reduce the initial contract prices, or, if it is established, the redetermined prices of this contract.

7-103.5

ARMED SERVICES PROCUREMENT REGULATION

DAC #76-40

26 NOVEMBER 1982

CONTRACT CLAUSES AND SOLICITATION PROVISIONS

(d) The following paragraphs (g) and (h) shall be added when the contract provides for the performance of Government Procurement Quality Assurance at

source:

(8) When requested by the authorized Government representative, the Contractor shall furnish
to the Government:

(i) advance notification prior to starting inspections or tests in accordance with provi-
sions contained in or referenced by this contract; and

(ii) advance notification when supplies will be ready for Government inspection.
(h) When the advance notification in (g) above is requested, the authorized Government
representative shall specify the period and method of such advance notification; however, such
requests shall not require more than two (2) workdays of advance notification if the Government
representative is in residence in the Contractor's plant nor more than seven (7) workdays of ad-
vance notification in other instances. Notification shall be furnished to the Government represen-
tative designated in the request. (1977 SEP)

7-103.6 Title and Risk of Loss.

TITLE AND RISK OF LOSS (1968 JUN)

(a) Unless this contract specifically provides for earlier passage of title, title to supplies covered by this contract shall pass to the Government upon formal acceptance, regardless of when or where the Government takes physical possession.

(b) (1) Unless this contract specifically provides otherwise, risk of loss of or damage to supplies covered by this contract shall remain with the Contractor until, and shall pass to the Government upon:

(i) delivery of the supplies to a carrier, if transportation is f.o.b. origin;

(ii) acceptance by the Government or delivery of possession of the supplies to the
Government at the destination specified in this contract, whichever is later, if trans-
portation is f.o.b. destination.

(2) Notwithstanding (1) above, the risk of loss of or damage to supplies which so fail to conform to the contract as to give a right of rejection shall remain with the Contractor until cure or acceptance, at which time (1) above shall apply.

(c) Notwithstanding (b) above, the Contractor shall not be liable for loss of or damage to supplies caused by the negligence of officers, agents, or employees of the Government acting within the scope of their employment.

7-103.7 Payments.

PAYMENTS (1958 JAN)

(End of clause)

The Contractor shall be paid, upon the submission of proper invoices or vouchers, the prices stipulated herein for supplies delivered and accepted or services rendered and accepted, less deductions, if any, as herein provided. Unless otherwise specified, payment will be made on partial deliveries accepted by the Government when the amount due on such deliveries so warrants; or, when requested by the Contractor, payment for accepted partial deliveries shall be made whenever such payment would equal or exceed either $1,000 or fifty percent (50%) of the total amount of this contract.

(End of clause)

In contracts for the furnishing of transportation and accessorial services there will be substituted for the word "proper" above, the words "properly certified."

7-103.7

ARMED SERVICES PROCUREMENT REGULATION

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CONTRACT CLAUSES AND SOLICITATION PROVISIONS

7-103.8 Assignment of Claims.

7:6-A

ASSIGNMENT OF CLAIMS (1962 FEB)

(a) Pursuant to the provisions of the Assignment of Claims Act of 1940, as amended (31 U.S.C. 203, 41 U.S.C. 15), if this contract provides for payments aggregating $1,000 or more, claims for monies 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

7-103.8

ARMED SERVICES PROCUREMENT REGULATION

CONTRACT CLAUSES AND SOLICITATION PROVISIONS reassignment may be made to one party as agent or trustee for two or more parties participating in such financing. Unless otherwise provided in this contract, payments to an assignee of any monies 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" or "Confidential," be furnished to any assignee of any claim arising under this contract or to any other person not entitled to receive the same. However, 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.

(End of clause)

The last sentence of paragraph (a) of the foregoing clause shall be included in contracts only in time of war, or national emergency proclaimed by the President (including the National Emergency Proclamation of December 16, 1950), or by Act or Joint Resolution of the Congress and shall not be included in contracts entered into after such war or national emergency has been terminated; provided, that in cases where special circumstances make it advisable in the best interests of the Government, and in accordance with Departmental procedures, such sentence may be omitted. In any event the sentence will be deleted from negotiated contracts entered into with foreign contractors. Pursuant to the provisions of the Assignment of Claims Act of 1940, as amended by Public Law 30, 82d Congress, the effect of the last sentence of paragraph (a) of the foregoing clause is that payments to be made to an assignee after 15 May 1951 of any monies due or to become due under the contract shall not be subject to reduction or set-off for any liability of any nature of the contractor to the Government which arises independently of the contract, or for any liability of the contractor on account of (i) renegotiation under any renegotiation statute or under any statutory renegotiation clause in the contract, (ii) fines, (iii) penalties (which term does not include amounts which may be collected or withheld from the contractor in accordance with or for failure to comply with the terms of the contract), or (iv) taxes, Social Security contributions, or the withholding or nonwithholding of taxes or Social Security contributions, whether arising from or independently of the contract. The assignee is required by said Act, as amended, to "File written notice of the assignment together with a true copy of the instrument of assignment with (i) the contracting officer or the head of his department or agency; (ii) the surety or sureties upon the bond or bonds, if any, in connection with such contract; and (iii) the disbursing officer, if any, designated in such contract to make payment."

When Standard Form 32 is used, the form need not be changed to delete the parenthetical sentence at the end of paragraph (a) of the clause.

When a contract is to be assigned pursuant to the above clause, the assignee shall forward to the administrative contracting officer, the disbursing officer, and the surety, if any, the notice and instrument of assignment in the number of copies indicated below:

(i) To the administrative contracting officer—a true copy of the instrument of assignment and an original and three copies of the notice of assignment. The administrative contracting officer shall acknowledge receipt by signing and dating all copies of the notice of assignment and shall

7-103.8

ARMED SERVICES PROCUREMENT REGULATION

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