the solicitation notice in § 1-3.12033(a)(1).

ADDITIONAL COST ACCOUNTING STANDARDS

APPLICABLE TO EXISTING CONTRACTS

The offeror shall indicate below whether award of the contemplated contract would, in accordance with paragraph (a)(3) of the Cost Accounting Standards clause, require a change in his established cost accounting practices affecting existing contracts and subcontracts.

Yes No

NOTE. If the offeror has checked "yes" above, and is awarded the contemplated contract, he will be required to comply with the Administration of Cost Accounting Standards clause.

(5) Insert the contract clauses set forth in § 1-3.1204-1 in all national defense solicitations which are likely to result in a negotiated contract exceeding $100,000.

(b) Nondefense contracts. Insert the clauses set forth in § 1-3.1204-2 and the following notice in all solicitations which are likely to result in a negotiated nondefense contract exceeding $100,000, except when:

(1) The price is based on established catalog or market prices of commercial items sold in substantial quantities to the general public;

(2) The price is set by law or regulation;

(3) The solicitation is limited to small business concerns;

(4) The solicitation is sent to the Canadian Commercial Corporation;

(5) The contracts will be executed and performed in their entirety outside the United States, its territories and possessions; or

(6) The solicitation is sent exclusively to (i) educational institutions, (ii) State and local governments, and (iii) hospitals, when all potential offerors are exempt pursuant to § 1-3.12032(c)(4).

COST ACCOUNTING STANDARDS

CERTIFICATION-NONDEFENSE APPLICABILITY Any negotiated contract in excess of $100,000 resulting from this solicitation shall be subject to the requirements of the clauses entitled Cost Accounting Standards-Nondefense Contract (FPR § 1-3.12042(a)) and Administration of Cost Accounting Standards (FPR § 1-3.1204-1(b)) if it is awarded to a contractor's business unit that is performing a national defense contract or

subcontract which is subject to cost accounting standards pursuant to 4 CFR 331 at the time of award, except contracts which are otherwise exempt (see FPR § 13.1203-2 (a) and (c)(4)). Otherwise, an award resulting from this solicitation shall be subject to the requirements of the clauses entitled Consistency of Cost Accounting Practices-Nondefense Contract (FPR § 13.1204-2(b)) and Administration of Cost Accounting Standards (FPR § 1-3.1204-1(b)) if the award is (i) the first negotiated contract over $500,000 in the event the award is to a contractor's business unit that is not performing under any CAS covered national defense or nondefense contract or subcontract, or (ii) a negotiated contract over $100,000 in the event the award is to a contractor's business unit that is performing under any CAS covered national defense or nondefense contract or subcontract, except contracts which are otherwise exempt (see FPR § 1-3.1203-2 (a) and (c)(4)). This solicitation notice is not applicable to small busi

ness concerns.

CERTIFICATE OF CAS APPLICABILITY The offeror hereby certifies that:

A. It is currently performing a negotiated national defense contract or subcontract that contains a Cost Accounting Standards Clause (4 CFR Part 331), and it is currently required to accept that clause in any new negotiated national defense contracts it receives that are subject to cost accounting standards.

B. It is currently performing a negotiated national defense or nondefense contract or subcontract that contains a cost accounting standards clause required by 4 CFR Part 331 or 332 or by FPR Subpart 1-3.12, but it is not required to accept the 4 CFR 331 clause in new negotiated national defense contracts or subcontracts which it receives that are subject to cost accounting standards.

C. It is not performing any CAS covered national defense or nondefense contract or subcontract. The offeror further certifies that it will immediately notify the contracting officer in writing in the event that it is awarded any negotiated national defense or nondefense contract or subcontract containing any cost accounting standards clause subsequent to the date of this certificate but prior to the date of the award of a contract resulting from this solicitation.

D. It is an educational institution receiving contract awards subject to FPR Subpart 1-15.3 (FMC 73-8, OMB Circular A-21).

E. It is a State or local government receiving contract awards subject to FPR Subpart 1-15.7 (FMC 74-4, OMB Circular A-87). F. It is a hospital.

NOTE. Certain firm fixed price negotiated nondefense contracts awarded on the basis

of price competition may be determined by the Contracting Officer (at the time of award) to be exempt from cost accounting standards (FPR § 1-3.1203-2(c)(4)(iv)).

ADDITIONAL CERTIFICATION-CAS APPLICABLE OFFERORS

G. The offeror, subject to cost accounting standards but not certifying under D, E, or F above, further certifies that practices used in estimating costs in pricing this proposal are consistent with the practices disclosed in the Disclosure Statement(s) where they have been submitted pursuant to CASB regulations (4 CFR Part 351).

DATA REQUIRED-CAS COVERED OFFERORS The Offeror certifying under A or B above but not under D, E, or F above, is required to furnish the name, address (including agency or department component), and telephone number of the cognizant contracting officer administering the offeror's CAS covered contracts. If A above is checked, the offeror will also identify those currently effective cost accounting standards, if any, which upon award of the next negotiated national defense contract or subcontract will become effective upon the offeror.

Name of CO:

Address:

Telephone number:

Standards not yet applicable: [43 FR 14113, Apr. 4, 1978]

§ 1-3.1204 Contract clauses.1

(a) National defense contracts. (1) The clauses set forth in paragraphs (a)(1) and (b) of § 1-3.1204-1 shall be inserted in all negotiated national defense contracts exceeding $100,000, except the following:

(i) When the price is based on established catalog or market prices of commercial items sold in substantial quantities to the general public, or is set by law or regulations. The catalog or market price exemption is determined to exist even though the award is made on the basis of adequate competition. It is the offeror's responsibility to request and to provide justification for a catalog or market price exemption. In providing such justification, the offeror shall (A) indicate in his proposal, and in any changes in his offered price, that the proposed price is based on an established catalog or

For a document relating to this section, see Appendix-Temporary Regulations, appearing at the end at Chapter 1.

market price of a commercial item sold in substantial quantities to the general public, rather than derived from the stimulus of competition which may be present in the particular procurement; and (B) furnish information necessary to substantiate the catalog or market price exemption (see ASPR 3-807.3(j)). However, the procuring activity must determine in each case whether or not the exemption applies;

(ii) Contracts awarded to an offeror who is a small business concern (see ASPR 1-702(c) and §§ 1-1.701 and 11.703);

(iii) Contracts for which the Cost Accounting Standards Board has approved other waivers or exemptions pursuant to 4 CFR 331.30;

(iv) Contracts with contractors who are eligible for and have elected to use modified contract coverage under 4 CFR Part 332;

(v) Contracts which are executed and performed in their entirety outside the United States, its territories and possessions; or

(vi) Consistent with (iii), above, contracts of $500,000 or less under the circumstances prescribed in 4 CFR 331.30(b)(8).

(2) The clauses set forth in paragraphs (a)(2) and (b) of § 1-3.1204-1 shall be inserted in all negotiated national defense contracts exceeding $100,000 but less than $10 million when the offeror certifies he is eligible for and elects to use modified contract coverage under provisions of 4 CFR Part 332 (see § 1-3.1204(a)(1)(iv)).

(b) Nondefense contracts. Either the clause set forth in paragraph (a) or (b) of § 1-3.1204-2 as appropriate in accordance with §3.1203-2(c) together with the clause set forth in paragraph (b) of § 1-3.1204-1 shall be inserted in negotiated nondefense contracts.

[43 FR 14114, Apr. 4, 1978]

(Pub. L. 91-379, Aug. 15, 1970), in connection with this contract shall:

(1) By submission of a Disclosure Statement, disclose in writing his cost accounting practices as required by regulations of the Cost Accounting Standards Board. The required disclosures must be made prior to contract award unless the Contracting Officer provides a written notice to the Contractor authorizing postaward submission in accordance with regulations of the Cost Accounting Standards Board. The practices disclosed for this contract shall be the same as the practices currently disclosed and applied on all other contracts and subcontracts being performed by the Contractor and which contain this Cost Accounting Standards clause. If the Contractor has notified the Contracting Officer that the Disclosure Statement contains trade secrets and commercial or financial information which is privileged and confidential, the Disclosure Statement will not be released outside of the Government.

(2) Follow consistently the cost accounting practices disclosed pursuant to (1), above, in accumulating and reporting contract performance cost data concerning this contract. If any change in disclosed practices is made for purposes of any contract or subcontract subject to Cost Accounting Standards Board requirements, the change must be applied prospectively to this contract, and the Disclosure Statement must be amended accordingly. If the contract price or cost allowance of this contract is affected by such changes, adjustment shall be made in accordance with subparagraph (a)(4) or (a)(5), below, as appropriate.

(3) Comply with all Cost Accounting Standards in effect on the date of award of this contract or if the Contractor has submitted cost or pricing data, on the date of final agreement on price as shown on the Contractor's signed certificate of current cost or pricing data. The Contractor shall also comply with any Cost Accounting Standard which hereafter becomes applicable to a contract or subcontract of the Contractor. Such compliance shall be required prospectively from the date of applicability to such contract or subcontract.

(4)(A) Agree to an equitable adjustment (as provided in the Changes clause of this contract, if any) if the contract cost is affected by a change which, pursuant to (3) above, the Contractor is required to make to his established cost accounting practices whether such practices are covered by a Disclosure Statement or not.

(B) Negotiate with the Contracting Officer to determine the terms and conditions under which a change may be made to either a disclosed cost accounting practice or an established cost accounting practice, other than a change made under other provisions of this subparagraph (4): Provided,

That no agreement may be made under this provision that will increase costs paid by the United States.

(C) When the parties agree to a change to either a disclosed cost accounting practice or an established cost accounting practice, other than a change under (4)(A), above, negotiate an equitable adjustment as provided in the Changes clause of the contract.

(5) Agree to an adjustment of the contract price or cost allowance, as appropriate, if he or a subcontractor fails to comply with an applicable Cost Accounting Standard or to follow any practice disclosed pursuant to subparagraphs (a)(1) and (a)(2), above, and such failure results in any increased costs paid by the United States. Such adjustment shall provide for recovery of the increased costs to the United States together with interest thereon computed at the rate determined by the Secretary of the Treasury pursuant to P.L. 92-41, 85 Stat. 97, or 7 percent per annum, whichever is less, from the time the payment by the United States was made to the time the adjustment is effected.

(b) If the parties fail to agree whether the Contractor or a subcontractor has complied with an applicable Cost Accounting Standard, rule, or regulation of the Cost Accounting Standards Board and as to any cost adjustment demanded by the United States, such failure to agree shall be a dispute concerning a question of fact within the meaning of the Disputes clause of this contract.

(c) The Contractor shall permit any authorized representatives of the head of the agency, of the Cost Accounting Standards Board, or of the Comptroller General of the United States to examine and make copies of any documents, papers, or records relating to compliance with the requirements of this clause.

(d) The Contractor shall include in all negotiated subcontracts which he enters into the substance of this clause except paragraph (b). The contractor shall require such inclusion in all other subcontracts of any tier, including the obligation to comply with all Cost Accounting Standards in effect on the date of award of the subcontract or, if the subcontractor has submitted cost or pricing data, on the date of final agreement on price as shown on the subcontractor's signed Certificate of Current Cost or Pricing Data. This requirement shall apply only to negotiated subcontracts in excess of $100,000 where the price negotiated is not based on:

(1) Established catalog or market prices of commercial items sold in substantial quantities to the general public; or

(2) Prices set by law or regulation, and except that the requirement shall not apply to negotiated subcontracts otherwise exempt from the requirement to accept the Cost Accounting Standards clause by reason

of § 331.30(b) of Title 4, Code of Federal Regulations (4 CFR 331.30(b)).

However, if this is a contract with an agency which permits subcontractors to appeal final decisions of the Contracting Officer directly to the head of the agency or his duly authorized representative, then the Contractor shall include the substance of paragraph (b) as well.

NOTE: (1) Subcontractors shall be required to submit their Disclosure Statements to the Contractor. However, if a subcontractor has previously submitted his Disclosure Statement to a Government Contracting Officer he may satisfy that requirement by certifying to the Contractor the date of such Statement and the address of the Contracting Officer.

NOTE: (2) In any case where a subcontractor determines that the Disclosure Statement information is privileged and confidential and declines to provide it to his Contractor or higher tier subcontractor, the Contractor may authorize direct submission of that subcontractor's Disclosure Statement to the same Government offices to which the Contractor was required to make submission of his Disclosure Statement. Such authorization shall in no way relieve the Contractor of liability as provided in paragraph (a)(5) of this clause. In view of the foregoing and since the contract may be subject to adjustment under this clause by reason of any failure to comply with rules, regulations, and standards of the Cost Accounting Standards Board in connection with covered subcontracts, it is expected that the Contractor may wish to include a clause in each such subcontract requiring the subcontractor to appropriately indemnify the Contractor. However, the inclusion of such a clause and the terms thereof are matters for negotiation and agreement between the Contractor and the subcontractor, provided that they do not conflict with the duties of the Contractor under its contract with the Government. It is also expected that any subcontractor subject to such indemnification will generally require substantially similar indemnification to be submitted by his subcontractors.

NOTE: (3) If the subcontractor is a business unit which, pursuant to 4 CFR Part 332 is entitled to elect modified contract coverage and to follow Standards 401 and 402 only, the clause entitled "Disclosure and Consistency of Cost Accounting Practices" set forth in ASPR 7-104.83(a)(2) (see also FPR 1-3.1204-1(a)(2)) shall be inserted in lieu of this clause.

(e) The terms defined in § 331.20 of Part 331 of Title 4, Code of Federal Regulations (4 CFR 331.20) shall have the same meanings herein. As there defined, "negotiated subcontract" means "any subcontract except a firm fixed-price subcontract made

DISCLOSURE AND CONSISTENCY OF COST
ACCOUNTING PRACTICES

(a) The Contractor, in connection w this contract, shall:

(1) Comply with the requirements o CFR Parts 401, Consistency in Estimati Accumulating and Reporting Costs, and 4 Consistency in Allocating Costs Incurred the Same Purpose, in effect on the date award of this contract.

(2) If it is a business unit of a company quired to submit a Disclosure Stateme disclose in writing its cost accounting pr tices as required by regulations of the C Accounting Standards Board. The requir disclosures must be made prior to contra award unless the Contracting Officer p vides a written notice to the Contractor a thorizing post-award submission in acco ance with regulations of the Cost Accou ing Standards Board. If the Contractor h notified the Contracting Officer that t Disclosure Statement contains trade secre and commercial or financial informatio which is privileged and confidential, t Disclosure Statement will be protected a will not be released outside of the Gover ment.

NOTE. (1) Subcontractors shall be r quired to submit their Disclosure Stat ments to the Contractor. However, if a su contractor has previously submitted his Di closure Statement to a Government Co tracting Officer, he may satisfy that r quirement by certifying to the contracto the date of such Statement and the addres of the Contracting Officer.

NOTE. (2) In any case where a subcor tractor determines that the Disclosur Statement information is privileged an confidential and declines to provide it to hi Contractor or higher tier subcontractor, th Contractor may authorize direct submission of that subcontractor's Disclosure State ment to the same Government offices to which the Contractor was required to make submission of his Disclosure Statement Such authorization shall in no way relieve the Contractor of liability if he or a subcon tractor fails to comply with an applicable Cost Accounting Standard or to follow any practice disclosed pursuant to this paragraph and such failure results in any in

creased costs paid by the United States. In view of the foregoing and since the contract may be subject to adjustment under this clause by reason of any failure to comply with rules, regulations, and Standards of the Cost Accounting Standards Board in connection with covered subcontracts, it is expected that the Contractor may wish to include a clause in each such subcontract requiring the subcontractor to appropriately indemnify the Contractor. However, the inclusion of such a clause and the terms thereof are matters for negotiation and agreement between the Contractor and the subcontractor, provided that they do not conflict with the duties of the Contractor under its contract with the Government. It is also expected that any subcontractor subject to such indemnification will generally require substantially similar indemnification to be submitted by his subcontractors. (3) Follow consistently the cost accounting practices disclosed pursuant to (2), above, and the established cost accounting practices of the business unit. A change to such practices may be proposed, however, by either the Government or the Contractor, and the Contractor agrees to negotiate with the Contracting Officer the terms and conditions under which a change may be made. After the terms and conditions under which the change is to be made have been agreed to, the change must be applied prospectively to this contract, and the Disclosure Statement if affected must be amended accordingly. No agreement may be made under this provision that will increase costs paid by the United States.

(4) Agree to an adjustment of the contract price or cost allowance, as appropriate, if he or a subcontractor fails to comply with the applicable Cost Accounting Standards or to follow any practice disclosed or established pursuant to subparagraph (a)(2) or (a)(3), above, and such failure results in any increased costs paid by the United States. Such adjustment shall provide for recovery of the increased costs to the United States together with interest thereon computed at the rate determined by the Secretary of the Treasury pursuant to Pub. L. 92-41, 85 Stat. 97, or 7 percent per annum, whichever is less, from the time the payment by the United States was made to the time the adjustment is effected.

(5) When the parties agree to a change to either a disclosed cost accounting practice or an established cost accounting practice, negotiate an equitable adjustment as provided in the changes clause of this contract.

(b) If the parties fail to agree whether the Contractor has complied with an applicable Cost Accounting Standard, rule, or regulation of the Cost Accounting Standards Board and as to any cost adjustment demanded by the United States, such failure to agree shall be a dispute concerning a

question of fact within the meaning of the Disputes clause of this contract.

(c) The Contractor shall permit any authorized representatives of the head of the agency, of the Cost Accounting Standards Board, or of the Comptroller General of the United States to examine and make copies of any documents, papers, and records relating to compliance with the requirements of this clause.

(d) The Contractor shall include in all negotiated subcontracts into which he enters the substance of this clause except paragraph (b) of this section, and shall require such inclusion in all other subcontracts of any tier, except that:

(1) If the subcontract is awarded to a business unit which pursuant to part 331 is required to follow all Cost Accounting Standards, the Cost Accounting Standards clause set forth in ASPR 7-104.83(a)(1) or FPR § 13.1204-1(a)(1) shall be inserted in lieu of this clause; or

(2) This requirement shall not apply to negotiated subcontracts where the price negotiated is based on:

(i) Established catalog or market prices of commercial items sold in substantial quantities to the general public, or

(ii) Prices set by law or regulation; or

(3) The requirement shall not apply to negotiated subcontracts otherwise exempt from the requirement to accept a cost accounting standards clause by reason of § 331.30(b) of the Board's regulation.

NOTE. The terms defined in § 331.20 of part 331 of title 4, Code of Federal Regulations (4 CFR 331.20) shall have the same meanings herein. As there defined, “negotiated subcontract" means "any subcontract except a firm fixed-price subcontract made by a Contractor or Subcontractor after receiving offers from at least two firms not associated with each other or such Contractor or Subcontractor, providing (1) the solicitation to all competing firms is identical, (2) price is the only consideration in selecting the subcontractor from among the competing firms solicited, and (3) the lowest offer received in compliance with the solicitation from among those solicited is accepted."

(e) Notwithstanding (d), above, if this a contract with an agency which permits subcontractors to appeal final decisions of the Contracting Officer directly to the head of the agency or his duly authorized representative, then the contractor shall include the substance of paragraph (b) as well. (b) Administration clause.

ADMINISTRATION OF COST ACCOUNTING
STANDARDS

For the purpose of administrating Cost Accounting Standards requirements under this contract, the Contractor shall:

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