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Sec. 1-7.603-23 Small business subcontracting

program. 1-7.603-24 Minority business enterprise

subcontracting program. 1-7.603-25 Late bids and modifications or

withdrawals. 1-7.603-26 Preference for U.S. Flag Air

Carriers. 1-7.603-27 Cost accounting standards. 1-7.603-28 Subcontracts. 1-7.604 Additional clauses. 1-7.604-1 Liquidated damages.

Sec. 1-7.602-5 Termination for default-dam

ages for delay-time extensions. 1-7.602-6 Disputes. 1-7.602-7 Payments to contractor. 1-7.602-8 Assignment of claims. 1-7.602-9 Material and workmanship. 1-7.602-10 (Reserved) 1-7.602-11 Inspection and acceptance. 1-7.602-12 Superintendence by contractor. 1-7.602-13 Permits and responsibilities. 1-7.602-14 Conditions affecting the work. 1-7.602-15 Other contracts. 1-7.602-16 Patent indemnity. 1-7.602-17 Additional bond security. 1-7.602-18 Covenant against contingent

fees. 1-7.602-19 Officials not to benefit. 1-7.602-20 Buy American Act. 1-7.602-21 Convict labor. 1-7.602-22 Equal opportunity. 1-7.602-23 Labor standards provisions. 1-7.602-24 (Reserved) 1-7.602-25 [Reserved] 1-7.602-26 Utilization of small business

concerns. 1-7.602-27 Federal, State, and local taxes. 1-7.602-28 (Reserved) 1-7.602-29 Termination for convenience of

the Government. 1-7.602-30 Pricing of adjustments. 1-7.602-31 Use and possession prior to com

pletion. 1-7.602-32 Suspension of work. 1-7.602-33 Utilization of minority business

enterprises. 1-7.602-34 Listing of employment open

ings. 1-7.602-35 Payment of interest on contrac

tors' claims. 1-7.602-36 Shop drawings. 1-7.602-37 Employment of the handi

capped. 1-7.602-38 Clean air and water. 1-7.603 Clauses and notices to be used

when applicable. 1-7.603-1-1-7.603-6 (Reserved) 1-7.603-7 Examination of records by

Comptroller General. 1-7.603-8-1-7.603-10 (Reserved) 1-7.603-11 Price reduction for defective

cost or pricing data. 1-7.603-12 Workmen's compensation insur

ance (Defense Base Act). 1-7.603-13 (Reserved) 1-7.603-14 Advance payments. 1-7.603-15 Performance of work by con

tractor. 1-7.603-16-1-7.603-18 (Reserved) 1-7.603-19 Use of U.S. flag commercial ves

sels. 1-7.603-20 Audit and records. 1-7.603-21 Subcontractor cost and pricing

data. 1-7.603-22 Contracts with the Small Busi

ness Administration (Special 8(a) Contract).

Subpart 1-7.7—Transportation Contracts 1-7.700 Scope of subpart. 1-7.701 Solicitation of offers for transpor

tation services. 1-7.701-1 Preparation of solicitations. 1-7.701-2 Representations, certifications,

and acknowledgments in transportation

contracts. 1-7.702 Solicitation instructions and condi

tions for transportation contracts. 1-7.703 Required clauses in transportation

contracts. 1-7.703-1 Definitions, 1-7.703-2 Changes. 1-7.703-3 Extras. 1-7.703-4 Inspection. 1-7.703-5 Payments. 1-7.703-6 Assignment of claims. 1-7.703-7 Examination of records by

Comptroller General. 1-7.703-8 Default. 1-7.703-9 Disputes. 1-7.703-10 Convict labor. 1-7.703-11 Equal opportunity. 1-7.703-12 Officials not to benefit. 1-7.703-13 Covenant against contingent

fees. 1-7.703-14 Utilization of small business

concerns. 1-7.703-15 Federal, State, and local taxes. 1-7.703-16 Utilization of concerns in labor

surplus areas. 1-7.703-17 Contract not affected by oral

agreement. 1-7.703-18 Service Contract Act of 1965. 1-7.703-19 Termination for convenience of

the Government. 1-7.703-20 Moving contracts for the reloca

tion of a Federal office. 1-7.703-21 Employment of the handi

capped. 1-7.703-22 Cost accounting standards. 1-7.703-23 Clean air and water. 1-7.703-24 Privacy Act. 1-7.703-25 Use of U.S. flag commercial ves

sels. 1-7.704 (Reserved) Appendix-Background and nature of revia

sions to contract clauses. AUTHORITY: Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c).

SOURCE: 29 FR 10192, July 24, 1964, unless otherwise noted.

§ 1-7.000 Scope of part.

This part sets forth contract clauses for use in connection with the procurement of personal property and nonpersonal services (including construction).

the Contracting Officer) authorized to act for the head of the agency or the Secretary.

(b) The term “Contracting Officer" means the person executing this contract on behalf of the Government, and any other officer or civilian employee who is a properly designated Contracting Officer; and the term includes, except as otherwise provided in this contract, the authorized representative of a Contracting Officer acting within the limits of his authority.

(c) Except as otherwise provided in this contract, the term "subcontracts" includes purchase orders under this contract.

Additional definitions may be included provided they are not inconsistent with the clause or the provisions of these regulations.

Subpart 1-7.1-Fixed-Price Supply


SOURCE: 38 FR 6670, Mar. 12, 1973, unless otherwise noted.

§ 1-7.100 Scope of subpart.

This subpart sets forth contract clauses for use in fixed-price supply contracts.

§ 1-7.101 Applicability.

The clauses set forth in this subpart shall be used in fixed-price supply contracts entered into either by formal advertising or by negotiation (other than for small purchases as defined in Subpart 1-3.6).

§ 1-7.102 Required clauses.

The clauses set forth in this § 17.102 shall be attached, included in, or incorporated by reference when appropriate in all fixed-price supply contracts. When incorporated by reference, the section numbers and captions are to be listed; i.e., § 1-7.102-2 Changes, $ 1-7.102-3 Extras, etc. Standard forms containing the clauses may be incorporated by reference in lieu of listing. (See § 1-16.101 for incorporation of standard forms by reference.) [40 FR 2812, Jan. 16, 1975) § 1-7.102–1 Definitions.

$ 1-7.102–2 Changes.

CHANGES The Contracting Officer may at any time, by a written order, and without notice to the sureties, make changes, within the general scope of this contract, in any one or more of the following: (i) Drawings, designs, or specifications, where the supplies to be furnished are to be specially manufactured for the Government in accordance therewith; (ii) method of shipment or packing, and (iii) place of delivery. If any such change causes an increase or decrease in the cost of, or the time required for, the performance of any part of the work under this contract, whether changed or not changed by any such order, an equitable adjustment shall be made in the contract price or delivery schedule, or both, and the contract shall be modified in writing accordingly. Any claim by the Contractor for adjustment under this clause must be asserted within 30 days from the date of receipt by the Contractor of the notification of change: Provided, however, That the Contracting Officer, if he decides that the facts justify such action, may receive and act upon any such claim asserted at any time prior to final payment under this contract. Where the cost of property made obsolete or excess as a result of a change is included in the Contractor's claim for adjustment, the Contracting Officer shall have the right to prescribe the manner of disposition of such property. Failure to agree to any adjustment shall be a dispute concerning a question of fact within the meaning of the clause of this contract entitled “Disputes." However, nothing in this clause shall excuse the Contractor from proceeding with the contract as changed.

DEFINITIONS As used throughout this contract, the following terms shall have the meaning set forth below:

(a) The term “head of the agency" or “Secretary" as used herein means the Secretary, the Under Secretary, any Assistant Secretary, or any other head or assistant head of the executive or military department or other Federal agency; and the term "his duly authorized representative" means any person or persons or board (other than

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unless such extras and the price therefor reasonable facilities and assistance for the have been authorized in writing by the Con- safety and convenience of the Government tracting Officer.

inspectors in the performance of their

duties. If Government inspection or test is 8 1-7.102-4 Variation in quantity.

made at a point other than the premises of

the Contractor or a subcontractor, it shall VARIATION IN QUANTITY

be at the expense of the Government except No variation in the quantity of any item as otherwise provided in this contract: Procalled for by this contract will be accepted vided, That in case of rejection the Governunless such variation has been caused by ment shall not be liable for any reduction in conditions of loading, shipping, or packing,

value of samples used in connection with or allowances in manufacturing processes, such inspection or test. All inspections and and then only to the extent, if any, speci tests by the Government shall be performed fied elsewhere in this contract.

in such a manner as not to unduly delay the

work. The Government reserves the right to $ 1-7.102-5 Inspection.

charge to the Contractor any additional cost

of Government inspection and test when INSPECTION

supplies are not ready at the time such in(a) All supplies (which term throughout

spection and test is requested by the Conthis clause includes without limitation raw

tractor or when reinspection or retest is nematerials, components, intermediate assem

cessitated by prior rejection. Acceptance or blies, and end products) shall be subject to

rejection of supplies shall be made as inspection and test by the Government, to

promptly as practicable after delivery, the extent practicable at all times and

except as otherwise provided in this conplaces including the period of manufacture,

tract; but failure to inspect and accept or and in any event prior to acceptance.

reject the supplies shall neither relieve the (b) In case any supplies or lots of supplies

Contractor from responsibility for such supare defective in material or workmanship or

plies as are not in accordance with the conotherwise not in conformity with the re

tract requirements nor impose liability on

the Government therefor. quirements of this contract, the Government shall have the right either to reject

(d) The inspection and test by the Govthem (with or without instructions as to

ernment of any supplies or lots thereof does their disposition) or to require their correc

not relieve the Contractor from any respontion Supplies or lots of supplies which have

- sibility regarding defects or other failures to been rejected or required to be corrected

meet the contract requirements which may shall be removed, or, if permitted or re

be discovered prior to acceptance. Except as quired by the Contracting Officer, corrected

otherwise provided in this contract, acceptin place by and at the expense of the Con.

ance shall be conclusive except as regards tractor promptly after notice, and shall not

latent defects, fraud, or such gross mistakes thereafter be tendered for acceptance

as amount to fraud. unless the former rejection or requirement

(e) The Contractor shall provide and of correction is disclosed. If the Contractor

maintain an inspection system acceptable to fails promptly to remove such supplies or

the Government covering the supplies herelots of supplies which are required to be re

under. Records of all inspection work by the moved, or promptly to replace or correct

Contractor shall be kept complete and availsuch supplies or lots of supplies, the Gov.

able to the Government during the perernment either (i) may by contract or other.

formance of this contract and for such wise replace or correct such supplies and

longer period as may be specified elsewhere charge to the Contractor the cost occa

in this contract. sioned the Government thereby, or (ii) may terminate this contract for default as pro

§ 1-7.102–6 Responsibility for supplies. vided in the clause of this contract entitled

RESPONSIBILITY FOR SUPPLIES "Default." Unless the Contractor corrects or replaces such supplies within the delivery Except as otherwise provided in this conschedule, the Contracting Officer may re tract, (i) the Contractor shall be responsible quire the delivery of such supplies at a re for the supplies covered by this contract duction in price which is equitable under until they are delivered at the designated the circumstances. Failure to agree to such delivery point, regardless of the point of inreduction of price shall be a dispute con spection; (ii) after delivery to the Governcerning a question of fact within the mean ment at the designated point and prior to ing of the clause of this contract entitled acceptance by the Government or rejection “Disputes."

and giving notice thereof by the Govern(c) If any inspection or test is made by the ment, the Government shall be responsible Government on the premises of the Con- for the loss or destruction of or damage to tractor or a subcontractor, the 'Contractor the supplies only if such loss, destruction, or without additional charge shall provide all damage results from the negligence of offi

cers, agents, or employees of the Govern ment acting within the scope of their em ployment; and (iii) the Contractor shall bear all risks as to rejected supplies after notice of rejection, except that the Government shall be responsible for the loss, or destruction of, or damage to the supplies only if such loss, destruction, or damage results from the gross negligence of officers, agents, or employees of the Government acting within the scope of their employ. ment.

$ 1-7.102-7 Payments.

PAYMENTS 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, pay. ment for accepted partial deliveries shall be made whenever such payment would equal or exceed either $1,000 or 50 percent of the total amount of this contract.

Officer shall be final and conclusive unless within 30 days from the date of receipt of such copy, the Contractor mails or otherwise furnishes to the Contracting Officer a written appeal addressed to the Secretary. The decision of the Secretary or his duly authorized representative for the determi. nation of such appeals shall be final and conclusive unless determined by a court of competent jurisdiction to have been fraudulent, or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad faith, or not supported by substantial evidence. 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 hereunder, the Contractor shall proceed diligently with the performance of the contract and in accordance with the Contracting Officer's decision.

(b) This “Disputes" clause does not preclude consideration of law questions in connection with decisions provided for in paragraph (a), above: Provided, That nothing in this contract shall be construed as making final the decision of any administrative official, representative, or board on a question of law.

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$ 1-7.102-14 Buy American Act.

Insert the clause set forth in $ 16.104-5 under the conditions contained the therein. $ 1-7.102-15 Contract Work Hours and

Safety Standards Act-overtime compensation. Insert the clause set forth in § 112.303 under the conditions contained in § 1-12.302.

$ 1-7.102-10 Federal, State, and local

taxes. Insert either the clause in § 1.11.4011 or the clause in § 1-11.401-2 and, when appropriate, insert the supplementary clause in § 1-11.401-3(a), in accordance with the conditions contained in those sections. § 1-7.102-11 Default.

Insert the clause set forth in § 18.707 under the conditions prescribed in § 1-8.700-2(b) (1). § 1-7.102-12 Disputes.

DISPUTES (a) 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. The decision of the Contracting

§ 1-7.102-16 Equal opportunity.

Insert the clause set forth in $ 112.803-2 under the conditions contained in § 1-12.803-1. $ 1-7.102-17 Officials not to benefit.

OFFICIALS Not To BENEFIT No member of or delegate to Congress, or resident commissioner, shall be admitted to any share or part of this contract, or to any benefit that may arise therefrom; but this provision shall not be construed to extend to this contract if made with a corporation for its general benefit.

$ 1-7.103 Clauses to be used when applica


§ 1-7.102–18 Covenant against contingent

fees. Insert the clause set forth in § 11.503 under the conditions contained in § 1-1.501.

§ 1-7.103-1 Clauses for fixed-price supply

contracts involving construction.

(a) Insert the clauses set forth in $ 112.403-1 in fixed-price supply contracts under the conditions contained in § 1-12.402-2. The clauses set forth in § 1-12.403-1 are:

Davis-Bacon Act.
Contract Work Hours and Safety Standards

Act-Overtime Compensation.
Payrolls and Basic Records.
Compliance with Copeland Regulations.
Withholding of Funds.
Contract Termination-Department.

8 1-7.102-19 Termination for convenience

of the Government. Insert the clause set forth in § 18.701 in fixed-price supply contracts in excess of $10,000 except as permitted by $ 1-8.700-2(a) (2) for contracts not in excess of $100,000. (40 FR 44140, Sept. 25, 1975) § 1-7.102-20 Pricing of adjustments.

The following clause shall be included in all formally advertised or negotiated contracts other than cost-type contracts: .

PRICING OF ADJUSTMENTS When costs are a factor in any determination of a contract price adjustment pursuant to the “Changes" cause or any other provision of this contract, such costs shall be in accordance with the contract cost principles and procedures in Part 1-15 of the Federal Procurement Regulations (41

1-15) or section XV of the Armed Sery. ices Procurement Regulation in effect on the date of this contract.

(b) Insert the clause set forth in § 118.605 in fixed-price supply contracts under the conditions contained in Subpart 1-18.6.

§ 1-7.103–2 Additional bond security.

ADDITIONAL BOND SECURITY If any surety upon any bond furnished in connection with this contract becomes unacceptable to the Government, or if any such surety fails to furnish reports as to his financial condition from time to time as requested by the Government, the Contractor shall promptly furnish such additional security as may be required from time to time to protect the interests of the Government and of persons supplying labor or materials in the prosecution of the work contemplated by this contract.

81-7.102-21 Employment of the handi.

capped. Insert the clause set forth in § 112.1304-1 under the conditions contained in the section. (39 FR 26642, July 22, 1974)

8 1-7.102-22 Payment of interest on con

tractors' claims. Insert the clause set forth in 811.322 under the conditions prescribed therein. (40 FR 11580, Mar. 3, 1975]

8 1-7.103-3 Examination of records by

Comptroller General. The following clause shall be included in fixed-price negotiated contracts and may be included in other than fixed-price negotiated contracts, as provided in § 1-3.814-2(c). When contracts involve the use of Standard Forms 2-A and 2-B the clause may be amended to provide for the use of the term "lessor" in lieu of the term "contractor."

8 1-7.102-23 Clean air and water.

Insert the clause prescribed by $ 11.2302-2 under the conditions set forth therein. (40 FR 36341, Aug. 20, 1975)



(a) This clause is applicable if the amount of this contract exceeds $10,000 and was entered into by means of negotiation, includ

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