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PART 1-7—CONTRACT CLAUSES sec.

Sec.

1-7.000 Scope of part.

;.sport 1-7.1 n»»J fiita S»M»I Contracts 1-7.100 Scope of subpart.

1-7.101 Clauses.

1-7.101-1 Definitions.
1-7.101-2 Changes.
1-7.101-3 Extras
1-7.101-4 Variation in quantity.
1-7.101-6 Inspection.
1-7.101-8 Responsibility for supplies.
1-7.101-7 Payments.
1-7.101-8 Assignment of claims.
1-7.101-0 Additional bond security.
1-7.101-1O Examination of records.
1-7.101-11 Default.
1-7.101-12 Disputes.

1-7.101-13 Notice and assistance regarding patent and copyright Infringement.

1-7.101-14 Buy American Act. 1-7.101-15 Convict labor. 1-7.101-16 Contract Work Hours Standards

Act—overtime compensation. 1-7.101-17 Walsh-Healey Public Contracts

Act.

1-7.101-18 Equal opportunity. 1-7.101-19 Officials not to benefit. I-7.101-2O Covenant against contingent

fees. 1-7.101-21 Utilization of small business

concerns.

1-7.101-22 Federal, State, and local taxes. 1-7.101-23 Liquidated damages. 1-7.101-24 Humane slaughter of livestock. -7401-25 Utilization of concerns in labor

surplus areas. -7.101-28 Small business subcontracting

program.

-7.101-27 Labor surplus area subcontractIng program. -7.101-28 Termination for convenience of

the Government. -7.101-29 Price reduction for defective

cost or pricing data. -7.101-30 Audit and records. -"101-31 Subcontractor cost and pricing

data. -7 101-32 Advance payments.

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Subport I-7.J—[Reserved!

Subpart 1-7.3 [Reserved]

Subpart 1-7.4—[Reserved]

Subport 1-7 5—[Reserved]

Subpart 1-7.6 f,,ed-Price Construction

Contracts

1-7.600 Scope of subpart. 1-7.601 Required clauses. 1-7.601-1 Clauses In standard construction

contract forms.

1-7.602 Additional standardized clauses. 1-7.602-1 Price adjustment for suspension. delay, or interruption of the work.

1-7.602-2 Termination for convenience of the Government, in contracts estimated to exceed $10,000.

1-7.602-3 Termination for convenience of the Government, in contracts estimated not to exceed •10.0000. Price reduction for defective

cost or pricing data. Audit and records. Subcontractor cost and pricing

data.

Examination of records.
Advance payments.
Workmen's compensation Insur-
ance (Defense Base Act).
Federal, State, and local taxes.

1-7.602-4

1-7.602-5 1-7.602-6

1-7.602-7 1-7.602-8 1-7.602-9

1-7.602-10

Aothoritt: The provisions of this Part 1-7 Issued under sec. 205(c), 63 Stat. 390: 40 U.S.C.486(c).

Source: The provisions of this Part 1-7 appear at 29 FJl. 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).

Subpart 1-7.1—Fixed-Price Supply Contracts

§ 1-7.100 Scope of subpart.

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

§ 1-7.101 Clauses.

Except as otherwise provided in this 51-7.101, the clauses set forth in this section shall be used in fixed-price supply contracts entered into by formal advertising and, unless inappropriate, should be used in negotiated contracts (other than for small purchases as defined in Subpart 1-3.6).

§ 1-7.101-1 Definitions.

Definitions

As used throughout this contract, the following terms shall have the meanings 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 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.

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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: (1) Drawings, designs, or specifications, where the supplies to be furnished are to be specially manufactured for the Government In accordance therewith; (11) method of shipment or packing; and (ill) 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 Cc tractor for adjustment under this clai must be asserted within 30 days from 1 date of receipt by the Contractor of t notification of change: Provided, hoieei That the Contracting Officer, If he decli that the facts Justify such action, may celve and act upon any such claim asser at any time prior to final payment uni this contract. Where the cost of prope made obsolete or excess as a result ol change is Included in the Contractor's ell for adjustment, the Contracting Officer si have the right to prescribe the manner disposition of such property. Failure agree to any adjustment shall be a disp concerning a question of fact within meaning of the clause of this contract titled "Disputes." However, nothing In 1 clause shall excuse the Contractor from p ceedlng with the contract as changed.

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(a) All supplies (which term through this clause Includes without limitation materials, components, Intermediate ass biles, and end products) shall be subjcc Inspection and test by the Government the extent practicable at all times and p'including the period of manufacture, ant any event prior to acceptance.

(b) In case any supplies or lots of i piles are defective in material or workm ship or otherwise not In conformity i the requirements of this contract, the C ernment shall have the right either to n them (with or without Instructions si their disposition) or to require their rectlon. Supplies or lots of supplies wl have been rejected or required to be reeled shall be removed, or, If permlttM required by the Contracting Officer, rected In place by and at the expense of Contractor promptly after notice, and i not thereafter be tendered for accep'-i unless the former rejection or requires of correction is disclosed. If the Contra falls promptly to remove such supplie lou o* supplies which are required to be removed, or promptly to replace or correct web supplies or lots of supplies, the Government either (1) may by contract or otherwise replace or correct such supplies and charge to the Contractor the cost occasioned the Government thereby, or (ii) may terminate this contract for default as provided In the clause of this contract entitled "DeUnit.*' Unless the Contractor corrects or rtpiace* such supplies within the delivery schedule, the Contracting Officer may require the delivery of such supplies at a reduction In price which is equitable under the circumstances. Failure to agree to such reduction of price shall be a dispute concerntot a question of fact within the meaning ti the clause of this contract entitled 'Disputes."

Ic) If any Inspection or test is made by -e Government on the premises of the Contractor or a subcontractor, the Contractor without additional charge shall provide all reasonable facilities and assistance for the aafrty and convenience of the Government irjpectors In the performance of their duties. If Government Inspection or test Is made at a point other than the premises of the Contractor or a subcontractor, it shall be at the expense of the Government except u otherwise provided In this contract: Provided, That In case of rejection the Government shall not be liable for any reduction In value of samples used In connection with such Inspection or test. All Inspections and tests by the Government shall be performed tn such a manner as not to unduly delay the •ort The Government reserves the right to charge to the Contractor any additional cost of Government inspection and test when supplies are not ready at the time such Inspection and test Is requested by the Contractor or when relnspectlon or retest is neeealtated by prior rejection. Acceptance or rejection of the supplies shall be made as promptly as practicable after delivery, except u otherwise provided In this contract; but Allure to Inspect and accept or reject supfiles shall neither relieve the Contractor torn responsibility for such supplies as are Uk In accordance with the contract requireaents nor Impose liability on the GovernDent therefor.

(d) The Inspection and test by the Govrament of any supplies or lots thereof does lot relieve the Contractor from any responslKlity regarding defects or other failures to Beet the contract requirements which may

* discovered prior to acceptance. Except as Kherwlse provided in this contract, acceptace shall be conclusive except as regards atent defects, fraud, or such gross mistakes

• amount to fraud.

<e» The Contractor shall provide and Mtlntaln an inspection system acceptable

0 the Government covering the supplies terrunder. Records of all Inspection work

1 the Contractor shall be kept complete

and available to the Government during the performance of. this contract and for such longer period as may be specified elsewhere in this contract.

§ 1-7.101-6 Responsibility for supplies.

Responsibility For Supplies

Except as otherwise provided in this contract, (1) the Contractor shall be responsible for the supplies covered by this contract until they are delivered at the designated delivery point, regardless of the point of inspection; (11) after delivery to the Government at the designated point and prior to acceptance by the Government or rejection and giving notice thereof by the Government, 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 negligence of officers, agents, or employees of the Government acting within the scope of their employment; and (111) 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 employment.

§ 1-7.101-7 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, payment 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.

§1-7.101—8 Assignment of claims.

Insert the clause set forth In § 1-30.703 under the conditions contained therein.

§ 1-7.101-9 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.

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§ 1—7.101—10 Examination of records.

Examination Of Records

(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 authorized 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 (1) purchase orders not exceeding $2,500 and (11) subcontracts >or purchases orders for public utility services at rates established for uniform applicability to the general public.

The above clause shall be Included in negotiated contracts as provided in §1-3.814-2(6). When Standard Form 32 is used, the form need not be changed to delete the parenthetical sentence preceding paragraph (a) of the clause.

§ 1-7.101-11 Default.

Insert the clause set forth in I 1-8.707 under the conditions prescribed in § 1-8.700-2(b)(l).

§ 1-7.101-12 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 mall or otherwise furnish a copy thereof to the Contractor. The decision of the Contracting Officer shall be final and conclusive unless within 30 days from the date of receipt of such copy, the Contractor malls 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 determination 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 appe Pending final decision of a dispute hei under, the Contractor shall proceed dl gently with the performance of the contra and in accordance with the Contract! Officer's decision.

(b) This "Disputes" clause does not pi elude consideration of law questions in co nectlon with decisions provided for In pai graph (a) above: Provided, That notht In this contract shall be construed as ma Ing final the decision of any admlnlstrat I official, representative, or board on a qui tlon of law.

§ 1-7.101-13 Notice and assistance i garding patent and copyright i fringement.

Notice And Assistance Regarding Pate And Copyright Infringement

(a) The Contractor shall report to t Contracting Officer, promptly and in reaso able written detail, each notice or claim patent or copyright infringement based the performance of this contract of which t Contractor has knowledge.

(b) In the event of any claim or si against the Government on account of a alleged patent or copyright infrlngeme arising out of the performance of this co tract or out of the use of any supplies fi nlshed or work or services performed hei under, the Contractor shall furnish to t Government, when requested by the Co trading Officer, all evidence and Informatl in possession of the Contractor pertaining such suit or claim. Such evidence and I formation shall be furnished at the exper of the Government except where the Co tractor has agreed to indemnify the Oover ment.

The above clause shall be included on if the amount of the contract excee $10,000.

§ 1-7.101-14 Buy American Act.

Insert the clause set forth In § 1-6.10 5 under the conditions contained there)

§ 1-7.101-15 Convict labor.

Insert the clause set forth In i 1-12.2 under the conditions contained § 1-12.202.

§ 1-7.101-16 Contract Work I!

Standards Act—overtime compeni lion.

Insert the clause set forth In { 1-12.3 under the conditions contained I 1-12.302.

§ 1-7.101-17 Walsh-Healey Public Co tracts Act.

Insert the clause set forth in g 1-12.6 under the conditions contained I 1-12.602.

i 1-7.101-18 Equal opportunity.

Insert the clause set forth In § 1-12.103-2 under the conditions contained In ! 1-12.803-1.

5 1-7.101-19 Officials not to benefit.

Officials Nor To Benefit

No member of or delegate to Congress, or ^.dent commissioner, shall be admitted to my share or part of this contract, or to any benefit that may arise therefrom; but this provision shall not be construed to extend to thli contract If made with a corporation for Iti general benefit.

j 1-7.101—20 Covenant against contingent fees.

Insert the clause set forth in § 1-1.503 under the conditions contained In 1 1-1.501.

§ 1-7.101—21 Utilization of small business concerns.

Insert the clause set forth in ! 1-1.7103(t) under the conditions and in the manner prescribed therein.

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Insert either the clause in § 1-11.401-1 or the clause in 5 1-11.401-2 and, when appropriate. Insert the supplementary clause in J 1-11.401-3 (a), in accordance with the conditions contained in those sections.

I 1-7.101—23 Liquidated damages.

Insert the provision set forth in i '.-1315-3 under the conditions and in the manner prescribed in § 1-1.315.

I 1-7.101—24 Humane slaughter of livestock.

Insert the clause set forth in § 1-4.605 :r In J 1-4.606 under the procedures prodded in 1 1-4.604.

I 1-7.101—25 Utilization of concerns in labor surplus areas.

Insert the clause set forth in 5 1-1.805Ka) under the conditions and in the nanner prescribed therein.

I 1—7.101-26 Small business subcontracting program.

Insert the clause set forth in i 1-1.710!<b> under the conditions and in the nanner prescribed therein.

§ 1-7.101-27 Labor surplus area subcontracting program.

Insert the clause set forth in § 1-1.8053(b) under the conditions and in the manner prescribed therein.

§ 1-7.101-28 Termination for convenience of the Government.

Whenever a termination for convenience clause is to be included, insert either the clause set forth hi § 1-8.701 or the clause set forth in § 1-8.705-1, as appropriate, under the conditions prescribed in §§ l-8.700-2(a)(l) and 1-8.700-2(a)(2).

§ 1-7.101-29 Price reduction for defective cost or pricing data.

Insert the appropriate clause set forth In § 1-3.814-1 under the conditions described therein.

§ 1-7.101-30 Audit and records.

Insert the appropriate clause or clauses set forth in § 1-3.814-2 under the conditions described therein.

§ 1-7.101-31 Subcontractor cost and pricing data.

Insert the appropriate clause set forth In § 1-3.814-3 under the conditions described therein.

§ 1-7.101-32 Advance payments.

When advance payments are to be made in accordance with Subpart 1-30.4, insert the appropriate provisions as prescribed in § 1-30.414-2.

§ 1—7.101—33 Progress payments.

When progress payments are to be made in accordance with Subpart 1-30.5, Insert the appropriate clause as provided In § 1-30.510.

§ 1-7.101-34 Workmen's compensation insurance (Defense Base Act).

In accordance with the requirements of § 1-10.403, insert the clause set forth therein.

Subpart 1-7.2—[Reserved!
Subpart 1-7.3—[Reserved!
Subpart 1-7.4—[Reserved!
Subpart 1-7.5—[Reserved!

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