CONTRACT CLAUSES AND SOLICITATION PROVISIONS or damage to Government property, the Contractor shall enforce the liability of the subcontractor for such loss or destruction of or damage to the Government property for the benefit of the Government. *(5) If this contract is for the development, production, modification, maintenance, or overhaul of aircraft, or otherwise involves the furnishing of aircraft by the Government, the clause of this contract entitled “Flight Risks" shall control, to the extent it is applicable, in the case of loss or destruction of, or damage to, aircraft. (*This subparagraph may be omitted where it is clearly inapplicable.) (h) Access. The Government, and any persons designated by it, shall at all reasonable times have access to the premises where any of the Government property is located, for the purpose of inspecting the Government property. (i) Final Accounting and Disposition of Government Property. Upon the completion of this contract, or at such earlier dates as may be fixed by the Contracting Officer, the Contractor shall submit to the Contracting Officer in a form acceptable to him, inventory schedules covering all items of the Government Property not consumed in the performance of this contract, or not theretofore delivered to the Government, and shall deliver or make such other disposal of such Government Property as may be directed or authorized by the Contracting Officer. The net proceeds of any such disposal shall be credited to the cost of the work covered by the contract or shall be paid in such manner as the Contracting Officer may direct. The foregoing provisions shall apply to scrap from Government Property; provided, however, that the Contracting Officer may authorize or direct the Contractor to omit from such inventory schedules any scrap consisting of faulty castings or forgings, or cutting and processing waste, such as chips, cuttings, borings, turnings, short ends, circles, trimmings, clippings, and remnants, and to dispose of such scrap in accordance with the Contractor's normal practice and account therefor as a part of general overhead or other reimbursable cost in accordance with the Contractor's established accounting procedures. (j) Restoration of Contractor's Premises and Abandonment. Unless otherwise provided herein, the Government: (i) may abandon any Government property in place, and thereupon all obligations of the Government regarding such abandoned property shall cease; and (ii) has no obligation to the Contractor with regard to restoration or rehabilitation of the Contractor's premises, neither in case of abandonment (paragraph (j)(i) above), disposition on completion of need or of the contract (paragraph (i) above), nor otherwise, except for restoration or rehabilitation costs caused by removal of Government property pursuant to paragraph (b) above. (k) Communications. All communications issued pursuant to this clause shall be in writing or in accordance with the "Manual for Military Standard Requisitioning and Issue Procedure (MILSTRIP) for Defense Contractors" (Appendix H, Armed Services Procurement Regulation). (End of clause) As provided in paragraph (i) of the above clause, the contracting officer may, subject to Departmental procedures, authorize or approve use of the contractor's established scrap disposal and accounting procedures whenever the amount and recoverable value of scrap from Government property are relatively minor and the contractor's established procedures for accumulating and disposing of scrap and crediting the proceeds thereof to general overhead or other general cost will permit the Government to share equitably in such scrap recovery through a reduction of overhead or other cost factor affecting reimbursement under the contract. 7-203.21 ARMED SERVICES PROCUREMENT REGULATION CONTRACT CLAUSES AND SOLICITATION PROVISIONS 7-203.22 Insurance-Liability to Third Persons. INSURANCE-LIABILITY TO THIRD PERSONS (1966 DEC) ................ (a) The Contractor shall procure and thereafter maintain workmen's compensation, employer's liability, comprehensive general liability (bodily injury) and comprehensive automobile liability (bodily injury and property damage) insurance, with respect to performance under this contract, and such other insurance as • may from time to time require with respect to performance under this contract; provided, that the Contractor may with the approval of .* maintain a self-insurance program, and provided further, that with respect to workmen's compensation the Contractor is qualified pursuant to statutory authority. All insurance required pursuant to the provisions of this paragraph shall be in such form, in such amounts, and for such periods of time, may from time to time require or approve, and with insurers approved by .*. (See text at end of clause.) (b) The Contractor agrees, to the extent and in the manner required by ..", to submit for the approval of • any other insurance maintained by the Contractor in connection with the performance of this contract and for which the Contractor seeks reimbursement hereunder. (See text at end of clause.) as.......... (c) The Contractor shall be reimbursed: (i) for the portion allocable to this contract of the reasonable cost of insurance as required or approved pursuant to the provisions of this clause, and (ii) without regard to and as an exception to the "Limitation of Cost" or the "Limitation of Funds" clause of this contract, for liabilities to third persons for loss of or damage to property (other than property (A) owned, occupied or used by the Contractor or rented to the Contractor, or (B) in the care, custody, or control of the Contractor), or for death or bodily injury, not compensated by insurance or otherwise, arising out of the performance of this contract, whether or not caused by the negligence of the Contractor, his agents, servants or employees, provided such liabilities are represented by final judgments or settlements approved in writing by the Government, and expenses incidental to such liabilities, except liabilities (I) for which the Contractor is otherwise responsible under the express terms of the clause or clauses, if any, specified in the Schedule, or (II) with respect to which the Contractor has failed to insure as required or maintain insurance as approved by .* (See text at end of clause.) or (III) which results from willful misconduct or lack of good faith on the part of any of the Contractor's directors or officers, or on the part of any of his managers, superintendents, or other equivalent representatives, who has supervision or direction of (1) all or substantially all of the Contractor's business, or (2) all or substantially all of the Contractor's operations at any one plant or separate location in which this contract is being performed, or (3) a separate and complete major industrial operation in connection with the performance of this contract. The foregoing shall not restrict the right of the Contractor to be reimbursed for the cost of insurance maintained by the Contractor in connection with the performance of this contract, other than insurance required to be submitted for approval or required to be procured and maintained pursuant to the provisions of this clause, provided such cost would constitute Allowable Cost under the clause of this contract entitled "Allowable Cost, Fixed Fee and Payment". (d) The Contractor shall give the Government or its representatives immediate notice of any suit or action filed, or prompt notice of any claim made, against the Contractor arising out of the performance of this contract, the cost and expense of which may be reimbursable to the Contractor under the provisions of this contract and the risk of which is then uninsured or in which the amount claimed exceeds the amount of coverage. The Contractor shall furnish immediately to the Government copies of all pertinent papers received by the Contractor. If the amount of the liability claimed exceeds the amount of coverage, the Contractor shall authorize representatives of the Government to collaborate with counsel for the insurance carrier, if any, in settling or defending such claim. If the liability is not insured or covered by bond, the Contractor shall, if required by the Government, authorize representatives of the Government to settle or defend any such claim and to represent the Contractor in or take charge of any litigation in connection therewith; provided, however, that the Contractor may, at his own expense, be associated with the representatives of the Government in the settlement or defense of any such claim or litigation. (End of clause) In the foregoing clause, insert, in contracts of the Department of the Army and the Department of the Air Force, the words "the Contracting Officer," and insert, 7-203.22 ARMED SERVICES PROCUREMENT REGULATION CONTRACT CLAUSES AND SOLICITATION PROVISIONS in contracts of the Department of the Navy, and other Departments, the words "the Department," in the space designated by an asterisk ( * ). 7-203.23 Authorization and Consent. In accordance with 9-102.1, insert the clause in 7-103.22. 7-203.24 Notice and Assistance Regarding Patent Infringement. In accordance with 9-104, insert the clause in 7-103.23. 7-203.25 Communist Areas. In accordance with 6-403, insert the clause in 7-103.15. 7-203.26 Utilization of Concerns in Labor Surplus Areas. In accordance with 1-805.3, insert one or both of the clauses in 7-104.20. 7-203.27 Payment for Overtime Premiums. In accordance with 12–102.6, insert the following clause. PAYMENT FOR OVERTIME PREMIUMS (1967 JUN) (a) Allowable cost shall not include any amount on account of overtime premiums except when (i) specified in (d) below or (ii) paid for work— (A) necessary to cope with emergencies such as those resulting from accidents, natural disasters, breakdowns of production equipment, or occasional production bottlenecks of a sporadic nature; (B) by indirect labor employees such as those performing duties in connection with ad- (C) in the performance of tests, industrial processes, laboratory procedures, loading or (b) The cost of overtime premiums otherwise allowable under (a) above shall be allowed only to the extent the amount thereof is reasonable and properly allocable to the work under this contract. (c) Any request for overtime, in addition to any amount specified in (d) below, will be for all overtime which can be estimated with reasonable certainty shall be used for the remainder of the contract, and shall contain the following: (i) identification of the work unit, such as the department or section in which the requested overtime will be used, together with present workload, manning and other data of the affected unit, sufficient to permit an evaluation by the Contracting Officer of the necessity for the overtime; (ii) the effect that denial of the request will have on the delivery or performance schedule of the contract; (iii) reasons why the required work cannot be performed on the basis of utilizing multishift operations or by the employment of additional personnel; and (iv) the extent to which approval of overtime would affect the performance or payments in connection with any other Government contracts, together with any identification of such affected contracts. (d) The Contractor is authorized to perform overtime, in addition to that performed under (a)(ii), to the extent that the overtime premium does not exceed *. (End of clause) *Insert the amount, in dollars, agreed to during negotiations as representing the overtime premiums applicable to overtime not reimbursable under the exceptions contained in (a)(ii) of the clause. If it was agreed that the contract could be performed without the use of additional overtime, insert "Zero." 7-203.27 ARMED SERVICES PROCUREMENT REGULATION CONTRACT CLAUSES AND SOLICITATION PROVISIONS 7-203.28 Competition in Subcontracting. In accordance with 7-104.40, insert the clause therein. 7-203.29 Audit by Department of Defense. Insert the clause in 7-104.41(a). 7-203.30 Price Reduction for Defective Cost or Pricing Data. In accordance with 7-104.29, insert the applicable clause therein. 7-203.31 Subcontractor Cost and Pricing Data. Insert the clause in 7-104.42(a). 7-203.32 Listing of Employment Openings. Insert the clause in 7-103.27. 7-203.33 Employment of the Handicapped. Insert the clause in 7–103.28. 7-203.34 Clean Air and Water. In accordance with 1-2302.2, insert the clause in 7-103.29. 7-204 Clauses To Be Used When Applicable. 7-204.1 Clauses for Cost Reimbursement Type Supply Contracts Involving Construction Work. (a) In accordance with 12-106 and 18-703, insert the clauses in 7-602.23. (b) In accordance with 7-602.20 and 7-602.24, insert the clauses therein in addition to the clause in 7-104.3. 7-204.2 Workmen's Compensation and War Hazard Insurance Overseas. In accordance with 10-403, insert the clauses in 7-104.2(a) and/or 7-104.2(b) depending on whether all contract employees are subject to the Defense Base Act or whether the Act has been waived as to all or part of the contract employees. Also insert the clause Reimbursement for War Hazard Losses in 7-104.2(c) and the schedule language at 10–502(b) and (c) according to the instructions stated in those paragraphs. 7-204.3 Buy American Act. In accordance with 7-104.3, insert the clause therein. 7-204.4 Notice to the Government of Labor Disputes. In accordance with 7-104.4, insert the clause therein. 7-204.5 Patent Indemnity. In accordance with 9-103, insert the clause with additional applicable provisions in 7-104.5. 7-204.6 Filing of Patent Applications. In accordance with 9-106, insert the clause in 7-104.6. 7-204.7 Patent Rights. When experimental, developmental, or research work may be performed under the contract, insert the appropriate clause in 7-302.23. 7-204.8 Reporting of Royalties. In accordance with 9–110(d), insert the clause in 7-104.8(a). 7-204.9 Rights in Data. In accordance with 7-104.9 insert the appropriate clause, or clauses, therein. 7-204.10 Quality Program. In accordance with 14-304, insert the clause in 7-104.28. 7-204.11 Excess Profit. In accordance with 7-104.11, insert the appropriate clause therein. 7-204.12 Military Security Requirements. In accordance with 7-104.12, insert the clause therein, deleting paragraphs (c) and (d) and substituting the following: 7-204.12 ARMED SERVICES PROCUREMENT REGULATION CONTRACT CLAUSES AND SOLICITATION PROVISIONS (c) If, subsequent to the date of this contract, the security classifications or security requirements under this contract are changed by the Government as provided in this clause, and if such changes cause an increase or decrease in the estimated cost or time required for performance of this contract, the estimated cost, fee, delivery schedule, or any other provision of the contract that may be affected, shall be subject to an equitable adjustment. Any such equitable adjustment shall be accomplished in the manner set forth in the "Changes" clause of this contract. (d) The Contractor agrees to insert, in all subcontracts hereunder which involve access to classified information, provisions which shall conform substantially to the language of this clause, including this paragraph (d) but excluding the last sentence of paragraph (c) of this clause. (1971 APR) 7-204.13 Preference for Certain Domestic Commodities. In accordance with 6-305, insert the clause in 7-104.13. 7-204.14 Gratuities. Insert the clause in 7-104.16, except in contracts and purchase orders with foreign governments obligating solely funds other than those contained in Department of Defense appropriation acts. 7-204.15 Priorities, Allocations, and Allotments. In accordance with the requirements of 1-307.2, insert the clause in 7-104.18. 7-204.16 Negotiated Overhead Rates. (a) In accordance with 3-704.1, insert the following clause in contracts with concerns other than educational institutions. NEGOTIATED OVERHEAD RATES (1970 SEP) (a) Notwithstanding the provisions of the clause of this contract entitled "Allowable Cost, Fixed Fee, and Payment," the allowable indirect costs under this contract shall be obtained by applying negotiated overhead rates to bases agreed upon by the parties, as specified below. (b) The Contractor, as soon as possible but not later than ninety (90) days after the expiration of each period specified in the Schedule, shall submit to the Contracting Officer with a copy to the cognizant audit activity a proposed final overhead rate or rates for that period based on the Contractor's actual cost experience during that period, together with supporting cost data. Negotiation of final overhead rates by the Contractor and the Contracting Officer shall be undertaken as promptly as practicable after receipt of the Contractor's proposal. (c) Allowability of costs and acceptability of cost allocation methods shall be determined in accordance with Part 2 of Section XV of the Armed Services Procurement Regulation as in effect on the date of this contract. (d) The results of each negotiation shall be set forth in a written overhead rate agreement, executed by both parties. Such agreement is automatically incorporated in this contract upon execution and shall specify (i) the agreed final rates, (ii) the bases to which the rates apply, (iii) the periods for which the rates apply, and (iv) the items treated as direct costs. The overhead rate agreement shall not change any monetary ceiling, contract obligation, or specific cost allowance or disallowance provided for in this contract. (e) Pending establishment of final overhead rates for any period, the Contractor shall be reimbursed either at negotiated billing rates as provided in the Schedule or at billing rates acceptable to the Contracting Officer, subject to appropriate adjustment when final rates for that period are established. To prevent substantial over or under payment, billing rates may, at the request of either party, be revised by mutual agreement, either retroactively or prospectively. Any such revision of the negotiated billing rates provided in the Schedule shall be set forth in a modification to this contract. (f) Any failure by the parties to agree on any final rate or rates under this clause shall be considered a dispute concerning a question of fact for decision by the Contracting Officer within the meaning of the "Disputes" clause of this contract. (End of clause) 7-204.16 ARMED SERVICES PROCUREMENT REGULATION |