WORKMANSHIP

All work under this contract shall be performed in a skillful and workmanlike manner. The contracting officer may, in writing, require the contractor to remove from work any employee the contracting officer deems incompetent, careless, or otherwise objectionable.

(c) Security investigation of contractor personnel clause.

SECURITY INVESTIGATION OF CONTRACTOR
PERSONNEL

The contracting officer may, at any time under this contract, require a security investigation of contractor personnel. When notified of such a requirement, the contractor shall complete for each employee having a requirement to visit and/or work at an FAA facility such security forms as are furnished by the contracting officer.

§ 2-7.150-24 Refund of royalties.

The contract clause set forth in § 2-9.5114 of this chapter may be included in negotiated fixed-price type contracts under the circumstances described therein.

§ 2-7.150-25 Background patents (license).

If required by the instructions for its use in § 2-9.5103 of this chapter, insert the clause set forth in § 2-9.5103-1 of this chapter.

behalf of the Agency for International Development.

§ 2-7.151-1 Limitations on source.

LIMITATIONS ON SOURCE

In accordance with directives of the Agency for International Development, upon whose behalf this procurement is made, bids or offers under this invitation or solicitation for offers are restricted to those offering commodities from a source not precluded under the AID Geographic Code as defined hereunder and cited in the Invitation for Bids or Solcitation for Offers.

(a) Worldwide-AID Geographic Code 899. Any country in the world except:

Albania, Bulgaria, China, excluding Taiwan (Formosa), but including Manchuria, Inner Mongolia, the provinces of Tsinghai and Sikang, Sinkiang, Tibet, the former Kwantung Leased Territory, the present Port Arthur Naval Base Area and Liaoning Province; Cuba; Czechoslovakia; East Germany (including the Soviet Sector of Berlin); Estonia; Hungary; Latvia; Lithuania; North Korea; North Vietnam; Outer Mongolia; Poland and Danzig; Rumania; and Union of Soviet Socialist Republics.

(b) Limited Worldwide-AID Geographic Code 898. Any country in the world except: (1) The countries listed under Worldwide (AID Code 899) and

(2) The countries listed below:

(d) United States of America and Areas of Associated Sovereignty-AID Geographic Code 000. Includes the United States of America, its possessions, Puerto Rico, and the Trust Territories.

§ 2-7.151-2 Geographic source restriction.

GEOGRAPHIC SOURCE RESTRICTION

(a) For the purpose of this provision: (1) "Component" means those articles, materials, and supplies which are directly incorporated in the commodity.

(2) "Commodity" means an article, or item of material or supply, which is to be procured under this contract.

(3) "Source" means the country or area from which a commodity is shipped to the cooperating country. Where, however, a commodity is shipped from a free port or bonded warehouse in the form in which received therein, source shall mean the country or area from which the commodity was shipped to the free port or bonded warehouse. (b) By submission of a bid or offer, the bidder or offeror certifies that:

(1) The source of any commodity supplied under any resultant contract will be a country or area authorized by the AID Geographic Code specified in the Invitation for Bids or Solicitation for Offers;

(2) Such commodity will be mined, grown, or produced through manufacture, assembly, or processing in an authorized source country (the AID Geographic Code specified in the Invitation for Bids or Solicitation for Offers); and

(3) A produced commodity does not contain any components (A) imported in contravention of Foreign Assets Control (FAC) or Cuban Assets Control (CAC) Regulations, (B) mined, grown, or produced in countries not included in AID Geographic Code 899, or (C) mined, grown or produced in free world countries (AID Geographic Code 899) other than authorized source countries, and acquired by the producer in the form in which imported, the total cost of which (delivered to the point of production) amounts to more than ten percent (unless otherwise specified in the Invitation for Bids or Solicitation for Offers) of the lowest price (excluding the cost of ocean transportation and insurance) at which the bidder is offering the commodity pursuant to this Invitation for Bids or Solicitation for Offers, or if it does exceed such percentage, the commodity has been or is being commercially exported by the bider or offeror under AID financing and meets the imported component limitation currently in effect under such financing. Subpart 2-7.2-Cost Reimbursement Type Supply Contracts

§ 2-7.200 Scope of subpart.

This subpart sets forth or cites contract clauses to be used in cost-reimbursement type supply contracts and where necessary provides instructions for their use.

§ 2-7.250 Clauses.

The following clauses shall, unless otherwise indicated by the specific instructions for their use, be inserted in all cost reimbursement type contracts calling for delivery within the United States, its possessions, or Puerto Rico and, unless inappropriate, in cost-reimbursement supply type contracts calling for foreign delivery.

§ 2-7.250-1 Definitions.

Insert the clause set forth in § 17.101-1 and any additional definitions that are not inconsistent with the definitions in the cited clause.

§ 2-7.250-2 Changes.

The contracting officer if he considers it desirable may change the period of 30 days for the assertion of a claim to any number of days up to, but not to exceed 60 days.

CHANGES

The contracting officer may at any time, by a written order, and without notice to the sureties, if any, make changes, within the general scope of this contract, in any one or more of the following: (i) Drawings, designs, or specifications, (ii) method of shipment or packing; (iii) place of inspection, delivery or acceptance, and (iv) the amount of Government-furnished property. If any such changes cause an increase or decrease in the estimated cost of, or the time required for, performance of this contract, or otherwise affects any other provisions of this contract, whether changed or not changed by any such order, an equitable adjustment shall be made (i) in the estimated cost or delivery schedule, or both, (ii) in the amount of any fee to be paid to the contractor and/or (iii) in such other provisions of the contract as may be so affected, 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. 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. § 2-7.250-3 Limitation of cost.

LIMITATION OF COST

(a) It is estimated that the total cost to the Government, exclusive of any fixed fee, for the performance of this contract will

not exceed the estimated cost set forth in the schedule, and the contractor agrees to use its best efforts to perform the work specified in the schedule, and all obligations under this contract within such estimated cost. If at any time the contractor has reason to believe that the costs which it expects to incurin the performance of this contract in the next succeeding 60 days, when added to all costs previously incurred, will exceed 75 percent of the estimated cost then set forth in the schedule, or if at any time, the contracor has reason to believe that the total cost to the Government, exclusive of any fixed fee, for the performance of this contract will be substantially greater or less than the then estimated cost thereof, the contractor shall immediately notify the contracting officer in writing to that effect, giving the revised estimate of such total cost for the performance of this contract.

(b) The Government shall not be obligated to reimburse the contractor for costs incurred in excess of the estimated cost set forth in the schedule, and the contractor shall not be obligated to continue performance under the contract or to incur costs in excess of the estimated cost set forth in the schedule, unless and until the contracting officer shall have notified the contractor in writing that such estimated cost has been increased and shall have specified in such notice a revised estimated cost, which shall thereupon constitute the estimated cost of performance of this contract. When and to the extent that the estimated cost set forth in the schedule has been increased, any costs incurred by the contractor in excess of such estimated cost prior to the increase in estimated cost shall be allowable to the same extent as if such costs had been incurred after such increase in estimated cost.

(c) If, (1) the contractor stops performance before completion of all work hereunder because it has incurred costs in the amount of or in excess of the estimated contract, cost set forth in the schedule, and (2) the contracting officer elects not to increase such estimated cost, the contractor's fixed fee will be equitably reduced to reflect the actual amount of work performed as compared with the full amount of the work required in the contract. In the event of failure to agree as to the amount of such reduction, the contracting officer shall determine the amount, subject to the right of the contractor to appeal therefrom pursuant to the clause in the contract entitled "Disputes." This paragraph shall not, in any way, limit the rights of the Government under the clause in the contract entitled "Termination for Default or for Convenience of the Government."

§ 2-7.250-4 Allowable cost, fixed fee and payment.

ALLOWABLE COST, FIXED FEE, AND PAYMENT (a) For the porformance of this contract, the Government shall pay to the contractor:

(1) The cost thereof (hereinafter referred to as "allowable cost") determined by the contracting officer to be allowable in accordance with

(i) Subpart 1-15.2 of Part 1-15 of the Federal Procurement Regulations as in effect on the date of this contract; and

(ii) The terms of this contract; and

(2) Such fixed fee, if any, as may be provided for in the Schedule.

(b) Once each month (or at more frequent intervals, if approved by the contracting officer) the contractor may submit to an authorized representative of the contracting officer, in such form and reasonable detail as such representative may require, an invoice or public voucher supported by a statement of cost incurred by the contractor in the performance of this contract and claimed to constitute allowable cost.

(c) Promptly after receipt of each invoice or voucher and statement of cost the Government shall, except as otherwise provided in this contract, subject to the provisions of (d) below, make payment thereon as approved by the contracting officer of allowable cost incurred. Payment of the fixed fee, if any, shall be made to the contractor as specified in the Schedule: Provided, however, That after payment of 85 percent of the fixed fee set forth in the schedule, further payment on account of the fixed fee shall be withheld until a reserve of either 15 percent of the total fixed fee, or $100,000, whichever is less, shall have been set aside.

(d) At any time or times prior to final payment under this contract the contracting officer may have the invoices or vouchers and statements of cost audited. Each payment theretofore made shall be subject to reduction for amounts included in the related invoice or voucher, which are found by the contracting officer on the basis of such audit, not to constitute allowable cost. Any payment may be reduced for overpayments, or increased for underpayments on preceding invoices or vouchers.

(e) On receipt and approval of the invoice or voucher designated by the contractor as the "Completion invoice" or "Completion voucher" and upon compliance by the contractor with all the provisions of this contract (including, without limitation, the provisions relating to patents and the provisions of (f) below), the Government shall promptly pay to the contractor any balance of allowable cost, and any part of the fixed fee which has been withheld pursuant to (c) above or otherwise not paid to the contractor. The completion invoice or voucher shall be submitted by the contractor promptly following completion of the work under this contract but in no event later than 1 year (or such longer period as the contracting officer may in his discretion approve in writing) from the date of such completion.

(f) The contractor agrees that any refunds, rebates, credits, or other amounts (including any interest thereon) according to or received by the contractor or any as

signee under this contract shall be paid by the contractor to the Government, to the extent that they are properly allocable to costs for which the contractor has been reimbursed by the Government under this contract. Reasonable expenses incurred by the contractor for the purpose of securing such refunds, rebates, credits, or other amounts shall be allowable costs hereunder when approved by the contracting officer. Prior to final payment under this contract, the contractor and each assignee under this contract whose assignment is in effect at the time of final payment under this contract, shall execute and deliver:

(1) An assignment to the Government, in form and substance satisfactory to the contracting officer, of refunds, rebates, credits, or other amounts (including any interest, thereon) properly allocable to costs for which the contractor has been reimbursed by the Government under this contract; and (2) A release discharging the Government, its officers, agents, and employees from all liabilities, obligations, and claims arising out of or under this contract, subject only to the following exceptions:

(i) Specified claims in stated amounts or in estimated amounts where the amounts are not susceptible of exact statement by the Contractor;

(ii) Claims, together with reasonable expenses incidental thereto, based upon liabilities of the contractor to third parties arising out of the performance of this contract: Provided, That such claims are not known to the contractor on the date of the execution of the release: And provided further, That the contractor gives notice of such claims in writing to the contracting officer not more than 6 years after the date of the release or the date of any notice to the contractor that the Government is prepared to make final payment, whichever is earlier; and

(iii) Claims for reimbursement of costs (other than expenses of the contractor by reason of its indemnification of the Government against patent liability), including reasonable expenses incidental thereto, incurred by the contractor under the provisions of this contract relating to patents.

(g) Any cost incurred by the contractor under the terms of this contract which would constitute allowable cost under the provisions of this clause shall be included in determining the amount payable under this contract, notwithstanding any provisions contained in the specifications or other documents incorporated in this contract by reference, designating services to be performed or materials to be furnished by the contractor at his expense or without cost to the Government.

§ 2-7.250-5 Assignment of claims.

Insert the clause set forth in § 1-30.703 of this title. However, the "no set-off" provision should not be included in negotiated procurements where the con

tractor is indebted to the Government and its omission appears appropriate to protect the interests of the Government. § 2-7.250-6 Examination of records. EXAMINATION OF RECORDS

(a) (1) The contractor agrees to maintain books, records, documents, and other evidence pertaining to the costs and expenses of this contract (hereinafter collectively called the "records") to the extent and in such detail as will properly reflect all net costs, direct and indirect, of labor, materials, equipment, supplies and services, and other costs and expenses of whatever nature for which reimbursement is claimed under the provisions of this contract.

(2) The contractor agrees to make available at the office of the contractor at all reasonable times during the period set forth in subparagraph (4) below any of the records for inspection, audit or reproduction by any authorized representative of the Comptroller General.

(3) In the event that the Comptroller General or any of his duly authorized represenatives determines that his audit of the amounts reimbursed under this contract as transportation charges will be made at a place other than the office of the contractor, the contractor agrees to deliver, with the reimbursement voucher covering such charges or as may be otherwise specified within 2 years after reimbursement of charges covered by any such voucher, to such representative as may be designated for that purpose through the contracting officer such documentary evidence in support of transportation costs as may be required by the Comptroller or any of his duly authorized representatives.

(4) Except for documentary evidence delivered to the Government pursuant to subparagraph (3) above, the contractor shall preserve and make available his records (i) for a period of 3 years from the date of final payment under this contract, and (ii) for such longer period, if any, as is required by applicable statute, by any other clause of this contract, or by (a) or (b) below. this (a) If contract is completely or partially terminated, the records relating to the work terminated shall be preserved and made available for a period of 3 years from the date of any resulting final settlement.

(b) Records which relate to (i) appeals under the Disputes clause of this contract, (ii) litigation or the settlement of claims arising out of the performance of this contract, or (iii) cost and expenses of this contract as to which exception has been taken by the Comptroller General or any of his duly authorized representatives, shall be retained by the contractor until such appeals, litigation, claims, or exceptions have been disposed of.

(5) Except for documentary evidence delivered pursuant to subparagraph (3) above, and the records described in subparagraph

(4) (b) above, the contractor may in fulfillment of his obligation to retain his records as required by this clause substitute photographs, microphotographs, or other authentic reproductions of such records, after the expiration of 2 years following the last day of the month of reimbursement to the contractor of the invoice or voucher to which such records relate, unless a shorter period is authorized by the contracting officer with the concurrence of the Comptroller General or his duly authorized representative.

(6) The provisions of this paragraph (a), including this subparagraph (6), shall be applicable to and included in each subcontract hereunder which is on a cost, cost-plusa-fixed-fee, time-and-material, or labor-hour basis.

(b) The contractor further agrees to include in each of his subcontracts hereunder, other than those set forth in subparagraph (a) (6) above, a provision to the effect that the subcontractor agrees that the Comptroller General or any of his duly authorized representatives, shall, until the expiration of 3 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 paragraph (b) only excludes (1) purchase orders not exceeding $2,500 and (ii) subcontracts or purchase orders for public utility services at rates established for uniform applicability to the general public. § 2-7.250-7 Termination for default or

for convenience of the Government. Insert the clause set forth in § 1-8.702 of this title. However, if the contract as originally executed provides for costsharing by the contractor, or by subsequent modification is deemed possible of being amended to so provide for costsharing, the clause shall be revised to establish the basis on which costs will be shared in the event of termination by the Government for (a) convenience or (b) default.

§ 2-7.250-8 Disputes.

Insert the clause set forth in § 1-7.10112 of this title.

§ 2-7.250-9 Notice and assistance regarding patent and copyright infringement.

Insert the clause set forth in § 1-7.101-13 of this title under the condition contained therein.

§ 2-7.250-10 Buy American Act.

Insert the clause set forth in § 1-6.1045 of this title under the conditions contained therein.

Work

Hours

§ 2-7.250-12 Contract Standards Act-Overtime Compensation.

Insert the clause set forth in § 1-12.303 of this title (modified as set forth in § 2-7.101-16) under the conditions contained in § 1-12.302 of this title.

§ 2-7.250-13 Walsh-Healey Public Contracts Act.

Insert the clause set forth in § 1-12.605 of this title under the conditions contained in § 1-12.602 of this title.

§ 2-7.250-14 Equal opportunity.

Insert the clause set forth in § 1-12.803-2 of this title.

§ 2-7.250-15 Officials not to benefit. Insert the clause set forth in § 1-7.101-19 of this title.

§ 2-7.250-16 Covenant against contingent fees.

Insert the clause set forth in § 1-1.503 of this title under the conditions contained in § 1-1.501 of this title.

§ 2-7.250-17 Utilization of small busi

ness concerns.

Insert the clause set forth in § 1-7.710-3(a) of this title under the conditions contained therein.

§ 2-7.250-18 Small business subcontracting program.

When the criteria specified in § 11.710-3(b) of this title are met, insert the clause contained therein.

§ 2-7.250-19 Utilization of concerns in labor surplus areas.

Insert the clause set forth in § 1-1.8053(a) of this title under the conditions contained therein.

§ 2-7.250-20 Labor surplus area subcontracting program.

When the criteria specified in § 11.805-3(b) of this title are met, insert the clause contained therein. § 2-7.250-21

Subcontracts. SUBCONTRACTS

(a) The contractor shall give advance notification to the contracting officer of any proposed subcontract hereunder which (1) is cost-reimbursement type, time and materials,