agrees that the need for such progress payments will not be considered as a handicap or adverse factor in the award of subcontracts. (b) In contracts of the types listed § 3.903-2(b) of this chapter, insert the following paragraph (g) in lieu of paragraph (g) of the clause set forth in paragraph (a) of this section: (g) Notwithstanding (c) above, the Contractor may enter into subcontracts without the prior written consent of the Contracting Officer if the Contracting Officer has, in writing, approved the Contractor's purchasing system and the subcontract is within the limitations of such approval. (April 1964) (c) In paragraph (c) of the foregoing clause, the dollar amount or percentage of contract cost relating to fixed-price type subcontracts may be varied, the dollar value of special tooling may be increased, and for the other types of subcontracts specified therein, dollar amounts not in excess of $10,000 may be established, in accordance with Departmental procedures, below which the prior written consent of the contracting officer need not be obtained. [29 F.R. 11821, Aug. 19, 1964] § 7.203-9 Utilization of small business proval of 1 maintain a selfinsurance 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, as 1 may from time to time require or approve, and with insurers approved by (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. (c) The Contractor shall be reimbursed: (1) 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) for liabilities to third persons for loss 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, its agents, servants or employees, provided such liabilities are represented by final judgments or by settlements approved in writing by the Government, and expenses incidental to such liabilities, except liabilities (1) 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 --* 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 its 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 re 1 In the foregoing clause, insert, in contracts of the Department of the Army the words "the Contracting Officer," and insert, in contracts of the Department of the Navy and the Department of the Air Force, the activity designated in accordance with Departmental procedures. quired 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 its own expense, be associated with the representatives of the Government in the settlement or defense of any such claim or litigation. In the foregoing clause, insert, in the contracts of the Department of the Army and the Department of the Air Force, the words "the Contracting Officer." and insert, in the contracts of the Department of the Navy, the words "the Department," in the space designated by an asterisk (------*). [25 F.R. 14198, Dec. 31, 1960] § 7.203-23 Authorization and consent. Insert the contract clause set forth in § 9.102-1 of this subchapter [25 F.R. 14199, Dec. 31, 1960] § 7.203-24 Notice and assistance regarding patent infringement. Insert the contract clause set forth in § 9.104 of this subchapter. [25 F.R. 14199, Dec. 31, 1960] § 7.203-25 Soviet-controlled areas. In accordance with the requirements of § 6.403 of this subchapter, insert the contract clause set forth therein. [25 F.R. 14199, Dec. 31, 1960] (b) In accordance with the requirements of § 6.204-5 of this chapter, insert the clause entitled Buy American Act. [30 F.R. 5987, Apr. 29, 1965] § 7.204-2 Workmen's compensation in surance overseas. In accordance with the requirements of § 10.403 of this chapter, insert the clause entitled "Workmen's Compensation Insurance (Defense Base Act)". [26 F.R. 9638, Oct. 12, 1961] § 7.204-3 Buy American Act. In accordance with the requirements of § 6.104-5 of this chapter, insert the clause set forth therein. [25 F.R. 14199, Dec. 31, 1960] § 7.204-4 Notice to the Government of labor disputes. Insert the clause set forth in § 7.104-4 in all contracts involving the furnishing or production of any item on the Department of Defense Master Urgency List and in any other contract of a class or kind which the Head of the Procuring Activity concerned determines to be appropriate for the use of such a clause. [25 F.R. 14199, Dec. 31, 1960] § 7.204-5 Patent indemnity. In accordance with the requirements of § 9.103 of this chapter, insert the appropriate contract clause with additional provisions as prescribed, set forth in said section. [25 F.R. 12199, Dec. 31, 1960] § 7.204-6 Filing of patent applications. In accordance with the requirements of § 9.106 or § 9.106-1, insert either of the contract clauses set forth therein, as appropriate. [25 F.R. 14199, Dec. 31, 1960] § 7.204-7 Patent rights. In accordance with the requirements of § 9.107 of this chapter, insert the appropriate clause with additional provisions as prescribed, set forth in said section. [25 F.R. 14199, Dec. 31, 1960] § 7.204-8 Reporting of royalties. In accordance with the requirements of § 9.110 of this chapter, insert the contract clause set forth therein. [25 F.R. 14199, Dec. 31, 1960] § 7.204-9 Rights in data. In accordance with the requirements of Subpart B, Part 9 of this chapter, insert one of the contract clauses set forth in §§ 9.203(b), 9.204-2, or 9.206 of this chapter, as appropriate. When the contract clause in § 9.203 (b) is used, the appropriate additional provisions shall be added in accordance with the requirements of § 9.203; and the additional provision in § 9.204-1 may be added under the circumstances set forth in that section. When the clause in § 9.203(b) is used, the appropriate "Data-Withholding of Payment" clause in § 9.207 shall also be used. [30 F.R. 5987, Apr. 29, 1965] § 7.204-10 Quality program. In accordance with the instructions in § 14.104-3 of this chapter, insert the clause set forth in § 7.104-28. [29 F.R. 11821, Aug. 19, 1964] § 7.204-11 Excess profit. In accordance with the instructions set forth in § 7.104-11, insert the appropriate contract clause set forth in said section. [25 FR. 14199, Dec. 31, 1960] § 7.204-12 Military security require ments. In accordance with the requirements of § 7.104-12, insert the contract clause set forth in said section, deleting paragraphs (e) and (f) therefrom and substituting therefor the following paragraphs (e) and (f): (e) 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 change causes an increase or decrease in the estimated cost of performance of this contract, the estimated cost and fixed fee shall, to the extent appropriate, be subject to an equitable adjustment. Any such equitable adjustment shall be accomplished in the manner set forth in the "Changes" clause in this contract. (1) 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 (f) but excluding paragraph (e) of this clause. The Contractor may insert in any such subcontract, and any such subcontract entered into thereunder may contain, in lieu of paragraph (e) of this clause, provisions which permit equitable adjustments to be made in the subcontract price or in the estimated cost and fixed fee of the subcontract (as appropriate to the type of subcontract involved) on account of changes in security classifications or requirements made under the provisions of this clause subsequent to the date of the subcontract involved. [25 F.R. 14199, Dec. 31, 1960] § 7.204-13 Preference for certain domestic commodities. In accordance with the requirements of § 6.305 of this chapter, insert the clause set forth therein. [25 F.R. 14199, Dec. 31, 1960] § 7.204-14 Gratuities. Insert the clause set forth in § 7.10416, except in contracts and purchase orders with foreign governments obligating solely funds other than those contained in Department of Defense appropriation acts. [20 F.R. 6925, May 27, 1964] § 7.204-15 Priorities, allocations and allotments. In accordance with the requirements of § 1.307-2 of this subchapter, insert the contract clause set forth in § 7.104-18. [25 F.R. 14199, Dec. 31, 1960] § 7.204-16 Negotiated overhead rates. Insert the contract clause set forth in § 3.704-1 of this chapter in all contracts with concerns other than educational institutions where negotiated overhead rates pursuant to Subpart G, Part 3 of this chapter are to be used. [28 F.R. 2581, Mar. 16, 1963] § 7.204-17 Employment of ocean-going vessels-ocean transport of Government-owned supplies. In accordance with the requirements of Subpart N, Part 1 of this chapter, insert one of the clauses set forth in § 1.1404 of this chapter, as appropriate. [29 F.R. 2832, Feb. 29, 1964] § 7.204-18 Limitation on withholding of payments. In accordance with the instructions in § 7.104-21, insert the contract clause set forth therein. [25 F.R. 14199, Dec. 31, 1960] In accordance with the requirements of § 3.902-4 of this subchapter, insert the clause set forth therein. [25 F.R. 14199, Dec. 31, 1960] § 7.204-21 Flight risks. In contracts for the development, production, modification, maintenance, or overhaul of aircraft, or otherwise involving the furnishing of aircraft to the contractor by the Government, insert the clause set forth in § 10.504 of this chapter. [26 F.R. 9638, Oct. 12, 1961] § 7.204-22 Duty-free entry. In accordance with the requirements of § 6.603-2 of this chapter, insert either or both of the clauses set forth in § 6.603-3 of this chapter. [27 F.R. 11656, Nov. 27, 1962] § 7.204-23 Duty-free entry of listed Canadian supplies. In accordance with the requirements of § 6.605-2 of this chapter, insert the clause set forth therein. [26 F.R. 9638, Oct. 12, 1961] In accordance with the requirements of § 11.403-2 of this chapter, in contracts to be performed outside the United States, its possessions and Puerto Rico, insert one of the clauses set forth in paragraphs (c) and (d) thereof. [26 F.R. 9638, Oct. 12, 1961] § 7.204-25 Advance payments. When advance payments are to be made in accordance with Subpart D, Part 163 of this chapter, insert the appropriate clause set forth in § 163.64-2 of this chapter. [26 F.R. 9638, Oct. 12, 1961] § 7.204-27 Required source for jewel bearings. In accordance with the requirements of 1.315 of this chapter, insert the clause set forth therein. [27 F.R. 1708, Feb. 22, 1962] § 7.204-28 General Services Administration supply sources. In accordance with the instructions of § 5.907 of this subchapter, insert the clause set forth therein. [27 FR. 3451, Apr. 11, 1962] § 7.204-29 Labor Surplus Area Subcontracting Program. In accordance with the requirements of § 1.805-3(b) of this subchapter, insert the clause set forth therein. [27 F.R. 3451, Apr. 11, 1962] § 7.204-30 Interest. In accordance with the requirements of §§ 163.118 and 163.119 of this chapter, insert the clause set forth in § 163.118. [27 FR. 3451, Apr. 11, 1962] § 7.204-31 United States Products (Military Assistance Program). In accordance with the requirements of § 6.703 of this chapter, insert the contract clause set forth in § 6.703-4 of this chapter. [28 F.R. 2582, Mar. 16, 1963] § 7.204-32 Value Engineering Program requirement. In accordance with the requirements of § 1.1702 of this chapter, insert the clause set forth in § 1.706 of this chapter. [30 F.R. 1736, Feb. 9, 1965] § 7.204-33 Non-use of foreign-flag vessels engaged in Cuban trade. In accordance with the requirements of § 1.1410 of this chapter, insert the clause set forth therein. [29 F.R. 2832, Feb. 29, 1964] § 7.204-34 Multi-year procurement. In accordance with the requirements of § 1.322-4 of this chapter, insert the contract clauses set forth therein. [29 F.R. 2832, Feb. 29, 1964] § 7.204-35 New material. In accordance with the requirements of § 1.1208 of this chapter, insert a clause such as is set forth therein. [29 F.R. 2832, Feb. 29, 1964] § 7.204-36 Government surplus. In accordance with the requirements of § 1.1208 of this chapter, insert a clause such as is set forth therein. [29 F.R. 2832, Feb. 29, 1964] |