ARTICLE VIII. SUBCONTRACTS 1. Each subcontract, purchase order, or other recognized form of commercial commitment, in excess of five thousand dollars ($5,000), hereinafter called "subcontract", shall be reduced to writing and shall contain the following provisions: "Whereas the United States of America (hereinafter called the Government) has under date of entered into a contract with ... (hereinafter called the prime contractor) for and supplying "Whereas (hereinafter called the subcontractor) has accepted this contract (hereinafter called subcontract) to furnish the services or supplies set forth herein and incident to the prime contract: "It is understood and agreed that "(a) The Government may at any time by notice in writing to the parties hereto assume the rights and obligations of the prime contractor. Except when such rights and obligations are so assumed by the Government, this subcontract shall not be construed as creating any obligation between the Government and the subcontractor. "(b) This subcontract may be terminated at any time upon notice in writing from the prime contractor to the subcontractor: Provided, That such termination and any settlement or agreement growing out of or incident thereto shall have the prior approval of the Government officer authorized to administer the prime contract. "Upon receipt of such notice, the subcontractor shall, unless the notice directs otherwise, immediately discontinue all work and the placing of all orders for materials, facilities and supplies in connection with the performance of this subcontract, and proceed to cancel promptly all his existing orders and terminate work under all outstanding agreements insofar as such orders and/or work are chargeable to this subcontract: Provided, however, That the actual cost incurred for the protection, collection, and disposition of the property of the prime contractor shall be paid by the prime contractor. "Upon the termination of this subcontract as hereinbefore provided, unless the subcontractor is in default, full and complete settlement of all claims or demands of the subcontractor arising out of this subcontract shall, as soon as practicable after such termination, be made as follows: "(a) The prime contractor shall pay to the subcontractor the contract price not previously paid for articles completely manufactured, or work and or services completely performed. If this subcontract price includes cost of transportation to destination, and the articles are not shipped, such transportation cost shall be deducted therefrom. "(b) The prime contractor shall pay to the subcontractor for work and articles in process of completion that percentage of the subcontract price represented by the percentage of completion, less the salvage value thereof. 66 (c) The prime contractor shall pay to the subcontractor the cost of material on hand purchased for and necessary for the subcontract, which has not entered into production, less the salvage value thereof. "(d) The prime contractor reserves the right to take over all or any part of the uncompleted articles or materials by paying the subcontractor the salvage value thereof. "(e) The prime contractor shall reimburse the subcontractor for the cost of cancelling his subcontracts under this contract in accordance with the principles set forth in subparagraphs (a), (b), (c), and (d) above. "(f) No allowance will be made for prospective profits; but if it is determined that the sum total of the above payments is not adequate to cover the cost to which the subcontractor has been subjected by reason of the termination of this subcontract, the prime contractor may add thereto a sum sufficient to cover such costs. "(g) The sum total of the payments so made shall not exceed the total amount of the subcontract less payments previously made." 2. If, during the progress of the work, the contractor performs work which he originally planned to subcontract as per exhibit A, or if he subcontracts work not shown therein, and such change effects an increase or decrease in the use of facilities, an equitable adjustment shall be made in the fee and the depreciation allowance. ARTICLE IX. TERMINATION 1. This contract may be terminated by the Government at any time upon notice in writing from the contracting officer to the contractor. Such termination shall be effective in the manner and upon the date specified in said notice and shall be without prejudice to any claims which the Government may have against the contractor. Upon receipt of such notice the contractor shall, unless the notice directs otherwise, immediately discontinue all work and the placing of all orders for material, facilities, and supplies in connection with the performance of this contract, and shall proceed to cancel promptly all his existing orders and terminate work under all subcontracts insofar as such orders and/or work are chargeable to this contract: Provided, That the expenditures made by the contractor for protection, collection, and disposition of property of the Government and for accounting services for completion and determination of payments and settlements under this contract, as approved by the contracting officer, shall be paid by the Government. 2. Upon the termination of this contract as hereinbefore provided, unless the contractor is in default, full and complete settlement of all claims of the contract tor arising out of this contract shall, as soon as possible after such termination, be made as follows: (a) The Government shall reimburse the contractor for all expenditures made in accordance with the terms of this contract and not yet reimbursed by the Government; and (b) Such further expenditures made by the contractor after the date of termination, including the cost of cancelling subcontracts, as may be authorized by this contract or by the notice of termination; and (c) The charge for depreciation will cease as of the date when termination becomes effective; and (d) In lieu of fee and compensation set forth in article III, paragraphs 3 and 4, the Government will pay to the contractor that portion of the fee which the actual time of performance bears to the estimated time of performance. ARTICLE X. PROPERTY 1. All articles, materials, buildings, machinery, facilities, and work for which the contractor has been reimbursed shall immediately become the property of the Government. Upon completion or termination of this contract the Government shall have the right to remove all such property, including buildings, machinery, or facilities, erected or installed upon land not belonging to it. 2. The contractor shall reimburse the Government for all damages to Government property and for the cost of any Government property lost or destroyed through the fault or neglect of the contractor. 3. All scrap from materials furnished or paid for by the Government shall be the property of the Government. ARTICLE XI. SECURITY in the The contractor agrees to furnish a bond in the sum of $_. form and with sureties acceptable to the Government, guaranteeing the faithful performance of this contract. Should the surety on any bond so furnished become unacceptable to the Government, the contractor agrees to furnish such additional security as may be required from time to time to protect the interests of the Government. ARTICLE XII. DISPUTES If any doubts or disputes arise as to the meaning of anything in the contract, drawings, plans, or specifications, or if any discrepancy appears between said drawings, plans, or specifications and this contract, the matter shall be referred at once to the contracting officer for determination, and his decision in the premises shall be conclusive and binding upon the parties hereto: Provided, That both parties hereto shall have the right of appeal to the chief of branch concerned and his decision upon such appeal shall in all respects be final and conclusive on the parties hereto. In the meantime, the contractor shall diligently proceed with performance. ARTICLE XIII. CONFIDENTIAL WORK If the contracting officer designates any work as confidential, the contractor shall not permit access to such work, nor any information in connection there. with, to be given to any person other than employees of the contractor approved by the contracting officer. ARTICLE XIV. 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. ARTICLE XV. COVENANT AGAINST CONTINGENT FEES The contractor warrants that he has not employed any person to solicit or secure this contract upon any agreement for a commission, percentage, brokerage, or contingent fee. Breach of this warranty shall give the Government the right to annul this contract or, in its discretion, to deduct from the fee the amount of such commission, percentage, brokerage, or contingent fee. This warranty shall not apply to commissions payable by the contractor upon contracts or sales secured or made through bona fide established commercial or selling agencies maintained by the contractor for the purpose of securing business. In witness whereof, the parties hereto have executed this contract as of the day and year first above written. THE UNITED STATES OF AMERICA, Two witnesses: I, By (Official title) (Contractor) (Business address) certify that I am the tary of the corporation named as contractor herein; that who signed this contract on behalf of the contractor was then Secre of said corporation; that said contract was duly signed for and in behalf of said corporation by authority of its governing body, and is within the scope of its corporate powers. [CORPORATE SEAL] I hereby certify that to the best of my knowledge and belief, based upon observation and inquiry, the who signed this contract for had authority to execute the same and is the individual who signs similar contracts on behalf of this corporation with the public generally. Το (Contracting officer) Revised December 1931. EXHIBIT A. ADJUSTED COMPENSATION CONTRACT (Place) The undersigned hereby proposes to furnish and deliver to the United States of America, under the terms and conditions set forth in United States Government Contract Form No. the following: in strict accordance with the specifications, schedules, and drawings herein enumerated: Delivery to be made f. o. b. plant as follows: Estimated time for performing the work is: Except as provided in article III, paragraph 8 of the contract, the rates of pay for the various classes of labor (executive, supervisory, mechanical, and common), which will be employed on the work shall not exceed the following (these rates are based on the scale of wages now being paid in this vicinity for similar supervisory, mechanical, and common labor): Designation Rate of pay Except as provided in article III, paragraph 8 of the contract, the unit prices of the various items of material which will be used in performing the work shall not exceed the following (these prices are based on current market prices): It is proposed to procure the following work or material by subcontract: Material or work Proposed subcontractor Estimated cost In addition to the buildings, machinery, and facilities owned by the undersigned, the following must be procured by him. The actual cost of these buildings, machinery, and facilities shall be paid for by the United States, and their estimated cost is included in this estimate. Designation Quantity Estimated Total The United States will furnish and deliver the following materials and or facilities for use in performing the work: (the cost of such materials and/or facilities has not been included in the estimate): The amount to be allowed for depreciation on the buildings, machinery, and facilities owned by the undersigned and to be used in connection with the work is dollars ($-- -----). The amount to be allowed for rehabilitation costs, i.e., for restoring the plant to its original condition, due to changes to be made in the buildings and the arrangement of the machinery for the performance of the work is dollars ($.. --). Based on the above, the estimated cost of performing the work is dollars ($ dollars ($_. - - - - - -). For performing the work the undersigned shall be paid a fee of ---) which is computed as follows: (a) Estimated value of buildings, machinery, and facilities owned by the undersigned and to be used in connection with the work: $_ (b) Estimated percentage of buildings, machinery, and facilities listed in "(a)" and required in performing the work: %. (c) "(a)" applied to "(b)": % of $ (d) Estimated amount to be provided by the undersigned to meet current payments prior to reimbursement by the Government. $ $. ..) for the estimated (Signature) period of performance is the amount of the fee. Witness: PRELIMINARY DATA SHEET-ADJUSTED COMPENSATION CONTRACT (City) To: Being desirous of cooperating with the War Department in carrying out its plans for industrial preparedness, the undersigned submits herewith an estimate of the cost of furnishing and delivering to the United States of America, under the terms and conditions set forth in United States Contract Form No. the following: in accordance with the following drawings and specifications Estimated time for performing the work is: shifts of ------ hours each per day it is estimated that delivery f. o. b. plant can be made as follows: If the plant is operated on First month.. Second month Third month Fourth month_ Fifth month Sixth month Seventh month Eighth month Ninth month Tenth month |