reasonable expenses incidental thereto, incurred by the Contractor under the provisions of this contract relating to patents.

(g) The Contractor agrees that any refunds, rebates, or credits (including any interest thereon) accruing to or received by the Contractor or any assignee, which arise under the materials portion of this contract and for which the Contractor has deceived reimbursement, shall be paid by the Contractor to the Government. The Con

tractor and each assignee, under an assignment entered into under this contract and in effect at the time of final payment under this contract, shall execute and deliver, at the time of and as a condition precedent to final payment under this contract, an assignment to the Government of such refunds, rebates, or credits (including any interest thereon) in form and substance satisfactory to the Contracting Officer.

The following may be inserted as paragraph (b)(4) in the foregoing "Payments" clause where the nature of the work to be performed requires the contractor to furnish material which is regularly sold to the general public in the normal course of business by the contractor, and in accordance with the limitations contained in § 3.406-1(d) (1) and (2) of this chapter.

(4) When the nature of the work to be performed requires the Contractor to furnish material which is regularly sold to the general public in the normal course of business by the Contractor, the price to be paid for such material, notwithstanding (b) (1), above, shall be on the basis of an established catalog or list price, in effect when the material is furnished, less all applicable discounts to the Government: Provided, That in no event shall such price be in excess of the Contractor's sales price to his most favored customer for the same item in like quantity, or the current market price, whichever is lower.

[29 F.R. 6926, May 27, 1964, as amended at 30 F.R. 12005, Sept. 21, 1965; 30 F.R. 14895, Dec. 2, 1965]

§ 7.901-7 Assignment of claims.

In accordance with § 7.103-8, insert the clause set forth therein.

§ 7.901-8 Disputes.

Insert the clause set forth in § 7.103-12. [31 F.R. 1050, Jan. 27, 1966]

§ 7.901-9 Convict labor.

Insert the clause set forth in § 12.203 of this chapter.

work herein contracted for without the written approval of the Contracting Officer. For the purpose of this clause, purchase of raw material or commercial stock items shall not be considered work.

(b) The Contractor agrees that no subcontract placed under this contract shall provide for payment on a cost-plus-percentage-of-cost basis.

Contract Work Hours Stand§ 7.901-11 ards Act-overtime compensation. Insert the clause set forth in § 12.303 of this chapter.

[32 F.R. 5509, Apr. 4, 1967]

7.901-21 Inspection and correction of defects.

INSPECTION AND CORRECTION OF DEFECTS (MAR. 1964)

(a) All materials furnished and services rformed by the Contractor under this ntract shall be subject to inspection and it by the Government to the extent pracable at all times (including the period of rformance) and places, and in any event lor to acceptance. The Government, rough any authorized representative, may spect the plant or plants of the Contractor of any of his subcontractors engaged in e performance of this contract. If any inection or test is made by the Government the premises of the Contractor or a subntractor, the Contractor shall provide and all require subcontractors to provide all asonable facilities and assistance for the fety and convenience of the Government spectors in the performance of their duties. 1 inspections and tests by the Government all be performed in such a manner as will t unduly delay the work. Except as otherse provided in this contract, acceptance of rvices performed and materials furnished ider this contract shall be made at the place delivery as promptly as practicable after livery and shall be deemed to have been ade no later than sixty (60) days after the te of such delivery, if acceptance has not en made earlier within such period. (b) At any time during performance of is contract, but not later than six (6) onths (or such other period as may be ovided in the schedule) after acceptance the services or materials last delivered in cordance with the requirements of this ontract, the Government may require the ontractor to remedy by correction or reacement, as directed by the Contracting fficer, any services or materials which at the me of delivery thereof failed to comply with le requirements of this contract. Except as herwise provided in paragraph (c) hereof, elow, the allowability of the cost of any ich replacement or correction shall be dermined as provided in the "Payments" ause of this contract, but the "hourly rate" r labor hours incurred in such replaceent or correction shall be reduced so as to <clude the portion of such rate attributable profit. Corrected or replacement mateals and services shall not be tendered again or acceptance unless the former tender and ne requirement of correction or replacement = disclosed. If the Contractor fails to proeed with reasonable promptness to perform uch replacement or correction, and if such eplacement or correction may be performed within the ceiling price, or the ceiling price s increased by the Government, the Govrnment (i) may by contract or otherwise erform such replacement or correction and harge to the Contractor any increased cost ccasioned the Government thereby, and may deduct such increased cost from any mounts due the Contractor under this con

tract (or require repayment of any payments theretofore made), or (ii) may terminate this contract for default as provided in the "Termination" clause of this contract. Failure to agree to the amount of any such increased cost to be charged to the Contractor, or to such reduction in, or repayment of, any amount due under this contract, shall be a dispute concerning a question of fact within the meaning of the "Disputes" clause of this contract.

(c) Notwithstanding the provisions of paragraph (b) above, the Government may at any time require the Contractor to remedy by correction or replacement, without cost to the Government, any failure by the Contractor to comply with the requirements of this contract, if such failure is due to fraud, lack of good faith or willful misconduct 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 (i) all or substantially all of the Contractor's business; (ii) all or substantially all of the Contractor's operations at any one plant or separate location in which this contract is being performed; (iii) a separate and complete major industrial operation in connection with the performance of this contract; or (iv) all or substantially all of the Contractor's operations under this contract. The Government may at any time also require the Contractor to remedy by correction or replacement, without cost to the Government, any such failure caused by one or more individual employees selected or retained by the Contractor after any such supervisory person has reasonable grounds to believe that any such employee is habitually careless or otherwise unqualified.

(d) The provisions of this clause shall apply to any corrected or replacement services or materials.

(e) The Contractor shall provide and maintain an inspection system acceptable to the Government covering the material, fabricating methods, and the work and services hereunder. Records of all inspection work by the Contractors shall be complete and available to the Government at all reasonable times during performance of this contract and for such longer period as may be specified in this contract.

(f) Except as provided in this clause and as may be provided in the Schedule, the Contractor shall have no obligation or liability to correct or replace materials furnished and services performed under this contact which at the time of delivery are defective in material or workmanship or otherwise not in conformity with the requirements of this contract.

(g) Except as otherwise provided in the Schedule, the Contractor's obligation to correct or replace Government-furnished property (which is property in the possession of or acquired directly by the Government and delivered or otherwise made available to the

Contractor) shall be governed by the provisions of the "Government Property" clause of this contract.

In cases where inspection and acceptance are desired at the Contractor's plant, the following may be inserted in place of the last sentence of paragraph (a):

Acceptance by the Government of all the items (other than aircraft to be flown away, if any) to be furnished under this contract shall be at the plant or plants of the Contractor specified in the Schedule, or any other plant or plants approved for such purpose in writing by the Contracting Officer. The Contractor shall inform the inspector or Contracting Officer when the work is ready for inspection. The Government reserves the right to charge to the Contractor any additional cost of Government inspection and test when items are not ready at the time such inspection and test are requested by the Contractor.

§ 7.901-22 New material.

In accordance with § 1.1208 of this chapter, insert the clause set forth therein.

§ 7.901-23 Government surplus.

In accordance with § 1.1208 of this chapter, insert the clause set forth therein.

§ 7.901-24 Renegotiation.

In accordance with the requirements of § 7.103-13 insert the appropriate contract clause set forth therein. [29 F.R. 11823, Aug. 19, 1964]

§ 7.901-25 Inspection system.

Where it is desired to require contractors to maintain an inspection system in accordance with Military Specification MIL-I-45208 (see § 14.303 of this chapter), insert the following clause.

INSPECTION SYSTEM (AUGUST 1967)

The inspection system which the Contractor is required to maintain, as provided in paragraph (e) of the "Inspection" clause of this contract, shall be in accordance with the edition of Military Specification MIL-I45208 in effect on the date of this contract. [32 F.R. 16406, Nov. 30, 1967]

§ 7.901-26 Quality program.

In accordance with § 14.304 of this chapter, insert the clause set forth in § 7.104-28.

[32 F.R. 16406, Nov. 30, 1967]

§ 7.902 Clauses to be used when applicable.

In accordance with § 1.307-2 of the chapter, insert the clause set forth § 7.104-18.

§ 7.902-5 Buy American Act.

In accordance with § 6.104-5 of th chapter, insert the clause set forth therein.

§ 7.902-6 Notice to the Government labor disputes.

In accordance with § 7.104-4, insert the clause set forth therein.

§ 7.902-7 Filing of patent applications In accordance with § 9.106 of this chapter, insert the clause set forth therein.

[32 F.R. 10168, July 11, 1967]

7.902-8 Patent rights.

In accordance with § 9.107 of this chapter, insert the appropriate clause set forth therein.

902-13 Flight risks.

Where appropriate, insert the clause forth in § 10.504 of this chapter, reng paragraph (c) thereof to read as

ows:

or

c) If any aircraft is damaged, lost, or deyed during flight, and if the amount of à damage, loss, or destruction exceeds one dred thousand dollars ($100,000) nty percent (20%) of the ceiling price his contract, whichever is less, and if the tractor is not liable for the damage, loss, destruction pursuant to the "Governat Property" clause of this contract toher with paragraph (a) above, then an itable adjustment for any resulting re, restoration, or replacement that is rered under this contract shall be made in ceiling price, hourly rate, delivery or formance date, or all of them and the tract shall be modified in writing acdingly; provided, in determining the ount of adjustment in the hourly rate t is equitable, any faults of the Conctor, his employees, or any subcontractor ich materially contributed to the damage, s, or destruction shall be taken into coneration. Failure to agree on any adjustnt shall be a dispute concerning a quesn of fact within the meaning of the Isputes" clause of this contract.

7.902-14 Workmen's compensation insurance (Defense Base Act).

In accordance with 8 10.403 of this apter, insert the clause set forth erein.

7.902-15 Royalty information.

In accordance with § 9.110 of this apter, insert the appropriate clause t forth therein.

[30 F.R. 6988, May 25, 1965] § 7.902-20

ing data.

Subcontractor cost and pric

Insert the clause set forth in § 7.104-42 (a).

[30 F.R. 6988, May 25, 1965]

§ 7.902-21 Order of precedence.

In accordance with § 7.104-56, insert the clause set forth therein. [30 F.R. 14091, Nov. 9, 1965]

§ 7.902-22 Duty-free entry.

In accordance with the requirements of § 6.603-2, insert any or all of the clauses set forth in § 6.603-3, as appropriate.

[31 F.R. 1050, Jan. 27, 1966]

§ 7.902-25 Material inspection and receiving report.

Insert the clause in § 7.104-62 except in negotiated subsistence procurements and contracts for tanker/barge shipments of bulk petroleum products. [32 F.R. 10168, July 11, 1967]

Subpart J-Clauses for Stevedoring Contracts

SOURCE: The provisions of this Subpart J appear at 30 F.R. 1737, Feb. 9, 1965, unless otherwise noted.

This subpart sets forth uniform contract clauses for use in stevedoring contracts as defined in § 22.401 of this chapter.

[32 F.R. 522, Jan. 18, 1967]

§ 7.1001 Technical provisions.

The following clauses or appropriate revisions in accordance with § 22.404 of this chapter shall normally be included in all stevedoring contracts. [32 F.R. 522, Jan. 18, 1967]

§ 7.1001-1 Scope of contract.

SCOPE OF CONTRACT (AUGUST 1964)

(a) General. The Contractor shall load and discharge cargoes and in connection therewith shall perform all the duties of a stevedore on any vessel which the Contracting Officer may designate at

upon

the terms and conditions hereinafter set forth for the term of this contract, beginning and ending. ----: Provided, however, That any work started before and not completed by the expiration of

this contract shall be governed by the terms of this contract unless otherwise directed by the Contracting Officer.

(b) Contractor's duties—(1) Loading. In loading vessel, the Contractor shall remove and handle cargo from place of rest on pier or in pier shed or within the cargo assembly area; also from open-top railroad cars, trucks and trailers alongside ship; also from barges, lighters, scows, car floats and open-top railroad cars on car floats alongside ship. The Contractor shall stow said cargo in any space in the vessel, including bunker space, holds, 'tween decks, on deck, and deep tanks, in the order directed by and in a manner satisfactory to the Contracting Officer.

(2) Discharging. In discharging vessel, the Contractor shall remove and handle cargo from any space in the vessel, including bunker space, holds, 'tween decks, on deck, and deep tanks. The Contractor shall land said cargo at place of rest on pier or in pier shed or within the cargo assembly area; also on open-top railroad cars, trucks and trailers alongside ship; also on barges, lighters, scows, car floats and open-top railroad cars on car floats alongside ship. The Contractor shall perform such discharging in the order directed by and in a manner satisfactory to the Contracting Officer.

(3) Handling Explosives. In addition to (1) and (2) above, the following provisions are applicable to the loading and discharging of explosives:

(a) In loading explosives the Contractor shall perform all the stevedoring services necessary for the breaking-out and discharging from railroad cars, trucks and/or lighters alongside ship or from place of rest on pier, transporting to the vessel, and properly loading, stowing and normal securing and chocking in the vessel in a manner directed by applicable U.S. Coast Guard, Army, or Navy regulations.

(b) In discharging explosives the Contractor shall perform all stevedoring services necessary for discharging cargo from the vessel to place of rest on pier or the transporting to and loading into railroad cars, trucks and/or lighters. The Contractor shall also prepare and line the cars for handling the cargo (except the laying of new flooring) and shall brace, secure, cut bands, and lash the cargo in the cars in accordance with applicable regulations and shall place "explosive" placards on the cars prior to release, and shall close and seal all doors.

(c) The furnishing and preparation of gates, studs, new flooring, etc., for blocking railroad cars, as well as prefabrication of blocking in the vessel's hold, will be at the expense of the Government.

(d) The Contractor shall not be compensated for standby time when caused by slowup or delay of one of his operations, which delay directly affects the other operations, such as delay in loading railroad cars, or in discharging from ship's hatches, unless such

(c) Damage reports. In all instance where cargo, vessel, vessel equipment, Government equipment sustains damag through handling by the Contractor's em ployees, a full report of the fact and the ex tent of such damage shall be submitted b the Contractor to the Contracting Office within twenty-four (24) hours following occurrence of such damage.

(d) Rigging and unrigging. When ship's gear is used for handling cargo, th Contractor, at his own expense, shall rig an unrig all gear, including the rigging and unrigging of heavy-lift gear when the heavy-lif booms are used, and shall hoist, lower and secure hatch tents when necessary: Provided however, That where any one set of gear rigged for handling less than (100) payabl tons of cargo on a commodity rate basis, the Contractor shall be compensated on an extralabor basis for the rigging and unrigging such set of gear. Rigging and unrigging shall include topping, lowering, and trim ming of booms. When the Contractor required to perform any rigging or unrigging services for the purpose of performing extr labor services, or performs any such service at the request of the Contracting Officer for any purpose other than loading or discharg ing cargo on a commodity rate basis, he shall be compensated therefor at extra labor rates When the Contractor is required to break out booms from collars or boom rest, or to reeve guys on topping lifts through blocks, he shall be compensated therefor on an extra-labor basis.

(e) Opening and closing vessel. The Con tractor shall, at his own expense, remove and replace tarpaulins, battens, hatch covers, and beams with respect to all decks and deep tanks both during loading and unloading operations and when necessary because of weather or working conditions, as directed by the Contracting Officer: Provided, how ever, That the opening and closing on any one hatch shall be performed on an extralabor basis where less than one hundred (100) payable tons are to be loaded and o discharged at the commodity rate on an hatch so worked, and also where the Contractor is required to open and close the vessel for the purpose of performing extralabor services. The removing, handling, replacing, or setting of reefer plugs during the handling of cargo in any or all refrigerated or chilled space aboard the vessel is included in the basic commodity rate, except where