employment services for another ERDA contractor in the atomic energy field for another organization except with the prior approval of the contractor. If the contractor believes, with respect to any employee who is employed full-time on the contract work, that any proposed consultant or other comparable employment service for an organization in the atomic energy field other than a ERDA cost-type contractor may involve: (1) A rate of remuneration significantly in excess of the employee's regular rate of remuneration; (2) a significant question concerning possible conflict with ERDA's policies regarding conduct of employees of ERDA's contractors; (3) the contractor's responsibility to report fully and promptly to ERDA all significant research and development information; or (4) the patent provisions of the contractor's contract with ERDA, the contractor shall obtain the prior approval of the Contracting Officer for such consultant or other comparable employment service.

$9-50.704-28 Assignment.

Neither this contract nor any interest therein nor claim thereunder shall be assigned or transferred by the contractor except as expressly authorized in writing by the Contracting Officer.

Except as otherwise directed by the Contracting Officer, the contractor shall procure all necessary permits or licenses and abide by all applicable laws, regulations, and ordinances of the United States and of the State, territory, and political subdivision in which the work under this contract is performed.

$9-50.704-30 Notice of labor disputes.

Whenever an actual or potential labor dispute is delaying or threatens the performance of the work, the contractor shall immediately notify the Contracting Officer in writing. Such notice shall include all relevant information concerning the dispute and its background.

$9-50.704-31 Litigation and claims.

(a) Initiation of litigation. The contractor may, with the prior written authorization of the Contracting Officer, and shall, upon the request of the Government initiate litigation against third parties, including proceedings before administrative agencies, in connection with this contract. The contractor shall proceed with such litigation in good faith and as directed from time to time by the Contracting Officer.

(b) Defense and settlement of claims. The contractor shall give the Contracting Officer immediate notice in writing (1) of any action, including any proceeding before an administrative agency, filed against the contractor arising out of the performance of this contract, and (2) of any claim against the contractor, the cost and expense of which is allowable under the clause entitled "Allowable costs." Except as otherwise directed by the Contracting Officer, in writing, the contractor shall furnish immediately to the Contracting Officer copies of all pertinent papers received by the contractor with respect to such action or claim. To the extent not in conflict with any applicable policy of insurance, the contractor may with the Contracting Officer's approval settle any such action or claim, shall effect at the Contracting Officer's request an assignment and subrogation in favor of the Government of all the contractor's rights and claims (except those against the Government) arising out of any such action or claim against the contractor, and if required by the Contracting Officer, shall authorize representatives of the Government to settle or defend any such action or claim and to represent the contractor in, or to take charge of, any action. If the settlement or defense of an action or claim against the contractor is undertaken by the Government, the contractor shall furnish all reasonable assistance in effecting a settlement or asserting a defense. Where an action against the contractor is not covered by a policy of insurance, the contractor shall, with the approval of the Contracting Officer, proceed with the defense of the action in good faith and in such event the defense of the action shall be at the expense of the Government, Provided, however, That the Government shall not be liable for such expense to the extent that it would have been compensated for by insurance which was required by law or by the written direction of the Contracting Officer, but which the contractor failed to secure through its own fault or negligence.

$9-50.704-32 Required bonds and insurance--exclusive of

ance

Government property (cost-type contracts).

The contractor shall procure and maintain such bonds and insuras are required by law or by the written direction of the Contracting Officer. The terms of any such bond or insurance policy shall be submitted to the Contracting Officer for approval upon request in view of the provisions of the article entitled "Property," the contractor shall not procure or maintain for its own protection any insurance covering loss or destruction of or damage to Governmentowned property.

$9-5.0.704-33 Priorities, allocations, and allotments.

The contractor shall follow the provisions of DMS Regulation 1 and all other applicable regulations and orders of the Domestic and

International Business Administration, Department of Commerce in obtaining controlled materials and other products and materials needed to fill this order.

$9-50.704-34 Soviet-Bloc controls (unclassified research

contracts with educational institutions.

In connection with the contract activities, the contractor agrees to comply with the requirements set forth in Attachment of this contract relating to the countries listed therein. From time to time, by written notice to the contractor, ERDA shall have the right to change the listing of countries in Attachment

upon a determination by ERDA that such change is in conformance with national policy. The contractor shall have the right to terminate its performance under this contract upon at least sixty days' prior written notice to ERDA if the contractor determines that it is unable, without substantially interfering with its policies as an educational institution or without adversely affecting its performance, to continue performance of the work under this contract as a result of a change in Attachment made by ERDA pursuant to the preceding sentence. If the contractor elects to terminate performance, the provisions of this contract respecting termination for the convenience of the Government shall apply.

$9-50.704-35 Controls in the national interest (unclassified research contracts with educational institutions).

The contractor agrees to comply with the requirements of ERDA specified in Attachment to this contract, and to such other ERDA requirements of the same general nature as the parties may agree to from time to time; these requirements relate to unclassified work, and they shall not be construed to limit or affect in any way the contractor's obligation to conform to all security regulations and requirements of ERDA pertaining to classified work.

$9-50.704-36

Avoidance of conflicts of interest (contracts
with universities where ERDA has major invest-
ments in facilities but does not own or lease
the land.

The parties agree that the university has adopted policies and procedures, designed to avoid conflict-of-interest situations, which are in substantial conformance with the Joint Statement of the Council of American Association of University Professors and the American Council on Education of December 1964, entitled, "On Preventing Conflicts of Interest in Government-Sponsored Research at Universities", which policies and procedures will be applied in connection with this contract.

$9-50.704-37

Statement of work (cost-type contracts).

NOTE: (a) While it is not feasible to set forth standard language which would fit every cost-type contract situation, language for this clause must be designed to describe clearly the work being undertaken; the controls, as appropriate, to be exercised by ERDA over the performance of that work; and the relationship contemplated between the parties.

(b) This clause shall also include the following language with respect to subcontracting performance of the work described pursuant to (a) above. The contractor shall, when directed by ERDA and may, but only when authorized by ERDA, enter into subcontracts for the performance of any part of the work under this article.

(c) In operating contracts when the contractor is expected to perform no Davis-Bacon work with his own forces, the special clause in $9-50.1804-3 shall be included in this clause.

$9-50.704-38 Special clause for operating contracts.

See $9-50.1804-3.

$9-50.704-39 Limitation of price and contractor performance (multiyear contracts).

(a) Funds are obligated for performance of this contract in the amount of $ This obligated amount is not considered sufficient for the contract performance required by and described herein for any year other than the first year. Upon availability of additional funds sufficient for performance of the full requirement for the next succeeding year, the Contracting Officer shall, not later than a date agreed to by the parties, so notify the contractor in writing and the amount of funds obligated herein for contract performance shall be increased accordingly. This procedure shall apply for each successive year in which this contract is to be performed.

(b) The Government is not obligated to the contractor for contract performance in any monetary amount in excess of the amount obligated herein.

(c) The contractor shall not incur costs for the performance required for any year after the first year unless and until he has been notified in writing by the Contracting Officer of an increase in the obligated amount in accordance with paragraph (a) of this clause. If so notified, the contractor's performance shall be increased only to the extent required for the additional year for which funds have been obligated.

(d) In the event of termination pursuant to the clausc entitled "Termination for convenience of the Government", the terms "total contract price" and "work under the contract" as used in that clause plus the applicable amount, if any, established as the cancellation ceiling, and to the work under the year for which funds have been obligated. In the event of termination for default, the Government's right under this contract shall apply to the entire multiyear require

ments.

(e) Notification to the contractor of an increase or decrease in the funds obligated for performance of this contract as a result of a clause other than this clause shall not constitute the notification contemplated by paragraph (a) of this clause.

NOTE A: This clause may be used where appropriate.

(a) As used herein, the term "cancellation" means that the Government is canceling, pursuant to this clause, its requirements as set forth in this contract for all years subsequent to that in which notice of cancellation is provided. Such cancellation shall occur only, if by the date or within the time period specified in this contract, or such further time as may be agreed to, the Contracting Officer (1) notifies the contractor that funds will not be available for contract performance for any subsequent year; or (2) fails to notify the contractor that funds have been made available for performance of the requirement for the succeeding year.

(b) Except for cancellation pursuant to this clause or for termination pursuant to the clause entitled "Default", any reduction by the Contracting Officer in the work called for under this contract shall be considered a termination in accordance with the clause entitled "Termination for convenience of the Government". Cancellation pursuant to this clause shall not be construed a termination in accordance with the clause entitled "Termination for convenience of the Government".

(c) In the event of cancellation pursuant to this clause, the contractor shall not, as consideration therefor, be entitled to any cancellation charge (Note A).

NOTE A: In the event that cancellation charges are appropriate in a particular multiyear award, the following should be substituted for paragraph (c) above:

(c) In the event of cancellation pursuant to this clause, the contractor shall be paid, as consideration therefor, a cancellation charge not to exceed the cancellation ceiling described and