1 Continued (0) JOINT CONTRACTOR GOVERNMENT PREPRODUCTION SURVEY OF TOOLS: (1) After the tools have been unpacked, deprocessed, set out by component in sequence of operation, and all tools repaired and/or replaced as I required; the contractor shall notify the ACO at least 30 days before production is to begin in order that a joint-contractor-government preproduction survey can be made of the tools. (2) The ACO will make arrangements with DGSC to have a government representative at the plant to conduct the survey. (3) The contractor shall have a representative assist in the survey. (4) A DLA Form 354 will be completed for each tool surveyed. (D) MAINTENANCE OF GOVERNMENT TOOLING: (1) The contractor shall conduct necessary maintenance of the government tooling during production in accordance with good commercial shop practices. A detailed record shall be maintained of all repairs made during production and these records shall be made available to the government for review upon request. (2) The goverment will not accept, as an acceptable repair, the welding of worn, cracked, or broken components made of tool steel; defective components of tool steel shall be replaced with new components. NEW TOOLING: (1) Thirty days before completion or upon termination of all or a substantial part of the work under this contract, the contractor shall furnish a His of all special tooling acquired or manufactured by the Contractor for use in the performance of this contract; other than special tooling scquired or manufactured to replace tooling listed in the attachment which shall automatically become Government property. The list shall specify the nomenclatus, toal number, related product part number, operation performed, and unit cost of each special tool. (2) Within ninety (90) days after receipt of any list furnished pursuant to subparagraph (a) above, or such further period as may be agreed upon by dhe parties, the Contracting Officer may give notice to the Contractor that the Government desires to acquire any or all of the special tooling on such lis, and the Contractor will deliver such tooling to the Government promptly. The price of such special tooling delivered to the Government will be drmuned by the Contractor's cost less amortization based on the ratio of the number of parts produced by the tooling to the total estimated number of parts which the tooling will produce. (3) The Contractor shall furnish without additional cost to the Government detail and assembly reproducible engineering drawings of each special tool which the Government exercises its option to purchase pursuant to subparagraph (2) above. These drawings shall conform to MIL-STD-100. 1967. (h) SAMPLE PARTS FROM TOOLS LAST PIECE PRODUCED: (1) To assist in the evaluation of the tools during the post-production survey, a sample part, THE LAST PIECE PRODUCED(SAMPLE)BY EACH 100L IN THE TOOL SET AT THE END OF PRODUCTION RUN, shall be placed with its appropriate tool until final tool acceptance. The sample shall be ecessed only to the point of operation of the tool. Each sample shall be permanently marked with tool number, contract number, and date of neufacture by using an electric pencil or other means of permanent marking which does not alter the size, shape, or finish of the component. (2) After tool acceptance the sample parts shall be cleaned and processed in accordance with paragraph (k)(2)(ii) below and packed in accordance! zi a paragraph (k) (2) below, D JOINT CONTRACTOR-GOVERNMENT POST-PRODUCTION SURVEY OF TOOLS: (1) Upon completion of production involving the use of the tooling, or upon termination of the resulting contract, THE CONTRACTOR WILL OMPLETE REPAIRS AND REPLACEMENTS HERETOFORE REQUIRED, DISASSEMBLE, CLEAN, AND REASSEMBLE THE TOOLS (BUT WIL NUT PROCESS FOR STORAGE), PLACE SAMPLE PARTS WITH TOOLS, AND SET THEM OUT BY COMPONENT IN SEQUENCE OF OPERATION FIR A JOINT-CONTRACTOR-GOVERNMENT POST-PRODUCTION SURVEY. (2) All tools, including additional tooling, will be made ready for this survey within thirty days after completion of production, or termination c 20 tract. The Contractor shall notify the ACO in writing at least fifteen days in advance of the date the tools will be ready for survey. The ACO will to the necessary arrangements with DGSC to have a Government representative at the Contractor's plant to conduct the survey. THE CONTRACTO SHALL HAVE A REPRESENTATIVE ASSIST IN THIS SURVEY, PREFERABLY THE SAME PERSON WHO ASSISTED IN THE PREPRODUCTION SURVEY. (3) DLA Forms 354 which were made during the preproduction survey will be used to determine changes in condition of the tocling between the tool surveys. New DLA Forms 354 will be made to update Govemment records (4) During the post-production survey the Government will take title to those tools acquired or produced by the Contractor which are replacem at tools for Government tools, or are tools specified in the attachment as missing from the tool set furnished by the Government. The Government representative will assign tool numbers to these tools, and the Contractor will be required at this time to permanently indent each tool with nomenclatu e of end item, tool number, and "U.S. PROPERTY" USING 1⁄4" of LARGER METAL STAMPS. C) CORRECTION OF DEFICIENCIES REVEALED DURING POST-PRODUCTION SURVEY: The ACO will notify the Contractor within fifteen days of the post-production survey of the results. The Contractor will be given fifteen days after this notification to correct any deficiencies to the satisfaction of the Government. HOWEVER, IF RE-SURVEY OF THE TOOLING IS REQUIRED DUE TO THE TOOLING NOT BEING PROPERLY REPAIRED IN ACCORDANCE WITH REQUIREMENTS OF THE CONTRACT, THE CONTRACTOR SHALL BE REQUIRED TO PAY ALL COSTS INVOLVED IN THE RE-SURVEY AND ANY RESULTING FUTURE SURVEYS OF THE TOOLING. The costs will include, but are not limited to, the costs of the Government technician's salary and per diem, both while at the plant and in travel status, and all his transportation costs between duty station and the Contractor's plant. (k) PREPARATION FOR DELIVERY: (1) The Contractor shall notify the ACO in writing at least fifteen days prior to the time processing and packing of the tooling will begin. The ACO will make arrangements for a Government inspector from DCAS to be present to observe the processing and packing operations. The contractor will be allowed thirty days after notification that the condition of the tooling has been accepted by the Government to complete the cleaning, preservation, packaging, packing, and marking operations. (2) Cleaning, preservation, packaging, and packing the tooling for long term storage shall be in accordance with Level A of MIL-STD-107. (Tools shall be disassembled to the degree necessary to insure that all components are properly cleaned, i.e., remove stripper and pressure pads, springs, sliding cams, etc. DISASSEMBLY SHALL BE ACCOMPLISHED ONLY BY QUALIFIED TECHNICIANS. DGSC FORM 431 NAME OF OPPEROR OR CONTRACTOR PAGE OF CONTINUATION SECRET DLA 600 79 B-240 SECTIONS CLAUSES MARKED WITH AN "X" IN THE SPACE PROVIDED APPLY TO THIS SOLICITATION/CONTRACT IX "CO DELIVERY OF EXCESS QUANTITIES OF $25.00 OR LESS (DSA 1972 NOV) [ ] CSO SHIPMENTS TO CARGO ASSEMBLY POINTS (DGSC) (1978 APR) (a) Except for cargo hems set forth in (c) below, supplies called for in this contract will be delivered (freight and parcel post shipments) to the consolidation and containerization point/cargo amembly point shown in the contract schedule. (b) DGSC Form 125-1, MILSTAMP EXPORT Clearancs/TCMD/Export Traffic Release, is required to accompany each shipment other than parcal post to an assembly (consolidation and containerization) point. The contractor will complete the set of forms in accordance with instructions provided on copy number 2. Copy number 1 will be placed in a waterproof envelope attached to the number one (1) container. If appropriate forms have not been furnished with the contract, notify the responsible Contract Administration Office. (c) The following categories of supplies will not be forwarded to cargo assembly points, unisas otherwim specifically authorized: (2) 386 (3) Classified or sensitive items requiring signature service. Oversize items unitized for shipment via: Air Ports of Discharge any dimension exceeding 72 inches; Water Ports of Discharge - length or width exceeding 72 inches, height for palletized loads exceeding 43 inches, or height for other than palletized loads exceeding 72 inches. (5) When volume or weight constitutes a full SEAVAN load for one activity (DoDAAD) code. Radioactive Material Type 1 Shelf Life items. (8) Ais eligible/validated shipments. (This exception applies only to shipments for the container/consolidation point at Red River In them instances, Contract Administration Office will be notified for amended shipping instructions and modified packing requirements, if accessary. (4) All movement documents (Government or commercial bills of lading or other delivery documents) shall be annotated, in the "Description of Articles" space, by the contractor with: CLAUSES MARKED WITH AN "X" IN THE SPACE PROVIDED APPLY TO THIS SOLICITATION/CONTRACT IXI C87 PROGRESS PAYMENT FOR OTHER THAN SMALL BUSINESS CONCERNS (1978 JUL) (DLA) Progress payments shall be made to the Contractor when requested as work progresses but not more frequently than bi-weekly in amounts approved by the Contracting Officer upon the following terms and conditions: (1) Unless a smaller amount is requested, each progress payment shall be (1) eighty percent (80%)**(See footnote at end of Claum) of the amount of the Contractor's total costs which, except as provided in (a)(2) below, shall include only those recorded costs which result, at the time of the request, from payment made by cash, check, or other form of actual payment for items or services purchased directly for the contract, together with (when the Contractor is not delinquent in payment of costs of contract performance in the ordinary course of business) costs incurred, but not necessarily paid, for materials which have been issued from the Contractor's stores inventory and placed in the production process for use on the contract, for direct labor, for direct travel, for other direct inhouse costs, and for properly allocable and allowable indirect costs, all as shown by records mamtained by the Contractor for purposes of obtaining payment under Government contracts plus (ii) the amount of progress payments which have been paid to Contractor's subcontractors and other divisions as provided in (j) below; all less the sum of previous progress payments. (2)(1) With respect to costs of pension, profit sharing, and employee stock ownership plan contributions, when these contributions are paid by the Contractor to the pension, profit sharing, or employee stock ownership plan funds less frequently than quarterly, accruals of the costs of these contributions shall be excluded from the Contractor's total costs for progress payment purposes until such costs are paid. If pension, profit sharing, and employee stock ownership plan contributions are paid on a quarterly or more frequent basis, accruals of cost of them contributions may be included in the Contractor's total costs for progress payment purposes provided these contributions are paid to the pension, profit sharing, and employee stock ownership plan funds within thirty (30) days after the close of the period covered by the payment. If payments are not made to the pension, profit sharing, and employee stock ownership plan funds within such thirty (30) day period, these costs shall be excluded from the Contractor's total costs for progress payment purposes until payment therefore has been made. (1) For those contractors who elected to use the special transition method provided in Cost Accounting Standard (CAS) 410, "Allocation of Business Unit General and Administrative Expense to Final Cost Objective", General and Administrative Expenms (G&A) shall not be included in incurred costs eligible for progress payments until the work-in-process inventories of those contracts entered into after the appäcacility date of CAS 410, exceed the amounts contained in the CAS 410 suspense account and then hmited to this contract's pro rata share of the G&A allocable to such excom. This limitation shall not apply where the CAS 410 suspense account is less than 5 million dollars. (3) The Contractor's total costs ((a)(1)(i)) shall be reasonable, allocable to this contract, and consistent with sound and generally accepted accounting principles and practices. However, ach costs shall not include (1) any costs incurred by subcontractors or suppliers, or (ii) any payments or amounts payable to subcontractors or suppliers, except for completed work (including partial deliveries) to which the Contractor has acquired title and except for amounts paid or payable under cost-reimbursement or time and material subcontracts for work to which the Contractor has acquired title, or (ii) costs ordinarily capitalized and subject to depreciation or amortization except for the properly depreciated or amortized portion of such costs. (4) The amount of un liquidated progress payments shall not exceed the lesser of (1) eighty percent (80%)**(See footnote at end of clause) of the costs mentioned in (a)(1)(i) above, plus any unliquidated progress payments mentioned in item (a)(1)(ii) above, both of which are applicadi only to the supplies and services not yet delivered and invoiced to and accepted by the Government, or (ii) eighty percent (80%)**(See footnote at end of clause) of the total contract price of supplies and services not yet delivered and invoiced to and accepted by the Government, less unliquidatod advance payments. (5) The aggregate amount of progress payments made shall not exceed eighty percent (80%)**(Soe footnote at end of clause) of the total contract price. (6) If at any time a progress payment or the unliquidated progress payments exceed the amount permitted by this paragraph (a), the Contractor shall pay the amount of such excess to the Government upon demand. (7) If this contract includes FMS requirements, the contractor shall submit his requests for progress payments in accordance with the procedures below. (i) If the contract contains only one progress payment rate, and there is more than one customer country, the contractor shall submit one DD Form 1195 with a supporting schedule showing the portions of the total requested payment to be attributed to each country's requirement (ii) If the contract contains more than one progress payment rate (U.S. and FMS requirements), then the contractor shall submit separate DD Forms 1195 for the work covered by each different progress payment rate. If more than one FMS customer country is involved, the contractor shall attach a supporting schedule showing the portions of the total requested payment to be attributed to each country's requiremont. For the purpose of submitting DD Form 1195, the contractor shall allocate costs among customer countries in a manner acceptable to the Administrative Contracting Officer. (b) Liquidation. Except as provided in the clause entitled "Termination for Convenience of the Government" all progress payments shall be liquidated by deducting from any payment under this contract, other than advance or progress, the amount of unliquidated progress payments; or eighty percent (80%)**(See footnote at end of clause) or the applicable percentage (calculated in accordance with references in the footnote at the end of the clause) of the gross amount invoiced, whichever is less. Repayment to the Government required by a retroactive price reduction will be made after calculating liquidations and payments on past invoices at the reduced prices and adjusting the unhiquidated progress payments accordingly. The Government reserves the ght to unilaterally change from the ordinary liquidation rate to the alternate rate when deemed appropriate for proper contract financing. DOSC FORM 431 Previous Editions will be used until exhausted NAME OF OFTEROR OR CONTRACTOR CONTINUATION SHEET DLA 400 PAGE 79.B. 1420 SECTIONS i CLAUSES MARKED WITH AN "X" IN THE SPACE PROVIDED APPLY TO THIS SOLICITATION/ CONTRACT C37 PROGRESS PAYMENT FOR OTHER THAN SMALL BUSINESS CONCERNS (Cont'd) (3) The Government agrees that any proceeds received by it from property to which it has acquired title by virtue of such provisions in any subcontract shall be applied to reduce the amount of unliquidated progress payments made by the Government to the Contractor under this contract. In the event the Contractor fully liquidates such progress payments made by the Government to him hereunder and there are progress payments to any subcontractors which are unliquidated, the Contractor shall be subrogated to all the Government's rights by virtue of such provisions in the subcontract or subcontracts involved as if all such rights had been thereupon assigned and transferred to the Contractor. (4) To facitate small business participation in subcontracting under this contract, the Contractor agrees to offer and provide progress payments to those subcontractors which are small business concerns, in conformity with the standards for customary progress payments stated in paragraph 503 of Appendix E of the Defense Acquisition Regulation , as in effect on the date of this contract. The Contractor further agrees that the need for such progress payments will not be considered as a handicap or adverse factor in the award of subcontracts, *See E-512.2 and E-$12.3 for calculation of alternate liquidation percentages. For contractors who elected to use the transition method in Appendix A of CAS 410, see E-512.1 and E-512.3(1) for calculation of adjusted ordinary and alternate liquidation percentages, **A progress payment percentage of 90 percent (and applicable liquidation rate) is applicable to Foreign Military Sales (FMS) contracts and to the FMS portion of gambined procurements. See E-503.2. CLAUSES MARKED WITH AN "X" IN THE SPACE PROVIDED apply to THIS SOLICITATION/CONTRACT C837 PROGRESS PAYMENT FOR OTHER THAN SMALL BUSINESS CONCERNS (Cont'd) (c) Reduction or Suspension. The Contracting Officer may reduce or suspend progress payments, or liquidate them at a rate higher than the percentage stated in (b) above, or both, whenever he finds upon substantial evidence that the Contractor (1) has failed to comply with any material requirement of this contract, (ii) has so failed to make progress, or is in such unsatisfactory financial condition, as to endanger performance of this contract, (ii) has allocated inventory to this contract substantially exceeding reasonable requirements, (iv) is delinquent in payment of the costs of performance of this contract in the ordinary course of business, (v) has so failed to make progress that the unliquidated progress payments exceed the fair value of the work accomplished on the undelivered portion of this contract, or (vi) is realizing less profit than the estimated profit used for establishing a liquidation percentage in paragraph (b), if that liquidation percentage is less than the percentage stated in paragraph (a) (1). (4) Title. Immediately, upon the date of this contract, title to all parts; materials; inventories; work in process; special tooling as defined in the clause of this contract entitled "Special Tooling," special test equipment and other special tooling to which the Government is to acquire titk pursuant to any other provision of this contract; nondurable (ie., noncapital) tools, jigs, dies, fixtures, molds, patterns, taps, gauges, test equipment, and other similar manufacturing aids tite to which is not obtained as special tooling pursuant to this paragraph; and drawings and technical data (to the extent delivery thereof to the Government is required by other providons of this contract); theretofore acquired or produced by the Contractor and allocable or properly chargeable to this contract under sound and generally accepted accounting principles and practices shall forthwith vest in the Government; and title to all like property thereafter acquired or produced by the Contractor and allocable or properly chargeable to this contract as aforesaid shall forthwith vest in the Government upon said acquisition, production or allocation. Notwithstanding that title to property is in the Government through the operation of this clause, the handling and disposition of such property shall be determined by the applicable provisions of this contract such as: the Default clause and paragraph (h) of this clause; Termination for Convenience of the Government clause; and the Special Tooling clause. Current production scrap may be sold by the Contractor without approval of the Contracting Officer and the proceeds shall be credited against the costs of contract performance. With the consent of the Contracting Offloor and on terms approved by him, the Contractor may acquire or dispose of property to which title is vested in the Government pursuant to this clause, and in that event, the costs allocable to the property so transferred from this contract shall be eliminated from the costs of contract performance and the Contractor shall repay to the Government (by cash or credit memorandum) an amount equal to the unliquidated progress payments allocable to the property so transferred. Upon completion of performance of all the obligations of the Contractor under this contract, including liquidation of all progress payments hereunder, title to all property (or the proceeds thereof) which had not been delivered to, and accepted by the Government under this contract or which had not been incorporated in supplies delivered to and accepted by the Government under this contract and to which title has vested in the Government under this clause shall vest in the Contractor. The 'provisions of this contract referring to or defining liability for Government-furnished property shall not apply to property to which the Government shall have acquired title solely by virtue of the provisions of this clause. (c) Risk of Loss. Except to the extent that the Government shall have otherwise expressly assumed the risk of loss of property, title to which vests in the Government pursuant to this clause, in the event of the loss, theft or destruction of or damage to any such property before its delivery to and acceptance by the Government, the Contractor shall bear the risk of loss and shall repay the Government an amount equal to the unliquidated progress payments based on costs allocable to such lost, stolen, destroyed or damaged property. this clause. Control of Costs and Property. The contractor shall maintain an accounting system and controls adequate for the proper administration of (8) Reports-Access to Records. Insofar as pertinent to the administration of this clause, the Contractor will (1) furnish promptly such relevant reports, certificates, financial statements, and other information as may be reasonable requested by the Contracting Officer, and (ii) give the Goverament reasonable opportunity to examine and verify his books, records and accounts. (4) Special Provisions Regarding Default. If this contract is terminated pursuant to this clause entitled "Default," (1) the Contractor shall, upon demand, pay to the Government the amount of unliquidated progress payments and (i) with respect to all property as to which the Government elects not to require delivery under the clause entitled "Default", title shall vest in the Contractor upon full liquidation of progress payments, and the Government shall be able for no payment except as provided by the "Default" clause. 6) Reservations of Rights. The rights and remedies of the Government provided in this clause shall not be exclusive, and are in addition to any other rights and remodies provided by law or under this contract. No payment, or vesting of title pursuant to this clause, shall excuse the Contractor from performance of his obligations under this contract, nor constitute a waiver of any of the rights and remedies of the parties under this contract. No delay or failure of the Government in exercising any right, power or privilege under this clause shall affect any such right, power or privilege, nor shall any single or partial exercise thereof preclude or impair any further exercise thereof or the exercise of any other right, power or priniege of the Government. Progress Payments to Subcontractors. 6) (1) The amounts mentioned in tem (a)(1)(ii) above shall be all progress payments paid by the Contractor to his subcontractors or other divisions and remaining unliquidated when under subcontracts or interdivisional orders which conform to (2) below. (2) Subcontractors or interdivisional orders on which progress payments to subcontractors or other divisions may be included in the base for progress payments pursuant to paragraph (a) of the clause are limited to those subcontracts in which there is expected to be a long "lead time”, between the beginning of work and the first delivery, approximating four, months or more for small business concerns and six months or snore for firms which are not sal business concerns, and in which the provisions regarding progress payments (i) are substantially similar to and as favorable to the Government as this "Progress Payment" clause, no more favorable to the subcontractor or the other division than this clause is to the Contractor and on a basis of not more than eighty percent (80%)** (See footnote at end of clause) of total costs (except that in the case of those subcontractors which are small business concerns a "rogress Payment" clause substantially similar to 7-104.35(b) may be used); and (ii) make all rights of the subcontractor with respect to all property to which the Government has title under the subcontract subordinate to the rights of the Government to require delivery of such property to it in the event of default by the Contractor under tis contract or in the event of the bankruptcy or insolvency of the subcontractor. 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