shall submit a list of parts suitable under paragraph a. `above and having the stability of design for qualification of at least one additional source. This list shall indicate, for those selected parts having only one source, an estimate of the cost for which one or more additional vendors shall be fully qualified. The list shall clearly identify each part by name or title, drawing number(s), function and location in the system, the suitability for qualification, names of proposed additional sources or vendors to be qualified and an estimated overall dollar savings potential. The Government has the right to add parts to the list.

(2) It is further agreed that the Government has the right to require the Prime Contractor to qualify at least one additional competitive source for all listed parts, to permit the competitive purchase of the parts by the Government. This right may be exer- · cised from time to time for the term of this contract. Upon written notice from the PCO, the Prime Contractor shall, to the extent possible, promptly proceed with, and complete, the qualification of parts as required at prices to be negotiated. In qualifying vendors, the Prime Contractor shall use the same basis or standard to the extent possible, in order that no competitive advantage or disadvantage is given to any vendor. The additional vendor or source shall be other than the Prime Contractor, unless the PCO specifically approves the Prime Contractor as the additional source. Any disagreement as to price, terms or enforcement of this provision shall be resolved using the procedures of the General Provision entitled, "Disputes", Section L.3.

e. The prices to be paid by the Government for the purchase of Technical Data Packages and the Qualification of Additional Vendors are not included in the incentive price provisions of this contract, but shall be subject to fixed price orders as provided under the provisions of this clause.

f. CONTRACTOR RECOMMENDED CODING PROGRAM. During the production phase the Government may require the Prime Contractor to furnish and maintain a current Prime Contractor recommended coding program IAW the intent of MIL-STD-789. By acceptance of the contract, the Prime Contractor agrees he shall accept requirements for such coding and perform to the best of his ability.

(1) The Prime Contractor is responsible for securing compliance by his subcontractors and vendors with the requirements of this clause. The Prime Contractor shall use diligent efforts to contract only with suppliers who will accept this clause. In cases in which the Prime Contractor, after diligent efforts, is unable to persuade a subcontractor or vendor to accept this clause, the Prime Contractor shall report the entire circumstances, including alternate approaches to resolving the problem to the PCO, who after consideration of the circumstances and alternatives, will within thirty (30) days direct the Prime Contractor as to the action to be taken. The Prime Contractor shall follow the course of action directed by the PCO.

(2) In addition, the Prime Contractor shall consider the programs including, but not be limited to, disabled veterans and/or handicapped workers, veterans of the Vietnam Era, small business concerns, minority business concerns, and woman owned businesses when selecting items for breakout and qualification of additional vendors.

-

J.12 WARRANTY ANALYSIS. A Warranty Analysis shall be conducted IAW paragraph 4.2.7 of the Product Assurance Program SOW (Volume 10) to determine a suitable single provision for the production phase of the RPV System.

J.13 DD FORM 633-5 APPLICATION AND MODIFICATION COSTING.

a. DD Form 633-5 Application. Any and all proposals (whether Government requested or Prime Contractor initiated and including proposals resulting from change orders pursuant to the "Changes" provision) shall be submitted on DD Form 633-5, "Contract Pricing Proposal (Change Orders)," and shall include, as a minimum, substantiating data as required by the "Instructions to Contractors" and "Footnotes" on the reverse side of the DD Form 633-5. The submission of substantiating cost data may be in a format of the Prime Contractor's choosing when the proposed adjustment does not exceed $25,000.00 and the proposal does not involve aggregate increases and decreases of more than $100,000.00 provided, however, suchproposal shall contain adequate information for evaluation and negotiation.

b. Modification Costing.

(1) The PCO may, in writing at any time or times, request the Prime Contractor to prepare and submit a proposal (s) (e.g., Specification Change Notice (SCN) per DOD-STD-480, Engineering Change Proposal (ECP) per DOD-STD-480, or other proposal (s)) to modify this contract within the general scope of the contract as hereafter set forth. Upon receipt of such request, the Prime Contractor shall submit to the PCO the information requested. the Prime Contractor may, of his own volition at any time or times, submit a written proposal (s) to modify this contract within the general scope hereof as hereafter set forth.

(2) The Prime Contractor:

(a)

Also

Shall submit, with any modification to this contract proposed by him which would affect target cost and fees, a firm proposal (or if that is impracticable, a firm not-toexceed ceiling amount for modifications which would increase target cost and fees -or- a firm not-less-than amount for modifications which would decrease target cost and fees) for an increase or decrease in the target cost and fees necessary for implementation of such proposed modification; or,

(b)

Shall submit, within thirty (30) days of receipt of any written request of the PCO to submit a proposal which would affect target cost and fees, a firm proposal (or if that is impracticable, a firm not-to-exceed ceiling amount for modifications which would increase target cost and fees -or- a firm not-less-than amount for modifications which would decrease target cost and fees) for an increase or decrease in the target cost and fees necessary for implementation of such proposed modification; and,

(c) Shall negotiate in good faith with the Government to establish, prior to issuance of a contract modification(s), either:

(1) A final amount by which the cost shall be increased or decreased as a result of such modification; or,

DRSTS-P Form

1 Aug 77

020

Replaces DRSAV-P Form 1554, 1 Apr 76, which may be used.

6554

(11) A firm not-to-exceed ceiling amount, subject to downward negotiation only, by which target cost and fees shall be increased -or- a firm not-less-than amount subject to upward negotiation only, by which target cost and fees shall be decreased as a result of such modification.

c.

"Changes" Provision. Nothing herein shall limit any right of the Government or the Prime Contractor pursuant to General Provision L.98 of the Contract, entitled "CHANGES".

d. Proposal Preparation Cost. The cost of the Prime Contractor's efforts in the preparation of change proposals and cost proposals shall be treated IAW the Prime Contractor's disclosed accounting practice set forth in his Disclosure Statement submitted pursuant to the requirements of the Cost Accounting Standards Board.

J.14 CONTRACT SECURITY CLASSIFICATION SPECIFICATION (DD FORM 254). In consonance with General Provision L. 26 of this contract, entitled. "Military Security Requirements (1971 APR) (ALT)," Contract Security Classification Specification (DD FORM 254) is set forth as Attachment 1 hereto and made a part thereof.

a. In furtherance of the Government's policy of promoting the development of minority business enterprises, the Prime Contractor agrees to award subcontracts to such enterprises, as they are defined in the clause hereof entitled Utilization of Minority Business Enterprises, to the maximum practicable extent consistent with efficient contract performance.

b. To that purpose, the Prime Contractor shall make every reasonable effort to achieve the goal of awarding 0.8% of the total dollar value of all subcontract awards under this contract to minority business enterprises. If deemed essential in achieving such percentage, and notwithstanding any other provision of this contract, the Prime Contractor may solicit offers exclusively from minority business enterprises for up to 5% of the total dollar value of all subcontract awards, provided the resulting awards are made at reasonable prices, and do not exceed 50% of the total dollar value of the minority business enterprise subcontract goal. However, to the maximum practicable extent, such solicitations shall be on a competitive basis.

C. In recognition of any extraordinary efforts by the Prime Contractor in exceeding the minority business enterprise subcontracting goal established in b. above, the PCO may, at his election and in his sole discretion, pay an award fee to the Prime Contractor of not to exceed 10% of the total dollar value of all minority business enterprise subcontract awards, or 25% of the value of all minority business enterprise subcontract awards in excess of the goal in b. above, whichever is less. Determinations under this paragraph shall not be subject to the clause hereof entitled "Disputes".

J.16 SUBCONTRACTOR AND VENDOR DATA. The Prime Contractor is responsible for securing compliance by his subcontractors and vendors with the requirements of the Contract Data Requirements List, DD Form 1423s. The Prime Contractor shall use diligent efforts to contract only with suppliers who will accept these requirements. In cases in which the Prime Contractor, after diligent efforts, is unable to persuade a subcontractor or vendor to accept these requirements, the Prime Contractor shall report the entire circumstances,

-

including alternate approaches to resolving the problem, to the PCO, who after consideration of the circumstances and alternatives, will within thirty (30) days direct the Prime Contractor as to the action to be taken. The Prime Contractor shall follow the course of action directed by the PCO.

J.17 PREDETERMINATION OF RIGHTS IN TECHNICAL DATA.

a. The parties agree that all technical data and computer software furnished under this contract and not identified by the Prime Contractor IAW Volume 24, entitled "Contract Data Requirements List and Data Rights List", paragraph 3 (claimed Technical Data and Computer Software Rights), as limited rights prior to the award of this contract shall be delivered to the Government with unlimited rights, except that technical data required to be delivered as a result of a change in design or data requirements may be claimed to be limited rights technical data pursuant to paragraph (h) of the clause entitled "RIGHTS IN TECHNICAL DATA AND COMPUTER SOFTWARE, Section L. 18.

b. Further the Prime Contractor agrees to keep updated the lists initially submitted under paragraph 3, Volume 24. Such updates shall be submitted in writing every 120 days at the Progress/Status Meeting and shall include negative reports.

c. The parties agree the mere furnishing of lists under this clause or under the paragraph 3, Volume 24 does not constitute a predetermination of rights or an agreement by the Government that the listed items, processes, or computer software are limited rights. Further the parties agree that if the Government desires to conduct a predetermination of rights during this contract, the Prime Contractor and his subcontractors shall submit clear and convincing evidence to substantiate their assertion of limited rights.

J.18 AWARD FEE COMPUTER SOFTWARE DEVELOPMENT AND INTEGRATION

a.

In addition to the incentive fee provided for in Section E on cost only, the Government intends to provide an award fee for computer software development and integration.

b. An award fee applies to Software Management (Development of Computer Programs SOW, Volume 23); Software/Hardware Integration (Systems Specification Number AV-SS-RPV-L10000 Revision C, dated 10 August 1979; PIDS for the Mission Payload Subsystem, Specification Number 5780914, Revision C, dated 10 August 1979; and PIDS for the Ground Control Station, Specification Number 5780915, dated 10 August 1979). The award fee periods and amounts of award fee available for each period are shown below.

FSED Contract Award to
Critical Design Review

c.

$690,794

Critical Design Review to
Preliminary Army Evaluation

$690,794

Preliminary Army Evaluation
To Production Contract Award

$1,381,589

Contract performance will be evaluated and the final determination of the amount of award fee earned will be made within sixty (60) calendar days after each performance period as set forth above. The Prime Contractor may be awarded all, none or a portion of the aforementioned award fee depending on the evaluation. The maximum award fee available for the first and last award fee periods shall be the amount set forth for those

DRSTS-P Form 1 Aug 77

022

6554

Replaces DRSAV.P Form 1554, 1 Apr 76, which may be used.

66-490 O 80 36

periods. However, the maximum amount of award fee available for the second period shall be the sum of the amount set forth for that period plus the remainder, if any, of unearned award fee from the first period. Contract changes shall not result in any change to available award fee.

d. It is understood that in the event this contract is terminated in its entirety for the convenience of the Government prior to completion of an award fee period, the Government shall make an adjustment in the maximum amount of available award fee which may be earned for the period up to the effective date of the termination. Concurrent with or subsequent to the aforesaid adjustment, the Government shall make a determination of the amount of award fee, if any, earned by the Prime Contractor for the period of up to the date of termination.

e. Evaluation Criteria. The Prime Contractor's performance will be evaluated in the following areas: (1) Verification and Validation, (2) Reliability, (3) Testability, (4) Flexibility, (5) Maintainability, and (6) Interoperability. At the time of the Full Scale Engineering Development Contract award, the Government will inform the Prime Contractor in writing, of the criteria that will be emphasized during the first award fee evaluation period. Such notification will consist of the relative order of importance to be accorded each area and, to the extent practicable, the Government's expectations for performance in each area. This information for subsequent award fee periods will be furnished at least 30 calendar days prior to the beginning of the period.

f. Fee Recommendations.

(1) An Award Fee Review Board (AFRB) will perform an in-depth review of the Prime Contractor's performance, and make a recommendation to the Award Fee Determining Official. It is anticipated that the chairman will be the RPV Project Manager.

(2) The Award Fee Determining Official who is anticipated to be the Commanding General, US Army Aviation Research and Development Command, will review the performance evaluation and the fee recommendation made by the AFRB and make a final determination of fee. The PCO will advise the Prime Contractor of the amount and basis of the fee awarded.

(3) Pursuant to DAR 3-405.5, the unilateral decision of the Government with respect to entitlement to award fee, or the amount thereof, is not subject to the Disputes clause of this contract.

8.

PAYMENT. Upon receipt of the final determination of award fee, if any, to be paid the Prime Contractor at contract completion, the PCO will issue a unilateral modification to the contract against which the Prime Contractor can invoice. Payment of award fee earned by the Prime Contractor shall not be subject to the withholding provisions of the General Provision entitled, ALLOWABLE COST, INCENTIVE FEE, AND PAYMENT (1978 SEP), Section L.80.

J.19 SUBCONTRACT COMPLIANCE

Pursuant to the System Program Management SOW, Volume 6, the following subcontractors shall comply with the requirements of the Cost/Schedule Control Systems Criteria as set forth in the AFSCP/AFLCP 173-5, DARCOM-P715-5, NAVMAT P-5240, DSAH 8315.2, Cost Schedule Control Systems Criteria Joint Implementation Guide and the System Program Management SOW, Volume 6:

-P