International Traffic in Arms Regulations (§ 9.304). § 9.302 Foreign license and technical assistance contracts between the Government and domestic concerns. (a) Contracts between the Government and a primary source to provide technical assistance or patent rights to a second source for the manufacture of supplies or performance of services will, to the extent practicable, specify the rights in patents and data and any other rights to be supplied to the second source. Each contract shall provide in effect that, in connection with any separate agreement between the primary source (or any of its subcontractors) and the second source for patent rights or technical assistance relating to the articles or services involved in the contract, that: (1) the primary source (and its subcontractors) will not make, on account of any purchases by the Government or by others with funds derived through the Mutual Security Program or otherwise through the Government, any charge to the second source (i) for royalties or amortization for patents or inventions in which the Government holds a royaltyfree license, or (ii) for data which the Government has a right to possess, use, and disclose to others, or (iii) for any technical assistance provided to the second source for which the Government has paid under a contract between the Government and the primary source; and (2) such separate agreement between the primary and second sources will conform to the requirements of the International Traffic in Arms Regulations (§ 9.304). C (b) The following factors, among others, shall be considered in negotiating the price to be paid the primary source under contracts within paragraph (a) of this section. (1) The actual cost of providing data, personnel, manufacturing aids, samples, spare parts, etc.; (2) The extent to which the Government has contributed to the development sof the supplies or services, and to the smethods of manufacture or performance, through past contracts for research and development or for manufacture of the supplies or performance of the services; Cand (3) The Government's patent rights and rights in data relating to the sup plies or services and to the methods of manufacture or of performance. § 9.303 Supply contracts between the government and second sources. In negotiating contract prices with a second source, including the redetermination of contract prices, or in determining the allowability of costs under a cost-reimbursement type contract with a second source, the contracting officer: (a) Shall obtain from the second source a detailed statement of royalties, license fees, or other compensation paid or to be paid to a primary source (or any of his subcontractors) for patent rights, rights in data, and other technical assistance provided to the second source, including identification and description of such patents, data, and technical assistance; and (b) Shall not accept or allow charges which in effect are (1) for royalties or amortization for patents or inventions in which the Government holds a royaltyfree license, or (2) for data which the Government has a right to possess, use, and disclose to others, or (3) for any technical assistance provided to the second source for which the Government has paid under a contract between the Government and a primary source. § 9.304 Foreign license and technical assistance agreements between domestic concern and foreign government or concern. § 9.304-1 International Traffic in Arms Regulations. Pursuant to Section 414 of the Mutual Security Act of 1954, as amended (22 U.S.C. 1934), the Department of State controls the exportation of data relating to articles designated in the United States Munitions List as arms, ammunition, or munitions of war. (The Munitions List and pertinent procedures are set forth in the International Traffic in Arms Regulations, 22 CFR 121 et seq.) Before authorizing such exportation, the Department of State generally requests comments from the Department of Defense. Each Military Department will, on request of the Office of the Assistant Secretary of Defense (International Security Affairs), submit comments thereon as the basis for a Department of Defense reply to the Department of State. Such comments will be prepared in the light of the following excerpt from 124.04 Required provisions in agreements. (a) Manufacturing license or technical assistance agreements should define in precise terms the following: (1) The equipment and technology involved; (2) The scope of the information to be furnished; (3) The period of duration of the agreement; (4) Statement of ownership of equipment and special tools involved which would be made available in connection with the agreement. In lieu of inclusion as an integral part of the agreement, the applicant may submit this information in the form of an attachment or enclosure to the agreement submitted for review. (b) (1) It is the policy of the United States Government not to pay or allow to be paid in connection with purchases made with Mutual Security Program funds, a charge for patent rights in which it holds a royalty-free license, or for technical data which it has a right to use and disclose to others for purposes of the Mutual Security Program, or which are in the public domain, or with respect to which it has been placed in possession without restriction upon their use and disclosure to others. Reasonable charges for reproduction, handling, mailing, and other similar administrative costs do not fall within this policy. (2) Pursuant to the above policy (subparagraph (1) of this paragraph) agreements shall be written in such a way as to provide that (1) purchases of items by or for the United States Government, or with funds derived through the Mutual Security Program, will not include a charge (a) for technical data in the possession of the United States Government, or in which the United States Government has a right to possession, and regarding which there is no prohibition against use by the United States Government and disclosure to others and (b) for royalties or amortization for patents or inventions in which the United States Government holds a royalty-free license; and (11) the license rights transferred by such agreements will be subject to existing rights of the United States Government. [27 F.R. 8874, Sept. 6, 1962] § 9.304-2 Review of agreements. (a) In reviewing foreign license and technical assistance agreements between domestic concerns and foreign governments or concerns, the Military Department concerned shall, insofar as its interests are involved, indicate whether the agreement meets the requirements of § 124.04 of the International Traffic in Arms Regulations (22 CFR 124.3) (§ 9.304-1) or in what respects it is deficient. Paragraphs (b) through (g) of this section provide general guidance for such review. (b) Where it is reasonably anticipated that the Government will purchase from the second source the supplies and services involved in the agreement or that Mutual Security Program funds will be provided for the purchase of the supplies or services: (1) It may suffice to fulfill the requirements of § 124.04 (b) (22 CFR 124.3), quoted in § 9.304-1, so far as the Department of Defense is concerned, if: (i) The agreement is so written that: (a) The second source is required to advise the primary source when it has knowledge of any purchase made by or to be made from it by or for the Government or with funds derived through the Mutual Security Program or otherwise through the Government; and (b) The second source agrees in the event of any such purchase to reflect in the purchase price of the article or service any reduction in the charges specified in the agreement, which is made by the primary source in respect to such purchase; and (ii) The primary source agrees with the Government that upon advice to him from the second source, or from the Government or otherwise, as to any such purchase or prospective purchase, he will negotiate with the Department concerned an appropriate reduction in his charges to the second source in recognition of any Government rights in patents or data. (2) If the agreement provides that no charge is being made to the second source for data or patent rights in which the Government has rights, or that no charge is being made to the extent of the Government's rights, the Department should: (i) Before indicating its approval, evaluate the acceptability of such provision, or (ii) Explicitly condition its approval on the right to evaluate the acceptability of such provision at a later appropriate time. (c) Where it is reasonably anticipated that the Department will procure from the second source supplies or services involved in the agreement, or that Mutual Security Program funds will be provided for the procurement of the supplies or services: (1) If the agreement specifies a reduction in charges thereunder, with respect to purchases by or for the Government or by others with funds derived through the Mutual Security Program or otherwise through the Government, in recognition of the Government's rights in patents and data, the Department should, before indicating its approval, evaluate the amount of the reduction to determine whether it is fair and reasonable in the circumstances. (2) If the agreement does not specify any such reduction in charges or otherwise fails to give recognition to the Government's rights in the patents or data involved, a recommendation should be made, as a condition to approval, that the agreement be amended to reflect a reduction acceptable to the Government in any charge thereunder with respect to purchases made by or for the Government or by others with funds derived through the Mutual Security Program or otherwise through the Government, in accordance with § 124.04 (b) (22 CFR 124.3), quoted in § 9.304-1. (3) If the agreement provides that no charge is being made to the second source for data or patent rights in which the Government has rights, or that no charge is being made to the extent of the United States rights, the Department should, before indicating its approval, evaluate the acceptability of such provision. (4) If time or circumstances do not permit the evaluation of the reduction in charges provided for in the agreement as called for in subparagraph (1) of this paragraph, or the specifying of such a reduction as called for in subparagraph (2) of this paragraph, or the evaluation of the provision that no charge is made as called for in subparagraph (3) of this paragraph, the guidance in paragraph (b) of this section may be followed. (d) Where there is a technical assistance contract between the primary source and the Government related to the separate agreement between the primary and second sources that is under review, such separate agreement should reflect the arrangements contemplated with respect thereto by the Government's technical assistance contract. (e) Every agreement should provide that any license rights transferred by the agreement are subject to existing rights of the Government. (f) In connection with every agreement within paragraph (c) of this section, a request should be made to the primary source to identify the patents, data, and other technical assistance to be provided to the second source by the primary source or any of his subcontractors; to identify any such patents and data in which, to the knowledge of the primary source, the Government may have rights; and to segregate the charges made to the second source for each such category or item of patents, data, and other technical assistance. Reviewing personnel will verify or obtain such information from Governmental sources so far as practicable. (g) The Department concerned should make clear that its approval of any agreement does not necessarily recognize the propriety of the charge or the amount thereof or constitute approval of any of the business arrangements in the agreement, unless the Department intends by its approval to commit itself to the fairness and reasonableness of a particular charge or charges. In any event, such a disclaimer should be made to charges or business terms not affecting either the Government or any purchase made with funds derived through the Mutual Security Program or otherwise through the Government. [25 F.R. 14252, Dec. 31, 1960, as amended at 27 F.R. 8874, Sept. 16, 1964] AUTHORITY: The provisions of this Part 101: issued under sec. 201, 55 Stat. 839, as amended, sec. 2202, 70A Stat. 120; 50 U.S.C. App. 611, 10 U.S.C. 2202. Interpret or apply secs. 2301-2314, 70A Stat. 127-133; 10 U.S.C. 2301-2314, E.O. 9001, 6 F.R. 6787, as amended by E.O. 9296, 8 F.R. 1429, 3 CFR 1943 Cum Supp. As used in this subpart, the terms in §§ 10.101-1 to 10.101-6 shall have the meanings set forth therein. [25 F.R. 14254, Dec. 31, 1960] § 10.101-1 Advance payment bond. "Advance payment bond" means a bond which secures the performance and the fulfillment of a contractual provision for the making of advance payments. [29 F.R. 6933, May 27, 1964] § 10.101-2 Annual bid bond. "Annual bid bond" means a single bond (in lieu of separate bid bonds), without limitation as to penal amount, which se ures all bids (on other than construction ontracts) requiring bonds submitted by contractor during a specific fiscal year f the Government in response to formal dvertising. 29 F.R. 6933, May 27, 1964] 10.101-3 Annual performance bond. "Annual performance bond” means a ingle bond (in lieu of separate performnce bonds for each contract) which seures the performance of contracts other than construction contracts) hich require bonds and are entered into y a contractor during a specific fiscal ear of the Government. 29 F.R. 6933, May 27, 1964] 10.101-4 Bid guarantee. "Bid guarantee" means a form of seurity accompanying a bid or proposal as ssurance that the bidder (a) will not ithdraw his bid within the period specied therein for acceptance, and (b) will xecute a written contract and furnish uch bonds as may be required within he period specified in the bid (unless a nger period is allowed) after receipt f the specified forms. 29 F.R. 6933, May 27, 1964] 10.101-5 Consent of surety. "Consent of surety" means an acknowligment by a surety that its bond given 1 connection with a contract continues > apply to the contract as modified. 19 F.R. 6933, May 27, 1964] 10.101-6 Construction contract or subcontract. "Construction contract or subconact" means any contract or subcontract or the construction as defined in 18.101-1. 30 F.R. 12005, Sept. 21, 1965] 10.101-7 Fidelity bond. "Fidelity bond" means a bond which ecures an employer up to an amount ated in the bond for losses caused by ishonesty on the part of an employee. blanket fidelity bond covers all emloyees, except those except expressly xcluded by written endorsement on the ond. 30 F.R. 12005, Sept. 21, 1965] 10.101-8 Forgery bond or policy. "Forgery bond or policy" (depositors ɔrm) means a bond or policy which seures the person or persons named there1 up to the amount stated for losses caused by the forging or altering of a check, draft, or similar instrument issued by or purporting to have been issued by any of the insureds, and for losses resulting from a check or draft having been obtained from the insureds through impersonation. [30 F.R. 12005, Sept. 21, 1965] § 10.101-9 Patent infringement bond. "Patent infringement bond" means a bond which secures the performance and fulfillment of the undertakings contained in a patent clause. [30 F.R. 12005, Sept. 21, 1965] § 10.101-10 Payment bond. "Payment bond” means a bond which is executed in connection with a contract and which secures the payment of all persons supplying labor and material in the prosecution of the work provided for in the contract. [30 F.R. 12005, Sept. 21, 1965] § 10.101-11 Penal sum or amount. "Penal sum or amount" means the dollar amount shown in a bond and represents the maximum payment for which the surety is obligated. [30 F.R. 12005, Sept. 21, 1965] "Performance bond" means a bond which is executed in connection with a contract and which secures the performance and fulfillment of all the undertakings, covenants, terms, conditions, and agreements contained in the contract. [30 F.R. 12005, Sept. 21, 1965] Sections 10.102-10.102-5 apply to both negotiated and formally advertised procurements. Where appropriate, term "bid" includes "proposal". [29 F.R. 6933, May 27, 1964] § 10.102-2 Limitations. the Bid guarantees shall not be required unless the solicitation specifies that the contract must be supported by a performance bond or performance and payment bonds. In connection with supply and services contracts, the bidder may furnish either an individual bid bond (Standard Form 24) or an annual bid bond (Standard Form 34). A bid guarantee will not be requested unless the |