there will be delivered or performed under this contract only U.S. end products or U.S. services. (b) For the purpose of this clause: (1) "Components" means those articles, materials, and supplies which are directly incorporated in the end products; (2) "End products" means those articles, materials, and supplies which are acquired under this contract for public use; product (3) "U.S. end product" means: (i) An unmanufactured end which has been mined or produced in the United States; or (ii) An end product manufactured in the United States, if the cost of the components thereof which are mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. For the purpose of this subparagraph, components of foreign origin of the same type and kind which the Government determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities and of satisfactory quality shall be treated as components mined, produced, or manufactured in the United States. (4) "U.S. services" means those that are performed within the United States. In some instances, services provided under a single contract are performed partially in the United States and partially abroad. Such services shall be considered U.S. services if 25 percent or less of the total cost of the services is attributable to services (including incidental supplies used in connection therewith) performed outside the United States. Subpart 1-6.9-[Reserved] Subpart 1-6.10—Omission of the Examination of Records Clause From Contracts With Foreign Contractors SOURCE: The provisions of this Subpart 1-6.10 appear at 34 F.R. 6844, Apr. 24, 1969, unless otherwise noted. contracts and subcontracts with foreign contractors and foreign subcontractors. (1) Where the head of the agency determines, with the concurrence of the Comptroller General or his designee, that omission of the clause will serve the best interests of the United States; or (2) Where (i) the contractor or subcontractor is a foreign government or agency thereof, or is precluded by the laws of the country involved from making its books, documents, papers, or records available for examination; and (ii) the head of the agency determines, after taking into account the price and availability of the property or services from U.S. sources, that the public interest would be best served by the omission of the clause. (b) A determination by the head of the agency under paragraph (a) (2) of this 1-6.1001 does not require the concurrence of the Comptroller General or his designee. However, where a determination by the head of the agency under paragraph (a) (2) of this § 1-6.1001 is the basis for omission of the Examination of Records clause, the statute requires that a written report be furnished to the Congress. This report, which shall explain the reasons for the determination, shall be prepared and forwarded to the Congress in accordance with agency procedures. § 1-6.1002 Policy. The Examination of Records clause shall be included where possible. Omission of the clause should be allowed only after the contracting agency has made all reasonable efforts to include the clause and has considered such factors as alternate sources of supply, additional cost, and time of delivery. “Foreign contractor" for the purposes of this Subpart 1-6.10 is defined as "one that is organized or existing under the laws of a country other than the United States" (see § 1-6.101(c)). § 1-6.1003 Requests for determinations and findings. A request for a determination and findings to omit the Examination of Records clause (see § 1-3.302) ordinarily will be initiated by the contracting officer. The request shall consist of a letter submitted through normal procurement channels, addressed to the head of the agency, setting forth all the facts necessary to arrive at an appropriate determination and findings. The power of the agency head to make such a de termination § 1-3.303). § 1-6.1004 Determinations and findings. The determinations and findings by the head of an agency authorizing the omission of the Examination of Records clause from a contract with a foreign contractor or foreign subcontractor shall: is not delegable (see (a) Identify the contract or subcontract and its purpose, and state that it is a contract or subcontract with a foreign contractor or foreign subcontractor, or that the contractor or subcontractor is a foreign government or agency thereof; (b) Describe the efforts that have been made to include the clause in the contract or subcontract; (c) State the reasons for the contractor's or subcontractor's refusal to include the clause; (d) Describe the price and availability of the property or services from United States and other sources; and (e) Determine, as appropriate, (i) that the omission of the clause will serve the best interests of the United States, or (ii) that the public interest would be best served by the omission of the clause, pursuant to the provisions of section 304 (c) of the Federal Property and Administrative Services Act of 1949, as amended (41 U.S.C. 254 (c)), § 1-6.1001). PART 1-7--CONTRACT CLAUSES (see 1-7.600 1-7.601 1-7.601-1 1-7.601-2 Changes. 1-7.601-3 1-7.601-4 1-7.602 1-7.602-1 1-7.602-2 Subaprt 1-7.4-[Reserved] Subpart 1-7.5-[Reserved] Subpart 1-7.6-Fixed-Price Construction 1-7.602-3 Contracts Scope of subpart. Required clauses. Clauses in standard construction contract forms. Differing site conditions. Additional standardized clauses. Termination for convenience of Price reduction for defective cost Subcontractor cost and pricing Examination of records. Advance payments. Workmen's compensation insur ance (Defense Base Act). 1-7.602-10 Federal, State, and local taxes. Appendix-Background and nature of revisions to contract clauses. 1-7.602-4 1-7.602-5 1-7.602-6 1-7.602-7 1-7.602-8 1-7.602-9 As used throughout this contract, the following terms shall have the meanings set forth below: (a) The term "head of the agency" or "Secretary" as used herein means the Secretary, the Under Secretary, any Assistant Secretary, or any other head or assistant head of the executive or military department or other Federal agency; and the term "his duly authorized representative" means any person or persons or board (other than the Contracting Officer) authorized to act for the head of the agency or the Secretary. (b) The term "Contracting Officer" means the person executing this contract on behalf of the Government, and any other officer or civilian employee who is a properly designated Contracting Officer; and the term includes, except as otherwise provided in this contract, the authorized representative of a Contracting Officer acting within the limits of his authority. (c) Except as otherwise provided in this contract, the term "subcontracts" includes purchase orders under this contract. specifications, where the supplies to be furnished are to be specially manufactured for the Government in accordance therewith; (11) method of shipment or packing; and (iii) place of delivery. If any such change causes an increase or decrease in the cost of or the time required for, the performance of any part of the work under this contract, whether changed or not changed by any such order, an equitable adjustment shall be made in the contract price or delivery schedule, or both, and the contract shall be modified in writing accordingly. Any claim by the Contractor for adjustment under this clause must be asserted within 30 days from the date of receipt by the Contractor of the notification of change: Provided, however, That the Contracting Officer, if he decides that the facts justify such action, may receive and act upon any such claim asserted at any time prior to final payment under this contract. Where the cost of property made obsolete or excess as a result of a change is included in the Contractor's claim for adjustment, the Contracting Officer shall have the right to prescribe the manner of disposition of such property. Failure to agree to any adjustment shall be a dispute concerning a question of fact within the meaning of the clause of this contract entitled "Disputes." However, nothing in this clause shall excuse the Contractor from proceeding with the contract as changed. § 1-7.101-3 Extras. EXTRAS (a) All supplies (which term throughout this clause includes without limitation raw materials, components, intermediate assemblies, and end products) shall be subject to inspection and test by the Government, to the extent practicable at all times and places including the period of manufacture, and in any event prior to acceptance. (b) In case any supplies or lots of supplies are defective in material or workmanship or otherwise not in conformity with the requirements of this contract, the Government shall have the right either to reject them (with or without instructions as to their disposition) or to require their cor rection. Supplies or lots of supplies which have been rejected or required to be corrected shall be removed, or, if permitted or required by the Contracting Officer, corrected in place by and at the expense of the Contractor promptly after notice, and shall not thereafter be tendered for acceptance unless the former rejection or requirement of correction is disclosed. If the Contractor fails promptly to remove such supplies or lots of supplies which are required to be removed, or promptly to replace or correct such supplies or lots of supplies, the Government either (i) may by contract or otherwise replace or correct such supplies and charge to the Contractor the cost occasioned the Government thereby, or (ii) may terminate this contract for default also provided in the clause of this contract entitled "Default." Unless the Contractor corrects replaces such supplies within the delivery schedule, the Contracting Officer may require the delivery of such supplies at a reduction in price which is equitable under the circumstances. Failure to agree to such reduction of price shall be a dispute concerning a question of fact within the meaning of the clause of this contract entitled "Disputes." or (c) If any inspection or test is made by the Government on the premises of the Contractor or a subcontractor, the Contractor without additional charge shall provide all reasonable facilities and assistance for the safety and convenience of the Government inspectors in the performance of their duties. If Government inspection or test is made at a point other than the premises of the Contractor or a subcontractor, it shall be at the expense of the Government except as otherwise provided in this contract: Provided, That in case of rejection the Government shall not be liable for any reduction in value of samples used in connection with such inspection or test. All inspections and tests by the Government shall be performed in such a manner as not to unduly delay the work. The Government reserves the right to charge to the Contractor any additional cost of Government inspection and test when supplies are not ready at the time such inspection and test is requested by the Contractor or when reinspection or retest is necessitated by prior rejection. Acceptance or rejection of the supplies shall be made as promptly as practicable after delivery, except as otherwise provided in this contract; but failure to inspect and accept or reject supplies shall neither relieve the Contractor from responsibility for such supplies as are not in accordance with the contract requirements nor impose liability on the Government therefor. (d) The inspection and test by the Government of any supplies or lots thereof does not relieve the Contractor from any responsibility regarding defects or other failures to meet the contract requirements which may be discovered prior to acceptance. Except as otherwise provided in this contract, accept ance shall be conclusive except as regards latent defects, fraud, or such gross mistakes as amount to fraud. (e) The Contractor shall provide and maintain an inspection system acceptable to the Government covering the supplies hereunder. Records of all inspection work by the Contractor shall be kept complete and available to the Government during the performance of this contract and for such longer period as may be specified elsewhere in this contract. § 1-7.101-6 Responsibility for supplies. RESPONSIBILITY FOR SUPPLIES Except as otherwise provided in this contract, (i) the Contractor shall be responsible for the supplies covered by this contract until they are delivered at the designated delivery point, regardless of the point of inspection; (ii) after delivery to the Government at the designated point and prior to acceptance by the Government or rejection and giving notice thereof by the Government, the Government shall be responsible for the loss or destruction of or damage to the supplies only if such loss, destruction, or damage results from the negligence of officers, agents, or employees of the Government acting within the scope of their employment; and (iii) the Contractor shall bear all risks as to rejected supplies after notice of rejection, except that the Government shall be responsible for the loss, or destruction of, or damage to the supplies only 1 such loss, destruction or damage results from the gross negligence of officers, agents, or employees of the Government acting within the scope of their employment. § 1-7.101-7 Payments. PAYMENTS The Contractor shall be paid, upon the submission of proper invoices or vouchers, the prices stipulated herein for supplies delivered and accepted or services rendered and accepted, less deductions, if any, as herein provided. Unless otherwise specified, payment will be made on partial deliveries accepted by the Government when the amount due on such deliveries so warrants; or when requested by the Contractor, payment for accepted partial deliveries shall be made whenever such payment would equal or exceed either $1,000 or 50 percent of the total amount of this contract. § 1-7.101-8 Assignment of claims. Insert the clause set forth in § 1-30.703 under the conditions contained therein. § 1-7.101-9 Additional bond security. ADDITIONAL BOND SECURITY If any surety upon any bond furnished in connection with this contract becomes unacceptable to the Government, or if any such surety fails to furnish reports as to his financial condition from time to time as re quested by the Government, the Contractor shall promptly furnish such additional security as may be required from time to time to protect the interests of the Government and of persons supplying labor or materials in the prosecution of the work contemplated by this contract. § 1-7.101-10 Examination of records. EXAMINATION OF RECORDS (a) The Contractor agrees that the Comptroller General of the United States or any of his duly authorized representatives shall, until expiration of 3 years after final payment under this contract, or of the time periods for the particular records specified in Part 1-20 of the Federal Procurement Regulations (41 CFR Part 1-20), whichever expires earlier, have access to and the right to examine any directly pertinent books, documents, papers, and records of the Contractor involving contract. transactions related to this (b) The Contractor further agrees to include in all his subcontracts hereunder a provision to the effect that the subcontractor agrees that the Comptroller General of the United States or any of his duly authorized representatives shall, until expiration of 3 years after final payment under the subcontract, or of the time periods for the particular records specified in Part 1-20 of the Federal Procurement Regulations (41 CFR Part 1-20), whichever expires earlier, have access to and the right to examine any directly pertinent books, documents, papers, and records of such subcontractor, involving transactions related to the subcontract. The term "subcontract" as used in this clause excludes (1) purchase orders not exceeding $2,500 and (2) subcontracts or purchase orders for public utility services at rates established for uniform applicability to the general public. The above clause shall be included in negotiated contracts as provided in § 1-3.814-2(e). When Standard Form 32 is used, the form need not be changed to delete the parenthetical sentence preceding paragraph (a) of the clause. [29 F.R. 10192, July 24, 1964, as amended at 34 F.R. 7148, May 1, 1969] § 1-7.101-11 Default. Insert the clause set forth in § 1-8.707 under the conditions prescribed in § 1-8.700-2(b) (1). § 1-7.101-12 Disputes. DISPUTES (a) Except as otherwise provided in this contract, any dispute concerning a question of fact arising under this contract which is not disposed of by agreement shall be decided by the Contracting Officer, who shall reduce his decision to writing and mail or otherwise furnish a copy thereof to the Contractor. The decision of the Contracting Officer shall be final and conclusive unless within 30 days from the date of receipt of such copy, the Contractor mails or otherwise furnishes to the Contracting Officer a written appeal addressed to the Secretary. The decision of the Secretary or his duly authorized representative for the determination of such appeals shall be final and conclusive unless determined by a court of competent jurisdiction to have been fraudulent, or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad faith, or not supported by substantial evidence. In connection with any appeal proceeding under this clause, the Contractor shall be afforded an opportunity to be heard and to offer evidence in support of its appeal. Pending final decision of a dispute hereunder, the Contractor shall proceed diligently with the performance of the contract and in accordance with the Contracting Officer's decision. (b) This "Disputes" clause does not preclude consideration of law questions in connection with decisions provided for in paragraph (a) above: Provided, That nothing in this contract shall be construed as making final the decision of any administrative offiical, representative, or board on a question of law. § 1-7.101-13 Notice and assistance regarding patent and copyright infringement. NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT INFRINGEMENT (a) The Contractor shall report to the Contracting Officer, promptly and in reasonable written detail, each notice or claim of patent or copyright infringement based on the performance of this contract of which the Contractor has knowledge. (b) In the event of any claim or suit against the Government on account of any alleged patent or copyright infringment arising out of the performance of this contract or out of the use of any supplies furnished or work or services performed hereunder, the Contractor shall furnish to the Government, when requested by the Contracting Officer, all evidence and information in possession of the Contractor pertaining to such suit or claim. Such evidence and information shall be furnished at the expense of the Government except where the Contractor has agreed to indemnify the Government. The above clause shall be included only if the amount of the contract exceeds $10,000. |