shall pay to the lessor a sum equal at the fair market value of the aircraft at the time of such loss or damage, unless a specific amount is indicated elsewhere in the contract, less the salvage value of the aircraft.

(d) The lessor certifies that the contract price does not include any cost attributable to hull insurance or to any reserve fund it has established to protect its interest in the aircraft. If, in the event of loss or damage to the leased aircraft, the lessor receives compensation for such loss or damage in any form from any source, the amount of such compensation shall be credited to the Government in determining the amount of the Government's liability under this clause; except that this shall not apply to proceeds of insurance received (1) solely as advances on insurance pending determination of Government liability, (2) for an increment of value of the aircraft beyond the value of which the Government is responsible.

(e) In the event of loss or damage of the aircraft, the Government shall be subrogated to all rights of recovery by the lessor against third parties for such loss or damage and such rights shall be immediately assigned to the Government. Except as the contracting officer may permit in writing, the contractor shall neither release nor discharge any third party from liability for such loss or damage nor otherwise compromise or adversely affect the Government's subrogation rights hereunder. The contractor shall cooperate with the Government in any suit or action undertaken by the Government against any such third party.

(f) Any failure to agree as to the responsibility of the Government under this clause shall, after a final finding and determination by the contracting officer, be considered a dispute within the meaning of the "Disputes" clause of this contract.

(b) In accordance with Order OA 4400.2, Assumption of Liability for Damage. Loss, or Destruction of Leased Aircraft, the clause need not be inserted in the contract:

(1) When the hourly rental rate does not exceed $250 and the total rental cost for any single transaction is not in excess of $2,500;

(2) Where the cost of hull insurance does not exceed 10% of the contract rate; or

(3) When the lessor's insuror does not grant a credit for uninsured hours, thereby preventing the lessor from granting the same to the Government. § 2-10.401-2 Fair market value of air. craft clause.

When the contract is to set forth a specific amount of the fair market value of the aircraft, insert the following clause:

*

* *

*

(a) Background. Section 504 of the Federal Aviation Act of 1958 provides "no lesser or any such aircraft * * * under a bona fide lease of 30 days or more, shall be liable * by reason of this interest as lessor or owner of the aircraft * * * for any injury to or death of persons, or damage to or loss of property * * unless such aircraft * is in the actual possession or control of such person at the time of such injury, death, damage or loss." (Italics supplied.) On all short-term or intermittent-use leases, therefore, the owner normally remains liable for damage caused by operation of the aircraft. It is usual for the aircraft owner to retain his insurance covering this liability during the term of such leases. Such insurance can, for little or no increase in premium, be made to cover the Government's exposure to liability as well. In order to take advantage of this coverage, the Risks and Indemnities clause prescribed in paragraph (c) of this section is used.

(b) Use of risks and indemnities clause. Insert the contract clause set forth in paragraph (c) of this section in (1) any out-service flight training contract, or in (2) any contract for the lease of aircraft where the Agency will have exclusive use of the aircraft for a period of less than 30 days.

(c) Contract clause.

RISKS AND INDEMNITIES

The contractor hereby agrees to idemnify and hold harmless the Government, its officers and employees from and against all claims, demands, damages, liabilities, losses, suits, and judgments (including all costs and expenses incident thereto) which may be suffered by, accrue against, be charged to or recoverable from the Government, its officers and employees by reason of injury to or death of any person other than officers, agents, or employees of the Government or by reason of damage to property of others of whatsoever kind (other than the property of the Government, its officers, agents, or employees) arising out of the operation of the

Subpart 2-15.1-Applicability [Reserved] Subpart 2-15.2-Principles and Procedures for Use in Cost-Reimbursement Type Supply and Research Contracts With Commercial Organizations

2-15.205-46 Travel costs. 2-15.250

2-15.250-1

Additional selected costs.
Relocation costs.

AUTHORITY: The provisions of this Part 2-15 issued under secs. 303, 813, 72 Stat. 747, 752; 49 U.S.C. 1344, 1354.

SOURCE: The provisions of this Part 2-15 appear at 31 F.R. 16462, Dec. 23, 1966, unless otherwise noted.

§ 2-15.000 Scope of part.

This part contains general cost principles and procedures for use, where appropriate, for the determination and allowance of costs in connection with the negotiation and administration of certain contracts.

Subpart 2-15.1-Applicability
[Reserved]

Subpart 2-15.2-Principles and Procedures for Use in Cost-Reimbursement Type Supply and Research Contracts With Commercial Organizations

§ 2-15.205-46 Travel costs.

(a) Air travel. The difference in cost between first-class air accommodations and less than first-class air accommodations is unallowable except when less than first-class air accommodations are not reasonably available to meet necessary mission requirements, such as where less than first-class accommodations would:

(1) Require circuitous routing (2) Require travel during unreasonable hours;

(3) Greatly increase the duration of the flight;

(4) Result in additional costs which would offset the transportation savings;

or

(5) Offer accommodations which are not reasonably adequate for the medical needs of the traveler.

§ 2-15.250

Additional selected costs.

§ 2-15.250-1 Relocation costs.

(a) Relocation costs, for the purpose of this subpart, are costs incident to the permanent change of duty assignment of an existing employee or upon recruitment of a new employee. These costs may include, but are not limited to, cost of:

(1) Transportation of the employee, members of his immediate family and his household and personal effects to the new location;

(2) Finding a new home, such as advance trips by employees and spouses to locate living quarters and temporary lodging during the transition period;

(3) Closing costs (i.e., brokerage fees, legal fees, appraisal fees, etc.), incident to the disposition of housing;

(4) Other necessary and reasonable expenses normally incident to relocation, such as cost of canceling an unexpired lease, disconnecting or reinstalling household appliances, and purchase of insurance against damages to personal property;

(5) Loss on sale of home; and

(6) Acquisition of a home in a new location (i.e., brokerage fees, legal fees, appraisal fees, etc.).

(b) Subject to paragraph (c) of this section, relocation costs of the type covered in paragraph (a) (1), (2), (3), and (4) of this section are allowable, provided (1) the move is for the benefit of the employer; (2) reimbursement is in accordance with an established policy or practice consistently followed by the employer, and such policy or practice is designed to motivate employees to relocate promptly and economically; (3) the costs are not otherwise unallowable, and (4) amounts to be reimbursed shall not exceed the employee's actual (or reasonably estimated) expenses.

(c) Costs otherwise allowable under paragraph (b) of this section are subject

to the following additional provisions: (1) The transition period for incurrence of costs of the type covered in paragraph (a) (2) of this section shall be kept to the minimum number of days necessary under the circumstances, but shall not, in any event, exceed a cumulative total of 30 days including advance trip time; and (2) allowance for costs of the type covered in paragraph (a) (3) of this section shall not exceed 8 percent of the sales price of the property sold. Costs of the type covered in paragraph (a) (3) and (4) of this section are allowable only in connection with the relocation of existing employees, and are not allowable for newly recruited employees.

(d) Costs of the type covered in paragraph (a) (5) and (6) of this section are not allowable.

PART 2-17-EXTRAORDINARY CONTRACTUAL ACTIONS TO FACILITATE THE NATIONAL DEFENSE

Sec. 2-17.000

2-17.101

2-17.102

2-17.102-50

2-17.103

2-17.105

2-17.204

2-17.204-1

Scope of part.

Subpart 2-17.1-General

Authority.

General policy.

Delegation of authority. Types of actions.

Reports.

Standards for deciding cases.
General.

AUTHORITY: The provisions of this Part 2-17 issued under secs. 303, 813, 72 Stat. 747, 752; 49 U.S.C. 1344, 1354.

SOURCE: The provisions of this Part 2-17 appear at 31 F.R. 16463, Dec. 23, 1966, unless otherwise noted.

§ 2-17.000 Scope of part.

This part designates an Agency official authorized to approve actions under Public Law 85-804 (hereinafter referred to as "the Act"), and establishes uniform Agency procedures for entering into and amending or modifying contracts to facilitate the national defense under the authority granted by the Act.

Subpart 2-17.1-General

§ 2-17.101 Authority.

(a) As stated in § 1-17.101 of this title, the Act empowers the President to authorize departments and agencies exercising functions in connection with the national defense to enter into contracts

or into amendments or modifications of contracts without regard to other provisions of law relating to the making, performance, amendment, or modification of contracts, whenever he deems that such action would facilitate the national defense.

(b) Executive Order 10789 of November 14, 1958, authorizes the Administrator of the Federal Aviation Agency, or his duly authorized representative, to perform or exercise all the functions and authority set forth in the Executive order.

§ 2-17.102 General policy.

§ 2-17.102-50 Delegation of authority.

The Associate Administrator for Development is the duly authorized representative of the Administrator in exercising the authority conferred by the Executive order. This authority may not be redelegated.

§ 2-17.103 Types of actions.

The following three types of actions may be taken by or pursuant to the direction of the Associate Administrator for Development:

(a) Contractual adjustments such as amendments without consideration, correction of mistakes, and formalization of informal commitments (see Subpart 1-17.2 of this title).

(b) Making advance payments (procedures for making such payments are set forth in Subpart 1-30.4 of this title).

(c) Exercise of "residual powers" which refers to all other authority under the Act (see Subpart 1-17.3 of this title). § 2-17.105 Reports.

The Chief, Procurement Policy and Standards Division, IM-600, is responsible for submitting to the Congress a report of all actions taken within the Agency, in accordance with the requirements contained in § 1-17.105 of this title.

§ 2-17.204 Standards for deciding

An appeal from a decision of a contracting officer is made by sending a written notice of appeal to the Administrator, Federal Aviation Agency, directed to the attention of the contracting offcer. The notice must be mailed or filed within 30 days after the date the decision of the contracting officer is received, unless a different time is provided in the contract. They must sign the notice, identify the contract involved and the decision appealed from, and state that he is appealing from that decision. A letter of complaint or a general letter objecting to some action taken is not a notice of appeal. The notice should be in triplicate, specify the portion or portions of the decision from which the appeal is taken, and state the reason why those portions are erroneous.

§ 2-60.202 Duties of the contracting officer.

Upon receiving a notice of appeal the contracting officer shall endorse on the original and the copies the date of mailing, or the date of receipt if otherwise filed. He shall send the notice and one copy immediately to the Contract Appeals Panel for docketing. Within 15 days after the date he receives the

99-188-69- 7

(c) All correspondence between the parties relating to the dispute;

(d) Transcripts of any testimony taken in connection with the dispute, in addition to any affidavits or statements of any witnesses that were considered by the contracting officer in reaching his decision;

(e) A statement of the evidence leading to, and the basis for arriving at, the contracting officer's decision, citing pertinent letters and documents related to the decision; and

(f) Any additional data that the contracting officer may consider pertinent. The contracting officer may substitute a true copy for the original of any document named in paragraphs (a) through (f) of this section.

§ 2-60.203 Notice to appellant.

The Chairman of the Contract Appeals Panel shall notify the appellant that he has received the file, and shall advise him of his right to inspect the file and of his option to submit the matter on the record, to be heard at an administrative inquiry, or to be heard at an adversary hearing.

§ 2-60.204 Appellant's right to inspect record.

The contract appeals file and all documents, records, and evidentiary matter that are to be considered by the Panel in making its decision, are available for inspection by the appellant, while the appeal is pending, at the office of the Chairman of the Panel, and at any hearing that may be held. However, only persons having an appropriate security clearance may have access to any classified material.

§ 2-60.205 Designation of panel member to consider appeal.

The Chairman of the Contract Appeals Panel shall designate one member of the

panel to act for the Panel. In cases of unusual complexity, more than one member may be designated. The member or members designated for that purpose shall not have participated directly in any aspect of the award or administration of the contract involved. The Chairman shall notify the appellant and the contracting officer of the designation. The designated panel member, or members, shall exercise the authority of the Panel in all matters, except that the decision is made by a majority of the panel members designated by the Chairman to decide the case.

§ 2-60.206 Request for hearing.

The appellant may request an oral hearing, by written notice to the Contract Appeals Panel within 30 days after the date he receives the Panel's notice to appellant under § 2-60.203, or if the contracting officer files additional material for the record under § 2-60.208 within 30 days after the date the appellant receives his copy of that material. The panel member to whom the appeal has been assigned shall fix the time and the place of the hearing, and shall notify the appellant and the contracting officer whose decision is appealed, at least 15 days before the hearing. Ordinarily, hearings are held at the headquarters of the Agency, in Washington, D.C., but they may be held at any other place designated by the member conducting the hearing, for good cause shown. The convenience of the parties will be considered.

§ 2-60.207 Appellant's election as to procedure.

(a) The appellant may elect to have the appeal considered upon:

(1) The written record, without oral inquiry or hearing (§ 2-60.208);

(2) An administrative inquiry (§ 260.209); or

(3) An adversary hearing (§§ 2-60.210 through 2-60.210-5);

(b) The appellant makes his election as follows:

(1) He elects to have the appeal considered on the written record if he does not request a hearing in accordance with § 2-60.206.

(2) He elects to have the appeal considered upon an administrative inquiry if he requests a hearing, but does not file a formal petition in accordance with § 2