7-105.5 Liquidated Damages. In accordance with 1-310, where a liquidated damages provision is to be used, the following provision shall be inserted as paragraph (f) of the Default clause (7-103.11) and the present paragraphs (f) and (g) of that clause shall be redesignated “g” and “h": (f) If the Contractor fails to deliver the supplies or perform the services within the time specified in this contract, or any extension thereof, the actual damage to the Government for the delay will be difficult or impossible to determine. Therefore in lieu of actual damages the Contractor shall pay to the Government as fixed, agreed, and liquidated damages for each calendar day of delay, the amount set forth elsewhere in this contract. Alternatively, the Government may terminate this contract in whole or in part as provided in paragraph (a) of this clause, and in that event the Contractor shall be liable, in addition to the excess costs provided in paragraph (b) above, for such liquidated damages accruing until such time as the Government may reasonably obtain delivery or performance of similar supplies or services. The Contractor shall not be charged with liquidated damages when the delay arises out of causes beyond the control and without the fault or negligence of the Contractor, as defined in paragraph (c) above, and in such event, subject to the "Disputes" clause, the Contracting Officer shall ascertain the facts and extent of the delay and shall extend the time for performance of the contract when in his judgment the findings of fact justify an extension. 7-105.6 Bill of Materials. A bill of materials consists of a report by a supplier which specifies the quantities of various materials required to produce a designated quantity of supplies of a particular kind. A bill of materials with respect to all or part of the supplies to be furnished pursuant to a contract, shall be required only if the contracting officer shall determine that such bill is necessary to develop materials or components requirements for production and maintenance programs, for industrial mobilization purposes, or for other specified purposes. In such event, the contract shall specify, with respect to such bill, the following: (i) the supplies or parts thereof to be covered by the bill of materials; 7-105.6 ARMED SERVICES PROCUREMENT REGULATION 1 JULY 1976 CONTRACT CLAUSES AND SOLICITATION PROVISIONS (iv) the number and kind of copies of such bill to be furnished; and In such event, the contract shall also include the following clause: BILL OF MATERIALS (1955 APR) (a) With respect to the supplies to be delivered pursuant to the contract, for which a Bill of Materials is required, the Contractor shall furnish a Bill of Materials in the required number of copies on Department of Defense Forms 346, and 347 if applicable, or authorized reproductions thereof, in accordance with the instructions specified in the Schedule. (b) The Contractor shall furnish to the Government, at such intervals as designated in the Schedule, revised pages of the Bill of Materials incorporating the effect of any changes, pursuant to the clause hereof entitled "Changes," in the quantity of any material or part, or any other information contained in the Bill of Materials, or a statement that no revision is necessary. A final revision, or statement that no revision is necessary, shall be furnished upon completion of performance of the contract. (c) The Bill of Materials and all revisions or statements subsequent thereto shall be subject to inspection and acceptance by the Government. (End of clause) When a bill of materials is procured by contract separate from the supplies to which such bill of materials relates, such contract shall include such of the terms mentioned above as may be appropriate and shall specify that the bill of materials shall be furnished on DD Forms 346, and 347 if applicable, or authorized reproductions thereof. The contractor shall not be required to obtain data for the bill of materials in greater detail from a subcontractor than he is to furnish under the terms of the above clause. 7-105.7 Warranty Clauses. (a) The following clause is an example for use in accordance with 1-324. Additional guidance is in paragraph (d) below. WARRANTY OF SUPPLIES (a) Notwithstanding inspection and acceptance by the Government of supplies furnished under this contract or any provision of this contract concerning the conclusiveness thereof, the contractor warrants that at the time of delivery:* (See footnotes at end of clause) (i) all supplies furnished under this contract will be free from defects in material or workmanship and will conform with the specifications and all other requirements of this contract; and (ii) the preservation, packaging, packing, and marking, and the preparation for, and method of, shipment of such supplies will conform with the requirements of this con tract. (b) The Contracting Officer shall give written notice to the Contractor of any breach of the warranties in paragraph (a) of this clause within one year after delivery of the nonconforming supplies.** (c) Within a reasonable time after such notice, the Contracting Officer may either: (i) by written notice require the prompt correction or replacement of any supplies or parts thereof (including preservation, packaging, packing, and marking) that do not conform with the requirements of this contract within the meaning of paragraph (a) of this clause, or (ii) retain such supplies, whereupon the contract price thereof shall be reduced by an amount equitable under the circumstances. (d) If the contract provides for inspection of supplies by sampling procedures, conformance of supplies or components thereof subject to warranty action shall be determined in accordance with the applicable sampling procedures contained in the contract. For sampling purposes, the Contracting Officer may group any supplies delivered under this contract. The size of the sample shall be that required by sampling procedures specified in the contract for the quantity of supplies on which warranty action is proposed. Warranty sampling results may be projected over supplies in the same shipment or other supplies contained in other shipments even though all of such supplies 7-105.7 ARMED SERVICES PROCUREMENT REGULATION CONTRACT CLAUSES AND SOLICITATION PROVISIONS are not present at the point of reinspection, provided, the supplies remaining are reasonably representative of the quantity on which warranty action is proposed. The original inspection lots need not be reconstituted, nor shall the Contracting Officer be required to use the same lot size as on original inspection. Within a reasonable time after notice of any breach of warranties in paragraph (a) of this clause as determined herein, the Contracting Officer may exercise one or more of the following options: (i) require an equitable adjustment in the contract price for any group of supplies; (ii) screen the supplies grouped under this clause at Contractor's expense and return all nonconforming supplies to the Contractor for correction or replacement; (iii) require the Contractor to screen the supplies at depots designated by the Government within the continental United States and to correct or replace all nonconforming supplies; and/or (iv) return the supplies grouped under this clause to the Contractor (irrespective of the f.o.b. point or the point of acceptance) for screening and correction or replacement. (e) When return, correction, or replacement is required, transportation charges and responsibility for such supplies while in transit shall be borne by the Contractor. However, the Contractor's liability for such transportation charges shall not exceed an amount equal to the cost of transportation by the usual commercial method of shipment between the place of delivery specified in this contract and the Contractor's plant, and return. (f) The Contracting Officer may, by contract or otherwise, correct or replace the nonconforming supplies with similar supplies and charge to the Contractor the cost occasioned to the Government thereby if the Contractor (i) fails to make redelivery of the corrected or replaced supplies within the time established for their return, or (ii) fails either to accept return of the nonconforming supplies or fails to make progress after their return to correct or replace them so as to endanger performance of the delivery schedule, and in either of these two circumstances does not cure such failure within a period of ten (10) days (or such longer period as the Contracting Officer may authorize in writing) after receipt of notice from the Contracting Officer specifying such failure. In lieu of correction or replacement by the Government, the Contracting Officer may require an equitable adjustment of the contract price. In addition, if the Contractor fails to furnish timely disposition instructions, the Contracting Officer may dispose of the nonconforming supplies for the Contractor's account in a reasonable manner. The Government is entitled to reimbursement from the Contractor or from the proceeds of such disposal for the reasonable expenses of the care and disposition of the nonconforming supplies, as well as for excess costs incurred or to be incurred. (g) Any supplies or parts thereof corrected or furnished in replacement pursuant to this clause shall also be subject to all the provisions of this clause to the same extent as supplies initially delivered. The warranty with respect to such supplies or parts thereof shall be equal in duration to that set forth in (a) above and shall run from the date of delivery of such corrected or replaced supplies. (h) The word "supplies" as used herein means the end item furnished by the Contractor and related services required under the contract. The word does not include technical data. (i) All implied warranties of merchantability and “fitness for a particular purpose" are hereby excluded from any obligation contained in this contract. (j) The rights and remedies of the Government provided in this clause are in addition to and do not limit any rights afforded to the Government by any other clause of the contract. (End of clause) Footnotes for above clause: • Or state the specific warranty period, eg, for (insert period of time) after delivery or the specified event whose occurrence will terminate the warranty period,eg, the number of miles or hours of use, or combinations of any applicable events or periods of time (see 1-324.4(c)). ** Or insert another specific period of time in which notice shall be given to the contractor, eg., “within (insert period of time) of the last delivery under this contract," or "within (insert period of time) after discovery of the defect" when a specific warranty period is expressed in paragraph (a) of the clause (see 1-324.4(d)). 7-105.7 ARMED SERVICES PROCUREMENT REGULATION CONTRACT CLAUSES AND SOLICITATION PROVISIONS (b) The following clause is an example for use in accordance with 1-324 in contracts for deliverable complex items. Additional guidance is in paragraph (d) below. WARRANTY OF SUPPLIES (a) Definitions. (1) Acceptance: The word "acceptance" as used herein means the execution of the Acceptance Block and signing of a Form DD 250 by the authorized Government representative. (2) Supplies. The word "supplies" as used herein means the end item furnished by the Contractor and any related services required under this contract. The word does not include technical data. (b) Warranty. The Contractor warrants that * (See footnotes at end of clause) all supplies furnished under this contract will be free from defects in material and workmanship and will conform with the specifications and all other requirements of this contract; provided, however, that with respect to Government-furnished property, the Contractor's warranty shall extend only to its proper installation, unless the Contractor performs some modification or other work on such property, in which case the Contractor's warranty shall extend to such modification or other work. (c) Remedies. (1) Right to Corrective or Replacement Action. In the event of a breach of the Contractor's warranty in paragraph (b) above, the Government may, at no increase in contract price, (A) require the Contractor, at the place of delivery specified in the contract (irrespective of the f.o.b. point or the point of acceptance) or at the Contractor's plant, to repair or replace, at the Contractor's election, defective or nonconforming supplies, or (B) require the Contractor to furnish at the Contractor's plant such materials or parts and installation instructions as may be required to successfully accomplish the required correction. The Contractor shall also prepare and furnish to the Government data and reports applicable to any correction required under this clause (including revision and updating of all affected data called for under this contract) at no increase in the contract price. When supplies are returned to the Contractor, the Contractor shall bear the transportation costs from the place of delivery specified in the contract (irrespective of the f.o.b. point or the point of acceptance) to the Contractor's plant and return. (2) Right to Equitable Adjustment. If the Government does not require correction or replacement of defective or nonconforming supplies or the Contractor is not obligated to correct or replace by reason of paragraph (f) below, the Government shall be entitled to an equitable reduction in the price of such supplies. ** (d) Notification Except as the notification period may be extended by paragraph (e), the Contractor shall be notified in writing of any breach of the warranty in paragraph (b) above within Within ***. thereafter, the Contractor shall submit to the Contracting Officer a written recommendation as to the corrective action required to remedy the breach. After the notice of breach, but not later than ****. after receipt of the Contractor's recommendation for corrective action, the Contracting Officer may in writing direct correction or replacement as set forth in paragraph (c) above, and the Contractor shall, notwithstanding any disagreement regarding the existence of a breach of warranty comply with such direction. In the event it is later determined that the Contractor did not breach the warranty in paragraph (b) above, the contract price will be equitably adjusted. (e) Corrected or Replaced Supplies. (1) Any supplies or parts thereof corrected or furnished in replacement pursuant to this clause shall also be subject to all the provisions of this clause to the same extent as supplies initially delivered. The warranty with respect to such supplies or parts thereof shall be equal in duration to that set forth in (b) above and shall run from the date of delivery of such corrected or replaced supplies (2) With respect to such supplies, the period for notification of a breach of the Contractor's warranty in paragraph (d) shall be *****. from the furnishing or return by the Contractor to the Government of the corrected or replaced supplies or parts thereof, or, if correction or replacement is effected by the Contractor at a Government or other activity, for *****, thereafter. 7-105.7 ARMED SERVICES PROCUREMENT REGULATION CONTRACT CLAUSES AND SOLICITATION PROVISIONS (f) Inability to Correct. The Contractor shall not be obligated to correct or replace supplies if the facilities, tooling, drawings, or other equipment or supplies necessary to accomplish such correction or replacement have been made unavailable to the Contractor by action of the Government. In the event that correction or replacement has been directed, the Contractor shall promptly notify the Contracting Officer in writing of such nonavailability. (g) All implied warranties of merchantability and "fitness for a particular purpose" are hereby excluded from any obligation contained in this contract. (h) The rights and remedies of the Government provided in this clause are in addition to and do not limit any rights afforded to the Government by any other clause of the contract. (End of clause) Footnotes for above clause: • State the specific warranty period, e.g., "at the time of delivery," "for..........(insert period of time) after delivery" or the specified event whose occurrence will terminate the warranty period, eg, the number of miles or hours of use, or combination of any applicable events or periods of time (see 1-324.4(c)). ** Insert the specific period of time in which notice shall be given *** Insert period within which the Contractor must respond to a **** Insert period within which warranty remedies should be exercised. ***** Insert period within which Contractor must be notified of a breach of warranty as to corrected or replaced supplies. (c) The following clause is an example for use in accordance with 1-324 in contracts for systems and equipment when performance specifications or design are of major importance. Additional guidance is in paragraph (d) below. CORRECTION OF DEFICIENCIES (a) Definitions. As used in this clause: (i) “deficiency" means any condition or characteristic in any supplies or services furnished hereunder, which is not in compliance with the requirements of this contract; (ii) "correction" means any and all actions necessary to eliminate any and all deficiencies; and (iii) the word "supplies" as used herein means the end item furnished by the Contractor and related services required under the contract. Except when the contract includes the clause entitled Warranty of Technical Data, the word also includes technical data. (b) General. (1) The rights and remedies of the Government provided in this clause: (i) shall not be affected in any way by any other provisions under this contract concerning the conclusiveness of inspection and acceptance; and (ii) are in addition to and do not limit any rights afforded to the Government by any other clause of this contract. (2) This clause shall apply only to those deficiencies discovered by either the Government or the Contractor *. ...(See footnotes at end of clause.) 7-105.7 ARMED SERVICES PROCUREMENT REGULATION 80-103 0-82--17 |