CONTRACT CLAUSES AND SOLICITATION PROVISIONS

(g) The Contractor shall have the right of appeal, under the clause of this contract entitled "Disputes", from any determination made by the Contracting Officer under paragraph (c) or (e) above, except that if the Contractor has failed to submit his claim within the time provided in paragraph (c) above and has failed to request extension of such time, he shall have no such right of appeal. In any case where the Contracting Officer has made a determination of the amount due under paragraph (c) or (e) above, the Government shall pay to the Contractor the following: (i) if there is no right of appeal hereunder or if no timely appeal has been taken, the amount so determined by the Contracting Officer, or (ii) if an appeal has been taken, the amount finally determined on such appeal.

(h) In arriving at the amount due the Contractor under this clause there shall be deducted (i) all unliquidated advance or other payments theretofore made to the Contractor, applicable to the terminated portion of this contract, (ii) any claim which the Government may have against the Contractor in connection with this contract, and (iii) the agreed price for, or the proceeds of sale of, any materials, supplies, or other things acquired by the Contractor or sold pursuant to the provisions of this clause and not otherwise recovered by or credited to the Government.

(i) The Government may from time to time, under such terms and conditions as it may prescribe, make partial payments and payments on account against costs incurred by the Contractor in connection with the terminated portion of the contract whenever in the opinion of the Contracting Officer the aggregate of such payments shall be within the amount to which the Contractor will be entitled hereunder. If the total of such payments is in excess of the amount finally determined to be due under this clause, such excess shall be payable by the Contractor to the Government upon demand, together with interest computed at the rate established by the Secretary of the Treasury pursuant to Public Law 92-41, 85 STAT 97 for the Renegotiation Board, for the period from the date such excess payment is received by the Contractor to the date on which such excess is repaid to the Government; provided, however, that no interest shall be charged with respect to any such excess payment attributable to a reduction in the Contractor's claim by reason of retention or other disposition of termination inventory until ten (10) days after the date of such retention or disposition, or such later date as determined by the Contracting Officer by reason of the circumstances.

(j) Appropriate equitable adjustment may be made in any related procurement contract of the Contractor which so provides and which is affected by a Notice of Termination under this clause. In no event shall the Government be liable to the Contractor for damages or loss of profits by reason of a Notice of Termination issued pursuant to this clause.

(End of clause)

In accordance with E-621, the last sentence of paragraph (i) in the above clause may be deleted in contracts with agencies of the United States Government, foreign governments or agencies thereof, state or local governments or agencies thereof, or nonprofit contracts with :onprofit educational or research institutions. 7-702.23 Notice of Use of the Facilities.

NOTICE OF USE OF THE FACILITIES (1968 JUN)

The Contractor shall notify the Contracting Officer in writing whenever:

(i) Use of all Facilities for Government work, in any quarterly period, is on an average less than 75% of the total use of the Facilities.

(ii) Any item of the Facilities which is no longer needed or usable for purposes of performing existing Government contracts or subcontracts for which use has been authorized.

(End of clause)

7-702.23

ARMED SERVICES PROCUREMENT REGULATION

CONTRACT CLAUSES AND SOLICITATION PROVISIONS

7-702.24 Termination of the Use of the Facilities.

TERMINATION OF THE USE OF THE FACILITIES (1964 SEP)

(a) The Contractor may at any time, upon written notice to the Contracting Officer, terminate his authority to use any or all of the Facilities. Termination under this paragraph (a) shall not relieve the Contractor of any of his obligations or liabilities under any related procurement contract or subcontract affected thereby.

(b) The Contracting Officer may at any time, upon written notice, terminate or limit the Contractor's authority to use any or all of the Facilities. Except as otherwise provided in the “Failure to Perform" clause of this contract, appropriate equitable adjustment may be made in any related procurement contract of the Contractor which so provides and which is affected by any such notice.

(End of clause)

7-702.25 Period of This Contract.

PERIOD OF THIS CONTRACT (1964 SEP)

If not previously terminated pursuant to the "Termination of the Use of the Facilities" clause of this contract, the use of the Facilities authorized under this contract shall terminate five (5) years after its effective date. Thereafter, if continued use of the Facilities by the Contractor is mutually desired, the parties shall enter into a new contract which shall incorporate such provisions as may then be required by applicable laws and regulations. The parties may, by written agreement, extend the use of the Facilities hereunder beyond this five (5) year period to permit the completion of then existing related procurement contracts and subcontracts.

(End of clause)

A period of more than five years may be specified when authorized by the Secretary of the Department concerned or his designee, not lower than the Head of a Procuring Activity. A period of less than five years may be specified when appropriate.

7-702.26 Disposition of the Facilities.

DISPOSITION OF THE FACILITIES (APR 1968)

(a) Except as the Contracting Officer otherwise directs, or until use of all the Facilities under this contract is terminated, the provisions of this clause shall not be applicable to those Facilities, the use of which has been terminated by the Contractor by a notice of termination under paragraph (a) of the "Termination of the Use of the Facilities" clause of this contract if:

(i) such Facilities comprise less than all of the Facilities in the possession of the Contractor, and

(ii) the Contracting Officer determines that continued retention of such Facilities would not interfere with the Contractor's operations.

(b) Within sixty (60) days after the effective date of any notice of termination given pursuant to the "Termination of the Use of the Facilities" clause of this contract, or within such longer period as the Contracting Officer may approve in writing, the Contractor shall submit to the Contracting Officer, in form satisfactory to him, an accounting for all the Facilities covered by such notice.

(c) Within ninety (90) days after the Contractor accounts for any Facilities pursuant to paragraph (b) above, the Contracting Officer shall give written notice to the Contractor as to the disposition thereof, except as otherwise provided in paragraph (e) below. In effecting such disposition, the Government may either:

(i) abandon any such Facilities in place, and thereupon all obligations of the Government regarding such abandoned Facilities and the restoration or rehabilitation of the premises in and on which they are located shall cease; or

(ii) require the Contractor to comply, at Government expense, with such written directions as the Contracting Officer may give with respect to:

(A) the preparation, protection, removal, or shipment of the affected Facilities;

7-702.26

ARMED SERVICES PROCUREMENT REGULATION

CONTRACT CLAUSES AND SOLICITATION PROVISIONS

(B) the retention or storage of the affected Facilities, provided, that the Contracting Officer will not direct the Contractor to retain or store any items of Facilities in or on real property not owned by the Government if such retention or storage will interfere with the Contractor's operations;

(C) the restoration of Government-owned land or buildings incident to the removal therefrom of Government-owned Facilities; and

(D) the sale of any affected Facilities in such manner, at such times, and at such price or prices, as may be approved by the Contracting Officer, except that the Contractor shall not be required to extend credit to any purchaser.

(d) If the Contracting Officer fails to give the written notice required by paragraph (c) above within the prescribed ninety (90) day period, or within thirty (30) days after notice as hereinafter provided, the Contractor may, upon not less than thirty (30) days' written notice to the Government and at Government risk and expense, (i) retain the Facilities in place or (ii) remove any of the affected severable Facilities located in Contractor-owned buildings or property and store them elsewhere, at Contractor's plant or in a public insured warehouse, in accordance with sound practice and in a manner compatible with their security classification, if any. Except as provided in this paragraph, the Government shall not be liable to the Contractor for failure to give the written notice required by paragraph (c) above.

(e) Nonseverable items of the Facilities or items of the Facilities subject to patent or proprietary rights shall be disposed of in such manner as the parties may have agreed to in writing.

(f) The Government, either directly or by third persons engaged by it, may remove or otherwise dispose of any Facilities with respect to which the Contractor's authority to use has been terminated, other than those for which specific provision is made in paragraph (e) above.

(g) The Contractor shall, within a reasonable time after the expiration of the ninety (90) day period specified in paragraph (c) above, remove all property owned by him from land or buildings owned or acquired by the Government and take such action as the Contracting Officer may direct in writing with respect to restoring such land or buildings, insofar as they are affected by the installation therein of the Contractor's property, to their condition prior to such installa

tion.

(h) Unless otherwise specifically provided in this contract, the Government shall not be obligated to the Contractor to restore or rehabilitate any property at Contractor's plant, except for restoration cr rehabilitation costs caused by removal of the Facilities pursuant to paragraph (c)(ii) above. The Contractor agrees to indemnify the Government against all suits or claims for damages arising out of the Government's failure to restore or rehabilitate any property at the Contractor's plant or property of its subcontractors, except any such damage as may be occasioned by the negligence of the Government, its agents, or independent contractors. (End of clause)

7-702.27 Failure to Perform.

FAILURE TO PERFORM (1964 SEP)

(a) Subject to the provisions of the clause hereof entitled "Excusable Delays", if the Contractor shall fail to perform this contract in accordance with its terms, the Contracting Officer shall give the Contractor written notice thereof. Thereafter, notwithstanding any other provision of this contract, the Contractor shall not be entitled to an equitable adjustment under either this contract or any related procurement contract, to the extent that such equitable adjustment arises out of the Contractor's failure to perform or such reasonable remedial action as may be taken by the Contracting Officer predicated upon such failure.

(b) The failure of the Government to insist, in any one or more instances, upon the performance of any term or terms of this contract shall not be construed as a waiver or relinquishment of the Government's right to future performance of such term or terms, and the Contractor's obligation in respect to such future performance shall continue in full force and effect.

(c) The rights and remedies of the Government provided in this clause are in addition to any other rights and remedies provided by law or under this contract.

(End of clause)

7-702.27

ARMED SERVICES PROCUREMENT REGULATION

CONTRACT CLAUSES AND SOLICITATION PROVISIONS

7-702.28 Disputes. Insert the clause in 7-103.12.

7-702.29 Military Security Requirements. In accordance with 7-104.12, insert the clause therein, deleting paragraphs (c) and (d), and substituting the following paragraphs (c) and (d).

(c) If, subsequent to the date of this contract, the security classifications or security requirements under this contract are changed by the Government as provided in this clause, and if such change causes an increase or decrease in the estimated cost of performance of this contract, the estimated cost, to the extent appropriate, shall be subject to an equitable adjustment. Any such equitable adjustment shall be accomplished in the manner set forth in the "Changes" clause in this contract.

(d) The Contractor agrees to insert, in all subcontracts hereunder which involve access to classified information, provisions which shall conform substantially to the language of this clause, including this paragraph (d) but excluding (c) of this clause. The Contractor may insert in any such subcontract, and any such subcontract entered into may contain, in lieu of paragraph (c) of this clause, provisions which permit equitable adjustments to be made in the subcontract price or in the estimated cost and fixed fee of the subcontract (as appropriate to the type of subcontract involved) on account of changes in security classifications or requirements made under the provisions of this clause subsequent to the date of the subcontract involved. (1973 APR)

7-702.30 Authorizaton and Consent. In accordance with 9-102, insert the clause in 7-103.22 or 7-302.21.

7-702.31 Notice and Assistance Regarding Patent and Copyright Infringement. In accordance with 9-104, insert the clause in 7-103.23.

7-702.32 Bills of Lading Covering Shipments To or From Contractor's Plant. In accordance with the requirements of 19-217.1(b), insert the clause in

7-203.14.

7-702.33 Subcontracts. Insert the clause in 7-203.8 except that paragraph (a) shall be appropriately modified to delete references to facilities and special tooling.

7-702.34 Utilization of Small Business and Small Disadvantaged Business Concerns. In accordance with 1-707.3,

insert one or more of the clauses in 7-104.14.

7-702.35 Utilization of Labor Surplus Area Concerns. In accordance with 1-805.3(a), insert the clause in 7-104.20(a).

7-702.36 Buy American Act. In accordance with 7-104.3, insert the clause therein. When the contract involves construction work, in accordance with 7-602.20 and 7-602.24 also insert the clauses therein.

7-702.37 Assignment of Claims. In accordance with 7-103.8, insert the clause therein.

7-702.38 Renegotiation. In accordance with 7-103.13, insert the appropriate clause therein.

7-702.39 Officials Not To Benefit. Insert the clause in 7-103.19. 7-702.40 Gratuities. In accordance with 7-104.16, insert the clause therein. 7-702.41 Covenant Against Contingent Fees. Insert the clause in 7-103.20. 7-702.42 Payment for Overtime Premiums. In accordance with 12-102.4, insert the clause in 7-203.27.

7-702.43 Convict Labor. In accordance with 12-202 and 12-203, insert the clause in 7-104.17.

7-702.44 Equal Opportunity. In accordance with 12-807.1, insert the applicable clause in 7-103.18.

7-702.44

ARMED SERVICES PROCUREMENT REGULATION

7:361

CONTRACT CLAUSES AND SOLICITATION PROVISIONS

7-702.45 Walsh-Healey Public Contracts Act. In accordance with Section XII, Part 6, insert the clause in 7-103.17.

7-702.46 Contract Work Hours and Safety Standards Act-Overtime Compensation. In accordance with 12-301, 12-302, and 12-306, insert the clauses in 7-103.16.

7-702.47 Price Reduction for Defective Cost or Pricing Data. In accordance with 7-104.29, insert the appropriate clause therein.

7-702.48 Audit by Department of Defense. In accordance with 7-104.41(a), insert the clause therein as amended by 7-104.41(b).

7-702.49 Subcontractor Cost and Pricing Data. In accordance with 7-104.42, insert the appropriate clause therein.

7-702.50 Competition in Subcontracting. In accordance with 7-104.40, insert the clause therein.

7-702.51 Equal Opportunity Pre-Award Clearance of Subcontracts. In accordance with 23-201.4, insert the clause in 7-104.22.

7-702.52 Reserved.

7-702.53 Affirmative Action for Disabled Veterans and Veterans of the Vietnam Era. Insert the clause in 7-103.27.

7-702.54 Affirmative Action for Handicapped Workers. Insert the clause in

7-103.28.

7-702.55 Clean Air and Water. In accordance with 1-2302.2, insert the clause in 7-103.29.

7-702.56 Notice of Intent to Disallow or Not Recognize Costs. Insert the clause in 7-203.35.

7-703 Required Clauses for Facilities Acquisition Contracts. The following contract clauses shall be inserted in all facilities acquisition contracts.

7-703.1 Definitions. Insert the clause required by 7-702.1. Additional definitions may be included in such clause provided they are not inconsistent with such clause or the provisions of this Regulation.

7-703.2 Facilities To Be Provided. Insert the clause in 7-702.2.

7-703.3 Late Delivery, Diversion, and Substitution. Insert the clause in

7-702.3.

7-703.4 Changes. Insert the clause in 7-702.4.

7-703.5 Representations and Warranties. Insert the clause in 7-702.5.

7-703.6 Inspection. In accordance with 8-708, insert the clause in 7-702.6. 7-703.7 Excusable Delays. Insert the clause in 7-203.11, changing

"Termination" in the last sentence to "Termination of Work."

7-703.8 Government Bills of Lading. Insert the clause in 7-702.9.

7-703.9 Allowable Cost and Payment.

(a) In accordance with 7-702.10, insert the clause therein.

(b) If desired, the following additional provision may be added after the first sentence of paragraph (j) of this clause.

After payment of an amount equal to eighty percent (80%) of the total estimated cost of performance of this contract set forth in the Schedule, further payment on account of allowable cost shall be withheld until a reserve of either one percent (1%) of such total estimated cost, or one hundred thousand dollars ($100,000) whichever is less, shall have been set aside.

7-703.9

ARMED SERVICES PROCUREMENT REGULATION