(e) Records and Reports. The Contractor shall maintain reasonable controls for proper administration of this clause and shall furnish such statements and information as may reasonably be requested by the Contracting Officer. The Government shall be afforded reasonable opportunity to examine the Contractor's books, records, and accounts.

(f) Default. If this contract is terminated for default, the Contractor shall, upon demand, pay to the Government the amount of unliquidated progress payments, less any amounts payable to the Contractor in accordance with the default clause.

(g) Reservation of Rights. The rights and remedies of the Government provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or under this contract.

§ 18-7.104-36 Preference for U.S.-flag air and ocean services.

Under the circumstances stated in Subpart 18-1.14, insert the clause set forth in § 18-1.1403 in the contract.

§ 18-7.104-38 Labor Surplus Area Subcontracting Program.

In accordance with the requirements of § 18-1.805-3(b), insert the clause set forth therein.

§ 18-7.104-40 Competition in subcontracting.

Insert the following clause in all negotiated contracts over $10,000, except in firm fixed-price contracts where award is on the basis of effective price competition, or where prices are established by law or regulation.

COMPETITION IN SUBCONTRACTING
(SEPTEMBER 1962)

The Contractor shall select subcontractors (including suppliers) on a competitive basis to the maximum practical extent consistent with the objectives and requirements of the contract.

direct costs of whatever nature claimed to have been incurred and anticipated to be incurred for the performance of this contract. The foregoing constitute "records" for the purposes of this clause.

(b) The Contractor's plants, or such part thereof as may be engaged in the performance of this contract, and his records shall be subject at all reasonable times to inspection and audit by the Contracting Officer or his authorized representative.

(c) The Contractor shall preserve and make available his records (i) until the expiration of 3 years from the date of final payment under this contract, and (ii) for such longer period, if any, as is required by applicable statute, or by other clauses of this contract, or by (A) or (B) below.

(A) If this contract is completely or partially terminated, the records relating to the work terminated shall be preserved and made available for a period of 3 years from the date of any resulting final settlement.

(B) Records which relate to (1) appeals under the "Disputes" clause of this contract or (ii) litigation or the settlement of claims arising out of the performance of this contract, shall be retained until such appeals, litigation, or claims have been disposed of.

(d) The Contractor shall insert the substance of this clause in each subcontract hereunder that is not on a firm fixed-price basis.

§ 18-7.104-50 Data requirements.

In accordance with the requirements of § 18-9.202, insert the clause set forth in § 18-9.202-1(e).

§ 18-7.104-51 Approval of contract.

Insert the following clause in the contract when approval thereof by the Director of Procurement is required.

APPROVAL OF CONTRACT (SEPTEMBER 1962)

This contract shall be subject to the written approval of the Director of Procurement, NASA Headquarters, or his duly authorized representative, and shall not be binding until so approved.

§ 18-7.104-56 Order of precedence.

The following clause may be modified to change the order or to add or delete items to meet the needs of a particular procurement. In procurements which are preceded by an invitation for bid, insert the following as a new item (b), “Bidding Instructions, Terms and Conditions of the Invitation for Bids". For procurements preceded by a request for proposal or quotation, insert the following as a new item (b), "Terms and Conditions of the Solicitation." In either case, redesignate the present paragraphs (b), (c), and (d), as (c), (d), and (e).

ORDER OF PRECEDENCE (NOVEMBER 1965)

In the event of an inconsistency in this contract, unless otherwise provided herein, the inconsistency shall be resolved by giving precedence in the following order: (a) The Schedule; (b) General Provisions; (c) the other provisions of the contract whether incorporated by reference or otherwise; and (d) the Specifications.

§ 18-7.104-57 Liability for Government property furnished for repair or other services.

In accordance with the requirements of 18-13.502-50, insert the clause set forth therein.

§ 18-7.104-58 Safety and health.

In accordance with the requirements of Subpart § 18-10.50, insert the clause set forth in § 18-10.5004.

§ 18-7.104-59 Nonuse of foreign-flag vessels engaged in Cuban or North Vietnam Trade.

In accordance with the requirements of § 18-1.1410, insert the clause set forth therein.

§ 18-7.104-60 Report on NASA sub

contracts.

In accordance with the requirements of § 18-16.904-3, insert the clause set forth therein.

§ 18-7.104-61

Rights in data for potentially hazardous items. In accordance with the requirements of § 18-9.204-52, insert the clause set forth in § 18-9.204-52(c).

§ 18-7.104-62 Potentially hazardous items.

In accordance with the requirements of § 18-7.351, insert the clause set forth therein.

§ 18-7.104-63 Disclosure of unsolicited proposals outside Government.

In accordance with the requirements of § 18-1.304–2(c) (3), insert the clause set forth therein.

§ 18-7.105 Additional clauses.

The clauses set forth in this § 18-7.105 shall be inserted in fixed-price supply contracts if it is desired to cover the subject matter thereof.

§ 18-7.105-1 Alterations in contract.

Alterations in contract provisions may be made only in accordance with the provisions of § 18-1.109. When alterations are necessary, they shall be set forth

either in the Schedule or on an attachment sheet, preceded by the following clause:

ALTERATIONS IN CONTRACT (SEPTEMBER 1962)

The following alterations have been made in the provisions of this contract.

§ 18-7.105-5 Liquidated damages.

When a liquidated damages provision is to be included in the contract, the following clause shall be inserted as paragraph (f) of the "Default" clause (see § 18-8.707) and the present paragraph (f) of that clause redesignated “(g).” In addition, an appropriate implementing provision setting forth the amount of liquidated damages shall be included in the Schedule.

(f) (1) In the event the Government exercises its right of termination as provided in paragraph (a) above, the Contractor shall be liable to the Government for excess costs as provided in paragraph (b) above and, in addition, for liquidated damages, in the amount set forth elsewhere in this contract, as fixed, agreed, and liquidated damages for each calendar day of delay, until such time as the Government may reasonably obtain delivery or performance of similar supplies or services.

(ii) If the contract is not so terminated, notwithstanding delay as provided in paragraph (a) above, the Contractor shall continue performance and be liable to the Government for such liquidated damages for each calendar day of delay until the supplies are delivered or services performed.

(iii) The Contractor shall not be liable for liquidated damages for delays due to causes which would relieve him from liability for excess costs as provided in paragraph (c) of this clause. (September 1962)

§ 18-7.105-6 Bill of materials.

A bill of materials consist 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, will be required only if the contracting officer determines that such bill is necessary to develop materials or components requirements for production and maintenance programs, or for other specified purposes. In such event, the contract shall specify, with respect to such bill, the following:

(a) The supplies or parts thereof to be covered by the bill of materials;

(b) The type of bill or bills (detailed, modified, expanded summary, or abbre

viated summary) to be furnished, with applicable instructions;

(c) The compensation to be paid the contractor for furnishing such bill and any revisions thereto, or a statement that the price of the item to which the bill relates includes compensation for the furnishing of such bill;

(d) The number and kind of copies of such bill to be furnished; and

(e) Delivery dates.

In such event, the contract shall also include the following clause:

BILL OF MATERIALS (SEPTEMBER 1962)

(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.

Where 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. § 18-7.105-8 Stop work orders.

(a) Use of clause. The clause set forth in paragraph (c) of this section is authorized for use in any negotiated fixed-price type contract under which work stoppage may be required for reasons such as advancements in the state of the art, performance or engineering break-throughs, or realignment of programs. This clause is not authorized for

use in research contracts with educational nonprofit institutions.

(b) Use of orders. (1) Inasmuch as stop work orders may result in increased costs to the Government by reason of standby costs, such orders will be issued only with prior approval of the procurement officer. Generally, use of a stop work order will be limited to those situations where it is advisable to suspend work pending a decision by the Government and a supplemental agreement providing for such suspension is not feasible. Although a stop work order may be used pending a decision to terminate for convenience, it will not be used pending a decision to terminate for default, nor will it be used in lieu of the issuance of a termination notice after a decision to terminate has been made.

(2) Stop work orders should include (i) a clear description of the work to be suspended; (ii) instructions as to the issuance of further orders by the contractor for material or services; (iii) guidance as to action to be taken on subcontracts; and (iv) other suggestions to the contractor for minimizing costs. Promptly after issuance, stop work orders should be discussed with the contractor and should be modified, if necessary, in the light of such discussions.

(3) As soon as feasible after a stop work order is issued, (i) the contract will be terminated; or (ii) the stop work order will either be canceled or-if necessary and if the contractor agrees-be extended beyond the period specified in the order. In any event, this must be done before the specified stop work period expires. When an extension of the stop work order is necessary, it shall be evidenced by a supplemental agreement. Any cancellation of a stop work order shall be subject to the same approvals as were required for the issuance of the order.

(c) Clause.

STOP WORK ORDER (JUNE 1965)

(a) The Contracting Officer may, at any time, by written order to the Contractor, require the Contractor to stop all, or any part, of the work called for by this contract for a period of ninety (90) days after the order is delivered to the Contractor, and for any further period to which the parties may agree. Any such order shall be specifically identified as a Stop Work Order issued pursuant to this clause. Upon receipt of such an order, the Contractor shall forthwith comply with its terms and take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the order during the

period of work stoppage. Within a period of ninety (90) days after a stop work order is delivered to the Contractor, or within any extension of that period to which the parties shall have agreed, the Contracting Officer shall either

(1) Cancel the stop work order, or

(ii) Terminate the work covered by such order as provided in the "Termination for Convenience" clause of this contract.

(b) If a stop work order issued under this clause is canceled or the period of the order or any extension thereof expires, the Contractor shall resume work. An equitable adjustment shall be made in the delivery schedule or contract price, or both, and the contract shall be modified in writing accordingly, if

(1) The stop work order results in an increase in the time required for, or in the Contractor's cost properly allocable to, the performance of any part of this contract, and

(ii) The Contractor asserts a claim for such adjustment within thirty (30) days after the end of the period of work stoppage: Provided, That, if the Contracting Officer decides the facts justify such action, he may receive and act upon any such claim asserted at any time prior to final payment under this contract.

Failure to agree to any adjustment shall be a dispute concerning a question of fact within the meaning of the "Disputes" clause of this contract.

(c) If a stop work order is not canceled and the work covered by such order is terminated for the convenience of the GoVernment, the reasonable costs resulting from the stop work order shall be allowed in arriving at the termination settlement.

§ 18-7.105-55 Commercial warranty.

The commercial warranty clauses set forth below are authorized for use in negotiated procurements when, in the discretion of the contracting officer, the benefits of warranties normally granted to a contractor's commercial customers should be obtained by the Government. These clauses are not appropriate for use in IFB's because bidders may offer different commercial warranties, thereby precluding equal evaluation of bids. Use of either clause (a) or clause (b), appropriate, is authorized.

COMMERCIAL WARRANTY (JUNE 1967)

as

(a) Notwithstanding the provisions of the "Inspection" clause of this contract, the Contractor agrees that the articles delivered under this contract shall be covered by the same warranties as the Contractor customarily offers in connection with the sale of these articles on the commercial market. In the event that differing warranties covering these articles are customarily offered to other purchasers by the Contractor, it is agreed that such warranties shall apply to this con

tract as are available to the Contractor's most favored purchaser.

WARRANTY (SEPTEMBER 1962)

(b) Notwithstanding the provisions of the "Inspection" clause of this contract, the Contractor agrees that the articles delivered under this contract shall be covered by the same warranties as the Contractor customarily offers in connection with the sale of these articles on the commercial market. In the event that differing warranties covering these articles are customarily offered to other purchasers by the Contractor, it is agreed that such warranties shall apply to this contract as are available to the Contractor's most favored purchaser. In addition to any other obligations imposed upon the Contractor under any such warranties, and regardless of whether a similar right is customarily offered to other purchasers, the Contractor shall, if so required by the Government within a reasonable time after the giving of notice of defect in accordance with such warranties, correct or replace the defective or nonconforming article with all possible speed at the Contractor's cost, including shipping costs, not exceeding usual charges, from the delivery point to the Contractor's plant and return.

The clause set forth in this section is authorized for use when, in the discretion of the contracting officer, the need for such a guaranty is felt to outweigh the price increase, if any, which the inclusion of such a clause might entail. The period of time within which notice of defect must be given may be varied.

GUARANTY (SEPTEMBER 1962)

Notwithstanding the provisions of the "Inspection" clause of this contract, the Contractor gurantees that at the time of delivery thereof the articles provided for under this contract will be free from any defects in material or workmanship and will conform to the requirements of this contract. Notice of any such defect or nonconformance shall be given by the Government to the Contractor within one (1) year of the delivery of the defective or nonconforming article. If required by the Government within a reasonable time after such notice, the Contractor shall with all possible speed correct or replace the defective or nonconforming article or part thereof. When such correction or replacement requires transportation of the article or part thereof, shipping costs, not exceeding usual charges, from the delivery point to the Contractor's plant and return, shall be borne by the Contractor; the Government shall bear all other shipping costs. This guaranty shall then continue as to corrected or replacing articles or if only parts of such articles are corrected or replaced, to such corrected or replacing parts, until one (1) year after date of redelivery. If the Gov

ernment does not require correction or replacement of a defective or nonconforming article, the Contractor, if required by the Contracting Officer within a reasonable time after the notice of defect or nonconformance, shall repay such portion of the contract price of the article as is equitable in the circumstances.

§ 18-7.106 Price escalation clauses (established prices).

This 18-7.106 sets forth uniform clauses for use when it is desired to provide for price escalation in the event of changes in the contractor's established prices. Each clause is preceded by a statement of the conditions under which it may be used.

§ 18-7.106-1 Escalation clause for basic steel, aluminum, brass, bronze, or copper mill products.

The "Price Escalation" clause set forth in this § 18-7.106-1 is authorized for use in advertised or negotiated fixed-price supply contracts for basic steel, aluminum, brass, bronze, or copper mill products, such as sheets, plates and bars, when an established price exists for the particular supply being procured. The percentage figure to be used in paragraph (d) (3) of this clause shall not exceed 10 percent.

PRICE ESCALATION (SEPTEMBER 1962)

(a) The Contractor warrants that the unit prices stated herein, excluding any part of the prices which reflects requirements for preservation, packaging and packing, beyond standard commercial practice, are not in excess of the Contractor's applicable established prices in effect on the date set for opening of bids (or the contract date, if this is a negotiated contract rather than one entered into by means of formal advertising) for like quantities of the supplies covered by this contract.

(b) The Contractor shall promptly notify the Contracting Officer as to the amount and effective date of each decrease in any established price, and each applicable unit price shall be decreased by the amount of the decrease in the applicable established price. Any such decrease in a unit price shall apply to those supplies delivered on and after the effective date of each applicable decrease in the Contractor's established price, and this contract shall be amended accordingly. The Contractor shall certify on each invoice submitted under the contract that each unit price stated therein reflects all decreases, if any, which the Contractor had made in the established price applicable thereto, since the date set for opening of bids (or the contract date, if this is a negotiated contract rather than one entered into by formal advertising), or shall certify on the final invoice that all

such decreases have been applied to supplies delivered on and after the effective date of each such decrease in the Contractor's established prices.

(c) The Contractor may from time to time after the date of this contract and during the performance hereof, by written notice to the Contracting Officer, request an upward adjustment in any of the contract unit prices to be effective as of a date to be specified by the Contractor. Such request shall be acted upon in accordance with the following provisions of this clause.

(d) An upward adjustment in a contract unit price may be made under this clause only in accordance with the following conditions.

(1) Such an upward adjustment shall be made only if the Contractor's applicable established price has increased subsequent to the date set for opening of bids (or the contract date, if this is a negotiated contract rather than one entered into by means of formal advertising).

(2) No unit price shall be increased by an amount greater than the amount of the increase in the Contractor's applicable established price.

(3) The aggregate of the increases in any unit price made under this clause shall not exceed percent of the original applicable contract unit price.

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(4) No adjusted unit price shall be effective earlier than the effective date of the increase in the applicable established price, but if the Contractor's request for adjustment is received by the Contracting Officer more than ten (10) days after the effective date of the increase in the Contractor's applicable rate, no adjusted unit price shall be effective earlier than the date of receipt by the Contracting Officer of such request. (5) No upward adjustment in unit prices hereunder shall apply to supplies which were required by the contract delivery schedule to be delivered prior to the effective date of the related increase in the applicable established price, unless the Contractor's failure to deliver supplies in accordance with the delivery schedule results from causes beyond the control and without the fault or negligence of the Contractor, within the meaning of paragraph (c) of the clause of this contract entitled "Default," in which case the contract shall be amended to make an equitable extension of the delivery

schedule.

(e) In the event the requested upward adjustment in any contract unit price is acceptable to the Contracting Officer, he shall so notify the Contractor, and the contract shall be amended accordingly. In the event the requested upward adjustment is not acceptable to the Contracting Officer, or if the Contracting Officer does not reach an agreement with the Contractor with respect to a price increase, the Contracting Officer may, within 30 days after receipt of the Contractor's request, cancel without liability to either party the Contractor's right to pro