required by this paragraph (e) have been followed throughout the reporting period; and

(B) All Subject Inventions have been disclosed or that there are no such inventions; and

(iii) A final report, within 3 months after completion of the contract work, listing all Subject Inventions or certifying that there were no such inventions.

(3) The Contractor shall obtain patent agreements to effectuate the provisions of this clause from all persons in his employ who perform any part of the work under this contract except nontechnical personnel, such as clerical employees and manual laborers.

(4) The Contractor agrees that the Government may duplicate and disclose Subject Invention disclosures and all other reports and papers furnished or required to be furnished pursuant to this clause.

(f) Forfeiture or rights in unreported Subject Inventions. (1) The Contractor shall forfeit to the Government all rights in any Subject Invention which he fails to disclose to the Contracting Officer within 6 months after the time he:

(i) Files or causes to be filed a United States or foreign application thereon; or

(ii) Submits the final report required by paragraph (e)(2)(iii) of this clause, whichever is later.

(2) However, the Contractor shall not forfeit rights in a Subject Invention if, within the time specified in (1)(i) or (1)(ii) of this paragraph (f), the Contractor:

(i) Prepared a written decision based upon a review of the record that the invention was neither conceived nor first actually reduced to practice in the course of or under the contract; or

(ii) Contending that the invention is not a Subject Invention, he nevertheless discloses the invention and all facts pertinent to his contention to the Contracting Officer; or

(iii) Establishes that the failure to disclose did not result from his fault or negligence. (3) Pending written assignment of the patent applications and patents on a Subject Invention determined by the Contracting Officer to be forfeited (such determination to be a final decision under the Disputes Clause), the Contractor shall be deemed to hold the invention and the patent applications and patents pertaining thereto in trust for the Government. The forfeiture provision of this paragraph (f) shall be in addition to and shall not supersede other rights and remedies which the Government may have with respect to Subject Inventions.

(g) Examination of records relating to inventions. (1) The Contracting Officer or his authorized representative until the expiration of 3 years after final payment under this contract shall have the right to exam

ine any books (including laboratory notebooks), records, documents, and other supporting data of the Contractor which the Contracting Officer reasonably deems pertinent to the discovery or identification of Subject Inventions or to determine compliance with the requirements of this clause.

(2) The Contracting Officer shall have the right to review all books (including laboratory notebooks), records and documents of the Contractor relating to the conception or first actual reduction to practice of inventions in the same field of technology as the work under this contract to determine whether any such inventions are Subject Inventions if the Contractor refuses or fails to:

(i) Establish the procedures of paragraph (e)(1) of this clause; or

or

(ii) Maintain and follow such procedures;

(iii) Correct or eliminate any material deficiency in the procedures within thirty (30) days after the Contracting Officer notifies the Contractor of such a deficiency.

(h) Withholding of payment (Not applicable to Subcontracts). (1) Any time before final payment of the amount of this contract, the Contracting Officer may, if he deems such action warranted, withhold payment until a reserve not exceeding $50,000 or 5 percent of the amount of this contract, whichever is less, shall have been set aside if in his opinion the Contractor fails to:

(i) Establish, maintain, and follow effective procedures for identifying and disclosing Subject Inventions pursuant to paragraph (e)(1) of this clause; or

(ii) Disclose any Subject Invention pursuant to paragraph (e)(2)(i) of this clause; or (iii) Deliver acceptable interim reports pursuant to paragraph (e)(2)(ii) of this clause; or

(iv) Provide the information regarding subcontracts pursuant to paragraph (i)(5) of this clause.

The reserve or balance shall be withheld until the Contracting Officer has determined that the Contractor has rectified whatever deficiencies exist and has delivered all reports, disclosures, and other information required by this clause.

(2) Final payment under this contract shall not be made before the Contractor delivers to the Contracting Officer all disclosures of Subject Inventions required by paragraph (e)(2)(i) of this clause, and an acceptable final report pursuant to (e)(2)(iii) of this clause.

(3) The Contracting Officer may, in his discretion, decrease or increase the sums withheld up to the maximum authorized above. If the Contractor is a nonprofit organization the maximum amount that may be withheld under this paragraph shall not

exceed $50,000 or 1 percent of the amount of this contract whichever is less. No amount shall be withheld under this paragraph while the amount specified by this paragraph is being withheld under other provisions of the contract. The withholding of any amount or subsequent payment thereof shall not be construed as a waiver of any rights accruing to the Government under this contract.

(i) Subcontracts. (1) For the purpose of this paragraph the term "Contractor" means the party awarding a subcontract and the term "Subcontractor" means the party being awarded a subcontract, regardless of tier.

(2) Unless otherwise authorized or directed by the Government Contracting Officer, the Contractor shall include this Patent Rights clause modified to identify the parties in any subcontract hereunder if a purpose of the subcontract is the conduct of experimental, developmental, or research work. In the event of refusal by a Subcontractor to accept this clause, or if in the opinion of the Contractor this clause is inconsistent with the policy set forth in 41 CFR 1-9.107-3, the Contractor:

(i) Shall promptly submit a written notice to the Government Contracting Officer setting forth reasons for the Subcontractor's refusal and other pertinent information which may expedite disposition of the matter; and

(ii) Shall not proceed with the subcontract without the written authorization of the Government Contracting Officer.

(3) The Contractor shall not, in any subcontract or by using a subcontract as consideration therefor, acquire any rights in his Subcontractor's Subject Invention for his own use (as distinguished from such rights as may be required solely to fulfill his contract obligations to the Government in the performance of this contract).

(4) All invention disclosures, reports, instruments, and other information required to be furnished by the Subcontractor to the Government Contracting Officer under the provisions of a Patent Rights clause in any subcontract hereunder may, in the discretion of the Government Contracting Officer, be furnished to the Contractor for transmission to the Government Contracting Officer.

(5) The Contractor shall promptly notify the Government Contracting Officer in writing upon the award of any subcontract containing a Patent Rights clause by identifying the Subcontractor, the work to be performed under the subcontract, and the dates of award and estimated completion. Upon request of the Government Contracting Officer, the Contractor shall furnish a copy of the subcontract. If there are no subcontracts containing Patent Rights Clauses, a negative report shall be included in the

final report submitted pursuant to paragraph (e)(2)(iii) of this clause.

(6) The Contractor shall identify all Subject Inventions of the Subcontractor of which he acquires knowledge in the performance of this contract and shall notify the Government Contracting Officer promptly upon the identification of the inventions.

(7) It is understood that the Government is a third party beneficiary of any subcontract clause granting rights to the Government in Subject Inventions, and the Contractor hereby assigns to the Government all rights that he would have to enforce the Subcontractor's obligations for the benefit of the Government with respect to Subject Inventions. The Contractor shall not be obligated to enforce the agreements of any Subcontractor hereunder relating to the obligations of the Subcontractor to the Government in regard to Subject Inventions.

21. PUBLICATION AND PUBLICITY

(a) Unless otherwise specified in this contract, the Contractor is encouraged to publish and make available through accepted channels the results of its work under this contract. A copy of each article submitted by the Contractor for publication shall be promptly sent to the Project Officer. The Contractor shall also inform the Project Officer when the article or other work is published and furnish a copy of it as finally published.

(b) The Contractor shall acknowledge the support of the Department of Health and Human Services whenever publicizing the work under this contract in any media. To effectuate the foregoing, the Contractor shall include in any publication resulting from work performed under this contract an acknowledgement substantially as follows:

"This project has been funded at least in part with Federal funds from the Department of Health and Human Services under contract number The contents of

this publication do not necessarily reflect the views or policies of the Department of Health and Human Services, nor does mention of trade names, commercial products, or organizations imply endorsement by the U.S. Government."

22. KEY PERSONNEL (Text of this clause is set forth in FPR 17.404-6.)

23. LITIGATION AND CLAIMS

The Contractor shall give the Contracting Officer immediate notice in writing of (a) any action, including any proceeding before an administrative agency, filed against the Contractor arising out of the performance of this contract, including, but not limited

to, the performance of any subcontract hereunder; and (b) any claim against the Contractor the cost and expense of which is allowable under the clause entitled, "Allowable Cost and Fixed Fee." Except as otherwise directed by the Contracting Officer, the Contractor shall furnish immediately to the Contracting Officer copies of all pertinent papers received by the Contractor with respect to such action or claim. To the extent not in conflict with any applicable policy of insurance, the Contractor may, with the Contracting Officer's approval, settle any such action or claim. If required by the Contracting Officer, the Contractor shall (a) effect an assignment and subrogation in favor of the Government of all the Contractor's rights and claims (except those against the Government) arising out of any such action or claim against the Contractor; and (b) authorize representatives of the Government to settle or defend any such action or claim and to represent the Contractor in, or to take charge of, any action. If the settlement or defense of an action or claim is undertaken by the Government, the Contractor shall furnish all reasonable assistance in effecting a settlement or asserting a defense. Where an action against the Contractor is not covered by a policy of insurance, the Contractor shall, with the approval of the Contracting Officer, proceed with the defense of the action in good faith. The Government shall not be liable for the expense or for any costs resulting from the loss thereof of defending any action to the extent that the Contractor would have been compensated by insurance which was required by law or regulation or by written direction of the Contracting Officer, but which the Contractor failed to secure through its own fault or negligence. In any event, unless otherwise expressly provided in this contract, the Contractor shall not be reimbursed or indemnified by the Government for any liability, loss, cost, or expense, which the Contractor may incur or be subject to by reason of any loss, injury, or damage to the person or to real or personal property of any third parties as may accrue during or arise from the performance of this contract.

24. REQUIRED INSURANCE

(a) The Contractor shall procure and maintain such insurance as is required by law or regulation, including, but not limited to, the requirements of Subpart 1-10.5 of the Federal Procurement Regulations (41 CFR 1-10.5), or by the written direction of the Contracting Officer. Prior written approval of the Contracting Officer shall be required with respect to any insurance policy the premiums for which the Contractor proposes to treat as a direct cost under this contract and with respect to any pro

posed qualified program of self-insurance. The terms of any other insurance policy shall be submitted to the Contracting Officer for approval upon request.

(b) Unless otherwise authorized in writing by the Contracting Officer, the Contractor shall not procure or maintain for its own protection any insurance covering loss or destruction of or damage to Government Property.

25. PAYMENT FOR OVERTIME

(Text of this clause is set forth in FPR 17.402-28.)

26. FOREIGN TRAVEL

Foreign travel shall not be performed without the prior written approval of the Contracting Officer. As used in this clause, "Foreign Travel" means travel outside the United States, its Territories and Possessions, and Canada.

27. FEDERAL REPORTS ACT

In the event that it subsequently becomes a contractual requirement to collect or record information calling either for answers to identical questions from 10 or more persons other than Federal employees, or information from Federal employees which is to be used for statistical compilations of general public interest, the Federal Reports Act shall apply to this contract. No plan, questionnaire, interview guide or other similar device for collecting information (whether repetitive or single-time) may be used without first obtaining clearance from the Office of Management and Budget (OMB).

The Contractor shall obtain the required OMB clearance through the Project Officer before expending any funds or making public contracts for the collection of data. The authority to expend funds and to proIceed with the collection of data shall be in writing by the Contracting Officer. The Contractor must plan at least 90 days for OMB clearance. Excessive delay caused by the Government which arises out of causes beyond the control without the fault or negligence of the Contractor will be considered in accordance with Clause 14, Excusable Delays.

28. PRINTING

Unless otherwise specified in this contract, the Contractor shall not engage in, nor subcontract for, any printing (as that term is defined in title I of the Government Printing and Binding Regulations in effect on the effective date of this contract) in connection with the performance of work under this contract: Provided, however, That performance of a requirement under this contract involving the reproduction of less than 5,000 production units of any one

13-133 0-83--17

page, or less than 25,000 production units in the aggregate of multiple pages, will not be deemed to be printing. A production unit is defined as one sheet, size 8 by 10 and 1⁄2 inches, one side only, one color.

29. SERVICES OF CONSULTANTS

Except as otherwise expressly provided elsewhere in this contract, and notwithstanding the provisions of the clause of this contract entitled "Subcontracts," the prior written approval of the Contracting Officer shall be required:

(a) Whenever any employee of the Contractor is to be reimbursed as a "consultant" under this contract; and

(b) For the utilization of the services of any consultant under this contract exceeding the daily rate set forth elsewhere in this contract, or if no amount is set forth, $100.00, exclusive of travel costs, or where the services of any consultant under this contract will exceed ten days in any calendar year.

Whenever Contracting Officer approval is required, the Contractor will obtain and furnish to the Contracting Officer information concerning the need for such consultant services and the reasonableness of the fees to be paid, including, but not limited to, whether fees to be paid to any consultant exceed the lowest fee charged by such consultant to others for performing consultant services of a similar nature.

30. CONSULTANT OR OTHER COMPARABLE EMPLOYMENT SERVICES OF CONTRACTOR EMPLOY

EES

The Contractor shall require all employees who are receiving 50 percent or more of their regular annual compensation under the terms of this contract to disclose to the Contractor all consultant or other comparable employment services which the employees propose to undertake for others. The Contractor shall advise the Contracting Officer of all information obtained from such disclosures (which information shall be treated with confidentiality by the Contracting Officer); and shall advise the Contracting Officer of the nature and extent of any work such employees are undertaking under any other contract the Contractor may be performing for the Department. With respect to any employee who will be employed on a full-time annual basis on the work under this contract, the Contractor will require, as a condition of his employment on such work, that the employee will not perform consultant or other comparable employment services for another contractor under a cost-reimbursement type contract with the Department, except with the prior approval of the Contractor who shall notify the Contracting Officer of such approval.

31. ASSIGNMENT OF CLAIMS

(Text of this clause is set forth in FPR 130.703.)

32. CONTRACT WORK HOURS AND SAFETY STANDARDS ACT-OVERTIME COMPENSATION (Text of this clause is set forth in FPR 112.303.)

33. WALSH-HEALEY PUBLIC CONTRACT ACT (Text of this clause is set forth in FPR 112.605.)

34. EQUAL OPPORTUNITY

(Text of this clause is set forth in FPR 112.803-2.)

35. CONVICT LABOR

(Text of this clause is set forth in FPR 112.203.)

36. OFFICIALS NOT TO BENEFIT (Text of this clause is set forth in FPR 17.101-19.)

37. COVENANT AGAINST CONTINGENT FEES (Text of this clause is set forth in FPR 11.503.)

38. BUY AMERICAN ACT SUPPLY AND SERVICE CONTRACTS (Text of this clause is set forth in FPR 16.104-5.)

39. UTILIZATION OF SMALL BUSINESS CONCERNS (Text of this clause is set forth in FPR 11.710-3(a).)

40. UTILIZATION OF LABOR SURPLUS AREA
CONCERNS

(Text of this clause is set forth in FPR 11.805-3(a).)

41. EXAMINATION OF RECORDS BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES

The provisions of clause 8 "Examination of Records by Comptroller General" are extended to provide equal rights to authorized representatives of the Secretary and to the Contracting Officer.

42. UTILIZATION OF MINORITY BUSINESS ENTERPRISES

(Text of this clause is set forth in FPR 11.1310-2.)

43. PAYMENT OF INTEREST ON CONTRACTOR'S CLAIMS

(Text of this clause is set forth in FPR 11.322.)

44. LISTING OF EMPLOYMENT OPENINGS (Text of this clause is set forth in FPR 112.1102-2.)

45. COMPETITION IN SUBCONTRACTING (Text of this clause is set forth in FPR 17.202-30.)

46. CLEAN AIR AND WATER

(Text of this clause is set forth in FPR 11.2302-2.)

47. EMPLOYMENT OF THE HANDICAPPED (Text of this clause is set forth in FPR 112.1102-2.)

[36 FR 23060, Dec. 3, 1971, as amended at 37 FR 10443, May 23, 1972; 39 FR 14340, Apr. 23, 1974; 41 FR 41697, Sept. 23, 1976]

Subpart 3-16.50-Forms for Negotiated Procurement

SOURCE: 44 FR 36971, June 25, 1979, unless otherwise noted.

§ 3-16.5000 Scope of subpart.

(a) This subpart prescribes forms to be used in procuring:

(1) Supplies, equipment, and services by negotiation when authorized under Subpart 3-3.2;

(2) Experimental, developmental or research work and related services and property; and

(3) The conduct of studies or surveys.

(b) Excluded from the scope of this subpart are:

(1) Purchases that do not exceed $10,000—small purchases (See Subparts 1-3.6 and 3-3.6);

(2) Contracts for the construction, alteration, or repair of buildings, bridges, roads, or other real property (See Subpart 1-16.4) or the leasing of real property (See Subpart 1-16.6);

(3) Contracts for the procurement of architect-engineer professional services by negotiation (See Subpart 116.7).

§ 3-16.5001 [Reserved]

§ 3-16.5002 Contract forms.

§ 3-16.5002-1 Negotiated Contract (Form HHS-554).

Negotiated Contract, Form HHS554, is the cover page of the contract and must be executed to reflect

(a) The following procedures are applicable to the incorporation of General Provisions into Request for Proposals (RFP's) and contracts by reference.

(1) Request for proposals (RFP's). Copies of the contract General Provisions will no longer be included in RFP's. The synopsis to be published in the Commerce Business Daily and the resultant RFP will include a statement identifying the contract General Provisions to be used (Form HHS-314, 315, -315A, or -316) and will state an address where a copy of the General Provisions may be obtained by the prospective offeror.

(2) Contractual documents. Copies of the contract General Provisions will be attached to only those contractual documents that have special significance; i.e., the contractor's copy and the official contract file copy.

(b) The following are the applicable General Provisions to be used in contracts covered by this Subpart 3-16.50.

(1) Form HHS-314 (Rev. 9/76) General Provisions for Negotiated FixedPrice Research and Development Contract. It is noted that, with the deletion of Clause 17, "Patent Rights,"