§ 6-7.151-14 Price escalation.

The following price escalation clause is authorized for use in negotiated fixedprice supply contracts, described in § 6-3.404-3 for "commercial items" for which established prices exist and have been verified in accordance with criteria in § 1-3.807(b) (2) of this title. The clause may be modified for use with labor-hour contracts as described in § 1-3.406-2 of this title. In administering contracts containing this clause, Contracting Officers are cautioned to give immediate attention to requests for price escalation. According to paragraph (f) of the clause, a permissible request establishes a new contract price pending agreement or cancellation of contract.

PRICE ESCALATION

the

(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 contract date for like quantities of the supplies covered by this contract. The term "established price" as used in this clause is the net price after applying any applicable standard trade discounts offered by the Contractor from his list or catalog price.

(b) The Contractor shall promptly notify the Contracting Officer as to the amount and effective date of each decrease in any applicable established price, and each applicable contract unit price shall be decreased by the same percentage that the applicable established price is decreased. 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 contract date; 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 estabHished 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 contract date.

(2) No unit price shall be increased by a percentage greater than the percentage 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 appli

cable unit price.

(4) No adjusted unit price shall be effective earlier than the effective date of the increase in the applicable established price, or the date of receipt by the Contracting Officer of the Contractor's request for adjustment, whichever is the later.

(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 increased in the applicable established price, unless the Contractor's failure to delivery 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 proceed with performance of that portion of the contract which is undelivered at the time of such cancellation.

(f) During the period after the Contractor has requested an upward adjustment, and prior to an agreement between the parties with respect to the request, or cancellation of the contract pursuant to paragraph (e), the Contractor shall continue deliveries according to the terms of the contract. The Contractor shall be paid for such deliveries at the applicable increased unit prices as requested; provided, that such requested increases satisfy all the conditions and do not exceed the limitations of paragraph (d), and provided further, that if the parties agree on an increase less than that requested, payments previously made at the requested amount shall be adjusted accordingly. If the Contracting Officer neither reaches an agreement with the Contractor on the requested adjustment, nor cancels the contract, the Contractor shall continue deliv

(a) The clause below provides a means for the fair and expeditious administrative settlement of claims arising out of certain delays and interruptions in the contract work caused by the acts, or failures to act, of the contracting officer where the contract does not otherwise specifically provide for an equitable adjustment because of such delay or interruption (e.g., Government-furnished property, changes, etc.).

(b) The clause does not authorize the contracting officer to order a suspension, delay or interruption of the work and it shall not be used as the basis for or to justify such an order.

(c) When the contracting officer has notice of an unordered delay or interruption covered by the clause, he will act to end it or take other appropriate action as soon as practicable.

(d) The contracting officer shall retain in the file a record of all negotiations leading to any adjustment made under the clause, including cost or pricing data.

GOVERNMENT DELAY OF WORK

(a) If the performance of all or any part of the work is delayed or interrupted by an act of the Contracting Officer in the administration of this contract, which act is not expressly or impliedly authorized by this contract, or by his failure to act within the time specified in this contract (or within a reasonable time if no time is specified), an adjustment (excluding profit) shall be made for any increase in the cost of performance of this contract caused by such delay or interruption and the contract modified in writing accordingly. Adjustment shall be made also in the delivery or performance dates and any other contractual provision affected by such delay or interruption. However, no adjustment shall be made under this clause for any delay or interruption (i) to the extent that performance would have been delayed or interrupted by any other cause, including the fault or negligence of the Contractor; or (ii) for which an adjustment is provided or excluded under any other provision of this contract.

(b) No claim under this clause shall be allowed (1) for any costs incurred more than twenty (20) days before the Contractor shall have notified the Contracting Officer in writing of the act or failure to act involved; and (ii) unless the claim, in an amount stated, is asserted in writing as soon as practicable

after the termination of such delay or interruption, but not later than the date of final payment under the contract.

§ 6-7.151-16 Indemnification.

In view of the established policy that the Government is a self-insurer, as provided in § 1-10.301 of this title, contractors should not ordinarily be required to assume risks which a private buyer would guard against through insurance. There may be occasions, however, when a contractor's assumption of such risks is in the best interest of the Government and the following clause is authorized for use on those occasions. In the determination of it's use, the Contracting Officer should weigh the advantages it provides against the likelihood of resulting increased prices.

INDEMNIFICATION

The Contractor expressly agrees to indemnify and to save the Government, its officers, agents, servants, and employees harmless from and against any claim, loss, damages, injury, and liability, however caused, resulting from or arising out of the Contractor's fault or negligence in connection with the performance of work under this contract. Further, it is agreed that any negligence or alleged negligence of the Government, its officers, agents, servants and employees, shall not be a bar to a claim for indemnification unless the act or omission of the Government, its officers, agents, servants and employees is the sole, competent, and producing cause of such claim, loss, damages, injury, or liability.

§ 6-7.151-17 Commercial warranty.

COMMERCIAL WARRANTY

The Contractor agrees that the supplies or services furnished under this contract shall be covered by the most favorable commercial warranties the Contractor gives to any customer for such supplies or services and that the rights and remedies provided herein are in addition to and do not limit any rights afforded to the Government by any other clause of this contract. § 6-7.151-18 Price warranty.

PRICE WARRANTY

The Contractor warrants that the prices of the items set forth herein do not exceed those charged by the Contractor to any other customer purchasing the same items in like or comparable quantities.

§ 6-7.151-19 Availability of funds.

The following clause is applicable to certain types of contracts whose performance periods cross fiscal years. These contracts are identified in Subpart 6-3.4 of this chapter.

AVAILABILITY OF FUNDS

Funds are not presently available for performance under this contract beyond June 30, 19. The Government's obligation for performance of this contract beyond this date is contingent upon the availability of appropriated funds from which payment for the contract purposes can be made. No legal liability on the part of the Government for payment of any money for performance under this contract beyond June 30, 19--, shall arise unless and until funds are made available to the Contracting Officer for such performance and notice of such availability, to be confirmed in writing by the Contracting Officer, is given to the Contractor.

(a) With respect to motor vehicles purchased by the Department of State or the U.S. Information Agency for use by such agencies in foreign countries, the Secretary of the Treasury has granted an exemption from the federal excise tax imposed by 26 U.S.C. 4061(a) provided such vehicles are exported from the United States by such Agencies within a period of 6 months from the date of delivery of such vehicles to the agencies, notwithstanding any use made by such agencies of the vehicles within the United States during the 6-month period. The contract for sale of such vehicles must include a statement to the effect that the sale of the vehicles is made for the exclusive use of the United States and qualifies for the exemption under order of the Secretary of the Treasury dated May 6, 1964 (29 F.R. 6254). The manufacturers must be furnished proof of export within 6 months after the sale.

(b) Taxable articles purchased for presentation abroad as gifts to foreign dignitaries and taxable articles purchased for presentation as gifts to foreign

dignitaries visiting in the United States but which are almost immediately taken out of the United States may be exempt from any retailers or manufacturers excise taxes in accordance with letter of October 18, 1963 from Chief, Excise Tax Branch, Internal Revenue Service on file in Supply and Transportation Services Division.

(c) With respect to purchases from vendors in the United States for export to a Foreign Service Post, the following statement will be included in purchase orders for items subject to excise taxes:

This is to certify that the item(s) covered by this purchase order is/are for export solely for the use of the American Foreign Service post shown above. It is, therefore, requested that the extra signed copy of the purchase order furnished herewith be accepted as evidence of intent to export. Final proof of exportation may be obtained from the U.S. Despatch Agent, handling the shipment; such proof to be accepted in lieu of payment of excise tax.

[31 F.R. 6624, May 4, 1966]

Subpart 6-11.3-State and Local
Taxes

§ 6-11.301 Applicability.

In certain instances purchases by posts are exempt from various taxes in foreign countries. It is incumbent upon procurement officers to ascertain such exemptions and to take maximum advantage of them.

[29 F.R. 12076, Aug. 25, 1964]

(a) In acting under this designation, the ASBCA will follow the rules in 32 CFR 30.1 (Appendix A) Part 2, which are hereby adopted and set forth in paragraph (b) of this section, except as amended. Rule 31 is superseded by the Idate of effectiveness of this part upon publication. Part 1 of Appendix A, containing the Charter of the ASBCA, is not included in this paragraph. References to military departments and Secretaries thereof are amended to refer to the Department of State and either the Secretary of State or the Assistant Secretary for Administration, or their duly authorized representative or Board, as appropriate. Amendments, applicable only to appeals arising from Department of State contracts, concerning other provisions of the Rules are identified by the caption (STATE).

(b) Part 2-Rules:

PREFACE TO RULES OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS

I. SUMMARY OF PERTINENT CHARTER PROVISIONS

The Armed Services Board of Contract Appeals is the authorized representative of the Secretary of State, the Assistant Secretary for Administration, in hearing, considering, and determining as fully and finally as might either official:

(a) Appeais by contractors from decisions of contracting officers or their authorized representatives or other authorities on disputed questions, taken pursuant to the provision of contracts requiring the determination of such appeals by the Secretary of State or the Assistant Secretary for Administration or their duly authorized representative or board; or

(b) Appeals by contractors taken pursuant to the provisions of any directive whereby the Secretary of State or the Assistant Secretary for Administration has granted a right of appeal not contained in the contract.

When an appeal is taken pursuant to a Disputes clause in a contract which limits appeals to disputes concerning questions of fact, the Board may in its discretion hear, consider, and decide all questions of law necessary for the complete adjudication of the issue. In the consideration of an appeal, should it appear that a claim is involved which is not cognizable under the terms of the contract, the Board may make findings of fact with respect to such a claim without expressing an opinion on the question of liability.

When a contract requires the Secretary of State or the Assistant Secretary for Administration, personally to render a decision on the matter in dispute, the Armed Services Board of Contract Appeals makes and submits findings and recommendation to the appropriate official with respect thereto.

There are a number of divisions of the Armed Services Board of Contract Appeals established by the Chairman of the Board in such manner as to provide for the most effective and expeditious handling of appeals. Appeals are assigned to the divisions for decision without regard to the procuring authority which entered into the contract involved. Hearing may be held by a designated member, or by a duly authorized examiner. The decision of a majority of a division constitutes the decision of the Board provided that the Chairman and two Vice Chairmen jointly signify their approval of the decision. If a majority of the members of a division is unable to agree on a decision, or if the Chairman or one or more of the Vice Chairmen does not signify approval of the decision, determination of the appeal is by the Chairman and Vice Chairmen. A decision by a majority of those individuals then constitutes the decision of the Board.

On request of the appellant, an appeal involving $5,000 or less is decided as provided in the Optional Accelerated Procedure set forth in Rule 12 of the Board.

II. STATEMENT OF PURPOSE

Emphasis is placed upon the sound administration of these rules in specific cases, because it is impracticable to articulate a rule to fit every possible circumstance which may be encountered. These rules will be interpreted so as to secure just and inexpensive determination of appeals without unnecessary delay.

Preliminary procedures are available to encourage full disclosure of relevant and material facts and to discourage unwarranted surprise.

All time limitations specified for various procedural actions are computed as maximums, and are not to be fully exhausted if the action described can be accomplished in a lesser period. These time limitations are similarly eligible for extension in appropriate circumstances, on good cause shown. Whenever reference is made to contractor, appellant, contracting officer, respondent and parties, this shall include respective counsel

for the parties, as soon as appropriate Notices of Appearance have been filed with the Board.

PRELIMINARY PROCEDURES

1. Appeals, how taken. Notice of an appeal must be in writing, and the original, together with two copies, may be filed with the contracting officer from whose decision the appeal is taken. The notice of appeal must be mailed or otherwise filed within the time specified therefor in the contract or allowed by applicable provision of directive or law. 2. Notice of appeal, contents of. A notice of appeal should indicate that an appeal is thereby intended and should identify the contract (by number), the department and agency or bureau cognizant of the dispute, and the decision from which the appeal is taken. The notice of appeal should be signed personally by the appellant (the contractor making the appeal), or by an officer of the appellant corporation or member of the appellant firm, or by the contractor's duly authorized representative or attorney. The complaint referred to in Rule 6 may be filed with the notice of appeal, or the appellant may designate the notice of appeal as a complaint, if it otherwise fulfills the requirements of a complaint.

3. Forwarding of appeals (STATE). When a notice of appeal in any form has been received by the contracting officer, he shall endorse thereon the date of mailing (or date of receipt, if otherwise conveyed) and within 10 days shall forward said notice of appeal to the Board, with copies to the Supply and Transportation Services Division and the Legal Adviser of the Department of State. Following receipt by the Board of the original notice of an appeal (whether through the contracting officer or otherwise), the contractor, the contracting officer, the Supply and Transportation Services Division and the Legal Adviser of the Department of State will promptly be advised of its receipt, and the contractor will be furnished a copy of these rules.

4. Duties of the contracting officer (STATE). Following receipt of a notice of appeal, or advice that an appeal has been filed, the contracting officer shall promptly, and in any event within 30 days, compile and transmit to the Supply and Transportation Services Division copies of all documents pertinent to the appeal, including the following:

(a) The findings of fact and the decision from which the appeal is taken, and the letter or letters or other documents of claim in response to which the decision was issued; (b) The contract, and pertinent plans, and specifications, amendments, change orders;

(c) Correspondence between the parties and other data pertinent to the appeal;

(d) Transcripts of any testimony taken during the course of proceedings, and affidavits or statements of any witnesses on the