Prior Amendments 1961: 26 F.R. 9638, Oct. 12. 1963: 28 F.R. 2582, Mar. 16. § 7.303-11 Small Business Subcontracting Program. In accordance with the requirements of § 1.707-3(b) of this subchapter, insert the clause set forth therein. [27 F.R. 3451, Apr. 11, 1962] § 7.303-16 Price reduction for defective cost or pricing data. In accordance with the requirements of § 7.104-29, insert the appropriate clause set forth therein. [28 F.R. 2107, Mar. 5, 1963] Prior Amendments 1961: 26 F.R. 2610, Mar. 28. § 7.303-17 Ground and flight risks. In all negotiated fixed-price type contracts for the production, modification, maintenance, or overhaul of aircraft, insert the clause set forth in § 10.404 of this chapter. [26 F.R. 9639, Oct. 12, 1961] § 7.303-18 Duty-free entry. In accordance with the requirements of § 6.603-2 of this chapter, insert either or both of the clauses set forth in § 6.603-3 of this chapter, as appropriate. [27 F.R. 11656, Nov. 27, 1962] In accordance with the requirements of § 11.403-2 of this chapter, in contracts. to be performed outside the United States, its possessions and Puerto Rico, insert one of the clauses set forth in paragraphs (a) and (b) thereof. [26 F.R. 9639, Oct. 12, 1961] § 7.303-21 Advance payments. When advance payments are to be made in accordance with Subpart D, Part 163 of this chapter, insert the appropriate clause as set forth in § 163.64-2 of this chapter. [26 F.R. 9639, Oct. 12, 1961] § 7.303-22 Workmen's insurance overseas. compensation In accordance with the requirements of § 1.315 of this chapter, insert the clause set forth therein. [27 FR. 1708, Feb. 22, 1962] § 7.303-25 Labor Surplus Area Subcontracting Program. In accordance with the requirementsof § 1.805-3 (b) of this subchapter, insert the clause set forth therein. [27 F.R. 3451, Apr. 11, 1962] § 7.303-261 Interest. In accordance with the requirements of §§ 163.118 and 163.119 of this chapter, insert the clause set forth in § 163.118 of this chapter. [27 F.R. 3451, Apr. 11, 1962] Competition in subcontract In accordance with the requirements of § 7.104-40, insert the contract clause set forth therein. [27 F.R. 6134, June 29, 1962] 1 Appears as § 1.303-26. In accordance with the requirements of § 7.104-41, insert the appropriate clause set forth therein. [28 F.R. 2107, Mar. 5, 1963] § 7.303-29 Subcontractor cost and pricing data. In accordance with the requirements of § 7.104-42, insert the appropriate clause set forth therein. [28 F.R. 2107, Mar. 5, 1963] § 7.303-30 United States Products (Military Assistance Program). In accordance with the requirements of § 6.703 of this chapter, insert the contract clause set forth in § 6.703-4 of this chapter. [28 F.R. 2582, Mar. 16, 1963] § 7.303-31 Value engineering incentive. In accordance with the requirements of § 1.1702 of this chapter, insert the applicable clause set forth in § 1.1705-1 of this chapter. [28 F.R. 2582, Mar. 16, 1963] § 7.303-32 Value engineering program requirement. In accordance with the requirements of § 1.1703 of this chapter, insert the clause set forth in § 1.1705-2 of this chapter. [28 F.R. 2582, Mar. 16, 1963] § 7.303-33 Value engineering program requirement with incentive. In accordance with the requirements of § 1.1703 of this chapter, insert the applicable clause set forth in § 1.1705–3 of this chapter. [28 F.R. 2582, Mar. 16, 1963] The Contracting Officer may at any time, by a written order, and without notice to the sureties, if any, make changes, within the general scope of this contract, in any one or more of the following: (i) drawings, designs, or specifications, (ii) method of shipment or packing, (iii) place of inspection, delivery, or acceptance, and (iv) the amount of Government-furnished property. If any such change causes an increase or decrease in the cost of, or the time required for performance of, this contract, or otherwise affects any other provisions of this contract, whether changed or not changed by any such order, an equitable adjustment shall be made (i) in the contract price or time of performance, or both, and (ii) in such other provisions of the contract as may be so affected, and the contract shall be modified in writing accordingly. Any claim by the Contractor for adjustment under this clause must be asserted within thirty (30) days from the date of receipt by the Contractor of the notification of change; provided, however, that the Contracting Officer, if he decides that the facts justify such action, 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 clause of this contract entitled "Disputes". However, nothing in this clause shall excuse the Contractor from proceeding with the contract as changed. In the foregoing clause, the period of "thirty (30) days" within which any claim for adjustment must be asserted, may be varied in accordance with Departmental procedures. In accordance with 10 U.S.C. 2306(f), prior to the pricing of any change order that is expected to exceed $100,000, except where the price is based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation, the contracting officer shall require the contractor to furnish a Certificate of Current Cost or Pricing Data (see § 3.807-4 of this chapter) and shall assure that the contract includes or is modified to include a defective pricing data clause (see § 7.104-29). [28 F.R. 4887, May 16, 1963] § 7.304-8 Liquidated damages. The contract clause set forth in § 7.105-5 may be inserted pursuant to the provisions of § 1.310 of this chapter. [26 F.R. 9639, Oct. 12, 1961] § 7.304-9 Taxes where foreign agreements do not apply. In accordance with the instructions of § 11.404 of this chapter, in contracts to be performed outside the United States, its possessions and Puerto Rico, the clause set forth therein may be inserted. [26 F.R. 9639, Oct. 12, 1961] Subpart D-Clauses for Cost-Reimbursement Type Research and Development Contracts § 7.402-2 Limitation of cost. (a) The following clause shall be used in cost-reimbursement type research and development contracts which do not provide for cost-sharing. LIMITATION OF COST (FEB. 1959) (a) It is estimated that the total cost to the Government, exclusive of any fixed fee, for the performance of this contract will not exceed the estimated cost set forth in the Schedule, and the Contractor agrees to use his best efforts to perform the work specified in the Schedule, and all obligations under this contract within such estimated cost. If at any time the Contractor has reason to believe that the cost which he expects to incur in the performance of this contract in the next succeeding sixty (60) days, when added to all costs previously incurred, will exceed seventy-five percent (75%) of the estimated cost then set forth in the Schedule, or if at any time, the Contractor has reason to believe that the total cost to the Government, exclusive of any fixed fee, for the performance of this contract will be substantially greater or less than the then estimated cost thereof, the Contractor shall notify the Contracting Officer in writing to that effect, giving the revised estimate of such total cost for the performance of this contract. (b) The Government shall not be obligated to reimburse the Contractor for costs incurred in excess of the estimated cost set forth in the Schedule, and the Contractor shall not be obligated to continue performance under the contract or to incur costs in excess of the estimated cost set forth in the Schedule, unless and until the Contracting Officer shall have notified the Contractor in writing that such estimated cost has been increased and shall have specified in such notice a revised estimated cost which shall thereupon constitute the estimated cost of performance of this contract. When and to the extent that the estimated cost set forth in the Schedule has been increased, any costs incurred by the Contractor in excess of such estimated cost prior to the increase in estimated cost shall be allowable to the same extent as if such costs had been incurred after such increase in estimated cost. The words "exclusive of any fixed fee", occurring twice in paragraph (a) of the foregoing clause, may be deleted in any contract not providing for the payment of a fixed fee. (b) The following clause shall be used in cost-reimbursement type research and development contracts which provide for cost-sharing. The contract schedule shall embody a cost-sharing formula agreed upon by the parties prior to execution of the contract. This formula shall provide for the ratio of cost-sharing with regard to both the originally established total estimated cost and any increases thereto, pursuant to (b) of the clause. LIMITATION OF COST (COST-SHARING) (a) It is estimated that the cost to the Government for the performance of this contract will not exceed the estimated cost to the Government set forth in the Schedule, and the Contractor agrees to use his best efforts to perform the work specified in the Schedule and all obligations under this contract within such estimated cost to the Government plus the share of the cost of performance agreed to be borne by the Contractor, as set forth in the Schedule. If at any time the Contractor has reason to believe that the costs which he expects to be incurred in the performance of this contract in the next succeeding sixty (60) days, when added to all costs previously incurred, will exceed seventy-five percent (75%) of the estimated total cost to the Government and to the Contractor then set forth in the Schedule, or if at any time the Contractor has reason to believe that the total cost for the performance of this contract will be substantially greater or less than the then estimated total cost thereof, the Contractor shall notify the Contracting Officer in writing to that effect, giving the revised estimate of such total cost for the performance of this contract. (b) The Government shall not be obligated to reimburse the Contractor for costs incurred in excess of the estimated cost to the Government set forth in the Schedule, and the Contractor shall not be obligated to continue performance under the contract or to incur costs in excess of the estimated total cost set forth in the Schedule, unless and until the Contracting Officer shall have notified the Contractor in writing that such estimated total cost has been increased and has specified in such notice a revised estimated total cost which shall thereupon constitute the estimated cost of performance of this contract. The increase in such estimated total cost shall be allocated in accordance with the formula set forth in the Schedule governing such increases. When and to the extent that the estimated total cost set forth in the Schedule has been increased, any costs incurred by the Contractor in excess of such estimated total cost prior to the increase in such estimated total cost shall be allowable to the same extent as if such costs had been incurred after such increase. (a) Subject to the instructions set forth in paragraph (b) of this section, insert the following clause. ALLOWABLE COST, FIXED FEE, AND PAYMENT (SEPT. 1962) (a) For the performance of this contract, the Government shall pay to the Contractor: (1) The cost thereof (hereinafter referred to as "allowable cost") determined by the Contracting Officer to be allowable in accordance with: (A) Part 2 of Section XV of the Armed Services Procurement Regulation as in effect on the date of this contract; and (B) The terms of this contract; and (ii) Such fixed fee, if any, as may be provided for in the Schedule. (b) Once each month (or at more frequent intervals, if approved by the Contracting Officer), the Contractor may submit to an authorized representative of the Contracting Officer, in such form and reasonable detail as such representative may require, an invoice or public voucher supported by a statement of cost incurred by the Contractor in the performance of this contract and claimed to constitute allowable cost. (c) Promptly after receipt of each invoice or voucher the Government shall, subject to the provisions of (d) below, make payment thereon as approved by the Contracting Officer. Payment of the fixed fee, if any, shall be made to the Contractor as specified in the Schedule; Provided, however, That after payment of eighty-five percent (85%) of the fixed fee set forth in the Schedule, further payment on account of the fixed fee shall be withheld until a reserve of either fifteen percent (15%) of the total fixed fee, or one hundred thousand dollars ($100,000), whichever is less, shall have been set aside. (d) At any time or times prior to final payment under this contract, the Contracting Officer may have invoices or vouchers and statements of cost audited. Each payment theretofore made shall be subject to reduction for amounts included in the related invoice or voucher which are found by the Contracting Officer, on the basis of such audit, not to constitute allowable cost. Any payment may be reduced for overpayments, or increased for underpayments, on preceding invoices or vouchers. (e) On receipt and approval of the invoice or voucher designated by the Contractor as the "completion invoice" or "completion voucher" and upon compliance by the Contractor with all the provisions of this contract (including, without limitation, the provisions relating to patents and the provisions of (f) below), the Government shall promptly pay to the Contractor any balance of allowable cost, and any part of the fixed fee which has been withheld pursuant to (c) above or otherwise not paid to the Contractor. The completion invoice or voucher shall be submitted by the Contractor promptly following completion of the work under this contract but in no event later than one (1) year (or such longer period as the Contracting Officer may in his discretion approve in writing) from the date of such completion. (f) The Contractor agrees that any refunds, rebates, credits, or other amounts (including any interest thereon) accruing to or received by the Contractor or any assignee under this contract shall be paid by the Contractor to the Government, to the extent that they are properly allocable to costs for which the Contractor has been reimbursed by the Government under this contract. Reasonable expenses incurred by the Contractor for the purpose of securing such refunds, rebates, credits, or other amounts shall be allowable costs hereunder when approved by the Contracting Officer. Prior to final payment under this contract, the Contractor and each assignee under this contract whose assignment is in effect at the time of final payment under this contract shall execute and deliver: (1) An assignment to the Government, in form and substance satisfactory to the Contracting Officer, or refunds, rebates, credits, or other amounts (including any interest thereon) properly allocable to costs for which the Contractor has been reimbursed by the Government under this contract; and (ii) A release discharging the Government, its officers, agents, and employees from all liabilities, obligations, and claims arising out of or under this contract, subject to the following exceptions: (A) Specified claims in stated amounts or in estimated amounts where the amounts are not susceptible of exact statement by the Contractor; (B) Claims, together with reasonable expenses incidental thereto, based upon liabilities of the Contractor to third parties. arising out of the performance of this contract; provided, that such claims are not known to the Contractor on the date of the execution of the release; and provided further that the Contractor gives notice of such claims in writing to the Contracting Officer not more than six (6) years after the date of the release or the date of any notice to the Contractor that the Government is prepared to make final payment, whichever is earlier; and (C) Claims for reimbursement of costs (other than expenses of the Contractor by reason of any indemnification of the Government against patent liability), including reasonable expenses incidental thereto, incurred by the Contractor under the provisions of this contract relating to patents. (g) Any cost incurred by the Contractor under the terms of this contract which would constitute allowable cost under the provisions of this clause shall be included in determining the amount payable under this contract, notwithstanding any provisions contained in the specification or other documents incorporated in this contract by reference, designating services to be performed or materials to be furnished by the Contractor at his expense or without cost to the Government. (b) (1) In the foregoing clause, substitute in contracts of the Department of the Navy, the words "the Director, Contract Audit Division, Office of the Comptroller of the Navy, Washington, D.C." for the words "the Contracting Officer" appearing in paragraph (a) (i), paragraph (b), paragraph (c), and paragraph (d). For approvals with regard to fixed-price type subcontracts providing for progress payments, pursuant to paragraph (c) of the foregoing clause, the standards shall be the same as those governing progress payments on fixedprice type prime contracts, as provided by § 163.83 of this chapter. (2) In subparagraph (f) (ii) (B) of the foregoing clause, the period of years may be increased to correspond with any statutory period of limitation applicable to claims of third parties against the contractor; provided, that a corresponding increase is made in the period for retention of records required in subparagraph (a) (4) of the clause prescribed by § 7.402-7. (3) In paragraph (c) of the foregoing clause, the percentages and amounts set forth therein may be varied in accordance with Departmental procedures. (4) In the case of contracts, including cost-sharing contracts, without fee: (i) Insert the following sentence in lieu of the second sentence of paragraph (c) of the foregoing clause, except that, if the contract does not provide for costsharing, delete the parenthetical references to the Government's share: After payment of an amount equal to eighty percent (80%) of (the Government's share 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 (the Government's share of) such total estimated cost, or one hundred thousand dollars ($100,000), whichever is less shall have been set aside. (ii) Change the title of the clause set forth in paragraph (a) of this section to "Allowable Cost and Payment"; (iii) In contracts without fee which do not provide for cost-sharing, change paragraph (a) of the clause set forth in paragraph (a) of this section as follows, except in contracts of the Department of the Navy substitute the words "the Director, Contract Audit Division, Office of the Comptroller of the Navy, Washington, D.C." for the words "the Contracting Officer" in paragraph (a) below: (a) For the performance of this contract, the Government shall pay to the Contractor the cost thereof (hereinafter referred to as "allowable cost") determined by the Contracting Officer to be allowable in accordance with: (i) Part 2 of Section XV of the Armed Services Procurement Regulation as in effect on the date of this contract; and (ii) The terms of this contract; (b) In contracts which provide for costsharing, change paragraph (a) of the clause set forth in paragraph (a) of this section as follows, except in contracts of the Department of the Navy substitute the words "the Director, Contract Audit Division, Office of the Comptroller of the Navy, Washington, D.C." for the words "the Contracting Officer" in paragraph (a) (1) below: (a) (1) The allowability of costs incurred in the performance of this contract shall be determined by the Contracting Officer in accordance with: (1) Part 2 of Section XV of the Armed Services Procurement Regulation as in effect on the date of this contract; and (ii) The terms of this contract; (2) The Government shall pay to the Contractor the Government's share of the incurred costs determined to be allowable pursuant to (1) above, which amount shall be governed by the paragraph in Schedule which sets forth the cost-sharing agreement. the (iv) Delete, from paragraph (e) of the clause set forth in paragraph (a) of this section, the words "and any part of the fixed fee" and the comma immediately before such words. (5) In the case of contracts without fee with nonprofit institutions the words "ten thousand dollars ($10,000)" may be substituted for the words "one hundred thousand dollars ($100,000)" as they appear in the sentence set forth in subparagraph (4) (i) of this paragraph. (6) In the case of contracts with educational institutions, the reference in |