the alternate paragraph (a) of the foregoing clause, set forth in subparagraph (4) (iii) (a) of this paragraph to "Part 2 of Section XV" shall be deleted, and, in lieu thereof, reference shall be made to "Part 3 Section XV." (7) In the case of contracts without fee with educational institutions, the second sentence of paragraph (c) of the foregoing clause and the provision of subparagraph (4) (i) of this paragraph, which pertain to withholding of fee and costs, may be omitted. If the second sentence of paragraph (c) is omitted, in paragraph (e) delete the comma and add the words immediately following in the first sentence as follows: "and any part of the fixed fee which has been withheld pursuant to (c) above or otherwise." (8) In the foregoing clause, the words "Task Order" or other appropriate designation may be substituted for the word "Schedule" as appropriate. [27 F.R. 11656, Nov. 27, 1962] § 7.402-8 (a) * * * Subcontracts. SUBCONTRACTS (Nov. 1962) (a) The Contractor shall give advance notification to the Contracting Officer of any proposed subcontract hereunder which (1) is on a cost, cost-plus-a-fee, time and material, or labor-hour basis, or (ii) is on a fixed-price basis exceeding in dollar amount either $25,000 or five percent (5%) of the total estimated cost of this contract. (b) In the case of a proposed subcontract which (1) is on a cost-plus-a-fee, time and material, or labor-hour basis and which would involve an estimated amount in excess of $10,000, including any fee; or (ii) is proposed to exceed $100,000; or (iii) is one of a number of subcontracts under this contract with a single subcontractor for the same or related supplies or services which, in the aggregate are expected to exceed $100,000; the advance notification required by (a) above shall include: (1) A description of the supplies or services to be called for by the subcontract; (2) Identification of the proposed subcontractor and an explanation of why and how the proposed subcontractor was selected, including the degree of competition obtained; (3) the proposed subcontract price, together with the Contractor's cost or price analysis thereof, including current, complete, and correct cost or pricing data accompanied with a certificate from the subcontractor to the effect that all cost or pricing data has been considered by the subcontractor in preparing his proposal and that such data is current, and has been provided the Contractor; and (4) Identification of the type of contract proposed to be used. (c) The Contractor shall not, without the prior written consent of the Contracting Officer, place any subcontract which (i) is on a cost or cost-plus-a-fee basis, or (ii) is on a fixed-price basis exceeding in dollar amount either $25,000 or five percent (5%) of the total estimated cost of this contract, or (iii) provides for the fabrication, purchase, rental, installation, or other acquisition, of any item of industrial facilities, or of special tooling having a value in excess of $1,000, or (iv) is on a time and material or labor-hour basis, or (v) has experimental, developmental, or research work as one of its purposes. The Contracting Officer may, in his discretion, ratify in writing any such subcontract; such action shall constitute the consent of the Contracting Officer as required by this paragraph (c). (d) The Contractor agrees that no subcontract placed under this contract shall provide for payment on a cost-plus-a-percentage-of-cost basis. (e) The Contracting Officer may, in his discretion, specifically approve in writing any of the provisions of a subcontract. However, such approval or the consent of the Contracting Officer obtained as required by this clause shall not be construed to constitute a determination of the allowability of any cost under this contract, unless such approval specifically provides that it constitutes a determination of the allowability of such cost. (f) The Contractor shall give the Contracting Officer immediate notice in writing of any action or suit filed, and prompt notice of any claim made against the Contractor by any subcontractor or vendor which, in the opinion of the Contractor, may result in litigation, related in any way to this contract with respect to which the Contractor may be entitled to reimbursement from the Government. (g) Notwithstanding (c) above the Contractor may enter into subcontracts within (ii), or, if the subcontract is for special tooling, within (iii), of (c) above, without the prior written consent of the Contracting Officer if the Contracting Officer has, in writing, approved the Contractor's purchasing system and the subcontract is within the limitations of such approval. (h) The Contractor shall (1) insert in each price redetermination or incentive price revision subcontract hereunder the substance of the "Limitation on Payments" paragraph set forth in the appropriate clause prescribed by paragraph 7-108 of the Armed Services Procurement Regulation, including subparagraph (4) thereof, modified to omit mention of the Government and reflect the position of the Contractor as purchaser and of the subcontractor as vendor, and to omit that portion of subparagraph (3) thereof relating to tax credits, and (ii) include in each costreimbursement type subcontract hereunder a requirement that each price redetermina tion and incentive price revision subcontract thereunder will contain the substance of the "Limitation on Payments" provision, including subparagraph (4) thereof, modified as outlined in (1) above. (i) To facilitate small business participation in subcontracting under this contract, the Contractor agrees to provide progress payments on the fixed-price types of subcontracts of those subcontractors which are small business concerns, in conformity with the standards for customary progress payments stated in paragraphs 503 and 514 of Appendix E of the Armed Services Procurement Regulation, as in effect on the date of this contract. The Contractor further agrees that the need for such progress payments will not be considered as a handicap or adverse factor in the award of subcontracts. CODIFICATION: § 7.402-8(a) was amended in the following respects: 1. The contract clause was amended in its entirety, 27 F.R. 6135, June 29, 1962, and was subsequently further amended as follows: 2. The clause heading was amended, 28 F.R. 2107, Mar. 5, 1963. 3. Clause paragraph (b) (3) was amended, 28 F.R. 2107, Mar. 5, 1963. 4. Clause paragraph (h) was amended, 28 F.R. 2107, Mar. 5, 1963, and was further amended in its entirety, 28 F.R. 4887, May 16, 1963. 5. Clause paragraph (i) was added, 27 F.R. 6135, June 29, 1962. Prior Amendments 1962: 27 F.R. 3451, Apr. 11. (b) In paragraph (a) of the foregoing clause, the percentage and amount set forth therein may be revised downward only in accordance with Departmental procedures. In paragraph (c) of the foregoing clause, the percentage and amount set forth in (ii) thereof may be varied, the dollar amount set forth in (iii) may be increased, and, in (i), (iv), and (v) thereof, dollar amounts not in excess of $10,000 may be established below which the prior written consent of the contracting officer need not be obtained, in accordance with Departmental procedures. [Paragraph (b) amended, 28 FR. 2107, Mar. 5, 1963] Prior Amendments 1962: 27 F.R. 6135, June 29. § 7.402-9 Utilization of small business concerns. In accordance with the requirements of § 1.707-3(a) of this subchapter, insert the clause set forth therein. [27 F.R. 3451, Apr. 11, 1962] § 7.402-16 Work Hours Act of 1962— overtime compensation. In accordance with the instructions of § 12.303 of this chapter, insert the clause set forth therein. [28 F.R. 2582, Mar. 16, 1963] § 7.402-22 Patent rights. In accordance with the requirements of § 9.107 of this chapter, insert the appropriate contract clause set forth therein with additional or alternate paragraphs as prescribed therein. However, in the case of contracts without fee, the percentage amount specified to be withheld under paragraph (f) of the clause set forth in § 9.107-2 of this chapter or paragraphs (c) and (d) of the clause set forth in § 9.107-3 of this chapter, may be changed from "ten percent (10%)" to "one percent (1%)." In contracts without fee with educational institutions, paragraph (f) of the clause set forth in § 9.107-2 of this chapter may be omitted. [26 F.R. 2610, Mar. 28, 1961] § 7.402-23 Basic Data Clause. In accordance with the requirements of § 9.202 of this chapter, insert the clause set forth in § 9.203-1 of this chapter with appropriate additional or alternate paragraphs as prescribed by the instructions set forth in §§ 9.203 and 9.204-1 of this chapter, and the appropriate "Data-Withholding of Payment" clause as set forth in § 9.207 of this chapter. [27 F.R. 6135, June 29, 1962] (a) Except in contracts without fee with educational institutions, insert the clause set forth in § 7.104-12(a), modified in accordance with § 7.204-12: Provided, That the reference to "fixed fee" may be deleted in any contract not providing for the payment of a fixed fee: Provided further, That the provisions of § 7.104-12(b) shall apply with respect to contracts to be performed outside the United States, its possessions, and Puerto Rico. (b) The following clause shall be used in all contracts without fee with educational institutions, except that with respect to contracts to be performed outside the United States, its possessions, and Puerto Rico, the following clause may be used as a guide, unless the AFISR sets forth a required clause (see § 1.320 of this chapter and § 7.104-12 (b)). CODIFICATON: In § 7.402-24, paragraph (a) and the introductory text of paragraph (b) were amended, 28 F.R. 12571, Nov. 23, 1963. § 7.402-26 Insurance-liability to third persons. (a) Except as provided in paragraph (b) of this section, in accordance with the instructions set forth in § 7.203-22, insert the contract clause set forth therein. If the contractor claims partial immunity from tort liability as a state agency or as a charitable institution (as where work may be performed under the contract in a place or under conditions where the contractor is not immune from tort liability), the following may be added to the clause in § 7.203-22: (e) Notwithstanding paragraphs (a) and (c) of this clause, (i) the Government does not assume any liability to third persons, nor will the Government reimburse the Contractor for his liability to third persons, with respect to loss due to death, bodily injury, or damage to property resulting in any way from the performance of this contract or any subcontract hereunder; and (ii) the Contractor need not procure or maintain insurance coverage as provided in paragraph (a) of this clause; provided, the Contractor may obtain any insurance coverage he deems necessary subject to approval by the Contracting Officer as to form, amount, and duration, in which event the Contractor shall be reimbursed (A) for the cost of such insurance and (B) to the extent provided in paragraph (c) above, for liabilities to third persons for which the Contractor has obtained insurance coverage as provided in this paragraph, but for which such coverage is insufficient in amount. (Sept. 1962) In the foregoing clause, substitute in contracts of the Department of the Navy the words "the Department" for the words "the Contracting Officer". Work Hours Act of 1962-Overtime Compensation. Apprentices. Payroll Records and Payrolls, Copeland ("Anti-kickback") Act-Nonrebate of Wages. Withholding of Funds To Assure Wage Payment. Subcontracts-Termination. Employee Compensation-Cape Canaveral and Patrick Air Force Base. (b) In accordance with the requirements of § 6.204-5 of this chapter, insert the clause entitled Buy American Act. [28 F.R. 4888, May 16, 1963] Prior Amendments 1961: 26 F.R. 9639, Oct. 12. 1963: 28 F.R. 2582, Mar. 16. § 7.403-9 Negotiated overhead rates. Where negotiated overhead rates are to be used in contracts with concerns other than educational institutions pursuant to Subpart G, Part 3 of this chapter, insert the contract clause set forth in § 3.704-1 of this chapter. Where negotiated overhead rates (postdetermined or predetermined) are to be used in contracts with educational institutions, pursuant to that part, insert the appropriate contract clause set forth in § 3.704-2 of this chapter. [28 F.R. 2582, Mar. 16, 1963] § 7.403-13 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] Prior Amendments 1961: 26 F.R. 9639, Oct. 12. § 7.403-16 Flight risks. In contracts for the development, production, modification, maintenance, or overhaul of aircraft, or otherwise involving the furnishing of aircraft to the contractor by the Government, insert the clause set forth in § 10.404-21 of this chapter. [26 F.R. 9639, Oct. 12, 1961] § 7.403-17 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. 11658, Nov. 27, 1962] § 7.403-18 Duty-free entry of listed Canadian supplies. In accordance with the requirements of § 6.605-2 of this chapter, insert the clause set forth therein. [26 F.R. 9639, Oct. 12, 1961] § 7.403-19 Taxes. 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 (c) and (d) thereof. [26 F.R. 9639, Oct. 12, 1961] § 7.403-20 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] § 7.403-21 Workmen's compensation insurance overseas. In accordance with the requirements of § 10.403 of this chapter, insert the 1 Appears as § 10.504. 22-051-64- -17 § 7.403-26 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] § 7.403-27 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] § 7.403-28 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] § 7.403-29 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 estimated 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 (1) in the estimated cost or delivery schedule, or both, (ii) in the amount of any fee to be paid to the Contractor, and (iii) 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. 4888, May 16, 1963] Prior Amendments 1963: 28 F.R. 2108, Mar. 5. § 7.404-7 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, is possessions and Puerto Rico, the clause set forth therein may be inserted. [26 F.R. 9639, Oct. 12, 1961] Subpart E-Clauses for Personal § 7.504-1 Military security require ments. Insert the clause set forth below in all contracts involving security information which are classified by a Military Department "Confidential”, including "Confidential-Modified Handling Authorized", or higher and in any other contract, the performance of which will require access to classified matter, except that with respect to contracts to be performed outside the United States, its possessions, and Puerto Rico, the following clause may be used as a guide, unless the AFISR sets forth a required clause (see § 1.320 of this chapter and § 7.104-12(b)). MILITARY SECURITY REQUIREMENTS (AUGUST 1963) (a) The provisions of the following paragraphs of this clause shall apply only if and to the extent that this contract involves access to security information classified "Confidential", including "ConfidentialModified Handling Authorized", or higher. (b) The Contractor (1) shall be responsible for safeguarding all classified security information in accordance with instructions furnished by the Contracting Officer, and shall not supply, disclose or otherwise permit access to classified security information to any unauthorized person, (ii) shall not make or permit to be made any reproductions of matter classified "Top Secret" except with the prior written authorization of the Contracting Officer, (iii) shall not make or permit to be made any reproductions of security information classified "Secret" or "Confidential", including "Confidential-Modified Handling Authorized", except as may be essential to performance of the contract, (iv) shall submit to the Contracting Officer, at such times as the Contracting Officer may direct, an accounting of all reproductions of security information classified "Confiden tial", including "Confidential-Modified Handling Authorized" or higher, and (v) shall not incorporate in any other project any matter which will disclose classified security information except with the prior written authorization of the Contracting Officer. |