CONTRACT CLAUSES

appropriate, both clauses shall be included, with the following preamble to the Limitation of Liability Major Items clause.

(The provisions of this clause shall apply only to those items identified in this contract as being subject to this clause.)

The Contracting Officer shall identify high unit cost items by line item.

7.204-50 Optional Data Requirements. In accordance with the requirements of 9.203-2, insert the clause set forth therein.

7.204-51 Approval of Contract. Insert the clause set forth in 7.104-51 when approval of the contract by the Director of Procurement is required.

7.204-52 [Reserved]

7.204-53 Limitation of Government's Obligation. The clause set forth below is authorized for use when all the following conditions are present:

(i) the total value of the contract (including options as defined in Part 1, Subpart 15, is $1,000,000 or more;

(ii) the period of performance under the contract is in excess of twelve months or the period of performance overlaps the succeeding fiscal year; and

(iii) funds are not available to fully fund the total contract value at the time of entering into the

contract.

LIMITATION OF GOVERNMENT'S OBLIGATION (SEPTEMBER 1962)

(a) It is estimated that the total cost to the Government, inclusive of any fixed fee for the performance of this contract will not exceed the estimated cost and fixed fee 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. The fixed fee for complete performance of this contract is specified in the Schedule.

(b) The sum presently available for payment and allotted to this contract, the items covered thereby, and the period of performance which it is estimated the allotted amount will cover, are specified in the Schedule. It is anticipated that from time to time additional funds will be allotted to this contract up to the full estimated cost, including any fixed fee. When additional funds are allotted from time to time for continued performance of the work, the parties shall agree as to the applicable estimated period of contract performance which shall be covered by such funds and the contract Schedule amended accordingly. The Contractor agrees to perform or have performed work on this contract up to the point at which in the event of termination of this contract for the convenience of the Government pursuant to the clause of this contract entitled "Termination," the total amount paid and payable by the Government pursuant to any settlement including cost and fixed fee under paragraph (e) of such clause would, in the exercise of reasonable judgment by the Contractor, approximate the total amount at the time allotted to this contract. The Contractor shall not be obligated to continue performance of the work beyond such point.

(c) The Government shall not be obligated to reimburse the Contractor for costs incurred (including amounts payable in respect to subcontracts and termination settlement costs) and to pay any fixed fee to which the Contractor may be entitled in excess of the total amount from time to time allotted to this contract. However, when and to the extent that the total amount allotted to this contract has been increased, any costs incurred by the Contractor and any fixed fee to which the Contractor may be entitled, prior to the increase and in excess of the amount previously allotted, shall be allowable to the same extent as if such costs had been incurred and fee earned after such increase in amount allotted. (d) In the event funds allotted are considered by the Contractor to be inadequate to cover the work to be performed for the period set forth in the Schedule, the Contractor shall notify the Contracting Officer in writing when within the next thirty (30) days the work will reach a point at which, in the event of termination of this contract for the convenience of the Government pursuant to the clause of this contract entitled "Termination," the total amount paid and payable by the Government pursuant to a settlement including cost and fixed fee under paragraph (e) of such clause will approximate eighty-five percent (85%) of the total amount then allotted to the contract. The notice shall state the estimated date when such point will be reached and the estimated amount of additional funds required to continue performance for the period set forth in the Schedule. The Contractor shall, thirty (30) days prior to the end of the period specified in the Schedule, advise the Contracting Officer in writing as to the estimated amount of additional funds which will be required on the basis of the obligation for performance in accordance with paragraph (b) of this clause for the timely performance of the work under the contract for such further period as may be specified in the Schedule or otherwise agreed to by the parties. If, after such notification, additional funds are not allotted by the end of the period set forth in the Schedule, or an agreed date in substitution therefor, the Contracting Officer will, upon written request of the Contractor, terminate this contract on such date, or on a date to be specified in such request, on which the Contractor, in the exercise of his reasonable judgment, estimates that he will have discharged his obligation to perform hereunder in accordance with paragraph (b) of this clause, whichever is later, pursuant to the provisions of the clause of this contract entitled "Termination."

(e) When additional funds are allotted from time to time for continued performance of the work under this contract, the parties shall agree as to the applicable period of contract performance which shall be covered by such funds, and the

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CLAUSES FOR COST-TYPE SUPPLY CONTRACTS

provisions of paragraphs (b), (c), and (d) of this clause shall apply in like manner to such additional allotted funds and substituted date pertaining thereto, and the contract shall be amended accordingly.

(1) The Government may at any time prior to termination allot additional funds for this contract, and, with the consent of the Contractor, after notice of termination, may rescind such termination in whole or in part, and allot additional funds for this contract.

(g) In the event that sufficient amounts are not allotted to this contract to allow completion of the work contemplated by this contract, the Contractor shall be entitled, subject to the limitations of paragraph (c) of this clause, to a percentage of the fixed fee set forth in the Schedule equivalent to the percentage of completion of the work contemplated by this

contract.

(h) Nothing in this clause shall affect the right of the Government to terminate this contract pursuant to the clause of this contract entitled "Termination."

(i) For the purpose of this clause, the allotment or allotments specified in the Schedule shall not be decreased without the consent of the Contractor.

(j) This clause shall be applicable and the clause of this contract entitled "Limitation of Cost" inapplicable until such time as an amount equal to the total estimated cost and fee set forth in the Schedule is allotted to this contract, and thereafter the clause of this contract entitled "Limitation of Cost" shall be applicable and this clause inapplicable.

7.204-54 Financial Reporting of Government-Owned/Contractor-Held Property. In accordance with the instructions in 7.104-54, insert the clause set forth therein.

7.204-55 Special Test Equipment In accordance with the requirements of 13.705, insert the clause set forth therein.

7.204-56 NASA Financial Management Reporting. Insert the appropriate clause set forth in 7.104-53 in accordance with the instructions set forth therein.

7.204-57 Cost Accounting Standards. In accordance with 3.1204, insert the clause set forth in 7.104-55.

7.204-58 Safety and Health. In accordance with the requirements of Part 1, Subpart 52, insert the clause set forth in 1.5204.

7.204-59 Reserved]

7.204-60 Report on NASA Subcontracts. In accordance with the requirements of 21.500, insert the clause set forth therein.

7.204-61 Rights in Data for Potentially Hazardous Items. In accordance with the requirements of 9.203-6, insert the clause specified therein.

7.204-62 Potentially Hazardous Items. In accordance with the requirements of 1.351, insert the clause set forth therein.

7.204-63 Order of Precedence. In accordance with 7.104-56, insert the clause set forth therein. 7.204-64 Preference for United States Flag Air Carriers. In accordance with 1.336–1(b), insert the clause in 7.104-95.

86.

7.204-65 through 7.204-85 [Reserved]

7.204-86 Notification of Changes. In accordance with 26.802, insert the clause set forth in 7.104–

7.204-87 and 7.204-88 [Reserved]

7.204-89 Engineering Change Proposals (ECP's). In accordance with 26-205, the clause under 7.104-89 is a sample clause.

7.204-90 Change Order Accounting. In accordance with 26-205, the clause under 7.104-90 is a sample clause.

7.205 Additional Clauses. The following clauses shall be inserted if it is desired to cover the subject matter thereof.

7.205-1 Alterations in Contract. The clause set forth in 7.105-1 may be inserted.

7.205-2 [Reserved]

7.205-3 [Reserved]

7.205-4 Bill of Materials. Under the circumstances stated in 7.105-6, the clause set forth therein may be inserted.

7.205-5 [Reserved]

7.205-6 Stop Work Orders. The clause set forth in 7.105-8 is authorized for use under the criteria and in accordance with the instructions in 7.105-8, if modified by changing

(i) the words "the 'Termination for Convenience' clause of this contract" to "the "Termination' clause of this contract," and

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CONTRACT CLAUSES

(ii) the words “an equitable adjustment shall be made in the delivery schedule or contract price, or both" to "an equitable adjustment shall be made in the delivery schedule, the estimated cost, the fee, or a combination thereof, and in any other provisions of the contract that may be affected."

7.205-50 Notice of Delay. The clause set forth below is authorized for use in situations where it is desirable to provide for notice by the contractor of anticipated delays in performance.

NOTICE OF DELAY (SEPTEMBER 1962)

If the Contractor becomes unable to complete the contract work at the time specified because of technical difficulties, notwithstanding the exercise of good faith and diligent efforts in the performance of the work called for hereunder, the Contractor shall give the Contracting Officer written notice of the anticipated delay and the reasons therefor. Such notice and reasons shall be delivered promptly after the condition creating the anticipated delay becomes known to the Contractor but in no event less than forty-five (45) days before the completion date specified in this contract, unless otherwise directed by the Contracting Officer. When notice is so required, the Contracting Officer may, in his discretion, extend the time specified in the Schedule for such period as he deems advisable.

7.205-51 [Reserved]

7.205-52 Date of Incurrence of Costs. The clause set forth below is authorized for use when specific coverage of precontract costs is authorized in accordance with 15.205-30.

DATE OF INCURRENCE OF COSTS (OCTOBER 1963)

The Contractor shall be entitled to reimbursement for costs incurred in an amount not to exceed $..... on or after which, if incurred after this contract had been entered into, would have been reimbursable under the provisions of this contract.

7.205-53 Contractor's Independent Research Program. When the New Technology clause is included in the contract (see 9.107-4) and it is determined that the contractor maintains an independent research program, the clause set forth in 9.107-8 may be included in the Schedule at the contractor's request.

7.205-54 Reports of Work. A Reports of Work clause is not prescribed for cost-reimbursement type supply contracts. When it is desired to include such a clause, however, the clause set forth in 7.302-54 may be used or it may serve as a model in drafting the desired clause.

7.205-50

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Subpart 3-Clauses for Fixed-Price R&D Contracts

7.300 Scope of Subpart. This Subpart sets forth uniform clauses for use in fixed-price research and development contracts as defined in 7.301.

7.301 Applicability. As used throughout this Subpart, the term "fixed-price research and development contract" means any contract, including letter contracts (except notices of award, contracts placed under Small Purchases Procedures, and amendments or supplemental agreements which do not effect new procurement) which (i) is entered into on a fixed-price basis, (ii) is in an amount exceeding $2,500, and (iii) is for experimental, developmental, or research work.

7.302 Required Clauses. The following clauses shall be inserted, as required, in all fixed-price research and development contracts except as otherwise indicated in this Subpart. See 7.350 for short form clauses.

7.302-1 Definitions. Insert the clause set forth in 7.103-1. Additional definitions may be included, provided they are not inconsistent with such clause or the provisions of this Regulation. 7.302-2 Payments. Insert the following clause except that in letter contracts insert clause 4 of NASA Form 551-3 set forth in 16.859-4(d).

PAYMENTS (SEPTEMBER 1962)

The Contractor shall be paid, upon submission of proper invoices or vouchers, the prices stipulated herein for work delivered or rendered and accepted, less deductions, if any, as herein provided. Unless otherwise specified, payment will be made upon acceptance of any portion of the work delivered or rendered for which a price is separately stated in the

contract.

7.302-3 Standards of Work.

STANDARDS OF WORK (SEPTEMBER 1962)

The Contractor agrees that the performance of work and services pursuant to the requirements of this contract shall conform to high professional standards.

7.302-4 Inspection.

(a) Short Form Clause. The following clause shall be inserted in all contracts subject to this Subpart where the clause in (b) below is not used.

INSPECTION (SEPTEMBER 1962)

The Government, through any authorized representatives, has the right, at all reasonable times, to inspect, or otherwise evaluate the work performed or being performed hereunder and the premises in which it is being performed. If any inspection or evaluation is made by the Government on the premises of the Contractor or a subcontractor, the Contractor shall provide and shall require subcontractors to provide all reasonable facilities and assistance for the safety and convenience of the Government representatives in the performance of their duties. All inspections and evaluations shall be performed in such a manner as will not unduly delay the work.

(b) Long Form Clause. Where a more detailed provision covering inspection is desired, as where the primary contract objective is delivery of end items other than designs, drawings, or reports, the clause set forth below shall be used unless the contracting officer determines that use of the longer clause is impracticable.

INSPECTION (SEPTEMBER 1962)

(a) All work under this contract shall be subject to inspection and test by the Government, to the extent practicable, at all times (including the period of performance) and places, and in any event prior to acceptance. The Government through any authorized representative may inspect the premises of the Contractor or any subcontractor engaged in the performance of this contract.

(b) The Government may reject any work that is defective or otherwise not in conformity with the requirements of this contract. If the Contractor fails or is unable to correct or to replace such work, the Contracting Officer may accept such work at a reduction in price which is equitable under the circumstances. Failure to agree on the reduction in price shall be a dispute concerning a question of fact within the meaning of the clause of this contract entitled "Disputes."

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CONTRACT CLAUSES

(c) If any inspection or test is made by the Government on the premises of the Contractor or a subcontractor, the Contractor shall provide, without additional charge, all reasonable facilities and assistance for the safety and convenience of the Government inspectors in the performance of their duties. If the Government inspection or test is made at a point other than the premises of the Contractor or subcontractor, it shall be at the expense of the Government. All inspections and tests by the Government shall be performed in such a manner as not unduly to delay the work. Final inspection and acceptance or rejection of the work shall be made as promptly as practicable after delivery except as otherwise provided in this contract; but failure to inspect and accept, or reject the work shall neither relieve the Contractor from responsibility for such of the work as is not in accordance with the contract requirements nor impose liability on the Government therefor.

(d) The inspection and test by the Government of any work shall not relieve the Contractor from any responsibility regarding defects or other failures to meet the contract requirements which may be discovered prior to acceptance. Except as otherwise provided in this contract, acceptance shall be conclusive except as regards latent defects, fraud, or such gross mistakes as amount to fraud.

(e) The Contractor shall provide and maintain an inspection system acceptable to the Government covering the work hereunder. Records of all inspection work by the Contractor shall be kept complete and available to the Government during the performance of this contract and for such longer period as may be specified elsewhere in this contract.

7.302-5 Assignment of Claims. In accordance with the instructions in 7.103-8, insert the clause set forth therein.

7.302-6 Examination of Records by Comptroller General. In accordance with 7.104-15, insert the clause set forth therein.

7.302-7 Federal, State, and Local Taxes. Insert the clause set forth in 11.401-1 or 11.401-2 in accordance with the requirements of 11.401.

7.302-8 Utilization of Small Business and Small Disadvantaged Business Concerns. In accordance with the requirements of 1.707-3, insert the appropriate clause set forth therein.

7.302-9 Default. In accordance with the requirements of 8.710, insert the clause set forth therein.

7.302-10 Termination for the Convenience of the Government. In accordance with the requirements of 8.701(a), insert the clause set forth therein.

7.302-11 Disputes. Insert the clause set forth in 7.103-12.

7.302-12 [Reserved]

7.302-13 Buy American Act and Trade Agreements Act. In accordance with the requirements of Part 6, Subpart 1, insert the clause set forth in 6.104-5.

7.302-14 Convict Labor. In accordance with Part 12, Subpart 2, insert the clause set forth in 7.104-17.

7.302-15 Walsh-Healey Public Contracts Act. Insert the clause set forth in 12.605. 7.302-16 Contract Work Hours Standards Act

Overtime Compensation. Insert the clause set forth in 12.303-1. Note the introductory language required by 12.303-2 for inclusion in contracts with a State or political subdivision thereof.

7.302-17 Equal Opportunity. In accordance with the provisions of 12.804, insert the appropriate clause set forth therein.

7.302-18 Officials Not To Benefit. Insert the clause set forth in 7.103-19.

7.302-19 Covenant Against Contingent Fees. Insert the clause set forth in 1.503.

7.302-20 Clean Air and Water. Insert the clause set forth in 1.2302-2.

7.302-21 Authorization and Consent. In accordance with the requirements in 9.102, insert the clause set forth in 9.102(b).

7.302-22 Notice and Assistance Regarding Patent and Copyright Infringement. Insert the clause set forth in 9.104.

7.302-23 New Technology or Property Rights in Inventions. In accordance with the requirements of 9.107-4, insert the "New Technology" clause of 9.107-5.

7.302-24 Rights in Data. If data is to be, delivered under the contract, insert the appropriate clause in accordance with the instructions in 9.203.

7.302-25 Security Requirements. Insert the clause set forth in 7.104-12, except that if the contract is with an educational institution and is awarded on the basis of no profit, insert the clause set forth in 7.451-24.

7.302-26 Utilization of Labor Surplus Area Concerns. In accordance with the requirements of 1.805-3(a), insert the clause set forth therein.

7.302-53 Interest. Insert the clause set forth in 7.103-53.

7.302-5

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