CONTRACT CLAUSES

directors or officers, or on the part of any of his managers, superintendents, or other equivalent representatives, who have supervision or direction of:

or

(i) all or substantially all of the Contractor"s business;

(ii) all or substantially all of the Contractor"s operations at any one plant or separate location, in which

this contract is being performed; or

(iii) a separate and complete major industrial operation in connection with the performance of this contract.

(c) Notwithstanding paragraph (a) above, if the Contractor carries insurance or has established a reserve for selfinsurance covering liability for damages or losses suffered by the Government through purchase or use of the contract supplies required to be delivered to the Government under this contract, the Contractor shall be liable to the Government to the extent of such insurance or reserve for self-insurance for damages or losses to property of the Government occurring after acceptance of the supplies delivered to the Government under this contract and resulting from any defects or deficiencies in such supplies.

(d) The substance of this clause, including this paragraph (d) suitably altered to reflect the relationship of the contracting parties, shall be included in all subcontracts

hereunder.

(b) In accordance with 1.330, in the procurement of major items, insert the following clause.

LIMITATION OF LIABILITY-MAJOR ITEMS (JANUARY 1979)

(a) Except as provided below, and notwithstanding any other provision of this contract, the Contractor shall not be liable for loss of or damage to property of the Government (including the supplies delivered under this contract) occurring after acceptance of the supplies delivered under this contract and resulting from any defects or deficiencies in such supplies.

(b) The foregoing limitations shall not apply when the defects or deficiencies in such supplies or the Government acceptance of such supplies resulted from willful misconduct or lack of good faith on the part of any of the Contractor"s directors or officers, or on the part of any of his managers, superintendents, or other equivalent representatives, who have supervision or direction of:

or

(i) all or substantially all of the Contractor's business;

(11) all or substantially all of the Contractor"s operations at any one plant or separate location, in which this contract is being performed; or

(iii) a separate and complete major industrial operation in connection with performance of this contract.

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CLAUSES FOR FIXED-PRICE SUPPLY CONTRACTS

(c) Notwithstanding paragraph (a) above, if the Contractor carries insurance or has established a reserve for selfinsurance covering liability for damages or losses suffered by the Government through purchase or use of the contract supplies required to be delivered to the Government under this contract, the Contractor shall be liable to the Government for damages or losses to property of the Government occurring after acceptance of the supplies delivered to the

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NASA PROCUREMENT REGULATION

7.104-45

CLAUSES FOR FIXED-PRICE SUPPLY CONTRACTS

Government under this contract and resulting from any defects or deficiencies in such supplies to the extent of such insurance or reserve for self-insurance.

(d) This clause does not diminish the Contractor's obligation, to the extent otherwise arising under this contract, relating to correction, repair, replacement or other relief for any defect or deficiency in supplies delivered under this contract. If loss or damage has occurred and correction, repair, or replacement is no longer feasible or desired by the Government, the Contractor shall, as determined by the Contracting Officer:

(i) pay to the Government the amount which it would have cost the Contractor to make such correction, repair or replacement before the loss or damage occurred, or

(ii) provide other equitable relief.

(e) The provisions of this clause shall not limit or otherwise affect the Government's rights pursuant to the following listed clauses, if included in this contract:

GROUND AND FLIGHT RISK, and

GOVERNMENT PROPERTY.

(f) In all subcontracts hereunder, except those covered by (g) below, the Contractor shall either:

(i) insert, with the advance written consent of the Contracting Officer, the substance of this clause including this paragraph (f) suitably altered to reflect the relationship of the contracting parties; or

(ii) insert the substance of the clause in 7.104-45(a), suitably altered to reflect the relationship of the contracting parties. (g) In subcontracts for both major items for which this clause is appropriate, and other end items for which the clause in 7.104-45(a) is appropriate, the substance of both clauses shall be included, with the advance written consent of the Contracting Officer, with the following preamble to this clause:

(The provisions of this clause shall apply only to those items identified in this contract as being subject to this clause.) The Contractor shall identify high unit cost items by line item.

(c) In contracts for the purchase of both major items (see 1.330) for which the clause in (b) above is appropriate, and other contract end items for which the clause in (a) above is appropriate, the clauses in both (a) and (b) above shall be included, with 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.

7.104-46 through 7.104-49 [Reserved]

7.104-50 Optional Data Requirements. In accordance with the requirements of 9.203-2, insert the clause set forth therein.

7.104-51 Approval of Contract. Insert the clause set forth below in the contract when approval thereof by the Director of Procurement is required. (The clause is not to be incorporated by reference.)

APPROVAL OF CONTRACT (June 1978)

This contract (modification) shall be subject to the written approval of the Director of Procurement, NASA Headquarters, or his duly authorized representative, and shall not be binding until so approved.

7.104-52 [Reserved]

7.104-53 NASA Financial Management Reporting. When financial management reporting on NASA Form 533 series of reports is required (see NASA Management Instruction 9501.1B, "Contractor Financial Management Reporting System" and NASA Handbook 9501.2A "Procedures for Contractor Reporting of Correlated Cost and Performance Data") such requirement will be set forth in the Procurement Request, and the appropriate clauses set forth in (a) and (b) below shall be set forth in the contract.

(a) The clause set forth below shall be used when the NASA Form 533 series of reports, excluding the optional Monthly Contractor Financial Management Performance Analysis Report (NASA Form 533P), is required from the contractor:

(a) Financial Management Reports shall be submitted by the Contractor on NASA Form 533 series of reports in accordance with the instructions set forth in NASA Handbook "Procedures for Contractor Reporting of Correlated Cost and Performance Data" (NHB 9501.2A) and on the reverse side of the form, as supplemented in the Schedule of this

NASA PROCUREMENT REGULATION

7.104-53

CONTRACT CLAUSES

contract. The detailed reporting categories to be used, which shall be correlated with the technical/schedule reporting, will be set forth in the Schedule of this contract. Implementation by the Contractor of reporting requirements under this clause shall include NASA approval of the definitions of the content of each reporting category, and will give due regard to the Contractor's established financial management information system.

(b) Lower level detail, which the Contractor utilizes for its own management purposes to validate information reported to NASA, shall be compatible with NASA requirements.

(c) Reports shall be submitted in the number of copies, at the time, and in the manner set forth in the Schedule of this contract or as designated administratively in writing by the Contracting Officer. Upon completion, and acceptance by NASA, of all contract schedule line items, the contractor, unless otherwise directed in writing by NASA, shall discontinue submitting the detailed NASA Form 533 report, and shall limit subsequent reporting to specific line items reflecting cost increases or decreases on a quarterly basis.

(d) The Contractor agrees to insert the substance of this clause in all first tier cost type subcontracts specifically identified in writing by the Contracting Officer and shall include the cost of such subcontracts in his cost reports. (e) During the performance of this contract, if NASA requires a change, either an increase or decrease in the information or reporting requirements specified in the Schedule, or as provided for in (a) or (c) above, such change shall be effected by the Contracting Officer in accordance with the procedures of the "Changes" clause of this contract.

(b) The clause set forth below shall be used in conjunction with the clause in subparagraph (a) above when the optional Monthly Performance Analysis Report is also required from the

contractor.

NASA FINANCIAL MANAGEMENT REPORTING (PERFORMANCE ANALYSIS REPORT)JULY 1981)

Monthly reporting of contract performance shall be accomplished on the NASA Monthly Contractor Financial Management Performance Analysis Report (NASA Form 533P) in accordance with the instructions set forth in NASA Handbook "Procedures for Contractor Reporting of Correlated Cost and Performance Data" (NHB 9501.2A) and on the reverse side of the form, as supplemented in the Schedule of this contract.

7.104-54 Financial Reporting of Government-Owned/Contractor-Held Property. The clause set forth below shall be inserted in all contracts which contain one of the following Government Property clauses: 13.702; 13.703; 13.706; 13.707 or 7.702-17 (Property Control) except where the contracting officer is virtually certain that Government property will not be furnished to, or acquired by, the contractor (i.e., as in most study contracts, certain contracts for services, etc.), or where the only property to be provided is provided for the purpose of repair or servicing as described in 13.702(c).

FINANCIAL REPORTING OF GOVERNMENT-OWNED/CONTRACTOR-HELD PROPERTY (JUNE 1979)

(a) The Contractor shall prepare and submit annually a "Report of Government-Owned/Contractor-Held Property" (NASA Form 1018), in accordance with the instructions on the form and NASA Procurement Regulation B.311 or C.311, as appropriate, except that reporting of space hardware shall be required only upon the written direction of the Contracting Officer identifying the specific project items to be so reported.

(b) If administration of this contract has been delegated to the Department of Defense, the original and three copies of NASA Form 1018 shall be submitted through the DoD Property Administrator to the NASA office identified below. If administered by NASA, the forms shall be submitted directly to the designated NASA office:

(Insert the address and office code of the

organization within cognizant NASA Installation

responsible for control and distribution

of the NASA Form 1018)

(c) The annual reporting period shall be from July 1 of each year to June 30 of the following year. The report shall be submitted by July 31.

(d) The Contractor agrees to insert the reporting requirement in all first-tier subcontracts, except that such requirement shall provide for the submission of the subcontractor reports directly to the Contractor. The Contractor shall require the subcontractor reports to be submitted to him in sufficient time to meet the reporting date in (c) above.

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CLAUSES FOR FIXED-PRICE SUPPLY CONTRACTS

(e) The Contractor's annual report shall consist of a consolidation of the subcontractor reports and the Contractor's report.

7.104-55 Cost Accounting Standards.

(a) (1) Insert the following clause in all solicitations likely to result in a negotiated contract exceeding $100,000, and in all such contracts exceeding $100,000, unless exempt in accordance with 3.1204-1(a).

COST ACCOUNTING STANDARDS (MAY 1978)

(a) Unless the Cost Accounting Standards Board has prescribed rules or regulations, exempting the Contractor or this contract from standards, rules, and regulations promulgated pursuant to 50 U.S.C. App. 2168 (Public Law 91-379, August 15, 1970), the Contractor, in connection with this contract shall:

(1) By submission of a Disclosure Statement, disclose in writing his cost accounting practices as required by regulations of the Cost Accounting Standards Board. The required disclosures must be made prior to contract award unless the Contracting Officer provides a written notice to the Contractor authorizing post-award submission in accordance with regulations of the Cost Accounting Standards Board. The practices disclosed for this contract shall be the same as the practices currently disclosed and applied on all other contracts and subcontracts being performed by the Contractor and which contain this Cost Accounting Standards clause. If the Contractor has notified the Contracting Officer that the Disclosure Statement contains trade secrets and commercial or financial information which is privileged and confidential, the Disclosure Statement will be protected and will not be released outside of the Government.

(2) Follow consistently the cost accounting practices disclosed pursuant to (1) above in accumulating and reporting contract performance cost data concerning this contract. If any change in disclosed practices is made for purposes of any contract or subcontract subject to Cost Accounting Standards Board requirements, the change must be applied prospectively to this contract, and the Disclosure Statement must be amended accordingly. If the contract price or cost allowance of this contract is affected by such changes, adjustment shall be made in accordance with subparagraph (a)(4) or (a)(5) below, as appropriate.

(3) Comply with all Cost Accounting Standards in effect on the date of award of this contract or if the Contractor has submitted cost or pricing data, on the date of final agreement on price as shown on the Contractor's signed certificate of current cost or pricing data. The Contractor shall also comply with any Cost Accounting Standard which hereafter becomes applicable to a contract or subcontract of the Contractor. Such compliance shall be required prospectively from the date of applicability to such contract or subcontract.

(4)(A) Agree to an equitable adjustment as provided in the "Changes" clause of this contract if the contract cost is affected by a change which, pursuant to (3) above, the Contractor is required to make to his established cost accounting practices whether such practices are covered by a Disclosure Statement or not.

(B) Negotiate with the Contracting Officer to determine the terms and conditions under which a change may be made to either a disclosed cost accounting practice or an established cost accounting practice, other than a change made under other provisions of this subparagraph (4), provided, however, that no agreement may be made under this provision that will increase costs paid by the United States.

(C) When the parties agree to a change to either a disclosed cost accounting practice or an established cost accounting practice, other than a change under (4)(A) above, negotiate an equitable adjustment as provided in the Changes clause of this contract.

(5) Agree to an adjustment of the contract price or cost allowance, as appropriate, if he or a subcontractor fails to comply with an applicable Cost Accounting Standard or to follow any practice disclosed pursuant to subparagraphs (a)(1) and (a)(2) above and such failure results in any increased costs paid by the United States. Such adjustment shall provide for recovery of the increased costs to the United States together with interest thereon computed at the rate determined by the Secretary of the Treasury pursuant to Public Law 92-41, 85 Stat. 97, or 7 percent per annum, whichever is less, from the time the payment by the United States was made to the time the adjustment is effected.

(b) If the parties fail to agree whether the Contractor or a subcontractor has complied with an applicable Cost Accounting Standard, rule or regulation of the Cost Accounting Standards Board and as to any cost adjustment demanded by the United States, such failure to agree shall be a dispute concerning a question of fact within the meaning of the Disputes clause of this contract.

(c) The Contractor shall permit any authorized representatives of the head of the agency, of the Cost Accounting Standards Board, or of the Comptroller General of the United States to examine and make copies of any documents, papers, or records relating to compliance with the requirements of this clause.

(d) The Contractor shall include in all negotiated subcontracts which he enters into the substance of this clause except paragraph (b), and shall require such inclusion in all other subcontracts of any tier, including the obligation to comply with all Cost Accounting Standards in effect on the date of award of the subcontract or if the subcontractor has submitted cost or pricing data, on the date of final agreement on price as shown on the subcontractor's signed Certificate of Current Cost or Pricing Data. This requirement shall apply only to negotiated subcontracts in excess of $100,000 where the price negotiated is not based on:

(i) established catalog or market prices of commercial items sold in substantial quantities to the general public, or (ii) prices set by law or regulation and except that the requirement shall not apply to negotiated subcontracts otherwise exempt from the requirement to accept the "Cost Accounting Standards" clause by reason of Section 331.30(b) of Title 4, Code of Federal Regulations (4 CFR 331.30(b)).

NOTE (1) Subcontractors shall be required to submit their Disclosure Statements to the Contractor. However, if a subcontractor has previously submitted his Disclosure Statement to a Government Contracting Officer he may satisfy that

NASA PROCUREMENT REGULATION

7.104-55