CONTRACT CLAUSES AND SOLICITATION PROVISIONS 7-303.9 Notice to the Government of Labor Disputes. Insert the clause in 7-104.4 in all contracts involving the furnishing of production of any item on the Department of Defense Master Urgency List and in any other contract of a class or kind which the Head of the Procuring Activity concerned determines to be appropriate for the use of such a clause.

7-303.10 Limitation on Withholding of Payments. In accordance with 7-104.21, insert the clause therein.

7-303.11 Special Termination Costs. In accordance with 8-712, insert the clause in 7-108.3.

7-303.12 Subcontracts. In accordance with 23-201.1, insert the clause in

7-104.23.

7-303.13 Material Inspection and Receiving Report. Insert the clause in 7-104.62.

7-303.14 Frequency Authorization. In accordance with 7-104.61, insert the clause therein.

7-303.15 Quality Program. In accordance with 14-304, insert the clause in 7-104.28.

7-303.16 Price Reduction for Defective Cost or Pricing Data. In accordance with 7-104.29, insert the appropriate clause therein.

7-303.17 Ground and Flight Risk. In accordance with 10-404, insert the clause in 7-104.10.

7-303.18 Duty-Free Entry. In accordance with 6-603.3, insert the clauses in

7-104.31.

7-303.19 Duty-Free Entry of Listed Canadian Supplies. In accordance with 6-605.2, insert the clause in 7-104.32.

7-303.20 Safety Precautions for Ammunition and Explosives. In accordance with 7-104.79, insert the clause therein.

7-303.21 Advance Payments. When advance payments are to be made in accordance with Appendix E, Part 4, insert the clause in 7-104.34.

7-303.22 Workmen's Compensation and War Hazard Insurance Overseas. In accordance with 10-403, insert the clauses in 7-104.2(a) and/or 7-104.2(b) depending on whether all contract employees are subject to the Defense Base Act or whether the Act has been waived as to all or part of the contract employees. Also insert the clause Reimbursement for War Hazard Losses in 7-104.2(c) and the language at 10-502(b) and (c) according to the instructions stated in those paragraphs.

7-303.23 Progress Payments. In accordance with E-510, insert one of the clauses in 7-104.35.

7-303.24 Required Source for Jewel Bearings. In accordance with 1-2207.2, insert the clause in 7-104.37.

7-303.25 Notice of Radioactive Materials. In accordance with 7-104.80, insert the clause therein.

7-303.26 Interest. In accordance with E-620, insert the clause in 7-104.39. 7-303.27 Competition in Subcontracting. In accordance with 7-104.40, insert the clause therein.

7-303.28 Audit by Department of Defense. In accordance with 7-104.41(a), insert the clause therein.

7-303.28

ARMED SERVICES PROCUREMENT REGULATION

CONTRACT CLAUSES AND SOLICITATION PROVISIONS

7-303.29 Subcontractor Cost and Pricing Data. In accordance with 7-104.42, insert the appropriate clause therein.

7-303.30 United States Products (Military Assistance Program). In accordance with 6-703.4, insert the clause in 7-2003.51.

7-303.31 Value Engineering. Subject to the limitations in 1-1702, insert the appropriate clause(s) in 7-104.44 as applicable.

7-303.32 Management Systems Requirements. In accordance with 16-827.1, insert the clause in 7-104.50.

7-303.33 Non-Use of Foreign Flag Vessels Engaged in Cuban and North Vietnam Trade. In accordance with 1-1404 and 1-1410, insert the appropriate clause in 7-104.19.

7-303.34 New Material. In accordance with 1-1208, insert the clause in 7-104.48.

7-303.35 Limitation of Liability. In accordance with 1-330(b), insert the appropriate clause in 7-104.45.

7-303.36 Bills of Lading Covering Shipments From Contractor's Plant. In accordance with the requirements of 19–217.1(a), insert the clause in 7-103.25.

7-303.37 Special Test Equipment. Insert the clause in 7-104.26 in negotiated contracts which provide that the contractor will acquire special test equipment for the Government but do not specify the items to be acquired (see 13-306.3(c)).

7-303.38 Contract Schedule Subline Items Not Separately Priced. In accordance with 20–304.2(c)(ii), insert the clause in 7-104.7.

7-303.39 First Article Approval. In accordance with 1–1904, insert the appropriate clause in 7-104.55.

7-303.40 Order of Precedence. In accordance with 3-501(b)Sec.C(xxxi), insert the clause in 7-2003.41.

7-303.41 United States Products and Services (Balance of Payments Program.) In accordance with 6–806.4, insert the clause in 7-2003.53.

7-303.42 Identification of Expenditures in the United States. In accordance with 6-807, insert the clause in 7-104.58.

7-303.43 Reserved.

7-303.44 Care of Laboratory Animals. In compliance with law and in furtherance of the Department of Defense policy that all aspects of investigative programs involving the use of experimental or laboratory animals be humanely conducted in accordance with recognized principles, the following clause shall be included in all contracts awarded in the United States, its possessions, and Puerto Rico, which may involve the use of such animals.

CARE OF LABORATORY ANIMALS (1974 APR)

(a) Before undertaking performance of any contract involving the use of laboratory animals, the Contractor shall register with the Secretary of Agriculture of the United States in accordance with Section 6, P.L. 89–544, Laboratory Animal Welfare Act, 24 August 1966 as amended by P.L. 91-579, Animal Welfare Act of 1970, 24 December 1970. The Contractor shall furnish evidence of such registration to the contracting officer.

(b) The Contractor shall acquire animals used in research and development programs from a dealer licensed by the Secretary of Agriculture, or from exempted sources in accordance with the Public Laws enumerated in (a) above.

7-303.44

ARMED SERVICES PROCUREMENT REGULATION

CONTRACT CLAUSES AND SOLICITATION PROVISIONS

(c) In the care of any live animals used or intended for use in the performance of this contract, the Contractor shall adhere to the principles enunciated in the Guide for Care and Use of Laboratory Animals prepared by the Institute of Laboratory Animal Resources, National Academy of Sciences-National Research Council, and in the United States Department of Agriculture's regulations and standards issued under the Public Laws enumerated in (a) above. In case of conflict between standards, the higher standard shall be used. Contractor reports on portions of the contract in which animals were used shall contain a certificate stating that the animals were cared for in accordance with the principles enunciated in the Guide for Care and Use of Laboratory Animals prepared by the Institute of Laboratory Animal Resources, NAS-NRC, and/or in the regulations and standards as promulgated by the Agricultural Research Service, USDA, pursuant to the Laboratory Animal Welfare Act of 24 August 1966, as amended (P.L. 89–544 and P.L. 91-579). NOTE: The Contractor may request registration of his facility and a current listing of licensed dealers from the Regional Office of the Animal and Plant Health Inspection Service (APHIS), USDA, for the region in which his research facility is located. The location of the appropriate APHIS Regional Office as well as information concerning this program may be obtained by contacting the Senior Staff Officer, Animal Care Staff, USDA/APHIS, Federal Center Building, Hyattsville, Maryland, 20782.

(End of clause)

7-303.45 Recovery of Nonrecurring Costs on Non-US Government Sales of Defense Equipment. In accordance with 4-110(d), insert the clauses in 7–104.64, as appropriate.

7-303.46 Insurance. In accordance with 10-405, insert the clause in 7-104.65.

7-303.47 Use of Excess and Near-Excess Currency. In accordance with 6-1110, insert the clause in 7-104.66.

7-303.48 Aircraft, Missile and Space Vehicle Accident Reporting and Investigation. In accordance with 7-104.81, insert the clause therein.

7-303.49 Procurement of Miniature and Instrument Ball Bearings. In accordance with 1-2207.3, insert the clause in 7-104.38.

7-303.50 Equal Opportunity Pre-Award Clearance of Subcontracts. In accordance with 23-201.4, insert the clause in 7-104.22.

7-303.51 Minority Business Enterprises. In accordance with 1-332, insert the appropriate clause or clauses in 7-104.36.

7-303.52 Procurement of Precision Components for Mechanical Time Devices. In accordance with 1-2207.4, insert the clause in 7-104.46.

7-303.53 Payment of Interest on Contractor's Claims. In accordance with 1-333, insert the clause in 7-104.82.

7-303.54 Rights in Data. In accordance with 7-104.9 insert the appropriate clause, or clauses, therein.

7-303.55 Cost Accounting Standards. In accordance with 3-1204, insert the clauses in 7-104.83.

7-303.56 Contractor's Identification of Changes. In accordance with 26-802, insert a clause as provided in 7-104.86.

7-303.57 Cost Schedule Control Systems. In accordance with 1–331(h) and 3-501(b) Section C (xlv), insert the clause in 7-104.87.

7-303.58 Engineering Change Proposals (ECP's). In accordance with 26-205, insert the clause in 7-104.89.

7-303.59 Change Order Accounting. In accordance with 26-205, insert the clause in 7-104.90.

7-303.59

ARMED SERVICES PROCUREMENT REGULATION

CONTRACT CLAUSES AND SOLICITATION PROVISIONS

7-303.60 Capture and Detention. In accordance with 10-406, insert the clause in 7-104.94.

7-303.61 Indemnification Under 10 USC 2354. In accordance with 10-701, insert the following clause:

INDEMNIFICATION UNDER 10 U.S.C. 2354

FIXED PRICE (1974 APR)

(a) Pursuant to the authority of 10 U.S.C. 2354, notwithstanding any other provision of this contract, but subject to the following paragraphs of this clause, the Government shall hold harmless and indemnify the Contractor against:

(i) claims (including reasonable expenses of litigation or settlement) by third persons (including employees of the Contractor) for death, bodily injury (including sickness

or disease), or loss of, damage to, or loss of use of property;

(ii) loss of or damage to property of the Contractor, and loss of use of such property, but excluding loss of profit; and

(iii) loss of, damage to, or loss of use of property of the Government;

to the extent that such a claim, loss or damage (A) arises out of the direct performance of this contract; (B) is not compensated by insurance or otherwise; and (C) results from a risk defined in this contract to be unusually hazardous. Any such claim, loss, or damage within deductible amounts of Contractor's insurance shall not be covered under this clause.

(b) The Government shall not be liable for any such claim, loss or damage that results 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 has supervision or direction of (i) all or substantially all of the Contractor's business, or (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. The Contractor shall not be indemnified under this clause for liability assumed under any contract or agreement (except for subcontracts which are covered by paragraph (d) below) unless such assumption of liability has been specifically approved by the Contracting Officer; (or in contracts with the Department of the Navy, The Department.)

(c) No payment shall be made by the Government under this clause unless the amount thereof shall first have been certified to be just and reasonable by the Secretary or his representative designated for such purpose. Such payments shall be made from funds as stated in 10 U.S.C. 2354. The rights and obligations of the parties under this clause shall survive the termination, expiration, or completion of this contract.

(d) With the prior written approval of the Contracting Officer, the Contractor may include in any subcontract under this contract the same provisions as those in this clause, whereby the Contractor shall indemnify the subcontractor against any risk defined in this contract to be unusually hazardous. Such a subcontract shall provide the same rights and duties, and the same provisions for notice, furnishing of papers and the like, between the Contractor and the subcontractor as are established by this clause. The Contracting Officer may also approve similar indemnification of lower tier subcontractors upon the same terms and conditions. Subcontracts providing for indemnification within the purview of this clause shall entitle the Contractor or the Government, or both, to direct, participate in, and supervise the settlement or defense of relevant actions and claims. The Government shall indemnify the Contractor with respect to his obligations to subcontractors under subcontract provisions thus approved by the Contracting Officer. The Government may discharge its obligations under this paragraph by making payments directly to subcontractors or to persons to whom the subcontractors may be liable.

(e) If insurance coverage maintained by the Contractor on the date of the execution of this contract is reduced, the liability of the Government under this clause shall not, by reason of such reduction, be increased to cover risks theretofore insured, unless the Contracting Officer consents thereto in consideration of an equitable adjustment to the Government, if appropriate, of the price in a fixed-price contract, or the fee in a cost-reimbursement type contract, in such amount as the parties may agree.

7-303.61

ARMED SERVICES PROCUREMENT REGULATION

CONTRACT CLAUSES AND SOLICITATION PROVISIONS

(f) The Contractor shall (i) promptly notify the Contracting Officer of any occurrence, action or claim he learns of that reasonably may be expected to involve indemnification under this clause, (ii) furnish evidence or proof of any claim, loss or damage in the manner and form required by the Government, and (iii) immediately furnish to the Government copies of all pertinent papers received by the Contractor. The Government may direct, participate in, and supervise the settlement or defense of any such claim or action. The Contractor shall comply with the Government's directions, and execute any authorizations required, in regard to such settlement or defense.

(g) The Contractor shall procure and maintain, to the extent available, such insurance against unusually hazardous risks as the Contracting Officer (or in contracts with Department of the Navy, The Department) may from time to time require or approve. All such insurance shall be in such form, in the amounts, for the periods of time, at such rates, and with such insurers, as the Contracting Officer (or in contracts with Department of the Navy, The Department) may from time to time require or approve. The obligations of the Government under this clause shall not apply to claims, loss or damage to the extent that insurance is available and is either required or approved pursuant to this paragraph. The Contractor shall be reimbursed the cost of any such insurance in excess of that maintained by the Contractor as of the date of this contract, to the extent the cost thereof is properly allocable to this contract and is not included in the contract price.

(End of clause)

7-303.62 Indemnification Under Public Law 85-804. In accordance with 10-702, insert the following clause.

INDEMNIFICATION UNDER PUBLIC LAW 85-804

FIXED PRICE (1974 APR)

(a) Pursuant to Public Law 85-804 (50 U.S.C. 1431 - 1435) and Executive Order 10789, as amended, and notwithstanding any other provision of this contract, but subject to the following paragraphs of this clause, the Government shall hold harmless and indemnify the Contractor against:

(i) claims (including reasonable expenses of litigation or settlement) by third persons (including employees of the Contractor) for death, personal injury, or loss of, damage to, or loss of use of property;

(ii) loss of or damage to property of the Contractor, and loss of use of such property but excluding loss of profit; and

(iii) loss of, damage to, or loss of use of property of the Government but excluding loss of profit;

to the extent that such a claim, loss or damage (A) arises out of or results from a risk defined in this contract to be unusually hazardous or nuclear in nature and (B) is not compensated by insurance or otherwise. Any such claim, loss or damage within deductible amounts of Contractor's insurance shall not be covered under this clause.

(b) The Government shall not be liable for:

(i) claims by the United States (other than those arising through subrogation) against the Contractor; or

(ii) losses affecting the property of such Contractor;

when the claim, loss or damage was caused by the willful misconduct or lack of good faith on the part of any of the Contractor's directors or officers, or principal officials. For purposes of this clause, the term “principal officials" means any of the Contractor's managers, superintendents, or other equivalent representatives who have supervision or direction of:

(A) all or substantially all of the Contractor's business, or

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

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

The Contractor shall not be indemnified under this clause for liability assumed under any contract or agreement unless such assumption of liability has been specifically authorized by the

7-303.62

ARMED SERVICES PROCUREMENT REGULATION