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CONTRACT CLAUSES AND SOLICITATION PROVISIONS

PROPERTY RECORDS (1967 AUG) The Government shall maintain the official contract records in connection with Government property under this contract. The “Government Property" clause is hereby modified by deleting so much thereof as requires that the Contractor maintain such records.

(End of clause)

7-104.25 Special Tooling. Insert the following clause in negotiated contracts when the Government is to acquire full rights in special tooling other than as a line item (see 13-305).

SPECIAL TOOLING (1967 OCT) (a) Definition.

(1) The term “special tooling" means all jigs, dies, fixtures, molds, patterns, taps, gauges, other equipment and manufacturing aids, and replacements thereof, which are of such a specialized nature that, without substantial modification or alteration, their use is limited to the development or production of particular supplies or parts thereof, or the performance of particular services. The term includes all components of such items, but does not include:

(i) consumable property;
(ii) special test equipment; or
(iii) buildings, nonseverable structures (except foundations and similar improvements

necessary for the installation of special tooling), general or special machine tools, or

similar capital items. (2) For the purposes of this clause, the term "special tooling" does not include: (i) items acquired by the Contractor prior to the effective date of this contract, or

replacements of such items, whether or not altered or adapted for use in the per

formance of this contract; or (ii) items specifically excluded by the Schedule. (b) Use of Special Tooling. The Contractor agrees not to use any items of special tooling except in the performance of this contract, or as approved by the Contracting Officer.

(c) List of Special Tooling. Within sixty (60) days after delivery of the first production end items under this contract, or such later date as may be prescribed by the Contracting Officer, the Contractor shall if the Contracting Officer so requests, furnish the Contracting Officer a list of all special tooling acquired or manufactured by the Contractor for use in the performance of this contract. The list shall specify the nomenclature, tool number and related product part number or service, and unit or group cost of the special tooling. Upon completion or termination of all or a substantial part of the work under this contract the Contractor shall furnish a final list in the same form covering all items not previously reported under this paragraph; provided, however, that the Contracting Officer may by written notice waive this requirement or extend it until the completion of this contract and other contracts and subcontracts as to which approval has been obtained under paragraph (b) above. Special tooling which has become obsolete as a result of changes in design or specification need not be reported, except as provided for in paragraph (d).

(d) Changes in Design. In the event of any changes in design or specifications which affect interchangeability of parts, the Contractor shall, unless otherwise agreed to by the Contracting Officer, give the Contracting Officer notice of any part which is not interchangeable with the new or superseding part and the usable special tooling for each part covered in such notice shall be retained by the Contractor subject to the provisions of paragraph (i), pending disposition under paragraph (f).

(e) Contractor's Offer to Retain Special Tooling. At the time he furnishes any list or notice under (c) or (d) above, the Contractor may designate those items of special tooling (either specifically or by listing the particular products, parts, or services for which such items were used or designed) which he desires to retain, together with a written offer.

(i) to retain any or all of such items, free and clear of any Government interest, for an

amount designated therein, which should ordinarily not be less than the then fair value of such items which fair value takes into account, among other things, the value of such items to the Contractor for use in further work by him; or

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(ii) to retain any or all such items for such period of time and subject to such terms and

conditions as may be agreed to by the parties hereto, subject to ultimate retention or

disposition of such items in accordance with paragraph (f) hereof. (f) Disposition of Special Tooling. Within ninety (90) days after receipt of any list or notice under paragraph (c) or (d) hereof, or such further period as may be agreed upon by the parties, the Contracting Officer shall furnish to the Contractor:

(i) a list specifying the particular products, parts, or services for which the Government

may require special tooling together with a request that the Contractor transfer title (to the extent not previously transferred under any other clause of this contract) and deliver to the Government all usable items of special tooling which were used or designed for the manufacture or performance of any designated portion of such products, parts, or services, and which were on hand when production of such

products or parts, or performance of such services, ceased; (ii) an acceptance or rejection of any offer made by the Contractor under paragraph (e)

above, or a request for further negotiation with respect thereto; (iii) a direction to the Contractor to sell, or to dispose of as scrap, for the account of the

Government, any or all of the special tooling covered by such list; (iv) a statement with respect to any or all of the special tooling covered by such list that

the Government has no further interest herein and waives its rights therein; or

(v) any combination of the foregoing, as the circumstances warrant. The Contractor shall promptly comply with any request by the Contracting Officer under this paragraph to transfer title to any items of special tooling, and shall: (1) immediately prepare such items for shipment by proper packaging, packing, and marking, in accordance with any instructions which may be issued by the Contracting Officer, and shall promptly deliver such items to the Government as directed by the Contracting Officer; or (2) if a storage agreement has been entered into, prepare such items for storage in accordance therewith, as directed by the Contracting Officer. To the extent that compliance with such directions under (iii), (1) or (2) above occasions any cost to the Contractor for which he will not otherwise be compensated, the contract price shall be equitably adjusted in accordance with the procedures of the “Changes" clause hereof. Any items of special tooling so delivered or stored shall be accompanied by such operation sheets or other appropriate data as are necessary to show the manufacturing operations or processes for which such items were used or designed. If the Contracting Officer has requested further negotiations under (ii) of this paragraph, the Contractor agrees that he will enter into such negotiations in good faith with the Contracting Officer. Any items of special tooling which are not disposed of by transfer of title and delivery to the Government, or by acceptance of an offer of the Contractor made under paragraph (e), or of such offer as modified in the course of negotiations, shall be disposed of in the manner set forth in (iii) or (iv) of this paragraph. Any failure of the Contracting Officer to give the directions required under (i)-(v) above within the specified period shall be construed as a direction pursuant to (iii) above.

(g) Proceeds of Retention or Disposition of Special Tooling. If the Contracting Officer accepts an offer of the Contractor to retain any items of special tooling, or if any such items are sold to third parties or disposed of as scrap, the net proceeds shall: (i) be deducted from the amounts due to the Contractor under this contract and the contract amended accordingly; or (ii) be otherwise paid as the contracting Officer may direct.

(h) Property Control. The Contractor agrees that he will follow his normal industrial practice in maintaining property control records on all the special tooling, and that he will make such records available for inspection by the Government at all reasonable times. The Contractor further agrees that, to the extent practicable, he will identify by appropriate stamp, tag or other mark all special tooling subject to this clause.

(i) Maintenance Pending Disposition. The Contractor agrees that between the date any usable items of special tooling are no longer needed by him, within the meaning of this clause, and the date of final disposition of such items under this clause, he will take all reasonable steps necessary to maintain the identity and existing conditions of such items, unless the Contracting Officer has directed that such items be disposed of as scrap or has given notice under (O)(iv). The Contractor shall not be required to keep any such items in place.

(j) Special Tooling Provisions for Subcontracts. The Contractor agrees that, in placing any subcontracts or purchase orders under this contract which involve the use of special tooling, the full

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cost of which is charged to such subcontract or purchase order, he will include therein appropriate provisions to obtain rights comparable to those granted to the Government by this clause, unless the Contracting Officer determines, upon the Contractor's request, that, with respect to any subcontract, purchase order, or class thereof, such rights are not of substantial interest to the Government. The Contractor further agrees that he will exercise any such rights for the benefit of the Government, as the Contracting Officer may direct.

(End of clause)

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

SPECIAL TEST EQUIPMENT (1973 APR)

(a) Special test equipment means either single or multipurpose integrated test units engineered, designed, fabricated, or modified to accomplish special purpose testing in the performance of the contract. Such testing units comprise electrical, electronic, hydraulic, pneumatic, mechanical, or other items or assemblies of equipment, that are mechanically, electrically, or electronically interconnected so as to become a new functional entity, causing the individual item or items to become interdependent and essential in the performance of special purpose testing in the development or production of particular supplies or services. The term "special test equipment" does not include:

(i) material;
(ii) special tooling;
(iii) buildings and nonseverable structures (except, foundations and similar improvements

necessary for the installation of special test equipment), or (iv) plant equipment items used for general plant testing purposes. (b) Subject to prior approval by the Contracting Officer the Contractor may either acquire or fabricate at Government expense, special test equipment not otherwise itemized in the contract. The Contractor shall provide the Contracting Officer a written notice, at least thirty (30) days in advance, of his intention to acquire or fabricate such special test equipment or components. As a minimum, the following information shall be submitted by the Contractor:

(i) For each item of special test equipment or component costing $1,000 or more:
(A) The end use application and function of each proposed special test unit identify-

ing special characteristics. Reasons for the classification of the test unit as spe

cial test equipment shall be included;
(B) A complete description identifying the items to be acquired and the items to be

fabricated by the Contractor;
(C) The estimated cost of the item of special test equipment or component;

and
(D) A statement that intra-plant screening of Contractor and Government-owned

special test equipment and components has been accomplished and none are

available for use in the performance of this contract. (ii) The aggregate estimated cost of all items and components, the individual cost of

which is less than $1,000. (c) If the Government furnishes rather than approves acquisition or fabrication of special test equipment or any components thereof, such items shall be furnished subject to the Government Property clause. The Government shall not be obligated to deliver such items any sooner than the Contractor could have acquired or fabricated them after expiration of the thirty (30) day notice period prescribed in paragraph (b) above. If the Contractor has not received such written notice within the period prescribed, he may proceed to acquire such equipment or components subject to any other applicable provision of this contract.

(d) The Contractor shall, with respect to any subcontract hereunder which provides that special test equipment or components may be acquired or fabricated for the Government, insert provisions in the subcontract which conform substantially to the language of this clause, including this paragraph (d) and furnish the names of such subcontractors to the Contracting Officer.

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(e) If an engineering change requires either the acquisition or fabrication of new, or substantial modification to existing special test equipment, the Contractor shall comply with (b) above. Reference shall be made to the change order which resulted in either the proposed acquisition or fabrication of, or modification to special test equipment.

(End of clause)

7-104.27 Options.

(a) A clause substantially as follows may be used when the contract expresses the option quantity as a percentage of the basic contract quantity or as an additional quantity of a specific line item.

OPTION FOR INCREASED QUANTITY

The Government may increase the quantity of supplies called for herein by the amount stated in the Schedule and at the unit price specified therein. The Contracting Officer may exercise this option, at any time within the period specified in the Schedule, by giving written notice to the Contractor. Delivery of the items added by the exercise of this option shall continue immediately after, and at the same rate as, delivery of like items called for under this contract unless the parties otherwise agree.

(End of clause)

(b) A clause substantially as follows may be used when the contract identifies the option quantity as a separately priced line item having the same nomenclature as a corresponding basic contract line item.

OPTION FOR INCREASED QUANTITY

The Government may increase the quantity of supplies called for herein by requiring the delivery of the numbered line item identified in the Schedule as an option item, in the quantity and at the price set forth therein. The Contracting Officer may exercise this option, at any time within the period specified in the Schedule by giving written notice to the Contractor. Delivery of the items added by the exercise of this option shall continue immediately after, and at the same rate as, delivery of like items called for under this contract unless the parties otherwise agree.

(End of clause)

(c) A clause substantially as follows may be used when it is intended to extend the services described in the schedule.

OPTION TO EXTEND THE TERM OF THE CONTRACT

This contract is renewable, at the option of the Government, by the Contracting Officer giving written notice of renewal to the Contractor within the period specified in the schedule; provided, that the Contracting Officer shall have given preliminary notice of the Government's intention to renew at least sixty (60) days before this contract is to expire. (Such a preliminary notice will not be deemed to commit the Government to renewals.) If the Government exercises this option for renewal, the contract as renewed shall be deemed to include this option provision. However, the total duration of this contract, including the exercise of any options under this clause, shall not exceed........years.

(End of clause)

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(d) One of the following paragraphs shall be added to the Option clause when the Government either knows or anticipates that the option may be exercised to fulfill Foreign Military Sales (FMS) requirements. These added provisions are not required nor shall they be placed into contracts for the establishment or replenishment of Department of Defense inventories or stocks, or procurements made under DoD Cooperative Logistic Support Arrangements.

(1) Insert a paragraph substantially as follows when the Government and the contractor are able to negotiate a price in advance for FMS requirements:

The U. S. Government may exercise the option or options under this clause to fulfill Foreign Military Sales commitments undertaken by the U. S. Government on behalf of a foreign country.

(2) Insert a paragraph substantially as follows when the Government anticipates that the option may be exercised for FMS requirements and the Government and the contractor are unable to negotiate any additional cost or profit considerations attributable to FMS included in 6-1304 and 3-808.8(a) until a specific country or countries are subsequently identified:

Thc U. S. Government may cxcrcise the option or options under this clause to fulfill Foreign Military Sales commitments undertaken by the U. S. Government on hchalf of a foreign country. At the date of exercise of the option, the U. S. Government will identify the foreign country for the purpose of negotiating an cquitable price adjustment for any additional cost or profit considerations attributable to Foreign Military Sales included in 6-1304 and 3-808.8(a), Failure to agree to such an cquitable adjustment shall be treated as a dispute within the mcaning of the clause of this contract cntitled "Disputes":

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