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(b) F.O.B. Origin Government Bills of Lading and Mail Indicia. In accordance with 19-403.3(b), F.O.B. origin contracts, except those utilizing the Fast Payment Procedure clause, shall include the following clause:


F.O.B. origin shipments shall be made on Government bills of lading or, if the supplies are mailable, via the U. S. Postal System, on “Postage and Fees Paid" indicia labels. Quantities will not be divided into mailable lots for the express purpose of avoiding movement by other modes of transportation. When shipments are mailed via the postal system of a foreign country, postal charges shall be prepaid and added as a separate item on the invoice. In the absence of other arrangements, Government bills of lading can be obtained by completing and submitting DD Form 1659, “Application for United States Government Bill of Lading/Export Traffic Release". DD Form 1659 and/or “Postage and Fees Paid" indicia labels may be obtained from the Contract Administration Office. Unless otherwise directed, the Contractor shall address overseas parcel post to the ultimate consignee in care of a designated Army or Navy (fleet) post office and not to, or in care of, a transportation officer, or other activity officer at a CONUS water or aerial terminal for transshipment.

(End of clause)

7-104.86 Notification of Changes. Following is an example of a clause for use in accordance with 26-802:


(a) Definitions. As used in this clause, (i) the term “Contracting Officer" does not include any representative of the Contracting Officer whether or not such representative is acting within the scope of his authority, and (ii) the term "specifically authorized representative" means any person the Contracting Officer has so designated by written notice which shall refer to this subparagraph and shall be issued to the designated representative prior to his invocation of such authority (and a copy of which shall be provided to the Contractor).




(b) Notice. The primary purpose of this clause is to obtain prompt reporting of Government conduct which the Contractor considers to constitute a change to this contract. Except for changes identified as such in writing and signed by the Contracting Officer, the Contractor shall notify the Administrative Contracting Officer in writing promptly, and in any event within ...........* (*to be negotiated) calendar days from the date that the Contractor identifies any Government conduct (including actions, inactions, and written or oral communications) which the Contractor regards as a change to the contract terms and conditions. The Notice shall state, on the basis of the most accurate information available to the Contractor:

(i) the date, nature, and circumstances of the conduct regarded as a change;
(ii) the name, function, and activity of each Government individual and contractor offi-

cial or employee involved in or knowledgeable about such conduct;
(iii) the identification of any documents and the substance of any oral communication in-

volved in such conduct; (iv) in the instance of alleged acceleration of scheduled performance or delivery, the

basis upon which it arose;
(v) the particular elements of contract performance for which the Contractor may seek

an equitable adjustment under this clause, including:
(1) what contract line item(s) have been or may be affected by the alleged change;
(2) what labor or materials or both have been or may be added, deleted, or wasted

by the alleged change;
(3) to the extent practicable, what delay and disruption in the manner and sequence

of performance and effect on continued performance have been or may be

caused by the alleged change; (4) what adjustments to contract price, delivery schedule, and other provisions af

fected by the alleged change are estimated;

and (vi) the Contractor's estimate of the time by which the Government must respond to the

Contractor's notice to minimize cost, delay or disruption of performance. (c) Continued Performance. Following submission of the notice required by (b) above, the Contractor shall diligently continue performance of this contract to the maximum extent possible in accordance with its terms and conditions as construed by the Contractor, unless such notice reports a direction of the Contracting Officer or a communication from a specifically authorized representative of the Contracting Officer, in either of which events the Contractor shall continue performance in compliance therewith, provided, however, that if the Contractor regards the direction or communication as a change as described in (b) above, notice shall be given as therein provided. All directions, communications, interpretations, orders and similar actions of such specifically authorized representative shall be reduced to writing promptly and copies thereof furnished to the Contractor and to the Contracting Officer. The Contracting Officer shall promptly countermand any action which exceeds the authority of the specifically authorized representative.

(d) Government Response. The Contracting Officer shall promptly, and in any event within ..........* (**10 be negotiated) calendar days after receipt of NOTICE, respond thereto in writing. In such response the Contracting Officer shall either;

(i) confirm that the conduct of which the Contractor gave notice constitutes a change

and when necessary direct the mode of further performance, (ii) countermand any communication regarded as a change, (iii) deny that the conduct of which the Contractor gave notice constitutes a change and

when necessary direct the mode of further performance;

or (iv) in the event the Contractor's notice information is inadequate to make a decision

under (i), (ii), or (iii) above, advise the Contractor what additional information is required, and establish the date by which it should be furnished and the date

thereafter by which the Government will respond. (e) Equitable Adjustments. If the Contracting Officer confirms that Government conduct effected a change as alleged by the Contractor, and such conduct causes an increase or decrease in the Contractor's cost of, or the time required for, performance of any part of the work under this contract, whether changed or not changed by such conduct, an equitable adjustment shall be made:




(i) in the contract price or delivery schedule or both; and

(ii) in such other provisions of the contract as may be affected; and the contract shall be modified in writing accordingly. In the case of drawings, designs or specifications which are defective and for which the Government is responsible, the equitable adjustment shall include the cost and time extension for delay reasonably incurred by the Contractor in attempting to comply with such defective drawings, designs or specifications before the Contractor identified, or reasonably should have identified, such defect. When the cost of property made obsolete or excess as a result of a change confirmed by the Contracting Officer pursuant to this clause is included in the equitable adjustment, the Contracting Officer shall have the right to prescribe the manner of disposition of such property. The equitable adjustment shall not include increased costs or time extensions for delay resulting from the Contractor's failure to provide notice or to continue performance as provided, respectively, in (b) and (c) above. NOTE: The phrases “contract price" and "cost" wherever they appear in the foregoing clause, may be appropriately modified to apply to cost-reimbursement or incentive type contracts, or to combinations thereof.

(End of clause)

7-104.87 Cost/Schedule Control Systems. In accordance with 1-331(h), insert the following clause:


(a) The Contractor shall establish, maintain and use in the performance of this contract Cost/Schedule Control Systems meeting the attached criteria (DODI 7000.2 Performance Measurement for Selected Acquisitions). Prior to acceptance by the Contracting Officer and within ninety (90) (*or as otherwise agreed to by the parties) calendar days after contract award, the Contractor shall be prepared to demonstrate the operation of his systems to the Government to verify that the proposed systems meet the established criteria set forth above. As a part of the demonstration, review and acceptance procedure, the Contractor shall furnish the Government a description of the Cost/Schedule Control Systems applicable to this contract in such form and detail as indicated by the AFSCP/AFLCP 173-S, DARCOM-P 715-5, NAVMAT P-5240 Cost Schedule Control Systems Criteria Joint Implementation Guide hereinafter referred to as the guide, or required by the Contracting Officer. The Contractor agrees to provide access to all pertinent records, data and plans as requested by representatives of the Government for the conduct of the review.

(b) The description of the management systems accepted by the Contracting Officer, identified by title and date, shall be referenced in the contract. Such systems shall be maintained and used by the Contractor in the performance of this contract.

(c) Contractor changes to the accepted systems shall be submitted to the Contracting Officer for review and approval. The Contracting Officer shall advise the Contractor of the acceptability of such changes within sixty (60) days after receipt from the Contractor. When systems existing at time of contract award do not comply with the criteria, adjustments necessary to assure compliance will be effected at no change in contract price or fee.

(d) The Contractor agrees to provide access to all pertinent records and data requested by the Contracting Officer or his duly authorized representative for the purpose of permitting Government surveillance to insure continuing application of the accepted systems to this contract. Deviations from accepted systems discovered during contract performance shall be corrected as directed by the Contracting Officer

(e) The Contractor shall require that each selected subcontractor, as mutually agreed to between the Government and the Contractor and as set forth in the schedule of this contract. shall meet the Cost/Schedule Control Systems criteria as set forth in the guide and shall incorporate in all such subcontracts adequate provisions for demonstration, review, acceptance and surveillance of subcontractors' systems, to be carried out by the Government when requested by either the prime or subcontractor.

(f) If the Contractor or subcontractor is utilizing Cost/Schedule Control Systems which have been previously accepted, or is operating such systems under a current Memorandum of Un



CONTRACT CLAUSES AND SOLICITATION PROVISIONS derstanding, the Contracting Officer may waive all or part of the provisions hereof concerning

demonstration and review.

(End of clause)

7-104.88 Advertising and Coupon Redemption for Military Resale Activities. To preclude any implied endorsement by military resale activities of commercially advertised products, insert the following clause in all solicitations and resulting contracts for supplies purchased for resale.


The Contractor will not represent in any manner, expressed or implied, that the products purchased hereunder are approved or endorsed by any element of the United States Government. Any advertisement by the Contractor, including price-off coupons, which refers to a military resale activity shall contain the following statement:

“This advertisement is neither paid for nor sponsored, in whole or in part, by any element of the United States Government."

(End of clause)

7–104.89 Engineering Change Proposals (ECP's). In accordance with 26–205, the following is a sample clause:


(a) The Contracting Officer may at any time, in writing, request the Contractor to prepare and submit an Engineering Change Proposal (ECP) as that term is defined in MIL-STD_480, within the scope of this contract, as hereafter set forth. Upon receipt of such request, the Contractor shall submit to the Contracting Officer the information specified by, and in the format required by paragraph 4 of, MIL-STD_480.

(b) Any Contractor ECP shall set forth a “not to exceed" price* and delivery adjustment or a “not less than" price and delivery adjustment, acceptable to the Contractor if the Government subsequently orders such ECP. If ordered, the equitable increase shall not exceed, nor shall the equitable decrease be less than, such “not to exceed" or "not less than" amounts. ** This paragraph does not preclude any revision(s) or correction(s) of an ECP in accordance with paragraph 4.10 and 4.11 of MIL-STD-480. Concurrently with the submission of any ECP under this contract in which the proposed aggregate cost is $100,000 or greater, the Contractor shall submit to the Contracting Officer a completed DD Form 633-5. At the time of agreement upon the price of the ECP, the Contractor shall submit a signed Certificate of Current Cost or Pricing Data.

(End of clause)

The Contracting Officer may include, in the circumstances in 26–205(b), the following paragraph.

(c) If the price * adjustment proposed for any Contractor-originated ECP (excluding any Government-requested ECP or Value Engineering Change Proposal) is *** (percent of the contract price * ) (or $ *** ) or less, such change shall be made at no adjustment of the contract price *

• Use term suitable to type of contract.

** In cost-reimbursement type contracts, replace this sentence with the following sentence:

Change orders issued pursuant to the Changes clause of this contract shall not be considered an authorization to the Contractor to ex




ceed the estimated cost set forth in the Schedule in the absence of a
statement in the change order, or other contract modification, in-
creasing the estimated cost.

... To be negotiated.

7–104.90 Change Order Accounting. In accordance with 26–205, the following is a sample clause:


When the Contracting Officer estimates that the cost of a change or series of related changes will exceed $100,000, he may require change order accounting. The Contractor, for each such change or series of related changes, shall maintain separate accounts, by job order or other suitable accounting procedure, of all incurred segregable, direct costs (less allocable credits), of work, both changed and not changed, allocable to the change. Such accounts shall be maintained until the parties agree to an equitable adjustment for the change order.

(End of clause)

7-104.91 Contracts Conditioned Upon the Availability of Funds. In accordance with 1-318, insert one of the following clauses:

(a) Availability of Funds.


Funds are not presently available for this procurement. The Government's obligation hereunder is contingent upon the availability of appropriated funds from which payment for the contract purposes can be made. No legal liability on the part of the Government for payment of any money shall arise unless and until funds are made available to the Contracting Officer for this procurement and notice of such availability, to be confirmed in writing by the Contracting Officer, is given to the Contractor.

(End of clause)

(b) Availability of Funds for Next Fiscal Year.


Funds are not presently available for performance under this contract beyond ............... . The Government's obligation for performance of this contract beyond this date is contingent upon the availability of appropriated funds from which payment for the contract purposes can be made. No legal liability on the part of the Government for payment of any money for performance under this contract beyond ............................. shall arise unless and until funds are made available to the Contracting Officer for such performance and notice of such availability, to be confirmed in writing by the Contracting Officer, is given to the Contractor.

(End of clause)

7–104.92 Time of Delivery.

(a) Policy and procedures regarding time of delivery are set forth in 1-305. Examples of time of delivery clauses for invitations for bids are set forth below. They may be modified or other clauses may be used to state particular delivery requirements or any special procedures to be used in the evaluation, rejection or award process as regards time of delivery. These clauses also may be suitably modified for use in negotiated procurements when appropriate.



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