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CONTRACT CLAUSES AND SOLICITATION PROVISIONS

cost of steel) obtained by multiplying ...................... percent of the contract unit price by a fraction, the numerator of which shall be the current steel index and the denominator of which shall be the base steel index; and (iii) the amount equal to ............... percent of the original contract unit price (representing that portion of such unit price which relates neither to the cost of labor nor to the cost of steel and which is therefore not subject to revision (see Note (1)); provided, however, that any revised contract unit price made pursuant to the provisions of this clause shall in no event exceed one hundred and ten percent (110%) of the original contract unit price. All computations shall be made to the nearest one-hundredth of one cent.

(f) Pending revisions of the contract unit prices, if any, to be made pursuant to this clause, the Contractor shall be paid the contract unit prices for deliveries made. Within thirty days after the final delivery of supplies, or within such further period of time as may be authorized by the Contracting Officer, the Contractor shall furnish a statement setting forth and certifying the correctness of (i) the average straight time hourly earnings of the Contractor's employees in the shop of the Contractor identified in paragraph (c) above which earnings are relevant to the computations of the “base labor index" and the "current labor index" and (ii) the Contractor's established prices (see Note (8)] including all applicable extras for like quantities of the item identified in paragraph (d) above, which prices are relevant to the computation of the "base steel index" and the "current steel index." Upon request of the Contracting Officer, the Contractor shall make available his records used in the computation of the labor indices. After the receipt of such certificate by the Contracting Officer, the revised contract unit prices shall be computed in accordance with the provisions of this clause, and this contract shall be modified accordingly. However, no modification to this contract shall be made pursuant to this clause until the revised established price (see Note (8)) has been verified by the Contracting Officer.

(g) In the event of any total or partial termination of any item of this contract for the convenience of the Government, the month in which notice of such termination is received by the Contractor, if prior to the month in which the delivery is required by this contract, shall be considered the month in which delivery of such terminated or partially terminated item is required for the purpose of determining the current labor and steel indices under paragraphs (c) and (d) hereof; provided, however, that as to the quantity of such item which is not terminated for convenience, the month in which delivery is required by this contract shall continue to apply for determining said indices. In the case of termination of any steel item for default of the Contractor, any price revision shall be limited to the quantity of such item which has been delivered by the Contractor and accepted by the Government prior to receipt by the Contractor of notice of termination for default.

(h) As used in this clause the phrase "the month in which delivery of supplies is required to be made in accordance with the terms of this contract" shall mean any month in which under the terms of this contract a specific quantity of units of the supplies called for by this contract is required to be delivered; provided, however, that in the case of the failure of the Contractor to make delivery of such quantity shall have arisen out of causes beyond the control and without the fault or negligence of the Contractor, within the meaning of the clause of this contract entitled "Default," the quantity not delivered shall be required to be delivered as promptly as possible after the cessation of the cause of such failure, and the delivery schedule set forth in this contract shall be amended accordingly.

NOTES:

(1) Bidder insert the same percentage figures for the corresponding blanks in paragraphs (6) and in (e)(i) and (ii). In paragraph (e)(iii), bidder insert the percentage representing the difference between the sum of the percentages inserted in paragraph (b) and 100 percent.

(2) Bidder identify the shop and plant in which the standard steel mill item identified in paragraph (d) will be finally fabricated or processed into the contract item.

(3) Bidder insert the month of bid opening, or the month in which the Contractor submitted his proposal if this is a negotiated contract.

(4) Bidder insert the unit price and unit measure of the standard steel mill item used by the Contractor in the manufacture of the contract item.

(5) Bidder identify the standard steel mill item used by the Contractor in the manufacture of the contract item.

7-106.2

ARMED SERVICES PROCUREMENT REGULATION

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CONTRACT CLAUSES AND SOLICITATION PROVISIONS (6) Bidder insert the date set for bid opening, or the date of the Contractor's quotation if this is a negotiated contract.

(7) Bidder insert the number of days which represents the Contractor's best estimate of the period of time required for processing the standard steel mill item in the shop identified in paragraph (c).

(8) In negotiated procurements of nonstandard steel items, when there is no "established price" or when it is not desirable to use such price, this paragraph may refer to another appropriate price basis, such as an established interplant price.

(End of clause)

7-106.3 Price Adjustment Clause for Standard Supplies. In accordance with 3–404.3(c)(1)c, insert the following clause.

ECONOMIC PRICE ADJUSTMENT-STANDARD SUPPLIES (1978 AUG)

(a) The Contractor warrants that the unit price stated herein for .......... is not in excess of the Contractor's applicable established price in effect on the contract date for like quantities of the same item. The term “unit price" excludes any part of the price which reflects requirements for preservation, packaging and packing beyond standard commercial practice. The term “established price" means one which (i) is an established catalog or market price for a commercial item sold in substantial quantities to the general public, and (ii) meets the criteria of paragraph 3–807.7(b) of the Armed Services Procurement Regulation. Such price is the net price after applying any applicable standard trade discounts offered by the Contractor from his catalog, list, or schedule price.

(b) The Contractor shall promptly notify the Contracting Officer as to the amount and effective date of each decrease in any applicable established price, and each corresponding contract unit price shall be decreased by the same percentage that the said established price is decreased. Such decrease shall apply to items delivered on and after the effective date of the decrease in the Contractor's established price, and this contract shall be modified accordingly. The Contractor shall certify on each invoice that each unit price stated therein reflects all decreases required by this clause, or shall certify on the final invoice that all price decreases required by this clause have been applied in the manner herein required.

(c) If the Contractor's applicable established price is increased after the contract date, the corresponding contract unit price shall be increased, upon the Contractor's request in writing to the Contracting Officer, by the same percentage that the established price is increased and the contract shall be modified accordingly, provided that:

(1) The aggregate of the increases in any contract unit price made under this clause shall not exceed ten percent (10%) of the original contract unit price;

(2) The increased contract unit price shall be effective on the effective date of the increase in the applicable established price of the Contractor's written request is received by the Contracting Officer within 10 days thereafter, but if not, the effective date of the increased unit price shall be the date of receipt by the Contracting Officer of such request;

(3) The increased contract unit price shall not apply to quantities scheduled under the contract for delivery before the effective date of the increased contract unit price unless the Contractor's failure to deliver before such date results from causes beyond the control and without the fault or negligence of the Contractor, within the meaniog of the "Default" clause of this contract;

(4) No modification incorporating an increase in a contract unit price shall be executed pur. suant to this clausc until the increase in the applicable established price has been verified by the Contracting Officer,

(d) Within 30 days after receipt of a Contractor's written request, the Contracting Officer may cancel, without liability to either party, any portion of the contract affected by the requested incrcase and undelivered at the time of such cancellation.

(e) Pending any cancellation as provided in (d) above and thereafter if there is no cancellation, the Contractor shall continue deliveries according to the delivery schedule of the contract and shall be paid for such deliveries at the contract unit price increased to the extent provided by (c) above.

(End of clause)

7-106.3

ARMED SERVICES PROCUREMENT REGULATION

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CONTRACT CLAUSES AND SOLICITATION PROVISIONS

7-106.4 Price Adjustment Clause for Semistandard Supplies. In accordance with 3-404.3(c)(1)d, insert the following clause.

ECONOMIC PRICE ADJUSTMENT-SEMISTANDARD SUPPLIES (1978 AUG) (a) The Contractor warrants that the supplies identified as line items

............, and .......... on the schedule of this contract are supplies for which, except for modifications required by the specifications of this contract, the Contractor has an established price. The term “established price" means one which (i) is an established catalog or market price of a commercial item sold in substantial quantities to the general public, and (ii) meets the criteria of paragraph 3-807.7(b) of the Armed Services Procurement Regulation. Such price is the net price after applying any applicable standard trade discounts offered by the Contractor from his catalog. list or schedule price. The Contractor further warrants that as of the current date any differences between the unit prices of the line items identified above, as stated in the schedule, and the Contractor's established prices for like quantities of the nearest commercial equivalents of such contract items are due to compliance with contract specifications, and to compliance with any requirements which this contract may contain for preservation, packaging, and packing beyond standard commercial practice.

(b) The Contractor shall promptly notify the Contracting Officer as to the amount and effective date of each decrease in any applicable established price, and each corresponding contract unit price, exclusive of any part of such unit price which reflects modifications resulting from compliance with specifications or requirements for preservation, packaging, and packing beyond standard commercial practice, shall be decreased by the same percentage that the said established price is decreased. Such decrease shall apply to those items delivered on and after the effective date of the decrease in the Contractor's established price, and this contract shall be modified accordingly. The Contractor shall certify on each invoice that each unit price stated therein reflects all decreases, required by this clause or shall certify on the final invoice that all price decreases required by this clause have been applied in the manner herein required.

in required (c) If the Contractor's applicable established price is increased after the contract date, the corresponding contract unit price (exclusive of any part of such unit price resulting from compliance with specification or requirements for preservation, packaging, and packing, beyond standard commercial practice) shall be increased, upon the Contractor's request in writing to the Contracting Officer, by the same percentage that the established price is increased and the contract shall be modified accordingly, provided that:

(1) The aggregate of the increases in any contract unit price made under this clause shall not exceed ten percent (10%) of the original contract unit price;

(2) The increased contract unit price shall be effective on the effective date of the increase in the applicable established price if the Contractor's written request is received by the Contracting Officer within 10 days thereafter, but if not, the effective date of the increased unit price shall be the date of receipt by the Contracting Officer of such request;

(3) The increased contract unit price shall not apply to quantities scheduled under the contract for delivery before the effective date of the increased contract unit price unless the Contractor's failure to deliver before such date results from causes beyond the control and without the fault or negligence of the Contractor, within the meaning of the "Default" clause of this contract;

(4) No modification incorporating an increase in a contract unit price shall be executed pursuant to this clause until the increase in the applicable established price has been verified by the Contracting Officer

(d) Within 30 days after receipt of a Contractor's written request, the Contracting Officer may cancel, without liability to either party, any portion of the contract affected by the requested incrcasc and undelivered at the time of such cancellation.

(e) Pending any cancellation as provided in (d) above and thereafter if there is no cancellation, the Contractor shall continue deliveries according to the delivery schedule of the contract and shall be paid for such deliveries at the contract unit price increascd to the extent provided by (c) above.

(End of clause)

7-106.4

ARMED SERVICES PROCUREMENT REGULATION

CONTRACT CLAUSES AND SOLICITATION PROVISIONS

7-107 Economic Price Adjustment Clause (Labor and Material). In accordance with 3-404.3(c)(2), insert the following clause.

ECONOMIC PRICE ADJUSTMENT - LABOR AND MATERIAL (1974 MAR)

(a) If at any time during the performance of this contract there is an increase or decrease in the rates of pay for labor (including fringe benefits) or unit prices for materials set forth in the Schedule, the Contractor shall notify the Contracting Officer thereof within sixty (60) days of such increase or decrease or within such further period as may be approved in writing by the Contracting Officer, but in any event not later than final payment under the contract. Such notice shall include the Contractor's proposal for an adjustment in the contract unit prices to be negotiated in accordance with paragraph (b) below and shall be accompanied by data, in such form as the Contracting Officer may require, including (i) the causes, (ii) the effective date, and (iii) the amount, both of the increase or decrease and of the Contractor's proposal for price adjustment.

(b) Promptly upon receipt of any notice and data described in (a) above, the Contractor and the Contracting Officer shall negotiate a price adjustment, and the effective date thereof, in the contract unit prices. Such adjustments will be limited to the amount of increase or decrease in the labor rates (including fringe benefits) or unit price of materials, as identified in the Schedule; provided, however, that such negotiations may be postponed by the Contracting Officer until an accumulation of such increases and decreases results in an adjustment allowable under paragraph (c)(v) of this clause. The price adjustment, and the effective date thereof, shall be set forth in an amendment to this contract. Such amendment shall also revise the rates of pay for labor (including fringe benefits) or unit prices for materials set forth in the Schedule to reflect the increase or decrease therein. Pending agreement on, or determination of, any such adjustment and its effective date, the Contractor shall continue performance.

(c) Notwithstanding any other provision of this clause, any price adjustments under this clause shall be subject to the following limitations:

(1) There shall be no adjustment for supplies or services whose production cost is not af. fected by a change in the rates of pay for labor (including fringe benefits) or unit prices for materials set forth in the Schedule.

(ii) There shall be no adjustment other than for increases or decreases in the rates of pay for labor (including fringe benefits) or unit prices of materials set forth in the Schedule.

(iii) There shall be no adjustment for any increase or decrease in the quantities of labor or materials set forth in the Schedule for each item to be delivered hereunder.

(iv) No upward adjustment shall apply to supplies or services which are required to be delivered or performed prior to the effective date of the adjustment unless the Contractor's failure to deliver or perform in accordance with the delivery schedules results from causes beyond the control and without the fault or negligence of the Contractor within the meaning of the clause of this contract entitled “Default," in which case the contract shall be amended to make an equitable extension of the delivery or performance schedule.

(v) There shall be no adjustment for any change in rates of pay for labor (including fringe benefits) or unit prices for materials which would not result in a net change of at least three percent (3%) of the then current total contract price, and except that, after delivery of the last unit called for by this contract, if either party requests an adjustment pursuant to (b) above, this limitation shall not apply.

(vi) The aggregate of the increases in any contract unit price (or labor rate) made under this clause shall not exceed ten percent (10%) of the original unit price (or labor rate). There is no percentage limitation on the amount of decrease made under this clause.

(d) The final invoice submitted under this contract shall include a certification that the Contractor has not experienced a decrease in rates of pay for labor (including fringe benefits) or unit prices for materials set forth in the Schedule or that he has given notice of all such decreases in compliance with (a) above.

7-107

ARMED SERVICES PROCUREMENT REGULATION

CONTRACT CLAUSES AND SOLICITATION PROVISIONS

(c) The Contracting Officer may examine the Contractor's books, records, and other supporting data relevant to the cost of labor (including fringe benefits) and materials during all reasonable times until the expiration of three (3) years from the date of final payment under this contract or for the time periods specified in Appendix M of the Armed Services Procurement Regulation, whichever expires earlier,

(End of clause)

7-108 Incentive Price Revision Clauses.

7-108.1 Firm Targets. When in accordance with the provisions of Section III, Part 4, the fixed-price incentive contract described in 3-404.4(a) (2) is to be used, the following clause shall be made a part of the contract. As to each item which is to be subject to incentive price revision, the contract schedule shall set forth the target cost, target profit, target price.

INCENTIVE PRICE REVISION (FIRM TARGET) (1978 SEP)

(al cinema The supplies or services identified in the Schedule as items ......... are subject to prie revision in accordance with the provisions of this clause; provided, that in no event shall the total final price of such items exceed .......... dollars ($.........). Any supplies or services which are to the ordered separately under, or otherwise added to, this contract, and which are to be subject

piee revision in accordance with the provisions of this clause, shall be identified as such in a Mesitation to this contract.

b) I naam of Cost. For the purposes of this clause, "cost" or "costs" means allowable cost *** undance with Section XV of the Armed Services Procurement Regulation as in effect on the Hate of this contract.

vel masion of Data. Within ......... (..........) days after the end of the month in which the flutfactor has delivered the last unit of supplies and completed the services called for by those Items referred to in paragraph (a) above, the Contractor shall submit, on DD Form 633-6 or wher form as the Contracting Officer may require, (i) a detailed statement of all costs incurred up to the end of that month in performing all work under such items, (ii) an estimate of costs of woh further performance, if any, as may be necessary to complete performance of all work with respect to such items, and (iii) a list of all residual inventory and an estimate of the value thereof.

( HaRevision. Upon submission of the data required by paragraph (c) above, the Contracfor and the Contracting Officer shall promptly establish the total final price in accordance with

D) On the basis of the information required by paragraph (c) above, together with any other pertinent information, there shall be established by negotiation the total final cost incurred or to he incurred for the supplies delivered (or services performed) and accepted by the Government, which are subjeot to price revision under this clause.

(2) The total final price shall be established by adjusting the total final negotiated cost by an amount for profit or loss determined as follows:

WHEN THE TOTAL FINAL

NEGOTIATED COST IS:

qual to the total target coat ----Greater than the total target cost --

THE ADJUSTMENT FOR PROFIT OR

LOSS IS:
Total target profit.
Total target profit less - percent (4%)

of the amount by which the total final
negotiated cost exceeds the total target

cost Total target profit plus - percent ( %)

of the amount by which the total final negotiated cost is less than the total target cost.

14 than the total target coat ----

7-108.1

ANMKD NKRVICES PROCUREMENT REGULATION

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