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7–204.34 Multi-Year Procurement. In accordance with 1-322.5, insert the clauses in 7-104.47.

7-204.35 New Material. In accordance with 1-1208, insert the clause in 7-104.48.

7-204.36 Aircraft, Missile, and Space Vehicle Accident Reporting and Investigation. In accordance with 7-104.81, insert the clause therein.

7-204.37 Minority Business Enterprises. In accordance with 1-332, insert the appropriate clause or clauses in 7-104.36.

7-204.38 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)).

7-204.39 First Article Approval.

(a) In accordance with 1-1904, insert the clause in 7-104.55(a) with appropriate modifications.

(b) In accordance with 1-1904, insert the clause in 7-104.55(b) with appropriate modifications.

7-204.40 Order of Precedence. In accordance with 3-501(b)Sec.C(xxxi), insert the clause in 7-2003.41.

7-204.41 United States Products and Services (Balance of Payments Programs). In accordance with 6-806.4, insert the clause in 7-2003.53.

7-204.42 Identification of Expenditures in the United States. In accordance with 6-807, insert the clause in 7-104.58.

7-204.43 Reserved.

7–204.44 Material Inspection and Receiving Report. Insert the clause in 7-104.62 except in negotiated subsistence procurements and contracts for tanker/barge shipments of bulk petroleum products.

7-204.45 Recovery of Nonrecurring Costs on Foreign Sales of Major Defense Equipment. Insert the clause in 7-104.64, as appropriate.

7–204.46 Use of Excess and Near-Excess Currency. In accordance with the requirements of 6-1110, insert the clause in 7-104.66.

7–204.47 Production Progress Report. In accordance with the requirements of 25-202, insert the clause in 7-104.51.

7–204.48 Procurement of Miniature and Instrument Ball Bearings. In accordance with 1-2207.3 , insert the clause in 7-104.38.

7-204.49 Safety Precautions for Ammunition and Explosives. In accordance with 7-104.79, insert the clause therein.

7–204.50 Notice of Radioactive Materials. In accordance with 7-104.80, insert the clause therein.

7–204.51 Procurement of Precision Components for Mechanical Time Devices. In accordance with 1-2207.4 , insert the clause in 7-104.46.

7-204.52 Payment of Interest on Contractors' Claims. In accordance with 1-333, insert the clause in 7-104.82.

7-204.53 Cost Accounting Standards. In accordance with 3-1204, insert the clauses in 7-104.83.

7-204.54 Contractor's Identification of Changes. In accordance with 26-802, insert a clause as provided in 7-104.86.




7-204.55 Cost/Schedule Control Systems. In accordance with 1-331(h) and 3-501(b) Section C (xlv), insert the clause in 7-104.87.

7-204.56 Engineering Change Proposals (ECP's). In accordance with 26–205, insert the clause in 7-104.89.

7–204.57 Change Order Accounting. In accordance with 26–205, insert the clause in 7-104.90.

7–204.58 Time of Delivery. Insert a clause in accordance with 7-104.92.

7-204.59 Capture and Detention. In accordance with 10-406, insert the clause in 7-104.94.

7-204.60 Preference For United States Flag Air Carriers. In accordance with 1-336.1(b), insert the clause in 7-104.95.

7-204.61 Submission of Commercial Freight Bills to the General Services Administration for Audit. In accordance with 19-403.2(c), insert the following clause


When transportation costs are reimbursed to the Contractor, the Contractor is required to furnish to the

General Services Administration – FZATR
Chester A. Arthur Building

Washington, D. C. 20406 (or to the ACO if specified) individual commercial freight bills (or equivalent shipment data and evidence of payment) for transportation charges in excess of $500.00.

(End of clause)

7-204.62 Privacy Act. In accordance with 1-327.1, insert the clause in 7-104.96.

7-204.63 Preference for Domestic Specialty Metals. In accordance with 7-104.93, insert the applicable clause therein.

7–204.64 Exclusionary Policies and Practices of Foreign Governments. In accordance with 6-1312, insert the clause in 7-104.97.

7–204.65 Hazardous Material Identification and Material Safety Data. In accordance with 1-323.2(b), insert the clause in 7-104.98.

7-204.66 Geographic Distribution of Defense Subcontract Dollars. In accordance with 1-340, insert the clause in 7-104.78

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7-205 Additional Clauses. The following clauses shall be inserted in costreimbursement type supply contracts in accordance with Departmental procedures when it is desired to cover the subject matter thereof in such contracts.

7-205.1 Alterations in Contract. The clause in 7-105.1(a) may be inserted. 7-205.2 Approval of Contract. The clause in 7-105.2 may be inserted. 7–205.3 Title and Risk of Loss. Insert the clause in 7-103.6.

7-205.4 Bill of Materials. In accordance with 7-105.6, insert the clause therein.

7-205.5 Reserved.

7-205.6 Stop Work Orders. The clause in 7-105.3, if modified by changing (i) the words "the 'Termination for Convenience' clause of this contract” to “the “Termination'clause of the contract” and (ii) the words “an equitable adjustment shall be made in the delivery schedule or contract price, or both” to “an equitable adjustment shall be made in the delivery schedule, the estimated cost, the fee, or a combination thereof, and in any other provisions of the contract that may be affected," is authorized for use in any cost-reimbursement type contract under the criteria and in accordance with the instructions in 7-105.3.

7-205.7 Warranty of Technical Data. In accordance with 1-324.6, insert the clause in 7-104.9(0).




Part 3—Fixed-Price Research and Development Contracts 7-301 Applicability. As used throughout this Part, the term “fixed-price research and development contract" means any contract (other than a letter contract, a notice of award, or a modification not affecting new procurement) which (i) is entered into at a fixed price in an amount exceeding $2,500 (with or without any provision for price redetermination, economic price adjustment, or other form of price revision as covered in 3-404), and (ii) is for experimental, developmental, or research work. See 3-402(b) for use of types of contracts for research and development work.

7-302 Required Clauses. The following clauses shall be inserted, as required, in all fixed-price research and development contracts, except as may otherwise be indicated in this part.

7-302.1 Definitions. Insert the contract clause in 7-103.1. Additional definitions may be included in such clause provided they are not inconsistent with such clause or the provisions of this Regulation.

7-302.2 Payments.


The Contractor shall be paid, upon submission of proper invoices or vouchers, the prices stipulated herein for work delivered or rendered and accepted, less deductions, if any, as herein pro vided. Unless otherwise specified, payment will be made upon acceptance of any portion of the work delivered or rendered for which a price is separately stated in the contract.

(End of clause)

7-302.3 Standards of Work.


The Contractor agrees that the performance of work and services pursuant to the requirements of this contract shall conform to high professional standards.

(End of clause)

7-302.4 Inspection.

(a) The following clause shall be used where the primary contract objective is delivery of end items other than designs, drawings, or reports, except where the contracting officer determines that the use of such clause is impracticable. Where this clause, or this clause as modified in (c) below, is not used, the clause in (b) below shall be used.


(a) All work under this contract shall be subject to inspection and test by the Government, to the extent practicable, at all times (including the period of performance) and places, and in any event prior to acceptance. The Government through any authorized representative may inspect the premises of the Contractor or any subcontractor engaged in the performance of this contract.

(b) The Government may reject any work that is defective or otherwise not in conformity with the requirements of this contract. If the Contractor fails or is unable to correct or to replace such work within the delivery schedule or such later time as the Contracting Officer may authorize, the Contracting Officer may accept such work at a reduction in price which is equitable under the circumstances. Failure to agree on the reduction in price shall be a dispute concerning a question of fact within the meaning of the clause of this contract entitled “Disputes."

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(c) If any inspection or test is made by the Government on the premises of the Contractor or a subcontractor, the Contractor shall provide, without additional charge, all reasonable facilities and assistance for the safety and convenience of the Government inspectors in the performance of their duties. If the Government inspection or test is made at a point other than the premises of the Contractor or subcontractor, it shall be at the expense of the Government. All inspections and tests by the Government shall be performed in such a manner as not unduly to delay the work. Final inspection and acceptance or rejection of the work shall be made as promptly as practicable after delivery except as otherwise provided in this contract; but failure to inspect and accept, or reject the work shall neither relieve the Contractor from responsibility for such of the work as is not in accordance with the contract requirements nor impose liability on the Government therefor.

(d) The inspection and test by the Government of any work shall not relieve the Contractor from any responsibility regarding defects or other failures to meet the contract requirements which may be discovered prior to acceptance. Except as otherwise provided in this contract, acceptance shall be conclusive except as regards latent defects, fraud, or such gross mistakes as amount to fraud.

(e) The Contractor shall provide and maintain an inspection system acceptable to the Government covering the work hereunder. Records of all inspection work by the Contractor shall be kept complete and available to the Government during the performance of this contract and for such longer period as may be specified elsewhere in this contract.

(End of clause)

(b) The following clause shall be inserted in all contracts subject to this part where the clause in (a) above is not used.


The Government, through any authorized representatives, has the right, at all reasonable times, to inspect, or otherwise evaluate the work performed or being performed hereunder and the premises in which it is being performed. If any inspection, or evaluation is made by the Government on the premises of the Contractor or a subcontractor, the Contractor shall provide and shall require his subcontractors to provide all reasonable facilities and assistance for the safety and convenience of the Government representatives in the performance of their duties. All inspections and evaluations shall be performed in such a manner as will not unduly delay the work.

(End of clause)

(c) When it is desired to require contractors to maintain an inspection system in accordance with Military Specification MIL-1-45208 (see 14-303), the clause in (a) above shall be included in the contract, except that the following shall be added as the second sentence of paragraph (e).

The inspection system shall be in accordance with the edition of Military Specifications MIL1-45208 in effect on the date of this contract. (1967 AUG)

7-302.5 Assignment of Claims. In accordance with 7-103.8, insert the clause therein.

7-302.6 Examination of Records by Comptroller General. In accordance with 7-104.15, insert the clause therein.

7-302.7 Federal, State, and Local Taxes. In accordance with 11-401, insert the appropriate clause in 7-103.10.

7-302.8 Utilization of Small Business Concerns.
(a) In accordance with 1-707.3(a), insert the clause in 7-104.14(a).
(b) In accordance with 1-707.3(b), insert the clause in 7-104.14(b).

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