CONTRACT CLAUSES AND SOLICITATION PROVISIONS (c) The following clause shall be used in incrementally funded cost-reimbursement type research and development contracts which do not provide for cost sharing. LIMITATION OF FUNDS (1966 OCT) (a) It is estimated that the cost to the Government for the performance of this contract will not exceed the estimated cost set forth in the Schedule, and the Contractor agrees to use his best efforts to perform the work specified in the Schedule and all obligations under this contract within such estimated cost. (b) The amount presently available for payment and allotted to this contract, the items covered thereby, and the period of performance which it is estimated the allotted amount will cover, are specified in the Schedule. It is contemplated that from time to time additional funds will be allotted to this contract up to the full estimated cost set forth in the Schedule, exclusive of any fee. The Contractor agrees to perform or have performed work on this contract up to the point at which the total amount paid and payable by the Government pursuant to the terms of this contract approximates but does not exceed the total amount actually allotted to the contract. (c) If at any time the Contractor has reason to believe that the costs which he expects to incur in the performance of this contract in the next succeeding sixty (60) days, when added to all costs previously incurred, will exceed seventy-five percent (75%) of the total amount then allotted to the contract, the Contractor shall notify the Contracting Officer in writing to that effect. The notice shall state the estimated amount of additional funds required to continue performance for the period set forth in the Schedule. Sixty (60) days prior to the end of the period specified in the Schedule the Contractor will advise the Contracting Officer in writing as to the estimated amount of additional funds, if any, that will be required for the timely performance of the work under the contract or for such further period as may be specified in the Schedule or otherwise agreed to by the parties. If, after such notification, additional funds are not allotted by the end of the period set forth in the Schedule or an agreed date substituted therefor, the Contracting Officer will, upon written request by the Contractor, terminate this contract pursuant to the provisions of the Termination clause on such date. If the Contractor, in the exercise of his reasonable judgment, estimates that the funds available will allow him to continue to discharge his obligations hereunder for a period extending beyond such date, he shall specify the later date in his request and the Contracting Officer, in his discretion, may terminate this contract on that later date. (d) Except as required by other provisions of this contract specifically citing and stated to be an exception from this clause, the Government shall not be obligated to reimburse the Contractor for costs incurred in excess of the total amount from time to time allotted to the contract, and the Contractor shall not be obligated to continue performance under the contract (including actions under the Termination clause) or otherwise to incur costs in excess of the amount allotted to the contract, unless and until the Contracting Officer has notified the Contractor in writing that such allotted amount has been increased and has specified in such notice an increased amount constituting the total amount then allotted to the contract. To the extent the amount allotted exceeds the estimated cost set forth in the Schedule, such estimated cost shall be correspondingly increased. No notice, communication or representation in any other form or from any person other than the Contracting Officer shall affect the amount allotted to this contract. In the absence of the specified notice, the Government shall not be obligated to reimburse the Contractor for any costs in excess of the total amount then allotted to the contract, whether those excess costs were incurred during the course of the contract or as a result of termination. When and to the extent that the amount allotted to the contract has been increased, any costs incurred by the Contractor in excess of the amount previously allotted shall be allowable to the same extent as if such costs had been incurred after such increase in the amount allotted; unless the Contracting Officer issues a termination or other notice and directs that the increase is solely for the purpose of covering termination or other specified expenses. (e) Change orders issued pursuant to the Changes clause of this contract shall not be considered an authorization to the Contractor to exceed the amount allotted in the Schedule in the absence of a statement in the change order, or other contract modification, increasing the amount allotted. 7-402.2 ARMED SERVICES PROCUREMENT REGULATION CONTRACT CLAUSES AND SOLICITATION PROVISIONS (f) Nothing in this clause shall affect the right of the Government to terminate this contract. In the event this contract is terminated, the Government and the Contractor shall negotiate an equitable distribution of all property produced or purchased under the contract based upon the share of costs incurred by each. (g) In the event that sufficient funds are not allotted to this contract to allow completion of the work contemplated by this contract, the Contractor shall be entitled to that percentage of the fee set forth in the Schedule equivalent to the percentage of completion of the work contemplated by this contract. (End of clause) (d) The following clause shall be used in incrementally funded cost-reimbursement type research and development contracts which provide for cost-sharing. LIMITATION OF FUNDS (COST-SHARING) (1966 OCT) (a) It is estimated that the cost to the Government for the performance of this contract will not exceed the estimated cost to the Government set forth in the Schedule, and the Contractor agrees to use his best efforts to perform the work specified in the Schedule and all obligations under this contract within such estimated cost to the Government plus the share of the cost of performance agreed to be borne by the Contractor, as set forth in the Schedule. (b) The amount presently available for payment by the Government and allotted to this contract, the items covered thereby, the Government's share of the cost thereof, and the period of performance which it is estimated the allotted amount will cover, are specified in the Schedule. It is contemplated that from time to time additional funds will be allotted to this contract up to the full estimated cost to the Government set forth in the Schedule, exclusive of any fixed fee. The Contractor agrees to perform or have performed work on this contract up to the point at which the total amount paid and payable by the Government pursuant to the terms of this contract approximates but does not exceed the total amount actually allotted by the Government to the con tract. (c) If at any time the Contractor has reason to believe that the costs which he expects to incur in the performance of this contract in the next succeeding sixty (60) days, when added to all costs previously incurred, will exceed seventy-five percent (75%) of the total of the amount then allotted to the contract by the Government plus the Contractor's corresponding share, the Contractor shall notify the Contracting Officer in writing to that effect. The notice shall state the estimated amount of additional funds required to continue performance for the period set forth in the Schedule. Sixty (60) days prior to the end of the period specified in the Schedule the Contractor will advise the Contracting Officer in writing as to the estimated amount of additional funds, if any, that will be required for the timely performance of the work under the contract or for such further period as may be specified in the Schedule or otherwise agreed to by the parties. If, after such notification, additional funds are not allotted by the end of the period set forth in the Schedule or an agreed date substituted therefor, the Contracting Officer will, upon written request by the Contractor, terminate this contract pursuant to the provisions of the Termination clause on such date. If the Contractor, in the exercise of his reasonable judgment, estimates that the funds available will allow him to continue to discharge his obligations hereunder for a period extending beyond such date, he shall specify the later date in his request, and the Contracting Officer, in his discretion, may terminate on that later date. (d) Except as required by other provisions of this contract specifically citing and stated to be an exception from this clause, the Government shall not be obligated to reimburse the Contractor for costs incurred in excess of the amount from time to time allotted by the Government to the contract, and the Contractor shall not be obligated to continue performance under the contract (including actions under the Termination clause) or otherwise to incur costs in excess of the total of the amount then allotted to the contract by the Government plus the Contractor's corresponding share, unless and until the Contracting Officer has notified the Contractor in writing that the amoun allotted by the Government has been increased and has specified in such notice an increased amount constituting the total amount then allotted by the Government to the contract. To the extent the total of the amount allotted by the Government plus the Contractor's cor 7-402.2 ARMED SERVICES PROCUREMENT REGULATION CONTRACT CLAUSES AND SOLICITATION PROVISIONS 7:247 responding share exceeds the estimated cost set forth in the Schedule, such estimated cost shall be correspondingly increased. Any increase in such estimated cost shall be allocated in accordance with the formula set forth in the Schedule governing such increases. No notice, communication or representation in any other form or from any person other than the Contracting Officer shall affect the amount allotted by the Government to this contract. In the absence of the specified notice, the Government shall not be obligated to reimburse the Contractor for any costs in excess of the total amount then allotted by the Government to the contract, whether those excess costs were incurred during the course of the contract or as a result of termination. When and to the extent that the amount allotted by the Government to the contract has been increased, any costs incurred by the Contractor in excess of the total of the amount previously allotted by the Government plus the Contractor's corresponding share shall be allowable to the same extent and in the same percentage as if such costs had been incurred after such increase in the amount allotted; unless the Contracting Officer issues a termination or other notice and directs that the increase is solely for the purpose of covering termination or other specified expenses. (e) Change orders issued pursuant to the Changes clause of this contract shall not be considered an authorization to the Contractor to exceed the amount allotted by the Government in the Schedule in the absence of a statement in the change order, or other contract modification, increasing the amount allotted. (f) Nothing in this clause shall affect the right of the Government to terminate this contract. In the event this contract is terminated, the Government and the Contractor shall negotiate an equitable distribution of all property produced or purchased under the contract based upon the share of costs incurred by each. (g) In the event that sufficient funds are not allotted to this contract by the Government to allow completion of the work contemplated by this contract, the Contractor shall be entitled to that percentage of the fee set forth in the Schedule equivalent to the percentage of completion of the work contemplated by this contract. (End of clause) (e) In the foregoing clauses, the period of "sixty (60) days" and the percentage of "seventy-five percent (75%)" may be varied from thirty (30) to ninety (90) days and seventy-five percent (75%) to eighty-five percent (85%). The words "Task Order" or other appropriate designation may be substituted for the word "Schedule" wherever that word appears in the clauses. Where a contract is of the installment type, the clauses may be appropriately modified. 7-402.3 Allowable Cost, Fee, and Payment. (a) Except as provided in (b) below, the clause in 7-203.4(a) shall be inserted in all cost-reimbursement type research and development contracts. Additional instructions for use are in (c) below. (b) When, pursuant to 3-405.4, incentive revision of the fee in a cost-reimbursement type research and development contract is to be provided, the clause in 7-203.4(b) shall be included in the contract. Additional instructions for use of the clause are in (c) below. (c) In the clauses prescribed in (a) and (b) above, the following changes shall be made. (1) For approvals with regard to fixed-price type subcontracts providing for progress payments, pursuant to paragraph (c) of the clauses, the standards shall be the same as those governing progress payments on fixed-price type prime contracts, as provided by E-514 of Appendix E. (2) In subparagraph (L)(ii)(B) the period of years may be increased to I correspond with any statutory period of limitation applicable to claims of third parties against the contractor; provided, that a corresponding increase is made in 7-402.3 ARMED SERVICES PROCUREMENT REGULATION 7:248 CONTRACT CLAUSES AND SOLICITATION PROVISIONS the period for retention of records required in paragraph (a)(4) of the clause prescribed by 7-402.7. (3) In respect to paragraph (c) of the clause prescribed in (b) above, generally the payment of fee provisions in the Schedule should be based on target fee. ap (4) Under some circumstances the use of a sliding scale may be propriate in paragraph (o) of the clause prescribed in (b) above (for example, | $0.01 for the first $100, $0.02 for the next $100, etc.), in which case necessary changes in the wording of such paragraph (o) of the clause prescribed in (b) | above are authorized. (5) In the case of contracts, including cost-sharing contracts, without fee: (ii) insert the following sentence in lieu of the second sentence of para- After payment of an amount equal to eighty percent (80%) of (the Government's share of) the total estimated cost of performance of this contract set forth in the Schedule, the Contracting Officer may withhold further payment on account of allowable cost until a reserve shall have been set aside in an amount which he considers necessary to protect the interests of the Government, but such reserve shall not exceed one percent (1%) of (the Government's share of) such total estimated cost or one hundred thousand dollars ($100,000), whichever is less. (1968 SEP) (iii) delete "and any part of the fixed fee" from paragraph (k) of the (iv) change paragraph (a) of the clause prescribed in (a) above, as follows: (a) The allowability of costs incurred in the performance of this contract shall be determined by the Contracting Officer in accordance with: (i) Part 2 of Section XV of the Armed Services Procurement Regulation in effect on the date of this contract; and (ii) the terms of this contract. (6) In contracts without fee with nonprofit institutions, “ten thousand dollars ($10,000)" may be substituted for "one hundred thousand dollars ($100,000)" in the sentence set forth in (5)(ii) above. (7) In contracts (other than facilities contracts) with educational institutions, substitute "Part 3 of Section XV" in paragraph (a)(i)(A) of the clause prescribed in (a) above and in paragraph (a)(1)(i)(A) of the clause prescribed in (b) above. (8) In contracts without fee with educational institutions, the second sentence of paragraph (c) of the clause prescribed in (a) above and the provision of subparagraph (5)(ii) of these additional instructions, which pertain to withholding of fee and costs; may be omitted. If the second sentence of paragraph (c) is so omitted, in the first sentence of paragraph (e) delete “and any part of the fixed fee which has been withheld pursuant to (c) above or otherwise." 7-402.3 ARMED SERVICES PROCUREMENT REGULATION 7:249 CONTRACT CLAUSES AND SOLICITATION PROVISIONS (9) In the clauses prescribed above, "Task Order" or other appropriate designation may be substituted for "Schedule." (10) When clause paragraph (c) provides for withholding, the amount to be withheld shall normally be the maximum authorized by the clause except that the administrative contracting officer may, if he believes that such amount exceeds the amount necessary to protect the interests of the Government, review the status of all funds being withheld from the contractor under the particular contract concerned and under any other contracts with the contractor which he is administering and make appropriate recommendations to the PCO. The PCO shall decide whether to reduce the rate of withholding or whether to release a portion of the amount already reserved under the contract, as appropriate, and shall promptly advise the administrative contracting officer. 7-402.4 Standards of Work. STANDARDS OF WORK (1959 FEB) 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) 7-402.5 Inspection and Correction of Defects. (a)(1) The following clause shall be used where the primary contract objective is the delivery of end items other than designs, drawings, or reports, except when the contracting officer determines that the use of such clause is impracticable. When this clause, or this clause as modified by (a)(2), (a)(3), or (c) below, is not used, the clause in (b) below shall be used. INSPECTION AND CORRECTION OF DEFECTS (1974 OCT) (a) All work, which term includes technical data when the contract does not include the clause entitled "Warranty of Technical Data," 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 Contractor shall provide and maintain an inspection system acceptable to the Government covering the work, hereunder. The Government, through any authorized representative, may inspect the plant or plants of the Contractor or of any of his subcontractors engaged in the performance of this contract. If any inspection or test is made by the Government on the premises of the Contractor or a subcontractor the Contractor shall provide and shall require subcontractors to provide all reasonable facilities and assistance for the safety and convenience of the Government inspectors in the performance of their duties. All inspections and tests by the Government shall be performed in such a manner as will not unduly delay the work. Except as otherwise provided in this contract, final inspection, and acceptance shall be made at the place of delivery as promptly as practicable after delivery and shall be deemed to have been made no later than ninety (90) days after the date of such delivery, if acceptance has not been made earlier within such period. (b) At any time during performance of this contract, but not later than six (6) months (or such other time as may be provided in the Schedule) after acceptance of all of the end items (other than designs, drawings, or reports) to be delivered under this contract, the Government may require the Contractor to remedy by correction or replacement, as directed by the Contracting Officer, any failure by the Contractor to comply with the requirements of this contract. Any time devoted to such correction or replacement shall not be included in the computation of the period of time specified in the preceding sentence, except as provided in (d) below. Except as otherwise 7-402.5 ARMED SERVICES PROCUREMENT REGULATION |