Page images
[ocr errors]


7-605.3 Estimated Cost, Performance Period.

It is estimated that the construction cost of work required under this contract will be

Dollars, (S................), exclusive of the Contractor's fee, and that the work herein contracted for will be ready for utilization by the Government on or before ............ 19......... It is expressly understood, however, that neither the Government nor the Contractor guarantees the correctness of either of these estimates.

(End of clause)

7-605.4 Limitation of Cost. Insert the clause in 7-203.3(a) or (b) with the following changes in wording: Delete the words “the schedule" wherever they appear and substitute the words “this contract".

7-605.5 Allowable Cost, Fixed Fee, and Payment. Insert the clause in 7-203.4(a) with the following changes:

(a) Delete paragraph (a) and substitute the following:

(a) For the performance of this contract, the Government shall pay to the Contractor:

(i) The cost thereof (hereinafter referred to as "allowable cost") determined by the

Contracting Officer to be allowable in accordance with
(A) Section XV, Part 4, of the Armed Services Procurement Regulation as in effect

on the date of this contract; and
(B) The terms of this contract; and
(ii) a fixed fee in the amount of ...........

Dollars ($...

(b) Delete paragraph (c) and substitute the following:

(c) Promptly after receipt of each invoice or voucher and statement of cost, the Government shall, except as otherwise provided in this contract, subject to the provisions of (j) below, make payment thereon as approved by the Contracting Officer. Payment of the fixed fee, if any, shall be made to the Contractor in installments based upon the percentage of completion of the work as determined from estimates submitted to and approved by the Contracting Officer, provided, however, that after payment of eighty-five percent (85%) of the fixed fee set forth in (a) above, the Contracting Officer may withhold further payment of fee 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 fifteen percent (15%) of the total fixed fee or one hundred thousand dollars ($100,000), whichever is less. (1978 AUG)

(c) The additional instructions for use of the clause as set forth in 7-203.4(c)(1), (2), (6) and (7) apply.

7-605.6 Insurance.


(a) The Contractor shall procure and thereafter maintain such bonds and insurance in such forms and such amounts and for such periods of time as the Contracting Officer may require in writing and shall be reimbursed for the cost thereof.

(6) In every instance where this contract requires the United States to reimburse the Contractor for the payment of the premium on a bond or insurance policy, the bond or insurance policy shall contain an endorsement or other recital excluding by appropriate language any claim on the part of the insurer or obligor to be subrogated, on payment of a loss or otherwise, to any claim against the United States.

(c) The Contractor shall give the Contracting Officer or his representative immediate notice in writing of any suit or action filed against the Contractor arising out of the performance of this contract and of any claim against the Contractor the cost and expense of which are reimbursable

[ocr errors][merged small]
[ocr errors][merged small]

under the provisions of the Clause entitled “Allowable Cost, Fixed Fee and Payment" hereof, and the risk of which is then uninsured or in which the amount claimed exceeds the amount of insurance coverage. The Contractor shall furnish immediately to the Contracting Officer copies of all pertinent papers received by the Contractor. Insofar as the following shall not conflict with any policy or contract of insurance, and upon request of the Contracting Officer, the Contractor shall do any and all things to effect an assignment and subrogation in favor of the Government, of all Contractor's rights and claims except against the Government, arising from or growing out of such asserted claims, and if required by the Contracting Officer, shall authorize representatives of the Government to settle and/or defend any such claim and to represent or take charge of any such Mitigation affecting the Contractor.

(End of clause)

7-605.7 Direction of Work.


During the performance of this contract, the work shall be under the full-time resident direction of the Contractor, if an individual; of one or more principal partners if the Contractor is a partnership; or in case the Contractor is a corporation, association, or similar legal entity, one or more senior officers thereof; provided, however, that the Contractor, whether an individual, a partnership, a corporation, or other legal entity, may be represented in the direction of the work by some person of a class other than those specified above, if the Contracting Officer gives his approval.

(End of clause)

7-605.8 Discounts.


The Contractor shall, to the extent of his ability, take all cash and trade discounts, rebates, allowances, credits, salvage, commissions, and bonifications, and when unable to take advantage of such benefits he shall promptly notify the Contracting Officer of the reason therefor. In determining the actual net cost of articles and materials of every kind required for the purpose of this contract, there shall be deducted from the gross cost thereof all cash and trade discounts, rebates, allowances, credits, commissions, and bonifications which have accrued to the benefit of the Contractor or would have so accrued but for the fault or neglect of the Contractor. Such benefits lost through no fault or neglect on the part of the Contractor, or lost through fault of the Government, shall not be deducted from gross costs.

(End of clause)

7-605.9 Direct Payments.


(a) To Suppliers, Laborers, and Mechanics. If bills for purchase of material, machinery or equip ment, or payrolls covering employment of laborers or mechanics incurred by the Contractor or by any subcontractor hereunder are not paid promptly by the Contractor or subcontractor, as the case may be, the Contracting Officer may, in his discretion, withhold from payments otherwise due the Contractor an amount equivalent to the amount of any such bill or payroll. Should the Contractor neglect or refuse to pay such bills or payrolls or to direct any subcontractor to pay such bills or payrolls within five (5) days after notice from the Contracting Officer so to do, the Government shall have the right to pay such bills or payrolls directly, and in such event a deduction equal to five per cent (5%) of the amount so paid directly shall be made from the Contractor's fee.

[ocr errors][merged small]


(b) To Common Carriers. The Government reserves the right to pay directly to common carriers any or all freight charges on construction plant, materials and supplies.

(End of clause)

7-605.10 Approved Construction Plant.


Upon approval of the Contracting Officer, construction plant furnished by the Contractor will be shown in the attached Appendix "B" or modification thereto.

(End of clause)

7-605.11 Audit by Department of Defense. In accordance with 7-104.41(a), insert the clause therein.

7-605.12 Price Reduction for Defective Cost or Pricing Data. In accordance with 7-104.29(a), insert the clause therein.

7-605.13 Subcontractor Cost and Pricing Data. In accordance with 7-104.42(a), insert the clause therein.

7–605.14 Government Property. Insert the clause in 7-203.21.

7-605.15 Examination of Records by Comptroller General. In accordance with 7-104.15, insert the clause therein.

7-605.16 Contracting Officer's Decisions.


The extent and character of the work to be done by the Contractor shall be subject to the general supervision, direction, control, and approval of the Contracting Officer.

(End of clause)

7-605.17 Disputes. In accordance with 7-602.6, insert the clauses therein. 7-605.18 Labor. In accordance with 18–703, insert the clause in 7-602.23.

7-605.19 Equal Opportunity. In accordance with 12-807.1 insert the appropriate clause in 7-103.18.

7-605.20 Notice to the Government of Labor Disputes. In accordance with 7-104.4, insert the clause therein.

7-605.21 Special Requirements.


The Contractor hereby agrees that he will:

(a) Be responsible for obtaining any necessary licenses and permits, and complying with any applicable Federal, State and municipal laws, codes, and regulations in connection with the prosecution of the work.

(b) Reduce to writing, unless this provision is waived in writing by the Contracting Officer, every contract in excess of Two Thousand Dollars ($2,000) made by him for the purpose of the work hereunder for services, materials, supplies, machinery, equipment, or for the use thereof, insert therein a provision that such contract is assignable to the Government, make all such contracts in his own name, and not bind or purport to bind the Government or the Contracting Officer thereunder.

(c) Furnish sufficient technical, supervisory and administrative personnel to insure the prosecution of the work in accordance with the progress schedule approved by the Contracting Officer.

(d) Cause all work under this contract to be performed in a skillful and workmanlike manner. The Contracting Officer may, in writing, require the Contractor to remove from the work any employee the Contracting Officer deems incompetent, careless, or otherwise objectionable.

(End of clause)



40-080 0 - 80 - 27


7-605.22 Composition of Contractor. In accordance with 7-602.32, insert the clause therein.

7-605.23 Subcontracts. In accordance with 23-201.2, insert the clause in 7-203.8.

7-605.24 Accident Prevention. In accordance with 7-602.42, insert the clause therein.

7-605.25 Contractor's Organization and Methods.


Upon the execution of this contract, the Contractor shall submit to the Contracting Officer a chart showing in general the executive and administrative organization, duties, and personnel to be employed in connection with the work under the contract; and the data so furnished shall be supplemented as additional information becomes available.

(End of clause)

7-605.26 Termination. In accordance with 8-702(a), insert the following clause.


(a) The performance of work under the contract may be terminated by the Government in accordance with this clause in whole, or from time to time in part:

(i) whenever the Contractor shall default in performance of this contract in accordance

with its terms (including in the term "default” any such failure by the Contractor to make progress in the prosecution of the work hereunder as endangers such performance), and shall fail to cure such default within a period of ten days (or such longer periods as the Contracting Officer may allow) after receipt from the Contract

ing Officer of a notice specifying the default; or (ii) whenever for any reason the Contracting Officer shall determine that such termina

tion is in the best interest of the Government. Any such termination shall be effected by delivery to the Contractor of a Notice of Termination specifying whether termination is for the default of the Contractor or for the convenience of the Government, the extent to which performance of work under the contract is terminated, and the date upon which such termination becomes effective. If, after notice of termination of this contract for default under (i) above, it is determined for any reason that the Contractor was not in default pursuant to (i), or that the Contractor's failure to perform or to make progress in performance is due to causes beyond the control and without the fault or negligence of the Contractor pursuant to the provisions of the clause of this contract relating to excusable delays, the Notice of Termination shall be deemed to have been issued under (ii) above, and the rights and obligations of the parties hereto shall in such event be governed accordingly.

(b) After receipt of a Notice of Termination and except as otherwise directed by the Contracting Officer, the Contractor shall:

(i) stop work under the contract on the date and to the extent specified in the Notice of

Termination; (ii) place no further orders or subcontracts for materials, services, or facilities, except as

may be necessary for completion of such portion of the work under the contract as is

not terminated; (iii) terminate all orders and subcontracts to the extent that they relate to the per

formance of work terminated by the Notice of Termination; (iv) assign to the Government, in the manner and to the extent directed by the Contract

ing Officer, all of the right, title, and interest of the Contractor under the orders or subcontracts so terminated, in which case the Government shall have the right, in its

[ocr errors][merged small]


discretion, to settle or pay any or all claims arising out of the termination of such or

ders and subcontracts; (v) with the approval or ratification of the Contracting Officer, to the extent he may

require, which approval or ratification shall be final and conclusive for all purposes of this clause, settle all outstanding liabilities and all claims arising out of such termination of orders and subcontracts, the cost of which would be reimbursable in

whole or in part, in accordance with the provisions of this contract; (vi) transfer title (to the extent that title has not already been transferred) and in the

manner, to the extent, and at the times directed by the Contracting Officer, deliver to the Government (A) the fabricated or unfabricated parts, work in process, completed work, supplies, and other material produced as a part of, or acquired in respect of the performance of, the work terminated by the Notice of Termination, (B) the completed or partially completed plans, drawings, information, and other property which, if the contract had been completed, would be required to be furnished to the Government, and (C) the jigs, dies, and fixtures, and other special tools and tooling acquired or manufactured for the performance of this contract for

the cost of which the Contractor has been or will be reimbursed under this contract; (vii) use his best efforts to sell in the manner, at the times, to the extent, and at the price

or prices directed or authorized by the Contracting Officer, any property of the types referred to in (vi) above; provided, however, that the Contractor (A) shall not be required to extend credit to any purchaser, and (B) may acquire any such property under the conditions prescribed by and at a price or prices approved by the Contracting Officer, and provided further that the proceeds of any such transfer or disposition shall be applied in reduction of any payments to be made by the Government to the Contractor under this contract or shall otherwise be credited to the price or cost of the work covered by this contract or paid in such other manner as the Con

tracting Officer may direct; (viii) complete performance of such part of the work as shall not have been terminated by

the Notice of Termination; and (ix) take such action as may be necessary, or as the Contracting Officer may direct, for

the protection and preservation of the property related to this contract which is in the possession of Contractor in which the Government has or may acquire an in

terest The Contractor shall proceed immediately with the performance of the above obligations notwithstanding any delay in determining or adjusting the amount of the fee, or any item of reimbursable cost, under this clause. At any time after expiration of the plant clearance period, as defined in Section VIII, Armed Services Procurement Regulation, as it may be amended from time to time, the Contractor may submit to the Contracting Officer a list, certified as to quantity and quality, of any or all items of termination inventory not previously disposed of, exclusive of items the disposition of which has been directed or authorized by the Contracting ficer, and may request the Government to remove such items or enter into a storage agreement covering them. Not later than fifteen (15) days thereafter, the Government will accept such items and remove them or enter into a storage agreement covering the same; provided, that the list submitted shall be subject to verification by the Contracting Officer upon removal of the items, or if the items are stored, within forty-five (45) days from the date of submission of the list, and any necessary adjustment to correct the list as submitted shall be made prior to final settlement.

(c) After receipt of a Notice of Termination, the Contractor shall submit to the Contracting Officer his termination claim in the form and with the certification prescribed by the Contracting Officer. Such claim shall be submitted promptly but in no event later than one year from the effective date of termination, unless one or more extensions in writing are granted by the Contracting Officer, upon request of the Contractor made in writing within such one year period or authorized extension thereof. However, if the Contracting Officer determines that the facts justify such action, he may receive and act upon any such termination claim at any time after such one year period or any extension thereof. Upon failure of the Contractor to submit his termination claim within the time allowed, the Contracting Officer may determine, on the basis of information available to him, the amount, if any, due to the Contractor by reason of the termination and shall thereupon pay to the Contractor the amount so determined.

[ocr errors][merged small]
« PreviousContinue »