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(1) Prior to award of any cost-reimbursement type, time and material, labor-hour, incentive, or price redeterminable subcontract, the price of which is expected to exceed $100,000; and

(2) Prior to the award of any other subcontract, the price of which is expected to exceed $100,000 or to the pricing of any subcontract change or other modification for which the price adjustment is expected to exceed $100,000, where the price or price adjustment is not based on adequate price competition, established catalog or market prices or commercial items sold in substantial quantities to the general public, or prices set by law or

regulation. (b) The Contractor shall require subcontractors to certify, in substantially the same form as that used in the certificate by the Prime Contractor to the Government, that, to the best of their knowledge and belief, the cost and pricing data submitted under (a) above are accurate, complete, and current as of the date of the execution, which date shall be as close as possible to the date of agreement on the negotiated price of the subcontract or subcontract change or modification.

(c) The Contractor shall insert the substance of this clause including this paragraph (c) in each of his cost-reimbursement type, time and material, labor-hour, price redeterminable, or incentive subcontracts hereunder, and in any other subcontract hereunder which exceeds $100,000 unless the price thereof is based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation. In each such excepted subcontract hereunder which exceeds $100,000, the Contractor shall insert the substance of the following clause: Subcontractor Cost and Pricing Data-Price Adjustments

(a) Paragraphs (b) and (c) of this clause shall become operative only with respect to any change or other modification made pursuant to one or more provisions of this contract which involves a price adjustment in excess of $100,000. The requirements of this clause shall be limited to such price adjustments.

(b) The Contractor shall require subcontractors hereunder to submit cost or pricing data under the following circumstances:

(1) Prior to award of any cost-reimbursement type, time and material, labor-hour, incentive, or price redeterminable subcontract, the price of which is expected to exceed $100,000; and

(2) Prior to award of any other subcontract, the price of which is expected to exceed $100,000, or to the pricing of any subcontract change or other modification for which the price adjustment is expected to exceed $100,000, where the price or price adjustment is not based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation. (c) The Contractor shall require subcontractors to certify, in substantially the same form as that used in the Certificate by the Prime Contractor to the Government, that to the best of their knowledge and belief, the cost and pricing data submitted under (b) above are accurate, complete, and current as of the date of the execution, which date shall be as close as possible to the date of agreement on the negotiated price of the contract modification.

(d) The Contractor shall insert the substance of this clause including this paragraph (d) in each subcontract hereunder which exceeds $100,000.

ARTICLE 37—NOTICE OF PROGRAM FOR FURTHER PROVIDING FOR THE STABILIZATION

OF THE ECONOMY (MAY 1973) The Contractor is advised that prices are expected to be in compliance with the General Price Standard of the Cost of Living Council as set forth in Section 130.13 of Title 6, Code of Federal Regulations.

ARTICLE 38-EXAMINATION OF RECORDS BY COMPTROLLER GENERAL

(a) This clause is applicable if the amount of this Contract exceeds $2,500 and was entered into by means of negotiation, including small business restricted advertising, but is not applicable if this Contract was entered into by means of formal advertising.

(b) The Contractor agrees that the Comptroller General of the United States or any of his duly authorized representatives shall, until the expiration of 3 years after final payment under this contract or such lesser time specified in either Appendix M of the Armed Services Procurement Regulations or the Federal Procurement Regulations Part 1-20, as appropriate, have access to and the right to examine any directly pertinent books, documents, papers, and records of the Contractor involving transactions related to this contract.

(c) The Contractor further agrees to include in all his subcontracts hereunder a provision to the effect that the subcontractor agrees that the Comptroller General of the United States or any of his duly authorized representatives shall until the expiration of 3 years after final payment under the subcontract or such lesser time specified in either Appendix M of the Armed Services Procurement Regulations or the Federal Procurement Regulations Part 1–20, as appropriate, have access to and the right to examine any directly pertinent books, documents, papers, and records of such subcontractor, involving transactions related to the subcontract. The term “subcontract” as used in this clause excludes (i) purchase orders not exceedings $2,500 and (ii) subcontracts or purchase orders for public utility services at rates established for uniform applicability to the general public.

(d) The periods of access and examination described in (b) and (c) above, or records which relate to (i) appeals under the “Disputes” clause of this contract, (ii) litigation or the settlement of claims arising out of the performance of this contract, or (iii) costs and expenses of this contract as to which exception has been taken by the Comptroller General or any of his duly authorized representatives, shall continue until such appeals, litigation, claims, or exceptions have been disposed of.

ARTICLE 39-UTILIZATION OF LABOR SURPLUS AREA CONCERNS

(a) It is the policy of the Government to award contracts to labor surplus area concerns that (i) have been certified by the Secretary of Labor (hereafter referred to as certified-eligible concerns with first or second preferences) regarding the employment of a proportionate number of disadvantaged individuals and have agreed to perform substantially (A) in or near sections of concentrated unemployment or underemployment or in persistent or substantial labor surplus areas or (B) in other areas of the United States, respectively, or (ii) are noncertified concerns which have agreed to perform substantially in persistent or substantial labor surplus areas, where this can be done consistent with the efficient performance of the contract and at prices no higher than are obtainable elsewhere. The Contractor agrees to use his best efforts to place his subcontracts in accordance with this policy.

(b) In complying with paragraph (b) of this clause and with paragraph 1.d(2) of the clause of this contract entitled “Utilization of Small Business Concerns the Contractor in placing his subcontracts shall observe the following order of preference: (i) Certified-eligible concerns with a first preference which are also small business concern:s; (2) other certifiea-eligible concerns with a first preference; (3) certifiei.-eligible concerns with a second preference which are also small business concerns; (4) other certified-eligible concerns with a second preference; (5) persisitent or substantial labor surplus area concerns which are also small business concerns; (6) other persistent or substantial labor surplus area concerns; and (7) small business concerns which are not labor surplus area concerns.

ARTICLE 40-LISTING OF EMPLOYMENT OPENINGS

(This clause is applicable pursuant to 41 CFR 50–250) (a) The contractor agrees, in order to provide special emphasis to the employ" ment of qualified disabled veterans and veterans of the Vietnam era, that all suitable employment openings of the contractor which exist at the time of the execution of this contract and those which occur during the performance of this contract, including those not generated by this contract and including those occurring at an establishment other than the one wherein the contract is being performed but excluding those of independently operated corporate affiliates, shall be offered for listing at an appropriate local office of the State employment service system wherein the opening occurs and to provide such reports to such local office regarding employment openings and hires as may be required: Provided, That if this contract is for less than $10,000 or if it is with a State or local government the reports set forth in paragraphs (c) and (d) are not required.

(b) Listing of employment openings with the employment service system pursuant to this clause shall be made at least concurrently with the use of any other recruitment service or effort and shall involve the normal obligations which attach to the placing of a bona fide job order, including the acceptance of referrals of veterans and nonveterans. This listing of employment openings does not require the hiring of any particular job applicant or from any particular group of job applicants, and nothing herein is intended to relieve the contractor from any requirements in any statutes, Executive orders, or regulations regarding nondiscrimination in employment.

(c) The reports required by paragraph (a) of this clause shall include, but not be limited to, periodic reports which shall be filed at least quarterly with the appropriate local office or, where the contractor has more than one establishment in a State, with the central office of the State employment service. Such reports shall indicate for each establishment (i) the number of individuals who were hired during the reporting period, (ii) the number of those hired who were disabled veterans, and (iii) the number of those hired who were nondisabled veterans of the Vietnam era. The contractor shall submit a report within 30 days after the end of each reporting period wherein any performance is made under this contract. The contractor shall maintain copies of the reports submitted until the expiration of 1 year after final payment under the contract, during which time they shall be made available, upon request, for examination by any authorized representatives of the contracting officer or of the Secretary of Labor.

(d) Whenever the contractor becomes contractually bound by the listing provisions of this clause, he shall advise the employment service system in each State wherein he has establishments of the name and location of each such establishment in the State. As long as the contractor is contractually bound to these provisions and has so advised the State employment system, there is no need to advise the State system of subsequent contracts. The contractor may advise the State system when it is no longer bound by this contract clause.

(e) This clause does not apply to the listing of employment openings which occur and are filed outside of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, and the Virgin Islands.

(f) This clause does not apply to openings which the contractor proposes to fill from within his own organization or to fill pursuant to a customary and traditional employer-union hiring arrangement. This exclusion does not apply to a particular opening once an employer decides to consider applicants outside of his own organization or employer-union arrangement for that opening. (g) As used in this clause:

(1) “All suitable employment openings” includes, but is not limited to, openings which occur in the following job categories: Production and nonproduction; plant and office; laborers and mechanics; supervisory and nonsupervisory; technical; and executive, administrative, and professional openings which are compensated on a salary basis of less than $18,000 per year. The term includes full-time employment, temporary employment of more than 3 days' duration, and part-time employment. It does not include openings which the contractor proposes to fill from within his own organization or to fill pursuant to a customary and traditional employer-union hiring arrangement.

(2) “Appropriate office of the State employment service system” means the local office of the Federal-State national system of public employment offices with assigned responsibility for serving the area of the establishment where the employment opening is to be filled, including the District of Columbia, the Commonwealth of Puerto Rico, Guam, and the Virgin Islands.

(3) “Openings which the contractor proposes to fill from within his own organization” means employment openings for which no consideration will be given to persons outside the contractor's own organization (including any affiliates, subsidiaries, and parent companies), and includes any openings which the contractor proposes to fill from regularly established "recall" or brehire" lists. (4) "Openings which the contractor proposes

* * * to fill pursuant to a customary and traditional employer-union hiring arrangement” means employment openings for which no consideration will be given to persons outside of a special hiring arrangement, including openings which the contractor proposes to fill from union halls, which is part of the customary and traditional hiring relationship which exists between the contractor and representatives of his einployees.

(5) “Disabled veteran' means a person entitled to disability compensation under laws administered by the Veterans Administration for a disability rated at 30 percentum or more, or a person whose discharge or release from active duty was for a disability incurred or aggravated in line of duty.

(6) "Veteran of the Vietnam era” means a person (A) who (i) served on active duty with the Armed Forces for a period of more than 180 days, any part of which occurred after August 5, 1964, and was discharged or released therefrom with other than a dishonorable discharge, or (ii) was discharged or released from active duty for service-connected disability if any part of such duty was performed after August 5, 1964, and (B) who was so discharged or released within the 48 months preceding his application for

employment covered by this clause, (h) If any disabled veteran or veteran of the Vietnam era believes that the contractor (or any first-tier subcontractor) has failed or refuses to comply with the provisions of this contract clause relating to giving special emphasis in employment to veterans, such veteran may file a complaint with the veterans' employment representative at a local State employment service office who will attempt to informally resolve the complaint and then refer the complaint with a report on the attempt to resolve the matter to the State office of the Veterans' Employment Service of the Department of Labor. Such complaint shall then be promptly referred through the Regional Manpower Administrator to the Secretary of Labor who shall investigate such complaint and shall take such action thereon as the facts and circumstances warrant consistent with the terms of this contract and the laws and regulations applicable thereto.

(i) The contractor agrees to place this clause (excluding this paragraph (i)) in any subcontract directly under this contract. ARTICLE 41—PAYMENT OF INTEREST ON CONTRACTORS' CLAIMS

(AUGUST 1972) (a) If an appeal is filed by the Contractor from a final decision of the Con-tracting Officer under the “Disputes" clause of this Contract, denying a claim arising under the Contract, simple interest on the amount of the claim determined owed by the Government shall be payable to the Contractor. Such interest shall be at the rate established by the Secretary of the Treasury pursuant to Public Law 92–41; 85 STAT 97 for the Renegotiation Board, from the date the Contractor furnishes to the Contracting Officer his written appeal pursuant to the "Disputes” clause of this Contract, to the date of (i) final judgment by a court of competent jurisdiction, or (ii) mailing to the Contractor of a supple-mental agreement for execution either confirming completed negotiations between the parties or carrying out a decision of a Board of Contract Appeals.

(b) Notwithstanding (a) above, (i) interest shall be applied only from the date payment was due, if such date is later than the filing of appeal; and (ii) interest shall not be paid for any period of time that the Contracting Officer determines the Contractor has unduly delayed in pursuing his remedies before a Board of Contract Appeals or a court of competent jursidiction.

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ARTICLE 42—INTEREST (AUGUST 1972) Notwithstanding any other provision of this Contract, unless paid within 30 days all amounts that become payable by the Contractor to the Government under this Contract (net of any applicable tax credit under the Internal Revenue Code) shall bear interest at the rate established by the Secretary of the Treasury pursuant to Public Law 92–41; 85 STAT 97 for the Renegotiation Board, from the date due until paid. Amounts shall be due upon the earliest one of (i) date fixed pursuant to this Contract, (ii) the date of the first demand for payment, (iii) the date of supplemental agreement fixing the amount, or (iv) if this Contract provides for revision of prices, the date of written notice to the Contractor, stating the amount of refund payable in connection with a pricing porposal or in connection with a negotiated pricing agreement not confirmed by Contract supplement.

ARTICLE 43-ORDER OF PRECEDENCE The rights and obligations of the parties shall be subject to and governed by this. Contract, which consists of the Schedule and the General Provisions. Should there be any inconsistency between the Schedule and General Provisions or other provisions which are made a part of this Contract by reference or otherwise, theSchedule and General Provisions shall control. Should there be any inconsistency between the Schedule and the General Provisions, the Schedule Provisions shall control. This Contract consists of a cover page, Schedule, the applicable attached general provisions.

APPENDIX E

SELECT COMMITTEE ON SMALL BUSINESS,
HOUSE OF REPRESENTATIVES OF THE UNITED STATES,

Washington, D.C., May 31, 1973.
Hon. GEORGE M. STAFFORD,
Chairman, Interstate Commerce Commission,
Washington, D.C.

DEAR MR. STAFFORD: On May 22, 1973, Mr. Fritz R. Kahn and Mr. Arthur J.. Cerra of your legal staff came to my office to explain changes made in the draft definitized $650,000 contract with former Senator Gordon Allott to become. Special Counsel to the Interstate Commerce Commission.

Mr. Kahn and Mr. Cerra did an excellent job of explaining how the changes in the contract reflected the questions and issues that were raised at the hearings before my Subcommittee on Activities of Regulatory Agencies of the HouseSelect Committee on Small Business. I am still not convinced that the contract is. the best interests of the Interstate Commerce Commission or the public.

Therefore, I would appreciate it if you could address the following questions and issues that I believe are still unanswered by the latest draft of this contract.

I do not believe that Senator Allott can complete the objectives laid out in the the contract in two years. I know that there are similar and recent rate cases which, were not resolved for years.

I fear that the Interstate Commerce Commission will back to the Congress. in two years and state that the study is not complete, that the Interstate Commerce Commission then will state that it has already spent over a half-a-million dollars and that this effort will be down the drain if Congress does not appropriate more money so the Interstate Commerce Commission could have a finished product. This could happen a number of times and result in a contract price of closer to $2 million rather than the original $650,000. In fact, the Interstate Commerce Commission assured the House Appropriations Committee in 1972 that the F.Y. 1973 appropriation would be adequate, however, now the Inter-state Commerce Commission is back asking for another $450,000 in addition for the freight rate study for use in fiscal year 1974,

Cannot the Interstate Commerce Commission establish a termination date of this contract?

Can the Interstate Commerce Commission cite another major rate case investigation that only took two years to complete?

As you will recall, and by your testimony before the Subcommittee, Senator Allott is not knowledgeable about freight rates, that he has never conducted such an investigation, nor has he ever managed such a contract. I believe the $60,000 in compensation distorts the priorities of the freight rate investigation and the priorities of the Interstate Commerce Commission itself.

No matter who the Special Counsel would be for such a study, how does the Interstate Commerce Commission justify a $60,000 salary?

Could not the Interstate Commerce Commission obtain the services of a qualified individual who would be public-spirited enough to conduct this investigation for the going rate of $38,000?

Are there potential conflicts of interest which are not prohibited by the draft contract terms? I refer to “Section J-Limitation Upon Outside Activity' on Page 10 of the contract.

Why doesn't the line "primary business and professional activity” read only?

Why can't Senator Allott, or any other Special Counsel possibly assigned to this task, give the government full time effort?

In further reference to Senator Allott specifically, does the clause that reads, “Special Counsel shall not engage in the general practice of law without prejudice” mean that he can practice law for compensation as long as he determines it is not. a conflict of interest?

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