or defend any such action.

If the settlement or defense of any such action or claim is undertaken by ERDA, the contractor or other person indemnified shall furnish all reasonable assistance in effecting a settlement or asserting a defense.

(e) The obligations of ERDA under this article shall not be affected by any failure on the part of the contractor to fulfill its obligation under this contract, and shall be unaffected by the death, disability or termination of existence of the contractor or by the completion, termination, or expiration of this contract.

(f) The parties to this contract enter into this article upon the condition that this article may be amended at any time by the mutual written agreement of ERDA and the contractor and that such amendment may, by its express terms, provide that it will apply to any nuclear incidents which occur thereafter.

(g) The provisions of this article shall not be limited in any way by, and shall be interepreted without reference to, any other article of this contract [, including Article Disputes]: Provided, however, That the following provisions of this contract: Article Covenant Against Contingent Fees; Article Officials Not to Benefit; Article Assignment; and Article Examination of Records; and any provisions later added to this contract which, under applicable Federal law, including statutes, executive orders, and regulations, are required to be included in agreements of this type contained in this article, shall apply to this article.

(h) [The following section will be included in those contracts containing indemnity agreements executed under the general contract authority of ERDA.]

To the extent that the contractor is compensated by any financial protection, or is indemnified pursuant to this article, or is effectively relieved of public liability by an order or orders limiting same pursuant to section 170e of the Atomic Energy Act of 1954, as amended, the provisions of Article (General Authority Indemnity)

shall not apply.

$9-50.704-8 Indemnity assurance to architect

(a)(1)

engineer or supplier prior to operation
of a production or utilization facility.

The definitions set out in the Atomic Energy Act of 1954, as amended (hereinafter called the Act), shall apply to this article.

(2) The services of supplies furnished under this agreement

are intended to be used in connection with the construction and/or operation of a production or utilization facility.

(3) ERDA will use its best efforts to include in any contract for the operation of such facility, an agreement based on the then current approved form of indemnity agreement under section 170d of the Atomic Energy Act of 1954, as amended, whereby ERDA will indemnify all persons indemnified, including the contractor, against public liability for nuclear incidents arising out of or in connection with contractual activities under the contract for the operation of said facilty, in accordance with the authority provided in subsection 170d of the Act.

(4)(i) ERDA will enter into an indemnity agreement, in accord ance with the authority provided in subsection 170d of the Act, with the contractor, without further consideration from the contractor, at any time when all of the following circumstances are present:

(A) The services or supplies furnished under this contract are being used in connection with any activity or situation which involves a risk of substantial nuclear incident; and

(B) There is not in effect an indemnity agreement as described in subparagraph (3) of this clause, and

(c) ERDA's authority to enter into agreements of indemnification under section 170(d) of the Act has not expired or been So amended as to deprive ERDA of authority to enter into such an agreement.

(b) In that agreement ERDA will indemnify the contractor and other persons indemnified against public liability arising out of or in connection with the contractual activity of this contract.

(c) Such agreement will be based on the then current approved form of section 170d indemnity agreement used in contracts between ERDA and its contractors, and shall further include an obligation to indemnify the contractor, and persons indemnified out of or resulting from nuclear incidents for such public liability arising occurring between the time when the services or supplies furnished under this contract are first used in connection with any activity or situation which involves risk of a substantial nuclear incident and the time when such agreement is executed.

(d) The indemnity provided by ERDA under all indemnity agreements entered into by ERDA under section 170 of the Act, including this agreement, shall not exceed $500 million in the aggregate for each nuclear incident, without regard to the number of persons

indemnified, excluding the reasonable costs of investigating and settling claims and defending suits for damages: Provided, however, That with respect to incidents occurring outside the United States such aggregate indemnity shall not exceed $100 million, including such reasonable costs.

(a) Accounts. The contractor shall maintain a separate and distinct set of accounts, records, documents, and other evidence showing and supporting all allowable costs incurred, revenues or other applicable credits, fixed-fee accruals, and the receipt, use, and dispostion of all Government property coming into the possession of the contractor under this contract. The system of accounts employed by the contractor shall be satisfactory to ERDA and in accordance with generally accepted accounting principles consistently applied.

NOTE A: If the contract includes the clause for "price reduction for defective cost or pricing data" required by FPR 1-3.814-1, paragraph (a) above should be modified by adding the words "or anticipated to be incurred" after the words "allowable costs incurred."

(b) Inspection and audit of accounts and records. All books of account and records relating to this contract shall be subject to inspection and audit by ERDA at all reasonable times, before and during the period of retention provided for in (d) below and the contractor shall afford ERDA proper facilities for such inspection and audit.

(c) Audit of subcontractors' records. The contractor also agrees, with respect to any subcontracts (including lump-sum or unitprice subcontracts or purchase orders) where, under the terms of the subcontract, costs incurred are a factor in determining the amount payable to the subcontractor of any tier, to conduct an audit of the costs of the subcontractor in a manner satisfactory to ERDA or to have the audit conducted by the next higher tier subcontractor in a manner satisfactory to the contractor and ERDA except when ERDA elects to waive such audit or approves other arrangements for the conduct of the audit.

(d) Disposition of records. Except as agreed upon by the Government and the contractor, all financial and cost reports, books of account and supporting documents, and other data evidencing costs allowable and revenues and other applicable credits under this contract, shall be the property of the Government, and shall be delivered to the Government or otherwise disposed of by the contractor either as the contracting officer may from time to time direct during the progress of the work or, in any event, as the contracting officer shall direct upon completion or termination of this contract and final audit

of accounts hereunder.

Except as provided in this contract, all other records in the possession of the contractor relating to this contract shall be preserved by the contractor for a period of three years after final payment under this contract or otherwise disposed of in such manner as may be agreed upon by the Government and the contractor.

(e) Reports. The contractor shall furnish such progress reports and schedules, financial and cost reports, and other reports concerning the work under this contract as the contracting officer may from time to time require.

(f) Inspections. The ERDA shall have the right to inspect the work and activities of the contractor under this contract at such time and in such manner as it shall deem appropriate.

(g) Subcontracts. The contractor further agrees to require the inclusion of provisions similar to those in paragraphs (a) through this paragraph (g) of this clause in all subcontracts (including lumpsum or unit-price subcontracts or purchase orders) of any tier entered into hereunder where, under the terms of the subcontract, costs incurred are a factor in determining the amount payable to the subcontractor.

NOTE: If the prime contract contains a "defective cost or pricing data" clause, this paragraph (g) shall be modified by adding the following:

The contractor further agrees to include an audit clause, the substance of which is the "audit" clause in FPR 1-3.814-2, in each subcontract which does not include provisions similar to those in paragraphs (a) through this paragraph (g) of this clause but which contains a "defective cost or pricing data" clause.

(h) Internal audit. The contractor agrees to conduct an internal audit and examination satisfactory to ERDA of the records, operations, expenses, and the transactions with respect to costs claimed to be allowable under this contract annually and at such other times as may be mutually agreed upon. The results of such audit, including the working papers, shall be submitted or made available to the concerning officer.

NOTE: This provision shall be included in (a) all cost-type contracts (or subcontracts) involving an estimated cost exceeding $5 million and expected to run more than 2 years, and (b) any other costtype contract (or subcontract) where deemed advisable by the head of the procuring activity and when the contractor (or subcontractor) already has an established internal audit organization.

$9-50.704-10 Alterations and additions.

The following alterations in or additons to the provisions of this form of contract were made prior to execution of the contract by the parties.

$9-50.704-11 Changes.

(a) Changes and adjustment of fee. The contracting officer may at any time and without notice to the sureties, if any, issue written directions within the general scope of this contract requiring additional work or directing the omission of or variation in work covered by this contract. If any such direction results in a material change in the amount or character of the work described in the clause entitled "Statement of work," an equitable adjustment of the fixed fee shall be made in accordance with the agreement of the parties and the contract shall be modified in writing accordingly. Any claim by the contractor for an adjustment under this clause must be asserted in writing within 30 days from the date of receipt by the contractor of the notification of change; provided, however, that the contracting officer, if he decides that the facts justify such action, may receive and act upon any such claim asserted at any time prior to final payment under this contract. A failure to agree on an equitable adjustment under this clause shall be deemed to be a dispute within the meaning of the clause entitled "Disputes."

(b) Work to continue. Nothing contained in this clause shall excuse the contractor from proceeding with the prosecution of the work in accordance with the requirements of any direction hereunder. $9-50.704-12 Contractor's organization.

(a) Organization chart. As promptly as possible after the execution of this contract, the contractor shall furnish to the contracting officer a chart showing the names, duties, and organization key personnel to be employed in connection with the work, and shall furnish from time to time supplementary information reflecting changes therein.

(b) Supervising representative of contractor. Unless otherwise directed by the contracting officer, a competent full-time resident supervising representative of the contractor satisfactory to the Contracting officer shall be in charge of the work at the site at all times.

(c) Control of employees. The contractor shall be responsible for maintaining satisfactory standards of employee competency, conduct, and integrity and shall be responsible for taking such disciplinary action with respect to his employees as may be necessary.

In