and property purchased or furnished by the contractor, title to which vests in the Government, under this paragraph are hereinafter referred to as government property. Title to government property shall not be affected by the incorporation of the property into or the attachment of it to any property not owned by the Government, nor shall such government property or any part thereof, be or become a fixture or lose its identity as personalty by reason of affixation to any reality.

(c) Identification. To the extent directed by the Contracting Officer, the contractor shall identify government property coming into the contractor's possession or custody by marking or segregating in such a way, satisfactory to the Contracting Officer, as shall indicate its ownership by the Government.

(d) Disposition. The contractor shall make such dispostion of government property which has come into the possession or custody of the contractor or under this contract as the Contracting Officer shall direct. When authorized in writing by the Contracting Officer during the progress of the work or upon completion or termination of this contract, the contractor may, upon such terms and conditions as the Contracting Officer may approve, sell, or exchange such property, or acquire such property at a price agreed upon by the Contracting Officer and the contractor as the fair value thereof. The amount received by the contractor the result of any disposition, or the agreed fair value of any such property acquired by the contractor, shall be applied in reduction of cost allowable under this contract or shall be otherwise credited to account of the Government, as the Contracting Officer may direct. Upon completion of the work or the termination of this contract, the contractor shall render an accounting, as prescribed by the Contracting Officer, of all government property which had come into the possession or custody of the contractor under this contract.

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(e) Protection of government property--Classified Materials. The contractor shall take all reasonable precautions, as directed by the Contracting Officer, or in the absence of such directions in accordance with sound industrial practice, to safeguard and protect government property in the contractor's possession or custody. Special measures shall be taken by the contractor in the protection of and accounting for any classified or special materials involved in the performance of this contract, in accordance with the regulations and requirements of ERDA.

(f) Risk of loss of government property. The contractor shall not be liable for loss or destruction of or damage to government property in the contractor's possession unless such loss, destruction or damage results from wilful misconduct or lack of good faith on the part of the contractor's managerial personnel, or unless such loss,

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destruction or damage results from a failure on the part of the contractor's managerial personnel, to take all reasonable steps to comply with any appropriate written directives of the Contracting Officer to safeguard such property under paragraph (e) hereof, The term "contractor's managerial personnel" as used herein means the contractor's directors, officers and any of its managers, superintendents, or other equivalent representatives who have supervision or direction of (1) all or substantially all of the contractor's business; or (2) all or substantially all of the contractor's operation at any one plant or separate location at which this contract is being performed; or (3) a separate and complete major industrial operation in connection with the performance of this contract; or (4) a separate and complete major construction, alteration or repair operation in connection with performance of this contract.

(g) Steps to be taken in event of loss. Upon the happening of any loss or destruction of or damage to Government Property in the possession or custody of the contractor, the contractor shall immediately inform the Contracting Officer of the occasion and extent thereof, shall take all reasonable steps to protect the property remaining, and shall repair or replace the lost, destroyed, or damaged property, if and as directed by the Contracting Officer, but shall take no action prejudicial to the right of the Government to recover therefor and shall furnish to the Government, on request, all reasonable assistance in obtaining recovery.

(h) Government property for Government use only. Government property shall be used only for the performance of this contract. $9-50.704-22 Contractor procurement.

(a) ERDA reserves the right at any time to require that the contractor submit for approval any or all procurements under this contract. The contractor shall not procure any item whose purchase is expressly prohibited by the written direction of ERDA and shall use such special and directed procurement sources as may be expressly required by ERDA. The contractor shall (note A) provide information concerning procurement methods, practices, and procedures used or proposed to be used and shall use methods, practices, and procedures which are acceptable to ERDA. Procurement arrangements under this contract (note B) shall not relieve the contractor of any obligation under this contract (including, among other things, the obligation properly to supervise, administer, and coordinate the work of subcontractors) and shall be in such form and contain such provisions as are required by this contract or as ERDA may prescribe.

(b) In addition to, and without derogation of any rights under paragraph (a) of this section and any other provision in this

contract, the contractor shall require subcontractors to furnish cost or pricing data, and shall include in such subcontracts the clause set forth in $9-3.850 except as otherwise directed or approved by ERDA.

(c) Procurement or transfer of equipment, materials, supplies, or services from a contractor-controlled source (any division or other organizational component of the prime contractor (exclusive of the contracting component) and any subsidiary or affiliate of the contractor under a common control) shall be considered a procurement for the purposes of this article.

NOTE A: When appropriate, the words, "if required by the Contracting Officer," may be inserted here.

NOTE B: When appropriate, the words "shall be made in the name of the contractor, shall not bind nor purport to bind the Government" may be inserted here.

rected by the Contracting Officer or expressly provided for by specifications issued under this contract:

(1) All workmanship shall be first class; and

(2)

All articles, equipment and materials incorporated in the work are to be:

(i) New and of the most suitable grade of their respective kinds for the purpose;

(ii) In accordance with any applicable drawings and specifications; and

(iii) Installed to the satisfaction and with the approval of the Contracting Officer.

Where equipment, materials, or articles are referred to in the specifications as "equal to" any particular standard, the Contracting Officer shall decide the question of equality.

(b) Samples and test results. If the Contracting Officer so requires, the contractor shall submit for approval samples of or test results on any materials proposed to be incorporated in the work before making any commitment for the purchase of such materials. $9-50.704-26 Nuclear reactor safety.

(a) The contractor recognizes that the activities under this contract involve the risk of a nuclear incident which, while the chances are remote, could adversely affect the public health and safety. In the conduct of its activities hereunder, the contractor will exercise a degree of care commensurate with the risk involved.

NOTE: In contracts including activities in addition to reactor operations, this paragraph should be revised as follows:

(a) The activities under this contract include the operation of a nuclear reactor and the contractor recognizes that such operation involves the risk of a nuclear incident: which, while the chances are remote, could adversely affect the public health and safety. In the operation of the nuclear reactor, the contractor will exercise degree of care commensurate with the risk involved.

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(b) The contractor shall comply with all applicable regulations of ERDA concerning nuclear reactor safety and with those requirements (including reporting requirements and instructions) of ERDA concerning nuclear reactor safety of which it is notified in writing by the Contracting Officer.

(c) Prior to the initial startup of any nuclear reactor under this contract and prior to any subsequent startup following a change which represents a significant deviation from the procedures, equipment, or analyses described in the hazards summary report for that reactor, the contractor shall:

(1) Prepare a safety analysis report and detailed plans and procedures designed to assure the safe operation and maintenance of the reactor. These will generally cover, but not be limited to: prestartup checklists; normal operation of the reactor and supporting auxiliaries; maintenance operation; emergency situations; and technical standards for equipment and systems.

(2) Establish nuclear safety control procedures to be used within the contractor's organization to insure appropriate review and internal approval of the detailed plans and procedures specified in (1) above.

(3) Submit to the Contracting Officer for his approval such procedures relating to nuclear safety as may be designated by him.

(4) Carry out a training program designed to assure that all personnel who will be engaged in the operations or maintenance of a nuclear reactor understand the approved plans and procedures for nuclear safety pertinent to their assignments.

(5) Obtain the approval of the Contracting Officer prior to such startup of the reactor.

(d) In the operation and maintenance of any nuclear reactor under this contract, the contractor shall:

(1) Use all reasonable efforts to assure that all operational and maintenance activities are performed by qualified and adequately trained personnel and, except as otherwise agreed in writing, are conducted under the supervision of personnel who are qualified to appraise any emergency condition and take prompt effective action with respect thereto.

(2) Operate the reactors within the operating limits which may be prescribed by the Contracting Officer. The Contracting Officer will consult with the contractor in formulating and revising such operating limits.

(3) Follow strictly the procedures relating to nuclear safety approved by the Contracting Officer as specified in (c)(3) above and submit to the Contracting Officer for his approval any proposed changes in such procedures.

(4) Establish a system of inspection approved by the Contracting Officer (including review of inspection reports by competent technical personnel) that will (i) provide frequent and periodic checks of reactor performance and of the qualifications and training of operating and maintenance personnel and (ii) provide for investigation of any unusual or unpredicted reactor conditions that might affect the safe operation of the reactor.

(5) Report promptly to the Contracting Officer any change in the physical condition of the reactor or its operating characteristics that might in the judgment of the contractor affect the safe operation of the reactor.

(6) Shut down the reactor immediately whenever so instructed by the Contracting Officer, or whenever, in the judgment of the contractor, the risk of a nuclear incident endangering persons property warrants such action.

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