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ly, or part without any additional (i) In small purchases using small »rocessing. A jewel bearing may be purchase procedures other than in

ither unmounted or mounted into a purchases of jewel bearings as end 'ing or bushing. Examples of jewel items; Dearings are: Watch holes-olive, (ii) For jewel bearings used in items watch holes-straight, pallet stones, that are to be procured and used outoller jewels (jewel pins), end stones side the United States, its possessions, caps), vee (cone) jewels, instrument and Puerto Rico; rings, cups, double cups, and orifice (iii) When the procuring contracting jewels. As used herein, the term "jewel officer has positive knowledge that bearings" includes “related items." the item being procured does not con

(2) "Related items" means other tain jewel bearings; synthetic Sapphire or ruby compo (iv) When quality standards and renents. Examples of related items are quirements are beyond the production pivots, knife edges, insulators, spacers, capabilities of the plant as evidenced windows, and striking surfaces other by a written statement to that effect than pallet stones.

from the management of the Plant; (3) "Price list" is the official U.S.

(v) In the case of requirements conGovernment Jewel Bearing Price List

tracts (see § 1-3.409(b)) and indefinite for jewel bearings produced by the quantity contracts (see § 1-3.409(c)) William Langer Jewel Bearing Plant.

which authorize more than one activiThis list is issued periodically by the ty to place orders upon the contractor. General Services Administration.

It is not practicable for a contractor to (4) “Plant” means the Government

place an order with the Plant within owned William Langer Jewel Bearing

90 calendar days after the effective Plant, Rolla, N. Dak.

date of his contract for the entire (5) "Military Standard Jewel Bear

amount of jewel bearings and related

items that will be required for the pering" means a jewel bearing conform

formance of the contract. Where such ing to Military Specification No. MIL

contracts are involved, the clause in B-27497 (latest revision) entitled

8 1-1.319(e) may be changed by modi. "Bearings, Jewel, Sapphire or Ruby,

fying paragraphs (b) and (c) to provide Synthetic."

for procurement, on a quarterly or (c) Policy. (1) The Office of Emer

other periodic basis, of an amount of gency Preparedness has determined

jewel bearings and related items equal that the William Langer Jewel Bear

to the amount (by type and size) of ing Plant is an essential part of the na- jewel bearings and related items actutional mobilization base and that its ally used by the contractor in the percontinued operation as a domestic formance of the contract during the source of jewel bearings is in the inter

vel bearings is in the inter period immediately preceding the orest of the United States. Therefore, all dering date. In addition, jewel beardirect Government purchases of jewel ings and related items so obtained bearings shall be made from the Plant. shall be placed in the contractor's inIn addition, all procurements of items ventory for use in the performance of in the Federal Supply Classes and current or future Government conGroups listed in paragraph (d) of this tracts or for use in commercial producsection, or subassembly, component, or tion. Contracts which provide for peripart thereof, whether procured by the odic ordering on an actual use basis Government direct or through con shall not be subject to the equitable tractors, shall provide a requirement adjustment provisions of paragraph in the solicitations and resulting con- (e) of the clause in 1-1.319(e). Actracts that jewel bearings in the quan cordingly, the clause may be further tities and of the types and sizes (in- modified to delete paragraph (e). cluding tolerances) necessary for the (vi) When the Plant's backlog of curend items to be supplied under the rent business precludes delivery of the contract must be purchased from the bearings within reasonable time limits, Plant and be incorporated in the deliv- as confirmed in writing by the manered items, except:

agement of the Plant; or

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(vii) When the urgency of the requirement for all or part of the procurement of a jeweled item is such that delivery of prefabricated end items available from the stock of any dealer, wholesaler, distributor, or manufacturer offers the best possible solution. In this event, however, the required source provisions of this 811.319 will be exempted only to the extent that immediate deliveries are to be made of the specified quantity of end items. The required source provisions shall apply to any quantity in excess of that specified for immediate delivery.

(2) Whenever it is necessary to rede. sign or reengineer jeweled items to satisfy specific performance requirements, the manufacturer of an item shall be required to use military standard jewel bearings in the redesign. This requirement may be excepted only when the dimensional tolerances or configurations of the military standard jewel bearings are such that their use in the product would prevent attainment of the required level of performance specified for the items. However, when one or more nonstandard bearings must be used to satisfy the performance requirements of certain applications of a jeweled item but military standard jewel bearings will function satisfactorily for other applications of that item, the item shall be redesigned to provide for the use of military standard jewel bearings. In no instance shall a manufacturer be required to redesign a jeweled item solely for the purpose of converting from the use of nonstandard to military standard jewel bearings. This requirement is not intended to prevent any manufacturer from voluntarily redesigning a jeweled item solely to accommodate the use of military standard jewel bearings. A voluntarily redesigned bearing may be economically advantageous because of the unit price of military standard jewel bearings at the Plant.

(3) The cost differential between Langer-made bearings and imported bearings shall not be used as justifica tion to avoid the purchase and use of jewel bearings from the Plant.

6605 ....... Navigational instruments. 6610 ........ Flight instruments. 6615 ........ Auto pilot mechanisms and airborne

gyro components. 6620. Engine instruments. 6625 ........

Electrical and electronic properties meas.

uring and testing instruments. 6630 Chemical analysis instruments. 6635 · Physical properties testing equipment. 6636 Environmental chambers and related

equipment. 6640 Laboratory equipment and supplies. 6645 ..

Time measuring instruments 6650 Optical instruments. 6655.. Geophysical and astronomical instru

ments. 6660 Meteorological instruments and appara

tus. 6665 ....... Hazard detecting instruments and appa

ratus. 6670. Scales and balances. 6675... Drafting, surveying, and mapping instru

ments. 6680. Liquid and gas flow, liquid level, and me.

chanical motion measuring instru

ments. 6685 Pressure, temperature, and humidity

measuring and controlling instruments. 6695 ......... Combination and miscellaneous instru

ments.
Fire control equipment.
Guided missiles.
Aircraft and airframe structural compo-

nents.
Aircraft components and accessories.
Space vehicles.
Motor vehicles and cycles.
Vehicular equipment components.
Fire fighting. rescue, and safety equip-

ment.
Measuring tools.
Communications equipment.
Electrical and electronic equipment com-

ponents.
Alarm and signal systems.
Medical, dental, and veterinary equip-

ment and supplies.

Photographic equipment. 69 ............ Training aids and devices.

(2) The Plant may initially reject a contractor's or subcontractor's purchase order because of that customer's currently excessive and overdue indebtedness to the Plant. The Plant is required to refuse shipments against purchase orders whenever shipments

would increase the indebtedness of a customer beyond any credit limit which may have been designated by GSA. Rejection by the Plant of a contractor's or subcontractor's purchase order or refusal to ship against an accepted purchase order under these circumstances will not be considered justification for the type of waiver of the purchase requirement (with a conse. quent adjustment in the contract price) which is permitted in certain instances under the contract clause in (e), below. If the contractor or subcontractor whose purchase order is rejected or to whom shipments are refused for the foregoing reasons is in disagreement with the management of the Plant on whether the indebtedness actually exists or the amount of such indebtedness, the Government will require the plant to accept the contractor's purchase order and to make shipments against the purchase order on a "cash-on-delivery" (c.o.d.) basis for each lot shipped. If necessary, arrangements can be made for progress payments by the Government to finance the c.o.d. requirements. Such measures will be independent of and have no effect on the final disposition of the alleged indebtedness or controversy between the contractor and management of the Plant.

(3) In all procurements subject to the requirements of this § 1-1.319, the clause in paragraph (e), below, shall be inserted in all solicitations and contracts. Bids or proposals shall be predicated on this requirement.

(4) Subsequent to the award of a contract that includes the clause required by paragraph (e), below, the contracting officer may waive the "use" but not the "acquisition" requirements of the clause. The waiver may be granted upon submission of a written request by the contractor if the contractor or subcontractor has on hand jeweled subassemblies or end items such as are required to be delivered under the contract; and either:

(i) The production of such subassemblies or end items specifically in performance of all or a part of the contract using Langer-made jewel bearings would interfere with economical or normal production schedul

ing of the product under contract or with the production of another item (governmental or commercial); or

(ii) The delivery schedule under the contract or subcontract is such that the use of on-hand jewel bearings or jeweled subassemblies or parts is necessary. Under either of the foregoing circumstances, the written request shall include a statement that the Langer-made jewel bearings which he is required to purchase under the contract will be used by him to replace his inventory of jewel bearings, subassemblies, or end items. Waivers of the use requirement shall be granted only to the extent and for the period of time necessary to permit the contractor to acquire and use Langer-made jewel bearings. In any instance when the use requirement is waived, an equitable adjustment for cost savings resulting therefrom shall be made.

(5) A contractor shall not be authorized to purchase from the Plant jewel bearings in amounts which exceed the quantity required to satisfy the contract.

(6) All purchase orders placed with the Plant shall cite the prime contract number and the date of the price list cited in the prime contract.

(e) Contract clause. In all procurements subject to these procedures, the following clause is required for use:

REQUIRED SOURCE FOR JEWEL BEARING (a) For the purpose of this clause:

(1) “Jewel bearing" means a piece of synthetic sapphire or ruby of any shape, except a phonograph needle, which has one or more polished surfaces and which is suitable for use in an instrument, mechanism, subas. sembly, or part without any additional processing. A jewel bearing may be either unmounted or mounted into a ring or bushing. Examples of jewel bearings are: Watch holes-olive, watch holes-straight, pallet stones, roller jewels (jewel pins), end stones (caps), vee (cone) jewels, instrument rings, cups, double cups, and orifice jewels. As used herein, the term "jewel bearings" includes “related items."

(2) “Related items" means other synthetic sapphire or ruby components. Examples of related items are pivots, knife edges, insulators, spacers, windows, and striking surfaces other than pallet stones.

(3) "Price list" means the official U.S. Government Jewel Bearing Price List for jewel bearings produced by the William

Langer Jewel Bearing Plant. This list is issued periodically by the General Services Administration.

(4) “Plant" means the Government-owned William Langer Jewel Bearing Plant, Rolla, N. Dak.

(5) "Military Standard Jewel Bearing" means a jewel bearing conforming to Mili. tary Specification No. MIL-B-27497 (latest revision) entitled “Bearings, Jewel, Sapphire or Ruby, Synthetic."

(b) Jewel bearings required in the performance of this contract shall be procured from the Plant at prices established in the price list dated (date to be filled in by Contracting Officer). Each purchase order issued to the Plant under this contract shall include the prime contract number and date of the price list cited above. The Contractor agrees that the quantities, types, and sizes (including tolerances) of jewel bearings so ordered will be those required for the performance of this contract. Within 90 calendar days after the effective date of this contract the Contractor shall furnish to the Contracting Officer a certification that the required jewel bearings were ordered pursuant to this clause. The Contractor agrees to notify the Contracting Officer promptly of the rejection of his (or any subcontractor's) purchase order in whole or in part by the Plant. The requirement for purchase and use of jewel bearings from the Plant will be waived to the extent of orders rejected because of the Plant's inability to deliver. If such a waiver is granted, an equitable ad justment shall be made in the contract price or delivery schedule, or both, in accordance with the "Changes" clause of this contract. Further, the requirement for use (but not the requirement for purchase from the Plant) of jewel bearings may be waived by the Contracting Officer when such waiver is determined by him to be consistent with established policy.

(c) The Contractor agrees to use the Langer-made jewel bearings in the production of subassemblies or end items either under this contract or in his commercial production.

(d) Whenever it is necessary for the Contractor or any subcontractor to redesign or reengineer jeweled items in order to satisfy specific performance requirements, the Contractor or subcontractor shall provide in such redesign for the use of military standard jewel bearings. This requirement does not apply when the dimensional tolerances or configurations of military standard jewel bearings are such that their use in the product would prevent attainment of the required level of performance specified for the item. However, when one or more nonstandard bearings must be used to satisfy performance requirements of the jeweled item but military standard jewel bearings will

function satisfactorily for other applications within the same item, the item will be required to be redesigned to provide for the use of military standard jewel bearings in such "other" applications. The Contractor or subcontractor is not required to redesign a jeweled item solely for the purpose of converting from the use of nonstandard to military standard jewel bearings. Nothing in this contract shall prevent any Contractor or subcontractor from voluntarily redesigning a jeweled item solely to accommodate the use of military standard jewel bearings.

(e) If at the end of the contract period, the total quantity of end items actually or. dered under this contract is less than the total estimated quantity, and the Contractor, pursuant to paragraph (b) of this clause, has purchased a larger quantity of Langer-made jewel bearings than used in deliveries made under this contract, an equitable adjustment shall be made (if requested by the Contractor within 90 days after the end of the contract period) to reimburse the Contractor for any additional costs resulting from such excess purchase but in no event shall such additional costs cover more jewel bearings than necessary to deliver the total estimated quantity of end items. Such excess jewel bearings shall be disposed of as directed by the Contracting Officer. Howev. er, such excess jewel bearings may be used in partial satisfaction of the requirements to purchase Langer-made jewel bearings pursuant to paragraph (b) of this clause where a subsequent contract to furnish similar end items to the Government is entered into with the same Contractor. In this situation the requirement to purchase and use jewel bearings from the Plant will be waived up to the amount of such excess jewel bear. ings in Contractor's possession upon submission of a written request by the Contractor. Such request shall contain documented evidence in support of the waiver of purchase and nonuse of such excess jewel bearings. If such waiver is granted, an equitable adjustment to the extent of differences in price lists shall be made in the contract price in accordance with the “Changes" clause of this contract.

(f) The Contractor agrees to retain for 3 years from the date of final payment under this contract and upon request of the Contracting Officer to make available during that period records showing compliance with this clause.

(g) The Contractor agrees to insert this clause, including this paragraph (g), in every subcontract and purchase order issued in performance of this contract unless he knows that the subassembly, component, or part being purchased does not contain jewel bearings.

(37 FR 19815, Sept. 22, 1972, as amended at 40 FR 18785, Apr. 30, 1975)

purchases covered by Subpart 1-3.6, which contain a disputes clause shall also include the payment of interest on contractors' claims clause set forth below:

8 1-1.320 Subcontractor gifts and kick.

backs. Public Law 86-695, September 2, 1960 (41 U.S.C. 51-54), prohibits the payment, directly or indirectly, by or on behalf of a subcontractor in any tier under any Government negotiated contract of any fee, commission, compensation, gift, or gratuity to the prime contractor or any higher tier subcontractor or to any officer, partner, employee, or agent of the prime contractor, of any higher tier subcontractor, as an inducement or acknowledgment for the award of a subcon

et or order. The Act further provides that the amount of any such fee, commission, or compensation, or the cost or expense of any such gratuity or gift, whether heretofore or hereafter paid by the subcontractor, shall not be charged, either directly or indirectly, as a part of the contract price charged by the subcontractor to the prime contractor or higher tier subcontractor. It also creates a conclusive presumption that the cost of any such prohibited payment has been included in the price of the subcontract or order and ultimately borne by the Government. The Act provides for the recovery on behalf of the United States of any such payment from either the subcontractor or recipient, by court action, or by setoff of moneys otherwise owing to the subcontractor either by the United States directly or by the prime contractor. The Act imposes criminal penalties on any person who knowingly makes or receives, directly or indi. rectly, any such prohibited payment. (30 FR 9539, July 31, 1965)

PAYMENT OF INTEREST ON CONTRACTORS'

CLAIMS (a) If an appeal is filed by the contractor from a final decision of the contracting offi. cer under the disputes clause of this contract, denying a claim arising under the contract, simple interest on the amount of the claim finally determined owed by the Gov. ernment shall be payable to the contractor. Such interest shall be at the rate determined by the Secretary of the Treasury pursuant to Public Law 92-41, 85 Stat. 97, from the date the contractor furnishes to the contracting officer his written appeal under the disputes clause of this contract, to the date of (1) a final judgment by a court of competent jurisdiction, or (2) mailing to the contractor of a supplemental 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, (1) interest shall be applied only from the date pay. ment was due, if such date is later than the filing of appeal, and (2) 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 jurisdiction. (37 FR 15152, July 28, 1972)

8 1-1.323 Preference for U.S. Flag Air Car.

riers. (40 FR 60019, Dec. 31, 1975)

§ 1-1.321 (Reserved)

$ 1-1.322 Payment of interest on contrac

tors' claims. (a) It is the Government's policy to pay interest on a contractor's claim when such claim is ultimately decided in favor of the contractor pursuant to the disputes clause of his contract.

(b) In order to implement the policy set forth in paragraph (a) of this section, all contracts, except for small

$ 1-1.323-1 Policy.

The policy of the United States regarding the use of air carriers is stated in the International Air Transportation Fair Competitive Practices Act of 1974 (Pub. L. 93-623, January 3, 1975). The Act amended Title XI of the Federal Aviation Act of 1958 (49 U.S.C. 1501 et seq.) and requires all Federal agencies, Government contractors and subcontractors to use U.S. flag air carriers for international air transportation of personnel (and their personal effects) or property to the extent serv. ice by such carriers is available. As used in this section the term “U.S. Flag Air Carrier" means a carrier

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