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supporting data which will permit adequate evaluation of the cost or pricing data submitted, along with the computations and projections used therein, which were available to the Contractor as of the date of execution of his Contractor's Certificate of Current Cost or Pricing Data.

(b) The Contractor agrees to insert the substance of this clause including this paragraph (b) in all subcontracts hereunder in excess of $100,000 where the price 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.

(3) The Contractor shall insert the substance of the following clause in each firm fixed-price subcontract hereunder in excess of $100,000 where the price 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.

AUDIT-PRICE ADJUSTMENTS

(a) 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, that 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 and further Provided that such change or other modification to this contract must result from a change or other modification to the Government prime contract.

(b) For purposes of verifying that any cost or pricing data submitted in conjunction with a contract change or other modification involving an amount in excess of $100,000 are accurate, complete, and current, the Contracting Officer, or his authorized representatives, shall, until the expiration of three years from the date of final payment under this contract, have the right to examine those books, records, documents and other supporting data which will permit adequate evaluation of the cost or pricing data submitted, along with the computations and projections used therein, which were available to the Contractor as of the date of execution of his Contractor's Certificate of Current Cost or Pricing Data. (c) The Contractor agrees to insert the substance of this clause including this paragraph (c) in all subcontracts hereunder in excess of $100,000, so as to apply until three years after final payment of the subcontract.

PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA

II. (a) If the Contracting Officer determines that any price, including profit or fee, negotiated in connection with this contract was increased by any significant sums because the Contractor, or any subcontractor in connection with a subcontract covered by (c) below, furnished incomplete or inaccurate cost or pricing data or data not current as certified in his Contractor's Certificate of Current Cost or Pricing Data, then such price shall be reduced accordingly and the contract shall be modified in writing to reflect such adjustment.

(b) Failure to agree on a reduction shall be a dispute concerning a question of fact within the meaning of the "Disputes" clause of this contract.

(c) The Contractor agrees to insert the substance of paragraphs (a) and (c) of this clause in each of his cost-reimbursement type, time and material, laborhour, price redeterminable, or incentive subcontracts hereunder in excess of $100,000 and in any other subcontract hereunder in excess of $100,000 unless the price 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 followin clause:

PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA-PRICE ADJUSTMENTS

(a) 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 that 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. The right to price reduction under this clause shall be limited to such price adjustments.

(b) If the Contractor determines that any price, including profit or fee, negotiated in connection with any price adjustment within the purview of paragraph (a) above was increased by any significant sums because the subcontractor or any of his subcontractors in connection with a subcontract covered by paragraph (c) below, furnished incomplete or inaccurate cost or pricing data or data not current as of the date of execution of the subcontractor's certificate of current cost or pricing data, then such price shall be reduced accordingly and the subcontract shall be modified in writing to reflect such adjustment.

(c) The subcontractor agrees to insert the substance of this clause in each subcontract hereunder which exceeds $100,000.

SUBCONTRACTOR COST AND PRICING DATA

III. (a) The Contractor shall require subcontractors hereunder to submit in writing 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 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 of 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, laborhour, 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 Contratcor shall insert the substance of the following clause:

SUBCONTRACTOR COST AND PRICING DATA-PRICE ADJUSTMENTS

(a) Paragraph (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, estalished 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.

24. Patents and Data

(a) As used in this patent section, the following terms have the definitions given herein.

(i) The terms "Subcontract" and "Subcontractor" mean any subcontract or subcontractor of the Contractor, and any lower-tier subcontract or subcontractor under this contract. Except as otherwise provided in this contract, the term "subcontracts" includes purchase orders under this contract. (ii) The term "Subject Invention" means any invention, discovery, improvement, or development (whether or not patentable) conceived and first actually reduced to practice, in the performance of the work called for under the contract.

(iii) The term "Scientific and Technical Personnel" means any person employed by or working under contract with the Contractor (other than a subcontractor whose responsibilities with respect to rights occurring to the Government in inventions arising under subcontracts are set forth in subparagraph (b) of this Section) who by reason of the nature of his duties in connection with the performance of his contract might reasonably make inventions.

(iv) "Standard Commercial Item" means any machine, manufacture, or composition of matter which has been sold or offered for sale to the public at a time prior to the request for a license pursuant to paragraph (c) (iv) and which is available at the time of the request at a price reasonable under the circumstances.

(v) "Specified Work Object" means a process, machine, manufacture or composition of matter which is the subject of the experimental, developmental or research work called for or required under this contract.

(vi) "Background Patent" means a foreign or domestic patent which the Contractor has the right to license to others and which is necessarily employed in any Subject Invention or in any Specified Work Object. The term "necessarily employed" means those instances where the practice of any Subject Invention or any Specified Work Object would infringe a patent which the Contractor has the right to license to others. Provided, however, (1) Contractor's patented inventions which are employed for convenience only and for which there are equivalent reasonably available substitutes are not "necessarily employed" in any Specified Work Object, and (2) Contractor's patents on standard commercial items, or such items with relatively minor modifications, which are incorporated in any Subject Invention or in any Specified Work Object are not Background Patents.

(b) The Contractor agrees to grant a license at reasonable terms under any United States Background Patent at the written request of any responsible applicant. Such license shall be limited for use in connection with:

(1) (i) a Subject Invention or (ii) in connection with any Specified Work Object, and

(2) for use in connection with the treatment of animal pelts or furs. The Contractor agrees that it will not seek injunctive relief in enforcing its rights against any applicant for such license determined by the Secretary to be a responsible party. The Secretary's determination as to the responsibility of an applicant shall be final and binding upon the Contractor.

(c) (i) The Contractor agrees that it will promptly disclose to the Contracting Officer each Subject Invention and that subject to exceptions in (c) (ii), it will assign and transfer to the Government, as represented for this purpose by the Secretary of the Interior, full and entire domestic right, title and interest in and to such Subject Inventions. The Contractor warrants that it has or will have full authority to make such assignments by reason of agreements with all of its scientific and technical personnel who will be engaged in work under this contract to assign to the Contractor all discoveries and inventions made within the scope of their employment.

The Contractor shall require the inclusion of patent rights section containing the substance of paragraphs (a), (c), and (f) of this patent rights section in any employment agreements and in any subcontracts hereunder, except subcontracts for the purchase of supplies.

(ii) Where the Subject Invention made in the course of or under the contract is not a primary object of the contract, the Contracting Officer, with the concurrence of the Solicitor of the Department of the Interior, shall determine the

disposition of rights therein in accordance with the President's Patent Policy Statement of October 10, 1963.

(iii) Foreign rights in any Subject Invention shall be determined by the Contracting Officer, with the concurrence of the Solicitor of the Department of the Interior, after such Subject Invention is identified.

(iv) The Government will contemporaneously grant to the Contractor an irrevocable non-exclusive royalty-free license in and to any Subject Invention assigned and transferred to the Government under this subsection.

(d) Authorization and Consent

The Government hereby gives its authorization and consent for all use and manufacture of any invention described in and covered by a patent of the United States in the performance of this contract or any part hereof or any amendment hereto or any subcontract hereunder (including any lower tier subcontract).

(e) Notice and Assistance Regarding Patent and Copyright Infringement.

(i) The Contractor shall report to the Contracting Officer, promptly and in reasonable written detail, each notice or claim of patent or copyright infringement based on the performance of this contract of which the Contractor has knowledge.

(ii) In the event of any suit against the Government, or any claim against the Government made before suit has been instituted, on account of any alleged patent or copyright infringement arising out of the performance of this contract or out of the use of any supplies furnished or work or services performed hereunder, the Contractor shall furnish to the Government, upon request, all evidence and information in possession of the Contractor pertaining to such suit or claim. Such evidence and information shall be furnished at the expense of the Government except in those cases in which the Contractor has agreed to indemnify the Government against the claim being asserted.

(f) The Contractor shall annually submit to the Contracting Officer a report listing all Subject Inventions. If to the best of the Contractor's knowledge and belief, no Subject Inventions have resulted from work performed during the reporting period, the Contractor shall so certify.

(g) All information derived from the performance of the work called for under this contract, and all technical data and reports required hereunder shall not be copyrighted and shall become the property of the Government, and the Contractor, without additional compensation, hereby grants to the Government the full right to use or publish the data and reports or any portion thereof, and have others do so, for any purpose without limitation. The Contractor agrees not to publish or make available to others, except representatives of the Contracting Officer, the results of the work under this contract or any information concerning the same, without approval in writing from the Con tracting Officer.

(h) The Contractor shall indemnify the Government and its officers, agents, and employees against liability, including costs, for infringement of any United States letters patent (except letters patent issued upon an application which is now or may hereafter be kept secret or otherwise withheld from issue by order of the Government) arising out of or in the course of the performance of this contract. The foregoing indemnity shall not apply unless the Contractor shall have been informed as soon as practicably by the Government of the suit or action alleging such infringement, and shall have given such opportunity as is afforded by applicable laws, rules, or regulations to participate in the defense thereof; and further, such indemnity shall not apply if: (i) the infringement results from compliance with specific written instruction of the Contracting Officer directing a specific change in the supplies to be delivered or in the materials or equipment to be used, or directing a specific manner of performance of this contract not normally used by the Contractor; or (ii) the infringement results from addition to, or change in, such supplies or components furnished or construction work performed which addition or change was made subsequent to delivery of performance by the Contractor; or (iii) the claimed infringement is settled without the consent of the Contractor, unless required by final decree of a court of competent jurisdiction. 25. Disputes

(a) Except as otherwise provided in this contract, any dispute concerning a question of fact arising under this contract which is not disposed of by agree

ment shall be decided by the Contracting Officer, who shall reduce his decision to writing and mail or otherwise furnish a copy thereof to the Contractor. The decision of the Contracting Officer shall be final and conclusive unless, within 30 days from the date of receipt of such copy, the Contractor mails or otherwise furnishes to the Contracting Officer a written appeal addressed to the Secretary. The decision of the Secretary or his duly authorized representative for the determination of such appeals shall be final and conclusive unless determined by a court of competent jurisdiction to have been fraudulent, or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad faith, or not supported by substantial evidence. In connection with any appeal proceeding under this clause, the Contractor shall be afforded an opportunity to be heard and to offer evidence in support of its appeal. Pending final decision of a dispute hereunder, the Contractor shall proceed diligently with the performance of the contract and in accordance with the Contracting Officer's decision.

(b) This "Disputes" Clause does not preclude consideration of law questions in connection with decisions provided for in subsection (a) above: Provided, That nothing in this contract shall be construed as making final the decision of any administrative official, representative, or board on a question of law. 26. Work Hours Act of 1962—Overtime Compensation

This contract, to the extent that it is of a character specified in the Work Hours Act of 1962 (Public Law 87-581, 76 Stat. 357-360) and is not covered by the Walsh-Healey Public Contracts Act (41 U.S. 35-45), is subject to the following provisions and to all other provisions and exceptions of said Work Hours Act of 1962.

(a) No Contractor or subcontractor contracting for any part of the contract work shall require or permit any laborer or mechanic to be employed on such work in excess of eight hours in any calendar day or in excess of forty hours in any workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times his basic rate of pay for all hours worked in excess of eight hours in any calendar day or in excess of forty hours in such workweek, whichever is the greater number of overtime hours.

(b) In the event of any violation of the provisions of subparagraph (a), the Contractor and any subcontractor responsible for such violation shall be liable to any affected employee for his unpaid wages. In addition, such Contractor or subcontractor shall be liable to the United States for liquidated damages. Such liquidated damages shall be computed, with respect to each individual laborer or mechanic employed in violation of the provisions of subparagraph (a), in the sum of $10 for each calendar day on which such employee was required or permitted to work in excess of eight hours or in excess of forty hours in a workweek without payment of the required overtime wages.

(c) The Contracting Officer may demand payment from the Contractor, or cause to be withheld from any moneys payable on account of work performed by a subcontractor, the full amount of wages required by this contract and such sums as may administratively be determined to be necessary to satisfy any liabilities of such Contractor or subcontractor for liquidated damages as provided in subparagraph (b).

27. Convict Labor

In connection with the performance of work under this contract, the Contractor agrees not to employ any person undergoing sentence of imprisonment at hard labor.

28. Nondiscrimination in Employment-Equal Employment

During the performance of work under this contract, the Contractor agrees as follows:

(a) The Contractor will not discriminate against any employee or applicant for employment because of race, creed, color, or national origin. The Contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color, or national origin. Such action shall include, but not be limited to the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of com

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