eration of a system of records on individuals that is to be operated by the contractor to accomplish an agency function, regardless of whether the system is the primary purpose of the contract.

PRIVACY ACT

(a) The contractor agrees: (1) To comply with the Privacy Act of 1974 (the Act) and the rules and regulations issued pursuant to the Act when performance under the contract involves the design, development, or operation of any system of records on individuals to be operated by the contractor in order to accomplish an agency function;

(2) To notify the Government when he anticipates operating a system of records in order to accomplish the requirements of this contract, if such system contains information about individuals which will be retrieved by the individual's name or other identifier assigned to the individual. A system of records subject to the Act may not be employed in the performance of this contract until the necessary approval and publication requirements applicable to the system have been carried out. The contractor agrees to correct, maintain, disseminate, and use such records in accordance with the requirements of the Act, and to comply with all applicable requirements of the Act;

(3) To include the Privacy Act Notification contained in this contract in every subcontract solicitation and in every subcontract when the performance of work under the proposed subcontract may involve the design, development, or operation of a system of records on individuals that is to be operated under the contract to accomplish an agency function; and

(4) To include this clause, including this paragraph, in all subcontracts under which work for this contract is performed or which is awarded pursuant to this contract when the performance of work under the subcontract may involve the design, development or operation of such a system of records.

(b) For the purposes of the Act, when the contract involves the operation of a system of records on individuals to accomplish an agency function, the contractor and any employee of the contractor is considered to be an employee of the agency, and the requirements of the Act, including the civil and criminal penalties for violation of the Act, are applicable except that the criminal penalties shall not apply with regard to contracts effective prior to September 27, 1975. In addition, failure to comply with the provisions of the Act or of this clause will make this contract subject to termination for default as provided for in the general provisions of this contract.

(c) The terms used in this clause have the following meanings: (1) "Operation of a system of records" means performance of

any of the activities associated with maintaining the system of records including the collection, use, and dissemination of records.

(2) "Record" means any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, his education, financial transactions, medical history, and criminal or employment history and that contains his name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a finger or voice print, or a photograph.

(3) "System of records" on individuals means a group of any records under the control of any agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual.

(End of clause)

§ 12-7.103-30 Clauses for solicitations and contracts for automatic data process

ing (ADP) equipment, software, maintenance services, and supplies.

Insert the clauses cited in FPR 17.103-30 as prescribed therein.

§ 12-7.103-31 Use of U.S. flag commercial vessels.

Insert the clause prescribed by FPR 1-19.108-2 under the conditions set forth therein.

§ 12-7.104 Additional clauses.

Insert the clause cited in FPR Subpart 1-7.104 if it is desired to cover the subject matter.

§ 12-7.104-1 Liquidated damages provisions.

Insert the provisions set forth in FPR 1-1.315-3 under the conditions prescribed in FPR 1-1.315.

§ 12-7.104-2 Changes to “make-or-buy” program.

Insert the clause set forth in FPR 13.902-3 in all contracts containing a "make or buy” program.

§ 12-7.104-50 Fast payment provisions.

In accordance with DOTPR 12-3.653 insert the following clause in all fast payment orders:

FAST PAYMENT PROCEDURE

(a) General. This is a fast payment order. Invoices will be paid on the basis of the

Contractor's delivery to a post office, common carrier, or, in shipment by other means, to the point of first receipt by the Government.

(b) Responsibility for supplies. Title to the supplies shall vest in the Government upon delivery to a post office or common carrier for shipment to the specific destination. If shipment is by means other than post office or common carrier, title to the supplies shall vest in the Government upon delivery to the point of first receipt by the Government. Notwithstanding any other provision of the purchase order, the contractor shall assume all responsibility and risk of loss for supplies (i) not received at destination, (ii) damaged in transit, or (iii) not conforming to purchase requirements. The Contractor shall either replace, repair, or correct such supplies promptly at his expense, Provided, Instructions to do so are furnished by the Contracting Officer within ninety (90) days from the date title to the supplies vests in the Government.

(c) Preparation of invoice. (1) Upon delivery of supplies to a post office, common carrier, or in shipments by other means, the point of first receipt by the Government, the Contractor shall prepare an invoice in accordance with the instructions in this order, except that invoices under a blanket purchase agreement shall be prepared in accordance with the provisions of the agreement. In shipments by either post office or common carriers, the Contractor shall either (A) cite on his invoice the date of shipment, name and address of carrier, bill of lading number or other shipment document number, or (B) attach copies of such documents to his invoice as evidence of shipment. In addition the invoice shall be prominently marked "Fast Pay." In case of delivery by other than post office or common carrier, a receipted copy of the Contractor's delivery document shall be attached to the invoice as evidence of delivery.

(2) If the purchase price excludes the cost of transportation, the contractor shall enter the prepaid shipping cost on the invoice as a separate item. The cost of parcel post insurance will not be paid by the Government. If transportation charges are separately stated on the invoice, the Contractor agrees to retain related paid freight bills or other transportation billings paid separately for a period of 3 years and to furnish such bills to the Government when requested for audit purposes.

(d) Certification of invoice. The contractor agrees that the submission of an invoice to the Government for payment is a certification that the supplies for which the Government is being billed have been shipped or delivered in accordance with shipping instructions issued by the ordering officer, in the quantities shown on the invoice, and that such supplies are in the quantity and

of the quality designated by the cited purchase order.

(End of provisions)

§ 12-7.150 Required DOTPR clauses.

The following clauses shall be inserted in all fixed price supply contracts exceeding $10,000, except where they are clearly inappropriate for use (e.g., contracts for subsistence supplies). Additional clauses may be used which are considered by each Administration to be essential to its operations.

§ 12-7.150-1 Gratuities.

GRATUITIES

(a) The Government may, by written notice to the Contractor, terminate the right of the Contractor to proceed under this contract if it is found, after notice and hearings, by the agency head or his duly authorized representative, that gratuities (in the form of entertainment, gifts, or otherwise) were offered or given by the Contractor, or any agent or representative of the Contractor, to any officer or employee of the Government with a view toward securing a contract or securing favorable treatment with respect to the awarding or amending, or the making of any determinations with respect to the performing of such contract; Provided, That the existence of the facts upon which the agency head or his duly authorized representative makes such findings shall be in issue and may be reviewed in any competent court.

(b) In the event this contract is terminated as provided in paragraph (a) hereof, the Government shall be entitled (i) to pursue the same remedies against the Contractor as it could pursue in the event of a breach of the contract by the Contractor, (ii) as a penalty in addition to any other damages to which it may be entitled by law, to exemplary damages in an amount (as determined by the agency head or his duly authorized representative) which shall be not less than three or more than ten times the cost incurred by the Contractor in providing any such gratuities to any such officer or employee.

(c) The rights and remedies of the Government provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or under this contract.

(End of clause)

§ 12-7.150-2 New materials.

NEW MATERIALS

Except as to any supplies or components which the contract specifically provides need not be new, all supplies and components to be provided under this contract shall be new (not used or reconditioned, and not of such age or so deteriorated as to impair their usefulness or safety), of current production, and of the most suitable grade for the purpose intended. If at any time during the performance of this contract the Contractor believes that the furnishing of supplies or components which are not new is necessary or desirable, he shall notify the Contracting Officer immediately, in writing, including the reasons therefor and proposing any consideration which will flow to the Government if authorization to use such supplies is granted.

(End of clause)

§ 12-7.150-3 Priorities, allocations, and allotments.

PRIORITIES, ALLOCATIONS, AND ALLOTMENTS

The Contractor shall follow the provisions of DMS Reg. 1 and all other applicable regulations and orders of the Business and Defense Services Administration in obtaining controlled materials and other products and materials required for the performance of this contract.

(End of clause)

§ 12-7.150-4 Interpretation or modification.

INTERPRETATION OR MODIFICATION

No oral statement of any person, and no written statement of anyone other than the Contracting Officer, or his authorized representative designated in accordance with section 12-1.402-50 of the DOT Procurement Regulations (41 CFR 12-1.402-50), acting within the limits of his authority specified in such designation, shall modify or otherwise affect any provision of the contract.

(End of clause)

§ 12-7.150-5 Notice of readiness for inspection.

NOTICE OF READINESS FOR INSPECTION

(a) If the contract provides for inspection at the Contractor's plant, the Contractor shall give the Contracting Officer at least 5 days' (unless a longer period is specified in the Schedule) written or telegraphic notice

of readiness for inspection in cases where no security clearance is required for the Government Inspector. In cases where security clearance is required for the Government Inspector to obtain access to the Contractor's plant, the Contractor shall so advise the Contracting Officer and give at least 8 days' notice of readiness for inspection.

(b) In those cases where a Government Inspector is assigned to the plant for the purpose of conducting continuous inspections of production on the contract, and he is otherwise kept informed of the progress of production, the written notices specified in (a) above need not be given.

(End of clause)

§ 12-7.150-6 Definition of delivery terms. DEFINITION OF DELIVERY TERMS

The meaning of delivery terms used in this contract such as "f.o.b. origin”, “f.o.b. destination", "f.a.s. vessel, port of shipment", and other delivery terms shall be as those terms are defined in subpart 1-19.3 of the Federal Procurement Regulations (41 CFR 1-19.3).

(End of clause)

§ 12-7.150-7 Evidence of delivery.

EVIDENCE OF DELIVERY

When the contract delivery point is "f.o.b. origin", evidence of delivery shall be submitted with invoices. In the case of freight or express shipment, this evidence shall be in the form of memorandum copies of Bills of Lading duly receipted by the carrier. In the case of parcel post shipments this evidence shall be by Post Office Certificate of Mailing, Form 3817. If the invoice submitted for payment is not accompanied by evidence of delivery, discounts for prompt payment will be computed from date of receipt of such evidence of delivery, when the contract delivery point is other than “f.o.b. origin", evidence of delivery will be obtained from the consignee.

lesser amount in the schedule if circumstances warrant.

WITHHOLDING PAYMENT FOR NONDELIVERY OF DATA

(a) If technical data such as plans, drawings, reports, spare parts lists, repair parts lists, or the like, or instruction books (including manuscript or printer's copy), or any part thereof, are not delivered within the time specified by this contract or are deficient upon delivery, the Contracting Officer shall, at his discretion, withhold from each invoice a percentage of the contract price in accordance with the following table: When total contract price is:

Percentage to be withheld

is

10

next higher tier subcontractor, or the prime contractor, as the case may be, of all relevant information with respect thereto.

(End of clause)

§ 12-7.150-10 Dissemination of contract information.

DISSEMINATION OF CONTRACT INFORMATION

The Contractor shall not publish, permit to be published, or distribute for public consumption, any information, oral or written, concerning the results or conclusions made pursuant to performance of this contract, without prior written consent of the Contracting Officer. (Two copies of any material proposed to be published or distributed shall be submitted to the Contracting Officer.)

Less than $250,000. $250,000 to $1,000,000.

Over $1,000,000.

052

(b) The withholding of any sums pursuant to this clause shall not be construed as, or constitute in any manner, a waiver by the Government of the Contractor's obligation to furnish the data required under this contract. In the event the Contractor fails to furnish these items, the Government shall have those rights and remedies provided by law and pursuant to this contract in addition to, and not in lieu of the sums withheld in accordance with this clause.

(End of clause)

§ 12-7.150-9 Notice of delays.

NOTICE OF DELAYS

(a) Whenever the Contractor encounters any difficulty which is delaying or threatens to delay the timely performance of this contract (including actual or potential labor disputes), the Contractor shall immediately give notice thereof in writing to the Contracting Officer, stating all relevant information with respect thereto. Such notice shall not in any way constitute a basis for an extension of the delivery schedule or be construed as a waiver by the Government of any rights or remedies to which it is entitled by law or pursuant to provisions of this contract. Failure to give such notice, however, may be grounds for denial of any request for an extension of the delivery schedule because of such delay.

(b) The Contractor agrees to insert the substance of this clause, including this paragraph (b), in any subcontract hereunder; except that each such subcontract shall provide that in the event its timely performance is delayed or threatened by delay, the subcontractor shall immediately notify his

(End of clause)

§ 12-7.150-11 Authorization and consent. Insert the following clause under the conditions prescribed in DOTPR 129.151-1.

AUTHORIZATION AND CONSENT

The Government hereby gives its authorization and consent (without prejudice to any rights of indemnification) for all use and manufacture, in the performance of this contract or any part hereof or any amendment hereto or any subcontract hereunder (including any lower tier subcontract) of any invention described in and covered by a patent of the United States (i) embodied in the structure or composition of any article the delivery of which is accepted by the Government under this contract, or (ii) utilized in the machinery, tools, or methods the use of which necessarily results from compliance by the Contractor or the using subcontractor with (a) specifications or written provisions now or hereafter forming a part of this contract, or (b) specific written instructions given by the Contracting Officer directing the manner of performance. The entire liability to the Government for infringement of a patent of the United States shall be determined solely by the provisions of the indemnity clauses, if any, included in this contract or any subcontract hereunder (including any lower tier subcontract), and the Government assumes liability for all other infringement to the extent of the authorization and consent hereinabove granted.

(End of clause)

§ 12-7.150-12 Background patents (license).

Insert the following clause under the conditions prescribed in DOTPR 129.150.

BACKGROUND PATENTS (LICENSE)

(a) "Product" as used herein means a process, machine article of manufacture, or composition of matter the same as, or substantially the same as, that worked on under the contract.

(b) "Background patent" as used herein means any United States patent, under which the Contractor has the right to license others, and which covers the manufacture, use, or sale of any product.

(c) When the Secretary determines: (1) That a product is required by members of the public in the interest of the public health, safety, or welfare; and, (2) That neither the Contractor, nor any other person deriving rights from his patents, has produced the product at a reasonable price, in sufficient quantity, and at a level of quality to meet public needs;

the Contractor shall, on written application, issue appropriate licenses to others under any Background Patent on reasonable terms, such licenses to be restricted to the production, sale, and use of the product.

(d) When the Secretary has made the determination set forth in (c) above, the Contractor (or those deriving rights from the Contractor) shall not seek injunctive relief to enforce a Background Patent without:

(1) Previously advising the General Counsel, Office of the Secretary, Department of Transportation;

(2) Granting the Government the right to intervene in the injunction proceeding; and (3) Disclosing the commitment set out in this clause to the court from which the injunction is sought.

(End of clause)

§ 12-7.151 DOTPR clauses to be used when applicable.

The following clauses shall be included in the contract when their use is appropriate.

§ 12-7.151-1 Patent indemnity.

In accordance with DOTPR 129.152-1 and DOTPR 12-9.152-3, insert the following clause or clauses under the conditions prescribed therein.

(a) Patent indemnity. If the amount of this contract is in excess of $10,000, 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 for issue by order of the Government) arising out of the manufacture or delivery of supplies or out of construction, alteration, modification, or repair of real property (hereinafter referred to as "construction work") under this contract, or out of the use or disposal by or for the account of the Government of such supplies or construction work. The foregoing indemnity shall not apply unless the Contractor shall have been informed as soon as practicable by the Government of the suit or action alleging such infringement, and shall have been 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 to: (i) an infringement resulting from compliance with specific written instructions of the Contracting Officer directing a change in the supplies to be delivered or in the materials or equipment to be used, or directing a manner of performance of the contract not normally used by the Contractor; (ii) an infringement resulting from addition to, or change in, such supplies or components furnished or construction work performed which addition or change was made subsequent to delivery or performance by the Contractor; or (iii) a claimed infringement which is settled without the consent of the Contractor, unless required by final decree of a court of competent jurisdiction.

(End of clause)

(b) Waiver of indemnity. Any provision of this contract to the contrary notwithstanding, the Government hereby authorizes and consents to use and manufacture, solely in the performance of this contract, of any invention covered by the United States patents identified and listed below, and waives indemnification by the Contractor with respect to such patents: (Identify the patents by number or by other means if more appropriate).

(End of clause)

§ 12-7.151-2 Filing of patent applications. Insert the following clause under the conditions prescribed in DOTPR 129.154.

FILING OF PATENT APPLICATIONS

(a) Before filing or causing to be filed a patent application in the United States disclosing any subject matter of this contract, which subject matter is classified "Secret"

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