GOVERNMENT FROPERTY

this contract. The Contractor shall take all reasonable steps to comply with all appropriate directions or instructions which the Contracting Officer may prescribe as reasonably necessary for the protection of Government property.

(g) Risk of Loss. (1) The Contractor shall not be liable for any loss cf or dama ge to the Government property, or for expenses incidental to such loss or damage, except that the Contractor shall be responsible for any such loss or damage (including expenses incidental theretc):

(i) which results from willful misconduct or lack of good faith on the part of any one of the Contractor's di rectors or officers, or on the part of any of his managers, superintendents, or other equivalent representatives, who has supervision or direction of (A) all or substantially all of the Contractor's

business; or

(B) all or substantially all of the Contractor's cperations at any one plant or separate location, which this contract is being performed; or

(C)

a separate and cсmplete major industrial cperation in connection with the performance of this contract;

(ii) which results from a failure on the part of the Contractor, due to the willful misconduct or lack of good faith on the part of any of his directors, officers, or other representatives mentioned in subparagraph (i) above

(A) to maintain and administer, in accordance with scund industrial practice, the program for utilization, maintenance, repair, protection and preservation of Government property as required by paragraph (f) hereof, cr

(B) to establish, maintain and administer, in accordance with (d) above, a system for control of Government property;

(iii) for which the Contractor is otherwise responsible under the express terms of the clause or clauses designated in the Schedule;

(iv) which results from a risk expressly required to be insured under this contract, but only to the extent of the insurance So required to te procured and maintained, or to the extent of insurance actually procured and maintained, whichever is greater; or

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(v) which results from covered by insurance or for ctherwise reimbursed, but insurance or reimbursement.

a risk which is in fact which the Contractor is only to the extent of such

Any failure of the Contractor to act, as provided in subparagraph (ii) above, shall be conclusively presumed to be a failure from willful misconduct, or lack of good faith on the part of such directors, officers, or cther representatives mentioned in subparagraph (i) above, if the Contractor is notified by the Contracting cfficer by registered or certified mail addressed to cne of such directors, officers, or other representatives, of the Government's disapproval, withdrawal of of approval, or nonacceptance of the Contractor's program or system. In such event it shall te presumed that any loss or damage to Government property resulted from such failure. The Contractor shall be liable for such loss or damage unless he can establish by clear and convincing evidence that such lcss or damage did not result from his failure to maintain an approved program or system, or occurred during such time as an approved program or system for control of Government property was maintained.

If more than one of the above exceptions shall be applicable in any case, the Contractor's liability under any one exception shall not be limited by any other exception. If the Contractor transfers Government property to the possession and control of a subcontractor, the transfer shall not affect the liability of the Contractor for loss or destruction of or damage to the property as set forth above. However, the Contractor shall require the subcontractor to assume the risk of, and be responsible for, any loss or destruction of or damage to the property while in the latter's possession or control, except to the extent that the subcontract, with the prior approval of the Contracting Officer, provides for the relief of the subcontractor from such liability. In the absence of such approval, the subcontract shall contain appropriate provisions requiring the return of all Government property in as good condition as when received, except for reasonable wear and tear or for the utilization of the property in accordance with the provisions of the prime contract.

(2) The Contractor shall not be reimbursed for, and shall not include as an item of overhead, the cost of insurance, or any provision for a reserve, covering the risk of loss of or damage to the Government property,

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GOVERNMENT PROPERTY

Except

Government may have insurance under

to the extent that the required the Contractor to carry such any other provisions of this contract.

(3) Upon the happening of loss or destruction of or camage to the Government property, the Contractor shall notify the Contracting Officer thereof, and shall communicate with the Loss and Salvage Organization, if any, now or hereafter designated by the Contracting Cfficer, and with the assistance of the Loss and Salvage Organization So designated (unless the Contracting Officer has designated that no such crganization be employed), shall take all reasonable steps to protect the Government property from further ċamage, separate the damaged and undamaged Government property, put all the Government property in the best Fossible crder, and furnish to the Contracting Officer a statement of

(i) the lost, destroyed and damaged Government property;

(ii) the time and origin of the loss, destruction or camage;

(iii) all known interests in commingled property of which the Government property is a part; and

(iv) the insurance, if any, covering any part of or interest in such commingled property. The Contractor shall make repairs and renovations of the damaged Government property or take such other action, as Contracting Officer directs.

the

(4) In the event the Contractor is indemnified, reimbursed, or otherwise compensated for any loss or destruction of or damage to the Government property, he shall use the proceeds to repair, renovate or replace the Government property involved, or shall credit such proceeds against the cost of the work covered by the contract, or shall otherwise reimburse the Government, as directed by the Contracting Officer. The Contractor shall do nothing to prejudice the Government's right to recover against third parties for any such loss, destruction, or damage and, upon the request of the Contracting Officer, shall, at the Government's expense, furnish to the Government all reasonable assistance and cooperation (including the prosecution cf suit and the execution of instruments of assignment in favor of the Government) in obtaining recovery. In addition, where the subcontractor has not been relieved from liability for any loss or destruction of or damage to Government property, the Contractor shall enforce the liability of the subcontractor for such loss or

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destruction of or damage to the Government property for the benefit of the Government.

*(5) If this contract is for the development, production, modification, maintenance, or overhaul of aircraft, or otherwise involves the furnishing of aircraft by the Government, the clause of this contract entitled "Flight Risks" shall control, to the extent it is applicable, in the case of loss or destruction of, or damage to, aircraft. (*This subparagraph may be cmitted where it is clearly inapplicable.)

(h) Access. The Government, and any persons designated by it, shall at all reasonable times have access to the premises where any of the Government property is located for the purpose of inspecting the Government property.

(i) Final Accounting and Disposition of Government Froperty. Upon the completion of this contract, or at such earlier dates as may be fixed by the Contracting Cfficer, the Contractor shall submit to the Contracting Cfficer in a form acceptable to hir, inventory schedules covering all items of the Government property not consumed in the performance of this contract, or not theretofore delivered to the Government, and shall deliver or make such other disposal of such Government property as may be directed or authorized by the Contracting officer. The net proceeds of any such disposal shall be credited to the cost of the work covered by the contract or shall be paid in such manner as the Contracting Officer may direct. The foregoing provisions shall apply to scrap from Government property; provided however, that the Contracting Cfficer may authorize or direct the Contractor to omit from such inventory schedules any scrap consisting of faulty castings or forgings, or cutting and processing waste, such as chips, cuttings, borings, turnings, short ends, circles, trimmings, clippings, and rem, and to dispose of such scrap in accordance with the Contractor's normal practice and account there for as a part of general overhead or other reimbursable cost in accordance with the Contractor's established accounting procedures.

(j) Restoration of Contractor's Premises and Abandonment. Unless otherwise provided herein, the

Government:

(i) may abandon any Government property in place, and thereupon all obligations of the Government regarding such abandoned property shall cease; and

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GOVERNMENT PROPERTY

(ii) has no obligation to the Contractor with regard to restoration or rehabilitation of the Contractor's Fremises, neither in case of abandonment (paragraph (j) (i) above), disposition on completion of need or of the contract (paragraph (i) above), not otherwise, except for restoration or rehabilitation costs caused by removal of Government property pursuant to paragraph (b) above.

(k) Communications.

All communications issued

pursuant to this clause shall be in writing.

AS provided in paragraph (i) of the above clause, the contracting officer may authorize or approve use of the contractor's established scrap disposal and accounting procedures whenever the amount and recoverable value of scrap from Government property are relatively minor and the ccntractor's established procedures for accumulating and disposing of scrap and crediting the proceeds thereof to general overhead or cther general cost will permit the Government to share equitably in such scrap recovery through a reduction of over head other cost factor affecting reimbursement under the contract.

or

13.704 Special Tooling Clause for Fixed-Price Contracts. The following clause shall be used in negotiated fixed-price contracts for supplies or services under which the Government is to acquire full rights in special tooling other than as a line item (see 13.304-2).

SPECIAL TOOLING (OCTOBER 1977)

(a) Definition.

(1) The term "special tooling" means all jigs, dies, fixtures, molds, patterns, taps, gauges, other equipment and manufacturing aids, and replacements thereof, which are of such a specialized nature that, without substantial modification cr alteration, their use is limited to the development or production of particular supplies or farts thereof, or the performance of particular services. The term includes all components of such items, but dces not include: (i) consumable property;

structures (except

(ii) special test equipment; or (iii) buildings, nonseverable foundations and similar improvements necessary for the installation of special tooling), general or special machine tools, or similar capital items.

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