SECTION G may agree upon at the time of each option exercise. The Government may exercise the option for the first successive period without obligation to exercise the option for the second period. The exercise in each case shall be by written notice signed by the Contracting Officer and furnished to the Contractor on or about 15 July of the year involved. GOVERNMENT FURNISHED PROPERTY (a) The Government-furnished property hereunder shall be all (b) Upon depletion of existing supplies of Government-owned The Contractor shall procure supplies for the merchandizing facili- best interests of the Government. (c) The Contractor's personnel shall be housed in Governmentowned quarters on Kwajalein Atoll. The assignment to quarters, barracks, bachelor officer quarters or family housing shall be COMPENSATION (a) The costs of performance of this contract, as referred to in paragraph (a) of the "Allowable Cost, Fixed Fee, and Payment," clause hereof, are hereby defined as the cost of labor, materials, and other items of the nature described in subparagraphs (1) through (9) below, incurred by the Contractor and which are claimed by the Contractor and accepted as such costs by the Comptroller of the Navy (Contract Audit Division), as chargeable in accordance with Part 2 of Section XV of the Armed Services Procurement Regulation revised 2 November 1959. (1) The cost of material including (I) the net cost after deducting all discounts, of material, foodstuffs and parts purchased directly for performance of this contract, whether or not such materials, foodstuffs and parts are purchased through commercial channels or through the Navy Supply System; (II) the cost of materials and parts withdrawn from the Contractor's Stores or stock; and (III) the cost of transporting material purchased by the Contractor for the performance of this con tract. (2) The salaries and wages of all personnel employed in the performance of this contract except those personnel permanently located in the Contractor's Corpus Christi, Texas and Honolulu, Hawaii Offices, but excluding corporate officers. The salary of any employee permanently assigned to said Corpus Christi, Texas or Honolulu, Hawaii Office except corporate officers of the contractor, shall be an allowable cost hereunder for such temporary period of time as he is assigned solely to the performance of this contract away from Corpus Christi, Texas or Honolulu, Hawaii including necessary travel time. Such temporary assignments shall be made for business purposes only in connection with the performance of this contract, and shall be made in the sole discretion of the Contractor. The salary scales and fringe benefits allowable as costs hereunder shall be those set forth in Exhibit C and/or D to the contract, however, employees assigned temporarily to the performance of this contract, the salary allowable as costs shall be that salary normally paid by the Contractor for the performance of such duties. In the event any individual employed under this contract is discharged because of inability to secure a security clearance from the United States Government, the salary and transportation of such individual during the time he was in the employ of the Contractor shall be an allowable cost hereunder. (3) The cost which the Government has agreed to assume under the clauses hereof entitled "Government Property" and "InsuranceLiability to Third Persons", including the cost of such extrahazardous insurance as may be approved by the Contracting Officer under the provisions of subparagraph (9) of this section. (4) Transportation and reasonable subsistence of personnel employed in the performance of this contract while in travel status. Transportation and subsistence costs of Corporate Officers of the Contractor while in travel status in connection with this contract. (5) Charges for the use of equipment, other than Government furnished equipment, utilized in the performance of the contract, provided, however that such charges shall not exceed the cost of the services accomplished by the use of such equipment if such services were procured commercially. (6) The cost of maintaining offices in Oakland, California and any other place or places as may be directed by the Contract Administrator, in connection with the performance of this con tract. (7) For those employees required to wear specialized clothing in the performance of their duties under this contract, the cost of providing each such employee with an initial outfit of three (3) sets. (8) The costs of physical examination for new employees where required by law to be paid by the employer. (9) Such other items, not excluded by other provisions of this contract or considered unallowable under Section XV, Part 2, of the Armed Services Procurement Regulation, as should, in the opinion of the Contracting Officer, be included in the cost of the work called for by this contract. Any such item allowed by the Contracting Officer shall be specifically certified by the Contracting Officer as being allowed under this subparagraph (9). (b) The parties to this contract have mutually agreed that the below listed costs shall be specifically unallowable under this contract; (1) Corpus Christi, Texas and Honolulu, Hawaii office expense. (2) Contributions, gifts and donations. (3) Premiums for insurance on the lives of any persons where the Contractor is the beneficiary directly or indirectly. (4) Cost of any action with respect to which the approval or authorization is expressly required by any provision of this contract, unless such action is subsequently ratified by the Contracting Officer. |