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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 (1) 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cost of materials and parts withdrawn from the Contractor's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 (111) the cost of transporting material
purchased by the Contractor for the performance of this con
(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.
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 perform
ance of this contract away from Corpus Christi, Texas or
Honolulu, Hawaii including necessary travel time.
porary 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.
scales and fringe benefits allowable as costs hereunder shall
be those set forth in Exhibit C and/or D to the contract, how
ever, 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
In the event any individual employed under this contract
is discharged because of inability to secure a security clear
ance from the United States Government, the salary and trans
portation 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 "Insurance
Liability to Third Persons", including the cost of such extra
hazardous 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
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 con
tract, 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
(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
(1) Corpus Christi, Texas and Honolulu, Hawaii office
(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
contractor fails to secure prior or advance
approval or authorization is expressly required
by any provision of this contract, unless such action
is subsequently ratified by the Contracting Officer.
SECTION I - OPERATION OF MERCHANDISING FACILITIES
(a) Merchandising facilities are defined as those facilities
selling consumer-type merchandise and foodstuffs or providing per
sonal services to civilian and government personnel such as
barber and beautician services, short-order and restaurant type
meals (excluding regular messing facilities), laundry and dry
cleaning services and club or bar facilities.
(b) The costs which the Contractor shall recover in the price
charged in the merchandising facilities shall be all costs
except those provided in Paragraph 035851 NAVCOMP Manual as
allowable charges to appropriated funds.
(c) Cash derived from the operation of the merchandising
facilities shall be credited against amounts otherwise due
the Contractor under this Contract.
(a) Upon completion of this contract, or upon termination of
the contractor's operation of the merchandising facilities,
overall profits accruing, if any, from these operations of such
facilities shall be credited to the Government and losses, if
any, will be absorbed by the Government.
SECTION L - GENERAL PURPOSE EQUIPMENT
The Contractor shall not acquire any general purpose equipment,
the acquisition of which is to be charged directly to the per
formance of this contract unless prior written approval to do
so is obtained from the Contract Administrator.
(a) The term "Secretary" means the Secretary, the Under Secretary, 728 or any Assistant Secretary of the Department, and the head or any
assistant head of the Federal agency; and the term "his duly author
ized representative" means any person or persons or board (other
than the Contracting Officer) authorized to act for the Secretary.
(b) The term "Contracting Officer" means the person executing
this contract on behalf of the Government, and any other officer
or civilian employee who is a properly designated Contracting
Officer; and the term includes, except as otherwise provided in
this contract, the authorized representative of a Contracting
officer acting within the limits of his authority.
(c) Except as otherwise provided in this contract, the term
"sub-contracts" includes purchase orders under this contract
except purchase orders for the procurement of materials and
(a) As used throughout this contract, the term "Department"
means the Department of the Navy.