1.—DEFINITIONS 2-CHANGES GENERAL PROVISIONS (Department of Defense Cost-Reimbursement Supply Contract) INDEX OF CLAUSES As used throughout this contract, the following terms shall have (a) The term "Secretary" means the Secretary, the Under Secre- (b) The term "Contracting Omcer" means the person executing (c) Except as otherwise provided in this contract, the term 2. CHANGES The Contracting Officer may at any time, by a written order, and DD FORM 748 (NAVY) 1 JUL 58 the amount of any fixed fee to be paid to the Contractor, and 3. LIMITATION OF COST (a) It is estimated that the total cost to the Government, exclu- (b) The Government shall not be obligated to reimburse the 4. ALLOWABLE COST, FIXED FEE, AND PAYMENT (a) For the performance of this contract, the Government shall (1) the cost thereof (hereinafter referred to as "allowable (A) Part 2 of Section XV of the Armed Services Procure- (B) the terms of this contract; and (11) such fixed fee, if any, as may be provided for in the (b) Once each month (or at more frequent intervals, if approved (e) (1) Promptly after receipt of each invoice or voucher and statement of cost, the Government shall, except as otherwise provided in this contract, and subject to the provisions of paragraph (d) below, make payment thereon, to the extent of 80% thereof, as approved by the Contract-Audit Division of the Comptroller of the Navy. The cumulative amount of such invoices or vouchers from time to time approved but not paid pursuant to the foregoing provisions (regardless of whether they are paid under the next sentence hereof) shall constitute a gross withheld payments amount. Upon acceptance and delivery of articles identified in the Schedule of this contract as the principal end item being procured under this contract, the Government shall pay to the an amount which. Contractor when added to any amounts previously paid under this sentence, shall be the same percentage of the gross withheld payments amount as the cumulative number of articles accepted and delivered under this identified principal end item is of the total number of articles called for by such item. (2) Payment of the fixed fee, if any, shall be made to the Provided, howContractor as specified in the Schedule ever. That after payment of eighty-five percent (85%) of the fixed fee set forth in the Schedule, further payment on account of the fixed fee shall be withheld until a reserve of either fifteen percent (15%) of the total fixed fee, or one hundred thousand dollars ($100,000). whichever is less, shall have been set aside. (d) At any time or times prior to final payment under this contract the Contract-Audit Division of the Comptroller of the Navy may have the invoices or vouchers and statements of cost audited. Each payment theretofore made shall be subject to reduction for amounts included in the related invoice or voucher which are found by the Contract-Audit Division of the Comptroller of the Navy, on the basis of such audit, not to constitute allowable cost. Any payment may be reduced for overpayments, or increased for underpayments, on preceding invoices or vouchers (e) On receipt and approval of the invoice or voucher designated by the Contractor as the "completion invoice" or "completion voucher" and upon compliance by the Contractor with all The provisions of this contract (including, without limitation, the ovisions relating to patents and the provisions of (f) below); .he Government shall promptly pay to the Contractor any balance of allowable cost. and any part of the fixed fee, which has been withheld pursuant to (c) above or otherwise not paid to the Contractor The completion invoice or voucher shall be submitted by the Contractor promptly following completion of the work under this contract but in no event later than one (1) year (or such longer period as the Contracting Officer may in his discretion approve in writing) from the date of such completion. (f) The Contractor agrees that any refunds, rebates. credits, or other amounts (including any interest thereon) accruing to or received by the Contractor or any assignee under this contract shall be paid by the Contractor to the Government, to the extent that they are properly allocable to costs for which the Contractor has been reimbursed by the Government, under this contract. Reasonable expenses incurred by the Contractor for the purpose of securing such refunds. rebates, credits, or other amounts shall be allowable costs hereunder when approved by the Contracting Officer. Prior to final payment under this contract, the Contractor and each assignee under this contract whose assignment is in effect at the time of final payment under this contract shall execute and deliver (1) an assignment to the Government, in form and substance satisfactory to the Contracting Officer, of refunds, rebates, credits, or other amounts (including any interest thereon) properly allocable to costs for which the Contractor has been reimbursed by the Government under this contract: and (11) a release discharging the Government, its officers, agents. and employees from all liabilities, obligations, and claims arising out of or under this contract, subject only to the following exceptions (A) specified claims in stated amounts or in estimated amounts where the amounts are not susceptible of exact statement by the Contractor: (B) claims, together with reasonable expenses incidental thereto, based upon liabilities of the Contractor to third parties arising out of the performance of this contract Provided, That such claims are not known to the Contractor on the date of the execution of the release; And provided further. That the Contractor gives notice of such claims in writing to the Contracting Officer not more than six (6) years after the date of the release or the date of any notice to the Contractor that the Government is prepared to make final payment, whichever is earlier, and (C) claims for reimbursement of costs (other than expenses of the Contractor by reason of its indemnifcation of the Government against patent liability). including reasonable expenses incidental thereto, incurred by the Contractor under the provisions of thir contract relating to patents. (g) Any cost incurred by the Contractor under the terms of this contract which would constitute allowable cost under the provisions of this claure shall be included in determining the amount payable under this contract, notwithstanding any provi sions contained in the specifications or other documents incorporated in this contract by reference, designating services to be performed or materials to be furnished by the Contractor at its expense or without cost to the Government. 5. INSPECTION OF SUPPLIES AND CORRECTION OF DEFECTS (a) All supplies (which term throughout this clause includes without limitation raw materials, components, intermediate assemblies, and end products) shall be subject to inspection and test by the Government, to the extent practicable at all times and places including the period of manufacture, and in any event prior to acceptance. The Contractor shall provide and maintain an inspection system acceptable to the Government covering the The supplies, fabricating methods, and special tooling hereunder Government, through any authorized representative. may inspect the plant or plants of the Contractor or of any of its subcontractors If any inspection engaged in the performance of this contract. or test is made by the Government on the premises of the Contractor or a subcontractor, the Contractor shall provide and shall require subcontractors to provide all reasonable facilities and of the Government assistance for the safety and convenience All inspections inspectors in the performance of their duties. and tests by the Government shall be performed in such a manner Except as otherwise provided as will not unduly delay the work. in this contract, acceptance of any supplies or lots of supplies shall be made as promptly as practicable after delivery thereof and shall be deemed to have been made no later than sixty (60) days after the date of such delivery, if acceptance has not been made earlier within such period. Such (b) At any time during performance of this contract, but not later than six (6) months (or such other period as may be provided in the Schedule) after acceptance of the supplies or lots of accordance with the requirements of supplies last delivered in this contract, the Government may require the Contractor to directed by the Conremedy by correction or replacement, as tracting Officer, any supplies or lots of supplies which at the time of delivery thereof are defective in material or workmanship or otherwise not in conformity with the requirements of this contract. Except as otherwise provided in paragraph (c) hereof. the cost of any such replacement or correction shall be included in Allowable Cost determined as provided in the clause of this contract entitled "Allowable Cost. Fixed Fee and Payment," but no additional fee shall be payable with respect thereto. supplies or lots of supplies shall not be tendered thereafter for acceptance unless the former tender and the requirement of correction is disclosed If the Contractor fails to proceed with reasonable promptness to replace or correct such supplies or lots of supplies, the Government (1) may by contract or otherwise replace or correct such supplies and charge to the Contractor any Increased cost occasioned the Government thereby, or may reduce any fixed fee payable under this contract (or require repayment of any fixed fee theretofore paid) in such amount as may be equitable under the circumstances, or (ii) in the case of supplies not delivered, may require the delivery of such supplies. and shall have the right to reduce any fixed fee payable under this contract (or to require repayment of any fixed fee theretofore paid) in such amount as may be equitable under the circumstances, or 111 may terminate this contract for default as provided in the clau of this contract entitled "Termination." Failure to agree * the amount of any such increased cost to be charged to the ntractor or to such reduction in, or repayment of, the fixed e shall be a dispute concerning a question of fact within the meaning of the clause of this contract entitled "Disputes." (c) Notwithstanding the provisions of paragraph (b) hereof, the Government may at any time require the correction or replacement by the Contractor, without cost to the Government, of supplies or lots of supplies which are defective in material or workmanship, or otherwise not in conformity with the requirements of this contract, if such defects or failures are due to fraud, lack of good faith or willful misconduct on the part of any of the Contractor's directors or officers, or on the part of any of its managers, superintendents, or other equivalent representatives, who have supervision or direction of (1) all or substantially all of the Contractor's business, or (1) all or substantially all of the Contractor's operations at any one plant or separate location in which this contract is being performed, or (1) a separate and complete major industrial operation in connection with the performance of this contract. Fraud, lack of good faith or willful misconduct on the part of any of such supervisory personnel shall be deemed to include the selection of individual employees or the retention of employees after any of such supervisory personnel has reason to believe that such employees are habitually careless or otherwise unqualified. (d) Corrected supplies or replaced supplies shall be subject to the provisions of this clause in the same manner and to the same extent as supplies originally delivered under this contract. (e) The Contractor shall make its records of all inspection work available to the Government during the performance of this contract and for such longer period as may be specified in this contract. (f) Except as provided in this clause and as may be provided in the Schedule, the Contractor shall have no obligation or liability to correct or replace supplies or lots of supplies which at the time of delivery are defective in material or workmanship or herwise not in conformity with the requirements of this contract (g) Except as otherwise provided in the Schedule, the Contractor's obligation to correct or replace Government-furnished property (which is property in the possession of or acquired directly by the Government and delivered or otherwise made available to the Contractor) shall be governed by the provisions of the clause of this contract entitled "Government Property." 6. ASSIGNMENT OF CLAIMS (a) Pursuant to the provisions of the Assignment of Claims Act of 1940, as amended (31 U. S. Code 203, 41 U. S. Code 15), if this contract provides for payments aggregating $1,000 or more, claims for monies due or to become due the Contractor from the Government under this contract may be assigned to 8 bank, trust company, or other financing institution, including any Federal lending agency, and may thereafter be further assigned and reassigned to any such institution. Any such assignment or reassignment shall cover all amounts payable under this contract and not already paid, and shall not be made to more than one party, except that any such assignment or reassignment may be made to one party as agent or trustee for two or more parties participating in such financing. Notwithstanding any provisions of this contract. payments to an assignee of any monies due or to become due under this contract shall not to the extent provided in said Act, as amended, be subject to reduction or set-off. (b) In no event shall copies of this contract or of any plans, specifications, or other similar documents relating to work under this contract, if marked "Top Secret," "Secret," or "Confidential," be furnished to any assignee of any claim arising under this contract or to any other person not entitled to receive the same: Provided, That a copy of any part or all of this contract so marked may be furnished, or any information contained therein may be disclosed, to such assignee upon the prior written authorization of the Contracting Officer. RECORDS (a) (1) The Contractor agrees to maintain books, records, documents and other evidence pertaining to the costs and expenses of this contract (hereinafter collectively called the "records") to the extent and in such detail as will properly reflect all net costs, direct and indirect, of labor, materials, equipment, supplies and services, and other costs and expenses of whatever nature for which reimbursement is claimed under the provisions of this contract. The Contractor's accounting procedures and practices shall be subject to the approval of the Contract-Audit Division of the Comptroller of the Navy: Provided, however, That no material change will be required to be made in the Contractor's accounting procedures and practices if they conform to generally accepted accounting practices and if the costs properly applicable to this contract are readily ascertainable therefrom. (2) The Contractor agrees to make available at the office of the Contractor at all reasonable times during the period set forth in subparagraph (4) below any of the records for inspection, audit or reproduction by any authorized representative of the Department or of the Comptroller General. (3) In the event the Comptroller General or any of his duly authorized representatives determines that his audit of the amounts reimbursed under this contract as transportation charges will be made at a place other than the office of the Contractor, the Contractor agrees to deliver, with the reimbursement voucher covering such charges or as may be otherwise specified within two years after reimbursement of charges covered by any such voucher, to such representative as may be designated for that purpose through the Contract-Audit Division of the Comptroller of the Navy such documentary evidence in support of transportation costs as may be required by the Comptroller General or any of his duly authorized representatives. (4) Except for documentary evidence delivered to the Government pursuant to subparagraph (3) above, the Contractor shall preserve and make available its records for a period of six years (unless a longer period of time is provided by applicable statute) from the date of the voucher or invoice submitted by the Contractor after the completion of the work under the contract and Contractor designated by the 85 the "completion voucher" or "completion invoice" or, in the event this contract has been completely terminated, from the date of the termination settlement agreement: Provided, however, That records which relate to (A) appeals under the clause of this contract entitled "Disputes." (B) litigation or the settlement of claims arising out of the performance of this contract, or (C) costs or expenses of the contract as to which exception has been taken by the Comptroller General or any of his duly authorized representatives, shall be retained by the Contractor until such appeals, litigation, claims, or exceptions have been disposed of, but in no event for less than the six-year period mentioned above. (5) Except for documentary evidence delivered pursuant to subparagraph (3) above, and the records described In the proviso of subparagraph (4) above, the Contractor may in fulfillment of its obligation to retain its records as required by this clause substitute photographs, microphotographs or other authentic reproductions of such records, after the expiration of two years following the last day of the month of reimbursement to the Contractor of the invoice or voucher to which such records relate, unless a shorter period is authorized by the Contracting Officer with the concurrence of the Comptroller General or his duly authorized representative. (6) The provisions of this paragraph (a), including this subparagraph (6), shall be applicable to and included in each subcontract hereunder which is on a cost, cost-plus-a-fixed-fee, time-and-material or labor-hour basis. (b) The Contractor further agrees to include in each of his subcontracts hereunder, other than those set forth in subparagraph (a) (6) above, a provision to the effect that the subcontractor agrees that the Comptroller General or the Department, or any of their duly authorized representatives, shall, until the expiration of three years after final payment under the subcontract, have access to and the right to examine any directly pertinent books. documents, papers, and records of such subcontractor involving transactions related to the subcontract. The term "subontract," as used in this paragraph (0) only, excludes (1) rchase orders not exceeding $1,000 and (1) subcontracts or purchase orders for public utility services at rates established for uniform applicability to the general public. 8. SUBCONTRACTS (a) The Contractor shall give advance notification to the Contracting Officer of any proposed subcontract hereunder which (1) is on a cost or cost-plus-a-fixed-fee basis, or (ii) is on a fixedprice basis exceeding in dollar amount either $25,000 or five percent (5%) of the total estimated cost of this contract (b) The Contractor shall not, without the prior written consent of the Contracting Officer, place any subcontract which (1) is on a cost or cost-plus-a-fixed-fee basis, or (11) is on a fixedprice basis exceeding in dollar amount either $25,000 or five percent (5%) of the total estimated cost of this contract, or (ii) provides for the fabrication, purchase, rental, installation or other acquisition of any item of industrial facilities, or of special tooling having a value in excess of $1,000, or (iv) is on a time-and-material or labor-hour basis The Contracting Officer may. in his discretion, ratify in writing any such subcontract, such action shall constitute the consent of the Contracting Officer as required by this paragraph (b) (c) The Contractor agrees that no subcontract placed under this contract shall provide for payment on a cost-plus-a-percentage-ofcost basis (d) The Contracting Officer may. in his discretion, specifically approve in writing any of the provisions of a subcontract. However. such approval or the consent of the Contracting Officer obtained as required by this clause shall not be construed to constitute a determination of the allowability of any cost under this contract, unless such approval specifically provides that it constitutes a determination of the allowability of such cost. (e) The Contractor shall give the Contracting Officer immediate tice in writing of any action or suit filed. and prompt notice any claim made against the Contractor by any subcontractor or vendor which, in the opinion of the Contractor, may result in litigation, related in any way to this contract with respect to which the Contractor may be entitled to reimbursement from the Government. 9. UTILIZATION OF SMALL BUSINESS CONCERNS (a) It is the policy of the Government as declared by the Congress that a fair proportion of the purchases and contracts for supplies and services for the Government be placed with small business concerns. (b) The Contractor agrees to accomplish the maximum amount of subcontracting to small business concerns that the Contractor finds to be consistent with the efficient performance of this contract. 10. TERMINATION (a) The performance of work under the contract may be terminated by the Government in accordance with this clause in whole, or from time to time in part. (1) whenever the Contractor shall default in performance of this contract in accordance with its terms (including in the term "default" any such failure by the Contractor to make progress in the prosecution of the work hereunder as endangers such performance), and shall fail to cure such default within a period of ten days (or such longer periods as the Contracting Officer may allow) after receipt from the Contracting Officer of a notice specifying the default, or (2) whenever for any reason the Contracting Officer shall determine that such termination is in the best interests of the Government. Any such termination shall be effected by delivery to the Contractor of a Notice of Termination specifying whether termination is for the default of the Contractor or for the convenience of the Gov. "nment, the extent to which performance of work under the ontract is terminated, and the date upon which such termination becomes effective. If, after notice of termination of this contract for default under (1) above, it is determined that the Cotractor's failure to perform or to make progress in performance is due to causes beyond the control and without the fault or negligence of the Contractor pursuant to the provisions of the clause of this contract relating to excusable delays, the Notice of Termination shall be deemed to have been issued under (2) above, and the rights and obligations of the parties hereto shall in such event be governed accordingly. (b) After receipt of a Notice of Termination and except as otherwise directed by the Contracting Officer, the Contractor shall (1) stop work under the contract on the date and to the exent speciñed in the Notice of Termination; (2) place no further orders or subcontracts for materials, services, or facilities except as may be necessary for completion of such portion of the work under the contract as is not terminated; (3) terminate all orders and subcontracts to the extent that they relate to the performance of work terminated by the Notice of Termination. (4) assign to the Government, in the manner and to the extent directed by the Contracting Officer, all of the right, title, and interest of the Contractor under the orders or subcontracts so terminated in which case the Government shall have the right, in its discretion. to settle or pay any or all claims arising out of the termination of such orders and subcontracts; (5) with the approval or ratification of the Contracting Officer, to the extent he may require, which approval or ratification shall be final and conclusive for all purposes of this clause, settle all outstanding liabilities and all claims arising out of such termination of orders and subcontracts, the cost of which would be reimbursable in whole or in part. in accordance with the provisions of this contract, (6) transfer title (to the extent that title has not already been transferred) and, in the manner, to the extent, and at the times directed by the Contracting Officer, deliver to the Government (1) the fabricated or unfabricated parts, work in process, completed work, supplies. and other material produced as a part of, or acquired in respect of the performance of, the work terminated by the Notice of Termination, (11) the completed or partially completed plans, drawings, information, and other property which, if the contract had been completed, would be required to be furnished to the Government. and (ii) the jigs, dies, and fixtures, and other special tools and tooling acquired or manufactured for the performance of this contract for the cost of which the Contractor has been or will be reimbursed under this contract. (7) use its best efforts to sell in the manner, at the times, to the exent, and at the price or prices directed or authorized by the Contracting Officer, any property of the types referred to in provision (6) of this paragraph: Provided. however, That the Contractor (1) shall not be required to extend credit to any purchaser, and (11) may acquire any such property under the conditions prescribed by and at a price or prices approved by the Contracting Officer: And provided further. That the proceeds of any such transfer or disposition shall be applied in reduction of any payments to be made by the Government to the Contractor under this contract or shall otherwise be credited to the price or cost of the work covered by this contract or paid in such other manner as the Contracting Officer may direct; (8) complete performance of such part of the work as shall not have been terminated by the Notice of Termination; and (9) take such action as may be necessary, or as the Contracting Officer may direct, for the protection and preservation of the property related to this contract which is in the possession of the Contractor in which the Government has or may acquire an interest. The Contractor shall proceed immediately with the performance of the above obligations notwithstanding any delay in determining or adjusting the amount of the fixed-fee, or any item of reimbursable cost, under this clause. At any time after expiration of the plant clearance period. as defined in Section VIII Armed Services Procurement Regulation. as it may be amended from time to time, the Contractor may submit to the Contracting Oncer a list, certified as to quantity and quality, of any or all items of termination inventory not previously disposed of exclusive of items the disposition of which has been directed or authorized by the Contracting Officer, and may request the Government to remove such items or enter into a storage agreement covering them Not later than fifteen (15) days thereafter, the Government will accept title to such items and remove them or enter into a storage agreement covering the same, provided that the list submitted shall be subject to verification by the Contracting Officer upon removal of the items, or if the items are stored. within fortyfive (45) days from the date of submission of the list. and any necessary adjustment to correct the list as submitted shall be made prior to final settlement. (2) After receipt of a Notice of Termination, the Contractor shall submit to the Contracting Officer its termination claim in he form and with the certification prescribed by the Contracting Acer Such claim shall be submitted promptly but in no event later than two years from the effective date of termination, unless one or more extensions in writing are granted by the Contracting Omcer upon request of the Contractor made in writing within such two-year period or authorized extension thereof However. if the Contracting Officer determines that the facts Justify such action, he may receive and act upon any such termination claim at any time after such two-year period or any extension thereof. Upon failure of the Contractor to submit its termination claim within the time allowed, the Contracting Officer may determine, on the basis of information available to him, the amount. If any, due to the Contractor by reason of the termination and shall thereupon pay to the Contractor the amount so determined. (d) Subject to the provisions of paragraph (c), the Contractor and the Contracting Officer may agree upon the whole or any part of the amount or amounts to be paid (including an allowance for the fixed-fee) to the Contractor by reason of the total or partial termination of work pursuant to this clause. The contract shall be amended accordingly, and the Contractor shall be paid the agreed amount. (e) In the event of the failure of the Contractor and the Contracting Omcer to agree in whole or in part, as provided in paragraph (d) above, as to the amounts with respect to costs and fixed-fee, or as to the amount of the fixed-fee, to be paid to the Contractor in connection with the termination of work pursuant to this clause, the Contracting Officer shall determine, on the basis of information available to him, the amount, if any, due to the Contractor by reason of the termination and shall pay to the Contractor the amount determined as follows: (1) If the settlement includes cost and fixed-fee (1) There shall be included therein all costs and expenses reimbursable in accordance with this contract, not previously paid to the Contractor for the performance of this contract prior to the effective date of the Notice of Termination, and such of these costs as may continue for a reasonable time thereafter with the approval of or as directed by the Contracting Officer Provided, however, That the Contractor shall proceed as rapidly as practicable to discontinue such costs. (11) There shall be included therein 30 far as not included under (1) above, the cost of settling and paying claims arising out of the termination of work under subcontracts or orders. as provided in paragraph (b) (5) above, which are properly chargeable to the terminated portion of the contract. (ii) There shall be included therein the reasonable costs of settlement, including accounting. legal, clerical. and other expenses reasonably necessary for the preparation of settlement claims and supporting data with respect to the terminated portion of the contract and for the termination and settlement of subcontracts thereunder, together with reasonable storage. transportation, and other costs incurred in connection with the protection or disposition of termination inventory Provided, however. That if the termination is for default of the Contractor there shall not be included any amounts for the preparation of the Contractor's settlement proposal. (iv) There shall be included therein a portion of the fixed-fee payable under the contract determined as follows. (A) In the event of the termination of this contract for the convenience of the Government and not for the default of the Contractor, there shall be paid a percentage of the fee equivalent to the percentage of the completion of work contemplated by the contract, less fixed-fee payments previously made hereunder. (B) In the event of the termination of this contract for the default of the Contractor. the total fixedfee payable shall be such proportionate part of the fee (or, if this contract calls for articles of different types, of such part of the fee as is reasonably allocable to the type of article under consideration) as the total number of articles delivered to and accepted by the Government bears to the total number of articles of a like kind called for by this contract. If the amount determined under this paragraph is less than the total payment of fixed-fee theretofore made to the Con tractor, the Contractor shall repay to the Government the excess amount. (2) If the settlement includes only the fixed fee, the amount thereof will be determined in accordance with sub paragraph (e) (1) (iv) above (f) The Contractor shall have the right of appeal, under the clause of this contract entitled "Disputes." from any determination made by the Contracting Officer under paragraphs (c) or (e) above, except that if the Contractor has failed to submit its claim within the time provided in paragraph (c) above and has failed to request extension of such time, he shall have no such right of appeal. In any case where the Contracting Officer has made a determination of the amount due under paragraph (c) or (e) above, the Government shall pay to the Contractor the following: (1) if there is no right of appeal hereunder or if no timely appeal has been taken, the amount so determined by the Contracting Officer, or (11) if an appeal has been taken, the amount finally determined on such appeal. (g) In arriving at the amount due the Contractor under this clause there shall be deducted (1) all unliquidated advance or other unliquidated payments theretofore made to the Contractor. (2) any claim which the Government may have against the Contractor in connection with this contract, and (3) the agreed price for, or the proceeds of sale of, any materials, supplies, or other things acquired by the Contractor or sold pursuant to the provisions of this clause and not otherwise recovered by or credited to the Government. (h) In the event of a partial termination, the portion of the fixed-fee which is payable with respect to the work under the continued portion of the contract shall be equitably adjusted by agreement between the Contractor and the Contracting Officer. and such adjustment shall be evidenced by an amendment to this contract. (1) The Government may from time to time, under such terms and conditions as it may prescribe, make partial payments and payments on account against costs incurred by the Contractor in connection with the terminated portion of the contract whenever in the opinion of the Contracting Officer the aggregate of such payments shall be within the amount to which the Contractor will be entitled hereunder. If the total of such payments is in excess of the amount finally determined to be due under this clause. such excess shall be payable by the Contractor to the Government upon demand, together with interest computed at the rate of 6% per annum, for the period from the date such excess payment is received by the Contractor to the date on which such excess is repaid to the Government Provided, however. That no interest shall be charged with respect to any such excess payment attributable to a reduction in the Contractor's claim by reason of retention or other disposition of termination inventory until ten days after the date of such retention or disposition. (1) The provisions of this clause relating to the fixed-fee shall be inapplicable if this contract does not provide for payment of a fixed-fee II. EXCUSABLE DELAYS Except with respect to defaults of subcontractors. the Contractor shall not be in default by reason of any failure in performance of this contract in accordance with its terms (including any failure by the Contractor to make progress in the prosecution of the work hereunder which endangers such performance) if such failure arises out of causes beyond the control and without the fault or negligence of the Contractor. Such causes may include, but are not restricted to. acts of God or of the public enemy. acts of the Government in either its sovereign or contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather, but in every case the failure to perform must be beyond the control and withIf the failure to out the fault or negligence of the Contractor. |