CONTRACT CLAUSES AND SOLICITATION PROVISIONS TAXES (1960 JUL) Any tax or duty from which the United States Government is exempt by agreement with the Government of or from which the Contractor or any subcontractor hereunder is exempt shall not constitute an allowable cost under this contract. under the laws of (End of clause) (b) Foreign Government as Contractor. In accordance with 11-403.2(d), insert the following clause. TAXES (1960 JUL) Any tax or duty from which the United States Government is exempt by agreement with the Government of .......... or from which any subcontractor hereunder is exempt under the laws of shall not constitute an allowable cost under this contract. (End of clause) 7-204.25 Advance Payments. When advance payments are to be made in accordance with Appendix E, Part 4, insert the appropriate clauses in 7-104.34. 7-204.26 Frequency Authorization. In accordance with 7-104.61, insert the clause therein. 7-204.27 Required Source for Jewel Bearings. In accordance with 1-2207.2, insert the clause in 7-104.37. 7-204.28 General Services Administration Supply Sources. In accordance with 5-907, insert the following clause. GENERAL SERVICES ADMINISTRATION SUPPLY SOURCES (1965 JAN) The Contracting Officer may issue the Contractor an authorization to utilize General Services Administration supply sources for property to be used in the performance of this contract. Title to all property acquired under such an authorization shall be in the Government. All property acquired under such an authorization shall be subject to the provisions of the clause of this contract entitled "Government Property", except paragraphs (a) and (b) thereof. (End of clause) 7-204.29 Special Termination Costs. In accordance with 8-712, insert the clause in 7-108.3. 7-204.30 Interest. In accordance with E-620, insert the clause in 7-104.39. 7-204.31 United States Products (Military Assistance Program). In accordance with 6-703.4, insert the clause in 7-2003.51. 7-204.32 Value Engineering. (a) Use of the Incentive and Program Requirement Clauses. In accordance with 1-1702 and 1-1707, insert the applicable clause or clauses in 7-104.44(a) and (b), as modified in (b) or (c) below. (b) Cost-Plus-Incentive-Fee Contracts. Substitute the following "Sharing" provision for paragraph (e) of the applicable clause in 7-104.44(a) and (b): (e) Sharing. If a VECP submitted by the Contractor pursuant to this clause is accepted, the Contractor shall share in the savings realized by the Government in accordance with the following provisions: (1) Instant Contract. (i) Definitions: 7-204.32 ARMED SERVICES PROCUREMENT REGULATION CONTRACT CLAUSES AND SOLICITATION PROVISIONS (A) Instant contract savings to the Contractor (ICS) is the unit cost reduction times the number of units affected in the instant contract. The proposed unit cost reduction includes estimated allowable Contractor development and implementation costs (CC). The Contractor's development and implementation costs include any subcontractor development and implementation costs and any subcontractor incentive payments (see (h) below). For purposes of this clause, Contractor development costs are those costs incurred after the Contractor has identified a specific value engineering project and prior to acceptance by the Government. (B) Government Costs (GC) are those DoD costs which directly result from development and implementation of the VECP, such as test and evaluation of the VECP, and any increased costs in DoD operations, maintenance, and logistic support. (ii) Calculations and Actions: (A) Reduce the target cost of items affected by the VECP by ICS. The estimated cost for "limitation of cost" or "limitation of funds" purposes (7-203.3), if different or separately stated, should also be reduced by the same amount. (B) If ICS exceeds GC, add 35% (20% if this is a VE Program Requirement Change (C) If GC exceeds ICS, but acceptance of the VECP is still desirable due to concur- (2) Concurrent Contracts. (i) If the VECP accepted under this contract is also used on concurrent contracts of the purchasing office for essentially the same items the Contractor shall be paid a share of any savings as calculated in (ii) below. (ii) Calculations: (A) Determine the reduction in the price of each concurrent contract(s) as a result of incorporating the VECP. (B) Subtract from the total amount in (A) any Government costs (GC) not yet offset (if GC was greater than ICS) in (e)(1)(ii)(C) or (D) above, and any increase in the instant contract target cost, i.e., if ICS was negative in (e)(1)(ii)(D). If the resulting number is positive, multiply it by 35% (20% if this is a VEPRC). Add this amount to the instant contract as a separate line item independent of the incentive sharing arrangement and without adjustment to any of the contract incentive parameters. (3) Future Contracts. (i) Definition. The term unit cost reduction for future contract sharing shall be the unit cost reduction under this instant contract without deducting any cost of development or implementation. (ii) If the VECP accepted under this contract is used on future purchases of essentially the same item by the purchasing office, or its successor, the Contractor shall share in the savings on all affected end items scheduled for delivery not later than three years after acceptance of the first item incorporating the VECP, or until the originally scheduled delivery date of the last affected end item under the instant contract, whichever is later. When sharing on future contracts is expected, the Contractor shall be responsible for the following: (A) Maintaining records adequate to support identification of the first delivered unit to which the VECP applies. These records are considered an integral part of contract documentation and shall be maintained for a period of three years after final payment on the contract under which the VECP was accepted. 7-204.32 ARMED SERVICES PROCUREMENT REGULATION CONTRACT CLAUSES AND SOLICITATION PROVISIONS (B) Annotating the DD Form 250, Material Inspection and Receiving Report, which applies to the initial unit covered by the VECP with the following statement: "This is the initial unit delivered which incorporates VECP No...................................., Contract Modification No............ dated (iii) Calculations. At the time each eligible future contract is awarded: (A) Determine the number of units scheduled to be delivered prior to expiration of the Contractor sharing period determined in (ii) above. Multiply this by the unit cost reduction as defined in (e)(3)(i). (B) Subtract from the total amount in (A) any Government costs or instant contract increases not yet offset in (e)(1)(ii)(C) or (D), or in (e) (2)(ii)(B), or in other contracts awarded since acceptance of the VECP. If the resulting number is positive, multiply it by 35% (20% if this is a VEPRC). Add this amount to the instant contract as a separate line item independent of the incentive sharing arrangement and without adjustment to any of the contract incentive parameters. (4) Collateral Savings. If an accepted VECP results in a measurable net reduction in the cognizant Military Department's overall documentable projected costs of maintenance, operation, logistic support or Government-furnished property, which exceeds any increase in costs attributable to incorporation of such VECP, including acquisition costs, the contract shall be increased by twenty percent (20%) of the projected net reduction in ascertainable collateral costs (i.e., savings determined to be realized during an average year of use of the item in which the change is incorporated) and, if appliable, of the actual savings accruing from a change or reduction of Government-furnished property under the instant contract. Add this amount to the instant contract as a separate line item independent of the incentive sharing arrangement and without adjustment to any of the contract incentive parameters. However, such increase representing the Contractor's share of collateral savings shall, in no event, exceed the price of this contract or $100,000, whichever is greater. The determination of the amount of collateral savings, if any, will be made solely by the Government and shall not be subject to the 'Disputes' clause of this contract. In all cases, degradation of performance, service life, or capability shall be a consideration in the determination of actual savings to the Military Department. (End of clause paragraph) 7-204.32(c) (c) Cost-Plus-Fixed Fee and Cost-Plus-Award-Fee Contracts. Substitute the following "Sharing" provision for paragraph (e) of the applicable clause in 7-104.44(a) and/or (b): (e) Sharing. If a VECP submitted by the Contractor pursuant to this clause is accepted. the Contractor shall share in savings realized by the Government in accordance with the following provisions: (1) Instant Contract. (i) Definitions: (A) Instant contract savings to the Contractor (ICS) is the unit cost reduction times the number of units affected in the instant contract. The proposed unit cost reduction includes estimated allowable Contractor development and implementation costs (CC). The Contractor's development and implementation costs include any subcontractor development and implementation costs and any subcontractor incentive payments (see (h) below). For purposes of this clause, Contractor development costs are those costs incurred after the Contractor has identified a specific value engineering project and prior to acceptance by the Government. (B) Government Costs (GC) are those DoD costs which directly result from development and implementation of the VECP, such as test and evaluation of the VECP, and any increased costs in DoD operations, maintenance, and logistic support. (ii) Calculations and Actions: 7-204.32 ARMED SERVICES PROCUREMENT REGULATION CONTRACT CLAUSES AND SOLICITATION PROVISIONS (A) If ICS exceeds GC, add 25% (15% if this is a VE Program Requirements Change (VEPRC) of the excess to the contract fee), and reduce the estimated cost of the items affected by the VECP, for "limitation of cost" or "limitation of funds" purposes (7-203.3), by ICS. (B) If GC exceeds ICS, but acceptance of the VECP is still desirable due to concurrent or future savings, do not adjust contract fee, but offset the amount GC exceeds ICS against concurrent or future savings. (C) If the Contractor cost of developing and implementing the VECP would result in an increase in instant contract cost, but the VECP is still desirable due to concurrent or future savings, equitably adjust the estimated cost and fee in accordance with the "Changes" clause. Offset this increase and any GC against concurrent or future savings. (2) Concurrent Contracts. (i) If the VECP accepted under this contract is also used on concurrent contracts of the purchasing office for essentially the same items the Contractor shall be paid a share of any savings as calculated in (ii) below. (ii) Calculations: (A) Determine the reduction in the price of each concurrent contract(s) as a result of incorporating the VECP. (B) Subtract from the total amount in (A) any Government Costs (GC) not yet offset (if GC was greater than ICS) in (e)(1)(ii)(B) or (C) above, and any increase in the instant contract price, i.e., if ICS was negative in (e)(1)(ii)(C). If the resulting number is positive, multiply it by 25% (15% if this is a VEPRC). Add this amount to the contract fee. (3) Future Contracts. (i) Definition: The term unit cost reduction for future contract sharing shall be the unit cost reduction under this instant contract without deducting any cost of development or implementation. (ii) If the VECP accepted under this contract is used on future purchases of essentially (A) Maintaining records adequate to support identification of the first delivered unit (iii) Calculations. At the time each eligible future contract is awarded: (A) Determine the number of units scheduled to be delivered prior to expiration of the Contractor sharing period determined in (ii) above. Multiply this by the unit cost reduction as defined in (e)(3)(i). (B) Subtract from the total amount in (A) any Government costs or instant contract increases not yet offset in (e)(1)(ii)(B) or (C), or in (e)(2)(ii)(B), or in other contracts awarded since acceptance of the VECP. If the resulting number is positive, multiply it by 25% (15% if this is a VEPRC). (4) Collateral Savings. If an accepted VECP results in a measurable net reduction in the cognizant Military Department's overall documentable projected costs of maintenance, operation, logistic support or Government-furnished property, which exceeds any increase in costs attributable to incorporation of such VECP, including acquisition costs, the contract shall be increased by twenty percent (20%) of the projected net reduction in ascertainable collateral costs (i.e., savings determined to be realized during an average year of use of the item in which the change is incor 58-110077 - 17 7-204.32 ARMED SERVICES PROCUREMENT REGULATION CONTRACT CLAUSES AND SOLICITATION PROVISIONS porated) and, if applicable, of the actual savings accruing from a change or reduction of Government-furnished property under the instant contract. However, such increase representing the Contractor's share of collateral savings shall, in no event, exceed the price of this contract or $100,000, whichever is greater. The determination of the amount of collateral savings, if any, will be made solely by the Government and shall not be subject to the "Disputes" clause of this contract. In all cases, degradation of performance, service life, or capability shall be a consideration in the determination of actual savings to the Military Department. (End of clause paragraph) (d) When the sharing provisions applicable to incentive contracts are to be modified in accordance with 1-1704.1(c), clause paragraph (e) in (b) above shall be further modified as follows: lows: (i) Change clause paragraph (e)(1)(ii) to provide substantially as follows: (ii) If the cost reduction proposal submitted pursuant to this clause involves an an- (ii) Change clause paragraph (e)(2)(ii)(B) to provide substantially as fol (B) Subtract from the total amount in (A) any government costs not yet offset and any (iii) Substitute the definition in 7-104.44(a)(5) for the definition in clause paragraph (e)(3)(i). lows: (iv) Change clause paragraph (e)(3)(iii)(B) to provide substantially as fol (B) Subtract from the total amount in (A) any government costs or instant contract increases not yet offset. If the resulting number is positive, multiply it by 35% (20% if VEPRC). Add this amount to the instant contract as a separate line item independent of the incentive sharing arrangement and without adjustment to any of the contract incentive parameters. (1976 FEB) (End of clause paragraph) 7-204.33 Limitation of Liability. (a) In accordance with 1–330, in the procurement of major items, insert the following clause. 7-204.33 ARMED SERVICES PROCUREMENT REGULATION |