tions required to complete the work in conformity with the drawings and specifications. All costs for work not specifically mentioned in the Bidding Schedule shall be included in the contract prices for the items listed.

(End of clause)

7-603.6 Military Security Requirements. In accordance with 7-104.12, insert the clause therein.

7-603.7 Examination of Records by Comptroller General. In accordance with 7-104.15, insert the clause therein.

7-603.8 Priorities, Allocations, and Allotments. In accordance with 7-104.18, insert the clause therein.

7-603.9 Subcontracts. In accordance with 23-201.1, insert the clause, modified as appropriate, in 7-104.23.

7-603.10 Required Insurance. In accordance with 10-405, insert the clause in 7-104.65 or the following clause. The number of days to be inserted in the following clause shall be that prescribed by the law of the state in which the contract is to be performed. Where no time limit is specified by state law, a minimum of 10 days shall be inserted.

REQUIRED INSURANCE (1968 APR)

(a) The Contractor shall procure and maintain during the entire period of his performance under this contract the following minimum insurance.

Type
Amount

(b) Prior to the commencement of work hereunder, the Contractor shall furnish to the Contracting Officer a certificate or written statement of the above required insurance. The policies evidencing required insurance shall contain an endorsement to the effect that cancellation or any material change in the policies adversely affecting the interests of the Government in such insurance shall not be effective until days after written notice thereof to the Contracting Officer.

(c) The Contractor agrees to insert the substance of this clause, including this paragraph (c), in all subcontracts hereunder.

(End of clause)

7-603.11 Price Reduction for Defective Cost or Pricing Data. In accordance with 7-104.29, insert the clause therein.

7-603.12 Workmen's Compensation and War Hazard Insurance Overseas. In accordance with 10-403, insert the clauses in 7-104.2(a) and/or 7-104.2(b) depending on whether all contract employees are subject to the Defense Base Act or whether the Act has been waived as to all or part of the contract employees. Also insert the clause Reimbursement for War Hazard Losses in 7-104.2(c) and the language at 10-502(b) and (c) according to the instructions stated in those paragraphs.

7-603.13 Aircraft, Missile, and Space Vehicle Accident Reporting and Investigation. In accordance with 7-104.81, insert the clause therein.

7-603.14 Advance Payments. In accordance with Appendix E, Part 4, insert the clause in 7-104.34.

7-603.15 Performance of Work by Contractor. In accordance with 18-104, insert the following clause.

PERFORMANCE OF WORK BY CONTRACTOR (1965 JAN)

The Contractor shall perform on the site, and with his own organization, work equivalent to at least (words) percent * (figures) of the total amount of work to be performed under the contract. If, during the progress of the work hereunder, the Contractor requests a reduction in such percentage and the Contracting Officer determines that it would be to the Government's advantage, the percentage of the work required to be performed by the Contractor may be reduced; provided, written approval of such reduction is obtained by the Contractor from the Contracting Officer.

(End of clause)

*NOTE: The required percentage shall be the maximum consistent with customary or necessary specialty subcontracting, complexity, and magnitude of the work, and shall not be less than 20 percent, except for housing contracts in which it shall not be less than 15 per

cent.

7-603.16 Patent Rights. In accordance with 9-107 and 18-908, insert the appropriate clause in 7-302.23.

7-603.17 Interest. In accordance with E-620, insert the clause in 7-104.39. 7-603.18 Competition in Subcontracting. In accordance with 7-104.40, insert the clause therein.

7-603.19 Duty-Free Entry. In accordance with 6-603, insert the clause in 7-104.31.

7-603.20 Audit by Department of Defense. In accordance with 7-104.41, insert the clause therein.

7-603.21 Subcontractor Cost and Pricing Data. In accordance with 7-104.42, insert the clause therein.

7-603.22 Government-Furnished Property Clause for Fixed-Price Contracts. Insert the appropriate clause or clauses in 7-104.24.

7-603.23 Fixed Price Incentive Contract Clause. The following clause shall be inserted in all negotiated contracts providing for a fixed price with provision for an adjustment reflecting the efficiency and economy exercised by the contractor during performance of the contract.

INCENTIVE PRICE REVISION (1970 SEP)

(a) General. The total contract price set forth in this contract as it may have been modified, consists of unit prices, lump sum prices or a combination thereof, and such total contract price is a total target price which includes a total target profit of ........% of total target costs. The total target price shall be revised in accordance with the provisions of this clause; provided, that the total amount paid under this contract shall not exceed (i) the aggregate of the prices of the lump sum items, plus (ii) the unit prices of the estimated quantity items times the actual quantity of such items, plus (iii) .. .% of the sum of (i) and (ii) above.

(b) Definition of Cost. For the purposes of this clause, "cost" or "costs" means allowable cost in accordance with Section XV of the Armed Services Procurement Regulation as in effect on the date of this contract.

(c) Submission of Data. Within days after completion of all work and services to be performed under this contract, the Contractor shall submit (i) a detailed statement of costs incurred in the performance of this contract; (ii) such other information as the Contracting Officer may require; and (iii) a price list of all materials, supplies and property, the cost of which is included in (i) above, which are on hand upon completion of the work. Where the Contractor fails to submit the required data within the time specified, no further payment may be made by the Contracting Officer until the data are furnished.

(d) Price Revision. Upon submission of the data required by paragraph (c) above, the Contractor and the Contracting Officer shall promptly establish the total adjusted price in accordance with the following:

(1) On the basis of the information required by paragraph (c) above, the Contractor and the Contracting Officer shall establish by negotiation the total adjusted cost incurred or to be incurred for the work and services performed under this contract and accepted by the Government. (2) The total adjusted price of the work and services performed under this contract shall be established by adding to the total adjusted cost, as negotiated under (1) above, less the proceeds of any disposition of Contractor inventory in accordance with (h) below, an allowance for profit determined in accordance with (3) below, provided, however, that in no event shall the total adjusted price exceed the amount computed in accordance with paragraph (a) above.

(3) The allowance for profit with respect to this contract shall be determined as follows, subject to the provisions and limitations set forth in subparagraph (2) above:

WHEN THE TOTAL ADJUSTED COST IS: Equal to the total target cost,
THE ALLOWANCE FOR PROFIT IS: Total target profit.

WHEN THE TOTAL ADJUSTED COST IS: Greater than the total target cost, THE ALLOWANCE FOor profit is: Total target profit less percent (%) of the amount by which the total adjusted cost exceeds the total target cost.

WHEN THE TOTAL ADJUSTED COST IS: Less than the total target cost, THE ALLOWANCE FOR PROFIT IS: Total target profit plus........... percent (—%) of the amount by which the total adjusted cost is less than the total target cost.

(e) Records. (1) The Contractor shall maintain books, records, documents, and other evidence, sufficient to reflect properly all direct and indirect costs of whatever nature claimed to have been incurred for the performance of this contract. However, 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 cost data required to be furnished under (c) above are readily ascertainable. Each subcontract placed by the Contractor hereunder on other than a firm fixed-price basis (i) shall provide that the subcontractor shall maintain books, records, documents, and other evidence, sufficient to reflect properly all direct and indirect costs of whatever nature claimed to have been incurred in the performance of such subcontract and (ii) shall require each such subcontractor to insert the entire substance of this subparagraph, including this (ii), in all his subcontracts which are on other than a firm fixed-price basis.

(2) The Government may at all reasonable times make such examination or audit as the Contracting Officer may require of the Contractor's books, records, documents, and other evidence pertinent to the performance of this contract.

(f) Certification. An authorized responsible official of the Contractor shall certify on each statement of costs submitted to the Contracting Officer pursuant to (c) above that the incurred costs are based upon the records of the Contractor, that such records reflect generally accepted accounting principles and practices normally followed by the Contractor, and that such costs are correct to the best of his knowledge and belief.

(g) Subcontracts. (1) No subcontract placed under this contract shall provide for payment on a cost-plus-a-percentage-of-cost basis; and the Contractor shall not, without the prior written consent of the Contracting Officer, place any subcontract which is on a cost-plus-a-fee basis and which would involve a total price in excess of $10,000, including the fee. The Contracting Officer may, in his discretion, ratify in writing any such cost-plus-a-fee subcontract and such action shall constitute the consent of the Contracting Officer as required by this subparagraph (1).

(2) Each subcontract placed by the Contractor hereunder (i) shall provide that the Government may at all reasonable times make such examination or audit as the Contracting Officer may require of the subcontractor's books, records, documents, and other evidence, pertinent to the performance of the subcontract and (ii) shall require each such subcontractor whose subcontract is on other than a firm fixed-price basis to insert the entire substance of this subparagraph, includ

ing this (ii), in all his subcontracts. The term "subcontract," as used in this subparagraph (2) only, excludes firm fixed-price subcontracts not in excess of $2,500 and subcontracts for utility services at rates established for uniform application to the general public.

(h) Contractor Inventory. Any materials, supplies and property the cost of which is allocable to the contract and included in the total adjusted cost which are on hand upon the completion of the contract, shall be disposed of in accordance with the applicable Government regulations covering the disposition of Contractor inventory and any proceeds of such disposition shall be used to reduce the total adjusted cost established pursuant to paragraph (d) above. Any materials, supplies and property which are on hand upon the completion of the contract, which are not allocable to the contract and as to which no costs have been included in the total adjusted cost, shall be and remain the property of the Contractor.

(i) Contract Modification. The total adjusted price, as determined in accordance with paragraph (d) above, shall be evidenced by a modification to this contract signed by the Contractor and the Contracting Officer. Such final contract price shall apply to all work and services performed under this contract.

(j) Adjustment of Payment Estimates. If at any time it appears that the final contract price will be substantially greater or less than (i) the aggregate of the prices of the lump sum items, plus (ii) the unit prices of the estimated quantity items times the actual quantity of such items completed, the Contracting Officer may adjust each payment estimate thereafter to be made under the contract by increasing or decreasing the net amount of such payment estimate by the indicated percentage of variation, provided, however, that in no event shall the percentage of increase exceed that indicated in paragraph (a)(iii) above. Any adjustment of payment estimates under this paragraph shall in no way limit or affect the price revision to be computed in accordance with the provisions of this clause.

(k) Limitation on Payments. Notwithstanding any provisions of this contract authorizing greater payment, the total of all amounts paid or payable under this contract, until price revision has been made to the full extent permitted by this contract, shall not exceed the sum of the following items as reported by the Contractor from time to time as hereinafter provided: (i) the total amount of costs and (ii) the total amount of target profit used in establishing the total target price and allocable by direct proportion to the work or services performed. Within 45 days after the end of each quarter of the Contractor's fiscal year, beginning for the quarter in which work or services are first performed under this contract and as of the end of each quarter thereafter, the Contractor shall submit a statement setting forth the respective amounts of each of the two numbered items next above, together with the total of all amounts paid or payable under this contract as of the end of each such quarter. If on any quarterly statement the total of the amounts paid exceeds the sum of the two numbered items above, this gross excess shall be paid immediately by the Contractor to the Government or credited against existing unpaid billings.

(1) Disagreement. If the Contractor and the Contracting Officer are unable to agree upon the final contract price within 60 days after the date on which the data required by (c) above are to be submitted or within such further time as specified by the Contracting Officer, the Contracting Officer shall resolve the disagreement by issuing a decision pursuant to the clause of this contract entitled "Disputes."

(m) Termination.

(i) In the event of a complete termination, the amount payable to the Contractor shall be established in accordance with the clause of this contract entitled "Termination for Convenience of the Government" or "Termination for Default-Damages for Delay-Time Extensions," as applicable.

(ii) In the event of a partial termination, the amount payable to the Contractor as to the work and services terminated shall be established in accordance with the clause of this contract entitled "Termination for the Convenience of the Government" or "Termination for Default-Damages for Delay-Time Extensions," as applicable. As to the work and services not terminated the provisions of this clause shall apply.

(End of clause)

7-603.24 Shop Drawings.

(a) Insert the following clause, with the appropriate addition in (b) below, in contracts requiring the submission of shop drawings for review prior to construction:

SHOP DRAWINGS (1965 JAN)

The Contractor shall submit to the Contracting Officer for approval O copies (four unless otherwise indicated herein) of all shop drawings as called for under the various headings of these specifications. These drawings shall be complete and detailed. If approved by the Contracting Officer, each copy of the drawings will be identified as having received such approval by being so stamped and dated. The Contractor shall make any corrections required by the Contracting Officer. If the Contractor considers any correction indicated on the drawings to constitute a change to the contract drawings or specifications, notice as required under the clause entitled “Changes" will be given to the Contracting Officer. sets (three unless otherwise indicated herein) of all shop drawings will be retained by the Contracting Officer and one set will be returned to the Contractor. The approval of the drawings by the Contracting Officer shall not be construed as a complete check, but will indicate only that the general method of construction and detailing is satisfactory. Approval of such drawings will not relieve the Contractor of the responsibility for any error which may exist as the Contractor shall be responsible for the dimensions and design of adequate connections, details, and satisfactory construction of all work.

(End of clause)

(b) "As built" shop drawings may be required for the permanent record of the using agency.

(1) When reproducible shop drawings are required, the following provision shall be added to the clause in (a) above:

Upon the completion of the work under this contract, the Contractor shall furnish a complete set of reproducibles of all shop drawings as finally approved. These drawings shall show all changes and revisions made up to the time the equipment is completed and accepted.

(2) If reproducible shop drawings are not required, the following provision shall be added to the clause in (a) above:

Upon the completion of the work under this contract, the Contractor shall furnish complete sets of prints of all shop drawings as finally approved. These drawings shall show changes and revisions made up to the time the equipment is completed and accepted.

7-603.25 Physical Data.

(a) All the information concerning local conditions pertaining to the performance of the contract work, which has been made available to the contractor should be referenced into the contract by completing the clause set forth in (b) below. Wherever test borings, analyses, or hydrographic data are to be made available to the contractor, the wording of this special clause should be such as only to inform the contractor as to the source of the data and where it may be examined.

(b) Contract Clause.

PHYSICAL DATA (1965 JAN)

Information and data furnished or referred to below are furnished for the Contractor's information. However, it is expressly understood that the Government will not be responsible for any interpretation or conclusion drawn therefrom by the Contractor.