Part II - Contract Clauses
Section I - Contract Clauses
This contract incorporates one or more clauses by reference, with the same force and effect as if they were given in full text. Upon request, the Contracting Officer will make their full text available. Also, the full text of a clause may be accessed electronically at this/these address(es):
FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1)
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NUMBER |
TITLE (DATE) |
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DEFINITIONS (JUL 2004) |
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GRATUITIES (APR 1984) |
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COVENANT AGAINST CONTINGENT FEES (APR 1984) |
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RESTRICTIONS ON SUBCONTRACTOR SALES TO THE GOVERNMENT (JUL 1995) |
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ANTI-KICKBACK PROCEDURES (JUL 1995) |
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CANCELLATION, RESCISSION, AND RECOVERY OF FUNDS FOR ILLEGAL OR IMPROPER ACTIVITY (JAN 1997) |
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PRICE OR FEE ADJUSTMENT FOR ILLEGAL OR IMPROPER ACTIVITY (JAN 1997) |
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LIMITATION ON PAYMENTS TO INFLUENCE CERTAIN FEDERAL TRANSACTIONS (JUN 2003) |
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PRINTED OR COPIED DOUBLE-SIDED ON RECYCLED PAPER (AUG 2000) |
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CENTRAL CONTRACTOR REGISTRATION (OCT 2003) |
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PROTECTING THE GOVERNMENT'S INTEREST WHEN SUBCONTRACTING WITH CONTRACTORS DEBARRED, SUSPENDED, OR PROPOSED FOR DEBARMENT (JUL 1995) |
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MATERIAL REQUIREMENTS (AUG 2000) |
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DEFENSE PRIORITY AND ALLOCATION REQUIREMENTS (SEP 1990) |
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AUDIT AND RECORDS - NEGOTIATION (JUN 1999) |
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PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA - MODIFICATIONS (OCT 1997) |
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SUBCONTRACTOR COST OR PRICING DATA - MODIFICATIONS (OCT 1997) |
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INTEGRITY OF UNIT PRICES (OCT 1997) |
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ALLOWABLE COST AND PAYMENT (DEC 2002) First Fill-in: "30th" |
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FIXED FEE (MAR 1997) (CLIN x008) |
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ORDERING (OCT 1995) Fill-in: “such orders may be issued from 21 JUN 2006 through a period of five years, and up to 3 additional years if all options are exercised.” |
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ORDER LIMITATIONS (OCT 1995) Fist Fill-in: “$1,000” Second Fill-in: “45 RB-M and associated supplies and services” Third Fill-in: “45 RB-M and associated supplies and services” Fourth Fill-in: “30 days” Fifth Fill-in: “30 days” |
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INDEFINITE QUANTITY (OCT 1995) First Fill-in: 21 JUN 2016 |
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OPTION TO EXTEND SERVICES (Nov 1999) First Fill-in: “five (5) days” |
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OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 2000) First Fill-in: “1 Day” Second Fill-in: “60 Days” Third Fill-in: “8 Years” |
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UTILIZATION OF SMALL BUSINESS CONCERNS (MAY 2004 ) |
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SMALL BUSINESS SUBCONTRACTING
PLAN (JAN 2002) |
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LIQUIDATED DAMAGES – SUBCONTRACTING PLAN (JAN 1999) |
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NOTICE OF PRICE EVALUATION ADJUSTMENT FOR SMALL DISADVANTAGED BUSINESS CONCERNS (JUN 2003) First Fill-in: "10" |
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CHILD LABOR—COOPERATION WITH AUTHORITIES AND REMEDIES (JUNE 2004) |
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WALSH-HEALEY PUBLIC CONTRACTS ACT (DEC 1996) |
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PROHIBITION OF SEGREGATED FACILITIES (FEB 1999) |
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EQUAL OPPORTUNITY (APR 2002) |
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EQUAL OPPORTUNITY FOR SPECIAL DISABLED VETERANS, VETERANS OF THE VIETNAM ERA, AND OTHER ELIGIBLE VETERANS (DEC 2001) |
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AFFIRMATIVE ACTION FOR WORKERS WITH DISABILITIES (JUN 1998) |
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EMPLOYMENT REPORTS ON SPECIAL DISABLED VETERANS, VETERANS OF THE VIETNAM ERA, AND OTHER ELIGIBLE VETERANS (DEC 2001) |
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HAZARDOUS MATERIAL IDENTIFICATION AND MATERIAL SAFETY DATA (JAN 1997), Alternate I (July 1995) First Fill-in: “Provided in accordance with Section 077 of the Statement of Work and the Contract Data Requirements List (CDRLs).” |
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POLLUTION PREVENTION AND RIGHT-TO-KNOW INFORMATION (AUG 2003) |
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DRUG FREE WORKPLACE (MAY 2001) |
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OZONE-DEPLETING SUBSTANCES (MAY 2001) |
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TOXIC CHEMICAL RELEASE REPORTING (AUG 2003) |
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BUY AMERICAN ACT - SUPPLIES (JUN 2003) (Note: Applicability, if any, limited by 14 USC 665.) |
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52.225-13 |
RESTRICTION ON CERTAIN FOREIGN PURCHASES (JAN 2004) |
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AUTHORIZATION AND CONSENT (JUL 1995) |
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NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT INFRINGEMENT (AUG 1996) |
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PATENT INDEMNITY (APR 1984) ALTERNATE II (APR 1984) Fill-in: The RB-M System |
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PATENT RIGHTS – ACQUISITION BY THE GOVERNMENT (JAN 1997) |
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RIGHTS IN DATA - GENERAL (JUN 1987) ALTERNATE II (JUN 1987). First fill-in: HSCG23-06-D-ARB001 Second fill-in: "The operation, maintenance, diagnosis, and repair of the RB-M System by the Coast Guard and support service contractors. The development of operations, maintenance, diagnosis, and repair documentation (traditional and electronic) in support of the RB-M System by the Coast Guard and support service contractors. The training of operators, maintainers, diagnosticians, and repairers of the RB-M System by the Coast Guard and support service contractors. The development of training materials (traditional and electronic) in support of the RB-M System by the Coast Guard and support service contractors." ALTERNATE III (JUN 1987). First fill-in: HSCG23-06-D-ARB001 ALTERNATE IV (JUN 1987) ALTERNATE V (JUN 1987) |
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ADDITIONAL DATA REQUIREMENTS (JUN 1987) |
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COMMERCIAL COMPUTER SOFTWARE - RESTRICTED RIGHTS (JUN 1987) First fill-in: HSCG23-06-D-ARB001 |
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TECHNICAL DATA DECLARATION, REVISION, AND WITHHOLDING OF PAYMENT - MAJOR SYSTEMS (JAN 1997) First fill-in: Marinette Marine Corporation Second fill-in: HSCG23-06-D-ARB001 |
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RIGHTS TO PROPOSAL DATA (TECHNICAL) (JUN 1987) First Fill-in: All Second Fill-in: 26 July 2005 and 16 August 2005, and revised on 25 April 2006 |
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INSURANCE – WORK ON A GOVERNMENT INSTALLATION (JAN 1997) |
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FEDERAL, STATE, AND LOCAL TAXES (APR 2003) |
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COST ACCOUNTING STANDARDS (APR 1998) |
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ADMINISTRATION OF COST ACCOUNTING STANDARDS (NOV 1999) |
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PAYMENTS (APR 1984) |
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PAYMENTS UNDER TIME-AND-MATERIALS AND LABOR-HOUR CONTRACTS (DEC 2002) (CLINs x006, x007) First Fill-in: 30th ALTERNATE I (MAR 2000) |
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DISCOUNTS FOR PROMPT PAYMENT (FEB 2002) |
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LIMITATION ON WITHHOLDING OF PAYMENTS (APR 1984) |
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EXTRAS (APR 1984) |
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INTEREST (JUN 1996) |
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LIMITATION OF FUNDS (Apr 1984) (CLINs x006, x007, and x008, where x equals pricing period) The 60-day period is changed to 30 days and the 75 percent is changed to 85 percent. "Task Order" is substituted for "Schedule". |
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ASSIGNMENT OF CLAIMS (JAN 1986) |
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PROMPT PAYMENT (OCT 2003) |
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PAYMENT BY ELECTRONIC FUNDS TRANSFER-CENTRAL CONTRACTOR REGISTRATION (OCT 2003) |
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ALTERNATE I (DEC 1991) |
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PROTEST AFTER AWARD (AUG 1996) |
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BANKRUPTCY (JUL 1995) |
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CHANGES—TIME-AND-MATERIALS OR LABOR-HOURS (SEPT 2000) |
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CHANGE ORDER ACCOUNTING (APR 1984) |
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NOTIFICATION OF CHANGES (APR 1984) First Fill-in: "30 days or as negotiated with the Contracting Officer" Second Fill-in: “30 days or as negotiated with the Contracting Officer” |
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SUBCONTRACTS FOR COMMERCIAL ITEMS (JULY 2004) |
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GOVERNMENT FURNISHED PROPERTY (SHORT FORM) (JUN 2003) |
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SPECIAL TOOLING (MAY 2004) |
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SPECIAL TEST EQUIPMENT (FEB 1993) |
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LIMITATION OF LIABILITY – HIGH-VALUE ITEMS (FEB 1997), Alternate I (Apr 1984) This clause applies to the Response Boat – Medium. |
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LIMITATION OF LIABILITY – SERVICES (FEB 1997) |
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PREFERENCE FOR PRIVATELY OWNED U.S.-FLAG COMMERCIAL VESSELS (APR 2003) |
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TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (FIXED-PRICE) (MAY 2004) |
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TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (SERVICES) (SHORT FORM) (APR 1984) |
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TERMINATION (COST-REIMBURSEMENT) (MAY 2004) for CLINs x008 with ALTERNATE IV (SEPT 1996) for CLINs x006, x007, 2009 and 3009 |
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DEFAULT (FIXED PRICE SUPPLY AND SERVICE) (APR 1984) |
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EXCUSABLE DELAYS (APR 1984) for CLINs x006, x007, x008, 2009 and 3009 |
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COMPUTER GENERATED FORMS (JAN 1991) |
HOMELAND SECURITY ACQUISITION REGULATION (48CFR CHAPTER 30)
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TITLE (DATE) |
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ORGANIZATIONAL CONFLICT OF INTEREST (JUL 2004) (DEVIATION) |
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INDEX FOR SPECIFICATIONS (DEC 2003) |
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KEY PERSONNEL OR FACILITIES. (DEC 2003) Fill-in:
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SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS SUBCONTRACTING REPORTING (DEC 2003) |
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STRIKES OR PICKETING AFFECTING TIMELY COMPLETION OF THE CONTRACT WORK (DEC 2003) |
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ACCIDENT AND FIRE REPORTING (DEC 2003) |
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INSURANCE (DEC 2003) |
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QUALIFICATIONS OF CONTRACTOR EMPLOYEES AND INFORMATION TECHNOLOGY SYSTEM ACCESS FOR CONTRACTORS (NOV 2004) (DEVIATION) |
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DISSEMINATION OF CONTRACT INFORMATION (DEC 2003) |
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CONTRACTING OFFICER’S TECHNICAL REPRESENTATIVE (DEC 2003) |
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GOVERNMENT PROPERTY REPORTS (DEC 2003) |
(a) Amount of payments and limitations on payments. Subject to such other limitations and conditions as are specified in this contract and this clause, the amount of payments and limitations on payments shall be specified in the contract’s description of the basis for payment.
(b) Contractor request for performance-based payment. The Contractor may submit requests for payment of performance-based payments not more frequently than monthly, in a form and manner acceptable to the Contracting Officer. Unless otherwise authorized by the Contracting Officer, all performance-based payments in any period for which payment is being requested shall be included in a single request, appropriately itemized and totaled. The Contractor’s request shall contain the information and certification detailed in paragraphs (l) and (m) of this clause.
(c) Approval and payment of requests.
(1) The Contractor shall not be entitled to payment of a request for performance-based payment prior to successful accomplishment of the event or performance criterion for which payment is requested. The Contracting Officer shall determine whether the event or performance criterion for which payment is requested has been successfully accomplished in accordance with the terms of the contract. The Contracting Officer may, at any time, require the Contractor to substantiate the successful performance of any event or performance criterion which has been or is represented as being payable.
(2) A payment under this performance-based payment clause is a contract financing payment under the Prompt Payment clause of this contract and not subject to the interest penalty provisions of the Prompt Payment Act. The designated payment office will pay approved requests on the 21ST day after receipt of the request for performance-based payment. However, the designated payment office is not required to provide payment if the Contracting Officer requires substantiation as provided in paragraph (c)(1) of this clause, or inquires into the status of an event or performance criterion, or into any of the conditions listed in paragraph (e) of this clause, or into the Contractor certification. The payment period will not begin until the Contracting Officer approves the request.
(3) The approval by the Contracting Officer of a request for performance-based payment does not constitute an acceptance by the Government and does not excuse the Contractor from performance of obligations under this contract.
(d) Liquidation of performance-based payments.
(1) Performance-based finance amounts paid prior to payment for delivery of an item shall be liquidated by deducting a percentage or a designated dollar amount from the delivery payment. If the performance-based finance payments are on a delivery item basis, the liquidation amount for each such line item shall be the percent of that delivery item price that was previously paid under performance-based finance payments or the designated dollar amount. If the performance-based finance payments are on a whole contract basis, liquidation shall be by either predesignated liquidation amounts or a liquidation percentage.
(2) If at any time the amount of payments under this contract exceeds any limitation in this contract, the Contractor shall repay to the Government the excess. Unless otherwise determined by the Contracting Officer, such excess shall be credited as a reduction in the unliquidated performance-based payment balance(s), after adjustment of invoice payments and balances for any retroactive price adjustments.
(e) Reduction or suspension of performance-based payments. The Contracting Officer may reduce or suspend performance-based payments, liquidate performance-based payments by deduction from any payment under the contract, or take a combination of these actions after finding upon substantial evidence any of the following conditions:
(1) The Contractor failed to comply with any material requirement of this contract (which includes paragraphs (h) and (i) of this clause).
(2) Performance of this contract is endangered by the Contractor’s—
(i) Failure to make progress; or
(ii) Unsatisfactory financial condition.
(3) The Contractor is delinquent in payment of any subcontractor or supplier under this contract in the ordinary course of business.
(f) Title.
(1) Title to the property described in this paragraph (f) shall vest in the Government. Vestiture shall be immediately upon the date of the first performance-based payment under this contract, for property acquired or produced before that date. Otherwise, vestiture shall occur when the property is or should have been allocable or properly chargeable to this contract.
(2) “Property,” as used in this clause, includes all of the following described items acquired or produced by the Contractor that are or should be allocable or properly chargeable to this contract under sound and generally accepted accounting principles and practices:
(i) Parts, materials, inventories, and work in process;
(ii) Special tooling and special test equipment to which the Government is to acquire title under any other clause of this contract;
(iii) Nondurable (i.e., noncapital) tools, jigs, dies, fixtures, molds, patterns, taps, gauges, test equipment and other similar manufacturing aids, title to which would not be obtained as special tooling under paragraph (f)(2)(ii) of this clause; and
(iv) Drawings and technical data, to the extent the Contractor or subcontractors are required to deliver them to the Government by other clauses of this contract.
(3) Although title to property is in the Government under this clause, other applicable clauses of this contract (e.g., the termination or special tooling clauses) shall determine the handling and disposition of the property.
(4) The Contractor may sell any scrap resulting from production under this contract, without requesting the Contracting Officer’s approval, provided that any significant reduction in the value of the property to which the Government has title under this clause is reported in writing to the Contracting Officer.
(5) In order to acquire for its own use or dispose of property to which title is vested in the Government under this clause, the Contractor must obtain the Contracting Officer’s advance approval of the action and the terms. If approved, the basis for payment (the events or performance criteria) to which the property is related shall be deemed to be not in compliance with the terms of the contract and not payable (if the property is part of or needed for performance), and the Contractor shall refund the related performance-based payments in accordance with paragraph (d) of this clause.
(6) When the Contractor completes all of the obligations under this contract, including liquidation of all performance-based payments, title shall vest in the Contractor for all property (or the proceeds thereof) not—
(i) Delivered to, and accepted by, the Government under this contract; or
(ii) Incorporated in supplies delivered to, and accepted by, the Government under this contract and to which title is vested in the Government under this clause.
(7) The terms of this contract concerning liability for Government-furnished property shall not apply to property to which the Government acquired title solely under this clause.
(g) Risk of loss. Before delivery to and acceptance by the Government, the Contractor shall bear the risk of loss for property, the title to which vests in the Government under this clause, except to the extent the Government expressly assumes the risk. If any property is damaged, lost, stolen, or destroyed, the basis of payment (the events or performance criteria) to which the property is related shall be deemed to be not in compliance with the terms of the contract and not payable (if the property is part of or needed for performance), and the Contractor shall refund the related performance-based payments in accordance with paragraph (d) of this clause.
(h) Records and controls. The Contractor shall maintain records and controls adequate for administration of this clause. The Contractor shall have no entitlement to performance-based payments during any time the Contractor’s records or controls are determined by the Contracting Officer to be inadequate for administration of this clause.
(i) Reports and Government access. The Contractor shall promptly furnish reports, certificates, financial statements, and other pertinent information requested by the Contracting Officer for the administration of this clause and to determine that an event or other criterion prompting a financing payment has been successfully accomplished. The Contractor shall give the Government reasonable opportunity to examine and verify the Contractor’s records and to examine and verify the Contractor’s performance of this contract for administration of this clause.
(j) Special terms regarding default. If this contract is terminated under the Default clause,
(1) the Contractor shall, on demand, repay to the Government the amount of unliquidated performance-based payments, and (2) title shall vest in the Contractor, on full liquidation of all performance-based payments, for all property for which the Government elects not to require delivery under the Default clause of this contract. The Government shall be liable for no payment except as provided by the Default clause.
(k) Reservation of rights.
(1) No payment or vesting of title under this clause shall—
(i) Excuse the Contractor from performance of obligations under this contract; or
(ii) Constitute a waiver of any of the rights or remedies of the parties under the contract.
(2) The Government’s rights and remedies under this clause—
(i) Shall not be exclusive, but rather shall be in addition to any other rights and remedies provided by law or this contract; and
(ii) Shall not be affected by delayed, partial, or omitted exercise of any right, remedy, power, or privilege, nor shall such exercise or any single exercise preclude or impair any further exercise under this clause or the exercise of any other right, power, or privilege of the Government.
(l) Content of Contractor's request for performance-based payment. The Contractor’s request for performance-based payment shall contain the following:
(1) The name and address of the Contractor;
(2) The date of the request for performance-based payment;
(3) The contract number and/or other identifier of the contract or order under which the request is made;
(4) Such information and documentation as is required by the contract’s description of the basis for payment; and
(5) A certification by a Contractor official authorized to bind the Contractor, as specified in paragraph (m) of this clause.
(m) Content of Contractor's certification. As required in paragraph (l)(5) of this clause, the Contractor shall make the following certification in each request for performance-based payment:
I certify to the best of my knowledge and belief that—
(1) This request for performance-based payment is true and correct; this request (and attachments) has been prepared from the books and records of the Contractor, in accordance with the contract and the instructions of the Contracting Officer;
(2) (Except as reported in writing on __________), all payments to subcontractors and suppliers under this contract have been paid, or will be paid, currently, when due in the ordinary course of business;
(3) There are no encumbrances (except as reported in writing on _________) against the property acquired or produced for, and allocated or properly chargeable to, the contract which would affect or impair the Government's title;
(4) There has been no materially adverse change in the financial condition of the Contractor since the submission by the Contractor to the Government of the most recent written information dated _____________; and
(5) After the making of this requested performance-based payment, the amount of all payments for each deliverable item for which performance-based payments have been requested will not exceed any limitation in the contract, and the amount of all payments under the contract will not exceed any limitation in the contract.
(End of clause)
"Title III industrial resource" means materials, services, processes, or manufacturing equipment (including the processes, technologies, and ancillary services for the use of such equipment) established or maintained under the authority of Title III, Defense Production Act (50 U.S.C. App. 2091-2093).
"Title III project contractor" means a contractor that has received assistance for the development or manufacture of an industrial resource under 50 U.S.C. App. 2091-2093, Defense Production Act.
(b) The Contractor shall refer any request from a Title III project contractor for testing and qualification of a Title III industrial resource to the Contracting Officer.
(c) Upon the direction of the Contracting Officer, the Contractor shall test Title III industrial resources for qualification. The Contractor shall provide the test results to the Defense Production Act Office, Title III Program, located at Wright Patterson Air Force Base, Ohio 45433-7739.
(d) When the Contracting Officer modifies the contract to direct testing pursuant to this clause, the Government will provide the Title III industrial resource to be tested and will make an equitable adjustment in the contract for the costs of testing and qualification of the Title III industrial resource.
(e) The Contractor agrees to insert the substance of this clause, including paragraph (e), in every subcontract issued in performance of this contract.
(a) Definitions. As used in this clause—
“Acceptance” means the act of an authorized representative of the Government by which the Government assumes for itself, or as an agent of another, ownership of existing and identified supplies, or approves specific services rendered, as partial or complete performance of the contract.
“Defect” means any condition or characteristic in any supplies or services furnished by the Contractor under the contract that is not in compliance with the requirements of the contract.
“Supplies” means the end items furnished by the Contractor and related services required under this contract. Except when this contract includes the clause entitled Warranty of Data, supplies also mean “data.”
(b) Contractor’s obligations.
(1) The Contractor’s warranties under this clause shall apply only to those defects discovered by either the Government or the Contractor within:
(i) the duration of any warranties for equipment or supplies provided to the Contractor by an Original Equipment Manufacturer or supplier that exceeds the warranty durations specified in paragraphs ii or iii, below;
(ii) 3 years for the hull;
(iii) 18 months or 900 hours of operation (as measured by the Engine Hours indicator required by paragraph 410-4 of Attachment 2 to Section J, the Statement of Work), whichever comes first, for all other items not specified as longer in paragraphs i or ii above.
(2) If the Contractor becomes aware at any time before acceptance by the Government (whether before or after tender to the Government) that a defect exists in any supplies or services, the Contractor shall—
(i) Promptly correct the defect; or
(ii) Promptly notify the Contracting Officer, in writing, of the defect, using the same procedures prescribed in paragraph (b)(3) of this clause.
(3) If the Contracting Officer determines that a defect exists in any of the supplies or services accepted by the Government under this contract, the Contracting Officer shall promptly notify the Contractor of the defect, in writing, within 45 days after discovery of the defect or, if Failure Analysis is required in accordance with SOW Section 080-2, 45 days after receipt of the Failure Analysis Report. Upon timely notification of the existence of a defect, or if the Contractor independently discovers a defect in accepted supplies or services, the Contractor shall submit to the Contracting Officer, in writing, within 24 hours, or as agreed to by the Contracting Officer, a recommendation for corrective actions, together with supporting information in sufficient detail for the Contracting Officer to determine what corrective action, if any, shall be undertaken.
(4) The Contractor shall promptly comply with any timely written direction from the Contracting Officer to correct or partially correct a defect, at no increase in the contract price.
(5) The Contractor shall also prepare and furnish to the Contracting Officer data and reports applicable to any correction required under this clause (including revision and updating of all other affected data called for under this contract) at no increase in the contract price.
(6) In the event of timely notice of a decision not to correct or only to partially correct, the Contractor shall submit a technical and cost proposal within 45 days to amend the contract to permit acceptance of the affected supplies or services in accordance with the revised requirement, and an equitable reduction in the contract price shall promptly be negotiated by the parties and be reflected in a supplemental agreement to this contract.
(7) Any supplies or parts thereof corrected or furnished in replacement and any services reperformed shall also be subject to the conditions of this clause to the same extent as supplies or services initially accepted. The warranty, with respect to these supplies, parts, or services, shall be equal in duration to that set forth in paragraph (b)(1) of this clause, and shall run from the date of delivery of the corrected or replaced supplies.
(8) The Contractor shall not be responsible under this clause for the correction of defects in Government-furnished property, except for defects in installation, unless the Contractor performs, or is obligated to perform, any modifications or other work on such property. In that event, the Contractor shall be responsible for correction of defects that result from the modifications or other work.
(9) If the Government returns supplies to the Contractor for correction or replacement under this clause, the Contractor shall be liable for transportation charges up to an amount equal to the cost of transportation by the usual commercial method of shipment from the place of delivery specified in this contract (irrespective of the f.o.b. point or the point of acceptance) to the Contractor’s plant and return to the place of delivery specified in this contract. The Contractor shall also bear the responsibility for the supplies while in transit.
(10) All implied warranties of merchantability and “fitness for a particular purpose” are excluded from any obligation under this contract.
(c) Remedies available to the Government.
(1) The rights and remedies of the Government provided in this clause—
(i) Shall not be affected in any way by any terms or conditions of this contract concerning the conclusiveness of inspection and acceptance; and
(ii) Are in addition to, and do not limit, any rights afforded to the Government by any other clause of this contract.
(2) Within 45 days after receipt of the Contractor’s recommendations for corrective action and adequate supporting information, the Contracting Officer, using sole discretion, shall give the Contractor written notice not to correct any defect, or to correct or partially correct any defect within a reasonable time at the delivery destination, unless otherwise agreed to by the Contracting Officer.
(3) In no event shall the Government be responsible for any extension or delays in the scheduled deliveries or periods of performance under this contract as a result of the Contractor’s obligations to correct defects, nor shall there be any adjustment of the delivery schedule or period of performance as a result of the correction of defects unless provided by a supplemental agreement with adequate consideration.
(4) This clause shall not be construed as obligating the Government to increase the contract price.
(5) (i) The Contracting Officer shall give the Contractor a written notice specifying any failure or refusal of the Contractor to—
(A) Present a detailed recommendation for corrective action as required by paragraph (b)(3) of this clause;
(B) Correct defects as directed under paragraph (b)(4) of this clause; or
(C) Prepare and furnish data and reports as required by paragraph (b)(5) of this clause.
(ii) The notice shall specify a period of time following receipt of the notice by the Contractor in which the Contractor must remedy the failure or refusal specified in the notice.
(6) If the Contractor does not comply with the Contracting Officer’s written notice in paragraph (c)(5)(i) of this clause, the Contracting Officer may by contract or otherwise—
(i) Obtain detailed recommendations for corrective action and either—
(A) Correct the supplies or services; or
(B) Replace the supplies or services, and if the Contractor fails to furnish timely disposition instructions, the Contracting Officer may dispose of the nonconforming supplies for the Contractor’s account in a reasonable manner, in which case the Government is entitled to reimbursement from the Contractor, or from the proceeds, for the reasonable expenses of care and disposition, as well as for excess costs incurred or to be incurred;
(ii) Obtain applicable data and reports; and
(iii) Charge the Contractor for the costs incurred by the Government.
(7) The Contractor shall be liable for the reasonable costs of disassembly and/or reassembly of larger items when it is necessary to remove the supplies to be inspected and/or returned for correction or replacement.
(End of clause)
(a) Prohibitions.
Section 835 of Public Law 107-296, prohibits the Department of Homeland Security from entering into any contract with a foreign incorporated entity after November 25, 2002, which is treated as an inverted domestic corporation as defined in this clause. The Secretary shall waive the prohibition with respect to any specific contract if the Secretary determines that the waiver is required in the interest of homeland security, or to prevent the loss of any jobs in the United States or prevent the Government from incurring any additional costs that otherwise would not occur.
(b) Definitions. As used in this clause:
“Expanded Affiliated Group” means an affiliated group as defined in section 1504(a) of the Internal Revenue Code of 1986 (without regard to section 1504(b) of such Code), 52-412-04-03 except that section 1504 of such Code shall be applied by substituting `more than 50 percent' for `at least 80 percent' each place it appears.
“Foreign Incorporated Entity” means any entity which is, or but for subsection (b) of Section 835 of the Homeland Security Act, Public Law 107-296, would be, treated as a foreign corporation for purposes of the Internal Revenue Code of 1986.
“Inverted Domestic Corporation.” A foreign incorporated entity shall be treated as an inverted domestic corporation if, pursuant to a plan (or a series of related transactions)—
(1) The entity completes after November 25, 2002, the direct or indirect acquisition of substantially all of the properties held directly or indirectly by a domestic corporation or
substantially all of the properties constituting a trade or business of a domestic partnership;
(2) After the acquisition at least 80 percent of the stock (by vote or value) of the entity is held—
(i) In the case of an acquisition with respect to a domestic corporation, by former shareholders of the domestic corporation by reason of holding stock in the domestic corporation; or
(ii) In the case of an acquisition with respect to a domestic partnership, by former partners of the domestic partnership by reason of holding a capital or profits interest in the domestic partnership; and
(3) The expanded affiliated group which after the acquisition includes the entity does not have substantial business activities in the foreign country in which or under the law of which the entity is created or organized when compared to the total business activities of such expanded affiliated group.
“Person”, “domestic”, and “foreign” have the meanings given such terms by paragraphs
(1), (4), and (5) of section 7701(a) of the Internal Revenue Code of 1986, respectively.
(c) Special rules. The following definitions and special rules shall apply when determining whether a foreign incorporated entity should be treated as an inverted domestic corporation.
(1) Certain Stock Disregarded. For the purpose of treating a foreign incorporated entity as an inverted domestic corporation these shall not be taken into account in determining ownership:
(i) stock held by members of the expanded affiliated group which includes the foreign incorporated entity; or
(ii) stock of such entity which is sold in a public offering related to the acquisition described in subsection (b)(1) of Section 835 of the Homeland Security Act, Public Law 107-296.
(2) Plan Deemed In Certain Cases. If a foreign incorporated entity acquires directly or indirectly substantially all of the properties of a domestic corporation or partnership during the 4-year period beginning on the date which is after the date of enactment of this Act and which is 2 years before the ownership requirements of subsection (b)(2) are met, such actions shall be treated as pursuant to a plan.
(3) Certain Transfers Disregarded. The transfer of properties or liabilities (including by contribution or distribution) shall be disregarded if such transfers are part of a plan a principal purpose of which is to avoid the purposes of this section.
(d) Special Rule For Related Partnerships. For purposes of applying Section 835(b) of Public Law 107-296 to the acquisition of a domestic partnership, except as provided in regulations, all domestic partnerships which are under common control (within the meaning of section 482 of the Internal Revenue Code of 1986) shall be treated as a partnership.
(e) Treatment of Certain Rights.
(1) Certain rights shall be treated as stocks to the extent necessary to reflect the present value of all equitable interests incident to the transaction, as follows:
(i) warrants;
(ii) options;
(iii) contracts to acquire stock;
(iv) convertible debt instruments; and
(v) others similar interests.
(2) Rights labeled as stocks shall not be treated as stocks whenever it is deemed appropriate to do so to reflect the present value of the transaction or to disregard transactions whose recognition would defeat the purpose of Section 835.
(f) Disclosure.
By signing and submitting its offer, an offeror under this solicitation represents that it not a foreign incorporated entity that should be treated as an inverted domestic corporation pursuant to the criteria of Section 835 of the Homeland Security Act, Public Law 107- 296 of November 25, 2002.
(g) If a waiver has been granted, a copy of the approved waiver shall be attached to the bid or proposal.
(End of provision)