NOTE: For supply-type contracts make last sentence read "make payment to the extent of 90% thereon."

(b) Payments on account of fixed fee. The fixed fee shall become due and payable in periodic installments in amounts based on the proportion of the work then completed as determined by the Contracting Officer. In making such periodic payments there shall be retained (10 or 15) percent from each payment which retained amounts shall be paid upon completion and acceptance of all work under this contract; provided, however, that the Contracting officer may at any time the amount of the retained fixed fee equals One Hundred Thousand Dollars ($100,000) make payments of any of the remaining periodic installments of the fixed fee in full.

(c) Audit Adjustments. At any time or times prior to settlement under this contract the Contracting Officer may have 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 Contracting Officer, 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.

(d) Completion voucher. 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 provisions relating to patents and provisions of (e) below) the 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 (b) 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 (unless within the year the Contracting Officer grants a further specific period of time) from the date of such completion.

(e) Applicable credits. 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.

(f) Financial settlement. 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

(2) 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:

(i) specified claims in stated amounts or in estimated amounts where the amounts are not susceptible of exact statement by the contractor;

(ii) claims, together with reasonable expenses incidental thereto, based upon liabilities of the contractor to third parties arising out of 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

(iii) claims for reimbursement of costs (other than expenses of the contractor by reason of any indemnification of the Government against patent liability), including reasonable expenses incidental thereto, incurred by the contractor under the provisions of this contract relating to patents.

[25 F.R. 8864, Sept. 15, 1960, as amended at 27 F.R. 7881, Aug. 9, 1962; 27 F.R. 11946, Dec. 4, 1962]

(a) Furnishing of Government Property. The Government reserves the right to furnish any property or services required for the performance of the work under this contract.

(b) Title to Property. Title to all property furnished by the Government shall remain in the Government except as otherwise provided in this article. Except as otherwise provided by the Contracting Officer, title to all materials, equipment, supplies, and tangible personal property of every kind and description purchased by the Contractor, for the cost of which the Contractor

is entitled to be reimbursed as a direct item of cost under this contract, shall pass directly from the vendor to the Government. The Government reserves the right to inspect, and to accept or reject, any item of such property.

The Contractor shall make such disposition of rejected items as the Contracting Officer shall direct. Title to other property, the cost of which is reimbursable to the Contractor under this contract, shall pass to and vest in the Government upon (i) issuance for use of such property in the performance of this contract, or (ii) commencement of processing or use of such property in the performance of this contract, or (iii) reimbursement of the cost thereof by the Government, whichever first occurs. Property furnished by the Government and property purchased or furnished by the Contractor, title to which vests in the Government, under this paragraph are hereinafter referred to as Government Property. Title to Government Property shall not be affected by the incorporation of the property into or the attachment of it to any property not owned by the Government, nor shall such Government Property, or any part thereof, be or become a fixture or lose its identity as personalty by reason of affixation to any realty. (c) Identification. To the extent directed by the Contracting Officer, the Contractor shall identify Government Property coming into the Contractor's possession or custody by marking or segregating in such a way, satisfactory to the Contracting Officer, as shall indicate its ownership by the Government.

(d) Disposition. The Contractor shall make such disposition of Government Property which has come into the possession or custody of the Contractor under this contract as the Contracting Officer shall direct. When authorized in writing by the Contracting Officer during the progress of the work or upon completion or termination of this contract, the Contractor may, upon such terms and conditions as the Contracting Officer may approve, sell or exchange such property, or acquire such property at a price agreed upon by the Contracting Officer and the Contractor as the fair value thereof. The amount received by the Contractor as the result of any disposition, or the amount of the agreed fair value of any such property acquired by the Contractor, shall be applied in reduction of cost allowable under this contract, or shall be otherwise credited to account of the Government, as the Contracting Officer may direct.

Upon completion of the work or the termination of this contract, the Contractor shall render an accounting, as prescribed by the Contracting Officer, of all Government Property which had come into the possession or custody of the Contractor under this contract.

(e) Protection of Government PropertyClassified Materials. The Contractor shall take all reasonable precautions, as directed

by the Contracting Officer, or in the absence of such directions in accordance with sound industrial practice, to safeguard and protect Government Property in the Contractor's possession or custody. Special measures shall be taken by the Contractor in the protection of and accounting for any classified or special materials involved in the performance of this contract, in accordance with the regulations and requirements of the Commission.

(f) Risk of Loss of Government Property. The Contractor shall not be liable for loss or destruction of or damage to Government Property in the Contractor's possession unless such loss, destruction or damage results from wilful misconduct or lack of good faith on the part of the Contractor's managerial personnel, or unless such loss, destruction or damage results from a failure on the part of the Contractor's managerial personnel, to take all reasonable steps to comply with any appropriate written directives of the Contracting Officer to safeguard such property under paragraph (e) hereof. The term 'Contractor's managerial personnel' as used herein means the Contractor's directors, officers and 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 (2) all or substantially all of the Contractor's operation at any one plant or separate location at which this contract is being performed; or (3) a separate and complete major industrial operation in connection with the performance of this contract; or (4) a separate and complete major construction, alteration or repair operation in connection with performance of this contract.

(g) Steps To Be Taken in Event of Loss. Upon the happening of any loss or destruction of or damage to Government Property in the possession or custody of the Contractor, the Contractor shall immediately inform the Contracting Officer of the occasion and extent thereof, shall take all reasonable steps to protect the property remaining, and shall repair or replace the lost, destroyed, or damaged property, if and as directed by the Contracting Officer, but shall take no action prejudicial to the right of the Government to recover therefor and shall furnish to the Government, on request, all reasonable assistance in obtaining recovery.

(h) Government Property for Government Use Only. Government Property shall be used only for the performance of this contract.

[26 F.R. 11489, Dec. 5, 1961, as amended at 27 F.R. 7881, Aug. 9, 1962; 27 F.R. 11947, Dec. 4, 1962]

§ 9-7.5006-27 Property (fixed price). (a) (1) (For use in contracts involving Government-furnished property.) The delivery (construction) schedules set forth in this contract are based upon the expectation that the Government-furnished property re

the event that such Government-furnished property is not delivered to the Contractor by such time, the Contracting Officer shall, if requested by the Contractor, determine if any delay has been occasioned the Contractor thereby, and if so shall grant a reasonable extension of the time for completion of performance. The Government shall not be liable to the Contractor for damages or loss of profit by reason of any delay in delivery of said Government-furnished property, except that in case of such delay, upon written request of the Contractor, an equitable adjustment shall be made in the delivery (construction) schedule of this contract, or price, or both, and in other contractual provisions affected thereby, in accordance with the procedures provided for in the article entitled "Changes."

(2) (For use in contracts involving Contractor-acquired property.) In connection with its work under this contract, the Contractor shall, within acquire or manufacture for the Government's account the property listed in Schedule attached hereto (hereinafter referred to as Contractor-acquired property). Such property shall be installed by the Contractor in

or, if approved in writing by the Contracting Officer, in the plants of subcontractors. The Contractor shall insert provisions in all subcontracts under which such property is furnished to the subcontractors whereby there will be made applicable to the Government and the subcontractors substantially the same rights and obligations in respect to such property as are made applicable to the Government and the Contractor under this article.

(b) Title to all Government-furnished or Contractor-acquired property shall remain in the Government. Title thereto shall not be affected by the incorporation or attachment thereof to any property not owned by the Government, nor shall any such property, or any part thereof, be or become a fixture or lose its identity as personalty by reason of affixation to any realty. The Contractor shall maintain adequate property control records of such property consistent with good business practice and as may be prescribed by the Contracting Officer; and shall cause all such property to be clearly marked (if not so marked) to show that it is property of the Government.

(c) Government-furnished or Contractoracquired property shall be used only for the performance of this contract.

(d) The Contractor shall, in accordance with sound industrial practice and without additional cost to the Government, maintain in operating condition, repair, protect, and preserve such Government-furnished or Contractor-acquired property until disposed of by the Contractor in accordance with this article. Should any replacement of any such property become necessary during the term of this contract other than by reason of the

negligence or fault of the Contractor, the same shall be made by the Contractor at the direction of and for the account of the Commission and the title thereto shall vest in the Government and any delay occasioned thereby shall be considered an excusable delay under this contract.

or

(e) (1) Except for loss or destruction of, or damage to, Government-furnished Contractor-acquired property resulting from a failure of the Contractor, due to wilful misconduct or lack of good faith of the Contractor's managerial personnel to maintain in operating condition, repair, protect, and preserve such property as required by subparagraph (d) hereof, the Contractor shall not be liable for loss or destruction of, or damage to, such property (i) caused by any peril while the property is in transit off the Contractor's premises, or (ii) caused by any of the following perils while the property is on the Contractor's premises, or on any other premises where such property may properly be located, or by removal therefrom because of any of the following perils:

"Fire; lightning; windstorm; cyclone; tornado; hail; explosion; riot attending a strike; civil commotion; vandalism and malicious mischief; aircraft or objects falling therefrom; vehicles running on land or tracks (excluding vehicles owned or operated by the Contractor or any agent or employee of the Contractor); smoke; sprinkler leakage; earthquake or volcanic eruption; flood, meaning thereby rising of rivers or streams; enemy attack or any action by the military, navy, or air forces of the United States in resisting enemy attack."

The perils as set forth above the hereinafter called "excepted perils." The term "Contractor's managerial personnel," as used in this article, means the Contractor's directors, officers, and such of its managers, superintendents, or other equivalent representatives who have supervision or direction of (i) all of or substantially all of the Contractor's business; or (ii) all or substantially all of the Contractor's operation at any one plant or separate location at which the work is being performed; or (iii) a separate or complete major industrial operation in connection with performance of the contract; or (iv) a separate and complete major construction, alteration, or repair operation in connection with performance of the

contract.

(2) Upon the happening of loss or destruction of, or damage to, Government-furnished or Contractor-acquired property, the Contractor shall communicate with the Contracting Officer and shall take all reasonable steps to protect such property, put all such property in the best possible order, and furnish to the Contracting Officer a statement of (i) the lost, destroyed, and damaged Government-furnished or Contractor-acquired property, (ii) the time and origin of the loss, destruction, or damage, (iii) all known interests in the commingled prop

erty of which such is a part, and (iv) the insurance, if any, covering any part of or interest in such commingled property.

(3) With the approval of the Contracting Officer after loss or destruction of, or damage to, the Government-furnished or Contractoracquired property, and subject to such conditions and limitations as may be imposed by the Contracting Officer, the Contractor shall, in order to minimize the loss to the Government or in order to permit resumption of business or the like, sell for the account of the Government, any item of such property which has been damaged beyond practicable repair, or which is so commingled or combined with property of others, including the Contractor, that separation is impracticable.

(4) Except to the extent of any loss or destruction, or damage to, Government-furnished or Contractor-acquired property for which the Contractor is relieved of liability under the foregoing provisions of this paragraph, and except for reasonable wear and tear or depreciation, or the utilization or disposition of such property in accordance with the provisions of this contract, the property shall be returned to the Government in as good condition as when received by the Contractor.

(5) In the event the Contractor is indemnified, reimbursed, or compensated for any loss or destruction of, or damage to Government-furnished or Contractor-acquired property caused by an excepted peril, it shall equitably reimburse the Government. The Contractor shall do nothing to prejudice the Government's rights to recover against third parties for any such loss, destruction or damage and upon the request of the Contracting Officer shall, at the Government's expense, furnish to the Government all reasonable assistance and cooperation (including the prosecution of suits, and the execution of instructions of assignment in favor of the Government) in obtaining recovery. [Note A.]

(f) The Government shall at all times have access to the premises wherein any Government-furnished or Contractor-acquired property is located.

(g) Upon the completion of this contract, the Contractor shall submit, in a form acceptable to the Contracting Officer, inventory schedules covering all items of Governmentfurnished or Contractor-acquired property not consumed in the performance of this contract (including any resulting scrap), or not theretofore delivered to the Government, and shall hold the same at no charge to the Commission for a period of sixty days, unless the period of time is extended by mutual agreement. At the expiration of such period or upon the Contracting Officer's earlier order the Contractor shall dismantle, prepare for shipment and shall store or deliver said property to the Commission on cars or trucks at Contractor's plant at the expense of the Commission, or make such other disposal of

said property as may be directed by the Contracting Officer. The net proceeds of any such disposal shall be credited to the contract price or shall be paid over as the Contracting Officer may direct.

NOTE A: Paragraph (e) as set forth above should be used in negotiated fixed-price contracts and subcontracts where it can be determined and the Contractor or subcontractor represents that the contract price includes no charge or reserve for insurance (including self insurance) covering damage to Government property (a) caused by any peril while the property is in transit off the Contractor's premises or (b) caused by any of the excepted perils enumerated in the contract. In all other negotiated fixed-price contracts and in formally advertised contracts, the following paragraph should be substituted for paragraph (e):

"Unless otherwise provided in this contract, the Contractor assumes the risk of and shall be responsible for any loss of or damage to Government-furnished property or Contractor-acquired property in its possession, except for reasonable wear and tear and except to the extent that such property is consumed in the performance of this contract." [26 F.R. 11490, Dec. 5, 1961, as amended at 27 F.R. 7881, Aug. 9, 1962]

(a) When subcontracts are authorizedRequirements applicable to subcontracts and purchase orders. The contractor shall, when ordered by the Contracting Officer, and may, but only when authorized by the Contracting Officer, enter into subcontracts in writing for the performance of any part of the work described in the clause entitled "Statement of Work" under this contract. Purchase orders shall not be entered into by the contractor for items whose purchase is expressly prohibited by the written directions of the Contracting Officer. All subcontracts for the performance of the work described in the clause entitled "Statement of Work" shall be submitted to the Contracting Officer for approval. The Government reserves the right at any time to require that the contractor submit any or all other contractual arrangements, including but not limited to purchase orders or classes of purchase orders, for approval and provide information concerning methods, practices and procedures used or proposed to be used in subcontracting and purchasing. The contractor shall use methods, practices, or procedures in subcontracting and purchasing which are acceptable to the Commission. Subcontracts and purchase orders (Note A) shall be made in the name of the contractor, shall not bind nor purport to bind the Government, shall not relieve the contractor of any obligation under this contract (including, among other things, the obligation prop