[Title 48 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 1998 Edition]
[From the U.S. Government Printing Office]


          48



          Federal Acquisition Regulations System



[[Page i]]

          CHAPTER 1 (Parts 52 to 99)

                         Revised as of October 1, 1998

          CONTAINING
          A CODIFICATION OF DOCUMENTS
          OF GENERAL APPLICABILITY
          AND FUTURE EFFECT

          AS OF OCTOBER 1, 1998
          With Ancillaries
          Published by
          the Office of the Federal Register
          National Archives and Records
          Administration

          as a Special Edition of
          the Federal Register



[[Page ii]]

                                      




                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 1998



               For sale by U.S. Government Printing Office
 Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20402-9328



[[Page iii]]




                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 48:
          Chapter 1--Federal Acquisition Regulation 
          (Continued)                                                3
  Finding Aids:
      Table of CFR Titles and Chapters........................     567
      Alphabetical List of Agencies Appearing in the CFR......     585
      Table of OMB Control Numbers............................     595
      List of CFR Sections Affected...........................     599



[[Page iv]]


      


                     ----------------------------

                     Cite this Code:  CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 48 CFR 52.000 refers 
                       to title 48, part 52, 
                       section 000.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, October 1, 1998), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 1986, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, or 1973-1985, published in seven separate volumes. For 
the period beginning January 1, 1986, a ``List of CFR Sections 
Affected'' is published at the end of each CFR volume.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I), and Acts Requiring Publication 
in the Federal Register (Table II). A list of CFR titles, chapters, and 
parts and an alphabetical list of agencies publishing in the CFR are 
also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-523-5227 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, Washington, DC 20408 or e-mail 
info@fedreg.nara.gov.

SALES

    The Government Printing Office (GPO) processes all sales and 
distribution of the CFR. For payment by credit card, call 202-512-1800, 
M-F 8 a.m. to 4 p.m. e.s.t. or fax your order to 202-512-2233, 24 hours 
a day. For payment by check, write to the Superintendent of Documents, 
Attn: New Orders, P.O. Box 371954, Pittsburgh, PA 15250-7954. For GPO 
Customer Service call 202-512-1803.

ELECTRONIC SERVICES

    The full text of the Code of Federal Regulations, The United States 
Government Manual, the Federal Register, Public Laws, Weekly Compilation 
of Presidential Documents and the Privacy Act Compilation are available 
in electronic format at www.access.gpo.gov/nara (``GPO Access''). For 
more information, contact Electronic Information Dissemination Services, 
U.S. Government Printing Office. Phone 202-512-1530, or 888-293-6498 
(toll-free). E-mail, gpoaccess@gpo.gov.

[[Page vii]]

    The Office of the Federal Register also offers a free service on the 
National Archives and Records Administration's (NARA) World Wide Web 
site for public law numbers, Federal Register finding aids, and related 
information. Connect to NARA's web site at www.nara.gov/fedreg. The NARA 
site also contains links to GPO Access.

                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

October 1, 1998.



[[Page ix]]



                               THIS TITLE

    Title 48--Federal Acquisition Regulations System is composed of 
eight volumes. The chapters in these volumes are arranged as follows: 
Chapter 1 (parts 1 to 51), chapter 1 (parts 52 to 99), chapter 2 (parts 
201 to 299), chapters 3 to 6, chapters 7 to 14, chapters 15 to 28 and 
chapter 29 to end. The contents of these volumes represent all current 
regulations codified under this title of the CFR as of October 1, 1998.

    The Federal acquisition regulations in chapter 1 are those 
government-wide acquisition regulations jointly issued by the General 
Services Administration, the Department of Defense, and the National 
Aeronautics and Space Administration. Chapters 2 through 99 are 
acquisition regulations issued by individual government agencies. Parts 
1 to 69 in each of chapters 2 through 99 are reserved for agency 
regulations implementing the Federal acquisition regulations in chapter 
1 and are numerically keyed to them. Parts 70 to 99 in chapters 2 
through 99 contain agency regulations supplementing the Federal 
acquisition regulations.

    The OMB control numbers for the Federal Acquisition Regulations 
System appear in section 1.106 of chapter 1. For the convenience of the 
user section 1.106 is reprinted in the Finding Aids section of the 
second volume containing chapter 1 (parts 52 to 99).

    The first volume, containing chapter 1 (parts 1 to 51), includes an 
index to the Federal acquisition regulations.

    For this volume, Kenneth R. Payne was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Frances D. McDonald, assisted by Alomha S. Morris.

[[Page x]]





[[Page 1]]



            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM




             (This book contains chapter 1, parts 52 to 99)

  --------------------------------------------------------------------
                                                                    Part

chapter 1--Federal Acquisition Regulation (Continued).......          52

[[Page 3]]



          CHAPTER 1--FEDERAL ACQUISITION REGULATION (Continued)




  --------------------------------------------------------------------

                     SUBCHAPTER H--CLAUSES AND FORMS

Part                                                                Page
52              Solicitation provisions and contract clauses           5
53              Forms.......................................         386
54-99

[Reserved]

[[Page 5]]



                     SUBCHAPTER H--CLAUSES AND FORMS





PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES--Table of Contents




Sec.
52.000  Scope of part.

       Subpart 52.1--Instructions for Using Provisions and Clauses

52.100  Scope of subpart.
52.101  Using part 52.
52.102  Incorporating provisions and clauses.
52.103  Identification of provisions and clauses.
52.104  Procedures for modifying and completing provisions and clauses.
52.105  Procedures for using alternates.
52.106  [Reserved]
52.107  Provisions and clauses prescribed in subpart 52.1.

              Subpart 52.2--Texts of Provisions and Clauses

52.200  Scope of subpart.
52.201  [Reserved]
52.202-1  Definitions.
52.203-1  [Reserved]
52.203-2  Certificate of Independent Price Determination.
52.203-3  Gratuities.
52.203-4  [Reserved]
52.203-5  Covenant Against Contingent Fees.
52.203-6  Restrictions on Subcontractor Sales to the Government.
52.203-7  Anti-Kickback Procedures.
52.203-8  Cancellation, Rescission, and Recovery of Funds for Illegal or 
          Improper Activity.
52.203-9  [Reserved]
52.203-10  Price or Fee Adjustment for Illegal or Improper Activity.
52.203-11  Certification and Disclosure Regarding Payments to Influence 
          Certain Federal Transactions.
52.203-12  Limitation on Payments to Influence Certain Federal 
          Transactions.
52.204-1  Approval of Contract.
52.204-2  Security Requirements.
52.204-3  Taxpayer Identification.
52.204-4  Printing/Copying Double-Sided on Recycled Paper.
52.204-5  Women-Owned Business.
52.204-6  Data Universal Numbering System (DUNS) Number.
52.205--52.206  [Reserved]
52.207-1  Notice of Cost Comparison (Sealed-Bid).
52.207-2  Notice of Cost Comparison (Negotiated).
52.207-3  Right of First Refusal of Employment.
52.207-4  Economic Purchase Quantity--Supplies.
52.207-5  Option to Purchase Equipment.
52.208-1--52.208-3  [Reserved]
52.208-4  Vehicle Lease Payments.
52.208-5  Condition of Leased Vehicles.
52.208-6  Marking of Leased Vehicles.
52.208-7  Tagging of Leased Vehicles.
52.208-8  Helium Requirement Forecast and Required Sources for Helium.
52.208-9  Contractor Use of Mandatory Sources of Supply.
52.209-1  Qualification Requirements.
52.209-3  First Article Approval--Contractor Testing.
52.209-4  First Article Approval--Government Testing.
52.209-5  Certification Regarding Debarment, Suspension, Proposed 
          Debarment, and Other Responsibility Matters.
52.209-6  Protecting the Government's Interest When Subcontracting With 
          Contractors Debarred, Suspended, or Proposed for Debarment.
52.211-1  Availability of Specifications Listed in the GSA Index of 
          Federal Specifications, Standards and Commercial Item 
          Descriptions, FPMR Part 101-29..
52.211-2  Availability of Specifications Listed in the DOD Index of 
          Specifications and Standards (DODISS) and Descriptions Listed 
          in the Acquisition Management Systems and Data Rquirements 
          Control List, DoD 5010.12-L.
52.211-3  Availability of Specifications Not Listed in the GSA Index of 
          Federal Specifications, Standards and Commercial Item 
          Descriptions.
52.211-4  Availability for Examination of Specifications Not Listed in 
          the GSA Index of Federal Specifications, Standards and 
          Commercial Item Descriptions.
52.211-5  Material Requirements.
52.211-6--52.5211-7  [Reserved]
52.211-8  Time of Delivery.
52.211-9  Desired and Required Time of Delivery.
52.211-10  Commencement, Prosecution, and Completion of Work.
52.211-11  Liquidated Damages--Supplies, Services, or Research and 
          Development.
52.211-12  Liquidated Damages--Construction.
52.211-13  Time Extensions.
52.211-14  Notice of Priority Rating for National Defense Use.
52.211-15  Defense Priority and Allocation Requirements.
52.211-16  Variation in Quantity.
52.211-17  Delivery of Excess Quantities.

[[Page 6]]

52.211-18  Variation in Estimated Quantity.
52.212-1  Instructions to Offerors--Commercial Items.
52.212-2  Evaluation--Commercial Items.
52.212-3  Offeror Representations and Certifications--Commercial Items.
52.212-4  Contract Terms and Conditions--Commercial Items.
52.212-5  Contract Terms and Conditions Required to Implement Statutes 
          or Executive Orders--Commercial Items.
52.213-1  Fast Payment Procedure.
52.213-2  Invoices.
52.213-3  Notice to Supplier.
52.213-4  Terms and Conditions--Simplified Acquisitions (Other Than 
          Commercial Items).
52.214-1  Solicitation Definitions--Sealed Bidding.
52.214-2  Type of Business Organization--Sealed Bidding.
52.214-3  Amendments to Invitations for Bids.
52.214-4  False Statements in Bids.
52.214-5  Submission of Bids.
52.214-6  Explanation to Prospective Bidders.
52.214-7  Late Submissions, Modifications, and Withdrawals of Bids.
52.214-8  [Reserved]
52.214-9  Failure to Submit Bid.
52.214-10  Contract Award--Sealed Bidding.
52.214-11  [Reserved]
52.214-12  Preparation of Bids.
52.214-13  Telegraphic Bids.
52.214-14  Place of Performance--Sealed Bidding.
52.214-15  Period for Acceptance of Bids.
52.214-16  Minimum Bid Acceptance Period.
52.214-17  Affiliated Bidders.
52.214-18  Preparation of Bids--Construction.
52.214-19  Contract Award--Sealed Bidding--Construction.
52.214-20  Bid Samples.
52.214-21  Descriptive Literature.
52.214-22  Evaluation of Bids for Multiple Awards.
52.214-23  Late Submissions, Modifications, and Withdrawals of Technical 
          Proposals Under Two-Step Sealed Bidding.
52.214-24  Multiple Technical Proposals.
52.214-25  Step Two of Two-Step Sealed Bidding.
52.214-26  Audit and Records--Sealed Bidding.
52.214-27  Price Reduction for Defective Cost or Pricing Data--
          Modifications--Sealed Bidding.
52.214-28  Subcontractor Cost or Pricing Data--Modifications--Sealed 
          Bidding.
52.214-29  Order of Precedence--Sealed Bidding.
52.214-30  Annual Representations and Certifications--Sealed Bidding.
52.214-31  Facsimile Bids.
52.214-32  Late Submissions, Modifications, and Withdrawals of Bids 
          (Overseas).
52.214-33  Late Submissions, Modifications, and Withdrawals of Technical 
          Proposals Under Two-Step Sealed Bidding (Overseas).
52.214-34  Submission of Offers in the English Language.
52.214-35  Submission of Offers in U.S. Currency.
52.215-1  Instructions to Offerors--Competitive Acquisition.
52.215-2  Audit and Records--Negotiation.
52.215-3  Request for Information or Solicitation for Planning Purposes.
52.215-4  Type of Business Organization.
52.215-5  Facsimile Proposals.
52.215-6  Place of Performance.
52.215-7  Annual Representations and Certifications--Negotiation.
52.215-8  Order of Precedence--Uniform Contract Format.
52.215-9  Changes or Additions to Make-or-Buy Program.
52.215-10  Price Reduction for Defective Cost or Pricing Data.
52.215-11  Price Reduction for Defective Cost or Pricing Data--
          Modifications.
52.215-12  Subcontractor Cost or Pricing Data.
52.215-13  Subcontractor Cost or Pricing Data--Modifications.
52.215-14  Integrity of Unit Prices.
52.215-15  Termination of Defined Benefit Pension Plans.
52.215-16  Facilities Capital Cost of Money.
52.215-17  Waiver of Facilities Capital Cost of Money.
52.215-18  Reversion or Adjustment of Plans for Postretirement Benefits 
          (PRB) Other Than Pensions.
52.215-19  Notification of Ownership Changes.
52.215-20  Requirements for Cost or Pricing Data or Information Other 
          Than Cost or Pricing Data.
52.215-21  Requirements for Cost or Pricing Data or Information Other 
          Than Cost or Pricing Data--Modifications.
52.215-22--52.215-42  [Reserved]
52.216-1  Type of Contract.
52.216-2  Economic Price Adjustment--Standard Supplies.
52.216-3  Economic Price Adjustment--Semistandard Supplies.
52.216-4  Economic Price Adjustment--Labor and Material.
52.216-5  Price Redetermination--Prospective.
52.216-6  Price Redetermination--Retroactive.
52.216-7  Allowable Cost and Payment.
52.216-8  Fixed Fee.
52.216-9  Fixed Fee--Construction.
52.216-10  Incentive Fee.
52.216-11  Cost Contract--No Fee.
52.216-12  Cost-Sharing Contract--No Fee.
52.216-13  Allowable Cost and Payment--Facilities.

[[Page 7]]

52.216-14  Allowable Cost and Payment--Facilities Use.
52.216-15  Predetermined Indirect Cost Rates.
52.216-16  Incentive Price Revision--Firm Target.
52.216-17  Incentive Price Revision--Successive Targets.
52.216-18  Ordering.
52.216-19  Order Limitations.
52.216-20  Definite Quantity.
52.216-21  Requirements.
52.216-22  Indefinite Quantity.
52.216-23  Execution and Commencement of Work.
52.216-24  Limitation of Government Liability.
52.216-25  Contract Definitization.
52.216-26  Payments of Allowable Costs Before Definitization.
52.216-27  Single or Multiple Awards.
52.216-28  Multiple Awards for Advisory and Assistance Services.
52.217-1  [Reserved]
52.217-2  Cancellation Under Multiyear Contracts.
52.217-3  Evaluation Exclusive of Options.
52.217-4  Evaluation of Option Exercised at Time of Contract Award.
52.217-5  Evaluation of Options.
52.217-6  Option for Increased Quantity.
52.217-7  Option for Increased Quantity--Separately Priced Line Item.
52.217-8  Option to Extend Services.
52.217-9  Option to Extend the Term of the Contract.
52.218  [Reserved]
52.219-1  Small Business Program Representations.
52.219-2  Equal Low Bids.
52.219-3--52.219-5  [Reserved]
52.219-6  Notice of Total Small Business Set-Aside.
52.219-7  Notice of Partial Small Business Set-Aside.
52.219-8  Utilization of Small, Small Disadvantaged and Women-Owned 
          Small Business Concerns.
52.219-9  Small, Small Disadvantaged and Women-Owned Small Business 
          Subcontracting Plan.
52.219-10  Incentive Subcontracting Program.
52.219-11  Special 8(a) Contract Conditions.
52.219-12  Special 8(a) Subcontract Conditions.
52.219-13  [Reserved]
52.219-14  Limitations on Subcontracting.
52.219-15  [Reserved]
52.219-16  Liquidated Damages--Subcontracting Plan.
52.219-17  Section 8(a) Award.
52.219-18  Notification of Competition Limited to Eligible 8(a) 
          Concerns.
52.219-19  Small Business Concern Representation for the Small Business 
          Competitiveness Demonstration Program.
52.219-20  Notice of Emerging Small Business Set-Aside.
52.219-21  Small Business Size Representation for Targeted Industry 
          Categories Under the Small Business Competitiveness 
          Demonstration Program.
52.219-22  Small Disadvantaged Business Status.
52.219-23  Notice of Price Evaluation Adjustment for Small Disadvantaged 
          Business Concerns.
52.219-24  Small Disadvantaged Business Participation Program--Targets.
52.219-25  Small Disadvantaged Business Participation Program--
          Disadvantaged Status and Reporting.
52.219-26  Small Disadvantaged Business Participation Program--Incentive 
          Subcontracting.
52.221  [Reserved]
52.222-1  Notice to the Government of Labor Disputes.
52.222-2  Payment for Overtime Premiums.
52.222-3  Convict Labor.
52.222-4  Contract Work Hours and Safety Standards Act--Overtime 
          Compensation.
52.222-5  [Reserved]
52.222-6  Davis-Bacon Act.
52.222-7  Withholding of Funds.
52.222-8  Payrolls and Basic Records.
52.222-9  Apprentices and Trainees.
52.222-10  Compliance With Copeland Act Requirements.
52.222-11  Subcontracts (Labor Standards).
52.222-12  Contract Termination--Debarment.
52.222-13  Compliance With Davis-Bacon and Related Act Regulations.
52.222-14  Disputes Concerning Labor Standards.
52.222-15  Certification of Eligibility.
52.222-16  Approval of Wage Rates.
52.222-17  Labor Standards for Construction Work--Facilities Contracts.
52.222-18--52.222-19  [Reserved]
52.222-20  Walsh-Healey Public Contracts Act.
52.222-21  Certification of Nonsegregated Facilities.
52.222-22  Previous Contracts and Compliance Reports.
52.222-23  Notice of Requirement for Affirmative Action to Ensure Equal 
          Employment Opportunity.
52.222-24  Preaward On-Site Equal Opportunity Compliance Review.
52.222-25  Affirmative Action Compliance.
52.222-26  Equal Opportunity.
52.222-27  Affirmative Action Compliance Requirements for Construction.
52.222-28  Equal Opportunity Preaward Clearance of Subcontracts.
52.222-29  Notification of Visa Denial.
52.222-30--52.222-34  [Reserved]
52.222-35  Affirmative Action for Disabled Veterans and Veterans of the 
          Vietnam Era.

[[Page 8]]

52.222-36  Affirmative Action for Workers With Disabilities.
52.222-37  Employment Reports on Disabled Veterans and Veterans of the 
          Vietnam Era.
52.222-38--52.222-40  [Reserved]
52.222-41  Service Contract Act of 1965, as Amended.
52.222-42  Statement of Equivalent Rates for Federal Hires.
52.222-43  Fair Labor Standards Act and Service Contract Act--Price 
          Adjustment (Multiple Year and Option Contracts).
52.222-44  Fair Labor Standards Act and Service Contract Act--Price 
          Adjustment.
52.222-45  [Reserved]
52.222-46  Evaluation of Compensation for Professional Employees.
52.222-47  SCA Minimum Wages and Fringe Benefits Applicable to Successor 
          Contract Pursuant to Predecessor Contractor Collective 
          Bargaining Agreements (CBA).
52.222-48  Exemption From Application of Service Contract Act Provisions 
          for Contracts for Maintenance, Calibration, and/or Repair of 
          Certain Information Technology, Scientific and Medical and/or 
          Office and Business Equipment--Contractor Certification.
52.222-49  Service Contract Act--Place of Performance Unknown.
52.222-50  Nondisplacement of Qualified Workers.
52.223-1  Clean Air and Water Certification.
52.223-2  Clean Air and Water.
52.223-3  Hazardous Material Identification and Material Safety Data.
52.223-4  Recovered Material Certification.
52.223-5  Pollution Prevention and Right-to-Know Information.
52.223-6  Drug-Free Workplace.
52.223-7  Notice of radioactive materials.
52.223-8  [Reserved]
52.223-9  Certification and Estimate of Percentage of Recovered Material 
          Content for EPA Designated Items.
52.223-10  Waste Reduction Program.
52.223-11  Ozone-Depleting Substances.
52.223-12  Refrigeration Equipment and Air Conditioners.
52.223-13  Certification of Toxic Chemical Release Reporting.
52.223-14  Toxic Chemical Release Reporting.
52.224-1  Privacy Act Notification.
52.224-2  Privacy Act.
52.225-1  Buy American Certificate.
52.225-2  Waiver of Buy American Act for Civil Aircraft and Related 
          Articles.
52.225-3  Buy American Act--Supplies.
52.225-4  Evaluation of Foreign Currency Offers.
52.225-5  Buy American Act--Construction Materials.
52.225-6  Balance of Payments Program Certificate.
52.225-7  Balance of Payments Program.
52.225-8  Buy American Act--Trade Agreements--Balance of Payments 
          Program Certificate.
52.225-9  Buy American Act--Trade Agreements--Balance of Payments 
          Program.
52.225-10  Duty-Free Entry.
52.225-11  Restrictions on Certain Foreign Purchases.
52.225-12  Notice of Buy American Act Requirement--Construction 
          Materials
52.225-13  Notice of Buy American Act Requirement--Construction 
          Materials Under Trade Agreements Act and North American Free 
          Trade Agreement
52.225-14  Inconsistency Between English Version and Translation of 
          Contract.
52.225-15  Buy American Act--Construction Materials Under Trade 
          Agreements Act and North American Free Trade Agreement.
52.225-16--52.225-17  [Reserved]
52.225-18  European Union Sanction for End Products.
52.225-19  European Union Sanction for Services.
52.225-20  Buy American Act--North American Free Trade Agreement 
          Implementation Act--Balance of Payments Program Certificate.
52.225-21  Buy American Act--North American Free Trade Agreement 
          Implementation Act--Balance of Payments Program.
52.225-22  Balance of Payments Program--Construction Materials--NAFTA.
52.226  [Reserved]
52.226-1  Utilization of Indian Organizations and Indian-Owned Economic 
          Enterprises.
52.226-2  Historically Black College or University and Minority 
          Institution Representation.
52.227-1  Authorization and Consent.
52.227-2  Notice and Assistance Regarding Patent and Copyright 
          Infringement.
52.227-3  Patent Indemnity.
52.227-4  Patent Indemnity--Construction Contracts.
52.227-5  Waiver of Indemnity.
52.227-6  Royalty Information.
52.227-7  Patents--Notice of Government Licensee.
52.227-8  [Reserved]
52.227-9  Refund of Royalties.
52.227-10  Filing of Patent Applications--Classified Subject Matter.
52.227-11  Patent Rights--Retention by the Contractor (Short Form).
52.227-12  Patent Rights--Retention by the Contractor (Long Form).
52.227-13  Patent Rights--Acquisition by the Government.
52.227-14  Rights in Data--General.
52.227-15  Representation of Limited Rights Data and Restricted Computer 
          Software.
52.227-16  Additional Data Requirements.
52.227-17  Rights in Data--Special Works.
52.227-18  Rights in Data--Existing Works.

[[Page 9]]

52.227-19  Commercial Computer Software--Restricted Rights.
52.227-20  Rights in Data--SBIR Program.
52.227-21  Technical Data Declaration, Revision, and Withholding of 
          Payment--Major Systems.
52.227-22  Major System--Minimum Rights.
52.227-23  Rights to Proposal Data (Technical).
52.228-1  Bid Guarantee.
52.228-2  Additional Bond Security.
52.228-3  Workers' Compensation Insurance (Defense Base Act).
52.228-4  Workers' Compensation and War-Hazard Insurance Overseas.
52.228-5  Insurance--Work on a Government Installation.
52.228-6  [Reserved]
52.228-7  Insurance--Liability to Third Persons.
52.228-8  Liability and Insurance--Leased Motor Vehicles.
52.228-9  Cargo Insurance.
52.228-10  Vehicular and General Public Liability Insurance.
52.228-11  Pledges of Assets.
52.228-12  Prospective Subcontractor Requests for Bonds.
52.228-13  Alternative Payment Protections.
52.228-14  Irrevocable Letter of Credit.
52.228-15  Performance and Payment Bonds--Construction.
52.228-16  Performance and Payment Bonds--Other Than Construction.
52.229-1  State and Local Taxes.
52.229-2  North Carolina State and Local Sales and Use Tax.
52.229-3  Federal, State, and Local Taxes.
52.229-4  Federal, State, and Local Taxes (Noncompetitive Contract).
52.229-5  Taxes--Contracts Performed in U.S. Possessions or Puerto Rico.
52.229-6  Taxes--Foreign Fixed-Price Contracts.
52.229-7  Taxes--Fixed-Price Contracts With Foreign Governments.
52.229-8  Taxes--Foreign Cost-Reimbursement Contracts.
52.229-9  Taxes--Cost-Reimbursement Contracts With Foreign Governments.
52.229-10  State of New Mexico Gross Receipts and Compensating Tax.
52.230-1  Cost Accounting Standards Notices and Certification.
52.230-2  Cost Accounting Standards.
52.230-3  Disclosure and Consistency of Cost Accounting Practices.
52.230-4  Consistency in Cost Accounting Practices.
52.230-5  Cost Accounting Standards--Educational Institution.
52.230-6  Administration of Cost Accounting Standards.
52.231  [Reserved]
52.232-1  Payments.
52.232-2  Payments Under Fixed-Price Research and Development Contracts.
52.232-3  Payments Under Personal Services Contracts.
52.232-4  Payments Under Transportation Contracts and Transportation-
          Related Services Contracts.
52.232-5  Payments Under Fixed-Price Construction Contracts.
52.232-6  Payment Under Communication Service Contracts With Common 
          Carriers.
52.232-7  Payments Under Time-and-Materials and Labor-Hour Contracts.
52.232-8  Discounts for Prompt Payment.
52.232-9  Limitation on Withholding of Payments.
52.232-10  Payments Under Fixed-Price Architect-Engineer Contracts.
52.232-11  Extras.
52.232-12  Advance Payments.
52.232-13  Notice of Progress Payments.
52.232-14  Notice of Availability of Progress Payments Exclusively for 
          Small Business Concerns.
52.232-15  Progress Payments Not Included.
52.232-16  Progress Payments.
52.232-17  Interest.
52.232-18  Availability of Funds.
52.232-19  Availability of Funds for the Next Fiscal Year.
52.232-20  Limitation of Cost.
52.232-21  Limitation of Cost (Facilities).
52.232-22  Limitation of Funds.
52.232-23  Assignment of Claims.
52.232-24  Prohibition of Assignment of Claims.
52.232-25  Prompt Payment.
52.232-26  Prompt Payment for Fixed-Price Architect-Engineer Contracts.
52.232-27  Prompt Payment for Construction Contracts.
52.232-28  [Reserved]
52.232-29  Terms for Financing of Purchases of Commercial Items.
52.232-30  Installment Payments for Commercial Items.
52.232-31  Invitation to Propose Financing Terms.
52.232-32  Performance-Based Payments.
52.232-33  Mandatory Information for Electronic Funds Transfer Payment.
52.232-34  Optional Information for Electronic Funds Transfer Payment.
52.233-1  Disputes.
52.233-2  Service of Protest.
52.233-3  Protest After Award.
52.234-1  Industrial Resources Developed Under Defense Production Act 
          Title III.
52.235  [Reserved]
52.236-1  Performance of Work by the Contractor.
52.236-2  Differing Site Conditions.
52.236-3  Site Investigation and Conditions Affecting the Work.
52.236-4  Physical Data.
52.236-5  Material and Workmanship.
52.236-6  Superintendence by the Contractor.
52.236-7  Permits and Responsibilities.

[[Page 10]]

52.236-8  Other Contracts.
52.236-9  Protection of Existing Vegetation, Structures, Equipment, 
          Utilities, and Improvements.
52.236-10  Operations and Storage Areas.
52.236-11  Use and Possession Prior to Completion.
52.236-12  Cleaning Up.
52.236-13  Accident Prevention.
52.236-14  Availability and Use of Utility Services.
52.236-15  Schedules for Construction Contracts.
52.236-16  Quantity Surveys.
52.236-17  Layout of Work.
52.236-18  Work Oversight in Cost-Reimbursement Construction Contracts.
52.236-19  Organization and Direction of the Work.
52.236-20  [Reserved]
52.236-21  Specifications and Drawings for Construction.
52.236-22  Design Within Funding Limitations.
52.236-23  Responsibility of the Architect-Engineer Contractor.
52.236-24  Work Oversight in Architect-Engineer Contracts.
52.236-25  Requirements for Registration of Designers.
52.236-26  Preconstruction Conference.
52.236-27  Site Visit (Construction).
52.236-28  Preparation of Proposals--Construction.
52.237-1  Site Visit.
52.237-2  Protection of Government Buildings, Equipment, and Vegetation.
52.237-3  Continuity of Services.
52.237-4  Payment by Government to Contractor.
52.237-5  Payment by Contractor to Government.
52.237-6  Incremental Payment by Contractor to Government.
52.237-7  Indemnification and Medical Liability Insurance.
52.237-8  Restriction on Severance Payments to Foreign Nationals.
52.237-9  Waiver of Limitation on Severance Payments to Foreign 
          Nationals.
52.237-10  Identification of Uncompensated Overtime.
52.238  [Reserved]
52.239-1  Privacy or Security Safeguards.
52.240  [Reserved]
52.241  Utility Services Provisions and Clauses.
52.241-1  Electric Service Territory Compliance Representation.
52.241-2  Order of Precedence--Utilities.
52.241-3  Scope and Duration of Contract.
52.241-4  Change in Class of Service.
52.241-5  Contractor's Facilities.
52.241-6  Service Provisions.
52.241-7  Change in Rates or Terms and Conditions of Service for 
          Regulated Services.
52.241-8  Change in Rates or Terms and Conditions of Service for 
          Unregulated Services.
52.241-9  Connection Charge.
52.241-10  Termination Liability.
52.241-11  Multiple Service Locations.
52.241-12  Nonrefundable, Nonrecurring Service Charge.
52.241-13  Capital Credits.
52.242-1  Notice of Intent to Disallow Costs.
52.242-2  Production Progress Reports.
52.242-3  Penalties for Unallowable Costs.
52.242-4  Certification of Final Indirect Costs.
52.242-5--52.242-9  [Reserved]
52.242-10  F.o.b. Origin--Government Bills of Lading or Prepaid Postage.
52.242-11  F.o.b. Origin--Government Bills of Lading or Indicia Mail.
52.242-12  Report of Shipment (REPSHIP).
52.242-13  Bankruptcy.
52.242-14  Suspension of Work.
52.242-15  Stop-Work Order.
52.242-16  Stop-Work Order--Facilities.
52.242-17  Government Delay of Work.
52.243-1  Changes--Fixed-Price.
52.243-2  Changes--Cost-Reimbursement.
52.243-3  Changes--Time-and-Materials or Labor-Hours.
52.243-4  Changes.
52.243-5  Changes and Changed Conditions.
52.243-6  Change Order Accounting.
52.243-7  Notification of Changes.
52.244-1  [Reserved]
52.244-2  Subcontracts.
52.244-3  [Reserved]
52.244-4  Subcontractors and outside associates and consultants 
          (Architect-engineer services).
52.244-5  Competition in Subcontracting.
52.244-6  Subcontracts for Commercial Items and Commercial Components.
52.245-1  Property Records.
52.245-2  Government Property (Fixed-Price Contracts).
52.245-3  Identification of Government-Furnished Property.
52.245-4  Government-Furnished Property (Short Form).
52.245-5  Government Property (Cost-Reimbursement, Time-and-Material, or 
          Labor-Hour Contracts).
52.245-6  Liability for Government Property (Demolition Services 
          Contracts).
52.245-7  Government Property (Consolidated Facilities).
52.245-8  Liability for the Facilities.
52.245-9  Use and Charges.
52.245-10  Government Property (Facilities Acquisition).
52.245-11  Government Property (Facilities Use).
52.245-12  Contract Purpose (Nonprofit Educational Institutions).
52.245-13  Accountable Facilities (Nonprofit Educational Institutions).
52.245-14  Use of Government Facilities.
52.245-15  Transfer of Title to the Facilities.

[[Page 11]]

52.245-16  Facilities Equipment Modernization.
52.245-17  Special Tooling.
52.245-18  Special Test Equipment.
52.245-19  Government Property Furnished ``As Is.''
52.246-1  Contractor Inspection Requirements.
52.246-2  Inspection of Supplies--Fixed-Price.
52.246-3  Inspection of Supplies--Cost-Reimbursement.
52.246-4  Inspection of Services--Fixed-Price.
52.246-5  Inspection of Services--Cost-Reimbursement.
52.246-6  Inspection--Time-and-Material and Labor-Hour.
52.246-7  Inspection of Research and Development--Fixed-Price.
52.246-8  Inspection of Research and Development--Cost-Reimbursement.
52.246-9  Inspection of Research and Development (Short Form).
52.246-10  Inspection of Facilities.
52.246-11  Higher-Level Contract Quality Requirement (Government 
          Specification).
52.246-12  Inspection of Construction.
52.246-13  Inspection--Dismantling, Demolition, or Removal of 
          Improvements.
52.246-14  Inspection of Transportation.
52.246-15  Certificate of Conformance.
52.246-16  Responsibility for Supplies.
52.246-17  Warranty of Supplies of a Noncomplex Nature.
52.246-18  Warranty of Supplies of a Complex Nature.
52.246-19  Warranty of Systems and Equipment under Performance 
          Specifications or Design Criteria.
52.246-20  Warranty of Services.
52.246-21  Warranty of Construction.
52.246-22  [Reserved]
52.246-23  Limitation of Liability.
52.246-24  Limitation of Liability--High-Value Items.
52.246-25  Limitation of Liability--Services.
52.247-1  Commercial Bill of Lading Notations.
52.247-2  Permits, Authorities, or Franchises.
52.247-3  Capability to Perform a Contract for the Relocation of a 
          Federal Office.
52.247-4  Inspection of Shipping and Receiving Facilities.
52.247-5  Familiarization With Conditions.
52.247-6  Financial Statement.
52.247-7  Freight Excluded.
52.247-8  Estimated Weights or Quantities Not Guaranteed.
52.247-9  Agreed Weight--General Freight.
52.247-10  Net Weight--General Freight.
52.247-11  Net Weight--Household Goods or Office Furniture.
52.247-12  Supervision, Labor, or Materials.
52.247-13  Accessorial Services--Moving Contracts.
52.247-14  Contractor Responsibility for Receipt of Shipment.
52.247-15  Contractor Responsibility for Loading and Unloading.
52.247-16  Contractor Responsibility for Returning Undelivered Freight.
52.247-17  Charges.
52.247-18  Multiple Shipments.
52.247-19  Stopping in Transit for Partial Unloading.
52.247-20  Estimated Quantities or Weights for Evaluation of Offers.
52.247-21  Contractor Liability for Personal Injury and/or Property 
          Damage.
52.247-22  Contractor Liability for Loss of and/or Damage to Freight 
          Other Than Household Goods.
52.247-23  Contractor Liability for Loss of and/or Damage to Household 
          Goods.
52.247-24  Advance Notification by the Government.
52.247-25  Government-Furnished Equipment With or Without Operators.
52.247-26  Government Direction and Marking.
52.247-27  Contract Not Affected by Oral Agreement.
52.247-28  Contractor's Invoices.
52.247-29  F.o.b. Origin.
52.247-30  F.o.b. Origin, Contractor's Facility.
52.247-31  F.o.b. Origin, Freight Allowed.
52.247-32  F.o.b. Origin, Freight Prepaid.
52.247-33  F.o.b. Origin, With Differentials.
52.247-34  F.o.b. Destination.
52.247-35  F.o.b. Destination, Within Consignee's Premises.
52.247-36  F.a.s. Vessel, Port of Shipment.
52.247-37  F.o.b. Vessel, Port of Shipment.
52.247-38  F.o.b. Inland Carrier, Point of Exportation.
52.247-39  F.o.b. Inland Point, Country of Importation.
52.247-40  Ex Dock, Pier, or Warehouse, Port of Importation.
52.247-41  C.& f. Destination.
52.247-42  C.i.f. Destination.
52.247-43  F.o.b. Designated Air Carrier's Terminal, Point of 
          Exportation.
52.247-44  F.o.b. Designated Air Carrier's Terminal, Point of 
          Importation.
52.247-45  F.o.b. Origin and/or F.o.b. Destination Evaluation.
52.247-46  Shipping Point(s) Used in Evaluation of F.o.b. Origin Offers.
52.247-47  Evaluation--F.o.b. Origin.
52.247-48  F.o.b. Destination--Evidence of Shipment.
52.247-49  Destination Unknown.
52.247-50  No Evaluation of Transportation Costs.
52.247-51  Evaluation of Export Offers.
52.247-52  Clearance and Documentation Requirements--Shipments to DOD 
          Air or Water Terminal Transshipment Points.
52.247-53  Freight Classification Description.
52.247-54  [Reserved]

[[Page 12]]

52.247-55  F.o.b. Point for Delivery of Government-Furnished Property.
52.247-56  Transit Arrangements.
52.247-57  Transportation Transit Privilege Credits.
52.247-58  Loading, Blocking, and Bracing of Freight Car Shipments.
52.247-59  F.o.b. Origin--Carload and Truckload Shipments.
52.247-60  Guaranteed Shipping Characteristics.
52.247-61  F.o.b. Origin--Minimum Size of Shipments.
52.247-62  Specific Quantities Unknown.
52.247-63  Preference for U.S.-Flag Air Carriers.
52.247-64  Preference for Privately Owned U.S.-Flag Commercial Vessels.
52.247-65  F.o.b. Origin, Prepaid Freight--Small Package Shipments.
52.247-66  Returnable Cylinders.
52.247-67  Submission of Commercial Transportation Bills to the General 
          Services Administration for Audit.
52.248-1  Value Engineering.
52.248-2  Value Engineering--Architect-Engineer.
52.248-3  Value Engineering--Construction.
52.249-1  Termination for Convenience of the Government (Fixed-Price) 
          (Short Form).
52.249-2  Termination for Convenience of the Government (Fixed-Price).
52.249-3  Termination for Convenience of the Government (Dismantling, 
          Demolition, or Removal of Improvements).
52.249-4  Termination for Convenience of the Government (Services) 
          (Short Form).
52.249-5  Termination for Convenience of the Government (Educational and 
          Other Nonprofit Institutions).
52.249-6  Termination (Cost-Reimbursement).
52.249-7  Termination (Fixed-Price Architect-Engineer).
52.249-8  Default (Fixed-Price Supply and Service).
52.249-9  Default (Fixed-Price Research and Development).
52.249-10  Default (Fixed-Price Construction).
52.249-11  Termination of Work (Consolidated Facilities or Facilities 
          Acquisition).
52.249-12  Termination (Personal Services).
52.249-13  Failure to Perform.
52.249-14  Excusable Delays.
52.250-1  Indemnification Under Public Law 85-804.
52.251-1  Government Supply Sources.
52.251-2  Interagency Fleet Management System Vehicles and Related 
          Services.
52.252-1  Solicitation Provisions Incorporated by Reference.
52.252-2  Clauses Incorporated by Reference.
52.252-3  Alterations in Solicitation.
52.252-4  Alterations in Contract.
52.252-5  Authorized Deviations in Provisions.
52.252-6  Authorized Deviations in Clauses.
52.253-1  Computer Generated Forms.

                Subpart 52.3--Provision and Clause Matrix

52.300  Scope of subpart.
52.301  Solicitation provisions and contract clauses (Matrix).

    Authority: 40 U.S.C. 486(c); 10 U.S.C. Chapter 137; and 42 U.S.C. 
2473(c).

    Source: 48 FR 42478, Sept. 19, 1983, unless otherwise noted.

    Editorial Note: For a document removing derivation lines wherever 
they appeared in part 52, see 60 FR 48218, Sept. 18, 1995.



Sec. 52.000  Scope of part.

    This part (a) gives instructions for using provisions and clauses in 
solicitations and/or contracts, (b) sets forth the solicitation 
provisions and contract clauses prescribed by this regulation, and (c) 
presents a matrix listing the FAR provisions and clauses applicable to 
each principal contract type and/or purpose (e.g., fixed-price supply, 
cost-reimbursement research and development).

[48 FR 42478, Sept. 19, 1983; 48 FR 43273, Sept. 22, 1983, as amended at 
55 FR 3887, Feb. 5, 1990]



       Subpart 52.1--Instructions for Using Provisions and Clauses



Sec. 52.100  Scope of subpart.

    This subpart (a) gives instructions for using part 52, including the 
explanation and use of provision and clause numbers, prescriptions, 
prefaces, and the matrix; (b) prescribes procedures for incorporating, 
identifying, and modifying provisions and clauses in solicitations and 
contracts, and for using alternates; and (c) describes the derivation of 
FAR provisions and clauses.

[48 FR 42478, Sept. 19, 1983; 48 FR 43273, Sept. 22, 1983, as amended at 
55 FR 3887, Feb. 5, 1990]



Sec. 52.101  Using part 52.

    (a) Definitions. Alternate means a substantive variation of a basic 
provision or clause prescribed for use in a defined circumstance. It (1) 
adds wording to, (2) deletes wording from, or (3) substitutes specified 
wording for a portion of the

[[Page 13]]

basic provision or clause. The alternate version of a provision or 
clause is the basic provision or clause as changed by the addition, 
deletion, or substitution (see 52.105(a)).
    Contract clause or clause means a term or condition used in 
contracts or in both solicitations and contracts, and applying after 
contract award or both before and after award.
    Modification, as used in this subpart, means a minor change in the 
details of a provision or clause that is specifically authorized by the 
FAR and does not alter the substance of the provision or clause (see 
52.104).
    Solicitation provision or provision means a term or condition used 
only in solicitations and applying only before contract award.
    Substantially as follows or substantially the same as, when used in 
the prescription and preface of a provision or clause, means that 
authorization is granted to prepare and utilize a variation of that 
provision or clause to accommodate requirements that are peculiar to an 
individual acquisition; provided, that the variation includes the 
salient features of the FAR provision or clause, and is not inconsistent 
with the intent, principle, and substance of the FAR provision or clause 
or related coverage of the subject matter.
    (b) Numbering. (1) FAR provisions and clauses. Subpart 52.2 sets 
forth the texts of all FAR provisions and clauses, each in its own 
separate subsection. The subpart is arranged by subject matter, in the 
same order as, and keyed to, the parts of the FAR. Each FAR provision or 
clause is uniquely identified. All FAR provision and clause numbers 
begin with ``52.2,'' since the text of all FAR provisions and clauses 
appear in subpart 52.2. The next two digits of the provision or clause 
number correspond to the number of the FAR subject part in which the 
provision or clause is prescribed. The FAR provision or clause number is 
then completed by a hyphen and a sequential number assigned within each 
section of subpart 52.2. The following example illustrates the makeup of 
the FAR provision or clause number:
[GRAPHIC] [TIFF OMITTED] TC01MY91.000

    (2) Provisions or clauses that supplement the FAR.
    (i) Provisions or clauses that supplement the FAR are--
    (A) Prescribed and included in authorized agency acquisition 
regulations issued within an agency to satisfy the specific needs of the 
agency as a whole;
    (B) Prescribed and included in a regulation issued by a 
suborganization of an agency to satisfy the needs of that particular 
suborganization; or
    (C) Developed for use at a suborganizational level of an agency, not 
meant for repetitive use, but intended to meet the needs of an 
individual acquisiton and, thus, impractical to include in either an 
agency or suborganization acquisition regulation. (See 1.301(c).)
    (ii) Supplemental provisions or clauses published in agency 
acquisition regulations shall be in full text and the prescription for 
the use of each shall be included. Supplemental provisions or clauses 
published in agency acquisition regulations shall be numbered in the 
same manner in which FAR provisions and clauses are numbered except 
that--
    (A) If it is included in an agency acquisition regulation that is 
published in the Federal Register and is codified in Title 48, Code of 
Federal Regulations (48 CFR), the number shall be preceded by the 
chapter number within 48 CFR assigned by the CFR staff; and
    (B) The sequential number shall be ``70'' or a higher number (see 
1.303).
    (iii) The sequential number at the end of the number of a provision 
or clause that supplements the FAR, like its counterpart at the end of 
any FAR provision or clause number, indicates the subsection location of 
the provision or clause in subpart 52.2 of the agency acquisition 
regulation that contains its full text. If, for example, an agency 
acquisition regulation contains only one provision followed by only one 
clause supplementing the FAR in its section

[[Page 14]]

52.236 (Construction and Architect-Engineer Contracts), then the 
sequential numbers would be ``70'' for the provision and ``71'' for the 
clause.
    (c) Prescriptions. Each provision or clause in subpart 52.2 is 
prescribed at that place in the FAR text where the subject matter of the 
provision or clause receives its primary treatment. The prescription 
includes all conditions, requirements, and instructions for using the 
provision or clause and its alternates, if any. The provision or clause 
may be referred to in other FAR locations.
    (d) Prefaces. Within subpart 52.2, each provision or clause is 
prefaced with (1) a cross-reference to the location in the FAR subject 
text that prescribes its use, and (2) directions for inserting it in 
solicitations and/or contracts.
    (e) Matrix. (1) The matrix in subpart 52.3 contains a column for 
each principal type and/or purpose of contract (e.g., fixed-price 
supply, cost reimbursement research and development). The matrix lists 
the--
    (i) Required solicitation provisions;
    (ii) Required-when-applicable solicitation provisions;
    (iii) Optional solicitation provisions;
    (iv) Required contract clauses;
    (v) Required-when-applicable contract clauses; and
    (vi) Optional contract clauses.
    (2) For each provision or clause listed, the matrix provides 
information on--
    (i) Whether incorporation by reference is or is not authorized (see 
52.102);
    (ii) The section of the Uniform Contract Format (UCF) in which it is 
to be located, if it is used in an acquisition that is subject to the 
UCF;
    (iii) Its number;
    (iv) The citation of the FAR text that prescribes its use; and
    (v) Its title.
    (3) Since the matrix does not provide sufficient information to 
determine the applicability of a provision or clause in the ``required-
when-applicable'' and ``optional'' categories, contracting officers 
shall refer to the FAR text (cited in the matrix) that prescribes its 
use.
    (4) The FAR matrix may be reproduced at agency levels, and at 
subordinate levels, for the purpose of supplementing it with agency-
developed provisions and clauses. The resulting consolidated matrices 
may be included in agency acquisition regulations.
    (f) Dates. Since they are subject to revision from time to time, all 
provisions, clauses, and alternates are dated; e.g., (DEC 1983). To 
avoid questions concerning which version of any provision, clause, or 
alternate is operative in any given solicitation or contract, its date 
shall be included whether it is incorporated by reference or in full 
text.

[48 FR 42478, Sept. 19, 1983; 48 FR 43273, Sept. 22, 1983, as amended at 
55 FR 3887, Feb. 5, 1990; 62 FR 40237, July 25, 1997; 62 FR 64927, Dec. 
9, 1997]



Sec. 52.102  Incorporating provisions and clauses.

    (a) Provisions and clauses should be incorporated by reference to 
the maximum practical extent, rather than being incorporated in full 
text, even if they--
    (1) Are used with one or more alternates or on an optional basis;
    (2) Are prescribed on a ``substantially as follows'' or 
``substantially the same as'' basis, provided they are used verbatim;
    (3) Require modification or the insertion by the Government of fill-
in material (see 52.104); or
    (4) Require completion by the offeror or prospective contractor. 
This instruction also applies to provisions completed as annual 
representations and certifications.
    (b) Except for provisions and clauses prescribed in 52.107, any 
provision or clause that can be accessed electronically by the offeror 
or prospective contractor may be incorporated by reference in 
solicitations and/or contracts. However, the contracting officer, upon 
request, shall provide the full text of any provision or clause 
incorporated by reference.
    (c) Agency approved provisions and clauses prescribed in agency 
acquisition regulations, and provisions and clauses not authorized by 
subpart 52.3 to be incorporated by reference, need not be incorporated 
in full text, provided the contracting officer includes

[[Page 15]]

in the solicitation and contract a statement that--
    (1) Identifies all provisions and clauses that require completion by 
the offeror or prospective contractor;
    (2) Specifies that the provisions and clauses must be completed by 
the offeror or prospective contractor and must be submitted with the 
quotation or offer; and
    (3) Identifies to the offeror or prospective contractor at least one 
electronic address where the full text may be accessed.
    (d) An agency may develop a group listing of provisions and clauses 
that apply to a specific category of contracts. An agency group listing 
may be incorporated by reference in solicitations and/or contracts in 
lieu of citing the provisions and clauses individually, provided the 
group listing is made available electronically to offerors and 
prospective contractors.
    (e) A provision or clause that is not available electronically to 
offerors and prospective contractors shall be incorporated in 
solicitations and/or contracts in full text if it is--
    (1) A FAR provision or clause that otherwise is not authorized to be 
incorporated by reference (see subpart 52.3); or
    (2) A provision or clause prescribed for use in an agency 
acquisition regulation.
    (f) Provisions or clauses may not be incorporated by reference by 
being listed in the--
    (1) Provision at 52.252-3, Alterations in Solicitations; or
    (2) Clause at 52.252-4, Alterations in Contract.

[62 FR 64927, Dec. 9, 1997]



Sec. 52.103  Identification of provisions and clauses.

    (a) Whenever any FAR provision or clause is used without deviation 
in a solicitation or contract, whether it is incorporated by reference 
or in full text, it shall be identified by number, title, and date. This 
identification shall also be used if the FAR provision or clause is used 
with an authorized deviation, except that the contracting officer shall 
then insert ``(DEVIATION)'' after the date. Solicited firms and 
contractors will be advised of the meaning of this insertion through the 
use of the (1) provision at 52.252-5, Authorized Deviations in 
Provisions, or (2) clause at 52.252-6, Authorized Deviations in Clauses. 
The above mentioned provision and clause are prescribed in 52.107 (e) 
and (f).
    (b) Any provision or clause that supplements the FAR whether it is 
incorporated by reference or in full text shall be clearly identified by 
number, title, date, and name of the regulation. When a supplemental 
provision or clause is used with an authorized deviation, insert 
``(DEVIATION)'' after the name of the regulation.
    (c) A provision or clause of the type described in 
52.101(b)(2)(i)(C) shall be identified by the title, date, and the name 
of the agency or suborganization within the agency that developed it.
    (d) Except for provisions or clauses covered by 52.103(c), the 
following hypothetical examples illustrate how a provision or clause 
that supplements the FAR shall be identified when it is incorporated in 
solicitations and/or contracts by reference or in full text:
    (1) If part 14 (Sealed Bidding) of the X Agency Acquisition 
Regulation, published in the Federal Register and codified as Chapter 99 
in 48 CFR, prescribes the use of a provision entitled ``Bid Envelopes,'' 
dated October 1983, and that provision is sequentially the first 
provision or clause appearing in Section 52.214 of the X Agency 
Acquisition Regulation, then the identification of that provision shall 
be ``9952.214-70--Bid Envelopes (OCT 1983).''
    (2) Assume that Y, a major organizational element of the X Agency, 
is authorized to issue the Y Acquisition Regulation, which is not 
published in the Federal Register and codified in 48 CFR. If part 36 
(Construction and Architect-Engineer Contracts) of the Y Acquisition 
Regulation prescribes the use of a clause entitled ``Refrigerated 
Display Cases,'' dated March 1983, pertaining to a specialized type of 
construction work, and that clause is sequentially the second provision 
or clause appearing in Section 52.236 of the Y Acquisition Regulation, 
then the identification of that clause shall be ``52.236-71--
Refrigerated Display Cases

[[Page 16]]

(MAR 1983)--Y Acquisition Regulation.''

[48 FR 42478, Sept. 19, 1983, as amended at 52 FR 9039, Mar. 20, 1987]



Sec. 52.104  Procedures for modifying and completing provisions and clauses.

    (a) Provisions and clauses shall not be modified unless the FAR 
authorizes their modification. Any such authorizations are contained in 
the provision or clause preface in subpart 52.2; for example--
    (1) ``In the following clause, the stated 60-day period may be 
varied from 30 to 90 days''; or
    (2) ```Task Order' or other appropriate designation may be 
substituted for `Schedule' wherever that word appears in the clause.''
    (b) When modifying provisions or clauses incorporated by reference, 
insert the changed wording directly below the title of the provision or 
clause identifying to the lowest level necessary (e.g., paragraph, 
sentence, word), to clearly indicate what is being modified.
    (c) When modifying provisions or clauses incorporated in full text, 
modify the language directly by substituting the changed wording as 
permitted.
    (d) When completing blanks in provisions or clauses incorporated by 
reference, insert the fill-in information directly below the title of 
the provision or clause identifying to the lowest level necessary to 
clearly indicate the blanks being filled in.
    (e) When completing blanks in provisions or clauses incorporated in 
full text, insert the fill-in information in the blanks of the provision 
or clause.



Sec. 52.105  Procedures for using alternates.

    (a) A major variation in a provision or clause is accommodated by 
use of an alternate. All alternates to a given provision or clause are 
prescribed at the point in the FAR subject text where the provision or 
clause is itself prescribed. The alternates to each provision or clause 
are titled ``Alternate I,'' ``Alternate II,'' ``Alternate III,'' and so 
on. In subpart 52.2, the instructions for using these alternates appear 
after the basic provision or clause. A statement of the manner of and 
conditions for its use is given for each alternate. This statement shall 
be read in conjunction with the preface to the provision or clause.
    (b) When an alternate is used, its date shall be cited along with 
the date of the basic provision or clause; e.g., 52.209-3 FIRST ARTICLE 
APPROVAL--CONTRACTOR TESTING (OCT 1983)--ALTERNATE I (DEC 1983).
    (c) Under certain circumstances, a provision or clause may be used 
with two or more alternates. In these circumstances, each of the 
applicable alternates shall be cited, whether incorporated by reference 
or in full text; e.g., 52.209-3 FIRST ARTICLE APPROVAL--CONTRACTOR 
TESTING (OCT 1983)--ALTERNATE I (DEC 1983) AND ALTERNATE II (FEB 1984). 
However, under no circumstances may an alternate to a specific provision 
or clause be applied to any other provision or clause.



Sec. 52.106  [Reserved]



Sec. 52.107  Provisions and clauses prescribed in subpart 52.1.

    (a) The contracting officer shall insert the provision at 52.252-1, 
Solicitation Provisions Incorporated by Reference, in solicitations in 
order to incorporate provisions by reference.
    (b) The contracting officer shall insert the clause at 52.252-2, 
Clauses Incorporated by Reference, in solicitations and contracts in 
order to incorporate clauses by reference.
    (c) The contracting officer shall insert the provision at 52.252-3, 
Alterations in Solicitation, in solicitations in order to revise or 
supplement, as necessary, other parts of the solicitation that apply to 
the solicitation phase only, except for any provision authorized for use 
with a deviation.
    (d) The contracting officer shall insert the clause at 52.252-4, 
Alterations in Contract, in solicitations and contracts in order to 
revise or supplement, as necessary, other parts of the contract, or 
parts of the solicitations that apply to the contract phase, except for 
any clause authorized for use with a deviation.

[[Page 17]]

    (e) The contracting officer shall insert the provision at 52.252-5, 
Authorized Deviations in Provisions, in solicitations that include any 
FAR or supplemental provision with an authorized deviation. Whenever any 
FAR or supplemental provision is used with an authorized deviation, the 
contracting officer shall identify it by the same number, title, and 
date assigned to the provision when it is used without deviation, 
include regulation name for any supplemental provision, except that the 
contracting officer shall insert ``(DEVIATION)'' after the date of the 
provision.
    (f) The contracting officer shall insert the clause at 52.252-6, 
Authorized Deviations in Clauses, in solicitations and contracts that 
include any FAR or supplemental clause with an authorized deviation. 
Whenever any FAR or supplemental clause is used with an authorized 
deviation, the contracting officer shall identify it by the same number, 
title, and date assigned to the clause when it is used without 
deviation, include regulation name for any supplemental clause, except 
that the contracting officer shall insert ``(DEVIATION)'' after the date 
of the clause.

[48 FR 42478, Sept. 19, 1983, as amended at 54 FR 48990, Nov. 28, 1989]



              Subpart 52.2--Text of Provisions and Clauses



Sec. 52.200  Scope of subpart.

    This subpart sets forth the text of all FAR provisions and clauses 
(see 52.101(b)(1)), and for each provision and clause, gives (a) a 
cross-reference to the location in the FAR that prescribes its use, and 
(b) directions for including it in solicitations and/or contracts.

[48 FR 42478, Sept. 19, 1983, as amended at 62 FR 40237, July 25, 1997]



Sec. 52.201  [Reserved]



Sec. 52.202-1  Definitions.

    As prescribed in subpart 2.2, insert the following clause:

                         Definitions (OCT 1995)

    (a) Head of the agency (also called agency head) or Secretary means 
the Secretary (or Attorney General, Administrator, Governor, 
Chairperson, or other chief official, as appropriate) of the agency, 
including any deputy or assistant chief official of the agency, and the 
term authorized representative means any person, persons, or board 
(other than the Contracting Officer) authorized to act for the head of 
the agency or Secretary.
    (b) Commercial component means any component that is a commercial 
item.
    (c) Commercial item means--
    (1) Any item, other than real property, that is of a type 
customarily used for nongovernmental purposes and that--
    (i) Has been sold, leased, or licensed to the general public; or
    (ii) Has been offered for sale, lease, or license to the general 
public;
    (2) Any item that evolved from an item described in paragraph (c)(1) 
of this clause through advances in technology or performance and that is 
not yet available in the commercial marketplace, but will be available 
in the commercial marketplace in time to satisfy the delivery 
requirements under a Government solicitation;
    (3) Any item that would satisfy a criterion expressed in paragraphs 
(c)(1) or (c)(2) of this clause, but for--
    (i) Modifications of a type customarily available in the commercial 
marketplace; or
    (ii) Minor modifications of a type not customarily available in the 
commercial marketplace made to meet Federal Government requirements. 
Minor modifications means modifications that do not significantly alter 
the nongovernmental function or essential physical characteristics of an 
item or component, or change the purpose of a process. Factors to be 
considered in determining whether a modification is minor include the 
value and size of the modification and the comparative value and size of 
the final product. Dollar values and percentages may be used as 
guideposts, but are not conclusive evidence that a modification is 
minor;
    (4) Any combination of items meeting the requirements of paragraphs 
(c)(1), (2), (3), or (5) of this clause that are of a type customarily 
combined and sold in combination to the general public;
    (5) Installation services, maintenance services, repair services, 
training services, and other services if such services are procured for 
support of an item referred to in paragraphs (c)(1), (2), (3), or (4) of 
this clause, and if the source of such services--
    (i) Offers such services to the general public and the Federal 
Government contemporaneously and under similar terms and conditions; and
    (ii) Offers to use the same work force for providing the Federal 
Government with such services as the source uses for providing such 
services to the general public;
    (6) Services of a type offered and sold competitively in substantial 
quantities in the

[[Page 18]]

commercial marketplace based on established catalog or market prices for 
specific tasks performed under standard commercial terms and conditions. 
This does not include services that are sold based on hourly rates 
without an established catalog or market price for a specific service 
performed;
    (7) Any item, combination of items, or service referred to in 
subparagraphs (c)(1) through (c)(6), notwithstanding the fact that the 
item, combination of items, or service is transferred between or among 
separate divisions, subsidiaries, or affiliates of a Contractor; or
    (8) A nondevelopmental item, if the procuring agency determines the 
item was developed exclusively at private expense and sold in 
substantial quantities, on a competitive basis, to multiple State and 
local Governments.
    (d) Component means any item supplied to the Federal Government as 
part of an end item or of another component.
    (e) Nondevelopmental item means--
    (1) Any previously developed item of supply used exclusively for 
governmental purposes by a Federal agency, a State or local government, 
or a foreign government with which the United States has a mutual 
defense cooperation agreement;
    (2) Any item described in paragraph (e)(1) of this definition that 
requires only minor modification or modifications of a type customarily 
available in the commercial marketplace in order to meet the 
requirements of the procuring department or agency; or
    (3) Any item of supply being produced that does not meet the 
requirements of paragraph (e)(1) or (e)(2) solely because the item is 
not yet in use.
    (f) Contracting Officer means a person with the authority to enter 
into, administer, and/or terminate contracts and make related 
determinations and findings. The term includes certain authorized 
representatives of the Contracting Officer acting within the limits of 
their authority as delegated by the Contracting Officer.
    (g) Except as otherwise provided in this contract, the term 
subcontracts includes, but is not limited to, purchase orders and 
changes and modifications to purchase orders under this contract.

                             (End of clause)

    Alternate I (APR 1984). If the contract is for personal services; 
construction; architect-engineer services; or dismantling, demolition, 
or removal of improvements, delete paragraph (c) of the basic clause.

[48 FR 42478, Sept. 19, 1983, as amended at 56 FR 41730, 41744, Aug. 22, 
1991; 56 FR 67137, Dec. 27, 1991; 60 FR 48250, Sept. 18, 1995]



Sec. 52.203-1  [Reserved]



Sec. 52.203-2  Certificate of Independent Price Determination.

    As prescribed in 3.103-1, insert the following provision. If the 
solicitation is a Request for Quotations, the terms Quotation and Quoter 
may be substituted for Offer and Offeror.

        Certificate of Independent Price Determination (APR 1985)

    (a) The offeror certifies that--
    (1) The prices in this offer have been arrived at independently, 
without, for the purpose of restricting competition, any consultation, 
communication, or agreement with any other offeror or competitor 
relating to (i) those prices, (ii) the intention to submit an offer, or 
(iii) the methods or factors used to calculate the prices offered;
    (2) The prices in this offer have not been and will not be knowingly 
disclosed by the offeror, directly or indirectly, to any other offeror 
or competitor before bid opening (in the case of a sealed bid 
solicitation) or contract award (in the case of a negotiated 
solicitation) unless otherwise required by law; and
    (3) No attempt has been made or will be made by the offeror to 
induce any other concern to submit or not to submit an offer for the 
purpose of restricting competition.
    (b) Each signature on the offer is considered to be a certification 
by the signatory that the signatory--
    (1) Is the person in the offeror's organization responsible for 
determining the prices being offered in this bid or proposal, and that 
the signatory has not participated and will not participate in any 
action contrary to subparagraphs (a)(1) through (a)(3) above; or
    (2)(i) Has been authorized, in writing, to act as agent for the 
following principals in certifying that those principals have not 
participated, and will not participate in any action contrary to 
subparagraphs (a)(1)
through (a)(3) above____________________________________________________
_______________________________________________________________________
[insert full name of person(s) in the offeror's organization responsible 
for determining the prices offered in this bid or proposal, and the 
title of his or her position in the offeror's organization];
    (ii) As an authorized agent, does certify that the principals named 
in subdivision (b)(2)(i) above have not participated, and will not 
participate, in any action contrary to subparagraphs (a)(1) through 
(a)(3) above; and
    (iii) As an agent, has not personally participated, and will not 
participate, in any action contrary to subparagraphs (a)(1) through 
(a)(3) above.

[[Page 19]]

    (c) If the offeror deletes or modifies subparagraph (a)(2) above, 
the offeror must furnish with its offer a signed statement setting forth 
in detail the circumstances of the disclosure.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1746, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985]



Sec. 52.203-3  Gratuities.

    As prescribed in 3.202, insert the following clause:

                          Gratuities (APR 1984)

    (a) The right of the Contractor to proceed may be terminated by 
written notice if, after notice and hearing, the agency head or a 
designee determines that the Contractor, its agent, or another 
representative--
    (1) Offered or gave a gratuity (e.g., an entertainment or gift) to 
an officer, official, or employee of the Government; and
    (2) Intended, by the gratuity, to obtain a contract or favorable 
treatment under a contract.
    (b) The facts supporting this determination may be reviewed by any 
court having lawful jurisdiction.
    (c) If this contract is terminated under paragraph (a) above, the 
Government is entitled--
    (1) To pursue the same remedies as in a breach of the contract; and
    (2) In addition to any other damages provided by law, to exemplary 
damages of not less than 3 nor more than 10 times the cost incurred by 
the Contractor in giving gratuities to the person concerned, as 
determined by the agency head or a designee. (This subparagraph (c)(2) 
is applicable only if this contract uses money appropriated to the 
Department of Defense.)
    (d) The rights and remedies of the Government provided in this 
clause shall not be exclusive and are in addition to any other rights 
and remedies provided by law or under this contract.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 61 FR 39200, July 26, 1996]



Sec. 52.203-4  [Reserved]



Sec. 52.203-5  Covenant Against Contingent Fees.

    As prescribed in 3.404, insert the following clause:

               Covenant Against Contingent Fees (APR 1984)

    (a) The Contractor warrants that no person or agency has been 
employed or retained to solicit or obtain this contract upon an 
agreement or understanding for a contingent fee, except a bona fide 
employee or agency. For breach or violation of this warranty, the 
Government shall have the right to annul this contract without liability 
or, in its discretion, to deduct from the contract price or 
consideration, or otherwise recover, the full amount of the contingent 
fee.
    (b) Bona fide agency, as used in this clause, means an established 
commercial or selling agency, maintained by a contractor for the purpose 
of securing business, that neither exerts nor proposes to exert improper 
influence to solicit or obtain Government contracts nor holds itself out 
as being able to obtain any Government contract or contracts through 
improper influence.
    Bona fide employee, as used in this clause, means a person, employed 
by a contractor and subject to the contractor's supervision and control 
as to time, place, and manner of performance, who neither exerts nor 
proposes to exert improper influence to solicit or obtain Government 
contracts nor holds out as being able to obtain any Government contract 
or contracts through improper influence.
    Contingent fee, as used in this clause, means any commission, 
percentage, brokerage, or other fee that is contingent upon the success 
that a person or concern has in securing a Government contract.
    Improper influence, as used in this clause, means any influence that 
induces or tends to induce a Government employee or officer to give 
consideration or to act regarding a Government contract on any basis 
other than the merits of the matter.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 56 FR 41730, Aug. 22, 1991; 
61 FR 39189, July 26, 1996]



Sec. 52.203-6  Restrictions on Subcontractor Sales to the Government.

    As prescribed in 3.503-2, insert the following clause:

    Restrictions on Subcontractor Sales to the Government (JUL 1995)

    (a) Except as provided in (b) below, the Contractor shall not enter 
into any agreement with an actual or prospective subcontractor, nor 
otherwise act in any manner, which has or may have the effect of 
restricting sales by such subcontractors directly to

[[Page 20]]

the Government of any item or process (including computer software) made 
or furnished by the subcontractor under this contract or under any 
follow-on production contract.
    (b) The prohibition in (a) above does not preclude the Contractor 
from asserting rights that are otherwise authorized by law or 
regulation.
    (c) The Contractor agrees to incorporate the substance of this 
clause, including this paragraph (c), in all subcontracts under this 
contract which exceed $100,000.

                             (End of clause)

    Alternate I (OCT 1995). As prescribed in 3.503-2, substitute the 
following paragraph in place of paragraph (b) of the basic clause:

    (b) The prohibition in paragraph (a) of this clause does not 
preclude the Contractor from asserting rights that are otherwise 
authorized by law or regulation. For acquisitions of commercial items, 
the prohibition in paragraph (a) applies only to the extent that any 
agreement restricting sales by subcontractors results in the Federal 
Government being treated differently from any other prospective 
purchaser for the sale of the commercial item(s).

[50 FR 35479, Aug. 30, 1985, as amended at 60 FR 34761, July 3, 1995; 60 
FR 48251, Sept. 18, 1995; 61 FR 39198, July 26, 1996]



Sec. 52.203-7  Anti-Kickback Procedures.

    As prescribed in 3.502-3, insert the following clause:

                   Anti-Kickback Procedures (JUL 1995)

    (a) Definitions.
    Kickback, as used in this clause, means any money, fee, commission, 
credit, gift, gratuity, thing of value, or compensation of any kind 
which is provided, directly or indirectly, to any prime Contractor, 
prime Contractor employee, subcontractor, or subcontractor employee for 
the purpose of improperly obtaining or rewarding favorable treatment in 
connection with a prime contract or in connection with a subcontract 
relating to a prime contract.
    Person, as used in this clause, means a corporation, partnership, 
business association of any kind, trust, joint-stock company, or 
individual.
    Prime contract, as used in this clause, means a contract or 
contractual action entered into by the United States for the purpose of 
obtaining supplies, materials, equipment, or services of any kind.
    Prime Contractor, as used in this clause, means a person who has 
entered into a prime contract with the United States.
    Prime Contractor employee, as used in this clause, means any 
officer, partner, employee, or agent of a prime Contractor.
    Subcontract, as used in this clause, means a contract or contractual 
action entered into by a prime Contractor or subcontractor for the 
purpose of obtaining supplies, materials, equipment, or services of any 
kind under a prime contract.
    Subcontractor, as used in this clause, (1) means any person, other 
than the prime Contractor, who offers to furnish or furnishes any 
supplies, materials, equipment, or services of any kind under a prime 
contract or a subcontract entered into in connection with such prime 
contract, and (2) includes any person who offers to furnish or furnishes 
general supplies to the prime Contractor or a higher tier subcontractor.
    Subcontractor employee, as used in this clause, means any officer, 
partner, employee, or agent of a subcontractor.
    (b) The Anti-Kickback Act of 1986 (41 U.S.C. 51-58) (the Act), 
prohibits any person from--
    (1) Providing or attempting to provide or offering to provide any 
kickback;
    (2) Soliciting, accepting, or attempting to accept any kickback; or
    (3) Including, directly or indirectly, the amount of any kickback in 
the contract price charged by a prime Contractor to the United States or 
in the contract price charged by a subcontractor to a prime Contractor 
or higher tier subcontractor.
    (c)(1) The Contractor shall have in place and follow reasonable 
procedures designed to prevent and detect possible violations described 
in paragraph (b) of this clause in its own operations and direct 
business relationships.
    (2) When the Contractor has reasonable grounds to believe that a 
violation described in paragraph (b) of this clause may have occurred, 
the Contractor shall promptly report in writing the possible violation. 
Such reports shall be made to the inspector general of the contracting 
agency, the head of the contracting agency if the agency does not have 
an inspector general, or the Department of Justice.
    (3) The Contractor shall cooperate fully with any Federal agency 
investigating a possible violation described in paragraph (b) of this 
clause.
    (4) The Contracting Officer may (i) offset the amount of the 
kickback against any monies owed by the United States under the prime 
contract and/or (ii) direct that the Prime Contractor withhold, from 
sums owed a subcontractor under the prime contract, the amount of any 
kickback. The Contracting Officer may order the monies withheld under 
subdivision (c)(4)(ii) of this clause be paid over to the Government 
unless the Government has already offset those monies under subdivision 
(c)(4)(i) of this clause. In

[[Page 21]]

either case, the Prime Contractor shall notify the Contracting Officer 
when the monies are withheld.
    (5) The Contractor agrees to incorporate the substance of this 
clause, including this subparagraph (c)(5) but excepting subparagraph 
(c)(1), in all subcontracts under under this contract which exceed 
$100,000.

[52 FR 6122, Feb. 27, 1987, as amended at 53 FR 34228, Sept. 2, 1988; 53 
FR 36028, Sept. 16, 1988; 60 FR 34761, July 3, 1995]



Sec. 52.203-8  Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity.

    As prescribed in 3.104-9(a), insert the following clause in 
solicitations and contracts:

Cancellation, Rescission, and Recovery of Funds for Illegal or Improper 
                           Activity (JAN 1997)

    (a) If the Government receives information that a contractor or a 
person has engaged in conduct constituting a violation of subsection 
(a), (b), (c), or (d) of Section 27 of the Office of Federal Procurement 
Policy Act (41 U.S.C. 423) (the Act), as amended by section 4304 of the 
National Defense Authorization Act for Fiscal Year 1996 (Pub. L. 104-
106), the Government may--
    (1) Cancel the solicitation, if the contract has not yet been 
awarded or issued; or
    (2) Rescind the contract with respect to which--
    (i) The Contractor or someone acting for the Contractor has been 
convicted for an offense where the conduct constitutes a violation of 
subsection 27 (a) or (b) of the Act for the purpose of either--
    (A) Exchanging the information covered by such subsections for 
anything of value; or
    (B) Obtaining or giving anyone a competitive advantage in the award 
of a Federal agency procurement contract; or
    (ii) The head of the contracting activity has determined, based upon 
a preponderance of the evidence, that the Contractor or someone acting 
for the Contractor has engaged in conduct constituting an offense 
punishable under subsection 27(e)(1) of the Act.
    (b) If the Government rescinds the contract under paragraph (a) of 
this clause, the Government is entitled to recover, in addition to any 
penalty prescribed by law, the amount expended under the contract.
    (c) The rights and remedies of the Government specified herein are 
not exclusive, and are in addition to any other rights and remedies 
provided by law, regulation, or under this contract.

                             (End of clause)

[62 FR 233, Jan. 2, 1997; 62 FR 10710, Mar. 10, 1997]



Sec. 52.203-9  [Reserved]



Sec. 52.203-10  Price or Fee Adjustment for Illegal or Improper Activity.

    As prescribed in 3.104-9(b) insert the following clause:

   Price or Fee Adjustment for Illegal or Improper Activity (JAN 1997)

    (a) The Government, at its election, may reduce the price of a 
fixed-price type contract and the total cost and fee under a cost-type 
contract by the amount of profit or fee determined as set forth in 
paragraph (b) of this clause if the head of the contracting activity or 
designee determines that there was a violation of subsection 27 (a), 
(b), or (c) of the Office of Federal Procurement Policy Act, as amended 
(41 U.S.C. 423), as implemented in section 3.104 of the Federal 
Acquisition Regulation.
    (b) The price or fee reduction referred to in paragraph (a) of this 
clause shall be--
    (1) For cost-plus-fixed-fee contracts, the amount of the fee 
specified in the contract at the time of award;
    (2) For cost-plus-incentive-fee conrtracts, the target fee specified 
in the contract at the time of award, notwithstanding any minimum fee or 
``fee floor'' specified in the contract.
    (3) For cost-plus-award-fee contracts--
    (i) The base fee established in the contract at the time of contract 
award;
    (ii) If no base fee is specified in the contract, 30 percent of the 
amount of each award fee otherwise payable to the Contractor for each 
award fee evaluation period or at each award fee determination point.
    (4) For fixed-price-incentive contracts, the Government may--
    (i) Reduce the contract target price and contract target profit both 
by an amount equal to the initial target profit specified in the 
contract at the time of contract award; or
    (ii) If an immediate adjustment to the contract target price and 
contract target profit would have a significant adverse impact on the 
incentive price revision relationship under the contract, or adversely 
affect the contract financing provisions, the Contracting Officer may 
defer such adjustment until establishment of the total final price of 
the contract. The total final price established in accordance with the 
incentive price revision provisions of the contract shall be reduced by 
an amount equal to the initial target profit specified in the contract 
at the time of contract award and such reduced price shall be the total 
final contract price.

[[Page 22]]

    (5) For firm-fixed-price contracts, by 10 percent of the initial 
contract price or a profit amount determined by the Contracting Officer 
from records or documents in existence prior to the date of the contract 
award.
    (c) The Government may, at its election, reduce a prime contractor's 
price or fee in accordance with the procedures of paragraph (b) of this 
clause for violations of the Act by its subcontractors by an amount not 
to exceed the amount of profit or fee reflected in the subcontract at 
the time the subcontract was first definitively priced.
    (d) In addition to the remedies in paragraphs (a) and (c) of this 
clause, the Government may terminate this contract for default. The 
rights and remedies of the Government specified herein are not 
exclusive, and are in addition to any other rights and remedies provided 
by law or under this contract.

                             (End of clause)

[55 FR 36797, Sept. 6, 1990, as amended at 62 FR 233, Jan. 2, 1997]



Sec. 52.203-11  Certification and Disclosure Regarding Payments to Influence Certain Federal Transactions.

    As prescribed in 3.808, insert the following provision:

  Certification and Disclosure Regarding Payments to Influence Certain 
                     Federal Transactions (APR 1991)

    (a) The definitions and prohibitions contained in the clause, at FAR 
52.203-12, Limitation on Payments to Influence Certain Federal 
Transactions, included in this solicitation, are hereby incorporated by 
reference in paragraph (b) of this certification.
    (b) The offeror, by signing its offer, hereby certifies to the best 
of his or her knowledge and belief that on or after December 23, 1989--
    (1) No Federal appropriated funds have been paid or will be paid to 
any person for influencing or attempting to influence an officer or 
employee of any agency, a Member of Congress, an officer or employee of 
Congress, or an employee of a Member of Congress on his or her behalf in 
connection with the awarding of any Federal contract, the making of any 
Federal grant, the making of any Federal loan, the entering into of any 
cooperative agreement, and the extension, continuation, renewal, 
amendment or modification of any Federal contract, grant, loan, or 
cooperative agreement;
    (2) If any funds other than Federal appropriated funds (including 
profit or fee received under a covered Federal transaction) have been 
paid, or will be paid, to any person for influencing or attempting to 
influence an officer or employee of any agency, a Member of Congress, an 
officer or employee of Congress, or an employee of a Member of Congress 
on his or her behalf in connection with this solicitation, the offeror 
shall complete and submit, with its offer, OMB standard form LLL, 
Disclosure of Lobbying Activities, to the Contracting Officer; and
    (3) He or she will include the language of this certification in all 
subcontract awards at any tier and require that all recipients of 
subcontract awards in excess of $100,000 shall certify and disclose 
accordingly.
    (c) Submission of this certification and disclosure is a 
prerequisite for making or entering into this contract imposed by 
section 1352, title 31, United States Code. Any person who makes an 
expenditure prohibited under this provision or who fails to file or 
amend the disclosure form to be filed or amended by this provision, 
shall be subject to a civil penalty of not less than $10,000, and not 
more than $100,000, for each such failure.

                           (End of provision)

[55 FR 3193, Jan. 30, 1990, as amended at 56 FR 15155, Apr. 15, 1991; 62 
FR 40237, July 25, 1997]



Sec. 52.203-12  Limitation on Payments to Influence Certain Federal Transactions.

    As prescribed in 3.808, insert the following clause:

 Limitation on Payments to Influence Certain Federal Transactions (JUN 
                                  1997)

    (a) Definitions.
    Agency, as used in this clause, means executive agency as defined in 
2.101.
    Covered Federal action, as used in this clause, means any of the 
following Federal actions:
    (1) The awarding of any Federal contract.
    (2) The making of any Federal grant.
    (3) The making of any Federal loan.
    (4) The entering into of any cooperative agreement.
    (5) The extension, continuation, renewal, amendment, or modification 
of any Federal contract, grant, loan, or cooperative agreement.
    Indian tribe and tribal organization, as used in this clause, have 
the meaning provided in section 4 of the Indian Self-Determination and 
Education Assistance Act (25 U.S.C. 450B) and include Alaskan Natives.
    Influencing or attempting to influence, as used in this clause, 
means making, with the intent to influence, any communication to or 
appearance before an officer or employee of any agency, a Member of 
Congress, an officer or employee of Congress, or an employee of a Member 
of Congress in connection with any covered Federal action.

[[Page 23]]

    Local government, as used in this clause, means a unit of government 
in a State and, if chartered, established, or otherwise recognized by a 
State for the performance of a governmental duty, including a local 
public authority, a special district, an intrastate district, a council 
of governments, a sponsor group representative organization, and any 
other instrumentality of a local government.
    Officer or employee of an agency, as used in this clause, includes 
the following individuals who are employed by an agency:
    (1) An individual who is appointed to a position in the Government 
under title 5, United States Code, including a position under a 
temporary appointment.
    (2) A member of the uniformed services, as defined in subsection 
101(3), title 37, United States Code.
    (3) A special Government employee, as defined in section 202, title 
18, United States Code.
    (4) An individual who is a member of a Federal advisory committee, 
as defined by the Federal Advisory Committee Act, title 5, United States 
Code, appendix 2.
    Person, as used in this clause, means an individual, corporation, 
company, association, authority, firm, partnership, society, State, and 
local government, regardless of whether such entity is operated for 
profit, or not for profit. This term excludes an Indian tribe, tribal 
organization, or any other Indian organization with respect to 
expenditures specifically permitted by other Federal law.
    Reasonable compensation, as used in this clause, means, with respect 
to a regularly employed officer or employee of any person, compensation 
that is consistent with the normal compensation for such officer or 
employee for work that is not furnished to, not funded by, or not 
furnished in cooperation with the Federal Government.
    Reasonable payment, as used in this clause, means, with respect to 
professional and other technical services, a payment in an amount that 
is consistent with the amount normally paid for such services in the 
private sector.
    Recipient, as used in this clause, includes the Contractor and all 
subcontractors. This term excludes an Indian tribe, tribal organization, 
or any other Indian organization with respect to expenditures 
specifically permitted by other Federal law.
    Regularly employed, as used in this clause, means, with respect to 
an officer or employee of a person requesting or receiving a Federal 
contract, an officer or employee who is employed by such person for at 
least 130 working days within 1 year immediately preceding the date of 
the submission that initiates agency consideration of such person for 
receipt of such contract. An officer or employee who is employed by such 
person for less than 130 working days within 1 year immediately 
preceding the date of the submission that initiates agency consideration 
of such person shall be considered to be regularly employed as soon as 
he or she is employed by such person for 130 working days.
    State, as used in this clause, means a State of the United States, 
the District of Columbia, the Commonwealth of Puerto Rico, a territory 
or possession of the United States, an agency or instrumentality of a 
State, and multi-State, regional, or interstate entity having 
governmental duties and powers.
    (b) Prohibitions. (1) Section 1352 of title 31, United States Code, 
among other things, prohibits a recipient of a Federal contract, grant, 
loan, or cooperative agreement from using appropriated funds to pay any 
person for influencing or attempting to influence an officer or employee 
of any agency, a Member of Congress, an officer or employee of Congress, 
or an employee of a Member of Congress in connection with any of the 
following covered Federal actions: the awarding of any Federal contract; 
the making of any Federal grant; the making of any Federal loan; the 
entering into of any cooperative agreement; or the modification of any 
Federal contract, grant, loan, or cooperative agreement.
    (2) The Act also requires Contractors to furnish a disclosure if any 
funds other than Federal appropriated funds (including profit or fee 
received under a covered Federal transaction) have been paid, or will be 
paid, to any person for influencing or attempting to influence an 
officer or employee of any agency, a Member of Congress, an officer or 
employee of Congress, or an employee of a Member of Congress in 
connection with a Federal contract, grant, loan, or cooperative 
agreement.
    (3) The prohibitions of the Act do not apply under the following 
conditions:
    (i) Agency and legislative liaison by own employees. (A) The 
prohibition on the use of appropriated funds, in subparagraph (b)(1) of 
this clause, does not apply in the case of a payment of reasonable 
compensation made to an officer or employee of a person requesting or 
receiving a covered Federal action if the payment is for agency and 
legislative liaison activities not directly related to a covered Federal 
action.
    (B) For purposes of subdivision (b)(3)(i)(A) of this clause, 
providing any information specifically requested by an agency or 
Congress is permitted at any time.
    (C) The following agency and legislative liaison activities are 
permitted at any time where they are not related to a specific 
solicitation for any covered Federal action:
    (1) Discussing with an agency the qualities and characteristics 
(including individual demonstrations) of the person's products or 
services, conditions or terms of sale, and service capabilities.
    (2) Technical discussions and other activities regarding the 
application or adaptation

[[Page 24]]

of the person's products or services for an agency's use.
    (D) The following agency and legislative liaison activities are 
permitted where they are prior to formal solicitation of any covered 
Federal action--
    (1) Providing any information not specifically requested but 
necessary for an agency to make an informed decision about initiation of 
a covered Federal action;
    (2) Technical discussions regarding the preparation of an 
unsolicited proposal prior to its official submission; and
    (3) Capability presentations by persons seeking awards from an 
agency pursuant to the provisions of the Small Business Act, as amended 
by Pub. L. 95-507, and subsequent amendments.
    (E) Only those services expressly authorized by subdivison 
(b)(3)(i)(A) of this clause are permitted under this clause.
    (ii) Professional and technical services. (A) The prohibition on the 
use of appropriated funds, in subparagraph (b)(1) of this clause, does 
not apply in the case of--
    (1) A payment of reasonable compensation made to an officer or 
employee of a person requesting or receiving a covered Federal action or 
an extension, continuation, renewal, amendment, or modification of a 
covered Federal action, if payment is for professional or technical 
services rendered directly in the preparation, submission, or 
negotiation of any bid, proposal, or application for that Federal action 
or for meeting requirements imposed by or pursuant to law as a condition 
for receiving that Federal action.
    (2) Any reasonable payment to a person, other than an officer or 
employee of a person requesting or receiving a covered Federal action or 
an extension, continuation, renewal, amendment, or modification of a 
covered Federal action if the payment is for professional or technical 
services rendered directly in the preparation, submission, or 
negotiation of any bid, proposal, or application for that Federal action 
or for meeting requirements imposed by or pursuant to law as a condition 
for receiving that Federal action. Persons other than officers or 
employees of a person requesting or receiving a covered Federal action 
include consultants and trade associations.
    (B) For purposes of subdivision (b)(3)(ii)(A) of this clause, 
professional and technical services shall be limited to advice and 
analysis directly applying any professional or technical discipline. For 
example, drafting of a legal document accompanying a bid or proposal by 
a lawyer is allowable.
    Similarly, technical advice provided by an engineer on the 
performance or operational capability of a piece of equipment rendered 
directly in the negotiation of a contract is allowable. However, 
communications with the intent to influence made by a professional (such 
as a licensed lawyer) or a technical person (such as a licensed 
accountant) are not allowable under this section unless they provide 
advice and analysis directly applying their professional or technical 
expertise and unless the advice or analysis is rendered directly and 
solely in the preparation, submission or negotiation of a covered 
Federal action. Thus, for example, communications with the intent to 
influence made by a lawyer that do not provide legal advice or analysis 
directly and solely related to the legal aspects of his or her clients's 
proposal, but generally advocate one proposal over another are not 
allowable under this section because the lawyer is not providing 
professional legal services. Similarly, communications with the intent 
to influence made by an engineer providing an engineering analysis prior 
to the preparation or submission of a bid or proposal are not allowable 
under this section since the engineer is providing technical services 
but not directly in the preparation, submission or negotiation of a 
covered Federal action.
    (C) Requirements imposed by or pursuant to law as a condition for 
receiving a covered Federal award include those required by law or 
regulation and any other requirements in the actual award documents.
    (D) Only those services expressly authorized by subdivisions 
(b)(3)(ii)(A) (1) and (2) of this clause are permitted under this 
clause.
    (E) The reporting requirements of FAR 3.803(a) shall not apply with 
respect to payments of reasonable compensation made to regularly 
employed officers or employees of a person.
    (c) Disclosure. (1) The Contractor who requests or receives from an 
agency a Federal contract shall file with that agency a disclosure form, 
OMB standard form LLL, Disclosure of Lobbying Activities, if such person 
has made or has agreed to make any payment using nonappropriated funds 
(to include profits from any covered Federal action), which would be 
prohibited under subparagraph (b)(1) of this clause, if paid for with 
appropriated funds.
    (2) The Contractor shall file a disclosure form at the end of each 
calendar quarter in which there occurs any event that materially affects 
the accuracy of the information contained in any disclosure form 
previously filed by such person under subparagraph (c)(1) of this 
clause. An event that materially affects the accuracy of the information 
reported includes--
    (i) A cumulative increase of $25,000 or more in the amount paid or 
expected to be paid for influencing or attempting to influence a covered 
Federal action; or
    (ii) A change in the person(s) or individual(s) influencing or 
attempting to influence a covered Federal action; or
    (iii) A change in the officer(s), employee(s), or Member(s) 
contacted to influence or attempt to influence a covered Federal action.

[[Page 25]]

    (3) The Contractor shall require the submittal of a certification, 
and if required, a disclosure form by any person who requests or 
received any subcontract exceeding $100,000 under the Federal contract.
    (4) All subcontractor disclosure forms (but not certifications) 
shall be forwarded from tier to tier until received by the prime 
Contractor. The prime Contractor shall submit all disclosures to the 
Contracting Officer at the end of the calendar quarter in which the 
disclosure form is submitted by the subcontractor. Each subcontractor 
certification shall be retained in the subcontract file of the awarding 
Contractor.
    (d) Agreement. The Contractor agrees not to make any payment 
prohibited by this clause.
    (e) Penalties. (1) Any person who makes an expenditure prohibited 
under paragraph (a) of this clause or who fails to file or amend the 
disclosure form to be filed or amended by paragraph (b) of this clause 
shall be subject to civil penalties as provided for by 31 U.S.C. 1352. 
An imposition of a civil penalty does not prevent the Government from 
seeking any other remedy that may be applicable.
    (2) Contractors may rely without liability on the representation 
made by their subcontractors in the certification and disclosure form.
    (f) Cost allowability. Nothing in this clause makes allowable or 
reasonable any costs which would otherwise be unallowable or 
unreasonable. Conversely, costs made specifically unallowable by the 
requirements in this clause will not be made allowable under any other 
provision.

                             (End of clause)

[55 FR 3193, Jan. 30, 1990, as amended at 55 FR 38517, Sept. 18, 1990; 
62 FR 40237, July 25, 1997]



Sec. 52.204-1  Approval of Contract.

    As prescribed in 4.103, insert the following clause:

                     Approval of Contract (DEC 1989)

    This contract is subject to the written approval of . . . . . 
[identify title of designated agency official here] and shall not be 
binding until so approved.

                             (End of clause)

[54 FR 5058, Jan. 31, 1989, as amended at 54 FR 48990, Nov. 28, 1989]



Sec. 52.204-2  Security Requirements.

    As prescribed in 4.404(a), insert the following clauses:

                    Security Requirements (AUG 1996)

    (a) This clause applies to the extent that this contract involves 
access to information classified Confidential, Secret, or Top Secret.
    (b) The Contractor shall comply with (1) the Security Agreement (DD 
Form 441), including the National Industrial Security Program Operating 
Manual (DOD 5220.22-M), and (2) any revisions to that manual, notice of 
which has been furnished to the Contractor.
    (c) If, subsequent to the date of this contract, the security 
classification or security requirements under this contract are changed 
by the Government and if the changes cause an increase or decrease in 
security costs or otherwise affect any other term or condition of this 
contract, the contract shall be subject to an equitable adjustment as if 
the changes were directed under the Changes clause of this contract.
    (d) The Contractor agrees to insert terms that conform substantially 
to the language of this clause, including this paragraph (d) but 
excluding any reference to the Changes clause of this contract, in all 
subcontracts under this contract that involve access to classified 
information.

                             (End of clause)

    Alternate I (APR 1984). If a cost contract for research and 
development with an educational institution is contemplated, add the 
following paragraphs (e), (f), and (g) to the basic clause:

    (e) If a change in security requirements, as provided in paragraphs 
(b) and (c), results (1) in a change in the security classification of 
this contract or any of its elements from an unclassified status or a 
lower classification to a higher classification, or (2) in more 
restrictive area controls than previously required, the Contractor shall 
exert every reasonable effort compatible with the Contractor's 
established policies to continue the performance of work under the 
contract in compliance with the change in security classification or 
requirements. If, despite reasonable efforts, the Contractor determines 
that the continuation of work under this contract is not practicable 
because of the change in security classification or requirements, the 
Contractor shall notify the Contracting Officer in writing. Until 
resolution of the problem is made by the Contracting Officer, the 
Contractor shall continue safeguarding all classified material as 
required by this contract.
    (f) After receiving the written notification, the Contracting 
Officer shall explore the circumstances surrounding the proposed change 
in security classification or requirements, and shall endeavor to work 
out a mutually satisfactory method whereby the Contractor

[[Page 26]]

can continue performance of the work under this contract.
    (g) If, 15 days after receipt by the Contracting Officer of the 
notification of the Contractor's stated inability to proceed, (1) the 
application to this contract of the change in security classification or 
requirements has not been withdrawn or (2) a mutually satisfactory 
method for continuing performance of work under this contract has not 
been agreed upon, the Contractor may request the Contracting Officer to 
terminate the contract in whole or in part. The Contracting Officer 
shall terminate the contract in whole or in part, as may be appropriate, 
and the termination shall be deemed a termination under the terms of the 
Termination for the Convenience of the Government clause.

    Alternate II (APR 1984). If employee identification is required for 
security or other reasons in a construction contract or architect-
engineer contract, add the following paragraph (e) to the basic clause:

    (e) The Contractor shall be responsible for furnishing to each 
employee and for requiring each employee engaged on the work to display 
such identification as may be approved and directed by the Contracting 
Officer. All prescribed identification shall immediately be delivered to 
the Contracting Officer, for cancellation upon the release of any 
employee. When required by the Contracting Officer, the Contractor shall 
obtain and submit fingerprints of all persons employed or to be employed 
on the project.

[48 FR 42478, Sept. 19, 1983, as amended at 61 FR 31617, June 20, 1996]



Sec. 52.204-3  Taxpayer Identification.

    As prescribed in 4.904, insert the following provision:

                   Taxpayer Identification (JUN 1997)

    (a) Definitions.
    Common parent, as used in this solicitation provision, means that 
corporate entity that owns or controls an affiliated group of 
corporations that files its Federal income tax returns on a consolidated 
basis, and of which the offeror is a member.
    Corporate status, as used in this solicitation provision, means a 
designation as to whether the offeror is a corporate entity, an 
unincorporated entity (e.g., sole proprietorship or partnership), or a 
corporation providing medical and health care services.
    Taxpayer Identification Number (TIN), as used in this solicitation 
provision, means the number required by the IRS to be used by the 
offeror in reporting income tax and other returns.
    (b) All offerors are required to submit the information required in 
paragraphs (c) through (e) of this solicitation provision in order to 
comply with reporting requirements of 26 U.S.C. 6041, 6041A, and 6050M 
and implementing regulations issued by the Internal Revenue Service 
(IRS). If the resulting contract is subject to reporting requirements 
described in FAR 4.903, the failure or refusal by the offeror to furnish 
the information may result in a 31 percent reduction of payments 
otherwise due under the contract.
    (c) Taxpayer Identification Number (TIN).
    (  ) TIN: __________.
    (  ) TIN has been applied for.
    (  ) TIN is not required because:
    (  ) Offeror is a nonresident alien, foreign corporation, or foreign 
partnership that does not have income effectively connected with the 
conduct of a trade or business in the U.S. and does not have an office 
or place of business or a fiscal paying agent in the U.S.;
    (  ) Offeror is an agency or instrumentality of a foreign 
government;
    (  ) Offeror is an agency or instrumentality of a Federal, state or 
local government;
    (  ) Other. State basis. __________.
    (d) Corporate Status.
    (  ) Corporation providing medical and health care services, or 
engaged in the billing and collecting of payments for such services;
    (  ) Other corporate entity;
    (  ) Not a corporate entity;
    (  ) Sole proprietorship
    (  ) Partnership
    (  ) Hospital or extended care facility described in 26 CFR 
501(c)(3) that is exempt from taxation under 26 CFR 501(a).
    (e) Common Parent.
    (  ) Offeror is not owned or controlled by a common parent as 
defined in paragraph (a) of this provision.
    (  ) Name and TIN of common parent:
Name____________________________________________________________________
TIN_____________________________________________________________________

                           (End of provision)

[53 FR 43394, Oct. 26, 1988, as amended at 54 FR 34757, Aug. 21, 1989; 
57 FR 44260, Sept. 24, 1992; 59 FR 11371, Mar. 10, 1994; 59 FR 17723, 
Apr. 14, 1994; 62 FR 40238, July 25, 1997]



Sec. 52.204-4  Printing/Copying Double-Sided on Recycled Paper.

    As prescribed in 4.304, insert the following clause:

       Printing/Copying Double-Sided on Recycled Paper (JUN 1996)

    (a) In accordance with Executive Order 12873, dated October 20, 
1993, as amended by Executive Order 12995, dated March 25, 1996, the 
Offeror/Contractor is encouraged to submit paper documents, such as 
offers, letters, or reports, that are printed/copied double-

[[Page 27]]

sided on recycled paper that has at least 20 percent postconsumer 
material.
    (b) The 20 percent standard applies to high-speed copier paper, 
offset paper, forms bond, computer printout paper, carbonless paper, 
file folders, white woven envelopes, and other uncoated printed and 
writing paper, such as writing and office paper, book paper, cotton 
fiber paper, and cover stock. An alternative to meeting the 20 percent 
postconsumer material standard is 50 percent recovered material content 
of certain industrial by-products.

                             (End of clause)

[60 FR 28494, May 31, 1995, as amended at 61 FR 31616, June 20, 1996]



Sec. 52.204-5  Women-Owned Business.

    As prescribed in 4.603(b), insert the following provision:

                     Women-Owned Business (OCT 1995)

    (a) Representation. The offeror represents that it {time}   is, 
{time}   is not a women-owned business concern.
    (b) Definition. Women-owned business concern, as used in this 
provision, means a concern which is at least 51 percent owned by one or 
more women; or in the case of any publicly owned business, at least 51 
percent of the stock of which is owned by one or more women; and whose 
management and daily business operations are controlled by one or more 
women.

                           (End of provision)

[60 FR 48264, Sept. 18, 1995, as amended at 61 FR 67413, Dec. 20, 1996]



Sec. 52.204-6  Data Universal Numbering System (DUNS) Number.

    As prescribed in 4.603(a), insert the following provision:

        Data Universal Numbering System (DUNS) Number (APR 1998)

    (a) The offeror shall enter, in the block with its name and address 
on the cover page of its offer, the annotation ``DUNS'' followed by the 
DUNS number that identifies the offeror's name and address exactly as 
stated in the offer. The DUNS number is a nine-digit number assigned by 
Dun and Bradstreet Information Services.
    (b) If the offeror does not have a DUNS number, it should contact 
Dun and Bradstreet directly to obtain one. A DUNS number will be 
provided immediately by telephone at no charge to the offeror. For 
information on obtaining a DUNS number, the offeror, if located within 
the United States, should call Dun and Bradstreet at 1-800-333-0505. The 
offeror should be prepared to provide the following information:
    (1) Company name.
    (2) Company address.
    (3) Company telephone number.
    (4) Line of business.
    (5) Chief executive officer/key manager.
    (6) Date the company was started.
    (7) Number of people employed by the company.
    (8) Company affiliation.
    (c) Offerors located outside the United States may obtain the 
location and phone number of the local Dun and Bradstreet Information 
Services office from the Internet home page at http://www.dnb.com/. If 
an offeror is unable to locate a local service center, it may send an e-
mail to Dun and Bradstreet at globalinfo@mail.dnb.com.

                           (End of provision)

[61 FR 67413, Dec. 20, 1996, as amended at 63 FR 9050, Feb. 23, 1998]



Sec. 52.205--52.206  [Reserved]



Sec. 52.207-1  Notice of Cost Comparison (Sealed-Bid).

    As prescribed in 7.305(a), insert the following provision:

            Notice of Cost Comparison (Sealed-Bid) (FEB 1993)

    (a) This solicitation is part of a Government cost comparison to 
determine whether accomplishing the specified work under contract or by 
Government performance is more economical. If Government performance is 
determined to be more economical, this solicitation will be canceled and 
no contract will be awarded.
    (b) The Government's cost estimate for performance by the Government 
will be based on the work statement in this solicitation and will be 
submitted by designated agency personnel to the Contracting Officer in a 
sealed envelope not later than the time set for bid opening. At the 
public bid opening, the Contracting Officer will open the bids and the 
envelope containing the cost estimate for Government performance and 
announce the result. This announcement will be based on an initial 
comparison of the cost of Government performance with the cost of 
contract performance, as indicated on the cost comparison form.
    (c) The abstract of bids, completed cost comparison form, and 
detailed data supporting the cost estimate for Government performance 
will be made available to interested parties for review for a period of 
__________ [insert a number from 15 to 30, depending on the complexity 
of the matter (see 7.306(a)(1)(iv)] working days, beginning with

[[Page 28]]

the date the documents are available to interested parties. The 
Government will not make a final determination either for contract or 
Government performance during this period. During this period, directly 
affected parties may file with the Contracting Officer written requests, 
based on specific objections, for administrative review of the cost-
comparison result under the agency appeals procedure. The appeals 
procedure shall be used only to resolve questions concerning the 
calculation of the cost comparison and will not apply to decisions 
regarding selection of one bidder in preference to another. Agency 
determinations under the appeals procedure shall be final.
    (d) After evaluation of bids and resolution of any requests under 
the appeals procedure, the Contracting Officer will either award a 
contract or cancel this solicitation. The completed cost comparison 
analysis will be made available to interested parties.
    (e) A cost estimate for Government performance is considered a bid 
for purposes of this solicitation's Late Modifications of Bids or 
Withdrawal of Bids provision, and a late modification that displaces an 
otherwise low cost estimate for Government performance shall not be 
considered.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1746, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985; 55 FR 25530, June 21, 1990; 57 FR 60575, 
Dec. 21, 1992]



Sec. 52.207-2  Notice of Cost Comparison (Negotiated).

    As prescribed in 7.305(b), insert the following provision:

            Notice of Cost Comparison (Negotiated) (FEB 1993)

    (a) This solicitation is part of a Government cost comparison to 
determine whether accomplishing the specified work under contract or by 
Government performance is more economical. If Government performance is 
determined to be more economical, this solicitation will be canceled and 
no contract will be awarded.
    (b) The Government's cost estimate for performance by the Government 
will be based on the work statement in this solicitation and will be 
submitted by designated agency personnel to the Contracting Officer in a 
sealed envelope not later than the time set for receipt of initial 
proposals.
    (c) After completion of proposal evaluation, negotiation, and 
selection of the most advantageous proposal, the Contracting Officer, in 
the presence of the preparer of the cost estimate for Government 
performance, will open the sealed cost estimate envelope. These 
officials will make a cost comparison before public announcement. 
Depending on whether the cost comparison result favors performance under 
contract or Government performance, the procedure in either subparagraph 
(1) or (2) following applies:
    (1) If the result of the cost comparison favors performance under 
contract and administrative approval is obtained, the Contracting 
Officer will award a contract and publicly reveal the completed cost 
comparison form showing the cost estimate for Government performance, 
its detailed supporting data, and the Contractor's name. However, this 
award is conditioned on the offer remaining the more economical 
alternative after (i) completion of a public review period of __ [insert 
a numeral from 15 to 30, depending upon the complexity of the matter 
(see 7.306(b)(3))] working days beginning with the date this information 
is available to interested parties and (ii) resolution of any requests 
for review under the agency appeals procedure (see paragraph (d) below). 
The Government assumes no liability for costs incurred during the 
periods specified in (i) and (ii). The Contracting Officer will then 
either notify the Contractor in writing that it may proceed with 
performance of the contract or will cancel the contract at no cost to 
the Government.
    (2) If the result of the cost comparison favors Government 
performance, the Contracting Officer will publicly disclose this result, 
the completed cost comparison form and its detailed supporting data, and 
the price of the offer most advantageous to the Government. After (i) 
completion of a public review period of __ [insert a numeral from 15 to 
30, depending upon the complexity of the matter (see 7.306(b)(3)] 
working days beginning with the date this information is available to 
interested parties and (ii) resolution of any requests for review under 
the agency appeals procedure (see paragraph (d) below), the Contracting 
Officer will either cancel this solicitation or award a contract, as 
appropriate.
    (d) During the public review period, directly affected parties may 
file with the Contracting Officer written requests, based on specific 
objections, for administrative review of the cost comparison result 
under the agency appeals procedure. The appeals procedure shall be used 
only to resolve questions concerning the calculation of the cost 
comparison and will not apply to questions concerning award to one 
offeror in preference to another. Agency determinations under the 
appeals procedure shall be final.
    (e) A cost estimate for Government performance is considered a 
proposal for purposes of this solicitation's Late Submissions, 
Modifications, and Withdrawal of Proposals or Quotations provision, and 
a late modification that displaces an otherwise low cost estimate for 
Government performance shall not be considered.

[[Page 29]]

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 25530, June 21, 1990; 
57 FR 60575, Dec. 21, 1992]



Sec. 52.207-3  Right of First Refusal of Employment.

    As prescribed in 7.305(c), insert the following clause:

             Right of First Refusal of Employment (NOV 1991)

    (a) The Contractor shall give Government employees who have been or 
will be adversely affected or separated as a result of award of this 
contract the right of first refusal for employment openings under the 
contract in positions for which they are qualified, if that employment 
is consistent with post-Government employment conflict of interest 
standards.
    (b) Within 10 days after contract award, the Contracting Officer 
will provide to the Contractor a list of all Government employees who 
have been or will be adversely affected or separated as a result of 
award of this contract.
    (c) The Contractor shall report to the Contracting Officer the names 
of individuals identified on the list who are hired within 90 days after 
contract performance begins. This report shall be forwarded within 120 
days after contract performance begins.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 52 FR 9039, Mar. 20, 1987; 
56 FR 55372, Oct. 25, 1991]



Sec. 52.207-4  Economic Purchase Quantity--Supplies.

    As prescribed in 7.203, insert the following provision:

             Economic Purchase Quantity--Supplies (AUG 1987)

    (a) Offerors are invited to state an opinion on whether the 
quantity(ies) of supplies on which bids, proposals or quotes are 
requested in this solicitation is (are) economically advantageous to the 
Government.
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
    (b) Each offeror who believes that acquisitions in different 
quantities would be more advantageous is invited to recommend an 
economic purchase quantity. If different quantities are recommended, a 
total and a unit price must be quoted for applicable items. An economic 
purchase quantity is that quantity at which a significant price break 
occurs. If there are significant price breaks at different quantity 
points, this information is desired as well.

                         Offeror Recommendations
------------------------------------------------------------------------
                                                       Price
                  Item                    Quantity   quotation    Total
------------------------------------------------------------------------
                                         .........  ...........  .......
                                         .........  ...........  .......
                                         .........  ...........  .......
------------------------------------------------------------------------

    (c) The information requested in this provision is being solicited 
to avoid acquisitions in disadvantageous quantities and to assist the 
Government in developing a data base for future acquisitions of these 
items. However, the Government reserves the right to amend or cancel the 
solicitation and resolicit with respect to any individual item in the 
event quotations received and the Government's requirements indicate 
that different quantities should be acquired.

                           (End of provision)

[50 FR 35479, Aug. 30, 1985, as amended at 52 FR 30078, Aug. 12, 1987]



Sec. 52.207-5  Option to Purchase Equipment.

    As prescribed in 7.404, insert a clause substantially the same as 
the following:

                 Option to Purchase Equipment (FEB 1995)

    (a) The Government may purchase the equipment provided on a lease or 
rental basis under this contract. The Contracting Officer may exercise 
this option only by providing a unilateral modification to the 
Contractor. The effective date of the purchase will be specified in the 
unilateral modification and may be any time during the period of the 
contract, including any extensions thereto.
    (b) Except for final payment and transfer of title to the 
Government, the lease or rental portion of the contract becomes complete 
and lease or rental charges shall be discontinued on the day immediately 
preceding the effective date of purchase specified in the unilateral 
modification required in paragraph (a) of this clause.
    (c) The purchase conversion cost of the equipment shall be computed 
as of the effective date specified in the unilateral modification 
required in paragraph (a) of this clause, on the basis of the purchase 
price set forth in the contract, minus the total purchase option credits 
accumulated during the period of lease or rental, calculated by the 
formula contained elsewhere in this contract.

[[Page 30]]

    (d) The accumulated purchase option credits available to determine 
the purchase conversion cost will also include any credits accrued 
during a period of lease or rental of the equipment under any previous 
Government contract if the equipment has been on continuous lease or 
rental. The movement of equipment from one site to another site shall be 
``continuous rental.''

                             (End of clause)

[59 FR 67026, Dec. 28, 1994]



Sec. 52.208-1--52.208-3  [Reserved]



Sec. 52.208-4  Vehicle Lease Payments.

    As prescribed in 8.1104(a), insert the following clause in 
solicitations and contracts for leasing motor vehicles, unless the motor 
vehicles are leased in foreign countries:

                    Vehicle Lease Payments (APR 1984)

    (a) Upon the submission of proper invoices or vouchers, the 
Government shall pay rent for each vehicle at the rate(s) specified in 
this contract.
    (b) Rent shall accrue from the beginning of this contract, or from 
the date each vehicle is delivered to the Government, whichever is 
later, and shall continue until the expiration of the contract term or 
the termination of this contract. However, rent shall accrue only for 
the period that each vehicle is in the possession of the Government.
    (c) Rent shall not accrue for any vehicle that the Contracting 
Officer determines does not comply with the Condition of Leased Vehicles 
clause of this contract or otherwise does not comply with the 
requirements of this contract, until the vehicle is replaced or the 
defects are corrected.
    (d) Rent shall not accrue for any vehicle during any period when the 
vehicle is unavailable or unusable as a result of the Contractor's 
failure to render services for the operation and maintenance of the 
vehicle as prescribed by this contract.
    (e) Rent stated in monthly terms shall be prorated on the basis of 
1/30th of the monthly rate for each day the vehicle is in the 
Government's possession. If this contract contains a mileage provision, 
the Government shall pay rent as provided in the Schedule.

                             (End of clause)



Sec. 52.208-5  Condition of Leased Vehicles.

    As prescribed in 8.1104(b), insert the following clause in 
solicitations and contracts for leasing motor vehicles, unless the motor 
vehicles are leased in foreign countries:

                 Condition of Leased Vehicles (APR 1984)

    Each vehicle furnished under this contract shall be of good quality 
and in safe operating condition, and shall comply with the Federal Motor 
Vehicle Safety Standards (49 CFR 571) and State safety regulations 
applicable to the vehicle. The Government shall accept or reject the 
vehicles promptly after receipt. If the Contracting Officer determines 
that any vehicle furnished is not in compliance with this contract, the 
Contracting Officer shall promptly inform the Contractor in writing. If 
the Contractor fails to replace the vehicle or correct the defects as 
required by the Contracting Officer, the Government may (a) by contract 
or otherwise, correct the defect or arrange for the lease of a similar 
vehicle and shall charge or set off against the Contractor any excess 
costs occasioned thereby, or (b) terminate the contract under the 
Default clause of this contract.

                             (End of clause)



Sec. 52.208-6  Marking of Leased Vehicles.

    As prescribed in 8.1104(c), insert the following clause in 
solicitations and contracts for leasing motor vehicles, unless the motor 
vehicles are leased in foreign countries:

                  Marking of Leased Vehicles (APR 1984)

    (a) The Government may place nonpermanent markings or decals, 
identifying the using agency, on each side, and on the front and rear 
bumpers, of any motor vehicle leased under this contract. The Government 
shall use markings or decals that are removable without damage to the 
vehicle.
    (b) The Contractor may use placards for temporary identification of 
vehicles except that the placards may not contain any references to the 
Contractor that may be construed as advertising or endorsement by the 
Government of the Contractor.

                             (End of clause)



Sec. 52.208-7  Tagging of Leased Vehicles.

    As prescribed in 8.1104(d), insert a clause substantially as 
follows:

                  Tagging of Leased Vehicles (MAY 1986)

    While it is the intent that vehicles leased under this contract will 
operate on Federal tags, the Government reserves the right to utilize 
State tags if necessary to accomplish its mission. Should State tags be 
required, the Contractor shall furnish the Government documentation 
necessary to allow acquisition of such tags. Federal tags are the 
responsibility of the Government.

[[Page 31]]

                             (End of clause)

[51 FR 19717, May 30, 1986]



Sec. 52.208-8  Helium Requirement Forecast and Required Sources for Helium.

    As prescribed in 8.505, insert the following clause:

 Helium Requirement Forecast and Required Sources for Helium (JUN 1997)

    (a) Definitions--
    Bureau helium distributor means a private helium distributor which 
has established and maintains eligibility to distribute helium purchased 
from the Bureau of Land Management, as specified in 30 CFR part 602.
    Bureau of Land Management, as used in this clause, means the 
Department of the Interior, Bureau of Land Management, Helium Field 
Operations, located at 801 South Fillmore Street, Amarillo, TX 79101-
3545.
    Helium requirement forecast means an estimate by the Contractor or 
subcontractor of the amount of helium required for performance of the 
contract or subcontract.
    Major helium requirement means a helium requirement during a 
calendar month of 5,000 or more standard cubic feet (measured at 14.7 
pounds per square inch absolute pressure and 70 degrees Fahrenheit 
temperature), including liquid helium gaseous equivalent. In any month 
in which the major requirement threshold is met, all helium purchased 
during that month is considered part of the major helium requirement.
    (b) Requirements--(1) Helium Requirement Forecast. The Contractor 
shall provide to the Contracting Officer a helium requirement forecast, 
point of contact, and telephone number within ten days of award.
    (2) Sources of Helium. Except for helium acquired by the Contractor 
before the award of this contract, and to the extent that supplies are 
readily available, the Contractor shall purchase all major requirements 
of helium from--
    (i) The Department of the Interior's Bureau of Land Management;
    (ii) A Bureau helium distributor (a copy of the ``List by Shipping 
Points of Private Distributors Eligible to Sell Helium to Federal 
Agencies,'' may be obtained from the Bureau of Land Management); or
    (iii) A General Services Administration Federal Supply Schedule 
contract, if use is authorized by the Contracting Officer (see FAR 
subpart 51.1);
    (3) Promptly upon award of any subcontract or order that involves a 
major helium requirement, the Contractor shall provide to the Bureau of 
Land Management, and to the Contracting Officer, written notification 
that includes--
    (i) The prime contract number;
    (ii) The name, address and telephone number of the subcontractor, 
including a point of contact; and
    (iii) A copy of the subcontractor's helium requirement forecast.
    (c) Subcontracts--(1) The Contractor shall insert this clause, 
including this paragraph (c), in any subcontract or order that involves 
furnishing of a major helium requirement.
    (2) When a subcontract involves a major helium requirement, the 
following statement shall be included: Helium furnished under this 
contract or order shall be helium that has been purchased from the 
Bureau of Land Management, or a listed Bureau helium distributor.

                             (End of clause)

[59 FR 67031, Dec. 28, 1994, as amended at 62 FR 40238, July 25, 1997]



Sec. 52.208-9  Contractor Use of Mandatory Sources of Supply.

    As prescribed in 8.003, insert the following clause:

        Contractor Use of Mandatory Sources of Supply (MAR 1996)

    (a) Certain supplies to be provided under this contract for use by 
the Government are required by law to be obtained from the Committee for 
Purchase from People Who Are Blind or Severely Disabled (Javits-Wagner-
O' Day Act (JWOD) (41 U.S.C. 48)). Additionally, certain of these 
supplies are available from the Defense Logistics Agency (DLA), the 
General Services Administration (GSA), or the Department of Veterans 
Affairs (VA). The Contractor shall obtain mandatory supplies to be 
provided for Government use under this contract from the specific 
sources indicated in the contract schedule.
    (b) The Contractor shall immediately notify the Contracting Officer 
if a mandatory source is unable to provide the supplies by the time 
required, or if the quality of supplies provided by the mandatory source 
is unsatisfactory. The Contractor shall not purchase the supplies from 
other sources until the Contracting Officer has notified the Contractor 
that the mandatory source has authorized purchase from other sources.
    (c) Price and delivery information for the mandatory supplies is 
available from the Contracting Officer for the supplies obtained through 
the DLA/GSA/VA distribution facilities. For mandatory supplies that are 
not available from DLA/GSA/VA, price and delivery information is 
available from the appropriate central nonprofit agency. Payments shall 
be made directly to the source making delivery. Points of contact for 
JWOD central nonprofit agencies are:


[[Page 32]]


(1) National Industries for the Blind (NIB) 1901 North Beauregard 
          Street, Suite 200 Alexandria, VA 22311-1705 (703) 998-0770
(2) NISH, 2235 Cedar Lane, Vienna, VA 22182-5200 (703) 560-6800

                             (End of clause)

[61 FR 2631, Jan. 26, 1996, as amended at 61 FR 67430, Dec. 20, 1996]



Sec. 52.209-1  Qualification Requirements.

    As prescribed in 9.206-2, insert the following clause:

                  Qualification Requirements (FEB 1995)

    (a) Definition: Qualification Requirement, as used in this clause, 
means a Government requirement for testing or other quality assurance 
demonstration that must be completed before award.
    (b) One or more qualification requirements apply to the supplies or 
services covered by this contract. For those supplies or services 
requiring qualification, whether the covered product or service is an 
end item under this contract or simply a component of an end item, the 
product, manufacturer, or source must have demonstrated that it meets 
the standards prescribed for qualification before award of this 
contract. The product, manufacturer, or source must be qualified at the 
time of award whether or not the name of the product, manufacturer, or 
source is actually included on a qualified products list, qualified 
manufacturers list, or qualified bidders list. Offerors should contact 
the agency activity designated below to obtain all requirements that 
they or their products or services, or their subcontractors or their 
products or services, must satisfy to become qualified and to arrange 
for an opportunity to demonstrate their abilities to meet the standards 
specified for qualification.

(Name)__________________________________________________________________
(Address)_______________________________________________________________
    (c) If an offeror, manufacturer, source, product or service covered 
by a qualification requirement has already met the standards specified, 
the relevant information noted below should be provided.

Offeror's Name__________________________________________________________
Manufacturer's Name_____________________________________________________
Source's Name___________________________________________________________
Item Name_______________________________________________________________
Service Identification__________________________________________________
Test Number_____________________________________________________________
(to the extent known)
    (d) Even though a product or service subject to a qualification 
requirement is not itself an end item under this contract, the product, 
manufacturer, or source must nevertheless be qualified at the time of 
award of this contract. This is necessary whether the Contractor or a 
subcontractor will ultimately provide the product or service in 
question. If, after award, the Contracting Officer discovers that an 
applicable qualification requirement was not in fact met at the time of 
award, the Contracting Officer may either terminate this contract for 
default or allow performance to continue if adequate consideration is 
offered and the action is determined to be otherwise in the Government's 
best interests.
    (e) If an offeror, manufacturer, source, product or service has met 
the qualification requirement but is not yet on a qualified products 
list, qualified manufacturers list, or qualified bidders list, the 
offeror must submit evidence of qualification prior to award of this 
contract. Unless determined to be in the Government's interest, award of 
this contract shall not be delayed to permit an offeror to submit 
evidence of qualification.
    (f) Any change in location or ownership of the plant where a 
previously qualified product or service was manufactured or performed 
requires reevaluation of the qualification. Similarly, any change in 
location or ownership of a previously qualified manufacturer or source 
requires reevaluation of the qualification. The reevaluation must be 
accomplished before the date of award.

                             (End of clause)

[53 FR 34229, Sept. 2, 1988; 53 FR 36028, Sept. 16, 1988, as amended at 
59 FR 67056, Dec. 28, 1994]



Sec. 52.209-3  First Article Approval--Contractor Testing.

    As prescribed in 9.308-1 (a) and (b), insert the following clause:

          First Article Approval--Contractor Testing (SEP 1989)

               [Contracting Officer shall insert details]

    (a) The Contractor shall test __ unit(s) of Lot/Item __ as specified 
in this contract. At least __ calendar days before the beginning of 
first article tests, the Contractor shall notify the Contracting 
Officer, in writing, of the time and location of the testing so that the 
Government may witness the tests.
    (b) The Contractor shall submit the first article test report within 
__ calendar days from the date of this contract to __ [insert address of 
the Government activity to receive the report] marked ``FIRST ARTICLE 
TEST REPORT: Contract No. ____, Lot/Item No. ____.'' Within __ calendar 
days after the Government receives the test report, the Contracting 
Officer shall notify the Contractor, in writing, of the conditional 
approval, approval, or disapproval of the first article. The notice of 
conditional approval or approval shall not relieve the Contractor from

[[Page 33]]

complying with all requirements of the specifications and all other 
terms and conditions of this contract. A notice of conditional approval 
shall state any further action required of the Contractor. A notice of 
disapproval shall cite reasons for the disapproval.
    (c) If the first article is disapproved, the Contractor, upon 
Government request, shall repeat any or all first article tests. After 
each request for additional tests, the Contractor shall make any 
necessary changes, modifications, or repairs to the first article or 
select another first article for testing. All costs related to these 
tests are to be borne by the Contractor, including any and all costs for 
additional tests following a disapproval. The Contractor shall then 
conduct the tests and deliver another report to the Government under the 
terms and conditions and within the time specified by the Government. 
The Government shall take action on this report within the time 
specified in paragraph (b) above. The Government reserves the right to 
require an equitable adjustment of the contract price for any extension 
of the delivery schedule, or for any additional costs to the Government 
related to these tests.
    (d) If the Contractor fails to deliver any first article report on 
time, or the Contracting Officer disapproves any first article, the 
Contractor shall be deemed to have failed to make delivery within the 
meaning of the Default clause of this contract.
    (e) Unless otherwise provided in the contract, and if the approved 
first article is not consumed or destroyed in testing, the Contractor 
may deliver the approved first article as part of the contract quantity 
if it meets all contract requirements for acceptance.
    (f) If the Government does not act within the time specified in 
paragraph (b) or (c) above, the Contracting Officer shall, upon timely 
written request from the Contractor, equitably adjust under the Changes 
clause of this contract the delivery or performance dates and/or the 
contract price, and any other contractual term affected by the delay.
    (g) Before first article approval, the acquisition of materials or 
components for, or the commencement of production of, the balance of the 
contract quantity is at the sole risk of the Contractor. Before first 
article approval, the costs thereof shall not be allocable to this 
contract for (1) progress payments, or (2) termination settlements if 
the contract is terminated for the convenience of the Government.
    (h) The Government may waive the requirement for first article 
approval test where supplies identical or similar to those called for in 
the schedule have been previously furnished by the offeror/contractor 
and have been accepted by the Government. The offeror/contractor may 
request a waiver.

                             (End of clause)

    Alternate I (JAN 1997). As prescribed in 9.308-1 (a)(2) and (b)(2), 
add the following paragraph (i) to the basic clause:

    (i) The Contractor shall produce both the first article and the 
production quantity at the same facility.

    Alternate II (SEP 1989). As prescribed in 9.308-1 (a)(3) and (b)(3), 
substitute the following paragraph (g) for paragraph (g) of the basic 
clause:

    (g) Before first article approval, the Contracting Officer may, by 
written authorization, authorize the Contractor to acquire specific 
materials or components or to commence production to the extent 
essential to meet the delivery schedules. Until first article approval 
is granted, only costs for the first article and costs incurred under 
this authorization are allocable to this contract for (1) progress 
payments, or (2) termination settlements if the contract is terminated 
for the convenience of the Government. If first article tests reveal 
deviations from contract requirements, the Contractor shall, at the 
location designated by the Government, make the required changes or 
replace all items produced under this contract at no change in the 
contract price.

[48 FR 42478, Sept. 19, 1983, as amended at 54 FR 34757, Aug. 21, 1989; 
55 FR 25531, June 21, 1990; 62 FR 238, Jan. 2, 1997]



Sec. 52.209-4  First Article Approval--Government Testing.

    As prescribed in 9.308-2 (a) and (b), insert the following clause:

          First Article Approval--Government Testing (SEP 1989)

               [Contracting Officer shall insert details]

    (a) The Contractor shall deliver __ units(s) of Lot/Item ____ within 
__ calendar days from the date of this contract to the Government at 
______ [insert name and address of the testing facility] for first 
article tests. The shipping documentation shall contain this contract 
number and the Lot/Item identification. The characteristics that the 
first article must meet and the testing requirements are specified 
elsewhere in this contract.
    (b) Within __ calendar days after the Government receives the first 
article, the Contracting Officer shall notify the Contractor, in 
writing, of the conditional approval, approval, or disapproval of the 
first article. The notice of conditional approval or approval shall not 
relieve the Contractor from complying with all requirements of the 
specifications and all other terms and conditions

[[Page 34]]

of this contract. A notice of conditional approval shall state any 
further action required of the Contractor. A notice of disapproval shall 
cite reasons for the disapproval.
    (c) If the first article is disapproved, the Contractor, upon 
Government request, shall submit an additional first article for 
testing. After each request, the Contractor shall make any necessary 
changes, modifications, or repairs to the first article or select 
another first article for testing. All costs related to these tests are 
to be borne by the Contractor, including any and all costs for 
additional tests following a disapproval. The Contractor shall furnish 
any additional first article to the Government under the terms and 
conditions and within the time specified by the Government. The 
Government shall act on this first article within the time limit 
specified in paragraph (b) above. The Government reserves the right to 
require an equitable adjustment of the contract price for any extension 
of the delivery schedule or for any additional costs to the Government 
related to these tests.
    (d) If the Contractor fails to deliver any first article on time, or 
the Contracting Officer disapproves any first article, the Contractor 
shall be deemed to have failed to make delivery within the meaning of 
the Default clause of this contract.
    (e) Unless otherwise provided in the contract, the Contractor--
    (1) May deliver the approved first article as a part of the contract 
quantity, provided it meets all contract requirements for acceptance and 
was not consumed or destroyed in testing; and
    (2) Shall remove and dispose of any first article from the 
Government test facility at the Contractor's expense.
    (f) If the Government does not act within the time specified in 
paragraph (b) or (c) above, the Contracting Officer shall, upon timely 
written request from the Contractor, equitably adjust under the Changes 
clause of this contract the delivery or performance dates and/or the 
contract price, and any other contractual term affected by the delay.
    (g) The Contractor is responsible for providing operating and 
maintenance instructions, spare parts support, and repair of the first 
article during any first article test.
    (h) Before first article approval, the acquisition of materials or 
components for, or the commencement of production of, the balance of the 
contract quantity is at the sole risk of the Contractor. Before first 
article approval, the costs thereof shall not be allocable to this 
contract for (1) progress payments, or (2) termination settlements if 
the contract is terminated for the convenience of the Government.
    (i) The Government may waive the requirement for first article 
approval test where supplies identical or similar to those called for in 
the schedule have been previously furnished by the Offeror/Contractor 
and have been accepted by the Government. The Offeror/Contractor may 
request a waiver.

                             (End of clause)

    Alternate I (JAN 1997). As prescribed in 9.308-2 (a)(2) and (b)(2), 
add the following paragraph (j) to the basic clause:

    (j) The Contractor shall produce both the first article and the 
production quantity at the same facility.

    Alternate II (SEP 1989). As prescribed in 9.308-2 (a)(3) and (b)(3) 
substitute the following paragraph (h) for paragraph (h) of the basic 
clause:

    (h) Before first article approval, the Contracting Officer may, by 
written authorization, authorize the Contractor to acquire specific 
materials or components or to commence production to the extent 
essential to meet the delivery schedules. Until first article approval 
is granted, only costs for the first article and costs incurred under 
this authorization are allocable to this contract for (1) progress 
payments, or (2) termination settlements if the contract is terminated 
for the convenience of the Government. If first article tests reveal 
deviations from contract requirements, the Contractor shall, at the 
location designated by the Government, make the required changes or 
replace all items produced under this contract at no change in the 
contract price.

[48 FR 42478, Sept. 19, 1983, as amended at 54 FR 34757, Aug. 21, 1989; 
62 FR 238, Jan. 2, 1997]



Sec. 52.209-5  Certification Regarding Debarment, Suspension, Proposed Debarment, and Other Responsibility Matters.

    As prescribed in 9.409(a), insert the following provision:

 Certification Regarding Debarment, Suspension, Proposed Debarment, and 
                 Other Responsibility Matters (MAR 1996)

    (a)(1) The Offeror certifies, to the best of its knowledge and 
belief, that--
    (i) The Offeror and/or any of its Principals--
    (A) Are (  ) are not (  ) presently debarred, suspended, proposed 
for debarment, or declared ineligible for the award of contracts by any 
Federal agency;
    (B) Have (  ) have not (  ), within a 3-year period preceding this 
offer, been convicted of or had a civil judgment rendered against them 
for: commission of fraud or a criminal offense in connection with 
obtaining, attempting to obtain, or performing a public

[[Page 35]]

(Federal, state, or local) contract or subcontract; violation of Federal 
or state antitrust statutes relating to the submission of offers; or 
commission of embezzlement, theft, forgery, bribery, falsification or 
destruction of records, making false statements, tax evasion, or 
receiving stolen property; and
    (C) Are (  ) are not (  ) presently indicted for, or otherwise 
criminally or civilly charged by a governmental entity with, commission 
of any of the offenses enumerated in subdivision (a)(1)(i)(B) of this 
provision.
    (ii) The Offeror has (  ) has not (  ), within a 3-year period 
preceding this offer, had one or more contracts terminated for default 
by any Federal agency.
    (2) Principals, for the purposes of this certification, means 
officers; directors; owners; partners; and, persons having primary 
management or supervisory responsibilities within a business entity 
(e.g., general manager; plant manager; head of a subsidiary, division, 
or business segment, and similar positions).
    This certification concerns a matter within the jurisdiction of an 
agency of the United States and the making of a false, fictitious, or 
fraudulent certification may render the maker subject to prosecution 
under section 1001, title 18, United States Code.
    (b) The Offeror shall provide immediate written notice to the 
Contracting Officer if, at any time prior to contract award, the Offeror 
learns that its certification was erroneous when submitted or has become 
erroneous by reason of changed circumstances.
    (c) A certification that any of the items in paragraph (a) of this 
provision exists will not necessarily result in withholding of an award 
under this solicitation. However, the certification will be considered 
in connection with a determination of the Offeror's responsibility. 
Failure of the Offeror to furnish a certification or provide such 
additional information as requested by the Contracting Officer may 
render the Offeror nonresponsible.
    (d) Nothing contained in the foregoing shall be construed to require 
establishment of a system of records in order to render, in good faith, 
the certification required by paragraph (a) of this provision. The 
knowledge and information of an Offeror is not required to exceed that 
which is normally possessed by a prudent person in the ordinary course 
of business dealings.
    (e) The certification in paragraph (a) of this provision is a 
material representation of fact upon which reliance was placed when 
making award. If it is later determined that the Offeror knowingly 
rendered an erroneous certification, in addition to other remedies 
available to the Government, the Contracting Officer may terminate the 
contract resulting from this solicitation for default.

                           (End of provision)

[54 FR 19827, May 8, 1989, as amended at 61 FR 2633, Jan. 26, 1996]



Sec. 52.209-6  Protecting the Government's Interest When Subcontracting With Contractors Debarred, Suspended, or Proposed for Debarment.

    As prescribed in 9.409(b), insert the following clause:

     Protecting the Government's Interest When Subcontracting With 
  Contractors Debarred, Suspended, or Proposed for Debarment (JUL 1995)

    (a) The Government suspends or debars Contractors to protect the 
Government's interests. The Contractor shall not enter into any 
subcontract in excess of $25,000 with a Contractor that is debarred, 
suspended, or proposed for debarment unless there is a compelling reason 
to do so.
    (b) The Contractor shall require each proposed first-tier 
subcontractor, whose subcontract will exceed $25,000, to disclose to the 
Contractor, in writing, whether as of the time of award of the 
subcontract, the subcontractor, or its principals, is or is not 
debarred, suspended, or proposed for debarment by the Federal 
Government.
    (c) A corporate officer or a designee of the Contractor shall notify 
the Contracting Officer, in writing, before entering into a subcontract 
with a party that is debarred, suspended, or proposed for debarment (see 
FAR 9.404 for information on the List of Parties Excluded From Federal 
Procurement and Nonprocurement Programs). The notice must include the 
following:
    (1) The name of the subcontractor.
    (2) The Contractor's knowledge of the reasons for the subcontractor 
being on the List of Parties Excluded From Federal Procurement and 
Nonprocurement Programs.
    (3) The compelling reason(s) for doing business with the 
subcontractor notwithstanding its inclusion on the List of Parties 
Excluded From Federal Procurement and Nonprocurement Programs.
    (4) The systems and procedures the Contractor has established to 
ensure that it is fully protecting the Government's interests when 
dealing with such subcontractor in view of the specific basis for the 
party's debarment, suspension, or proposed debarment.

                             (End of clause)

[56 FR 29138, June 25, 1991, as amended at 57 FR 44269, Sept. 24, 1992; 
60 FR 33066, June 26, 1995; 60 FR 34761, July 3, 1995]

[[Page 36]]



Sec. 52.211-1  Availability of Specifications Listed in the GSA Index of Federal Specifications, Standards and Commercial Item Descriptions, FPMR Part 101-29.

    As prescribed in 11.204(a), insert the following provision:

   Availability of Specifications Listed in the GSA Index of Federal 
 Specifications, Standards and Commercial Item Descriptions, FPMR Part 
                            101-29 (AUG 1998)

    (a) The GSA Index of Federal Specifications, Standards and 
Commercial Item Descriptions, FPMR Part 101-29, and copies of 
specifications, standards, and commercial item descriptions cited in 
this solicitation may be obtained for a fee by submitting a request to--
GSA Federal Supply Service, Specifications Section, Suite 8100, 470 East 
L'Enfant Plaza, SW, Washington, DC 20407, Telephone (202) 619-8925, 
Facsimile (202) 619-8978.
    (b) If the General Services Administration, Department of 
Agriculture, or Department of Veterans Affairs issued this solicitation, 
a single copy of specifications, standards, and commercial item 
descriptions cited in this solicitation may be obtained free of charge 
by submitting a request to the addressee in paragraph (a) of this 
provision. Additional copies will be issued for a fee.

                           (End of provision)

[63 FR 34063, June 22, 1998]



Sec. 52.211-2  Availability of Specifications Listed in the DoD Index of Specifications and Standards (DoDISS) and Descriptions Listed in the Acquisition 
          Management Systems and Data Requirements Control List, DoD 
          5010.12-L.

    As prescribed in 11.204(b), insert the following provision:

Availability of Specifications Listed in the DoD Index of Specifications 
   and Standards (DoDISS) and Descriptions Listed in the Acquisition 
  Management Systems and Data Requirements Control List, DoD 5010.12-L 
                               (AUG 1998)

    (a) Copies of specifications, standards, and data item descriptions 
cited in this solicitation may be obtained for a fee by submitting a 
request to the--Department of Defense Single Stock Point (DoDSSP), 
Building 4, Section D, 700 Robbins Avenue, Philadelphia, PA 19111-5094, 
Telephone (215) 697-2667/2179, Facsimile (215) 697-1462.
    (b) Order forms, pricing information, and customer support 
information may be obtained--
    (1) By telephone at (215) 697-2667/2179; or
    (2) Through the DoDSSP Internet site at http://www.dodssp.daps.mil.

                           (End of provision)

[63 FR 34063, June 22, 1998]



Sec. 52.211-3  Availability of Specifications Not Listed in the GSA Index of Federal Specifications, Standards and Commercial Item Descriptions.

    As prescribed in 11.204(c), insert a provision substantially the 
same as the following:

 Availability of Specifications Not Listed in the GSA Index of Federal 
  Specifications, Standards and Commercial Item Descriptions (JUN 1988)

    The specifications cited in this solicitation may be obtained from:
(Activity) address)_____________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(Telephone number)______________________________________________________
(Person to be contacted)________________________________________________
    The request should identify the solicitation number and the 
specification requested by date, title, and number, as cited in the 
solicitation.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 53 FR 17860, May 18, 1988. 
Redesignated and amended at 60 FR 48251, 48256, Sept. 18, 1995; 61 FR 
31663, June 20, 1996]



Sec. 52.211-4  Availability for Examination of Specifications Not Listed in the GSA Index of Federal Specifications, Standards and Commercial Item Descriptions.

    As prescribed in 11.204(d), insert a provision substantially the 
same as the following:

  Availability for Examination of Specifications Not Listed in the GSA 
     Index of Federal Specifications, Standards and Commercial Item 
                         Descriptions (JUN 1988)

    The specifications cited in this solicitation are not available for 
distribution. However, they may be examined at the following 
location(s):
(ACTIVITY)______________________________________________________________
(COMPLETE ADDRESS)______________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(TELEPHONE NUMBER)______________________________________________________
(PERSON TO BE CONTACTED)________________________________________________
(TIME(S) FOR VIEWING)___________________________________________________

[[Page 37]]

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 53 FR 17860, May 18, 1988. 
Redesignated and amended at 60 FR 48251, 48256, Sept. 18, 1995; 61 FR 
67430, Dec. 20, 1996]



Sec. 52.211-5  Material Requirements.

    As prescribed in 11.302, insert the following clause:

                    Material Requirements (OCT 1997)

    (a) Definitions.
    As used in this clause--
    New means composed of previously unused components, whether 
manufactured from virgin material, recovered material in the form of raw 
material, or materials and by-products generated from, and reused 
within, an original manufacturing process; provided that the supplies 
meet contract requirements, including but not limited to, performance, 
reliability, and life expectancy.
    Reconditioned means restored to the original normal operating 
condition by readjustments and material replacement.
    Recovered material means waste materials and by-products that have 
been recovered or diverted from solid waste including postconsumer 
material, but such term does not include those materials and by-products 
generated from, and commonly reused within, an original manufacturing 
process.
    Remanufactured means factory rebuilt to original specifications.
    Virgin material means previously unused raw material, including 
previously unused copper, aluminum, lead, zinc, iron, other metal or 
metal ore, or any undeveloped resource that is, or with new technology 
will become, a source of raw materials.
    (b) Unless this contract otherwise requires virgin material or 
supplies composed of or manufactured from virgin material, the 
Contractor shall provide supplies that are new, as defined in this 
clause.
    (c) A proposal to provide unused former Government surplus property 
shall include a complete description of the material, the quantity, the 
name of the Government agency from which acquired, and the date of 
acquisition.
    (d) A proposal to provide used, reconditioned, or remanufactured 
supplies shall include a detailed description of such supplies and shall 
be submitted to the Contracting Officer for approval.
    (e) Used, reconditioned, or remanufactured supplies, or unused 
former Government surplus property, shall not be used unless the 
Contractor has proposed the use of such supplies, and the Contracting 
Officer has authorized their use.

                             (End of clause)

[62 FR 44812, Aug. 22, 1997]



Sec. 52.211-6--52.211-7  [Reserved]



Sec. 52.211-8  Time of Delivery.

    As prescribed in 11.404(a)(2), insert the following clause:

                       Time of Delivery (JUN 1997)

    (a) The Government requires delivery to be made according to the 
following schedule:

                       REQUIRED DELIVERY SCHEDULE
              [Contracting Officer insert specific details]
------------------------------------------------------------------------
                                                  WITHIN DAYS AFTER DATE
        ITEM NO.                 QUANTITY               OF CONTRACT
------------------------------------------------------------------------
----------               ----------               ----------
----------               ----------               ----------
----------               ----------               ----------
------------------------------------------------------------------------

    The Government will evaluate equally, as regards time of delivery, 
offers that propose delivery of each quantity within the applicable 
delivery period specified above. Offers that propose delivery that will 
not clearly fall within the applicable required delivery period 
specified above, will be considered nonresponsive and rejected. The 
Government reserves the right to award under either the required 
delivery schedule or the proposed delivery schedule, when an offeror 
offers an earlier delivery schedule than required above. If the offeror 
proposes no other delivery schedule, the required delivery schedule 
above will apply.

                  OFFEROR'S PROPOSED DELIVERY SCHEDULE
------------------------------------------------------------------------
                                                  WITHIN DAYS AFTER DATE
        ITEM NO.                 QUANTITY               OF CONTRACT
------------------------------------------------------------------------
----------               ----------               ----------
----------               ----------               ----------
----------               ----------               ----------
------------------------------------------------------------------------

    (b) Attention is directed to the Contract Award provision of the 
solicitation that provides that a written award or acceptance of offer 
mailed, or otherwise furnished to the successful offeror, results in a 
binding contract. The Government will mail or otherwise furnish to the 
offeror an award or notice of award not later than the day award is 
dated. Therefore, the offeror should compute the time available for 
performance beginning with the actual date of award, rather than the 
date the written notice of award is received from the Contracting 
Officer through

[[Page 38]]

the ordinary mails. However, the Government will evaluate an offer that 
proposes delivery based on the Contractor's date of receipt of the 
contract or notice of award by adding (1) five calendar days for 
delivery of the award through the ordinary mails, or (2) one working day 
if the solicitation states that the contract or notice of award will be 
transmitted electronically. (The term working day excludes weekends and 
U.S. Federal holidays.) If, as so computed, the offered delivery date is 
later than the required delivery date, the offer will be considered 
nonresponsive and rejected.

                             (End of clause)

    Alternate I (APR 1984). If the delivery schedule is expressed in 
terms of specific calendar dates or specific periods and is based on an 
assumed date of award, the contracting officer may substitute the 
following paragraph (b) for paragraph (b) of the basic clause. The time 
may be expressed by substituting on or before; during the months --; or 
not sooner than -- or later than -- as headings for the third column of 
paragraph (a) the basic clause.

    (b) The delivery dates or specific periods above are based on the 
assumption that the Government will make award by ____ [Contracting 
Officer insert date]. Each delivery date in the delivery schedule above 
will be extended by the number of calendar days after the above date 
that the contract is in fact awarded. Attention is directed to the 
Contract Award provision of the solicitation that provides that a 
written award or acceptance of offer mailed or otherwise furnished to 
the successful offeror results in a binding contract. Therefore, the 
offeror should compute the time available for performance beginning with 
the actual date of award, rather than the date the written notice of 
award is received from the Contracting Officer through the ordinary 
mails.

    Alternate II (APR 1984). If the delivery schedule is expressed in 
terms of specific calendar dates or specific periods and is based on an 
assumed date the contractor will receive notice of award, the 
contracting officer may substitute the following paragraph (b) for 
paragraph (b) of the basic clause. The time may be expressed by 
substituting within days after the date of receipt of a written notice 
of award as the heading for the third column of paragraph (a) of the 
basic clause.

    (b) The delivery dates or specific periods above are based on the 
assumption that the successful offeror will receive notice of award by 
____ [Contracting Officer insert date]. Each delivery date in the 
delivery schedule above will be extended by the number of calendar days 
after the above date that the Contractor receives notice of award; 
provided, that the Contractor promptly acknowledges receipt of notice of 
award.

    Alternate III (APR 1984). If the delivery schedule is to be based on 
the actual date the contractor receives a written notice of award, the 
contracting officer may delete paragraph (b) of the basic clause. The 
time may be expressed by substituting within days after the date of 
receipt of a written notice of award as the heading for the third column 
of paragraph (a) of the basic clause.

[48 FR 42478, Sept. 19, 1983, as amended at 56 FR 41732, Aug. 22, 1991; 
60 FR 34739, July 3, 1995. Redesignated and amended at 60 FR 48251, 
48256, Sept. 18, 1995; 62 FR 40238, July 25, 1997]



Sec. 52.211-9  Desired and Required Time of Delivery.

    As prescribed in 11.404(a)(3), insert the following clause:

            Desired and Required Time of Delivery (JUN 1997)

    (a) The Government desires delivery to be made according to the 
following schedule:

                        DESIRED DELIVERY SCHEDULE
              [Contracting Officer insert specific details]
------------------------------------------------------------------------
                                                  WITHIN DAYS AFTER DATE
        ITEM NO.                 QUANTITY               OF CONTRACT
------------------------------------------------------------------------
--------                 --------                 --------
--------                 --------                 --------
--------                 --------                 --------
------------------------------------------------------------------------

    If the offeror is unable to meet the desired delivery schedule, it 
may, without prejudicing evaluation of its offer, propose a delivery 
schedule below. However, the offeror's proposed delivery schedule must 
not extend the delivery period beyond the time for delivery in the 
Government's required delivery schedule as follows:

                       REQUIRED DELIVERY SCHEDULE
              [Contracting Officer insert specific details]
------------------------------------------------------------------------
                                                  WITHIN DAYS AFTER DATE
        ITEM NO.                 QUANTITY               OF CONTRACT
------------------------------------------------------------------------
----------               ----------               ----------
----------               ----------               ----------
----------               ----------               ----------
------------------------------------------------------------------------


[[Page 39]]

    Offers that propose delivery of a quantity under such terms or 
conditions that delivery will not clearly fall within the applicable 
required delivery period specified above, will be considered 
nonresponsive and rejected. If the offeror proposes no other delivery 
schedule, the desired delivery schedule above will apply.

                  OFFEROR'S PROPOSED DELIVERY SCHEDULE
------------------------------------------------------------------------
                                                  WITHIN DAYS AFTER DATE
        ITEM NO.                 QUANTITY               OF CONTRACT
------------------------------------------------------------------------
----------               ----------               ----------
----------               ----------               ----------
----------               ----------               ----------
------------------------------------------------------------------------

    (b) Attention is directed to the Contract Award provision of the 
solicitation that provides that a written award or acceptance of offer 
mailed or otherwise furnished to the successful offeror results in a 
binding contract. The Government will mail or otherwise furnish to the 
offeror an award or notice of award not later than the day the award is 
dated. Therefore, the offeror shall compute the time available for 
performance beginning with the actual date of award, rather than the 
date the written notice of award is received from the Contracting 
Officer through the ordinary mails. However, the Government will 
evaluate an offer that proposes delivery based on the Contractor's date 
of receipt of the contract or notice of award by adding (1) five 
calendar days for delivery of the award through the ordinary mails, or 
(2) one working day if the solicitation states that the contract or 
notice of award will be transmitted electronically. (The term working 
day excludes weekends and U.S. Federal holidays.) If, as so computed, 
the offered delivery date is later than the required delivery date, the 
offer will be considered nonresponsive and rejected.

                             (End of clause)

    Alternate I (APR 1984). If the delivery schedule is expressed in 
terms of specific calendar dates or specific periods and is based on an 
assumed date of award, the contracting officer may substitute the 
following paragraph (b) for paragraph (b) of the basic clause. The time 
may be expressed by substituting on or before; during the months ____; 
or not sooner than ____, or later than ____ as headings for the third 
column of paragraph (a) of the basic clause.

    (b) The delivery dates or specific periods above are based on the 
assumption that the Government will make award by ____ [Contracting 
Officer insert date]. Each delivery date in the delivery schedule above 
will be extended by the number of calendar days after the above date 
that the contract is in fact awarded. Attention is directed to the 
Contract Award provision of the solicitation that provides that a 
written award or acceptance of offer mailed or otherwise furnished to 
the successful offeror results in a binding contract. Therefore, the 
offeror shall compute the time available for performance beginning with 
the actual date of award, rather than the date the written notice of 
award is received from the Contracting Officer through the ordinary 
mails.

    Alternate II (APR 1984). If the delivery schedule is expressed in 
terms of specific calendar dates or specific periods and is based on an 
assumed date the contractor receives notice of award, the contracting 
officer may substitute the following paragraph (b) for paragraph (b) of 
the basic clause. The time may be expressed by substituting within days 
after the date of receipt of a written notice of award as the heading of 
the third column of paragraph (a) of the basic clause.

    (b) The delivery dates or specific periods above are based on the 
assumption that the successful offeror will receive notice of award by 
____ [Contracting Officer insert date]. Each delivery date in the 
delivery schedule above will be extended by the number of calendar days 
after the above date that the Contractor receives notice of award; 
provided, that the Contractor promptly acknowledges receipt of notice of 
award.

    Alternate III (APR 1984). If the delivery schedule is to be based on 
the actual date the contractor receives a written notice of award, the 
contracting officer may delete paragraph (b) of the basic clause. The 
time may be expressed by substituting within days after the date of 
receipt of a written notice of award as the heading of the third column 
of paragraph (a) of the basic clause.

[48 FR 42478, Sept. 19, 1983, as amended at 56 FR 41732, Aug. 22, 1991; 
60 FR 34739, July 3, 1995. Redesignated and amended at 60 FR 48251, 
48256, Sept. 18, 1995; 62 FR 40238, July 25, 1997]



Sec. 52.211-10  Commencement, Prosecution, and Completion of Work.

    As prescribed in 11.404(b), insert the following clause in 
solicitations and contracts when a fixed-price construction contract is 
contemplated. The

[[Page 40]]

clause may be changed to accommodate the issuance of orders under 
indefinite-delivery contracts for construction.

      Commencement, Prosecution, and Completion of Work (APR 1984)

    The Contractor shall be required to (a) commence work under this 
contract within __ [Contracting Officer insert number] calendar days 
after the date the Contractor receives the notice to proceed, (b) 
prosecute the work diligently, and (c) complete the entire work ready 
for use not later than ____*. The time stated for completion shall 
include final cleanup of the premises.

                             (End of clause)

    *The Contracting Officer shall specify either a number of days after 
the date the contractor receives the notice to proceed, or a calendar 
date.

    Alternate I (APR 1984). If the completion date is expressed as a 
specific calendar date, computed on the basis of the contractor 
receiving the notice to proceed by a certain day, add the following 
paragraph to the basic clause:

    The completion date is based on the assumption that the successful 
offeror will receive the notice to proceed by ____ [Contracting Officer 
insert date]. The completion date will be extended by the number of 
calendar days after the above date that the Contractor receives the 
notice to proceed, except to the extent that the delay in issuance of 
the notice to proceed results from the failure of the Contractor to 
execute the contract and give the required performance and payment bonds 
within the time specified in the offer.

[48 FR 42478, Sept. 19, 1983. Redesignated and amended at 60 FR 48251, 
48256, Sept. 18, 1995]



Sec. 52.211-11  Liquidated Damages--Supplies, Services, or Research and Development.

    As prescribed in 11.504(a), the contracting officer may insert the 
following clause in solicitations and contracts when a fixed-price 
contract is contemplated for supplies, services, or research and 
development (see 11.502(b)):

Liquidated Damages--Supplies, Services, or Research and Development (APR 
                                  1984)

    (a) If the Contractor fails to deliver the supplies or perform the 
services within the time specified in this contract, or any extension, 
the Contractor shall, in place of actual damages, pay to the Government 
as fixed, agreed, and liquidated damages, for each calendar day of delay 
the sum of ____ [Contracting Officer insert amount].
    (b) Alternatively, if delivery or performance is so delayed, the 
Government may terminate this contract in whole or in part under the 
Default-Fixed-Price Supply and Service clause in this contract and in 
that event, the Contractor shall be liable for fixed, agreed, and 
liquidated damages accruing until the time the Government may reasonably 
obtain delivery or performance of similar supplies or services. The 
liquidated damages shall be in addition to excess costs under the 
Termination clause.
    (c) The Contractor shall not be charged with liquidated damages when 
the delay in delivery or performance arises out of causes beyond the 
control and without the fault or negligence of the Contractor as defined 
in the Default-Fixed-Price Supply and Service clause in this contract.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 54 FR 48990, Nov. 28, 1989. 
Redesignated and amended at 60 FR 48251, 48256, Sept. 18, 1995]



Sec. 52.211-12  Liquidated Damages--Construction.

    As prescribed in 11.504(b), the contracting officer may insert the 
following clause in solicitations and contracts for construction, except 
contracts on a cost-plus-fixed-fee basis (see 11.502(b)):

                    Liquidated Damages--Construction

    (a) If the Contractor fails to complete the work within the time 
specified in the contract, or any extension, the Contractor shall pay to 
the Government as liquidated damages, the sum of ____ [Contracting 
Officer insert] for each day of delay.
    (b) If the Government terminates the Contractor's right to proceed, 
the resulting damage will consist of liquidated damages until such 
reasonable time as may be required for final completion of the work 
together with any increased costs occasioned the Government in 
completing the work.
    (c) If the Government does not terminate the Contractor's right to 
proceed, the resulting damage will consist of liquidated damages until 
the work is completed or accepted.

                             (End of clause)

    Alternate I (APR 1984). If different completion dates are specified 
in the contract for separate parts or stages of the work, revise 
paragraph (a) of the

[[Page 41]]

clause to state the amount of liquidated damages for delay of each 
separate part or stage of the work.

[48 FR 42478, Sept. 19, 1983. Redesignated and amended at 60 FR 48251, 
48256, Sept. 18, 1995]



Sec. 52.211-13  Time Extensions.

    As prescribed in 11.504(c), insert the following clause:

                       Time Extensions (APR 1984)

    Notwithstanding any other provisions of this contract, it is 
mutually understood that the time extensions for changes in the work 
will depend upon the extent, if any, by which the changes cause delay in 
the completion of the various elements of construction. The change order 
granting the time extension may provide that the contract completion 
date will be extended only for those specific elements so delayed and 
that the remaining contract completion dates for all other portions of 
the work will not be altered and may further provide for an equitable 
readjustment of liquidated damages under the new completion schedule.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983. Redesignated and amended at 60 FR 48251, 
48256, Sept. 18, 1995; 61 FR 67430, Dec. 20, 1996]



Sec. 52.211-14  Notice of Priority Rating for National Defense Use.

    As prescribed in 11.604(a), insert the following provision:

      Notice of Priority Rating for National Defense Use (SEP 1990)

    Any contract awarded as a result of this solicitation will be a
[  ] DX rated order; [  ] DO rated order certified for national defense 
use under the Defense Priorities and Allocations System (DPAS) (15 CFR 
part 700), and the Contractor will be required to follow all of the 
requirements of this regulation. [Contracting Officer check appropriate 
box.]

                           (End of provision)

[51 FR 19717, May 30, 1986, as amended at 55 FR 38518, Sept. 18, 1990. 
Redesignated and amended at 60 FR 48251, 48256, Sept. 18, 1995]



Sec. 52.211-15  Defense Priority and Allocation Requirements.

    As prescribed in 11.604(b), insert the following clause:

         Defense Priority and Allocation Requirements (SEP 1990)

    This is a rated order certified for national defense use, and the 
Contractor shall follow all the requirements of the Defense Priorities 
and Allocations System regulation (15 CFR part 700).

                             (End of clause)

[51 FR 19717, May 30, 1986, as amended at 55 FR 38518, Sept. 18, 1990. 
Redesignated and amended at 60 FR 48251, 48256, Sept. 18, 1995]



Sec. 52.211-16  Variation in Quantity.

    As prescribed in 11.703(a), insert the following clause in 
solicitations and contracts when a fixed-price contract is contemplated 
for supplies, and for services that involve the furnishing of supplies:

                    Variation in Quantity (APR 1984)

    (a) A variation in the quantity of any item called for by this 
contract will not be accepted unless the variation has been caused by 
conditions of loading, shipping, or packing, or allowances in 
manufacturing processes, and then only to the extent, if any, specified 
in paragraph (b) below.
    (b) The permissible variation shall be limited to:
__ Percent increase [Contracting Officer insert percentage]
__ Percent decrease [Contracting Officer insert percentage]
    This increase or decrease shall apply to ____*

                             (End of clause)

    *Contracting Officer shall insert in the blank the designation(s) to 
which the percentages apply, such as (1) the total contract quantity, 
(2) item 1 only, (3) each quantity specified in the delivery schedule, 
(4) the total item quantity for each destination, or (5) the total 
quantity of each item without regard to destination.

[48 FR 42478, Sept. 19, 1983. Redesignated and amended at 60 FR 48251, 
48256, Sept. 18, 1995]



Sec. 52.211-17  Delivery of Excess Quantities.

    As prescribed in 11.703(b), insert the following clause:

                Delivery of Excess Quantities (SEP 1989)

    The Contractor is responsible for the delivery of each item quantity 
within allowable variations, if any. If the Contractor delivers and the 
Government receives quantities of any item in excess of the quantity 
called for (after considering any allowable variation in

[[Page 42]]

quantity), such excess quantities will be treated as being delivered for 
the convenience of the Contractor. The Government may retain such excess 
quantities up to $250 in value without compensating the Contractor 
therefor, and the Contractor waives all right, title, or interests 
therein. Quantities in excess of $250 will, at the option of the 
Government, either be returned at the Contractor's expense or retained 
and paid for by the Government at the contract unit price.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 54 FR 34757, Aug. 21, 1989. 
Redesignated and amended at 60 FR 48251, 48256, Sept. 18, 1995]



Sec. 52.211-18  Variation in Estimated Quantity.

    As prescribed in 11.703(c), insert the following clause in 
solicitations and contracts when a fixed-price construction contract is 
contemplated that authorizes a variation in the estimated quantity of 
unit-priced items:

               Variation in Estimated Quantity (APR 1984)

    If the quantity of a unit-priced item in this contract is an 
estimated quantity and the actual quantity of the unit-priced item 
varies more than 15 percent above or below the estimated quantity, an 
equitable adjustment in the contract price shall be made upon demand of 
either party. The equitable adjustment shall be based upon any increase 
or decrease in costs due solely to the variation above 115 percent or 
below 85 percent of the estimated quantity. If the quantity variation is 
such as to cause an increase in the time necessary for completion, the 
Contractor may request, in writing, an extension of time, to be received 
by the Contracting Officer within 10 days from the beginning of the 
delay, or within such further period as may be granted by the 
Contracting Officer before the date of final settlement of the contract. 
Upon the receipt of a written request for an extension, the Contracting 
Officer shall ascertain the facts and make an adjustment for extending 
the completion date as, in the judgement of the Contracting Officer, is 
justified.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983. Redesignated and amended at 60 FR 48251, 
48256, Sept. 18, 1995]



Sec. 52.212-1  Instructions to Offerors--Commercial Items.

    As prescribed in 12.301(b)(1), insert the following provision:

          Instructions to Offerors--Commercial Items (AUG 1998)

    (a) Standard industrial classification (SIC) code and small business 
size standard. The SIC code and small business size standard for this 
acquisition appear in Block 10 of the solicitation cover sheet (SF 
1449). However, the small business size standard for a concern which 
submits an offer in its own name, but which proposes to furnish an item 
which it did not itself manufacture, is 500 employees.
    (b) Submission of offers. Submit signed and dated offers to the 
office specified in this solicitation at or before the exact time 
specified in this solicitation. Offers may be submitted on the SF 1449, 
letterhead stationery, or as otherwise specified in the solicitation. As 
a minimum, offers must show--
    (1) The solicitation number;
    (2) The time specified in the solicitation for receipt of offers;
    (3) The name, address, and telephone number of the offeror;
    (4) A technical description of the items being offered in sufficient 
detail to evaluate compliance with the requirements in the solicitation. 
This may include product literature, or other documents, if necessary;
    (5) Terms of any express warranty;
    (6) Price and any discount terms;
    (7) ``Remit to'' address, if different than mailing address;
    (8) A completed copy of the representations and certifications at 
FAR 52.212-3;
    (9) Acknowledgment of Solicitation Amendments;
    (10) Past performance information, when included as an evaluation 
factor, to include recent and relevant contracts for the same or similar 
items and other references (including contract numbers, points of 
contact with telephone numbers and other relevant information); and
    (11) If the offer is not submitted on the SF 1449, include a 
statement specifying the extent of agreement with all terms, conditions, 
and provisions included in the solicitation. Offers that fail to furnish 
required representations or information, or reject the terms and 
conditions of the solicitation may be excluded from consideration.
    (c) Period for acceptance of offers. The offeror agrees to hold the 
prices in its offer firm for 30 calendar days from the date specified 
for receipt of offers, unless another time period is specified in an 
addendum to the solicitation.
    (d) Product samples. When required by the solicitation, product 
samples shall be submitted at or prior to the time specified for receipt 
of offers. Unless otherwise specified in this solicitation, these 
samples shall be submitted at no expense to the Government, and returned 
at the sender's request and expense, unless they are destroyed during 
preaward testing.

[[Page 43]]

    (e) Multiple offers. Offerors are encouraged to submit multiple 
offers presenting alternative terms and conditions or commercial items 
for satisfying the requirements of this solicitation. Each offer 
submitted will be evaluated separately.
    (f) Late offers. Offers or modifications of offers received at the 
address specified for the receipt of offers after the exact time 
specified for receipt of offers will not be considered.
    (g) Contract award (not applicable to Invitation for Bids). The 
Government intends to evaluate offers and award a contract without 
discussions with offerors. Therefore, the offeror's initial offer should 
contain the offeror's best terms from a price and technical standpoint. 
However, the Government reserves the right to conduct discussions if 
later determined by the Contracting Officer to be necessary. The 
Government may reject any or all offers if such action is in the public 
interest; accept other than the lowest offer; and waive informalities 
and minor irregularities in offers received.
    (h) Multiple awards. The Government may accept any item or group of 
items of an offer, unless the offeror qualifies the offer by specific 
limitations. Unless otherwise provided in the Schedule, offers may not 
be submitted for quantities less than those specified. The Government 
reserves the right to make an award on any item for a quantity less than 
the quantity offered, at the unit prices offered, unless the offeror 
specifies otherwise in the offer.
    (i) Availability of requirements documents cited in the 
solicitation. (1)(i) The GSA Index of Federal Specifications, Standards 
and Commercial Item Descriptions, FPMR Part 101-29, and copies of 
specifications, standards, and commercial item descriptions cited in 
this solicitation may be obtained for a fee by submitting a request to--
GSA Federal Supply Service Specifications Section, Suite 8100, 470 East 
L'Enfant Plaza, SW, Washington, DC 20407, Telephone (202) 619-8925, 
Facsimile (202) 619-8978.
    (ii) If the General Services Administration, Department of 
Agriculture, or Department of Veterans Affairs issued this solicitation, 
a single copy of specifications, standards, and commercial item 
descriptions cited in this solicitation may be obtained free of charge 
by submitting a request to the addressee in paragraph (i)(1)(i) of this 
provision. Additional copies will be issued for a fee.
    (2) The DoD Index of Specifications and Standards (DoDISS) and 
documents listed in it may be obtained from the--Department of Defense 
Single Stock Point (DoDSSP), Building 4, Section D, 700 Robbins Avenue, 
Philadelphia, PA 19111-5094, Telephone (215) 697-2667/2179, Facsimile 
(215) 697-1462.
    (i) Automatic distribution may be obtained on a subscription basis.
    (ii) Order forms, pricing information, and customer support 
information may be obtained--
    (A) By telephone at (215) 697-2667/2179; or
    (B) Through the DoDSSP Internet site at http://www.dodssp.daps.mil.
    (3) Nongovernment (voluntary) standards must be obtained from the 
organization responsible for their preparation, publication, or 
maintenance.
    (j) Data Universal Numbering System (DUNS) Number. (Applies to 
offers exceeding $25,000.) The offeror shall enter, in the block with 
its name and address on the cover page of its offer, the annotation 
``DUNS'' followed by the DUNS number that identifies the offeror's name 
and address. If the offeror does not have a DUNS number, it should 
contact Dun and Bradstreet to obtain one at no charge. An offeror within 
the United States may call 1-800-333-0505. The offeror may obtain more 
information regarding the DUNS number, including locations of local Dun 
and Bradstreet Information Services offices for offerors located outside 
the United States, from the Internet home page at http://www.dnb.com/. 
If an offeror is unable to locate a local service center, it may send an 
e-mail to Dun and Bradstreet at globalinfo@mail.dnb.com.

                           (End of provision)

[60 FR 48251, Sept. 18, 1995, as amended at 62 FR 40238, July 25, 1997; 
63 FR 9050, Feb. 23, 1998; 63 FR 34063, June 22, 1998]



Sec. 52.212-2  Evaluation--Commercial Items.

    As prescribed in 12.301(c), the Contracting Officer may insert a 
provision substantially as follows:

                 Evaluation--Commercial Items (JAN 1999)

    (a) The Government will award a contract resulting from this 
solicitation to the responsible offeror whose offer conforming to the 
solicitation will be most advantageous to the Government, price and 
other factors considered. The following factors shall be used to 
evaluate offers:
_______________________________________________________________________

_______________________________________________________________________
    (Contracting Officer shall insert the significant evaluation 
factors, such as (i) technical capability of the item offered to meet 
the Government requirement; (ii) price; (iii) past performance (see FAR 
15.304); (iv) small disadvantaged business participation; and include 
them in the relative order of importance of the evaluation factors, such 
as in descending order of importance.)
    Technical and past performance, when combined, are ________ 
(Contracting Officer

[[Page 44]]

state, in accordance with FAR 15.304, the relative importance of all 
other evaluation factors, when combined, when compared to price.)
    (b) Options. The Government will evaluate offers for award purposes 
by adding the total price for all options to the total price for the 
basic requirement. The Government may determine that an offer is 
unacceptable if the option prices are significantly unbalanced. 
Evaluation of options shall not obligate the Government to exercise the 
option(s).
    (c) A written notice of award or acceptance of an offer, mailed or 
otherwise furnished to the successful offeror within the time for 
acceptance specified in the offer, shall result in a binding contract 
without further action by either party. Before the offer's specified 
expiration time, the Government may accept an offer (or part of an 
offer), whether or not there are negotiations after its receipt, unless 
a written notice of withdrawal is received before award.

                           (End of provision)

[60 FR 48252, Sept. 18, 1995, as amended at 62 FR 51271, Sept. 30, 1997; 
63 FR 36124, July 1, 1998]

    Effective Date Note: At 63 FR 36124, July 1, 1998, section 52.212-2 
was amended by revising the provision date from ``(AUG 1996)'' to ``(JAN 
1999)''; and in the parenthetical following paragraph (a) of the 
provision by inserting ``; (iv) small disadvantaged business 
participation;'' after ``(see FAR 15.304)'', effective Jan. 1, 1998.



Sec. 52.212-3  Offeror Representations and Certifications--Commercial Items.

    As prescribed in 12.301(b)(2), insert the following provision:

 Offeror Representations and Certifications--Commercial Items (JAN 1999)

    (a) Definitions. As used in this provision:
    Emerging small business means a small business concern whose size is 
no greater than 50 percent of the numerical size standard for the 
standard industrial classification code designated.
    Small business concern means a concern, including its affiliates, 
that is independently owned and operated, not dominant in the field of 
operation in which it is bidding on Government contracts, and qualified 
as a small business under the criteria in 13 CFR Part 121 and size 
standards in this solicitation.
    Women-owned small business concern means a small business concern--
    (1) Which is at least 51 percent owned by one or more women or, in 
the case of any publicly owned business, at least 51 percent of the 
stock of which is owned by one or more women; and
    (2) Whose management and daily business operations are controlled by 
one or more women.
    Women-owned business concern means a concern which is at least 51 
percent owned by one or more women; or in the case of any publicly owned 
business, at least 51 percent of the stock of which is owned by one or 
more women; and whose management and daily business operations are 
controlled by one or more women.
    (b) Taxpayer identification number (TIN) (26 U.S.C. 6050M). (1) 
Taxpayer Identification Number (TIN).
    {time}  TIN: ________________.
    {time}  TIN has been applied for.
    {time}  TIN is not required because:
    {time}  Offeror is a nonresident alien, foreign corporation, or 
foreign partnership that does not have income effectively connected with 
the conduct of a trade or business in the U.S. and does not have an 
office or place of business or a fiscal paying agent in the U.S.;
    {time}  Offeror is an agency or instrumentality of a foreign 
government;
    {time}  Offeror is an agency or instrumentality of a Federal, state, 
or local government;
    {time}  Other. State basis. ________________
    (2) Corporate Status.
    {time}  Corporation providing medical and health care services, or 
engaged in the billing and collecting of payments for such services;
    {time}  Other corporate entity;
    {time}  Not a corporate entity:
    {time}  Sole proprietorship
    {time}  Partnership
    {time}  Hospital or extended care facility described in 26 CFR 
501(c)(3) that is exempt from taxation under 26 CFR 501(a).
    (3) Common Parent.
    {time}  Offeror is not owned or controlled by a common parent.
    Name and TIN of common parent:
Name____________________________________________________________________
TIN_____________________________________________________________________
    (c) Offerors must complete the following representations when the 
resulting contract is to be performed inside the United States, its 
territories or possessions, Puerto Rico, the Trust Territory of the 
Pacific Islands, or the District of Columbia. Check all that apply.
    (1) Small business concern. The offeror represents as part of its 
offer that it {time}  is, {time}  is not a small business concern.
    (2) Small disadvantaged business concern. The offeror represents, 
for general statistical purposes, that it {time}  is, {time}  is not, a 
small disadvantaged business concern as defined in 13 CFR 124.1002.
    (3) Women-owned small business concern. The offeror represents that 
it {time}  is, {time}  is not a women-owned small business concern.

[[Page 45]]

    Note: Complete paragraphs (c)(4) and (c)(5) only if this 
solicitation is expected to exceed the simplified acquisition threshold.
    (4) Women-owned business concern. The offeror represents that it 
{time}  is, {time}  is not, a women-owned business concern.
    (5) Tie bid priority for labor surplus area concerns. If this is an 
invitation for bid, small business offerors may identify the labor 
surplus areas in which costs to be incurred on account of manufacturing 
or production (by offeror or first-tier subcontractors) amount to more 
than 50 percent of the contract price:
_______________________________________________________________________
    (6) Small Business Size for the Small Business Competitiveness 
Demonstration Program and for the Targeted Industry Categories under the 
Small Business Competitiveness Demonstration Program. [Complete only if 
the offeror has represented itself to be a small business concern under 
the size standards for this solicitation.]
    (i) (Complete only for solicitations indicated in an addendum as 
being set-aside for emerging small businesses in one of the four 
designated industry groups (DIGs).) The offeror represents as part of 
its offer that it {time}  is, {time}  is not an emerging small business.
    (ii) (Complete only for solicitations indicated in an addendum as 
being for one of the targeted industry categories (TICs) or four 
designated industry groups (DIGs).) Offeror represents as follows:
    (A) Offeror's number of employees for the past 12 months (check the 
Employees column if size standard stated in the solicitation is 
expressed in terms of number of employees); or
    (B) Offeror's average annual gross revenue for the last 3 fiscal 
years (check the Average Annual Gross Number of Revenues column if size 
standard stated in the solicitation is expressed in terms of annual 
receipts)
(Check one of the following):

 
           No. of Employees                Avg. Annual Gross Revenues
 
__ 50 or fewer                          __ $1 million or less
__ 51-100                               __ $1,000,001-$2 million
__ 101-250                              __ $2,000,001-$3.5 million
__ 251-500                              __ $3,500,001-$5 million
__ 501-750                              __ $5,000,001-$10 million
__ 751-1,000                            __ $10,000,001-$17 million
__ Over 1,000                           __ Over $17 million
 

    (7) (Complete only if the solicitation contains the clause at FAR 
52.219-23, Notice of Price Evaluation Adjustment for Small Disadvantaged 
Business Concerns, or FAR 52.219-25, Small Disadvantaged Business 
Participation Program--Disadvantaged Status and Reporting, and the 
offeror desires a benefit based on its disadvantaged status.)
    (i) General. The offeror represents that either--
    (A) It {time}  is, {time}  is not certified by the Small Business 
Administration as a small disadvantaged business concern and is listed, 
on the date of this representation, on the register of small 
disadvantaged business concerns maintained by the Small Business 
Administration, and that no material change in disadvantaged ownership 
and control has occurred since its certification, and, where the concern 
is owned by one or more individuals claiming disadvantaged status, the 
net worth of each individual upon whom the certification is based does 
not exceed $750,000 after taking into account the applicable exclusions 
set forth at 13 CFR 124.104(c)(2); or
    (B) It {time}  has, {time}  has not submitted a completed 
application to the Small Business Administration or a Private Certifier 
to be certified as a small disadvantaged business concern in accordance 
with 13 CFR 124, Subpart B, and a decision on that application is 
pending, and that no material change in disadvantaged ownership and 
control has occurred since its application was submitted.
    (ii) Joint Ventures under the Price Evaluation Adjustment for Small 
Disadvantaged Business Concerns. The offeror represents, as part of its 
offer, that it is a joint venture that complies with the requirements in 
13 CFR 124.1002(f) and that the representation in paragraph (c)(7)(i) of 
this provision is accurate for the small disadvantaged business concern 
that is participating in the joint venture. [The offeror shall enter the 
name of the small disadvantaged business concern that is participating 
in the joint venture: ____________.]
    (d) Certifications and representations required to implement 
provisions of Executive Order 11246--
    (1) Certification of non-segregated facilities. (Applies only if the 
contract amount is expected to exceed $10,000)--
    By submission of this offer, the offeror certifies that it does not 
and will not maintain or provide for its employees, any facilities that 
are segregated on the basis of race, color, religion, or national origin 
because of habit, local custom, or otherwise and that it does not and 
will not permit its employees to perform their services at any location 
where segregated facilities are maintained. The offeror agrees that a 
breach of this certification is a violation of the Equal Opportunity 
clause in the contract.
    (2) Previous Contracts and Compliance. The offeror represents that--
    (i) It {time}  has, {time}  has not, participated in a previous 
contract or subcontract subject either to the Equal Opportunity clause 
of this solicitation, the clause originally contained in Section 310 of 
Executive Order 10925, or the clause contained in Section 201 of 
Executive Order 11114; and
    (ii) It {time}  has, {time}  has not, filed all required compliance 
reports.
    (3) Affirmative Action Compliance. The offeror represents that--
    (i) It {time}  has developed and has on file, {time}   has not 
developed and does not have on

[[Page 46]]

file, at each establishment, affirmative action programs required by 
rules and regulations of the Secretary of Labor (41 CFR Subparts 60-1 
and 60-2), or
    (ii) It {time}  has not previously had contracts subject to the 
written affirmative action programs requirement of the rules and 
regulations of the Secretary of Labor.
    (e) Certification Regarding Payments to Influence Federal 
Transactions (31 U.S.C. 1352). (Applies only if the contract is expected 
to exceed $100,000.) By submission of its offer, the offeror certifies 
to the best of its knowledge and belief that no Federal appropriated 
funds have been paid or will be paid to any person for influencing or 
attempting to influence an officer or employee of any agency, a Member 
of Congress, an officer or employee of Congress or an employee of a 
Member of Congress on his or her behalf in connection with the award of 
any resultant contract.
    (f) Buy American Act--Trade Agreements--Balance of Payments Program 
Certificate. (Applies only if FAR clause 52.225-9, Buy American Act--
Trade Agreement--Balance of Payments Program, is included in this 
solicitation.)
    (1) The offeror hereby certifies that each end product, except those 
listed in paragraph (f)(2) of this provision, is a domestic end product 
(as defined in the clause entitled ``Buy American Act--Trade Agreements 
Balance of Payments Program'') and that components of unknown origin 
have been considered to have been mined, produced, or manufactured 
outside the United States, a designated country, a North American Free 
Trade Agreement (NAFTA) country, or a Caribbean Basin country, as 
defined in section 25.401 of the Federal Acquisition Regulation.
    (2) Excluded End Products:

 
           Line item No.                      Country of origin
 
______________________.............   ______________________
______________________.............   ______________________
 

                           (List as necessary)

    (3) Offers will be evaluated by giving certain preferences to 
domestic end products, designated country end products, NAFTA country 
end products, and Caribbean Basin country end products over other end 
products. In order to obtain these preferences in the evaluation of each 
excluded end product listed in paragraph (f)(2) of this provision, 
offerors must identify and certify below those excluded end products 
that are designated or NAFTA country end products, or Caribbean Basin 
country end products. Products that are not identified and certified 
below will not be deemed designated country end products, NAFTA country 
end products, or Caribbean Basin country end products. Offerors must 
certify by inserting the applicable line item numbers in the following:
    (i) The offeror certifies that the following supplies qualify as 
``designated or NAFTA country end products'' as those terms are defined 
in the clause entitled ``Buy American Act--Trade Agreements--Balance of 
Payments Program:''

_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________
[Insert line item numbers]
    (ii) The offeror certifies that the following supplies qualify as 
Caribbean Basin country end products as that term is defined in the 
clause entitled ``Buy American Act--Trade Agreements--Balance of 
Payments Program'':

_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________
[Insert line item numbers]
    (4) Offers will be evaluated in accordance with FAR Part 25.
    (g)(1) Buy American Act--North American Free Trade Agreement 
Implementation Act--Balance of Payments Program. (Applies only if FAR 
clause 52.22521, Buy American Act--North American Free Trade Agreement 
Implementation Act--Balance of Payments Program, is included in this 
solicitation.)
    (i) The offeror certifies that each end product being offered, 
except those listed in paragraph (g)(1)(ii) of this provision, is a 
domestic end product (as defined in the clause entitled ``Buy American 
Act--North American Free Trade Agreement Implementation Act--Balance of 
Payments Program,'' and that components of unknown origin have been 
considered to have been mined, produced, or manufactured outside the 
United States.
    (ii) Excluded End Products:

 
           Line item No.                      Country of origin
 
____________________...............   ______________________
____________________...............   ______________________
 

                           [List as necessary]

    (iii) Offers will be evaluated by giving certain preferences to 
domestic end products or NAFTA country end products over other end 
products. In order to obtain these preferences in the evaluation of each 
excluded end product listed in paragraph (g)(1)(ii) of this provision, 
offerors must identify and certify below those excluded end products 
that are NAFTA country end products. Products that are not identified 
and certified below will not be deemed NAFTA country end products. The 
offeror certifies that the following supplies qualify as NAFTA country 
end products as that term is defined in the clause entitled ``Buy 
American Act--North American Free Trade Agreement Implementation Act--
Balance of Payments Program'':


[[Page 47]]


_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________
[Insert line item numbers)
    (iv) Offers will be evaluated in accordance with part 25 of the 
Federal Acquisition Regulation. In addition, if this solicitation is for 
supplies for use outside the United States, an evaluation factor of 50 
percent will be applied to offers of end products that are not domestic 
or NAFTA country end products.
    (2) Alternate I. If Alternate I to the clause at 52.225-21 is 
included in this solicitation, substitute the following paragraph 
(g)(1)(iii) for paragraph (g)(1)(iii) of this provision:
    (g)(1)(iii) Offers will be evaluated by giving certain preferences 
to domestic end products or Canadian end products over other end 
products. In order to obtain these preferences in the evaluation of each 
excluded end product listed in paragraph (b) of this provision, offerors 
must identify and certify below those excluded end products that are 
Canadian end products. Products that are not identified and certified 
below will not be deemed Canadian end products.
    The offeror certifies that the following supplies qualify as 
Canadian end products as that term is defined in the clause entitled 
``Buy American Act--North American Free Trade Agreement Implementation 
Act--Balance of Payments Program'':

_______________________________________________________________________
[Insert line item numbers]
    (h) Certification Regarding Debarment, Suspension or Ineligibility 
for Award (Executive Order 12549). The offeror certifies, to the best of 
its knowledge and belief, that--
    (1) The offeror and/or any of its principals {time}   are, {time}   
are not presently debarred, suspended, proposed for debarment, or 
declared ineligible for the award of contracts by any Federal agency, 
and
    (2) {time}  Have, {time}  have not, within a three-year period 
preceding this offer, been convicted of or had a civil judgment rendered 
against them for: commission of fraud or a criminal offense in 
connection with obtaining, attempting to obtain, or performing a 
Federal, state or local government contract or subcontract; violation of 
Federal or state antitrust statutes relating to the submission of 
offers; or commission of embezzlement, theft, forgery, bribery, 
falsification or destruction of records, making false statements, tax 
evasion, or receiving stolen property; and {time}  are, {time}  are not 
presently indicted for, or otherwise criminally or civilly charged by a 
Government entity with, commission of any of these offenses.

                           (End of provision)

    Alternate I (OCT 1998). As prescribed in 12.301(b)(2), add the 
following paragraph (c)(8) to the basic provision:

    (8) (Complete if the offeror has represented itself as disadvantaged 
in paragraph (c)(2) or (c)(7) of this provision.) [The offeror shall 
check the category in which its ownership falls]:

    __Black American.
    __Hispanic American.
    __Native American (American Indians, Eskimos, Aleuts, or Native 
Hawaiians).
    __Asian-Pacific American (persons with origins from Burma, Thailand, 
Malaysia, Indonesia, Singapore, Brunei, Japan, China, Taiwan, Laos, 
Cambodia (Kampuchea), Vietnam, Korea, The Philippines, U.S. Trust 
Territory of the Pacific Islands (Republic of Palau), Republic of the 
Marshall Islands, Federated States of Micronesia, the Commonwealth of 
the Northern Mariana Islands, Guam, Samoa, Macao, Hong Kong, Fiji, 
Tonga, Kiribati, Tuvalu, or Nauru).
    __Subcontinent Asian (Asian-Indian) American (persons with origins 
from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives 
Islands, or Nepal).
    __Individual/concern, other than one of the preceding.

    Alternate II (OCT 1998). As prescribed in 12.301(b)(2), add the 
following paragraph (c)(7)(iii) to the basic provision:

    (iii) Address. The offeror represents that its address __is, __is 
not in a region for which a small disadvantaged business procurement 
mechanism is authorized and its address has not changed since its 
certification as a small disadvantaged business concern or submission of 
its application for certification. The list of authorized small 
disadvantaged business procurement mechanisms and regions is posted at 
http://www.arnet.gov/References/sdbadjustments.htm. The offeror shall 
use the list in effect on the date of this solicitation. ``Address,'' as 
used in this provision, means the address of the offeror as listed on 
the Small Business Administration's register of small disadvantaged 
business concerns or the address on the completed application that the 
concern has submitted to the Small Business Administration or a Private 
Certifier in accordance with 13 CFR part 124, subpart B. For joint 
ventures, ``address'' refers to the address of the small disadvantaged 
business concern that is participating in the joint venture.

[60 FR 48252, Sept. 18, 1995, as amended at 60 FR 54818, Oct. 26, 1995; 
61 FR 2633, Jan. 26, 1996; 61 FR 31648, June 20, 1996; 62 FR 233, Jan. 
2, 1997; 62 FR 238, 261, Jan. 2, 1997; 63 FR 35724, June 30, 1998; 63 FR 
36124, July 1, 1998; 63 FR 52427, Sept. 30, 1998]

    Effective Date Note: At 63 FR 36124, July 1, 1998, section 52.212-3 
was amended by revising the provision date from ``(OCT 1998)'' to ``(JAN 
1999)''; and the introductory text of paragraph (c)(7), effective Jan. 
1, 1998. For

[[Page 48]]

the convenience of the user, the superseded text is set forth as 
follows:

Sec. 52.212-3  Offeror Representations and Certifications--Commercial 
          Items.

                                * * * * *

    (c) * * *
    (7) (Complete only if the solicitation contains the clause at FAR 
52.219-23, Notice of Price Evaluation Adjustment for Small Disadvantaged 
Business Concerns, and the offeror desires a benefit based on its 
disadvantaged status.)

                                * * * * *



Sec. 52.212-4  Contract Terms and Conditions--Commercial Items.

    As prescribed in 12.301(b)(3), insert the following clause:

       Contract Terms and Conditions--Commercial Items (APR 1998)

    (a) Inspection/Acceptance. The Contractor shall only tender for 
acceptance those items that conform to the requirements of this 
contract. The Government reserves the right to inspect or test any 
supplies or services that have been tendered for acceptance. The 
Government may require repair or replacement of nonconforming supplies 
or reperformance of nonconforming services at no increase in contract 
price. The Government must exercise its postacceptance rights (1) within 
a reasonable time after the defect was discovered or should have been 
discovered; and (2) before any substantial change occurs in the 
condition of the item, unless the change is due to the defect in the 
item.
    (b) Assignment. The Contractor or its assignee's rights to be paid 
amounts due as a result of performance of this contract, may be assigned 
to a bank, trust company, or other financing institution, including any 
Federal lending agency in accordance with the Assignment of Claims Act 
(31 U.S.C. 3727).
    (c) Changes. Changes in the terms and conditions of this contract 
may be made only by written agreement of the parties.
    (d) Disputes. This contract is subject to the Contract Disputes Act 
of 1978, as amended (41 U.S.C. 601-613). Failure of the parties to this 
contract to reach agreement on any request for equitable adjustment, 
claim, appeal or action arising under or relating to this contract shall 
be a dispute to be resolved in accordance with the clause at FAR 52.233-
1, Disputes, which is incorporated herein by reference. The Contractor 
shall proceed diligently with performance of this contract, pending 
final resolution of any dispute arising under the contract.
    (e) Definitions. The clause at FAR 52.202-1, Definitions, is 
incorporated herein by reference.
    (f) Excusable delays. The Contractor shall be liable for default 
unless nonperformance is caused by an occurrence beyond the reasonable 
control of the Contractor and without its fault or negligence such as, 
acts of God or the public enemy, acts of the Government in either its 
sovereign or contractual capacity, fires, floods, epidemics, quarantine 
restrictions, strikes, unusually severe weather, and delays of common 
carriers. The Contractor shall notify the Contracting Officer in writing 
as soon as it is reasonably possible after the commencement of any 
excusable delay, setting forth the full particulars in connection 
therewith, shall remedy such occurrence with all reasonable dispatch, 
and shall promptly give written notice to the Contracting Officer of the 
cessation of such occurrence.
    (g) Invoice. The Contractor shall submit an original invoice and 
three copies (or electronic invoice, if authorized,) to the address 
designated in the contract to receive invoices. An invoice must 
include--
    (1) Name and address of the Contractor;
    (2) Invoice date;
    (3) Contract number, contract line item number and, if applicable, 
the order number;
    (4) Description, quantity, unit of measure, unit price and extended 
price of the items delivered;
    (5) Shipping number and date of shipment including the bill of 
lading number and weight of shipment if shipped on Government bill of 
lading;
    (6) Terms of any prompt payment discount offered;
    (7) Name and address of official to whom payment is to be sent; and
    (8) Name, title, and phone number of person to be notified in event 
of defective invoice.
    Invoices will be handled in accordance with the Prompt Payment Act 
(31 U.S.C. 3903) and Office of Management and Budget (OMB) Circular A-
125, Prompt Payment. Contractors are encouraged to assign an 
identification number to each invoice.
    (h) Patent indemnity. The Contractor shall indemnify the Government 
and its officers, employees and agents against liability, including 
costs, for actual or alleged direct or contributory infringement of, or 
inducement to infringe, any United States or foreign patent, trademark 
or copyright, arising out of the performance of this contract, provided 
the Contractor is reasonably notified of such claims and proceedings.
    (i) Payment. Payment shall be made for items accepted by the 
Government that have been delivered to the delivery destinations set 
forth in this contract. The Government will make payment in accordance 
with the

[[Page 49]]

Prompt Payment Act (31 U.S.C. 3903) and Office of Management and Budget 
(OMB) Circular A-125, Prompt Payment. Unless otherwise provided by an 
addendum to this contract, the Government shall make payment in 
accordance with the clause at FAR 52.232-33, Mandatory Information for 
Electronic Funds Transfer Payment, which is incorporated herein by 
reference.
    In connection with any discount offered for early payment, time 
shall be computed from the date of the invoice. For the purpose of 
computing the discount earned, payment shall be considered to have been 
made on the date which appears on the payment check or the specified 
payment date if an electronic funds transfer payment is made.
    (j) Risk of loss. Unless the contract specifically provides 
otherwise, risk of loss or damage to the supplies provided under this 
contract shall remain with the Contractor until, and shall pass to the 
Government upon:
    (1) Delivery of the supplies to a carrier, if transportation is 
f.o.b. origin; or
    (2) Delivery of the supplies to the Government at the destination 
specified in the contract, if transportation is f.o.b. destination.
    (k) Taxes. The contract price includes all applicable Federal, 
State, and local taxes and duties.
    (l) Termination for the Government's convenience. The Government 
reserves the right to terminate this contract, or any part hereof, for 
its sole convenience. In the event of such termination, the Contractor 
shall immediately stop all work hereunder and shall immediately cause 
any and all of its suppliers and subcontractors to cease work. Subject 
to the terms of this contract, the Contractor shall be paid a percentage 
of the contract price reflecting the percentage of the work performed 
prior to the notice of termination, plus reasonable charges the 
Contractor can demonstrate to the satisfaction of the Government using 
its standard record keeping system, have resulted from the termination. 
The Contractor shall not be required to comply with the cost accounting 
standards or contract cost principles for this purpose. This paragraph 
does not give the Government any right to audit the Contractor's 
records. The Contractor shall not be paid for any work performed or 
costs incurred which reasonably could have been avoided.
    (m) Termination for cause. The Government may terminate this 
contract, or any part hereof, for cause in the event of any default by 
the Contractor, or if the Contractor fails to comply with any contract 
terms and conditions, or fails to provide the Government, upon request, 
with adequate assurances of future performance. In the event of 
termination for cause, the Government shall not be liable to the 
Contractor for any amount for supplies or services not accepted, and the 
Contractor shall be liable to the Government for any and all rights and 
remedies provided by law. If it is determined that the Government 
improperly terminated this contract for default, such termination shall 
be deemed a termination for convenience.
    (n) Title. Unless specified elsewhere in this contract, title to 
items furnished under this contract shall pass to the Government upon 
acceptance, regardless of when or where the Government takes physical 
possession.
    (o) Warranty. The Contractor warrants and implies that the items 
delivered hereunder are merchantable and fit for use for the particular 
purpose described in this contract.
    (p) Limitation of liability. Except as otherwise provided by an 
express or implied warranty, the Contractor will not be liable to the 
Government for consequential damages resulting from any defect or 
deficiencies in accepted items.
    (q) Other compliances. The Contractor shall comply with all 
applicable Federal, State and local laws, executive orders, rules and 
regulations applicable to its performance under this contract.
    (r) Compliance with laws unique to Government contracts. The 
Contractor agrees to comply with 31 U.S.C. 1352 relating to limitations 
on the use of appropriated funds to influence certain Federal contracts; 
18 U.S.C. 431 relating to officials not to benefit; 40 U.S.C. 327, et 
seq., Contract Work Hours and Safety Standards Act; 41 U.S.C. 51-58, 
Anti-Kickback Act of 1986; 41 U.S.C. 265 and 10 U.S.C. 2409 relating to 
whistleblower protections; 49 U.S.C. 40118, Fly American; and 41 U.S.C. 
423 relating to procurement integrity.
    (s) Order of precedence. Any inconsistencies in this solicitation or 
contract shall be resolved by giving precedence in the following order: 
(1) the schedule of supplies/services; (2) the Assignments, Disputes, 
Payments, Invoice, Other Compliances, and Compliance with Laws Unique to 
Government Contracts paragraphs of this clause; (3) the clause at 
52.212-5; (4) addenda to this solicitation or contract, including any 
license agreements for computer software; (5) solicitation provisions if 
this is a solicitation; (6) other paragraphs of this clause; (7) the 
Standard Form 1449; (8) other documents, exhibits, and attachments; and 
(9) the specification.

                             (End of clause)

[60 FR 48254, Sept. 18, 1995, as amended at 61 FR 45773, Aug. 29, 1996; 
62 FR 12711, Mar. 14, 1997; 63 FR 9052, Feb. 23, 1998]



Sec. 52.212-5  Contract Terms and Conditions Required to Implement Statutes or Executive Orders--Commercial Items.

    As prescribed in 12.301(b)(4), insert the following clause:

[[Page 50]]

    Contract Terms and Conditions Required to Implement Statutes or 
              Executive Orders--Commercial Items (JAN 1999)

    (a) The Contractor agrees to comply with the following FAR clauses, 
which are incorporated in this contract by reference, to implement 
provisions of law or Executive orders applicable to acquisitions of 
commercial items:
    (1) 52.222-3, Convict Labor (E.O. 11755); and
    (2) 52.233-3, Protest After Award (31 U.S.C 3553).
    (b) The Contractor agrees to comply with the FAR clauses in this 
paragraph (b) which the contracting officer has indicated as being 
incorporated in this contract by reference to implement provisions of 
law or executive orders applicable to acquisitions of commercial items 
or components:

            (Contracting Officer shall check as appropriate.)

    __ (1) 52.203-6, Restrictions on Subcontractor Sales to the 
Government, with Alternate I (41 U.S.C. 253g and 10 U.S.C. 2402).
    __ (2) [Reserved]
    __ (3) 52.219-8, Utilization of Small Business Concerns and Small 
Disadvantaged Business Concerns (15 U.S.C. 637(d) (2) and (3));
    __ (4) 52.219-9, Small, Small Disadvantaged and Women-Owned Small 
Business Subcontracting Plan (15 U.S.C. 637 (d)(4));
    __ (5) 52.219-14, Limitation on Subcontracting (15 U.S.C. 
637(a)(14)).
    __ (6)(i) 52.219-23, Notice of Price Evaluation Adjustment for Small 
Disadvantaged Business Concerns (Pub. L. 103-355, section 7102, and 10 
U.S.C. 2323) (if the offeror elects to waive the adjustment, it shall so 
indicate in its offer).
    __ (ii) Alternate I of 52.219-23.
    __ (7) 52.219-25, Small Disadvantaged Business Participation 
Program--Disadvantaged Status and Reporting (Pub. L. 103-355, section 
7102, and 10 U.S.C. 2323).
    __ (8) 52.219-26, Small Disadvantaged Business Participation 
Program--Incentive Subcontracting (Pub. L. 103-355, section 7102, and 10 
U.S.C. 2323).
    __ (9) 52.222-26, Equal Opportunity (E.O. 11246).
    __ (10) 52.222-35, Affirmative Action for Disabled Veterans and 
Veterans of the Vietnam Era (38 U.S.C. 4212).
    __ (11) 52.222-36, Affirmative Action for Workers with Disabilities 
(29 U.S.C. 793).
    __ (12) 52.222-37, Employment Reports on Disabled Veterans and 
Veterans of the Vietnam Era (38 U.S.C. 4212).
    __ (13) 52.225-3, Buy American Act--Supplies (41 U.S.C. 10).
    __ (14) 52.225-9, Buy American Act--Trade Agreements Act--Balance of 
Payments Program (41 U.S.C. 10, 19 U.S.C. 2501-2582).
    __ (15) [Reserved]
    __ (16) 52.225-18, European Union Sanctions for End Products (E.O. 
12849).
    __ (17) 52.225-19, European Union Sanctions for Services (E.O. 
12849).
    __ (18)(i) 52.225-21, Buy American Act--North American Free Trade 
Agreement Implementation Act--Balance of Payments Program (41 U.S.C 10, 
Pub. L. 103-187).
    __ (ii) Alternate I of 52.225-21.
    __ (19) 52.239-1, Privacy or Security Safeguards (5 U.S.C. 552a).-
    __ (20) 52.247-64, Preference for Privately Owned U.S.-Flag 
Commercial Vessels (46 U.S.C. 1241).
    (This acquisition is being conducted under ______________ delegation 
of GSA's exclusive procurement authority for FIP resources. The specific 
GSA DPA case number is ____________).
    (c) The Contractor agrees to comply with the FAR clauses in this 
paragraph (c), applicable to commercial services, which the Contracting 
Officer has indicated as being incorporated in this contract by 
reference to implement provisions of law or executive orders applicable 
to acquisitions of commercial items or components:

               (Contracting Officer check as appropriate.)

    __ (1) 52.222-41, Service Contract Act of 1965, As amended (41 
U.S.C. 351, et seq.).
    __ (2) 52.222-42, Statement of Equivalent Rates for Federal Hires 
(29 U.S.C. 206 and 41 U.S.C. 351, et seq.).
    __ (3) 52.222-43, Fair Labor Standards Act and Service Contract 
Act--Price Adjustment (Multiple Year and Option Contracts) (29 U.S.C. 
206 and 41 U.S.C. 351, et seq.).
    __ (4) 52.222-44, Fair Labor Standards Act and Service Contract 
Act--Price Adjustment (29 U.S.C. 206 and 41 U.S.C. 351, et seq.).
    __ (5) 52.222-47, SCA Minimum Wages and Fringe Benefits Applicable 
to Successor Contract Pursuant to Predecessor Contractor Collective 
Bargaining Agreement (CBA) (41 U.S.C. 351, et seq.).
    (d) Comptroller General Examination of Record. The Contractor agrees 
to comply with the provisions of this paragraph (d) if this contract was 
awarded using other than sealed bid, is in excess of the simplified 
acquisition threshold, and does not contain the clause at 52.215-2, 
Audit and Records--Negotiation.
    (1) The Comptroller General of the United States, or an authorized 
representative of the Comptroller General, shall have access to and 
right to examine any of the Contractor's directly pertinent records 
involving transactions related to this contract.
    (2) The Contractor shall make available at its offices at all 
reasonable times the records, materials, and other evidence for 
examination, audit, or reproduction, until 3 years after final payment 
under this contract or for any shorter period specified in

[[Page 51]]

FAR Subpart 4.7, Contractor Records Retention, of the other clauses of 
this contract. If this contract is completely or partially terminated, 
the records relating to the work terminated shall be made available for 
3 years after any resulting final termination settlement. Records 
relating to appeals under the disputes clause or to litigation or the 
settlement of claims arising under or relating to this contract shall be 
made available until such appeals, litigation, or claims are finally 
resolved.
    (3) As used in this clause, records include books, documents, 
accounting procedures and practices, and other data, regardless of type 
and regardless of form. This does not require the Contractor to create 
or maintain any record that the Contractor does not maintain in the 
ordinary course of business or pursuant to a provision of law.
    (e) Notwithstanding the requirements of the clauses in paragraphs 
(a), (b), (c) or (d) of this clause, the Contractor is not required to 
include any FAR clause, other than those listed below (and as may be 
required by an addenda to this paragraph to establish the reasonableness 
of prices under part 15), in a subcontract for commercial items or 
commercial components--
    (1) 52.222-26, Equal Opportunity (E.O. 11246);
    (2) 52.222-35, Affirmative Action for Disabled Veterans and Veterans 
of the Vietnam Era (38 U.S.C. 4212);
    (3) 52.222-36, Affirmative Action for Workers with Disabilities (29 
U.S.C. 793); and
    (4) 52.247-64, Preference for Privately Owned U.S.-Flagged 
Commercial Vessels (46 U.S.C. 1241) (flow down not required for 
subcontracts awarded beginning May 1, 1996).

                             (End of clause)

[60 FR 48255, Sept. 18, 1995, as amended at 60 FR 67517, Dec. 29, 1995; 
61 FR 31648, June 20, 1996; 61 FR 41471, Aug. 8, 1996; 63 FR 9052, 9058, 
Feb. 23, 1998; 63 FR 34075, June 22, 1998; 63 FR 35724, June 30, 1998; 
63 FR 36124, July 1, 1998]

    Effective Date Note: At 63 FR 36124, July 1, 1998, section 52.212-5 
was amended by revising the clause date from ``(OCT 1998)'' to ``(JAN 
1999)'', redesignating paragraphs (b)(7) through (b)(18) as (b)(9) 
through (b)(20), and adding new paragraphs (b)(7) and (b)(8), effective 
Jan. 1, 1998.



Sec. 52.213-1  Fast Payment Procedure.

    As prescribed in 13.404, insert the following clause:

                    Fast Payment Procedure (FEB 1998)

    (a) General. The Government will pay invoices based on the 
Contractor's delivery to a post office or common carrier (or, if shipped 
by other means, to the point of first receipt by the Government).
    (b) Responsibility for supplies. (1) Title to the supplies passes to 
the Government upon delivery to--
    (i) A post office or common carrier for shipment to the specific 
destination; or
    (ii) The point of first receipt by the Government, if shipment is by 
means other than Postal Service or common carrier.
    (2) Notwithstanding any other provision of the contract, order, or 
blanket purchase agreement, the Contractor shall--
    (i) Assume all responsibility and risk of loss for supplies not 
received at destination, damaged in transit, or not conforming to 
purchase requirements; and
    (ii) Replace, repair, or correct those supplies promptly at the 
Contractor's expense, if instructed to do so by the Contracting Officer 
within 180 days from the date title to the supplies vests in the 
Government.
    (c) Preparation of invoice. (1) Upon delivery to a post office or 
common carrier (or, if shipped by other means, the point of first 
receipt by the Government), the Contractor shall--
    (i) Prepare an invoice as provided in this contract, order, or 
blanket purchase agreement; and
    (ii) Display prominently on the invoice ``FAST PAY.''
    (2) If the purchase price excludes the cost of transportation, the 
Contractor shall enter the prepaid shipping cost on the invoice as a 
separate item. The Contractor shall not include the cost of parcel post 
insurance. If transportation charges are stated separately on the 
invoice, the Contractor shall retain related paid freight bills or other 
transportation billings paid separately for a period of 3 years and 
shall furnish the bills to the Government upon request.
    (3) If this contract, order, or blanket purchase agreement requires 
the preparation of a receiving report, the Contractor shall prepare the 
receiving report on the prescribed form or, alternatively, shall include 
the following information on the invoice, in addition to that required 
in paragraph (c)(1) of this clause:
    (i) A statement in prominent letters ``NO RECEIVING REPORT 
PREPARED.''
    (ii) Shipment number.
    (iii) Mode of shipment.
    (iv) At line item level--
    (A) National stock number and/or manufacturer's part number;
    (B) Unit of measure;
    (C) Ship-To Point;
    (D) Mark-For Point, if in the contract; and
    (E) FEDSTRIP/MILSTRIP document number, if in the contract.
    (4) If this contract, order, or blanket purchase agreement does not 
require preparation of a receiving report on a prescribed

[[Page 52]]

form, the Contractor shall include on the invoice the following 
information at the line item level, in addition to that required in 
paragraph (c)(1) of this clause:
    (i) Ship-To Point.
    (ii) Mark-For Point.
    (iii) FEDSTRIP/MILSTRIP document number, if in the contract.
    (5) Where a receiving report is not required, the Contractor shall 
include a copy of the invoice in each shipment.
    (d) Certification of invoice. The Contractor certifies by submitting 
an invoice to the Government that the supplies being billed to the 
Government have been shipped or delivered in accordance with shipping 
instructions issued by the ordering officer, in the quantities shown on 
the invoice, and that the supplies are in the quantity and of the 
quality designated by the contract, order, or blanket purchase 
agreement.
    (e) Fast pay container identification. The Contractor shall mark all 
outer shipping containers ``FAST PAY.''

                             (End of clause)

[62 FR 64927, Dec. 9, 1997]



Sec. 52.213-2  Invoices.

    As prescribed in 13.302-5(b), insert the following clause:

                           Invoices (APR 1984)

    The Contractor's invoices must be submitted before payment can be 
made. The Contractor will be paid on the basis of the invoice, which 
must state (a) the starting and ending dates of the subscription 
delivery, and (b) either that orders have been placed in effect for the 
addressees required, or that the orders will be placed in effect upon 
receipt of payment.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 51 FR 2666, Jan. 17, 1986; 
60 FR 34761, July 3, 1995; 61 FR 39198, July 26, 1996; 62 FR 64928, Dec. 
9, 1997]



Sec. 52.213-3  Notice To Supplier.

    As prescribed in 13.302-5(c), insert the following clause:

                      Notice to Supplier (APR 1984)

    This is a firm order ONLY if your price does not exceed the maximum 
line item or total price in the Schedule. Submit invoices to the 
Contracting Officer. If you cannot perform in exact accordance with this 
order, WITHHOLD PERFORMANCE and notify the Contracting Officer 
immediately, giving your quotation.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 60 FR 34761, July 3, 1995; 
61 FR 39198, July 26, 1996; 62 FR 64928, Dec. 9, 1997]



Sec. 52.213-4  Terms and Conditions--Simplified Acquisitions (Other Than Commercial Items).

    As prescribed in 13.302-5(d), insert the following clause:

  Terms and Conditions--Simplified Acquisitions (Other Than Commercial 
                            Items) (AUG 1998)

    (a) The Contractor shall comply with the following Federal 
Acquisition Regulation (FAR) clauses that are incorporated by reference:
    (1) The clauses listed below implement provisions of law or 
Executive order:
    (i) 52.222-3, Convict Labor (Aug 1996) (E.O. 11755).
    (ii) 52.233-3, Protest After Award (Aug 1996) (31 U.S.C. 3553).
    (2) Listed below are additional clauses that apply:
    (i) 52.225-11, Restrictions on Certain Foreign Purchases (Aug 1998).
    (ii) 52.232-1, Payments (Apr 1984).
    (iii) 52.232-8, Discounts for Prompt Payment (May 1997).
    (iv) 52.232-11, Extras (Apr 1984).
    (v) 52.232-25, Prompt Payment (Jun 1997).
    (vi) 52.232-33, Mandatory Information for Electronic Funds Transfer 
Payment (Aug 1996).
    (vii) 52.233-1, Disputes (Oct 1995).
    (viii) 52.244-6, Subcontracts for Commercial Items and Commercial 
Components (Oct 1995).
    (ix) 52.253-1, Computer Generated Forms (Jan 1991).
    (b) The Contractor shall comply with the following FAR clauses, 
incorporated by reference, unless the circumstances do not apply:
    (1) The clauses listed below implement provisions of law or 
Executive order:
    (i) 52.222-20, Walsh-Healey Public Contracts Act (DEC 1996) (41 
U.S.C. 35-45) (Applies to supply contracts over $10,000 in the United 
States).
    (ii) 52.222-26, Equal Opportunity (APR 1984) (E.O. 11246) (Applies 
to contracts over $10,000).
    (iii) 52.222-35, Affirmative Action for Disabled Veterans and 
Veterans of the Vietnam Era (Apr 1998) (38 U.S.C. 4212) (Applies to 
contracts over $10,000).
    (iv) 52.222-36, Affirmative Action for Workers with Disabilities 
(Jun 1998) (29 U.S.C. 793) (Applies to contracts over $10,000).
    (v) 52.222-37, Employment Reports on Disabled Veterans and Veterans 
of the Vietnam

[[Page 53]]

Era (APR 1998) (38 U.S.C. 4212) (Applies to contracts over $10,000).
    (vi) 52.222-41, Service Contract Act of 1965, As Amended (MAY 1989) 
(41 U.S.C. 351, et seq.) (Applies to service contracts over $2,500).
    (vii) 52.223-5, Pollution Prevention and Right-to-Know Information 
(APR 1998) (E.O. 12856) (Applies to services performed on Federal 
facilities).
    (viii) 52.225-3, Buy American Act--Supplies (JAN 1994) (41 U.S.C. 
10) (Applies to supplies, and to services involving the furnishing of 
supplies, if the contract was--
    (A) Under $25,000; or
    (B) Set aside for small business concerns, regardless of dollar 
value).
    (2) Listed below are additional clauses that may apply:
    (i) 52.209-6, Protecting the Government's Interest When 
Subcontracting with Contractors Debarred, Suspended, or Proposed for 
Debarment (JULY 1995) (Applies to contracts over $25,000).
    (ii) 52.211-17, Delivery of Excess Quantities (SEPT 1989) (Applies 
to fixed-price supplies).
    (iii) 52.247-29, F.o.b. Origin (JUN 1988) (Applies to supplies if 
delivery is f.o.b. origin).
    (iv) 52.247-34, F.o.b. Destination (NOV 1991) (Applies to supplies 
if delivery is f.o.b. destination).
    (c) FAR 52.252-2, Clauses Incorporated by Reference (FEB 1998). 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):

_______________________________________________________________________

_______________________________________________________________________

[Insert one or more Internet addresses]

    (d) Inspection/Acceptance. The Contractor shall tender for 
acceptance only those items that conform to the requirements of this 
contract. The Government reserves the right to inspect or test any 
supplies or services that have been tendered for acceptance. The 
Government may require repair or replacement of nonconforming supplies 
or reperformance of nonconforming services at no increase in contract 
price. The Government must exercise its postacceptance rights--
    (1) Within a reasonable period of time after the defect was 
discovered or should have been discovered; and
    (2) Before any substantial change occurs in the condition of the 
item, unless the change is due to the defect in the item.
    (e) Excusable delays. The Contractor shall be liable for default 
unless nonperformance is caused by an occurrence beyond the reasonable 
control of the Contractor and without its fault or negligence, such as 
acts of God or the public enemy, acts of the Government in either its 
sovereign or contractual capacity, fires, floods, epidemics, quarantine 
restrictions, strikes, unusually severe weather, and delays of common 
carriers. The Contractor shall notify the Contracting Officer in writing 
as soon as it is reasonably possible after the commencement of any 
excusable delay, setting forth the full particulars in connection 
therewith, shall remedy such occurrence with all reasonable dispatch, 
and shall promptly give written notice to the Contracting Officer of the 
cessation of such occurrence.
    (f) Termination for the Government's convenience. The Government 
reserves the right to terminate this contract, or any part hereof, for 
its sole convenience. In the event of such termination, the Contractor 
shall immediately stop all work hereunder and shall immediately cause 
any and all of its suppliers and subcontractors to cease work. Subject 
to the terms of this contract, the Contractor shall be paid a percentage 
of the contract price reflecting the percentage of the work performed 
prior to the notice of termination, plus reasonable charges that the 
Contractor can demonstrate to the satisfaction of the Government, using 
its standard record keeping system, have resulted from the termination. 
The Contractor shall not be required to comply with the cost accounting 
standards or contract cost principles for this purpose. This paragraph 
does not give the Government any right to audit the Contractor's 
records. The Contractor shall not be paid for any work performed or 
costs incurred that reasonably could have been avoided.
    (g) Termination for cause. The Government may terminate this 
contract, or any part hereof, for cause in the event of any default by 
the Contractor, or if the Contractor fails to comply with any contract 
terms and conditions, or fails to provide the Government, upon request, 
with adequate assurances of future performance. In the event of 
termination for cause, the Government shall not be liable to the 
Contractor for any amount for supplies or services not accepted, and the 
Contractor shall be liable to the Government for any and all rights and 
remedies provided by law. If it is determined that the Government 
improperly terminated this contract for default, such termination shall 
be deemed a termination for convenience.
    (h) Warranty. The Contractor warrants and implies that the items 
delivered hereunder are merchantable and fit for use for the particular 
purpose described in this contract.

                             (End of clause)

[62 FR 64928, Dec. 9, 1997, as amended at 63 FR 9052, 9058, Feb. 23, 
1998; 63 FR 34075, 34077, June 22, 1998]

[[Page 54]]



Sec. 52.214-1  Solicitation Definitions--Sealed Bidding.

    As prescribed in 14.201-6(b)(1), insert the following provision:

           Solicitation Definitions--Sealed Bidding (JUL 1987)

    Offer means bid in sealed bidding.
    Solicitation means an invitation for bids in sealed bidding.
    Government means United States Government.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1746, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985; 52 FR 9039, Mar. 20, 1987]



Sec. 52.214-2  Type of Business Organization--Sealed Bidding.

    As prescribed in 14.201-6(b)(2), insert the following provision in 
all invitations for bids:

        Type of Business Organization--Sealed Bidding (JUL 1987)

    The bidder, by checking the applicable box, represents that--
    (a) It operates as /  / a corporation incorporated under the laws of 
the State of             , /  / an individual, /  / a partnership, /  / 
a nonprofit organization, or /  / a joint venture; or
    (b) If the bidder is a foreign entity, it operates as /  / an 
individual, /  / a partnership, /  / a nonprofit organization, /  / a 
joint venture, or /  / a corporation, registered for business in 
country.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1746, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985; 52 FR 9039, Mar. 20, 1987]



Sec. 52.214-3  Amendments to Invitations for Bids.

    As prescribed in 14.201-6(b)(3), insert the following provision:

              Amendments to Invitations for Bids (DEC 1989)

    (a) If this solicitation is amended, then all terms and conditions 
which are not modified remain unchanged.
    (b) Bidders shall acknowledge receipt of any amendment to this 
solicitation (1) by signing and returning the amendment, (2) by 
identifying the amendment number and date in space provided for this 
purpose on the form for submitting a bid, (3) by letter or telegram, or 
(4) by facsimile, if facsimile bids are authorized in the solicitation. 
The Government must receive the acknowledgment by the time and at the 
place specified for receipt of bids.

                           (End of provision)

[53 FR 43394, Oct. 26, 1988, as amended at 54 FR 48990, Nov. 28, 1989]



Sec. 52.214-4  False Statements in Bids.

    As prescribed in 14.201-6(b)(4), insert the following provision in 
all invitations for bids:

                   False Statements in Bids (APR 1984)

    Bidders must provide full, accurate, and complete information as 
required by this solicitation and its attachments. The penalty for 
making false statements in bids is prescribed in 18 U.S.C. 1001.

                           (End of provision)



Sec. 52.214-5  Submission of Bids.

    As prescribed in 14.201-6(c)(1), insert the following provision:

                      Submission of Bids (MAR 1997)

    (a) Bids and bid modifications shall be submitted in sealed 
envelopes or packages (unless submitted by electronic means) (1) 
addressed to the office specified in the solicitation, and (2) showing 
the time and date specified for receipt, the solicitation number, and 
the name and address of the bidder.
    (b) Bidders using commercial carrier services shall ensure that the 
bid is addressed and marked on the outermost envelope or wrapper as 
prescribed in subparagraphs (a) (1) and (2) of this provision when 
delivered to the office specified in the solicitation.
    (c) Telegraphic bids will not be considered unless authorized by the 
solicitation; however, bids may be modified or withdrawn by written or 
telegraphic notice.
    (d) Facsimile bids, modifications, or withdrawals, will not be 
considered unless authorized by the solicitation.
    (e) Bids submitted by electronic commerce shall be considered only 
if the electronic commerce method was specifically stipulated or 
permitted by the solicitation.

                           (End of provision)

[54 FR 48991, Nov. 28, 1989, as amended at 55 FR 3887, Feb. 5, 1990; 60 
FR 34739, July 3, 1995; 61 FR 69293, Dec. 31, 1996; 62 FR 12721, Mar. 
17, 1997]

[[Page 55]]



Sec. 52.214-6  Explanation to Prospective Bidders.

    As prescribed in 14.201-6(c)(2), insert the following provision:

              Explanation to Prospective Bidders (APR 1984)

    Any prospective bidder desiring an explanation or interpretation of 
the solicitation, drawings, specifications, etc., must request it in 
writing soon enough to allow a reply to reach all prospective bidders 
before the submission of their bids. Oral explanations or instructions 
given before the award of a contract will not be binding. Any 
information given a prospective bidder concerning a solicitation will be 
furnished promptly to all other prospective bidders as an amendment to 
the solicitation, if that information is necessary in submitting bids or 
if the lack of it would be prejudicial to other prospective bidders.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 25531, June 21, 1990]



Sec. 52.214-7  Late Submissions, Modifications, and Withdrawals of Bids.

    As prescribed in 14.201-6(c)(3), insert the following provision:

   Late Submissions, Modifications, and Withdrawals of Bids (MAY 1997)

    (a) Any bid received at the office designated in the solicitation 
after the exact time specified for receipt will not be considered unless 
it is received before award is made and it--
    (1) Was sent by registered or certified mail not later than the 
fifth calendar day before the date specified for receipt of bids (e.g., 
a bid submitted in response to a solicitation requiring receipt of bids 
by the 20th of the month must have been mailed by the 15th);
    (2) Was sent by mail (or telegram or facsimile, if authorized) or 
hand-carried (including delivery by a commercial carrier) if it is 
determined by the Government that the late receipt was due primarily to 
Government mishandling after receipt at the Government installation;
    (3) Was sent by U.S. Postal Service Express Mail Next Day Service-
Post Office to Addressee, not later than 5:00 P.M. at the place of 
mailing two working days prior to the date specified for receipt of 
bids. The term working days excludes weekends and U.S. Federal holidays; 
or
    (4) Was transmitted through an electronic commerce method authorized 
by the solicitation and was received at the initial point of entry to 
the Government infrastructure not later than 5:00 p.m. one working day 
prior to the date specified for receipt of bids.
    (b) Any modification or withdrawal of a bid is subject to the same 
conditions as in paragraph (a) of this provision.
    (c) The only acceptable evidence to establish the date of mailing of 
a late bid, modification, or withdrawal sent either by registered or 
certified mail is the U.S. or Canadian Postal Service postmark both on 
the envelope or wrapper and on the original receipt from the U.S. or 
Canadian Postal Service. Both postmarks must show a legible date or the 
bid, modification, or withdrawal shall be processed as if mailed late. 
Postmark means a printed, stamped, or otherwise placed impression 
(exclusive of a postage meter machine impression) that is readily 
identifiable without further action as having been supplied and affixed 
by employees of the U.S. or Canadian Postal Service on the date of 
mailing. Therefore, bidders should request the postal clerk to place a 
legible hand cancellation bull's-eye postmark on both the receipt and 
the envelope or wrapper.
    (d) The only acceptable evidence to establish the time of receipt at 
the Government installation is the time/date stamp of that installation 
on the bid wrapper or other documentary evidence of receipt maintained 
by the installation.
    (e) The only acceptable evidence to establish the date of mailing of 
a late bid, modification, or withdrawal sent by U.S. Postal Service 
Express Mail Next Day Service-Post Office to Addressee is the date 
entered by the post office receiving clerk on the Express Mail Next Day 
Service-Post Office to Addressee label and the postmark on the envelope 
or wrapper and on the original receipt from the U.S. Postal Service. 
Postmark has the same meaning as defined in paragraph (c) of this 
provision, excluding postmarks of the Canadian Postal Service. 
Therefore, bidders should request the postal clerk to place a legible 
hand cancellation bull's-eye postmark on both the receipt and the 
envelope or wrapper.
    (f) Notwithstanding paragraph (a) of this provision, a late 
modification of an otherwise successful bid that makes its terms more 
favorable to the Government will be considered at any time it is 
received and may be accepted.
    (g) Bids may be withdrawn by written notice or telegram (including 
mailgram) received at any time before the exact time set for receipt of 
bids. If the solicitation authorizes facsimile bids, bids may be 
withdrawn via facsimile received at any time before the exact time set 
for receipt of bids, subject to the conditions specified in the 
provision entitled Facsimile Bids. A bid may be withdrawn in person by a 
bidder or its authorized representative if, before the exact time set 
for

[[Page 56]]

receipt of bids, the identity of the person requesting withdrawal is 
established and the person signs a receipt for the bid.
    (h) If an emergency or unanticipated event interrupts normal 
Government processes so as to cause postponement of the scheduled bid 
opening, and urgent Government requirements preclude amendment of the 
solicitation or other notice of an extension of the opening date, the 
time specified for receipt of bids will be deemed to be extended to the 
same time of day specified in the solicitation on the first work day on 
which normal Government processes resume.

                           (End of provision)

[54 FR 48991, Nov. 28, 1989, as amended at 60 FR 34739, July 3, 1995; 61 
FR 31620, June 20, 1996; 61 FR 69293, Dec. 31, 1996; 62 FR 12693, Mar. 
17, 1997]



Sec. 52.214-8  [Reserved]



Sec. 52.214-9  Failure to Submit Bid.

    As prescribed in 14.201-6(e)(1), insert the following provision in 
invitations for bids:

                    Failure to Submit Bid (JUL 1995)

    Recipients of this solicitation not responding with a bid should not 
return this solicitation, unless it specifies otherwise. Instead, they 
should advise the issuing office by letter, postcard, or established 
electronic commerce methods, whether they want to receive future 
solicitations for similar requirements. If a recipient does not submit a 
bid and does not notify the issuing office that future solicitations are 
desired, the recipient's name may be removed from the applicable mailing 
list.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 60 FR 34740, July 3, 1995]



Sec. 52.214-10  Contract Award--Sealed Bidding.

    As prescribed in 14.201-6(e)(2), insert the following provision:

                Contract Award--Sealed Bidding (JUL 1990)

    (a) The Government will evaluate bids in response to this 
solicitation without discussions and will award a contract to the 
responsible bidder whose bid, conforming to the solicitation, will be 
most advantageous to the Government considering only price and the 
price-related factors specified elsewhere in the solicitation.
    (b) The Government may (1) reject any or all bids, (2) accept other 
than the lowest bid, and (3) waive informalities or minor irregularities 
in bids received.
    (c) The Government may accept any item or group of items of a bid, 
unless the bidder qualifies the bid by specific limitations. Unless 
otherwise provided in the Schedule, bids may be submitted for quantities 
less than those specified. The Government reserves the right to make an 
award on any item for a quantity less than the quantity offered, at the 
unit prices offered, unless the bidder specifies otherwise in the bid.
    (d) A written award or acceptance of a bid mailed or otherwise 
furnished to the successful bidder within the time for acceptance 
specified in the bid shall result in a binding contract without further 
action by either party.
    (e) The Government may reject a bid as nonresponsive if the prices 
bid are materially unbalanced between line items or subline items. A bid 
is materially unbalanced when it is based on prices significantly less 
than cost for some work and prices which are significantly overstated in 
relation to cost for other work, and if there is a reasonable doubt that 
the bid will result in the lowest overall cost to the Government even 
though it may be the low evaluated bid, or if it is so unbalanced as to 
be tantamount to allowing an advance payment.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1746, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985; 55 FR 25531, June 21, 1990]



Sec. 52.214-11  [Reserved]



Sec. 52.214-12  Preparation of Bids.

    As prescribed in 14.201-6(f), insert the following provision:

                     Preparation of Bids (APR 1984)

    (a) Bidders are expected to examine the drawings, specifications, 
Schedule, and all instructions. Failure to do so will be at the bidder's 
risk.
    (b) Each bidder shall furnish the information required by the 
solicitation. The bidder shall sign the bid and print or type its name 
on the Schedule and each continuation sheet on which it makes an entry. 
Erasures or other changes must be initialed by the person signing the 
bid. Bids signed by an agent shall be accompanied by evidence of that 
agent's authority, unless that evidence has been previously furnished to 
the issuing office.
    (c) For each item offered, bidders shall (1) show the unit price, 
including, unless otherwise specified, packaging, packing, and 
preservation and (2) enter the extended price for

[[Page 57]]

the quantity of each item offered in the Amount column of the Schedule. 
In case of discrepancy between a unit price and an extended price, the 
unit price will be presumed to be correct, subject, however, to 
correction to the same extent and in the same manner as any other 
mistake.
    (d) Bids for supplies or services other than those specified will 
not be considered unless authorized by the solicitation.
    (e) Bidders must state a definite time for delivery of supplies or 
for performance of services, unless otherwise specified in the 
solicitation.
    (f) Time, if stated as a number of days, will include Saturdays, 
Sundays, and holidays.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 51 FR 2666, Jan. 17, 1986]



Sec. 52.214-13  Telegraphic Bids.

    As prescribed in 14.201-6(g)(1), insert the following provision:

                       Telegraphic Bids (APR 1984)

    (a) Bidders may submit telegraphic bids as responses to this 
solicitation. These responses must arrive at the place, and by the time, 
specified in the solicitation.
    (b) Telegraphic bids shall refer to this solicitation and include 
the items or subitems, quantities, unit prices, time and place of 
delivery, all representations and other information required by this 
solicitation, and a statement of agreement with all the terms, 
conditions, and provisions of the invitation for bids.
    (c) Telegraphic bids that fail to furnish required representations 
or information, or that reject any of the terms, conditions, and 
provisions of the solicitation, may be excluded from consideration.
    (d) Bidders must promptly sign and submit complete copies of the 
bids in confirmation of their telegraphic bids.
    (e) The term telegraphic bids, as used in this provision, includes 
mailgrams.

                           (End of provision)

    Alternate I (NOV 1988). As prescribed in 14.201-6(g)(2), substitute 
the following for paragraph (d) of the basic clause:

    (d) Written confirmation of telegraphic bids is not required.

[48 FR 42478, Sept. 19, 1983, as amended at 53 FR, 43394, Oct. 26, 1988]



Sec. 52.214-14  Place of Performance--Sealed Bidding.

    As prescribed in 14.201-6(h), insert the following provision:

             Place of Performance--Sealed Bidding (APR 1985)

    (a) The bidder, in the performance of any contract resulting from 
this solicitation, {time}  intends, {time}  does not intend [check 
applicable box] to use one or more plants or facilities located at a 
different address from the address of the bidder as indicated in this 
bid.
    (b) If the bidder checks intends in paragraph (a) above, it shall 
insert in the spaces provided below the required information:

 
                                        Name and Address of
    Place of Performance (Street       Owner and Operator of
  Address, City, County, State, Zip    the Plant or Facility
                Code)                   if Other than Bidder
 
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1746, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985]



Sec. 52.214-15  Period for Acceptance of Bids.

    As prescribed in 14.201-6(i), insert the following provision:

                Period for Acceptance of Bids (APR 1984)

    In compliance with the solicitation, the bidder agrees, if this bid 
is accepted within __ calendar days (60 calendar days unless a different 
period is inserted by the bidder) from the date specified in the 
solicitation for receipt of bids, to furnish any or all items upon which 
prices are bid at the price set opposite each item, delivered at the 
designated point(s), within the time specified in the Schedule.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 54 FR 48991, Nov. 28, 1989]



Sec. 52.214-16  Minimum Bid Acceptance Period.

    As prescribed in 14.201-6(j), insert the following provision in 
invitations for bids, except for construction, if the contracting 
officer determines that a minimum acceptance period must be specified:

[[Page 58]]

                Minimum Bid Acceptance Period (APR 1984)

    (a) Acceptance period, as used in this provision, means the number 
of calendar days available to the Government for awarding a contract 
from the date specified in this solicitation for receipt of bids.
    (b) This provision supersedes any language pertaining to the 
acceptance period that may appear elsewhere in this solicitation.
    (c) The Government requires a minimum acceptance period of __ 
calendar days [the Contracting Officer shall insert the number of days].
    (d) In the space provided immediately below, bidders may specify a 
longer acceptance period than the Government's minimum requirement.

  The bidder allows the following acceptance period: __ calendar days.

    (e) A bid allowing less than the Government's minimum acceptance 
period will be rejected.
    (f) The bidder agrees to execute all that it has undertaken to do, 
in compliance with its bid, if that bid is accepted in writing within 
(1) the acceptance period stated in paragraph (c) above or (2) any 
longer acceptance period stated in paragraph (d) above.

                           (End of provision)



Sec. 52.214-17  Affiliated Bidders.

    As prescribed in 14.201-6(k), insert the following provision:

                      Affiliated Bidders (APR 1984)

    (a) Business concerns are affiliates of each other when, either 
directly or indirectly, (1) one concern controls or has the power to 
control the other, or (2) a third party controls or has the power to 
control both.
    (b) Each bidder shall submit with its bid an affidavit stating that 
it has no affiliates, or containing the following information:
    (1) The names and addresses of all affiliates of the bidder.
    (2) The names and addresses of all persons and concerns exercising 
control or ownership of the bidder and any or all of its affiliates, and 
whether they exercise such control or ownership as common officers, 
directors, stockholders holding controlling interest, or otherwise.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1746, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985; 56 FR 55380, Oct. 25, 1991]



Sec. 52.214-18  Preparation of Bids--Construction.

    As prescribed in 14.201-6(l), insert the following provision:

              Preparation of Bids--Construction (APR 1984)

    (a) Bids must be (1) submitted on the forms furnished by the 
Government or on copies of those forms, and (2) manually signed. The 
person signing a bid must initial each erasure or change appearing on 
any bid form.
    (b) The bid form may require bidders to submit bid prices for one or 
more items on various bases, including--
    (1) Lump sum bidding;
    (2) Alternate prices;
    (3) Units of construction; or
    (4) Any combination of subparagraphs (1) through (3) above.
    (c) If the solicitation requires bidding on all items, failure to do 
so will disqualify the bid. If bidding on all items is not required, 
bidders should insert the words no bid in the space provided for any 
item on which no price is submitted.
    (d) Alternate bids will not be considered unless this solicitation 
authorizes their submission.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 25531, June 21, 1990]



Sec. 52.214-19  Contract Award--Sealed Bidding--Construction.

    As prescribed in 14.201-6(m), insert the following provision:

         Contract Award--Sealed Bidding--Construction (AUG 1996)

    (a) The Government will evaluate bids in response to this 
solicitation without discussions and will award a contract to the 
responsible bidder whose bid, conforming to the solicitation, will be 
most advantageous to the Government, considering only price and the 
price-related factors specified elsewhere in the solicitation.
    (b) The Government may reject any or all bids, and waive 
informalities or minor irregularities in bids received.
    (c) The Government may accept any item or combination of items, 
unless doing so is precluded by a restrictive limitation in the 
solicitation or the bid.
    (d) The Government may reject a bid as nonresponsive if the prices 
bid are materially unbalanced between line items or subline items. A bid 
is materially unbalanced when it is based on prices significantly less 
than cost for some work and prices which are significantly overstated in 
relation to cost for other work, and if there is a

[[Page 59]]

reasonable doubt that the bid will result in the lowest overall cost to 
the Government even though it may be the low evaluated bid, or if it is 
so unbalanced as to be tantamount to allowing an advance payment.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1746, Jan. 11, 1985; 
50 FR 52434, Dec. 23, 1985; 61 FR 31664, June 20, 1996]



Sec. 52.214-20  Bid Samples.

    As prescribed in 14.201-6(o)(1), insert the following provision in 
invitations for bids if bid samples are required:

                         Bid Samples (APR 1984)

    (a) Bid samples are item sample submissions required of bidders to 
show those characteristics of the offered products that cannot 
adequately be described by specifications or purchase descriptions 
(e.g., balance, facility of use, or pattern).
    (b) Bid samples, required elsewhere in this solicitation, must be 
furnished as part of the bid and must be received by the time specified 
for receipt of bids. Failure to furnish samples on time will require 
rejection of the bid, except that a late sample sent by mail may be 
considered under the Late Submissions, Modifications, and Withdrawals of 
Bids provision of this solicitation.
    (c) Bid samples will be tested or evaluated to determine compliance 
with all the characteristics listed for examination in this 
solicitation. Failure of these samples to conform to the required 
characteristics will require rejection of the bid. Products delivered 
under any resulting contract must conform to (1) the approved sample for 
the characteristics listed for test or evaluation and (2) the 
specifications for all other characteristics.
    (d) Unless otherwise specified in the solicitation, bid samples 
shall be (1) submitted at no expense to the Government, and (2) returned 
at the bidder's request and expense, unless they are destroyed during 
preaward testing.

                           (End of provision)

    Alternate I (APR 1984). If it appears that the conditions in 14.202-
4(f)(1) will apply and the contracting officer anticipates granting 
waivers thereunder, and if the nature of the required product does not 
necessitate limiting the grant of a waiver to a product produced at the 
same plant in which the product previously acquired or tested was 
produced, add the following paragraph (e) to the basic provision:

    (e) At the discretion of the Contracting Officer, the requirement 
for furnishing bid samples may be waived for a bidder if (1) the bid 
states that the offered product is the same as a product offered by the 
bidder to the ____ [as appropriate, the Contracting Officer shall 
designate the contracting office or an alternate activity or office], 
and (2) the Contracting Officer determines that the previously offered 
product was accepted or tested and found to comply with specification 
and other requirements for technical acceptability conforming in every 
material respect with those in this solicitation.

    Alternate II (APR 1984). If it appears that the conditions in 
14.202-4(f)(1) will apply and the contracting officer anticipates 
granting waivers thereunder, and if the nature of the required product 
necessitates limiting the grant of a waiver to a product produced at the 
same plant in which the product previously acquired or tested was 
produced, add the following paragraph (e) to the basic provision:

    (e) At the discretion of the Contracting Officer, the requirements 
for furnishing bid samples may be waived for a bidder if (1) the bid 
states that the offered product is the same as a product offered by the 
bidder to the ____ [as appropriate, the Contracting Officer shall 
designate the contracting office or an alternate activity or office] on 
a previous acquisition, (2) the Contracting Officer determines that the 
previously offered product was accepted or tested and found to comply 
with specification and other requirements for technical acceptability 
conforming in every material respect with those of this solicitation, 
and (3) the product offered under this solicitation will be produced 
under a resulting contract at the same plant in which the previously 
acquired or tested product was produced.



Sec. 52.214-21  Descriptive Literature.

    As prescribed in 14.201-6(p)(1), insert the following provision in 
invitations for bids if (a) descriptive literature is required to 
evaluate the technical acceptability of an offered product and (b) the 
required information will not be readily available unless it is 
submitted by bidders:

                    Descriptive Literature (APR 1984)

    (a) Descriptive literature means information (e.g., cuts, 
illustrations, drawings, and brochures) that is submitted as part of a 
bid. Descriptive literature is required to establish, for the purpose of 
evaluation and award, details of the product offered that are specified 
elsewhere in the solicitation and pertain

[[Page 60]]

to significant elements such as (1) design; (2) materials; (3) 
components; (4) performance characteristics; and (5) methods of 
manufacture, assembly, construction, or operation. The term includes 
only information required to determine the technical acceptability of 
the offered product. It does not include other information such as that 
used in determining the responsibility of a prospective Contractor or 
for operating or maintaining equipment.
    (b) Descriptive literature, required elsewhere in this solicitation, 
must be (1) identified to show the item(s) of the offer to which it 
applies and (2) received by the time specified in this solicitation for 
receipt of bids. Failure to submit descriptive literature on time will 
require rejection of the bid, except that late descriptive literature 
sent by mail may be considered under the Late Submissions, 
Modifications, and Withdrawals of Bids provision of this solicitation.
    (c) The failure of descriptive literature to show that the product 
offered conforms to the requirements of this solicitation will require 
rejection of the bid.

                           (End of provision)

    Alternate I (APR 1984). If the possibility exists that the 
contracting officer may waive the requirement for furnishing descriptive 
literature for a bidder offering a previously supplied product that 
meets specification requirements of the current solicitation, add the 
following paragraphs (d) and (e).

    (d) At the discretion of the Contracting Officer, the requirement 
for furnishing descriptive literature under this solicitation may be 
waived for any bidder that makes an affirmative representation in 
subparagraph (d)(1) below, if the Contracting Officer determines that 
the product supplied by the bidder under a prior contract meets the 
requirements of this solicitation.
    (1) The bidder represents that it {time}  has, {time}  has not 
[check applicable box] supplied a product to the ____ [as appropriate, 
the Contracting Officer shall designate the contracting office or an 
alternate activity or office] under a prior contract that is the same as 
the product offered under this solicitation for which descriptive 
literature is required.
    (2) If the bidder checked has in paragraph (d)(1) above, and seeks a 
waiver of the requirement for submitting descriptive literature, the 
bidder must fill in the following information:

Prior contract number___________________________________________________
Date of prior contract__________________________________________________
Contract line item number of product supplied___________________________
Name and address of government activity to which delivery was made______
Date of final delivery of product supplied______________________________

    (e) Bidders must submit bids on the basis of required descriptive 
literature or on the basis of a previously supplied product under 
paragraph (d) above. A bidder submitting a bid on one of these two bases 
may not elect to have its bid considered on the alternative basis after 
the time specified for receipt of bids. A bidder's request for a waiver 
under paragraph (d) above will be disregarded if that bidder has 
submitted the descriptive literature required under this solicitation.



Sec. 52.214-22  Evaluation of Bids for Multiple Awards.

    As prescribed in 14.201-6(q), insert the following provision:

            Evaluation of Bids for Multiple Awards (MAR 1990)

    In addition to other factors, bids will be evaluated on the basis of 
advantages and disadvantages to the Government that might result from 
making more than one award (multiple awards). It is assumed, for the 
purpose of evaluating bids, that $500 would be the administrative cost 
to the Government for issuing and administering each contract awarded 
under this solicitation, and individual awards will be for the items or 
combinations of items that result in the lowest aggregate cost to the 
Government, including the assumed administrative costs.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 3887, Feb. 5, 1990]



Sec. 52.214-23  Late Submissions, Modifications, and Withdrawals of Technical Proposals Under Two-Step Sealed Bidding.

    As prescribed in 14.201-6(r), insert the following provision:

Late Submissions, Modifications, and Withdrawals of Technical Proposals 
                Under Two-Step Sealed Bidding (MAY 1997)

    (a) Any technical proposal under step one of two-step sealed bidding 
received at the office designated in this solicitation after the exact 
time specified for receipt will not be considered unless it is received 
before the invitation for bids in step two is issued and it--
    (1) Was sent by registered or certified mail not later than the 
fifth calendar day before the date specified for receipt of technical 
proposals (e.g., technical proposal submitted in response to a 
solicitation requiring receipt of technical proposals by the 20th of the 
month must have been mailed by the 15th);

[[Page 61]]

    (2) Was sent by mail (or telegram or facsimile, if authorized) or 
hand-carried (including delivery by a commercial carrier) if it is 
determined by the Government that the late receipt was due primarily to 
Government mishandling after receipt at the Government installation;
    (3) Was sent by U.S. Postal Service Express Mail Next Day Service-
Post Office To Addressee, not later than 5:00 p.m. at the place of 
mailing 2 working days prior to the date specified for receipt of 
technical proposals. The term working days excludes weekends and U.S. 
Federal holidays;
    (4) Was transmitted through an electronic commerce method authorized 
by the solicitation and was received at the initial point of entry to 
the Government infrastructure not later than 5:00 p.m. one working day 
prior to the date specified for receipt of technical proposals; or
    (5) Is the only technical proposal received.
    (b) Any modification of a technical proposal is subject to the same 
conditions as in paragraph (a) of this provision, except that (1) the 
use of a telegram (or mailgram) is authorized, and (2) if the 
solicitation authorizes facsimile bids, technical proposals may be 
modified via facsimile received at any time before the exact time set 
for receipt of bids under step two, subject to the conditions specified 
in the provision entitled Facsimile Bids.
    (c) Technical proposals may be withdrawn by written notice or 
telegram (including mailgram) received at any time before the exact time 
set for receipt of bids under step two. If the solicitation authorizes 
facsimile bids, technical proposals may be withdrawn via facsimile 
received at any time before the exact time set for receipt of bids under 
step two, subject to the conditions specified in the provision entitled 
Facsimile Bids. Technical proposals may be withdrawn in person by the 
submitter or the submitter's authorized representative if, before the 
exact time set for receipt of bids in step two, the identity of the 
person requesting withdrawal is established and that person signs a 
receipt for the technical proposal.
    (d) The only acceptable evidence to establish the date of mailing of 
a late technical proposal, modification, or withdrawal of a technical 
proposal sent either by registered or certified mail is the U.S. or 
Canadian Postal Service postmark both on the envelope or wrapper and on 
the original receipt from the U.S. or Canadian Postal Service. Both 
postmarks must show a legible date, or the technical proposal, 
modification, or withdrawal of technical proposal shall be processed as 
if mailed late. Postmark means a printed, stamped, or otherwise placed 
impression (exclusive of a postage meter machine impression) that is 
readily identifiable without further action as having been supplied and 
affixed by employees of the U.S. or Canadian Postal Service on the date 
of mailing. Therefore, submitters of technical proposals should request 
the postal clerk to place a legible hand cancellation bull's-eye 
postmark on both the receipt and the envelope or wrapper.
    (e) Acceptable evidence to establish the time of receipt at the 
Government installation includes the time/date stamp of that 
installation on the proposal wrapper, other documentary evidence of 
receipt maintained by the installation, or oral testimony or statements 
of Government personnel.
    (f) The only acceptable evidence to establish the date of mailing of 
a late technical proposal, modification, or withdrawal sent by U.S. 
Postal Service Express Mail Next Day Service-Post Office to Addressee is 
the date entered by the post office receiving clerk on the Express Mail 
Next Day Service-Post Office to Addressee label and the postmark on the 
envelope or wrapper and on the original receipt from the U.S. Postal 
Service. Postmark has the same meaning as defined in paragraph (d) of 
this provision, excluding postmarks of the Canadian Postal Service. 
Therefore, submitters of technical proposals should request the postal 
clerk to place a legible hand cancellation bull's-eye postmark on both 
the receipt and the envelope or wrapper.
    (g) If an emergency or unanticipated event interrupts normal 
Government processes so that technical proposals cannot be received at 
the office designated for receipt of technical proposals by the exact 
time specified in the solicitation, and urgent Government requirements 
preclude amendment of the solicitation or other notice of an extension 
of the closing date, the time specified for receipt of technical 
proposals will be deemed to be extended to the same time of day 
specified in the solicitation on the first work day on which normal 
Government processes resume. If no time is specified in the 
solicitation, the time for receipt is 4:30 p.m., local time, for the 
designated Government office.

                           (End of provision)

[54 FR 48991, Nov. 28, 1989, as amended at 60 FR 34740, July 3, 1995; 61 
FR 31620, June 20, 1996; 61 FR 69293, Dec. 31, 1996; 62 FR 12693, Mar. 
17, 1997]



Sec. 52.214-24  Multiple Technical Proposals.

    As prescribed in 14.201-6(s), insert the following provision:

                 Multiple Technical Proposals (APR 1984)

    In the first step of this two-step acquisition, solicited sources 
are encouraged to submit multiple technical proposals presenting 
different basic approaches. Each technical

[[Page 62]]

proposal submitted will be separately evaluated and the submitter will 
be notified as to its acceptability.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1747, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985]



Sec. 52.214-25  Step Two of Two-Step Sealed Bidding.

    As prescribed in 14.201-6(t), insert the following provision:

             Step Two of Two-Step Sealed Bidding (APR 1985)

    (a) This invitation for bids is issued to initiate step two of two-
step sealed bidding under subpart 14.5 of the Federal Acquisition 
Regulation.
    (b) The only bids that the Contracting Officer may consider for 
award of a contract are those received from bidders that have submitted 
acceptable technical proposals in step one of this acquisition under 
____ [the Contracting Officer shall insert the identification of the 
step-one request for technical proposals].
    (c) Any bidder that has submitted multiple technical proposals in 
step one of this acquisition may submit a separate bid on each technical 
proposal that was determined to be acceptable to the Government.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1747, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985]



Sec. 52.214-26  Audit and Records--Sealed Bidding.

    As prescribed in 14.201-7(a), insert the following clause:

              Audit and Records--Sealed Bidding (OCT 1997)

    (a) As used in this clause, records includes books, documents, 
accounting procedures and practices, and other data, regardless of type 
and regardless of whether such items are in written form, in the form of 
computer data, or in any other form.
    (b) Cost or pricing data. If the Contractor has been required to 
submit cost or pricing data in connection with the pricing of any 
modification to this contract, the Contracting Officer, or an authorized 
representative of the Contracting Officer, in order to evaluate the 
accuracy, completeness, and currency of the cost or pricing data, shall 
have the right to examine and audit all of the Contractor's records, 
including computations and projections, related to--
    (1) The proposal for the modification;
    (2) The discussions conducted on the proposal(s), including those 
related to negotiating;
    (3) Pricing of the modification; or
    (4) Performance of the modification.
    (c) Comptroller General. In the case of pricing any modification, 
the Comptroller General of the United States, or an authorized 
representative, shall have the same rights as specified in paragraph (b) 
of this clause.
    (d) Availability. The Contractor shall make available at its office 
at all reasonable times the materials described in paragraph (b) of this 
clause, for examination, audit, or reproduction, until 3 years after 
final payment under this contract, or for any other period specified in 
subpart 4.7 of the Federal Acquisition Regulation (FAR). FAR Subpart 
4.7, Contractor Records Retention, in effect on the data of this 
contract, is incorporated by reference in its entirety and made a part 
of this contract.
    (1) If this contract is completely or partially terminated, the 
records relating to the work terminated shall be made available for 3 
years after any resulting final termination settlement.
    (2) Records pertaining to appeals under the Disputes clause or to 
litigation or the settlement of claims arising under or relating to the 
performance of this contract shall be made available until disposition 
of such appeals, litigation, or claims.
    (e) The Contractor shall insert a clause containing all the 
provisions of this clause, including this paragraph (e), in all 
subcontracts expected to exceed the threshold in FAR 15.403-4(a)(1) for 
submission of cost or pricing data.

                             (End of clause)

[60 FR 42651, Aug. 16, 1995; 60 FR 44548, Aug. 28, 1995; 62 FR 51271, 
Sept. 30, 1997]



Sec. 52.214-27  Price Reduction for Defective Cost or Pricing Data--Modifications--Sealed Bidding.

    As prescribed in 14.201-7(b), insert the following clause:

   Price Reduction for Defective Cost or Pricing Data--Modifications--
                        Sealed Bidding (OCT 1997)

    (a) This clause shall become operative only for any modification to 
this contract involving aggregate increases and/or decreases in costs, 
plus applicable profits, expected to exceed the threshold for the 
submission of cost or pricing data at FAR 15.403-4(a)(1), except that 
this clause does not apply to a modification if an exception under FAR 
15.403-1(b) applies.
    (b) If any price, including profit, negotiated in connection with 
any modification

[[Page 63]]

under this clause, was increased by any significant amount because (1) 
the Contractor or a subcontractor furnished cost or pricing data that 
were not complete, accurate, and current as certified in its Certificate 
of Current Cost or Pricing Data, (2) a subcontractor or prospective 
subcontractor furnished the Contractor cost or pricing data that were 
not complete, accurate, and current as certified in the Contractor's 
Certificate of Current Cost or Pricing Data, or (3) any of these parties 
furnished data of any description that were not accurate, the price 
shall be reduced accordingly and the contract shall be modified to 
reflect the reduction. This right to a price reduction is limited to 
that resulting from defects in data relating to modifications for which 
this clause becomes operative under paragraph (a) above.
    (c) Any reduction in the contract price under paragraph (b) above 
due to defective data from a prospective subcontractor that was not 
subsequently awarded the subcontract shall be limited to the amount, 
plus applicable overhead and profit markup, by which (1) the actual 
subcontract or (2) the actual cost to the Contractor, if there was no 
subcontract, was less than the prospective subcontract cost estimate 
submitted by the Contractor; provided, that the actual subcontract price 
was not itself affected by defective cost or pricing data.
    (d)(1) If the Contracting Officer determines under paragraph (b) of 
this clause that a price or cost reduction should be made, the 
Contractor agrees not to raise the following matters as a defense--
    (i) The Contractor or subcontractor was a sole source supplier or 
otherwise was in a superior bargaining position and thus the price of 
the contract would not have been modified even if accurate, complete, 
and current cost or pricing data had been submitted;
    (ii) The Contracting Officer should have known that the cost or 
pricing data in issue were defective even though the Contractor or 
subcontractor took no affirmative action to bring the character of the 
data to the attention of the Contracting Officer;
    (iii) The contract was based on an agreement about the total cost of 
the contract and there was no agreement about the cost of each item 
procured under the contract; or
    (iv) The Contractor or subcontractor did not submit a Certificate of 
Current Cost or Pricing Data.
    (2)(i) Except as prohibited by subdivision (d)(2)(ii) of this 
clause, an offset in an amount determined appropriate by the Contracting 
Officer based upon the facts shall be allowed against the amount of a 
contract price reduction if--
    (A) The Contractor certifies to the Contracting Officer that, to the 
best of the Contractor's knowledge and belief, the Contractor is 
entitled to the offset in the amount requested; and
    (B) The Contractor proves that the cost or pricing data were 
available before the date of agreement on the price of the contract (or 
price of the modification) and that the data were not submitted before 
such date.
    (ii) An offset shall not be allowed if--
    (A) The understated data was known by the Contractor to be 
understated when the Certificate of Current Cost or Pricing Data was 
signed; or
    (B) The Government proves that the facts demonstrate that the 
contract price would not have increased in the amount to be offset even 
if the available data had been submitted before the date of agreement on 
price.
    (e) If any reduction in the contract price under this clause reduces 
the price of items for which payment was made prior to the date of the 
modification reflecting the price reduction, the Contractor shall be 
liable to and shall pay the United States at the time such overpayment 
is repaid--
    (1) Simple interest on the amount of such overpayment to be computed 
from the date(s) of overpayment to the Contractor to the date the 
Government is repaid by the Contractor at the applicable underpayment 
rate effective for each quarter prescribed by the Secretary of the 
Treasury under 26 U.S.C. 6621(a)(2); and
    (2) A penalty equal to the amount of the overpayment, if the 
Contractor or subcontractor knowingly submitted cost or pricing data 
which were incomplete, inaccurate, or noncurrent.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1747, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985; 53 FR 10830, Apr. 1, 1988; 55 FR 52797, Dec. 
21, 1990; 56 FR 67415, Dec. 30, 1991; 60 FR 48218, Sept. 18, 1995; 62 FR 
51271, Sept. 30, 1997]



Sec. 52.214-28  Subcontractor Cost or Pricing Data--Modifications--Sealed Bidding.

    As prescribed in 14.201-7(c), insert the following clause:

 Subcontractor Cost or Pricing Data--Modifications--Sealed Bidding (OCT 
                                  1997)

    (a) The requirements of paragraphs (b) and (c) of this clause shall 
(1) become operative only for any modification to this contract 
involving aggregate increases and/or decreases in costs, plus applicable 
profits, expected to exceed the threshold for submission of cost or 
pricing data at (FAR) 48 CFR 15.403-4(a)(1), and (2) be limited to such 
modifications.
    (b) Before awarding any subcontract expected to exceed the threshold 
for submission of cost or pricing data at FAR 15.403-4(a)(1), on the 
date of agreement on price or

[[Page 64]]

the date of award, whichever is later; or before pricing any subcontract 
modifications involving aggregate increases and/or decreases in costs, 
plus applicable profits, expected to exceed the threshold for submission 
of cost or pricing data at FAR 15.403-4(a)(1), the Contractor shall 
require the subcontractor to submit cost or pricing data (actually or by 
specific identification in writing), unless an exception under FAR 
15.403-1(b) applies.
    (c) The Contractor shall require the subcontractor to certify in 
substantially the form prescribed in subsection 15.406-2 of the Federal 
Acquisition Regulation that, to the best of its knowledge and belief, 
the data submitted under paragraph (b) above were accurate, complete, 
and current as of the date of agreement on the negotiated price of the 
subcontract or subcontract modification.
    (d) The Contractor shall insert the substance of this clause, 
including this paragraph (d), in each subcontract that, when entered 
into, exceeds the threshold for submission of cost or pricing data at 
FAR 15.403-4(a)(1).

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1747, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985; 56 FR 67415, Dec. 30, 1991; 59 FR 62499, 
Dec. 5, 1994; 60 FR 48218, Sept. 18, 1995; 62 FR 51271, Sept. 30, 1997]



Sec. 52.214-29  Order of Precedence--Sealed Bidding.

    As prescribed in 14.201-7(d), insert the following clause:

             Order of Precedence--Sealed Bidding (JAN 1986)

    Any inconsistency in this solicitation or contract shall be resolved 
by giving precedence in the following order: (a) the Schedule (excluding 
the specifications); (b) representations and other instructions; (c) 
contract clauses; (d) other documents, exhibits, and attachments; and 
(e) the specifications.

                             (End of clause)

[51 FR 2666, Jan. 17, 1986, as amended at 60 FR 48218, Sept. 18, 1995]



Sec. 52.214-30  Annual Representations and Certifications--Sealed Bidding.

    As prescribed in 14.201-6(u), insert the following provision:

  Annual Representations and Certifications--Sealed Bidding (JAN 1997)

    The bidder has (check the appropriate block):
    {time}  (a) Submitted to the contracting office issuing this 
solicitation, annual representations and certifications dated ______ 
[insert date of signature on submission], which are incorporated herein 
by reference, and are current, accurate, and complete as of the date of 
this bid, except as follows [insert changes that affect only this 
solicitation; if ``none,'' so state]:

_______________________________________________________________________
    {time}  (b) Enclosed its annual representations and certifications.

                           (End of provision)

[62 FR 238, Jan. 2, 1997]



Sec. 52.214-31  Facsimile Bids.

    As prescribed in 14.201-6(w), insert the following provision:

                        Facsimile Bids (DEC 1989)

    (a) Definition. Facsimile bid, as used in this solicitation, means a 
bid, modification of a bid, or withdrawal of a bid that is transmitted 
to and received by the Government via electronic equipment that 
communicates and reproduces both printed and handwritten material.
    (b) Bidders may submit facsimile bids as responses to this 
solicitation. These responses must arrive at the place and by the time, 
specified in the solicitation.
    (c) Facsimile bids that fail to furnish required representations or 
information or that reject any of the terms, conditions, and provisions 
of the solicitation may be excluded from consideration.
    (d) Facsimile bids must contain the required signatures.
    (e) The Government reserves the right to make award solely on the 
facsimile bid. However, if requested to do so by the Contracting 
Officer, the apparently successful bidder agrees to promptly submit the 
complete original signed bid.
    (f) Facsimile receiving data and compatibility characteristics are 
as follows:
    (1) Telephone number of receiving facsimile equipment:
_______________________________________________________________________
    (2) Compatibility characteristics of receiving facsimile equipment 
(e.g., make and model number, receiving speed, communications protocol):
_______________________________________________________________________
_______________________________________________________________________
    (g) If the bidder chooses to transmit a facsimile bid, the 
Government will not be responsible for any failure attributable to the 
transmission or receipt of the facsimile bid including, but not limited 
to, the following:
    (1) Receipt of garbled or incomplete bid.
    (2) Availability or condition of the receiving facsimile equipment.

[[Page 65]]

    (3) Incompatibility between the sending and receiving equipment.
    (4) Delay in transmission or receipt of bid.
    (5) Failure of the bidder to properly identify the bid.
    (6) Illegibility of bid.
    (7) Security of bid data.

                           (End of provision)

[54 FR 48992, Nov. 28, 1989]



Sec. 52.214-32  Late Submissions, Modifications, and Withdrawals of Bids (Overseas).

    As prescribed in 14.201-6(c)(4), insert the following provision:

Late Submissions, Modifications, and Withdrawals of Bids (Overseas) (MAY 
                                  1997)

    (a) Any bid received at the office designated in the solicitation 
after the exact time specified for receipt will not be considered unless 
it is received before award is made and it--
    (1) Was sent by mail (or telegram or facsimile, if authorized) or 
hand-carried (including delivery by a commercial carrier) if it is 
determined by the Government that the late receipt was due primarily to 
Government mishandling after receipt at the Government installation; or
    (2) Was transmitted through an electronic commerce method authorized 
by the solicitation and was received at the initial point of entry to 
the Government infrastructure not later than 5:00 p.m. one working day 
prior to the date specified for receipt of bids. The term working day 
excludes weekends and U.S. Federal holidays.
    (b) Any modification or withdrawal of a bid is subject to the same 
conditions as in paragraph (a) of this provision.
    (c) The only acceptable evidence to establish the time of receipt at 
the Government installation is the time/date stamp of that installation 
on the bid wrapper or other documentary evidence of receipt maintained 
by the installation.
    (d) Notwithstanding paragraph (a) of this provision, a late 
modification of an otherwise successful bid that makes its terms more 
favorable to the Government will be considered at any time it is 
received and may be accepted.
    (e) Bids may be withdrawn by written notice or telegram (including 
mailgram) received at any time before the exact time set for receipt of 
bids. If the solicitation authorizes facsimile bids, bids may be 
withdrawn via facsimile received at any time before the exact time set 
for receipt of bids, subject to the conditions specified in the 
provision entitled Facsimile Bids. A bid may be withdrawn in person by a 
bidder or its authorized representative if, before the exact time set 
for receipt of bids, the identity of the person requesting withdrawal is 
established and that person signs a receipt for the bid.
    (f) If an emergency or unanticipated event interrupts normal 
Government processes so as to cause postponement of the scheduled bid 
opening, and urgent Government requirements preclude amendment of the 
solicitation or other notice of an extension of the opening date, the 
time specified for receipt of bids will be deemed to be extended to the 
same time of day specified in the solicitation on the first work day on 
which normal Government processes resume.

                           (End of provision)

[54 FR 48992, Nov. 28, 1989, as amended at 60 FR 34740, July 3, 1995; 61 
FR 31620, June 20, 1996; 61 FR 69293, Dec. 31, 1996; 62 FR 12693, Mar. 
17, 1997]



Sec. 52.214-33  Late Submissions, Modifications, and Withdrawals of Technical Proposals Under Two-Step Sealed Bidding (Overseas).

    As prescribed in 14.201-6(v), insert the following provision:

Late Submissions, Modifications, and Withdrawals of Technical Proposals 
           Under Two-Step Sealed Bidding (Overseas) (MAY 1997)

    (a) Any technical proposal under step one of two-step sealed bidding 
received at the office designated in this solicitation after the exact 
time specified for receipt will not be considered unless it is received 
before the invitation for bids in step two is issued and it--
    (1) Was sent by mail (or telegram or facsimile, if authorized) or 
hand-carried (including delivery by a commercial carrier) if it is 
determined by the Government that the late receipt was due primarily to 
Government mishandling after receipt at the Government installation;
    (2) Was transmitted through an electronic commerce method authorized 
by the solicitation and was received at the initial point of entry to 
the Government infrastructure not later than 5:00 p.m. one working day 
prior to the date specified for receipt of technical proposals. The term 
working day excludes weekends and U.S. Federal holidays; or
    (3) Is the only technical proposal received.
    (b) Any modification of a technical proposal is subject to the same 
conditions as in paragraph (a) of this provision, except that (1) the 
use of a telegram (or mailgram) is authorized, and (2) if the 
solicitation authorizes facsimile bids, technical proposals may be 
modified via facsimile received at any time before the exact time set 
for receipt of

[[Page 66]]

bids under step two, subject to the conditions specified in the 
provision entitled Facsimile Bids.
    (c) Technical proposals may be withdrawn by written notice or 
telegram (including mailgram) received at any time before the exact time 
set for receipt of bids under step two. If the solicitation authorizes 
facsimile bids, technical proposals may be withdrawn via facsimile 
received at any time before the exact time set for receipt of bids under 
step two, subject to the conditions specified in the provision entitled 
Facsimile Bids. Technical proposals may be withdrawn in person by the 
submitter or the submitter's authorized representative if, before the 
exact time set for receipt of bids in step two, the identity of the 
person requesting withdrawal is established and that person signs a 
receipt for the technical proposal.
    (d) Acceptable evidence to establish the time of receipt at the 
Government installation includes the time/date stamp of that 
installation on the proposal wrapper, other documentary evidence of 
receipt maintained by the installation, or oral testimony or statements 
of Government personnel.
    (e) If an emergency or unanticipated event interrupts normal 
Government processes so that technical proposals cannot be received at 
the office designated for receipt of technical proposals by the exact 
time specified in the solicitation, and urgent Government requirements 
preclude amendment of the solicitation or other notice of an extension 
of the closing date, the time specified for receipt of technical 
proposals will be deemed to be extended to the same time of day 
specified in the solicitation on the first work day on which normal 
Government processes resume. If no time is specified in the 
solicitation, the time for receipt is 4:30 p.m., local time, for the 
designated Government office.

                           (End of provision)

[54 FR 48992, Nov. 28, 1989, as amended at 60 FR 34740, July 3, 1995; 61 
FR 31620, June 20, 1996; 61 FR 69293, Dec. 31, 1996; 62 FR 12693, Mar. 
17, 1997]



Sec. 52.214-34  Submission of Offers in the English Language.

    As prescribed in 14.201-6(x), and 25.408(d), insert the following 
provision:

         Submission of Offers in the English Language (APR 1991)

    Offers submitted in response to this solicitation shall be in the 
English language. Offers received in other than English shall be 
rejected.

                           (End of provision)

[56 FR 15155, Apr. 15, 1991, as amended at 56 FR 33487, July 22, 1991; 
58 FR 31143, May 28, 1993; 62 FR 51271, Sept. 30, 1997]



Sec. 52.214-35  Submission of Offers in U.S. Currency.

    As prescribed in 14.201-6(y), and 25.408(d), insert the following 
provision:

            Submission of Offers in U.S. Currency (APR 1991)

    Offers submitted in response to this solicitation shall be in terms 
of U.S. dollars. Offers received in other than U.S. dollars shall be 
rejected.

                           (End of provision)

[56 FR 15155, Apr. 15, 1991, as amended at 58 FR 31143, May 28, 1993; 62 
FR 51271, Sept. 30, 1997]



Sec. 52.215-1  Instructions to Offerors--Competitive Acquisition.

    As prescribed in 15.209(a), insert the following provision:

      Instructions to Offerors--Competitive Acquisition (OCT 1997)

    (a) Definitions. As used in this provision--
    Discussions are negotiations that occur after establishment of the 
competitive range that may, at the Contracting Officer's discretion, 
result in the offeror being allowed to revise its proposal.
    In writing or written means any worded or numbered expression which 
can be read, reproduced, and later communicated, and includes 
electronically transmitted and stored information.
    Proposal modification is a change made to a proposal before the 
solicitation's closing date and time, or made in response to an 
amendment, or made to correct a mistake at any time before award.
    Proposal revision is a change to a proposal made after the 
solicitation closing date, at the request of or as allowed by a 
Contracting Officer as the result of negotiations.
    Time, if stated as a number of days, is calculated using calendar 
days, unless otherwise specified, and will include Saturdays, Sundays, 
and legal holidays. However, if the last day falls on a Saturday, 
Sunday, or legal holiday, then the period shall include the next working 
day.
    (b) Amendments to solicitations. If this solicitation is amended, 
all terms and conditions that are not amended remain unchanged. Offerors 
shall acknowledge receipt of any amendment to this solicitation by the 
date and time specified in the amendment(s).

[[Page 67]]

    (c) Submission, modification, revision, and withdrawal of proposals. 
(1) Unless other methods (e.g., electronic commerce or facsimile) are 
permitted in the solicitation, proposals and modifications to proposals 
shall be submitted in paper media in sealed envelopes or packages (i) 
addressed to the office specified in the solicitation, and (ii) showing 
the time and date specified for receipt, the solicitation number, and 
the name and address of the offeror. Offerors using commercial carriers 
should ensure that the proposal is marked on the outermost wrapper with 
the information in paragraphs (c)(1)(i) and (c)(1)(ii) of this 
provision.
    (2) The first page of the proposal must show--
    (i) The solicitation number;
    (ii) The name, address, and telephone and facsimile numbers of the 
offeror (and electronic address if available);
    (iii) A statement specifying the extent of agreement with all terms, 
conditions, and provisions included in the solicitation and agreement to 
furnish any or all items upon which prices are offered at the price set 
opposite each item;
    (iv) Names, titles, and telephone and facsimile numbers (and 
electronic addresses if available) of persons authorized to negotiate on 
the offeror's behalf with the Government in connection with this 
solicitation; and
    (v) Name, title, and signature of person authorized to sign the 
proposal. Proposals signed by an agent shall be accompanied by evidence 
of that agent's authority, unless that evidence has been previously 
furnished to the issuing office.
    (3) Late proposals and revisions. (i) Any proposal received at the 
office designated in the solicitation after the exact time specified for 
receipt of offers will not be considered unless it is received before 
award is made and--
    (A) It was sent by registered or certified mail not later than the 
fifth calendar day before the date specified for receipt of offers 
(e.g., an offer submitted in response to a solicitation requiring 
receipt of offers by the 20th of the month must have been mailed by the 
15th);
    (B) It was sent by mail (or telegram or facsimile, if authorized) or 
hand-carried (including delivery by a commercial carrier) if it is 
determined by the Government that the late receipt was due primarily to 
Government mishandling after receipt at the Government installation;
    (C) It was sent by U.S. Postal Service Express Mail Next Day 
Service-Post Office to Addressee, not later than 5:00 p.m. at the place 
of mailing two working days prior to the date specified for receipt of 
proposals. The term ``working days'' excludes weekends and U.S. Federal 
holidays;
    (D) It was transmitted through an electronic commerce method 
authorized by the solicitation and was received at the initial point of 
entry to the Government infrastructure not later than 5:00 p.m. one 
working day prior to the date specified for receipt of proposals; or
    (E) There is acceptable evidence to establish that it was received 
at the activity designated for receipt of offers and was under the 
Government's control prior to the time set for receipt of offers, and 
the Contracting Officer determines that accepting the late offer would 
not unduly delay the procurement; or
    (F) It is the only proposal received.
    (ii) Any modification or revision of a proposal or response to 
request for information, including any final proposal revision, is 
subject to the same conditions as in subparagraphs (c)(3)(i)(A) through 
(c)(3)(i)(E) of this provision.
    (iii) The only acceptable evidence to establish the date of mailing 
of a late proposal or modification or revision sent either by registered 
or certified mail is the U.S. or Canadian Postal Service postmark both 
on the envelope or wrapper and on the original receipt from the U.S. or 
Canadian Postal Service. Both postmarks must show a legible date or the 
proposal, response to a request for information, or modification or 
revision shall be processed as if mailed late. ``Postmark'' means a 
printed, stamped, or otherwise placed impression (exclusive of a postage 
meter machine impression) that is readily identifiable without further 
action as having been supplied and affixed by employees of the U.S. or 
Canadian Postal Service on the date of mailing. Therefore, offerors or 
respondents should request the postal clerk to place a legible hand 
cancellation bull's eye postmark on both the receipt and the envelope or 
wrapper.
    (iv) Acceptable evidence to establish the time of receipt at the 
Government installation includes the time/date stamp of that 
installation on the proposal wrapper, other documentary evidence of 
receipt maintained by the installation, or oral testimony or statements 
of Government personnel.
    (v) The only acceptable evidence to establish the date of mailing of 
a late offer, modification or revision, or withdrawal sent by Express 
Mail Next Day Service-Post Office to Addressee is the date entered by 
the post office receiving clerk on the ``Express Mail Next Day Service-
Post Office to Addressee'' label and the postmark on both the envelope 
or wrapper and on the original receipt from the U.S. Postal Service. 
``Postmark'' has the same meaning as defined in paragraph (c)(3)(iii) of 
this provision, excluding postmarks of the Canadian Postal Service. 
Therefore, offerors or respondents should request the postal clerk to 
place a legible hand cancellation bull's eye postmark on both the 
receipt and the envelope or wrapper.

[[Page 68]]

    (vi) Notwithstanding paragraph (c)(3)(i) of this provision, a late 
modification or revision of an otherwise successful proposal that makes 
its terms more favorable to the Government will be considered at any 
time it is received and may be accepted.
    (vii) Proposals may be withdrawn by written notice or telegram 
(including mailgram) received at any time before award. If the 
solicitation authorizes facsimile proposals, proposals may be withdrawn 
via facsimile received at any time before award, subject to the 
conditions specified in the provision entitled ``Facsimile Proposals.'' 
Proposals may be withdrawn in person by an offeror or an authorized 
representative, if the representative's identity is made known and the 
representative signs a receipt for the proposal before award.
    (viii) If an emergency or unanticipated event interrupts normal 
Government processes so that proposals cannot be received at the office 
designated for receipt of proposals by the exact time specified in the 
solicitation, and urgent Government requirements preclude amendment of 
the solicitation or other notice of an extension of the closing date, 
the time specified for receipt of proposals will be deemed to be 
extended to the same time of day specified in the solicitation on the 
first work day on which normal Government processes resume. If no time 
is specified in the solicitation, the time for receipt is 4:30 p.m., 
local time, for the designated Government office.
    (4) Unless otherwise specified in the solicitation, the offeror may 
propose to provide any item or combination of items.
    (5) Proposals submitted in response to this solicitation shall be in 
English and in U.S. dollars, unless otherwise permitted by the 
solicitation.
    (6) Offerors may submit modifications to their proposals at any time 
before the solicitation closing date and time, and may submit 
modifications in response to an amendment, or to correct a mistake at 
any time before award.
    (7) Offerors may submit revised proposals only if requested or 
allowed by the Contracting Officer.
    (8) Proposals may be withdrawn at any time before award. Withdrawals 
are effective upon receipt of notice by the Contracting Officer.
    (d) Offer expiration date. Proposals in response to this 
solicitation will be valid for the number of days specified on the 
solicitation cover sheet (unless a different period is proposed by the 
offeror).
    (e) Restriction on disclosure and use of data. Offerors that include 
in their proposals data that they do not want disclosed to the public 
for any purpose, or used by the Government except for evaluation 
purposes, shall--
    (1) Mark the title page with the following legend: This proposal 
includes data that shall not be disclosed outside the Government and 
shall not be duplicated, used, or disclosed--in whole or in part--for 
any purpose other than to evaluate this proposal. If, however, a 
contract is awarded to this offeror as a result of--or in connection 
with-- the submission of this data, the Government shall have the right 
to duplicate, use, or disclose the data to the extent provided in the 
resulting contract. This restriction does not limit the Government's 
right to use information contained in this data if it is obtained from 
another source without restriction. The data subject to this restriction 
are contained in sheets [insert numbers or other identification of 
sheets]; and
    (2) Mark each sheet of data it wishes to restrict with the following 
legend: Use or disclosure of data contained on this sheet is subject to 
the restriction on the title page of this proposal.
    (f) Contract award. (1) The Government intends to award a contract 
or contracts resulting from this solicitation to the responsible 
offeror(s) whose proposal(s) represents the best value after evaluation 
in accordance with the factors and subfactors in the solicitation.
    (2) The Government may reject any or all proposals if such action is 
in the Government's interest.
    (3) The Government may waive informalities and minor irregularities 
in proposals received.
    (4) The Government intends to evaluate proposals and award a 
contract without discussions with offerors (except clarifications as 
described in FAR 15.306(a)). Therefore, the offeror's initial proposal 
should contain the offeror's best terms from a cost or price and 
technical standpoint. The Government reserves the right to conduct 
discussions if the Contracting Officer later determines them to be 
necessary. If the Contracting Officer determines that the number of 
proposals that would otherwise be in the competitive range exceeds the 
number at which an efficient competition can be conducted, the 
Contracting Officer may limit the number of proposals in the competitive 
range to the greatest number that will permit an efficient competition 
among the most highly rated proposals.
    (5) The Government reserves the right to make an award on any item 
for a quantity less than the quantity offered, at the unit cost or 
prices offered, unless the offeror specifies otherwise in the proposal.
    (6) The Government reserves the right to make multiple awards if, 
after considering the additional administrative costs, it is in the 
Government's best interest to do so.
    (7) Exchanges with offerors after receipt of a proposal do not 
constitute a rejection or counteroffer by the Government.

[[Page 69]]

    (8) The Government may determine that a proposal is unacceptable if 
the prices proposed are materially unbalanced between line items or 
subline items. Unbalanced pricing exists when, despite an acceptable 
total evaluated price, the price of one or more contract line items is 
significantly overstated or understated as indicated by the application 
of cost or price analysis techniques. A proposal may be rejected if the 
Contracting Officer determines that the lack of balance poses an 
unacceptable risk to the Government.
    (9) If a cost realism analysis is performed, cost realism may be 
considered by the source selection authority in evaluating performance 
or schedule risk.
    (10) A written award or acceptance of proposal mailed or otherwise 
furnished to the successful offeror within the time specified in the 
proposal shall result in a binding contract without further action by 
either party.
    (11) The Government may disclose the following information in 
postaward debriefings to other offerors:
    (i) The overall evaluated cost or price and technical rating of the 
successful offeror;
    (ii) The overall ranking of all offerors, when any ranking was 
developed by the agency during source selection;
    (iii) A summary of the rationale for award; and
    (iv) For acquisitions of commercial items, the make and model of the 
item to be delivered by the successful offeror.

                           (End of provision)

    Alternate I (Oct 1997). As prescribed in 15.209(a)(1), substitute 
the following paragraph (f)(4) for paragraph (f)(4) of the basic 
provision:

    (f)(4) The Government intends to evaluate proposals and award a 
contract after conducting discussions with offerors whose proposals have 
been determined to be within the competitive range. If the Contracting 
Officer determines that the number of proposals that would otherwise be 
in the competitive range exceeds the number at which an efficient 
competition can be conducted, the Contracting Officer may limit the 
number of proposals in the competitive range to the greatest number that 
will permit an efficient competition among the most highly rated 
proposals. Therefore, the offeror's initial proposal should contain the 
offeror's best terms from a price and technical standpoint.

    Alternate II (Oct 1997). As prescribed in 15.209(a)(2), add a 
paragraph (c)(9) substantially the same as the following to the basic 
clause:

    (9) Offerors may submit proposals that depart from stated 
requirements. Such proposals shall clearly identify why the acceptance 
of the proposal would be advantageous to the Government. Any deviations 
from the terms and conditions of the solicitation, as well as the 
comparative advantage to the Government, shall be clearly identified and 
explicitly defined. The Government reserves the right to amend the 
solicitation to allow all offerors an opportunity to submit revised 
proposals based on the revised requirements.

[62 FR 51259, Sept. 30, 1997]



Sec. 52.215-2  Audit and Records--Negotiation.

    As prescribed in 15.209(b), insert the following clause:

                Audit and Records--Negotiation (AUG 1996)

    (a) As used in this clause, records includes books, documents, 
accounting procedures and practices, and other data, regardless of type 
and regardless of whether such items are in written form, in the form of 
computer data, or in any other form.
    (b) Examination of costs. If this is a cost-reimbursement, 
incentive, time-and-materials, labor-hour, or price redeterminable 
contract, or any combination of these, the Contractor shall maintain and 
the Contracting Officer, or an authorized representative of the 
Contracting Officer, shall have the right to examine and audit all 
records and other evidence sufficient to reflect properly all costs 
claimed to have been incurred or anticipated to be incurred directly or 
indirectly in performance of this contract. This right of examination 
shall include inspection at all reasonable times of the Contractor's 
plants, or parts of them, engaged in performing the contract.
    (c) Cost or pricing data. If the Contractor has been required to 
submit cost or pricing data in connection with any pricing action 
relating to this contract, the Contracting Officer, or an authorized 
representative of the Contracting Officer, in order to evaluate the 
accuracy, completeness, and currency of the cost or pricing data, shall 
have the right to examine and audit all of the Contractor's records, 
including computations and projections, related to--
    (1) The proposal for the contract, subcontract, or modification;
    (2) The discussions conducted on the proposal(s), including those 
related to negotiating;
    (3) Pricing of the contract, subcontract, or modification; or
    (4) Performance of the contract, subcontract or modification.
    (d) Comptroller General. (1) The Comptroller General of the United 
States, or an authorized representative, shall have access to and the 
right to examine any of the Contractor's

[[Page 70]]

directly pertinent records involving transactions related to this 
contract or a subcontract hereunder.
    (2) This paragraph may not be construed to require the Contractor or 
subcontractor to create or maintain any record that the Contractor or 
subcontractor does not maintain in the ordinary course of business or 
pursuant to a provision of law.
    (e) Reports. If the Contractor is required to furnish cost, funding, 
or performance reports, the Contracting Officer or an authorized 
representative of the Contracting Officer shall have the right to 
examine and audit the supporting records and materials, for the purpose 
of evaluating (1) the effectiveness of the Contractor's policies and 
procedures to produce data compatible with the objectives of these 
reports and (2) the data reported.
    (f) Availability. The Contractor shall make available at its office 
at all reasonable times the records, materials, and other evidence 
described in paragraphs (a), (b), (c), (d), and (e) of this clause, for 
examination, audit, or reproduction, until 3 years after final payment 
under this contract or for any shorter period specified in Subpart 4.7, 
Contractor Records Retention, of the Federal Acquisition Regulation 
(FAR), or for any longer period required by statute or by other clauses 
of this contract. In addition--
    (1) If this contract is completely or partially terminated, the 
records relating to the work terminated shall be made available for 3 
years after any resulting final termination settlement; and
    (2) Records relating to appeals under the Disputes clause or to 
litigation or the settlement of claims arising under or relating to this 
contract shall be made available until such appeals, litigation, or 
claims are finally resolved.
    (g) The Contractor shall insert a clause containing all the terms of 
this clause, including this paragraph (a), in all subcontracts under 
this contract that exceed the simplified acquisition threshold and--
    (1) That are cost-reimbursement, incentive, time-and-materials, 
labor-hour, or price-redeterminable type or any combination of these;
    (2) For which cost or pricing data are required; or
    (3) That require the subcontractor to furnish reports as discussed 
in paragraph (e) of this clause.
    The clause may be altered only as necessary to identify properly the 
contracting parties and the Contracting Officer under the Government 
prime contract.

                             (End of clause)

    Alternate I (JAN 1997). As prescribed in 15.209(b)(2), in facilities 
contracts, add the following sentence at the end of paragraph (b) of the 
basic clause:

    The obligations and rights specified in this paragraph shall extend 
to the use of, and charges for the use of, the facilities under this 
contract.

    Alternate II (APR 1998). As prescribed in 15.209(b)(3), add the 
following paragraph (h) to the basic clause:

    (h) The provisions of OMB Circular No. A-133, ``Audits of States, 
Local Governments, and Nonprofit Organizations,'' apply to this 
contract.

    Alternate III (JAN 1997). As prescribed in 15.209(b)(4), delete 
paragraph (d) of the basic clause and redesignate the remaining 
paragraphs accordingly.

[60 FR 42651, Aug. 16, 1995, as amended at 61 FR 39198, July 26, 1996; 
62 FR 259, Jan. 2, 1997; 62 FR 51271, Sept. 30, 1997; 63 FR 9055, Feb. 
23, 1998]



Sec. 52.215-3  Request for Information or Solicitation for Planning Purposes.

    As prescribed in 15.209(c), insert the following provision:

Request for Information or Solicitation for Planning Purposes (OCT 1997)

    (a) The Government does not intend to award a contract on the basis 
of this solicitation or to otherwise pay for the information solicited 
except as an allowable cost under other contracts as provided in 
subsection 31.205-18, Bid and proposal costs, of the Federal Acquisition 
Regulation.
    (b) Although ``proposal'' and ``offeror'' are used in this Request 
for Information, your response will be treated as information only. It 
shall not be used as a proposal.
    (c) This solicitation is issued for the purpose of: [state purpose].

                           (End of provision)

[62 FR 51261, Sept. 30, 1997]



Sec. 52.215-4  Type of Business Organization.

    As prescribed in 15.209(d), insert the following provision:

                Type of Business Organization (OCT 1997)

    The offeror or respondent, by checking the applicable box, 
represents that--
    (a) It operates as {time}  an individual, {time}  a partnership, 
{time}  a nonprofit organization, {time}  a joint venture, or {time}  a 
corporation incorporated under the laws of the State of ______.
    (b) If the offeror or respondent is a foreign entity, it operates as 
{time}  an individual, {time}  a partnership, {time}  a nonprofit 
organization, {time}  a joint venture, or {time}  a corporation, 
registered for business in (country) ______.

[[Page 71]]

                           (End of provision)

[62 FR 51261, Sept. 30, 1997]



Sec. 52.215-5  Facsimile Proposals.

    As prescribed in 15.209(e), insert the following provision:

                     Facsimile Proposals (OCT 1997)

    (a) Definition. Facsimile proposal, as used in this provision, means 
a proposal, revision or modification of a proposal, or withdrawal of a 
proposal that is transmitted to and received by the Government via 
facsimile machine.
    (b) Offerors may submit facsimile proposals as responses to this 
solicitation. Facsimile proposals are subject to the same rules as paper 
proposals.
    (c) The telephone number of receiving facsimile equipment is: 
[insert telephone number].
    (d) If any portion of a facsimile proposal received by the 
Contracting Officer is unreadable to the degree that conformance to the 
essential requirements of the solicitation cannot be ascertained from 
the document--
    (1) The Contracting Officer immediately shall notify the offeror and 
permit the offeror to resubmit the proposal;
    (2) The method and time for resubmission shall be prescribed by the 
Contracting Officer after consultation with the offeror; and
    (3) The resubmission shall be considered as if it were received at 
the date and time of the original unreadable submission for the purpose 
of determining timeliness, provided the offeror complies with the time 
and format requirements for resubmission prescribed by the Contracting 
Officer.
    (e) The Government reserves the right to make award solely on the 
facsimile proposal. However, if requested to do so by the Contracting 
Officer, the apparently successful offeror promptly shall submit the 
complete original signed proposal.

                           (End of provision)

[62 FR 51261, Sept. 30, 1997]



Sec. 52.215-6  Place of Performance.

    As prescribed in 15.209(f), insert the following provision:

                     Place of Performance (OCT 1997)

    (a) The offeror or respondent, in the performance of any contract 
resulting from this solicitation, {time}  intends, {time}  does not 
intend [check applicable block] to use one or more plants or facilities 
located at a different address from the address of the offeror or 
respondent as indicated in this proposal or response to request for 
information.
    (b) If the offeror or respondent checks ``intends'' in paragraph (a) 
of this provision, it shall insert in the following spaces the required 
information:

------------------------------------------------------------------------
    Place of performance (street        Name and address of owner and
 address, city, state, county, zip    operator of the plant or facility
               code)                 if other than offeror or respondent
------------------------------------------------------------------------
 
 
------------------------------------------------------------------------

                           (End of provision)

[62 FR 51261, Sept. 30, 1997]



Sec. 52.215-7  Annual Representations and Certifications--Negotiation.

    As prescribed in 15.209(g), insert the following provision:

    Annual Representations and Certifications--Negotiation (OCT 1997)

    The offeror has [check the appropriate block]:
    {time}  (a) Submitted to the contracting office issuing this 
solicitation, annual representations and certifications dated ______ 
[insert date of signature on submission] that are incorporated herein by 
reference, and are current, accurate, and complete as of the date of 
this proposal, except as follows [insert changes that affect only this 
proposal; if ``none,'' so state]:
    {time}  (b) Enclosed its annual representations and certifications.

                           (End of provision)

[62 FR 51261, Sept. 30, 1997]



Sec. 52.215-8  Order of Precedence--Uniform Contract Format.

    As prescribed in 15.209(h), insert the following clause:

         Order of Precedence--Uniform Contract Format (OCT 1997)

    Any inconsistency in this solicitation or contract shall be resolved 
by giving precedence in the following order:
    (a) The Schedule (excluding the specifications).
    (b) Representations and other instructions.
    (c) Contract clauses.
    (d) Other documents, exhibits, and attachments.
    (e) The specifications.

                             (End of clause)

[62 FR 51261, Sept. 30, 1997]

[[Page 72]]



Sec. 52.215-9  Changes or Additions to Make-or-Buy Program.

    As prescribed in 15.408(a), insert the following clause:

         Changes or Additions to Make-or-Buy Program (OCT 1997)

    (a) The Contractor shall perform in accordance with the make-or-buy 
program incorporated in this contract. If the Contractor proposes to 
change the program, the Contractor shall, reasonably in advance of the 
proposed change, (1) notify the Contracting Officer in writing, and (2) 
submit justification in sufficient detail to permit evaluation. Changes 
in the place of performance of any ``make'' items in the program are 
subject to this requirement.
    (b) For items deferred at the time of negotiation of this contract 
for later addition to the program, the Contractor shall, at the earliest 
possible time--
    (1) Notify the Contracting Officer of each proposed addition; and
    (2) Provide justification in sufficient detail to permit evaluation.
    (c) Modification of the make-or-buy program to incorporate proposed 
changes or additions shall be effective upon the Contractor's receipt of 
the Contracting Officer's written approval.

                             (End of clause)

    Alternate I (Oct 1997). As prescribed in 15.408(a)(1) add the 
following paragraph (d) to the basic clause:

    (d) If the Contractor desires to reverse the categorization of 
``make'' or ``buy'' for any item or items designated in the contract as 
subject to this paragraph, it shall--
    (1) Support its proposal with cost or pricing data when permitted 
and necessary to support evaluation; and
    (2) After approval is granted, promptly negotiate with the 
Contracting Officer an equitable reduction in the contract price in 
accordance with paragraph (k) of the Incentive Price Revision--Firm 
Target clause or paragraph (m) of the Incentive Price Revision--
Successive Targets clause of this contract.

    Alternate II (Oct 1997). As prescribed in 15.408(a)(2), add the 
following paragraph (d) to the basic clause:
    (d) If the Contractor desires to reverse the categorization of 
``make'' or ``buy'' for any item or items designated in the contract as 
subject to this paragraph, it shall--
    (1) Support its proposal with cost or pricing data to permit 
evaluation; and
    (2) After approval is granted, promptly negotiate with the 
Contracting Officer an equitable reduction in the contract's total 
estimated cost and fee in accordance with paragraph (e) of the Incentive 
Fee clause of this contract.

[62 FR 51261, Sept. 30, 1997]



Sec. 52.215-10  Price Reduction for Defective Cost or Pricing Data.

    As prescribed in 15.408(b), insert the following clause:

      Price Reduction for Defective Cost or Pricing Data (OCT 1997)

    (a) If any price, including profit or fee, negotiated in connection 
with this contract, or any cost reimbursable under this contract, was 
increased by any significant amount because--
    (1) The Contractor or a subcontractor furnished cost or pricing data 
that were not complete, accurate, and current as certified in its 
Certificate of Current Cost or Pricing Data;
    (2) A subcontractor or prospective subcontractor furnished the 
Contractor cost or pricing data that were not complete, accurate, and 
current as certified in the Contractor's Certificate of Current Cost or 
Pricing Data; or
    (3) Any of these parties furnished data of any description that were 
not accurate, the price or cost shall be reduced accordingly and the 
contract shall be modified to reflect the reduction.
    (b) Any reduction in the contract price under paragraph (a) of this 
clause due to defective data from a prospective subcontractor that was 
not subsequently awarded the subcontract shall be limited to the amount, 
plus applicable overhead and profit markup, by which--
    (1) The actual subcontract; or
    (2) The actual cost to the Contractor, if there was no subcontract, 
was less than the prospective subcontract cost estimate submitted by the 
Contractor; provided, that the actual subcontract price was not itself 
affected by defective cost or pricing data.
    (c)(1) If the Contracting Officer determines under paragraph (a) of 
this clause that a price or cost reduction should be made, the 
Contractor agrees not to raise the following matters as a defense:
    (i) The Contractor or subcontractor was a sole source supplier or 
otherwise was in a superior bargaining position and thus the price of 
the contract would not have been modified even if accurate, complete, 
and current cost or pricing data had been submitted.
    (ii) The Contracting Officer should have known that the cost or 
pricing data in issue were defective even though the Contractor or 
subcontractor took no affirmative action to bring the character of the 
data to the attention of the Contracting Officer.
    (iii) The contract was based on an agreement about the total cost of 
the contract

[[Page 73]]

and there was no agreement about the cost of each item procured under 
the contract.
    (iv) The Contractor or subcontractor did not submit a Certificate of 
Current Cost or Pricing Data.
    (2)(i) Except as prohibited by subdivision (c)(2)(ii) of this 
clause, an offset in an amount determined appropriate by the Contracting 
Officer based upon the facts shall be allowed against the amount of a 
contract price reduction if--
    (A) The Contractor certifies to the Contracting Officer that, to the 
best of the Contractor's knowledge and belief, the Contractor is 
entitled to the offset in the amount requested; and
    (B) The Contractor proves that the cost or pricing data were 
available before the ``as of'' date specified on its Certificate of 
Current Cost or Pricing Data, and that the data were not submitted 
before such date.
    (ii) An offset shall not be allowed if--
    (A) The understated data were known by the Contractor to be 
understated before the ``as of'' date specified on its Certificate of 
Current Cost or Pricing Data; or
    (B) The Government proves that the facts demonstrate that the 
contract price would not have increased in the amount to be offset even 
if the available data had been submitted before the ``as of'' date 
specified on its Certificate of Current Cost or Pricing Data.
    (d) If any reduction in the contract price under this clause reduces 
the price of items for which payment was made prior to the date of the 
modification reflecting the price reduction, the Contractor shall be 
liable to and shall pay the United States at the time such overpayment 
is repaid--
    (1) Simple interest on the amount of such overpayment to be computed 
from the date(s) of overpayment to the Contractor to the date the 
Government is repaid by the Contractor at the applicable underpayment 
rate effective for each quarter prescribed by the Secretary of the 
Treasury under 26 U.S.C. 6621(a)(2); and
    (2) A penalty equal to the amount of the overpayment, if the 
Contractor or subcontractor knowingly submitted cost or pricing data 
that were incomplete, inaccurate, or noncurrent.

                             (End of clause)

[62 FR 51262, Sept. 30, 1997]



Sec. 52.215-11  Price Reduction for Defective Cost or Pricing Data--Modifications.

    As prescribed in 15.408(c), insert the following clause:

 Price Reduction for Defective Cost or Pricing Data--Modifications (OCT 
                                  1997)

    (a) This clause shall become operative only for any modification to 
this contract involving a pricing adjustment expected to exceed the 
threshold for submission of cost or pricing data at FAR 15.403-4, except 
that this clause does not apply to any modification if an exception 
under FAR 15.403-1 applies.
    (b) If any price, including profit or fee, negotiated in connection 
with any modification under this clause, or any cost reimbursable under 
this contract, was increased by any significant amount because (1) the 
Contractor or a subcontractor furnished cost or pricing data that were 
not complete, accurate, and current as certified in its Certificate of 
Current Cost or Pricing Data, (2) a subcontractor or prospective 
subcontractor furnished the Contractor cost or pricing data that were 
not complete, accurate, and current as certified in the Contractor's 
Certificate of Current Cost or Pricing Data, or (3) any of these parties 
furnished data of any description that were not accurate, the price or 
cost shall be reduced accordingly and the contract shall be modified to 
reflect the reduction. This right to a price reduction is limited to 
that resulting from defects in data relating to modifications for which 
this clause becomes operative under paragraph (a) of this clause.
    (c) Any reduction in the contract price under paragraph (b) of this 
clause due to defective data from a prospective subcontractor that was 
not subsequently awarded the subcontract shall be limited to the amount, 
plus applicable overhead and profit markup, by which--
    (1) The actual subcontract; or
    (2) The actual cost to the Contractor, if there was no subcontract, 
was less than the prospective subcontract cost estimate submitted by the 
Contractor; provided, that the actual subcontract price was not itself 
affected by defective cost or pricing data.
    (d)(1) If the Contracting Officer determines under paragraph (b) of 
this clause that a price or cost reduction should be made, the 
Contractor agrees not to raise the following matters as a defense:
    (i) The Contractor or subcontractor was a sole source supplier or 
otherwise was in a superior bargaining position and thus the price of 
the contract would not have been modified even if accurate, complete, 
and current cost or pricing data had been submitted.
    (ii) The Contracting Officer should have known that the cost or 
pricing data in issue were defective even though the Contractor or 
subcontractor took no affirmative action to bring the character of the 
data to the attention of the Contracting Officer.
    (iii) The contract was based on an agreement about the total cost of 
the contract

[[Page 74]]

and there was no agreement about the cost of each item procured under 
the contract.
    (iv) The Contractor or subcontractor did not submit a Certificate of 
Current Cost or Pricing Data.
    (2)(i) Except as prohibited by subdivision (d)(2)(ii) of this 
clause, an offset in an amount determined appropriate by the Contracting 
Officer based upon the facts shall be allowed against the amount of a 
contract price reduction if--
    (A) The Contractor certifies to the Contracting Officer that, to the 
best of the Contractor's knowledge and belief, the Contractor is 
entitled to the offset in the amount requested; and
    (B) The Contractor proves that the cost or pricing data were 
available before the ``as of'' date specified on its Certificate of 
Current Cost or Pricing Data, and that the data were not submitted 
before such date.
    (ii) An offset shall not be allowed if--
    (A) The understated data were known by the Contractor to be 
understated before the ``as of'' date specified on its Certificate of 
Current Cost or Pricing Data; or
    (B) The Government proves that the facts demonstrate that the 
contract price would not have increased in the amount to be offset even 
if the available data had been submitted before the ``as of'' date 
specified on its Certificate of Current Cost or Pricing Data.
    (e) If any reduction in the contract price under this clause reduces 
the price of items for which payment was made prior to the date of the 
modification reflecting the price reduction, the Contractor shall be 
liable to and shall pay the United States at the time such overpayment 
is repaid--
    (1) Simple interest on the amount of such overpayment to be computed 
from the date(s) of overpayment to the Contractor to the date the 
Government is repaid by the Contractor at the applicable underpayment 
rate effective for each quarter prescribed by the Secretary of the 
Treasury under 26 U.S.C. 6621(a)(2); and
    (2) A penalty equal to the amount of the overpayment, if the 
Contractor or subcontractor knowingly submitted cost or pricing data 
that were incomplete, inaccurate, or noncurrent.

                             (End of clause)

[62 FR 51262, Sept. 30, 1997]



Sec. 52.215-12  Subcontractor Cost or Pricing Data.

    As prescribed in 15.408(d), insert the following clause:

              Subcontractor Cost or Pricing Data (OCT 1997)

    (a) Before awarding any subcontract expected to exceed the threshold 
for submission of cost or pricing data at FAR 15.403-4, on the date of 
agreement on price or the date of award, whichever is later; or before 
pricing any subcontract modification involving a pricing adjustment 
expected to exceed the threshold for submission of cost or pricing data 
at FAR 15.403-4, the Contractor shall require the subcontractor to 
submit cost or pricing data (actually or by specific identification in 
writing), unless an exception under FAR 15.403-1 applies.
    (b) The Contractor shall require the subcontractor to certify in 
substantially the form prescribed in FAR 15.406-2 that, to the best of 
its knowledge and belief, the data submitted under paragraph (a) of this 
clause were accurate, complete, and current as of the date of agreement 
on the negotiated price of the subcontract or subcontract modification.
    (c) In each subcontract that exceeds the threshold for submission of 
cost or pricing data at FAR 15.403-4, when entered into, the Contractor 
shall insert either--
    (1) The substance of this clause, including this paragraph (c), if 
paragraph (a) of this clause requires submission of cost or pricing data 
for the subcontract; or
    (2) The substance of the clause at FAR 52.215-13, Subcontractor Cost 
or Pricing Data--Modifications.

                             (End of clause)

[62 FR 51263, Sept. 30, 1997]



Sec. 52.215-13  Subcontractor Cost or Pricing Data--Modifications.

    As prescribed in 15.408(e), insert the following clause:

      Subcontractor Cost or Pricing Data--Modifications (OCT 1997)

    (a) The requirements of paragraphs (b) and (c) of this clause 
shall--
    (1) Become operative only for any modification to this contract 
involving a pricing adjustment expected to exceed the threshold for 
submission of cost or pricing data at FAR 15.403-4; and
    (2) Be limited to such modifications.
    (b) Before awarding any subcontract expected to exceed the threshold 
for submission of cost or pricing data at FAR 15.403-4, on the date of 
agreement on price or the date of award, whichever is later; or before 
pricing any subcontract modification involving a pricing adjustment 
expected to exceed the threshold for submission of cost or pricing data 
at FAR 15.403-4, the Contractor shall require the subcontractor to 
submit cost or pricing data (actually or by specific identification in 
writing), unless an exception under FAR 15.403-1 applies.
    (c) The Contractor shall require the subcontractor to certify in 
substantially the

[[Page 75]]

form prescribed in FAR 15.406-2 that, to the best of its knowledge and 
belief, the data submitted under paragraph (b) of this clause were 
accurate, complete, and current as of the date of agreement on the 
negotiated price of the subcontract or subcontract modification.
    (d) The Contractor shall insert the substance of this clause, 
including this paragraph (d), in each subcontract that exceeds the 
threshold for submission of cost or pricing data at FAR 15.403-4 on the 
date of agreement on price or the date of award, whichever is later.

                             (End of clause)

[62 FR 51263, Sept. 30, 1997]



Sec. 52.215-14  Integrity of Unit Prices.

    As prescribed in 15.408(f)(1), insert the following clause:

                   Integrity of Unit Prices (OCT 1997)

    (a) Any proposal submitted for the negotiation of prices for items 
of supplies shall distribute costs within contracts on a basis that 
ensures that unit prices are in proportion to the items' base cost 
(e.g., manufacturing or acquisition costs). Any method of distributing 
costs to line items that distorts unit prices shall not be used. For 
example, distributing costs equally among line items is not acceptable 
except when there is little or no variation in base cost. Nothing in 
this paragraph requires submission of cost or pricing data not otherwise 
required by law or regulation.
    (b) When requested by the Contracting Officer, the Offeror/
Contractor shall also identify those supplies that it will not 
manufacture or to which it will not contribute significant value.
    (c) The Contractor shall insert the substance of this clause, less 
paragraph (b), in all subcontracts for other than: acquisitions at or 
below the simplified acquisition threshold in FAR Part 2; construction 
or architect-engineer services under FAR Part 36; utility services under 
FAR Part 41; services where supplies are not required; commercial items; 
and petroleum products.

                             (End of clause)

    Alternate I (Oct 1997). As prescribed in 15.408(f)(2), substitute 
the following paragraph (b) for paragraph (b) of the basic clause:

    (b) The Offeror/Contractor shall also identify those supplies that 
it will not manufacture or to which it will not contribute significant 
value.

[62 FR 51263, Sept. 30, 1997]



Sec. 52.215-15  Termination of Defined Benefit Pension Plans.

    As prescribed in 15.408(g), insert the following clause:

         Termination of Defined Benefit Pension Plans (OCT 1997)

    The Contractor shall promptly notify the Contracting Officer in 
writing when it determines that it will terminate a defined benefit 
pension plan or otherwise recapture such pension fund assets. If pension 
fund assets revert to the Contractor or are constructively received by 
it under a termination or otherwise, the Contractor shall make a refund 
or give a credit to the Government for its equitable share as required 
by FAR 31.205-6(j)(4). The Contractor shall include the substance of 
this clause in all subcontracts under this contract that meet the 
applicability requirement of FAR 15.408(g).

                             (End of clause)

[62 FR 51263, Sept. 30, 1997]



Sec. 52.215-16  Facilities Capital Cost of Money.

    As prescribed in 15.408(h), insert the following provision:

               Facilities Capital Cost of Money (OCT 1997)

    (a) Facilities capital cost of money will be an allowable cost under 
the contemplated contract, if the criteria for allowability in 
subparagraph 31.205-10(a)(2) of the Federal Acquisition Regulation are 
met. One of the allowability criteria requires the prospective 
contractor to propose facilities capital cost of money in its offer.
    (b) If the prospective Contractor does not propose this cost, the 
resulting contract will include the clause Waiver of Facilities Capital 
Cost of Money.

                           (End of provision)

[52 FR 35669, Sept. 22, 1987. Redesignated and amended at 62 FR 51263, 
Sept. 30, 1997]



Sec. 52.215-17  Waiver of Facilities Capital Cost of Money.

    As prescribed in 15.408(i), insert the following clause:

          Waiver of Facilities Capital Cost of Money (OCT 1997)

    The Contractor did not include facilities capital cost of money as a 
proposed cost of this contract. Therefore, it is an unallowable cost 
under this contract.

[[Page 76]]

                             (End of clause)

[52 FR 35669, Sept. 22, 1987. Redesignated and amended at 62 FR 51263, 
Sept. 30, 1997]



Sec. 52.215-18  Reversion or Adjustment of Plans for Postretirement Benefits (PRB) Other Than Pensions.

    As prescribed in 15.408(j), insert the following clause:

Reversion or Adjustment of Plans for Postretirement Benefits (PRB) Other 
                        Than Pensions (OCT 1997)

    The Contractor shall promptly notify the Contracting Officer in 
writing when it determines that it will terminate or reduce a PRB plan. 
If PRB fund assets revert, or inure, to the Contractor or are 
constructively received by it under a plan termination or otherwise, the 
Contractor shall make a refund or give a credit to the Government for 
its equitable share as required by FAR 31.205-6(o)(6). The Contractor 
shall include the substance of this clause in all subcontracts under 
this contract that meet the applicability requirements of FAR 15.408(j).

                             (End of clause)

[62 FR 51263, Sept. 30, 1997]



Sec. 52.215-19  Notification of Ownership Changes.

    As prescribed in 15.408(k), insert the following clause:

              Notification of Ownership Changes (OCT 1997)

    (a) The Contractor shall make the following notifications in 
writing:
    (1) When the Contractor becomes aware that a change in its ownership 
has occurred, or is certain to occur, that could result in changes in 
the valuation of its capitalized assets in the accounting records, the 
Contractor shall notify the Administrative Contracting Officer (ACO) 
within 30 days.
    (2) The Contractor shall also notify the ACO within 30 days whenever 
changes to asset valuations or any other cost changes have occurred or 
are certain to occur as a result of a change in ownership.
    (b) The Contractor shall--
    (1) Maintain current, accurate, and complete inventory records of 
assets and their costs;
    (2) Provide the ACO or designated representative ready access to the 
records upon request;
    (3) Ensure that all individual and grouped assets, their capitalized 
values, accumulated depreciation or amortization, and remaining useful 
lives are identified accurately before and after each of the 
Contractor's ownership changes; and
    (4) Retain and continue to maintain depreciation and amortization 
schedules based on the asset records maintained before each Contractor 
ownership change.
    (c) The Contractor shall include the substance of this clause in all 
subcontracts under this contract that meet the applicability requirement 
of FAR 15.408(k).

                             (End of clause)

[62 FR 51264, Sept. 30, 1997]



Sec. 52.215-20  Requirements for Cost or Pricing Data or Information Other Than Cost or Pricing Data.

    As prescribed in 15.408(l), insert the following provision:

Requirements for Cost or Pricing Data or Information Other Than Cost or 
                         Pricing Data (OCT 1997)

    (a) Exceptions from cost or pricing data. (1) In lieu of submitting 
cost or pricing data, offerors may submit a written request for 
exception by submitting the information described in the following 
subparagraphs. The Contracting Officer may require additional supporting 
information, but only to the extent necessary to determine whether an 
exception should be granted, and whether the price is fair and 
reasonable.
    (i) Identification of the law or regulation establishing the price 
offered. If the price is controlled under law by periodic rulings, 
reviews, or similar actions of a governmental body, attach a copy of the 
controlling document, unless it was previously submitted to the 
contracting office.
    (ii) Commercial item exception. For a commercial item exception, the 
offeror shall submit, at a minimum, information on prices at which the 
same item or similar items have previously been sold in the commercial 
market that is adequate for evaluating the reasonableness of the price 
for this acquisition. Such information may include--
    (A) For catalog items, a copy of or identification of the catalog 
and its date, or the appropriate pages for the offered items, or a 
statement that the catalog is on file in the buying office to which the 
proposal is being submitted. Provide a copy or describe current discount 
policies and price lists (published or unpublished), e.g., wholesale, 
original equipment manufacturer, or reseller. Also explain the basis of 
each offered price and its relationship to the established catalog 
price, including how the proposed price relates to the price of recent 
sales in quantities similar to the proposed quantities;
    (B) For market-priced items, the source and date or period of the 
market quotation or other basis for market price, the base

[[Page 77]]

amount, and applicable discounts. In addition, describe the nature of 
the market;
    (C) For items included on an active Federal Supply Service Multiple 
Award Schedule contract, proof that an exception has been granted for 
the schedule item.
    (2) The offeror grants the Contracting Officer or an authorized 
representative the right to examine, at any time before award, books, 
records, documents, or other directly pertinent records to verify any 
request for an exception under this provision, and the reasonableness of 
price. For items priced using catalog or market prices, or law or 
regulation, access does not extend to cost or profit information or 
other data relevant solely to the offeror's determination of the prices 
to be offered in the catalog or marketplace.
    (b) Requirements for cost or pricing data. If the offeror is not 
granted an exception from the requirement to submit cost or pricing 
data, the following applies:
    (1) The offeror shall prepare and submit cost or pricing data and 
supporting attachments in accordance with Table 15-2 of FAR 15.408.
    (2) As soon as practicable after agreement on price, but before 
contract award (except for unpriced actions such as letter contracts), 
the offeror shall submit a Certificate of Current Cost or Pricing Data, 
as prescribed by FAR 15.406-2.

                           (End of provision)

    Alternate I (Oct 1997). As prescribed in 15.408(l), substitute the 
following paragraph (b)(1) for paragraph (b)(1) of the basic provision:

    (b)(1) The offeror shall submit cost or pricing data and supporting 
attachments in the following format:

    Alternate II (Oct 1997). As prescribed in 15.408(l), add the 
following paragraph (c) to the basic provision:

    (c) When the proposal is submitted, also submit one copy each to: 
(1) the Administrative Contracting Officer, and (2) the Contract 
Auditor.

    Alternate III (Oct 1997). As prescribed in 15.408(l), add the 
following paragraph (c) to the basic provision (if Alternate II is also 
used, redesignate the following paragraph as paragraph (d)).

    (c) Submit the cost portion of the proposal via the following 
electronic media: [Insert media format, e.g., electronic spreadsheet 
format, electronic mail, etc.]

    Alternate IV (Oct 1997). As prescribed in 15.408(l), replace the 
text of the basic provision with the following:

    (a) Submission of cost or pricing data is not required.
    (b) Provide information described below: [Insert description of the 
information and the format that are required, including access to 
records necessary to permit an adequate evaluation of the proposed price 
in accordance with 15.403-3.]

[62 FR 51264, Sept. 30, 1997]



Sec. 52.215-21  Requirements for Cost or Pricing Data or Information Other Than Cost or Pricing Data--Modifications.

    As prescribed in 15.408(m), insert the following clause:

Requirements for Cost or Pricing Data or Information Other Than Cost or 
                 Pricing Data--Modifications (OCT 1997)

    (a) Exceptions from cost or pricing data. (1) In lieu of submitting 
cost or pricing data for modifications under this contract, for price 
adjustments expected to exceed the threshold set forth at FAR 15.403-4 
on the date of the agreement on price or the date of the award, 
whichever is later, the Contractor may submit a written request for 
exception by submitting the information described in the following 
subparagraphs. The Contracting Officer may require additional supporting 
information, but only to the extent necessary to determine whether an 
exception should be granted, and whether the price is fair and 
reasonable--
    (i) Identification of the law or regulation establishing the price 
offered. If the price is controlled under law by periodic rulings, 
reviews, or similar actions of a governmental body, attach a copy of the 
controlling document, unless it was previously submitted to the 
contracting office.
    (ii) Information on modifications of contracts or subcontracts for 
commercial items. (A) If--
    (1) The original contract or subcontract was granted an exception 
from cost or pricing data requirements because the price agreed upon was 
based on adequate price competition or prices set by law or regulation, 
or was a contract or subcontract for the acquisition of a commercial 
item; and
    (2) The modification (to the contract or subcontract) is not 
exempted based on one of these exceptions, then the Contractor may 
provide information to establish that the modification would not change 
the contract or subcontract from a contract or subcontract for the 
acquisition of a commercial item to a contract or subcontract for the 
acquisition of an item other than a commercial item.
    (B) For a commercial item exception, the Contractor shall provide, 
at a minimum, information on prices at which the same item or similar 
items have previously been sold

[[Page 78]]

that is adequate for evaluating the reasonableness of the price of the 
modification. Such information may include--
    (1) For catalog items, a copy of or identification of the catalog 
and its date, or the appropriate pages for the offered items, or a 
statement that the catalog is on file in the buying office to which the 
proposal is being submitted. Provide a copy or describe current discount 
policies and price lists (published or unpublished), e.g., wholesale, 
original equipment manufacturer, or reseller. Also explain the basis of 
each offered price and its relationship to the established catalog 
price, including how the proposed price relates to the price of recent 
sales in quantities similar to the proposed quantities.
    (2) For market-priced items, the source and date or period of the 
market quotation or other basis for market price, the base amount, and 
applicable discounts. In addition, describe the nature of the market.
    (3) For items included on an active Federal Supply Service Multiple 
Award Schedule contract, proof that an exception has been granted for 
the schedule item.
    (2) The Contractor grants the Contracting Officer or an authorized 
representative the right to examine, at any time before award, books, 
records, documents, or other directly pertinent records to verify any 
request for an exception under this clause, and the reasonableness of 
price. For items priced using catalog or market prices, or law or 
regulation, access does not extend to cost or profit information or 
other data relevant solely to the Contractor's determination of the 
prices to be offered in the catalog or marketplace.
    (b) Requirements for cost or pricing data. If the Contractor is not 
granted an exception from the requirement to submit cost or pricing 
data, the following applies:
    (1) The Contractor shall submit cost or pricing data and supporting 
attachments in accordance with Table 15-2 of FAR 15.408.
    (2) As soon as practicable after agreement on price, but before 
award (except for unpriced actions), the Contractor shall submit a 
Certificate of Current Cost or Pricing Data, as prescribed by FAR 
15.406-2.

                             (End of clause)

    Alternate I (OCT 1997). As prescribed in 15.408(m), substitute the 
following paragraph (b)(1) for paragraph (b)(1) of the basic clause.

    (1) The Contractor shall submit cost or pricing data and supporting 
attachments prepared in the following format:

    Alternate II (OCT 1997). As prescribed in 15.408(m), add the 
following paragraph (c) to the basic clause:

    (c) When the proposal is submitted, also submit one copy each to: 
(1) the Administrative Contracting Officer, and (2) the Contract 
Auditor.

    Alternate III (OCT 1997). As prescribed in 15.408(m), add the 
following paragraph (c) to the basic clause (if Alternate II is also 
used, redesignate the following paragraph as paragraph (d)):

    (c) Submit the cost portion of the proposal via the following 
electronic media: [Insert media format]

    Alternate IV (OCT 1997). As prescribed in 15.408(m), replace the 
text of the basic clause with the following:

    (a) Submission of cost or pricing data is not required.
    (b) Provide information described below: [Insert description of the 
information and the format that are required, including access to 
records necessary to permit an adequate evaluation of the proposed price 
in accordance with 15.403-3.]

[62 FR 51264, Sept. 30, 1997]



Sec. 52.215-22--52.215-42  [Reserved]



Sec. 52.216-1  Type of Contract.

    As prescribed in 16.105, complete and insert the following 
provision:

                       Type of Contract (APR 1984)

    The Government contemplates award of a ______ [Contracting Officer 
insert specific type of contract] contract resulting from this 
solicitation.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 60 FR 34761, July 3, 1995]



Sec. 52.216-2  Economic Price Adjustment--Standard Supplies.

    As prescribed in 16.203-4(a), insert the following clause. The 
clause may be modified by increasing the 10 percent limit on aggregate 
increases specified in subparagraph (c)(1), upon approval by the chief 
of the contracting office.

         Economic Price Adjustment--Standard Supplies (JAN 1997)

    (a) The Contractor warrants that the unit price stated in the 
Schedule for ____ [offeror insert Schedule line item number] is not in 
excess of the Contractor's applicable established price in effect on the 
contract date for like quantites of the same item. The term unit price 
excludes any part of the price directly resulting from requirements for 
preservation, packaging, or packing beyond

[[Page 79]]

standard commercial practice. The term established price means a price 
that (1) is an established catalog or market price for a commercial item 
sold in substantial quantities to the general public, and (2) is the net 
price after applying any standard trade discounts offered by the 
Contractor.
    (b) The Contractor shall promptly notify the Contracting Officer of 
the amount and effective date of each decrease in any applicable 
established price. Each corresponding contract unit price shall be 
decreased by the same percentage that the established price is 
decreased. The decrease shall apply to those items delivered on and 
after the effective date of the decrease in the Contractor's established 
price, and this contract shall be modified accordingly.
    (c) If the Contractor's applicable established price is increased 
after the contract date, the corresponding contract unit price shall be 
increased, upon the Contractor's written request to the Contracting 
Officer, by the same percentage that the established price is increased, 
and the contract shall be modified accordingly, subject to the following 
limitations:
    (1) The aggregate of the increases in any contract unit price under 
this clause shall not exceed 10 percent of the original contract unit 
price.
    (2) The increased contract unit price shall be effective (i) on the 
effective date of the increase in the applicable established price if 
the Contracting Officer receives the Contractor's written request within 
10 days thereafter or (ii) if the written request is received later, on 
the date the Contracting Officer receives the request.
    (3) The increased contract unit price shall not apply to quantities 
scheduled under the contract for delivery before the effective date of 
the increased contract unit price, unless failure to deliver before that 
date results from causes beyond the control and without the fault or 
negligence of the Contractor, within the meaning of the Default clause.
    (4) No modification increasing a contract unit price shall be 
executed under this paragraph (c) until the Contracting Officer verifies 
the increase in the applicable established price.
    (5) Within 30 days after receipt of the Contractor's written 
request, the Contracting Officer may cancel, without liability to either 
party, any undelivered portion of the contract items affected by the 
requested increase.
    (d) During the time allowed for the cancellation provided for in 
subparagraph (c)(5) above, and thereafter if there is no cancellation, 
the Contractor shall continue deliveries according to the contract 
delivery schedule, and the Government shall pay for such deliveries at 
the contract unit price, increased to the extent provided by paragraph 
(c) above.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 60 FR 48221, Sept. 18, 1995; 
62 FR 238, 260, Jan. 2, 1997]



Sec. 52.216-3  Economic Price Adjustment--Semistandard Supplies.

    As prescribed in 16.203-4(b), insert the following clause. The 
clause may be modified by increasing the 10 percent limit on aggregate 
increases specified in subparagraph (c)(1), upon approval by the chief 
of the contracting office.

       Economic Price Adjustment--Semistandard Supplies (JAN 1997)

    (a) The Contractor warrants that the supplies identified as line 
items ____ [offeror insert Schedule line item number] in the Schedule 
are, except for modifications required by the contract specifications, 
supplies for which it has an established price. The term established 
price means a price that (1) is an established catalog or market price 
for a commercial item sold in substantial quantities to the general 
public, and (2) is the net price after applying any standard trade 
discounts offered by the Contractor. The Contractor further warrants 
that, as of the date of this contract, any difference between the unit 
prices stated in the contract for these line items and the Contractor's 
established prices for like quantities of the nearest commercial 
equivalents are due to compliance with contract specifications and with 
any contract requirements for preservation, packaging, and packing 
beyond standard commercial practice.
    (b) The Contractor shall promptly notify the Contracting Officer of 
the amount and effective date of each decrease in any applicable 
established price. Each corresponding contract unit price (exclusive of 
any part of the unit price that reflects modifications resulting from 
compliance with specifications or with requirements for preservation, 
packaging, and packing beyond standard commercial practice) shall be 
decreased by the same percentage that the established price is 
decreased. The decrease shall apply to those items delivered on and 
after the effective date of the decrease in the Contractor's established 
price, and this contract shall be modified accordingly.
    (c) If the Contractor's applicable established price is increased 
after the contract date, the corresponding contract unit price 
(exclusive of any part of the unit price resulting from compliance with 
specifications or with requirements for preservation, packaging, and 
packing beyond standard commercial practice) shall be increased, upon 
the Contractor's written request to the Contracting Officer, by the same 
percentage that

[[Page 80]]

the established price is increased, and the contract shall be modified 
accordingly, subject to the following limitations:
    (1) The aggregate of the increases in any contract unit price under 
this clause shall not exceed 10 percent of the original contract unit 
price.
    (2) The increased contract unit price shall be effective (i) on the 
effective date of the increase in the applicable established price if 
the Contracting Officer receives the Contractor's written request within 
10 days thereafter or (ii) if the written request is received later, on 
the date the Contracting Officer receives the request.
    (3) The increased contract unit price shall not apply to quantities 
scheduled under the contract for delivery before the effective date of 
the increased contract unit price, unless failure to deliver before that 
date results from causes beyond the control and without the fault or 
negligence of the Contractor, within the meaning of the Default clause.
    (4) No modification increasing a contract unit price shall be 
executed under this paragraph (c) until the Contracting Officer verifies 
the increase in the applicable established price.
    (5) Within 30 days after receipt of the Contractor's written 
request, the Contracting Officer may cancel, without liability to either 
party, any undelivered portion of the contract items affected by the 
requested increase.
    (d) During the time allowed for the cancellation provided for in 
subparagraph (c)(5) above, and thereafter if there is no cancellation, 
the Contractor shall continue deliveries according to the contract 
delivery schedule, and the Government shall pay for such deliveries at 
the contract unit price, increased to the extent provided by paragraph 
(c) above.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 60 FR 48221, Sept. 18, 1995; 
62 FR 238, 261, Jan. 2, 1997; 62 FR 10710, Mar. 10, 1997]



Sec. 52.216-4  Economic Price Adjustment--Labor and Material.

    As prescribed in 16.203-4(c), when contracting by negotiation, 
insert a clause that is substantially the same as the following clause 
in solicitations and contracts when the conditions specified in 16.203-
4(c)(1)(i) through (iv) apply (but see 16.203-4(c)(2)). The clause may 
be modified by increasing the 10-percent limit on aggregate increases 
specified in subparagraph (c)(4), upon approval by the chief of the 
contracting office.

        Economic Price Adjustment--Labor and Material (JAN 1997)

    (a) The Contractor shall notify the Contracting Officer if, at any 
time during contract performance, the rates of pay for labor (including 
fringe benefits) or the unit prices for material shown in the Schedule 
either increase or decrease. The Contractor shall furnish this notice 
within 60 days after the increase or decrease, or within any additional 
period that the Contracting Officer may approve in writing, but not 
later than the date of final payment under this contract. The notice 
shall include the Contractor's proposal for an adjustment in the 
contract unit prices to be negotiated under paragraph (b) below, and 
shall include, in the form required by the Contracting Officer, 
supporting data explaining the cause, effective date, and amount of the 
increase or decrease and the amount of the Contractor's adjustment 
proposal.
    (b) Promptly after the Contracting Officer receives the notice and 
data under paragraph (a) above, the Contracting Officer and the 
Contractor shall negotiate a price adjustment in the contract unit 
prices and its effective date. However, the Contracting Officer may 
postpone the negotiations until an accumulation of increases and 
decreases in the labor rates (including fringe benefits) and unit prices 
of material shown in the Schedule results in an adjustment allowable 
under subparagraph (c)(3) below. The Contracting Officer shall modify 
this contract (1) to include the price adjustment and its effective date 
and (2) to revise the labor rates (including fringe benefits) or unit 
prices of material as shown in the Schedule to reflect the increases or 
decreases resulting from the adjustment. The Contractor shall continue 
performance pending agreement on, or determination of, any adjustment 
and its effective date.
    (c) Any price adjustment under this clause is subject to the 
following limitations:
    (1) Any adjustment shall be limited to the effect on unit prices of 
the increases or decreases in the rates of pay for labor (including 
fringe benefits) or unit prices for material shown in the Schedule. 
There shall be no adjustment for (i) supplies or services for which the 
production cost is not affected by such changes, (ii) changes in rates 
or unit prices other than those shown in the Schedule, or (iii) changes 
in the quantities of labor or material used from those shown in the 
Schedule for each item.
    (2) No upward adjustment shall apply to supplies or services that 
are required to be delivered or performed before the effective date of 
the adjustment, unless the Contractor's failure to deliver or perform 
according to the delivery schedule results from causes beyond the 
Contractor's control and without

[[Page 81]]

its fault or negligence, within the meaning of the Default clause.
    (3) There shall be no adjustment for any change in rates of pay for 
labor (including fringe benefits) or unit prices for material which 
would not result in a net change of at least 3 percent of the then-
current total contract price. This limitation shall not apply, however, 
if, after final delivery of all contract line items, either party 
requests an adjustment under paragraph (b) above.
    (4) The aggregate of the increases in any contract unit price made 
under this clause shall not exceed 10 percent of the original unit 
price. There is no percentage limitation on the amount of decreases that 
may be made under this clause.
    (d) The Contracting Officer may examine the Contractor's books, 
records, and other supporting data relevant to the cost of labor 
(including fringe benefits) and material during all reasonable times 
until the end of 3 years after the date of final payment under this 
contract or the time periods specified in subpart 4.7 of the Federal 
Acquisition Regulation (FAR), whichever is earlier.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 62 FR 238, Jan. 2, 1997]



Sec. 52.216-5  Price Redetermination--Prospective.

    As prescribed in 16.205-4, insert the following clause:

              Price Redetermination--Prospective (OCT 1997)

    (a) General. The unit prices and the total price stated in this 
contract shall be periodically redetermined in accordance with this 
clause, except that (1) the prices for supplies delivered and services 
performed before the first effective date of price redetermination (see 
paragraph (c) below) shall remain fixed and (2) in no event shall the 
total amount paid under this contract exceed any ceiling price included 
in the contract.
    (b) Definition. Costs, as used in this clause, means allowable costs 
in accordance with part 31 of the Federal Acquisition Regulation (FAR) 
in effect on the date of this contract.
    (c) Price redetermination periods. For the purpose of price 
redetermination, performance of this contract is divided into successive 
periods. The first period shall extend from the date of the contract to 
____, [see Note (1)] and the second and each succeeding period shall 
extend for ____ [insert appropriate number] months from the end of the 
last preceding period, except that the parties may agree to vary the 
length of the final period. The first day of the second and each 
succeeding period shall be the effective date of price redetermination 
for that period.
    (d) Data submission. (1) Not more than __ nor less than __ [see Note 
(2)] days before the end of each redetermination period, except the 
last, the Contractor shall submit--
    (i) Proposed prices for supplies that may be delivered or services 
that may be performed in the next succeeding period, and--
    (A) An estimate and breakdown of the costs of these supplies or 
services in the format of Table 15-2, FAR 15.408, or in any other form 
on which the parties may agree;
    (B) Sufficient data to support the accuracy and reliability of this 
estimate; and
    (C) An explanation of the differences between this estimate and the 
original (or last preceding) estimate for the same supplies or services; 
and
    (ii) A statement of all costs incurred in performing this contract 
through the end of the ______ month (see Note (3)) before the submission 
of proposed prices in the format of Table 15-2, FAR 15.408 (or in any 
other form on which the parties may agree), with sufficient supporting 
data to disclose unit costs and cost trends for--
    (A) Supplies delivered and services performed; and
    (B) Inventories of work in process and undelivered contract supplies 
on hand (estimated to the extent necessary).
    (2) The Contractor shall also submit, to the extent that it becomes 
available before negotiations on redetermined prices are concluded--
    (i) Supplemental statements of costs incurred after the date stated 
in subdivision (d)(1)(ii) above for--
    (A) Supplies delivered and services performed; and
    (B) Inventories of work in process and undelivered contract supplies 
on hand (estimated to the extent necessary); and
    (ii) Any other relevant data that the Contracting Officer may 
reasonably require.
    (3) If the Contractor fails to submit the data required by 
subparagraphs (1) and (2) above, within the time specified, the 
Contracting Officer may suspend payments under this contract until the 
data are furnished. If it is later determined that the Government has 
overpaid the Contractor, the Contractor shall repay the excess to the 
Government immediately. Unless repaid within 30 days after the end of 
the data submittal period, the amount of the excess shall bear interest, 
computed from the date the data were due to the date of repayment, at 
the rate established in accordance with the Interest clause.
    (e) Price redetermination. Upon the Contracting Officer's receipt of 
the data required by paragraph (d) above, the Contracting Officer and 
the Contractor shall promptly negotiate to redetermine fair and 
reasonable prices for supplies that may be delivered or services that 
may be performed in the period

[[Page 82]]

following the effective date of price redetermination.
    (f) Contract modifications. Each negotiated redetermination of 
prices shall be evidenced by a modification to this contract, signed by 
the Contractor and the Contracting Officer, stating the redetermined 
prices that apply during the redetermination period.
    (g) Adjusting billing prices. Pending execution of the contract 
modification (see paragraph (f) above), the Contractor shall submit 
invoices or vouchers in accordance with the billing prices stated in 
this contract. If at any time it appears that the then-current billing 
prices will be substantially greater than the estimated final prices, or 
if the Contractor submits data showing that the redetermined price will 
be substantially greater than the current billing prices, the parties 
shall negotiate an appropriate decrease or increase in billing prices. 
Any billing price adjustment shall be reflected in a contract 
modification and shall not affect the redetermination of prices under 
this clause. After the contract modification for price redetermination 
is executed, the total amount paid or to be paid on all invoices or 
vouchers shall be adjusted to reflect the agreed-upon prices, and any 
requested additional payments, refunds, or credits shall be made 
promptly.
    (h) Quarterly limitation on payments statement. This paragraph (h) 
applies only during periods for which firm prices have not been 
established.
    (1) Within 45 days after the end of the quarter of the Contractor's 
fiscal year in which a delivery is first made (or services are first 
performed) and accepted by the Government under this contract, and for 
each quarter thereafter, the Contractor shall submit to the contract 
administration office (with a copy to the contracting office and the 
cognizant contract auditor) a statement, cumulative from the beginning 
of the contract, showing--
    (i) The total contract price of all supplies delivered (or services 
performed) and accepted by the Government and for which final prices 
have been established;
    (ii) The total costs (estimated to the extent necessary) reasonably 
incurred for, and properly allocable solely to, the supplies delivered 
(or services performed) and accepted by the Government and for which 
final prices have not been established;
    (iii) The portion of the total interim profit (used in establishing 
the initial contract price or agreed to for the purpose of this 
paragraph (h)) that is in direct proportion to the supplies delivered 
(or services performed) and accepted by the Government and for which 
final prices have not been established; and
    (iv) The total amount of all invoices or vouchers for supplies 
delivered (or services performed) and accepted by the Government 
(including amounts applied or to be applied to liquidate progress 
payments).
    (2) The statement required by subparagraph (1) above need not be 
submitted for any quarter for which either no costs are to be reported 
under subdivision (1)(ii) above, or revised billing prices have been 
established in accordance with paragraph (g) above, and do not exceed 
the existing contract price, the Contractor's price-redetermination 
proposal, or a price based on the most recent quarterly statement, 
whichever is least.
    (3) Notwithstanding any provision of this contract authorizing 
greater payments, if on any quarterly statement the amount under 
subdivision (1)(iv) above exceeds the sum due the Contractor, as 
computed in accordance with subdivisions (1)(i), (ii), and (iii) above, 
the Contractor shall immediately refund or credit to the Government the 
amount of this excess. The Contractor may, when appropriate, reduce this 
refund or credit by the amount of any applicable tax credits due the 
Contractor under 26 U.S.C. 1481 and by the amount of previous refunds or 
credits effected under this clause. If any portion of the excess has 
been applied to the liquidation of progress payments, then that portion 
may, instead of being refunded, be added to the unliquidated progress 
payment account, consistent with the Progress Payments clause. The 
Contractor shall provide complete details to support any claimed 
reductions in refunds.
    (4) If the Contractor fails to submit the quarterly statement within 
45 days after the end of each quarter and it is later determined that 
the Government has overpaid the Contractor, the Contractor shall repay 
the excess to the Government immediately. Unless repaid within 30 days 
after the end of the statement submittal period, the amount of the 
excess shall bear interest, computed from the date the quarterly 
statement was due to the date of repayment, at the rate established in 
accordance with the Interest clause.
    (i) Subcontracts. No subcontract placed under this contract may 
provide for payment on a cost-plus-a-percentage-of-cost basis.
    (j) Disagreements. If the Contractor and the Contracting Officer 
fail to agree upon redetermined prices for any price redetermination 
period within 60 days (or within such other period as the parties agree) 
after the date on which the data required by paragraph (d) above are to 
be submitted, the Contracting Officer shall promptly issue a decision in 
accordance with the Disputes clause. For the purpose of paragraphs (f), 
(g), and (h) above, and pending final settlement of the disagreement on 
appeal, by failure to appeal, or by agreement, this decision shall be 
treated as an executed contract modification.

[[Page 83]]

Pending final settlement, price redetermination for subsequent periods, 
if any, shall continue to be negotiated as provided in this clause.
    (k) Termination. If this contract is terminated, prices shall 
continue to be established in accordance with this clause for (1) 
completed supplies and services accepted by the Government and (2) those 
supplies and services not terminated under a partial termination. All 
other elements of the termination shall be resolved in accordance with 
other applicable clauses of this contract.

                             (End of clause)

    Notes: (1) Express in terms of units delivered, or as a date; but in 
either case the period should end on the last day of a month.
    (2) Insert the numbers of days chosen so that the Contractor's 
submission will be late enough to reflect recent cost experience (taking 
into account the Contractor's accounting system), but early enough to 
permit review, audit (if necessary), and negotiation before the start of 
the prospective period.
    (3) Insert first, except that second may be inserted if necessary to 
achieve compatibility with the Contractor's accounting system.

[48 FR 42478, Sept. 19, 1983, as amended at 60 FR 48221, Sept. 18, 1995; 
61 FR 67425, Dec. 20, 1996; 62 FR 51265, Sept. 30, 1997]



Sec. 52.216-6  Price Redetermination--Retroactive.

    As prescribed in 16.206-4, insert the following clause:

              Price Redetermination--Retroactive (OCT 1997)

    (a) General. The unit price and the total price stated in this 
contract shall be redetermined in accordance with this clause, but in no 
event shall the total amount paid under this contract exceed ____ 
[insert dollar amount of ceiling price].
    (b) Definition. Costs, as used in this clause, means allowable costs 
in accordance with part 31 of the Federal Acquisition Regulation (FAR) 
in effect on the date of this contract.
    (c) Data submission. (1) Within __ [Contracting Officer insert 
number of days] days after delivery of all supplies to be delivered and 
completion of all services to be performed under this contract, the 
Contractor shall submit--
    (i) Proposed prices;
    (ii) A statement in the format of table 15-2, FAR 15.408, or in any 
other form on which the parties may agree, of all costs incurred in 
performing the contract; and
    (iii) Any other relevant data that the Contracting Officer may 
reasonably require.
    (2) If the Contractor fails to submit the data required by 
subparagraph (1) above within the time specified, the Contracting 
Officer may suspend payments under this contract until the data are 
furnished. If it is later determined that the Government has overpaid 
the Contractor, the excess shall be repaid to the Government 
immediately. Unless repaid within 30 days after the end of the data 
submittal period, the amount of the excess shall bear interest, computed 
from the date the data were due to the date of repayment, at the rate 
established in accordance with the Interest clause.
    (d) Price determination. Upon the Contracting Officer's receipt of 
the data required by paragraph (c) above, the Contracting Officer and 
the Contractor shall promptly negotiate to redetermine fair and 
reasonable prices for supplies delivered and services performed by the 
Contractor under this contract.
    (e) Contract modification. The negotiated redetermination of price 
shall be evidenced by a modification to this contract, signed by the 
Contractor and the Contracting Officer.
    (f) Adjusting billing prices. Pending execution of the contract 
modification (see paragraph (e) above), the Contractor shall submit 
invoices or vouchers in accordance with billing prices stated in this 
contract. If at any time it appears that the then-current billing prices 
will be substantially greater than the estimated final prices, or if the 
Contractor submits data showing that the redetermined prices will be 
substantially greater than the current billing prices, the parties shall 
negotiate an appropriate decrease or increase in billing prices. Any 
billing price adjustment shall be reflected in a contract modification 
and shall not affect the redetermination of prices under this clause. 
After the contract modification for price redetermination is executed, 
the total amount paid or to be paid on all invoices or vouchers shall be 
adjusted to reflect the agreed-upon prices, and any resulting additional 
payments, refunds, or credits shall be made promptly.
    (g) Quarterly limitation on payments statement. This paragraph (g) 
shall apply until final price redetermination under this contract has 
been completed.
    (1) Within 45 days after the end of the quarter of the Contractor's 
fiscal year in which a delivery is first made (or services are first 
performed) and accepted by the Government under this contract, and for 
each quarter thereafter, the Contractor shall submit to the contract 
administration office (with a copy to the contracting office and the 
cognizant contract auditor), a statement, cumulative from the beginning 
of the contract, showing--
    (i) The total contract price of all supplies delivered (or services 
performed) and accepted by the Government and for which final prices 
have been established;
    (ii) The total costs (estimated to the extent necessary) reasonably 
incurred for, and

[[Page 84]]

properly allocable solely to, the supplies delivered (or services 
performed) and accepted by the Government and for which final prices 
have not been established;
    (iii) The portion of the total interim profit (used in establishing 
the initial contract price or agreed to for the purpose of this 
paragraph (g)) that is in direct proportion to the supplies delivered 
(or services performed) and accepted by the Government and for which 
final prices have not been established; and
    (iv) The total amount of all invoices or vouchers for supplies 
delivered (or services performed) and accepted by the Government 
(including amounts applied or to be applied to liquidate progress 
payments).
    (2) Notwithstanding any provision of this contract authorizing 
greater payments, if on any quarterly statement the amount under 
subdivision (1)(iv) above exceeds the sum due the Contractor, as 
computed in accordance with subdivisions (i), (ii), and (iii) above, the 
Contractor shall immediately refund or credit to the Government the 
amount of this excess. The Contractor may, when appropriate, reduce this 
refund or credit by the amount of any applicable tax credits due the 
contractor under 26 U.S.C. 1481 and by the amount of previous refunds or 
credits effected under this clause. If any portion of the excess has 
been applied to the liquidation of progress payments, then that portion 
may, instead of being refunded, be added to the unliquidated progress 
payment account, consistent with the Progress Payments clause. The 
Contractor shall provide complete details to support any claimed 
reduction in refunds.
    (3) If the Contractor fails to submit the quarterly statement within 
45 days after the end of each quarter and it is later determined that 
the Government has overpaid the Contractor, the Contractor shall repay 
the excess to the Government immediately. Unless repaid within 30 days 
after the end of the statement submittal period, the amount of the 
excess shall bear interest, computed from the date the quarterly 
statement was due to the date of repayment, at the rate established in 
accordance with the Interest clause.
    (h) Subcontracts. No subcontract placed under this contract may 
provide for payment on a cost-plus-a-percentage-of-cost basis.
    (i) Disagreements. If the Contractor and the Contracting Officer 
fail to agree upon redetermined prices within 60 days (or within such 
other period as the parties agree) after the date on which the data 
required by paragraph (c) above are to be submitted, the Contracting 
Officer shall promptly issue a decision in accordance with the Disputes 
clause. For the purpose of paragraphs (e), (f), and (g) above, and 
pending final settlement of the disagreement on appeal, by failure to 
appeal, or by agreement, this decision shall be treated as an executed 
contract modification.
    (j) Termination. If this contract is terminated before price 
redetermination, prices shall be established in accordance with this 
clause for completed supplies and services not terminated. All other 
elements of the termination shall be resolved in accordance with other 
applicable clauses of this contract.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 60 FR 48221, Sept. 18, 1995; 
61 FR 67426, Dec. 20, 1996; 62 FR 51265, Sept. 30, 1997]



Sec. 52.216-7  Allowable Cost and Payment.

    As prescribed in 16.307(a), insert the following clause:

                  Allowable Cost and Payment (APR 1998)

    (a) Invoicing. The Government shall make payments to the Contractor 
when requested as work progresses, but (except for small business 
concerns) not more often than once every 2 weeks, in amounts determined 
to be allowable by the Contracting Officer in accordance with subpart 
31.2 of the Federal Acquisition Regulation (FAR) in effect on the date 
of this contract and the terms of this contract. The Contractor may 
submit to an authorized representative of the Contracting Officer, in 
such form and reasonable detail as the representative may require, an 
invoice or voucher supported by a statement of the claimed allowable 
cost for performing this contract.
    (b) Reimbursing costs. (1) For the purpose of reimbursing allowable 
costs (except as provided in subparagraph (2) below, with respect to 
pension, deferred profit sharing, and employee stock ownership plan 
contributions), the term costs includes only--
    (i) Those recorded costs that, at the time of the request for 
reimbursement, the Contractor has paid by cash, check, or other form of 
actual payment for items or services purchased directly for the 
contract;
    (ii) When the Contractor is not delinquent in paying costs of 
contract performance in the ordinary course of business, costs incurred, 
but not necessarily paid, for--
    (A) Materials issued from the Contractor's inventory and placed in 
the production process for use on the contract;
    (B) Direct labor;
    (C) Direct travel;
    (D) Other direct in-house costs; and
    (E) Properly allocable and allowable indirect costs, as shown in the 
records maintained by the Contractor for purposes of obtaining 
reimbursement under Government contracts; and
    (iii) The amount of progress and other payments that have been paid 
by cash, check, or other form of payment to the Contractor's 
subcontractors under similar cost standards.

[[Page 85]]

    (2) Contractor contributions to any pension or other postretirement 
benefit, profit-sharing or employee stock ownership plan funds that are 
paid quarterly or more often may be included in indirect costs for 
payment purposes: Provided, That the Contractor pays the contribution to 
the fund within 30 days after the close of the period covered. Payments 
made 30 days or more after the close of a period shall not be included 
until the Contractor actually makes the payment. Accrued costs for such 
contributions that are paid less often than quarterly shall be excluded 
from indirect costs for payment purposes until the Contractor actually 
makes the payment.
    (3) Notwithstanding the audit and adjustment of invoices or vouchers 
under paragraph (g) below, allowable indirect costs under this contract 
shall be obtained by applying indirect cost rates established in 
accordance with paragraph (d) below.
    (4) Any statements in specifications or other documents incorporated 
in this contract by reference designating performance of services or 
furnishing of materials at the Contractor's expense or at no cost to the 
Government shall be disregarded for purposes of cost-reimbursement under 
this clause.
    (c) Small business concerns. A small business concern may be paid 
more often than every 2 weeks and may invoice and be paid for recorded 
costs for items or services purchased directly for the contract, even 
though the concern has not yet paid for those items or services.
    (d) Final indirect cost rates. (1) Final annual indirect cost rates 
and the appropriate bases shall be established in accordance with 
subpart 42.7 of the Federal Acquisition Regulation (FAR) in effect for 
the period covered by the indirect cost rate proposal.
    (2)(i) The Contractor shall submit an adequate final indirect cost 
rate proposal to the Contracting Officer (or cognizant Federal agency 
official) and auditor within the 6-month period following the expiration 
of each of its fiscal years. Reasonable extensions, for exceptional 
circumstances only, may be requested in writing by the Contractor and 
granted in writing by the Contracting Officer. The Contractor shall 
support its proposal with adequate supporting data.
    (ii) The proposed rates shall be based on the Contractor's actual 
cost experience for that period. The appropriate Government 
representative and the Contractor shall establish the final indirect 
cost rates as promptly as practical after receipt of the Contractor's 
proposal.
    (3) The Contractor and the appropriate Government representative 
shall execute a written understanding setting forth the final indirect 
cost rates. The understanding shall specify (i) the agreed-upon final 
annual indirect cost rates, (ii) the bases to which the rates apply, 
(iii) the periods for which the rates apply, (iv) any specific indirect 
cost items treated as direct costs in the settlement, and (v) the 
affected contract and/or subcontract, identifying any with advance 
agreements or special terms and the applicable rates. The understanding 
shall not change any monetary ceiling, contract obligation, or specific 
cost allowance or disallowance provided for in this contract. The 
understanding is incorporated into this contract upon execution.
    (4) Within 120 days after settlement of the final indirect cost 
rates covering the year in which this contract is physically complete 
(or longer, if approved in writing by the Contracting Officer), the 
Contractor shall submit a completion invoice or voucher to reflect the 
settled amounts and rates.
    (5) Failure by the parties to agree on a final annual indirect cost 
rate shall be a dispute within the meaning of the Disputes clause.
    (e) Billing rates. Until final annual indirect cost rates are 
established for any period, the Government shall reimburse the 
Contractor at billing rates established by the Contracting Officer or by 
an authorized representative (the cognizant auditor), subject to 
adjustment when the final rates are established. These billing rates--
    (1) Shall be the anticipated final rates; and
    (2) May be prospectively or retroactively revised by mutual 
agreement, at either party's request, to prevent substantial overpayment 
or underpayment.
    (f) Quick-closeout procedures. Quick-closeout procedures are 
applicable when the conditions in FAR 42.708(a) are satisfied.
    (g) Audit. At any time or times before final payment, the 
Contracting Officer may have the Contractor's invoices or vouchers and 
statements of cost audited. Any payment may be (1) reduced by amounts 
found by the Contracting Officer not to constitute allowable costs or 
(2) adjusted for prior overpayments or underpayments.
    (h) Final payment. (1) Upon approval of a completion invoice or 
voucher submitted by the Contractor in accordance with paragraph (d)(4) 
of this clause, and upon the Contractor's compliance with all terms of 
this contract, the Government shall promptly pay any balance of 
allowable costs and that part of the fee (if any) not previously paid.
    (2) The Contractor shall pay to the Government any refunds, rebates, 
credits, or other amounts (including interest, if any) accruing to or 
received by the Contractor or any assignee under this contract, to the 
extent that those amounts are properly allocable to costs for which the 
Contractor has been reimbursed by the Government. Reasonable expenses 
incurred by the Contractor for securing refunds, rebates, credits, or 
other amounts shall be allowable costs if approved

[[Page 86]]

by the Contracting Officer. Before final payment under this contract, 
the Contractor and each assignee whose assignment is in effect at the 
time of final payment shall execute and deliver--
    (i) An assignment to the Government, in form and substance 
satisfactory to the Contracting Officer, of refunds, rebates, credits, 
or other amounts (including interest, if any) properly allocable to 
costs for which the Contractor has been reimbursed by the Government 
under this contract; and
    (ii) A release discharging the Government, its officers, agents, and 
employees from all liabilities, obligations, and claims arising out of 
or under this contract, except--
    (A) Specified claims stated in exact amounts, or in estimated 
amounts when the exact amounts are not known;
    (B) Claims (including reasonable incidental expenses) based upon 
liabilities of the Contractor to third parties arising out of the 
performance of this contract; provided, that the claims are not known to 
the Contractor on the date of the execution of the release, and that the 
Contractor gives notice of the claims in writing to the Contracting 
Officer within 6 years following the release date or notice of final 
payment date, whichever is earlier; and
    (C) Claims for reimbursement of costs, including reasonable 
incidental expenses, incurred by the Contractor under the patent clauses 
of this contract, excluding, however, any expenses arising from the 
Contractor's indemnification of the Government against patent liability.

                             (End of clause)

    Alternate I (FEB 1997). As prescribed in 16.307(a)(2), substitute 
the following paragraph (b)(1)(iii) for paragraph (b)(1)(iii) of the 
basic clause:

    (iii) The amount of progress and other payments to the Contractor's 
subcontractors that either have been paid, or that the Contractor is 
required to pay pursuant to the clause of this contract entitled 
``Prompt Payment for Construction Contracts.'' Payments shall be made by 
cash, check, or other form of payment to the Contractor's subcontractors 
under similar cost standards.

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 23607, June 4, 1985; 
56 FR 29138, June 25, 1991; 61 FR 31661, June 20, 1996; 61 FR 67419, 
Dec. 20, 1996; 61 FR 69296, Dec. 31, 1996; 62 FR 12721, Mar. 17, 1997; 
62 FR 64916, Dec. 9, 1997; 63 FR 9065, Feb. 23, 1998]



Sec. 52.216-8  Fixed Fee.

    As prescribed in 16.307(b), insert the following clause in 
solicitations and contracts when a cost-plus-fixed-fee contract (other 
than a facilities contract or a construction contract) is contemplated.

                          Fixed Fee (MAR 1997)

    (a) The Government shall pay the Contractor for performing this 
contract the fixed fee specified in the Schedule.
    (b) Payment of the fixed fee shall be made as specified in the 
Schedule; provided that after payment of 85 percent of the fixed fee, 
the Contracting Officer may withhold further payment of fee until a 
reserve is set aside in an amount that the Contracting Officer considers 
necessary to protect the Government's interest. This reserve shall not 
exceed 15 percent of the total fixed fee or $100,000, whichever is less. 
The Contracting Officer shall release 75 percent of all fee withholds 
under this contract after receipt of the certified final indirect cost 
rate proposal covering the year of physical completion of this contract, 
provided the Contractor has satisfied all other contract terms and 
conditions, including the submission of the final patent and royalty 
reports, and is not delinquent in submitting final vouchers on prior 
years' settlements. The Contracting Officer may release up to 90 percent 
of the fee withholds under this contract based on the Contractor's past 
performance related to the submission and settlement of final indirect 
cost rate proposals.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 61 FR 69296, Dec. 31, 1996; 
62 FR 12721, Mar. 17, 1997]



Sec. 52.216-9  Fixed Fee--Construction.

    As prescribed in 16.307(c), insert the following clause in 
solicitations and contracts when a cost-plus-fixed-fee construction 
contract is contemplated:

                   Fixed Fee--Construction (MAR 1997)

    (a) The Government shall pay to the Contractor for performing this 
contract the fixed fee specified in the Schedule.
    (b) Payment of the fixed fee shall be made in installments based 
upon the percentage of completion of the work as determined from 
estimates submitted to and approved by the Contracting Officer, but 
subject to the withholding provisions of paragraph (c) below.
    (c) After the payment of 85 percent of the fixed fee, the 
Contracting Officer may withhold further payment of fee until a reserve 
is set aside in an amount that the Contracting Officer considers 
necessary to protect the Government's interest. This reserve shall not 
exceed 15 percent of the total fixed fee or $100,000, whichever is less. 
The Contracting Officer shall release 75 percent of all fee withholds 
under this contract after receipt

[[Page 87]]

of the certified final indirect cost rate proposal covering the year of 
physical completion of this contract, provided the Contractor has 
satisifed all other contract terms and conditions, including the 
submission of the final patent and royalty reports, and is not 
delinquent in submitting final vouchers on prior years' settlements. The 
Contracting Officer may release up to 90 percent of the fee withholds 
under this contract based on the Contractor's past performance related 
to the submission and settlement of final indirect cost rate proposals.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 61 FR 69296, Dec. 31, 1996; 
62 FR 12721, Mar. 17, 1997]



Sec. 52.216-10  Incentive Fee.

    As prescribed in 16.307(d), insert the following clause in 
solicitations and contracts when a cost-plus-incentive-fee contract 
(other than a facilities contract) is contemplated:

                        Incentive Fee (MAR 1997)

    (a) General. The Government shall pay the Contractor for performing 
this contract a fee determined as provided in this contract.
    (b) Target cost and target fee. The target cost and target fee 
specified in the Schedule are subject to adjustment if the contract is 
modified in accordance with paragraph (d) below.
    (1) Target cost, as used in this contract, means the estimated cost 
of this contract as initially negotiated, adjusted in accordance with 
paragraph (d) below.
    (2) Target fee, as used in this contract, means the fee initially 
negotiated on the assumption that this contract would be performed for a 
cost equal to the estimated cost initially negotiated, adjusted in 
accordance with paragraph (d) below.
    (c) Withholding of payment. Normally, the Government shall pay the 
fee to the Contractor as specified in the Schedule. However, when the 
Contracting Officer considers that performance or cost indicates that 
the Contractor will not achieve target, the Government shall pay on the 
basis of an appropriate lesser fee. When the Contractor demonstrates 
that performance or cost clearly indicates that the Contractor will earn 
a fee significantly above the target fee, the Government may, at the 
sole discretion of the Contracting Officer, pay on the basis of an 
appropriate higher fee. After payment of 85 percent of the applicable 
fee, the Contracting Officer may withhold further payment of fee until a 
reserve is set aside in an amount that the Contracting Officer considers 
necessary to protect the Government's interest. This reserve shall not 
exceed 15 percent of the applicable fee or $100,000, whichever is less. 
The Contracting Officer shall release 75 percent of all fee withholds 
under this contract after receipt of the certified final indirect cost 
rate proposal covering the year of physical completion of this contract, 
provided the Contractor has satisfied all other contract terms and 
conditions, including the submission of the final patent and royalty 
reports, and is not delinquent in submitting final vouchers on prior 
years' settlements. The Contracting Officer may release up to 90 percent 
of the fee withholds under this contract based on the Contractor's past 
performance related to the submission and settlement of final indirect 
cost rate proposals.
    (d) Equitable adjustments. When the work under this contract is 
increased or decreased by a modification to this contract or when any 
equitable adjustment in the target cost is authorized under any other 
clause, equitable adjustments in the target cost, target fee, minimum 
fee, and maximum fee, as appropriate, shall be stated in a supplemental 
agreement to this contract.
    (e) Fee payable. (1) The fee payable under this contract shall be 
the target fee increased by __ [Contracting Officer insert Contractor's 
participation] cents for every dollar that the total allowable cost is 
less than the target cost or decreased by __ [Contracting Officer insert 
Contractor's participation] cents for every dollar that the total 
allowable cost exceeds the target cost. In no event shall the fee be 
greater than __ [Contracting Officer insert percentage] percent or less 
than __ [Contracting Officer insert percentage] percent of the target 
cost.
    (2) The fee shall be subject to adjustment, to the extent provided 
in paragraph (d) above, and within the minimum and maximum fee 
limitations in subparagraph (1) above, when the total allowable cost is 
increased or decreased as a consequence of (i) payments made under 
assignments or (ii) claims excepted from the release as required by 
paragraph (h)(2) of the Allowable Cost and Payment clause.
    (3) If this contract is terminated in its entirety, the portion of 
the target fee payable shall not be subject to an increase or decrease 
as provided in this paragraph. The termination shall be accomplished in 
accordance with other applicable clauses of this contract.
    (4) For the purpose of fee adjustment, total allowable cost shall 
not include allowable costs arising out of--
    (i) Any of the causes covered by the Excusable Delays clause to the 
extent that they are beyond the control and without the fault or 
negligence of the Contractor or any subcontractor;
    (ii) The taking effect, after negotiating the target cost, of a 
statute, court decision, written ruling, or regulation that results in

[[Page 88]]

the Contractor's being required to pay or bear the burden of any tax or 
duty or rate increase in a tax or duty;
    (iii) Any direct cost attributed to the Contractor's involvement in 
litigation as required by the Contracting Officer pursuant to a clause 
of this contract, including furnishing evidence and information 
requested pursuant to the Notice and Assistance Regarding Patent and 
Copyright Infringement clause;
    (iv) The purchase and maintenance of additional insurance not in the 
target cost and required by the Contracting Officer, or claims for 
reimbursement for liabilities to third persons pursuant to the 
Insurance--Liability to Third Persons clause;
    (v) Any claim, loss, or damage resulting from a risk for which the 
Contractor has been relieved of liability by the Government Property 
clause; or
    (vi) Any claim, loss, or damage resulting from a risk defined in the 
contract as unusually hazardous or as a nuclear risk and against which 
the Government has expressly agreed to indemnify the Contractor.
    (5) All other allowable costs are included in total allowable cost 
for fee adjustment in accordance with this paragraph (e), unless 
otherwise specifically provided in this contract.
    (f) Contract modification. The total allowable cost and the adjusted 
fee determined as provided in this clause shall be evidenced by a 
modification to this contract signed by the Contractor and Contracting 
Officer.
    (g) Inconsistencies. In the event of any language inconsistencies 
between this clause and provisioning documents or Government options 
under this contract, compensation for spare parts or other supplies and 
services ordered under such documents shall be determined in accordance 
with this clause.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 61 FR 69296, Dec. 31, 1996; 
62 FR 12721, Mar. 17, 1997]



Sec. 52.216-11  Cost Contract--No Fee.

    As prescribed in 16.307(e), insert the following clause in 
solicitations and contracts when a cost-reimbursement contract is 
contemplated that provides no fee and is not a cost-sharing contract or 
a facilities contract. This clause may be modified by substituting 
$10,000 in lieu of $100,000 as the maximum reserve in paragraph (b) if 
the Contractor is a nonprofit organization.

                    Cost Contract--No Fee (APR 1984)

    (a) The Government shall not pay the Contractor a fee for performing 
this contract.
    (b) After payment of 80 percent of the total estimated cost shown in 
the Schedule, the Contracting Officer may withhold further payment of 
allowable cost until a reserve is set aside in an amount that the 
Contracting Officer considers necessary to protect the Government's 
interest. This reserve shall not exceed one percent of the total 
estimated cost shown in the Schedule or $100,000, whichever is less.

                             (End of clause)

    Alternate I (APR 1984). In a contract for research and development 
with an educational institution or a nonprofit organization, for which 
the contracting officer has determined that withholding of a portion of 
allowable costs is not required, delete paragraph (b) of the basic 
clause.



Sec. 52.216-12  Cost-Sharing Contract--No Fee.

    As prescribed in 16.307(f), insert the following clause in 
solicitations and contracts when a cost-sharing contract (other than a 
facilities contract) is contemplated. This clause may be modified by 
substituting $10,000 in lieu of $100,000 as the maximum reserve in 
paragraph (b) if the contract is with a nonprofit organization.

                Cost-Sharing Contract--No Fee (APR 1984)

    (a) The Government shall not pay to the Contractor a fee for 
performing this contract.
    (b) After paying 80 percent of the Government's share of the total 
estimated cost of performance shown in the Schedule, the Contracting 
Officer may withhold further payment of allowable cost until a reserve 
is set aside in an amount that the Contracting Officer considers 
necessary to protect the Government's interest. This reserve shall not 
exceed one percent of the Government's share of the total estimated cost 
shown in the Schedule or $100,000, whichever is less.

                             (End of clause)

    Alternate I (APR 1984). In a contract for research and development 
with an educational institution, for which the contracting officer has 
determined that withholding of a portion of allowable cost is not 
required, delete paragraph (b) of the basic clause.

[[Page 89]]



Sec. 52.216-13  Allowable Cost and Payment--Facilities.

    As prescribed in 16.307(g), insert the following clause:

            Allowable Cost and Payment--Facilities (APR 1998)

    (a) General. (1) For the performance of any work, duty, or 
obligation specified in this contract to be at Government expense, the 
Government shall pay the Contractor all allowable costs as determined by 
the Contracting Officer in accordance with the contract terms and 
section 31.106 of the Federal Acquisition Regulation (FAR) in effect on 
the contract date.
    (2) Except as otherwise specifically provided in this contract, the 
failure of this contract to provide for reimbursement does not preclude 
the Contractor from including, as part of the price or cost under any 
other Government contract or subcontract, an allocable portion of the 
costs incurred for any work, duty, or obligation performed under this 
contract, but not reimbursable under it.
    (b) Invoicing. The Government shall make payments to the Contractor 
when requested once each month. The Contractor may submit to an 
authorized representative of the Contracting Officer, in such form and 
reasonable detail as the representative may require, an invoice or 
voucher supported by a statement of the claimed allowable cost for the 
performance of this contract.
    (c) Negotiated indirect costs. Notwithstanding the audit and 
adjustment of invoices or vouchers under paragraph (f) of this clause, 
allowable indirect costs under this contract shall be obtained by 
applying final indirect cost rates established as follows:
    (1) Final annual indirect cost rates and the appropriate bases shall 
be established in accordance with subpart 42.7 of the FAR in effect for 
the period covered by the indirect cost rate proposal.
    (2)(i) The Contractor shall submit an adequate final indirect cost 
rate proposal to the Contracting Officer (or cognizant Federal agency 
official) and auditor within the 6-month period following the expiration 
of each of its fiscal years. Reasonable extensions, for exceptional 
circumstances only, may be requested in writing by the Contractor and 
granted in writing by the Contracting Officer. The Contractor shall 
support its proposal with adequate supporting data.
    (ii) The proposed rates shall be based on the Contractor's actual 
cost experience for that period. The appropriate Government 
representative and the Contractor shall establish the final indirect 
cost rates as promptly as practical after receipt of the Contractor's 
proposal.
    (3) The Contractor and the appropriate Government representative 
shall execute a written understanding setting forth the final indirect 
cost rates. The understanding shall specify (i) the agreed-upon final 
annual indirect cost rates, (ii) the bases to which the rates apply, 
(iii) the periods for which the rates apply, (iv) any specific indirect 
cost items treated as direct costs in the settlement, and (v) the 
affected contract and/or subcontract, identifying any with advance 
agreements or special terms and the applicable rates. The understanding 
shall not change any monetary ceiling, contract obligation, or specific 
cost allowance or disallowance provided for in this contract. The 
understanding is incorporated into this contract upon execution.
    (4) Within 120 days after settlement of the final indirect cost 
rates covering the year in which this contract is physically complete 
(or longer, if approved in writing by the Contracting Officer), the 
Contractor shall submit a completion invoice or voucher to reflect the 
settled amounts and rates.
    (5) Failure by the parties to agree on a final annual indirect cost 
rate shall be a dispute within the meaning of the Disputes clause.
    (d) Billing rates. Until final annual indirect cost rates are 
established for any period, the Government shall reimburse the 
Contractor at billing rates established by the Contracting Officer or by 
an authorized representative (the cognizant auditor), subject to 
adjustment when the final rates are established. These billing rates--
    (1) Shall be the anticipated final rates; and
    (2) May be prospectively or retroactively revised by mutual 
agreement, at either party's request, to prevent substantial overpayment 
or underpayment.
    (e) Quick-closeout procedures. Quick-closeout procedures are 
applicable when the conditions in FAR 42.708(a) are satisfied.
    (f) Audit. At any time or times before final payment, the 
Contracting Officer may have the Contractor's invoices or vouchers and 
statements of cost audited. Any payment may be (1) reduced by amounts 
found by the Contracting Officer not to constitute allowable costs or 
(2) adjusted for prior overpayments or underpayments.
    (g) Assignments and releases. The Contractor shall pay to the 
Government any refunds, rebates, credits, or other amounts (including 
interest, if any) accruing to or received by the Contractor or any 
assignee under this contract, to the extent that those amounts are 
properly allocable to costs for which the Contractor has been reimbursed 
by the Government. Reasonable expenses incurred by the Contractor for 
securing refunds, rebates, credits, or other amounts shall be allowable 
costs if approved by the Contracting Officer. Before final payment under 
this contract, the Contractor and each assignee shall execute and 
deliver--

[[Page 90]]

    (1) An assignment to the Government, in form and substance 
satisfactory to the Contracting Officer, of refunds, rebates, credits, 
or other amounts (including interest, if any) 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, except--
    (i) Specified claims stated in exact amounts, or in estimated 
amounts when the exact amounts are not known;
    (ii) Claims (including reasonable incidental expenses) based upon 
liabilities of the Contractor to third parties arising out of 
performance of this contract; provided that the claims are not known to 
the Contractor on the date of the execution of the release, and that the 
Contractor gives notice of the claims in writing to the Contracting 
Officer within 6 years following the release date or notice of final 
payment date, whichever is earlier; and
    (iii) Claims for reimbursement of costs, including related expenses, 
incurred by the Contractor under the patent clauses of this contract, 
excluding, however, any expenses arising from the Contractor's 
indemnification of the Government against patent liability.

                             (End of clause)

    Alternate I (MAR 1997). If the contract is for facilities 
acquisition, and the Contracting Officer considers it appropriate, add 
the following paragraphs (g) and (h) to the basic clause, and 
redesignate paragraph (g) of the basic clause as paragraph (i):

    (g) Withholding. After payment of 80 percent of the total estimated 
cost shown in the Schedule, the Contracting Officer may withhold payment 
of allowable costs until a reserve is set aside in an amount that the 
Contracting Officer considers necessary to protect the Government's 
interest. This reserve shall not exceed one percent of the total 
estimated cost shown in the Schedule or $100,000, whichever is less.
    (h) Final Payment. Upon approval of a completion invoice or voucher 
submitted by the Contractor in accordance with paragraph (c)(4) of this 
clause, and upon the Contractor's compliance with all terms of this 
contract, the Government shall promptly pay any balance of allowable 
costs not previously paid.

[48 FR 42478, Sept. 19, 1983, as amended at 59 FR 67052, Dec. 28, 1994; 
61 FR 31661, June 20, 1996; 61 FR 69296, Dec. 31, 1996; 62 FR 12721, 
Mar. 17, 1997; 62 FR 64916, Dec. 9, 1997; 63 FR 9065, Feb. 23, 1998]



Sec. 52.216-14  Allowable Cost and Payment--Facilities Use.

    As prescribed in 16.307(h), insert the following clause in 
solicitations and contracts when a facilities use contract is 
contemplated:

          Allowable Cost and Payment--Facilities Use (APR 1984)

    (a) For the performance of any work, duty, or obligations specified 
in this contract to be at Government expense, the Government shall pay 
the Contractor all allowable costs as determined by the Contracting 
Officer in accordance with the contract terms and section 31.106 of the 
Federal Acquisition Regulation (FAR) in effect on the contract date.
    (b) Except as otherwise specifically provided in this contract, the 
failure of this contract to provide for reimbursement does not preclude 
the Contractor from including, as part of the price or cost under any 
other Government contract or subcontract, an allocable portion of the 
costs incurred for any work, duty, or obligation performed under this 
contract, but not reimbursed under it.

                             (End of clause)



Sec. 52.216-15  Predetermined Indirect Cost Rates.

    As prescribed in 16.307(i), insert the following clause:

              Predetermined Indirect Cost Rates (APR 1998)

    (a) Notwithstanding the Allowable Cost and Payment clause of this 
contract, the allowable indirect costs under this contract shall be 
obtained by applying predetermined indirect cost rates to bases agreed 
upon by the parties, as specified below.
    (b)(1) The Contractor shall submit an adequate final indirect cost 
rate proposal to the Contracting Officer (or cognizant Federal agency 
official) and auditor within the 6-month period following the expiration 
of each of its fiscal years. Reasonable extensions, for exceptional 
circumstances only, may be requested in writing by the Contractor and 
granted in writing by the Contracting Officer. The Contractor shall 
support its proposal with adequate supporting data.
    (2) The proposed rates shall be based on the Contractor's actual 
cost experience for that period. The appropriate Government 
representative and the Contractor shall establish the final indirect 
cost rates as promptly as practical after receipt of the Contractor's 
proposal.
    (c) Allowability of costs and acceptability of cost allocation 
methods shall be determined in accordance with FAR subpart 31.3 in 
effect on the date of this contract.

[[Page 91]]

    (d) Predetermined rate agreements in effect on the date of this 
contract shall be incorporated into the contract Schedule. The 
Contracting Officer (or cognizant Federal agency official) and 
Contractor shall negotiate rates for subsequent periods and execute a 
written indirect cost rate agreement setting forth the results. The 
agreement shall specify (1) the agreed-upon predetermined indirect cost 
rates, (2) the bases to which the rates apply, (3) the period for which 
the rates apply, and (4) the specific items treated as direct costs or 
any changes in the items previously agreed to be direct costs. The 
indirect cost rate agreement shall not change any monetary ceiling, 
contract obligation, or specific cost allowance or disallowance provided 
for in this contract. The agreement is incorporated into this contract 
upon execution.
    (e) Pending establishment of predetermined indirect cost rates for 
any fiscal year (or other period agreed to by the parties), the 
Contractor shall be reimbursed either at the rates fixed for the 
previous fiscal year (or other period) or at billing rates acceptable to 
the Contracting Officer (or cognizant Federal agency official), subject 
to appropriate adjustment when the final rates for that period are 
established.
    (f) Any failure by the parties to agree on any predetermined 
indirect cost rates under this clause shall not be considered a dispute 
within the meaning of the Disputes clause. If for any fiscal year (or 
other period specified in the Schedule) the parties fail to agree to 
predetermined indirect cost rates, the allowable indirect costs shall be 
obtained by applying final indirect cost rates established in accordance 
with the Allowable Cost and Payment clause.
    (g) Allowable indirect costs for the period from the beginning of 
performance until the end of the Contractor's fiscal year (or other 
period specified in the Schedule) shall be obtained using the 
predetermined indirect cost rates and the bases shown in the Schedule.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 61 FR 31622, June 20, 1996; 
62 FR 64916, Dec. 9, 1997; 63 FR 9065, Feb. 23, 1998]



Sec. 52.216-16  Incentive Price Revision--Firm Target.

    As prescribed in 16.406(a), insert the following clause:

            Incentive Price Revision--Firm Target (OCT 1997)

    (a) General. The supplies or services identified in the Schedule as 
Items ____ [Contracting Officer insert Schedule line item numbers] are 
subject to price revision in accordance with this clause; provided, that 
in no event shall the total final price of these items exceed the 
ceiling price of ____ dollars ($____). Any supplies or services that are 
to be (1) ordered separately under, or otherwise added to, this contract 
and (2) subject to price revision in accordance with the terms of this 
clause shall be identified as such in a modification to this contract.
    (b) Definition. Costs, as used in this clause, means allowable costs 
in accordance with part 31 of the Federal Acquisition Regulation (FAR) 
in effect on the date of this contract.
    (c) Data submission. (1) Within ____ [Contracting Officer insert 
number of days] days after the end of the month in which the Contractor 
has delivered the last unit of supplies and completed the services 
specified by item number in paragraph (a) of this clause, the Contractor 
shall sumbit in the format of Table 15-2, FAR 15.408, or in any other 
form on which the parties agree--
    (i) A detailed statement of all costs incurred up to the end of that 
month in performing all work under the items;
    (ii) An estimate of costs of further performance, if any, that may 
be necessary to complete performance of all work under the items;
    (iii) A list of all residual inventory and an estimate of its value; 
and
    (iv) Any other relevant data that the Contracting Officer may 
reasonably require.
    (2) If the Contractor fails to submit the data required by 
subparagraph (1) above within the time specified and it is later 
determined that the Government has overpaid the Contractor, the 
Contractor shall repay the excess to the Government immediately. Unless 
repaid within 30 days after the end of the data submittal period, the 
amount of the excess shall bear interest, computed from the date the 
data were due to the date of repayment, at the rate established in 
accordance with the Interest clause.
    (d) Price revision. Upon the Contracting Officer's receipt of the 
data required by paragraph (c) above, the Contracting Officer and the 
Contractor shall promptly establish the total final price of the items 
specified in (a) above by applying to final negotiated cost an 
adjustment for profit or loss, as follows:
    (1) On the basis of the information required by paragraph (c) above, 
together with any other pertinent information, the parties shall 
negotiate the total final cost incurred or to be incurred for supplies 
delivered (or services performed) and accepted by the Government and 
which are subject to price revision under this clause.
    (2) The total final price shall be established by applying to the 
total final negotiated cost an adjustment for profit or loss, as 
follows:
    (i) If the total final negotiated cost is equal to the total target 
cost, the adjustment is the total target profit.

[[Page 92]]

    (ii) If the total final negotiated cost is greater than the total 
target cost, the adjustment is the total target profit, less __ 
[Contracting Officer insert percent] percent of the amount by which the 
total final negotiated cost exceeds the total target cost.
    (iii) If the final negotiated cost is less than the total target 
cost, the adjustment is the total target profit plus __ [Contracting 
Officer insert percent] percent of the amount by which the total final 
negotiated cost is less than the total target cost.
    (e) Contract modification. The total final price of the items 
specified in paragraph (a) above shall be evidenced by a modification to 
this contract, signed by the Contractor and the Contracting Officer. 
This price shall not be subject to revision, notwithstanding any changes 
in the cost of performing the contract, except to the extent that--
    (1) The parties may agree in writing, before the determination of 
total final price, to exclude specific elements of cost from this price 
and to a procedure for subsequent disposition of those elements; and
    (2) Adjustments or credits are explicitly permitted or required by 
this or any other clause in this contract.
    (f) Adjusting billing prices. (1) Pending execution of the contract 
modification (see paragraph (e) above), the Contractor shall submit 
invoices or vouchers in accordance with billing prices as provided in 
this paragraph. The billing prices shall be the target prices shown in 
this contract.
    (2) If at any time it appears from information provided by the 
contractor under subparagraph (g)(2) below that the then-current billing 
prices will be substantially greater than the estimated final prices, 
the parties shall negotiate a reduction in the billing prices. 
Similarly, the parties may negotiate an increase in billing prices by 
any or all of the difference between the target prices and the ceiling 
price, upon the Contractor's submission of factual data showing that 
final cost under this contract will be substantially greater than the 
target cost.
    (3) Any billing price adjustment shall be reflected in a contract 
modification and shall not affect the determination of the total final 
price under paragraph (d) above. After the contract modification 
establishing the total final price is executed, the total amount paid or 
to be paid on all invoices or vouchers shall be adjusted to reflect the 
total final price, and any resulting additional payments, refunds, or 
credits shall be made promptly.
    (g) Quarterly limitation on payments statement. This paragraph (g) 
shall apply until final price revision under this contract has been 
completed.
    (1) Within 45 days after the end of each quarter of the Contractor's 
fiscal year in which a delivery is first made (or services are first 
performed) and accepted by the Government under this contract, and for 
each quarter thereafter, the Contractor shall submit to the contract 
administration office (with a copy to the contracting office and the 
cognizant contract auditor) a statement, cumulative from the beginning 
of the contract, showing--
    (i) The total contract price of all supplies delivered (or services 
performed) and accepted by the Government and for which final prices 
have been established;
    (ii) The total costs (estimated to the extent necessary) reasonably 
incurred for, and properly allocable solely to, the supplies delivered 
(or services performed) and accepted by the Government and for which 
final prices have not been established;
    (iii) The portion of the total target profit (used in establishing 
the initial contract price or agreed to for the purpose of this 
paragraph (g)) that is in direct proportion to the supplies delivered 
(or services performed) and accepted by the Government and for which 
final prices have not been established--increased or decreased in 
accordance with subparagraph (d)(2) above, when the amount stated under 
subdivision (ii), immediately above, differs from the aggregate target 
costs of the supplies or services; and
    (iv) The total amount of all invoices or vouchers for supplies 
delivered (or services performed) and accepted by the Government 
(including amounts applied or to be applied to liquidate progress 
payments).
    (2) Notwithstanding any provision of this contract authorizing 
greater payments, if on any quarterly statement the amount under 
subdivision (1)(iv) above exceeds the sum due the Contractor, as 
computed in accordance with subdivisions (1)(i), (ii), and (iii) above, 
the Contractor shall immediately refund or credit to the Government the 
amount of this excess. The Contractor may, when appropriate, reduce this 
refund or credit by the amount of any applicable tax credits due the 
Contractor under 26 U.S.C. 1481 and by the amount of previous refunds or 
credits effected under this clause. If any portion of the excess has 
been applied to the liquidation of progress payments, then that portion 
may, instead of being refunded, be added to the unliquidated progress 
payment account consistent with the Progress Payments clause. The 
Contractor shall provide complete details to support any claimed 
reductions in refunds.
    (3) If the Contractor fails to submit the quarterly statement within 
45 days after the end of each quarter and it is later determined that 
the Government has overpaid the Contractor, the Contractor shall repay 
the excess to the Government immediately. Unless repaid within 30 days 
after the end of the statement submittal period, the amount of the 
excess shall bear interest, computed from the date the quarterly 
statement was

[[Page 93]]

due to the date of repayment, at the rate established in accordance with 
the Interest clause.
    (h) Subcontracts. No subcontract placed under this contract may 
provide for payment on a cost-plus-a-percentage-of-cost basis.
    (i) Disagreements. If the Contractor and the Contracting Officer 
fail to agree upon the total final price within 60 days (or within such 
other period as the Contracting Officer may specify) after the date on 
which the data required by paragraph (c) above are to be submitted, the 
Contracting Officer shall promptly issue a decision in accordance with 
the Disputes clause.
    (j) Termination. If this contract is terminated before the total 
final price is established, prices of supplies or services subject to 
price revision shall be established in accordance with this clause for 
(1) completed supplies and services accepted by the Government and (2) 
those supplies and services not terminated under a partial termination. 
All other elements of the termination shall be resolved in accordance 
with other applicable clauses of this contract.
    (k) Equitable adjustment under other clauses. If an equitable 
adjustment in the contract price is made under any other clause of this 
contract before the total final price is established, the adjustment 
shall be made in the total target cost and may be made in the maximum 
dollar limit on the total final price, the total target profit, or both. 
If the adjustment is made after the total final price is established, 
only the total final price shall be adjusted.
    (l) Exclusion from target price and total final price. If any clause 
of this contract provides that the contract price does not or will not 
include an amount for a specific purpose, then neither any target price 
nor the total final price includes or will include any amount for that 
purpose.
    (m) Separate reimbursement. If any clause of this contract expressly 
provides that the cost of performance of an obligation shall be at 
Government expense, that expense shall not be included in any target 
price or in the total final price, but shall be reimbursed separately.
    (n) Taxes. As used in the Federal, State, and Local Taxes clause or 
in any other clause that provides for certain taxes or duties to be 
included in, or excluded from, the contract price, the term contract 
price includes the total target price or, if it has been established, 
the total final price. When any of these clauses requires that the 
contract price be increased or decreased as a result of changes in the 
obligation of the Contractor to pay or bear the burden of certain taxes 
or duties, the increase or decrease shall be made in the total target 
price or, if it has been established, in the total final price, so that 
it will not affect the Contractor's profit or loss on this contract.

                             (End of clause)

    Alternate I (APR 1984). As prescribed in 16.406(a), add the 
following paragraph (o) to the basic clause:

    (o) Provisioning and options. Parts, other supplies, or services 
that are to be furnished under this contract on the basis of a 
provisioning document or Government option shall be subject to price 
revision in accordance with this clause. Any prices established for 
these parts, other supplies, or services under a provisioning document 
or Government option shall be treated as target prices. Target cost and 
profit covering these parts, other supplies, or services may be 
established separately, in the aggregate, or in any combination, as the 
parties may agree.

[48 FR 42478, Sept. 19, 1983, as amended at 61 FR 67426, Dec. 20, 1996; 
62 FR 12696, Mar. 17, 1997; 62 FR 51265, Sept. 30, 1997]



Sec. 52.216-17  Incentive Price Revision--Successive Targets.

    As prescribed in 16.406(b), insert the following clause:

         Incentive Price Revision--Successive Targets (OCT 1997)

    (a) General. The supplies or services identified in the Schedule as 
Items ____ [Contracting Officer insert line item numbers] are subject to 
price revision in accordance with this clause; provided, that in no 
event shall the total final price of these items exceed the ceiling 
price of ____ dollars ($____). The prices of these items shown in the 
Schedule are the initial target prices, which include an initial target 
profit of __ [Contracting Officer insert percent] percent of the initial 
target cost. Any supplies or services that are to be (1) ordered 
separately under, or otherwise added to, this contract and (2) subject 
to price revision in accordance with this clause shall be identified as 
such in a modification to this contract.
    (b) Definition. Costs, as used in this clause, means allowable costs 
in accordance with part 31 of the Federal Acquisition Regulation (FAR) 
in effect on the date of this contract.
    (c) Submitting data for establishing the firm fixed price or a final 
profit adjustment formula. (1) Within __ [Contracting Officer insert 
number of days] days after the end of the month in which the Contractor 
has completed ____ [see Note 1], the Contractor shall submit the 
following data:
    (i) A proposed firm fixed price or total firm target price for 
supplies delivered and to be delivered and services performed and to be 
performed.
    (ii) A detailed statement of all costs incurred in the performance 
of this contract through the end of the month specified above, in the 
format of Table 15-2, FAR 15.408

[[Page 94]]

(or in any other form on which the parties may agree), with sufficient 
supporting data to disclose unit costs and cost trends for--
    (A) Supplies delivered and services performed; and
    (B) Inventories of work in process and undelivered contract supplies 
on hand (estimated to the extent necessary).
    (iii) An estimate of costs of all supplies delivered and to be 
delivered and all services performed and to be performed under this 
contract, using the statement of costs incurred plus an estimate of 
costs to complete performance, in the format of table 15-2, FAR 15.408 
(or in any other form on which the parties may agree), together with--
    (A) Sufficient data to support the accuracy and reliability of the 
estimate; and
    (B) An explanation of the differences between this estimate and the 
original estimate used to establish the initial target prices.
    (2) The Contractor shall also submit, to the extent that it becomes 
available before negotiations establishing the total firm price are 
concluded--
    (i) Supplemental statements of costs incurred after the end of the 
month specified in subparagraph (1) above for--
    (A) Supplies delivered and services performed; and
    (B) Inventories of work in process and undelivered contract supplies 
on hand (estimated to the extent necessary); and
    (ii) Any other relevant data that the Contracting Officer may 
reasonably require.
    (3) If the Contractor fails to submit the data required by 
subparagraphs (1) and (2) above within the time specified and it is 
later determined that the Government has overpaid the Contractor, the 
Contractor shall repay the excess to the Government immediately. Unless 
repaid within 30 days after the end of the data submittal period, the 
amount of the excess shall bear interest, computed from the date the 
data were due to the date of repayment, at the rate established in 
accordance with the Interest clause.
    (d) Establishing firm fixed price or final profit adjustment 
formula. Upon the Contracting Officer's receipt of the data required by 
paragraph (c) above the Contracting Officer and the Contractor shall 
promptly establish either a firm fixed price or a profit adjustment 
formula for determining final profit, as follows:
    (1) The parties shall negotiate a total firm target cost, based upon 
the data submitted under paragraph (c) above.
    (2) If the total firm target cost is more than the total initial 
target cost, the total initial target profit shall be decreased. If the 
total firm target cost is less than the total initial target cost, the 
total initial target profit shall be increased. The initial target 
profit shall be increased or decreased by __ percent [see Note 2] of the 
difference between the total initial target cost and the total firm 
target cost. The resulting amount shall be the total firm target profit; 
provided, that in no event shall the total firm target profit be less 
than __ percent or more than __ percent [Contracting Officer insert 
percents] of the total initial target cost.
    (3) If the total firm target cost plus the total firm target profit 
represent a reasonable price for performing that part of the contract 
subject to price revision under this clause, the parties may agree on a 
firm fixed price, which shall be evidenced by a contract modification 
signed by the Contractor and the Contracting Officer.
    (4) Failure of the parties to agree to a firm fixed price shall not 
constitute a dispute under the Disputes clause. If agreement is not 
reached, or if establishment of a firm fixed price is inappropriate, the 
Contractor and the Contracting Officer shall establish a profit 
adjustment formula under which the total final price shall be 
established by applying to the total final negotiated cost an adjustment 
for profit or loss, determined as follows:
    (i) If the total final negotiated cost is equal to the total firm 
target cost, the adjustment is the total firm target profit.
    (ii) If the total final negotiated cost is greater than the total 
firm target cost, the adjustment is the total firm target profit, less 
__ percent of the amount by which the total final negotiated cost 
exceeds the total firm target cost.
    (iii) If the total final negotiated cost is less than the total firm 
target cost, the adjustment is the total firm target profit, plus __ 
percent of the amount by which the total final negotiated cost is less 
than the total firm target cost.
    (iv) The total firm target cost, total firm target profit, and the 
profit adjustment formula for determining final profit shall be 
evidenced by a modification to this contract signed by the Contractor 
and the Contracting Officer.
    (e) Submitting data for final price revision. Unless a firm fixed 
price has been established in accordance with paragraph (d) of this 
section within ____ [Contracting Officer insert number of days] days 
after the end of the month in which the Contractor has delivered the 
last unit of supplies and completed the services specified by item 
number in paragraph (a) of this section, the Contractor shall submit in 
the format of table 15-2, FAR 15.408 (or in any other form on which the 
parties agree)--
    (1) A detailed statement of all costs incurred up to the end of that 
month in performing all work under the items;
    (2) An estimate of costs of further performance, if any, that may be 
necessary to complete performance of all work under the items;

[[Page 95]]

    (3) A list of all residual inventory and an estimate of its value; 
and
    (4) Any other relevant data that the Contracting Officer may 
reasonably require.
    (f) Final price revision. Unless a firm fixed price has been agreed 
to in accordance with paragraph (d) above, the Contractor and the 
Contracting Officer shall, promptly after submission of the data 
required by paragraph (e) above, establish the total final price, as 
follows:
    (1) On the basis of the information required by paragraph (e) above, 
together with any other pertinent information, the parties shall 
negotiate the total final cost incurred or to be incurred for the 
supplies delivered (or services performed) and accepted by the 
Government and which are subject to price revision under this clause.
    (2) The total final price shall be established by applying to the 
total final negotiated cost an adjustment for final profit or loss 
determined as agreed upon under subparagraph (d)(4) above.
    (g) Contract modification. The total final price of the items 
specified in paragraph (a) above shall be evidenced by a modification to 
this contract, signed by the Contractor and the Contracting Officer. 
This price shall not be subject to revision, notwithstanding any changes 
in the cost of performing the contract, except to the extent that--
    (1) The parties may agree in writing, before the determination of 
total final price, to exclude specific elements of cost from this price 
and to a procedure for subsequent disposition of these elements; and
    (2) Adjustments or credits are explicitly permitted or required by 
this or any other clause in this contract.
    (h) Adjustment of billing prices. (1) Pending execution of the 
contract modification (see paragraph (e) above), the Contractor shall 
submit invoices or vouchers in accordance with billing prices as 
provided in this paragraph. The billing prices shall be the initial 
target prices shown in this contract until firm target prices are 
established under paragraph (d) above. When established, the firm target 
prices shall be used as the billing prices.
    (2) If at any time it appears from information provided by the 
contractor under subparagraph (i)(1) below that the then-current billing 
prices will be substantially greater than the estimated final prices, 
the parties shall negotiate a reduction in the billing prices. 
Similarly, the parties may negotiate an increase in billing prices by 
any or all of the difference between the target prices and the ceiling 
price, upon the Contractor's submission of factual data showing that the 
final cost under this contract will be substantially greater than the 
target cost.
    (3) Any adjustment of billing prices shall be reflected in a 
contract modification and shall not affect the determination of any 
price under paragraph (d) or (f) above. After the contract modification 
establishing the total final price is executed, the total amount paid or 
to be paid on all invoices or vouchers shall be adjusted to reflect the 
total final price, and any resulting additional payments, refunds, or 
credits shall be made promptly.
    (i) Quarterly limitation on payments statement. This paragraph (i) 
shall apply until a firm fixed price or a total final price is 
established under subparagraph (d)(3) or (f)(2).
    (1) Within 45 days after the end of each quarter of the Contractor's 
fiscal year in which a delivery is first made (or services are first 
performed) and accepted by the Government under this contract, and for 
each quarter thereafter, the Contractor shall submit to the contract 
administration office (with a copy to the contracting office and the 
cognizant contract auditor) a statement, cumulative from the beginning 
of the contract, showing--
    (i) The total contract price of all supplies delivered (or services 
performed) and accepted by the Government and for which final prices 
have been established;
    (ii) The total cost (estimated to the extent necessary) reasonably 
incurred for, and properly allocable solely to, the supplies delivered 
(or services performed) and accepted by the Government and for which 
final prices have not been established;
    (iii) The portion of the total interim profit (used in establishing 
the initial contract price or agreed to for the purpose of this 
paragraph (i)) that is in direct proportion to the supplies delivered 
(or services performed) and accepted by the Government and for which 
final prices have not been established--increased or decreased in 
accordance with subparagraph (d)(4) above when the amount stated under 
subdivision (ii), immediately above, differs from the aggregate firm 
target costs of the supplies or services; and
    (iv) The total amount of all invoices or vouchers for supplies 
delivered (or services performed) and accepted by the Government 
(including amounts applied or to be applied to liquidate progress 
payments).
    (2) Notwithstanding any provision of this contract authorizing 
greater payments, if on any quarterly statement the amount under 
subdivision (1)(iv) above exceeds the sum due the Contractor, as 
computed in accordance with subdivisions (1)(i), (ii), and (iii) above, 
the Contractor shall immediately refund or credit to the Government the 
amount of this excess. The Contractor may, when appropriate, reduce this 
refund or credit by the amount of any applicable tax credits due the 
Contractor under 26 U.S.C. 1481 and by the amount of previous refunds or 
credits effected under this clause. If any portion of the excess has 
been applied to the liquidation of progress payments, then that portion 
may,

[[Page 96]]

instead of being refunded, be added to the unliquidated progress payment 
account consistent with the Progress Payments clause. The Contractor 
shall provide complete details to support any claimed reductions in 
refunds.
    (3) If the Contractor fails to submit the quarterly statement within 
45 days after the end of each quarter and it is later determined that 
the Government has overpaid the Contractor, the Contractor shall repay 
the excess to the Government immediately. Unless repaid within 30 days 
after the end of the statement submittal period, the amount of the 
excess shall bear interest, computed from the date the quarterly 
statement was due to the date of repayment, at the rate established in 
accordance with the Interest clause.
    (j) Subcontracts. No subcontract placed under this contract may 
provide for payment on a cost-plus-a-percentage-of-cost basis.
    (k) Disagreements. If the Contractor and the Contracting Officer 
fail to agree upon (1) a total firm target cost and a final profit 
adjustment formula or (2) a total final price, within 60 days (or within 
such other period as the Contracting Officer may specify) after the date 
on which the data required in paragraphs (c) and (e) above are to be 
submitted, the Contracting Officer shall promptly issue a decision in 
accordance with the Disputes clause.
    (l) Termination. If this contract is terminated before the total 
final price is established, prices of supplies or services subject to 
price revision shall be established in accordance with this clause for 
(1) completed supplies and services accepted by the Government and (2) 
those supplies or services not terminated under a partial termination. 
All other elements of the termination shall be resolved in accordance 
with other applicable clauses of this contract.
    (m) Equitable adjustments under other clauses. If an equitable 
adjustment in the contract price is made under any other clause of this 
contract before the total final price is established, the adjustment 
shall be made in the total target cost and may be made in the maximum 
dollar limit on the total final price, the total target profit, or both. 
If the adjustment is made after the total final price is established, 
only the total final price shall be adjusted.
    (n) Exclusion from target price and total final price. If any clause 
of this contract provides that the contract price does not or will not 
include an amount for a specific purpose, then neither any target price 
nor the total final price includes or will include any amount for that 
purpose.
    (o) Separate reimbursement. If any clause of this contract expressly 
provides that the cost of performance of an obligation shall be at 
Government expense, that expense shall not be included in any target 
price or in the total final price, but shall be reimbursed separately.
    (p) Taxes. As used in the Federal, State, and Local Taxes clause or 
in any other clause that provides for certain taxes or duties to be 
included in, or excluded from, the contract price, the term contract 
price includes the total target price or, if it has been established, 
the total final price. When any of these clauses requires that the 
contract price be increased or decreased as a result of changes in the 
obligation of the Contractor to pay or bear the burden of certain taxes 
or duties, the increase or decrease shall be made in the total target 
price or, if it has been established, in the total final price, so that 
it will not affect the Contractor's profit or loss on this contract.

                             (End of clause)

    NOTES:
(1) The degree of completion may be based on a percentage of contract 
performance or any other reasonable basis.
(2) The language may be changed to describe a negotiated adjustment 
pattern under which the extent of adjustment is not the same for all 
levels of cost variation.

    Alternate I (APR 1984). As prescribed in 16.406(b), add the 
following paragraph (q) to the basic clause:

    (q) Provisioning and options. Parts, other supplies, or services 
that are to be furnished under this contract on the basis of a 
provisioning document or Government option shall be subject to price 
revision in accordance with this clause. Any prices established for 
these parts, other supplies, or services under a provisioning document 
or Government option shall be treated as initial target prices, or 
target prices as agreed upon and stipulated in the pricing document 
supporting the provisioning or added items. Initial or firm target costs 
and profits and final prices covering these parts, other supplies, or 
services may be established separately, in the aggregate, or in any 
combination, as the parties may agree.

[48 FR 42478, Sept. 19, 1983, as amended at 61 FR 67426, Dec. 20, 1996; 
62 FR 12696, Mar. 17, 1997; 62 FR 51265, Sept. 30, 1997]



Sec. 52.216-18  Ordering.

    As prescribed in 16.506(a), insert the following clause:

                           Ordering (OCT 1995)

    (a) Any supplies and services to be furnished under this contract 
shall be ordered by issuance of delivery orders or task orders by the 
individuals or activities designated in the Schedule. Such orders may be 
issued from ______ through ______ [insert dates].

[[Page 97]]

    (b) All delivery orders or task orders are subject to the terms and 
conditions of this contract. In the event of conflict between a delivery 
order or task order and this contract, the contract shall control.
    (c) If mailed, a delivery order or task order is considered 
``issued'' when the Government deposits the order in the mail. Orders 
may be issued orally, by facsimile, or by electronic commerce methods 
only if authorized in the Schedule.

                             (End of clause)

[60 FR 49727, Sept. 26, 1995]



Sec. 52.216-19  Order Limitations.

    As prescribed in 16.506(b), insert a clause substantially the same 
as follows:

                      Order Limitations (OCT 1995)

    (a) Minimum order. When the Government requires supplies or services 
covered by this contract in an amount of less than ____ [insert dollar 
figure or quantity], the Government is not obligated to purchase, nor is 
the Contractor obligated to furnish, those supplies or services under 
the contract.
    (b) Maximum order. The Contractor is not obligated to honor--
    (1) Any order for a single item in excess of ____ [insert dollar 
figure or quantity];
    (2) Any order for a combination of items in excess of ____ [insert 
dollar figure or quantity]; or
    (3) A series of orders from the same ordering office within __ days 
that together call for quantities exceeding the limitation in 
subparagraph (1) or (2) above.
    (c) If this is a requirements contract (i.e., includes the 
Requirements clause at subsection 52.216-21 of the Federal Acquisition 
Regulation (FAR)), the Government is not required to order a part of any 
one requirement from the Contractor if that requirement exceeds the 
maximum-order limitations in paragraph (b) above.
    (d) Notwithstanding paragraphs (b) and (c) above, the Contractor 
shall honor any order exceeding the maximum order limitations in 
paragraph (b), unless that order (or orders) is returned to the ordering 
office within __ days after issuance, with written notice stating the 
Contractor's intent not to ship the item (or items) called for and the 
reasons. Upon receiving this notice, the Government may acquire the 
supplies or services from another source.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 60 FR 49727, Sept. 26, 1995]



Sec. 52.216-20  Definite Quantity.

    As prescribed in 16.506(c), insert the following clause:

                      Definite Quantity (OCT 1995)

    (a) This is a definite-quantity, indefinite-delivery contract for 
the supplies or services specified, and effective for the period stated, 
in the Schedule.
    (b) The Government shall order the quantity of supplies or services 
specified in the Schedule, and the Contractor shall furnish them when 
ordered. Delivery or performance shall be at locations designated in 
orders issued in accordance with the Ordering clause and the Schedule.
    (c) Except for any limitations on quantities in the Order 
Limitations clause or in the Schedule, there is no limit on the number 
of orders that may be issued. The Government may issue orders requiring 
delivery to multiple destinations or performance at multiple locations.
    (d) Any order issued during the effective period of this contract 
and not completed within that time shall be completed by the Contractor 
within the time specified in the order. The contract shall govern the 
Contractor's and Government's rights and obligations with respect to 
that order to the same extent as if the order were completed during the 
contract's effective period; provided, that the Contractor shall not be 
required to make any deliveries under this contract after ____ [insert 
date].

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 60 FR 49727, Sept. 26, 1995]



Sec. 52.216-21  Requirements.

    As prescribed in 16.506(d), insert the following clause:

                         Requirements (OCT 1995)

    (a) This is a requirements contract for the supplies or services 
specified, and effective for the period stated, in the Schedule. The 
quantities of supplies or services specified in the Schedule are 
estimates only and are not purchased by this contract. Except as this 
contract may otherwise provide, if the Government's requirements do not 
result in orders in the quantities described as estimated or maximum in 
the Schedule, that fact shall not constitute the basis for an equitable 
price adjustment.
    (b) Delivery or performance shall be made only as authorized by 
orders issued in accordance with the Ordering clause. Subject to any 
limitations in the Order Limitations clause or elsewhere in this 
contract, the Contractor shall furnish to the Government all supplies or 
services specified in the Schedule

[[Page 98]]

and called for by orders issued in accordance with the Ordering clause. 
The Government may issue orders requiring delivery to multiple 
destinations or performance at multiple locations.
    (c) Except as this contract otherwise provides, the Government shall 
order from the Contractor all the supplies or services specified in the 
Schedule that are required to be purchased by the Government activity or 
activities specified in the Schedule.
    (d) The Government is not required to purchase from the Contractor 
requirements in excess of any limit on total orders under this contract.
    (e) If the Government urgently requires delivery of any quantity of 
an item before the earliest date that delivery may be specified under 
this contract, and if the Contractor will not accept an order providing 
for the accelerated delivery, the Government may acquire the urgently 
required goods or services from another source.
    (f) Any order issued during the effective period of this contract 
and not completed within that period shall be completed by the 
Contractor within the time specified in the order. The contract shall 
govern the Contractor's and Government's rights and obligations with 
respect to that order to the same extent as if the order were completed 
during the contract's effective period; provided, that the Contractor 
shall not be required to make any deliveries under this contract after 
____ [insert date].

                             (End of clause)

    Alternate I (APR 1984). If the requirements contract is for 
nonpersonal services and related supplies and covers estimated 
requirements that exceed a specific Government activity's internal 
capability to produce or perform, substitute the following paragraph (c) 
for paragraph (c) of the basic clause:

    (c) The estimated quantities are not the total requirements of the 
Government activity specified in the Schedule, but are estimates of 
requirements in excess of the quantities that the activity may itself 
furnish within its own capabilities. Except as this contract otherwise 
provides, the Government shall order from the Contractor all of that 
activity's requirements for supplies and services specified in the 
Schedule that exceed the quantities that the activity may itself furnish 
within its own capabilities.

    Alternate II (APR 1984). If the requirements contract includes 
subsistence for both Government use and resale in the same Schedule, and 
similar products may be acquired on a brand-name basis, add the 
following paragraph (g) to the basic clause:

    (g) The requirements referred to in this contract are for items to 
be manufactured according to Government specifications. Notwithstanding 
anything to the contrary stated in the contract, the Government may 
acquire similar products by brand name from other sources for resale.

    Alternate III (OCT 1995). If the requirements contract involves a 
partial small business set-aside, substitute the following paragraph (c) 
for paragraph (c) of the basic clause:

    (c) The Government's requirements for each item or subitem of 
supplies or services described in the Schedule are being purchased 
through one non-set-aside contract and one set-aside contract. 
Therefore, the Government shall order from each Contractor approximately 
one-half of the total supplies or services specified in the Schedule 
that are required to be purchased by the specified Government activity 
or activities. The Government may choose between the set-aside 
Contractor and the non-set-aside Contractor in placing any particular 
order. However, the Government shall allocate successive orders, in 
accordance with its delivery requirements, to maintain as close a ratio 
as is reasonably practicable between the total quantities ordered from 
the two Contractors.

    Alternate IV (OCT 1995). If the contract includes subsistence for 
both Government use and resale in the same Schedule and similar products 
may be acquired on a brand-name basis and the contract also involves a 
partial small business set-aside, substitute the following paragraph (c) 
for paragraph (c) of the basic clause and add the following paragraph 
(g) to the basic clause:

    (c) The Government's requirements for each item or subitem of 
supplies or services described in the Schedule are being purchased 
through one non-set-aside contract and one set-aside contract. 
Therefore, the Government shall order from each Contractor approximately 
one-half of the total supplies or services specified in the Schedule 
that are required to be purchased by the specified Government activity 
or activities. The Government may choose between the set-aside 
Contractor and the non-set-aside Contractor in placing any particular 
order. However, the Government shall allocate successive orders, in 
accordance with its delivery requirements, to maintain as close a ratio 
as is reasonably practicable between the total quantities ordered from 
the two Contractors.

[[Page 99]]

    (g) The requirements referred to in this contract are for items to 
be manufactured according to the Government specifications. 
Notwithstanding anything to the contrary stated in the contract, the 
Government may acquire similar products by brand name from other sources 
for resale.

[48 FR 42478, Sept. 19, 1983, as amended at 60 FR 48264, Sept. 18, 1995; 
60 FR 49727, Sept. 26, 1995]



Sec. 52.216-22  Indefinite Quantity.

    As prescribed in 16.506(e), insert the following clause:

                     Indefinite Quantity (OCT 1995)

    (a) This is an indefinite-quantity contract for the supplies or 
services specified, and effective for the period stated, in the 
Schedule. The quantities of supplies and services specified in the 
Schedule are estimates only and are not purchased by this contract.
    (b) Delivery or performance shall be made only as authorized by 
orders issued in accordance with the Ordering clause. The Contractor 
shall furnish to the Government, when and if ordered, the supplies or 
services specified in the Schedule up to and including the quantity 
designated in the Schedule as the maximum. The Government shall order at 
least the quantity of supplies or services designated in the Schedule as 
the minimum.
    (c) Except for any limitations on quantities in the Order 
Limitations clause or in the Schedule, there is no limit on the number 
of orders that may be issued. The Government may issue orders requiring 
delivery to multiple destinations or performance at multiple locations.
    (d) Any order issued during the effective period of this contract 
and not completed within that period shall be completed by the 
Contractor within the time specified in the order. The contract shall 
govern the Contractor's and Government's rights and obligations with 
respect to that order to the same extent as if the order were completed 
during the contract's effective period; provided, that the Contractor 
shall not be required to make any deliveries under this contract after 
____ [insert date].

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 38518, Sept. 18, 1990; 
60 FR 49727, Sept. 26, 1995]



Sec. 52.216-23  Execution and Commencement of Work.

    As prescribed in 16.603-4(b)(1), insert the following clause in 
solicitations and contracts when a letter contract is contemplated, 
except that it may be omitted from letter contracts awarded on SF 26:

              Execution and Commencement of Work (APR 1984)

    The Contractor shall indicate acceptance of this letter contract by 
signing three copies of the contract and returning them to the 
Contracting Officer not later than ____ [insert date]. Upon acceptance 
by both parties, the Contractor shall proceed with performance of the 
work, including purchase of necessary materials.

                             (End of clause)



Sec. 52.216-24  Limitation of Government Liability.

    As prescribed in 16.603-4(b)(2), insert the following clause in 
solicitations and contracts when a letter contract is contemplated:

              Limitation of Government Liability (APR 1984)

    (a) In performing this contract, the Contractor is not authorized to 
make expenditures or incur obligations exceeding ____ dollars.
    (b) The maximum amount for which the Government shall be liable if 
this contract is terminated is ____ dollars.

                             (End of clause)



Sec. 52.216-25  Contract Definitization.

    As prescribed in 16.603-4(b)(3), insert the following clause:

                   Contract Definitization (OCT 1997)

    (a) A ____ [insert specific type of contract] definitive contract is 
contemplated. The Contractor agrees to begin promptly negotiating with 
the Contracting Officer the terms of a definitive contract that will 
include (1) all clauses required by the Federal Acquisition Regulation 
(FAR) on the date of execution of the letter contract, (2) all clauses 
required by law on the date of execution of the definitive contract, and 
(3) any other mutually agreeable clauses, terms, and conditions. The 
Contractor agrees to submit a ____ [insert specific type of proposal 
(e.g., fixed-price or cost-and-fee)] proposal and cost or pricing data 
supporting its proposal.
    (b) The schedule for definitizing this contract is [insert target 
date for definitization of the contract and dates for submission of 
proposal, beginning of negotiations, and, if appropriate, submission of 
make-or-buy and subcontracting plans and cost or pricing data]:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________

[[Page 100]]

_______________________________________________________________________
    (c) If agreement on a definitive contract to supersede this letter 
contract is not reached by the target date in paragraph (b) above, or 
within any extension of it granted by the Contracting Officer, the 
Contracting Officer may, with the approval of the head of the 
contracting activity, determine a reasonable price or fee in accordance 
with subpart 15.4 and part 31 of the FAR, subject to Contractor appeal 
as provided in the Disputes clause. In any event, the Contractor shall 
proceed with completion of the contract, subject only to the Limitation 
of Government Liability clause.
    (1) After the Contracting Officer's determination of price or fee, 
the contract shall be governed by--
    (i) All clauses required by the FAR on the date of execution of this 
letter contract for either fixed-price or cost-reimbursement contracts, 
as determined by the Contracting Officer under this paragraph (c);
    (ii) All clauses required by law as of the date of the Contracting 
Officer's determination; and
    (iii) Any other clauses, terms, and conditions mutually agreed upon.
    (2) To the extent consistent with subparagraph (c)(1) above, all 
clauses, terms, and conditions included in this letter contract shall 
continue in effect, except those that by their nature apply only to a 
letter contract.

                             (End of clause)

    Alternate I (APR 1984). In letter contracts awarded on the basis of 
price competition, add the following paragraph (d) to the basic clause:

    (d) The definitive contract resulting from this letter contract will 
include a negotiated ____ [insert price ceiling or firm fixed price] in 
no event to exceed ____ [insert the proposed price upon which the award 
was based].

[48 FR 42478, Sept. 19, 1983, as amended at 60 FR 48221, Sept. 18, 1995; 
62 FR 51271, Sept. 30, 1997]



Sec. 52.216-26  Payments of Allowable Costs Before Definitization.

    As prescribed in 16.603-4(c), insert the following clause in 
solicitations and contracts if a cost-reimbursement definitive contract 
is contemplated, unless the acquisition involves conversion, alteration, 
or repair of ships:

      Payments of Allowable Costs Before Definitization (APR 1984)

    (a) Reimbursement rate. Pending the placing of the definitive 
contract referred to in this letter contract, the Government shall 
promptly reimburse the Contractor for all allowable costs under this 
contract at the following rates:
    (1) One hundred percent of approved costs representing progress 
payments to subcontractors under fixed-price subcontracts; provided, 
that the Government's payments to the Contractor shall not exceed 80 
percent of the allowable costs of those subcontractors.
    (2) One hundred percent of approved costs representing cost-
reimbursement subcontracts; provided, that the Government's payments to 
the Contractor shall not exceed 85 percent of the allowable costs of 
those subcontractors.
    (3) Eighty-five percent of all other approved costs.
    (b) Limitation of reimbursement. To determine the amounts payable to 
the Contractor under this letter contract, the Contracting Officer shall 
determine allowable costs in accordance with the applicable cost 
principles in part 31 of the Federal Acquisition Regulation (FAR). The 
total reimbursement made under this paragraph shall not exceed 85 
percent of the maximum amount of the Government's liability, as stated 
in this contract.
    (c) Invoicing. Payments shall be made promptly to the Contractor 
when requested as work progresses, but (except for small business 
concerns) not more often than every 2 weeks, in amounts approved by the 
Contracting Officer. The Contractor may submit to an authorized 
representative of the Contracting Officer, in such form and reasonable 
detail as the representative may require, an invoice or voucher 
supported by a statement of the claimed allowable cost incurred by the 
Contractor in the performance of this contract.
    (d) Allowable costs. For the purpose of determining allowable costs, 
the term costs includes--
    (1) Those recorded costs that result, at the time of the request for 
reimbursement, from payment by cash, check, or other form of actual 
payment for items or services purchased directly for the contract;
    (2) When the Contractor is not delinquent in payment of costs of 
contract performance in the ordinary course of business, costs incurred, 
but not necessarily paid, for--
    (i) Materials issued from the Contractor's stores inventory and 
placed in the production process for use on the contract;
    (ii) Direct labor;
    (iii) Direct travel;
    (iv) Other direct in-house costs; and
    (v) Properly allocable and allowable indirect costs as shown on the 
records maintained by the Contractor for purposes of obtaining 
reimbursement under Government contracts; and
    (3) The amount of progress payments that have been paid to the 
Contractor's subcontractors under similar cost standards.

[[Page 101]]

    (e) Small business concerns. A small business concern may receive 
more frequent payments than every 2 weeks and may invoice and be paid 
for recorded costs for items or services purchased directly for the 
contract, even though it has not yet paid for such items or services.
    (f) Audit. At any time before final payment, the Contracting Officer 
may have the Contractor's invoices or vouchers and statements of costs 
audited. Any payment may be (1) reduced by any amounts found by the 
Contracting Officer not to constitute allowable costs or (2) adjusted 
for overpayments or underpayments made on preceding invoices or 
vouchers.

                             (End of clause)



Sec. 52.216-27  Single or Multiple Awards.

    As prescribed in 16.506(f), insert the following provision:

                  Single or Multiple Awards (OCT 1995)

    The Government may elect to award a single delivery order contract 
or task order contract or to award multiple delivery order contracts or 
task order contracts for the same or similar supplies or services to two 
or more sources under this solicitation.

                           (End of provision)

[60 FR 49727, Sept. 26, 1995]



Sec. 52.216-28  Multiple Awards for Advisory and Assistance Services.

    As prescribed in 16.506(g), insert the following provision:

     Multiple Awards for Advisory and Assistance Services (OCT 1995)

    The Government intends to award multiple contracts for the same or 
similar advisory and assistance services to two or more sources under 
this solicitation unless the Government determines, after evaluation of 
offers, that only one offeror is capable of providing the services at 
the level of quality required.

                           (End of provision)

[60 FR 49728, Sept. 26, 1995]



Sec. 52.217-1  [Reserved]



Sec. 52.217-2  Cancellation Under Multiyear Contracts.

    As prescribed in 17.109(a), insert the following clause:

            Cancellation Under Multiyear Contracts (OCT 1997)

    (a) Cancellation, as used in this clause, means that the Government 
is canceling its requirements for all supplies or services in program 
years subsequent to that in which notice of cancellation is provided. 
Cancellation shall occur by the date or within the time period specified 
in the Schedule, unless a later date is agreed to, if the Contracting 
Officer (1) notifies the Contractor that funds are not available for 
contract performance for any subsequent program year, or (2) fails to 
notify the Contractor that funds are available for performance of the 
succeeding program year requirement.
    (b) Except for cancellation under this clause or termination under 
the Default clause, any reduction by the Contracting Officer in the 
requirements of this contract shall be considered a termination under 
the Termination for Convenience of the Government clause.
    (c) If cancellation under this clause occurs, the Contractor will be 
paid a cancellation charge not over the cancellation ceiling specified 
in the Schedule as applicable at the time of cancellation.
    (d) The cancellation charge will cover only (1) costs (i) incurred 
by the Contractor and/or subcontractor, (ii) reasonably necessary for 
performance of the contract, and (iii) that would have been equitably 
amortized over the entire multiyear contract period but, because of the 
cancellation, are not so amortized, and (2) a reasonable profit or fee 
on the costs.
    (e) The cancellation charge shall be computed and the claim made for 
it as if the claim were being made under the Termination for Convenience 
of the Government clause of this contract. The Contractor shall submit 
the claim promptly but no later than 1 year from the date (1) of 
notification of the nonavailability of funds, or (2) specified in the 
Schedule by which notification of the availability of additional funds 
for the next succeeding program year is required to be issued, whichever 
is earlier, unless extensions in writing are granted by the Contracting 
Officer.
    (f) The Contractor's claim may include--
    (1) Reasonable nonrecurring costs (see Subpart 15.4 of the Federal 
Acquisition Regulation) which are applicable to and normally would have 
been amortized in all supplies or services which are multiyear 
requirements;
    (2) Allocable portions of the costs of facilities acquired or 
established for the conduct of the work, to the extent that it is 
impracticable for the Contractor to use the facilities in its commercial 
work, and if the costs are not charged to the contract through overhead 
or otherwise depreciated;

[[Page 102]]

    (3) Costs incurred for the assembly, training, and transportation to 
and from the job site of a specialized work force; and
    (4) Costs not amortized solely because the cancellation had 
precluded anticipated benefits of Contractor or subcontractor learning.
    (g) The claim shall not include--
    (1) Labor, material, or other expenses incurred by the Contractor or 
subcontractors for performance of the canceled work;
    (2) Any cost already paid to the Contractor;
    (3) Anticipated profit or unearned fee on the canceled work; or
    (4) For service contracts, the remaining useful commercial life of 
facilities. Useful commercial life means the commercial utility of the 
facilities rather than their physical life with due consideration given 
to such factors as location of facilities, their specialized nature, and 
obsolescence.
    (h) This contract may include an Option clause with the period for 
exercising the option limited to the date in the contract for 
notification that funds are available for the next succeeding program 
year. If so, the Contractor agrees not to include in option quantities 
any costs of a startup or nonrecurring nature that have been fully set 
forth in the contract. The Contractor further agrees that the option 
quantities will reflect only those recurring costs and a reasonable 
profit or fee necessary to furnish the additional option quantities.
    (i) Quantities added to the original contract through the Option 
clause of this contract shall be included in the quantity canceled for 
the purpose of computing allowable cancellation charges.

                             (End of clause)

[61 FR 39207, July 26, 1996, as amended at 62 FR 51271, Sept. 30, 1997]



Sec. 52.217-3  Evaluation Exclusive of Options.

    As prescribed in 17.208(a), insert a provision substantially the 
same as the following in solicitations when the solicitation includes an 
option clause and does not include one of the provisions prescribed in 
17.208 (b) or (c):

               Evaluation Exclusive of Options (ACT 1984)

    The Government will evaluate offers for award purposes by including 
only the price for the basic requirement; i.e., options will not be 
included in the evaluation for award purposes.

                           (End of provision)



Sec. 52.217-4  Evaluation of Option Exercised at Time of Contract Award.

    As prescribed in 17.208(b), insert a provision substantially the 
same as the following:

  Evaluation of Options Exercised at Time of Contract Award (JUN 1988)

    Except when it is determined in accordance with FAR 17.206(b) not to 
be in the Government's best interests, the Government will evaluate the 
total price for the basic requirement together with any option(s) 
exercised at the time of award.

                           (End of provision)

[53 FR 17860, May 18, 1988]



Sec. 52.217-5  Evaluation of Options.

    As prescribed in 17.208(c)(1), insert a provision substantially the 
same as the following:

                    Evaluation of Options (JUL 1990)

    Except when it is determined in accordance with FAR 17.206(b) not to 
be in the Government's best interests, the Government will evaluate 
offers for award purposes by adding the total price for all options to 
the total price for the basic requirement. Evaluation of options will 
not obligate the Government to exercise the option(s).

                           (End of provision)

[53 FR 17860, May 18, 1988, as amended at 55 FR 25532, June 21, 1990]



Sec. 52.217-6  Option for Increased Quantity.

    As prescribed in 17.208(d), insert a clause substantially the same 
as the following:

                Option for Increased Quantity (MAR 1989)

    The Government may increase the quantity of supplies called for in 
the Schedule at the unit price specified. The Contracting Officer may 
exercise the option by written notice to the Contractor within ____ 
[insert in the clause the period of time in which the Contracting 
Officer has to exercise the option]. Delivery of the added items shall 
continue at the same rate as the like items called for under the 
contract, unless the parties otherwise agree.

                             (End of clause)

[54 FR 5058, Jan. 31, 1989]

[[Page 103]]



Sec. 52.217-7  Option for Increased Quantity--Separately Priced Line Item.

    As prescribed in 17.208(e), insert a clause substantially the same 
as the following:

  Option for Increased Quantity--Separately Priced Line Item (MAR 1989)

    The Government may require the delivery of the numbered line item, 
identified in the Schedule as an option item, in the quantity and at the 
price stated in the Schedule. The Contracting Officer may exercise the 
option by written notice to the Contractor within ____ [insert in the 
clause the period of time in which the Contracting Officer has to 
exercise the option]. Delivery of added items shall continue at the same 
rate that like items are called for under the contract, unless the 
parties otherwise agree.

                             (End of clause)

[54 FR 5058, Jan. 31, 1989]



Sec. 52.217-8  Option to Extend Services.

    As prescribed in 17.208(f), insert a clause substantially the same 
as the following:

                  Option to Extend Services (AUG 1989)

    The Government may require continued performance of any services 
within the limits and at the rates specified in the contract. These 
rates may be adjusted only as a result of revisions to prevailing labor 
rates provided by the Secretary of Labor. The option provision may be 
exercised more than once, but the total extention of performance 
hereunder shall not exceed 6 months. The Contracting Officer may 
exercise the option by written notice to the Contractor within the 
period specified in the Schedule.

                             (End of clause)

[54 FR 29283, July 11, 1989]



Sec. 52.217-9  Option to Extend the Term of the Contract.

    As prescribed in 17.208(g), insert a clause substantially the same 
as the following:

          Option to Extend the Term of the Contract (MAR 1989)

    (a) The Government may extend the term of this contract by written 
notice to the Contractor within * * * [insert in the clause the period 
of time in which the Contracting Officer has to exercise the option]; 
provided, that the Government shall give the Contractor a preliminary 
written notice of its intent to extend at least 60 days before the 
contract expires. The preliminary notice does not commit the Government 
to an extension.
    (b) If the Government exercises this option, the extended contract 
shall be considered to include this option provision.
    (c) The total duration of this contract, including the exercise of 
any options under this clause, shall not exceed __ (months) (years).

                             (End of clause)

[54 FR 5058, Jan. 31, 1989]



Sec. 52.218  [Reserved]



Sec. 52.219-1  Small Business Program Representations.

    As prescribed in 19.306(a), insert the following provision:

            Small Business Program Representations (OCT 1998)

    (a)(1) The standard industrial classification (SIC) code for this 
acquisition is __________ (insert SIC code).
    (2) The small business size standard is ________ (insert size 
standard).
    (3) The small business size standard for a concern which submits an 
offer in its own name, other than on a construction or service contract, 
but which proposes to furnish a product which it did not itself 
manufacture, is 500 employees.
    (b) Representations. (1) The offeror represents as part of its offer 
that it {time}  is, {time}  is not a small business concern.
    (2) (Complete only if offeror represented itself as a small business 
concern in paragraph (b)(1) of this provision.) The offeror represents, 
for general statistical purposes, that it {time}  is, {time}  is not, a 
small disadvantaged business concern as defined in 13 CFR 124.1002.
    (3) (Complete only if offeror represented itself as a small business 
concern in paragraph (b)(1) of this provision.) The offeror represents 
as part of its offer that it {time}  is, {time}  is not a women-owned 
small business concern.
    (c) Definitions.
    Small business concern, as used in this provision, means a concern, 
including its affiliates, that is independently owned and operated, not 
dominant in the field of operation in which it is bidding on Government 
contracts, and qualified as a small business under the criteria in 13 
CFR part 121 and the size standard in paragraph (a) of this provision.
    Women-owned small business concern, as used in this provision, means 
a small business concern--
    (1) Which is at least 51 percent owned by one or more women or, in 
the case of any

[[Page 104]]

publicly owned business, at least 51 percent of the stock of which is 
owned by one or more women; and
    (2) Whose management and daily business operations are controlled by 
one or more women.
    (d) Notice. (1) If this solicitation is for supplies and has been 
set aside, in whole or in part, for small business concerns, then the 
clause in this solicitation providing notice of the set-aside contains 
restrictions on the source of the end items to be furnished.
    (2) Under 15 U.S.C. 645(d), any person who misrepresents a firm's 
status as a small or small disadvantaged business concern in order to 
obtain a contract to be awarded under the preference programs 
established pursuant to section 8(a), 8(d), 9, or 15 of the Small 
Business Act or any other provision of Federal law that specifically 
references section 8(d) for a definition of program eligibility, shall--
    (i) Be punished by imposition of fine, imprisonment, or both;
    (ii) Be subject to administrative remedies, including suspension and 
debarment; and
    (iii) Be ineligible for participation in programs conducted under 
the authority of the Act.

                           (End of provision)

    Alternate I (OCT 1998). As prescribed in 19.306(a), add the 
following paragraph (b)(4) to the basic provision:

    (4) (Complete if offeror represented itself as disadvantaged in 
paragraph (b)(2) of this provision). [The offeror shall check the 
category in which its ownership falls]:
    __ Black American.
    __ Hispanic American.
    __ Native American (American Indians, Eskimos, Aleuts, or Native 
Hawaiians).
    __ Asian-Pacific American (persons with origins from Burma, 
Thailand, Malaysia, Indonesia, Singapore, Brunei, Japan, China, Taiwan, 
Laos, Cambodia (Kampuchea), Vietnam, Korea, The Philippines, U.S. Trust 
Territory of the Pacific Islands (Republic of Palau), Republic of the 
Marshall Islands, Federated States of Micronesia, the Commonwealth of 
the Northern Mariana Islands, Guam, Samoa, Macao, Hong Kong, Fiji, 
Tonga, Kiribati, Tuvalu, or Nauru).
    __ Subcontinent Asian (Asian-Indian) American (persons with origins 
from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives 
Islands, or Nepal).
    __ Individual/concern, other than one of the preceding.

[60 FR 48264, Sept. 18, 1995, as amended at 61 FR 67422, Dec. 20, 1996; 
62 FR 238, Jan. 2, 1997; 63 FR 9069, Feb. 23, 1998; 63 FR 35725, June 
30, 1998]



Sec. 52.219-2  Equal Low Bids.

    As prescribed in 19.306(c), insert the following provision:

                        Equal Low Bids (OCT 1995)

    (a) This provision applies to small business concerns only.
    (b) The bidder's status as a labor surplus area (LSA) concern may 
affect entitlement to award in case of tie bids. If the bidder wishes to 
be considered for this priority, the bidder must identify, in the 
following space, the LSA in which the costs to be incurred on account of 
manufacturing or production (by the bidder or the first-tier 
subcontractors) amount to more than 50 percent of the contract price.
_______________________________________________________________________

_______________________________________________________________________
    (c) Failure to identify the labor surplus areas as specified in 
paragraph (b) of this provision will preclude the bidder from receiving 
priority consideration. If the bidder is awarded a contract as a result 
of receiving priority consideration under this provision and would not 
have otherwise received award, the bidder shall perform the contract or 
cause the contract to be performed in accordance with the obligations of 
an LSA concern.

                           (End of provision)

[60 FR 48265, Sept. 18, 1995, as amended at 63 FR 35725, June 30, 1998]



Sec. 52.219-3--52.219-5  [Reserved]



Sec. 52.219-6  Notice of Total Small Business Set-Aside.

    As prescribed in 19.508(c), insert the following clause:

           Notice of Total Small Business Set-Aside (JUL 1996)

    (a) Definition.
    Small business concern, as used in this clause, means a concern, 
including its affiliates, that is independently owned and operated, not 
dominant in the field of operation in which it is bidding on Government 
contracts, and qualified as a small business under the size standards in 
this solicitation.
    (b) General. (1) Offers are solicited only from small business 
concerns. Offers received from concerns that are not small business 
concerns shall be considered nonresponsive and will be rejected.
    (2) Any award resulting from this solicitation will be made to a 
small business concern.
    (c) Agreement. A small business concern submitting an offer in its 
own name agrees to furnish, in performing the contract, only

[[Page 105]]

end items manufactured or produced by small business concerns in the 
United States. The term United States includes its territories and 
possessions, the Commonwealth of Puerto Rico, the Trust Territory of the 
Pacific Islands, and the District of Columbia. If this procurement is 
processed under simplified acquisition procedures and the total amount 
of this contract does not exceed $25,000, a small business concern may 
furnish the product of any domestic firm. This paragraph does not apply 
in connection with construction or service contracts.

                             (End of clause)

    Alternate I (OCT 1995). When the acquisition is for a product in a 
class for which the Small Business Administration has determined that 
there are no small business manufacturers or processors in the Federal 
market in accordance with 19.502-2(c), delete paragraph (c).

[48 FR 42478, Sept. 19, 1983, as amended at 54 FR 25069, June 12, 1989; 
60 FR 48265, Sept. 18, 1995; 61 FR 39209, July 26, 1996]



Sec. 52.219-7  Notice of Partial Small Business Set-Aside.

    As prescribed in 19.508(d), insert the following clause:

          Notice of Partial Small Business Set-Aside (JUL 1996)

    (a) Definitions.
    Small business concern, as used in this clause, means a concern, 
including its affiliates, that is independently owned and operated, not 
dominant in the field of operation in which it is bidding on Government 
contracts, and qualified as a small business under the size standards in 
this solicitation.
    (b) General. (1) A portion of this requirement, identified elsewhere 
in this solicitation, has been set aside for award to one or more small 
business concerns.
    (2) Offers on the non-set-aside portion will be evaluated first and 
award will be made on that portion in accordance with the provisions of 
this solicitation.
    (3) The set-aside portion will be awarded at the highest unit 
price(s) in the contract(s) for the non-set-aside portion, adjusted to 
reflect transportation and other costs appropriate for the selected 
contractor(s).
    (4) The contractor(s) for the set-aside portion will be selected 
from among the small business concerns that submitted responsive offers 
on the non-set-aside portion. Negotiations will be conducted with the 
concern that submitted the lowest responsive offer on the non-set-aside 
portion. If the negotiations are not successful or if only part of the 
set-aside portion is awarded to that concern, negotiations will be 
conducted with the concern that submitted the second-lowest responsive 
offer on the non-set-aside portion. This process will continue until a 
contract or contracts are awarded for the entire set-aside portion.
    (c) Agreement. For the set-aside portion of the acquisition, a small 
business concern submitting an offer in its own name agrees to furnish, 
in performing the contract, only end items manufactured or produced by 
small business concerns in the United States. The term United States 
includes its territories and possessions, the Commonwealth of Puerto 
Rico, the Trust Territory of the Pacific Islands, and the District of 
Columbia. If this procurement is processed under simplified acquisition 
procedures and the total amount of this contract does not exceed 
$25,000, a small business concern may furnish the product of any 
domestic firm. This paragraph does not apply in connection with 
construction or service contracts.

                             (End of clause)

    Alternate I (OCT 1995). When the acquisition is for a product in a 
class for which the Small Business Administration has determined that 
there are no small business manufacturers or processors in the Federal 
market in accordance with 19.502-2(c), delete paragraph (c).

[48 FR 42478, Sept. 19, 1983, as amended at 54 FR 25069, June 12, 1989; 
55 FR 52798, Dec. 21, 1990; 60 FR 48265, Sept. 18, 1995; 61 FR 39209, 
July 26, 1996]



Sec. 52.219-8  Utilization of Small, Small Disadvantaged and Women-Owned Small Business Concerns.

    As prescribed in 19.708(a), insert the following clause:

Utilization of Small, Small Disadvantaged and Women-Owned Small Business 
                           Concerns (JAN 1999)

    (a) It is the policy of the United States that small business 
concerns, small business concerns owned and controlled by socially and 
economically disadvantaged individuals and small business concerns owned 
and controlled by women shall have the maximum practicable opportunity 
to participate in performing contracts let by any Federal agency, 
including contracts and subcontracts for subsystems, assemblies, 
components, and related services for major systems. It is further the 
policy of the United States that its prime contractors establish 
procedures to ensure the timely payment of amounts due pursuant to the 
terms of their subcontracts with small business concerns,

[[Page 106]]

small business concerns owned and controlled by socially and 
economically disadvantaged individuals and small business concerns owned 
and controlled by women.
    (b) The Contractor hereby agrees to carry out this policy in the 
awarding of subcontracts to the fullest extent consistent with efficient 
contract performance. The Contractor further agrees to cooperate in any 
studies or surveys as may be conducted by the United States Small 
Business Administration or the awarding agency of the United States as 
may be necessary to determine the extent of the Contractor's compliance 
with this clause.
    (c) As used in this contract, the term small business concern shall 
mean a small business as defined pursuant to section 3 of the Small 
Business Act and relevant regulations promulgated pursuant thereto. The 
term small business concern owned and controlled by socially and 
economically disadvantaged individuals means an offeror that represents, 
as part of its offer, that--
    (1) It is a small business under the size standard applicable to the 
acquisition;
    (2) It has received certification as a small disadvantaged business 
concern consistent with 13 CFR 124, subpart B;
    (3) No material change in disadvantaged ownership and control has 
occurred since its certification;
    (4) Where the concern is owned by one or more individuals, the net 
worth of each individual upon whom the certification is based does not 
exceed $750,000 after taking into account the applicable exclusions set 
forth at 13 CFR 124.104(c)(2); and
    (5) It is listed, on the date of its representation, on the register 
of small disadvantaged business concerns maintained by the Small 
Business Administration.
    (d) The term small business concern owned and controlled by women 
shall mean a small business concern (1) which is at least 51 percent 
owned by one or more women, or, in the case of any publicly owned 
business, at least 51 percent of the stock of which is owned by one or 
more women, and (2) whose management and daily business operations are 
controlled by one or more women; and
    (e) Contractors acting in good faith may rely on written 
representations by their subcontractors regarding their status as a 
small business concern, a small business concern owned and controlled by 
socially and economically disadvantaged individuals or a small business 
concern owned and controlled by women.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 27563, July 3, 1985; 
51 FR 27116, July 29, 1986; 55 FR 3888, Feb. 5, 1990; 60 FR 48265, Sept. 
18, 1995; 62 FR 40238, July 25, 1997; 63 FR 36124, July 1, 1998]

    Effective Date Note: At 63 FR 36124, July 1, 1998, section 52.219-8 
was amended by revising the clause date from ``(JUN 1997)'' to ``(JAN 
1999)'' and revising paragraph (c), effective Jan. 1, 1998. For the 
convenience of the user, the superseded text is set forth as follows:

Sec. 52.219-8  Utilization of Small, Small Disadvantaged and Women-Owned 
          Small Business Concerns.

                                * * * * *

    (c) As used in this contract, the term small business concern shall 
mean a small business as defined pursuant to section 3 of the Small 
Business Act and relevant regulations promulgated pursuant thereto. The 
term small business concern owned and controlled by socially and 
economically disadvantaged individuals shall mean a small business 
concern (1) which is at least 51 percent unconditionally owned by one or 
more socially and economically disadvantaged individuals; or, in the 
case of any publicly owned business, at least 51 per centum of the stock 
of which is unconditionally owned by one or more socially and 
economically disadvantaged individuals; and (2) whose management and 
daily business operations are controlled by one or more of such 
individuals. This term also means a small business concern that is at 
least 51 percent unconditionally owned by an economically disadvantaged 
Indian tribe or Native Hawaiian Organization, or a publicly owned 
business having at least 51 percent of its stock unconditionally owned 
by one of these entities which has its management and daily business 
controlled by members of an economically disadvantaged Indian tribe or 
Native Hawaiian Organization, and which meets the requirements of 13 CFR 
part 124. The Contractor shall presume that socially and economically 
disadvantaged individuals include Black Americans, Hispanic Americans, 
Native Americans, Asian-Pacific Americans, Subcontinent Asian Americans, 
and other minorities, or any other individual found to be disadvantaged 
by the Administration pursuant to section 8(a) of the Small Business 
Act. The Contractor shall presume that socially and economically 
disadvantaged entities also include Indian Tribes and Native Hawaiian 
Organizations.

                                * * * * *



Sec. 52.219-9  Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan.

    As prescribed in 19.708(b), insert the following clause:

[[Page 107]]

Small, Small Disadvantaged and Women-Owned Small Business Subcontracting 
                             Plan (JAN 1999)

    (a) This clause does not apply to small business concerns.
    (b) Definitions. As used in this clause--
    Commercial item means a product or service that satisfies the 
definition of commercial item in section 2.101 of the Federal 
Acquisition Regulation.
    Commercial plan means a subcontracting plan (including goals) that 
covers the offeror's fiscal year and that applies to the entire 
production of commercial items sold by either the entire company or a 
portion thereof (e.g., division, plant, or product line).
    Individual contract plan means a subcontracting plan that covers the 
entire contract period (including option periods), applies to a specific 
contract, and has goals that are based on the offeror's planned 
subcontracting in support of the specific contract, except that indirect 
costs incurred for common or joint purposes may be allocated on a 
prorated basis to the contract.
    Master plan means a subcontracting plan that contains all the 
required elements of an individual contract plan, except goals, and may 
be incorporated into individual contract plans, provided the master plan 
has been approved.
    Subcontract means any agreement (other than one involving an 
employer-employee relationship) entered into by a Federal Government 
prime Contractor or subcontractor calling for supplies or services 
required for performance of the contract or subcontract.
    (c) The offeror, upon request by the Contracting Officer, shall 
submit and negotiate a subcontracting plan, where applicable, which 
separately addresses subcontracting with small business concerns, with 
small disadvantaged business concerns and with women-owned small 
business concerns. If the offeror is submitting an individual contract 
plan, the plan must separately address subcontracting with small 
business concerns, small disadvantaged business concerns, and women-
owned small business concerns with a separate part for the basic 
contract and separate parts for each option (if any). The plan shall be 
included in and made a part of the resultant contract. The 
subcontracting plan shall be negotiated within the time specified by the 
Contracting Officer. Failure to submit and negotiate the subcontracting 
plan shall make the offeror ineligible for award of a contract.
    (d) The offeror's subcontracting plan shall include the following:
    (1) Goals, expressed in terms of percentages of total planned 
subcontracting dollars, for the use of small business concerns, small 
disadvantaged business concerns and women-owned small business concerns 
as subcontractors. The offeror shall include all subcontracts that 
contribute to contract performance, and may include a proportionate 
share of products and services that are normally allocated as indirect 
costs.
    (2) A statement of--
    (i) Total dollars planned to be subcontracted for an individual 
contract plan; or the offeror's total projected sales, expressed in 
dollars, and the total value of projected subcontracts to support the 
sales for a commercial plan;
    (ii) Total dollars planned to be subcontracted to small business 
concerns;
    (iii) Total dollars planned to be subcontracted to small 
disadvantaged business concerns; and
    (iv) Total dollars planned to be subcontracted to women-owned small 
business concerns.
    (3) A description of the principal types of supplies and services to 
be subcontracted, and an identification of the types planned for 
subcontracting to (i) small business concerns, (ii) small disadvantaged 
business concerns and (iii) women-owned small business concerns.
    (4) A description of the method used to develop the subcontracting 
goals in paragraph (d)(1) of this clause.
    (5) A description of the method used to identify potential sources 
for solicitation purposes (e.g., existing company source lists, the 
Procurement Marketing and Assistance Network (PRONET) of the Small 
Business Administration (SBA), the list of certified small disadvantaged 
business concerns of the SBA, the National Minority Purchasing Council 
Vendor Information Service, the Research and Information Division of the 
Minority Business Development Agency in the Department of Commerce, or 
small, small disadvantaged, and women-owned small business trade 
associations). A firm may rely on the information contained in PRONET as 
an accurate representation of a concern's size and ownership 
characteristics for the purposes of maintaining a small and women-owned 
small business source list. A firm shall rely on the information 
contained in SBA's list of small disadvantaged business concerns as an 
accurate representation of a concern's size and ownership 
characteristics for the purposes of maintaining a small disadvantaged 
business source list. Use of PRONET and/or the SBA list of small 
disadvantaged business concerns as its source lists does not relieve a 
firm of its responsibilities (e.g., outreach, assistance, counseling, 
publicizing subcontracting opportunities) in this clause.
    (6) A statement as to whether or not the offeror included indirect 
costs in establishing subcontracting goals, and a description of the 
method used to determine the proportionate share of indirect costs to be 
incurred with (i) small business concerns, (ii) small

[[Page 108]]

disadvantaged business concerns, and (iii) women-owned small business 
concerns.
    (7) The name of the individual employed by the offeror who will 
administer the offeror's subcontracting program, and a description of 
the duties of the individual.
    (8) A description of the efforts the offeror will make to assure 
that small, small disadvantaged and women-owned small business concerns 
have an equitable opportunity to compete for subcontracts.
    (9) Assurances that the offeror will include the clause in this 
contract entitled ``Utilization of Small, Small Disadvantaged and Women-
Owned Small Business Concerns'' in all subcontracts that offer further 
subcontracting opportunities, and that the offeror will require all 
subcontractors (except small business concerns) that receive 
subcontracts in excess of $500,000 ($1,000,000 for construction of any 
public facility) to adopt a subcontracting plan that complies with the 
requirements of this clause.
    (10) Assurances that the offeror will--
    (i) Cooperate in any studies or surveys as may be required;
    (ii) Submit periodic reports so that the Government can determine 
the extent of compliance by the offeror with the subcontracting plan;
    (iii) Submit Standard Form (SF) 294, Subcontracting Report for 
Individual Contracts, and/or SF 295, Summary Subcontract Report, in 
accordance with the instructions on the forms or as provided in agency 
regulations and in paragraph (j) of this clause; and
    (iv) Ensure that its subcontractors agree to submit SF 294 and SF 
295.
    (11) A description of the types of records that will be maintained 
concerning procedures that have been adopted to comply with the 
requirements and goals in the plan, including establishing source lists; 
and a description of the offeror's efforts to locate small, small 
disadvantaged and women-owned small business concerns and award 
subcontracts to them. The records shall include at least the following 
(on a plant-wide or company-wide basis, unless otherwise indicated):
    (i) Source lists (e.g., PASS), guides, and other data that identify 
small, small disadvantaged and women-owned small business concerns.
    (ii) Organizations contacted in an attempt to locate sources that 
are small, small disadvantaged or women-owned small business concerns.
    (iii) Records on each subcontract solicitation resulting in an award 
of more than $100,000, indicating (A) whether small business concerns 
were solicited and if not, why not, (B) whether small disadvantaged 
business concerns were solicited and if not, why not, (C) whether women-
owned small business concerns were solicited and if not, why not, and 
(D) if applicable, the reason award was not made to a small business 
concern.
    (iv) Records of any outreach efforts to contact (A) trade 
associations, (B) business development organizations, and (C) 
conferences and trade fairs to locate small, small disadvantaged and 
women-owned small business sources.
    (v) Records of internal guidance and encouragement provided to 
buyers through (A) workshops, seminars, training, etc., and (B) 
monitoring performance to evaluate compliance with the program's 
requirements.
    (vi) On a contract-by-contract basis, records to support award data 
submitted by the offeror to the Government, including the name, address, 
and business size of each subcontractor. Contractors having commercial 
plans need not comply with this requirement.
    (e) In order to effectively implement this plan to the extent 
consistent with efficient contract performance, the Contractor shall 
perform the following functions:
    (1) Assist small, small disadvantaged and women-owned small business 
concerns by arranging solicitations, time for the preparation of bids, 
quantities, specifications, and delivery schedules so as to facilitate 
the participation by such concerns. Where the Contractor's lists of 
potential small, small disadvantaged and women-owned small business 
subcontractors are excessively long, reasonable effort shall be made to 
give all such small business concerns an opportunity to compete over a 
period of time.
    (2) Provide adequate and timely consideration of the potentialities 
of small, small disadvantaged and women-owned small business concerns in 
all ``make-or-buy'' decisions.
    (3) Counsel and discuss subcontracting opportunities with 
representatives of small, small disadvantaged and women-owned small 
business firms.
    (4) Provide notice to subcontractors concerning penalties and 
remedies for misrepresentations of business status as small, small 
disadvantaged or women-owned small business for the purpose of obtaining 
a subcontract that is to be included as part or all of a goal contained 
in the Contractor's subcontracting plan.
    (f) A master plan on a plant or division-wide basis that contains 
all the elements required by paragraph (d) of this clause, except goals, 
may be incorporated by reference as a part of the subcontracting plan 
required of the offeror by this clause; provided--
    (1) The master plan has been approved,
    (2) The offeror ensures that the master plan is updated as necessary 
and provides copies of the approved master plan, including evidence of 
its approval, to the Contracting Officer, and

[[Page 109]]

    (3) Goals and any deviations from the master plan deemed necessary 
by the Contracting Officer to satisfy the requirements of this contract 
are set forth in the individual subcontracting plan.
    (g) A commercial plan is the preferred type of subcontracting plan 
for contractors furnishing commercial items. The commercial plan shall 
relate to the offeror's planned subcontracting generally, for both 
commercial and Government business, rather than solely to the Government 
contract. Commercial plans are also preferred for subcontractors that 
provide commercial items under a prime contract, whether or not the 
prime contractor is supplying a commercial item.
    (h) Prior compliance of the offeror with other such subcontracting 
plans under previous contracts will be considered by the Contracting 
Officer in determining the responsibility of the offeror for award of 
the contract.
    (i) The failure of the Contractor or subcontractor to comply in good 
faith with (1) the clause of this contract entitled ``Utilization Of 
Small, Small Disadvantaged and Women-Owned Small Business Concerns,'' or 
(2) an approved plan required by this clause, shall be a material breach 
of the contract.
    (j) The Contractor shall submit the following reports:
    (1) Standard Form 294, Subcontracting Report for Individual 
Contracts. This report shall be submitted to the Contracting Officer 
semiannually and at contract completion. The report covers subcontract 
award data related to this contract. This report is not required for 
commercial plans.
    (2) Standard Form 295, Summary Subcontract Report. This report 
encompasses all the contracts with the awarding agency. It must be 
submitted semi-annually for contracts with the Department of Defense and 
annually for contracts with civilian agencies. If the reporting activity 
is covered by a commercial plan, the reporting activity must report 
annually all subcontract awards under that plan. All reports submitted 
at the close of each fiscal year (both individual and commercial plans) 
shall include a breakout, in the Contractor's format, of subcontract 
awards, in whole dollars, to small disadvantaged business concerns by 
Standard Industrial Classification (SIC) Major Group. For a commercial 
plan, the Contractor may obtain from each of its subcontractors a 
predominant SIC Major Group and report all awards to that subcontractor 
under its predominant SIC Major Group.

                             (End of clause)

    Alternate I (OCT 1995). When contracting by sealed bidding rather 
than by negotiation, substitute the following paragraph (c) for 
paragraph (c) of the basic clause:

    (c) The apparent low bidder, upon request by the Contracting 
Officer, shall submit a subcontracting plan, where applicable, which 
separately addresses subcontracting with small business concerns, with 
small disadvantaged business concerns and with women-owned small 
business concerns. If the bidder is submitting an individual contract 
plan, the plan must separately address subcontracting with small 
business concerns, small disadvantaged business concerns and women-owned 
small business concerns, with a separate part for the basic contract and 
separate parts for each option (if any). The plan shall be included in 
and made a part of the resultant contract. The subcontracting plan shall 
be submitted within the time specified by the Contracting Officer. 
Failure to submit the subcontracting plan shall make the bidder 
ineligible for the award of a contract.

    Alternate II (MAR 1996). As prescribed in 19.708(b)(1), substitute 
the following paragraph (c) for paragraph (c) of the basic clause:

    (c) Proposals submitted in response to this solicitation shall 
include a subcontracting plan, which separately addresses subcontracting 
with small business concerns, small disadvantaged business concerns and 
women-owned small business concerns. If the offeror is submitting an 
individual contract plan, the plan must separately address 
subcontracting with small business concerns, small disadvantaged 
business concerns and women-owned small business concerns with a 
separate part for the basic contract and separate parts for each option 
(if any). The plan shall be included in and made a part of the resultant 
contract. The subcontracting plan shall be negotiated within the time 
specified by the Contracting Officer. Failure to submit and negotiate a 
subcontracting plan shall make the offeror ineligible for award of a 
contract.

[48 FR 42478, Sept. 19, 1983, as amended at 52 FR 19805, May 27, 1987; 
54 FR 29283, July 11, 1989; 54 FR 49296, Nov. 30, 1989; 55 FR 3888, Feb. 
5, 1990; 55 FR 52798, Dec. 21, 1990; 60 FR 48265, Sept. 18, 1995; 61 FR 
2639, Jan. 26, 1996; 61 FR 31643, June 20, 1996; 63 FR 34067, June 22, 
1998; 63 FR 36124, July 1, 1998]

    Effective Date Note: At 63 FR 36124, July 1, 1998, section 52.219-9 
was amended by revising the clause date from ``(AUG 1998)'' to ``(JAN 
1999)'', revising paragraphs (d)(5) and (d)(10)(iii); and adding 
paragraph (j), effective Jan. 1, 1999. For the convenience of the user, 
the superseded text is set forth as follows:

[[Page 110]]

Sec. 52.219-9  Small, Small Disadvantaged and Women-Owned Small Business 
          Subcontracting Plan.

                                * * * * *

    (d) * * *
    (5) A description of the method used to identify potential sources 
for solicitation purposes (e.g., existing company source lists, the 
Procurement Automated Source System (PASS) of the Small Business 
Administration, the National Minority Purchasing Council Vendor 
Information Service, the Research and Information Division of the 
Minority Business Development Agency in the Department of Commerce, or 
small, small disadvantaged and women-owned small business concerns trade 
associations). A firm may rely on the information contained in PASS as 
an accurate representation of a concern's size and ownership 
characteristics for purposes of maintaining a small business source 
list. A firm may rely on PASS as its small business source list. Use of 
the PASS as its source list does not relieve a firm of its 
responsibilities (e.g., outreach, assistance, counseling, publicizing 
subcontracting opportunities) in this clause.

                                * * * * *

    (10) * * *
    (iii) Submit Standard Form (SF) 294, Subcontracting Report for 
Individual Contracts, and/or SF 295, Summary Subcontract Report, 
following the instructions on the forms or as provided in agency 
regulations; and

                                * * * * *



Sec. 52.219-10  Incentive Subcontracting Program.

    As prescribed in 19.708(c)(1), insert the following clause:

               Incentive Subcontracting Program (JAN 1999)

    (a) Of the total dollars it plans to spend under subcontracts, the 
Contractor has committed itself in its subcontracting plan to try to 
award a certain percentage to small business concerns, a certain 
percentage to small disadvantaged business concerns and a certain 
percentage to women-owned small business concerns.
    (b) If the Contractor exceeds its subcontracting goals for small 
busienss concerns and women-owned small business concerns in performing 
this contract, it will receive __ [insert the appropriate number between 
0 and 10] percent of the dollars in excess of each goal in the plan, 
unless the Contracting Officer determines that the excess was not due to 
the Contractor's efforts (e.g., a subcontractor cost overrun caused the 
actual subcontract amount to exceed that estimated in the subcontracting 
plan, or the award of subcontracts that had been planned but had not 
been disclosed in the subcontracting plan during contract negotiations). 
Determinations made under this paragraph are not subject to the Disputes 
clause.
    (c) If this is a cost-plus-fixed-fee contract, the sum of the fixed 
fee and the incentive fee earned under this contract may not exceed the 
limitations in 15.404-4 of the Federal Acquisition Regulation.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 60 FR 48266, 48267, Sept. 
18, 1995; 62 FR 51271, Sept. 30, 1997; 63 FR 36125, July 1, 1998]

    Effective Date Note: At 63 FR 36125, July 1, 1998, section 52.219-10 
was amended by revising the clause date from ``(OCT 1997)'' to ``(Jan. 
1999)'' and in the first sentence of paragraph (b) of the clause by 
inserting ``for small business concerns and women-owned small business 
concerns'' after the word ``goals'', effective Jan. 1, 1999.



Sec. 52.219-11  Special 8(a) Contract Conditions.

    As prescribed in 19.811-3(a), insert the following clause:

               Special 8(a) Contract Conditions (FEB 1990)

    The Small Business Administration (SBA) agrees to the following:
    (a) To furnish the supplies or services set forth in this contract 
according to the specifications and the terms and conditions hereof by 
subcontracting with an eligible concern pursuant to the provisions of 
section 8(a) of the Small Business Act, as amended (15 U.S.C. 637(a)).
    (b) That in the event SBA does not award a subcontract for all or a 
part of the work hereunder, this contract may be terminated either in 
whole or in part without cost to either party.
    (c) Except for novation agreements and advance payments, delegates 
to the ____ [insert name of contracting agency] the responsibility for 
administering the subcontract to be awarded hereunder with complete 
authority to take any action on behalf of the Government under the terms 
and conditions of the subcontract; provided, however, that the ____ 
[insert name of contracting agency] shall give advance notice to the SBA 
before it issues a final notice terminating the right of a subcontractor 
to proceed with further performance, either in whole or in part, under 
the subcontract for default or for the convenience of the Government.
    (d) That payments to be made under any subcontract awarded under 
this contract will

[[Page 111]]

be made directly to the subcontractor by the ____ [insert name of 
contracting agency].
    (e) That the subcontractor awarded a subcontract hereunder shall 
have the right of appeal from decisions of the Contracting Officer 
cognizable under the Disputes clause of said subcontract.
    (f) To notify the [insert name of contracting agency] Contracting 
Officer immediately upon notification by the subcontractor that the 
owner or owners upon whom 8(a) eligibility was based plan to relinquish 
ownership or control of the concern.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 54 FR 46009, Oct. 31, 1989; 
55 FR 3888, Feb. 5, 1990; 61 FR 67422, Dec. 20, 1996]



Sec. 52.219-12  Special 8(a) Subcontract Conditions.

    As prescribed in 19.811-3(b), insert the following clause:

             Special 8(a) Subcontract Conditions (FEB 1990)

    (a) The Small Business Administration (SBA) has entered into 
Contract No. ____ [insert number of contract] with the ____ [insert name 
of contracting agency] to furnish the supplies or services as described 
therein. A copy of the contract is attached hereto and made a part 
hereof.
    (b) The ____ [insert name of subcontractor], hereafter referred to 
as the subcontractor, agrees and acknowledges as follows:
    (1) That it will, for and on behalf of the SBA, fulfill and perform 
all of the requirements of Contract No. ____ [insert number of contract] 
for the consideration stated therein and that it has read and is 
familiar with each and every part of the contract.
    (2) That the SBA has delegated responsibility, except for novation 
agreements and advance payments, for the administration of this 
subcontract to the ____ [insert name of contracting agency] with 
complete authority to take any action on behalf of the Government under 
the terms and conditions of this contract.
    (3) That it will not subcontract the performance of any of the 
requirements of this subcontract to any lower tier subcontractor without 
the prior written approval of the SBA and the designated Contracting 
Officer of the ____ [insert name of contracting agency].
    (4) That is will notify the [insert name of contracting agency] 
Contracting Officer in writing immediately upon entering an agreement 
(either oral or written) to transfer all or part of its stock or other 
ownership interest to any other party.
    (c) Payments, including any progress payments under this 
subcontract, will be made directly to the subcontractor by the ____ 
[insert name of contracting agency].

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 54 FR 34757, Aug. 21, 1989; 
54 FR 46009, Oct. 31, 1989; 55 FR 3889, Feb. 5, 1990; 55 FR 38518, Sept. 
18, 1990; 61 FR 67422, Dec. 20, 1996]



Sec. 52.219-13  [Reserved]



Sec. 52.219-14  Limitations on Subcontracting.

    As prescribed in 19.508(e), insert the following clause:

                Limitations on Subcontracting (DEC 1996)

    (a) This clause does not apply to the unrestricted portion of a 
partial set-aside.
    (b) By submission of an offer and execution of a contract, the 
Offeror/Contractor agrees that in performance of the contract in the 
case of a contract for--
    (1) Services (except construction). At least 50 percent of the cost 
of contract performance incurred for personnel shall be expended for 
employees of the concern.
    (2) Supplies (other than procurement from a nonmanufacturer of such 
supplies). The concern shall perform work for at least 50 percent of the 
cost of manufacturing the supplies, not including the cost of materials.
    (3) General construction. The concern will perform at least 15 
percent of the cost of the contract, not including the cost of 
materials, with its own employees.
    (4) Construction by special trade contractors. The concern will 
perform at least 25 percent of the cost of the contract, not including 
the cost of materials, with its own employees.

                             (End of clause)

[52 FR 38190, Oct. 14, 1988, as amended at 55 FR 52798, Dec. 21, 1990; 
61 FR 67411, Dec. 20, 1996]



Sec. 52.219-15  [Reserved]



Sec. 52.219-16  Liquidated Damages--Subcontracting Plan.

    As prescribed in 19.708(b)(2), insert the following clause:

           Liquidated Damages--Subcontracting Plan (AUG 1998)

    (a) Failure to make a good faith effort to comply with the 
subcontracting plan, as used in this clause, means a willful or 
intentional failure to perform in accordance with the requirements of 
the subcontracting plan approved under the clause in this contract 
entitled ``Small, Small Disadvantaged and

[[Page 112]]

Women-Owned Small Business Subcontracting Plan,'' or willful or 
intentional action to frustrate the plan.
    (b) Performance shall be measured by applying the percentage goals 
to the total actual subcontracting dollars or, if a commercial plan is 
involved, to the pro rata share of actual subcontracting dollars 
attributable to Government contracts covered by the commercial plan. If, 
at contract completion or, in the case of a commercial plan, at the 
close of the fiscal year for which the plan is applicable, the 
Contractor has failed to meet its subcontracting goals and the 
Contracting Officer decides in accordance with paragraph (c) of this 
clause that the Contractor failed to make a good faith effort to comply 
with its subcontracting plan, established in accordance with the clause 
in this contract entitled ``Small, Small Disadvantaged and Women-Owned 
Small Business Subcontracting Plan,'' the Contractor shall pay the 
Government liquidated damages in an amount stated. The amount of 
probable damages attributable to the Contractor's failure to comply 
shall be an amount equal to the actual dollar amount by which the 
Contractor failed to achieve each subcontract goal.
    (c) Before the Contracting Officer makes a final decision that the 
Contractor has failed to make such good faith effort, the Contracting 
Officer shall give the Contractor written notice specifying the failure 
and permitting the Contractor to demonstrate what good faith efforts 
have been made and to discuss the matter. Failure to respond to the 
notice may be taken as an admission that no valid explanation exists. 
If, after consideration of all the pertinent data, the Contracting 
Officer finds that the Contractor failed to make a good faith effort to 
comply with the subcontracting plan, the Contracting Officer shall issue 
a final decision to that effect and require that the Contractor pay the 
Government liquidated damages as provided in paragraph (b) of this 
clause.
    (d) With respect to commercial plans, the Contracting Officer who 
approved the plan will perform the functions of the Contracting Officer 
under this clause on behalf of all agencies with contracts covered by 
the commercial plan.
    (e) The Contractor shall have the right of appeal, under the clause 
in this contract entitled Disputes, from any final decision of the 
Contracting Officer.
    (f) Liquidated damages shall be in addition to any other remedies 
that the Government may have.

                             (End of clause)

[54 FR 30710, July 21, 1989, as amended at 60 FR 48267, Sept. 18, 1995; 
63 FR 34068, June 22, 1998]



Sec. 52.219-17  Section 8(a) Award.

    As prescribed in 19.811-3(c), insert the following clause:

                      Section 8(a) Award (DEC 1996)

    (a) By execution of a contract, the Small Business Administration 
(SBA) agrees to the following:
    (1) To furnish the supplies or services set forth in the contract 
according to the specifications and the terms and conditions by 
subcontracting with the Offeror who has been determined an eligible 
concern pursuant to the provisions of section 8(a) of the Small Business 
Act, as amended (15 U.S.C. 637(a)).
    (2) Except for novation agreements and advance payments, delegates 
to the ____ (insert name of contracting activity) the responsibility for 
administering the contract with complete authority to take any action on 
behalf of the Government under the terms and conditions of the contract; 
provided, however that the contracting agency shall give advance notice 
to the SBA before it issues a final notice terminating the right of the 
subcontractor to proceed with further performance, either in whole or in 
part, under the contract.
    (3) That payments to be made under the contract will be made 
directly to the subcontractor by the contracting activity.
    (4) To notify the [insert name of contracting agency] Contracting 
Officer immediately upon notification by the subcontractor that the 
owner or owners upon whom 8(a) eligibility was based plan to relinquish 
ownership or control of the concern.
    (5) That the subcontractor awarded a subcontract hereunder shall 
have the right of appeal from decisions of the cognizant Contracting 
Officer under the ``Disputes'' clause of the subcontract.
    (b) The offeror/subcontractor agrees and acknowledges that it will, 
for and on behalf of the SBA, fulfill and perform all of the 
requirements of the contract.
    (c) The offeror/subcontractor agrees that it will not subcontract 
the performance of any of the requirements of this subcontract to any 
lower tier subcontractor without the prior written approval of the SBA 
and the cognizant Contracting Officer of the ______ [insert name of 
contracting agency].

                             (End of clause)

[54 FR 46009, Oct. 31, 1989, as amended at 55 FR 3889, Feb. 5, 1990; 61 
FR 67422, Dec. 20, 1996]



Sec. 52.219-18  Notification of Competition Limited to Eligible 8(a) Concerns.

    As prescribed in 19.811-3(d), insert the following clause:

[[Page 113]]

Notification of Competition Limited to Eligible 8(a) Concerns (JAN 1997)

    (a) Offers are solicited only from small business concerns expressly 
certified by the Small Business Administration (SBA) for participation 
in the SBA's 8(a) Program and which meet the following criteria at the 
time of submission of offer--
    (1) SIC code ______*______ is specifically included in the Offeror's 
approved business plan;
    (2) The Offeror is in conformance with the 8(a) support limitation 
set forth in its approved business plan; and
    (3) The Offeror is in conformance with the Business Activity Targets 
set forth in its approved business plan or any remedial action directed 
by the SBA.
    (b) By submission of its offer, the Offeror represents that it meets 
all of the criteria set forth in paragraph (a) of this clause.
    (c) Any award resulting from this solicitation will be made to the 
Small Business Administration, which will subcontract performance to the 
successful 8(a) offeror selected through the evaluation criteria set 
forth in this solicitation.
    (d)(1) Agreement. A small business concern submitting an offer in 
its own name agrees to furnish, in performing the contract, only end 
items manufactured or produced by small business concerns in the United 
States. The term United States includes its territories and possessions, 
the Commonwealth of Puerto Rico, the Trust Territory of the Pacific 
Islands, and the District of Columbia. If this procurement is processed 
under simplified acquisition procedures and the total amount of this 
contract does not exceed $25,000, a small business concern may furnish 
the product of any domestic firm. This subparagraph does not apply in 
connection with construction or service contracts.
    (2) The [insert name of SBA's contractor] will notify the [insert 
name of contracting agency] Contracting Officer in writing immediately 
upon entering an agreement (either oral or written) to transfer all or 
part of its stock or other ownership interest to any other party.
(*Insert SIC code assigned to the acquisition by the contracting 
activity.)

                             (End of clause)

    Alternate I (NOV 1989). If the competition is to be limited to 8(a) 
concerns within one or more specific SBA regions or districts, add the 
following subparagraph (a)(4) to paragraph (a) of the clause:

    (4) The offeror's approved business plan is on the file and serviced 
by __________* __________ (*Contracting Officer completes by inserting 
the appropriate SBA District and/or Regional Office(s) as identified by 
the SBA).

    Alternate II (DEC 1996). When the acquisition is for a product in a 
class for which the Small Business Administration has determined that 
there are no small business manufacturers or processors in the Federal 
market in accordance with 19.502-2(c), delete subparagraph (d)(1).

[54 FR 46009, Oct. 31, 1989; 54 FR 48105, Nov. 21, 1989, as amended at 
55 FR 3889, Feb. 5, 1990; 55 FR 25532, June 21, 1990; 55 FR 38518, Sept. 
18, 1990; 60 FR 48267, Sept. 18, 1995; 61 FR 39209, July 26, 1996; 61 FR 
67422, Dec. 20, 1996; 62 FR 238, Jan. 2, 1997; 62 FR 12720, Mar. 17, 
1997]



Sec. 52.219-19  Small Business Concern Representation for the Small Business Competitiveness Demonstration Program.

    As prescribed in 19.1007(a), insert the following provision:

      Small Business Concern Representation for the Small Business 
            Competitiveness Demonstration Program (JAN 1997)

    (a) Definition.
    Emerging small business as used in this solicitation, means a small 
business concern whose size is no greater than 50 percent of the 
numerical size standard applicable to the standard industrial 
classification code assigned to a contracting opportunity.
    (b) [Complete only if the Offeror has represented itself under the 
provision at 52.219-1 as a small business concern under the size 
standards of this solicitation.]
    The Offeror {time}  is, {time}  is not an emerging small business.
    (c) (Complete only if the Offeror is a small business or an emerging 
small business, indicating its size range.)
    Offeror's number of employees for the past 12 months (check this 
column if size standard stated in solicitation is expressed in terms of 
number of employees) or Offeror's average annual gross revenue for the 
last 3 fiscal years (check this column if size standard stated in 
solicitation is expressed in terms of annual receipts). (Check one of 
the following.)

 
           No. of employees                Avg. annual gross revenues
 
__50 or fewer                           __$1 million or less
__51-100                                __$1,000,001-$2 million
__101-250                               __$2,000,001-$3.5 million
__251-500                               __$3,500,001-$5 million
__501-750                               __$5,000,001-$10 million
__751-1,000                             __$10,000,001-$17 million
__ Over 1,000                           __ Over $17 million
 

                           (End of provision)

[55 FR 52798, Dec. 21, 1990, as amended at 56 FR 29138, June 25, 1991; 
62 FR 238, Jan. 2, 1997]

[[Page 114]]



Sec. 52.219-20  Notice of Emerging Small Business Set-Aside.

    As prescribed in 19.1007(b), insert the following provision:

         Notice of Emerging Small Business Set-Aside (JAN 1991)

    Offers or quotations under this acquisition are solicited from 
emerging small business concerns only. Offers that are not from an 
emerging small business shall not be considered and shall be rejected.

                           (End of provision)

[55 FR 52799, Dec. 21, 1990]



Sec. 52.219-21  Small Business Size Representation for Targeted Industry Categories under the Small Business Competitiveness Demonstration Program.

    As prescribed in 19.1007(c), insert the following provision:

  Small Business Size Representation for Targeted Industry Categories 
  Under the Small Business Competitiveness Demonstration Program (JAN 
                                  1997)

    (Complete only if the Offeror has represented itself under the 
provision at 52.219-1 as a small business concern under the size 
standards of this solicitation.)
    Offeror represents as follows:
    Offeror's number of employees for the past 12 months (check this 
column if size standard stated in solicitation is expressed in terms of 
number of employees) or Offeror's average annual gross revenue for the 
last 3 fiscal years (check this column if size standard stated in 
solicitation is expressed in terms of annual receipts). (Check one of 
the following.)

 
           No. of employees                Avg. annual gross revenues
 
__50 or fewer                           __$1 million or less
__51-100                                __$1,000,001-$2 million
__101-250                               __$2,000,001-$3.5 million
__251-500                               __$3,500,001-$5 million
__501-750                               __$5,000,001-$10 million
__751-1,000                             __$10,000,001-$17 million
__ Over 1,000                           __ Over $17 million
 

                           (End of provision)

[55 FR 52799, Dec. 21, 1990, as amended at 56 FR 29138, June 25, 1991; 
62 FR 238, Jan. 2, 1997]



Sec. 52.219-22  Small Disadvantaged Business Status.

    As prescribed in 19.306(b), insert the following provision:

             Small Disadvantaged Business Status (OCT 1998)

    (a) General. This provision is used to assess an offeror's small 
disadvantaged business status for the purpose of obtaining a benefit on 
this solicitation. Status as a small business and status as a small 
disadvantaged business for general statistical purposes is covered by 
the provision at FAR 52.219-1, Small Business Program Representation.
    (b) Representations.
    (1) General. The offeror represents, as part of its offer, that it 
is a small business under the size standard applicable to this 
acquisition; and either--
    {time}  (i) It has received certification by the Small Business 
Administration as a small disadvantaged business concern consistent with 
13 CFR 124, Subpart B; and
    (A) No material change in disadvantaged ownership and control has 
occurred since its certification;
    (B) Where the concern is owned by one or more disadvantaged 
individuals, the net worth of each individual upon whom the 
certification is based does not exceed $750,000 after taking into 
account the applicable exclusions set forth at 13 CFR 124.104(c)(2); and
    (C) It is listed, on the date of this representation, on the 
register of small disadvantaged business concerns maintained by the 
Small Business Administration; or
    {time}  (ii) It has submitted a completed application to the Small 
Business Administration or a Private Certifier to be certified as a 
small disadvantaged business concern in accordance with 13 CFR 124, 
Subpart B, and a decision on that application is pending, and that no 
material change in disadvantaged ownership and control has occurred 
since its application was submitted.
    (2){time} For Joint Ventures. The offeror represents, as part of its 
offer, that it is a joint venture that complies with the requirements at 
13 CFR 124.1002(f) and that the representation in paragraph (b)(1) of 
this provision is accurate for the small disadvantaged business concern 
that is participating in the joint venture. [The offeror shall enter the 
name of the small disadvantaged business concern that is participating 
in the joint venture: ____________.]
    (c) Penalties and Remedies. Anyone who misrepresents any aspects of 
the disadvantaged status of a concern for the purposes of securing a 
contract or subcontract shall:
    (1) Be punished by imposition of a fine, imprisonment, or both;
    (2) Be subject to administrative remedies, including suspension and 
debarment; and
    (3) Be ineligible for participation in programs conducted under the 
authority of the Small Business Act.

[[Page 115]]

                           (End of provision)

    Alternate I (OCT 1998). As prescribed in 19.306(b), add the 
following paragraph (b)(3) to the basic provision:

    (3) Address. The offeror represents that its address __is, __is not 
in a region for which a small disadvantaged business procurement 
mechanism is authorized and its address has not changed since its 
certification as a small disadvantaged business concern or submission of 
its application for certification. The list of authorized small 
disadvantaged business procurement mechanisms and regions is posted at 
http://www.arnet.gov/References/sdbadjustments.htm. The offeror shall 
use the list in effect on the date of this solicitation. ``Address,'' as 
used in this provision, means the address of the offeror as listed on 
the Small Business Administrations register of small disadvantaged 
business concerns or the address on the completed application that the 
concern has submitted to the Small Business Administration or a Private 
Certifier in accordance with 13 CFR part 124, subpart B. For joint 
ventures, ``address'' refers to the address of the small disadvantaged 
business concern that is participating in the joint venture.

[63 FR 35725, June 30, 1998, as amended at 63 FR 52427, Sept. 30, 1998]



Sec. 52.219-23  Notice of Price Evaluation Adjustment for Small Disadvantaged Business Concerns.

    As prescribed in 19.1104, insert the following clause:

 Notice of Price Evaluation Adjustment for Small Disadvantaged Business 
                           Concerns (OCT 1998)

    (a) Definitions. As used in this clause--
    Small disadvantaged business concern means an offeror that 
represents, as part of its offer, that it is a small business under the 
size standard applicable to this acquisition; and either--
    (1) It has received certification by the Small Business 
Administration as a small disadvantaged business concern consistent with 
13 CFR 124, Subpart B; and
    (i) No material change in disadvantaged ownership and control has 
occurred since its certification;
    (ii) Where the concern is owned by one or more disadvantaged 
individuals, the net worth of each individual upon whom the 
certification is based does not exceed $750,000 after taking into 
account the applicable exclusions set forth at 13 CFR 124.104(c)(2); and
    (iii) It is listed, on the date of its representation, on the 
register of small disadvantaged business concerns maintained by the 
Small Business Administration;
    (2) It has submitted a completed application to the Small Business 
Administration or a Private Certifier to be certified as a small 
disadvantaged business concern in accordance with 13 CFR 124, Subpart B, 
and a decision on that application is pending, and that no material 
change in disadvantaged ownership and control has occurred since its 
application was submitted. In this case, in order to receive the benefit 
of a price evaluation adjustment, an offeror must receive certification 
as a small disadvantaged business concern by the Small Business 
Administration prior to contract award; or
    (3) Is a joint venture as defined in 13 CFR 124.1002(f).
    Historically black college or university means an institution 
determined by the Secretary of Education to meet the requirements of 34 
CFR 608.2. For the Department of Defense (DoD), the National Aeronautics 
and Space Administration (NASA), and the Coast Guard, the term also 
includes any nonprofit research institution that was an integral part of 
such a college or university before November 14, 1986.
    Minority institution means an institution of higher education 
meeting the requirements of Section 1046(3) of the Higher Education Act 
of 1965 (20 U.S.C. 1135d-5(3)) which, for purposes of this clause, 
includes a Hispanic-serving institution of higher education as defined 
in Section 316(b)(1) of the Act (20 U.S.C. 1059c(b)(1)).
    United States means the United States, its territories and 
possessions, the Commonwealth of Puerto Rico, the U.S. Trust Territory 
of the Pacific Islands, and the District of Columbia.
    (b) Evaluation adjustment. (1) Offers will be evaluated by adding a 
factor of ____ [percentage to be inserted by the contracting officer] 
percent to the price of all offers, except--
    (i) Offers from small disadvantaged business concerns that have not 
waived the adjustment;
    (ii) For DOD, NASA, and Coast Guard acquisitions, otherwise 
successful offers from historically black colleges or universities or 
minority institutions;
    (iii) Otherwise successful offers of eligible products under the 
Trade Agreements Act when the dollar threshold for application of the 
Act is equaled or exceeded (see section 25.402 of the Federal 
Acquisition Regulation (FAR));
    (iv) Otherwise successful offers where application of the factor 
would be inconsistent with a Memorandum of Understanding or other 
international agreement with a foreign government; and
    (v) For DOD acquisitions, otherwise successful offers of qualifying 
country end products (see sections 225.000-70 and 252.225-7001 of the 
Defense FAR Supplement).

[[Page 116]]

    (2) The factor shall be applied on a line item basis or to any group 
of items on which award may be made. Other evaluation factors described 
in the solicitation shall be applied before application of the factor. 
The factor may not be applied if using the adjustment would cause the 
contract award to be made at a price that exceeds the fair market price 
by more than the factor in paragraph (b)(1) of this clause.
    (c) Waiver of evaluation adjustment. A small disadvantaged business 
concern may elect to waive the adjustment, in which case the factor will 
be added to its offer for evaluation purposes. The agreements in 
paragraph (d) of this clause do not apply to offers that waive the 
adjustment.
    __ Offeror elects to waive the adjustment.
    (d) Agreements. (1) A small disadvantaged business concern, that did 
not waive the adjustment, agrees that in performance of the contract, in 
the case of a contract for--
    (i) Services, except construction, at least 50 percent of the cost 
of personnel for contract performance will be spent for employees of the 
concern;
    (ii) Supplies (other than procurement from a nonmanufacturer of such 
supplies), at least 50 percent of the cost of manufacturing, excluding 
the cost of materials, will be performed by the concern;
    (iii) General construction, at least 15 percent of the cost of the 
contract, excluding the cost of materials, will be performed by 
employees of the concern; or
    (iv) Construction by special trade contractors, at least 25 percent 
of the cost of the contract, excluding the cost of materials, will be 
performed by employees of the concern.
    (2) A small disadvantaged business concern submitting an offer in 
its own name agrees to furnish in performing this contract only end 
items manufactured or produced by small disadvantaged business concerns 
in the United States. This paragraph does not apply in connection with 
construction or service contracts.

                             (End of clause)

    Alternate I (OCT 1998). As prescribed in 19.1104, substitute the 
following paragraph (d)(2) for paragraph (d)(2) of the basic clause:

    (2) A small disadvantaged business concern submitting an offer in 
its own name agrees to furnish in performing this contract only end 
items manufactured or produced by small business concerns in the United 
States. This paragraph does not apply in connection with construction or 
service contracts.

    Alternate II (Oct 1998). As prescribed in 19.1104, substitute the 
following paragraph (b)(i) for paragraph (b)(i) of the basic clause:

    (i) Offers from small disadvantaged business concerns, that have not 
waived the adjustment, whose address is in a region for which an 
evaluation adjustment is authorized;

[63 FR 35725, June 30, 1998, as amended at 63 FR 52427, Sept. 30, 1998]



Sec. 52.219-24  Small Disadvantaged Business Participation Program--Targets.

    As prescribed in 19.1204(a), insert a provision substantially the 
same as the following:

 Small Disadvantaged Business Participation Program--Targets (JAN 1999)

    (a) This solicitation contains a source selection factor or 
subfactor related to the participation of small disadvantaged business 
(SDB) concerns in the contract. Credit under that evaluation factor or 
subfactor is not available to an SDB concern that qualifies for a price 
evaluation adjustment under the clause at FAR 52.219-23, Notice of Price 
Evaluation Adjustment for Small Disadvantaged Business Concerns, unless 
the SDB concern specifically waives the price evaluation adjustment.
    (b) In order to receive credit under the source selection factor or 
subfactor, the offeror must provide, with its offer, targets, expressed 
as dollars and percentages of total contract value, for SDB 
participation in any of the Standard Industrial Classification (SIC) 
Major Groups as determined by the Department of Commerce. The targets 
may provide for participation by a prime contractor, joint venture 
partner, teaming arrangement member, or subcontractor; however, the 
targets for subcontractors must be listed separately.

                           (End of provision)

[63 FR 36125, July 1, 1998]

    Effective Date Note: At 63 FR 36125, July 1, 1998, section 52.219-24 
was added, effective Jan. 1, 1999.



Sec. 52.219-25  Small Disadvantaged Business Participation Program--Disadvantaged Status and Reporting.

    As prescribed in 19.1204(b), insert the following clause:

Small Disadvantaged Business Participation Program--Disadvantaged Status 
                        and Reporting (JAN 1999)

    (a) Disadvantaged status for joint venture partners, team members, 
and subcontractors.

[[Page 117]]

This clause addresses disadvantaged status for joint venture partners, 
teaming arrangement members, and subcontractors and is applicable if 
this contract contains small disadvantaged business (SDB) participation 
targets. The Contractor shall obtain representations of small 
disadvantaged status from joint venture partners, teaming arrangement 
members, and subcontractors through use of a provision substantially the 
same as paragraph (b)(1)(i) of the provision at FAR 52.219-22, Small 
Disadvantaged Business Status. The Contractor shall confirm that a joint 
venture partner, team member, or subcontractor representing itself as a 
small disadvantaged business concern is included in the SBA's on-line 
list of SDBs at http://www.sba.gov or by contacting the SBA's Office of 
Small Disadvantaged Business Certification and Eligibility.
    (b) Reporting requirement. If this contract contains SDB 
participation targets, the Contractor shall report on the participation 
of SDB concerns at contract completion, or as otherwise provided in this 
contract. Reporting may be on Optional Form 312, Small Disadvantaged 
Business Participation Report, or in the Contractor's own format 
providing the same information. This report is required for each 
contract containing SDB participation targets. If this contract contains 
an individual Small, Small Disadvantaged and Women-Owned Small Business 
Subcontracting Plan, reports may be submitted with the final 
Subcontracting Report for Individual Contracts (Standard Form 294) at 
the completion of the contract.

                             (End of clause)

[63 FR 36125, July 1, 1998]

    Effective Date Note: At 63 FR 36125, July 1, 1998, section 52.219-25 
was added, effective Jan. 1, 1999.



Sec. 52.219-26  Small Disadvantaged Business Participation Program--Incentive Subcontracting.

    As prescribed in 19.1204(c), insert a clause substantially the same 
as the following:

     Small Disadvantaged Business Participation Program--Incentive 
                        Subcontracting (JAN 1999)

    (a) Of the total dollars it plans to spend under subcontracts, the 
Contractor has committed itself in its offer to try to award a certain 
amount to small disadvantaged business concerns in the Standard 
Industrial Classification (SIC) Major Groups as determined by the 
Department of Commerce.
    (b) If the Contractor exceeds its total monetary target for 
subcontracting to small disadvantaged business concerns in the 
authorized SIC Major Groups, it will receive __ [Contracting Officer to 
insert the appropriate number between 0 and 10] percent of the dollars 
in excess of the monetary target, unless the Contracting Officer 
determines that the excess was not due to the Contractor's efforts 
(e.g., a subcontractor cost overrun caused the actual subcontract amount 
to exceed that estimated in the offer, or the excess was caused by the 
award of subcontracts that had been planned but had not been disclosed 
in the offer during contract negotiations). Determinations made under 
this paragraph are not subject to the Disputes clause of this contract.
    (c) If this is a cost-plus-fixed-fee contract, the sum of the fixed 
fee and the incentive fee earned under this contract may not exceed the 
limitations in subsection 15.404-4 of the Federal Acquisition 
Regulation.
(End of clause)

[63 FR 36125, July 1, 1998]

    Effective Date Note: At 63 FR 36125, July 1, 1998, section 52.219-26 
was added, effective Jan. 1, 1999.



Sec. 52.221  [Reserved]



Sec. 52.222-1  Notice to the Government of Labor Disputes.

    As prescribed in 22.103-5(a), insert the following clause:

          Notice to the Government of Labor Disputes (FEB 1997)

    If the Contractor has knowledge that any actual or potential labor 
dispute is delaying or threatens to delay the timely performance of this 
contract, the Contractor shall immediately give notice, including all 
relevant information, to the Contracting Officer.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 61 FR 67426, Dec. 20, 1996]



Sec. 52.222-2  Payment for Overtime Premiums.

    As prescribed in 22.103-5(b), insert the following clause:

                Payment for Overtime Premiums (JUL 1990)

    (a) The use of overtime is authorized under this contract if the 
overtime premium cost does not exceed *---- or the overtime premium is 
paid for work--
---------------------------------------------------------------------------

    *Insert either ``zero'' or the dollar amount agreed to during 
negotiations.
---------------------------------------------------------------------------

    (1) Necessary to cope with emergencies such as those resulting from 
accidents, natural disasters, breakdowns of production

[[Page 118]]

equipment, or occasional production bottlenecks of a sporadic nature;
    (2) By indirect-labor employees such as those performing duties in 
connection with administration, protection, transportation, maintenance, 
standby plant protection, operation of utilities, or accounting;
    (3) To perform tests, industrial processes, laboratory procedures, 
loading or unloading of transportation conveyances, and operations in 
flight or afloat that are continuous in nature and cannot reasonably be 
interrupted or completed otherwise; or
    (4) That will result in lower overall costs to the Government.
    (b) Any request for estimated overtime premiums that exceeds the 
amount specified above shall include all estimated overtime for contract 
completion and shall--
    (1) Identify the work unit; e.g., department or section in which the 
requested overtime will be used, together with present workload, 
staffing, and other data of the affected unit sufficient to permit the 
Contracting Officer to evaluate the necessity for the overtime;
    (2) Demonstrate the effect that denial of the request will have on 
the contract delivery or performance schedule;
    (3) Identify the extent to which approval of overtime would affect 
the performance or payments in connection with other Government 
contracts, together with identification of each affected contract; and
    (4) Provide reasons why the required work cannot be performed by 
using multishift operations or by employing additional personnel.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 25532, June 21, 1990; 
55 FR 38518, Sept. 18, 1990]



Sec. 52.222-3  Convict Labor.

    As prescribed in 22.202, insert the following clause:

                        Convict Labor (AUG 1996)

    The Contractor agrees not to employ in the performance of this 
contract any person undergoing a sentence of imprisonment which has been 
imposed by any court of a State, the District of Columbia, the 
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, 
the Commonwealth of the Northern Mariana Islands, or the Trust Territory 
of the Pacific Islands. This limitation, however, shall not prohibit the 
employment by the Contractor in the performance of this contract of 
persons on parole or probation to work at paid employment during the 
term of their sentence or persons who have been pardoned or who have 
served their terms. Nor shall it prohibit the employment by the 
Contractor in the performance of this contract of persons confined for 
violation of the laws of any of the States, the District of Columbia, 
the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American 
Samoa, the Commonwealth of the Northern Mariana Islands, or the Trust 
Territory of the Pacific Islands who are authorized to work at paid 
employment in the community under the laws of such jurisdiction, if--
    (a)(1) The worker is paid or is in an approved work training program 
on a voluntary basis;
    (2) Representatives of local union central bodies or similar labor 
union organizations have been consulted;
    (3) Such paid employment will not result in the displacement of 
employed workers, or be applied in skills, crafts, or trades in which 
there is a surplus of available gainful labor in the locality, or impair 
existing contracts for services; and
    (4) The rates of pay and other conditions of employment will not be 
less than those paid or provided for work of a similar nature in the 
locality in which the work is being performed; and
    (b) The Attorney General of the United States has certified that the 
work-release laws or regulations of the jurisdiction involved are in 
conformity with the requirements of Executive Order 11755, as amended by 
Executive Orders 12608 and 12943.

                             (End of clause)

[61 FR 31644, June 20, 1996]



Sec. 52.222-4  Contract Work Hours and Safety Standards Act--Overtime Compensation.

    As prescribed in 22.305, insert the following clause:

Contract Work Hours and Safety Standards Act--Overtime Compensation (JUL 
                                  1995)

    (a) Overtime requirements. No Contractor or subcontractor 
contracting for any part of the contract work which may require or 
involve the employment of laborers or mechanics (see Federal Acquisition 
Regulation (FAR) 22.300) shall require or permit any such laborers or 
mechanics in any workweek in which the individual is employed on such 
work to work in excess of 40 hours in such workweek unless such laborer 
or mechanic receives compensation at a rate not less than 1\1/2\ times 
the basic rate of pay for all hours worked in excess of 40 hours in such 
workweek.
    (b) Violation; liability for unpaid wages; liquidated damages. In 
the event of any violation of the provisions set forth in paragraph (a) 
of this clause, the Contractor and any subcontractor responsible 
therefor shall be

[[Page 119]]

liable for the unpaid wages. In addition, such Contractor and 
subcontractor shall be liable to the United States (in the case of work 
done under contract for the District of Columbia or a territory, to such 
District or to such territory), for liquidated damages. Such liquidated 
damages shall be computed with respect to each individual laborer or 
mechanics employed in violation of the provisions set forth in paragraph 
(a) of this clause in the sum of $10 for each calendar day on which such 
individual was required or permitted to work in excess of the standard 
workweek of 40 hours without payment of the overtime wages required by 
provisions set forth in paragraph (a) of this clause.
    (c) Withholding for unpaid wages and liquidated damages. The 
Contracting Officer shall upon his or her own action or upon written 
request of an authorized representative of the Department of Labor 
withhold or cause to be withheld, from any moneys payable on account of 
work performed by the Contractor or subcontractor under any such 
contract or any other Federal contract with the same Prime Contractor, 
or any other Federally-assisted contract subject to the Contract Work 
Hours and Safety Standards Act which is held by the same Prime 
Contractor, such sums as may be determined to be necessary to satisfy 
any liabilities of such Contractor or subcontractor for unpaid wages and 
liquidated damages as provided in the provisions set forth in paragraph 
(b) of this clause.
    (d) Payrolls and basic records. (1) The Contractor or subcontractor 
shall maintain payrolls and basic payroll records during the course of 
contract work and shall preserve them for a period of 3 years from the 
completion of the contract for all laborers and mechanics working on the 
contract. Such records shall contain the name and address of each such 
employee, social security number, correct classifications, hourly rates 
of wages paid, daily and weekly number of hours worked, deductions made, 
and actual wages paid. Nothing in this paragraph shall require the 
duplication of records required to be maintained for construction work 
by Department of Labor regulations at 29 CFR 5.5(a)(3) implementing the 
Davis-Bacon Act.
    (2) The records to be maintained under paragraph (d)(1) of this 
clause shall be made available by the Contractor or subcontractor for 
inspection, copying, or transcription by authorized representatives of 
the Contracting Officer or the Department of Labor. The Contractor or 
subcontractor shall permit such representatives to interview employees 
during working hours on the job.
    (e) Subcontracts. The Contractor or subcontractor shall insert in 
any subcontracts, exceeding $100,000, the provisions set forth in 
paragraphs (a) through (e) of this clause and also a clause requiring 
the subcontractors to include these provisions in any lower tier 
subcontracts. The Prime Contractor shall be responsible for compliance 
by any subcontractor or lower tier subcontractor with the provisions set 
forth in paragraphs (a) through (e) of this clause.

                             (End of clause)

[51 FR 12293, Apr. 9, 1986, as amended at 60 FR 34761, July 3, 1995]



Sec. 52.222-5  [Reserved]



Sec. 52.222-6  Davis-Bacon Act.

    As prescribed in 22.407(a), insert the following clause:

                       Davis-Bacon Act (FEB 1995)

    (a) All laborers and mechanics employed or working upon the site of 
the work will be paid unconditionally and not less often than once a 
week, and without subsequent deduction or rebate on any account (except 
such payroll deductions as are permitted by regulations issued by the 
Secretary of Labor under the Copeland Act (29 CFR part 3)), the full 
amount of wages and bona fide fringe benefits (or cash equivalents 
thereof) due at time of payment computed at rates not less than those 
contained in the wage determination of the Secretary of Labor which is 
attached hereto and made a part hereof, regardless of any contractual 
relationship which may be alleged to exist between the Contractor and 
such laborers and mechanics. Contributions made or costs reasonably 
anticipated for bona fide fringe benefits under section 1(b)(2) of the 
Davis-Bacon Act on behalf of laborers or mechanics are considered wages 
paid to such laborers or mechanics, subject to the provisions of 
paragraph (d) of this clause; also, regular contributions made or costs 
incurred for more than a weekly period (but not less often than 
quarterly) under plans, funds, or programs which cover the particular 
weekly period, are deemed to be constructively made or incurred during 
such period. Such laborers and mechanics shall be paid not less than the 
appropriate wage rate and fringe benefits in the wage determination for 
the classification of work actually performed, without regard to skill, 
except as provided in the clause entitled Apprentices and Trainees. 
Laborers or mechanics performing work in more than one classification 
may be compensated at the rate specified for each classification for the 
time actually worked therein; provided, that the employer's payroll 
records accurately set forth the time spent in each classification in 
which work is performed. The wage determination (including any 
additional classifications and wage rates conformed under paragraph (b) 
of this clause) and the Davis-Bacon poster (WH-1321) shall be posted at 
all times by the Contractor and its subcontractors at the site of

[[Page 120]]

the work in a prominent and accessible place where it can be easily seen 
by the workers.
    (b)(1) The Contracting Officer shall require that any class of 
laborers or mechanics, which is not listed in the wage determination and 
which is to be employed under the contract shall be classified in 
conformance with the wage determination. The Contracting Officer shall 
approve an additional classification and wage rate and fringe benefits 
therefor only when all the following criteria have been met:
    (i) The work to be performed by the classification requested is not 
performed by a classification in the wage determination.
    (ii) The classification is utilized in the area by the construction 
industry.
    (iii) The proposed wage rate, including any bona fide fringe 
benefits, bears a reasonable relationship to the wage rates contained in 
the wage determination.
    (iv) With respect to helpers, such a classification prevails in the 
area in which the work is performed.
    (2) If the Contractor and the laborers and mechanics to be employed 
in the classification (if known), or their representatives, and the 
Contracting Officer agree on the classification and wage rate (including 
the amount designated for fringe benefits, where appropriate), a report 
of the action taken shall be sent by the Contracting Officer to the 
Administrator of the Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor, Washington, DC 20210. The 
Administrator or an authorized representative will approve, modify, or 
disapprove every additional classification action within 30 days of 
receipt and so advise the Contracting Officer or will notify the 
Contracting Officer within the 30-day period that additional time is 
necessary.
    (3) In the event the Contractor, the laborers or mechanics to be 
employed in the classification, or their representatives, and the 
Contracting Officer do not agree on the proposed classification and wage 
rate (including the amount designated for fringe benefits, where 
appropriate), the Contracting Officer shall refer the questions, 
including the views of all interested parties and the recommendation of 
the Contracting Officer, to the Administrator of the Wage and Hour 
Division for Determination. The Administrator, or an authorized 
representative, will issue a determination within 30 days of receipt and 
so advise the Contracting Officer or will notify the Contracting Officer 
within the 30-day period that additional time is necessary.
    (4) The wage rate (including fringe benefits, where appropriate) 
determined pursuant to subparagraphs (b)(2) and (b)(3) of this clause 
shall be paid to all workers performing work in the classification under 
this contract from the first day on which work is performed in the 
classification.
    (c) Whenever the minimum wage rate prescribed in the contract for a 
class of laborers or mechanics includes a fringe benefit which is not 
expressed as an hourly rate, the Contractor shall either pay the benefit 
as stated in the wage determination or shall pay another bona fide 
fringe benefit or an hourly cash equivalent thereof.
    (d) If the Contractor does not make payments to a trustee or other 
third person, the Contractor may consider as part of the wages of any 
laborer or mechanic the amount of any costs reasonably anticipated in 
providing bona fide fringe benefits under a plan or program; provided, 
that the Secretary of Labor has found, upon the written request of the 
Contractor, that the applicable standards of the Davis-Bacon Act have 
been met. The Secretary of Labor may require the Contractor to set aside 
in a separate account assets for the meeting of obligations under the 
plan or program.

                             (End of clause)

[53 FR 4945, Feb. 18, 1988, as amended at 57 FR 44263, Sept. 24, 1992; 
59 FR 67038, Dec. 28, 1994]



Sec. 52.222-7  Withholding of Funds.

    As prescribed in 22.407(a), insert the following clause:

                     Withholding of Funds (FEB 1988)

    The Contracting Officer shall, upon his or her own action or upon 
written request of an authorized representative of the Department of 
Labor, withhold or cause to be withheld from the Contractor under this 
contract or any other Federal contract with the same Prime Contractor, 
or any other federally assisted contract subject to Davis-Bacon 
prevailing wage requirements, which is held by the same Prime 
Contractor, so much of the accrued payments or advances as may be 
considered necessary to pay laborers and mechanics, including 
apprentices, trainees, and helpers, employed by the Contractor or any 
subcontractor the full amount of wages required by the contract. In the 
event of failure to pay any laborer or mechanic, including any 
apprentice, trainee, or helper, employed or working on the site of the 
work, all or part of the wages required by the contract, the Contracting 
Officer may, after written notice to the Contractor, take such action as 
may be necessary to cause the suspension of any further payment, 
advance, or guarantee of funds until such violations have ceased.

                             (End of clause)

[53 FR 4945, Feb. 18, 1988]

[[Page 121]]



Sec. 52.222-8  Payrolls and Basic Records.

    As prescribed in 22.407(a), insert the following clause:

                Payment for Overtime Premiums (FEB 1988)

    (a) Payrolls and basic records relating thereto shall be maintained 
by the Contractor during the course of the work and preserved for a 
period of 3 years thereafter for all laborers and mechanics working at 
the site of the work. Such records shall contain the name, address, and 
social security number of each such worker, his or her correct 
classification, hourly rates of wages paid (including rates of 
contributions or costs anticipated for bona fide fringe benefits or cash 
equivalents thereof of the types described in section 1(b)(2)(B) of the 
Davis-Bacon Act), daily and weekly number of hours worked, deductions 
made, and actual wages paid. Whenever the Secretary of Labor has found, 
under paragraph (d) of the clause entitled Davis-Bacon Act, that the 
wages of any laborer or mechanic include the amount of any costs 
reasonably anticipated in providing benefits under a plan or program 
described in section 1(b)(2)(B) of the Davis-Bacon Act, the Contractor 
shall maintain records which show that the commitment to provide such 
benefits is enforceable, that the plan or program is financially 
responsible, and that the plan or program has been communicated in 
writing to the laborers or mechanics affected, and records which show 
the costs anticipated or the actual cost incurred in providing such 
benefits. Contractors employing apprentices or trainees under approved 
programs shall maintain written evidence of the registration of 
apprenticeship programs and certification of trainee programs, the 
registration of the apprentices and trainees, and the ratios and wage 
rates prescribed in the applicable programs.
    (b)(1) The Contractor shall submit weekly for each week in which any 
contract work is performed a copy of all payrolls to the Contracting 
Officer. The payrolls submitted shall set out accurately and completely 
all of the information required to be maintained under paragraph (a) of 
this clause. This information may be submitted in any form desired. 
Optional Form WH-347 (Federal Stock Number 029-005-00014-1) is available 
for this purpose and may be purchased from the Superintendent of 
Documents, U.S. Government Printing Office, Washington, DC 20402. The 
Prime Contractor is responsible for the submission of copies of payrolls 
by all subcontractors.
    (2) Each payroll submitted shall be accompanied by a Statement of 
Compliance, signed by the Contractor or subcontractor or his or her 
agent who pays or supervises the payment of the persons employed under 
the contract and shall certify--
    (i) That the payroll for the payroll period contains the information 
required to be maintained under paragraph (a) of this clause and that 
such information is correct and complete;
    (ii) That each laborer or mechanic (including each helper, 
apprentice, and trainee) employed on the contract during the payroll 
period has been paid the full weekly wages earned, without rebate, 
either directly or indirectly, and that no deductions have been made 
either directly or indirectly from the full wages earned, other than 
permissible deductions as set forth in the Regulations, 29 CFR part 3; 
and
    (iii) That each laborer or mechanic has been paid not less than the 
applicable wage rates and fringe benefits or cash equivalents for the 
classification of work performed, as specified in the applicable wage 
determination incorporated into the contract.
    (3) The weekly submission of a properly executed certification set 
forth on the reverse side of Optional Form WH-347 shall satisfy the 
requirement for submission of the Statement of Compliance required by 
subparagraph (b)(2) of this clause.
    (4) The falsification of any of the certifications in this clause 
may subject the Contractor or subcontractor to civil or criminal 
prosecution under section 1001 of title 18 and section 3729 of title 31 
of the United States Code.
    (c) The Contractor or subcontractor shall make the records required 
under paragraph (a) of this clause available for inspection, copying, or 
transcription by the Contracting Officer or authorized representatives 
of the Contracting Officer or the Department of Labor. The Contractor or 
subcontractor shall permit the Contracting Officer or representatives of 
the Contracting Officer or the Department of Labor to interview 
employees during working hours on the job. If the Contractor or 
subcontractor fails to submit required records or to make them 
available, the Contracting Officer may, after written notice to the 
Contractor, take such action as may be necessary to cause the suspension 
of any further payment. Furthermore, failure to submit the required 
records upon request or to make such records available may be grounds 
for debarment action pursuant to 29 CFR 5.12.

                             (End of clause)

[53 FR 4945, Feb. 18, 1988]



Sec. 52.222-9  Apprentices and Trainees.

    As prescribed in 22.407(a), insert the following clause:

[[Page 122]]

                   Apprentices and Trainees (FEB 1988)

    (a) Apprentices. Apprentices will be permitted to work at less than 
the predetermined rate for the work they performed when they are 
employed pursuant to and individually registered in a bona fide 
apprenticeship program registered with the U.S. Department of Labor, 
Employment and Training Administration, Bureau of Apprenticeship and 
Training, or with a State Apprenticeship Agency recognized by the 
Bureau, or if a person is employed in his or her first 90 days of 
probationary employment as an apprentice in such an apprenticeship 
program, who is not individually registered in the program, but who has 
been certified by the Bureau of Apprenticeship and Training or a State 
Apprenticeship Agency (where appropriate) to be eligible for 
probationary employment as an apprentice. The allowable ratio of 
apprentices to journeymen on the job site in any craft classification 
shall not be greater than the ratio permitted to the Contractor as to 
the entire work force under the registered program. Any worker listed on 
a payroll at an apprentice wage rate, who is not registered or otherwise 
employed as stated in this paragraph, shall be paid not less than the 
applicable wage determination for the classification of work actually 
performed. In addition, any apprentice performing work on the job site 
in excess of the ratio permitted under the registered program shall be 
paid not less than the applicable wage rate on the wage determination 
for the work actually performed. Where a Contractor is performing 
construction on a project in a locality other than that in which its 
program is registered, the ratios and wage rates (expressed in 
percentages of the journeyman's hourly rate) specified in the 
Contractor's or subcontractor's registered program shall be observed. 
Every apprentice must be paid at not less than the rate specified in the 
registered program for the apprentice's level of progress, expressed as 
a percentage of the journeyman hourly rate specified in the applicable 
wage determination. Apprentices shall be paid fringe benefits in 
accordance with the provisions of the apprenticeship program. If the 
apprenticeship program does not specify fringe benefits, apprentices 
must be paid the full amount of fringe benefits listed on the wage 
determination for the applicable classification. If the Administrator 
determines that a different practice prevails for the applicable 
apprentice classification, fringes shall be paid in accordance with that 
determination. In the event the Bureau of Apprenticeship and Training, 
or a State Apprenticeship Agency recognized by the Bureau, withdraws 
approval of an apprenticeship program, the Contractor will no longer be 
permitted to utilize apprentices at less than the applicable 
predetermined rate for the work performed until an acceptable program is 
approved.
    (b) Trainees. Except as provided in 29 CFR 5.16, trainees will not 
be permitted to work at less than the predetermined rate for the work 
performed unless they are employed pursuant to and individually 
registered in a program which has received prior approval, evidenced by 
formal certification by the U.S. Department of Labor, Employment and 
Training Administration. The ratio of trainees to journeymen on the job 
site shall not be greater than permitted under the plan approved by the 
Employment and Training Administration. Every trainee must be paid at 
not less than the rate specified in the approved program for the 
trainee's level of progress, expressed as a percentage of the journeyman 
hourly rate specified in the applicable wage determination. Trainees 
shall be paid fringe benefits in accordance with the provisions of the 
trainee program. If the trainee program does not mention fringe 
benefits, trainees shall be paid the full amount of fringe benefits 
listed in the wage determination unless the Administrator of the Wage 
and Hour Division determines that there is an apprenticeship program 
associated with the corresponding journeyman wage rate in the wage 
determination which provides for less than full fringe benefits for 
apprentices. Any employee listed on the payroll at a trainee rate who is 
not registered and participating in a training plan approved by the 
Employment and Training Administration shall be paid not less than the 
applicable wage rate in the wage determination for the classification of 
work actually performed. In addition, any trainee performing work on the 
job site in excess of the ratio permitted under the registered program 
shall be paid not less than the applicable wage rate in the wage 
determination for the work actually performed. In the event the 
Employment and Training Administration withdraws approval of a training 
program, the Contractor will no longer be permitted to utilize trainees 
at less than the applicable predetermined rate for the work performed 
until an acceptable program is approved.
    (c) Equal employment opportunity. The utilization of apprentices, 
trainees, and journeymen under this clause shall be in conformity with 
the equal employment opportunity requirements of Executive Order 11246, 
and 29 CFR part 30.

                             (End of clause)

[53 FR 4946, Feb. 18, 1988]



Sec. 52.222-10  Compliance With Copeland Act Requirements.

    As prescribed in 22.407(a), insert the following clause:

[[Page 123]]

          Compliance With Copeland Act Requirements (FEB 1988)

    The Contractor shall comply with the requirements of 29 CFR part 3, 
which are hereby incorporated by reference in this contract.

                             (End of clause)

[53 FR 4947, Feb. 18, 1988]



Sec. 52.222-11  Subcontracts (Labor Standards).

    As prescribed in 22.407(a), insert the following clause:

                Subcontracts (Labor Standards) (FEB 1988)

    (a) The Contractor or subcontractor shall insert in any subcontracts 
the clauses entitled Davis-Bacon Act, Contract Work Hours and Safety 
Standards Act--Overtime Compensation, Apprentices and Trainees, Payrolls 
and Basic Records, Compliance with Copeland Act Requirements, 
Withholding of Funds, Subcontracts (Labor Standards), Contract 
Termination--Debarment, Disputes Concerning Labor Standards, Compliance 
with Davis-Bacon and Related Act Regulations, and Certification of 
Eligibility, and such other clauses as the Contracting Officer may, by 
appropriate instructions, require, and also a clause requiring 
subcontractors to include these clauses in any lower tier subcontracts. 
The Prime Contractor shall be responsible for compliance by any 
subcontractor or lower tier subcontractor with all the contract clauses 
cited in this paragraph.
    (b)(1) Within 14 days after award of the contract, the Contractor 
shall deliver to the Contracting Officer a completed Statement and 
Acknowledgment Form (SF 1413) for each subcontract, including the 
subcontractor's signed and dated acknowledgment that the clauses set 
forth in paragraph (a) of this clause have been included in the 
subcontract.

    (2) Within 14 days after the award of any subsequently awarded 
subcontract the Contractor shall deliver to the Contracting Officer an 
updated completed SF 1413 for such additional subcontract.

                             (End of clause)

[53 FR 4947, Feb. 18, 1988]



Sec. 52.222-12  Contract Termination--Debarment.

    As prescribed in 22.407(a), insert the following clause:

               Contract Termination--Debarment (FEB 1988)

    A breach of the contract clauses entitled Davis-Bacon Act, Contract 
Work Hours and Safety Standards Act--Overtime Compensation, Apprentices 
and Trainees, Payrolls and Basic Records, Compliance with Copeland Act 
Requirements, Subcontracts (Labor Standards), Compliance With Davis-
Bacon and Related Act Regulations, or Certification of Eligibility may 
be grounds for termination of the contract, and for debarment as a 
Contractor and subcontractor as provided in 29 CFR 5.12.

                             (End of clause)

[53 FR 4947, Feb. 18, 1988]



Sec. 52.222-13  Compliance with Davis-Bacon and Related Act Regulations.

    As prescribed in 22.407(a), insert the following clause:

   Compliance With Davis-Bacon and Related Act Regulations (FEB 1988)

    All rulings and interpretations of the Davis-Bacon and Related Acts 
contained in 29 CFR parts 1, 3, and, 5 are hereby incorporated by 
reference in this contract.

                             (End of clause)

[53 FR 4947, Feb. 18, 1988]



Sec. 52.222-14  Disputes Concerning Labor Standards.

    As prescribed in 22.407(a), insert the following clause:

             Disputes Concerning Labor Standards (FEB 1988)

    The United States Department of Labor has set forth in 29 CFR parts 
5, 6, and 7 procedures for resolving disputes concerning labor standards 
requirements. Such disputes shall be resolved in accordance with those 
procedures and not the Disputes clause of this contract. Disputes within 
the meaning of this clause include disputes between the Contractor (or 
any of its subcontractors) and the contracting agency, the U.S. 
Department of Labor, or the employees or their representatives.

                             (End of clause)

[53 FR 4947, Feb. 18, 1988]



Sec. 52.222-15  Certification of Eligibility.

    As prescribed in 22.407(a), insert the following clause:

[[Page 124]]

                 Certification of Eligibility (FEB 1988)

    (a) By entering into this contract, the Contractor certifies that 
neither it (nor he or she) nor any person or firm who has an interest in 
the Contractor's firm is a person or firm ineligible to be awarded 
Government contracts by virtue of section 3(a) of the Davis-Bacon Act or 
29 CFR 5.12(a)(1).
    (b) No part of this contract shall be subcontracted to any person or 
firm ineligible for award of a Government contract by virtue of section 
3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1).
    (c) The penalty for making false statements is prescribed in the 
U.S. Criminal Code, 18 U.S.C. 1001.

                             (End of clause)

[53 FR 4947, Feb. 18, 1988]



Sec. 52.222-16  Approval of Wage Rates.

    As prescribed in 22.407(b), insert the following clause:

                    Approval of Wage Rates (FEB 1988)

    All straight time wage rates, and overtime rates based thereon, for 
laborers and mechanics engaged in work under this contract must be 
submitted for approval in writing by the head of the contracting 
activity or a representative expressly designated for this purpose, if 
the straight time wages exceed the rates for corresponding 
classifications contained in the applicable Davis-Bacon Act minimum wage 
determination included in the contract. Any amount paid by the 
Contractor to any laborer or mechanic in excess of the agency approved 
wage rate shall be at the expense of the Contractor and shall not be 
reimbursed by the Government. If the Government refuses to authorize the 
use of the overtime, the Contractor is not released from the obligation 
to pay employees at the required overtime rates for any overtime 
actually worked.

                             (End of clause)

[53 FR 4947, Feb. 18, 1988]



Sec. 52.222-17  Labor Standards for Construction Work--Facilities Contracts.

    As prescribed in 22.407(d), insert the following clause:

 Labor Standards for Construction Work--Facilities Contracts (FEB 1988)

    (a) In the event that construction, alteration, or repair (including 
painting and decorating) of public buildings or public works is to be 
performed hereunder, the Contractor shall comply with the following 
listed clauses of the Federal Acquisition Regulation in performance of 
such work:
    (1) Contract Work Hours and Safety Standards Act--Overtime 
Compensation at 52.222-4.
    (2) Davis-Bacon Act at 52.222-6.
    (3) Withholding of Funds at 52.222-7.
    (4) Payrolls and Basic Records at 52.222-8.
    (5) Apprentices and Trainees at 52.222-9.
    (6) Compliance With Copeland Act Requirements at 52.222-10.
    (7) Subcontracts (Labor Standards) at 52.222-11.
    (8) Contract Termination--Debarment at 52.222-12.
    (9) Compliance with Davis-Bacon and Related Act Regulations at 
52.222-13.
    (10) Disputes Concerning Labor Standards at 52.222-14.
    (11) Certification of Eligibility at 52.222-15.
    (b) Upon determination by the Contracting Officer that the Davis-
Bacon Act is applicable to any item of work to be performed hereunder, a 
determination of the prevailing wage rates shall be incorporated into 
the contract by modification.
    (c) No construction, alteration, or repair (including painting and 
decorating) of public buildings or public works shall be performed under 
this contract without incorporation of the wage determination unless the 
Contracting Officer authorizes the start of work because of unusual or 
emergency situations, in which case the wage determination shall be 
incorporated as soon as possible and made retroactive to the start of 
the work.

                             (End of clause)

[53 FR 4947, Feb. 18, 1988]



Sec. 52.222-18--52.222-19  [Reserved]



Sec. 52.222-20  Walsh-Healey Public Contracts Act.

    As prescribed in 22.610, insert the following clause in 
solicitations and contracts covered by the Act:

              Walsh-Healey Public Contracts Act (DEC 1996)

    If this contract is for the manufacture or furnishing of materials, 
supplies, articles or equipment in an amount that exceeds or may exceed 
$10,000, and is subject to the Walsh-Healey Public Contracts Act, as 
amended (41 U.S.C. 35-45), the following terms and conditions apply:
    (a) All stipulations required by the Act and regulations issued by 
the Secretary of Labor (41 CFR chapter 50) are incorporated by 
reference. These stipulations are subject to all applicable rulings and 
interpretations of the Secretary of Labor that are now, or may 
hereafter, be in effect.

[[Page 125]]

    (b) All employees whose work relates to this contract shall be paid 
not less than the minimum wage prescribed by regulations issued by the 
Secretary of Labor (41 CFR 50-202.2). Learners, student learners, 
apprentices, and handicapped workers may be employed at less than the 
prescribed minimum wage (see 41 CFR 50-202.3) to the same extent that 
such employment is permitted under Section 14 of the Fair Labor 
Standards Act (41 U.S.C. 40).

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 61 FR 67411, Dec. 20, 1996]



Sec. 52.222-21  Certification of Nonsegregated Facilities.

    As prescribed in 22.810(a)(1), insert the following provision in 
solicitations when a contract is contemplated that will include the 
clause at 52.222-26, Equal Opportunity, and the contract amount is 
expected to exceed $10,000:

          Certification of Nonsegregated Facilities (APR 1984)

    (a) Segregated facilities, as used in this provision, means any 
waiting rooms, work areas, rest rooms and wash rooms, restaurants and 
other eating areas, time clocks, locker rooms and other storage or 
dressing areas, parking lots, drinking fountains, recreation or 
entertainment areas, transportation, and housing facilities provided for 
employees, that are segregated by explicit directive or are in fact 
segregated on the basis of race, color, religion, or national origin 
because of habit, local custom, or otherwise.
    (b) By the submission of this offer, the offeror certifies that it 
does not and will not maintain or provide for its employees any 
segregated facilities at any of its establishments, and that it does not 
and will not permit its employees to perform their services at any 
location under its control where segregated facilities are maintained. 
The offeror agrees that a breach of this certification is a violation of 
the Equal Opportunity clause in the contract.
    (c) The offeror further agrees that (except where it has obtained 
identical certifications from proposed subcontractors for specific time 
periods) it will--
    (1) Obtain identical certifications from proposed subcontractors 
before the award of subcontracts under which the subcontractor will be 
subject to the Equal Opportunity clause;
    (2) Retain the certifications in the files; and
    (3) Forward the following notice to the proposed subcontractors 
(except if the proposed subcontractors have submitted identical 
certifications for specific time periods):

 Notice to Prospective Subcontractors of Requirement for Certifications 
                       of Nonsegregated Facilities

    A Certification of Nonsegregated Facilities must be submitted before 
the award of a subcontract under which the subcontractor will be subject 
to the Equal Opportunity clause. The certification may be submitted 
either for each subcontract or for all subcontracts during a period 
(i.e., quarterly, semiannually, or annually).
NOTE: The penalty for making false statements in offers is prescribed in 
18 U.S.C. 1001.

                           (End of provision)



Sec. 52.222-22  Previous Contracts and Compliance Reports.

    As prescribed in 22.810(a)(2), insert the following provision in 
solicitations when a contract is contemplated that will include the 
clause at 52.222-26, Equal Opportunity:

          Previous Contracts and Compliance Reports (APR 1984)

    The offeror represents that--
    (a) It {time}  has, {time}  has not participated in a previous 
contract or subcontract subject either to the Equal Opportunity clause 
of this solicitation, the clause originally contained in Section 310 of 
Executive Order No. 10925, or the clause contained in Section 201 of 
Executive Order No. 11114;
    (b) It {time}  has, {time}  has not, filed all required compliance 
reports; and
    (c) Representations indicating submission of required compliance 
reports, signed by proposed subcontractors, will be obtained before 
subcontract awards.

                           (End of provision)



Sec. 52.222-23  Notice of Requirement for Affirmative Action to Ensure Equal Employment Opportunity.

    As prescribed in 22.810(b), insert the following provision in 
solicitations for construction when a contract is contemplated that will 
include the clause at 52.222-26, Equal Opportunity, and the amount is 
expected to be in excess of $10,000:

Notice of Requirement for Affirmative Action to Ensure Equal Employment 
                         Opportunity (APR 1984)

    (a) The offeror's attention is called to the Equal Opportunity 
clause and the Affirmative Action Compliance Requirements for 
Construction clause of this solicitation.

[[Page 126]]

    (b) The goals for minority and female participation, expressed in 
percentage terms for the Contractor's aggregate workforce in each trade 
on all construction work in the covered area, are as follows:

------------------------------------------------------------------------
  Goals for minority participation    Goals for female participation for
           for each trade                         each trade
------------------------------------------------------------------------
----------------                     ----------------
[Contracting Officer shall insert    [Contracting Officer shall insert
 goals]                               goals]
------------------------------------------------------------------------

    These goals are applicable to all the Contractor's construction work 
performed in the covered area. If the Contractor performs construction 
work in a geographical area located outside of the covered area, the 
Contractor shall apply the goals established for the geographical area 
where the work is actually performed. Goals are published periodically 
in the Federal Register in notice form, and these notices may be 
obtained from any Office of Federal Contract Compliance Programs office.
    (c) The Contractor's compliance with Executive Order 11246, as 
amended, and the regulations in 41 CFR 60-4 shall be based on (1) its 
implementation of the Equal Opportunity clause, (2) specific affirmative 
action obligations required by the clause entitled Affirmative Action 
Compliance Requirements for Construction, and (3) its efforts to meet 
the goals. The hours of minority and female employment and training must 
be substantially uniform throughout the length of the contract, and in 
each trade. The Contractor shall make a good faith effort to employ 
minorities and women evenly on each of its projects. The transfer of 
minority or female employees or trainees from Contractor to Contractor, 
or from project to project, for the sole purpose of meeting the 
Contractor's goals shall be a violation of the contract, Executive Order 
11246, as amended, and the regulations in 41 CFR 60-4. Compliance with 
the goals will be measured against the total work hours performed.
    (d) The Contractor shall provide written notification to the 
Director, Office of Federal Contract Compliance Programs, within 10 
working days following award of any construction subcontract in excess 
of $10,000 at any tier for construction work under the contract 
resulting from this solicitation. The notification shall list the--
    (2) Name, address, and telephone number of the subcontractor;
    (i) Employer's identification number of the subcontractor;
    (3) Estimated dollar amount of the subcontract;
    (4) Estimated starting and completion dates of the subcontract; and
    (5) Geographical area in which the subcontract is to be performed.
    (e) As used in this Notice, and in any contract resulting from this 
solicitation, the covered area is ______ [Contracting Officer shall 
insert description of the geographical areas where the contract is to be 
performed, giving the State, county, and city].

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 38518, Sept. 18, 1990]



Sec. 52.222-24  Preaward On-Site Equal Opportunity Compliance Review.

    As prescribed in 22.810(c), insert the following provision in 
solicitations, other than those for construction, when a contract is 
contemplated that will include the clause at 52.222-26, Equal 
Opportunity, and the amount is expected to be for $1 million or more:

     Preaward On-Site Equal Opportunity Compliance Review (APR 1984)

    An award in the amount of $1 million or more will not be made under 
this solicitation unless the offeror and each of its known first-tier 
subcontractors (to whom it intends to award a subcontract of $1 million 
or more) are found, on the basis of a compliance review, to be able to 
comply with the provisions of the Equal Opportunity clause of this 
solicitation.

                           (End of provision)



Sec. 52.222-25  Affirmative Action Compliance.

    As prescribed in 22.810(d), insert the following provision in 
solicitations, other than those for construction, when a contract is 
contemplated that will include the clause at 52.222-26, Equal 
Opportunity:

                Affirmative Action Compliance (APR 1984)

    The offeror represents that (a) it {time}  has developed and has on 
file, {time}  has not developed and does not have on file, at each 
establishment, affirmative action programs required by the rules and 
regulations of the Secretary of Labor (41 CFR 60-1 and 60-2), or (b) it 
{time}  has not previously had contracts subject to the written 
affirmative action programs requirement of the rules and regulations of 
the Secretary of Labor.

                           (End of provision)



Sec. 52.222-26  Equal Opportunity.

    As prescribed in 22.810(e), insert the following clause in 
solicitations and contracts (see 22.802) unless all of the terms of the 
clause are exempt from

[[Page 127]]

the requirements of EO 11246 (see 22.807(a)):

                      Equal Opportunity (APR 1984)

    (a) If, during any 12-month period (including the 12 months 
preceding the award of this contract), the Contractor has been or is 
awarded nonexempt Federal contracts and/or subcontracts that have an 
aggregate value in excess of $10,000, the Contractor shall comply with 
subparagraphs (b)(1) through (11) below. Upon request, the Contractor 
shall provide information necessary to determine the applicability of 
this clause.
    (b) During performing this contract, the Contractor agrees as 
follows:
    (1) The Contractor shall not discriminate against any employee or 
applicant for employment because of race, color, religion, sex, or 
national origin.
    (2) The Contractor shall take affirmative action to ensure that 
applicants are employed, and that employees are treated during 
employment, without regard to their race, color, religion, sex, or 
national origin. This shall include, but not be limited to, (i) 
employment, (ii) upgrading, (iii) demotion, (iv) transfer, (v) 
recruitment or recruitment advertising, (vi) layoff or termination, 
(vii) rates of pay or other forms of compensation, and (viii) selection 
for training, including apprenticeship.
    (3) The Contractor shall post in conspicuous places available to 
employees and applicants for employment the notices to be provided by 
the Contracting Officer that explain this clause.
    (4) The Contractor shall, in all solicitations or advertisement for 
employees placed by or on behalf of the Contractor, state that all 
qualified applicants will receive consideration for employment without 
regard to race, color, religion, sex, or national origin.
    (5) The Contractor shall send, to each labor union or representative 
of workers with which it has a collective bargaining agreement or other 
contract or understanding, the notice to be provided by the Contracting 
Officer advising the labor union or workers' representative of the 
Contractor's commitments under this clause, and post copies of the 
notice in conspicuous places available to employees and applicants for 
employment.
    (6) The Contractor shall comply with Executive Order 11246, as 
amended, and the rules, regulations, and orders of the Secretary of 
Labor.
    (7) The Contractor shall furnish to the contracting agency all 
information required by Executive Order 11246, as amended, and by the 
rules, regulations, and orders of the Secretary of Labor. Standard Form 
100 (EEO-1), or any successor form, is the prescribed form to be filed 
within 30 days following the award, unless filed within 12 months 
preceding the date of award.
    (8) The Contractor shall permit access to its books, records, and 
accounts by the contracting agency or the Office of Federal Contract 
Compliance Programs (OFCCP) for the purposes of investigation to 
ascertain the Contractor's compliance with the applicable rules, 
regulations, and orders.
    (9) If the OFCCP determines that the Contractor is not in compliance 
with this clause or any rule, regulation, or order of the Secretary of 
Labor, this contract may be canceled, terminated, or suspended in whole 
or in part and the Contractor may be declared ineligible for further 
Government contracts, under the procedures authorized in Executive Order 
11246, as amended. In addition, sanctions may be imposed and remedies 
invoked against the Contractor as provided in Executive Order 11246, as 
amended, the rules, regulations, and orders of the Secretary of Labor, 
or as otherwise provided by law.
    (10) The Contractor shall include the terms and conditions of 
subparagraph (b)(1) through (11) of this clause in every subcontract or 
purchase order that is not exempted by the rules, regulations, or orders 
of the Secretary of Labor issued under Executive Order 11246, as 
amended, so that these terms and conditions will be binding upon each 
subcontractor or vendor.
    (11) The Contractor shall take such action with respect to any 
subcontract or purchase order as the contracting agency may direct as a 
means of enforcing these terms and conditions, including sanctions for 
noncompliance; provided, that if the Contractor becomes involved in, or 
is threatened with, litigation with a subcontractor or vendor as a 
result of any direction, the Contractor may request the United States to 
enter into the litigation to protect the interests of the United States.
    (c) Notwithstanding any other clause in this contract, disputes 
relative to this clause will be governed by the procedures in 41 CFR 60-
1.1.

                             (End of clause)

    Alternate I (APR 1984). If one or more, but not all, of the terms of 
the clause are exempt from the requirements of EO 11246 (see 22.807(a)), 
the contracting officer shall add the following as a preamble to the 
clause:

    Notice. The following terms of this clause are waived for this 
contract: ______ [Contracting Officer shall list terms].



Sec. 52.222-27  Affirmative Action Compliance Requirements for Construction.

    As prescribed in 22.810(f), insert the following clause in 
solicitations and

[[Page 128]]

contracts for construction that will include the clause at 52.222-26, 
Equal Opportunity, and the amount of the contract is expected to be in 
excess of $10,000:

 Affirmative Action Compliance Requirements for Construction (APR 1984)

    (a) Definitions.
    Covered area, as used in this clause, means the geographical area 
described in the solicitation for this contract.
    Director, as used in this clause, means Director, Office of Federal 
Contract Compliance Programs (OFCCP), United States Department of Labor, 
or any person to whom the Director delegates authority.
    Employer identification number, as used in this clause, means the 
Federal Social Security number used on the employer's quarterly 
Federaltax return, U.S. Treasury Department Form 941.
    Minority, as used in this clause, means--
    (1) American Indian or Alaskan Native (all persons having origins in 
any of the original peoples of North America and maintaining 
identifiable tribal affiliations through membership and participation or 
community identification).
    (2) Asian and Pacific Islander (all persons having origins in any of 
the original peoples of the Far East, Southeast Asia, the Indian 
Subcontinent, or the Pacific Islands);
    (3) Black (all persons having origins in any of the black African 
racial groups not of Hispanic origin); and
    (4) Hispanic (all persons of Mexican, Puerto Rican, Cuban, Central 
or South American, or other Spanish culture or origin, regardless of 
race).
    (b) If the Contractor, or a subcontractor at any tier, subcontracts 
a portion of the work involving any construction trade, each such 
subcontract in excess of $10,000 shall include this clause and the 
Notice containing the goals for minority and female participation stated 
in the solicitation for this contract.
    (c) If the Contractor is participating in a Hometown Plan (41 CFR 
60-4) approved by the U.S. Department of Labor in a covered area, either 
individually or through an association, its affirmative action 
obligations on all work in the plan area (including goals) shall comply 
with the plan for those trades that have unions participating in the 
plan. Contractors must be able to demonstrate participation in, and 
compliance with, the provisions of the plan. Each Contractor or 
subcontractor participating in an approved plan is also required to 
comply with its obligations under the Equal Opportunity clause, and to 
make a good faith effort to achieve each goal under the plan in each 
trade in which it has employees. The overall good-faith performance by 
other Contractors or subcontractors toward a goal in an approved plan 
does not excuse any Contractor's or subcontractor's failure to make 
good-faith efforts to achieve the plan's goals.
    (d) The Contractor shall implement the affirmative action procedures 
in subparagraphs (g)(1) through (16) of this clause. The goals stated in 
the solicitation for this contract are expressed as percentages of the 
total hours of employment and training of minority and female 
utilization that the Contractor should reasonably be able to achieve in 
each construction trade in which it has employees in the covered area. 
If the Contractor performs construction work in a geographical area 
located outside of the covered area, it shall apply the goals 
established for the geographical area where that work is actually 
performed. The Contractor is expected to make substantially uniform 
progress toward its goals in each craft.
    (e) Neither the terms and conditions of any collective bargaining 
agreement, nor the failure by a union with which the Contractor has a 
collective bargaining agreement, to refer minorities or women shall 
excuse the Contractor's obligations under this clause, Executive Order 
11246, as amended, or the regulations thereunder.
    (f) In order for the nonworking training hours of apprentices and 
trainees to be counted in meeting the goals, apprentices and trainees 
must be employed by the Contractor during the training period, and the 
Contractor must have made a commitment to employ the apprentices and 
trainees at the completion of their training, subject to the 
availability of employment opportunities. Trainees must be trained 
pursuant to training programs approved by the U.S. Department of Labor.
    (g) The Contractor shall take affirmative action to ensure equal 
employment opportunity. The evaluation of the Contractor's compliance 
with this clause shall be based upon its effort to achieve maximum 
results from its actions. The Contractor shall document these efforts 
fully and implement affirmative action steps at least as extensive as 
the following:
    (1) Ensure a working environment free of harassment, intimidation, 
and coercion at all sites and in all facilities where the Contractor's 
employees are assigned to work. The Contractor, if possible, will assign 
two or more women to each construction project. The Contractor shall 
ensure that foremen, superintendents, and other onsite supervisory 
personnel are aware of and carry out the Contractor's obligation to 
maintain such a working environment, with specific attention to minority 
or female individuals working at these sites or facilities.
    (2) Establish and maintain a current list of sources for minority 
and female recruitment. Provide written notification to minority and 
female recruitment sources and community organizations when the 
Contractor

[[Page 129]]

or its unions have employment opportunities available, and maintain a 
record of the organizations' responses.
    (3) Establish and maintain a current file of the names, addresses, 
and telephone numbers of each minority and female off-the-street 
applicant, referrals of minorities or females from unions, recruitment 
sources, or community organizations, and the action taken with respect 
to each individual. If an individual was sent to the union hiring hall 
for referral and not referred back to the Contractor by the union or, if 
referred back, not employed by the Contractor, this shall be documented 
in the file, along with whatever additional actions the Contractor may 
have taken.
    (4) Immediately notify the Director when the union or unions with 
which the Contractor has a collective bargaining agreement has not 
referred back to the Contractor a minority or woman sent by the 
Contractor, or when the Contractor has other information that the union 
referral process has impeded the Contractor's efforts to meet its 
obligations.
    (5) Develop on-the-job training opportunities and/or participate in 
training programs for the area that expressly include minorities and 
women, including upgrading programs and apprenticeship and trainee 
programs relevant to the Contractor's employment needs, especially those 
programs funded or approved by the Department of Labor. The Contractor 
shall provide notice of these programs to the sources compiled under 
subparagraph (g)(2) above.
    (6) Disseminate the Contractor's equal employment policy by--
    (i) Providing notice of the policy to unions and to training, 
recruitment, and outreach programs, and requesting their cooperation in 
assisting the Contractor in meeting its contract obligations;
    (ii) Including the policy in any policy manual and in collective 
bargaining agreements;
    (iii) Publicizing the policy in the company newspaper, annual 
report, etc.;
    (iv) Reviewing the policy with all management personnel and with all 
minority and female employees at least once a year; and
    (v) Posting the policy on bulletin boards accessible to employees at 
each location where construction work is performed.
    (7) Review, at least annually, the Contractor's equal employment 
policy and affirmative action obligations with all employees having 
responsibility for hiring, assignment, layoff, termination, or other 
employment decisions. Conduct review of this policy with all onsite 
supervisory personnel before initiating construction work at a job site. 
A written record shall be made and maintained identifying the time and 
place of these meetings, persons attending, subject matter discussed, 
and disposition of the subject matter.
    (8) Disseminate the Contractor's equal employment policy externally 
by including it in any advertising in the news media, specifically 
including minority and female news media. Provide written notification 
to, and discuss this policy with, other Contractors and subcontractors 
with which the Contractor does or anticipates doing business.
    (9) Direct recruitment efforts, both oral and written, to minority, 
female, and community organizations, to schools with minority and female 
students, and to minority and female recruitment and training 
organizations serving the Contractor's recruitment area and employment 
needs. Not later than 1 month before the date for acceptance of 
applications for apprenticeship or training by any recruitment source, 
send written notification to organizations such as the above, describing 
the openings, screening procedures, and tests to be used in the 
selection process.
    (10) Encourage present minority and female employees to recruit 
minority persons and women. Where reasonable, provide after-school, 
summer, and vacation employment to minority and female youth both on the 
site and in other areas of the Contractor's workforce.
    (11) Validate all tests and other selection requirements where 
required under 41 CFR 60-3.
    (12) Conduct, at least annually, an inventory and evaluation at 
least of all minority and female personnel for promotional 
opportunities. Encourage these employees to seek or to prepare for, 
through appropriate training, etc., opportunities for promotion.
    (13) Ensure that seniority practices, job classifications, work 
assignments, and other personnel practices, do not have a discriminatory 
effect by continually monitoring all personnel and employment-related 
activities to ensure that the Contractor's obligations under this 
contract are being carried out.
    (14) Ensure that all facilities and company activities are 
nonsegregated except that separate or single-user toilet and necessary 
changing facilities shall be provided to assure privacy between the 
sexes.
    (15) Maintain a record of solicitations for subcontracts for 
minority and female construction contractors and suppliers, including 
circulation of solicitations to minority and female contractor 
associations and other business associations.
    (16) Conduct a review, at least annually, of all supervisors' 
adherence to and performance under the Contractor's equal employment 
policy and affirmative action obligations.
    (h) The Contractor is encouraged to participate in voluntary 
associations that may assist in fulfilling one or more of the 
affirmative action obligations contained in subparagraphs (g)(1) through 
(16). The efforts of a contractor association, joint contractor-

[[Page 130]]

union, contractor-community, or similar group of which the contractor is 
a member and participant may be asserted as fulfilling one or more of 
its obligations under subparagraphs (g)(1) through (16), provided the 
Contractor--
    (1) Actively participates in the group;
    (2) Makes every effort to ensure that the group has a positive 
impact on the employment of minorities and women in the industry;
    (3) Ensures that concrete benefits of the program are reflected in 
the Contractor's minority and female workforce participation;
    (4) Makes a good-faith effort to meet its individual goals and 
timetables; and
    (5) Can provide access to documentation that demonstrates the 
effectiveness of actions taken on behalf of the Contractor. The 
obligation to comply is the Contractor's, and failure of such a group to 
fulfill an obligation shall not be a defense for the Contractor's 
noncompliance.
    (i) A single goal for minorities and a separate single goal for 
women shall be established. The Contractor is required to provide equal 
employment opportunity and to take affirmative action for all minority 
groups, both male and female, and all women, both minority and 
nonminority. Consequently, the Contractor may be in violation of 
Executive Order 11246, as amended, if a particular group is employed in 
a substantially disparate manner.
    (j) The Contractor shall not use goals or affirmative action 
standards to discriminate against any person because of race, color, 
religion, sex, or national origin.
    (k) The Contractor shall not enter into any subcontract with any 
person or firm debarred from Government contracts under Executive Order 
11246, as amended.
    (l) The Contractor shall carry out such sanctions and penalties for 
violation of this clause and of the Equal Opportunity clause, including 
suspension, termination, and cancellation of existing subcontracts, as 
may be imposed or ordered under Executive Order 11246, as amended, and 
its implementing regulations, by the OFCCP. Any failure to carry out 
these sanctions and penalties as ordered shall be a violation of this 
clause and Executive Order 11246, as amended.
    (m) The Contractor in fulfilling its obligations under this clause 
shall implement affirmative action procedures at least as extensive as 
those prescribed in paragraph (g) above, so as to achieve maximum 
results from its efforts to ensure equal employment opportunity. If the 
Contractor fails to comply with the requirements of Executive Order 
11246, as amended, the implementing regulations, or this clause, the 
Director shall take action as prescribed in 41 CFR 60-4.8.
    (n) The Contractor shall designate a responsible official to--
    (1) Monitor all employment-related activity to ensure that the 
Contractor's equal employment policy is being carried out;
    (2) Submit reports as may be required by the Government; and
    (3) Keep records that shall at least include for each employee the 
name, address, telephone number, construction trade, union affiliation 
(if any), employee identification number, social security number, race, 
sex, status (e.g., mechanic, apprentice, trainee, helper, or laborer), 
dates of changes in status, hours worked per week in the indicated 
trade, rate of pay, and locations at which the work was performed. 
Records shall be maintained in an easily understandable and retrievable 
form; however, to the degree that existing records satisfy this 
requirement, separate records are not required to be maintained.
    (o) Nothing contained herein shall be construed as a limitation upon 
the application of other laws that establish different standards of 
compliance or upon the requirements for the hiring of local or other 
area residents (e.g., those under the Public Works Employment Act of 
1977 and the Community Development Block Grant Program).

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 38518, Sept. 18, 1990]



Sec. 52.222-28  Equal Opportunity Preaward Clearance of Subcontracts.

    As prescribed in 22.810(g), insert the following clause:

     Equal Opportunity Preaward Clearance of Subcontracts (APR 1984)

    Notwithstanding the clause of this contract entitled Subcontracts, 
the Contractor shall not enter into a first-tier subcontract for an 
estimated or actual amount of $1 million or more without obtaining in 
writing from the Contracting Officer a clearance that the proposed 
subcontractor is in compliance with equal opportunity requirements and 
therefore is eligible for award.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 23607, June 4, 1985; 
51 FR 36972, Oct. 16, 1986]



Sec. 52.222-29  Notification of Visa Denial.

    As prescribed in 22.810(h), insert the following clause in contracts 
that will include the clause at 52.222-26, Equal

[[Page 131]]

Opportunity, if the Contractor is required to perform in or on behalf of 
a foreign country:

                 Notification of Visa Denial (APR 1984)

    It is a violation of Executive Order 11246, as amended, for a 
Contractor to refuse to employ any applicant or not to assign any person 
hired in the United States, on the basis that the individual's race, 
color, religion, sex, or national origin is not compatible with the 
policies of the country where the work is to be performed or for whom 
the work will be performed (41 CFR 60-1.10). The Contractor agrees to 
notify the Department of State, Washington, DC. Attention: Director, 
Bureau of Politico- Military Affairs, and the Director, Office of 
Federal Contract Compliance Programs, when it has knowledge of any 
employee or potential employee being denied an entry visa to a country 
in which the Contractor is required to perform this contract, and it 
believes the denial is attributable to the race, color, religion, sex, 
or national origin of the employee or potential employee.

                             (End of clause)



Sec. 52.222-30--52.222-34  [Reserved]



Sec. 52.222-35  Affirmative Action for Disabled Veterans and Veterans of the Vietnam Era.

    As prescribed in 22.1308(a)(1), insert the following clause:

Affirmative Action for Disabled Veterans and Veterans of the Vietnam ERA 
                               (APR 1998)

    (a) Definitions. As used in this clause--
    All employment openings includes all positions except executive and 
top management, those positions that will be filled from within the 
contractor's organization, and positions lasting 3 days or less. This 
term includes full-time employment, temporary employment of more than 3 
days' duration, and part-time employment.
    Appropriate office of the State employment service system means the 
local office of the Federal-State national system of public employment 
offices with assigned responsibility to serve the area where the 
employment opening is to be filled, including the District of Columbia, 
Guam, the Commonwealth of Puerto Rico, and the Virgin Islands.
    Positions that will be filled from within the Contractor's 
organization means employment openings for which no consideration will 
be given to persons outside the Contractor's organization (including any 
affiliates, subsidiaries, and parent companies) and includes any 
openings that the Contractor proposes to fill from regularly established 
``recall'' lists. The exception does not apply to a particular opening 
once an employer decides to consider applicants outside of its 
organization.
    Veteran of the Vietnam era means a person who--
    (1) Served on active duty for a period of more than 180 days, any 
part of which occurred between August 5, 1964, and May 7, 1975, and was 
discharged or released therefrom with other than a dishonorable 
discharge; or
    (2) Was discharged or released from active duty for a service-
connected disability if any part of such active duty was performed 
between August 5, 1964, and May 7, 1975.
    (b) General. (1) Regarding any position for which the employee or 
applicant for employment is qualified, the Contractor shall not 
discriminate against the individual because the individual is a disabled 
veteran or a veteran of the Vietnam era. The Contractor agrees to take 
affirmative action to employ, advance in employment, and otherwise treat 
qualified disabled veterans and veterans of the Vietnam era without 
discrimination based upon their disability or veterans' status in all 
employment practices such as--
    (i) Employment;
    (ii) Upgrading;
    (iii) Demotion or transfer;
    (iv) Recruitment;
    (v) Advertising;
    (vi) Layoff or termination;
    (vii) Rates of pay or other forms of compensation; and
    (viii) Selection for training, including apprenticeship.
    (2) The Contractor agrees to comply with the rules, regulations, and 
relevant orders of the Secretary of Labor (Secretary) issued under the 
Vietnam Era Veterans' Readjustment Assistance Act of 1972 (the Act), as 
amended.
    (c) Listing openings. (1) The Contractor agrees to list all 
employment openings existing at contract award or occurring during 
contract performance, at an appropriate office of the State employment 
service system in the locality where the opening occurs. These openings 
include those occurring at any Contractor facility, including one not 
connected with performing this contract. An independent corporate 
affiliate is exempt from this requirement.
    (2) State and local government agencies holding Federal contracts of 
$10,000 or more shall also list all employment openings with the 
appropriate office of the State employment service.
    (3) The listing of employment openings with the State employment 
service system is required at least concurrently with using any other 
recruitment source or effort and involves the obligations of placing a 
bona fide job order, including accepting referrals of veterans and 
nonveterans. This listing

[[Page 132]]

does not require hiring any particular job applicant or hiring from any 
particular group of job applicants and is not intended to relieve the 
Contractor from any requirements of Executive orders or regulations 
concerning nondiscrimination in employment.
    (4) Whenever the Contractor becomes contractually bound to the 
listing terms of this clause, it shall advise the State employment 
service system, in each State where it has establishments, of the name 
and location of each hiring location in the State. As long as the 
Contractor is contractually bound to these terms and has so advised the 
State system, it need not advise the State system of subsequent 
contracts. The Contractor may advise the State system when it is no 
longer bound by this contract clause.
    (d) Applicability. This clause does not apply to the listing of 
employment openings that occur and are filled outside the 50 States, the 
District of Columbia, the Commonwealth of Puerto Rico, Guam, and the 
Virgin Islands.
    (e) Postings. (1) The Contractor agrees to post employment notices 
stating (i) the Contractor's obligation under the law to take 
affirmative action to employ and advance in employment qualified 
disabled veterans and veterans of the Vietnam era, and (ii) the rights 
of applicants and employees.
    (2) These notices shall be posted in conspicuous places that are 
available to employees and applicants for employment. They shall be in a 
form prescribed by the Deputy Assistant Secretary for Federal Contract 
Compliance Programs, Department of Labor (Deputy Assistant Secretary), 
and provided by or through the Contracting Officer.
    (3) The Contractor shall notify each labor union or representative 
of workers with which it has a collective bargaining agreement or other 
contract understanding, that the Contractor is bound by the terms of the 
Act, and is committed to take affirmative action to employ, and advance 
in employment, qualified disabled veterans and veterans of the Vietnam 
Era.
    (f) Noncompliance. If the Contractor does not comply with the 
requirements of this clause, appropriate actions may be taken under the 
rules, regulations, and relevant orders of the Secretary issued pursuant 
to the Act.
    (g) Subcontracts. The Contractor shall include the terms of this 
clause in every subcontract or purchase order of $10,000 or more unless 
exempted by rules, regulations, or orders of the Secretary. The 
Contractor shall act as specified by the Deputy Assistant Secretary to 
enforce the terms, including action for noncompliance.

                             (End of clause)

    Alternate I (APR 1984). As prescribed in 22.1308(a)(2), add the 
following as a preamble to the clause:

    Notice: The following term(s) of this clause are waived for this 
contract: [List term(s)].

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 38518, Sept. 18, 1990; 
63 FR 9059, Feb. 23, 1998]



Sec. 52.222-36  Affirmative Action for Workers With Disabilities.

    As prescribed in 22.1408(a), insert the following clause:

       Affirmative Action for Workers With Disabilities (JUN 1998)

    (a) General. (1) Regarding any position for which the employee or 
applicant for employment is qualified, the Contractor shall not 
discriminate against any employee or applicant because of physical or 
mental disability. The Contractor agrees to take affirmative action to 
employ, advance in employment, and otherwise treat qualified individuals 
with disabilities without discrimination based upon their physical or 
mental disability in all employment practices such as--
    (i) Recruitment, advertising, and job application procedures;
    (ii) Hiring, upgrading, promotion, award of tenure, demotion, 
transfer, layoff, termination, right of return from layoff, and 
rehiring;
    (iii) Rates of pay or any other form of compensation and changes in 
compensation;
    (iv) Job assignments, job classifications, organizational 
structures, position descriptions, lines of progression, and seniority 
lists;
    (v) Leaves of absence, sick leave, or any other leave;
    (vi) Fringe benefits available by virtue of employment, whether or 
not administered by the Contractor;
    (vii) Selection and financial support for training, including 
apprenticeships, professional meetings, conferences, and other related 
activities, and selection for leaves of absence to pursue training;
    (viii) Activities sponsored by the Contractor, including social or 
recreational programs; and
    (ix) Any other term, condition, or privilege of employment.
    (2) The Contractor agrees to comply with the rules, regulations, and 
relevant orders of the Secretary of Labor (Secretary) issued under the 
Rehabilitation Act of 1973 (29 U.S.C. 793) (the Act), as amended.
    (b) Postings. (1) The Contractor agrees to post employment notices 
stating--
    (i) The Contractor's obligation under the law to take affirmative 
action to employ and advance in employment qualified individuals with 
disabilities; and
    (ii) The rights of applicants and employees.

[[Page 133]]

    (2) These notices shall be posted in conspicuous places that are 
available to employees and applicants for employment. The Contractor 
shall ensure that applicants and employees with disabilities are 
informed of the contents of the notice (e.g., the Contractor may have 
the notice read to a visually disabled individual, or may lower the 
posted notice so that it might be read by a person in a wheelchair). The 
notices shall be in a form prescribed by the Deputy Assistant Secretary 
for Federal Contract Compliance of the U.S. Department of Labor (Deputy 
Assistant Secretary) and shall be provided by or through the Contracting 
Officer.
    (3) The Contractor shall notify each labor union or representative 
of workers with which it has a collective bargaining agreement or other 
contract understanding, that the Contractor is bound by the terms of 
Section 503 of the Act and is committed to take affirmative action to 
employ, and advance in employment, qualified individuals with physical 
or mental disabilities.
    (c) Noncompliance. If the Contractor does not comply with the 
requirements of this clause, appropriate actions may be taken under the 
rules, regulations, and relevant orders of the Secretary issued pursuant 
to the Act.
    (d) Subcontracts. The Contractor shall include the terms of this 
clause in every subcontract or purchase order in excess of $10,000 
unless exempted by rules, regulations, or orders of the Secretary. The 
Contractor shall act as specified by the Deputy Assistant Secretary to 
enforce the terms, including action for noncompliance.

                             (End of clause)

    Alternate I (Jun 1998). As prescribed in 22.1408(b), add the 
following as a preamble to the clause:

    Notice: The following term(s) of this clause are waived for this 
contract:

_______________________________________________________________________

[List term(s)].

[63 FR 34075, June 22, 1998]



Sec. 52.222-37  Employment Reports on Disabled Veterans and Veterans of the Vietnam Era.

    As prescribed in 22.1308(b), insert the following clause:

Employment Reports on Disabled Veterans and Veterans of the Vietnam ERA 
                               (APR 1998)

    (a) Unless the Contractor is a State or local government agency, the 
Contractor shall report at least annually, as required by the Secretary 
of Labor, on--
    (1) The number of disabled veterans and the number of veterans of 
the Vietnam era in the workplace of the contractor by job category and 
hiring location; and
    (2) The total number of new employees hired during the period 
covered by the report, and of that total, the number of disabled 
veterans, and the number of veterans of the Vietnam era.
    (b) The above items shall be reported by completing the form 
entitled Federal Contractor Veterans' Employment Report VETS-100.
    (c) Reports shall be submitted no later than March 31 of each year 
beginning March 31, 1988.
    (d) The employment activity report required by paragraph (a)(2) of 
this clause shall reflect total hires during the most recent 12-month 
period as of the ending date selected for the employment profile report 
required by paragraph (a)(1) of this clause. Contractors may select an 
ending date: (1) As of the end of any pay period during the period 
January through March 1 of the year the report is due, or (2) as of 
December 31, if the contractor has previous written approval from the 
Equal Employment Opportunity Commission to do so for purposes of 
submitting the Employer Information Report EEO-1 (Standard Form 100).
    (e) The count of veterans reported according to paragraph (a) of 
this clause shall be based on voluntary disclosure. Each Contractor 
subject to the reporting requirements at 38 U.S.C. 4212 shall invite all 
disabled veterans and veterans of the Vietnam era who wish to benefit 
under the affirmative action program at 38 U.S.C. 4212 to identify 
themselves to the Contractor. The invitation shall state that the 
information is voluntarily provided; that the information will be kept 
confidential; that disclosure or refusal to provide the information will 
not subject the applicant or employee to any adverse treatment; and that 
the information will be used only in accordance with the regulations 
promulgated under 38 U.S.C. 4212.
    (f) Subcontracts. The Contractor shall include the terms of this 
clause in every subcontract or purchase order of $10,000 or more unless 
exempted by rules, regulations, or orders of the Secretary.

                             (End of clause)

[53 FR 663, Jan. 11, 1988; 53 FR 6219, Mar. 1, 1988, as amended at 63 FR 
9059, Feb. 23, 1998]



Sec. 52.222-38--52.222-40  [Reserved]



Sec. 52.222-41  Service Contract Act of 1965, as Amended.

    As prescribed in 22.1006(a), insert the following clause:

[[Page 134]]

           Service Contract Act of 1965, as Amended (MAY 1989)

    (a) Definitions. Act, as used in this clause, means the Service 
Contract Act of 1965, as amended (41 U.S.C. 351, et seq.).
    Contractor, as used in this clause or in any subcontract, shall be 
deemed to refer to the subcontractor, except in the term Government 
Prime Contractor.
    Service employee, as used in this clause, means any person engaged 
in the performance of this contract other than any person employed in a 
bona fide executive, administrative, or professional capacity, as these 
terms are defined in part 541 of title 29, Code of Federal Regulations, 
as revised. It includes all such persons regardless of any contractual 
relationship that may be alleged to exist between a Contractor or 
subcontractor and such persons.
    (b) Applicability. This contract is subject to the following 
provisions and to all other applicable provisions of the Act and 
regulations of the Secretary of Labor (29 CFR part 4). This clause does 
not apply to contracts or subcontracts administratively exempted by the 
Secretary of Labor or exempted by 41 U.S.C. 356, as interpreted in 
subpart C of 29 CFR part 4.
    (c) Compensation. (1) Each service employee employed in the 
performance of this contract by the Contractor or any subcontractor 
shall be paid not less than the minimum monetary wages and shall be 
furnished fringe benefits in accordance with the wages and fringe 
benefits determined by the Secretary of Labor, or authorized 
representative, as specified in any wage determination attached to this 
contract.
    (2)(i) If a wage determination is attached to this contract, the 
Contractor shall classify any class of service employee which is not 
listed therein and which is to be employed under the contract (i.e., the 
work to be performed is not performed by any classification listed in 
the wage determination) so as to provide a reasonable relationship 
(i.e., appropriate level of skill comparison) between such unlisted 
classifications and the classifications listed in the wage 
determination. Such conformed class of employees shall be paid the 
monetary wages and furnished the fringe benefits as are determined 
pursuant to the procedures in this paragraph (c).
    (ii) This conforming procedure shall be initiated by the Contractor 
prior to the performance of contract work by the unlisted class of 
employee. The Contractor shall submit Standard Form (SF) 1444, Request 
for Authorization of Additional Classification and Rate, to the 
Contracting Officer no later than 30 days after the unlisted class of 
employee performs any contract work. The Contracting Officer shall 
review the proposed classification and rate and promptly submit the 
completed SF 1444 (which must include information regarding the 
agreement or disagreement of the employees' authorized representatives 
or the employees themselves together with the agency recommendation), 
and all pertinent information to the Wage and Hour Division, Employment 
Standards Administration U.S. Department of Labor. The Wage and Hour 
Division will approve, modify, or disapprove the action or render a 
final determination in the event of disagreement within 30 days of 
receipt or will notify the Contracting Officer within 30 days of receipt 
that additional time is necessary.
    (iii) The final determination of the conformance action by the Wage 
and Hour Division shall be transmitted to the Contracting Officer who 
shall promptly notify the Contractor of the action taken. Each affected 
employee shall be furnished by the Contractor with a written copy of 
such determination or it shall be posted as a part of the wage 
determination.
    (iv)(A) The process of establishing wage and fringe benefit rates 
that bear a reasonable relationship to those listed in a wage 
determination cannot be reduced to any single formula. The approach used 
may vary from wage determination to wage determination depending on the 
circumstances. Standard wage and salary administration practices which 
rank various job classifications by pay grade pursuant to point schemes 
or other job factors may, for example, be relied upon. Guidance may also 
be obtained from the way different jobs are rated under Federal pay 
systems (Federal Wage Board Pay System and the General Schedule) or from 
other wage determinations issued in the same locality. Basic to the 
establishment of any conformable wage rate(s) is the concept that a pay 
relationship should be maintained between job classifications based on 
the skill required and the duties performed.
    (B) In the case of a contract modification, an exercise of an 
option, or extension of an existing contract, or in any other case where 
a Contractor succeeds a contract under which the classification in 
question was previously conformed pursuant to paragraph (c) of this 
clause, a new conformed wage rate and fringe benefits may be assigned to 
the conformed classification by indexing (i.e., adjusting) the previous 
conformed rate and fringe benefits by an amount equal to the average 
(mean) percentage increase (or decrease, where appropriate) between the 
wages and fringe benefits specified for all classifications to be used 
on the contract which are listed in the current wage determination, and 
those specified for the corresponding classifications in the previously 
applicable wage determination. Where conforming actions are accomplished 
in accordance with this paragraph prior to the performance of contract 
work by the unlisted

[[Page 135]]

class of employees, the Contractor shall advise the Contracting Officer 
of the action taken but the other procedures in subdivision (c)(2)(ii) 
of this clause need not be followed.
    (C) No employee engaged in performing work on this contract shall in 
any event be paid less than the currently applicable minimum wage 
specified under section 6(a)(1) of the Fair Labor Standards Act of 1938, 
as amended.
    (v) The wage rate and fringe benefits finally determined under this 
subparagraph (c)(2) of this clause shall be paid to all employees 
performing in the classification from the first day on which contract 
work is performed by them in the classification. Failure to pay the 
unlisted employees the compensation agreed upon by the interested 
parties and/or finally determined by the Wage and Hour Division 
retroactive to the date such class of employees commenced contract work 
shall be a violation of the Act and this contract.
    (vi) Upon discovery of failure to comply with subparagraph (c)(2) of 
this clause, the Wage and Hour Division shall make a final determination 
of conformed classification, wage rate, and/or fringe benefits which 
shall be retroactive to the date such class or classes of employees 
commenced contract work.
    (3) Adjustment of Compensation. If the term of this contract is more 
than 1 year, the minimum monetary wages and fringe benefits required to 
be paid or furnished thereunder to service employees under this contract 
shall be subject to adjustment after 1 year and not less often than once 
every 2 years, under wage determinations issued by the Wage and Hour 
Division.
    (d) Obligation to Furnish Fringe Benefits. The Contractor or 
subcontractor may discharge the obligation to furnish fringe benefits 
specified in the attachment or determined under subparagraph (c)(2) of 
this clause by furnishing equivalent combinations of bona fide fringe 
benefits, or by making equivalent or differential cash payments, only in 
accordance with subpart D of 29 CFR part 4.
    (e) Minimum Wage. In the absence of a minimum wage attachment for 
this contract, neither the Contractor nor any subcontractor under this 
contract shall pay any person performing work under this contract 
(regardless of whether the person is a service employee) less than the 
minimum wage specified by section 6(a)(1) of the Fair Labor Standards 
Act of 1938. Nothing in this clause shall relieve the Contractor or any 
subcontractor of any other obligation under law or contract for payment 
of a higher wage to any employee.
    (f) Successor Contracts. If this contract succeeds a contract 
subject to the Act under which substantially the same services were 
furnished in the same locality and service employees were paid wages and 
fringe benefits provided for in a collective bargaining agreement, in 
the absence of the minimum wage attachment for this contract setting 
forth such collectively bargained wage rates and fringe benefits, 
neither the Contractor nor any subcontractor under this contract shall 
pay any service employee performing any of the contract work (regardless 
of whether or not such employee was employed under the predecessor 
contract), less than the wages and fringe benefits provided for in such 
collective bargaining agreement, to which such employee would have been 
entitled if employed under the predecessor contract, including accrued 
wages and fringe benefits and any prospective increases in wages and 
fringe benefits provided for under such agreement. No Contractor or 
subcontractor under this contract may be relieved of the foregoing 
obligation unless the limitations of 29 CFR 4.1b(b) apply or unless the 
Secretary of Labor or the Secretary's authorized representative finds, 
after a hearing as provided in 29 CFR 4.10 that the wages and/or fringe 
benefits provided for in such agreement are substantially at variance 
with those which prevail for services of a character similar in the 
locality, or determines, as provided in 29 CFR 4.11, that the collective 
bargaining agreement applicable to service employees employed under the 
predecessor contract was not entered into as a result of arm's length 
negotiations. Where it is found in accordance with the review procedures 
provided in 29 CFR 4.10 and/or 4.11 and parts 6 and 8 that some or all 
of the wages and/or fringe benefits contained in a predecessor 
Contractor's collective bargaining agreement are substantially at 
variance with those which prevail for services of a character similar in 
the locality, and/or that the collective bargaining agreement applicable 
to service employees employed under the predecessor contract was not 
entered into as a result of arm's length negotiations, the Department 
will issue a new or revised wage determination setting forth the 
applicable wage rates and fringe benefits. Such determination shall be 
made part of the contract or subcontract, in accordance with the 
decision of the Administrator, the Administrative Law Judge, or the 
Board of Service Contract Appeals, as the case may be, irrespective of 
whether such issuance occurs prior to or after the award of a contract 
or subcontract (53 Comp. Gen. 401 (1973)). In the case of a wage 
determination issued solely as a result of a finding of substantial 
variance, such determination shall be effective as of the date of the 
final administrative decision.
    (g) Notification to Employees. The Contractor and any subcontractor 
under this contract shall notify each service employee commencing work 
on this contract of the minimum monetary wage and any fringe benefits 
required to be paid pursuant to this

[[Page 136]]

contract, or shall post the wage determination attached to this 
contract. The poster provided by the Department of Labor (Publication WH 
1313) shall be posted in a prominent and accessible place at the 
worksite. Failure to comply with this requirement is a violation of 
section 2(a)(4) of the Act and of this contract.
    (h) Safe and Sanitary Working Conditions. The Contractor or 
subcontractor shall not permit any part of the services called for by 
this contract to be performed in buildings or surroundings or under 
working conditions provided by or under the control or supervision of 
the Contractor or subcontractor which are unsanitary, hazardous, or 
dangerous to the health or safety of the service employees. The 
Contractor or subcontractor shall comply with the safety and health 
standards applied under 29 CFR part 1925.
    (i) Records. (1) The Contractor and each subcontractor performing 
work subject to the Act shall make and maintain for 3 years from the 
completion of the work, and make them available for inspection and 
transcription by authorized representatives of the Wage and Hour 
Division, Employment Standards Administration, a record of the 
following:
    (i) For each employee subject to the Act--
    (A) Name and address and social security number;
    (B) Correct work classification or classifications, rate or rates of 
monetary wages paid and fringe benefits provided, rate or rates of 
payments in lieu of fringe benefits, and total daily and weekly 
compensation;
    (C) Daily and weekly hours worked by each employee; and
    (D) Any deductions, rebates, or refunds from the total daily or 
weekly compensation of each employee.
    (ii) For those classes of service employees not included in any wage 
determination attached to this contract, wage rates or fringe benefits 
determined by the interested parties or by the Administrator or 
authorized representative under the terms of paragraph (c) of this 
clause. A copy of the report required by subdivision (c)(2)(ii) of this 
clause will fulfill this requirement.
    (iii) Any list of the predecessor Contractor's employees which had 
been furnished to the Contractor as prescribed by paragraph (n) of this 
clause.
    (2) The Contractor shall also make available a copy of this contract 
for inspection or transcription by authorized representatives of the 
Wage and Hour Division.
    (3) Failure to make and maintain or to make available these records 
for inspection and transcription shall be a violation of the regulations 
and this contract, and in the case of failure to produce these records, 
the Contracting Officer, upon direction of the Department of Labor and 
notification to the Contractor, shall take action to cause suspension of 
any further payment or advance of funds until the violation ceases.
    (4) The Contractor shall permit authorized representatives of the 
Wage and Hour Division to conduct interviews with employees at the 
worksite during normal working hours.
    (j) Pay Periods. The Contractor shall unconditionally pay to each 
employee subject to the Act all wages due free and clear and without 
subsequent deduction (except as otherwise provided by law or 
Regulations, 29 CFR part 4), rebate, or kickback on any account. These 
payments shall be made no later than one pay period following the end of 
the regular pay period in which the wages were earned or accrued. A pay 
period under this Act may not be of any duration longer than semi-
monthly.
    (k) Withholding of Payments and Termination of Contract. The 
Contracting Officer shall withhold or cause to be withheld from the 
Government Prime Contractor under this or any other Government contract 
with the Prime Contractor such sums as an appropriate official of the 
Department of Labor requests or such sums as the Contracting Officer 
decides may be necessary to pay underpaid employees employed by the 
Contractor or subcontractor. In the event of failure to pay any 
employees subject to the Act all or part of the wages or fringe benefits 
due under the Act, the Contracting Officer may, after authorization or 
by direction of the Department of Labor and written notification to the 
Contractor, take action to cause suspension of any further payment or 
advance of funds until such violations have ceased. Additionally, any 
failure to comply with the requirements of this clause may be grounds 
for termination of the right to proceed with the contract work. In such 
event, the Government may enter into other contracts or arrangements for 
completion of the work, charging the Contractor in default with any 
additional cost.
    (l) Subcontracts. The Contractor agrees to insert this clause in all 
subcontracts subject to the Act.
    (m) Collective Bargaining Agreements Applicable to Service 
Employees. If wages to be paid or fringe benefits to be furnished any 
service employees employed by the Government Prime Contractor or any 
subcontractor under the contract are provided for in a collective 
bargaining agreement which is or will be effective during any period in 
which the contract is being performed, the Government Prime Contractor 
shall report such fact to the Contracting Officer, together with full 
information as to the application and accrual of such wages and fringe 
benefits, including any prospective increases, to service employees 
engaged in work on the contract, and a copy of the collective bargaining 
agreement. Such report shall be made upon commencing performance of the 
contract, in the case of collective bargaining

[[Page 137]]

agreements effective at such time, and in the case of such agreements or 
provisions or amendments thereof effective at a later time during the 
period of contract performance such agreements shall be reported 
promptly after negotiation thereof.
    (n) Seniority List. Not less than 10 days prior to completion of any 
contract being performed at a Federal facility where service employees 
may be retained in the performance of the succeeding contract and 
subject to a wage determination which contains vacation or other benefit 
provisions based upon length of service with a Contractor (predecessor) 
or successor (29 CFR 4.173), the incumbent Prime Contractor shall 
furnish the Contracting Officer a certified list of the names, of all 
service employees on the Contractor's or subcontractor's payroll during 
the last month of contract performance. Such list shall also contain 
anniversary dates of employment on the contract either with the current 
or predecessor Contractors of each such service employee. The 
Contracting Officer shall turn over such list to the successor 
Contractor at the commencement of the succeeding contract.
    (o) Rulings and Interpretations. Rulings and interpretations of the 
Act are contained in Regulations, 29 CFR part 4.
    (p) Contractor's Certification. (1) By entering into this contract, 
the Contractor (and officials thereof) certifies that neither it (nor he 
or she) nor any person or firm who has a substantial interest in the 
Contractor's firm is a person or firm ineligible to be awarded 
Government contracts by virtue of the sanctions imposed under section 5 
of the Act.
    (2) No part of this contract shall be subcontracted to any person or 
firm ineligible for award of a Government contract under section 5 of 
the Act.
    (3) The penalty for making false statements is prescribed in the 
U.S. Criminal Code, 18 U.S.C. 1001.
    (q) Variations, Tolerances, and Exemptions Involving Employment. 
Notwithstanding any of the provisions in paragraphs (b) through (o) of 
this clause, the following employees may be employed in accordance with 
the following variations, tolerances, and exemptions, which the 
Secretary of Labor, pursuant to section 4(b) of the Act prior to its 
amendment by Pub. L. 92-473, found to be necessary and proper in the 
public interest or to avoid serious impairment of the conduct of 
Government business.
    (1) Apprentices, student-learners, and workers whose earning 
capacity is impaired by age, physical or mental deficiency or injury may 
be employed at wages lower than the minimum wages otherwise required by 
section 2(a)(1) or 2(b)(1) of the Act without diminishing any fringe 
benefits or cash payments in lieu thereof required under section 2(a)(2) 
of the Act, in accordance with the conditions and procedures prescribed 
for the employment of apprentices, student-learners, handicapped 
persons, and handicapped clients of sheltered workshops under section 14 
of the Fair Labor Standards Act of 1938, in the regulations issued by 
the Administrator (29 CFR parts 520, 521, 524, and 525).
    (2) The Administrator will issue certificates under the Act for the 
employment of apprentices, student-learners, handicapped persons, or 
handicapped clients of sheltered workshops not subject to the Fair Labor 
Standards Act of 1938, or subject to different minimum rates of pay 
under the two acts, authorizing appropriate rates of minimum wages (but 
without changing requirements concerning fringe benefits or 
supplementary cash payments in lieu thereof), applying procedures 
prescribed by the applicable regulations issued under the Fair Labor 
Standards Act of 1938 (29 CFR parts 520, 521, 524, and 525).
    (3) The Administrator will also withdraw, annul, or cancel such 
certificates in accordance with the regulations in 29 CFR parts 525 and 
528.
    (r) Apprentices. Apprentices will be permitted to work at less than 
the predetermined rate for the work they perform when they are employed 
and individually registered in a bona fide apprenticeship program 
registered with a State Apprenticeship Agency which is recognized by the 
U.S. Department of Labor, or if no such recognized agency exists in a 
State, under a program registered with the Bureau of Apprenticeship and 
Training, Employment and Training Administration, U.S. Department of 
Labor. Any employee who is not registered as an apprentice in an 
approved program shall be paid the wage rate and fringe benefits 
contained in the applicable wage determination for the journeyman 
classification of work actually performed. The wage rates paid 
apprentices shall not be less than the wage rate for their level of 
progress set forth in the registered program, expressed as the 
appropriate percentage of the journeyman's rate contained in the 
applicable wage determination. The allowable ratio of apprentices to 
journeymen employed on the contract work in any craft classification 
shall not be greater than the ratio permitted to the Contractor as to 
his entire work force under the registered program.
    (s) Tips. An employee engaged in an occupation in which the employee 
customarily and regularly receives more than $30 a month in tips may 
have the amount of these tips credited by the employer against the 
minimum wage required by section 2(a)(1) or section 2(b)(1) of the Act, 
in accordance with section 3(m) of the Fair Labor Standards Act and 
Regulations 29 CFR part 531. However, the amount of credit shall not 
exceed $1.34 per hour beginning January l, 1981. To use this provision--

[[Page 138]]

    (1) The employer must inform tipped employees about this tip credit 
allowance before the credit is utilized;
    (2) The employees must be allowed to retain all tips (individually 
or through a pooling arrangement and regardless of whether the employer 
elects to take a credit for tips received);
    (3) The employer must be able to show by records that the employee 
receives at least the applicable Service Contract Act minimum wage 
through the combination of direct wages and tip credit; and
    (4) The use of such tip credit must have been permitted under any 
predecessor collective bargaining agreement applicable by virtue of 
section 4(c) of the Act.
    (t) Disputes Concerning Labor Standards. The U.S. Department of 
Labor has set forth in 29 CFR parts 4, 6, and 8 procedures for resolving 
disputes concerning labor standards requirements. Such disputes shall be 
resolved in accordance with those procedures and not the Disputes clause 
of this contract. Disputes within the meaning of this clause include 
disputes between the Contractor (or any of its subcontractors) and the 
contracting agency, the U.S. Department of Labor, or the employees or 
their representatives.

                             (End of clause)

[54 FR 19828, May 8, 1989]



Sec. 52.222-42  Statement of Equivalent Rates for Federal Hires.

    As prescribed in 22.1006(b), insert the following clause:

       Statement of Equivalent Rates for Federal Hires (MAY 1989)

    In compliance with the Service Contract Act of 1965, as amended, and 
the regulations of the Secretary of Labor (29 CFR part 4), this clause 
identifies the classes of service employees expected to be employed 
under the contract and states the wages and fringe benefits payable to 
each if they were employed by the contracting agency subject to the 
provisions of 5 U.S.C. 5341 or 5332.

 This Statement is for Information Only: It Is Not a Wage Determination

 
                                                  Monetary wage--Fringe
                 Employee class                          benefits
 
                                                 .......................
                                                 .......................
                                                 .......................
                                                 .......................
                                                 .......................
                                                 .......................
 

                             (End of clause)

[54 FR 19831, May 8, 1989]



Sec. 52.222-43  Fair Labor Standards Act and Service Contract Act--Price Adjustment (Multiple Year and Option Contracts).

    As prescribed in 22.1006(c)(1), insert the following clause:

  Fair Labor Standards Act and Service Contract Act--Price Adjustment 
             (Multiple Year and Option Contracts) (MAY 1989)

    (a) This clause applies to both contracts subject to area prevailing 
wage determinations and contracts subject to collective bargaining 
agreements.
    (b) The Contractor warrants that the prices in this contract do not 
include any allowance for any contingency to cover increased costs for 
which adjustment is provided under this clause.
    (c) The wage determination, issued under the Service Contract Act of 
1965, as amended, (41 U.S.C. 351, et seq.), by the Administrator, Wage 
and Hour Division, Employment Standards Administration, U.S. Department 
of Labor, current on the anniversary date of a multiple year contract or 
the beginning of each renewal option period, shall apply to this 
contract. If no such determination has been made applicable to this 
contract, then the Federal minimum wage as established by section 
6(a)(1) of the Fair Labor Standards Act of 1938, as amended, (29 U.S.C. 
206) current on the anniversary date of a multiple year contract or the 
beginning of each renewal option period, shall apply to this contract.
    (d) The contract price or contract unit price labor rates will be 
adjusted to reflect the Contractor's actual increase or decrease in 
applicable wages and fringe benefits to the extent that the increase is 
made to comply with or the decrease is voluntarily made by the 
Contractor as a result of:
    (1) The Department of Labor wage determination applicable on the 
anniversary date of the multiple year contract, or at the beginning of 
the renewal option period. For example, the prior year wage 
determination required a minimum wage rate of $4.00 per hour. The 
Contractor chose to pay $4.10. The new wage determination increases the 
minimum rate to $4.50 per hour. Even if the Contractor voluntarily 
increases the rate to $4.75 per hour, the allowable price adjustment is 
$.40 per hour;
    (2) An increased or decreased wage determination otherwise applied 
to the contract by operation of law; or
    (3) An amendment to the Fair Labor Standards Act of l938 that is 
enacted after award of this contract, affects the minimum

[[Page 139]]

wage, and becomes applicable to this contract under law.
    (e) Any adjustment will be limited to increases or decreases in 
wages and fringe benefits as described in paragraph (c) of this clause, 
and the accompanying increases or decreases in social security and 
unemployment taxes and workers' compensation insurance, but shall not 
otherwise include any amount for general and administrative costs, 
overhead, or profit.
    (f) The Contractor shall notify the Contracting Officer of any 
increase claimed under this clause within 30 days after receiving a new 
wage determination unless this notification period is extended in 
writing by the Contracting Officer. The Contractor shall promptly notify 
the Contracting Officer of any decrease under this clause, but nothing 
in the clause shall preclude the Government from asserting a claim 
within the period permitted by law. The notice shall contain a statement 
of the amount claimed and any relevant supporting data, including 
payroll records, that the Contracting Officer may reasonably require. 
Upon agreement of the parties, the contract price or contract unit price 
labor rates shall be modified in writing. The Contractor shall continue 
performance pending agreement on or determination of any such adjustment 
and its effective date.
    (g) The Contracting Officer or an authorized representative shall 
have access to and the right to examine any directly pertinent books, 
documents, papers and records of the Contractor until the expiration of 
3 years after final payment under the contract.

                             (End of clause)

[54 FR 19831, May 8, 1989]



Sec. 52.222-44  Fair Labor Standards Act and Service Contract Act--Price Adjustment.

    As prescribed in 22.1006(c)(2), insert the following clause:

Fair Labor Standards Act and Service Contract Act--Price Adjustment (MAY 
                                  1989)

    (a) This clause applies to both contracts subject to area prevailing 
wage determinations and contracts subject to Contractor collective 
bargaining agreements.
    (b) The Contractor warrants that the prices in this contract do not 
include any allowance for any contingency to cover increased costs for 
which adjustment is provided under this clause.
    (c) The contract price or contract unit price labor rates will be 
adjusted to reflect increases or decreases by the Contractor in wages 
and fringe benefits to the extent that these increases or decreases are 
made to comply with--
    (1) An increased or decreased wage determination applied to this 
contract by operation of law; or
    (2) An amendment to the Fair Labor Standards Act of 1938 that is 
enacted subsequent to award of this contract, affects the minimum wage, 
and becomes applicable to this contract under law.
    (d) Any such adjustment will be limited to increases or decreases in 
wages and fringe benefits as described in paragraph (b) of this clause, 
and to the accompanying increases or decreases in social security and 
unemployment taxes and workers' compensation insurance; it shall not 
otherwise include any amount for general and administrative costs, 
overhead, or profit.
    (e) The Contractor shall notify the Contracting Officer of any 
increase claimed under this clause within 30 days after the effective 
date of the wage change, unless this period is extended by the 
Contracting Officer in writing. The Contractor shall promptly notify the 
Contracting Officer of any decrease under this clause, but nothing in 
the clause shall preclude the Government from asserting a claim within 
the period permitted by law. The notice shall contain a statement of the 
amount claimed and any relevant supporting data that the Contracting 
Officer may reasonably require. Upon agreement of the parties, the 
contract price or contract unit price labor rates shall be modified in 
writing. The Contractor shall continue performance pending agreement on 
or determination of any such adjustment and its effective date.
    (f) The Contracting Officer or an authorized representative shall, 
until the expiration of 3 years after final payment under the contract, 
have access to and the right to examine any directly pertinent books, 
documents, papers, and records of the Contractor.

                             (End of clause)

[54 FR 19831, May 8, 1989]



Sec. 52.222-45  [Reserved]



Sec. 52.222-46  Evaluation of Compensation for Professional Employees.

    As prescribed in 22.1103, insert the following provision:

    Evaluation of Compensation for Professional Employees (FEB 1993)

    (a) Recompetition of service contracts may in some cases result in 
lowering the compensation (salaries and fringe benefits) paid or 
furnished professional employees. This lowering can be detrimental in 
obtaining the quality of professional services needed for

[[Page 140]]

adequate contract performance. It is therefore in the Government's best 
interest that professional employees, as defined in 29 CFR 541, be 
properly and fairly compensated. As a part of their proposals, offerors 
will submit a total compensation plan setting forth salaries and fringe 
benefits proposed for the professional employees who will work under the 
contract. The Government will evaluate the plan to assure that it 
reflects a sound management approach and understanding of the contract 
requirements. This evaluation will include an assessment of the 
offeror's ability to provide uninterrupted high-quality work. The 
professional compensation proposed will be considered in terms of its 
impact upon recruiting and retention, its realism, and its consistency 
with a total plan for compensation. Supporting information will include 
data, such as recognized national and regional compensation surveys and 
studies of professional, public and private organizations, used in 
establishing the total compensation structure.
    (b) The compensation levels proposed should reflect a clear 
understanding of work to be performed and should indicate the capability 
of the proposed compensation structure to obtain and keep suitably 
qualified personnel to meet mission objectives. The salary rates or 
ranges must take into account differences in skills, the complexity of 
various disciplines, and professional job difficulty. Additionally, 
proposals envisioning compensation levels lower than those of 
predecessor contractors for the same work will be evaluated on the basis 
of maintaining program continuity, uninterrupted high-quality work, and 
availability of required competent professional service employees. 
Offerors are cautioned that lowered compensation for essentially the 
same professional work may indicate lack of sound management judgment 
and lack of understanding of the requirement.
    (c) The Government is concerned with the quality and stability of 
the work force to be employed on this contract. Professional 
compensation that is unrealistically low or not in reasonable 
relationship to the various job categories, since it may impair the 
Contractor's ability to attract and retain competent professional 
service employees, may be viewed as evidence of failure to comprehend 
the complexity of the contract requirements.
    (d) Failure to comply with these provisions may constitute 
sufficient cause to justify rejection of a proposal.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 57 FR 60582, Dec. 21, 1992]



Sec. 52.222-47  SCA Minimum Wages and Fringe Benefits Applicable to Successor Contract Pursuant to Predecessor Contractor Collective Bargaining Agreements 
          (CBA).

    As prescribed in 22.1006(d) and 22.1012-3(d)(1), insert the 
following clause:

 Service Contract Act (SCA) Minimum Wages and Fringe Benefits (MAY 1989)

    An SCA wage determination applicable to this work has been requested 
from the U.S. Department of Labor. If an SCA wage determination is not 
incorporated herein, the bidders/offerors shall consider the economic 
terms of the collective bargaining agreement (CBA) between the incumbent 
Contractor ____________ and the ____________ (union). If the economic 
terms of the collective bargaining agreement or the collective 
bargaining agreement itself is not attached to the solicitation, copies 
can be obtained from the Contracting Officer. Pursuant to Department of 
Labor Regulation, 29 CFR 4.1b and paragraph (g) of the clause at 52.222-
41, Service Contract Act of 1965, as amended, the economic terms of that 
agreement will apply to the contract resulting from this solicitation, 
notwithstanding the absence of a wage determination reflecting such 
terms, unless it is determined that the agreement was not the result of 
arm's length negotiations or that after a hearing pursuant to section 
4(c) of the Act, the economic terms of the agreement are substantially 
at variance with the wages prevailing in the area.

                             (End of clause)

[54 FR 19831, May 8, 1989]



Sec. 52.222-48  Exemption From Application of Service Contract Act Provisions for Contracts for Maintenance, Calibration, and/or Repair of Certain Information 

Technology, Scientific and Medical and/or Office and Business 
          Equipment--Contractor Certification.

    As prescribed in 22.1006(e)(1), insert the following clause:

   Exemption From Application of Service Contract Act Provisions For 
    Contracts For Maintenance, Calibration, and/or Repair of Certain 
    Information Technology, Scientific and Medical and/or Office and 
         Business Equipment--Contractor Certification (AAU 1996)

    (a) The following certification shall be checked:

[[Page 141]]

                              Certification

    The offeror certifies (  )/does not certify (  ) that:
    (1) The items of equipment to be serviced under this contract are 
commercial items which are used regularly for other than Government 
purposes, and are sold or traded by the Contractor in substantial 
quantities to the general public in the course of normal business 
operations;
    (2) The contract services are furnished at prices which are, or are 
based on, established catalog or market prices for the maintenance, 
calibration, and/or repair of certain information technology, scientific 
and medical and/or office and business equipment. An ``established 
catalog price'' is a price (including discount price) recorded in a 
catalog, price list, schedule, or other verifiable and established 
record that is regularly maintained by the manufacturer or the 
Contractor and is either published or otherwise available for inspection 
by customers. An ``established market price'' is a current price, 
established in the course of ordinary and usual trade between buyers and 
sellers free to bargain, which can be substantiated by data from sources 
independent of the manufacturer or Contractor; and
    (3) The Contractor utilizes the same compensation (wage and fringe 
benefits) plan for all service employees performing work under the 
contract as the Contractor uses for equivalent employees servicing the 
same equipment of commercial customers.
    (b) If a negative certification is made and a Service Contract Act 
wage determination is not attached to the solicitation, the Contractor 
shall notify the Contracting Officer as soon as possible.
    (c) Failure to execute the certification in paragraph (a) of this 
clause or to contact the Contracting Officer as required in paragraph 
(b) of this clause may render the bid or offer nonresponsive.

                             (End of clause)

[54 FR 19832, May 8, 1989, as amended at 60 FR 48221, Sept. 18, 1995; 61 
FR 41471, Aug. 8, 1996]



Sec. 52.222-49  Service Contract Act--Place of Performance Unknown.

    As prescribed in 22.1006(f) and 22.1009-4(c), insert the following 
clause:

      Service Contract Act--Place of Performance Unknown (MAY 1989)

    (a) This contract is subject to the Service Contract Act, and the 
place of performance was unknown when the solicitation was issued. In 
addition to places or areas identified in wage determinations, if any, 
attached to the solicitation, wage determinations have also been 
requested for the following: ____________ (insert places or areas). The 
Contracting Officer will request wage determinations for additional 
places or areas of performance if asked to do so in writing by 
____________ (insert time and date).
    (b) Offerors who intend to perform in a place or area of performance 
for which a wage determination has not been attached or requested may 
nevertheless submit bids or proposals. However, a wage determination 
shall be requested and incorporated in the resultant contract 
retroactive to the date of contract award, and there shall be no 
adjustment in the contract price.

                             (End of clause)

[54 FR 19832, May 8, 1989]



Sec. 52.222-50  Nondisplacement of Qualified Workers.

    As prescribed in 22.1208, insert the following clause:

             Nondisplacement of Qualified Workers (AUG 1997)

    (a) Definition. Service employee, as used in this clause, means any 
person engaged in the performance of recurring building services other 
than a person employed in a bona fide executive, administrative, or 
professional capacity, as those terms are defined in 29 CFR part 541, 
and shall include all such persons regardless of any contractual 
relationship that may be alleged to exist between a contractor and such 
person.
    (b) Consistent with the efficient performance of this contract, the 
Contractor shall, except as otherwise provided herein, in good faith 
offer those employees engaged in the performance of building services 
(other than managerial and supervisory employees) under the predecessor 
contract, whose employment will be terminated as a result of award of 
this contract or the expiration of the contract under which the 
employees were hired, a right of first refusal to employment under the 
contract in positions for which the employees are qualified. The 
Contractor shall determine the number of employees necessary for 
efficient performance of this contract and may elect to employ fewer 
employees than the predecessor contractor employed in connection with 
performance of the work. Where the Contractor offers a right of first 
refusal to fewer employees than were employed by the predecessor 
contractor, its obligation under the contract to the predecessor's 
employees to fill vacancies created by increased staffing levels or by 
employee termination, either voluntarily or for cause, continues for 3 
months after commencement of the contract. Except as provided in 
paragraph (c) of this clause, the Contractor shall not offer

[[Page 142]]

employment under the contract to any person prior to having complied 
fully with this obligation.
    (c) Notwithstanding the Contractor's obligation under paragraph (b) 
of this clause, the Contractor (1) may employ on the contract any 
employee who has worked for the Contractor for at least 3 months 
immediately preceding the commencement of this contract and who would 
otherwise face layoff or discharge, (2) is not required to offer a right 
of first refusal to any employee(s) of the predecessor contractor who 
are not service employees, and (3) is not required to offer a right of 
first refusal to any employee(s) of the predecessor contractor who the 
Contractor reasonably believes, based on the particular employee's past 
performance, has failed to perform suitably on the job. Examples of 
permissible sources for this determination include evidence of 
disciplinary action based on poor performance or evidence from the 
contracting agency that the particular employee did not perform 
suitably. Offers of employment are governed by the following:
    (i) The offer shall state the time within which the employee must 
accept such offer, but in no case shall the period for acceptance be 
less than 10 days.
    (ii) The offer may be made by separate written notice to each 
employee, or orally at a meeting attended by a group of the predecessor 
contractor's employees.
    (iii) An offer need not be to a position similar to that which the 
employee previously held, but the employee must be qualified for the 
position.
    (iv) An offer to a position providing lower pay or benefits than the 
employee held with the predecessor contractor will be considered bona 
fide if the Contractor shows valid business reasons.
    (v) To ensure that an offer is effectively communicated, the 
Contractor should take reasonable efforts to make the offer in a 
language that each worker understands; for example, by having a co-
worker or other person fluent in the worker's language at the meeting to 
translate or otherwise assist an employee who is not fluent in English.
    (d) For a period of 1 year, the Contractor shall maintain copies of 
any written offers of employment or a contemporaneous written record of 
any oral offers of employment, including the date, location, and 
attendance roster of any employee meeting(s) at which the offers were 
extended, a summary of each meeting, a copy of any written notice that 
may have been distributed, and the names of the predecessor's employees 
to whom an offer was made. Copies of such documentation shall be 
provided upon request to any authorized representative of the 
contracting agency or the Department of Labor.
    (e) The Contractor shall, no less than 60 days before completion of 
this contract, furnish the Contracting Officer with a certified list of 
the names of all service employees engaged in the performance of 
building services, working for the Contractor at the Federal facility at 
the time the list is submitted. The list also shall contain anniversary 
dates of employment on the contract either with the current or 
predecessor contractors of each service employee, as appropriate. The 
Contracting Officer will provide the list to the successor contractor, 
and the list shall be provided upon request to employees or their 
representatives. Submission of this list will satisfy the requirements 
of paragraph (n) of the clause at 52.222-41, Service Contract Act of 
1965, as Amended.
    (f) The requirements of this clause do not apply to services where a 
majority of the Contractor's employees performing the particular 
services under the contract work at the public building and at other 
locations under contracts not subject to Executive Order 12933, provided 
that the employees are not deployed in a manner that is designed to 
avoid the purposes of the Executive Order.
    (g) If it is determined, pursuant to regulations issued by the 
Secretary of Labor, that the Contractor is not in compliance with the 
requirements of this clause or any regulation or order of the Secretary, 
appropriate sanctions may be imposed and remedies invoked against the 
Contractor, as provided in Executive Order 12933, the regulations of the 
Secretary of Labor at 29 CFR part 9, and relevant orders of the 
Secretary of Labor, or as otherwise provided by law.
    (h) The Contractor is advised that the Contracting Officer shall 
withhold or cause to be withheld from the Contractor, under this or any 
other Government contract with the Contractor, such sums as an 
authorized official of the Department of Labor requests, upon a 
determination by the Administrator of the Wage and Hour Division, the 
Administrative Law Judge, or the Administrative Review Board, that the 
Contractor failed to comply with the terms of this clause, and that 
wages lost as a result of the violations are due to employees or that 
other monetary relief is appropriate.
    (i) The Contractor shall cooperate in any investigation by the 
contracting agency or the Department of Labor into possible violations 
of the provisions of this clause and shall make records requested by 
such official(s) available for inspection, copying, or transcription 
upon request.
    (j) Disputes concerning the requirements of this clause shall not be 
subject to the general disputes clause of this contract. Such disputes 
shall be resolved in accordance with applicable law and the procedures 
of the Department of Labor set forth in 29 CFR part 9. Disputes 
concerning the requirements of this clause include disputes between or 
among any of the following: The Contractor, the contracting agency, the 
U.S. Department of

[[Page 143]]

Labor, and the employees under the contract or its predecessor contract.

                             (End of clause)

[62 FR 44826, Aug. 22, 1997]



Sec. 52.223-1  Clean Air and Water Certification.

    As prescribed in 23.105(a), insert the following provision in 
solicitations containing the clause at 52.223-2, Clean Air and Water.

              Clean Air and Water Certification (APR 1984)

    The Offeror certifies that--
    (a) Any facility to be used in the performance of this proposed 
contract is {time} , is not {time}  listed on the Environmental 
Protection Agency (EPA) List of Violating Facilities;
    (b) The Offeror will immediately notify the Contracting Officer, 
before award, of the receipt of any communication from the 
Administrator, or a designee, of the EPA, indicating that any facility 
that the Offeror proposes to use for the performance of the contract is 
under consideration to be listed on the EPA List of Violating 
Facilities; and
    (c) The Offeror will include a certification substantially the same 
as this certification, including this paragraph (c), in every nonexempt 
subcontract.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 38518, Sept. 18, 1990]



Sec. 52.223-2  Clean Air and Water.

    As prescribed in 23.105(b), insert the following clause in 
solicitations and contracts to which subpart 23.1 applies (see 23.101) 
if (a) the contract is expected to exceed $100,000; (b) the contracting 
officer believes that orders under an indefinite quantity contract in 
any year will exceed $100,000; or (c) a facility to be used has been the 
subject of a conviction under the applicable portion of the Air Act (42 
U.S.C. 7413(c)(1)) or the Water Act (33 U.S.C. 1319(c)) and is listed by 
EPA as a violating facility; and (d) the acquisition is not otherwise 
exempt under 23.104.

                     Clean Air and Water (APR 1984)

    (a) Air Act, as used in this clause, means the Clean Air Act (42 
U.S.C. 7401 et seq.).
    Clean air standards, as used in this clause, means--
    (1) Any enforceable rules, regulations, guidelines, standards, 
limitations, orders, controls, prohibitions, work practices, or other 
requirements contained in, issued under, or otherwise adopted under the 
Air Act or Executive Order 11738;
    (2) An applicable implementation plan as described in section 110(d) 
of the Air Act (42 U.S.C. 7410(d));
    (3) An approved implementation procedure or plan under section 
111(c) or section 111(d) of the Air Act (42 U.S.C. 7411 (c) or (d)); or
    (4) An approved implementation procedure under section 112(d) of the 
Air Act (42 U.S.C. 7412(d)).
    Clean water standards, as used in this clause, means any enforceable 
limitation, control, condition, prohibition, standard, or other 
requirement promulgated under the Water Act or contained in a permit 
issued to a discharger by the Environmental Protection Agency (EPA) or 
by a State under an approved program, as authorized by section 402 of 
the Water Act (33 U.S.C. 1342), or by local government to ensure 
compliance with pretreatment regulations as required by section 307 of 
the Water Act (33 U.S.C. 1317).
    Compliance, as used in this clause, means compliance with--
    (1) Clean air or water standards; or
    (2) A schedule or plan ordered or approved by a court of competent 
jurisdiction, the Environmental Protection Agency (EPA), or an air or 
water pollution control agency under the requirements of the Air Act or 
Water Act and related regulations.
    Facility, as used in this clause, means any building, plant, 
installation, structure, mine, vessel or other floating craft, location, 
or site of operations, owned, leased, or supervised by a Contractor or 
subcontractor, used in the performance of a contract or subcontract. 
When a location or site of operations includes more than one building, 
plant, installation, or structure, the entire location or site shall be 
deemed a facility except when the Administrator, or a designee, of the 
Environmental Protection Agency (EPA) determines that independent 
facilities are collocated in one geographical area.
    Water Act, as used in this clause, means Clean Water Act (33 U.S.C. 
1251 et seq.).
    (b) The Contractor agrees--
    (1) To comply with all the requirements of section 114 of the Clean 
Air Act (42 U.S.C. 7414) and section 308 of the Clean Water Act (33 
U.S.C. 1318) relating to inspection, monitoring, entry, reports, and 
information, as well as other requirements specified in section 114 and 
section 308 of the Air Act and the Water Act, and all regulations and 
guidelines issued to implement those acts before the award of this 
contract;
    (2) That no portion of the work required by this prime contract will 
be performed in a facility listed on the EPA List of Violating 
Facilities on the date when this contract was awarded unless and until 
the EPA eliminates the name of the facility from the listing;

[[Page 144]]

    (3) To use best efforts to comply with clean air standards and clean 
water standards at the facility in which the contract is being 
performed; and
    (4) To insert the substance of this clause into any nonexempt 
subcontract, including this subparagraph (b)(4).

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 38518, Sept. 18, 1990]



Sec. 52.223-3  Hazardous Material Identification and Material Safety Data.

    As prescribed in 23.303, insert the following clause:

  Hazardous Material Identification and Material Safety Data (JAN 1997)

    (a) Hazardous material, as used in this clause, includes any 
material defined as hazardous under the latest version of Federal 
Standard No. 313 (including revisions adopted during the term of the 
contract).
    (b) The offeror must list any hazardous material, as defined in 
paragraph (a) of this clause, to be delivered under this contract. The 
hazardous material shall be properly identified and include any 
applicable identification number, such as National Stock Number or 
Special Item Number. This information shall also be included on the 
Material Safety Data Sheet submitted under this contract.

Material (If none, insert None)
_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________

Identification No.

_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________

    (c) This list must be updated during performance of the contract 
whenever the Contractor determines that any other material to be 
delivered under this contract is hazardous.
    (d) The apparently successful offeror agrees to submit, for each 
item as required prior to award, a Material Safety Data Sheet, meeting 
the requirements of 29 CFR 1910.1200(g) and the latest version of 
Federal Standard No. 313, for all hazardous material identified in 
paragraph (b) of this clause. Data shall be submitted in accordance with 
Federal Standard No. 313, whether or not the apparently successful 
offeror is the actual manufacturer of these items. Failure to submit the 
Material Safety Data Sheet prior to award may result in the apparently 
successful offeror being considered nonresponsible and ineligible for 
award.
    (e) If, after award, there is a change in the composition of the 
item(s) or a revision to Federal Standard No. 313, which renders 
incomplete or inaccurate the data submitted under paragraph (d) of this 
clause, the Contractor shall promptly notify the Contracting Officer and 
resubmit the data.
    (f) Neither the requirements of this clause nor any act or failure 
to act by the Government shall relieve the Contractor of any 
responsibility or liability for the safety of Government, Contractor, or 
subcontractor personnel or property.
    (g) Nothing contained in this clause shall relieve the Contractor 
from complying with applicable Federal, State, and local laws, codes, 
ordinances, and regulations (including the obtaining of licenses and 
permits) in connection with hazardous material.
    (h) The Government's rights in data furnished under this contract 
with respect to hazardous material are as follows:
    (1) To use, duplicate and disclose any data to which this clause is 
applicable. The purposes of this right are to--
    (i) Apprise personnel of the hazards to which they may be exposed in 
using, handling, packaging, transporting, or disposing of hazardous 
materials;
    (ii) Obtain medical treatment for those affected by the material; 
and
    (iii) Have others use, duplicate, and disclose the data for the 
Government for these purposes.
    (2) To use, duplicate, and disclose data furnished under this 
clause, in accordance with subparagraph (h)(1) of this clause, in 
precedence over any other clause of this contract providing for rights 
in data.
    (3) The Government is not precluded from using similar or identical 
data acquired from other sources.

                             (End of clause)

    Alternate I (JUL 1995). If the contract is awarded by an agency 
other than the Department of Defense, add the following paragraph (i) to 
the basic clause:

    (i) Except as provided in paragraph (i)(2) the Contractor shall 
prepare and submit a sufficient number of Material Safety Data Sheets 
(MSDS's), meeting the requirements of 29 CFR 1910.1200(g) and the latest 
version of Federal Standard No. 313, for all hazardous materials 
identified in paragraph (b) of this clause.
    (1) For items shipped to consignees, the Contractor shall include a 
copy of the MSDS with the packing list or other suitable shipping 
document which accompanies each shipment. Alternatively, the Contractor 
is permitted to transmit MSDS's to consignees in advance of receipt of 
shipments by consignees, if authorized in writing by the Contracting 
Officer.

[[Page 145]]

    (2) For items shipped to consignees identified by mailing address as 
agency depots, distribution centers or customer supply centers, the 
Contractor shall provide one copy of the MSDS's in or on each shipping 
container. If affixed to the outside of each container, the MSDS must be 
placed in a weather resistant envelope.

[56 FR 55375, Oct. 25, 1991, as amended at 60 FR 34740, July 3, 1995; 62 
FR 238, Jan. 2, 1997]



Sec. 52.223-4  Recovered Material Certification.

    As prescribed in 23.405(a), insert the following provision:

               Recovered Material Certification (OCT 1997)

    As required by the Resource Conservation and Recovery Act of 1976 
(42 U.S.C. 6962(c)(3)(A)(i)), the offeror certifies, by signing this 
offer, that the percentage of recovered materials to be used in the 
performance of the contract will be at least the amount required by the 
applicable contract specifications.

                           (End of provision)

[62 FR 44812, Aug. 22, 1997]



Sec. 52.223-5  Pollution Prevention and Right-to-Know Information.

    As prescribed in 23.1005, insert the following clause:

      Pollution Prevention and Right-to-Know Information (APR 1998)

    (a) Executive Order 12856 of August 3, 1993, requires Federal 
facilities to comply with the provisions of the Emergency Planning and 
Community Right-to-Know Act of 1986 (EPCRA) (42 U.S.C. 11001-11050) and 
the Pollution Prevention Act of 1990 (PPA) (42 U.S.C. 13101-13109).
    (b) The Contractor shall provide all information needed by the 
Federal facility to comply with the emergency planning reporting 
requirements of Section 302 of EPCRA; the emergency notice requirements 
of Section 304 of EPCRA; the list of Material Safety Data Sheets 
required by Section 311 of EPCRA; the emergency and hazardous chemical 
inventory forms of Section 312 of EPCRA; the toxic chemical release 
inventory of Section 313 of EPCRA, which includes the reduction and 
recycling information required by Section 6607 of PPA; and the toxic 
chemical reduction goals requirements of Section 3-302 of Executive 
Order 12856.

                             (End of clause)

[62 FR 12697, Mar. 17, 1997, as amended at 63 FR 9052, Feb. 23, 1998]



Sec. 52.223-6  Drug-Free Workplace.

    As prescribed in 23.505, insert the following clause:

                     Drug-Free Workplace (JAN 1997)

    (a) Definitions. As used in this clause--
    Controlled substance means a controlled substance in schedules I 
through V of section 202 of the Controlled Substances Act (21 U.S.C. 
812) and as further defined in regulation at 21 CFR 1308.11-1308.15.
    Conviction means a finding of guilt (including a plea of nolo 
contendere) or imposition of sentence, or both, by any judicial body 
charged with the responsibility to determine violations of the Federal 
or State criminal drug statutes.
    Criminal drug statute means a Federal or non-Federal criminal 
statute involving the manufacture, distribution, dispensing, possession 
or use of any controlled substance.
    Drug-free workplace means the site(s) for the performance of work 
done by the Contractor in connection with a specific contract at which 
employees of the Contractor are prohibited from engaging in the unlawful 
manufacture, distribution, dispensing, possession, or use of a 
controlled substance.
    Employee means an employee of a Contractor directly engaged in the 
performance of work under a Government contract. Directly engaged is 
defined to include all direct cost employees and any other Contractor 
employee who has other than a minimal impact or involvement in contract 
performance.
    Individual means an offeror/contractor that has no more than one 
employee including the offeror/contractor.
    (b) The Contractor, if other than an individual, shall--within 30 
days after award (unless a longer period is agreed to in writing for 
contracts of 30 days or more performance duration); or as soon as 
possible for contracts of less than 30 days performance duration--
    (1) Publish a statement notifying its employees that the unlawful 
manufacture, distribution, dispensing, possession, or use of a 
controlled substance is prohibited in the contractor's workplace and 
specifying the actions that will be taken against employees for 
violations of such prohibition;
    (2) Establish an ongoing drug-free awareness program to inform such 
employees about--
    (i) The dangers of drug abuse in the workplace;
    (ii) The contractor's policy of maintaining a drug-free workplace;

[[Page 146]]

    (iii) Any available drug counseling, rehabilitation, and employee 
assistance programs; and
    (iv) The penalties that may be imposed upon employees for drug abuse 
violations occurring in the workplace.
    (3) Provide all employees engaged in performance of the contract 
with a copy of the statement required by subparagraph (b)(1) of this 
clause;
    (4) Notify such employees in writing in the statement required by 
subparagraph (b)(1) of this clause that, as a condition of continued 
employment on this contract, the employee will--
    (i) Abide by the terms of the statement; and
    (ii) Notify the employer in writing of the employee's conviction 
under a criminal drug statute for a violation occurring in the workplace 
no later than 5 days after such conviction.
    (5) Notify the Contracting Officer in writing within 10 days after 
receiving notice under subdivision (b)(4)(ii) of this clause, from an 
employee or otherwise receiving actual notice of such conviction. The 
notice shall include the position title of the employee;
    (6) Within 30 days after receiving notice under subdivision 
(b)(4)(ii) of this clause of a conviction, take one of the following 
actions with respect to any employee who is convicted of a drug abuse 
violation occurring in the workplace:
    (i) Taking appropriate personnel action against such employee, up to 
and including termination; or
    (ii) Require such employee to satisfactorily participate in a drug 
abuse assistance or rehabilitation program approved for such purposes by 
a Federal, State, or local health, law enforcement, or other appropriate 
agency; and
    (7) Make a good faith effort to maintain a drug-free workplace 
through implementation of subparagraphs (b)(1) through (b)(6) of this 
clause.
    (c) The Contractor, if an individual, agrees by award of the 
contract or acceptance of a purchase order, not to engage in the 
unlawful manufacture, distribution, dispensing, possession, or use of a 
controlled substance while performing this contract.
    (d) In addition to other remedies available to the Government, the 
Contractor's failure to comply with the requirements of paragraph (b) or 
(c) of this clause may, pursuant to FAR 23.506, render the Contractor 
subject to suspension of contract payments, termination of the contract 
for default, and suspension or debarment.

                             (End of clause)

[54 FR 4970, Jan. 31, 1989; 54 FR 6931, Feb. 15, 1989, as amended at 55 
FR 21708, May 25, 1990; 55 FR 30465, July 26, 1990; 61 FR 69292, Dec. 
31, 1996]



Sec. 52.223-7  Notice of radioactive materials.

    As prescribed in 23.602, insert the following clause:

               Notice of Radioactive Materials (JAN 1997)

    (a) The Contractor shall notify the Contracting Officer or designee, 
in writing, ______ * days prior to the delivery of, or prior to 
completion of any servicing required by this contract of, items 
containing either (1) radioactive material requiring specific licensing 
under the regulations issued pursuant to the Atomic Energy Act of 1954, 
as amended, as set forth in title 10 of the Code of Federal Regulations, 
in effect on the date of this contract, or (2) other radioactive 
material not requiring specific licensing in which the specific activity 
is greater than 0.002 microcuries per gram or the activity per item 
equals or exceeds 0.01 microcuries. Such notice shall specify the part 
or parts of the items which contain radioactive materials, a description 
of the materials, the name and activity of the isotope, the manufacturer 
of the materials, and any other information known to the Contractor 
which will put users of the items on notice as to the hazards involved 
(OMB No. 9000-0107).
---------------------------------------------------------------------------

    * The Contracting Officer shall insert the number of days required 
in advance of delivery of the item or completion of the servicing to 
assure that required licenses are obtained and appropriate personnel are 
notified to institute any necessary safety and health precautions. See 
FAR 23.601(d).
---------------------------------------------------------------------------

    (b) If there has been no change affecting the quantity of activity, 
or the characteristics and composition of the radioactive material from 
deliveries under this contract or prior contracts, the Contractor may 
request that the Contracting Officer or designee waive the notice 
requirement in paragraph (a) of this clause. Any such request shall--
    (1) Be submitted in writing;
    (2) State that the quantity of activity, characteristics, and 
composition of the radioactive material have not changed; and
    (3) Cite the contract number on which the prior notification was 
submitted and the contracting office to which it was submitted.
    (c) All items, parts, or subassemblies which contain radioactive 
materials in which the specific activity is greater than 0.002 
microcuries per gram or activity per item equals

[[Page 147]]

or exceeds 0.01 microcuries, and all containers in which such items, 
parts or subassemblies are delivered to the Government shall be clearly 
marked and labeled as required by the latest revision of MIL-STD 129 in 
effect on the date of the contract.
    (d) This clause, including this paragraph (d), shall be inserted in 
all subcontracts for radioactive materials meeting the criteria in 
paragraph (a) of this clause.

                             (End of clause)

[56 FR 55375, Oct. 25, 1991, as amended at 62 FR 239, Jan. 2, 1997]



Sec. 52.223-8  [Reserved]



Sec. 52.223-9   Certification and Estimate of Percentage of Recovered Material Content for EPA Designated Items.

    As prescribed in 23.405(b), insert the following clause:

 Certification and Estimate of Percentage of Recovered Material Content 
                   For EPA Designated Items (OCT 1997)

    (a) As required by the Resource Conservation and Recovery Act of 
1976 (42 U.S.C. 6962(j)(2)(C)), the Contractor shall execute the 
following certification:

                              Certification

    I, __________ (name of certifier), am an officer or employee 
responsible for the performance of this contract and hereby certify that 
the percentage of recovered material content for EPA Designated Items 
was at least the amount required by the applicable contract 
specifications.

_______________________________________________________________________
[Signature of the Officer or Employee]

_______________________________________________________________________
[Typed Name of the Officer or Employee]

_______________________________________________________________________
[Title]

_______________________________________________________________________
[Name of Company, Firm, or Organization]

_______________________________________________________________________
[Date]

                         (End of certification)

    (b) The Contractor also shall estimate the percentage of recovered 
materials actually used in the performance of this contract. The 
estimate is in addition to the certification in paragraph (a) of this 
clause.

                                Estimate
------------------------------------------------------------------------
                                                         Percentage of
                                   Total dollar value      recovered
       EPA designated item         of EPA designated    material content
                                          item                 *
------------------------------------------------------------------------
                                  ...................  .................
                                  ...................  .................
                                  ...................  .................
------------------------------------------------------------------------
* Where applicable, also include the percentage of postconsumer material
  content.

    (c) The Contractor shall submit this certification and estimate upon 
completion of the contract to

_______________________________________________________________________
    *To be completed in accordance with agency procedures.

                             (End of clause)

[62 FR 44812, Aug. 22, 1997]



Sec. 52.223-10  Waste Reduction Program.

    As prescribed in 23.706, insert the following clause:

                   Waste Reduction Program (OCT 1997)

    (a) Definition. Waste reduction, as used in this clause, means 
preventing or decreasing the amount of waste being generated through 
waste prevention, recycling, or purchasing recycled and environmentally 
preferable products.
    (b) Consistent with the requirements of Section 701 of Executive 
Order 12873, the Contractor shall establish a program to promote cost-
effective waste reduction in all operations and facilities covered by 
this contract. Any such program shall comply with applicable Federal, 
State, and local requirements, specifically including Section 6002 of 
the Resource Conservation and Recovery Act (42 U.S.C. 6901, et seq.) and 
implementing regulations.

                             (End of clause)

[60 FR 28499, May 31, 1995, as amended at 62 FR 44813, Aug. 22, 1997]



Sec. 52.223-11  Ozone-Depleting Substances.

    As prescribed in 23.804(a), insert the following clause:

                  Ozone-Depleting Substances (JUN 1996)

    (a) Definitions. Ozone-depleting substance, as used in this clause, 
means any substance designated as Class I by the Environmental 
Protection Agency (EPA) (40 CFR part 82), including but not limited to 
chlorofluorocarbons, halons, carbon tetrachloride, and methyl 
chloroform; or any substance designated as Class II by EPA (40 CFR

[[Page 148]]

part 82), including but not limited to hydrochlorofluorocarbons.
    (b) The Contractor shall label products which contain or are 
manufactured with ozone-depleting substances in the manner and to the 
extent required by 42 U.S.C. 7671j (b), (c), and (d) and 40 CFR part 82, 
subpart E, as follows:
    ``WARNING: Contains (or manufactured with, if applicable)
*, a substance(s) which harm(s) public health and environment by 
destroying ozone in the upper atmosphere.''_____________________________
    * The Contractor shall insert the name of the substance(s).

                             (End of clause)

[61 FR 31645, June 20, 1996]



Sec. 52.223-12  Refrigeration Equipment and Air Conditioners.

    As prescribed in 23.804(b), insert the following clause:

         Refrigeration Equipment and Air Conditioners (MAY 1995)

    The Contractor shall comply with the applicable requirements of 
sections 608 and 609 of the Clean Air Act (42 U.S.C. 7671g and 7671h) as 
each or both apply to this contract.

                             (End of clause)

[60 FR 28501, May 31, 1995]



Sec. 52.223-13  Certification of Toxic Chemical Release Reporting.

    As prescribed in 23.907(a), insert the following provision:

     Certification of Toxic Chemical Release Reporting (OCT 7, 1996)

    (a) Submission of this certification is a prerequisite for making or 
entering into this contract imposed by Executive Order 12969, August 8, 
1995.
    (b) By signing this offer, the offeror certifies that--
    (1) As the owner or operator of facilities that will be used in the 
performance of this contract that are subject to the filing and 
reporting requirements described in section 313 of the Emergency 
Planning and Community Right-to-Know Act of 1986 (EPCRA) (42 U.S.C. 
11023) and section 6607 of the Pollution Prevention Act of 1990 (PPA) 
(42 U.S.C. 13106), the offeror will file and continue to file for such 
facilities for the life of the contract the Toxic Chemical Release 
Inventory Form (Form R) as described in sections 313 (a) and (g) of 
EPCRA and section 6607 of PPA; or
    (2) None of its owned or operated facilities to be used in the 
performance of this contract is subject to the Form R filing and 
reporting requirements because each such facility is exempt for at least 
one of the following reasons: (Check each block that is applicable.)
    {time}  (i) The facility does not manufacture, process, or otherwise 
use any toxic chemicals listed under section 313(c) of EPCRA, 42 U.S.C. 
11023(c);
    {time}  (ii) The facility does not have 10 or more full-time 
employees as specified in section 313(b)(1)(A) of EPCRA, 42 U.S.C. 
11023(b)(1)(A);
    {time}  (iii) The facility does not meet the reporting thresholds of 
toxic chemicals established under section 313(f) of EPCRA, 42 U.S.C. 
11023(f) (including the alternate thresholds at 40 CFR 372.27, provided 
an appropriate certification form has been filed with EPA);
    {time}  (iv) The facility does not fall within Standard Industrial 
Classification Code (SIC) designations 20 through 39 as set forth in 
Section 19.102 of the Federal Acquisition Regulation; or
    {time}  (v) The facility is not located within any State of the 
United States, the District of Columbia, the Commonwealth of Puerto 
Rico, Guam, American Samoa, the United States Virgin Islands, the 
Northern Mariana Islands, or any other territory or possession over 
which the United States has jurisdiction.

                           (End of provision)

[61 FR 41475, Aug. 8, 1996]



Sec. 52.223-14  Toxic Chemical Release Reporting.

    As prescribed in 23.907(b), insert the following clause:

             Toxic Chemical Release Reporting (OCT 7, 1996)

    (a) Unless otherwise exempt, the Contractor, as owner or operator of 
a facility used in the performance of this contract, shall file by July 
1 for the prior calendar year an annual Toxic Chemical Release Inventory 
Form (Form R) as described in sections 313 (a) and (g) of the Emergency 
Planning and Community Right-to-Know Act of 1986 (EPCRA) (42 U.S.C. 
11023 (a) and (g)), and section 6607 of the Pollution Prevention Act of 
1990 (PPA) (42 U.S.C. 13106). The Contractor shall file, for each 
facility subject to the Form R filing and reporting requirements, the 
annual Form R throughout the life of the contract.
    (b) A Contractor owned or operated facility used in the performance 
of this contract is exempt from the requirement to file an annual Form R 
if--

[[Page 149]]

    (1) The facility does not manufacture, process, or otherwise use any 
toxic chemicals listed under section 313(c) of EPCRA, 42 U.S.C. 
11023(c);
    (2) The facility does not have 10 or more full-time employees as 
specified in section 313(b)(1)(A) of EPCRA, 42 U.S.C. 11023(b)(1)(A);
    (3) The facility does not meet the reporting thresholds of toxic 
chemicals established under section 313(f) of EPCRA, 42 U.S.C. 11023(f) 
(including the alternate thresholds at 40 CFR 372.27, provided an 
appropriate certification form has been filed with EPA);
    (4) The facility does not fall within Standard Industrial 
Classification Code (SIC) designations 20 through 39 as set forth in 
Section 19.102 of the Federal Acquisition Regulation (FAR); or
    (5) The facility is not located within any State of the United 
States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, 
American Samoa, the United States Virgin Islands, the Northern Mariana 
Islands, or any other territory or possession over which the United 
States has jurisdiction.
    (c) If the Contractor has certified to an exemption in accordance 
with one or more of the criteria in paragraph (b) of this clause, and 
after award of the contract circumstances change so that any of its 
owned or operated facilities used in the performance of this contract is 
no longer exempt--
    (1) The Contractor shall notify the Contracting Officer; and
    (2) The Contractor, as owner or operator of a facility used in the 
performance of this contract that is no longer exempt, shall (i) submit 
a Toxic Chemical Release Inventory Form (Form R) on or before July 1 for 
the prior calendar year during which the facility becomes eligible; and 
(ii) continue to file the annual Form R for the life of the contract for 
such facility.
    (d) The Contracting Officer may terminate this contract or take 
other action as appropriate, if the Contractor fails to comply 
accurately and fully with the EPCRA and PPA toxic chemical release 
filing and reporting requirements.
    (e) Except for acquisitions of commercial items as defined in FAR 
Part 2, the Contractor shall--
    (1) For competitive subcontracts expected to exceed $100,000 
(including all options), include a solicitation provision substantially 
the same as the provision at FAR 52.223-13, Certification of Toxic 
Chemical Release Reporting; and
    (2) Include in any resultant subcontract exceeding $100,000 
(including all options), the substance of this clause, except this 
paragraph (e).

                             (End of clause)

[61 FR 41475, Aug. 8, 1996]



Sec. 52.224-1  Privacy Act Notification.

    As prescribed in 24.104, insert the following clause in 
solicitations and contracts, when the design, development, or operation 
of a system of records on individuals is required to accomplish an 
agency function:

                   Privacy Act Notification (APR 1984)

    The Contractor will be required to design, develop, or operate a 
system of records on individuals, to accomplish an agency function 
subject to the Privacy Act of 1974, Public Law 93-579, December 31, 1974 
(5 U.S.C. 552a) and applicable agency regulations. Violation of the Act 
may involve the imposition of criminal penalties.

                             (End of clause)



Sec. 52.224-2  Privacy Act.

    As prescribed in 24.104, insert the following clause in 
solicitations and contracts, when the design, development, or operation 
of a system of records on individuals is required to accomplish an 
agency function:

                         Privacy Act (APR 1984)

    (a) The Contractor agrees to--
    (1) Comply with the Privacy Act of 1974 (the Act) and the agency 
rules and regulations issued under the Act in the design, development, 
or operation of any system of records on individuals to accomplish an 
agency function when the contract specifically identifies--
    (i) The systems of records; and
    (ii) The design, development, or operation work that the contractor 
is to perform;
    (2) Include the Privacy Act notification contained in this contract 
in every solicitation and resulting subcontract and in every subcontract 
awarded without a solicitation, when the work statement in the proposed 
subcontract requires the design, development, or operation of a system 
of records on individuals that is subject to the Act; and
    (3) Include this clause, including this subparagraph (3), in all 
subcontracts awarded under this contract which requires the design, 
development, or operation of such a system of records.
    (b) In the event of violations of the Act, a civil action may be 
brought against the agency involved when the violation concerns the 
design, development, or operation of a system of records on individuals 
to accomplish an agency function, and criminal penalties may be imposed 
upon the officers or

[[Page 150]]

employees of the agency when the violation concerns the operation of a 
system of records on individuals to accomplish an agency function. For 
purposes of the Act, when the contract is for the operation of a system 
of records on individuals to accomplish an agency function, the 
Contractor and any employee of the Contractor is considered to be an 
employee of the agency.
    (c)(1) Operation of a system of records, as used in this clause, 
means performance of any of the activities associated with maintaining 
the system of records, including the collection, use, and dissemination 
of records.
    (2) Record, as used in this clause, means any item, collection, or 
grouping of information about an individual that is maintained by an 
agency, including, but not limited to, education, financial 
transactions, medical history, and criminal or employment history and 
that contains the person's name, or the identifying number, symbol, or 
other identifying particular assigned to the individual, such as a 
fingerprint or voiceprint or a photograph.
    (3) System of records on individuals, as used in this clause means a 
group of any records under the control of any agency from which 
information is retrieved by the name of the individual or by some 
identifying number, symbol, or other identifying particular assigned to 
the individual.

                             (End of clause)



Sec. 52.225-1  Buy American Certificate.

    As prescribed in 25.109(a), insert the following provision:

                   Buy American Certificate (DEC 1989)

    The offeror certifies that each end product, except those listed 
below, is a domestic end product (as defined in the clause entitled Buy 
American Act--Supplies), and that components of unknown origin are 
considered to have been mined, produced, or manufactured outside the 
United States.

 
        Excluded End Products            Country of Origin
 
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 

                           (List as necessary)

    Offerors may obtain from the contracting officer lists of articles, 
materials, and supplies excepted from the Buy American Act.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 54 FR 48994, Nov. 28, 1989]



Sec. 52.225-2  Waiver of Buy American Act for Civil Aircraft and Related Articles.

    As prescribed in 25.109(c), insert the following provision:

Waiver of Buy American Act for Civil Aircraft and Related Articles (JAN 
                                  1996)

    (a) Civil aircraft and related articles, as used in this provision, 
means--
    (1) All aircraft other than aircraft to be purchased for use by the 
Department of Defense or the U.S. Coast Guard;
    (2) The engines (and parts and components for incorporation into the 
engines) of these aircraft;
    (3) Any other parts, components, and subassemblies for incorporation 
into the aircraft; and
    (4) Any ground flight simulators, and parts and components of these 
simulators, for use with respect to the aircraft, whether to be used as 
original or replacement equipment in the manufacture, repair, 
maintenance, rebuilding, modification, or conversion of the aircraft, 
and without regard to whether the aircraft or articles receive duty-free 
treatment under section 601(a)(2) of the Trade Agreements Act of 1979.
    (b) The U.S. Trade Representative has waived applying the Buy 
American Act to the acquisition of civil aircraft and related articles 
(as defined in paragraph (a) of this clause) of countries or 
instrumentaties that are parties to the Agreement on Trade in Civil 
Aircraft. As of January 1, 1996, those countries and instrumentalities 
include Canada, the European Union (Austria, Belgium, Denmark, Finland, 
France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, 
Portugal, Spain, Sweden, and the United Kingdom), Japan, Norway, 
Romania, and Switzerland.
    (c) For the purpose of this waiver, an article is a product of a 
country or instrumentality only if--
    (1) It is wholly the growth, product, or manufacture of that country 
or instrumentality; or
    (2) In the case of an article that consists in whole or in part of 
materials from another country or instrumentality, it has been 
substantially transformed into a new and different article of commerce 
with a name, character, or use distinct from that of the article or 
articles from which it was so transformed.
    (d) The waiver is subject to modification or withdrawal by the U.S. 
Trade Representative.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 60 FR 67517, Dec. 29, 1995]

[[Page 151]]



Sec. 52.225-3  Buy American Act--Supplies.

    As prescribed in 25.109(d), insert the following clause:

                  Buy American Act--Supplies (JAN 1994)

    (a) The Buy American Act (41 U.S.C. 10) provides that the Government 
give preference to domestic end products.
    Components, as used in this clause, means those articles, materials, 
and supplies incorporated directly into the end products.
    Domestic end product, as used in this clause, means (1) an 
unmanufactured end product mined or produced in the United States, or 
(2) an end product manufactured in the United States, if the cost of its 
components mined, produced, or manufactured in the United States exceeds 
50 percent of the cost of all its components. Components of foreign 
origin of the same class or kind as the products referred to in 
subparagraphs (b) (2) or (3) of this clause shall be treated as 
domestic. Scrap generated, collected, and prepared for processing in the 
United States is considered domestic.
    End products, as used in this clause, means those articles, 
materials, and supplies to be acquired for public use under this 
contract.
    (b) The Contractor shall deliver only domestic end products, except 
those--
    (1) For use outside the United States;
    (2) That the Government determines are not mined, produced, or 
manufactured in the United States in sufficient and reasonably available 
commercial quantities of a satisfactory quality;
    (3) For which the agency determines that domestic preference would 
be inconsistent with the public interest; or
    (4) For which the agency determines the cost to be unreasonable (see 
section 25.105 of the Federal Acquisition Regulation).

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 51 FR 2666, Jan. 17, 1986; 
53 FR 27468, July 20, 1988; 53 FR 36028, Sept. 16, 1988; 53 FR 53341, 
Dec. 30, 1988; 59 FR 547, Jan. 5, 1994]



Sec. 52.225-4  Evaluation of Foreign Currency Offers.

    As prescribed in 25.502, insert the following provision:

            Evaluation of Foreign Currency Offers (AUG 1996)

    If offers are received in more than one currency, offers shall be 
evaluated by converting the foreign currency to United States currency 
using (insert source of rate) in effect on the (a) date of bid opening 
for sealed bid acquisitions, (b) closing date for negotiated 
acquisitions when award is based on initial offers, or (c) due date for 
receipt of best and final offers, for other acquisitions.

                           (End of provision)

[61 FR 31651, June 20, 1996]



Sec. 52.225-5  Buy American Act--Construction Materials.

    As prescribed in 25.207(a), insert the following clause:

           Buy American Act--Construction Materials (JUN 1997)

    (a) Definitions. As used in this clause--
    Components means those articles, materials, and supplies 
incorporated directly into construction materials.
    Construction material means an article, material, or supply brought 
to the construction site for incorporation into the building or work. 
Construction material also includes an item brought to the site pre-
assembled from articles, materials or supplies. However, emergency life 
safety systems, such as emergency lighting, fire alarm, and audio 
evacuation systems, which are discrete systems incorporated into a 
public building or work and which are produced as a complete system, 
shall be evaluated as a single and distinct construction material 
regardless of when or how the individual parts or components of such 
systems are delivered to the construction site.
    Domestic construction material means (1) an unmanufactured 
construction material mined or produced in the United States, or (2) a 
construction material manufactured in the United States, if the cost of 
its components mined, produced, or manufactured in the United States 
exceeds 50 percent of the cost of all its components. Components of 
foreign origin of the same class or kind as the construction materials 
determined to be unavailable pursuant to subparagraph 25.202(a)(2) of 
the Federal Acquisition Regulation (FAR) shall be treated as domestic.
    (b)(1) The Buy American Act (41 U.S.C. 10a-10d) requires that only 
domestic construction material be used in performing this contract, 
except as provided in paragraphs (b)(2) and (b)(3) of this clause.
    (2) This requirement does not apply to the excepted construction 
material or components listed by the Government as follows:

_______________________________________________________________________
(List applicable excepted materials or indicate ``none'')

    (3) Other foreign construction material may be added to the list in 
paragraph (b)(2) of this clause if the Government determines that--
    (i) The cost would be unreasonable (the cost of a particular 
domestic construction

[[Page 152]]

material shall be determined to be unreasonable when the cost of such 
material exceeds the cost of foreign material by more than 6 percent, 
unless the agency head determines a higher percentage to be 
appropriate);
    (ii) The application of the restriction of the Buy American Act to a 
particular construction material would be impracticable or inconsistent 
with the public interest; or
    (iii) The construction material is not mined, produced, or 
manufactured in the United States in sufficient and reasonably available 
commercial quantities of a satisfactory quality.
    (4) The Contractor agrees that only domestic construction material 
will be used by the Contractor, subcontractors, material men, and 
suppliers in the performance of this contract, except for foreign 
construction materials, if any, listed in paragraph (b)(2) of this 
clause.
    (c) Request for determination. (1) Contractors requesting to use 
foreign construction material under paragraph (b)(3) of this clause 
shall provide adequate information for Government evaluation of the 
request for a determination regarding the inapplicability of the Buy 
American Act. Each submission shall include a description of the foreign 
and domestic construction materials, including unit of measure, 
quantity, price, time of delivery or availability, location of the 
construction project, name and address of the proposed contractor, and a 
detailed justification of the reason for use of foreign materials cited 
in accordance with paragraph (b)(3) of this clause. A submission based 
on unreasonable cost shall include a reasonable survey of the market and 
a completed price comparison table in the format in paragraph (d) of 
this clause. The price of construction material shall include all 
delivery costs to the construction site and any applicable duty (whether 
or not a duty-free certificate may be issued).
    (2) If the Government determines after contract award that an 
exception to the Buy American Act applies, the contract shall be 
modified to allow use of the foreign construction material, and adequate 
consideration shall be negotiated. However, when the basis for the 
exception is the unreasonable price of a domestic construction material, 
adequate consideration shall not be less than the differential 
established in paragraph (b)(3)(i) of this clause.
    (3) If the Government does not determine that an exception to the 
Buy American Act applies, the use of that particular foreign 
construction material will be a failure to comply with the Act.
    (d) For evaluation of requests under paragraph (c) of this clause 
based on unreasonable cost, the following information and any applicable 
supporting data based on the survey of suppliers shall be included in 
the request:

      Foreign and Domestic Construction Materials Price Comparison
------------------------------------------------------------------------
                                        Unit of                Price
   Construction material description    measure  Quantity  (dollars) \1\
------------------------------------------------------------------------
Item 1:
  Foreign construction material.......  .......  ........  .............
  Domestic construction material......  .......  ........  .............
Item 2:
  Foreign construction material.......  .......  ........  .............
  Domestic constructionmaterial.......  .......  ........  .............
List name, address, telephone number, and contact for suppliers
 surveyed. Attach copy of response; if oral, attach summary.............
Include other applicable supporting information.........................
------------------------------------------------------------------------
\1\ Include all delivery costs to the construction site and any
  applicable duty (whether or not a duty-free entry certificate is
  issued).

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 57 FR 20375, May 12, 1992; 
62 FR 12700, Mar. 17, 1997; 62 FR 40238, July 25, 1997]



Sec. 52.225-6  Balance of Payments Program Certificate.

    As prescribed in 25.305(a), insert the following provision:

           Balance of Payments Program Certificate (APR 1985)

    (a) The offeror hereby certifies that each end product or service, 
except the end products or services listed below, is a domestic end 
product or service (as defined in the clause entitled Balance of 
Payments Program) and that components of unknown origin have been 
considered to have been mined, produced, or manufactured outside the 
United States.

                    Excluded End Products or Services
 
            Line Item No.                Country of Origin
 
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 

                           (List as necessary)

    (b) For evaluation purposes only, each offer of an end product other 
than a domestic end product shall be increased by 50 percent. Any 
domestic end product offer that exceeds such evaluated other end product 
shall be considered unreasonable in cost or inconsistent with the public 
interest.

[[Page 153]]

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1747, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985]



Sec. 52.225-7  Balance of Payments Program.

    As prescribed in 25.305(c), insert the following clause in 
solicitations and contracts for acquiring supplies or services for use 
outside the United States, unless one or more of the exceptions in 
25.302(b) applies or the acquisition is made under the Trade Agreeements 
Act of 1979 (see subpart 25.4):

                 Balance of Payments Program (APR 1984)

    (a) This clause implements the Balance of Payments Program by 
providing a preference for domestic end products or services over 
foreign end products or services.
    Components, as used in this clause, means those articles, materials, 
and supplies directly incorporated into the end products.
    Domestic end product, as used in this clause, means--
    (1) An unmanufactured end product mined or produced in the United 
States; or
    (2) An end product manufactured in the United States, if the cost of 
its components mined, produced, or manufactured in the United States 
exceeds 50 percent of the cost of all its components. Components of 
foreign origin of the same class or kind as those that the agency 
determines are not mined, produced, or manufactured in the United States 
in sufficient reasonably available commercial quantities of a 
satisfactory quality shall be treated as domestic. Components of unknown 
origin shall be considered foreign. Scrap generated, collected, and 
prepared for processing in the United States is considered domestic.
    Domestic services, as used in this clause, means services performed 
in the United States. If services provided under a single contract are 
performed both in and outside the United States, they shall be 
considered domestic if 25 percent or less of their total cost is 
attributable to services (including incidental supplies used in 
connection with these services) performed outside the United States.
    End product, as used in this clause, means an article, material, or 
supply acquired for public use under this contract.
    Foreign end product, as used in this clause, means a product other 
than a domestic end product.
    (b) The contractor agrees that there will be delivered under this 
contract only domestic end products or services unless, in its offer, it 
specified delivery of foreign end products or services in the provision 
entitled Balance of Payments Program Certificate. An offer based on 
supplying a foreign end product or service, if accepted, will permit the 
contractor to supply a product or service without regard to the 
requirements of this clause.
    (c) Offers will be evaluated in accordance with paragraph 25.303(b) 
of the Federal Acquisition Regulation.

                             (End of clause)



Sec. 52.225-8  Buy American Act--Trade Agreements--Balance of Payments Program Certificate.

    As prescribed in 25.408(a)(1), insert the following provision:

    Buy American Act--Trade Agreements--Balance of Payments Program 
                         Certificate (JAN 1994)

    (a) The offeror hereby certifies that each end product, except those 
listed in paragraph (b) of this provision, is a domestic end product (as 
defined in the clause entitled Buy American Act--Trade Agreements--
Balance of Payments Program) and that components of unknown origin have 
been considered to have been mined, produced, or manufactured outside 
the United States, a designated country, a North American Free Trade 
Agreement (NAFTA) country, or a Caribbean Basin country, as defined in 
section 25.401 of the Federal Acquisition Regulation.
    (b) Excluded End Products:

 
          Line Item Number               Country of Origin
 
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 

                           (List as necessary)

    (c) Offers will be evaluated by giving certain preferences to 
domestic end products, designated country end products, NAFTA country 
end products, and Caribbean Basin country end products over other end 
products. In order to obtain these preferences in the evaluation of each 
excluded end product listed in paragraph (b) of this provision, offerors 
must identify and certify below those excluded end products that are 
designated or NAFTA country end products, or Caribbean Basin country end 
products. Products that are not identified and certified below will not 
be deemed designated country end products, NAFTA country end products, 
or Caribbean Basin country end products. Offerors must certify by 
inserting the applicable line item numbers in the following:
    (1) The offeror certifies that the following supplies qualify as 
``designated or NAFTA

[[Page 154]]

country end products'' as those terms are defined in the clause entitled 
``Buy American Act--Trade Agreements--Balance of Payments Program:''
_______________________________________________________________________
[Insert line item numbers]
    (2) The offeror certifies that the following supplies qualify as 
Caribbean Basin country end products as that term is defined in the 
clause entitled Buy American Act--Trade Agreements--Balance of Payments 
Program:
_______________________________________________________________________
[Insert line item numbers]
    (d) Offers will be evaluated in accordance with part 25 of the 
Federal Acquisition Regulation.

                           (End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 51 FR 16803, May 6, 1986; 58 
FR 31143, May 28, 1993; 59 FR 547, Jan. 5, 1994]



Sec. 52.225-9  Buy American Act--Trade Agreements--Balance of Payments Program.

    As prescribed in 25.408(a)(2), insert the following clause:

  Buy American Act--Trade Agreements--Balance of Payments Program (JAN 
                                  1996)

    (a) This clause implements the Buy American Act (41 U.S.C. 10), the 
Trade Agreements Act of 1979 (19 U.S.C. 2501-2582), the North American 
Free Trade Agreement (NAFTA) Implementation Act (Pub. L. 103-182, 107 
Stat. 2057) and the Balance of Payments Program by providing a 
preference for domestic end products over foreign end products, except 
for certain foreign end products which meet the requirements for 
classification as designated, NAFTA, or Caribbean Basin country end 
products.
    Caribbean Basin country end product, as used in this clause, means 
an article that: (1) Is wholly the growth, product, or manufacture of a 
Caribbean Basin country (as defined in 25.401 of the Federal Acquisition 
Regulation (FAR)), or (2) in the case of an article which consists in 
whole or in part of materials from another country or instrumentality, 
has been substantially transformed into a new and different article of 
commerce with a name, character, or use distinct from that of the 
article or articles from which it was so transformed. The term refers to 
a product offered for purchase under a supply contract, but for purposes 
of calculating the value of the end product includes services (except 
transportation services) incidental to its supply; provided, that the 
value of those incidental services does not exceed that of the product 
itself. The term excludes products that are excluded from duty-free 
treatment for Caribbean countries under the Caribbean Basin Economic 
Recovery Act (19 U.S.C. 2703(b)). These exclusions presently consist of 
(i) textiles and apparel articles that are subject to textile 
agreements; (ii) footwear, handbags, luggage, flat goods, work gloves, 
and leather wearing apparel not designated as eligible articles for the 
purpose of the Generalized System of Preferences under title V of the 
Trade Act of 1974; (iii) tuna, prepared or preserved in any manner in 
airtight containers; (iv) petroleum, or any product derived from 
petroleum; and (v) watches and watch parts (including cases, bracelets 
and straps), of whatever type including, but not limited to, mechanical, 
quartz digital or quartz analog, if such watches or watch parts contain 
any material that is the product of any country to which the Tariff 
Schedule of the United States (TSUS) column 2 rates of duty apply.
    Components, as used in this clause, means those articles, materials, 
and supplies incorporated directly into the end products.
    Designated country end product, as used in this clause, means an 
article that (1) is wholly the growth, product, or manufacture of the 
designated country (as defined in 25.401 of the Federal Acquisition 
Regulation (FAR)), or (2) in the case of an article which consists in 
whole or in part of materials from another country or instrumentality, 
has been substantially transformed into a new and different article of 
commerce with a name, character, or use distinct from that of the 
article or articles from which it was so transformed. The term refers to 
a product offered for purchase under a supply contract, but for purposes 
of calculating the value of the end product includes services (except 
transportation services) incidental to its supply; provided, that the 
value of those incidental services does not exceed that of the product 
itself.
    Domestic end product, as used in this clause, means (1) an 
unmanufactured end product mined or produced in the United States, or 
(2) an end product manufactured in the United States, if the cost of its 
components mined, produced, or manufactured in the United States exceeds 
50 percent of the cost of all its components. A component shall also be 
considered to have been mined, produced, or manufactured in the United 
States (regardless of its source in fact) if the end product in which it 
is incorporated is manufactured in the United States and the component 
is of a class or kind (i) determined by the Government to be not mined, 
produced, or manufactured in the United States in sufficient and 
reasonably available commercial quantities of a satisfactory quality, or 
(ii) to which the agency head concerned has determined that it would be 
inconsistent with the public interest to apply the restrictions of the 
Buy American Act.
    Eligible product, as used in this clause, means a designated, North 
American Free

[[Page 155]]

Trade Agreement (NAFTA), or Caribbean Basin country end product.
    End products, as used in this clause, means those articles, 
materials, and supplies to be acquired under this contract for public 
use.
    Foreign end product, as used in this clause, means an end product 
other than a domestic end product.
    NAFTA country, as used in this clause, means Canada or Mexico.
    NAFTA country end product, as used in this clause, means an article 
that (1) is wholly the growth, product, or manufacture of a NAFTA 
country, or (2) in the case of an article which consists in whole or in 
part of materials from another country or instrumentality, has been 
substantially transformed in a NAFTA country into a new and different 
article of commerce with a name, character, or use distinct from that of 
the article or articles from which it was transformed. The term refers 
to a product offered for purchase under a supply contract, but for 
purposes of calculating the value of the end product includes services 
(except transportation services) incidental to its supply; provided, 
that the value of those incidental services does not exceed that of the 
product itself.
    (b) The Contracting Officer has determined that the Trade Agreements 
Act and NAFTA apply to this acquisition. Unless otherwise specified, the 
Acts apply to all items in the schedule. The Contractor agrees to 
deliver under this contract only domestic end products unless, in its 
offer, it specifies delivery of foreign end products in the provision 
entitled ``Buy American Act--Trade Agreements--Balance of Payments 
Program Certificate.'' An offer certifying that a designated, NAFTA, or 
Caribbean Basin country end product will be supplied requires the 
Contractor to supply a designated, NAFTA, or Caribbean Basin country end 
product or, at the Contractor's option, a domestic end product. 
Contractors may not supply a foreign end product for the line items 
subject to the Trade Agreements Act unless--
    (1) The foreign end product is an eligible product (see FAR 25.401);
    (2) The Contracting Officer determines that offers of domestic end 
products or of eligible products are either not received or are 
insufficient to fulfill the Government's requirements; or
    (3) A waiver is granted under section 302 of the Trade Agreements 
Act of 1979 (see FAR 25.402(c)).
    (c) Offers will be evaluated in accordance with the policies and 
procedures of subpart 25.4 of the FAR.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 23607, June 6, 1985; 
51 FR 16803, May 6, 1986; 56 FR 15155, Apr. 15, 1991; 58 FR 31143, May 
28, 1993; 59 FR 547, Jan. 5, 1994; 60 FR 67517, Dec. 29, 1995]



Sec. 52.225-10  Duty-Free Entry.

    As prescribed in 25.605(a), insert the following clause in 
solicitations and contracts over $100,000 that provide for, or 
anticipate furnishing to the Government, supplies to be imported into 
the customs territory of the United States. As prescribed in 25.605(b), 
the clause may be used in contracts of $100,000 or less if such action 
is consistent with the policy in 25.602. When used in contracts of 
$100,000 or less, paragraphs (b)(1) and (i)(2) shall be modified to 
reduce the dollar figure.

                       Duty-Free Entry (APR 1984)

    (a) Except as otherwise approved by the Contracting Officer, no 
amount is or will be included in the contract price for any duties on 
supplies specifically identified in the Schedule to be accorded duty-
free entry.
    (b) Except for supplies listed in the Schedule to be accorded duty-
free entry, and except as provided under any other clause of this 
contract or in paragraph (c) below, the following procedures apply:
    (1) The Contractor shall notify the Contracting Officer in writing 
of any purchase of foreign supplies (including, without limitation, raw 
materials, components, and intermediate assemblies) in excess of $10,000 
that are to be imported into the customs territory of the United States 
for delivery to the Government or for incorporation into end items to be 
delivered under this contract. The notice shall be furnished to the 
Contracting Officer at least 20 days before the importation and shall 
identify (i) the foreign supplies, (ii) the estimated amount of duty, 
and (iii) the country of origin.
    (2) If the Contracting Officer determines that these supplies should 
be entered duty-free, the Contracting Officer shall notify the 
Contractor within 10 days.
    (3) Except as otherwise approved by the Contracting Officer, the 
contract price shall be reduced by (or the allowable cost shall not 
include) the amount of duty that would be payable if the supplies were 
not entered duty-free.
    (c) Paragraph (b) above shall not apply to purchases of foreign 
supplies if (1) they are identical in nature with items purchased by

[[Page 156]]

the Contractor or any subcontractor in connection with its commercial 
business and (2) segregation of these supplies to ensure use only on 
Government contracts containing duty-free entry provisions is not 
economical or feasible.
    (d) The Contractor warrants that all supplies for which duty-free 
entry is to be claimed are intended to be delivered to the Government or 
incorporated into the end items to be delivered under this contract, and 
that duty shall be paid to the extent that these supplies, or any 
portion of them, are diverted to non-Governmental use, other than as 
scrap or salvage or as a result of a competitive sale authorized by the 
Contracting Officer.
    (e) The Government agrees to execute any required duty-free entry 
certificates for items specified in this contract or approved by the 
Contracting Officer and to assist the Contractor in obtaining duty-free 
entry of the supplies.
    (f) All shipping documents covering the supplies to be entered duty-
free shall consign the shipments to the contracting agency in care of 
the Contractor and shall include the delivery address of the Contractor 
(or contracting agency, if appropriate). The documents shall bear the 
following information:
    (1) Government prime contract number.
    (2) Identification of carrier.
    (3) The notation ``UNITED STATES GOVERNMENT, ______ [agency] ______, 
Duty-free entry to be claimed pursuant to Item No(s) ______ [from Tariff 
Schedules] ______, Tariff Schedules of the United States (19 U.S.C. 
1202). Upon arrival of shipment at port of entry, District Director of 
Customs, please release shipment under 19 CFR 142 and notify ______ 
[cognizant contract administration office] ______ for execution of 
Customs Forms 7501 and 7501-A and any required duty-free entry 
certificates.''
    (4) Gross weight in pounds (if freight is based on space tonnage, 
state cubic feet in addition to gross shipping weight).
    (5) Estimated value in United States dollars.
    (g) The Contractor agrees to instruct the foreign supplier to 
consign the shipment as specified in (f) above, to mark all packages 
with the words ``UNITED STATES GOVERNMENT'' and the title of the 
contracting agency, and to accompany the shipment with at least two 
copies of the bill of lading (or other shipping document) for use by the 
District Director of Customs at the port of entry.
    (h) The Contractor agrees to notify in writing the cognizant 
contract administration office immediately upon notification from the 
Contracting Officer that duty-free entry will be accorded (or, if the 
duty-free supplies were listed in the contract Schedule, upon award by 
the Contractor to the overseas supplier). The notice shall identify (1) 
the foreign supplies, (2) the country of origin, (3) the contract 
number, and (4) the scheduled delivery date(s).
    (i) The Contractor agrees to insert the substance of this clause in 
any subcontract under which--
    (1) There will be imported into the customs territory of the United 
States supplies identified in the Schedule as supplies to be accorded 
duty-free entry; or
    (2) Other foreign supplies in excess of $10,000 may be imported into 
the customs territory of the United States.

                             (End of clause)



Sec. 52.225-11  Restrictions on Certain Foreign Purchases.

    As prescribed in 25.702, insert the following clause:

          Restrictions on Certain Foreign Purchases (AUG 1998)

    (a) Unless advance written approval of the Contracting Officer is 
obtained, the Contractor shall not acquire, for use in the performance 
of this contract, any supplies or services originating from sources 
within, or that were located in or transported from or through, 
countries whose products are banned from importation into the United 
States by Executive order or regulations of the Office of Foreign Assets 
Control, Department of the Treasury. Those countries include Cuba, Iran, 
Iraq, Libya, North Korea, and Sudan.
    (b) The Contractor shall not acquire for use in the performance of 
this contract any supplies or services from entities controlled by the 
Government of Iraq.
    (c) The Contractor agrees to insert the provisions of this clause, 
including this paragraph (c), in all subcontracts hereunder.

                             (End of clause)

[61 FR 41476, Aug. 8, 1996, as amended at 63 FR 34077, June 22, 1998]



Sec. 52.225-12  Notice of Buy American Act Requirement--Construction Materials.

    As prescribed in 25.207(b), insert the following provision:

  Notice of Buy American Act Requirement--Construction Materials (MAY 
                                  1997)

    (a) Offerors are required to comply with the requirements of Federal 
Acquisition Regulation (FAR) clause 52.225-5, Buy American Act 
Construction Materials, of this solicitation. The terms construction 
material and domestic construction material as used in

[[Page 157]]

this provision, have the meanings set forth in FAR clause 52.225-5.
    (b) Offerors should request a determination regarding the 
inapplicability of the Buy American Act in time to allow determination 
before submission of offers. For evaluation of a request for a 
determination regarding the inapplicability of the requirements of the 
Buy American Act prior to the time set for receipt of offers, the 
information and applicable supporting data required by paragraphs (c) 
and (d) of FAR clause 52.225-5 shall be included in the request. If an 
offeror has not requested a detemination regarding the inapplicability 
of the Buy American Act prior to submission of its offer, or has not 
received a response to a request made prior to submission of its offer, 
the information and supporting data shall be included in the offer.
    (c) Evaluation of offers. (1) For evaluation of offers, (unless 
agency regulations specify a higher percentage) the Government will add 
to the offered price 6 percent of the cost of any foreign construction 
material proposed for exception from the requirements of the Buy 
American Act based on claimed unreasonable cost of domestic construction 
materials in accordance with paragraph (b)(3)(i) of FAR clause 52.225-5.
    (2) If the evaluation of offers results in a tie between an offer 
including such foreign construction material excepted on the basis of 
unreasonable cost, as evaluated, and an offer including solely domestic 
construction material or other foreign construction material listed in 
the solicitation at paragraph (b)(2) of FAR clause 52.225-5, or 
subsequently excepted in accordance with paragraphs (b)(3) (ii) or (iii) 
of FAR clause 52.225-5, award shall be made to the offeror that 
submitted the latter offer.
    (d) Alternate offers. (1) When an offer includes foreign 
construction material not listed by the Government in the solicitation 
at paragraph (b)(2) of FAR clause 52.225-5, offerors also may submit 
alternate offers based on use of equivalent domestic construction 
material.
    (2) If alternate offers are submitted, a separate Standard Form 1442 
shall be submitted for each alternate offer, and a separate price 
comparison table, prepared in accordance with paragraphs (c) and (d) of 
FAR clause 52.225-5, shall be submitted for each offer that is based on 
the use of any foreign construction material for which the Government 
has not yet determined an exception to apply.
    (3) If the Government determines that a particular exception 
requested under paragraph (c) of FAR clause 52.225-5 does not apply, the 
Government will evaluate only those offers based on use of the 
equivalent domestic construction material, and the offeror shall be 
required to furnish such domestic construction material.
    (i) In sealed bid procurements, any offer based on use of that 
particular foreign construction material shall be rejected as 
nonresponsive.
    (ii) In negotiated procurements, any offer based on use of that 
particular foreign construction material may not be accepted unless 
revised during negotiations.

                           (End of provision)

    Alternate I. (MAY 1997) As prescribed in 25.207(b)(2), substitute 
the following paragraph (b) for paragraph (b) of the basic provision:
    (b) An offeror requesting a determination regarding the 
inapplicability of the Buy American Act shall submit such request with 
its offer, including the information and applicable supporting data 
required by paragraphs (c) and (d) of FAR clause 52.225-5.

[62 FR 12700, Mar. 17, 1997]



Sec. 52.225-13  Notice of Buy American Act Requirement--Construction Materials under Trade Agreements Act and North American Free Trade Agreement.

    As prescribed in 25.207(c)(1), insert the following provision:

  Notice of Buy American Act Requirement--Construction Materials under 
 Trade Agreements Act and North American Free Trade Agreement (MAY 1997)

    (a) Offerors are required to comply with the requirements of Federal 
Acquisition Regulation (FAR) clause 52.225-15, Buy American Act--
Construction Materials Under Trade Agreements Act and North American 
Free Trade Agreement, of this solicitation. The terms defined in FAR 
clause 52.225-15 have the same meaning in this provision.
    (b) Offerors should request a determination regarding the 
inapplicability of the Buy American Act in time to allow determination 
before submission of offers. For evaluation of a request for a 
determination regarding the inapplicability of the requirements of the 
Buy American Act prior to the time set for receipt of offers, the 
information and applicable supporting data required by paragraphs (c) 
and (d) of FAR clause 52.225-15 shall be included in the request. If an 
offeror has not requested a determination regarding the inapplicability 
of the Buy American Act prior to submission of its offer, or has not 
received a response to a request made prior to submission of its offer, 
the information and supporting data shall be included in the offer.
    (c) Evaluation of offers. (1) For evaluation of offers, (unless 
agency regulations specify a higher percentage) the Government will

[[Page 158]]

add to the offered price 6 percent of the cost of any foreign 
construction material proposed for exception from the requirements of 
the Buy American Act based on claimed unreasonable cost of domestic 
construction materials in accordance with paragraph (b)(4)(i) of FAR 
clause 52.225-15.
    (2) If the evaluation of offers results in a tie between an offer 
including such foreign construction material excepted on the basis of 
unreasonable cost, as evaluated, and an offer including solely domestic 
construction material or other foreign construction material, listed in 
the solicitation at paragraph (b)(3) of FAR clause 52.225-15, or 
subsequently excepted in accordance with paragraphs (b)(4) (ii) or (iii) 
of FAR clause 52.225-15, award shall be made to the offeror that 
submitted the latter offer.
    (d) Alternate offers. (1) When an offer includes foreign 
construction material not listed by the Government in the solicitation 
at paragraph (b)(3) of FAR clause 52.225-15, offerors also may submit 
alternate offers based on use of equivalent domestic construction 
material.
    (2) If alternate offers are submitted, a separate Standard Form 1442 
shall be submitted for each alternate offer, and a separate price 
comparison table, prepared in accordance with paragraphs (c) and (d) of 
FAR clause 52.225-15, shall be submitted for each offer that is based on 
the use of any foreign construction material for which the Government 
has not yet determined an exception to apply.
    (3) If the Government determines that a particular exception 
requested under paragraph (c) of FAR clause 52.225-15 does not apply, 
the Government will evaluate only those offers based on use of the 
equivalent domestic construction material, and the offeror shall be 
required to furnish such domestic construction material.
    (i) In sealed bid procurements, any offer based on use of that 
particular foreign construction material shall be rejected as 
nonresponsive.
    (ii) in negotiated procurements, any offer based on use of that 
particular foreign construction material may not be accepted unless 
revised during negotiations.

                           (End of provision)

    Alternate I (MAY 1997). As prescribed in 25.207(c)(2), substitute 
the following paragraph (b) for paragraph (b) of the basic provision:
    (b) An offeror requesting a determination regarding the 
inapplicability of the Buy American Act shall submit such request with 
its offer, including the information and applicable supporting data 
required by paragraphs (c) and (d) of FAR clause 52.225-15.

[62 FR 12701, Mar. 17, 1997]



Sec. 52.225-14  Inconsistency between English Version and Translation of Contract.

    As prescribed at 25.902, insert the following clause:

 Inconsistency Between English Version and Translation of Contract (AUG 
                                  1989)

    In the event of inconsistency between any terms of this contract and 
any translation thereof into another language, the English language 
meaning shall control.

                             (End of clause)

[54 FR 29283, July 11, 1989]



Sec. 52.225-15  Buy American Act--Construction Materials Under Trade Agreements Act and North American Free Trade Agreement.

    As prescribed in 25.207(d), insert the following clause:

Buy American Act--Construction Materials Under Trade Agreements Act and 
             North American Free Trade Agreement (JUN 1997)

    (a) Definitions. As used in the clause--
    Components means those articles, materials, and supplies 
incorporated directly into construction materials.
    Construction material means an article, material, or supply brought 
to the construction site for incorporation into the building or work. 
Construction material also includes an item brought to the site pre-
assembled from articles, materials, or supplies. However, emergency life 
safety systems, such as emergency lighting, fire alarm, and audio 
evacuation systems, which are discrete systems incorporated into a 
public building or work and which are produced as a complete system, 
shall be evaluated as a single and distinct construction material 
regardless of when or how the individual parts or components of such 
systems are delivered to the construction site.
    Designated country construction material means a construction 
material that (a) is wholly the growth, product, or manufacture of a 
designated country (as defined at FAR 25.401), or (b) in the case of a 
construction material which consists in whole or in part of materials 
from another country or instrumentality, has been substantially 
transformed in a designated country into a new and different 
construction material distinct from the materials from which it was 
transformed.
    Domestic construction material means (1) an unmanufactured 
construction material mined or produced in the United States, or (2) a 
construction material manufactured in the U.S., if the cost of its 
components mined,

[[Page 159]]

produced, or manufactured in the United States exceeds 50 percent of the 
cost of all its components. Components of foreign origin of the same 
class or kind as the construction materials determined to be unavailable 
pursuant to subparagraph 25.202(a)(2) of the Federal Acquisition 
Regulation (FAR) shall be treated as domestic.
    North American Free Trade Agreement (NAFTA) country means Canada or 
Mexico.
    NAFTA country construction material means a construction material 
that (1) is wholly the growth, product, or manufacture of a NAFTA 
country, or (2) in the case of a construction material which consists in 
whole or in part of materials from another country or instrumentality, 
has been substantially transformed in a NAFTA country into a new and 
different construction material distinct from the materials from which 
it was transformed.
    (b)(1) The Buy American Act (41 U.S.C. 10a--10d) requires that only 
domestic construction material be used in performing this contract, 
except as provided in paragraphs (b)(2), (b)(3), and (b)(4) of this 
clause.
    (2) The Trade Agreements Act and the North American Free Trade 
Agreement (NAFTA) provide that designated country and NAFTA country 
construction materials are exempted from application of the Buy American 
Act.
    (3) The requirement in paragraph (b)(1) of this clause does not 
apply to the excepted construction material or components listed by the 
Government as follows:

_______________________________________________________________________
(List applicable excepted materials or indicate ``none'')

    (4) Other foreign construction material may be added to the list in 
paragraph (b)(3) of this clause if the Government determines that--
    (i) The cost would be unreasonable (the cost of a particular 
domestic construction material shall be determined to be unreasonable 
when the cost of such material exceeds the cost of foreign material by 
more than 6 percent, unless the agency head determines a higher 
percentage to be appropriate);
    (ii) The application of the restriction of the Buy American Act to a 
particular construction material would be impracticable or inconsistent 
with the public interest; or (iii) The construction material is not 
mined, produced, or manufactured in the United States in sufficient and 
reasonably available commercial quantities of a satisfactory quality.
    (5) The Contractor agrees that only domestic construction materials, 
NAFTA country construction materials, or designated country construction 
materials will be used by the Contractor, subcontractors, material men, 
and suppliers in the performance of this contract, except for foreign 
construction materials, if any, listed in paragraph (b)(3) of this 
clause.
    (c) Request for determination. (1) Contractors requesting to use 
foreign construction material under paragraph (b)(4) of this clause 
shall provide adequate information for Government evaluation of the 
request for a determination regarding the inapplicability of the Buy 
American Act. Each submission shall include a description of the foreign 
and domestic construction materials, including unit of measure, 
quantity, price, time of delivery or availability, location of the 
construction project, name and address of the proposed contractor, and a 
detailed justification of the reason for use of foreign materials cited 
in accordance with paragraph (b)(4) of this clause. A submission based 
on unreasonable cost shall include a reasonable survey of the market and 
a completed price comparison table in the format in paragraph (d) of 
this clause. The price of construction material shall include all 
delivery costs to the construction site and any applicable duty (whether 
or not a duty-free certificate may be issued).
    (2) If the Government determines after contract award that an 
exception to the Buy American Act applies, the contract shall be 
modified to allow use of the foreign construction material, and adequate 
consideration shall be negotiated. However, when the basis for the 
exception is the unreasonable price of a domestic construction material, 
adequate consideration shall not be less than the differential 
established in paragraph (b)(4)(i) of this clause.
    (3) If the Government does not determine that an exception to the 
Buy American Act applies, the use of that particular foreign 
construction material will be a failure to comply with the Act.
    (d) For evaluation of requests under paragraph (c) of this clause 
based on unreasonable cost, the following information and any applicable 
supporting data based on the survey of suppliers shall be included in 
the request:

      Foreign and Domestic Construction Materials Price Comparison
------------------------------------------------------------------------
                                        Unit of                Price
   Construction material description    measure  Quantity  (dollars) \1\
------------------------------------------------------------------------
Item 1:
  Foreign construction material.......  .......  ........  .............
  Domestic construction material......  .......  ........  .............
Item 2:
  Foreign construction material.......  .......  ........  .............
  Domestic constructionmaterial.......  .......  ........  .............
List name, address, telephone number, and contact for suppliers
 surveyed. Attach copy of response; if oral, attach summary.............

[[Page 160]]

 
Include other applicable supporting information.........................
------------------------------------------------------------------------
\1\ Include all delivery costs to the construction site and any
  applicable duty (whether or not a duty-free entry certificate is
  issued).

                             (End of clause)

    Alternate I (MAY 1997). As prescribed in 25.207(d)(2), substitute 
the following paragraphs (b)(2) and (b)(5) for paragraphs (b)(2) and 
(b)(5) of the basic clause:

    (b)(2) The North American Free Trade Agreement (NAFTA) provides that 
NAFTA construction materials are exempted from application of the Buy 
American Act.
    (b)(5) The Contractor agrees that only domestic construction 
materials or NAFTA country construction materials will be used by the 
Contractor, subcontractors, material men, and suppliers in the 
performance of this contract, except for other foreign construction 
materials, if any, listed in paragraph (b)(3) of this clause.

[58 FR 31143, May 28, 1993, as amended at 59 FR 548, Jan. 5, 1994; 60 FR 
28502, May 31, 1995; 60 FR 67518, Dec. 29, 1995; 61 FR 2454, Jan. 26, 
1996; 62 FR 12701, Mar. 17, 1997; 62 FR 40238, July 25, 1997]



Sec. 52.225-16--52.225-17  [Reserved]



Sec. 52.225-18  European Union Sanction for End Products.

    As prescribed in 25.1003(a) insert the following clause:

           European Union Sanction for End Products (JAN 1996)

    (a) Definitions. As used in this clause--
    Sanctioned European Union (EU) end product means an article that (a) 
is wholly the growth, product or manufacture of a sanctioned member 
state of the EU, or (b) in the case of an article which consists in 
whole or in part of materials from another country or instrumentality, 
has been substantially transformed in a sanctioned EU country into a new 
and different article of commerce with a name, character or use distinct 
from that from which it was so transformed. The term refers to a product 
offered for purchase under a supply contract, but for purposes of 
calculating the value of the end product includes services (except 
transportation services) incidental to its supply; provided, that the 
value of these incidental services does not exceed that of the product 
itself.
    Sanctioned member state of the EU is any of the following countries: 
Austria, Belgium, Denmark, Finland, France, Ireland, Italy, Luxembourg, 
the Netherlands, Sweden, and the United Kingdom.
    (b) Agreement. The Contractor agrees that no sanctioned EU end 
products will be delivered under this contract.

                             (End of clause)

[58 FR 31144, May 28, 1993, as amended at 60 FR 28502, 28503, May 31, 
1995; 60 FR 67518, Dec. 29, 1995]



Sec. 52.225-19  European Union Sanction for Services.

    As prescribed in 25.1003(b), insert the following clause:

             European Union Sanction for Services (JAN 1996)

    (a) Definition.
    Sanctioned member state of the European Union (EU), as used in this 
clause, is any of the following countries: Austria, Belgium, Denmark, 
Finland, France, Ireland, Italy, Luxembourg, the Netherlands, Sweden, 
and the United Kingdom.
    (b) Agreement. The Contractor agrees not to perform services under 
this contract in a sanctioned member state of the EU. This does not 
apply to subcontracts.

                             (End of clause)

[58 FR 31144, May 28, 1993, as amended at 59 FR 548, Jan. 5, 1994; 60 FR 
28502, 28503, May 31, 1995; 60 FR 67518, Dec. 29, 1995]



Sec. 52.225-20  Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program Certificate.

    As prescribed in 25.408(a)(3), insert the following provision:

  Buy American Act--North American Free Trade Agreement Implementation 
         Act--Balance of Payments Program Certificate (JAN 1997)

    (a) The offeror certifies that each end product being offered, 
except those listed in paragraph (b) of this provision, is a domestic 
end product (as defined in the clause entitled ``Buy American Act--North 
American Free Trade Agreement Implementation Act--Balance of Payments 
Program'') and that components of unknown origin have been considered to 
have been mined, produced, or manufactured outside the United States.
    (b) Excluded End Products:

[[Page 161]]



------------------------------------------------------------------------
               Line item No.                      Country of origin
------------------------------------------------------------------------
 
 
------------------------------------------------------------------------

                           (List as necessary)

    (c) Offers will be evaluated by giving certain preferences to 
domestic end products or NAFTA country end products over other end 
products. In order to obtain these preferences in the evaluation of each 
excluded end product listed in paragraph (b) of this provision, offerors 
must identify and certify below those excluded end products that are 
NAFTA country end products. Products that are not identified and 
certified below will not be deemed NAFTA country end products.
    The offeror certifies that the following supplies qualify as NAFTA 
country end products as that term is defined in the clause entitled 
``Buy American Act-- North American Free Trade Agreement Implementation 
Act--Balance of Payments Program'':

------------------------------------------------------------------------
             Line item no.----                    Country of origin
------------------------------------------------------------------------
 
 
------------------------------------------------------------------------

(List as necessary)

    (d) Offers will be evaluated in accordance with Part 25 of the 
Federal Acquisition Regulation. In addition, if this solicitation is for 
supplies for use outside the United States, an evaluation factor of 50 
percent will be applied to offers of end products that are not domestic 
or NAFTA country end products.

                           (End of provision)

    Alternate I (JAN 1997). As prescribed in 25.408(a)(3), substitute 
the following paragraph (c) for paragraph (c) of the basic provision:

    (c) Offers will be evaluated by giving certain preferences to 
domestic end products or Canadian end products over other end products. 
In order to obtain these preferences in the evaluation of each excluded 
end product listed in paragraph (b) of this provision, offerors must 
identify and certify below those excluded end products that are Canadian 
end products. Products that are not identified below will not be deemed 
Canadian end products.
    The offeror certifies that the following supplies qualify as 
``Canadian end products'' as that term is defined in the clause entitled 
``Buy American Act--North American Free Trade Agreement Implementation 
Act--Balance of Payments Program'':
_______________________________________________________________________
[Insert line item numbers]

[59 FR 548, Jan. 5, 1994, as amended at 61 FR 31648, June 20, 1996; 62 
FR 262, Jan. 2, 1997]



Sec. 52.225-21  Buy American Act--North American Free Trade Agreement Implementation Act--Balance of Payments Program.

    As prescribed in 25.408(a)(4), insert the following clause:

  Buy American Act--North American Free Trade Agreement Implementation 
               Act--Balance of Payments Program (JAN 1997)

    (a) Definitions. As used in this clause--
    Components means those articles, materials, and supplies 
incorporated directly into the end products.
    Domestic end product means (1) an unmanufactured end product mined 
or produced in the United States, or (2) an end product manufactured in 
the United States, if the cost of its components mined, produced, or 
manufactured in the United States exceeds 50 percent of the cost of all 
its components. A component shall also be considered to have been mined, 
produced, or manufactured in the United States (regardless of its source 
in fact) if the end product in which it is incorporated is manufactured 
in the United States and the component is of a class or kind (i) 
determined by the Government, to be not mined, produced, or manufactured 
in the United States in sufficient and reasonably available commercial 
quantities of a satisfactory quality, or (ii) to which the agency head 
concerned has determined that it would be inconsistent with the public 
interest to apply the restrictions of the Buy American Act.
    End products means those articles, materials, and supplies to be 
acquired under this contract for public use.
    Foreign end product means an end product other than a domestic end 
product.
    North American Free Trade Agreement (NAFTA) country means Canada or 
Mexico.
    NAFTA country end product means an article that (1) is wholly the 
growth, product, or manufacture of a NAFTA country, or (2) in the case 
of an article which consists in whole or in part of materials from 
another country or instrumentality, has been substantially transformed 
in a NAFTA country into a new and different article of commerce with a 
name, character, or use distinct from that of the article or articles 
from which it was transformed. The term refers to a product offered for 
purchase under a supply contract, but for purposes of calculating the 
value of the end product includes services (except transportation 
services) incidental to its supply; provided, that the value of those 
incidental services does not exceed that of the product itself.
    (b) This clause implements the Buy American Act (41 U.S.C. 10), the 
North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 
107 Stat. 2057), and the Balance of Payments Program by providing a

[[Page 162]]

preference for domestic end products over foreign end products, except 
for certain foreign end products which meet the requirements for 
classification as NAFTA country end products.
    (c) The Contracting Officer has determined that the NAFTA applies to 
this acquisition. Unless otherwise specified, the Act applies to all 
items in the schedule. The Contractor agrees to deliver under this 
contract only domestic end products unless, in its offer, it specifies 
delivery of foreign end products in the provision entitled ``Buy 
American Act--North American Free Trade Agreement Implementation Act--
Balance of Payments Program Certificate.'' An offer certifying that a 
NAFTA country end product will be supplied requires the Contractor to 
supply a NAFTA country end product or, at the Contractor's option, a 
domestic end product.

                             (End of clause)

    Alternate I (JAN 1997). As prescribed in 25.408(a)(4), add the 
following definition to paragraph (a) and substitute the following 
paragraph (c) for paragraph (c) of the basic clause:

    Canadian end product means an article that (1) is wholly the growth, 
product, or manufacture of Canada, or (2) in the case of an article 
which consists in whole or in part of materials from another country or 
instrumentality, has been substantially transformed in Canada into a new 
and different article of commerce with a name, character, or use 
distinct from that of the article or articles from which it was 
transformed. The term refers to a product offered for purchase under a 
supply contract, but for purposes of calculating the value of the end 
product includes services (except transportation services) incidental to 
its supply; provided, that the value of those incidental services does 
not exceed that of the product itself.
    (c) The Contracting Officer has determined that NAFTA applies to 
this acquisition. Unless otherwise specified, NAFTA applies to all items 
in the schedule. The Contractor agrees to deliver under this contract 
only domestic end products unless, in its offer, it specifies delivery 
of foreign end products in the provision entitled ``Buy American Act--
North American Free Trade Agreement Implementation Act--Balance of 
Payments Program Certificate.'' An offer certifying that a Canadian end 
product will be supplied requires the Contractor to supply a Canadian 
end product or, at the Contractor's option, a domestic end product.

[59 FR 548, Jan. 5, 1994, as amended at 60 FR 67518, Dec. 29, 1995; 61 
FR 31649, June 20, 1996; 62 FR 262, Jan. 2, 1997; 62 FR 10710, Mar. 10, 
1997]



Sec. 52.225-22  Balance of Payments Program--Construction Materials--NAFTA.

    As prescribed in 25.305(c)(2), insert the following clause:

  Balance of Payments Program--Construction Materials--NAFTA (MAY 1997)

    (a) Definitions. As used in this clause--
    Components means those articles, materials, and supplies 
incorporated directly into construction materials.
    Construction material means an article, material, or supply brought 
to the construction site for incorporation into the building or work. 
Construction material also includes an item brought to the site pre-
assembled from articles, materials, or supplies. However, emergency life 
safety systems, such as emergency lighting, fire alarm, and audio 
evacuation systems, which are discrete systems incorporated into a 
public building or work and which are produced as a complete system, 
shall be evaluated as a single and distinct construction material 
regardless of when or how the individual parts or components of such 
systems are delivered to the construction site.
    Domestic construction material means (1) an unmanufactured 
construction material mined or produced in the United States, or (2) a 
construction material manufactured in the United States, if the cost of 
its components mined, produced, or manufactured in the United States 
exceeds 50 percent of the cost of all its components. Components of 
foreign origin of the same class or kind as the construction materials 
determined to be unavailable pursuant to subparagraph 25.202(a)(2) of 
the Federal Acquisition Regulation shall be treated as domestic.
    NAFTA country construction material means a construction material 
that (1) is wholly the growth, product, or manufacture of a NAFTA 
country, or (2) in the case of a construction material which consists in 
whole or in part of materials from another country or instrumentality, 
has been substantially transformed in a NAFTA country into a new and 
different construction material distinct from the materials from which 
it was transformed.
    North American Free Trade Agreement (NAFTA) country means Canada and 
Mexico.
    (b) The Balance of Payments Program provides that the Government 
give preference to domestic construction material.
    (c) The Contractor agrees that only domestic construction material 
or NAFTA country construction material will be used by the Contractor, 
subcontractors, material men, and suppliers in the performance of this 
contract, except for other foreign construction materials, if any, 
listed in this contract.

[[Page 163]]

                             (End of clause)

[61 FR 31649, June 20, 1996, as amended at 62 FR 12702, Mar. 17, 1997]



Sec. 52.226  [Reserved]



Sec. 52.226-1  Utilization of Indian Organizations and Indian-Owned Economic Enterprises.

    As prescribed in 26.104, insert the following clause:

     Utilization of Indian Organizations and Indian-Owned Economic 
                         Enterprises (SEP 1996)

    (a) For Department of Defense contracts, this clause applies only if 
the contract includes a subcontracting plan incorporated under the terms 
of the clause at 52.219-9, Small, Small Disadvantaged and Women-Owned 
Small Business Subcontracting Plan. It does not apply to contracts 
awarded based on a subcontracting plan submitted and approved under 
paragraph (g) of the clause at 52.219-9.
    (b) Definitions. As used in this clause:
    Indian means any person who is a member of any Indian tribe, band, 
group, pueblo or community which is recognized by the Federal Government 
as eligible for services from the Bureau of Indian Affairs (BIA) in 
accordance with 25 U.S.C. 1452(c) and any ``Native'' as defined in the 
Alaska Native Claims Settlement Act (43 U.S.C. 1601).
    Indian organization means the governing body of any Indian tribe or 
entity established or recognized by the governing body of an Indian 
tribe for the purposes of 25 U.S.C., chapter 17.
    Indian-owned economic enterprise means any Indian-owned (as 
determined by the Secretary of the Interior) commercial, industrial, or 
business activity established or organized for the purpose of profit, 
provided that Indian ownership shall constitute not less than 51 percent 
of the enterprise.
    Indian tribe means any Indian tribe, band, group, pueblo or 
community, including native villages and native groups (including 
corporations organized by Kenai, Juneau, Sitka, and Kodiak) as defined 
in the Alaska Native Claims Settlement Act, which is recognized by the 
Federal Government as eligible for services from BIA in accordance with 
25 U.S.C. 1542(c).
    Interested party means a prime contractor or an actual or 
prospective offeror whose direct economic interest would be affected by 
the award of a subcontract or by the failure to award a subcontract.
    (c) The Contractor agrees to use its best efforts to give Indian 
organizations and Indian-owned economic enterprises (25 U.S.C. 1544) the 
maximum practicable opportunity to participate in the subcontracts it 
awards to the fullest extent consistent with efficient performance of 
its contract.
    (1) The Contracting Officer and the Contractor, acting in good 
faith, may rely on the self-certification of an Indian organization or 
Indian-owned economic enterprise as to its eligibility, unless an 
interested party challenges its status or the Contracting Officer has 
independent reason to question that status. In the event of a challenge 
to the self-certification of a subcontractor, the Contracting Officer 
shall refer the matter to the U.S. Department of the Interior, Bureau of 
Indian Affairs (BIA), Attn: Chief, Division of Contracting and Grants 
Administration, 1849 C Street, NW, MS-334A-SIB, Washington, DC 20245. 
The BIA will determine the eligibility and notify the Contracting 
Officer. The 5 percent incentive payment will not be made within 50 
working days of subcontract award or while a challenge is pending. If a 
subcontractor is determined to be an ineligible participant, no 
incentive payment will be made under the Indian Incentive Program.
    (2) The Contractor may request an adjustment under the Indian 
Incentive Program to the following:
    (i) The estimated cost of a cost-type contract.
    (ii) The target cost of a cost-plus-incentive-fee prime contract.
    (iii) The target cost and ceiling price of a fixed-price incentive 
prime contract.
    (iv) The price of a firm-fixed-price prime contract.
    (3) The amount of the equitable adjustment to the prime contract 
shall be 5 percent of the estimated cost, target cost or firm-fixed-
price included in the subcontract initially awarded to the Indian 
organization or Indian-owned economic enterprise.
    (4) The Contractor has the burden of proving the amount claimed and 
must assert its request for an adjustment prior to completion of 
contract performance.
    (d) The Contracting Officer, subject to the terms and conditions of 
the contract and the availability of funds, shall authorize an incentive 
payment of 5 percent of the amount paid to the subcontractor. 
Contracting Officers shall seek funding in accordance with agency 
procedures. The Contracting Officer's decision is final and not subject 
to the Disputes clause of this contract.

                             (End of clause)

[56 FR 41737, Aug. 22, 1991, as amended at 61 FR 39211, July 26, 1996]



Sec. 52.226-2  Historically Black College or University and Minority Institution Representation.

    As prescribed in 26.304, insert the following provision:

[[Page 164]]

   Historically Black College or University and Minority Institution 
                        Representation (MAY 1997)

    (a) Definitions. As used in this provision--Historically Black 
College or University means an institution determined by the Secretary 
of Education to meet the requirements of 34 CFR 608.2. For the 
Department of Defense, the National Aeronautics and Space 
Administration, and the Coast Guard, the term also includes any 
nonprofit research institution that was an integral part of such a 
college or university before November 14, 1986.
    Minority Institution means an institution of higher education 
meeting the requirements of Section 1046(3) of the Higher Education Act 
of 1965 (20 U.S.C. 1135d-5(3)) which, for the purpose of this provision, 
includes a Hispanic-serving institution of higher education as defined 
in Section 316(b)(1) of the Act (20 U.S.C. 1059c(b)(1)).
    (b) Representation. The offeror represents that it--
    {time}  is {time}  is not a Historically Black College or 
University;
    {time}  is {time}  is not a Minority Institution.

                           (End of provision)

[62 FR 12703, Mar. 17, 1997]



Sec. 52.227-1  Authorization and Consent.

    As prescribed at 27.201-2(a), insert the following clause:

                  Authorization and Consent (JUL 1995)

    (a) The Government authorizes and consents to all use and 
manufacture, in performing this contract or any subcontract at any tier, 
of any invention described in and covered by a United States patent (1) 
embodied in the structure or composition of any article the delivery of 
which is accepted by the Government under this contract or (2) used in 
machinery, tools, or methods whose use necessarily results from 
compliance by the Contractor or a subcontractor with (i) specifications 
or written provisions forming a part of this contract or (ii) specific 
written instructions given by the Contracting Officer directing the 
manner of performance. The entire liability to the Government for 
infringement of a patent of the United States shall be determined solely 
by the provisions of the indemnity clause, if any, included in this 
contract or any subcontract hereunder (including any lower-tier 
subcontract), and the Government assumes liability for all other 
infringement to the extent of the authorization and consent hereinabove 
granted.
    (b) The Contractor agrees to include, and require inclusion of, this 
clause, suitably modified to identify the parties, in all subcontracts 
at any tier for supplies or services (including construction, architect-
engineer services, and materials, supplies, models, samples, and design 
or testing services expected to exceed the simplified acquisition 
threshold (however, omission of this clause from any subcontract, 
including those at or below the simplified acquisition threshold, does 
not affect this authorization and consent.)

                             (End of clause)

    Alternate I (APR 1984). The following is substituted for paragraph 
(a) of the clause:

    (a) The Government authorizes and consents to all use and 
manufacture of any invention described in and covered by a United States 
patent in the performance of this contract or any subcontract at any 
tier.

    Alternate II (APR 1984). The following is substituted for paragraph 
(a) of the clause:

    (a) The Government authorizes and consents to all use and 
manufacture in the performance of any order at any tier or subcontract 
at any tier placed under this contract for communication services and 
facilities for which rates, charges, and tariffs are not established by 
a government regulatory body, of any invention described in and covered 
by a United States patent (1) embodied in the structure or composition 
of any article the delivery of which is accepted by the Government under 
this contract or (2) used in machinery, tools, or methods whose use 
necessarily results from compliance by the contractor or a subcontractor 
with specifications or written provisions forming a part of this 
contract or with specific written instructions given by the Contracting 
Officer directing the manner of performance.

[49 FR 12986, Mar. 30, 1984, as amended at 60 FR 34761, July 3, 1995]



Sec. 52.227-2  Notice and Assistance Regarding Patent and Copyright Infringement.

    As prescribed at 27.202-2, insert the following clause:

 Notice and Assistance Regarding Patent and Copyright Infringement (AUG 
                                  1996)

    (a) The Contractor shall report to the Contracting Officer, promptly 
and in reasonable written detail, each notice or claim of patent or 
copyright infringement based on the performance of this contract of 
which the Contractor has knowledge.
    (b) In the event of any claim or suit against the Government on 
account of any alleged patent or copyright infringement

[[Page 165]]

arising out of the performance of this contract or out of the use of any 
supplies furnished or work or services performed under this contract, 
the Contractor shall furnish to the Government, when requested by the 
Contracting Officer, all evidence and information in possession of the 
Contractor pertaining to such suit or claim. Such evidence and 
information shall be furnished at the expense of the Government except 
where the Contractor has agreed to indemnify the Government.
    (c) The Contractor agrees to include, and require inclusion of, this 
clause in all subcontracts at any tier for supplies or services 
(including construction and architect-engineer subcontracts and those 
for material, supplies, models, samples, or design or testing services) 
expected to exceed the simplified acquisition threshold at FAR 2.101.

                             (End of clause)

[49 FR 12987, Mar. 30, 1984, as amended at 61 FR 39198, July 26, 1996]



Sec. 52.227-3  Patent Indemnity.

    Insert the following clause as prescribed at 27.203-1(b), 27.203-
2(a), or 27.203-4(a)(2) as applicable:

                       Patent Indemnity (APR 1984)

    (a) The Contractor shall indemnify the Government and its officers, 
agents, and employees against liability, including costs, for 
infringement of any United States patent (except a patent issued upon an 
application that is now or may hereafter be withheld from issue pursuant 
to a Secrecy Order under 35 U.S.C. 181) arising out of the manufacture 
or delivery of supplies, the performance of services, or the 
construction, alteration, modification, or repair of real property 
(hereinafter referred to as construction work) under this contract, or 
out of the use or disposal by or for the account of the Government of 
such supplies or construction work.
    (b) This indemnity shall not apply unless the Contractor shall have 
been informed as soon as practicable by the Government of the suit or 
action alleging such infringement and shall have been given such 
opportunity as is afforded by applicable laws, rules, or regulations to 
participate in its defense. Further, this indemnity shall not apply to 
(1) an infringement resulting from compliance with specific written 
instructions of the Contracting Officer directing a change in the 
supplies to be delivered or in the materials or equipment to be used, or 
directing a manner of performance of the contract not normally used by 
the Contractor, (2) an infringement resulting from addition to or change 
in supplies or components furnished or construction work performed that 
was made subsequent to delivery or performance, or (3) a claimed 
infringement that is unreasonably settled without the consent of the 
Contractor, unless required by final decree of a court of competent 
jurisdiction.

                             (End of clause)

    Alternate I (APR 1984). The following paragraph (c) is added to the 
clause:

    (c) This patent indemnification shall not apply to the following 
items: ______ [Contracting Officer list and/or identify the items to be 
excluded from this indemnity]

    Alternate II (APR 1984). The following paragraph (c) is added to the 
clause:

    (c) This patent indemnification shall cover the following items: 
__________

     List or identify the items to be included under this indemnity

    Alternate III (JUL 1995). The following paragraph is added to the 
clause:

    ( ) As to subcontracts at any tier for communication service, this 
clause shall apply only to individual communication service 
authorizations over the simplified acquistion threshold issued under 
this contract and covering those communications services and facilities 
(1) that are or have been sold or offered for sale by the Contractor to 
the public, (2) that can be provided over commercially available 
equipment, or (3) that involve relatively minor modifications.

[49 FR 12987, Mar. 30, 1984, as amended at 56 FR 15156, Apr. 15, 1991; 
60 FR 34761, July 3, 1995]



Sec. 52.227-4  Patent Indemnity--Construction Contracts.

    As prescribed at 27.203-5, insert the following clause:

           Patent Indemnity--Construction Contracts (APR 1984)

    Except as otherwise provided, the Contractor agrees to indemnify the 
Government and its officers, agents, and employees against liability, 
including costs and expenses, for infringement upon any United States 
patent (except a patent issued upon an application that is now or may 
hereafter be withheld from issue pursuant to a Secrecy Order under 35 
U.S.C. 181) arising out of performing this contract or out of the use or 
disposal by or for the account of the Government of supplies furnished 
or work performed under this contract.

[[Page 166]]

                             (End of clause)

    Alternate I (APR 1984) Designate the first paragraph as paragraph(a) 
and add the following to the basic clause as paragraph (b):

    (b) This patent indemnification shall not apply to the following 
items:
_______________________________________________________________________
Contracting Officer specifically identify the item to be excluded
    Note: Exclusion from indemnity of specified, identified patents, as 
distinguished from items, is the exclusive prerogative of the agency 
head or designee (See 27.203-6).

[49 FR 12987, Mar. 30, 1984]



Sec. 52.227-5  Waiver of Indemnity.

    As prescribed at 27.203-6, insert the following clause:

                     Waiver of Indemnity (APR 1984)

    Any provision or clause of this contract to the contrary 
notwithstanding, the Government hereby authorizes and consents to the 
use and manufacture, solely in performing this contract, of any 
invention covered by the United States patents identified below and 
waives indemnification by the Contractor with respect to such patents:
_______________________________________________________________________
Contracting Officer identify the patents by number or by other means if 
more appropriate

                             (End of clause)

[49 FR 12987, Mar. 30, 1984]



Sec. 52.227-6  Royalty Information.

    As prescribed at 27.204-2, insert the following provision:

                     Royalty Information (APR 1984)

    (a) Cost or charges for royalties. When the response to this 
solicitation contains costs or charges for royalties totaling more than 
$250, the following information shall be included in the response 
relating to each separate item of royalty or license fee:
    (1) Name and address of licensor.
    (2) Date of license agreement.
    (3) Patent numbers, patent application serial numbers, or other 
basis on which the royalty is payable.
    (4) Brief description, including any part or model numbers of each 
contract item or component on which the royalty is payable.
    (5) Percentage or dollar rate of royalty per unit.
    (6) Unit price of contract item.
    (7) Number of units.
    (8) Total dollar amount of royalties.
    (b) Copies of current licenses. In addition, if specifically 
requested by the Contracting Officer before execution of the contract, 
the offeror shall furnish a copy of the current license agreement and an 
identification of applicable claims of specific patents.

                           (End of provision)

    Alternate I. (APR 1984) Substitute the following for the 
introductory portion of paragraph (a) of the basic clause:

    When the response to this solicitation covers charges for special 
construction or special assembly that contain costs or charges for 
royalties totaling more than $250, the following information shall be 
included in the response relating to each separate item of royalty or 
license fee:

[49 FR 12987, Mar. 30, 1984]



Sec. 52.227-7  Patents--Notice of Government Licensee.

    As prescribed at 27.204-3(c), insert the following provision:

            Patents--Notice of Government Licensee (APR 1984)

    The Government is obligated to pay a royalty applicable to the 
proposed acquisition because of a license agreement between the 
Government and the patent owner. The patent number is ____ [Contracting 
Officer fill in], and the royalty rate is ____ [Contracting Officer fill 
in]. If the offeror is the owner of, or a licensee under, the patent, 
indicate below:

                         ( ) Owner ( ) Licensee

    If an offeror does not indicate that it is the owner or a licensee 
of the patent, its offer will be evaluated by adding thereto an amount 
equal to the royalty.

                           (End of provision)

[49 FR 12988, Mar. 30, 1984]



Sec. 52.227-8  [Reserved]



Sec. 52.227-9  Refund of Royalties.

    As prescribed at 27.206-2, insert the following clause. In 
solicitations and contracts with an incentive fee arrangement, change 
price to target cost and target profit wherever it appears.

                     Refund of Royalties (APR 1984)

    (a) The contract price includes certain amounts for royalties 
payable by the Contractor or subcontractors or both, which amounts have 
been reported to the Contracting Officer.
    (b) The term royalties as used in this clause refers to any costs or 
charges in the nature of royalties, license fees, patent or license

[[Page 167]]

amortization costs, or the like, for the use of or for rights in patents 
and patent applications in connection with performing this contract or 
any subcontract hereunder.
    (c) The Contractor shall furnish to the Contracting Officer, before 
final payment under this contract, a statement of royalties paid or 
required to be paid in connection with performing this contract and 
subcontracts hereunder together with the reasons.
    (d) The Contractor will be compensated for royalties reported under 
paragraph (c) above, only to the extent that such royalties were 
included in the contract price and are determined by the Contracting 
Officer to be properly chargeable to the Government and allocable to the 
contract. To the extent that any royalties that are included in the 
contract price are not in fact paid by the Contractor or are determined 
by the Contracting Officer not to be properly chargeable to the 
Government and allocable to the contract, the contract price shall be 
reduced. Repayment or credit to the Government shall be made as the 
Contracting Officer directs.
    (e) If, at any time within 3 years after final payment under this 
contract, the Contractor for any reason is relieved in whole or in part 
from the payment of the royalties included in the final contract price 
as adjusted pursuant to paragraph (d) above, the Contractor shall 
promptly notify the Contracting Officer of that fact and shall reimburse 
the Government in a corresponding amount.
    (f) The substance of this clause, including this paragraph (f), 
shall be included in any subcontract in which the amount of royalties 
reported during negotiation of the subcontract exceeds $250.

                             (End of clause)

[49 FR 12988, Mar. 30, 1984]



Sec. 52.227-10  Filing of Patent Applications--Classified Subject Matter.

    As prescribed at 27.207-2, insert the following clause:

   Filing of Patent Applications--Classified Subject Matter (APR 1984)

    (a) Before filing or causing to be filed a patent application in the 
United States disclosing any subject matter of this contract classified 
Secret or higher, the Contractor shall, citing the 30-day provision 
below, transmit the proposed application to the Contracting Officer. The 
Government shall determine whether, for reasons of national security, 
the application should be placed under an order of secrecy, sealed in 
accordance with the provision of 35 U.S.C. 181-188, or the issuance of a 
patent otherwise delayed under pertinent United States statutes or 
regulations. The Contractor shall observe any instructions of the 
Contracting Officer regarding the manner of delivery of the patent 
application to the United States Patent Office, but the Contractor shall 
not be denied the right to file the application. If the Contracting 
Officer shall not have given any such instructions within 30 days from 
the date of mailing or other transmittal of the proposed application, 
the Contractor may file the application.
    (b) Before filing a patent application in the United States 
disclosing any subject matter of this contract classified Confidential, 
the Contractor shall furnish to the Contracting Officer a copy of the 
application for Government determination whether, for reasons of 
national security, the application should be placed under an order of 
secrecy or the issuance of a patent should be otherwise delayed under 
pertinent United States statutes or regulations.
    (c) Where the subject matter of this contract is classified for 
reasons of security, the Contractor shall not file, or cause to be 
filed, in any country other than in the United States as provided in 
paragraphs (a) and (b) of this clause, an application or registration 
for a patent containing any of the subject matter of this contract 
without first obtaining written approval of the Contracting Officer.
    (d) When filing any patent application coming within the scope of 
this clause, the Contractor shall observe all applicable security 
regulations covering the transmission of classified subject matter and 
shall promptly furnish to the Contracting Officer the serial number, 
filing date, and name of the country of any such application. When 
transmitting the application to the United States Patent Office, the 
Contractor shall by separate letter identify by agency and number the 
contract or contracts that require security classification markings to 
be placed on the application.
    (e) The Contractor agrees to include, and require the inclusion of, 
this clause in all subcontracts at any tier that cover or are likely to 
cover classified subject matter.

                             (End of clause)

[49 FR 12988, Mar. 30, 1984]



Sec. 52.227-11  Patent Rights--Retention by the Contractor (Short Form).

    As prescribed in 27.303(a), insert the following clause:

    Patent Rights-Retention by the Contractor (Short Form) (JUN 1997)

    (a) Definitions.
    (1) Invention means any invention or discovery which is or may be 
patentable or otherwise protectable under title 35 of the United States 
Code, or any novel variety of

[[Page 168]]

plant which is or may be protected under the Plant Variety Protection 
Act (7 U.S.C. 2321, et seq.).
    (2) Made when used in relation to any invention means the conception 
or first actual reduction to practice of such invention.
    (3) Nonprofit organization means a university or other institution 
of higher education or an organization of the type described in section 
501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)) and 
exempt from taxation under section 501(a) of the Internal Revenue Code 
(26 U.S.C. 501(a)) or any nonprofit scientific or educational 
organization qualified under a state nonprofit organization statute.
    (4) Practical application means to manufacture, in the case of a 
composition of product; to practice, in the case of a process or method, 
or to operate, in the case of a machine or system; and, in each case, 
under such conditions as to establish that the invention is being 
utilized and that its benefits are, to the extent permitted by law or 
Government regulations, available to the public on reasonable terms.
    (5) Small business firm means a small business concern as defined at 
section 2 of Pub. L. 85-536 (15 U.S.C. 632) and implementing regulations 
of the Administrator of the Small Business Administration. For the 
purpose of this clause, the size standards for small business concerns 
involved in Government procurement and subcontracting at 13 CFR 121.3-8 
and 13 CFR 121.3-12, respectively, will be used.
    (6) Subject invention means any invention of the contractor 
conceived or first actually reduced to practice in the performance of 
work under this contract, provided that in the case of a variety of 
plant, the date of determination (as defined in section 41(d) of the 
Plant Variety Protection Act, 7 U.S.C. 2401(d)) must also occur during 
the period of contract performance.
    (b) Allocation of principal rights. The Contractor may retain the 
entire right, title, and interest throughout the world to each subject 
invention subject to the provisions of this clause and 35 U.S.C. 203. 
With respect to any subject invention in which the Contractor retains 
title, the Federal Government shall have a nonexclusive, 
nontransferable, irrevocable, paid-up license to practice or have 
practiced for or on behalf of the United States the subject invention 
throughout the world.
    (c) Invention disclosure, election of title, and filing of patent 
application by contractor. (1) The Contractor will disclose each subject 
invention to the Federal agency within 2 months after the inventor 
discloses it in writing to Contractor personnel responsible for patent 
matters. The disclosure to the agency shall be in the form of a written 
report and shall identify the contract under which the invention was 
made and the inventor(s). It shall be sufficiently complete in technical 
detail to convey a clear understanding to the extent known at the time 
of the disclosure, of the nature, purpose, operation, and the physical, 
chemical, biological or electrical characteristics of the invention. The 
disclosure shall also identify any publication, on sale or public use of 
the invention and whether a manuscript describing the invention has been 
submitted for publication and, if so, whether it has been accepted for 
publication at the time of disclosure. In addition, after disclosure to 
the agency, the contractor will promptly notify the agency of the 
acceptance of any manuscript describing the invention for publication or 
of any on sale or public use planned by the Contractor.
    (2) The Contractor will elect in writing whether or not to retain 
title to any such invention by notifying the Federal agency within 2 
years of disclosure to the Federal agency. However, in any case where 
publication, on sale or public use has initiated the 1 year statutory 
period wherein valid patent protection can still be obtained in the 
United States, the period for election of title may be shortened by the 
agency to a date that is no more than 60 days prior to the end of the 
statutory period.
    (3) The Contractor will file its initial patent application on a 
subject invention to which it elects to retain title within 1 year after 
election of title, or, if earlier, prior to the end of any statutory 
period wherein valid patent protection can be obtained in the United 
States after a publication, on sale, or public use. The Contractor will 
file patent applications in additional countries or international patent 
offices within either 10 months of the corresponding initial patent 
application or 6 months from the date permission is granted by the 
Commissioner of Patents and Trademarks to file foreign patent 
applications where such filing has been prohibited by a Secrecy Order.
    (4) Requests for extension of the time for disclosure election, and 
filing under subparagraphs (c) (1), (2), and (3) of this clause may, at 
the discretion of the agency, be granted.
    (d) Conditions when the government may obtain title. The Contractor 
will convey to the Federal agency, upon written request, title to any 
subject invention--
    (1) If the Contractor fails to disclose or elect title to the 
subject invention within the times specified in paragraph (c) of this 
clause, or elects not to retain title; provided, that the agency may 
only request title within 60 days after learning of the failure of the 
Contractor to disclose or elect within the specified times.
    (2) In those countries in which the Contractor fails to file patent 
applications within the times specified in paragraph (c) of this clause; 
provided, however, that if the Contractor has filed a patent application 
in a

[[Page 169]]

country after the times specified in paragraph (c) of this clause, but 
prior to its receipt of the written request of the Federal agency, the 
Contractor shall continue to retain title in that country.
    (3) In any country in which the Contractor decided not to continue 
the prosecution of any application for, to pay the maintenance fees on, 
or defend in reexamination or opposition proceeding on, a patent on a 
subject invention.
    (e) Minimum rights to Contractor and protection of the Contractor 
right to file. (1) The Contractor will retain a nonexclusive royalty-
free license throughout the world in each subject invention to which the 
Government obtains title, except if the Contractor fails to disclose the 
invention within the times specified in paragraph (c) of this clause. 
The Contractor's license extends to its domestic subsidiary and 
affiliates, if any, within the corporate structure of which the 
Contractor is a party and includes the right to grant sublicenses of the 
same scope to the extent the Contractor was legally obligated to do so 
at the time the contract was awarded. The license is transferable only 
with the approval of the Federal Agency, except when transferred to the 
successor of that part of the Contractor's business to which the 
invention pertains.
    (2) The Contractor's domestic license may be revoked or modified by 
the funding Federal agency to the extent necessary to achieve 
expeditious practical application of subject invention pursuant to an 
application for an exclusive license submitted in accordance with 
applicable provisions at 37 CFR part 404 and agency licensing 
regulations (if any). This license will not be revoked in that field of 
use or the geographical areas in which the Contractor has achieved 
practical application and continues to make the benefits of the 
invention reasonably accessible to the public. The license in any 
foreign country may be revoked or modified at the discretion of the 
funding Federal agency to the extent the Contractor, its licensees, or 
the domestic subsidiaries or affiliates have failed to achieve practical 
application in that foreign country.
    (3) Before revocation or modification of the license, the funding 
Federal agency will furnish the Contractor a written notice of its 
intention to revoke or modify the license, and the Contractor will be 
allowed 30 days (or such other time as may be authorized by the funding 
Federal agency for good cause shown by the Contractor) after the notice 
to show cause why the license should not be revoked or modified. The 
Contractor has the right to appeal, in accordance with applicable 
regulations in 37 CFR part 404 and agency regulations, if any, 
concerning the licensing revocation of modification of the license.
    (f) Contractor action to protect the government's interest. (1) The 
Contractor agrees to execute or to have executed and promptly deliver to 
the Federal agency all instruments necessary to (i) establish or confirm 
the rights the government has throughout the world in those subject 
inventions to which the Contractor elects to retain title, and (ii) 
convey title to the Federal agency when requested under paragraph (d) of 
this clause and to enable the Government to obtain patent protection 
throughout the world in that subject invention.
    (2) The Contractor agrees to require, by written agreement, its 
employees, other than clerical and nontechnical employees, to disclose 
promptly in writing to personnel identified as responsible for the 
administration of patent matters and in a format suggested by the 
Contractor each subject invention made under contract in order that the 
Contractor can comply with the disclosure provisions of paragraph (c) of 
this clause, and to execute all papers necessary to file patent 
applications on subject inventions and to establish the Government's 
rights in the subject inventions. This disclosure format should require, 
as a minimum, the information required by subparagraph (c)(1) of this 
clause. The Contractor shall instruct such employees, through employee 
agreements or other suitable educational programs, on the importance of 
reporting inventions in sufficient time to permit the filing of patent 
applications prior to U.S. or foreign statutory bars.
    (3) The Contractor will notify the Federal agency of any decisions 
not to continue the prosecution of a patent application, pay maintenance 
fees, or defend in a reexamination or opposition proceeding on a patent, 
in any country, not less than 30 days before the expiration of the 
response period required by the relevant patent office.
    (4) The Contractor agrees to include, within the specification of 
any United States patent application and any patent issuing thereon 
covering a subject invention, the following statement, ``The invention 
was made with Government support under (identify the contract) awarded 
by (identify the Federal agency). The Government has certain rights in 
the invention.''
    (g) Subcontracts. (1) The Contractor will include this clause, 
suitably modified to identify the parties, in all subcontracts, 
regardless of tier, for experimental, developmental, or research work to 
be performed by a small business firm or domestic nonprofit 
organization. The subcontractor will retain all rights provided for the 
Contractor in this clause, and the Contractor will not, as part of the 
consideration for awarding the subcontract, obtain rights in the 
subcontractor's subject inventions.
    (2) The Contractor will include in all other subcontracts, 
regardless of tier, for experimental, developmental, or research work 
the patent rights clause required by subpart 27.3.

[[Page 170]]

    (3) In the case of subcontracts, at any tier, the agency, 
subcontractor, and the Contractor agree that the mutual obligations of 
the parties created by this clause constitute a contract between the 
subcontractor and the Federal agency with respect to the matters covered 
by the clause; provided, however, that nothing in this paragraph is 
intended to confer any jurisdiction under the Contract Disputes Act in 
connection with proceedings under paragraph (j) of this clause.
    (h) Reporting on utilization of subject inventions. The Contractor 
agrees to submit, on request, periodic reports no more frequently than 
annually on the utilization of a subject invention or on efforts at 
obtaining such utilization that are being made by the Contractor or its 
licensees or assignees. Such reports shall include information regarding 
the status of development, date of first commercial sale or use, gross 
royalties received by the Contractor, and such other data and 
information as the agency may reasonably specify. The Contractor also 
agrees to provide additional reports as may be requested by the agency 
in connection with any march-in proceeding undertaken by the agency in 
accordance with paragraph (j) of this clause. As required by 35 U.S.C. 
202(c)(5), the agency agrees it will not disclose such information to 
persons outside the Government without permission of the Contractor.
    (i) Preference for United States industry. Notwithstanding any other 
provision of this clause, the Contractor agrees that neither it nor any 
assignee will grant to any person the exclusive right to use or sell any 
subject invention in the United States unless such person agrees that 
any product embodying the subject invention or produced through the use 
of the subject invention will be manufactured substantially in the 
United States. However, in individual cases, the requirement for such an 
agreement may be waived by the Federal agency upon a showing by the 
Contractor or its assignee that reasonable but unsuccessful efforts have 
been made to grant licenses on similar terms to potential licensees that 
would be likely to manufacture substantially in the United States or 
that under the circumstances domestic manufacture is not commercially 
feasible.
    (j) March-in rights. The Contractor agrees that, with respect to any 
subject invention in which it has acquired title, the Federal agency has 
the right in accordance with the procedures in 37 CFR 401.6 and any 
supplemental regulations of the agency to require the Contractor, an 
assignee or exclusive licensee of a subject invention to grant a 
nonexclusive, partially exclusive, or exclusive license in any field of 
use to a responsible applicant or applicants, upon terms that are 
reasonable under the circumstances, and if the Contractor, assignee, or 
exclusive licensee refuses such a request the Federal agency has the 
right to grant such a license itself if the Federal agency determines 
that--
    (1) Such action is necessary because the Contractor or assignee has 
not taken, or is not expected to take within a reasonable time, 
effective steps to achieve practical application of the subject 
invention in such field of use;
    (2) Such action is necessary to alleviate health or safety needs 
which are not reasonably satisfied by the Contractor, assignee, or their 
licensees;
    (3) Such action is necessary to meet requirements for public use 
specified by Federal regulations and such requirements are not 
reasonably satisifed by the Contractor, assignee, or licensees; or
    (4) Such action is necessary because the agreement required by 
paragraph (i) of this clause has not been obtained or waived or because 
a licensee of the exclusive right to use or sell any subject invention 
in the United States is in breach of such agreement.
    (k) Special provisions for contracts with nonprofit organizations. 
If the Contractor is a nonprofit organization, it agrees that--
    (1) Rights to a subject invention in the United States may not be 
assigned without the approval of the Federal agency, except where such 
assignment is made to an organization which has as one of its primary 
functions the management of inventions, provided that such assignee will 
be subject to the same provisions as the Contractor;
    (2) The Contractor will share royalties collected on a subject 
invention with the inventor, including Federal employee co-inventors 
(when the agency deems it appropriate) when the subject invention is 
assigned in accordance with 35 U.S.C. 202(e) and 37 CFR 401.10;
    (3) The balance of any royalties or income earned by the Contractor 
with respect to subject inventions, after payment of expenses (including 
payments to inventors) incidental to the administration of subject 
inventions will be utilized for the support of scientific research or 
education; and
    (4) It will make efforts that are reasonable under the circumstances 
to attract licensees of subject inventions that are small business 
firms, and that it will give a preference to a small business firm when 
licensing a subject invention if the Contractor determines that the 
small business firm has a plan or proposal for marketing the invention 
which, if executed, is equally as likely to bring the invention to 
practical application as any plans or proposals from applicants that are 
not small business firms; provided, that the Contractor is also 
satisfied that the small business firm has the capability and resources 
to carry out its plan or proposal. The decision whether to give a 
preference in any specific case will be at the discretion of the 
contractor. However, the Contractor agrees that the

[[Page 171]]

Secretary of Commerce may review the Contractor's licensing program and 
decisions regarding small business applicants, and the Contractor will 
negotiate changes to its licensing policies, procedures, or practices 
with the Secretary of Commerce when the Secretary's review discloses 
that the Contractor could take reasonable steps to more effectively 
implement the requirements of this subparagraph (k)(4).
    (l) Communications.
    (Complete according to agency instructions.)

                             (End of clause)

    Alternate I (JUN 1989). As prescribed in 27.303(a)(3), add the 
following sentence at the end of paragraph (b) of the basic clause:

    The license shall include the right of the Government to sublicense 
foreign governments, their nationals and international organizations 
pursuant to the following treaties or international agreements: ________ 
*
    [*Contracting Officer complete with the names of applicable existing 
treaties or international agreements. The above language is not intended 
to apply to treaties or agreements that are in effect on the date of the 
award but are not listed.]

    Alternate II (JUN 1989). As prescribed in 27.303(a)(3), add the 
following sentence at the end of paragraph (b) of the basic clause:

    The agency reserves the right to unilaterally amend this contract to 
identify specific treaties or international agreements entered into or 
to be entered into by the Government after the effective date of the 
contract and effectuate those license or other rights which are 
necessary for the Government to meet its obligations to foreign 
governments, their nationals and international organizations under such 
treaties or international agreements with respect to subject inventions 
made after the date of the amendment.

    Alternate III (JUN 1989). As prescribed in 27.303(a)(4), substitute 
the following in place of subparagraph (k)(3) of the basic clause:

    (3) After payment of patenting costs, licensing costs, payments to 
inventors, and other expenses incidental to the administration of 
subject inventions, the balance of any royalties or income earned and 
retained by the Contractor during any fiscal year on subject inventions 
under this or any successor contract containing the same requirement, up 
to any amount equal to 5 percent of the budget of the facility for that 
fiscal year, shall be used by the Contractor for the scientific 
research, development, and education consistent with the research and 
development mission and objectives of the facility, including activities 
that increase the licensing potential of other inventions of the 
facility. If the balance exceeds 5 percent, 75 percent of the excess 
above 5 percent shall be paid by the Contractor to the Treasury of the 
United States and the remaining 25 percent shall be used by the 
Contractor only for the same purposes as described above. To the extent 
it provides the most effective technology transfer, the licensing of 
subject inventions shall be administered by Contractor employees on 
location at the facility.

    Alternate IV (JUN 1989). As prescribed in 27.303(a)(5), include the 
following subparagraph in paragraph (f) of the basic clause:

    (5) The Contractor shall establish and maintain active and effective 
procedures to ensure that subject inventions are promptly identified and 
timely disclosed, and shall submit a description of the procedures to 
the Contracting Officer so that the Contracting Officer may evaluate and 
determine their effectiveness.

[54 FR 25069, June 12, 1989, as amended at 62 FR 40238, July 25, 1997]



Sec. 52.227-12  Patent Rights--Retention by the Contractor (Long Form)

    As prescribed at 27.303(b), insert the following clause:

    Patent Rights--Retention by the Contractor (Long Form) (JAN 1997)

    (a) Definitions.
    Invention means any invention or discovery which is or may be 
patentable or otherwise protectable under title 35 of the United States 
Code or any novel variety of plant that is or may be protectable under 
the Plant Variety Protection Act (7 U.S.C. 2321 et seq.).
    Made when used in relation to any invention means the conception or 
first actual reduction to practice of such invention.
    Nonprofit organization means a domestic university or other 
institution of higher education or an organization of the type described 
in section 501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 
501(c)) and exempt from taxation under section 501(a) of the Internal 
Revenue Code (26 U.S.C. 501(a)) or any nonprofit scientific or 
educational organization qualified under a state nonprofit organization 
statute.
    Practical application means to manufacture in the case of a 
composition or product, to practice in the case of a process or method, 
or to operate in the case of a machine or system; and, in each case, 
under such conditions as to establish that the invention is being

[[Page 172]]

utilized and that its benefits are, to the extent permitted by law or 
Government regulations, available to the public on reasonable terms.
    Small business firm means a small business concern as defined at 
section 2 of Pub. L. 85-536 (15 U.S.C. 532) and implementing regulations 
of the Administrator of the Small Business Administration. For the 
purpose of this clause, the size standards for small business concerns 
involved in Government procurement and subcontracting at 13 CFR 121.3-8 
and 13 CFR 121.3-12, respectively, will be used.
    Subject invention means any invention of the Contractor conceived or 
first actually reduced to practice in the performance of work under this 
contract; provided, that in the case of a variety of plant, the date of 
determination (as defined in section 41(d) of the Plant Variety 
Protection Act, 7 U.S.C. 2401(d)) must also occur during the period of 
contract performance.
    (b) Allocation of principal rights. The Contractor may elect to 
retain the entire right, title, and interest throughout the world to 
each subject invention subject to the provisions of this clause and 35 
U.S.C. 203. With respect to any subject invention in which the 
Contractor elects to retain title, the Federal Government shall have a 
nonexclusive, nontransferable, irrevocable, paid-up license to practice 
or have practiced for or on behalf of the United States the subject 
invention throughout the world.
    (c) Invention disclosure, election of title, and filing of patent 
applications by Contractor. (1) The Contractor shall disclose each 
subject invention to the Contracting Officer within 2 months after the 
inventor discloses it in writing to Contractor personnel responsible for 
patent matters or within 6 months after the Contractor becomes aware 
that a subject invention has been made, whichever is earlier. The 
disclosure to the Contracting Officer shall be in the form of a written 
report and shall identify the contract under which the invention was 
made and the inventor(s). It shall be sufficiently complete in technical 
detail to convey a clear understanding, to the extent known at the time 
of the disclosure, of the nature, purpose, operation, and physical, 
chemical, biological, or electrical characteristics of the invention. 
The disclosure shall also identify any publication, on sale, or public 
use of the invention and whether a manuscript describing the invention 
has been submitted for publication and, if so, whether it has been 
accepted for publication at the time of disclosure. In addition, after 
disclosure to the Contracting Officer, the Contractor shall promptly 
notify the Contracting Officer of the acceptance of any manuscript 
describing the invention for publication or of any on sale or public use 
planned by the Contractor.
    (2) The Contractor shall elect in writing whether or not to retain 
title to any such invention by notifying the Federal agency at the time 
of disclosure or within 8 months of disclosure, as to those countries 
(including the United States) in which the Contractor will retain title; 
provided, that in any case where publication, on sale, or public use has 
initiated the 1-year statutory period wherein valid patent protection 
can still be obtained in the United States, the period of election of 
title may be shortened by the agency to a date that is no more than 60 
days prior to the end of the statutory period.
    (3) The Contractor shall file its initial patent application on an 
elected invention within 1 year after election or, if earlier, prior to 
the end of any statutory period wherein valid patent protection can be 
obtained in the United States after a publication, on sale, or public 
use. The Contractor shall file patent applications in additional 
countries (including the European Patent Office and under the Patent 
Cooperation Treaty) within either 10 months of the corresponding initial 
patent application or 6 months from the date permission is granted by 
the Commissioner of Patents and Trademarks to file foreign patent 
applications where such filing has been prohibited by a Secrecy Order.
    (4) Requests for extension of the time for disclosure to the 
Contracting Officer, election, and filing may, at the discretion of the 
funding Federal agency, be granted, and will normally be granted unless 
the Contracting Officer has reason to believe that a particular 
extension would prejudice the Government's interest.
    (d) Conditions when the Government may obtain title. The Contractor 
shall convey to the Federal agency, upon written request, title to any 
subject invention--
    (1) If the Contractor elects not to retain title to a subject 
invention;
    (2) If the Contractor fails to disclose or elect the subject 
invention within the times specified in paragraph (c) above (the agency 
may only request title within 60 days after learning of the Contractor's 
failure to report or elect within the specified times);
    (3) In those countries in which the Contractor fails to file patent 
applications within the times specified in paragraph (c) above; 
provided, however, that if the Contractor has filed a patent application 
in a country after the times specified in paragraph (c) above, but prior 
to its receipt of the written request of the Federal agency, the 
Contractor shall continue to retain title in that country; or
    (4) In any country in which the Contractor decides not to continue 
the prosecution of any application for, to pay the maintenance fees on, 
or defend in reexamination or opposition proceeding on, a patent on a 
subject invention.

[[Page 173]]

    (e) Minimum rights to Contractor. (1) The Contractor shall retain a 
nonexclusive, royalty-free license throughout the world in each subject 
invention to which the Government obtains title except if the Contractor 
fails to disclose the subject invention within the times specified in 
paragraph (c) above. The Contractor's license extends to its domestic 
subsidiaries and affiliates, if any, within the corporate structure of 
which the Contractor is a part and includes the right to grant 
sublicenses of the same scope to the extent the Contractor was legally 
obligated to do so at the time the contract was awarded. The license is 
transferable only with the approval of the funding Federal agency except 
when transferred to the successor of that part of the Contractor's 
business to which the invention pertains.
    (2) The Contractor's domestic license may be revoked or modified by 
the funding Federal agency to the extent necessary to achieve 
expeditious practical application of the subject invention pursuant to 
an application for an exclusive license submitted in accordance with 
applicable provisions in the Federal Property Management Regulations and 
agency licensing regulations (if any). This license shall not be revoked 
in that field of use or the geographical areas in which the Contractor 
has achieved practical application and continues to make the benefits of 
the invention reasonably accessible to the public. The license in any 
foreign country may be revoked or modified at the discretion of the 
funding Federal agency to the extent the Contractor, its licensees, or 
its domestic subsidiaries or affiliates have failed to achieve practical 
applciation in that foreign country.
    (3) Before revocation or modification of the license, the funding 
Federal agency shall furnish the Contractor a written notice of its 
intention to revoke or modify the license, and the Contractor shall be 
allowed 30 days (or such other time as may be authorized by the funding 
Federal agency for good cause shown by the Contractor) after the notice 
to show cause why the license should not be revoked or modified. The 
Contractor has the right to appeal, in accordance with applicable agency 
licensing regulations and 37 CFR 404 concerning the licensing of 
Government-owned inventions, any decision concerning the revocation or 
modification of its license.
    (f) Contractor action to protect the Government's interest. (1) The 
Contractor agrees to execute or to have executed and promptly deliver to 
the Federal agency all instruments necessary to (i) establish or confirm 
the rights the Government has throughout the world in those subject 
inventions to which the Contractor elects to retain title, and (ii) 
convey title to the Federal agency when requested under paragraph (d) 
above and subparagraph (n)(2) below, and to enable the Government to 
obtain patent protection throughout the world in that subject invention.
    (2) The Contractor agrees to require, by written agreement, its 
employees, other than clerical and nontechnical employees, to disclose 
promptly in writing to personnel identified as responsible for the 
administration of patent matters and in a format suggested by the 
Contractor each subject invention made under contract in order that the 
Contractor can comply with the disclosure provisions of paragraph (c) 
above, and to execute all papers necessary to file patent applications 
on subject inventions and to establish the Government's rights in the 
subject inventions. This disclosure format should require, as a minimum, 
the information required by subparagraph (c)(1) above. The Contractor 
shall instruct such employees through employee agreements or other 
suitable educational programs on the importance of reporting inventions 
in sufficient time to permit the filing of patent applications prior to 
U.S. or foreign statutory bars.
    (3) The Contractor shall notify the Federal agency of any decision 
not to continue the prosecution of a patent application, pay maintenance 
fees, or defend in a reexamination or opposition proceeding on a patent, 
in any country, not less than 30 days before the expiration of the 
response period required by the relevant patent office.
    (4) The Contractor agrees to include, within the specification of 
any United States patent application and any patent issuing thereon 
covering a subject invention, the following statement: ``This invention 
was made with Government support under (identify the contract) awarded 
by (identify the Federal agency). The Government has certain rights in 
this invention.''
    (5) The Contractor shall establish and maintain active and effective 
procedures to assure that subject inventions are promptly identified and 
disclosed to Contractor personnel responsible for patent matters within 
6 months of conception and/or first actual reduction to practice, 
whichever occurs first in performance of work under this contract. These 
procedures shall include the maintenance of laboratory notebooks or 
equivalent records and other records as are reasonably necessary to 
document the conception and/or the first actual reduction to practice of 
subject inventions, and records that show that the procedures for 
identifying and disclosing the inventions are followed. Upon request, 
the Contractor shall furnish the Contracting Officer a description of 
such procedures for evaluation and for determination as to their 
effectiveness.
    (6) The Contractor agrees, when licensing a subject invention, to 
arrange to avoid royalty charges on acquisitions involving Government 
funds, including funds derived through Military Assistance Program of 
the Government or otherwise derived through

[[Page 174]]

the Government, to refund any amounts received as royalty charges on the 
subject invention in acquisitions for, or on behalf of, the Government, 
and to provide for such refund in any instrument transferring rights in 
the invention to any party.
    (7) The Contractor shall furnish the Contracting Officer the 
following:
    (i) Interim reports every 12 months (or such longer period as may be 
specified by the Contracting Officer) from the date of the contract, 
listing subject inventions during that period and stating that all 
subject inventions have been disclosed or that there are no such 
inventions.
    (ii) A final report, within 3 months after completion of the 
contracted work, listing all subject inventions or stating that there 
were no such inventions, and listing all subcontracts at any tier 
containing a patent rights clause or stating that there were no such 
subcontracts.
    (8) The Contractor shall promptly notify the Contracting Officer in 
writing upon the award of any subcontract at any tier containing a 
patent rights clause by identifying the subcontractor, the applicable 
patent rights clause, the work to be performed under the subcontract, 
and the dates of award and estimated completion. Upon request of the 
Contracting Officer, the Contractor shall furnish a copy of such 
subcontract, and no more frequently than annually, a listing of the 
subcontracts that have been awarded.
    (9) In the event of a refusal by a prospective subcontractor to 
accept one of the clauses in subparagraph (g) (1) or (2) below, the 
Contractor (i) shall promptly submit a written notice to the Contracting 
Officer setting forth the subcontractor's reasons for such refusal and 
other pertinent information that may expedite disposition of the matter 
and (ii) shall not proceed with such subcontracting without the written 
authorization of the Contracting Officer.
    (10) The Contractor shall provide, upon request, the filing date, 
serial number and title, a copy of the patent application (including an 
English-language version if filed in a language other than English), and 
patent number and issue date for any subject invention for which the 
Contractor has retained title.
    (11) Upon request, the Contractor shall furnish the Government an 
irrevocable power to inspect and make copies of the patent application 
file.
    (g) Subcontracts. (1) The Contractor shall include the clause at 
52.227-11 of the Federal Acquisition Regulation (FAR), suitably modified 
to identify the parties, in all subcontracts, regardless of tier, for 
experimental, developmental, or research work to be performed by a small 
business firm or nonprofit organization. The subcontractor shall retain 
all rights provided for the Contractor in this clause, and the 
Contractor shall not, as part of the consideration for awarding the 
subcontract, obtain rights in the subcontractor's subject inventions.
    (2) The Contractor shall include this clause (FAR 52.227-12) in all 
other subcontracts, regardless of tier, for experimental, developmental, 
or research work.
    (3) In the case of subcontracts, at any tier, when the prime award 
with the Federal agency was a contract (but not a grant or cooperative 
agreement), the agency, subcontractor, and the Contractor agree that the 
mutual obligations of the parties created by this clause constitute a 
contract between the subcontractor and the Federal agency with respect 
to those matters covered by this clause.
    (h) Reporting utilization of subject inventions. The Contractor 
agrees to submit on request periodic reports no more frequently than 
annually on the utilization of a subject invention or on efforts at 
obtaining such utilization that are being made by the Contractor or its 
licensees or assignees. Such reports shall include information regarding 
the status of development, date of first commercial sale or use, gross 
royalties received by the Contractor, and such other data and 
information as the agency may reasonably specify. The Contractor also 
agrees to provide additional reports as may be requested by the agency 
in connection with any march-in proceedings undertaken by the agency in 
accordance with paragraph (j) of this clause. To the extent data or 
information supplied under this paragraph is considered by the 
Contractor, its licensee or assignee to be privileged and confidential 
and is so marked, the agency agrees that, to the extent permitted by 
law, it shall not disclose such information to persons outside the 
Government.
    (i) Preference for United States industry. Notwithstanding any other 
provision of this clause, the Contractor agrees that neither it nor any 
assignee will grant to any person the exclusive right to use or sell any 
subject invention in the United States unless such person agrees that 
any products embodying the subject invention will be manufactured 
substantially in the United States. However, in individual cases, the 
requirement for such an agreement may be waived by the Federal agency 
upon a showing by the Contractor or its assignee that reasonable but 
unsuccessful efforts have been made to grant licenses on similar terms 
to potential licensees that would be likely to manufacture substantially 
in the United States or that under the circumstances domestic 
manufacture is not commercially feasible.
    (j) March-in rights. The Contractor agrees that with respect to any 
subject invention in which it has acquired title, the Federal agency has 
the right in accordance with the procedures in FAR 27.304-1(g) to 
require the

[[Page 175]]

Contractor, an assignee, or exclusive licensee of a subject invention to 
grant a nonexclusive, partially exclusive, or exclusive license in any 
field of use to a responsible applicant or applicants, upon terms that 
are reasonable under the circumstances, and if the Contractor, assignee, 
or exclusive licensee refuses such a request, the Federal agency has the 
right to grant such a license itself if the Federal agency determines 
that--
    (1) Such action is necessary because the Contractor or assignee has 
not taken, or is not expected to take within a reasonable time, 
effective steps to achieve practical application of the subject 
invention in such field of use;
    (2) Such action is necessary to alleviate health or safety needs 
which are not reasonably satisfied by the Contractor, assignee, or their 
licensees;
    (3) Such action is necessary to meet requirements for public use 
specified by Federal regulations and such requirements are not 
reasonably satisfied by the Contractor, assignee, or licensees,; or
    (4) Such action is necessary because the agreement required by 
paragraph (i) of this clause has not been obtained or waived or because 
a licensee of the exclusive right to use or sell any subject invention 
in the United States is in breach of such agreement.
    (k) Special provisions for contracts with nonprofit organizations. 
[Reserved]
    (l) Communications. (Complete according to agency instructions.)
    (m) Other inventions. Nothing contained in this clause shall be 
deemed to grant to the Government any rights with respect to any 
invention other than a subject invention.
    (n) Examination of records relating to inventions. (1) The 
Contracting Officer or any authorized representative shall, until 3 
years after final payment under this contract, have the right to examine 
any books (including laboratory notebooks), records, and documents of 
the Contractor relating to the conception or first reduction to practice 
of inventions in the same field of technology as the work under this 
contract to determine whether--
    (i) Any such inventions are subject inventions;
    (ii) The Contractor has established and maintains the procedures 
required by subparagraphs (f)(2) and (f)(3) of this clause; and
    (iii) The Contractor and its inventors have complied with the 
procedures.
    (2) If the Contracting Officer determines that an inventor has not 
disclosed a subject invention to the Contractor in accordance with the 
procedures required by subparagraph (f)(5) of this clause, the 
Contracting Officer may, within 60 days after the determination, request 
title in accordance with subparagraphs (d)(2) and (d)(3) of this clause. 
However, if the Contractor establishes that the failure to disclose did 
not result from the Contractor's fault or negligence, the Contracting 
Officer shall not request title.
    (3) If the Contracting Officer learns of an unreported Contractor 
invention which the Contracting Officer believes may be a subject 
invention, the Contractor may be required to disclose the invention to 
the agency for a determination of ownership rights.
    (4) Any examination of records under this paragraph shall be subject 
to appropriate conditions to protect the confidentiality of the 
information involved.
    (o) Withholding of payment (this paragraph does not apply to 
subcontracts). (1) Any time before final payment under this contract, 
the Contracting Officer may, in the Government's interest, withhold 
payment until a reserve not exceeding $50,000 or 5 percent of the amount 
of the contract, whichever is less, shall have been set aside if, in the 
Contracting Officer's opinion, the Contractor fails to--
    (i) Establish, maintain, and follow effective procedures for 
identifying and disclosing subject inventions pursuant to subparagraph 
(f)(5) above;
    (ii) Disclose any subject invention pursuant to subparagraph (c)(1) 
above;
    (iii) Deliver acceptable interim reports pursuant to subdivision 
(f)(7)(i) above; or
    (iv) Provide the information regarding subcontracts pursuant to 
subparagraph (f)(8) of this clause.
    (2) Such reserve or balance shall be withheld until the Contracting 
Officer has determined that the Contractor has rectified whatever 
deficiencies exist and has delivered all reports, disclosures, and other 
information required by this clause.
    (3) Final payment under this contract shall not be made before the 
Contractor delivers to the Contracting Officer all disclosures of 
subject inventions required by subparagraph (c)(1) above, an acceptable 
final report pursuant to subdivision (f)(7)(ii) above, and all past due 
confirmatory instruments.
    (4) The Contracting Officer may decrease or increase the sums 
withheld up to the maximum authorized above. No amount shall be withheld 
under this paragraph while the amount specified by this paragraph is 
being withheld under other provisions of the contract. The withholding 
of any amount or the subsequent payment thereof shall not be construed 
as a waiver of any Government right.

                             (End of clause)

    Alternate I (JUN 1989). As prescribed in 27.303(b)(2), add the 
following sentence at the end of paragraph (b) of the basic clause:


[[Page 176]]


    The license shall include the right of the Government to sublicense 
foreign governments, their nationals, and international organizations 
pursuant to the following treaties or international agreements: ______*
    [*Contracting Officer complete with the names of applicable existing 
treaties or international agreements. The above language is not intended 
to apply to treaties or agreements that are in effect on the date of the 
award but are not listed.]

    Alternate II (JUNE 1989). As prescribed in 27.303(b)(2), add the 
following sentence at the end of paragraph (b) of the basic clause:

    The agency reserves the right to unilaterally amend this contract to 
identify specific treaties or international agreements entered into or 
to be entered into by the Government after the effective date of this 
contract and effectuate those license or other rights which are 
necessary for the Government to meet its obligations to foreign 
governments, their nationals, and international organizations under such 
treaties or international agreement with respect to subject inventions 
made after the date of the amendment.

[49 FR 12991, Mar. 30, 1984, as amended at 54 FR 25072, June 12, 1989; 
54 FR 49296, Nov. 30, 1989; 55 FR 38518, Sept. 18, 1990; 62 FR 239, Jan. 
2, 1997]



Sec. 52.227-13  Patent Rights--Acquisition by the Government.

    As prescribed at 27.303(c), insert the following clause:

         Patent Rights--Acquisition by the Government (JAN 1997)

    (a) Definitions.
    Invention, as used in this clause, means any invention or discovery 
which is or may be patentable or otherwise protectable under title 35 of 
the United States Code or any novel variety of plant that is or may be 
protectable under the Plant Variety Protection Act (7 U.S.C. 2321, et 
seq.).
    Subject invention, as used in this clause, means any invention of 
the Contractor conceived or first actually reduced to practice in the 
performance of work under this contract; provided, that in the case of a 
variety of plant, the date of determination (as defined in section 41(d) 
of the Plant Variety Protection Act, 7 U.S.C. 2401(d)) must also occur 
during the period of contract performance.

    Practical application, as used in this clause, means to manufacture, 
in the case of a composition or product; to practice, in the case of a 
process or method; or to operate, in the case of a machine or system; 
and, in each case, under such conditions as to establish that the 
invention is being utilized and that its benefits are, to the extent 
permitted by law or Government regulations, available to the public on 
reasonable terms.
    (b) Allocations of principal rights. (1) Assignment to the 
Government. The Contractor agrees to assign to the Government the entire 
right, title, and interest throughout the world in and to each subject 
invention, except to the extent that rights are retained by the 
Contractor under subparagraph (b)(2) and paragraph (d) below.
    (2) Greater rights determinations (i) The Contractor, or an 
employee-inventor after consultation with the Contractor, may retain 
greater rights than the nonexclusive license provided in paragraph (d) 
below, in accordance with the procedures of paragraph 27.304-1(a) of the 
Federal Acquisition Regulation (FAR). A request for a determination of 
whether the Contractor or the employee-inventor is entitled to retain 
such greater rights must be submitted to the Head of the Contracting 
Agency or designee at the time of the first disclosure of the invention 
pursuant to subparagraph (e)(2) below, or not later than 8 months 
thereafter, unless a longer period is authorized in writing by the 
Contracting Officer for good cause shown in writing by the Contractor. 
Each determination of greater rights under this contract normally shall 
be subject to paragraph (c) below, and to the reservations and 
conditions deemed to be appropriate by the Head of the Contracting 
Agency or designee.
    (ii) Upon request, the Contractor shall provide the filing date, 
serial number and title, a copy of the patent application (including an 
English-language version if filed in a language other than English), and 
patent number and issue date for any subject invention in any country 
for which the Contractor has retained title.
    (iii) Upon request, the Contractor shall furnish the Government an 
irrevocable power to inspect and make copies of the patent application 
file.
    (c) Minimum rights acquired by the Government. (1) With respect to 
each subject invention to which the Contractor retains principal or 
exclusive rights, the Contractor agrees as follows:
    (i) The Contractor hereby grants to the Government a nonexclusive, 
nontransferable, irrevocable, paid-up license to practice or have 
practiced each subject invention throughout the world by or on behalf of 
the Government of the United States (including any Government agency).
    (ii) The Contractor agrees that with respect to any subject 
invention in which it has acquired title, the Federal agency has the 
right in accordance with the procedures in FAR 27.304-1(g) to require 
the Contractor, an assignee, or exclusive licensee of a subject 
invention to grant a nonexclusive, partially exclusive, or exclusive 
license in any field of use to a responsible applicant or applicants, 
upon terms that are reasonable under the

[[Page 177]]

circumstances, and if the Contractor, assignee, or exclusive licensee 
refuses such a request, the Federal agency has the right to grant such a 
license itself if the Federal agency determines that--
    (A) Such action is necessary because the Contractor or assignee has 
not taken, or is not expected to take within a reasonable time, 
effective steps to achieve practical application of the subject 
invention in such field of use;
    (B) Such action is necessary to alleviate health or safety needs 
which are not reasonably satisfied by the Contractor, assignee, or their 
licensees;
    (C) Such action is necessary to meet requirements for public use 
specified by Federal regulations and such requirements are not 
reasonably satisfied by the Contractor, assignee, or licensees; or
    (D) Such action is necessary because the agreement required by 
paragraph (i) of this clause has neither been obtained nor waived or 
because a licensee of the exclusive right to use or sell any subject 
invention in the United States is in breach of such agreement.
    (iii) The Contractor agrees to submit on request periodic reports no 
more frequently than annually on the utilization of a subject invention 
or on efforts at obtaining such utilization of a subject invention or on 
efforts at obtaining such utilization that are being made by the 
Contractor or its licensees or assignees. Such reports shall include 
information regarding the status of development, date of first 
commercial sale or use, gross royalties received by the Contractor, and 
such other data and information as the agency may reasonably specify. 
The Contractor also agrees to provide additional reports as may be 
requested by the agency in connection with any march-in proceedings 
undertaken by the agency in accordance with subdivision (ii) above. To 
the extent data or information supplied under this section is considered 
by the Contractor, its licensee, or assignee to be privileged and 
confidential and is so marked, the agency agrees that, to the extent 
permitted by law, it will not disclose such information to persons 
outside the Government.
    (iv) The Contractor agrees, when licensing a subject invention, to 
arrange to avoid royalty charges on acquisitions involving Government 
funds, including funds derived through a Military Assistance Program of 
the Government or otherwise derived through the Government, to refund 
any amounts received as royalty charges on a subject invention in 
acquisitions for, or on behalf of, the Government, and to provide for 
such refund in any instrument transferring rights in the invention to 
any party.
    (v) The Contractor agrees to provide for the Government's paid-up 
license pursuant to subdivision (i) above in any instrument transferring 
rights in a subject invention and to provide for the granting of 
licenses as required by subdivision (ii) above, and for the reporting of 
utilization information as required by subdivision (iii) above, whenever 
the instrument transfers principal or exclusive rights in a subject 
invention.
    (2) Nothing contained in this paragraph (c) shall be deemed to grant 
to the Government any rights with respect to any invention other than a 
subject invention.
    (d) Minimum rights to the Contractor. (1) The Contractor is hereby 
granted a revocable nonexclusive, royalty-free license in each patent 
application filed in any country on a subject invention and any 
resulting patent in which the Government obtains title, unless the 
Contractor fails to disclose the subject invention within the times 
specified in subparagraph (e)(2) below. The Contractor's license extends 
to its domestic subsidiaries and affiliates, if any, within the 
corporate structure of which the Contractor is a part and includes the 
right to grant sublicenses of the same scope to the extent the 
Contractor was legally obligated to do so at the time the contract was 
awarded. The license is transferable only with the approval of the 
funding Federal agency except when transferred to the successor of that 
part of the Contractor's business to which the invention pertains.
    (2) The Contractor's domestic license may be revoked or modified by 
the funding Federal agency to the extent necessary to achieve 
expeditious practical application of the subject invention pursuant to 
an application for an exclusive license submitted in accordance with 
applicable provisions in 37 CFR part 404 and agency licensing 
regulations. This license will not be revoked in that field of use or 
the geographical areas in which the Contractor has achieved practical 
application and continues to make the benefits of the invention 
reasonably accessible to the public. The license in any foreign country 
may be revoked or modified at the discretion of the funding Federal 
agency to the extent the Contractor, its licensees, or its domestic 
subsidiaries or affiliates have failed to achieve practical application 
in that foreign country.
    (3) Before revocation or modification of the license, the funding 
Federal agency will furnish the Contractor a written notice of its 
intention to revoke or modify the license, and the Contractor will be 
allowed 30 days (or such other time as may be authorized by the funding 
Federal agency for good cause shown by the Contractor) after the notice 
to show cause why the license should not be revoked or modified. The 
Contractor has the right to appeal, in accordance with applicable agency 
licensing regulations and 37 CFR part 404 concerning the licensing of 
Government-owned inventions, any decision concerning the revocation or 
modification of its license.

[[Page 178]]

    (4) When the Government has the right to receive title, and does not 
elect to secure a patent in a foreign country, the Contractor may elect 
to retain such rights in any foreign country in which the Government 
elects not to secure a patent, subject to the Government's rights in 
subparagraph (c)(1) of this clause.
    (e) Invention identification, disclosures, and reports. (1) The 
Contractor shall establish and maintain active and effective procedures 
to assure that subject inventions are promptly identified and disclosed 
to Contractor personnel responsible for patent matters within 6 months 
of conception and/or first actual reduction to practice, whichever 
occurs first in the performance of work under this contract. These 
procedures shall include the maintenance of laboratory notebooks or 
equivalent records and other records as are reasonably necessary to 
document the conception and/or the first actual reduction to practice of 
subject inventions, and records that show that the procedures for 
identifying and disclosing the inventions are followed. Upon request, 
the Contractor shall furnish the Contracting Officer a description of 
such procedures for evaluation and for determination as to their 
effectiveness.
    (2) The Contractor shall disclose each subject invention to the 
Contracting Officer within 2 months after the inventor discloses it in 
writing to Contractor personnel responsible for patent matters or, if 
earlier, within 6 months after the Contractor becomes aware that a 
subject invention has been made, but in any event before any on sale, 
public use, or publication of such invention known to the Contractor. 
The disclosure to the agency shall be in the form of a written report 
and shall identify the contract under which the invention was made and 
the inventor(s). It shall be sufficiently complete in technical detail 
to convey a clear understanding, to the extent known at the time of the 
disclosure, of the nature, purpose, operation, and physical, chemical, 
biological, or electrical characteristics of the invention. The 
disclosure shall also identify any publication, on sale, or public use 
of the invention and whether a manuscript describing the invention has 
been submitted for publication and, if so, whether it has been accepted 
for publication at the time of disclosure. In addition, after disclosure 
to the agency, the Contractor shall promptly notify the agency of the 
acceptance of any manuscript describing the invention for publication or 
of any on sale or public use planned by the Contractor.
    (3) The Contractor shall furnish the Contracting Officer the 
following:
    (i) Interim reports every 12 months (or such longer period as may be 
specified by the Contracting Officer) from the date of the contract, 
listing subject inventions during that period, and stating that all 
subject inventions have been disclosed (or that there are not such 
inventions) and that the procedures required by subparagraph (e)(1) 
above have been followed.
    (ii) A final report, within 3 months after completion of the 
contracted work, listing all subject inventions or stating that there 
were no such inventions, and listing all subcontracts at any tier 
containing a patent rights clause or stating that there were no such 
subcontracts.
    (4) The Contractor agrees to require, by written agreement, its 
employees, other than clerical and nontechnical employees, to disclose 
promptly in writing to personnel identified as responsible for the 
administration of patent matters and in a format suggested by the 
Contractor each subject invention made under contract in order that the 
Contractor can comply with the disclosure provisions of paragraph (c) 
above, and to execute all papers necessary to file patent applications 
on subject inventions and to establish the Government's rights in the 
subject inventions. This disclosure format should require, as a minimum, 
the information required by subparagraph (2) above.
    (5) The Contractor agrees subject to FAR 27.302(i) that the 
Government may duplicate and disclose subject invention disclosures and 
all other reports and papers furnished or required to be furnished 
pursuant to this clause.
    (f) Examination of records relating to inventions. (1) The 
Contracting Officer or any authorized representative shall, until 3 
years after final payment under this contract, have the right to examine 
any books (including laboratory notebooks), records, and documents of 
the Contractor relating to the conception or first actual reduction to 
practice of inventions in the same field of technology as the work under 
this contract to determine whether--
    (i) Any such inventions are subject inventions;
    (ii) The Contractor has established and maintains the procedures 
required by subparagraphs (e) (1) and (4) of this clause; and
    (iii) The Contractor and its inventors have complied with the 
procedures.
    (2) If the Contracting Officer learns of an unreported Contractor 
invention which the Contracting Officer believes may be a subject 
invention, the Contractor may be required to disclose the invention to 
the agency for a determination of ownership rights.
    (3) Any examination of records under this paragraph will be subject 
to appropriate conditions to protect the confidentiality of the 
information involved.
    (g) Withholding of payment (this paragraph does not apply to 
subcontracts). (1) Any time before final payment under this contract, 
the Contracting Officer may, in the Government's interest, withhold 
payment until a

[[Page 179]]

reserve not exceeding $50,000 or 5 percent of the amount of this 
contract, whichever is less, shall have been set aside if, in the 
Contracting Officer's opinion, the Contractor fails to--
    (i) Establish, maintain, and follow effective procedures for 
identifying and disclosing subject inventions pursuant to subparagraph 
(e)(1) above;
    (ii) Disclose any subject invention pursuant to subparagraph (e)(2) 
above;
    (iii) Deliver acceptable interim reports pursuant to subdivision 
(e)(3)(i) above; or
    (iv) Provide the information regarding subcontracts pursuant to 
subparagraph (h)(4) below.
    (2) Such reserve or balance shall be withheld until the Contracting 
Officer has determined that the Contractor has rectified whatever 
deficiencies exist and has delivered all reports, disclosures, and other 
information required by this clause.
    (3) Final payment under this contract shall not be made before the 
Contractor delivers to the Contracting Officer all disclosures of 
subject inventions required by subparagraph (e)(2) above, and acceptable 
final report pursuant to subdivision (e)(3)(ii) above, and all past due 
confirmatory instruments.
    (4) The Contracting Officer may decrease or increase the sums 
withheld up to the maximum authorized above. No amount shall be withheld 
under this paragraph while the amount specified by this paragraph is 
being withheld under other provisions of the contract. The withholding 
of any amount or the subsequent payment thereof shall not be construed 
as a waiver of any Government rights.
    (h) Subcontracts. (1) The Contractor shall include this clause 
(suitably modified to identify the parties) in all subcontracts, 
regardless of tier, for experimental, developmental, or research work. 
The subcontractor shall retain all rights provided for the Contractor in 
this clause, and the Contractor shall not, as part of the consideration 
for awarding the subcontract, obtain rights in the subcontractor's 
subject inventions.
    (2) In the event of a refusal by a prospective subcontractor to 
accept such a clause the Contractor--
    (i) Shall promptly submit a written notice to the Contracting 
Officer setting forth the subcontractor's reasons for such refusal and 
other pertinent information that may expedite disposition of the matter; 
and
    (ii) Shall not proceed with such subcontract without the written 
authorization of the Contracting Officer.
    (3) In the case of subcontracts at any tier, the agency, 
subcontractor, and Contractor agree that the mutual obligations of the 
parties created by this clause constitute a contract between the 
subcontractor and the Federal agency with respect to those matters 
covered by this clause.
    (4) The Contractor shall promptly notify the Contracting Officer in 
writing upon the award of any subcontract at any tier containing a 
patent rights clause by identifying the subcontractor, the applicable 
patent rights clause, the work to be performed under the subcontract, 
and the dates of award and estimated completion. Upon request of the 
Contracting Officer, the Contractor shall furnish a copy of such 
subcontract, and, no more frequently than annually, a listing of the 
subcontracts that have been awarded.
    (i) Preference for United States industry. Unless provided 
otherwise, no Contractor that receives title to any subject invention 
and no assignee of any such Contractor shall grant to any person the 
exclusive right to use or sell any subject invention in the United 
States unless such person agrees that any products embodying the subject 
invention will be manufactured substantially in the United States. 
However, in individual cases, the requirement may be waived by the 
Government upon a showing by the Contractor or assignee that reasonable 
but unsuccessful efforts have been made to grant licenses on similar 
terms to potential licensees that would be likely to manufacture 
substantially in the United States or that under the circumstances 
domestic manufacture is not commercially feasible.

                             (End of clause)

    Alternate I (JUN 1989). As prescribed in 27.303(c)(3), add the 
following sentence at the end of subdivision (c)(1)(i) of the basic 
clause:

    The license will include the right of the Government to sublicense 
foreign governments, their nationals, and international organizations 
pursuant to the following treaties or international agreements: ______ *
    [*Contracting Officer complete with the names of applicable existing 
treaties or international agreements. The above language is not intended 
to apply to treaties or agreements that are in effect on the date of the 
award but are not listed.]

    Alternate II (JUN 1989). As prescribed in 27.303(c)(3), add the 
following sentence at the end of subdivision (c)(1)(i) of the basic 
clause:

    The agency reserves the right to unilaterally amend this contract to 
identify specific treaties or international agreements entered into or 
to be entered into by the Government after the effective date of this 
contract, and effectuate those license or other rights which are 
necessary for the Government to meet its obligations to foreign 
governments, their nationals, and international organizations under such 
treaties or international

[[Page 180]]

agreements with respect to subject inventions made after the date of the 
amendment.

[49 FR 12994, Mar. 30, 1984, as amended at 54 FR 25073, June 12, 1989; 
62 FR 239, Jan. 2, 1997]



Sec. 52.227-14  Rights in Data--General.

    As prescribed in 27.409(a), insert the following clause with any 
appropriate alternates:

                   Rights in Data--General (JUN 1987)

    (a) Definitions.
    Computer software, as used in this clause, means computer programs, 
computer data bases, and documentation thereof.
    Data, as used in this clause, means recorded information, regardless 
of form or the media on which it may be recorded. The term includes 
technical data and computer software. The term does not include 
information incidental to contract administration, such as financial, 
administrative, cost or pricing, or management information.
    Form, fit, and function data, as used in this clause, means data 
relating to items, components, or processes that are sufficient to 
enable physical and functional interchangeability, as well as data 
identifying source, size, configuration, mating, and attachment 
characteristics, functional characteristics, and performance 
requirements; except that for computer software it means data 
identifying source, functional characteristics, and performance 
requirements but specifically excludes the source code, algorithm, 
process, formulae, and flow charts of the software.
    Limited rights, as used in this clause, means the rights of the 
Government in limited rights data as set forth in the Limited Rights 
Notice of subparagraph (g)(2) if included in this clause.
    Limited rights data, as used in this clause, means data (other than 
computer software) that embody trade secrets or are commercial or 
financial and confidential or privileged, to the extent that such data 
pertain to items, components, or processes developed at private expense, 
including minor modifications thereof.
    Restricted computer software, as used in this clause, means computer 
software developed at private expense and that is a trade secret; is 
commercial or financial and is confidential or privileged; or is 
published copyrighted computer software; including minor modifications 
of such computer software.
    Restricted rights, as used in this clause, means the rights of the 
Government in restricted computer software, as set forth in a Restricted 
Rights Notice of subparagraph (g)(3) if included in this clause, or as 
otherwise may be provided in a collateral agreement incorporated in and 
made part of this contract, including minor modifications of such 
computer software.
    Technical data, as used in this clause, means data (other than 
computer software) which are of a scientific or technical nature.
    Unlimited rights, as used in this clause, means the right of the 
Government to use, disclose, reproduce, prepare derivative works, 
distribute copies to the public, and perform publicly and display 
publicly, in any manner and for any purpose, and to have or permit 
others to do so.
    (b) Allocations of rights. (1) Except as provided in paragraph (c) 
of this clause regarding copyright, the Government shall have unlimited 
rights in--
    (i) Data first produced in the performance of this contract;
    (ii) Form, fit, and function data delivered under this contract;
    (iii) Data delivered under this contract (except for restricted 
computer software) that constitute manuals or instructional and training 
material for installation, operation, or routine maintenance and repair 
of items, components, or processes delivered or furnished for use under 
this contract; and
    (iv) All other data delivered under this contract unless provided 
otherwise for limited rights data or restricted computer software in 
accordance with paragraph (g) of this clause.
    (2) The Contractor shall have the right to--
    (i) Use, release to others, reproduce, distribute, or publish any 
data first produced or specifically used by the Contractor in the 
performance of this contract, unless provided otherwise in paragraph (d) 
of this clause;
    (ii) Protect from unauthorized disclosure and use those data which 
are limited rights data or restricted computer software to the extent 
provided in paragraph (g) of this clause;
    (iii) Substantiate use of, add or correct limited rights, restricted 
rights, or copyright notices and to take other appropriate action, in 
accordance with paragraphs (e) and (f) of this clause; and
    (iv) Establish claim to copyright subsisting in data first produced 
in the performance of this contract to the extent provided in 
subparagraph (c)(1) of this clause.
    (c) Copyright. (1) Data first produced in the performance of this 
contract. Unless provided otherwise in paragraph (d) of this clause, the 
Contractor may establish, without prior approval of the Contracting 
Officer, claim to copyright subsisting in scientific and technical 
articles based on or containing data first produced in the performance 
of this contract and published in academic, technical or professional 
journals, symposia proceedings or similar works. The prior, express 
written permission of the Contracting Officer is required to establish 
claim to copyright subsisting in all other data first produced in the 
performance of this contract. When claim to copyright is made, the 
Contractor shall affix the applicable copyright

[[Page 181]]

notices of 17 U.S.C. 401 or 402 and acknowledgment of Government 
sponsorship (including contract number) to the data when such data are 
delivered to the Government, as well as when the data are published or 
deposited for registration as a published work in the U.S. Copyright 
Office. For data other than computer software the Contractor grants to 
the Government, and others acting on its behalf, a paid-up, 
nonexclusive, irrevocable worldwide license in such copyrighted data to 
reproduce, prepare derivative works, distribute copies to the public, 
and perform publicly and display publicly, by or on behalf of the 
Government. For computer software, the Contractor grants to the 
Government and others acting in its behalf, a paid-up nonexclusive, 
irrevocable worldwide license in such copyrighted computer software to 
reproduce, prepare derivative works, and perform publicly and display 
publicly by or on behalf of the Government.
    (2) Data not first produced in the performance of this contract. The 
Contractor shall not, without prior written permission of the 
Contracting Officer, incorporate in data delivered under this contract 
any data not first produced in the performance of this contract and 
which contains the copyright notice of 17 U.S.C. 401 or 402, unless the 
Contractor identifies such data and grants to the Government, or 
acquires on its behalf, a license of the same scope as set forth in 
subparagraph (c)(1) of this clause; provided, however, that if such data 
are computer software the Government shall acquire a copyright license 
as set forth in subparagraph (g)(3) of this clause if included in this 
contract or as otherwise may be provided in a collateral agreement 
incorporated in or made part of this contract.
    (3) Removal of copyright notices. The Government agrees not to 
remove any copyright notices placed on data pursuant to this paragraph 
(c), and to include such notices on all reproductions of the data.
    (d) Release, publication and use of data. (1) The Contractor shall 
have the right to use, release to others, reproduce, distribute, or 
publish any data first produced or specifically used by the Contractor 
in the performance of this contract, except to the extent such data may 
be subject to the Federal export control or national security laws or 
regulations, or unless otherwise provided in this paragraph of this 
clause or expressly set forth in this contract.
    (2) The Contractor agrees that to the extent it receives or is given 
access to data necessary for the performance of this contract which 
contain restrictive markings, the Contractor shall treat the data in 
accordance with such markings unless otherwise specifically authorized 
in writing by the Contracting Officer.
    (e) Unauthorized marking of data. (1) Notwithstanding any other 
provisions of this contract concerning inspection or acceptance, if any 
data delivered under this contract are marked with the notices specified 
in subparagraph (g)(2) or (g)(3) of this clause and use of such is not 
authorized by this clause, or if such data bears any other restrictive 
or limiting markings not authorized by this contract, the Contracting 
Officer may at any time either return the data to the Contractor, or 
cancel or ignore the markings. However, the following procedures shall 
apply prior to canceling or ignoring the markings.
    (i) The Contracting Officer shall make written inquiry to the 
Contractor affording the Contractor 30 days from receipt of the inquiry 
to provide written justification to substantiate the propriety of the 
markings;
    (ii) If the Contractor fails to respond or fails to provide written 
justification to substantiate the propriety of the markings within the 
30-day period (or a longer time not exceeding 90 days approved in 
writing by the Contracting Officer for good cause shown), the Government 
shall have the right to cancel or ignore the markings at any time after 
said period and the data will no longer be made subject to any 
disclosure prohibitions.
    (iii) If the Contractor provides written justification to 
substantiate the propriety of the markings within the period set in 
subdivision (e)(1)(i) of this clause, the Contracting Officer shall 
consider such written justification and determine whether or not the 
markings are to be cancelled or ignored. If the Contracting Officer 
determines that the markings are authorized, the Contractor shall be so 
notified in writing. If the Contracting Officer determines, with 
concurrence of the head of the contracting activity, that the markings 
are not authorized, the Contracting Officer shall furnish the Contractor 
a written determination, which determination shall become the final 
agency decision regarding the appropriateness of the markings unless the 
Contractor files suit in a court of competent jurisdiction within 90 
days of receipt of the Contracting Officer's decision. The Government 
shall continue to abide by the markings under this subdivision 
(e)(1)(iii) until final resolution of the matter either by the 
Contracting Officer's determination becoming final (in which instance 
the Government shall thereafter have the right to cancel or ignore the 
markings at any time and the data will no longer be made subject to any 
disclosure prohibitions), or by final disposition of the matter by court 
decision if suit is filed.
    (2) The time limits in the procedures set forth in subparagraph 
(e)(1) of this clause may be modified in accordance with agency 
regulations implementing the Freedom of Information Act (5 U.S.C. 552) 
if necessary to respond to a request thereunder.

[[Page 182]]

    (3) This paragraph (e) does not apply if this contract is for a 
major system or for support of a major system by a civilian agency other 
than NASA and the U.S. Coast Guard agency subject to the provisions of 
Title III of the Federal Property and Administrative Services Act of 
1949.
    (4) Except to the extent the Government's action occurs as the 
result of final disposition of the matter by a court of competent 
jurisdiction, the Contractor is not precluded by this paragraph (e) from 
bringing a claim under the Contract Disputes Act, including pursuant to 
the Disputes clause of this contract, as applicable, that may arise as 
the result of the Government removing or ignoring authorized markings on 
data delivered under this contract.
    (f) Omitted or incorrect markings.
    (1) Data delivered to the Government without either the limited 
rights or restricted rights notice as authorized by paragraph (g) of 
this clause, or the copyright notice required by paragraph (c) of this 
clause, shall be deemed to have been furnished with unlimited rights, 
and the Government assumes no liability for the disclosure, use, or 
reproduction of such data. However, to the extent the data has not been 
disclosed without restriction outside the Government, the Contractor may 
request, within 6 months (or a longer time approved by the Contracting 
Officer for good cause shown) after delivery of such data, permission to 
have notices placed on qualifying data at the Contractor's expense, and 
the Contracting Officer may agree to do so if the Contractor--
    (i) Identifies the data to which the omitted notice is to be 
applied;
    (ii) Demonstrates that the omission of the notice was inadvertent;
    (iii) Establishes that the use of the proposed notice is authorized; 
and
    (iv) Acknowledges that the Government has no liability with respect 
to the disclosure, use, or reproduction of any such data made prior to 
the addition of the notice or resulting from the omission of the notice.
    (2) The Contracting Officer may also (i) permit correction at the 
Contractor's expense of incorrect notices if the Contractor identifies 
the data on which correction of the notice is to be made, and 
demonstrates that the correct notice is authorized, or (ii) correct any 
incorrect notices.
    (g) Protection of limited rights data and restricted computer 
software.
    (1) When data other than that listed in subdivisions (b)(1) (i), 
(ii), and (iii) of this clause are specified to be delivered under this 
contract and qualify as either limited rights data or restricted 
computer software, if the Contractor desires to continue protection of 
such data, the Contractor shall withhold such data and not furnish them 
to the Government under this contract. As a condition to this 
withholding, the Contractor shall identify the data being withheld and 
furnish form, fit, and function data in lieu thereof. Limited rights 
data that are formatted as a computer data base for delivery to the 
Government are to be treated as limited rights data and not restricted 
computer software.
    (2)-(3) [Reserved]
    (h) Subcontracting. The Contractor has the responsibility to obtain 
from its subcontractors all data and rights therein necessary to fulfill 
the Contractor's obligations to the Government under this contract. If a 
subcontractor refuses to accept terms affording the Government such 
rights, the Contractor shall promptly bring such refusal to the 
attention of the Contracting Officer and not proceed with subcontract 
award without further authorization.
    (i) Relationship to patents. Nothing contained in this clause shall 
imply a license to the Government under any patent or be construed as 
affecting the scope of any license or other right otherwise granted to 
the Government.

    Alternate I (JUN 1987). As prescribed in 27.409(b), substitute the 
following definition for Limited Rights Data in paragraph (a) of the 
clause:

    Limited rights data, as used in this clause, means data (other than 
computer software) developed at private expense that embody trade 
secrets or are commercial or financial and confidential or privileged.

    Alternate II (JUN 1987). As prescribed in 27.409(c), insert the 
following subparagraph (g)(2) in the clause:

    (g)(2) Notwithstanding subparagraph (g)(1) of this clause, the 
contract may identify and specify the delivery of limited rights data, 
or the Contracting Officer may require by written request the delivery 
of limited rights data that has been withheld or would otherwise be 
withholdable. If delivery of such data is so required, the Contractor 
may affix the following Limited Rights Notice to the data and the 
Government will thereafter treat the data, subject to the provisions of 
paragraphs (e) and (f) of this clause, in accordance with such Notice:

                    Limited Rights Notice (JUN 1987)

    (a) These data are submitted with limited rights under Government 
Contract No. ______ (and subcontract______, if appropriate). These data 
may be reproduced and used by the Government with the express limitation 
that they will not, without written permission of the Contractor, be 
used for purposes of manufacture nor disclosed outside the Government; 
except that the Government may disclose these data outside the 
Government for the following purposes, if any, provided that

[[Page 183]]

the Government makes such disclosure subject to prohibition against 
further use and disclosure: [Agencies may list additional purposes as 
set forth in 27.404(d)(1) or if none, so state]
    (b) This Notice shall be marked on any reproduction of these data, 
in whole or in part.

                             (End of notice)

    Alternate III (JUN 1987). As prescribed in 27.409(d), insert the 
following subparagraph (g)(3) in the clause:

    (g)(3)(i) Notwithstanding subparagraph (g)(1) of this clause, the 
contract may identify and specify the delivery of restricted computer 
software, or the Contracting Officer may require by written request the 
delivery of restricted computer software that has been withheld or would 
otherwise be withholdable. If delivery of such computer software is so 
required, the Contractor may affix the following Restricted Rights 
Notice to the computer software and the Government will thereafter treat 
the computer software, subject to paragraphs (e) and (f) of this clause, 
in accordance with the Notice:

                   Restricted Rights Notice (JUN 1987)

    (a) This computer software is submitted with restricted rights under 
Government Contract No.______ (and subcontract______, if appropriate). 
It may not be used, reproduced, or disclosed by the Government except as 
provided in paragraph (b) of this Notice or as otherwise expressly 
stated in the contract.
    (b) This computer software may be--
    (1) Used or copied for use in or with the computer or computers for 
which it was acquired, including use at any Government installation to 
which such computer or computers may be transferred;
    (2) Used or copied for use in a backup computer if any computer for 
which it was acquired is inoperative;
    (3) Reproduced for safekeeping (archives) or backup purposes;
    (4) Modified, adapted, or combined with other computer software, 
provided that the modified, combined, or adapted portions of the 
derivative software incorporating restricted computer software are made 
subject to the same restricted rights;
    (5) Disclosed to and reproduced for use by support service 
Contractors in accordance with subparagraphs (b) (1) through (4) of this 
clause, provided the Government makes such disclosure or reproduction 
subject to these restricted rights; and
    (6) Used or copied for use in or transferred to a replacement 
computer.
    (c) Notwithstanding the foregoing, if this computer software is 
published copyrighted computer software, it is licensed to the 
Government, without disclosure prohibitions, with the minimum rights set 
forth in paragraph (b) of this clause.
    (d) Any other rights or limitations regarding the use, duplication, 
or disclosure of this computer software are to be expressly stated in, 
or incorporated in, the contract.
    (e) This Notice shall be marked on any reproduction of this computer 
software, in whole or in part.

                             (End of notice)

    (ii) Where it is impractical to include the Restricted Rights Notice 
on restricted computer software, the following short-form Notice may be 
used in lieu thereof:

            Restricted Rights Notice (Short Form) (JUN 1987)

    Use, reproduction, or disclosure is subject to restrictions set 
forth in Contract No.______ (and subcontract ______, if appropriate) 
with ______ (name of Contractor and subcontractor).

                             (End of notice)

    (iii) If restricted computer software is delivered with the 
copyright notice of 17 U.S.C. 401, it will be presumed to be published 
copyrighted computer software licensed to the Government without 
disclosure prohibitions, with the minimum rights set forth in paragraph 
(b) of this clause, unless the Contractor includes the following 
statement with such copyright notice: Unpublished--rights reserved under 
the Copyright Laws of the United States.

    Alternate IV (JUN 1987). As prescribed in 27.409(e), substitute the 
following subparagraph (c)(1) in the clause:

    (c) Copyright. (1) Data First Produced in the Performance of the 
Contract. Except as otherwise specifically provided in this contract, 
the Contractor may establish claim to copyright subsisting in any data 
first produced in the performance of this contract. When claim to 
copyright is made, the Contractor shall affix the applicable copyright 
notice of 17 U.S.C. 401 or 402 and acknowledgment of Government 
sponsorship (including contract number) to the data when such data are 
delivered to the Government, as well as when the data are published or 
deposited for registration as a published work in the U.S. Copyright 
Office. For data other than computer software, the Contractor grants to 
the Government, and others acting on its behalf, a paid-up, 
nonexclusive, irrevocable, worldwide license for all such data to 
reproduce, prepare derivative works, distribute copies

[[Page 184]]

to the public, and perform publicly and display publicly, by or on 
behalf of the Government. For computer software, the Contractor grants 
to the Government and others acting on its behalf, a paid up, 
nonexclusive, irrevocable worldwide license for all such computer 
software to reproduce, prepare derivative works, and perform publicly 
and display publicly, by or on behalf of the Government.

    Alternate V (JUN 1987). As prescribed in 27.409(f), add the 
following paragraph (j) to the clause:

    (j) The Contractor agrees, except as may be otherwise specified in 
this contract for specific data items listed as not subject to this 
paragraph, that the Contracting Officer or an authorized representative 
may, up to three years after acceptance of all items to be delivered 
under this contract, inspect at the Contractor's facility any data 
withheld pursuant to paragraph (g)(1) of this clause, for purposes of 
verifying the Contractor's assertion pertaining to the limited rights or 
restricted rights status of the data or for evaluating work performance. 
Where the Contractor whose data are to be inspected demonstrates to the 
Contracting Officer that there would be a possible conflict of interest 
if the inspection were made by a particular representative, the 
Contracting Officer shall designate an alternate inspector.

[52 FR 18150, May 13, 1987]



Sec. 52.227-15  Representation of Limited Rights Data and Restricted Computer Software.

    As prescribed in 27.409(g), insert the following provision in 
solicitations that include the clause at 52.227-14, Rights in Data--
General:

 Representation of Limited Rights Data and Restricted Computer Software 
                               (JUN 1987)

    (a) This solicitation sets forth the work to be performed if a 
contract award results, and the Government's known delivery requirements 
for data (as defined in FAR 27.401). Any resulting contract may also 
provide the Government the option to order additional data under the 
Additional Data Requirements clause at 52.227-16 of the FAR, if included 
in the contract. Any data delivered under the resulting contract will be 
subject to the Rights in Data--General clause at 52.227-14 that is to be 
included in this contract. Under the latter clause, a Contractor may 
withhold from delivery data that qualify as limited rights data or 
restricted computer software, and deliver form, fit, and function data 
in lieu thereof. The latter clause also may be used with its Alternates 
II and/or III to obtain delivery of limited rights data or restricted 
computer software, marked with limited rights or restricted rights 
notices, as appropriate. In addition, use of Alternate V with this 
latter clause provides the Government the right to inspect such data at 
the Contractor's facility.
    (b) As an aid in determining the Government's need to include any of 
the aforementioned Alternates in the clause at 52.227-14, Rights in 
Data--General, the offeror's response to this solicitation shall, to the 
extent feasible, complete the representation in paragraph (b) of this 
provision to either state that none of the data qualify as limited 
rights data or restricted computer software, or identify which of the 
data qualifies as limited rights data or restricted computer software. 
Any identification of limited rights data or restricted computer 
software in the offeror's response is not determinative of the status of 
such data should a contract be awarded to the offeror.

                  Representation Concerning Data Rights

    Offeror has reviewed the requirements for the delivery of data or 
software and states (offeror check appropriate block)--
    {time}  None of the data proposed for fulfilling such requirements 
qualifies as limited rights data or restricted computer software.
    {time}  Data proposed for fulfilling such requirements qualify as 
limited rights data or restricted computer software and are identified 
as follows:
_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________

    Note: Limited rights data and Restricted computer software are 
defined in the contract clause entitled Rights In Data--General.

                           (End of provision)

[52 FR 18153, May 13, 1987, as amended at 55 FR 25532, June 21, 1990]



Sec. 52.227-16  Additional Data Requirements.

    As prescribed in 27.409(h), insert the following clause:

                 Additional Data Requirements (JUN 1987)

    (a) In addition to the data (as defined in the clause at 52.227-14, 
Rights in Data--General clause or other equivalent included in this 
contract) specified elsewhere in this contract to be delivered, the 
Contracting Officer may, at any time during contract performance or 
within a period of 3 years after acceptance of all items to be delivered 
under this contract, order any data first produced or specifically used 
in the performance of this contract.
    (b) The Rights in Data--General clause or other equivalent included 
in this contract is

[[Page 185]]

applicable to all data ordered under this Additional Data Requirements 
clause. Nothing contained in this clause shall require the Contractor to 
deliver any data the withholding of which is authorized by the Rights in 
Data--General or other equivalent clause of this contract, or data which 
are specifically identified in this contract as not subject to this 
clause.
    (c) When data are to be delivered under this clause, the Contractor 
will be compensated for converting the data into the prescribed form, 
for reproduction, and for delivery.
    (d) The Contracting Officer may release the Contractor from the 
requirements of this clause for specifically identified data items at 
any time during the 3-year period set forth in paragraph (a) of this 
clause.

                             (End of clause)

[52 FR 18153, May 13, 1987, as amended 62 FR 40238, July 25, 1997]



Sec. 52.227-17  Rights in Data--Special Works.

    As prescribed in 27.409(i), insert the following clause:

                Rights in Data--Special Works (JUN 1987)

    (a) Definitions.
    Data, as used in this clause, means recorded information regardless 
of form or the medium on which it may be recorded. The term includes 
technical data and computer software. The term does not include 
information incidental to contract administration, such as financial, 
administrative, cost or pricing or management information.
    Unlimited rights, as used in this clause, means the right of the 
Government to use, disclose, reproduce, prepare derivative works, 
distribute copies to the public, and perform publicly and display 
publicly, in any manner and for any purpose whatsoever, and to have or 
permit others to do so.
    (b) Allocation of Rights. (1) The Government shall have--
    (i) Unlimited rights in all data delivered under this contract, and 
in all data first produced in the performance of this contract, except 
as provided in paragraph (c) of this clause for copyright.
    (ii) The right to limit exercise of claim to copyright in data first 
produced in the performance of this contract, and to obtain assignment 
of copyright in such data, in accordance with subparagraph (c)(1) of 
this clause.
    (iii) The right to limit the release and use of certain data in 
accordance with paragraph (d) of this clause.
    (2) The Contractor shall have, to the extent permission is granted 
in accordance with subparagraph (c)(1) of this clause, the right to 
establish claim to copyright subsisting in data first produced in the 
performance of this contract.
    (c) Copyright. (1) Data first produced in the performance of this 
contract.
    (i) The Contractor agrees not to assert, establish, or authorize 
others to assert or establish, any claim to copyright subsisting in any 
data first produced in the performance of this contract without prior 
written permission of the Contracting Officer. When claim to copyright 
is made, the Contractor shall affix the appropriate copyright notice of 
17 U.S.C. 401 or 402 and acknowledgment of Government sponsorship 
(including contract number) to such data when delivered to the 
Government, as well as when the data are published or deposited for 
registration as a published work in the U.S. Copyright Office. The 
Contractor grants to the Government, and others acting on its behalf, a 
paid-up nonexclusive, irrevocable, worldwide license for all such data 
to reproduce, prepare derivative works, distribute copies to the public, 
and perform publicly and display publicly, by or on behalf of the 
Government.
    (ii) If the Government desires to obtain copyright in data first 
produced in the performance of this contract and permission has not been 
granted as set forth in subdivision (c)(1)(i) of this clause, the 
Contracting Officer may direct the Contractor to establish, or authorize 
the establishment of, claim to copyright in such data and to assign, or 
obtain the assignment of, such copyright to the Government or its 
designated assignee.
    (2) Data not first produced in the performance of this contract. The 
Contractor shall not, without prior written permission of the 
Contracting Officer, incorporate in data delivered under this contract 
any data not first produced in the performance of this contract and 
which contain the copyright notice of 17 U.S.C. 401 or 402, unless the 
Contractor identifies such data and grants to the Government, or 
acquires on its behalf, a license of the same scope as set forth in 
subparagraph (c)(1) of this clause.
    (d) Release and use restrictions. Except as otherwise specifically 
provided for in this contract, the Contractor shall not use for purposes 
other than the performance of this contract, nor shall the Contractor 
release, reproduce, distribute, or publish any data first produced in 
the performance of this contract, nor authorize others to do so, without 
written permission of the Contracting Officer.
    (e) Indemnity. The Contractor shall indemnify the Government and its 
officers, agents, and employees acting for the Government against any 
liability, including costs and expenses, incurred as the result of the 
violation of trade secrets, copyrights, or right of privacy or 
publicity, arising out of the creation, delivery, publication, or use of 
any

[[Page 186]]

data furnished under this contract; or any libelous or other unlawful 
matter contained in such data. The provisions of this paragraph do not 
apply unless the Government provides notice to the Contractor as soon as 
practicable of any claim or suit, affords the Contractor an opportunity 
under applicable laws, rules, or regulations to participate in the 
defense thereof, and obtains the Contractor's consent to the settlement 
of any suit or claim other than as required by final decree of a court 
of competent jurisdiction; nor do these provisions apply to material 
furnished to the Contractor by the Government and incorporated in data 
to which this clause applies.

                             (End of clause)

[52 FR 18153, May 13, 1987, as amended at 54 FR 34758, Aug. 21, 1989; 55 
FR 25532, June 21, 1990]



Sec. 52.227-18  Rights in Data--Existing Works.

    As prescribed in 27.409(j), insert the following clause:

                Rights in Data--Existing Works (JUN 1987)

    (a) Except as otherwise provided in this contract, the Contractor 
grants to the Government, and others acting on its behalf, a paid-up 
nonexclusive, irrevocable, worldwide license to reproduce, prepare 
derivative works, and perform publicly and display publicly, by or on 
behalf of the Government, for all the material or subject matter called 
for under this contract, or for which this clause is specifically made 
applicable.
    (b) The Contractor shall indemnify the Government and its officers, 
agents, and employees acting for the Government against any liability, 
including costs and expenses, incurred as the result of (1) the 
violation of trade secrets, copyrights, or right of privacy or 
publicity, arising out of the creation, delivery, publication or use of 
any data furnished under this contract; or (2) any libelous or other 
unlawful matter contained in such data. The provisions of this paragraph 
do not apply unless the Government provides notice to the Contractor as 
soon as practicable of any claim or suit, affords the Contractor an 
opportunity under applicable laws, rules, or regulations to participate 
in the defense thereof, and obtains the Contractor's consent to the 
settlement of any suit or claim other than as required by final decree 
of a court of competent jurisdiction; and do not apply to material 
furnished to the Contractor by the Government and incorporated in data 
to which this clause applies.

                             (End of clause)

[52 FR 18154, May 13, 1987]



Sec. 52.227-19  Commercial Computer Software--Restricted Rights.

    As prescribed in 27.409(k), insert the following clause:

       Commercial Computer Software--Restricted Rights (JUN 1987)

    (a) As used in this clause, restricted computer software means any 
computer program, computer data base, or documentation thereof, that has 
been developed at private expense and either is a trade secret, is 
commercial or financial and confidential or--privileged, or is published 
and copyrighted.
    (b) Notwithstanding any provisions to the contrary contained in any 
Contractor's standard commercial license or lease agreement pertaining 
to any restricted computer software delivered under this purchase order/
contract, and irrespective of whether any such agreement has been 
proposed prior to or after issuance of this purchase order/contract or 
of the fact that such agreement may be affixed to or accompany the 
restricted computer software upon delivery, vendor agrees that the 
Government shall have the rights that are set forth in paragraph (c) of 
this clause to use, duplicate or disclose any restricted computer 
software delivered under this purchase order/contract. The terms and 
provisions of this contract, including any commercial lease or license 
agreement, shall be subject to paragraph (c) of this clause and shall 
comply with Federal laws and the Federal Acquisition Regulation.
    (c)(1) The restricted computer software delivered under this 
contract may not be used, reproduced or disclosed by the Government 
except as provided in subparagraph (c)(2) of this clause or as expressly 
stated otherwise in this contract.
    (2) The restricted computer software may be--
    (i) Used or copied for use in or with the computer or computers for 
which it was acquired, including use at any Government installation to 
which such computer or computers may be transferred;
    (ii) Used or copied for use in or with backup computer if any 
computer for which it was acquired is inoperative;
    (iii) Reproduced for safekeeping (archives) or backup purposes;
    (iv) Modified, adapted, or combined with other computer software, 
provided that the modified, combined, or adapted portions of the 
derivative software incorporating any of the delivered, restricted 
computer software shall be subject to same restrictions set forth in 
this purchase order/contract;

[[Page 187]]

    (v) Disclosed to and reproduced for use by support service 
Contractors or their subcontractors, subject to the same restrictions 
set forth in this purchase order/contract; and
    (vi) Used or copied for use in or transferred to a replacement 
computer.
    (3) If the restricted computer software delivered under this 
purchase order/contract is published and copyrighted, it is licensed to 
the Government, without disclosure prohibitions, with the rights set 
forth in subparagraph (c)(2) of this clause unless expressly stated 
otherwise in this purchase order/contract.
    (4) To the extent feasible the Contractor shall affix a Notice 
substantially as follows to any restricted computer software delivered 
under this purchase order/contract; or, if the vendor does not, the 
Government has the right to do so: Notice-- Notwithstanding any other 
lease or license agreement that may pertain to, or accompany the 
delivery of, this computer software, the rights of the Government 
regarding its use, reproduction and disclosure are as set forth in 
Government Contract (or Purchase Order) No. ______.)
    (d) If any restricted computer software is delivered under this 
contract with the copyright notice of 17 U.S.C. 401, it will be presumed 
to be published and copyrighted and licensed to the Government in 
accordance with subparagraph (c)(3) of this clause, unless a statement 
substantially as follows accompanies such copyright notice: 
Unpublished--rights reserved under the copyright laws of the United 
States.

                             (End of clause)

[52 FR 18154, May 13, 1987]



Sec. 52.227-20  Rights in Data--SBIR Program.

    As prescribed in 27.409(l), insert the following clause:

                 Rights in Data--SBIR Program (MAR 1994)

    (a) Definitions.
    Computer software, as used in this clause, means computer programs, 
computer data bases, and documentation thereof.
    Data, as used in this clause, means recorded information, regardless 
of form or the media on which it may be recorded. The term includes 
technical data and computer software. The term does not include 
information incidental to contract administration, such as financial, 
administrative, cost or pricing or management information.
    Form, fit, and function data, as used in this clause, means data 
relating to items, components, or processes that are sufficient to 
enable physical and functional interchangeability as well as data 
identifying source, size, configuration, mating and attachment 
characteristics, functional characteristics, and performance 
requirements except that for computer software it means data identifying 
source, functional characteristics, and performance requirements but 
specifically excludes the source code, algorithm, process, formulae, and 
flow charts of the software.
    Limited rights data, as used in this clause, means data (other than 
computer software) developed at private expense that embody trade 
secrets or are commercial or financial and confidential or privileged.
    Restricted computer software, as used in this clause, means computer 
software developed at private expense and that is a trade secret; is 
commercial or financial and confidential or privileged; or is published 
copyrighted computer software; including modifications of such computer 
software.
    SBIR data, as used in this clause, means data first produced by a 
Contractor that is a small business firm in performance of a small 
business innovation research contract issued under the authority of 15 
U.S.C. 638 (Pub. L. 97-219, Small Business Innovation Development Act of 
1982), which data are not generally known, and which data without 
obligation as to its confidentiality have not been made available to 
others by the Contractor or are not already available to the Government.
    SBIR rights, as used in this clause, mean the rights in SBIR data 
set forth in the SBIR Rights Notice of paragraph (d) of this clause.
    Technical data, as used in this clause, means that data which are of 
a scientific or technical nature.
    Unlimited rights, as used in this clause, means the right of the 
Government to use, disclose, reproduce, prepare derivative works, 
distribute copies to the public, and perform publicly and display 
publicly, in any manner and for any purpose whatsoever, and to have or 
permit others to do so.
    (b) Allocation of rights. (1) Except as provided in paragraph (c) of 
this clause regarding copyright, the Government shall have unlimited 
rights in--
    (i) Data specifically identified in this contract as data to be 
delivered without restriction;
    (ii) Form, fit, and function data delivered under this contract;
    (iii) Data delivered under this contract (except for restricted 
computer software) that constitute manuals or instructional and training 
material for installation, operation, or routine maintenance and repair 
of items, components, or processes delivered or furnished for use under 
this contract; and
    (iv) All other data delivered under this contract unless provided 
otherwise for SBIR data in accordance with paragraph (d) of this clause 
or for limited rights data or restricted computer software in accordance 
with paragraph (f) of this clause.
    (2) The Contractor shall have the right to--

[[Page 188]]

    (i) Protect SBIR rights in SBIR data delivered under this contract 
in the manner and to the extent provided in paragraph (d) of this 
clause;
    (ii) Withhold from delivery those data which are limited rights data 
or restricted computer software to the extent provided in paragraph (g) 
of this clause;
    (iii) Substantiate use of, add, or correct SBIR rights or copyrights 
notices and to take other appropriate action, in accordance with 
paragraph (e) of this clause; and
    (iv) Establish claim to copyright subsisting in data first produced 
in the performance of this contract to the extent provided in 
subparagraph (c)(1) of this clause.
    (c) Copyright. (1) Data first produced in the performance of this 
contract. Except as otherwise specifically provided in this contract, 
the Contractor may establish claim to copyright subsisting in any data 
first produced in the performance of this contract. If claim to 
copyright is made, the Contractor shall affix the applicable copyright 
notice of 17 U.S.C. 401 or 402 and acknowledgment of Government 
sponsorship (including contract number) to the data when such data are 
delivered to the Government, as well as when the data are published or 
deposited for registration as a published work in the U.S. Copyright 
Office. For data other than computer software the Contractor grants to 
the Government, and others acting on its behalf, a paid-up nonexclusive, 
irrevocable, worldwide license to reproduce, prepare derivative works, 
distribute copies to the public, and perform publicly and display 
publicly, by or on behalf of the Government, for all such data. For 
computer software, the Contractor grants to the Government, and others 
acting on its behalf, a paid-up, nonexclusive, irrevocable worldwide 
license for all such computer software to reproduce, prepare derivative 
works, and perform publicly and display publicly, by or on behalf of the 
Government.
    (2) Data not first produced in the performance of this contract. The 
Contractor shall not, without prior written permission of the 
Contracting Officer, incorporate in data delivered under this contract 
any data that are not first produced in the performance of this contract 
and that contain the copyright notice of 17 U.S.C. 401 or 402, unless 
the Contractor identifies such data and grants to the Government, or 
acquires on its behalf, a license of the same scope as set forth in 
subparagraph (c)(1) of this clause.
    (3) Removal of copyright notices. The Government agrees not to 
remove any copyright notices placed on data pursuant to this paragraph 
(c), and to include such notices on all reproductions of the data.
    (d) Rights to SBIR data. (1) The Contractor is authorized to affix 
the following SBIR Rights Notice to SBIR data delivered under this 
contract and the Government will thereafter treat the data, subject to 
the provisions of paragraphs (e) and (f) of this clause, in accordance 
with such Notice:

                      SBIR Rights Notice (MAR 1994)

    These SBIR data are furnished with SBIR rights under Contract 
No.______ (and subcontract ______ if appropriate). For a period of 4 
years after acceptance of all items to be delivered under this contract, 
the Government agrees to use these data for Government purposes only, 
and they shall not be disclosed outside the Government (including 
disclosure for procurement purposes) during such period without 
permission of the Contractor, except that, subject to the foregoing use 
and disclosure prohibitions, such data may be disclosed for use by 
support Contractors. After the aforesaid 4-year period the Government 
has a royalty-free license to use, and to authorize others to use on its 
behalf, these data for Government purposes, but is relieved of all 
disclosure prohibitions and assumes no liability for unauthorized use of 
these data by third parties. This Notice shall be affixed to any 
reproductions of these data, in whole or in part.

                             (End of notice)

    (2) The Government's sole obligation with respect to any SBIR data 
shall be as set forth in this paragraph (d).
    (e) Omitted or incorrect markings. (1) Data delivered to the 
Government without any notice authorized by paragraph (d) of this 
clause, and without a copyright notice, shall be deemed to have been 
furnished with unlimited rights, and the Government assumes no liability 
for the disclosure, use, or reproduction of such data. However, to the 
extent the data have not been disclosed without restriction outside the 
Government, the Contractor may request, within six months (or a longer 
time approved by the Contracting Officer for good cause shown) after 
delivery of such data, permission to have notices placed on qualifying 
data at the Contractor's expense, and the Contracting Officer may agree 
to do so if the Contractor--
    (i) Identifies the data to which the omitted notice is to be 
applied;
    (ii) Demonstrates that the omission of the notice was inadvertent;
    (iii) Establishes that the use of the proposed notice is authorized; 
and
    (iv) Acknowledges that the Government has no liability with respect 
to the disclosure or use of any such data made prior to the addition of 
the notice or resulting from the omission of the notice.
    (2) The Contracting Officer may also (i) permit correction, at the 
Contractor's expense, of incorrect notices if the Contractor identifies 
the data on which correction of the notice is to be made and 
demonstrates that the correct notice is authorized, or (ii) correct any 
incorrect notices.

[[Page 189]]

    (f) Protection of limited rights data. When data other than that 
listed in subdivisions (b)(1) (i), (ii), and (iii) of this clause are 
specified to be delivered under this contract and such data qualify as 
either limited rights data or restricted computer software, the 
Contractor, if the Contractor desires to continue protection of such 
data, shall withhold such data and not furnish them to the Government 
under this contract. As a condition to this withholding the Contractor 
shall identify the data being withheld and furnish form, fit, and 
function data in lieu thereof.
    (g) Subcontracting. The Contractor has the responsibility to obtain 
from its subcontractors all data and rights therein necessary to fulfill 
the Contractor's obligations to the Government under this contract. If a 
subcontractor refuses to accept terms affording the Government such 
rights, the Contractor shall promptly bring such refusal to the 
attention of the Contracting Officer and not proceed with subcontract 
award without further authorization.
    (h) Relationship to patents. Nothing contained in this clause shall 
imply a license to the Government under any patent or be construed as 
affecting the scope of any license or other right otherwise granted to 
the Government.

                             (End of clause)

[52 FR 18155, May 13, 1987, as amended at 55 FR 25532, June 21, 1990; 59 
FR 11387, Mar. 10, 1994]



Sec. 52.227-21  Technical Data Declaration, Revision, and Withholding of Payment--Major Systems.

    As prescribed in 27.409(q), insert the following clause:

Technical Data Declaration, Revision, and Withholding of Payment--Major 
                           Systems (JAN 1997)

    (a) Scope of clause. This clause shall apply to all technical data 
(as defined in the Rights in Data--General clause included in this 
contract) that have been specified in this contract as being subject to 
this clause. It shall apply to all such data delivered, or required to 
be delivered, at any time during contract performance or within 3 years 
after acceptance of all items (other than technical data) delivered 
under this contract unless a different period is set forth herein. The 
Contracting Officer may release the Contractor from all or part of the 
requirements of this clause for specifically identified technical data 
items at any time during the period covered by this clause.
    (b) Technical data declaration. (1) All technical data that are 
subject to this clause shall be accompanied by the following declaration 
upon delivery:

                  Technical Data Declaration (JAN 1997)

    The Contractor, ________, hereby declares that, to the best of its 
knowledge and belief, the technical data delivered herewith under 
Government contract No. ______ (and subcontract ______, if appropriate) 
are complete, accurate, and comply with the requirements of the contract 
concerning such technical data.

                          (End of declaration)

    (2) The Government shall rely on the declarations set out in 
paragraph (b)(1) of this clause in accepting delivery of the technical 
data, and in consideration thereof may, at any time during the period 
covered by this clause, request correction of any deficiencies which are 
not in compliance with contract requirements. Such corrections shall be 
made at the expense of the Contractor. Unauthorized markings on data 
shall not be considered a deficiency for the purpose of this clause, but 
will be treated in accordance with paragraph (e) of the Rights in Data--
General clause included in this contract.
    (c) Technical data revision. The Contractor also agrees, at the 
request of the Contracting Officer, to revise technical data that are 
subject to this clause to reflect engineering design changes made during 
the performance of this contract and affecting the form, fit, and 
function of any item (other than technical data) delivered under this 
contract. The Contractor may submit a request for an equitable 
adjustment to the terms and conditions of this contract for any 
revisions to technical data made pursuant to this paragraph.
    (d) Withholding of payment. (1) At any time before final payment 
under this contract the Contracting Officer may, in the Government's 
interest, withhold payment until a reserve not exceeding $100,000 or 5 
percent of the amount of this contract, whichever is less, if in the 
Contracting Officer's opinion respecting any technical data that are 
subject to this clause, the Contractor fails to--
    (i) Make timely delivery of such technical data as required by this 
contract;
    (ii) Provide the declaration required by paragraph (b)(1) of this 
clause;
    (iii) Make the corrections required by subparagraph (b)(2) of this 
clause; or
    (iv) Make revisions requested under paragraph (c) of this clause.
    (2) Such reserve or balance shall be withheld until the Contracting 
Officer has determined that the Contractor has delivered the data and/or 
has made the required corrections or revisions. Withholding shall not be 
made if the failure to make timely delivery, and/or the deficiencies 
relating to delivered data, arose out of causes beyond the control of 
the Contractor and without the fault or negligence of the Contractor.

[[Page 190]]

    (3) The Contracting Officer may decrease or increase the sums 
withheld up to the sums authorized in subparagraph (d)(1) of this 
clause. The withholding of any amount under this paragraph, or the 
subsequent payment thereof, shall not be construed as a waiver of any 
Government rights.

                             (End of clause)

[52 FR 18155, May 13, 1987, as amended at 62 FR 239, Jan. 2, 1997]



Sec. 52.227-22  Major System--Minimum Rights.

    As prescribed in 27.409(r), insert the following clause:

                 Major System--Minimum Rights (JUN 1987)

    Notwithstanding any other provision of this contract, the Government 
shall have unlimited rights in any technical data, other than computer 
software, developed in the performance of this contract and relating to 
a major system or supplies for a major system procured or to be procured 
by the Government, to the extent that delivery of such technical data is 
required as an element of performance under this contract. The rights of 
the Government under this clause are in addition to and not in lieu of 
its rights under the other provisions of this contract.

                             (End of clause)

[52 FR 18156, May 13, 1987]



Sec. 52.227-23  Rights to Proposal Data (Technical).

    As prescribed in 27.409(s), insert the following clause:

             Rights to Proposal Data (Technical) (JUN 1987)

    Except for data contained on pages ______, it is agreed that as a 
condition of award of this contract, and notwithstanding the conditions 
of any notice appearing thereon, the Government shall have unlimited 
rights (as defined in the Rights in Data--General clause contained in 
this contract) in and to the technical data contained in the proposal 
dated ______, upon which this contract is based.

                             (End of clause)

[52 FR 18156, May 13, 1987]



Sec. 52.228-1  Bid Guarantee.

    As prescribed in 28.101-2, insert a provision or clause 
substantially as follows:

                        Bid Guarantee (SEP 1996)

    (a) Failure to furnish a bid guarantee in the proper form and 
amount, by the time set for opening of bids, may be cause for rejection 
of the bid.
    (b) The bidder shall furnish a bid guarantee in the form of a firm 
commitment, e.g., bid bond supported by good and sufficient surety or 
sureties acceptable to the Government, postal money order, certified 
check, cashier's check, irrevocable letter of credit, or, under Treasury 
Department regulations, certain bonds or notes of the United States. The 
Contracting Officer will return bid guarantees, other than bid bonds, 
(1) to unsuccessful bidders as soon as practicable after the opening of 
bids, and (2) to the successful bidder upon execution of contractual 
documents and bonds (including any necessary coinsurance or reinsurance 
agreements), as required by the bid as accepted.
    (c) The amount of the bid guarantee shall be ________ percent of the 
bid price or $________, whichever is less.
    (d) If the successful bidder, upon acceptance of its bid by the 
Government within the period specified for acceptance, fails to execute 
all contractual documents or furnish executed bond(s) within 10 days 
after receipt of the forms by the bidder, the Contracting Officer may 
terminate the contract for default.
    (e) In the event the contract is terminated for default, the bidder 
is liable for any cost of acquiring the work that exceeds the amount of 
its bid, and the bid guarantee is available to offset the difference.

                           (End of provision)

[61 FR 39213, July 26, 1996]



Sec. 52.228-2  Additional Bond Security.

    As prescribed in 28.106-4(a), insert the following clause:

                   Additional Bond Security (OCT 1997)

    The Contractor shall promptly furnish additional security required 
to protect the Government and persons supplying labor or materials under 
this contract if--
    (a) Any surety upon any bond, or issuing financial institution for 
other security, furnished with this contract becomes unacceptable to the 
Government;
    (b) Any surety fails to furnish reports on its financial condition 
as required by the Government;
    (c) The contract price is increased so that the penal sum of any 
bond becomes inadequate in the opinion of the Contracting Officer; or
    (d) An irrevocable letter of credit (ILC) used as security will 
expire before the end of

[[Page 191]]

the period of required security. If the Contractor does not furnish an 
acceptable extension or replacement ILC, or other acceptable substitute, 
at least 30 days before an ILC's scheduled expiration, the Contracting 
officer has the right to immediately draw on the ILC.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 61 FR 31653, June 20, 1996; 
62 FR 44807, Aug. 22, 1997]



Sec. 52.228-3  Workers' Compensation Insurance (Defense Base Act).

    As prescribed in 28.309(a), insert the following clause in 
solicitations and contracts when the Defense Base Act applies (see 
28.305) and (a) the contract will be a public-work contract performed 
outside the United States; or (b) the contract will be approved or 
financed under the Foreign Assistance Act of 1961 (Pub. L. 87-195) and 
is not excluded by 28.305(b)(2):

      Workers' Compensation Insurance (Defense Base Act) (APR 1984)

    The Contractor shall (a) provide, before commencing performance 
under this contract, such workers' compensation insurance or security as 
the Defense Base Act (42 U.S.C. 1651 et seq.) requires and (b) continue 
to maintain it until performance is completed. The Contractor shall 
insert, in all subcontracts under this contract to which the Defense 
Base Act applies, a clause similar to this clause (including this 
sentence) imposing upon those subcontractors this requirement to comply 
with the Defense Base Act.

                             (End of clause)



Sec. 52.228-4  Workers' Compensation and War-Hazard Insurance Overseas.

    As prescribed in 28.309(b), insert the following clause in 
solicitations and contracts when the contract will be a public-work 
contract performed outside the United States and the Secretary of Labor 
waives the applicability of the Defense Base Act (see 28.305(d)):

   Workers' Compensation and War-Hazard Insurance Overseas (APR 1984)

    (a) This paragraph applies if the Contractor employs any person who, 
but for a waiver granted by the Secretary of Labor, would be subject to 
workers' compensation insurance under the Defense Base Act (42 U.S.C. 
1651 et seq.). On behalf of employees for whom the applicability of the 
Defense Base Act has been waived, the Contractor shall (1) provide, 
before commencing performance under this contract, at least that 
workers' compensation insurance or the equivalent as the laws of the 
country of which these employees are nationals may require and (2) 
continue to maintain it until performance is completed. The Contractor 
shall insert, in all subcontracts under this contract to which the 
Defense Base Act would apply but for the waiver, a clause similar to 
this paragraph (a) (including this sentence) imposing upon those 
subcontractors this requirement to provide such workers' compensation 
insurance coverage.
    (b) This paragraph applies if the Contractor or any subcontractor 
under this contract employs any person who, but for a waiver granted by 
the Secretary of Labor, would be subject to the War Hazards Compensation 
Act (42 U.S.C. 1701 et seq.). On behalf of employees for whom the 
applicability of the Defense Base Act (and hence that of the War Hazards 
Compensation Act) has been waived, the Contractor shall, subject to 
reimbursement as provided elsewhere in this contract, afford the same 
protection as that provided in the War Hazards Compensation Act, except 
that the level of benefits shall conform to any law or international 
agreement controlling the benefits to which the employees may be 
entitled. In all other respects, the standards of the War Hazards 
Compensation Act shall apply; e.g., the definition of war-hazard risks 
(injury, death, capture, or detention as the result of a war hazard as 
defined in the Act), proof of loss, and exclusion of benefits otherwise 
covered by workers' compensation insurance or the equivalent. Unless the 
Contractor elects to assume directly the liability to subcontractor 
employees created by this clause, the Contractor shall insert, in all 
subcontracts under this contract to which the War Hazards Compensation 
Act would apply but for the waiver, a clause similar to this paragraph 
(b) (including this sentence) imposing upon those subcontractors this 
requirement to provide war-hazard benefits.

                             (End of clause)



Sec. 52.228-5  Insurance--Work on a Government Installation.

    As prescribed in 28.310, insert the following clause:

         Insurance--Work on a Government Installation (JAN 1997)

    (a) The Contractor shall, at its own expense, provide and maintain 
during the entire performance of this contract, at least

[[Page 192]]

the kinds and minimum amounts of insurance required in the schedule or 
elsewhere in the contract.
    (b) Before commencing work under this contract, the Contractor shall 
notify the Contracting Officer in writing that the required insurance 
has been obtained. The policies evidencing required insurance shall 
contain an endorsement to the effect that any cancellation or any 
material change adversely affecting the Government's interest shall not 
be effective (1) for such period as the laws of the State in which this 
contract is to be performed prescribe or (2) until 30 days after the 
insurer or the Contractor gives written notice to the Contracting 
Officer, whichever period is longer.
    (c) The Contractor shall insert the substance of this clause, 
including this paragraph (c), in subcontracts under this contract that 
require work on a Government installation and shall require 
subcontractors to provide and maintain the insurance required in the 
Schedule or elsewhere in the contract. The Contractor shall maintain a 
copy of all subcontractors' proofs of required insurance, and shall make 
copies available to the Contracting Officer upon request.

                             (End of clause)

[54 FR 34758, Aug. 21, 1989; 62 FR 239, Jan. 2, 1997]



Sec. 52.228-6  [Reserved]



Sec. 52.228-7  Insurance--Liability to Third Persons.

    As prescribed in 28.311-1, insert the following clause:

            Insurance--Liability to Third Persons (MAR 1996)

    (a)(1) Except as provided in subparagraph (a)(2) of this clause, the 
Contractor shall provide and maintain workers' compensation, employer's 
liability, comprehensive general liability (bodily injury), 
comprehensive automobile liability (bodily injury and property damage) 
insurance, and such other insurance as the Contracting Officer may 
require under this contract.
    (2) The Contractor may, with the approval of the Contracting 
Officer, maintain a self-insurance program; provided that, with respect 
to workers' compensation, the Contractor is qualified pursuant to 
statutory authority.
    (3) All insurance required by this paragraph shall be in a form and 
amount and for those periods as the Contracting Officer may require or 
approve and with insurers approved by the Contracting Officer.
    (b) The Contractor agrees to submit for the Contracting Officer's 
approval, to the extent and in the manner required by the Contracting 
Officer, any other insurance that is maintained by the Contractor in 
connection with the performance of this contract and for which the 
Contractor seeks reimbursement.
    (c) The Contractor shall be reimbursed--
    (1) For that portion (i) of the reasonable cost of insurance 
allocable to this contract and (ii) required or approved under this 
clause; and
    (2) For certain liabilities (and expenses incidental to such 
liabilities) to third persons not compensated by insurance or otherwise 
without regard to and as an exception to the limitation of cost or the 
limitation of funds clause of this contract. These liabilities must 
arise out of the performance of this contract, whether or not caused by 
the negligence of the Contractor or of the Contractor's agents, 
servants, or employees, and must be represented by final judgments or 
settlements approved in writing by the Government. These liabilities are 
for--
    (i) Loss of or damage to property (other than property owned, 
occupied, or used by the Contractor, rented to the Contractor, or in the 
care, custody, or control of the Contractor); or
    (ii) Death or bodily injury.
    (d) The Government's liability under paragraph (c) of this clause is 
subject to the availability of appropriated funds at the time a 
contingency occurs. Nothing in this contract shall be construed as 
implying that the Congress will, at a later date, appropriate funds 
sufficient to meet deficiencies.
    (e) The Contractor shall not be reimbursed for liabilities (and 
expenses incidental to such liabilities)--
    (1) For which the Contractor is otherwise responsible under the 
express terms of any clause specified in the Schedule or elsewhere in 
the contract;
    (2) For which the Contractor has failed to insure or to maintain 
insurance as required by the Contracting Officer; or
    (3) That result from willful misconduct or lack of good faith on the 
part of any of the Contractor's directors, officers, managers, 
superintendents, or other representatives who have supervision or 
direction of--
    (i) All or substantially all of the Contractor's business;
    (ii) All or substantially all of the Contractor's operations at any 
one plant or separate location in which this contract is being 
performed; or
    (iii) A separate and complete major industrial operation in 
connection with the performance of this contract.
    (f) The provisions of paragraph (e) of this clause shall not 
restrict the right of the Contractor to be reimbursed for the cost of 
insurance maintained by the Contractor in connection with the 
performance of this contract, other than insurance required in 
accordance with this clause; provided, that

[[Page 193]]

such cost is allowable under the Allowable Cost and Payment clause of 
this contract.
    (g) If any suit or action is filed or any claim is made against the 
Contractor, the cost and expense of which may be reimbursable to the 
Contractor under this contract, and the risk of which is then uninsured 
or is insured for less than the amount claimed, the Contractor shall--
    (1) Immediately notify the Contracting Officer and promptly furnish 
copies of all pertinent papers received;
    (2) Authorize Government representatives to collaborate with counsel 
for the insurance carrier in settling or defending the claim when the 
amount of the liability claimed exceeds the amount of coverage; and
    (3) Authorize Government representatives to settle or defend the 
claim and to represent the Contractor in or to take charge of any 
litigation, if required by the Government, when the liability is not 
insured or covered by bond. The Contractor may, at its own expense, be 
associated with the Government representatives in any such claim or 
litigation.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 52799, Dec. 21, 1990; 
61 FR 2640, Jan. 26, 1996]



Sec. 52.228-8  Liability and Insurance--Leased Motor Vehicles.

    As prescribed in 28.312, insert the following clause in 
solicitations and contracts for the leasing of motor vehicles (see 
subpart 8.11):

        Liability and Insurance--Leased Motor Vehicles (JAN 1997)

    (a) The Government shall be responsible for loss of or damage to--
    (1) Leased vehicles, except for (i) normal wear and tear and (ii) 
loss or damage caused by the negligence of the Contractor, its agents, 
or employees; and
    (2) Property of third persons, or the injury or death of third 
persons, if the Government is liable for such loss, damage, injury, or 
death under the Federal Tort Claims Act (28 U.S.C. 2671-2680).
    (b) The Contractor shall be liable for, and shall indemnify and hold 
harmless the Government against, all actions or claims for loss of or 
damage to property or the injury or death of persons, resulting from the 
fault, negligence, or wrongful act or omission of the Contractor, its 
agents, or employees.
    (c) The Contractor shall provide and maintain insurance covering its 
liabilities under paragraph (b) of this clause, in amounts of at least 
$200,000 per person and $500,000 per occurrence for death or bodily 
injury and $20,000 per occurrence for property damage or loss.
    (d) Before commencing work under this contract, the Contractor shall 
notify the Contracting Officer in writing that the required insurance 
has been obtained. The policies evidencing required insurance shall 
contain an endorsement to the effect that any cancellation or any 
material change adversely affecting the interests of the Government 
shall not be effective (1) for such period as the laws of the State in 
which this contract is to be performed prescribe or (2) until 30 days 
after written notice to the Contracting Officer, whichever period is 
longer. The policies shall exclude any claim by the insurer for 
subrogation against the Government by reason of any payment under the 
policies.
    (e) The Contractor warrants that the contract price includes no cost 
for insurance or contingency to cover losses, damage, injury, or death 
for which the Government is responsible under paragraph (a) of this 
clause.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 38518, Sept. 18, 1990; 
59 FR 11388, Mar. 10, 1994; 62 FR 239, Jan. 2, 1997]



Sec. 52.228-9  Cargo Insurance.

    As prescribed in 28.313(a), insert the following clause in 
solicitations and contracts for transportation or for transportation-
related services, except when freight is shipped under rates subject to 
released or declared value:

                       Cargo Insurance (JAN 1997)

    (a) The Contractor, at the Contractor's expense, agrees to provide 
and maintain, during the continuance of this contract, cargo liability 
insurance of $____ per vehicle to cover the value of property on each 
vehicle and of $____ to cover the total value of the property in the 
shipment.
    (b) All insurance shall be written on companies acceptable to ______ 
[insert name of contracting agency], and policies shall include such 
terms and conditions as required by ______ [insert name of contracting 
agency]. As evidence of insurance maintained, an authenticated copy of 
the cargo liability insurance policy or policies shall be furnished to 
______ [insert name of contracting agency]. Evidence of acceptable cargo 
insurance shall be furnished before commencing operations under this 
contract.
    (c) Each cargo insurance policy shall include the following 
statement:
    It is a condition of this policy that the Company shall furnish--
    (1) Written notice to ______ [insert name of contracting agency], at 
the address shown on

[[Page 194]]

the face sheet of this contract, 30 days in advance of the effective 
date of any reduction in, or cancellation of, this policy; and
    (2) An authenticated copy of any renewal policy to ______ [insert 
name of contracting agency] not less than 15 days prior to the 
expiration of any current policy on file with ______ [insert name of 
contracting agency].

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 62 FR 239, Jan. 2, 1997]



Sec. 52.228-10  Vehicular and General Public Liability Insurance.

    As prescribed in 28.313(b), insert a clause substantially the same 
as the following in solicitations and contracts for transportation or 
for transportation-related services when the contracting officer 
determines that vehicular liability or general public liability 
insurance required by law is not sufficient:

       Vehicular and General Public Liability Insurance (APR 1984)

    (a) The Contractor, at the Contractor's expense, agrees to maintain, 
during the continuance of this contract, vehicular liability and general 
public liability insurance with limits of liability for (1) bodily 
injury of not less than $____ for each person and $____ for each 
occurrence and (2) property damage of not less than $____ for each 
accident and $____ in the aggregate.
    (b) The Contractor also agrees to maintain workers' compensation and 
other legally required insurance with respect to the Contractor's own 
employees and agents.

                             (End of clause)



Sec. 52.228-11  Pledges of Assets.

    As prescribed in 28.203-6, insert the following clause:

                      Pledges of Assets (FEB 1990)

    (a) Offerors shall obtain from each person acting as an individual 
surety on a bid guarantee, a performance bond, or a payment bond--
    (1) Pledge of assets; and
    (2) Standard Form 28, Affidavit of Individual Surety.
    (b) Pledges of assets from each person acting as an individual 
surety shall be in the form of--
    (1) Evidence of an escrow account containing cash, certificates of 
deposit, commercial or Government securities, or other assets described 
in FAR 28.203-2 (except see 28.203-2(b)(2) with respect to Government 
securities held in book entry form) and/or;
    (2) A recorded lien on real estate. The offeror will be required to 
provide--
    (i) Evidence of title in the form of a certificate of title prepared 
by a title insurance company approved by the United States Department of 
Justice. This title evidence must show fee simple title vested in the 
surety along with any concurrent owner: whether any real estate taxes 
are due and payable; and any recorded encumbrances against the property, 
including the lien filed in favor of the Government as required by FAR 
28.203-3(d);
    (ii) Evidence of the amount due under any encumbrance shown in the 
evidence of title;
    (iii) A copy of the current real estate tax assessment of the 
property or a current appraisal dated no earlier than 6 months prior to 
the date of the bond, prepared by a professional appraiser who certifies 
that the appraisal has been conducted in accordance with the generally 
accepted appraisal standards as reflected in the Uniform Standards of 
Professional Appraisal Practice, as promulgated by the Appraisal 
Foundation.

                             (End of clause)

[54 FR 48995, Nov. 28, 1989, as amended at 56 FR 67137, Dec. 27, 1991]



Sec. 52.228-12  Prospective Subcontractor Requests for Bonds.

    As prescribed in 28.106-4(b), use the following clause:

         Prospective Subcontractor Requests for Bonds (OCT 1995)

    In accordance with section 806(a)(3) of Pub. L. 102-190, as amended 
by sections 2091 and 8105 of Pub. L. 103-355, upon the request of a 
prospective subcontractor or supplier offering to furnish labor or 
material for the performance of this contract for which a payment bond 
has been furnished to the Government pursuant to the Miller Act, the 
Contractor shall promptly provide a copy of such payment bond to the 
requester.

                             (End of clause)

[60 FR 48274, Sept. 18, 1995]



Sec. 52.228-13  Alternative Payment Protections.

    As prescribed in 28.102-3(b), insert the following clause:

               Alternative Payment Protections (OCT 1996)

    (a) The Contractor shall submit one of the following payment 
protections:
_______________________________________________________________________


[[Page 195]]

________________________________________________________________________
_______________________________________________________________________

_______________________________________________________________________
    (b) The amount of the payment protection shall be 50 percent of the 
contract price.
    (c) The submission of the payment protection is required within ____ 
days of contract award.
    (d) The payment protection shall provide protection for the full 
contract performance period plus a one-year period.
    (e) Except for escrow agreements and payment bonds, which provide 
their own protection procedures, the Contracting Officer is authorized 
to access funds under the payment protection when it has been alleged in 
writing by a supplier of labor or material that a nonpayment has 
occurred, and to withhold such funds pending resolution by 
administrative or judicial proceedings or mutual agreement of the 
parties.
    (f) When a tripartite escrow agreement is used, the Contractor shall 
utilize only suppliers of labor and material that signed the escrow 
agreement.

                             (End of clause)

[61 FR 31654, June 20, 1996, as amended at 62 FR 44807, Aug. 22, 1997]



Sec. 52.228-14  Irrevocable Letter of Credit.

    As prescribed in 28.204-4, insert the following clause:

                 Irrevocable Letter of Credit (OCT 1997)

    (a) ``Irrevocable letter of credit'' (ILC), as used in this clause, 
means a written commitment by a federally insured financial institution 
to pay all or part of a stated amount of money, until the expiration 
date of the letter, upon presentation by the Government (the 
beneficiary) of a written demand therefor. Neither the financial 
institution nor the offeror/Contractor can revoke or condition the 
letter of credit.
    (b) If the offeror intends to use an ILC in lieu of a bid bond, or 
to secure other types of bonds such as performance and payment bonds, 
the letter of credit and letter of confirmation formats in paragraphs 
(e) and (f) of this clause shall be used.
    (c) The letter of credit shall be irrevocable, shall require 
presentation of no document other than a written demand and the ILC 
(including confirming letter, if any), shall be issued/confirmed by an 
acceptable federally insured financial institution as provided in 
paragraph (d) of this clause, and--
    (1) If used as a bid guarantee, the ILC shall expire no earlier than 
60 days after the close of the bid acceptance period;
    (2) If used as an alternative to corporate or individual sureties as 
security for a performance or payment bond, the offeror/Contractor may 
submit an ILC with an initial expiration date estimated to cover the 
entire period for which financial security is required or may submit an 
ILC with an initial expiration date that is a minimum period of one year 
from the date of issuance. The ILC shall provide that, unless the issuer 
provides the beneficiary written notice of non-renewal at least 60 days 
in advance of the current expiration date, the ILC is automatically 
extended without amendment for one year from the expiration date, or any 
future expiration date, until the period of required coverage is 
completed and the Contracting Officer provides the financial institution 
with a written statement waiving the right to payment. The period of 
required coverage shall be:
    (i) For contracts subject to the Miller Act, the later of--
    (A) One year following the expected date of final payment;
    (B) For performance bonds only, until completion of any warranty 
period; or
    (C) For payment bonds only, until resolution of all claims filed 
against the payment bond during the one-year period following final 
payment.
    (ii) For contracts not subject to the Miller Act, the later of--
    (A) 90 days following final payment; or
    (B) For performance bonds only, until completion of any warranty 
period.
    (d) Only federally insured financial institutions rated investment 
grade or higher shall issue or confirm the ILC. The offeror/Contractor 
shall provide the Contracting Officer a credit rating that indicates the 
financial institution has the required rating(s) as of the date of 
issuance of the ILC. Unless the financial institution issuing the ILC 
had letter of credit business of at least $25 million in the past year, 
ILCs over $5 million must be confirmed by another acceptable financial 
institution that had letter of credit business of at least $25 million 
in the past year.
    (e) The following format shall be used by the issuing financial 
institution to create an ILC:
_______________________________________________________________________
[Issuing Financial Institution's Letterhead or Name and Address]
Issue Date______________________________________________________________
Irrevocable Letter of Credit No.________________________________________
Account party's name____________________________________________________
Account party's address_________________________________________________
For Solicitation No.____________________________________________________
(For reference only)
    TO: [U.S. Government agency]
    [U.S. Government agency's address]
    1. We hereby establish this irrevocable and transferable Letter of 
Credit in your favor for one or more drawings up to United States $____. 
This Letter of Credit is payable at [issuing financial institution's 
and, if any, confirming financial institution's] office at [issuing

[[Page 196]]

financial institution's address and, if any, confirming financial 
institution's address] and expires with our close of business on ____, 
or any automatically extended expiration date.
    2. We hereby undertake to honor your or the transferee's sight 
draft(s) drawn on the issuing or, if any, the confirming financial 
institution, for all or any part of this credit if presented with this 
Letter of Credit and confirmation, if any, at the office specified in 
paragraph 1 of this Letter of Credit on or before the expiration date or 
any automatically extended expiration date.
    3. [This paragraph is omitted if used as a bid guarantee, and 
subsequent paragraphs are renumbered.] It is a condition of this Letter 
of Credit that it is deemed to be automatically extended without 
amendment for one year from the expiration date hereof, or any future 
expiration date, unless at least 60 days prior to any expiration date, 
we notify you or the transferee by registered mail, or other receipted 
means of delivery, that we elect not to consider this Letter of Credit 
renewed for any such additional period. At the time we notify you, we 
also agree to notify the account party (and confirming financial 
institution, if any) by the same means of delivery.
    4. This Letter of Credit is transferable. Transfers and assignments 
of proceeds are to be effected without charge to either the beneficiary 
or the transferee/assignee of proceeds. Such transfer or assignment 
shall be only at the written direction of the Government (the 
beneficiary) in a form satisfactory to the issuing financial institution 
and the confirming financial institution, if any.
    5. This Letter of Credit is subject to the Uniform Customs and 
Practice (UCP) for Documentary Credits, 1993 Revision, International 
Chamber of Commerce Publication No. 500, and to the extent not 
inconsistent therewith, to the laws of ____________ [state of confirming 
financial institution, if any, otherwise state of issuing financial 
institution].
    6. If this credit expires during an interruption of business of this 
financial institution as described in Article 17 of the UCP, the 
financial institution specifically agrees to effect payment if this 
credit is drawn against within 30 days after the resumption of our 
business.

        Sincerely,

[Issuing financial institution]
    (f) The following format shall be used by the financial institution 
to confirm an ILC:
[Confirming Financial Institution's Letterhead or Name and Address]_____
____________________, 19______
Our Letter of Credit
Advice Number___________________________________________________________
Beneficiary:____________________________________________________________
[U.S. Government agency]
Issuing Financial Institution:__________________________________________
Issuing Financial Institution's LC No.:_________________________________
    Gentlemen:
    1. We hereby confirm the above indicated Letter of Credit, the 
original of which is attached, issued by __________ [name of issuing 
financial institution] for drawings of up to United States dollars 
__________/U.S. $__________ and expiring with our close of business on 
__________ [the expiration date], or any automatically extended 
expiration date.
    2. Draft(s) drawn under the Letter of Credit and this Confirmation 
are payable at our office located at ____________.
    3. We hereby undertake to honor sight draft(s) drawn under and 
presented with the Letter of Credit and this Confirmation at our offices 
as specified herein.
    4. [This paragraph is omitted if used as a bid guarantee, and 
subsequent paragraphs are renumbered.] It is a condition of this 
confirmation that it be deemed automatically extended without amendment 
for one year from the expiration date hereof, or any automatically 
extended expiration date, unless:
    (a) At least 60 days prior to any such expiration date, we shall 
notify the Contracting Officer, or the transferee and the issuing 
financial institution, by registered mail or other receipted means of 
delivery, that we elect not to consider this confirmation extended for 
any such additional period; or
    (b) The issuing financial institution shall have exercised its right 
to notify you or the transferee, the account party, and ourselves, of 
its election not to extend the expiration date of the Letter of Credit.
    5. This confirmation is subject to the Uniform Customs and Practice 
(UCP) for Documentary Credits, 1993 Revision, International Chamber of 
Commerce Publication No. 500, and to the extent not inconsistent 
therewith, to the laws of __________ [state of confirming financial 
institution].
    6. If this confirmation expires during an interruption of business 
of this financial institution as described in Article 17 of the UCP, we 
specifically agree to effect payment if this credit is drawn against 
within 30 days after the resumption of our business.
Sincerely,
_______________________________________________________________________
[Confirming financial institution]

    (g) The following format shall be used by the Contracting Officer 
for a sight draft to draw on the Letter of Credit:
SIGHT DRAFT
_______________________________________________________________________
[City, State]
____________________, 19______
[Name and address of financial institution]
Pay to the order of_____________________________________________________
[Beneficiary Agency] __________
the sum of United States $ ____________________________________
This draft is drawn under_______________________________________________
Irrevocable Letter of Credit No.________________________________________
_______________________________________________________________________
[Beneficiary Agency]
By: ____________________

[[Page 197]]

                             (End of clause)

[61 FR 31654, June 20, 1996, as amended at 61 FR 67430, Dec. 20, 1996; 
62 FR 44808, Aug. 22, 1997]



Sec. 52.228-15  Performance and Payment Bonds--Construction.

    As prescribed in 28.102-3(a), insert a clause substantially as 
follows:

         Performance and Payment Bonds--Construction (SEP 1996)

    (a) Definitions. As used in this clause--
    Contract price means the award price of the contract or, for 
requirements contracts, the price payable for the estimated quantity; or 
for indefinite-delivery type contracts, the price payable for the 
specified minimum quantity.
    (b) Unless the resulting contract price is $100,000 or less, the 
successful offeror shall be required to furnish performance and payment 
bonds to the Contracting Officer as follows:
    (1) Performance Bonds (Standard Form 25). (i) The penal amount of 
performance bonds shall be 100 percent of the original contract price.
    (ii) The Government may require additional performance bond 
protection when the contract price is increased. The increase in 
protection shall generally equal 100 percent of the increase in contract 
price.
    (iii) The Government may secure additional protection by directing 
the Contractor to increase the penal amount of the existing bond or to 
obtain an additional bond.
    (2) Payment Bonds (Standard Form 25-A). (i) The penal amount of 
payment bonds shall equal--
    (A) 50 percent of the contract price if the contract price is not 
more than $1 million;
    (B) 40 percent of the contract price if the contract price is more 
than $1 million but not more than $5 million; or
    (C) $2.5 million if the contract price is more than $5 million.
    (ii) If the original contract price is $5 million or less, the 
Government may require additional protection if the contract price is 
increased. The penal amount of the total protection shall meet the 
requirement of subparagraph (b)(2)(i) of this clause.
    (iii) The Government may secure additional protection by directing 
the Contractor to increase the penal sum of the existing bond or to 
obtain an additional bond.
    (c) The Contractor shall furnish all executed bonds, including any 
necessary reinsurance agreements, to the Contracting Officer, within the 
time period specified in the Bid Guarantee provision of the 
solicitation, or otherwise specified by the Contracting Officer, but in 
any event, before starting work.
    (d) The bonds shall be in the form of firm commitment, supported by 
corporate sureties whose names appear on the list contained in Treasury 
Department Circular 570, individual sureties, or by other acceptable 
security such as postal money order, certified check, cashier's check, 
irrevocable letter of credit, or, in accordance with Treasury Department 
regulations, certain bonds or notes of the United States. Treasury 
Circular 570 is published in the Federal Register, or may be obtained 
from the U.S. Department of Treasury, Financial Management Service, 
Surety Bond Branch, 401 14th Street, NW., 2nd Floor, West Wing, 
Washington, DC 20227.

                             (End of clause)

[61 FR 39214, July 26, 1996]



Sec. 52.228-16  Performance and Payment Bonds--Other Than Construction.

    As prescribed in 28.103-4, insert a clause substantially as follows:

    Performance and Payment Bonds--Other Than Construction (SEP 1996)

    (a) Definitions. As used in this clause--
    Contract price means the total amount of the contract for the term 
of the contract (excluding options, if any) or, for requirements 
contracts, the price payable for the estimated quantity; or for 
indefinite-delivery type contracts, the price payable for the specified 
minimum quantity.
    (b) The Contractor shall furnish a performance bond (Standard Form 
1418) for the protection of the Government in an amount equal to 
________ percent of the contract price and a payment bond (Standard Form 
1416) in an amount equal to ________ percent of the contract price.
    (c) The Contractor shall furnish all executed bonds, including any 
necessary reinsurance agreements, to the Contracting Officer, within 
________ days, but in any event, before starting work.
    (d) The Government may require additional performance bond 
protection when the contract price is increased. The Government may 
secure additional protection by directing the Contractor to increase the 
penal amount of the existing bond or to obtain an additional bond.
    (e) The bonds shall be in the form of firm commitment, supported by 
corporate sureties whose names appear on the list contained in Treasury 
Department Circular 570, individual sureties, or by other acceptable 
security such as postal money order, certified check, cashier's check, 
irrevocable letter of credit, or, in accordance with Treasury Department 
regulations, certain bonds or

[[Page 198]]

notes of the United States. Treasury Circular 570 is published in the 
Federal Register, or may be obtained from the U.S. Department of 
Treasury, Financial Management Service, Surety Bond Branch, 401 14th 
Street, NW., 2nd Floor, West Wing, Washington, DC 20227.

                             (End of clause)

    Alternate I (SEP 1996). As prescribed in 28.103-4, substitute the 
following paragraph (b) for paragraph (b) of the basic clause:

    (b) The Contractor shall furnish a performance bond (Standard Form 
1418) for the protection of the Government in an amount equal to 
________ percent of the contract price.

[61 FR 39214, July 26, 1996]



Sec. 52.229-1  State and Local Taxes.

    As prescribed in 29.401-1, insert the following clause in 
solicitations and contracts for leased equipment, when a fixed-price 
indefinite-delivery contract is contemplated, the contract will be 
performed wholly or partly within the United States, its possessions, or 
Puerto Rico, and the place or places of delivery are not known at the 
time of contracting:

                    State and Local Taxes (APR 1984)

    Notwithstanding the terms of the Federal, State, and Local Taxes 
clause, the contract price excludes all State and local taxes levied on 
or measured by the contract or sales price of the services or completed 
supplies furnished under this contract. The Contractor shall state 
separately on its invoices taxes excluded from the contract price, and 
the Government agrees either to pay the amount of the taxes to the 
Contractor or provide evidence necessary to sustain an exemption.

                             (End of clause)



Sec. 52.229-2  North Carolina State and Local Sales and Use Tax.

    As prescribed in 29.401-2, insert the following clause in 
solicitations and contracts for construction to be performed in North 
Carolina:

       North Carolina State and Local Sales and Use Tax (APR 1984)

    (a) Materials, as used in this clause, means building materials, 
supplies, fixtures, and equipment that become a part of or are annexed 
to any building or structure erected, altered, or repaired under this 
contract.
    (b) If this is a fixed-price contract, the contract price includes 
North Carolina State and local sales and use taxes to be paid on 
materials, notwithstanding any other provision of this contract. If this 
is a cost-reimbursement contract, any North Carolina State and local 
sales and use taxes paid by the Contractor on materials shall constitute 
an allowable cost under this contract.
    (c) At the time specified in paragraph (d) below, the Contractor 
shall furnish the Contracting Officer certified statements setting forth 
the cost of the materials purchased from each vendor and the amount of 
North Carolina State and local sales and use taxes paid. In the event 
the Contractor makes several purchases from the same vendor, the 
certified statement shall indicate the invoice numbers, the inclusive 
dates of the invoices, the total amount of the invoices, and the North 
Carolina State and local sales and use taxes paid. The statement shall 
also include the cost of any tangible personal property withdrawn from 
the Contractor's warehouse stock and the amount of North Carolina State 
and local sales or use tax paid on this property by the Contractor. Any 
local sales or use taxes included in the Contractor's statements must be 
shown separately from the State sales or use taxes. The Contractor shall 
furnish any additional information the Commissioner of Revenue of the 
State of North Carolina may require to substantiate a refund claim for 
sales or use taxes. The Contractor shall also obtain and furnish to the 
Contracting Officer similar certified statements by its subcontractors.
    (d) If this contract is completed before the next October 1, the 
certified statements to be furnished pursuant to paragraph (c) above 
shall be submitted within 60 days after completion. If this contract is 
not completed before the next October 1, the certified statements shall 
be submitted on or before November 30 of each year and shall cover taxes 
paid during the 12-month period that ended the preceding September 30.
    (e) The certified statements to be furnished pursuant to paragraph 
(c) above shall be in the following form:

I hereby certify that during the period ____ to ____ [insert dates], 
______ [insert name of Contractor or subcontractor] paid North Carolina 
State and local sales and use taxes aggregating $____ (State) and $____ 
(local), with respect to building materials, supplies, fixtures, and 
equipment that have become a part of or annexed to a building or 
structure erected, altered, or repaired by ______ [insert name of 
Contractor or subcontractor] for the United States of America, and that 
the vendors from whom the property was purchased, the dates and numbers 
of the invoices covering the purchases, the total amount of the invoices 
of each vendor, the North Carolina

[[Page 199]]

State and local sales and use taxes paid on the property (shown 
separately), and the cost of property withdrawn from warehouse stock and 
North Carolina State and local sales or use taxes paid on this property 
are as set forth in the attachments.

                             (End of clause)

    Alternate I (APR 1984). If the requirement is for vessel repair to 
be performed in North Carolina, substitute the following paragraph (a) 
for paragraph (a) of the basic clause:

    (a) Materials, as used in this clause, means materials, supplies, 
fixtures, and equipment that become a part of or are annexed to any 
vessel altered or repaired under this contract.

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1747, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985]



Sec. 52.229-3  Federal, State, and Local Taxes.

    As prescribed in 29.401-3, insert the following clause:

               Federal, State, and Local Taxes (JAN 1991)

    (a) Contract date, as used in this clause, means the date set for 
bid opening or, if this is a negotiated contract or a modification, the 
effective date of this contract or modification.
    All applicable Federal, State, and local taxes and duties, as used 
in this clause, means all taxes and duties, in effect on the contract 
date, that the taxing authority is imposing and collecting on the 
transactions or property covered by this contract.
    After-imposed Federal tax, as used in this clause, means any new or 
increased Federal excise tax or duty, or tax that was exempted or 
excluded on the contract date but whose exemption was later revoked or 
reduced during the contract period, on the transactions or property 
covered by this contract that the Contractor is required to pay or bear 
as the result of legislative, judicial, or administrative action taking 
effect after the contract date. It does not include social security tax 
or other employment taxes.
    After-relieved Federal tax, as used in this clause, means any amount 
of Federal excise tax or duty, except social security or other 
employment taxes, that would otherwise have been payable on the 
transactions or property covered by this contract, but which the 
Contractor is not required to pay or bear, or for which the Contractor 
obtains a refund or drawback, as the result of legislative, judicial, or 
administrative action taking effect after the contract date.
    (b) The contract price includes all applicable Federal, State, and 
local taxes and duties.
    (c) The contract price shall be increased by the amount of any 
after-imposed Federal tax, provided the Contractor warrants in writing 
that no amount for such newly imposed Federal excise tax or duty or rate 
increase was included in the contract price, as a contingency reserve or 
otherwise.
    (d) The contract price shall be decreased by the amount of any 
after-relieved Federal tax.
    (e) The contract price shall be decreased by the amount of any 
Federal excise tax or duty, except social security or other employment 
taxes, that the Contractor is required to pay or bear, or does not 
obtain a refund of, through the Contractor's fault, negligence, or 
failure to follow instructions of the Contracting Officer.
    (f) No adjustment shall be made in the contract price under this 
clause unless the amount of the adjustment exceeds $250.
    (g) The Contractor shall promptly notify the Contracting Officer of 
all matters relating to any Federal excise tax or duty that reasonably 
may be expected to result in either an increase or decrease in the 
contract price and shall take appropriate action as the Contracting 
Officer directs.
    (h) The Government shall, without liability, furnish evidence 
appropriate to establish exemption from any Federal, State, or local tax 
when the Contractor requests such evidence and a reasonable basis exists 
to sustain the exemption.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 50 FR 1747, Jan. 11, 1985; 
50 FR 52429, Dec. 23, 1985; 55 FR 52799, Dec. 21, 1990]



Sec. 52.229-4  Federal, State, and Local Taxes (Noncompetitive Contract).

    As prescribed in 29.401-4, insert the following clause:

  Federal, State, and Local Taxes (Noncompetitive Contract) (JAN 1991)

    (a) Contract date, as used in this clause, means the effective date 
of this contract and, for any modification to this contract, the 
effective date of the modification.
    All applicable Federal, State, and local taxes and duties, as used 
in this clause, means all taxes and duties, in effect on the contract 
date, that the taxing authority is imposing and collecting on the 
transactions or property covered by this contract.
    After-imposed tax, as used in this clause, means any new or 
increased Federal, State, or local tax or duty, or tax that was excluded 
on the contract date but whose exclusion was later revoked or amount of 
exemption reduced during the contract period, other

[[Page 200]]

than an excepted tax, on the transactions or property covered by this 
contract that the Contractor is required to pay or bear as the result of 
legislative, judicial, or administrative action taking effect after the 
contract date.
    After-relieved tax, as used in this clause, means any amount of 
Federal, State, or local tax or duty, other than an excepted tax, that 
would otherwise have been payable on the transactions or property 
covered by this contract, but which the Contractor is not required to 
pay or bear, or for which the Contractor obtains a refund or drawback, 
as the result of legislative, judicial, or administrative action taking 
effect after the contract date.
    Excepted tax, as used in this clause, means social security or other 
employment taxes, net income and franchise taxes, excess profits taxes, 
capital stock taxes, transportation taxes, unemployment compensation 
taxes, and property taxes. Excepted tax does not include gross income 
taxes levied on or measured by sales or receipts from sales, property 
taxes assessed on completed supplies covered by this contract, or any 
tax assessed on the Contractor's possession of, interest in, or use of 
property, title to which is in the Government.
    (b) Unless otherwise provided in this contract, the contract price 
includes all applicable Federal, State, and local taxes and duties.
    (c) The contract price shall be increased by the amount of any 
after-imposed tax, or of any tax or duty specifically excluded from the 
contract price by a term or condition of this contract that the 
Contractor is required to pay or bear, including any interest or 
penalty, if the Contractor states in writing that the contract price 
does not include any contingency for such tax and if liability for such 
tax, interest, or penalty was not incurred through the Contractor's 
fault, negligence, or failure to follow instructions of the Contracting 
Officer.
    (d) The contract price shall be decreased by the amount of any 
after-relieved tax. The Government shall be entitled to interest 
received by the Contractor incident to a refund of taxes to the extent 
that such interest was earned after the Contractor was paid by the 
Government for such taxes. The Government shall be entitled to repayment 
of any penalty refunded to the Contractor to the extent that the penalty 
was paid by the Government.
    (e) The contract price shall be decreased by the amount of any 
Federal, State, or local tax, other than an excepted tax, that was 
included in the contract price and that the Contractor is required to 
pay or bear, or does not obtain a refund of, through the Contractor's 
fault, negligence, or failure to follow instructions of the Contracting 
Officer.
    (f) No adjustment shall be made in the contract price under this 
clause unless the amount of the adjustment exceeds $250.
    (g) The Contractor shall promptly notify the Contracting Officer of 
all matters relating to Federal, State, and local taxes and duties that 
reasonably may be expected to result in either an increase or decrease 
in the contract price and shall take appropriate action as the 
Contracting Officer directs. The contract price shall be equitably 
adjusted to cover the costs of action taken by the Contractor at the 
direction of the Contracting Officer, including any interest, penalty, 
and reasonable attorneys' fees.
    (h) The Government shall furnish evidence appropriate to establish 
exemption from any Federal, State, or local tax when (1) the Contractor 
requests such exemption and states in writing that it applies to a tax 
excluded from the contract price and (2) a reasonable basis exists to 
sustain the exemption.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 52799, Dec. 21, 1990]



Sec. 52.229-5  Taxes--Contracts Performed in U.S. Possessions or Puerto Rico.

    As prescribed in 29.401-5, insert the following clause in 
solicitations and contracts that include the clause at 52.229-3, 
Federal, State, and Local Taxes, or 52.229-4, Federal, State, and Local 
Taxes (Noncompetitive Contract):

Taxes--Contracts Performed in U.S. Possessions or Puerto Rico (APR 1984)

    The term local taxes, as used in the Federal, State, and local taxes 
clause of this contract, includes taxes imposed by a possession of the 
United States or by Puerto Rico.

                             (End of clause)



Sec. 52.229-6  Taxes--Foreign Fixed-Price Contracts.

    As prescribed in 29.402-1(a), insert the following clause:

             Taxes--Foreign Fixed-Price Contracts (JAN 1991)

    (a) To the extent that this contract provides for furnishing 
supplies or performing services outside the United States, its 
possessions, and Puerto Rico, this clause applies in lieu of any 
Federal, State, and local taxes clause of the contract.
    (b) Contract date, as used in this clause, means the date set for 
bid opening or, if this is a negotiated contract or a modification,

[[Page 201]]

the effective date of this contract or modification.
    Country concerned, as used in this clause, means any country, other 
than the United States, its possessions, and Puerto Rico, in which 
expenditures under this contract are made.
    Tax and taxes, as used in this clause, include fees and charges for 
doing business that are levied by the government of the country 
concerned or by its political subdivisions.
    All applicable taxes and duties, as used in this clause, means all 
taxes and duties, in effect on the contract date, that the taxing 
authority is imposing and collecting on the transactions or property 
covered by this contract, pursuant to written ruling or regulation in 
effect on the contract date.
    After-imposed tax, as used in this clause, means any new or 
increased tax or duty, or tax that was exempted or excluded on the 
contract date but whose exemption was later revoked or reduced during 
the contract period, other than excepted tax, on the transactions or 
property covered by this contract that the Contractor is required to pay 
or bear as the result of legislative, judicial, or administrative action 
taking effect after the contract date.
    After-relieved tax, as used in this clause, means any amount of tax 
or duty, other than an excepted tax, that would otherwise have been 
payable on the transactions or property covered by this contract, but 
which the Contractor is not required to pay or bear, or for which the 
Contractor obtains a refund, as the result of legislative, judicial, or 
administrative action taking effect after the contract date.
    Excepted tax, as used in this clause, means social security or other 
employment taxes, net income and franchise taxes, excess profits taxes, 
capital stock taxes, transportation taxes, unemployment compensation 
taxes, and property taxes. Excepted tax does not include gross income 
taxes levied on or measured by sales or receipts from sales, property 
taxes assessed on completed supplies covered by this contract, or any 
tax assessed on the Contractor's possession of, interest in, or use of 
property, title to which is in the U.S. Government.
    (c) Unless otherwise provided in this contract, the contract price 
includes all applicable taxes and duties, except taxes and duties that 
the Government of the United States and the government of the country 
concerned have agreed shall not be applicable to expenditures in such 
country by or on behalf of the United States.
    (d) The contract price shall be increased by the amount of any 
after-imposed tax or of any tax or duty specifically excluded from the 
contract price by a provision of this contract that the Contractor is 
required to pay or bear, including any interest or penalty, if the 
Contractor states in writing that the contract price does not include 
any contingency for such tax and if liability for such tax, interest, or 
penalty was not incurred through the Contractor's fault, negligence, or 
failure to follow instructions of the Contracting Officer or to comply 
with the provisions of paragraph (i) below.
    (e) The contract price shall be decreased by the amount of any 
after-relieved tax, including any interest or penalty. The Government of 
the United States shall be entitled to interest received by the 
Contractor incident to a refund of taxes to the extent that such 
interest was earned after the Contractor was paid by the Government of 
the United States for such taxes. The Government of the United States 
shall be entitled to repayment of any penalty refunded to the Contractor 
to the extent that the penalty was paid by the Government.
    (f) The contract price shall be decreased by the amount of any tax 
or duty, other than an excepted tax, that was included in the contract 
and that the Contractor is required to pay or bear, or does not obtain a 
refund of, through the Contractor's fault, negligence, or failure to 
follow instructions of the Contracting Officer or to comply with the 
provisions of paragraph (i) below.
    (g) No adjustment shall be made in the contract price under this 
clause unless the amount of the adjustment exceeds $250.
    (h) If the Contractor obtains a reduction in tax liability under the 
United States Internal Revenue Code (Title 26, U.S. Code) because of the 
payment of any tax or duty that either was included in the contract 
price or was the basis of an increase in the contract price, the amount 
of the reduction shall be paid or credited to the Government of the 
United States as the Contracting Officer directs.
    (i) The Contractor shall take all reasonable action to obtain 
exemption from or refund of any taxes or duties, including interest or 
penalty, from which the United States Government, the Contractor, any 
subcontractor, or the transactions or property covered by this contract 
are exempt under the laws of the country concerned or its political 
subdivisions or which the governments of the United States and of the 
country concerned have agreed shall not be applicable to expenditures in 
such country by or on behalf of the United States.
    (j) The Contractor shall promptly notify the Contracting Officer of 
all matters relating to taxes or duties that reasonably may be expected 
to result in either an increase or decrease in the contract price and 
shall take appropriate action as the Contracting Officer directs. The 
contract price shall be equitably adjusted to cover the costs of action 
taken by the Contractor at the direction of the Contracting Officer, 
including any interest, penalty, and reasonable attorneys' fees.

[[Page 202]]

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 52799, Dec. 21, 1990]



Sec. 52.229-7  Taxes--Fixed-Price Contracts With Foreign Governments.

    As prescribed in 29.402-1(b), insert the following clause:

    Taxes--Fixed-Price Contracts With Foreign Governments (JAN 1991)

    (a) Contract date, as used in this clause, means the date set for 
bid opening or, if this is a negotiated contract or a modification, the 
effective date of this contract or modification.
    (b) The contract price, including the prices in any subcontracts 
under this contract, does not include any tax or duty that the 
Government of the United States and the Government of ____ [insert name 
of the foreign government] have agreed shall not apply to expenditures 
made by the United States in ____ [insert name of country], or any tax 
or duty not applicable to this contract or any subcontracts under this 
contract, pursuant to the laws of ____ [insert name of country]. If any 
such tax or duty has been included in the contract price, through error 
or otherwise, the contract price shall be correspondingly reduced.
    (c) If, after the contract date, the Government of the United States 
and the Government of ____ [insert name of the foreign government] agree 
that any tax or duty included in the contract price shall not apply to 
expenditures by the United States in ____ [insert name of country], the 
contract price shall be reduced accordingly.
    (d) No adjustment shall be made in the contract price under this 
clause unless the amount of the adjustment exceeds $250.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 52799, Dec. 21, 1990]



Sec. 52.229-8  Taxes--Foreign Cost-Reimbursement Contracts.

    As prescribed in 29.402-2(a), insert the following clause:

         Taxes--Foreign Cost-Reimbursement Contracts (MAR 1990)

    (a) Any tax or duty from which the United States Government is 
exempt by agreement with the Government of ____ [insert name of the 
foreign government], or from which the Contractor or any subcontractor 
under this contract is exempt under the laws of ____ [insert name of 
country], shall not constitute an allowable cost under this contract.
    (b) If the Contractor or subcontractor under this contract obtains a 
foreign tax credit that reduces its Federal income tax liability under 
the United States Internal Revenue Code (Title 26, U.S.C.) because of 
the payment of any tax or duty that was reimbursed under this contract, 
the amount of the reduction shall be paid or credited at the time of 
such offset to the Government of the United States as the Contracting 
Officer directs.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 3889, Feb. 5, 1990]



Sec. 52.229-9  Taxes--Cost-Reimbursement Contracts With Foreign Governments.

    As prescribed in 29.402-2(b), insert the following clause:

 Taxes--Cost-Reimbursement Contracts With Foreign Governments (MAR 1990)

    (a) Any tax or duty from which the United States Government is 
exempt by agreement with the Government of ____ [insert name of the 
foreign government], or from which any subcontractor under this contract 
is exempt under the laws of ____ [insert name of country], shall not 
constitute an allowable cost under this contract.
    (b) If any subcontractor obtains a foreign tax credit that reduces 
its Federal income tax liability under the United States Internal 
Revenue Code (Title 26, U.S.C.) because of the payment of any tax or 
duty that was reimbursed under this contract, the amount of the 
reduction shall be paid (not credited to the contract) to the Treasurer 
of the United States at the time the Federal income tax return is filed.

                             (End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 55 FR 3889, Feb. 5, 1990]



Sec. 52.229-10  State of New Mexico Gross Receipts and Compensating Tax.

    As prescribed in 29.401-6(b), insert the following clause:

   State of New Mexico Gross Receipts and Compensating Tax (OCT 1988)

    (a) Within thirty (30) days after award of this contract, the 
Contractor shall advise the State of New Mexico of this contract by 
registering with the State of New Mexico, Taxation and Revenue 
Department, Revenue Division, pursuant to the Tax Administration Act of 
the State of New Mexico and shall identify the contract number.

[[Page 203]]

    (b) The Contractor shall pay the New Mexico gross receipts taxes, 
pursuant to the Gross Receipts and Compensating Tax Act of New Mexico, 
assessed against the contract fee and costs paid for performance of this 
contract, or of any part or portion thereof, within the State of New 
Mexico. The allowability of any gross receipts taxes or local option 
taxes lawfully paid to the State of New Mexico by the Contractor or its 
subcontractors will be determined in accordance with the Allowable Cost 
and Payment clause of this contract except as provided in paragraph (d) 
of this clause.
    (c) The Contractor shall submit applications for Nontaxable 
Transaction Certificates, Form CSR-3C, to the State of New Mexico 
Taxation and Revenue Department, Revenue Division, P.O. Box 630, Santa 
Fe, New Mexico 87509. When the Type 15 Nontaxable Transaction 
Certificate is issued by the Revenue Division, the Contractor shall use 
these certificates strictly in accordance with this contract, and the 
agreement between the (*____) and the New Mexico Taxation and Revenue 
Department.
    (d) The Contractor shall provide Type 15 Nontaxable Transaction 
Certificates to each vendor in New Mexico selling tangible personal 
property to the Contractor for use in the performance of this contract. 
Failure to provide a Type 15 Nontaxable Transaction Certificate to 
vendors will result in the vendor's liability for the gross receipt 
taxes and those taxes, which are then passed on to the Contractor, shall 
not be reimbursable as an allowable cost by the Government.
    (e) The Contractor shall pay the New Mexico compensating user tax 
for any tangible personal property which is purchased pursuant to a 
Nontaxable Transaction Certificate if such property is not used for 
Federal purposes.
    (f) Out-of-state purchase of tangible personal property by the 
Contractor which would be otherwise subject to compensation tax shall be 
governed by the principles of this clause. Accordingly, compensating tax 
shall be due from the Contractor only if such property is not used for 
Federal purposes.
    (g) The (*____) may receive information regarding the Contractor 
from the Revenue Division of the New Mexico Taxation and Revenue 
Department and, at the discretion of the (*____), may participate in any 
matters or proceedings pertaining to this clause or the above-mentioned 
agreement. This shall not preclude the Contractor from having its own 
representative nor does it obligate the (*____) to represent its 
Contractor.
    (h) The Contractor agrees to insert the substance of this clause, 
including this paragraph (h), in each subcontract which meets the 
criteria in 29.401-6(b) (1) through (3) of the Federal Acquisition 
Regulation, 48 CFR part 29.
    (i) Paragraphs (a) through (h) of this clause shall be null and void 
should the Agreement referred to in paragraph (c) of this clause be 
terminated; provided, however, that such termination shall not nullify 
obligations already incurred prior to the date of termination.

(*Insert appropriate agency name in blanks.)

                             (End of clause)

[53 FR 34229, Sept. 2, 1988; 53 FR 36028, Sept. 16, 1988]



Sec. 52.230-1  Cost Accounting Standards Notices and Certification.

    As prescribed in 30.201-3, insert the following provisions:

     Cost Accounting Standards Notices and Certification (APR 1998)

    Note: This notice does not apply to small businesses or foreign 
governments. This notice is in three parts, identified by Roman numerals 
I through III.
    Offerors shall examine each part and provide the requested 
information in order to determine Cost Accounting Standards (CAS) 
requirements applicable to any resultant contract.

    If the offeror is an educational institution, Part II does not apply 
unless the contemplated contract will be subject to full or modified CAS 
coverage pursuant to 48 CFR 9903.201-2(c)(5) or 9903.201-2(c)(6), 
respectively.

  I. Disclosure Statement--Cost Accounting Practices and Certification

    (a) Any contract in excess of $500,000 resulting from this 
solicitation will be subject to the requirements of the Cost Accounting 
Standards Board (48 CFR Chapter 99), except for those contracts which 
are exempt as specified in 48 CFR 9903.201-1.
    (b) Any offeror submitting a proposal which, if accepted, will 
result in a contract subject to the requirements of 48 CFR chapter 99 
must, as a condition of contracting, submit a Disclosure Statement as 
required by 48 CFR 9903.202. When required, the Disclosure Statement 
must be submitted as a part of the offeror's proposal under this 
solicitation unless the offeror has already submitted a Disclosure 
Statement disclosing the practices used in connection with the pricing 
of this proposal. If an applicable Disclosure Statement has already been 
submitted, the offeror may satisfy the requirement for submission by 
providing the information requested in paragraph (c) of Part I of this 
provision.
    CAUTION: In the absence of specific regulations or agreement, a 
practice disclosed in a Disclosure Statement shall not, by virtue

[[Page 204]]

of such disclosure, be deemed to be a proper, approved, or agreed-to 
practice for pricing proposals or accumulating and reporting contract 
performance cost data.
    (c) Check the appropriate box below:
    {time}  (1) Certificate of Concurrent Submission of Disclosure 
Statement. The offeror hereby certifies that, as a part of the offer, 
copies of the Disclosure Statement have been submitted as follows: (i) 
original and one copy to the cognizant Administrative Contracting 
Officer (ACO) or cognizant Federal agency official authorized to act in 
that capacity (Federal official), as applicable, and (ii) one copy to 
the cognizant Federal auditor.
    (Disclosure must be on Form No. CASB DS-1 or CASB DS-2, as 
applicable. Forms may be obtained from the cognizant ACO or Federal 
official and/or from the loose-leaf version of the Federal Acquisition 
Regulation.)

Date of Disclosure Statement:
_______________________________________________________________________

Name and Address of Cognizant ACO or Federal Official Where Filed:

_______________________________________________________________________

    The offeror further certifies that the practices used in estimating 
costs in pricing this proposal are consistent with the cost accounting 
practices disclosed in the Disclosure Statement.
    {time}  (2) Certificate of Previously Submitted Disclosure 
Statement. The offeror hereby certifies that the required Disclosure 
Statement was filed as follows:

Date of Disclosure Statement:
_______________________________________________________________________

Name and Address of Cognizant ACO or Federal Official Where Filed:

_______________________________________________________________________

    The offeror further certifies that the practices used in estimating 
costs in pricing this proposal are consistent with the cost accounting 
practices disclosed in the applicable Disclosure Statement.
    {time}  (3) Certificate of Monetary Exemption. The offeror hereby 
certifies that the offeror, together with all divisions, subsidiaries, 
and affiliates under common control, did not receive net awards of 
negotiated prime contracts and subcontracts subject to CAS totaling more 
than $25 million (of which at least one award exceeded $1 million) in 
the cost accounting period immediately preceding the period in which 
this proposal was submitted. The offeror further certifies that if such 
status changes before an award resulting from this proposal, the offeror 
will advise the Contracting Officer immediately.
    {time}  (4) Certificate of Interim Exemption. The offeror hereby 
certifies that (i) the offeror first exceeded the monetary exemption for 
disclosure, as defined in (3) of this subsection, in the cost accounting 
period immediately preceding the period in which this offer was 
submitted and (ii) in accordance with 48 CFR 9903.202-1, the offeror is 
not yet required to submit a Disclosure Statement. The offeror further 
certifies that if an award resulting from this proposal has not been 
made within 90 days after the end of that period, the offeror will 
immediately submit a revised certificate to the Contracting Officer, in 
the form specified under subparagraph (c)(1) or (c)(2) of Part I of this 
provision, as appropriate, to verify submission of a completed 
Disclosure Statement.
    CAUTION: Offerors currently required to disclose because they were 
awarded a CAS-covered prime contract or subcontract of $25 million or 
more in the current cost accounting period may not claim this exemption 
(4). Further, the exemption applies only in connection with proposals 
submitted before expiration of the 90-day period following the cost 
accounting period in which the monetary exemption was exceeded.

    II. Cost Accounting Standards--Eligibility for Modified Contract 
                                Coverage

    If the offeror is eligible to use the modified provisions of 48 CFR 
9903.201-2(b) and elects to do so, the offeror shall indicate by 
checking the box below. Checking the box below shall mean that the 
resultant contract is subject to the Disclosure and Consistency of Cost 
Accounting Practices clause in lieu of the Cost Accounting Standards 
clause.
    {time}  The offeror hereby claims an exemption from the Cost 
Accounting Standards clause under the provisions of 48 CFR 9903.201-2(b) 
and certifies that the offeror is eligible for use of the Disclosure and 
Consistency of Cost Accounting Practices clause because during the cost 
accounting period immediately preceding the period in which this 
proposal was submitted, the offeror received less than $25 million in 
awards of CAS-covered prime contracts and subcontracts, or the offeror 
did not receive a single CAS-covered award exceeding $1 million. The 
offeror further certifies that if such status changes before an award 
resulting from this proposal, the offeror will advise the Contracting 
Officer immediately.
    CAUTION: An offeror may not claim the above eligibility for modified 
contract coverage if this proposal is expected to result in the award of 
a CAS-covered contract of $25 million or more or if, during its current 
cost accounting period, the offeror has been awarded a single CAS-
covered prime contract or subcontract of $25 million or more.

    III. Additional Cost Accounting Standards Applicable to Existing 
                                Contracts

    The offeror shall indicate below whether award of the contemplated 
contract would, in accordance with subparagraph (a)(3) of the Cost 
Accounting Standards clause, require a

[[Page 205]]

change in established cost accounting practices affecting existing 
contracts and subcontracts.
    {time}  Yes {time}  No

                           (End of provision)

    Alternate I (APR 1996). As prescribed in 30.201-3(b), add the 
following subparagraph (c)(5) to Part I of the basic provision:

    {time}  (5) Certificate of Disclosure Statement Due Date by 
Educational Institution. If the offeror is an educational institution 
that, under the transition provisions of 48 CFR 9903.202-1(f), is or 
will be required to submit a Disclosure Statement after receipt of this 
award, the offeror hereby certifies that (check one and complete):

    {time}  (i) A Disclosure Statement Filing Due Date of 
__________________ has been established with the cognizant Federal 
agency.

       (ii) The Disclosure Statement will be submitted within the 6-
month period ending ______________ months after receipt of this award.
Name and Address of Cognizant ACO or Federal Official Where Disclosure 
          Statement is to be Filed:
_______________________________________________________________________

[57 FR 39591, Aug. 31, 1992; 57 FR 43409, 43495, Sept. 21, 1992, as 
amended at 59 FR 67043, Dec. 28, 1994; 61 FR 18918, Apr. 29, 1996; 63 FR 
9061, Feb. 23, 1998]



Sec. 52.230-2  Cost Accounting Standards.

    As prescribed in 30.201-4(a), insert the following clause:

                  Cost Accounting Standards (APR 1998)

    (a) Unless the contract is exempt under 48 CFR 9903.201-1 and 
9903.201-2, the provisions of 48 CFR part 9903 are incorporated herein 
by reference and the Contractor, in connection with this contract, 
shall--
    (1) (CAS-covered Contracts Only) By submission of a Disclosure 
Statement, disclose in writing the Contractor's cost accounting 
practices as required by 48 CFR 9903.202-1 through 9903.202-5, including 
methods of distinguishing direct costs from indirect costs and the basis 
used for allocating indirect costs. The practices disclosed for this 
contract shall be the same as the practices currently disclosed and 
applied on all other contracts and subcontracts being performed by the 
Contractor and which contain a Cost Accounting Standards (CAS) clause. 
If the Contractor has notified the Contracting Officer that the 
Disclosure Statement contains trade secrets and commercial or financial 
information which is privileged and confidential, the Disclosure 
Statement shall be protected and shall not be released outside of the 
Government.
    (2) Follow consistently the Contractor's cost accounting practices 
in accumulating and reporting contract performance cost data concerning 
this contract. If any change in cost accounting practices is made for 
the purposes of any contract or subcontract subject to CAS requirements, 
the change must be applied prospectively to this contract and the 
Disclosure Statement must be amended accordingly. If the contract price 
or cost allowance of this contract is affected by such changes, 
adjustment shall be made in accordance with subparagraph (a)(4) or 
(a)(5) of this clause, as appropriate.
    (3) Comply with all CAS, including any modifications and 
interpretations indicated thereto contained in 48 CFR part 9904 in 
effect on the date of award of this contract or, if the Contractor has 
submitted cost or pricing data, on the date of final agreement on price 
as shown on the Contractor's signed certificate of current cost or 
pricing data. The Contractor shall also comply with any CAS (or 
modifications to CAS) which hereafter become applicable to a contract or 
subcontract of the Contractor. Such compliance shall be required 
prospectively from the date of applicability to such contract or 
subcontract.
    (4)(i) Agree to an equitable adjustment as provided in the Changes 
clause of this contract if the contract cost is affected by a change 
which, pursuant to subparagraph (a)(3) of this clause, the Contractor is 
required to make to the Contractor's established cost accounting 
practices.
    (ii) Negotiate with the Contracting Officer to determine the terms 
and conditions under which a change may be made to a cost accounting 
practice, other than a change made under other provisions of 
subparagraph (a)(4) of this clause; provided that no agreement may be 
made under this provision that will increase costs paid by the United 
States.
    (iii) When the parties agree to a change to a cost accounting 
practice, other than a change under subdivision (a)(4)(i) of this 
clause, negotiate an equitable adjustment as provided in the Changes 
clause of this contract.
    (5) Agree to an adjustment of the contract price or cost allowance, 
as appropriate, if the Contractor or a subcontractor fails to comply 
with an applicable Cost Accounting Standard, or to follow any cost 
accounting practice consistently and such failure results in any 
increased costs paid by the United States. Such adjustment shall provide 
for recovery of the increased costs to the United States, together with 
interest thereon computed at the annual rate established under section 
6621 of the Internal Revenue Code of 1986 (26 U.S.C. 6621) for such 
period, from the time the payment by the United States was made to the 
time the adjustment is effected.

[[Page 206]]

In no case shall the Government recover costs greater than the increased 
cost to the Government, in the aggregate, on the relevant contracts 
subject to the price adjustment, unless the Contractor made a change in 
its cost accounting practices of which it was aware or should have been 
aware at the time of price negotiations and which it failed to disclose 
to the Government.
    (b) If the parties fail to agree whether the Contractor or a 
subcontractor has complied with an applicable CAS in 48 CFR part 9904 or 
a CAS rule or regulation in 48 CFR part 9903 and as to any cost 
adjustment demanded by the United States, such failure to agree will 
constitute a dispute under the Contract Disputes Act (41 U.S.C. 601).
    (c) The Contractor shall permit any authorized representatives of 
the Government to examine and make copies of any documents, papers, or 
records relating to compliance with the requirements of this clause.
    (d) The Contractor shall include in all negotiated subcontracts 
which the Contractor enters into, the substance of this clause, except 
paragraph (b), and shall require such inclusion in all other 
subcontracts, of any tier, including the obligation to comply with all 
CAS in effect on the subcontractor's award date or if the subcontractor 
has submitted cost or pricing data, on the date of final agreement on 
price as shown on the subcontractor's signed Certificate of Current Cost 
or Pricing Data. If the subcontract is awarded to a business unit which 
pursuant to 48 CFR 9903.201-2 is subject to other types of CAS coverage, 
the substance of the applicable clause set forth in subsection 30.201-4 
of the Federal Acquisition Regulation shall be inserted. This 
requirement shall apply only to negotiated subcontracts in excess of 
$500,000, except that the requirement shall not apply to negotiated 
subcontracts otherwise exempt from the requirement to include a CAS 
clause as specified in 48 CFR 9903.201-1.

                             (End of clause)

[57 FR 39592, Aug. 31, 1992; 57 FR 45878, Oct. 5, 1992, as amended at 61 
FR 18919, Apr. 29, 1996; 63 FR 9054, Feb. 23, 1998]



Sec. 52.230-3  Disclosure and Consistency of Cost Accounting Practices.

    As prescribed in 30.201-4(b)(1), insert the following clause:

   Disclosure and Consistency of Cost Accounting Practices (APR 1998)

    (a) The Contractor, in connection with this contract, shall--
    (1) Comply with the requirements of 48 CFR 9904.401, Consistency in 
Estimating, Accumulating, and Reporting Costs; 48 CFR 9904.402, 
Consistency in Allocating Costs Incurred for the Same Purpose; 48 CFR 
9904.405, Accounting for Unallowable Costs; and 48 CFR 9904.406, Cost 
Accounting Standard-Cost Accounting Period, in effect on the date of 
award of this contract as indicated in 48 CFR part 9904.
    (2) (CAS-covered Contracts Only) If it is a business unit of a 
company required to submit a Disclosure Statement, disclose in writing 
its cost accounting practices as required by 48 CFR 9903.202-1 through 
9903.202-5. If the Contractor has notified the Contracting Officer that 
the Disclosure Statement contains trade secrets and commercial or 
financial information which is privileged and confidential, the 
Disclosure Statement shall be protected and shall not be released 
outside of the Government.
    (3)(i) Follow consistently the Contractor's cost accounting 
practices. A change to such practices may be proposed, however, by 
either the Government or the Contractor, and the Contractor agrees to 
negotiate with the Contracting Officer the terms and conditions under 
which a change may be made. After the terms and conditions under which 
the change is to be made have been agreed to, the change must be applied 
prospectively to this contract, and the Disclosure Statement, if 
affected, must be amended accordingly.
    (ii) The Contractor shall, when the parties agree to a change to a 
cost accounting practice and the Contracting Officer has made the 
finding required in 48 CFR 9903.201-6(b), that the change is desirable 
and not detrimental to the interests of the Government, negotiate an 
equitable adjustment as provided in the Changes clause of this contract. 
In the absence of the required finding, no agreement may be made under 
this contract clause that will increase costs paid by the United States.
    (4) Agree to an adjustment of the contract price or cost allowance, 
as appropriate, if the Contractor or a subcontractor fails to comply 
with the applicable CAS or to follow any cost accounting practice, and 
such failure results in any increased costs paid by the United States. 
Such adjustment shall provide for recovery of the increased costs to the 
United States together with interest thereon computed at the annual rate 
of interest established under the Internal Revenue Code of 1986 (26 
U.S.C. 6621), from the time the payment by the United States was made to 
the time the adjustment is effected.
    (b) If the parties fail to agree whether the Contractor has complied 
with an applicable CAS, rule, or regulation as specified in 48 CFR parts 
9903 and 9904 and as to any cost adjustment demanded by the United 
States, such failure to agree will constitute a dispute under the 
Contract Disputes Act (41 U.S.C. 601).
    (c) The Contractor shall permit any authorized representatives of 
the Government

[[Page 207]]

to examine and make copies of any documents, papers, and records 
relating to compliance with the requirements of this clause.
    (d) The Contractor shall include in all negotiated subcontracts, 
which the Contractor enters into, the substance of this clause, except 
paragraph (b), and shall require such inclusion in all other 
subcontracts of any tier, except that--
    (1) If the subcontract is awarded to a business unit which pursuant 
to 48 CFR 9903.201-2 is subject to other types of CAS coverage, the 
substance of the applicable clause set forth in subsection 30.201-4 of 
the Federal Acquisition Regulation shall be inserted.
    (2) This requirement shall apply only to negotiated subcontracts in 
excess of $500,000.
    (3) The requirement shall not apply to negotiated subcontracts 
otherwise exempt from the requirement to include a CAS clause as 
specified in 48 CFR 9903.201-1.

                             (End of clause)

[57 FR 39592, Aug. 31, 1992; 57 FR 43495, Sept. 21, 1992, as amended at 
59 FR 67044, Dec. 28, 1994; 61 FR 18919, Apr. 29, 1996; 63 FR 9054, Feb. 
23, 1998]



Sec. 52.230-4  Consistency in Cost Accounting Practices.

    As prescribed in 30.201-4(c), insert the following clause:

           Consistency in Cost Accounting Practices (AUG 1992)

    The Contractor agrees that it will consistently follow the cost 
accounting practices disclosed on Form CASB DS-1 in estimating, 
accumulating and reporting costs under this contract. In the event the 
Contractor fails to follow such practices, it agrees that the contract 
price shall be adjusted, together with interest, if such failure results 
in increased cost paid by the U.S. Government. Interest shall be 
computed at the annual rate of interest established under section 6621 
of the Internal Revenue Code of 1986 (26 U.S.C. 6621) from the time 
payment by the Government was made to the time adjustment is effected. 
The Contractor agrees that the Disclosure Statement filed with the U.K. 
Ministry of Defence shall be available for inspection and use by 
authorized representatives of the United States Government.

                             (End of clause)

[57 FR 39593, Aug. 31, 1992]



Sec. 52.230-5  Cost Accounting Standards--Educational Institution.

    As prescribed in 30.201-4(e), insert the following clause:

      Cost Accounting Standards--Educational Institution (APR 1998)

    (a) Unless the contract is exempt under 48 CFR 9903.201-1 and 
9903.201-2, the provisions of 48 CFR part 9903 are incorporated herein 
by reference and the Contractor, in connection with this contract, 
shall--
    (1) (CAS-covered contracts only). If a business unit of an 
educational institution required to submit a Disclosure Statement, 
disclose in writing the Contractor's cost accounting practices as 
required by 48 CFR 9903.202-1 through 9903.202-5, including methods of 
distinguishing direct costs from indirect costs and the basis used for 
accumulating and allocating indirect costs. The practices disclosed for 
this contract shall be the same as the practices currently disclosed and 
applied on all other contracts and subcontracts being performed by the 
Contractor and which contain a Cost Accounting Standards (CAS) clause. 
If the Contractor has notified the Contracting Officer that the 
Disclosure Statement contains trade secrets, and commercial or financial 
information which is privileged and confidential, the Disclosure 
Statement shall be protected and shall not be released outside of the 
Government.
    (2) Follow consistently the Contractor's cost accounting practices 
in accumulating and reporting contract performance cost data concerning 
this contract. If any change in cost accounting practices is made for 
the purposes of any contract or subcontract subject to CAS requirements, 
the change must be applied prospectively to this contract and the 
Disclosure Statement, if required, must be amended accordingly. If an 
accounting principle change mandated under Office of Management and 
Budget (OMB) Circular A-21, Cost Principles for Educational 
Institutions, requires that a change in the Contractor's cost accounting 
practices be made after the date of this contract award, the change must 
be applied prospectively to this contract and the Disclosure Statement, 
if required, must be amended accordingly. If the contract price or cost 
allowance of this contract is affected by such changes, adjustment shall 
be made in accordance with subparagraph (a)(4) or (a)(5) of this clause, 
as appropriate.
    (3) Comply with all CAS, including any modifications and 
interpretations indicated thereto contained in 48 CFR part 9905 in 
effect on the date of award of this contract or, if the Contractor has 
submitted cost or pricing data, on the date of final agreement on price 
as shown on the Contractor's signed certificate of current cost or 
pricing data. The Contractor shall also comply with any CAS (or 
modifications to CAS) which hereafter become applicable to a contract or 
subcontract of the Contractor. Such compliance shall be required 
prospectively from the date

[[Page 208]]

of applicability to such contract or subcontract.
    (4)(i) Agree to an equitable adjustment as provided in the Changes 
clause of this contract if the contract cost is affected by a change 
which, pursuant to subparagraph (a)(3) of this clause, the Contractor is 
required to make to the Contractor's established cost accounting 
practices.
    (ii) Negotiate with the Contracting Officer to determine the terms 
and conditions under which a change may be made to a cost accounting 
practice, other than a change made under other provisions of 
subparagraph (a)(4) of this clause; provided that no agreement may be 
made under this provision that will increase costs paid by the United 
States.
    (iii) When the parties agree to a change to a cost accounting 
practice, other than a change under subdivision (a)(4)(i) or (a)(4)(iv) 
of this clause, negotiate an equitable adjustment as provided in the 
Changes clause of this contract.
    (iv) Agree to an equitable adjustment as provided in the Changes 
clause of this contract, if the contract cost is materially affected by 
an OMB Circular A-21 accounting principle amendment which, on becoming 
effective after the date of contract award, requires the Contractor to 
make a change to the Contractor's established cost accounting practices.
    (5) Agree to an adjustment of the contract price or cost allowance, 
as appropriate, if the Contractor or a subcontractor fails to comply 
with an applicable Cost Accounting Standard, or to follow any cost 
accounting practice consistently and such failure results in any 
increased costs paid by the United States. Such adjustment shall provide 
for recovery of the increased costs to the United States, together with 
interest thereon computed at the annual rate established under section 
6621 of the Internal Revenue Code of 1986 (26 U.S.C. 6621) for such 
period, from the time the payment by the United States was made to the 
time the adjustment is effected. In no case shall the Government recover 
costs greater than the increased cost to the Government, in the 
aggregate, on the relevant contracts subject to the price adjustment, 
unless the Contractor made a change in its cost accounting practices of 
which it was aware or should have been aware at the time of price 
negotiations and which it failed to disclose to the Government.
    (b) If the parties fail to agree whether the Contractor or a 
subcontractor has complied with an applicable CAS or a CAS rule or 
regulation in 48 CFR part 9903, and as to any cost adjustment demanded 
by the United States, such failure to agree will constitute a dispute 
under the Contract Disputes Act (41 U.S.C. 601).
    (c) The Contractor shall permit any authorized representatives of 
the Government to examine and make copies of any documents, papers, or 
records relating to compliance with the requirements of this clause.
    (d) The Contractor shall include in all negotiated subcontracts 
which the Contractor enters into, the substance of this clause, except 
paragraph (b), and shall require such inclusion in all other 
subcontracts, of any tier, including the obligation to comply with all 
applicable CAS in effect on the subcontractor's award date or, if the 
subcontractor has submitted cost or pricing data, on the date of final 
agreement on price as shown on the subcontractor's signed Certificate of 
Current Cost or Pricing Data, except that--
    (1) If the subcontract is awarded to a business unit which pursuant 
to 48 CFR 9903.201-2 is subject to other types of CAS coverage, the 
substance of the applicable clause set forth in 48 CFR 9903.201-4 shall 
be inserted;
    (2) This requirement shall apply only to negotiated subcontracts in 
excess of $500,000; and
    (3) The requirement shall not apply to negotiated subcontracts 
otherwise exempt from the requirement to include a CAS clause as 
specified in 48 CFR 9903.201-1.

                             (End of clause)

[61 FR 18919, Apr. 29, 1996, as amended at 63 FR 9061, Feb. 23, 1998]



Sec. 52.230-6  Administration of Cost Accounting Standards

    As prescribed in 30.201-4(d)(1), insert the following clause:

         Administration of Cost Accounting Standards (APR 1996)

    For the purpose of administering the Cost Accounting Standards (CAS) 
requirements under this contract, the Contractor shall take the steps 
outlined in paragraphs (a) through (g) of this clause:
    (a) Submit to the Contracting Officer a description of any cost 
accounting practice change, the total potential impact of the change on 
contracts containing a CAS clause, and a general dollar magnitude of the 
change which identifies the potential shift of costs between CAS-covered 
contracts by contract type (i.e., firm-fixed-price, incentive, cost-
plus-fixed fee, etc.) and other contractor business activity. As related 
to CAS-covered contracts, the analysis should identify the potential 
impact on funds of the various Agencies/Departments (i.e., Department of 
Energy, National Aeronautics and Space Administration, Army, Navy, Air 
Force, other Department of Defense, other Government) as follows:
    (1) For any change in cost accounting practices required in 
accordance with subparagraph (a)(3) and subdivision (a)(4)(i) of the 
clause at FAR 52.230-2, Cost Accounting

[[Page 209]]

Standards; or subparagraph (a)(3) and subdivisions (a)(4)(i) or 
(a)(4)(iv) of the clause at FAR 52.230-5, Cost Accounting Standards--
Educational Institution; within 60 days (or such other date as may be 
mutually agreed to) after award of a contract requiring this change.
    (2) For any change in cost accounting practices proposed in 
accordance with subdivision (a)(4) (ii) or (iii) of the clauses at FAR 
52.230-2, Cost Accounting Standards, and FAR 52.230-5, Cost Accounting 
Standards--Educational Institution; or with subparagraph (a)(3) of the 
clause at FAR 52.230-3, Disclosure and Consistency of Cost Accounting 
Practices, not less than 60 days (or such other date as may be mutually 
agreed to) before the effective date of the proposed change.
    (3) For any failure to comply with an applicable CAS or to follow a 
disclosed practice (as contemplated by subparagraph (a)(5) at FAR 
52.230-2, Cost Accounting Standards, and FAR 52.230-5, Cost Accounting 
Standards--Educational Institution; or by subparagraph (a)(4) at FAR 
52.230-3, Disclosure and Consistency of Cost Accounting Practice):
    (i) Within 60 days (or such other date as may be mutually agreed to) 
after the date of agreement with the initial finding of noncompliance, 
or
    (ii) In the event of Contractor disagreement with the initial 
finding of noncompliance, within 60 days of the date the Contractor is 
notified by the Contracting Officer of the determination of 
noncompliance.
    (b) After an ACO, or cognizant Federal agency official, 
determination of materiality, submit a cost impact proposal in the form 
and manner specified by the Contracting Officer within 60 days (or such 
other date as may be mutually agreed to) after the date of determination 
of the adequacy and compliance of a change submitted pursuant to 
paragraph (a) of this clause. The cost impact proposal shall be in 
sufficient detail to permit evaluation, determination, and negotiation 
of the cost impact upon each separate CAS-covered contract and 
subcontract.
    (1) Cost impact proposals submitted for changes in cost accounting 
practices required in accordance with subparagraph (a)(3) and 
subdivision (a)(4)(i) of the clause at FAR 52.230-2, Cost Accounting 
Standards; or subparagraph (a)(3) and subdivisions (a)(4)(i) or 
(a)(4)(iv) of the clause at FAR 52.230-5, Cost Accounting Standards--
Educational Institution; shall identify the applicable standard or cost 
principle and all contracts and subcontracts containing the clauses 
entitled Cost Accounting Standards or Cost Accounting Standards--
Educational Institution, which have an award date before the effective 
date of that standard or cost principle.
    (2) Cost imp