Defense Federal Acquisition Regulation Supplement (DFARS) Part 217, Special Contracting Methods, and related clauses at 252.217

Defense Federal Acquisition Regulation Supplement
Part 252—Solicitation Provisions and Contract Clauses

(Revised May 12, 2006)
252.217-7000 Exercise of Option to Fulfill Foreign Military Sales
Commitments.
As prescribed in 217.208-70(a), use the following clause:
EXERCISE OF OPTION TO FULFILL FOREIGN MILITARY SALES
COMMITMENTS (DEC 1991)
(a) The Government may exercise the option(s) of this contract to fulfill foreign
military sales commitments.
(b) The foreign military sales commitments are for:
(Insert name of country, or
To Be Determined)

(Insert applicable CLIN)
(End of clause)

ALTERNATE I (DEC 1991)
As prescribed in 217.208-70(a)(1), substitute the following paragraph (b) for paragraph
(b) of the basic clause:
(b) On the date the option is exercised, the Government shall identify the foreign
country for the purpose of negotiating any equitable adjustment attributable to foreign
military sales. Failure to agree on an equitable adjustment shall be treated as a
dispute under the Disputes clause of this contract.
252.217-7001 Surge Option.
As prescribed in 217.208-70(b), use the following clause:
SURGE OPTION (AUG 1992)
(a) General. The Government has the option to—
(1) Increase the quantity of supplies or services called for under this contract by
no more than ___ percent; and/or
(2) Accelerate the rate of delivery called for under this contract, at a price or
cost established before contract award or to be established by negotiation as provided in
this clause.
(b) Schedule.
(1) When the Production Surge Plan (DI-MGMT-80969) is included in the
contract, the option delivery schedule shall be the production rate provided with the
Plan. If the Plan was negotiated before contract award, then the negotiated schedule
shall be used.

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(2) If there is no Production Surge Plan in the contract, the Contractor shall,
within 30 days from the date of award, furnish the Contracting Officer a delivery
schedule showing the maximum sustainable rate of delivery for items in this contract.
This delivery schedule shall provide acceleration by month up to the maximum
sustainable rate of delivery achievable within the Contractor's existing facilities,
equipment, and subcontracting structure.
(3) The Contractor shall not revise the option delivery schedule without
approval from the Contracting Officer.
(c) Exercise of option.
(1) The Contracting Officer may exercise this option at any time before
acceptance by the Government of the final scheduled delivery.
(2) The Contracting Officer will provide a preliminary oral or written notice to
the Contractor stating the quantities to be added or accelerated under the terms of this
clause, followed by a contract modification incorporating the transmitted information
and instructions. The notice and modification will establish a not-to-exceed price equal
to the highest contract unit price or cost of the added or accelerated items as of the date
of the notice.
(3) The Contractor will not be required to deliver at a rate greater than the
maximum sustainable delivery rate under paragraph (b)(2) of this clause, nor will the
exercise of this option extend delivery more than 24 months beyond the scheduled final
delivery.
(d) Price negotiation.
(1) Unless the option cost or price was previously agreed upon, the Contractor
shall, within 30 days from the date of option exercise, submit to the Contracting Officer
a cost or price proposal (including a cost breakdown) for the added or accelerated items.
(2) Failure to agree on a cost or price in negotiations resulting from the exercise
of this option shall constitute a dispute concerning a question of fact within the
meaning of the Disputes clause of this contract. However, nothing in this clause shall
excuse the Contractor from proceeding with the performance of the contract, as
modified, while any resulting claim is being settled.
(End of clause)
252.217-7002 Offering Property for Exchange.
As prescribed in 217.7005, use the following provision:
OFFERING PROPERTY FOR EXCHANGE (DEC 1991)
(a) The property described in item number ____________, is being offered in
accordance with the exchange provisions of Section 201(c) of the Federal Property and
Administrative Services Act of 1949, 63 Stat. 384 (40 U.S.C. 481(c)).

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(b) The property is located at
(insert address)
.
Offerors may inspect the property during the period
(insert beginning and ending
dates and insert hours during day)
.
(End of provision)
252.217-7003 Changes.
As prescribed in 217.7104(a), use the following clause:
CHANGES (DEC 1991)
(a) The Contracting Officer may, at any time and without notice to the sureties, by
written change order, make changes within the general scope of any job order issued
under the Master Agreement in—
(1) Drawings, designs, plans, and specifications;
(2) Work itemized;
(3) Place of performance of the work;
(4) Time of commencement or completion of the work; and
(5) Any other requirement of the job order.
(b) If a change causes an increase or decrease in the cost of, or time required for,
performance of the job order, whether or not changed by the order, the Contracting
Officer shall make an equitable adjustment in the price or date of completion, or both,
and shall modify the job order in writing.
(1) Within ten days after the Contractor receives notification of the change, the
Contractor shall submit to the Contracting Officer a request for price adjustment,
together with a written estimate of the increased cost.
(2) The Contracting Officer may grant an extension of this period if the
Contractor requests it within the ten day period.
(3) If the circumstances justify it, the Contracting Officer may accept and grant
a request for equitable adjustment at any later time prior to final payment under the
job order, except that the Contractor may not receive profit on a payment under a late
request.
(c) If the Contractor includes in its claim the cost of property made obsolete or
excess as a result of a change, the Contracting Officer shall have the right to prescribe
the manner of disposition of that property.
(d) Failure to agree to any adjustment shall be a dispute within the meaning of the
Disputes clause.

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(e) Nothing in this clause shall excuse the Contractor from proceeding with the job
order as changed.
(End of clause)
252.217-7004 Job Orders and Compensation.
As prescribed in 217.7104(a), use the following clause:
JOB ORDERS AND COMPENSATION (MAY 2006)
(a) The Contracting Officer shall solicit bids or proposals and make award of job
orders. The issuance of a job order signed by the Contracting Officer constitutes award.
The job order shall incorporate the terms and conditions of the Master Agreement.
(b) Whenever the Contracting Officer determines that a vessel, its cargo or stores,
would be endangered by delay, or whenever the Contracting Officer determines that
military necessity requires that immediate work on a vessel is necessary, the
Contracting Officer may issue a written order to perform that work and the Contractor
hereby agrees to comply with that order and to perform work on such vessel within its
capabilities.
(1) As soon as practicable after the issuance of the order, the Contracting
Officer and the Contractor shall negotiate a price for the work and the Contracting
Officer shall issue a job order covering the work.
(2) The Contractor shall, upon request, furnish the Contracting Officer with a
breakdown of costs incurred by the Contractor and an estimate of costs expected to be
incurred in the performance of the work. The Contractor shall maintain, and make
available for inspection by the Contracting Officer or the Contracting Officer's
representative, records supporting the cost of performing the work.
(3) Failure of the parties to agree upon the price of the work shall constitute a
dispute within the meaning of the Disputes clause of the Master Agreement. In the
meantime, the Contractor shall diligently proceed to perform the work ordered.
(c)(1) If the nature of any repairs is such that their extent and probable cost cannot
be ascertained readily, the Contracting Officer may issue a job order (on a sealed bid or
negotiated basis) to determine the nature and extent of required repairs.
(2) Upon determination by the Contracting Officer of what work is necessary,
the Contractor, if requested by the Contracting Officer, shall negotiate prices for
performance of that work. The prices agreed upon shall be set forth in a modification of
the job order.
(3) Failure of the parties to agree upon the price shall constitute a dispute
under the Disputes clause. In the meantime, the Contractor shall diligently proceed to
perform the work ordered.
(End of clause)

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252.217-7005 Inspection and Manner of Doing Work.
As prescribed in 217.7104(a), use the following clause:
INSPECTION AND MANNER OF DOING WORK (JAN 1997)
(a) The Contractor shall perform work in accordance with the job order, any
drawings and specifications made a part of the job order, and any change or
modification issued under the Changes clause of the Master Agreement.
(b)(1) Except as provided in paragraph (b)(2) of this clause, and unless otherwise
specifically provided in the job order, all operational practices of the Contractor and all
workmanship, material, equipment, and articles used in the performance of work under
the Master Agreement shall be in accordance with the best commercial marine
practices and the rules and requirements of the American Bureau of Shipping, the U.S.
Coast Guard, and the Institute of Electrical and Electronic Engineers, in effect at the
time of Contractor's submission of bid (or acceptance of the job order, if negotiated).
(2) When Navy specifications are specified in the job order, the Contractor shall
follow Navy standards of material and workmanship. The solicitation shall prescribe
the Navy standard whenever applicable.
(c) The Government may inspect and test all material and workmanship at any
time during the Contractor's performance of the work.
(1) If, prior to delivery, the Government finds any material or workmanship is
defective or not in accordance with the job order, in addition to its rights under the
Guarantees clause of the Master Agreement, the Government may reject the defective
or nonconforming material or workmanship and require the Contractor to correct or
replace it at the Contractor's expense.
(2) If the Contractor fails to proceed promptly with the replacement or
correction of the material or workmanship, the Government may replace or correct the
defective or nonconforming material or workmanship and charge the Contractor the
excess costs incurred.
(3) As specified in the job order, the Contractor shall provide and maintain an
inspection system acceptable to the Government.
(4) The Contractor shall maintain complete records of all inspection work and
shall make them available to the Government during performance of the job order and
for 90 days after the completion of all work required.
(d) The Contractor shall not permit any welder to work on a vessel unless the
welder is, at the time of the work, qualified to the standards established by the U.S.
Coast Guard, American Bureau of Shipping, or Department of the Navy for the type of
welding being performed. Qualifications of a welder shall be as specified in the job
order.
(e) The Contractor shall—
(1) Exercise reasonable care to protect the vessel from fire;

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(2) Maintain a reasonable system of inspection over activities taking place in
the vicinity of the vessel's magazines, fuel oil tanks, or storerooms containing
flammable materials;
(3) Maintain a reasonable number of hose lines ready for immediate use on the
vessel at all times while the vessel is berthed alongside the Contractor's pier or in dry
dock or on a marine railway;
(4) Unless otherwise provided in a job order, provide sufficient security patrols
to reasonably maintain a fire watch for protection of the vessel when it is in the
Contractor's custody;
(5) To the extent necessary, clean, wash, and steam out or otherwise make safe,
all tanks under alteration or repair;
(6) Furnish the Contracting Officer or designated representative with a copy of
the “gas-free” or “safe-for-hotwork” certificate, provided by a Marine Chemist or Coast
Guard authorized person in accordance with Occupational Safety and Health
Administration regulations (29 CFR 1915.14) before any hot work is done on a tank;
(7) Treat the contents of any tank as Government property in accordance with
the Government Property (Fixed-Price Contracts) clause; and
(8) Dispose of the contents of any tank only at the direction, or with the
concurrence, of the Contracting Officer.
(f) Except as otherwise provided in the job order, when the vessel is in the custody
of the Contractor or in dry dock or on a marine railway and the temperature is expected
to go as low as 35 oF, the Contractor shall take all necessary steps to—
(1) Keep all hose pipe lines, fixtures, traps, tanks, and other receptacles on the
vessel from freezing; and
(2) Protect the stern tube and propeller hubs from frost damage.
(g) The Contractor shall, whenever practicable—
(1) Perform the required work in a manner that will not interfere with the
berthing and messing of Government personnel attached to the vessel; and
(2) Provide Government personnel attached to the vessel access to the vessel at
all times.
(h) Government personnel attached to the vessel shall not interfere with the
Contractor's work or workers.
(i)(1) The Government does not guarantee the correctness of the dimensions, sizes,
and shapes set forth in any job order, sketches, drawings, plans, or specifications
prepared or furnished by the Government, unless the job order requires that the
Contractor perform the work prior to any opportunity to inspect.

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(2) Except as stated in paragraph (i)(1) of this clause, and other than those
parts furnished by the Government, the Contractor shall be responsible for the
correctness of the dimensions, sizes, and shapes of parts furnished under this
agreement.
(j) The Contractor shall at all times keep the site of the work on the vessel free from
accumulation of waste material or rubbish caused by its employees or the work. At the
completion of the work, unless the job order specifies otherwise, the Contractor shall
remove all rubbish from the site of the work and leave the immediate vicinity of the
work area “broom clean.”
(End of clause)
252.217-7006 Title.
As prescribed in 217.7104(a), use the following clause:
TITLE (DEC 1991)
(a) Unless otherwise provided, title to all materials and equipment to be
incorporated in a vessel in the performance of a job order shall vest in the Government
upon delivery at the location specified for the performance of the work.
(b) Upon completion of the job order, or with the approval of the Contracting Officer
during performance of the job order, all Contractor-furnished materials and equipment
not incorporated in, or placed on, any vessel, shall become the property of the
Contractor, unless the Government has reimbursed the Contractor for the cost of the
materials and equipment.
(c) The vessel, its equipment, movable stores, cargo, or other ship's materials shall
not be considered Government-furnished property.
(End of clause)
252.217-7007 Payments.
As prescribed in 217.7104(a), use the following clause:
PAYMENTS (DEC 1991)
(a) “Progress payments,” as used in this clause, means payments made before
completion of work in progress under a job order.
(b) Upon submission by the Contractor of invoices in the form and number of copies
directed by the Contracting Officer, and as approved by the Contracting Officer, the
Government will make progress payments as work progresses under the job order.
(1) Generally, the Contractor may submit invoices on a semi-monthly basis,
unless expenditures justify a more frequent submission.
(2) The Government need not make progress payments for invoices aggregating
less than $5,000.

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(3) The Contracting Officer shall approve progress payments based on the
value, computed on the price of the job order, of labor and materials incorporated in the
work, materials suitably stored at the site of the work, and preparatory work
completed, less the aggregate of any previous payments.
(4) Upon request, the Contractor will furnish the Contracting Officer any
reports concerning expenditures on the work to date that the Contracting Officer may
require.
(c) The Government will retain until final completion and acceptance of all work
covered by the job order, an amount estimated or approved by the Contracting Officer
under paragraph (b) of this clause. The amount retained will be in accordance with the
rate authorized by Congress for Naval vessel repair contracts at the time of job order
award.
(d) The Contracting Officer may direct that progress payments be based on the
price of the job order as adjusted as a result of change orders under the Changes clause
of the Master Agreement. If the Contracting Officer does not so direct—
(1) Payments of any increases shall be made from time to time after the
amount of the increase is determined under the Changes clause of the Master
Agreement; and
(2) Reductions resulting from decreases shall be made for the purposes of
subsequent progress payments as soon as the amounts are determined under the
Changes clause of the Master Agreement.
(e) Upon completion of the work under a job order and final inspection and
acceptance, and upon submission of invoices in such form and with such copies as the
Contracting Officer may prescribe, the Contractor shall be paid for the price of the job
order, as adjusted pursuant to the Changes clause of the Master Agreement, less any
performance reserves deemed necessary by the Contracting Officer, and less the
amount of any previous payments.
(f) All materials, equipment, or any other property or work in process covered by the
progress payments made by the Government, upon the making of those progress
payments, shall become the sole property of the Government, and are subject to the
provisions of the Title clause of the Master Agreement.
(End of clause)
252.217-7008 Bonds.
As prescribed in 217.7104(a), use the following clause:
BONDS (DEC 1991)
(a) If the solicitation requires an offeror to submit a bid bond, the Offeror may
furnish, instead, an annual bid bond (or evidence thereof) or an annual performance
and payment bond (or evidence thereof).
(b) If the solicitation does not require a bid bond, the Offeror shall not include in the
price any contingency to cover the premium of such a bond.
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(c) Even if the solicitation does not require bonds, the Contracting Officer may
nevertheless require a performance and payment bond, in form, amount, and with a
surety acceptable to the Contracting Officer. Where performance and payment bond is
required, the offer price shall be increased upon the award of the job order in an
amount not to exceed the premium of a corporate surety bond.
(d) If any surety upon any bond furnished in connection with a job order under this
agreement fails to submit requested reports as to its financial condition or otherwise
becomes unacceptable to the Government, the Contracting Officer may require the
Contractor to furnish whatever additional security the Contracting Officer determines
necessary to protect the interests of the Government and of persons supplying labor or
materials in the performance of the work contemplated under the Master Agreement.
(End of clause)
252.217-7009 Default.
As prescribed in 217.7104(a), use the following clause:
DEFAULT (DEC 1991)
(a) The Government may, subject to the provisions of paragraph (b) of this clause,
by written notice of default to the Contractor, terminate the whole or any part of a job
order if the Contractor fails to—
(1) Make delivery of the supplies or to perform the services within the time
specified in a job order or any extension;
(2) Make progress, so as to endanger performance of the job order; or
(3) Perform any of the other provisions of this agreement or a job order.
(b) Except for defaults of subcontractors, the Contractor shall not be liable for any
excess costs if failure to perform the job order arises from causes beyond the control and
without the fault or negligence of the Contractor. Examples of such causes include acts
of God or of the public enemy, acts of the Government in either its sovereign or
contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, freight
embargoes, and unusually severe weather.
(c) If the Contractor's failure to perform is caused by the default of a subcontractor,
and if such default arises out of causes beyond the control of both the Contractor and
subcontractor, and without the fault or negligence of either, the Contractor shall not be
liable for any excess costs for failure to perform, unless the supplies or services to be
furnished by the subcontractor were obtainable from other sources in sufficient time to
permit the Contractor to perform the job order within the time specified.
(d) If the Government terminates the job order in whole or in part as provided in
paragraph (a) of this clause—
(1) The Government may, upon such terms and in such manner as the
Contracting Officer may deem appropriate, arrange for the completion of the work so
terminated, at such plant or plants, including that of the Contractor, as may be
designated by the Contracting Officer.
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(i) The Contractor shall continue the performance of the job order to the
extent not terminated under the provisions of this clause.
(ii) If the work is to be completed at the plant, the Government may use all
tools, machinery, facilities, and equipment of the Contractor determined by the
Contracting Office to be necessary for that purpose.
(iii) If the cost to the Government of the work procured or completed (after
adjusting such cost to exclude the effect of changes in the plans and specifications made
subsequent to the date of termination) exceeds the price fixed for work under the job
order (after adjusting such price on account of changes in the plans and specifications
made before the date of termination), the Contractor, or the Contractor's surety, if any,
shall be liable for such excess.
(2) The Government, in addition to any other rights provided in this clause,
may require the Contractor to transfer title and delivery to the Government, in the
manner and to the extent directed by the Contracting Officer, any completed supplies
and such partially completed supplies and materials, parts, tools, dies, jigs, fixtures,
plans, drawings, information and contract rights (hereinafter called “manufacturing
materials”) as the Contractor has specifically produced or specifically acquired for the
performance of the terminated part of the job order.
(i) The Contractor shall, upon direction of the Contracting Officer, protect
and preserve property in possession of the Contractor in which the Government has an
interest.
(ii) The Government shall pay to the Contractor the job order price for
completed items of work delivered to and accepted by the Government, and the amount
agreed upon by the Contractor and the Contracting Officer for manufacturing materials
delivered to and accepted by the Government, and for the protection and preservation
of property. Failure to agree shall be a dispute concerning a question of fact within the
meaning of the Disputes clause.
(e) If, after notice of termination of the job order, it is determined that the
Contractor was not in default, or that the default was excusable, the rights and
obligations of the parties shall be the same as if the notice of termination had been
issued for the convenience of the Government.
(f) If the Contractor fails to complete the performance of a job order within the time
specified, or any extension, the actual damage to the Government for the delay will be
difficult or impossible to determine.
(1) In lieu of actual damage, the Contractor shall pay to the Government as
fixed, agreed, and liquidated damages for each calendar day of delay the amount, if any,
set forth in the job order (prorated to the nearest hour for fractional days).
(2) If the Government terminates the job order, the Contractor shall be liable,
in addition to the excess costs provided in paragraph (d) of this clause, for liquidated
damages accruing until such time as the Government may reasonably obtain
completion of the work.

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(3) The Contractor shall not be charged with liquidated damages when the
delay arises out of causes beyond the control and without the fault or negligence of the
Contractor. Subject to the provisions of the Disputes clause of the Master Agreement,
the Contracting Officer shall ascertain the facts and the extent of the delay and shall
extend the time for performance when in the judgment of the Contracting Officer, the
findings of fact justify an extension.
(g) 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 under
this agreement.
(End of clause)
252.217-7010 Performance.
As prescribed in 217.7104(a), use the following clause:
PERFORMANCE (DEC 1991)
(a) Upon the award of a job order, the Contractor shall promptly start the work
specified and shall diligently prosecute the work to completion. The Contractor shall
not start work until the job order has been awarded except in the case of emergency
work ordered by the Contracting Officer under the Job Orders and Compensation
clause of the Master Agreement.
(b) The Government shall deliver the vessel described in the job order at the time
and location specified in the job order. Upon completion of the work, the Government
shall accept delivery of the vessel at the time and location specified in the job order.
(c) The Contractor shall, without charge and without specific requirement in a job
order—
(1) Make available at the plant to personnel of the vessel while in dry dock or
on a marine railway, sanitary lavatory and similar facilities acceptable to the
Contracting Officer;
(2) Supply and maintain suitable brows and gangways from the pier, dry dock,
or marine railway to the vessel;
(3) Treat salvage, scrap or other ship's material of the Government resulting
from performance of the work as items of Government-furnished property, in
accordance with the Government Property (Fixed Price Contracts) clause;
(4) Perform, or pay the cost of, any repair, reconditioning or replacement made
necessary as the result of the use by the Contractor of any of the vessel's machinery,
equipment or fittings, including, but not limited to, winches, pumps, rigging, or pipe
lines; and
(5) Furnish suitable offices, office equipment and telephones at or near the site
of the work for the Government's use.
(d) The job order will state whether dock and sea trials are required to determine
whether or not the Contractor has satisfactorily performed the work.
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(1) If dock and sea trials are required, the vessel shall be under the control of
the vessel's commander and crew.
(2) The Contractor shall not conduct dock and sea trials not specified in the job
order without advance approval of the Contracting Officer. Dock and sea trials not
specified in the job order shall be at the Contractor's expense and risk.
(3) The Contractor shall provide and install all fittings and appliances
necessary for dock and sea trials. The Contractor shall be responsible for care,
installation, and removal of instruments and apparatus furnished by the Government
for use in the trials.
(End of clause)
252.217-7011 Access to Vessel.
As prescribed at 217.7104(a), use the following clause:
ACCESS TO VESSEL (DEC 1991)
(a) Upon the request of the Contracting Officer, the Contractor shall grant
admission to the Contractor's facilities and access to vessel, on a non-interference basis,
as necessary to perform their respective responsibilities, to a reasonable number of:
(1) Government and other Government contractor employees (in addition to
those Government employees attached to the vessel); and
(2) Representatives of offerors on other contemplated Government work.
(b) All personnel granted access shall comply with Contractor rules governing
personnel at its shipyard.
(End of clause)
252.217-7012 Liability and Insurance.
As prescribed in 217.7104(a), use the following clause:
LIABILITY AND INSURANCE (AUG 2003)
(a) The Contractor shall exercise its best efforts to prevent accidents, injury, or
damage to all employees, persons, and property, in and about the work, and to the
vessel or part of the vessel upon which work is done.
(b) Loss or damage to the vessel, materials, or equipment.
(1) Unless otherwise directed or approved in writing by the Contracting Officer,
the Contractor shall not carry insurance against any form of loss or damage to the
vessel(s) or to the materials or equipment to which the Government has title or which
have been furnished by the Government for installation by the Contractor. The
Government assumes the risks of loss of and damage to that property.
(2) The Government does not assume any risk with respect to loss or damage
compensated for by insurance or otherwise or resulting from risks with respect to which
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the Contractor has failed to maintain insurance, if available, as required or approved by
the Contracting Officer.
(3) The Government does not assume risk of and will not pay for any costs of
the following:
(i) Inspection, repair, replacement, or renewal of any defects in the vessel(s)
or material and equipment due to—
subcontractors;

(A) Defective workmanship performed by the Contractor or its

(B) Defective materials or equipment furnished by the Contractor or its
subcontracts; or
(C) Workmanship, materials, or equipment which do not conform to the
requirements of the contract, whether or not the defect is latent or whether or not the
nonconformance is the result of negligence.
(ii) Loss, damage, liability, or expense caused by, resulting from, or incurred
as a consequence of any delay or disruption, willful misconduct or lack of good faith by
the Contractor or any of its representatives that have supervision or direction of—
(A) All or substantially all of the Contractor's business; or
plant.

(B) All or substantially all of the Contractor's operation at any one

(4) As to any risk that is assumed by the Government, the Government shall be
subrogated to any claim, demand or cause of action against third parties that exists in
favor of the Contractor. If required by the Contracting Officer, the Contractor shall
execute a formal assignment or transfer of the claim, demand, or cause of action.
(5) No party other than the Contractor shall have any right to proceed directly
against the Government or join the Government as a co-defendant in any action.
(6) Notwithstanding the foregoing, the Contractor shall bear the first $50,000 of
loss or damage from each occurrence or incident, the risk of which the Government
would have assumed under the provisions of this paragraph (b).
(c) Indemnification. The Contractor indemnifies the Government and the vessel
and its owners against all claims, demands, or causes of action to which the
Government, the vessel or its owner(s) might be subject as a result of damage or injury
(including death) to the property or person of anyone other than the Government or its
employees, or the vessel or its owner, arising in whole or in part from the negligence or
other wrongful act of the Contractor or its agents or employees, or any subcontractor, or
its agents or employees.
(1) The Contractor's obligation to indemnify under this paragraph shall not
exceed the sum of $300,000 as a consequence of any single occurrence with respect to
any one vessel.

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(2) The indemnity includes, without limitation, suits, actions, claims, costs, or
demands of any kind, resulting from death, personal injury, or property damage
occurring during the period of performance of work on the vessel or within 90 days after
redelivery of the vessel. For any claim, etc., made after 90 days, the rights of the
parties shall be as determined by other provisions of this agreement and by law. The
indemnity does apply to death occurring after 90 days where the injury was received
during the period covered by the indemnity.
(d) Insurance.
(1) The Contractor shall, at its own expense, obtain and maintain the following
insurance—
(i) Casualty, accident, and liability insurance, as approved by the
Contracting Officer, insuring the performance of its obligations under paragraph (c) of
this clause.
(ii) Workers Compensation Insurance (or its equivalent) covering the
employees engaged on the work.
(2) The Contractor shall ensure that all subcontractors engaged on the work
obtain and maintain the insurance required in paragraph (d)(1) of this clause.
(3) Upon request of the Contracting Officer, the Contractor shall provide
evidence of the insurance required by paragraph (d) of this clause.
(e) The Contractor shall not make any allowance in the job order price for the
inclusion of any premium expense or charge for any reserve made on account of selfinsurance for coverage against any risk assumed by the Government under this clause.
(f) The Contractor shall give the Contracting Officer written notice as soon as
practicable after the occurrence of a loss or damage for which the Government has
assumed the risk.
(1) The notice shall contain full details of the loss or damage.
(2) If a claim or suit is later filed against the Contractor as a result of the event,
the Contractor shall immediately deliver to the Government every demand, notice,
summons, or other process received by the Contractor or its employees or
representatives.
(3) The Contractor shall cooperate with the Government and, upon request,
shall assist in effecting settlements, securing and giving evidence, obtaining the
attendance of witnesses, and in the conduct of suits. The Government shall reimburse
the Contractor for expenses incurred in this effort, other than the cost of maintaining
the Contractor's usual organization.
(4) The Contractor shall not, except at its own expense, voluntarily make any
payment, assume any obligation, or incur any expense other than what would be
imperative for the protection of the vessel(s) at the time of the event.

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(g) In the event or loss of or damage to any vessel(s), material, or equipment which
may result in a claim against the Government under the insurance provisions of this
contract, the Contractor shall promptly notify the Contracting Officer of the loss or
damage. The Contracting Officer may, without prejudice to any other right of the
Government, either—
(1) Order the Contractor to proceed with replacement or repair, in which event
the Contractor shall effect the replacement or repair;
(i) The Contractor shall submit to the Contracting Officer a request for
reimbursement of the cost of the replacement or repair together with whatever
supporting documentation the Contracting Officer may reasonably require, and shall
identify the request as being submitted under the Insurance clause of the agreement.
(ii) If the Government determines that the risk of the loss or damage is
within the scope of the risks assumed by the Government under this clause, the
Government will reimburse the Contractor for the reasonable, allowable cost of the
replacement or repair, plus a reasonable profit (if the work or replacement or repair
was performed by the Contractor) less the deductible amount specified in paragraph (b)
of this clause.
(iii) Payments by the Government to the Contractor under this clause are
outside the scope of and shall not affect the pricing structure of the contract, and are
additional to the compensation otherwise payable to the Contractor under this contract;
or
(2) In the event the Contracting Officer decides that the loss or damage shall
not be replaced or repaired, the Contracting Officer shall—
(i) Modify the contract appropriately, consistent with the reduced
requirements reflected by the unreplaced or unrepaired loss or damage; or
(ii) Terminate the repair of any part or all of the vessel(s) under the
Termination for Convenience of the Government clause of this agreement.
(End of clause)
252.217-7013 Guarantees.
As prescribed in 217.7104(a), use the following clause:
GUARANTEES (DEC 1991)
(a) In the event any work performed or materials furnished by the contractor under
the Master Agreement prove defective or deficient within 90 days from the date of
redelivery of the vessel(s), the Contractor, as directed by the Contracting Officer and at
its own expense, shall correct and repair the deficiency to the satisfaction of the
Contracting Officer.
(b) If the Contractor or any subcontractor has a guarantee for work performed or
materials furnished that exceeds the 90 day period, the Government shall be entitled to
rely upon the longer guarantee until its expiration.

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(c) With respect to any individual work item identified as incomplete at the time of
redelivery of the vessel(s), the guarantee period shall run from the date the item is
completed.
(d) If practicable, the Government shall give the Contractor an opportunity to
correct the deficiency.
(1) If the Contracting Officer determines it is not practicable or is otherwise not
advisable to return the vessel(s) to the Contractor, or the Contractor fails to proceed
with the repairs promptly, the Contracting Officer may direct that the repairs be
performed elsewhere, at the Contractor's expense.
(2) If correction and repairs are performed by other than the Contractor, the
Contracting Officer may discharge the Contractor's liability by making an equitable
deduction in the price of the job order.
(e) The Contractor's liability shall extend for an additional 90 day guarantee period
on those defects or deficiencies that the Contractor corrected.
(f) At the option of the Contracting Officer, defects and deficiencies may be left
uncorrected. In that event, the Contractor and Contracting Officer shall negotiate an
equitable reduction in the job price. Failure to agree upon an equitable reduction shall
constitute a dispute under the Disputes clause of this agreement.
(End of clause)
252.217-7014 Discharge of Liens.
As prescribed in 217.7104(a), use the following clause:
DISCHARGE OF LIENS (DEC 1991)
(a) The Contractor shall immediately discharge, or cause to be discharged, any lien
or right in rem of any kind, other than in favor of the Government, that exists or arises
in connection with work done or material furnished under any job order under this
agreement.
(b) If any lien or right in rem is not immediately discharged, the Government, at the
expense of the Contractor, may discharge, or cause to be discharged, the lien or right.
(End of clause)
252.217-7015 Safety and Health.
As prescribed in 217.7104(a), use the following clause:
SAFETY AND HEALTH (DEC 1991)
Nothing contained in the Master Agreement or any job order shall relieve the
Contractor of any obligations it may have to comply with—
(a) The Occupational Safety and Health Act of 1970 (29 U.S.C. 651, et seq.);
(b) The Safety and Health Regulations for Ship Repairing (29 CFR 1915); or
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(c) Any other applicable Federal, State, and local laws, codes, ordinances, and
regulations.
(End of clause)
252.217-7016 Plant Protection.
As prescribed in 217.7104(a), use the following clause:
PLANT PROTECTION (DEC 1991)
(a) The Contractor shall provide, for the plant and work in process, reasonable
safeguards against all hazards, including unauthorized entry, malicious mischief, theft,
vandalism, and fire.
(b) The Contractor shall also provide whatever additional safeguards are necessary
to protect the plant and work in process from espionage, sabotage, and enemy action.
(1) The Government shall reimburse the Contractor for that portion of the costs
of the additional safeguards that is allocable to the contract in the same manner as if
the Contracting Officer had issued a change order for the additional safeguards.
(2) The costs reimbursed shall not include any overhead allowance, unless the
overhead is incident to the construction or installation of necessary security devices or
equipment.
(c) Upon payment by the Government of the cost of any device or equipment
required or approved under paragraph (b) of this clause, title shall vest in the
Government.
(1) The Contractor shall comply with the instructions of the Contracting Officer
concerning its identification and disposition.
(2) No such device or equipment shall become a fixture as a result of its being
affixed to realty not owned by the Government.
(End of clause)
252.217-7017 Reserved.
252.217-7018 Reserved.
252.217-7019 Reserved.
252.217-7020 Reserved.
252.217-7021 Reserved.
252.217-7022 Reserved.
252.217-7023 Reserved.

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252.217-7024 Reserved.
252.217-7025 Reserved.
252.217-7026 Identification of Sources of Supply.
As prescribed in 217.7303, use the following provision:
IDENTIFICATION OF SOURCES OF SUPPLY (NOV 1995)
(a) The Government is required under 10 U.S.C. 2384 to obtain certain information
on the actual manufacturer or sources of supplies it acquires.
(b) The apparently successful Offeror agrees to complete and submit the following
table before award:
TABLE
Line
Items
(1)
______

National
Stock
Number
(2)
________

Commercial
Source of Supply
Item
Company
Address Part No.
(Y or N)
(3)
(4)
(4)
(5)
__________ _________
_______ ________

Actual
Mfg?
(6)
_______

(1) List each deliverable item of supply and item of technical data.
(2) If there is no national stock number, list “none.”
(3) Use “Y” if the item is a commercial item; otherwise use “N.” If “Y” is listed,
the Offeror need not complete the remaining columns in the table.
(4) For items of supply, list all sources. For technical data, list the source.
(5) For items of supply, list each source's part number for the item.
(6) Use “Y” if the source of supply is the actual manufacturer; “N” if it is not;
and “U” if unknown.
(End of provision)
252.217-7027 Contract Definitization.
As prescribed in 217.7405(b), use the following clause:
CONTRACT DEFINITIZATION (OCT 1998)
(a) A ________________ (insert specific type of contract action) 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 undefinitized contract
action, (2) all clauses required by law on the date of execution of the definitive contract
action, and (3) any other mutually agreeable clauses, terms, and conditions. The
Contractor agrees to submit a _______________ (insert type of proposal; e.g., fixed-price
or cost-and-fee) proposal and cost or pricing data supporting its proposal.

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(b) The schedule for definitizing this contract action is as follows (insert target date
for definitization of the contract action and dates for submission of proposal, beginning
of negotiations, and, if appropriate, submission of the make-or-buy and subcontracting
plans and cost or pricing data):

(c) If agreement on a definitive contract action to supersede this undefinitized
contract action is not reached by the target date in paragraph (b) of this clause, 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
undefinitized contract action 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 paragraph (c)(1) of this clause, all clauses,
terms, and conditions included in this undefinitized contract action shall continue in
effect, except those that by their nature apply only to an undefinitized contract action.
(d) The definitive contract resulting from this undefinitized contract action will
include a negotiated _________________ (insert “cost/price ceiling” or “firm-fixed price”)
in no event to exceed __________ (insert the not-to-exceed amount).
(End of clause)
252.217-7028 Over and Above Work.
As prescribed in 217.7702, use a clause substantially as follows:
OVER AND ABOVE WORK (DEC 1991)
(a) Definitions. As used in this clause—
(1) “Over and above work” means work discovered during the course of
performing overhaul, maintenance, and repair efforts that is—

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(i) Within the general scope of the contract;
and

(ii) Not covered by the line item(s) for the basic work under the contract;
(iii) Necessary in order to satisfactorily complete the contract.

(2) “Work request” means a document prepared by the Contractor which
describes over and above work being proposed.
(b) The Contractor and Administrative Contracting Officer shall mutually agree to
procedures for Government administration and Contractor performance of over and
above work requests. If the parties cannot agree upon the procedures, the
Administrative Contracting Officer has the unilateral right to direct the over and above
work procedures to be followed. These procedures shall, as a minimum, cover—
(1) The format, content, and submission of work requests by the Contractor.
Work requests shall contain data on the type of discrepancy disclosed, the specific
location of the discrepancy, and the estimated labor hours and material required to
correct the discrepancy. Data shall be sufficient to satisfy contract requirements and
obtain the authorization of the Contracting Officer to perform the proposed work;
(2) Government review, verification, and authorization of the work; and
(3) Proposal pricing, submission, negotiation, and definitization.
(c) Upon discovery of the need for over and above work, the Contractor shall
prepare and furnish to the Government a work request in accordance with the agreedto procedures.
(d) The Government shall—
(1) Promptly review the work request;
(2) Verify that the proposed work is required and not covered under the basic
contract line item(s);
(3) Verify that the proposed corrective action is appropriate; and
(4) Authorize over and above work as necessary.
(e) The Contractor shall promptly submit to the Contracting Officer, a proposal for
the over and above work. The Government and Contractor will then negotiate a
settlement for the over and above work. Contract modifications will be executed to
definitize all over and above work.
(f) Failure to agree on the price of over and above work shall be a dispute within the
meaning of the Disputes clause of this contract.
(End of clause)

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252.217-20