48 CFR 1 (parts 52-99) - FAR

Title 48—Federal
Acquisition Regulations
System
(This book contains chapter 1, parts 52 to 99)

Part

CHAPTER 1—Federal

Acquisition Regulation (Continued) ......

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CHAPTER 1—FEDERAL ACQUISITION
REGULATION (CONTINUED)
SUBCHAPTER H—CLAUSES AND FORMS
Part

52
53
54–99

Page

Solicitation provisions and contract clauses ..........
Forms ......................................................................
[Reserved]

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SUBCHAPTER H—CLAUSES AND FORMS
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 Required Sources for Helium and
Helium Usage Data.
52.208–9 Probable cause hearing and determination.
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 Requirements 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 Brand name or equal.
52.211–7 Alternatives to Governmentunique standards.
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.

PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES
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—Text 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 Printed or Copied Double-Sided on
Recycled Paper.
52.204–5 Women-Owned
Business
(Other
Than Small Business).
52.204–6 Data Universal Numbering System
(DUNS) Number.
52.204–7 Central Contractor Registration.
52.205–52.206 [Reserved]
52.207–1 Notice of Cost Comparison (SealedBid).
52.207–2 Notice of Cost Comparison (Negotiated).

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Pt. 52

48 CFR Ch. 1 (10–1–03 Edition)

52.211–17 Delivery of Excess Quantities.
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—52.214–2 [Reserved]
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 [Reserved]
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 [Reserved]
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 [Reserved]
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-orBuy 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 Pension adjustments and asset reversions.
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.
52.216–14 Allowable Cost and Payment—Facilities Use.

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Federal Acquisition Regulation

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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 Notice of total HUBZone set-aside.
52.219–4 Notice of price evaluation preference for HUBZone small business concerns.
52.219–5 Very small business set-aside.
52.219–6 Notice of Total Small Business SetAside.
52.219–7 Notice of Partial Small Business
Set-Aside.
52.219–8 Utilization of 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 Certification Regarding Knowledge
of Child Labor for Listed End Products.
52.222–19 Child Labor—Cooperation with Authorities and Remedies.
52.222–20 Walsh-Healey Public Contracts
Act.
52.222–21 Prohibition of segregated facilities.
52.222–22 Previous Contracts and Compliance Reports.
52.222–23 Notice of Requirement for Affirmative Action to Ensure Equal Employment Opportunity for Construction.
52.222–24 Preaward On-Site Equal Opportunity Compliance Evaluation.
52.222–25 Affirmative Action Compliance.
52.222–26 Equal Opportunity.
52.222–27 Affirmative Action Compliance
Requirements for Construction.
52.222–28 [Reserved]

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52.222–29 Notification of visa denial.
52.222–30 Davis-Bacon Act—price adjustment (None or Separately Specified
Method).
52.222–31 Davis-Bacon Act—Price Adjustment (Percentage Method).
52.222–32 Davis-Bacon Act—Price Adjustment (Actual Method).
52.222–33—52.222–34 [Reserved]
52.222–35 Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam
Era, and Other Eligible Veterans.
52.222–36 Affirmative Action for Workers
With Disabilities.
52.222–37 Employment Reports on Special
Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans.
52.222–38 Compliance with Veterans’ Employment Reporting Requirements.
52.222–39—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 [Reserved]
52.223–1—52.223–2 [Reserved]
52.223–3 Hazardous Material Identification
and Material Safety Data.
52.223–4 Recovered Material Certification.
52.223–5 Pollution Prevention and Right-toKnow Information.
52.223–6 Drug-Free Workplace.
52.223–7 Notice of radioactive materials.
52.223–8 [Reserved]
52.223–9 Estimate of Percentage of Recovered Material Content for EPA-Designated Products.
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 Act—Supplies.
52.225–2 Buy American Act Certificate.
52.225–3 Buy American Act—North American Free Trade Agreement—Israeli
Trade Act.
52.225–4 Buy American Act—North American Free Trade Agreement—Israeli
Trade Act Certificate.
52.225–5 Trade Agreements.
52.225–6 Trade Agreements Certificate.
52.225–7 Waiver of Buy American Act for
Civil Aircraft and Related Articles.
52.225–8 Duty-Free Entry.
52.225–9 Buy American Act—Construction
Materials.
52.225–10 Notice of Buy American Act Requirement— Construction Materials.
52.225–11 Buy American Act—Construction
Materials under Trade Agreements.
52.225–12 Notice of Buy American Act Requirement—
Construction
Materials
under Trade Agreements.
52.225–13 Restrictions on Certain Foreign
Purchases.
52.225–14 Inconsistency
between
English
Version and Translation of Contract.
52.225–15 Sanctioned European Union Country End Products.
52.225–16 Sanctioned European Union Country Services.
52.225–17 Evaluation of Foreign Currency
Offers.
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.
52.227–19 Commercial Computer Software—
Restricted Rights.

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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 WarHazard 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 (State
and Local Adjustments).
52.229–5 [Reserved]
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 Invitation to Propose Performance-Based Payments.
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 Payment by Electronic Funds
Transfer—Central Contractor Registration.
52.232–34 Payment by Electronic Funds
Transfer—Other than Central Contractor
Registration.
52.232–35 Designation of Office for Government Receipt of Electronic Funds Transfer Information.
52.232–36 Payment by Third Party.
52.232–37 Multiple Payment Arrangements.
52.232–38 Submission of Electronic Funds
Transfer Information with Offer.
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]

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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.
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 ArchitectEngineer 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.
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 LaborHour 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.

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Federal Acquisition Regulation

Pt. 52

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.
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—FixedPrice.
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.
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—HighValue 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.

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52.000

48 CFR Ch. 1 (10–1–03 Edition)

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]
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. 121(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.

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
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]

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Federal Acquisition Regulation
52.101

52.101
organization 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
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) Introductory text. Within subpart
52.2, the introductory text of each provision or clause includes a cross-reference to the location in the FAR subject text that prescribes its use.
(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;

Using part 52.

(a) Definition.
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).
(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:

(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 sub-

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13

52.102

48 CFR Ch. 1 (10–1–03 Edition)

(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.

(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
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

[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; 65 FR 36016, June 6, 2000; 66 FR
2134, Jan. 10, 2001]

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—

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Federal Acquisition Regulation

52.104
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
(MAR 1983)—Y Acquisition Regulation.’’

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]

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

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

52.104 Procedures for modifying and
completing provisions and clauses.
(a) The contracting officer must not
modify provisions and clauses unless
the FAR authorizes their modification.
For example—
(1) ‘‘The contracting officer may use
a period shorter than 60 days (but not
less than 30 days) in paragraph (x) of
the clause’’; or
(2) ‘‘The contracting officer may substitute the words ‘task order’ for the
word ‘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.

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52.105

48 CFR Ch. 1 (10–1–03 Edition)
tion 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.
(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.

(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.
[48 FR 42478, Sept. 19, 1983, as amended at 65
FR 36016, June 6, 2000]

52.105 Procedures for using alternates.
(a) The FAR accommodates a major
variation in a provision or clause by
use of an alternate. The FAR prescribes alternates to a given provision
or clause in the FAR subject text
where the provision or clause is prescribed. The alternates to each provision or clause are titled ‘‘Alternate I,’’
‘‘Alternate II,’’ ‘‘Alternate III,’’ etc.
(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.
[48 FR 42478, Sept. 19, 1983, as amended at 65
FR 36016, June 6, 2000]

52.106

[Reserved]

52.107 Provisions and clauses prescribed in subpart 52.1.
(a) The contracting officer shall insert the provision at 52.252–1, Solicita-

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

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Federal Acquisition Regulation

52.202–1
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—
(i) Such services are procured for support
of an item referred to in paragraph (c)(1), (2),
(3), or (4) of this definition, regardless of
whether such services are provided by the
same source or at the same time as the item;
and
(ii) The source of such services provides
similar services contemporaneously to the
general public under terms and conditions
similar to those offered to the Federal Government;
(6) Services of a type offered and sold competitively in substantial quantities in the
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. For
purposes of these services—
(i) Catalog price means a price included in a
catalog, price list, schedule, or other form
that is regularly maintained by the manufacturer or vendor, is either published or
otherwise available for inspection by customers, and states prices at which sales are
currently, or were last, made to a significant
number of buyers constituting the general
public; and
(ii) Market prices means current prices that
are established in the course of ordinary
trade between buyers and sellers free to bargain and that can be substantiated through
competition or from sources independent of
the offerors.
(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 Government as part of an end item or of
another component, except that for use in
52.225–9, and 52.225–11 see the definitions in
52.225–9(a) and 52.225–11(a).
(e) Contracting Officer means a person with
the authority to enter into, administer, and/

Subpart 52.2—Text of Provisions
and Clauses
52.200

Scope of subpart.

This subpart sets forth the text of all
FAR provisions and clauses (see
52.101(b)(1)) and gives a cross-reference
to the location in the FAR that prescribes the provision or clause.
[65 FR 36016, June 6, 2000]

52.201

[Reserved]

52.202–1

Definitions.

As prescribed in section 2.201, insert
the following clause:
DEFINITIONS (DEC 2001)
(a) Agency head or head of the agency means
the Secretary (Attorney General, Administrator, Governor, Chairperson, or other chief
official, as appropriate) of the agency, unless
otherwise indicated, including any deputy or
assistant chief official of the executive agency.
(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 by the
general public or by non-governmental entities for purposes other than governmental
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

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52.203–1

48 CFR Ch. 1 (10–1–03 Edition)

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.
(f) 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 (f)(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
(f)(1) or (f)(2) solely because the item is not
yet in use.
(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.

(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 lllllllllllll
llllllllllllllllllllllll
[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.
(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 clause)
Alternate I (MAY 2001). If the contract
is for personal services; construction;
architect-engineer services; or dismantling, demolition, or removal of improvements, delete paragraph (g) 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; 66 FR
2134, Jan. 10, 2001; 66 FR 53484, Oct. 22, 2001; 67
FR 43520, June 27, 2002]

52.203–1

[Reserved]

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.

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

CERTIFICATE OF INDEPENDENT PRICE
DETERMINATION (APR 1985)

52.203–3

Gratuities.

As prescribed in 3.202, insert the following clause:

(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;

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—

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Federal Acquisition Regulation

52.203–6

(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.

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]

52.203–6 Restrictions
on
Subcontractor Sales to the Government.

(End of clause)

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

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

RESTRICTIONS ON SUBCONTRACTOR SALES TO
THE GOVERNMENT (JUL 1995)

52.203–4

(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
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.

[Reserved]

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

(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

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52.203–7

48 CFR Ch. 1 (10–1–03 Edition)

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).

(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
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.

[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]

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;

[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]

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:
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

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Federal Acquisition Regulation

52.203–10

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.

(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.
(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)
[62 FR 233, Jan. 2, 1997; 62 FR 10710, Mar. 10,
1997, as amended at 67 FR 13063, Mar. 20, 2002]

52.203–9

[Reserved]

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 costtype 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—

(End of clause)
[55 FR 36797, Sept. 6, 1990, as amended at 62
FR 233, Jan. 2, 1997]

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52.203–11

48 CFR Ch. 1 (10–1–03 Edition)
(End of provision)

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

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

As prescribed in 3.808, insert the following provision:

52.203–12 Limitation on Payments to
Influence Certain Federal Transactions.
As prescribed in 3.808, insert the following clause:

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.

LIMITATION ON PAYMENTS TO INFLUENCE
CERTAIN FEDERAL TRANSACTIONS (JUNE 2003)
(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.
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

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Federal Acquisition Regulation

52.203–12

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, or an outlying area 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
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—

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52.203–12

48 CFR Ch. 1 (10–1–03 Edition)

(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.
(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

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52.204–2

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.

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
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.

(End of clause)
[55 FR 3193, Jan. 30, 1990, as amended at 55
FR 38517, Sept. 18, 1990; 62 FR 40237, July 25,
1997; 68 FR 28084, May 22, 2003]

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]

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

Alternate II (APR 1984). If employee
identification is required for security
or other reasons in a construction contract or architect-engineer contract,

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52.204–3

48 CFR Ch. 1 (10–1–03 Edition)
the conduct of a trade or business in the
United States and does not have an office or
place of business or a fiscal paying agent in
the United States;
b Offeror is an agency or instrumentality
of a foreign government;
b Offeror is an agency or instrumentality
of the Federal Government.
(e) Type of organization.
b Sole proprietorship;
b Partnership;
b Corporate entity (not tax-exempt);
b Corporate entity (tax-exempt);
b Government entity (Federal, State, or
local);
b Foreign government;
b International organization per 26 CFR
1.6049–4;
b Other ——————————————————
(f) Common parent.
b Offeror is not owned or controlled by a
common parent as defined in paragraph (a) of
this provision.
b Name and TIN of common parent:
Name llllllllllllllllllll
TIN lllllllllllllllllllll

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]

52.204–3 Taxpayer identification.
As prescribed in 4.905, insert the following provision:
TAXPAYER IDENTIFICATION (OCT 1998)
(a) Definitions.
Common parent, as used in this 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.
Taxpayer Identification Number (TIN), as
used in this provision, means the number required by the Internal Revenue Service (IRS)
to be used by the offeror in reporting income
tax and other returns. The TIN may be either a Social Security Number or an Employer Identification Number.
(b) All offerors must submit the information required in paragraphs (d) through (f) of
this provision to comply with debt collection
requirements of 31 U.S.C. 7701(c) and 3325(d),
reporting requirements of 26 U.S.C. 6041,
6041A, and 6050M, and implementing regulations issued by the IRS. If the resulting contract is subject to the payment reporting requirements described in Federal Acquisition
Regulation (FAR) 4.904, 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) The TIN may be used by the Government to collect and report on any delinquent
amounts arising out of the offeror’s relationship with the Government (31 U.S.C.
7701(c)(3)). If the resulting contract is subject
to the payment reporting requirements described in FAR 4.904, the TIN provided hereunder may be matched with IRS records to
verify the accuracy of the offeror’s TIN.
(d) Taxpayer Identification Number (TIN).
b TIN: ——————————————————
b TIN has been applied for.
b TIN is not required because:
b Offeror is a nonresident alien, foreign
corporation, or foreign partnership that does
not have income effectively connected with

(End of provision)
[63 FR 58589, Oct. 30, 1998]

52.204–4 Printed or Copied DoubleSided on Recycled Paper.
As prescribed in 4.303, insert the following clause:
PRINTED OR COPIED DOUBLE-SIDED ON
RECYCLED PAPER (AUG 2000)
(a) Definitions. As used in this clause—
Postconsumer material means a material or
finished product that has served its intended
use and has been discarded for disposal or recovery, having completed its life as a consumer item. Postconsumer material is a part
of the broader category of ‘‘recovered material.’’ For paper and paper products,
postconsumer
material
means
‘‘postconsumer fiber’’ defined by the U.S. Environmental Protection Agency (EPA) as—
(1) Paper, paperboard, and fibrous materials from retail stores, office buildings,
homes, and so forth, after they have passed
through their end-usage as a consumer item,
including: used corrugated boxes; old newspapers; old magazines; mixed waste paper;
tabulating cards; and used cordage; or
(2) All paper, paperboard, and fibrous materials that enter and are collected from municipal solid waste; but not
(3) Fiber derived from printers’ over-runs,
converters’ scrap, and over-issue publications.
Printed or copied double-sided means printing or reproducing a document so that information is on both sides of a sheet of paper.

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Federal Acquisition Regulation

52.204–6

Recovered material, for paper and paper
products, is defined by EPA in its Comprehensive Procurement Guideline as ‘‘recovered fiber’’ and means the following materials:
(1) Postconsumer fiber; and
(2) Manufacturing wastes such as—
(i) Dry paper and paperboard waste generated after completion of the papermaking
process (that is, those manufacturing operations up to and including the cutting and
trimming of the paper machine reel into
smaller rolls or rough sheets) including: envelope cuttings, bindery trimmings, and
other paper and paperboard waste resulting
from printing, cutting, forming, and other
converting operations; bag, box, and carton
manufacturing wastes; and butt rolls, mill
wrappers, and rejected unused stock; and
(ii) Repulped finished paper and paperboard
from obsolete inventories of paper and paperboard manufacturers, merchants, wholesalers, dealers, printers, converters, or others.
(b) In accordance with Section 101 of Executive Order 13101 of September 14, 1998,
Greening the Government through Waste
Prevention, Recycling, and Federal Acquisition, the Contractor is encouraged to submit
paper documents, such as offers, letters, or
reports, that are printed or copied doublesided on recycled paper that meet minimum
content standards specified in Section 505 of
Executive Order 13101, when not using electronic commerce methods to submit information or data to the Government.
(c) If the Contractor cannot purchase highspeed copier paper, offset paper, forms bond,
computer printout paper, carbonless paper,
file folders, white wove envelopes, writing
and office paper, book paper, cotton fiber
paper, and cover stock meeting the 30 percent postconsumer material standard for use
in submitting paper documents to the Government, it should use paper containing no
less than 20 percent postconsumer material.
This lesser standard should be used only
when paper meeting the 30 percent
postconsumer material standard is not obtainable at a reasonable price or does not
meet reasonable performance standards.

or more women; or in the case of any publicly owned business, at least 51 percent of
its stock is owned by one or more women;
and whose management and daily business
operations are controlled by one or more
women.
(b) Representation. [Complete only if the offeror is a women-owned business concern and
has not represented itself as a small business
concern in paragraph (b)(1) of FAR 52.219–1,
Small Business Program Representations, of this
solicitation.] The offeror represents that it b
is a women-owned business concern.

(End of provision)
[64 FR 10533, Mar. 4, 1999; 64 FR 30103, June 4,
1999]

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 (Oct 2003)
(a) The offeror shall enter, in the block
with its name and address on the cover page
of its offer, the annotation ‘‘DUNS’’ or
‘‘DUNS+4’’ followed by the DUNS number or
‘‘DUNS+4’’ 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, Inc. The
DUNS+4 is the DUNS number plus a 4-character suffix that may be assigned at the discretion of the offeror to establish additional
CCR records for identifying alternative Electronic Funds Transfer (EFT) accounts (see
Subpart 32.11) for the same parent concern.
(b) If the offeror does not have a DUNS
number, it should contact Dun and Bradstreet directly to obtain one.
(1) An offeror may obtain a DUNS number—
(i) If located within the United States, by
calling Dun and Bradstreet at 1–866–705–5711
or via the Internet at http://www.dnb.com; or
(ii) If located outside the United States, by
contacting the local Dun and Bradstreet office.
(2) The offeror should be prepared to provide the following information:
(i) Company legal business name.
(ii) Tradestyle, doing business, or other
name by which your entity is commonly recognized.
(iii) Company physical street address, city,
state and Zip Code.
(iv) Company mailing address, city, state
and Zip Code (if separate from physical).
(v) Company telephone number.
(vi) Date the company was started.
(vii) Number of employees at your location.
(viii) Chief executive officer/key manager.

(End of clause)
[65 FR 36020, June 6, 2000]

52.204–5 Women-Owned
Business
(Other Than Small Business).
As prescribed in 4.603(b), insert the
following provision:
WOMEN-OWNED BUSINESS (OTHER THAN SMALL
BUSINESS) (MAY 1999)
(a) Definition. Women-owned business concern, as used in this provision, means a concern that is at least 51 percent owned by one

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52.204–7

48 CFR Ch. 1 (10–1–03 Edition)

(ix) Line of business (industry).
(x) Company Headquarters name and address (reporting relationship within your entity).
(End of provision)

(i) If located within the United States, by
calling Dun and Bradstreet at 1–866–705–5711
or via the Internet at http://www.dnb.com; or
(ii) If located outside the United States, by
contacting the local Dun and Bradstreet office.
(2) The offeror should be prepared to provide the following information:
(i) Company legal business.
(ii) Tradestyle, doing business, or other
name by which your entity is commonly recognized.
(iii) Company Physical Street Address,
City, State, and Zip Code.
(iv) Company Mailing Address, City, State
and Zip Code (if separate from physical).
(v) Company Telephone Number.
(vi) Date the company was started.
(vii) Number of employees at your location.
(viii) Chief executive officer/key manager.
(ix) Line of business (industry).
(x) Company Headquarters name and address (reporting relationship within your entity).
(d) If the Offeror does not become registered in the CCR database in the time prescribed by the Contracting Officer, the Contracting Officer will proceed to award to the
next otherwise successful registered Offeror.
(e) Processing time, which normally takes
48 hours, should be taken into consideration
when registering. Offerors who are not registered should consider applying for registration immediately upon receipt of this solicitation.
(f) The Contractor is responsible for the accuracy and completeness of the data within
the CCR database, and for any liability resulting from the Government’s reliance on
inaccurate or incomplete data. To remain
registered in the CCR database after the initial registration, the Contractor is required
to review and update on an annual basis
from the date of initial registration or subsequent updates its information in the CCR
database to ensure it is current, accurate
and complete. Updating information in the
CCR does not alter the terms and conditions
of this contract and is not a substitute for a
properly executed contractual document.
(g)(1)(i) If a Contractor has legally changed
its business name, ‘‘doing business as’’ name,
or division name (whichever is shown on the
contract), or has transferred the assets used
in performing the contract, but has not completed the necessary requirements regarding
novation and change-of-name agreements in
Subpart 42.12, the Contractor shall provide
the responsible Contracting Officer a minimum of one business day’s written notification of its intention to (A) change the name
in the CCR database; (B) comply with the requirements of Subpart 42.12 of the FAR; and

[68 FR 56674, Oct. 1, 2003]

52.204–7 Central Contractor Registration.
As prescribed in 4.1104, use the following clause:
Central Contractor Registration (Oct 2003)
(a) Definitions. As used in this clause—
Central Contractor Registration (CCR) database means the primary Government repository for Contractor information required for
the conduct of business with the Government.
Data Universal Numbering System (DUNS)
number means the 9-digit number assigned by
Dun and Bradstreet, Inc. (D&B) to identify
unique business entities.
Data Universal Numbering System +4
(DUNS+4) number means the DUNS number
assigned by D&B plus a 4-character suffix
that may be assigned by a business concern.
(D&B has no affiliation with this 4-character
suffix.) This 4-character suffix may be assigned at the discretion of the business concern to establish additional CCR records for
identifying alternative Electronic Funds
Transfer (EFT) accounts (see the FAR at
Subpart 32.11) for the same parent concern.
Registered in the CCR database means that—
(1) The Contractor has entered all mandatory information, including the DUNS number or the DUNS+4 number, into the CCR
database; and
(2) The Government has validated all mandatory data fields and has marked the record
‘‘Active’’.
(b)(1) By submission of an offer, the offeror
acknowledges the requirement that a prospective awardee shall be registered in the
CCR database prior to award, during performance, and through final payment of any
contract, basic agreement, basic ordering
agreement, or blanket purchasing agreement
resulting from this solicitation.
(2) The offeror shall enter, in the block
with its name and address on the cover page
of its offer, the annotation ‘‘DUNS’’ or
‘‘DUNS +4’’ followed by the DUNS or DUNS
+4 number that identifies the offeror’s name
and address exactly as stated in the offer.
The DUNS number will be used by the Contracting Officer to verify that the offeror is
registered in the CCR database.
(c) If the offeror does not have a DUNS
number, it should contact Dun and Bradstreet directly to obtain one.
(1) An offeror may obtain a DUNS number—

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(C) agree in writing to the timeline and procedures specified by the responsible Contracting Officer. The Contractor must provide with the notification sufficient documentation to support the legally changed
name.
(ii) If the Contractor fails to comply with
the requirements of paragraph (g)(1)(i) of
this clause, or fails to perform the agreement at paragraph (g)(1)(i)(C) of this clause,
and, in the absence of a properly executed
novation or change-of-name agreement, the
CCR information that shows the Contractor
to be other than the Contractor indicated in
the contract will be considered to be incorrect information within the meaning of the
‘‘Suspension of Payment’’ paragraph of the
electronic funds transfer (EFT) clause of this
contract.
(2) The Contractor shall not change the
name or address for EFT payments or manual payments, as appropriate, in the CCR
record to reflect an assignee for the purpose
of assignment of claims (see FAR Subpart
32.8, Assignment of Claims). Assignees shall
be separately registered in the CCR database. Information provided to the Contractor’s CCR record that indicates payments,
including those made by EFT, to an ultimate
recipient other than that Contractor will be
considered to be incorrect information within the meaning of the ‘‘Suspension of payment’’ paragraph of the EFT clause of this
contract.
(h) Offerors and Contractors may obtain
information on registration and annual confirmation requirements via the internet at
http://www.ccr.gov or by calling 1–888–227–2423,
or 269–961–5757.
Alternate I (Oct. 2003). As prescribed in
4.1104(a), substitute the following paragraph
(b) for paragraph (b) of the basic clause:
(b)(1) The Contractor shall be registered in
the CCR database by lllll [Contracting
Officer shall insert a date no later than December 31, 2003]. The Contractor shall maintain
registration during performance and through
final payment of this contract.
(2) The Contractor shall enter, in the block
with its name and address on the cover page
of the SF 30, Amendment of solicitation/
Modification of Contract, the annotation
‘‘DUNS’’ or ‘‘DUNS +4’’ followed by the
DUNS or DUNS +4 number that identifies
the Contractor’s name and address exactly
as stated in this contract. The DUNS number
will be used by the Contracting Officer to
verify that the Contractor is registered in
the CCR database.

52.205–52.206

[Reserved]

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
lllll [insert a number from 15 to 30, depending on the complexity of the matter (see
7.306(a)(1)(iv)] working days, beginning with
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.

[68 FR 56674, Oct. 1, 2003]

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52.207–2

48 CFR Ch. 1 (10–1–03 Edition)

(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.

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 l [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.

(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]

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 l [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

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

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

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Federal Acquisition Regulation

52.208–4

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.

ernment’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]

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)

(End of clause)

(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.
(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.’’

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

52.207–4 Economic
tity—Supplies.

Purchase

Quan-

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.
llllllllllllllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll
(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
Item

Quantity

Price
quotation

Total

........................................
........................................
........................................

................
................
................

....................
....................
....................

............
............
............

(End of clause)
[59 FR 67026, Dec. 28, 1994]

52.208–1—52.208–3

(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 Gov-

[Reserved]

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:

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52.208–5

48 CFR Ch. 1 (10–1–03 Edition)

VEHICLE LEASE PAYMENTS (APR 1984)

(End of clause)

(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.

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)
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.

(End of clause)
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:

(End of clause)

CONDITION OF LEASED VEHICLES (APR 1984)
[51 FR 19717, May 30, 1986]

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.

52.208–8 Required Sources for Helium
and Helium Usage Data.
As prescribed in 8.505, insert the following clause:
REQUIRED SOURCES FOR HELIUM AND HELIUM
USAGE DATA (APR 2002)
(a) Definitions.
Bureau of Land Management, as used in this
clause, means the Department of the Interior, Bureau of Land Management, Amarillo
Field Office, Helium Operations, located at
801 South Fillmore Street, Suite 500, Amarillo, TX 79101–3545.
Federal helium supplier means a private helium vendor that has an in-kind crude helium sales contract with the Bureau of Land
Management (BLM) and that is on the BLM

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Federal Acquisition Regulation

52.209–1

Amarillo Field Office’s Authorized List of
Federal Helium Suppliers available via the
Internet
at
http://www.nm.blm.gov/www/
amfo/amfolhome.html.
Major helium requirement means an estimated refined helium requirement greater
than 200,000 standard cubic feet (scf) (measured at 14.7 pounds per square inch absolute
pressure and 70 degrees Fahrenheit temperature) of gaseous helium or 7510 liters of liquid helium delivered to a helium use location per year.
(b) Requirements—(1) Contractors must purchase major helium requirements from Federal helium suppliers, to the extent that supplies are available.
(2) The Contractor shall provide to the
Contracting Officer the following data within 10 days after the Contractor or subcontractor receives a delivery of helium from a
Federal helium supplier—
(i) The name of the supplier;
(ii) The amount of helium purchased;
(iii) The delivery date(s); and
(iv) The location where the helium was
used.
(c) Subcontracts. The Contractor shall insert this clause, including this paragraph (c),
in any subcontract or order that involves a
major helium requirement.

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) lllllllllllllllllll
(Address) llllllllllllllllll
(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 lllllllllllllll
Manufacturer’s Name llllllllllll
Source’s Name lllllllllllllll
Item Name lllllllllllllllll
Service Identification llllllllllll
Test Number llllllllllllllll
(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.

(End of clause)
[67 FR 13064, Mar. 20, 2002]

52.208–9 Contractor Use of Mandatory
Sources of Supply or Services.
As prescribed in 8.004, insert the following clause:
CONTRACTOR USE OF MANDATORY SOURCES OF
SUPPLY OR SERVICES (FEB 2002)
(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 or services 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:
(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; 66 FR 65368, Dec. 18,
2001; 67 FR 56120, Aug. 30, 2002]

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52.209–3

48 CFR Ch. 1 (10–1–03 Edition)

(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.

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

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 l unit(s) of
Lot/Item l as specified in this contract. At
least l 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 l calendar days
from the date of this contract to l [insert
address of the Government activity to receive
the report] marked ‘‘FIRST ARTICLE TEST
REPORT: Contract No. ll, Lot/Item No.
ll.’’ Within l 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
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 Con-

(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.

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Federal Acquisition Regulation

52.209–4
other 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.

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]

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 l units(s)
of Lot/Item ll within l calendar days from
the date of this contract to the Government
at lll [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 l 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
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 an-

(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:

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52.209–5

48 CFR Ch. 1 (10–1–03 Edition)

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

mission 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.

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]

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 (DEC 2001)
(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 threeyear 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 (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, com-

(End of provision)
[54 FR 19827, May 8, 1989, as amended at 61
FR 2633, Jan. 26, 1996; 65 FR 80265, Dec. 20,
2000; 66 FR 17756, Apr. 3, 2001; 66 FR 66986,
66990, Dec. 27, 2001]

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Federal Acquisition Regulation

52.211–2
AVAILABILITY OF SPECIFICATIONS LISTED IN
THE GSA INDEX OF FEDERAL SPECIFICATIONS, STANDARDS AND COMMERCIAL ITEM
DESCRIPTIONS, FPMR PART 101–29 (AUG
1998)

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:

(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.

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 provision)
[63 FR 34063, June 22, 1998]

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 (DEC 1999)
Copies of specifications, standards, and
data item descriptions cited in this solicitation may be obtained—
(a) From the ASSIST database via the
Internet at http://assist.daps.mil; or
(b) 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.

(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]

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:

(End of provision)
[64 FR 72446, Dec. 27, 1999]

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52.211–3

48 CFR Ch. 1 (10–1–03 Edition)

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

52.211–5

Material Requirements.

As prescribed in 11.304, insert the following clause:

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

MATERIAL REQUIREMENTS (AUG 2000)
(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 byproducts 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 recovered or diverted from
solid waste, but the 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—
(1) Previously unused raw material, including previously unused copper, aluminum,
lead, zinc, iron, other metal or metal ore; or
(2) 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,
reconditioned, or remanufactured, 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, may be used in contract performance if the Contractor has proposed the
use of such supplies, and the Contracting Officer has authorized their use.

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) lllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll
(Telephone number) lllllllllllll
(Person to be contacted) llllllllll
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]

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) lllllllllllllllll
(COMPLETE ADDRESS) llllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll
(TELEPHONE NUMBER) llllllllll
(PERSON TO BE CONTACTED) llllll
(TIME(S) FOR VIEWING) llllllllll

(End of provision)

(End of clause)

[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]

[62 FR 44812, Aug. 22, 1997, as amended at 65
FR 36021, June 6, 2000]

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Federal Acquisition Regulation

52.211–8
consensus standard instead of the Government-unique standard if it meets the Government’s requirements unless inconsistent
with law or otherwise impractical.
(b) If an alternative standard is proposed,
the offeror must furnish data and/or information regarding the alternative in sufficient
detail for the Government to determine if it
meets the Government’s requirements. Acceptance of the alternative standard is a unilateral decision made solely at the discretion
of the Government.
(c) Offers that do not comply with the Government-unique standards specified in this
solicitation may be determined to be nonresponsive or unacceptable. The offeror may
submit an offer that complies with the Government-unique standards specified in this
solicitation, in addition to any proposed alternative standard(s).

52.211–6 Brand name or equal.
As prescribed in 11.107(a), insert the
following provision:
BRAND NAME OR EQUAL (AUG 1999)
(a) If an item in this solicitation is identified as ‘‘brand name or equal,’’ the purchase
description reflects the characteristics and
level of quality that will satisfy the Government’s needs. The salient physical, functional, or performance characteristics that
‘‘equal’’ products must meet are specified in
the solicitation.
(b) To be considered for award, offers of
‘‘equal’’ products, including ‘‘equal’’ products of the brand name manufacturer,
must—
(1) Meet the salient physical, functional, or
performance characteristic specified in this
solicitation;
(2) Clearly identify the item by—
(i) Brand name, if any; and
(ii) Make or model number;
(3) Include descriptive literature such as illustrations, drawings, or a clear reference to
previously furnished descriptive data or information available to the Contracting Officer; and
(4) Clearly describe any modifications the
offeror plans to make in a product to make
it conform to the solicitation requirements.
Mark any descriptive material to clearly
show the modifications.
(c) The Contracting Officer will evaluate
‘‘equal’’ products on the basis of information
furnished by the offeror or identified in the
offer and reasonably available to the Contracting Officer. The Contracting Officer is
not responsible for locating or obtaining any
information not identified in the offer.
(d) Unless the offeror clearly indicates in
its offer that the product being offered is an
‘‘equal’’ product, the offeror shall provide
the brand name product referenced in the solicitation.

(End of provision)
[64 FR 51853, Sept. 24, 1999]

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]
ITEM NO.
lllll
lllll
lllll

QUANTITY
lllll
lllll
lllll

WITHIN DAYS
AFTER DATE OF
CONTRACT
lllll
lllll
lllll

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.

(End of provision)
[64 FR 32742, June 17, 1999, as amended at 64
FR 51850, Sept. 24, 1999; 64 FR 53264, Oct. 1,
1999]

§ 52.211–7 Alternatives to Governmentunique standards.
As prescribed in 11.107(b), insert the
following provision:
ALTERNATIVES TO GOVERNMENT-UNIQUE
STANDARDS (NOV 1999)

OFFEROR’S PROPOSED DELIVERY
SCHEDULE

(a) This solicitation includes Governmentunique standards. The offeror may propose
voluntary consensus standards that meet the
Government’s requirements as alternatives
to the Government-unique standards. The
Government will accept use of the voluntary

ITEM NO.
lllll

QUANTITY
lllll

WITHIN DAYS
AFTER DATE OF
CONTRACT
lllll

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52.211–9

48 CFR Ch. 1 (10–1–03 Edition)
pute 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.

OFFEROR’S PROPOSED DELIVERY
SCHEDULE—Continued
ITEM NO.

WITHIN DAYS
AFTER DATE OF
CONTRACT

QUANTITY

lllll
lllll

lllll
lllll

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.

lllll
lllll

(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
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.

(b) The delivery dates or specific periods
above are based on the assumption that the
successful offeror will receive notice of
award by ll [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.

(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.

[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]

(b) The delivery dates or specific periods
above are based on the assumption that the
Government will make award by ll
[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 com-

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:

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Federal Acquisition Regulation

52.211–9
(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.

DESIRED DELIVERY SCHEDULE
[Contracting Officer insert specific details]
ITEM NO.
llll
llll
llll

QUANTITY
llll
llll
llll

WITHIN DAYS
AFTER DATE OF
CONTRACT
llll
llll
llll

(End of clause)

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:

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 ll; or
not sooner than ll, or later than ll as
headings for the third column of paragraph (a) of the basic clause.

REQUIRED DELIVERY SCHEDULE
[Contracting Officer insert specific details]
ITEM NO.
lllll
lllll
lllll

QUANTITY
lllll
lllll
lllll

WITHIN DAYS
AFTER DATE OF
CONTRACT
lllll
lllll
lllll

(b) The delivery dates or specific periods
above are based on the assumption that the
Government will make award by ll
[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.

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
ITEM NO.
lllll
lllll
lllll

QUANTITY
lllll
lllll
lllll

WITHIN DAYS
AFTER DATE OF
CONTRACT
lllll
lllll
lllll

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) 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

(b) The delivery dates or specific periods
above are based on the assumption that the
successful offeror will receive notice of
award by ll [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

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52.211–10

48 CFR Ch. 1 (10–1–03 Edition)

Contractor receives notice of award; provided, that the Contractor promptly acknowledges receipt of notice of award.

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.

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. Redesignated and
amended at 60 FR 48251, 48256, Sept. 18, 1995]

52.211–11 Liquidated Damages—Supplies, Services, or Research and Development.
As prescribed in 11.503(a), insert the
following clause in solicitations and
contracts:

[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]

LIQUIDATED DAMAGES—SUPPLIES, SERVICES,
OR RESEARCH AND DEVELOPMENT (SEP 2000)
(a) If the Contractor fails to deliver the
supplies or perform the services within the
time specified in this contract, the Contractor shall, in place of actual damages, pay
to the Government liquidated damages of
$ll per calendar day of delay [Contracting
Officer insert amount].
(b) If the Government terminates this contract in whole or in part under the Default—
Fixed-Price Supply and Service clause, the
Contractor is liable for liquidated damages
accruing until the Government reasonably
obtains delivery or performance of similar
supplies or services. These liquidated damages are in addition to excess costs of repurchase under the Termination clause.
(c) The Contractor will not be charged with
liquidated damages when the delay in delivery or performance is beyond the control and
without the fault or negligence of the Contractor as defined in the Default—FixedPrice Supply and Service clause in this contract.

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
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
l [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 ll*. The time
stated for completion shall include final
cleanup of the premises.

(End of clause)

(End of clause)
[65 FR 46067, July 26, 2000]

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

52.211–12 Liquidated
struction.

Damages—Con-

As prescribed in 11.503(b), insert the
following clause in solicitations and
contracts:

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:

LIQUIDATED DAMAGES—CONSTRUCTION (SEP
2000)
(a) If the Contractor fails to complete the
work within the time specified in the contract, the Contractor shall pay liquidated
damages to the Government in the amount
of ll [Contracting Officer insert amount] for
each calendar day of delay until the work is
completed or accepted.

The completion date is based on the assumption that the successful offeror will receive the notice to proceed by ll
[Contracting Officer insert date]. The completion date will be extended by the number of
calendar days after the above date that the

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Federal Acquisition Regulation

52.211–17

(b) If the Government terminates the Contractor’s right to proceed, liquidated damages will continue to accrue until the work
is completed. These liquidated damages are
in addition to excess costs of repurchase
under the Termination 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)

(End of clause)
[65 FR 46067, July 26, 2000]

52.211–13

[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]

Time Extensions.

As prescribed in 11.503(c), insert the
following clause:

52.211–16 Variation in Quantity.
As prescribed in 11.703(a), insert the
following clause:

TIME EXTENSIONS (SEP 2000)
Time extensions for contract changes 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 related to the changed work and
that the remaining contract completion
dates for all other portions of the work will
not be altered. The change order also may
provide an equitable readjustment of liquidated damages under the new completion
schedule.

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:
l Percent increase [Contracting Officer insert
percentage]
l Percent decrease [Contracting Officer insert
percentage]
This increase or decrease shall apply to
ll *

(End of clause)
[65 FR 46067, July 26, 2000]

(End of clause)

52.211–14 Notice of Priority Rating for
National Defense Use.

*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.

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.]

[48 FR 42478, Sept. 19, 1983. Redesignated and
amended at 60 FR 48251, 48256, Sept. 18, 1995;
64 FR 10538, Mar. 4, 1999]

52.211–17 Delivery of Excess Quantities.
As prescribed in 11.703(b), insert the
following clause:

(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]

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
quantity), such excess quantities will be

52.211–15 Defense Priority and Allocation Requirements.
As prescribed in 11.604(b), insert the
following clause:

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52.211–18

48 CFR Ch. 1 (10–1–03 Edition)

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.

INSTRUCTIONS TO OFFERORS—COMMERCIAL
ITEMS (OCT. 2003)
(a) North American Industry Classification
System (NAICS) code and small business size
standard. The NAICS 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,

(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]

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]

52.212–1 Instructions
to
Offerors—
Commercial Items.
As prescribed in 12.301(b)(1), insert
the following provision:

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Federal Acquisition Regulation

52.212–1

and returned at the sender’s request and expense, unless they are destroyed during
preaward testing.
(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 submissions, modifications, revisions,
and withdrawals of offers. (1) Offerors are responsible for submitting offers, and any
modifications, revisions, or withdrawals, so
as to reach the Government office designated
in the solicitation by the time specified in
the solicitation. If no time is specified in the
solicitation, the time for receipt is 4:30 p.m.,
local time, for the designated Government
office on the date that offers or revisions are
due.
(2)(i) Any offer, modification, revision, or
withdrawal of an offer received at the Government office designated in the solicitation
after the exact time specified for receipt of
offers is ‘‘late’’ and will not be considered
unless it is received before award is made,
the Contracting Officer determines that accepting the late offer would not unduly delay
the acquisition; and—
(A) If it was transmitted through an electronic commerce method authorized by the
solicitation, it 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 offers; or
(B) There is acceptable evidence to establish that it was received at the Government
installation designated for receipt of offers
and was under the Government’s control
prior to the time set for receipt of offers; or
(C) If this solicitation is a request for proposals, it was the only proposal received.
(ii) However, a late modification of an otherwise successful offer, that makes its terms
more favorable to the Government, will be
considered at any time it is received and
may be accepted.
(3) Acceptable evidence to establish the
time of receipt at the Government installation includes the time/date stamp of that installation on the offer wrapper, other documentary evidence of receipt maintained by
the installation, or oral testimony or statements of Government personnel.
(4) If an emergency or unanticipated event
interrupts normal Government processes so
that offers cannot be received at the Government office designated for receipt of offers
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 offers
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.
(5) Offers may be withdrawn by written notice received at any time before the exact
time set for receipt of offers. Oral offers in
response to oral solicitations may be withdrawn orally. If the solicitation authorizes
facsimile offers, offers may be withdrawn via
facsimile received at any time before the
exact time set for receipt of offers, subject to
the conditions specified in the solicitation
concerning facsimile offers. An offer may be
withdrawn in person by an offeror or its authorized representative if, before the exact
time set for receipt of offers, the identity of
the person requesting withdrawal is established and the person signs a receipt for the
offer.
(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

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52.212–2

48 CFR Ch. 1 (10–1–03 Edition)

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://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 all offers exceeding
$25,000, and offers of $25,000 or less if the solicitation requires the Contractor to be registered in the Central Contractor Registration (CCR) database. The offeror shall enter,
in the block with its name and address on
the cover page of its offer, the annotation
‘‘DUNS’’ or ‘‘DUNS +4’’ followed by the
DUNS or DUNS +4 number that identifies
the offeror’s name and address. The DUNS +4
is the DUNS number plus a 4-character suffix
that may be assigned at the discretion of the
offeror to establish additional CCR records
for identifying alternative Electronic Funds
Transfer (EFT) accounts (see FAR Subpart
32.11) for the same parent concern. If the offeror does not have a DUNS number, it
should contact Dun and Bradstreet directly
to obtain one. An offeror within the United
States may contact Dun and Bradstreet by
calling 1–866–705–5711 or via the internet at
http://www.dnb.com. An offeror located outside the United States must contact the
local Dun and Bradstreet office for a DUNS
number.
(k) Central Contractor Registration. Unless
exempted by an addendum to this solicitation, by submission of an offer, the offeror
acknowledges the requirement that a prospective awardee shall be registered in the
CCR database prior to award, during performance and through final payment of any
contract resulting from this solicitation. If
the Offeror does not become registered in the
CCR database in the time prescribed by the
Contracting Officer, the Contracting Officer
will proceed to award to the next otherwise
successful registered Offeror. Offerors may
obtain information on registration and annual confirmation requirements via the
Internet at http://www.ccr.gov or by calling 1–
888–227–2423 or 269–961–5757.

(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; 64 FR 32749,
June 17, 1999; 64 FR 51840, Sept. 24, 1999; 65 FR
16286, Mar. 27, 2000; 65 46058, July 26, 2000; 68
FR 43875, July 24, 2003; 68 FR 56675, Oct. 1,
2003]

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:
llllllllllllllllllllllll
llllllllllllllllllllllll
(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 llll (Contracting Officer
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.

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Federal Acquisition Regulation

52.212–3
Women-owned small business concern means
a small business concern—
(1) That 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 its stock 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. 6109, 31 U.S.C. 7701). (Not applicable if
the offeror is required to provide this information to a central contractor registration
database to be eligible for award.)
(1) All offerors must submit the information required in paragraphs (b)(3) through
(b)(5) of this provision to comply with debt
collection requirements of 31 U.S.C. 7701(c)
and 3325(d), reporting requirements of 26
U.S.C. 6041, 6041A, and 6050M, and implementing regulations issued by the Internal
Revenue Service (IRS).
(2) The TIN may be used by the Government to collect and report on any delinquent
amounts arising out of the offeror’s relationship with the Government (31 U.S.C.
7701(c)(3)). If the resulting contract is subject
to the payment reporting requirements described in FAR 4.904, the TIN provided hereunder may be matched with IRS records to
verify the accuracy of the offeror’s TIN.
(3) Taxpayer Identification Number (TIN).
b TIN: ——————————————————
b TIN has been applied for.
b TIN is not required because:
b 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
United States and does not have an office or
place of business or a fiscal paying agent in
the United States;
b Offeror is an agency or instrumentality
of a foreign government;
b Offeror is an agency or instrumentality
of the Federal Government.
(4) Type of organization.
b Sole proprietorship;
b Partnership;
b Corporate entity (not tax-exempt);
b Corporate entity (tax-exempt);
b Government entity (Federal, State, or
local);
b Foreign government;
b International organization per 26 CFR
1.6049–4;
b Other ——————————————————

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

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 (JUNE 2003)

(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 NAICS code designated.
Forced or indentured child labor means all
work or service—
(1) Exacted from any person under the age
of 18 under the menace of any penalty for its
nonperformance and for which the worker
does not offer himself voluntarily; or
(2) Performed by any person under the age
of 18 pursuant to a contract the enforcement
of which can be accomplished by process or
penalties.
Service-disabled veteran-owned small business
concern—
(1) Means a small business concern—
(i) Not less than 51 percent of which is
owned by one or more service—disabled veterans or, in the case of any publicly owned
business, not less than 51 percent of the
stock of which is owned by one or more service-disabled veterans; and
(ii) The management and daily business operations of which are controlled by one or
more service-disabled veterans or, in the
case of a veteran with permanent and severe
disability, the spouse or permanent caregiver of such veteran.
(2) Service-disabled veteran means a veteran, as defined in 38 U.S.C. 101(2), with a disability that is service-connected, as defined
in 38 U.S.C. 101(16).
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.
Veteran-owned small business concern means
a small business concern—
(1) Not less than 51 percent of which is
owned by one or more veterans (as defined at
38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent
of the stock of which is owned by one or
more veterans; and
(2) The management and daily business operations of which are controlled by one or
more veterans.

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52.212–3

48 CFR Ch. 1 (10–1–03 Edition)

(5) Common parent.
b Offeror is not owned or controlled by a
common parent;
b Name and TIN of common parent:
Name llllllllllllllllllll
TIN lllllllllllllllllllll
(c) Offerors must complete the following
representations when the resulting contract
will be performed in the United States or its
outlying areas. Check all that apply.
(1) Small business concern. The offeror represents as part of its offer that it b is, b is
not a small business concern.
(2) Veteran-owned small business concern.
[Complete only if the offeror represented itself
as a small business concern in paragraph (c)(1)
of this provision.] The offeror represents as
part of its offer that it [ ] is, [ ] is not a
veteran-owned small business concern.
(3) Service-disabled veteran-owned small business concern. [Complete only if the offeror represented itself as a veteran-owned small business concern in paragraph (c)(2) of this provision.] The offeror represents as part of its
offer that it [ ] is, [ ] is not a service-disabled veteran-owned small business concern.
(4) Small disadvantaged business concern.
[Complete only if the offeror represented itself as
a small business concern in paragraph (c)(1) of
this provision.] The offeror represents, for
general statistical purposes, that it b is, b is
not a small disadvantaged business concern
as defined in 13 CFR 124.1002.
(5) Women-owned small business concern.
[Complete only if the offeror represented itself as
a small business concern in paragraph (c)(1) of
this provision.] The offeror represents that it
b is, b is not a women-owned small business
concern.

(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 b is, b 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
l
l
l
l
l
l
l

50 or fewer
51–100
101–250
251–500
501–750
751–1,000
Over 1,000

Avg. Annual Gross Revenues
l
l
l
l
l
l
l

$1 million or less
$1,000,001–$2 million
$2,000,001–$3.5 million
$3,500,001–$5 million
$5,000,001–$10 million
$10,000,001–$17 million
Over $17 million

(9) (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 /l/ is, /l/ is not certified by the
Small Business Administration as a small
disadvantaged business concern and identified, on the date of this representation, as a
certified small disadvantaged business concern in the database maintained by the
Small Business Administration (PRO-Net),
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 b has, b 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

NOTE: Complete paragraphs (c)(6) and (c)(7)
only if this solicitation is expected to exceed
the simplified acquisition threshold.
(6) Women-owned business concern (other
than small business concern). [Complete only if
the offeror is a women-owned business concern
and did not represent itself as a small business
concern in paragraph (c)(1) of this provision.]
The offeror represents that it b is, a womenowned business concern.
(7) 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:
llllllllllllllllllllllll
(8) 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.]

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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)(9)(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:
llllll.]
(10) HUBZone small business concern. [Complete only if the offeror represented itself as
a small business concern in paragraph (c)(1)
of this provision.] The offeror represents, as
part of its offer, that—
(i) It [] is, [] is not a HUBZone small business concern listed, on the date of this representation, on the List of Qualified
HUBZone Small Business Concerns maintained by the Small Business Administration, and no material change in ownership
and control, principal office, or HUBZone
employee percentage has occurred since it
was certified by the Small Business Administration in accordance with 13 CFR part 126;
and
(ii) It [] is, [] is not a joint venture that
complies with the requirements of 13 CFR
part 126, and the representation in paragraph
(c)(10)(i) of this provision is accurate for the
HUBZone small business concern or concerns
that are participating in the joint venture.
[The offeror shall enter the name or names of
the HUBZone small business concern or concerns that are participating in the joint venture:llllll.] Each HUBZone small business concern participating on the joint venture shall submit a separate signed copy of
the HUBZone representation.
(d) Representations required to implement
provisions of Executive Order 11246—
(1) Previous contracts and compliance. The
offeror represents that—
(i) It b has, b has not participated in a previous contract or subcontract subject to the
Equal Opportunity clause of this solicitation; and
(ii) It b has, b has not filed all required
compliance reports.
(2) Affirmative Action Compliance. The offeror represents that—
(i) It b has developed and has on file,
b has not developed and does not have on
file, at each establishment, affirmative action programs required by rules and regulations of the Secretary of Labor (41 CFR parts
60–1 and 60–2), or
(ii) It b 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 Certificate. (Applies
only if the clause at Federal Acquisition
Regulation (FAR) 52.225–1, Buy American
Act—Supplies, is included in this solicitation.)
(1) The offeror certifies that each end product, except those listed in paragraph (f)(2) of
this provision, is a domestic end product and
that the offeror has considered components
of unknown origin to have been mined, produced, or manufactured outside the United
States. The offeror shall list as foreign end
products those end products manufactured in
the United States that do not qualify as domestic end products. The terms ‘‘component,’’ ‘‘domestic end product,’’ ‘‘end product,’’ ‘‘foreign end product,’’ and ‘‘United
States’’ are defined in the clause of this solicitation entitled ‘‘Buy American Act—Supplies.’’
(2) Foreign End Products:
Line Item No.: lllllllllllllll
Country of Origin: lllllllllllll
(List as necessary)
(3) The Government will evaluate offers in
accordance with the policies and procedures
of FAR Part 25.
(g)(1) Buy American Act—North American
Free Trade Agreement—Israeli Trade Act Certificate. (Applies only if the clause at FAR
52.225–3, Buy American Act—North American
Free Trade Agreement—Israeli Trade Act, is
included in this solicitation.)
(i) The offeror certifies that each end product, except those listed in paragraph (g)(1)(ii)
or (g)(1)(iii) of this provision, is a domestic
end product and that the offeror has considered components of unknown origin to have
been mined, produced, or manufactured outside the United States. The terms ‘‘component,’’ ‘‘domestic end product,’’ ‘‘end product,’’ ‘‘foreign end product,’’ and ‘‘United
States’’ are defined in the clause of this solicitation entitled ‘‘Buy American Act—
North American Free Trade Agreement—
Israeli Trade Act.’’
(ii) The offeror certifies that the following
supplies are NAFTA country end products or
Israeli end products as defined in the clause
of this solicitation entitled ‘‘Buy American
Act—North American Free Trade Agreement—Israeli Trade Act ’’:
NAFTA Country or Israeli End Products
Line Item No.: lllllllllllllll
Country of Origin: lllllllllllll
(List as necessary)
(iii) The offeror shall list those supplies
that are foreign end products (other than

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48 CFR Ch. 1 (10–1–03 Edition)

those listed in paragraph (g)(1)(ii) of this
provision) as defined in the clause of this solicitation entitled ‘‘Buy American Act—
North American Free Trade Agreement—
Israeli Trade Act.’’ The offeror shall list as
other foreign end products those end products manufactured in the United States that
do not qualify as domestic end products.

(4) Trade Agreements Certificate. (Applies only if the clause at FAR 52.225–5,
Trade Agreements, is included in this
solicitation.)
(i) The offeror certifies that each end
product, except those listed in paragraph (g)(4)(ii) of this provision, is a
U.S.-made, designated country, Caribbean Basin country, or NAFTA country
end product, as defined in the clause of
this solicitation entitled ‘‘Trade Agreements.’’
(ii) The offeror shall list as other end
products those end products that are
not U.S.-made, designated country,
Caribbean Basin country, or NAFTA
country end products.

Other Foreign End Products
Line Item No.: lllllllllllllll
Country of Origin: lllllllllllll
(List as necessary)
(iv) The Government will evaluate offers in
accordance with the policies and procedures
of FAR Part 25.
(2) Buy American Act—North American Free
Trade Agreements—Israeli Trade Act Certificate, Alternate I (May 2002). If Alternate I to
the clause at FAR 52.225–3 is included in this
solicitation, substitute the following paragraph (g)(1)(ii) for paragraph (g)(1)(ii) of the
basic provision:
(g)(1)(ii) The offeror certifies that the following supplies are Canadian end products as
defined in the clause of this solicitation entitled ‘‘Buy American Act—North American
Free Trade Agreement—Israeli Trade Act’’:

Other End Products
Line Item No.: lllllllllllllll
Country of Origin: lllllllllllll

(List as necessary)
(iii) The Government will evaluate
offers in accordance with the policies
and procedures of FAR Part 25. For
line items subject to the Trade Agreements Act, the Government will evaluate offers of U.S.-made, designated
country, Caribbean Basin country, or
NAFTA country end products without
regard to the restrictions of the Buy
American Act. The Government will
consider for award only offers of U.S.made, designated country, Caribbean
Basin country, or NAFTA country end
products unless the Contracting Officer
determines that there are no offers for
such products or that the offers for
such products are insufficient to fulfill
the requirements of the solicitation.
(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

Canadian End Products:
Line Item No.
llllllllllllllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll

(List as necessary)
(3) Buy American Act—North American
Free Trade Agreements—Israeli Trade Act
Certificate, Alternate II (May 2002). If Alternate II to the clause at FAR 52.225–
3 is included in this solicitation, substitute
the
following
paragraph
(g)(1)(ii) for paragraph (g)(1)(ii) of the
basic provision:
(g)(1)(ii) The offeror certifies that the
following supplies are Canadian end
products or Israeli end products as defined in the clause of this solicitation
entitled ‘‘Buy American Act—North
American Free Trade Agreement—
Israeli Trade Act’’:
Canadian or Israeli End Products:
Line Item No.
llllllllllllllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll
Country of Origin
llllllllllllllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll

(List as necessary)

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mined, produced, or manufactured outside the United States.
(ii) Excluded End Products:
Line item No.

Country of origin

lllllllll—
lllllllll—

lllllllllll
llllllllll—

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’’:

[List as necessary]

llllllllllllllllllllllll

(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’’:

[Insert line item numbers]
(h) Certification Regarding Debarment,
Suspension or Ineligibility for Award (Executive Order 12549). (Applies only if the
contract value is expected to exceed
the simplified acquisition threshold.)
The offeror certifies, to the best of its
knowledge and belief, that the offeror
and/or any of its principals—
(1) [ ] Are, [ ] are not presently
debarred, suspended, proposed for debarment, or declared ineligible for the
award of contracts by any Federal
agency; and
(2) [ ] Have, [ ] 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
(3) [ ] Are, [ ] are not presently indicted for, or otherwise criminally or
civilly charged by a Government entity
with, commission of any of these offenses.
(i) Certification Regarding Knowledge
of Child Labor for Listed End Products
(Executive Order 13126). [The Contracting
Officer must list in paragraph (i)(1) any
end products being acquired under this
solicitation that are included in the List
of Products Requiring Contractor Certification as to Forced or Indentured Child
Labor, unless excluded at 22.1503(b).]
(1) Listed end products.

llllllllllllllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll

[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

Listed End Product
llllllllllllllllllllllll
llllllllllllllllllllllll

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52.212–4

48 CFR Ch. 1 (10–1–03 Edition)

Listed Countries of Origin

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.

llllllllllllllllllllllll
llllllllllllllllllllllll
(2) Certification. [If the Contracting Officer
has identified end products and countries of origin in paragraph (i)(1) of this provision, then
the offeror must certify to either (i)(2)(i) or
(i)(2)(ii) by checking the appropriate block.]
b (i) The offeror will not supply any end
product listed in paragraph (i)(1) of this provision that was mined, produced, or manufactured in the corresponding country as
listed for that product.
b (ii) The offeror may supply an end product listed in paragraph (i)(1) of this provision
that was mined, produced, or manufactured
in the corresponding country as listed for
that product. The offeror certifies that it has
made a good faith effort to determine whether forced or indentured child labor was used
to mine, produce, or manufacture any such
end product furnished under this contract.
On the basis of those efforts, the offeror certifies that it is not aware of any such use of
child labor.

[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; 63 FR 58590, Oct. 30, 1998;
63 FR 70274, 70285, Dec. 18, 1998; 64 FR 10533,
Mar. 4, 1999; 64 FR 32749, June 17, 1999; 64 FR
36224, July 2, 1999; 64 FR 72432, Dec. 27, 1999;
65 FR 46058, July 26, 2000; 65 FR 60546; Oct. 11,
2000; 65 FR 80266, Dec. 20, 2000; 66 FR 2134,
Jan. 10, 2001; 66 FR 5348, Jan. 18, 2001; 66 FR
18735, Apr. 11, 2001; 66 FR 66986, 66990, Dec. 27,
2001; 67 FR 6121, Feb. 8, 2002; 67 FR 13066, Mar.
20, 2002; 67 FR 21536, Apr. 30, 2002; 67 FR 43520,
June 27, 2002; 68 FR 28084, May 22, 2003]

(End of provision)
Alternate I (APR 2002). As prescribed
in 12.301(b)(2), add the following paragraph (c)(11) to the basic provision:
(11) (Complete if the offeror has represented itself as disadvantaged in paragraph
(c)(4) or (c)(9) of this provision.) [The offeror
shall check the category in which its ownership
falls]:
lBlack American.
lHispanic American.
lNative American (American Indians, Eskimos, Aleuts, or Native Hawaiians).
lAsian-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).
lSubcontinent
Asian
(Asian-Indian)
American (persons with origins from India,
Pakistan, Bangladesh, Sri Lanka, Bhutan,
the Maldives Islands, or Nepal).
lIndividual/concern, other than one of the
preceding.

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 (OCT 2003)
(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 may assign its rights to receive payment due as a result of performance of this
contract to a bank, trust company, or other
financing institution, including any Federal

Alternate II (Oct 2000). As prescribed
in 12.301(b)(2), add the following paragraph (c)(9)(iii) to the basic provision:
(iii) Address. The offeror represents that its
address lis, lis not in a region for which a
small disadvantaged business procurement
mechanism is authorized and its address has

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lending agency in accordance with the Assignment of Claims Act (31 U.S.C. 3727). However, when a third party makes payment
(e.g., use of the Governmentwide commercial
purchase card), the Contractor may not assign its rights to receive payment under this
contract.
(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. (1) 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—
(i) Name and address of the Contractor;
(ii) Invoice date and number;
(iii) Contract number, contract line item
number and, if applicable, the order number;
(iv) Description, quantity, unit of measure,
unit price and extended price of the items delivered;
(v) Shipping number and date of shipment,
including the bill of lading number and
weight of shipment if shipped on Government bill of lading;
(vi) Terms of any discount for prompt payment offered;
(vii) Name and address of official to whom
payment is to be sent;

(viii) Name, title, and phone number of
person to notify in event of defective invoice; and
(ix) Taxpayer Identification Number (TIN).
The Contractor shall include its TIN on the
invoice only if required elsewhere in this
contract.
(x) Electronic funds transfer (EFT) banking information.
(A) The Contractor shall include EFT
banking information on the invoice only if
required elsewhere in this contract.
(B) If EFT banking information is not required to be on the invoice, in order for the
invoice to be a proper invoice, the Contractor shall have submitted correct EFT
banking information in accordance with the
applicable solicitation provision, contract
clause (e.g., 52.232–33, Payment by Electronic
Funds Transfer—Central Contractor Registration, or 52.232–34, Payment by Electronic Funds Transfer—Other Than Central
Contractor Registration), or applicable agency procedures.
(C) EFT banking information is not required if the Government waived the requirement to pay by EFT.
(2) Invoices will be handled in accordance
with the Prompt Payment Act (31 U.S.C.
3903) and Office of Management and Budget
(OMB) prompt payment regulations at 5 CFR
part 1315.
(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
Prompt Payment Act (31 U.S.C. 3903) and
OMB prompt payment regulations at 5 CFR
part 1315. If the Government makes payment
by Electronic Funds Transfer (EFT), see
52.212–5(b) for the appropriate EFT clause.
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

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48 CFR Ch. 1 (10–1–03 Edition)

(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 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, AntiKickback 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.
(t) Central Contractor Registration (CCR). (1)
Unless exempted by an addendum to this
contract, the Contractor is responsible during performance and through final payment
of any contract for the accuracy and completeness of the data within the CCR database, and for any liability resulting from the
Government’s reliance on inaccurate or incomplete data. To remain registered in the
CCR database after the initial registration,
the Contractor is required to review and update on an annual basis from the date of initial registration or subsequent updates its
information in the CCR database to ensure it
is current, accurate and complete. Updating
information in the CCR does not alter the
terms and conditions of this contract and is
not a substitute for a properly executed contractual document.
(2)(i) If a Contractor has legally changed
its business name, ‘‘doing business as’’ name,
or division name (whichever is shown on the
contract), or has transferred the assets used
in performing the contract, but has not completed the necessary requirements regarding
novation and change-of-name agreements in
FAR subpart 42.12, the Contractor shall provide the responsible Contracting Officer a
minimum of one business day’s written notification of its intention to (A) change the
name in the CCR database; (B) comply with
the requirements of subpart 42.12; and (C)
agree in writing to the timeline and procedures specified by the responsible Contracting Officer. The Contractor must provide with the notification sufficient documentation to support the legally changed
name.
(ii) If the Contractor fails to comply with
the requirements of paragraph (t)(2)(i) of this

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Federal Acquisition Regulation

52.212–5

clause, or fails to perform the agreement at
paragraph (t)(2)(i)(C) of this clause, and, in
the absence of a properly executed novation
or change-of-name agreement, the CCR information that shows the Contractor to be
other than the Contractor indicated in the
contract will be considered to be incorrect
information within the meaning of the
‘‘Suspension of Payment’’ paragraph of the
electronic funds transfer (EFT) clause of this
contract.
(3) The Contractor shall not change the
name or address for EFT payments or manual payments, as appropriate, in the CCR
record to reflect an assignee for the purpose
of assignment of claims (see Subpart 32.8, Assignment of Claims). Assignees shall be separately registered in the CCR database. Information provided to the Contractor’s CCR
record that indicates payments, including
those made by EFT, to an ultimate recipient
other than that Contractor will be considered to be incorrect information within the
meaning of the ‘‘Suspension of payment’’
paragraph of the EFT clause of this contract.
(4) Offerors and Contractors may obtain information on registration and annual confirmation requirements via the internet at
http://www.ccr.gov or by calling 1–888–227–2423
or 269–961–5757.

(3) Electronic Funds Transfer (EFT). If the
Government makes payment by EFT, see
52.212–5(b) for the appropriate EFT clause.
(4) Discount. 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.
(5) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice payment or that the Government has otherwise overpaid on a contract
financing or invoice payment, the Contractor shall immediately notify the Contracting Officer and request instructions for
disposition of the overpayment.

(End of clause)

CONTRACT TERMS AND CONDITIONS REQUIRED
TO IMPLEMENT STATUTES OR EXECUTIVE ORDERS—COMMERCIAL ITEMS (OCT 2003)

*

52.212–4 Contract Terms and Conditions—
Commercial Items.

*

*

*

Contract Terms and Conditions—
Commercial Items (Oct. 2003)

*

*

*

*

*

*

(i) Payment.—(1) Items accepted. Payment
shall be made for items accepted by the Government that have been delivered to the delivery destinations set forth in this contract.
(2) Prompt payment. The Government will
make payment in accordance with the
Prompt Payment Act (31 U.S.C. 3903) and
prompt payment regulations at 5 CFR part
1315.

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(a) The Contractor shall comply with the
following Federal Acquisition Regulation
(FAR) clause, which is incorporated in this
contract by reference, to implement provisions of law or Executive orders applicable to
acquisitions of commercial items: 52.233–3,
Protest after Award (AUG 1996) (31 U.S.C.
3553).
(b) The Contractor shall comply with the
FAR clauses in this paragraph (b) that 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: [Contracting Officer check as appropriate.]
l(1) 52.203–6, Restrictions on Subcontractor Sales to the Government (JUL 1995),
with Alternate I (OCT 1995) (41 U.S.C. 253g
and 10 U.S.C. 2402).
l(2) 52.219–3, Notice of Total HUBZone
Set-Aside (JAN 1999) (15 U.S.C. 657a).
l(3) 52.219–4, Notice of Price Evaluation
Preference for HUBZone Small Business Concerns (JAN 1999) (if the offeror elects to
waive the preference, it shall so indicate in
its offer) (15 U.S.C. 657a).
l(4)(i) 52.219–5, Very Small Business SetAside (JUNE 2003) (Pub. L. 103–403, section
304, Small Business Reauthorization and
Amendments Act of 1994).
l(ii) Alternate I (MAR 1999) of 52.219–5.

EFFECTIVE DATE NOTE: At 68 FR 56683, Oct.
1, 2003, 52.212–4 was amended by revising the
date of the clause and paragraph (i) and removing the undesignated paragraph following paragraph (i), effective Oct. 31, 2003.
For the convenience of the user, the revised
text is set forth below:

*

*

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:

[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; 64 FR 10542,
Mar. 4, 1999; 66 FR 2139, Jan. 10, 2001; 66 FR
53485, Oct. 22, 2001; 66 FR 65350, Dec. 18, 2001;
68 FR 56675, Oct. 1, 2003]

*

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52.212–5

48 CFR Ch. 1 (10–1–03 Edition)

l(iii) Alternate II (JUNE 2003) of 52.219–5.
l(5)(i) 52.219–6, Notice of Total Small Business Set-Aside (JUNE 2003) (15 U.S.C. 644).
l(ii) Alternate I (OCT 1995) of 52.219–6.
l(6)(i) 52.219–7, Notice of Partial Small
Business Set-Aside (JUNE 2003) (15 U.S.C.
644).
l(ii) Alternate I (OCT 1995) of 52.219–7.
l(7) 52.219–8, Utilization of Small Business
Concerns (OCT 2000) (15 U.S.C. 637 (d)(2) and
(3)).
l(8)(i) 52.219–9, Small Business Subcontracting Plan (JAN 2002) (15 U.S.C. 637(d)(4)).
l(ii) Alternate I (OCT 2001) of 52.219–9.
l(iii) Alternate II (OCT 2001) of 52.219–9.
l(9) 52.219–14, Limitations on Subcontracting (DEC 1996) (15 U.S.C. 637(a)(14)).
l(10)(i) 52.219–23, Notice of Price Evaluation Adjustment for Small Disadvantaged
Business Concerns (JUNE 2003) (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).
l(ii) Alternate I (JUNE 2003) of 52.219–23.
l(11) 52.219–25, Small Disadvantaged Business Participation Program—Disadvantaged
Status and Reporting (OCT 1999) (Pub. L. 103–
355, section 7102, and 10 U.S.C. 2323).
l(12) 52.219–26, Small Disadvantaged Business Participation Program—Incentive Subcontracting (OCT 2000) (Pub. L. 103–355, section 7102, and 10 U.S.C. 2323).
l(13) 52.222–3, Convict Labor (JUNE 2003)
(E.O. 11755).
l(14) 52.222–19, Child Labor—Cooperation
with Authorities and Remedies (SEP 2002)
(E.O. 13126).
l(15) 52.222–21, Prohibition of Segregated
Facilities (FEB 1999).
l(16) 52.222–26, Equal Opportunity (APR
2002) (E.O. 11246).
l(17) 52.222–35, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (DEC
2001) (38 U.S.C. 4212).
l(18) 52.222–36, Affirmative Action for
Workers with Disabilities (JUN 1998) (29
U.S.C. 793).
l(19) 52.222–37, Employment Reports on
Special Disabled Veterans, Veterans of the
Vietnam Era, and Other Eligible Veterans
(DEC 2001) (38 U.S.C. 4212).
l(20)(i) 52.223–9, Estimate of Percentage of
Recovered Material Content for EPA-Designated Products (AUG 2000) (42 U.S.C.
6962(c)(3)(A)(ii)).
l(ii) Alternate I (AUG 2000) of 52.223–9 (42
U.S.C. 6962(i)(2)(C)).
l(21) 52.225–1, Buy American Act—Supplies
(JUNE 2003) (41 U.S.C. 10a–10d).
l(22)(i) 52.225–3, Buy American Act—North
American Free Trade Agreement—Israeli
Trade Act (JUNE 2003) (41 U.S.C. 10a–10d, 19
U.S.C. 3301 note, 19 U.S.C. 2112 note).
l(ii) Alternate I (MAY 2002) of 52.225–3.
l(iii) Alternate II (MAY 2002) of 52.225–3.

l(23) 52.225–5, Trade Agreements (JUNE
2003) (19 U.S.C. 2501, et seq., 19 U.S.C. 3301
note).
l(24) 52.225–13, Restrictions on Certain
Foreign Purchases (JUNE 2003) (E.O. 12722,
12724, 13059, 13067, 13121, and 13129).
l(25) 52.225–15, Sanctioned European Union
Country End Products (FEB 2000) (E.O.
12849).
l(26) 52.225–16, Sanctioned European Union
Country Services (FEB 2000) (E.O. 12849).
l(27) 52.232–29, Terms for Financing of
Purchases of Commercial Items (FEB 2002)
(41 U.S.C. 255(f), 10 U.S.C. 2307(f)).
l(28) 52.232–30, Installment Payments for
Commercial Items (OCT 1995) (41 U.S.C.
255(f), 10 U.S.C. 2307(f)).
l(29) 52.232–33, Payment by Electronic
Funds Transfer—Central Contractor Registration (OCT 2003) (31 U.S.C. 3332).
l(30) 52.232–34, Payment by Electronic
Funds Transfer—Other than Central Contractor Registration (MAY 1999) (31 U.S.C.
3332).
l(31) 52.232–36, Payment by Third Party
(MAY 1999) (31 U.S.C. 3332).
l(32) 52.239–1, Privacy or Security Safeguards (AUG 1996) (5 U.S.C. 552a).
l(33)(i) 52.247–64, Preference for Privately
Owned U.S.-Flag Commercial Vessels (APR
2003) (46 U.S.C. Appx 1241 and 10 U.S.C. 2631).
l(ii) Alternate I (APR 1984) of 52.247–64.
(c) The Contractor shall comply with the
FAR clauses in this paragraph (c), applicable
to commercial services, that 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:
[Contracting Officer check as appropriate.]
l(1) 52.222–41, Service Contract Act of 1965,
as Amended (MAY 1989) (41 U.S.C. 351, et
seq.).
l(2) 52.222–42, Statement of Equivalent
Rates for Federal Hires (MAY 1989) (29 U.S.C.
206 and 41 U.S.C. 351, et seq.).
l(3) 52.222–43, Fair Labor Standards Act
and Service Contract Act—Price Adjustment
(Multiple Year and Option Contracts) (MAY
1989) (29 U.S.C. 206 and 41 U.S.C. 351, et seq.).
l(4) 52.222–44, Fair Labor Standards Act
and Service Contract Act—Price Adjustment
(February 2002) (29 U.S.C. 206 and 41 U.S.C.
351, et seq.).
l(5) 52.222–47, SCA Minimum Wages and
Fringe Benefits Applicable to Successor Contract Pursuant to PreDecemberessor Contractor Collective Bargaining Agreements
(CBA) (May 1989) (41 U.S.C. 351, et seq.).
(d) Comptroller General Examination of
Record. The Contractor shall 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.

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Federal Acquisition Regulation

52.212–5

(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
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)(1) Notwithstanding the requirements of
the clauses in paragraphs (a), (b), (c), and (d)
of this clause, the Contractor is not required
to flow down any FAR clause, other than
those in paragraphs (i) through (vi) of this
paragraph in a subcontract for commercial
items. Unless otherwise indicated below, the
extent of the flow down shall be as required
by the clause—
(i) 52.219–8, Utilization of Small Business
Concerns (October 2000) (15 U.S.C. 637(d)(2)
and (3)), in all subcontracts that offer further subcontracting opportunities. If the
subcontract (except subcontracts to small
business concerns) exceeds $500,000 ($1,000,000
for construction of any public facility), the
subcontractor must include 52.219–8 in lower
tier subcontracts that offer subcontracting
opportunities.
(ii) 52.222–26, Equal Opportunity (April
2002) (E.O. 11246).
(iii) 52.222–35, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (December 2001) (38 U.S.C. 4212).
(iv) 52.222–36, Affirmative Action for Workers with Disabilities (June 1998) (29 U.S.C.
793).
(v) 52.222–41, Service Contract Act of 1965,
as Amended (May 1989), flow down required
for all subcontracts subject to the Service
Contract Act of 1965 (41 U.S.C. 351, et seq.).
(vi) 52.247–64, Preference for Privately
Owned U.S.-Flag Commercial Vessels (April
2003) (46 U.S.C. Appx 1241 and 10 U.S.C. 2631).

Flow down required in accordance with paragraph (d) of FAR clause 52.247–64.
(2) While not required, the contractor May
include in its subcontracts for commercial
items a minimal number of additional
clauses necessary to satisfy its contractual
obligations.

(End of clause)
Alternate I (Feb 2000). As prescribed in
12.301(b)(4), delete paragraph (d) from
the basic clause, redesignate paragraph
(e) as paragraph (d), and revise the reference to ‘‘paragraphs (a), (b), (c), or
(d) of this clause’’ in the redesignated
paragraph (d) to read ‘‘paragraphs (a),
(b), and (c) of this 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;
63 FR 70274, 70292, Dec. 18, 1998; 64 FR 10537,
10542, Mar. 4, 1999; 64 FR 72433, 72451, Dec. 27,
1999; 64 FR 72451, Dec. 27, 1999; 65 FR 24324,
Apr. 25, 2000; 65 FR 36021, 36028, June 6, 2000;
65 FR 46069, July 26, 2000; 66 FR 5348, Jan. 18,
2001; 66 FR 27417, May 16, 2001; 66 FR 53489,
Dec. 21, 2001; 67 FR 21536, Apr. 30, 2002; 68 FR
13203, Mar. 18, 2003; 68 FR 28097, May 22, 2003;
68 FR 56675, Oct. 1, 2003]
EFFECTIVE DATE NOTES: 1. At 68 FR 56685,
Oct. 1, 2003, § 52.212–5 was amended by revising the dates in the clause heading and in
paragraph (b)(23) to read ‘‘(Oct 2003)’’, effective Oct. 31, 2003.
2. At 68 FR 56686, Oct. 1, 2003, § 52.212–5 was
amended by revising the date of the clause
and paragraph (b)(24), effective Oct. 31, 2003.
For the convenience of the user, the revised
text is set forth below:
52.212–5 Contract Terms and Conditions Required to Implement Statutes or Executive Orders—Commercial Items.

*

*

*

*

CONTRACT TERMS AND CONDITIONS REQUIRED
TO IMPLEMENT STATUTES OR EXECUTIVE ORDERS—COMMERCIAL ITEMS (OCT. 2003)

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(b) * * *
(24) 52.225–13, Restrictions on Certain Foreign Purchases (Oct. 2003) (E.o.s, proclamations, and statutes administered by the Office of Foreign Assets Control of the Department of the Treasury).

*

*

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52.213–1

48 CFR Ch. 1 (10–1–03 Edition)
(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
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.’’

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;

(End of clause)
[62 FR 64927, Dec. 9, 1997]

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]

52.213–3

Notice To Supplier.

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

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Federal Acquisition Regulation

52.213–4

NOTICE TO SUPPLIER (APR 1984)

(vii) 52.223–5, Pollution Prevention and
Right-to-Know Information (Aug 2003) (E.O.
13148) (Applies to services performed on Federal facilities).
(iii) 52.222–35, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (DEC
2001) (38 U.S.C. 4212) (Applies to contracts of
$25,000 or more).
(iv) 52.222–36, Affirmative Action for Workers with Disabilities (June 1998) (29 U.S.C.
793). (Applies to contracts over $10,000, unless
the work is to be performed outside the
United States by employees recruited outside the United States.) (For purposes of this
clause, United States includes the 50 States,
the District of Columbia, Puerto Rico, the
Northern Mariana Islands, American Samoa,
Guam, the U.S. Virgin Islands, and Wake Island.)
(v) 52.222–37, Employment Reports on Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (DEC
2001) (38 U.S.C. 4212) (Applies to contracts of
$25,000 or more).
(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 that
are subject to the Service Contract Act and
will be performed in the United States, District of Columbia, Puerto Rico, the Northern
Mariana Islands, American Samoa, Guam,
the U.S. Virgin Islands, Johnston Island,
Wake Island, or the outer continental shelf
lands).
(vii) 52.223–5, Pollution Prevention and
Right-to-Know Information (APR 1998) (E.O.
12856) (Applies to services performed on Federal facilities).
(viii) 52.225–1, Buy American Act—Supplies
(June 2003) (41 U.S.C. 10a–10d) (Applies to
contracts for supplies, and to contracts for
services involving the furnishing of supplies,
for use in the United States or its outlying
areas, if the value of the supply contract or
supply portion of a service contract exceeds
the micro-purchase threshold and the acquisition—
(A) Is set aside for small business concerns;
or
(B) Cannot be set aside for small business
concerns (see 19.502–2), and does not exceed
$25,000.)
(ix) 52.232–33, Payment by Electronic Funds
Transfer—Central Contractor Registration
(Oct 2003). (Applies when the payment will be
made by electronic funds transfer (EFT) and
the payment office uses the Central Contractor Registration (CCR) database as its
source of EFT information.)
(x) 52.232–34, Payment by Electronic Funds
Transfer—Other than Central Contractor
Registration (May 1999). (Applies when the
payment will be made by EFT and the payment office does not use the CCR database as
its source of EFT information.)

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]

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)
(OCT 2003)
(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 (June 2003) (E.O.
11755).
(ii) 52.222–21, Prohibition of Segregated Facilities (Feb 1999) (E.O. 11246).
(iii) 52.222–26, Equal Opportunity (Apr 2002)
(E.O. 11246).
(iv) 52.225–13, Restrictions on Certain foreign Purchases (June 2003) (E.O.’s 12722,
12724, 13059, 13067, 13121, 13129).
(v) 52.233–3, Protest After Award (Aug 1996)
(31 U.S.C. 3553).
(2) Listed below are additional clauses that
apply:
(i) 52.232–1, Payments (Apr 1984).
(ii) 52.232–8, Discounts for Prompt Payment
(Feb 2002).
(iii) 52.232–11, Extras (Apr 1984).
(iv) 52.232–25, Prompt Payment (Feb 2002).
(v) 52.233–1, Disputes (Jul 2002).
(vi) 52.244–6, Subcontracts for Commercial
Items (Apr. 2003).
(vii) 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) 52.222–19, Child Labor—Cooperation with
Authorities and Remedies (Sept 2002) (E.O.
13126). (Applies to contracts for supplies exceeding the micro-purchase threshold.)

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52.213–4

48 CFR Ch. 1 (10–1–03 Edition)

(xi) 52.247–64, Preference for Privately
Owned U.S.-Flag Commercial Vessels (APR
2003) (46 U.S.C. Appx 1241). (Applies to supplies transported by ocean vessels (except for
the types of subcontracts listed at 47.504(d).)
(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):
llllllllllllllllllllllll
llllllllllllllllllllllll
[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; 64 FR 10542, Mar. 4, 1999; 64 FR
32749, June 17, 1999; 64 FR 72433, Dec, 27, 1999;
65 FR 24324, Apr. 25, 2000; 65 FR 36028, June 6,
2000; 66 FR 5349, Jan. 18, 2001; 66 FR 53489,
Oct. 22, 2001; 67 FR 65360, Dec. 18, 2001; 67 FR
6121, Feb. 8, 2002; 67 FR 13067, Mar. 20, 2002; 67
FR 21536, Apr. 30, 2002; 67 FR 43514, June 27,
2002; 67 FR 47635, July 19, 2002; 67 FR 56124,
Aug. 30, 2002; 68 FR 13203, Mar. 18, 2003; 68 FR
28098, May 22, 2003; 68 FR 28084, 28098, May 22,
2003; 68 FR 43870, July 24, 2003; 68 FR 56675,
Oct. 1, 2003]

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Federal Acquisition Regulation

52.214–5

EFFECTIVE DATE NOTES: 1. At 68 FR 56684,
Oct. 1, 2003, § 52.213–4 was amended by revising the date of the clause and paragraph
(a)(2)(iv), effective Oct. 31, 2003. For the convenience of the user, the revised text is set
forth below:

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; 67 FR 13056, Mar. 20,
2002]

52.213–4 Terms and Conditions—Simplified
Acquisitions (Other Than Commercial
Items).

52.214–4
*

*

*

*

*

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

Terms and Conditions—Simplified Acquisitions (Other Than Commercial Items) (Oct.
2003).

FALSE STATEMENTS IN BIDS (APR 1984)

(a) * * *
(2) * * *
(iv) 52.232–25, Prompt Payment (Oct. 2003).

*

*

*

*

False Statements in Bids.

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.

*

2. At 68 FR 56686, Oct. 1, 2003, § 52.213–4 was
amended by revising paragraph (a)(1)(iv), effective Oct. 31, 2003. For the convenience of
the user, the revised text is set forth below:

(End of provision)
[48 FR 42478, Sept. 19, 1983, as amended at 67
FR 13056, Mar. 20, 2002]

52.213–4 Terms and Conditions—Simplified
Acquisitions (Other Than Commercial
Items).

52.214–5

Submission of Bids.

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

*

*

*

*
SUBMISSION OF BIDS (MAR 1997)

(a) * * *
(1) * * *
(iv) 52.225–13, Restrictions on Certain Foreign Purchases (Oct. 2003) (E.o.s, proclamations, and statutes administered by the Office of Foreign Assets Control of the Department of the Treasury).

*

*

*

52.214–1—52.214–2

*

(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.

*

[Reserved]

52.214–3 Amendments
for Bids.

to

Invitations

As prescribed in 14.201–6(b)(1), 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

(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]

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52.214–6

48 CFR Ch. 1 (10–1–03 Edition)
considered at any time it is received and
may be accepted.
(c) Acceptable evidence to establish the
time of receipt at the Government installation includes the time/date stamp of that installation on the bid wrapper, other documentary evidence of receipt maintained by
the installation, or oral testimony or statements of Government personnel.
(d) If an emergency or unanticipated event
interrupts normal Government processes so
that bids cannot be received at the Government office designated for receipt of bids by
the exact time specified in the IFB and urgent Government requirements preclude
amendment of the IFB, 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.
(e) Bids may be withdrawn by written notice received at any time before the exact
time set for receipt of bids. If the IFB 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 at 52.214–31, 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 the person signs a receipt for the
bid.

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]

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 (NOV 1999)

(End of provision)
[64 FR 51840, Sept. 24, 1999]

(a) Bidders are responsible for submitting
bids, and any modifications or withdrawals,
so as to reach the Government office designated in the invitation for bids (IFB) by
the time specified in the IFB. If no time is
specified in the IFB, the time for receipt is
4:30 p.m., local time, for the designated Government office on the date that bids are due.
(b)(1) Any bid, modification, or withdrawal
received at the Government office designated
in the IFB after the exact time specified for
receipt of bids is ‘‘late’’ and will not be considered unless it is received before award is
made, the Contracting Officer determines
that accepting the late bid would not unduly
delay the acquisition; and—
(i) If it was transmitted through an electronic commerce method authorized by the
IFB, it 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; or
(ii) There is acceptable evidence to establish that it was received at the Government
installation designated for receipt of bids
and was under the Government’s control
prior to the time set for receipt of bids.
(2) However, a late modification of an otherwise successful bid that makes its terms
more favorable to the Government, will be

52.214–8

[Reserved]

52.214–9

[Reserved]

52.214–10 Contract
Award—Sealed
Bidding.
As prescribed in 14.201–6(e), 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

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Federal Acquisition Regulation

52.214–14

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.

(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]

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)
[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; 68 FR 43857,
July 24, 2003]

52.214–11

[Reserved]

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
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.

(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]

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, b
intends, b does not intend [check applicable

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52.214–15

48 CFR Ch. 1 (10–1–03 Edition)

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:
Place of Performance
(Street Address, City, County, State, Zip Code)

(c) The Government requires a minimum
acceptance period of l 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.

Name and Address of
Owner and Operator of the
Plant or Facility if Other
than Bidder

THE BIDDER ALLOWS THE FOLLOWING
ACCEPTANCE PERIOD: l 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)
[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 1746, Jan. 11, 1985; 50 FR 52429, Dec. 23,
1985]

52.214–15
Bids.

Period

for

Acceptance

(End of provision)

of

52.214–17

[Reserved]

52.214–18 Preparation
struction.

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

of

Bids—Con-

As prescribed in 14.201–6(l), 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
l 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.

PREPARATION OF BIDS—CONSTRUCTION (APR
1984)

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:

(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.

MINIMUM BID ACCEPTANCE PERIOD (APR 1984)

(End of provision)

(End of provision)
[48 FR 42478, Sept. 19, 1983, as amended at 54
FR 48991, Nov. 28, 1989]

52.214–16 Minimum
Period.

Bid

Acceptance

(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.

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

52.214–19 Contract
Award—Sealed
Bidding—Construction.
As prescribed in 14.201–6(m), insert
the following provision:

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Federal Acquisition Regulation

52.214–21

CONTRACT AWARD—SEALED BIDDING—
CONSTRUCTION (AUG 1996)

livered 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.

(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
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)
Alternate I (May 2002). As prescribed
in 14.201–6(o)(2)(i), insert the following
Alternate I:
(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 ll [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.

(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]

Alternate II (May 2002). As prescribed
in 14.201–6(o)(2)(ii), insert the following
Alternate II:

52.214–20 Bid Samples.
As prescribed in 14.201–6(o)(1), insert
the following 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 ll [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.

BID SAMPLES (APR 2002)
(a) Bid sample means a product sample required to be submitted by a bidder to show
those characteristics of the offered products
that cannot adequately be described by specifications, purchase descriptions, or the invitation for bid (e.g., balance, facility of use, or
pattern).
(b) Bidders must furnish bid samples as
part of the bid. The Government must receive the bid samples by the time specified
in the invitation for bids. If the bidder fails
to submit samples on time, the Government
will reject the bid, except that the Contracting Officer will consider a late sample
sent by mail under the Late Submissions,
Modifications, and Withdrawals of Bids provision of this solicitation.
(c) The Government will test or evaluate
bid samples to determine compliance with
all the characteristics listed for examination
in this solicitation. The Government will reject the bid when the sample fails to conform
to the required characteristics. Products de-

[48 FR 42478, Sept. 19, 1983, as amended at 67
FR 13056, Mar. 20, 2002; 67 FR 21536, Apr. 30,
2002]

52.214–21

Descriptive Literature.

As prescribed in 14.201–6(p)(1), insert
the following provision:

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52.214–22

48 CFR Ch. 1 (10–1–03 Edition)

DESCRIPTIVE LITERATURE (APR 2002)

basis of a previously supplied product under
paragraph (f) of this provision. 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. The Government will disregard a bidder’s request for a waiver under
paragraph (f) if that bidder has submitted
the descriptive literature requested under
this solicitation.

(a) Descriptive literature, as used in this provision, means information furnished by a
bidder, such as cuts, illustrations, drawings,
and brochures, that shows a product’s characteristics or construction or explains its operation. The term includes only that information required to evaluate the acceptability of the product and excludes other information for operating or maintaining the
product.
(b) 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 to significant elements such as—
(1) Design;
(2) Materials;
(3) Components;
(4) Performance characteristics; and
(5) Methods of manufacture, assembly, construction, or operation.
(c) Descriptive literature, required elsewhere in this solicitation, shall 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.
(d) If the bidder fails to submit descriptive
literature on time, the Government will reject 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.
(e) If the descriptive literature fails to
show that the product offered conforms to
the requirements of the solicitation, the
Government will reject the bid.

[67 FR 13056, Mar. 20, 2002]

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]

(End of provision)

52.214–23 Late submissions, modifications, revisions, and withdrawals of
technical proposals under two-step
sealed bidding.

Alternate I (Apr 2002). As prescribed in
14.201–6(p)(2), add the following paragraphs (f) and (g) to the basic provision:

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

(f) The Contracting Officer may waive the
requirement for furnishing descriptive literature if the offeror has supplied a product
that is the same as that required by this solicitation under a prior contract. A bidder
that requests a waiver of this requirement
shall provide the following information:
Prior contract number lllllllllll
Date of prior contract llllllllllll
Contract line item number of product
s supplied llllllllllllllllll
Name and address of Government activity to
which delivery was made lllllllll
Date of final delivery product supplied
llllllllllllllllllllllll
(g) Bidders shall submit bids on the basis
of required descriptive literature or on the

LATE

SUBMISSIONS, MODIFICATIONS, REVISIONS, AND WITHDRAWALS OF TECHNICAL
PROPOSALS UNDER TWO-STEP SEALED BIDDING (NOV 1999)

(a) Bidders are responsible for submitting
technical proposals, and any modifications
or revisions, so as to reach the Government
office designated in the request for technical
proposals by the time specified in the invitation for bids (IFB). If no time is specified in
the IFB, the time for receipt is 4:30 p.m.,
local time, for the designated Government
office on the date that bids or revisions are
due.

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Federal Acquisition Regulation

52.214–26

(b)(1) Any technical proposal under step
one of two-step sealed bidding or modification, revision, or withdrawal of such proposal received at the Government office designated in the request for technical proposals after the exact time specified for receipt will not be considered unless the Contracting Officer determines that accepting
the late technical proposal would not unduly
delay the acquisition; and—
(i) If it was transmitted through an electronic commerce method authorized by the
request for technical proposals, it 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
(ii) There is acceptable evidence to establish that it was received at the Government
installation designated for receipt of offers
and was under the Government’s control
prior to the time set for receipt; or
(iii) It is the only proposal received and it
is negotiated under part 15 of the Federal Acquisition Regulation.
(2) However, a late modification 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.
(c) Acceptable evidence to establish the
time of receipt at the Government installation includes the time/date stamp of that installation on the technical proposal wrapper,
other documentary evidence of receipt maintained by the installation, or oral testimony
or statements of Government personnel.
(d) If an emergency or unanticipated event
interrupts normal Government processes so
that technical proposals cannot be received
at the Government office designated for receipt of technical proposals by the exact
time specified in the request for technical
proposals, and urgent Government requirements preclude amendment of the request
for technical proposals, the time specified
for receipt of technical proposals will be
deemed to be extended to the same time of
day specified in the request for technical
proposals on the first work day on which
normal Government processes resume.
(e) Technical proposals may be withdrawn
by written notice received at any time before
the exact time set for receipt of technical
proposals. If the request for technical proposals authorizes facsimile technical proposals, they may be withdrawn via facsimile
received at any time before the exact time
set for receipt of proposals, subject to the
conditions specified in the provision at
52.214–31, Facsimile Bids. A technical proposal may be withdrawn in person by a bidder or its authorized representative if, before
the exact time set for receipt of technical
proposals, the identity of the person requesting withdrawal is established and the person
signs a receipt for the technical proposal.

(End of provision)
[64 FR 51840, Sept. 24, 1999]

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
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]

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 ll [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]

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

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52.214–27

48 CFR Ch. 1 (10–1–03 Edition)

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.

PRICE REDUCTION FOR DEFECTIVE COST OR
DATA—MODIFICATIONS—SEALED
PRICING
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
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

(End of clause)
[60 FR 42651, Aug. 16, 1995; 60 FR 44548, Aug.
28, 1995; 62 FR 51271, Sept. 30, 1997]

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:

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Federal Acquisition Regulation

52.214–29

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.

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
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]

(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]

52.214–29 Order
of
Sealed Bidding.

Precedence—

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

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52.214–30

48 CFR Ch. 1 (10–1–03 Edition)

ORDER OF PRECEDENCE—SEALED BIDDING
(JAN 1986)

(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:
llllllllllllllllllllllll
(2) Compatibility characteristics of receiving facsimile equipment (e.g., make and
model number, receiving speed, communications protocol):
llllllllllllllllllllllll
llllllllllllllllllllllll
(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.
(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.

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]

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):
b (a) Submitted to the contracting office
issuing this solicitation, annual representations and certifications dated lll [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]:
llllllllllllllllllllllll
b (b) Enclosed its annual representations
and certifications.

(End of provision)
[54 FR 48992, Nov. 28, 1989, as amended at 64
FR 51841, Sept. 24, 1999]

(End of provision)

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

[62 FR 238, Jan. 2, 1997]

52.214–31

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

Facsimile Bids.

As prescribed in 14.201–6(v), insert the
following provision:
FACSIMILE BIDS (DEC 1989)

LATE SUBMISSIONS, MODIFICATIONS, AND
WITHDRAWALS OF BIDS (OVERSEAS) (MAY
1997)

(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.

(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.

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Federal Acquisition Regulation

52.214–33

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.

vitation 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
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.

(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]

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 in-

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48 CFR Ch. 1 (10–1–03 Edition)
In writing, writing, or written means any
worded or numbered expression that 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).
(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.

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]

52.214–34 Submission of Offers in the
English Language.
As prescribed in 14.201–6(w), 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; 64 FR 51841,
Sept. 24, 1999; 64 FR 72433, Dec. 27, 1999]

52.214–35 Submission of Offers in U.S.
Currency.
As prescribed in 14.201–6(x), 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; 64 FR 51841, Sept. 24, 1999; 64 FR 72433,
Dec. 27, 1999]

52.215–1 Instructions
to
Offerors—
Competitive Acquisition.
As prescribed in 15.209(a), insert the
following provision:
INSTRUCTIONS TO OFFERORS—COMPETITIVE
ACQUISITIONS (MAY 2001)
(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.

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Federal Acquisition Regulation

52.215–1

(3) Submission, modification, revision, and
withdrawal of proposals. (i) Offerors are responsible for submitting proposals, and any
modifications or revisions, so as to reach the
Government office designated in the solicitation by the time specified in the solicitation.
If no time is specified in the solicitation, the
time for receipt is 4:30 p.m., local time, for
the designated Government office on the
date that proposal or revision is due.
(ii)(A) Any proposal, modification, or revision, received at the Government office designated in the solicitation after the exact
time specified for receipt of offers is ‘‘late’’
and will not be considered unless it is received before award is made, the Contracting
Officer determines that accepting the late
offer would not unduly delay the acquisition;
and—
(1) If it was transmitted through an electronic commerce method authorized by the
solicitation, it 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
(2) There is acceptable evidence to establish that it was received at the Government
installation designated for receipt of offers
and was under the Government’s control
prior to the time set for receipt of offers; or
(3) It is the only proposal received.
(B) However, a late modification 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.
(iii) 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.
(iv) 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, 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.
(v) Proposals may be withdrawn by written
notice received at any time before award.
Oral proposals in response to oral solicitations may be withdrawn orally. 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 at
52.215–5, Facsimile Proposals. Proposals may
be withdrawn in person by an offeror or an
authorized representative, if the identity of

the person requesting withdrawal is established and the person signs a receipt for the
proposal before award.
(4) Unless otherwise specified in the solicitation, the offeror may propose to provide
any item or combination of items.
(5) Offerors shall submit proposals in response to this solicitation in English, unless
otherwise permitted by the solicitation, and
in U.S. dollars, unless the provision at FAR
52.225–17, Evaluation of Foreign Currency Offers, is included in 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.

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52.215–2

48 CFR Ch. 1 (10–1–03 Edition)

(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.
(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; 64 FR 51841, Sept.
24, 1999, as amended at 64 FR 72433, 72451,
Dec. 27, 1999; 66 FR 2135, Jan. 10, 2001]

52.215–2 Audit and Records—Negotiation.
As prescribed in 15.209(b), insert the
following clause:
AUDIT AND RECORDS—NEGOTIATION (JUN 1999)
(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,

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Federal Acquisition Regulation

52.215–2

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
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 pe-

riod required by statute or by other clauses
of this contract. In addition—
(1) If this contract is completely or partially terminated, the Contractor shall make
available the records relating to the work
terminated until 3 years after any resulting
final termination settlement; and
(2) The Contractor shall make available
records relating to appeals under the Disputes clause or to litigation or the settlement of claims arising under or relating to
this contract 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 (June 1999). As prescribed in 15.209(b)(4), delete paragraph
(d) of the basic clause and redesignate
the remaining paragraphs accordingly,
and substitute the following paragraph
(e) for the redesignated paragraph (e)
of the basic clause:
(e) 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), and (d) of
this clause, for examination, audit, or reproduction, until 3 years after final payment
under this contract or for any shorter period

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48 CFR Ch. 1 (10–1–03 Edition)

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 Contractor shall make
available the records relating to the work
terminated until 3 years after any resulting
final termination settlement; and
(2) The Contractor shall make available
records relating to appeals under the Disputes clause or to litigation or the settlement of claims arising under or relating to
this contract until such appeals, litigation,
or claims are finally resolved.

(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.

[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; 64 FR 32749, June 17, 1999]

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]

52.215–6

PLACE OF PERFORMANCE (OCT 1997)
(a) The offeror or respondent, in the performance of any contract resulting from this
solicitation, b intends, b 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:

(End of provision)
[62 FR 51261, Sept. 30, 1997]

52.215–4

[Reserved]

52.215–5

Facsimile Proposals.

Place of Performance.

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

As prescribed in 15.209(e), insert the
following provision:
FACSIMILE PROPOSALS (OCT 1997)

Place of performance (street
address, city, state, county,
zip code)

(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.

Name and address of owner
and operator of the plant or
facility if other than offeror or
respondent

(End of provision)
[62 FR 51261, Sept. 30, 1997]

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52.215–10
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.

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]:
b (a) Submitted to the contracting office
issuing this solicitation, annual representations and certifications dated lll [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]:
b (b) Enclosed its annual representations
and certifications.

(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.

(End of provision)
[62 FR 51261, Sept. 30, 1997]

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.

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.

(End of clause)
[62 FR 51261, Sept. 30, 1997]

52.215–9 Changes or Additions to
Make-or-Buy Program.
As prescribed in 15.408(a), insert the
following clause:

[62 FR 51261, Sept. 30, 1997]

CHANGES OR ADDITIONS TO MAKE-OR-BUY
PROGRAM (OCT 1997)

52.215–10 Price Reduction for Defective Cost or Pricing Data.

(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

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,

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48 CFR Ch. 1 (10–1–03 Edition)

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
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]

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

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52.215–12

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
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 Cur-

rent 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]

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

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52.215–13

48 CFR Ch. 1 (10–1–03 Edition)

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]

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 architectengineer 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)
[62 FR 51263, Sept. 30, 1997]

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
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)
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]

52.215–15 Pension adjustments
asset reversions.

As prescribed in 15.408(g), insert the
following clause:
PENSION ADJUSTMENTS AND ASSET
REVERSIONS (DEC 1998)
(a) The Contractor shall promptly notify
the Contracting Officer in writing when it
determines that it will terminate a definedbenefit pension plan or otherwise recapture
such pension fund assets.

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Federal Acquisition Regulation

52.215–19

(b) For segment closings, pension plan terminations, or curtailment of benefits, the
adjustment amount shall be the amount
measured, assigned, and allocated in accordance with 48 CFR 9904.413–50(c)(12) for contracts and subcontracts that are subject to
Cost Accounting Standards (CAS) Board
rules and regulations (48 CFR Chapter 99).
For contracts and subcontracts that are not
subject to CAS, the adjustment amount shall
be the amount measured, assigned, and allocated in accordance with 48 CFR 9904.413–
50(c)(12), except the numerator of the fraction at 48 CFR 9904.413–50(c)(12)(vi) shall be
the sum of the pension plan costs allocated
to all non-CAS-covered contracts and subcontracts that are subject to Federal Acquisition Regulation (FAR) Subpart 31.2 or for
which cost or pricing data were submitted.
(c) For all other situations where assets revert to the Contractor, or such assets are
constructively received by it for any reason,
the Contractor shall, at the Government’s
option, make a refund or give a credit to the
Government for its equitable share of the
gross amount withdrawn. The Government’s
equitable share shall reflect the Government’s participation in pension costs
through those contracts for which cost or
pricing data were submitted or that are subject to FAR Subpart 31.2.
(d) 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).

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.

(End of clause)
[52 FR 35669, Sept. 22, 1987. Redesignated and
amended at 62 FR 51263, Sept. 30, 1997]

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)
[63 FR 58598, Oct. 30, 1998]

52.215–16 Facilities
Money.

Capital

Cost

of

(End of clause)

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

[62 FR 51263, Sept. 30, 1997]

FACILITIES CAPITAL COST OF MONEY (JUNE
2003)

52.215–19 Notification of Ownership
Changes.
As prescribed in 15.408(k), insert the
following clause:

(a) Facilities capital cost of money will be
an allowable cost under the contemplated
contract, if the criteria for allowability in
FAR 31.205–10(b) 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.

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

(End of provision)
[52 FR 35669, Sept. 22, 1987. Redesignated and
amended at 62 FR 51263, Sept. 30, 1997; 68 FR
28092, May 22, 2003]

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52.215–20

48 CFR Ch. 1 (10–1–03 Edition)

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).

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
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 clause)
[62 FR 51264, Sept. 30, 1997]

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

(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

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52.215–21
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
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.

(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]

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

(End of clause)
Alternate I (OCT 1997). As prescribed
in 15.408(m), substitute the following

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48 CFR Ch. 1 (10–1–03 Edition)

paragraph (b)(1) for paragraph (b)(1) of
the basic clause.

ECONOMIC PRICE ADJUSTMENT—STANDARD
SUPPLIES (JAN 1997)

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

(a) The Contractor warrants that the unit
price stated in the Schedule for ll [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
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

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]

52.215–22—52.215–42

[Reserved]

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
lll [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]

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.

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52.216–4

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.

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
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]

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 ll [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

(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]

52.216–4 Economic Price Adjustment—
Labor and Material.
As prescribed in 16.203–4(c), when contracting by negotiation, insert a clause

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52.216–5

48 CFR Ch. 1 (10–1–03 Edition)
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
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.

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

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 62
FR 238, Jan. 2, 1997]

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.

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Federal Acquisition Regulation

52.216–5

(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 ll, [see
Note (1)] and the second and each succeeding
period shall extend for ll [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 l
nor less than l [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 lll 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 sub-

mittal 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
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

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48 CFR Ch. 1 (10–1–03 Edition)

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.
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]

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 ll [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
l
[Contracting Officer insert number of days]

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52.216–6

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
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.

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48 CFR Ch. 1 (10–1–03 Edition)

(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.

ment request to ensure compliance with the
terms and conditions of the contract, the
designated payment office is not compelled
to make payment by the specified due date.
(b) Reimbursing costs. (1) For the purpose of
reimbursing allowable costs (except as provided in paragraph (b)(2) of the clause, 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) Supplies and services purchased directly for the contract and associated financing payments to subcontractors, provided
payments determined due will be made—
(1) In accordance with the terms and conditions of a subcontract or invoice; and
(2) Ordinarily within 30 days of the submission of the Contractor’s payment request to
the Government;
(B) Materials issued from the Contractor’s
inventory and placed in the production process for use on the contract;
(C) Direct labor;
(D) Direct travel;
(E) Other direct in-house costs; and
(F) 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 financing payments
that have been paid by cash, check, or other
forms of payment to subcontractors.
(2) Accrued costs of Contractor contributions under employee pension plans shall be
excluded until actually paid unless—
(i) The Contractor’s practice is to make
contributions to the retirement fund quarterly or more frequently; and
(ii) The contribution does not remain unpaid 30 days after the end of the applicable
quarter or shorter payment period (any contribution remaining unpaid shall be excluded
from the Contractor’s indirect costs for payment purposes).
(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

(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]

52.216–7 Allowable Cost and Payment.
As prescribed in 16.307(a), insert the
following clause:
ALLOWABLE COST AND PAYMENT (DEC 2002)
(a) Invoicing. (1) The Government will
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 Federal Acquisition Regulation (FAR) subpart 31.2 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.
(2) Contract financing payments are not
subject to the interest penalty provisions of
the Prompt Payment Act. Interim payments
made prior to the final payment under the
contract are contract financing payments,
except interim payments if this contract
contains Alternate I to the clause at 52.232–
25.
(3) The designated payment office will
make interim payments for contract financing on the llll[Contracting Officer insert
day as prescribed by agency head; if not prescribed, insert ‘‘30th’’] day after the designated billing office receives a proper payment request.
In the event that the Government requires
an audit or other review of a specific pay-

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52.216–7

Government shall be disregarded for purposes of cost-reimbursement under this
clause.
(c) Small business concerns. A small business
concern may receive more frequent payments than every 2 weeks.
(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 6month 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) Failure by the parties to agree on a
final annual indirect cost rate shall be a dispute within the meaning of the Disputes
clause.
(5) Within 120 days (or longer period if approved in writing by the Contracting Officer)
after settlement of the final annual indirect
cost rates for all years of a physically complete contract, the Contractor shall submit a
completion invoice or voucher to reflect the
settled amounts and rates.
(6)(i) If the Contractor fails to submit a
completion invoice or voucher within the
time specified in paragraph (d)(5) of this
clause, the Contracting Officer may—
(A) Determine the amounts due to the Contractor under the contract; and

(B) Record this determination in a unilateral modification to the contract.
(ii) This determination constitutes the
final decision of the Contracting Officer in
accordance with 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)(5) 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
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;

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52.216–8

48 CFR Ch. 1 (10–1–03 Edition)

(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.

$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)
(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:

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

(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.

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

52.216–9

Fixed Fee—Construction.

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
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.

[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; 65 FR 16283, Mar. 27,
2000; 66 FR 65360, Dec. 18, 2001; 67 FR 6119,
Feb. 8, 2002; 67 FR 70521, Nov. 22, 2002]

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

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52.216–10
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 l [Contracting Officer insert Contractor’s participation] cents for every dollar
that the total allowable cost is less than the
target cost or decreased by l [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 l [Contracting Officer insert percentage] percent or less than l
[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
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

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

52.216–10 Incentive Fee.
As prescribed in 16.307(d), insert the
following clause in solicitations and
contracts when a cost-plus-incentivefee 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

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52.216–11

48 CFR Ch. 1 (10–1–03 Edition)

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

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.

(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.
52.216–13 Allowable Cost and Payment—Facilities.
As prescribed in 16.307(g), insert the
following clause:

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.

ALLOWABLE COST AND PAYMENT—FACILITIES
(FEB 2002)
(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

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52.216–13

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. (1) The Government will
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.
(2) Contract financing payments are not
subject to the interest penalty provisions of
the Prompt Payment Act. Interim payments
made prior to the final payment under the
contract are contract financing payments,
except interim payments if this contract
contains Alternate I to the clause at 52.232–
25.
(3) The designated payment office will
make interim payments for contract financing on the llll[Contracting Officer insert
day as prescribed by agency head; if not prescribed, insert ‘‘30th’’] day after the designated billing office receives a proper payment request. In the event that the Government requires an audit or other review of a
specific payment request to ensure compliance with the terms and conditions of the
contract, the designated payment office is
not compelled to make payment by the specified due date.
(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 6month 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,

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52.216–14

48 CFR Ch. 1 (10–1–03 Edition)
any balance of allowable costs not previously
paid.

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—
(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.

[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; 66 FR 65361, Dec. 18, 2001]

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)
52.216–15 Predetermined Indirect Cost
Rates.
As prescribed in 16.307(i), insert the
following clause:

(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):

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 6month 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

(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

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52.216–16

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.
(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.

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 ll
[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 ll dollars
($ll). 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 ll
[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

(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]

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48 CFR Ch. 1 (10–1–03 Edition)

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.
(ii) If the total final negotiated cost is
greater than the total target cost, the adjustment is the total target profit, less l
[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 l [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.

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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.
(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 du-

ties 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]

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 ll
[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 ll dollars ($ll).
The prices of these items shown in the
Schedule are the initial target prices, which
include an initial target profit of l
[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.

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52.216–17

48 CFR Ch. 1 (10–1–03 Edition)

(c) Submitting data for establishing the firm
fixed price or a final profit adjustment formula.
(1) Within l [Contracting Officer insert number of days] days after the end of the month
in which the Contractor has completed ll
[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
(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 para-

graph (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 l
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 l percent or more than l 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 l 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 l
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 ll [Contracting Officer

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52.216–17

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;
(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).

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48 CFR Ch. 1 (10–1–03 Edition)

(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
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

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Federal Acquisition Regulation

52.216–21

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]

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 lll through lll [insert dates].
(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]

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 ll
[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
ll [insert dollar figure or quantity];
(2) Any order for a combination of items in
excess of ll [insert dollar figure or quantity];
or
(3) A series of orders from the same ordering office within l 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 require-

ment 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 l 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]

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, indefinitedelivery 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 ll [insert date].

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 49727, Sept. 26, 1995]

52.216–21

Requirements.

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

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52.216–21

48 CFR Ch. 1 (10–1–03 Edition)

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
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 ll [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:

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Federal Acquisition Regulation

52.216–25

(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.
(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]

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 ll [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]

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 ll [insert
date]. Upon acceptance by both parties, the
Contractor shall proceed with performance
of the work, including purchase of necessary
materials.

(End of clause)
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 ll dollars.
(b) The maximum amount for which the
Government shall be liable if this contract is
terminated is ll dollars.

(End of clause)
52.216–25 Contract Definitization.
As prescribed in 16.603–4(b)(3), insert
the following clause:
CONTRACT DEFINITIZATION (OCT 1997)
(a) A ll [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

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52.216–26

48 CFR Ch. 1 (10–1–03 Edition)

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 ll [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]:
llllllllllllllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll
(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
ll [insert price ceiling or firm fixed price] in

no event to exceed ll [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]

52.216–26 Payments of Allowable Costs
Before Definitization.
As prescribed in 16.603–4(c), insert the
following clause:
PAYMENTS OF ALLOWABLE COSTS BEFORE
DEFINITIZATION (DEC 2002)
(a) Reimbursement rate. Pending the placing
of the definitive contract referred to in this
letter contract, the Government will
promptly reimburse the Contractor for all
allowable costs under this contract at the
following rates:
(1) One hundred percent of approved costs
representing financing payments to subcontractors under fixed-price subcontracts,
provided that the Government’s payments to
the Contractor will 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;

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Federal Acquisition Regulation

52.217–2

(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) Supplies and services purchased directly
for the contract and associated financing
payments to subcontractors, provided payments determined due will be made—
(A) In accordance with the terms and conditions of a subcontract or invoice; and
(B) Ordinarily within 30 days of the submission of the Contractor’s payment request
to the Government;
(ii) Materials issued from the Contractor’s
stores inventory and placed in the production process for use on the contract;
(iii) Direct labor;
(iv) Direct travel;
(v) Other direct in-house costs; and
(vi) 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 financing payments that
the Contractor has paid by cash, check, or
other forms of payment to subcontractors.
(e) Small business concerns. A small business
concern may receive more frequent payments than every 2 weeks.
(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)
[48 FR 42478, Sept. 19, 1983, as amended at 65
FR 16283, Mar. 27, 2000; 67 FR 70521, Nov. 22,
2002]

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]

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]

52.217–1

[Reserved]

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.

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52.217–3

48 CFR Ch. 1 (10–1–03 Edition)

(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;
(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]

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)
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]

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]

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Federal Acquisition Regulation

52.219–1

52.217–6 Option for Increased Quantity.
As prescribed in 17.208(d), insert a
clause substantially the same as the
following:

tracting Officer may exercise the option by
written notice to the Contractor withinl
[insert the period of time within which the
Contracting Officer may exercise the option].

(End of clause)

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 ll [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.

[54 FR 29283, July 11, 1989, as amended at 64
51843, Sept. 24, 1999]

(End of clause)

(a) The Government may extend the term
of this contract by written notice to the
Contractor within l [insert the period of
time within which the Contracting Officer
may exercise the option]; provided that the
Government gives the Contractor a preliminary written notice of its intent to extend at
least l days [60 days unless a different number of days is inserted] 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 clause.
(c) The total duration of this contract, including the exercise of any options under
this clause, shall not exceed l (months)
(years).

[54 FR 5058, Jan. 31, 1989]

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
ll [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.

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 2000)

(End of clause)
[54 FR 5058, Jan. 31, 1989, as amended at 64
FR 51843, Sept. 24, 1999; 65 FR 16286, Mar. 27,
2000]

52.218

(End of clause)
[54 FR 5058, Jan. 31, 1989]

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 (NOV 1999)
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 Con-

[Reserved]

52.219–1 Small Business Program Representations.
As prescribed in 19.307(a)(1), insert
the following provision:
SMALL BUSINESS PROGRAM REPRESENTATIONS
(APR 2002)
(a)(1) The North American Industry Classification System (NAICS) code for this acquisition is—[insert NAICS code].
(2) The small business size standard is
llll (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.

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52.219–1

48 CFR Ch. 1 (10–1–03 Edition)

(b) Representations. (1) The offeror represents as part of its offer that it b is, b is
not a small business concern.
(2) (Complete only if the offeror represented itself as a small business concern in
paragraph (b)(1) of this provision.) The offeror represents, for general statistical purposes, that it b is, b is not, a small disadvantaged business concern as defined in 13
CFR 124.1002.
(3) (Complete only if the 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 b is,
b is not a women-owned small business concern.
(4) [Complete only if the 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 [ ] is, [ ] is not
a veteran-owned small business concern.
(5) [Complete only if the offeror represented
itself as a veteran-owned small business concern
in paragraph (b)(4) of this provision.] The offeror represents as part of its offer that it [
] is, [ ] is not a service-disabled veteranowned small business concern.
(6) [Complete only if the offeror represented
itself as a small business concern in paragraph
(b)(1) of this provision.] The offeror represents, as part of its offer, that—
(i) It [] is, [] is not a HUBZone small business concern listed, on the date of this representation, on the List of Qualified
HUBZone Small Business Concerns maintained by the Small Business Administration, and no material change in ownership
and control, principal office, or HUBZone
employee percentage has occurred since it
was certified by the Small Business Administration in accordance with 13 CFR part 126;
and
(ii) It [] is, [] is not a joint venture that
complies with the requirements of 13 CFR
part 126, and the representation in paragraph
(b)(6)(i) of this provision is accurate for the
HUBZone small business concern or concerns
that are participating in the joint venture.
[The offeror shall enter the name or names of
the HUBZone small business concern or concerns that are participating in the joint venture:llllll.] Each HUBZone small business concern participating in the joint venture shall submit a separate signed copy of
the HUBZone representation.
(c) Definitions. As used in this provision—
Service-disabled veteran-owned small business
concern—
(1) Means a small business concern—
(i) Not less than 51 percent of which is
owned by one or more service-disabled veterans or, in the case of any publicly owned
business, not less than 51 percent of the
stock of which is owned by one or more service-disabled veterans; and
(ii) The management and daily business operations of which are controlled by one or

more service-disabled veterans or, in the
case of a veteran with permanent and severe
disability, the spouse or permanent caregiver of such veteran.
(2) Service-disabled veteran means a veteran, as defined in 38 U.S.C. 101(2), with a disability that is service-connected, as defined
in 38 U.S.C. 101(16).
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 the size standard in paragraph
(a) of this provision.
Veteran-owned small business concern means
a small business concern—
(1) Not less than 51 percent of which is
owned by one or more veterans (as defined at
38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent
of the stock of which is owned by one or
more veterans; and
(2) The management and daily business operations of which are controlled by one or
more veterans.
Women-owned small business concern means
a small business concern—
(1) That 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.
(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,
HUBZone small, small disadvantaged, or
women-owned small 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 2002). As prescribed in
19.307(a)(2), add the following paragraph (b)(7) to the basic provision:

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Federal Acquisition Regulation

52.219–3

(7) [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:
ll Black American.
ll Hispanic American.
ll Native American (American Indians,
Eskimos, Aleuts, or Native Hawaiians).
ll 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).
ll Subcontinent Asian (Asian-Indian)
American (persons with origins from India,
Pakistan, Bangladesh, Sri Lanka, Bhutan,
the Maldives Islands, or Nepal).
ll 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; 63 FR 70274, Dec. 18, 1998; 64 FR 10533,
Mar. 4, 1999; 64 FR 32749, June 17, 1999; 64 FR
51832, Sept. 24, 1999; 65 FR 46058, July 26, 2000;
65 FR 60546, Oct. 11, 2000; 66 FR 2134, Jan. 10,
2001; 67 FR 13066, Mar. 20, 2002]

52.219–2

Equal Low Bids.

As prescribed in 19.307(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.
llllllllllllllllllllllll
llllllllllllllllllllllll
(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; 63 FR 70274, Dec. 18,
1998]

52.219–3 Notice of total HUBZone setaside.
As prescribed in 19.1308(a), insert the
following clause:
NOTICE OF TOTAL HUBZONE SET-ASIDE (JAN
1999)
(a) Definition. HUBZone small business concern, as used in this clause, means a small
business concern that appears on the List of
Qualified HUBZone Small Business Concerns
maintained by the Small Business Administration.
(b) General. (1) Offers are solicited only
from HUBZone small business concerns. Offers received from concerns that are not
HUBZone small business concerns shall not
be considered.
(2) Any award resulting from this solicitation will be made to a HUBZone small business concern.
(c) Agreement. A HUBZone small business
concern agrees that in the performance of
the contract, in the case of a contract for—
(1) Services (except construction), at least
50 percent of the cost of personnel for contract performance will be spent for employees of the concern or employees of other
HUBZone small business concerns;
(2) Supplies (other than acquisition from a
nonmanufacturer of the supplies), at least 50
percent of the cost of manufacturing, excluding the cost of materials, will be performed
by the concern or other HUBZone small business concerns;
(3) General construction, at least 15 percent of the cost of the contract performance
incurred for personnel will be spent on the
concern’s employees or the employees of
other HUBZone small business concerns; or
(4) Construction by special trade contractors, at least 25 percent of the cost of the
contract performance incurred for personnel
will be spent on the concern’s employees or
the employees of other HUBZone small business concerns.
(d) A HUBZone joint venture agrees that,
in the performance of the contract, the applicable percentage specified in paragraph (c)
of this clause will be performed by the
HUBZone small business participant or participants.
(e) A HUBZone small business concern nonmanufacturer agrees to furnish in performing this contract only end items manufactured or produced by HUBZone small
business manufacturer concerns. This paragraph does not apply in connection with construction or service contracts.

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52.219–4

48 CFR Ch. 1 (10–1–03 Edition)
(End of clause)

[63 FR 70274, Dec. 18, 1998]

52.219–4 Notice of price evaluation
preference for HUBZone small business concerns.
As prescribed in 19.1308(b), insert the
following clause:
NOTICE OF PRICE EVALUATION PREFERENCE
FOR HUBZONE SMALL BUSINESS CONCERNS
(JAN 1999)
(a) Definition. HUBZone small business concern, as used in this clause, means a small
business concern that appears on the List of
Qualified HUBZone Small Business Concerns
maintained by the Small Business Administration.
(b) Evaluation preference. (1) Offers will be
evaluated by adding a factor of 10 percent to
the price of all offers, except—
(i) Offers from HUBZone small business
concerns that have not waived the evaluation preference;
(ii) Otherwise successful offers from small
business concerns;
(iii) Otherwise successful offers of eligible
products under the Trade Agreements Act
when the dollar threshold for application of
the Act is exceeded (see 25.402 of the Federal
Acquisition Regulation (FAR)); and
(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.
(2) The factor of 10 percent 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.
(3) A concern that is both a HUBZone
small business concern and a small disadvantaged business concern will receive the benefit of both the HUBZone small business
price evaluation preference and the small
disadvantaged business price evaluation adjustment (see FAR clause 52.219–23). Each applicable price evaluation preference or adjustment shall be calculated independently
against an offeror’s base offer.
These individual preference amounts shall
be added together to arrive at the total evaluated price for that offer.
(c) Waiver of evaluation preference. A
HUBZone small business concern may elect
to waive the evaluation preference, 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 if
the offeror has waived the evaluation preference.
b Offeror elects to waive the evaluation
preference.

(d) Agreement. A HUBZone small business
concern agrees that in the performance of
the contract, in the case of a contract for
(1) Services (except construction), at least
50 percent of the cost of personnel for contract performance will be spent for employees of the concern or employees of other
HUBZone small business concerns;
(2) 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 or other HUBZone
small business concerns;
(3) General construction, at least 15 percent of the cost of the contract performance
incurred for personnel will be will be spent
on the concern’s employees or the employees
of other HUBZone small business concerns;
or
(4) Construction by special trade contractors, at least 25 percent of the cost of the
contract performance incurred for personnel
will be spent on the concern’s employees or
the employees of other HUBZone small business concerns.
(e) A HUBZone joint venture agrees that in
the performance of the contract, the applicable percentage specified in paragraph (d) of
this clause will be performed by the
HUBZone small business participant or participants.
(f) A HUBZone small business concern nonmanufacturer agrees to furnish in performing this contract only end items manufactured or produced by HUBZone small
business manufacturer concerns. This paragraph does not apply in connection with construction or service contracts.

End of clause)
[63 FR 70275, Dec. 18, 1998]

52.219–5 Very small business set-aside.
As prescribed in 19.905, insert the following clause:
VERY SMALL BUSINESS SET-ASIDE (JUNE 2003)
(a) Definition. Very Small Business Concern,
as used in this clause, means a concern
whose headquarters is located within the
geographical area served by a designated
SBA district (see 13 CFR 125.7(b)); which, together with its affiliates, has no more than
15 employees and has average annual receipts that do not exceed $1 million.
(b) Eligibility. (1) Only those firms
headquartered
in
the
llllllllllllllll Small Business
Administration
(SBA)
district
[Contracting Officer shall insert the applicable
SBA designated district. If the geographic area
is served by the SBA Los Angeles or Santa Ana
District offices, list both] are eligible for this
acquisition.

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52.219–7

(2) Offers or quotations under this acquisition are solicited from very small business
concerns only. Offers that are from other
than an eligible very small business concern
shall not be considered and shall be rejected.
The offeror represents that it is an eligible
very small business concern by submission of
an offer or quotation.
(c) Agreement. A very small business concern submitting an offer in its own name
shall furnish, in performing the contract,
only end items manufactured or produced by
small business concerns in the United States
or its outlying areas.

(End of clause)
Alternate I (Mar 1999). As prescribed
in 19.905(a), delete paragraph (c) of the
basic clause.
Alternate II (June 2003). As prescribed
in 19.905(b), substitute the following
paragraph (c) for paragraph (c) of the
basic clause:
(c) Agreement. A very small business concern submitting an offer in its own name
shall furnish, in performing the contract,
only end items manufactured or produced by
domestic firms in the United States or its
outlying areas.
[64 FR 10537, Mar. 4, 1999, as ameded at 68 FR
28085, May 22, 2003]

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
(JUNE 2003)
(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 shall
furnish, in performing the contract, only end
items manufactured or produced by small
business concerns in the United States or its
outlying areas. 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 to 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; 68 FR 28085,
May 22, 2003]

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 SETASIDE (JUNE 2003)
(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 setaside portion.
(c) Agreement. For the set-aside portion of
the acquisition, a small business concern
submitting an offer in its own name shall

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52.219–8

48 CFR Ch. 1 (10–1–03 Edition)

furnish, in performing the contract, only end
items manufactured or produced by small
business concerns in the United States or its
outlying areas. 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 to 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; 68 FR 28085, May 22, 2003]

52.219–8 Utilization of small business
concerns.
As prescribed in 19.708(a), insert the
following clause:
UTILIZATION OF SMALL BUSINESS CONCERNS
(OCT 2000)
(a) It is the policy of the United States
that small business concerns, veteran-owned
small business concerns, service-disabled
veteran-owned small business concerns,
HUBZone small business concerns, small disadvantaged business concerns, and womenowned small business concerns 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,
veteran-owned small business concerns, service-disabled veteran-owned small business
concerns, HUBZone small business concerns,
small disadvantaged business concerns, and
women-owned small business concerns.
(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 deter-

mine the extent of the Contractor’s compliance with this clause.
(c) Definitions. As used in this contract—
HUBZone small business concern means a
small business concern that appears on the
List of Qualified HUBZone Small Business
Concerns maintained by the Small Business
Administration.
Service-disabled veteran-owned small business
concern—
(1) Means a small business concern—
(i) Not less than 51 percent of which is
owned by one or more service-disabled veterans or, in the case of any publicly owned
business, not less than 51 percent of the
stock of which is owned by one or more service-disabled veterans; and
(ii) The management and daily business operations of which are controlled by one or
more service-disabled veterans or, in the
case of a veteran with permanent and severe
disability, the spouse or permanent caregiver of such veteran.
(2) Service-disabled veteran means a veteran, as defined in 38 U.S.C. 101(2), with a disability that is service-connected, as defined
in 38 U.S.C. 101(16).
Small business concern means a small business as defined pursuant to Section 3 of the
Small Business Act and relevant regulations
promulgated pursuant thereto.
Small disadvantaged business concern means
a small business concern that represents, as
part of its offer that—
(1) It has received certification as a small
disadvantaged business concern consistent
with 13 CFR part 124, subpart B;
(2) No material change in disadvantaged
ownership and control has occurred since its
certification;
(3) 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
(4) It is identified, on the date of its representation, as a certified small disadvantaged business in the database maintained
by the Small Business Administration (PRONet).
Veteran-owned small business concern means
a small business concern—
(1) Not less than 51 percent of which is
owned by one or more veterans (as defined at
38 U.S.C. 101(2)) or, in the case of any publicly owned business, not less than 51 percent
of the stock of which is owned by one or
more veterans; and
(2) The management and daily business operations of which are controlled by one or
more veterans.
Women-owned small business concern means
a small business concern—
(1) That 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

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Federal Acquisition Regulation

52.219–9

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) Contractors acting in good faith may
rely on written representations by their subcontractors regarding their status as a small
business concern, a veteran-owned small
business concern, a service-disabled veteranowned small business concern, a HUBZone
small business concern, a small disadvantaged business concern, or a women-owned
small business concern.

(End of clause)
[63 FR 70275, Dec. 18, 1998, as amended at 64
FR 3196, Jan. 20, 1999; 64 FR 10549, Mar. 4,
1999; 64 FR 32749, June 17, 1999; 64 FR 36224,
July 2, 1999; 65 FR 60546, Oct. 11, 2000]

52.219–9 Small
business
subcontracting plan.
As prescribed in 19.708(b), insert the
following clause:
SMALL BUSINESS SUBCONTRACTING PLAN (JAN
2002)
(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, that

separately addresses subcontracting with
small business, veteran-owned small business, service-disabled veteran-owned small
business, HUBZone small business concerns,
small disadvantaged business, and womenowned small business concerns. If the offeror
is submitting an individual contract plan,
the plan must separately address subcontracting with small business, veteran-owned
small business, service-disabled veteranowned small business, HUBZone small business, small disadvantaged business, 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, veteran-owned
small business, service-disabled veteranowned small business, HUBZone small business, small disadvantaged business, 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 veteran-owned small business concerns;
(iv) Total dollars planned to be subcontracted to service-disabled veteran-owned
small business;
(v) Total dollars planned to be subcontracted to HUBZone small business concerns;
(vi) Total dollars planned to be subcontracted to small disadvantaged business concerns; and
(vii) 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) Veteran-owned small business concerns;

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48 CFR Ch. 1 (10–1–03 Edition)

(iii) Service-disabled veteran-owned small
business concerns;
(iv) HUBZone small business concerns;
(v) Small disadvantaged business concerns;
and
(vi) 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 Access Network (PRO-Net) of the Small Business Administration (SBA), veterans service organizations, 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,
HUBZone, small disadvantaged, and womenowned small business trade associations). A
firm may rely on the information contained
in PRO-Net as an accurate representation of
a concern’s size and ownership characteristics for the purposes of maintaining a small,
veteran-owned small, service-disabled veteran-owned small, HUBZone small, small
disadvantaged, and women-owned small business source list. Use of PRO-Net as its source
list does not relieve a firm of its responsibilities (e.g., outreach, assistance, counseling,
or publicizing subcontracting opportunities)
in this clause.
(6) A statement as to whether or not the
offeror in 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) Veteran-owned small business concerns;
(iii) Service-disabled veteran-owned small
business concerns;
(iv) HUBZone small business concerns;
(v) Small disadvantaged business concerns;
and
(vi) 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 business, veteran-owned small business, service-disabled
veteran-owned small business, HUBZone
small business, small disadvantaged business, and women-owned small business concerns have an equitable opportunity to compete for subcontracts.
(9) Assurances that the offeror will include
the clause of this contract entitled ‘‘Utilization of Small Business Concerns’’ in all subcontracts that offer further subcontracting
opportunities, and that the offeror will require all subcontractors (except small busi-

ness 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 paragraph (j) of this
clause. The reports shall provide information
on subcontract awards to small business concerns, veteran-owned small business concerns, service-disabled veteran-owned small
business concerns, HUBZone small business
concerns, small disadvantaged business concerns, women-owned small business concerns, and Historically Black Colleges and
Universities and Minority Institutions. Reporting shall be in accordance with the instructions on the forms or as provided in
agency regulations.
(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 business, veteran-owned small business, service-disabled veteran-owned small
business, HUBZone small business, small disadvantaged business, 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., PRO-Net), guides, and
other data that identify small business, veteran-owned small business, service-disabled
veteran-owned small business, HUBZone
small business, small disadvantaged business, and women-owned small business concerns.
(ii) Organizations contacted in an attempt
to locate sources that are small business,
veteran-owned small business, service-disabled
veteran-owned
small
business,
HUBZone small business, small disadvantaged business, 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 veteran-owned small business
concerns were solicited and, if not, why not;

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(C) Whether service-disabled veteranowned small business concerns were solicited
and, if not, why not;
(D) Whether HUBZone small business concerns were solicited and, if not, why not;
(E) Whether small disadvantaged business
concerns were solicited and, if not, why not;
(F) Whether women-owned small business
concerns were solicited and, if not, why not;
and
(G) 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;
(C) Conferences and trade fairs to locate
small, HUBZone small, small disadvantaged,
and women-owned small business sources;
and
(D) Veterans service organizations.
(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 business, veteran-owned
small business, service-disabled veteranowned small business, HUBZone small business, small disadvantaged business, 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 business,
veteran-owned small business, service-disabled
veteran-owned
small
business,
HUBZone small business, small disadvantaged business, 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 business,
veteran-owned small business, service-disabled
veteran-owned
small
business,
HUBZone small business, small disadvantaged business, and women-owned small
business concerns in all ‘‘make-or-buy’’ decisions.
(3) Counsel and discuss subcontracting opportunities with representatives of small

business, veteran-owned small business, service-disabled veteran-owned small business,
HUBZone small business, small disadvantaged business, and women-owned small
business firms.
(4) Provide notice to subcontractors concerning penalties and remedies for misrepresentations of business status as small, veteran-owned small business, HUBZone 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 divisionwide 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
(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 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 of the
contracts with the awarding agency. It must
be submitted semi-annually for contracts

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48 CFR Ch. 1 (10–1–03 Edition)

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 North American
Industry Classification System (NAICS) Industry Subsector. For a commercial plan,
the Contractor may obtain from each of its
subcontractors a predominant NAICS Industry Subsector and report all awards to that
subcontractor under its predominant NAICS
Industry Subsector.

(End of clause)
Alternate I (Oct 2001). 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, that
separately addresses subcontracting with
small business, veteran-owned small business, service-disabled veteran-owned small
business, HUBZone small business, small disadvantaged business, and women-owned
small business concerns. If the bidder is submitting an individual contract plan, the plan
must separately address subcontracting with
small business, veteran-owned small business, service-disabled veteran-owned small
business, HUBZone small business, small disadvantaged business, 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 (Oct 2001). 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 that separately addresses subcontracting with small business, veteran-owned
small business, service-disabled veteranowned small business, HUBZone small business, small disadvantaged business, and
women-owned small business concerns. If the
offeror is submitting an individual contract
plan, the plan must separately address sub-

contracting with small business, veteranowned small business, service-disabled veteran-owned small business, HUBZone small
business, small disadvantaged business, 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; 63 FR 70276,
70293, Dec. 18, 1998; 64 FR 36224, July 2, 1999;
65 FR 46058, July 26, 2000; 65 FR 60547, Oct. 11,
2000; 66 FR 53493, Oct. 22, 2001; 67 FR 1858,
Jan. 14, 2002]

52.219–10 Incentive
Subcontracting
Program.
As prescribed in 19.708(c)(1), insert
the following clause:
INCENTIVE SUBCONTRACTING PROGRAM (OCT
2001)
(a) Of the total dollars it plans to spend
under subcontracts, the Contractor has committed itself in its subcontracting plan to
try to award certain percentages to small
business, veteran-owned small business, service-disabled veteran-owned small business,
HUBZone small business, small disadvantaged business, and women-owned small
business concerns, respectively.
(b) If the Contractor exceeds its subcontracting goals for small business, veteranowned small business, service-disabled veteran-owned small business, HUBZone small
business, and women-owned small business
concerns in performing this contract, it will
receive l [Contracting Officer to 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 under this paragraph are unilateral decisions made solely at
the discretion of the Government.
(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

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52.219–12

the limitations in 15.404–4 of the Federal Acquisition Regulation.

(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]

(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; 63 FR
70277, Dec. 18, 1998; 64 FR 72449, Dec. 27, 1999;
65 FR 60548, Oct. 11, 2000; 66 FR 53493, Oct. 22,
2001]

52.219–12 Special
Conditions.

8(a)

Subcontract

As prescribed in 19.811–3(b), insert the
following clause:

52.219–11 Special 8(a) Contract Conditions.

SPECIAL 8(A) SUBCONTRACT CONDITIONS (FEB
1990)

As prescribed in 19.811–3(a), insert the
following clause:

(a) The Small Business Administration
(SBA) has entered into Contract No. ll
[insert number of contract] with the ll [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 ll [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. ll [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 ll [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 ll [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 ll
[insert name of contracting agency].

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 ll [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 ll
[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
be made directly to the subcontractor by the
ll [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 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]

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52.219–13
52.219–13

48 CFR Ch. 1 (10–1–03 Edition)
[Reserved]

52.219–14 Limitations
on
Subcontracting.
As prescribed in 19.508(e) or 19.811–
3(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; 64 FR 32749, June 17, 1999]

52.219–15

[Reserved]

52.219–16 Liquidated Damages—Subcontracting Plan.
As prescribed in 19.708(b)(2), insert
the following clause:

cable, 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 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.

LIQUIDATED DAMAGES—SUBCONTRACTING
PLAN (JAN 1999)

(End of clause)

(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 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 appli-

[54 FR 30710, July 21, 1989, as amended at 60
FR 48267, Sept. 18, 1995; 63 FR 34068, June 22,
1998; 63 FR 70277, Dec. 18, 1998]

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

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Federal Acquisition Regulation

52.219–18

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 ll (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 lll
[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]

52.219–18 Notification of Competition
Limited to Eligible 8(a) Concerns.
As prescribed in 19.811–3(d), insert the
following clause:
NOTIFICATION OF COMPETITION LIMITED TO
ELIGIBLE 8(A) CONCERNS (JUNE 2003)
(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) The Offeror is in conformance with the
8(a) support limitation set forth in its approved business plan; and

(2) 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 shall
furnish, in performing the contract, only end
items manufactured or produced by small
business concerns in the United States or its
outlying areas. 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 to 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.

(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 lllll*
lllll (*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; 64 FR 32745, June 17, 1999; 64 FR
51850, Sept. 24, 1999; 68 FR 28085, May 22, 2003]

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52.219–19

48 CFR Ch. 1 (10–1–03 Edition)

52.219–19 Small
Business
Concern
Representation for the Small Business Competitiveness Demonstration Program.
As prescribed in 19.1008(a), insert the
following provision:
SMALL BUSINESS CONCERN REPRESENTATION
FOR THE SMALL BUSINESS COMPETITIVENESS
DEMONSTRATION PROGRAM (OCT 2000)
(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
North American Industry Classification System (NAICS) 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 b is, b 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
l50 or fewer
l51–100
l101–250
l251–500
l501–750
l751–1,000
l Over 1,000

Avg. annual gross revenues
l$1 million or less
l$1,000,001–$2 million
l$2,000,001–$3.5 million
l$3,500,001–$5 million
l$5,000,001–$10 million
l$10,000,001–$17 million
l Over $17 million

(End of provision)
[55 FR 52799, Dec. 21, 1990, as amended at 67
FR 13068, Mar. 20, 2002]

52.219–21 Small Business Size Representation for Targeted Industry
Categories Under the Small Business Competitiveness Demonstration Program.
As prescribed in 19.1008(c), insert the
following provision:
SMALL BUSINESS SIZE REPRESENTATION FOR
TARGETED INDUSTRY CATEGORIES UNDER
THE SMALL BUSINESS COMPETITIVENESS
DEMONSTRATION PROGRAM (MAY 1999)
(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’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
l50 or fewer
l51–100
l101–250
l251–500
l501–750
l751–1,000
l Over 1,000

Avg. annual gross revenues
l$1 million or less
l$1,000,001–$2 million
l$2,000,001–$3.5 million
l$3,500,001–$5 million
l$5,000,001–$10 million
l$10,000,001–$17 million
l 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;
64 FR 10533, Mar. 4, 1999; 67 FR 6121, Feb. 8,
2002]

(End of provision)
[55 FR 52798, Dec. 21, 1990, as amended at 56
FR 29138, June 25, 1991; 62 FR 238, Jan. 2, 1997;
65 FR 46058, July 26, 2000; 67 FR 13068, Mar.
20, 2002]

52.219–22 Small Disadvantaged Business Status.
As prescribed in 19.307(b), insert the
following provision:
SMALL DISADVANTAGED BUSINESS STATUS
(OCT 1999)

52.219–20 Notice of Emerging Small
Business Set-Aside.
As prescribed in 19.1008(b), insert the
following provision:
NOTICE OF EMERGING SMALL BUSINESS SETASIDE (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.

(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

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Federal Acquisition Regulation

52.219–23

the size standard applicable to this acquisition; and either—
b (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 identified, on the date of its representation, as a certified small disadvantaged business concern in the database maintained by the Small Business Administration
(PRO-Net); or
b (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)bFor 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:
llllll.]
(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.

(End of provision)
Alternate I (OCT 1998). As prescribed
in 19.307(b), add the following paragraph (b)(3) to the basic provision:
(3) Address. The offeror represents that its
address lis, lis 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; 63 FR 70277, Dec. 18,
1998; 64 FR 32749, June 17, 1999; 64 FR 36224,
July 2, 1999]

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 (JUNE 2003)
(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 identified, on the date of its representation, as a certified small disadvantaged business concern in the database maintained by the Small Business Administration
(PRO-Net).
(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

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52.219–24

48 CFR Ch. 1 (10–1–03 Edition)

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. 1067k, including a Hispanic-serving institution of higher education, as defined in Section 316(b)(1) of the
Act (20 U.S.C. 1101a)).
(b) Evaluation adjustment. (1) The Contracting Officer will evaluate offers by adding a factor of lll [Contracting Officer insert the percentage] percent to the price of all
offers, except—
(i) Offers from small disadvantaged business concerns that have not waived the adjustment;
(ii) An otherwise successful offer 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));
(iii) An otherwise successful offer where
application of the factor would be inconsistent with a Memorandum of Understanding or other international agreement
with a foreign government;
(iv) For DoD, NASA, and Coast Guard acquisitions, an otherwise successful offer from
a historically black college or university or
minority institution; and
(v) For DoD acquisitions, an otherwise successful offer of qualifying country end products (see sections 225.000–70 and 252.225–7001
of the Defense FAR Supplement).
(2) The Contracting Officer will apply the
factor to a line item or a group of line items
on which award may be made. The Contracting Officer will apply other evaluation
factors described in the solicitation 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.
l 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 shall
furnish in performing this contract only end
items manufactured or produced by small
disadvantaged business concerns in the
United States or its outlying areas. This
paragraph does not apply to construction or
service contracts.

(End of clause)
Alternate I (June 2003). 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 shall
furnish in performing this contract only end
items manufactured or produced by small
business concerns in the United States or its
outlying areas. This paragraph does not
apply to construction or service contracts.

Alternate II (Oct 1998). As prescribed
in 19.1104, substitute the following
paragraph
(b)(1)(i)
for
paragraph
(b)(1)(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; 64 FR 36224, July 2,
1999; 65 FR 16286, Mar. 27, 2000; 66 FR 2135,
Jan. 10, 2001; 68 FR 28085, May 22, 2003]

52.219–24 Small Disadvantaged Business Participation Program—Targets.
As prescribed in 19.1204(a), insert a
provision substantially the same as the
following:

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Federal Acquisition Regulation

52.219–26

SMALL DISADVANTAGED BUSINESS PARTICIPATION PROGRAM—TARGETS (OCT 2000)
(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 North American Industry Classification System (NAICS) Industry Subsectors 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.

advantaged 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, as amended at 63
FR 71723, Dec. 29, 1998; 64 FR 36225, July 2,
1999]

(End of provision)

52.219–26 Small Disadvantaged Business Participation Program—Incentive Subcontracting.

[63 FR 36125, July 1, 1998, as amended at 65
FR 46058, July 26, 2000]

As prescribed in 19.1204(c), insert a
clause substantially the same as the
following:

52.219–25 Small Disadvantaged Business Participation Program—Disadvantaged Status and Reporting.

SMALL DISADVANTAGED BUSINESS PARTICIPATION PROGRAM—INCENTIVE SUBCONTRACTING
(OCT 2000)

As prescribed in 19.1204(b), insert the
following clause:

(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 North American Industry Classification System (NAICS) Industry
Subsectors 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 NAICS Industry Subsectors, it will receive l [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 under this paragraph
are unilateral decisions made solely at the
discretion of the Government.
(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

SMALL DISADVANTAGED BUSINESS PARTICIPATION
PROGRAM—DISADVANTAGED STATUS
AND REPORTING (OCT 1999)
(a) Disadvantaged status for joint venture
partners, team members, and subcontractors.
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
identified as a certified small disadvantaged
business in the database maintained by the
Small Business Administration (PRO-Net) or
by contacting the SBA’s Office of Small Dis-

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52.221

48 CFR Ch. 1 (10–1–03 Edition)

the limitations in subsection 15.404–4 of the
Federal Acquisition Regulation.

(End of clause)
[63 FR 36125, July 1, 1998, as amended at 64
FR 72449, Dec. 27, 1999; 65 FR 46058, July 26,
2000]

52.221

[Reserved]

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.

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]

(End of clause)
52.222–3
[48 FR 42478, Sept. 19, 1983, as amended at 61
FR 67426, Dec. 20, 1996]

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—
(1) Necessary to cope with emergencies
such as those resulting from accidents, natural disasters, breakdowns of production
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
*Insert either ‘‘zero’’ or the dollar amount
agreed to during negotiations.

Convict Labor.

As prescribed in 22.202, insert the following clause:
CONVICT LABOR (JUNE 2003)
(a) Except as provided in paragraph (b) of
this clause, the Contractor shall not employ
in the performance of this contract any person undergoing a sentence of imprisonment
imposed by any court of a State, the District
of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, Guam, or the
U.S. Virgin Islands.
(b) The Contractor is not prohibited from
employing persons—
(1) On parole or probation to work at paid
employment during the term of their sentence;
(2) Who have been pardoned or who have
served their terms; or
(3) Confined for violation of the laws of any
of the States, the District of Columbia, Puerto Rico, the Northern Mariana Islands,
American Samoa, Guam, or the U.S. Virgin
Islands who are authorized to work at paid
employment in the community under the
laws of such jurisdiction, if—
(i) The worker is paid or is in an approved
work training program on a voluntary basis;
(ii) Representatives of local union central
bodies or similar labor union organizations
have been consulted;
(iii) 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;

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Federal Acquisition Regulation

52.222–6

(iv) 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
(v) 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)
[68 FR 28085, May 22, 2003]

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 (SEP
2000)
(a) Overtime requirements. No Contractor or
subcontractor employing laborers or mechanics (see Federal Acquisition Regulation
22.300) shall require or permit them to work
over 40 hours in any workweek unless they
are paid at least 1 and 1/2 times the basic
rate of pay for each hour worked over 40
hours.
(b) Violation; liability for unpaid wages; liquidated damages. The responsible Contractor
and subcontractor are liable for unpaid
wages if they violate the terms in paragraph
(a) of this clause. In addition, the Contractor
and subcontractor are liable for liquidated
damages payable to the Government. The
Contracting Officer will assess liquidated
damages at the rate of $10 per affected employee for each calendar day on which the
employer required or permitted the employee to work in excess of the standard
workweek of 40 hours without paying overtime wages required by the Contract Work
Hours and Safety Standards Act.
(c) Withholding for unpaid wages and liquidated damages. The Contracting Officer will
withhold from payments due under the contract sufficient funds required to satisfy any
Contractor or subcontractor liabilities for
unpaid wages and liquidated damages. If
amounts withheld under the contract are insufficient to satisfy Contractor or subcontractor liabilities, the Contracting Officer
will withhold payments from other Federal
or Federally assisted contracts held by the
same Contractor that are subject to the Contract Work Hours and Safety Standards Act.
(d) Payrolls and basic records. (1) The Contractor and its subcontractors shall maintain payrolls and basic payroll records for all
laborers and mechanics working on the contract during the contract and shall make

them available to the Government until 3
years after contract completion. The records
shall contain the name and address of each
employee, social security number, labor classifications, hourly rates of wages paid, daily
and weekly number of hours worked, deductions made, and actual wages paid. The
records need not duplicate those required for
construction work by Department of Labor
regulations at 29 CFR 5.5(a)(3) implementing
the Davis-Bacon Act.
(2) The Contractor and its subcontractors
shall allow authorized representatives of the
Contracting Officer or the Department of
Labor to inspect, copy, or transcribe records
maintained under paragraph (d)(1) of this
clause. The Contractor or subcontractor also
shall allow authorized representatives of the
Contracting Officer or Department of Labor
to interview employees in the workplace
during working hours.
(e) Subcontracts. The Contractor shall insert the provisions set forth in paragraphs
(a) through (d) of this clause in subcontracts
exceeding $100,000 and require subcontractors
to include these provisions in any lower tier
subcontracts. The Contractor shall be responsible for compliance by any subcontractor or lower-tier subcontractor with the
provisions set forth in paragraphs (a)
through (d) of this clause.

(End of clause)
[65 FR 46067, July 26, 2000]

52.222–5

[Reserved]

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

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52.222–7

48 CFR Ch. 1 (10–1–03 Edition)

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
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]

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

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Federal Acquisition Regulation

52.222–8

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]

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 DavisBacon 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 DavisBacon 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

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52.222–9

48 CFR Ch. 1 (10–1–03 Edition)

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]

52.222–9 Apprentices and Trainees.
As prescribed in 22.407(a), insert the
following clause:
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

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Federal Acquisition Regulation

52.222–14

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)

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]

[53 FR 4946, Feb. 18, 1988]

52.222–10 Compliance With Copeland
Act Requirements.

52.222–12 Contract Termination—Debarment.
As prescribed in 22.407(a), insert the
following clause:

As prescribed in 22.407(a), insert the
following clause:
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]

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

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]

52.222–13 Compliance
with
DavisBacon 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]

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

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52.222–15

48 CFR Ch. 1 (10–1–03 Edition)

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.

[53 FR 4947, Feb. 18, 1988]

52.222–17 Labor Standards for Construction
Work—Facilities
Contracts.

LABOR STANDARDS FOR CONSTRUCTION WORK—
FACILITIES CONTRACTS (FEB 1988)

Certification of Eligibility.

As prescribed in 22.407(a), insert the
following clause:
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]

52.222–16

[53 FR 4947, Feb. 18, 1988]

As prescribed in 22.407(d), insert the
following clause:

(End of clause)

52.222–15

(End of clause)

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.

(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]

52.222–18 Certification
Regarding
Knowledge of Child Labor for Listed End Products.
As prescribed in 22.1505(a), insert the
following provision:

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Federal Acquisition Regulation

52.222–19

CERTIFICATION REGARDING KNOWLEDGE OF
CHILD LABOR FOR LISTED END PRODUCTS
(FEB 2001)
(a) Definition.
Forced or indentured child labor means all
work or service—
(1) Exacted from any person under the age
of 18 under the menace of any penalty for its
nonperformance and for which the worker
does not offer himself voluntarily; or
(2) Performed by any person under the age
of 18 pursuant to a contract the enforcement
of which can be accomplished by process or
penalties.
(b) Listed end products. The following end
product(s) being acquired under this solicitation is (are) included in the List of Products
Requiring Contractor Certification as to
Forced or Indentured Child Labor, identified
by their country of origin. There is a reasonable basis to believe that listed endproducts
from the listed countries of origin may have
been mined, produced, or manufactured by
forced or indentured child labor.
Listed End Product
llllllllllllllllllllllll
llllllllllllllllllllllll
Listed Countries of Origin
llllllllllllllllllllllll
llllllllllllllllllllllll
(c) Certification. The Government will not
make award to an offeror unless the offeror,
by checking the appropriate block, certifies
to either paragraph (c)(1) or paragraph (c)(2)
of this provision.
b (1) The offeror will not supply any end
product listed in paragraph (b) of this provision that was mined, produced, or manufactured in a corresponding country as listed
for that end product.
b (2) The offeror may supply an end product listed in paragraph (b) of this provision
that was mined, produced, or manufactured
in the corresponding country as listed for
that product. The offeror certifies that it has
made a good faith effort to determine whether forced or indentured child labor was used
to mine, produce, or manufacture such end
product. On the basis of those efforts, the offeror certifies that it is not aware of any
such use of child labor.

(End of provision)
[66 FR 5349, Jan. 18, 2001]

52.222–19 Child
Labor—Cooperation
with Authorities and Remedies.
As prescribed in 22.1505(b), insert the
following clause:

CHILD LABOR—COOPERATION WITH
AUTHORITIES AND REMEDIES (SEP 2002)
(a) Applicability. This clause does not apply
to the extent that the Contractor is supplying end products mined, produced, or
manufactured in—
(1) Canada, and the anticipated value of
the acquisition is $25,000 or more;
(2) Israel, and the anticipated value of the
acquisition is $50,000 or more;
(3) Mexico, and the anticipated value of the
acquisition is $56,190 or more; or
(4) Aruba, Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Hong
Kong, Iceland, Ireland, Italy, Japan, Korea,
Liechtenstein, Luxembourg, Netherlands,
Norway, Portugal, Singapore, Spain, Sweden, Switzerland, or the United Kingdom and
the anticipated value of the acquisition is
$169,000 or more.
(b) Cooperation with Authorities. To enforce
the laws prohibiting the manufacture or importation of products mined, produced, or
manufactured by forced or indentured child
labor, authorized officials may need to conduct investigations to determine whether
forced or indentured child labor was used to
mine, produce, or manufacture any product
furnished under this contract. If the solicitation includes the provision 52.222–18, Certification Regarding Knowledge of Child Labor
for Listed End Products, or the equivalent at
52.212–3(i), the Contractor agrees to cooperate fully with authorized officials of the contracting agency, the Department of the
Treasury, or the Department of Justice by
providing reasonable access to records, documents, persons, or premises upon reasonable
request by the authorized officials.
(c) Violations. The Government may impose
remedies set forth in paragraph (d) for the
following violations:
(1) The Contractor has submitted a false
certification regarding knowledge of the use
of forced or indentured child labor for listed
end products.
(2) The Contractor has failed to cooperate,
if required, in accordance with paragraph (b)
of this clause, with an investigation of the
use of forced or indentured child labor by an
Inspector General, Attorney General, or the
Secretary of the Treasury.
(3) The Contractor uses forced or indentured child labor in its mining, production,
or manufacturing processes.
(4) The Contractor has furnished under the
contract end products or components that
have been mined, produced, or manufactured
wholly or in part by forced or indentured
child labor. (The Government will not pursue
remedies at paragraph (d)(2) or paragraph
(d)(3) of this clause unless sufficient evidence
indicates that the Contractor knew of the
violation.)
(d) Remedies. (1) The Contracting Officer
may terminate the contract.

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52.222–20

48 CFR Ch. 1 (10–1–03 Edition)

(2) The suspending official may suspend the
Contractor in accordance with procedures in
FAR Subpart 9.4.
(3) The debarring official may debar the
Contractor for a period not to exceed 3 years
in accordance with the procedures in FAR
Subpart 9.4.

(End of clause)
[66 FR 5349, Jan. 18, 2001, as amended at 66
FR 65371, Dec. 18, 2001; 67 FR 56124, Aug. 30,
2002]

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 WalshHealey 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.
(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]

52.222–21 Prohibition of segregated facilities.
As prescribed in 22.810(a)(1), insert
the following clause:
PROHIBITION OF SEGREGATED FACILITIES (FEB
1999)
(a) Segregated facilities, as used in this
clause, 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, sex, or national
origin because of written or oral policies or
employee custom. The term does not include
separate or single-user rest rooms or necessary dressing or sleeping areas provided to
assure privacy between the sexes.
(b) The Contractor agrees 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 Contractor agrees that a breach of this
clause is a violation of the Equal Opportunity clause in this contract.
(c) The Contractor shall include this clause
in every subcontract and purchase order that
is subject to the Equal Opportunity clause of
this contract.

(End of clause)
[53 FR 70285, Dec. 18, 1998]

52.222–22 Previous
Contracts
Compliance Reports.

As prescribed in 22.810(a)(2), insert
the following provision:
PREVIOUS CONTRACTS AND COMPLIANCE
REPORTS (FEB 1999)
The offeror represents that—
(a) It squ; has, b has not participated in a
previous contract or subcontract subject to
the Equal Opportunity clause of this solicitation;
(b) It b has, b 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)
[48 FR 42478, Sept. 19, 1983, as amended at 63
FR 70286, Dec. 18, 1998]

52.222–23 Notice of Requirement for
Affirmative Action to Ensure Equal
Employment Opportunity for Construction.
As prescribed in 22.810(b), insert the
following provision:

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Federal Acquisition Regulation

52.222–25

NOTICE OF REQUIREMENT FOR AFFIRMATIVE
ACTION TO ENSURE EQUAL EMPLOYMENT OPPORTUNITY FOR CONSTRUCTION (FEB 1999)
(a) The offeror’s attention is called to the
Equal Opportunity clause and the Affirmative Action Compliance Requirements for
Construction clause of this solicitation.
(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
for each trade

Goals for female participation
for each trade

lllllll—
[Contracting Officer shall insert goals]

llllllll
[Contracting Officer shall insert goals]

(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 lll [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)

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 Deputy Assistant Secretary for Federal Contract Compliance, U.S.
Department of Labor, 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;

[48 FR 42478, Sept. 19, 1983, as amended at 55
FR 38518, Sept. 18, 1990; 63 FR 70286, Dec. 18,
1998]

52.222–24 Preaward On-Site Equal Opportunity Compliance Evaluation.
As prescribed in 22.810(c), insert the
following provision:
PREAWARD ON-SITE EQUAL OPPORTUNITY
COMPLIANCE EVALUATION (FEB 1999)
If a contract in the amount of $10 million
or more will result from this solicitation,
the prospective Contractor and its known
first-tier subcontractors with anticipated
subcontracts of $10 million or more shall be
subject to a preaward compliance evaluation
by the Office of Federal Contract Compliance
Programs (OFCCP), unless, within the preceding 24 months, OFCCP has conducted an
evaluation and found the prospective Contractor and subcontractors to be in compliance with Executive Order 11246.

(End of provision)
[63 FR 70286, Dec. 18, 1998]

52.222–25
ance.

Affirmative Action Compli-

As prescribed in 22.810(d), insert the
following provision:
AFFIRMATIVE ACTION COMPLIANCE (APR 1984)
The offeror represents that (a) it b has developed and has on file, b 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 b
has not previously had contracts subject to
the written affirmative action programs requirement of the rules and regulations of the
Secretary of Labor.

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52.222–26

48 CFR Ch. 1 (10–1–03 Edition)
(End of provision)

[48 FR 42478, Sept. 19, 1983, as amended at 63
FR 70286, Dec. 18, 1998]

52.222–26 Equal Opportunity.
As prescribed in 22.810(e), insert the
following clause:
EQUAL OPPORTUNITY (APR 2002)
(a) Definition. United States, as used in this
clause, means the 50 States, the District of
Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, Guam, the
U.S. Virgin Islands, and Wake Island.
(b) 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 paragraphs (b)(1) through (b)(11) of this
clause, except for work performed outside
the United States by employees who were
not recruited within the United States. Upon
request, the Contractor shall provide information necessary to determine the applicability of this clause.
(1) The Contractor shall not discriminate
against any employee or applicant for employment because of race, color, religion,
sex, or national origin. However, it shall not
be a violation of this clause for the Contractor to extend a publicly announced preference in employment to Indians living on or
near an Indian reservation, in connection
with employment opportunities on or near
an Indian reservation, as permitted by 41
CFR 60–1.5.
(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 advertisements 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. The Contractor shall also
file Standard Form 100 (EEO–1), or any successor form, as prescribed in 41 CFR part 60–
1. Unless the Contractor has filed within the
12 months preceding the date of contract
award, the Contractor shall, within 30 days
after contract award, apply to either the regional Office of Federal Contract Compliance
Programs (OFCCP) or the local office of the
Equal Employment Opportunity Commission
for the necessary forms.
(8) The Contractor shall permit access to
its premises, during normal business hours,
by the contracting agency or the OFCCP for
the purpose of conducting on-site compliance
evaluations and complaint investigations.
The Contractor shall permit the Government
to inspect and copy any books, accounts,
records (including computerized records),
and other material that may be relevant to
the matter under investigation and pertinent
to compliance with Executive Order 11246, as
amended, and rules and regulations that implement the Executive Order.
(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; in 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 subparagraphs (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 officer may direct

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52.222–27

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 (FEB 1999). As prescribed
in 22.810(e), add the following as a preamble to the clause:
Notice. The following terms of this clause
are waived for this contract: lll
[Contracting Officer shall list terms].
[48 FR 42478, Sept. 19, 1983, as amended at 63
FR 70286, Dec. 18, 1998; 67 FR 13067, Mar. 20,
2002]

52.222–27 Affirmative Action Compliance Requirements for Construction.
As prescribed in 22.810(f), insert the
following clause:
AFFIRMATIVE ACTION COMPLIANCE
REQUIREMENTS FOR CONSTRUCTION (FEB 1999)
(a) Definitions.
Covered area, as used in this clause, means
the geographical area described in the solicitation for this contract.
Deputy Assistant Secretary, as used in this
clause, means the Deputy Assistant Secretary for Federal Contract Compliance, U.S.
Department of Labor, or a designee.
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 goodfaith 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.

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52.222–27

48 CFR Ch. 1 (10–1–03 Edition)

(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
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 Deputy Assistant Secretary 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) of this clause.
(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 on-site 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 afterschool, 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

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52.222–27

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 rest rooms and necessary
dressing or sleeping areas 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) of this clause.
The efforts of a contractor association, joint
contractor-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) of
this clause, 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)
of this clause, 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 Deputy Assistant Secretary 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; 63 FR 70286, Dec. 18,
1998]

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52.222–28

48 CFR Ch. 1 (10–1–03 Edition)
ble to workers subject to the Davis-Bacon
Act.

52.222–28

[Reserved]

52.222–29

Notification of visa denial.

As prescribed in 22.810(g), insert the
following clause:
NOTIFICATION OF VISA DENIAL (JUNE 2003)
It is a violation of Executive Order 11246
for a Contractor to refuse to employ any applicant or not to assign any person hired in
the United States, Puerto Rico, the Northern
Mariana Islands, American Samoa, Guam,
the U.S. Virgin Islands, or Wake Island, on
the basis that the individual’s race, color, religion, sex, or national origin is not compatible with the policies of the country where or
for whom the work will be performed (41 CFR
60–1.10). The Contractor shall notify the U.S.
Department of State, Assistant Secretary,
Bureau of Political-Military Affairs (PM),
2201 C Street NW., Room 6212, Washington,
DC 20520, and the U.S. Department of Labor,
Deputy Assistant Secretary for Federal Contract Compliance, when it has knowledge of
any employee or potential employee being
denied an entry visa to a country where this
contract will be performed, 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)
[68 FR 28085, May 22, 2003]

52.222–30 Davis-Bacon Act—Price Adjustment (None or Separately Specified Method).
As prescribed in 22.407(e), insert the
following clause:
DAVIS-BACON ACT—PRICE ADJUSTMENT (NONE
OR SEPARATELY SPECIFIED METHOD) (DEC
2001)
(a) The wage determination issued under
the Davis-Bacon Act by the Administrator,
Wage and Hour Division, Employment
Standards Administration, U.S. Department
of Labor, that is effective for an option to
extend the term of the contract, will apply
to that option period.
(b) The Contracting Officer will make no
adjustment in contract price, other than provided for elsewhere in this contract, to cover
any increases or decreases in wages and benefits as a result of—
(1) Incorporation of the Department of Labor’s wage determination applicable at the
exercise of the option to extend the term of
the contract;
(2) Incorporation of a wage determination
otherwise applied to the contract by operation of law; or
(3) An increase in wages and benefits resulting from any other requirement applica-

(End of clause)
[66 FR 53482, Oct. 22, 2001]

52.222–31 Davis-Bacon Act—Price Adjustment (Percentage Method).
As prescribed in 22.407(f), insert the
following clause:
DAVIS-BACON ACT—PRICE ADJUSTMENT
(PERCENTAGE METHOD) (DEC 2001)
(a) The wage determination issued under
the Davis-Bacon Act by the Administrator,
Wage and Hour Division, Employment
Standards Administration, U.S. Department
of Labor, that is effective for an option to
extend the term of the contract, will apply
to that option period.
(b) The Contracting Officer will adjust the
portion of the contract price or contract unit
price(s) containing the labor costs subject to
the Davis-Bacon Act to provide for an increase in wages and fringe benefits at the exercise of each option to extend the term of
the contract in accordance with the following procedures:
(1) The Contracting Officer has determined
that the portion of the contract price or contract unit price(s) containing labor costs
subject to the Davis-Bacon Act is llllll
[Contracting Officer insert percentage rate] percent.
(2) The Contracting Officer will increase
the portion of the contract price or contract
unit price(s) containing the labor costs subject to the Davis-Bacon Act by the percentage
rate
published
in
llllll[ContractingOfficer insert publication].
(c) The Contracting Officer will make the
price adjustment at the exercise of each option to extend the term of the contract. This
adjustment is the only adjustment that the
Contracting Officer will make to cover any
increases in wages and benefits as a result
of—
(1) Incorporation of the Department of Labor’s wage determination applicable at the
exercise of the option to extend the term of
the contract;
(2) Incorporation of a wage determination
otherwise applied to the contract by operation of law; or
(3) An increase in wages and benefits resulting from any other requirement applicable to workers subject to the Davis-Bacon
Act.

(End of clause)
[66 FR 53482, Oct. 22, 2001]

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Federal Acquisition Regulation

52.222–32

52.222–32 Davis-Bacon Act—Price Adjustment (Actual Method).
As prescribed in 22.407(g), insert the
following clause:
DAVIS-BACON ACT—PRICE ADJUSTMENT
(ACTUAL METHOD) (DEC 2001)
(a) The wage determination issued under
the Davis-Bacon Act by the Administrator,
Wage and Hour Division, Employment
Standards Administration, U.S. Department
of Labor, that is effective for an option to
extend the term of the contract, will apply
to that option period.
(b)(1) The Contractor states that if the
prices in this contract contain an allowance
for wage or benefit increases, such allowance
will not be included in any request for contract price adjustment submitted under this
clause.
(2) The Contractor shall provide with each
request for contract price adjustment under
this clause a statement that the prices in the
contract do not include any allowance for
any increased cost for which adjustment is
being requested.
(c) The Contracting Officer will adjust the
contract price or contract unit price labor
rates to reflect the Contractor’s actual increase or decrease in 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) Incorporation of the Department of Labor’s Davis-Bacon Act wage determination
applicable at the exercise of an option to extend the term of the contract; or
(2) Incorporation of a Davis-Bacon Act
wage determination otherwise applied to the
contract by operation of law.
(d) 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 will 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 receiving a revised wage determination unless this
notification period is extended in writing by
the Contracting Officer. The Contractor

shall notify the Contracting Officer promptly of any decrease under this clause, but
nothing in this clause precludes 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 Contracting Officer will modify
the contract price or contract unit price in
writing. The Contractor shall continue performance pending agreement on or determination of any such adjustment and its effective date.
(f) Contract price adjustment computations shall be computed as follows:
(1) Computation for contract unit price per
single craft hour for schedule of indefinitequantity work. For each labor classification,
the difference between the actual wage and
benefit rates (combined) paid and the wage
and benefit rates (combined) required by the
new wage determination shall be added to
the original contract unit price if the difference results in a combined increase. If the
difference computed results in a combined
decrease, the contract unit price shall be decreased by that amount if the Contractor
provides notification as provided in paragraph (e) of this clause.
(2) Computation for contract unit price containing multiple craft hours for schedule of indefinite-quantity work. For each labor classification, the difference between the actual
wage and benefit rates (combined) paid and
the wage and benefit rates (combined) required by the new wage determination shall
be multiplied by the actual number of hours
expended for each craft involved in accomplishing the unit-priced work item. The
product of this computation will then be divided by the actual number of units ordered
in the preceding contract period. The total of
these computations for each craft will be
added to the current contract unit price to
obtain the new contract unit price. The extended amount for the contract line item
will be obtained by multiplying the new unit
price by the estimated quantity. If actual
hours are not available from the preceding
contract period for computation of the adjustment for a specific contract unit of work,
the Contractor, in agreement with the Contracting Officer, shall estimate the total
hours per craft per contract unit of work.

EXAMPLE: ASPHALT PAVING—CURRENT PRICE $3.38 PER SQUARE YARD
DBA craft

New
WD

Equip. Opr. .........................................
Truck Driver ........................................
Laborer ...............................................

$18.50
$19.00
$11.50

Hourly
rate
paid
¥
¥
¥

$18.00
$18.25
$11.25

Diff.
=
=
=

$.50
$.75
$.25

Actual hrs.
×
×
×

600 hrs./
525 hrs./
750 hrs./

Actual units
(sq. yard)
3,000 sq. yrd.
3,000 sq. yrd.
3,000 sq. yrd.

Increase/
sq. yard
=
=
=

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$.10
$.13
$.06

52.222–33—52.222–34

48 CFR Ch. 1 (10–1–03 Edition)

EXAMPLE: ASPHALT PAVING—CURRENT PRICE $3.38 PER SQUARE YARD—Continued
New
WD

DBA craft

Hourly
rate
paid

Diff.

Actual hrs.

Actual units
(sq. yard)

Increase/
sq. yard

Total increase per square yard ..................................................................................................................................
* $.29
* Note: Adjustment for labor rate increases or decreases may be accompanied by social security and unemployment taxes and
workers’ compensation insurance.
Current unit price (per square yard) ...
$3.38
Add DBA price adj. .............................
+.29
New unit price (per square yard) .......
$3.67

(End of clause)
[66 FR 53482, Oct. 22, 2001]

52.222–33—52.222–34

[Reserved]

52.222–35 Equal Opportunity for Special Disabled Veterans, Veterans of
the Vietnam Era, and Other Eligible
Veterans.
As prescribed in 22.1310(a)(1), insert
the following clause:
EQUAL OPPORTUNITY FOR SPECIAL DISABLED
VETERANS, VETERANS OF THE VIETNAM ERA,
AND OTHER ELIGIBLE VETERANS (DEC 2001)
(a) Definitions. As used in this clause—
All employment openings means 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 parttime employment.
Executive and top management means any
employee—
(1) Whose primary duty consists of the
management of the enterprise in which the
individual is employed or of a customarily
recognized department or subdivision thereof;
(2) Who customarily and regularly directs
the work of two or more other employees;
(3) Who has the authority to hire or fire
other employees or whose suggestions and
recommendations as to the hiring or firing
and as to the advancement and promotion or
any other change of status of other employees will be given particular weight;
(4) Who customarily and regularly exercises discretionary powers; and
(5) Who does not devote more than 20 percent or, in the case of an employee of a retail
or service establishment, who does not devote more than 40 percent of total hours of
work in the work week to activities that are
not directly and closely related to the performance of the work described in paragraphs (1) through (4) of this definition. This
paragraph (5) does not apply in the case of an
employee who is in sole charge of an estab-

lishment or a physically separated branch
establishment, or who owns at least a 20 percent interest in the enterprise in which the
individual is employed.
Other eligible veteran means any other veteran who served on active duty during a war
or in a campaign or expedition for which a
campaign badge has been authorized.
Positions that will be filled from within the
Contractor’s organization means employment
openings for which the Contractor will give
no consideration to persons outside the Contractor’s organization (including any affiliates, subsidiaries, and parent companies) and
includes any openings 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.
Qualified special disabled veteran means a
special disabled veteran who satisfies the
requisite skill, experience, education, and
other job-related requirements of the employment position such veteran holds or desires, and who, with or without reasonable
accommodation, can perform the essential
functions of such position.
Special disabled veteran means—
(1) A veteran who is entitled to compensation (or who but for the receipt of military
retired pay would be entitled to compensation) under laws administered by the Department of Veterans Affairs for a disability—
(i) Rated at 30 percent or more; or
(ii) Rated at 10 or 20 percent in the case of
a veteran who has been determined under 38
U.S.C. 3106 to have a serious employment
handicap (i.e., a significant impairment of
the veteran’s ability to prepare for, obtain,
or retain employment consistent with the
veteran’s abilities, aptitudes, and interests);
or
(2) A person who was discharged or released from active duty because of a serviceconnected disability.
Veteran of the Vietnam era means a person
who—
(1) Served on active duty for a period of
more than 180 days and was discharged or released from active duty with other than a
dishonorable discharge, if any part of such
active duty occurred—

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Federal Acquisition Regulation

52.222–35

(i) In the Republic of Vietnam between
February 28, 1961, and May 7, 1975; or
(ii) Between August 5, 1964, and May 7, 1975,
in all other cases; or
(2) Was discharged or released from active
duty for a service-connected disability if any
part of the active duty was performed—
(i) In the Republic of Vietnam between
February 28, 1961, and May 7, 1975; or
(ii) Between August 5, 1964, and May 7, 1975,
in all other cases.
(b) General. (1) The Contractor shall not
discriminate against the individual because
the individual is a special disabled veteran, a
veteran of the Vietnam era, or other eligible
veteran, regarding any position for which
the employee or applicant for employment is
qualified. The Contractor shall take affirmative action to employ, advance in employment, and otherwise treat qualified special
disabled veterans, veterans of the Vietnam
era, and other eligible veterans without discrimination based upon their disability or
veterans’ status 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) Rate 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 apprenticeship, and onthe-job training under 38 U.S.C. 3687, 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 shall comply with the
rules, regulations, and relevant orders of the
Secretary of Labor issued under the Vietnam
Era Veterans’ Readjustment Assistance Act
of 1972 (the Act), as amended (38 U.S.C. 4211
and 4212).
(c) Listing openings. (1) The Contractor
shall immediately list all employment openings that exist at the time of the execution
of this contract and those which occur during the performance of this contract, including those not generated by this contract, and
including those occurring at an establishment of the Contractor other than the one

where the contract is being performed, but
excluding those of independently operated
corporate affiliates, at an appropriate local
public employment service office of the
State wherein the opening occurs. Listing
employment openings with the U.S. Department of Labor’s America’s Job Bank shall
satisfy the requirement to list jobs with the
local employment service office.
(2) The Contractor shall make the listing
of employment openings with the local employment service office at least concurrently
with using any other recruitment source or
effort and shall involve the normal obligations of placing a bona fide job order, including accepting referrals of veterans and nonveterans. This listing of employment openings 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.
(3) Whenever the Contractor becomes contractually bound to the listing terms of this
clause, it shall advise the State public employment agency 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
agency, it need not advise the State agency
of subsequent contracts. The Contractor may
advise the State agency 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, the Commonwealth of the
Northern Mariana Islands, American Samoa,
Guam, the Virgin Islands of the United
States, and Wake Island.
(e) Postings. (1) The Contractor shall post
employment notices in conspicuous places
that are available to employees and applicants for employment.
(2) The employment notices shall—
(i) State the rights of applicants and employees as well as the Contractor’s obligation under the law to take affirmative action
to employ and advance in employment qualified employees and applicants who are special disabled veterans, veterans of the Vietnam era, and other eligible veterans; and
(ii) Be in a form prescribed by the Deputy
Assistant Secretary for Federal Contract
Compliance Programs, Department of Labor
(Deputy Assistant Secretary of Labor), and
provided by or through the Contracting Officer.
(3) The Contractor shall ensure that applicants or employees who are special disabled
veterans are informed of the contents of the
notice (e.g., the Contractor may have the notice read to a visually disabled veteran, or

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52.222–36

48 CFR Ch. 1 (10–1–03 Edition)

may lower the posted notice so that it can be
read by a person in a wheelchair).
(4) 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 special disabled veterans, veterans
of the Vietnam era, and other eligible veterans.
(f) Noncompliance. If the Contractor does
not comply with the requirements of this
clause, the Government may take appropriate actions under the rules, regulations,
and relevant orders of the Secretary of Labor
issued pursuant to the Act.
(g) Subcontracts. The Contractor shall insert the terms of this clause in all subcontracts or purchase orders of $25,000 or
more unless exempted by rules, regulations,
or orders of the Secretary of Labor. The Contractor shall act as specified by the Deputy
Assistant Secretary of Labor to enforce the
terms, including action for noncompliance.

(End of clause)
Alternate I (Dec 2001). As prescribed in
22.1310(a)(2), add the following as a preamble to the clause:
NOTICE: The following term(s) of this
clause are waived for this contract:llllllll[List term(s)].
[66 FR 53490, Oct. 22, 2001]

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 descrip-

tions, 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.
(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.

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Federal Acquisition Regulation

52.222–41

(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)
clause are waived for this contract:

of

this

llllllllllllllllllllllll
[List term(s)].
[63 FR 34075, June 22, 1998]

52.222–37 Employment
Reports
on
Special Disabled Veterans, Veterans
of the Vietnam Era, and Other Eligible Veterans.
As prescribed in 22.1310(b), insert the
following clause:
EMPLOYMENT REPORTS ON SPECIAL DISABLED
VETERANS, VETERANS OF THE VIETNAM ERA,
AND OTHER ELIGIBLE VETERANS (DEC 2001)
(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 special disabled veterans, the number of veterans of the Vietnam era, and other eligible veterans in the
workforce 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 the total, the number of special
disabled veterans, the number of veterans of
the Vietnam era, and the number of other eligible veterans; and
(3) The maximum number and the minimum number of employees of the Contractor during the period covered by the report.
(b) The Contractor shall report the above
items by completing the Form VETS–100, entitled ‘‘Federal Contractor Veterans’’ Employment Report (VETS–100 Report)’’.
(c) The Contractor shall submit VETS–100
Reports no later than September 30 of each
year beginning September 30, 1988.
(d) The employment activity report required by paragraph (a)(2) of this clause shall
reflect total hires during the most recent 12month 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 between
July 1 and August 31 of the year the report
is due; or
(2) As of December 31, if the Contractor has
prior 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 Contractor shall base the count of
veterans reported according to paragraph (a)
of this clause on voluntary disclosure. Each
Contractor subject to the reporting requirements at 38 U.S.C. 4212 shall invite all special disabled veterans, veterans of the Vietnam era, and other eligible veterans 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—
(1) The information is voluntarily provided;
(2) The information will be kept confidential;
(3) Disclosure or refusal to provide the information will not subject the applicant or
employee to any adverse treatment; and
(4) The information will be used only in accordance with the regulations promulgated
under 38 U.S.C. 4212.
(f) The Contractor shall insert the terms of
this clause in all subcontracts or purchase
orders of $25,000 or more unless exempted by
rules, regulations, or orders of the Secretary
of Labor.

(End of clause)
[66 FR 53491, Oct. 22, 2001]

52.222–38 Compliance with Veterans’
Employment Reporting Requirements.
As prescribed in 22.1310(c), insert the
following provision:
COMPLIANCE WITH VETERANS’ EMPLOYMENT
REPORTING REQUIREMENTS (DEC 2001)
By submission of its offer, the offeror represents that, if it is subject to the reporting
requirements of 38 U.S.C. 4212(d) (i.e., if it
has any contract containing Federal Acquisition Regulation clause 52.222–37, Employment Reports on Special Disabled Veterans,
Veterans of the Vietnam Era, and Other Eligible Veterans), it has submitted the most
recent VETS–100 Report required by that
clause.

(End of provision)
[66 FR 53491, Oct. 22, 2001]

52.222–39—52.222–40

[Reserved]

52.222–41 Service Contract Act of 1965,
as Amended.
As prescribed in 22.1006(a), insert the
following clause:

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52.222–41

48 CFR Ch. 1 (10–1–03 Edition)

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

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52.222–41

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

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48 CFR Ch. 1 (10–1–03 Edition)

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 sus-

pension 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

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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—

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52.222–42

48 CFR Ch. 1 (10–1–03 Edition)

(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]

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
Employee class

Monetary wage—
Fringe benefits

......................................
......................................
......................................
......................................
......................................
......................................

..............................
..............................
..............................
..............................
..............................
..............................

(End of clause)
[54 FR 19831, May 8, 1989]

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

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52.222–46

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]

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 (FEB
2002)
(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 (c) 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, as amended at 67
FR 6121, Feb. 8, 2002]

52.222–45

[Reserved]

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

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48 CFR Ch. 1 (10–1–03 Edition)

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 highquality 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]

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
llllll and the llllll (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]

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 (AUG 1996)
(a) The following certification shall be
checked:

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52.223–3

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]

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:
llllll (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
llllll (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]

52.222–50

[Reserved]

52.223–1—52.223–2

[Reserved]

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)
llllllllllllllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll
Identification No.
llllllllllllllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll
(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

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52.223–4

48 CFR Ch. 1 (10–1–03 Edition)

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.
(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]

52.223–4 Recovered Material Certification.
As prescribed in 23.406(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, as amended at 65
FR 36021, June 6, 2000]

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 (AUG 2003)
(a) Definitions. As used in this clause—
Priority chemical means a chemical identified by the Interagency Environmental Leadership Workgroup or, alternatively, by an
agency pursuant to section 503 of Executive
Order 13148 of April 21, 2000, Greening the
Government through Leadership in Environmental Management.
Toxic chemical means a chemical or chemical category listed in 40 CFR 372.65.
(b) Executive Order 13148 requires Federal
facilities to comply with the provisions of
the Emergency Planning and Community

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Federal Acquisition Regulation

52.223–6

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).
(c) The Contractor shall provide all information needed by the Federal facility to
comply with the following:
(1) The emergency planning reporting requirements of section 302 of EPCRA.
(2) The emergency notice requirements of
section 304 of EPCRA.
(3) The list of Material Safety Data Sheets,
required by section 311 of EPCRA.
(4) The emergency and hazardous chemical
inventory forms of section 312 of EPCRA.
(5) The toxic chemical release inventory of
section 313 of EPCRA, which includes the reduction and recycling information required
by section 6607 of PPA.
(6) The toxic chemical, priority chemical,
and hazardous substance release and use reduction goals of sections 502 and 503 of Executive Order 13148.

(End of clause)
Alternate I (Aug 2003). As prescribed in
23.1005(b), add the following paragraph (c)(7)
to the basic clause:
(c)(7) The environmental management system as described in section 401 of E.O. 13148.
Alternate II (Aug 2003). As prescribed in
23.1005(c), add the following paragraph (c)(7)
to the basic clause. If Alternate I is also prescribed, renumber paragraph (c)(7) as paragraph (c)(8).
(c)(7) The facility compliance audits as described in section 402 of E.O. 13148.
[68 FR 43870, July 24, 2003]

52.223–6 Drug-Free Workplace.
As prescribed in 23.505, insert the following clause:
DRUG-FREE WORKPLACE (MAY 2001)
(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 where 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;
(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:

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52.223–7

48 CFR Ch. 1 (10–1–03 Edition)

(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; 66 FR 2135, Jan. 10, 2001]

52.223–7 Notice of radioactive materials.
As prescribed in 23.602, insert the following clause:

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).
(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
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]

NOTICE OF RADIOACTIVE MATERIALS (JAN
1997)
(a) The Contractor shall notify the Contracting Officer or designee, in writing,
lll * 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.
* 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).

52.223–8

[Reserved]

52.223–9 Estimate of Percentage of Recovered Material Content for EPADesignated Products.
As prescribed in 23.406(b), insert the
following clause:
ESTIMATE OF PERCENTAGE OF RECOVERED MATERIAL
CONTENT FOR EPA-DESIGNATED
PRODUCTS (AUG 2000)
(a) Definitions. As used in this clause—
Postconsumer material means a material or
finished product that has served its intended
use and has been discarded for disposal or recovery, having completed its life as a consumer item. Postconsumer material is a part
of the broader category of ‘‘recovered material.’’
Recovered material means waste materials
and by-products recovered or diverted from
solid waste, but the term does not include
those materials and by-products generated

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Federal Acquisition Regulation

52.223–12

from, and commonly reused within, an original manufacturing process.
(b) The Contractor, on completion of this
contract, shall—
(1) Estimate the percentage of the total recovered material used in contract performance, including, if applicable, the percentage
of postconsumer material content; and
(2) Submit this estimate to llllllll
[Contracting Officer complete in accordance
with agency procedures].

(End of clause)
Alternate I (August 2000). As
scribed in 23.406(b), redesignate
graph (b) of the basic clause as
graph (c) and add the following
graph (b) to the basic clause:

preparaparapara-

they are discarded. Waste prevention also refers to the reuse of products or materials.
Waste reduction 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 13101, the
Contractor shall establish a program to promote cost-effective waste reduction in all operations and facilities covered by this contract. The Contractor’s programs shall comply with applicable Federal, State, and local
requirements, specifically including Section
6002 of the Resource Conservation and Recovery Act (42 U.S.C. 6962, et seq.) and implementing regulations (40 CFR part 247).

(End of clause)

(b) The Contractor shall execute the following certification required by the Resource Conservation and Recovery Act of
1976 (42 U.S.C. 6962(i)(2)(C)):
CERTIFICATION
I, llllll (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 products met
the applicable contract specifications.
llllllllllllllllllllllll
(Signature of the Officer or Employee)
llllllllllllllllllllllll
( Typed Name of the Officer or Employee)
llllllllllllllllllllllll
( Title)
llllllllllllllllllllllll
( Name of Company, Firm, or Organization)
llllllllllllllllllllllll
( Date)
llllllllllllllllllllllll

(End of certification)
[65 FR 36021, June 6, 2000]

52.223–10 Waste Reduction Program.
As prescribed in 23.705, insert the following clause:
WASTE REDUCTION PROGRAM (AUG 2000)
(a) Definitions. As used in this clause—
Recycling means the series of activities, including collection, separation, and processing, by which products or other materials
are recovered from the solid waste stream
for use in the form of raw materials in the
manufacture of products other than fuel for
producing heat or power by combustion.
Waste prevention means any change in the
design, manufacturing, purchase, or use of
materials or products (including packaging)
to reduce their amount or toxicity before

[65 FR 36021, June 6, 2000]

52.223–11 Ozone-Depleting Substances.
As prescribed in 23.804(a), insert the
following clause:
OZONE-DEPLETING SUBSTANCES (MAY 2001)
(a) Definition. Ozone-depleting substance, as
used in this clause, means any substance the
Environmental Protection Agency designates in 40 CFR part 82 as—
(1) Class I, including, but not limited to,
chlorofluorocarbons, halons, carbon tetrachloride, and methyl chloroform; or
(2) Class II, 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.’’ llllllllll
* The Contractor shall insert the name of
the substance(s).

(End of clause)
[61 FR 31645, June 20, 1996, as amended at 66
FR 2135, Jan. 10, 2001]

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

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52.223–13

48 CFR Ch. 1 (10–1–03 Edition)

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]

52.223–13 Certification of Toxic Chemical Release Reporting.
As prescribed in 23.906(a), insert the
following provision:

(D) Industry code 4911, 4931, or 4939 (limited
to facilities that combust coal and/or oil for
the purpose of generating power for distribution in commerce).
(E) Industry code 4953 (limited to facilities
regulated under the Resource Conservation
and Recovery Act, Subtitle C (42 U.S.C. 6921,
et seq.), 5169, 5171, or 7389 (limited to facilities
primarily engaged in solvent recovery services on a contract or fee basis); or
b (v) The facility is not located in the
United States or its outlying areas.

CERTIFICATION OF TOXIC CHEMICAL RELEASE
REPORTING (AUG. 2003)

(End of provision)

(a) Executive Order 13148, of April 21, 2000,
Greening the Government through Leadership in Environmental Management, requires submission of this ertification as a
prerequisite for contract award.
(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.)
b (i) The facility does not manufacture,
process, or otherwise use any toxic chemicals listed in 40 CFR 372.65;
b (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);
b (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);
b (iv) The facility does not fall within the
following Standard Industrial Classification
(SIC) codes or their corresponding North
American Industry Classification System
sectors:
(A) Major group code 10 (except 1011, 1081,
and 1094.
(B) Major group code 12 (except 1241).
(C) Major group codes 20 through 39.

[61 FR 41475, Aug. 8, 1996, as amended at 65
FR 46058, July 26, 2000; 68 FR 28086, May 22,
2003; 68 FR 43870, July 24, 2003]

52.223–14 Toxic Chemical Release Reporting.
As prescribed in 23.906(b), insert the
following clause:
TOXIC CHEMICAL RELEASE REPORTING (AUG.
2003)
(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—
(1) The facility does not manufacture,
process, or otherwise use any toxic chemicals listed in 40 CFR 372.65;
(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 the following Standard Industrial Classification
(SIC) codes or their corresponding North
American Industry Classification System
sectors:
(i) Major group code 10 (except 1011, 1081,
and 1094.
(ii) Major group code 12 (except 1241).

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52.224–2

(iii) Major group codes 20 through 39.
(iv) Industry code 4911, 4931, or 4939 (limited to facilities that combust coal and/or oil
for the purpose of generating power for distribution in commerce).
(v) Industry code 4953 (limited to facilities
regulated under the Resource Conservation
and Recovery Act, Subtitle C (42 U.S.C. 6921,
et seq.)), 5169, 5171, or 7389 (limited to facilities primarily engaged in solvent recovery
services on a contract or fee basis); or
(5) The facility is not located in the United
States or its outlying areas.
(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, as amended at 65
FR 46058, July 26, 2000; 68 FR 28086, May 22,
2003; 68 FR 43870, July 24, 2003]

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)
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
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

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48 CFR Ch. 1 (10–1–03 Edition)

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 product means those articles, materials, and supplies to be acquired under the
contract for public use.
Foreign end product means an end product
other than a domestic end product.
United States means the 50 States, the District of Columbia, and outlying areas.
(b) The Buy American Act (41 U.S.C. 10a–
10d) provides a preference for domestic end
products for supplies acquired for use in the
United States.
(c) Offerors may obtain from the Contracting Officer a list of foreign articles that
the Contracting Officer will treat as domestic for this contract.
(d) The Contractor shall deliver only domestic end products except to the extent
that it specified delivery of foreign end products in the provision of the solicitation entitled ‘‘Buy American Act Certificate.’’

(End of clause)

(End of clause)

52.225–1 Buy American Act—Supplies.
As prescribed in 25.1101(a)(1), insert
the following clause:
BUY AMERICAN ACT—SUPPLIES. (JUNE 2003)
(a) Definitions. As used in this clause—
Component means an article, material, or
supply incorporated directly into an end
product.
Cost of components means—
(1) For components purchased by the Contractor, the acquisition cost, including
transportation costs to the place of incorporation into the end product (whether or not
such costs are paid to a domestic firm), and
any applicable duty (whether or not a dutyfree entry certificate is issued); or
(2) For components manufactured by the
Contractor, all costs associated with the
manufacture of the component, including
transportation costs as described in paragraph (1) of this definition, plus allocable
overhead costs, but excluding profit. Cost of
components does not include any costs associated with the manufacture of the end product.
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. Components of foreign
origin of the same class or kind as those that
the agency determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities of a
satisfactory quality are treated as domestic.
Scrap generated, collected, and prepared for
processing in the United States is considered
domestic.

[64 FR 72433, Dec. 27, 1999, as amended at 66
FR 65350, Dec. 18, 2001; 67 FR 21536, Apr. 30,
2002; 68 FR 28086, May 22, 2003]

52.225–2

Buy American Act Certificate.

As prescribed in 25.1101(a)(2), insert
the following provision:
BUY AMERICAN ACT CERTIFICATE (JUNE 2003)
(a) The offeror certifies that each end product, except those listed in paragraph (b) of
this provision, is a domestic end product and
that the offeror has considered components
of unknown origin to have been mined, produced, or manufactured outside the United
States. The offeror shall list as foreign end
products those end products manufactured in
the United States that do not qualify as domestic end products. The terms ‘‘component,’’ ‘‘domestic end product,’’ ‘‘end product,’’ ‘‘foreign end product,’’ and ‘‘United
States’’ are defined in the clause of this solicitation entitled ‘‘Buy American Act—Supplies.’’
(b) Foreign End Products:
Line Item No.: lllllllllllllll
Country of Origin: lllllllllllll
(List as necessary)
(c) The Government will evaluate offers in
accordance with the policies and procedures
of Part 25 of the Federal Acquisition Regulation.

(End of provision)
[64 FR 72434, Dec. 27, 1999; 65 FR 4633, Jan. 31,
2000, as amended at 67 FR 21536, Apr. 30, 2002;
68 FR 28086, May 22, 2003]

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52.225–3

52.225–3 Buy American Act—North
American Free Trade Agreement—
Israeli Trade Act.
As prescribed in 25.1101(b)(1)(i), insert
the following clause:
BUY AMERICAN ACT—NORTH AMERICAN FREE
TRADE AGREEMENT—ISRAELI TRADE ACT
(JUNE 2003)
(a) Definitions. As used in this clause—
Component means an article, material, or
supply incorporated directly into an end
product.
Cost of components means—
(1) For components purchased by the Contractor, the acquisition cost, including
transportation costs to the place of incorporation into the end product (whether or not
such costs are paid to a domestic firm), and
any applicable duty (whether or not a dutyfree entry certificate is issued); or
(2) For components manufactured by the
Contractor, all costs associated with the
manufacture of the component, including
transportation costs as described in paragraph (1) of this definition, plus allocable
overhead costs, but excluding profit. Cost of
components does not include any costs associated with the manufacture of the end product.
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. Components of foreign
origin of the same class or kind as those that
the agency determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities of a
satisfactory quality are treated as domestic.
Scrap generated, collected, and prepared for
processing in the United States is considered
domestic.
End product means those articles, materials, and supplies to be acquired under the
contract for public use.
Foreign end product means an end product
other than a domestic end product.
Israeli end product means an article that—
(1) Is wholly the growth, product, or manufacture of Israel; or
(2) In the case of an article that consists in
whole or in part of materials from another
country, has been substantially transformed
in Israel 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.
North American Free Trade Agreement country means Canada or Mexico.
North American Free Trade Agreement country end product means an article that—

(1) Is wholly the growth, product, or manufacture of a North American Free Trade
Agreement (NAFTA) country; or
(2) In the case of an article that consists in
whole or in part of materials from another
country, 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 the article, provided that
the value of those incidental services does
not exceed that of the article itself.
United States means the 50 States, the District of Columbia, and outlying areas.
(b) Components of foreign origin. Offerors
may obtain from the Contracting Officer a
list of foreign articles that the Contracting
Officer will treat as domestic for this contract.
(c) Implementation. This clause implements
the Buy American Act (41 U.S.C. 10a–10d),
the North American Free Trade Agreement
Implementation Act (NAFTA) (19 U.S.C. 3301
note), and the Israeli Free Trade Area Implementation Act of 1985 (Israeli Trade Act) (19
U.S.C. 2112 note) by providing a preference
for domestic end products, except for certain
foreign end products that are NAFTA country end products or Israeli end products.
(d) Delivery of end products. The Contracting Officer has determined that NAFTA
and the Israeli Trade Act apply to this acquisition. Unless otherwise specified, these
trade agreements apply to all items in the
Schedule. The Contractor shall deliver under
this contract only domestic end products except to the extent that, in its offer, it specified delivery of foreign end products in the
provision entitled ‘‘Buy American Act—
North American Free Trade Agreement—
Israeli Trade Act Certificate.’’ If the Contractor specified in its offer that the Contractor would supply a NAFTA country end
product or an Israeli end product, then the
Contractor shall supply a NAFTA country
end product, an Israeli end product or, at the
Contractor’s option, a domestic end product.

(End of clause)
Alternate I (May 2002). As prescribed
in 25.1101(b)(1)(ii), add the following
definition to paragraph (a) of the basic
clause, and substitute the following
paragraph (d) for paragraph (d) of the
basic clause:
Canadian end product means an article
that—
(1) Is wholly the growth, product, or manufacture of Canada; or

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48 CFR Ch. 1 (10–1–03 Edition)

(2) In the case of an article that consists in
whole or in part of materials from another
country, 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 the article, provided that the
value of those incidental services does not
exceed that of the article itself.
(d) Delivery of end products. The Contracting Officer has determined that NAFTA
applies to this acquisition. Unless otherwise
specified, NAFTA applies to all items in the
Schedule. The Contractor shall deliver under
this contract only domestic end products except to the extent that, in its offer, it specified delivery of foreign end products in the
provision entitled ‘‘Buy American Act—
North American Free Trade Agreement—
Israeli Trade Act Certificate.’’ If the Contractor specified in its offer that the Contractor would supply a Canadian end product, then the Contractor shall supply a Canadian end product or, at the Contractor’s option, a domestic end product.

Alternate II (May 2002). As prescribed
in 25.1101(b)(1)(iii), add the following
definition to paragraph (a) of the basic
clause, and substitute the following
paragraph (d) for paragraph (d) 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 that consists in
whole or in part of materials from another
country, 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 the article, provided that the
value of those incidental services does not
exceed that of the article itself.
(d) Delivery of end products. The Contracting Officer has determined that NAFTA
and the Israeli Trade Act apply to this acquisition. Unless otherwise specified, these
trade agreements apply to all items in the
Schedule. The Contractor shall deliver under
this contract only domestic end products except to the extent that, in its offer, it specified delivery of foreign end products in the
provision entitled ‘‘Buy American Act—
North American Free Trade Agreement—

Israeli Trade Act.’’ If the Contractor specified in its offer that the Contractor would
supply a Canadian end product or an Israeli
end product, then the Contractor shall supply a Canadian end product, an Israeli end
product or, at the Contractor’s option, a domestic end product.
[64 FR 72434, Dec. 27, 1999, as amended at 66
FR 65350, Dec. 18, 2001; 67 FR 21536, Apr. 30,
2002; 68 FR 28086, May 22, 2003]

52.225–4 Buy American Act North
American Free Trade Agreement—
Israeli Trade Act Certificate.
As prescribed in 25.1101(b)(2)(i), insert
the following provision:
BUY AMERICAN ACT NORTH AMERICAN FREE
TRADE AGREEMENT—ISRAELI TRADE ACT
CERTIFICATE (JUNE 2003)
(a) The offeror certifies that each end product, except those listed in paragraph (b) or
(c) of this provision, is a domestic end product and that the offeror has considered components of unknown origin to have been
mined, produced, or manufactured outside
the United States. The terms ‘‘component,’’
‘‘domestic end product,’’ ‘‘end product,’’
‘‘foreign end product,’’ and ‘‘United States’’
are defined in the clause of this solicitation
entitled ‘‘Buy American Act—North American Free Trade Agreement—Israeli Trade
Act.’’
(b) The offeror certifies that the following
supplies are NAFTA country end products or
Israeli end products as defined in the clause
of this solicitation entitled ‘‘Buy American
Act—North American Free Trade Agreement—Israeli Trade Act’’:
NAFTA Country or Israeli End Products:
Line Item No. llllllllllllllll
Country of Origin llllllllllllll
(List as necessary)
(c) The offeror shall list those supplies that
are foreign end products (other than those
listed in paragraph (b) of this provision) as
defined in the clause of this solicitation entitled ‘‘Buy American Act—North American
Free Trade Agreement—Israeli Trade Act.’’
The offeror shall list as other foreign end
products those end products manufactured in
the United States that do not qualify as domestic end products.
Other Foreign End Products
Line Item No.: lllllllllllllll
Country of Origin: lllllllllllll
(List as necessary)
(d) The Government will evaluate offers in
accordance with the policies and procedures
of Part 25 of the Federal Acquisition Regulation.

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(End of provision)
Alternate I (May 2002). As prescribed
in 25.1101(b)(2)(ii), substitute the following paragraph (b) for paragraph (b)
of the basic provision:
(b) The offeror certifies that the following
supplies are Canadian end products as defined in the clause of this solicitation entitled ‘‘Buy American Act—North American
Free Trade Agreement—Israeli Trade Act—
Balance of Payments Program’’:
Canadian End Products:
Line Item No. llllllllllllllll
(List as necessary)

Alternate II (May 2002). As prescribed
in 25.1101(b)(2)(iii), substitute the following paragraph (b) for paragraph (b)
of the basic provision:
(b) The offeror certifies that the following
supplies are Canadian end products or Israeli
end products as defined in the clause of this
solicitation entitled ‘‘Buy American Act—
North American Free Trade Agreement—
Israeli Trade Act—Balance of Payments Program’’:
Canadian or Israeli End Products
Line Item No.: lllllllllllllll
Country of Origin: lllllllllllll
(List as necessary)
[64 FR 72435, Dec. 27, 1999; 65 FR 4633, Jan. 31,
2000, as amended at 67 FR 21536, May 15, 2002;
68 FR 28086, May 22, 2003]

52.225–5 Trade Agreements.
As prescribed in 25.1101(c)(1), insert
the following clause:
TRADE AGREEMENTS (JUNE 2003)
(a) Definitions. As used in this clause.
Caribbean Basin country means any of the
following countries: Antigua and Barbuda,
Aruba, Bahamas, Barbados, Belize, British
Virgin Islands, Costa Rica, Dominica, El Salvador, Grenada, Guatemala, Guyana, Haiti,
Honduras, Jamaica, Montserrat, Netherlands
Antilles, Nicaragua, St. Kitts and Nevis, St.
Lucia, St. Vincent and the Grenadines, Trinidad and Tobago.
Caribbean Basin country end product—
(1) Means an article that—
(i)(A) Is wholly the growth, product, or
manufacture of a Caribbean Basin country;
or
(B) In the case of an article that consists
in whole or in part of materials from another
country, has been substantially transformed
in a Caribbean Basin 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; and
(ii) Is not excluded from duty-free treatment for Caribbean countries under 19 U.S.C.
2703(b).
(A) For this reason, the following articles
are not Caribbean Basin country end products:
(1) Tuna, prepared or preserved in any
manner in airtight containers;
(2) Petroleum, or any product derived from
petroleum;
(3) 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 Harmonized Tariff Schedule of the
United States (HTSUS) column 2 rates of
duty apply (i.e., Afghanistan, Cuba, Laos,
North Korea, and Vietnam); and
(4) Certain of the following: textiles and
apparel articles; footwear, handbags, luggage, flat goods, work gloves, and leather
wearing apparel; or handloomed, handmade,
and folklore articles;
(B) Access to the HTSUS to determine
duty-free status of articles of these types is
available at http://www.customs.ustreas.gov/
impoexpo/impoexpo.htm. In particular, see
the following:
(1) General Note 3(c), Products Eligible for
Special Tariff treatment.
(2) General Note 17, Products of Countries
Designated as Beneficiary Countries under
the United States—Caribbean Basin Trade
Partnership Act of 2000.
(3) Section XXII, Chapter 98, Subchapter II,
Articles Exported and Returned, Advanced
or Improved Abroad, U.S. Note 7(b).
(4) Section XXII, Chapter 98, Subchapter
XX, Goods Eligible for Special Tariff Benefits under the United States—Caribbean
Basin Trade Partnership Act; and
(2) Refers to a product offered for purchase
under a supply contract, but for purposes of
calculating the value of the acquisition, includes services (except transportation services) incidental to the article, provided that
the value of those incidental services does
not exceed that of the article itself.
Designated country means any of the following countries:
Aruba, Austria, Bangladesh Belgium,
Benin, Bhutan, Botswana, Burkina Faso, Burundi, Canada, Cape Verde, Central African
Republic,
Chad,
Comoros,
Denmark,
Djibouti, Equatorial Guinea.
Finland,
France,
Gambia,
Germany,
Greece, Guinea, Guinea-Bissau, Haiti, Hong
Kong, Iceland, Ireland, Israel, Italy, Japan.
Kiribati, Korea, Republic of Lesotho,
Liechtenstein,
Luxembourg,
Malawi,
Maldives, Mali, Mozambique, Nepal, Netherlands, Niger, Norway, Portugal, Rwanda.

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48 CFR Ch. 1 (10–1–03 Edition)

Sao Tome and Principe, Sierra Leone,
Singapore, Somalia, Spain, Sweden, Switzerland, Tanzania U.R., Togo, Tuvalu, Uganda,
United Kingdom, Vanuatu, Western Samoa,
Yemen.
Designated country end product means an
article that—
(1) Is wholly the growth, product, or manufacture of a designated country; or
(2) In the case of an article that consists in
whole or in part of materials from another
country, has been substantially transformed
in a designated 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 the article,
provided that the value of those incidental
services does not exceed that of the article
itself.
End product means those articles, materials, and supplies to be acquired under the
contract for public use.
North American Free Trade Agreement country means Canada or Mexico.
North American Free Trade Agreement country end product means an article that—
(1) Is wholly the growth, product, or manufacture of a North American Free Trade
Agreement (NAFTA) country; or
(2) In the case of an article that consists in
whole or in part of materials from another
country, 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 the article, provided that
the value of those incidental services does
not exceed that of the article itself.
United States means the 50 States, the District of Columbia, and outlying areas.
U.S.-made end product means an article
that is mined, produced, or manufactured in
the United States or that is substantially
transformed in the United States 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.,
(b) Implementation. This clause implements
the Trade, Agreements Act (19 U.S.C. 2501, et
seq.) and the North American Free Trade
Agreement Implementation Act of 1993,
(NAFTA) (19 U.S.C. 3301 note), by restricting
the acquisition of end products that are not
U.S.-made, designated country, Caribbean
Basin country, or NAFTA country end products.,

(c) Delivery of end products. The Contracting Officer has determined that the
Trade Agreements Act and NAFTA apply to
this acquisition. Unless otherwise specified,
these trade agreements apply to all items in
the Schedule. The Contractor shall deliver
under this contract only U.S.-made, designated country, Caribbean Basin country,
or NAFTA country end products except to
the extent that, in its offer, it specified delivery of other end products in the provision
entitled ‘‘Trade Agreements Certificate.’’

(End of clause)
[64 FR 72435, Dec. 27, 1999, as amended at 65
FR 24322, Apr. 25, 2000; 66 FR 65350, 65371, Dec.
18, 2001; 67 FR 6119, Feb. 8, 2002; 67 FR 70520,
Nov. 22, 2002; 68 FR 28086, May 22, 2003]
EFFECTIVE DATE NOTE: At 68 FR 56685, Oct.
1, 2003, § 52.225–5 was amended by revising the
date of the clause to read ‘‘(Oct. 2003)’’, and
in paragraph (a) by adding the words ‘‘Dominican Republic’’ after the word ‘‘Dominica’’ in the definition of ‘‘Caribbean Basin
country’’ effective Oct. 31, 2003.

52.225–6 Trade Agreements Certificate.
As prescribed in 25.1101(c)(2), insert
the following provision:
TRADE AGREEMENTS CERTIFICATE (MAY 2002)
(a) The offeror certifies that each end product, except those listed in paragraph (b) of
this provision, is a U.S.-made, designated
country, Caribbean Basin country, or
NAFTA country end product, as defined in
the clause of this solicitation entitled
‘‘Trade Agreements.’’
(b) The offeror shall list as other end products those supplies that are not U.S.-made,
designated country, Caribbean Basin country, or NAFTA country end products.
Other End Products
Line Item No.:
Country of Origin: lllllllllllll
(List as necessary),
(c) The Government will evaluate offers in
accordance with the policies and procedures
of Part 25 of the Federal Acquisition Regulation. For line items subject to the Trade
Agreements Act, the Government will evaluate offers of U.S.-made, designated country,
Caribbean Basin country, or NAFTA country
end products without regard to the restrictions of the Buy American Act. The Government will consider for award only offers of
U.S.-made, designated country, Caribbean
Basin country, or NAFTA country end products unless the Contracting Officer determines that there are no offers for those products or that the offers for those products are

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52.225–8

insufficient to fulfill the requirements of
this solicitation.

(End of provision)
[64 FR 72436, Dec. 27, 1999]

(End of provision)
[64 FR 72436, Dec. 27, 1999, as amended at 67
FR 21537, Apr. 30, 2002]

52.225–7 Waiver of Buy American Act
for Civil Aircraft and Related Articles.
As prescribed in 25.1101(d), insert the
following provision:
WAIVER OF BUY AMERICAN ACT FOR CIVIL
AIRCRAFT AND RELATED ARTICLES (FEB 2000)
(a) Definition. 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.
(b) The U.S. Trade Representative has
waived the Buy American Act for acquisitions of civil aircraft and related articles
from countries that are parties to the Agreement on Trade in Civil Aircraft. Those countries are Austria, Belgium, Bulgaria, Canada,
Denmark, Egypt, Finland, France, Germany,
Greece, Ireland, Italy, Japan, Luxembourg,
Macao, the Netherlands, Norway, Portugal,
Romania, Spain, Sweden, Switzerland, and
the United Kingdom.
(c) For the purpose of this waiver, an article is a product of a country only if—
(1) It is wholly the growth, product, or
manufacture of that country; or
(2) In the case of an article that consists in
whole or in part of materials from another
country, 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 transformed.
(d) The waiver is subject to modification or
withdrawal by the U.S. Trade Representative.

52.225–8 Duty-Free Entry.
As prescribed in 25.1101(e), insert the
following clause:
DUTY-FREE ENTRY (FEB 2000)
(a) Definition. Customs territory of the United
States means the States, the District of Columbia, and Puerto Rico.
(b) Except as otherwise approved by the
Contracting Officer, the Contractor shall not
include in the contract price any amount for
duties on supplies specifically identified in
the Schedule to be accorded duty-free entry.
(c) Except as provided in paragraph (d) of
this clause or elsewhere in this contract, the
following procedures apply to supplies not
identified in the Schedule to be accorded
duty-free entry:
(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 under this contract, either as
end products or for incorporation into end
products. The Contractor shall furnish the
notice to the Contracting Officer at least 20
calendar days before the importation. The
notice shall identify the—
(i) Foreign supplies;
(ii) Estimated amount of duty; and
(iii) Country of origin.
(2) The Contracting Officer will determine
whether any of these supplies should be accorded duty-free entry and will notify the
Contractor within 10 calendar days after receipt of the Contractor’s notification.
(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.
(d) The Contractor is not required to provide the notification under paragraph (c) of
this clause for purchases of foreign supplies
if—
(1) The supplies are identical in nature to
items purchased by 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.
(e) The Contractor shall claim duty-free
entry only for supplies to be delivered to the
Government under this contract, either as
end products or incorporated into end products, and shall pay duty on supplies, or any

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52.225–9

48 CFR Ch. 1 (10–1–03 Edition)

portion of them, other than scrap, salvage,
or competitive sale authorized by the Contracting Officer, diverted to nongovernmental use.
(f) The Government will execute any required duty-free entry certificates for supplies to be accorded duty-free entry and will
assist the Contractor in obtaining duty-free
entry for these supplies.
(g) Shipping documents for supplies to be
accorded duty-free entry shall consign the
shipments to the contracting agency in care
of the Contractor and shall include the—
(1) Delivery address of the Contractor (or
contracting agency, if appropriate);
(2) Government prime contract number;
(3) Identification of carrier;
(4) Notation ‘‘UNITED STATES GOVERNMENT, lll [agency], lll Duty-free entry
to be claimed pursuant to Item No(s) lll
[from Tariff Schedules] lll, Harmonized
Tariff Schedules of the United States. Upon
arrival of shipment at port of entry, District
Director of Customs, please release shipment
under 19 CFR part 142 and notify [cognizant
contract administration office] for execution of
Customs Forms 7501 and 7501–A and any required duty-free entry certificates.’’;
(5) Gross weight in pounds (if freight is
based on space tonnage, state cubic feet in
addition to gross shipping weight); and
(6) Estimated value in United States dollars.
(h) The Contractor shall instruct the foreign supplier to—
(1) Consign the shipment as specified in
paragraph (g) of this clause;
(2) Mark all packages with the words
‘‘UNITED STATES GOVERNMENT’’ and the
title of the contracting agency; and
(3) Include with the shipment 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.
(i) The Contractor shall provide written
notice to the cognizant contract administration office immediately after notification by
the Contracting Officer that duty-free entry
will be accorded foreign supplies or, for dutyfree supplies identified in the Schedule, upon
award by the Contractor to the overseas supplier. The notice shall identify the—
(1) Foreign supplies;
(2) Country of origin;
(3) Contract number; and
(4) Scheduled delivery date(s).
(j) The Contractor shall include the substance of this clause in any subcontract if—
(1) Supplies identified in the Schedule to
be accorded duty-free entry will be imported
into the customs territory of the United
States; or
(2) Other foreign supplies in excess of
$10,000 may be imported into the customs
territory of the United States.

(End of clause)
[64 FR 72436, Dec. 27, 1999]

52.225–9 Buy American Act—Construction Materials.
As prescribed in 25.1102(a), insert the
following clause:
BUY AMERICAN ACT—CONSTRUCTION
MATERIALS (JUNE 2003)
(a) Definitions. As used in this clause—
Construction material means an article, material, or supply brought to the construction
site by the Contractor or a subcontractor for
incorporation into the building or work. The
term also includes an item brought to the
site preassembled from articles, materials,
or supplies. However, emergency life safety
systems, such as emergency lighting, fire
alarm, and audio evacuation systems, that
are discrete systems incorporated into a public building or work and that are produced as
complete systems, are evaluated as a single
and distinct construction material regardless of when or how the individual parts or
components of those systems are delivered to
the construction site. Materials purchased
directly by the Government are supplies, not
construction material.
Cost of components means—
(1) For components purchased by the Contractor, the acquisition cost, including
transportation costs to the place of incorporation into the construction material
(whether or not such costs are paid to a domestic firm), and any applicable duty
(whether or not a duty-free entry certificate
is issued); or
(2) For components manufactured by the
Contractor, all costs associated with the
manufacture of the component, including
transportation costs as described in paragraph (1) of this definition, plus allocable
overhead costs, but excluding profit. Cost of
components does not include any costs associated with the manufacture of the end product.
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 for
which nonavailability determinations have
been made are treated as domestic.
Foreign construction material means a construction material other than a domestic
construction material.
United States means the 50 States, the District of Columbia, and outlying areas.

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52.225–9

(b) Domestic preference. (1) This clause implements the Buy American Act (41 U.S.C.
10a–10d) by providing a preference for domestic construction material. The Contractor
shall use only domestic construction material 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
construction material or components listed
by the Government as follows: lll [Contracting Officer to list applicable excepted materials or indicate ‘‘none’’]
(3) The Contracting Officer may add other
foreign construction material to the list in
paragraph (b)(2) of this clause if the Government determines that—
(i) The cost of domestic construction material would be unreasonable. The cost of a
particular domestic construction material
subject to the requirements of the Buy
American Act is unreasonable when the cost
of such material exceeds the cost of foreign
material by more than 6 percent;
(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.
(c) Request for determination of inapplicability of the Buy American Act. (1)(i) Any Contractor request to use foreign construction
material in accordance with paragraph (b)(3)
of this clause shall include adequate information for Government evaluation of the request, including—
(A) A description of the foreign and domestic construction materials;
(B) Unit of measure;
(C) Quantity;
(D) Price;
(E) Time of delivery or availability;
(F) Location of the construction project;

(G) Name and address of the proposed supplier; and
(H) A detailed justification of the reason
for use of foreign construction materials
cited in accordance with paragraph (b)(3) of
this clause.
(ii) A request 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.
(iii) 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).
(iv) Any Contractor request for a determination submitted after contract award
shall explain why the Contractor could not
reasonably foresee the need for such determination and could not have requested the
determination before contract award. If the
Contractor does not submit a satisfactory
explanation, the Contracting Officer need
not make a determination.
(2) If the Government determines after
contract award that an exception to the Buy
American Act applies and the Contracting
Officer and the Contractor negotiate adequate consideration, the Contracting Officer
will modify the contract to allow use of the
foreign construction material. However,
when the basis for the exception is the unreasonable price of a domestic construction
material, adequate consideration is not less
than the differential established in paragraph (b)(3)(i) of this clause.
(3) Unless the Government determines that
an exception to the Buy American Act applies, use of foreign construction material is
noncompliant with the Buy American Act or
Balance of Payments Program.
(d) Data. To permit evaluation of requests
under paragraph (c) of this clause based on
unreasonable cost, the Contractor shall include the following information and any applicable supporting data based on the survey
of suppliers:

FOREIGN AND DOMESTIC CONSTRUCTION MATERIALS PRICE COMPARISON
Construction material description
Item 1
Foreign construction material .................................
Domestic construction material ..............................
Item 2
Foreign construction material .................................
Domestic construction material ..............................

Unit of measure

Quantity

Price (dollars) 1

....................................
....................................

....................................
....................................

....................................
....................................

....................................
....................................

....................................
....................................

....................................
....................................

Include all delivery costs to the construction site and any applicable duty (whether or not a duty-free entry certificate is issued).
List name, address, telephone number, and contact for suppliers surveyed. Attach copy of response; if oral, attach summary.
Include other applicable supporting information.

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52.225–10

48 CFR Ch. 1 (10–1–03 Edition)
(End of clause)

[64 FR 72437, Dec. 27, 1999; 65 FR 4633, Jan. 31,
2000; 66 FR 65350, Dec. 18, 2001; 67 FR 21537,
Apr. 30, 2002; 68 FR 28086, May 22, 2003]

52.225–10 Notice of Buy American Act
Requirement— Construction Materials..
As prescribed in 25.1102(b)(1), insert
the following provision:
NOTICE OF BUY AMERICAN ACT REQUIREMENT—CONSTRUCTION
MATERIALS (MAY
2002)
(a) Definitions. Construction material, domestic construction material, and foreign construction material, as used in this provision, are
defined in the clause of this solicitation entitled ‘‘Buy American Act—Construction Materials’’ (Federal Acquisition Regulation
(FAR) clause 52.225–9).
(b) Requests for determinations of inapplicability. An offeror requesting a determination
regarding the inapplicability of the Buy
American Act should submit the request to
the Contracting Officer in time to allow a
determination before submission of offers.
The offeror shall include the information and
applicable supporting data required by paragraphs (c) and (d) of the clause at FAR
52.225–9 in the request. If an offeror has not
requested a determination regarding the inapplicability of the Buy American Act before
submitting its offer, or has not received a response to a previous request, the offeror
shall include the information and supporting
data in the offer.
(c) Evaluation of offers. (1) The Government
will evaluate an offer requesting exception
to the requirements of the Buy American
Act, based on claimed unreasonable cost of
domestic construction material, by adding to
the offered price the appropriate percentage
of the cost of such foreign construction material, as specified in paragraph (b)(3)(i) of
the clause at FAR 52.225–9.
(2) If evaluation results in a tie between an
offeror that requested the substitution of
foreign construction material based on unreasonable cost and an offeror that did not
request an exception, the Contracting Officer
will award to the offeror that did not request
an exception based on unreasonable cost.
(d) Alternate offers. (1) When an offer includes foreign construction material not
listed by the Government in this solicitation
in paragraph (b)(2) of the clause at FAR
52.225-9, the offeror also may submit an alternate offer based on use of equivalent domestic construction material.
(2) If an alternate offer is submitted, the
offeror shall submit a separate Standard
Form 1442 for the alternate offer, and a separate price comparison table prepared in accordance with paragraphs (c) and (d) of the

clause at FAR 52.225–9 for the offer that is
based on the use of any foreign construction
material for which the Government has not
yet determined an exception applies.
(3) If the Government determines that a
particular exception requested in accordance
with paragraph (c) of the clause at FAR
52.225–9 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. An
offer based on use of the foreign construction
material for which an exception was requested—
(i) Will be rejected as nonresponsive if this
acquisition is conducted by sealed bidding;
or
(ii) May be accepted if revised during negotiations.

(End of provision)
Alternate I (May 2002). As prescribed
in 25.1102(b)(2), substitute the following
paragraph (b) for paragraph (b) of the
basic provision:
(b) Requests for determinations of inapplicability. An offeror requesting a determination
regarding the inapplicability of the Buy
American Act shall submit the request with
its offer, including the information and applicable supporting data required by paragraphs (c) and (d) of the clause at FAR
52.225–9.
[64 FR 72438, Dec. 27, 1999, as amended at 67
FR 21537, Apr. 30, 2002]

52.225–11 Buy American Act—Construction Materials under Trade
Agreements.
As prescribed in 25.1102(c), insert the
following clause:
BUY AMERICAN ACT—CONSTRUCTION MATERIALS UNDER TRADE AGREEMENTS (JUNE
2003)
(a) Definitions. As used in this clause—
Component means an article, material, or
supply incorporated directly into a construction material.
Construction material means an article, material, or supply brought to the construction
site by the Contractor or subcontractor for
incorporation into the building or work. The
term also includes an item brought to the
site preassembled from articles, materials,
or supplies. However, emergency life safety
systems, such as emergency lighting, fire
alarm, and audio evacuation systems, that
are discrete systems incorporated into a public building or work and that are produced as
complete systems, are evaluated as a single
and distinct construction material regardless of when or how the individual parts or

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Federal Acquisition Regulation

52.225–11

components of those systems are delivered to
the construction site. Materials purchased
directly by the Government are supplies, not
construction material.
Cost of components means—
(1) For components purchased by the Contractor, the acquisition cost, including
transportation costs to the place of incorporation into the construction material
(whether or not such costs are paid to a domestic firm), and any applicable duty
(whether or not a duty-free entry certificate
is issued); or
(2) For components manufactured by the
Contractor, all costs associated with the
manufacture of the component, including
transportation costs as described in paragraph (1) of this definition, plus allocable
overhead costs, but excluding profit. Cost of
components does not include any costs associated with the manufacture of the end product.
Designated country means any of the following countries: Aruba, Austria, Bangladesh, Belgium, Benin, Bhutan, Botswana,
Burkina Faso, Burundi, Canada, Cape Verde,
Central African Republic, Chad, Comoros,
Denmark.
Djibouti, Equatorial Guinea, Finland,
France, Gambia, Germany, Greece, Guinea,
Guinea-Bissau, Haiti, Hong Kong, Iceland,
Ireland, Israel, Italy, Japan.
Kiribati, Korea, Republic of, Lesotho,
Liechtenstein,
Luxembourg,
Malawi,
Maldives, Mali, Mozambique, Nepal, Netherlands, Niger, Norway, Portugal, Rwanda.
Sao Tome and Principe, Sierra Leone,
Singapore, Somalia, Spain, Sweden, Switzerland, Tanzania U.R., Togo, Tuvalu, Uganda,
United Kingdom, Vanuatu, Western Samoa,
Yemen.
Designated country construction material
means a construction material that—
(1) Is wholly the growth, product, or manufacture of a designated country; or
(2) In the case of a construction material
that consists in whole or in part of materials
from another country, 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 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 for
which nonavailability determinations have
been made are treated as domestic.
Foreign construction material means a construction material other than a domestic
construction material.

North American Free Trade Agreement country means Canada or Mexico.
North American Free Trade Agreement country construction material means a construction material that—
(1) Is wholly the growth, product, or manufacture of a North American Free Trade
Agreement (NAFTA) country; or
(2) In the case of a construction material
that consists in whole or in part of materials
from another country, has been substantially transformed in a NAFTA country into
a new and different construction material
distinct from the materials from which it
was transformed.
United States means the 50 States, the District of Columbia, and outlying areas.
(b) Construction materials. (1) This clause
implements the Buy American Act (41 U.S.C.
10a–10d) by providing a preference for domestic construction material. In addition, the
Contracting Officer has determined that the
Trade Agreements Act and the North American Free Trade Agreement (NAFTA) apply
to this acquisition. Therefore, the Buy
American Act restrictions are waived for
designated country and NAFTA country construction materials.
(2) The Contractor shall use only domestic,
designated country, or NAFTA country construction material in performing this contract, except as provided in paragraphs (b)(3)
and (b)(4) of this clause.
(3) The requirement in paragraph (b)(2) of
this clause does not apply to the construction materials or components listed by the
Government as follows:lll [Contracting Officer to list applicable excepted materials or indicate ‘‘none’’]
(4) The Contracting Officer may add other
foreign construction material to the list in
paragraph (b)(3) of this clause if the Government determines that—
(i) The cost of domestic construction material would be unreasonable. The cost of a
particular domestic construction material
subject to the restrictions of the Buy American Act is unreasonable when the cost of
such material exceeds the cost of foreign material by more than 6 percent;
(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.
(c) Request for determination of inapplicability of the Buy American Act. (1)(i) Any Contractor request to use foreign construction
material in accordance with paragraph (b)(4)
of this clause shall include adequate information for Government evaluation of the request, including—

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52.225–12

48 CFR Ch. 1 (10–1–03 Edition)

(A) A description of the foreign and domestic construction materials;
(B) Unit of measure;
(C) Quantity;
(D) Price;
(E) Time of delivery or availability;
(F) Location of the construction project;
(G) Name and address of the proposed supplier; and
(H) A detailed justification of the reason
for use of foreign construction materials
cited in accordance with paragraph (b)(3) of
this clause.
(ii) A request 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.
(iii) 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).
(iv) Any Contractor request for a determination submitted after contract award
shall explain why the Contractor could not
reasonably foresee the need for such determination and could not have requested the

determination before contract award. If the
Contractor does not submit a satisfactory
explanation, the Contracting Officer need
not make a determination.
(2) If the Government determines after
contract award that an exception to the Buy
American Act applies and the Contracting
Officer and the Contractor negotiate adequate consideration, the Contracting Officer
will modify the contract to allow use of the
foreign construction material. However,
when the basis for the exception is the unreasonable price of a domestic construction
material, adequate consideration is not less
than the differential established in paragraph (b)(4)(i) of this clause.
(3) Unless the Government determines that
an exception to the Buy American Act applies, use of foreign construction material is
noncompliant with the Buy American Act.
(d) Data. To permit evaluation of requests
under paragraph (c) of this clause based on
unreasonable cost, the Contractor shall include the following information and any applicable supporting data based on the survey
of suppliers:

FOREIGN AND DOMESTIC CONSTRUCTION MATERIALS PRICE COMPARISON
Construction material description
Item 1:
Foreign construction material .................................
Domestic construction material ..............................
Item 2:
Foreign construction material .................................
Domestic construction material ..............................

Unit of measure

Quantity

Price (dollars) 1

....................................
....................................

....................................
....................................

....................................
....................................

....................................
....................................

....................................
....................................

....................................
....................................

1 Include all delivery costs to the construction site and any applicable duty (whether or not a duty-free entry certificate is
issued).
List name, address, telephone number, and contact for suppliers surveyed. Attach copy of response; if oral, attach summary.
Include other applicable supporting information.

(End of clause)
Alternate I (June 2000). As prescribed
in 25.1102(c)(3), delete the definitions of
‘‘North American Free Trade Agreement country’’ and ‘‘North American
Free Trade Agreement country construction material’’ from the definitions in paragraph (a) of the basic
clause and substitute the following
paragraphs (b)(1) and (b)(2) for paragraphs (b)(1) and (b)(2) of the basic
clause:
(b) Construction materials. (1) This clause
implements the Buy American Act (41 U.S.C.
10a–10d) by providing a preference for domestic construction material. In addition, the
Contracting Officer has determined that the
Trade Agreements Act applies to this acquisition. Therefore, the Buy American Act restrictions are waived for designated country
construction materials.

(2) The Contractor shall use only domestic
or designated country construction material
in performing this contract, except as provided in paragraphs (b)(3) and (b)(4) of this
clause.
[64 FR 72438, Dec. 27, 1999; 65 FR 4633, Jan. 31,
2000, as amended at 65 FR 36026, June 6, 2000;
66 FR 65351, 65371, Dec. 18, 2001; 67 FR 21537,
Apr. 30, 2002; 67 FR 43520, June 27, 2002; 68 FR
28086, May 22, 2003]

52.225–12 Notice of Buy American Act
Requirement— Construction Materials under Trade Agreements.
As prescribed in 25.1102(d)(1), insert
the following provision:
NOTICE OF BUY AMERICAN ACT REQUIREMENT—CONSTRUCTION
MATERIALS UNDER
TRADE AGREEMENTS (MAY 2002)
(a) Definitions. Construction material, designated country construction material, domestic

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Federal Acquisition Regulation

52.225–12

construction material, foreign construction material, and NAFTA country construction material, as used in this provision, are defined in
the clause of this solicitation entitled ‘‘Buy
American
Act—Construction
Materials
under Trade Agreements’’ (Federal Acquisition Regulation (FAR) clause 52.225–11).
(b) Requests for determination of inapplicability. An offeror requesting a determination
regarding the inapplicability of the Buy
American Act should submit the request to
the Contracting Officer in time to allow a
determination before submission of offers.
The offeror shall include the information and
applicable supporting data required by paragraphs (c) and (d) of FAR clause 52.225–11 in
the request. If an offeror has not requested a
determination regarding the inapplicability
of the Buy American Act before submitting
its offer, or has not received a response to a
previous request, the offeror shall include
the information and supporting data in the
offer.
(c) Evaluation of offers. (1) The Government
will evaluate an offer requesting exception
to the requirements of the Buy American
Act, based on claimed unreasonable cost of
domestic construction materials, by adding
to the offered price the appropriate percentage of the cost of such foreign construction
material, as specified in paragraph (b)(4)(i) of
FAR clause 52.225–11.
(2) If evaluation results in a tie between an
offeror that requested the substitution of
foreign construction material based on unreasonable cost and an offeror that did not
request an exception, the Contracting Officer
will award to the offeror that did not request
an exception based on unreasonable cost.
(d) Alternate offers. (1) When an offer includes foreign construction material, other
than designated country or NAFTA country
construction material, that is not listed by
the Government in this solicitation in paragraph (b)(3) of FAR clause 52.225–11, the offeror also may submit an alternate offer
based on use of equivalent domestic, designated country, or NAFTA country construction material.
(2) If an alternate offer is submitted, the
offeror shall submit a separate Standard
Form 1442 for the alternate offer, and a separate price comparison table prepared in accordance with paragraphs (c) and (d) of FAR
clause 52.225–11 for the offer that is based on
the use of any foreign construction material
for which the Government has not yet determined an exception applies.
(3) If the Government determines that a
particular exception requested in accordance
with paragraph (c) of FAR clause 52.225–11
does not apply, the Government will evaluate only those offers based on use of the
equivalent domestic, designated country, or
NAFTA country construction material, and
the offeror shall be required to furnish such
domestic, designated country, or NAFTA

country construction material. An offer
based on use of the foreign construction material for which an exception was requested—
(i) Will be rejected as nonresponsive if this
acquisition is conducted by sealed bidding;
or
(ii) May be accepted if revised during negotiations.

(End of provision)
Alternate I (May 2002). As prescribed
in 25.1102(d)(2), substitute the following
paragraph (b) for paragraph (b) of the
basic provision:
(b) Requests for determination of inapplicability. An offeror requesting a determination
regarding the inapplicability of the Buy
American Act shall submit the request with
its offer, including the information and applicable supporting data required by paragraphs (c) and (d) of FAR clause 52.225–11.

Alternate II (May 2002). As prescribed
in 25.1102(d)(3), substitute the following
paragraphs (a) and (d) for paragraphs
(a) and (d) of the basic provision:
(a) Definitions. ‘‘Construction material,’’
‘‘designated country construction material,’’
‘‘domestic construction material,’’ and ‘‘foreign construction material,’’ as used in this
provision, are defined in the clause of this
solicitation entitled ‘‘Buy American Act—
Construction Materials under Trade Agreements’’ (Federal Acquisition Regulation
(FAR) clause 52.225–11).
(d) Alternate offers. (1) When an offer includes foreign construction material, other
than designated country construction material, that is not listed by the Government in
this solicitation in paragraph (b)(3) of FAR
clause 52.225–11, the offeror also may submit
an alternate offer based on use of equivalent
domestic or designated country construction
material.
(2) If an alternate offer is submitted, the
offeror shall submit a separate Standard
Form 1442 for the alternate offer, and a separate price comparison table prepared in accordance with paragraphs (c) and (d) of FAR
clause 52.225–11 for the offer that is based on
the use of any foreign construction material
for which the Government has not yet determined an exception applies.
(3) If the Government determines that a
particular exception requested in accordance
with paragraph (c) of FAR clause 52.225–11
does not apply, the Government will evaluate only those offers based on use of the
equivalent domestic or designated country
construction material, and the offeror shall
be required to furnish such domestic or designated country construction material. An
offer based on use of the foreign construction

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52.225–13

48 CFR Ch. 1 (10–1–03 Edition)

material for which an exception was requested—
(i) Will be rejected as nonresponsive if this
acquisition is conducted by sealed bidding;
or
(ii) May be accepted if revised during negotiations.
[64 FR 72440, Dec. 27, 1999, as amended at 65
FR 36027, June 6, 2000; 67 FR 21537, Apr. 30,
2002]

52.225–13 Restrictions on Certain Foreign Purchases.
As prescribed in 25.1103(a), insert the
following clause:
RESTRICTIONS ON CERTAIN FOREIGN
PURCHASES (JUNE 2003)
(a) 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 and its outlying areas
under regulations of the Office of Foreign
Assets Control, Department of the Treasury.
Those countries are Cuba, Iran, Iraq, Libya,
North Korea, Sudan, the territory of Afghanistan controlled by the Taliban, and Serbia
(excluding the territory of Kosovo).
(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 shall insert this clause,
including this paragraph (c), in all subcontracts.

ute administered by OFAC, or if OFAC’s implementing regulations at 31 CFR chapter V,
would prohibit such a transaction by a person subject to the jurisdiction of the United
States.
(b) Except as authorized by OFAC, most
transactions involving Cuba, Iran, Libya,
and Sudan are prohibited, as are most imports from North Korea, into the United
States or its outlying areas. Lists of entities
and individuals subject to economic sanctions are included in OFAC’s List of Specially Designated Nationals and Blocked
Persons at http://www.epls.gov/Terlist1.html.
More information about these restrictions,
as well as updates, is available in the OFAC’s
regulations at 31 CFR chapter V and/or on
OFAC’s Web site at http://www.treas.gov/ofac.

*

*

*

*

*

52.225–14 Inconsistency
between
English Version and Translation of
Contract.
As prescribed in 25.1103(b), insert the
following clause:
INCONSISTENCY BETWEEN ENGLISH VERSION
AND TRANSLATION OF CONTRACT (FEB 2000)
In the event of inconsistency between any
terms of this contract and any translation
into another language, the English language
meaning shall control.

(End of clause)
[64 FR 72440, Dec. 27, 1999]

(End of clause)
[64 FR 72440, Dec. 27, 1999, as amended at 65
FR 36028, June 6, 2000; 68 FR 28086, May 22,
2003]
EFFECTIVE DATE NOTE: At 68 FR 56686, Oct.
1, 2003, § 52.225–13 was amended by revising
the date of the clause and paragraphs (a) and
(b), effective Oct. 31, 2003. For the convenience of the user, the revised text is set forth
below:
52.225–13 Restrictions on Certain Foreign
Purchases.

*

*

*

*

*

RESTRICTIONS ON CERTAIN FOREIGN
PURCHASES (OCT. 2003)
(a) Except as authorized by the Office of
Foreign Assets Control (OFAC) in the Department of the Treasury, the Contractor
shall not acquire, for use in the performance
of this contract, any supplies or services if
any proclamation, Executive order, or stat-

52.225–15 Sanctioned European Union
Country End Products.
As prescribed in 25.1103(c), insert the
following clause:
SANCTIONED EUROPEAN UNION COUNTRY END
PRODUCTS (FEB 2000)
(a) Definitions. As used in this clause—
Sanctioned European Union country end
product means an article that—
(1) Is wholly the growth, product, or manufacture of a sanctioned European Union (EU)
member state; or
(2) In the case of an article that consists in
whole or in part of materials from another
country, has been substantially transformed
in a sanctioned EU member state 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

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Federal Acquisition Regulation

52.226–1

transportation services) incidental to the article, provided that the value of those incidental services does not exceed that of the
article itself.
Sanctioned European Union member state
means Austria, Belgium, Denmark, Finland,
France, Ireland, Italy, Luxembourg, the
Netherlands, Sweden, or the United Kingdom.
(b) The Contractor shall not deliver any
sanctioned European Union country end
products under this contract.

(End of clause)

(End of provision)
[64 FR 72441, Dec. 27, 1999]

52.226

[Reserved]

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 (JUN
2000)

[64 FR 72440, Dec. 27, 1999]

52.225–16 Sanctioned European Union
Country Services.
As prescribed in 25.1103(c), insert the
following clause:
SANCTIONED EUROPEAN UNION COUNTRY
SERVICES (FEB 2000)
(a) Definition. Sanctioned European Union
member state, as used in this clause, means
Austria,
Belgium,
Denmark,
Finland,
France, Ireland, Italy, Luxembourg, the
Netherlands, Sweden, or the United Kingdom.
(b) The Contractor shall not perform services under this contract in a sanctioned European Union member state. This prohibition
does not apply to subcontracts.

(End of clause)
[64 FR 72441, Dec. 27, 1999]

52.225–17 Evaluation of Foreign Currency Offers.
As prescribed in 25.1103(d), insert the
following provision:
EVALUATION OF FOREIGN CURRENCY OFFERS
(FEB 2000)
If the Government receives offers in more
than one currency, the Government will
evaluate offers by converting the foreign
currency to United States currency using
[Contracting Officer to insert source of rate] in
effect as follows:
(a) For acquisitions conducted using sealed
bidding procedures, on the date of bid opening.
(b) For acquisitions conducted using negotiation procedures—
(1) On the date specified for receipt of offers, if award is based on initial offers; otherwise
(2) On the date specified for receipt of proposal revisions.

(a) Definitions. As used in this clause:
Indian means any person who is a member
of any Indian tribe, band, group, pueblo or
community that 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 constitutes 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, that 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.
(b) The Contractor shall use its best efforts
to give Indian organizations and Indianowned 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
representation of an Indian organization or
Indian-owned economic enterprise as to its
eligibility, unless an interested party challenges its status or the Contracting Officer

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52.226–2

48 CFR Ch. 1 (10–1–03 Edition)

has independent reason to question that status. In the event of a challenge to the representation of a subcontractor, the Contracting Officer will 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 2626–MIB, Washington, DC
20240–4000.
The BIA will determine the eligibility and
notify the Contracting Officer. No incentive
payment will 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 adjustment to the
prime contract is 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.
(c) The Contracting Officer, subject to the
terms and conditions of the contract and the
availability of funds, will authorize an incentive payment of 5 percent of the amount paid
to the subcontractor. The Contracting Officer will seek funding in accordance with
agency procedures.

(End of clause)
[56 FR 41737, Aug. 22, 1991, as amended at 61
FR 39211, July 26, 1996; 63 FR 70277, Dec. 18,
1998; 64 FR 10533, Mar. 4, 1999; 64 FR 72449,
Dec. 27, 1999; 65 FR 24323, Apr. 25, 2000]

52.226–2 Historically Black College or
University and Minority Institution
Representation.
As prescribed in 26.304, insert the following provision:
HISTORICALLY BLACK COLLEGE OR UNIVERSITY
AND MINORITY INSTITUTION REPRESENTATION (MAY 2001)
(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. 1067k, including a Hispanic-serving institution of higher education, as defined in Section 316(b)(1) of the
Act (20 U.S.C. 1101a)).
(b) Representation. The offeror represents
that it—
[] is [] is not a historically black college or
university;
[] is [] is not a minority institution.

(End of provision)
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.)

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Federal Acquisition Regulation

52.227–3

(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]

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
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]

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:

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52.227–4

48 CFR Ch. 1 (10–1–03 Edition)

(c) This patent indemnification shall not
apply to the following items: lll
[Contracting Officer list and/or identify the
items to be excluded from this indemnity]

from items, is the exclusive prerogative of
the agency head or designee (See 27.203–6).

Alternate II (APR 1984). The following
paragraph (c) is added to the clause:

52.227–5

(c) This patent indemnification shall cover
the following items: lllll

[49 FR 12987, Mar. 30, 1984]

Waiver of Indemnity.

As prescribed at 27.203–6, insert the
following clause:
WAIVER OF INDEMNITY (APR 1984)

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]

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.

(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:
llllllllllllllllllllllll
Contracting Officer specifically identify the item
to be excluded
NOTE: Exclusion from indemnity of specified, identified patents, as distinguished

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:
llllllllllllllllllllllll
Contracting Officer identify the patents by
number or by other means if more appropriate

(End of clause)
[49 FR 12987, Mar. 30, 1984]

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:

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Federal Acquisition Regulation

52.227–10

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]

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 ll [Contracting Officer fill in],
and the royalty rate is ll [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)

(End of clause)
[49 FR 12988, Mar. 30, 1984]

52.227–10 Filing of Patent Applications—Classified Subject Matter.

[49 FR 12988, Mar. 30, 1984]

52.227–8

(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.

[Reserved]

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
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.

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.

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52.227–11

48 CFR Ch. 1 (10–1–03 Edition)

(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]

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
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

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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
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 oppo-

sition 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 royaltyfree 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

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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.
(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 in-

tended 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 marchin 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

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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 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 Con-

tractor 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: llll *
[*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

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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]

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
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 Busi-

ness 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

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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.
(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 Governmentowned 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

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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
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

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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
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.

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48 CFR Ch. 1 (10–1–03 Edition)

(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:
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: lll*
[*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]

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.

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(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
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 ap-

plication f 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

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48 CFR Ch. 1 (10–1–03 Edition)

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.
(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

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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
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

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48 CFR Ch. 1 (10–1–03 Edition)

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: lll *
[*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
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]

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

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52.227–14

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
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

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52.227–14

48 CFR Ch. 1 (10–1–03 Edition)

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.
(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

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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. lll
(and subcontractlll, 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
the Government makes such disclosure subject to prohibition against further use and
disclosure: [Agencies may list additional pur-

poses 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.lll (and subcontractlll, 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

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52.227–15

48 CFR Ch. 1 (10–1–03 Edition)

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.lll (and subcontract lll, if appropriate) with lll (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
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 dis-

play 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]

52.227–15 Representation of Limited
Rights Data and Restricted Computer Software.
As prescribed in 27.409(g), insert the
following provision:
STATEMENT OF LIMITED RIGHTS DATA AND
RESTRICTED COMPUTER SOFTWARE (MAY 1999)
(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 Alternate II or Alternate III in the clause at 52.227–14, Rights in
Data—General, the offeror shall complete
paragraph (c) of this provision to either state

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52.227–17

that none of the data qualify as limited
rights data or restricted computer software,
or identify, to the extent feasible, 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.
(c) The offeror has reviewed the requirements for the delivery of data or software
and states [offeror check appropriate block]—
b None of the data proposed for fulfilling
such requirements qualifies as limited rights
data or restricted computer software.
b Data proposed for fulfilling such requirements qualify as limited rights data or restricted computer software and are identified as follows:
llllllllllllllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll
NOTE: ‘‘Limited rights data’’ and ‘‘Restricted computer software’’ are defined in
the contract clause entitled ‘‘Rights in
Data—General.’’

(End of provision)
[64 FR 10533, Mar. 4, 1999]

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
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]

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

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48 CFR Ch. 1 (10–1–03 Edition)

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
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 in-

corporated 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]

52.227–18 Rights
Works.

in

Data—Existing

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]

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,

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Federal Acquisition Regulation

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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;
(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.
lll.)
(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]

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

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52.227–20

48 CFR Ch. 1 (10–1–03 Edition)

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—
(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.lll (and subcontract lll 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

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Federal Acquisition Regulation

52.227–21

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.
(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]

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, llll, hereby declares
that, to the best of its knowledge and belief,
the technical data delivered herewith under
Government contract No. lll (and subcontract lll, 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

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52.227–22

48 CFR Ch. 1 (10–1–03 Edition)

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.
(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]

52.227–22 Major
Rights.

System—Minimum

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]

52.227–23 Rights
(Technical).

to

Proposal

As prescribed in 27.409(s), insert the
following clause:
RIGHTS TO PROPOSAL DATA (TECHNICAL) (JUN
1987)
Except for data contained on pages lll,
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 lll, upon which this contract is
based.

(End of clause)
[52 FR 18156, May 13, 1987]

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,

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Federal Acquisition Regulation

52.228–4

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 llll percent of the bid price or
$llll, 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 clause)
[48 FR 42478, Sept. 19, 1983, as amended at 61
FR 31653, June 20, 1996; 62 FR 44807, Aug. 22,
1997]

52.228–3 Workers’ Compensation
surance (Defense Base Act).

As prescribed in 28.309(a), insert the
following clause:
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 provision)

(End of clause)

[61 FR 39213, July 26, 1996]

52.228–2

[48 FR 42478, Sept. 19, 1983, as amended at 68
FR 28086, May 22, 2003]

Additional Bond Security.

As prescribed in 28.106–4(a), insert the
following clause:

52.228–4 Workers’ Compensation and
War-Hazard Insurance Overseas.

ADDITIONAL BOND SECURITY (OCT 1997)

As prescribed in 28.309(b), insert the
following clause:

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
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.

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.

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52.228–5

48 CFR Ch. 1 (10–1–03 Edition)

(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)
[48 FR 42478, Sept. 19, 1983, as amended at 68
FR 28086, May 22, 2003]

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
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]

52.228–6

[Reserved]

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 selfinsurance 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

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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
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]

52.228–8 Liability
and
Insurance—
Leased Motor Vehicles.
As prescribed in 28.312, insert the following clause:
LIABILITY AND INSURANCE—LEASED MOTOR
VEHICLES (MAY 1999)
(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

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48 CFR Ch. 1 (10–1–03 Edition)

insurer for subrogation against the Government by reason of any payment under the
policies.
(e) The contract price shall not include any
costs 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; 64 FR 10534, Mar.
4, 1999]

52.228–9 Cargo Insurance.
As prescribed in 28.313(a), insert the
following clause:

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 $ll for each person and $ll for
each occurrence and (2) property damage of
not less than $ll for each accident and
$ll 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)

CARGO INSURANCE (MAY 1999)
(a) The Contractor, at the Contractor’s expense, shall provide and maintain, during the
continuance of this contract, cargo insurance of $lllll per vehicle to cover the
value of property on each vehicle and of
$lllll to cover the total value of the
property in the shipment.
(b) All insurance shall be written on companies acceptable to lllll [insert name of
contracting agency], and policies shall include
such terms and conditions as required by
lllll [insert name of contracting agency].
The Contractor shall provide evidence of acceptable cargo insurance to lllll [insert
name of contracting agency] 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 lllll [insert name
and address of contracting agency], 30 days in
advance of the effective date of any reduction in, or cancellation of, this policy; and
(2) Evidence of any renewal policy to the
address specified in paragraph (1) of this
statement, not less than 15 days prior to the
expiration of any current policy on file with
lllll [insert name of contracting agency].’’

(End of clause)
[64 FR 10534, Mar. 4, 1999]

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

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

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Professional Appraisal Practice, as promulgated by the Appraisal Foundation.

(End of clause)

(End of clause)

[61 FR 31654, June 20, 1996, as amended at 62
FR 44807, Aug. 22, 1997; 65 FR 46071, July 26,
2000]

[54 FR 48995, Nov. 28, 1989, as amended at 56
FR 67137, Dec. 27, 1991]

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]

52.228–13 Alternative Payment Protections.
As prescribed in 28.102–3(b), insert the
following clause:
ALTERNATIVE PAYMENT PROTECTIONS (JUL
2000)
(a) The Contractor shall submit one of the
following payment protections:
llllllllllllllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll
(b) The amount of the payment protection
shall be 100 percent of the contract price.
(c) The submission of the payment protection is required within ll 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.

52.228–14 Irrevocable Letter of Credit.
As prescribed in 28.204–4, insert the
following clause:
IRREVOCABLE LETTER OF CREDIT (DEC 1999)
(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

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48 CFR Ch. 1 (10–1–03 Edition)

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:
llllllllllllllllllllllll
[Issuing Financial Institution’s Letterhead
or Name and Address]
Issue Date llllllllllllllllll
Irrevocable Letter of Credit No. llllll
Account party’s name llllllllllll
Account party’s address llllllllll
For Solicitation No. llllllllllll
(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
$ll. This Letter of Credit is payable at
[issuing financial institution’s and, if any, confirming financial institution’s] office at [issuing
financial institution’s address and, if any, confirming financial institution’s address] and expires with our close of business on ll, 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 insti-

tution, 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 llllll [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] llllllll
(Date)lllllll
Our Letter of Credit
Advice Number lllllllllllllll
Beneficiary: lllllllllllllllll
[U.S. Government agency]
Issuing Financial Institution: lllllll
Issuing Financial Institution’s LC No.: lll
Gentlemen:
1. We hereby confirm the above indicated
Letter of Credit, the original of which is attached, issued by lllll [name of issuing
financial institution] for drawings of up to
United
States
dollars
lllll/U.S.
$lllll and expiring with our close of
business on lllll [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 llllll.
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

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52.228–16

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 lllll [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,
llllllllllllllllllllllll
[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
llllllllllllllllllllllll
[City, State]
(Date)lllllll
[Name and address of financial institution]
Pay to the order of lllllllllllll
[Beneficiary Agency] lllll
the sum of United States $ lllllª lll
This draft is drawn under llllllllll
Irrevocable Letter of Credit No. llllll
llllllllllllllllllllllll
[Beneficiary Agency]
By: llllllllll

(End of clause)
[61 FR 31654, June 20, 1996, as amended at 61
FR 67430, Dec. 20, 1996; 62 FR 44808, Aug. 22,
1997; 64 FR 72451, Dec. 27, 1999]

52.228–15 Performance and Payment
Bonds—Construction.
As prescribed in 28.102–3(a), insert a
clause substantially as follows:

successful offeror shall furnish performance
and payment bonds to the Contracting Officer as follows:
(1) Performance bonds (Standard Form 25).
The penal amount of performance bonds at
the time of contract award shall be 100 percent of the original contract price.
(2) Payment Bonds (Standard Form 25–A).
The penal amount of payment bonds at the
time of contract award shall be 100 percent
of the original contract price.
(3) Additional bond protection. (i) The Government may require additional performance
and payment bond protection if the contract
price is increased. The increase in protection
generally will equal 100 percent of the increase in contract price.
(ii) The Government may secure the additional protection by directing the Contractor
to increase the penal amount of the existing
bond or to obtain an additional bond.
(c) Furnishing executed bonds. 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) Surety or other security for bonds. 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.
(e) Notice of subcontractor waiver of protection (40 U.S.C. 270b(c). Any waiver of the right
to sue on the payment bond is void unless it
is in writing, signed by the person whose
right is waived, and executed after such person has first furnished labor or material for
use in the performance of the contract.

PERFORMANCE AND PAYMENT BONDS—
CONSTRUCTION (JUL 2000)

(End of clause)

(a) Definitions. As used in this clause—
Original contract price means the award
price of the contract; or, for requirements
contracts, the price payable for the estimated total quantity; or, for indefinite-quantity contracts, the price payable for the
specified minimum quantity. Original contract price does not include the price of any
options, except those options exercised at
the time of contract award.
(b) Amount of required bonds. Unless the resulting contract price is $100,000 or less, the

[65 FR 46071, July 26, 2000]

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 (JUL 2000)
(a) Definitions. As used in this clause—

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52.229–1

48 CFR Ch. 1 (10–1–03 Edition)

Original contract price means the award
price of the contract or, for requirements
contracts, the price payable for the estimated quantity; or, for indefinite-quantity
contracts, the price payable for the specified
minimum quantity. Original contract price
does not include the price of any options, except those options exercised at the time of
contract award.
(b) The Contractor shall furnish a performance bond (Standard Form 1418) for the protection of the Government in an amount
equal to llll percent of the original contract price and a payment bond (Standard
Form 1416) in an amount equal to llll
percent of the original contract price.
(c) The Contractor shall furnish all executed bonds, including any necessary reinsurance agreements, to the Contracting Officer, within llll days, but in any event,
before starting work.
(d) The Government may require additional performance and payment bond protection if the contract price is increased. The
Government may secure the additional protection by directing the Contractor to increase the penal amount of the existing
bonds or to obtain additional bonds.
(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
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 (July 2000). As prescribed
in 28.103–4, substitute the following
paragraphs (b) and (d) for paragraphs
(b) and (d) of the basic clause:
(b) The Contractor shall furnish a performance bond (Standard Form 1418) for the protection to the Government in an amount
equal to ll percent of the original contract
price.
(d) The Government may require additional performance bond protection if the
contract price is increased. The Government
may secure the additional protection by directing the Contractor to increase the penal
amount of the existing bond or to obtain an
additional bond.
[61 FR 39214, July 26, 1996, as amended at 65
FR 46071, July 26, 2000]

52.229–1 State and Local Taxes.
As prescribed in 29.401–1, insert the
following clause:
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)
[48 FR 42478, Sept. 19, 1983, as amended at 68
FR 28086, May 22, 2003]

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

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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 ll
to ll [insert dates], lll [insert name of
Contractor or subcontractor] paid North Carolina State and local sales and use taxes aggregating $ll (State) and $ll (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 lll [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
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]

52.229–3 Federal, State, and Local
Taxes.
As prescribed in 29.401–3, insert the
following clause:

FEDERAL, STATE, AND LOCAL TAXES (APRIL
2003)
(a) As used in this clause—
After-imposed Federal tax 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 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.
All applicable Federal, State, and local taxes
and duties 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.
Contract date means the date set for bid
opening or, if this is a negotiated contract or
a modification, the effective date of this contract or modifiation.
Local taxes includes taxes imposed by a
possession or territory of the United States,
Puerto Rico, or the Northern Mariana Islands, if the contract is performed wholly or
partly in any of those areas.
(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.

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52.229–4

48 CFR Ch. 1 (10–1–03 Edition)

(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; 68 FR 13205,
Mar. 18, 2003]

52.229–4 Federal, State, and Local
Taxes (State and Local Adjustments).
As prescribed in 29.401–3, insert the
following clause:
FEDERAL, STATE, AND LOCAL TAXES (STATE
AND LOCAL ADJUSTMENTS) (APRIL 2003)
(a) As used in this clause—
After-imposed tax 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 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 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.
All applicable Federal, State, and local taxes
and duties 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.
Contract date means the effective date of
this contract and, for any modification to
this contract, the effective date of the modification.
Excepted tax 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. Ex-

cepted 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.
Local taxes includes taxes imposed by a
possession or territory of the United States,
Puerto Rico, or the Northern Mariana Islands, if the contract is performed wholly or
partly in any of those areas.
(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

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52.229–6

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; 68 FR 13205, Mar. 18,
2003]

52.229–5

[Reserved]

52.229–6 Taxes—Foreign
Fixed-Price
Contracts.
As prescribed in 29.402–1(a), insert the
following clause:
TAXES—FOREIGN FIXED-PRICE CONTRACTS
(JUNE 2003)
(a) To the extent that this contract provides for furnishing supplies or performing
services outside the United States and its
outlying areas, this clause applies in lieu of
any Federal, State, and local taxes clause of
the contract.
(b) Definitions. As used in this clause—
Contract date 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.
Country concerned means any country,
other than the United States and its outlying areas, in which expenditures under this
contract are made.
Tax and taxes 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 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 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 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 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.

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52.229–7

48 CFR Ch. 1 (10–1–03 Edition)

(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.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 55
FR 52799, Dec. 21, 1990; 68 FR 28087, May 22,
2003]

52.229–7 Taxes—Fixed-Price Contracts
With Foreign Governments.
As prescribed in 29.402–1(b), insert the
following clause:

(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]

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 ll [insert name of
the foreign government], or from which the
Contractor or any subcontractor under this
contract is exempt under the laws of ll
[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.

TAXES—FIXED-PRICE CONTRACTS WITH
FOREIGN GOVERNMENTS (JAN 1991)

(End of clause)

(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 ll [insert name of the foreign
government] have agreed shall not apply to
expenditures made by the United States in
ll [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 ll [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 ll [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 ll [insert
name of country], the contract price shall be
reduced accordingly.

[48 FR 42478, Sept. 19, 1983, as amended at 55
FR 3889, Feb. 5, 1990]

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 ll [insert name of
the foreign government], or from which any
subcontractor under this contract is exempt
under the laws of ll [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

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Federal Acquisition Regulation

52.230–1

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]

52.229–10 State of New Mexico Gross
Receipts and Compensating Tax.
As prescribed in 29.401–4(b), insert the
following clause:
STATE OF NEW MEXICO GROSS RECEIPTS AND
COMPENSATING TAX (APRIL 2003)
(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.
(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 (*ll) 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 (*ll) may receive information regarding the Contractor from the Revenue Division of the New Mexico Taxation and Revenue Department and, at the discretion of
the (*ll), 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
(*ll) 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 29.401–4(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, as amended at 68 FR 13205, Mar. 18,
2003]

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 (JUNE 2000)
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

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52.230–1

48 CFR Ch. 1 (10–1–03 Edition)

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
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:
b (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:
llllllllllllllllllllllll
Name and Address of Cognizant ACO or Federal Official Where Filed:
llllllllllllllllllllllll
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.
b (2) Certificate of Previously Submitted Disclosure Statement. The offeror hereby certifies
that the required Disclosure Statement was
filed as follows:
Date of Disclosure Statement:
llllllllllllllllllllllll
Name and Address of Cognizant ACO or Federal Official Where Filed:
llllllllllllllllllllllll

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.
b (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 $50 million or more 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.
b (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 CAScovered prime contract or subcontract of $50
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.
COST ACCOUNTING STANDARDS—ELIGIBILITY FOR MODIFIED CONTRACT COVERAGE

II.

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.
b 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 $50

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52.230–2

million in awards of CAS-covered prime contracts and subcontracts. 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 $50
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 $50 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
change in established cost accounting practices affecting existing contracts and subcontracts.
b Yes b 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:
b (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):
b (i) A Disclosure Statement Filing Due
Date of lllllllll has been established with the cognizant Federal agency.
(ii) The Disclosure Statement will be
submitted within the 6-month period ending
lllllll months after receipt of this
award.
Name and Address of Cognizant ACO or Federal Official Where Disclosure Statement
is to be Filed:
llllllllllllllllllllllll
[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; 65 FR 36030, June 6, 2000]

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.

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52.230–3

48 CFR Ch. 1 (10–1–03 Edition)

(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.
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]

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

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52.230–5

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
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]

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 in-

terest 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]

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

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52.230–6

48 CFR Ch. 1 (10–1–03 Edition)

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
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]

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

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52.230–6

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
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 impact proposals submitted for
any change in cost accounting practices proposed in accordance with subdivisions (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;
shall identify all contracts and subcontracts
containing the clauses at FAR 52.230–2, Cost
Accounting Standards, FAR 52.230–5, Cost
Accounting Standards—Educational Institution, and FAR 52.230–3, Disclosure and Consistency of Cost Accounting Practices.
(3) Cost impact proposals submitted for
failure to comply with an applicable CAS or
to follow a disclosed practice as contemplated by subparagraph (a)(5) of the
clauses at FAR 52.230–2, Cost Accounting
Standards, and FAR 52.230–5, Cost Accounting Standards—Educational Institution; or
by subparagraph (a)(4) of the clause at FAR
52.230–3, Disclosure and Consistency of Cost
Accounting Practices, shall identify the cost
impact on each separate CAS covered contract from the date of failure to comply until
the noncompliance is corrected.
(c) If the submissions required by paragraphs (a) and (b) of this clause are not submitted within the specified time, or any extension granted by the Contracting Officer,
an amount not to exceed 10 percent of each
subsequent amount determined payable related to the Contractor’s CAS-covered prime
contracts, up to the estimated general dollar
magnitude of the cost impact, may be withheld until such time as the required submission has been provided in the form and manner specified by the Contracting Officer.
(d) Agree to appropriate contract and subcontract amendments to reflect adjustments
established in accordance with subparagraphs (a)(4) and (a)(5) of the clauses at FAR
52.230–2 and 52.230–5; or with subparagraphs
(a)(3) or (a)(4) of the Disclosure and Consistency of Cost Accounting Practices clause at
FAR 52.230–3.
(e) For all subcontracts subject to the
clauses at FAR 52.230–2, 52.230–3, or 52.230–5—

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48 CFR Ch. 1 (10–1–03 Edition)

(1) So state in the body of the subcontract,
in the letter of award, or in both (self-deleting clauses shall not be used); and
(2) Include the substance of this clause in
all negotiated subcontracts. In addition,
within 30 days after award of the subcontract, submit the following information
to the Contractor’s cognizant contract administration office for transmittal to the
contract administrative office cognizant of
the subcontractor’s facility:
(i) Subcontractor’s name and subcontract
number.
(ii) Dollar amount and date of award.
(iii) Name of Contractor making the
award.
(iv) Any changes the subcontractor has
made or proposes to make to cost accounting
practices that affect prime contracts or subcontracts containing the clauses at FAR
52.230–2, 52.230–3, or 52.230–5, unless these
changes have already been reported. If award
of the subcontract results in making one or
more CAS effective for the first time, this
fact shall also be reported.
(f) Notify the Contracting Officer in writing of any adjustments required to subcontracts under this contract and agree to
an adjustment, based on them, to this contract price or estimated cost and fee. This
notice is due within 30 days after proposed
subcontract adjustments are received and
shall include a proposal for adjusting the
higher tier subcontract or the prime contract appropriately.
(g) For subcontracts containing the clauses
at FAR 52.230–2 or 52.230–5, require the subcontractor to comply with all Standards in
effect on the date of award or of final agreement on price, as shown on the subcontractor’s signed Certificate of Current Cost or
Pricing Data, whichever is earlier.

(End of clause)
[57 FR 39593, Aug. 31, 1992; 57 FR 43495, Sept.
21, 1992, as amended at 59 FR 67044, Dec. 28,
1994. Redesignated and amended at 61 FR
18919, 18920, Apr. 29, 1996]

52.231

[Reserved]

52.232–1

Payments.

As prescribed in 32.111(a)(1), insert
the following clause, appropriately
modified with respect to payment due
date in accordance with agency regulations, in solicitations and contracts
when a fixed-price supply contract, a
fixed-price service contract, or a contract for nonregulated communication
services is contemplated:

PAYMENTS (APR 1984)
The Government shall pay the Contractor,
upon the submission of proper invoices or
vouchers, the prices stipulated in this contract for supplies delivered and accepted or
services rendered and accepted, less any deductions provided in this contract. Unless
otherwise specified in this contract, payment
shall be made on partial deliveries accepted
by the Government if—
(a) The amount due on the deliveries warrants it; or
(b) The Contractor requests it and the
amount due on the deliveries is at least
$1,000 or 50 percent of the total contract
price.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 56
FR 41744, Aug. 22, 1991]

52.232–2 Payments Under Fixed-Price
Research and Development Contracts.
As prescribed in 32.111(a)(2), insert
the following clause, as appropriately
modified with respect to payment due
dates in accordance with agency regulations, in solicitations and contracts
when a fixed-price research and development contract is contemplated:
PAYMENTS UNDER FIXED-PRICE RESEARCH AND
DEVELOPMENT CONTRACTS (APR 1984)
The Government shall pay the Contractor,
upon submission of proper invoices or vouchers, the prices stipulated in this contract for
work delivered or rendered and accepted, less
any deductions provided in this contract.
Unless otherwise specified, payment shall be
made upon acceptance of any portion of the
work delivered or rendered for which a price
is separately stated in the contract.

(End of clause)
52.232–3 Payments Under Personal
Services Contracts.
As prescribed in 32.111(a)(3), insert
the following clause, appropriately
modified with respect to payment due
dates in accordance with agency regulations, in solicitations and contracts
for personal services:
PAYMENTS UNDER PERSONAL SERVICES
CONTRACTS (APR 1984)
The Government shall pay the Contractor
for the services performed by the Contractor,
as set forth in the Schedule of this contract,
at the rates prescribed, upon the submission
by the Contractor of proper invoices or time

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52.232–5

statements to the office or officer designated
and at the time provided for in this contract.
The Government shall also pay the Contractor (a) a per diem rate in lieu of subsistence for each day the Contractor is in a travel status away from home or regular place of
employment in accordance with Federal
Travel Regulations (41 CFR 101–7) as authorized in appropriate Travel Orders; and (b)
any other transportation expenses if provided for in the Schedule.

(End of clause)
52.232–4 Payments Under Transportation Contracts and Transportation-Related Services Contracts.
As prescribed in 32.111(a)(4), insert
the following clause, appropriately
modified with respect to payment due
dates in accordance with agency regulations, in solicitations and contracts
for transportation or transportationrelated services:
PAYMENTS

UNDER TRANSPORTATION CONTRACTS
AND
TRANSPORTATION-RELATED
SERVICES CONTRACTS (APR 1984)

The Government shall pay the Contractor
upon the submission of properly certified invoices or vouchers, the amount due for services rendered and accepted, less deductions,
if any, as herein provided.

(End of clause)
52.232–5 Payments Under Fixed-Price
Construction Contracts.
As prescribed in 32.111(a)(5), insert
the following clause:
PAYMENTS UNDER FIXED-PRICE CONSTRUCTION
CONTRACTS (SEP 2002)
(a) Payment of price. The Government shall
pay the Contractor the contract price as provided in this contract.
(b) Progress payments. The Government
shall make progress payments monthly as
the work proceeds, or at more frequent intervals as determined by the Contracting Officer, on estimates of work accomplished
which meets the standards of quality established under the contract, as approved by the
Contracting Officer.
(1) The Contractor’s request for progress
payments shall include the following substantiation:
(i) An itemization of the amounts requested, related to the various elements of
work required by the contract covered by the
payment requested.
(ii) A listing of the amount included for
work performed by each subcontractor under
the contract.

(iii) A listing of the total amount of each
subcontract under the contract.
(iv) A listing of the amounts previously
paid to each such subcontractor under the
contract.
(v) Additional supporting data in a form
and detail required by the Contracting Officer.
(2) In the preparation of estimates, the
Contracting Officer may authorize material
delivered on the site and preparatory work
done to be taken into consideration. Material delivered to the Contractor at locations
other than the site also may be taken into
consideration if—
(i) Consideration is specifically authorized
by this contract; and
(ii) The Contractor furnishes satisfactory
evidence that it has acquired title to such
material and that the material will be used
to perform this contract.
(c) Contractor certification. Along with each
request for progress payments, the Contractor shall furnish the following certification, or payment shall not be made: (However, if the Contractor elects to delete paragraph (c)(4) from the certification, the certification is still acceptable.)
I hereby certify, to the best of my knowledge and belief, that—
(1) The amounts requested are only for performance in accordance with the specifications, terms, and conditions of the contract;
(2) All payments due to subcontractors and
suppliers from previous payments received
under the contract have been made, and
timely payments will be made from the proceeds of the payment covered by this certification, in accordance with subcontract
agreements and the requirements of chapter
39 of Title 31, United States Code;
(3) This request for progress payments does
not include any amounts which the prime
contractor intends to withhold or retain
from a subcontractor or supplier in accordance with the terms and conditions of the
subcontract; and
(4) This certification is not to be construed
as final acceptance of a subcontractor’s performance.
llllllllllllllllllllllll
(Name)
llllllllllllllllllllllll
(Title)
llllllllllllllllllllllll
(Date)
(d) Refund of unearned amounts. If the Contractor, after making a certified request for
progress payments, discovers that a portion
or all of such request constitutes a payment
for performance by the Contractor that fails
to conform to the specifications, terms, and
conditions of this contract (hereinafter referred to as the unearned amount), the Contractor shall—

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52.232–6

48 CFR Ch. 1 (10–1–03 Edition)

(1) Notify the Contracting Officer of such
performance deficiency; and
(2) Be obligated to pay the Government an
amount (computed by the Contracting Officer in the manner provided in paragraph (j)
of this clause) equal to interest on the unearned amount from the 8th day after the
date of receipt of the unearned amount
until—
(i) The date the Contractor notifies the
Contracting Officer that the performance deficiency has been corrected; or
(ii) The date the Contractor reduces the
amount of any subsequent certified request
for progress payments by an amount equal to
the unearned amount.
(e) Retainage. If the Contracting Officer
finds that satisfactory progress was achieved
during any period for which a progress payment is to be made, the Contracting Officer
shall authorize payment to be made in full.
However, if satisfactory progress has not
been made, the Contracting Officer may retain a maximum of 10 percent of the amount
of the payment until satisfactory progress is
achieved. When the work is substantially
complete, the Contracting Officer may retain from previously withheld funds and future progress payments that amount the
Contracting Officer considers adequate for
protection of the Government and shall release to the Contractor all the remaining
withheld funds. Also, on completion and acceptance of each separate building, public
work, or other division of the contract, for
which the price is stated separately in the
contract, payment shall be made for the
completed work without retention of a percentage.
(f) Title, liability, and reservation of rights.
All material and work covered by progress
payments made shall, at the time of payment, become the sole property of the Government, but this shall not be construed as—
(1) Relieving the Contractor from the sole
responsibility for all material and work upon
which payments have been made or the restoration of any damaged work; or
(2) Waiving the right of the Government to
require the fulfillment of all of the terms of
the contract.
(g) Reimbursement for bond premiums. In
making these progress payments, the Government shall, upon request, reimburse the
Contractor for the amount of premiums paid
for performance and payment bonds (including coinsurance and reinsurance agreements,
when applicable) after the Contractor has
furnished evidence of full payment to the
surety. The retainage provisions in paragraph (e) above shall not apply to that portion of progress payments attributable to
bond premiums.
(h) Final payment. The Government shall
pay the amount due the Contractor under
this contract after—
(1) Completion and acceptance of all work;

(2) Presentation of a properly executed
voucher; and
(3) Presentation of release of all claims
against the Government arising by virtue of
this contract, other than claims, in stated
amounts, that the Contractor has specifically excepted from the operation of the release. A release may also be required of the
assignee if the Contractor’s claim to
amounts payable under this contract has
been assigned under the Assignment of
Claims Act of 1940 (31 U.S.C. 3727 and 41
U.S.C. 15).
(i) Limitation because of undefinitized work.
Notwithstanding any provision of this contract, progress payments shall not exceed 80
percent
on
work
accomplished
on
undefinitized contract actions. A contract action is any action resulting in a contract, as
defined in FAR subpart 2.1, including contract modifications for additional supplies or
services, but not including contract modifications that are within the scope and under
the terms of the contract, such as contract
modifications issued pursuant to the
Changes clause, or funding and other administrative changes.
(j) Interest computation on unearned
amounts. In accordance with 31 U.S.C.
3903(c)(1), the amount payable under subparagraph (d)(2) of this clause shall be—
(1) Computed at the rate of average bond
equivalent rates of 91-day Treasury bills auctioned at the most recent auction of such
bills prior to the date the Contractor receives the unearned amount; and
(2) Deducted from the next available payment to the Contractor.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 26904, June 28, 1985; 51 FR 2666, Jan. 17,
1986; 51 FR 19717, May 30, 1986; 52 FR 30078,
Aug. 12, 1987; 54 FR 13337, Mar. 31, 1989; 62 FR
12711, Mar. 17, 1997; 67 FR 56126, Aug. 30, 2002]

52.232–6 Payment Under Communication Service Contracts With Common Carriers.
As prescribed in 32.111(a)(6), insert
the following clause, appropriately
modified with respect to payment due
dates in accordance with agency regulations, in solicitations and contracts
for regulated communication services
by common carriers:
PAYMENT UNDER COMMUNICATION SERVICE
CONTRACTS WITH COMMON CARRIERS (APR
1984)
The Government shall pay the Contractor,
in arrears, upon submission of invoices for
services and facilities furnished in accordance with the terms of CSAs issued under

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Federal Acquisition Regulation

52.232–7

this contract, the rates and charges for the
services and facilities as set forth in the
clause entitled Rates, Charges and Services.

(End of clause)
52.232–7 Payments Under Time-andMaterials and Labor-Hour Contracts.
As prescribed in 32.111(b), insert the
following clause:
PAYMENTS UNDER TIME-AND-MATERIALS AND
LABOR-HOUR CONTRACTS (DEC 2002)
The Government will pay the Contractor
as follows upon the submission of invoices or
vouchers approved by the Contracting Officer:
(a) Hourly rate. (1) The amounts shall be
computed by multiplying the appropriate
hourly rates prescribed in the Schedule by
the number of direct labor hours performed.
The rates shall include wages, indirect costs,
general and administrative expense, and
profit. Fractional parts of an hour shall be
payable on a prorated basis. Vouchers may
be submitted once each month (or at more
frequent intervals, if approved by the Contracting Officer), to the Contracting Officer
or designee. The Contractor shall substantiate vouchers by evidence of actual payment and by individual daily job timecards,
or other substantiation approved by the Contracting Officer. Promptly after receipt of
each substantiated voucher, the Government
shall, except as otherwise provided in this
contract, and subject to the terms of (e)
below, pay the voucher as approved by the
Contracting Officer.
(2) Unless otherwise prescribed in the
Schedule, the Contracting Officer shall withhold 5 percent of the amounts due under this
paragraph (a), but the total amount withheld
shall not exceed $50,000. The amounts withheld shall be retained until the execution
and delivery of a release by the Contractor
as provided in paragraph (f) below.
(3) Unless the Schedule prescribes otherwise, the hourly rates in the Schedule shall
not be varied by virtue of the Contractor
having performed work on an overtime basis.
If no overtime rates are provided in the
Schedule and overtime work is approved in
advance by the Contracting Officer, overtime
rates shall be negotiated. Failure to agree
upon these overtime rates shall be treated as
a dispute under the Disputes clause of this
contract. If the Schedule provides rates for
overtime, the premium portion of those rates
will be reimbursable only to the extent the
overtime is approved by the Contracting Officer.
(b) Materials and subcontracts. (1) The Contracting Officer will determine allowable
costs of direct materials in accordance with
Subpart 31.2 of the Federal Acquisition Reg-

ulation (FAR) in effect on the date of this
contract. Direct materials, as used in this
clause, are those materials that enter directly into the end product, or that are used
or consumed directly in connection with the
furnishing of the end product.
(2) The Contractor may include reasonable
and allocable material handling costs in the
charge for material to the extent they are
clearly excluded from the hourly rate. Material handling costs are comprised of indirect
costs, including, when appropriate, general
and administrative expense allocated to direct materials in accordance with the Contractor’s usual accounting practices consistent with Subpart 31.2 of the FAR.
(3) The Government will reimburse the
Contractor for supplies and services purchased directly for the contract when the
Contractor—
(i) Has made payments of cash, checks, or
other forms of payment for these purchased
supplies or services; or
(ii) Will make these payments determined
due—
(A) In accordance with the terms and conditions of a subcontract or invoice; and
(B) Ordinarily within 30 days of the submission of the Contractor’s payment request
to the Government.
(4)(i) The Government will reimburse the
Contractor for costs of subcontracts that are
authorized under the subcontracts clause of
this contract, provided that the costs are
consistent with paragraph (b)(5) of this
clause.
(ii) The Government will limit reimbursable costs in connection with subcontracts
to the amounts paid for supplies and services
purchased directly for the contract when the
Contractor has made or will make payments
determined due of cash, checks, or other
forms of payment to the subcontractor—
(A) In accordance with the terms and conditions of a subcontract or invoice; and
(B) Ordinarily within 30 days of the submission of the Contractor’s payment request
to the Government.
(iii) The Government will not reimburse
the Contractor for any costs arising from the
letting, administration, or supervision of
performance of the subcontract, if the costs
are included in the hourly rates payable
under paragraph (a)(1) of this clause.
(5) To the extent able, the Contractor
shall—
(i) Obtain materials at the most advantageous prices available with due regard to
securing prompt delivery of satisfactory materials; and
(ii) Take all cash and trade discounts, rebates, allowances, credits, salvage, commissions, and other benefits. When unable to
take advantage of the benefits, the Contractor shall promptly notify the Contracting Officer and give the reasons. The

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52.232–7

48 CFR Ch. 1 (10–1–03 Edition)

Contractor shall give credit to the Government for cash and trade discounts, rebates,
scrap, commissions, and other amounts that
have accrued to the benefit of the Contractor, or would have accrued except for the
fault or neglect of the Contractor. The Contractor shall not deduct from gross costs the
benefits lost without fault or neglect on the
part of the Contractor, or lost through fault
of the Government.
(c) Total cost. It is estimated that the total
cost to the Government for the performance
of this contract shall not exceed the ceiling
price set forth in the Schedule and the Contractor agrees to use its best efforts to perform the work specified in the Schedule and
all obligations under this contract within
such ceiling price. If at any time the Contractor has reason to believe that the hourly
rate payments and material costs that will
accrue in performing this contract in the
next succeeding 30 days, if added to all other
payments and costs previously accrued, will
exceed 85 percent of the ceiling price in the
Schedule, the Contractor shall notify the
Contracting Officer giving a revised estimate
of the total price to the Government for performing this contract with supporting reasons and documentation. If at any time during performing this contract, the Contractor
has reason to believe that the total price to
the Government for performing this contract
will be substantially greater or less than the
then stated ceiling price, the Contractor
shall so notify the Contracting Officer, giving a revised estimate of the total price for
performing this contract, with supporting
reasons and documentation. If at any time
during performing this contract, the Government has reason to believe that the work to
be required in performing this contract will
be substantially greater or less than the
stated ceiling price, the Contracting Officer
will so advise the Contractor, giving the
then revised estimate of the total amount of
effort to be required under the contract.
(d) Ceiling price. The Government shall not
be obligated to pay the Contractor any
amount in excess of the ceiling price in the
Schedule, and the Contractor shall not be obligated to continue performance if to do so
would exceed the ceiling price set forth in
the Schedule, unless and until the Contracting Officer shall have notified the Contractor in writing that the ceiling price has
been increased and shall have specified in
the notice a revised ceiling that shall constitute the ceiling price for performance
under this contract. When and to the extent
that the ceiling price set forth in the Schedule has been increased, any hours expended
and material costs incurred by the Contractor in excess of the ceiling price before
the increase shall be allowable to the same
extent as if the hours expended and material
costs had been incurred after the increase in
the ceiling price.

(e) Audit. At any time before final payment
under this contract the Contracting Officer
may request audit of the invoices or vouchers and substantiating material. Each payment previously made shall be subject to reduction to the extent of amounts, on preceding invoices or vouchers, that are found
by the Contracting Officer not to have been
properly payable and shall also be subject to
reduction for overpayments or to increase
for underpayments. Upon receipt and approval of the voucher or invoice designated
by the Contractor as the completion voucher
or completion invoice and substantiating material, and upon compliance by the Contractor with all terms of this contract (including, without limitation, terms relating
to patents and the terms of (f) and (g) below),
the Government shall promptly pay any balance due the Contractor. The completion invoice or voucher, and substantiating material, shall be submitted by the Contractor as
promptly as practicable following completion of the work under this contract, but in
no event later than 1 year (or such longer period as the Contracting Officer may approve
in writing) from the date of completion.
(f) Assignment. The Contractor, and each
assignee under an assignment entered into
under this contract and in effect at the time
of final payment under this contract, shall
execute and deliver, at the time of and as a
condition precedent to final payment under
this contract, a release discharging the Government, its officers, agents, and employees
of and from all liabilities, obligations, and
claims arising out of or under this contract,
subject only to the following exceptions:
(1) Specified claims in stated amounts, or
in estimated amounts if the amounts are not
susceptible of exact statement by the Contractor.
(2) Claims, together with reasonable incidental expenses, based upon the liabilities of
the Contractor to third parties arising out of
performing this contract, that are not
known to the Contractor on the date of the
execution of the release, and of which the
Contractor gives notice in writing to the
Contracting Officer not more than 6 years
after the date of the release or the date of
any notice to the Contractor that the Government is prepared to make final payment,
whichever is earlier.
(3) Claims for reimbursement of costs
(other than expenses of the Contractor by
reason of its indemnification of the Government against patent liability), including reasonable incidental expenses, incurred by the
Contractor under the terms of this contract
relating to patents.
(g) Refunds. The Contractor agrees that
any refunds, rebates, or credits (including
any related interest) accruing to or received
by the Contractor or any assignee, that arise
under the materials portion of this contract

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Federal Acquisition Regulation

52.232–9

and for which the Contractor has received reimbursement, shall be paid by the Contractor to the Government. The Contractor
and each assignee, under an assignment entered into under this contract and in effect
at the time of final payment under this contract, shall execute and deliver, at the time
of and as a condition precedent to final payment under this contract, an assignment to
the Government of such refunds, rebates, or
credits (including any interest) in form and
substance satisfactory to the Contracting Officer.
(h) Interim payments. (1) Interim payments
made prior to the final payment under the
contract are contract financing payments.
Contract financing payments are not subject
to the interest penalty provisions of the
Prompt Payment Act.
(2) The designated payment office will
make interim payments for contract financing on the llll[Contracting Officer insert
day as prescribed by agency head; if not prescribed, insert ‘‘30th’’] day after the designated billing office receives a proper payment request. In the event that the Government requires an audit or other review of a
specific payment request to ensure compliance with the terms and conditions of the
contract, the designated payment office is
not compelled to make payment by the specified due date.

(End of clause)
Alternate I (Mar 2000). If the nature of
the work to be performed requires the
Contractor to furnish material that the
Contractor regularly sells to the general public in the normal course of
business, and the price is under the
limitations prescribed in 16.601(b)(3),
add the following paragraph (6) to paragraph (b) of the basic clause:
(b)(6) If the nature of the work to be performed requires the Contractor to furnish
material that the Contractor regularly sells
to the general public in the normal course of
business, the price to be paid for such material, notwithstanding the other requirements
of this paragraph (b), shall be on the basis of
an established catalog or list price, in effect
when the material is furnished, less all applicable discounts to the Government, provided
that in no event shall such price be in excess
of the Contractor’s sales price to its most favored customer for the same item in like
quantity, or the current market price,
whichever is lower.

Alternate II (Feb 2002). If a labor-hour
contract is contemplated, and if no specific reimbursement for materials furnished is intended, the Contracting Of-

ficer may add the following paragraph
(i) to the basic clause:
(i) The terms of this clause that govern reimbursement for materials furnished are
considered to have been deleted.
[48 FR 42478, Sept. 19, 1983, as amended at 51
FR 2667, Jan. 17, 1986; 61 FR 67419, Dec. 20,
1996; 65 FR 16283, Mar. 27, 2000; 66 FR 65361,
Dec. 18, 2001; 67 FR 70521, Nov. 22, 2002]

52.232–8 Discounts for Prompt Payment.
As prescribed in 32.111(c)(1), insert
the following clause:
DISCOUNTS FOR PROMPT PAYMENT (FEB 2002)
(a) Discounts for prompt payment will not
be considered in the evaluation of offers.
However, any offered discount will form a
part of the award, and will be taken if payment is made within the discount period indicated in the offer by the offeror. As an alternative to offering a discount for prompt
payment in conjunction with the offer,
offerors awarded contracts may include discounts for prompt payment on individual invoices.
(b) In connection with any discount offered
for prompt payment, time shall be computed
from the date of the invoice. If the Contractor has not placed a date on the invoice,
the due date shall be calculated from the
date the designated billing office receives a
proper invoice, provided the agency annotates such invoice with the date of receipt at
the time of receipt. For the purpose of computing the discount earned, payment shall be
considered to have been made on the date
that appears on the payment check or, for an
electronic funds transfer, the specified payment date. When the discount date falls on a
Saturday, Sunday, or legal holiday when
Federal Government offices are closed and
Government business is not expected to be
conducted, payment may be made on the following business day.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 26904, June 28, 1985; 54 FR 13337, Mar. 31,
1989; 62 FR 12712, Mar. 17, 1997; 66 FR 65361,
Dec. 18, 2001]

52.232–9 Limitation on Withholding of
Payments.
As prescribed in 32.111(c)(2), insert a
clause substantially as follows, appropriately modified with respect to payment due dates in accordance with
agency regulations, in solicitations and

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52.232–10

48 CFR Ch. 1 (10–1–03 Edition)

contracts when a supply contract, service contract, time-and-materials contract, labor-hour contract, or research
and development contract is contemplated that includes two or more
terms authorizing the temporary withholding of amounts otherwise payable
to the contractor for supplies delivered
or services performed:
LIMITATION ON WITHHOLDING OF PAYMENTS
(APR 1984)
If more than one clause or Schedule term
of this contract authorizes the temporary
withholding of amounts otherwise payable to
the Contractor for supplies delivered or services performed, the total of the amounts
withheld at any one time shall not exceed
the greatest amount that may be withheld
under any one clause or Schedule term at
that time; provided, that this limitation
shall not apply to—
(a) Withholdings pursuant to any clause relating to wages or hours of employees;
(b) Withholdings not specifically provided
for by this contract;
(c) The recovery of overpayments; and
(d) Any other withholding for which the
Contracting Officer determines that this
limitation is inappropriate.

(End of clause)
52.232–10 Payments Under Fixed-Price
Architect-Engineer Contracts.
As prescribed in 32.111(d)(1), insert
the following clause:
PAYMENTS UNDER FIXED-PRICE ARCHITECTENGINEER CONTRACTS (AUG 1987)
(a) Estimates shall be made monthly of the
amount and value of the work accomplished
and services performed by the Contractor
under this contract which meet standards of
quality established under this contract. The
estimates shall be prepared by the Contractor and accompanied by any supporting
data required by the Contracting Officer.
(b) Upon approval of the estimate by the
Contracting Officer, payment upon properly
executed vouchers shall be made to the Contractor, as soon as practicable, of 90 percent
of the approved amount, less all previous
payments; provided, that payment may be
made in full during any months in which the
Contracting Officer determines that performance has been satisfactory. Also, whenever the Contracting Officer determines that
the work is substantially complete and that
the amount retained is in excess of the
amount adequate for the protection of the
Government, the Contracting Officer may release the excess amount to the Contractor.
(c) Upon satisfactory completion by the
Contractor and acceptance by the Con-

tracting Officer of the work done by the Contractor under the Statement of Architect-Engineer Services, the Contractor will be paid the
unpaid balance of any money due for work
under the statement, including retained percentages relating to this portion of the work.
Upon satisfactory completion and final acceptance of the construction work, the Contractor shall be paid any unpaid balance of
money due under this contract.
(d) Before final payment under the contract, or before settlement upon termination
of the contract, and as a condition precedent
thereto, the Contractor shall execute and deliver to the Contracting Officer a release of
all claims against the Government arising
under or by virtue of this contract, other
than any claims that are specifically excepted by the Contractor from the operation
of the release in amounts stated in the release.
(e) Notwithstanding any other provision in
this contract, and specifically paragraph (b)
of this clause, progress payments shall not
exceed 80 percent on work accomplished on
undefinitized contract actions. A contract action is any action resulting in a contract, as
defined in FAR subpart 2.1, including contract modifications for additional supplies or
services, but not including contract modifications that are within the scope and under
the terms of the contract, such as contract
modifications issued pursuant to the
Changes clause, or funding and other administrative changes.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 26904, June 28, 1985; 52 FR 30078, Aug. 12,
1987; 55 FR 38518, Sept. 18, 1990]

52.232–11 Extras.
As prescribed in 32.111(d)(2), insert
the following clause, appropriately
modified with respect to payment due
dates in accordance with agency regulations, in solicitations and contracts
when a fixed-price supply contract,
fixed-price service contract, or transportation contract is contemplated:
EXTRAS (APR 1984)
Except as otherwise provided in this contract, no payment for extras shall be made
unless such extras and the price therefor
have been authorized in writing by the Contracting Officer.

(End of clause)
52.232–12 Advance Payments.
As prescribed in 32.412(a), insert the
following clause:

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52.232–12

ADVANCE PAYMENTS (MAY 2001)
(a) Requirements for payment. Advance payments will be made under this contract (1)
upon submission of properly certified invoices or vouchers by the Contractor, and
approval by the administering office, lll
[Insert the name of the office designated under
agency procedures], or (2) under a letter of
credit. The amount of the invoice or voucher
submitted plus all advance payments previously approved shall not exceed $ll If a
letter of credit is used, the Contractor shall
withdraw cash only when needed for disbursements acceptable under this contract
and report cash disbursements and balances
as required by the administering office. The
Contractor shall apply terms similar to this
clause to any advance payments to subcontractors.
(b) Special account. Until (1) the Contractor
has liquidated all advance payments made
under the contract and related interest
charges and (2) the administering office has
approved in writing the release of any funds
due and payable to the Contractor, all advance payments and other payments under
this contract shall be made by check payable
to the Contractor marked for deposit only in
the Contractor’s special account with the
llll [insert the name of the financial institution]. None of the funds in the special account shall be mingled with other funds of
the Contractor. Withdrawals from the special account may be made only by check of
the Contractor countersigned by the Contracting
Officer
or
a
Government
countersigning agent designated in writing
by the Contracting Officer.
(c) Use of funds. The Contractor may withdraw funds from the special account only to
pay for properly allocable, allowable, and
reasonable costs for direct materials, direct
labor, and indirect costs. Other withdrawals
require approval in writing by the administering office. Determinations of whether
costs are properly allocable, allowable, and
reasonable shall be in accordance with generally accepted accounting principles, subject to any applicable subparts of part 31 of
the Federal Acquisition Regulation.
(d) Repayment to the Government. At any
time, the Contractor may repay all or any
part of the funds advanced by the Government. Whenever requested in writing to do
so by the administering office, the Contractor shall repay to the Government any
part of unliquidated advance payments considered by the administering office to exceed
the Contractor’s current requirements or the
amount specified in paragraph (a) above. If
the Contractor fails to repay the amount requested by the administering office, all or
any part of the unliquidated advance payments may be withdrawn from the special
account by check signed by only the
countersigning agent and applied to reduc-

tion of the unliquidated advance payments
under this contract.
(e) Maximum payment. When the sum of all
unliquidated advance payments, unpaid interest charges, and other payments exceed l
percent of the contract price, the Government shall withhold further payments to the
Contractor. On completion or termination of
the contract, the Government shall deduct
from the amount due to the Contractor all
unliquidated advance payments and all interest charges payable. If previous payments
to the Contractor exceed the amount due,
the excess amount shall be paid to the Government on demand. For purposes of this
paragraph, the contract price shall be considered to be the stated contract price of
$ll, less any subsequent price reductions
under the contract, plus (1) any price increases resulting from any terms of this contract for price redetermination or escalation, and (2) any other price increases that
do not, in the aggregate, exceed $ll [Insert
an amount not higher than 10 percent of the
stated contract amount inserted in this paragraph]. Any payments withheld under this
paragraph shall be applied to reduce the unliquidated advance payments. If full liquidation has been made, payments under the contract shall resume.
(f) Interest. (1) The Contractor shall pay interest to the Government on the daily unliquidated advance payments at the daily rate
specified in subparagraph (f)(3) below. Interest shall be computed at the end of each calendar month for the actual number of days
involved. For the purpose of computing the
interest charge—
(i) Advance payments shall be considered
as increasing the unliquidated balance as of
the date of the advance payment check;
(ii) Repayments by Contractor check shall
be considered as decreasing the unliquidated
balance as of the date on which the check is
received by the Government authority designated by the Contracting Officer; and
(iii) Liquidations by deductions from Government payments to the Contractor shall be
considered as decreasing the unliquidated
balance as of the date of the check for the reduced payment.
(2) Interest charges resulting from the
monthly computation shall be deducted from
payments, other than advance payments, due
the Contractor. If the accrued interest exceeds the payment due, any excess interest
shall be carried forward and deducted from
subsequent payments. Interest carried forward shall not be compounded. Interest on
advance payments shall cease to accrue upon
satisfactory completion or termination of
the contract for the convenience of the Government. The Contractor shall charge interest on advance payments to subcontractors
in the manner described above and credit the
interest to the Government. Interest need

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not be charged on advance payments to nonprofit educational or research subcontractors for experimental, developmental, or research work.
(3) If interest is required under the contract, the Contracting Officer shall determine a daily interest rate based on the higher of (i) the published prime rate of the financial institution (depository) in which the
special account is established or (ii) the rate
established by the Secretary of the Treasury
under Pub. L. 92–41 (50 U.S.C. App. 1215(b)(2)).
The Contracting Officer shall revise the
daily interest rate during the contract period in keeping with any changes in the cited
interest rates.
(4) If the full amount of interest charged
under this paragraph has not been paid by
deduction or otherwise upon completion or
termination of this contract, the Contractor
shall pay the remaining interest to the Government on demand.
(g) Financial institution agreement. Before
an advance payment is made under this contract, the Contractor shall transmit to the
administering office, in the form prescribed
by the administering office, an agreement in
triplicate from the financial institution in
which the special account is established,
clearly setting forth the special character of
the account and the responsibilities of the financial institution under the account. The
Contractor shall select a financial institution that is a member bank of the Federal
Reserve System, an ‘‘insured’’ bank within
the meaning of the Federal Deposit Insurance Corporation Act (12 U.S.C. 1811), or a
credit union insured by the National Credit
Union Administration.
(h) Lien on Special Bank Account. The Government shall have a lien upon any balance
in the special account paramount to all
other liens. The Government lien shall secure the repayment of any advance payments made under this contract and any related interest charges.
(i) Lien on property under contract. (1) All
advance payments under this contract, together with interest charges, shall be secured, when made, by a lien in favor of the
Government, paramount to all other liens,
on the supplies or other things covered by
this contract and on all material and other
property acquired for or allocated to the performance of this contract, except to the extent that the Government by virtue of any
other terms of this contract, or otherwise,
shall have valid title to the supplies, materials, or other property as against other
creditors of the Contractor.
(2) The Contractor shall identify, by marking or segregation, all property that is subject to a lien in favor of the Government by
virtue of any terms of this contract in such
a way as to indicate that it is subject to a
lien and that it has been acquired for or allocated to performing this contract. If, for any

reason, the supplies, materials, or other
property are not identified by marking or
segregation, the Government shall be considered to have a lien to the extent of the Government’s interest under this contract on
any mass of property with which the supplies, materials, or other property are commingled. The Contractor shall maintain adequate accounting control over the property
on its books and records.
(3) If, at any time during the progress of
the work on the contract, it becomes necessary to deliver to a third person any items
or materials on which the Government has a
lien, the Contractor shall notify the third
person of the lien and shall obtain from the
third person a receipt in duplicate acknowledging the existence of the lien. The Contractor shall provide a copy of each receipt
to the Contracting Officer.
(4) If, under the termination clause, the
Contracting Officer authorizes the Contractor to sell or retain termination inventory, the approval shall constitute a release
of the Government’s lien to the extent that—
(i) The termination inventory is sold or retained; and
(ii) The sale proceeds or retention credits
are applied to reduce any outstanding advance payments.
(j) Insurance. (1) The Contractor shall
maintain with responsible insurance carriers—
(i) Insurance on plant and equipment
against fire and other hazards, to the extent
that similar properties are usually insured
by others operating plants and properties of
similar character in the same general locality;
(ii) Adequate insurance against liability on
account of damage to persons or property;
and
(iii) Adequate insurance under all applicable workers’ compensation laws.
(2) Until work under this contract has been
completed and all advance payments made
under the contract have been liquidated, the
Contractor shall—
(i) Maintain this insurance;
(ii) Maintain adequate insurance on any
materials, parts, assemblies, subassemblies,
supplies, equipment, and other property acquired for or allocable to this contract and
subject to the Government lien under paragraph (i) of this clause; and
(iii) Furnish any evidence with respect to
its insurance that the administering office
may require.
(k) Default. (1) If any of the following
events occurs, the Government may, by written notice to the Contractor, withhold further withdrawals from the special account
and further payments on this contract:
(i) Termination of this contract for a fault
of the Contractor.
(ii) A finding by the administering office
that the Contractor has failed to—

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(A) Observe any of the conditions of the advance payment terms;
(B) Comply with any material term of this
contract;
(C) Make progress or maintain a financial
condition adequate for performance of this
contract;
(D) Limit inventory allocated to this contract to reasonable requirements; or
(E) Avoid delinquency in payment of taxes
or of the costs of performing this contract in
the ordinary course of business.
(iii) The appointment of a trustee, receiver, or liquidator for all or a substantial
part of the Contractor’s property, or the institution of proceedings by or against the
Contractor for bankruptcy, reorganization,
arrangement, or liquidation.
(iv) The service of any writ of attachment,
levy of execution, or commencement of garnishment proceedings concerning the special
account.
(v) The commission of an act of bankruptcy.
(2) If any of the events described in subparagraph (1) above continue for 30 days
after the written notice to the Contractor,
the Government may take any of the following additional actions:
(i) Withdraw by checks payable to the
Treasurer of the United States, signed only
by the countersigning agency, all or any part
of the balance in the special account and
apply the amounts to reduce outstanding advance payments and any other claims of the
Government against the Contractor.
(ii) Charge interest, in the manner prescribed in paragraph (f) above, on outstanding advance payments during the period of any event described in subparagraph
(1) above.
(iii) Demand immediate repayment by the
Contractor of the unliquidated balance of advance payments.
(iv) Take possession of and, with or without advertisement, sell at public or private
sale all or any part of the property on which
the Government has a lien under this contract and, after deducting any expenses incident to the sale, apply the net proceeds of
the sale to reduce the unliquidated balance
of advance payments or other Government
claims against the Contractor.
(3) The Government may take any of the
actions described in subparagraphs (k) (1)
and (2) of this clause it considers appropriate
at its discretion and without limiting any
other rights of the Government.
(l) Prohibition against assignment. Notwithstanding any other terms of this contract,
the Contractor shall not assign this contract, any interest therein, or any claim
under the contract to any party.
(m) Information and access to records. The
Contractor shall furnish to the administering office (1) monthly or at other intervals as required, signed or certified balance

sheets and profit and loss statements together with a report on the operation of the
special account in the form prescribed by the
administering office; and (2) if requested,
other information concerning the operation
of the Contractor’s business. The Contractor
shall provide the authorized Government
representatives proper facilities for inspection of the Contractor’s books, records, and
accounts.
(n) Other security. The terms of this contract are considered to provide adequate security to the Government for advance payments; however, if the administering office
considers the security inadequate, the Contractor shall furnish additional security satisfactory to the administering office, to the
extent that the security is available.
(o) Representations. The Contractor represents the following:
(1) The balance sheet, the profit and loss
statement, and any other supporting financial statements furnished to the administering office fairly reflect the financial
condition of the Contractor at the date
shown or the period covered, and there has
been no subsequent materially adverse
change in the financial condition of the Contractor.
(2) No litigation or proceedings are presently pending or threatened against the Contractor, except as shown in the financial
statements.
(3) The Contractor has disclosed all contingent liabilities, except for liability resulting
from the renegotiation of defense production
contracts, in the financial statements furnished to the administering office.
(4) None of the terms in this clause conflict
with the authority under which the Contractor is doing business or with the provision of any existing indenture or agreement
of the Contractor.
(5) The Contractor has the power to enter
into this contract and accept advance payments, and has taken all necessary action to
authorize the acceptance under the terms of
this contract.
(6) The assets of the Contractor are not
subject to any lien or encumbrance of any
character except for current taxes not delinquent, and except as shown in the financial
statements furnished by the Contractor.
There is no current assignment of claims
under any contract affected by these advance
payment provisions.
(7) All information furnished by the Contractor to the administering office in connection with each request for advance payments is true and correct.
(8) These representations shall be continuing and shall be considered to have been
repeated by the submission of each invoice
for advance payments.

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(p) Covenants. To the extent the Government considers it necessary while any advance payments made under this contract remain outstanding, the Contractor, without
the prior written consent of the administering office, shall not—
(1) Mortgage, pledge, or otherwise encumber or allow to be encumbered, any of the assets of the Contractor now owned or subsequently acquired, or permit any preexisting
mortgages, liens, or other encumbrances to
remain on or attach to any assets of the Contractor which are allocated to performing
this contract and with respect to which the
Government has a lien under this contract;
(2) Sell, assign, transfer, or otherwise dispose of accounts receivable, notes, or claims
for money due or to become due;
(3) Declare or pay any dividends, except
dividends payable in stock of the corporation, or make any other distribution on account of any shares of its capital stock, or
purchase, redeem, or otherwise acquire for
value any of its stock, except as required by
sinking fund or redemption arrangements reported to the administering office incident
to the establishment of these advance payment provisions;
(4) Sell, convey, or lease all or a substantial part of its assets;
(5) Acquire for value the stock or other securities of any corporation, municipality, or
governmental authority, except direct obligations of the United States;
(6) Make any advance or loan or incur any
liability as guarantor, surety, or accommodation endorser for any party;
(7) Permit a writ of attachment or any
similar process to be issued against its property without getting a release or bonding the
property within 30 days after the entry of the
writ of attachment or other process;
(8) Pay any remuneration in any form to
its directors, officers, or key employees
higher than rates provided in existing agreements of which notice has been given to the
administering office; accrue excess remuneration without first obtaining an agreement subordinating it to all claims of the
Government; or employ any person at a rate
of compensation over $— a year;
(9) Change substantially the management,
ownership, or control of the corporation;
(10) Merge or consolidate with any other
firm or corporation, change the type of business, or engage in any transaction outside
the ordinary course of the Contractor’s business as presently conducted;
(12) Create or incur indebtedness for advances, other than advances to be made
under the terms of this contract, or for borrowings;
(13) Make or covenant for capital expenditures exceeding $ll in total;
(14) Permit its net current assets, computed in accordance with generally accepted

accounting principles, to become less than
$ll; or
(15) Make any payments on account of the
obligations listed below, except in the manner and to the extent provided in this contract:
List the pertinent obligations

(End of clause)
Alternate I (APR 1984). If the agency
desires to waive the countersignature
requirement because of the Contractor’s financial strength, good performance record, and favorable experience
concerning cost disallowances, add the
following sentence, if appropriate, to
paragraph (b) of the basic clause:
However,
for
this
contract,
countersignature on behalf of the Government will not be required unless it is determined necessary by the administering office.

Alternate II (MAY 2001). If used in a
cost-reimbursement
contract,
substitute the following paragraphs (c)
and (e), and subparagraphs (f)(1) and
(f)(2) for paragraphs (c) and (e) and subparagraphs (f) (1) and (2) of the basic
clause:
(c) Use of funds. The Contractor shall withdraw funds from the special account only to
pay for allowable costs as prescribed by the
ll clause of this contract. Payment for any
other types of expenses shall be approved in
writing by the administering office.
(e) Maximum payment. When the sum of all
unliquidated advance payments, unpaid interest charges, and other payments equal the
total estimated cost of $ll (not including
fixed-fee, if any) for the work under this contract, the Government shall withhold further
payments to the Contractor. Upon completion or termination of the contract, the Government shall deduct from the amount due
to the Contractor all unliquidated advance
payments and interest charges payable. The
Contractor shall pay any deficiency to the
Government upon demand. For purposes of
this paragraph, the estimated cost shall be
considered to be the stated estimated cost,
less any subsequent reductions of the estimated cost, plus any increases in the estimated costs that do not, in the aggregate,
exceed $ll [Insert an amount not higher than
10 percent of the stated estimated cost inserted
in this paragraph.] The estimated cost shall
include, without limitation, any reimbursable cost (as estimated by the Contracting
Officer) incident to a termination for the
convenience of the Government. Any payments withheld under this paragraph shall
be applied to reduce the unliquidated advance payments. If full liquidation has been

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made, payments under the contract shall resume.
(f) Interest. (1) The Contractor shall pay interest to the Government on the daily unliquidated advance payments at the daily rate
specified in subparagraph (f)(3) below. Interest shall be computed at the end of each calendar month for the actual number of days
involved. For the purpose of computing the
interest charge, the following shall be observed:
(i) Advance payments shall be considered
as increasing the unliquidated balance as of
the date of the advance payment check.
(ii) Repayments by Contractor check shall
be considered as decreasing the unliquidated
balance as of the date on which the check is
received by the Government authority designated by the Contracting Officer.
(iii) Liquidations by deductions from payments to the Contractor shall be considered
as decreasing the unliquidated balance as of
the dates on which the Contractor presents
to the Contracting Officer full and accurate
data for the preparation of each voucher.
Credits resulting from these deductions shall
be made upon the approval of the reimbursement vouchers by the Disbursing Officer,
based upon the Contracting Officer’s certification of the applicable dates.
(2) Interest charges resulting from the
monthly computation shall be deducted from
any payments on account of the fixed-fee due
to the Contractor. If the accrued interest exceeds the payment due, any excess interest
shall be carried forward and deducted from
subsequent payments of the contract price or
fixed-fee. Interest carried forward shall not
be compounded. Interest on advance payments shall cease to accrue upon (i) satisfactory completion or (ii) termination of the
contract for the convenience of the Government. The Contractor shall charge interest
on advance payments to subcontractors in
the manner described above and credit the
interest to the Government. Interest need
not be charged on advance payments to nonprofit educational or research subcontractors for experimental, developmental, or research work.

Alternate III (APR 1984). If the agency
considers a more rapid liquidation appropriate, add the following sentence
as the first sentence of paragraph (e) of
the basic clause with the appropriate
percentage specified:
To liquidate the principal amount of any
advance payment made to the Contractor,
there shall be deductions of l percent from
all payments made by the Government under
the contracts involved.

Alternate IV (APR 1984). If the agency
provides advance payments under the
contract at no interest to the prime

contractor, add the following sentences
as the beginning sentences of paragraph (f) of the clause:
No interest shall be charged to the prime
Contractor for advance payments except for
interest charged during a period of default.
The terms of this paragraph concerning interest charges for advance payments shall
not apply to the prime Contractor.

Alternate V (MAY 2001). If the requirement for a special account is eliminated in accordance with 32.409–3 (e) or
(g), insert the clause set forth below instead of the basic clause.
If this Alternate is used in combination with Alternate II, disregard the instructions concerning paragraph (c),
Use of funds, in Alternate II; substitute
paragraph (e), Maximum payment, in Alternate II for paragraph (d) below; and
substitute paragraph (f), Interest, in Alternate II for paragraph (e) below and
change the reference to paragraph (f)(3)
in the first sentence of paragraph (f) of
Alternate II to (e)(3).
If this Alternate is used in combination with Alternate III, insert the additional sentence set forth in Alternate
III as the first sentence of paragraph
(d) of this Alternate.
If this Alternate is used in combination with Alternate IV, insert the additional sentences set forth in Alternate
IV as the beginning sentences of paragraph (e) of this Alternate.
ADVANCE PAYMENTS WITHOUT SPECIAL
ACCOUNT (MAY 2001)
(a) Requirements for payment. Advance payments will be made under this contract (1)
upon submission of properly certified invoices or vouchers by the contractor, and approval by the administering office, –––––
[insert the name of the office designated under
agency procedures], or (2) under a letter of
credit. The amount of the invoice or voucher
submitted plus all advance payments previously approved shall not exceed $––––. If a
letter of credit is used, the Contractor shall
withdraw cash only when needed for disbursements acceptable under this contract
and report cash disbursements and balances
as required by the administering office. The
Contractor shall apply terms similar to this
clause to any advance payments to subcontractors.
(b) Use of funds. The Contractor may use
advance payment funds only to pay for properly allocable, allowable, and reasonable
costs for direct materials, direct labor, and
indirect costs. Determinations of whether
costs are properly allocable, allowable, and

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reasonable shall be in accordance with generally accepted accounting principles, subject to any applicable subparts of part 31 of
the Federal Acquisition Regulation.
(c) Repayment to the Government. At any
time, the Contractor may repay all or any
part of the funds advanced by the Government. Whenever requested in writing to do
so by the administering office, the Contractor shall repay to the Government any
part of unliquidated advance payments considered by the administering office to exceed
the Contractor’s current requirements or the
amount specified in paragraph (a) of this
clause.
(d) Maximum payment. When the sum of all
unliquidated advance payments, unpaid interest charges, and other payments exceed ––
––– percent of the contract price, the Government shall withhold further payments to the
Contractor. On completion or termination of
the contract, the Government shall deduct
from the amount due to the Contractor all
unliquidated advance payments and all interest charges payable. If previous payments
to the Contractor exceed the amount due,
the excess amount shall be paid to the Government on demand. For purposes of this
paragraph, the contract price shall be considered to be the stated contract price of $–
–––, less any subsequent price reductions
under the contract, plus (1) any price increases resulting from any terms of this contract for price redetermination or escalation, and (2) any other price increases that
do not, in the aggregate, exceed $–––– [insert
an amount not higher than 10 percent of the
stated contract amount inserted in this paragraph]. Any payments withheld under this
paragraph shall be applied to reduce the unliquidated advance payments. If full liquidation has been made, payments under the contract shall resume.
(e) Interest. (1) The Contractor shall pay interest to the Government on the daily unliquidated advance payments at the daily rate
in subparagraph (e)(3) of this clause. Interest
shall be computed at the end of each calendar month for the actual number of days
involved. For the purpose of computing the
interest charge—
(i) Advance payments shall be considered
as increasing the unliquidated balance as of
the date of the advance payment check;
(ii) Repayments by Contractor check shall
be considered as decreasing the unliquidated
balance as of the date on which the check is
received by the Government authority designated by the Contracting Officer; and
(iii) Liquidations by deductions from Government payments to the Contractor shall be
considered as decreasing the unliquidated
balance as of the date of the check for the reduced payment.
(2) Interest charges resulting from the
monthly computation shall be deducted from
payments, other than advance payments, due

the Contractor. If the accrued interest exceeds the payment due, any excess interest
shall be carried forward and deducted from
subsequent payments. Interest carried forward shall not be compounded. Interest on
advance payments shall cease to accrue upon
satisfactory completion or termination of
the contract for the convenience of the Government. The Contractor shall charge interest on advance payments to subcontractors
in the manner described above and credit the
interest to the Government. Interest need
not be charged on advance payments to nonprofit educational or research subcontractors, for experimental, developmental, or research work.
(3) If interest is required under the contract, the Contracting Officer shall determine a daily interest rate based on the rate
established by the Secretary of the Treasury
under Pub. L. 92–41 (50 U.S.C. App.,
1215(b)(2)). The Contracting Officer shall revise the daily interest rate during the contract period in keeping with any changes in
the cited interest rate.
(4) If the full amount of interest charged
under this paragraph has not been paid by
deduction or otherwise upon completion or
termination of this contract, the Contractor
shall pay the remaining interest to the Government on demand.
(f) Lien on property under contract. (1) All
advance payments under this contract, together with interest charges, shall be secured, when made, by a lien in favor of the
Government, paramount to all other liens,
on the supplies or other things covered by
this contract and on all material and other
property acquired for or allocated to the performance of this contract, except to the extent that the Government by virtue of any
other terms of this contract, or otherwise,
shall have valid title to the supplies, materials, or other property as against other
creditors of the Contractor.
(2) The Contractor shall identify, by marking or segregation, all property that is subject to a lien in favor of the Government by
virtue of any terms of this contract in such
a way as to indicate that it is subject to a
lien and that it has been acquired for or allocated to performing this contract. If, for any
reason, the supplies, materials, or other
property are not identified by marking or
segregation, the Government shall be considered to have a lien to the extent of the Government’s interest under this contract on
any mass of property with which the supplies, materials, or other property are commingled. The Contractor shall maintain adequate accounting control over the property
on its books and records.
(3) If, at any time during the progress of
the work on the contract, it becomes necessary to deliver to a third person any items
or materials on which the Government has a
lien, the Contractor shall notify the third

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person of the lien and shall obtain from the
third person a receipt in duplicate acknowledging the existence of the lien. The Contractor shall provide a copy of each receipt
to the Contracting Officer.
(4) If, under the termination clause, the
Contracting Officer authorizes the contractor to sell or retain termination inventory, the approval shall constitute a release
of the Government’s lien to the extent that—
(i) The termination inventory is sold or retained; and
(ii) The sale proceeds or retention credits
are applied to reduce any outstanding advance payments.
(g) Insurance. (1) The Contractor shall
maintain with responsible insurance carriers—
(i) Insurance on plant and equipment
against fire and other hazards, to the extent
that similar properties are usually insured
by others operating plants and properties of
similar character in the same general locality;
(ii) Adequate insurance against liability on
account of damage to persons or property;
and
(iii) Adequate insurance under all applicable workers’ compensation laws.
(2) Until work under this contract has been
completed and all advance payments made
under the contract have been liquidated, the
Contractor shall—
(i) Maintain this insurance;
(ii) Maintain adequate insurance on any
materials, parts, assemblies, subassemblies,
supplies, equipment, and other property acquired for or allocable to this contract and
subject to the Government lien under paragraph (f) of this clause; and
(iii) Furnish any evidence with respect to
its insurance that the administering office
may require.
(h) Default. (1) If any of the following
events occur, the Government may, by written notice to the Contractor, withhold further payments on this contract:
(i) Termination of this contract for a fault
of the Contractor.
(ii) A finding by the administering office
that the Contractor has failed to—
(A) Observe any of the conditions of the advance payment terms;
(B) Comply with any material term of this
contract;
(C) Make progress or maintain a financial
condition adequate for performance of this
contract;
(D) Limit inventory allocated to this contract to reasonable requirements; or
(E) Avoid delinquency in payment of taxes
or of the costs of performing this contract in
the ordinary course of business.
(iii) The appointment of a trustee, receiver, or liquidator for all or a substantial
part of the Contractor’s property, or the institution of proceedings by or against the

Contractor for bankruptcy, reorganization,
arrangement, or liquidation.
(iv) The commission of an act of bankruptcy.
(2) If any of the events described in subparagraph (h)(1) of this clause continue for 30
days after the written notice to the Contractor, the Government may take any of
the following additional actions:
(i) Charge interest, in the manner prescribed in paragraph (e) of this clause, on
outstanding advance payments during the
period of any event described in subparagraph (h)(1) of this clause.
(ii) Demand immediate repayment by the
Contractor of the unliquidated balance of advance payments.
(iii) Take possession of and, with or without advertisement, sell at public or private
sale all or any part of the property on which
the Government has a lien under this contract and, after deducting any expenses incident to the sale, apply the net proceeds of
the sale to reduce the unliquidated balance
of advance payments or other Government
claims against the Contractor.
(3) The Government may take any of the
actions described in subparagraphs (h)(1) and
(h)(2) of this clause it considers appropriate
at its discretion and without limiting any
other rights of the Government.
(i) Prohibition against assignment. Notwithstanding any other terms of this contract,
the Contractor shall not assign this contract, any interest therein, or any claim
under the contract to any party.
(j) Information and access to records. The
Contractor shall furnish to the administering office (1) monthly or at other intervals as required, signed or certified balance
sheets and profit and loss statements, and,
(2) if requested, other information concerning the operation of the contractor’s
business. The Contractor shall provide the
authorized
Government
representatives
proper facilities for inspection of the Contractor’s books, records, and accounts.
(k) Other security. The terms of this contract are considered to provide adequate security to the Government for advance payments; however, if the administering office
considers the security inadequate, the Contractor shall furnish additional security satisfactory to the administering office, to the
extent that the security is available.
(l) Representations. The Contractor represents the following:
(1) The balance sheet, the profit and loss
statement, and any other supporting financial statements furnished to the administering office fairly reflect the financial
condition of the Contractor at the date
shown or the period covered, and there has
been no subsequent materially adverse
change in the financial condition of the Contractor.

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48 CFR Ch. 1 (10–1–03 Edition)

(2) No litigation or proceedings are presently pending or threatened against the Contractor, except as shown in the financial
statements.
(3) The Contractor has disclosed all contingent liabilities, except for liability resulting
from the renegotiation of defense production
contracts, in the financial statements furnished to the administering office.
(4) None of the terms in this clause conflict
with the authority under which the Contractor is doing business or with the provision of any existing indenture or agreement
of the Contractor.
(5) The Contractor has the power to enter
into this contract and accept advance payments, and has takken all necessary action
to authorize the acceptance under the terms
of this contract.
(6) The assets of the Contractor are not
subject to any lien or encumbrance of any
character except for current taxes not delinquent, and except as shown in the financial
statements furnished by the Contractor.
There is no current assignment of claims
under any contract affected by these advance
payment provisions.
(7) All information furnished by the Contractor to the administering office in connection with each request for advance payments is true and correct.
(8) These representations shall be continuing and shall be considered to have been
repeated by the submission of each invoice
for advance payments.
(m) Covenants. To the extent the Government considers it necessary while any advance payments made under this contract remain outstanding, the Contractor, without
the prior written consent of the administering office, shall not—
(1) Mortgage, pledge, or otherwise encumber or allow to be encumbered, any of the assets of the Contractor now owned or subsequently acquired, or permit any preexisting
mortgages, liens, or other encumbrances to
remain on or attach to any assets of the Contractor which are allocated to performing
this contract and with respect to which the
Government has a lien under this contract;
(2) Sell, assign, transfer, or otherwise dispose of accounts receivable, notes, or claims
for money due or to become due;
(3) Declare or pay any dividends, except
dividends payable in stock of the corporation, or make any other distribution on account of any shares of its capital stock, or
purchase, redeem, or otherwise acquire for
value any of its stock, except as required by
sinking fund or redemption arrangements reported to the administering office incident
to the establishment of these advance payment provisions;
(4) Sell, convey, or lease all or a substantial part of its assets;
(5) Acquire for value the stock or other securities of any corporation, municipality, or

Governmental authority, except direct obligations of the United States;
(6) Make any advance or loan or incur any
liability as guarantor, surety, or accommodation endorser for any party;
(7) Permit a writ of attachment or any
similar process to be issued against its property without getting a release or bonding the
property within 30 days after the entry of the
writ of attachment or other process;
(8) Pay any remuneration in any form to
its directors, officers, or key employees
higher than rates provided in existing agreements of which notice has been given to the
administering office; accure excess remuneration without first obtaining an agreement subordinating it to all claims of the
Government; or employ any person at a rate
of compensation over ––––– a year.
(9) Change substantially the management,
ownership, or control of the corporation;
(10) Merge or consolidate with any other
firm or corporation, change the type of business, or engage in any transaction outside
the ordinary course of the Contractor’s business as presently conducted;
(11) Deposit any of its funds except in a
bank or trust company insured by the Federal Deposit Insurance Corporation or a credit union insured by the National Credit
Union Administration;
(12) Create or incur indebtedness for advances, other than advances to be made
under the terms of this contract, or for borrowings;
(13) Make or covenant for capital expenditures exceeding $–––– in total;
(14) Permit its net current assets, computed in accordance with generally accepted
accounting principles, to become less than ––
–––; or
(15) Make any payments on account of the
obligations listed below, except in the manner and to the extent provided in this contract:
[List the pertinent obligations]
[48 FR 42478, Sept. 19, 1983, as amended at 55
FR 25532, June 21, 1990; 64 FR 10534, Mar. 4,
1999; 66 FR 2138, Jan. 10, 2001]

52.232–13 Notice of Progress Payments.
As prescribed in 32.502–3(a), insert the
following provision in invitations for
bids and requests for proposals that include a Progress Payments clause:
NOTICE OF PROGRESS PAYMENTS (APR 1984)
The need for customary progress payments
conforming to the regulations in subpart 32.5
of the Federal Acquisition Regulation (FAR)
will not be considered as a handicap or adverse factor in the award of the contract.
The Progress Payments clause included in

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this solicitation will be included in any resulting contract, modified or altered if necessary in accordance with subsection 52.232–
16 and its Alternate I of the FAR. Even
though the clause is included in the contract, the clause shall be inoperative during
any time the contractor’s accounting system
and controls are determined by the Government to be inadequate for segregation and
accumulation of contract costs.

(End of provision)
52.232–14 Notice of Availability of
Progress Payments Exclusively for
Small Business Concerns.
As prescribed in 32.502–3(b)(2), insert
the following provision in invitations
for bids if it is anticipated that (a) both
small business concerns and others
may submit bids in response to the
same invitation and (b) only the small
business bidders would need progress
payments:
NOTICE OF AVAILABILITY OF PROGRESS PAYMENTS EXCLUSIVELY FOR SMALL BUSINESS
CONCERNS (APR 1984)
The Progress Payments clause will be
available only to small business concerns.
Any bid conditioned upon inclusion of a
progress payment clause in the resulting
contract will be rejected as nonresponsive if
the bidder is not a small business concern.

(End of provision)
52.232–15 Progress Payments Not Included.
As prescribed in 32.502–3(c), insert the
following provision in invitations for
bids if the solicitation will not contain
one of the provisions prescribed in
32.502–3 (a) and (b):
PROGRESS PAYMENTS NOT INCLUDED (APR
1984)
A progress payments clause is not included
in this solicitation, and will not be added to
the resulting contract at the time of award.
Bids conditioned upon inclusion of a progress
payment clause in the resulting contract
will be rejected as nonresponsive.

(End of provision)
52.232–16 Progress Payments.
As prescribed in 32.502–4(a), insert the
following clause:
PROGRESS PAYMENTS (APRIL 2003)
The Government will make progress payments to the Contractor when requested as

work progresses, but not more frequently
than monthly, in amounts of $2,500 or more
approved by the Contracting Officer, under
the following conditions:
(a) Computation of amounts. (1) Unless the
Contractor requests a smaller amount, the
Government will compute each progress payment as 80 percent of the Contractor’s total
costs incurred under this contract whether
or not actually paid, plus financing payments to subcontractors (see paragraph (j) of
this clause), less the sum of all previous
progress payments made by the Government
under this contract. The Contracting Officer
will consider cost of money that would be allowable under FAR 31.205–10 as an incurred
cost for progress payment purposes.
(2) The amount of financing and other payments for supplies and services purchased directly for the contract are limited to the
amounts that have been paid by cash, check,
or other forms of payment, or that are determined due and will be paid to subcontractors—
(i) In accordance with the terms and conditions of a subcontract or invoice; and
(ii) Ordinarily within 30 days of the submission of the Contractor’s payment request
to the Government.
(3) The Government will exclude accrued
costs of Contractor contributions under employee pension plans until actually paid unless—
(i) The Contractor’s practice is to make
contributions to the retirement fund quarterly or more frequently; and
(ii) The contribution does not remain unpaid 30 days after the end of the applicable
quarter or shorter payment period (any contribution remaining unpaid shall be excluded
from the Contractor’s total costs for
progress payments until paid).
(4) The Contractor shall not include the
following in total costs for progress payment
purposes in paragraph (a)(1) of this clause:
(i) Costs that are not reasonable, allocable
to this contract, and consistent with sound
and generally accepted accounting principles
and practices.
(ii) Costs incurred by subcontractors or
suppliers.
(iii) Costs ordinarily capitalized and subject to depreciation or amortization except
for the properly depreciated or amortized
portion of such costs.
(iv) Payments made or amounts payable to
subcontractors or suppliers, except for—
(A) Completed work, including partial deliveries, to which the Contractor has acquired title; and
(B) Work under cost-reimbursement or
time-and-material subcontracts to which the
Contractor has acquired title.
(5) The amount of unliquidated progress
payments may exceed neither (i) the
progress payments made against incomplete
work (including allowable unliquidated

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progress payments to subcontractors) nor (ii)
the value, for progress payment purposes, of
the incomplete work. Incomplete work shall
be considered to be the supplies and services
required by this contract, for which delivery
and invoicing by the Contractor and acceptance by the Government are incomplete.
(6) The total amount of progress payments
shall not exceed 80 percent of the total contract price.
(7) If a progress payment or the unliquidated progress payments exceed the amounts
permitted by subparagraphs (a)(4) or (a)(5)
above, the Contractor shall repay the
amount of such excess to the Government on
demand.
(8) Notwithstanding any other terms of the
contract, the Contractor agrees not to request progress payments in dollar amounts
of less than $2,500. The Contracting Officer
may make exceptions.
(b) Liquidation. Except as provided in the
Termination for Convenience of the Government clause, all progress payments shall be
liquidated by deducting from any payment
under this contract, other than advance or
progress
payments,
the
unliquidated
progress payments, or 80 percent of the
amount invoiced, whichever is less. The Contractor shall repay to the Government any
amounts required by a retroactive price reduction, after computing liquidations and
payments on past invoices at the reduced
prices and adjusting the unliquidated
progress payments accordingly. The Government reserves the right to unilaterally
change from the ordinary liquidation rate to
an alternate rate when deemed appropriate
for proper contract financing.
(c) Reduction or suspension. The Contracting Officer may reduce or suspend
progress payments, increase the rate of liquidation, or take a combination of these acquisitions, after finding on substantial evidence any of the following conditions:
(1) The Contractor failed to comply with
any material requirement of this contract
(which includes paragraphs (f) and (g) below).
(2) Performance of this contract is endangered by the Contractor’s (i) failure to make
progress or (ii) unsatisfactory financial condition.
(3) Inventory allocated to this contract
substantially exceeds reasonable requirements.
(4) The Contractor is delinquent in payment of the costs of performing this contract
in the ordinary course of business.
(5) The unliquidated progress payments exceed the fair value of the work accomplished
on the undelivered portion of this contract.
(6) The Contractor is realizing less profit
than that reflected in the establishment of
any alternate liquidation rate in paragraph
(b) above, and that rate is less than the
progress payment rate stated in subparagraph (a)(1) above.

(d) Title. (1) Title to the property described
in this paragraph (d) shall vest in the Government. Vestiture shall be immediately
upon the date of this contract, for property
acquired or produced before that date. Otherwise, vestiture shall occur when the property
is or should have been allocable or properly
chargeable to this contract.
(2) Property, as used in this clause, includes
all of the below-described items acquired or
produced by the Contractor that are or
should be allocable or properly chargeable to
this contract under sound and generally accepted accounting principles and practices.
(i) Parts, materials, inventories, and work
in process;
(ii) Special tooling and special test equipment to which the Government is to acquire
title under any other clause of this contract;
(iii) Nondurable (i.e., noncapital) tools,
jigs, dies, fixtures, molds, patterns, taps,
gauges, test equipment, and other similar
manufacturing aids, title to which would not
be obtained as special tooling under subparagraph (ii) above; and
(iv) Drawings and technical data, to the extent the Contractor or subcontractors are required to deliver them to the Government by
other clauses of this contract.
(3) Although title to property is in the
Government under this clause, other applicable clauses of this contract, e.g., the termination or special tooling clauses, shall determine the handling and disposition of the
property.
(4) The Contractor may sell any scrap resulting from production under this contract
without requesting the Contracting Officer’s
approval, but the proceeds shall be credited
against the costs of performance.
(5) To acquire for its own use or dispose of
property to which title is vested in the Government under this clause, the Contractor
must obtain the Contracting Officer’s advance approval of the action and the terms.
The Contractor shall (i) exclude the allocable costs of the property from the costs of
contract performance, and (ii) repay to the
Government any amount of unliquidated
progress payments allocable to the property.
Repayment may be by cash or credit memorandum.
(6) When the Contractor completes all of
the obligations under this contract, including liquidation of all progress payments,
title shall vest in the Contractor for all property (or the proceeds thereof) not—
(i) Delivered to, and accepted by, the Government under this contract; or
(ii) Incorporated in supplies delivered to,
and accepted by, the Government under this
contract and to which title is vested in the
Government under this clause.
(7) The terms of this contract concerning
liability for Government-furnished property

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shall not apply to property to which the Government acquired title solely under this
clause.
(e) Risk of loss. Before delivery to and acceptance by the Government, the Contractor
shall bear the risk of loss for property, the
title to which vests in the Government under
this clause, except to the extent the Government expressly assumes the risk. The Contractor shall repay the Government an
amount equal to the unliquidated progress
payments that are based on costs allocable
to property that is damaged, lost, stolen, or
destroyed.
(f) Control of costs and property. The Contractor shall maintain an accounting system
and controls adequate for the proper administration of this clause.
(g) Reports and access to records. The Contractor shall promptly furnish reports, certificates, financial statements, and other
pertinent information reasonably requested
by the Contracting Officer for the administration of this clause. Also, the Contractor
shall give the Government reasonable opportunity to examine and verify the Contractor’s books, records, and accounts.
(h) Special terms regarding default. If this
contract is terminated under the Default
clause, (i) the Contractor shall, on demand,
repay to the Government the amount of unliquidated progress payments and (ii) title
shall vest in the Contractor, on full liquidation of progress payments, for all property
for which the Government elects not to require delivery under the Default clause. The
Government shall be liable for no payment
except as provided by the Default clause.
(i) Reservations of rights. (1) No payment or
vesting of title under this clause shall (i) excuse the Contractor from performance of obligations under this contract or (ii) constitute a waiver of any of the rights or remedies of the parties under the contract.
(2) The Government’s rights and remedies
under this clause (i) shall not be exclusive
but rather shall be in addition to any other
rights and remedies provided by law or this
contract and (ii) shall not be affected by delayed, partial, or omitted exercise of any
right, remedy, power, or privilege, nor shall
such exercise or any single exercise preclude
or impair any further exercise under this
clause or the exercise of any other right,
power, or privilege of the Government.
(j) Financing payments to subcontractors.
The financing payments to subcontractors
mentioned in paragraphs (a)(1) and (a)(2) of
this clause shall be all financing payments
to subcontractors or divisions, if the following conditions are met:
(1) The amounts included are limited to—
(i) The unliquidated remainder of financing
payments made; plus
(ii) Any unpaid subcontractor requests for
financing payments.

(2) The subcontract or interdivisional order
is expected to involve a minimum of approximately 6 months between the beginning of
work and the first delivery; or, if the subcontractor is a small business concern, 4
months.
(3) If the financing payments are in the
form of progress payments, the terms of the
subcontract or interdivisional order concerning progress payments—
(i) Are substantially similar to the terms
of this clause for any subcontractor that is a
large business concern, or this clause with
its Alternate I for any subcontractor that is
a small business concern;
(ii) Are at least as favorable to the Government as the terms of this clause;
(iii) Are not more favorable to the subcontractor or division than the terms of this
clause are to the Contractor;
(iv) Are in conformance with the requirements of FAR 32.504(e); and
(v) Subordinate all subcontractor rights
concerning property to which the Government has title under the subcontract to the
Government’s right to require delivery of the
property to the Government if—
(A) The Contractor defaults; or
(B) The subcontractor becomes bankrupt
or insolvent.
(4) If the financing payments are in the
form of performance-based payments, the
terms of the subcontract or interdivisional
order concerning payments—
(i) Are substantially similar to the Performance-Based Payments clause at FAR
52.232–32 and meet the criteria for, and definition of, performance-based payments in
FAR Part 32;
(ii) Are in conformance with the requirements of FAR 32.504(f); and
(iii) Subordinate all subcontractor rights
concerning property to which the Government has title under the subcontract to the
Government’s right to require delivery of the
property to the Government if—
(A) The Contractor defaults; or
(B) The subcontractor becomes bankrupt
or insolvent.
(5) If the financing payments are in the
form of commercial item financing payments, the terms of the subcontract or interdivisional order concerning payments—
(i) Are constructed in accordance with
FAR 32.206(c) and included in a subcontract
for a commercial item purchase that meets
the definition and standards for acquisition
of commercial items in FAR Parts 2 and 12;
(ii) Are in conformance with the requirements of FAR 32.504(g); and
(iii) Subordinate all subcontractor rights
concerning property to which the Government has title under the subcontract to the
Government’s right to require delivery of the
property to the Government if—
(A) The Contractor defaults; or

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48 CFR Ch. 1 (10–1–03 Edition)

(B) The subcontractor becomes bankrupt
or insolvent.
(6) If financing is in the form of progress
payments, the progress payment rate in the
subcontract is the customary rate used by
the contracting agency, depending on whether the subcontractor is or is not a small business concern.
(7) Concerning any proceeds received by
the Government for property to which title
has vested in the Government under the subcontract terms, the parties agree that the
proceeds shall be applied to reducing any unliquidated financing payments by the Government to the Contractor under this contract.
(8) If no unliquidated financing payments
to the Contractor remain, but there are unliquidated financing payments that the Contractor has made to any subcontractor, the
Contractor shall be subrogated to all the
rights the Government obtained through the
terms required by this clause to be in any
subcontract, as if all such rights had been assigned and transferred to the Contractor.
(9) To facilitate small business participation in subcontracting under this contract,
the Contractor shall provide financing payments to small business concerns, in conformity with the standards for customary
contract financing payments stated in FAR
32.113. The Contractor shall not consider the
need for such financing payments as a handicap or adverse factor in the award of subcontracts.
(k) Limitations on undefinitized contract actions. Notwithstanding any other progress
payment provisions in this contract,
progress payments may not exceed 80 percent of costs incurred on work accomplished
under undefinitized contract actions. A contract action is any action resulting in a contract, as defined in subpart 2.1, including
contract modifications for additional supplies or services, but not including contract
modifications that are within the scope and
under the terms of the contract, such as contract modifications issued pursuant to the
Changes clause, or funding and other administrative changes. This limitation shall
apply to the costs incurred, as computed in
accordance with paragraph (a) of this clause,
and shall remain in effect until the contract
action is definitized. Costs incurred which
are subject to this limitation shall be segregated on Contractor progress payment requests and invoices from those costs eligible
for higher progress payment rates. For purposes of progress payment liquidation, as described in paragraph (b) of this clause,
progress payments for undefinitized contract
actions shall be liquidated at 80 percent of
the amount invoiced for work performed
under the undefinitized contract action as
long as the contract action remains
undefinitized. The amount of unliquidated
progress payments for undefinitized contract

actions shall not exceed 80 percent of the
maximum liability of the Government under
the undefinitized contract action or such
lower limit specified elsewhere in the contract. Separate limits may be specified for
separate actions.
(l) Due date. The designated payment office
will make progress payments on the llll
[Contracting Officer insert date as prescribed by
agency head; if not prescribed, insert ‘‘30th’’]
day after the designated billing office receives a proper progress payment request. In
the event that the Government requires an
audit or other review of a specific progress
payment request to ensure compliance with
the terms and conditions of the contract, the
designated payment office is not compelled
to make payment by the specified due date.
Progress payments are considered contract
financing and are not subject to the interest
penalty provisions of the Prompt Payment
Act.
(m) Progress payments under indefinite—delivery contracts. The Contractor shall account
for and submit progress payment requests
under individual orders as if the order constituted a separate contract, unless otherwise specified in this contract.

(End of clause)
Alternate I (Mar 2000). If the contract
is with a small business concern,
change each mention of the progress
payment and liquidation rates excepting paragraph (k) to the customary
rate of 85 percent for small business
concerns (see FAR 32.501–1).
Alternate II (Apr 2003). If the contract
is a letter contract, add paragraphs (n)
and (o). The amount specified in paragraph (o) shall not exceed 80 percent of
the maximum liability of the Government under the letter contract. The
contracting officer may specify separate limits for separate parts of the
work.
(n) The Contracting Officer will liquidate
progress payments made under this letter
contract, unless previously liquidated under
paragraph (b) of this clause, using the following procedures:
(1) If this letter contract is superseded by
a definitive contract, unliquidated progress
payments made under this letter contract
shall be liquidated by deducting the amount
from the first progress or other payments
made under the definitive contract.
(2) If this letter contract is not superseded
by a definitive contract calling for the furnishing of all or part of the articles or services covered under the letter contract, unliquidated progress payments made under the

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letter contract shall be liquidated by deduction from the amount payable under the Termination clause.
(3) If this letter contract is partly terminated and partly superseded by a contract,
the Government will allocate the unliquidated progress payments to the terminated
and unterminated portions as the Government deems equitable, and will liquidate
each portion under the relevant procedure in
paragraphs (n)(1) and (n)(2) of this clause.
(4) If the method of liquidating progress
payments provided in this clause does not result in full liquidation, the Contractor shall
immediately pay the unliquidated balance to
the Government on demand.
(o) The amount of unliquidated progress
payments
shall
not
exceed
llll
[Contracting Officer specify dollar amount].

Alternate III (Apr 2003). As prescribed
in 32.502–4(d), add the following paragraph (n) to the basic clause. If Alternate II is also being used, redesignate
the following paragraph as paragraph
(p):
(n) The provisions of this clause will not be
applicable to individual orders at or below
the simplified acquisition threshold.
[48 FR 42478, Sept. 19, 1983, as amended at 52
FR 30078, Aug. 12, 1987; 55 FR 40392, Oct. 3,
1990; 56 FR 29138, June 25, 1991; 65 FR 16284,
Mar. 27, 2000; 66 FR 65361, Dec. 18, 2001; 67 FR
56126, Aug. 30, 2002; 67 FR 70521, Nov. 22, 2002;
68 FR 13208, Mar. 18, 2003]

52.232–17 Interest.
As prescribed in 32.617 (a) and (b) insert the following clause:
INTEREST (JUN 1996)
(a) Except as otherwise provided in this
contract under a Price Reduction for Defective Cost or Pricing Data clause or a Cost
Accounting Standards clause, all amounts
that become payable by the Contractor to
the Government under this contract (net of
any applicable tax credit under the Internal
Revenue Code (26 U.S.C. 1481)) shall bear simple interest from the date due until paid unless paid within 30 days of becoming due. The
interest rate shall be the interest rate established by the Secretary of the Treasury as
provided in Section 12 of the Contract Disputes Act of 1978 (Pub. L. 95–563), which is applicable to the period in which the amount
becomes due, as provided in paragraph (b) of
this clause, and then at the rate applicable
for each six-month period as fixed by the
Secretary until the amount is paid.
(b) Amounts shall be due at the earliest of
the following dates:
(1) The date fixed under this contract.
(2) The date of the first written demand for
payment consistent with this contract, in-

cluding any demand resulting from a default
termination.
(3) The date the Government transmits to
the Contractor a proposed supplemental
agreement to confirm completed negotiations establishing the amount of debt.
(4) If this contract provides for revision of
prices, the date of written notice to the Contractor stating the amount of refund payable
in connection with a pricing proposal or a
negotiated pricing agreement not confirmed
by contract modification.
(c) The interest charge made under this
clause may be reduced under the procedures
prescribed in 32.614–2 of the Federal Acquisition Regulation in effect on the date of this
contract.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 55
FR 52799, Dec. 21, 1990; 61 FR 18922, Apr. 29,
1996]

52.232–18 Availability of Funds.
As prescribed in 32.705–1(a), insert the
following clause:
AVAILABILITY OF FUNDS (APR 1984)
Funds are not presently available for this
contract. The Government’s obligation under
this contract is contingent upon the availability of appropriated funds from which
payment for contract purposes can be made.
No legal liability on the part of the Government for any payment may arise until funds
are made available to the Contracting Officer for this contract and until the Contractor receives notice of such availability,
to be confirmed in writing by the Contracting Officer.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 67
FR 13054, Mar. 20, 2002]

52.232–19 Availability of Funds for the
Next Fiscal Year.
As prescribed in 32.705–1(b), insert the
following clause in solicitations and
contracts if a one-year indefinite-quantity or requirements contract for services is contemplated and the contract
(a) is funded by annual appropriations
and (b) is to extend beyond the initial
fiscal year (see 32.703–2(b)):
AVAILABILITY OF FUNDS FOR THE NEXT FISCAL
YEAR (APR 1984)
Funds are not presently available for performance under this contract beyond lll.
The Government’s obligation for performance of this contract beyond that date is

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contingent upon the availability of appropriated funds from which payment for contract purposes can be made. No legal liability on the part of the Government for any
payment may arise for performance under
this contract beyond lll, until funds are
made available to the Contracting Officer for
performance and until the Contractor receives notice of availability, to be confirmed
in writing by the Contracting Officer.

(End of clause)
52.232–20 Limitation of Cost.
As prescribed in 32.705–2(a), insert the
following clause in solicitations and
contracts if a fully funded cost-reimbursement contract is contemplated,
except those for consolidated facilities,
facilities acquisition, or facilities use,
whether or not the contract provides
for payment of a fee. The 60-day period
may be varied from 30 to 90 days and
the 75 percent from 75 to 85 percent.
Task Order or other appropriate designation may be substituted for Schedule wherever that word appears in the
clause.
LIMITATION OF COST (APR 1984)
(a) The parties estimate that performance
of this contract, exclusive of any fee, will
not cost the Government more than (1) the
estimated cost specified in the Schedule or,
(2) if this is a cost-sharing contract, the Government’s share of the estimated cost specified in the Schedule. The Contractor agrees
to use its best efforts to perform the work
specified in the Schedule and all obligations
under this contract within the estimated
cost, which, if this is a cost-sharing contract, includes both the Government’s and
the Contractor’s share of the cost.
(b) The Contractor shall notify the Contracting Officer in writing whenever it has
reason to believe that—
(1) The costs the Contractor expects to
incur under this contract in the next 60 days,
when added to all costs previously incurred,
will exceed 75 percent of the estimated cost
specified in the Schedule; or
(2) The total cost for the performance of
this contract, exclusive of any fee, will be either greater or substantially less than had
been previously estimated.
(c) As part of the notification, the Contractor shall provide the Contracting Officer
a revised estimate of the total cost of performing this contract.
(d) Except as required by other provisions
of this contract, specifically citing and stated to be an exception to this clause—
(1) The Government is not obligated to reimburse the Contractor for costs incurred in

excess of (i) the estimated cost specified in
the Schedule or, (ii) if this is a cost-sharing
contract, the estimated cost to the Government specified in the Schedule; and
(2) The Contractor is not obligated to continue performance under this contract (including actions under the Termination
clause of this contract) or otherwise incur
costs in excess of the estimated cost specified in the Schedule, until the Contracting
Officer (i) notifies the Contractor in writing
that the estimated cost has been increased
and (ii) provides a revised estimated total
cost of performing this contract. If this is a
cost-sharing contract, the increase shall be
allocated in accordance with the formula
specified in the Schedule.
(e) No notice, communication, or representation in any form other than that specified
in subparagraph (d)(2) above, or from any
person other than the Contracting Officer,
shall affect this contract’s estimated cost to
the Government. In the absence of the specified notice, the Government is not obligated
to reimburse the Contractor for any costs in
excess of the estimated cost or, if this is a
cost-sharing contract, for any costs in excess
of the estimated cost to the Government
specified in the Schedule, whether those excess costs were incurred during the course of
the contract or as a result of termination.
(f) If the estimated cost specified in the
Schedule is increased, any costs the Contractor incurs before the increase that are in
excess of the previously estimated cost shall
be allowable to the same extent as if incurred afterward, unless the Contracting Officer issues a termination or other notice directing that the increase is solely to cover
termination or other specified expenses.
(g) Change orders shall not be considered
an authorization to exceed the estimated
cost to the Government specified in the
Schedule, unless they contain a statement
increasing the estimated cost.
(h) If this contract is terminated or the estimated cost is not increased, the Government and the Contractor shall negotiate an
equitable distribution of all property produced or purchased under the contract, based
upon the share of costs incurred by each.

(End of clause)
52.232–21 Limitation of Cost (Facilities).
As prescribed in 32.705–2(b), insert the
following clause in solicitations and
contracts for consolidated facilities, facilities acquisition, or facilities use
(see 45.301):
LIMITATION OF COST (FACILITIES) (APR 1984)
(a) The parties estimate that performance
of this contract will not cost the Government more than the estimated cost specified

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52.232–22

in the Schedule. The Contractor agrees to
use its best efforts to perform the work specified in the Schedule within the estimated
cost.
(b) The Contractor shall notify the Contracting Officer in writing whenever it has
reason to believe that—
(1) The costs that the Contractor expects
to incur under this contract in the next 30
days, when added to all costs previously incurred, will exceed 85 percent of the estimated cost specified in the Schedule; or
(2) The total cost to the Government for
the performance of this contract will be either greater or substantially less than had
previously been estimated.
(c) As part of the notification, the Contractor shall provide the Contracting Officer
a revised estimate of the total cost of performing this contract.
(d) Except as required by other provisions
of this contract, specifically citing and stated to be an exception to this clause—
(1) The Government is not obligated to reimburse the contractor for costs incurred in
excess of the estimated cost specified in the
Schedule; and
(2) The Contractor is not obligated to continue performance under this contract (including actions under the Termination
clause of this contract) or otherwise incur
costs in excess of the estimated cost specified in the Schedule, until the Contracting
Officer (i) notifies the Contractor in writing
that the estimated cost has been increased
and (ii) provides a revised estimated total
cost of performing this contract.
(e) No notice, communication, or representation in any form other than that specified
in subparagraph (d)(2) above, or from any
person other than the Contracting Officer,
shall affect this contract’s estimated cost to
the Government. In the absence of the specified notice, the Government is not obligated
to reimburse the Contractor for any costs in
excess of the estimated cost, whether those
excess costs were incurred during the course
of the contract or as a result of termination.
(f) If the estimated cost specified in the
Schedule is increased, any costs the Contractor incurs before the increase that are in
excess of the previously estimated cost shall
be allowable to the same extent as if incurred afterward, unless the Contracting Officer issues a termination or other notice directing that the increase is solely to cover
termination or other specified expenses.
(g) Change orders shall not be considered
an authorization to exceed the estimated
cost to the Government specified in the
Schedule, unless they contain a statement
increasing the estimated cost.

(End of clause)
52.232–22 Limitation of Funds.
As prescribed in 32.705–2(c), insert the
following clause in solicitations and
contracts if an incrementally funded
cost-reimbursement contract is contemplated. The 60-day period may be
varied from 30 to 90 days and the 75 percent from 75 to 85 percent. Task Order
or other appropriate designation may
be substituted for Schedule wherever
that word appears in the clause.
LIMITATION OF FUNDS (APR 1984)
(a) The parties estimate that performance
of this contract will not cost the Government more than (1) the estimated cost specified in the Schedule or, (2) if this is a costsharing contract, the Government’s share of
the estimated cost specified in the Schedule.
The Contractor agrees to use its best efforts
to perform the work specified in the Schedule and all obligations under this contract
within the estimated cost, which, if this is a
cost-sharing contract, includes both the Government’s and the Contractor’s share of the
cost.
(b) The Schedule specifies the amount
presently available for payment by the Government and allotted to this contract, the
items covered, the Government’s share of the
cost if this is a cost-sharing contract, and
the period of performance it is estimated the
allotted amount will cover. The parties contemplate that the Government will allot additional funds incrementally to the contract
up to the full estimated cost to the Government specified in the Schedule, exclusive of
any fee. The Contractor agrees to perform,
or have performed, work on the contract up
to the point at which the total amount paid
and payable by the Government under the
contract approximates but does not exceed
the total amount actually allotted by the
Government to the contract.
(c) The Contractor shall notify the Contracting Officer in writing whenever it has
reason to believe that the costs it expects to
incur under this contract in the next 60 days,
when added to all costs previously incurred,
will exceed 75 percent of (1) the total amount
so far allotted to the contract by the Government or, (2) if this is a cost-sharing contract, the amount then allotted to the contract by the Government plus the Contractor’s corresponding share. The notice shall
state the estimated amount of additional
funds required to continue performance for
the period specified in the Schedule.
(d) Sixty days before the end of the period
specified in the Schedule, the Contractor
shall notify the Contracting Officer in writing of the estimated amount of additional
funds, if any, required to continue timely

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52.232–23

48 CFR Ch. 1 (10–1–03 Edition)

performance under the contract or for any
further period specified in the Schedule or
otherwise agreed upon, and when the funds
will be required.
(e) If, after notification, additional funds
are not allotted by the end of the period
specified in the Schedule or another agreedupon date, upon the Contractor’s written request the Contracting Officer will terminate
this contract on that date in accordance
with the provisions of the Termination
clause of this contract. If the Contractor estimates that the funds available will allow it
to continue to discharge its obligations beyond that date, it may specify a later date in
its request, and the Contracting Officer may
terminate this contract on that later date.
(f) Except as required by other provisions
of this contract, specifically citing and stated to be an exception to this clause—
(1) The Government is not obligated to reimburse the Contractor for costs incurred in
excess of the total amount allotted by the
Government to this contract; and
(2) The Contractor is not obligated to continue performance under this contract (including actions under the Termination
clause of this contract) or otherwise incur
costs in excess of (i) the amount then allotted to the contract by the Government or,
(ii) if this is a cost-sharing contract, the
amount then allotted by the Government to
the contract plus the Contractor’s corresponding share, until the Contracting Officer notifies the Contractor in writing that
the amount allotted by the Government has
been increased and specifies an increased
amount, which shall then constitute the
total amount allotted by the Government to
this contract.
(g) The estimated cost shall be increased to
the extent that (1) the amount allotted by
the Government or, (2) if this is a cost-sharing contract, the amount then allotted by
the Government to the contract plus the
Contractor’s corresponding share, exceeds
the estimated cost specified in the Schedule.
If this is a cost-sharing contract, the increase shall be allocated in accordance with
the formula specified in the Schedule.
(h) No notice, communication, or representation in any form other than that specified
in subparagraph (f)(2) above, or from any person other than the Contracting Officer, shall
affect the amount allotted by the Government to this contract. In the absence of the
specified notice, the Government is not obligated to reimburse the Contractor for any
costs in excess of the total amount allotted
by the Government to this contract, whether
incurred during the course of the contract or
as a result of termination.
(i) When and to the extent that the amount
allotted by the Government to the contract
is increased, any costs the Contractor incurs
before the increase that are in excess of (1)
the amount previously allotted by the Gov-

ernment or, (2) if this is a cost-sharing contract, the amount previously allotted by the
Government to the contract plus the Contractor’s corresponding share, shall be allowable to the same extent as if incurred afterward, unless the Contracting Officer issues a
termination or other notice and directs that
the increase is solely to cover termination or
other specified expenses.
(j) Change orders shall not be considered
an authorization to exceed the amount allotted by the Government specified in the
Schedule, unless they contain a statement
increasing the amount allotted.
(k) Nothing in this clause shall affect the
right of the Government to terminate this
contract. If this contract is terminated, the
Government and the Contractor shall negotiate an equitable distribution of all property produced or purchased under the contract, based upon the share of costs incurred
by each.
(l) If the Government does not allot sufficient funds to allow completion of the work,
the Contractor is entitled to a percentage of
the fee specified in the Schedule equalling
the percentage of completion of the work
contemplated by this contract.

(End of clause)
52.232–23

Assignment of Claims.

As prescribed in 32.806(a)(1), insert
the following clause:
ASSIGNMENT OF CLAIMS (JAN 1986)
(a) The Contractor, under the Assignment
of Claims Act, as amended, 31 U.S.C. 3727, 41
U.S.C. 15 (hereafter referred to as the Act),
may assign its rights to be paid amounts due
or to become due as a result of the performance of this contract to a bank, trust company, or other financing institution, including any Federal lending agency. The assignee
under such an assignment may thereafter
further assign or reassign its right under the
original assignment to any type of financing
institution described in the preceding sentence.
(b) Any assignment or reassignment authorized under the Act and this clause shall
cover all unpaid amounts payable under this
contract, and shall not be made to more than
one party, except that an assignment or reassignment may be made to one party as
agent or trustee for two or more parties participating in the financing of this contract.
(c) The Contractor shall not furnish or disclose to any assignee under this contract any
classified document (including this contract)
or information related to work under this
contract until the Contracting Officer authorizes such action in writing.

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(End of clause)
Alternate I (APR 1984). If a no-setoff
commitment is to be included in the
contract (see 32.801 and 32.803(d)), add
the following sentence at the end of
paragraph (a) of the basic clause:
Unless otherwise stated in this contract,
payments to an assignee of any amounts due
or to become due under this contract shall
not, to the extent specified in the Act, be
subject to reduction or setoff.
[48 FR 42478, Sept. 19, 1983, as amended at 51
FR 2667, Jan. 17, 1986]

52.232–24 Prohibition of Assignment of
Claims.
As prescribed in 32.806(b), insert the
following clause:
PROHIBITION OF ASSIGNMENT OF CLAIMS (JAN
1986)
The assignment of claims under the Assignment of Claims Act of 1940, as amended,
31 U.S.C. 3727, 41 U.S.C. 15, is prohibited for
this contract.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 51
FR 2667, Jan. 17, 1986]

52.232–25 Prompt payment.
As prescribed in 32.908(c), insert the
following clause:
PROMPT PAYMENT (FEB 2002)
Notwithstanding any other payment clause
in this contract, the Government will make
invoice payments under the terms and conditions specified in this clause. The Government considers payment as being made on
the day a check is dated or the date of an
electronic funds transfer (EFT). Definitions
of pertinent terms are set forth in sections
2.101, 32.001, and 32.902 of the Federal Acquisition Regulation. All days referred to in this
clause are calendar days, unless otherwise
specified. (However, see paragraph (a)(4) of
this clause concerning payments due on Saturdays, Sundays, and legal holidays.)
(a) Invoice payments—(1) Due date. (i) Except as indicated in paragraphs (a)(2) and (c)
of this clause, the due date for making invoice payments by the designated payment
office is the later of the following two
events:
(A) The 30th day after the designated billing office receives a proper invoice from the
Contractor (except as provided in paragraph
(a)(1)(ii) of this clause).
(B) The 30th day after Government acceptance of supplies delivered or services per-

formed. For a final invoice, when the payment amount is subject to contract settlement actions, acceptance is deemed to occur
on the effective date of the contract settlement.
(ii) If the designated billing office fails to
annotate the invoice with the actual date of
receipt at the time of receipt, the invoice
payment due date is the 30th day after the
date of the Contractor’s invoice, provided
the designated billing office receives a proper invoice and there is no disagreement over
quantity, quality, or Contractor compliance
with contract requirements.
(2) Certain food products and other payments.
(i) Due dates on Contractor invoices for
meat, meat food products, or fish; perishable
agricultural commodities; and dairy products, edible fats or oils, and food products
prepared from edible fats or oils are—
(A) For meat or meat food products, as defined in section 2(a)(3) of the Packers and
Stockyard Act of 1921 (7 U.S.C. 182(3)), and as
further defined in Pub. L. 98–181, including
any edible fresh or frozen poultry meat, any
perishable poultry meat food product, fresh
eggs, and any perishable egg product, as
close as possible to, but not later than, the
7th day after product delivery.
(B) For fresh or frozen fish, as defined in
section 204(3) of the Fish and Seafood Promotion Act of 1986 (16 U.S.C. 4003(3)), as close
as possible to, but not later than, the 7th day
after product delivery.
(C) For perishable agricultural commodities, as defined in section 1(4) of the Perishable Agricultural Commodities Act of 1930 (7
U.S.C. 499a(4)), as close as possible to, but
not later than, the 10th day after product delivery, unless another date is specified in the
contract.
(D) For dairy products, as defined in section 111(e) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4502(e)), edible fats
or oils, and food products prepared from edible fats or oils, as close as possible to, but
not later than, the 10th day after the date on
which a proper invoice has been received.
Liquid milk, cheese, certain processed cheese
products, butter, yogurt, ice cream, mayonnaise, salad dressings, and other similar
products, fall within this classification.
Nothing in the Act limits this classification
to refrigerated products. When questions
arise regarding the proper classification of a
specific product, prevailing industry practices will be followed in specifying a contract payment due date. The burden of proof
that a classification of a specific product is,
in fact, prevailing industry practice is upon
the Contractor making the representation.
(ii) If the contract does not require submission of an invoice for payment (e.g., periodic
lease payments), the due date will be as specified in the contract.

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52.232–25

48 CFR Ch. 1 (10–1–03 Edition)

(3) Contractor’s invoice. The Contractor
shall prepare and submit invoices to the designated billing office specified in the contract. A proper invoice must include the
items listed in paragraphs (a)(3)(i) through
(a)(3)(x) of this clause. If the invoice does not
comply with these requirements, the designated billing office will return it within 7
days after receipt (3 days for meat, meat
food products, or fish; 5 days for perishable
agricultural commodities, dairy products,
edible fats or oils, and food products prepared from edible fats or oils), with the reasons why it is not a proper invoice. The Government will take into account untimely notification when computing any interest penalty owed the Contractor.
(i) Name and address of the Contractor.
(ii) Invoice date and invoice number. (The
Contractor should date invoices as close as
possible to the date of the mailing or transmission.)
(iii) Contract number or other authorization for supplies delivered or services performed (including order number and contract
line item number).
(iv) Description, quantity, unit of measure,
unit price, and extended price of supplies delivered or services performed.
(v) Shipping and payment terms (e.g., shipment number and date of shipment, discount
for prompt payment terms). Bill of lading
number and weight of shipment will be
shown for shipments on Government bills of
lading.
(vi) Name and address of Contractor official to whom payment is to be sent (must be
the same as that in the contract or in a proper notice of assignment).
(vii) Name (where practicable), title, phone
number, and mailing address of person to notify in the event of a defective invoice.
(viii) Taxpayer Identification Number
(TIN). The Contractor shall include its TIN
on the invoice only if required elsewhere in
this contract.
(ix) Electronic funds transfer (EFT) banking information.
(A) The Contractor shall include EFT
banking information on the invoice only if
required elsewhere in this contract.
(B) If EFT banking information is not required to be on the invoice, in order for the
invoice to be a proper invoice, the Contractor shall have submitted correct EFT
banking information in accordance with the
applicable solicitation provision (e.g., 52.232–
38, Submission of Electronic Funds Transfer
Information with Offer), contract clause
(e.g., 52.232–33, Payment by Electronic Funds
Transfer—Central Contractor Registration,
or 52.232–34, Payment by Electronic Funds
Transfer—Other Than Central Contractor
Registration), or applicable agency procedures.

(C) EFT banking information is not required if the Government waived the requirement to pay by EFT.
(x) Any other information or documentation required by the contract (e.g., evidence
of shipment).
(4) Interest penalty. The designated payment office will pay an interest penalty
automatically, without request from the
Contractor, if payment is not made by the
due date and the conditions listed in paragraphs (a)(4)(i) through (a)(4)(iii) of this
clause are met, if applicable. However, when
the due date falls on a Saturday, Sunday, or
legal holiday, the designated payment office
may make payment on the following working day without incurring a late payment interest penalty.
(i) The designated billing office received a
proper invoice.
(ii) The Government processed a receiving
report or other Government documentation
authorizing payment, and there was no disagreement over quantity, quality, or Contractor compliance with any contract term
or condition.
(iii) In the case of a final invoice for any
balance of funds due the Contractor for supplies delivered or services performed, the
amount was not subject to further contract
settlement actions between the Government
and the Contractor.
(5) Computing penalty amount. The Government will compute the interest penalty in
accordance with the Office of Management
and Budget prompt payment regulations at 5
CFR part 1315.
(i) For the sole purpose of computing an interest penalty that might be due the Contractor, Government acceptance is deemed
to occur constructively on the 7th day (unless otherwise specified in this contract)
after the Contractor delivers the supplies or
performs the services in accordance with the
terms and conditions of the contract, unless
there is a disagreement over quantity, quality, or Contractor compliance with a contract provision. If actual acceptance occurs
within the constructive acceptance period,
the Government will base the determination
of an interest penalty on the actual date of
acceptance. The constructive acceptance requirement does not, however, compel Government officials to accept supplies or services, perform contract administration functions, or make payment prior to fulfilling
their responsibilities.
(ii) The prompt payment regulations at 5
CFR 1315.10(c) do not require the Government to pay interest penalties if payment
delays are due to disagreement between the
Government and the Contractor over the
payment amount or other issues involving
contract compliance, or on amounts temporarily withheld or retained in accordance
with the terms of the contract. The Government and the Contractor shall resolve claims

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52.232–26

involving disputes and any interest that may
be payable in accordance with the clause at
FAR 52.233–1, Disputes.
(6) Discounts for prompt payment. The designated payment office will pay an interest
penalty automatically, without request from
the Contractor, if the Government takes a
discount for prompt payment improperly.
The Government will calculate the interest
penalty in accordance with the prompt payment regulations at 5 CFR part 1315.
(7) Additional interest penalty. (i) The designated payment office will pay a penalty
amount, calculated in accordance with the
prompt payment regulations at 5 CFR part
1315 in addition to the interest penalty
amount only if—
(A) The Government owes an interest penalty of $1 or more;
(B) The designated payment office does not
pay the interest penalty within 10 days after
the date the invoice amount is paid; and
(C) The Contractor makes a written demand to the designated payment office for
additional penalty payment, in accordance
with paragraph (a)(7)(ii) of this clause, postmarked not later than 40 days after the invoice amount is paid.
(ii)(A) The Contractor shall support written demands for additional penalty payments with the following data. The Government will not request any additional data.
The Contractor shall—
(1) Specifically assert that late payment
interest is due under a specific invoice, and
request payment of all overdue late payment
interest penalty and such additional penalty
as may be required;
(2) Attach a copy of the invoice on which
the unpaid late payment interest is due; and
(3) State that payment of the principal has
been received, including the date of receipt.
(B) If there is no postmark or the postmark is illegible—
(1) The designated payment office that receives the demand will annotate it with the
date of receipt, provided the demand is received on or before the 40th day after payment was made; or
(2) If the designated payment office fails to
make the required annotation, the Government will determine the demand’s validity
based on the date the Contractor has placed
on the demand, provided such date is no
later than the 40th day after payment was
made.
(iii) The additional penalty does not apply
to payments regulated by other Government
regulations (e.g., payments under utility
contracts subject to tariffs and regulation).
(b) Contract financing payment. If this contract provides for contract financing, the
Government will make contract financing
payments in accordance with the applicable
contract financing clause.
(c) Fast payment procedure due dates. If this
contract contains the clause at 52.213–1, Fast

Payment Procedure, payments will be made
within 15 days after the date of receipt of the
invoice.
(d) Overpayments. If the Contractor becomes aware of a duplicate payment or that
the Government has otherwise overpaid on
an invoice payment, the Contractor shall immediately notify the Contracting Officer and
request instructions for disposition of the
overpayment.

(End of clause)
Alternate I (Feb 2002). As prescribed in
32.908(c)(3), add the following paragraph
(e) to the basic clause:
(e) Invoices for interim payments. For interim payments under this cost-reimbursement contract for services—
(1) Paragraphs (a)(2), (a)(3), (a)(4)(ii),
(a)(4)(iii), and (a)(5)(i) do not apply;
(2) For purposes of computing late payment interest penalties that may apply, the
due date for payment is the 30th day after
the designated billing office receives a proper invoice; and
(3) The contractor shall submit invoices for
interim payments in accordance with paragraph (a) of FAR 52.216–7, Allowable Cost and
Payment. If the invoice does not comply
with contract requirements, it will be returned within 7 days after the date the designated billing office received the invoice.
[66 FR 65361, Dec. 18, 2001]
EFFECTIVE DATE NOTE: At 68 FR 56684, Oct.
1, 2003, § 52.232–25 was amended by revising
the date of the clause and paragraph (d), effective Oct. 31, 2003. For the convenience of
the user, the revised text is set forth below:
52.232–25

*

Prompt Payment.

*

*

*

Prompt Payment (Oct. 2003).

*

*

*

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*

(d) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice payment or that the Government has otherwise overpaid on a contract
financing or invoice payment, the Contractor shall immediately notify the Contracting Officer and request instructions for
disposition of the overpayment.
(End of clause)

*

*

*

*

*

52.232–26 Prompt payment for fixedprice architect-engineer contracts.
As prescribed in 32.908(a), insert the
following clause:

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48 CFR Ch. 1 (10–1–03 Edition)

PROMPT PAYMENT FOR FIXED-PRICE
ARCHITECT-ENGINEER CONTRACTS (FEB 2002)
Notwithstanding any other payment terms
in this contract, the Government will make
invoice payments under the terms and conditions specified in this clause. The Government considers payment as being made on
the day a check is dated or the date of an
electronic funds transfer. Definitions of pertinent terms are set forth in sections 2.101,
32.001, and 32.902 of the Federal Acquisition
Regulation. All days referred to in this
clause are calendar days, unless otherwise
specified. (However, see paragraph (a)(3) of
this clause concerning payments due on Saturdays, Sundays, and legal holidays.)
(a) Invoice payments—(1) Due date. The due
date for making invoice payments is—
(i) For work or services completed by the
Contractor, the later of the following two
events:
(A) The 30th day after the designated billing office receives a proper invoice from the
Contractor (except as provided in paragraph
(a)(1)(iii) of this clause).
(B) The 30th day after Government acceptance of the work or services completed by
the Contractor. For a final invoice, when the
payment amount is subject to contract settlement actions (e.g., release of claims), acceptance is deemed to occur on the effective
date of the settlement.
(ii) The due date for progress payments is
the 30th day after Government approval of
Contractor estimates of work or services accomplished.
(iii) If the designated billing office fails to
annotate the invoice or payment request
with the actual date of receipt at the time of
receipt, the payment due date is the 30th day
after the date of the Contractor’s invoice or
payment request, provided the designated
billing office receives a proper invoice or
payment request and there is no disagreement over quantity, quality, or Contractor
compliance with contract requirements.
(2) Contractor’s invoice. The Contractor
shall prepare and submit invoices to the designated billing office specified in the contract. A proper invoice must include the
items listed in paragraphs (a)(2)(i) through
(a)(2)(x) of this clause. If the invoice does not
comply with these requirements, the designated billing office will return it within 7
days after receipt, with the reasons why it is
not a proper invoice. When computing any
interest penalty owed the Contractor, the
Government will take into account if the
Government notifies the Contractor of an
improper invoice in an untimely manner.
(i) Name and address of the Contractor.
(ii) Invoice date and invoice number. (The
Contractor should date invoices as close as
possible to the date of mailing or transmission.)

(iii) Contract number or other authorization for work or services performed (including order number and contract line item
number).
(iv) Description of work or services performed.
(v) Delivery and payment terms (e.g., discount for prompt payment terms).
(vi) Name and address of Contractor official to whom payment is to be sent (must be
the same as that in the contract or in a proper notice of assignment).
(vii) Name (where practicable), title, phone
number, and mailing address of person to notify in the event of a defective invoice.
(viii) Taxpayer Identification Number
(TIN). The Contractor shall include its TIN
on the invoice only if required elsewhere in
this contract.
(ix) Electronic funds transfer (EFT) banking information.
(A) The Contractor shall include EFT
banking information on the invoice only if
required elsewhere in this contract.
(B) If EFT banking information is not required to be on the invoice, in order for the
invoice to be a proper invoice, the Contractor shall have submitted correct EFT
banking information in accordance with the
applicable solicitation provision (e.g., 52.232–
38, Submission of Electronic Funds Transfer
Information with Offer), contract clause
(e.g., 52.232–33, Payment by Electronic Funds
Transfer—Central Contractor Registration,
or 52.232–34,Payment by Electronic Funds
Transfer—Other Than Central Contractor
Registration), or applicable agency procedures.
(C) EFT banking information is not required if the Government waived the requirement to pay by EFT.
(x) Any other information or documentation required by the contract.
(3) Interest penalty. The designated payment office will pay an interest penalty
automatically, without request from the
Contractor, if payment is not made by the
due date and the conditions listed in paragraphs (a)(3)(i) through (a)(3)(iii) of this
clause are met, if applicable. However, when
the due date falls on a Saturday, Sunday, or
legal holiday, the designated payment office
may make payment on the following working day without incurring a late payment interest penalty.
(i) The designated billing office received a
proper invoice.
(ii) The Government processed a receiving
report or other Government documentation
authorizing payment and there was no disagreement over quantity, quality, Contractor compliance with any contract term
or condition, or requested progress payment
amount.
(iii) In the case of a final invoice for any
balance of funds due the Contractor for work
or services performed, the amount was not

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subject to further contract settlement actions between the Government and the Contractor.
(4) Computing penalty amount. The Government will compute the interest penalty in
accordance with the Office of Management
and Budget prompt payment regulations at 5
CFR part 1315.
(i) For the sole purpose of computing an interest penalty that might be due the Contractor, Government acceptance or approval
is deemed to occur constructively as shown
in paragraphs (a)(4)(i)(A) and (B) of this
clause. If actual acceptance or approval occurs within the constructive acceptance or
approval period, the Government will base
the determination of an interest penalty on
the actual date of acceptance or approval.
Constructive acceptance or constructive approval requirements do not apply if there is
a disagreement over quantity, quality, Contractor compliance with a contract provision,
or
requested
progress
payment
amounts. These requirements also do not
compel Government officials to accept work
or services, approve Contractor estimates,
perform contract administration functions,
or make payment prior to fulfilling their responsibilities.
(A) For work or services completed by the
Contractor,
Government
acceptance
is
deemed to occur constructively on the 7th
day after the Contractor completes the work
or services in accordance with the terms and
conditions of the contract.
(B) For progress payments, Government
approval is deemed to occur on the 7th day
after the designated billing office receives
the Contractor estimates.
(ii) The prompt payment regulations at 5
CFR 1315.10(c) do not require the Government to pay interest penalties if payment
delays are due to disagreement between the
Government and the Contractor over the
payment amount or other issues involving
contract compliance, or on amounts temporarily withheld or retained in accordance
with the terms of the contract. The Government and the Contractor shall resolve claims
involving disputes, and any interest that
may be payable in accordance with the
clause at FAR 52.233–1, Disputes.
(5) Discounts for prompt payment. The designated payment office will pay an interest
penalty automatically, without request from
the Contractor, if the Government takes a
discount for prompt payment improperly.
The Government will calculate the interest
penalty in accordance with 5 CFR part 1315.
(6) Additional interest penalty. (i) The designated payment office will pay a penalty
amount, calculated in accordance with the
prompt payment regulations at 5 CFR part
1315, in addition to the interest penalty
amount only if—
(A) The Government owes an interest penalty of $1 or more;

(B) The designated payment office does not
pay the interest penalty within 10 days after
the date the invoice amount is paid; and
(C) The contractor makes a written demand to the designated payment office for
additional penalty payment, in accordance
with paragraph (a)(6)(ii) of this clause, postmarked not later than 40 days after the date
the invoice amount is paid.
(ii)(A) The Contractor shall support written demands for additional penalty payments with the following data. The Government will not request any additional data.
The Contractor shall—
(1) Specifically assert that late payment
interest is due under a specific invoice, and
request payment of all overdue late payment
interest penalty and such additional penalty
as may be required;
(2) Attach a copy of the invoice on which
the unpaid late payment interest is due; and
(3) State that payment of the principal has
been received, including the date of receipt.
(B) If there is no postmark or the postmark is illegible—
(1) The designated payment office that receives the demand will annotate it with the
date of receipt, provided the demand is received on or before the 40th day after payment was made; or
(2) If the designated payment office fails to
make the required annotation, the Government will determine the demand’s validity
based on the date the Contractor has placed
on the demand, provided such date is no
later than the 40th day after payment was
made.
(iii) The additional penalty does not apply
to payments regulated by other Government
regulations (e.g., payments under utility
contracts subject to tariffs and regulation).
(b) Contract financing payments. If this contract provides for contract financing, the
Government will make contract financing
payments in accordance with the applicable
contract financing clause.
(c) Overpayments. If the Contractor becomes aware of a duplicate payment or that
the Government has otherwise overpaid on
an invoice payment, the Contractor shall immediately notify the Contracting Officer and
request instructions for disposition of the
overpayment.

(End of clause)
[66 FR 65363, Dec. 18, 2001]
EFFECTIVE DATE NOTE: At 68 FR 56684, Oct.
1, 2003, § 52.232–26 was amended by revising
the date of the clause and paragraph (c), effective Oct. 31, 2003. For the convenience of
the user, the revised text is set forth below:

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52.232–27

48 CFR Ch. 1 (10–1–03 Edition)

52.232–26 Prompt Payment for Fixed-Price
Architect-Engineer Contracts.

*

*

*

*

*

Prompt Payment for Fixed-Price ArchitectEngineer Contracts (Oct. 2003).

*

*

*

*

*

(c) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice payment or that the Government has otherwise overpaid on a contract
financing or invoice payment, the Contractor shall immediately notify the Contracting Officer and request instructions for
disposition of the overpayment.
(End of clause)

52.232–27 Prompt payment for construction contracts.
As prescribed in 32.908(b), insert the
following clause:
PROMPT PAYMENT FOR CONSTRUCTION
CONTRACTS (FEB 2002)
Notwithstanding any other payment terms
in this contract, the Government will make
invoice payments under the terms and conditions specified in this clause. The Government considers payment as being made on
the day a check is dated or the date of an
electronic funds transfer.Definitions of pertinent terms are set forth in sections 2.101,
32.001, and 32.902 of the Federal Acquisition
Regulation. All days referred to in this
clause are calendar days, unless otherwise
specified. (However, see paragraph (a)(3) concerning payments due on Saturdays, Sundays, and legal holidays.)
(a) Invoice payments—(1) Types of invoice
payments. For purposes of this clause, there
are several types of invoice payments that
may occur under this contract, as follows:
(i) Progress payments, if provided for elsewhere in this contract, based on Contracting
Officer approval of the estimated amount
and value of work or services performed, including payments for reaching milestones in
any project.
(A) The due date for making such payments is 14 days after the designated billing
office receives a proper payment request. If
the designated billing office fails to annotate
the payment request with the actual date of
receipt at the time of receipt, the payment
due date is the 14th day after the date of the
Contractor’s payment request, provided the
designated billing office receives a proper
payment request and there is no disagreement over quantity, quality, or Contractor
compliance with contract requirements.
(B) The due date for payment of any
amounts retained by the Contracting Officer
in accordance with the clause at 52.232–5,

Payments Under Fixed-Price Construction
Contracts, is as specified in the contract or,
if not specified, 30 days after approval by the
Contracting Officer for release to the Contractor.
(ii) Final payments based on completion
and acceptance of all work and presentation
of release of all claims against the Government arising by virtue of the contract, and
payments for partial deliveries that have
been accepted by the Government (e.g., each
separate building, public work, or other division of the contract for which the price is
stated separately in the contract).
(A) The due date for making such payments is the later of the following two
events:
(1) The 30th day after the designated billing office receives a proper invoice from the
Contractor.
(2) The 30th day after Government acceptance of the work or services completed by
the Contractor. For a final invoice when the
payment amount is subject to contract settlement actions (e.g., release of claims), acceptance is deemed to occur on the effective
date of the contract settlement.
(B) If the designated billing office fails to
annotate the invoice with the date of actual
receipt at the time of receipt, the invoice
payment due date is the 30th day after the
date of the Contractor’s invoice, provided
the designated billing office receives a proper invoice and there is no disagreement over
quantity, quality, or Contractor compliance
with contract requirements.
(2) Contractor’s invoice. The Contractor
shall prepare and submit invoices to the designated billing office specified in the contract. A proper invoice must include the
items listed in paragraphs (a)(2)(i) through
(a)(2)(xi) of this clause. If the invoice does
not comply with these requirements, the designated billing office must return it within 7
days after receipt, with the reasons why it is
not a proper invoice. When computing any
interest penalty owed the Contractor, the
Government will take into account if the
Government notifies the Contractor of an
improper invoice in an untimely manner.
(i) Name and address of the Contractor.
(ii) Invoice date and invoice number. (The
Contractor should date invoices as close as
possible to the date of mailing or transmission.)
(iii) Contract number or other authorization for work or services performed (including order number and contract line item
number).
(iv) Description of work or services performed.
(v) Delivery and payment terms (e.g., discount for prompt payment terms).
(vi) Name and address of Contractor official to whom payment is to be sent (must be
the same as that in the contract or in a proper notice of assignment).

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(vii) Name (where practicable), title, phone
number, and mailing address of person to notify in the event of a defective invoice.
(viii) For payments described in paragraph
(a)(1)(i) of this clause, substantiation of the
amounts requested and certification in accordance with the requirements of the clause
at 52.232–5, Payments Under Fixed-Price Construction Contracts.
(ix) Taxpayer Identification Number (TIN).
The Contractor shall include its TIN on the
invoice only if required elsewhere in this
contract.
(x) Electronic funds transfer (EFT) banking information.
(A) The Contractor shall include EFT
banking information on the invoice only if
required elsewhere in this contract.
(B) If EFT banking information is not required to be on the invoice, in order for the
invoice to be a proper invoice, the Contractor shall have submitted correct EFT
banking information in accordance with the
applicable solicitation provision (e.g., 52.232–
38, Submission of Electronic Funds Transfer
Information with Offer), contract clause
(e.g., 52.232–33, Payment by Electronic Funds
Transfer—Central Contractor Registration,
or 52.232–34, Payment by Electronic Funds
Transfer—Other Than Central Contractor
Registration), or applicable agency procedures.
(C) EFT banking information is not required if the Government waived the requirement to pay by EFT.
(xi) Any other information or documentation required by the contract.
(3) Interest penalty. The designated payment office will pay an interest penalty
automatically, without request from the
Contractor, if payment is not made by the
due date and the conditions listed in paragraphs (a)(3)(i) through (a)(3)(iii) of this
clause are met, if applicable. However, when
the due date falls on a Saturday, Sunday, or
legal holiday, the designated payment office
may make payment on the following working day without incurring a late payment interest penalty.
(i) The designated billing office received a
proper invoice.
(ii) The Government processed a receiving
report or other Government documentation
authorizing payment and there was no disagreement over quantity, quality, Contractor compliance with any contract term
or condition, or requested progress payment
amount.
(iii) In the case of a final invoice for any
balance of funds due the Contractor for work
or services performed, the amount was not
subject to further contract settlement actions between the Government and the Contractor.
(4) Computing penalty amount. The Government will compute the interest penalty in
accordance with the Office of Management

and Budget prompt payment regulations at 5
CFR part 1315.
(i) For the sole purpose of computing an interest penalty that might be due the Contractor for payments described in paragraph
(a)(1)(ii) of this clause, Government acceptance or approval is deemed to occur constructively on the 7th day after the Contractor has completed the work or services
in accordance with the terms and conditions
of the contract. If actual acceptance or approval occurs within the constructive acceptance or approval period, the Government
will base the determination of an interest
penalty on the actual date of acceptance or
approval. Constructive acceptance or constructive approval requirements do not apply
if there is a disagreement over quantity,
quality, or Contractor compliance with a
contract provision. These requirements also
do not compel Government officials to accept work or services, approve Contractor estimates, perform contract administration
functions, or make payment prior to fulfilling their responsibilities.
(ii) The prompt payment regulations at 5
CFR 1315.10(c) do not require the Government to pay interest penalties if payment
delays are due to disagreement between the
Government and the Contractor over the
payment amount or other issues involving
contract compliance, or on amounts temporarily withheld or retained in accordance
with the terms of the contract. The Government and the Contractor shall resolve claims
involving disputes, and any interest that
may be payable in accordance with the
clause at FAR 52.233–1, Disputes.
(5) Discounts for prompt payment. The designated payment office will pay an interest
penalty automatically, without request from
the Contractor, if the Government takes a
discount for prompt payment improperly.
The Government will calculate the interest
penalty in accordance with the prompt payment regulations at 5 CFR part 1315.
(6) Additional interest penalty. (i) The designated payment office will pay a penalty
amount, calculated in accordance with the
prompt payment regulations at 5 CFR part
1315 in addition to the interest penalty
amount only if—
(A) The Government owes an interest penalty of $1 or more;
(B) The designated payment office does not
pay the interest penalty within 10 days after
the date the invoice amount is paid; and
(C) The Contractor makes a written demand to the designated payment office for
additional penalty payment, in accordance
with paragraph (a)(6)(ii) of this clause, postmarked not later than 40 days after the date
the invoice amount is paid.

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52.232–27

48 CFR Ch. 1 (10–1–03 Edition)

(ii)(A) The Contractor shall support written demands for additional penalty payments with the following data. The Government will not request any additional data.
The Contractor shall—
(1) Specifically assert that late payment
interest is due under a specific invoice, and
request payment of all overdue late payment
interest penalty and such additional penalty
as may be required;
(2) Attach a copy of the invoice on which
the unpaid late payment interest was due;
and
(3) State that payment of the principal has
been received, including the date of receipt.
(B) If there is no postmark or the postmark is illegible—
(1) The designated payment office that receives the demand will annotate it with the
date of receipt provided the demand is received on or before the 40th day after payment was made; or
(2) If the designated payment office fails to
make the required annotation, the Government will determine the demand’s validity
based on the date the Contractor has placed
on the demand, provided such date is no
later than the 40th day after payment was
made.
(b) Contract financing payments. If this contract provides for contract financing, the
Government will make contract financing
payments in accordance with the applicable
contract financing clause.
(c) Subcontract clause requirements. The
Contractor shall include in each subcontract
for property or services (including a material
supplier) for the purpose of performing this
contract the following:
(1) Prompt payment for subcontractors. A
payment clause that obligates the Contractor to pay the subcontractor for satisfactory performance under its subcontract not
later than 7 days from receipt of payment
out of such amounts as are paid to the Contractor under this contract.
(2) Interest for subcontractors. An interest
penalty clause that obligates the Contractor
to pay to the subcontractor an interest penalty for each payment not made in accordance with the payment clause—
(i) For the period beginning on the day
after the required payment date and ending
on the date on which payment of the amount
due is made; and
(ii) Computed at the rate of interest established by the Secretary of the Treasury, and
published in the FEDERAL REGISTER, for interest payments under section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611) in
effect at the time the Contractor accrues the
obligation to pay an interest penalty.
(3) Subcontractor clause flowdown. A clause
requiring each subcontractor tou
(i) Include a payment clause and an interest penalty clause conforming to the stand-

ards set forth in paragraphs (c)(1) and (c)(2)
of this clause in each of its subcontracts; and
(ii) Require each of its subcontractors to
include such clauses in their subcontracts
with each lower-tier subcontractor or supplier.
(d) Subcontract clause interpretation. The
clauses required by paragraph (c) of this
clause shall not be construed to impair the
right of the Contractor or a subcontractor at
any tier to negotiate, and to include in their
subcontract, provisions that—
(1) Retainage permitted. Permit the Contractor or a subcontractor to retain (without
cause) a specified percentage of each
progress payment otherwise due to a subcontractor for satisfactory performance under
the subcontract without incurring any obligation to pay a late payment interest penalty, in accordance with terms and conditions agreed to by the parties to the subcontract, giving such recognition as the parties deem appropriate to the ability of a subcontractor to furnish a performance bond
and a payment bond;
(2) Withholding permitted. Permit the Contractor or subcontractor to make a determination that part or all of the subcontractor’s request for payment may be withheld in
accordance with the subcontract agreement;
and
(3) Withholding requirements. Permit such
withholding without incurring any obligation to pay a late payment penalty if—
(i) A notice conforming to the standards of
paragraph (g) of this clause previously has
been furnished to the subcontractor; and
(ii) The Contractor furnishes to the Contracting Officer a copy of any notice issued
by a Contractor pursuant to paragraph
(d)(3)(i) of this clause.
(e) Subcontractor withholding procedures. If a
Contractor, after making a request for payment to the Government but before making
a payment to a subcontractor for the subcontractor’s performance covered by the
payment request, discovers that all or a portion of the payment otherwise due such subcontractor is subject to withholding from
the subcontractor in accordance with the
subcontract agreement, then the Contractor
shall—
(1) Subcontractor notice. Furnish to the subcontractor a notice conforming to the standards of paragraph (g) of this clause as soon as
practicable upon ascertaining the cause giving rise to a withholding, but prior to the
due date for subcontractor payment;
(2) Contracting Officer notice. Furnish to the
Contracting Officer, as soon as practicable, a
copy of the notice furnished to the subcontractor pursuant to paragraph (e)(1) of this
clause;
(3) Subcontractor progress payment reduction.
Reduce the subcontractor’s progress payment by an amount not to exceed the

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amount specified in the notice of withholding furnished under paragraph (e)(1) of
this clause;
(4) Subsequent subcontractor payment. Pay
the subcontractor as soon as practicable
after the correction of the identified subcontract performance deficiency, and—
(i) Make such payment within—
(A) Seven days after correction of the identified subcontract performance deficiency
(unless the funds therefor must be recovered
from the Government because of a reduction
under paragraph (e)(5)(i)) of this clause; or
(B) Seven days after the Contractor recovers such funds from the Government; or
(ii) Incur an obligation to pay a late payment interest penalty computed at the rate
of interest established by the Secretary of
the Treasury, and published in the FEDERAL
REGISTER, for interest payments under section 12 of the Contracts Disputes Act of 1978
(41 U.S.C. 611) in effect at the time the Contractor accrues the obligation to pay an interest penalty;
(5) Notice to Contracting Officer. Notify the
Contracting Officer upon—
(i) Reduction of the amount of any subsequent certified application for payment; or
(ii) Payment to the subcontractor of any
withheld amounts of a progress payment,
specifying—
(A) The amounts withheld under paragraph
(e)(1) of this clause; and
(B) The dates that such withholding began
and ended; and
(6) Interest to Government. Be obligated to
pay to the Government an amount equal to
interest on the withheld payments (computed in the manner provided in 31 U.S.C.
3903(c)(1)), from the 8th day after receipt of
the withheld amounts from the Government
until—
(i) The day the identified subcontractor
performance deficiency is corrected; or
(ii) The date that any subsequent payment
is reduced under paragraph (e)(5)(i) of this
clause.
(f) Third-party deficiency reports—(1) Withholding from subcontractor. If a Contractor,
after making payment to a first-tier subcontractor, receives from a supplier or subcontractor of the first-tier subcontractor (hereafter referred to as a ‘‘second-tier subcontractor’’) a written notice in accordance
with section 2 of the Act of August 24, 1935
(40 U.S.C. 270b, Miller Act), asserting a deficiency in such first-tier subcontractor’s performance under the contract for which the
Contractor may be ultimately liable, and the
Contractor determines that all or a portion
of future payments otherwise due such firsttier subcontractor is subject to withholding
in accordance with the subcontract agreement, the Contractor may, without incurring an obligation to pay an interest penalty
under paragraph (e)(6) of this clause—

(i) Furnish to the first-tier subcontractor a
notice conforming to the standards of paragraph (g) of this clause as soon as practicable
upon making such determination; and
(ii) Withhold from the first-tier subcontractor’s next available progress payment
or payments an amount not to exceed the
amount specified in the notice of withholding furnished under paragraph (f)(1)(i) of
this clause.
(2) Subsequent payment or interest charge. As
soon as practicable, but not later than 7 days
after receipt of satisfactory written notification that the identified subcontract performance deficiency has been corrected, the Contractor shall—
(i) Pay the amount withheld under paragraph (f)(1)(ii) of this clause to such first-tier
subcontractor; or
(ii) Incur an obligation to pay a late payment interest penalty to such first-tier subcontractor computed at the rate of interest
established by the Secretary of the Treasury,
and published in the FEDERAL REGISTER, for
interest payments under section 12 of the
Contracts DisputesAct of 1978 (41 U.S.C. 611)
in effect at the time the Contractor accrues
the obligation to pay an interest penalty.
(g) Written notice of subcontractor withholding. The Contractor shall issue a written
notice of any withholding to a subcontractor
(with a copy furnished to the Contracting Officer), specifying—
(1) The amount to be withheld;
(2) The specific causes for the withholding
under the terms of the subcontract; and
(3) The remedial actions to be taken by the
subcontractor in order to receive payment of
the amounts withheld.
(h) Subcontractor payment entitlement. The
Contractor may not request payment from
the Government of any amount withheld or
retained in accordance with paragraph (d) of
this clause until such time as the Contractor
has determined and certified to the Contracting Officer that the subcontractor is entitled to the payment of such amount.
(i) Prime-subcontractor disputes. A dispute
between the Contractor and subcontractor
relating to the amount or entitlement of a
subcontractor to a payment or a late payment interest penalty under a clause included in the subcontract pursuant to paragraph (c) of this clause does not constitute a
dispute to which the Government is a party.
The Government may not be interpleaded in
any judicial or administrative proceeding involving such a dispute.
(j) Preservation of prime-subcontractor rights.
Except as provided in paragraph (i) of this
clause, this clause shall not limit or impair
any contractual, administrative, or judicial
remedies otherwise available to the Contractor or a subcontractor in the event of a

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48 CFR Ch. 1 (10–1–03 Edition)

dispute involving late payment or nonpayment by the Contractor or deficient subcontract performance or nonperformance by
a subcontractor.
(k) Non-recourse for prime contractor interest
penalty. The Contractor’s obligation to pay
an interest penalty to a subcontractor pursuant to the clauses included in a subcontract
under paragraph (c) of this clause shall not
be construed to be an obligation of the Government for such interest penalty. A cost-reimbursement claim may not include any
amount for reimbursement of such interest
penalty.
(l) Overpayments. If the Contractor becomes
aware of a duplicate payment or that the
Government has otherwise overpaid on an invoice payment, the Contractor shall immediately notify the Contracting Officer and
request instructions for disposition of the
overpayment.

(End of clause)
[66 FR 65361, Dec. 18, 2001]
EFFECTIVE DATE NOTE: At 68 FR 56684, Oct.
1, 2003, § 52.232–27 was amended by revising
the date of the clause and paragraph (1), effective Oct. 31, 2003. For the convenince of
the user, the revised text is set forth below:
52.232–27 Prompt Payment for Construction
Contracts.

*

*

*

*

*

Prompt Payment for Construction Contracts
(Oct. 2003).

*

*

*

*

*

(1) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice payment or that the Government has otherwise overpaid on a contract
financing or invoice payment, the Contractor shall immediately notify the Contracting Officer and request instructions for
disposition of the overpayment.

52.232–28 Invitation to Propose Performance-Based Payments.
As prescribed in 32.1005(b)(1), insert
the following provision:

will incorporate the financing terms of the
successful offeror and the FAR clause, Performance-Based Payments, at FAR 52.232–32,
in any resulting contract.
(b) In the event of any conflict between the
terms proposed by the offeror and the terms
in the clause at FAR 52.232–32, PerformanceBased Payments, the terms of the clause at
FAR 52.232–32 shall govern.
(c) The Contracting Officer will not accept
the offeror’s proposed performance-based
payment financing if the financing does not
conform to the following limitations:
(1) The Government will make delivery
payments only for supplies delivered and accepted, or services rendered and accepted in
accordance with the payment terms of this
contract.
(2) The terms and conditions of the performance-based payments must—
(i) Comply with FAR 32.1004;
(ii) Be reasonable and consistent with all
other technical and cost information included in the offeror’s proposal; and
(iii) Their total shall not exceed 90 percent
of the contract price if on a whole contract
basis, or 90 percent of the delivery item price
if on a delivery item basis.
(3) The terms and conditions of the performance-based financing must be in the best
interests of the Government.
(d) The offeror’s proposal of performancebased payment financing shall include the
following:
(1) The proposed contractual language describing the performance-based payments
(see FAR 32.1004 for appropriate criteria for
establishing performance bases and performance-based finance payment amounts).
(2) A listing of—
(i) The projected performance-based payment dates and the projected payment
amounts; and
(ii) The projected delivery date and the
projected payment amount.
(3) Information addressing the Contractor’s
investment in the contract.
(e) Evaluation of the offeror’s proposed
prices and financing terms will include
whether the offeror’s proposed performancebased payment events and payment amounts
are reasonable and consistent with all other
terms and conditions of the offeror’s proposal.

(End of provision)

INVITATION TO PROPOSE PERFORMANCE-BASED
PAYMENTS (MAR 2000)
(a) The Government invites the offeror to
propose terms under which the Government
will make performance-based contract financing payments during contract performance. The Government will consider performance-based payment financing terms proposed by the offeror in the evaluation of the
offeror’s proposal. The Contracting Officer

Alternate I (Mar 2000). As prescribed
in FAR 32.1005(b)(2), add the following
paragraph (f) to the basic provision:
(f) The Government will adjust each proposed price to reflect the cost of providing
the proposed performance-based payments to
determine the total cost to the Government
of that particular combination of price and

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52.232–30

performance-based financing. The Government will make the adjustment using the
procedure described in FAR 32.205(c).
[65 FR 16285, Mar. 27, 2000]

52.232–29 Terms for Financing of Purchases of Commercial Items.
As prescribed in 32.206(b)(2), insert
the following clause:
TERMS FOR FINANCING OF PURCHASES OF
COMMERCIAL ITEMS (FEB 2002)
(a) Contractor entitlement to financing payments. The Contractor may request, and the
Government shall pay, a contract financing
payment as specified elsewhere in this contract when: the payment requested is properly due in accordance with this contract;
the supplies deliverable or services due under
the contract will be delivered or performed
in accordance with the contract; and there
has been no impairment or diminution of the
Government’s security under this contract.
(b) Special terms regarding termination for
cause. If this contract is terminated for
cause, the Contractor shall, on demand,
repay to the Government the amount of unliquidated contract financing payments. The
Government shall be liable for no payment
except as provided by the Termination for
Cause paragraph of the clause at 52.212–4,
Contract Terms and Conditions—Commercial Items.
(c) Security for Government financing. In the
event the Contractor fails to provide adequate security, as required in this contract,
no financing payment shall be made under
this contract. Upon receipt of adequate security, financing payments shall be made, including all previous payments to which the
Contractor is entitled, in accordance with
the terms of the provisions for contract financing. If at any time the Contracting Officer determines that the security provided by
the Contractor is insufficient, the Contractor shall promptly provide such additional security as the Contracting Officer determines necessary. In the event the Contractor fails to provide such additional security, the Contracting Officer may collect or
liquidate such security that has been provided and suspend further payments to the
Contractor; and the Contractor shall repay
to the Government the amount of unliquidated financing payments as the Contracting
Officer at his sole discretion deems repayable.
(d) Reservation of rights. (1) No payment or
other action by the Government under this
clause shall (i) excuse the Contractor from
performance of obligations under this contract, or (ii) constitute a waiver of any of the
rights or remedies of the parties under the
contract.

(2) The Government’s rights and remedies
under this clause (i) shall not be exclusive,
but rather shall be in addition to any other
rights and remedies provided by law or this
contract; and (ii) shall not be affected by delayed, partial, or omitted exercise of any
right, remedy, power, or privilege, nor shall
such exercise or any single exercise preclude
or impair any further exercise under this
clause or the exercise of any other right,
power, or privilege of the Government.
(e) Content of Contractor’s request for financing payment. The Contractor’s request for financing payment shall contain the following:
(1) The name and address of the Contractor;
(2) The date of the request for financing
payment;
(3) The contract number and/or other identifier of the contract or order under which
the request is made; and
(4) An appropriately itemized and totaled
statement of the financing payments requested and such other information as is
necessary for computation of the payment,
prepared in accordance with the direction of
the Contracting Officer.
(f) Limitation on frequency of financing payments. Contractor financing payments shall
be provided no more frequently than monthly.
(g) Dates for payment. A payment under
this clause is a contract financing payment
and not subject to the interest penalty provisions of the Prompt Payment Act. The designated payment office will pay approved
payment requests within 30 days of submittal of a proper request for payment.
(h) Conflict between terms of offeror and
clause. In the event of any conflict between
the terms proposed by the offeror in response
to an invitation to propose financing terms
(52.232–31) and the terms in this clause, the
terms of this clause shall govern.

(End of clause)
[60 FR 49717, Sept. 26, 1995, as amended at 66
FR 65367, Dec. 18, 2001]

52.232–30 Installment Payments for
Commercial Items.
As prescribed in 32.206(g), insert the
following clause:
INSTALLMENT PAYMENTS FOR COMMERCIAL
ITEMS (OCT 1995)
(a) Contractor entitlement to financing payments. The Contractor may request, and the
Government shall pay, a contract financing
installment payment as specified in this contract when: the payment requested is properly due in accordance with this contract;
the supplies deliverable or services due under
the contract will be delivered or performed

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52.232–30

48 CFR Ch. 1 (10–1–03 Edition)

in accordance with the contract; and there
has been no impairment or diminution of the
Government’s security under this contract.
(b) Computation of amounts. Installment
payment financing shall be paid to the Contractor when requested for each separately
priced unit of supply (but not for services) of
each contract line item in amounts approved
by the Contracting Officer pursuant to this
clause.
(1) Number of installment payments for each
contract line item. Each separately priced unit
of each contract line item is authorized a
fixed number of monthly installment payments. The number of installment payments
authorized for each unit of a contract line
item is equal to the number of months from
the date of contract award to the date one
month before the first delivery of the first
separately priced unit of the contract line
item. For example, if the first scheduled delivery of any separately priced unit of a contract line item is 9 months after award of the
contract, all separately priced units of that
contract line item are authorized 8 installment payments.
(2) Amount of each installment payment. The
amount of each installment payment for
each separately priced unit of each contract
line item is equal to 70 percent of the unit
price divided by the number of installment
payments authorized for that unit.
(3) Date of each installment payment. Installment payments for any particular separately
priced unit of a contract line item begin the
number of months prior to the delivery of
that unit that are equal to the number of installment payments authorized for that unit.
For example, if 8 installment payments are
authorized for each separately priced unit of
a contract line item, the first installment
payment for any particular unit of that contract line item would be 8 months before the
scheduled delivery date for that unit. The
last installment payment would be 1 month
before scheduled delivery of a unit.
(4) Limitation on payment. Prior to the delivery payment for a separately priced unit
of a contract line item, the sum of all installment payments for that unit shall not
exceed 70 percent of the price of that unit.
(c) Contractor request for installment payment. The Contractor may submit requests
for payment of installment payments not
more frequently than monthly, in a form and
manner acceptable to the Contracting Officer. Unless otherwise authorized by the Contracting Officer, all installment payments in
any month for which payment is being requested shall be included in a single request,
appropriately itemized and totaled.
(d) Dates for payment. An installment payment under this clause is a contract financing payment under the Prompt Payment
clause of this contract, and except as provided in paragraph (e) of this clause, ap-

proved requests shall be paid within 30 days
of submittal of a proper request for payment.
(e) Liquidation of installment payments. Installment payments shall be liquidated by
deducting from the delivery payment of each
item the total unliquidated amount of installment payments made for that separately priced unit of that contract line item.
The liquidation amounts for each unit of
each line item shall be clearly delineated in
each request for delivery payment submitted
by the Contractor.
(f) Security for installment payment financing. In the event the Contractor fails to provide adequate security as required in this
contract, no financing payment shall be
made under this contract. Upon receipt of
adequate security, financing payments shall
be made, including all previous payments to
which the Contractor is entitled, in accordance with the terms of the contract. If at
any time the Contracting Officer determines
that the security provided by the Contractor
is insufficient, the Contractor shall promptly
provide such additional security as the Contracting Officer determines necessary. In the
event the Contractor fails to provide such
additional security, the Contracting Officer
may collect or liquidate such security that
has been provided, and suspend further payments to the Contractor; the Contractor
shall repay to the Government the amount
of unliquidated financing payments as the
Contracting Officer at his sole discretion
deems repayable.
(g) Special terms regarding termination for
cause. If this contract is terminated for
cause, the Contractor shall, on demand,
repay to the Government the amount of unliquidated installment payments. The Government shall be liable for no payment except as provided by the Termination for
Cause paragraph of the clause at 52.212–4,
Contract Terms and Conditions—Commercial Items.
(h) Reservation of rights. (1) No payment,
vesting of title under this clause, or other
action taken by the Government under this
clause shall (i) excuse the Contractor from
performance of obligations under this contract, or (ii) constitute a waiver of any of the
rights or remedies of the parties under the
contract.
(2) The Government’s rights and remedies
under this clause (i) shall not be exclusive,
but rather shall be in addition to any other
rights and remedies provided by law or this
contract, and (ii) shall not be affected by delayed, partial, or omitted exercise of any
right, remedy, power, or privilege, nor shall
such exercise or any single exercise preclude
or impair any further exercise under this
clause or the exercise of any other right,
power, or privilege of the Government.
(i) Content of Contractor’s request for installment payment. The Contractor’s request for

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52.232–32

installment payment shall contain the following:
(1) The name and address of the Contractor;
(2) The date of the request for installment
payment;
(3) The contract number and/or other identifier of the contract or order under which
the request is made; and
(4) An itemized and totaled statement of
the items, installment payment amount, and
month for which payment is being requested,
for each separately priced unit of each contract line item.

(End of clause)

32.202–2 for appropriate definitions of types
of payments); and
(2) A listing of the earliest date and greatest amount at which each contract financing
payment may be payable and the amount of
each delivery payment. Any resulting contract shall provide that no contract financing payment shall be made at any earlier
date or in a greater amount than shown in
the offeror’s listing.
(e) The offeror’s proposed prices and financing terms shall be evaluated to determine the cost to the United States of the
proposal using the interest rate and delivery
schedule specified elsewhere in this solicitation.

(End of provision)

[60 FR 49717, Sept. 26, 1995]

52.232–31 Invitation
nancing Terms.

to

Propose

Fi-

As prescribed in 32.205(b) and 32.206,
insert the following provision:
INVITATION TO PROPOSE FINANCING TERMS
(OCT 1995)

[60 FR 49718, Sept. 26, 1995]

52.232–32 Performance-Based
Payments.
As prescribed in 32.1005, insert the
following clause:
PERFORMANCE-BASED PAYMENTS (FEB 2002)

(a) The offeror is invited to propose terms
under which the Government shall make
contract financing payments during contract
performance. The financing terms proposed
by the offeror shall be a factor in the evaluation of the offeror’s proposal. The financing
terms of the successful offeror and the
clause, Terms for Financing of Purchases of
Commercial Items, at 52.232–29, shall be incorporated in any resulting contract.
(b) The offeror agrees that in the event of
any conflict between the terms proposed by
the offeror and the terms in the clause at
52.232–29, Terms for Financing of Purchases
of Commercial Items, the terms of the clause
at 52.232–29 shall govern.
(c) Because of statutory limitations (10
U.S.C. 2307(f) and 41 U.S.C. 255(f)), the
offeror’s proposed financing shall not be acceptable if it does not conform to the following limitations:
(1) Delivery payments shall be made only
for supplies delivered and accepted, or services rendered and accepted in accordance
with the payment terms of this contract;
(2) Contract financing payments shall not
exceed 15 percent of the contract price in advance of any performance of work under the
contract;
(3) The terms and conditions of the contract financing must be appropriate or customary in the commercial marketplace; and
(4) The terms and conditions of the contract financing must be in the best interests
of the United States.
(d) The offeror’s proposal of financing
terms shall include the following:
(1) The proposed contractual language describing the contract financing (see FAR

(a) Amount of payments and limitations on
payments. Subject to such other limitations
and conditions as are specified in this contract and this clause, the amount of payments and limitations on payments shall be
specified in the contract’s description of the
basis for payment.
(b) Contractor request for performance-based
payment. The Contractor may submit requests for payment of performance-based
payments not more frequently than monthly, in a form and manner acceptable to the
Contracting Officer. Unless otherwise authorized by the Contracting Officer, all performance-based payments in any period for
which payment is being requested shall be
included in a single request, appropriately
itemized and totaled. The Contractor’s request shall contain the information and certification detailed in paragraphs (l) and (m)
of this clause.
(c) Approval and payment of requests. (1) The
Contractor shall not be entitled to payment
of a request for performance-based payment
prior to successful accomplishment of the
event or performance criterion for which
payment is requested. The Contracting Officer shall determine whether the event or performance criterion for which payment is requested has been successfully accomplished
in accordance with the terms of the contract. The Contracting Officer may, at any
time, require the Contractor to substantiate
the successful performance of any event or
performance criterion which has been or is
represented as being payable.
(2) A payment under this performancebased payment clause is a contract financing
payment under the Prompt Payment clause

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52.232–32

48 CFR Ch. 1 (10–1–03 Edition)

of this contract and not subject to the interest penalty provisions of the Prompt Payment Act. The designated payment office
will pay approved requests on the llll
[Contracting Officer insert day as prescribed by
agency head; if not prescribed, insert ‘‘30th’’]
day after receipt of the request for performance-based payment. However, the designated payment office is not required to
provide payment if the Contracting Officer
requires substantiation as provided in paragraph (c)(1) of this clause, or inquires into
the status of an event or performance criterion, or into any of the conditions listed in
paragraph (e) of this clause, or into the Contractor certification. The payment period
will not begin until the Contracting Officer
approves the request.
(3) The approval by the Contracting Officer
of a request for performance-based payment
does not constitute an acceptance by the
Government and does not excuse the Contractor from performance of obligations
under this contract.
(d) Liquidation of performance-based payments.
(1)
Performance-based
finance
amounts paid prior to payment for delivery
of an item shall be liquidated by deducting a
percentage or a designated dollar amount
from the delivery payment. If the performance-based finance payments are on a delivery item basis, the liquidation amount for
each such line item shall be the percent of
that delivery item price that was previously
paid under performance-based finance payments or the designated dollar amount. If
the performance-based finance payments are
on a whole contract basis, liquidation shall
be by either predesignated liquidation
amounts or a liquidation percentage.
(2) If at any time the amount of payments
under this contract exceeds any limitation
in this contract, the Contractor shall repay
to the Government the excess. Unless otherwise determined by the Contracting Officer,
such excess shall be credited as a reduction
in the unliquidated performance-based payment balance(s), after adjustment of invoice
payments and balances for any retroactive
price adjustments.
(e) Reduction or suspension of performancebased payments. The Contracting Officer may
reduce or suspend performance-based payments, liquidate performance-based payments by deduction from any payment under
the contract, or take a combination of these
actions after finding upon substantial evidence any of the following conditions:
(1) The Contractor failed to comply with
any material requirement of this contract
(which includes paragraphs (h) and (i) of this
clause).
(2) Performance of this contract is endangered by the Contractor’s (i) failure to make
progress, or (ii) unsatisfactory financial condition.

(3) The Contractor is delinquent in payment of any subcontractor or supplier under
this contract in the ordinary course of business.
(f) Title. (1) Title to the property described
in this paragraph (f) shall vest in the Government. Vestiture shall be immediately
upon the date of the first performance-based
payment under this contract, for property
acquired or produced before that date. Otherwise, vestiture shall occur when the property
is or should have been allocable or properly
chargeable to this contract.
(2) Property, as used in this clause, includes
all of the following described items acquired
or produced by the Contractor that are or
should be allocable or properly chargeable to
this contract under sound and generally accepted accounting principles and practices:
(i) Parts, materials, inventories, and work
in process;
(ii) Special tooling and special test equipment to which the Government is to acquire
title under any other clause of this contract;
(iii) Nondurable (i.e., noncapital) tools,
jigs, dies, fixtures, molds, patterns, taps,
gauges, test equipment and other similar
manufacturing aids, title to which would not
be obtained as special tooling under subparagraph (f)(2)(ii) of this clause; and
(iv) Drawings and technical data, to the extent the Contractor or subcontractors are required to deliver them to the Government by
other clauses of this contract.
(3) Although title to property is in the
Government under this clause, other applicable clauses of this contract (e.g., the termination or special tooling clauses) shall determine the handling and disposition of the
property.
(4) The Contractor may sell any scrap resulting from production under this contract,
without requesting the Contracting Officer’s
approval, provided that any significant reduction in the value of the property to which
the Government has title under this clause is
reported in writing to the Contracting Officer.
(5) In order to acquire for its own use or
dispose of property to which title is vested in
the Government under this clause, the Contractor must obtain the Contracting Officer’s advance approval of the action and the
terms. If approved, the basis for payment
(the events or performance criteria) to which
the property is related shall be deemed to be
not in compliance with the terms of the contract and not payable (if the property is part
of or needed for performance), and the Contractor shall refund the related performancebased payments in accordance with paragraph (d) of this clause.
(6) When the Contractor completes all of
the obligations under this contract, including liquidation of all performance-based payments, title shall vest in the Contractor for
all property (or the proceeds thereof) not—

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(i) Delivered to, and accepted by, the Government under this contract; or
(ii) Incorporated in supplies delivered to,
and accepted by, the Government under this
contract and to which title is vested in the
Government under this clause.
(7) The terms of this contract concerning
liability for Government-furnished property
shall not apply to property to which the Government acquired title solely under this
clause.
(g) Risk of loss. Before delivery to and acceptance by the Government, the Contractor
shall bear the risk of loss for property, the
title to which vests in the Government under
this clause, except to the extent the Government expressly assumes the risk. If any
property is damaged, lost, stolen, or destroyed, the basis of payment (the events or
performance criteria) to which the property
is related shall be deemed to be not in compliance with the terms of the contract and
not payable (if the property is part of or
needed for performance), and the Contractor
shall refund the related performance-based
payments in accordance with paragraph (d)
of this clause.
(h) Records and controls. The Contractor
shall maintain records and controls adequate
for administration of this clause. The Contractor shall have no entitlement to performance-based payments during any time
the Contractor’s records or controls are determined by the Contracting Officer to be inadequate for administration of this clause.
(i) Reports and Government access. The Contractor shall promptly furnish reports, certificates, financial statements, and other
pertinent information requested by the Contracting Officer for the administration of
this clause and to determine that an event or
other criterion prompting a financing payment has been successfully accomplished.
The Contractor shall give the Government
reasonable opportunity to examine and
verify the Contractor’s records and to examine and verify the Contractor’s performance
of this contract for administration of this
clause.
(j) Special terms regarding default. If this
contract is terminated under the Default
clause, (1) the Contractor shall, on demand,
repay to the Government the amount of unliquidated performance-based payments, and
(2) title shall vest in the Contractor, on full
liquidation of all performance-based payments, for all property for which the Government elects not to require delivery under the
Default clause of this contract. The Government shall be liable for no payment except
as provided by the Default clause.
(k) Reservation of rights. (1) No payment or
vesting of title under this clause shall (i) excuse the Contractor from performance of obligations under this contract, or (ii) constitute a waiver of any of the rights or remedies of the parties under the contract.

(2) The Government’s rights and remedies
under this clause (i) shall not be exclusive,
but rather shall be in addition to any other
rights and remedies provided by law or this
contract, and (ii) shall not be affected by delayed, partial, or omitted exercise of any
right, remedy, power, or privilege, nor shall
such exercise or any single exercise preclude
or impair any further exercise under this
clause or the exercise of any other right,
power, or privilege of the Government.
(l) Content of Contractor’s request for performance-based payment. The Contractor’s request for performance-based payment shall
contain the following:
(1) The name and address of the Contractor;
(2) The date of the request for performance-based payment;
(3) The contract number and/or other identifier of the contract or order under which
the request is made;
(4) Such information and documentation as
is required by the contract’s description of
the basis for payment; and
(5) A certification by a Contractor official
authorized to bind the Contractor, as specified in paragraph (m) of this clause.
(m) Content of Contractor’s certification. As
required in paragraph (l)(5) of this clause,
the Contractor shall make the following certification in each request for performancebased payment:
I certify to the best of my knowledge and
belief that—
(1) This request for performance-based payment is true and correct; this request (and
attachments) has been prepared from the
books and records of the Contractor, in accordance with the contract and the instructions of the Contracting Officer;
(2) (Except as reported in writing on
lllllll), all payments to subcontractors and suppliers under this contract have
been paid, or will be paid, currently, when
due in the ordinary course of business;
(3) There are no encumbrances (except as
reported in writing on lllllll) against
the property acquired or produced for, and
allocated or properly chargeable to, the contract which would affect or impair the Government’s title;
(4) There has been no materially adverse
change in the financial condition of the Contractor since the submission by the Contractor to the Government of the most recent
written
information
dated
lllllll; and
(5) After the making of this requested performance-based payment, the amount of all
payments for each deliverable item for which
performance-based payments have been requested will not exceed any limitation in the
contract, and the amount of all payments
under the contract will not exceed any limitation in the contract.

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52.232–33

48 CFR Ch. 1 (10–1–03 Edition)
(End of clause)

[60 FR 49718, Sept. 26, 1995, as amended at 62
FR 12720, Mar. 17, 1997; 66 FR 65367, Dec. 18,
2001]

52.232–33 Payment
by
Electronic
Funds
Transfer—Central
Contractor Registration.
As prescribed in 32.1110(a)(1), insert
the following clause:
PAYMENT BY ELECTRONIC FUNDS TRANSFER—
CENTRAL CONTRACTOR REGISTRATION (OCT
2003)
(a) Method of payment. (1) All payments by
the Government under this contract shall be
made by electronic funds transfer (EFT), except as provided in paragraph (a)(2) of this
clause. As used in this clause, the term
‘‘EFT’’ refers to the funds transfer and may
also include the payment information transfer.
(2) In the event the Government is unable
to release one or more payments by EFT, the
Contractor agrees to either—
(i) Accept payment by check or some other
mutually agreeable method of payment; or
(ii) Request the Government to extend the
payment due date until such time as the
Government can make payment by EFT (but
see paragraph (d) of this clause).
(b) Contractor’s EFT information. The Government shall make payment to the Contractor using the EFT information contained
in the Central Contractor Registration (CCR)
database. In the event that the EFT information changes, the Contractor shall be responsible for providing the updated information
to the CCR database.
(c) Mechanisms for EFT payment. The Government may make payment by EFT
through either the Automated Clearing
House (ACH) network, subject to the rules of
the National Automated Clearing House Association, or the Fedwire Transfer System.
The rules governing Federal payments
through the ACH are contained in 31 CFR
part 210.
(d) Suspension of payment. If the Contractor’s EFT information in the CCR database
is incorrect, then the Government need not
make payment to the Contractor under this
contract until correct EFT information is
entered into the CCR database; and any invoice or contract financing request shall be
deemed not to be a proper invoice for the
purpose of prompt payment under this contract. The prompt payment terms of the contract regarding notice of an improper invoice
and delays in accrual of interest penalties
apply.
(e) Liability for uncompleted or erroneous
transfers. (1) If an uncompleted or erroneous
transfer occurs because the Government used
the Contractor’s EFT information incor-

rectly, the Government remains responsible
for—
(i) Making a correct payment;
(ii) Paying any prompt payment penalty
due; and
(iii) Recovering any erroneously directed
funds.
(2) If an uncompleted or erroneous transfer
occurs because the Contractor’s EFT information was incorrect, or was revised within
30 days of Government release of the EFT
payment transaction instruction to the Federal Reserve System, and—
(i) If the funds are no longer under the control of the payment office, the Government
is deemed to have made payment and the
Contractor is responsible for recovery of any
erroneously directed funds; or
(ii) If the funds remain under the control of
the payment office, the Government shall
not make payment, and the provisions of
paragraph (d) of this clause shall apply.
(f) EFT and prompt payment. A payment
shall be deemed to have been made in a timely manner in accordance with the prompt
payment terms of this contract if, in the
EFT payment transaction instruction released to the Federal Reserve System, the
date specified for settlement of the payment
is on or before the prompt payment due date,
provided the specified payment date is a
valid date under the rules of the Federal Reserve System.
(g) EFT and assignment of claims. If the Contractor assigns the proceeds of this contract
as provided for in the assignment of claims
terms of this contract, the Contractor shall
require as a condition of any such assignment, that the assignee shall register separately in the CCR database and shall be paid
by EFT in accordance with the terms of this
clause. Notwithstanding any other requirement of this contract, payment to an ultimate recipient other than the Contractor, or
a financial institution properly recognized
under an assignment of claims pursuant to
subpart 32.8, is not permitted. In all respects,
the requirements of this clause shall apply
to the assignee as if it were the Contractor.
EFT information that shows the ultimate recipient of the transfer to be other than the
Contractor, in the absence of a proper assignment of claims acceptable to the Government, is incorrect EFT information within the meaning of paragraph (d) of this
clause.
(h) Liability for change of EFT information
by financial agent. The Government is not
liable for errors resulting from changes to
EFT information made by the Contractor’s
financial agent.
(i) Payment information. The payment or
disbursing office shall forward to the Contractor available payment information that
is suitable for transmission as of the date of
release of the EFT instruction to the Federal

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Reserve System. The Government may request the Contractor to designate a desired
format and method(s) for delivery of payment information from a list of formats and
methods the payment office is capable of
executing. However, the Government does
not guarantee that any particular format or
method of delivery is available at any particular payment office and retains the latitude to use the format and delivery method
most convenient to the Government. If the
Government makes payment by check in accordance with paragraph (a) of this clause,
the Government shall mail the payment information to the remittance address contained in the CCR database.

(End of Clause)
[64 FR 10542, Mar. 4, 1999, as amended at 68
FR 56675, Oct. 1, 2003]

52.232–34 Payment
by
Electronic
Funds Transfer—Other than Central Contractor Registration.
As prescribed in 32.1110(a)(2), insert
the following clause:
PAYMENT BY ELECTRONIC FUNDS TRANSFER—
OTHER THAN CENTRAL CONTRACTOR REGISTRATION (MAY 1999)
(a) Method of payment. (1) All payments by
the Government under this contract shall be
made by electronic funds transfer (EFT) except as provided in paragraph (a)(2) of this
clause. As used in this clause, the term
‘‘EFT’’ refers to the funds transfer and may
also include the payment information transfer.
(2) In the event the Government is unable
to release one or more payments by EFT, the
Contractor agrees to either—
(i) Accept payment by check or some other
mutually agreeable method of payment; or
(ii) Request the Government to extend payment due dates until such time as the Government makes payment by EFT (but see
paragraph (d) of this clause).
(b) Mandatory submission of Contractor’s
EFT information. (1) The Contractor is required to provide the Government with the
information required to make payment by
EFT (see paragraph (j) of this clause). The
Contractor shall provide this information directly to the office designated in this contract to receive that information (hereafter:
‘‘designated office’’) by lllllllll [the
Contracting Officer shall insert date, days after
award, days before first request, the date specified for receipt of offers if the provision at
52.232–38 is utilized, or ‘‘concurrent with first
request’’ as prescribed by the head of the agency; if not prescribed, insert ‘‘no later than 15
days prior to submission of the first request for
payment’’]. If not otherwise specified in this
contract, the payment office is the des-

ignated office for receipt of the Contractor’s
EFT information. If more than one designated office is named for the contract, the
Contractor shall provide a separate notice to
each office. In the event that the EFT information changes, the Contractor shall be responsible for providing the updated information to the designated office(s).
(2) If the Contractor provides EFT information applicable to multiple contracts, the
Contractor shall specifically state the applicability of this EFT information in terms acceptable to the designated office. However,
EFT information supplied to a designated office shall be applicable only to contracts
that identify that designated office as the office to receive EFT information for that contract.
(c) Mechanisms for EFT payment. The Government may make payment by EFT
through either the Automated Clearing
House (ACH) network, subject to the rules of
the National Automated Clearing House Association, or the Fedwire Transfer System.
The rules governing Federal payments
through the ACH are contained in 31 CFR
part 210.
(d) Suspension of payment. (1) The Government is not required to make any payment
under this contract until after receipt, by
the designated office, of the correct EFT
payment information from the Contractor.
Until receipt of the correct EFT information, any invoice or contract financing request shall be deemed not to be a proper invoice for the purpose of prompt payment
under this contract. The prompt payment
terms of the contract regarding notice of an
improper invoice and delays in accrual of interest penalties apply.
(2) If the EFT information changes after
submission of correct EFT information, the
Government shall begin using the changed
EFT information no later than 30 days after
its receipt by the designated office to the extent payment is made by EFT. However, the
Contractor may request that no further payments be made until the updated EFT information is implemented by the payment office. If such suspension would result in a late
payment under the prompt payment terms of
this contract, the Contractor’s request for
suspension shall extend the due date for payment by the number of days of the suspension.
(e) Liability for uncompleted or erroneous
transfers. (1) If an uncompleted or erroneous
transfer occurs because the Government used
the Contractor’s EFT information incorrectly, the Government remains responsible
for—
(i) Making a correct payment;
(ii) Paying any prompt payment penalty
due; and
(iii) Recovering any erroneously directed
funds.

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52.232–35

48 CFR Ch. 1 (10–1–03 Edition)

(2) If an uncompleted or erroneous transfer
occurs because the Contractor’s EFT information was incorrect, or was revised within
30 days of Government release of the EFT
payment transaction instruction to the Federal Reserve System, and—
(i) If the funds are no longer under the control of the payment office, the Government
is deemed to have made payment and the
Contractor is responsible for recovery of any
erroneously directed funds; or
(ii) If the funds remain under the control of
the payment office, the Government shall
not make payment and the provisions of
paragraph (d) shall apply.
(f) EFT and prompt payment. A payment
shall be deemed to have been made in a timely manner in accordance with the prompt
payment terms of this contract if, in the
EFT payment transaction instruction released to the Federal Reserve System, the
date specified for settlement of the payment
is on or before the prompt payment due date,
provided the specified payment date is a
valid date under the rules of the Federal Reserve System.
(g) EFT and assignment of claims. If the Contractor assigns the proceeds of this contract
as provided for in the assignment of claims
terms of this contract, the Contractor shall
require as a condition of any such assignment, that the assignee shall provide the
EFT information required by paragraph (j) of
this clause to the designated office, and shall
be paid by EFT in accordance with the terms
of this clause. In all respects, the requirements of this clause shall apply to the assignee as if it were the Contractor. EFT information that shows the ultimate recipient
of the transfer to be other than the Contractor, in the absence of a proper assignment of claims acceptable to the Government, is incorrect EFT information within
the meaning of paragraph (d) of this clause.
(h) Liability for change of EFT information
by financial agent. The Government is not
liable for errors resulting from changes to
EFT information provided by the Contractor’s financial agent.
(i) Payment information. The payment or
disbursing office shall forward to the Contractor available payment information that
is suitable for transmission as of the date of
release of the EFT instruction to the Federal
Reserve System. The Government may request the Contractor to designate a desired
format and method(s) for delivery of payment information from a list of formats and
methods the payment office is capable of
executing. However, the Government does
not guarantee that any particular format or
method of delivery is available at any particular payment office and retains the latitude to use the format and delivery method
most convenient to the Government. If the
Government makes payment by check in accordance with paragraph (a) of this clause,

the Government shall mail the payment information to the remittance address in the
contract.
(j) EFT information. The Contractor shall
provide the following information to the designated office. The Contractor may supply
this data for this or multiple contracts (see
paragraph (b) of this clause). The Contractor
shall designate a single financial agent per
contract capable of receiving and processing
the EFT information using the EFT methods
described in paragraph (c) of this clause.
(1) The contract number (or other procurement identification number).
(2) The Contractor’s name and remittance
address, as stated in the contract(s).
(3) The signature (manual or electronic, as
appropriate), title, and telephone number of
the Contractor official authorized to provide
this information.
(4) The name, address, and 9-digit Routing
Transit Number of the Contractor’s financial
agent.
(5) The Contractor’s account number and
the type of account (checking, saving, or
lockbox).
(6) If applicable, the Fedwire Transfer System telegraphic abbreviation of the Contractor’s financial agent.
(7) If applicable, the Contractor shall also
provide the name, address, telegraphic abbreviation, and 9-digit Routing Transit Number of the correspondent financial institution receiving the wire transfer payment if
the Contractor’s financial agent is not directly on-line to the Fedwire Transfer System; and, therefore, not the receiver of the
wire transfer payment.

(End of clause)
[64 FR 10543, Mar. 4, 1999]

52.232–35 Designation of Office for
Government Receipt of Electronic
Funds Transfer Information.
As prescribed in 32.1110(c), insert the
following clause:
DESIGNATION OF OFFICE FOR GOVERNMENT RECEIPT OF ELECTRONIC FUNDS TRANSFER INFORMATION (MAY 1999)
(a) As provided in paragraph (b) of the
clause at 52.232–34, Payment by Electronic
Funds Transfer—Other than Central Contractor Registration, the Government has
designated the office cited in paragraph (c)
of this clause as the office to receive the
Contractor’s electronic funds transfer (EFT)
information, in lieu of the payment office of
this contract.
(b) The Contractor shall send all EFT information, and any changes to EFT information to the office designated in paragraph (c)
of this clause. The Contractor shall not send
EFT information to the payment office, or

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Federal Acquisition Regulation

52.232–38

any other office than that designated in
paragraph (c). The Government need not use
any EFT information sent to any office
other than that designated in paragraph (c).
(c) Designated Office:
Name:
llllllllllllllllllllllll
llllllllllllllllllllllll
Mailing Address:
llllllllllllllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll
Telephone Number:
llllllllllllllllllllllll
Person to Contact:
llllllllllllllllllllllll
Electronic Address:
llllllllllllllllllllllll

(e) Assignment of claims. Notwithstanding
any other provision of this contract, if any
payment is made under this clause, then no
payment under this contract shall be assigned under the provisions of the assignment of claims terms of this contract or the
Assignment of Claims Act of 1940, as amended, 31 U.S.C. 3727, 41 U.S.C. 15.
(f) Other payment terms. The other payment
terms of this contract shall govern the content and submission of payment requests. If
any clause requires information or documents in or with the payment request, that
is not provided in the third party agreement
referenced in paragraph (c) of this clause, the
Contractor shall obtain instructions from
the Contracting Officer before submitting
such a payment request.

(End of clause)

(End of clause)

[64 FR 10544, Mar. 4, 1999]

[64 FR 10544, Mar. 4, 1999]

52.232–36 Payment by Third Party.
As prescribed in 32.1110(d), insert the
following clause:

52.232–37 Multiple Payment Arrangements.
As prescribed in 32.1110(e), insert the
following clause:

PAYMENT BY THIRD PARTY (MAY 1999)
(a) General. The Contractor agrees to accept payments due under this contract,
through payment by a third party in lieu of
payment directly from the Government, in
accordance with the terms of this clause.
The third party and, if applicable, the particular Governmentwide commercial purchase card to be used are identified elsewhere in this contract.
(b) Contractor payment request. In accordance with those clauses of this contract that
authorize the Contractor to submit invoices,
contract financing requests, other payment
requests, or as provided in other clauses providing for payment to the Contractor, the
Contractor shall make such payment requests through a charge to the Government
account with the third party, at the time
and for the amount due in accordance with
the terms of this contract.
(c) Payment. The Contractor and the third
party shall agree that payments due under
this contract shall be made upon submittal
of payment requests to the third party in accordance with the terms and conditions of an
agreement between the Contractor, the Contractor’s financial agent (if any), and the
third party and its agents (if any). No payment shall be due the Contractor until such
agreement is made. Payments made or due
by the third party under this clause are not
payments made by the Government and are
not subject to the Prompt Payment Act or
any implementation thereof in this contract.
(d) Documentation. Documentation of each
charge against the Government’s account
shall be provided to the Contracting Officer
upon request.

MULTIPLE PAYMENT ARRANGEMENTS (MAY
1999)
This contract or agreement provides for
payments to the Contractor through several
alternative methods. The applicability of
specific methods of payment and the designation of the payment office(s) are either
stated—
(a) Elsewhere in this contract or agreement; or
(b) In individual orders placed under this
contract or agreement.

(End of clause)
[64 FR 10544, Mar. 4, 1999]

52.232–38 Submission of Electronic
Funds Transfer Information with
Offer.
As prescribed in 32.1110(g), insert the
following provision:
SUBMISSION OF ELECTRONIC FUNDS TRANSFER
INFORMATION WITH OFFER (MAY 1999)
The offeror shall provide, with its offer,
the following information that is required to
make payment by electronic funds transfer
(EFT) under any contract that results from
this solicitation. This submission satisfies
the requirement to provide EFT information
under paragraphs (b)(1) and (j) of the clause
at 52.232–34, Payment by Electronic Funds
Transfer—Other than Central Contractor
Registration.
(1) The solicitation number (or other procurement identification number).

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52.233–1

48 CFR Ch. 1 (10–1–03 Edition)

(2) The offeror’s name and remittance address, as stated in the offer.
(3) The signature (manual or electronic, as
appropriate), title, and telephone number of
the offeror’s official authorized to provide
this information.
(4) The name, address, and 9-digit Routing
Transit Number of the offeror’s financial
agent.
(5) The offeror’s account number and the
type of account (checking, savings, or
lockbox).
(6) If applicable, the Fedwire Transfer System telegraphic abbreviation of the offeror’s
financial agent.
(7) If applicable, the offeror shall also provide the name, address, telegraphic abbreviation, and 9-digit Routing Transit Number of
the correspondent financial institution receiving the wire transfer payment if the
offeror’s financial agent is not directly online to the Fedwire and, therefore, not the
receiver of the wire transfer payment.

(End of provision)
[64 FR 10544, Mar. 4, 1999]

52.233–1 Disputes.
As prescribed in 33.215, insert the following clause:
DISPUTES (JUL 2002)
(a) This contract is subject to the Contract
Disputes Act of 1978, as amended (41 U.S.C.
601–613).
(b) Except as provided in the Act, all disputes arising under or relating to this contract shall be resolved under this clause.
(c) Claim, as used in this clause, means a
written demand or written assertion by one
of the contracting parties seeking, as a matter of right, the payment of money in a sum
certain, the adjustment or interpretation of
contract terms, or other relief arising under
or relating to this contract. However, a written demand or written assertion by the Contractor seeking the payment of money exceeding $100,000 is not a claim under the Act
until certified. A voucher, invoice, or other
routine request for payment that is not in
dispute when submitted is not a claim under
the Act. The submission may be converted to
a claim under the Act, by complying with
the submission and certification requirements of this clause, if it is disputed either
as to liability or amount or is not acted upon
in a reasonable time.
(d)(1) A claim by the Contractor shall be
made in writing and, unless otherwise stated
in this contract, submitted within 6 years
after accrual of the claim to the Contracting
Officer for a written decision. A claim by the
Government against the Contractor shall be
subject to a written decision by the Contracting Officer.

(d)(2)(i) The Contractor shall provide the
certification specified in paragraph (d)(2)(iii)
of this clause when submitting any claim exceeding $100,000.
(ii) The certification requirement does not
apply to issues in controversy that have not
been submitted as all or part of a claim.
(iii) The certification shall state as follows: ‘‘I certify that the claim is made in
good faith; that the supporting data are accurate and complete to the best of my
knowledge and belief; that the amount requested accurately reflects the contract adjustment for which the Contractor believes
the Government is liable; and that I am duly
authorized to certify the claim on behalf of
the Contractor.’’
(3) The certification may be executed by
any person duly authorized to bind the Contractor with respect to the claim.
(e) For Contractor claims of $100,000 or
less, the Contracting Officer must, if requested in writing by the Contractor, render
a decision within 60 days of the request. For
Contractor-certified claims over $100,000, the
Contracting Officer must, within 60 days, decide the claim or notify the Contractor of
the date by which the decision will be made.
(f) The Contracting Officer’s decision shall
be final unless the Contractor appeals or
files a suit as provided in the Act.
(g) If the claim by the Contractor is submitted to the Contracting Officer or a claim
by the Government is presented to the Contractor, the parties, by mutual consent, may
agree to use alternative dispute resolution
(ADR). If the Contractor refuses an offer for
ADR, the Contractor shall inform the Contracting Officer, in writing, of the Contractor’s specific reasons for rejecting the offer.
(h) The Government shall pay interest on
the amount found due and unpaid from (1)
the date that the Contracting Officer receives the claim (certified, if required); or (2)
the date that payment otherwise would be
due, if that date is later, until the date of
payment. With regard to claims having defective certifications, as defined in (FAR) 48
CFR 33.201, interest shall be paid from the
date that the Contracting Officer initially
receives the claim. Simple interest on claims
shall be paid at the rate, fixed by the Secretary of the Treasury as provided in the
Act, which is applicable to the period during
which the Contracting Officer receives the
claim and then at the rate applicable for
each 6-month period as fixed by the Treasury
Secretary during the pendency of the claim.
(i) The Contractor shall proceed diligently
with performance of this contract, pending
final resolution of any request for relief,
claim, appeal, or action arising under the
contract, and comply with any decision of
the Contracting Officer.

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Federal Acquisition Regulation

52.233–3

(End of clause)
Alternate I (Dec 1991). As prescribed in
33.215, substitute the following paragraph (i) for paragraph (i) of the basic
clause:
(i) The Contractor shall proceed diligently
with performance of this contract, pending
final resolution of any request for relief,
claim, appeal, or action arising under or relating to the contract, and comply with any
decision of the Contracting Officer.
[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 26904, June 28, 1985; 51 FR 36972, Oct. 16,
1986; 56 FR 67417, Dec. 30, 1991; 59 FR 11382,
Mar. 10, 1994; 60 FR 48230, Sept. 18, 1995; 63 FR
58595, Oct. 30, 1998; 67 FR 43514, June 27, 2002;
67 FR 47635, July 19, 2002]

52.233–2

Service of Protest.

As prescribed in 33.106(a), insert the
following provision:
SERVICE OF PROTEST (AUG 1996)
(a) Protests, as defined in section 33.101 of
the Federal Acquisition Regulation, that are
filed directly with an agency, and copies of
any protests that are filed with the General
Accounting Office (GAO), shall be served on
the Contracting Officer (addressed as follows) by obtaining written and dated acknowledgment of receipt from lll.
[Contracting Officer designate the official or location where a protest may be served on the
Contracting Officer.]
(b) The copy of any protest shall be received in the office designated above within
one day of filing a protest with the GAO.

(End of provision)
[61 FR 41471, Aug. 8, 1996]

52.233–3

Protest After Award.

As prescribed in 33.106(b), insert the
following clause:
PROTEST AFTER AWARD (AUG 1996)
(a) Upon receipt of a notice of protest (as
defined in FAR 33.101) or a determination
that a protest is likely (see FAR 33.102(d)),
the Contracting Officer may, by written
order to the Contractor, direct the Contractor to stop performance of the work
called for by this contract. The order shall
be specifically identified as a stop-work
order issued under this clause. Upon receipt
of the order, the Contractor shall immediately comply with its terms and take all
reasonable steps to minimize the incurrence
of costs allocable to the work covered by the
order during the period of work stoppage.

Upon receipt of the final decision in the protest, the Contracting Officer shall either—
(1) Cancel the stop-work order; or
(2) Terminate the work covered by the
order as provided in the Default, or the Termination for Convenience of the Government, clause of this contract.
(b) If a stop-work order issued under this
clause is canceled either before or after a
final decision in the protest, the Contractor
shall resume work. The Contracting Officer
shall make an equitable adjustment in the
delivery schedule or contract price, or both,
and the contract shall be modified, in writing, accordingly, if—
(1) The stop-work order results in an increase in the time required for, or in the
Contractor’s cost properly allocable to, the
performance of any part of this contract; and
(2) The Contractor asserts its right to an
adjustment within 30 days after the end of
the period of work stoppage; provided, that if
the Contracting Officer decides the facts justify the action, the Contracting Officer may
receive and act upon a proposal submitted at
any time before final payment under this
contract.
(c) If a stop-work order is not canceled and
the work covered by the order is terminated
for the convenience of the Government, the
Contracting Officer shall allow reasonable
costs resulting from the stop-work order in
arriving at the termination settlement.
(d) If a stop-work order is not canceled and
the work covered by the order is terminated
for default, the Contracting Officer shall
allow, by equitable adjustment or otherwise,
reasonable costs resulting from the stopwork order.
(e) The Government’s rights to terminate
this contract at any time are not affected by
action taken under this clause.
(f) If, as the result of the Contractor’s intentional or negligent misstatement, misrepresentation, or miscertification, a protest
related to this contract is sustained, and the
Government pays costs, as provided in FAR
33.102(b)(2) or 33.104(h)(1), the Government
may require the Contractor to reimburse the
Government the amount of such costs. In addition to any other remedy available, and
pursuant to the requirements of subpart 32.6,
the Government may collect this debt by offsetting the amount against any payment due
the Contractor under any contract between
the Contractor and the Government.

(End of clause)
Alternate I (JUN 1985). As prescribed
in 33.106(b), substitute in paragraph
(a)(2) the words ‘‘the Termination
clause of this contract’’ for the words
‘‘the Default, or the Termination for
Convenience of the Government clause

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52.234–1

48 CFR Ch. 1 (10–1–03 Edition)

of this contract.’’ In paragraph (b) substitute the words ‘‘an equitable adjustment in the delivery schedule, the estimated cost, the fee, or a combination
thereof, and in any other terms of the
contract that may be affected’’ for the
words ‘‘an equitable adjustment in the
delivery schedule or contract price, or
both.’’
[50 FR 25681, June 20, 1985, as amended at 54
FR 29284, July 11, 1989; 60 FR 48231, 48276,
Sept. 18, 1995; 61 FR 41472, Aug. 8, 1996]

52.234–1 Industrial Resources Developed Under Defense Production Act
Title III.
As prescribed at 34.104, insert the following clause:
INDUSTRIAL RESOURCES DEVELOPED UNDER
DEFENSE PRODUCTION ACT TITLE III (DEC
1994)
(a) Definitions.
Title III industrial resource means materials,
services, processes, or manufacturing equipment (including the processes, technologies,
and ancillary services for the use of such
equipment) established or maintained under
the authority of Title III, Defense Production Act (50 U.S.C. App. 2091–2093).
Title III project contractor means a Contractor that has received assistance for the
development or manufacture of an industrial
resource under 50 U.S.C. App. 2091–2093, Defense Production Act.
(b) The Contractor shall refer any request
from a Title III project contractor for testing and qualification of a Title III industrial
resource to the Contracting Officer.
(c) Upon the direction of the Contracting
Officer, the Contractor shall test Title III industrial resources for qualification. The Contractor shall provide the test results to the
Defense Production Act Office, Title III Program, located at Wright Patterson Air Force
Base, Ohio 45433–7739.
(d) When the Contracting Officer modifies
the contract to direct testing pursuant to
this clause, the Government will provide the
Title III industrial resource to be tested and
will make an equitable adjustment in the
contract for the costs of testing and qualification of the Title III industrial resource.
(e) The Contractor agrees to insert the substance of this clause, including paragraph
(e), in every subcontract issued in performance of this contract.

(End of clause)
[59 FR 67048, Dec. 28, 1994; 60 FR 5870, Jan. 31,
1995]

52.235

[Reserved]

52.236–1 Performance of Work by the
Contractor.
As prescribed in 36.501(b), insert the
following clause in solicitations and
contracts when a fixed-price construction contract is contemplated and the
contract amount is expected to exceed
$1,000,000. The contracting officer may
insert the clause in solicitations and
contracts when a fixed-price construction contract is contemplated and the
contract amount is expected to be
$1,000,000 or less. Complete the clause
by inserting the appropriate percentage consistent with the complexity and
magnitude of the work and customary
or necessary specialty subcontracting
(see 36.501(a)).
PERFORMANCE OF WORK BY THE CONTRACTOR
(APR 1984)
The Contractor shall perform on the site,
and with its own organization, work equivalent to at least lll [insert the appropriate
number in words followed by numerals in parentheses] percent of the total amount of work
to be performed under the contract. This percentage may be reduced by a supplemental
agreement to this contract if, during performing the work, the Contractor requests a
reduction and the Contracting Officer determines that the reduction would be to the advantage of the Government.

(End of clause)
52.236–2 Differing Site Conditions.
As prescribed in 36.502, insert the following clause:
DIFFERING SITE CONDITIONS (APR 1984)
(a) The Contractor shall promptly, and before the conditions are disturbed, give a
written notice to the Contracting Officer of
(1) subsurface or latent physical conditions
at the site which differ materially from
those indicated in this contract, or (2) unknown physical conditions at the site, of an
unusual nature, which differ materially from
those ordinarily encountered and generally
recognized as inhering in work of the character provided for in the contract.
(b) The Contracting Officer shall investigate the site conditions promptly after receiving the notice. If the conditions do materially so differ and cause an increase or decrease in the Contractor’s cost of, or the
time required for, performing any part of the
work under this contract, whether or not
changed as a result of the conditions, an equitable adjustment shall be made under this

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52.236–5

clause and the contract modified in writing
accordingly.
(c) No request by the Contractor for an equitable adjustment to the contract under
this clause shall be allowed, unless the Contractor has given the written notice required; provided, that the time prescribed in
(a) above for giving written notice may be
extended by the Contracting Officer.
(d) No request by the Contractor for an equitable adjustment to the contract for differing site conditions shall be allowed if
made after final payment under this contract.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34761, July 3, 1995]

52.236–3 Site Investigation and Conditions Affecting the Work.
As prescribed in 36.503, insert the following clause:
SITE INVESTIGATION AND CONDITIONS
AFFECTING THE WORK (APR 1984)
(a) The Contractor acknowledges that it
has taken steps reasonably necessary to ascertain the nature and location of the work,
and that it has investigated and satisfied
itself as to the general and local conditions
which can affect the work or its cost, including but not limited to (1) conditions bearing
upon transportation, disposal, handling, and
storage of materials; (2) the availability of
labor, water, electric power, and roads; (3)
uncertainties of weather, river stages, tides,
or similar physical conditions at the site; (4)
the conformation and conditions of the
ground; and (5) the character of equipment
and facilities needed preliminary to and during work performance. The Contractor also
acknowledges that it has satisfied itself as to
the character, quality, and quantity of surface and subsurface materials or obstacles to
be encountered insofar as this information is
reasonably ascertainable from an inspection
of the site, including all exploratory work
done by the Government, as well as from the
drawings and specifications made a part of
this contract. Any failure of the Contractor
to take the actions described and acknowledged in this paragraph will not relieve the
Contractor from responsibility for estimating properly the difficulty and cost of
successfully performing the work, or for proceeding to successfully perform the work
without additional expense to the Government.
(b) The Government assumes no responsibility for any conclusions or interpretations
made by the Contractor based on the information made available by the Government.
Nor does the Government assume responsibility for any understanding reached or rep-

resentation made concerning conditions
which can affect the work by any of its officers or agents before the execution of this
contract, unless that understanding or representation is expressly stated in this contract.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34761, July 3, 1995]

52.236–4 Physical Data.
As prescribed in 36.504, insert the following clause in solicitations and contracts when a fixed-price construction
contract is contemplated and physical
data (e.g., test borings, hydrographic,
weather conditions data) will be furnished or made available to offerors.
All information to be furnished or
made available to offerors before award
that pertains to the performance of the
work should be identified in the clause.
When subparagraphs are not applicable
they may be deleted.
PHYSICAL DATA (APR 1984)
Data and information furnished or referred
to below is for the Contractor’s information.
The Government shall not be responsible for
any interpretation of or conclusion drawn
from the data or information by the Contractor.
(a) The indications of physical conditions
on the drawings and in the specifications are
the result of site investigations by lll
[insert a description of investigational methods
used, such as surveys, auger borings, core borings, test pits, probings, test tunnels].
(b) Weather conditions lll [insert a summary of weather records and warnings].
(c) Transportation facilities lll [insert a
summary of transportation facilities providing
access from the site, including information
about their availability and limitations].
(d) lll [Insert other pertinent information].

(End of clause)
52.236–5 Material and Workmanship.
As prescribed in 36.505, insert the following clause:
MATERIAL AND WORKMANSHIP (APR 1984)
(a) All equipment, material, and articles
incorporated into the work covered by this
contract shall be new and of the most suitable grade for the purpose intended, unless
otherwise specifically provided in this contract. References in the specifications to
equipment, material, articles, or patented
processes by trade name, make, or catalog

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52.236–6

48 CFR Ch. 1 (10–1–03 Edition)

number, shall be regarded as establishing a
standard of quality and shall not be construed as limiting competition. The Contractor may, at its option, use any equipment, material, article, or process that, in
the judgment of the Contracting Officer, is
equal to that named in the specifications,
unless otherwise specifically provided in this
contract.
(b) The Contractor shall obtain the Contracting Officer’s approval of the machinery
and mechanical and other equipment to be
incorporated into the work. When requesting
approval, the Contractor shall furnish to the
Contracting Officer the name of the manufacturer, the model number, and other information concerning the performance, capacity, nature, and rating of the machinery and
mechanical and other equipment. When required by this contract or by the Contracting Officer, the Contractor shall also
obtain the Contracting Officer’s approval of
the material or articles which the Contractor contemplates incorporating into the
work. When requesting approval, the Contractor shall provide full information concerning the material or articles. When directed to do so, the Contractor shall submit
samples for approval at the Contractor’s expense, with all shipping charges prepaid. Machinery, equipment, material, and articles
that do not have the required approval shall
be installed or used at the risk of subsequent
rejection.
(c) All work under this contract shall be
performed in a skillful and workmanlike
manner. The Contracting Officer may require, in writing, that the Contractor remove from the work any employee the Contracting Officer deems incompetent, careless, or otherwise objectionable.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 54
FR 48995, Nov. 28, 1989]

52.236–6 Superintendence by the Contractor.
As prescribed in 36.506, insert the following clause:

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34761, July 3, 1995]

52.236–7

Permits and Responsibilities.

As prescribed in 36.507, insert the following clause:
PERMITS AND RESPONSIBILITIES (NOV 1991)
The Contractor shall, without additional
expense to the Government, be responsible
for obtaining any necessary licenses and permits, and for complying with any Federal,
State, and municipal laws, codes, and regulations applicable to the performance of the
work. The Contractor shall also be responsible for all damages to persons or property
that occur as a result of the Contractor’s
fault or negligence. The Contractor shall
also be responsible for all materials delivered and work performed until completion
and acceptance of the entire work, except for
any completed unit of work which may have
been accepted under the contract.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 54
FR 48995, Nov. 28, 1989; 56 FR 55376, Oct. 25,
1992]

52.236–8

Other Contracts.

As prescribed in 36.508, insert the following clause:
OTHER CONTRACTS (APR 1984)
The Government may undertake or award
other contracts for additional work at or
near the site of the work under this contract.
The Contractor shall fully cooperate with
the other contractors and with Government
employees and shall carefully adapt scheduling and performing the work under this
contract to accommodate the additional
work, heeding any direction that may be
provided by the Contracting Officer. The
Contractor shall not commit or permit any
act that will interfere with the performance
of work by any other contractor or by Government employees.

SUPERINTENDENCE BY THE CONTRACTOR (APR
1984)

(End of clause)

At all times during performance of this
contract and until the work is completed and
accepted, the Contractor shall directly superintend the work or assign and have on the
work a competent superintendent who is satisfactory to the Contracting Officer and has
authority to act for the Contractor.

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

52.236–9 Protection of Existing Vegetation, Structures, Equipment, Utilities, and Improvements.
As prescribed in 36.509, insert the following clause:

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Federal Acquisition Regulation

52.236–11

PROTECTION OF EXISTING VEGETATION, STRUCTURES, EQUIPMENT, UTILITIES, AND IMPROVEMENTS (APR 1984)
(a) The Contractor shall preserve and protect all structures, equipment, and vegetation (such as trees, shrubs, and grass) on or
adjacent to the work site, which are not to
be removed and which do not unreasonably
interfere with the work required under this
contract. The Contractor shall only remove
trees when specifically authorized to do so,
and shall avoid damaging vegetation that
will remain in place. If any limbs or
branches of trees are broken during contract
performance, or by the careless operation of
equipment, or by workmen, the Contractor
shall trim those limbs or branches with a
clean cut and paint the cut with a tree-pruning compound as directed by the Contracting
Officer.
(b) The Contractor shall protect from damage all existing improvements and utilities
(1) at or near the work site and (2) on adjacent property of a third party, the locations
of which are made known to or should be
known by the Contractor. The Contractor
shall repair any damage to those facilities,
including those that are the property of a
third party, resulting from failure to comply
with the requirements of this contract or
failure to exercise reasonable care in performing the work. If the Contractor fails or
refuses to repair the damage promptly, the
Contracting Officer may have the necessary
work performed and charge the cost to the
Contractor.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34761, July 3, 1995]

52.236–10 Operations
and
Storage
Areas.
As prescribed in 36.510, insert the following clause:
OPERATIONS AND STORAGE AREAS (APR 1984)
(a) The Contractor shall confine all operations (including storage of materials) on
Government premises to areas authorized or
approved by the Contracting Officer. The
Contractor shall hold and save the Government, its officers and agents, free and harmless from liability of any nature occasioned
by the Contractor’s performance.
(b) Temporary buildings (e.g., storage
sheds, shops, offices) and utilities may be
erected by the Contractor only with the approval of the Contracting Officer and shall be
built with labor and materials furnished by
the Contractor without expense to the Government. The temporary buildings and utilities shall remain the property of the Contractor and shall be removed by the Con-

tractor at its expense upon completion of the
work. With the written consent of the Contracting Officer, the buildings and utilities
may be abandoned and need not be removed.
(c) The Contractor shall, under regulations
prescribed by the Contracting Officer, use
only established roadways, or use temporary
roadways constructed by the Contractor
when and as authorized by the Contracting
Officer. When materials are transported in
prosecuting the work, vehicles shall not be
loaded beyond the loading capacity recommended by the manufacturer of the vehicle or prescribed by any Federal, State, or
local law or regulation. When it is necessary
to cross curbs or sidewalks, the Contractor
shall protect them from damage. The Contractor shall repair or pay for the repair of
any damaged curbs, sidewalks, or roads.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34761, July 3, 1995]

52.236–11 Use and Possession Prior to
Completion.
As prescribed in 36.511, insert the following clause:
USE AND POSSESSION PRIOR TO COMPLETION
(APR 1984)
(a) The Government shall have the right to
take possession of or use any completed or
partially completed part of the work. Before
taking possession of or using any work, the
Contracting Officer shall furnish the Contractor a list of items of work remaining to
be performed or corrected on those portions
of the work that the Government intends to
take possession of or use. However, failure of
the Contracting Officer to list any item of
work shall not relieve the Contractor of responsibility for complying with the terms of
the contract. The Government’s possession
or use shall not be deemed an acceptance of
any work under the contract.
(b) While the Government has such possession or use, the Contractor shall be relieved
of the responsibility for the loss of or damage to the work resulting from the Government’s possession or use, notwithstanding
the terms of the clause in this contract entitled Permits and Responsibilities. If prior possession or use by the Government delays the
progress of the work or causes additional expense to the Contractor, an equitable adjustment shall be made in the contract price or
the time of completion, and the contract
shall be modified in writing accordingly.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34761, July 3, 1995]

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52.236–12

48 CFR Ch. 1 (10–1–03 Edition)

52.236–12 Cleaning Up.
As prescribed in 36.512, insert the following clause:
CLEANING UP (APR 1984)
The Contractor shall at all times keep the
work area, including storage areas, free from
accumulations of waste materials. Before
completing the work, the Contractor shall
remove from the work and premises any rubbish, tools, scaffolding, equipment, and materials that are not the property of the Government. Upon completing the work, the
Contractor shall leave the work area in a
clean, neat, and orderly condition satisfactory to the Contracting Officer.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34761, July 3, 1995]

52.236–13 Accident Prevention.
As prescribed in 36.513, insert the following clause:
ACCIDENT PREVENTION (NOV 1991)
(a) The Contractor shall provide and maintain work environments and procedures
which will (1) safeguard the public and Government personnel, property, materials, supplies, and equipment exposed to Contractor
operations and activities; (2) avoid interruptions of Government operations and delays
in project completion dates; and (3) control
costs in the performance of this contract.
(b) For these purposes on contracts for
construction or dismantling, demolition, or
removal of improvements, the Contractor
shall—
(1) Provide appropriate safety barricades,
signs, and signal lights;
(2) Comply with the standards issued by
the Secretary of Labor at 29 CFR part 1926
and 29 CFR part 1910; and
(3) Ensure that any additional measures
the Contracting Officer determines to be reasonably necessary for the purposes are
taken.
(c) If this contract is for construction or
dismantling, demolition or removal of improvements with any Department of Defense
agency or component, the Contractor shall
comply with all pertinent provisions of the
latest version of U.S. Army Corps of Engineers Safety and Health Requirements Manual, EM 385–1–1, in effect on the date of the
solicitation.
(d) Whenever the Contracting Officer becomes aware of any noncompliance with
these requirements or any condition which
poses a serious or imminent danger to the
health or safety of the public or Government
personnel, the Contracting Officer shall notify the Contractor orally, with written con-

firmation, and request immediate initiation
of corrective action. This notice, when delivered to the Contractor or the Contractor’s
representative at the work site, shall be
deemed sufficient notice of the noncompliance and that corrective action is required.
After receiving the notice, the Contractor
shall immediately take corrective action. If
the Contractor fails or refuses to promptly
take corrective action, the Contracting Officer may issue an order stopping all or part of
the work until satisfactory corrective action
has been taken. The Contractor shall not be
entitled to any equitable adjustment of the
contract price or extension of the performance schedule on any stop work order issued
under this clause.
(e) The Contractor shall insert this clause,
including this paragraph (e), with appropriate changes in the designation of the parties, in subcontracts.

(End of clause)
Alternate I (Nov 1991). If the contract
will involve (a) work of a long duration
or hazardous nature, or (b) performance on a Government facility that on
the advice of technical representatives
involves hazardous materials or operations that might endanger the safety
of the public and/or Government personnel or property, add the following
paragraph (f) to the basic clause:
(f) Before commencing the work, the Contractor shall—
(1) Submit a written proposed plan for implementing this clause. The plan shall include an analysis of the significant hazards
to life, limb, and property inherent in contract work performance and a plan for controlling these hazards; and
(2) Meet with representatives of the Contracting Officer to discuss and develop a mutual understanding relative to administration of the overall safety program.
[56 FR 55376, Oct. 25, 1991]

52.236–14 Availability and Use of Utility Services.
As prescribed in 36.514, insert the following clause in solicitations and contracts when a fixed-price construction
contract or a fixed-price dismantling,
demolition, or removal of improvements contract is contemplated, the
contract is to be performed on Government sites when the contracting officer
decides (a) that the existing utility
system is adequate for the needs of
both the Government and the contractor, and (b) furnishing it is in the
Government’s interest. When this

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Federal Acquisition Regulation

52.236–16

clause is used, the contracting officer
shall list the available utilities in the
contract.
AVAILABILITY AND USE OF UTILITY SERVICES
(APR 1984)
(a) The Government shall make all reasonably required amounts of utilities available
to the Contractor from existing outlets and
supplies, as specified in the contract. Unless
otherwise provided in the contract, the
amount of each utility service consumed
shall be charged to or paid for by the Contractor at prevailing rates charged to the
Government or, where the utility is produced
by the Government, at reasonable rates determined by the Contracting Officer. The
Contractor shall carefully conserve any utilities furnished without charge.
(b) The Contractor, at its expense and in a
workmanlike manner satisfactory to the
Contracting Officer, shall install and maintain all necessary temporary connections
and distribution lines, and all meters required to measure the amount of each utility
used for the purpose of determining charges.
Before final acceptance of the work by the
Government, the Contractor shall remove all
the temporary connections, distribution
lines, meters, and associated paraphernalia.

(End of clause)
52.236–15 Schedules for Construction
Contracts.
As prescribed in 36.515, insert the following clause:
SCHEDULES FOR CONSTRUCTION CONTRACTS
(APR 1984)
(a) The Contractor shall, within five days
after the work commences on the contract or
another period of time determined by the
Contracting Officer, prepare and submit to
the Contracting Officer for approval three
copies of a practicable schedule showing the
order in which the Contractor proposes to
perform the work, and the dates on which
the Contractor contemplates starting and
completing the several salient features of
the work (including acquiring materials,
plant, and equipment). The schedule shall be
in the form of a progress chart of suitable
scale to indicate appropriately the percentage of work scheduled for completion by any
given date during the period. If the Contractor fails to submit a schedule within the
time prescribed, the Contracting Officer may
withhold approval of progress payments
until the Contractor submits the required
schedule.
(b) The Contractor shall enter the actual
progress on the chart as directed by the Contracting Officer, and upon doing so shall immediately deliver three copies of the anno-

tated schedule to the Contracting Officer. If,
in the opinion of the Contracting Officer, the
Contractor falls behind the approved schedule, the Contractor shall take steps necessary to improve its progress, including
those that may be required by the Contracting Officer, without additional cost to
the Government. In this circumstance, the
Contracting Officer may require the Contractor to increase the number of shifts,
overtime operations, days of work, and/or
the amount of construction plant, and to
submit for approval any supplementary
schedule or schedules in chart form as the
Contracting Officer deems necessary to demonstrate how the approved rate of progress
will be regained.
(c) Failure of the Contractor to comply
with the requirements of the Contracting Officer under this clause shall be grounds for a
determination by the Contracting Officer
that the Contractor is not prosecuting the
work with sufficient diligence to ensure
completion within the time specified in the
contract. Upon making this determination,
the Contracting Officer may terminate the
Contractor’s right to proceed with the work,
or any separable part of it, in accordance
with the default terms of this contract.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34761, July 3, 1995]

52.236–16 Quantity Surveys.
As prescribed in 36.516, the contracting officer may insert the following clause in solicitations and contracts when a fixed-price construction
contract providing for unit pricing of
items and for payment based on quantity surveys is contemplated:
QUANTITY SURVEYS (APR 1984)
(a) Quantity surveys shall be conducted,
and the data derived from these surveys
shall be used in computing the quantities of
work performed and the actual construction
completed and in place.
(b) The Government shall conduct the
original and final surveys and make the computations based on them. The Contractor
shall conduct the surveys for any periods for
which progress payments are requested and
shall make the computations based on these
surveys. All surveys conducted by the Contractor shall be conducted under the direction of a representative of the Contracting
Officer, unless the Contracting Officer
waives this requirement in a specific instance.
(c) Promptly upon completing a survey,
the Contractor shall furnish the originals of
all field notes and all other records relating

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52.236–17

48 CFR Ch. 1 (10–1–03 Edition)

to the survey or to the layout of the work to
the Contracting Officer, who shall use them
as necessary to determine the amount of
progress payments. The Contractor shall retain copies of all such material furnished to
the Contracting Officer.

(End of clause)
Alternate I (APR 1984). If it is determined at a level above that of the contracting officer that it is impracticable
for Government personnel to perform
the original and final surveys, and the
Government wishes the contractor to
perform these surveys, substitute the
following paragraph (b) for paragraph
(b) of the basic clause:
(b) The Contractor shall conduct the original and final surveys and surveys for any periods for which progress payments are requested. All these surveys shall be conducted
under the direction of a representative of the
Contracting Officer, unless the Contracting
Officer waives this requirement in a specific
instance. The Government shall make such
computations as are necessary to determine
the quantities of work performed or finally
in place. The Contractor shall make the
computations based on the surveys for any
periods for which progress payments are requested.

52.236–17

Layout of Work.

As prescribed in 36.517, insert the following clause in solicitations and contracts when a fixed-price construction
contract is contemplated and use of
this clause is appropriate due to a need
for accurate work layout and for siting
verification during work performance:
LAYOUT OF WORK (APR 1984)
The Contractor shall lay out its work from
Government-established base lines and bench
marks indicated on the drawings, and shall
be responsible for all measurements in connection with the layout. The Contractor
shall furnish, at its own expense, all stakes,
templates, platforms, equipment, tools, materials, and labor required to lay out any
part of the work. The Contractor shall be responsible for executing the work to the lines
and grades that may be established or indicated by the Contracting Officer. The Contractor shall also be responsible for maintaining and preserving all stakes and other
marks established by the Contracting Officer
until authorized to remove them. If such
marks are destroyed by the Contractor or
through its negligence before their removal
is authorized, the Contracting Officer may
replace them and deduct the expense of the

replacement from any amounts due or to become due to the Contractor.

(End of clause)
52.236–18 Work Oversight in Cost-Reimbursement Construction Contracts.
As prescribed in 36.518, insert the following clause in solicitations and contracts when cost-reimbursement construction contracts are contemplated:
WORK OVERSIGHT IN COST-REIMBURSEMENT
CONSTRUCTION CONTRACTS (APR 1984)
The extent and character of the work to be
done by the Contractor shall be subject to
the general supervision, direction, control,
and approval of the Contracting Officer.

(End of clause)
52.236–19 Organization and Direction
of the Work.
As prescribed in 36.519, insert the following clause in solicitations and contracts when a cost-reimbursement construction contract is contemplated:
ORGANIZATION AND DIRECTION OF THE WORK
(APR 1984)
(a) When this contract is executed, the
Contractor shall submit to the Contracting
Officer a chart showing the general executive and administrative organization, the
personnel to be employed in connection with
the work under this contract, and their respective duties. The Contractor shall keep
the data furnished current by supplementing
it as additional information becomes available.
(b) Work performance under this contract
shall be under the full-time resident direction of: (1) the Contractor, if the Contractor
is an individual; (2) one or more principal
partners, if the Contractor is a partnership;
or (3) one or more senior officers, if Contractor is a corporation, association, or similar legal entity. However, if the Contracting
Officer approves, the Contractor may be represented in the direction of the work by a
specific person or persons holding positions
other than those identified in this paragraph.

(End of clause)
52.236–20

[Reserved]

52.236–21 Specifications and Drawings
for Construction.
As prescribed in 36.521, insert the following clause:

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52.236–21

SPECIFICATIONS AND DRAWINGS FOR
CONSTRUCTION (FEB 1997)
(a) The Contractor shall keep on the work
site a copy of the drawings and specifications
and shall at all times give the Contracting
Officer access thereto. Anything mentioned
in the specifications and not shown on the
drawings, or shown on the drawings and not
mentioned in the specifications, shall be of
like effect as if shown or mentioned in both.
In case of difference between drawings and
specifications, the specifications shall govern. In case of discrepancy in the figures, in
the drawings, or in the specifications, the
matter shall be promptly submitted to the
Contracting Officer, who shall promptly
make a determination in writing. Any adjustment by the Contractor without such a
determination shall be at its own risk and
expense. The Contracting Officer shall furnish from time to time such detailed drawings and other information as considered
necessary, unless otherwise provided.
(b) Wherever in the specifications or upon
the drawings the words directed, required, ordered, designated, prescribed, or words of like
import are used, it shall be understood that
the direction, requirement, order, designation,
or prescription, of the Contracting Officer is
intended and similarly the words approved,
acceptable, satisfactory, or words of like import shall mean approved by, or acceptable to,
or satisfactory to the Contracting Officer, unless otherwise expressly stated.
(c) Where as shown, as indicated, as detailed,
or words of similar import are used, it shall
be understood that the reference is made to
the drawings accompanying this contract
unless stated otherwise. The word provided as
used herein shall be understood to mean provide complete in place, that is furnished and installed.
(d) Shop drawings means drawings, submitted to the Government by the Contractor, subcontractor, or any lower tier subcontractor pursuant to a construction contract, showing in detail (1) the proposed fabrication and assembly of structural elements
and (2) the installation (i.e., form, fit, and
attachment details) of materials or equipment. It includes drawings, diagrams, layouts, schematics, descriptive literature, illustrations, schedules, performance and test
data, and similar materials furnished by the
contractor to explain in detail specific portions of the work required by the contract.
The Government may duplicate, use, and disclose in any manner and for any purpose
shop drawings delivered under this contract.
(e) If this contract requires shop drawings,
the Contractor shall coordinate all such
drawings, and review them for accuracy,
completeness, and compliance with contract
requirements and shall indicate its approval
thereon as evidence of such coordination and
review. Shop drawings submitted to the Con-

tracting Officer without evidence of the Contractor’s approval may be returned for resubmission. The Contracting Officer will indicate an approval or disapproval of the shop
drawings and if not approved as submitted
shall indicate the Government’s reasons
therefor. Any work done before such approval shall be at the Contractor’s risk. Approval by the Contracting Officer shall not
relieve the Contractor from responsibility
for any errors or omissions in such drawings,
nor from responsibility for complying with
the requirements of this contract, except
with respect to variations described and approved in accordance with (f) below.
(f) If shop drawings show variations from
the contract requirements, the Contractor
shall describe such variations in writing,
separate from the drawings, at the time of
submission. If the Contracting Officer approves any such variation, the Contracting
Officer shall issue an appropriate contract
modification, except that, if the variation is
minor or does not involve a change in price
or in time of performance, a modification
need not be issued.
(g) The Contractor shall submit to the
Contracting Officer for approval four copies
(unless otherwise indicated) of all shop drawings as called for under the various headings
of these specifications. Three sets (unless
otherwise indicated) of all shop drawings,
will be retained by the Contracting Officer
and one set will be returned to the Contractor.

(End of clause)
Alternate I (APR 1984). When record
shop drawings are required and reproducible shop drawings are needed, add
the following sentences to paragraph
(g) of the basic clause:
Upon completing the work under this contract, the Contractor shall furnish a complete set of all shop drawings as finally approved. These drawings shall show all
changes and revisions made up to the time
the equipment is completed and accepted.

Alternate II (APR 1984). When record
shop drawings are required and reproducible shop drawings are not needed,
the following sentences shall be added
to paragraph (g) of the basic clause:
Upon completing the work under this contract, the Contractor shall furnish lll
[Contracting Officer complete by inserting desired amount] sets of prints of all shop drawings as finally approved. These drawings
shall show changes and revisions made up to

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52.236–22

48 CFR Ch. 1 (10–1–03 Edition)

the time the equipment is completed and accepted.

(End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 55
FR 38518, Sept. 18, 1990; 56 FR 41744, Aug. 22,
1991; 60 FR 34761, July 3, 1995; 61 FR 67426,
Dec. 20, 1996]

[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 26904, June 28, 1985]

52.236–22 Design Within Funding Limitations.

As prescribed in 36.609–2(b), insert the
following clause:

As prescribed in 36.609–1(c), insert the
following clause:

RESPONSIBILITY OF THE ARCHITECT-ENGINEER
CONTRACTOR (APR 1984)

DESIGN WITHIN FUNDING LIMITATIONS (APR
1984)
(a) The Contractor shall accomplish the design services required under this contract so
as to permit the award of a contract, using
standard Federal Acquisition Regulation
procedures for the construction of the facilities designed at a price that does not exceed
the estimated construction contract price as
set forth in paragraph (c) below. When bids
or proposals for the construction contract
are received that exceed the estimated price,
the contractor shall perform such redesign
and other services as are necessary to permit
contract award within the funding limitation. These additional services shall be performed at no increase in the price of this
contract. However, the Contractor shall not
be required to perform such additional services at no cost to the Government if the unfavorable bids or proposals are the result of
conditions beyond its reasonable control.
(b) The Contractor will promptly advise
the Contracting Officer if it finds that the
project being designed will exceed or is likely to exceed the funding limitations and it is
unable to design a usable facility within
these limitations. Upon receipt of such information, the Contracting Officer will review
the Contractor’s revised estimate of construction cost. The Government may, if it
determines that the estimated construction
contract price set forth in this contract is so
low that award of a construction contract
not in excess of such estimate is improbable,
authorize a change in scope or materials as
required to reduce the estimated construction cost to an amount within the estimated
construction contract price set forth in paragraph (c) below, or the Government may adjust such estimated construction contract
price. When bids or proposals are not solicited or are unreasonably delayed, the Government shall prepare an estimate of constructing the design submitted and such estimate shall be used in lieu of bids or proposals to determine compliance with the
funding limitation.
(c) The estimated construction contract
price for the project described in this contract is $ll.

52.236–23 Responsibility of the Architect-Engineer Contractor.

(a) The Contractor shall be responsible for
the professional quality, technical accuracy,
and the coordination of all designs, drawings, specifications, and other services furnished by the Contractor under this contract. The Contractor shall, without additional compensation, correct or revise any
errors or deficiencies in its designs, drawings, specifications, and other services.
(b) Neither the Government’s review, approval or acceptance of, nor payment for, the
services required under this contract shall be
construed to operate as a waiver of any
rights under this contract or of any cause of
action arising out of the performance of this
contract, and the Contractor shall be and remain liable to the Government in accordance
with applicable law for all damages to the
Government caused by the Contractor’s negligent performance of any of the services furnished under this contract.
(c) The rights and remedies of the Government provided for under this contract are in
addition to any other rights and remedies
provided by law.
(d) If the Contractor is comprised of more
than one legal entity, each such entity shall
be jointly and severally liable hereunder.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 26904, June 28, 1985]

52.236–24 Work Oversight in ArchitectEngineer Contracts.
As prescribed in 36.609–3, insert the
following clause:
WORK OVERSIGHT IN ARCHITECT-ENGINEER
CONTRACTS (APR 1984)
The extent and character of the work to be
done by the Contractor shall be subject to
the general oversight, supervision, direction,
control, and approval of the Contracting Officer.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 26904, June 28, 1985]

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Federal Acquisition Regulation

52.237–1

52.236–25 Requirements for Registration of Designers.
As prescribed in 36.609–4, insert the
following clause:
REQUIREMENTS FOR REGISTRATION OF
DESIGNERS (JUNE 2003)
Architects or engineers registered to practice in the particular professional field involved in a State, the District of Columbia,
or an outlying area of the United States
shall prepare or review and approve the design of architectural, structural, mechanical, electrical, civil, or other engineering
features of the work.

(End of clause)
[68 FR 28087, May 22, 2003]

52.236–26 Preconstruction Conference.
As prescribed in 36.522, insert the following clause:
PRECONSTRUCTION CONFERENCE (FEB 1995)
If the Contracting Officer decides to conduct a preconstruction conference, the successful offeror will be notified and will be required to attend. The Contracting Officer’s
notification will include specific details regarding the date, time, and location of the
conference, any need for attendance by subcontractors, and information regarding the
items to be discussed.

(End of clause)
[59 FR 67050, Dec. 28, 1994]

52.236–27 Site Visit (Construction).
As prescribed in 36.523, insert a provision substantially the same as the following:
SITE VISIT (CONSTRUCTION) (FEB 1995)
(a) The clauses at 52.236–2, Differing Site
Conditions, and 52.236–3, Site Investigation
and Conditions Affecting the Work, will be
included in any contract awarded as a result
of this solicitation. Accordingly, offerors or
quoters are urged and expected to inspect
the site where the work will be performed.
(b) Site visits may be arranged during normal duty hours by contacting:
Name: llllllllllllllllllll
Address: lllllllllllllllllll
llllllllllllllllllllllll
Telephone: lllllllllllllllll

a paragraph substantially the same as
the following for paragraph (b) of the
basic provision:
(b) An organized site visit has been scheduled for—
llllllllllllllllllllllll
[Insert date and time]
(c) Participants will meet at—
llllllllllllllllllllllll
[Insert location]

(End of provision)
[59 FR 67050, Dec. 28, 1994; 60 FR 14377, Mar.
17, 1995]

52.236–28 Preparation of Proposals—
Construction.
As prescribed in 36.520, insert the following provision:
PREPARATION OF PROPOSALS—CONSTRUCTION
(OCT 1997)
(a) Proposals 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 proposal must
initial each erasure or change appearing on
any proposal form.
(b) The proposal form may require offerors
to submit proposed prices for one or more
items on various bases, including—
(1) Lump sum price;
(2) Alternate prices;
(3) Units of construction; or
(4) Any combination of paragraphs (b)(1)
through (b)(3) of this provision.
(c) If the solicitation requires submission
of a proposal on all items, failure to do so
may result in the proposal being rejected
without further consideration. If a proposal
on all items is not required, offerors should
insert the words ‘‘no proposal’’ in the space
provided for any item on which no price is
submitted.
(d) Alternate proposals will not be considered unless this solicitation authorizes their
submission.

(End of provision)
[62 FR 51265, Sept. 30, 1997]

52.237–1 Site Visit.
As prescribed in 37.110(a), insert the
following provision in solicitations for
services to be performed on Government installations, unless the solicitation is for construction:

(End of provision)

SITE VISIT (APR 1984)

Alternate I (FEB 1995). If an organized
site visit will be conducted, substitute

Offerors or quoters are urged and expected
to inspect the site where services are to be

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52.237–2

48 CFR Ch. 1 (10–1–03 Edition)

performed and to satisfy themselves regarding all general and local conditions that may
affect the cost of contract performance, to
the extent that the information is reasonably obtainable. In no event shall failure to
inspect the site constitute grounds for a
claim after contract award.

(End of provision)
52.237–2 Protection of Government
Buildings, Equipment, and Vegetation.
As prescribed in 37.110(b), insert the
following clause in solicitations and
contracts for services to be performed
on Government installations, unless a
construction contract is contemplated:
PROTECTION OF GOVERNMENT BUILDINGS,
EQUIPMENT, AND VEGETATION (APR 1984)
The Contractor shall use reasonable care
to avoid damaging existing buildings, equipment, and vegetation on the Government installation. If the Contractor’s failure to use
reasonable care causes damage to any of this
property, the Contractor shall replace or repair the damage at no expense to the Government as the Contracting Officer directs.
If the Contractor fails or refuses to make
such repair or replacement, the Contractor
shall be liable for the cost, which may be deducted from the contract price.

(End of clause)
52.237–3 Continuity of Services.
As prescribed in 37.110(c), insert the
following clause:
CONTINUITY OF SERVICES (JAN 1991)
(a) The Contractor recognizes that the
services under this contract are vital to the
Government and must be continued without
interruption and that, upon contract expiration, a successor, either the Government or
another contractor, may continue them. The
Contractor agrees to (1) furnish phase-in
training and (2) exercise its best efforts and
cooperation to effect an orderly and efficient
transition to a successor.
(b) The Contractor shall, upon the Contracting Officer’s written notice, (1) furnish
phase-in, phase-out services for up to 90 days
after this contract expires and (2) negotiate
in good faith a plan with a successor to determine the nature and extent of phase-in,
phase-out services required. The plan shall
specify a training program and a date for
transferring responsibilities for each division
of work described in the plan, and shall be
subject to the Contracting Officer’s approval.
The Contractor shall provide sufficient experienced personnel during the phase-in, phaseout period to ensure that the services called

for by this contract are maintained at the
required level of proficiency.
(c) The Contractor shall allow as many
personnel as practicable to remain on the job
to help the successor maintain the continuity and consistency of the services required by this contract. The Contractor also
shall disclose necessary personnel records
and allow the successor to conduct on-site
interviews with these employees. If selected
employees are agreeable to the change, the
Contractor shall release them at a mutually
agreeable date and negotiate transfer of
their earned fringe benefits to the successor.
(d) The Contractor shall be reimbursed for
all reasonable phase-in, phase-out costs (i.e.,
costs incurred within the agreed period after
contract expiration that result from phasein, phase-out operations) and a fee (profit)
not to exceed a pro rata portion of the fee
(profit) under this contract.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 55
FR 52799, Dec. 21, 1990; 62 FR 40238, July 25,
1997]

52.237–4 Payment by Government to
Contractor.
As prescribed in 37.304(a), insert the
following clause in solicitations and
contracts solely for dismantling, demolition, or removal of improvements
whenever the contracting officer determines that the Government shall make
payment to the contractor in addition
to any title to property that the contractor may receive under the contract:
PAYMENT BY GOVERNMENT TO CONTRACTOR
(APR 1984)
(a) In ll [insert full if Alternate I is used;
otherwise insert partial] consideration of the
performance of the work called for in the
Schedule, the Government will pay to the
Contractor ll [fill in amount].
(b) The Government shall make progress
payments monthly as the work proceeds, or
at more frequent intervals as determined by
the Contracting Officer, on estimates approved by the Contracting Officer. Except as
provided in paragraph (c) below, in making
progress payments the Contracting Officer
shall retain 10 percent of the estimated payment until final completion and acceptance
of the contract work. However, if the Contracting Officer finds that satisfactory
progress was achieved during any period for
which a progress payment is to be made, the
Contracting Officer may authorize such payment in full, without retaining a percentage.
Also, on completion and acceptance of each
unit or division for which the price is stated

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Federal Acquisition Regulation

52.237–6

separately, the Contracting Officer may authorize full payment for that unit or division
without retaining a percentage.
(c) When the work is substantially completed, the Contracting Officer shall retain
an amount considered adequate for the protection of the Government and, at the Contracting Officer’s discretion, may release all
or a portion of any excess amount.
(d) In further consideration of performance, the Contractor shall receive title to all
property to be dismantled or demolished
that is not specifically designated as being
retained by the Government. The title shall
vest in the Contractor immediately upon the
Government’s issuing the notice of award, or
if a performance bond is to be furnished after
award, upon the Government’s issuance of a
notice to proceed with the work. The Government shall not be responsible for the condition of, or any loss or damage to, the property. If the Contractor does not wish to remove from the site any of the property acquired, the Contracting Officer may, upon
written request, grant the Contractor permission to leave the property on the premises. As a condition to the granting of this
permission, the Contractor agrees to waive
any right, title, claim, or interest in and to
the property.
(e) Upon completion and acceptance of all
work and receipt of a properly executed
voucher, the Government shall make final
payment of the amount due the Contractor
under this contract. If requested, the Contractor shall release all claims against the
Government arising under this contract,
other than any claims the Contractor specifically excepts, in stated amounts, from
operation of this release.

(End of clause)
Alternate I (APR 1984). If the contracting officer determines that the
Government shall retain all material
resulting from the dismantling or demolition work, delete paragraph (d) from
the basic clause and renumber the remaining paragraphs.
52.237–5 Payment
Government.

by

Contractor

to

As prescribed in 37.304(b), insert the
following clause in solicitations and
contracts for dismantling, demolition,
or removal of improvements whenever
the contractor is to receive title to dismantled or demolished property and a
net amount of compensation is due to
the Government, except if the contracting officer determines that it
would be advantageous to the Government for the contractor to pay in in-

crements and the Government to transfer title to the contractor for increments of property only upon receipt of
those payments:
PAYMENT BY CONTRACTOR TO GOVERNMENT
(APR 1984)
(a) The Contractor shall receive title to all
property to be dismantled, demolished, or removed under this contract and not specifically designated in the Schedule as being retained by the Government. The title shall
vest in the Contractor immediately upon the
Government’s issuing the notice of award, or
if a performance bond is to be furnished,
upon the Government’s issuing a notice to
proceed with the work. The Government
shall not be responsible for the condition of,
or any loss or damage to, the property.
(b) The Contractor shall promptly remove
from the site all property acquired by the
Contractor. The Government shall not permit storage of property on the site beyond
the completion date. If the Contractor does
not wish to remove from the site any of the
property acquired, the Contracting Officer
may, upon written request, grant the Contractor permission to leave the property on
the premises. As a condition of the granting
of the permission, the Contractor agrees to
waive any right, title, claim, or interest in
and to the property.
(c) The Contractor shall perform the work
called for under this contract and within l
days of receipt of notice of award, unless
otherwise provided in the Schedule and before proceeding with the work, shall pay ll
[fill in amount]. Checks shall be made payable
to the office designated in the contract and
shall be forwarded to the Contracting Officer.

(End of clause)
52.237–6 Incremental Payment by Contractor to Government.
As prescribed in 37.304(c), insert the
following clause in solicitations and
contracts for dismantling, demolition,
or removal of improvements (a) if the
contractor is to receive title to dismantled or demolished property and a
net amount of compensation is due the
Government, and (b) if the contracting
officer determines that it would be advantageous to the Government for the
contractor to pay in increments, and
for the Government to transfer title to
the contractor for increments of property, only upon receipt of those payments:

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52.237–7

48 CFR Ch. 1 (10–1–03 Edition)

INCREMENTAL PAYMENT BY CONTRACTOR TO
GOVERNMENT (APR 1984)
(a) The Contractor shall perform the work
called for under this contract and within l
days of receipt of notice of award, unless
otherwise provided in the Schedule, and before proceeding with the work, shall pay ll
[fill in amount]. Thereafter, the Contractor
shall make payment to the Government in
the amount and frequency specified in the
Schedule. Checks shall be made payable to
the office designated in the contract and
shall be forwarded to the Contracting Officer.
(b) Upon the Government’s receipt of each
increment of payment, the Contractor shall
receive title to such property as the Contracting Officer determines to be fair and
reasonable for that increment of payment.
Upon receipt of the Contractor’s final payment, all title that has not passed to the
Contractor shall vest in the Contractor, unless specifically designated in the Schedule
as being retained by the Government. The
Government shall not be responsible for the
condition of, or any loss or damage to, the
property.
(c) The Contractor shall promptly remove
from the site all property acquired by the
Contractor. The Government will not permit
storage of property on the site beyond the
completion date. If the Contractor does not
wish to remove from the site any of the property acquired, the Contracting Officer may,
upon written request, grant the Contractor
permission to leave the property on the
premises. As a condition of the granting of
this permission, the Contractor agrees to
waive any right, title, claim, or interest in
and to the property.

(End of clause)
52.237–7 Indemnification and Medical
Liability Insurance.
As prescribed in 37.403, insert the following clause:
INDEMNIFICATION AND MEDICAL LIABILITY
INSURANCE (JAN 1997)
(a) It is expressly agreed and understood
that this is a nonpersonal services contract,
as defined in Federal Acquisition Regulation
(FAR) 37.101, under which the professional
services rendered by the Contractor are rendered in its capacity as an independent contractor. The Government may evaluate the
quality of professional and administrative
services provided, but retains no control over
professional aspects of the services rendered,
including by example, the Contractor’s professional medical judgment, diagnosis, or
specific medical treatments. The Contractor
shall be solely liable for and expressly agrees
to idemnify the Government with respect to

any liability producing acts or omissions by
it or by its employees or agents. The Contractor shall maintain during the term of
this contract liability insurance issued by a
responsible insurance carrier of not less than
the following amount(s) per specialty per occurrence:llllll.
(b) An apparently successful offeror, upon
request by the Contracting Officer, shall furnish prior to contract award evidence of its
insurability concerning the medical liability
insurance required by paragraph (a) of this
clause.
(c) Liability insurance may be on either an
occurrences basis or on a claims-made basis.
If the policy is on a claims-made basis, an
extended reporting endorsement (tail) for a
period of not less than 3 years after the end
of the contract term must also be provided.
(d) Evidence of insurance documenting the
required coverage for each health care provider who will perform under this contract
shall be provided to the Contracting Officer
prior to the commencement of services under
this contract. If the insurance is on a claimsmade basis and evidence of an extended reporting endorsement is not provided prior to
the commencement of services, evidence of
such endorsement shall be provided to the
Contracting Officer prior to the expiration of
this contract. Final payment under this contract shall be withheld until evidence of the
extended reporting endorsement is provided
to the Contracting Officer.
(e) The policies evidencing required insurance shall also contain an endorsement to
the effect that any cancellation or material
change adversely affecting the Government’s
interest shall not be effective until 30 days
after the insurer or the Contractor gives
written notice to the Contracting Officer. If
during the performance period of the contract the Contractor changes insurance providers, the Contractor must provide evidence
that the Government will be indemnified to
the limits specified in paragraph (a) of this
clause, for the entire period of the contract,
either under the new policy, or a combination of old and new policies.
(f) The Contractor shall insert the substance of this clause, including this paragraph (f), in all subcontracts under this contract for health care services and shall require such subcontractors to provide evidence of and maintain insurance in accordance with paragraph (a) of this clause. At
least 5 days before the commencement of
work by any subcontractor, the Contractor
shall furnish to the Contracting Officer evidence of such insurance.

(End of clause)
[54 FR 5058, Jan. 31, 1989, as amended at 54
FR 34758, Aug. 21, 1989; 62 FR 239, Jan. 2, 1997]

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Federal Acquisition Regulation

52.237–10

52.237–8 Restriction
on
Severance
Payments to Foreign Nationals.

(End of clause)

As prescribed in 37.113–2(a), use the
following provision:

[60 FR 42662, Aug. 16, 1995, as amended at 68
FR 43867, July 24, 2003]

RESTRICTION ON SEVERANCE PAYMENTS TO
FOREIGN NATIONALS (AUG. 2003)

52.237–10 Identification of Uncompensated Overtime.

(a) The Federal Acquisition Regulation
(FAR), at 31.205-6(g)(6), limits the cost allowability of severance payments to foreign nationals employed under a service contract
performed outside the United States unless
the agency grants a waiver pursuant to FAR
37.113–1 before contract award.
(b) In making the determination concerning the granting of a waiver, the agency
will determine that—
(1) The application of the severance pay
limitations to the contract would adversely
affect the continuation of a program,
project, or activity that provides significant
support services for (i) members of the
armed forces stationed or deployed outside
the United States, or (ii) employees of an executive agency posted outside the United
States;
(2) The Contractor has taken (or has established plans to take) appropriate actions
within its control to minimize the amount
and number of incidents of the payment of
severance pay to employees under the contract who are foreign nationals; and
(3) The payment of severance pay is necessary in order to comply with a law that is
generally applicable to a significant number
of businesses in the country in which the foreign national receiving the payment performed services under the contract, or is necessary to comply with a collective bargaining agreement.

As prescribed in 37.115–3, insert the
following provision:

(End of provision)
[60 FR 42661, Aug. 16, 1995, as amended at 68
FR 43867, July 24, 2003]

52.237–9 Waiver of Limitation on Severance Payments to Foreign Nationals.
As prescribed in 37.113–2(b), use the
following clause:
WAIVER OF LIMITATION ON SEVERANCE
PAYMENTS TO FOREIGN NATIONALS (AUG. 2003)
(a) Pursuant to 10 U.S.C. 2324(e)(3)(A) or 41
U.S.C. 256(e)(2)(A), as applicable, the cost allowability limitations in FAR 31.205–6(g)(6)
are waived.
(b) This clause may be incorporated into
subcontracts issued under this contract, if
approved by the Contracting Officer.

IDENTIFICATION OF UNCOMPENSATED OVERTIME
(OCT 1997)
(a) Definitions. As used in this provision—
Uncompensated overtime means the hours
worked without additional compensation in
excess of an average of 40 hours per week by
direct charge employees who are exempt
from the Fair Labor Standards Act. Compensated personal absences such as holidays,
vacations, and sick leave shall be included in
the normal work week for purposes of computing uncompensated overtime hours.
Uncompensated overtime rate is the rate that
results from multiplying the hourly rate for
a 40-hour work week by 40, and then dividing
by the proposed hours per week. For example, 45 hours proposed on a 40-hour work
week basis at $20 per hour would be converted to an uncompensated overtime rate of
$17.78 per hour ($20.00 × 40 divided by 45 =
$17.78).
(b) For any proposed hours against which
an uncompensated overtime rate is applied,
the offeror shall identify in its proposal the
hours in excess of an average of 40 hours per
week, by labor category at the same level of
detail as compensated hours, and the uncompensated overtime rate per hour, whether at
the prime or subcontract level. This includes
uncompensated overtime hours that are in
indirect cost pools for personnel whose regular hours are normally charged direct.
(c) The offeror’s accounting practices used
to estimate uncompensated overtime must
be consistent with its cost accounting practices used to accumulate and report uncompensated overtime hours.
(d) Proposals that include unrealistically
low labor rates, or that do not otherwise
demonstrate cost realism, will be considered
in a risk assessment and will be evaluated
for award in accordance with that assessment.
(e) The offeror shall include a copy of its
policy addressing uncompensated overtime
with its proposal.

(End of provision)
[62 FR 44816, Aug. 22, 1997]

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52.238
52.238

48 CFR Ch. 1 (10–1–03 Edition)
[Reserved]

52.239–1 Privacy
guards.

or

Security

Safe-

As prescribed in 39.107, insert a
clause substantially the same as the
following:

consistent with Section 8093 of Public Law
100–202.
(c) Upon request of the Contracting Officer,
the offeror shall submit supporting legal and
factual rationale for this representation.

(End of provision)
[64 FR 10534, Mar. 4, 1999]

PRIVACY OR SECURITY SAFEGUARDS (AUG
1996)
(a) The Contractor shall not publish or disclose in any manner, without the Contracting Officer’s written consent, the details of any safeguards either designed or developed by the Contractor under this contract or otherwise provided by the Government.
(b) To the extent required to carry out a
program of inspection to safeguard against
threats and hazards to the security, integrity, and confidentiality of Government
data, the Contractor shall afford the Government access to the Contractor’s facilities, installations, technical capabilities, operations, documentation, records, and databases.
(c) If new or unanticipated threats or hazards are discovered by either the Government or the Contractor, or if existing safeguards have ceased to function, the discoverer shall immediately bring the situation to
the attention of the other party.

52.241–2
ties.

Order of Precedence—Utili-

As prescribed in 41.501(c)(1), insert a
clause substantially the same as the
following:
ORDER OF PRECEDENCE—UTILITIES (FEB 1995)
In the event of any inconsistency between
the terms of this contract (including the
specifications) and any rate schedule, rider,
or exhibit incorporated in this contract by
reference or otherwise, or any of the Contractor’s rules and regulations, the terms of
this contract shall control.

(End of clause)
[59 FR 67023, Dec. 28, 1994]

52.241–3 Scope and Duration of Contract.

(End of clause)

As prescribed in 41.501(c)(2), insert a
clause substantially the same as the
following:

[61 FR 41472, Aug. 8, 1996, as amended at 62
FR 274, Jan. 2, 1997]

SCOPE AND DURATION OF CONTRACT (FEB 1995)

52.240

[Reserved]

52.241 Utility Services Provisions and
Clauses.
52.241–1 Electric Service Territory
Compliance Representation.
As prescribed in 41.501(b), insert a
provision substantially the same as the
following:
ELECTRIC SERVICE TERRITORY COMPLIANCE
REPRESENTATION (MAY 1999)
(a) Section 8093 of Public Law 100–202 generally requires purchases of electricity by
any department, agency, or instrumentality
of the United States to be consistent with
State law governing the provision of electric
utility service, including State utility commission rulings and electric utility franchises or service territories established pursuant to State statute, State regulation, or
State-approved territorial agreements.
(b) By signing this offer, the offeror represents that this offer to sell electricity is

(a) For the period llllllllll,
[insert period of service] the Contractor agrees
to furnish and the Government agrees to
purchase llllllllll [insert type of
service] utility service in accordance with the
applicable tariff(s), rules, and regulations as
approved by the applicable governing regulatory body and as set forth in the contract.
(b) It is expressly understood that neither
the Contractor nor the Government is under
any obligation to continue any service under
the terms and conditions of this contract beyond the expiration date.
(c) The Contractor shall provide the Government with one complete set of rates,
terms, and conditions of service which are in
effect as of the date of this contract and any
subsequently approved rates.
(d) The Contractor shall be paid at the applicable rate(s) under the tariff and the Government shall be liable for the minimum
monthly charge, if any, specified in this contract commencing with the period in which
service is initially furnished and continuing
for the term of this contract. Any minimum
monthly charge specified in this contract
shall be equitably prorated for the periods in

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Federal Acquisition Regulation

52.241–6

which commencement and termination of
this contract become effective.

(End of clause)
[59 FR 67023, Dec. 28, 1994]

52.241–4 Change in Class of Service.
As prescribed in 41.501(c)(3), insert a
clause substantially the same as the
following:
CHANGE IN CLASS OF SERVICE (FEB 1995)
(a) In the event of a change in the class of
service, such service shall be provided at the
Contractor’s lowest available rate schedule
applicable to the class of service furnished.
(b) Where the Contractor does not have on
file with the regulatory body approved rate
schedules applicable to services provided, no
clause in this contract shall preclude the
parties from negotiating a rate schedule applicable to the class of service furnished.

(End of clause)

with all liability of the Contractor in construction, operation, maintenance and repair
of such facilities, shall be the obligation of
the Contractor.
(c) Authorized representatives of the Contractor will be allowed access to the facilities on Government premises at reasonable
times to perform the obligations of the Contractor regarding such facilities. It is expressly understood that the Government
may limit or restrict the right of access
herein granted in any manner considered
necessary (e.g., national security, public
safety).
(d) Unless otherwise specified in this contract, the Contractor shall, at its expense,
remove such facilities and restore Government premises to their original condition as
near as practicable within a reasonable time
after the Government terminates this contract. In the event such termination of this
contract is due to the fault of the Contractor, such facilities may be retained in
place at the option of the Government for a
reasonable time while the Government attempts to obtain service elsewhere comparable to that provided for hereunder.

[59 FR 67023, Dec. 28, 1994]

(End of clause)

52.241–5 Contractor’s Facilities.
As prescribed in 41.501(c)(4), insert a
clause substantially the same as the
following:
CONTRACTOR’S FACILITIES (FEB 1995)
(a) The Contractor, at its expense, unless
otherwise provided for in this contract, shall
furnish, install, operate, and maintain all facilities required to furnish service hereunder, and measure such service at the point
of delivery specified in the Service Specifications. Title to all such facilities shall remain
with the Contractor and the Contractor shall
be responsible for loss or damage to such facilities, except that the Government shall be
responsible to the extent that loss or damage
has been caused by the Government’s negligent acts or omissions.
(b) Notwithstanding any terms expressed
in this clause, the Contractor shall obtain
approval from the Contracting Officer prior
to any equipment installation, construction,
or removal. The Government hereby grants
to the Contractor, free of any rental or similar charge, but subject to the limitations
specified in this contract, a revocable permit
or license to enter the service location for
any proper purpose under this contract. This
permit or license includes use of the site or
sites agreed upon by the parties hereto for
the installation, operation, maintenance,
and repair of the facilities of the Contractor
required to be located upon Government
premises. All applicable taxes and other
charges in connection therewith, together

[59 FR 67023, Dec. 28, 1994]

52.241–6 Service Provisions.
As prescribed in 41.501(c)(5), insert a
clause substantially the same as the
following:
SERVICE PROVISIONS (FEB 1995)
(a) Measurement of service. (1) All service
furnished by the Contractor shall be measured by suitable metering equipment of
standard manufacture, to be furnished, installed, maintained, repaired, calibrated, and
read by the Contractor at its expense. When
more than a single meter is installed at a
service location, the readings thereof may be
billed conjunctively, if appropriate. In the
event any meter fails to register (or registers
incorrectly) the service furnished, the parties shall agree upon the length of time of
meter malfunction and the quantity of service delivered during such period of time. An
appropriate adjustment shall be made to the
next invoice for the purpose of correcting
such errors. However, any meter which registers not more than ll percent slow or fast
shall be deemed correct.
(2) The Contractor shall read all meters at
periodic intervals of approximately 30 days
or in accordance with the policy of the cognizant regulatory body or applicable bylaws.
All billings based on meter readings of less
than ll days shall be prorated accordingly.
(b) Meter test. (1) The Contractor, at its expense, shall periodically inspect and test
Contractor-installed meters at intervals not

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52.241–7

48 CFR Ch. 1 (10–1–03 Edition)

exceeding ll year(s). The Government has
the right to have representation during the
inspection and test.
(2) At the written request of the Contracting Officer, the Contractor shall make
additional tests of any or all such meters in
the presence of Government representatives.
The cost of such additional tests shall be
borne by the Government if the percentage
of errors is found to be not more than ll
percent slow or fast.
(3) No meter shall be placed in service or
allowed to remain in service which has an
error in registration in excess of ll percent
under normal operating conditions.
(c) Change in volume or character. Reasonable notice shall be given by the Contracting
Officer to the Contractor regarding any material changes anticipated in the volume or
characteristics of the utility service required
at each location.
(d) Continuity of service and consumption.
The Contractor shall use reasonable diligence to provide a regular and uninterrupted
supply of service at each service location,
but shall not be liable for damages, breach of
contract or otherwise, to the Government for
failure, suspension, diminution, or other
variations of service occasioned by or in consequence of any cause beyond the control of
the Contractor, including but not limited to
acts of God or of the public enemy, fires,
floods, earthquakes, or other catastrophe,
strikes, or failure or breakdown of transmission or other facilities. If any such failure, suspension, diminution, or other variation of service shall aggregate more than
ll hour(s) during any billing period hereunder, an equitable adjustment shall be
made in the monthly billing specified in this
contract (including the minimum monthly
charge).

(End of clause)

changes pending with the regulatory body as
of the date of contract award. Such notice
shall fully describe the proposed change. If,
during the term of this contract, the regulatory body having jurisdiction approves any
changes, the Contractor shall forward to the
Contracting Officer a copy of such changes
within 15 days after the effective date thereof. The Contractor agrees to continue furnishing service under this contract in accordance with the amended tariff, and the
Government agrees to pay for such service at
the higher or lower rates as of the date when
such rates are made effective.
(b) The Contractor agrees that throughout
the life of this contract the applicable published and unpublished rate schedule(s) shall
not be in excess of the lowest cost published
and unpublished rate schedule(s) available to
any other customers of the same class under
similar conditions of use and service.
(c) In the event that the regulatory body
promulgates any regulation concerning matters other than rates which affects this contract, the Contractor shall immediately provide a copy to the Contracting Officer. The
Government shall not be bound to accept
any new regulation inconsistent with Federal laws or regulations.
(d) Any changes to rates or terms and conditions of service shall be made a part of this
contract by the issuance of a contract modification unless otherwise specified in the
contract. The effective date of the change
shall be the effective date by the regulatory
body. Any factors not governed by the regulatory body will have an effective date as
agreed to by the parties.

(End of clause)
*Note: Insert
41.501(d)(1).

language

prescribed

in

[59 FR 67024, Dec. 28, 1994]
[59 FR 67024, Dec. 28, 1994; 60 FR 5870, Jan. 31,
1995]

52.241–7 Change in Rates or Terms
and Conditions of Service for Regulated Services.
As prescribed in 41.501(d)(1), insert a
clause substantially the same as the
following:
CHANGE IN RATES OR TERMS AND CONDITIONS
OF SERVICE FOR REGULATED SERVICES (FEB
1995)
(a) This clause applies to the extent services furnished under this contract are subject to regulation by a regulatory body. The
Contractor
agrees
to
give
*llllllllll written notice of (1) the
filing of an application for change in rates or
terms and conditions of service concurrently
with the filing of the application and (2) any

52.241–8 Change in Rates or Terms
and Conditions of Service for Unregulated Services.
As prescribed in 41.501(d)(2), insert a
clause substantially the same as the
following:
CHANGE IN RATES OR TERMS AND CONDITIONS
OF SERVICE FOR UNREGULATED SERVICES
(FEB 1995)
(a) This clause applies to the extent that
services furnished hereunder are not subject
to regulation by a regulatory body.
(b) After llllllllll [insert date],
either party may request a change in rates
or terms and conditions of service, unless
otherwise provided in this contract. Both
parties agree to enter in negotiations concerning such changes upon receipt of a written request detailing the proposed changes

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Federal Acquisition Regulation

52.241–9

and specifying the reasons for the proposed
changes.
(c) The effective date of any change shall
be as agreed to by the parties. The Contractor agrees that throughout the life of
this contract the rates so negotiated will not
be in excess of published and unpublished
rates charged to any other customer of the
same class under similar terms and conditions of use and service.
(d) The failure of the parties to agree upon
any change after a reasonable period of time
shall be a dispute under the Disputes clause
of this contract.
(e) Any changes to rates, terms, or conditions as a result of such negotiations shall be
made a part of this contract by the issuance
of a contract modification.

(End of clause)
[59 FR 67024, Dec. 28, 1994]

52.241–9 Connection Charge.
As prescribed in 41.501(d)(3), insert a
clause substantially the same as the
following:
CONNECTION CHARGE (FEB 1995)
(a) Charge. In consideration of the Contractor furnishing and installing at its expense the new connection facilities described
herein, the Government shall pay the Contractor a connection charge. The payment
shall be in the form of progress payments,
advance payments or as a lump sum, as
agreed to by the parties and as permitted by
applicable law. The total amount payable
shall be either the estimated cost of $lll
less the agreed to salvage value of $lll, or
the actual cost less the salvage value, whichever is less. As a condition precedent to final
payment, the Contractor shall execute a release of any claims against the Government
arising under or by the virtue of such installation.
(b) Ownership, operation, maintenance and
repair of new facilities to be provided. The facilities to be supplied by the Contractor
under this clause, notwithstanding the payment by the Government of a connection
charge, shall be and remain the property of
the Contractor and shall, at all times during
the life of this contract or any renewals
thereof, be operated, maintained, and repaired by the Contractor at its expense. All
taxes and other charges in connection therewith, together with all liability arising out
of the construction, operations, maintenance, or repair of such facilities, shall be
the obligation of the Contractor.
(c) Credits. (1) The Contractor agrees to
allow the Government, on each monthly bill
for service furnished under this contract to
the service location, a credit of llll percent of the amount of each such bill as ren-

dered until the accumulation of credits shall
equal the amount of such connection charge,
provided that the Contractor may at any
time allow a credit up to 100 percent of the
amount of each such bill.
(2) In the event the Contractor, before any
termination of this contract but after completion of the facilities provided for in this
clause, serves any customer other than the
Government (regardless of whether the Government is being served simultaneously,
intermittently, or not at all) by means of
these facilities, the Contractor shall promptly notify the Government in writing. Unless
otherwise agreed by the parties in writing at
that time, the Contractor shall promptly accelerate the credits provided for under subparagraph (c)(1) of this clause, up to 100 percent of each monthly bill until there is refunded the amount that reflects the Government’s connection costs for that portion of
the facilities used in serving others.
(3) In the event the Contractor terminates
this contract, or defaults in performance,
prior to full credit of any connection charge
paid by the Government, the Contractor
shall pay to the Government an amount
equal to the uncredited balance of the connection charge as of the date of the termination or default.
(d) Termination before completion of facilities.
The Government reserves the right to terminate this contract at any time before completion of the facilities with respect to which
the Government is to pay a connection
charge. In the event the Government exercises this right, the Contractor shall be paid
the cost of any work accomplished, including
direct and indirect costs reasonably allocable to the completed work prior to the
time of termination by the Government, plus
the cost of removal, less the salvage value.
(e) Termination after completion of facilities.
In the event the Government terminates this
contract after completion of the facilities
with respect to which the Government has
paid a connection charge, but before the
crediting in full by the Contractor of any
connection charge in accordance with the
terms of this contract, the Contractor shall
have the following options:
(1) To retain in place for llll months
after the notice of termination by the Government such facilities on condition that—
(i) If, during such llll month period,
the Contractor serves any other customer by
means of such facilities, the Contractor,
shall, in lieu of allowing credits, pay the
Government during such period installments
in like amount, manner, and extent as the
credit provided for under paragraph (c) of
this clause before such termination; and
(ii) Immediately after such llll month
period the Contractor shall promptly pay in
full to the Government the uncredited balance of the connection charge.

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52.241–10

48 CFR Ch. 1 (10–1–03 Edition)

(2) To remove such facilities at the Contractor’s own expense within llll months
after the effective date of the termination by
the Government. If the Contractor elects to
remove such facilities, the Government shall
then have the option of purchasing such facilities at the agreed salvage value set forth
herein; and provided further, that the Contractor shall, at the direction of the Government, leave in place such facilities located
on Government property which the Government elects to purchase at the agreed salvage value.

(End of clause)
Alternate I (NOV 1994). If the Contracting Officer determines that a nonrefundable charge is to be paid and no
credits are due the Government, delete
paragraphs (c) and (e), renumber paragraph (d) as (c) and add the following
as paragraph (d):
(d) Termination after completion of facilities.
In the event the Government terminates this
contract after completion of the facilities
with respect to which the Government is to
pay a connection charge, the Contractor
shall have the following options:
(1) To retain in place for llll months
after the notice of termination by the Government. If the Contractor and the Government have not agreed on terms for retention
in place beyond llll months, then the
Contractor must remove the facilities pursuant to the terms of subparagraph (d)(2) of
this clause.
(2) To remove such facilities at the Contractor’s own expense within llll months
after the effective date of the termination by
the Government. If the Contractor elects to
remove such facilities, the Government shall
then have the option of purchasing such facilities at the agreed salvage value set forth
herein; and provided further, that the Contractor shall, at the direction of the Government, leave in place such facilities located
on Government property which the Government elects to purchase at the agreed salvage value.
[59 FR 67024, Dec. 28, 1994]

52.241–10 Termination Liability.
As prescribed in 41.501(d)(4), insert a
clause substantially the same as the
following:
TERMINATION LIABILITY (FEB 1995)
(a) If the Government discontinues utility
service under this contract before completion of the facilities cost recovery period
specified in paragraph (b) of this clause, in
consideration of the Contractor furnishing
and installing at its expense, the new facility

described herein, the Government shall pay
termination charges, calculated as set forth
in this clause.
(b) Facility cost recovery period. The period
of time, not exceeding the term of this contract, during which the net cost of the new
facility, shall be recovered by the Contractor
is—
llll months. [Insert negotiated duration.]
(c) Net facility cost. The cost of the new facility, less the agreed upon salvage value of
such facility, is—
$llll. [Insert appropriate dollar amount.]
(d) Monthly facility cost recovery rate. The
monthly facility cost recovery rate which
the Government shall pay the Contractor
whether or not service is received is—
$llll. [Divide the net facility cost in paragraph (c) of this clause by the facility’s cost recovery period in paragraph (b) of this clause
and insert the resultant figure.]
(e)
Termination
charges.
Termination
charges = $[Multiply the remaining months of
the facility’s cost recovery period specified in
paragraph (b) of this clause by the monthly facility cost recovery rate in paragraph (d) of this
clause and insert the resultant figure.]
(f) If the Contractor has recovered its capital costs at the time of termination there
will be no termination liability charge.

(End of clause)
[59 FR 67025, Dec. 28, 1994]

52.241–11

Multiple Service Locations.

As prescribed in 41.501(d)(5), insert a
clause substantially the same as the
following:
MULTIPLE SERVICE LOCATIONS (FEB 1995)
(a) At any time by written order, the Contracting Officer may designate any location
within the service area of the Contractor at
which utility service shall commence or be
discontinued. Any changes to the service
specifications shall be made a part of the
contract by the issuance of a contract modification to include the name and location of
the service, specifying any different rate, the
point of delivery, different service specifications, and any other terms and conditions.
(b) The applicable monthly charge specified in this contract shall be equitably prorated from the period in which commencement or discontinuance of service at any
service location designated under the Service Specifications shall become effective.

(End of clause)
[59 FR 67025, Dec. 28, 1994]

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Federal Acquisition Regulation

52.242–3

52.241–12 Nonrefundable,
Nonrecurring Service Charge.
As prescribed in 41.501(d)(6), insert a
clause substantially the same as the
following:
NONREFUNDABLE, NONRECURRING SERVICE
CHARGE (FEB 1995)
As provided herein, the Government will
pay a nonrefundable, nonrecurring charge
when the rules and regulations of a Contractor require that a customer pay (1) a
charge for the initiation of service, (2) a contribution in aid of construction, or (3) a nonrefundable membership fee. This charge may
be in addition to or in lieu of a connection
charge. Therefore, there is hereby added to
the Contractor’s schedule a nonrefundable,
nonrecurring charge for llll in the
amount of $llll dollars payable [specify
dates or schedules].

(End of clause)
[59 FR 67025, Dec. 28, 1994]

52.241–13 Capital Credits.
As prescribed in 41.501(d)(7), insert a
clause substantially the same as the
following:
CAPITAL CREDITS (FEB 1995)
(a) The Government is a member of the
llll [insert cooperative name], and as any
other member, is entitled to capital credits
consistent with the bylaws of the cooperative, which states the obligation of the Contractor to pay capital credits and which
specifies the method and time of payment.
(b) The Contractor shall furnish to the
Contracting Officer, or the designated representative of the Contracting Officer, in
writing, on an llll basis [insert period of
time] a list of accrued credits by contract
number, year, and delivery point.
(c) Payment of capital credits will be made
by check, payable to the llll [insert agency name], and forwarded to the Contracting
Officer at llll [insert agency address], unless otherwise directed in writing by the
Contracting Officer. Checks shall cite the
current or last contract number and indicate
whether the check is partial or final payment for all capital credits accrued.

(End of clause)

tracts when a cost-reimbursement contract, a fixed-price incentive contract,
or a contract providing for price redetermination is contemplated:
NOTICE OF INTENT TO DISALLOW COSTS (APR
1984)
(a) Notwithstanding any other clause of
this contract—
(1) The Contracting Officer may at any
time issue to the Contractor a written notice
of intent to disallow specified costs incurred
or planned for incurrence under this contract
that have been determined not to be allowable under the contract terms; and
(2) The Contractor may, after receiving a
notice under subparagraph (1) above, submit
a written response to the Contracting Officer, with justification for allowance of the
costs. If the Contractor does respond within
60 days, the Contracting Officer shall, within
60 days of receiving the response, either
make a written withdrawal of the notice or
issue a written decision.
(b) Failure to issue a notice under this Notice of Intent to Disallow Costs clause shall
not affect the Government’s rights to take
exception to incurred costs.

(End of clause)
52.242–2 Production Progress Reports.
As prescribed in 42.1107(a), insert the
following clause;
PRODUCTION PROGRESS REPORTS (APR 1991)
(a) The Contractor shall prepare and submit to the Contracting Officer the production progress reports specified in the contract Schedule.
(b) During any delay in furnishing a production progress report required under this
contract, the Contracting Officer may withhold from payment an amount not exceeding
$25,000 or 5 percent of the amount of this contract, whichever is less.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 56
FR 15156, Apr. 15, 1991]

52.242–3 Penalties for Unallowable
Costs.
As prescribed in 42.709–6, use the following clause:
PENALTIES FOR UNALLOWABLE COSTS (MAY
2001)

[59 FR 67025, Dec. 28, 1994]

52.242–1 Notice of Intent to Disallow
Costs.
As prescribed in 42.802, insert the following clause in solicitations and con-

(a) Definition. Proposal, as used in this
clause, means either—
(1) A final indirect cost rate proposal submitted by the Contractor after the expiration of its fiscal year which—

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52.242–4

48 CFR Ch. 1 (10–1–03 Edition)

(i) Relates to any payment made on the
basis of billing rates; or
(ii) Will be used in negotiating the final
contract price; or
(2) The final statement of costs incurred
and estimated to be incurred under the Incentive Price Revision clause (if applicable),
which is used to establish the final contract
price.
(b) Contractors which include unallowable
indirect costs in a proposal may be subject
to penalties. The penalties are prescribed in
10 U.S.C. 2324 or 41 U.S.C. 256, as applicable,
which is implemented in section 42.709 of the
Federal Acquisition Regulation (FAR).
(c) The Contractor shall not include in any
proposal any cost that is unallowable, as defined in Subpart 2.1 of the FAR, or an executive agency supplement to the FAR.
(d) If the Contracting Officer determines
that a cost submitted by the Contractor in
its proposal is expressly unallowable under a
cost principle in the FAR, or an executive
agency supplement to the FAR, that defines
the allowability of specific selected costs,
the Contractor shall be assessed a penalty
equal to—
(1) The amount of the disallowed cost allocated to this contract; plus
(2) Simple interest, to be computed—
(i) On the amount the Contractor was paid
(whether as a progress or billing payment) in
excess of the amount to which the Contractor was entitled; and
(ii) Using the applicable rate effective for
each six-month interval prescribed by the
Secretary of the Treasury pursuant to Pub.
L. 92–41 (85 Stat. 97).
(e) If the Contracting Officer determines
that a cost submitted by the Contractor in
its proposal includes a cost previously determined to be unallowable for that Contractor,
then the Contractor will be assessed a penalty in an amount equal to two times the
amount of the disallowed cost allocated to
this contract.
(f) Determinations under paragraphs (d)
and (e) of this clause are final decisions within the meaning of the Contract Disputes Act
of 1978 (41 U.S.C. 601, et seq.).
(g) Pursuant to the criteria in FAR 42.709–
5, the Contracting Officer may waive the
penalties in paragraph (d) or (e) of this
clause.
(h) Payment by the Contractor of any penalty assessed under this clause does not constitute repayment to the Government of any
unallowable cost which has been paid by the
Government to the Contractor.

(End of clause)
[60 FR 42659, Aug. 16, 1995, as amended at 66
FR 2135, Jan. 10, 2001]

52.242–4 Certification of Final Indirect
Costs.
As prescribed in 42.703–2(f), insert the
following clause:
CERTIFICATION OF FINAL INDIRECT COSTS (JAN
1997)
(a) The Contractor shall—
(1) Certify any proposal to establish or
modify final indirect cost rates;
(2) Use the format in paragraph (c) of this
clause to certify; and
(3) Have the certificate signed by an individual of the Contractor’s organization at a
level no lower than a vice president or chief
financial officer of the business segment of
the Contractor that submits the proposal.
(b) Failure by the Contractor to submit a
signed certificate, as described in this
clause, may result in final indirect costs at
rates unilaterally established by the Contracting Officer.
(c) The certificate of final indirect costs
shall read as follows:
CERTIFICATE OF FINAL INDIRECT COSTS
This is to certify that I have reviewed this
proposal to establish final indirect cost rates
and to the best of my knowledge and belief:
1. All costs included in this proposal
(identify proposal and date) to establish final
indirect cost rates for (identify period covered
by rate) are allowable in accordance with the
cost principles of the Federal Acquisition
Regulation (FAR) and its supplements applicable to the contracts to which the final indirect cost rates will apply; and
2. This proposal does not include any costs
which are expressly unallowable under applicable cost principles of the FAR or its supplements.
Firm: llllllllllllllllllll
Signature: llllllllllllllllll
Name of Certifying Official: llllllll
Title: llllllllllllllllllll
Date of Execution: lllllllllllll

(End of clause)
[60 FR 42664, Aug. 16, 1995, as amended at 62
FR 239, Jan. 2, 1997]

52.242–5—52.242–9

[Reserved]

52.242–10 F.o.b.
Origin—Government
Bills of Lading or Prepaid Postage.
As prescribed in 42.1404–2(a), insert
the following clause in solicitations
and contracts when f.o.b origin shipments are to be made using Government bills of lading or prepaid postage:

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Federal Acquisition Regulation

52.242–13

F.O.B. ORIGIN—GOVERNMENT BILLS OF LADING
OR PREPAID POSTAGE (APR 1984)
(a) F.o.b. origin shipments shall be made
on Government bills of lading, or, if the supplies are mailable, via the U.S. Postal Service or a foreign postal system, as appropriate, with postage costs prepaid by the
Contractor. Any direct charge for postage
costs shall be listed as a separate item on invoices for the supplies shipped. Use of agency
official indicia mail by Contractors is not
authorized. Quantities shall not be divided
into mailable lots for the express purpose of
avoiding movement by other modes of transportation.
(b) If Government bills of lading are not
furnished with the contract or applicable ordering document, the Contractor shall obtain them from the Contracting Officer or
designated representative.
(c) Unless otherwise directed, the Contractor shall address overseas parcel post to
an ultimate DOD consignee in care of a designated Army, Air Force, or Navy (fleet) post
office and not to, or in care of, a transportation officer, or other activity at a CONUS
water or aerial terminal for transshipment.

(End of clause)
52.242–11 F.o.b.
Origin—Government
Bills of Lading or Indicia Mail.
As prescribed in 42.1404–2(b), insert
the following clause:
F.O.B.—GOVERNMENT BILLS OF LADING OR
INDICIA MAIL (FEB 1993)
(a) F.o.b. origin shipments shall be made
on Government bills of lading, or, if the supplies are mailable, via the U.S. Postal System, using ‘‘Penalty Permit Imprint’’ indicia
labels.
(b) If Government bills of lading are not
furnished with the contract or applicable ordering document, the Contractor shall obtain them from the Contracting Officer or
designated representative.
(c) Unless otherwise directed, the Contractor shall address overseas parcel post to
an ultimate DOD consignee in care of a designated Army, Air Force, or Navy (fleet) post
office and not to, or in care of, a transportation officer, or other activity at a CONUS
water or aerial terminal for transshipment.

(End of clause)

REPORT OF SHIPMENT (REPSHIP) (JUNE 2003)
(a) Definition. Domestic destination, as used
in this clause, means—
(1) A destination within the contiguous
United States; or
(2) If shipment originates in Alaska or Hawaii, a destination in Alaska or Hawaii, respectively.
(b) Unless otherwise directed by the Contracting Officer, the Contractor shall—
(1) Send a prepaid notice of shipment to
the consignee transportation officer—
(i) For all shipments of—
(A) Classified material, protected sensitive, and protected controlled material;
(B) Explosives and poisons, classes A and
B;
(C) Radioactive materials requiring the use
of a III bar label; or
(ii) When a truckload/carload shipment of
supplies weighing 20,000 pounds or more, or a
shipment of less weight that occupies the
full visible capacity of a railway car or
motor vehicle, is given to any carrier (common, contract or private) for transportation
to a domestic destination (other than a port
for export);
(2) Transmit the notice by rapid means to
be received by the consignee transportation
officer at least 24 hours before the arrival of
the shipment; and
(3) Send, to the receiving transportation
officer, the Government bill of lading, commercial bill of lading or letter or other document containing the following information
and prominently identified as a ‘‘Report of
Shipment’’ or ‘‘REPSHIP FOR T.O.’’
Message Example:
REPSHIP FOR T.O. 81 JUN 01
TRANSPORTATION OFFICER
DEFENSE DEPOT, MEMPHIS, TENN.
SHIPPED YOUR DEPOT 1981 JUN 1 540
CTNS MENS COTTON TROUSERS, 30,240
LB, 1782 CUBE, VIA XX–YY*
IN
CAR
NO.
XX
123456**–GBL***–
C98000031****
CONTRACT
DLA
lll
ETA*****–JUNE 5 JONES & CO., JERSEY
CITY, N.J.
* Name of rail carrier, trucker, or other carrier.
** Vehicle identification.
*** Government bill of lading.
**** If not shipped by GBL, identify lading
document and state whether paid by contractor.
***** Estimated time of arrival.

(End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 57
FR 60587, Dec. 21, 1992]

[68 FR 28087, May 22, 2003]

52.242–12 Report
of
Shipment
(REPSHIP).
As prescribed in 42.1406–2, insert the
following clause:

52.242–13 Bankruptcy.
As prescribed in 42.903, insert the following clause:

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52.242–14

48 CFR Ch. 1 (10–1–03 Edition)

BANKRUPTCY (JUL 1995)
In the event the Contractor enters into
proceedings relating to bankruptcy, whether
voluntary or involuntary, the Contractor
agrees to furnish, by certified mail or electronic commerce method authorized by the
contract, written notification of the bankruptcy to the Contracting Officer responsible
for administering the contract. This notification shall be furnished within five days of
the initiation of the proceedings relating to
bankruptcy filing. This notification shall include the date on which the bankruptcy petition was filed, the identity of the court in
which the bankruptcy petition was filed, and
a listing of Government contract numbers
and contracting offices for all Government
contracts against which final payment has
not been made. This obligation remains in
effect until final payment under this contract.

20 days before the Contractor shall have notified the Contracting Officer in writing of
the act or failure to act involved (but this requirement shall not apply as to a claim resulting from a suspension order), and (2) unless the claim, in an amount stated, is asserted in writing as soon as practicable after
the termination of the suspension, delay, or
interruption, but not later than the date of
final payment under the contract.

(End of clause)
[48 FR 42478, Sept. 19, 1983. Redesignated and
amended at 60 FR 48251, 48256, Sept. 18, 1995]

52.242–15 Stop-Work Order.
As prescribed in 42.1305(b), insert the
following clause. The 90-day period
stated in the clause may be reduced to
less than 90 days.

(End of clause)

STOP-WORK ORDER (AUG 1989)

[56 FR 15156, Apr. 15, 1991, as amended at 60
FR 34741, July 3, 1995]

52.242–14 Suspension of Work.
As prescribed in 42.1305(a), insert the
following clause in solicitations and
contracts when a fixed-price construction or architect-engineer contract is
contemplated:
SUSPENSION OF WORK (APR 1984)
(a) The Contracting Officer may order the
Contractor, in writing, to suspend, delay, or
interrupt all or any part of the work of this
contract for the period of time that the Contracting Officer determines appropriate for
the convenience of the Government.
(b) If the performance of all or any part of
the work is, for an unreasonable period of
time, suspended, delayed, or interrupted (1)
by an act of the Contracting Officer in the
administration of this contract, or (2) by the
Contracting Officer’s failure to act within
the time specified in this contract (or within
a reasonable time if not specified), an adjustment shall be made for any increase in the
cost of performance of this contract (excluding profit) necessarily caused by the unreasonable suspension, delay, or interruption,
and the contract modified in writing accordingly. However, no adjustment shall be made
under this clause for any suspension, delay,
or interruption to the extent that performance would have been so suspended, delayed,
or interrupted by any other cause, including
the fault or negligence of the Contractor, or
for which an equitable adjustment is provided for or excluded under any other term
or condition of this contract.
(c) A claim under this clause shall not be
allowed (1) for any costs incurred more than

(a) The Contracting Officer may, at any
time, by written order to the Contractor, require the Contractor to stop all, or any part,
of the work called for by this contract for a
period of 90 days after the order is delivered
to the Contractor, and for any further period
to which the parties may agree. The order
shall be specifically identified as a stop-work
order issued under this clause. Upon receipt
of the order, the Contractor shall immediately comply with its terms and take all
reasonable steps to minimize the incurrence
of costs allocable to the work covered by the
order during the period of work stoppage.
Within a period of 90 days after a stop-work
order is delivered to the Contractor, or within any extension of that period to which the
parties shall have agreed, the Contracting
Officer shall either—
(1) Cancel the stop-work order; or
(2) Terminate the work covered by the
order as provided in the Default, or the Termination for Convenience of the Government, clause of this contract.
(b) If a stop-work order issued under this
clause is canceled or the period of the order
or any extension thereof expires, the Contractor shall resume work. The Contracting
Officer shall make an equitable adjustment
in the delivery schedule or contract price, or
both, and the contract shall be modified, in
writing, accordingly, if—
(1) The stop-work order results in an increase in the time required for, or in the
Contractor’s cost properly allocable to, the
performance of any part of this contract; and
(2) The Contractor asserts its right to the
adjustment within 30 days after the end of
the period of work stoppage; provided, that, if
the Contracting Officer decides the facts justify the action, the Contracting Officer may
receive and act upon a proposal submitted at

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52.242–17

any time before final payment under this
contract.
(c) If a stop-work order is not canceled and
the work covered by the order is terminated
for the conveninece of the Government, the
Contracting Officer shall allow reasonable
costs resulting from the stop-work order in
arriving at the termination settlement.
(d) If a stop-work order is not canceled and
the work covered by the order is terminated
for default, the Contracting Officer shall
allow, by equitable adjustment or otherwise,
reasonable costs resulting from the stopwork order.

(End of clause)
Alternate I (APR 1984). If this clause
is inserted in a cost-reimbursement
contract, substitute in paragraph (a)(2)
the words ‘‘the Termination clause of
this contract’’ for the words ‘‘the Default, or the Termination for Convenience of the Government clause of this
contract.’’ In paragraph (b) substitute
the words ‘‘an equitable adjustment in
the delivery schedule, the estimated
cost, the fee, or a combination thereof,
and in any other terms of the contract
that may be affected for the words an
equitable adjustment in the delivery
schedule or contract price, or both.’’
[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 2272, Jan. 15, 1985; 54 FR 29283, July 11,
1989. Redesignated and amended at 60 FR
48251, 48256, Sept. 18, 1995]

52.242–16

period to which the parties shall have
agreed, the Contracting Officer shall either—
(1) Cancel the stop-work order; or
(2) Terminate the work covered by the
order as provided in the Termination of
Work clause of this contract.
(b) If a stop-work order issued under this
clause is canceled or the period of the order
or any extension thereof expires, the Contractor shall resume work. The Contracting
Officer shall make an equitable adjustment
in the delivery completion schedule, the estimated cost, or both, and the contract shall
be modified, in writing, accordingly, if—
(1) The stop-work order results in an increase in the time required for, or in the
Contractor’s cost properly allocable to, the
performance of any part of this contract; and
(2) The Contractor asserts its right to the
adjustment within 30 days after the end of
the period of work stoppage; provided, that, if
the Contracting Officer decides the facts justify the action, the Contracting Officer may
receive and act upon a proposal submitted at
any time before final payment under this
contract.
(c) If a stop-work order is not canceled and
the work covered by the order is terminated,
the Contracting Officer shall allow reasonable costs resulting from the stop-work order
in arriving at the termination settlement.
(d) An appropriate equitable adjustment
may be made in any related contract of the
Contractor that provides for adjustment and
is affected by any stop-work order under this
clause. The Government shall not be liable
to the Contractor for damages or loss of profits because of a stop-work order issued under
this clause.

(End of clause)

Stop-Work Order—Facilities.

As prescribed in 42.1305(c), insert the
following clause. The 90-day period
stated in the clause may be reduced to
less than 90 days.
STOP–WORK ORDER—FACILITIES (AUG 1989)
(a) The Contracting Officer may, at any
time, by written order to the Contractor, require the Contractor to stop all, or any part,
of the acquisition, construction, or installation work called for by this contract for a
period of 90 days after the order is delivered
to the Contractor, and for any further period
to which the parties may agree. The order
shall be specifically identified as a stop-work
order issued under this clause. Upon receipt
of the order, the Contractor shall, at Government expense, immediately comply with its
terms and take all reasonable steps to minimize the incurrence of cost allocable to the
work covered by the order during the period
of work stoppage. Within a period of 90 days
after a stop-work order is delivered to the
Contractor, or within any extension of that

[48 FR 42478, Sept. 19, 1983, as amended at 54
FR 29283, July 11, 1989. Redesignated and
amended at 60 FR 48251, 48256, Sept. 18, 1995]

52.242–17 Government Delay of Work.
As prescribed in 42.1305(d), insert the
following clause in solicitations and
contracts when a fixed-price contract
is contemplated for supplies other than
commercial or modified-commercial
items. The clause use is optional when
a fixed-price contract is contemplated
for services, or for supplies that are
commercial or modified-commercial
items.
GOVERNMENT DELAY OF WORK (APR 1984)
(a) If the performance of all or any part of
the work of this contract is delayed or interrupted (1) by an act of the Contracting Officer in the administration of this contract
that is not expressly or impliedly authorized
by this contract, or (2) by a failure of the

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52.243–1

48 CFR Ch. 1 (10–1–03 Edition)

Contracting Officer to act within the time
specified in this contract, or within a reasonable time if not specified, an adjustment (excluding profit) shall be made for any increase in the cost of performance of this contract caused by the delay or interruption and
the contract shall be modified in writing accordingly. Adjustment shall also be made in
the delivery or performance dates and any
other contractual term or condition affected
by the delay or interruption. However, no adjustment shall be made under this clause for
any delay or interruption to the extent that
performance would have been delayed or interrupted by any other cause, including the
fault or negligence of the Contractor, or for
which an adjustment is provided or excluded
under any other term or condition of this
contract.
(b) A claim under this clause shall not be
allowed (1) for any costs incurred more than
20 days before the Contractor shall have notified the Contracting Officer in writing of
the act or failure to act involved, and (2) unless the claim, in an amount stated, is asserted in writing as soon as practicable after
the termination of the delay or interruption,
but not later than the day of final payment
under the contract.

(End of clause)
[48 FR 42478, Sept. 19, 1983. Redesignated and
amended at 60 FR 48251, 48256, Sept. 18, 1995]

52.243–1 Changes—Fixed-Price.
As prescribed in 43.205(e), insert the
following clause:
CHANGES—FIXED-PRICE (AUG 1987)
(a) The Contracting Officer may at any
time, by written order, and without notice to
the sureties, if any, make changes within the
general scope of this contract in any one or
more of the following:
(2) Drawings, designs, or specifications
when the supplies to be furnished are to be
specially manufactured for the Government
in accordance with the drawings, designs, or
specifications.
(2) Method of shipment or packing.
(3) Place of delivery.
(b) If any such change causes an increase
or decrease in the cost of, or the time required for, performance of any part of the
work under this contract, whether or not
changed by the order, the Contracting Officer shall make an equitable adjustment in
the contract price, the delivery schedule, or
both, and shall modify the contract.
(c) The Contractor must assert its right to
an adjustment under this clause within 30
days from the date of receipt of the written
order. However, if the Contracting Officer
decides that the facts justify it, the Contracting Officer may receive and act upon a

proposal submitted before final payment of
the contract.
(d) If the Contractor’s proposal includes
the cost of property made obsolete or excess
by the change, the Contracting Officer shall
have the right to prescribe the manner of the
disposition of the property.
(e) Failure to agree to any adjustment
shall be a dispute under the Disputes clause.
However, nothing in this clause shall excuse
the Contractor from proceeding with the
contract as changed.

(End of clause)
Alternate I (APR 1984). If the requirement is for services, other than architect-engineer or other professional
services, and no supplies are to be furnished, substitute the following paragraph (a) for paragraph (a) of the basic
clause:
(a) The Contracting Officer may at any
time, by written order, and without notice to
the sureties, if any, make changes within the
general scope of this contract in any one or
more of the following:
(1) Description of services to be performed.
(2) Time of performance (i.e., hours of the
day, days of the week, etc.).
(3) Place of performance of the services.

Alternate II (APR 1984). If the requirement is for services (other than architect-engineer services, transportation,
or research and development) and supplies are to be furnished, substitute the
following paragraph (a) for paragraph
(a) of the basic clause:
(a) The Contracting Officer may at any
time, by written order, and without notice to
the sureties, if any, make changes within the
general scope of this contract in any one or
more of the following:
(1) Description of services to be performed.
(2) Time of performance (i.e., hours of the
day, days of the week, etc.).
(3) Place of performance of the services.
(4) Drawings, designs, or specifications
when the supplies to be furnished are to be
specially manufactured for the Government
in accordance with the drawings, designs, or
specifications.
(5) Method of shipment or packing of supplies.
(6) Place of delivery.

Alternate III (APR 1984). If the requirement is for architect-engineer or
other professional services, substitute
the following paragraph (a) for paragraph (a) of the basic clause and add
the following paragraph (f):

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Federal Acquisition Regulation

52.243–2

(a) The Contracting Officer may at any
time, by written order, and without notice to
the sureties, if any, make changes within the
general scope of this contract in the services
to be performed.
(f) No services for which an additional cost
or fee will be charged by the Contractor shall
be furnished without the prior written authorization of the Contracting Officer.

Alternate IV (APR 1984). If the requirement is for transportation services, substitute the following paragraph (a) for paragraph (a) of the basic
clause:
(a) The Contracting Officer may at any
time, by written order, and without notice to
the sureties, if any, make changes within the
general scope of this contract in any one or
more of the following:
(1) Specifications.
(2) Work or services.
(3) Place of origin.
(4) Place of delivery.
(5) Tonnage to be shipped.
(6) Amount of Government-furnished property.

Alternate V (APR 1984). If the requirement is for research and development
and it is desired to include the clause,
substitute the following subparagraphs
(a)(1) and (a)(3) and paragraph (b) for
subparagraphs (a)(1) and (a)(3) and
paragraph (b) of the basic clause:
(1) Drawings, designs, or specifications.
(3) Place of inspection, delivery, or acceptance.
(b) If any such change causes an increase
or decrease in the cost of, or time required
for, performing this contract, whether or not
changed by the order, the Contracting Officer shall make an equitable adjustment in
(1) the contract price, the time of performance, or both; and (2) other affected terms of
the contract, and shall modify the contract
accordingly.
[48 FR 42478, Sept. 19, 1983, as amended at 52
FR 30079, Aug. 12, 1987; 54 FR 48995, Nov. 28,
1989; 60 FR 34761, July 3, 1995]

52.243–2 Changes—Cost-Reimbursement.
As prescribed in 43.205(b)(1), insert
the following clause. The 30–day period
may be varied according to agency procedures.
CHANGES—COST-REIMBURSEMENT (AUG 1987)
(a) The Contracting Officer may at any
time, by written order, and without notice to
the sureties, if any, make changes within the

general scope of this contract in any one or
more of the following:
(1) Drawings, designs, or specifications
when the supplies to be furnished are to be
specially manufactured for the Government
in accordance with the drawings, designs, or
specifications.
(2) Method of shipment or packing.
(3) Place of delivery.
(b) If any such change causes an increase
or decrease in the estimated cost of, or the
time required for, performance of any part of
the work under this contract, whether or not
changed by the order, or otherwise affects
any other terms and conditions of this contract, the Contracting Officer shall make an
equitable adjustment in the (1) estimated
cost, delivery or completion schedule, or
both; (2) amount of any fixed fee; and (3)
other affected terms and shall modify the
contract accordingly.
(c) The Contractor must assert its right to
an adjustment under this clause within 30
days from the date of receipt of the written
order. However, if the Contracting Officer
decides that the facts justify it, the Contracting Officer may receive and act upon a
proposal submitted before final payment of
the contract.
(d) Failure to agree to any adjustment
shall be a dispute under the Disputes clause.
However, nothing in this clause shall excuse
the Contractor from proceeding with the
contract as changed.
(e) Notwithstanding the terms and conditions of paragraphs (a) and (b) above, the estimated cost of this contract and, if this contract is incrementally funded, the funds allotted for the performance of this contract,
shall not be increased or considered to be increased except by specific written modification of the contract indicating the new contract estimated cost and, if this contract is
incrementally funded, the new amount allotted to the contract. Until this modification
is made, the Contractor shall not be obligated to continue performance or incur costs
beyond the point established in the Limitation of Cost or Limitation of Funds clause of
this contract.

(End of clause)
Alternate I (APR 1984). If the requirement is for services and no supplies are
to be furnished, substitute the following paragraph (a) for paragraph (a)
of the basic clause:
(a) The Contracting Officer may at any
time, by written order, and without notice to
the sureties, if any, make changes within the
general scope of this contract in any one or
more of the following:
(1) Description of services to be performed.
(2) Time of performance (i.e., hours of the
day, days of the week, etc.).

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52.243–3

48 CFR Ch. 1 (10–1–03 Edition)

(3) Place of performance of the services.

Alternate II (APR 1984). If the requirement is for services and supplies are to
be furnished, substitute the following
paragraph (a) for paragraph (a) of the
basic clause:
(a) The Contracting Officer may at any
time, by written order, and without notice to
the sureties, if any, make changes within the
general scope of this contract in any one or
more of the following:
(1) Description of services to be performed.
(2) Time of performance (i.e., hours of the
day, days of the week, etc.).
(3) Place of performance of the services.
(4) Drawings, designs, or specifications
when the supplies to be furnished are to be
specially manufactured for the Government
in accordance with the drawings, designs, or
specifications.
(5) Method of shipment or packing of supplies.
(6) Place of delivery.

Alternate III (APR 1984). If the requirement is for construction, substitute the following paragraph (a) for
paragraph (a) of the basic clause:
(a) The Contracting Officer may at any
time, by written order, and without notice to
the sureties, if any, make changes within the
general scope of this contract in the plans
and specifications or instructions incorporated in the contract.

Alternate IV (APR 1984). If a facilities
contract is contemplated, substitute
the following paragraphs (a) and (e) for
paragraphs (a) and (e) of the basic
clause:
(a) The Contracting Officer may at any
time, by written order, and without notice to
the sureties, if any, make changes within the
general scope of this contract in the facilities or work described in the schedule.
(e) Any related contract with the Contractor may be equitably adjusted if it provides for adjustment and is affected by a
change ordered under this clause.

Alternate V (APR 1984). If the requirement is for research and development,
and it is desired to include the clause,
substitute the following subparagraphs
(a)(1) and (a)(3) for subparagraphs (a)(1)
and (a)(3) of the basic clause:
(1) Drawings, designs, or specifications.
(3) Place of inspection, delivery, or acceptance.
[48 FR 42478, Sept. 19, 1983, as amended at 52
FR 30079, Aug. 12, 1987]

52.243–3 Changes—Time-and-Materials
or Labor-Hours.
As prescribed in 43.205(c), insert the
following clause:
CHANGES—TIME-AND-MATERIALS OR LABORHOURS (SEP 2000)
(a) The Contracting Officer may at any
time, by written order, and without notice to
the sureties, if any, make changes within the
general scope of this contract in any one or
more of the following:
(1) Description of services to be performed.
(2) Time of performance (i.e., hours of the
day, days of the week, etc.).
(3) Place of performance of the services.
(4) Drawings, designs, or specifications
when the supplies to be furnished are to be
specially manufactured for the Government
in accordance with the drawings, designs, or
specifications.
(5) Method of shipment or packing of supplies.
(6) Place of delivery.
(7) Amount of Government-furnished property.
(b) If any change causes an increase or decrease in any hourly rate, the ceiling price,
or the time required for performance of any
part of the work under this contract, whether or not changed by the order, or otherwise
affects any other terms and conditions of
this contract, the Contracting Officer will
make an equitable adjustment in any one or
more of the following and will modify the
contract accordingly:
(1) Ceiling price.
(2) Hourly rates.
(3) Delivery schedule.
(4) Other affected terms.
(c) The Contractor shall assert its right to
an adjustment under this clause within 30
days from the date of receipt of the written
order. However, if the Contracting Officer
decides that the facts justify it, the Contracting Officer may receive and act upon a
proposal submitted before final payment of
the contract.
(d) Failure to agree to any adjustment will
be a dispute under the Disputes clause. However, nothing in this clause excuses the Contractor from proceeding with the contract as
changed.

(End of clause)
[65 FR 46073, July 26, 2000]

52.243–4

Changes.

As prescribed in 43.205(d), insert the
following clause. The 30–day period
may be varied according to agency procedures.

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CHANGES (AUG 1987)

(End of clause)

(a) The Contracting Officer may, at any
time, without notice to the sureties, if any,
by written order designated or indicated to
be a change order, make changes in the work
within the general scope of the contract, including changes—
(1) In the specifications (including drawings and designs);
(2) In the method or manner of performance of the work;
(3) In the Government-furnished facilities,
equipment, materials, services, or site; or
(4) Directing acceleration in the performance of the work.
(b) Any other written or oral order (which,
as used in this paragraph (b), includes direction, instruction, interpretation, or determination) from the Contracting Officer that
causes a change shall be treated as a change
order under this clause; provided, that the
Contractor gives the Contracting Officer
written notice stating (1) the date, circumstances, and source of the order and (2)
that the Contractor regards the order as a
change order.
(c) Except as provided in this clause, no
order, statement, or conduct of the Contracting Officer shall be treated as a change
under this clause or entitle the Contractor
to an equitable adjustment.
(d) If any change under this clause causes
an increase or decrease in the Contractor’s
cost of, or the time required for, the performance of any part of the work under this
contract, whether or not changed by any
such order, the Contracting Officer shall
make an equitable adjustment and modify
the contract in writing. However, except for
an adjustment based on defective specifications, no adjustment for any change under
paragraph (b) of this clause shall be made for
any costs incurred more than 20 days before
the Contractor gives written notice as required. In the case of defective specifications
for which the Government is responsible, the
equitable adjustment shall include any increased cost reasonably incurred by the Contractor in attempting to comply with the defective specifications.
(e) The Contractor must assert its right to
an adjustment under this clause within 30
days after (1) receipt of a written change
order under paragraph (a) of this clause or (2)
the furnishing of a written notice under
paragraph (b) of this clause, by submitting
to the Contracting Officer a written statement describing the general nature and
amount of proposal, unless this period is extended by the Government. The statement of
proposal for adjustment may be included in
the notice under paragraph (b) above.
(f) No proposal by the Contractor for an equitable adjustment shall be allowed if asserted after final payment under this contract.

[48 FR 42478, Sept. 19, 1983, as amended at 52
FR 30079, Aug. 12, 1987]

52.243–5 Changes and Changed Conditions.
As prescribed in 43.205(e), insert the
following clause:
CHANGES AND CHANGED CONDITIONS (APR
1984)
(a) The Contracting Officer may, in writing, order changes in the drawings and specifications within the general scope of the contract.
(b) The Contractor shall promptly notify
the Contracting Officer, in writing, of subsurface or latent physical conditions differing materially from those indicated in
this contract or unknown unusual physical
conditions at the site before proceeding with
the work.
(c) If changes under paragraph (a) or conditions under paragraph (b) increase or decrease the cost of, or time required for performing the work, the Contracting Officer
shall make an equitable adjustment (see
paragraph (d)) upon submittal of a proposal
for adjustment (hereafter referred to as proposal) by the Contractor before final payment under the contract.
(d) The Contracting Officer shall not make
an equitable adjustment under paragraph (b)
unless—
(1) The Contractor has submitted and the
Contracting Officer has received the required
written notice; or
(2) The Contracting Officer waives the requirement for the written notice.
(e) Failure to agree to any adjustment
shall be a dispute under the Disputes clause.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34761, July 3, 1995]

52.243–6 Change Order Accounting.
As prescribed in 43.205(f), the contracting officer may insert a clause,
substantially the same as follows:
CHANGE ORDER ACCOUNTING (APR 1984)
The Contracting Officer may require
change order accounting whenever the estimated cost of a change or series of related
changes exceeds $100,000. The Contractor, for
each change or series of related changes,
shall maintain separate accounts, by job
order or other suitable accounting procedure, of all incurred segregable, direct costs
(less allocable credits) of work, both changed
and not changed, allocable to the change.

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52.243–7

48 CFR Ch. 1 (10–1–03 Edition)

The Contractor shall maintain such accounts
until the parties agree to an equitable adjustment for the changes ordered by the Contracting Officer or the matter is conclusively
disposed of in accordance with the Disputes
clause.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 54
FR 29297, July 11, 1989; 56 FR 15156, Apr. 15,
1991]

52.243–7 Notification of Changes.
As prescribed in 43.107, the contracting officer may insert a clause
substantially the same as the following
in solicitations and contracts. The
clause is available for use primarily in
negotiated research and development
or supply contracts for the acquisition
of major weapon systems or principal
subsystems. If the contract amount is
expected to be less than $1,000,000, the
clause shall not be used, unless the
contracting officer anticipates that situations will arise that may result in a
contractor alleging that the Government has effected changes other than
those identified as such in writing and
signed by the contracting officer.
NOTIFICATION OF CHANGES (APR 1984)
(a) Definitions.
Contracting Officer, as used in this clause,
does not include any representative of the
Contracting Officer.
Specifically Authorized Representative (SAR),
as used in this clause, means any person the
Contracting Officer has so designated by
written notice (a copy of which shall be provided to the Contractor) which shall refer to
this subparagraph and shall be issued to the
designated representative before the SAR exercises such authority.
(b) Notice. The primary purpose of this
clause is to obtain prompt reporting of Government conduct that the Contractor considers to constitute a change to this contract. Except for changes identified as such
in writing and signed by the Contracting Officer, the Contractor shall notify the Administrative Contracting Officer in writing
promptly, within l (to be negotiated) calendar days from the date that the Contractor identifies any Government conduct
(including actions, inactions, and written or
oral communications) that the Contractor
regards as a change to the contract terms
and conditions. On the basis of the most accurate information available to the Contractor, the notice shall state—
(1) The date, nature, and circumstances of
the conduct regarded as a change;

(2) The name, function, and activity of
each Government individual and Contractor
official or employee involved in or knowledgeable about such conduct;
(3) The identification of any documents
and the substance of any oral communication involved in such conduct;
(4) In the instance of alleged acceleration
of scheduled performance or delivery, the
basis upon which it arose;
(5) The particular elements of contract performance for which the Contractor may seek
an equitable adjustment under this clause,
including—
(i) What contract line items have been or
may be affected by the alleged change;
(ii) What labor or materials or both have
been or may be added, deleted, or wasted by
the alleged change;
(iii) To the extent practicable, what delay
and disruption in the manner and sequence
of performance and effect on continued performance have been or may be caused by the
alleged change;
(iv) What adjustments to contract price,
delivery schedule, and other provisions affected by the alleged change are estimated;
and
(6) The Contractor’s estimate of the time
by which the Government must respond to
the Contractor’s notice to minimize cost,
delay or disruption of performance.
(c) Continued performance. Following submission of the notice required by (b) above,
the Contractor shall diligently continue performance of this contract to the maximum
extent possible in accordance with its terms
and conditions as construed by the Contractor, unless the notice reports a direction
of the Contracting Officer or a communication from a SAR of the Contracting Officer,
in either of which events the Contractor
shall continue performance; provided, however, that if the Contractor regards the direction or communication as a change as described in (b) above, notice shall be given in
the manner provided. All directions, communications, interpretations, orders and similar
actions of the SAR shall be reduced to writing promptly and copies furnished to the
Contractor and to the Contracting Officer.
The Contracting Officer shall promptly
countermand any action which exceeds the
authority of the SAR.
(d) Government response. The Contracting
Officer shall promptly, within l (to be negotiated) calendar days after receipt of notice,
respond to the notice in writing. In responding, the Contracting Officer shall either—
(1) Confirm that the conduct of which the
Contractor gave notice constitutes a change
and when necessary direct the mode of further performance;
(2) Countermand any communication regarded as a change;
(3) Deny that the conduct of which the
Contractor gave notice constitutes a change

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52.244–2

and when necessary direct the mode of further performance; or
(4) In the event the Contractor’s notice information is inadequate to make a decision
under (1), (2), or (3) above, advise the Contractor what additional information is required, and establish the date by which it
should be furnished and the date thereafter
by which the Government will respond.
(e) Equitable adjustments. (1) If the Contracting Officer confirms that Government
conduct effected a change as alleged by the
Contractor, and the conduct causes an increase or decrease in the Contractor’s cost
of, or the time required for, performance of
any part of the work under this contract,
whether changed or not changed by such
conduct, an equitable adjustment shall be
made—
(i) In the contract price or delivery schedule or both; and
(ii) In such other provisions of the contract
as may be affected.
(2) The contract shall be modified in writing accordingly. In the case of drawings, designs or specifications which are defective
and for which the Government is responsible,
the equitable adjustment shall include the
cost and time extension for delay reasonably
incurred by the Contractor in attempting to
comply with the defective drawings, designs
or specifications before the Contractor identified, or reasonably should have identified,
such defect. When the cost of property made
obsolete or excess as a result of a change
confirmed by the Contracting Officer under
this clause is included in the equitable adjustment, the Contracting Officer shall have
the right to prescribe the manner of disposition of the property. The equitable adjustment shall not include increased costs or
time extensions for delay resulting from the
Contractor’s failure to provide notice or to
continue performance as provided, respectively, in (b) and (c) above.
NOTE: The phrases contract price and cost
wherever they appear in the clause, may be
appropriately modified to apply to cost-reimbursement or incentive contracts, or to
combinations thereof.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 55
FR 25534, June 21, 1990; 55 FR 38518, Sept. 18,
1990]

52.244–1

[Reserved]

52.244–2

Subcontracts.

As prescribed in 44.204(a)(1), insert
the following clause:
SUBCONTRACTS (AUG 1998)
(a) Definitions. As used in this clause—

Approved purchasing system means a Contractor’s purchasing system that has been
reviewed and approved in accordance with
Part 44 of the Federal Acquisition Regulation (FAR).
Consent to subcontract means the Contracting Officer’s written consent for the
Contractor to enter into a particular subcontract.
Subcontract means any contract, as defined
in FAR Subpart 2.1, entered into by a subcontractor to furnish supplies or services for
performance of the prime contract or a subcontract. It includes, but is not limited to,
purchase orders, and changes and modifications to purchase orders.
(b) This clause does not apply to subcontracts for special test equipment when
the contract contains the clause at FAR
52.245–18, Special Test Equipment.
(c) When this clause is included in a fixedprice type contract, consent to subcontract
is required only on unpriced contract actions
(including unpriced modifications or unpriced delivery orders), and only if required
in accordance with paragraph (d) or (e) of
this clause.
(d) If the Contractor does not have an approved purchasing system, consent to subcontract is required for any subcontract
that—
(1) Is of the cost-reimbursement, time-andmaterials, or labor-hour type; or
(2) Is fixed-price and exceeds—
(i) For a contract awarded by the Department of Defense, the Coast Guard, or the National Aeronautics and Space Administration, the greater of the simplified acquisition threshold or 5 percent of the total estimated cost of the contract; or
(ii) For a contract awarded by a civilian
agency other than the Coast Guard and the
National Aeronautics and Space Administration, either the simplified acquisition
threshold or 5 percent of the total estimated
cost of the contract.
(e) If the Contractor has an approved purchasing system, the Contractor nevertheless
shall obtain the Contracting Officer’s written consent before placing the following subcontracts:
llllllllllllllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll
(f)(1) The Contractor shall notify the Contracting Officer reasonably in advance of
placing any subcontract or modification
thereof for which consent is required under
paragraph (c), (d), or (e) of this clause, including the following information:
(i) A description of the supplies or services
to be subcontracted.
(ii) Identification of the type of subcontract to be used.
(iii) Identification of the proposed subcontractor.

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52.244–3

48 CFR Ch. 1 (10–1–03 Edition)

(iv) The proposed subcontract price.
(v) The subcontractor’s current, complete,
and accurate cost or pricing data and Certificate of Current Cost or Pricing Data, if required by other contract provisions.
(vi) The subcontractor’s Disclosure Statement or Certificate relating to Cost Accounting Standards when such data are required by other provisions of this contract.
(vii) A negotiation memorandum reflecting—
(A) The principal elements of the subcontract price negotiations;
(B) The most significant considerations
controlling establishment of initial or revised prices;
(C) The reason cost or pricing data were or
were not required;
(D) The extent, if any, to which the Contractor did not rely on the subcontractor’s
cost or pricing data in determining the price
objective and in negotiating the final price;
(E) The extent to which it was recognized
in the negotiation that the subcontractor’s
cost or pricing data were not accurate, complete, or current; the action taken by the
Contractor and the subcontractor; and the
effect of any such defective data on the total
price negotiated;
(F) The reasons for any significant difference between the Contractor’s price objective and the price negotiated; and
(G) A complete explanation of the incentive fee or profit plan when incentives are
used. The explanation shall identify each
critical performance element, management
decisions used to quantify each incentive
element, reasons for the incentives, and a
summary of all trade-off possibilities considered.
(2) The Contractor is not required to notify
the Contracting Officer in advance of entering into any subcontract for which consent
is not required under paragraph (c), (d), or (e)
of this clause.
(g) Unless the consent or approval specifically provides otherwise, neither consent by
the Contracting Officer to any subcontract
nor approval of the Contractor’s purchasing
system shall constitute a determination—
(1) Of the acceptability of any subcontract
terms or conditions;
(2) Of the allowability of any cost under
this contract; or
(3) To relieve the Contractor of any responsibility for performing this contract.
(h) No subcontract or modification thereof
placed under this contract shall provide for
payment on a cost-plus-a-percentage-of-cost
basis, and any fee payable under cost-reimbursement type subcontracts shall not exceed the fee limitations in FAR 15.404–
4(c)(4)(i).
(i) The Contractor shall give the Contracting Officer immediate written notice of
any action or suit filed and prompt notice of
any claim made against the Contractor by

any subcontractor or vendor that, in the
opinion of the Contractor, may result in litigation related in any way to this contract,
with respect to which the Contractor may be
entitled to reimbursement from the Government.
(j) The Government reserves the right to
review the Contractor’s purchasing system
as set forth in FAR Subpart 44.3.
(k) Paragraphs (d) and (f) of this clause do
not apply to the following subcontracts,
which were evaluated during negotiations:
llllllllllllllllllllllll
llllllllllllllllllllllll
llllllllllllllllllllllll

(End of clause)
Alternate I (Aug 1998). As prescribed
in 44.204(a)(2)(i), substitute the following paragraph (f)(2) for paragraph
(f)(2) of the basic clause:
(f)(2) If the Contractor has an approved
purchasing system and consent is not required under paragraph (c), (d), or (e) of this
clause, the Contractor nevertheless shall notify the Contracting Officer reasonably in
advance of entering into any (i) cost-plusfixed-fee subcontract, or (ii) fixed-price subcontract that exceeds the greater of the simplified acquisition threshold or 5 percent of
the total estimated cost of this contract.
The notification shall include the information required by paragraphs (f)(1)(i) through
(f)(1)(iv) of this clause.

Alternate II (Aug 1998). As prescribed
in 44.204(a)(2)(ii), substitute the following paragraph (f)(2) for paragraph
(f)(2) of the basic clause:
(f)(2) If the Contractor has an approved
purchasing system and consent is not required under paragraph (c), (d), or (e) of this
clause, the Contractor nevertheless shall notify the Contracting Officer reasonably in
advance of entering into any (i) cost-plusfixed-fee subcontract, or (ii) fixed-price subcontract that exceeds either the simplified
acquisition threshold or 5 percent of the
total estimated cost of this contract. The notification shall include the information required by paragraphs (f)(1)(i) through
(f)(1)(iv) of this clause.
[63 FR 34061, June 22, 1998]

52.244–3

[Reserved]

52.244–4 Subcontractors and outside
associates and consultants (Architect-engineer services).
As prescribed in 44.204(b), insert the
following clause:

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52.245–1

SUBCONTRACTORS AND OUTSIDE ASSOCIATES
AND
CONSULTANTS (ARCHITECT-ENGINEER
SERVICES) (AUG 1998)

(a) The Contractor shall select subcontractors (including suppliers) on a competitive
basis to the maximum practical extent consistent with the objectives and requirements
of the contract.
(b) If the Contractor is an approved mentor
under the Department of Defense Pilot Mentor-Prote´ge´ Program (Pub. L. 101–510, section
831 as amended), the Contractor may award
subcontracts under this contract on a noncompetitive basis to its prote´ge´s.

items as components of items to be supplied
under this contract.
(c)(1) The Contractor shall insert the following clauses in subcontracts for commercial items:
(i) 52.219–8, Utilization of Small Business
Concerns (OCT 2000) (15 U.S.C. 637(d)(2) and
(3)), in all subcontracts that offer further
subcontracting opportunities. If the subcontract (except subcontracts to small business concerns) exceeds $500,000 ($1,000,000 for
construction of any public facility), the subcontractor must include 52.219–8 in lower tier
subcontracts that offer subcontracting opportunities.
(ii) 52.222–26, Equal Opportunity (MAY 2002)
(E.O. 11246).
(iii) 52.222–35, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (Dec
2001) (38 U.S.C. 4212(a));
(iv) 52.222–36, Affirmative Action for Workers with Disabilities (JUN 1998) (29 U.S.C.
793).
(v) 52.247–64, Preference for Privately
Owned U.S.-Flag Commercial Vessels (APR
2003) (46 U.S.C. Appx 1241 and 10 U.S.C. 2631)
(flow down required in accordance with paragraph (d) of FAR clause 52.247–64).
(2) While not required, the Contractor may
flow down to subcontracts for commercial
items a minimal number of additional
clauses necessary to satisfy its contractual
obligations.
(d) The Contractor shall include the terms
of this clause, including this paragraph (d),
in subcontracts awarded under this contract.

(End of clause)

(End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34762, July 3, 1995; 61 FR 2638, Jan 26, 1996;
61 FR 67420, Dec. 20, 1996; 63 FR 34062, June
22, 1998]

[60 FR 48256, Sept. 18, 1995, as amended at 63
FR 9059, Feb. 23, 1998; 63 FR 58603, Oct. 30,
1998; 66 FR 2140, Jan. 10, 2001; 66 FR 53491,
Nov. 22, 2001; 67 FR 21539, Apr. 30, 2002; 68 FR
13204, Mar. 18, 2003; 68 FR 28098, May 22, 2003]

Any subcontractors and outside associates
or consultants required by the Contractor in
connection with the services covered by the
contract will be limited to individuals or
firms that were specifically identified and
agreed to during negotiations. The Contractor shall obtain the Contracting Officer’s
written consent before making any substitution for these subcontractors, associates,
or consultants.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 63
FR 34062, June 22, 1998]

52.244–5 Competition
tracting.

in

Subcon-

As prescribed in 44.204(c), insert the
following clause:
COMPETITION IN SUBCONTRACTING (DEC 1996)

52.244–6 Subcontracts for Commercial
Items.
As prescribed in 44.403, insert the following clause:
SUBCONTRACTS FOR COMMERCIAL ITEMS (APR.
2003)
(a) Definitions. As used in this clause—
Commercial item has the meaning contained
in the clause at 52.202–1, Definitions.
Subcontract includes a transfer of commercial items between divisions, subsidiaries, or
affiliates of the Contractor or subcontractor
at any tier.
(b) To the maximum extent practicable,
the Contractor shall incorporate, and require
its subcontractors at all tiers to incorporate,
commercial items or nondevelopmental

52.245–1

Property Records.

As prescribed in 45.106(a), insert the
following clause in solicitations and
contracts when the conditions in
45.105(b) exist and the Government
maintains the Government’s official
Government property records:
PROPERTY RECORDS (APR 1984)
The Government shall maintain the Government’s official property records in connection with Government property under
this contract. The Government Property
clause is hereby modified by deleting the requirement for the Contractor to maintain
such records.

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48 CFR Ch. 1 (10–1–03 Edition)
(End of clause)

52.245–2 Government Property (FixedPrice Contracts).
As prescribed in 45.106(b)(1), insert
the following clause:
GOVERNMENT PROPERTY (FIXED-PRICE
CONTRACTS) (JUNE 2003)
(a) Government-furnished property—(1) The
Government shall deliver to the Contractor,
for use in connection with and under the
terms of this contract, the Government-furnished property described in the Schedule or
specifications together with any related data
and information that the Contractor may request and is reasonably required for the intended use of the property (hereinafter referred to as Government-furnished property).
(2) The delivery or performance dates for
this contract are based upon the expectation
that Government-furnished property suitable
for use (except for property furnished as-is)
will be delivered to the Contractor at the
times stated in the Schedule or, if not so
stated, in sufficient time to enable the Contractor to meet the contract’s delivery or
performance dates.
(3) If Government-furnished property is received by the Contractor in a condition not
suitable for the intended use, the Contractor
shall, upon receipt of it, notify the Contracting Officer, detailing the facts, and, as
directed by the Contracting Officer and at
Government expense, either repair, modify,
return, or otherwise dispose of the property.
After completing the directed action and
upon written request of the Contractor, the
Contracting Officer shall make an equitable
adjustment as provided in paragraph (h) of
this clause.
(4) If Government-furnished property is not
delivered to the Contractor by the required
time, the Contracting Officer shall, upon the
Contractor’s timely written request, make a
determination of the delay, if any, caused
the Contractor and shall make an equitable
adjustment in accordance with paragraph (h)
of this clause.
(b) Changes in Government-furnished property. (1) The Contracting Officer may, by
written notice, (i) decrease the Governmentfurnished property provided or to be provided
under this contract, or (ii) substitute other
Government-furnished property for the property to be provided by the Government, or to
be acquired by the Contractor for the Government, under this contract. The Contractor shall promptly take such action as
the Contracting Officer may direct regarding
the removal, shipment, or disposal of the
property covered by such notice.
(2) Upon the Contractor’s written request,
the Contracting Officer shall make an equitable adjustment to the contract in accordance with paragraph (h) of this clause, if the

Government has agreed in the Schedule to
make the property available for performing
this contract and there is any—
(i) Decrease or substitution in this property pursuant to subparagraph (b)(1) above;
or
(ii) Withdrawal of authority to use this
property, if provided under any other contract or lease.
(c) Title in Government property. (1) The
Government shall retain title to all Government-furnished property.
(2) All Government-furnished property and
all property acquired by the Contractor, title
to which vests in the Government under this
paragraph (collectively referred to as Government property), are subject to the provisions
of this clause. However, special tooling accountable to this contract is subject to the
provisions of the Special Tooling clause and
is not subject to the provisions of this
clause. Title to Government property shall
not be affected by its incorporation into or
attachment to any property not owned by
the Government, nor shall Government property become a fixture or lose its identity as
personal property by being attached to any
real property.
(3) Title to each item of facilities and special test equipment acquired by the Contractor for the Government under this contract shall pass to and vest in the Government when its use in performing this contract commences or when the Government
has paid for it, whichever is earlier, whether
or not title previously vested in the Government.
(4) If this contract contains a provision directing the Contractor to purchase material
for which the Government will reimburse the
Contractor as a direct item of cost under
this contract—
(i) Title to material purchased from a vendor shall pass to and vest in the Government
upon the vendor’s delivery of such material;
and
(ii) Title to all other material shall pass to
and vest in the Government upon—
(A) Issuance of the material for use in contract performance;
(B) Commencement of processing of the
material or its use in contract performance;
or
(C) Reimbursement of the cost of the material by the Government, whichever occurs
first.
(d) Use of Government property. The Government property shall be used only for performing this contract, unless otherwise provided in this contract or approved by the
Contracting Officer.
(e) Property administration. (1) The Contractor shall be responsible and accountable
for all Government property provided under
this contract and shall comply with Federal
Acquisition Regulation (FAR) subpart 45.5,
as in effect on the date of this contract.

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52.245–2

(2) The Contractor shall establish and
maintain a program for the use, maintenance, repair, protection, and preservation of
Government property in accordance with
sound industrial practice and the applicable
provisions of subpart 45.5 of the FAR.
(3) If damage occurs to Government property, the risk of which has been assumed by
the Government under this contract, the
Government shall replace the items or the
Contractor shall make such repairs as the
Government directs. However, if the Contractor cannot effect such repairs within the
time required, the Contractor shall dispose
of the property as directed by the Contracting Officer. When any property for
which the Government is responsible is replaced or repaired, the Contracting Officer
shall make an equitable adjustment in accordance with paragraph (h) of this clause.
(4) The Contractor represents that the contract price does not include any amount for
repairs or replacement for which the Government is responsible. Repair or replacement
of property for which the Contractor is responsible shall be accomplished by the Contractor at its own expense.
(f) Access. The Government and all its designees shall have access at all reasonable
times to the premises in which any Government property is located for the purpose of
inspecting the Government property.
(g) Risk of loss. Unless otherwise provided
in this contract, the Contractor assumes the
risk of, and shall be responsible for, any loss
or destruction of, or damage to, Government
property upon its delivery to the Contractor
or upon passage of title to the Government
under paragraph (c) of this clause. However,
the Contractor is not responsible for reasonable wear and tear to Government property
or for Government property properly consumed in performing this contract.
(h) Equitable adjustment. When this clause
specifies an equitable adjustment, it shall be
made to any affected contract provision in
accordance with the procedures of the
Changes clause. When appropriate, the Contracting Officer may initiate an equitable
adjustment in favor of the Government. The
right to an equitable adjustment shall be the
Contractor’s exclusive remedy. The Government shall not be liable to suit for breach of
contract for—
(1) Any delay in delivery of Governmentfurnished property;
(2) Delivery of Government-furnished property in a condition not suitable for its intended use;
(3) A decrease in or substitution of Government-furnished property; or
(4) Failure to repair or replace Government
property for which the Government is responsible.
(i) Final accounting and disposition of Government property. Upon completing this contract, or at such earlier dates as may be

fixed by the Contracting Officer, the Contractor shall submit, in a form acceptable to
the Contracting Officer, inventory schedules
covering all items of Government property
(including any resulting scrap) not consumed
in performing this contract or delivered to
the Government. The Contractor shall prepare for shipment, deliver f.o.b. origin, or
dispose of the Government property as may
be directed or authorized by the Contracting
Officer. The net proceeds of any such disposal shall be credited to the contract price
or shall be paid to the Government as the
Contracting Officer directs.
(j) Abandonment and restoration of Contractor’s premises. Unless otherwise provided
herein, the Government—
(1) May abandon any Government property
in place, at which time all obligations of the
Government regarding such abandoned property shall cease; and
(2) Has no obligation to restore or rehabilitate the Contractor’s premises under any circumstances (e.g., abandonment, disposition
upon completion of need, or upon contract
completion). However, if the Governmentfurnished property (listed in the Schedule or
specifications) is withdrawn or is unsuitable
for the intended use, or if other Government
property is substituted, then the equitable
adjustment under paragraph (h) of this
clause may properly include restoration or
rehabilitation costs.
(k) Communications. All communications
under this clause shall be in writing.
(l) Overseas contracts. If this contract is to
be performed outside of the United States
and it’s outlying areas, the words Government
and Government-furnished (wherever they appear in this clause) shall be construed as
United States Government and United States
Government-furnished, respectively.

(End of clause)
Alternate I (APR 1984). As prescribed
in 45.106(b)(2), substitute the following
paragraph (g) for paragraph (g) of the
basic clause:
(g) Limited risk of loss. (1) The term Contractor’s managerial personnel, as used in this
paragraph (g), means the Contractor’s directors, officers, and any of the Contractor’s
managers, superintendents, or equivalent
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 operation at any one plant or separate
location at which the contract is being performed; or
(iii) A separate and complete major industrial operation connected with performing
this contract.

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52.245–2

48 CFR Ch. 1 (10–1–03 Edition)

(2) The Contractor shall not be liable for
loss or destruction of, or damage to, the Government property provided under this contract (or, if an educational or nonprofit organization, for expenses incidental to such loss,
destruction, or damage), except as provided
in subparagraphs (3) and (4) below.
(3) The Contractor shall be responsible for
loss or destruction of, or damage to, the Government property provided under this contract (including expenses incidental to such
loss, destruction, or damage)—
(i) That results from a risk expressly required to be insured under this contract, but
only to the extent of the insurance required
to be purchased and maintained, or to the
extent of insurance actually purchased and
maintained, whichever is greater;
(ii) That results from a risk that is in fact
covered by insurance or for which the Contractor is otherwise reimbursed, but only to
the extent of such insurance or reimbursement;
(iii) For which the Contractor is otherwise
responsible under the express terms of this
contract;
(iv) That results from willful misconduct
or lack of good faith on the part of the Contractor’s managerial personnel; or
(v) That results from a failure on the part
of the Contractor, due to willful misconduct
or lack of good faith on the part of the Contractor’s managerial personnel, to establish
and administer a program or system for the
control, use, protection, preservation, maintenance, and repair of Government property
as required by paragraph (e) of this clause.
(4)(i) If the Contractor fails to act as provided in subdivision (g)(3)(v) above, after
being notified (by certified mail addressed to
one of the Contractor’s managerial personnel) of the Government’s disapproval,
withdrawal of approval, or nonacceptance of
the system or program, it shall be conclusively presumed that such failure was due to
willful misconduct or lack of good faith on
the part of the Contractor’s managerial personnel.
(ii) In such event, any loss or destruction
of, or damage to, the Government property
shall be presumed to have resulted from such
failure unless the Contractor can establish
by clear and convincing evidence that such
loss, destruction, or damage—
(A) Did not result from the Contractor’s
failure to maintain an approved program or
system; or
(B) Occurred while an approved program or
system was maintained by the Contractor.
(5) If the Contractor transfers Government
property to the possession and control of a
subcontractor, the transfer shall not affect
the liability of the Contractor for loss or destruction of, or damage to, the property as
set forth above. However, the Contractor
shall require the subcontractor to assume
the risk of, and be responsible for, any loss

or destruction of, or damage to, the property
while in the subcontractor’s possession or
control, except to the extent that the subcontract, with the advance approval of the
Contracting Officer, relieves the subcontractor from such liability. In the absence of
such approval, the subcontract shall contain
appropriate provisions requiring the return
of all Government property in as good condition as when received, except for reasonable
wear and tear or for its use in accordance
with the provisions of the prime contract.
(6) Upon loss or destruction of, or damage
to, Government property provided under this
contract, the Contractor shall so notify the
Contracting Officer and shall communicate
with the loss and salvage organization, if
any, designated by the Contracting Officer.
With the assistance of any such organization, the Contractor shall take all reasonable action to protect the Government property from further damage, separate the damaged and undamaged Government property,
put all the affected Government property in
the best possible order, and furnish to the
Contracting Officer a statement of—
(i) The lost, destroyed, or damaged Government property;
(ii) The time and origin of the loss, destruction, or damage;
(iii) All known interests in commingled
property of which the Government property
is a part; and
(iv) The insurance, if any, covering any
part of or interest in such commingled property.
(7) The Contractor shall repair, renovate,
and take such other action with respect to
damaged Government property as the Contracting Officer directs. If the Government
property is destroyed or damaged beyond
practical repair, or is damaged and so commingled or combined with property of others
(including the Contractor’s) that separation
is impractical, the Contractor may, with the
approval of and subject to any conditions imposed by the Contracting Officer, sell such
property for the account of the Government.
Such sales may be made in order to minimize the loss to the Government, to permit
the resumption of business, or to accomplish
a similar purpose. The Contractor shall be
entitled to an equitable adjustment in the
contract price for the expenditures made in
performing the obligations under this subparagraph (g)(7) in accordance with paragraph (h) of this clause. However, the Government may directly reimburse the loss and
salvage organization for any of their
charges. The Contracting Officer shall give
due regard to the Contractor’s liability
under this paragraph (g) when making any
such equitable adjustment.
(8) The Contractor represents that it is not
including in the price and agrees it will not

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hereafter include in any price to the Government any charge or reserve for insurance (including any self- insurance fund or reserve)
covering loss or destruction of, or damage to,
Government property, except to the extent
that the Government may have expressly required the Contractor to carry such insurance under another provision of this contract.
(9) In the event the Contractor is reimbursed or otherwise compensated for any loss
or destruction of, or damage to, Government
property, the Contractor shall use the proceeds to repair, renovate, or replace the lost,
destroyed, or damaged Government property
or shall otherwise credit the proceeds to or
equitably reimburse the Government, as directed by the Contracting Officer.
(10) The Contractor shall do nothing to
prejudice the Government’s rights to recover
against third parties for any loss or destruction of, or damage to, Government property.
Upon the request of the Contracting Officer,
the Contractor shall, at the Government’s
expense, furnish to the Government all reasonable assistance and cooperation (including the prosecution of suit and the execution
of instruments of assignment in favor of the
Government) in obtaining recovery. In addition, where a subcontractor has not been relieved from liability for any loss or destruction of, or damage to, Government property,
the Contractor shall enforce for the benefit
of the Government the liability of the subcontractor for such loss, destruction, or
damage.

Alternate II (June 2003). As prescribed
in 45.106(b)(3), substitute the following
paragraphs (c) and (g) for paragraphs
(c) and (g) of the basic clause:
(c) Title in Government property. (1) The
Government shall retain title to all Government-furnished property.
(2) All Government-furnished property and
all property acquired by the Contractor, title
to which vests in the Government under this
paragraph (collectively referred to as Government property), are subject to the provisions
of this clause. Title to Government property
shall not be affected by its incorporation
into or attachment to any property not
owned by the Government, nor shall Government property become a fixture or lose its
identity as personal property by being attached to any real property.
(3) Title to each item of facilities, special
test equipment, and special tooling (other
than that subject to a special tooling clause)
acquired by the Contractor for the Government under this contract shall pass to and
vest in the Government when its use in performing this contract commences, or when
the Government has paid for it, whichever is
earlier, whether or not title previously vested in the Government.

(4) Title to equipment (and other tangible
personal property) purchased with funds
available for research and having an acquisition cost of less than $5,000 shall vest in the
Contractor upon acquisition or as soon
thereafter as feasible; provided, that the Contractor obtained the Contracting Officer’s
approval before each acquisition. Title to
equipment purchased with funds available
for research and having an acquisition cost
of $5,000 or more shall vest as set forth in the
contract. If title to equipment vests in the
Contractor under this subparagraph (c)(4),
the Contractor agrees that no charge will be
made to the Government for any depreciation, amortization, or use under any existing
or future Government contract or subcontract thereunder. The Contractor shall
furnish the Contracting Officer a list of all
equipment to which title is vested in the
Contractor under this subparagraph (c)(4)
within 10 days following the end of the calendar quarter during which it was received.
(5) Vesting title under this paragraph (c) is
subject to civil rights legislation, 42 U.S.C.
2000d. Before title is vested and by signing
this contract, the Contractor accepts and
agrees that—
No person in the United States or its outlying
areas shall, on the ground of race, color, or national origin, be excluded from participation in,
be denied the benefits of, or be otherwise subjected to discrimination under this contemplated
financial assistance (title to equipment).
(g) Limited risk of loss. (1) The term Contractor’s managerial personnel, as used in this
paragraph (g), means the Contractor’s directors, officers, and any of the Contractor’s
managers, superintendents, or equivalent
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 operation at any one plant, laboratory,
or separate location at which the contract is
being performed; or
(iii) A separate and complete major industrial operation connected with performing
this contract.
(2) The Contractor shall not be liable for
loss or destruction of, or damage to, the Government property provided under this contract (or, if an educational or nonprofit organization, for expenses incidental to such loss,
destruction, or damage), except as provided
in subparagraphs (3) and (4) below.
(3) The Contractor shall be responsible for
loss or destruction of, or damage to, the Government property provided under this contract (including expenses incidental to such
loss, destruction, or damage)—
(i) That results from a risk expressly required to be insured under this contract, but
only to the extent of the insurance required
to be purchased and maintained, or to the

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48 CFR Ch. 1 (10–1–03 Edition)

extent of insurance actually purchased and
maintained, whichever is greater;
(ii) That results from a risk which is in
fact covered by insurance or for which the
Contractor is otherwise reimbursed, but only
to the extent of such insurance or reimbursement;
(iii) For which the Contractor is otherwise
responsible under the express terms of this
contract;
(iv) That results from willful misconduct
or lack of good faith on the part of the Contractor’s managerial personnel; or
(v) That results from a failure on the part
of the Contractor, due to willful misconduct
or lack of good faith on the part of the Contractor’s managerial personnel, to establish
and administer a program or system for the
control, use, protection, preservation, maintenance, and repair of Government property
as required by paragraph (e) of this clause.
(4)(i) If the Contractor fails to act as provided in subdivision (g)(3)(v) above, after
being notified (by certified mail addressed to
one of the Contractor’s managerial personnel) of the Government’s disapproval,
withdrawal of approval, or nonacceptance of
the system or program, it shall be conclusively presumed that such failure was due to
willful misconduct or lack of good faith on
the part of the Contractor’s managerial personnel.
(ii) Furthermore, any loss or destruction
of, or damage to, the Government property
shall be presumed to have resulted from such
failure unless the Contractor can establish
by clear and convincing evidence that such
loss, destruction, or damage—
(A) Did not result from the Contractor’s
failure to maintain an approved program or
system; or
(B) Occurred while an approved program or
system was maintained by the Contractor.
(5) If the Contractor transfers Government
property to the possession and control of a
subcontractor, the transfer shall not affect
the liability of the Contractor for loss or destruction of, or damage to, the property as
set forth above. However, the Contractor
shall require the subcontractor to assume
the risk of, and be responsible for, any loss
or destruction of, or damage to, the property
while in the subcontractor’s possession or
control, except to the extent that the subcontract, with the advance approval of the
Contracting Officer, relieves the subcontractor from such liability. In the absence of
such approval, the subcontract shall contain
appropriate provisions requiring the return
of all Government property in as good condition as when received, except for reasonable
wear and tear or for its use in accordance
with the provisions of the prime contract.
(6) Upon loss or destruction of, or damage
to, Government property provided under this
contract, the Contractor shall so notify the
Contracting Officer and shall communicate

with the loss and salvage organization, if
any, designated by the Contracting Officer.
With the assistance of any such organization, the Contractor shall take all reasonable action to protect the Government property from further damage, separate the damaged and undamaged Government property,
put all the affected Government property in
the best possible order, and furnish to the
Contracting Officer a statement of—
(i) The lost, destroyed, or damaged Government property;
(ii) The time and origin of the loss, destruction, or damage;
(iii) All known interests in commingled
property of which the Government property
is a part; and
(iv) The insurance, if any, covering any
part of or interest in such commingled property.
(7) The Contractor shall repair, renovate,
and take such other action with respect to
damaged Government property as the Contracting Officer directs. If the Government
property is destroyed or damaged beyond
practical repair, or is damaged and so commingled or combined with property of others
(including the Contractor’s) that separation
is impractical, the Contractor may, with the
approval of and subject to any conditions imposed by the Contracting Officer, sell such
property for the account of the Government.
Such sales may be made in order to minimize the loss to the Government, to permit
the resumption of business, or to accomplish
a similar purpose. The Contractor shall be
entitled to an equitable adjustment in the
contract price for the expenditures made in
performing the obligations under this subparagraph (g)(7) in accordance with paragraph (h) of this clause. However, the Government may directly reimburse the loss and
salvage organization for any of their
charges. The Contracting Officer shall give
due regard to the Contractor’s liability
under this paragraph (g) when making any
such equitable adjustment.
(8) The Contractor represents that it is not
including in the price, and agrees it will not
hereafter include in any price to the Government, any charge or reserve for insurance
(including any self-insurance fund or reserve) covering loss or destruction of, or
damage to, Government property, except to
the extent that the Government may have
expressly required the Contractor to carry
such insurance under another provision of
this contract.
(9) In the event the Contractor is reimbursed or otherwise compensated for any loss
or destruction of, or damage to, the Government property, the Contractor shall use the
proceeds to repair, renovate, or replace the
lost, destroyed, or damaged Government
property or shall otherwise credit the proceeds to or equitably reimburse the Government, as directed by the Contracting Officer.

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(10) The Contractor shall do nothing to
prejudice the Government’s rights to recover
against third parties for any loss or destruction of, or damage to, Government property.
Upon the request of the Contracting Officer,
the Contractor shall, at the Government’s
expense, furnish to the Government all reasonable assistance and cooperation (including the prosecution of suit and the execution
of instruments of assignment in favor of the
Government) in obtaining recovery. In addition, where a subcontractor has not been relieved from liability for any loss or destruction of, or damage to, Government property,
the Contractor shall enforce for the benefit
of the Government the liability of the subcontractor for such loss, destruction, or
damage.
[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 26904, June 28, 1985; 54 FR 48995, Nov. 28,
1989; 68 FR 28087, May 22, 2003]

52.245–3 Identification of GovernmentFurnished Property.
As prescribed in 45.106(c), insert the
following clause, in addition to the
clause at 52.245–2, Government Property (Fixed-Price Contracts), in solicitations and contracts when a fixedprice construction contract is contemplated under which the Government is to furnish Government property f.o.b. railroad cars at a specified
destination or f.o.b. truck at the
project site. The contract Schedule
shall specify the point of delivery and
may include special terms and conditions covering installation, preparation
for operation, or equipment testing by
the Government or by another contractor.
IDENTIFICATION OF GOVERNMENT-FURNISHED
PROPERTY (APR 1984)
(a) The Government will furnish to the
Contractor the property identified in the
Schedule to be incorporated or installed into
the work or used in performing the contract.
The listed property will be furnished f.o.b.
railroad cars at the place specified in the
contract Schedule or f.o.b. truck at the
project site. The Contractor is required to
accept delivery, pay any demurrage or detention charges, and unload and transport the
property to the job site at its own expense.
When the property is delivered, the Contractor shall verify its quantity and condition and acknowledge receipt in writing to
the Contracting Officer. The Contractor
shall also report in writing to the Contracting Officer within 24 hours of delivery
any damage to or shortage of the property as
received. All such property shall be installed

or incorporated into the work at the expense
of the Contractor, unless otherwise indicated
in this contract.
(b) Each item of property to be furnished
under this clause shall be identified in the
Schedule by quantity, item, and description.

(End of clause)
52.245–4 Government-Furnished Property (Short Form).
As prescribed in 45.106(d), insert the
following clause:
GOVERNMENT-FURNISHED PROPERTY (SHORT
FORM) (JUNE 2003)
(a) The Government shall deliver to the
Contractor, at the time and locations stated
in this contract, the Government-furnished
property described in the Schedule or specifications. If that property, suitable for its intended use, is not delivered to the Contractor, the Contracting Officer shall equitably adjust affected provisions of this contract in accordance with the Changes clause
when—
(1) The Contractor submits a timely written request for an equitable adjustment; and
(2) The facts warrant an equitable adjustment.
(b) Title to Government-furnished property
shall remain in the Government. The Contractor shall use the Government-furnished
property only in connection with this contract. The Contractor shall maintain adequate property control records in accordance
with sound industrial practice and will make
such records available for Government inspection at all reasonable times, unless the
clause at Federal Acquisition Regulation
52.245–1, Property Records, is included in this
contract.
(c) Upon delivery of Government-furnished
property to the Contractor, the Contractor
assumes the risk and responsibility for its
loss or damage, except—
(1) For reasonable wear and tear;
(2) To the extent property is consumed in
performing this contract; or
(3) As otherwise provided for by the provisions of this contract.
(d) Upon completing this contract, the
Contractor shall follow the instructions of
the Contracting Officer regarding the disposition of all Government-furnished property not consumed in performing this contract or previously delivered to the Government. The Contractor shall prepare for shipment, deliver f.o.b. origin, or dispose of the
Government property, as may be directed or
authorized by the Contracting Officer. The
net proceeds of any such disposal shall be
credited to the contract price or shall be
paid to the Government as directed by the
Contracting Officer.

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48 CFR Ch. 1 (10–1–03 Edition)

(e) If this contract is to be performed outside the Untied States and its outlying
areas, the words ‘‘Government’’ and ‘‘Government-furnished’’ (wherever they appear in
this clause) shall be construed as ‘‘United
States Government’’ and ‘‘United States
Governmen-furnished,’’ respectively.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 53
FR 663, Jan. 11, 1988; 68 FR 28087, May 22,
2003]

52.245–5 Government Property (CostReimbursement, Time-and-Material,
or Labor-Hour Contracts).
As prescribed in 45.106(f)(1), insert the
following clause:
GOVERNMENT PROPERTY (COST-REIMBURSEMENT, TIME-AND-MATERIAL, OR LABOR-HOUR
CONTRACTS) (JUNE 2003)
(a) Government-furnished property. (1) The
term Contractor’s managerial personnel, as
used in paragraph (g) of this clause, means
any of the Contractor’s directors, officers,
managers, superintendents, or equivalent
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 operation at any one plant, or separate
location at which the contract is being performed; or
(iii) A separate and complete major industrial operation connected with performing
this contract.
(2) The Government shall deliver to the
Contractor, for use in connection with and
under the terms of this contract, the Government-furnished property described in the
Schedule or specifications, together with
such related data and information as the
Contractor may request and as may be reasonably required for the intended use of the
property (hereinafter referred to as Government-furnished property).
(3) The delivery or performance dates for
this contract are based upon the expectation
that Government-furnished property suitable
for use will be delivered to the Contractor at
the times stated in the Schedule or, if not so
stated, in sufficient time to enable the Contractor to meet the contract’s delivery or
performance dates.
(4) If Government-furnished property is received by the Contractor in a condition not
suitable for the intended use, the Contractor
shall, upon receipt, notify the Contracting
Officer, detailing the facts, and, as directed
by the Contracting Officer and at Government expense, either effect repairs or modification or return or otherwise dispose of the
property. After completing the directed ac-

tion and upon written request of the Contractor, the Contracting Officer shall make
an equitable adjustment as provided in paragraph (h) of this clause.
(5) If Government-furnished property is not
delivered to the Contractor by the required
time or times, the Contracting Officer shall,
upon the Contractor’s timely written request, make a determination of the delay, if
any, caused the Contractor and shall make
an equitable adjustment in accordance with
paragraph (h) of this clause.
(b) Changes in Government-furnished property. (1) The Contracting Officer may, by
written notice, (i) decrease the Governmentfurnished property provided or to be provided
under this contract or (ii) substitute other
Government-furnished property for the property to be provided by the Government or to
be acquired by the Contractor for the Government under this contract. The Contractor
shall promptly take such action as the Contracting Officer may direct regarding the removal, shipment, or disposal of the property
covered by this notice.
(2) Upon the Contractor’s written request,
the Contracting Officer shall make an equitable adjustment to the contract in accordance with paragraph (h) of this clause, if the
Government has agreed in the Schedule to
make such property available for performing
this contract and there is any—
(i) Decrease or substitution in this property pursuant to subparagraph (b)(1) above;
or
(ii) Withdrawal of authority to use property, if provided under any other contract or
lease.
(c) Title. (1) The Government shall retain
title to all Government-furnished property.
(2) Title to all property purchased by the
Contractor for which the Contractor is entitled to be reimbursed as a direct item of cost
under this contract shall pass to and vest in
the Government upon the vendor’s delivery
of such property.
(3) Title to all other property, the cost of
which is reimbursable to the Contractor,
shall pass to and vest in the Government
upon—
(i) Issuance of the property for use in contract performance;
(ii) Commencement of processing of the
property or use in contract performance; or
(iii) Reimbursement of the cost of the
property by the Government, whichever occurs first.
(4) All Government-furnished property and
all property acquired by the Contractor, title
to which vests in the Government under this
paragraph (collectively referred to as Government property), are subject to the provisions
of this clause. Title to Government property
shall not be affected by its incorporation
into or attachment to any property not
owned by the Government, nor shall Government property become a fixture or lose its

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identity as personal property by being attached to any real property.
(d) Use of Government property. The Government property shall be used only for performing this contract, unless otherwise provided in this contract or approved by the
Contracting Officer.
(e) Property administration. (1) The Contractor shall be responsible and accountable
for all Government property provided under
the contract and shall comply with Federal
Acquisition Regulation (FAR) subpart 45.5,
as in effect on the date of this contract.
(2) The Contractor shall establish and
maintain a program for the use, maintenance, repair, protection, and preservation of
Government property in accordance with
sound business practice and the applicable
provisions of FAR subpart 45.5.
(3) If damage occurs to Government property, the risk of which has been assumed by
the Government under this contract, the
Government shall replace the items or the
Contractor shall make such repairs as the
Government directs. However, if the Contractor cannot effect such repairs within the
time required, the Contractor shall dispose
of the property as directed by the Contracting Officer. When any property for
which the Government is responsible is replaced or repaired, the Contracting Officer
shall make an equitable adjustment in accordance with paragraph (h) of this clause.
(f) Access. The Government and all its designees shall have access at all reasonable
times to the premises in which any Government property is located for the purpose of
inspecting the Government property.
(g) Limited risk of loss. (1) The Contractor
shall not be liable for loss or destruction of,
or damage to, the Government property provided under this contract or for expenses incidental to such loss, destruction, or damage, except as provided in subparagraphs (2)
and (3) below.
(2) The Contractor shall be responsible for
loss or destruction of, or damage to, the Government property provided under this contract (including expenses incidental to such
loss, destruction, or damage)—
(i) That results from a risk expressly required to be insured under this contract, but
only to the extent of the insurance required
to be purchased and maintained or to the extent of insurance actually purchased and
maintained, whichever is greater;
(ii) That results from a risk that is in fact
covered by insurance or for which the Contractor is otherwise reimbursed, but only to
the extent of such insurance or reimbursement;
(iii) For which the Contractor is otherwise
responsible under the express terms of this
contract;
(iv) That results from willful misconduct
or lack of good faith on the part of the Contractor’s managerial personnel; or

(v) That results from a failure on the part
of the Contractor, due to willful misconduct
or lack of good faith on the part of the Contractor’s managerial personnel, to establish
and administer a program or system for the
control, use, protection, preservation, maintenance, and repair of Government property
as required by paragraph (e) of this clause.
(3)(i) If the Contractor fails to act as provided by subdivision (g)(2)(v) above, after
being notified (by certified mail addressed to
one of the Contractor’s managerial personnel) of the Government’s disapproval,
withdrawal of approval, or nonacceptance of
the system or program, it shall be conclusively presumed that such failure was due to
willful misconduct or lack of good faith on
the part of the Contractor’s managerial personnel.
(ii) In such event, any loss or destruction
of, or damage to, the Government property
shall be presumed to have resulted from such
failure unless the Contractor can establish
by clear and convincing evidence that such
loss, destruction, or damage—
(A) Did not result from the Contractor’s
failure to maintain an approved program or
system; or
(B) Occurred while an approved program or
system was maintained by the Contractor.
(4) If the Contractor transfers Government
property to the possession and control of a
subcontractor, the transfer shall not affect
the liability of the Contractor for loss or destruction of, or damage to, the property as
set forth above. However, the Contractor
shall require the subcontractor to assume
the risk of, and be responsible for, any loss
or destruction of, or damage to, the property
while in the subcontractor’s possession or
control, except to the extent that the subcontract, with the advance approval of the
Contracting Officer, relieves the subcontractor from such liability. In the absence of
such approval, the subcontract shall contain
appropriate provisions requiring the return
of all Government property in as good condition as when received, except for reasonable
wear and tear or for its use in accordance
with the provisions of the prime contract.
(5) Upon loss or destruction of, or damage
to, Government property provided under this
contract, the Contractor shall so notify the
Contracting Officer and shall communicate
with the loss and salvage organization, if
any, designated by the Contracting Officer.
With the assistance of any such organization, the Contractor shall take all reasonable action to protect the Government property from further damage, separate the damaged and undamaged Government property,
put all the affected Government property in
the best possible order, and furnish to the
Contracting Officer a statement of—
(i) The lost, destroyed, or damaged Government property;

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(ii) The time and origin of the loss, destruction, or damage;
(iii) All known interests in commingled
property of which the Government property
is a part; and
(iv) The insurance, if any, covering any
part of or interest in such commingled property.
(6) The Contractor shall repair, renovate,
and take such other action with respect to
damaged Government property as the Contracting Officer directs. If the Government
property is destroyed or damaged beyond
practical repair, or is damaged and so commingled or combined with property of others
(including the Contractor’s) that separation
is impractical, the Contractor may, with the
approval of and subject to any conditions imposed by the Contracting Officer, sell such
property for the account of the Government.
Such sales may be made in order to minimize the loss to the Government, to permit
the resumption of business, or to accomplish
a similar purpose. The Contractor shall be
entitled to an equitable adjustment in the
contract price for the expenditures made in
performing the obligations under this subparagraph (g)(6) in accordance with paragraph (h) of this clause. However, the Government may directly reimburse the loss and
salvage organization for any of their
charges. The Contracting Officer shall give
due regard to the Contractor’s liability
under this paragraph (g) when making any
such equitable adjustment.
(7) The Contractor shall not be reimbursed
for, and shall not include as an item of overhead, the cost of insurance or of any reserve
covering risk of loss or destruction of, or
damage to, Government property, except to
the extent that the Government may have
expressly required the Contractor to carry
such insurance under another provision of
this contract.
(8) In the event the Contractor is reimbursed or otherwise compensated for any loss
or destruction of, or damage to, Government
property, the Contractor shall use the proceeds to repair, renovate, or replace the lost,
destroyed, or damaged Government property
or shall otherwise credit the proceeds to, or
equitably reimburse, the Government, as directed by the Contracting Officer.
(9) The Contractor shall do nothing to prejudice the Government’s rights to recover
against third parties for any loss or destruction of, or damage to, Government property.
Upon the request of the Contracting Officer,
the Contractor shall, at the Government’s
expense, furnish to the Government all reasonable assistance and cooperation (including the prosecution of suit and the execution
of instruments of assignment in favor of the
Government) in obtaining recovery. In addition, where a subcontractor has not been relieved from liability for any loss or destruction of, or damage to, Government property,

the Contractor shall enforce for the benefit
of the Government the liability of the subcontractor for such loss, destruction, or
damage.
(h) Equitable adjustment. When this clause
specifies an equitable adjustment, it shall be
made to any affected contract provision in
accordance with the procedures of the
Changes clause. When appropriate, the Contracting Officer may initiate an equitable
adjustment in favor of the Government. The
right to an equitable adjustment shall be the
Contractor’s exclusive remedy. The Government shall not be liable to suit for breach of
contract for—
(1) Any delay in delivery of Governmentfurnished property;
(2) Delivery of Government-furnished property in a condition not suitable for its intended use;
(3) A decrease in or substitution of Government-furnished property; or
(4) Failure to repair or replace Government
property for which the Government is responsible.
(i) Final accounting and disposition of Government property. Upon completing this contract, or at such earlier dates as may be
fixed by the Contracting Officer, the Contractor shall submit, in a form acceptable to
the Contracting Officer, inventory schedules
covering all items of Government property
not consumed in performing this contract or
delivered to the Government. The Contractor
shall prepare for shipment, deliver f.o.b. origin, or dispose of the Government property
as may be directed or authorized by the Contracting Officer. The net proceeds of any
such disposal shall be credited to the cost of
the work covered by this contract or paid to
the Government as directed by the Contracting Officer. The foregoing provisions
shall apply to scrap from Government property; provided, however, that the Contracting
Officer may authorize or direct the Contractor to omit from such inventory schedules any scrap consisting of faulty castings
or forgings or of cutting and processing
waste, such as chips, cuttings, borings,
turnings, short ends, circles, trimmings,
clippings, and remnants, and to dispose of
such scrap in accordance with the Contractor’s normal practice and account for it as a
part of general overhead or other reimbursable costs in accordance with the Contractor’s established accounting procedures.
(j) Abandonment and restoration of Contractor premises. Unless otherwise provided
herein, the Government—
(1) May abandon any Government property
in place, at which time all obligations of the
Government regarding such abandoned property shall cease; and
(2) Has no obligation to restore or rehabilitate the Contractor’s premises under any circumstances (e.g., abandonment, disposition

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upon completion of need, or contract completion). However, if the Government-furnished property (listed in the Schedule or
specifications) is withdrawn or is unsuitable
for the intended use, or if other Government
property is substituted, then the equitable
adjustment under paragraph (h) of this
clause may properly include restoration or
rehabilitation costs.
(k) Communications. All communications
under this clause shall be in writing.
(l) Overseas contracts. If this contract is to
be performed outside the United States of
America and its outlying areas the words
Government and Government-furnished (wherever they appear in this clause) shall be construed as United States Government and United
States Government-furnished, respectively.

(End of clause)
Alternate I (June 2003). As prescribed
in 45.106(f)(2), substitute the following
paragraph (c) for paragraph (c) of the
basic clause:
(c) Title. (1) The Government shall retain
title to all Government-furnished property.
(2) All Government-furnished property and
all property acquired by the Contractor, title
to which vests in the Government under this
paragraph (collectively referred to as Government property), are subject to the provisions
of this clause. Title to Government property
shall not be affected by its incorporation
into or attachment to any property not
owned by the Government, nor shall Government property become a fixture or lose its
identity as personal property by being attached to any real property.
(3) Title to all property purchased by the
Contractor for which the Contractor is entitled to be reimbursed as a direct item of cost
under this contract and that, under the provisions of this contract is to vest in the Government, shall pass to and vest in the Government upon the vendor’s delivery of such
property. Title to all other property, the
cost of which is to be reimbursed to the Contractor under this contract and that under
the provisions of this contract is to vest in
the Government, shall pass to and vest in the
Government upon—
(i) Issuance of the property for use in contract performance;
(ii) Commencement of processing of the
property or its use in contract performance;
or
(iii) Reimbursement of the cost of the
property by the Government, whichever occurs first.
(4) Title to equipment (and other tangible
personal property) purchased with funds
available for research and having an acquisition cost of less than $5,000 shall vest in the
Contractor upon acquisition or as soon

thereafter as feasible; provided, that the Contractor obtained the Contracting Officer’s
approval before each acquisition. Title to
equipment purchased with funds available
for research and having an acquisition cost
of $5,000 or more shall vest as set forth in the
contract. If title to equipment vests in the
Contractor under this subparagraph (c)(4),
the Contractor agrees that no charge will be
made to the Government for any depreciation, amortization, or use under any existing
or future Government contract or subcontract thereunder. The Contractor shall
furnish the Contracting Officer a list of all
equipment to which title is vested in the
Contractor under this subparagraph (c)(4)
within 10 days following the end of the calendar quarter during which it was received.
(5) Vesting title under this paragraph (c) is
subject to civil rights legislation, 42 U.S.C.
2000d. Before title is vested and by signing
this contract, the Contractor accepts and
agrees that—
No person in the United States or its outlying
text shall, on the ground of race, color, or national origin, be excluded from participation in,
be denied the benefits of, or be otherwise subjected to discrimination under this contemplated
financial assistance (title to equipment).
[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 26904, June 28, 1985; 51 FR 2667, Jan. 17,
1986; 55 FR 3889, Feb. 5, 1990; 68 FR 28087, May
22, 2003]

52.245–6 Liability
for
Government
Property (Demolition Services Contracts).
As prescribed in 45.106(g) insert the
following clause, in addition to the
clauses prescribed at 37.304, in solicitations and contracts for dismantling,
demolition, or removal of improvements:
LIABILITY FOR GOVERNMENT PROPERTY (DEMOLITION SERVICES CONTRACTS) (APR 1984)
Except for reasonable wear and tear incident to removal and delivery to the Government, the Contractor assumes the risk of
and shall be responsible for any loss or destruction of, or damage to, items of property, title to which—
(a) Remains in the Government and that
are to be delivered to the Government by the
Contractor in performing the work; and
(b) Is vested in the Contractor but that
under the Termination clauses of this contract is revested in the Government upon notice of termination.

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48 CFR Ch. 1 (10–1–03 Edition)
(End of clause)

52.245–7 Government Property (Consolidated Facilities).
As prescribed in 45.302–6(a), insert the
following clause in solicitations and
contracts when a consolidated facilities contract is contemplated:
GOVERNMENT PROPERTY (CONSOLIDATED
FACILITIES) (MAR 1996)
(a) Definitions. For the purpose of this contract, the following definitions apply:
Facilities, as used in this clause, means all
property provided under this facilities contract.
Related contract, as used in this clause,
means a Government contract or subcontract for supplies or services under which
the use of the facilities is or may be authorized.
(b) Facilities to be provided. (1) The Contractor, at Government expense and subject
to the provisions of this contract, shall acquire, construct, or install the facilities and
perform the related work as described in the
Schedule.
(2) The Government, subject to the provisions of this contract, shall furnish to the
Contractor the facilities identified in the
Schedule as Government-furnished facilities.
The Contractor, at Government expense,
shall perform the work with respect to those
facilities as is described in the Schedule.
(3) All shipments of the facilities shall be
made on Government bills of lading, unless
otherwise authorized by the Contracting Officer. The required number of such Government bills of lading will be furnished to the
Contractor by, and the Contractor shall be
accountable therefor to, the transportation
activity designated by the Contracting Officer.
(c) Period of this contract. If not otherwise
specified in the contract and if not previously terminated under paragraph (m), the
use of the facilities authorized under this
contract shall terminate 5 years after its effective date. Thereafter, if continued use of
the facilities by the Contractor is mutually
desired, the parties shall enter into a new
contract that shall incorporate such provisions as may then be required by applicable
laws and regulations. The parties may, by
written agreement, extend the use of the facilities under this contract beyond this 5year period to permit the completion of any
then-existing related contracts and subcontracts.
(d) Title in the facilities. (1) The Government
shall retain title to all Government-furnished property.
(2) Title to all facilities and components
shall pass to and vest in the Government
upon delivery by the vendor of all such items
purchased by the Contractor for which it is

entitled to be reimbursed as a direct item of
cost under this contract.
(3) Title to replacement parts furnished by
the Contractor in carrying out its normal
maintenance obligations under paragraph (h)
shall pass to and vest in the Government
upon completion of their installation in the
facilities.
(4) Title to other property, the cost of
which is reimbursable to the Contractor
under this contract, shall pass to and vest in
the Government upon—
(i) Issuance of the property for use in performing this contract;
(ii) Commencement of processing or use of
the property in performing this contract; or
(iii) Reimbursement of the cost of the
property by the Government, whichever occurs first.
(5) Title to the facilities shall not be affected by their incorporation into or attachment to any property not owned by the Government, nor shall any item of the facilities
become a fixture or lose its identity as personal property by being attached to any real
property. The Contractor shall keep the facilities free and clear of all liens and encumbrances and, except as otherwise authorized
by this contract or by the Contracting Officer, shall not remove or otherwise part with
possession of, or permit the use by others of,
any of the facilities.
(6) The Contractor may, with the written
approval of the Contracting Officer, install,
arrange, or rearrange, on Government-furnished premises, readily movable machinery,
equipment, and other items belonging to the
Contractor. Title to any such item shall remain in the Contractor even though it may
be attached to real property owned by the
Government, unless the Contracting Officer
determines that it is so permanently attached that removal would cause substantial
injury to Government property.
(7) The Contractor shall not construct or
install, at its own expense, any fixed improvement or structural alterations in Government buildings or other real property
without advance written approval of the
Contracting Officer. Fixed improvement or
structural alterations, as used herein, means
any alteration or improvement in the nature
of the building or other real property, that,
after completion, cannot be removed without
substantial loss of value or damage to the
premises. The term does not include foundations for production equipment.
(e) Location of the facilities. The Contractor
may use the facilities at any of the locations
specified in the Schedule and, with the prior
written approval of the Contracting Officer,
at any other location. In granting this approval, the Contracting Officer may prescribe such terms and conditions as may be
deemed necessary for protecting the Government’s interest in the facilities involved.

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Those terms and conditions shall take precedence over any conflicting provisions of this
contract.
(f) Notice of use of the facilities. The Contractor shall notify the Contracting Officer
in writing—
(1) Whenever use of all facilities for Government work in any quarterly period averages less than 75 percent of the total use of
the facilities; or
(2) Whenever any item of the facilities is
no longer needed or usable for performing existing related contracts that authorize such
use.
(g) Property control. The Contractor shall
maintain property control procedures and
records and a system of identification of the
facilities, in accordance with the provisions
of Federal Acquisition Regulation (FAR)
subpart 45.5 in effect on the date of this contract. The provisions of FAR 45.5 are hereby
incorporated by reference and made a part of
this contract.
(h) Maintenance. (1) Except as otherwise
provided in the Schedule, the Contractor
shall perform normal maintenance of the facilities in accordance with sound industrial
practice, including protection, preservation,
and repair of the facilities and normal parts
replacement for equipment.
(2) As soon as practicable after the execution of this contract, the Contractor shall
submit to the Contracting Officer a written
proposed maintenance program, including a
maintenance records system, in sufficient
detail to show its adequacy. If the Contracting Officer agrees to the proposed program, it shall become the normal maintenance obligation of the Contractor. The Contractor’s performance according to the approved program shall satisfy the Contractor’s obligations under subparagraphs (h)(1)
and (h)(5) of this clause.
(3) The Contracting Officer may at any
time direct the Contractor in writing to reduce the work required by the normal maintenance program. If such order reduces the
cost of performing the maintenance, an appropriate equitable adjustment may be made
in any affected related contract that so provides.
(4) The Contractor shall perform any maintenance work directed by the Contracting
Officer in writing. Work in excess of the
maintenance required under subparagraphs
(h)(1) through (h)(3) of this clause shall be at
Government expense. The Contractor shall
notify the Contracting Officer in writing
when sound industrial practice requires
maintenance in excess of the normal maintenance program.
(5) The Contractor shall keep records of all
work done on the facilities and shall give the
Government reasonable opportunity to inspect these records. When facilities are disposed of under this contract, the Contractor
shall deliver the related records to the Gov-

ernment or, if the Contracting Officer directs, to third persons.
(6) The Contractor’s obligation under this
clause for each item of facilities shall continue until the item is removed, abandoned,
or disposed of; until the expiration of the 120day period stated in subparagraph (n)(4) of
this clause; and until the Contractor has discharged its other obligations under this contract with respect to such items.
(i) Access. The Government and any persons designated by it shall, at all reasonable
times, have access to the premises where any
of the facilities are located.
(j) Indemnification of the Government. The
Contractor shall indemnify the Government
and hold it harmless against claims for injury to persons or damage to property of the
Contractor or others arising from the Contractor’s possession or use of the facilities,
except as specified in the clause at FAR
52.228–7, Insurance—Liability to Third Persons. However, the provisions of the Contractor’s related contracts shall govern any assumption of liability by the Government for
claims arising under those contracts.
(k) Late delivery, diversion, and substitution.
(1) The Government shall not be liable for
breach of contract for any delay in delivery
or nondelivery of facilities to be furnished
under this contract.
(2) The Government has the right, at its
expense, to divert the facilities under this
contract by directing the Contractor to—
(i) Deliver any of the facilities to locations
other than those specified in the Schedule;
or
(ii) Assign purchase orders or subcontracts
for any of the facilities to the Government
or third parties.
(3) The Government may furnish any facilities instead of having the Contractor acquire
or construct them. In such event, the Contractor is entitled to reimbursement for the
cost related to the acquisition or construction of the facilities, including the cost of
terminating purchase orders and subcontracts.
(4) Appropriate equitable adjustment may
be made in any related contract that so provides and that is affected by any nondelivery, delay, diversion, or substitution
under this paragraph (k).
(l) Representations and warranties. (1) The
Government makes no warranty, express or
implied, regarding the condition or fitness
for use of any facilities. To the extent practical, the Contractor shall be allowed to inspect all the facilities to be furnished by the
Government before their shipment.
(2) If the Contractor receives facilities in a
condition not suitable for the intended use,
the Contractor shall, within 30 days after receipt and installation thereof, so notify the
Contracting Officer, detailing the facts and,
as directed by the Contracting Officer and at
Government expense, either (i) return such

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48 CFR Ch. 1 (10–1–03 Edition)

item or otherwise dispose of it or (ii) effect
repairs or modifications. An appropriate equitable adjustment may be made in any related contract that so provides and that is
affected by the return, disposition, repair, or
modification of any facilities.
(m) Termination of the use of the facilities. (1)
The Contractor may at any time, upon written notice to the Contracting Officer, terminate its authority to use any or all of the facilities. Termination under this paragraph
(m) shall not relieve the Contractor of any of
its obligations or liabilities under any related contract or subcontract affected by the
termination.
(2) The Contracting Officer may at any
time, upon written notice, terminate or
limit the Contractor’s authority to use any
of the facilities. Except as otherwise provided in the Failure to Perform clause of this
contract, an equitable adjustment may be
made in any related contract of the Contractor that so provides and that is affected
by such notice.
(n) Disposition of the facilities. (1) The provisions of this paragraph (n) shall apply to facilities for which use has been terminated by
either the Contracting Officer or the Contractor under paragraph (m), except as provided in subparagraph (n)(2).
(2) Unless otherwise directed by the Contracting Officer, this paragraph shall not
apply to facilities terminated by the Contractor if—
(i) The facilities terminated do not comprise all of the facilities in the possession of
the Contractor; and
(ii) The Contracting Officer determines
that continued retention of the facilities will
not interfere with the Contractor’s operations.
(3) Within 60 days after the effective date
of any notice of termination given under
paragraph (m), or within such longer period
as the Contracting Officer may approve in
writing, the Contractor shall submit to the
Contracting Officer, in a form satisfactory to
the Contracting Officer, an accounting for
all the facilities covered by the notice.
(4) Within 120 days after the Contractor accounts for any facilities under subparagraph
(n)(3), the Contracting Officer shall give
written notice to the Contractor as to the
disposition of the facilities, except as otherwise provided in subparagraph (n)(6). In its
disposition of the facilities, the Government
may either—
(i) Abandon the facilities in place, in which
case all obligations of the Government regarding such abandoned facilities and the
restoration or rehabilitation of the premises
in and on which they are located shall immediately cease; or
(ii) Require the Contractor to comply, at
Government expense, with such directions as
the Contracting Officer may give with respect to—

(A) The preparation, protection, removal,
or shipment of the affected facilities;
(B) The retention or storage of the affected
facilities; provided, that the Contracting Officer shall not direct the Contractor to retain or store any items of facilities in or on
real property not owned by the Government
if such retention or storage will interfere
with the Contractor’s operations;
(C) The restoration of Government-owned
property incident to the removal of the facilities from such property; and
(D) The sale of any affected facilities in
such manner, at such times, and at such
price as may be approved by the Government, except that the Contractor shall not
be required to extend credit to any purchaser.
(5) If the Contracting Officer fails to give
the written notice required by subparagraph
(n)(4) within the prescribed 120-day period,
the Contractor may, upon not less than 30
days’ written notice to the Government and
at Government risk and expense, (i) retain
the facilities in place or (ii) remove any of
the affected severable facilities located in
Contractor-owned property and store them
at the Contractor’s plant or in a public insured warehouse, in accordance with sound
practice and in a manner compatible with
their security classification. Except as provided in this subparagraph, the Government
shall not be liable to the Contractor for failure to give the written notice required by
subparagraph (n)(4).
(6) Nonseverable items of the facilities or
items of the facilities subject to patent or
proprietary rights shall be disposed of in
such manner as the parties may have agreed
to in writing.
(7) The Government, either directly or by
third persons engaged by it, may remove or
otherwise dispose of any facilities for which
the Contractor’s authority to use has been
terminated, other than those for which specific provision is made in subparagraph
(n)(6).
(8) The Contractor shall, within a reasonable time after the expiration of the 120-day
period specified in subparagraph (n)(4), remove all of its property from the Government property and take such action as the
Contracting Officer may direct in writing
with respect to restoring that Government
property (to the extent that it is affected by
the installation of the Contractor’s property)
to its condition before such installation.
(9) Unless otherwise specifically provided
in this contract, the Government shall not
be obligated to the Contractor to restore or
rehabilitate any property at the Contractor’s
plant, except for restoration or rehabilitation costs caused by removal of the facilities
under subdivision (n)(4)(ii). The Contractor
agrees to indemnify the Government against
all suits or claims for damages arising out of

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52.245–8

the Government’s failure to restore or rehabilitate any property at the Contractor’s
plant or property of its subcontractors, except any damage as may be caused by the
negligence of the Government, its agents, or
independent contractors.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 61
FR 2640, Jan. 26, 1996]

52.245–8

Liability for the Facilities.

As prescribed in 45.302–6(b), insert the
following clause:
LIABILITY FOR THE FACILITIES (JAN 1997)
(a) The term Contractor’s managerial personnel, as used in this clause, means any of
the Contractor’s directors, officers, managers, superintendents, or equivalent representatives who have supervision or direction of—
(1) All or substantially all of the Contractor’s business;
(2) All or substantially all of the Contractor’s operations at any one plant or separate
location in which the facilities are installed
or located; or
(3) A separate and complete major industrial operation in connection with which the
facilities are used.
(b) The Contractor shall not be liable for
any loss or destruction of, or damage to, the
facilities, or for expenses incidental to such
loss, destruction, or damage, except as provided in this clause.
(c) The Contractor shall be liable for loss
or destruction of, or damage to, the facilities, and for expenses incidental to such loss,
destruction, or damage—
(1) That results from a risk expressly required to be insured under this contract, but
only to the extent of the insurance required
to be purchased and maintained, or to the
extent of insurance actually purchased and
maintained, whichever is greater;
(2) That results from a risk that is in fact
covered by insurance or for which the Contractor is otherwise reimbursed, but only to
the extent of such insurance or reimbursement;
(3) For which the Contractor is otherwise
responsible under the express terms of this
contract;
(4) That results from willful misconduct or
lack of good faith on the part of the Contractor’s managerial personnel; or
(5) That results from a failure, due to willful misconduct or lack of good faith on the
part of the Contractor’s managerial personnel—
(i) To establish, maintain, and administer
a system for control of the facilities in accordance with the Property administration

paragraph of the Government Property
clause; or
(ii) To maintain and administer a program
for maintenance, repair, protection, and
preservation of the facilities, in accordance
with the Property administration paragraph of
the Government Property clause, or to take
reasonable steps to comply with any appropriate written direction that the Contracting
Officer may prescribe as reasonably necessary for the protection of the facilities. If
the Government Property clause does not include the Property administration paragraph,
then the Contractor shall exercise sound industrial practice in complying with the requirements of this subdivision (c)(5)(ii).
(d)(1) If the Contractor fails to act as provided by subparagraph (c)(5) above, after
being notified (by certified mail addressed to
one of the Contractor’s managerial personnel) of the Government’s disapproval,
withdrawal of approval, or nonacceptance of
the system or program, it shall be conclusively presumed that such failure was due to
willful misconduct or lack of good faith on
the part of the Contractor’s managerial personnel.
(2) Furthermore, any loss or destruction of,
or damage to, the Government property shall
be presumed to have resulted from such failure unless the Contractor can establish by
clear and convincing evidence that such loss,
destruction, or damage—
(i) Did not result from the Contractor’s
failure to maintain an approved program or
system; or
(ii) Occurred while an approved program or
system was maintained by the Contractor.
(e) If the Contractor transfers facilities to
the possession and control of a subcontractor, the transfer shall not affect the liability of the Contractor for loss or destruction of, or damage to, the facilities. However, the Contractor shall require the subcontractor to assume the risk of, and be responsible for, any loss or destruction of, or
damage to, the facilities while in the subcontractor’s possession or control, except to
the extent that the subcontract, with the advance approval of the Contracting Officer,
relieves the subcontractor from such liability. In the absence of such approval, the subcontract shall contain appropriate provisions
requiring the return of all the facilities in as
good condition as when received, except for
reasonable wear and tear or for their utilization in accordance with the provisions of the
prime contract.
(f) Unless expressly directed in writing by
the Contracting Officer, the Contractor shall
not include in the price or cost under any
contract with the Government the cost of insurance (including self-insurance) against
any form of loss, destruction, or damage to
the facilities. Any insurance required under
this clause shall be in such form, in such
amounts, for such periods of time, and with

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48 CFR Ch. 1 (10–1–03 Edition)

such insurers (including the Contractor as
self-insurer in appropriate circumstances) as
the Contracting Officer shall require or approve. Such insurance shall provide for 30
days advance notice to the Contracting Officer, in the event of cancellation or material
change in the policy coverage on the part of
the insurer. Documentation of insurance or
an authenticated copy of such insurance
shall be deposited promptly with the Contracting Officer. The Contractor shall, not
less than 30 days before the expiration of
such insurance, deliver to the Contracting
Officer documentation of insurance or an authenticated copy of each renewal policy. The
insurance shall be in the name of the United
States of America (Agency Name), the Contractor, and such other interested parties as
the Contracting Officer shall approve, and
shall contain a loss payable clause reading
substantially as follows:
Any loss under this policy shall be adjusted
with (Contractor) and the proceeds, at the direction of the Government, shall be paid to (Contractor). Proceeds not paid to (Contractor) shall
be paid to the office designated by the Contracting Officer.
(g) When there is any loss or destruction
of, or damage to, the facilities—
(1) The Contractor shall promptly notify
the Contracting Officer and, with the assistance of the Contracting Officer, shall take
all reasonable steps to protect the facilities
from further damage, separate the damaged
and undamaged facilities, put all the facilities in the best possible order, and promptly
furnish to the Contracting Officer (and in
any event within 30 days) a statement of—
(i) The facilities lost or damaged;
(ii) The time and origin of the loss or damage;
(iii) All known interests in commingled
property of which the facilities are a part;
and
(iv) Any insurance covering any part of or
interest in such commingled property;
(2) The Contractor shall make such repairs,
replacements, and renovations of the lost,
destroyed, or damaged facilities, or take
such other action as the Contracting Officer
may direct in writing; and
(3) The Contractor shall perform its obligations under this paragraph (g) at Government expense, except to the extent that the
Contractor is liable for such damage, destruction, or loss under the terms of this
clause, and except as any damage, destruction, or loss is compensated by insurance.
(h) The Government is not obliged to replace or repair the facilities that have been
lost, destroyed, or damaged. If the Government does not replace or repair the facilities, the right of the parties to an equitable
adjustment in delivery or performance dates,
price, or both, and in any other contractual
condition of the related contracts affected

shall be governed by the terms and conditions of those contracts.
(i) Except to the extent of any loss or destruction of, or damage to, the facilities for
which the Contractor is relieved of liability,
the facilities shall be returned to the Government or otherwise disposed of under the
terms of this contract (1) in as good condition as when received by the Contractor, (2)
improved, or (3) as required under the terms
of this contract, less ordinary wear and tear.
(j) If the Contractor is in any way compensated (excepting proceeds from use and
occupancy insurance, the cost of which is
not borne directly or indirectly by the Government) for any loss or destruction of, or
damage to, the facilities, the Contractor, as
directed by the Contracting Officer, shall—
(1) Use the proceeds to repair, renovate, or
replace the facilities involved; or
(2) Pay such proceeds to the Government.
(k) The Contractor shall do nothing to
prejudice the Government’s right to recover
against third parties for any loss or destruction of, or damage to, the facilities. Upon the
request of the Contracting Officer, the Contractor shall furnish to the Government, at
Government expense, all reasonable assistance and cooperation (including the prosecution of suit and the execution of instruments
of assignment in favor of the Government) in
obtaining recovery.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 62
FR 239, Jan. 2, 1997]

52.245–9

Use and Charges.

As prescribed in 45.302–6(c), insert the
following clause in solicitations and
contracts (1) when a consolidated facilities contract or a facilities use contract or (2) when a fixed-price contract
is contemplated, and Government production and research property is provided other than on a rent-free basis. If
the conditions specified in 45.403(a)
apply, the contracting officer shall
modify the clause, as appropriate.
USE AND CHARGES (APR 1984)
(a) The Contractor may use the facilities
without charge in the performance of—
(1) Contracts with the Government that
specifically authorize such use without
charge;
(2) Subcontracts of any tier under Government prime contracts if the Contracting Officer having cognizance of the prime contract (i) approves a subcontract specifically
authorizing such use or (ii) otherwise authorizes such use in writing; and

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(3) Other work, if the Contracting Officer
specifically authorizes in writing use without charge for such work.
(b) If granted written permission by the
Contracting Officer, or if it is specifically
provided for in the Schedule, the Contractor
may use the facilities for a rental fee for
work other than that provided in paragraph
(a). Authorizing such use of the facilities
does not waive any rights of the Government
to terminate the Contractor’s right to use
the facilities. The rental fee shall be determined in accordance with the following paragraphs.
(c) The following bases are or shall be established in writing for the rental computation prescribed in paragraphs (d) and (e)
below in advance of any use of the facilities
on a rental basis:
(1) The rental rates shall be those set forth
in Table I.
(2) The acquisition cost of the facilities
shall be the total cost to the Government, as
determined by the Contracting Officer, and
includes the cost of transportation and installation, if borne by the Government.
(i) When Government-owned special tooling or accessories are rented with any of the
facilities, the acquisition cost of the facilities shall be increased by the total cost to
the Government of such tooling or accessories, as determined by the Contracting Officer.
(ii) When any of the facilities are substantially improved at Government expense, the
acquisition cost of the facilities shall be increased by the increase in value that the improvement represents, as determined by the
Contracting Officer.
(iii) The determinations of the Contracting
Officer under this subparagraph (c)(2) shall
be final.
(3) For the purpose of determining the
amount of rental due under paragraph (d),
the rental period shall be not less than 1
month nor more than 6 months, as approved
by the Contracting Officer.
(4) For the purpose of computing any credit under paragraph (e), the unit in determining the amount of use of the facilities
shall be direct labor hours, sales, hours of
use, or any other unit of measure that will
result in an equitable apportionment of the
rental charge, as approved by the Contracting Officer.
(d) The Contractor shall compute the
amount of rentals to be paid for each rental
period by applying the appropriate rental
rates to the acquisition cost of such facilities as may have been authorized for use in
advance for the rental period.
(e) The full rental charge for each period
shall be reduced by a credit. The credit
equals the rental amount that would otherwise be properly allocable to the work for
which the facilities were used without
charge under paragraph (a). The credit shall

be computed by multiplying the full rental
for the rental period by a fraction in which
the numerator is the amount of use of the facilities by the Contractor without charge
during the period, and the denominator is
the total amount of use of the facilities by
the Contractor during the period.
(f) Within 90 days after the close of each
rental period, the Contractor shall submit to
the Contracting Officer a written statement
of the use made of the facilities by the Contractor and the rental due the Government.
At the same time, the Contractor shall make
available such records and data as are determined by the Contracting Officer to be necessary to verify the information contained in
the statement.
(g) If the Contractor fails to submit the information as required in paragraph (f) above,
the Contractor shall be liable for the full
rental for the period. However, if the Contractor’s failure to submit was not the fault
of the Contractor, the Contracting Officer
shall grant to the Contractor in writing a
reasonable extension of time to submit.
(h) Unless otherwise directed in writing by
the Contracting Officer, the Contractor shall
give priority in the use of the facilities to
performing contracts and subcontracts of the
Contracting Officer having cognizance of the
facilities and shall not undertake any work
involving the use of the facilities that would
interfere with performing existing Government contracts or subcontracts.
(i) Concurrently with the submission of the
written statement prescribed by paragraph
(f) of this clause, the Contractor shall pay
the rental due the Government under this
clause. Payment shall be by check made payable to the office designated for contract administration and mailed or delivered to the
Contracting Officer. Receipt and acceptance
by the Government of the Contractor’s check
pursuant to this paragraph shall constitute
an accord and satisfaction of the final
amount due the Government hereunder, unless the Contractor is notified in writing
within 180 days following receipt that the
amount received is not regarded by the Government as the final amount due.
(j) If the Contractor uses any item of the
facilities without authorization, the Contractor shall be liable for the full monthly
rental, without credit, for such item for each
month or part of a month in which such unauthorized use occurs; provided, however,
that the agency head concerned may, in
writing, waive the Contractor’s liability for
such unauthorized use if the agency head determines that without such a waiver gross
inequity would result. The acceptance of any
rental by the Government under this clause
shall not be construed as a waiver or relinquishment of any rights it may have against
the Contractor growing out of the Contractor’s unauthorized use of the facilities or any

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48 CFR Ch. 1 (10–1–03 Edition)

other failure to perform this contract according to its terms.
TABLE I
RENTAL RATES
(i) For real property and associated fixtures, a fair and reasonable rental shall be
established, based on sound commercial
practice.
(ii) For plant equipment of the types covered in Federal Supply classes 3405, 3408, 3410,
and 3411 through 3419, machine tools; and in
3441 through 3449, secondary metal forming
and cutting machines, the following monthly
rates shall apply:
Monthly Rental
Rate

Age of Equipment
Under 2 years old ........................................
Over 2 to 3 years old ...................................
Over 3 to 6 years old ...................................
Over 6 to 10 years old .................................
Over 10 years old ........................................

3.0 percent
2.0 percent
1.5 percent
1.0 percent
0.75 percent

The age of each item of the equipment shall
be based on the year in which it was manufactured, with a birthday on January 1 of
each year thereafter. For example, an item
of equipment manufactured on July 15, 1978,
will be considered to be over 1 year old on and
after January 1, 1979, and over 2 years old on
and after January 1, 1980.
(iii) For personal property and equipment
not covered in (i) or (ii) above, a rental shall
be established at not less than the prevailing
commercial rate, if any, or, in the absence of
such rate, not less than 2 percent per month
for electronic test equipment and automotive equipment and not less than 1 percent per month for all other property and
equipment.

(End of clause)
52.245–10 Government Property (Facilities Acquisition).
As prescribed in 45.302–6(d), insert the
following clause in solicitations and
contracts when a facilities acquisition
contract is contemplated:
GOVERNMENT PROPERTY (FACILITIES
ACQUISITION) (MAR 1996)
(a) Definitions.
Facilities, as used in this clause, means all
property provided under this facilities contract.
Related contract, as used in this clause,
means a Government contract or subcontract for supplies or services under which
the use of the facilities is or may be authorized.
(b) Facilities to be provided. (1) The Contractor, at Government expense and subject
to the provisions of this contract, shall ac-

quire, construct, or install the facilities and
perform the related work as described in the
Schedule.
(2) The Government, subject to the provisions of this contract, shall furnish to the
Contractor the facilities identified in the
Schedule as Government-furnished facilities.
The Contractor, at Government expense,
shall perform the work with respect to those
Government-furnished facilities as is described in the Schedule.
(c) Title in the facilities. (1) The Government
shall retain title to all Government-furnished property.
(2) Title to all facilities and components
shall pass to and vest in the Government
upon delivery by the vendor of all such items
purchased by the Contractor for which it is
entitled to be reimbursed as a direct item of
cost under this contract.
(3) Title to other property, the cost of
which is reimbursable to the Contractor
under this contract, shall pass to and vest in
the Government upon—
(i) Issuance of the property for use in performing this contract;
(ii) Commencement of processing or use of
the property in performing this contract; or
(iii) Reimbursement of the cost of the
property by the Government, whichever occurs first.
(4) Title to the facilities shall not be affected by their incorporation into, or attachment to, any property not owned by the Government, nor shall any item of the facilities
become a fixture or lose its identity as personal property by being attached to any real
property. The Contractor shall keep the facilities free and clear of all liens and encumbrances and, except as otherwise authorized
by this contract or by the Contracting Officer, shall not remove or otherwise part with
possession of, or permit the use by others of,
any of the facilities.
(5) The Contractor may, with the written
approval of the Contracting Officer, install,
arrange, or rearrange, on Government-furnished premises, readily movable machinery,
equipment, and other items belonging to the
Contractor. Title to any such item shall remain in the Contractor even though it may
be attached to real property owned by the
Government, unless the Contracting Officer
determines that it is so permanently attached that removal would cause substantial
injury to Government property.
(6) The Contractor shall not construct or
install, at its own expense, any fixed improvement or structural alterations in Government buildings or other real property
without advance written approval of the
Contracting Officer. Fixed improvement, or
structural alterations, as used herein, means
any alteration or improvement in the nature
of the building or other real property, that,
after completion, cannot be removed without
substantial loss of value or damage to the

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premises. The term does not include foundations for production equipment.
(d) Property control. The Contractor shall
maintain property control procedures and
records and a system of identification of the
facilities in accordance with the provisions
of Federal Acquisition Regulation (FAR)
subpart 45.5 in effect on the date of this contract. The provisions of FAR 45.5 are hereby
incorporated by reference and made a part of
this contract.
(e) Access. The Government and any persons designated by it shall, at all reasonable
times, have access to the premises where any
of the facilities are located.
(f) Indemnification of the Government. The
Contractor shall indemnify the Government
and hold it harmless against claims for injury to persons or damage to property of the
Contractor or others arising from the Contractor’s possession or use of the facilities,
except as specified in the clause at FAR
52.228–7, Insurance—Liability to Third Persons. However, the provisions of the Contractor’s related contracts shall govern any assumption of liability by the Government for
claims arising under such related contracts.
(g) Late delivery, diversion, and substitution.
(1) The Government shall not be liable for
breach of contract for any delay in delivery
or nondelivery of facilities to be furnished
under this contract.
(2) The Government has the right, at its
expense, to divert the facilities under this
contract by directing the Contractor to—
(i) Deliver any of the facilities to locations
other than those specified in the Schedule;
or
(ii) Assign purchase orders or subcontracts
for any of the facilities to the Government
or third parties.
(3) The Government may furnish any facilities instead of having the Contractor acquire
or construct them. In such event, the Contractor is entitled to reimbursement for the
cost related to the acquisition or construction of the facilities, including the cost of
terminating purchase orders and subcontracts.
(4) Appropriate equitable adjustment may
be made in any related contract that so provides and that is affected by nondelivery,
delay, diversion, or substitution under this
paragraph (g).
(h) Representations and warranties. (1) The
Government makes no warranty, express or
implied, regarding the condition or fitness
for use of any facilities. To the extent practical, the Contractor shall be allowed to inspect all the facilities to be furnished by the
Government before their shipment.
(2) If the Contractor receives facilities in a
condition not suitable for the intended use,
the Contractor shall, within 30 days after receipt and installation thereof, so notify the
Contracting Officer, detailing the facts, and,
as directed by the Contracting Officer and at

Government expense, either (i) return such
item or otherwise dispose of it or (ii) effect
repairs or modifications. An appropriate equitable adjustment may be made in any related contract that so provides and that is
affected by the return, disposition, repair, or
modification of any facilities.
(i) Supersedure. Upon the acquisition, construction, or installation of the facilities
called for by this contract, or any usable increment of the facilities, and acceptance by
the Government, the facilities shall then be
subject to the provisions of the facilities
contract that authorizes the use of the
items.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 61
FR 2640, Jan. 26, 1996]

52.245–11 Government Property (Facilities Use).
As prescribed in 45.302–6(e)(1), insert
the following clause:
GOVERNMENT PROPERTY (FACILITIES USE)
(APR 1984)
(a) Definitions. Facilities, as used in this
clause, means property provided under this
facilities contract.
Related contract, as used in this clause,
means a Government contract or subcontract for supplies or services under which
the use of the facilities is or may be authorized.
(b) Period of this contract. If not otherwise
specified in this contract and if not previously terminated under paragraph (k), the
use of the facilities authorized under this
contract shall terminate 5 years after its effective date. Thereafter, if continued use of
the facilities by the Contractor is mutually
desired, the parties shall enter into a new
contract that shall incorporate such provisions as may then be required by applicable
laws and regulations. The parties may, by
written agreement, extend the use of the facilities under this contract beyond this 5year period to permit the completion of any
then-existing related contracts and subcontracts.
(c) Title in the facilities. (1) Title to the facilities shall remain in the Government.
Title to parts replaced by the Contractor in
carrying out its normal maintenance obligations under paragraph (g) shall pass to and
vest in the Government upon completion of
their installation in the facilities.
(2) Title to the facilities shall not be affected by their incorporation into or attachment to any property not owned by the Government, nor shall any item of the facilities
become a fixture or lose its identity as personal property by being attached to any real

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48 CFR Ch. 1 (10–1–03 Edition)

property. The Contractor shall keep the facilities free and clear of all liens and encumbrances and, except as otherwise authorized
by this contract or by the Contracting Officer, shall not remove or otherwise part with
possession of, or permit the use by others of,
any of the facilities.
(3) The Contractor may, with the written
approval of the Contracting Officer, install,
arrange, or rearrange, on Government-furnished premises, readily movable machinery,
equipment, and other items belonging to the
Contractor. Title to any such item shall remain in the Contractor even though it may
be attached to real property owned by the
Government, unless the Contracting Officer
determines that it is so permanently attached that removal would cause substantial
injury to Government property.
(4) The Contractor shall not construct or
install, at its own expense, any fixed improvement or structural alterations in Government buildings or other real property
without advance written approval of the
Contracting Officer. Fixed improvement or
structural alterations, as used herein, means
any alteration or improvement in the nature
of the building or other real property that,
after completion, cannot be removed without
substantial loss of value or damage to the
premises. The term does not include foundations for production equipment.
(d) Location of the facilities. The Contractor
may use the facilities at any of the locations
specified in the Schedule and, with the prior
written approval of the Contracting Officer,
at any other location. In granting this approval, the Contracting Officer may prescribe such terms and conditions as may be
deemed necessary for protecting the Government’s interest in the facilities involved.
Those terms and conditions shall take precedence over any conflicting provisions of this
contract.
(e) Notice of use of the facilities. The Contractor shall notify the Contracting Officer
in writing—
(1) Whenever use of all facilities for Government work in any quarterly period averages less than 75 percent of the total use of
the facilities; or
(2) Whenever any item of the facilities is
no longer needed or usable for performing existing related contracts that authorize such
use.
(f) Property control. The Contractor shall
maintain property control procedures and
records, and a system of identification of the
facilities, in accordance with the provisions
of Federal Acquisition Regulation (FAR)
subpart 45.5 in effect on the date of this contract. The provisions of FAR 45.5 are hereby
incorporated by reference and made a part of
this contract.
(g) Maintenance. (1) Except as otherwise
provided in the Schedule, the Contractor
shall protect, preserve, maintain (including

normal parts replacement), and repair the
facilities in accordance with sound industrial practice.
(2) As soon as practicable after the execution of this contract, the Contractor shall
submit to the Contracting Officer a written
proposed maintenance program, including a
maintenance records system, in sufficient
detail to show the adequacy of the proposed
program. If the Contracting Officer agrees to
the proposed program, it shall become the
normal maintenance obligation of the Contractor. The Contractor’s performance according to the approved program shall satisfy the Contractor’s obligations under subparagraphs (g)(1) and (g)(5) of this clause.
(3) The Contracting Officer may at any
time direct the Contractor in writing to reduce the work required by the normal maintenance program. If such order reduces the
cost of performing the maintenance, an appropriate equitable adjustment may be made
in any affected related contract that so provides.
(4) The Contractor shall perform any maintenance work directed by the Contracting
Officer in writing. Work in excess of the
maintenance required under subparagraphs
(g)(1) through (g)(3) of this clause shall be at
Government expense. The Contractor shall
notify the Contracting Officer in writing
when sound industrial practice requires
maintenance in excess of the normal maintenance program.
(5) The Contractor shall keep records of all
work done on the facilities and shall give the
Government reasonable opportunity to inspect such records. When facilities are disposed of under this contract, the Contractor
shall deliver the related records to the Government or, if directed by the Contracting
Officer, to third persons.
(6) The Contractor’s obligation under this
clause for each item of facilities shall continue until the item is removed, abandoned,
or disposed of at the expiration of the 120day period stated in subparagraph (l)(4) of
this clause and when the Contractor has discharged its other obligations under this contract with respect to such items.
(h) Access. The Government and any persons designated by it shall, at all reasonable
times, have access to the premises where any
of the facilities are located.
(i) Indemnification of the Government. The
Contractor shall indemnify the Government
and hold it harmless against claims for injury to persons or damage to property of the
Contractor or others arising from the Contractor’s possession or use of the facilities
under this contract. However, the provisions
of the Contractor’s related contracts shall
govern any assumption of liability by the
Government for claims arising under those
contracts.
(j) Representations and warranties. (1) The
Government makes no warranty, express or

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implied, regarding the condition or fitness
for use of any facilities. To the extent practical, the Contractor shall be allowed to inspect all the facilities to be furnished by the
Government before their shipment.
(2) If the Contractor receives facilities in a
condition not suitable for the intended use,
the Contractor shall, within 30 days after receipt and installation thereof, so notify the
Contracting Officer, detailing the facts, and,
as directed by the Contracting Officer and at
Government expense, either (i) return such
item or otherwise dispose of it or (ii) effect
repairs or modifications. An appropriate equitable adjustment may be made in any related contract that so provides and that is
affected by the return, disposition, repair, or
modification of any facilities.
(k) Termination of use of the facilities. (1)
The Contractor may at any time, upon written notice to the Contracting Officer, terminate its authority to use any or all of the facilities. Termination under this paragraph
(k) shall not relieve the Contractor of any of
its obligations or liabilities under any related contract or subcontract affected by the
termination.
(2) The Contracting Officer may at any
time, upon written notice, terminate or
limit the Contractor’s authority to use any
of the facilities. Except as otherwise provided in the Failure to Perform clause of this
contract, an equitable adjustment may be
made in any related contract of the Contractor that so provides and that is affected
by such notice.
(l) Disposition of the facilities. (1) The provisions of this paragraph (l) shall apply to facilities whose use has been terminated by either the Contracting Officer or the Contractor under paragraph (k), except as provided in subparagraph (l)(2).
(2) Unless otherwise directed by the Contracting Officer, this paragraph (l) shall not
apply to facilities terminated by the Contractor if—
(i) The facilities terminated do not comprise all of the facilities in the possession of
the Contractor; and
(ii) The Contracting Officer determines
that continued retention of the facilities will
not interfere with the Contractor’s operations.
(3) Within 60 days after the effective date
of any notice of termination given under
paragraph (k) or within such longer period as
the Contracting Officer may approve in writing, the Contractor shall submit to the Contracting Officer an accounting for all the facilities covered by such notice. The submission of the Contractor shall be in a form satisfactory to the Contracting Officer.
(4) Within 120 days after the Contractor accounts for any facilities under subparagraph
(l)(3), the Contracting Officer shall give written notice to the Contractor as to the disposition of the facilities, except as otherwise

provided in subparagraph (l)(6). In its disposition of the facilities, the Government
may either—
(i) Abandon the facilities in place, in which
case all obligations of the Government regarding such abandoned facilities and the rehabilitation of the premises in and on which
they are located shall immediately cease; or
(ii) Require the Contractor to comply, at
Government expense, with such directions as
the Contracting Officer may give with respect to—
(A) The preparation, protection, removal,
or shipment of the affected facilities;
(B) The retention or storage of the affected
facilities; provided, that the Contracting Officer shall not direct the Contractor to retain or store any items of facilities in or on
real property not owned by the Government
if such retention or storage will interfere
with the Contractor’s operations;
(C) The restoration of Government-owned
property incident to the removal of the facilities from such property; and
(D) The sale of any affected facilities in
such manner, at such times, and at such
price as may be approved by the Government, except that the Contractor shall not
be required to extend credit to any purchaser.
(5) If the Contracting Officer fails to give
the written notice required by subparagraph
(l)(4) of this clause within the prescribed 120day period, the Contractor may, upon not
less than 30 days’ written notice to the Government, and at Government risk and expense, (i) retain the facilities in place or (ii)
remove any of the affected severable facilities located in Contractor-owned property
and store them at the Contractor’s plant or
in a public insured warehouse. Such removal
and storage shall be in accordance with
sound practice and in a manner compatible
with the security classification of the facilities. Except as provided in this subparagraph
(l)(5), the Government shall not be liable to
the Contractor for failure to give the written
notice required by subparagraph (l)(4).
(6) Nonseverable items of the facilities or
items of the facilities subject to patent or
proprietary rights shall be disposed of in
such manner as the parties may have agreed
to in writing.
(7) The Government, either directly or by
third persons engaged by it, may remove or
otherwise dispose of any facilities for which
the Contractor’s authority to use has been
terminated, other than those for which specific provision is made in subparagraph (l)(6).
(8) The Contractor shall, within a reasonable time after the expiration of the 120-day
period specified in subparagraph (l)(4), remove all of its property from the Government property and take such action as the
Contracting Officer may direct in writing
with respect to restoring such Government
property, to the extent that it is affected by

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48 CFR Ch. 1 (10–1–03 Edition)

the installation of the Contractor’s property,
to its condition before such installation.
(9) Unless otherwise specifically provided
in this contract, the Government shall not
be obligated to the Contractor to restore or
rehabilitate any property at the Contractor’s
plant, except for restoration or rehabilitation costs caused by removal of the facilities
under subdivision (l)(4)(ii). The Contractor
agrees to indemnify the Government against
all suits or claims for damages arising out of
the Government’s failure to restore or rehabilitate any property at the Contractor’s
plant or property of its subcontractors, except any damage as may be caused by the
negligence of the Government, its agents, or
independent contractors.
(m) Supersedure. (1) Facilities previously
provided to the Contractor under the contracts specified in the Schedule of this contract shall become subject to this contract
upon its effective date. The terms of those
contracts by which such facilities were previously provided to the Contractor are hereby superseded with respect to such facilities,
except for rights and obligations that may
have accrued under such other contract before the effective date of this contract.
(2) Facilities subsequently provided the
Contractor under any contract shall, if that
contract so specifies, be subject to this contract upon the completion of their construction, acquisition, and installation or upon
their availability for use, whichever occurs
first, except as otherwise provided in the
contract or other document by which such
facilities are provided to the Contractor.

(End of clause)
Alternate I (June 2003). As prescribed
in 45.302–6(e)(2), substitute the following paragraph (c) of the basic
clause:
(c) Title. (1) Title to equipment (and other
tangible personal property) having a unit acquisition cost of less than $5,000, purchased
with funds available for research, shall vest
in the Contractor upon acquisition or as
soon thereafter as feasible, provided that the
Contractor received the Contracting Officer’s approval before acquiring the equipment. Title to other equipment purchased
with Government funds shall vest in the
Government. The Government may at any
time during the term of this contract or
upon its completion or termination transfer
to the Contractor the title to any equipment
purchased with funds available for research.
Any such transfer shall be upon terms and
conditions agreed to by the parties. The Contractor agrees that it shall not charge under
any Government contract or subcontract
any depreciation, amortization, or use of the
equipment purchased or transferred under
this paragraph. When title to equipment is

vested in the Contractor or is transferred
under this paragraph to the Contractor, the
equipment ceases to be Government property. Within 10 days after the end of the calendar quarter in which such acquisition or
transfer of title occurs, the Contractor shall
furnish the Contracting Officer a list of all
equipment, title to which is vested in the
Contractor.
(2)(i) The Government shall retain title to
all Government-furnished property.
(ii) Except as set forth in subparagraph
(c)(1), title to all property shall pass to and
vest in the Government upon delivery by the
vendor of all such items purchased by the
Contractor for which it is entitled to be reimbursed as a direct item of cost under this
or a related contract.
(iii) Title to replacement parts furnished
by the Contractor in performing its normal
obligations under paragraph (g) shall pass to
and vest in the Government upon completion
of their installation in the facilities.
(iv) Title to other property, the cost of
which is reimbursable to the contractor
under this contract or a related contract,
shall pass to and vest in the Government
upon—
(A) Issuance of the property for use in performing this contract;
(B) Commencement of processing or use of
the property in performing this contract; or
(C) Reimbursement of the cost of the property by the Government, whichever occurs
first.
(3) Title to the facilities shall not be affected by their incorporation into or attachment to any property not owned by the Government, nor shall any item of the facilities
become a fixture or lose its identity as personal property by being attached to any real
property. The Contractor shall keep the facilities free and clear of all liens and encumbrances and, except as otherwise authorized
by this contract or by the Contracting Officer, shall not remove or otherwise part with
possession of, or permit the use by others of,
any of the facilities.
(4) The Contractor may, with the written
approval of the Contracting Officer, install,
arrange, or rearrange, on Government-furnished premises, readily movable machinery,
equipment, and other items belonging to the
Contractor. Title to any such item shall remain in the Contractor even though it may
be attached to real property owned by the
Government, unless the Contracting Officer
determines that it is so permanently attached that removal would cause substantial
injury to Government property.
(5) The Contractor shall not construct or
install, at its own expense, any fixed improvement or structural alterations in Government buildings or other real property
without advance written approval of the
Contracting Officer. Fixed improvement, as

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used herein, means any alteration or improvement in the nature of the building or
other real property that, after completion,
cannot be removed without substantial loss
of value or damage to the premises. The
term does not include foundations for production equipment.
(6) Vesting title under this paragraph (c) is
subject to civil rights legislation, 42 U.S.C.
2000d. Before title is vested and by signing
this contract, the Contractor accepts and
agrees that—
No person in the United States or its outlying
areas shall, on the ground of race, color, or national origin, be excluded from participation in,
be denied the benefits of, or be otherwise subjected to discrimination under this contemplated
financial assistance (title to equipment).
[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 26904, June 28, 1985; 68 FR 28087, May 22,
2003]

52.245–12 Contract Purpose (Nonprofit
Educational Institutions).
As prescribed in 45.302–7(a), the contracting officer may insert the following clause in solicitations and contracts when a facilities use contract is
contemplated and award may be made
to a nonprofit educational institution:

ACCOUNTABLE FACILITIES (NONPROFIT
EDUCATIONAL INSTITUTIONS) (APR 1984)
The facilities accountable under this contract are those facilities furnished or acquired under this contract and those facilities furnished or acquired under those related contracts that are specifically identified in this contract Schedule.

(End of clause)
52.245–14 Use of Government Facilities.
As prescribed in 45.302–7(c), the contracting officer may insert the following clause in solicitations and contracts when a facilities use contract is
contemplated and award may be made
to a nonprofit educational institution:
USE OF GOVERNMENT FACILITIES (APR 1984)
The Contractor may use the facilities
without charge in performing—
(a) Contracts with the Government which
specifically authorize such use without
charge;
(b) Subcontracts of any tier if the Contracting Officer having cognizance of the
prime contract has authorized, in writing,
use without charge; and
(c) Other work for which the Contracting
Officer has specifically authorized use without charge in writing.

CONTRACT PURPOSE (NONPROFIT EDUCATIONAL
INSTITUTIONS) (APR 1984)
This facilities use contract is designed specifically for nonprofit educational institutions to set forth provisions for the use and
accountability of facilities furnished or acquired under related contracts identified
elsewhere herein. There are no funds provided under this contract. Costs incurred for
acquisition, maintenance, repair, replacement, disposition, or other purposes in connection with the facilities accountable hereunder will be subject to the reimbursement
provisions of the related contracts; provided,
however, that should no other contract be
available for reimbursement of such costs,
this contract may be appropriately modified
to provide for such reimbursement.

(End of clause)
52.245–13 Accountable Facilities (Nonprofit Educational Institutions).
As prescribed in 45.302–7(b), the contracting officer may insert the following clause in solicitations and contracts when a facilities contract is contemplated and award may be made to a
nonprofit educational institution:

(End of clause)
52.245–15 Transfer of Title to the Facilities.
As prescribed in 45.302–7(d), insert the
following clause:
TRANSFER OF TITLE TO THE FACILITIES (JUNE
2003)
(a) The Contracting Officer may, at any
time during the term of this contract and
acting under Public Law 97–258 (31 U.S.C.
6306), transfer title to equipment to the Contractor upon mutually agreeable terms and
conditions. This clause takes precedence
over the title paragraph of the Government
property clause of this contract. However,
every agreement to transfer title to equipment shall provide that the Contractor will
not include in the contract price or charge
the Government in any manner for depreciation, amortization, or use of such equipment.
(b) Vesting title under paragraph (a) above
is subject to civil rights legislation, 42 U.S.C.
2000d. Before title is vested and by signing
this contract, the contractor accepts and
agrees that—
No person in the United States or its outlying
areas shall, on the ground of race, color, or national origin, be excluded from participation in,

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48 CFR Ch. 1 (10–1–03 Edition)

be denied the benefits of, or be otherwise subjected to discrimination under this contemplated
financial assistance (title to equipment).

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 26905, June 28, 1985; 68 FR 28087, May 22,
2003]

52.245–16 Facilities Equipment Modernization.
As prescribed in 45.302–7(e), insert the
following clause:
FACILITIES EQUIPMENT MODERNIZATION (APR
1985)
(a) The Contractor agrees to return to the
Government the net cost savings realized
from using modernized or replacement equipment provided by the Government under this
contract. This applies to using such equipment on any contracts or subcontracts that
are firm-fixed price, or that are fixed-price
with economic price adjustment provisions,
entered into within the 3 years following the
date such equipment is placed into production. This provision does not apply to the use
of such equipment in sealed bid contracts entered into after the equipment is placed in
production or in contracts or subcontracts
that specifically provide that they have been
priced on the basis of anticipated use of such
equipment.
(b)(1) The Contractor shall maintain adequate records for implementing this clause.
The Contractor shall make such records
available at its office for inspection, audit,
or reproduction by any authorized representative of the Contracting Officer.
(2) When the Contractor authorizes a subcontractor to use the modernized or replacement equipment, the subcontractor shall be
required to maintain records and make them
and additional information available to the
Contracting Officer.
(c) Records of equipment shall generally be
acceptable if they are maintained under established accounting practices and permit a
fair estimation of the net cost savings realized. Net cost savings realized shall be determined by a comparison of the Contractor’s
cost experience in the operation of the equipment before and after modernization.
(d) Amounts due the Government under
this clause shall be returned by the Contractor, as directed by the Contracting Officer, by—
(1) Credits to, or adjustment of the prices
of, the related contracts benefitting from
using the modernized or replacement equipment;
(2) Payment to the Government through
the Contracting Officer having cognizance of
the equipment; or
(3) Any other means mutually agreed to.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 1748, Jan. 11, 1985; 50 FR 52434, Dec. 23,
1985]

52.245–17

Special Tooling.

As prescribed in 45.306–5, insert the
following clause:
SPECIAL TOOLING (DEC 1989)
(a) Definition. Special tooling means jigs,
dies, fixtures, molds, patterns, taps, gauges,
other equipment and manufacturing aids, all
components of these items, and replacements of these items that are of such a specialized nature that without substantial
modification or alteration their use is limited to the development or production of particular supplies or parts thereof or performing particular services. It does not include material, special test equipment, facilities (except foundations and similar improvements necessary for installing special
tooling), general or special machine tools, or
similar capital items. Special tooling for the
purpose of this clause, includes all special
tooling acquired or fabricated by the Contractor for the Government (other than special tooling to be delivered as a line item) or
furnished by the Government for use in connection with and under the terms of the contract.
(b) Title. The Government retains title to
Government-owned special tooling and option to take title to all special tooling subject to this clause until such time as title or
option to take title is relinquished by the
Contracting Officer as provided for in subparagraphs (j)(2) and (j)(3) of this clause.
(c) Risk of loss. Except to the extent that
the Government shall have otherwise assumed the risk of loss to special tooling applicable to this clause, in the event of the
loss, theft or destruction of or damage to
any such property, the repair or replacement
shall be accomplished by the Contractor at
its own expense.
(d) Special tooling furnished by the Government. (1) Except as otherwise provided in this
contract, all Government-furnished special
tooling is provided as is. The Government
makes no warranty whatsoever with respect
to special tooling furnished as is, except that
the property is in the same condition when
placed at the f.o.b. point specified in the solicitation as when last available for inspection by the Contractor under the solicitation.
(2) The Contractor may repair any special
tooling made available on an as is basis.
Such repair will be at the Contractor’s expense, except as otherwise provided in this
clause. Such property may be modified as
necessary for use under this contract at the

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Contractor’s expense, except as otherwise directed by the Contracting Officer. Any repair
or modification of property furnished as is
shall not affect the title of the Government.
(3) If there is any change in the condition
of special tooling furnished as is from the
time inspected or last available for inspection under the solicitation to the time
placed on board at the location specified in
the solicitation or the Government directs a
change in the quantity of special tooling furnished or to be furnished, and such change
will adversely affect the Contractor, the
Contractor shall, upon receipt of the property, notify the Contracting Officer detailing
the facts, and, as directed by the Contracting
Officer, either (i) return such items at the
Government’s expense or otherwise dispose
of the property or (ii) effect repair to return
the property to its condition when inspected
under the solicitation or, if not inspected,
last available for inspection under the solicitation. After completing the directed action
and upon written request of the Contractor,
the Contracting Officer shall equitably adjust any contractual provisions affected by
the return, disposition, or repair in accordance with procedures provided for in the
Changes clause of this contract. The foregoing provisions for adjustment are the exclusive remedy available to the Contractor,
and the Government shall not be otherwise
liable for any delivery of special tooling in a
condition or in quantities other than that
when originally offered.
(e) Use of special tooling. The Contractor
may use special tooling subject to this
clause on other Government effort when specifically approved in writing by the Contracting Officer for this contract and the
Contracting Officer for the contract under
which the special tooling will be used. Any
other use of the special tooling shall be subject to advance written approval of the Contracting Officer. In the event the Government elects to remove any speical tooling
that is required for continued contract performance, the contract shall be equitably adjusted in accordance with paragraph (m) of
this clause.
(f) Property control—(1) Records. The Contractor’s special tooling records shall provide the following minimum information regarding each item of special tooling subject
to this clause and shall be made available for
Government inspection at all reasonable
times:
(i) Number or code of the contract to which
the tooling is accountable and the number or
code of the contract for which the tooling
was originally acquired or fabricated.
(ii) Retention codes as defined below:
(A) Primary Code. Assign one of the following to each item of special tooling:
Code A. Spares Tooling. Required to produce
a provisioned spare part or assembly.

Code B. Judgment (Insurance) Tooling. Fabrication tools for parts that are not
provisioned spares but which in the judgment of the Contractor will be required at
some time for logistic support of the end
item.
Code C. Rate Tooling. Necessary to economically produce at increased rates (e.g.,
for mobilization or surge) but not essential
for parts fabrication at low production rates.
Code D. Assembly Tooling. Required for
manufacture of the end product but not required for production of spare parts. Those
items having no postproduction need except
for potential modification or resumed production programs.
(B) Secondary Code. Assign one or more of
the following codes, as applicable, to each
item of special tooling:
Code 1. Repair Tooling. Items which are capable of being used for repair of provisioned
parts or assemblies.
Code 2. Replaceable Tooling. Spares or judgment tooling (primary retention code A or B)
which, in the opinion of the Contractor, can
be effectively and economically replaced by
soft tooling on an as required basis in lieu of
retention of the hard production tooling for
supporting postproduction requirements.
Code 3. Maintenance Tooling. Items which
are capable of being used for depot level
maintenance of the applicable end item or
components thereof.
Code 4. Crash Damage Tooling. Items which
apply to provisioned or nonprovisioned parts
or assemblies which are designated as or
have the potential of being required for crash
damage repairs.
(iii) Nomenclature, function, or comparable code.
(iv) Tool part number or code.
(v) Tool identification number, or quantity
of each tool part number or code, if tool
identification number is not assigned.
(vi) Part number(s) of item(s) on which
used (complete hierarchy of part numbers).
(vii) Unit price. (Estimates are acceptable.)
(viii) Storage method code. Assign one of
the following:
Code J. Inside storage.
Code K. Outside storage.
Code L. Other.
(ix) Estimated weight of tool, if over 25
pounds.
(x) Estimated volume of tool, if over 3
cubic feet.
(xi) Location of Contractor, subcontractor,
vendor for each item. Use Federal Supply
Code for Manufacturers (FSCM), or name and
address if code is not available.
(xii) All operation sheets or other data as
are necessary to show the manufacturing operation or processes for which such items
were used, designed, or modified.
(2) Identification or tagging. To the extent
practicable, the Contractor shall identify all

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48 CFR Ch. 1 (10–1–03 Edition)

special tooling subject to this clause in accordance with the Contractor’s identification procedures.
(g) Maintenance. The Contractor shall
maintain special tooling in accordance with
sound industrial practice. These requirements do not apply to those items designated by the Contracting Officer for disposal as scrap or identified as of no further
interest to the Government under paragraph
(j), Disposition instructions, of this clause.
(h) Identification of excess special tooling.
The Contractor shall promptly identify and
report all special tooling in excess of the
amounts needed to complete full performance under this contract (see subdivision
(i)(2)(i) of this clause).
(i) Lists of special tooling. The Contractor
shall periodically prepare and distribute lists
of special tooling as described below:
(1) Special tooling list. The list shall be furnished within 60 days after delivery of the
first production end item under this contract
or completion of the initial provisioning
process, whichever is later, and shall include
all special tooling subject to this clause as of
the reporting date. However, if this contract
represents the final production contract, the
Contractor shall provide this list of all tools
not later than 180 days prior to scheduled delivery of the last production end item. If this
is a contract for storage of special tooling,
the list shall be provided within 60 days of
contract implementation.
(2) Excess special tooling list—(i) Excess special tooling. Except for items subject to subdivision (i)(2)(ii) of this clause, lists of special tooling excess to this contract shall be
furnished within 60 days of the date that the
item is determined to be excess. The Contractor shall include in this list the information prescribed in Format of lists, subparagraph (i)(3) of this clause, as well as the applicable excess code as follows:
Code V. Excess to contract requirements
with no follow-on requirements.
Code W. Excess to contract requirements
but can be used to support actual or anticipated follow-on requirements.
Code X. Excess due to changes in design or
specification of the end items.
Code Y. Excess due to nonserviceable or
nonrepairable condition.
Code Z. Other.
(ii) Termination inventory. These items
shall be submitted on SF 1432 or by computer
list attached to an SF 1432 in accordance
with FAR 45.606. Format and content of this
submission will be as prescribed by Format
of lists, subparagraph (i)(3) of this clause,
but will contain information as prescribed by
FAR subpart 45.6, in effect on the date of
award of this contract.
(3) Format of lists. Lists furnished by the
Contractor shall state the type of list and
shall include all information from subparagraph (f)(1), Records, of this clause, items (i)

through (xi). All lists will be grouped by primary retention code as prescribed in subdivision (f)(1)(ii)(A) of this clause and further
listed in tool part number sequence.
(4) Distribution of lists. The Contractor shall
submit two copies of lists to each of the following recipients unless otherwise directed:
(i) The Contracting Officer.
(ii) The Administrative Contracting Officer.
(iii) The inventory control point designated by the contracting office.
(j) Disposition instructions. The Contracting
Officer shall provide the Contractor with
written disposition instructions within 180
days of receipt of the list as prescribed by
subparagraph (i)(1) of this clause and within
90 days of the receipt of excess special tooling lists reported in accordance with subparagraph (i)(2) of this clause. The Contracting Officer may direct disposition by
any of the methods listed in subparagraphs
(j)(1) through (j)(3) of this clause, or a combination of such methods. The Contractor
shall comply with such disposition instructions.
(1) The Contracting Officer may identify
specific items of special tooling to be retained or give the Contractor a list specifying the products, parts, or services including follow-on requirements for which the
Government may require special tooling and
request the Contractor to identify all usable
items of special tooling on hand that were
designed for or used in the production or performance of such products, parts, or services.
Once items of usable special tooling required
by the Government are identified, the Contracting Officer may—
(i) Direct the Contractor to transfer specified items of special tooling to follow-on contracts requiring their use. Those items shall
be furnished for use on the contract(s) as
specified by the Contracting Officer and
shall be subject to the provisions of the gaining contracts(s); or
(ii) Request the Contractor to enter into
an appropriate storage contract for special
tooling specified to be retained by the Contractor for the Government. Tooling to be
stored shall be stored pursuant to a storage
contract between the Government and the
Contractor; or
(iii) Direct the Contractor to transfer title
to the Government (to the extent not previously transferred) and deliver to the Government those items of special tooling which
are specified for removal from the Contractor’s plant.
(2) The Contracting Officer may direct the
Contractor to sell, or dispose of as scrap, for
the account of the Government, any special
tooling not specified by the Government pursuant to subparagraph (j)(1) of this clause.
To the extent that the Contractor incurs any

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costs occasioned by compliance with such direction, for which it is not otherwise compensated, the contract price shall be equitably adjusted in accordance with the
Changes clause of this contract. The net proceeds of all sales shall either be credited to
the cost of contract performance or shall be
otherwise paid to the Government as directed by the Contracting Officer. Sale of
special tooling to the prime Contractor or
any of its subcontractors is subject to the
prior written approval of the Contracting Officer.
(3) The Contracting Officer may furnish
the Contractor with a statement disclaiming
further Government interest or right in specified special tooling.
(4) Restoration of Contractor’s premises.
Unless otherwise provided in this contract,
the Government has no obligation to restore
or rehabilitate the Contractor’s premises
under any circumstances (e.g., abandonment,
disposition upon completion of need, or upon
contract completion). However, if special
tooling is withdrawn or if other special tooling is substituted, then the equitable adjustment under paragraph (m) of this clause may
properly include restoration or rehabilitation costs.
(k) Access to special tooling. The Contractor
shall provide access to special tooling subject to this clause at all reasonable times to
all individuals designated by the Contracting
Officer.
(l) Storage or shipment. The Contractor
shall promptly arrange for either the shipment or the storage of special tooling specified in accordance with the final disposition
instructions in subdivisions (j)(1)(ii) or
(j)(1)(iii) of this clause. Tooling to be shipped
shall be properly packaged, packed, and
marked in accordance with the directions of
the Contracting Officer. All operation sheets
or other appropriate data necessary to show
the manufacturing operations or processes
for which the items were used or designed
shall accompany special tooling to be
shipped or stored or shall otherwise be provided to the Government as directed by the
Contracting Officer. To the extent that the
Contractor incurs costs for storage, shipment, packing, crating, or handling under
this paragraph and not otherwise compensated for, the contract price shall be equitably adjusted in accordance with the
Changes clause of this contract.
(m) Equitable adjustment. When this clause
specifies an equitable adjustment, it shall be
made to any affected contract provision in
accordance with the procedures of the
Changes clause. When appropriate, the Contracting Officer may initiate an equitable
adjustment in favor of the Government. The
right to an equitable adjustment shall be the
Contractor’s exclusive remedy. The Government shall not be liable to suit for breach of
contract for—

(1) Any delay in delivery of Governmentfurnished special tooling;
(2) Delivery of Government-furnished special tooling in a condition not suitable for
its intended use;
(3) A decrease in or substitution of special
tooling; or
(4) Failure to repair or replace Government-furnished special tooling for which the
Government is responsible.
(n) Subcontract provisions. In order to perform this contract, the Contractor may place
subcontracts (including purchase orders) involving the use of special tooling. If the full
cost of the tooling is charged to those subcontracts, the Contractor agrees to include
in the subcontract appropriate provisions to
obtain Government rights and data comparable to the rights of the Government
under this clause (unless the Contractor and
Contracting Officer agree in writing that
such rights are not of interest to the Government). The Contractor agrees to exercise
such rights for the benefit of the Government as directed by the Contracting Officer.

(End of clause)
[54 FR 48995, Nov. 28, 1989]

52.245–18 Special Test Equipment.
As prescribed in 45.307–3, insert the
following clause:
SPECIAL TEST EQUIPMENT (FEB 1993)
(a) Special test equipment, as used in this
clause, means either single or multipurpose
integrated test units engineered, designed,
fabricated, or modified to accomplish special
purpose testing in performing a contract. It
consists of items or assemblies of equipment,
including standard or general purpose items
or components, that are interconnected and
interdependent so as to become a new functional entity for special testing purposes. It
does not include material, special tooling,
facilities (except foundations and similar improvements necessary for installing special
test equipment), and plant equipment items
used for general plant testing purposes.
(b) The Contractor may either acquire or
fabricate special test equipment at Government expense when the equipment is not
otherwise itemized in this contract and the
prior approval of the Contracting Officer has
been obtained. The Contractor shall provide
the Contracting Officer with a written notice, at least 30 days in advance, of the Contractor’s intention to acquire or fabricate
the special test equipment. As a minimum,
the notice shall also include an estimated
aggregate cost of all items and components
of the equipment the individual cost of
which is less than $5,000, and the following
information on each item or component of
equipment costing $5,000 or more:

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48 CFR Ch. 1 (10–1–03 Edition)

(1) The end use application and function of
each proposed special test unit, identifying
special characteristics and the reasons for
the classification of the test unit as special
test equipment.
(2) A complete description identifying the
items to be acquired and the items to be fabricated by the Contractor.
(3) The estimated cost of the item of special test equipment or component.
(4) A statement that intra-plant screening
of Contractor and Government-owned special
test equipment and components has been accomplished and that none are available for
use in performing this contract.
(c) The Government may furnish any special test equipment or components rather
than approve their acquisition or fabrication
by the Contractor. Such Government-furnished items shall be subject to the Government Property clause, except that the Government shall not be obligated to deliver
such items any sooner than the Contractor
could have acquired or fabricated them after
expiration of the 30-day notice period in
paragraph (b) of this clause. However, unless
the Government notifies the Contractor of
its decision to furnish the items within the
30-day notice period, the Contractor may
proceed to acquire or fabricate the equipment or components subject to any other applicable provisions of this contract.
(d) The Contractor shall, in any subcontract that provides that special test
equipment or components may be acquired
or fabricated for the Government, insert provisions that conform substantially to the
language of this clause, including this paragraph (d). The Contractor shall furnish the
names of such subcontractors to the Contracting Officer.
(e) If an engineering change requires either
the acquisition or fabrication of new special
test equipment or substantial modification
of existing special test equipment, the Contractor shall comply with paragraph (b)
above. In so complying, the Contractor shall
identify the change order which requires the
proposed acquisition, fabrication, or modification.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 53
FR 27468, July 20, 1988; 53 FR 36028, Sept. 16,
1988; 54 FR 48997, Nov. 28, 1989; 57 FR 60589,
Dec. 21, 1992]

52.245–19 Government Property Furnished ‘‘As Is.’’
As prescribed in 45.308–2, insert the
following clause:

GOVERNMENT PROPERTY FURNISHED ‘‘AS IS’’
(APR 1984)
(a) The Government makes no warranty
whatsoever with respect to Government
property furnished as is, except that the
property is in the same condition when
placed at the f.o.b. point specified in the solicitation as when inspected by the Contractor pursuant to the solicitation or, if not
inspected by the Contractor, as when last
available for inspection under the solicitation.
(b) The Contractor may repair any property made available on an as is basis. Such
repair will be at the Contractor’s expense except as otherwise provided in this clause.
Such property may be modified at the Contractor’s expense, but only with the written
permission of the Contracting Officer. Any
repair or modification of property furnished
as is shall not affect the title of the Government.
(c) If there is any change in the condition
of Government property furnished as is from
the time inspected or last available for inspection under the solicitation to the time
placed on board at the location specified in
the solicitation, and such change will adversely affect the Contractor, the Contractor
shall, upon receipt of the property, notify
the Contracting Officer detailing the facts
and, as directed by the Contracting Officer,
either (1) return such property at the Government’s expense or otherwise dispose of
the property or (2) effect repairs to return
the property to its condition when inspected
under the solicitation or, if not inspected,
last available for inspection under the solicitation. After completing the directed action
and upon written request of the Contractor,
the Contracting Officer shall equitably adjust any contractual provisions affected by
the return, disposition, or repair in accordance with the procedures provided for in the
Changes clause of this contract. The foregoing provisions for adjustment are the exclusive remedy available to the Contractor,
and the Government shall not be otherwise
liable for any delivery of Government property furnished as is in a condition other than
that in which it was originally offered.
(d) Except as otherwise provided in this
clause, Government property furnished as is
shall be governed by the Government Property clause of this contract.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 54
FR 48997, Nov. 28, 1989]

52.246–1 Contractor Inspection Requirements.
As prescribed in 46.301, insert the following clause:

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52.246–2

CONTRACTOR INSPECTION REQUIREMENTS (APR
1984)
The Contractor is responsible for performing or having performed all inspections
and tests necessary to substantiate that the
supplies or services furnished under this contract conform to contract requirements, including any applicable technical requirements for specified manufacturers’ parts.
This clause takes precedence over any Government inspection and testing required in
the contract’s specifications, except for specialized inspections or tests specified to be
performed solely by the Government.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34762, July 3, 1995]

52.246–2 Inspection
of
Supplies—
Fixed-Price.
As prescribed in 46.302, insert the following clause:
INSPECTION OF SUPPLIES—FIXED-PRICE (AUG
1996)
(a) Definition. Supplies, as used in this
clause, includes but is not limited to raw
materials, components, intermediate assemblies, end products, and lots of supplies.
(b) The Contractor shall provide and maintain an inspection system acceptable to the
Government covering supplies under this
contract and shall tender to the Government
for acceptance only supplies that have been
inspected in accordance with the inspection
system and have been found by the Contractor to be in conformity with contract requirements. As part of the system, the Contractor shall prepare records evidencing all
inspections made under the system and the
outcome. These records shall be kept complete and made available to the Government
during contract performance and for as long
afterwards as the contract requires. The
Government may perform reviews and evaluations as reasonably necessary to ascertain
compliance with this paragraph. These reviews and evaluations shall be conducted in
a manner that will not unduly delay the contract work. The right of review, whether exercised or not, does not relieve the Contractor of the obligations under the contract.
(c) The Government has the right to inspect and test all supplies called for by the
contract, to the extent practicable, at all
places and times, including the period of
manufacture, and in any event before acceptance. The Government shall perform inspections and tests in a manner that will not unduly delay the work. The Government assumes no contractual obligation to perform
any inspection and test for the benefit of the

Contractor unless specifically set forth elsewhere in this contract.
(d) If the Government performs inspection
or test on the premises of the Contractor or
a subcontractor, the Contractor shall furnish, and shall require subcontractors to furnish, at no increase in contract price, all reasonable facilities and assistance for the safe
and convenient performance of these duties.
Except as otherwise provided in the contract, the Government shall bear the expense
of Government inspections or tests made at
other than the Contractor’s or subcontractor’s premises; provided, that in case of rejection, the Government shall not be liable for
any reduction in the value of inspection or
test samples.
(e)(1) When supplies are not ready at the
time specified by the Contractor for inspection or test, the Contracting Officer may
charge to the Contractor the additional cost
of inspection or test.
(2) The Contracting Officer may also
charge the Contractor for any additional
cost of inspection or test when prior rejection makes reinspection or retest necessary.
(f) The Government has the right either to
reject or to require correction of nonconforming supplies. Supplies are nonconforming when they are defective in material
or workmanship or are otherwise not in conformity with contract requirements. The
Government may reject nonconforming supplies with or without disposition instructions.
(g) The Contractor shall remove supplies
rejected or required to be corrected. However, the Contracting Officer may require or
permit correction in place, promptly after
notice, by and at the expense of the Contractor. The Contractor shall not tender for
acceptance corrected or rejected supplies
without disclosing the former rejection or
requirement for correction, and, when required, shall disclose the corrective action
taken.
(h) If the Contractor fails to promptly remove, replace, or correct rejected supplies
that are required to be removed or to be replaced or corrected, the Government may either (1) by contract or otherwise, remove, replace, or correct the supplies and charge the
cost to the Contractor or (2) terminate the
contract for default. Unless the Contractor
corrects or replaces the supplies within the
delivery schedule, the Contracting Officer
may require their delivery and make an equitable price reduction. Failure to agree to a
price reduction shall be a dispute.
(i)(1) If this contract provides for the performance of Government quality assurance
at source, and if requested by the Government, the Contractor shall furnish advance
notification of the time (i) when Contractor
inspection or tests will be performed in accordance with the terms and conditions of

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52.246–2

48 CFR Ch. 1 (10–1–03 Edition)

the contract and (ii) when the supplies will
be ready for Government inspection.
(2) The Governments request shall specify
the period and method of the advance notification and the Government representative to
whom it shall be furnished. Requests shall
not require more than 2 workdays of advance
notification if the Government representative is in residence in the Contractor’s plant,
nor more than 7 workdays in other instances.
(j) The Government shall accept or reject
supplies as promptly as practicable after delivery, unless otherwise provided in the contract. Government failure to inspect and accept or reject the supplies shall not relieve
the Contractor from responsibility, nor impose liability on the Government, for nonconforming supplies.
(k) Inspections and tests by the Government do not relieve the Contractor of responsibility for defects or other failures to
meet contract requirements discovered before acceptance. Acceptance shall be conclusive, except for latent defects, fraud, gross
mistakes amounting to fraud, or as otherwise provided in the contract.
(l) If acceptance is not conclusive for any
of the reasons in paragraph (k) hereof, the
Government, in addition to any other rights
and remedies provided by law, or under other
provisions of this contract, shall have the
right to require the Contractor (1) at no increase in contract price, to correct or replace the defective or nonconforming supplies at the original point of delivery or at
the Contractor’s plant at the Contracting Officer’s election, and in accordance with a
reasonable delivery schedule as may be
agreed upon between the Contractor and the
Contracting Officer; provided, that the Contracting Officer may require a reduction in
contract price if the Contractor fails to meet
such delivery schedule, or (2) within a reasonable time after receipt by the Contractor
of notice of defects or nonconformance, to
repay such portion of the contract as is equitable under the circumstances if the Contracting Officer elects not to require correction or replacement. When supplies are returned to the Contractor, the Contractor
shall bear the transportation cost from the
original point of delivery to the Contractor’s
plant and return to the original point when
that point is not the Contractor’s plant. If
the Contractor fails to perform or act as required in (1) or (2) above and does not cure
such failure within a period of 10 days (or
such longer period as the Contracting Officer
may authorize in writing) after receipt of notice from the Contracting Officer specifying
such failure, the Government shall have the
right by contract or otherwise to replace or
correct such supplies and charge to the Contractor the cost occasioned the Government
thereby.

(End of clause)
Alternate I (JUL 1985). If a fixed-price
incentive contract is contemplated,
substitute paragraphs (g), (h), and (l)
below for paragraphs (g), (h), and (l) of
the basic clause.
(g) The Contractor shall remove supplies
rejected or required to be corrected. However, the Contracting Officer may require or
permit correction in place, promptly after
notice. The Contractor shall not tender for
acceptance corrected or rejected supplies
without disclosing the former rejection or
requirement for correction, and when required shall disclose the corrective action
taken. Cost of removal, replacement, or correction shall be considered a cost incurred,
or to be incurred, in the total final negotiated cost fixed under the incentive price
revision clause. However, replacements or
corrections by the Contractor after the establishment of the total final price shall be
at no increase in the total final price.
(h) If the Contractor fails to promptly remove, replace, or correct rejected supplies
that are required to be removed or to be replaced or corrected, the Government may either (1) by contract or otherwise, remove, replace, or correct the supplies and equitably
reduce the target price or, if established, the
total final price or (2) may terminate the
contract for default. Unless the Contractor
corrects or replaces the nonconforming supplies within the delivery schedule, the Contracting Officer may require their delivery
and equitably reduce any target price or, if
it is established, the total final contract
price. Failure to agree upon an equitable
price reduction shall be a dispute.
(l) If acceptance is not conclusive for any
of the reasons in paragraph (k) hereof, the
Government, in addition to any other rights
and remedies provided by law, or under other
provisions of this contract, shall have the
right to require the Contractor (1) at no increase in any target price or, if it is established, the total final price of this contract,
to correct or replace the defective or nonconforming supplies at the original point of delivery or at the Contractor’s plant at the
Contracting Officer’s election, and in accordance with a reasonable delivery schedule as
may be agreed upon between the Contractor
and the Contracting Officer; provided, that
the Contracting Officer may require a reduction in any target price, or, if it is established, the total final price of this contract,
if the Contractor fails to meet such delivery
schedule; or (2) within a reasonable time
after receipt by the Contractor of notice of
defects or nonconformance, to repay such
portion of the total final price as is equitable
under the circumstances if the Contracting
Officer elects not to require correction or replacement. When supplies are returned to

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52.246–3

the Contractor, the Contractor shall bear the
transportation costs from the original point
of delivery to the Contractor’s plant and return to the original point when that point is
not the Contractor’s plant. If the Contractor
fails to perform or act as required in (1) or (2)
above and does not cure such failure within
a period of 10 days (or such longer period as
the Contracting Officer may authorize in
writing) after receipt of notice from the Contracting Officer specifying such failure, the
Government shall have the right by contract
or otherwise to replace or correct such supplies and equitably reduce any target price
or, if it is established, the total final price of
this contract.

Alternate II (JUL 1985). If a fixed-ceiling-price contract with retroactive
price redetermination is contemplated,
substitute paragraphs (g), (h), and (l)
below for paragraphs (g), (h), and (l) of
the basic clause:
(g) The Contractor shall remove supplies
rejected or required to be corrected. However, the Contracting Officer may require or
permit correction in place, promptly after
notice. The Contractor shall not tender for
acceptance corrected or rejected supplies
without disclosing the former rejection or
requirement for correction, and when required shall disclose the corrective action
taken. Cost of removal, replacement, or correction shall be considered a cost incurred,
or to be incurred, when redetermining the
prices under the price redetermination
clause. However, replacements or corrections
by the Contractor after the establishment of
the redetermined prices shall be at no increase in the redetermined price.
(h) If the Contractor fails to promptly remove, replace, or correct rejected supplies
that are required to be removed or to be replaced or corrected, the Government may either (1) by contract or otherwise, remove, replace, or correct the supplies and equitably
reduce the initial contract prices or, if established, the redetermined contract prices or
(2) terminate the contract for default. Unless
the Contractor corrects or replaces the nonconforming supplies within the delivery
schedule, the Contracting Officer may require their delivery and equitably reduce the
initial contract price or, if it is established,
the redetermined contract prices. Failure to
agree upon an equitable price reduction shall
be a dispute.
(l) If acceptance is not conclusive for any
of the reasons in paragraph (k) hereof, the
Government, in addition to any other rights
and remedies provided by law, or under other
provisions of this contract, shall have the
right to require the Contractor (1) at no increase in the initial contract prices, or, if it
is established, the redetermined prices of
this contract, to correct or replace the defec-

tive or nonconforming supplies at the original point of delivery or at the Contractor’s
plant at the Contracting Officer’s election,
and in accordance with a reasonable delivery
schedule as may be agreed upon between the
Contractor and the Contracting Officer; provided, that the Contracting Officer may require a reduction in the initial contract
prices, or, if it is established, the redetermined prices of this contract, if the Contractor fails to meet such delivery schedule;
or (2) within a reasonable time after receipt
by the Contractor of notice of defects or nonconformance, to repay such portion of the
initial contract prices, or, if it is established,
the redetermined prices of this contract, as
is equitable under the circumstances if the
Contracting Officer elects not to require correction or replacement. When supplies are
returned to the Contractor, the Contractor
shall bear the transportation costs from the
original point of delivery to the Contractor’s
plant and return to the original point when
that point is not the Contractor’s plant. If
the Contractor fails to perform or act as required in (1) or (2) above and does not cure
such failure within a period of 10 days (or
such longer period as the Contracting Officer
may authorize in writing) after receipt of notice from the Contracting Officer specifying
such failure, the Government shall have the
right by contract or otherwise to replace or
correct such supplies and equitably reduce
the initial contract prices, or, if it is established, the redetermined prices of this contract.
[48 FR 42478, Sept. 19, 1983, as amended at 50
FR 26905, June 28, 1985; 56 FR 41745, Aug. 22,
1991; 61 FR 31665, June 20, 1996]

52.246–3 Inspection of Supplies—CostReimbursement.
As prescribed in 46.303, insert the following clause in solicitations and contracts for supplies, or services that involve the furnishing of supplies, when a
cost-reimbursement contract is contemplated:
INSPECTION OF SUPPLIES—COSTREIMBURSEMENT (MAY 2001)
(a) Definitions. As used in this clause—
Contractor’s managerial personnel means any
of the Contractor’s directors, officers, managers, superintendents, or equivalent representatives who have supervision or direction of—
(1) All or substantially all of the Contractor’s business;
(2) All or substantially all of the Contractor’s operation at a plant or separate location where the contract is being performed;
or

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52.246–4

48 CFR Ch. 1 (10–1–03 Edition)

(3) A separate and complete major industrial operation connected with performing
this contract.
Supplies includes but is not limited to raw
materials, components, intermediate assemblies, end products, lots of supplies, and,
when the contract does not include the Warranty of Data clause, data.
(b) The Contractor shall provide and maintain an inspection system acceptable to the
Government covering the supplies, fabricating methods, and special tooling under
this contract. Complete records of all inspection work performed by the Contractor shall
be maintained and made available to the
Government during contract performance
and for as long afterwards as the contract requires.
(c) The Government has the right to inspect and test the contract supplies, to the
extent practicable at all places and times,
including the period of manufacture, and in
any event before acceptance. The Government may also inspect the plant or plants of
the Contractor or any subcontractor engaged
in the contract performance. The Government shall perform inspections and tests in a
manner that will not unduly delay the work.
(d) If the Government performs inspection
or test on the premises of the Contractor or
a subcontractor, the Contractor shall furnish
and shall require subcontractors to furnish
all reasonable facilities and assistance for
the safe and convenient performance of these
duties.
(e) Unless otherwise specified in the contract, the Government shall accept supplies
as promptly as practicable after delivery,
and supplies shall be deemed accepted 60
days after delivery, unless accepted earlier.
(f) At any time during contract performance, but no later than 6 months (or such
other time as may be specified in the contract) after acceptance of the supplies to be
delivered under the contract, the Government may require the Contractor to replace
or correct any supplies that are nonconforming at time of delivery. Supplies are
nonconforming when they are defective in
material or workmanship or are otherwise
not in conformity with contract requirements. Except as otherwise provided in paragraph (h) below, the cost of replacement or
correction shall be included in allowable
cost, determined as provided in the Allowable Cost and Payment clause, but no additional fee shall be paid. The Contractor shall
not tender for acceptance supplies required
to be replaced or corrected without disclosing the former requirement for replacement or correction, and, when required, shall
disclose the corrective action taken.
(g)(1) If the Contractor fails to proceed
with reasonable promptness to perform required replacement or correction, the Government may—

(i) By contract or otherwise, perform the
replacement or correction and charge to the
Contractor any increased cost or make an
equitable reduction in any fixed fee paid or
payable under the contract;
(ii) Require delivery of undelivered supplies at an equitable reduction in any fixed
fee paid or payable under the contract; or
(iii) Terminate the contract for default.
(2) Failure to agree on the amount of increased cost to be charged to the Contractor
or to the reduction in the fixed fee shall be
a dispute.
(h) Notwithstanding paragraphs (f) and (g)
above, the Government may at any time require the Contractor to correct or replace,
without cost to the Government, nonconforming supplies, if the nonconformances are
due to (1) fraud, lack of good faith, or willful
misconduct on the part of the Contractor’s
managerial personnel or (2) the conduct of
one or more of the Contractor’s employees
selected or retained by the Contractor after
any of the Contractor’s managerial personnel has reasonable grounds to believe
that the employee is habitually careless or
unqualified.
(i) This clause applies in the same manner
to corrected or replacement supplies as to
supplies originally delivered.
(j) The Contractor shall have no obligation
or liability under this contract to replace
supplies that were nonconforming at the
time of delivery, except as provided in this
clause or as may be otherwise provided in
the contract.
(k) Except as otherwise specified in the
contract, the Contractor’s obligation to correct or replace Government-furnished property shall be governed by the clause pertaining to Government property.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 66
FR 2135, Jan. 10, 2001]

52.246–4 Inspection
Fixed-Price.

of

Services—

As prescribed in 46.304, insert the following clause:
INSPECTION OF SERVICES—FIXED-PRICE (AUG
1996)
(a) Definitions. Services, as used in this
clause, includes services performed, workmanship, and material furnished or utilized
in the performance of services.
(b) The Contractor shall provide and maintain an inspection system acceptable to the
Government covering the services under this
contract. Complete records of all inspection
work performed by the Contractor shall be
maintained and made available to the Government during contract performance and

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52.246–6

for as long afterwards as the contract requires.
(c) The Government has the right to inspect and test all services called for by the
contract, to the extent practicable at all
times and places during the term of the contract. The Government shall perform inspections and tests in a manner that will not unduly delay the work.
(d) If the Government performs inspections
or tests on the premises of the Contractor or
a subcontractor, the Contractor shall furnish, and shall require subcontractors to furnish, at no increase in contract price, all reasonable facilities and assistance for the safe
and convenient performance of these duties.
(e) If any of the services do not conform
with contract requirements, the Government
may require the Contractor to perform the
services again in conformity with contract
requirements, at no increase in contract
amount. When the defects in services cannot
be corrected by reperformance, the Government may (1) require the Contractor to take
necessary action to ensure that future performance conforms to contract requirements
and (2) reduce the contract price to reflect
the reduced value of the services performed.
(f) If the Contractor fails to promptly perform the services again or to take the necessary action to ensure future performance
in conformity with contract requirements,
the Government may (1) by contract or otherwise, perform the services and charge to
the Contractor any cost incurred by the Government that is directly related to the performance of such service or (2) terminate the
contract for default.

maintained and made available to the Government during contract performance and
for as long afterwards as the contract requires.
(c) The Government has the right to inspect and test all services called for by the
contract, to the extent practicable at all
places and times during the term of the contract. The Government shall perform inspections and tests in a manner that will not unduly delay the work.
(d) If any of the services performed do not
conform with contract requirements, the
Government may require the Contractor to
perform the services again in conformity
with contract requirements, for no additional fee. When the defects in services cannot be corrected by reperformance, the Government may (1) require the Contractor to
take necessary action to ensure that future
performance conforms to contract requirements and (2) reduce any fee payable under
the contract to reflect the reduced value of
the services performed.
(e) If the Contractor fails to promptly perform the services again or take the action
necessary to ensure future performance in
conformity with contract requirements, the
Government may (1) by contract or otherwise, perform the services and reduce any fee
payable by an amount that is equitable
under the circumstances or (2) terminate the
contract for default.

(End of clause)
52.246–6 Inspection—Time-and-Material and Labor-Hour.

(End of clause)

As prescribed in 46.306, insert the following clause:

[48 FR 42478, Sept. 19, 1983, as amended at 56
FR 67136, Dec. 27, 1991; 61 FR 31665, June 20,
1996]

INSPECTION—TIME-AND-MATERIAL AND LABORHOUR (MAY 2001)

52.246–5 Inspection of Services—CostReimbursement.
As prescribed in 46.305, insert the following clause in solicitations and contracts for services, or supplies that involve the furnishing of services, when a
cost-reimbursement contract is contemplated:
INSPECTION OF SERVICES—COSTREIMBURSEMENT (APR 1984)
(a) Definition. Services, as used in this
clause, includes services performed, workmanship, and material furnished or used in
performing services.
(b) The Contractor shall provide and maintain an inspection system acceptable to the
Government covering the services under this
contract. Complete records of all inspection
work performed by the Contractor shall be

(a) Definitions. As used in this clause—Contractor’s managerial personnel means any of
the Contractor’s directors, officers, managers, superintendents, or equivalent representatives who have supervision or direction of—
(1) All or substantially all of the Contractor’s business;
(2) All or substantially all of the Contractor’s operation at any one plant or separate
location where the contract is being performed; or
(3) A separate and complete major industrial operation connected with the performance of this contract.
Materials includes data when the contract
does not include the Warranty of Data
clause.
(b) The Contractor shall provide and maintain an inspection system acceptable to the
Government covering the material, fabricating methods, work, and services under

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52.246–7

48 CFR Ch. 1 (10–1–03 Edition)

this contract. Complete records of all inspection work performed by the Contractor shall
be maintained and made available to the
Government during contract performance
and for as long afterwards as the contract requires.
(c) The Government has the right to inspect and test all materials furnished and
services performed under this contract, to
the extent practicable at all places and
times, including the period of performance,
and in any event before acceptance. The Government may also inspect the plant or plants
of the Contractor or any subcontractor engaged in contract performance. The Government shall perform inspections and tests in a
manner that will not unduly delay the work.
(d) If the Government performs inspection
or test on the premises of the Contractor or
a subcontractor, the Contractor shall furnish
and shall require subcontractors to furnish
all reasonable facilities and assistance for
the safe and convenient performance of these
duties.
(e) Unless otherwise specified in the contract, the Government shall accept or reject
services and materials at the place of delivery as promptly as practicable after delivery, and they shall be presumed accepted 60
days after the date of delivery, unless accepted earlier.
(f) At any time during contract performance, but not later than 6 months (or such
other time as may be specified in the contract) after acceptance of the services or materials last delivered under this contract, the
Government may require the Contractor to
replace or correct services or materials that
at time of delivery failed to meet contract
requirements. Except as otherwise specified
in paragraph (h) below, the cost of replacement or correction shall be determined
under the Payments Under Time–and–Materials and Labor–Hour Contracts clause, but
the hourly rate for labor hours incurred in
the replacement or correction shall be reduced to exclude that portion of the rate attributable to profit. The Contractor shall not
tender for acceptance materials and services
required to be replaced or corrected without
disclosing the former requirement for replacement or correction, and, when required,
shall disclose the corrective action taken.
(g)(1) If the Contractor fails to proceed
with reasonable promptness to perform required replacement or correction, and if the
replacement or correction can be performed
within the ceiling price (or the ceiling price
as increased by the Government), the Government may—
(i) By contract or otherwise, perform the
replacement or correction, charge to the
Contractor any increased cost, or deduct
such increased cost from any amounts paid
or due under this contract; or
(ii) Terminate this contract for default.

(2) Failure to agree to the amount of increased cost to be charged to the Contractor
shall be a dispute.
(h) Notwithstanding paragraphs (f) and (g)
above, the Government may at any time require the Contractor to remedy by correction or replacement, without cost to the
Government, any failure by the Contractor
to comply with the requirements of this contract, if the failure is due to (1) fraud, lack
of good faith, or willful misconduct on the
part of the Contractor’s managerial personnel or (2) the conduct of one or more of
the Contractor’s employees selected or retained by the Contractor after any of the
Contractor’s managerial personnel has reasonable grounds to believe that the employee
is habitually careless or unqualified.
(i) This clause applies in the same manner
and to the same extent to corrected or replacement materials or services as to materials and services originally delivered under
this contract.
(j) The Contractor has no obligation or liability under this contract to correct or replace materials and services that at time of
delivery do not meet contract requirements,
except as provided in this clause or as may
be otherwise specified in the contract.
(k) Unless otherwise specified in the contract, the Contractor’s obligation to correct
or replace Government-furnished property
shall be governed by the clause pertaining to
Government property.

(End of clause)
Alternate I (APR 1984). If Government
inspection and acceptance are to be
performed at the contractor’s plant,
paragraph (e) below may be substituted
for paragraph (e) of the basic clause:
(e) The Government shall inspect for acceptance all items (other than aircraft to be
flown away, if any) to be furnished under
this contract at the Contractor’s plant or
plants specified in the contract, or at any
other plant or plants approved for such purpose in writing by the Contracting Officer.
The Contractor shall inform the contract administration office or Contracting Officer
when the work is ready for inspection. The
Government reserves the right to charge to
the Contractor any additional cost of Government inspection and test when items are
not ready at the time for which inspection
and test is requested by the Contractor.
[48 FR 42478, Sept. 19, 1983, as amended at 51
FR 2667, Jan. 17, 1986; 66 FR 2135, Jan. 10,
2001]

52.246–7 Inspection of Research and
Development—Fixed-Price.
As prescribed in 46.307(a), insert the
following clause:

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52.246–8

INSPECTION OF RESEARCH AND DEVELOPMENT—
FIXED-PRICE (AUG 1996)
(a) The Contractor shall provide and maintain an inspection system acceptable to the
Government covering the work under this
contract. Complete records of all inspection
work performed by the Contractor shall be
maintained and made available to the Government during contract performance and
for as long afterwards as the contract requires.
(b) The Government has the right to inspect and test all work called for by the contract, to the extent practicable at all places
and times, including the period of performance, and in any event before acceptance.
The Government may also inspect the premises of the Contractor or any subcontractor
engaged in contract performance. The Government shall perform inspections and tests
in a manner that will not unduly delay the
work.
(c) If the Government performs any inspection or test on the premises of the Contractor or a subcontractor, the Contractor
shall furnish and shall require subcontractors to furnish, at no increase in contract
price, all reasonable facilities and assistance
for the safe and convenient performance of
these duties. Except as otherwise provided in
the contract, the Government shall bear the
expense of Government inspections or tests
made at other than the Contractor’s or subcontractor’s premises.
(d) The Government shall accept or reject
the work as promptly as practicable after delivery, unless otherwise specified in the contract. Government failure to inspect and accept or reject the work shall not relieve the
Contractor from responsibility, nor impose
liability on the Government, for nonconforming work. Work is nonconforming when
it is defective in material or workmanship or
is otherwise not in conformity with contract
requirements.
(e) The Government has the right to reject
nonconforming work. If the Contractor fails
or is unable to correct or to replace nonconforming work within the delivery schedule
(or such later time as the Contracting Officer may authorize), the Contracting Officer
may accept the work and make an equitable
price reduction. Failure to agree on a price
reduction shall be a dispute.
(f) Inspection and test by the Government
does not relieve the Contractor from responsibility for defects or other failures to meet
the contract requirements that may be discovered before acceptance. Acceptance shall
be conclusive, except for latent defects,
fraud, gross mistakes amounting to fraud, or
as otherwise specified in the contract. If acceptance is not conclusive for any of these
causes, the Government, in addition to any
other rights and remedies provided by law,
or under other provisions of this contract,

shall have the right to require the Contractor (1) at no increase in contract price,
to correct or replace the defective or nonconforming supplies (work) at the original point
of delivery or at the Contractor’s plant at
the Contracting Officer’s election, and in accordance with a reasonable delivery schedule
as may be agreed upon between the Contractor and the Contracting Officer; provided,
the Contracting Officer may require a reduction in contract price if the Contractor fails
to meet such delivery schedule; or (2) within
a reasonable time after the Contractor’s receipt of notice of defects or nonconformance,
to repayment of such portion of the contract
price as is equitable under the circumstances
if the Government elects not to require correction or replacement. When supplies
(work) are (is) returned to the Contractor,
the Contractor shall bear transportation
costs from the original point of delivery to
the Contractor’s plant and return to the
original point of delivery when that point is
not the Contractor’s plant.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34762, July 3, 1995; 61 FR 31665, June 20,
1996]

52.246–8 Inspection of Research and
Development—Cost-Reimbursement.
As prescribed in 46.308, insert the following clause in solicitations and contracts for research and development
when (a) the primary objective is the
delivery of end items other than designs, drawings, or reports, and (b) a
cost-reimbursement contract is contemplated; unless use of the clause is
impractical and the clause prescribed
in 46.309 is considered to be more appropriate:
INSPECTION OF RESEARCH AND DEVELOPMENT—
COST-REIMBURSEMENT (MAY 2001)
(a) Definitions. As used in this clause— Contractor’s managerial personnel means the Contractor’s directors, officers, managers, superintendents, or equivalent representatives
who have supervision or direction of—
(1) All or substantially all of the Contractor’s business;
(2) All or substantially all of the Contractor’s operation at any one plant or separate
location where the contract is being performed; or
(3) A separate and complete major industrial operation connected with performing
this contract.
Work includes data when the contract does
not include the Warranty of Data clause.

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52.246–8

48 CFR Ch. 1 (10–1–03 Edition)

(b) The Contractor shall provide and maintain an inspection system acceptable to the
Government covering the work under this
contract. Complete records of all inspection
work performed by the Contractor shall be
maintained and made available to the Government during contract performance and
for as long afterwards as the contract requires.
(c) The Government has the right to inspect and test all work called for by the contract, to the extent practicable at all places
and times, including the period of performance, and in any event before acceptance.
The Government may also inspect the plant
or plants of the Contractor or its subcontractors engaged in the contract performance.
The Government shall perform inspections
and tests in a manner that will not unduly
delay the work.
(d) If the Government performs any inspection or test on the premises of the Contractor or a subcontractor, the Contractor
shall furnish and shall require subcontractors to furnish all reasonable facilities and
assistance for the safe and convenient performance of these duties.
(e) Unless otherwise provided in the contract, the Government shall accept work as
promptly as practicable after delivery, and
work shall be deemed accepted 90 days after
delivery, unless accepted earlier.
(f) At any time during contract performance, but no later than 6 months (or such
other time as may be specified in the contract) after acceptance of all of the end
items (other than designs, drawings, or reports) to be delivered under the contract, the
Government may require the Contractor to
replace or correct work not meeting contract
requirements. Time devoted to the replacement or correction of such work shall not be
included in the computation of the above
time period. Except as otherwise provided in
paragraph (h) below, the cost of replacement
or correction shall be determined as specified in the Allowable Cost and Payment
clause, but no additional fee shall be paid.
The Contractor shall not tender for acceptance work required to be replaced or corrected without disclosing the former requirement for replacement or correction, and,
when required, shall disclose the corrective
action taken.
(g)(1) If the Contractor fails to proceed
with reasonable promptness to perform required replacement or correction, the Government may—
(i) By contract or otherwise, perform the
replacement or correction, charge to the
Contractor any increased cost, or make an
equitable reduction in any fixed fee paid or
payable under the contract;
(ii) Require delivery of any undelivered articles and shall have the right to make an
equitable reduction in any fixed fee paid or
payable under the contract; or

(iii) Terminate the contract for default.
(2) Failure to agree on the amount of increased cost to be charged the Contractor or
to the reduction in fixed fee shall be a dispute.
(h) Notwithstanding paragraphs (f) and (g)
above, the Government may at any time require the Contractor to remedy by correction or replacement, without cost to the
Government, any failure by the Contractor
to comply with the requirements of this contract, if the failure is due to (1) fraud, lack
of good faith, or willful misconduct on the
part of the Contractor’s managerial personnel or (2) the conduct of one or more of
the Contractor’s employees selected or retained by the Contractor after any of the
Contractor’s managerial personnel has reasonable grounds to believe that the employee
is habitually careless or unqualified.
(i) This clause shall apply in the same
manner to a corrected or replacement end
item or components as to work originally delivered.
(j) The Contractor has no obligation or liability under the contract to correct or replace articles not meeting contract requirements at time of delivery, except as provided
in this clause or as may otherwise be specified in the contract.
(k) Unless otherwise provided in the contract, the Contractor’s obligations to correct
or replace Government-furnished property
shall be governed by the clause pertaining to
Government property.

(End of clause)
Alternate I (APR 1984). If it is contemplated that the contract will be on
a no-fee basis, substitute paragraphs (f)
and (g) below for paragraphs (f) and (g)
of the basic clause.
(f) At any time during contract performance, but not later than 6 months (or such
other time as may be specified in the contract) after acceptance of all of the end
items (other than designs, drawings, or reports) to be delivered under the contract, the
Government may require the Contractor to
correct or replace work not meeting contract
requirements. Time devoted to the correction or replacement of such work shall not
be included in the computation of the above
time period. Except as otherwise provided in
paragraph (g) below, the allowability of the
cost of any such replacement or correction
shall be determined as specified in the Allowable Cost and Payment clause. The Contractor shall not tender for acceptance corrected work without disclosing the former
requirement for correction, and, when required, shall disclose the corrective action
taken.
(g) If the Contractor fails to proceed with
reasonable promptness to perform required

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52.246–11

replacement or correction, the Government
may (1) by contract or otherwise, perform
the replacement or correction and charge to
the Contractor any increased cost, (2) require delivery of any undelivered articles, or
(3) terminate the contract for default. Failure to agree on the amount of increased cost
to be charged to the Contractor shall be a
dispute.
[48 FR 42478, Sept. 19, 1983, as amended at 66
FR 2135, Jan. 10, 2001]

52.246–9 Inspection of Research and
Development (Short Form).
As prescribed in 46.309, insert the following clause:
INSPECTION OF RESEARCH AND DEVELOPMENT
(SHORT FORM) (APR 1984)
The Government has the right to inspect
and evaluate the work performed or being
performed under the contract, and the premises where the work is being performed, at
all reasonable times and in a manner that
will not unduly delay the work. If the Government performs inspection or evaluation
on the premises of the Contractor or a subcontractor, the Contractor shall furnish and
shall require subcontractors to furnish all
reasonable facilities and assistance for the
safe and convenient performance of these duties.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 51
FR 27120, July 29, 1986]

52.246–10 Inspection of Facilities.
As prescribed in 46.310, insert the following clause in solicitations and contracts when a facilities contract is contemplated:
INSPECTION OF FACILITIES (APR 1984)
(a) Definition. Contractor’s managerial personnel, as used in this clause, is defined in
the Liability for the Facilities clause of this
contract.
(b) The Contractor shall provide and maintain an inspection system acceptable to the
Government covering the facilities and work
called for by this contract. Complete records
of all inspection work performed by the Contractor shall be maintained and made available to the Government during contract performance and for as long afterwards as the
contract requires.
(c) The Government has the right to inspect and test the facilities and work called
for by the contract, to the extent practicable

at all places and times, including the period
of manufacture. The Government may also
inspect the facilities and work at the plant
or plants of the Contractor or its subcontractors engaged in the performance of the contract. The Government shall perform inspections and tests in a manner that will not unduly delay the work to be performed by the
Contractor under this contract or any related contract.
(d) If the Government performs inspection
or test on the premises of the Contractor or
a subcontractor, the Contractor shall furnish
and shall require subcontractors to furnish
all reasonable facilities and assistance for
the safe and convenient performance of these
duties.
(e) The Contracting Officer may, at any
time, require the Contractor to correct or replace facilities or work that is defective or
does not conform to contract requirements.
Except as provided in paragraph (f) below,
corrections and replacements shall be at
Government expense if, under the terms of
this contract, the facilities or work corrected or replaced were initially furnished,
or required to be performed at Government
expense.
(f) The Contracting Officer may, at any
time, require the Contractor to correct or replace facilities or work that is defective or
does not conform to contract requirements,
without cost to the Government under this
contract or any related contract or subcontract, if the defects or failures are due to
fraud, lack of good faith, or willful misconduct on the part of the Contractor’s managerial personnel; or to the conduct of one or
more of the Contractor’s employees selected
or retained by the Contractor after any of
the Contractor’s managerial personnel has
reasonable grounds to believe that the employee is habitually careless or unqualified.
(g) Corrected or replacement facilities or
work shall be subject to this clause in the
same manner as facilities or work originally
completed under the contract.

(End of clause)
52.246–11 Higher-Level Contract Quality Requirement.
As prescribed in 46.311, insert the following clause:
HIGHER-LEVEL CONTRACT QUALITY
REQUIREMENT (FEB 1999)
The Contractor shall comply with the
higher-level quality standard selected below.
[If more than one standard is listed, the offeror
shall indicate its selection by checking the appropriate block.]

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52.246–12

48 CFR Ch. 1 (10–1–03 Edition)

Title

Number

Date

Tailoring

lllllllllll
lllllllllll
lllllllllll
lllllllllll

lllllllllll
lllllllllll
lllllllllll
lllllllllll

lllllllllll
lllllllllll
lllllllllll
lllllllllll

lllllllllll
lllllllllll
lllllllllll
lllllllllll

[Contracting Officer insert the title, number (if
any), date, and tailoring (if any) of the higherlevel quality standards.]

(End of clause)
[63 FR 70289, Dec. 18, 1998]

52.246–12 Inspection of Construction.
As prescribed in 46.312, insert the following clause:
INSPECTION OF CONSTRUCTION (AUG 1996)
(a) Definition. Work includes, but is not
limited to, materials, workmanship, and
manufacture and fabrication of components.
(b) The Contractor shall maintain an adequate inspection system and perform such
inspections as will ensure that the work performed under the contract conforms to contract requirements. The Contractor shall
maintain complete inspection records and
make them available to the Government. All
work shall be conducted under the general
direction of the Contracting Officer and is
subject to Government inspection and test at
all places and at all reasonable times before
acceptance to ensure strict compliance with
the terms of the contract.
(c) Government inspections and tests are
for the sole benefit of the Government and
do not—
(1) Relieve the Contractor of responsibility
for providing adequate quality control measures;
(2) Relieve the Contractor of responsibility
for damage to or loss of the material before
acceptance;
(3) Constitute or imply acceptance; or
(4) Affect the continuing rights of the Government after acceptance of the completed
work under paragraph (i) below.
(d) The presence or absence of a Government inspector does not relieve the Contractor from any contract requirement, nor
is the inspector authorized to change any
term or condition of the specification without the Contracting Officer’s written authorization.
(e) The Contractor shall promptly furnish,
at no increase in contract price, all facilities, labor, and material reasonably needed
for performing such safe and convenient inspections and tests as may be required by
the Contracting Officer. The Government
may charge to the Contractor any additional
cost of inspection or test when work is not

ready at the time specified by the Contractor
for inspection or test, or when prior rejection makes reinspection or retest necessary.
The Government shall perform all inspections and tests in a manner that will not unnecessarily delay the work. Special, full size,
and performance tests shall be performed as
described in the contract.
(f) The Contractor shall, without charge,
replace or correct work found by the Government not to conform to contract requirements, unless in the public interest the Government consents to accept the work with an
appropriate adjustment in contract price.
The Contractor shall promptly segregate and
remove rejected material from the premises.
(g) If the Contractor does not promptly replace or correct rejected work, the Government may (1) by contract or otherwise, replace or correct the work and charge the
cost to the Contractor or (2) terminate for
default the Contractor’s right to proceed.
(h) If, before acceptance of the entire work,
the Government decides to examine already
completed work by removing it or tearing it
out, the Contractor, on request, shall
promptly furnish all necessary facilities,
labor, and material. If the work is found to
be defective or nonconforming in any material respect due to the fault of the Contractor or its subcontractors, the Contractor
shall defray the expenses of the examination
and of satisfactory reconstruction. However,
if the work is found to meet contract requirements, the Contracting Officer shall
make an equitable adjustment for the additional services involved in the examination
and reconstruction, including, if completion
of the work was thereby delayed, an extension of time.
(i) Unless otherwise specified in the contract, the Government shall accept, as
promptly as practicable after completion
and inspection, all work required by the contract or that portion of the work the Contracting Officer determines can be accepted
separately. Acceptance shall be final and
conclusive except for latent defects, fraud,
gross mistakes amounting to fraud, or the
Government’s rights under any warranty or
guarantee.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 51
FR 27120, July 29, 1986; 60 FR 34762, July 3,
1995; 61 FR 31665, June 20, 1996]

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52.246–13 Inspection—Dismantling,
Demolition, or Removal of Improvements.
As prescribed in 46.313, insert the following clause in solicitations and contracts for dismantling, demolition, or
removal of improvements:
INSPECTION—DISMANTLING, DEMOLITION, OR
REMOVAL OF IMPROVEMENTS (AUG 1996)
(a) Unless otherwise designated by the
specifications, all workmanship performed
under the contract is subject to Government
inspection at all times and places where dismantling or demolition work is being performed. The Contractor shall furnish
promptly, and at no increase in contract
price, all reasonable facilities, labor, and
materials necessary for safe and convenient
inspection by the Government. The Government shall perform inspections in a manner
that will not unduly delay the work.
(b) The Contractor is responsible for damage to property caused by defective workmanship. The Contractor shall promptly segregate and remove from the premises any unsatisfactory facilities, materials, and equipment used in contract performance, and
promptly replace them with satisfactory
items. If the Contractor fails to proceed at
once in a workmanlike manner with performance of the work or with the correction
of defective workmanship, the Government
may (1) by contract or otherwise, replace the
facilities, materials, and equipment or correct the workmanship and charge the cost to
the Contractor and (2) terminate for default
the Contractor’s right to proceed. The Contractor and any surety shall be liable, to the
extent specified in the contract for any damage or cost of repair or replacement.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 61
FR 31665, June 20, 1996]

52.246–14 Inspection
of
Transportation.
As prescribed in 46.314, insert the following clause in solicitations and contracts for freight transportation services (including local drayage) by rail,
motor (including bus), domestic freight
forwarder, and domestic water carriers
(including inland, coastwise, and intercoastal). The contracting officer shall
not use the clause for the acquisition
of transportation services by domestic
or international air carriers or by
international ocean carriers, or to
freight services provided under bills of
lading or to those negotiated for re-

duced rates under 49 U.S.C. 1072(b)(1).
(See part 47, Transportation.)
INSPECTION OF TRANSPORTATION (APR 1984)
The Government has the right to inspect
and test the Contractor’s services, facilities,
and equipment at all reasonable times. The
Contractor shall furnish Government representatives with the free access and reasonable facilities and assistance required to accomplish their inspections and tests.

(End of clause)
52.246–15 Certificate of Conformance.
As prescribed in 46.315, insert the following clause in solicitations and contracts for supplies or services when the
conditions in 46.504 apply:
CERTIFICATE OF CONFORMANCE (APR 1984)
(a) When authorized in writing by the cognizant
Contract
Administration
Office
(CAO), the Contractor shall ship with a Certificate of Conformance any supplies for
which the contract would otherwise require
inspection at source. In no case shall the
Government’s right to inspect supplies under
the inspection provisions of this contract be
prejudiced. Shipments of such supplies will
not be made under this contract until use of
the Certificate of Conformance has been authorized in writing by the CAO, or inspection
and acceptance have occurred.
(b) The Contractor’s signed certificate
shall be attached to or included on the top
copy of the inspection or receiving report
distributed to the payment office or attached
to the CAO copy when contract administration (Block 10 of the DD Form 250) is performed by the Defense Contract Administration Services. In addition, a copy of the
signed certificate shall also be attached to or
entered on copies of the inspection or receiving report accompanying the shipment.
(c) The Government has the right to reject
defective supplies or services within a reasonable time after delivery by written notification to the Contractor. The Contractor
shall in such event promptly replace, correct, or repair the rejected supplies or services at the Contractor’s expense.
(d) The certificate shall read as follows:
‘‘I certify that on ll [insert date], the lll
[insert Contractor’s name] furnished the supplies or services called for by Contract No.
ll via ll [Carrier] on ll [identify the bill
of lading or shipping document] in accordance
with all applicable requirements. I further
certify that the supplies or services are of
the quality specified and conform in all respects with the contract requirements, including specifications, drawings, preservation, packaging, packing, marking requirements, and physical item identification (part

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52.246–16

48 CFR Ch. 1 (10–1–03 Edition)

number), and are in the quantity shown on
this or on the attached acceptance document.’’
Date of Execution: lllllllllllll
Signature: llllllllllllllllll
Title: llllllllllllllllllll

(End of clause)
52.246–16

Responsibility for Supplies.

As prescribed in 46.316, insert the following clause:
RESPONSIBILITY FOR SUPPLIES (APR 1984)
(a) Title to supplies furnished under this
contract shall pass to the Government upon
formal acceptance, regardless of when or
where the Government takes physical possession, unless the contract specifically provides for earlier passage of title.
(b) Unless the contract specifically provides otherwise, risk of loss of or damage to
supplies 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) Acceptance by the Government or delivery of the supplies to the Government at the
destination specified in the contract, whichever is later, if transportation is f.o.b. destination.
(c) Paragraph (b) above shall not apply to
supplies that so fail to conform to contract
requirements as to give a right of rejection.
The risk of loss of or damage to such nonconforming supplies remains with the Contractor until cure or acceptance. After cure
or acceptance, paragraph (b) above shall
apply.
(d) Under paragraph (b) above, the Contractor shall not be liable for loss of or damage to supplies caused by the negligence of
officers, agents, or employees of the Government acting within the scope of their employment.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34762, July 3, 1995]

52.246–17 Warranty of Supplies of a
Noncomplex Nature.
As prescribed in 46.710(a)(1), insert a
clause substantially as follows:
WARRANTY OF SUPPLIES OF A NONCOMPLEX
NATURE (JUNE 2003)
(a) Definitions. As used in this clause—
Acceptance means the act of an authorized
representative of the Government by which
the Government assumes for itself, or as an
agent of another, ownership of existing sup-

plies, or approves specific services as partial
or complete performance of the contract.
Supplies means the end items furnished by
the Contractor and related services required
under this contract. The word does not include ‘‘data.’’
(b) Contractor’s obligations. (1) Notwithstanding inspection and acceptance by the
Government of supplies furnished under this
contract, or any condition of this contract
concerning the conclusiveness thereof, the
Contractor
warrants
that
for
ll
[Contracting Officer shall state specific period
of time after delivery, or the specified event
whose occurrence will terminate the warranty
period; e.g., the number of miles or hours of use,
or combinations of any applicable events or periods of time]—
(i) All supplies furnished under this contract will be free from defects in material or
workmanship and will conform with all requirements of this contract; and
(ii) The preservation, packaging, packing,
and marking, and the preparation for, and
method of, shipment of such supplies will
conform with the requirements of this contract.
(2) When return, correction, or replacement is required, transportation charges and
responsibility for the supplies while in transit shall be borne by the Contractor. However, the Contractor’s liability for the transportation charges shall not exceed an
amount equal to the cost of transportation
by the usual commercial method of shipment
between the place of delivery specified in
this contract and the Contractor’s plant, and
return.
(3) Any supplies or parts thereof, corrected
or furnished in replacement under this
clause, shall also be subject to the terms of
this clause to the same extent as supplies
initially delivered. The warranty, with respect to supplies or parts thereof, shall be
equal in duration to that in paragraph (b)(1)
of this clause and shall run from the date of
delivery of the corrected or replaced supplies.
(4)
All
implied
warranties
of
merchantability and fitness for a particular
purpose are excluded from any obligation
contained in this contract.
(c) Remedies available to the Government. (1)
The Contracting Officer shall give written
notice to the Contractor of any breach of
warranties in paragraph (b)(1) of this clause
within ll [Contracting Officer shall insert
specific period of time; e.g., ‘‘45 days of the last
delivery under this contract,’’ or ‘‘45 days after
discovery of the defect’’].
(2) Within a reasonable time after the notice, the Contracting Officer may either—
(i) Require, by written notice, the prompt
correction or replacement of any supplies or
parts thereof (including preservation, packaging, packing, and marking) that do not

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52.246–17

conform with the requirements of this contract within the meaning of paragraph (b)(1)
of this clause; or
(ii) Retain such supplies and reduce the
contract price by an amount equitable under
the circumstances.
(3)(i) If the contract provides for inspection
of supplies by sampling procedures, conformance of supplies or components subject to
warranty action shall be determined by the
applicable sampling procedures in the contract. The Contracting Officer—
(A) May, for sampling purposes, group any
supplies delivered under this contract;
(B) Shall require the size of the sample to
be that required by sampling procedures
specified in the contract for the quantity of
supplies on which warranty action is proposed;
(C) May project warranty sampling results
over supplies in the same shipment or other
supplies contained in other shipments even
though all of such supplies are not present at
the point of reinspection; provided, that the
supplies remaining are reasonably representative of the quantity on which warranty action is proposed; and
(D) Need not use the same lot size as on
original inspection or reconstitute the original inspection lots.
(ii) Within a reasonable time after notice
of any breach of the warranties specified in
paragraph (b)(1) of this clause, the Contracting Officer may exercise one or more of
the following options:
(A) Require an equitable adjustment in the
contract price for any group of supplies.
(B) Screen the supplies grouped for warranty action under this clause at the Contractor’s expense and return all nonconforming supplies to the Contractor for correction or replacement.
(C) Require the Contractor to screen the
supplies at locations designated by the Government within the contiguous United
States and to correct or replace all nonconforming supplies.
(D) Return the supplies grouped for warranty action under this clause to the Contractor (irrespective of the f.o.b. point or the
point of acceptance) for screening and correction or replacement.
(4)(i) The Contracting Officer may, by contract or otherwise, correct or replace the
nonconforming supplies with similar supplies from another source and charge to the
Contractor the cost occasioned to the Government thereby if the Contractor—
(A) Fails to make redelivery of the corrected or replaced supplies within the time
established for their return; or
(B) Fails either to accept return of the
nonconforming supplies or fails to make
progress after their return to correct or replace them so as to endanger performance of
the delivery schedule, and in either of these
circumstances does not cure such failure

within a period of 10 days (or such longer period as the Contracting Officer may authorize in writing) after receipt of notice from
the Contracting Officer specifying such failure.
(ii) Instead of correction or replacement by
the Government, the Contracting Officer
may require an equitable adjustment of the
contract price. In addition, if the Contractor
fails to furnish timely disposition instructions, the Contracting Officer may dispose of
the nonconforming supplies for the Contractor’s account in a reasonable manner. The
Government is entitled to reimbursement
from the Contractor, or from the proceeds of
such disposal, for the reasonable expenses of
the care and disposition of the nonconforming supplies, as well as for excess costs
incurred or to be incurred.
(5) The rights and remedies of the Government provided in this clause are in addition
to and do not limit any rights afforded to the
Government by any other clause of this contract.

(End of clause)
Alternate I. [Reserved]
Alternate II (APR 1984). If it is desirable to specify that necessary transportation incident to correction or replacement will be at the Government’s
expense (as might be the case if, for example, the cost of a warranty would
otherwise be prohibitive), substitute a
paragraph substantially the same as
the following paragraph (b)(2) for paragraph (b)(2) of the basic clause:
(2) If correction or replacement is required
and transportation of supplies in connection
with correction or replacement is necessary,
transportation charges and responsibility for
the supplies while in transit shall be borne
by the Government.

Alternate III (APR 1984). If the supplies cannot be obtained from another
source, substitute a paragraph substantially the same as the following paragraph (c)(4) for paragraph (c)(4) of the
basic clause:
(4) If the Contractor does not agree as to
responsibility to correct or replace the supplies delivered, the Contractor shall nevertheless proceed in accordance with the written request issued by the Contracting Officer
under paragraph (c)(2) of this clause to correct or replace the defective or nonconforming supplies. In the event it is later determined that the supplies were not defective or nonconforming within the terms and
conditions of this clause, the contract price
will be equitably adjusted.

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52.246–18

48 CFR Ch. 1 (10–1–03 Edition)

Alternate IV (APR 1984). If a fixedprice incentive contract is contemplated, add a paragraph substantially the same as the following paragraph(c)(6) to the basic clause:
(6) All costs incurred or estimated to be incurred by the Contractor in complying with
this clause shall be considered when negotiating the total final price under the Incentive Price Revision clause of this contract.
After establishment of the total final price,
Contractor compliance with this clause shall
be at no increase in the total final price. Any
equitable adjustment made under paragraph
(c)(2) of this clause shall be governed by the
paragraph entitled Equitable Adjustments
Under Other Clauses in the Incentive Price
Revision clause of this contract.

Alternate V (APR 1984). If it is anticipated that recovery of the warranted
item will involve considerable Government expense for disassembly and/or
reassembly of larger items, add a paragraph substantially the same as the
following paragraph (c)(6) to the basic
clause. Redesignate the additional
paragraph as (c)(7) if Alternate IV is
also being used.
(6) The Contractor shall be liable for the
reasonable costs of disassembly and/or reassembly of larger items when it is necessary
to remove the supplies to be inspected and/or
returned for correction or replacement.
[48 FR 42478, Sept. 19, 1983, as amended at 55
FR 38518, Sept. 18, 1990; 60 FR 48256, Sept. 18,
1995; 66 FR 2136, Jan. 10, 2001; 68 FR 28087,
May 22, 2003]

52.246–18 Warranty of Supplies of a
Complex Nature.
As prescribed in 46.710(b)(1), insert a
clause substantially as follows:
WARRANTY OF SUPPLIES OF A COMPLEX
NATURE (MAY 2001)
(a) Definitions. As used in this clause—
Acceptance means the act of an authorized
representative of the Government by which
the Government assumes for itself, or as an
agent of another, ownership of existing and
identified supplies, or approves specific services rendered, as partial or complete performance of the contract.
Supplies means the end items furnished by
the Contractor and related services required
under this contract. The word does not include ‘‘data.’’
(b) Contractor’s obligations. (1) The Contractor warrants that for ll [Contracting
Officer shall state the specific warranty period
after delivery, or the specified event whose occurrence will terminate the warranty period;

e.g., the number of miles or hours of use, or combinations of any applicable events or periods of
time] all supplies furnished under this contract will be free from defects in material
and workmanship and will conform with all
requirements of this contract; provided, however, that with respect to Government-furnished property, the Contractor’s warranty
shall extend only to its proper installation,
unless the Contractor performs some modification or other work on the property, in
which case the Contractor’s warranty shall
extend to the modification or other work.
(2) Any supplies or parts thereof corrected
or furnished in replacement shall be subject
to the conditions of this clause to the same
extent as supplies initially delivered. This
warranty shall be equal in duration to that
set forth in paragraph (b)(1) of this clause
and shall run from the date of delivery of the
corrected or replaced supplies.
(3) The Contractor shall not be obligated to
correct or replace supplies if the facilities,
tooling, drawings, or other equipment or
supplies necessary to accomplish the correction or replacement have been made unavailable to the Contractor by action of the Government. In the event that correction or replacement has been directed, the Contractor
shall promptly notify the Contracting Officer, in writing, of the nonavailability.
(4) The Contractor shall also prepare and
furnish to the Government data and reports
applicable to any correction required (including revision and updating of all affected
data called for under this contract) at no increase in the contract price.
(5) When supplies are returned to the Contractor, the Contractor shall bear the transportation costs from the place of delivery
specified in the contract (irrespective of the
f.o.b. point or the point of acceptance) to the
Contractor’s plant and return.
(6)
All
implied
warranties
of
merchantability and fitness for a particular
purpose are excluded from any obligation
contained in this contract.
(c) Remedies available to the Government. (1)
In the event of a breach of the Contractor’s
warranty in paragraph (b)(1) of this clause,
the Government may, at no increase in contract price—
(i) Require the Contractor, at the place of
delivery specified in the contract (irrespective of the f.o.b. point or the point of acceptance) or at the Contractor’s plant, to repair
or replace, at the Contractor’s election, defective or nonconforming supplies; or
(ii) Require the Contractor to furnish at
the Contractor’s plant the materials or parts
and installation instructions required to successfully accomplish the correction.
(2) If the Contracting Officer does not require correction or replacement of defective
or nonconforming supplies or the Contractor
is not obligated to correct or replace under

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52.246–19

paragraph (b)(3) of this clause, the Government shall be entitled to an equitable reduction in the contract price.
(3) The Contracting Officer shall notify the
Contractor in writing of any breach of the
warranty in paragraph (b) of this clause
within ll [Contracting Officer shall insert
specific period of time in which notice shall be
given to the Contractor; e.g., 45 days after delivery of the nonconforming supplies.; 45 days of
the last delivery under this contract.; or 45 days
after discovery of the defect.] The Contractor
shall submit to the Contracting Officer a
written
recommendation
within
ll
[Contracting Officer shall insert period of time]
as to the corrective action required to remedy the breach. After the notice of breach,
but not later than ll [Contracting Officer
shall insert period within which the warranty
remedies should be exercised] after receipt of
the Contractor’s recommendation for corrective action, the Contracting Officer may, in
writing, direct correction or replacement as
in paragraph (c)(1) of this clause, and the
Contractor shall, notwithstanding any disagreement regarding the existence of a
breach of warranty, comply with this direction. If it is later determined that the Contractor did not breach the warranty in paragraph (b)(1) of this clause, the contract price
will be equitably adjusted.
(4) If supplies are corrected or replaced, the
period for notification of a breach of the
Contractor’s warranty in paragraph (c)(3) of
this clause shall be ll [Contracting Officer
shall insert period within which the Contractor
must be notified of a breach as to corrected or
replaced supplies] from the furnishing or return by the Contractor to the Government of
the corrected or replaced supplies or parts
thereof, or, if correction or replacement is
effected by the Contractor at a Government
or other activity, for ll [Contracting Officer
shall insert period within which the Contractor
must be notified of a breach of warranty as to
corrected or replaced supplies] thereafter.
(5) The rights and remedies of the Government provided in this clause are in addition
to and do not limit any rights afforded to the
Government by any other clause of the contract.

(End of clause)
Alternate I [Reserved]
Alternate II (APR 1984). If it is desirable to specify that necessary transportation incident to correction or replacement will be at the Government’s
expense (as might be the case if, for example, the cost of a warranty would
otherwise be prohibitive), substitute a
paragraph substantially the same as
the following paragraph (b)(5) for paragraph (b)(5) of the basic clause:

(5) If correction or replacement is required
and transportation of supplies in connection
with correction or replacement is necessary,
transportation charges and responsibility for
the supplies while in transit shall be borne
by the Government.

Alternate III (APR 1984). If a fixedprice incentive contract is contemplated, add a paragraph substantially the same as the following paragraph (c)(6) to the basic clause:
(6) All costs incurred or estimated to be incurred by the Contractor in complying with
this clause shall be considered when negotiating the total final price under the Incentive Price Revision clause of this contract.
After establishment of the total final price,
Contractor compliance with this clause shall
be at no increase in the total final price. Any
equitable adjustments made under paragraph
(c)(2) of this clause shall be governed by the
paragraph entitled Equitable Adjustments
Under Other Clauses in the Incentive Price
Revision clause of this contract.

Alternate IV (APR 1984). If it is anticipated that recovery of the warranted
item will involve considerable Government expense for disassembly and/or
reassembly of larger items, add a paragraph substantially the same as the
following paragraph (c)(6) to the basic
clause. Redesignate the additional
paragraph as (c)(7) if Alternate III is
also used:
(6) The Contractor shall be liable for the
reasonable costs of disassembly and/or reassembly of larger items when it is necessary
to remove the supplies to be inspected and/or
returned for correction or replacement.
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 48256, Sept. 18, 1995; 66 FR 2136, Jan. 10,
2001]

52.246–19 Warranty of Systems and
Equipment
under
Performance
Specifications or Design Criteria.
As prescribed in 46.710(c)(1), the contracting officer may insert a clause
substantially as follows:
WARRANTY OF SYSTEMS AND EQUIPMENT
UNDER PERFORMANCE SPECIFICATIONS OR
DESIGN CRITERIA (MAY 2001)
(a) Definitions. As used in this clause—
Acceptance means the act of an authorized
representative of the Government by which
the Government assumes for itself, or as an
agent of another, ownership of existing and
identified supplies, or approves specific services rendered, as partial or complete performance of the contract.

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52.246–19

48 CFR Ch. 1 (10–1–03 Edition)

Defect means any condition or characteristic in any supplies or services furnished by the Contractor under the contract
that is not in compliance with the requirements of the contract.
Supplies means the end items furnished by
the Contractor and related services required
under this contract. Except when this contract includes the clause entitled Warranty
of Data, supplies also mean ‘‘data.’’
(b) Contractor’s obligations. (1) The Contractor’s warranties under this clause shall apply
only to those defects discovered by either
the Government or the Contractor ll
[Contracting Officer shall state the warranty
period; e.g., at the time of delivery; within 45
days after delivery, or the specified event
whose occurrence will terminate the warranty period; e.g., the number of miles or
hours of use, or combination of any applicable events or periods of time.]
(2) If the Contractor becomes aware at any
time before acceptance by the Government
(whether before or after tender to the Government) that a defect exists in any supplies
or services, the Contractor shall (i) promptly
correct the defect or (ii) promptly notify the
Contracting Officer, in writing, of the defect,
using the same procedures prescribed in
paragraph (b)(3) of this clause.
(3) If the Contracting Officer determines
that a defect exists in any of the supplies or
services accepted by the Government under
this contract, the Contracting Officer shall
promptly notify the Contractor of the defect,
in writing, within ll [Contracting Officer
shall insert the specific period of time in which
notice shall be given to the Contractor; e.g., 30
days after delivery of the nonconforming supplies; 90 days of the last delivery under this contract; or 90 days after discovery of the defect.]
Upon timely notification of the existence of
a defect, or if the Contractor independently
discovers a defect in accepted supplies or
services, the Contractor shall submit to the
Contracting Officer, in writing, within ll
[Contracting Officer shall insert period of time]
a recommendation for corrective actions, together with supporting information in sufficient detail for the Contracting Officer to determine what corrective action, if any, shall
be undertaken.
(4) The Contractor shall promptly comply
with any timely written direction from the
Contracting Officer to correct or partially
correct a defect, at no increase in the contract price.
(5) The Contractor shall also prepare and
furnish to the Contracting Officer data and
reports applicable to any correction required
under this clause (including revision and updating of all other affected data called for
under this contract) at no increase in the
contract price.
(6) In the event of timely notice of a decision not to correct or only to partially correct, the Contractor shall submit a technical

and cost proposal within ll [Contracting Officer shall insert period of time] to amend the
contract to permit acceptance of the affected
supplies or services in accordance with the
revised requirement, and an equitable reduction in the contract price shall promptly be
negotiated by the parties and be reflected in
a supplemental agreement to this contract.
(7) Any supplies or parts thereof corrected
or furnished in replacement and any services
reperformed shall also be subject to the conditions of this clause to the same extent as
supplies or services initially accepted. The
warranty, with respect to these supplies,
parts, or services, shall be equal in duration
to that set forth in paragraph (b)(1) of this
clause, and shall run from the date of delivery of the corrected or replaced supplies.
(8) The Contractor shall not be responsible
under this clause for the correction of defects in Government-furnished property, except for defects in installation, unless the
Contractor performs, or is obligated to perform, any modifications or other work on
such property. In that event, the Contractor
shall be responsible for correction of defects
that result from the modifications or other
work.
(9) If the Government returns supplies to
the Contractor for correction or replacement
under this clause, the Contractor shall be
liable for transportation charges up to an
amount equal to the cost of transportation
by the usual commercial method of shipment
from the place of delivery specified in this
contract (irrespective of the f.o.b. point or
the point of acceptance) to the Contractor’s
plant and return to the place of delivery
specified in this contract. The Contractor
shall also bear the responsibility for the supplies while in transit.
(10)
All
implied
warranties
of
merchantability and fitness for a particular
purpose are excluded from any obligation
under this contract.
(c) Remedies available to the Government. (1)
The rights and remedies of the Government
provided in this clause—
(i) Shall not be affected in any way by any
terms or conditions of this contract concerning the conclusiveness of inspection and
acceptance; and
(ii) Are in addition to, and do not limit,
any rights afforded to the Government by
any other clause of this contract.
(2) Within ll [Contracting Officer shall insert period of time] after receipt of the Contractor’s recommendations for corrective action and adequate supporting information,
the Contracting Officer, using sole discretion, shall give the Contractor written notice not to correct any defect, or to correct
or partially correct any defect within a reasonable time at ll [Contracting Officer shall
insert locations where corrections may be performed].

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Federal Acquisition Regulation

52.246–20

(3) In no event shall the Government be responsible for any extension or delays in the
scheduled deliveries or periods of performance under this contract as a result of the
Contractor’s obligations to correct defects,
nor shall there be any adjustment of the delivery schedule or period of performance as a
result of the correction of defects unless provided by a supplemental agreement with adequate consideration.
(4) This clause shall not be construed as
obligating the Government to increase the
contract price.
(5)(i) The Contracting Officer shall give the
Contractor a written notice, specifying any
failure or refusal of the Contractor to—
(A) Present a detailed recommendation for
corrective action as required by paragraph
(b)(3) of this clause;
(B) Correct defects as directed under paragraph (b)(4) of this clause; or
(C) Prepare and furnish data and reports as
required by paragraph (b)(5) of this clause.
(ii) The notice shall specify a period of
time following receipt of the notice by the
Contractor in which the Contractor must
remedy the failure or refusal specified in the
notice.
(6) If the Contractor does not comply with
the Contracting Officer’s written notice in
paragraph (c)(5)(i) of this clause, the Contracting Officer may by contract or otherwise—
(i) Obtain detailed recommendations for
corrective action and either—
(A) Correct the supplies or services; or
(B) Replace the supplies or services, and if
the Contractor fails to furnish timely disposition instructions, the Contracting Officer may dispose of the nonconforming supplies for the Contractor’s account in a reasonable manner, in which case the Government is entitled to reimbursement from the
Contractor, or from the proceeds, for the reasonable expenses of care and disposition, as
well as for excess costs incurred or to be incurred;
(ii) Obtain applicable data and reports; and
(iii) Charge the Contractor for the costs incurred by the Government.

with correction or replacement is necessary,
transportation charges and responsibility for
the supplies while in transit shall be borne
by the Government.

Alternate II (APR 1984). If a fixedprice incentive contract is contemplated, add a paragraph substantially the same as the following paragraph (c)(7) to the basic clause:
(7) All costs incurred or estimated to be incurred by the Contractor in complying with
this clause shall be considered when negotiating the total final price under the Incentive Price Revision clause of this contract.
After establishment of the total final price,
Contractor compliance with this clause shall
be at no increase in the total final price. Any
equitable adjustments made under paragraph
(b)(6) of this clause shall be governed by the
paragraph entitled Equitable Adjustments
Under Other Clauses in the Incentive Price
Revision clause of this contract.

Alternate III (APR 1984). If it is anticipated that recovery of the warranted item will involve considerable
Government expense for disassembly
and/or reassembly of larger items, add
a paragraph substantially the same as
the following paragraph (c)(7) to the
basic clause. Redesignate the additional paragraph as (c)(8) if Alternate
II is also being used:
(7) The Contractor shall be liable for the
reasonable costs of disassembly and/or reassembly of larger items when it is necessary
to remove the supplies to be inspected and/or
returned for correction or replacement.
[48 FR 42478, Sept. 19, 1983, as amended at 54
FR 48997, Nov. 28, 1989; 66 FR 2136, Jan. 10,
2001]

52.246–20 Warranty of Services.
As prescribed in 46.710(d), insert a
clause substantially as follows:
WARRANTY OF SERVICES (MAY 2001)

(End of clause)
Alternate I (APR 1984). If it is desirable to specify that necessary transportation incident to correction or replacement will be at the Government’s
expense (as might be the case if, for example, the cost of a warranty would
otherwise be prohibitive), substitute a
paragraph substantially the same as
the following paragraph (b)(9) for paragraph (b)(9) of the basic clause:
(9) If correction or replacement is required,
and transportation of supplies in connection

(a) Definitions Acceptance, as used in this
clause, means the act of an authorized representative of the Government by which the
Government assumes for itself, or as an
agent of another, ownership of existing and
identified supplies, or approves specific services, as partial or complete performance of
the contract.
(b) Notwithstanding inspection and acceptance by the Government or any provision
concerning the conclusiveness thereof, the
Contractor warrants that all services performed under this contract will, at the time
of acceptance, be free from defects in workmanship and conform to the requirements of

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52.246–21

48 CFR Ch. 1 (10–1–03 Edition)

this contract. The Contracting Officer shall
give written notice of any defect or nonconformance
to
the
Contractor
ll
[Contracting Officer shall insert the specific period of time in which notice shall be given to the
Contractor; e.g., within 30 days from the date of
acceptance by the Government,; within 1000
hours of use by the Government,; or other
specified event whose occurrence will terminate the period of notice, or combination of
any applicable events or period of time].
This notice shall state either (1) that the
Contractor shall correct or reperform any
defective or nonconforming services, or (2)
that the Government does not require correction or reperformance.
(c) If the Contractor is required to correct
or reperform, it shall be at no cost to the
Government, and any services corrected or
reperformed by the Contractor shall be subject to this clause to the same extent as
work initially performed. If the Contractor
fails or refuses to correct or reperform, the
Contracting Officer may, by contract or otherwise, correct or replace with similar services and charge to the Contractor the cost
occasioned to the Government thereby, or
make an equitable adjustment in the contract price.
(d) If the Government does not require correction or reperformance, the Contracting
Officer shall make an equitable adjustment
in the contract price.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 66
FR 2136, Jan. 10, 2001]

52.246–21

Warranty of Construction.

As prescribed in 46.710(e)(1), the contracting officer may insert a clause
substantially as follows in solicitations
and contracts when a fixed-price construction contract (see 46.705(c)) is contemplated, and the use of a warranty
clause has been approved under agency
procedures:
WARRANTY OF CONSTRUCTION (APR 1984)
(a) In addition to any other warranties in
this contract, the Contractor warrants, except as provided in paragraph (i) of this
clause, that work performed under this contract conforms to the contract requirements
and is free of any defect in equipment, material, or design furnished, or workmanship
performed by the Contractor or any subcontractor or supplier at any tier.
(b) This warranty shall continue for a period of 1 year from the date of final acceptance of the work. If the Government takes
possession of any part of the work before
final acceptance, this warranty shall con-

tinue for a period of 1 year from the date the
Government takes possession.
(c) The Contractor shall remedy at the
Contractor’s expense any failure to conform,
or any defect. In addition, the Contractor
shall remedy at the Contractor’s expense any
damage to Government-owned or controlled
real or personal property, when that damage
is the result of—
(1) The Contractor’s failure to conform to
contract requirements; or
(2) Any defect of equipment, material,
workmanship, or design furnished.
(d) The Contractor shall restore any work
damaged in fulfilling the terms and conditions of this clause. The Contractor’s warranty with respect to work repaired or replaced will run for 1 year from the date of repair or replacement.
(e) The Contracting Officer shall notify the
Contractor, in writing, within a reasonable
time after the discovery of any failure, defect, or damage.
(f) If the Contractor fails to remedy any
failure, defect, or damage within a reasonable time after receipt of notice, the Government shall have the right to replace, repair,
or otherwise remedy the failure, defect, or
damage at the Contractor’s expense.
(g) With respect to all warranties, express
or implied, from subcontractors, manufacturers, or suppliers for work performed and
materials furnished under this contract, the
Contractor shall—
(1) Obtain all warranties that would be
given in normal commercial practice;
(2) Require all warranties to be executed,
in writing, for the benefit of the Government, if directed by the Contracting Officer;
and
(3) Enforce all warranties for the benefit of
the Government, if directed by the Contracting Officer.
(h) In the event the Contractor’s warranty
under paragraph (b) of this clause has expired, the Government may bring suit at its
expense to enforce a subcontractor’s, manufacturer’s, or supplier’s warranty.
(i) Unless a defect is caused by the negligence of the Contractor or subcontractor or
supplier at any tier, the Contractor shall not
be liable for the repair of any defects of material or design furnished by the Government
nor for the repair of any damage that results
from any defect in Government-furnished
material or design.
(j) This warranty shall not limit the Government’s rights under the Inspection and
Acceptance clause of this contract with respect to latent defects, gross mistakes, or
fraud.

(End of clause)
Alternate I (APR 1984). If the Government specifies in the contract the use
of any equipment by brand name and

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52.246–24

model, the contracting officer may add
a paragraph substantially the same as
the following paragraph (k) to the
basic clause:

from any defects or deficiencies in, the supplies delivered under this contract.

(k) Defects in design or manufacture of
equipment specified by the Government on a
brand name and model basis, shall not be included in this warranty. In this event, the
Contractor shall require any subcontractors,
manufacturers, or suppliers thereof to execute their warranties, in writing, directly to
the Government.

[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34762, July 3, 1995; 61 FR 67426, Dec. 20,
1996]

[48 FR 42478, Sept. 19, 1983, as amended at 59
FR 11388, Mar. 10, 1994]

52.246–22

[Reserved]

52.246–23

Limitation of Liability.

As prescribed in 46.805, insert the following clause:
LIMITATION OF LIABILITY (FEB 1997)
(a) Except as provided in paragraphs (b)
and (c) below, and except for remedies expressly provided elsewhere in this contract,
the Contractor shall not be liable for loss of
or damage to property of the Government
(excluding the supplies delivered under this
contract) that (1) occurs after Government
acceptance of the supplies delivered under
this contract and (2) results from any defects
or deficiencies in the supplies.
(b) The limitation of liability under paragraph (a) above shall not apply when a defect
or deficiency in, or the Government’s acceptance of, the supplies results from willful misconduct or lack of good faith on the part of
any of the Contractor’s managerial personnel. The term Contractor’s managerial personnel, as used in this clause, means the Contractor’s directors, officers, and any of the
Contractor’s managers, superintendents, or
equivalent representatives who have supervision or direction of—
(1) All or substantially all of the Contractor’s business;
(2) All or substantially all of the Contractor’s operations at any one plant, laboratory, or separate location at which the contract is being performed; or
(3) A separate and complete major industrial operation connected with the performance of this contract.
(c) If the Contractor carries insurance, or
has established a reserve for self-insurance,
covering liability for loss or damage suffered
by the Government through purchase or use
of the supplies required to be delivered under
this contract, the Contractor shall be liable
to the Government, to the extent of such insurance or reserve, for loss of or damage to
property of the Government occurring after
Government acceptance of, and resulting

(End of clause)

52.246–24 Limitation
High-Value Items.

of

Liability—

As prescribed in 46.805, insert the following clause:
LIMITATION OF LIABILITY—HIGH-VALUE ITEMS
(FEB 1997)
(a) Except as provided in paragraphs (b)
through (e) below, and notwithstanding any
other provision of this contract, the Contractor shall not be liable for loss of or damage to property of the Government (including the supplies delivered under this contract) that (1) occurs after Government acceptance of the supplies delivered under this
contract and (2) results from any defects or
deficiencies in the supplies.
(b) The limitation of liability under paragraph (a) above shall not apply when a defect
or deficiency in, or the Government’s acceptance of, the supplies results from willful misconduct or lack of good faith on the part of
any of the Contractor’s managerial personnel. The term Contractor’s managerial personnel, as used in this clause, means the Contractor’s directors, officers, and any of the
Contractor’s managers, superintendents, or
equivalent representatives who have supervision or direction of—
(1) All or substantially all of the Contractor’s business;
(2) All or substantially all of the Contractor’s operations at any one plant, laboratory, or separate location at which the contract is being performed; or
(3) A separate and complete major industrial operation connected with the performance of this contract.
(c) If the Contractor carries insurance, or
has established a reserve for self-insurance,
covering liability for loss or damage suffered
by the Government through purchase or use
of the supplies required to be delivered under
this contract, the Contractor shall be liable
to the Government, to the extent of such insurance or reserve, for loss of or damage to
property of the Government occurring after
Government acceptance of, and resulting
from any defects or deficiencies in, the supplies delivered under this contract.
(d)(1) This clause does not diminish the
Contractor’s obligations, to the extent that
they arise otherwise under this contract, relating to correction, repair, replacement, or
other relief for any defect or deficiency in
supplies delivered under this contract.

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52.246–25

48 CFR Ch. 1 (10–1–03 Edition)

(2) Unless this is a cost-reimbursement
contract, if loss or damage occurs and correction, repair, or replacement is not feasible or desired by the Government, the Contractor shall, as determined by the Contracting Officer—
(i) Pay the Government the amount it
would have cost the Contractor to make correction, repair, or replacement before the
loss or damage occurred; or
(ii) Provide other equitable relief.
(e) This clause shall not limit or otherwise
affect the Government’s rights under
clauses, if included in this contract, that
cover—
(1) Warranty of technical data;
(2) Ground and flight risks or aircraft
flight risks; or
(3) Government property.

(End of clause)
Alternate I (APR 1984). If the contract
is for both high-value items and other
end items, the contracting officer shall
identify the high-value items by line
item and insert the following preamble
before paragraph (a):
(This clause shall apply only to those items
identified in this contract as being subject to
this clause.)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34762, July 3, 1995; 61 FR 67426, Dec. 20,
1996]

52.246–25 Limitation
of
Liability—
Services.
As prescribed in 46.805, insert the following clause:
LIMITATION OF LIABILITY—SERVICES (FEB
1997)
(a) Except as provided in paragraphs (b)
and (c) below, and except to the extent that
the Contractor is expressly responsible under
this contract for deficiencies in the services
required to be performed under it (including
any materials furnished in conjunction with
those services), the Contractor shall not be
liable for loss of or damage to property of
the Government that (1) occurs after Government acceptance of services performed under
this contract and (2) results from any defects
or deficiencies in the services performed or
materials furnished.
(b) The limitation of liability under paragraph (a) above shall not apply when a defect
or deficiency in, or the Government’s acceptance of, services performed or materials furnished results from willful misconduct or
lack of good faith on the part of any of the
Contractor’s managerial personnel. The term
Contractor’s managerial personnel, as used in
this clause, means the Contractor’s direc-

tors, officers, and any of the Contractor’s
managers, superintendents, or equivalent
representatives who have supervision or direction of—
(1) All or substantially all of the Contractor’s business;
(2) All or substantially all of the Contractor’s operations at any one plant, laboratory, or separate location at which the contract is being performed; or
(3) A separate and complete major industrial operation connected with the performance of this contract.
(c) If the Contractor carries insurance, or
has established a reserve for self-insurance,
covering liability for loss or damage suffered
by the Government through the Contractor’s
performance of services or furnishing of materials under this contract, the Contractor
shall be liable to the Government, to the extent of such insurance or reserve, for loss of
or damage to property of the Government occurring after Government acceptance of, and
resulting from any defects and deficiencies
in, services performed or materials furnished
under this contract.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34762, July 3, 1995; 61 FR 67426, Dec. 20,
1997]

52.247–1 Commercial Bill of Lading
Notations.
As prescribed in 47.104–4, insert the
following clause:
COMMERCIAL BILL OF LADING NOTATIONS
(APR 1984)
If the Contracting Officer authorizes supplies to be shipped on a commercial bill of
lading and the Contractor will be reimbursed
these transportation costs as direct allowable costs, the Contractor shall ensure before
shipment is made that the commercial shipping documents are annotated with either of
the following notations, as appropriate:
(a) If the Government is shown as the consignor or the consignee, the annotation shall
be:
‘‘Transportation is for the lll [name the
specific agency] and the actual total transportation charges paid to the carrier(s) by the
consignor or consignee are assignable to, and
shall be reimbursed by, the Government.’’
(b) If the Government is not shown as the
consignor or the consignee, the annotation
shall be:
‘‘Transportation is for the lll [name the
specific agency] and the actual total transportation charges paid to the carrier(s) by the
consignor or consignee shall be reimbursed

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52.247–3

by the Government, pursuant to cost-reimbursement contract No ll This may be confirmed by contacting lll [name and address of the contract administration office listed
in the contract].’’

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 54
FR 48997, Nov. 28, 1989; 55 FR 38518, Sept. 18,
1990; 60 FR 34762, July 3, 1995]

52.247–2 Permits, Authorities, or Franchises.
As prescribed in 47.207–1(a), insert the
following clause:
PERMITS, AUTHORITIES, OR FRANCHISES (JAN
1997)
(a) The offeror does b, does not b, hold authorization from the Federal Highway Administration (FHWA) or other cognizant regulatory body. If authorization is held, it is as
follows:
llllllllllllllllllllllll
(Name of regulatory body)
llllllllllllllllllllllll
(Authorization No.)
(b) The offeror shall furnish to the Government, if requested, copies of the authorization before moving the material under any
contract awarded. In addition, the offeror
shall, at the offeror’s expense, obtain and
maintain any permits, franchises, licenses,
and other authorities issued by State and
local governments.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 62
FR 240, Jan. 2, 1997]

52.247–3 Capability to Perform a Contract for the Relocation of a Federal
Office.
As prescribed in 47.207–1(b), insert the
following clause in solicitations and
contracts for transportation or for
transportation-related services when a
Federal office is relocated, to ensure
that offerors are capable to perform
interstate or intrastate moving contracts involving the relocation of Federal offices:
CAPABILITY TO PERFORM A CONTRACT FOR THE
RELOCATION OF A FEDERAL OFFICE (APR 1984)
(a) If the move specified in this contract is
to be performed by the Contractor as a carrier within the borders of more than one
State, including the District of Columbia,

(i.e., an interstate move), the Contractor
shall have obtained and hold appropriate and
current operating authority from the Interstate Commerce Commission.
(b)(1) If the move specified in this contract
is to be performed by the Contractor as a
carrier wholly within the borders of one
State or the District of Columbia (i.e., an
intrastate move), the Contractor shall, when
required by the State, or the District of Columbia, in which the move is to take place,
have obtained and hold appropriate and current operating authority from that jurisdiction in the form of a certificate, permit, or
equivalent license to operate.
(2) If no authority to operate is required by
the State or the District of Columbia, the
Contractor as carrier shall maintain facilities, equipment, and a business address within the jurisdiction in which the move is to
take place. However, if the move is to originate and/or terminate within an area of one
State, or the District of Columbia, that comprises a part of a recognized Commercial
Zone (see 49 CFR 1048) the boundaries of
which encompass portions of more than one
State or the District of Columbia, it shall be
sufficient if the Contractor as carrier maintains facilities, equipment, and a business
address within the Commercial Zone and
holds appropriate operating authority, if required, from the jurisdiction within which
the Contractor maintains the facilities,
equipment, and business address.
(c) If the move specified in this contract
will not be performed by the Contractor as
carrier, it must be performed for the Contractor by a carrier operating under a subcontract with the Contractor. In this case,
the Contractor shall not be subject to the requirements of paragraphs (a) and (b) above,
but shall be responsible for requiring and ensuring that the subcontractor carrier complies with those requirements in every respect.
(d) The Contractor shall be in compliance
with the applicable requirements of this
clause at least 14 days before the date on
which performance of the contract shall
commence under the terms specified; except
that, if the period from the date of award of
the contract to the date that performance
shall commence is less than 28 days, the Contractor shall comply with the applicable requirements of this clause midway between
the time of award and the time of commencement of performance.

(End of clause)
Alternate I (APR 1984). If a Federal office move is intrastate and the contracting officer determines that it is in
the Government’s interest not to apply
the requirements for holding or obtaining State authority to operate within

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52.247–4

48 CFR Ch. 1 (10–1–03 Edition)

the State, and to maintain a facility
within the State or Commercial zone,
delete paragraph (b) of the basic clause
and redesignate the remaining paragraphs (b) and (c). In the 6th line of the
new paragraph (b), delete the words
paragraphs (a) and (b) above and replace
them with paragraph (a) above.
52.247–4 Inspection of Shipping and
Receiving Facilities.
As prescribed in 47.207–1(c), insert the
following provision in solicitations for
transportation or for transportationrelated services when it is desired for
offerors to inspect the shipping, receiving, or other sites to ensure realistic
bids:
INSPECTION OF SHIPPING AND RECEIVING
FACILITIES (APR 1984)
(a) Offerors are urged to inspect the shipping and receiving facilities where services
are to be performed and to satisfy themselves regarding all general and local conditions that may affect the cost of contract
performance.
(b) Site visits have been scheduled as follows:
llllllllllllllllllllllll
(locations) llllllllllllllllll
(dates) llllllllllllllllllll
(times) lllllllllllllllllll
(c) For further information offerors may
contact:
(name) llllllllllllllllllll
(telephone) lllllllllllllllll

(End of provision)
52.247–5 Familiarization With Conditions.
As prescribed in 47.207–1(d), insert the
following clause in solicitations and
contracts for transportation or for
transportation-related services to ensure that offerors become familiar with
conditions under which and where the
services will be performed:
FAMILIARIZATION WITH CONDITIONS (APR 1984)
The offeror shall become familiar with all
available information regarding difficulties
that may be encountered and the conditions,
including safety precautions, under which
the work must be accomplished under the
contract. The offeror shall not be relieved
from assuming all responsibility for properly
estimating the difficulties and the cost of
performing the services required in this contract because the offeror failed to investigate the conditions or to become ac-

quainted with all information concerning the
services to be performed.

(End of clause)
52.247–6

Financial Statement.

As prescribed in 47.207–1(e), insert the
following provision in solicitations for
transportation or for transportationrelated services to ensure that offerors
are prepared to furnish financial statements:
FINANCIAL STATEMENT (APR 1984)
The offeror shall, upon request, promptly
furnish the Government with a current certified statement of the offeror’s financial
condition and such data as the Government
may request with respect to the offeror’s operations. The Government will use this information to determine the offeror’s financial
responsibility and ability to perform under
the contract. Failure of an offeror to comply
with a request for information will subject
the offer to possible rejection on responsibility grounds.

(End of provision)
52.247–7

Freight Excluded.

As prescribed in 47.207–3(d)(2), insert
a clause substantially as follows in solicitations and contracts for transportation or for transportation-related
services when any commodities or
types of shipments have been identified
for exclusion:
FREIGHT EXCLUDED (APR 1984)
Excluded from the scope of this contract
are shipments that can be more advantageously or economically moved via parcel
post or small package carrier; shipments of
unusual value, explosives and other dangerous articles, household goods, commodities in bulk, commodities injurious or contaminating to other freight; and shipments
that the Government may elect to move in
Government vehicles.

(End of clause)
52.247–8 Estimated Weights or Quantities Not Guaranteed.
As prescribed in 47.207–3(e)(2), insert
the following clause in solicitations
and contracts for transportation or for
transportation-related services when
weights or quantities are estimates:

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52.247–12

ESTIMATED WEIGHTS OR QUANTITIES NOT
GUARANTEED (APR 1984)

(End of clause)

The estimated weights or quantities are
not a guarantee of actual weights or quantities, as the Government does not guarantee
any particular volume of traffic described in
this contract. However, to the extent services are required as described in this contract and in accordance with the terms of
this contract, orders for these services will
be placed with the Contractor.

52.247–11 Net
Weight—Household
Goods or Office Furniture.
As prescribed in 47.207–4(b), insert the
following clause in contracts for transportation or for transportation-related
services when movements of Government employees’ household goods or
relocations of Government offices are
involved:

(End of clause)
52.247–9 Agreed
Freight.

As prescribed in 47.207–4(a)(1), insert
the following clause in solicitations
and contracts for transportation or for
transportation-related services when
the shipping activity determines the
weight of shipments of freight other
than household goods or office furniture:
AGREED WEIGHT—GENERAL FREIGHT (APR
1984)
The shipping activity shall determine the
weight of each shipment. The weight shall be
shown on the covering shipping document
and shall be accepted by the Contractor as
the agreed weight.

(End of clause)
52.247–10 Net
Freight.

NET WEIGHT—HOUSEHOLD GOODS OR OFFICE
FURNITURE (APR 1984)

Weight—General

Weight—General

As prescribed in 47.207–4(a)(2), insert
the following clause in solicitations
and contracts for transportation or for
transportation-related services when
the weight of shipments of freight
other than household goods or office
furniture is not known at the time of
shipment and the contractor is responsible for determining the net weight of
the shipments:
NET WEIGHT—GENERAL FREIGHT (APR 1984)
(a) The net weight of the shipment shall be
determined by deducting the tare weight of
the vehicle (determined by having the empty
vehicle with a full tank of fuel weighed by a
certified weighmaster on a certified scale)
from the gross weight of the vehicle (determined by having the loaded vehicle with a
full tank of fuel weighed by a certified
weighmaster on a certified scale).
(b) The Contractor shall attach the original copies of the empty and loaded weight
certificates to the invoice for services.

(a) Net weight—full loads. The net weight of
the shipment shall be determined by deducting the tare weight of the vehicle (determined by having a certified weighmaster
weigh on a certified scale the empty vehicle
with all blankets, pads, chains, dollies, hand
trucks, and all other necessary equipment
inside the vehicle) from the gross weight of
the vehicle (determined by having a certified
weighmaster weigh on a certified scale the
fully loaded vehicle before arrival at destination).
(b) Net weight—part loads. The net weight of
the first part load shall be determined in the
same manner as specified for a full load. The
net weight of the second part load shall be
determined by using as the tare weight of
the vehicle the gross weight of the vehicle
containing the first part load and deducting
this weight from the new gross weight (determined by having the loaded vehicle
weighed again, in the same manner as specified for the full load). The same procedure
shall apply for each succeeding part load.
(c) Weight certificates. The contractor shall
attach the original copy of each weight certificate to the invoice for services.

(End of clause)
52.247–12
rials.

Supervision, Labor, or Mate-

As prescribed in 47.207–5(b), insert a
clause substantially as follows in solicitations and contracts for transportation or for transportation-related
services when the contractor is required to furnish supervision, labor, or
materials:
SUPERVISION, LABOR, OR MATERIALS (APR
1984)
The Contractor shall furnish adequate supervision, labor, materials, supplies, and
equipment necessary to perform all the services contemplated under this contract in an
orderly, timely, and efficient manner.

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52.247–13

48 CFR Ch. 1 (10–1–03 Edition)
ten exception for any goods not in apparent
good order.

(End of clause)
52.247–13 Accessorial
ing Contracts.

Services—Mov-

As prescribed in 47.207–5(c), insert a
clause substantially as follows in solicitations and contracts for the transportation of household goods or office
furniture:
ACCESSORIAL SERVICES—MOVING CONTRACTS
(APR 1984)
(a) Packing and/or crating and padding. The
Contractor shall—
(1) Perform all of the packing and/or crating and padding necessary for the protection
of the goods to be transported;
(2) Furnish packing containers, including,
but not limited to, barrels, boxes, wardrobes,
and cartons; all crating materials; and all
padding materials and equipment;
(3) Furnish or cause to be furnished, when
necessary, padding or other protective material for the interior of the buildings, including elevators, from and to which the property will be moved under this contract; and
(4) Ensure that all containers and materials are clean and of quality sufficient for
protection of the goods.
(b) Disassembling and reassembling of property and servicing appliances. The disassembling of property; e.g., beds and sectional
bookcases, and the preparing of appliances;
e.g., washers, driers, and record players, for
shipment shall be performed by the Contractor. The Contractor shall reassemble the
property and service the appliances upon delivery at the new location.
(c) Unpacking and/or uncrating and placement of property. The Contractor shall unpack and/or uncrate all property that was
packed and/or crated for movement under
this contract. The Contractor shall also
place the property in the new location as instructed by the owner of the property or authorized representative, and shall remove all
packing and similar or related material from
the premises as requested by the owner.

(End of clause)
52.247–14 Contractor
Responsibility
for Receipt of Shipment.
As prescribed in 47.207–5(d), insert the
following clause in solicitations and
contracts for transportation or for
transportation-related services:
CONTRACTOR RESPONSIBILITY FOR RECEIPT OF
SHIPMENT (APR 1984)
The Contractor shall diligently count and
examine all goods tendered for shipment, receipt for them, and make appropriate writ-

(End of clause)
52.247–15 Contractor
Responsibility
for Loading and Unloading.
As prescribed in 47.207–5(e), insert the
following clause in solicitations and
contracts for transportation or for
transportation-related services when
the contractor is responsible for loading and unloading shipments:
CONTRACTOR RESPONSIBILITY FOR LOADING
AND UNLOADING (APR 1984)
(a)(1) Unless otherwise specified in this
contract to cover store-door or inside delivery, the Contractor shall load and unload
shipments at no additional expense to the
Government.
(2) The Government or its agent will place
or receive freight at the tailgate of the Contractor’s vehicle. Tailgate delivery, for purposes of this contract, is defined as that
which enables a forklift truck or similar
equipment, with operator only, to place or
remove cargo from the tailgate of the Contractor’s vehicle.
(b) If loading is the responsibility of the
Contractor, the Contractor shall perform all
shoring, blocking, and bracing. The Contractor shall provide dunnage at the Contractor’s expense.

(End of clause)
52.247–16 Contractor
Responsibility
for Returning Undelivered Freight.
As prescribed in 47.207–5(f), insert the
following clause in solicitations and
contracts for transportation or for
transportation-related services when
the contractor is responsible for returning undelivered freight:
CONTRACTOR RESPONSIBILITY FOR RETURNING
UNDELIVERED FREIGHT (APR 1984)
(a) When, through no fault of the Contractor, a shipment cannot be delivered, the
Contractor shall contact the shipper for disposition instructions. If the shipment is ordered returned to the origin point, the
charges assessed for the return trip shall be
the same as the charges assessed for the outbound trip. The shipper shall maintain a
record of the goods that, through no fault of
the Contractor, could not be delivered and
are returned to the shipper. If, at a future
date, the returned goods are determined to
be related to a claim against the Contractor,
the claim will be adjusted accordingly.
(b) When, through the fault of the Contractor, a shipment cannot be delivered, the

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52.247–21

Contractor shall return the shipment to the
origin point at no charge to the Government.
Any charges incurred for redelivery, which
are in excess of the charges that would have
been incurred under this contract, shall be
for the Contractor’s account in accordance
with the Default clause of the contract.

(End of clause)
52.247–17

Charges.

As prescribed in 47.207–6(a)(2), insert
the following clause in solicitations
and contracts for transportation or for
transportation-related services:
CHARGES (APR 1984)
In no event shall charges under this contract be in excess of charges based on the
Contractor’s lowest rate available to the
general public, or be in excess of charges
based on rates otherwise tendered to the
Government by the Contractor for the same
type of service.

STOPPING IN TRANSIT FOR PARTIAL UNLOADING
(APR 1984)
When multiple shipments are tendered at
one time to the Contractor for movement
from one origin to two or more consignees
along the route between the origin and the
last destination, the rate charged shall be
the rate applicable to the aggregate weight,
plus a charge of $ll for each shipment unloaded at an intermediate point en route to
the last destination.

(End of clause)
52.247–20 Estimated
Quantities
or
Weights for Evaluation of Offers.
As prescribed in 47.207–6(c)(6), insert
the following provision in solicitations
for transportation or for transportation-related services when quantities
or weights of shipments between each
origin and destination are not known,
stating estimated quantity or weight
for each origin/destination pair:
ESTIMATED QUANTITIES OR WEIGHTS FOR
EVALUATION OF OFFERS (APR 1984)

(End of clause)
52.247–18

Multiple Shipments.

As prescribed in 47.207–6(c)(5)(i), insert the following clause in solicitations and contracts for transportation
or for transportation-related services
when multiple shipments are tendered
at one time to the contractor for transportation from one origin to two or
more consignees at the same destination:

For the purpose of evaluating offers, and
for no other purpose, the following estimated
quantities or weights will be considered as
the quantities or weights to be shipped between each origin and destination listed:
Origin

MULTIPLE SHIPMENTS (APR 1984)

Destination

Estimated quantity or
weight

(End of provision)

When multiple shipments are tendered at
one time to the Contractor for movement
from one origin to multiple consignees at the
same destination, the rate charged for each
shipment shall be the rate applicable to the
aggregate weight.

(End of clause)

52.247–21 Contractor Liability for Personal Injury and/or Property Damage.
As prescribed in 47.207–7(c), insert the
following clause in solicitations and
contracts for transportation or for
transportation-related services:

52.247–19 Stopping in Transit for Partial Unloading.

CONTRACTOR LIABILITY FOR PERSONAL INJURY
AND/OR PROPERTY DAMAGE (APR 1984)

As prescribed in 47.207–6(c)(5)(ii), insert the following clause in solicitations and contracts for transportation
or for transportation-related services
when multiple shipments are tendered
at one time to the contractor for transportation from one origin to two or
more consignees along the route between origin and last destination:

(a) The Contractor assumes responsibility
for all damage or injury to persons or property occasioned through the use, maintenance, and operation of the Contractor’s vehicles or other equipment by, or the action
of, the Contractor or the Contractor’s employees and agents.
(b) The Contractor, at the Contractor’s expense, shall maintain adequate public liability and property damage insurance during

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48 CFR Ch. 1 (10–1–03 Edition)

the continuance of this contract, insuring
the Contractor against all claims for injury
or damage.
(c) The Contractor shall maintain Workers’
Compensation and other legally required insurance with respect to the Contractor’s own
employees and agents.
(d) The Government shall in no event be
liable or responsible for damage or injury to
any person or property occasioned through
the use, maintenance, or operation of any vehicle or other equipment by, or the action of,
the Contractor or the Contractor’s employees and agents in performing under this contract, and the Government shall be indemnified and saved harmless against claims for
damage or injury in such cases.

(End of clause)
52.247–22 Contractor Liability for Loss
of and/or Damage to Freight Other
Than Household Goods.
As prescribed in 47.207–7(d), insert the
following clause in solicitations and
contracts for the transportation of
freight other than household goods:
CONTRACTOR LIABILITY FOR LOSS OF AND/OR
DAMAGE TO FREIGHT OTHER THAN HOUSEHOLD GOODS (APR 1984)
Except when loss and/or damage arises out
of causes beyond the control and without the
fault or negligence of the Contractor, the
Contractor shall assume full liability for any
and all goods lost and/or damaged in the
movement covered by this contract.

(End of clause)

(c) The Contractor shall indemnify the
owner of the goods at a rate of l cents per
pound per article.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 55
FR 52800, Dec. 21, 1990]

52.247–24 Advance Notification by the
Government.
As prescribed in 47.207–8(a)(1), insert
the following clause in solicitations
and contracts for transportation or for
transportation-related services when
the Government is responsible for notifying the contractor of specific service
times or unusual shipments:
ADVANCE NOTIFICATION BY THE GOVERNMENT
(APR 1984)
The Government will notify the Contractor
l hours in advance of the number of pieces
and weight of all normal shipments and the
time the shipment will be available for pickup. On other-than-normal shipments, the
Government will furnish additional information; e.g., dimension of oversized pieces, as
necessary to determine the amount of equipment and/or manpower needed to perform
the required services.

(End of clause)
52.247–25 Government-Furnished
Equipment With or Without Operators.

52.247–23 Contractor Liability for Loss
of and/or Damage to Household
Goods.
As prescribed in 47.207–7(e), insert the
following clause:

As prescribed in 47.207–8(a)(2)(i), insert the following clause in solicitations and contracts for transportation
or for transportation-related services
when the Government furnishes equipment with or without operators:

CONTRACTOR LIABILITY FOR LOSS OF AND/OR
DAMAGE TO HOUSEHOLD GOODS (JAN 1991)

GOVERNMENT-FURNISHED EQUIPMENT WITH OR
WITHOUT OPERATORS (APR 1984)

(a) Except when loss and/or damage arise
out of causes beyond the control and without
the fault or negligence of the Contractor, the
Contractor shall be liable to the owner for
the loss of and/or damage to any article
while being—
(1) Packed, picked up, loaded, transported,
delivered, unloaded, or unpacked;
(2) Stored in transit; or
(3) Serviced (appliances, etc.) by a third
person hired by the Contractor to perform
the servicing.
(b) The Contractor shall be liable for loss
and/or damage discovered by the owner if
written notice of such loss and/or damage is
dispatched to the Contractor not later than
75 days following the date of delivery.

The Government will provide lll [insert
equipment; e.g., forklifts] with or without operators at l [strike out with or without, as applicable, and insert origin, destination, or
both] to assist in ll [insert loading, unloading, or both], when required.

(End of clause)
52.247–26 Government Direction and
Marking.
As prescribed in 47.207–8(a)(3), insert
the following clause in solicitations
and contracts for transportation or for
transportation-related services when
office relocations are involved:

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GOVERNMENT DIRECTION AND MARKING (APR
1984)
The agency being relocated shall tag or
mark property, showing floor, room number,
and location where property is to be placed
in the new building. The agency shall provide sufficient personnel to direct the Contractor’s personnel in the placement of the
property at destination.

(End of clause)
52.247–27 Contract Not Affected by
Oral Agreement.
As prescribed in 47.207–8(b), insert the
following clause in solicitations and
contracts for transportation or for
transportation-related services:
CONTRACT NOT AFFECTED BY ORAL
AGREEMENT (APR 1984)
No oral statement of any person shall modify or otherwise affect the terms, conditions,
or specifications stated in this contract. All
modifications to the contract must be made
in writing by the Contracting Officer or an
authorized representative.

(End of clause)
52.247–28 Contractor’s Invoices.
As prescribed in 47.207–9(c), insert the
following clause in solicitations and
contracts for drayage or other term
contracts for transportation or for
transportation-related services:
CONTRACTOR’S INVOICES (APR 1984)
The Contractor shall submit itemized invoices as instructed by the agency ordering
services under this contract. The Contractor
shall annotate each invoice with the contract number and other ordering office document identification.

(End of clause)
52.247–29 F.o.b. Origin.
As prescribed in 47.303–1(c), insert the
following clause:
F.O.B. ORIGIN (JUN 1988)
(a) The term f.o.b. origin, as used in this
clause, means free of expense to the Government delivered—
(1) On board the indicated type of conveyance of the carrier (or of the Government, if
specified) at a designated point in the city,
county, and State from which the shipment
will be made and from which line-haul transportation service (as distinguished from
switching, local drayage, or other terminal
service) will begin;

(2) To, and placed on, the carrier’s wharf
(at shipside, within reach of the ship’s loading tackle, when the shipping point is within
a port area having water transportation
service) or the carrier’s freight station;
(3) To a U.S. Postal Service facility; or
(4) If stated in the solicitation, to any Government–designated point located within the
same city or commercial zone as the f.o.b.
origin point specified in the contract (commercial zones are prescribed by the Interstate Commerce Commission at 49 CFR 1048).
(b) The Contractor shall—
(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment in conformance with carrier requirements to protect the goods and to
ensure assessment of the lowest applicable
transportation charge;
(2)(i) Order specified carrier equipment
when requested by the Government; or
(ii) If not specified, order appropriate carrier equipment not in excess of capacity to
accommodate shipment;
(3) Deliver the shipment in good order and
condition to the carrier, and load, stow,
trim, block, and/or brace carload or truckload shipment (when loaded by the Contractor) on or in the carrier’s conveyance as
required by carrier rules and regulations;
(4) Be responsible for any loss of and/or
damage to the goods—
(i) Occurring before delivery to the carrier;
(ii) Resulting from improper packing and
marking; or
(iii) Resulting from improper loading,
stowing, trimming, blocking, and/or bracing
of the shipment, if loaded by the Contractor
on or in the carrier’s conveyance;
(5) Complete the Government bill of lading
supplied by the ordering agency or, when a
Government bill of lading is not supplied,
prepare a commercial bill of lading or other
transportation receipt. The bill of lading
shall show—
(i) A description of the shipment in terms
of the governing freight classification or tariff (or Government rate tender) under which
lowest freight rates are applicable;
(ii) The seals affixed to the conveyance
with their serial numbers or other identification;
(iii) Lengths and capacities of cars or
trucks ordered and furnished;
(iv) Other pertinent information required
to effect prompt delivery to the consignee,
including name, delivery address, postal address and ZIP code of consignee, routing,
etc.;
(v) Special instructions or annotations requested by the ordering agency for commercial bills of lading; e.g., (A) to be converted to
a Government bill of lading, or (B) this shipment is the property of, and the freight charges
paid to the carrier(s) will be reimbursed by, the
Government; and

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48 CFR Ch. 1 (10–1–03 Edition)

(vi) The signature of the carrier’s agent
and the date the shipment is received by the
carrier; and
(6) Distribute the copies of the bill of lading, or other transportation receipts, as directed by the ordering agency.
(c) These Contractor responsibilities are
specified for performance at the plant or
plants at which the supplies are to be finally
inspected and accepted, unless the facilities
for shipment by carrier’s equipment are not
available at the Contractor’s plant, in which
case the responsibilities shall be performed
f.o.b. the point or points in the same or nearest city where the specified carrier’s facilities are available; subject, however, to the
following qualifications:
(1) If the Contractor’s shipping plant is located in the State of Alaska or Hawaii, the
Contractor shall deliver the supplies listed
for shipment outside Alaska or Hawaii to the
port of loading in Alaska or Hawaii, respectively, as specified in the contract, at Contractor’s expense, and to that extent the
contract shall be f.o.b. destination.
(2) Notwithstanding subparagraph (c)(1) of
this clause, if the Contractor’s shipping
plant is located in the State of Hawaii, and
the contract requires delivery to be made by
container service, the Contractor shall deliver the supplies, at the Contractor’s expense, to the container yard in the same or
nearest city where seavan container service
is available.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 53
FR 17860, May 18, 1988]

52.247–30 F.o.b. Origin, Contractor’s
Facility.
As prescribed in 47.303–2(c), insert the
following clause in solicitations and
contracts when the delivery term is
f.o.b. origin, contractor’s facility:
F.O.B. ORIGIN, CONTRACTOR’S FACILITY (APR
1984)
(a) The term f.o.b. origin, contractor’s facility, as used in this clause, means free of expense to the Government delivered on board
the indicated type of conveyance of the carrier (or of the Government, if specified) at
the designated facility, on the named street
or highway, in the city, county, and State
from which the shipment will be made.
(b) The Contractor shall—
(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment in conformance with carrier requirements to protect the goods and to
ensure assessment of the lowest applicable
transportation charge;

(2)(i) Order specified carrier equipment
when requested by the Government; or
(ii) If not specified, order appropriate carrier equipment not in excess of capacity to
accommodate shipment;
(3) Deliver the shipment in good order and
condition to the carrier, and load, stow,
trim, block, and/or brace carload or truckload shipment (when loaded by the Contractor) on or in the carrier’s conveyance as
required by carrier rules and regulations;
(4) Be responsible for any loss of and/or
damage to the goods—
(i) Occurring before delivery to the carrier;
(ii) Resulting from improper packing and
marking; or
(iii) Resulting from improper loading,
stowing, trimming, blocking, and/or bracing
of the shipment, if loaded by the Contractor
on or in the carrier’s conveyance;
(5) Complete the Government bill of lading
supplied by the ordering agency or, when a
Government bill of lading is not supplied,
prepare a commercial bill of lading or other
transportation receipt. The bill of lading
shall show—
(i) A description of the shipment in terms
of the governing freight classification or tariff (or Government rate tender) under which
lowest freight rates are applicable;
(ii) The seals affixed to the conveyance
with their serial numbers or other identification;
(iii) Lengths and capacities of cars or
trucks ordered and furnished;
(iv) Other pertinent information required
to effect prompt delivery to the consignee,
including name, delivery address, postal address and ZIP code of consignee, routing,
etc.;
(v) Special instructions or annotations requested by the ordering agency for commercial bills of lading; e.g., (A) to be converted to
a Government bill of lading, or (B) this shipment is the property of, and the freight charges
paid to the carrier(s) will be reimbursed by, the
Government; and
(vi) The signature of the carrier’s agent
and the date the shipment is received by the
carrier; and
(6) Distribute the copies of the bill of lading, or other transportation receipts, as directed by the ordering agency.

(End of clause)
52.247–31 F.o.b. Origin, Freight Allowed.
As prescribed in 47.303–3(c), insert the
following clause:
F.O.B. ORIGIN, FREIGHT ALLOWED (JUN 1988)
(a) The term f.o.b. origin, freight allowed, as
used in this clause, means—
(1) Free of expense to the Government delivered—

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(i) On board the indicated type of conveyance of the carrier (or of the Government, if
specified) at a designated point in the city,
county, and State from which the shipments
will be made and from which line-haul transportation service (as distinguished from
switching, local drayage, or other terminal
service) will begin;
(ii) To, and placed on, the carrier’s wharf
(at shipside within reach of the ship’s loading tackle when the shipping point is within
a port area having water transportation
service) or the carrier’s freight station;
(iii) To a U.S. Postal Service facility; or
(iv) If stated in the solicitation, to any
Government–designated point located within
the same city or commercial zone as the
f.o.b. origin point specified in the contract
(commercial zones are prescribed by the
Interstate Commerce Commission at 49 CFR
1048); and
(2) An allowance for freight, based on applicable published tariff rates (or Government rate tenders) between the points specified in the contract, is deducted from the
contract price.
(b) The Contractor shall—
(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment in conformance with carrier requirements to protect the goods and to
ensure assessment of the lowest applicable
transportation charge;
(2)(i) Order specified carrier equipment
when requested by the Government; or
(ii) If not specified, order appropriate carrier equipment not in excess of capacity to
accommodate shipment;
(3) Deliver the shipment in good order and
condition to the carrier, and load, stow,
trim, block, and/or brace carload or truckload shipment (when loaded by the Contractor) on or in the carrier’s conveyance as
required by carrier rules and regulations;
(4) Be responsible for any loss of and/or
damage to the goods—
(i) Occurring before delivery to the carrier;
(ii) Resulting from improper packing and
marking; or
(iii) Resulting from improper loading,
stowing, trimming, blocking, and/or bracing
of the shipment, if loaded by the Contractor
on or in the carrier’s conveyance;
(5) Complete the Government bill of lading
supplied by the ordering agency, or when a
Government bill of lading is not supplied,
prepare a commercial bill of lading or other
transportation receipt. The bill of lading
shall show—
(i) A description of the shipment in terms
of the governing freight classification or tariff (or Government rate tender) under which
lowest freight rates are applicable;
(ii) The seals affixed to the conveyance
with their serial numbers or other identification;

(iii) Lengths and capacities of cars or
trucks ordered and furnished;
(iv) Other pertinent information required
to effect prompt delivery to the consignee,
including name, delivery address, postal address and ZIP code of consignee, routing,
etc.;
(v) Special instructions or annotations requested by the ordering agency for commercial bills of lading; e.g., (A) to be converted to
a Government bill of lading, or (B) this shipment is the property of, and the freight charges
paid to the carrier(s) will be reimbursed by, the
Government; and
(vi) The signature of the carrier’s agent
and the date the shipment is received by the
carrier; and
(6) Distribute the copies of the bill of lading, or other transportation receipts, as directed by the ordering agency.
(c) These Contractor responsibilities are
specified for performance at the plant or
plants at which the supplies are to be finally
inspected and accepted, unless the facilities
for shipment by carrier’s equipment are not
available at the Contractor’s plant, in which
case the responsibilities shall be performed
f.o.b. the point or points in the same or nearest city where the specified carrier’s facilities are available; subject, however, to the
following qualifications:
(1) If the Contractor’s shipping plant is located in the State of Alaska or Hawaii, the
Contractor shall deliver the supplies listed
for shipment outside Alaska or Hawaii to the
port of loading in Alaska or Hawaii, respectively, as specified in the contract, at Contractor’s expense, and to that extent the
contract shall be f.o.b. destination.
(2) Notwithstanding subparagraph (c)(1) of
this clause, if the Contractor’s shipping
plant is located in the State of Hawaii, and
the contract requires delivery to be made by
container service, the Contractor shall deliver the supplies, at Contractor’s expense,
to the container yard in the same or nearest
city where seavan container service is available.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 53
FR 17860, May 18, 1988]

52.247–32 F.o.b. Origin, Freight Prepaid.
As prescribed in 47.303–4(c), insert the
following clause:
F.O.B. ORIGIN, FREIGHT PREPAID (JUN 1988)
(a) The term f.o.b. origin, freight prepaid, as
used in this clause, means—
(1) Free of expense to the Government delivered—
(i) On board the indicated type of conveyance of the carrier (or of the Government if

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48 CFR Ch. 1 (10–1–03 Edition)

specified) at a designated point in the city,
county, and State from which the shipments
will be made and from which line-haul transportation service (as distinguished from
switching, local drayage, or other terminal
service) will begin;
(ii) To, and placed on, the carrier’s wharf
(at shipside, within reach of the ship’s loading tackle, when the shipping point is within
a port area having water transportation
service) or the carrier’s freight station;
(iii) To a U.S. Postal Service facility; or
(iv) If stated in the solicitation, to any
Government–designated point located within
the same city or commercial zone as the
f.o.b. origin point specified in the contract
(commercial zones are prescribed by the
Interstate Commerce Commission at 49 CFR
1048); and
(2) The cost of transportation, ultimately
the Government’s obligation, is prepaid by
the contractor to the point specified in the
contract.
(b) The Contractor shall—
(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment in conformance with carrier requirements to protect the goods and to
ensure assessment of the lowest applicable
transportation charge;
(2)(i) Order specified carrier equipment
when requested by the Government; or
(ii) If not specified, order appropriate carrier equipment not in excess of capacity to
accommodate shipment;
(3) Deliver the shipment in good order and
condition to the carrier, and load, stow,
trim, block, and/or brace carload or truckload shipment (when loaded by the Contractor) on or in the carrier’s conveyance as
required by carrier rules and regulations;
(4) Be responsible for any loss of and/or
damage to the goods—
(i) Occurring before delivery to the carrier;
(ii) Resulting from improper packing or
marking; or
(iii) Resulting from improper loading,
stowing, trimming, blocking, and/or bracing
of the shipment, if loaded by the Contractor
on or in the carrier’s conveyance;
(5) Prepare a commercial bill of lading or
other transportation receipt. The bill of lading shall show—
(i) A description of the shipment in terms
of the governing freight classification or tariff (or Government rate tender) under which
lowest freight rates are applicable;
(ii) The seals affixed to the conveyance
with their serial numbers or other identification;
(iii) Lengths and capacities of cars or
trucks ordered and furnished;
(iv) Other pertinent information required
to effect prompt delivery to the consignee,
including name, delivery address, postal ad-

dress and ZIP code of consignee, routing,
etc.;
(v) Special instructions or annotations requested by the ordering agency for commercial bills of lading; e.g., (A) to be converted to
a Government bill of lading, or (B) this shipment is the property of, and the freight charges
paid to the carrier(s) will be reimbursed by, the
Government; and
(vi) The signature of the carrier’s agent
and the date the shipment is received by the
carrier;
(6) Distribute the copies of the bill of lading, or other transportation receipts, as directed by the ordering agency; and
(7) Prepay all freight charges to the extent
specified in the contract.
(c) These Contractor responsibilities are
specified for performance at the plant or
plants at which these supplies are to be finally inspected and accepted, unless the facilities for shipment by carrier’s equipment
are not available at the Contractor’s plant,
in which case the responsibilities shall be
performed f.o.b. the point or points in the
same or nearest city where the specified carrier’s facilities are available; subject, however, to the following qualifications:
(1) If the Contractor’s shipping plant is located in the State of Alaska or Hawaii, the
Contractor shall deliver the supplies listed
for shipment outside Alaska or Hawaii to the
port of loading in Alaska or Hawaii, respectively, as specified in the contract, at Contractor’s expense, and to that extent the
contract shall be f.o.b. destination.
(2) Notwithstanding subparagraph (c)(1) of
this clause, if the Contractor’s shipping
plant is located in the State of Hawaii, and
the contract requires delivery to be made by
container service, the Contractor shall deliver the supplies, at the Contractor’s expense to the container yard in the same or
nearest city where seavan container service
is available.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 53
FR 17860, May 18, 1988]

52.247–33 F.o.b. Origin, With Differentials.
As prescribed in 47.303–5(c), insert the
following clause:
F.O.B. ORIGIN, WITH DIFFERENTIALS (JUN
1988)
(a) The term f.o.b. origin, with differentials,
as used in this clause, means—
(1) Free of expense to the Government delivered—
(i) On board the indicated type of conveyance of the carrier (or of the Government, if
specified) at a designated point in the city,
county, and State from which the shipments

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52.247–33

will be made and from which line-haul transportation service (as distinguished from
switching, local drayage, or other terminal
service) will begin;
(ii) To, and placed on, the carrier’s wharf
(at shipside, within reach of the ship’s loading tackle, when the shipping point is within
a port area having water transportation
service) or the carrier’s freight station;
(iii) To a U.S. Postal Service facility; or
(iv) If stated in the solicitation, to any
Government-designated point located within
the same city or commercial zone as the
f.o.b. origin point specified in the contract
(commercial zones are prescribed by the
Interstate Commerce Commission at 49 CFR
1048); and
(2) Differentials for mode of transportation, type of vehicle, or place of delivery
as indicated in Contractor’s offer may be
added to the contract price.
(b) The Contractor shall—
(1)(i) Pack and mark the shipment to comply with contract specification; or
(ii) In the absence of specifications, prepare the shipment in conformance with carrier requirements to protect the goods and to
ensure assessment of the lowest applicable
transportation charge;
(2)(i) Order specified carrier equipment
when requested by the Government; or
(ii) If not specified, order appropriate carrier equipment not in excess of capacity to
accommodate shipment;
(3) Deliver the shipment in good order and
condition to the carrier, and load, stow,
trim, block, and/or brace carload or truckload shipment (when loaded by the Contractor) on or in the carrier’s conveyance as
required by carrier rules and regulations;
(4) Be responsible for any loss of and/or
damage to the goods—
(i) Occurring before delivery to the carrier;
(ii) Resulting from improper packing and
marking; or
(iii) Resulting from improper loading,
stowing, trimming, blocking, and/or bracing
of the shipment, if loaded by the Contractor
on or in the carrier’s conveyance;
(5) Complete the Government bill of lading
supplied by the ordering agency or, when a
Government bill of lading is not supplied,
prepare a commercial bill of lading or other
transportation receipt. The bill of lading
shall show—
(i) A description of the shipment in terms
of the governing freight classification or tariff (or Government rate tender) under which
lowest freight rates are applicable;
(ii) The seals affixed to the conveyance
with their serial numbers or other identification;
(iii) Lengths and capacities of cars or
trucks ordered and furnished;
(iv) Other pertinent information required
to effect prompt delivery to the consignee,
including name, delivery address, postal ad-

dress and ZIP code of consignee, routing,
etc.;
(v) Special instructions or annotations requested by the ordering agency for commercial bills of lading; e.g., (A) to be converted to
a Government bill of lading, or (B) this shipment is the property of, and the freight charges
paid to the carrier(s) will be reimbursed by, the
Government; and
(vi) The signature of the carrier’s agent
and the date the shipment is received by carrier; and
(6) Distribute the copies of the bill of lading, or other transportation receipts, as directed by the ordering agency.
(c)(1) It may be advantageous to the offeror
to submit f.o.b. origin prices that include
only the lowest cost to the Contractor for
loading of shipment at the Contractor’s
plant or most favorable shipping point. The
cost beyond that plant or point of bringing
the supplies to the place of delivery and the
cost of loading, blocking, and bracing on the
type vehicle specified by the Government at
the time of shipment may exceed the
offeror’s lowest cost when the offeror ships
for the offeror’s account. Accordingly, the
offeror may indicate differentials that may
be added to the offered price. These differentials shall be expressed as a rate in cents for
each 100 pounds (CWT) of the supplies for one
or more of the options under this clause that
the Government may specify at the time of
shipment.
(2) These differential(s) will be considered
in the evaluation of offers to determine the
lowest overall cost to the Government. If, at
the time of shipment, the Government specifies (normally on a Government bill of lading) a mode of transportation, type of vehicle, or place of delivery for which the offeror
has set forth a differential, the Contractor
shall include the total of such differential
costs (the applicable differential multiplied
by the actual weight on the Government bill
of lading) as a separate reimbursable item on
the Contractor’s invoice for the supplies.
(3) The Government shall have the option
of performing or arranging at its own expense any transportation from Contractor’s
shipping plant or point to carrier’s facility
at the time of shipment and, whenever this
option is exercised, the Government shall
make no reimbursement based on a quoted
differential.
(4) Offeror’s differentials in cents for each
100 pounds for optional mode of transportation, types of vehicle, transportation within a mode, or place of delivery, specified by
the Government at the time of shipment and
not included in the f.o.b. origin price indicated in the Schedule by the offeror, are as
follows:
lll (carload, truckload, less-load,
ll wharf, flatcar, driveaway, etc.)

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48 CFR Ch. 1 (10–1–03 Edition)
(End of clause)

[48 FR 42478, Sept. 19, 1983, as amended at 53
FR 17861, May 18, 1988]

52.247–34 F.o.b. Destination.
As prescribed in 47.303–6(c), insert the
following clause:
F.O.B. DESTINATION (JAN 1991)
(a) The term f.o.b. destination, as used in
this clause, means—
(1) Free of expense to the Government, on
board the carrier’s conveyance, at a specified
delivery point where the consignee’s facility
(plant, warehouse, store, lot, or other location to which shipment can be made) is located; and
(2) Supplies shall be delivered to the destination consignee’s wharf (if destination is
a port city and supplies are for export), warehouse unloading platform, or receiving dock,
at the expense of the Contractor. The Government shall not be liable for any delivery,
storage, demurrage, accessorial, or other
charges involved before the actual delivery
(or ‘‘constructive placement’’ as defined in
carrier tariffs) or the supplies to the destination, unless such charges are caused by an
act or order of the Government acting in its
contractual capacity. If rail carrier is used,
supplies shall be delivered to the specified
unloading platform of the consignee. If
motor carrier (including ‘‘piggyback’’) is
used, supplies shall be delivered to truck
tailgate at the unloading platform of the
consignee, except when the supplies delivered meet the requirements of Item 568 of
the National Motor Freight Classification
for ‘‘heavy or bulky freight.’’ When supplies
meeting the requirements of the referenced
Item 568 are delivered, unloading (including
movement to the tailgate) shall be performed by the consignee, with assistance
from the truck driver, if requested. If the
contractor uses rail carrier or freight forwarder for less than carload shipments, the
contractor shall ensure that the carrier will
furnish tailgate delivery, when required, if
transfer to truck is required to complete delivery to consignee.
(b) The Contractor shall—
(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment in conformance with carrier requirements;
(2) Prepare and distribute commercial bills
of lading;
(3) Deliver the shipment in good order and
condition to the point of delivery specified in
the contract;
(4) Be responsible for any loss of and/or
damage to the goods occurring before receipt
of the shipment by the consignee at the delivery point specified in the contract;

(5) Furnish a delivery schedule and designate the mode of delivering carrier; and
(6) Pay and bear all charges to the specified point of delivery.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 55
FR 52800, Dec. 21, 1990]

52.247–35 F.o.b. Destination,
Consignee’s Premises.

As prescribed in 47.303–7(c), insert the
following clause in solicitations and
contracts when the delivery term is
f.o.b. destination, within consignee’s
premises:
F.O.B. DESTINATION, WITHIN CONSIGNEE’S
PREMISES (APR 1984)
(a) The term f.o.b. destination, within consignee’s premises, as used in this clause,
means free of expense to the Government delivered and laid down within the doors of the
consignee’s premises, including delivery to
specific rooms within a building if so specified.
(b) The Contractor shall—
(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment in conformance with carrier requirements;
(2) Prepare and distribute commercial bills
of lading;
(3) Deliver the shipment in good order and
condition to the point of delivery specified in
the contract;
(4) Be responsible for any loss of and/or
damage to the goods occurring before receipt
of the shipment by the consignee at the delivery point specified in the contract;
(5) Furnish a delivery schedule and designate the mode of delivering carrier; and
(6) Pay and bear all charges to the specified point of delivery.

(End of clause)
52.247–36 F.a.s. Vessel, Port of Shipment.
As prescribed in 47.303–8(c), insert the
following clause in solicitations and
contracts when the delivery term is
f.a.s. vessel, port of shipment:
F.A.S. VESSEL, PORT OF SHIPMENT (APR 1984)
(a) The term f.a.s. vessel, port of shipment,
as used in this clause, means free of expense
to the Government delivered alongside the
ocean vessel and within reach of its loading
tackle at the specified port of shipment.
(b) The Contractor shall—

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(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment for ocean transportation
in conformance with carrier requirements to
protect the goods and to ensure assessment
of the lowest applicable transportation
charge;
(2)(i) Deliver the shipment in good order
and condition alongside the ocean vessel and
within reach of its loading tackle, at the
point of delivery and on the date or within
the period specified in the contract; and
(ii) Pay and bear all applicable charges, including transportation costs, wharfage, handling, and heavy lift charges, if necessary, up
to this point;
(3) Provide a clean dock or ship’s receipt;
(4) Be responsible for any loss of and/or
damage to the goods occurring before delivery of the shipment to the point specified in
the contract; and
(5) At the Government’s request and expense, assist obtaining the documents required for (i) exportation or (ii) importation
at destination.

(End of clause)
52.247–37 F.o.b. Vessel, Port of Shipment.
As prescribed in 47.303–9(c), insert the
following clause in solicitations and
contracts when the delivery term is
f.o.b. vessel, port of shipment:
F.O.B. VESSEL, PORT OF SHIPMENT (APR 1984)
(a) The term f.o.b. vessel, port of shipment,
as used in this clause, means free of expense
to the Government loaded, stowed, and
trimmed on board the ocean vessel at the
specified port of shipment.
(b) The Contractor shall—
(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment for ocean transportation
in conformance with carrier requirements to
protect the goods and to ensure assessment
of the lowest applicable transportation
charge;
(2)(i) Deliver the shipment on board the
ocean vessel in good order and condition on
the date or within the period fixed; and
(ii) Pay and bear all charges incurred in
placing the shipment actually on board;
(3) Provide a clean ship’s receipt or onboard ocean bill of lading;
(4) Be responsible for any loss of and/or
damage to the goods occurring before delivery of the shipment on board the ocean vessel; and
(5) At the Government’s request and expense, assist in obtaining the documents required for (i) exportation or (ii) importation
at destination.

(End of clause)
52.247–38 F.o.b. Inland Carrier, Point
of Exportation.
As prescribed in 47.303–10(c), insert
the following clause in solicitations
and contracts when the delivery term
is f.o.b. inland carrier, point of exportation:
F.O.B. INLAND CARRIER, POINT OF
EXPORTATION (APR 1984)
(a) The term f.o.b. inland carrier, point of exportation, as used in this clause, means free
of expense to the Government, on board the
conveyance of the inland carrier, delivered
to the specified point of exportation.
(b) The Contractor shall—
(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment for ocean transportation
in conformance with carrier requirements to
protect the goods and to ensure assessment
of the lowest applicable transportation
charge;
(2) Prepare and distribute commercial bills
of lading;
(3)(i) Deliver the shipment in good order
and condition in or on the conveyance of the
carrier on the date or within the period specified; and
(ii) Pay and bear all applicable charges, including transportation costs, to the point of
delivery specified in the contract;
(4) Be responsible for any loss of and/or
damage to the goods occurring before delivery of the shipment to the point of delivery
in the contract; and
(5) At the Government’s request and expense, assist in obtaining the documents required for (i) exportation or (ii) importation
at destination.

(End of clause)
52.247–39 F.o.b. Inland Point, Country
of Importation.
As prescribed in 47.303–11(c), insert
the following clause in solicitations
and contracts when the delivery term
is f.o.b. inland point, country of importation:
F.O.B. INLAND POINT, COUNTRY OF
IMPORTATION (APR 1984)
(a) The term f.o.b. inland point, country of
importation, as used in this clause, means free
of expense to the Government, on board the
indicated type of conveyance of the carrier,
delivered to the specified inland point where
the consignee’s facility is located.
(b) The Contractor shall—

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48 CFR Ch. 1 (10–1–03 Edition)

(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment for ocean transportation
in conformance with carrier requirements to
protect the goods;
(2)(i) Deliver, in or on the inland carrier’s
conveyance, the shipment in good order and
condition to the specified inland point where
the consignee’s facility is located; and
(ii) Pay and bear all applicable charges incurred up to the point of delivery, including
transportation costs; export, import, or
other fees or taxes; costs of landing; wharfage costs; customs duties and costs of certificates of origin; consular invoices; and other
documents that may be required for importation; and
(3) Be responsible for any loss of and/or
damage to the goods until their arrival on or
in the carrier’s conveyance at the specified
inland point.

(End of clause)
52.247–40 Ex Dock, Pier, or
house, Port of Importation.

Ware-

As prescribed in 47.303–12(c), insert
the following clause in solicitations
and contracts when the delivery term
is ex dock, pier, or warehouse, port of
importation:
EX DOCK, PIER, OR WAREHOUSE, PORT OF
IMPORTATION (APR 1984)
(a) The term ex dock, pier, or warehouse,
port of importation, as used in this clause,
means free of expense to the Government delivered on the designated dock or pier or in
the warehouse at the specified port of importation.
(b) The Contractor shall—
(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment for ocean transportation
in conformance with carrier requirements to
protect the goods;
(2)(i) Deliver shipment in good order and
condition; and
(ii) Pay and bear all charges up to the
point of delivery specified in the contract,
including transportation costs; export, import, or other fees or taxes; costs of wharfage
and landing, if any; customs duties; and
costs of certificates of origin, consular invoices, or other documents that may be required for exportation or importation; and
(3) Be responsible for any loss of and/or
damage to the goods occurring before delivery of the shipment to the point of delivery
specified in the contract.

(End of clause)
52.247–41 C.& f. Destination.
As prescribed in 47.303–13(c), insert
the following clause in solicitations
and contracts when the delivery term
is c.& f. destination:
C.& F. DESTINATION (APR 1984)
(a) The term c.& f. destination, as used in
this clause, means free of expense to the
Government delivered on board the ocean
vessel to the specified point of destination,
with the cost of transportation paid by the
Contractor.
(b) The Contractor shall—
(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment for ocean transportation
in conformance with carrier requirements;
(2)(i) Deliver the shipment in good order
and condition; and
(ii) Pay and bear all applicable charges to
the point of destination specified in the contract, including transportation costs and export taxes or other fees or charges levied because of exportation;
(3) Obtain and dispatch promptly to the
Government clean on-board ocean bills of
lading to the specified point of destination;
(4) Be responsible for any loss of and/or
damage to the goods occurring before delivery; and
(5) At the Government’s request and expense, provide certificates of origin, consular
invoices, or any other documents issued in
the country of origin or of shipment, or both,
that may be required for importation into
the country of destination.

(End of clause)
52.247–42 C.i.f. Destination.
As prescribed in 47.303–14(c), insert
the following clause in solicitations
and contracts when the delivery term
is c.i.f. destination:
C.I.F. DESTINATION (APR 1984)
(a) The term c.i.f. destination, as used in
this clause, means free of expense to the
Government delivered on board the ocean
vessel to the specified point of destination,
with the cost of transportation and marine
insurance paid by the Contractor.
(b) The Contractor shall—
(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment for ocean transportation
in conformance with carrier requirements;
(2)(i) Deliver the shipment in good order
and condition; and

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52.247–45

(ii) Pay and bear all applicable charges to
the point of destination specified in the contract, including transportation costs and export taxes or other fees or charges levied because of exportation;
(3) Obtain and dispatch promptly to the
Government clean on-board ocean bills of
lading to the specified point of destination;
(4) Be responsible for any loss of and/or
damage to the goods occurring before delivery;
(5) At the Government’s request and expense, provide certificates of origin, consular
invoices, or any other documents issued in
the country of origin or of shipment, or both,
that may be required for importation into
the country of destination; and
(6) Obtain and dispatch to the Government
an insurance policy or certificate providing
the amount and extent of marine insurance
coverage specified in the contract or agreed
upon by the Government Contracting Officer.

(End of clause)
52.247–43 F.o.b. Designated Air Carrier’s Terminal, Point of Exportation.
As prescribed in 47.303–15(c), insert
the following clause in solicitations
and contracts when the delivery term
is f.o.b. designated air carrier’s terminal, point of exportation:
F.O.B. DESIGNATED AIR CARRIER’S TERMINAL,
POINT OF EXPORTATION (APR 1984)
(a) The term f.o.b. designated air carrier’s
terminal, point of exportation, as used in this
clause, means free of expense to the Government loaded aboard the aircraft, or delivered
to the custody of the air carrier (if only the
air carrier performs the loading), at the air
carrier’s terminal specified in the contract.
(b) The Contractor shall—
(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment for air transportation in
conformance with carrier requirements to
protect the goods and to ensure assessment
of the lowest applicable transportation
charge;
(2)(i) Deliver the shipment in good order
and condition into the conveyance of the
carrier, or to the custody of the carrier (if
only the carrier performs the loading), at the
point of delivery and on the date or within
the period specified in the contract; and
(ii) Pay and bear all applicable charges up
to this point;
(3) Provide a clean Government bill of lading and/or air waybill;
(4) Be responsible for any loss of and/or
damage to the goods occurring before deliv-

ery of the goods to the point specified in the
contract; and
(5) At the Government’s request and expense, assist in obtaining the documents required for the purpose of exportation.

(End of clause)
52.247–44 F.o.b. Designated Air Carrier’s Terminal, Point of Importation.
As prescribed in 47.303–16(c), insert
the following clause in solicitations
and contracts when the delivery term
is f.o.b. designated air carrier’s terminal, point of importation:
F.O.B. DESIGNATED AIR CARRIER’S TERMINAL,
POINT OF IMPORTATION (APR 1984)
(a) The term f.o.b. designated air carrier’s
terminal, point of importation, as used in this
clause, means free of expense to the Government delivered to the air carrier’s terminal
at the point of importation specified in the
contract.
(b) The Contractor shall—
(1)(i) Pack and mark the shipment to comply with contract specifications; or
(ii) In the absence of specifications, prepare the shipment for air transportation in
conformance with carrier requirements to
protect the goods;
(2) Prepare and distribute bills of lading or
air waybills;
(3)(i) Deliver the shipment in good order
and condition to the point of delivery specified in the contract; and
(ii) Pay and bear all charges incurred up to
the point of delivery specified in the contract, including transportation costs; export,
import, or other fees or taxes; cost of landing, if any; customs duties; and costs of certificates of origin, consular invoices, or
other documents that may be required for
exportation or importation; and
(4) Be responsible for any loss of and/or
damage to the goods until delivery of the
goods to the Government at the designated
air carrier’s terminal.

(End of clause)
52.247–45 F.o.b. Origin and/or F.o.b.
Destination Evaluation.
As prescribed in 47.305–2(b), insert the
following provision in solicitations
when offers are solicited on the basis of
both f.o.b. origin and f.o.b. destination:
F.O.B. ORIGIN AND/OR F.O.B. DESTINATION
EVALUATION (APR 1984)
Offers are invited on the basis of both f.o.b.
origin and f.o.b. destination, and the Government will award on the basis the Contracting

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52.247–46

48 CFR Ch. 1 (10–1–03 Edition)

Officer determines to be most advantageous
to the Government. An offer on the basis of
f.o.b. origin only or f.o.b. destination only is
acceptable, but will be evaluated only on the
basis submitted.

(End of provision)
52.247–46 Shipping Point(s) Used in
Evaluation of F.o.b. Origin Offers.
As prescribed in 47.305–3(b)(4)(ii), insert the following provision in f.o.b. origin solicitations when price evaluation for shipments from various shipping points is contemplated:

(End of provision)
[68 FR 28088, May 22, 2003]

52.247–48 F.o.b. Destination—Evidence
of Shipment.

SHIPPING POINT(S) USED IN EVALUATION OF
F.O.B. ORIGIN OFFERS (APR 1984)
(a) If more than one shipping point or
plant is designated by the offeror and the offeror fails to indicate the quantity per shipping point or plant before bid opening, the
Government will evaluate the offer on the
basis of delivery of the entire quantity from
the point or plant where cost of transportation is most favorable to the Government.
(b) If the offeror, before bid opening (or the
closing date specified for receipt of offers)
fails to indicate any shipping point or plant,
the Government will evaluate the offer on
the basis of delivery from the plant at which
the contract will be performed, as indicated
in the offer. If no plant is indicated in the
offer, the offer will be evaluated on the basis
of delivery from the Contractor’s business
address indicated in the offer.
(c) If the offeror uses a shipping point
other than that which has been used by the
Government as a basis for the evaluation of
offers, any increase of transportation costs
shall be borne by the Contractor and any
savings shall revert to the Government.

(End of provision)
52.247–47

firm, whichever is applicable) in the contiguous United States.
(c) This transportation cost will be added
to the offer price to determine the Government’s overall cost.
(d) When tentative destinations are indicated, the Government will use them only
for evaluation purposes. The Government
has the right to use any other means of
transportation or any other destination at
the time of shipment.

Evaluation—F.o.b. Origin.

As prescribed in 47.305–3(f)(2), insert
the following provision. When it is appropriate to use methods other than
land transportation in evaluating offers; e.g., air, pipeline, barge, or ocean
tanker, modify the provision accordingly.
EVALUATION—F.O.B. ORIGIN (JUNE 2003)

As prescribed in 47.305–4(c), insert the
following clause:
F.O.B. DESTINATION—EVIDENCE OF SHIPMENT
(FEB 1999)
(a) If this contract is awarded on a free on
board (f.o.b.) destination basis, the Contractor—
(1) Shall not submit an invoice for payment until the supplies covered by the invoice have been shipped to the destination;
and
(2) Shall retain, and make available to the
Government for review as necessary, the following evidence of shipment documentation
for a period of 3 years after final payment
under the contract:
(i) If transportation is accomplished by
common carrier, a signed copy of the commercial bill of lading for the supplies covered
by the Contractor’s invoice, indicating the
carrier’s intent to ship the supplies to the
destination specified in the contract.
(ii) If transportation is accomplished by
parcel post, a copy of the certificate of mailing.
(iii) If transportation is accomplished by
other than common carrier or parcel post, a
copy of the delivery document showing receipt at the destination specified in the contract.
(b) The Contractor is not required to submit evidence of shipment documentation
with its invoice.

(End of clause)
[63 FR 70292, Dec. 18, 1998]

(a) The Government normally uses land
methods of transportation by regulated common carrier for shipment within the contiguous United States.
(b) To evaluate offers, the Government will
consider only these methods to establish the
cost of transportation between offeror’s shipping point and destination (tentative or

52.247–49

Destination Unknown.

As prescribed in 47.305–5(b)(2), insert
the following provision in solicitations
when destinations are tentative and
only for the purpose of evaluating offers:

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DESTINATION UNKNOWN (APR 1984)
For the purpose of evaluating offers and for
no other purpose, the final destination(s)
for the supplies will be considered to be as
follows: llllllllllllllllll

(End of provision)
52.247–50 No Evaluation of Transportation Costs.
As prescribed in 47.305–5(c)(1), insert
the following provision in solicitations
when exact destinations are not known
and it is impractical to establish tentative or general delivery places for
the purpose of evaluating transportation costs:
NO EVALUATION OF TRANSPORTATION COSTS
(APR 1984)
Costs of transporting supplies to be delivered under this contract will not be an evaluation factor for award.

(End of provision)
52.247–51 Evaluation of Export Offers.
As prescribed in 47.305–6(e), insert the
following provision:
EVALUATION OF EXPORT OFFERS (JAN 2001)
(a) Port handling and ocean charges—other
than DOD water terminals. Port handling and
ocean charges in tariffs on file with the Bureau of Domestic Regulation, Federal Maritime Commission, or other appropriate regulatory authorities as of the date of bid opening (or the closing date specified for receipt
of offers) and which will be effective for the
date of the expected initial shipment will be
used in the evaluation of offers.
(b) F.o.b. origin, transportation under Government bill of lading. (1) Offers shall be evaluated and awards made on the basis of the
lowest laid down cost to the Government at
the overseas port of discharge, via methods
and ports compatible with required delivery
dates and conditions affecting transportation known at the time of evaluation. Included in this evaluation, in addition to the
f.o.b. origin price of the item, shall be the inland transportation costs from the point of
origin in the United States to the port of
loading, port handling charges at the port of
loading, and ocean shipping costs from the
United States port of loading (see paragraph
(d) below) to the overseas port of discharge.
The Government may designate the mode of
routing of shipment and may load from other
than those ports specified for evaluation purposes.
(2) Offers shall be evaluated on the basis of
shipment through one of the ports set forth
in paragraph (d) below to the overseas port

of discharge. Evaluation shall be made on
the basis of shipment through the port that
will result in the lowest cost to the Government.
(3) Ports of loading shall be considered as
destinations within the meaning of the term
f.o.b. destination as that term is used in the
F.o.b. Origin clause of this contract.
(c) F.o.b. port of loading with inspection and
acceptance at origin. (1) Offers shall be evaluated on the basis of the lowest laid down cost
to the Government at the overseas port of
discharge via methods compatible with required delivery dates and conditions affecting transportation known at the time of
evaluation. Included in this evaluation, in
addition to the price to the United States
port of loading (see paragraph (2) below),
shall be the port handling charges at the
port of loading and the ocean shipping cost
from the port of loading (see paragraph (d)
below) to the overseas port of discharge.
(2) Unless offers are applicable only to
f.o.b. origin delivery under Government bills
of lading (see paragraph (b) above), offerors
shall designate below at least one of the
ports of loading listed in paragraph (d) below
as their place of delivery. Failure to designate at least one of the ports as the point
to which delivery will be made by the Contractor may render the offer nonresponsive.
PLACE OF DELIVERY: lllllllllll
[Offerors insert at least one of the ports listed in
paragraph (d) below.]
(d) Ports of loading for evaluation of offers.
Terminals to be used by the Government in
evaluating offers are as follows: (For the information of the offerors, ocean and port handling charges are set forth if the terminal named
is a DOD water terminal.)
Ports/Terminals
of Loading

lllllll
lllllll
lllllll

Combined Ocean
and Port Handling Charges to
(Indicate Country)

Unit of Measure:
i.e., metric ton,
measurement
ton, cubic foot,
etc.

lllllll
lllllll
lllllll

lllllll
lllllll
lllllll

(e) Ports of loading nominated by offeror. The
ports of loading named in paragraph (d)
above are considered by the Government to
be appropriate for this solicitation due to
their compatibility with methods and facilities required to handle the cargo and types
of vessels and to meet the required overseas
delivery dates. Notwithstanding the foregoing, offerors may nominate additional
ports of loading that the offeror considers to
be more favorable to the Government. The
Government may disregard such nominated
ports if, after considering the quantity and
nature of the supplies concerned, the requisite cargo handling capability, the available sailings on U.S.-flag vessels, and other
pertinent transportation factors, it determines that use of the nominated ports is not

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48 CFR Ch. 1 (10–1–03 Edition)

compatible with the required overseas delivery date. United States Great Lakes ports of
loading may be considered in the evaluation
of offers only for those items scheduled in
this provision for delivery during the ice-free
or navigable period as proclaimed by the authorities of the St. Lawrence Seaway (normal period is between April 15 and November
30 annually). All ports named, including
those nominated by offerors and determined
to be eligible as provided in this provision,
shall be considered in evaluating all offers
received in order to establish the lowest laid
down cost to the Government at the overseas
port of discharge. All determinations shall
be based on availability of ocean services by
U.S.-flag vessels only. Additional U.S. port(s)
of loading nominated by offeror, if any:
lll
(f) Price basis: Offeror shall indicate whether prices are based on—
( ) Paragraph (b), f.o.b. origin, transportation by GBL to port listed in paragraph
(d);
( ) Paragraph (c), f.o.b. destination (i.e., a
port listed in paragraph (d));
( ) Paragraph (e), f.o.b. origin, transportation by GBL to port nominated in paragraph (e); and/or
( ) Paragraph (e), f.o.b. destination (i.e., a
port nominated in paragraph (e)).

(End of provision)

Alternate III (APR 1984). When offers
are solicited on an f.o.b. destination
only basis, delete paragraph (b) from
the basic provision but do not redesignate the ensuing paragraphs. Delete
subparagraph (c)(2) and paragraph (f)
from the provision and substitute the
following subparagraph (c)(2) and paragraph (f). Add paragraph (g) below.
(c)(2) Offerors shall designate below at
least one of the ports of loading listed in
paragraph (d) below as their place of delivery. Failure to designate at least one of the
ports as the point to which delivery will be
made by the Contractor may render the offer
nonresponsive.
PLACE OF DELIVERY: lllllllllll
[Offerors insert at least one of the ports listed in
paragraph (d) below.].
(f) Price basis. Offerors shall indicate
whether prices are based on—
b Paragraph (c), f.o.b. destination (i.e., a
port listed in paragraph (d)); or
b Paragraph (e), f.o.b. destination (i.e., a
port nominated in paragraph (e)).
(g) Paragraph (b) has been deleted, but ensuing paragraphs have not been redesignated.
[48 FR 42478, Sept. 19, 1983, as amended at 59
FR 67058, Dec. 28, 1994; 66 FR 2141, Jan. 10,
2001]

Alternate I (FEB 1995). When the
CONUS ports of export are DOD water
terminals, delete paragraph (a) from
the basic provision and substitute for
it the following paragraph (a):

52.247–52 Clearance and Documentation Requirements—Shipments to
DOD Air or Water Terminal Transshipment Points.

(a) Port handling and ocean charges—DOD
water terminals. The port handling and ocean
charges are set forth in paragraph (d) of this
provision for the information of offerors and
are current as of the time of issuance of the
solicitation. For evaluation of offers, the
Government will use the port handling and
ocean charges made available by the Directorate of International Traffic, Military
Traffic Management Command rate information letters, on file as of the date of bid opening (or the closing date specified for receipt
of offers) and which will be effective for the
date of the expected initial shipment.

CLEARANCE AND DOCUMENTATION REQUIREMENTS—SHIPMENTS TO DOD AIR OR WATER
TERMINAL TRANSSHIPMENT POINTS (APR
1984)

Alternate II (APR 1984). When offers
are solicited on an f.o.b. origin only
basis, delete paragraphs (c) and (f) from
the basic provision, but do not redesignate the ensuing paragraphs. Add the
following basic paragraph (g) to the
provision:
(g) Paragraphs (c) and (f) have been deleted
but ensuing paragraphs have not been redesignated.

As prescribed in 47.305–6(f)(2), insert
the following clause in solicitations
and contracts when shipments will be
consigned to DOD air or water terminal transshipment points:

All shipments to water or air ports for
transshipment to overseas destinations are
subject to the following requirements unless
clearance and documentation requirements
have been expressly delegated to the Contractor:
(a) At least 10 days before shipping cargo
to a water port, the Contractor shall obtain
an Export Release from the Government
transportation office for—
(1) Each shipment weighing 10,000 pounds
or more; and
(2) Each shipment weighing less than 10,000
pounds; if the cargo either—
(i) Is classified TOP SECRET, SECRET, OR
CONFIDENTIAL;

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52.247–53

(ii) Will require exclusive use of a motor
vehicle;
(iii) Will occupy full visible capacity of a
railway car or motor vehicle;
(iv) Is less than a carload or truckload, but
will be tendered as a carload or truckload; or
(v) Is to be shipped to an ammunition
outloading port for water shipment; or
(3) Each shipment weighing less than 10,000
pounds if the cargo consists of—
(i) Narcotics;
(ii) Perishable biological material;
(iii) Vehicles to be offered for driveaway
service;
(iv) Explosives, or other dangerous articles
classified as A, B, or C explosives;
(v) Poisons, classes A, B, or C; or
(vi) Radioactive material, as defined in 49
CFR 170–179.
(b) The Contractor is cautioned not to
order railway cars or motor vehicles for
loading until an Export Release has been received.
(c) If the Contracting Officer directs delivery within a shorter period than 10 days, the
Contractor shall advise the transportation
office of the date on which the cargo will be
ready for shipment.
(d) At least 5 days before shipping cargo to
either a water port or an air port (regardless
of the weight, security classification, or the
commodity description), the Contractor
shall provide the Government transportation
office the information shown in paragraph
(e) below to permit preparation of a Transportation Control and Movement Document
(TCMD).
(e) When applying for the Export Release
in paragraph (a) above or when providing information for preparation of the TCMD in
accordance with paragraph (d) above, the
Contractor shall furnish the—
(1) Proposed date or dates of shipment;
(2) Number and type of containers;
(3) Gross weight and cube of the shipment;
(4) Number of cars or trucks that will be
involved;
(5) Transportation Control Number(s)
(TCN) as required for marking under MIL–
STD–129 or Federal Standard 123; and
(6) Proper shipping name as specified in 46
CFR 146.05 for all items classified as dangerous substances as required for marking
under MIL–STD–129.
(f) All movement documents (Government
or commercial bills of lading or other delivery documents) shall be annotated by the
Contractor with the—
(1) Transportation Control Number, Consignor Code of activity directing the shipment; i.e., cognizant contract administration
office, purchasing office when contract administration has been retained, or a Contractor specifically delegated MILSTAMP
responsibilities in the contract, whichever is

appropriate, Consignee Code, and Transportation Priority for each shipment unit;
(2) Export Release Number and valid shipping period, if stated (if expired, the Contractor shall request a renewal); and
(3) Cubic foot measurement of each shipment unit.
(g) All annotations on the movement documents shall be made in the Description of Articles space except, on Government bills of
lading the Export Release number and shipping period shall be entered in the space entitled Route Order/Release No.
(h) The Contractor shall (1) mail a copy of
the commercial bill of lading or other movement document to the transshipment point
and (2) give a copy of the commercial bill of
lading or other movement document to the
carrier for presentation to the transshipment point with delivery of the shipment.

(End of clause)
52.247–53 Freight
scription.

Classification

As prescribed in 47.305–9(b)(1), insert
the following provision in solicitations
when the supplies being acquired are
new to the supply system, nonstandard,
or modifications of previously shipped
items, and different freight classifications may apply:
FREIGHT CLASSIFICATION DESCRIPTION (APR
1984)
Offerors are requested to indicate below
the full Uniform Freight Classification (rail)
description, or the National Motor Freight
Classification description applicable to the
supplies, the same as offeror uses for commercial shipment. This description should
include the packing of the commodity (box,
crate, bundle, loose, setup, knocked down,
compressed, unwrapped, etc.), the container
material (fiberboard, wooden, etc.), unusual
shipping dimensions, and other conditions
affecting traffic descriptions. The Government will use these descriptions as well as
other information available to determine the
classification description most appropriate
and advantageous to the Government. Offeror understands that shipments on any f.o.b.
origin contract awarded, as a result of this
solicitation, will be made in conformity with
the shipping classification description specified by the Government, which may be different from the classification description
furnished below.
FOR FREIGHT CLASSIFICATION PURPOSES, OFFEROR DESCRIBES THIS
COMMODITY AS lllllllllllll

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48 CFR Ch. 1 (10–1–03 Edition)
(End of provision)

52.247–54

(End of clause)

[Reserved]

[48 FR 42478, Sept. 19, 1983, as amended at 68
FR 28088, May 22, 2003]

52.247–55 F.o.b. Point for Delivery of
Government-Furnished Property.
As prescribed in 47.305–12(a)(2), insert
the following clause:
F.O.B. POINT FOR DELIVERY OF GOVERNMENTFURNISHED PROPERTY (JUNE 2003)
(a) Unless otherwise specified in this solicitation, the Government will deliver any Government-furnished property for use within
the contiguous United States or Canada to a
point specified by the Contractor in the
offer. If the Government makes delivery by
railroad, the f.o.b. point will be private siding, Contractor’s plant. If the Contractor’s
plant is not served by rail, the f.o.b. point
will be railroad cars in the same or nearest
city having rail service. The Government
may choose the mode of transportation and
the carriers and will bear the cost of all linehaul transportation to the specified destination.
(b) If the destination of the Governmentfurnished property is a Contractor’s plant located outside the contiguous United States
or Canada, the f.o.b. point for Government
delivery of Government-furnished property
will be a Contractor-specified location in the
contiguous United States. If the Contractor
fails to name a point, the Government will
select as the f.o.b. point the port city in the
contiguous United States nearest to the Government-furnished property that has regular
commercial water transportation services to
the offshore port nearest the Contractor’s
plant.
(c) Unless otherwise directed by the Contracting Officer or provided in the contract,
the Contractor shall return all Governmentfurnished equipment, supplies, and property,
including all property not returned in the
form of acceptable end items, to the point at
which the Government property was originally furnished to the Contractor under the
contract. Notwithstanding the fact that the
Government may have furnished the property at the Contractor’s plant, the Contracting Officer may direct the Contractor to
deliver the Government property being returned to, and load, block, and brace it in,
railway cars in the city in which the Contractor’s plant is located, or, if the Contractor’s city is not served by rail service, in the
nearest city having rail service. Unless otherwise specified in the contract, all property
shall be packed in containers conforming
with the rules of common carrier published
tariffs so as to be free of penalty charges by
the carrier designated for shipment by the
Government.

52.247–56 Transit Arrangements.
As prescribed in 47.305–13(a)(3)(ii), insert the following provision in solicitations when benefits may accrue to the
Government because transit arrangements may apply:
TRANSIT ARRANGEMENTS (APR 1984)
The lowest appropriate common carrier
transportation costs, including offeror’s
through transit rates and charges when applicable, from offeror’s shipping points, via
the transit point, to the ultimate destination will be used in evaluating offers.
Transit point(s)

Destination(s)

(End of provision)
52.247–57 Transportation
Transit
Privilege Credits.
As prescribed in 47.305–13(b)(4), insert
the following clause in solicitations
and contracts when supplies are of such
a nature, or when it is the custom of
the trade, that offerors may have potential transit credits available and
the Government may reduce transportation costs through the use of transit
credits:
TRANSPORTATION TRANSIT PRIVILEGE CREDITS
(APR 1984)
(a) If the offeror has established with regulated common carriers transit privileges
that can be applied to the supplies when
shipped from the original source, the offeror
is invited to propose to use these credits for
shipping the supplies to the designated Government destinations. The offeror will ship
these supplies under commercial bills of lading, paying all remaining transportation
charges connected with the shipment, subject to reimbursement by the Government in
an amount equal to the remaining charges
but not exceeding the amount quoted by the
offeror.
(b) After loading on the carrier’s equipment and acceptance by the carrier, these
shipments under paid commercial bills of
lading will move for the account of and at
the risk of the Government (unless, pursuant

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52.247–60

to the Changes clause, the office administering the contract directs use of Government bills of lading).
(c) The amount quoted below by the offeror
represents the transportation costs in cents
per 100 pounds (freight rate) for full carload/
truckload shipments of the supplies from
offeror’s original source, via offeror’s transit
plant or point, to the Government destination(s) including the carrier’s transit privilege charge, less the applicable transit credit
(i.e., the amount (rate) initially paid to the
carrier for shipment from original source to
offeror’s transit plant or point).
(d) The rate per CWT quoted will be used
by the Government to evaluate the offered
f.o.b. origin price unless a lower rate is applicable on the date of bid opening (or closing
date specified for receipt of offers). To have
the offer evaluated on this basis, the offeror
must insert below the remaining transportation charges that the offeror agrees to pay,
including any transit charges, subject to reimbursement by the Government, as explained in this clause, to destinations listed
in the Schedule as follows:
RATE PER CWT IN CENTS lllllllll
TO DESTINATION lllllllllllll

(End of clause)
52.247–58 Loading,
Blocking,
and
Bracing of Freight Car Shipments.
As prescribed in 47.305–15(a)(2), insert
the following clause in solicitations
and contracts when supplies may be
shipped in carload lots by rail:
LOADING, BLOCKING, AND BRACING OF FREIGHT
CAR SHIPMENTS (APR 1984)
(a) Upon receipt of shipping instructions,
as provided in this contract, the supplies to
be included in any carload shipment by rail
shall be loaded, blocked, and braced by the
Contractor in accordance with the standards
published by the Association of American
Railroads and effective at the time of shipment.
(b) Shipments, for which the Association of
American Railroads has published no such
standards, shall be loaded, blocked, and
braced in accordance with standards established by the shipper as evidenced by written
acceptance of an authorized representative
of the carrier.
(c) The Contractor shall be liable for payment of any damage to any supplies caused
by the failure to load, block, and brace in accordance with acceptable standards set forth
herein.
(d) A copy of the appropriate pamphlet of
the Association of American Railroads may
be obtained from that Association.

(End of clause)
52.247–59 F.o.b. Origin—Carload and
Truckload Shipments.
As prescribed in 47.305–16(a), insert
the following clause in solicitations
and contracts when it is contemplated
that they may result in f.o.b. origin
contracts with shipments in carloads
or truckloads. This will facilitate realistic freight cost evaluations of offers
and ensure that contractors produce
economical shipments of agreed size.
F.O.B. ORIGIN—CARLOAD AND TRUCKLOAD
SHIPMENTS (APR 1984)
(a) The Contractor agrees that shipment
shall be made in carload or truckload lots
when the quantity to be delivered to any one
destination in any delivery period pursuant
to the contract schedule of deliveries is sufficient to constitute a carload r truckload
shipment, except as may otherwise be permitted or directed, in writing, by the Contracting Officer.
(b) For evaluation purposes, the agreed
weight of a carload or truckload shall be the
highest applicable minimum weight that will
result in the lowest freight rate (or per car
charge) on file or published in common carrier tariffs or tenders as of the date of bid
opening (or the closing date specified for receipt of proposals).
(c) For purposes of actual delivery, the
agreed weight of a carload or truckload will
be the highest applicable minimum weight
that will result in the lowest possible freight
rate (or per car charge) on file or published
as of date of shipment.
(d) If the total weight of any scheduled
quantity to a destination is less than the
highest carload/truckload minimum weight
used for evaluation of offers, the Contractor
agrees to ship such scheduled quantity in
one shipment.
(e) The Contractor shall be liable to the
Government for any increased costs to the
Government resulting from failure to comply with the above requirements.

(End of clause)
52.247–60 Guaranteed Shipping Characteristics.
As prescribed in 47.305–16(b)(1), insert
the following clause:
GUARANTEED SHIPPING CHARACTERISTICS
(DEC 1989)
(a) The offeror is requested to complete
subparagraph (a)(1) of this clause, for each
part or component which is packed or packaged separately. This information will be
used to determine transportation costs for

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48 CFR Ch. 1 (10–1–03 Edition)

evaluation purposes. If the offeror does not
furnish sufficient data in subparagraph (a)(1)
of this clause, to permit determination by
the Government of the item shipping costs,
evaluation will be based on the shipping
characteristics submitted by the offeror
whose offer produces the highest transportation costs or in the absence thereof, by the
Contracting Officer’s best estimate of the actual transportation costs. If the item shipping costs, based on the actual shipping
characteristics, exceed the item shipping
costs used for evaluation purposes, the Contractor agrees that the contract price shall
be reduced by an amount equal to the difference between the transportation costs actually incurred, and the costs which would
have been incurred if the evaluated shipping
characteristics had been accurate.
(1) To be completed by the offeror:
(i) Type of container: Wood Box ll, Fiber
Box ll, Barrel ll, Reel ll, Drum ll,
Other (Specify) ll;
(ii) Shipping configuration: Knockeddownll, Set-up ll, Nested ll, Other
(specify) ll;
(iii) Size of container ll″ (Length), × ll″
(Width), × ll″ (Height) = ll Cubic FT;
(iv) Number of items per container ll
Each;
(v) Gross weight of container and
contentsll LBS
(vi) Palletized/skidded ll Yes ll No;
(vii) Number of containers per pallet/
skidll;
(viii) Weight of empty pallet bottom/skid
and sidesll LBS;
(ix) Size of pallet/skid and contents ll
LBS Cube ll;
(x) Number of containers or pallets/skid
per railcar ll*—
Size of railcar ll
Type of railcar ll
(xi) Number of containers or pallets/skids
per trailer ll*—
Size of trailer ll FT
Type of trailer ll
(2) To be completed by the Government
after evaluation but before contract award:
(i) Rate used in evaluation ll;
(ii) Tender/Tariff ll;
(iii) Item ll;
(b) The guaranteed shipping characteristics requested in subparagraph (a)(1) of this
clause do not establish actual transportation
requirements, which are specified elsewhere
in this solicitation. The guaranteed shipping
characteristics will be used only for the purpose of evaluating offers and establishing
any liability of the successful offeror for increased transportation costs resulting from
actual shipping characteristics which differ
from those used for evaluation in accordance
with paragraph (a) of this clause.
*Number of complete units (contract line
item) to be shipped in carrier’s equipment.

(End of clause)
[54 FR 48997, Nov. 28, 1989; 55 FR 30, Jan. 2,
1990]

52.247–61 F.o.b. Origin—Minimum Size
of Shipments.
As prescribed in 47.305–16(c), insert
the following clause in solicitations
and contracts when volume rates may
apply:
F.O.B. ORIGIN—MINIMUM SIZE OF SHIPMENTS
(APR 1984)
The Contractor agrees that shipment will
be made in carload and truckload lots when
the quantity to be delivered to any one destination in any delivery period pursuant to
the contract schedule of deliveries is sufficient to constitute a carload or truckload
shipment, except as may otherwise be permitted or directed in writing by the Contracting Officer. The agreed weight of a carload or truckload will be the highest applicable minimum weight which will result in the
lowest freight rate (or per car charge) on file
or published in common carrier tariffs or
tenders as of date of shipment. In the event
the total weight of any scheduled quantity
to a destination is less than the highest carload/truckload minimum weight, the Contractor agrees to ship such scheduled quantity in one shipment. The Contractor shall
be liable to the Government for any increased costs to the Government resulting
from failure to comply with the above requirements. This liability shall not attach if
supplies are outsized or of such nature that
they cannot be loaded at the highest minimum weight bracket.

(End of clause)
52.247–62 Specific
known.

Quantities

As prescribed in 47.305–16(d)(2), insert
the following clause in solicitations
and contracts when total requirements
and destinations to which shipments
will be made are known, but the specific quantity to be shipped to each
destination cannot be predetermined.
This clause protects the interests of
both the Government and the contractor during the course of the performance of the contract.
SPECIFIC QUANTITIES UNKNOWN (APR 1984)
(a) For the purpose of evaluating f.o.b. destination offers, the Government estimates
that the quantity specified will be shipped to
the destinations indicated:

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Estimated quantity

52.247–64
STATEMENT OF UNAVAILABILITY OF U.S.-FLAG
AIR CARRIERS

Destination

(b) If the quantity shipped to each destination varies from the quantity estimated, and
if the variation results in a change in the
transportation costs, appropriate adjustment
shall be made.

(End of clause)
52.247–63 Preference for U.S.-Flag Air
Carriers.

International air transportation of persons
(and their personal effects) or property by
U.S.-flag air carrier was not available or it
was necessary to use foreign-flag air carrier
service for the following reasons (see section
47.403 of the Federal Acquisition Regulation):
[State reasons]:
llllllllllllllllllllllll
(End of statement)
(e) The Contractor shall include the substance of this clause, including this paragraph (e), in each subcontract or purchase
under this contract that may involve international air transportation.

As prescribed in 47.405, insert the following clause:

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 53
FR 27468, July 20, 1988; 62 FR 240, Jan. 2, 1997;
68 FR 28088, May 22, 2003]

PREFERENCE FOR U.S.-FLAG AIR CARRIERS
(JUNE 2003)
(a) Definitions. As used in this clause—
International air transportation means
transportation by air between a place in the
United States and a place outside the United
States or between two places both of which
are outside the United States.
United States means the 50 States, the District of Columbia, and outlying areas.
U.S.-flag air carrier means an air carrier
holding a certificate under 49 U.S.C. Chapter
411.
(b) Section 5 of the International Air
Transportation Fair Competitive Practices
Act of 1974 (49 U.S.C. 40118) (Fly America
Act) requires that all Federal agencies and
Government contractors and subcontractors
use U.S.-flag air carriers for U.S. Government-financed international air transportation of personnel (and their personal effects) or property, to the extent that service
by those carriers is available. It requires the
Comptroller General of the United States, in
the absence of satisfactory proof of the necessity for foreign-flag air transportation, to
disallow expenditures from funds, appropriated or otherwise established for the account of the United States, for international
air transportation secured aboard a foreignflag air carrier if a U.S.-flag air carrier is
available to provide such services.
(c) If available, the Contractor, in performing work under this contract, shall use
U.S.-flag carriers for international air transportation of personnel (and their personal effects) or property.
(d) In the event that the Contractor selects
a carrier other than a U.S.-flag air carrier
for international air transportation, the
Contractor shall include a statement on
vouchers involving such transportation essentially as follows:

52.247–64 Preference
for
Privately
Owned U.S.-Flag Commercial Vessels.
As prescribed in 47.507(a), insert the
following clause:
PREFERENCE FOR PRIVATELY OWNED U.S.FLAG COMMERCIAL VESSELS (APR 2003)
(a) Except as provided in paragraph (e) of
this clause, the Cargo Preference Act of 1954
(46 U.S.C. Appx. 1241(b)) requires that Federal departments and agencies shall transport in privately owned U.S.-flag commercial
vessels at least 50 percent of the gross tonnage of equipment, materials, or commodities that may be transported in ocean vessels (computed separately for dry bulk carriers, dry cargo liners, and tankers). Such
transportation shall be accomplished when
any equipment, materials, or commodities,
located within or outside the United States,
that may be transported by ocean vessel
are—
(1) Acquired for a U.S. Government agency
account;
(2) Furnished to, or for the account of, any
foreign nation without provision for reimbursement;
(3) Furnished for the account of a foreign
nation in connection with which the United
States advances funds or credits, or guarantees the convertibility of foreign currencies;
or
(4) Acquired with advance of funds, loans,
or guaranties made by or on behalf of the
United States.
(b) The Contractor shall use privately
owned U.S.-flag commercial vessels to ship
at least 50 percent of the gross tonnage involved under this contract (computed separately for dry bulk carriers, dry cargo liners,

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48 CFR Ch. 1 (10–1–03 Edition)

and tankers) whenever shipping any equipment, materials, or commodities under the
conditions set forth in paragraph (a) above,
to the extent that such vessels are available
at rates that are fair and reasonable for privately owned U.S.-flag commercial vessels.
(c)(1) The Contractor shall submit one legible copy of a rated on-board ocean bill of
lading for each shipment to both (i) the Contracting Officer and (ii) the Office of Cargo
Preference, Maritime Administration (MAR590), 400 Seventh Street, SW, Washington, DC
20590. Subcontractor bills of lading shall be
submitted through the Prime Contractor.
(2) The Contractor shall furnish these bill
of lading copies (i) within 20 working days of
the date of loading for shipments originating
in the United States, or (ii) within 30 working days for shipments originating outside
the United States. Each bill of lading copy
shall contain the following information:
(A) Sponsoring U.S. Government agency.
(B) Name of vessel.
(C) Vessel flag of registry.
(D) Date of loading.
(E) Port of loading.
(F) Port of final discharge.
(G) Description of commodity.
(H) Gross weight in pounds and cubic feet
if available.
(I) Total ocean freight revenue in U.S. dollars.
(d) The Contractor shall insert the substance of this clause, including this paragraph (d), in all subcontracts or purchase orders under this contract, except those described in paragraph (e)(4).
(e) The requirement in paragraph (a) does
not apply to—
(1) Cargoes carried in vessels of the Panama Canal Commission or as required or authorized by law or treaty;
(2) Ocean transportation between foreign
countries of supplies purchased with foreign
currencies made available, or derived from
funds that are made available, under the
Foreign Assistance Act of 1961 (22 U.S.C.
2353);
(3) Shipments of classified supplies when
the classification prohibits the use of nonGovernment vessels; and
(4) Subcontracts or purchase orders for the
acquisition of commercial items unless—
(i) This contract is—
(A) A contract or agreement for ocean
transportation services; or
(B) A construction contract; or
(ii) The supplies being transported are—
(A) Items the Contractor is reselling or distributing to the Government without adding
value. (Generally, the Contractor does not
add value to the items when it subcontracts
items for f.o.b. destination shipment); or
(B) Shipped in direct support of U.S. military—
(1) Contingency operations;
(2) Exercises; or

(3) Forces deployed in connection with
United Nations or
North Atlantic Treaty Organization humanitarian or peacekeeping operations.
(f) Guidance regarding fair and reasonable
rates for privately owned U.S.-flag commercial vessels may be btained from the Office
of Costs and Rates, Maritime Administration, 400 Seventh Street, SW, Washington,
DC 20590, Phone: 202–366–4610.

(End of clause)
Alternate I (Apr 2003). As prescribed in
47.507(a)(2), substitute the following
paragraphs (a) and (b) for paragraphs
(a) and (b) of the basic clause:
(a) Except as provided in paragraphs (b)
and (e) of this clause, the Contractor shall
use privately owned U.S.-flag commercial
vessels, and no others, in the ocean transportation of any supplies to be furnished under
this contract.
(b) If such vessels are not available for
timely shipment at rates that are fair and
reasonable for privately owned U.S.-flag
commercial vessels, the Contractor shall notify the Contracting Officer and request (1)
authorization to ship in foreign-flag vessels
or (2) designation of available U.S.-flag vessels. If the Contractor is authorized in writing by the Contracting Officer to ship the
supplies in foreign-flag vessels, the contract
price shall be equitably adjusted to reflect
the difference in costs of shipping the supplies in privately owned U.S.-flag commercial vessels and in foreign-flag vessels.

Alternate II (Apr 2003). As prescribed
in 47.507(a)(3), substitute the following
paragraph (e) for paragraph (e) of the
basic clause:
(e) The requirement in paragraph (a) does
not apply to—
(1) Cargoes carried in vessels of the Panama Canal
Commission or as required or authorized
by law or treaty;
(2) Ocean transportation between foreign
countries of supplies purchased with foreign
currencies made available, or derived from
funds that are made available, under the
Foreign Assistance Act of 1961 (22 U.S.C.
2353); and
(3) Shipments of classified supplies when
the classification prohibits the use of nonGovernment vessels.
(4) Subcontracts or purchase orders under
this contract for the acquisition of commercial items unless the supplies being transported are—
(i) Items the Contractor is reselling or distributing to the Government without adding
value. (Generally, the Contractor does not

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52.247–66

add value to the items when it subcontracts
items for f.o.b. destination shipment); or
(ii) Shipments in direct support of U.S.
military—
(A) Contingency operations;
(B) Exercises; or
(C) Forces deployed in connection with
United Nations or North Atlantic Treaty Organization humanitarian or peacekeeping
operations. (Note: This contract requires
shipment of commercial items in direct support of U.S. military contingency operations,
exercises, or forces deployed in connection
with United Nations or North Atlantic Treaty Organization humanitarian or peacekeeping operations.)
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34762, July 3, 1995; 61 FR 39198, July 26,
1996; 62 FR 40238, July 25, 1997; 62 FR 51379,
Oct. 1, 1997; 65 FR 24324, Apr. 25, 2000; 68 FR
13204, Mar. 18, 2003; 68 FR 28098, May 22, 2003]

52.247–65 F.o.b.
Origin,
Prepaid
Freight—Small Package Shipments.
As prescribed in 47.303–17(f), insert
the following clause:
F.O.B. ORIGIN PREPAID FREIGHT—SMALL
PACKAGE SHIPMENTS (JAN 1991)
(a) When authorized by the Contracting Officer, f.o.b. origin freight shipments which do
not have a security classification shall move
on prepaid commercial bills of lading or
other shipping documents to domestic destinations, including air and water terminals.
Weight of individual shipments shall be governed by carrier restrictions but shall not
exceed 150 pounds by any form of commercial
air or 1,000 pounds by other commercial carriers. The Government will reimburse the
Contractor for reasonable freight charges.
(b) The Contractor shall annotate the commercial bill of lading as required by the
clause of this contract entitled ‘‘Commercial
Bill of Lading Notations.’’
(c) The Contractor shall consolidate prepaid shipments in accordance with procedures established by the cognizant transportation office. The Contractor is authored to
combine Government prepaid shipments
with the Contractor’s commercial shipments
for delivery to one or more consignees and
the Government will reimburse its pro rata
share of the total freight costs. The Contractor shall provide a copy of the commercial bill of lading promptly to each consignee. Quantities shall not be divided into
mailable lots for the purpose of avoiding
movement by other modes of transportation.
(d) Transportation charges will be billed as
a separate item on the invoice for each shipment made. A copy of the pertinent bill of
lading, shipment receipt, or freight bill shall
accompany the invoice unless otherwise
specified in the contract.

(e) Loss and damage claims will be processed by the Government.

(End of clause)
[55 FR 52800, Dec. 21, 1990]

52.247–66

Returnable Cylinders.

As prescribed in 47.305–17, insert the
following clause:
RETURNABLE CYLINDERS (MAY 1994)
(a) Cylinder, referred to in this clause, is a
pressure vessel designed for pressures higher
than 40 psia and having a circular cross section excluding a portable tank, multitank
car tank, cargo tank or tank car.
(b) Returnable cylinders shall remain the
Contractor’s property but shall be loaned
without charge to the Government for a period of ll days [Contracting Officer shall insert number of days] (hereafter referred to as
loan period) following the day of delivery to
the f.o.b. point specified in the contract. Any
cylinder not returned within the loan period
shall be charged a daily rental beginning
with the first day after the loan period expires, to and including the day the cylinders
are delivered to the Contractor (if the original delivery was f.o.b. origin) or are delivered or made available for delivery to the
Contractor’s designated carrier (if the original delivery was f.o.b. destination). The Government shall pay the Contractor a rental of
$llllll [Contracting Officer shall insert
dollar amount for rental, after evaluation of offers] per cylinder, per day, computed separately for cylinders by type, size, and capacity and for each point of delivery named in
the contract. No rental shall accrue to the
Contractor in excess of replacement value
per cylinder specified in paragraph (c) of this
clause.
(c) For each cylinder lost or damaged beyond repair while in the Government’s possession, the Government shall pay to the
Contractor the replacement value, less the
allocable rental paid for that cylinder as follows: llllllllll [Contracting Officer
shall insert the cylinder types, sizes, capacities,
and associated replacement values.] These cylinders shall become Government property.
(d) If any lost cylinder is located within
llllllllll [Contracting Officer shall
insert number of days] calendar days after
payment by the Government, it may be returned to the Contractor by the Government, and the Contractor shall pay to the
Government an amount equal to the replacement value, less rental computed in accordance with paragraph (b) of this clause, beginning at the expiration of the loan period
specified in paragraph (b) of this clause, and
continuing to the date on which the cylinder
was delivered to the Contractor.

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52.247–67

48 CFR Ch. 1 (10–1–03 Edition)
(End of clause)

[59 FR 11386, Mar. 10, 1994]

52.247–67 Submission of Commercial
Transportation Bills to the General
Services Administration for Audit.
As prescribed in 47.104–4(c), insert the
following clause:

(2) The contract number including any
alpha-numeric prefix identifying the contracting office;
(3) The name and address of the contracting office;
(4) The total number of bills submitted
with the statement; and
(5) A listing of the respective amounts paid
or, in lieu of such listing, an adding machine
tape of the amounts paid showing the Contractor’s voucher or check numbers.

SUBMISSION OF COMMERCIAL TRANSPORTATION
BILLS TO THE GENERAL SERVICES ADMINISTRATION FOR AUDIT (JUN 1997)
(a)(1) In accordance with paragraph (a)(2)
of this clause, the Contractor shall submit to
the General Services Administration (GSA)
for audit, legible copies of all paid freight
bills/invoices, commercial bills of lading
(CBL’s), passenger coupons, and other supporting documents for transportation services on which the United States will assume
freight charges that were paid (i) by the Contractor under a cost-reimbursement contract, and (ii) by a first-tier subcontractor
under a cost-reimbursement subcontract
thereunder.
(2) Cost-reimbursement Contractors shall
only submit for audit those CBL’s with
freight shipment charges exceeding $50.00.
Bills under $50.00 shall be retained on-site by
the Contractor and made available for GSA
on-site audits. This exception only applies to
freight shipment bills and is not intended to
apply to bills and invoices for any other
transportation services.
(b) The Contractor shall forward copies of
paid freight bills/invoices, CBL’s, passenger
coupons, and supporting documents as soon
as possible following the end of the month,
in one package to the General Services Administration, ATTN: FWA, 1800 F Street,
NW, Washington, DC 20405. The Contractor
shall include the paid freight bills/invoices,
CBL’s, passenger coupons, and supporting
documents for first-tier subcontractors
under a cost-reimbursement contract. If the
inclusion of the paid freight bills/invoices,
CBL’s, passenger coupons, and supporting
documents for any subcontractor in the shipment is not practicable, the documents may
be forwarded to GSA in a separate package.
(c) Any original transportation bills or
other documents requested by GSA shall be
forwarded promptly by the Contractor to
GSA. The Contractor shall ensure that the
name of the contracting agency is stamped
or written on the face of the bill before sending it to GSA.
(d) A statement prepared in duplicate by
the Contractor shall accompany each shipment of transportation documents. GSA will
acknowledge receipt of the shipment by signing and returning the copy of the statement.
The statement shall show—
(1) The name and address of the Contractor;

(End of clause)
[59 FR 67055, Dec. 28, 1994, as amended at 62
FR 40238, July 25, 1997]

52.248–1 Value Engineering.
As prescribed in 48.201, insert the following clause:
VALUE ENGINEERING (FEB 2000)
(a) General. The Contractor is encouraged
to develop, prepare, and submit value engineering change proposals (VECP’s) voluntarily. The Contractor shall share in any net
acquisition savings realized from accepted
VECP’s, in accordance with the incentive
sharing rates in paragraph (f) below.
(b) Definitions. Acquisition savings, as used
in this clause, means savings resulting from
the application of a VECP to contracts
awarded by the same contracting office or its
successor for essentially the same unit. Acquisition savings include—
(1) Instant contract savings, which are the
net cost reductions on this, the instant contract, and which are equal to the instant
unit cost reduction multiplied by the number of instant contract units affected by the
VECP, less the Contractor’s allowable development and implementation costs;
(2) Concurrent contract savings, which are
net reductions in the prices of other contracts that are definitized and ongoing at the
time the VECP is accepted; and
(3) Future contract savings, which are the
product of the future unit cost reduction
multiplied by the number of future contract
units in the sharing base. On an instant contract, future contract savings include savings on increases in quantities after VECP
acceptance that are due to contract modifications, exercise of options, additional orders, and funding of subsequent year requirements on a multiyear contract.
Collateral costs, as used in this clause,
means agency cost of operation, maintenance, logistic support, or Government-furnished property.
Collateral savings, as used in this clause,
means those measurable net reductions resulting from a VECP in the agency’s overall
projected collateral costs, exclusive of acquisition savings, whether or not the acquisition cost changes.

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Federal Acquisition Regulation

52.248–1

Contracting office includes any contracting
office that the acquisition is transferred to,
such as another branch of the agency or another agency’s office that is performing a
joint acquisition action.
Contractor’s development and implementation
costs, as used in this clause, means those
costs the Contractor incurs on a VECP specifically in developing, testing, preparing,
and submitting the VECP, as well as those
costs the Contractor incurs to make the contractual changes required by Government acceptance of a VECP.
Future unit cost reduction, as used in this
clause, means the instant unit cost reduction adjusted as the Contracting Officer considers necessary for projected learning or
changes in quantity during the sharing period. It is calculated at the time the VECP is
accepted and applies either (1) throughout
the sharing period, unless the Contracting
Officer decides that recalculation is necessary because conditions are significantly
different from those previously anticipated
or (2) to the calculation of a lump-sum payment, which cannot later be revised.
Government costs, as used in this clause,
means those agency costs that result directly from developing and implementing
the VECP, such as any net increases in the
cost of testing, operations, maintenance, and
logistics support. The term does not include
the normal administrative costs of processing the VECP or any increase in this contract’s cost or price resulting from negative
instant contract savings.
Instant contract, as used in this clause,
means this contract, under which the VECP
is submitted. It does not include increases in
quantities after acceptance of the VECP that
are due to contract modifications, exercise
of options, or additional orders. If this is a
multiyear contract, the term does not include quantities funded after VECP acceptance. If this contract is a fixed-price contract with prospective price redetermination, the term refers to the period for which
firm prices have been established.
Instant unit cost reduction means the
amount of the decrease in unit cost of performance (without deducting any Contractor’s development or implementation costs)
resulting from using the VECP on this, the
instant contract. If this is a service contract,
the instant unit cost reduction is normally
equal to the number of hours per line-item
task saved by using the VECP on this contract, multiplied by the appropriate contract
labor rate.
Negative instant contract savings means the
increase in the cost or price of this contract
when the acceptance of a VECP results in an
excess of the Contractor’s allowable development and implementation costs over the
product of the instant unit cost reduction
multiplied by the number of instant contract
units affected.

Net acquisition savings means total acquisition savings, including instant, concurrent,
and future contract savings, less Government costs.
Sharing base, as used in this clause, means
the number of affected end items on contracts of the contracting office accepting the
VECP.
Sharing period, as used in this clause,
means the period beginning with acceptance
of the first unit incorporating the VECP and
ending at a calendar date or event determined by the contracting officer for each
VECP.
Unit, as used in this clause, means the item
or task to which the Contracting Officer and
the Contractor agree the VECP applies.
Value engineering change proposal (VECP)
means a proposal that—
(1) Requires a change to this, the instant
contract, to implement; and
(2) Results in reducing the overall projected cost to the agency without impairing
essential functions or characteristics; provided, that it does not involve a change—
(i) In deliverable end item quantities only;
(ii) In research and development (R&D) end
items or R&D test quantities that is due
solely to results of previous testing under
this contract; or
(iii) To the contract type only.
(c) VECP preparation. As a minimum, the
Contractor shall include in each VECP the
information described in subparagraphs (1)
through (8) below. If the proposed change is
affected by contractually required configuration management or similar procedures, the
instructions in those procedures relating to
format, identification, and priority assignment shall govern VECP preparation. The
VECP shall include the following:
(1) A description of the difference between
the existing contract requirement and the
proposed requirement, the comparative advantages and disadvantages of each, a justification when an item’s function or characteristics are being altered, the effect of the
change on the end item’s performance, and
any pertinent objective test data.
(2) A list and analysis of the contract requirements that must be changed if the
VECP is accepted, including any suggested
specification revisions.
(3) Identification of the unit to which the
VECP applies.
(4) A separate, detailed cost estimate for
(i) the affected portions of the existing contract requirement and (ii) the VECP. The
cost reduction associated with the VECP
shall take into account the Contractor’s allowable development and implementation
costs, including any amount attributable to
subcontracts under the Subcontracts paragraph of this clause, below.
(5) A description and estimate of costs the
Government may incur in implementing the

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52.248–1

48 CFR Ch. 1 (10–1–03 Edition)

VECP, such as test and evaluation and operating and support costs.
(6) A prediction of any effects the proposed
change would have on collateral costs to the
agency.
(7) A statement of the time by which a contract modification accepting the VECP must
be issued in order to achieve the maximum
cost reduction, noting any effect on the contract completion time or delivery schedule.
(8) Identification of any previous submissions of the VECP, including the dates submitted, the agencies and contract numbers
involved, and previous Government actions,
if known.
(d) Submission. The Contractor shall submit
VECP’s to the Contracting Officer, unless
this contract states otherwise. If this contract is administered by other than the contracting office, the Contractor shall submit a
copy of the VECP simultaneously to the
Contracting Officer and to the Administrative Contracting Officer.
(e) Government action. (1) The Contracting
Officer will notify the Contractor of the status of the VECP within 45 calendar days
after the contracting office receives it. If additional time is required, the Contracting Officer will notify the Contractor within the
45-day period and provide the reason for the
delay and the expected date of the decision.
The Government will process VECP’s expeditiously; however, it will not be liable for any
delay in acting upon a VECP.

(2) If the VECP is not accepted, the Contracting Officer will notify the Contractor in
writing, explaining the reasons for rejection.
The Contractor may withdraw any VECP, in
whole or in part, at any time before it is accepted by the Government. The Contracting
Officer may require that the Contractor provide written notification before undertaking
significant expenditures for VECP effort.
(3) Any VECP may be accepted, in whole or
in part, by the Contracting Officer’s award of
a modification to this contract citing this
clause and made either before or within a
reasonable time after contract performance
is completed. Until such a contract modification applies a VECP to this contract, the
Contractor shall perform in accordance with
the existing contract. The decision to accept
or reject all or part of any VECP is a unilateral decision made solely at the discretion of
the Contracting Officer.
(f) Sharing rates. If a VECP is accepted, the
Contractor shall share in net acquisition
savings according to the percentages shown
in the table below. The percentage paid the
Contractor depends upon (1) this contract’s
type (fixed-price, incentive, or cost-reimbursement), (2) the sharing arrangement
specified in paragraph (a) above (incentive,
program requirement, or a combination as
delineated in the Schedule), and (3) the
source of the savings (the instant contract,
or concurrent and future contracts), as follows:

CONTRACTOR’S SHARE OF NET ACQUISITION SAVINGS
[Figures in Percent]
Sharing arrangement
Incentive (voluntary)
Contract type
Instant contract rate

Con-current
and future
contract rate

1 50

1 50

(2)
3 25

Fixed-price (includes fixed-price-award-fee; excludes other
fixed-price incentive contracts) ..........................................
Incentive (fixed-price or cost) (other than award fee) ..........
Cost-reimbursement (includes cost-plus-award-fee; excludes other cost-type incentive contracts) .......................

Program requirement (mandatory)
Instant contract rate

Con-current
and future
contract rate

1 50

25
(2)

25
25

3 25

15

15

1 The

Contracting Officer may increase the Contractor’s sharing rate to as high as 75 percent for each VECP.
2 Same sharing arrangement as the contract’s profit or fee adjustment formula.
3 The Contracting Officer may increase the Contractor’s sharing rate to as high as 50 percent for each VECP.

(g) Calculating net acquisition savings. (1)
Acquisition savings are realized when (i) the
cost or price is reduced on the instant contract, (ii) reductions are negotiated in concurrent contracts, (iii) future contracts are
awarded, or (iv) agreement is reached on a
lump-sum payment for future contract savings (see subparagraph (i)(4) below). Net acquisition savings are first realized, and the
Contractor shall be paid a share, when Government costs and any negative instant con-

tract savings have been fully offset against
acquisition savings.
(2) Except in incentive contracts, Government costs and any price or cost increases
resulting from negative instant contract savings shall be offset against acquisition savings each time such savings are realized
until they are fully offset. Then, the Contractor’s share is calculated by multiplying
net acquisition savings by the appropriate
Contractor’s percentage sharing rate (see
paragraph (f) above). Additional Contractor

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Federal Acquisition Regulation

52.248–1

shares of net acquisition savings shall be
paid to the Contractor at the time realized.
(3) If this is an incentive contract, recovery of Government costs on the instant contract shall be deferred and offset against
concurrent and future contract savings. The
Contractor shall share through the contract
incentive structure in savings on the instant
contract items affected. Any negative instant contract savings shall be added to the
target cost or to the target price and ceiling
price, and the amount shall be offset against
concurrent and future contract savings.
(4) If the Government does not receive and
accept all items on which it paid the Contractor’s share, the Contractor shall reimburse the Government for the proportionate
share of these payments.
(h) Contract adjustment. The modification
accepting the VECP (or a subsequent modification issued as soon as possible after any
negotiations are completed) shall—
(1) Reduce the contract price or estimated
cost by the amount of instant contract savings, unless this is an incentive contract;
(2) When the amount of instant contract
savings is negative, increase the contract
price, target price and ceiling price, target
cost, or estimated cost by that amount;
(3) Specify the Contractor’s dollar share
per unit on future contracts, or provide the
lump-sum payment;
(4) Specify the amount of any Government
costs or negative instant contract savings to
be offset in determining net acquisition savings realized from concurrent or future contract savings; and
(5) Provide the Contractor’s share of any
net acquisition savings under the instant
contract in accordance with the following:
(i) Fixed-price contracts—add to contract
price.
(ii) Cost-reimbursement contracts—add to
contract fee.
(i) Concurrent and future contract savings.
(1) Payments of the Contractor’s share of
concurrent and future contract savings shall
be made by a modification to the instant
contract in accordance with subparagraph
(h)(5) above. For incentive contracts, shares
shall be added as a separate firm-fixed-price
line item on the instant contract. The Contractor shall maintain records adequate to
identify the first delivered unit for 3 years
after final payment under this contract.
(2) The Contracting Officer shall calculate
the Contractor’s share of concurrent contract savings by (i) subtracting from the reduction in price negotiated on the concurrent contract any Government costs or negative instant contract savings not yet offset
and (ii) multiplying the result by the Contractor’s sharing rate.
(3) The Contracting Officer shall calculate
the Contractor’s share of future contract
savings by (i) multiplying the future unit
cost reduction by the number of future con-

tract units scheduled for delivery during the
sharing period, (ii) subtracting any Government costs or negative instant contract savings not yet offset, and (iii) multiplying the
result by the Contractor’s sharing rate.
(4) When the Government wishes and the
Contractor agrees, the Contractor’s share of
future contract savings may be paid in a single lump sum rather than in a series of payments over time as future contracts are
awarded. Under this alternate procedure, the
future contract savings may be calculated
when the VECP is accepted, on the basis of
the Contracting Officer’s forecast of the
number of units that will be delivered during
the sharing period. The Contractor’s share
shall be included in a modification to this
contract (see subparagraph (h)(3) above) and
shall not be subject to subsequent adjustment.
(5) Alternate no-cost settlement method.
When, in accordance with subsection 48.104–4
of the Federal Acquisition Regulation, the
Government and the Contractor mutually
agree to use the no-cost settlement method,
the following applies:
(i) The Contractor will keep all the savings
on the instant contract and on its concurrent contracts only.
(ii) The Government will keep all the savings resulting from concurrent contracts
placed on other sources, savings from all future contracts, and all collateral savings.
(j) Collateral savings. If a VECP is accepted,
the Contracting Officer will increase the instant contract amount, as specified in paragraph (h)(5) of this clause, by a rate from 20
to 100 percent, as determined by the Contracting Officer, of any projected collateral
savings determined to be realized in a typical year of use after subtracting any Government costs not previously offset. However, the Contractor’s share of collateral
savings will not exceed the contract’s firmfixed-price, target price, target cost, or estimated cost, at the time the VECP is accepted, or $100,000, whichever is greater. The Contracting Officer will be the sole determiner
of the amount of collateral savings.
(k) Relationship to other incentives. Only
those benefits of an accepted VECP not rewardable under performance, design-to-cost
(production unit cost, operating and support
costs, reliability and maintainability), or
similar incentives shall be rewarded under
this clause. However, the targets of such incentives affected by the VECP shall not be
adjusted because of VECP acceptance. If this
contract specifies targets but provides no incentive to surpass them, the value engineering sharing shall apply only to the amount
of achievement better than target.
(l) Subcontracts. The Contractor shall include an appropriate value engineering
clause in any subcontract of $100,000 or more
and may include one in subcontracts of lesser value. In calculating any adjustment in

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52.248–2

48 CFR Ch. 1 (10–1–03 Edition)

this contract’s price for instant contract
savings (or negative instant contract savings), the Contractor’s allowable development and implementation costs shall include
any subcontractor’s allowable development
and implementation costs, and any value engineering incentive payments to a subcontractor, clearly resulting from a VECP accepted by the Government under this contract. The Contractor may choose any arrangement for subcontractor value engineering incentive payments; provided, that the
payments shall not reduce the Government’s
share of concurrent or future contract savings or collateral savings.
(m) Data. The Contractor may restrict the
Government’s right to use any part of a
VECP or the supporting data by marking the
following legend on the affected parts:
‘‘These data, furnished under the Value Engineering clause of contract ll, shall not be
disclosed outside the Government or duplicated, used, or disclosed, in whole or in part,
for any purpose other than to evaluate a
value engineering change proposal submitted
under the clause. This restriction does not
limit the Goverment’s right to use information contained in these data if it has been
obtained or is otherwise available from the
Contractor or from another source without
limitations.’’
If a VECP is accepted, the Contractor hereby grants the Government unlimited rights
in the VECP and supporting data, except
that, with respect to data qualifying and
submitted as limited rights technical data,
the Government shall have the rights specified in the contract modification implementing the VECP and shall appropriately
mark the data. (The terms unlimited rights
and limited rights are defined in part 27 of the
Federal Acquisition Regulation.)

(End of clause)
Alternate I (APR 1984). If the contracting officer selects a mandatory
value engineering program requirement, substitute the following paragraph (a) for paragraph (a) of the basic
clause:
(a) General. The Contractor shall (1) engage
in a value engineering program, and submit
value engineering progress reports, as specified in the Schedule and (2) submit to the
Contracting Officer any resulting value engineering change proposals (VECP’s). In addition to being paid as the Schedule specifies
for this mandatory program, the Contractor
shall share in any net acquisition savings realized from accepted VECP’s, in accordance
with the program requirement sharing rates
in paragraph (f) below.

Alternate II (FEB 2000). If the contracting officer selects both a value engineering incentive and mandatory
value engineering program requirement, substitute the following paragraph (a) for paragraph (a) of the basic
clause:
(a) General. For those contract line items
designated in the Schedule as subject to the
value engineering program requirement, the
Contractor shall (1) engage in a value engineering program, and submit value engineering progress reports, as specified in the
Schedule and (2) submit to the Contracting
Officer any resulting VECP’s. In addition to
being paid as the Schedule specifies for this
mandatory program, the Contractor shall
share in any net acquisition savings realized
from VECP’s accepted under the program, in
accordance with the program requirement
sharing rates in paragraph (f) below. For remaining areas of the contract, the Contractor is encouraged to develop, prepare,
and submit VECP’s voluntarily; for VECP’s
accepted under these remaining areas, the
incentive sharing rates apply.The decision
on which rate applies is a unilateral decision
made solely at the discretion of the Government.

Alternate III (APR 1984). When the
head of the contracting activity determines that the cost of calculating and
tracking collateral savings will exceed
the benefits to be derived in a contract
calling for a value engineering incentive, delete paragraph (j) from the
basic clause and redesignate the remaining paragraphs accordingly.
[48 FR 42478, Sept. 19, 1983, as amended at 54
FR 5059, Jan. 31, 1989; 64 FR 51848, Sept. 24,
1999; 64 FR 72449, Dec. 27, 1999]

52.248–2 Value
Engineering—Architect-Engineer.
As prescribed in 48.201(f), insert the
following clause:
VALUE ENGINEERING—ARCHITECT-ENGINEER
(MAR 1990)
(a) General. The Contractor shall (1) perform value engineering (VE) services and
submit progress reports as specified in the
Schedule; and (2) submit to the Contracting
Officer any resulting value engineering proposals (VEP’s). Value engineering activities
shall be performed concurrently with, and
without delay to, the schedule set forth in
the contract. The services shall include VE
evaluation and review and study of design
documents immediately following completion of the 35 percent design state or at such
stages as the Contracting Officer may direct.

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52.248–3

Each separately priced line item for VE services shall define specifically the scope of
work to be accomplished and may include
VE studies of items other than design documents. The Contractor shall be paid as the
contract specifies for this effort, but shall
not share in savings which may result from
acceptance and use of VEP’s by the Government.
(b) Definitions.
Life cycle cost, as used in this clause, is the
sum of all costs over the useful life of a
building, system or product. It includes the
cost of design, construction, acquisition, operation, maintenance, and salvage (resale)
value, if any.
Value engineering, as used in this clause,
means an organized effort to analyze the
functions of systems, equipment, facilities,
services, and supplies for the purpose of
achieving the essential functions at the lowest life cycle cost consistent with required
performance, reliability, quality, and safety.
Value engineering proposal, as used in this
clause, means, in connection with an A–E
contract, a change proposal developed by
employees of the Federal Government or
contractor value engineering personnel
under contract to an agency to provide value
engineering services for the contract or program.
(c) Submissions. After award of an architect-engineering contract the contractor
shall—
(1) Provide the Government with a fee
breakdown schedule for the VE services
(such as criteria review, task team review,
and bid package review) included in the contract schedule;
(2) Submit, for approval by the Contracting
Officer, a list of team members and their respective resumes representing the engineering disciplines required to complete the
study effort, and evidence of the team leader’s qualifications and engineering discipline. Subsequent changes or substitutions
to the approved VE team shall be submitted
in writing to the Contracting Officer for approval; and
(3) The team leader shall be responsible for
prestudy work assembly and shall edit, reproduce, and sign the final report and each
VEP. All VEP’s, even if submitted earlier as
an individual submission, shall be contained
in the final report.
(d) VEP preparation. As a minimum, the
contractor shall include the following information in each VEP:
(1) A description of the difference between
the existing the proposed design, the comparative advantage and disadvantages of
each, a justification when an item’s function
is being altered, the effect of the change on
system or facility performance, and any pertinent objective test data.

(2) A list and analysis of design criteria or
specifications that must be changed if the
VEP is accepted.
(3) A separate detailed estimate of the impact on project cost of each VEP, if accepted
and implemented by the Government.
(4) A description and estimate of costs the
Government may incur in implementing the
VEP, such as design change cost and test and
evaluation cost.
(5) A prediction of any effects the proposed
change may have on life cycle cost.
(6) The effect the VEP will have on design
or construction schedules.
(e) VEP acceptance. Approved VEP’s shall
be implemented by bilateral modification to
this contract.

(End of clause)
[55 FR 3889, Feb. 5, 1990]

52.248–3 Value
struction.

Engineering—Con-

As prescribed in 48.202, insert the following clause:
VALUE ENGINEERING—CONSTRUCTION (FEB
2000)
(a) General. The Contractor is encouraged
to develop, prepare, and submit value engineering change proposals (VECP’s) voluntarily. The Contractor shall share in any instant contract savings realized from accepted VECP’s, in accordance with paragraph (f)
below.
(b) Definitions. Collateral costs, as used in
this clause, means agency costs of operation,
maintenance, logistic support, or Government-furnished property.
Collateral savings, as used in this clause,
means those measurable net reductions resulting from a VECP in the agency’s overall
projected collateral costs, exlcusive of acquisition savings, whether or not the acquisition cost changes.
Contractor’s development and implementation
costs, as used in this clause, means those
costs the Contractor incurs on a VECP specifically in developing, testing, preparing,
and submitting the VECP, as well as those
costs the Contractor incurs to make the contractual changes required by Government acceptance of a VECP.
Government costs, as used in this clause,
means those agency costs that result directly from developing and implementing
the VECP, such as any net increases in the
cost of testing, operations, maintenance, and
logistic support. The term does not include
the normal administrative costs of processing the VECP.
Instant contract savings, as used in this
clause, means the estimated reduction in
Contractor cost of performance resulting

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52.248–3

48 CFR Ch. 1 (10–1–03 Edition)

from acceptance of the VECP, minus allowable Contractor’s development and implementation costs, including subcontractors’
development and implementation costs (see
paragraph (h) below).
Value engineering change proposal (VECP)
means a proposal that—
(1) Requires a change to this, the instant
contract, to implement; and
(2) Results in reducing the contract price
or estimated cost without impairing essential functions or characteristics; provided,
that it does not involve a change—
(i) In deliverable end item quantities only;
or
(ii) To the contract type only.
(c) VECP preparation. As a minimum, the
Contractor shall include in each VECP the
information described in subparagraphs (1)
through (7) below. If the proposed change is
affected by contractually required configuration management or similar procedures, the
instructions in those procedures relating to
format, identification, and priority assignment shall govern VECP preparation. The
VECP shall include the following:
(1) A description of the difference between
the existing contract requirement and that
proposed, the comparative advantages and
disadvantages of each, a justification when
an item’s function or characteristics are
being altered, and the effect of the change on
the end item’s performance.
(2) A list and analysis of the contract requirements that must be changed if the
VECP is accepted, including any suggested
specification revisions.
(3) A separate, detailed cost estimate for
(i) the affected portions of the existing contract requirement and (ii) the VECP. The
cost reduction associated with the VECP
shall take into account the Contractor’s allowable development and implementation
costs, including any amount attributable to
subcontracts under paragraph (h) below.
(4) A description and estimate of costs the
Government may incur in implementing the
VECP, such as test and evaluation and operating and support costs.
(5) A prediction of any effects the proposed
change would have on collateral costs to the
agency.
(6) A statement of the time by which a contract modification accepting the VECP must
be issued in order to achieve the maximum
cost reduction, noting any effect on the contract completion time or delivery schedule.
(7) Identification of any previous submissions of the VECP, including the dates submitted, the agencies and contract numbers
involved, and previous Government actions,
if known.
(d) Submission. The Contractor shall submit
VECP’s to the Resident Engineer at the
worksite, with a copy to the Contracting Officer.

(e) Government action. (1) The Contracting
Officer will notify the Contractor of the status of the VECP within 45 calendar days
after the contracting office receives it. If additional time is required, the Contracting Officer will notify the Contractor within the
45-day period and provide the reason for the
delay and the expected date of the decision.
The Government will process VECP’s expeditiously; however, it will not be liable for any
delay in acting upon a VECP.
(2) If the VECP is not accepted, the Contracting Officer will notify the Contractor in
writing, explaining the reasons for rejection.
The Contractor may withdraw any VECP, in
whole or in part, at any time before it is accepted by the Government. The Contracting
Officer may require that the Contractor provide written notification before undertaking
significant expenditures for VECP effort.
(3) Any VECP may be accepted, in whole or
in part, by the Contracting Officer’s award of
a modification to this contract citing this
clause. The Contracting Officer may accept
the VECP, even though an agreement on
price reduction has not been reached, by
issuing the Contractor a notice to proceed
with the change. Until a notice to proceed is
issued or a contract modification applies a
VECP to this contract, the Contractor shall
perform in accordance with the existing contract. The decision to accept or reject all or
part of any VECP is a unilateral decision
made solely at the discretion of the Contracting Officer.
(f) Sharing. (1) Rates. The Government’s
share of savings is determined by subtracting Government costs from instant contract savings and multiplying the result by
(i) 45 percent for fixed-price contracts or (ii)
75 percent for cost-reimbursement contracts.
(2) Payment. Payment of any share due the
Contractor for use of a VECP on this contract shall be authorized by a modification
to this contract to—
(i) Accept the VECP;
(ii) Reduce the contract price or estimated
cost by the amount of instant contract savings; and
(iii) Provide the Contractor’s share of savings by adding the amount calculated to the
contract price or fee.
(g) Collateral savings. If a VECP is accepted,
the Contracting Officer will increase the instant contract amount by 20 percent of any
projected collateral savings determined to be
realized in a typical year of use after subtracting any Government costs not previously offset. However, the Contractor’s
share of collateral savings will not exceed
the contract’s firm-fixed-price or estimated
cost, at the time the VECP is accepted, or
$100,000, whichever is greater. The Contracting Officer is the sole determiner of the
amount of collateral savings.
(h) Subcontracts. The Contractor shall include an appropriate value engineering

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52.249–2

clause in any subcontract of $50,000 or more
and may include one in subcontracts of lesser value. In computing any adjustment in
this contract’s price under paragraph (f)
above, the Contractor’s allowable development and implementation costs shall include
any subcontractor’s allowable development
and implementation costs clearly resulting
from a VECP accepted by the Government
under this contract, but shall exclude any
value engineering incentive payments to a
subcontractor. The Contractor may choose
any arrangement for subcontractor value engineering incentive payments; provided, that
these payments shall not reduce the Government’s share of the savings resulting from
the VECP.
(i) Data. The Contractor may restrict the
Government’s right to use any part of a
VECP or the supporting data by marking the
following legend on the affected parts:
‘‘These data, furnished under the Value Engineering—Construction clause of contract
ll, shall not be disclosed outside the Government or duplicated, used, or disclosed, in
whole or in part, for any purpose other than
to evaluate a value engineering change proposal submitted under the clause. This restriction does not limit the Government’s
right to use information contained in these
data if it has been obtained or is otherwise
available from the Contractor or from another source without limitations.’’
If a VECP is accepted, the Contractor hereby grants the Government unlimited rights
in the VECP and supporting data, except
that, with respect to data qualifying and
submitted as limited rights technical data,
the Government shall have the rights specified in the contract modification implementing the VECP and shall appropriately
mark the data. (The terms unlimited rights
and limited rights are defined in part 27 of the
Federal Acquisition Regulation.)

(End of clause)
Alternate I (APR 1984). When the head
of the contracting activity determines
that the cost of calculating and tracking collateral savings will exceed the
benefits to be derived in a construction
contract, delete paragraph (g) from the
basic clause and redesignate the remaining paragraphs accordingly.
[48 FR 42478, Sept. 19, 1983, as amended at 54
FR 5059, Jan. 31, 1989; 64 FR 72449, Dec. 27,
1999]

52.249–1 Termination for Convenience
of the Government (Fixed-Price)
(Short Form).
As prescribed in 49.502(a)(1), insert
the following clause in solicitations

and contracts when a fixed-price contract is contemplated and the contract
amount is expected to be $100,000 or
less, except (a) if use of the clause at
52.249–4, Termination for Convenience
of the Government (Services) (Short
Form) is appropriate (b), in contracts
for research and development work
with an educational or nonprofit institution on a no-profit basis, (c) in contracts for architect-engineer services,
or (d) if one of the clauses prescribed or
cited at 49.505(a), (b), or (e), is appropriate:
TERMINATION FOR CONVENIENCE OF THE GOVERNMENT
(FIXED-PRICE) (SHORT FORM)
(APR 1984)
The Contracting Officer, by written notice,
may terminate this contract, in whole or in
part, when it is in the Government’s interest. If this contract is terminated, the
rights, duties, and obligations of the parties,
including compensation to the Contractor,
shall be in accordance with part 49 of the
Federal Acquisition Regulation in effect on
the date of this contract.

(End of clause)
Alternate I (APR 1984). If the contract
is for dismantling, demolition, or removal of improvements, designate the
basic clause as paragraph (a) and add
the following paragraph (b):
(b) Upon receipt of the termination notice,
if title to property is vested in the Contractor under this contract, it shall revest in
the Government regardless of any other
clause of the contract, except for property
that the Contractor (a) disposed of by bona
fide sale or (b) removed from the site.

52.249–2 Termination for Convenience
of the Government (Fixed-Price).
As prescribed in 49.502(b)(1)(i), insert
the following clause:
TERMINATION FOR CONVENIENCE OF THE
GOVERNMENT (FIXED-PRICE) (SEP 1996)
(a) The Government may terminate performance of work under this contract in
whole or, from time to time, in part if the
Contracting Officer determines that a termination is in the Government’s interest. The
Contracting Officer shall terminate by delivering to the Contractor a Notice of Termination specifying the extent of termination
and the effective date.

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48 CFR Ch. 1 (10–1–03 Edition)

(b) After receipt of a Notice of Termination, and except as directed by the Contracting Officer, the Contractor shall immediately proceed with the following obligations, regardless of any delay in determining
or adjusting any amounts due under this
clause:
(1) Stop work as specified in the notice.
(2) Place no further subcontracts or orders
(referred to as subcontracts in this clause)
for materials, services, or facilities, except
as necessary to complete the continued portion of the contract.
(3) Terminate all subcontracts to the extent they relate to the work terminated.
(4) Assign to the Government, as directed
by the Contracting Officer, all right, title,
and interest of the Contractor under the subcontracts terminated, in which case the Government shall have the right to settle or to
pay any termination settlement proposal
arising out of those terminations.
(5) With approval or ratification to the extent required by the Contracting Officer, settle all outstanding liabilities and termination settlement proposals arising from the
termination of subcontracts; the approval or
ratification will be final for purposes of this
clause.
(6) As directed by the Contracting Officer,
transfer title and deliver to the Government
(i) the fabricated or unfabricated parts, work
in process, completed work, supplies, and
other material produced or acquired for the
work terminated, and (ii) the completed or
partially completed plans, drawings, information, and other property that, if the contract had been completed, would be required
to be furnished to the Government.
(7) Complete performance of the work not
terminated.
(8) Take any action that may be necessary,
or that the Contracting Officer may direct,
for the protection and preservation of the
property related to this contract that is in
the possession of the Contractor and in
which the Government has or may acquire
an interest.
(9) Use its best efforts to sell, as directed
or authorized by the Contracting Officer, any
property of the types referred to in subparagraph (b)(6) of this clause; provided, however,
that the Contractor (i) is not required to extend credit to any purchaser and (ii) may acquire the property under the conditions prescribed by, and at prices approved by, the
Contracting Officer. The proceeds of any
transfer or disposition will be applied to reduce any payments to be made by the Government under this contract, credited to the
price or cost of the work, or paid in any
other manner directed by the Contracting
Officer.
(c) The Contractor shall submit complete
termination inventory schedules no later
than 120 days from the effective date of termination, unless extended in writing by the

Contracting Officer upon written request of
the Contractor within this 120-day period.
(d) After expiration of the plant clearance
period as defined in subpart 45.6 of the Federal Acquisition Regulation, the Contractor
may submit to the Contracting Officer a list,
certified as to quantity and quality, of termination inventory not previously disposed
of, excluding items authorized for disposition by the Contracting Officer. The Contractor may request the Government to remove those items or enter into an agreement
for their storage. Within 15 days, the Government will accept title to those items and remove them or enter into a storage agreement. The Contracting Officer may verify
the list upon removal of the items, or if
stored, within 45 days from submission of the
list, and shall correct the list, as necessary,
before final settlement.
(e) After termination, the Contractor shall
submit a final termination settlement proposal to the Contracting Officer in the form
and with the certification prescribed by the
Contracting Officer. The Contractor shall
submit the proposal promptly, but no later
than 1 year from the effective date of termination, unless extended in writing by the
Contracting Officer upon written request of
the Contractor within this 1-year period.
However, if the Contracting Officer determines that the facts justify it, a termination
settlement proposal may be received and
acted on after 1 year or any extension. If the
Contractor fails to submit the proposal within the time allowed, the Contracting Officer
may determine, on the basis of information
available, the amount, if any, due the Contractor because of the termination and shall
pay the amount determined.
(f) Subject to paragraph (e) of this clause,
the Contractor and the Contracting Officer
may agree upon the whole or any part of the
amount to be paid or remaining to be paid
because of the termination. The amount may
include a reasonable allowance for profit on
work done. However, the agreed amount,
whether under this paragraph (f) or paragraph (g) of this clause, exclusive of costs
shown in subparagraph (g)(3) of this clause,
may not exceed the total contract price as
reduced by (1) the amount of payments previously made and (2) the contract price of
work not terminated. The contract shall be
modified, and the Contractor paid the agreed
amount. Paragraph (g) of this clause shall
not limit, restrict, or affect the amount that
may be agreed upon to be paid under this
paragraph.
(g) If the Contractor and the Contracting
Officer fail to agree on the whole amount to
be paid because of the termination of work,
the Contracting Officer shall pay the Contractor the amounts determined by the Contracting Officer as follows, but without duplication of any amounts agreed on under
paragraph (f) of this clause:

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52.249–2

(1) The contract price for completed supplies or services accepted by the Government
(or sold or acquired under subparagraph
(b)(9) of this clause) not previously paid for,
adjusted for any saving of freight and other
charges.
(2) The total of—
(i) The costs incurred in the performance
of the work terminated, including initial
costs and preparatory expense allocable
thereto, but excluding any costs attributable
to supplies or services paid or to be paid
under subparagraph (g)(1) of this clause;
(ii) The cost of settling and paying termination settlement proposals under terminated subcontracts that are properly chargeable to the terminated portion of the contract if not included in subdivision (g)(2)(i) of
this clause; and
(iii) A sum, as profit on subdivision (g)(2)(i)
of this clause, determined by the Contracting Officer under 49.202 of the Federal
Acquisition Regulation, in effect on the date
of this contract, to be fair and reasonable;
however, if it appears that the Contractor
would have sustained a loss on the entire
contract had it been completed, the Contracting Officer shall allow no profit under
this subdivision (iii) and shall reduce the settlement to reflect the indicated rate of loss.
(3) The reasonable costs of settlement of
the work terminated, including—
(i) Accounting, legal, clerical, and other
expenses reasonably necessary for the preparation of termination settlement proposals
and supporting data;
(ii) The termination and settlement of subcontracts (excluding the amounts of such
settlements); and
(iii) Storage, transportation, and other
costs incurred, reasonably necessary for the
preservation, protection, or disposition of
the termination inventory.
(h) Except for normal spoilage, and except
to the extent that the Government expressly
assumed the risk of loss, the Contracting Officer shall exclude from the amounts payable
to the Contractor under paragraph (g) of this
clause, the fair value, as determined by the
Contracting Officer, of property that is destroyed, lost, stolen, or damaged so as to become undeliverable to the Government or to
a buyer.
(i) The cost principles and procedures of
part 31 of the Federal Acquisition Regulation, in effect on the date of this contract,
shall govern all costs claimed, agreed to, or
determined under this clause.
(j) The Contractor shall have the right of
appeal, under the Disputes clause, from any
determination made by the Contracting Officer under paragraph (e), (g), or (l) of this
clause, except that if the Contractor failed
to submit the termination settlement proposal or request for equitable adjustment
within the time provided in paragraph (e) or

(l), respectively, and failed to request a time
extension, there is no right of appeal.
(k) In arriving at the amount due the Contractor under this clause, there shall be deducted—
(1) All unliquidated advance or other payments to the Contractor under the terminated portion of this contract;
(2) Any claim which the Government has
against the Contractor under this contract;
and
(3) The agreed price for, or the proceeds of
sale of, materials, supplies, or other things
acquired by the Contractor or sold under the
provisions of this clause and not recovered
by or credited to the Government.
(l) If the termination is partial, the Contractor may file a proposal with the Contracting Officer for an equitable adjustment
of the price(s) of the continued portion of the
contract. The Contracting Officer shall make
any equitable adjustment agreed upon. Any
proposal by the Contractor for an equitable
adjustment under this clause shall be requested within 90 days from the effective
date of termination unless extended in writing by the Contracting Officer.
(m)(1) The Government may, under the
terms and conditions it prescribes, make
partial payments and payments against
costs incurred by the Contractor for the terminated portion of the contract, if the Contracting Officer believes the total of these
payments will not exceed the amount to
which the Contractor will be entitled.
(2) If the total payments exceed the
amount finally determined to be due, the
Contractor shall repay the excess to the Government upon demand, together with interest computed at the rate established by the
Secretary of the Treasury under 50 U.S.C.
App. 1215(b)(2). Interest shall be computed
for the period from the date the excess payment is received by the Contractor to the
date the excess is repaid. Interest shall not
be charged on any excess payment due to a
reduction in the Contractor’s termination
settlement proposal because of retention or
other disposition of termination inventory
until 10 days after the date of the retention
or disposition, or a later date determined by
the Contracting Officer because of the circumstances.
(n) Unless otherwise provided in this contract or by statute, the Contractor shall
maintain all records and documents relating
to the terminated portion of this contract
for 3 years after final settlement. This includes all books and other evidence bearing
on the Contractor’s costs and expenses under
this contract. The Contractor shall make
these records and documents available to the
Government, at the Contractor’s office, at
all reasonable times, without any direct
charge. If approved by the Contracting Officer, photographs, microphotographs, or

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48 CFR Ch. 1 (10–1–03 Edition)

other authentic reproductions may be maintained instead of original records and documents.

(End of clause)
Alternate I (SEP 1996). If the contract
is for construction, substitute the following paragraph (g) for paragraph (g)
of the basic clause:
(g) If the Contractor and Contracting Officer fail to agree on the whole amount to be
paid the Contractor because of the termination of work, the Contracting Officer shall
pay the Contractor the amounts determined
as follows, but without duplication of any
amounts agreed upon under paragraph (f) of
this clause:
(1) For contract work performed before the
effective date of termination, the total
(without duplication of any items) of—
(i) The cost of this work;
(ii) The cost of settling and paying termination settlement proposals under terminated subcontracts that are properly chargeable to the terminated portion of the contract if not included in subdivision (g)(1)(i) of
this clause; and
(iii) A sum, as profit on subdivision (g)(1)(i)
of this clause, determined by the Contracting Officer under 49.202 of the Federal
Acquisition Regulation, in effect on the date
of this contract, to be fair and reasonable;
however, if it appears that the Contractor
would have sustained a loss on the entire
contract had it been completed, the Contracting Officer shall allow no profit under
this subdivision (iii) and shall reduce the settlement to reflect the indicated rate of loss.
(2) The reasonable costs of settlement of
the work terminated, including—
(i) Accounting, legal, clerical, and other
expenses reasonably necessary for the preparation of termination settlement proposals
and supporting data;
(ii) The termination and settlement of subcontracts (excluding the amounts of such
settlements); and
(iii) Storage, transportation, and other
costs incurred, reasonably necessary for the
preservation, protection, or disposition of
the termination inventory.

Alternate II (SEP 1996). If the contract is with an agency of the U.S.
Government or with State, local, or
foreign governments or their agencies,
and if the Contracting Officer determines that the requirement to pay interest on excess partial payments is inappropriate, delete subparagraph (m)(2)
of the basic clause.
Alternate III (SEP 1996). If the contract is for construction and with an
agency of the U.S. Government or with

State, local, or foreign governments or
their agencies, substitute the following
paragraph (g) for paragraph (g) of the
basic clause. Subparagraph (m)(2) may
be deleted from the basic clause if the
Contracting Officer determines that
the requirement to pay interest on excess partial payments is inappropriate.
(g) If the Contractor and Contracting Officer fail to agree on the whole amount to be
paid the Contractor because of the termination of work, the Contracting Officer shall
pay the Contractor the amounts determined
as follows, but without duplication of any
amounts agreed upon under paragraph (f) of
this clause:
(1) For contract work performed before the
effective date of termination, the total
(without duplication of any items) of—
(i) The cost of this work;
(ii) The cost of settling and paying termination settlement proposals under terminated subcontracts that are properly chargeable to the terminated portion of the contract if not included in subdivision (g)(1)(i) of
this clause; and
(iii) A sum, as profit on subdivision (g)(1)(i)
of this clause, determined by the Contracting Officer under 49.202 of the Federal
Acquisition Regulation, in effect on the date
of this contract, to be fair and reasonable;
however, if it appears that the Contractor
would have sustained a loss on the entire
contract had it been completed, the Contracting Officer shall allow no profit under
this subdivision (iii) and shall reduce the settlement to reflect the indicated rate of loss.
(2) The reasonable costs of settlement of
the work terminated, including—
(i) Accounting, legal, clerical, and other
expenses reasonably necessary for the preparation of termination settlement proposals
and supporting data;
(ii) The termination and settlement of subcontracts (excluding the amounts of such
settlements); and
(iii) Storage, transportation, and other
costs incurred, reasonably necessary for the
preservation, protection, or disposition of
the termination inventory.
[48 FR 42478, Sept. 19, 1983, as amended at 55
FR 38518, Sept. 18, 1990; 61 FR 31666, June 20,
1996; 61 FR 39222, July 26, 1996]

52.249–3 Termination for Convenience
of the Government (Dismantling,
Demolition, or Removal of Improvements).
As prescribed in 49.502(b)(2), insert
the following clause:

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52.249–3

TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (DISMANTLING, DEMOLITION, OR
REMOVAL OF IMPROVEMENTS) (SEP 1996)
(a) The Government may terminate performance of work under this contract, in
whole or, from time to time, in part if the
Contracting Officer determines that a termination is in the Government’s interest. The
Contracting Officer shall terminate by delivering to the Contractor a Notice of Termination specifying the extent of termination
and the effective date. Upon receipt of the
notice, if title to property is vested in the
Contractor under this contract, it shall
revest in the Government regardless of any
other clause of this contract, except for
property that the Contractor disposed of by
bona fide sale or removed from the site.
(b) After receipt of a Notice of Termination, and except as directed by the Contracting Officer, the Contractor shall immediately proceed with the following obligations, regardless of delay in determining or
adjusting any amounts due under this
clause:
(1) Stop work as specified in the notice.
(2) Place no further subcontracts or orders
(referred to as subcontracts in this clause)
for materials, services, or facilities, except
as necessary to complete the continued portion of the contract.
(3) Terminate all subcontracts to the extent they relate to the work terminated.
(4) Assign to the Government, as directed
by the Contracting Officer, all right, title,
and interest of the Contractor under the subcontracts terminated, in which case the Government shall have the right to settle or to
pay any termination settlement proposal
arising out of those terminations.
(5) With approval or ratification to the extent required by the Contracting Officer, settle all outstanding liabilities and termination settlement proposals arising from the
termination of subcontracts; the approval or
ratification will be final for purposes of this
clause.
(6) As directed by the Contracting Officer,
transfer title and deliver to the Government
(i) the fabricated or unfabricated parts, work
in process, completed work, supplies, and
other material produced or acquired for the
work terminated, and (ii) the completed or
partially completed plans, drawings, information, and other property that, if the contract has been completed, would be required
to be furnished to the Government.
(7) Complete performance of the work not
terminated.
(8) Take any action that may be necessary,
or that the Contracting Officer may direct,
for the protection and preservation of the
property related to this contract that is in
the possession of the Contractor and in
which the Government has or may acquire
an interest.

(9) Use its best efforts to sell, as directed
or authorized by the Contracting Officer, any
property of the types referred to in subparagraph (b)(6) of this clause; provided, however,
that the Contractor (i) is not required to extend credit to any purchaser and (ii) may acquire the property under the conditions prescribed by, and at prices approved by, the
Contracting Officer. The proceeds of any
transfer or disposition will be applied to reduce any payments to be made by the Government under this contract, credited to the
price or cost of the work, or paid in any
other manner directed by the Contracting
Officer.
(c) The Contractor shall submit complete
termination inventory schedules no later
than 120 days from the effective date of termination, unless extended in writing by the
Contracting Officer upon written request of
the Contractor within this 120-day period.
(d) After expiration of the plant clearance
period as defined in subpart 45.6 of the Federal Acquisition Regulation, the Contractor
may submit to the Contracting Officer a list,
certified as to quantity and quality, of termination inventory not previously disposed
of, excluding items authorized for disposition by the Contracting Officer. The Contractor may request the Government to remove those items or enter into an agreement
for their storage. Within 15 days, the Government will accept title to those items and remove them or enter into a storage agreement. The Contracting Officer may verify
the list upon removal of the items, or if
stored, within 45 days from submission of the
list, and shall correct the list, as necessary,
before final settlement.
(e) After termination, the Contractor shall
submit a final termination settlement proposal to the Contracting Officer in the form
and with the certification prescribed by the
Contracting Officer. The Contractor shall
submit the proposal promptly, but no later
than 1 year from the effective date of termination, unless extended in writing by the
Contracting Officer upon written request of
the Contractor within this 1-year period.
However, if the Contracting Officer determines that the facts justify it, a termination
settlement proposal may be received and
acted on after 1 year or any extension. If the
Contractor fails to submit the proposal within the time allowed, the Contracting Officer
may determine, on the basis of information
available, the amount, if any, due the Contractor because of the termination and shall
pay the amount determined.
(f) Subject to paragraph (e) of this clause,
the Contractor and the Contracting Officer
may agree upon the whole or any part of the
amount to be paid because of the termination. The amount may include a reasonable allowance for profit on work done. However, the agreed amount, whether under this
paragraph (f) or paragraph (g) of this clause,

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52.249–3

48 CFR Ch. 1 (10–1–03 Edition)

exclusive of settlement costs, may not exceed the total contract price as reduced by
(1) the amount of payments previously made
and (2) the contract price of work not terminated. The contract shall be amended and
the Contractor paid the agreed amount.
Paragraph (g) of this clause shall not limit,
restrict, or affect the amount that may be
agreed upon to be paid under this paragraph.
(g) If the Contractor and the Contracting
Officer fail to agree on the whole amount to
be paid because of the termination of work,
the Contracting Officer shall pay the Contractor the amounts determined by the Contracting Officer as follows, but without duplication of any amounts agreed on under
paragraph (f) of this clause:
(1) For contract work performed before the
effective date of termination, the total
(without duplication of any items) of—
(i) The cost of this work;
(ii) The cost of settling and paying termination settlement proposals under terminated subcontracts that are properly chargeable to the terminated portion of the contract, if not included in subdivision (g)(1)(i)
of this clause; and
(iii) A sum, as profit on subdivision (g)(1)(i)
of this clause, determined by the Contracting Officer under section 49.202 of the
Federal Acquisition Regulation, in effect on
the date of this contract, to be fair and reasonable; however, if it appears that the Contractor would have sustained a loss on the
entire contract had it been completed, the
Contracting Officer shall allow no profit
under this subdivision (iii) and shall reduce
the amount of the settlement to reflect the
indicated rate of loss.
(2) The reasonable costs of settlement of
the work terminated, including—
(i) Accounting, legal, clerical, and other
expenses reasonably necessary for the preparation of termination settlement proposals
and supporting data;
(ii) The termination and settlement of subcontracts (excluding the amounts of such
settlements); and
(iii) Preservation and protection of property under subparagraph (b)(8) of this clause.
(h) Except for normal spoilage, and except
to the extent that the Government expressly
assumed the risk of loss, the Contracting Officer shall exclude from the amounts payable
to the Contractor under paragraph (g) of this
clause, the fair value as determined by the
Contracting Officer, of property that is destroyed, lost, stolen, or damaged so as to become undeliverable to the Government or to
a buyer.
(i) The cost principles and procedures of
part 31 of the Federal Acquisition Regulation, in effect on the date of this contract,
shall govern all costs claimed, agreed to, or
determined under this clause.
(j) The Contractor shall have the right of
appeal, under the Disputes clause, from any

determination made by the Contracting Officer under paragraph (e), (g), or (l) of this
clause, except that if the Contractor failed
to submit the termination settlement proposal within the time provided in paragraph
(e) or (f) and failed to request a time extension, there is no right of appeal. If the Contracting Officer has made a determination of
the amount due under paragraph (e), (g), or
(l) of this clause, the Government shall pay
the Contractor (1) the amount determined by
the Contracting Officer, if there is no right
of appeal or if no timely appeal has been
taken, or (2) the amount finally determined
on an appeal.
(k) In arriving at the amount due the Contractor under this clause, there shall be deducted—
(1) All unliquidated advance or other payments to the Contractor under the terminated portion of this contract;
(2) Any claim which the Government has
against the Contractor under this contract;
and
(3) The agreed price for, or the proceeds of
sale of, materials, supplies, or other things
acquired by the Contractor or sold under the
provisions of this clause and not recovered
by or credited to the Government.
(l) If the termination is partial, the Contractor may file a proposal with the Contracting Officer for an equitable adjustment
of the price(s) of the continued portion of the
contract. The Contracting Officer shall make
any equitable adjustment agreed upon. Any
proposal by the Contractor for an equitable
adjustment under this clause shall be requested within 90 days from the effective
date of termination unless extended in writing by the Contracting Officer.
(m)(1) The Government may, under the
terms and conditions it prescribes, make
partial payments and payments against cost
incurred by the Contractor for the terminated portion of the contract, if the Contracting Officer believes the total of these
payments will not exceed the amount to
which the Contractor will be entitled.
(2) If the total payments exceed the
amount finally determined to be due, the
Contractor shall repay the excess to the Government upon demand, together with interest computed at the rate established by the
Secretary of the Treasury under 50 U.S.C.
App 1215(b)(2). Interest shall be computed for
the period from the date the excess payment
is received by the Contractor to the date the
excess is repaid. Interest shall not be
charged on any excess payment due to a reduction in the Contractor’s termination settlement proposal because of retention or
other disposition of termination inventory
until 10 days after the date of the retention
or disposition, or a later date determined by
the Contracting Officer because of the circumstances.

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52.249–5

(n) Unless otherwise provided in this contract or by statute, the Contractor shall
maintain all records and documents relating
to the terminated portion of this contract
for 3 years after final settlement. This includes all books and other evidence bearing
on the Contractor’s costs and expenses under
this contract. The Contractor shall make
these records and documents available to the
Government, at the Contractor’s office, at
all reasonable times, without any direct
charge. If approved by the Contracting Officer, photographs, microphotographs, or
other authentic reproductions may be maintained instead of original records and documents.

(End of clause)
Alternate I (SEP 1996). If the contract
is with an agency of the U.S. Government or with State, local, or foreign
governments or their agencies, and if
the contracting officer determines that
the requirement to pay interest on excess partial payments is inappropriate,
delete subparagraph (m)(2) from the
basic clause.
[48 FR 42478, Sept. 19, 1983, as amended at 61
FR 39222, July 26, 1996]

52.249–4 Termination for Convenience
of the Government (Services) (Short
Form).
As prescribed in 49.502(c), insert the
following clause in solicitations and
contracts for services, regardless of
value, when a fixed-price contract is
contemplated and the Contracting Officer determines that because of the kind
of services required, the successful offeror will not incur substantial charges
in preparation for and in carrying out
the contract, and would, if terminated
for the convenience of the Government,
limit termination settlement charges
to services rendered before the date of
termination:
TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (SERVICES) (SHORT FORM) (APR
1984)
The Contracting Officer, by written notice,
may terminate this contract, in whole or in
part, when it is in the Government’s interest. If this contract is terminated, the Government shall be liable only for payment
under the payment provisions of this contract for services rendered before the effective date of termination.

(End of clause)
52.249–5 Termination for Convenience
of the Government (Educational
and Other Nonprofit Institutions).
As prescribed in 49.502(d), insert the
following clause:
TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (EDUCATIONAL AND OTHER NONPROFIT INSTITUTIONS) (SEP 1996)
(a) The Government may terminate performance of work under this contract in
whole or, from time to time, in part if the
Contracting Officer determines that a termination is in the Government’s interest. The
Contracting Officer shall terminate by delivering to the Contractor a Notice of Termination specifying the extent of termination
and the effective date.
(b) After receipt of a Notice of Termination and except as directed by the Contracting Officer, the Contractor shall immediately proceed with the following obligations:
(1) Stop work as specified in the notice.
(2) Place no further subcontracts or orders
(referred to as subcontracts in this clause),
except as necessary to complete the continued portion of the contract.
(3) Terminate all applicable subcontracts
and cancel or divert applicable commitments
covering personal services that extend beyond the effective date of termination.
(4) Assign to the Government, as directed
by the Contracting Officer, all right, title,
and interest of the Contractor under the subcontracts terminated, in which case the Government shall have the right to settle or pay
any termination settlement proposal arising
out of those terminations.
(5) With approval or ratification to the extent required by the Contracting Officer, settle all outstanding liabilities and termination settlement proposals arising from the
termination of subcontracts; approval or
ratification will be final for purposes of this
clause.
(6) Transfer title (if not already transferred) and, as directed by the Contracting
Officer, deliver to the Government any information and items that, if the contract had
been completed, would have been required to
be furnished, including (i) materials or
equipment produced, in process, or acquired
for the work terminated and (ii) completed
or partially completed plans, drawings, and
information.
(7) Complete performance of the work not
terminated.
(8) Take any action that may be necessary,
or that the Contracting Officer may direct,
for the protection and preservation of the
property related to this contract that is in
the possession of the Contractor and in

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52.249–6

48 CFR Ch. 1 (10–1–03 Edition)

which the Government has or may acquire
an interest.
(9) Use its best efforts to sell, as directed
or authorized by the Contracting Officer, termination inventory other than that retained
by the Government under subparagraph
(b)(6) of this clause; provided, however, that
the Contractor (i) is not required to extend
credit to any purchaser and (ii) may acquire
the property under the conditions prescribed
by, and at prices approved by, the Contracting Officer. The proceeds of any transfer
or disposition will be applied to reduce any
payments to be made by the Government
under this contract, credited to the price or
cost of the work, or paid in any other manner directed by the Contracting Officer.
(c) The Contractor shall submit complete
termination inventory schedules no later
than 120 days from the effective date of termination, unless extended in writing by the
Contracting Officer upon written request of
the Contractor within this 120-day period.
(d) After termination, the Contractor shall
submit a final termination settlement proposal to the Contracting Officer in the form
and with the certification prescribed by the
Contracting Officer. The Contractor shall
submit the proposal promptly but no later
than 1 year from the effective date of termination unless extended in writing by the
Contracting Officer upon written request of
the Contractor within this 1-year period. If
the Contractor fails to submit the termination settlement proposal within the time
allowed, the Contracting Officer may determine, on the basis of information available,
the amount, if any, due the Contractor because of the termination and shall pay the
amount determined.
(e) Subject to paragraph (d) of this clause,
the Contractor and the Contracting Officer
may agree upon the whole or any part of the
amount to be paid because of the termination. This amount may include reasonable
cancellation charges incurred by the Contractor and any reasonable loss on outstanding commitments for personal services
that the Contractor is unable to cancel; provided, that the Contractor exercised reasonable diligence in diverting such commitments to other operations. The contract
shall be amended and the Contractor paid
the agreed amount.
(f) The cost principles and procedures in
subpart 31.3 of the Federal Acquisition Regulation (FAR), in effect on the date of the
contract, shall govern all costs claimed,
agreed to, or determined under this clause;
however, if the Contractor is not an educational institution, and is a nonprofit organization under Office of Management and
Budget (OMB) Circular A–122, Cost Principles
for Nonprofit Organizations, July 8, 1980, those
cost principles shall apply; provided, that if
the Contractor is a nonprofit institution listed in Attachment C of OMB Circular A–122,

the cost principles at FAR 31.2 for commercial organizations shall apply to such contractor.
(g) The Government may, under the terms
and conditions it prescribes, make partial
payments against costs incurred by the Contractor for the terminated portion of this
contract, if the Contracting Officer believes
the total of these payments will not exceed
the amount to which the Contractor will be
entitled.
(h) The Contractor has the right of appeal
as provided under the Disputes clause, except
that if the Contractor failed to submit the
termination settlement proposal within the
time provided in paragraph (d) of this clause
and failed to request a time extension, there
is no right of appeal.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 61
FR 39223, July 26, 1996]

52.249–6 Termination
bursement).

(Cost-Reim-

As prescribed in 49.503(a)(1), insert
the following clause:
TERMINATION (COST-REIMBURSEMENT) (SEP
1996)
(a) The Government may terminate performance of work under this contract in
whole or, from time to time, in part, if—
(1) The Contracting Officer determines
that a termination is in the Government’s
interest; or
(2) The Contractor defaults in performing
this contract and fails to cure the default
within 10 days (unless extended by the Contracting Officer) after receiving a notice
specifying the default. Default includes failure to make progress in the work so as to endanger performance.
(b) The Contracting Officer shall terminate
by delivering to the Contractor a Notice of
Termination specifying whether termination
is for default of the Contractor or for convenience of the Government, the extent of
termination, and the effective date. If, after
termination for default, it is determined
that the Contractor was not in default or
that the Contractor’s failure to perform or
to make progress in performance is due to
causes beyond the control and without the
fault or negligence of the Contractor as set
forth in the Excusable Delays clause, the
rights and obligations of the parties will be
the same as if the termination was for the
convenience of the Government.
(c) After receipt of a Notice of Termination, and except as directed by the Contracting Officer, the Contractor shall immediately proceed with the following obligations, regardless of any delay in determining

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or adjusting any amounts due under this
clause:
(1) Stop work as specified in the notice.
(2) Place no further subcontracts or orders
(referred to as subcontracts in this clause),
except as necessary to complete the continued portion of the contract.
(3) Terminate all subcontracts to the extent they relate to the work terminated.
(4) Assign to the Government, as directed
by the Contracting Officer, all right, title,
and interest of the Contractor under the subcontracts terminated, in which case the Government shall have the right to settle or to
pay any termination settlement proposal
arising out of those terminations.
(5) With approval or ratification to the extent required by the Contracting Officer, settle all outstanding liabilities and termination settlement proposals arising from the
termination of subcontracts, the cost of
which would be reimbursable in whole or in
part, under this contract; approval or ratification will be final for purposes of this
clause.
(6) Transfer title (if not already transferred) and, as directed by the Contracting
Officer, deliver to the Government (i) the
fabricated or unfabricated parts, work in
process, completed work, supplies, and other
material produced or acquired for the work
terminated, (ii) the completed or partially
completed plans, drawings, information, and
other property that, if the contract had been
completed, would be required to be furnished
to the Government, and (iii) the jigs, dies,
fixtures, and other special tools and tooling
acquired or manufactured for this contract,
the cost of which the Contractor has been or
will be reimbursed under this contract.
(7) Complete performance of the work not
terminated.
(8) Take any action that may be necessary,
or that the Contracting Officer may direct,
for the protection and preservation of the
property related to this contract that is in
the possession of the Contractor and in
which the Government has or may acquire
an interest.
(9) Use its best efforts to sell, as directed
or authorized by the Contracting Officer, any
property of the types referred to in subparagraph (c)(6) of this clause; provided, however,
that the Contractor (i) is not required to extend credit to any purchaser and (ii) may acquire the property under the conditions prescribed by, and at prices approved by, the
Contracting Officer. The proceeds of any
transfer or disposition will be applied to reduce any payments to be made by the Government under this contract, credited to the
price or cost of the work, or paid in any
other manner directed by the Contracting
Officer.
(d) The Contractor shall submit complete
termination inventory schedules no later
than 120 days from the effective date of ter-

mination, unless extended in writing by the
Contracting Officer upon written request of
the Contractor within this 120-day period.
(e) After expiration of the plant clearance
period as defined in subpart 45.6 of the Federal Acquisition Regulation, the Contractor
may submit to the Contracting Officer a list,
certified as to quantity and quality, of termination inventory not previously disposed
of, excluding items authorized for disposition by the Contracting Officer. The Contractor may request the Government to remove those items or enter into an agreement
for their storage. Within 15 days, the Government will accept the items and remove them
or enter into a storage agreement. The Contracting Officer may verify the list upon removal of the items, or if stored, within 45
days from submission of the list, and shall
correct the list, as necessary, before final
settlement.
(f) After termination, the Contractor shall
submit a final termination settlement proposal to the Contracting Officer in the form
and with the certification prescribed by the
Contracting Officer. The Contractor shall
submit the proposal promptly, but no later
than 1 year from the effective date of termination, unless extended in writing by the
Contracting Officer upon written request of
the Contractor within this 1-year period.
However, if the Contracting Officer determines that the facts justify it, a termination
settlement proposal may be received and
acted on after 1 year or any extension. If the
Contractor fails to submit the proposal within the time allowed, the Contracting Officer
may determine, on the basis of information
available, the amount, if any, due the Contractor because of the termination and shall
pay the amount determined.
(g) Subject to paragraph (f) of this clause,
the Contractor and the Contracting Officer
may agree on the whole or any part of the
amount to be paid (including an allowance
for fee) because of the termination. The contract shall be amended, and the Contractor
paid the agreed amount.
(h) If the Contractor and the Contracting
Officer fail to agree in whole or in part on
the amount of costs and/or fee to be paid because of the termination of work, the Contracting Officer shall determine, on the basis
of information available, the amount, if any,
due the Contractor, and shall pay that
amount, which shall include the following:
(1) All costs reimbursable under this contract, not previously paid, for the performance of this contract before the effective
date of the termination, and those costs that
may continue for a reasonable time with the
approval of or as directed by the Contracting
Officer; however, the Contractor shall discontinue these costs as rapidly as practicable.

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48 CFR Ch. 1 (10–1–03 Edition)

(2) The cost of settling and paying termination settlement proposals under terminated subcontracts that are properly chargeable to the terminated portion of the contract if not included in subparagraph (h)(1) of
this clause.
(3) The reasonable costs of settlement of
the work terminated, including—
(i) Accounting, legal, clerical, and other
expenses reasonably necessary for the preparation of termination settlement proposals
and supporting data;
(ii) The termination and settlement of subcontracts (excluding the amounts of such
settlements); and
(iii) Storage, transportation, and other
costs incurred, reasonably necessary for the
preservation, protection, or disposition of
the termination inventory. If the termination is for default, no amounts for the
preparation of the Contractor’s termination
settlement proposal may be included.
(4) A portion of the fee payable under the
contract, determined as follows:
(i) If the contract is terminated for the
convenience of the Government, the settlement shall include a percentage of the fee
equal to the percentage of completion of
work contemplated under the contract, but
excluding subcontract effort included in subcontractors’ termination proposals, less previous payments for fee.
(ii) If the contract is terminated for default, the total fee payable shall be such proportionate part of the fee as the total number of articles (or amount of services) delivered to and accepted by the Government is
to the total number of articles (or amount of
services) of a like kind required by the contract.
(5) If the settlement includes only fee, it
will be determined under subparagraph (h)(4)
of this clause.
(i) The cost principles and procedures in
part 31 of the Federal Acquisition Regulation, in effect on the date of this contract,
shall govern all costs claimed, agreed to, or
determined under this clause.
(j) The Contractor shall have the right of
appeal, under the Disputes clause, from any
determination made by the Contracting Officer under paragraph (f), (h), or (l) of this
clause, except that if the Contractor failed
to submit the termination settlement proposal within the time provided in paragraph
(f) and failed to request a time extension,
there is no right of appeal. If the Contracting
Officer has made a determination of the
amount due under paragraph (f), (h) or (l) of
this clause, the Government shall pay the
Contractor (1) the amount determined by the
Contracting Officer if there is no right of appeal or if no timely appeal has been taken, or
(2) the amount finally determined on an appeal.

(k) In arriving at the amount due the Contractor under this clause, there shall be deducted—
(1) All unliquidated advance or other payments to the Contractor, under the terminated portion of this contract;
(2) Any claim which the Government has
against the Contractor under this contract;
and
(3) The agreed price for, or the proceeds of
sale of materials, supplies, or other things
acquired by the Contractor or sold under this
clause and not recovered by or credited to
the Government.
(l) The Contractor and Contracting Officer
must agree to any equitable adjustment in
fee for the continued portion of the contract
when there is a partial termination. The
Contracting Officer shall amend the contract
to reflect the agreement.
(m)(1) The Government may, under the
terms and conditions it prescribes, make
partial payments and payments against
costs incurred by the Contractor for the terminated portion of the contract, if the Contracting Officer believes the total of these
payments will not exceed the amount to
which the Contractor will be entitled.
(2) If the total payments exceed the
amount finally determined to be due, the
Contractor shall repay the excess to the Government upon demand, together with interest computed at the rate established by the
Secretary of the Treasury under 50 U.S.C.
App. 1215(b)(2). Interest shall be computed
for the period from the date the excess payment is received by the Contractor to the
date the excess is repaid. Interest shall not
be charged on any excess payment due to a
reduction in the Contractor’s termination
settlement proposal because of retention or
other disposition of termination inventory
until 10 days after the date of the retention
or disposition, or a later date determined by
the Contracting Officer because of the circumstances.
(n) The provisions of this clause relating to
fee are inapplicable if this contract does not
include a fee.

(End of clause)
Alternate I (SEP 1996). If the contract
is for construction, substitute the following subparagraph (h)(4) for subparagraph (h)(4) of the basic clause:
(4) A portion of the fee payable under the
contract determined as follows:
(i) If the contract is terminated for the
convenience of the Government, the settlement shall include a percentage of the fee
equal to the percentage of completion of
work contemplated under the contract, but
excluding subcontract effort included in subcontractors’ termination settlement proposals, less previous payments for fee.

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52.249–6

(ii) If the contract is terminated for default, the total fee payable shall be such proportionate part of the fee as the actual work
in place is to the total work in place required by the contract.

Alternate II (SEP 1996). If the contract is with an agency of the U.S.
Government or with State, local, or
foreign governments or their agencies,
and if the contracting officer determines that the requirement to pay interest on excess partial payments is inappropriate, delete subparagraph (m)(2)
from the basic clause.
Alternate III (SEP 1996). If the contract is for construction with an agency of the U.S. Government or with
State, local, or foreign governments or
their agencies, the following subparagraph (h)(4) shall be substituted for
subparagraph (h)(4) of the basic clause.
Subparagraph (m)(2) may be deleted
from the basic clause if the contracting
officer determines that the requirement to pay interest on excess partial
payments is inappropriate.
(4) A portion of the fee payable under the
contract determined as follows:
(i) If the contract is terminated for the
convenience of the Government, the settlement shall include a percentage of the fee
equal to the percentage of completion of
work contemplated under the contract, but
excluding subcontract effort included in subcontractors’ termination settlement proposals, less previous payments for fee.
(ii) If the contract is terminated for default, the total fee payable shall be such proportionate part of the fee as the actual work
in place is to the total work in place required by the contract.

Alternate IV (SEP 1996). If the contract is a time-and-material or laborhour contract, substitute the following
paragraphs (h) and (l) for paragraphs
(h) and (l) of the basic clause:
(h) If the Contractor and the Contracting
Officer fail to agree in whole or in part on
the amount to be paid because of the termination of work, the Contracting Officer shall
determine, on the basis of information available, the amount, if any, due the Contractor
and shall pay the amount determined as follows:
(1) If the termination is for the convenience of the Government, include—
(i) An amount for direct labor hours (as defined in the Schedule of the contract) determined by multiplying the number of direct
labor hours expended before the effective
date of termination by the hourly rate(s) in

the Schedule, less any hourly rate payments
already made to the contractor;
(ii) An amount (computed under the provisions for payment of materials) for material
expenses incurred before the effective date of
termination, not previously paid to the Contractor;
(iii) An amount for labor and material expenses computed as if the expenses were incurred before the effective date of termination if they are reasonably incurred after
the effective date, with the approval of or as
directed by the Contracting Officer; however,
the Contractor shall discontinue these expenses as rapidly as practicable;
(iv) If not included in subdivision (h)(1)(i),
(ii), or (iii) above, the cost of settling and
paying termination settlement proposals
under terminated subcontracts that are
properly chargeable to the terminated portion of the contract; and
(v) The reasonable costs of settlement of
the work terminated, including—
(A) Accounting, legal, clerical, and other
expenses reasonably necessary for the preparation of termination settlement proposals
and supporting data;
(B) The termination and settlement of subcontracts (excluding the amounts of such
settlements); and
(C) Storage, transportation, and other
costs incurred, reasonably necessary for the
protection or disposition of the termination
inventory.
(2) If the termination is for default of the
Contractor, include the amounts computed
under subparagraph (h)(1) above but omit—
(i) Any amount for preparation of the Contractor’s termination settlement proposal;
and
(ii) The portion of the hourly rate allocable
to profit for any direct labor hours expended
in furnishing materials and services not delivered to and accepted by the Government.
(l) If the termination is partial, the Contractor may file with the Contracting Officer
a proposal for an equitable adjustment of the
price(s) for the continued portion of the contract. The Contracting Officer shall make
any equitable adjustment agreed upon. Any
proposal by the Contractor for an equitable
adjustment under this clause shall be requested within 90 days from the effective
date of termination, unless extended in writing by the Contracting Officer.

Alternate V (SEP 1996). If the contract
is a time-and-material or labor-hour
contract with an agency of the U.S.
Government or with State, local or foreign governments or their agencies,
substitute the following paragraphs (h)
and (l) for paragraphs (h) and (l) of the
basic clause. Subparagraph (m)(2) may
be deleted from the basic clause if the
contracting officer determines that the

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48 CFR Ch. 1 (10–1–03 Edition)

requirement to pay interest on excess
partial payments is inappropriate.
(h) If the Contractor and the Contracting
Officer fail to agree in whole or in part on
the amount to be paid because of the termination of work, the Contracting Officer shall
determine, on the basis of information available, the amount, if any, due the Contractor
and shall pay the amount determined as follows:
(1) If the termination is for the convenience of the Government, include—
(i) An amount for direct labor hours (as defined in the Schedule of the contract) determined by multiplying the number of direct
labor hours expended before the effective
date of termination by the hourly rate(s) in
the Schedule, less any hourly rate payments
already made to the Contractor;
(ii) An amount (computed under the provisions for payment of materials) for material
expenses incurred before the effective date of
termination, not previously paid to the Contractor;
(iii) An amount for labor and material expenses computed as if the expenses were incurred before the effective date of termination, if they are reasonably incurred after
the effective date with the approval of or as
directed by the Contracting Officer; however,
the Contractor shall discontinue these expenses as rapidly as practicable;
(iv) If not included in subdivision (h)(1)(i),
(ii), or (iii) above, the cost of settling and
paying termination settlement proposals
under terminated subcontracts that are
properly chargeable to the terminated portion of the contract; and
(v) The reasonable costs of settlement of
the work terminated, including—
(A) Accounting, legal, clerical, and other
expenses reasonably necessary for the preparation of termination settlement proposals
and supporting data;
(B) The termination and settlement of subcontracts (excluding the amounts of such
settlements); and
(C) Storage, transportation, and other
costs incurred, reasonably necessary for the
protection or disposition of the termination
inventory.
(2) If the termination is for default of the
Contractor, include the amounts computed
under subparagraph (h)(1) of this clause but
omit—
(i) Any amount for preparation of the Contractor’s termination settlement proposal;
and
(ii) The portion of the hourly rate allocable
to profit for any direct labor hours expended
in furnishing materials and services not delivered to and accepted by the Government.
(l) If the termination is partial, the Contractor may file with the Contracting Officer
a proposal for an equitable adjustment of the

price(s) for the continued portion of the contract. The Contracting Officer shall make
any equitable adjustment agreed upon. Any
proposal by the Contractor for an equitable
adjustment under this clause shall be requested within 90 days from the effective
date of termination, unless extended in writing by the Contracting Officer.
[48 FR 42478, Sept. 19, 1983, as amended at 51
FR 19717, May 30, 1986; 61 FR 39223, July 26,
1996]

52.249–7 Termination (Fixed-Price Architect-Engineer).
As prescribed in 49.503(b), insert the
following clause in solicitations and
contracts for architect-engineer services when a fixed-price contract is contemplated:
TERMINATION (FIXED-PRICE ARCHITECTENGINEER) (APR 1984)
(a) The Government may terminate this
contract in whole or, from time to time, in
part, for the Government’s convenience or
because of the failure of the Contractor to
fulfill the contract obligations. The Contracting Officer shall terminate by delivering to the Contractor a Notice of Termination specifying the nature, extent, and effective date of the termination. Upon receipt
of the notice, the Contractor shall (1) immediately discontinue all services affected (unless the notice directs otherwise), and (2) deliver to the Contracting Officer all data,
drawings, specifications, reports, estimates,
summaries, and other information and materials accumulated in performing this contract, whether completed or in process.
(b) If the termination is for the convenience of the Government, the Contracting Officer shall make an equitable adjustment in
the contract price but shall allow no anticipated profit on unperformed services.
(c) If the termination is for failure of the
Contractor to fulfill the contract obligations, the Government may complete the
work by contract or otherwise and the Contractor shall be liable for any additional cost
incurred by the Government.
(d) If, after termination for failure to fulfill contract obligations, it is determined
that the Contractor had not failed, the
rights and obligations of the parties shall be
the same as if the termination had been
issued for the convenience of the Government.
(e) The rights and remedies of the Government provided in this clause are in addition
to any other rights and remedies provided by
law or under this contract.

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(End of clause)
52.249–8 Default (Fixed-Price Supply
and Service).
As prescribed in 49.504(a)(1), insert
the following clause:
DEFAULT (FIXED-PRICE SUPPLY AND SERVICE)
(APR 1984)
(a)(1) The Government may, subject to
paragraphs (c) and (d) below, by written notice of default to the Contractor, terminate
this contract in whole or in part if the Contractor fails to—
(i) Deliver the supplies or to perform the
services within the time specified in this
contract or any extension;
(ii) Make progress, so as to endanger performance of this contract (but see subparagraph (a)(2) below); or
(iii) Perform any of the other provisions of
this contract (but see subparagraph (a)(2)
below).
(2) The Government’s right to terminate
this contract under subdivisions (1)(ii) and
(1)(iii) above, may be exercised if the Contractor does not cure such failure within 10
days (or more if authorized in writing by the
Contracting Officer) after receipt of the notice from the Contracting Officer specifying
the failure.
(b) If the Government terminates this contract in whole or in part, it may acquire,
under the terms and in the manner the Contracting Officer considers appropriate, supplies or services similar to those terminated,
and the Contractor will be liable to the Government for any excess costs for those supplies or services. However, the Contractor
shall continue the work not terminated.
(c) Except for defaults of subcontractors at
any tier, the Contractor shall not be liable
for any excess costs if the failure to perform
the contract arises from causes beyond the
control and without the fault or negligence
of the Contractor. Examples of such causes
include (1) acts of God or of the public
enemy, (2) acts of the Government in either
its sovereign or contractual capacity, (3)
fires, (4) floods, (5) epidemics, (6) quarantine
restrictions (7) strikes, (8) freight embargoes, and (9) unusually severe weather. In
each instance the failure to perform must be
beyond the control and without the fault or
negligence of the Contractor.
(d) If the failure to perform is caused by
the default of a subcontractor at any tier,
and if the cause of the default is 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 subcontracted supplies or services
were obtainable from other sources in sufficient time for the Contractor to meet the required delivery schedule.

(e) If this contract is terminated for default, the Government may require the Contractor to transfer title and deliver to the
Government, as directed by the Contracting
Officer, any (1) completed supplies, and (2)
partially completed supplies and materials,
parts, tools, dies, jigs, fixtures, plans, drawings, information, and contract rights (collectively referred to as manufacturing materials in this clause) that the Contractor has
specifically produced or acquired for the terminated portion of this contract. Upon direction of the Contracting Officer, the Contractor shall also protect and preserve property in its possession in which the Government has an interest.
(f) The Government shall pay contract
price for completed supplies delivered and
accepted. The Contractor and Contracting
Officer shall agree on the amount of payment for manufacturing materials delivered
and accepted and for the protection and preservation of the property. Failure to agree
will be a dispute under the Disputes clause.
The Government may withhold from these
amounts any sum the Contracting Officer determines to be necessary to protect the Government against loss because of outstanding
liens or claims of former lien holders.
(g) If, after termination, 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 termination had been issued
for the convenience of the Government.
(h) The rights and remedies of the Government in this clause are in addition to any
other rights and remedies provided by law or
under this contract.

(End of clause)
Alternate I (APR 1984). If the contract
is for transportation or transportationrelated services, delete paragraph (f) of
the basic clause, redesignate the remaining paragraphs accordingly, and
substitute the following paragraphs (a)
and (e) for paragraphs (a) and (e) of the
basic clause:
(a)(1) The Government may, subject to
paragraphs (c) and (d) below, by written notice of default to the Contractor, terminate
this contract in whole or in part if the Contractor fails to—
(i) Pick up the commodities or to perform
the services, including delivery services,
within the time specified in this contract or
any extension;
(ii) Make progress, so as to endanger performance of this contract (but see subparagraph (a)(2) below); or
(iii) Perform any of the other provisions of
this contract (but see subparagraph (a)(2)
below).

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48 CFR Ch. 1 (10–1–03 Edition)

(2) The Government’s right to terminate
this contract under subdivisions (1)(ii) and
(1)(iii) above, may be exercised if the Contractor does not cure such failure within 10
days (or more if authorized in writing by the
Contracting Officer) after receipt of the notice from the Contracting Officer specifying
the failure.
(e) If this contract is terminated while the
Contractor has possession of Government
goods, the Contractor shall, upon direction
of the Contracting Officer, protect and preserve the goods until surrendered to the Government or its agent. The Contractor and
Contracting Officer shall agree on payment
for the preservation and protection of goods.
Failure to agree on an amount will be a dispute under the Disputes clause.
[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34762, July 3, 1995]

52.249–9 Default
(Fixed-Price
Research and Development).
As prescribed in 49.504(b), insert the
following clause:
DEFAULT (FIXED-PRICE RESEARCH AND
DEVELOPMENT) (APR 1984)
(a)(1) The Government may, subject to
paragraphs (c) and (d) below, by written Notice of Default to the Contractor, terminate
this contract in whole or in part if the Contractor fails to—
(i) Perform the work under the contract
within the time specified in this contract or
any extension;
(ii) Prosecute the work so as to endanger
performance of this contract (but see subparagraph (a)(2) below); or
(iii) Perform any of the other provisions of
this contract (but see subparagraph (a)(2)
below).
(2) The Government’s right to terminate
this contract under subdivisions (1)(ii) and
(1)(iii) of this paragraph may be exercised if
the Contractor does not cure such failure
within 10 days (or more, if authorized in
writing by the Contracting Officer) after receipt of the notice from the Contracting Officer specifying the failure.
(b) If the Government terminates this contract in whole or in part, it may acquire,
under the terms and in the manner the Contracting Officer considers appropriate, work
similar to the work terminated, and the Contractor will be liable to the Government for
any excess costs for the similar work. However, the Contractor shall continue the work
not terminated.
(c) Except for defaults of subcontractors at
any tier, the Contractor shall not be liable
for any excess costs if the failure to perform
the contract arises from causes beyond the
control and without the fault or negliqence
of the Contractor. Examples of such causes

include (1) acts of God or of the public
enemy, (2) acts of the Government in either
its sovereign or contractual capacity, (3)
fires, (4) floods, (5) epidemics, (6) quarantine
restrictions, (7) strikes, (8) freight embargoes, and (9) unusually severe weather. In
each instance the failure to perform must be
beyond the control and without the fault or
negligence of the Contractor.
(d) If the failure to perform is caused by
the default of a subcontractor at any tier,
and if the cause of the default is 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 subcontracted supplies or services
were obtainable from other sources in sufficient time for the Contractor to meet the required delivery schedule or other performance requirements.
(e) If this contract is terminated for default, the Government may require the Contractor to transfer title and deliver to the
Government, as directed by the Contracting
Officer, any (1) completed or partially completed work not previously delivered to, and
accepted by, the Government and (2) other
property, including contract rights, specifically produced or acquired for the terminated portion of this contract. Upon direction of the Contracting Officer, the Contractor shall also protect and preserve property in its possession in which the Government has an interest.
(f) The Government shall pay the contract
price, if separately stated, for completed
work it has accepted and the amount agreed
upon by the Contractor and the Contracting
Officer for (1) completed work for which no
separate price is stated, (2) partially completed work, (3) other property described
above that it accepts, and (4) the protection
and preservation of the property. Failure to
agree will be a dispute under the Disputes
clause. The Government may withhold from
these amounts any sum the Contracting Officer determines to be necessary to protect the
Government against loss from outstanding
liens or claims of former lien holders.
(g) If, after termination, 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 termination had been issued
for the convenience of the Government.
(h) The rights and remedies of the Government in this clause 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 60
FR 34762, July 3, 1995]

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52.249–10 Default (Fixed-Price Construction).
As prescribed in 49.504(c)(1), insert
the following clause:
DEFAULT (FIXED-PRICE CONSTRUCTION) (APR
1984)
(a) If the Contractor refuses or fails to
prosecute the work or any separable part,
with the diligence that will insure its completion within the time specified in this contract including any extension, or fails to
complete the work within this time, the
Government may, by written notice to the
Contractor, terminate the right to proceed
with the work (or the separable part of the
work) that has been delayed. In this event,
the Government may take over the work and
complete it by contract or otherwise, and
may take possession of and use any materials, appliances, and plant on the work site
necessary for completing the work. The Contractor and its sureties shall be liable for
any damage to the Government resulting
from the Contractor’s refusal or failure to
complete the work within the specified time,
whether or not the Contractor’s right to proceed with the work is terminated. This liability includes any increased costs incurred
by the Government in completing the work.
(b) The Contractor’s right to proceed shall
not be terminated nor the Contractor
charged with damages under this clause, if—
(1) The delay in completing the work arises
from unforeseeable causes beyond the control and without the fault or negligence of
the Contractor. Examples of such causes include (i) acts of God or of the public enemy,
(ii) acts of the Government in either its sovereign or contractual capacity, (iii) acts of
another Contractor in the performance of a
contract with the Government, (iv) fires, (v)
floods, (vi) epidemics, (vii) quarantine restrictions, (viii) strikes, (ix) freight embargoes, (x) unusually severe weather, or (xi)
delays of subcontractors or suppliers at any
tier arising from unforeseeable causes beyond the control and without the fault or
negligence of both the Contractor and the
subcontractors or suppliers; and
(2) The Contractor, within 10 days from the
beginning of any delay (unless extended by
the Contracting Officer), notifies the Contracting Officer in writing of the causes of
delay. The Contracting Officer shall ascertain the facts and the extent of delay. If, in
the judgment of the Contracting Officer, the
findings of fact warrant such action, the
time for completing the work shall be extended. The findings of the Contracting Officer shall be final and conclusive on the parties, but subject to appeal under the Disputes clause.
(c) If, after termination of the Contractor’s
right to proceed, it is determined that the
Contractor was not in default, or that the

delay was excusable, the rights and obligations of the parties will be the same as if the
termination had been issued for the convenience of the Government.
(d) The rights and remedies of the Government in this clause are in addition to any
other rights and remedies provided by law or
under this contract.

(End of clause)
Alternate I (APR 1984). If the contract
is for dismantling, demolition, or removal of improvements, substitute the
following paragraph (a) for paragraph
(a) of the basic clause:
(a)(1) If the Contractor refuses or fails to
prosecute the work, or any separable part,
with the diligence that will insure its completion within the time specified in this contract, including any extension, or fails to
complete the work within this time, the
Government may, by written notice to the
Contractor, terminate the right to proceed
with the work or the part of the work that
has been delayed. In this event, the Government may take over the work and complete
it by contract or otherwise, and may take
possession of and use any materials, appliances, and plant on the work site necessary
for completing the work.
(2) If title to property is vested in the Contractor under this contract, it shall revest in
the Government regardless of any other
clause of this contract, except for property
that the Contractor has disposed of by bona
fide sale or removed from the site.
(3) The Contractor and its sureties shall be
liable for any damage to the Government resulting from the Contractor’s refusal or failure to complete the work within the specified time, whether or not the Contractor’s
right to proceed with the work is terminated. This liability includes any increased
costs incurred by the Government in completing the work.

Alternate II (APR 1984). If the contract is to be awarded during a period
of national emergency, subparagraph
(b)(1) below may be substituted for subparagraph (b)(1) of the basic clause:
(1) The delay in completing the work arises
from causes other than normal weather beyond the control and without the fault or
negligence of the Contractor. Examples of
such causes include (i) acts of God or of the
public enemy, (ii) acts of the Government in
either its sovereign or contractual capacity,
(iii) acts of another Contractor in the performance of a contract with the Government, (iv) fires, (v) floods, (vi) epidemics,
(vii) quarantine restrictions, (viii) strikes,
(ix) freight embargoes, (x) unusually severe
weather, or (xi) delays of subcontractors or

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48 CFR Ch. 1 (10–1–03 Edition)

suppliers at any tier arising from causes
other than normal weather beyond the control and without the fault or negligence of
both the Contractor and the subcontractors
or suppliers; and

both the Contractor and the subcontractors
or suppliers; and

Alternate III (APR 1984). If the contract is for dismantling, demolition, or
removal of improvements and is to be
awarded during a period of national
emergency, substitute the following
paragraph (a) for paragraph (a) of the
basic clause. The following subparagraph (b)(1) may be substituted for subparagraph (b)(1) of the basic clause:

52.249–11 Termination of Work (Consolidated Facilities or Facilities Acquisition).

(a)(1) If the Contractor refuses or fails to
prosecute the work, or any separable part,
with the diligence that will insure its completion within the time specified in this contract, including any extension, or fails to
complete the work within this time, the
Government may, by written notice to the
Contractor, terminate the right to proceed
with the work or the part of the work that
has been delayed. In this event, the Government may take over the work and complete
it by contract or otherwise, and may take
possession of and use any materials, appliances, and plant on the work site necessary
for completing the work.
(2) If title to property is vested in the Contractor under this contract, it shall revest in
the Government regardless of any other
clause of this contract, except for property
that the Contractor has disposed of by bona
fide sale or removed from the site.
(3) The Contractor and its sureties shall be
liable for any damage to the Government resulting from the Contractor’s refusal or failure to complete the work within the specified time, whether or not the Contractor’s
right to proceed with the work is terminated. This liability includes any increased
costs incurred by the Government in completing the work.
(b) The Contractor’s right to proceed shall
not be terminated nor the Contractor
charged with damages under this this clause,
if—
(1) The delay in completing the work arises
from causes other than normal weather beyond the control and without the fault or
negligence of the Contractor. Examples of
such causes include (i) acts of God or of the
public enemy, (ii) acts of the Government in
either its sovereign or contractual capacity,
(iii) acts of another Contractor in the performance of a contract with the Government, (iv) fires, (v) floods, (vi) epidemics,
(vii) quarantine restrictions, (viii) strikes,
(ix) freight embargoes, (x) unusually severe
weather, or (xi) delays of subcontractors or
suppliers at any tier arising from causes
other than normal weather beyond the control and without the fault or negligence of

[48 FR 42478, Sept. 19, 1983, as amended at 60
FR 34762, July 3, 1995]

As prescribed in 49.505(a), insert the
following clause:
TERMINATION OF WORK (CONSOLIDATED FACILITIES OR FACILITIES ACQUISITION) (SEP 1996)
(a) The Government may terminate performance of work under this contract in
whole, or from time to time, in part if the
Contracting Officer determines that a termination is in the Government’s interest. The
Contracting Officer shall terminate by delivering to the Contractor a Notice of Termination specifying the extent of termination
and the effective date.
(b) After receipt of a Notice of Termination, and except as directed by the Contracting Officer, the Contractor shall immediately proceed with the following obligations regardless of any delay in determining
any item of reimbursable cost under this
clause:
(1) Stop work as specified in the notice.
(2) Place no further subcontracts or orders
(referred to as subcontracts in this clause)
for materials, services, or facilities, except
as necessary to complete the continued portion of the contract.
(3) Terminate all subcontracts to the extent they relate to the work terminated.
(4) Assign to the Government, as directed
by the Contracting Officer, all right, title,
and interest of the Contractor under the subcontracts terminated, in which case the Government shall have the right to settle or pay
any termination settlement proposal arising
out of those terminations.
(5) With the approval or ratification to the
extent required by the Contracting Officer,
settle all outstanding liabilities and termination settlement proposals arising from the
termination of subcontracts, the cost of
which would be reimbursable in whole or in
part under this contract; the approval or
ratification will be final for purposes of this
clause.
(6) Transfer title (if not already transferred) and, as directed by the Contracting
Officer, deliver to the Government (i) the
fabricated or unfabricated parts, work in
process, completed work, supplies, and other
material produced or acquired for the work
terminated, and (ii) the completed or partially completed plans, drawings, information, and other property that, if the contract
had been completed, would be required to be
furnished to the Government.

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(7) Complete performance of the work not
terminated.
(8) Take any action that may be necessary,
or that the Contracting Officer may direct,
for the protection and preservation of the
property related to this contract that is in
the possession of the Contractor and in
which the Government has or may acquire
an interest.
(9) Use its best efforts to sell, as directed
or authorized by the Contracting Officer, any
property of the types referred to in subparagraph (b)(6) of this clause; provided, however,
that the Contractor (i) is not required to extend credit to any purchaser and (ii) may acquire the property under the conditions prescribed by, and at prices approved by, the
Contracting Officer. The proceeds of any
transfer or disposition will be applied to reduce any payments to be made by the Government under this contract, credited to the
price or cost of the work, or paid in any
other manner directed by the Contracting
Officer.
(c) The Contractor shall submit complete
termination inventory schedules no later
than 120 days from the effective date of termination, unless extended in writing by the
Contracting Officer upon written request of
the Contractor within this 120-day period.
(d) After expiration of the plant clearance
period as defined in subpart 45.6 of the Federal Acquisition Regulation, the Contractor
may submit a list, to the Contracting Officer
certified as to quantity and quality, of termination inventory not previously disposed
of, excluding items authorized for disposition by the Contracting Officer. The Contractor may request the Government to remove these items or enter into an agreement
for their storage. Within 15 days, the Government shall accept the items and remove
them or enter into a storage agreement. The
Contracting Officer may verify the list upon
removal of the items or, if stored, within 45
days from submission of the list, and shall
correct the list, as necessary, before final
settlement.
(e) After termination, the Contractor shall
submit a final termination settlement proposal to the Contracting Officer in the form
and with the certification prescribed by the
Contracting Officer. The Contractor shall
submit the proposal promptly, but no later
than 1 year from the effective date of termination, unless extended in writing by the
Contracting Officer upon written request of
the Contractor within this 1-year period.
However, if the Contracting Officer determines that the facts justify it, a termination
settlement proposal may be received and
acted on after 1 year or any extension. If the
Contractor fails to submit the proposal within the time allowed, the Contracting Officer
may determine, on the basis of information
available, the amount, if any, due the Con-

tractor because of the termination and shall
pay that amount.
(f) Subject to paragraph (e) of this clause,
the Contractor and the Contracting Officer
may agree on the whole or any part of the
amount to be paid because of the termination. The contract shall be amended, and
the Contractor paid the agreed amount.
(g) If the Contractor and the Contracting
Officer fail to agree on the whole amount of
costs to be paid because of the termination
of work, the Contracting Officer shall determine, on the basis of information available,
the amount, if any, due the Contractor, and
shall pay the amount, determined as follows:
(1) All costs reimbursable under this contract, not previously paid, for the performance of this contract before the effective
date of the termination, and part of those
costs that may continue for a reasonable
time with the approval of or as directed by
the Contracting Officer; however, the Contractor shall discontinue those costs as rapidly as practicable.
(2) The cost of settling and paying termination settlement proposals under terminated subcontracts that are properly chargeable to the terminated portion of the contract, if not included in subparagraph (g)(1)
of this clause.
(3) The reasonable costs of settlement of
the work terminated, including—
(i) Accounting, legal, clerical, and other
expenses reasonably necessary for the preparation of termination settlement proposals
and supporting data;
(ii) The termination and settlement of subcontracts; and
(iii) Storage, transportation, and other
costs incurred, reasonably necessary for the
preservation, protection, or disposition of
the termination inventory.
(h) The cost principles and procedures in
part 31 of the Federal Acquisition Regulation, in effect on the date of this contract,
shall govern all costs claimed, agreed to, or
determined under this clause.
(i) The Contractor shall have the right of
appeal, under the Disputes clause, from any
determination made by the Contracting Officer under paragraph (e) or (g) of this clause,
except that if the Contractor failed to submit the termination settlement proposal
within the time provided in paragraph (e) of
this clause, and failed to request a time extension, there is no right of appeal. If the
Contracting Officer has made a determination of the amount due under paragraph (e)
or (g) of this clause, the Government shall
pay the Contractor (1) the amount determined by the Contracting Officer if there is
no right of appeal or if no timely appeal has
been taken, or (2) the amount finally determined on an appeal.
(j) In arriving at the amount due the Contractor under this clause, there shall be deducted—

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48 CFR Ch. 1 (10–1–03 Edition)

(1) All unliquidated advance or other payments to the Contractor, under the terminated portion of this contract;
(2) Any claim which the Government has
against the Contractor under this contract;
and
(3) The agreed price for, or the proceeds of
sale of materials, supplies, or other things
acquired by the Contractor or sold under this
clause and not recovered by or credited to
the Government.
(k)(1) The Government may, under the
terms and conditions it prescribes, make
partial payments and payments against
costs incurred by the Contractor for the terminated portion of the contract, if the Contracting Officer believes the total of these
payments will not exceed the amount to
which the Contractor will be entitled.
(2) If the total payments exceed the
amount finally determined to be due, the
Contractor shall repay the excess to the Government upon demand, together with interest computed at the rate established by the
Secretary of the Treasury under 50 U.S.C.
App. 1215(b)(2). Interest shall be computed
for the period from the date the excess payment is received by the Contractor to the
date the excess is repaid. Interest shall not
be charged on any excess payment due to a
reduction in the Contractor’s termination
settlement proposal because of retention or
other disposition of termination inventory
until 10 days after the date of the retention
or disposition, or a later date determined by
the Contracting Officer because of the circumstances.
(l) Any related contract of the Contractor
may be equitably adjusted if it provides for
such an adjustment and if it is affected by a
Notice of Termination under this clause. The
Government shall not be liable to the Contractor for damages or loss of profits because
of any Notice of Termination issued under
this clause.

(End of clause)
Alternate I (SEP 1996). If the contract
is with an agency of the U.S. Government or with State, local, or foreign
governments or their agencies, and if
the contracting officer determines that
the requirement to pay interest on excess partial payments is inappropriate,
delete subparagraph (k)(2) from the
basic clause.
[48 FR 42478, Sept. 19, 1983, as amended at 61
FR 39224, July 26, 1996]

52.249–12
ices).

Termination (Personal Serv-

As prescribed in 49.505(b), insert the
following clause in solicitations and

contracts for personal services (see
part 37):
TERMINATION (PERSONAL SERVICES) (APR
1984)
The Government may terminate this contract at any time upon at least 15 days’ written notice by the Contracting Officer to the
Contractor. The Contractor, with the written
consent of the Contracting Officer, may terminate this contract upon at least 15 days’
written notice to the Contracting Officer.

(End of clause)
52.249–13

Failure to Perform.

As prescribed in 49.505(c), insert the
following clause in facilities contracts
except facilities use contracts with
nonprofit educational institutions:
FAILURE TO PERFORM (APR 1984)
(a) Subject to the Excusable Delays clause
(if included in this contract), if the Contractor fails to perform this contract under
its terms, the Contracting Officer shall give
the Contractor written notice stating the
failure. Thereafter, regardless of any other
provision of this contract, the Contractor
shall not be entitled to an equitable adjustment under either this contract or any related contract, to the extent the equitable
adjustment arises from the Contractor’s failure to perform or from any reasonable remedial action taken by the Contracting Officer
based upon the failure.
(b) The failure of the Government to insist,
in one or more instances, upon the performance of any term of this contract is not a
waiver of the Government’s right to future
performance of such term, and the Contractor’s obligation for future performance of
such term shall continue in effect.
(c) The rights and remedies of the Government in this clause are in addition to any
other rights and remedies provided by law or
under this contract.

(End of clause)
52.249–14

Excusable Delays.

As prescribed in 49.505(d), insert the
following clause in solicitations and
contracts for supplies, services, construction, and research and development on a fee basis whenever a cost-reimbursement contract is contemplated.
Also insert the clause in time-and-material contracts, labor-hour contracts,
consolidated facilities contracts, and
facilities acquisition contracts. When

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Federal Acquisition Regulation

52.250–1

used in construction contracts, substitute the words completion time for delivery schedule in the last sentence of
the clause. When used in facilities contracts, substitute the words termination
of work for termination in the last sentence of the clause.
EXCUSABLE DELAYS (APR 1984)
(a) Except for defaults of subcontractors at
any tier, the Contractor shall not be in default because of any failure to perform this
contract under its terms if the failure arises
from causes beyond the control and without
the fault or negligence of the Contractor. Examples of these causes are (1) acts of God or
of the public enemy, (2) acts of the Government in either its sovereign or contractual
capacity, (3) fires, (4) floods, (5) epidemics,
(6) quarantine restrictions, (7) strikes, (8)
freight embargoes, and (9) unusually severe
weather. In each instance, the failure to perform must be beyond the control and without the fault or negligence of the Contractor.
Default includes failure to make progress in
the work so as to endanger performance.
(b) If the failure to perform is caused by
the failure of a subcontractor at any tier to
perform or make progress, and if the cause of
the failure was beyond the control of both
the Contractor and subcontractor, and without the fault or negligence of either, the
Contractor shall not be deemed to be in default, unless—
(1) The subcontracted supplies or services
were obtainable from other sources;
(2) The Contracting Officer ordered the
Contractor in writing to purchase these supplies or services from the other source; and
(3) The Contractor failed to comply reasonably with this order.
(c) Upon request of the Contractor, the
Contracting Officer shall ascertain the facts
and extent of the failure. If the Contracting
Officer determines that any failure to perform results from one or more of the causes
above, the delivery schedule shall be revised,
subject to the rights of the Government
under the termination clause of this contract.

(End of clause)
52.250–1 Indemnification Under Public
Law 85–804.
As prescribed in 50.403–3, insert the
following clause in contracts whenever
the approving official determines that
the contractor shall be indemnified
against unusually hazardous or nuclear
risks (also see 50.403–2(c)):

INDEMNIFICATION UNDER PUBLIC LAW 85–804
(APR 1984)
(a) Contractor’s principal officials, as used in
this clause, means directors, officers, managers, superintendents, or other representatives supervising or directing—
(1) All or substantially all of the Contractor’s business;
(2) All or substantially all of the Contractor’s operations at any one plant or separate
location in which this contract is being performed; or
(3) A separate and complete major industrial operation in connection with the performance of this contract.
(b) Under Pub. L. 85–804 (50 U.S.C 1431–1435)
and Executive Order 10789, as amended, and
regardless of any other provisions of this
contract, the Government shall, subject to
the limitations contained in the other paragraphs of this clause, indemnify the Contractor against—
(1) Claims (including reasonable expenses
of litigation or settlement) by third persons
(including employees of the Contractor) for
death; personal injury; or loss of, damage to,
or loss of use of property;
(2) Loss of, damage to, or loss of use of
Contractor property, excluding loss of profit;
and
(3) Loss of, damage to, or loss of use of
Government property, excluding loss of profit.
(c) This indemnification applies only to
the extent that the claim, loss, or damage (1)
arises out of or results from a risk defined in
this contract as unusually hazardous or nuclear and (2) is not compensated for by insurance or otherwise. Any such claim, loss, or
damage, to the extent that it is within the
deductible amounts of the Contractor’s insurance, is not covered under this clause. If
insurance coverage or other financial protection in effect on the date the approving official authorizes use of this clause is reduced,
the Government’s liability under this clause
shall not increase as a result.
(d) When the claim, loss, or damage is
caused by willful misconduct or lack of good
faith on the part of any of the Contractor’s
principal officials, the Contractor shall not
be indemnified for—
(1) Government claims against the Contractor (other than those arising through
subrogation); or
(2) Loss or damage affecting the Contractor’s property.
(e) With the Contracting Officer’s prior
written approval, the Contractor may, in
any subcontract under this contract, indemnify the subcontractor against any risk defined in this contract as unusually hazardous
or nuclear. This indemnification shall provide, between the Contractor and the subcontractor, the same rights and duties, and the

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52.251–1

48 CFR Ch. 1 (10–1–03 Edition)

same provisions for notice, furnishing of evidence or proof, and Government settlement
or defense of claims as this clause provides.
The Contracting Officer may also approve indemnification of subcontractors at any lower
tier, under the same terms and conditions.
The Government shall indemnify the Contractor against liability to subcontractors
incurred under subcontract provisions approved by the Contracting Officer.
(f) The rights and obligations of the parties
under this clause shall survive this contract’s termination, expiration, or completion. The Government shall make no payment under this clause unless the agency
head determines that the amount is just and
reasonable. The Government may pay the
Contractor or subcontractors, or may directly pay parties to whom the Contractor or
subcontractors may be liable.
(g) The Contractor shall—
(1) Promptly notify the Contracting Officer
of any claim or action against, or any loss
by, the Contractor or any subcontractors
that may reasonably be expected to involve
indemnification under this clause;
(2) Immediately furnish to the Government
copies of all pertinent papers the Contractor
receives;
(3) Furnish evidence or proof of any claim,
loss, or damage covered by this clause in the
manner and form the Government requires;
and
(4) Comply with the Government’s directions and execute any authorizations required in connection with settlement or defense of claims or actions.
(h) The Government may direct, control,
or assist in settling or defending any claim
or action that may involve indemnification
under this clause.

(End of clause)
Alternate I (APR 1984). In cost-reimbursement contracts, add the following
paragraph (i) to the basic clause:
(i) The cost of insurance (including self-insurance programs) covering a risk defined in
this contract as unusually hazardous or nuclear shall not be reimbursed except to the
extent that the Contracting Officer has required or approved this insurance. The Government’s obligations under this clause are—
(1) Excepted from the release required
under this contract’s clause relating to allowable cost; and
(2) Not affected by this contract’s Limitation of Cost or Limitation of Funds clause.

52.251–1 Government Supply Sources.
As prescribed in 51.107, insert the following clause in solicitations and contracts when the contracting officer
may authorize the contractor to ac-

quire supplies or services from a Government supply source:
GOVERNMENT SUPPLY SOURCES (APR 1984)
The Contracting Officer may issue the Contractor an authorization to use Government
supply sources in the performance of this
contract. Title to all property acquired by
the Contractor under such an authorization
shall vest in the Government unless otherwise specified in the contract. Such property
shall not be considered to be Government-furnished property, as distinguished from Government property. The provisions of the clause
entitled Government Property, except its paragraphs (a) and (b), shall apply to all property
acquired under such authorization.

(End of clause)
Alternate I (APR 1984) If a facilities
contract is contemplated, delete the
last sentence from the basic clause.
52.251–2 Interagency Fleet Management System Vehicles and Related
Services.
As prescribed in 51.205, insert the following clause:
INTERAGENCY FLEET MANAGEMENT SYSTEM
VEHICLES AND RELATED SERVICES (JAN 1991)
The Contracting Officer may issue the Contractor an authorization to obtain interagency fleet management system vehicles
and related services for use in the performance of this contract. The use, service, and
maintenance of interagency fleet management system vehicles and the use of related
services by the Contractor shall be in accordance with 41 CFR 101–39 and 41 CFR 101–
38.301–1.

(End of clause)
[48 FR 42478, Sept. 19, 1983, as amended at 54
FR 29284, July 11, 1989; 55 FR 52800, Dec. 21,
1990]

52.252–1 Solicitation Provisions Incorporated by Reference.
As prescribed in 52.107(a), insert the
following provision:
SOLICITATION PROVISIONS INCORPORATED BY
REFERENCE (FEB 1998)
This solicitation incorporates one or more
solicitation provisions 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. The
offeror is cautioned that the listed provisions may include blocks that must be completed by the offeror and submitted with its

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Federal Acquisition Regulation

52.252–6

quotation or offer. In lieu of submitting the
full text of those provisions, the offeror may
identify the provision by paragraph identifier and provide the appropriate information
with its quotation or offer. Also, the full text
of a solicitation provision may be accessed
electronically at this/these address(es):
llllllllllllllllllllllll
llllllllllllllllllllllll
[Insert one or more Internet addresses]

for any clause authorized for use with
a deviation. Include clear identification of what is being altered.
ALTERATIONS IN CONTRACT (APR 1984)
Portions of this contract are altered as follows:

(End of clause)
52.252–5 Authorized Deviations in Provisions.

(End of provision)
[62 FR 64928, Dec. 9, 1997]

52.252–2 Clauses Incorporated by Reference.
As prescribed in 52.107(b), insert the
following clause:
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):
llllllllllllllllllllllll
llllllllllllllllllllllll
[Insert one or more Internet addresses]

(End of clause)
[62 FR 64929, Dec. 9, 1997]

52.252–3 Alterations in Solicitation.
As prescribed in 52.107(c), insert the
following provision 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. Include
clear identification of what is being altered.
ALTERATIONS IN SOLICITATION (APR 1984)
Portions of this solicitation are altered as
follows:

(End of provision)
52.252–4 Alterations in Contract.
As prescribed in 52.107(d), insert the
following clause in solicitations and
contracts in order to revise or supplement, as necessary, other parts of the
contract, or parts of the solicitation
that apply after contract award, except

As prescribed in 52.107(e), insert the
following provision 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.
AUTHORIZED DEVIATIONS IN PROVISIONS (APR
1984)
(a) The use in this solicitation of any Federal Acquisition Regulation (48 CFR chapter
1) provision with an authorized deviation is
indicated by the addition of (DEVIATION)
after the date of the provision.
(b) The use in this solicitation of any ll
[insert regulation name] (48 CFR chapter l)
provision with an authorized deviation is indicated by the addition of (DEVIATION) after
the name of the regulation.

(End of provision)
52.252–6 Authorized
Clauses.

Deviations

As prescribed in 52.107(f), insert the
following clause 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.

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52.253–1

48 CFR Ch. 1 (10–1–03 Edition)

AUTHORIZED DEVIATIONS IN CLAUSES (APR
1984)

52.301 Solicitation provisions and contract clauses (Matrix).

(a) The use in this solicitation or contract
of any Federal Acquisition Regulation (48
CFR Chapter 1) clause with an authorized deviation is indicated by the addition of (DEVIATION) after the date of the clause.
(b) The use in this solicitation or contract
of any ll [insert regulation name] (48 CFR l)
clause with an authorized deviation is indicated by the addition of (DEVIATION) after
the name of the regulation.

NOTE: The FAR matrix is not carried in the
CFR. It is available in the loose-leaf edition.
[48 FR 42478, Sept. 19, 1983, as amended at 62
FR 40239, July 25, 1997]

PART 53—FORMS
Sec.
53.000
53.001

(End of clause)
52.253–1

Subpart 53.1—General

Computer Generated Forms.

As prescribed in FAR 53.111, insert
the following clause:
COMPUTER GENERATED FORMS (JAN 1991)
(a) Any data required to be submitted on a
Standard or Optional Form prescribed by the
Federal Acquisition Regulation (FAR) may
be submitted on a computer generated
version of the form, provided there is no
change to the name, content, or sequence of
the data elements on the form, and provided
the form carries the Standard or Optional
Form number and edition date.
(b) Unless prohibited by agency regulations, any data required to be submitted on
an agency unique form prescribed by an
agency supplement to the FAR may be submitted on a computer generated version of
the form provided there is no change to the
name, content, or sequence of the data elements on the form and provided the form
carries the agency form number and edition
date.
(c) If the Contractor submits a computer
generated version of a form that is different
than the required form, then the rights and
obligations of the parties will be determined
based on the content of the required form.

(End of clause)
[55 FR 52800, Dec. 21, 1990]

Subpart 52.3—Provision and
Clause Matrix
52.300

Scope of part.
Definitions.

Scope of subpart.

The matrix in this subpart contains a
column for each principal type and/or
purpose of contract (see 52.101(e)).
[55 FR 3890, Feb. 5, 1990]

53.100 Scope of subpart.
53.101 Requirements for use of forms.
53.102 Current editions.
53.103 Exceptions.
53.104 Overprinting.
53.105 Computer generation.
53.106 Special construction and printing.
53.107 Obtaining forms.
53.108 Recommendations concerning forms.
53.109 Forms prescribed by other regulations.
53.110 Continuation sheets.
53.111 Contract clause.

Subpart 53.2—Prescription of Forms
53.200 Scope of subpart.
53.201 Federal acquisition system.
53.201–1 Contracting authority and responsibilities (SF 1402).
53.202–53.203 [Reserved]
53.204 Administrative matters.
53.204–1 Safeguarding classified information
within industry (DD Form 254, DD Form
441).
53.204–2 Contract reporting.
53.205 Publicizing contract actions.
53.205–1 Paid advertisements.
53.206–53.208 [Reserved]
53.209 Contractor qualifications.
53.209–1 Responsible prospective contractors.
53.210–53.211 [Reserved]
53.212 Acquisition of commercial items.
53.213 Simplified
acquisition
procedures
(SF’s 18, 30, 44, 1165, and 1449, and OF’s
336, 347, and 348).
53.214 Sealed bidding.
53.215 Contracting by negotiation.
53.215–1 Solicitation and receipt of proposals.
53.216 Types of contracts.
53.216–1 Delivery orders and orders under
basic ordering agreements (OF 347).
53.217–53.218 [Reserved]
53.219 Small business programs.
53.220–53.221 [Reserved]

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53.222 Application of labor laws to Government acquisitions (SF’s 99, 308, 1093, 1413,
1444, 1445, 1446, WH–347).
53.223–53.227 [Reserved]
53.228 Bonds and insurance.
53.229 Taxes (SF’s 1094, 1094–A).
53.230–53.231 [Reserved]
53.232 Contract financing (SF 1443).
53.233–53.234 [Reserved]
53.235 Research and Development Contracting (SF 298).
53.236 Construction and architect-engineer
contracts.
53.236–1 Construction.
53.236–2 Architect-engineer services (SF’s
252, 254, 255, 1421).
53.237–53.241 [Reserved]
53.242 Contract administration.
53.242–1 Novation
and
change-of-name
agreements (SF 30).
53.243 Contract modifications (SF 30).
53.244 [Reserved]
53.245 Government property.
53.246 [Reserved]
53.247 Transportation (U.S. Government
Bill of Lading).
53.248 [Reserved]
53.249 Termination of contracts.
53.250 [Reserved]
53.251 Contractor use of Government supply
sources (OF 347).

Subpart 53.3—Illustrations of Forms
53.300 Scope of subpart.
53.301 Standard forms.
53.301–18 SF 18 (Rev. 6/95), Request for
Quotations.
53.301–24 Bid Bond.
53.301–25 Performance Bond.
53.301–25–A Payment Bond.
53.301–25–B Standard Form 25–B, Continuation Sheet (For Standard Forms 24, 25,
and 25–A).
53.301–26 Standard Form 26, Award/Contract.
53.301–28 Affidavit of Individual Surety.
53.301–30 Standard Form 30, Amendment of
Solicitation/Modification of Contract.
53.301–33 Solicitation, Offer and Award.
53.301–34 Annual Bid Bond.
53.301–35 Annual Performance Bond.
53.301–44 Standard
Form
44,
Purchase
Order—Invoice—Voucher.
53.301–98 Standard Form 98, Notice of Intention to Make a Service Contract and Response to Notice.
53.301–98a Standard Form 98a, Notice of Intention to Make a Service Contract and
Response to Notice (Attachment A).
53.301–99 Standard Form 99, Notice of Award
of Contract.
53.301–120 Standard Form 120, Report of Excess Personal Property.
53.301–120–A Standard Form 120–A, Continuation Sheet (Report of Excess Personal
Property).

53.301–126 Standard Form 126, Report of Personal Property for Sale.
53.301–126–A Standard Form 126–A, Report
of Personal Property for Sale (Continuation Sheet).
53.301–252 Standard Form 252, Architect-Engineer Contract.
53.301–254 Standard Form 254, Architect-Engineer and Related Services Questionnaire.
53.301–255 Standard Form 255, Architect-Engineer and Related Services Questionnaire for Specific Project.
53.301–273 Reinsurance Agreement for a Miller Act Performance Bond.
53.301–274 Reinsurance Agreement for a Miller Act Payment Bond.
53.301–275 Reinsurance Agreement in Favor
of the United States.
53.301–279 Federal Procurement Data System (FPDS) Individual Contract Action
Report.
53.301–281 Federal Procurement Data System (FPDS) Summary Contract Action
Report ($25,000 or Less).
53.301–294 Subcontracting Report for Individual Contracts.
53.301–295 Summary Subcontract Report.
53.301–298 Standard Form 298, Report Documentation Page.
53.301–308 Standard Form 308, Request for
Determination and Response to Request.
53.301–1034 Standard Form 1034, Public
Voucher for Purchases and Services
Other Than Personal.
53.301–1034A Standard Form 1034A, Public
Voucher for Purchases and Services
Other
Than
Personal—Memorandum
Copy.
53.301–1035 Standard Form 1035, Public
Voucher for Purchases and Services
Other Than Personal, Continuation
Sheet.
53.301–1035A Standard Form 1035A, Public
Voucher for Purchases and Services
Other
Than
Personal—Memorandum,
Continuation Sheet.
53.301–1093 Standard Form 1093, Schedule of
Withholdings Under the Davis-Bacon Act
and/or the Contract Work Hours and
Safety Standards Act.
53.301–1094 SF 1094, U.S. Tax Exemption Certificates.
53.301–1094A SF 1094A, Tax Exemption Certificates Accountability Record.
53.301–1165 Standard Form 1165, Receipt for
Cash-Subvoucher.
53.301–1402 Standard Form 1402, Certificate
of Appointment.
53.301–1403 Preaward Survey of Prospective
Contractor (General).
53.301–1404 Preaward Survey of Prospective
Contractor—Technical.
53.301–1405 Preaward Survey of Prospective
Contractor—Production.
53.301–1406 Preaward Survey of Prospective
Contractor—Quality Assurance.

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48 CFR Ch. 1 (10–1–03 Edition)

53.301–1407 Preaward Survey of Prospective
Contractor—Financial Capability.
53.301–1408 Preaward Survey of Prospective
Contractor—Accounting System.
53.301–1409 Standard Form 1409, Abstract of
Offers.
53.301–1410 Standard Form 1410, Abstract of
Offers—Continuation.
53.301–1413 Standard Form 1413, Statement
and Acknowledgment.
53.301–1414 SF 1414 (Rev. 10/93) Consent of
Surety.
53.301–1415 SF 1415 (Rev. 7/93) Consent of
Surety and Increase of Penalty.
53.301–1416 Payment Bond for Other than
Construction Contracts.
53.301–1417 Pre-Solicitation Notice.
53.301–1418 Performance bond for other than
construction contracts.
53.301–1420 Standard Form 1420, Performance
Evaluation—Construction
Contracts.
53.301–1421 Standard Form 1421, Performance Evaluation (Architect-Engineer).
53.301–1423 SF 1423, Inventory Verification
Survey.
53.301–1424 Standard Form 1424, Inventory
Disposal Report.
53.301–1426 SF 1426, Inventory Schedule A
(Metals in Mill Product Form).
53.301–1427 Standard Form 1427, Inventory
Schedule A—Construction Sheet (Metals
in Mill Product Form).
53.301–1428 SF 1428, Inventory Schedule B.
53.301–1429 Standard Form 1429, Inventory
Schedule B—Continuation Sheet.
53.301–1430 SF 1430, Inventory Schedule C
(Work-in-Process).
53.301–1431 Inventory Schedule C—Continuation Sheet (Work-in-Process).
53.301–1432 SF 1432, Inventory Schedule D
(Special Tooling and Special Test Equipment).
53.301–1433 Inventory Schedule D—Continuation Sheet (Special Tooling and Special
Test Equipment).
53.301–1434 SF 1434, Termination Inventory
Schedule E (Short Form For Use With
SF 1438 Only).
53.301–1435 Settlement Proposal (Inventory
Basis).
53.301–1436 Settlement Proposal (Total Cost
Basis).
53.301–1437 Settlement Proposal for Cost-Reimbursement Type Contracts.
53.301–1438 Settlement
Proposal
(Short
Form).
53.301–1439 Schedule of Accounting Information.
53.301–1440 Application for Partial Payment.
53.301–1442 Standard Form 1442, Solicitation, Offer and Award (Construction, Alteration, or Repair).
53.301–1443 Standard Form 1443, Contractor’s Request for Progress Payment.
53.301–1444 Request for Authorization of Additional Classification and Rate.

53.301–1445 SF 1445, Labor Standards Interview.
53.301–1446 Labor Standards Investigation
Summary Sheet.
53.301–1447 Solicitation/Contract.
53.301–1449 Solicitation/Contract/Order
for
Commercial Items.
53.302 Optional forms.
53.302–17 Optional Form 17, Offer Label.
53.302–90 Release of Lien on Real Property.
53.302–91 Release of Personal Property From
Escrow.
53.302–307 Optional Form 307, Contract
Award.
53.302–308 Optional Form 308, Solicitation
and Offer—Negotiated Acquisition.
53.302–309 Optional Form 309, Amendment of
Solicitation.
53.302–312 Small Disadvantaged Business
(SDB) Participation Report.
53.302–333 Procurement Integrity Certification for Procurement Officials.
53.302–336 Optional Form 336, Continuation
Sheet.
53.302–347 OF 347 (Rev. 6/95), Order for Supplies or Services.
53.302–348 Optional Form 348, Order for Supplies or Services Schedule—Continuation.
53.302–1419 Optional Form 1419, Abstract of
Offers—Construction.
53.302–1419A Optional Form 1419A, Abstract
of Offers—Construction, Continuation
Sheet.
53.303 Agency forms.
53.303–DD–254 Department of Defense DD
Form 254, Contract Security Classification Specification.
53.303–DD–441 Department of Defense DD
Form 441, Security Agreement.
53.303–WH–347 Department of Labor Form
WH–347, Payroll (For Contractor’s Optional Use).
AUTHORITY: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 42 U.S.C. 2473(c).
SOURCE: 48 FR 42637, Sept. 19, 1983, unless
otherwise noted.

53.000 Scope of part.
This part (a) prescribes standard
forms (SF’s) and references optional
forms (OF’s) and agency-prescribed
forms for use in acquisition, (b) contains requirements and information
generally applicable to the forms, and
(c) illustrates the forms.
53.001 Definitions.
Exception, as used in this part, means
an approved departure from the established design, content, printing specifications, or conditions for use of any
standard form.

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Federal Acquisition Regulation

53.107

Subpart 53.1—General
53.100

Scope of subpart.

This subpart contains requirements
and information generally applicable
to the forms prescribed in this regulation.
53.101

Requirements for use of forms.

The requirements for use of the
forms prescribed or referenced in this
part are contained in parts 1 through
52, where the subject matter applicable
to each form is addressed. The specific
location of each requirement is identified in subpart 53.2.
[48 FR 42637, Sept. 19, 1983, as amended at 63
FR 34080, June 22, 1998]

53.102

Current editions.

The form prescriptions in subpart
53.2 and the illustrations in subpart 53.3
contain current edition dates. Contracting officers shall use the current
editions unless otherwise authorized
under this regulation.
53.103

(2) There is no change to the name,
content, or sequence of the data elements, and the form carries the Standard or Optional Form number and edition date.
(b) The forms prescribed by this part
may be computer generated by the public. Unless prohibited by agency regulations, forms prescribed by agency FAR
supplements may also be computer
generated by the public. Computer generated forms shall either comply with
Federal Information Processing Standard Number 161 or shall retain the
name, content, or sequence of the data
elements, and shall carry the Standard
or Optional Form or agency number
and edition date (see 53.111).
[60 FR 34741, July 3, 1995]

53.106 Special construction and printing.
Contracting offices may request exceptions (see 53.103) to standard forms
for special construction and printing.
Examples of common exceptions are as
follows:

Exceptions.

Agencies shall not (a) alter a standard form prescribed by this regulation,
or (b) use for the same purpose any
form other than the standard form prescribed by this regulation without receiving in advance an exception to the
form.

Standard Forms

Special Construction and Printing

(a) SF 18— ............

(1) With vertical lines omitted (for listing
of supplies and services, unit, etc.);
(2) As reproducible masters; and/or
(3) In carbon interleaved pads or sets.
As die-cut stencils or reproducible masters.
(1) With serial numbers and contracting
office name and address; and/or
(2) On special weight of paper and with
the type of construction, number of
sets per book, and number of parts
per set as specified by the contracting officer. (Executive agencies
may supplement the administrative
instructions on the inside front cover
of the book.)
(1) As die-cut stencils or reproducible
masters; and/or
(2) With additional wording as required
by the executive agency. (However,
the sequence and wording of the
items appearing on the prescribed
form should not be altered.)

(b) SF’s
26,30,33,1447—.
(c) SF 44— ............

[53 FR 43395, Oct. 26, 1988, as amended at 62
FR 40239, July 25, 1997]

53.104

Overprinting.

Standard and optional forms (obtained as required by 53.107) may be
overprinted with names, addresses, and
other uniform entries that are consistent with the purpose of the form
and that do not alter the form in any
way. Exception approval for overprinting is not needed.
53.105

Computer generation.

(a) Agencies may computer-generate
the Standard and Optional Forms prescribed in the FAR without exception
approval (see 53.103), provided—
(1) The form is in an electronic format that complies with Federal Information Processing Standard Number
161; or

(d) SF 1442— ........

[48 FR 42637, Sept. 19, 1983, as amended at 51
FR 27121, July 29, 1986; 54 FR 48998, Nov. 28,
1989]

53.107

Obtaining forms.

(a) Executive agencies shall obtain
standard and optional forms from the
General Services Administration (GSA)
by using GSA Supply Catalog - Office

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53.108

48 CFR Ch. 1 (10–1–03 Edition)

Products (see 41 CFR 101–26.302). Standard forms adapted for computer preparation (see 53.105) or with special construction and printing (see 53.106) that
are not available from GSA may be ordered directly from the Government
Printing Office (GPO).
(b) Contractors and other parties
may obtain standard and optional
forms from the Superintendent of Documents, GPO, Washington, DC 20402.
Standard and optional forms not available from the Superintendent of Documents may be obtained from the prescribing agency.
(c) Agency forms may be obtained
from the prescribing agency.

53.111

53.108 Recommendations
forms.

This subpart prescribes standard
forms and references optional forms
and agency-prescribed forms for use in
acquisition. Consistent with the approach used in subpart 52.2, this subpart is arranged by subject matter, in
the same order as, and keyed to, the
parts of the FAR in which the form
usage requirements are addressed. For
example, forms addressed in FAR part
14, Sealed Bidding, are treated in this
subpart in section 53.214, Sealed Bidding; forms addressed in FAR part 43,
Contract Modifications, are treated in
this subpart in section 53.243, Contract
modifications. The following example
illustrates how the subjects are keyed
to the parts in which they are addressed:

concerning

Users of this regulation may recommend new forms or the revision,
elimination, or consolidation of the
forms prescribed or referenced in this
regulation. Recommendations from
within an executive agency shall be
submitted to the cognizant council in
accordance with agency procedures.
Recommendations from other than executive agencies should be submitted
directly to the FAR Secretariat.
53.109 Forms prescribed by other regulations.
Certain forms referred to in Subpart
53.2 are prescribed in other regulations
and are specified by the FAR for use in
acquisition. For each of these forms,
the prescribing agency is identified by
means of a parenthetical notation after
the form number. For example, SF
1165, which is prescribed by the General
Accounting Office (GAO), is identified
as SF 1165(GAO).
53.110

Contract clause.

Contracting officers shall insert the
clause at 52.253–1, Computer Generated
Forms, in solicitations and contracts
that require the contractor to submit
data on Standard or Optional Forms
prescribed by this regulation; and, unless prohibited by agency regulations,
forms prescribed by agency supplements.
[55 FR 52800, Dec. 21, 1990]

Subpart 53.2—Prescription of
Forms
53.200

Scope of subpart.

Continuation sheets.

Except as may be otherwise indicated
in the FAR, all standard forms prescribed by the FAR may be continued
on (a) plain paper of similar specification, or (b) specially constructed continuation sheets (e.g., OF 336). Continuation sheets shall be annotated in the
upper right-hand corner with the reference number of the document being
continued and the serial page number.
[48 FR 42637, Sept. 19, 1983, as amended at 51
FR 27121, July 29, 1986]

[48 FR 42637, Sept. 19, 1983, as amended at 50
FR 1748, Jan. 11, 1985; 50 FR 52429, Dec. 23,
1985]

53.201

Federal acquisition system.

53.201–1 Contracting authority and responsibilities (SF 1402).
SF 1402 (10/83), Certificate of Appointment. SF 1402 is prescribed for use in
appointing contracting officers, as
specified in 1.603–3.

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400

Federal Acquisition Regulation
53.202–53.203
53.204

53.213

[Reserved]

Administrative matters.

53.204–1 Safeguarding classified information within industry (DD Form
254, DD Form 441).
The following forms, which are prescribed by the Department of Defense,
shall be used by agencies covered by
the Defense Industrial Security Program if contractor access to classified
information is required, as specified in
subpart 4.4 and the clause at 52.204–2:
(a) DD Form 254 (Department of Defense (DOD)), Contract Security Classification Specification. (See 4.403(c)(1).)
(b) DD Form 441 (DOD), Security
Agreement. (See paragraph (b) of the
clause at 52.204–2.)
53.204–2

Contract reporting.

The following forms are prescribed
for use by executive agencies in reporting contract actions, as specified in
4.602(c):
(a) SF 279 (Rev. 10/00), Federal Procurement Data System (FPDS) Individual
Contract Action Report (See 4.602(c).)
(b) SF 281 (Rev. 10/00), Federal Procurement Data System (FPDS) Summary Contract Action Report ($25,000 or Less). (See
4.602(c).)
[53 FR 43395, Oct. 26, 1988, as amended at 55
FR 52801, Dec. 21, 1990; 61 FR 67427, Dec. 20,
1997; 62 FR 64940, Dec. 9, 1997; 65 FR 46058,
July 26, 2000]

53.205

Publicizing contract actions.

53.205–1

Paid advertisements.

SF 1449, prescribed in 53.212, shall be
used to place orders for paid advertisements as specified in 5.503.
[61 FR 39198, July 26, 1996]

53.206–53.208
53.209

(b) SF 1404 (Rev. 9/88), Preaward Survey of Prospective Contractor—Technical.
SF 1404 is authorized for local reproduction and a copy is furnished for this
purpose in part 53 of the looseleaf edition of the FAR.
(c) SF 1405 (Rev. 9/88), Preaward Survey
of Prospective Contractor—Production.
SF 1405 is authorized for local reproduction and a copy is furnished for this
purpose in part 53 of the looseleaf edition of the FAR.
(d) SF 1406 (Rev. 11/97), Preaward Survey of Prospective Contractor—Quality
Assurance. SF 1406 is authorized for
local reproduction and a copy is furnished for this purpose in part 53 of the
looseleaf edition of the FAR.
(e) SF 1407 (Rev. 9/88), Preaward Survey
of Prospective Contractor—Financial Capability. SF 1407 is authorized for local
reproduction and a copy is furnished
for this purpose in part 53 of the looseleaf edition of the FAR.
(f) SF 1408 (Rev. 9/88), Preaward Survey
of Prospective Contractor—Accounting
System. SF 1408 is authorized for local
reproduction and a copy is furnished
for this purpose in part 53 of the looseleaf edition of the FAR.
[55 FR 25534, June 21, 1990, as amended at 62
FR 64937, Dec. 9, 1997]

53.210–53.211

[Reserved]

53.212 Acquisition
items.

of

commercial

SF 1449 (APR 2002), Solicitation/Contract/Order for Commercial Items. SF 1449
is prescribed for use in solicitations
and contracts for commercial items.
Agencies may prescribe additional detailed instructions for use of the form.
[60 FR 48256, Sept. 18, 1995, as amended at 67
FR 13050, Mar. 20, 2002]

53.213 Simplified acquisition procedures (SF’s 18, 30, 44, 1165, and
1449, and OF’s 336, 347, and 348).

[Reserved]

Contractor qualifications.

53.209–1 Responsible prospective contractors.
(a) SF 1403 (Rev. 9/88), Preaward Survey of Prospective Contractor (General).
SF 1403 is authorized for local reproduction and a copy is furnished for this
purpose in part 53 of the looseleaf edition of the FAR.

The following forms are prescribed as
stated in this section for use in simplified acquisition procedures, orders
under existing contracts or agreements, and orders from required
sources of supplies and services:
(a) SF 18 (Rev. 6/95), Request for
Quotations, or SF 1449 (Rev. 4/02), Solicitation/Contract/Order
for
Commercial

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53.214

48 CFR Ch. 1 (10–1–03 Edition)

Items. SF 18 is prescribed for use in obtaining price, cost, delivery, and related information from suppliers as
specified in 13.307(b). SF 1449, as prescribed in 53.212, or other agency forms/
automated formats, may also be used
to obtain price, cost, delivery, and related information from suppliers as
specified in 13.307(b).
(b) SF 30 (Rev. 10/83), Amendment of Solicitation/Modification of Contract. SF 30,
prescribed in 53.243, may be used for
modifying purchase orders, as specified
in 13.307(c)(3).
(c) SF 44 (Rev. 10/83), Purchase Order
Invoice Voucher. SF 44 is prescribed for
use in simplified acquisition procedures, as specified in 13.306.
(d) SF 1165 (6/83 Ed.), Receipt for CashSubvoucher. SF 1165 (GAO) may be used
for imprest fund purchases, as specified
in 13.307(e).
(e) OF 336 (4/86 Ed.), Continuation
Sheet. OF 336, prescribed in 53.214(h),
may be used as a continuation sheet in
solicitations, as specified in 13.307(c)(1).
(f) SF 1449, (Rev. 4/02) Solicitation/Contract/Order for Commercial Items prescribed in 53.212, OF 347 (Rev. 6/95),
Order for Supplies or Services, and OF 348
(10/83 Ed.), Order for Supplies or ServicesSchedule Continuation. SF 1449, OF’s 347
and 348 (or approved agency forms/
automated formats) may be used as follows:
(1) To accomplish acquisitions under
simplified acquisition procedures, as
specified in 13.307.
(2) To establish blanket purchase
agreements (BPA’s), as specified in
13.303–2, and to make purchases under
BPA’s, as specified in 13.303–5.
(3) To issue orders under basic ordering
agreements,
as
specified
in
16.703(d)(2)(i).
(4) As otherwise specified in this
chapter (e.g., see 5.503(a)(2), 8.405–2,
36.701(c), and 51.102(e)(3)(ii)).
[61 FR 39198, July 26, 1996, as amended at 62
FR 51266, Sept. 30, 1997; 62 FR 64929, Dec. 9,
1997; 67 FR 13050, Mar. 20, 2002]

53.214

Sealed bidding.

The following forms are prescribed
for use in contracting by sealed bidding
(except for construction and architectengineer services):

(a) SF 26 (4/85), Award/Contract. SF 26
is prescribed for use in awarding sealed
bid contracts for supplies or services in
which bids were obtained on SF 33, Solicitation, Offer and Award, as specified in 14.408–1(d)(1). Pending issuance
of a new edition of the form, the reference in block 1 should be amended to
read 15 CFR 700.
(b) SF 30, Amendment of Solicitation/
Modification of Contract. SF 30, prescribed in 53.243, shall be used in
amending invitations for bids, as specified in 14.208(a).
(c) SF 33 (Rev. 9/97), Solicitation, Offer
and Award. SF 33 is prescribed for use
in soliciting bids for supplies or services and for awarding the contracts
that result from the bids, as specified
in 14.201–2(a)(1), unless award is accomplished by SF 26.
(d) SF 1447 (5/88), Solicitation/Contract. SF 1447 is prescribed for use in
soliciting supplies or services and for
awarding contracts that result from
the bids. It shall be used when the simplified contract format is used (see
14.201–9) and may be used in place of
the SF 26 or SF 33 with other solicitations and awards. Agencies may prescribe additional detailed instructions
for use of the form.
(e) [Reserved]
(f) SF 1409 (Rev. 9/88), Abstract of Offers, and SF 1410 (9/88), Abstract of Offers-Continuation. SF 1409 and SF 1410
are prescribed for use in recording bids,
as specified in 14.403(a).
(g) OF 17 (Rev. 12/93), Offer Label. OF
17 may be furnished with each invitation for bids to facilitate identification
and handling of bids, as specified in
14.202–3(b).
(h) OF 336 (Rev. 3/86), Continuation
Sheet. OF 336 may be used as a continuation sheet in solicitations, as specified in 14.201–2(b).
[48 FR 42637, Sept. 19, 1983, as amended at 50
FR 1748, Jan. 11, 1985; 50 FR 52429, Dec. 23,
1985; 51 FR 27121, July 29, 1986; 52 FR 19805,
May 27, 1987; 54 FR 29284, July 11, 1989; 54 FR
48998, Nov. 28, 1989; 59 FR 11388, Mar. 10, 1994;
59 FR 67033, Dec. 28, 1994; 60 FR 34741, July 3,
1995; 62 FR 240, Jan. 2, 1997; 62 FR 51266, Sept.
30, 1997; 62 FR 64940, Dec. 9, 1997; 64 FR 32749,
June 17, 1999; 68 FR 43857, July 24, 2003]

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Federal Acquisition Regulation
53.215

53.222

Contracting by negotiation.

53.215–1 Solicitation
proposals.

and

receipt

53.216
of

The following forms are prescribed,
as stated in the following paragraphs,
for use in contracting by negotiation
(except for construction, architect-engineer services, or acquisitions made
using simplified acquisition procedures):
(a) SF 26 (Rev. 4/85), Award/Contract.
SF 26, prescribed in 53.214(a), may be
used in entering into negotiated contracts in which the signature of both
parties on a single document is appropriate, as specified in 15.509.
(b) SF 30 (Rev. 10/83), Amendment of Solicitation/Modification of Contract. SF 30,
prescribed in 53.243, may be used for
amending requests for proposals and
for amending requests for information,
as specified in 15.210(b).
(c) SF 33 (Rev. 9/97), Solicitation, Offer
and Award. SF 33, prescribed in
53.214(c), may be used in connection
with the solicitation and award of negotiated contracts. Award of such contracts may be made by either OF 307,
SF 33, or SF 26, as specified in 53.214(c)
and 15.509.
(d) OF 17 (Rev. 12/93), Offer Label. OF
17 may be furnished with each request
for proposals to facilitate identification and handling of proposals, as specified in 15.210(c).
(e) OF 307 (9/97), Contract Award. OF
307 may be used to award negotiated
contracts as specified in 15.509.
(f) OF 308 (9/97), Solicitation and OfferNegotiated Acquisition. OF 308 may be
used to support solicitation of negotiated
contracts
as
specified
in
15.210(a). Award of such contracts may
be made by OF 307, as specified in
15.509.
(g) OF 309 (9/97), Amendment of Solicitation. OF 309 may be used to amend solicitations of negotiated contracts, as
specified in 15.210(b).
[62 FR 51266, Sept. 30, 1997, as amended at 62
FR 64940, Dec. 9, 1997; 64 FR 32749, June 17,
1999; 66 FR 2141, Jan. 10, 2001]

Types of contracts.

53.216–1 Delivery orders and orders
under basic ordering agreements
(OF 347).
OF 347, Order for Supplies or Services.
OF 347, prescribed in 53.213(f), (or an approved agency form) may be used to
place orders under indefinite delivery
contracts and basic ordering agreements, as specified in 16.703(d)(2)(i).
[48 FR 42637, Sept. 19, 1983, as amended at 61
FR 39199, July 26, 1996]

53.217–53.218
53.219

[Reserved]

Small business programs.

The following standard forms are prescribed for use in reporting small,
small disadvantaged and women-owned
small business subcontracting data, as
specified in part 19:
(a) SF 294 (Rev. 10/01), Subcontracting
Report for Individual Contracts. (See
19.704(a)(10).) SF 294 is authorized for
local reproduction and a copy is furnished for this purpose in part 53 of the
loose-leaf edition of the FAR.
(b) SF 295 (Rev. 10/01), Summary Subcontract Report. (See 19.704(a)(10).) SF
295 is authorized for local reproduction
and a copy is furnished for this purpose
in part 53 of the loose-leaf edition of
the FAR.
(c) OF 312 (10/01), Small Disadvantaged
Business Participation Report. (See subpart 19.12.)
[60 FR 48267, Sept. 18, 1995, as amended at 61
FR 67413, Dec. 20, 1996; 63 FR 34068, June 22,
1998; 63 FR 36125, July 1, 1998; 63 FR 70277,
Dec. 18, 1998; 65 FR 46058, July 26, 2000; 66 FR
53494, Oct. 22, 2001]

53.220–53.221

[Reserved]

53.222 Application of labor laws to
Government acquisitions (SF’s 99,
308, 1093, 1413, 1444, 1445, 1446,
WH–347).
The following forms are prescribed as
stated below, for use in connection
with the application of labor laws:
(a) [Reserved]
(b) SF 99 (DOL), Notice of Award of
Contract.

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53.223–53.227

48 CFR Ch. 1 (10–1–03 Edition)

(c) SF 308 (DOL) (Rev. 5/85), Request
for Wage Determination and Response to
Request. (See 22.404–3 (a) and (b).)
(d) SF 1093 (GAO) (10/71), Schedule of
Withholdings under the Davis-Bacon Act
and/or the Contract Work Hours and
Safety Standards Act. (See 22.406–9(c)(1).)
(e) SF 1413 (Rev. 6/89), Statement and
Acknowledgment. SF 1413 is prescribed
for use in obtaining contractor acknowledgment of inclusion of required
clauses in subcontracts, as specified in
22.406–5. Pending issuance of a new edition of the form, the ‘‘prescribed by’’
reference at the bottom right of the
form is revised to read ‘‘53.222(e)’’.
(f) Form SF 1444 (10/87), Request for Authorization of Additional Classification
and Rate. (See 22.406–3(a) and 22.1019.)
(g) SF 1445 (12/96), Labor Standards
Interview. (See 22.406–7(b).)
(h) SF 1446 (10/87), Labor Standards Investigation Summary Sheet. (See 22.406–
8(d).)
(i) Form WH–347 (DOL), Payroll (for
Contractor’s Optional Use). (See 22.406–
6(a).)
[48 FR 42637, Sept. 19, 1983, as amended at 49
FR 12997, Mar. 30, 1984; 53 FR 4948, Feb. 18,
1988; 53 FR 27468, July 20, 1988; 54 FR 48998,
Nov. 28, 1989; 55 FR 38518, Sept. 18, 1990; 59 FR
11388, Mar. 10, 1994; 62 FR 240, Jan. 2, 1997]

53.223–53.227
53.228

[Reserved]

Bonds and insurance.

The following standard forms are prescribed for use for bond and insurance
requirements, as specified in part 28:
(a) SF 24 (Rev. 10/98) Bid Bond. (See
28.106–1.) SF 24 is authorized for local
reproduction and a copy is furnished
for this purpose in Part 53 of the looseleaf edition of the FAR.
(b) SF 25 (Rev. 5/96) Performance Bond.
(See 28.106–1(b).) SF 25 is authorized for
local reproduction and a copy is furnished for this purpose in Part 53 of the
looseleaf edition of the FAR.
(c) SF 25–A (Rev. 10/98) Payment Bond.
(See 28.106–1(c).) SF 25–A is authorized
for local reproduction and a copy is
furnished for this purpose in Part 53 of
the looseleaf edition of the FAR.
(d) SF 25–B (Rev. 10/83), Continuation
Sheet (For Standard Forms 24, 25, and 25–
A). (See 28.106–1(d).)
(e) SF 28 (Rev. 6/03) Affidavit of Individual Surety. (See 28.106–1(e) and

28.203(b).) SF 28 is authorized for local
reproduction and a copy is furnished
for this purpose in Part 53 of the looseleaf edition of the FAR.
(f) SF 34 (Rev. 1/90), Annual Bid Bond.
(See 28.106–1(f).) SF 34 is authorized for
local reproduction and a copy is furnished for this purpose in part 53 of the
looseleaf edition of the FAR.
(g) SF 35 (Rev. 1/90), Annual Performance Bond. (See 28.106–1.) SF 35 is authorized for local reproduction and a
copy is furnished for this purpose in
part 53 of the looseleaf edition of the
FAR.
(h) SF 273 (Rev. 10/98) Reinsurance
Agreement for a Miller Act Performance
Bond. (See 28.106–1(h) and 28.202–1(a)(4).)
SF 273 is authorized for local reproduction and a copy is furnished for this
purpose in Part 53 of the looseleaf edition of the FAR.
(i) SF 274 (Rev. 10/98) Reinsurance
Agreement for a Miller Act Payment
Bond. (See 28.106–1(i) and 28.202–1(a)(4).)
SF 274 is authorized for local reproduction and a copy is furnished for this
purpose in Part 53 of the looseleaf edition of the FAR.
(j) SF 275 (Rev. 10/98) Reinsurance
Agreement in Favor of the United States.
(See 28.106–1(j) and 28.202–1(a)(4).) SF
275 is authorized for local reproduction
and a copy is furnished for this purpose
in Part 53 of the looseleaf edition of the
FAR.
(k) SF 1414 (Rev. 10/93), Consent of Surety. SF 1414 is authorized for local reproduction and a copy is furnished for
this purpose in part 53 of the looseleaf
edition of the FAR.
(l) SF 1415 (Rev. 7/93), Consent of Surety and Increase of Penalty. (See 28.108–
1(l).) SF 1415 is authorized for local reproduction and a copy is furnished for
this purpose in part 53 of the looseleaf
edition of the FAR.
(m) SF 1416 (Rev. 10/98) Payment Bond
for Other than Construction Contracts.
(See 28.106–1(m).) SF 1416 is authorized
for local reproduction and a copy is
furnished for this purpose in Part 53 of
the looseleaf edition of the FAR.
(n) SF 1418 (Rev. 2/99) Performance
Bond For Other Than Construction Contracts. (See 28.106–1(n).) SF 1418 is authorized for local reproduction and a
copy is furnished for this purpose in

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Federal Acquisition Regulation

53.236–1

Part 53 of the looseleaf edition of the
FAR.
(o) OF 90 (Rev. 1/90), Release of Lien on
Real Property. (See 28.106–1(o) and
28.203–5(a).) OF 90 is authorized for
local reproduction and a copy is furnished for this purpose in part 53 of the
looseleaf edition of the FAR.
(p) OF 91 (Rev. 1/90), Release of Personal Property from Escrow. (See 28.106–
1(p) and 28.203–5(a).) OF 91 is authorized
for local reproduction and a copy is
furnished for this purpose in part 53 of
the looseleaf edition of the FAR.
[48 FR 42637, Sept. 19, 1983, as amended at 53
FR 43395, Oct. 26, 1988; 54 FR 48998, Nov. 28,
1989; 55 FR 25534, June 21, 1990; 55 FR 52801,
Dec. 21, 1990; 59 FR 67061, Dec. 28, 1994; 61 FR
39214, July 26, 1996; 63 FR 58603, Oct. 30, 1998;
63 FR 70293, Dec. 18, 1998; 64 FR 10549, Mar. 4,
1999; 68 FR 28088, May 22, 2003]

53.229

Taxes (SF’s 1094, 1094–A).

SF 1094 (Rev. 12/96), U.S. Tax Exemption Form, and SF 1094–A (Rev. 12/96),
Tax Exemption Forms Accountability
Record. SF’s 1094 and 1094–A are prescribed for use in establishing exemption from State or local taxes, as specified in 29.302(b).
[48 FR 42637, Sept. 19, 1983, as amended at 62
FR 240, Jan.2, 1997]

53.230–53.231
53.232

[Reserved]

Contract financing (SF 1443).

SF 1443 (10/82), Contractor’s Request for
Progress Payment. SF 1443 is prescribed
for use in obtaining contractors’ requests for progress payments, as specified in 32.503–1.
53.233–53.234

[Reserved]

53.235 Research
and
Contracting (SF 298).

Development

SF 298 (2/89), Report Documentation
Page. SF 298 is prescribed for use in
submitting scientific and technical reports to contracting officers and to
technical information libraries, as
specified in 35.010.

53.236 Construction and architect-engineer contracts.
53.236–1

Construction.

The following forms are prescribed,
as stated below, for use in contracting
for construction, alteration, or repair,
or dismantling, demolition, or removal
of improvements.
(a) SF 1417 (Rev. 8/90), Pre-Solicitation
Notice (Construction Contract). SF 1417 is
prescribed for use in notifying prospective offerors of solicitations estimated
to be $100,000 or more and may be used
if the proposed contract is estimated to
be less than $100,000, as specified in
36.701(a).
(b) SF 1420 (10/83), Performance Evaluation—Construction Contracts. SF 1420 is
prescribed for use in evaluating and reporting on the performance of construction contractors within approved
dollar thresholds and as otherwise
specified in 36.701(e).
(c)–(d) [Reserved]
(e) SF 1442 (4/85), Solicitation, Offer
and Award (Construction, Alteration, or
Repair). SF 1442 is prescribed for use in
soliciting offers and awarding contracts expected to exceed the simplified acquisition threshold for (1)
construction, alteration, or repair, or
(2) dismantling, demolition, or removal
of improvements (and may be used for
contracts within the simplified acquisition threshold), as specified in 36.701(b).
(f) OF 347 (6/95), Order for Supplies or
Services. OF 347, prescribed in 53.213(f),
(or an approved agency form) may be
used for contracts under the simplified
acquisition threshold for (1) construction, alteration, or repair, or (2) dismantling, demolition, or removal of
improvements, as specified in 36.701(c).
(g) OF 1419 (11/88), Abstract of OffersConstruction, and OF 1419A (11/88), Abstract of Offers-Construction, Continuation Sheet. OF’s 1419 and 1419A are prescribed for use in recording bids (and
may be used for recording proposal
evaluation information), as specified in
36.701(d).
[48 FR 42637, Sept. 19, 1983, as amended at 50
FR 1748, Jan. 11, 1985; 53 FR 4948, Feb. 18,
1988; 54 FR 29284, July 11, 1989; 55 FR 52801,
Dec. 21, 1990; 60 FR 34763, July 3, 1995; 61 FR
39199, July 26, 1996]

[55 FR 3890, Feb. 5, 1990]

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53.236–2

48 CFR Ch. 1 (10–1–03 Edition)

53.236–2 Architect-engineer
services
(SF’s 252, 254, 255, 1421).
The following forms are prescribed
for use in contracting for architect-engineer and related services:
(a) SF 252 (Rev. 10/83), Architect-Engineer Contract. SF 252 is prescribed for
use in awarding fixed-price contracts
for architect-engineer services, as specified in 36.702(a). [Pending issuance of a
new edition of the form, Block 8, Negotiation Authority, is deleted.]
(b) SF 254 (Rev. 11/92), Architect-Engineer and Related Services Questionnaire.
SF 254 is prescribed for use to obtain
information
for
architect-engineer
firms regarding their professional
qualifications,
as
specified
in
36.702(b)(1).
(c) SF 255 (Rev. 11/92), Architect-Engineer and Related Services Questionnaire
for Specific Project. SF 255 is prescribed
for use within approved dollar thresholds and as otherwise specified in
36.702(b)(2), whenever an agency requires information to supplement the
SF 254 regarding the prospective firm’s
qualifications for a particular architect-engineer project.
(d) SF 1421 (10/83), Performance Evaluation (Architect-Engineer). SF 1421 is prescribed for use in evaluating and reporting on the performance of architect-engineer contractors within approved dollar thresholds and as otherwise specified in 36.702(c).
[48 FR 42637, Sept. 19, 1983, as amended at 50
FR 1748, Jan. 11, 1985; 50 FR 52429, Dec. 23,
1985; 57 FR 60591, Dec. 21, 1992]

53.237–53.241
53.242

[Reserved]

Contract administration.

53.242–1 Novation and change-of-name
agreements (SF 30).
SF 30, Amendment of Solicitation/Modification of Contract. SF 30, prescribed in
53.243, shall be used in connection with
novation and change of name agreements, as specified in 42.1203(h).
[48 FR 42637, Sept. 19, 1983, as amended at 62
FR 64935, Dec. 9, 1997]

53.243 Contract modifications (SF 30).
SF 30 (Rev. 10/83), Amendment of Solicitation/Modification of Contract. SF 30 is
prescribed for use in amending invitation for bids, as specified in 14.208;

modifying purchase and delivery orders, as specified in 13.302–3; and modifying
contracts,
as
specified
in
42.1203(h), 43.301, 49.602–5, and elsewhere
in this chapter. The form may also be
used to amend solicitations for negotiated contracts, as specified in
15.210(b). Pending the publication of a
new edition of the form, Instruction
(b), Item 3 (effective date), is revised in
paragraphs (3) and (5) as follows:
(b) Item 3 (effective date).
(3) For a modification issued as a
confirming notice of termination for
the convenience of the Government,
the effective date of the confirming notice shall be the same as the effective
date of the initial notice.
(5) For a modification confirming the
termination contracting officer’s previous letter determination of the
amount due in settlement of a contract
termination for convenience, the effective date shall be the same as the effective date of the previous letter determination.
[48 FR 42637, Sept. 19, 1983, as amended at 62
FR 51266, Sept. 30, 1997; 62 FR 64929, 64936,
Dec. 9, 1997]

53.244

[Reserved]

53.245 Government property.
The following forms are prescribed,
as specified below, for use in reporting,
redistribution, and disposal of contractor inventory (defined in 45.601)
and in accounting for this property:
(a) SF 120 (GSA), Report of Excess Personal Property, and SF 120–A (GSA), Continuation Sheet (Report of Excess Personal Property). (See 45.608–2(b)(2) and
45.608–8.)
(b) SF 126 (GSA), Report of Personal
Property for Sale, and SF 126–A (GSA),
Report of Personal Property for Sale
(Continuation Sheet). (See 45.610–1(c).)
(c) SF 1423 (Rev. 12/96), Inventory
Verification Survey. (See 45.606–3(b).)
(d) SF 1424 (Rev. 7/89), Inventory Disposal Report. (See 45.615.) SF 1424 is authorized for local reproduction and a
copy is furnished for this purpose in
part 53 of the looseleaf edition of the
FAR.
(e) [Reserved]
(f) SF 1426 (Rev. 12/96), Inventory
Schedule A (Metals in Mill Product
Form), and SF 1427 (Rev. 7/89), Inventory

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Federal Acquisition Regulation

53.249

Schedule A—Continuation Sheet (Metals
in Mill Product Form). (See 45.606 and
49.602–2(e).) Standard Form 1426 and
Standard Form 1427 are authorized for
local reproduction and copies are furnished for this purpose in part 53 of the
looseleaf edition of the FAR.
(g) SF 1428 (Rev. 12/96), Inventory
Schedule B, and SF 1429 (Rev. 7/89), Inventory Schedule B—Continuation Sheet.
(See 45.606 and 49.602–2(b).) Standard
Form 1428 and Standard Form 1429 are
authorized for local reproduction and
copies are furnished for this purpose in
part 53 of the looseleaf edition of the
FAR.
(h) SF 1430 (Rev. 12/96), Inventory
Schedule C (Work-in-Process) and SF 1431
(Rev. 7/89), Inventory Schedule C—Continuation Sheet (Work-in-Process). (See
45.606 and 49.602-2(c).) Standard Form
1430 and Standard Form 1431 are authorized for local reproduction and copies are furnished for this purpose in
part 53 of the looseleaf edition of the
FAR.
(i) SF 1432 (Rev. 12/96), Inventory
Schedule D (Special Tooling and Special
Test Equipment), and SF 1433 (Rev. 7/89),
Inventory
Schedule
D—Continuation
Sheet (Special Tooling and Special Test
Equipment). (See 45.606 and 49.602–2(d).)
Standard Form 1432 and Standard
Form 1433 are authorized for local reproduction and copies are furnished for
this purpose in part 53 of the looseleaf
edition of the FAR.
(j) SF 1434 (Rev. 12/96), Termination Inventory Schedule E (Short Form For Use
with SF 1438 Only). (See 45.606 and
49.602–2(e).) Standard Form 1434 is authorized for local reproduction and a
copy is furnished for this purpose in
part 53 of the looseleaf edition of the
FAR.
[48 FR 42637, Sept. 19, 1983, as amended at 54
FR 34758, Aug. 21, 1989; 55 FR 3890, Feb. 5,
1990; 61 FR 41472, Aug. 8, 1996; 62 FR 240, Jan.
2, 1997]

53.246

[Reserved]

53.247 Transportation (U.S.
ment Bill of Lading).

Govern-

The U.S. Government Bill of Lading,
prescribed in 41 CFR 101–41.304, shall be
used for transportation of property, as
specified in 47.103.

53.248

[Reserved]

53.249

Termination of contracts.

(a) The following forms are prescribed for use in connection with the
termination of contracts, as specified
in subpart 49.6:
(1) SF 1034 (GAO), Public Voucher for
Purchases and Services Other Than Personal. (See 49.302(a).)
(2) SF 1435 (Rev. 9/97), Settlement Proposal (Inventory Basis). (See 49.602–1(a).)
Standard Form 1435 is authorized for
local reproduction and a copy is furnished for this purpose in part 53 of the
looseleaf edition of the FAR.
(3) SF 1436 (Rev. 9/97), Settlement Proposal (Total Cost Basis). (See 49.602–1(b).)
Standard Form 1436 is authorized for
local reproduction and a copy is furnished for this purpose in part 53 of the
looseleaf edition of the FAR.
(4) SF 1437 (Rev. 9/97), Settlement Proposal for Cost-Reimbursement Type Contracts. (See 49.602–1(c) and 49.302.)
Standard Form 1437 is authorized for
local reproduction and a copy is furnished for this purpose in part 53 of the
looseleaf edition of the FAR.
(5) SF 1438 (Rev. 7/89), Settlement Proposal (Short Form). (See 49.602–1(d).)
Standard Form 1438 is authorized for
local reproduction and a copy is furnished for this purpose in part 53 of the
looseleaf edition of the FAR.
(6) SF 1439 (Rev. 7/89), Schedule of Accounting Information. (See 49.602–3.)
Standard Form 1439 is authorized for
local reproduction and a copy is furnished for this purpose in part 53 of the
looseleaf edition of the FAR.
(7) SF 1440 (Rev. 7/89), Application for
Partial Payment. (See 49.602–4.) Standard Form 1440 is authorized for local
reproduction and a copy is furnished
for this purpose in part 53 of the looseleaf edition of the FAR.
(b) The inventory schedule forms prescribed in 53.245(f) through (j) shall be
used to support termination settlement
proposals listed in paragraph (a),
above, as specified in 49.602–2.
[48 FR 42637, Sept. 19, 1983, as amended at 55
FR 3890, Feb. 5, 1990; 62 FR 51266, Sept. 30,
1997; 62 FR 64940, Dec. 9, 1997]

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53.250
53.250

48 CFR Ch. 1 (10–1–03 Edition)
[Reserved]

53.301–18—53.301–1449
standard forms.

53.251 Contractor use of Government
supply sources (OF 347).
OF 347, Order for Supplies or Services.
OF 347, prescribed in 53.213(f), may be
used by contractors when requisitioning from the VA, as specified in
51.102(e)(3)(ii).

Illustration

of

EDITORIAL NOTE: The forms appearing in
sections 53.301–18 through 53.301–1449 follow
the text of this subpart.

[48 FR 42637, Sept. 19, 1983, as amended at 61
FR 39199, July 26, 1996]

53.302 Optional forms.
This section illustrates the optional
forms that are specified by the FAR for
use in acquisitions. The numbering system is as indicated in 53.301.

Subpart 53.3—Illustrations of Forms

53.302–17—53.302–1419A
optional forms.

53.300

Scope of subpart.

This subpart contains illustrations of
forms used in acquisitions.
53.301

Standard forms.

This section illustrates the standard
forms that are specified by the FAR for
use in acquisitions. The forms are illustrated in numerical order. The subsection numbers correspond with the
standard form numbers (e.g., Standard
Form 18 appears as 53.301–18).

Illustration of

EDITORIAL NOTE: The forms appearing in
sections 53.302–17 through 53.302–1419A follow
the text of this subpart.

53.303 Agency forms.
This section illustrates agency forms
that are specified by the FAR for use in
acquisitions. The forms are arranged
numerically by agency. The numbering
system is as indicated in 53.301.
53.303–254—53.303–347
agency forms.

Illustration

of

EDITORIAL NOTE: The forms appearing in
sections 53.303–DD–254 through 53.303–WH–347
follow the text of this subpart.

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Federal Acquisition Regulation
53.301–18

53.301–18

SF 18 (Rev. 6/95), Request for Quotations.

[60 FR 34763, July 3, 1995]

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409

53.301–24
53.301–24

48 CFR Ch. 1 (10–1–03 Edition)
Bid Bond.

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ER18DE98.005

410

Federal Acquisition Regulation

53.301–24

[63 FR 70293, Dec. 18, 1998]

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ER18DE98.006

411

53.301–25
53.301–25

48 CFR Ch. 1 (10–1–03 Edition)
Performance Bond.

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412

Federal Acquisition Regulation

53.301–25

[63 FR 70296, Dec. 18, 1998]

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413

53.301–25–A
53.301–25–A

48 CFR Ch. 1 (10–1–03 Edition)
Payment Bond.

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414

Federal Acquisition Regulation

53.301–25–A

[63 FR 70298, Dec. 18, 1998]

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415

53.301–25–B

48 CFR Ch. 1 (10–1–03 Edition)

53.301–25–B Standard Form 25–B, Continuation Sheet (For Standard Forms 24,
25, and 25–A).

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416

Federal Acquisition Regulation

53.301–25–B

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417

53.301–26
53.301–26

48 CFR Ch. 1 (10–1–03 Edition)
Standard Form 26, Award/Contract.

[50 FR 1749, Jan. 11, 1985, and 50 FR 52429, Dec. 23, 1985]

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418

Federal Acquisition Regulation
53.301–28

53.301–28

Affidavit of Individual Surety.

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419

53.301–28

48 CFR Ch. 1 (10–1–03 Edition)

[68 FR 28088, May 22, 2003]

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420

Federal Acquisition Regulation
53.301–30

53.301–30

Standard Form 30, Amendment of Solicitation/Modification of Contract.

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421

53.301–30

48 CFR Ch. 1 (10–1–03 Edition)

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422

Federal Acquisition Regulation
53.301–33

53.301–33

Solicitation, Offer and Award.

[62 FR 64941, Dec. 9, 1997]

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ER09DE97.002

423

53.301–34
53.301–34

48 CFR Ch. 1 (10–1–03 Edition)
Annual Bid Bond.

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424

Federal Acquisition Regulation

53.301–34

[55 FR 25543, June 21, 1990]

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EC01MY91.018

425

53.301–35
53.301–35

48 CFR Ch. 1 (10–1–03 Edition)
Annual Performance Bond.

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426

Federal Acquisition Regulation

53.301–35

[55 FR 25545, June 21, 1990]

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EC01MY91.020

427

53.301–44
53.301–44

48 CFR Ch. 1 (10–1–03 Edition)
Standard Form 44, Purchase Order—Invoice—Voucher.

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428

Federal Acquisition Regulation

53.301–44

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429

53.301–44

48 CFR Ch. 1 (10–1–03 Edition)

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430

Federal Acquisition Regulation

53.301–44

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EC01MY91.024

431

53.301–98

48 CFR Ch. 1 (10–1–03 Edition)

53.301–98 Standard Form 98, Notice of Intention to Make a Service Contract and
Response to Notice.

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432

Federal Acquisition Regulation

53.301–98

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433

53.301–98a

48 CFR Ch. 1 (10–1–03 Edition)

53.301–98a Standard Form 98a, Notice of Intention to Make a Service Contract
and Response to Notice (Attachment A).

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434

Federal Acquisition Regulation
53.301–99

53.301–99

Standard Form 99, Notice of Award of Contract.

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435

53.301–120
53.301–120

48 CFR Ch. 1 (10–1–03 Edition)
Standard Form 120, Report of Excess Personal Property.

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436

Federal Acquisition Regulation

53.301–120–A

53.301–120–A Standard Form 120–A, Continuation Sheet (Report of Excess Personal Property).

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437

53.301–126
53.301–126

48 CFR Ch. 1 (10–1–03 Edition)
Standard Form 126, Report of Personal Property for Sale.

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438

Federal Acquisition Regulation

53.301–126–A

53.301–126–A Standard Form 126–A, Report of Personal Property for Sale (Continuation Sheet).

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439

53.301–252
53.301–252

48 CFR Ch. 1 (10–1–03 Edition)
Standard Form 252, Architect-Engineer Contract.

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440

Federal Acquisition Regulation

53.301–252

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441

53.301–254

48 CFR Ch. 1 (10–1–03 Edition)

53.301–254 Standard Form 254, Architect-Engineer and Related Services Questionnaire.

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Federal Acquisition Regulation

53.301–254

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53.301–254

48 CFR Ch. 1 (10–1–03 Edition)

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Federal Acquisition Regulation

53.301–254

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53.301–254

48 CFR Ch. 1 (10–1–03 Edition)

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Federal Acquisition Regulation

53.301–254

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53.301–254

48 CFR Ch. 1 (10–1–03 Edition)

[59 FR 11388, Mar. 10, 1994]

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Federal Acquisition Regulation

53.301–255

53.301–255 Standard Form 255, Architect-Engineer and Related Services Questionnaire for Specific Project.

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53.301–255

48 CFR Ch. 1 (10–1–03 Edition)

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Federal Acquisition Regulation

53.301–255

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53.301–255

48 CFR Ch. 1 (10–1–03 Edition)

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Federal Acquisition Regulation

53.301–255

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53.301–255

48 CFR Ch. 1 (10–1–03 Edition)

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Federal Acquisition Regulation

53.301–255

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53.301–255

48 CFR Ch. 1 (10–1–03 Edition)

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Federal Acquisition Regulation

53.301–255

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53.301–255

48 CFR Ch. 1 (10–1–03 Edition)

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Federal Acquisition Regulation

53.301–255

[59 FR 11388, Mar. 10, 1994]

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53.301–273
53.301–273

48 CFR Ch. 1 (10–1–03 Edition)
Reinsurance Agreement for a Miller Act Performance Bond.

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Federal Acquisition Regulation

53.301–273

[63 FR 58603, Oct. 30, 1998]

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53.301–274
53.301–274

48 CFR Ch. 1 (10–1–03 Edition)
Reinsurance Agreement for a Miller Act Payment Bond.

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Federal Acquisition Regulation

53.301–274

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53.301–275
53.301–275

48 CFR Ch. 1 (10–1–03 Edition)
Reinsurance Agreement in Favor of the United States

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Federal Acquisition Regulation

53.301–275

[63 FR 70302, Dec. 18, 1998]

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465

53.301–279

48 CFR Ch. 1 (10–1–03 Edition)

53.301–279 Federal Procurement Data System (FPDS) Individual Contract Action
Report.

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Federal Acquisition Regulation

53.301–279

[65 FR 46059, July 26, 2000]

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467

53.301–281

48 CFR Ch. 1 (10–1–03 Edition)

53.301–281 Federal Procurement Data System (FPDS) Summary Contract Action
Report ($25,000 or Less).

[65 FR 46061, July 26, 2000]

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Federal Acquisition Regulation
53.301–294

53.301–294

Subcontracting Report for Individual Contracts.

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53.301–294

48 CFR Ch. 1 (10–1–03 Edition)

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470

Federal Acquisition Regulation

53.301–294

[66 FR 53494, Oct. 22, 2001]

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53.301–295
53.301–295

48 CFR Ch. 1 (10–1–03 Edition)
Summary Subcontract Report.

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Federal Acquisition Regulation

53.301–295

[66 FR 53494, Oct. 22, 2001]

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53.301–298
53.301–298

48 CFR Ch. 1 (10–1–03 Edition)
Standard Form 298, Report Documentation Page.

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Federal Acquisition Regulation

53.301–298

[55 FR 3890, Feb. 5, 1990]

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475

53.301–308
53.301–308
quest.

48 CFR Ch. 1 (10–1–03 Edition)
Standard Form 308, Request for Determination and Response to Re-

[55 FR 38519, Sept. 18, 1990]

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476

Federal Acquisition Regulation

53.301–1034

53.301–1034 Standard Form 1034, Public Voucher for Purchases and Services
Other Than Personal.

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477

53.301–1034A

48 CFR Ch. 1 (10–1–03 Edition)

53.301–1034A Standard Form 1034A, Public Voucher for Purchases and Services
Other Than Personal—Memorandum Copy.

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478

Federal Acquisition Regulation

53.301–1035

53.301–1035 Standard Form 1035, Public Voucher for Purchases and Services
Other Than Personal, Continuation Sheet.

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53.301–1035A

48 CFR Ch. 1 (10–1–03 Edition)

53.301–1035A Standard Form 1035A, Public Voucher for Purchases and Services
Other Than Personal—Memorandum, Continuation Sheet.

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480

Federal Acquisition Regulation

53.301–1093

53.301–1093 Standard Form 1093, Schedule of Withholdings Under the DavisBacon Act and/or the Contract Work Hours and Safety Standards Act.

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481

53.301–1094
53.301–1094

48 CFR Ch. 1 (10–1–03 Edition)
SF 1094, U.S. Tax Exemption Certificates.

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Federal Acquisition Regulation

53.301–1094

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53.301–1094

48 CFR Ch. 1 (10–1–03 Edition)

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484

Federal Acquisition Regulation

53.301–1094

[62 FR 243, Jan. 2, 1997]

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485

53.301–1094A
53.301–1094A

48 CFR Ch. 1 (10–1–03 Edition)
SF 1094A, Tax Exemption Certificates Accountability Record.

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486

Federal Acquisition Regulation

53.301–1094A

[62 FR 247, Jan. 2, 1997]

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53.301–1165
53.301–1165

48 CFR Ch. 1 (10–1–03 Edition)
Standard Form 1165, Receipt for Cash-Subvoucher.

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488

Federal Acquisition Regulation
53.301–1402

53.301–1402

Standard Form 1402, Certicate of Appointment.

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53.301–1403
53.301–1403

48 CFR Ch. 1 (10–1–03 Edition)
Preaward Survey of Prospective Contractor (General).

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490

Federal Acquisition Regulation

53.301–1403

[55 FR 25553, June 21, 1990]

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491

53.301–1404
53.301–1404

48 CFR Ch. 1 (10–1–03 Edition)
Preaward Survey of Prospective Contractor—Technical.

[55 FR 25555, June 21, 1990]

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492

Federal Acquisition Regulation
53.301–1405

53.301–1405

Preaward Survey of Prospective Contractor—Production.

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53.301–1405

48 CFR Ch. 1 (10–1–03 Edition)

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494

Federal Acquisition Regulation

53.301–1405

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495

53.301–1405

48 CFR Ch. 1 (10–1–03 Edition)

[55 FR 25556, June 21, 1990]

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496

Federal Acquisition Regulation
53.301–1406

53.301–1406

Preaward Survey of Prospective Contractor—Quality Assurance.

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497

53.301–1406

48 CFR Ch. 1 (10–1–03 Edition)

[62 FR 64938, Dec. 9, 1997]

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498

Federal Acquisition Regulation
53.301–1407

53.301–1407

Preaward Survey of Prospective Contractor—Financial Capability.

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499

53.301–1407

48 CFR Ch. 1 (10–1–03 Edition)

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500

Federal Acquisition Regulation

53.301–1407

[55 FR 25562, June 21, 1990]

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08:42 Jan 08, 2004

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501

53.301–1408
53.301–1408

48 CFR Ch. 1 (10–1–03 Edition)
Preaward Survey of Prospective Contractor—Accounting System.

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502

Federal Acquisition Regulation

53.301–1408

[48 FR 42637, Sept. 19, 1983, as amended at 62 FR 40244, July 25, 1997]

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503

53.301–1409
53.301–1409

48 CFR Ch. 1 (10–1–03 Edition)
Standard Form 1409, Abstract of Offers.

[54 FR 29284, July 11, 1989]

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504

Federal Acquisition Regulation
53.301–1410

53.301–1410

Standard Form 1410, Abstract of Offers—Continuation.

[54 FR 29286, July 11, 1989]

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505

53.301–1413
53.301–1413

48 CFR Ch. 1 (10–1–03 Edition)
Standard Form 1413, Statement and Acknowledgment.

[54 FR 48998, Nov. 28, 1989]

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506

Federal Acquisition Regulation
53.301–1414

53.301–1414

SF 1414 (Rev. 10/93) Consent of Surety.

[59 FR 67061, Dec. 28, 1994]

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EC01MY91.101

507

53.301–1415
53.301–1415

48 CFR Ch. 1 (10–1–03 Edition)
SF 1415 (Rev. 7/93) Consent of Surety and Increase of Penalty.

[59 FR 67063, Dec. 28, 1994]

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EC01MY91.102

508

Federal Acquisition Regulation
53.301–1416

53.301–1416

Payment Bond for Other than Construction Contracts.

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509

53.301–1416

48 CFR Ch. 1 (10–1–03 Edition)

[63 FR 70304, Dec. 18, 1998]

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510

Federal Acquisition Regulation
53.301–1417

53.301–1417

Pre-Solicitation Notice.

[55 FR 52811, Dec. 21, 1990]

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EC01MY91.105

511

53.301–1418
53.301–1418

48 CFR Ch. 1 (10–1–03 Edition)
Performance bond for other than construction contracts.

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ER04MR99.002

512

Federal Acquisition Regulation

53.301–1418

[64 FR 10549, Mar. 4, 1999]

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08:42 Jan 08, 2004

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513

53.301–1420
53.301–1420
tracts.

48 CFR Ch. 1 (10–1–03 Edition)
Standard Form 1420, Performance Evaluation—Construction Con-

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08:42 Jan 08, 2004

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514

Federal Acquisition Regulation

53.301–1420

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08:42 Jan 08, 2004

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515

53.301–1421
53.301–1421

48 CFR Ch. 1 (10–1–03 Edition)
Standard Form 1421, Performance Evaluation (Architect-Engineer).

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516

Federal Acquisition Regulation

53.301–1421

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517

53.301–1423
53.301–1423

48 CFR Ch. 1 (10–1–03 Edition)
SF 1423, Inventory Verification Survey.

[62 FR 249, Jan. 2, 1997]

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518

Federal Acquisition Regulation
53.301–1424

53.301–1424

Standard Form 1424, Inventory Disposal Report.

[55 FR 3893, Feb. 5, 1990]

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EC01MY91.113

519

53.301–1426
53.301–1426

48 CFR Ch. 1 (10–1–03 Edition)
SF 1426, Inventory Schedule A (Metals in Mill Product Form).

[62 FR 250, Jan. 2, 1997]

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520

Federal Acquisition Regulation

53.301–1427

53.301–1427 Standard Form 1427, Inventory Schedule A—Construction Sheet
(Metals in Mill Product Form).

[55 FR 3897, Feb. 5, 1990]

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EC01MY91.115

521

53.301–1428
53.301–1428

48 CFR Ch. 1 (10–1–03 Edition)
SF 1428, Inventory Schedule B.

[62 FR 251, Jan. 2, 1997]

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ER02JA97.017

522

Federal Acquisition Regulation
53.301–1429

53.301–1429

Standard Form 1429, Inventory Schedule B—Continuation Sheet.

[55 FR 3901, Feb. 5, 1990]

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EC01MY91.117

523

53.301–1430
53.301–1430

48 CFR Ch. 1 (10–1–03 Edition)
Standard Form 1430, Inventory Schedule C (Work-in-Process).

[62 FR 252, Jan. 2, 1997]

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ER02JA97.018

524

Federal Acquisition Regulation
53.301–1431

53.301–1431

Inventory Schedule C—Continuation Sheet (Work-in-Process).

[55 FR 3905, Feb. 5, 1990]

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EC01MY91.119

525

53.301–1432

48 CFR Ch. 1 (10–1–03 Edition)

53.301–1432 SF 1432, Inventory Schedule D (Special Tooling and Special Test
Equipment).

[62 FR 253, Jan. 2, 1997]

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ER02JA97.019

526

Federal Acquisition Regulation

53.301–1433

53.301–1433 Inventory Schedule D—Continuation Sheet (Special Tooling and Special Test Equipment).

[55 FR 3909, Feb. 5, 1990]

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EC01MY91.121

527

53.301–1434

48 CFR Ch. 1 (10–1–03 Edition)

53.301–1434 SF 1434, Termination Inventory Schedule E (Short Form For Use
With SF 1438 Only).

[62 FR 254, Jan. 2, 1997]

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ER02JA97.020

528

Federal Acquisition Regulation
53.301–1435

53.301–1435

Settlement Proposal (Inventory Basis).

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ER09DE97.004

529

53.301–1435

48 CFR Ch. 1 (10–1–03 Edition)

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ER09DE97.005

530

Federal Acquisition Regulation

53.301–1435

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08:42 Jan 08, 2004

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ER09DE97.006

531

53.301–1435

48 CFR Ch. 1 (10–1–03 Edition)

[62 FR 64943, Dec. 9, 1997]

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ER09DE97.007

532

Federal Acquisition Regulation
53.301–1436

53.301–1436

Settlement Proposal (Total Cost Basis).

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ER09DE97.008

533

53.301–1436

48 CFR Ch. 1 (10–1–03 Edition)

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534

Federal Acquisition Regulation

53.301–1436

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08:42 Jan 08, 2004

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ER09DE97.010

535

53.301–1436

48 CFR Ch. 1 (10–1–03 Edition)

[62 FR 64947, Dec. 9, 1997]

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ER09DE97.011

536

Federal Acquisition Regulation
53.301–1437

53.301–1437

Settlement Proposal for Cost-Reimbursement Type Contracts.

[62 FR 64951, Dec. 9, 1997]

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ER09DE97.012

537

53.301–1438
53.301–1438

48 CFR Ch. 1 (10–1–03 Edition)
Settlement Proposal (Short Form).

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EC01MY91.132

538

Federal Acquisition Regulation

53.301–1438

[55 FR 3925, Feb. 5, 1990]

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EC01MY91.133

539

53.301–1439
53.301–1439

48 CFR Ch. 1 (10–1–03 Edition)
Schedule of Accounting Information.

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540

Federal Acquisition Regulation

53.301–1439

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08:42 Jan 08, 2004

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541

53.301–1439

48 CFR Ch. 1 (10–1–03 Edition)

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EC01MY91.136

542

Federal Acquisition Regulation

53.301–1439

[55 FR 3928, Feb. 5, 1990]

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08:42 Jan 08, 2004

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EC01MY91.137

543

53.301–1440
53.301–1440

48 CFR Ch. 1 (10–1–03 Edition)
Application for Partial Payment.

[55 FR 3933, Feb. 5, 1990]

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EC01MY91.138

544

Federal Acquisition Regulation

53.301–1442

53.301–1442 Standard Form 1442, Solicitation, Offer and Award (Construction, Alteration, or Repair).

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EC01MY91.139

545

53.301–1442

48 CFR Ch. 1 (10–1–03 Edition)

[50 FR 1752, Jan. 11, 1985, and 50 FR 52429, Dec. 23, 1985]

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546

Federal Acquisition Regulation
53.301–1443

53.301–1443

Standard Form 1443, Contractor’s Request for Progress Payment.

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547

53.301–1443

48 CFR Ch. 1 (10–1–03 Edition)

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EC01MY91.142

548

Federal Acquisition Regulation
53.301–1444

53.301–1444

Request for Authorization of Additional Classification and Rate.

[53 FR 4949, Feb. 18, 1988]

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EC01MY91.143

549

53.301–1445
53.301–1445

48 CFR Ch. 1 (10–1–03 Edition)
SF 1445, Labor Standards Interview.

[62 FR 255, Jan. 2, 1997]

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ER02JA97.021

550

Federal Acquisition Regulation
53.301–1446

53.301–1446

Labor Standards Investigation Summary Sheet.

[53 FR 4951, Feb. 18, 1988]

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EC01MY91.145

551

53.301–1447
53.301–1447

48 CFR Ch. 1 (10–1–03 Edition)
Solicitation/Contract.

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552

Federal Acquisition Regulation

53.301–1447

[55 FR 38520, Sept. 18, 1990]

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08:42 Jan 08, 2004

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EC01MY91.147

553

53.301–1449
53.301–1449

48 CFR Ch. 1 (10–1–03 Edition)
Solicitation/Contract/Order for Commercial Items.

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554

Federal Acquisition Regulation

53.301–1449

[67 FR 13050, Mar. 20, 2002]

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ER20MR02.001

555

53.302–17
53.302–17

48 CFR Ch. 1 (10–1–03 Edition)
Optional Form 17, Offer Label.

[59 FR 67034, Dec. 28, 1994]

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556

Federal Acquisition Regulation
53.302–90

53.302–90

Release of Lien on Real Property.

[55 FR 38522, Sept. 18, 1990]

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EC01MY91.151

557

53.302–91
53.302–91

48 CFR Ch. 1 (10–1–03 Edition)
Release of Personal Property From Escrow.

[55 FR 38523, Sept. 18, 1990]

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EC01MY91.152

558

Federal Acquisition Regulation
53.302–307

53.302–307

Optional Form 307, Contract Award.

[62 FR 51266, Sept. 30, 1997]

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ER30SE97.002

559

53.302–308
53.302–308

48 CFR Ch. 1 (10–1–03 Edition)
Optional Form 308, Solicitation and Offer—Negotiated Acquisition.

[62 FR 51268, Sept. 30, 1997]

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560

Federal Acquisition Regulation
53.302–309

53.302–309

Optional Form 309, Amendment of Solicitation.

[62 FR 51269, Sept. 30, 1997]

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ER30SE97.004

561

53.302–312
53.302–312

48 CFR Ch. 1 (10–1–03 Edition)
Small Disadvantaged Business (SDB) Participation Report.

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562

Federal Acquisition Regulation

53.302–312

[65 FR 46062, July 26, 2000]

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08:42 Jan 08, 2004

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563

53.302–333
53.302–333

48 CFR Ch. 1 (10–1–03 Edition)
Procurement Integrity Certification for Procurement Officials.

[59 FR 11388, Mar. 10, 1994, as amended at 62 FR 233, Jan. 2, 1997]

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564

Federal Acquisition Regulation
53.302–336

53.302–336

Optional Form 336, Continuation Sheet.

[51 FR 27122, July 29, 1986, as amended at 62 FR 40244, July 25, 1997]

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565

53.302–347
53.302–347

48 CFR Ch. 1 (10–1–03 Edition)
OF 347 (Rev. 6/95), Order for Supplies or Services.

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566

Federal Acquisition Regulation

53.302–347

[60 FR 34764, July 3, 1995]

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567

53.302–348
53.302–348
ation.

48 CFR Ch. 1 (10–1–03 Edition)
Optional Form 348, Order for Supplies or Services Schedule—Continu-

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EC01MY91.158

568

Federal Acquisition Regulation
53.302–1419

53.302–1419

Optional Form 1419, Abstract of Offers—Construction.

[54 FR 29290, July 11, 1989]

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569

53.302–1419A

48 CFR Ch. 1 (10–1–03 Edition)

53.302–1419A Optional Form 1419A, Abstract of Offers—Construction, Continuation Sheet.

[54 FR 29292, July 11, 1989]

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570

Federal Acquisition Regulation

53.303–DD–254

53.303–DD–254 Department of Defense DD Form 254, Contract Security Classification Specification.

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571

53.303–DD–254

48 CFR Ch. 1 (10–1–03 Edition)

[56 FR 41741, Aug. 22, 1991]

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572

Federal Acquisition Regulation
53.303–DD–441

53.303–DD–441

Department of Defense DD Form 441, Security Agreement.

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573

53.303–DD–441

48 CFR Ch. 1 (10–1–03 Edition)

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EC01MY91.164

574

Federal Acquisition Regulation

53.303–WH–347

53.303–WH–347 Department of Labor Form WH–347, Payroll (For Contractor’s Optional Use).

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575

53.303–WH–347

48 CFR Ch. 1 (10–1–03 Edition)

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576

Federal Acquisition Regulation

53.303–WH–347

PARTS 54–99 [RESERVED]

577

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