AUTHORITY: The provisions of this Part 2-7 issued under secs. 303, 813, 72 Stat. 747, 752; 49 U.S.C. 1344, 1354.

SOURCE: The provisions of this Part 2-7 appear at 31 F.R. 16441, Dec. 23, 1966, unless otherwise noted.

Subpart 2-7.1-Fixed-Price Supply Contracts

§ 2-7.101-8 Assignment of claims.

Where the contract is for transportation services, the clause set forth in § 1-30.703 of this title shall be modified as prescribed in § 2-30.703 of this chapter.

§ 2-7.101-16

Contract Work Hours Standards Act-Overtime Compensation.

When the clause set forth in § 1-12.303 of this title is inserted in the contract, it shall be modified by deleting paragraphs (d) and (e) thereof and substituting the following:

(d) Subcontracts. The contractor shall insert paragraphs a through ƒ of this clause in all subcontracts. The term "Contractor" as used in such paragraphs in any subcontract shall be deemed to refer to the subcontractor except in the phrase "Government Prime Contractor".

(e) Payrolls and payroll records. The contractor shall maintain payrolls and basic payroll records during the course of the work and shall preserve them 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 and address of each such employee, his correct classification, rate of pay, daily and weekly number of hours worked, deductions made and actual wages paid. The contractor shall make his employment records available for inspection by authorized representatives of the contracting officer and the Department of Labor, and shall permit such representatives to interview employees during working hours on the job.

(f) Contract termination-debarment. A breach of any of the provisions of this clause titled "Contract Work Hours Standards Act-Overtime Compensation" may be grounds for termination of the contract, and for debarment as provided in 29 CFR 5.6. § 2-7.150 Additional clauses.

Unless otherwise indicated by the specific instructions for their use, the clauses set forth or cited in this section shall be included in fixed-price supply

contracts, awarded as a result of formal advertising, for delivery within the United States, its possessions, or Puerto Rico. Additional clauses may be used which are considered by each procurement office to be essential to its operations, and which are not inconsistent with or in limitation of clauses set forth in this Subpart 2-7.1, or Subpart 1-7.1 of this title. Clauses used in FAA contracts which are in addition to those contained in SF-32 are to be entitled "Additional General Provisions-Supply Contracts (supplementing SF-32)". Unless inappropriate, clauses set forth in this Subpart 2-7.1 should be used in negotiated fixed price supply contracts, and contracts for foreign delivery. § 2-7.150-1 New materials.

NEW MATERIALS

Unless otherwise specified, all materials, supplies, and equipment to be furnished must be new, unused, of current production, and of the most suitable grade for the purpose intended.

§ 2-7.150-2 Interpretation or modification.

INTERPRETATION OR MODIFICATION

No oral statement of any person, and no written statement of anyone other than the contracting officer or his authorized representative, shall modify or otherwise affect the terms or meaning of the schedule or any contract resulting therefrom. All requests for interpretations or modifications should be made in writing to the contracting officer. § 2-7.150-3 Status of performance.

(a) Except as provided in paragraph (b) of this section, insert the following clause:

STATUS OF PERFORMANCE

(a) The contractor shall notify the contracting officer in writing whenever difficulties are encountered which may delay performance under the contract, stating the reason for the delay and the estimated extent thereof. The receipt of such notice shall not, in and of itself, constitute a basis for an extension of delivery schedule, or be construed as a waiver by the Government of any rights or remedies provided by law or under this contract. Failure to give timely notice may preclude later consideration of any request for an extension of contract time.

(Paragraphs (b) and (c) are applicable only when the contract requires fabrication or manufacture, and delivery time for the first production unit exceeds 120 days.)

(b) Within 30 days from the date of contract, the contractor shall furnish in duplicate to the contracting officer, a schedule showing the projected timing for accomplishment of each phase of the work required for each contract item. Each 30 days thereafter the contractor shall furnish, in duplicate, a progress report which shall clearly indicate the current status of each phase of the scheduled work. The schedule and reports required by this section shall be in chart form unless a different manner of presentation is approved by the contracting officer. Any report which indicates a failure to meet the contract schedule, shall be accompanied by a narrative statement of the reasons for delay and the action being taken by the contractor to improve his rate of progress.

(c) The contractor agrees to insert the substance of this clause, including this paragraph, in any subcontract entered into as a result of this contract.

(b) When FAA Form 3651, "Production Progress Report", is required to be submitted by the contractor pursuant to the requirements of § 2-16.859, the above clause shall be modified by deleting the parenthetical sentence preceding paragraph (b) as well as paragraph (b) and substituting the following therefor:

(b) The contractor shall, within 30 days from the date of this contract and each 30 days thereafter until completion of all deliveries under the contract, submit FAA Form 3651, "Production Progress Report", in quadruplicate to the contracting officer. The contracting officer will furnish copies of the form to the contractor. A copy of the form is attached for information purposes.

When the contracting officer determines FAA Form 3651 should be submitted less frequently or more frequently, either 30day interval specified in the clause may be changed accordingly.

§ 2-7.150-4

Modifications to equal op

portunity clause. MODIFICATIONS TO EQUAL OPPORTUNITY CLAUSE

(a) The clause of this contract titled "Equal Opportunity" (Standard Form 32General Provisions) is amended by deleting references to the President's Committee on Equal Employment Opportunity, Executive Order No. 10925 of March 6, 1961, as amended, and section 303 of Executive Order No. 10925 of March 6, 1961, as amended; and substituting therefor the Secretary of Labor, Executive Order No. 11246 of September 24, 1965, and section 204 of Executive Order No. 11246 of September 24, 1965, respectively.

(b) In accordance with regulations of the Secretary of Labor, the rules, regulations,

orders, instructions, designations, and other directives referred to in section 403(b) of Executive Order No. 11246, remain in effect and, where applicable, shall be observed in the performance of this contract until revoked or superseded by appropriate authority.

§ 2-7.150-5

Evidence of delivery.

EVIDENCE OF DELIVERY

When the contract delivery point is "f.o.b. origin," evidence of delivery shall be submitted with invoices. In the case of freight or express shipments, this evidence shall be in the form of memorandum copies of Bills of Lading duly receipted by the carrier. In the case of parcel post shipments this evidence shall be by Post Office Certificate of Mailing Form 3817. If the invoice submitted for payment is not accompanied by evidence of delivery, discounts for prompt payment will be computed from date of receipt of such evidence of delivery or the receipt of the contractor's invoice, whichever is later. When the contract delivery point is other than "f.o.b. origin," evidence of delivery will be obtained from the consignee.

§ 2-7.150-6 Patent indemnity.

Except as provided in paragraph (c) of this section, a patent indemnity clause shall be used in contracts exceeding $5,000, in accordance with the following instructions:

(a) An effort shall be made to determine in advance of issuing the Invitation whether the supplies (or such supplies with relatively minor modifications made thereto) normally are or have been sold to the public in the commercial open market. When this determination is affirmative, the following clause entitled "Patent Indemnity (Predetermined)" shall be used. When the contract calls only in part for supplies normally sold to the public in the commercial open market, the items which are excluded shall be listed with a statement that the clause does not apply to the listed items:

PATENT INDEMNITY (PREDETERMINED) The contractor agrees to indemnify the Government and its officers, agents and employees against liability, including costs, for infringements of any U.S. letters patent (except letters patent issued upon an application which is now or may hereafter be kept secret or otherwise withheld from issue by order of the Government) arising out of the performance of this contract, or out of the use of or disposal by or for the account of the Government, of supplies furnished hereunder. The foregoing 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 the defense thereof; and further, such indemnity shall not apply if: (1) The infringement results 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 (ii) the infringement results from addition to, or change in, such supplies or components furnished which addition or change was made subsequent to delivery or performance by the contractor; or (iii) the claimed infringement is settled without the consent of the contractor, unless required by final decree of a court of competent jurisdiction.

(b) When it cannot be determined in advance of issuing the Invitation that the supplies (or such supplies with relatively minor modifications made thereto) normally are or have been sold to the public in the commercial open market, the above clause (revised as follows and entitled "Patent Indemnity (Not Predetermined)") shall be used. Revision shall consist of changing the period at the end of the first sentence to a cɔmma, and adding the following: "Which supplies or component parts either normally are or have been sold or offered for sale to the public in the commercial open market by any supplier on or before the date set for the opening of bids, or are such supplies or component parts thereof, with relatively minor modifications made thereto."

(c) When it is definitely established that the supplies (or such supplies with relatively minor modifications made thereto) are not sold to the public in the commercial open market, no patent indemnity clause shall be used.

§ 2-7.150-7 Authorization and consent. AUTHORIZATION AND CONSENT

(This clause does not apply to contracts where both performance and delivery are to be outside the United States, its possessions, or Puerto Rico.)

The Government hereby gives its authorization and consent (without prejudice to any rights of indemnification) for all use and manufacture, in the performance of this contract or any part hereof or any amendment hereto or any subcontract hereunder (including any lower-tier subcontract), of any invention described in and covered by a patent of the United States (1) embodied in

the structure or composition of any article the delivery of which is accepted by the Government under this contract, or (ii) utilized in the machinery, tools, or methods the use of which necessarily results from compliance by the contractor or the using subcontractor with (a) specifications or written provisions now or hereafter forming a part of this contract, or (b) 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 clauses, 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. § 2-7.150-8 Suspension of work.

The following clause shall be included in contracts only when the contracting officer has determined that its use is appropriate, as in cases where a work stoppage may reasonably be anticipated for reasons such as advancements of the state of the art, production or engineering breakthroughs, or realinement of programs.

SUSPENSION OF WORK

The contracting officer may order the contractor in writing, to suspend all or any part of the work for such period of time as he may determine to be appropriate in the interest of the Government. To the extent such period of time may be unreasonable, the contracting officer shall make an adjustment for any increase in the time or cost of performance of the contract (excluding profit) necessarily caused by the unreasonable period of such suspension, and the contract shall be modified in writing accordingly. No adjustment under this clause shall be made to the extent that performance by the contractor would have been delayed by other causes if the work had not been so suspended. No claim under this clause shall be allowed unless the claim, in an amount stated, is asserted in writing and made to the contracting officer within thirty (30) days after the termination of such suspension: Provided, That if the contracting officer decides the facts justify such action, he may receive and act upon any such claim asserted at any time prior to final payment under this contract. Failure to agree to any adjustment shall be a dispute concerning a question of fact within the meaning of the "Disputes" clause of this contract.

DEFINITION OF DELIVERY TERMS

The meaning of delivery terms used in this contract such as "f.o.b. origin," "f.o.b. destination," "f.a.s. vessel, port of shipment," and other delivery terms shall be as those terms are defined in 41 CFR 1-19.3. § 2-7.150-11 Collection of information. COLLECTION OF INFORMATION

In performance of this contract the contractor shall not collect information upon identical items from 10 or more persons by use of written report forms, application forms, schedules, questionnaires, or other similar methods, unless authorized in writing to do so by the contracting officer. § 2-7.150-12

property.

Government-furnished

When property will be furnished by the Government in the performance of the contract, the following clause shall be included in the contract:

GOVERNMENT-FURNISHED PROPERTY

(a) The Government shall deliver to the contractor, for use in connection with and under the terms of this contract, the property described in the schedule or specifications, together with such related data and information as the contractor may request and as may reasonably be required for the intended use of such property. The delivery or performance dates for the supplies or services to be furnished by the contractor under 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 such delivery or performance dates. If material is not on hand within 5 days prior to the date it is required, immediate notification shall be given in writing to the contracting officer. Failure to give such notice may preclude later consideration of any request for extension of contract time. If such timely notice

has been given, and the Government-furnished property is not delivered to the contractor in sufficient time to permit delivery or performance within the schedule established in the contract, the contracting officer shall, upon timely written request made by the contractor, make a determination of the delay occasioned the contractor thereby, and shall adjust the delivery or performance dates or the contract price, or both. In the event the Government-furnished property is received by the contractor in a condition not suitable for the intended use, the contractor shall, upon receipt thereof, notify the contracting officer of such fact and, as directed by the contracting officer, either (i) return such property at the Government's expense or otherwise dispose of the property or (ii) effect repairs or modifications. Upon the completion of (i) or (ii) above, the contracting officer upon written request of the contractor shall equitably adjust the delivery or performance dates or the contract price, or both. The foregoing provisions for adjustment are exclusive and the Government shall not be liable to suit for breach of contract by reason of any delay in the delivery of Government-furnished property or delivery of such property in a condition not suitable for its intended use.

(b) By notice in writing the contracting officer may decrease the property furnished or to be furnished by the Government under this contract. In any such case, the contracting officer upon written request of the contractor shall equitably adjust the delivery or performance or the contract price, or both.

(c) Title to the Government-furnished property shall remain in the Government. Title to Government-furnished property shall not be affected by the incorporation or attachment thereof to any property not owned by the Government, nor shall such Government-furnished property, or any part thereof, be or become a fixture or lose its identity as personality by reason of affixation to any realty. The contractor agrees to promptly receipt for all Governmentfurnished property and to maintain a suitable inventory control system acceptable to the contracting officer.

(d) The Government-furnished property shall, unless otherwise provided herein, be used only for the performance of this contract. The contractor shall maintain and administer, in accordance with sound industrial practices, a program for the maintenance, repair, protection and preservation of Government-furnished property.

(e) Unless otherwise provided in this contract, the contractor upon delivery to it of any Government-furnished property, assumes the risk of, and shall be responsible for, any loss thereof or damage thereto except for reasonable wear and tear, and except to the extent that such property is con

sumed in the performance of the contract. The contractor shall not be liable for loss or destruction of or damage to Governmentfurnished property if such loss, destruction or damage is due to causes beyond the control and without the fault or negligence of the contractor.

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

(g) Upon the completion of this contract, or at such earlier date 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-furnished property not consumed in the performance of this contract (including any resulting scrap), or not theretofore delivered to the Government, and shall deliver or make such other disposal of such Government-furnished 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 in such manner as the contracting officer may direct. § 2-7.150-13 Rights in data.

Insert the appropriate clause set forth in § 2-9.5302 or § 2-9.5303 of this chapter, in accordance with the instructions for their use as described in § 2-9.5301-1 of this chapter.

§ 2-7.150-14 Dissemination of contract information.

DISSEMINATION OF CONTRACT INFORMATION

The contractor shall not publish, permit to be published, or distribute for public consumption, any information, oral or written, concerning the objectives or results or conclusions made pursuant to performance of this contract, without the prior written consent of the contracting officer. (Two copies of any material proposed to be published or distributed shall be submitted to the contracting officer.)

§ 2-7.150-15 Security requirements.

The following clause shall be included in all contracts which are classified as "Confidential," including "ConfidentialModified Handling Authorized," or higher and in any other contracts the performance of which will require access to such classified information or material. The contracting officer shall notify the Security Division, Office of Compliance and Security, when a contract has been executed which contains a security requirements clause.

SECURITY REQUIREMENTS

(a) The provisions of this clause shall apply to the extent that this contract in