the country concerned or political subdivisions thereof, or which 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.

(2) The Contractor shall promptly notify the Contracting Officer of all matters pertaining to taxes or duties which reasonably may be expected to result in either an increase or a decrease in the contract price.

(3) Whenever an increase or decrease in the contract price may be required under this clause, the Contractor shall take action as directed by the Contracting Officer, and the contract price shall be equitably adjusted to cover the cost of such action, including any interest, penalty, and reasonable attorneys' fees.

The clause set forth in § 1-1.315-3 of this title shall be inserted under the conditions and in the manner prescribed in § 1-1.315 of this title. The clause shall be altered to refer to FS-565 rather than Standard Form 32.

§ 6-7.101-28 Termination for convenience of the Government.

The following clause shall be inserted in lieu of that referred to in § 1-7.101-28 of this title for all contracts for "commercial items" as defined in § 1-3.807-1 (b) (2) (B) of this title:

TERMINATION FOR CONVENIENCE OF THE

GOVERNMENT

The Government shall have the right to terminate this contract at any time by giving written notice to the Contractor not less than 10 days prior to the effective date of termination. Should this contract be terminated pursuant to this clause prior to the date it would otherwise expire, the following shall apply:

(a) The Government shall complete all payments which shall then be due;

(b) The Contractor shall deliver to the Government all work in process under this contract requested by the Government;

(c) The Government shall pay to the Contractor any sum which is determined by the Contracting Officer as equitable for any work in process, which sum shall include any costs incurred by the Contractor in terminating any subcontract.

(d) Should the Contractor be unwilling to accept the sum so determined by the Contracting Officer the matter shall be treated as a dispute concerning a question of fact within the meaning of the clause entitled "Disputes" in the General Provisions of this contract.

§ 6-7.150 Additional required clauses.

§ 6-7.150-1 Prohibition against items from certain areas.

PROHIBITION AGAINST ITEMS FROM CERTAIN AREAS

(a) No supplies, however, processed, which are or were located in or transported from or through China Mainland (including Singkiang, Manchuria, and Tibet), North Viet-Nam, North Korea, or Cuba may be used in the performance of this contract.

(b) The Contractor agrees to insert the provisions of this clause, including this paragraph (b) in all subcontracts hereunder. § 6-7.150-2 U.S. products and services (Balance of Payments Program).

The clause set forth in § 1-6.806-4 of this title shall be inserted unless the procurement qualifies as an exception as provided by § 1-6.805 of this title and § 6-6.805 of this chapter.

§ 6-7.151 Optional clauses.

The clauses set forth in this section may be used when applicable to specific procurements, and may be modified when required.

§ 6-7.151-1 Security requirements.

PERSONNEL

The Contractor agrees, if requested, to furnish the Government with the name, date and place of birth, current address, and such other biographical information as is readily available to the Contractor, concerning any individual before permitting such individual to be used in the performance of this contract. The Contractor further agrees to permit only those individuals approved by the Government to be used in the performance of this contract.

§ 6-7.151-2 Notice.

NOTICE

Any order, notice, or request, relating to this contract given by either party to the other shall be in writing, and mailed, or delivered by hand, to the party entitled thereto at the address set forth herein. All modifications to the contract must be made, in writing, by the Government's Contracting Officer.

§ 6-7.151-3 Notice of shipments.

NOTICE OF SHIPMENTS

At the time of delivery of any shipment of supplies to a carrier for transportation, the Contractor shall give prepaid notice of shipment to the consignee establishment, and to such other persons designated by the Contracting Officer, and in accordance with his instructions. If such instructions have not been received by the Contractor at least

(a) The Government may, by written notice to the Contractor, terminate the right of the Contractor, to proceed under this contract if it is found, after notice and hearing, by the Secretary or his duly authorized representative, that gratuities (in the form of entertainment, gifts, or otherwise) were offered or given by the Contractor, or any agent or representative of the Contractor, to any officer or employee of the Government with a view toward securing a contract or securing favorable treatment with respect to the awarding, amending, or the making of any determinations with respect to this contract.

(b) In the event that this contract is terminated as provided in paragraph (a) above, the Government shall have the same rights and remedies provided in the clause entitled "Default" in the General Provisions with respect to defaults of the Contractor, and any other rights and remedies provided by law or under this contract.

The English language version of this contract shall be the official version and binding on both parties.

§ 6-7.151-6 Authorization to perform. AUTHORIZATION TO PERFORM

The contractor warrants that he has been duly authorized to operate and do business in the country or countries in which this contract is to be performed; that he has obtained, at no cost to the U.S. Government, all necessary licenses and permits required in connection with the contract; and that he will fully comply with all laws, decrees, labor standards, and regulations of such country or countries during the performance of this contract.

§ 6-7.151-7 Seller's invoices.

The following clause is applicable only to negotiated contracts.

SELLER'S INVOICES

Invoices shall be prepared and submitted in quadruplicate unless otherwise specified. Invoices shall contain the following information: Contract and order number (if any), item numbers, description of supplies or services, sizes, quantities, unit prices, and extended totals. Bill of lading number and weight of shipment will be shown for shipments made on Government bills of lading.

§ 6-7.151-8 Discounts.

The following clause is applicable only to negotiated contracts.

DISCOUNTS

In connection with any discount provided for, time will be computed from date of delivery of the supplies to carrier when delivery and acceptance are at point of origin or from date of delivery at destination or port of embarkation when delivery and acceptance are at either of those points, or from date correct invoice or voucher is received in the office specified by the Government if the latter date is later than the date of delivery. Payment is deemed to be made, for the purpose of earning the discount, on the date of mailing of the Government check.

§ 6-7.151-9 Requirements clause.

The following clause is applicable only to requirements contracts prepared in accordance with § 1-3.409 (b) of this title.

REQUIREMENTS CLAUSE

(a) The Government agrees to purchase all of its requirements of (specific property or services) for use at (designated activities) during the period from

to from the Contractor. The Government shall not, however, be obligated to make any purchases in excess of its actual requirements.

(b) The Contractor agrees to furnish up to (maximum delivery obligation) of (specific property or services) while this contract remains in effect. The Contractor shall not, however, be obligated to deliver in excess of (quantity) during any (time) period, nor less than (quantity) in any delivery.

(c) Subject to paragraph (b) above, and upon the placing of orders by the Government at least days before the date of requested delivery, the Contractor agrees to make deliveries under this contract at any of the following designated point(s):

(d) The Government shall use a purchase order (Foreign Service Form 455) in making purchases against this contract.

§ 6-7.151-10 Indefinite quantity clause.

The following clause is applicable only to indefinite quantity contracts prepared in accordance with § 1-3.409 (c) of this title.

INDEFINITE QUANTITY CLAUSE

(a) The Contractor agrees to furnish up to (max. delivery obligation) of (specific property or services) during the period from to

to

the Government. The Contractor shall not, however, be obligated to deliver in excess of (quantity) during any (time) period, nor less than (quantity) in any delivery.

(b) Subject to paragraph (a) above, and upon the placing of orders by the Government at least day(s) before the date of requested delivery, the Contractor agrees to make deliveries under this contract at any of the following designated points:

(c) The Government agrees to purchase a minimum of (minimum order obligation) of (specific property or services) while this contract is in effect.

(d) The Government shall use a purchase order (Foreign Service Form 455) in placing orders against this contract up to the Government's minimum purchase obligation, and in making purchases against this contract over the Government's minimum purchase obligation.

§ 6-7.151-11 Contracting officer's representative.

The following clause may be used in designating an authorized representative of the contracting officer (such a designee may not make any commitments or changes which will affect the price, quality, quantity or delivery terms):

REPRESENTATIVES OF THE CONTRACTING
OFFICER

The Contracting Officer reserves the right to designate representatives to act for him in furnishing technical guidance and advice or, generally supervise the work to be performed under this contract. Such designation will be in writing and will define the scope and limitations of authority. (Such a designee may not make any commitments or changes which will affect the price, quality, quantity, or delivery terms.) A copy of the designation shall be furnished to the Contractor.

§ 6-7.151-12 Labor, equipment.

supplies and

LABOR, SUPPLIES AND EQUIPMENT

The Contractor shall furnish all labor, supplies, and equipment necessary for the performance of this contract. Necessary storage space for supplies and equipment will be furnished by the Government.

§ 6-7.151-13 Protection of Government buildings, equipment, and vegetation. PROTECTION OF GOVERNMENT BUILDINGS, EQUIPMENT, AND VEGETATION

The Contractor shall use reasonable care to avoid damaging existing buildings, equipment, and vegetation (such as trees, shrubs, and grass) on the Government installation. If the Contractor fails to do so and damages any such buildings, equipment, or vegetation, he shall replace or repair the damage at no expense to the Government as directed by the Contracting Officer. If he fails or refuses to make such repair or replacement, the Contractor shall be liable for the cost thereof which may be deducted from the contract price.

The following price escalation clause is authorized for use in negotiated fixedprice supply contracts, described in § 6-3.404-3 for "commercial items" for which established prices exist and have been verified in accordance with criteria in § 1-3.807(b)(2) of this title. The clause may be modified for use with labor-hour contracts as described in § 1-3.406-2 of this title. In administering contracts containing this clause, Contracting Officers are cautioned to give immediate attention to requests for price escalation. According to paragraph (f) of the clause, a permissible request establishes a new contract price pending agreement or cancellation of the contract.

PRICE ESCALATION

(a) The Contractor warrants that the unit prices stated herein, excluding any part of the prices which reflects requirements for preservation, packaging, and packing beyond standard commercial practice, are not in excess of the Contractor's applicable established prices in effect on the contract date for like quantities of the supplies covered by this contract. The term "established price" as used in this clause is the net price after applying any applicable standard trade discounts offered by the Contractor from his list or catalog price.

(b) The Contractor shall promptly notify the Contracting Officer as to the amount and effective date of each decrease in any applicable established price, and each applicable contract unit price shall be decreased by the same percentage that the applicable established price is decreased. Any such decrease in a unit price shall apply to those supplies delivered on and after the effective date of each applicable decrease in the Contractor's established price, and this contract shall be amended accordingly. The Contractor shall certify on each invoice submitted under the contract that each unit price stated therein reflects all decreases, if any, which the Contractor had made in the established price applicable thereto, since the contract date; or shall certify on the final invoice that all such decreases have been applied to supplies delivered on and after the effective date of each such decrease in the Contractor's established prices.

(c) The Contractor may from time to time after the date of this contract and during the performance hereof, by written notice to the Contracting Officer, request an upward adjustment in any of the contract unit prices to be effective as of a date to be specified by the Contractor. Such request shall be acted upon in accordance with the following provisions of this clause.

(d) An upward adjustment in a contract unit price may be made under this clause

only in accordance with the following conditions:

(1) Such an upward adjustment shall be made only if the Contractor's applicable established price has increased subsequent to the contract date.

(2) No unit price shall be increased by a percentage greater than the percentage increase in the Contractor's applicable established price.

(3) The aggregate of the increases in any unit price made under this clause shall not exceed percent of the original appli

cable unit price.

(4) No adjusted unit price shall be effective earlier than the effective date of the increase in the applicable established price, or the date of receipt by the Contracting Officer of the Contractor's request for adjustment, whichever is the later.

(5) No upward adjustment in unit prices hereunder shall apply to supplies which were required by the contract delivery schedule to be delivered prior to the effective date of the related increased in the applicable established price, unless the Contractor's failure to delivery supplies in accordance with the delivery schedule results from causes beyond the control and without the fault or negligence of the Contractor, within the meaning of paragraph (c) of the clause of this contract entitled "Default", in which case the contract shall be amended to make an equitable extension of the delivery schedule.

(e) In the event the requested upward adjustment in any contract unit price is acceptable to the Contracting Officer, he shall so notify the Contractor, and the contract shall be amended accordingly. In the event the requested upward adjustment is not acceptable to the Contracting Officer, or if the Contracting Officer does not reach an agreement with the Contractor with respect to a price increase, the Contracting Officer may, within 30 days after receipt of the Contractor's request, cancel without liability to either party the Contractor's right to proceed with performance of that portion of the contract which is undelivered at the time of such cancellation.

(f) During the period after the Contractor has requested an upward adjustment, and prior to an agreement between the parties with respect to the request, or cancellation of the contract pursuant to paragraph (e), the Contractor shall continue deliveries according to the terms of the contract. The Contractor shall be paid for such deliveries at the applicable increased unit prices as requested; provided, that such requested increases satisfy all the conditions and do not exceed the limitations of paragraph (d), and provided further, that if the parties agree on an increase less than that requested, payments previously made at the requested amount shall be adjusted accordingly. If the Contracting Officer neither reaches an agreement with the Contractor on the requested adjustment, nor cancels the contract, the Contractor shall continue deliv

(a) The clause below provides a means for the fair and expeditious administrative settlement of claims arising out of certain delays and interruptions in the contract work caused by the acts, or failures to act, of the contracting officer where the contract does not otherwise specifically provide for an equitable adjustment because of such delay or interruption (e.g., Government-furnished property, changes, etc.).

(b) The clause does not authorize the contracting officer to order a suspension, delay or interruption of the work and it shall not be used as the basis for or to justify such an order.

(c) When the contracting officer has notice of an unordered delay or interruption covered by the clause, he will act to end it or take other appropriate action as soon as practicable.

(d) The contracting officer shall retain in the file a record of all negotiations leading to any adjustment made under the clause, including cost or pricing data. GOVERNMENT DELAY OF WORK

(a) If the performance of all or any part of the work is delayed or interrupted by an act of the Contracting Officer in the administration of this contract, which act is not expressly or impliedly authorized by this contract, or by his failure to act within the time specified in this contract (or within a reasonable time if no time is specified), an adjustment (excluding profit) shall be made for any increase in the cost of performance of this contract caused by such delay or interruption and the contract modified in writing accordingly. Adjustment shall be made also in the delivery or performance dates and any other contractual provision affected by such delay or interruption. However, no adjustment shall be made under this clause for any delay or interruption (i) to the extent that performance would have been delayed or interrupted by any other cause, including the fault or negligence of the Contractor; or (ii) for which an adjustment is provided or excluded under any other provision of this contract.

(b) No claim under this clause shall be allowed (i) for any costs incurred more than twenty (20) days before the Contractor shall have notified the Contracting Officer in writing of the act or failure to act involved; and (ii) unless the claim, in an amount stated,

In view of the established policy that the Government is a self-insurer, as provided in § 1-10.301 of this title, contractors should not ordinarily be required to assume risks which a private buyer would guard against through insurance. There may be occasions, however, when a contractor's assumption of such risks is in the best interest of the Government and the following clause is authorized for use on those occasions. In the determination of it's use, the Contracting Officer should weigh the advantages it provides against the likelihood of resulting increased prices.

INDEMNIFICATION

The Contractor expressly agrees to indemnify and to save the Government, its officers, agents, servants, and employees harmless from and against any claim, loss, damages, injury, and liability, however caused, resulting from or arising out of the Contractor's fault or negligence in connection with the performance of work under this contract. Further, it is agreed that any negligence or alleged negligence of the Government, its officers, agents, servants and employees, shall not be a bar to a claim for indemnification unless the act or omission of the Government, its officers, agents, servants and employees is the sole, competent, and producing cause of such claim, loss, damages, injury, or liability.

§ 6-7.151-17 Commercial warranty.

COMMERCIAL WARRANTY

The Contractor agrees that the supplies or services furnished under this contract shall be covered by the most favorable commercial warranties the Contractor gives to any customer for such supplies or services and that the rights and remedies provided herein are in addition to and do not limit any rights afforded to the Government by any other clause of this contract.

§ 6-7.151-18 Price warranty.

PRICE WARRANTY

The Contractor warrants that the prices of the items set forth herein do not exceed those charged by the Contractor to any other customer purchasing the same items in like or comparable quantities.

§ 6-7.151-19 Availability of funds.

The following clause is applicable to certain types of contracts whose performance periods cross fiscal years. These contracts are identified in Subpart 6-3.4 of this chapter.

AVAILABILITY OF FUNDS

Funds are not presently available for performance under this contract beyond June 30, 19. The Government's obligation for performance of this contract beyond this date is contingent upon the availability of appropriated funds from which payment for the contract purposes can be made. No legal liability on the part of the Government for payment of any money for performance under this contract beyond June 30, 19--, shall arise unless and until funds are made available to the Contracting Officer for such performance and notice of such availability, to be confirmed in writing by the Contracting Officer, is given to the Contractor.

(a) With respect to motor vehicles purchased by the Department of State or the U.S. Information Agency for use by such agencies in foreign countries, the Secretary of the Treasury has granted an exemption from the federal excise tax imposed by 26 U.S.C. 4061(a) provided such vehicles are exported from the United States by such Agencies within a period of 6 months from the date of delivery of such vehicles to the agencies, notwithstanding any use made by such agencies of the vehicles within the United States during the 6-month period. The contract for sale of such vehicles must include a statement to the effect that the sale of the vehicles is made for the exclusive use of the United States and qualifies for the exemption under order of the Secretary of the Treasury dated May 6, 1964 (29 F.R. 6254). The manufacturers must be furnished proof of export within 6 months after the sale.

(b) Taxable articles purchased for presentation abroad as gifts to foreign dignitaries and taxable articles pur