FAR section 52.212-4

52.212-4
____ Subcontinent Asian (Asian-Indian) American (persons with origins from India, Pakistan, Bangladesh, Sri Lanka,
Bhutan, the Maldives Islands, or Nepal).
____ Individual/concern, other than one of the preceding.

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

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 (MAR 2009)
(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. If
repair/replacement or reperformance will not correct the
defects or is not possible, the Government may seek an equitable price reduction or adequate consideration for acceptance
of nonconforming supplies or services. The Government must
exercise its post-acceptance 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 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.
52.2-34.2

FEDERAL ACQUISITION REGULATION
(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.

FAC 2005–27 OCTOBER 17, 2008
SUBPART 52.2—TEXT OF PROVISIONS AND CLAUSES
(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.— (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.
(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—
(i) Remit the overpayment amount to the payment
office cited in the contract along with a description of the
overpayment including the—
(A) Circumstances of the overpayment (e.g.,
duplicate payment, erroneous payment, liquidation errors,
date(s) of overpayment);
(B) Affected contract number and delivery order
number, if applicable;
(C) Affected contract line item or subline item, if
applicable; and
(D) Contractor point of contact.

52.212-4
(ii) Provide a copy of the remittance and supporting
documentation to the Contracting Officer.
(6) Interest. (i) All amounts that become payable by the
Contractor to the Government under this contract 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 611 of the Contract Disputes Act of 1978 (Public
Law 95-563), which is applicable to the period in which the
amount becomes due, as provided in (i)(6)(v) of this clause,
and then at the rate applicable for each six-month period as
fixed by the Secretary until the amount is paid.
(ii) The Government may issue a demand for payment to the Contractor upon finding a debt is due under the
contract.
(iii) Final decisions. The Contracting Officer will
issue a final decision as required by 33.211 if—
(A) The Contracting Officer and the Contractor
are unable to reach agreement on the existence or amount of
a debt within 30 days;
(B) The Contractor fails to liquidate a debt previously demanded by the Contracting Officer within the timeline specified in the demand for payment unless the amounts
were not repaid because the Contractor has requested an
installment payment agreement; or
(C) The Contractor requests a deferment of collection on a debt previously demanded by the Contracting
Officer (see 32.607-2).
(iv) If a demand for payment was previously issued
for the debt, the demand for payment included in the final
decision shall identify the same due date as the original
demand for payment.
(v) Amounts shall be due at the earliest of the following dates:
(A) The date fixed under this contract.
(B) The date of the first written demand for payment, including any demand for payment resulting from a
default termination.
(vi) The interest charge shall be computed for the
actual number of calendar days involved beginning on the due
date and ending on—
(A) The date on which the designated office
receives payment from the Contractor;
(B) The date of issuance of a Government check
to the Contractor from which an amount otherwise payable
has been withheld as a credit against the contract debt; or
(C) The date on which an amount withheld and
applied to the contract debt would otherwise have become
payable to the Contractor.
(vii) The interest charge made under this clause may
be reduced under the procedures prescribed in 32.608-2 of the
Federal Acquisition Regulation in effect on the date of this
contract.
52.2-34.3

FAC 2005–32 MARCH 31, 2009
52.212-4
(j) Risk of loss. Unless the contract specifically provides
otherwise, risk of loss or damage to the supplies provided
under this contract shall remain with the Contractor until, and
shall pass to the Government upon:
(1) Delivery of the supplies to a carrier, if transportation
is f.o.b. origin; or
(2) Delivery of the supplies to the Government at the
destination specified in the contract, if transportation is f.o.b.
destination.
(k) Taxes. The contract price includes all applicable Federal, State, and local taxes and duties.
(l) Termination for the Government’s convenience. The
Government reserves the right to terminate this contract, or
any part hereof, for its sole convenience. In the event of such
termination, the Contractor shall immediately stop all work
hereunder and shall immediately cause any and all of its suppliers and subcontractors to cease work. Subject to the terms
of this contract, the Contractor shall be paid a percentage of
the contract price reflecting the percentage of the work performed prior to the notice of termination, plus reasonable
charges the Contractor can demonstrate to the satisfaction of
the Government using its standard record keeping system,
have resulted from the termination. The Contractor shall not
be required to comply with the cost accounting standards or
contract cost principles for this purpose. This paragraph does
not give the Government any right to audit the Contractor’s
records. The Contractor shall not be paid for any work performed or costs incurred which reasonably could have been
avoided.
(m) Termination for cause. The Government may terminate this contract, or any part hereof, for cause in the event of
any default by the Contractor, or if the Contractor fails to comply with any contract terms and conditions, or fails to provide
the Government, upon request, with adequate assurances of
future performance. In the event of termination for cause, the
Government shall not be liable to the Contractor for any
amount for supplies or services not accepted, and the Contractor shall be liable to the Government for any and all rights and
remedies provided by law. If it is determined that the Government improperly terminated this contract for default, such termination shall be deemed a termination for convenience.
(n) Title. Unless specified elsewhere in this contract, title
to items furnished under this contract shall pass to the Government upon acceptance, regardless of when or where the
Government takes physical possession.
(o) Warranty. The Contractor warrants and implies that the
items delivered hereunder are merchantable and fit for use for
the particular purpose described in this contract.
(p) Limitation of liability. Except as otherwise provided by
an express 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,
52.2-34.4

FEDERAL ACQUISITION REGULATION
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. 3701, et seq., Contract Work Hours
and Safety Standards Act; 41 U.S.C. 51-58, Anti-Kickback
Act of 1986; 41 U.S.C. 265 and 10 U.S.C. 2409 relating to
whistleblower protections; Section 1553 of the American
Recovery and Reinvestment Act of 2009 relating to whistleblower protections for contracts funded under that Act;
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.
(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.

FAC 2005–27 OCTOBER 17, 2008
SUBPART 52.2—TEXT OF PROVISIONS AND CLAUSES
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 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-ofname 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.
(End of clause)
Alternate I (Oct 2008). When a time-and-materials or
labor-hour contract is contemplated, substitute the following
paragraphs (a), (e), (i) and (l) for those in the basic clause.
(a) Inspection/Acceptance. (1) 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 will perform inspections
and tests in a manner that will not unduly delay the work.

52.212-4
erwise specified in paragraph (a)(6) of this clause, the cost of
replacement or correction shall be determined under paragraph
(i) of this 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. Unless otherwise specified below, the portion of the “hourly rate” attributable to profit
shall be 10 percent. 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. [Insert portion of labor rate attributable to profit.]
(5)(i) 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—
(A) 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
(B) Terminate this contract for cause.
(ii) Failure to agree to the amount of increased cost to
be charged to the Contractor shall be a dispute under the Disputes clause of the contract.
(6) Notwithstanding paragraphs (a)(4) and (5) 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—
(i) Fraud, lack of good faith, or willful misconduct on
the part of the Contractor's managerial personnel; or
(ii) 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.
(7) 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.

(2) If the Government performs inspection or tests 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.

(8) 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.

(3) Unless otherwise specified in the contract, the Government will accept or reject services and materials at the place
of delivery as promptly as practicable after delivery, and they
will be presumed accepted 60 days after the date of delivery,
unless accepted earlier.

(9) 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.

(4) 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 oth-

(e) Definitions. (1) The clause at FAR 52.202-1, Definitions, is incorporated herein by reference. As used in this
clause—
(i) Direct materials means 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 or
service.

52.2-35

52.212-4

FEDERAL ACQUISITION REGULATION

(ii) Hourly rate means the rate(s) prescribed in the
contract for payment for labor that meets the labor category
qualifications of a labor category specified in the contract that
are—
(A) Performed by the contractor;
(B) Performed by the subcontractors; or
(C) Transferred between divisions, subsidiaries, or
affiliates of the contractor under a common control.
(iii) Materials means—
(A) Direct materials, including supplies transferred
between divisions, subsidiaries, or affiliates of the contractor
under a common control;
(B) Subcontracts for supplies and incidental services for which there is not a labor category specified in the contract;
(C) Other direct costs (e.g., incidental services for
which there is not a labor category specified in the contract,
travel, computer usage charges, etc.);
(D) The following subcontracts for services which
are specifically excluded from the hourly rate: [Insert any subcontracts for services to be excluded from the hourly rates prescribed in the schedule.]; and
(E) Indirect costs specifically provided for in this
clause.
(iv) Subcontract means any contract, as defined in
FAR Subpart 2.1, entered into with a subcontractor to furnish
supplies or services for performance of the prime contract or a
subcontract including transfers between divisions, subsidiaries,
or affiliates of a contractor or subcontractor. It includes, but is
not limited to, purchase orders, and changes and modifications
to purchase orders.
(i) Payments. (1) Services accepted. Payment shall be
made for services accepted by the Government that have been
delivered to the delivery destination(s) set forth in this contract.
The Government will pay the Contractor as follows upon the
submission of commercial invoices approved by the Contracting Officer:
(i) Hourly rate.
(A) The amounts shall be computed by multiplying
the appropriate hourly rates prescribed in the contract by the
number of direct labor hours performed. Fractional parts of an
hour shall be payable on a prorated basis.
(B) The rates shall be paid for all labor performed
on the contract that meets the labor qualifications specified in
the contract. Labor hours incurred to perform tasks for which
labor qualifications were specified in the contract will not be
paid to the extent the work is performed by individuals that do
not meet the qualifications specified in the contract, unless specifically authorized by the Contracting Officer.
(C) Invoices may be submitted once each month
(or at more frequent intervals, if approved by the Contracting

52.2-36

(FAC 2005–27)

Officer) to the Contracting Officer or the authorized representative.
(D) When requested by the Contracting Officer or
the authorized representative, the Contractor shall substantiate
invoices (including any subcontractor hours reimbursed at the
hourly rate in the schedule) by evidence of actual payment, individual daily job timecards, records that verify the employees
meet the qualifications for the labor categories specified in the
contract, or other substantiation specified in the contract.
(E) 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.
(1) If no overtime rates are provided in the
Schedule and the Contracting Officer approves overtime work
in advance, overtime rates shall be negotiated.
(2) Failure to agree upon these overtime rates
shall be treated as a dispute under the Disputes clause of this
contract.
(3) 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.
(ii) Materials.
(A) If the Contractor furnishes materials that meet
the definition of a commercial item at FAR 2.101, the price to
be paid for such materials shall be the contractor's established
catalog or market price, adjusted to reflect the—
(1) Quantities being acquired; and
(2) Any modifications necessary because of
contract requirements.
(B) Except as provided for in paragraph
(i)(1)(ii)(A) and (D)(2) of this clause, the Government will
reimburse the Contractor the actual cost of materials (less any
rebates, refunds, or discounts received by the contractor that are
identifiable to the contract) provided the Contractor—
(1) Has made payments for materials in accordance with the terms and conditions of the agreement or
invoice; or
(2) Makes these payments within 30 days of the
submission of the Contractor’s payment request to the Government and such payment is in accordance with the terms and conditions of the agreement or invoice.
(C) To the extent able, the Contractor shall—
(1) Obtain materials at the most advantageous
prices available with due regard to securing prompt delivery of
satisfactory materials; and
(2) Give credit to the Government for cash and
trade discounts, rebates, scrap, commissions, and other amounts
that are identifiable to the contract.
(D) Other Costs. Unless listed below, other direct
and indirect costs will not be reimbursed.

FAC 2005–27 OCTOBER 17, 2008
SUBPART 52.2—TEXT OF PROVISIONS AND CLAUSES
(1) Other Direct Costs. The Government will
reimburse the Contractor on the basis of actual cost for the following, provided such costs comply with the requirements in
paragraph (i)(1)(ii)(B) of this clause: [Insert each element of
other direct costs (e.g., travel, computer usage charges, etc.
Insert “None” if no reimbursement for other direct costs will be
provided. If this is an indefinite delivery contract, the Contracting Officer may insert “Each order must list separately the elements of other direct charge(s) for that order or, if no
reimbursement for other direct costs will be provided, insert
‘None’.”]
(2) Indirect Costs (Material Handling, Subcontract Administration, etc.). The Government will reimburse the
Contractor for indirect costs on a pro-rata basis over the period
of contract performance at the following fixed price: [Insert a
fixed amount for the indirect costs and payment schedule. Insert
“$0” if no fixed price reimbursement for indirect costs will be
provided. (If this is an indefinite delivery contract, the Contracting Officer may insert “Each order must list separately the fixed
amount for the indirect costs and payment schedule or, if no
reimbursement for indirect costs, insert ‘None’).”]
(2) 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 the performance of 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 performance
of 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.
(3) Ceiling price. The Government will 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
notifies the Contractor in writing that the ceiling price has been
increased and specifies 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

52.212-4
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.
(4) Access to records. At any time before final payment
under this contract, the Contracting Officer (or authorized representative) will have access to the following (access shall be
limited to the listing below unless otherwise agreed to by the
Contractor and the Contracting Officer):
(i) Records that verify that the employees whose time
has been included in any invoice meet the qualifications for the
labor categories specified in the contract;
(ii) For labor hours (including any subcontractor
hours reimbursed at the hourly rate in the schedule), when timecards are required as substantiation for payment—
(A) The original timecards (paper-based or electronic);
(B) The Contractor’s timekeeping procedures;
(C) Contractor records that show the distribution of
labor between jobs or contracts; and
(D) Employees whose time has been included in
any invoice for the purpose of verifying that these employees
have worked the hours shown on the invoices.
(iii) For material and subcontract costs that are reimbursed on the basis of actual cost—
(A) Any invoices or subcontract agreements substantiating material costs; and
(B) Any documents supporting payment of those
invoices.
(5) Overpayments/Underpayments. Each payment previously made shall be subject to reduction to the extent of
amounts, on preceding invoices, 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. The Contractor shall promptly pay any such reduction within 30 days unless the parties agree otherwise. The
Government within 30 days will pay any such increases, unless
the parties agree otherwise. The Contractor’s payment will be
made by check. If the Contractor becomes aware of a duplicate
invoice payment or that the Government has otherwise overpaid
on an invoice payment, the Contractor shall—
(i) Remit the overpayment amount to the payment
office cited in the contract along with a description of the overpayment including the—
(A) Circumstances of the overpayment (e.g., duplicate payment, erroneous payment, liquidation errors, date(s) of
overpayment);
(B) Affected contract number and delivery order
number, if applicable;
(C) Affected contract line item or subline item, if
applicable; and
(D) Contractor point of contact.
(ii) Provide a copy of the remittance and supporting
documentation to the Contracting Officer.

52.2-37

FAC 2005–27 OCTOBER 17, 2008
52.212-4
(6)(i) All amounts that become payable by the Contractor to the Government under this contract 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 611 of the Contract Disputes Act of 1978 (Public Law 95563), which is applicable to the period in which the amount
becomes due, and then at the rate applicable for each six month
period as established by the Secretary until the amount is paid.
(ii) The Government may issue a demand for payment
to the Contractor upon finding a debt is due under the contract.
(iii) Final Decisions. The Contracting Officer will
issue a final decision as required by 33.211 if—
(A) The Contracting Officer and the Contractor are
unable to reach agreement on the existence or amount of a debt
in a timely manner;
(B) The Contractor fails to liquidate a debt previously demanded by the Contracting Officer within the timeline
specified in the demand for payment unless the amounts were
not repaid because the Contractor has requested an installment
payment agreement; or
(C) The Contractor requests a deferment of collection on a debt previously demanded by the Contracting Officer
(see FAR 32.607-2).
(iv) If a demand for payment was previously issued
for the debt, the demand for payment included in the final decision shall identify the same due date as the original demand for
payment.
(v) Amounts shall be due at the earliest of the following dates:
(A) The date fixed under this contract.
(B) The date of the first written demand for payment, including any demand for payment resulting from a
default termination.
(vi) The interest charge shall be computed for the
actual number of calendar days involved beginning on the due
date and ending on—
(A) The date on which the designated office
receives payment from the Contractor;
(B) The date of issuance of a Government check
to the Contractor from which an amount otherwise payable has
been withheld as a credit against the contract debt; or
(C) The date on which an amount withheld and
applied to the contract debt would otherwise have become payable to the Contractor.
(vii) The interest charge made under this clause may
be reduced under the procedures prescribed in 32.608-2 of the
Federal Acquisition Regulation in effect on the date of this contract.
(viii) Upon receipt and approval of the invoice designated by the Contractor as the “completion invoice” and supporting documentation, and upon compliance by the Contractor
with all terms of this contract, any outstanding balances will be
paid within 30 days unless the parties agree otherwise. The
completion invoice, and supporting documentation, shall be
submitted by the Contractor as promptly as practicable follow-

52.2-38

FEDERAL ACQUISITION REGULATION
ing 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.
(7) Release of claims. 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.
(i) Specified claims in stated amounts, or in estimated
amounts if the amounts are not susceptible to exact statement by
the Contractor.
(ii) 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.
(iii) 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.
(8) 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.
(9) Electronic Funds Transfer (EFT). If the Government
makes payment by EFT, see 52.212-5(b) for the appropriate
EFT clause.
(10) 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 that
appears on the payment check or the specified payment date if
an electronic funds transfer payment is made.
(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 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 contract, less any hourly rate payments already made to the Contractor plus reasonable charges the Contractor can demonstrate
to the satisfaction of the Government using its standard record
keeping system that have resulted from the termination. The
Contractor shall not be required to comply with the cost
accounting standards or contract cost principles for this pur-

FAC 2005–36 SEPTEMBER 10, 2009
SUBPART 52.2—TEXT OF PROVISIONS AND CLAUSES
pose. 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.

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:
CONTRACT TERMS AND CONDITIONS REQUIRED TO
IMPLEMENT STATUTES OR EXECUTIVE ORDERS—
COMMERCIAL ITEMS (SEP 2009)
(a) The Contractor shall comply with the following Federal
Acquisition Regulation (FAR) clauses, which are incorporated in this contract by reference, to implement provisions of
law or Executive orders applicable to acquisitions of commercial items:
(1) 52.222-50, Combating Trafficking in Persons
(FEB 2009) (22 U.S.C. 7104(g)).
___Alternate I (AUG 2007) of 52.222-50 (22 U.S.C.
7104(g)).
(2) 52.233-3, Protest After Award (AUG 1996)
(31 U.S.C. 3553).
(3) 52.233-4, Applicable Law for Breach of Contract
Claim (OCT 2004) (Pub. L. 108-77, 108-78).
(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.]
__ (1) 52.203-6, Restrictions on Subcontractor Sales to
the Government (Sept 2006), with Alternate I (Oct 1995)
(41 U.S.C. 253g and 10 U.S.C. 2402).
__ (2) 52.203-13, Contractor Code of Business Ethics
and Conduct (DEC 2008) (Pub. L. 110-252, Title VI, Chapter
1 (41 U.S.C. 251 note)).
__ (3) 52.203-15, Whistleblower Protections under the
American Recovery and Reinvestment Act of 2009 (MAR
2009) (Section 1553 of Pub. L. 111-5). (Applies to contracts
funded by the American Recovery and Reinvestment Act of
2009.)
__
(4)
52.204-11,
American Recovery and
Reinvestment Act—Reporting Requirements (MAR 2009)
(Pub. L. 111-5).
__ (5) 52.219-3, Notice of Total HUBZone Set-Aside
(JAN 1999) (15 U.S.C. 657a).
__ (6) 52.219-4, Notice of Price Evaluation Preference
for HUBZone Small Business Concerns (JULY 2005) (if the
offeror elects to waive the preference, it shall so indicate in its
offer) (15 U.S.C. 657a).
__ (7) [Reserved]

52.212-5
__ (8)(i) 52.219-6, Notice of Total Small Business SetAside (JUNE 2003) (15 U.S.C. 644).
__ (ii) Alternate I (OCT 1995) of 52.219-6.
__ (iii) Alternate II (MAR 2004) of 52.219-6.
__ (9)(i) 52.219-7, Notice of Partial Small Business
Set-Aside (JUNE 2003) (15 U.S.C. 644).
__ (ii) Alternate I (OCT 1995) of 52.219-7.
__ (iii) Alternate II (MAR 2004) of 52.219-7.
__ (10) 52.219-8, Utilization of Small Business
Concerns (MAY 2004) (15 U.S.C. 637(d)(2) and (3)).
__ (11)(i) 52.219-9, Small Business Subcontracting
Plan (APR 2008) (15 U.S.C. 637(d)(4)).
__ (ii) Alternate I (OCT 2001) of 52.219-9.
__ (iii) Alternate II (OCT 2001) of 52.219-9.
__ (12) 52.219-14, Limitations on Subcontracting
(DEC 1996) (15 U.S.C. 637(a)(14)).
__ (13) 52.219-16, Liquidated Damages—Subcontracting Plan (JAN 1999) (15 U.S.C. 637(d)(4)(F)(i)).
__ (14)(i) 52.219-23, Notice of Price Evaluation
Adjustment for Small Disadvantaged Business Concerns
(OCT 2008) (10 U.S.C. 2323) (if the offeror elects to waive
the adjustment, it shall so indicate in its offer).
__ (ii) Alternate I (JUNE 2003) of 52.219-23.
__ (15) 52.219-25, Small Disadvantaged Business
Participation Program—Disadvantaged Status and Reporting
(APR 2008)
(Pub. L. 103-355,
section 7102,
and
10 U.S.C. 2323).
__ (16) 52.219-26, Small Disadvantaged Business
Participation
Program—
Incentive Subcontracting
(OCT 2000)
(Pub. L. 103-355,
section 7102,
and
10 U.S.C. 2323).
__ (17) 52.219-27, Notice of Total Service-Disabled
Veteran-Owned Small Business Set-Aside (MAY 2004)
(15 U.S.C. 657 f).
__ (18) 52.219-28, Post Award Small Business
Program Rerepresentation (APR 2009) (15 U.S.C. 632(a)(2)).
__ (19) 52.222-3, Convict Labor (JUNE 2003)
(E.O. 11755).
__ (20) 52.222-19, Child Labor—Cooperation with
Authorities and Remedies (AUG 2009) (E.O. 13126).
__ (21) 52.222-21, Prohibition of Segregated Facilities
(FEB 1999).
__ (22) 52.222-26, Equal Opportunity (MAR 2007)
(E.O. 11246).
__ (23) 52.222-35, Equal Opportunity for Special
Disabled Veterans, Veterans of the Vietnam Era, and Other
Eligible Veterans (SEPT 2006) (38 U.S.C. 4212).
__ (24) 52.222-36, Affirmative Action for Workers with
Disabilities (JUN 1998) (29 U.S.C. 793).
__ (25) 52.222-37, Employment Reports on Special
Disabled Veterans, Veterans of the Vietnam Era, and Other
Eligible Veterans (SEPT 2006) (38 U.S.C. 4212).
__ (26) 52.222-39, Notification of Employee Rights
Concerning Payment of Union Dues or Fees (DEC 2004)
(E.O. 13201).
52.2-39