General Terms & Conditions for the Procurement of Agricultural commodities of Services (USDA-1)

USDA-1

UNITED STATES DEPARTMENT OF AGRICULTURE
Agricultural Stabilization and Conservation Service
Agricultural Marketing Service
Washington, DC 20250

GENERAL TERMS

AND CONDITIONS

FOR THE
PROCUREMENT OF
AGRICULTURAL
COMMODITIES
OR SERVICES

TABLE OF CONTENTS

Article No. Title Page No.

PART A - INFORMATION FOR OFFERORS

1. Descriptive Headings A-1

2. Definitions A-1

3. Explanation to Prospective Offerors A-3

4. Preparation of Offers A-3

5. Discounts for Payment within a Specified Time A-4

6. Signing of Offers A-4

7. Late Submissions, Modifications, and Withdrawls of Bids A-4

8. Conditional Offers A-5

9. Authorized Deviations from Federal Acquisition Regulations A-6
10-15. [RESERVED]

PART B - CONSIDERATION, ACCEPTANCE OR REJECTION OF OFFERS

16. Responsibility of Offeror B-1

17. Preaward On-Site Equal Opportunity Compliance Review B-1

18. Acceptance or Rejection of Offers and Notification B-1

19. Bid Guarantee B-2
20-24. [RESERVED]

PART C - PREAWARD REPRESENTATIONS, CERTIFICATIONS, AND WARRANTIES

25. Representations and Warranties of Offeror C-1

26. Small Disadvantaged Business Concern Representation C-1

27. Women-Owned Small Business Representation C-1

28. Small Business and Small Disadvantaged Business Subcontracting C-1
Plan (Deviation)

29. Labor Surplus Area Subcontracting Program C-4

30. Certificate of Independent Price Determination C-4

31. Certification of Nonsegregated Facilities C-5

32. Covenant Against Contingent Fees C-6

33. Federal, State, and Local Taxes C-6

34. Buy American Certification C-7

35. Drug-Free Workplace C-7

36. Procurement Integrity C-9

37. Requirement for Certificate of Procurement Integrity C-10

38. [RESERVED]

39. Certification and Disclosure Regarding Payments
to Influence Certain Federal Transactions C-12
39A. Limitation on Payments to Influence Certain
Federal Transactions C-12

PART D - POST AWARD PROVISIONS

40. Affirmative Action for Special Disabled
and Vietnam Era Veterans D-1

41. Equal Opportunity D-3

42. Utilization of Women-Owned Small Businesses D-4

43. Affirmative Action for Handicapped Workers D-4

44. Utilization of Labor Surplus Area Concerns D-5

45. Utilization of Small Business Concerns and
Small Disadvantaged Business Concerns D-6

46. Convict Labor D-7

47. Clean Air and Water D-7

48. Officials Not to Benefit D-8

49. Buy American Act -- Supplies D-8

50. Contract Work Hours and Safety Standards
Act--Overtime Compensation -- General D-8

51. Additional Bond Security D-9

52. Specifications D-9

53. Sanitation, Premises, and Equipment D-10

54. Inspection of Supplies -- Fixed Price D-10

55. Checkloading D-12

56. Shipment and Delivery D-13

57. Loading Truck and Rail Shipments (Deviation) D-14

58. Protective Services D-15

59. Variation in Quantity D-15

60. Failure of Commodity to Meet Contract D-15
Requirements and Specifications

61. Loss Due to Deterioration or Spoilage D-16

62. Obliteration of Markings D-16

63. Changes--Fixed Price D-16

64. Change in Place or Manner of Shipment or Delivery D-17

65. Compensation for Late Mailing of Notice to Deliver D-18

66. Termination for Convenience of the Government (Fixed Price) D-18

67. Late Shipment/Liquidated Damages D-18

68. Default (Fixed Price Supply and Service) D-19

69. Assignment of Claims D-20

70. Invoices and Payment and Payment of Interest D-21

71. Progress Payments Not Included D-22

72. Extras D-22

73. Setoff D-22

74. Disputes D-23

75. Fraudulent Claims D-24

76. Audit of Records and Access to Premises D-25

77. Gratuities D-25

78. Interest D-25

79. Notice to the Government of Labor Disputes D-26

80. Liquidated Damages-Small Business Subcontracting Plan D-26

81. Drug-Free Workplace

82. Requirement for Certificate of Procurement Integrity-Modification D-27

83. Price or Fee Adjustment for Illegal or Improper Activity D-28

PART E - ADDITIONAL STANDARD CONTRACT PROVISIONS FOR SERVICING OF
AGENCY-OWNED COMMODITIES

84. Performance Security E-1

85. F.O.B. Point for Delivery of Government-Furnished Propert E-1

86. Restriction Against Substitution E-2

87. Delivery to Agency by Contractor E-2

88. Carrier Accessorial Charges E-2

89. Transit E-3

90. Liability E-3

91. Agency's Delay and Other Failure to Perform E-3

92. Performance Report E-3

93. Service Contract Act of 1965, as amended E-4

94. Government Property (Fixed Priced Contracts) E-10
96Fair Labor Standards Act and Service Contract Act --

95.
Price Adjustment E-12

96. Procurement Integrity-Service Contracting E-13

UNITED STATES DEPARTMENT OF AGRICULTURE
Agricultural Stabilization and Conservation Service
Agricultural Marketing Service
Washington, DC 20250

GENERAL TERMS AND CONDITIONS

FOR THE PROCUREMENT OF AGRICULTURAL COMMODITIES OR SERVICES

This document contains information, representations and requirements relating to the submission
and acceptance of offers made pursuant to announcements or invitations for offers which
specifically incorporate this document, in whole or in part, by reference, and which are issued by
the United States Department of Agriculture or Commodity Credit Corporation. Each such
announcement will specify terms and conditions, in addition to those included in this document,
which are applicable. References in this document to a particular regulation, or other document,
shall be deemed to refer to such document as it may be revised or amended and any superseding
document as of the time offers are invited.

PART A - INFORMATION FOR OFFERORS

Article 1. DESCRIPTIVE HEADINGS

The descriptive headings of the various contract terms and conditions are formulated for
convenience only and are not intended to affect the construction or meaning of any of the
provisions of the contract.

Article 2. DEFINITIONS

The definitions given for the following words and phrases shall apply whenever these words and
phrases are used in this document and any other document which becomes a part of a contract in
which any of the provisions of this document are incorporated, unless otherwise specified in the
contract:

(a) "Advertised," for purposes of the solicitation, means small business restricted advertising
and other types of restricted advertising.
(b) "Agency," means the United States Department of Agriculture (USDA) or Commodity Credit
Corporation (CCC), whichever is designated in the announcement as procuring the commodity or
service.
(c) "Agency head" or "Secretary," means the Secretary of Agriculture, Chairman of the
Commodity Credit Corporation, or a representative thereof unless otherwise specified.
(d) "Agricultural commodity," means a raw agricultural commodity or a product thereof.
(e) "AMS," means the Agricultural Marketing Service of USDA.
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(f) "Announcement," means an instrument which states terms and conditions for the
procurement of the designated commodity or service. It may in itself invite offers for the
commodity or service in which case it will be called "Announcement/Invitation." In other
instances, it may provide for the issuance of a separate notice requesting bids and may set forth
other special terms. Such separate notice will be called an "Invitation" or "Solicitation." For
purposes of brevity, the term announcement as used throughout this document applies to all
variations.
(g) "Article," means one of the Articles of this document.
(h) "ASCS," means the Agricultural Stabilization and Conservation Service
of USDA.
(i) "Business day," means a day of the week, excluding Saturday, Sunday, and Federal
holidays. Unless otherwise specified, any other reference to days is on a calendar basis.
(j) "Causes," as used in the phrases "causes beyond the control and without the fault or
negligence" means, but is not restricted to, acts of God or of the public enemy, acts of the
Government in either its sovereign or contractual capacity, fires, floods, epidemics, quarantine
restrictions, strikes, freight embargoes, and unusually severe weather; however, in every case the
failure to perform must be beyond the control and without the fault or negligence of the party to
the contract seeking excuse from liability.
(k) "The commodity," means the agricultural commodity delivered or to be delivered to Agency
by Contractor or the serviced commodity produced or to be produced by Contractor from the
agricultural commodity delivered by Agency to Contractor.
(l) "Commodity Office," means the Kansas City Commodity Office, ASCS or such other office
as may be specified in the announcement.
(m) "CCC," means Commodity Credit Corporation, a wholly owned corporation of the United
States within USDA.
(n) "Contract," means the Contractor's offer, Agency's acceptance, this document, the
applicable announcement and other documents incorporated by reference.
(o) "Contracting Officer," means a person with the authority to enter into, administer, and/or
terminate contracts and make related determinations and findings on behalf of Agency.
(p) "Contractor," means the person, firm, corporation or other legal entity obligated under the
contract with Agency.
(q) "FAR," means Federal Acquisition Regulation which establishes a single regulation for use by
all Executive Agencies in their acquisition of property or services. Copies of the FAR may be
purchased from the Superintendent of Documents, Government Printing Office, Washington, D.C.
20402. The FAR may be found at Title 48, Code of Federal Regulations.
(r) "Management Office," means the Kansas City Management Office, ASCS or such other
office as may be specified in the announcement.
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(s) "Offer," means the bid in formal advertising.
(t) "Offeror," means the person, firm, corporation or other legal entity submitting an offer in
response to an announcement.
(u) "Service," means to process, package, and perform other acts under a contract with respect
to commodities owned by Agency.
(v) "Shipment," means transfer in store where the shipping instructions so provide.
Article 3. EXPLANATION TO PROSPECTIVE OFFERORS

Any prospective offeror 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 offerors 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 offeror
concerning a solicitation will be furnished promptly to all other prospective offerors 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 offerors. Addresses and telephone numbers of offices
to contact will be listed in the applicable announcement.

Inquiries concerning:

Shipping information shall be made to:

Director, Kansas City Commodity Office, ASCS

U. S. Department of Agriculture
P.O. Box 205
Kansas City, MO 64141
Payments shall be made to:

Director, Kansas City Management Office, ASCS

U.S. Department of Agriculture
P.O. Box 205
Kansas City, MO 64141
Article 4. PREPARATION OF OFFERS

(a) Offeror is cautioned to read this document and the applicable announcement carefully and to
verify prices before submitting offers. Offerors must make their own estimates of the facilities
and difficulties attending the performance of the proposed contract, including local
conditions, uncertainty of weather, financial considerations, availability of materials and
containers, and all other contingencies.
(b) Offeror shall acknowledge receipt of any amendment to the solicitation (1) by signing and
returning the amendment, (2) by identifying the amendment number and date in the space
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provided for this purpose on the form for submitting a bid, or (3) by letter or telegram as
specified in the Announcement. The Government must receive the acknowledgment by the time
and at the place specified for receipt of bids.

(c) Offeror must provide full, accurate, and complete information as required by the solicitation
and its attachments. The penalty for making false statements in bids is prescribed in 15 U.S.C.
714m(a), 18 U.S.C. 1001, and other applicable statutes.
Article 5. DISCOUNTS FOR PAYMENT WITHIN A SPECIFIED TIME

Any discounts offered for payment within a specified time will not be considered as a factor in
evaluating offers. For any discount offered for payment within a specified time, time will be
computed from the date of the invoice through the date the agency issues a check or otherwise
delivers payment. Payments will be made and interest paid for late payments in accordance with
Article 70.

Article 6. SIGNING OF OFFERS

An offer shall set forth the full business name and address of offeror. An offer mailed,
telecopied, or hand delivered shall be signed by a person authorized to execute contracts on
behalf of offeror. Any offer submitted by telegram, mailgram, telex or TWX must bear the name
of such person as well as that of offeror. A power of attorney or other documentary evidence of
the authority for a person to execute the contract in the name of offeror may be required by
Agency.

Article 7. LATE SUBMISSIONS, MODIFICATIONS, AND WITHDRAWALS OF BIDS

(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 registered or certified mail not later than the fifth calendar day before the
date specified for receipt of bids (e.g., a bid submitted in response to a solicitation requiring
receipt of bids by the 20th of the month must have been mailed by the 15th); or
(2) Was sent by mail (or was a telegraphic bid if authorized), and it is determined by the
Agency that the late receipt was due solely to mishandling by the Agency after receipt at the
Agency installation.
(b) Any modification or withdrawal of a bid is subject to the same conditions as in paragraph (a)
above.
(c) The only acceptable evidence to establish the date of mailing of a late bid, modification, or
withdrawal sent either by registered or certified mail is the U.S. or Canadian Postal Service
postmark on the wrapper or on the original receipt from the U.S. or Canadian Postal Service. If
neither postmark shows a legible date, the bid, modification, or withdrawal shall be processed as
if mailed late. "Postmark" means a printed, stamped, or otherwise placed impression (exclusive
of a postage meter machine impression) that is readily identifiable without further action as
having been supplied and affixed by employees of the U.S. or Canadian Postal Service on the
date of mailing. Therefore, offerors should request the postal clerks to place a hand cancellation
bull's-eye postmark on both the receipt and the envelope or wrapper.
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(d) The only acceptable evidence to establish the time of receipt at the Agency installation is the
time/date stamp of that installation on the bid wrapper or other documentary evidence of receipt
maintained by the installation.
(e) Notwithstanding paragraph (a) above, 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.
(f) A bid may be withdrawn in person by an offeror 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.
Article 8. CONDITIONAL OFFERS

Any qualification or condition in, or added to, the offer may make it ineligible for consideration.

Article 9. AUTHORIZED DEVIATIONS FROM THE FEDERAL ACQUISITION REGULATIONS

(a) The use in USDA-1 of any Federal Acquisition Regulation (48 CFR Chapter 1) clause with
an authorized deviation is indicated by the addition of the word "DEVIATION" after the title of the
USDA-1 article.
(b) Article 28 deviates from 48 CFR 52.219-9 to permit the award of a contract prior to the
submission of a subcontracting plan in order to recognize the short turnaround time between
offer date and award date in commodity contracting.
(c) Article 54 deviates from 48 CFR 52.246-2 to advise the Contractor that it is responsible for
inspection costs and that USDA inspectors and graders do not have the authority to amend
contracts.
(d) Article 57 deviates from 48 CFR 52.247-48 to clarify the fact that the Contractor is
responsible for loading and bracing costs.
(e) Article 64 deviates from 48 CFR 52.247-54 because the regulation does not refer to F.A.S.
vessel as a mode of transportation which may be a required form of transportation in USDA
contracts and because relying on published tariff rates which are deregulated is impractical.
Article 64 (c) deviates from 48 CFR 52.247-54 because the regulation does not allow the
Agency to determine the lowest cost price adjustment and does not consider transit credits which
may apply.
(f) Article 68 deviates from 48 CFR 52.249-8 because the regulation does not address the
issue of liability of damages caused by strikes when the Contractor's plant is on strike at the time
the contract offer is submitted and the Contractor's failure to perform is attributed to the strike.
(g) Article 69 deviates from 48 CFR 52.232-23 to inform the Contractor about the various
forms and information USDA requires in approving assignments.
(h) Section (h) is reserved.
(i) Article 76 deviates from 48 CFR 52.214-26 in that it waives the requirement that a
Contractor submit price data information. This waiver is based on the fact that commodity prices
are based on competition and/or established market prices.
(j) Article 86 deviates from 48 CFR 47.305-12(a)(2) to clarify the fact that the contractor is
responsible for unloading and drayage costs.
(k) The Announcement and/or invitation provisions pertaining to submission of bids with regard
to the procurement of agricultural commodities deviate from 48 CFR 52.214-13 in that USDA
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waives the requirement for a confirmation copy of a telegraphic bid because of the short period of
time between the submission of bids and the awarding of contracts.

(l) 48 CFR 52.214-9 does not apply because whenever an offeror submits an offer, the offeror
automatically receives invitations for the remainder of the procurement period.
Articles 10-15 [RESERVED]

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PART B - CONSIDERATION, ACCEPTANCE OR REJECTION OF OFFERS

Article 16. RESPONSIBILITY OF OFFEROR

Agency reserves the right to refuse to consider an offer if Agency does not have adequate
information to determine responsibility of offeror, financially or otherwise, to meet contract
obligations contemplated in the announcement. If a prospective offeror is in doubt as to whether
Agency is acquainted with its financial responsibility, offeror should either submit a financial
statement to Agency before making an offer or should communicate with the office named in the
announcement to determine whether such a statement is desired. See Article 19 for information
on a bid guarantee.

Article 17. PREAWARD ON-SITE EQUAL OPPORTUNITY COMPLIANCE REVIEW

An award in the amount of $1 million or more will not be made under the solicitation unless the
offeror and each of its known first-tier subcontractors (to whom it intends to award a
subcontract of $1 million or more) are found, on the basis of a compliance review, to be able to
comply with the provisions of the Equal Opportunity clause of the solicitation. Contractor shall
not enter into a first-tier subcontract for an estimated or actual amount of $1 million or more
without obtaining in writing from the Contracting Officer a clearance that the proposed
subcontractor is in compliance with equal opportunity requirements and therefore is eligible for
award.

Article 18. ACCEPTANCE OR REJECTION OF OFFERS AND NOTIFICATION

(a) The offers accepted will be those which are considered to be most advantageous to Agency.
Factors considered in addition to price will be specified in the announcement as applicable.
(b) If an offeror is shipping late under current contracts at the time of submission of an offer,
such performance shall be sufficient cause for Agency to deem offeror unable to perform and
Agency may, at its option, refuse to consider the offer.
(c) Agency reserves the right to reject any or all offers and to waive informalities and minor
irregularities in offers received.
(d) Agency may accept an item or group of items of any offer, unless offeror qualifies the offer
by specific limitations. Unless otherwise provided in the announcement, offers shall not be
submitted for any quantities less than those specified. Agency reserves the right to accept any
item for a quantity less than the quantity offered at the unit prices offered unless offeror specifies
otherwise in the offer.
(e) An acceptance mailed or otherwise forwarded to the successful offeror within the time for
acceptance specified in the announcement shall be deemed to result in a binding contract without
further action, by either party, unless the acceptance specifies or is conditioned on further action.
(f) Offerors whose offers are rejected will be notified of such rejection by collect telegram or by
letter only if they specifically request such notification.
B-1

Article 19. BID GUARANTEE

(Offeror should check with contracting office identified in the announcement to determine whether
a bid guarantee is necessary.)

(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 offeror shall furnish a bid guarantee in the form of a firm commitment, such as a bid
bond, postal money order, certified check, cashier's check, irrevocable letter of credit, or, 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 offerors as soon as
practicable after the opening of bids, and (2) to the successful offeror upon execution of
contractual documents and bonds (including any necessary coinsurance or reinsurance
agreements), as required by the bid as accepted.
(c) If the successful offeror, upon acceptance of its bid by the Government within the period
specified for acceptance, fails to execute all contractual documents or give a bond(s) as required
by the solicitation within the time specified, the Contracting Officer may terminate the contract
for default.
(d) Unless otherwise specified in the Announcement, the offeror will (1) allow 60 days for
acceptance of its bid and (2) give bond within 10 days after receipt of the forms by the offeror.
(e) In the event the contract is terminated for default, the contractor is liable for any cost of
acquiring the supplies and services that exceeds the amount of its bid, and the bid guarantee is
available to offset the difference.
Articles 20-24. [RESERVED]

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PART C - PREAWARD REPRESENTATIONS, CERTIFICATIONS AND WARRANTIES

Article 25. REPRESENTATIONS AND WARRANTIES OF OFFEROR

In submitting an offer, offeror represents and warrants that:

(a) If the offer is for the sale of an agricultural commodity to Agency, (1) it is an established
manufacturer of the particular commodity sought by Agency, or (2) if newly entering into such
manufacturing activity, has made all necessary prior arrangements for space, equipment, and
personnel to perform the manufacturing operations required for contract performance, or (3) is a
regular dealer already established in a going business regularly dealing in the commodity or in the
principal components of the commodity sought by Agency.
(b) If the offer is for the servicing of an agricultural commodity owned by Agency, (1) offeror is
regularly engaged in providing the kind of service sought by Agency, or (2) if newly entering into
providing such service, has made all necessary arrangements for space, equipment, and personnel
to perform the service sought by Agency.
(c) Each end product is a domestic source end product as defined in Article 49; components of
unknown origin have been considered to have been mined, produced, or manufactured outside
the United States; and each component which the announcement requires to be wholly produced
in the United States was so produced.
Article 26. SMALL DISADVANTAGED BUSINESS CONCERN REPRESENTATION

Offeror shall state in the offer whether it is a small disadvantaged business concern as defined in
Article 45.

Article 27. WOMEN-OWNED SMALL BUSINESS REPRESENTATION

Offeror shall state in the offer whether the concern is a woman-owned small business concern,
as defined in Article 42.

Article 28. SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS
SUBCONTRACTING PLAN (DEVIATION)

(Applicable to contracts which offer subcontracting opportunities and which exceed $500,000.)

(a) This article does not apply to small business concerns.
(b) "Commercial product," as used in this article, means a product in regular production that is
sold in substantial quantities to the general public and/or industry at established catalog or market
prices. It also means a product which, in the opinion of the Contracting Officer, differs only
insignificantly from the Contractor's commercial product.
"Subcontract," as used in this article, means any agreement (other than one involving an
employer-employee relationship) entered into by a Federal Government prime contractor or

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subcontractor calling for supplies or services required for performance of the contract or
subcontract.

(c) The offeror acknowledges that it is aware of the subcontracting plan requirement in this
provision; and if selected for award, will submit within 20 days or such time as specified by the
Contracting Officer a subcontracting plan that will afford the maximum practicable opportunity to
participate in the performance of the contract to small and small disadvantaged concerns.
(d) The subcontracting plan shall include the following:
(1) Goals, expressed in terms of percentages of total planned subcontracting dollars, for the
use of small business concerns and small disadvantaged 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;
(ii) Total dollars planned to be subcontracted to small business concerns; and
(iii) Total dollars planned to be subcontracted to small disadvantaged 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 and (ii) small
disadvantaged business concerns.
(4) A description of the method used to develop the subcontracting goals in (1) above.
(5) A description of the method used to identify potential sources for solicitation purposes
(e.g., existing company source lists, the Procurement Automated Source System (PASS) of the
Small Business Administration, 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 and small disadvantaged business concerns trade
associations).
(6) A statement as to whether or not the offeror 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 and (ii) small disadvantaged
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 concerns
and small disadvantaged business concerns have an equitable opportunity to compete for
subcontracts.
(9) Assurances that the offeror will include the article in this contract entitled "Utilization of
Small Business Concerns and Small Disadvantaged Business Concerns" in all subcontracts that
offer further subcontracting opportunities, and that the offeror will require all subcontractors
(except small business concerns) who receive subcontracts in excess of $500,000 to adopt a
plan similar to the plan agreed to by the offeror.
(10) Assurances that the offeror will (i) cooperate in any studies or surveys as may be
required, (ii) submit periodic reports in order to allow the Government to 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 the instructions on the forms, and (iv) ensure that its subcontractors agree to
submit Standard Forms 294 and 295.
(11) A recitation of the types of records the offeror will maintain to demonstrate procedures
that have been adopted to comply with the requirements and goals in the plan, including
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establishing source lists; and a description of its efforts to locate small and small disadvantaged
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, guides, and other data that identify small and small disadvantaged
business concerns.
(ii) Organizations contacted in an attempt to locate sources that are small or small
disadvantaged 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 small disadvantaged business concerns were solicited and if not, why not, and (C) 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, and (C) conferences and trade fairs to locate small and small
disadvantaged business sources.
(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 company or division-wide annual 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 and small disadvantaged 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 and small disadvantaged 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 and small
disadvantaged business concerns in all "make-or-buy" decisions.
(3) Counsel and discuss subcontracting opportunities with representatives of small and small
disadvantaged business firms.
(f) A master subcontracting plan on a plant or division-wide basis which contains all the
elements required by (d) above, except goals, may be incorporated by reference as a part of the
subcontracting plan required of the offeror by this article; provided, (1) the master plan has been
approved, (2) the offeror provides copies of the approved master plan and 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)(1) If a commercial product is offered, the subcontracting plan required by this article may
relate to the offeror's production generally, for both commercial and noncommercial products,
rather than solely to the Government contract. In these cases, the offeror shall, with the
concurrence of the Contracting Officer, submit one company-wide or division-wide annual plan.

(2) The annual plan shall be reviewed for approval by the Agency awarding the offeror its
first prime contract requiring a subcontracting plan during the fiscal year, or by an agency
satisfactory to the Contracting Officer.
(3) The approved plan shall remain in effect during the offeror's fiscal year for all of the
offeror's commercial products.
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(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 article of
this contract entitled "Utilization of Small Business Concerns and Small Disadvantaged Business
Concerns," or (2) an approved plan required by this article, shall be a material breach of the
contract.
Article 29. LABOR SURPLUS AREA SUBCONTRACTING PROGRAM

(Applicable to contracts which offer subcontracting opportunities and which exceed $500,000.)

(a) See the Utilization of Labor Surplus Area Concerns article of this contract (Article 44) for
applicable definitions.
(b) The Contractor agrees to establish and conduct a program to encourage labor surplus area
(LSA) concerns to compete for subcontracts within their capabilities when the subcontracts are
consistent with the efficient performance of the contract at prices no higher than obtainable
elsewhere. The Contractor shall-(
1) Designate a liaison officer who will (i) maintain liaison with authorized representatives of
the Government on LSA matters, (ii) supervise compliance with the Utilization of Labor Surplus
Area Concerns article, and (iii) administer the Contractor's labor surplus area subcontracting
program;
(2) Provide adequate and timely consideration of the potentialities of LSA concerns in all
make-or-buy decisions;
(3) Ensure that LSA concerns have an equitable opportunity to compete for subcontracts,
particularly by arranging solicitations, time for the preparation of offers, quantities, specifications,
and delivery schedules so as to facilitate the participation of LSA concerns;
(4) Include the Utilization of Labor Surplus Area Concerns article in subcontracts that offer
substantial LSA subcontracting opportunities; and
(5) Maintain records showing (i) the procedures adopted and (ii) the Contractor's
performance, to comply with this article. The records will be kept available for review by the
Government until the expiration of 1 year after the award of this contract, or for such longer
period as may be required by any other article of this contract or by applicable law or regulations.
(c) The Contractor further agrees to insert in any related subcontract that may exceed
$500,000 and that contains the Utilization of Labor Surplus Area Concerns article, terms that
conform substantially to the language of this article, including this paragraph (c), and to notify
the Contracting Officer of the names of subcontractors.
Article 30. CERTIFICATE OF INDEPENDENT PRICE DETERMINATION

(a) The offeror certifies that-(
1) The prices in the 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;
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(2) The prices in the 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
formally advertised 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 principals of the firm in
certifying that those principals have not participated, and will not participate in any action
contrary to subparagraphs (a)(1) through (a)(3).
(ii) As an authorized agent, does certify that the principals named in the bid 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.
Article 31. CERTIFICATION OF NONSEGREGATED FACILITIES

(Applicable to contracts and subcontracts exceeding $10,000 which are not exempt from the
provisions of the Equal Opportunity Clause.)

(a) "Segregated facilities," as used in this provision, 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, or national origin because
of habit, local custom, or otherwise.
(b) By the submission of an offer, the offeror certifies 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 offeror agrees that a breach of this certification is
a violation of the Equal Opportunity article in the contract.
(c) The offeror further agrees that (except where it has obtained identical certifications from
proposed subcontractors for specific time periods) it will-(
1) Obtain identical certifications from proposed subcontractors before the award of
subcontracts under which the subcontractor will be subject to the Equal Opportunity article;
(2) Retain the certifications in the files; and
(3) Forward the following notice to the proposed subcontractors (except if the proposed
subcontractors have submitted identical certifications for specific time periods):
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NOTICE TO PROSPECTIVE SUBCONTRACTORS OF REQUIREMENT
FOR CERTIFICATIONS OF NONSEGREGATED FACILITIES.

A Certification of Nonsegregated Facilities must be submitted before the award of a subcontract
under which the subcontractor will be subject to the Equal Opportunity article. The certification
may be submitted either for each subcontract or for all subcontracts during a period (i.e.,
quarterly, semiannually, or annually).

NOTE: The penalty for making false statements in offers is prescribed in 15 U.S.C. 714m(a), 18

U.S.C. 1001, and other applicable statutes.
Article 32. COVENANT AGAINST CONTINGENT FEES

(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 article, 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 article, means a person, employed by a contractor and
subject to the contractor's supervision 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 article, 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 article, 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.

Article 33. FEDERAL, STATE, AND LOCAL TAXES

(a) "Contract date," as used in this article, means the date of award.
"All applicable Federal, State, and local taxes and duties," as used in this article, 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.

"After-imposed Federal tax," as used in this article, 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.

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"After-relieved Federal tax," as used in this article, 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.

(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 article unless the amount of the
adjustment exceeds $100.
(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.
Article 34. BUY AMERICAN CERTIFICATE

The offeror certifies that each end product is a domestic end product (as defined in the Article
49, "Buy American Act--Supplies"), and that components of unknown origin are considered to
have been mined, produced, or manufactured outside the United States.

Offerors may obtain from the contracting officer lists of articles, materials, and supplies
accepted from the Buy American Act (listed in the Federal Acquisition Regulation, Title 48, C.F.R.
25.108).

Article 35. DRUG-FREE WORKPLACE

(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 C.F.R. 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 a site(s) for the performance of work done by the contractor
in connection with a specific contract at which employees of the contractor are prohibited from

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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 contract 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) By submission of its offer, the offeror, if other than an individual, who is making an offer
that equals or exceeds $25,000, certifies and agrees, that with respect to all employees of the
offeror to be employed under a contract resulting from this solicitation, it will--no later than 30
calendar days after contract award (unless a longer period is agreed to in writing), for contracts
of 30 calendar days or more performance duration; or as soon as possible for contracts of less
than 30 calendar days performance duration, but in any case, by a date prior to when
performance is expected to be completed-(
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
provision that, as a condition of continued employment on the contract resulting from this
solicitation, 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 calendar days after such
conviction;
(5) Notify the Contracting Officer in writing within 10 calendar days after receiving notice
under subdivision (b)(4)(ii) of this provision, from an employee or otherwise receiving actual
notice of such conviction. The notice shall include the position title of the employee; and
(6) Within 30 calendar days after receiving notice under subdivision (b)(4)(ii) of this provision
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:
(i) Take 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.
(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) By submission of its offer, the offeror, if an individual who is making an offer of any dollar
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value, certifies and agrees that the offeror will not engage in the unlawful manufacture,
distribution, dispensing, possession, or use of a controlled substance in the performance of the
contract resulting from this solicitation.

(d) Failure of the offeror to provide the certification required by paragraphs (b) or (c) of this
provision, renders the offeror unqualified and ineligible for award. (See FAR 9.104-1(g) and
19.602-1(a) (2) (i)).
(e) In addition to other remedies available to the Government, the certification in paragraphs (b)
or (c) of this provision 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 Title 18, United States Code, Section 1001. Also, Contractor's failure to
comply with the requirements of paragraphs (b) or (c) of this provision may, pursuant to 48
C.F.R. 23.506, render the Contractor subject to suspension of contract payments, termination of
the contract for default, and suspension or debarment.
Article 36. PROCUREMENT INTEGRITY

(Applicable to contracts and contract modifications in excess of $100,000.)

(a) PROHIBITED CONDUCT BY COMPETING CONTRACTOR. - During the conduct of any
Federal agency procurement of property or services, no competing Contractor or any officer,
employee, representative, agent, or consultant of any competing Contractor shall knowingly-(
1) Make, directly or indirectly, any offer or promise of future employment or business
opportunity to, or engage, directly or indirectly, in any discussion of future employment or
business opportunity with, any procurement official of such agency, except as provided in 48
C.F.R. 3.104-6(b);
(2) Offer, give, or promise to offer or give, directly or indirectly, any money, gratuity, or
other thing of value to any procurement official of such agency; or
(3) Solicit or obtain, directly or indirectly, from any officer or employee of such agency, prior
to the award of a contract any proprietary or source selection information regarding such
procurement.
(b) PROHIBITED CONDUCT BY PROCUREMENT OFFICIALS. - During the conduct of any
Federal agency procurement of property or services, no procurement official of such agency shall
knowingly-(
1) Solicit or accept, directly or indirectly, any promise of future employment or business
opportunity from, or engage, directly or indirectly, in any discussion of future employment or
business opportunity with, any officer, employee, representative, agent, or consultant of a
competing Contractor, except as provided in 48 C.F.R. 3.104-6(a);
(2) Ask for, demand, exact, solicit, seek, accept, receive, or agree to receive, directly or
indirectly, any money, gratuity, or other thing of value from any officer, employee,
representative, agent, or consultant of any competing Contractor for such procurement; or
(3) Disclose any proprietary or source selection information regarding such procurement
directly or indirectly to any person other than a person authorized by the head of such agency or
the Contracting Officer to receive such information.
(c) DISCLOSURE TO UNAUTHORIZED PERSONS. - During the conduct of any Federal agency
procurement of property or services, no person who is given authorized or unauthorized access
to proprietary or source selection information regarding such procurement, shall knowingly
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disclose such information, directly or indirectly, to any person other than a person authorized by
the head of such agency or the Contracting Officer to receive such information.

(d) RESTRICTIONS RESULTING FROM PROCUREMENT ACTIVITIES OF GOVERNMENT
OFFICERS OR EMPLOYEES WHO ARE OR WERE PROCUREMENT OFFICIALS.
(1) No individual who, while serving as an officer or employee of the Government or member
of the Armed Forces, was a procurement official with respect to a particular procurement may
knowingly-(
i) Participate in any manner, as an officer, employee, agent, or representative of a
competing Contractor, in any negotiations leading to the award, modification, or extension of a
contract for such procurement, or
(ii) Participate personally and substantially on behalf of the competing Contractor in the
performance of such contract.
The restrictions in (d)(1)(i) and (d)(1)(ii) of this Article apply during the period ending 2 years
after the last date such individual participated personally and substantially in the conduct of such
procurement or personally reviewed and approved the award, modification, or extension of any
contract for such procurement.

(2) This subsection does not apply to any participation referred to in subdivisions (d)(1)(i)
and (d)(1)(ii) of this Article with respect to a subcontractor who is a competing Contractor
unless-(
i) The subcontractor is a first or second tier subcontractor and the subcontract is for
an amount that is in excess or $100,000; or
(ii) The subcontractor significantly assisted the prime Contractor with respect to
negotiation of the prime contract; or
(iii) The procurement official involved in the award, modification, or extension of the
prime contract personally directed or recommended the particular subcontractor to the prime
Contractor as a source for the subcontract; or
(iv) The procurement official personally reviewed and approved the award, modification,
or extension of the subcontract.
Article 37. REQUIREMENT FOR CERTIFICATE OF PROCUREMENT INTEGRITY

(Applicable to contracts and contract modifications in excess of $100,000.)

(a) Definitions. The Definitions at 48 C.F.R. 3.104-4 are incorporated in this Article.
(b) As required by paragraph (c) of this Article, the officers or employees responsible for
submitting bids shall execute the following certification:
Certificate of Procurement Integrity

(1) I, [Name of certifier], am the officer or employee responsible for the preparation of this
offer and hereby certify that, to the best of my knowledge and belief, with the exception of any
information described in this certificate, I have no information concerning a violation or possible
violation of subsection 27(a), (b), (d), or (f) of the Office of Federal Procurement Policy Act, as
amended, (41 U.S.C. 423) (hereinafter referred to as "the Act"), as implemented in the Federal
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Acquisition Regulation (FAR) and USDA-1, occurring during the conduct of procurements under
Announcement Number .

(2) As required by subsection 27(e)(1)(B) of the Act, I further certify that, to the best of my
knowledge and belief, each officer, employee, agent, representative, and consultant of [Name of
offeror] who has participated personally and substantially in the preparation or submission of this
offer has certified that he or she is familiar with, and will comply with, the requirements of
subsection 27(a) of the Act, as implemented in the FAR and USDA-1, and will report immediately
to me any information concerning a violation or possible violation of the Act, as implemented in
the FAR and USDA-1, pertaining to procurements under Announcement Number .
(3) Violations or possible violations: (Continue on plain bond paper if necessary and label
1Certificate of Procurement Integrity (Continuation Sheet), ENTER "NONE" IF NONE EXISTS)
.

(4) I agree that, if awarded a contract under Announcement Number , the
certifications required by subsection 27(e)(1)(B) of the Act shall be maintained in accordance with
paragraph (f) of this Article.
(Signature) (date)
[Typed Name of above Officer or
Employee Responsible for the Offer]

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 THE UNITED
STATES CODE (U.S.C.), INCLUDING TITLE 18, U.S.C., SECTION 1001 AND TITLE 15 U.S.C.,
SECTION 714m.

(c) The signed certification must be received by the Contracting Officer prior to the Offeror
submitting an offer. Failure of an Offeror to submit the signed certificate prior to bid opening or
with its offer will render the offer nonresponsive. The Offeror must reaffirm this certification
in each bid submitted. Any violation or possible violations discovered or occurring after the
Offeror submits the certificate must be reported on a revised certificate.
(d) The Offeror may be requested to execute additional certifications at the request of the
Government. Failure of an Offeror to submit the additional certifications shall cause its offer to
be rejected.
(e) A certification containing a disclosure of a violation or possible violation will not necessarily
result in the withholding of award. However, the Government, after evaluation of the disclosure,
may cancel the procurement or take any other appropriate actions in the interests of the
Government, such as disqualification of the Offeror.
(f) In making the certification in subparagraph (b)(2) of the certificate, the officer or employee of
the competing Contractor responsible for the offer may rely upon a one-time certification from
each individual required to submit a certification to the competing Contractor, supplemented by
periodic training. These certifications shall be maintained by the Contractor for 6 years from the
date a certifying employee's employment with the company ends or, for an agent, representative,
or consultant, 6 years from the date such individual ceases to act on behalf of the Contractor.
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(g) Certifications under paragraphs (b) and (d) of this Article are material representations of fact
upon which reliance will be placed in awarding a contract."
Article 38. [RESERVED]

Article 39. CERTIFICATION AND DISCLOSURE REGARDING PAYMENTS TO
INFLUENCE CERTAIN FEDERAL TRANSACTIONS

(a) The definitions and prohibitions contained in Article 39A and in the Federal Acquisition
Regulation, at 48 C.F.R. 52.203-12, Limitation on Payments to Influence Certain Federal
Transactions, included in this solicitation, are hereby incorporated by reference in paragraph (b) of
Article 39.
(b) The offeror, by signing its offer, hereby certifies to the best of his or her knowledge and
belief as of December 23, 1989 that-(
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.
Article 39A. LIMITATION ON PAYMENTS TO INFLUENCE CERTAIN FEDERAL
TRANSACTIONS

(a) Definitions.
"Agency," as used in this article, means executive agency as defined in 48 C.F.R. 2.101.
"Covered Federal Action," as used in this article, means any of the following Federal actions:
(a) The awarding of any Federal contract.
(b) The making of any Federal grant.
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(c) The making of any Federal loan.
(d) The entering into of any cooperative agreement.
(e) 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 article, 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 article, 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 article, 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 article, includes the following individuals
who are employed by an agency:

(a) An individual who is appointed to a position in the Government under title 5, United
States Code, including a position under a temporary appointment.
(b) A member of the uniformed services, as defined in subsection 101(3), title 37,
United States Code.
(c) A special Government employee, as defined in section 202, title 18, United States
Code.
(d) An individual who is a member of a Federal advisory committee, as defined by the
Federal Advisory Committee Act, title 5, United States Code, appendix 2.
"Person," as used in this article, 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 article, 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 article, 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 article, 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 article, 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

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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 article, means a State of the United States, the District of Columbia,
the Commonwealth of Puerto Rico, a territory or possession 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
article, 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 article, 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 subdivision (b)(3)(i)(A) of this article are
permitted under this article.
(ii) Professional and technical services.
(A) The prohibition on the use of appropriated funds, in subparagraph (b)(1) of this
article, does not apply in the case of -C-
14

(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 article, "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 client'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 article are permitted under this article.
(E) The reporting requirements of 48 C.F.R. 3.803(a) shall not apply with respect to
payments of reasonable compensation made to regularly employed officers or employees of a
person.
(iii) Disclosure.
(A) 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 article, if paid for with appropriated funds.
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(B) 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 article. An
event that materially affects the accuracy of the information reported includes-(
1) 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
(2) A change in the person(s) or individual(s) influencing or attempting to influence a
covered Federal action; or
(3) A change in the officer(s), employee(s), or Member(s) contacted to influence or
attempt to influence a covered Federal action.
(C) 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.
(D) 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.
(iv) Agreement. The Contractor agrees not to make any payment prohibited by this
article.
(v) Penalties.
(A) Any person who makes an expenditure prohibited under paragraph (a) of this article
or who fails to file or amend the disclosure form to be filed or amended by paragraph (b) of this
article shall be subject to civil penalties as provided for by 31 U.S.C. 1352. An imposition of a
civil penalty does not prevent the Government from seeking any other remedy that may be
applicable.
(B) Contractors may rely without liability on the representation made by their
subcontractors in the certification and disclosure form.
(vi) Cost allowability. Nothing in this article makes allowable or reasonable any costs
which would otherwise be unallowable or unreasonable. Conversely, costs made specifically
unallowable by the requirements in this article will not be made allowable under any other
provision.

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PART D - POST AWARD PROVISIONS

Article 40. AFFIRMATIVE ACTION FOR SPECIAL DISABLED AND VIETNAM ERA VETERANS

(Applicable to contracts and subcontracts of $10,000 or more.)

(a) Definitions. "Appropriate office of the State employment service system," as used in this
article, means the local office of the Federal-State national system of public employment offices
assigned to serve the area where the employment opening is to be filled, including the District of
Columbia, Guam, Puerto Rico, Virgin Islands, American Samoa, and the Trust Territory of the
Pacific Islands.
"Openings that the Contractor proposes to fill from within its own organization," as used in
this article, means employment openings for which no one outside the Contractor's organization
(including any affiliates, subsidiaries, and the parent companies) will be considered and includes
any openings that the Contractor proposes to fill from regularly established "recall" lists.

"Openings that the Contractor proposes to fill under a customary and traditional
employer-union hiring arrangement," as used in this article, means employment openings that the
Contractor proposes to fill from union halls, under their customary and traditional employer-union
hiring relationship.

"Suitable employment openings," as used in this article-

(1) Includes, but is not limited to, openings that occur in jobs categorized as-(
i) Production and nonproduction;
(ii) Plant and office;
(iii) Laborers and mechanics;
(iv) Supervisory and nonsupervisory;
(v) Technical; and
(vi) Executive, administrative, and professional positions
compensated on a salary basis of less than $25,000 a year; and
(2) Includes full-time employment, temporary employment of over 3 days, and part-time
employment, but not openings that the Contractor proposes to fill from within its own
organization or under a customary and traditional employer-union hiring arrangement, nor
openings in an educational institution that are restricted to students of that institution.
(b) General. (1) Regarding any position for which the employee or applicant for employment is
qualified, the Contractor shall not discriminate against the individual because the individual is a
special disabled or Vietnam Era veteran. The Contractor agrees to take affirmative action to
employ, advance in employment, and otherwise treat qualified special disabled and Vietnam Era
veterans without discrimination based upon their disability or veterans' status in all employment
practices such as-(
i) Employment;
(ii) Upgrading;
(iii) Demotion or transfer;
(iv) Recruitment ;
(v) Advertising;
(vi) Layoff or termination;
(vii) Rates of pay or other forms of compensation; and
(viii) Selection for training, including apprenticeship.
(2) The Contractor agrees to comply with the rules, regulations, and relevant orders of the
D-1

Secretary of Labor (Secretary) issued under the Vietnam Era Veterans' Readjustment Assistance
Act of 1972 (the Act), as amended.

(c) Listing openings. (1) The Contractor agrees to list all suitable employment openings existing
at contract award or occurring during contract performance, at an appropriate office of the State
employment service system in the locality where the opening occurs. These openings include
those occurring at any Contractor facility, including one not connected with performing this
contract. An independent corporate affiliate is exempt from this requirement.
(2) State and local government agencies holding Federal contracts of $10,000 or more shall
also list all their suitable openings with the appropriate office of the State employment service.
(3) The listing of suitable employment openings with the State employment service system is
required at least concurrently with using any other recruitment source or effort and involves the
obligations of placing a bona fide job order, including accepting referrals of veterans and
nonveterans. This listing 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.
(4) Whenever the Contractor becomes contractually bound to the listing terms of this article,
it shall advise the State employment service system, 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 system, it need not advise the
State system of subsequent contracts. The Contractor may advise the State system when it is
no longer bound by this contract article.
(5) Under the most compelling circumstances, an employment opening may not be suitable
for listing, including situations when (i) the Government's needs cannot reasonably be supplied,
(ii) listing would be contrary to national security, or (iii) the requirement of listing would not be in
the Government's interest.
(d) Applicability. (1) This article does not apply to the listing of employment openings which
occur and are filled outside the 50 states, the District of Columbia, Puerto Rico, Guam, Virgin
Islands, American Samoa, and the Trust Territory of the Pacific Islands.
(2) The terms of paragraph (c) above of this article do not apply to openings that the
Contractor proposes to fill from within its own organization or under a customary and traditional
employer-union hiring arrangement. This exclusion does not apply to a particular opening once an
employer decides to consider applicants outside of its own organization or employer-union
arrangement for that opening.
(e) 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
special disabled veterans and veterans of the Vietnam era, 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. They shall be in a form prescribed by the Director, Office of Federal
Contract Compliance Programs, Department of Labor (Director), and 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 the Act, and is committed to take affirmative action to employ, and
advance in employment, qualified special disabled and Vietnam Era veterans.
(f) Noncompliance. If the Contractor does not comply with the requirements of this article,
appropriate actions may be taken under the rules, regulations, and relevant orders of the
Secretary issued pursuant to the Act.
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(g) Subcontracts. The Contractor shall include the terms of this article in every subcontract or
purchase order of $10,000 or more unless exempted by rules, regulations, or orders of the
Secretary. The Contractor shall act as specified by the Director to enforce the terms, including
action for noncompliance.
Article 41. EQUAL OPPORTUNITY

(a) 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 subparagraphs (b)(1) through (11) below. Upon request, the Contractor shall provide
information necessary to determine the applicability of this article.
(b) During the performance of this contract, the Contractor agrees as follows:
(1) The Contractor shall not discriminate against any employee or applicant for employment
because of race, color, religion, sex, or national origin.
(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 article.
(4) The Contractor shall, in all solicitations or advertisement 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 th6e
Contractor's commitments under this article, 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 all information required by Executive Order 11246, as
amended, and by the rules, regulations, and orders of the Secretary of Labor. Standard Form
100 (EEO-1), or any successor form, is the prescribed form to be filed within 30 days following
the award, unless filed within 12 months preceding the date of award.
(8) The Contractor shall permit access to its books, records, and accounts by the contracting
agency or the Office of Federal Contract Compliance Programs (OFCCP) for the purposes of
investigation to ascertain the Contractor's compliance with the applicable rules, regulations, and
orders.
(9) If the OFCCP determines that the Contractor is not in compliance with this article 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, the rules, regulations, and orders of the Secretary of
Labor, or as otherwise provided by law.
D-3

(10) The Contractor shall include the terms and conditions of subparagraph (b)(1) through
(11) of this article 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.
The Contractor shall take such action with respect to any subcontract or purchase order as the
contracting agency may direct 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 article in this contract, disputes relative to this article will be
governed by the procedures in 41 CFR 60-1.1.
Article 42. UTILIZATION OF WOMEN-OWNED SMALL BUSINESSES

(a) "Women-owned small businesses," as used in this article, means businesses that are at least
51 percent owned by women who are United States citizens and who also control and operate
the business.
"Control," as used in this article, means exercising the power to make policy decisions.
"Operate," as used in this article, means being actively involved in the day-to-day
management of the business.

"Small business concern," as used in this provision, 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 and size
standards in 13 CFR 121.

(b) It is the policy of the United States that women-owned small businesses shall have the
maximum practicable opportunity to participate in performing contracts awarded by any Federal
agency.
(c) The Contractor agrees to use its best efforts to give women-owned small businesses the
maximum practicable opportunity to participate in the subcontracts it awards to the fullest extent
consistent with the efficient performance of its contract.
Article 43. AFFIRMATIVE ACTION FOR HANDICAPPED WORKERS

(Applicable to contracts and subcontracts that exceed $2,500.)

(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 handicap. The Contractor agrees to take affirmative action to employ, advance
in employment, and otherwise treat qualified handicapped individuals without discrimination based
upon their physical or mental handicap in all employment practices such as-(
i) Employment;
(ii) Upgrading;
(iii) Demotion or transfer;
(iv) Recruitment;
(v) Advertising;
D-4

(vi) Layoff or termination;
(vii) Rates of pay or other forms of compensation; and
(viii) Selection for training, including apprenticeship.
(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
handicapped individuals 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. They shall be in a form prescribed by the Director, Office of Federal
Contract Compliance Programs, Department of Labor (Director), and 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 physically and mentally handicapped individuals.
(c) Noncompliance. If the Contractor does not comply with the requirements of this article,
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 Article in every subcontract or
purchase order in excess of $2,500 unless exempted by rules, regulations, or orders of the
Secretary. The Contractor shall act as specified by the Director to enforce the terms, including
action for noncompliance.
Article 44. UTILIZATION OF LABOR SURPLUS AREA CONCERNS

(Applicable if the contract or subcontract exceeds $10,000.)

(a) Applicability. This article is applicable if this contract exceeds the appropriate small purchase
limitation in the Federal Acquisition Regulation, Title 48, C.F.R. Part 13.
(b) Policy. It is the policy of the Government to award contracts to concerns that agree to
perform substantially in labor surplus areas (LSA's) when this can be done consistent with the
efficient performance of the contract and at prices no higher than are obtainable elsewhere. The
Contractor agrees to use its best efforts to place subcontracts in accordance with this policy.
(c) Order of preference. In complying with paragraph (b) above and with paragraph (c) of the
article of this contract entitled Utilization of Small Business Concerns and Small Disadvantaged
Business Concerns, the Contractor shall observe the following order of preference in awarding
subcontracts: (1) small business concerns that are LSA concerns, (2) other small business
concerns, and (3) other LSA concerns.
(d) Definitions. "Labor surplus area," as used in this article, means a geographical area
identified by the Department of Labor in accordance with 20 CFR 654, Subpart A, as an area of
concentrated unemployment or underemployment or an area of labor surplus.
"Labor surplus area concern," as used in this article, means a concern that together with its
first-tier subcontractors will perform substantially in labor surplus areas. Performance is
substantially in labor surplus areas if the costs incurred under the contract on account of
manufacturing, production, or performance of appropriate services in labor surplus areas exceed
50 percent of the contract price.

D-5

Article 45. UTILIZATION OF SMALL BUSINESS CONCERNS AND SMALL DISADVANTAGED
BUSINESS CONCERNS

(Applicable to contracts which exceed $10,000.)

(a) It is the policy of the United States that small business concerns and small business
concerns owned and controlled by socially and economically disadvantaged individuals shall have
the maximum practicable opportunity to participate in performing contracts let by any Federal
agency.
(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 determine the
extent of the Contractor's compliance with this article.
(c) As used in this contract, the term "small business concern" shall mean a small business as
defined pursuant to section 3 of the Small Business Act and relevant regulations promulgated
pursuant thereto. The term "small business concern owned and controlled by socially and
economically disadvantaged individuals" shall mean a small business concern-(
1) Which is at least 51 percent owned by one or more socially and economically
disadvantaged individuals; or, in the case of any publicly owned business, at least 51 per centum
of the stock of which is owned by one or more socially and economically disadvantaged
individuals; and
(2) Whose management and daily business operations are controlled by one or more of such
individuals.
The Contractor shall presume that socially and economically disadvantaged individuals include
Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Asian-Indian
Americans and other minorities, or any other individual found to be disadvantaged by the
Administration pursuant to section 8(a) of the Small Business Act.

(d) Contractors acting in good faith may rely on written representations by their subcontractors
regarding their status as either a small business concern or a small business concern owned and
controlled by socially and economically disadvantaged individuals.
(e) "Asian-Indian American," as used in this provision, means a United States citizen whose
origins are in India, Pakistan, or Bangladesh.
"Asian-Pacific American," as used in this provision, means a United States citizen whose
origins are in Japan, China, the Philippines, Vietnam, Korea, Samoa, Guam, the U.S. Trust
Territory of the Pacific Islands, the Northern Mariana Islands, Laos, Cambodia, or Taiwan.

"Native Americans," as used in this provision, means American Indians, Eskimos, Aleuts,
and native Hawaiians.

"Small business concern," as used in this provision, 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 and size
standards in 13 CFR 121.

"Small disadvantaged business concern," as used in this provision, means a small business
concern that (1) is at least 51 percent owned by one or more individuals who are both socially
and economically disadvantaged, or a publicly owned business having at least 51 percent of its
stock owned by one or more socially and economically disadvantaged individuals and (2) has its
management and daily business controlled by one or more such individuals.

(f) Qualified groups. The offeror shall presume that socially and economically disadvantaged
individuals include Black Americans, Hispanic Americans, Native Americans, Asian-Pacific
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Americans, Asian-Indian Americans, and other individuals found to be qualified by the SBA under
13 CFR 124.1.

Article 46. CONVICT LABOR

The Contractor agrees not to employ any person undergoing sentence of imprisonment In
performing this contract except as provided by 18 U.S.C. 4082(c)(2) and Executive Order
11755, December 29, 1973.

Article 47. CLEAN AIR AND WATER

(a) "Air Act," as used in this article, means the Clean Air Act (42 U.S.C. 7401 et seq.).
"Clean air standards," as used in this article, means--
(1) Any enforceable rules, regulations, guidelines, standards, limitations, orders, controls,
prohibitions, work practices, or other requirements contained in, issued under, or otherwise
adopted under the Air Act or Executive Order 11738;
(2) An applicable implementation plan as described in section 110(d) of the Air Act (42
U.S.C. 7410(d));
(3) An approved implementation procedure or plan under section 111(c) or section 111(d) of
the Air Act (42 U.S.C. 7411(c) or (d)); or
(4) An approved implementation procedure under section 112(d) of the Air Act (42 U.S.C.
7412(d)).
"Clean water standards," as used in this article, means any enforceable limitation, control,
condition, prohibition, standard, or other requirement promulgated under the Water Act or
contained in a permit issued to a discharger by the Environmental Protection Agency or by a State
under an approved program, as authorized by section 402 of the Water Act (33 U.S.C. 1342),
or by local government to ensure compliance with pretreatment regulations as required by section
307 of the Water Act (33 U.S.C. 1317).

"Compliance," as used in this article, means compliance with-

(1) Clean air or water standards; or
(2) A schedule or plan ordered or approved by a court of competent jurisdiction, the
Environmental Protection Agency, or an air or water pollution control agency under the
requirements of the Air Act or Water Act and related regulations.
"Facility," as used in this article, means any building, plant, installation, structure, mine,
vessel or other floating craft, location, or site of operations, owned, leased, or supervised by a
Contractor or subcontractor, used in the performance of a contract or subcontract. When a
location or site of operations includes more than one building, plant, installation, or structure, the
entire location or site shall be deemed a facility except when the Administrator, or a designee, of
the Environmental Protection Agency, determines that independent facilities are collocated in one
geographical area.

"Water Act," as used in this article, means Clean Water Act (33 U.S.C. 1251 et seq.).

(b) The Contractor agrees-(
1) To comply with all the requirements of section 114 of the Clean Air Act (42 U.S.C.
7414) and section 308 of the Clean Water Act (33 U.S.C. 1318) relating to inspection,
monitoring, entry, reports, and information, as well as other requirements specified in section
114 and section 308 of the Air Act and the Water Act, and all regulations and guidelines issued
to implement those acts before the award of this contract;
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(2) That no portion of the work required by this prime contract will be performed in a facility
listed on the Environmental Protection Agency List of Violating Facilities on the date when this
contract was awarded unless and until the EPA eliminates the name of the facility from the listing;
(3) To use best efforts to comply with clean air standards and clean water standards at the
facility in which the contract is being performed; and
(4) To insert the substance of this article into any nonexempt subcontract, including this
subparagraph (b)(4).
Article 48. OFFICIALS NOT TO BENEFIT

Unless exempted by 41 U.S.C. 22, no member of or delegate to Congress, or resident
commissioner, shall be admitted to any share or part of this contract, or to any benefit arising
from it. However, this article does not apply to this contract to the extent that this contract is
made with a corporation for the corporation's general benefit.

Article 49. BUY AMERICAN ACT--SUPPLIES

(a) The Buy American Act (41 U.S.C. 10) provides that the Government give preference to
domestic end products.
"Components," as used in this article, means those articles, materials, and supplies
incorporated directly into the end products.
"Domestic end product," as used in this article, 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 the products referred to in subparagraphs (b)(2) or (3) of this article shall be treated as
domestic.

"End products," as used in this article, means those articles, materials, and supplies to be
acquired for public use under this contract.

(b) The Contractor shall deliver only domestic end products, except those-(
1) For use outside the United States;
(2) That the Government determines are not mined, produced, or
manufactured in the United States in sufficient and reasonably available commercial quantities of a
satisfactory quality;
(3) For which the agency determines that domestic preference would be inconsistent with the
public interest; or
(4) For which the agency determines the cost to be unreasonable. (The foregoing
requirements are administered in accordance with Executive Order No. 10582, dated December
17, 1954, as amended, and Federal Acquisition Regulation, Title 48, C.F.R. 25.1.)
Article 50. CONTRACT WORK HOURS AND SAFETY STANDARDS ACT--OVERTIME
COMPENSATION--GENERAL

This contract, to the extent that it is of a character specified in the Contract Work Hours and

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Safety Standards Act (40 U.S.C. 327-333) (the Act), is subject to the following terms and all
other applicable provisions and exceptions of the Act and the regulations of the Secretary of
Labor.

(a) Overtime requirements. Contractor or subcontractor shall not require or permit any laborer
or mechanic to work in excess of 8 hours in any calendar day, or 40 hours in any workweek, on
any part of the contract work subject to the Act; unless, the laborer or mechanic receives
compensation at a rate not less than 1 1/2 times the basic rate of pay for all hours worked in
excess of 8 hours in any calendar day, or 40 hours in any workweek, whichever produces the
greater amount of overtime.
(b) Violation, liability for unpaid wages, and liquidated damages. If the terms of paragraph (a)
above are violated, the Contractor and any subcontractor responsible for the violation shall be
liable to any affected employee for unpaid wages. In addition, the Contractor and subcontractor
shall be liable to the United States for liquidated damages. These damages are computed for each
individual laborer or mechanic at $10 for each calendar day on which the employee was required
or permitted to be employed in violation of paragraph (a) above.
(c) Withholding for unpaid wages and liquidated damages. The Contracting Officer may
withhold from the Contractor, from any moneys payable on account of work performed by the
Contractor or subcontractor, such amounts as may administratively be determined to be
necessary to satisfy any liabilities of the Contractor or subcontractor for unpaid wages and
liquidated damages as provided in paragraph (b) above.
(d) Subcontracts. The Contractor and subcontractor shall insert paragraphs (a) through (d) of
this article in all subcontracts.
(e) Records. The Contractor shall maintain payroll records containing the information specified
in 29 CFR 516.2(a). These records shall be preserved for 3 years from contract completion. The
Contractor will make the records available for inspection by authorized representatives of the
Agency and the Department of Labor, and will permit such representatives to interview employees
during working hours on the job.
Article 51. ADDITIONAL BOND SECURITY

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 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;
or
(c) The contract price is increased so that the penal sum of any bond becomes inadequate in
the opinion of the Contracting Officer.
Article 52. SPECIFICATIONS

The commodity shall meet the specifications prescribed by the contract and shall conform to the
applicable provisions of the Federal Food, Drug, and Cosmetic Act, as amended, other applicable
statutes, and regulations issued thereunder. Contractor agrees to hold the United States
harmless if royalties are due because of the formulation or processing requirements for the
commodity, or any requirements of the contract.

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Article 53. SANITATION, PREMISES, AND EQUIPMENT

(a) All equipment, supplies, facilities, storage space, and premises shall be maintained in a clean,
sanitary condition in accordance with good commercial practice. The commodity shall be handled
by persons in good health and free from any communicable diseases and in such manner as to
prevent contamination.
(b) The cars or trucks in which the commodity is loaded by Contractor shall be clean and
sanitary and in a condition to protect the commodity during transit so that it arrives at destination
free from contamination.
(c) Agency reserves the right to inspect and approve the premises and equipment before
acceptance of offers and to inspect at any time, at Agency' expense, during the period of
performance under the contract, equipment, supplies, facilities, storage space, and premises used
in the manufacturing, processing or servicing of the commodity. Contractor agrees to permit,
during regular business hours, authorized representatives of Agency to enter any of its premises
at which the commodity is manufactured, processed, stored, or serviced, and to inspect such
equipment, supplies, facilities, storage space, and premises and to observe the manufacturing,
processing, or servicing operations. Any such inspection or prior approval of equipment and
premises shall not relieve Contractor of its independent obligation to maintain the equipment and
premises in a satisfactory and sanitary condition. Failure of Contractor to maintain such
equipment and premises in a satisfactory and sanitary condition shall constitute a failure to
perform entitling Agency to terminate the contract under Article 68(a)(2). If for any reason
Contractor's plant designated in the contract is impeded or prevented from manufacturing,
processing, or servicing the commodity, Contractor may, with the approval of Agency, designate
another plant for the manufacture, processing or servicing of such commodity: Provided, that if
by reason of designation of such other plant additional expenses are incurred by Agency, such
additional expenses shall be for the account of Contractor and any savings shall accrue to
Agency.
(d) The commodity shall be processed in a plant which, at the time of processing, is operating
in accordance with any regulations published by Agency applicable to plants processing the
commodity.
Article 54. INSPECTION OF SUPPLIES--FIXED-PRICE (DEVIATION)

(a) Definition. "Supplies," as used in this article, 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
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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, without
additional charge, all reasonable facilities and assistance for the safe and convenient performance
of these duties. The cost of inspection, samples taken for inspection, and any chemical analysis
required for testing shall be for the account of the Contractor. 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 the 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 the contract and (ii) when the supplies will be ready for Government inspection.
(2) The Government 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.
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Acceptance shall be conclusive, except for latent defects, fraud, gross mistakes amounting to
fraud, or as otherwise provided in the contract.

(1) If acceptance is not conclusive for any of the reasons in paragraph (f) 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
to contract or otherwise to replace or correct such supplies and charge to the Contractor the cost
occasioned the Government thereby.
(m) Inspectors and graders have no authority to prescribe any changes in the contract or to
order contractor to perform contrary to any manner prescribed in the contract. Furthermore,
inspector and grader authority is limited to determining acceptability of commodities tendered or
serviced under the contract.
(n) Inspection shall include checkweighing of a representative number of containers of the
commodity.
(o) Inspection shall not relieve Contractor of the responsibility to furnish a commodity (including
packages and containers) meeting specifications or to otherwise fulfill the terms of the contract.
An inspection certificate is only prima facie evidence of the matters therein stated at the time and
place of inspection.
(p) If any reinspection is performed by Agency at destination points, the costs thereof shall be
borne by Agency if the product is found to be in compliance with the contract provisions,
otherwise the cost shall be borne by Contractor.
Article 55. CHECKLOADING

(a) Contractor shall not load the commodity for shipment or transfer the commodity in store
unless, at the time of such loading or transferring, the commodity is checkloaded by Agency or
by a person of the inspection or grading service designated by Agency. Contractor is responsible
for giving notice in sufficient time for a checkloader to be present. The cost of checkloading shall
be for the account of Contractor. Checkloading refers to identifying the commodity which was
previously inspected and found to meet contract requirements, examining the commodity at the
time of loading or transferring for condition of containers and for compliance with labeling and
container marking requirements, and determining the number of containers per car, truck, or lot.
(b) Checkloading by persons licensed or authorized by Agency shall not relieve Contractor of
the obligation to effect a delivery of the commodity meeting contract requirements or constitute a
waiver of any of Agency's rights under the contract. The certificates issued as a result of
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such official checkloading shall be only prima facie evidence of the number and condition of
containers.

(c) Contractor shall be liable for all shortages which occur before delivery, except that if
shipment is by common carrier, Contractor shall not be liable for a shortage reported at
destination unless it can be established, notwithstanding the checkloading certificate, that there
was an actual shortage at the time of loading for shipment.
(d) This paragraph (d) is not applicable to purchases delivered f.o.b. origin. If the shipment is
by truck and Agency specifically requests "Exclusive Use of Vehicle", Agency will reimburse
Contractor for any additional transportation costs due to shipment under "Exclusive Use of
Vehicle." The sealing of trucks as part of the checkloading procedure shall not be construed as
such a request. In the absence of such a request by Agency, any additional cost of
transportation and related services due to shipment under "Exclusive Use of Vehicle" shall be for
Contractor's account. Contractor shall be responsible for making such arrangements as may be
necessary to prevent the application of "Exclusive Use of Vehicle" charges when such charges
result in higher transportation costs. The arrangements to be made by Contractor may include an
instruction to the checkloader not to seal the truck when the sealing will result in "Exclusive Use
of Vehicle" charges. If, notwithstanding such arrangements, the checkloader seals the truck,
Contractor shall have the responsibility for removing the seals.
Article 56. SHIPMENT AND DELIVERY

(a) The ASCS Commodity office shall issue a Notice(s) to Deliver at least seven days prior to
the first day of each period scheduled in the contract for the shipment from origin of a specified
quantity of the commodity. Any modification of such period must be made by agreement with
the applicable Contracting Office. Such period or any modification thereof is hereinafter called
"the contract shipping period." The date on which the Notice to Deliver is issued shall be shown
thereon. Contractor shall ship in accordance with instructions in the Notice(s) to Deliver, except
that (1) if a Notice to Deliver is issued less than seven days prior to the first day of the contract
shipping period, such shipping period and each subsequent consecutive shipping period under the
contract directly affected by the delay shall be extended by the number of days such Notice is
issued late; and (2) in any event, Contractor shall be allowed the number of business days
contained in the period specified in the contract for shipment of the contract quantity, beginning
with seven days after the Notice to Deliver is issued. Notwithstanding the foregoing, Contractor
shall not be entitled to any extension of the contract shipping period under this Article 56(a)
unless it furnishes evidence satisfactory to Agency that it was prepared to ship during the
contract shipping period.
(b) The commodity shall be delivered by Contractor in the manner (f.a.s. vessel, f.o.b. cars,
etc.) and at the point(s) of delivery, as required by the contract, pursuant to shipping instructions
issued by Agency. Shipment shall not be made before receipt from Agency of shipping
instructions, or before the time the commodity has been inspected and found to meet contract
specifications.
(c) Immediately on shipment, Contractor shall, in accordance with instructions from Agency,
notify Agency, or consignee, or both, of the shipment.
(d) 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.
(e) Unless the contract specifically provides otherwise, risk of loss or damage to supplies shall
remain with the Contractor until, and shall pass to the Government upon-D-
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(1) Delivery of the commodity to a carrier, if contract delivery terms are f.o.b. origin; or
(2) Acceptance by the Government or delivery of the commodities to the Government at the
destination specified in the contract, whichever is later, if contract delivery terms are f.o.b.
destination.
(3) If delivery is f.a.s. vessel, title and risk of loss and damage shall pass to Agency when
the commodity is placed:
(i) Alongside vessel within reach of its loading tackle, or
(ii) On the dock designated by Agency if the vessel is not available, unless Contractor
failed to ship pursuant to the shipping instructions and Agency determines that such failure
caused the commodity to arrive too late to be loaded aboard the vessel.
(4) If delivery is made f.a.s. vessel at the designated port, Contractor shall pay all costs,
including but not limited to wharfage, tollage, checking and handling charges necessary to place
the commodity free alongside vessel within reach of its loading tackle, and shall furnish a dock
receipt, ship's receipt, or other similar document as evidence of delivery. If, after arrival of
commodity at the designated port, Contractor is delayed in delivering the commodity f.a.s. vessel
at such port, the Contractor establishes that such delay is due to causes beyond the control and
without the fault or negligence of Contractor and any of its subcontractors including but not
limited to failure of Agency to make a vessel or dock available, Agency shall reimburse Contractor
on presentation of paid bills for charges incurred in connection with storage in cars and for other
charges resulting from such delay, unless Contractor failed to ship pursuant to shipping
instructions and Agency determines that such failure caused the delay in delivering the commodity
f.a.s. vessel.
(f) Paragraph (e) above shall not apply to commodities 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
commodities remains with the Contractor until cure or acceptance. After cure or acceptance,
paragraph (e) above shall apply.
(g) Under paragraph (e) above, the Contractor shall not be liable for loss of or damage to
commodities caused by the negligence of officers, agents, or employees of the Government
acting within the scope of their employment.
Article 57. LOADING TRUCK AND RAIL SHIPMENTS (DEVIATION)

(a) Truck shipments shall be loaded and (when necessary) braced to ensure that there will be no
shifting of the commodity in transit and that it will arrive at destination in damage-free condition.
(b) (1) 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.
(2) 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.
(3) 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.
(4) A copy of the appropriate pamphlet of the Association of American Railroads may be
obtained from that Association.
(c) The cost of all loading and bracing shall be borne by the Contractor.
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Article 58. PROTECTIVE SERVICES

(a) If the contract specifies that delivery is to be made f.o.b. cars or trucks at origin, Contractor
shall order protective services as specified in the shipping instructions issued by Agency.
(b) If the contract provides for delivery at point(s) other than f.o.b. cars or truck at origin,
Contractor shall provide protective services when, and to the extent necessary to adequately
protect the commodity while in transit, including allowable free time for unloading at intermediate
or final destination(s), or both.
Article 59. VARIATION IN QUANTITY

No variation in the quantity of any item called for by the contract will be accepted unless such
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 elsewhere in the
announcement.

Article 60. FAILURE OF THE COMMODITY TO MEET CONTRACT REQUIREMENTS AND
SPECIFICATIONS

(a) Contractor shall be liable for failure of the commodity to meet all of the contract
requirements and specifications, including those with respect to packages and containers, subject
to the other provisions of this Article.
(b) If Agency discovers on or after delivery that all or any part of the commodity (including
packages and containers) did not meet contract requirements and specifications at time of
delivery, Agency shall have the right:
(1) to accept or retain the entire quantity and hold Contractor liable for the damages
sustained, as determined by Agency, or
(2) to reject the entire quantity or to reject a portion thereof and accept or retain the
remainder. Agency may at its discretion terminate the contract with respect to the quantity
rejected or permit Contractor to replace all or part of the quantity rejected with a quantity of the
commodity that does conform to all contract requirements and specifications and, in either
circumstance, hold Contractor liable for damages sustained, as determined by Agency. To
"reject" means to refuse to accept on delivery or, after delivery and acceptance, to notify
Contractor of revocation of the acceptance, in whole or in part. In either event, Contractor shall
be held liable for all damages sustained, as determined by Agency.
(c) Any quantity rejected may be returned to Contractor, destroyed (if unfit for human
consumption), or disposed of for the account of Contractor in accordance with applicable health
and sanitation laws and regulations. Any rejection of a quantity of the commodity delivered by
common carrier shall be made by the office of Agency which issued the shipping instructions.
Consignee may inform the carrier or Contractor of rejection of a quantity of the commodity
delivered by contract carrier or by Contractor's own trucks. Contractor will be advised of
Agency's election under (b)(2) of this Article either at the time of rejection or within a reasonable
time thereafter.
(d) Inspection, checkloading, issuance of inspection or checkloading certificates, shipping
instructions, or bills of lading, any payment by Agency, or the receipt of a commodity shall not
constitute a waiver of Agency's rights under this Article.
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(e) The rights and remedies of Agency provided in this Article are not exclusive or in derogation
of any other rights and remedies provided by law or contract.
Article 61. LOSS DUE TO DETERIORATION OR SPOILAGE

Contractor shall reimburse Agency for all losses due to deterioration or spoilage sustained by
Agency for which Contractor is responsible, but only if such losses are discovered by such date
as may be stated in the announcement, or a reasonable time, as determined by Agency, after
delivery if no such date is stated. Contractor agrees to reimburse Agency for such losses within
10 days after date of billing by Agency. That part of the commodity as to which Agency makes
a claim based on deterioration or spoilage shall be held by Agency subject to disposition
instructions of Contractor (unless the nature of the deterioration or spoilage is such as to require
condemnation and destruction as determined by Agency or its authorized representative) but need
not be held by Agency in excess of 30 days after Agency sends notice of such claim to
Contractor. In lieu of reimbursing Agency, Contractor may replace the deteriorated or spoiled
commodity with an equal quantity of commodity which conforms to all contract requirements and
specifications, if such replacement is agreed to by Agency.

Article 62. OBLITERATION OF MARKINGS

The appearance in commercial or other channels of any labels, bags, cans, can lids, cases, or
any other type of packaging, either filled or unfilled (hereinafter referred to as "containers and
container materials") bearing markings required under the contract may cause Agency expense in
determining whether commodities have been diverted from authorized use and in answering
inquiries. Contractor agrees to take necessary action to prevent the appearance in commercial or
other channels of containers and container materials bearing markings required under the contract,
including those held by Contractor or others, e.g., overruns. The following actions with respect
to all inner and outer containers and container materials will constitute compliance with the intent
of this Article: (a) complete obliteration of all markings required under the contract with a
permanent opaque paint, or removal of labels which bear such markings, and overlaying or
replacing markings so obliterated or removed with commercial labelings; (b) placing a transparent
pressure-sensitive sticker on all containers and container materials bearing USDA markings, which
shall state in lettering of a prominent size "SALVAGE BY (insert firm's name)" directly on the
"NOT TO BE SOLD OR EXCHANGED" legend wherever it appears on the containers and
container materials; (c) drawing one or more x's completely through the markings and with a
permanent stamp conspicuously placing thereon the following legend: "This container has not
been used and shall not be used for shipment of Government commodities."; or (d) any other
actions, approved by the Contracting Officer, which accomplish the intent of the foregoing.

Article 63. CHANGES--FIXED-PRICE

(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
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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 submit any "proposal for adjustment" (hereafter referred to as
proposal) under this article 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 article. However,
nothing in this article shall excuse the Contractor from proceeding with the contract as changed.
Article 64. CHANGE IN PLACE OR MANNER OF SHIPMENT OR DELIVERY (DEVIATION)

(a) If the commodity price is on the basis of delivery f.o.b. cars or trucks at origin and
Contractor requests a change in the shipping point named in the contract and such request is
approved by Agency, any additional cost of transportation and related services shall be deducted
from payments otherwise due Contractor and any savings shall accrue to Agency.
(b) If the commodity price is on the basis of delivery f.o.b. cars or trucks at destination or f.a.s.
vessel at designated ports and if Agency orders delivery of the commodity in a manner or to
destinations other than those stated in the contract, any additional cost of transportation and
related services shall be for the account of Agency and any savings will accrue to Agency.
(c) Diversion of Shipment under f.o.b. Destination Contracts. When a place of delivery is
changed in accordance with the Changes article of this contract, the contract price shall be
adjusted pursuant to that article for any resulting increase or decrease in the cost of performance
in accordance with best available information as determined by Agency. No adjustment shall be
made for changes in transportation costs when commodities are identically priced for delivery
regionally or nationally and the place of delivery is changed within the area to which the identical
price applies. In all other cases, price adjustments due to changes in transportation costs shall be
determined by the agency prior to shipment.
(d) If (1) shipments to the new destination are made by the Contractor's owned or leased
trucks and/or (2) shipments to the original destination were made or would have been made by
the Contractor's owned or leased trucks, the Contractor shall so certify. The Government shall
make an appropriate adjustment in contract prices for payment purposes at the rate and in the
manner specified in the Announcement.
(e) If any or all of the following data are not clearly shown on, or available from, copies of paid
freight bills for each diverted shipment, the Contractor shall supply a statement showing the-(
1) Full name of the carrier or carriers in the routing;
(2) Number of containers ;
(3) Gross shipping weight;
(4) Actual date of shipment; and
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(5) Freight description for the supplies as indicated in the "National Motor Freight
Classification" or the "Uniform Freight Classification" (Rail).
Article 65. COMPENSATION FOR LATE MAILING OF NOTICE TO DELIVER

Failure to mail a Notice to Deliver in accordance with the terms of the contract may result in
delays in shipment and damages to contractor. Because it will be difficult to prove the amount of
such damage, Agency shall pay to Contractor as liquidated damages for causing delay in
shipment by late mailing of a Notice to Deliver an amount to be specified in the announcement for
each day of such delay in shipment not to exceed the number of days by which the Notice to
Deliver was mailed late. It is mutually agreed that such damages are a reasonable estimate of the
probable actual damages that may be caused by late mailing of such Notice(s). Contractor's
claim for payment of damages for delays with respect to the shipping period for which a Notice
to Deliver was mailed late must be supported by evidence satisfactory to Agency that Contractor
was prepared to ship in accordance with the contract shipping schedule.

If the delay in shipment caused by the late mailing of a Notice to Deliver causes delays in other
shipments in later shipping periods under the same contract, Contractor may claim liquidated
damages for delays in the other shipments occurring during the later shipping period if it furnishes
evidence satisfactory to Agency that it could not, without disruption of normal business
operations, complete shipments as required under the contract shipping schedule or any extension
thereof by Agency. Agency shall not be liable for liquidated damages under this section if Agency
determines that, at the time the Notice to Deliver is to be mailed, such mailing would be
impracticable because a condition specified in Article 2(j) of this document exists, or is likely to
exist, which could prevent either shipment by Contractor or acceptance by consignee. In such
cases, the period for mailing of the Notice to Deliver and shipment of the commodity shall be
extended for the number of days that Agency determines such condition exists.

Article 66. TERMINATION FOR CONVENIENCE OF THE GOVERNMENT (FIXED-PRICE)
(SHORT FORM).

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
the Federal Acquisition Regulation, Title 48, C.F.R. Part 49 in effect on the date of this contract.

Article 67. LATE SHIPMENT/LIQUIDATED DAMAGES

(a) If Contractor determines that it will not be able to make shipment of a quantity of the
commodity by the final shipment date under the contract, or if it does not make shipment of a
quantity of the commodity by the final shipment date, contractor shall inform Contracting Officer
as soon as feasible, indicating how soon it expects to be able to make shipments. Each week
thereafter until all late shipments have been made, contractor shall inform Contracting Officer
how soon it expects to be able to make shipments.
(b) The following shall apply to late shipments:
(1) Late shipment of the commodity by Contractor will cause serious and substantial
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damages to Agency because of its urgent need for timely performance, but it will be difficult to
prove the amount of such damages.

(2) In the event the contract is not terminated because of delay in shipment, Contractor shall
continue performance and be liable to Agency for liquidated damages, at the daily rate specified in
the announcement, with respect to the quantity of the commodity which is not shipped by the
final shipment date under the contract as fixed and agreed, and liquidated damages for each day
of delay, until such time as the commodity is shipped.
(3) In the event Agency exercises its right of termination in whole or in part as provided in
paragraph (a) of Article 68 Contractor shall be liable to Agency for excess costs as provided in
paragraph (b) of Article 68 and, in addition, for liquidated damages. Liquidated damages are
assessed at the daily rate specified in the announcement against the quantity of commodity not
shipped by the final shipment date under the contract as fixed and agreed. Liquidated damages
are payable for each day of delay, until such time as Agency obtains or could have obtained
shipment of a similar commodity elsewhere.
(4) It is mutually agreed that such damages are a reasonable estimate of the probable actual
damages for delay in shipment. In no event shall liquidated damages be imposed for more than
45 days of delay except where mutually agreed upon between Contractor and Agency.
(5) The foregoing provisions for liquidated damages shall also apply to replacement
shipments, if such shipments are not made within the agreed time for such replacements.
(6) Shipment made by Contractor at its risk prior to receipt of results of inspection shall not
be considered to be shipment under the contract if results of inspection indicate the commodity
does not meet contract specifications and the commodity is not accepted by Agency.
(7) Contractor shall not be liable for liquidated damages for delays due to causes which
would relieve the contractor from liability for excess costs as provided in paragraph (c) of Article
68.
Article 68. DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) (DEVIATION)

(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
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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. However, if Contractor's plant was on strike at
the time it submitted the offer resulting in the contract, and if Contractor's failure to perform the
contract was because of such strike, Contractor shall not be excused from liability under this
paragraph. In each instance the failure to perform must be beyond the control and without the
fault or negligence of the Contractor. Contractor has the burden of proof to show that its failure
to perform is excusable under this paragraph and must submit documentary evidence sufficient to
show its freedom from fault or negligence.

(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, and contract rights
(collectively referred to as "manufacturing materials" in this Article) 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 Article. 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 Article are in addition to any other rights
and remedies provided by law or under this contract.
Article 69. ASSIGNMENT OF CLAIMS (DEVIATION)

(a) If USDA is the Agency named in the contract, 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 "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. Any such assignment shall be recognized only if and when
the assignee thereof files with the Agency written notice of the assignment, together with a
signed copy of the instrument of assignment, in accordance with the instructions on Form
ASCS-66, Notice of Assignment. Any assignment or reassignment authorized under the Act and
this article 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

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for two or more parties participating in the financing of this contract. The instrument of
assignment may be executed on Form ASCS-347, Instrument of Assignment.

(b) If CCC is the Agency named in the contract, no assignment by Contractor shall be made of
the contract, or of any right thereunder, except that Contractor may assign the proceeds of the
contract to a bank, trust company, or other financing institution, including any Federal lending
agency, or to a person or firm that holds a lien or encumbrance at the time of assignment, and,
subject to the prior approval of the Contracting Officer, assignment may be made to any other
person or firm: Provided, that such assignment shall be recognized only if and when the assignee
thereof files with Agency written notice of the assignment together with a signed copy of the
instrument of assignment, in accordance with the instructions on Form CCC-251, Notice of
Assignment: And provided further, that any such assignment shall cover all amounts payable and
not already paid under the contract, shall not be made to more than one party and shall not be
subject to further assignment, except that any such assignment may be made to one party as
agent or trustee for two or more parties participating in such financing. The instrument of
assignment may be executed on Form CCC-252, Instrument of Assignment.
(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.
(d) Forms relating to assignments may be obtained from the Contracting Officer or the
Commodity Office, ASCS. Contractor may use the forms mentioned in (a) or (b) or may use his
own forms providing they are in a format basically consistent with the prescribed form and
contain essentially the same provisions.
Article 70. INVOICES AND PAYMENT AND PAYMENT OF INTEREST

(a) Invoices for payment for the commodity, and for reimbursement of transportation and
protective service charges, if any, must be submitted separately by the Contractor to the Fiscal
Division, Kansas City Commodity office. Invoices for payment for the commodity must be made
on the invoice portion of the Notice to Deliver or on a commercial type invoice and be supported
by the original (official) inspection and checkloading certificates, if applicable, and either a copy of
commercial bill of lading signed by the carrier's agent or, in lieu thereof, a copy of a consignee's
receipt evidencing delivery. Invoices for reimbursement of transportation and protective service
charges, if any, must be supported by the original or a copy of carrier's receipted freight bill or
invoice. if shipment is by contract carrier, the Contractor's invoice must also be supported by a
copy of the contract between the Contractor and the truck or rail line showing the schedule of
rates, or a copy of the truck or rail line's published rates.
(b) Invoices for payment of freight charges, billed by the transportation companies, must be
submitted to the Traffic Management Division, Kansas City Commodity Office. Invoices must
contain the applicable Notice to Deliver number to be considered a proper invoice.
(c) When the total quantity to be invoiced includes a fraction of a pound, the fraction should be
omitted if less than one-half pound and raised to the next full pound if one-half pound or more.
Only whole pounds should be shown on the invoice. Contractor may include more than one
shipment on any invoice.
(d) It is mutually agreed and understood that in submitting an invoice, the Contractor thereby
certifies that all requirements of the contract have been satisfied and the Contractor has complied
fully with the representations, certifications, and warranties set forth in Part C of USDA-1.
Submission of an invoice when all contract terms and conditions have not been satisfied may
subject Contractor to civil and criminal penalties as provided in Titles 15, 18, and
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31 of the United States Code. The Agency will make payment to the Contractor (or the assignee
if an assignment is made pursuant to Article 69) of any amounts due with respect to each
shipment invoiced.

(e) The payment is due after receipt by the Fiscal Division, Kansas City Commodity Office, of a
properly prepared invoice with the required supporting documents as follows:
(1) Within 7 days on purchase contracts for the acquisition of meat, meat food products or
edible fresh or frozen poultry meat, perishable poultry meat products, fresh eggs or perishable
egg products.
(2) Within 10 days on purchase contracts for the acquisition of dairy products, fresh and
frozen fruits and vegetables, edible fats or oils, and food products prepared from edible fats or
oils.
(3) Within 30 days on all other contracts including processing contracts where
Government-owned commodities are processed into end products.
(f) If payment is not made within the specified number of calendar days following receipt of a
proper invoice, then interest will be paid on the unpaid amount. Interest will accrue beginning on
the first day after the payment due date through the date the Agency issues a check or otherwise
delivers payment. Interest will be added to the amount payable on the invoice.
(g) Interest will be paid at a rate of interest that is equal to the rate of interest established by
the Secretary of the Treasury for payment of interest penalties under the Prompt Payment Act.
Interest is computed using the rate in effect on the day the agency first accrues an obligation to
pay interest. Interest in the amount less than $1.00 (one dollar) will not be paid.
(h) If a gross billing weight is shown in the offer and is to be considered in determining which
offers are most advantageous to Agency, and if the gross billing weight as shown in the offer
differs from that shown on the carrier's bill of lading, the Agency will require payment by
Contractor for any excess transportation charges based upon the weight differences. Any
savings will accrue to Agency.
Article 71. PROGRESS PAYMENTS NOT INCLUDED

A progress payments article is not included. Bids conditioned upon inclusion of a progress
payment clause in the resulting contract will be rejected as nonresponsive.

Article 72. EXTRAS

Except as otherwise provided in the contract, no payment for extras shall be made unless such
extras and the price therefor have been authorized in writing by the Contracting Officer.

Article 73. SETOFF

(a) Subject to the provisions of paragraphs (b) respecting assignments and (c) respecting liens,
if Contractor is indebted to Agency, the amount of such indebtedness may be set off against the
proceeds of the contract. If Contractor is indebted to the United States for taxes and notice of
lien has been filed in accordance with the provisions of the Internal Revenue Code of 1954 (26
U.S.C. 6323) or any amendments thereof or modifications thereof or Notice of Levy has been
served on USDA in accordance with the provisions of the Internal Revenue Code (26 U.S.C.
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6331) against money payable to Contractor, or if Contractor is indebted to any other agency of
the United States, the amount of such taxes or debt may likewise be set off; and, if Agency is
CCC, such setoff shall be in accordance with 7 CFR Part 1408.

(b) Where an assignment has been made as provided in Article 69, the following provisions
with respect to setoff shall apply:
(1) Notwithstanding the assignment, Agency may set off:
(i) Any amounts due Agency under the contract;
(ii) Any amounts for which Contractor is indebted to the United States for taxes for
which a notice of lien was filed or a Notice of Levy was served in accordance with the provisions
of the Internal Revenue Code of 1954 (26 U.S.C. 6323), or any amendments thereto or
modifications thereof, before acknowledgement by Agency or receipt of the notice of assignment;
and
(iii) Any amounts, other than amounts specified in (i) and (ii) of this paragraph (1) due
Agency or any other agency of the United States, if Agency notified the assignee of such
amounts to be set off at the time acknowledgement was made of receipt of notice of such
assignment.
(2) Any indebtedness of Contractor to any agency of the United States which cannot be set
off under subparagraph (1) of this paragraph may be set off against any amount payable under
the contract which remains after deduction of amounts (including interest and other charges)
owing by Contractor to the assignee for which the assignment was made.
(c) Any amount due prior lien holders who have not executed a waiver shall be deducted prior
to setoff of any indebtedness referred to in paragraph (a) of this Article. If a waiver of lien has
been executed, and if the holder of the lien is named by Contractor as payee on invoices or as
assignee of claims for monies due under the contract to Contractor, any indebtedness to any
agency of the Government under any transaction not under the contract may be set off against
any amount due and payable under the contract which is in excess of the amount of such
invoices or assignment.
(d) Setoff as provided in the Article shall not deprive Contractor of any right it might otherwise
have to contest the justness of the indebtedness involved in the setoff action either by
administrative appeal or by legal action.
Article 74. DISPUTES

(a) This contract is subject to the Contract Disputes Act of 1978 (41 U.S.C. 601-613) (the
Act).
(b) Except as provided in the Act, all disputes arising under or relating to this contract shall be
resolved under this Article.
(c) "Claim," as used in this article, 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. A claim arising under a contract, unlike a claim relating to that contract, is a claim that
can be resolved under a contract Article that provides for the relief sought by the claimant.
However, a written demand or written assertion by the Contractor seeking the payment of money
exceeding $50,000 is not a claim under the Act until certified as required by subparagraph (d)(2)
below. 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 article, if it is
disputed either as to liability or amount or is not acted upon in a reasonable time.
D-23

(d) (1) A claim by the Contractor shall be made in writing and submitted 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.
(2) For Contractor claims exceeding $50,000, the Contractor shall submit with the claim a
certification that-(
i) The claim is made in good faith;
(ii) Supporting data are accurate and complete to the best of the Contractor's
knowledge and belief; and
(iii) The amount requested accurately reflects the contract adjustment for which the
Contractor believes the Government is liable.
(3) (i) If the Contractor is an individual, the certification shall be executed by that individual.
(ii) If the Contractor is not an individual, the certification shall be executed by-(
A) A senior company official in charge at the Contractor's plant or location involved; or
(B) An officer or general partner of the Contractor having overall responsibility for the
conduct of the Contractor's affairs.
(e) For Contractor claims of $50,000 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 $50,000, 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) The Government shall pay interest on the amount found due and unpaid from (1) the date
the Contracting Officer receives the claim (properly certified if required), or (2) the date payment
otherwise would be due, if that date is later, until the date of payment. 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.
(h) 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.
Article 75. FRAUDULENT CLAIMS

(a) Section 5 of the Contract Disputes Act of 1978 (41 U.S.C. 601, 604) provides that if a
Contractor is unable to support any part of its claim under the contract and such inability is
attributable to misrepresentation of fact or fraud on the part of the Contractor, it shall be liable to
the Government for:
(1) an amount equal to the unsupported part of the claim; and
(2) costs to the Government attributable to reviewing that part of the claim.
(b) "Misrepresentation of fact," is defined by the Contract Disputes Act of 1978 as a false
statement of substantive fact, or any conduct which leads to a belief of a substantive fact
material to proper understanding of the matter in hand, made with intent to deceive or mislead.
(c) All instances of suspected fraudulent claims shall be reported, through channels, to the
Attorney General.
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Article 76. AUDIT OF RECORDS AND ACCESS TO PREMISES (DEVIATION)

(a) Contractor agrees that Agency and the Comptroller General of the United States through
their duly authorized representatives shall, until the expiration of three years after final payment
under the contract, have access to and the right to examine any directly pertinent books,
documents, papers and records on Contractor involving transactions relating to the contract.
(b) Availability. The Contractor shall make available at its office at all reasonable times the
materials described in paragraph (a) above, for examination, audit, or reproduction, until 3 years
after final payment under this contract, or for any other period specified in the Federal Acquisition
Regulation (FAR), Title 48, C.F.R. Subpart 4.7. FAR Subpart 4.7, Contractor Records Retention,
in effect on the date 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 article 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.
(c) The Contractor shall insert a article containing all the provisions of this article, including this
paragraph (c), in all subcontracts over $10,000 under this contract, altering the article only as
necessary to identify properly the contracting parties and the contracting office under the
Government prime contract.
Article 77. GRATUITIES

(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-(
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 to
pursue the same remedies as in a breach of the contract.
(d) The rights and remedies of the Government provided in this article shall not be exclusive and
are in addition to any other rights and remedies provided by law or under this contract.
Article 78. INTEREST

(a) Notwithstanding any other article of this contract, 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 (Public Law 95-563), which is applicable to the period in which the amount
becomes due, as provided in paragraph (b) of this Article, and then at the rate applicable for each
six-month period as fixed by the Secretary until the amount is paid.
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(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, including
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 article may be reduced under the procedures prescribed
in the Federal Acquisition Regulation, Title 48, C.F.R. 32.614-2 in effect on the date of this
contract.
Article 79. NOTICE TO THE GOVERNMENT OF LABOR DISPUTES

(a) 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.
(b) The Contractor agrees to insert the substance of this article, including this paragraph (b), in
any subcontract to which a labor dispute may delay the timely performance of this contract;
except that each subcontract shall provide that in the event its timely performance is delayed or
threatened by delay by any actual or potential labor dispute, the subcontractor shall immediately
notify the next higher tier subcontractor or the prime Contractor, as the case may be, of all
relevant information concerning the dispute.
Article 80. LIQUIDATED DAMAGES - SMALL BUSINESS SUBCONTRACTING PLAN

(a) "Failure to make a good faith effort to comply with the subcontracting plan," as used in this
Article, means a willful or intentional failure to perform in accordance with the requirements of the
subcontracting plan approved under Article 28 of USDA-1 entitled "Small Business and Small
Disadvantaged Business Subcontracting Plan," or willful or intentional action to frustrate the plan.
(b) If, at contract completion, or in the case of a commercial products plan, at the close of the
fiscal year for which the plan is applicable, the Contractor has failed to meet its subcontracting
goals and the Contracting Officer decides in accordance with paragraph (c) of this Article that the
Contractor failed to make a good faith effort to comply with its subcontracting plan, established
in accordance with Article 28 of USDA-1 entitled "Small Business and Small Disadvantaged
Business Subcontracting Plan," the Contractor shall pay the Government liquidated damages in an
amount stated. The amount of 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 or, in the case of a commercial products plan, that portion of the dollar amount
allocable to Government contracts 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.
Failure to respond to the notice may be taken as an admission that no valid explanation
D-26

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 Article.

(d) With respect to commercial products plans, i.e., company-wide or division-wide
subcontracting plans approved under paragraph (g) of Article 28 of USDA-1 entitled, "Small
Business and Small Disadvantaged Business Subcontracting Plan," the Contracting Officer of the
agency that originally approved the plan will exercise the functions of the Contracting Officer
under this Article on behalf of all agencies that awarded contracts covered by that commercial
products 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.
Article 81. DRUG-FREE WORKPLACE

The drug-free workplace provisions of Article 35 are hereby incorporated as post award
provisions.

Article 82. REQUIREMENT FOR CERTIFICATE OF PROCUREMENT
INTEGRITY-MODIFICATION

(Applicable to contract modifications in excess of $100,000.)

(a) Definitions. The definitions set forth in 48 C.F.R. 3.104-4 are hereby incorporated in this
Article.
(b) The Contractor agrees that it will execute the certification set forth in paragraph (c) of this
Article when requested by the Contracting Officer in connection with the execution of any
modification of a contract.
(c) Certification. As required in paragraph (b) of this Article, the officer or employee responsible
for the modification proposal shall execute the following certification:
CERTIFICATE OF PROCUREMENT INTEGRITY
MODIFICATION

(1) I, [Name of certifier] am the officer or employee responsible for the preparation of this
modification proposal and hereby certify that, to the best of my knowledge and belief, with the
exception of any information described in this certification, I have no information concerning a
violation or possible violation of subsection 27(a), (b), (d), or (f) of the Office of Federal
Procurement Policy Act, as amended (41 U.S.C. 423), (hereinafter referred to as "the Act"), as
implemented in the FAR and USDA-1, occurring during the conduct of contract number
and modification number .
(2) As required by subsection 27(e)(1)(B) of the Act, I further certify that to the best of my
D-27

knowledge and belief, each officer, employee, agent, representative, and consultant of (Name of
Offeror) who has participated personally and substantially in the preparation or, submission of
this proposal has certified that he or she is familiar with, and will comply with, the requirements
of subsection 27(a) of the Act, as implemented in the FAR and USDA-1, and will report
immediately to me any information concerning a violation or possible violation of subsection
27(a), (b), (d), or (f) of the Act, as implemented in the FAR and USDA-1, pertaining to this
procurement.

(3) Violations or possible violations: (Continue on plain bond paper if necessary and label
Certificate of Procurement Integrity-Modification (Continuation Sheet), ENTER "NONE" IF NONE
EXISTS)
(Signature) (date)

(Typed name of the officer or employee responsible for the modification proposal]

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 THE UNITED
STATES CODE (U.S.C.), INCLUDING TITLE 18 U.S.C., SECTION 1001 AND TITLE 15 U.S.C.,
SECTION 714m.

(d) In making the certification in paragraph (2) of the certificate, the officer or employee of the
competing Contractor responsible for the offer or bid, may rely upon a one-time certification from
each individual required to submit a certification to the competing Contractor, supplemented by
periodic training. These certifications shall be maintained by the Contractor for a period of 6
years from the date a certifying employee's employment with the company ends or, for an
agency, representative, or consultant, 6 years from the date such individual ceases to act on
behalf of the Contractor.
(e) The certification required by paragraph (c) of this Article is a material representation of fact
upon which reliance will be placed in executing this modification.
Article 83. PRICE OR FEE ADJUSTMENT FOR ILLEGAL OR IMPROPER ACTIVITY

(a) The Government, at its election, may reduce the price of a fixed-price type contract or
contract modification by the amount of profit or fee determined as set forth in paragraph (b) of
this Article if the head of the contracting activity or his or her designee determines that there was
a violation of subsection 27(a) of the Office of Federal Procurement Policy Act, as amended (41
U.S.C. 423), as implemented in the FAR and USDA-1.
(b) The price or fee reduction referred to in paragraph (a) of this Article for firm-fixed price
contracts or contract modifications will be 10 percent of the initial contract price; 10 percent of
the contract modification price; or a profit amount determined by the Contracting Officer from
records or documents in existence prior to the date of the contract award or modification.
(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 Article 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 Article, the Government may
D-28

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.

Article 84. [Reserved]

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PART E - ADDITIONAL STANDARD CONTRACT PROVISIONS FOR SERVICING
OF AGENCY-OWNED COMMODITIES

Article 85. PERFORMANCE SECURITY

Within 10 days after acceptance of the offer, Contractor shall furnish a surety bond acceptable
to Agency conditioned on its faithful performance of each and all of the provisions of the
contract, or, in lieu of such bond, a certified or cashier's check or other acceptable security,
including an irrevocable commercial letter of credit, acceptable to Agency. Such bond or security
shall be in the amount specified in the contract, and shall be payable to Agency. Failure to
furnish such performance security within such time is a failure of performance under the
provisions of Article 68.

Article 86. F.O.B. POINT FOR DELIVERY OF GOVERNMENT-FURNISHED PROPERTY
(DEVIATION)

(a) Unless otherwise specified in the solicitation, any Government property furnished to the
Contractor for use within the United States (excluding Alaska and Hawaii) or Canada will be
delivered by the Government at a point to be specified by the Contractor in the offer. Should the
Government elect to make delivery by railroad, the f.o.b. point shall be private siding,
Contractor's plant. If the Contractor's plant is not served by rail, the f.o.b. point shall be railroad
cars in the same or nearest city having rail service. All line-haul transportation costs to the
specified destination shall be borne by the Government. Any other charges, including unloading
and drayage to Contractor's plant are for the account of the contractor. The Government may
choose the mode of transportation and the carriers.
(b) If the destination of such Government-furnished property Is a Contractor's plant located
outside the 48 contiguous states, the District of Columbia or Canada, the f.o.b. point for
Government delivery of Government-furnished property shall be a location in the United States
(excluding Alaska and Hawaii) specified by the Contractor. If the Contractor fails to name a
point, then the f.o.b. point shall be the port city in the United States nearest to the Government
source of the Government-furnished property that has regular commercial water transportation
services to the offshore port nearest Contractor's plant.
(c) Unless otherwise directed by the Contracting Officer or provided in the contract, the
Contractor shall return all Government-furnished 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.
(d) Contractor shall submit promptly to the carrier and Agency a detailed written report of any
overage, shortage, or damage noted at the time of unloading or transfer. The report shall
contain, but not be limited to, the following information:
(1) The seal numbers on the conveyance when it is placed for unloading.
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(2) The condition of the seals when the conveyance was placed for unloading, whether
broken, or intact.
(3) The condition of the conveyance at the time it was placed for unloading, such as leaks,
loose drainage valves, etc.
(e) The agricultural commodity delivered by Agency shall be of a quality that will permit
Contractor to produce a serviced commodity meeting the specifications required by the contract.
If Contractor has reason to believe the agricultural commodity received from Agency is not of
such quality, it shall immediately notify Agency of the reasons for such belief and request advice
regarding action to be taken by him/her, unless the contract contains a provision prescribing the
action to be taken by Contractor in such event. Any such notice by telephone shall be confirmed
promptly in writing by Contractor.
Article 87. RESTRICTION AGAINST SUBSTITUTION

Since title to the agricultural commodity delivered by Agency is at all times vested in Agency
while such commodity is in the custody of Contractor, Contractor shall not substitute any
commodity owned by him/her for the agricultural commodity owned by Agency unless Agency
agrees in writing and prescribes conditions for such substitution.

Article 88. DELIVERY TO AGENCY BY CONTRACTOR

(a) The quantity of serviced commodity which Contractor shall deliver to Agency shall not be
less than the quantity, if any, specified in the contract, and in any event shall be all of the
serviced commodity produced from the agricultural commodity delivered by Agency even through
such quantity exceeds the quantity specified in the contract. Unless the contract provides
otherwise, Contractor shall account to Agency for any quantity or portion of the agricultural
commodity not serviced.
(b) The serviced commodity shall be delivered by Contractor in the manner (f.o.b. car or truck,
at option of Agency) and at the point(s) of delivery specified in the contract. If the contract
provides for delivery f.o.b. cars at Contractor's plant or warehouse and such plant or warehouse
is not located on a railroad, the point(s) of delivery shall, at the option of Agency, be any place in
the city where the plant or warehouse is located, or f.o.b. cars at the railroad delivery point
customarily used by Contractor. All costs to deliver the serviced commodity to the delivery point
required in the contract shall be for the account of the Contractor.
(c) Immediately on shipment, Contractor shall, in accordance with instructions from Agency,
notify Agency or consignee or both of the shipment.
(d) Subject to the provisions in Article 55(c), and the right of rejection as provided in Article 60,
risk of loss shall pass to Agency on delivery of the serviced commodity to Agency.
Article 89. CARRIER ACCESSORIAL CHARGES

Contractor agrees to pay any demurrage and protective service charges which may accrue on
shipments of the agricultural commodity because of failure to unload such commodity within the
free time period allowed by carrier after delivery to Contractor as provided in Article 86.
Contractor also agrees to pay any demurrage and protective service charges which may accrue on
cars ordered by Contractor and placed for loading, but not loaded and delivered to carrier

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within free time allowed by carrier. In placing orders with carrier for cars, Contractor agrees to
specify appropriate size cars necessary to obtain lowest freight rate. Any excess charges
resulting from failure of Contractor to so specify shall be for account of Contractor.

Article 90. TRANSIT

Contractor shall maintain transit records and render reports in accordance with the rules of the
Weighing and Inspection Bureau governing the transit point. Contractor shall furnish Agency
such transit data as may be requested from time to time. Application of transit on outbound
movements will be as directed by Agency with documentation in accordance with the rules of the
local Weighing and Inspection Bureau.

Article 91. LIABILITY

(a) Contractor shall be liable for loss, damage, destruction, or deterioration from any cause
whatsoever of the agricultural commodity received from Agency until the serviced commodity has
been delivered to Agency in accordance with provisions of the contract or the agricultural
commodity or serviced commodity has been removed by Agency from Contractor's custody.
(b) Any insurance carried by Contractor covering the agricultural commodity or serviced
commodity shall accrue to benefit of Agency and any collection shall be by and at the expense of
Contractor. Failure of Contractor to collect full value from any insurer shall not relieve Contractor
of liability for the full amount of damages sustained by Agency.
Article 92. AGENCY'S DELAY AND OTHER FAILURE TO PERFORM

If, due to causes beyond the control and without the fault or negligence of Agency, Agency is
unduly delayed or is unable to deliver to Contractor for servicing all or any part of the agricultural
commodity which Contractor has contracted to service, Agency shall not be required to deliver or
replace such commodity and shall be liable only for the cost (including transportation and handling
costs) of containers and packaging materials purchased by Contractor for use in performance of
the contract: Provided, that Contractor delivers such containers and packaging materials to
Agency.

Article 93. PERFORMANCE REPORT

Contractor shall prepare a Form ASCS-11, "Performance Report," as of the close of business
each day when the agricultural commodity is received, processed or packaged or the serviced
commodity is shipped. The original and one copy of this report signed by a representative of
Contractor and an inspector shall be mailed promptly to the ASCS Management Office. Three
copies of the report will be retained by the inspector. Form ASCS-11 will be supplied to the
Contractor by Agency.

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Article 94. SERVICE CONTRACT ACT OF 1965, AS AMENDED

All contracts entered into by the United States or the District of Columbia, in excess of $2,500,
or in an indefinite amount, the principal purpose of which is to furnish services through the use of
service employees are subject to the following provisions:

(a) Service Contract Act of 1965, as amended: This contract is subject to the Service Contract
Act of 1965, as amended (41 U.S.C. 351 et seq.) and is subject to the following provisions and
to all other applicable provisions of the Act and regulations of the Secretary of Labor issued
thereunder (29 CFR Part 4).
(b) (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 there is such a wage determination attached to this contract, the Contracting Officer
shall require that 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), be classified by the Contractor 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 section. (The information collection requirements contained in
the following paragraphs of this section have been approved by the Office of Management and
Budget under OMB control number 1215-0150.)
(ii) Such conforming procedure shall be initiated by the Contractor prior to the
performance of contract work by such unlisted class of employee. A written report of the
proposed conforming action, including information regarding the agreement or disagreement of
the authorized representative of the employees involved or, where there is no authorized
representative, the employees themselves, shall be submitted by the Contractor to the
Contracting Officer no later than 30 days after such unlisted class of employees performs any
contract work. The Contracting Officer shall review the proposed action and promptly submit a
report of the action, together with the Agency's recommendation and all pertinent information
including the position of the Contractor and the employees, to the Wage and Hour Division,
Employment Standards Administration, U.S. Department of Labor, for review. 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
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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 the 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 this section, a new
conformed wage rate and fringe benefits may be assigned to such 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 class of
employees, the Contractor shall advise the Contracting Officer of the action taken but the other
procedures in paragraph (b)(2)(ii) of this section 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 pursuant to paragraphs (b)(2)(i)
and (ii) of this section 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 such
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 paragraphs (b)(2)(i) through (v) of this
section, 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 of employees
commenced contract work.
(3) If, as authorized pursuant to section 4(d) of the Service Contract Act of 1965 as
amended, 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 shall be subject to
adjustment after 1 year and not less often than once every 2 years, pursuant to wage
determinations to be issued by the Wage and Hour Division, Employment Standards
Administration of the Department of Labor as provided in such Act.
(c) The Contractor or subcontractor may discharge the obligation to furnish fringe benefits
specified in the attachment or determined conformably thereto by furnishing any equivalent
combinations of bona fide fringe benefits, or by making equivalent or differential payments in cash
in accordance with the applicable rules set forth in Subpart D of 29 CFR Part 4, and not
otherwise.
(d) (1) 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 the
contract (regardless of whether they are service employees) less than the minimum wage
specified by section 6(a)(1) of the Fair Labor Standards Act of 1938. Nothing in this provision
shall relieve the Contractor or any subcontractor of any other obligation under law or contract for
the payment of a higher wage to any employee.
(2) If this contract succeeds a contract, subject to the Service Contract Act of 1965 as
amended, 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
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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
agreements, 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 4.1b(b) of 29 CFR
Part 4 apply or unless the Secretary of Labor or his authorized representative finds, after hearing
as provided in 4.10 of 29 CFR Part 4 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 4.11 of 29 CFR Part 4, 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.

(e) 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 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. (Approved by the
Office of Management and Budget under OMB control number 1215-0150.)
(f) 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 or
hazardous or dangerous to the health or safety of service employees engaged to furnish these
services, and the Contractor or subcontractor shall comply with the safety and health standards
applied under 29 CFR Part 1925.
(g) (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 records containing the information
specified in paragraphs (g)(1)(i) through (vi) of this section for each employee subject to the Act
and shall make them available for inspection and transcription by authorized representatives of the
Wage and Hour Division, Employment Standards Administration of the U.S. Department Of
Labor. (Sections 4.6(g)(1)(i) through (iv) approved by the Office of Management and Budget
under OMB control number 1215-0017 and sections 4.6(g)(1)(v) and (vi) approved under OMB
control number 1215-0150.):
(i) Name and address and social security number of each employee.
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(ii) The correct work classification or classifications, rate or rates of monetary wages
paid and fringe benefits provided, rate or rates of fringe benefit payments in lieu thereof, and total
daily and weekly compensation of each employee.
(iii) The number of daily and weekly hours so worked by each employee.
(iv) Any deductions, rebates, or refunds from the total daily or weekly compensation of
each employee.
(v) A list of monetary wages and fringe benefits for those classes of service employees
not included in the wage determination attached to this contract but for which such wage rates or
fringe benefits have been determined by the interested parties or by the Administrator or
authorized representative pursuant to the labor standards clause in paragraph (b) of this section.
A copy of the report required by the clause in paragraph (b)(2)(ii) of this section shall be deemed
to be such a list.
(vi) Any list of the predecessor Contractor's employees which had been furnished to the
Contractor pursuant to 4.6(1)(2).
(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 such records for inspection and
transcription shall be a violation of the regulations and this contract, and in the case of failure to
produce such records, the Contracting Officer, upon direction of the Department of Labor and
notification of the Contractor, shall take action to cause suspension of any further payment or
advance of funds until such 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.
(h) 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. Such payments shall be made
no later than one pay period following the end of the regular pay period in which such wages
were earned or accrued. A pay period under this Act may not be of any duration longer than
semi-monthly.
(i) 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 Agency 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 these clauses relating to the Service
Contract Act of 1965, 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.
(j) The Contractor agrees to insert these clauses in this section relating to the Service Contract
Act of 1965 in all subcontracts subject to the Act. The term "Contractor" as used in these
clauses in any subcontract, shall be deemed to refer to the subcontractor, except in the term
"Government prime Contractor."
(k) (1) As used in these clauses, the term "service employee" 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 those terms are defined in Part 541 of Title 29, Code
of Federal Regulations, as of July 30, 1976, and any subsequent revision of those regulations.
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The term "service employee" includes all such persons regardless of any contractual relationship
that may be alleged to exist between a Contractor or subcontractor and such persons.

(2) The following statement is included in contracts pursuant to section 2(a)(5) of the Act as
is for informational purposes only:
The following classes of service employees expected to be employed under the contract with
the Government would be subject, if employed by the contracting Agency, to the provisions of 5

U.S.C. 5341 or U.S.C. 5332 and would, if so employed, be paid not less than the following
rates of wages and fringe benefits:
EMPLOYEE CLASS:

MONETARY WAGE - FRINGE BENEFITS:

(1) (1) 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
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. (Approved by the Office of
Management and Budget under OMB control number 1215-0150.)
(2) 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 (4.173 of Regulations, 29
CFR Part 4), the incumbent prime Contractor shall furnish to 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. (Approved by the Office of Management and
Budget under OMB control number 1215-0150.)
(m) Rulings and interpretations of the Service Contract Act of 1965, as amended, are contained
in Regulations, 29 CFR Part 4.
(n) (1) By entering into this contract, the Contractor (and officials thereof) certifies that neither
it 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 pursuant
to 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 pursuant to 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.
(o) Notwithstanding any of the clauses in paragraphs (b) through (m) of this section relating to
the Service Contract Act of 1965, the following employees may be employed in accordance with
the following variations, tolerances, and exemptions, which the Secretary of Labor,
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pursuant to section 4(b) of the Act prior to its amendment by Public Law 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 Service Contract Act without
diminishing any fringe benefits or cash payments in lieu thereof required under section 2(a)(2) of
that 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 Service Contract 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 Parts 525 and 528 of Title 29 of the Code of Federal Regulations.
(p) 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.
(q) An employee engaged in an occupation in which he or she customarily and regularly receives
more than $30 month in tips may have the amount of 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: Provided,
however, that the amount of such credit may not exceed $1.24 per hour beginning January 1,
1980, and $1.34 per hour after December 31, 1980. To utilize this proviso:
(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; (approved by the Office of Management and Budget under OMB control number
1215-0017);
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(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.
(r) Disputes concerning labor standards. Disputes arising out of the labor standards provisions
of this contract shall not be subject to the general disputes clause of this contract. Such disputes
shall be resolved in accordance with the procedures of the Department of Labor set forth in 29
CFR Part 4, 6, and 8. 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, and the employees or their representatives.
Article 95. GOVERNMENT PROPERTY (FIXED-PRICE CONTRACTS)

(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 article.
(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 article.
(b) Changes In Government-furnished property. (1) The Contracting Officer may, by written
notice, (i) decrease the Government-furnished 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 article, 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
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property"), are subject to the provisions of this article. 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) 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), Title 48, C.F.R. 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 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 article.
(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 article. 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 article specifies an equitable adjustment, it shall be made
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to any affected contract provision in accordance with the procedures of the Changes article.
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 Government-furnished 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 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 article may properly
include restoration or rehabilitation costs.
(k) Communications. All communications under this article shall be in writing.
(1) Overseas contracts. If this contract is to be performed outside of the United States of
America, its territories, or possessions, the words "Government" and "Government-furnished"
(wherever they appear in this article) shall be construed as "United States Government" and
"United States Government-furnished," respectively.
Article 96. FAIR LABOR STANDARDS ACT AND SERVICE CONTRACT ACT--PRICE
ADJUSTMENT

(a) 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 article.
(b) The contract price or contract unit price labor rates will be adjusted to reflect increases or
decreases by the Contractor in wages or fringe benefits of employees working on this contract 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.
(c) Any such adjustment will be limited to increases or decreases in wages or fringe benefits
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as described in paragraph (b) above, and to the concomitant 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 profits.

(d) The Contractor shall notify the Contracting Officer of any increase claimed under this article
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 article, but nothing in the article 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.
(e) 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.
Article 97. PROCUREMENT INTEGRITY-SERVICE CONTRACTING

(Applicable to contracts and contract modifications in excess of $100,000.)

(a) Definitions. The definitions in 48 C.F.R. 3.104-4 are hereby incorporated in this Article.
(b) The Contractor shall establish a procurement ethics training program for its employees
serving as procurement officials. The program shall, at a minimum-(
1) Provide for the distribution of written explanations of the provisions of section 27 of the
Office of Federal Procurement Policy Act (41 U.S.C. 423), as implemented in the FAR and
USDA-1, to such employees; and
(2) Require each such employee, as a condition of serving as a procurement official, to certify
to the Contracting Officer that he or she is familiar with the provisions of the Act, as
implemented in the FAR and USDA-1, and will not engage in any conduct prohibited by
subsection 27(a), (b), (d), or (f) of the Act, as implemented in the FAR and USDA-1, and will
report immediately to the Contracting Officer any information concerning a violation or possible
violation of the prohibitions.
(c) Pursuant to 48 C.F.R. 3.104-9(d), a Contractor employee who is serving as a procurement
official may be requested to execute additional certifications.
(d) If a Contractor employee serving as a procurement official ceases performance of these
duties during the conduct of such procurement expected to result in a contract or contract
modification in excess of $100,000, such employee shall certify to the Contracting Officer that
he or she understands the continuing obligation, during the conduct of the agency procurement,
not to disclose proprietary or source selection information related to such agency procurement.
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