ARTICLE 1-DEFINITIONS. As used throughout this Agreement:
- “Affiliate” means any entity controlling, controlled by, or under common control of a party to this Agreement.
- “Agreement” means these terms and conditions (“Supply Agreement”), purchase orders or purchase agreements issued to Seller referencing this Supply Agreement (“Order(s)”), and any pricing agreements, specifications, statements of work, or other papers referenced in such Orders.
- “Direct Procurement” means the purchase of any Good or Service that is incorporated into or performed on an aircraft or part thereof, or is otherwise provided to Purchaser’s customer.
- “Goods” means all products contracted for and supplied by Seller under this Agreement, including all components, raw materials, chemicals, finished goods, intermediate assemblies and associated packaging thereof.
- “Intellectual Property” means data, notes, reports, specifications, designs, drawings, computer software including source code and object code, methods, processes, techniques, know-how, ideas, inventions, and discoveries and all other intellectual property.
- “Intellectual Property Rights” means patents, patent applications, trade secrets, copyrights, trademarks, maskworks, database rights, industrial property rights, and other similar rights.
- "Prime Contract" means a contract defined by a government contract number printed on Orders issued pursuant to this Agreement.
- “Proprietary Information” means with respect to either party, all information and data, identified either orally or in writing as “Proprietary”, “Confidential”, or a similar designation, whether technical or non-technical, in any medium, furnished or made available directly or indirectly by one party to the other party.
- “Purchaser” means the party contracting with Seller for Goods and/or Services and identified as the purchasing entity on the Order.
- “Seller" means the party contracting with Purchaser to perform the work hereunder.
- “Services” means those services contracted for and supplied by Seller under this Agreement and as may further be described in Orders, statements of work, specifications, or other papers included in this Agreement.
ARTICLE 2-TERMS AND CONDITIONS. Either Seller’s written acknowledgement or Seller’s full or partial performance, whichever occurs first, will constitute acceptance of the Orders. Any acceptance of this Supply Agreement by Seller is limited to acceptance of the express terms of the offer set forth in this Agreement. Any proposal for additional or different terms and conditions (whether included in Seller’s quote, acknowledgement, or any other document) is rejected unless accepted in writing by the Purchaser.
ARTICLE 3-PAYMENT TERMS.
- Prices. Prices are set forth on the Order, are fixed and include all customs duties, sales, use, excise, value added or other taxes that may be levied upon any of the Goods, Services, or parties to this Supply Agreement. Seller shall pay all duties and taxes. Seller warrants that the prices shown on the Order are complete and no additional charges of any type shall be added without Purchaser’s express written consent.
- Standard Terms. Purchaser shall pay approved invoices as follows: Seller agrees to accept the invoice amount discounted by two and one half percent (2.5%) in exchange for Purchaser’s payment by the fifteenth (15th) day following the Payment Start Date. If payment is not made within fifteen days following the Payment Start Date, payment will be net ninety (90) days from the Payment Start Date. The Payment Start Date shall be the later of (a) the date performance is requested by Purchaser (e.g., in a part schedules report (Goods) or statement of work (Services)), (b) the material received date as identified in Purchaser's computer system, or (c) the invoice approval date (which shall not be earlier than the date of complete performance). The “Net Date” against which an early payment discount will be taken will be ninety (90) days after the Payment Start. If the early payment discount date falls on a weekend or a holiday, Purchaser will pay Seller on the next business day. If Purchaser pays before or after the early payment discount day, the invoice will be discounted on a pro rata basis to reflect each day that payment is accelerated.
- Invoicing. Seller shall invoice Purchaser not later than ninety (90) days after delivery of the Goods and/or completion of the Services (“Due Date”), unless otherwise specified in the applicable Purchase Order. Purchaser shall deem any invoice invalid that is received more than ninety (90) days after the Due Date, unless specific terms to the contrary are acknowledged by Purchaser in writing.
- Set-off. Purchaser shall be entitled to set off any amount owing from Seller to Purchaser or to any of Purchaser's Affiliated companies against any amount payable under this Agreement.
ARTICLE 4-TRANSPORTATION AND DELIVERY.
- Unless otherwise stipulated on the face of the Order, the applicable shipping and delivery Incoterms will be FOB (named place) Incoterms 2010. In any event, title to Goods shall pass to Purchaser upon delivery. Purchaser insures all Goods for which it accepts risk of loss while such Goods are in transit. Seller shall not declare any insurance value on such Goods shipped via Purchaser’s carrier.
- Seller shall release rail or truck shipments at the lowest released valuation permitted in the governing tariff or classification. Purchaser will pay no charges for unauthorized transportation. Any unauthorized shipment, which results in excess transportation charges, must be fully prepaid by the Seller. If Seller does not comply with the stated delivery schedule, Purchaser may require delivery by the fastest way. The charges resulting from this mode of transportation must be fully prepaid and the Seller must absorb the full cost of the shipment.
- Seller agrees to contact Purchaser upon knowledge of any known or suspected security breach affecting the Goods (contraband, smuggling, threatening or suspicious activities detected, tampered container, trailer, lock or seal including a seal broken during a customs inspection).
- Upon Purchaser's request, all shipment containers for Goods shall be labeled in accordance with Purchaser's Bar Code Shipping Label Instructions. Seller shall submit example labels for approval within sixty (60) days of said request. Seller shall designate an individual responsible for compliance with said instructions and shall act as the Seller's contact for issues concerning bar code labels. If Seller uses Purchaser’s supplier collaboration portal, Seller shall not print bar code shipping labels more than twenty-four hours prior to transit of Goods to Purchaser.
- Goods shall be shipped only as specified in the Order, or as subsequently directed in writing, and shall be in strict conformity with the governing tariff rules and regulations. Seller shall pack or otherwise prepare all goods in accordance with good commercial practice, to meet carrier requirements and to safeguard against damage from weather and transportation. No charges shall be allowed for packing or cartage unless noted on the Order. Each package shall be marked to show the Order Number and shall include a packing sheet. The expense of returning all Goods, for whatever reason, shall be borne by Seller, with title and risk of loss passing to Seller at Purchaser’s facility.
ARTICLE 5-DELAY; TERMINATION.
- Delay and Default. Time is and shall remain of the essence in the performance of this Agreement and Seller shall strictly adhere to the shipment or delivery schedules specified in this Agreement. Failure to deliver in accordance with the Agreement Schedule, if unexcused, shall constitute a material breach of this Agreement. In the event of any anticipated or actual delay, including but not limited to delays attributed to labor disputes, Seller shall: (i) promptly notify Purchaser in writing of the reasons for the delay and the actions being taken to overcome or minimize the delay; (ii) provide Purchaser with a written recovery schedule; and (iii) if requested by Purchaser, ship via air or other expedited routing, at no additional cost to Purchaser, to avoid or minimize delay to the maximum extent possible.
- Termination for Convenience. Purchaser may terminate all or any part of this Agreement for convenience at any time after notice specifying the extent of termination and the effective date. After receipt of notice of termination, unless otherwise directed by Purchaser, Seller shall immediately: (1) stop work as directed in the notice; (2) place no further subcontracts or orders for materials, services, or facilities, except as necessary to complete the continued portion of the Agreement; and (3) terminate all subcontracts to the extent they relate to work terminated. Seller shall submit a final termination settlement to Purchaser in the form prescribed by Purchaser within ninety (90) days from the effective date of the termination. In no event shall Purchaser be liable for lost or anticipated profits, or unabsorbed indirect costs or overhead, or for any sum in excess of the total Agreement price. In the event that Purchaser wrongfully terminates this Agreement under paragraph (a), in whole or in part, such termination becomes a termination for convenience under this paragraph (b).
- Termination for Default.
- Purchaser may, by written notice to Seller, cancel all or part of this Agreement: (i) if Seller fails to deliver the Goods within the time specified by this Agreement or any written extension; (ii) if Seller fails to perform any other provision of this Agreement or fails to make progress, so as to endanger performance of this Agreement, and, in either of these two circumstances, within ten (10) days after receipt of notice from Purchaser specifying the failure, does not cure the failure or provide Purchaser with a written detailed plan adequate to cure the failure if such failure reasonably cannot be cured within such ten (10) days and such plan is acceptable to Purchaser; or (iii) in the event of Seller's bankruptcy, suspension of business, insolvency, appointment of a receiver for Seller's property or business, or any assignment, reorganization or arrangement by Seller for the benefit of its creditors.
- Seller shall continue all work not canceled.
- Purchaser may require Seller to transfer title and deliver to Purchaser, as directed by Purchaser, any (A) completed Goods, and (B) any partially completed Goods and materials, parts, tools, dies, jigs, fixtures, plans, drawings, information and Agreement rights (collectively, "Manufacturing Materials") that Seller has specifically produced or acquired for the canceled portion of this Agreement. Upon direction from Purchaser, Seller shall also protect and preserve property in its possession in which Purchaser or its customer has an interest.
- Purchaser shall pay the Agreement price for completed Goods accepted. In addition, any payment for Manufacturing Materials accepted by Purchaser and for the protection and preservation of property shall be at a price determined in accordance with the "Termination for Convenience" Article of this Agreement, except that Seller shall not be entitled to profit. Purchaser may withhold from any amount due under this Agreement any sum Purchaser determines to be necessary to protect Purchaser or Purchaser's customer against loss because of outstanding liens or claims of former lien holders.
- If, after cancellation, it is determined that Seller was not in default, the rights and remedies of the Parties shall be as if the Agreement had been terminated according to the "Termination for Convenience" Article of this Agreement.
ARTICLE 6 -WARRANTY. Seller expressly warrants that all Goods furnished under the Order: (a) shall conform to all specifications, drawings, descriptions, samples and standards provided by Seller to Purchaser, will be new, and will be free from defects in material and workmanship, latent or patent; (b) shall be merchantable, and will be safe and appropriate for the purpose for which goods of its kind are normally used; and (c) if Seller knows or has reason to know the particular purpose for which Purchaser intends to use the Goods, shall be fit for such particular purpose. Seller warrants that it has good and marketable title to the Goods and that all Goods are free from claims, inkling those of infringement or the like, or liens or encumbrances of any third party. Inspection, testing, acceptance or use of, or payment for, Goods or Services shall not affect Seller’s obligation under these warranties, and such warranties shall survive inspection, testing, acceptance, use and payment. The warranties contained herein shall begin upon Purchaser's final acceptance of the Goods and shall extend for a period of three (3) years from the date of shipment to Purchaser’s customer. The warranties herein shall run to Purchaser and its successors, assigns and customers. In the event of any defect or nonconformance in the Goods, Purchaser may, at its option and at Seller’s expense: (i) require prompt correction or replacement of the Goods, or (ii) return the Goods for credit or refund. Return to Seller of defective or non-conforming Goods and redelivery to Purchaser of corrected or replaced Goods shall be at Seller's expense. Goods required to be corrected or replaced shall be subject to the requirements of this Agreement in the same manner and to the same extent as Goods originally delivered under this Agreement, but only as to the corrected or replaced part or parts thereof. Even if the Parties disagree about the existence of a breach of this warranty, Seller shall promptly comply with Purchaser's direction to: (i) repair, rework or replace the Goods, or (ii) furnish any materials or parts and installation instructions required to successfully correct the defect or nonconformance. If Seller fails to correct defects in or replace nonconforming Goods promptly, Purchaser may make such corrections or replace such goods and charge Seller for the cost incurred by Purchaser in doing so. A breach of warranty shall be deemed to accrue when the actual breach is discovered, not when the Goods are tendered.
ARTICLE 7-DISPUTE RESOLUTION.
- Arbitration. If a dispute arises under or relating to this Agreement in any way, the parties will endeavor to resolve the dispute amicably, including by designating senior managers who will meet and use commercially reasonable efforts to resolve any such dispute. If the parties’ senior managers do not resolve the dispute within sixty (60) days of first written request, either party may request that the dispute be settled and finally determined by binding arbitration. The arbitration will be conducted in accordance with the then-current Commercial Arbitration Rules of the American Arbitration Association by one or more arbitrators appointed in accordance with the applicable rules. The seat of the arbitration shall be Los Angeles, California, and any hearings shall take place at a mutually agreed location or as the arbitrator(s) order. The arbitrator(s) will have no authority to award punitive damages, attorney’s fees and related costs or any other damages not measured by the prevailing party's actual damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of the Agreement and applicable law. The award of the arbitrator(s) will be final, binding and not appealable to the greatest extent the law permits, and judgment may be entered thereon in any court of competent jurisdiction. All statements made or materials produced in connection with this dispute resolution process and arbitration are confidential and will not be disclosed to any third party except as required by law or subpoena. Except as specified in paragraph (c) below, the parties intend that the dispute resolution process set forth in this Article will be their exclusive remedy for any dispute arising under or relating to this Agreement or its subject matter. Any claim against Purchaser shall be barred unless Seller has requested that it be resolved by arbitration in accordance with this Article within one year of the dispute, which shall be the effective date of termination if the dispute is related to termination.
- Exception. Either party may at any time, without inconsistency with paragraph (a) above, seek from a court of competent jurisdiction any equitable, interim, or provisional relief to avoid irreparable harm or injury. Paragraph (a) above will not apply to and will not bar litigation regarding claims related to a party’s Proprietary Information or Intellectual Property, nor will paragraph (a) above be construed to modify or displace the ability of the parties to effectuate any termination contemplated by this Agreement.
ARTICLE 8-PURCHASER'S PROPERTY.
- Property includes equipment, materials, bailed materials, samples, parts, tooling, tooling drawings, and software (“Property”). Purchaser’s Property includes Property furnished to Seller by Purchaser or on behalf of Purchaser, or paid for by Purchaser (“Purchaser’s Property”). Purchaser’s Property is the property of Purchaser.
- Seller may use Purchaser’s Property for the sole purpose of performing its obligations under this Agreement. Nothing in this Article or elsewhere in this Agreement shall be interpreted as being an implied license or a license by estoppel to Intellectual Property Rights in Purchaser’s Property.
- Seller shall: plainly mark or otherwise adequately identify Purchaser’s Property as being the property of Purchaser, where practical; safely store Purchaser’s Property apart from other Property; hold Purchaser’s Property at Seller's risk and insured for replacement cost with loss payable to Purchaser while in Seller's custody or control; maintain Purchaser’s Property; and upon Purchaser's written request, remove and deliver Purchaser’s Property to Purchaser in the same condition as originally received by Seller, except for reasonable wear and tear.
- Seller shall not analyze, have analyzed, or cause to be analyzed Purchaser’s Property to determine its chemical composition, physical properties, or for reverse engineering.
- Seller may not use, disclose to others or reproduce Purchaser’s Property for any other purpose, including, but not limited to, (1) the design, manufacture, or repair of parts, or to obtain FAA or any other governmental approval to do so; or (2) to provide any part by sale or otherwise, to any person or entity other than Purchaser.
- Government Contracts. If Property under this Agreement is furnished or paid for under a government subcontract (as defined in Appendix 1, below) that includes ownership of Property by the government, the government shall retain ownership of such Property. Seller hereby grants to Purchaser an irrevocable, fully paid up, perpetual license to use such Property.
ARTICLE 9-INTELLECTUAL PROPERTY.
- Background Intellectual Property
- Intellectual Property developed or acquired by either party before or outside the scope of this Agreement is considered Background Intellectual Property (“Background Intellectual Property”).
- Nothing in this Agreement shall entitle a party to ownership rights in any Background Intellectual Property of the other party.
- Seller grants to Purchaser a non-exclusive, perpetual, irrevocable, fully paid-up, worldwide license to use, copy, and make derivative works of Seller’s Background Intellectual Property and to disclose Seller’s Background Intellectual Property to Purchaser’s customers, partners, Affiliates, and contractors in connection with the sale, test, qualification, adaptation, modification, servicing, or repair of Goods and/or Services, including where such Goods and/or Services are incorporated into a higher tier assembly. The license granted herein shall supersede any restrictions stated in any Proprietary Information Agreement and shall take precedence over any restrictive or proprietary markings contained on the face of any Goods and/or Services documentation and/or data deliverables pursuant to an Order. To the extent, Purchaser discloses Seller Proprietary Information under this paragraph, such disclosure will be subject to the confidentiality terms consistent with those set forth in Article 10(c).
- Foreground Intellectual Property
- Intellectual Property developed by Seller when performing its obligations under this Agreement is considered Foreground Intellectual Property (“Foreground Intellectual Property”).
- Purchaser shall own all Foreground Intellectual Property along with any Intellectual Property Rights thereto. As required under the terms of an Order or at Purchaser’s request, Seller shall deliver all such Foreground Intellectual Property to Purchaser.
- Seller hereby assigns and agrees to assign all rights in Foreground Intellectual Property to Purchaser. In addition, Seller, will provide reasonable, timely assistance to Purchaser (at Purchaser’s expense) to enable Purchaser to secure Intellectual Property Rights in Foreground Intellectual Property.
- When an Order includes line items for Goods and/or Services or an adaption or improvement to existing Goods and/or Services, Intellectual Property relating to such line items shall be considered Foreground Intellectual Property unless Seller establishes by documented evidence that such Intellectual Property was developed wholly outside of the scope of this Agreement, and without use of Purchaser’s funds, Purchaser’s Property, and Purchaser’s Background Intellectual Property.
- All Foreground Intellectual Property that is considered “Work Made for Hire” as defined in in Section 101 of the United States Copyright Act, 17 U.S.C. § 101, and used in 17 U.S.C. § 201 (or relevant EU legislation and the UK Copyright, Design and Patents Act 1988, c. 48, as amended), shall be deemed a “work made for hire” under this Agreement, with all right, title and interest in such Foreground Intellectual Property vesting with Purchaser.
- Seller will procure from its employees and subcontractors at Seller’s sole expense (including any compensation due Seller’s employees), all Intellectual Property Rights in Foreground Intellectual Property. Further, Seller will secure from Seller’s employees and subcontractors the execution of all patent applications, assignments, and other instruments necessary for procuring Intellectual Property Rights and vesting title in Foreground Intellectual Property for Purchaser.
- Government Contracts. If the Goods or Services under this Agreement are being delivered pursuant to a government subcontract (as defined in Appendix 1, below) that includes retention of ownership of Foreground Intellectual Property by the Seller, provision (b) above shall not apply, and Seller shall retain ownership of such Foreground Intellectual Property (“Seller’s Foreground Intellectual Property”). Seller hereby grants to Purchaser a perpetual, irrevocable, fully paid up, worldwide license to use, copy, and make derivative works of Seller’s Foreground Intellectual Property, with the right to sublicense, and to disclose Seller’s Foreground Intellectual Property to Purchaser’s customers, partners, Affiliates, and contractors in connection with the sale, test, qualification, adaptation, modification, servicing, or repair of Goods and/or Services, including where such Goods and/or Services are incorporated into a higher tier assembly. Purchaser, Purchaser’s customers, suppliers, partners, Affiliates, regulators, auditors, and inspectors shall not use Seller’s Foreground Intellectual Property for the purposes of manufacturing the Goods and/or Services or procuring the Goods and/or Services from sources other than Seller, without Seller’s written approval. The license granted in this Article 9(c) shall supersede use restrictions stated in any Proprietary Information Agreement, provided that to the extent Seller’s Foreground Intellectual Property is considered Seller’s Proprietary Information, such Seller’s Foreground Intellectual Property will be subject to the confidentiality terms of Article 10.
- Patent Markings. If Purchaser notifies Seller that Goods ordered under this Agreement are patented, Seller agrees to mark such Goods with any patent numbers or other markings designated by Purchaser, including updates to such numbers or markings.
- Intellectual Property Representations and Warranties. Seller represents and warrants:
- It is not the proprietor of any Intellectual Property Rights that would impair or restrict the freedom of Purchaser, Purchaser’s Affiliates, and their respective vendors and customers to make use of the Goods and/or Services;
- Goods and/or Services shall not infringe any Intellectual Property Rights of any third party;
- Seller will not assert any Intellectual Property Rights against Purchaser, Purchaser’s Affiliates, and their respective vendors and customers based on their use of the Goods and/or Services or their use, copying, and making derivative works of Seller’s Background Intellectual Property; and
- Seller will obtain the same warranties and commitment contained in this article running in favor of Purchaser, Purchaser’s Affiliates, and their respective vendors and customers from each of Seller’s subcontractors.
ARTICLE 10-CONFIDENTIALITY AND DATA PROTECTION.
- Each party’s Proprietary Information shall remain the property of that party except as expressly provided otherwise by the other provisions of this Agreement.
- All Purchaser’s Property, Purchaser’s Background Intellectual Property, Foreground Intellectual Property, and Orders shall be deemed Purchaser’s Proprietary Information.
- Seller shall not disclose Purchaser’s Proprietary Information to any third party or use Purchaser’s Proprietary Information for the benefit of any third party without Purchaser’s consent. Seller shall protect Purchaser’s Proprietary Information against unauthorized use or disclosure using at least those measures that it takes to protect its own Proprietary Information of a similar nature, but no less than reasonable care. Seller will permit access to Purchaser’s Proprietary Information to only Seller’s personnel who have a need to know for the purpose of performing Seller’s obligations under this Agreement. In the event that Purchaser is required by applicable law or regulation to disclose Seller’s Proprietary Information, Purchaser shall provide Seller with prompt notice thereof and a reasonable opportunity to comment or undertake protective measures prior to such disclosure. Purchaser may disclose only the information that is required by such law or regulation to be disclosed without liability under this Agreement.
- Notwithstanding the restrictions in this Article, Seller may disclose Purchaser’s tooling and tooling drawings to Seller’s sub-contractors for the sole purpose of assisting Seller in performing its obligations under this Agreement, provided that Seller’s sub-contractors agree in writing to obligations of confidentiality at least as restrictive as those set forth in this Agreement for Purchaser’s benefit.
- Seller shall be liable to Purchaser for any unauthorized use or disclosure by Seller’s personnel or any third party to which Seller discloses Purchaser’s Proprietary Information.
- Purchaser reserves the right at any time to make changes within the general scope of this Agreement. Such changes may include: (1) drawings, designs or specifications; (2) technical clarifications; (3) artwork; (4) quantity; (5) method of shipment or packing; (6) quality; (7) place or time of delivery; or (8) amount of Purchaser’s furnished property.
- If any change causes a significant impact on the cost of, or the time required for, performance of any work under this Agreement, an equitable adjustment shall be made in the price or delivery schedule, or both as applicable, in writing. Any Seller claim for adjustment under this article shall be deemed waived unless asserted in writing within twenty (20) days after receipt by Seller of the notice to make the change and may only include reasonable, direct costs that will necessarily be incurred as a direct result of the change.
- Seller shall not proceed to implement any change for which Seller will seek an equitable adjustment until Purchaser provides for such change in writing.
- Nothing in this section, including any disagreement with Purchaser as to the equitable adjustment to be made, shall excuse Seller from proceeding with the change provided that Purchaser pays Seller all undisputed amounts pursuant to this Agreement.
- Seller shall notify Purchaser in writing in advance of any and all: (1) changes to the Goods and/or Services, their specifications and/or composition; (2) process changes; (3) plant and/or equipment/tooling changes or moves; (4) transfer of any work hereunder to another site; and/or (5) sub-supplier changes, and no such change shall occur until Purchaser has had the opportunity to conduct such audits, surveys and/or testing necessary to determine the impact of such change on the Goods and/or Services and has approved such change in writing.
- Seller shall be responsible for obtaining, completing and submitting proper documentation regarding any and all changes, including complying with any written change procedures issued by Purchaser.
- For Goods that require Purchaser’s source approval, Seller agrees to provide a minimum advance notice of 180-days to Purchaser of any changes to significant processes, including, but not limited to physical relocation of any manufacturing or quality operations. Within fourteen (14) days of such notice, Seller will generate a Critical Process Control plan, which is subject to Purchaser’s review and approval.
ARTICLE 12-ANTICIPATION OF DELIVERY SCHEDULE. It is Seller’s responsibility to comply with its scheduled lead times, but not to anticipate Purchaser’s requirements. Any material commitments or production arrangements made by Seller more than the amount or in advance of the time necessary to meet schedules that are within lead time shall be at Seller’s sole risk and expense. Goods shipped to Purchaser in advance of Purchaser’s requirements may be returned to Seller at Seller’s expense.
ARTICLE 13-ASSIGNMENT AND CHANGE IN OWNERSHIP. Any assignment or attempt to assign or subcontract Seller’s obligations under this Agreement without the advance written consent of Purchaser shall be null and void and shall give Purchaser the right to terminate this Agreement for default.
ARTICLE 14-QUALITY ASSURANCE, INSPECTION, AND TESTING.
- Seller shall be responsible for the specific quality, performance, productivity provisions, and documentation requirements, if any, set forth in this Agreement. In addition, Seller shall be responsible for imposing the applicable quality assurance requirements on its subcontractors. Purchaser and Purchaser’s customer, shall each have the right, at no charge to Purchaser or Purchaser’s customer, to access the sites where the work under this Agreement is performed, to (1) conduct quality audits, (2) perform or witness inspections or tests of the Goods or Services furnished hereunder at Seller’s facility (or elsewhere), (3) assess conformance with Purchaser’s specifications, and (4) assess conformance with Seller’s covenants under this Agreement. In accordance with 14 CFR 145.223 and 14 CFR 21.140, any Seller that accepts parts, which are regulated by the Federal Aviation Administration (FAA), or those regulated by EASA, DAOS or other regulator, must provide facility access to that regulator for surveillance of these parts.
- The Seller agrees to use only experienced, trained and qualified employees in the performance of its obligations under this Agreement and all Services performed must be of first class quality and workmanship.
- Notwithstanding Purchaser’s right to audit in paragraph (a) above, all Goods and Services supplied under this Agreement shall be received subject to Purchaser’s right of inspection, count, testing, acceptance and/or rejection per the technical specifications. Payment for Goods and/or Services delivered hereunder shall not constitute acceptance thereof, and all payments against documents shall be made with a reservation of rights by Purchaser for defects in Goods and/or Services, including, without limitation, defects apparent on the face thereof. The making of, or failure to make, any inspection or acceptance of the Goods or Services shall in no way impair Purchaser’s right to reject nonconforming Goods or Services or to avail Purchaser of any other remedies to which it may be entitled.
- If Seller delivers defective or non-conforming Goods, Purchaser may at its option and at Seller's expense: (i) require Seller to promptly correct or replace the Goods; (ii) return the Goods for credit or refund; (iii) correct the Goods; or (iv) obtain replacement Goods from another source. Return to Seller of defective or non-conforming Goods and redelivery to Purchaser of corrected or replaced Goods shall be at Seller's expense.
- Seller shall not redeliver corrected or rejected Goods without disclosing the former rejection or requirement for correction. Seller shall disclose any corrective action taken. Repair, replacement and other correction and redelivery shall be completed as may reasonably direct.
- Seller certifies that it shall provide and maintain quality control, inspection, and process control systems in accordance with Purchaser’s then current specification for supplier quality product requirements, as applicable (AQAR and other quality requirements as specified). Seller will maintain Objective Evidence of its conformance with this paragraph. Objective Evidence means any statement of fact pertaining to the quality of a product or service based on observations, measurements or tests that can be fully verified. Evidence must be expressed in terms of specific quality requirements or characteristics. These characteristics are identified in drawings, specifications, and other documents that describe the item, process, or procedure.
- Counterfeit Goods. For purposes of this Article, Goods consist of those parts deliverables under this Agreement that are the lowest level of separately identifiable items (e.g., articles, components, goods and assemblies). “Counterfeit Goods” means Goods that have been misrepresented as having been designed and/or produced under an approved system or other acceptable method. Counterfeit Goods include, but are not limited to: (i) Goods that are an illegal or unauthorized copy or substitute of an Original Equipment Manufacturer (OEM) item; (ii) Goods that do not contain the proper internal or external materials or components or are not manufactured in accordance with the OEM design; (iii) Goods that are used, refurbished, or reclaimed but that Seller represents as being new; (iv) Goods that have not successfully passed all OEM required testing, verification, screening, and quality control but that Seller represents as having met those requirements; (v) Goods with a label or other marking intended, or reasonably likely, to mislead a reasonable person into believing a non-OEM Good is a genuine Good when it is not, and (vi) Goods that are an unauthorized copy or substitute that have been identified, marked, and/or altered by a source other than the item's legally authorized source and has been misrepresented to be an authorized item of the legally authorized source.
- Seller warrants and certifies that Goods delivered pursuant to this Agreement, unless otherwise specifically stated on the face of the Order, shall (i) be new, (ii) be and only contain materials obtained from the OEM or an authorized OEM reseller or distributor, (iii) not be or contain any Counterfeit Goods, and (iv) contain only authentic, unaltered OEM labels and other markings. Seller shall provide to Purchaser the OEM’s certificate of conformance for any Goods acquired from an authorized OEM reseller or distributor. Goods shall not be acquired from independent distributors or brokers unless specifically authorized in writing by Purchaser.
- Seller shall maintain a method of item traceability that ensures tracking of the supply chain back to the manufacturer of all Electrical, Electronic, and Electromechanical (EEE) parts included in assemblies and subassemblies being delivered per this Agreement. This traceability method shall clearly identify the name and location of all the supply chain intermediaries from the manufacturer to the direct source of the product for Seller, and shall include the manufacturer's batch identification for the item(s) such as date codes, lot codes, serializations, or other batch identifications. When requested by Purchaser, Seller shall provide OEM documentation that authenticates traceability of the affected items to the applicable OEM.
- Seller shall immediately notify Purchaser and the GIDEP system if it knows or suspects that it has provided Counterfeit Goods.
- In the event Goods delivered under this Agreement constitute Counterfeit Goods, Seller shall at its expense promptly replace such Goods with genuine Goods conforming to the requirements of this Agreement. Notwithstanding any other provision of this Agreement, Seller shall be liable for all costs relating to the removal or replacement of Counterfeit Goods, including without limitation Purchaser’s or Purchaser’s customer’s costs of removing such Counterfeit Goods, reinserting genuine Goods, and any testing necessitated by the reinstallation of any Goods after Counterfeit Goods have been exchanged. Purchaser reserves the right to turn over suspected Counterfeit Goods to US Governmental authorities (Office of Inspector General, Defense Criminal Investigative Service, Federal Bureau of investigation, etc.) for investigation and reserves the right to withhold payment for the suspect items pending the results of the investigation. The remedies available under this Article are in addition to any other remedies Purchaser may have available to it in law or in equity, or in any other provisions in this Agreement.
- This paragraph (f) applies in addition to any other quality provision, specification, or statement of work included in this Agreement addressing the authenticity of Goods and Services. To the extent such provisions conflict with this paragraph (f), this paragraph prevails.
- Seller shall flow the requirements of this paragraph 14(f) to its subcontractors and suppliers at any tier for the performance of this contract.
ARTICLE 15-NON-CONFORMING GOODS.
- Seller agrees that, notwithstanding the provisions of any warranties, expressed or otherwise, negotiated with respect to Goods purchased from Seller by Purchaser or Purchaser's customer, Seller shall reimburse Purchaser for labor and material cost, including overhead and general and administrative expense reasonably incurred by Purchaser about:
- Failure of Goods or Services to conform to the requirements of this Agreement or defective material, workmanship or design; or
- Any removal of Goods at Seller's request; or
- Any removal of Goods required due to any previously required changes to said Goods that Seller has failed to incorporate.
- Remedies in this Section are not exclusive and shall not be in lieu of any other remedy available at law, in equity or under this Agreement.
ARTICLE 16-INDEMNITY AND INSURANCE.
- General Indemnification. Seller shall defend, indemnify, and hold harmless the Purchaser, its directors, officers, employees, agents, representatives, successors and assigns (each an “Indemnified Party”), whether acting in the course of their employment or otherwise, from and against any and all loss, cost, expense, damage, claim, demand or liability (including reasonable attorney and professional fees and costs) arising from Seller’s negligence, willful misconduct or breach of Agreement. An Indemnified Party shall have the right to participate in the selection of counsel and Seller shall not enter into any settlement agreement that contains any admission of liability on the part of Purchaser and/or any other Indemnified Party.
- Intellectual Property Indemnification. Seller shall indemnify, defend, and hold harmless an Indemnified Party, from and against any and all loss, cost, expense, damage, claim, demand or liability (including reasonable attorney and professional fees and costs) arising out of any claim that the manufacture, use, sale, or furnishing of Goods and/or Services constitutes infringement of any Intellectual Property Rights, or for a breach of any of the representations and warranties contained in Article 9, above. If an injunction should issue, Seller shall
- Procure for Purchaser and Purchaser’s subsidiaries and Affiliates, and their respective vendors and customers, the rights to continue using said Goods and/or Services; or
- At the election and with written approval of Purchaser, (x) modify the Goods and/or Services in a manner acceptable to Purchaser so they become non-infringing; (y) remove and replace the Goods with non-infringing Goods; or (z) remove the Goods and/or discontinue the Services, refund the purchase price and reimburse Purchaser for all damages and costs associated with obtaining and installing a non-infringing alternative.
- Insurance. Seller shall obtain and keep in force for the benefit of the Seller and Purchaser the following insurance to be issued by insurance carriers with a minimum A.M. Best's rating of A-: VII, or S&P A, or better and licensed to provide insurance in the jurisdiction in which work is to be performed, with minimum limits as set forth below:
- Comprehensive General Liability – $1,000,000 combined single limit per occurrence;
- Aviation Products Liability - $1,000,000 minimum per occurrence (Aviation Direct Procurements only);
- Comprehensive Automobile Liability – Bodily injury/property damage covering all vehicles used in connection with the Goods in the amount of $1,000,000 combined single limit each occurrence;
- Statutory Workers' Compensation and or Employer’s Liability as required by state or country law.
- Seller shall provide Purchaser with a certificate of insurance evidencing that the required minimum coverage is in effect and that Purchaser is named as an additional insured, provide a waiver of subrogation clause in favor of the Purchaser, and provide that all coverage provided by the Seller shall be primary. Such insurance shall not exclude the actions of any subcontractor that Seller may utilize under this Agreement. The insurance provided by Seller hereunder shall have no effect on any obligations imposed upon Seller under this Agreement.
ARTICLE 17-SELLER’S REPRESENTATIONS.
- Compliance with Laws. Seller represents and warrants that it shall perform all activities required under this Agreement in compliance with all applicable international, national, state and local laws.
- Release of Information. Seller shall not release any information concerning this Agreement or its business relationship with Purchaser, to any third party, except as required by applicable law, rule, injunction or administrative order, without Purchaser’s prior written consent. Seller shall not use Purchaser’s name, photographs, logo, trademark, or other identifying characteristics or that of any of its subsidiaries or Affiliates without Purchaser’s prior written approval.
ARTICLE 18-SELLER’S EMPLOYEES.
- Seller's personnel performing services under this Agreement shall remain employees of Seller subject to its right of direction, control and discipline and by virtue of this Agreement, shall neither become employees of Purchaser nor be entitled to any rights, benefits or privileges of Purchaser employees. As appropriate, Purchaser shall give direction as to the ultimate objective of the project to the Seller. The Seller shall ensure that its personnel adhere to the terms and policies in this Agreement and that they have the requisite knowledge, training and ability to perform work under this Agreement competently and in accordance with applicable laws and regulations.
- Seller's employees are not authorized to enter any agreements or to make any commitments financial or otherwise on behalf of Purchaser. Specifically, no employee of Seller shall make contact with any government official regarding the continuation, renewal, amendment or modification of a Prime Contract.
ARTICLE 19-RECORD RETENTION REQUIREMENTS.
- Record Retention. For U.S. Government subcontracts, Seller shall maintain complete and accurate records in connection with its performance under this Agreement for seven (7) years after completion of performance under this Agreement, including but not limited to, Orders, memoranda of negotiations showing the principal elements of price negotiations, and records substantiating charges for labor or services, including proper time clock cards, time vouchers, or other similar records. For quality documents, Seller will maintain such records according to the applicable supplier quality specification (AQAR, or other quality requirements as specified), or seven (7) years, whichever is longer.
- Classified Information. Upon completion of work by Seller under this Agreement, Seller shall return to Purchaser any classified information furnished by Purchaser, including all reproductions thereof, and Seller shall surrender classified information or materials developed by Seller in connection with this Agreement, unless the information has been destroyed, or the retention of the information is authorized in writing, by Purchaser or the government.
ARTICLE 20-EXPORT CONTROL REQUIREMENTS.
For Non-U.S. Sellers or Sellers intending to conduct work outside of the U.S., the following clauses apply:
- Compliance with Export Laws. Seller agrees to comply with all applicable government export control laws and regulations, including but not limited to the International Traffic in Arms Regulations (“ITAR,” 22 CFR Part 120-130) and the Export Administration Regulations (“EAR,” 15 CFR Parts 730-774).
- Export Licenses. Seller agrees to obtain the required export licenses, unless otherwise agreed to by Purchaser.
- For items subject to the ITAR ONLY: In the event the Goods or Services are subject to the U.S. Department of State (as defined in Sections 120.6 and 120.9 of the ITAR), Seller agrees to maintain a valid and current Directorate of Defense Trade Controls (“DDTC”) registration and agrees to provide confirmation of such registration if requested by Purchaser.
- With respect to such defense articles and/or defense services, Seller represents and warrants that it has not and will not pay or offer to pay for the solicitation or promotion or otherwise to secure the conclusion of a sale of defense articles or defense services to or for the use of the armed forces of an international organization or non-U.S. Country any fees, commissions or political contributions as described under Part 130 of the ITAR without prior notice to Purchaser.
- In such event, Seller shall provide to the Purchaser, not later than 20 days after such an event, full disclosure of all information necessary for the Purchaser to comply fully with Sections 130.9 and 130.10 of the ITAR.).
- Prohibited Goods and Services. The U.S. prohibits the importation of Goods or the purchase of Services from certain countries, entities, or individuals. Therefore, no Goods or Services from prohibited countries, entities, or individuals may be used directly or indirectly in the activities covered by this Agreement. The list of prohibited countries can change from time to time and it is Seller's responsibility to ensure compliance with such list at all times (located inter alia, http://www.treas.gov/ofac, http://www.bis.doc.gov and http://pmddtc.state.gov/embargoed_countries/index.html.
ARTICLE 21-CUSTOMS REQUIREMENTS.
For Non-U.S. Sellers or Sellers intending to conduct work outside of the U.S., the following clauses apply:
- Importer of Record.
- Seller must show proper notification on all shipping waybills. In addition, shipping cartons and documentation must meet all U.S. customs country of origin marking and invoicing requirements. Seller will be responsible for any fines or liabilities resulting from insufficient, improper or negligent invoicing or marking of shipments.
- In addition to any other rights and remedies Purchaser may have in law or in equity, Purchaser may deduct from the price of Goods any penalties, fines or assessments that U.S. Customs and Border Protection imposes on Purchaser for late or inaccurate or incomplete ISF filings caused by Seller non- compliance. Additional deductions may be taken for late deliveries, demurrage or expenses incurred due to Seller’s failure to comply with ISF requirements
- Anti-Dumping. Seller warrants that all sales made hereunder are or will be made at not less than fair value under the U.S. Anti-Dumping law (19 U.S.C. sec 1673 et. seq.), and Seller will indemnify, defend and hold Purchaser harmless from and against any costs or expenses (including but not limited to any anti-dumping duties which may be imposed) arising out of or about any breach of this warranty.
ARTICLE 22-WORK ON PURCHASER’S OR ITS CUSTOMER’S PREMISES.
Agreement involves operations by Seller on the premises of Purchaser or Purchaser’s customer or access to Purchaser’s systems or its computers, then:
- Seller shall comply with all of Purchaser's safety and security procedures and shall take all necessary precautions to prevent the occurrence of any injury to person or property during the progress of such work in accordance with the “Integral Aerospace Contractor Safety Zero Tolerance Policy.”
- Seller represents and warrants that all of its employees who will perform work under this Agreement on Purchaser’s or its customer’s premises have been tested and are free from illegal drugs. The term “illegal drugs” does not include the use of a controlled substance pursuant to a valid prescription. The prescription medication must not prevent the employee from performing competent and safe work. Notwithstanding the foregoing, in circumstances where Seller does not have the right to conduct routine drug testing:
Seller represents and warrants that it will use reasonable endeavors to ensure that all of its employees who will perform work under this Agreement on Purchaser’s or its customer’s premises are free from illegal drugs. In the event that Seller has reason to suspect that any employee performing work under this Agreement on Purchaser’s or its customer’s premises is using illegal drugs, Seller agrees to take immediate steps to remove such employee from Purchaser’s or its customer’s premises and ensure that the employee does not continue to perform work under this Agreement. The term “illegal drugs” does not include the use of a controlled substance pursuant to a valid prescription. The prescription medication must not prevent the employee from performing competent and safe work.
- As permitted by applicable law, Seller represents and warrants that it will conduct a criminal convictions records investigation of its employees through the use of an approved third-party background check vendor before they are assigned to work on any Order that requires that employee to enter Purchaser’s or its customer’s.
- Seller shall include this provision in any subcontract placed pursuant to this Agreement where the subcontractor will perform work on Purchaser’s or its customer’s premises.
- As permitted by applicable law, Purchaser reserves the right to deny any of Seller’s employees, agents or subcontractors access to its or its customer’s premises and/or systems for any reason in Purchaser's sole discretion.
ARTICLE 23-ENVIRONMENTAL MATTERS.
- Seller covenants that the Goods (1) comply with all laws governing the management, handling, shipping, import, export, notification, registration or authorization of chemical substances such as the Montreal Protocol, the Stockholm Convention on Persistent Organic Pollutants, the US the Toxic Substances Control Act , the European Union's Restrictions on Hazardous Substances and REACH legislation and other comparable chemical regulations (collectively "Chemicals Legislation"); and (2) can be used as contemplated by Purchaser in full compliance with the Chemicals Legislation.
- Unless Purchaser has expressly agreed otherwise in writing, Seller covenants that the Goods do not contain any chemicals that are restricted or otherwise banned under Chemicals Legislation. Seller shall notify Purchaser in writing prior to delivery of any Goods that contain lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls (PBB), polybrominated diphenyl ethers (PBDE), arsenic, asbestos, benzene, polychlorinated biphenyls, carbon tetrachloride, beryllium or radioactive materials. Seller shall notify Purchaser in writing of the presence of any engineered nanoscale material contained in the Goods or used in Seller's operations. Upon request Seller shall provide, subject to reasonable protection of Seller's confidential business information, the chemical composition of the Goods and any other relevant information regarding the Goods, including without limitation, test data and safe use and hazard information.
- Unless specifically defined as a requirement by Purchaser’s engineering drawings or specifications, the use of cadmium plating or nickel cadmium plating is strictly prohibited in the manufacture of Goods. The use of cadmium plating or nickel cadmium plating is strictly prohibited on all tooling, fixtures, and test equipment that is used for manufacturing, assembly, test, or material handling of the Goods unless Seller has notified Purchaser in advance and has obtained its prior written consent to such use.
- If Seller is located outside of the U.S. and is shipping Goods into the U.S., regardless of which party is the importer of record, Seller agrees to comply with the import restrictions contained in section 13 of the Toxic Substance Control Act (TSCA) 15 U.S.C. 2601 et seq., provide the appropriate TSCA Certification required under 19 CFR 12.121, and be responsible for any fines or liabilities resulting from breaches of this provision.
- Seller covenants that it has included requirements substantially similar to the covenants in this Agreement in all sub-contracts it enters into related to the fulfillment of this Agreement.
- When Seller ships Goods to Purchaser, Seller shall provide with the Goods, in the language(s) of the location(s) where the goods are delivered to Purchaser or Purchaser's designee: (1) safe use instructions; (2) hazard communication, safe transport and labelling information; (3) compliance and certification documentation; and (4) for chemical substance and mixtures, safety data sheets (MSDS/SDS). For each such material, identification shall reference the stock or part number of the delivered Goods.
- English Language. Except as the parties may otherwise agree, this Agreement, Orders, data, notices, shipping invoices, correspondence and all other writings shall be in the English language. In the event of any inconsistency between any terms of this Agreement and any translation thereof into another language, the English language meaning shall control.
- Governing Law. All disputes between the Parties shall be governed by the laws of the state of California, notwithstanding its conflict of laws rules. The application of the United Nations Convention on the International Sale of Goods is hereby excluded.
- Waiver. Any failure or delay in the exercise of rights or remedies under this Agreement will not operate to waive or impair such rights or remedies. Any waiver given will not be construed to require future or further waivers.
- Modifications. No waiver, alteration or modification of any of the provisions of this Agreement shall be binding upon either party unless in a subsequent writing signed by the duly authorized representative of the party intended to be bound thereby.
- Severability. If any portion of this Agreement is determined to be contrary to any controlling law, rule or regulation, such portion will be revised or deleted from this Agreement, but the balance of this Agreement will remain in full force and effect.
- Reports. Upon request, Seller shall provide progress reports pertaining to the status of the work being performed under this Agreement. Such reports shall be in a form acceptable to Purchaser.
- Business Continuity Plan. Upon request, Seller shall provide written business continuity plans and/or crisis management protocol, to Purchaser (or a third party identified by Purchaser).
- Financial Records. Upon request, Seller will provide financial records, such as income statements, balance sheets, and cash flow statements, to Purchaser (or a third party identified by Purchaser) to enable Purchaser to evaluate the financial health of Seller. If Seller purchases GE-directed raw material, Seller agrees that the supplier of such raw material may provide Purchaser information regarding Seller’s accounts.
- Labor Disputes. The Seller shall notify Purchaser of all impending or existing labor complaints, troubles, disputes or controversies that may affect Seller’s ability to perform its obligations under this Agreement. Purchaser shall have no liability or bargaining obligations under any collective bargaining agreement between Seller and its employees. Seller agrees to give Purchaser prompt notice of any union organization with respect to its employees.
- Security Interest. If items are bailed to Seller or progress payments made, Seller grants Purchaser a security interest in equipment, machinery, contract rights, inventory, goods, merchandise and raw materials, whether now existing or hereafter arising, and any replacements, improvements, substitutions, attachments, accessories and accessions thereto or thereon provided by Purchaser or purchased by Seller with progress payments or advances made by Purchaser and to be used by Seller in manufacturing products ordered by Purchaser under this Agreement. Seller agrees to execute and deliver all documents requested by Purchaser to protect and maintain Purchaser's security interest.
- Audit Rights. Purchaser shall have the right to audit all pertinent books and records of Seller, and to make reasonable inspections of Seller's facilities to verify compliance with this Agreement. In the event of non- compliance, Purchaser may take appropriate actions, up to and including termination pursuant to Article 5(a).
- Survival. All rights, duties and obligations which by nature should apply beyond the term of the Agreement will remain in force after the complete performance of the Agreement.
APPENDIX I: THE FOLLOWING PROVISIONS ARE APPLICABLE TO ALL U.S. GOVERNMENT SUBCONTRACTS
- If deliveries of Goods including data under this Agreement are to be made directly to the U.S. Government, Seller agrees to prepare and distribute the DOD form 250, “Material Inspection and Receiving Report”, as set forth in part 53 of DFARS. Seller shall include a similar provision in any subcontract issued under this Agreement if the subcontractor will be making deliveries directly to the U.S. Government.
- Seller shall abide by the requirements of 41 CFR 60-1.4, 60-300.5(a) and 60-741.5(a). These regulations prohibit discrimination against qualified individuals based on their status as protected veterans or individuals with disabilities, and prohibit discrimination against all individuals based on their race, color, religion, sex, sexual orientation, gender identity or national origin. Additionally, these regulations prohibit employers from discharging, or otherwise discriminating against, employees or applicants who inquire about, discuss, or disclose their compensation or the compensation of other employees or applicants. Moreover, these regulations require that Seller take affirmative action to employ and advance in employment individuals without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability or veteran status.
- The clauses and articles identified for flow down on the Doing Business with Integral Aerospace website http://www. Integral Aerospace.com//XXX and specified as applicable to an Integral Aerospace customer contract within Integral Aerospace request for proposal or Order are hereby incorporated as if fully set forth herein. Seller is responsible for accessing the site and identifying the version of the clauses and articles applicable as specified within the contract awarded Integral Aerospace. In instances where an identified customer contract has multiple entries on the website, or where there are inconsistencies between the clauses and articles on the website and the actual customer contract, Seller is responsible to act in accordance with the latest revision within the customer contract as of the date of the Order.
- Whenever necessary to make the context of the clauses applicable to this Order, the terms “Government”, “Contracting Officer”, and similar terms shall mean Purchaser, the term “Contractor” and similar terms shall mean Seller, and the term “Contract” shall mean this Order. However, the terms “Government” and “Contracting Officer” do not change (1) when modifying “Property” (e.g. “Government Property”), (2) in the patent clauses incorporated herein, (3) when a right, act, authorization or obligation can only be granted or performed by the Government or Contracting Officer, (4) when title to property is to be transferred directly to the Government, (5) when access to proprietary financial information or other proprietary data is required, except as otherwise provided herein, and (6) where specifically modified herein.
- The information in parentheses below is provided for informational purposes and to assist in determining applicability, and does not relieve any party from their contractual duties when the provision or clause applies pursuant to the requirements of each individual provision or clause. The full text of a clause may be accessed electronically at http://farsite.hill.af.mil/vffar1.htm or http://www.acq.osd.mil/dpap/
FEDERAL ACQUISITION REGULATION (FAR) CLAUSES
GRATUITIES (Applies when the Order exceeds the Simplified Acquisition Threshold (“SAT”))
COVENANT AGAINST CONTINGENT FEES (Applies when the Order exceeds the SAT)
RESTRICTIONS ON SUBCONTRACTOR SALES TO THE GOVERNMENT (Applies when the Order exceeds the SAT)
ANTI-KICKBACK PROCEDURES (Applies when the Order exceeds the SAT; Note: Paragraph (c)(1) is excluded; In paragraph (c)(4) replace “The contracting officer may” with “To the extent the Contracting Officer has made an offset and directed Purchaser to withhold an amount, Purchaser may…”)
PRICE OR FEE ADJUSTMENT FOR ILLEGAL OR IMPROPER ACTIVITY (Applies when the Order exceeds the SAT)
LIMITATION ON PAYMENTS TO INFLUENCE CERTAIN FEDERAL TRANSACTIONS (Applies when the
Order exceeds $150,000)
DISPLAY OF HOTLINE POSTER(S) (Applies when the Order exceeds $5,500,000)
BASIC SAFEGUARDING OF CONTRACTOR INFORMATION SYSTEMS
PROTECTING THE GOVERNMENT’S INTEREST WHEN SUBCONTRACTING WITH CONTRACTORS DEBARRED, SUSPENDED, OR PROPOSED FOR DEBARMENT (Applies when the Order exceeds
DEFENSE PRIORITY AND ALLOCATION REQUIREMENTS (Applies when the Order is rated, see Remark
AUDIT AND RECORDS—NEGOTIATION (Applies when the Order exceeds the SAT)
PRICE REDUCTION FOR DEFECTIVE CERTIFIED COST OR PRICING DATA (Applies when certified cost or pricing data is required)
SUBCONTRACTOR CERTIFIED COST OR PRICING DATA (Applies when certified cost or pricing data is required)
SUBCONTRACTOR CERTIFIED COST OR PRICING DATA – MODIFICATIONS (Applies when certified cost or pricing data is required)
INTEGRITY OF UNIT PRICES (Applies when the Order exceeds the SAT)
PENSION ADJUSTMENTS AND ASSET REVERSIONS (Applies when certified cost or pricing data is required)
REVERSION OR ADJUSTMENT OF PLANS FOR POSTRETIREMENT BENEFITS (PRB) OTHER THAN PENSIONS (Applies when certified cost or pricing data is required)
NOTIFICATION OF OWNERSHIP CHANGES (Applies when certified cost or pricing data is required)
REQUIREMENTS FOR CERTIFIED COST OR PRICING DATA AND DATA OTHER THAN CERTIFIED COST OR PRICING DATA
REQUIREMENTS FOR CERTIFIED COST OR PRICING DATA AND DATA OTHER THAN CERTIFIED COST OR PRICING DATA—MODIFICATIONS
LIMITATIONS ON PASS-THROUGH CHARGES – IDENTIFICATION OF SUBCONTRACT EFFORT (Applies when certified cost or pricing data is required)
LIMITATIONS ON PASS-THROUGH CHARGES (Applies when certified cost or pricing data is required)
UTILIZATION OF SMALL BUSINESS CONCERNS (Applies when the Order exceeds the SAT
SMALL BUSINESS CONTRACTING PLAN (Applies when the Order exceeds $700,000)
CHILD LABOR – COOPERATION WITH AUTHORITIES AND REMEDIES
WALSH-HEALEY PUBLIC CONTRACTS ACT (Applies when the Order exceeds $15,000)
PROHIBITION OF SEGREGATED FACILITIES (Applies when 52.222-26 is applicable)
EQUAL OPPORTUNITY (Applies when the Order exceeds $15,000 unless an exemption applies)
EQUAL OPPORTUNITY FOR VETERANS (Applies when the Order exceeds $100,000)
AFFIRMATIVE ACTION FOR WORKERS WITH DISABILITIES (Applies when the Order exceeds $15,000)
EMPLOYMENT REPORTS ON VETERANS (Applies when the Order exceeds $100,000)
NOTIFICATION OF EMPLOYEE RIGHTS UNDER THE NATIONAL LABOR RELATIONS ACT (Applies when the Order exceeds $10,000)
COMBATTING TRAFFICKING IN PERSONS (Paragraph (h) Compliance Plan, applies to any portion of the contract that: (i) is for supplies, other than commercially available off-the-shelf items, acquired outside the United States, or services to be performed outside the United States; and (ii) has an estimated value that exceeds $500,000. The Seller shall also report the information required in paragraph (d)(1-2) to Purchaser.)
ENCOURAGING CONTRACTOR POLICIES TO BAN TEXT MESSAGING WHILE DRIVING
BUY AMERICAN ACT CERTIFICATE (Applies when 52.225-1 applies)
DUTY-FREE ENTRY (Applies when Goods will be imported into the Customs Territory of the United States)
RESTRICTIONS ON CERTAIN FOREIGN PURCHASES
AUTHORIZATION AND CONSENT (Applies when the Order exceeds the SAT)
NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT INFRINGEMENT (Applies when the
Order exceeds the SAT)
COST ACCOUNTING STANDARDS (Applies when the Order is subject to CAS)
DISCLOSURE AND CONSISTENCY OF COST ACCOUNTING PRACTICES (Applies when the Order is subject to CAS)
PROGRESS PAYMENTS (Applies when the Order provides for progress payments to Seller)
COMPETITION IN SUBCONTRACTING
SUBCONTRACTS FOR COMMERCIAL ITEMS
GOVERNMENT PROPERTY (Note: All Government Property shall be controlled and accounted for in accordance with Purchaser’s Tooling Supplement, Remark E21)
USE AND CHARGES (Note: Seller shall request authorization to use Government Property in support of efforts under a contract number other than the contract number to which it is assigned, by submitting such request in the form prescribed by Purchaser.
COMMERCIAL BILL OF LADING NOTATIONS (Applies when the Order requires shipment to be made directly to the US Government and Seller has been authorized to ship on a Commercial Bill of Lading)
TERMINATION FOR CONVENIENCE (Applies in lieu of the Termination for Convenience clause in the body of this Agreement) (In paragraph (c) change “120 days” to “60 days,” and in paragraph (e) change “90 days” to “45 days”)
TERMINATION FOR DEFAULT (Applies in lieu of the Termination for Default clause in the body of this
Agreement) (In paragraph (a)(2) change “10 days” to “7 days”)
IF AN ORDER IS PLACED UNDER A DEPARTMENT OF DEFENSE (DOD) CONTRACT, THE FOLLOWING DODFAR SUPPLEMENT CLAUSES APPLY IN ADDITION TO (OR IN LIEU OF WHERE NOTED) THE FAR CLAUSES ABOVE:
PROHIBITION ON PERSONS CONVICTED OF FRAUD OR OTHER DEFENSE-CONTRACT-RELATED FELONIES (Applies when the Order exceeds the SAT)
REQUIREMENT TO INFORM EMPLOYEES OF WHISTLEBLOWER RIGHTS
AGENCY OFFICE OF THE INSPECTOR GENERAL (As referenced in FAR 52.203-13)
DISPLAY OF HOTLINE POSTERS (Applies when the Order exceeds $5,500,000 in lieu of FAR 52.203-14)
DISCLOSURE OF INFORMATION
SAFEGUARDING COVERED DEFENSE INFORMATION AND CYBER INCIDENT REPORTING (Applies when the Seller has Covered Defense Information resident on or transiting through Seller’s unclassified information systems. Seller shall also send to Purchaser all required notifications to the U.S. Government) DISCLOSURE OF INFORMATION TO LITIGATION S UPPORT CONTRACTORS
SUBCONTRACTING WITH FIRMS THAT ARE OWNED OR CONTROLLED BY THE GOVERNMENT OF A TERRORIST COUNTRY
SMALL BUSINESS SUBCONTRACTING PLAN (DOD CONTRACTS) (Applies when FAR 52.219-9 applies)
REPRESENTATION REGARDING COMBATTING TRAFFICKING IN PERSONS
BUY AMERICAN – BALANCE OF PAYMENTS PROGRAM CERTIFICATE (Applies in lieu of FAR 52.225-2)
BUY AMERICAN ACT AND BALANCE OF PAYMENTS PROGRAM (Applies in lieu of FAR 52.225-1)
QUALIFYING COUNTRY SOURCES AS SUBCONTRACTORS
RESTRICTION ON ACQUISITION OF CERTAIN ARTICLES CONTAINING SPECIALTY METALS (Applies when the Goods contain specialty metals; Note: Use of exceptions not permitted without advance Seller notification and prior Purchaser approval. Paragraph (d) of this clause is excluded)
DUTY-FREE ENTRY (Applies in lieu of 52.225-8)
RESTRICTION ON ACQUISITION OF HAND OR MEASURING TOOLS (Applies when the Order exceeds the SAT and requires delivery of hand or measuring tools)
TRADE AGREEMENTS (Applies in lieu of FAR 52.225-5)
BUY AMERICAN ACT- FREE TRADE AGREEMENT - BALANCE OF PAYMENTS (Applies when DFARS
252.225-7036 applies and in lieu of FAR 52.225-4)
BUY AMERICAN ACT- FREE TRADE AGREEMENT - BALANCE OF PAYMENTS (Applies in lieu of FAR
UTILIZATION OF INDIAN ORGANIZATIONS, INDIAN-OWNED ECONOMIC ENTERPRISES, AND NATIVE HAWAIIAN SMALL BUSINESS CONCERNS (Applies when the Order exceeds $500,000)