EB-2F, Revision OCT 1996

	NOTE:  Clauses identified as "MANDATORY" are mandatory if invoked in Buyer's prime or higher-tier contract. 1.    CLAUSES INCORPORATED BY REFERENCE OR FULL TEXT     (1)    The terms and conditions of this Purchase Order incorporate one or more clauses by reference, with the same force and effect as if they were given in full text.     (2)    If there is a conflict between, or addition to,  the FAR and DFARS clauses invoked herein and the FAR and DFARS clauses of Buyer's prime contract, Buyer's prime contract FAR and DFARS revisions shall govern.  This paragraph (2) is also applicable to clauses provided herein in full text.  However, any alterations or additions by Electric Boat to the original clause being so superceded, carry forward to the revised clause.     (3)    In the FAR and DFARS clauses incorporated in this order by reference or in full text, unless otherwise stated, the terms "Government" and "Contracting Officer" shall mean "Buyer" (Electric Boat Corporation), the term "contractor" shall mean "Seller," the term "subcontractor" shall mean "Seller's subcontractors", and the term "contract" shall mean this order, when it can be so reasonably interpreted, and it is not obvious that the words refer to Buyer's prime contract or Contractor or Government or Contracting Officer or Seller itself.     (4)    Copies of the FAR and DFARS may be obtained from the Superintendent of Documents, U. S. Government Printing Office, Washington, D. C. 20402. 2.    FAR 52.225-14, INCONSISTENCY BETWEEN ENGLISH VERSION     AND TRANSLATION OF CONTRACT (AUG 1989) (EB-MODIFIED)     In the event of inconsistency between any terms of this Purchase Order and any translation thereof into another language, the English language meaning shall control. 3.    DEFINITIONS     (a)    "Seller," means the addressee of this Purchase Order.     (b)    "Buyer," means Electric Boat Corporation, a wholly-owned subsidiary of General Dynamics Corporation.  Where reference is made to "Buyer" in an active sense, the reference is to an authorized representative of the Materials Management Department of Electric Boat Corporation.     (c)    "Supplies," means the material, articles, services or other items ordered by this Purchase Order, whether specially manufactured or not.     (d)    "Federal," or "Government," means the "United States of America."     (e)    "State," may mean province, department or political subdivision of the Nation in which Seller is performing the work called for by this Order.     (f)    "Contracting Officer," means any person (Government employee or member of the Armed Forces) properly designated as a Contracting Officer by any agency of the Government.     (g)    "Prime Contract," means the contract between Buyer and the Government under which this Purchase Order is entered into.     (h)    "Contract," "Purchase Order," and "Subcontract," used herein are interchangeable, and denote this Purchase Order. 4.    DISCOUNT     The cash discount period shall be calculated from the date an acceptable invoice is received by Buyer, or from the date all the invoiced supplies are received by Buyer, whichever is latest in time.  For the purpose of computing the discount earned, payment shall be considered to have been made on the date Buyer's check was mailed. 5.    FAR 52.212-15, GOVERNMENT DELAY OF WORK (APR 1984)     (EB-MODIFIED)     This clause is applicable to fixed-price Purchase Orders for supplies other than commercial or modified-commercial items if the Buyer's prime contract invokes FAR 52.212-15.     A.    If the performance of Purchase Order all or any part of the work of this Purchase Order is delayed or interrupted (1) by an act of the Buyer's Contracting Officer in the administration of the Prime Contract that is not expressly or impliedly authorized by the Prime Contracts, or (2) by a failure of the Buyer's Contracting Officer to act within the time specified in the Prime Contract or within a reasonable time if not specified, an adjustment (excluding profit) shall be made for any increase in the cost of performance of this Purchase Order caused by the delay or interruption and the Purchase Order shall be modified in writing accordingly.  Adjustment shall also be made in the delivery or performance dates and any other contractual term or condition affected by the delay or interruption.  However, no adjustment shall be made under this clause for any delay or interruption to the extent that performance would have been delayed or interrupted by any other cause, including the fault or negligence of the Seller, or for which an adjustment is provided or excluded under any other term or condition of this Purchase Order.     B.    A claim under this clause shall not be allowed (1) for any costs incurred more than 20 days before the Seller shall have notified the Buyer in writing of the act or failure to act involved, and (2) unless the claim, in an amount stated, is asserted in writing as soon as practicable after the termination of the delay or interruption, but not later than the day of final payment under the Purchase Order. 6.    FAR 52.232-11, EXTRAS     (APR 1984) (EB-MODIFIED)     Except as otherwise provided in this Purchase Order, no payment for extras shall be made unless such extras and the price therefor have been authorized in writing by the Buyer. 7.    FAR 52.243-1, CHANGES - FIXED PRICE (AUG 1987) WITH ALT I     (4/84) & ALT II (4/84) (EB-MODIFIED)     A.    Buyer may at any time, by written order, and without notice to the sureties, if any, make changes within the general scope of this Purchase Order in any one or more of the following:         (1)    Drawings, designs or specifications when the supplies to be furnished are to be specially manufactured for the Buyer in accordance with the drawings, designs, or specifications.         (2)    Method of shipment or packing.         (3)    Inspection standards.         (4)    Place or time of inspection, delivery or acceptance.     B.    If any such change causes an increase or decrease in the cost of, or the time required for the performance of any part of the work under this Purchase Order, whether or not changed by the order, Buyer shall make an equitable adjustment in the Purchase Order price, the delivery schedule, or both, and shall modify the Purchase Order.     C.    Seller must assert its right to an adjustment under this clause within 20 days from the date of receipt of the written order.  However, if Buyer decides that the facts justify it, Buyer may receive and act upon a proposal submitted before final payment of the Purchase Order.     D.    If Seller's proposal includes the cost of property made obsolete or excess by the change, Buyer 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 which may be litigated if negotiations fail.  However, nothing in this clause shall excuse Seller from proceeding with the Purchase Order as changed.     Alternate I.    If the requirement is for services, other than architect-engineer or other professional services, and no supplies are to be furnished, substitute the following paragraph (a) for paragraph (a) of the basic clause:        (a)    The Buyer  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)    Description of services to be performed.             (2)    Time of performance (i.e., hours of the day, days of the week, etc.)             (3)    Place of performance of the services.     Alternate II.    If the requirement is for services (other than architect-engineer services, transportation, or research and development) and supplies are to be furnished, substitute the following paragraph (a) for paragraph (a) of the basic clause:         (a)    The Buyer 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)    Description of services to be performed.             (2)    Time of performance (i.e., hours of the day, days of the week, etc.)             (3)    Place of performance of the services.             (4)    Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured for the Buyer in accordance with the drawings, designs, or specifications.             (5)    Method of shipment or packing of supplies.             (6)    Inspection standards.             (7)    Place or time of inspection, delivery, or acceptance. 8.    FAR 52.244-1, SUBCONTRACTS (FIXED-PRICE CONTRACTS)     (FEB 1995) (EB-MODIFIED) (MANDATORY IN PART)     A.    This clause, (except for Paragraph G.), does not apply to firm-fixed price subcontracts and fixed-price subcontracts with economic price adjustment.  However, it does apply to subcontracts resulting from unpriced modifications to such subcontracts.     B.    "Subcontract," as used in this clause, includes but is not limited to Purchase Orders, and changes and modifications to Purchase Orders.  Seller shall notify Buyer reasonably in advance of entering into any subcontract if Seller does not have an approved purchasing system and if the subcontract;         (1)    is proposed to exceed $100,000; or         (2)    is one of a number of subcontracts with a single subcontractor, under this contract, for the same or related supplies or services, that in the aggregate are expected to exceed $100,000.     C.    The advance notification required by paragraph B. above shall include:         (1)    a description of the supplies or services to be subcontracted;         (2)    identification of the types of subcontract to be used;         (3)    identification of the proposed subcontractor and an explanation of why and how the proposed subcontractor was selected, including the competition obtained;         (4)    the proposed subcontract price and Seller's cost or price analysis;         (5)    the subcontractor's current, complete, and accurate cost or pricing data and Certificate of Current Cost or Pricing Data, if required by other contract provisions;         (6)    the subcontractor's Disclosure Statement or Certificate relating to Cost Accounting Standards when such data are required by other provisions of this Purchase Order; and         (7)    a negotiation memorandum reflecting:             (a)    the principal elements of the subcontract price negotiations;             (b)    the most significant considerations controlling establishment of initial or revised prices;             (c)    the reason cost or pricing data were or were not required;             (d)    the extent, if any, to which Seller did not rely on the subcontractor's cost or pricing data in determining the price objective and in negotiating the final price;             (e)    the extent, if any, to which it was recognized in the negotiation that the subcontractor's cost or pricing data were not accurate, complete, or current; the action taken by Seller and subcontractor; and the effect of any such defective data on the total price negotiated.             (f)    the reasons for any significant difference between the Contractor's price objective and the price negotiated; and             (g)    a complete explanation of the incentive fee or profit plan when incentives are used.  The explanation shall identify each critical performance element, management decisions used to quantify each incentive element, reasons for the incentives, and a summary of all trade-off possibilities considered.     D.    Seller shall obtain Buyer's written consent before placing any subcontract for which advance notification is required under paragraph B. above.  However, Buyer may ratify in writing any such subcontract.  Ratification shall constitute the consent of Buyer.     E.    Even if Seller's purchasing system has been approved, Seller shall obtain Buyer's written consent before placing subcontracts that have been selected for special surveillance and so identified in the Schedule of this Purchase Order.     F.    Unless the consent or approval specifically provides otherwise, neither consent by Buyer to any subcontractor nor approval of Seller's purchasing system shall constitute a determination (1) of the acceptability of any subcontract terms or conditions, (2) of the acceptability of any subcontract price or of any amount paid under any subcontract, or (3) to relieve Seller of any responsibility for performing this contract.     G.    No subcontract placed under this contract shall provide for payment on a cost-plus-a-percentage-of-cost-basis, and any fee payable under cost-reimbursement subcontract shall not exceed the fee limitations in subsection 15.903(d) of the Federal Acquisition Regulation (FAR).     H.    Buyer and/or the Government reserve the right to review Seller's purchasing system as set forth in FAR Subpart 44.3. 9.    FAR 52.245-2, GOVERNMENT PROPERTY (FIXED-PRICE     CONTRACTS) (DEC 1989) (EB-MODIFIED)     A.    Government-Furnished Property         (1)    Buyer shall deliver to the Seller, for use in connection with and under the terms of this Purchase Order, the Government-furnished property described in the Purchase Order or specifications together with any related data and information that the Seller may request and as reasonably required for the intended use of the property (hereinafter referred to as "Government-furnished property").         (2)    The delivery or performance dates for this Purchase Order are based upon the expectation that Government-furnished property suitable for use (except for property furnished "as-is") will be delivered to the Seller at the times stated in the Purchase Order or, if not so stated, in sufficient time to enable the Seller to meet the Purchase Order's delivery or performance dates.         (3)    If Government-furnished property is received by the Seller in a condition not suitable for the intended use, the Seller shall, upon receipt of it, notify the Buyer's Purchasing Representative detailing the facts, and, as directed by the Buyer's Purchasing Representative and at Buyer's expense, either repair, modify, return or otherwise dispose of the property.  After completing the directed action and upon written request of the Seller, Buyer's Purchasing Representative shall make an equitable adjustment as provided in paragraph H. of this clause.         (4)    If Government-furnished property is not delivered to the Seller by the required time, Buyer's Purchasing Representative shall, upon the Seller's timely written request, make a determination of the delay, if any, caused the Seller and shall make an equitable adjustment in accordance with paragraph H. of this clause.     B.    Changes in Government-Furnished Property         (1)    Buyer's Purchasing Representative may, by written notice, (i) decrease the Government-furnished property provided or to be provided under this Purchase Order or (ii) substitute other Government-furnished property for the property to be provided by Buyer or to be acquired by the Seller for the Government under this Purchase Order.  The Seller shall promptly take such action as Buyer may direct regarding the removal, shipment, or disposal of the property covered by such notice.         (2)    Upon the Seller's written request, Buyer's Purchasing Representative shall make an equitable adjustment to the Purchase Order in accordance with paragraph H. of this clause, if Buyer has agreed in the Purchase Order to make the property available for performing this Purchase Order and there is any:             (a)  decrease or substitution in this property pursuant to subparagraph B.(1) above; or             (b)  withdrawal of authority to use this property, if provided under any other Purchase Order 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 Seller, title to which vests in the Government under this paragraph (collectively referred to as "Government property"), are subject to the provisions of this clause.  However, special tooling accountable to this contract is subject to the provisions of the Special Tooling Electric Boat Standard clause and is not subject to the provisions of this clause.  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 and special test equipment acquired by the Seller for the Government under this Purchase Order shall pass to and vest in the Government when its use in performing this Purchase Order commences or when the Government has paid for it, whichever is earlier, whether or not title was previously vested in the Government.         (4)    If this Purchase Order contains a provision directing the Seller to purchase material for which Buyer will reimburse the Seller as a direct item of cost under this Purchase Order:             (a)  title to material purchased from a vendor shall pass to and vest in the Government upon the vendor's delivery of such material; and             (b)  title to all other material shall pass to and vest in the Government upon:                 (i)  issuance of the material for use in Purchase Order performance;                 (ii)  commencement of processing of the material or its use in Purchase Order performance; or                 (iii)  reimbursement of the cost of the material by Buyer, whichever occurs first.     D.    Use of Government Property         The Government property shall be used only for performing this Purchase Order, unless otherwise provided in this Purchase Order or approved by Buyer's Purchasing Representative.     E.    Property Administration         (1)    The Seller shall be responsible and accountable for all Government property provided under this Purchase Order and shall comply with Federal Acquisition Regulation (FAR) Subpart 45.5, as in effect on the date of this Purchase Order.         (2)    The Seller shall establish and maintain a program for the use, maintenance, repair, protection, and preservation of Government property in accordance with sound 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 Purchase Order, Buyer shall replace the items or the Seller shall make such repairs as Buyer directs.  However, if the Seller cannot effect such repairs within the time required, the Seller shall dispose of the property as directed by Buyer's Purchasing Representative.  When any property for which the Government is responsible is replaced or repaired, Buyer's Purchasing Representative shall make an equitable adjustment in accordance with paragraph H. of this clause.         (4)    The Seller represents that the Purchase Order price does not include any amount or repairs or replacement for which the Government is responsible.  Repair or replacement of property for which the Seller is responsible shall be accomplished by the Seller at its own expense.     F.    Access         The Government or Buyer and all their 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 Purchase Order, the Seller assumes the risk of, and shall be responsible for, any loss or destruction of, or damage to Government property upon its delivery to the Seller or upon passage of title to the Government under paragraph C. of this clause.  However, the Seller is not responsible for reasonable wear and tear to Government property or for Government property properly consumed in performing this subcontract.     H.    Equitable Adjustment         When this clause specifies an equitable adjustment, it shall be made to any affected Purchase Order provision in accordance with the procedures of the Changes clause.  When appropriate, Buyer's Purchasing Representative may initiate an equitable adjustment in favor of Buyer.  The right to an equitable adjustment shall be the Seller's exclusive remedy.  Neither the Government nor the Buyer shall 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 Buyer is responsible.     I.    Final Accounting and Disposition of Government Property         Upon completing this Purchase Order, or at such earlier dates as may be fixed by Buyer's Purchasing Representative, the Seller shall submit, in a form acceptable to Buyer's Purchasing Representative, inventory schedules covering all items of Government property (including any resulting scrap) not consumed in performing this Purchase Order or delivered to Buyer.  The Seller shall prepare for shipment, deliver f.o.b. origin, or dispose of the Government property as may be directed or authorized by Buyer's Purchasing Representative.  The net proceeds of any such disposal shall be credited to the Purchase Order price or shall be paid to Buyer as Buyer's Purchasing Representative directs.     J.    Abandonment and Restoration of Seller Premises         Unless otherwise provided herein, the Government or Buyer:         (1)    may abandon any Government property in place, at which time all obligations of the  Government or Buyer regarding such abandoned property shall cease; and         (2)    has no obligation to restore or rehabilitate the Seller's premises under any circumstances (e.g., abandonment, disposition upon completion of need, or upon Purchase Order completion).  However, if the Government-furnished property (listed in the Purchase Order 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 clause may properly include restoration or rehabilitation costs.     K.    Communications         All communications under this clause shall be in writing.     L.    Overseas Orders         If this Purchase Order 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 clause) shall be construed as "United States Government" and "United States Government-furnished," respectively. 10.    FAR 52.246-2, INSPECTION OF SUPPLIES - FIXED PRICE     (JUL 1985) (EB-MODIFIED)     A.    Definition.  "Supplies," as used in this clause, includes but is not limited to raw materials, components, intermediate assemblies, end products, and lots of supplies.     B.    The Seller shall provide and maintain an inspection system acceptable to the Buyer and the Government covering supplies under this Purchase Order and shall tender to the Buyer for acceptance only supplies that have been inspected in accordance with the inspection system and have been found by the Seller to be in conformity with Purchase Order requirements.  As part of the system, the Seller shall prepare records evidencing all inspections made under the system and the outcome.  These records shall be kept complete and made available to the Buyer and/or the Government during Purchase Order performance and for as long afterwards as the Purchase Order requires.  The Buyer or 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 Purchase Order work.  The right of review, whether exercised or not, does not relieve the Seller of the obligations under the Purchase Order.     C.    Buyer and/or the Government has the right to inspect and test all supplies called for by the Purchase Order, to the extent practicable, at all places and times, including the period of manufacture, and in any event before acceptance.  Buyer and/or the Government shall perform inspections and tests in a manner that will not unduly delay the work.  Buyer assumes no contractual obligation to perform any inspection and test for the benefit of the Seller unless specifically set forth elsewhere in this Purchase Order.     D.    If the Buyer or the Government performs inspection or test on the premises of the Seller or a subcontractor, the Seller 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.  Except as otherwise provided in the Purchase Order, Buyer and/or the Government shall bear the expense of inspections or tests made by either of them at other than the Seller's or subcontractor's premises; provided, that in case of rejection, Buyer and/or 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 Buyer or the Government for inspection or test, Buyer may charge to the Seller the additional cost of inspection or test.         (2)    Buyer may also charge the Seller for any additional cost of inspection or test when prior rejection makes reinspection or retest necessary.     F.    Buyer 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 Purchase Order requirements.  Buyer may reject nonconforming supplies with or without disposition instructions.     G.    Seller shall remove supplies rejected or required to be corrected.  However, Buyer may require or permit correction in place, promptly after notice, by and at the expense of Seller.  Seller 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 Seller fails to promptly remove, replace, or correct rejected supplies that are required to be removed or to be replaced or corrected, Buyer may either (1) by contract or otherwise, remove, replace, or correct the supplies and charge the cost to Seller or (2) terminate the Purchase Order for default.  Unless Seller corrects or replaces the supplies within the delivery schedule, Buyer may require their delivery and make an equitable price reduction.     I.    (1)    If this Purchase Order provides for the performance of Buyer or Government quality assurance at source, and if requested by Buyer or Government, Seller shall furnish advance notification of the time (i) when Seller inspection or tests will be performed in accordance with the terms and conditions of the Purchase Order and (ii) when the supplies will be ready for Buyer and/or Government inspection.         (2)    The Buyer and/or Government's request shall specify the period and method of the advance notification and Buyer or Government representative to whom it shall be furnished.  Requests shall not require more than 2 workdays of advance notification if the Buyer or Government representative is in residence in the Seller's plant, nor more than 7 workdays in other instances.     J.    Buyer shall accept or reject supplies as promptly as practicable after delivery unless otherwise provided in the Purchase Order.  The Buyer's failure to inspect and accept or reject the supplies shall not relieve Seller from responsibility, nor impose liability on Buyer, for nonconforming supplies.     K.    Inspections and tests by the Buyer and/or Government do not relieve the Seller of responsibility for defects or other failures to meet Purchase Order requirements discovered before acceptance.  Acceptance shall be conclusive, except for latent defects, fraud, gross mistakes amounting to fraud, or as otherwise provided in the contract.     L.    If acceptance is not conclusive for any of the reasons in paragraph K. hereof, Buyer, in addition to any other rights and remedies provided by law, or under other provisions of this Purchase Order, shall have the right to require Seller (1) at no increase in Purchase Order price, to correct or replace the defective or nonconforming supplies at the original point of delivery or at Seller's plant at Buyer's election, and in accordance with a reasonable delivery schedule as may be agreed upon between Seller and Buyer; provided, that Buyer may require a reduction in Purchase Order price if the Seller fails to meet such delivery schedule, or (2) within a reasonable time after receipt by the Seller of notice of defects or nonconformance, to repay such portion of the Purchase Order price as is equitable under the circumstances if Buyer elects not to require correction or replacement.  When supplies are returned to Seller, Seller shall bear the transportation cost from the original point of delivery to Seller's plant and return to the original point when that point is not the Seller's plant.  If Seller 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 Buyer may authorize in writing) after receipt of notice from Buyer specifying such failure, Buyer shall have the right by contract or otherwise to replace or correct such supplies and charge to Seller the cost occasioned Buyer thereby. 11.    FAR 52.246-4, INSPECTION OF SERVICES - FIXED PRICE      (FEB 1992) (EB-MODIFIED)     (a)    Definitions.  "Services," as used in this clause, includes services performed, workmanship, and material furnished or utilized in the performance of services.     (b)    The Seller shall provide and maintain an inspection system acceptable to the Buyer covering the services under this Purchase Order.  Complete records of all inspection work performed by the Seller shall be maintained and made available to the Buyer and/or the Government during Purchase Order performance and for as long afterwards as the Purchase Order requires.     (c)    The Buyer and/or the Government have the right to inspect and test all services called for by the Purchase Order, to the extent practicable at all times and places during the term of the Purchase Order.  The Buyer and/or the Government shall perform inspections and tests in a manner that will not unduly delay the work.     (d)    If the Buyer or the Government performs inspections or tests on the premises of the Seller or a subcontractor, the Seller 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.     (e)    If any of the services do not conform with Purchase Order requirements, the Buyer may require the Seller to perform the services again in conformity with Purchase Order requirements, at no increase in Purchase Order amount.  When the defects in services cannot be corrected by reperformance, the Buyer may (1) require the Seller to take necessary action to ensure that future performance conforms to Purchase Order requirements and (2) reduce the Purchase Order price to reflect the reduced value of the services performed.     (f)    If the Seller fails to promptly perform the services again or to take the necessary action to ensure future performance in conformity with contract requirements, Buyer may (1) by subcontract or otherwise, perform the services and charge to the Seller any cost incurred by the Buyer that is directly related to the performance of such service or (2) terminate the Purchase Order for default. 12.    FAR 52.246-17, WARRANTY (APR 1984) (EB-MODIFIED)     A.    Definitions.         (1)    "Acceptance," as used in this clause, means the act of an authorized representative of Buyer by which Buyer assumes for itself, or as an agent of another, ownership of existing supplies, or approves specific services as partial or complete performance of the Purchase Order.         (2)    "Correction," as used in this clause, means the elimination of a defect.         (3)    "Supplies," as used in this clause, means the end item furnished by Seller and related services required under the Purchase Order.  The word does not include "data."     B.    Seller's Obligations.         (1)    Notwithstanding inspection and acceptance by Buyer of supplies furnished under this Purchase Order, or any condition of this contract concerning the conclusiveness thereof, Seller warrants that for a period of twelve (12) months after delivery thereof or until final acceptance by the Government of the work under the Prime Contract, whichever is later:             (a)    all supplies furnished under this Purchase Order will be free from defects in material or workmanship and will conform with all requirements of this Purchase Order; and             (b)    the supplies furnished hereunder, if of Seller's design, shall meet all of the performance requirements of this Order and be suitable for the purpose intended; and             (c)    the preservation, packaging, packing, and marking, and the preparation for, and method of, shipment of such supplies will conform with the requirements of this Purchase Order.         (2)    When return, correction, or replacement is required, transportation charges and responsibility for the supplies while in transit shall be borne by Seller.  However, Seller's liability for the transportation charges shall not exceed an amount equal to the cost of transportation by the usual commercial method of shipment between the place of delivery specified in this Purchase Order and Seller's plant, and return.         (3)    Any supplies or parts thereof, corrected or furnished in replacement under this clause, shall also be subject to the terms of this clause to the same extent as supplies initially delivered.  The warranty, with respect to supplies or parts thereof, shall be equal in duration to that in paragraph B.(1) of this clause and shall run from the date of delivery of the corrected or replaced supplies.         (4)    All implied warranties of merchantability and "fitness for a particular purpose" are excluded from any obligation contained in this Purchase Order.     C.    Remedies Available to Buyer.         (1)    Buyer shall give written notice to Seller of any breach of warranties in paragraph B.(1) of this clause within 30 days after discovery of the defect.         (2)    Within a reasonable time after the notice, Buyer may either:             (a)    require, by written notice, the prompt correction or replacement of any supplies or parts thereof (including preservation, packaging, packing, and marking) that do not conform with the requirements of this Purchase Order within the meaning of paragraph B.(1) of this clause; or             (b)    retain such supplies and reduce the Purchase Order price by an amount equitable under the circumstances.         (3)    (a)    If the Purchase Order provides for inspection of supplies by sampling procedures, conformance of suppliers or components subject to warranty action shall be determined by the applicable sampling procedures in the Purchase Order.  Buyer:                 (i)    may, for sampling purposes, group any supplies delivered under this Purchase Order;                 (ii)    shall require the size of the sample to be that required by sampling procedures specified in the Purchase Order for the quantity of supplies on which warranty action is proposed;                 (iii)    may project warranty sampling results over supplies in the same shipment or other supplies contained in other shipments even though all of such supplies are not present at the point of reinspection; provided, that the supplies remaining are reasonably representative of the quantity on which warranty action is proposed; and                 (iv)    need not use the same lot size as on original inspection or reconstitute the original inspection lots.             (b)    Within a reasonable time after notice of any breach of the warranties specified in paragraph B.(1) of this clause, Buyer may exercise one or more of the following options:                 (i)    require an equitable adjustment in the Purchase Order price for any group of supplies;                 (ii)    screen the supplies grouped for warranty action under this clause at Seller's expense and return all nonconforming supplies to Seller for correction or replacement;                 (iii)    require Seller to screen the supplies at locations designated by Buyer within the Continental United States and to correct or replace all nonconforming supplies; and                 (iv)    return the supplies grouped for warranty action under this clause to Seller (irrespective of the f.o.b. point or the point of acceptance) for screening and correction or replacement.         (4)    (a)    Buyer may, by contract or otherwise, correct or replace the nonconforming supplies with similar supplies from another source and charge to Seller the cost occasioned to Buyer thereby if Seller:                 (i)    fails to make redelivery of the corrected or replaced supplies within the time established for their return; or                 (ii)    fails either to accept return of the nonconforming supplies or fails to make progress after their return to correct or replace them so as to endanger performance of the delivery schedule, and in either of these circumstances does not cure such failure within a period of 10 days (or such longer period as Buyer may authorize in writing) after receipt of notice from Buyer specifying such failure.             (b)    Instead of correction or replacement by Buyer, Buyer may require an equitable adjustment of the Purchase Order price.  In addition, if Seller fails to furnish timely disposition instructions, Buyer may dispose of the nonconforming supplies for Seller's account in a reasonable manner.  Buyer is entitled to reimbursement from Seller, or from the proceeds of such disposal, for the reasonable expenses of the care and disposition of the nonconforming supplies, as well as for excess costs incurred or to be incurred.         (5)    The rights and remedies of Buyer provided in this clause are in addition to and do not limit any rights afforded to Buyer by any other clause of this Purchase Order. 13.    FAR 52.246-20, WARRANTY OF SERVICES (APR 1984)     (EB-MODIFIED)     (a)    Definitions.  "Acceptance," as used in this clause, means the act of an authorized representative of the Buyer by which the Buyer assumes for itself, or as an agent of another, ownership of existing and identified supplies, or approves specific services, as partial or complete performance of the Purchase Order.         "Correction," as used in this clause, means the elimination of a defect.     (b)    Notwithstanding inspection and acceptance by the Buyer or any provision concerning the conclusiveness thereof, the Seller warrants that all services performed under this Purchase Order will, at the time of acceptance, be free from defects in workmanship and conform  to the requirements of this Purchase Order. The Buyer shall give written notice of any defect or nonconformance to the Seller within 30 days after discovery of the defect or nonconformance.  This notice shall state either (1) that the Seller shall correct or reperform any defective or nonconforming services, or (2) that the Buyer does not require correction or reperformance.     (c)    If the Seller is required to correct or reperform, it shall be at no cost to the Buyer, and any services corrected or reperformed by the Seller shall be subject to this clause to the same extent as work initially performed.  If the Seller fails or refuses to correct or reperform, the Buyer may, by Purchase Order or subcontract or otherwise, correct or replace with similar services and charge to the Seller the cost occasioned to the Buyer thereby, or make an equitable adjustment in the Purchase Order price.     (d)    If the Buyer does not require correction or reperformance, the Buyer shall make an equitable adjustment in the Purchase Order price. 14.    FAR 52.249-1, TERMINATION FOR CONVENIENCE (FIXED PRICE)     (SHORT FORM) (APR 1984) (EB-MODIFIED)     (For Purchase Orders $100,000 or less)     Buyer, by written notice, may terminate this Purchase Order, in whole or in part, when it is in Buyer's or the Government's interest.  If this Purchase Order is terminated, the rights, duties, and obligations of the parties, including compensation to the Seller, shall be in accordance with Part 49 of the Federal Acquisition Regulation in effect on the date of this Purchase Order. 15.    FAR 52.249-2, TERMINATION FOR CONVENIENCE (FIXED-PRICE)     (APR 1984) (EB-MODIFIED)     (Applies if this order exceeds $100,000.)     A.    Buyer may terminate performance of work under this Purchase Order in whole or, from time to time, in part if Buyer determines that a termination is in Buyer's or the Government's interest.  Buyer's Purchasing Representative shall terminate by delivering to the Seller a Notice of Termination specifying the extent of termination and the effective date.     B.    After receipt of a Notice of Termination, and except as directed by Buyer's Purchasing Representative, the Seller shall immediately proceed with the following obligations, regardless of any delay in determining or adjusting any amounts due under this clause:         (1)    Stop work as specified in this notice.         (2)    Place no further subcontracts or Orders (referred to as subcontracts in this clause) for materials, services, or facilities, except as necessary to complete the continued portion of the Purchase Order.         (3)    Terminate all subcontracts to the extent they relate to the work terminated.         (4)    Assign to the Government, as directed by Buyer's Purchasing Representative, all right, title, and interest of the Seller under the subcontracts terminated, in which case Buyer shall have the right to settle or to pay any termination settlement proposal arising out of those terminations.         (5)    With approval or ratification to the extent required by Buyer's Purchasing Representative, settle all outstanding liabilities and termination settlement proposals arising from the termination of subcontracts; the approval or ratification will be final for purposes of this clause.         (6)    As directed by Buyer's Purchasing Representative, transfer title and deliver to Buyer (i) the fabricated or unfabricated parts, work in process, completed work, supplies, and other material produced or acquired for the work terminated and (ii) the completed or partially completed plans, drawings, information, and other property that, if the Purchase Order had been completed, would be required to be furnished to Buyer.         (7)    Complete performance of the work not terminated.         (8)    Take any action that may be necessary, or that Buyer's Purchasing Representative may direct, for the protection and preservation of the property related to this Purchase Order that is in the possession of the Seller and in which Buyer has or may acquire an interest.         (9)    Use its best efforts to sell, as directed or authorized by Buyer's Purchasing Representative, any property of the types referred to in subparagraph (6) above; provided, however, that the Seller (i) is not required to extend credit to any purchaser and (ii) may acquire the property under the conditions prescribed by, and at prices approved by, Buyer's Purchasing Representative.  The proceeds of any transfer or disposition will be applied to reduce any payments to be made by Buyer under this Purchase Order, credited to the price or cost of the work, or paid in any other manner directed by Buyer's Purchasing Representative.     C.    After expiration of the plant clearance period as defined in Subpart 45.6 of the Federal Acquisition Regulation, the Seller may submit to Buyer's Purchasing Representative a list, certified as to quantity and quality, of termination inventory not previously disposed of, excluding items authorized for disposition by Buyer's Purchasing Representative.  The Seller may request Buyer to remove those items or enter into an agreement for their storage.  Within 15 days, Buyer will accept title to those items and remove them or enter into a storage agreement.  Buyer's Purchasing Representative may verify the list upon removal of the items, or if stored, within 45 days from submission of the list, and shall correct the list, as necessary, before final settlement.     D.    After termination, the Seller shall submit a final termination settlement proposal to Buyer's Purchasing Representative in the form and with the certification prescribed by Buyer's Purchasing Representative.  The Seller shall submit the proposal promptly, but no later than six (6) months from the effective date of termination, unless extended in writing by Buyer's Purchasing Representative upon written request of the Seller within this six (6) month period.  However, if Buyer's Purchasing Representative determines that the facts justify it, a termination settlement proposal may be received and acted on after six (6) months or any extension.  If the Seller fails to submit the proposal within the time allowed, Buyer's Purchasing Representative may determine, on the basis of information available, the amount, if any, due the Seller because of the termination and shall pay the amount determined.     E.    Subject to paragraph D. above, the Seller and Buyer's Purchasing Representative may agree upon the whole or any part of the amount to be paid because of the termination.  The amount may include a reasonable allowance for profit on work done.  However, the agreed amount, whether under this paragraph E. or paragraph F. below, exclusive of costs shown in subparagraph F.(3) below, may not exceed the total Purchase Order price as reduced by (1) the amount of payments previously made and (2) the Purchase Order price of work not terminated.  The Purchase Order shall be amended, and the Seller paid the agreed amount.  Paragraph F. below shall not limit, restrict, or affect the amount that may be agreed upon to be paid under this paragraph.     F.    If the Seller and Buyer's Purchasing Representative fail to agree on the whole amount to be paid because of the termination of work, Buyer's Purchasing Representative shall pay the Seller the amounts determined by Buyer's Purchasing Representative as follows, but without duplication of any amounts agreed on under paragraph E. above:         (1)    The Purchase Order price for completed supplies for services accepted by Buyer (or sold or acquired under subparagraph B.(9) above) not previously paid for, adjusted for any saving of freight and other charges.         (2)    The total of:             (a)    The costs incurred in the performance of the work terminated, including initial costs and preparatory expense allocable thereto, but excluding any costs attributable to supplies or services paid or to be paid under subparagraph F.(1) above;             (b)    The cost of settling and paying termination settlement proposals under terminated subcontracts that are properly chargeable to the terminated portion of the Purchase Order if not included in subdivision (a) above; and             (c)    A sum, as profit on subdivision (a) above, determined by Buyer's Purchasing Representative under 49.202 of the Federal Acquisition Regulation, in effect on the date of this Purchase Order, to be fair and reasonable; however, if it appears that the Seller would have sustained a loss on the entire Purchase Order had it been completed, Buyer's Purchasing Representative shall allow no profit under this subdivision (c) and shall reduce the settlement to reflect the indicated rate of loss.         (3)    The reasonable costs of settlement of the work terminated, including:             (a)    Accounting, legal, clerical, and other expenses reasonably necessary for the preparation of termination settlement proposals and supporting data;             (b)    The termination and settlement of subcontracts (excluding the amounts of such settlements); and             (c)    Storage, transportation, and other costs incurred, reasonably necessary for the preservation, protection, or disposition of the termination inventory.     G.    Except for normal spoilage, and except to the extent that Buyer expressly assumed the risk of loss, Buyer's Purchasing Representative shall exclude from the amounts payable to the Seller under paragraph F. above, the fair value, as determined by Buyer's Purchasing Representative, of property that is destroyed, lost, stolen, or damaged so as to become undeliverable to the Government or to a Buyer.     H.    The cost principles and procedures of Part 31 of the Federal Acquisition Regulation, in effect on the date of this Purchase Order, shall govern all costs claimed, agreed to, or determined under this clause.     I.    In arriving at the amount due the Seller under this clause, there shall be deducted:         (1)    all unliquidated advance or other payments to the Seller under the terminated portion of this Purchase Order;         (2)    any claim which Buyer has against the Seller under this Purchase Order; and         (3)    the agreed price for, or the proceeds of sale of, materials, supplies, or other things acquired by the Seller or sold under the provision of this clause and not recovered by or credited to Buyer.     J.    If the termination is partial, the Seller may file a proposal with Buyer's Purchasing Representative for an equitable adjustment of the price(s) of the continued portion of the Purchase Order.  Buyer's Purchasing Representative shall make any equitable adjustment agreed upon.  Any proposal by the Seller for an equitable adjustment under this clause shall be requested within 90 days from the effective date of termination unless extended in writing by Buyer's Purchasing Representative.     K.    Buyer may, under the terms and conditions it prescribes, make partial payments and payments against costs incurred by the Seller for the terminated portion of the Purchase Order, if the Buyer's Purchasing Representative believes the total of these payments will not exceed the amount to which the Seller will be entitled.     L.    (1)    The Buyer may, under the terms and conditions it prescribes, make partial payments and payments against costs incurred by the Seller for the terminated portion of the Purchase Order, if the Buyer believes the total of these payments will not exceed the amount to which the Seller will be entitled.         (2)    If the total payments exceed the amount finally determined to be due, the Seller shall repay the excess to Buyer upon demand, together with interest computed at the rate established by the Secretary of the Treasury under 50 U.S.C. App. 1215(b)(2).  Interest shall be computed for the period from the date the excess payment is received by the Seller to the date the excess is repaid.  Interest shall not be charged on any excess payment due to a reduction in the Seller's termination settlement proposal because of retention or other disposition of termination inventory until 10 days after the date of the retention or disposition, or a later date determined by Buyer's Purchasing Representative because of the circumstances.     M.    Unless otherwise provided in this Purchase Order or by statute, the Seller shall maintain all records and documents relating to the terminated portion of this Purchase Order for 3 years after final settlement.  This includes all books and other evidence bearing on the Seller's cost and expenses under this Purchase Order.  The Seller shall make these records and documents available to the Government and Buyer, at the Seller's office, at all reasonable times, without any direct charge.  If approved by Buyer's Purchasing Representative, photographs, microphotographs, or other authentic reproductions may be maintained instead of original records and documents. 16.    FAR 52.249-8, DEFAULT (FIXED PRICE SUPPLY AND SERVICE)     (APR 1984) (EB-MODIFIED)     A.    (1)    Buyer may, subject to paragraphs C. and D. below, by written notice of default to Seller, terminate this Purchase Order in whole or in part if Seller fails to:             (a)    deliver the supplies or to perform the services within the time specified in this Purchase Order or any extension;             (b)    make progress, so as to endanger performance of this Purchase Order (but see subparagraph A.(2) below); or             (c)    perform any of the other provisions of this Purchase Order (but see subparagraph A.(2) below).         (2)    Buyer's right to terminate this Purchase Order under subdivisions (1)(b) and (1)(c) above, may be exercised if Seller does not cure such failure within 10 days (or more if authorized in writing by Buyer's Authorized Representative) after receipt of the notice from Buyer specifying the failure.     B.    If Buyer terminates this Purchase Order in whole or in part, it may acquire, under the terms and in the manner Buyer considers appropriate, supplies or services similar to those terminated, and Seller will be liable to Buyer for any excess costs for those supplies or services.  However, Seller shall continue the work not terminated.     C.    Except for defaults of subcontractors at any tier, Seller shall not be liable for any excess costs if the failure to perform the Purchase order arises from causes beyond the control and without the fault or negligence of Seller.  Examples of such causes include (1) acts of 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.  In each instance the failure to perform must be beyond the control and without the fault or negligence of Seller.     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 Seller and the subcontractor, and without the fault or negligence of either, Seller 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 Seller to meet the required delivery schedule.     E.    If this Purchase Order is terminated for default, Buyer may require the Seller to transfer title and deliver to Buyer, as directed by Buyer, any (1) completed supplies, and (2) partially completed supplies and materials, parts, tools, dies, jigs, fixtures, plans, drawings, information, and contract rights (collectively referred to as "manufacturing materials" in this clause) that Seller has specifically produced or acquired for the terminated portion of this Purchase Order.  Upon direction of Buyer, Seller shall also protect and preserve property in its possession in which Buyer has an interest.     F.    Buyer shall pay the Purchase Order price for completed supplies delivered and accepted.  Seller and Buyer shall agree on the amount of payment for manufacturing materials delivered and accepted and for the protection and preservation of the property.  Buyer may withhold from these amounts any sum Buyer determines to be necessary to protect Buyer against loss because of outstanding liens or claims of former lien holders.     G.    If after termination, it is determined that Seller 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 Buyer.     H.    The rights and remedies of Buyer in this clause are in addition to any other rights and remedies provided by law or under this Purchase Order.
	© Copyright 1998-2001, General Dynamics Electric Boat. All rights reserved. Web Server Questions and Comments: webmaster@gdeb.com General EB Questions and Comments: info@gdeb.com General Supplier Questions and Comments: suppliers@gdeb.com