2.    ENTIRE AGREEMENT
   (a)    This Order, including all documents incorporated by reference, constitutes the entire contract.
    (b)    The parties shall not be bound by any other statements or understandings except as noted in paragraph (c) below.
    (c)    Changes are not binding on Buyer, unless they are in writing and authorized by a representative of Buyer's Materials Management (EB) or Sourcing (NNS) Department.  Refer to the applicable "Changes" clause in Sections II or III.   However, in addition to a Purchase Order Supplement, a properly signed and authorized Vendor Information Request (VIR) has the authority to modify technical/contractual requirements but does not have the authority to authorize any change in the Purchase Order pricing. 
    (d)    Different terms in Seller's acknowledgment shall not bind Buyer despite lack of objection or protest thereof by Buyer.
 

3.    DEFINITIONS
    (a)    "Seller," means the addressee of this Purchase Order as the party with whom this contract is made.
    (b)    "Buyer," means the company placing this order.  Where reference is made to "Buyer" in an active sense, the reference is to an authorized representative of the company placing this order.
    (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," means the province, department or political subdivision of the Nation in which Seller is performing the work called for by this Order.
    (f)    "Contracting Officer," when not changed to Buyer, 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 Electric Boat Corporation and the Government
    (h)    "Prime Subcontract," means the subcontract between Electric Boat Corporation and Newport News Shipbuilding.
    (i)    "Contract," "Purchase Order," and "Subcontract," used herein are interchangeable, and denote this Purchase Order.

4.    ORDER OF PRECEDENCE
   In the event of any inconsistency in this Purchase Order, the inconsistency shall be resolved by giving precedence in the following order:
    (a)    the Purchase Order;
    (b)    Duly authorized Vendor Information Requests (VIRs);
    (c)    the Conditions of Purchase;
    (d)    the Specifications;
    (e)    the Drawings; and
    (f)    the other documents incorporated by reference.
    The plans and specifications are intended to explain each other and anything contained in one shall be deemed to be contained in both.  If any discrepancy, differences or conflict exist between any of the above documents and the plans and specifications or between the plans and specifications; the same shall immediately be brought to the attention of the Buyer, in writing, and Seller shall not proceed except at its own risk.

5.    ACCEPTANCE
    Acceptance of the offer represented by this Purchase Order is expressly limited to the terms hereof, and should be accomplished by signing the acknowledgment copy of this Purchase Order, if requested, and returning same to Buyer. A written acknowledgment from Seller or, in any event, performance or delivery in whole or in part shall constitute acceptance of this Purchase Order.  Different terms in Seller's acknowledgment shall not bind Buyer despite lack of objection or protest thereof by Buyer.

6.    SEVERABILITY
    If any phrase, clause, sentence, or paragraph, or combination of same contravenes the applicable laws of the United States or of any state or jurisdiction, such phrase, clause, sentence, or paragraph, or combination of same shall be inoperative in such jurisdiction and the remainder of the order shall remain binding on the parties hereto.

7.    NON-WAIVER
   No waiver by Buyer of any breach on the part of the Seller of any of its obligations herein contained shall constitute a waiver of any subsequent breach of the same or any other of such obligations, and no payment made hereunder shall be deemed to constitute an acceptance or approval of any defective or unsatisfactory material or workmanship, or a waiver of Buyer's right to reject the same later.
    Buyer's failure to insist on Seller's strict performance of this Order at any time shall not be construed as a waiver by Buyer for performance in the future.

8.    GOVERNING LAW
    This order shall be construed in accordance with and be governed by the federal law of government contracts (as found in appropriate federal statutes, regulations, and decisions by the U. S. Federal Courts and Federal Boards of Contract Appeals) except to the extent such government contract law does not cover an issue in dispute arising hereunder, in which event such issue shall be construed in accordance with and be governed by the laws of the State of New York, U. S. A. without regard to the principles of conflicts of law.

9.    LAWS, REGULATIONS AND PERMITS 
   Seller represents, warrants and certifies by its commencement with work on this Purchase Order that in performance of work hereunder, Seller agrees to comply with all applicable laws, rules, regulations and ordinances of the United States and of any State, territory, and political subdivision in which the work under this Order is performed. 
    Seller shall procure all necessary permits or licenses required for performance of the work hereunder, and the cost of such permits or licenses is deemed to be included in the Order price therein stated.
    Seller shall also require its subcontractors to comply with this requirement.
    Seller agrees to indemnify and hold Buyer harmless to the full extent of any loss, damage, or expense, including attorney's fees, incurred by Buyer resulting from violation by Seller or its lower-tier subcontractors of any federal, state, or local law or regulation.

9.A.    DEBARMENT AND/OR SUSPENSION
   Seller represents and warrants that, as of the time of award of the Purchase Order, neither Seller nor any of its principals is debarred, suspended, or proposed for debarment by the Federal Government.

10.    TAXES
    Seller shall pay all applicable foreign or domestic taxes, assessments or duties assessed against Seller for the materials, supplies, equipment or services covered by this purchase order prior to delivery to Buyer or performance thereof.
    However, Buyer shall be liable as an additional charge for any applicable sales or use tax.  Seller shall, when required by local law, collect and remit the sales tax on Buyer's behalf to the appropriate authority and shall reflect the tax so paid by Seller on its invoice to Buyer.
    Except:  If this order is issued by Newport News Shipbuilding (NNS), any applicable Virginia sales or use tax will be paid by NNS directly to the state under direct payment permit no. 998000-8.
    The purchase order line item identifies those items which are exempt from sales tax.  Upon request, Buyer will provide to Seller an exemption or resale certificate.

11.    RELATIONSHIP OF THE PARTIES
    The relationship of the parties is that of independent contractors.  Each party is and shall continue to be an independent entity.
    Nothing in any contract resulting from this order is intended to create, nor shall be construed to create, a partnership, joint venture, teaming arrangement or teaming agreement, or agency relationship between the parties.  In addition, except as specifically described herein, neither party hereto, nor any of their respective officers, members, or employees shall be deemed to be the agent, employee, or representative of the other party.
    Neither party shall have the implied or express right or authority to assume or to create any obligation on behalf of, or in the name of, the other party through its acts, omissions, or representations.

12.    RESERVED

13.    RESERVED

14.    NAVSEA 5252.227-9112, LOGISTIC SUPPORT REQUIREMENT     (NOV 1996) (MODIFIED)
    (a)    This clause applies whenever the order specifications, by reference to a Military Specification or otherwise, specify repair parts or stock components (hereinafter called "repair parts") for a ship component or item of equipment.
    (b)    With respect to ship components or equipments manufactured other than in the United States or Canada, the Seller agrees that, in addition to any other data required by this Purchase Order, it will furnish under this Purchase Order sufficient data so that the repair parts can be reproduced in the United States or Canada unless the suppliers of the ship components or equipments shall have made arrangements satisfactory to the Seller and approved by the Buyer for the manufacturing of repair parts in the United States or Canada.  For the purpose of this requirement, "sufficient data" shall mean detail drawings and other technical information sufficiently extensive in detail to show design, construction, dimensions, and operation or function, manufacturing methods or processes, treatment or chemical composition of materials, plant layout and tooling.  All data shall be in the English language and according to the United States system of weights and measures, and drawings for components, assemblies, subassemblies and parts protected by US. patents shall contain a prominent notation to that effect fully identifying the patent or patents involved, and bearing the number of this Purchase Order.
    (c)    In order to satisfy the requirements of paragraph (b), above, unless the supplier of the ship components or equipments shall have made arrangements, satisfactory to the Seller and approved by the Buyer, for the manufacture of such repair parts in the United States or Canada, the Seller shall include in all subcontracts for the purchase of ship components or equipments from foreign sources a clause, acceptable to the Contacting Officer, granting to the United States Government for a period of seven (7) years, "Government Purpose License Rights" (GPLR) (as defined in paragraph (a)(12) of the clause of this contract entitled "RIGHTS IN TECHNICAL DATA  - NON-COMMERCIAL ITEMS" (DFARS 252.227-7013) in all technical data necessary to manufacture spare and repair parts for such components or equipments.

15.    NOTICE OF DELAYS AND LABOR DISPUTES
    A.    If the Seller has knowledge that any actual or potential labor dispute is delaying or threatens to delay the timely performance of this Order, the Seller shall immediately give notice, including all relevant information, to Buyer.
    B.    This data shall be informational only.  It is not to be construed as a waiver by Buyer of any delivery schedule or date or of rights or remedies available at law or by this order.

16.    FAR 52.242-13, BANKRUPTCY     (JUL 1995) (MODIFIED)     In the event the Seller enters into proceedings relating to bankruptcy, whether voluntary or involuntary, the Seller agrees to furnish by certified mail, written notification of the bankruptcy to the Buyer responsible for administering the Purchase Order.  This notification shall be furnished within five days of the initiation of the proceedings relating to bankruptcy filing.  This notification shall include the date on which the bankruptcy petition was filed, the identity of the court in which the bankruptcy petition was filed, and a listing of purchase order numbers for all purchase orders and letter contracts against which final payment has not been made.  This obligation remains in effect until final payment under this purchase order.

17.    NOTIFICATION OF OWNERSHIP CHANGES
    (a)    The Seller shall make the following notifications in writing:
        (1)    When the Seller becomes aware that a change in its ownership has occurred, or is certain to occur, which could result in changes in the valuation of its capitalized assets in the accounting records, the Seller shall notify the Buyer within 30 days.
        (2)    The Seller shall also notify the Buyer within 30 days whenever changes to asset valuations or any other cost changes have occurred or are certain to occur as a result of a change in ownership.
    (b)    The Seller shall: (1) maintain current, accurate, and complete inventory records of assets and their costs; (2) provide the Buyer or the government ready access to the records upon request; (3) ensure that all individual and grouped assets, their capitalized values, accumulated depreciation or amortization, and remaining useful lives are identified accurately before and after each of the Seller's ownership changes; and (4) retain and continue to maintain depreciation and amortization schedules based on the asset records maintained before each Seller ownership change.
    (c)    The Seller shall include the substance of this clause in all subcontracts under this contract.

18.    DELIVERY DATE
    (a)    Since time is of the essence hereof, Seller will commence and prosecute the work on this order with due diligence and dispatch and make any deliveries as specified.
    (b)    If this order calls, in whole or in part, for Seller to provide material, supplies or goods to Buyer, the following is applicable to that part.
    Delivery by or on behalf of the Seller is to be made in strict compliance with the delivery schedule contained in this order.  The delivery date as shown in this order is to be construed as the date of arrival at the receiving area of the delivery location specified in this order.
    Seller shall provide notice to Buyer of actual or potential impacts to delivery.
    If Seller fails to make delivery promptly and regularly in accordance with the delivery schedule as required thereunder, Seller agrees that, unless the delay in delivery arises out of causes beyond the control and without the fault or negligence of Seller within the meaning of the clauses hereof entitled "Default" or "Termination...", Buyer may, in addition to other remedies available at law, terminate this order by giving written notice to Seller.
    Unless the delay in delivery arises out of causes beyond the control and without the fault or negligence of Seller within the meaning of the clauses hereof entitled "Default" or "Termination...", if Seller fails to meet its scheduled delivery dates and Buyer elects to call for expedited shipments, seller agrees to make the expedited shipment and to pay the difference between the method of shipping specified in the order and the actual expedited shipping charges incurred.
    Early delivery is acceptable only if authorized by Buyer.
    Seller shall be responsible for any additional charges resulting from deviation from Buyer's routing instructions.
    (c)    If this order calls, in whole or in part, for Seller to provide services and/or other deliverables (such as software, test reports, other reports or documentation, etc.), the following applies to that part.
       Seller agrees to proceed diligently with the performance of services or work under this order and to provide any deliverables required in accordance with schedules specified in this order.
    Unless the delay in delivery arises out of causes beyond the control and without the fault or negligence of Seller within the meaning of the clauses hereof entitled "Default" or "Termination...", if Seller fails to meet the delivery schedules specified in the order, Seller agrees that Buyer may, in addition to other remedies available at law, terminate this order by giving written notice to Seller.

19.    RESERVED

20.    SHIPPING REQUIREMENTS
    In addition to any shipping instructions provided elsewhere in this purchase order, all shipments to Buyer shall be accompanied by a packing list stating as a minimum the number of this Purchase Order, the kind of supplies, Seller's name, shipper and shipping route.  Buyer's count will be conclusive on all shipments not accompanied by packing list.  All items, or their containers, shipped by, or on behalf of Seller, shall be tagged or marked with the number of this Purchase Order. 
    If this Purchase Order involves imported supplies, your attention is directed to the clauses 117 through 150 of these terms and conditions.

20.A.    NEWPORT NEWS STANDARD SHIPPING INSTRUCTIONS
    (This clause applies to NNS Purchase Orders Only.)     SHIPPING.  Unless otherwise provided in the Purchase Order, Seller shall show the NNS Purchase Order and ship material to:  Newport News, Shipbuilding & Dry Dock Company Main Receiving Dock, 39th street & Warwick Blvd., Newport News, VA 23607 Purchase Order No. ____________.  Seller shall clearly mark each shipping package, container label and all shipping documents with the Purchase Order number, the item number, the Newport News Part number, and the release number, if applicable.  For container labels, Seller shall provide the following additional information:  Shipper's name and address; Consignee Name; number of packages; gross and net weight and number of pieces per carton.  When furnished with the shipment, Seller shall enclose all required documents and data in the first box of the shipment and mark, CERTIFICATES AND/OR TEST REPORTS ENCLOSED.

    PROHIBITION OF YELLOW WRAPPINGS OR PROTECTION DEVICES.  SELLER SHALL NOT USE YELLOW WRAPPING MATERIAL OR ATTACHED YELLOW PROTECTION DEVICES SUCH AS CAPS OR PLUGS.

    FREIGHT CHARGES.  When Purchaser will pay freight charges, Seller shall, except for UPS shipments, ship on a freight collect basis.  UPS shipments will be shipped prepaid by Seller.  Purchaser will not accept C.O. D. shipments unless expressly provided for in the Purchase Order.

    DOMESTIC BARGE SHIPMENTS.  Seller shall notify the Traffic Section of Purchaser at 1-800-426-1910 at least 30 calendar days prior to shipment by domestic barge.

    HEAVY MATERIAL.  Seller shall mark DELIVER IN OPEN TRAILER when shipping single articles that exceed 4000 pounds that do not adapt to safe unloading with a standard forklift truck.
    PACKING AND CRATING.  Seller shall, when practicable, ship in small packages or loose pieces for unloading by a standard 4000 pound forklift truck.  Unless otherwise provided in the Purchase Order, Seller's price includes all charges or packing and crating.

    VALUE DECLARATION:  Seller shall not insure for excess value via any mode of transportation.  For shipments at Purchaser's risk in which freight rates are based on released value Seller shall declare the lowest value on the bill of lading.  For shipments at Purchaser's risk via UPS, domestic air freight, air freight forwarder, and Parcel Post, Seller shall insert the notation NVD (no value declared).

    LOSS OR DAMAGES OF GOODS.  Unless otherwise specified in the Purchase Order, risk of loss or damage to the goods furnished by Seller under this Purchase Order shall remain with the Seller until delivery to the Purchaser at the address specified in this Purchase Order.

21.    LIENS
   Seller agrees that all material, supplies, or goods delivered; equipment furnished; and labor performed under this purchase order shall be free of all liens, claims, charges and encumbrances, legal or equitable.  Seller also agrees that it will, upon request by Buyer, furnish the Buyer formal written releases.
    In addition, Seller agrees that if any such lien, claim, charge or encumbrance is not immediately discharged, the Buyer may discharge the same or cause the same to be discharged, at the expense of the Seller, including Buyer's costs and reasonable attorney's fees.

22.    PAYMENT
    When the term "Net_____" (days) or "N/____" days is used on the face of the Order, it shall mean that payments are to be mailed by Buyer within the number of days specified from the date an acceptable invoice is received by Buyer or from the date all the invoiced supplies are received by Buyer, whichever is later.
    Invoices for payment shall be supported by such documents in such form as Buyer may reasonably request and shall bear such certifications as may be required by law, regulations or this Order.      Except as otherwise expressly provided on the face of this Order, all payments are contingent on acceptance of the supplies or services by Buyer.  Unless otherwise agreed by Buyer in writing, Seller shall issue separate invoices for each shipment against this order which shall show the amount of materials shipped.  Buyer's Order number, part number and name of factory shall appear on all invoices, packages, crates or boxes, bills of lading, express receipts, correspondence and other instruments in connection with this Order.  Government Inspection forms, affidavits, etc., shall be mailed to Buyer by Seller on the date of shipment, or in the case of services, upon completion.  Bills of lading, chemical and physical test reports if required, shall be mailed to Buyer by Seller not later than the day after shipment is made, or in the case of services, on the day after completion.  Invoices shall be mailed within ten (10) days after shipment.  All containers, drums, carboys, etc., to be returned, shall be shipped on a no-charge or consignment basis unless otherwise specified in this Order.  Buyer shall pay for only such containers as it does not return within a reasonable time.
    If required by Buyer prior to final payment hereunder, Seller will furnish to Buyer a release discharging Buyer and the Government from any liabilities, obligations and claims arising under this Order.

23.    ASSIGNMENTS, SUBCONTRACT APPROVAL, AND     SUBCONTRACTING
    (a)    The Seller may not assign this purchase order or any or all of its rights or obligations hereunder to any party (including, but not limited to, a subsidiary or other entity affiliated with the Seller) without the prior written consent of the Buyer.
        The Seller shall provide the Buyer with a minimum of 10 (ten) days prior written notice of any such intended assignment.
    (b)    Buyer may assign its rights, including the exercise of any option(s) for the purchase of additional supplies, and delegate its duties under this Order to the Government or any other shipyard or agent designated by the Government at any time, and in the event of acceptance thereof by the Government or its Designee, Seller agrees to look solely to the Government or its Designee for payment.
    (c)    Seller agrees to obtain Buyer's written approval before subcontracting the entire Order.
    (d)    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 type subcontracts shall not exceed the fee limitations in paragraph 15.903(d) of the Federal Acquisition Regulation (FAR).  NOTE:  This FAR reference is to the version of FAR in effect prior to changes made by FAC 97-02 effective 1/1/98.
    (e)    Seller, or its subcontractors, shall obtain Buyer's written consent prior to placing any subcontract which contains air circuit breakers for switchboards.  (Refer also to Clauses 23.C. and 139.)
    (f)    RESTRICTION ON ACQUISITION OF ITEMS OF FACILITIES - Seller may not direct charge the fabrication, purchase, rental, installation, or other acquisition of any item of facilities (as defined in FAR 45.101 and 45.301) to this purchase order unless Seller has obtained Buyer's prior written consent.
    (g)    Seller shall provide advance notification to Buyer of the prospective award of any subcontract under this purchase order which is expected to equal or exceed either $500,000 or 50% of the value of this order.

23.A.   FAR 52.244-6, SUBCONTRACTS FOR COMMERCIAL ITEMS AND     COMMERCIAL COMPONENTS (OCT 1995)
   (a)    Definitions.
        "Commercial item", as used in this clause, has the meaning contained in the clause at 52.202-1, Definitions.
        "Subcontract", as used in this clause, includes a transfer of commercial items between divisions, subsidiaries, or affiliates of the Contractor or subcontractor at any tier.
    (b)    To the maximum extent practicable, the Contractor shall incorporate, and require its subcontractors at all tiers to incorporate, commercial items or nondevelopmental items as components of items to be supplied under this contract.
    (c)    Notwithstanding any other clause of this contract, the Contractor is not required to include any FAR provision or clause, other than those listed below to the extent they are applicable and as may be required to establish the reasonableness of prices under Part 15, in a subcontract at any tier for commercial items or commercial components:
        (1)    52.222-26, Equal Opportunity (E.O. 11246);
        (2)    52.222-35, Affirmative Action for Special Disabled and Vietnam Era Veterans (38 U.S.C. 4212(a));
        (3)    52.222-36, Affirmative Action for Handicapped Workers (29 U.S.C. 793); and
        (4)    52.247-64, Preference for Privately Owner U.S.-Flagged Commercial Vessels (46 U.S.C. 1241) (flowdown not required for subcontracts awarded beginning May 1, 1996).
    (d)    The Contractor shall include the terms of this clause, including this paragraph (d), in subcontracts awarded under this contract.

23.B.   DFARS 252.244-7000, SUBCONTRACTS FOR COMMERCIAL     ITEMS AND COMMERCIAL COMPONENTS (DOD CONTRACTS) 
    (FEB 1997)
   In addition to the clauses listed in paragraph (c) of the Subcontracts for Commercial Items and Commercial Components clause of this contract, the Contractor shall include the terms of the following clause, if applicable, in subcontracts for commercial items or commercial components, awarded at any tier under the contract:
    252.225-7014, Preference for Domestic Specialty Metals, Alternate I (10 U.S.C. 2241 note).

23.C.    SPECIAL AGREEMENT REGARDING SWITCHBOARD     SUBCONTRACTS (NAVSEA) (MODIFIED)
    (a)    The Government has an interest in maintaining a competitive market for switchboards to be used on U.S. Naval vessels.  The requirements of 10. U.S.C. 2507 result in a major component of certain switchboards (i.e. air circuit breakers) being available from a single domestic source who is also a competitor for such switchboards.  Therefore, the Contractor shall evaluate subcontract proposals for such switchboards exclusive of air circuit breaker content or on some other basis that ensures an equitable switchboard competition.
    (b)    Refer also to clause 23, Assignments, Subcontract Approval and Subcontracting.
    (c)    Refer also to clause 139 of these terms and conditions (DFARS 252.225-7029, Preference for United States or Canadian Air Circuit Breakers).

24.    SET-OFF
    Buyer shall be entitled at all times to set off any amounts owing from Seller to Buyer against any amount due or owing to Seller with respect to this Order.

25.    BUYER FURNISHED TOOLING ANDMATERIAL
    If Buyer furnishes or pays for tooling or material Seller agrees:
    (a)    that all dies, tools, jigs, fixtures, designs, drawings, patterns, and any other property or special items, which the Buyer specifically pays for or which are furnished by Buyer without charge, shall be and remain the property of Buyer or the Government; that they shall be subject to removal upon Buyer's instructions; that Seller shall be responsible for all loss or damage thereto, reasonable wear excepted, until they are delivered to Buyer; and that same shall be (a) appropriately segregated, marked as the property of Buyer and in the absence of specific instructions from Buyer to the contrary, numbered with the part made, in order to accurately identify same at all times, (b) kept in good working condition, and (c) used exclusively for the production of goods for Buyer and subjected to no other use except with the written permission of Buyer.
    (b)    that all material furnished by Buyer without charge hereunder shall likewise be and remain the property of Buyer; that Seller shall be responsible for all loss or damage including manufacturing errors thereto, reasonable wear excepted, until such material is delivered to Buyer; and that such material received from Buyer for the performance of this Order shall be properly segregated and marked; and upon completion, cancellation or termination of this Order, all such material, tools, etc., shall be held free of charge for six months by Seller pending instructions from Buyer; and in the absence of such instructions within the six (6) months, Seller shall be entitled after ten (10) days notice in writing to Buyer, to store same at Buyer's expense.
    (c)    Seller shall be entitled to retain all cutting and processing waste such as chips, cuttings, borings, turnings, short ends, circles, trimmings, clippings and remnants.  Seller shall make proper credit allowances for the scrap value of such waste in determining the price of this order.  All spoiled partially manufactured materials, parts, and assemblies including those damaged in handling shall remain as Buyer-furnished material and shall be held by Seller for disposition by Buyer.
    (d)    The cost of transportation of Buyer-furnished material to the location of the Seller shall be paid by Buyer.
    (e)    If Seller is furnished or acquires Government-owned property for use in connection with this order, (1) Seller shall comply with the provisions of FAR Subpart 45.5 and (2) such Government property shall be governed by the applicable Government Property clause in Section II or  Section III of these terms and conditions.

25.A.    DFARS 252.245-7001, REPORTS OF GOVERNMENT PROPERTY     (MAY 1994) (MODIFIED)
    This Purchase Order is a subcontract under a Cost-Reimbursement type U.S. Government prime contract.     -    For fixed-price type purchase orders, this clause is applicable to special tooling and special test equipment.     -    For other than fixed-price type purchase orders, this clause is applicable to all material, tooling, and special test equipment.     (a)    The Seller shall provide an annual report to Buyer--
        (1)    For all DoD property for which the Seller is accountable under this purchase order;
        (2)    Prepared in accordance with the requirements of DD Form 1662, DoD Property in the Custody of Contractors, or approved substitute, including instructions on the reverse side of the form;
    (b)    The Seller is responsible for reporting all Government property accountable to this purchase order, including that at subcontractor and alternate locations.

26.    DISPUTES
    (a)    Disputes arising out of, or relating to, the performance of this purchase order or letter contract shall be resolved at the lowest practicable level.  If a dispute arises, the designated representatives of the Buyer and Seller will attempt to resolve the dispute.  If Buyer's and Seller's representatives cannot resolve the dispute, they will refer the matter in dispute to the appropriate level of their respective managements.  If the Buyer and Seller cannot then resolve the dispute, each party reserves all its rights and remedies available at law.
    (b)    Pending the resolution of any dispute, Seller shall proceed diligently with the performance of this order.

27.    RESERVED

28.    RESERVED

29.    RESERVED

30.    RESERVED

31.    RESERVED

32.    INSURANCE & INDEMNIFICATION - WORK ON BUYER'S OR OTHER'S     PREMISES
    (a)    If Seller's work under the Purchase Order involves operations by Seller on the Buyer's or other parties premises, Seller shall take all necessary precautions and such additional precautions as Buyer may prescribe, to prevent the occurrence of any injury to persons or damage to property during the progress of such work.  In the event any work under the Purchase Order is performed on premises not owned or controlled by Seller, it shall be deemed to be "WORK ON BUYER'S PREMISES" within the meaning of this Article.
    (b)    Seller shall indemnify Buyer against all claims, lawsuits, judgments, settlements,  liability, damage or loss (including expenses and attorney's fees) which may result in any way or arise from any act, or omission on the part of the Seller, its agents, employees, or subcontractors, except to the extent that such liability, damage or loss  is due to the gross or willful negligence of Buyer.
    (c)    Seller shall maintain such General & Automobile Liability, and Workers'  Compensation and Employer's Liability insurance as will protect Buyer, from any claims under any applicable Workers' Compensation and Occupational Disease Act.  The applicable Buyer, Electric Boat Corporation or Newport News Shipbuilding, shall be added as an additional insured on the General and Automobile Liability policies of the Seller.  Such policies should include a severability or cross liability provision.
    (d)    Certified copies of said policies or certificates evidencing such insurance shall be filed with Buyer.  All insurance policies shall be issued by companies authorized to do business under the laws of the State(s) in which such work shall be performed and shall be in form, and limits as follows:

• General Liability - $1,000,000 Each Occurrence.
• Automobile Liability  (Only if automobile is authorized for use on Buyer's  property) -  $1,000,000 Combined  Single Limit.
• Workers' Compensation - Statutory - Endorsed for Employer's Liability in the amount of $500,000 and Federal Longshore (United States Longshore and Harbor Workers' Compensation Act)  coverage if work is to be performed in connection with the construction or repair of a vessel and/or over the water.
• Buyer must be named as an additional insured  on the General Liability and Automobile Liability Policies.  Workers' Compensation policy shall include a waiver of subrogation in favor of the Buyer.
•  Certificates must include a description of Operations or Services to be performed and Expiration Date of Insurance  coverages.
• Buyer must be notified  within 30 days of any policy changes or cancellations.  Notification must be in writing.  Seller shall have a copy of the Certificate signed in blue ink mailed to the attention of the Risk Manager of the applicable Buyer, Electric Boat Corporation or Newport News Shipbuilding, at the respective address as follows:

Risk Manager, Newport News Shipbuilding
        4101 Washington Avenue
        Newport News, VA 23607-2770

        An additional copy of the Certificate shall be sent to the attention of the Buyer's purchasing representative noted on the Purchase Order.
        Certificates should be filed with the Buyer's Risk Manager 10 days prior to the start of work.
        NOTE: Failure to file the required certificate of insurance with Buyer as specified may result in access to Buyer's or other's premises being denied.
    (e)    Seller agrees that it or its agents, employees, or subcontractors will abide by all the current statutory, regulatory or Buyer rules and regulations governing security, safety, and prohibition of alcohol and drugs while on Buyer's premises.  If this is a Newport News Shipbuilding (NNS) purchase order, this includes compliance with NNS' "Safety Sense Handbook for New Employees, Contractors, and Visitors."
    In addition to other available remedies, Buyer (EB or NNS as applicable) may, without notice or an opportunity to cure, terminate this purchase order for violations of this paragraph (e) or Clause 33, or expel from Buyer's property/worksite any Seller employee or subcontractor found violating the provisions of this paragraph (e) or clause 33.  Access by non-U.S. citizen's to Buyer's premises is prohibited unless approved in writing by Buyer.
    (f)    Your attention is directed to clause 33 in these Terms and Conditions entitled "Standards of Conduct for Visitors."

33.    STANDARDS OF CONDUCT FOR VISITORS
   Seller agrees that it, its agents, employees, or subcontractors will abide by the following standards which are subject to periodic revision and shall insure that these standards are provided to the aforementioned prior to any visit to "Buyer's Premises" as identified in the clause entitled "Work on Buyer's Premises."

VISITOR PASSES/BADGES
All visitors are required to possess and plainly display their assigned pass/badge on the upper, front side of their body.  Passes must be returned when exiting the Facility.

The information contained on your Visitor Pass/Badge may NOT be modified or changed except by an authorized representative of the Security Department.

Visitors issued "ESCORT REQUIRED" passes must always be accompanied by their assigned escort.

Visitors issued "NO ESCORT REQUIRED" passes must stay within their assigned work area.

SHIPBOARD ACCESS is NOT authorized unless indicated on the reverse side of the Visitor Pass.  Uncleared visitors must be under continuous escort while onboard.

MATERIAL PASSES
Material passes are required for the removal of hardware or software from the plant.  If this is an EB order, the pass must be signed by an authorized representative of Electric Boat.  NO classified material may be removed without going through Electric Boat's Classified Document Control Center, ext. 32328.

SAFETY EQUIPMENT
Hard hats, safety glasses, hearing protection, and other appropriate safety equipment must be worn in all posted areas.

RADIATION DOSIMETERS
Radiation Dosimeters must be worn when entering posted areas.

ELECTROSTATIC DISCHARGE BRIEFING
Visitors will comply with requirements of the Electrostatic Discharge Briefing, if this briefing is determined to be necessary by the visitor's Hosting Department.

PERSONAL CONDUCT
Violation of the following guidelines while on Buyer's property or onboard ships located on Buyer's property, may result in the revocation of visitor privileges:
1.    Willful damage to, or unauthorized removal of, property belonging to Buyer, Buyer's employee or another visitor.
2.    Disobedience or insubordination to persons in authority or failure to identify yourself upon request.
3.    The possession or use of alcohol or narcotics or entering the plant under the influence of drugs or alcohol.
4.    Possession of firearms, weapons, cameras, or sound recording devices.
5.    Smoking at a time or place not authorized.
6.    Willful violation or disregard of safety, traffic, or parking lot regulations.
7.    Solicitation of employees for donations or membership in organizations, circulation of petitions, sale of tickets or merchandise, etc. without specific approval.
8.    Entering Buyer's property without proper authorization or deliberately permitting another person to use your badge.
9.    Gambling, lotteries, or any other games of chance.
10.    Committing any acts of violence, fighting, or improper or immoral conduct

34.    FAR 52.219-8, UTILIZATION OF SMALL, SMALL DISADVANTAGED AND     WOMEN-OWNED SMALL BUSINESS CONCERNS (OCT 1995)
    (Applies if this Purchase Order is expected to offer further subcontracting opportunities.)
    Incorporated into this order by reference.

35.    FAR 52.219-9, SMALL, SMALL DISADVANTAGED AND WOMEN-OWNED SMALL     BUSINESS SUBCONTRACTING PLAN (AUG 1996) AND ALT II (MAR 1996) (MODIFIED)
   (Applies if this Purchase Order exceeds $500,000.)
    A.    This clause does not apply to small business concerns.
    B.    FAR 52.219-9 is incorporated into this order by reference as it set forth in full.
    C.    The apparent successful offeror, upon request by Buyer, shall submit and negotiate a subcontracting plan, where applicable, which shall be included in and made a part of the resultant order.  The subcontracting plan shall be negotiated within the time specified by Buyer.  Failure to submit and negotiate the subcontracting plan may make the offeror ineligible for award of an order.
    D.    Seller's subcontracting plan shall include the items required in FAR 52.219-9.
    E.    Seller shall submit Standard Form 294, Subcontracting Report for Individual Contracts and Standard Form 295, Summary Subcontract Report, in accordance with instructions provided on the forms.
    F.    The failure of Seller or its lower-tier subcontractor to comply in good faith with (1) the clause of this order entitled "Utilization of Small, Small Disadvantaged and Women-Owned Small Business Concerns" and/or (2) an approved plan required by this clause, shall be a material breach of the order.

    Alternate II (MAR 1996).  Substitute the following  paragraph (c) for paragraph (c) of the basic FAR 52.219-9 clause.
    (c)    Proposals submitted in response to this solicitation shall include a subcontracting plan, which separately addresses subcontracting with small business concerns, small disadvantaged business concerns and women-owned small business concerns.  If the offeror is submitting an individual contract plan, the plan must separately address subcontracting with small business concerns, small disadvantaged business concerns  and women-owned small business concerns with a separate part for the basic contract and separate parts for each option(if any).  The plan shall be included in and made a part of the resultant contract.  The subcontracting plan shall be negotiated within the time specified by the Contracting Officer.  Failure to submit and negotiate a subcontracting plan shall make the offeror ineligible for award of a contract.

36.    DFARS 252.219-7003, SMALL, SMALL DISADVANTAGED AND WOMEN-OWNED SMALL BUSINESS SUBCONTRACTING PLAN (DOD CONTRACTS) (APR 1996))
   (This clause supplements the FAR 52.219-9, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan clause invoked elsewhere in these Terms and Conditions.)
    Incorporated by reference into this order.

37.    FAR 52.219-16, LIQUIDATED DAMAGE SUBCONTRACTING PLAN (OCT 1995)    (MODIFIED TO READ AS FOLLOWS)
   (Applicable if the clause entitled "52.219-9, Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan" is applicable.)
    Seller agrees that the Buyer may withhold or recover from Seller such sums as the Buyer's Contracting Officer withholds or recovers from Buyer because of liabilities of Seller or its subcontractor(s) under this clause.
    Incorporated by reference, less paragraphs (d) and (e).

38.    FAR 52.203-3, GRATUITIES (APR 84)
   Incorporated into this order by reference.

39.    FAR 52.203-5, COVENANT AGAINST CONTINGENT FEES (APR 84) 
    Incorporated into this order by reference.

40.    FAR 52.203-6, RESTRICTIONS ON SUBCONTRACTOR SALES TO THE
    GOVERNMENT (JUL 95) 
    (Applies if this order  exceeds $100,000.)
    Note:  Further flowdown is required per paragraph (c).
    Incorporated into this order by reference.

41.    DFARS 252.203-7001, SPECIAL PROHIBITION ON EMPLOYMENT (NOV 1995)
    (Applicable if this order exceeds the Simplified Acquisition Threshold at FAR 2.101 (Note: $100K as of 9/12/97.)
    Incorporated into this Order, less paragraph (g), by reference.

42.    FAR 52.203-7, ANTI-KICKBACK PROCEDURES (JUL 1995)
    (MODIFIED) 
    (Applies if this order exceeds $100,000, including subparagraph (c)(5) but excepting subparagraph (c)(1).  Further flowdown required.)
    Incorporated into this order, by reference, as modified:
    Seller agrees to indemnify and hold Buyer harmless to the full extent of any loss, damage, or expense, including, but not limited to, any amount withheld from Buyer's prime contract with the Government or subcontract of any tier, resulting from violation by Seller or its lower-tier subcontractors, of the Anti-Kickback Act of 1986 (41 USC 51-58).

42A.   52.203-8, CANCELLATION, RESCISSION, AND RECOVERY OF FUNDS FOR    ILLEGAL OR IMPROPER ACTIVITY (JAN 1997)
   Incorporated into this order by reference.

43.    FAR 52.203-10, PRICE OR FEE     ADJUSTMENTS FOR ILLEGAL OR IMPROPER ACTIVITY (JAN 1997) 
    (MODIFIED)
   Incorporated into this order, by reference, as modified below:
    Seller agrees to indemnify and hold Buyer harmless to the full extent of any loss, damage, or expense (including attorney's fees), resulting from violation by Seller or its lower-tier subcontractors, of subsection 27(a) of the Office of Federal Procurement Policy Act (41 U.S.C. 423), also referred to as the Procurement Integrity Law, as implemented in the Federal Acquisition Regulation (FAR).

43A.    REDUCTION OR SUSPENSION OF CONTRACT PAYMENTS UPON FINDING OF     FRAUD
    (a)    Seller agrees that Buyer may reduce or suspend further advance, partial or progress payments to the Seller upon a written determination that substantial evidence exists that the Seller's request for advance, partial, or progress payments is based on fraud.  This clause is in addition to any other rights or remedies provided to the Buyer by law or under contract.
    (b)    Actions taken by the Buyer in accordance with this clause shall not constitute an excusable delay under the Default clause of this contract or otherwise relieve the Seller its obligations to perform under this purchase order.

44A.    FAR 52.203-11, CERTIFICATION AND DISCLOSURE REGARDING PAYMENTS     TO INFLUENCE CERTAIN FEDERAL TRANSACTIONS (APR 1991) (MODIFIED)
    (Applies if this order exceeds $100,000.)
   (a)    The definitions and prohibitions contained in the clause at FAR 52.203-12, Limitation on Payments to Influence Certain Federal Transactions, included in this solicitation, are hereby incorporated by reference in paragraph (b) of this Certification.
    (b)    The offeror or Seller by signing its offer or accepting this Purchase Order, hereby certifies to the best of his or her knowledge and belief as of December 23, 1989, that:
        (1)    No Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress on his or her behalf in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment or modification of any Federal contract, grant loan, or cooperative agreement;
        (2)    If any funds other than Federal appropriated funds (including profit or fee received under a covered Federal transaction) have been paid, or will be paid, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress on his or her behalf in connection with this solicitation, the offeror shall complete and submit, with its offer, OME standard from LLL, Disclosure of Lobbying activities, to the Buyer; and
        (3)    He or she will include the language of this certification in all subcontract awards at any tier and require that all recipients of subcontract awards in excess of $100,000 shall certify and disclose accordingly.
    (c)    Submission of this certification and disclosure is a prerequisite for making or entering into this Contract imposed by section 1352, title 31, United Stated Code.  Any person who makes an expenditure prohibited under this provision or who fails to file or amend the disclosure form to be filed or amended by this provision, shall be subject to a civil penalty of not less than $10,000, and not more than $100,000, for each such failure.

44B.    52.203-12, LIMITATION ON PAYMENTS TO INFLUENCE CERTAIN FEDERAL     TRANSACTIONS  (JAN 1990)
   (Applies if this order exceeds $100,000.)
    Incorporated into this order by reference.

45.    FAR 52.204-2, SECURITY REQUIREMENTS(AUG 1996)
    (Applies, excluding reference to the Changes clause of this Purchase Order, if this Order requires access to classified information.)
    Incorporated into this order by reference.

46.    RESERVED

47.    RESERVED

48.    RESERVED

49.    FAR 52.211-5, NEW MATERIAL (MAY 1995)
    Incorporated into this order by reference.

50.    FAR 52.211-7, OTHER THAN NEW MATERIAL, RESIDUAL INVENTORY, AND     FORMER GOVERNMENT SURPLUS PROPERTY (MAY 1995)
   Incorporated into this order by reference.

51.    DFARS 252.208-7000, INTENT TO FURNISH PRECIOUS METALS AS     GOVERNMENT-FURNISHED MATERIAL (DEC 1991)
    (This article applies unless this purchase order is for  items which contain no precious metals.)
    Incorporated into this order by reference.

52.    FAR 52.211-15, DEFENSE PRIORITY AND ALLOCATION
     REQUIREMENTS  (SEP 1990)
    This is a rated order certified for national defense use, and the Seller shall follow all the requirements of the Defense Priorities and Allocations System regulation (15 CFR 700).

53.    FAR 52.227-1, AUTHORIZATION AND CONSENT (JUL 1995)
     AND ALT I (APR 1984)
   Incorporated into this order by reference.
    Paragraph (a) of ALT I is substituted for paragraph (a) of the basic clause.

54.    FAR 52.234-1, INDUSTRIAL RESOURCES DEVELOPED UNDER DEFENSE     PRODUCTION ACT TITLE III (DEC 1994) (MODIFIED)
    (a)    Definitions.  "Title III industrial resource" means materials, services, processes, or manufacturing equipment ( including the processes, technologies, and ancillary services for the use of such equipment) established or maintained under the authority of Title III, Defense Production Act (50 U.S.C. App. 2091-2093).
    "Title III project contractor" means a contractor that has received assistance for the development or manufacture of an industrial resource under 50 U.S.C. App. 2091-2093, Defense Production Act.
    (b)    The Seller shall refer any request from a Title III project contractor for testing and qualification of a Title III industrial resource to the Buyer's Contracting Officer via Buyer.
    (c)    Upon the direction of the Buyer's Contacting Officer, the Seller shall test Title III industrial resources for qualification.  The Seller shall provide the test results to the Defense Production Act Office, Title III Program, located at Wright Patterson Air Force Base, Ohio 45433-7739.
    (d)    When the Buyer's Contracting Officer modifies the Buyer's prime contract to direct testing pursuant to this clause, the Government will provide the Title III industrial resource to be tested and will make an equitable adjustment in the prime contract for the costs of testing and qualification of the Title III industrial resource and the Buyer will modify this Purchase Order accordingly.
    (e)    The Seller agrees to insert the substance of this clause, including paragraph (e), in every subcontract issued in performance of this Purchase Order.

55.    RESERVED

56.    RESERVED

57.    FAR 52.248-1, VALUE ENGINEERING (MAR 1989) (MODIFIED)
   (This clause is applicable if this Purchase Order equals or exceeds $100,000 except as modified as follows: This clause does not apply to any work under this Purchase Order in connection with the nuclear propulsion plant, its associated components and systems which are under the technical cognizance of NAVSEA Code 08.)
    Incorporated into this order by reference.

58.    RESERVED

59.    DFARS 252.249-7002, NOTIFICATION OF ANTICIPATED CONTRACT     TERMINATION OR REDUCTION (DEC 1996) (MODIFIED)
    (Applicable if this order equals or exceeds $500,000.  The term "Contracting Officer" as it appears herein shall retain its original meaning.  The term "Contractor" as it appears herein shall mean the Buyer as it pertains to this purchase order.)
    (a)    Definitions
        Major defense program means a program that is carried out to produce or acquire a major system (as defined in 10.U.S.C. 2302(5)) (see also DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition Programs).
    Substantial reduction means a reduction of 25 percent or more in the total dollar value of funds obligated by the contract.
    (b)    Section 1372 of the National Defense Authorization Act for Fiscal Year 1994 (Pub. L. 103-160) and Section 824 of the national Defense Authorization Act for Fiscal Year 1997 (Pub. L. 104-201) are intended to help establish benefit eligibility under the Job Training Partnership Act (29 U.S.C. 1661 and 1662) for employees of DoD contractors and subcontractors adversely affected by contract terminations or substantial reductions under major defense programs.
    (c)    Notice to employees and state and local officials.  Within 2 weeks after the Contracting Officer notifies the Contractor that contract funding will be terminated or substantially reduced, the Contractor shall provide notice of such anticipated termination or reduction to--
        (1)    Each employee representative of the Contractor's employees whose work is directly related to the defense contract; or
        (2)    If there is not such representative, each such employee;
        (3)    The State dislocated worker unit or office described in section 311(b)(2) of the Job Training Partnership Act 929 U.S.C. 1661(b)(2)); and
        (4)    The chief elected official of the unit of general local government within which the adverse effect may occur.
    (d)    Notice to subcontractors.  Not later than 60 days after the Seller receives the Buyer's notice of the anticipated termination or reduction, the Seller shall--
        (1)    Provide notice of the anticipated termination or reduction to each subcontractor with a subcontract of $100,000 or more; and 
        (2)    Require that each such subcontractor--
            (i)        Provide notice to each of its subcontractors with a subcontract of $100,000 or more; and
            (ii)    Impose a similar notice and flowdown requirement to subcontractors with subcontracts of $100,000 or more.
    (e)    The notice provided an employee under paragraph (c) of this clause shall have the same effect as a notice of termination to the employee for the purposes of determining whether such employee is eligible for training, adjustment assistance, and employment services under section 325 or 325A of the Job Training Partnership Act (29 U.S.C. 1662d, 1662d-1).  If the Contractor has specified that the anticipated contract termination or reduction is not likely to result in plant closure or mass layoff, as defined in 29 U.S.C. 2101, the employee shall be eligible only for services under section 314(b) and paragraphs (1) through (14), (16), and (18) of section 314(c) of the Job Training Partnership Act (29 U.S.C. 1661c(b) and paragraphs (1) through (14), (16), and (18) of section 1661c(c).

60.    DFARS 252.211-7000, ACQUISITION STREAMLINING (DEC 1991)
    (Applies if this Purchase Order exceeds $1 million.)     Incorporated into this order by reference.

61.    RESERVED

62.    NATIONAL STOCK NUMBERS, ASSIGNMENT AND USE OF
   To the extent that National Stock Numbers (NSNs) or preliminary NSNs are assigned by the Government for the identification of parts, pieces, items, subassemblies or assemblies to be furnished under this contract, the Seller shall use such NSNs or preliminary NSNs in the preparation of provisioning lists, package labels, packing lists, shipping containers and shipping documents as required by applicable specifications, standards or Data Item Descriptions of the contract or as required by orders for spare and repair parts.
    Upon Seller's request via Buyer, the Buyer's cognizant Government Contract Administration Office shall be responsible for providing the Seller such NSNs or Preliminary NSNs which may be assigned and which are not already in the possession of the Seller.

63.    RELEASE OF INFORMATION
    (a)    In accordance with Government policy, release or publication of any information, data, speeches, advertisements, promotional brochures or technical papers relating to the material ordered is prohibited unless prior authorization for release or publication has been obtained in writing from Buyer, except for release to lower-tier subcontractors or consultants as required for performance of the Purchase Order.  Provisions similar to the forgoing shall be inserted in all lower-tier subcontracts related to this work.
    (b)    Refer also to clauses 63.A., 117, 118, 118.A., and 119 of these terms and conditions.

63.A.    DFARS 252.204-7000, DISCLOSURE OF INFORMATION (DEC 1991) (MODIFIED)     (a)    The Seller shall not release to anyone outside the seller's organization any unclassified information, regardless of medium (e.g., film, tape, document), pertaining to any part of this purchase order or any program related to this contract, unless-
        (1)    The Buyer's Contracting Officer has given prior written approval; or
        (2)    The information is otherwise in the public domain before the date of release.
    (b)    Requests for approval shall identify the specific information to be released, the medium to be used, and the purpose for the release.  The Seller shall submit its request to the Contracting office via Buyer at least 45 days before the proposed date for release.
    (c)    The Seller agrees to include a similar requirement in each subcontract under this purchase order.  Lower-tier subcontractors shall submit requests for authorization to release through the Seller to the Buyer for transmittal to the Contracting Officer.

63.B.    REFUNDS (SPARES AND SUPPORT EQUIPMENT) (NAVSEA) (SEP 1990)     (MODIFIED)
    (This clause applies if the criteria of paragraph (h) below are met.)     (a)(1)    In the event that the price of a spare part or item of support equipment delivered under this contract significantly exceeds its intrinsic value, the Seller agrees to refund the difference.  Refunds will only be made for the difference between the intrinsic value of the item at the time an agreement on price was reached and the contract price.  Refunds will not be made to recoup the amount of cost decreases that occur over time due to productivity gains (beyond economic purchase quantity considerations) or changes in market conditions.
        (2)    The determination regarding intrinsic value will  be made by the Buyer.
    (b)    For purposes of this requirement, the intrinsic value of an item is defined as follows:
            (1)    If the item is one which is sold or is substantially similar or functionally equivalent to one that is sold in substantial quantities to the general public, intrinsic value is the established catalog or market price, plus the value of any unique requirements, including delivery terms, inspection, packaging, or labeling.
            (2)    If there is no comparable item sold in substantial quantities to the general public, intrinsic value is defined as the price an individual would expect to pay for the item based upon an economic purchase quantity as defined in FAR 52.207-4, plus the value of any unique requirements, including delivery terms, inspection, packaging or labeling.
    (c)    At any time up to two years after delivery of a spare part or item of support equipment, the Buyer  may notify the Seller that based on all information available at the time of the notice, the price of the part or item apparently exceeds its intrinsic value.
    (d)    If notified in accordance with paragraph (c) above, the Seller agrees to enter into good faith negotiations with the Buyer to determine if, and in what amount, the Buyer and Government is entitled to a refund.
    (e)    If agreement pursuant to paragraph (d) above cannot be reached and the Navy's return of the new or unused item to the Buyer is practical, the Navy, subject to the contractor's agreement, may elect to return the item to the Buyer.  Upon return of the item to its original point of Government acceptance, the Buyer shall refund in full the price paid.  Buyer will likewise return the item to the Seller and Seller will likewise refund in full the price paid.  If no agreement pursuant to paragraph (d) above is reached, and return of the item by the Navy is impractical, the matter may be handled as a dispute.
    (f)    The Seller will make refunds, as required under this requirement, in accordance with instructions from the Buyer.
    (g)    The Seller shall not be liable for a refund if the Seller advised the Buyer  in a timely manner that the price it would propose for a spare part or item of support equipment exceeded its intrinsic value, and with such advice, specified the estimated proposed price, the estimated intrinsic value and known alternative sources or items, if any, that can meet the requirement. 
    (h)    This requirement does not apply to any spare parts or items of support equipment whose price is determined through adequate price competition.  This requirement also does not apply to any spare part or item of support equipment with unit price in excess of $100,000 or in excess of $25,000 if the Seller submitted, and certified the currency, accuracy and completeness of, cost or pricing data applicable to the item.