DOCUMENT NO. THAAD013
6/9/09
Prime Contract MIDD040003, MEADS Design & Development
Full Text Clauses
Article 5 Subcontracts (Applicable to all purchase orders/subcontracts, except for commercial items or commercial services) 5.1 Unless otherwise specified in the Contract, the Contractor shall impose on Subcontractors listed in Annex J the same conditions and requirements as are included in this Contract, unless the object of the subcontracts is a commercial item or service. Should the Contractor in any instance deem it necessary to waive the imposition of same conditions and requirements, he shall report it to the Contracting Authority at least 30 calendar days prior to award of the subcontract, provide rationale and obtain approval prior to award. This approval shall not relieve the Contractor of any assigned responsibility. Contractor and Subcontractors shall comply with national rules and regulations of the Participating Governments with regard to the work performed under this Contract. 5.2 To the maximum extent possible all Sub-Contracts shall be subjected to competitive tendering except in cases where the Contracting Authority agrees otherwise The prior approval of the Contracting Authority shall be required for the following Sub-Contracts and amendments thereto other than those for raw material and components: a) those to be placed in Non-Participating Countries; b) those to be placed in another Participating Country 5.3 On request, the Contractor shall make available to the Contracting Authority copies of subcontracts and supporting documents (e.g. copies of offers made by Subcontractors). 5.4 The Contractor shall remain responsible for performance of the requirements of the Contract notwithstanding any failure to perform by subcontractors except as may be excused by other provisions of this Contract. 5.5 The Contractor shall not enter into any agreement with an actual or prospective Subcontractor, nor otherwise act in any manner, which has or may have the effect of restricting sales by such Subcontractors directly to the Contracting Authority of any items or processes, including computer Software, made or furnished by the Subcontractor under this Contract. Article 6 Quality Assurance (Applicable to all purchase orders/subcontracts)
6.1 The Contractor shall define and maintain an effective Quality Assurance System that will provide an adequate and uniform level of quality management for all products and services under the Contract. The quality system implemented shall be to the current ISO 9000 standard and meet all the requirements for certification. 6.2 The Contractor shall implement an appropriate management approach requiring all first level Subcontractors identified in Annex Q (excluding LMOC, GLVS, and euroMEADS) to be certified and to provide quality assurance for all the products and services to their relevant Quality Standards (such as ISO, AQAP, MIL-STD, Commercial, etc.). 6.3 The Quality Assurance responsibility of all the first level Subcontractors shall extend to assuring proper quality standards at the lower levels Subcontractors.
DOCUMENT NO. THAAD013
DOCUMENT NO. THAAD013
6/9/09
6.4 At the request of the Contracting Authority, the Participating Governments will furnish the Government Quality Assurance Service for the work carried on/out under this Contract, in accordance with the provisions of the official mutual technical inspection agreement (STANAG 4107 and 4108) including the confirmation of intermediate technical objective achievement. The Contractor shall allow action of government representatives in accordance with the aforementioned STANAGs. Article 8 8.1 Prices in Subcontracts (Applicable to all purchase orders/subcontracts)
The subcontracts will be drawn up in the currencies of the Participants.
8.2 The subcontract price will be established in accordance with national price regulations and practices relating to government contracts of this kind in those countries where the respective Subcontractor is located. 8.3 To the extent that national price regulations and practices leave pricing to free arrangements between the contracting parties, the Contractor undertakes to include in subcontracts terms which are not less favorable to the Contracting Authority than those contained in this Contract. Article 9 Taxes, Customs, Duties and Similar Dues (Applicable to all purchase orders/subcontracts) 9.1 The Contractor undertakes to make as far as it is cost-effective full use of any legal provisions contained in the national laws concerning the waiving, reduction or reimbursement of taxes, customs and duties to the benefit of the MEADS Program. 9.2 In the event the Contractor cannot be relieved and a waiver cannot be obtained for taxes, customs and duties, set forth below and charged to the Contractor/Subcontractors in accordance with the applicable national laws and regulations, the Contractor may request those costs to become allowable under this Contract in accordance with Article 7.8.c. The Contractor shall keep appropriate records of the taxes, customs and duties set out below: a. Sales Taxes/Value Added Taxes; b. Customs, Duties, and Similar Dues. 9.3 Cost of appeal against any decision of the Tax or Custom Authorities will be reimbursed only if previously agreed upon by amendment to the Contract in accordance with Article 7.8.c. If the appeal has been agreed by amendment to the Contract, the Contracting Authority shall be bound to the outcome of such an appeal. The time to give notice of such an appeal shall be observed. 9.4 Where the Contractor fails by intentional act or gross negligence to meet his obligations under Article 9.1, or where an appeal in accordance with Article 9.3 has become necessary for reasons for which the Contractor is responsible, any financial liability resulting there from will be borne solely by the Contractor. 9.5 The Contractor shall permit the examination by representatives of the national audit agencies/pricing authorities on behalf of the Contracting Authority of any records or documents in relation to taxes, customs and duties to establish whether the obligations imposed in this Article have been complied with. Article 12 Capital Investments (Applicable if you will be making any capital investments under this contract)
DOCUMENT NO. THAAD013
DOCUMENT NO. THAAD013
6/9/09
12.1 Capital Investments are facilities such as machines, equipment and buildings provided by the Contractor and/or his Subcontractors at their own expense, for the purpose of creating additional facilities which are not Special To Type, and which are not replacement of consumed Assets needed to meet the Contracting Authority’s requirements. It is not the intent of the Contracting Authority to approve the construction of buildings and/or manufacturing of plants. 12.2 Capital investments which are approved under this Article are listed in Annex L.
12.3 In case the Contractor requires Capital investments necessary for performance of work under the Contract other than the ones listed in Annex L, he shall initiate a request for Amendment to the Contract to update Annex L. No Capital Investment to be covered under Annex L shall be initiated by the Contractor and/or his Subcontractors before the Contracting Authority has given his approval. If the Contractor wishes to create fixed capital assets (e.g. buildings) he shall advise in his request for approval whether these or similar assets exist in any of the participating countries. 12.4 The costs of capital investments shall be charged proportionately to this Contract in the Contractor’s and/or his Subcontractor’s overhead accounts, in accordance with the depreciation rates generally recognized in accordance with national accounting conventions for government contracts, according to the service life of use. 12.5 In case of termination of the Contract (Article28), the unrecovered depreciation allowances with respect to capital investments included in Annex L shall be reimbursed without profit and interest as a charge to the residual claim, but excluding any allowances/deductions claimable under national tax laws. 12.6 The Contractor shall not be entitled to reimbursement of unrecovered depreciation allowances according to the Article 12.5 above, if: a. The Contractor can use the capital investment to fulfill orders already placed at the date of termination of contract by another customer; or b. The Contractor sells, after prior consent by the Contracting Authority, the capital investment at a price which covers the unrecovered depreciation amount. In the event that the net recovery from such sale is less than the amount of unrecovered depreciation, than he shall be reimbursed by the Contracting Authority the difference between such amounts without profit and interest; 12.7 In the event that the Contractor sells, or makes use of such capital investment for any order other than MEADS, after payment of the unrecovered depreciation he shall reimburse the Contracting Authority proportionately the depreciation proceeds recovered under such sales or orders. 12.8 Ownership to the capital investment, the value of which has been fully reimbursed by the Contracting Authority, shall be transferred by the Contractor to the Contracting Authority at the latter’s request free of any Third Party rights. Article 14 Audits (Applicable to all purchase orders/subcontracts, except those which fall within the exception described in subparagraph 14.1.)
14.1 With the exception of subcontract prices which are determined as the result of genuine competitive tendering and contain the same conditions of this Contract, all other subcontract prices are subject to price investigation
DOCUMENT NO. THAAD013
DOCUMENT NO. THAAD013
6/9/09
14.2 The Contractor shall grant the Contracting Authority the right to ascertain costs and investigate prices through the relevant National Audit Services/National Pricing Authorities. The Contractor shall ensure that proper accounts and records are kept of the cost of the work and of all expenditures or commitments made by the Contractor or authorized representatives in connection therewith and of invoices, receipts and vouchers relating thereto. Such accounts, records, invoices, receipts and vouchers shall at all reasonable times be open to audit and inspection as required by the Contracting Authority utilizing the relevant national organizations in the Contractor’s or Subcontractor’s country. The Contractor shall furnish the national organizations and its authorized representatives with all such information as it may, from time to time, require with reference to such accounts, records, invoices, receipts and vouchers. The Contractor shall not, without the consent of the Contracting Authority, dispose of any such accounts, records, invoices, receipts and vouchers but shall preserve and keep the same available for audit and inspection in accordance with applicable national laws, but at least until Contract close-out. The Contracting Authority's rights set out in this Article shall be included in any subcontract the value of which exceeds the following:
Euro 200,000 US $ 200,000 the equivalent of the above mentioned values in any other currency measured by the Exchange Rate at the time of subcontract signature.
Said rights shall also be included in any subcontract below the stated values. However, such rights will only normally be exercised if a subcontract forms or becomes part of a series of subcontract, the cumulative value of which exceeds the values stated above. 14.3 The Contractor shall comply with the national accounting and pricing laws and regulations of the country where the Contractor/respective Subcontractor is located. Ascertainment of costs, price investigation and pricing shall be carried out in accordance with the National Price Regulations and Practices applicable in the nations of the Participating Governments. In the case of work performed by GE and IT industries the following regulations, inter alia, shall apply as appropriate: -GE Ordinance on Prices for Public Contracts (VOPR 30/53)-Guidelines for the Establishment of price on the basis of Prime Cost (LSP)............ IT Segredifesa Directive “Metodologia per la determinazione dei costi orari aziendali per prestazioni e/o forniture militari”-“Capitolato d'Oneri per la Fornitura e la Riparazione dei Materiali Speciali occorrenti all’ Aeronautica Militare” Ascertainment of costs and price investigation may be undertaken: a. with respect to work performed by GE Industry by Bundesamt fuer Wehrtechnik und Beschaffung, Koblenz; b. with respect to work performed by IT Industry by Ministero della Difesa - DGAT, Roma; c. with respect to work performed by US Industry by the Defense Contract Audit Agency; d. with respect to work performed in countries other than those of the Participating Governments by authorities which the Contracting Authority will name to the Contractor.
In the case of work performed other than in the Participating Nations the Contracting Authority shall have the right to nominate a recognized National Authority to carry out price investigation
DOCUMENT NO. THAAD013
DOCUMENT NO. THAAD013
6/9/09
on his behalf. The Contractor shall require his Subcontractors to provide price breakdown calculations in equivalent detail to that which they customarily provide for similar work for domestic requirements of their own government.
14.4 The right of the National Price Auditing Authority acting on behalf of the Contracting Authority to ascertain costs and investigate prices shall be included in any subcontracts and subcontracts’ amendments. Article 26 Royalty Information (Applicable to all purchase orders/subcontracts)
26.1 The Contractor has provided in Annex R the list of any relevant royalty bearing licenses or agreements with the indication of the related royalties. 26.2 When requested by the Contracting Authority, the Contractor shall furnish a copy of any license agreement disclosed in accordance with Article 26.1 to the extent permitted by the license agreement. 26.3 The Contractor and his first tier subcontractors may not enter into any new royalty bearing licenses or agreements that will result in restrictions to the use of Project Information without the prior written approval of the Contracting Authority.
26.4 No royalties will be paid to the Contractor in respect of Intellectual Property used for the purposes of performing the work under this Contract unless the items are listed in Annex R.
DOCUMENT NO. THAAD013