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TABLE OF CONTENTS

PART A. SPECIAL TERMS AND CONDITIONS

The following provisions supplement the provisions contained in NASSCO Military Shipbuilding Programs Purchase Order General Terms and Conditions.

1. CHANGES
   1. Seller shall notify Buyer in writing of any conduct of Buyer or the Government that Seller considers to be a constructive change to this Contract within fifteen (15) days from the date Seller first identifies such conduct. Such notification shall include the information required by the prime Contract, Section H, Special Contract requirements, NAVSEA 5252.243-9105, Notification of Changes (FT)—Alternate I (JAN 1983), a copy of which will be provided upon request.
   2. Seller must assert its right to an adjustment within fifteen (15) 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 Contract.

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2. GUARANTEE PERIOD
   1. The "Guarantee Period" as referenced in the Military Shipbuilding Programs Purchase Order General Terms and Conditions shall be twelve (12) months from delivery of the Vessel to the Government. The Guarantee Period shall be extended by the time during which the Vessel is not available for unrestricted service by reason of any Guarantee Defects in the Contract Work for which Buyer shall determine that Seller is responsible.
   2. Seller's guarantee, and Buyer's Guarantee rights against Seller, shall be separately assignable to the Government.

PART B: PRIME CONTRACT CLAUSES

The following clauses are flowed down from Buyer to Seller pursuant to the requirements of Buyer's (National Steel and Shipbuilding Company, aka General Dynamics NASSCO or NASSCO) Prime Contract with the Government. In interpreting the requirements of these clauses, "Contracting Officer" should be considered to be Buyer's Purchasing Representative and "Government" should be considered to be NASSCO. Seller's strict compliance with these flow-downs is material.

Some are included in full text, and others of the FAR and DFARS are hereby incorporated into this Contract by reference as if given in full text, subject to the following definitions, and subject to the particular limitations and modifications indicated. The full text of FAR and DFARS clauses may be accessed electronically at the following internet websites:

https://www.acquisition.gov/far/
http://FARSITE.HILL.AF.MIL/Vfdfar1.htm

1. DEFINITIONS
   The following terms will have the meanings indicated in each of the following clauses as modified:
   1. "Buyer's Purchasing Representative" means the individual set out on the face of the purchase order as "Buyer", or if none, Buyer's Director, Purchasing.
   2. “CLIN” shall mean substitute Contract Work provided by Seller for the CLIN in support of NASSCO’s prime contract with the Government.
   3. "Contract" means this Contract
   4. "Contractor" means Seller.
   5. “Department” means the Department of the Defense.
   6. “Phase I" means the system design process where the design requirements established by the Government and the system specification will be reviewed and developed into a basic ship design with sufficient detail to allow NASSCO to proceed with Phase II. Concept design work and feasibility studies will be conducted to define the MLP hull form, general and machinery arrangements and major systems.
   7. “Phase II” is expected to consist of the detail design and construction.
   8. “Subcontractor” means Seller’s subcontractors.
   9. “Supervisor” means Buyer’s Purchasing Representative.

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2. (NAVSEA SECTION B, CLAUSE 2) REFUNDS (SPARES AND SUPPORT EQUIPMENT) (NAVSEA) (SEP 1990)
   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 Contractor 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. 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.
   3. At any time up to two years after delivery of a spare part or item of support equipment, the Contracting Officer may notify the Contractor that based on all information available at the time of the notice; the price of the part or item apparently exceeds its intrinsic value.
   4. If notified in accordance with paragraph (c) above, the Contractor agrees to enter into good faith negotiations with the Government to determine if, and in what amount, the Government is entitled to a refund.
   5. If agreement pursuant to paragraph (d) above cannot be reached, and the Navy's return of the new or unused item to the Contractor is practical, the Navy, subject to the Contractor's agreement, may elect to return the item to the Contractor. Upon return of the item to its original point of Government acceptance, the Contractor shall 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 Contracting Officer may, with the approval of the Head of the Contracting Activity, issue a Contracting Officer's final decision on the matter, subject to Contractor appeal as provided in the "DISPUTES" clause (FAR 52.233-1).
   6. The Contractor will make refunds, as required under this requirement, in accordance with instructions from the Contracting Officer.
   7. The Contractor shall not be liable for a refund if the Contractor advised the Contracting Officer 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 item, if any, that can meet the requirement.
   8. 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 a unit price in excess of $100,000; or in excess of $25,000 if the Contractor submitted, and certified the currency, accuracy and completeness of, cost or pricing data applicable to the item.

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3. (NAVSEA SECTION C CLAUSE 2) ACCESS TO PROPRIETARY DATA OR COMPUTER SOFTWARE (NAVSEA) (JUNE 1994)
   1. Performance under this contract may require that the Contractor have access to technical data, computer software, or other sensitive data of another party who asserts that such data or software is proprietary. If access to such data or software is required or to be provided, the Contractor shall enter into a written agreement with such party prior to gaining access to such data or software. The agreement shall address, at a minimum, (1) access to, and use of, the proprietary data or software exclusively for the purposes of performance of the work required by this contract, and (2) safeguards to protect such data or software from unauthorized use or disclosure for so long as the data or software remains proprietary. In addition, the agreement shall not impose any limitation upon the Government or its employees with respect to such data or software. A copy of the executed agreement shall be provided to the Contracting Officer. The Government may unilaterally modify the contract to list those third parties with which the Contractor has agreement(s).
   2. The Contractor agrees to: (1) indoctrinate its personnel who will have access to the data or software as to the restrictions under which access is granted; (2) not disclose the data or software to another party or other Contractor personnel except as authorized by the Contracting Officer; (3) not engage in any other action, venture, or employment wherein this information will be used, other than under this contract, in any manner inconsistent with the spirit and intent of this requirement; (4) not disclose the data or software to any other party, including, but not limited to, joint venturer, affiliate, successor, or assign of the Contractor; and (5) reproduce the restrictive stamp, marking, or legend on each use of the data or software whether in whole or in part.
   3. The restrictions on use and disclosure of the data and software described above also apply to such information received from the Government through any means to which the Contractor has access in the performance of this contract that contains proprietary or other restrictive markings.
   4. The Contractor agrees that it will promptly notify the Contracting Officer of any attempt by an individual, company, or Government representative not directly involved in the effort to be performed under this contract to gain access to such proprietary information. Such notification shall include the name and organization of the individual, company, or Government representative seeking access to such information.
   5. The Contractor shall include this requirement in subcontracts of any tier, which involve access to information covered by paragraph (a), substituting "subcontractor" for "Contractor" where appropriate.
   6. Compliance with this requirement is a material requirement of this contract.

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4. (NAVSEA SECTION C CLAUSE 6) ASSIGNMENT AND USE OF NATIONAL STOCK NUMBERS (NAVSEA) (MAY 1993)
   The following clause shall apply for spare parts procurements only.
   "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 Contractor 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. The cognizant Government Contract Administration Office shall be responsible for providing the Contractor such NSNs or preliminary NSNs which may be assigned and which are not already in possession of the Contractor."

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5. (NAVSEA SECTION C CLAUSE 7) COMPUTER SOFTWARE AND/OR COMPUTER DATABASE(S) DELIVERED TO AND/OR RECEIVED FROM THE GOVERNMENT (NAVSEA) (APR 2004)
   1. The Contractor agrees to test for viruses all computer software and/or computer databases, as defined in the clause entitled "RIGHTS IN NONCOMMERCIAL COMPUTER SOFTWARE AND NONCOMMERCIAL COMPUTER SOFTWARE DOCUMENTATION" (DFARS 252.227-7014), before delivery of that computer software or computer database in whatever media and on whatever system the software is delivered. The Contractor warrants that any such computer software and/or computer database will be free of viruses when delivered.
   2. The Contractor agrees to test any computer software and/or computer database(s) received from the Government for viruses prior to use under this contract.
   3. Unless otherwise agreed in writing, any license agreement governing the use of any computer software to be delivered as a result of this contract must be paid-up and perpetual, or so nearly perpetual as to allow the use of the computer software or computer data base with the equipment for which it is obtained, or any replacement equipment, for so long as such equipment is used. Otherwise the computer software or computer database does not meet the minimum functional requirements of this contract. In the event that there is any routine to disable the computer software or computer database after the software is developed for or delivered to the Government, that routine shall not disable the computer software or computer database until at least twenty-five calendar years after the delivery date of the affected computer software or computer database to the Government.
   4. No copy protection devices or systems shall be used in any computer software or computer database delivered under this contract to restrict or limit the Government from making copies. This does not prohibit license agreements from specifying the maximum amount of copies that can be made.
   5. Delivery by the Contractor to the Government of certain technical data and other data is now frequently required in digital form rather than as hard copy. Such delivery may cause confusion between data rights and computer software rights. It is agreed that, to the extent that any such data is computer software by virtue of its delivery in digital form, the Government will be licensed to use that digital-form with exactly the same rights and limitations as if the data had been delivered as hard copy.
   6. Any limited rights legends or other allowed legends placed by a Contractor on technical data or other data delivered in digital form shall be digitally included on the same media as the digital-form data and must be associated with the corresponding digital-form technical data to which the legends apply to the extent possible. Such legends shall also be placed in human readable form on a visible surface of the media carrying the digital-form data as delivered, to the extent possible.

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6. (NAVSEA SECTION CLAUSE 22) SPECIAL AGREEMENT REGARDING SWITCHBOARD SUBCONTRACTS (NAVSEA) (JUN 2000)
   1. 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. 2534 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.
   2. The Contractor shall, in all cases involving subcontracts which contain air circuit breakers for switchboards, give advance notification to the contracting officer and obtain written consent of the contracting officer prior to placing any such subcontract. Such advance notification shall include the information listed under paragraph (f)(1) of the clause entitled "SUBCONTRACTS" (FAR 52.244-2).

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7. (NAVSEA SECTION CLAUSE 25) EXCLUSION OF MERCURY (NAVSEA) (MAY 1998)
   Mercury or mercury containing compounds shall not be intentionally added or come in direct contact with hardware or supplies furnished under this contract.

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8. C-40 UNIQUE ITEM IDENTIFICATION (UID) (applicable to Phase I and II)
   The Contractor shall provide Unique Item Identification (UID) marking in accordance with DFARS clause 252.211-7003 and the requirements provided in the following description for the items listed in the Master Equipment List (MEL) and for any Government approved Additional Spares for the MEL spares procured under PIO CLIN 0011.
   1. UID is a set of data marked on items that is globally unique, unambiguous, and robust enough to ensure data information quality throughout the life of the unit until disposal and to support multi-faceted applications and users. The unique item identifier and the component data elements of the unique item identifier shall not change over the life of the item. The UID component data elements, at a minimum, shall be contained in a Data Matrix ECC200 symbol, as required by MIL-STD 130 latest revision.
   2. The enterprise (i.e., a manufacturer or vendor) shall be responsible for implementation of the Unique Identification marking/Automatic Identification Technology (UID/AIT) program in accordance with the Department of Defense Guide to Uniquely Identifying Tangible Items dated 1 June 2006, and with the Defense Federal Acquisition Regulation Supplement (DFARS) clause 252.211-7003, Item Identification and Valuation and the updated final rule for UID DFARS Clause 252.211-7003, dated June 2005 (hereinafter referred to as "UID DFARS Clause"). These documents can be found at http://www.acq.osd.mil/dpap/uid.
   3. The physical marks that contain the UID-required elements shall remain legible until the item is destroyed. Where space is available, human readable information for UID data elements shall be marked on the item. MIL-STD 130 latest revision provides information on various marking methods, surface requirements, and verification criteria. The preferred placement of the mark on the part is in the installed position whenever possible. This will allow personnel to read the mark without necessitating its removal. For parts already marked with a label or data plate, the Contractor may add additional UID information if space is available on the current label or replace with a label or data plate containing UID information in addition to existing information. The verification grade for the UID marking on all items marked shall be in accordance with MIL-STD 130 latest revision.
   4. The Contractor shall construct the UID for this Contract by using the Contractors Enterpriser Identifier; the hull number of the vessel as the Serial Number; and the respective hull sequencing number (e.g. hull 1 of 5, 2 of 5, if applicable) within the Class as the part number.
   5. Notwithstanding DFARS 252.211.7003, the Contractor shall return to the Government a listing of the identified UID material supplied in paragraph 6, herein, annotated with marking medium and location.
   6. When requested, the Contractor shall provide a price proposal for the management and implementation costs of UID marking of the MEL items. Once an order is placed by the Government, in accordance with the provisions "PROVISIONED ITEM ORDERS" clause of this contract, the Contractor shall proceed with UID marking and annotate the items requiring UID marking with the recommended UID marking medium and locations.
   7. In addition to the UID marking of the MEL items, the Contractor shall recommend items from each incremental buy list of Additional Spares for MEL equipment to be marked UID for approval by the Government. The Contractor shall also provide the price proposal for UID marking of each recommended item when requested. Once an order is placed by the Government, in accordance the provisions with "PROVISIONED ITEM ORDER(S)" clause of this contract, the Contractor shall proceed with UID marking and annotate the items requiring UID marking with the recommended UID marking medium and locations. Where items have a limited shelf life or useful life, they shall be procured to maximize the service life to the Government after ship delivery.
   8. DFARS clause 252.211-7003 Para. (c) (3) provides instruction on data syntax and semantics when marking items.
   9. Data Submission – The Contractor shall submit information required by the UID DFARS Clause in accordance with the procedures at http://www.acq.osd.mil/dpap/uid.

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9. SECTION D – NOT APPLICABLE

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10. SECTION E – NOT APPLICABLE

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11. SECTION F – NOT APPLICABLE IN PART; APPLICABLE PART MOVED TO SECTION I

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12. (SECTION H) NAVSEA 5252.227-9113 GOVERNMENT-INDUSTRY DATA EXCHANGE PROGRAM (OCT 2006)
    1. The Contractor shall participate in the appropriate interchange of the Government-Industry Data Exchange Program (GIDEP) in accordance with NAVSEA S0300-BU-GYD-010 dated November 1994. Data entered is retained by the program and provided to qualified participants. Compliance with this requirement shall not relieve the Contractor from complying with any other requirement of the contract.
    2. The Contractor agrees to insert paragraph (a) of this requirement in any subcontract hereunder exceeding $500,000.00. When so inserted, the word "Contractor" shall be changed to "Subcontractor".
    3. GIDEP materials, software and information are available without charge from:

       GIDEP
       P.O. Box 8000
       Corona, CA 92878-8000
       Phone: (951) 898-3207
       FAX: (951) 898-3250
       Internet: http://www.gidep.org

       
       

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13. (SECTION H) IDENTIFICATION AND ASSERTION OF RESTRICTIONS ON COMMERCIAL TECHNICAL DATA AND COMPUTER SOFTWARE
    1. Definitions. The terms used in this special contract requirement and associated CLINs are defined in the following clauses or sources:
       1. DFARS 252.227-7013;
       2. DFARS 252.227-7014;
       3. DFARS 252.227-7015;
       4. DFARS 252.227-7017; and
       5. DFARS 252.227-7018
    2. Identification and Assertion of Restrictions. The Contractor shall not deliver or otherwise provide to the Government any technical data or computer software with restrictive markings (or otherwise subject to restrictions on access, use, modification, reproduction, release, performance, display, or disclosure) unless the technical data or computer software are identified in accordance with the following requirements:
       
       1. Pre-Award Identification and Assertion (Applicable to Phase I). With its Phase I proposal, the Offeror (including its subcontractors or suppliers, or potential subcontractors or suppliers, at any tier) shall identify all technical data and computer software that it proposes to be delivered or otherwise provided (including all Option CLINs as if the Option was exercised) with less than Unlimited Rights as follows:
          
          1. Noncommercial Technologies. Noncommercial technical data and noncommercial computer software shall be identified in accordance with DFARS 252.227-7017 and DFARS 252.227-7028.
             
          2. Commercial Technologies. The Contractor shall also identify and assert any restrictions for all commercial technical data (i.e., technical data pertaining to a commercial item) by providing the same types of information, using a similar format, and following the same procedures and requirements as specified at DFARS 252.227-7017 (Commercial '7017 Technical Data List). The Contractor shall also identify and assert any restrictions for all commercial computer software in accordance with the Table at paragraph e. below
             
          3. An Offeror's failure to submit, complete or sign the identification and assertions required by paragraphs b.1.A or b.1.B of this clause with its offer may render the offer ineligible for award.
             
          4. If the Offeror is awarded a contract, the assertions identified in paragraphs b.1.A and b.1.B shall be listed in an Attachment to that contract. Upon request by the Contracting Officer, the Offeror shall provide sufficient information to enable the Contracting Officer to evaluate any listed assertion.
             
       2. Identification of Phase II Assertions (Phase II Proposal Submission). As part of its Phase II proposal, the Offeror (including its subcontractors or suppliers, or potential subcontractors or suppliers, at any tier) shall identify all technical data and computer software that it proposes to be delivered or otherwise provided (including all Option CLINs as if the Option was exercised) with less than Unlimited Rights for the Phase II performance period as follows:
          
          1. Noncommercial Technologies. Noncommercial technical data and noncommercial computer software shall be identified in accordance with DFARS 252.227-7017 and DFARS 252.227-7028.
             
          2. Commercial Technologies. The Contractor shall also identify and assert any restrictions for all commercial technical data (i.e., technical data pertaining to a commercial item) by providing the same types of information, using a similar format, and following the same procedures and requirements as specified at DFARS 252.227-7017 (Commercial '7017 Technical Data List). The Contractor shall also identify and assert any restrictions for all commercial computer software in accordance with the Table at paragraph e. below
             
          3. An Offeror's failure to submit, complete or sign the identification and assertions required by paragraphs b.1.A or b.1.B of this clause with its offer may render the offer ineligible for the Phase II award.
             
          4. If the Offeror is awarded a contract for Phase II, the assertions identified in paragraphs b.1.A and b.1.B shall be listed in an Attachment to that contract. Upon request by the Contracting Officer, the Offeror shall provide sufficient information to enable the Contracting Officer to evaluate any listed assertion.
       3. Post-Award Updates to the Pre-Award Identification and Assertions (Applicable for updates after award of Phase II). Except as provided in this paragraph, the Contractor (including its subcontractors or suppliers at any tier) shall not supplement or revise the pre-award listings or notices required by paragraph b.1 of this clause after contract award.
          
          1. Noncommercial Technologies. Post-award identification and assertion of restrictions on noncommercial technical data and noncommercial computer software are governed by paragraph (e) of DFARS 252.227-7013, DFARS 252.227-7014, and DFARS 252.227-7018, respectively.
          2. Commercial Technologies. The Contractor may supplement or revise its pre-award identification and assertion of restrictions on commercial computer software and commercial technical data only if such an expansion or revision would be permitted for noncommercial computer software or noncommercial technical data pursuant to paragraph b.2.A of this clause (i.e., based on new information, or inadvertent omissions that would not have materially affected source selection).
    3. Specific Identification of Technical Data and Computer Software. When identifying and asserting restrictions on technical data and computer software pursuant to paragraph b of this clause, the Offeror/Contractor shall—
       1. Ensure that the technical data and computer software are identified by specific reference to the requirement to deliver or provide that technical data or computer software in the contract. For example, by referencing the associated CLINs, CDRLs, or paragraphs in the statement of work.
       2. Include the relevant information for all technical data and computer software that are or may be required to be delivered or otherwise provided under the contract -- including all Option CLINs or other optional or contingent delivery requirements (i.e., presuming that the Government will exercise the option to require delivery), online or remote access to information, and firmware or other computer software to be embedded in hardware deliverables.
    4. Copies of Negotiated, Commercial, and Other Non-Standard Licenses. The Offeror/Contractor shall provide copies of all proposed specially negotiated license(s), commercial license(s), and any other asserted restrictions other than Government purpose rights; limited rights; restricted rights; SBIR data rights for which the protection period has not expired; or Government's minimum rights as specified in the clause at 252.227-7015.
    5. Commercial Computer Software (Including Open Source Software) assertions shall be identified by completing the following table:
       
       

       Identification of Commercial Computer Software (including Open Source Software) Use and Modifications
       Computer Software Title and Version # *	Computer Software License Name and Version # **	Name of Contractor Delivering Open Source Software ***	If Open Source Software (OSS), was OSS modified by Contractor? ****	If Modified, was Open Source Software modified by incorporation into a third party’s software? *****

       
       * The complete title and version number of the Open Source Software should be listed. If downloaded from a website, the website address should also be provided.
       
       ** The Software license and version number should be listed. If a version number is not available, the Contractor should state no version number.
       
       *** Corporation, individual, or other person as appropriate.
       
       **** The Contractor should state whether it has modified the Open Source Software.
       
       ***** If the Contractor has modified the Software, the contract should state whether the Open Source Software was modified by combining with another party’s non-open source software. The other party’s non-open source may be licensed with distribution restrictions which would not allow the Government to accept delivery of the software combination.
       
       
    6. Contractor Use, But Not Delivery, of, Open Source Software (OSS). OSS – computer software for which the source code is available without charge for use, modification and distribution -- is often licensed under terms that require the user to make the user's modifications to the open source software or any software that the user 'combines' with the open source software freely available in source code form. In cases where the Contractor proposes to use open source software while performing under a contract, but not to deliver OSS, the Contractor shall not: (i) create, or purport to create, any Government distribution obligations with respect to the computer software deliverables; or (ii) grant, or purport to grant, to any third party any rights to or immunities under Government intellectual property or Government data rights to the Government computer software deliverables. For example, the Contractor may not develop a computer software deliverable using a open source program (including without limitation libraries) and non-commercial computer software program where such use results in a program file(s) that contains code from both the non-commercial computer software and open source software if the open source software is licensed under a license that requires any "modifications" be made freely available. The Contractor also may not combine the non-commercial computer software deliverable with open source software licensed under the GNU General Public License (GPL) or the Lesser General Public License (LGPL) in any manner where such use would cause, or could be interpreted or asserted to cause, the non-commercial computer software deliverable or any modifications thereto to become subject to the terms of the GPL of LGPL."

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14. (SECTION H) REQUIREMENTS FOR DOMESTIC MANUFACTURE OF CERTAIN SHIPBOARD SYSTEMS AND EQUIPMENT
    1. Pursuant to 10 U.S.C. 2218, the work under Items 0005, and if the option(s) are exercised, Items 0007, and 0009 shall be subject to Section 1424(b) of the National Defense Authorization Act for Fiscal Year 1991 (P.L. 101-510), as amended by Section 1015 of the National Defense Authorization Act for Fiscal Years 1992 and 1993 (P.L. 102-190), Section 1022 of the National Defense Authorization Act for Fiscal Year 1993, (P.L. 102-484), and Section 125 of the National Defense Authorization Act for Fiscal Year 1995 (P.L. 103-337)..
    2. In accordance with the provisions of Section 1424(b) of Public Law 101-510 as amended, the Contractor shall ensure that each vessel constructed under this contract shall (1) incorporate propulsion systems whose main components (that is, the engines, reduction gears, and propellers) are manufactured in the United States, and (2) shall incorporate bridge and machinery control systems and interior communications equipment which (A) are manufactured in the United States and (B) have more than half of their value, in terms of cost, added in the United States.
    3. The Contractor agrees to retain until the expiration of three (3) years from the date of final payment under this contract and make available during such period, upon request of the Contracting Officer, records showing compliance with this clause.
    4. The Contractor agrees to insert this clause, including this paragraph (d), in every subcontract, purchase order and option agreement issued in performance of this contract.

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15. a. FAR/DFARS CLAUSES INCORPORATED BY REFERENCE APPLICABLE TO ALL CLINS
    
    52.203-3 Gratuities APR 1984
    52.203-5 Covenant Against Contingent Fees APR 1984
    52.203-6 Restrictions On Subcontractor Sales To The Government SEP 2006
    52.203-7 Anti-Kickback Procedures JUL 1995
    52.203-8 Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity JAN 1997
    52.203-10 Price Or Fee Adjustment For Illegal Or Improper Activity JAN 1997
    52.203-12 Limitation On Payments To Influence Certain Federal Transactions SEP 2007
    52.204-2 Security Requirements AUG 1996
    52.211-5 Material Requirements AUG 2000
    52.211-15 Defense Priority And Allocation Requirements APR 2008
    52.215-10 Price Reduction for Defective Cost or Pricing Data OCT 1997
    52.215-11 Price Reduction for Defective Cost or Pricing Data--Modifications OCT 1997
    52.215-12 Subcontractor Cost or Pricing Data OCT 1997
    52.215-13 Subcontractor Cost or Pricing Data--Modifications OCT 1997
    52.215-14 Integrity of Unit Prices OCT 1997
    52.215-14 Alt I Integrity of Unit Prices (Oct 1997) - Alternate I OCT 1997
    52.215-15 Pension Adjustments and Asset Reversions OCT 2004
    52.215-18 Reversion or Adjustment of Plans for Postretirement Benefits (PRB) Other than Pensions JUL 2005
    52.219-8 Utilization of Small Business Concerns MAY 2004
    52.222-1 Notice To The Government Of Labor Disputes FEB 1997
    52.222-4 Contract Work Hours and Safety Standards Act - Overtime Compensation JUL 2005
    52.222-20 Walsh-Healey Public Contracts Act DEC 1996
    52.222-21 Prohibition Of Segregated Facilities FEB 1999
    52.222-26 Equal Opportunity MAR 2007
    52.222-35 Equal Opportunity For Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans SEP 2006
    52.222-36 Affirmative Action For Workers With Disabilities JUN 1998
    52.222-37 Employment Reports On Special Disabled Veterans, Veterans Of The Vietnam Era, and Other Eligible Veterans SEP 2006
    52.223-6 Drug-Free Workplace MAY 2001
    52.223-11 Ozone-Depleting Substances MAY 2001
    52.223-12 Refrigeration Equipment and Air Conditioners MAY 1995
    52.227-1 Authorization and Consent DEC 2007
    52.227-2 Notice And Assistance Regarding Patent And Copyright Infringement DEC 2007
    52.227-9 Refund Of Royalties APR 1984
    52.227-10 Filing Of Patent Applications--Classified Subject Matter DEC 2007
    52.232-16 Progress Payments APR 2003
    52.232-17 Interest JUN 1996
    52.233-3 Protest After Award AUG 1996
    52.242-15 Stop-Work Order AUG 1989
    52.242-17 Government Delay Of Work APR 1984
    52.243-1 Changes--Fixed Price AUG 1987
    52.248-1 Value Engineering FEB 2000
    52.249-2 Termination For Convenience Of The Government (Fixed-Price) MAY 2004
    52.251-1 Government Supply Sources APR 1984
    252.203-7001 Prohibition On Persons Convicted of Fraud or Other Defense-Contract-Related Felonies DEC 2004
    252.204-7000 Disclosure Of Information DEC 1991
    252.211-7000 Acquisition Streamlining DEC 1991
    252.219-7003 Small Business Subcontracting Plan (DOD Contracts) APR 2007
    252.225-7004 Report of Contract Performance Outside the United States and Canada--Submission after Award MAY 2007
    252.225-7015 Restriction on Acquisition of Hand Or Measuring Tools JUN 2005
    252.225-7016 Restriction On Acquisition Of Ball and Roller Bearings MAR 2006
    252.225-7038 Restriction on Acquisition of Air Circuit Breakers JUN 2005
    252.226-7001 Utilization of Indian Organizations and Indian-Owned Economic Enterprises, and Native Hawaiian Small Business Concerns SEP 2004
    252.227-7013 Rights in Technical Data--Noncommercial Items NOV 1995
    252.227-7014 Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation JUN 1995
    252.227-7015 Technical Data--Commercial Items NOV 1995
    252.227-7016 Rights in Bid or Proposal Information JUN 1995
    252.227-7019 Validation of Asserted Restrictions--Computer Software JUN 1995
    252.227-7025 Limitations on the Use or Disclosure of Government-Furnished Information Marked with Restrictive Legends JUN 1995
    252.227-7027 Deferred Ordering Of Technical Data Or Computer Software APR 1988
    252.227-7030 Technical Data –Withholding of Payment MAR 2000
    252.227-7037 Validation of Restrictive Markings on Technical Data SEP 1999
    252.231-7000 Supplemental Cost Principles DEC 1991
    252.235-7003 Frequency Authorization DEC 1991
    252.239-7000 Protection Against Compromising Emanations JUN 2004
    252.243-7001 Pricing of Contract Modifications DEC 1991
    252.243-7002 Requests for Equitable Adjustment MAR 1998
    252.246-7001 Warranty Of Data DEC 1991
    252.246-7001 Alt I Warranty Of Data (Dec 1991) - Alternate I DEC 1991
    252.249-7002 Notification of Anticipated Program Termination or Reduction DEC 2006
    
    SECTION I – CONTRACT CLAUSES APPLICABLE ONLY TO CLINS 0001, 0002, 0003, 0004, 0016
    
    52.203-13 Contractor Code of Business Ethics and Conduct APR 2010
    52.203-14 Display of Hotline Poster(s) DEC 2007
    52.204-10 Reporting Executive Compensation and First-Tier Subcontract Awards JUL 2010
    52.215-2 Audit and Records--Negotiation MAR 2009
    52.219-9 Small Business Subcontracting Plan JUL 2010
    52.219-9 Alt II Small Business Subcontracting Plan (Apr 2008) Alternate II OCT 2001
    52.222-19 Child Labor -- Cooperation with Authorities and Remedies FEB 2008
    52.223-9 Estimate of Percentage of Recovered Material Content for EPA-Designated Items MAY 2008
    52.223-14 Toxic Chemical Release Reporting AUG 2003
    52.225-13 Restrictions on Certain Foreign Purchases JUN 2008
    52.229-3 Federal, State And Local Taxes APR 2003
    52.230-2 Cost Accounting Standards APR 1998
    52.230-6 Administration of Cost Accounting Standards MAR 2008
    52.232-16 Progress Payments APR 2003
    52.232-17 Interest JUN 1996
    52.232-25 Prompt Payment JUL 2002
    52.233-1 Disputes – Alternate 1 OCT 2003
    252.203-7000 Requirements Relating to Compensation of Former DoD Officials JAN 2009
    252.203-7002 Display of DoD Hotline Poster DEC 1991
    252.204-7008 Export-Controlled Items APR 2010
    252.211-7007 Reporting of Government-Furnished Equipment in the DoD Item Unique Identification (IUID) Registry NOV 2008
    252.215-7004 Excessive Pass-Through Charges MAY 2008
    252.225-7001 Buy American Act And Balance Of Payments Program JUN 2005
    252.225-7007 Prohibition on Acquisition of United States Munitions List Items from Communist Chinese Military Companies SEP 2006
    252.225-7012 Preference For Certain Domestic Commodities MAR 2008
    252.225-7013 Duty-Free Entry OCT 2006
    252.225-7019 Restriction on Acquisition of Anchor and Mooring Chain JUN 2005
    252.225-7025 Restriction on Acquisition of Forgings JUL 2006
    252.225-7031 Secondary Arab Boycott Of Israel JUN 2005
    252.225-7033 Waiver of United Kingdom Levies APR 2003
    252.242-7004 Material Management And Accounting System NOV 2005
    252.244-7000 Subcontracts for Commercial Items and Commercial Components (DoD Contracts) JAN 2007
    
    
    b. SECTION I – CONTRACT CLAUSES APPLICABLE ONLY TO CLINS 0005, 0006, 0007, 0008, 0009, 0010, 0011, 0012, 0013, 0014 AND 0015
    
    52.203-13 Contractor Code of Business Ethics and Conduct APR 2010
    52.203-14 Display of Hotline Poster(s) DEC 2007
    52.204-10 Reporting Executive Compensation and First-Tier Subcontract Awards JUL 2010
    52.215-2 Audit and Records—Negotiation OCT 2010
    52.219-9 Small Business Subcontracting Plan OCT 2010
    52.219-9 Small Business Subcontracting Plan (JUL 2010) Alternate II OCT 2001
    Alt II
    52.222-19 Child Labor—Cooperation with Authorities and Remedies JUL 2010
    52.223-14 Toxic Chemical Release Reporting AUG 2003
    52.225-13 Restrictions on Certain Foreign Purchases JUN 2008
    52.223-18 Contractor Policy to Ban Text Messaging While Driving SEP 2010
    52.229-4 Federal, State And Local Taxes (State and Local Adjustments) APR 2003
    52.230-2 Cost Accounting Standards OCT 2010
    52.230-6 Administration of Cost Accounting Standards JUN 2010
    52.232-16 Progress Payments AUG 2010
    52.232-25 Prompt Payment OCT 2008
    52.245-9 Use and Charges AUG 2010
    252.203-7000 Requirements Relating to Compensation of Former DoD Officials JAN 2009
    252.203-7002 Requirement to Inform Employees of Whistleblower Rights JAN 2009
    252.204-7008 Export-Controlled Items APR 2010
    252.211-7007 Reporting of Government-Furnished Equipment in the DoD Item Unique Identification (IUID) Registry NOV 2008
    252.215-7004 Excessive Pass-Through Charges MAY 2008
    252.222-7999 Child Labor – Cooperation with Authorities and Remedies FEB 2008
    252.225-7001 Buy American Act And Balance of Payments Program JAN 2009
    252.225-7007 Prohibition on Acquisition of United States Munitions List Items from Communist Chinese Military Companies SEP 2006
    252.225-7012 Preference for Certain Domestic Commodities JUN 2010
    252.225-7013 Duty-Free Entry DEC 2009
    252.225-7019 Restriction on Acquisition of Anchor and Mooring Chain DEC 2009
    252.225-7025 Restriction on Acquisition of Forgings DEC 2009
    252.225-7031 Secondary Arab Boycott of Israel JUN 2005
    252.225-7033 Waiver of United Kingdom Levies APR 2003
    252.242.7004 Material Management and Accounting System JUL 2009
    252.244-7000 Subcontracts for Commercial Items and Commercial Components (DoD Contracts) AUG 2009
    252.249-7002 Notification of Anticipated Program Termination or Reduction OCT 2010
    *Note: FAR 52.232-16, entitled "Progress Payments" is NOT Applicable to CLINS 0005, 0006, 0007, 0008, 0009, and 0010

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16. (SECTION I) 52.222-39 NOTIFICATION OF EMPLOYEE RIGHTS CONCERNING PAYMENT OF UNION DUES OR FEES (DEC 2004)
    
    The following section applies to Contracts greater than $100,000
    1. Definition. As used in this clause--
       United States means the 50 States, the District of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, Guam, the U.S. Virgin Islands, and Wake Island.
    2. Except as provided in paragraph (e) of this clause, during the term of this contract, the Contractor shall post a notice, in the form of a poster, informing employees of their rights concerning union membership and payment of union dues and fees, in conspicuous places in and about all its plants and offices, including all places where notices to employees are customarily posted. The notice shall include the following information (except that the information pertaining to National Labor Relations Board shall not be included in notices posted in the plants or offices of carriers subject to the Railway Labor Act, as amended (45 U.S.C. 151-188)).
       
       

       Notice to Employees
       Under Federal law, employees cannot be required to join a union or maintain membership in a union in order to retain their jobs. Under certain conditions, the law permits a union and an employer to enter into a union-security agreement requiring employees to pay uniform periodic dues and initiation fees. However, employees who are not union members can object to the use of their payments for certain purposes and can only be required to pay their share of union costs relating to collective bargaining, contract administration, and grievance adjustment.
       
       If you do not want to pay that portion of dues or fees used to support activities not related to collective bargaining, contract administration, or grievance adjustment, you are entitled to an appropriate reduction in your payment. If you believe that you have been required to pay dues or fees used in part to support activities not related to collective bargaining, contract administration, or grievance adjustment, you may be entitled to a refund and to an appropriate reduction in future payments.
       
       For further information concerning your rights, you may wish to contact the National Labor Relations Board (NLRB) either at one of its Regional offices or at the following address or toll free number:
       
       National Labor Relations Board
       Division of Information
       1099 14th Street, N.W.
       Washington, DC 20570
       1-866-667-6572
       1-866-316-6572 (TTY)
       To locate the nearest NLRB office, see NLRB's website at http://www.nlrb.gov.

    3. The Contractor shall comply with all provisions of Executive Order 13201 of February 17, 2001, and related implementing regulations at 29 CFR Part 470, and orders of the Secretary of Labor.
    4. In the event that the Contractor does not comply with any of the requirements set forth in paragraphs (b), (c), or (g), the Secretary may direct that this contract be cancelled, terminated, or suspended in whole or in part, and declare the Contractor ineligible for further Government contracts in accordance with procedures at 29 CFR part 470, Subpart B--Compliance Evaluations, Complaint Investigations and Enforcement Procedures. Such other sanctions or remedies may be imposed as are provided by 29 CFR Part 470, which implements Executive Order 13201, or as are otherwise provided by law.
       
    5. The requirement to post the employee notice in paragraph (b) does not apply to--
       
       1. Contractors and subcontractors that employ fewer than 15 persons;
          
       2. Contractor establishments or construction work sites where no union has been formally recognized by the Contractor or certified as the exclusive bargaining representative of the Contractor's employees;
          
       3. Contractor establishments or construction work sites located in a jurisdiction named in the definition of the United States in which the law of that jurisdiction forbids enforcement of union-security agreements;
          
       4. Contractor facilities where upon the written request of the Contractor, the Department of Labor Deputy Assistant Secretary for Labor-Management Programs has waived the posting requirements with respect to any of the Contractor's facilities if the Deputy Assistant Secretary finds that the Contractor has demonstrated that--
          
          1. The facility is in all respects separate and distinct from activities of the Contractor related to the performance of a contract; and
             
          2. Such a waiver will not interfere with or impede the effectuation of the Executive order; or
             
       5. Work outside the United States that does not involve the recruitment or employment of workers within the United States.
          
    6. The Department of Labor publishes the official employee notice in two variations; one for contractors covered by the Railway Labor Act and a second for all other contractors. The Contractor shall--
       
       1. Obtain the required employee notice poster from the Division of Interpretations and Standards, Office of Labor-Management Standards, U.S. Department of Labor, 200 Constitution Avenue, NW, Room N-5605, Washington, DC 20210, or from any field office of the Department's Office of Labor-Management Standards or Office of Federal Contract Compliance Programs;
          
       2. Download a copy of the poster from the Office of Labor-Management Standards website at http://www.olms.dol.gov; or
          
       3. Reproduce and use exact duplicate copies of the Department of Labor's official poster.
          
    7. The Contractor shall include the substance of this clause in every subcontract or purchase order that exceeds the simplified acquisition threshold, entered into in connection with this contract, unless exempted by the Department of Labor Deputy Assistant Secretary for Labor-Management Programs on account of special circumstances in the national interest under authority of 29 CFR 470.3(c). For indefinite quantity subcontracts, the Contractor shall include the substance of this clause if the value of orders in any calendar year of the subcontract is expected to exceed the simplified acquisition threshold. Pursuant to 29 CFR Part 470, Subpart B--Compliance Evaluations, Complaint Investigations and Enforcement Procedures, the Secretary of Labor may direct the Contractor to take such action in the enforcement of these regulations, including the imposition of sanctions for noncompliance with respect to any such subcontract or purchase order. If the Contractor becomes involved in litigation with a subcontractor or vendor, or is threatened with such involvement, as a result of such direction, the Contractor may request the United States, through the Secretary of Labor, to enter into such litigation to protect the interests of the United States.
       

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17. (SECTION I) INDUSTRIAL RESOURCES DEVELOPED UNDER DEFENSE PRODUCTION ACT TITLE III (DEC 1994)
    
    1. 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.
       
    2. The Contractor shall refer any request from a Title III project contractor for testing and qualification of a Title III industrial resource to the Contracting Officer.
       
    3. Upon the direction of the Contracting Officer, the Contractor shall test Title III industrial resources for qualification. The Contractor shall provide the test results to the Defense Production Act Office, Title III Program, located at Wright Patterson Air Force Base, Ohio 45433-7739.
       
    4. When the Contracting Officer modifies the 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 contract for the costs of testing and qualification of the Title III industrial resource.
       
    5. The Contractor agrees to insert the substance of this clause, including paragraph (e), in every subcontract issued in performance of this contract.
       

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18. (SECTION I) SUBCONTRACTS FOR COMMERCIAL ITEMS (MAR 2007)
    
    1. Definitions.
       "Commercial item", has the meaning contained in Federal Acquisition Regulation 2.101, Definitions.
       "Subcontract", includes a transfer of commercial items between divisions, subsidiaries, or affiliates of the Contractor or subcontractor at any tier.
       
    2. To the maximum extent practicable, the Contractor shall incorporate, and require its subcontractors at all tiers to incorporate, commercial items or non-developmental items as components of items to be supplied under this contract.
       
    3. 1. The Contractor shall insert the following clauses in subcontracts for commercial items:
          
          1. 52.219-8, Utilization of Small Business Concerns (MAY 2004) (15 U.S.C. 637(d)(2) and (3)), in all subcontracts that offer further subcontracting opportunities. If the subcontract (except subcontracts to small business concerns) exceeds $550,000 ($1,000,000 for construction of any public facility), the subcontractor must include 52.219-8 in lower tier subcontracts that offer subcontracting opportunities.
             
          2. 52.222-26, Equal Opportunity (MAR 2007) (E.O. 11246).
             
          3. 52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era and Other Eligible Veterans (SEP 2006) (38 U.S.C. 4212(a)).
             
          4. 52.222-36, Affirmative Action for Workers with Disabilities (JUN 1998) (29 U.S.C. 793).
             
          5. 52.222-39, Notification of Employee Rights Concerning Payment of Union Dues or Fees (DEC 2004) (E.O. 13201). Flow down as required in accordance with paragraph (g) of FAR clause 52.222-39).
             
          6. 52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels (FEB 2006) (46 U.S.C. Section 1241 and 10 U.S.C. Section 2631) (flow down required in accordance with paragraph (d) of FAR clause 52.247-64).
             
       2. While not required, the Contractor may flow down to subcontracts for commercial items a minimal number of additional clauses necessary to satisfy its contractual obligations.
          
    4. The Contractor shall include the terms of this clause, including this paragraph (d), in subcontracts awarded under this contract.
       

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19. (SECTION I) PREFERENCE FOR DOMESTIC SPECIALTY METALS (JUN 2005) (DEVIATION) ALTERNATE I (OCT 2007) (DEVIATION 2008-O0002)
    
    1. Definitions. As used in this clause--
       
       1. “Assembly” means an item forming a portion of a system or subsystem that can be provisioned and replaced as an entity and which incorporates multiple, replaceable parts.
          
       2. "Commercial derivative military article" means an item procured by the Department of Defense that is or will be produced using the same production facilities, a common supply chain, and the same or similar production processes that are used for the production of articles predominantly used by the general public or by nongovernmental entities for purposes other than governmental purposes.
          
       3. “Commercially available off-the-shelf item” –
          
          1. Means any item of supply, that is –
             
             1. A commercial item;
                
             2. Sold in substantial quantities in the commercial marketplace; and
                
             3. Offered to the Government, under a contract or subcontract at any tier, without modification, in the same form in which it is sold in the commercial marketplace; and
                
          2. Does not include bulk cargo, as defined in section 3 of the Shipping Act of 1984 (46 U.S.C. App. 1702), such as agricultural products and petroleum products.
             
       4. “Component” means any item supplied to the Government as part of an end item or another component.
          
       5. "Electronic component" means an item that operates by controlling the flow of electrons or other electrically charged particles in circuits, using interconnections of electronic devices such as resistors, inductors, capacitors, diodes, switches, transistors, or integrated circuits.
          
       6. "End item" means the final production product when assembled or completed, and ready for issue, delivery, or deployment
          
       7. "Produce" means the application of forces or processes to a specialty metal to create desired physical properties through quenching or tempering of steel plate, or gas atomization or sputtering titanium.
          
       8. “Qualifying country” means any country listed in subsection 225.872-1(a) or (b) of the Defense Federal Acquisition Regulation Supplement (DFARS).
          
       9. “Required form” means in the form of mill product, such as bar, billet, wire, slab, plate or sheet, and in the grade appropriate for the production of—
          
          1. A finished end item delivered to the Department of Defense; or
             
          2. A finished component assembled into an end item delivered to the Department of Defense.
             
       10. “Specialty metal” means--
           
           1. Steel--
              
              1. With a maximum alloy content exceeding one or more of the following limits: manganese, 1.65 percent; silicon, 0.60 percent; or copper, 0.60 percent; or
                 
              2. Containing more than 0.25 percent of any of the following elements: aluminum, chromium, cobalt, molybdenum, nickel, niobium (columbium), titanium, tungsten, or vanadium.
                 
           2. Metal alloys consisting of—
              
              1. Nickel or iron-nickel alloys that contain a total of alloying metals other than nickel and iron in excess of 10 percent; or
                 
              2. Cobalt alloys that contain a total of alloying metals other than cobalt and iron in excess of 10 percent;
                 
           3. Titanium and titanium alloys.
              
           4. Zirconium and zirconium alloys.
              
       11. “Subsystem” means a functional grouping items that combine to perform a major function within an end item, such as electrical power, attitude control, and propulsion.
           
    2. Except as provided in paragraph (c) of this clause, any specialty metals incorporated in items delivered under this contract shall be melted or produced in the United States, its outlying areas, or a qualifying country, except for—
       
       1. Electronic components;
          
       2. 1. Commercially available off-the-shelf (COTS) items; other than—
             
             1. COTS fasteners, unless such fasteners are incorporated into COTS end items, subsystems, assemblies, or components.
                
             2. Forgings or castings of specialty metals, unless such forgings or castings are incorporated into COTS end items, subsystems, or assemblies.
                
             3. Commercially available high performance magnets, unless such high performance magnets are incorporated into COTS end items or subsystems;
                
          2. A COTS item is considered to be “offered without modification” as long as it is not modified prior to contractual acceptance by the next higher tier in the supply chain.
             
             1. Specialty metals contained in a COTS items that was accepted without modification by the next higher tier are excepted and remain excepted even if a piece of the COTS items subsequently is removed (e.g., the end is removed from a COTS screw or an extra hole is drilled in a COTS bracket).
                
             2. For specialty metals that were not contained in a COTS item upon acceptance, but are added to the COTS item after acceptance, the added specialty metals are subject to the restrictions (e.g., a special reinforced handle made of specialty metal that is added to a COTS item).
                
             3. If two or more COTS items are combined in such a way that the resultant item is not a COTS item, only the specialty metals involved in joining the COTS items together are subject to the restrictions (e.g., a COTS aircraft is outfitted with the a COTS engine, but not the COTS engine normally provided with that aircraft).
                
             4. For COTS items that are normally sold in the commercial marketplace with various options, items that include such options are also COTS items. However, if a COTS item is offered to the Government with an option that is not normally offered in the commercial marketplace, that option is subject to the specialty metals restrictions. (e.g., an aircraft is normally sold to the public with an option for several different radios. DoD requests a military-unique radio. The aircraft is still a COTS item, but the military-unique radio is not a COTS item, and must comply with the specialty metals restrictions, unless another exception applies.
                
       3. Fasteners that are commercial items that are purchased under a contract or subcontract with a manufacturer of such fasteners, if the manufacturer has certified that it will purchase, during the relevant calendar year, an amount of domestically melted specialty metal, in the required form, for use in the production of fasteners for sale to the Department of Defense and other customers, that is not less than 50% of the total amount f the specialty metal that it will purchase to carry out the production of such fasteners for all customers.
          
       4. Items manufactured in a qualifying country;
          
       5. Items for which the Government has determined in accordance with 225.700X-3 of Class Deviation 2008-O0002 that specialty metal melted or produced in the Untied States cannot be acquired as and when needed in—
          
          1. A satisfactory quality;
             
          2. A sufficient quantity; and
             
          3. The required form.
             
       6. Specialty metals, other than specialty metals in high performance magnets, that do not meet any of the exceptions in paragraphs (b)(1) through (5) of this clause, if the total weight of such noncompliant metals does not exceed 2 percent of the total weight of specialty metals in the item, as estimated in good faith by the Contractor.
          
    3. 
       
       1. Streamlined compliance for commercial derivative military articles. As an alternative to the compliance required in paragraph (b) of this clause, the Contractor may purchase an amount of domestically melted specialty metals in the required form, for use during the period of contract performance in the production of the commercial derivative military article and the related commercial article, in the amount determined in accordance with paragraph (c)(2) of this clause, if—
          
          1. This is an acquisition of commercial derivative military articles; and
             
          2. The Contractor has certified in its offer in accordance with paragraph (c)(2) of this clause.
             
       2. Certification for streamlined compliance for commercial derivative military articles (to be submitted with offer when applicable). The Offeror ( ) certifies ( ) does not certify that prior to award it will have entered into a contractual agreement or agreements to purchase an amount of domestically melted or produced specialty metal in the required form for use during the period of contract performance in the production of the commercial derivation military article and the related commercial article, that is not less than the Contractor's good faith estimate of the greater of—
          
          1. An amount equivalent to 120% of the amount of specialty metal that is required to carry out the production of the commercial derivation military article (including the work performed under each subcontract); or
             
          2. An amount equivalent to 50% of the amount of specialty metal that is purchased by the contractor and its subcontractors for use during such period in the production of the commercial derivative military article and the related commercial article.
             
       3. For the purposes of the certification in paragraph (c)(2) of this clause, the amount of specialty metal that is required to carry out the production of the commercial derivative military article includes specialty metal contained in any item, including commercially available off-the-shelf items, incorporated into such commercial derivative military article.
          
    4. Unless the Contractor has certified in accordance with paragraph (c), the Contractor shall insert the substance of this clause, excluding paragraph (c) but including this paragraph (d), in all subcontracts for articles containing specialty metals.
       

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20. (SECTION I) Transportation of Supplies by Sea (MAY 2002)
    
    1. Definitions. As used in this clause --
       
       1. "Components" means articles, materials, and supplies incorporated directly into end products at any level of manufacture, fabrication, or assembly by the Contractor or any subcontractor.
          
       2. "Department of Defense" (DoD) means the Army, Navy, Air Force, Marine Corps, and defense agencies.
          
       3. "Foreign flag vessel" means any vessel that is not a U.S.-flag vessel.
          
       4. "Ocean transportation" means any transportation aboard a ship, vessel, boat, barge, or ferry through international waters.
          
       5. "Subcontractor" means a supplier, materialman, distributor, or vendor at any level below the prime contractor whose contractual obligation to perform results from, or is conditioned upon, award of the prime contract and who is performing any part of the work or other requirement of the prime contract.
          
       6. "Supplies" means all property, except land and interests in land, that is clearly identifiable for eventual use by or owned by the DoD at the time of transportation by sea.
          
          1. An item is clearly identifiable for eventual use by the DoD if, for example, the contract documentation contains a reference to a DoD contract number or a military destination.
             
          2. "Supplies" includes (but is not limited to) public works; buildings and facilities; ships; floating equipment and vessels of every character, type, and description, with parts, subassemblies, accessories, and equipment; machine tools; material; equipment; stores of all kinds; end items; construction materials; and components of the foregoing.
             
       7. "U.S.-flag vessel" means a vessel of the United States or belonging to the United States, including any vessel registered or having national status under the laws of the United States.
          
    2. 
       
       1. The Contractor shall use U.S.-flag vessels when transporting any supplies by sea under this contract.
          
       2. A subcontractor transporting supplies by sea under this contract shall use U.S.-flag vessels if--
          
          1. This contract is a construction contract; or
             
          2. The supplies being transported are--
             
             1. Noncommercial items; or
                
             2. Commercial items that--
                
                1. The Contractor is reselling or distributing to the Government without adding value (generally, the Contractor does not add value to items that it contracts for f.o.b. destination shipment);
                   
                2. Are shipped in direct support of U.S. military contingency operations, exercises, or forces deployed in humanitarian or peacekeeping operations; or
                   
                3. Are commissary or exchange cargoes transported outside of the Defense Transportation System in accordance with 10 U.S.C. 2643.
                   
    3. The Contractor and its subcontractors may request that the Contracting Officer authorize shipment in foreign-flag vessels, or designate available U.S.-flag vessels, if the Contractor or a subcontractor believes that --
       
       1. U.S.-flag vessels are not available for timely shipment;
          
       2. The freight charges are inordinately excessive or unreasonable; or
          
       3. Freight charges are higher than charges to private persons for transportation of like goods.
          
    4. The Contractor must submit any request for use of other than U.S.-flag vessels in writing to the Contracting Officer at least 45 days prior to the sailing date necessary to meet its delivery schedules. The Contracting Officer will process requests submitted after such date(s) as expeditiously as possible, but the Contracting Officer's failure to grant approvals to meet the shipper's sailing date will not of itself constitute a compensable delay under this or any other clause of this contract. Requests shall contain at a minimum --
       
       1. Type, weight, and cube of cargo;
          
       2. Required shipping date;
          
       3. Special handling and discharge requirements;
          
       4. Loading and discharge points;
          
       5. Name of shipper and consignee;
          
       6. Prime contract number; and
          
       7. A documented description of efforts made to secure U.S.-flag vessels, including points of contact (with names and telephone numbers) with at least two U.S.-flag carriers contacted. Copies of telephone notes, telegraphic and facsimile message or letters will be sufficient for this purpose.
          
    5. The Contractor shall, within 30 days after each shipment covered by this clause, provide the Contracting Officer and the Maritime Administration, Office of Cargo Preference, U.S. Department of Transportation, 400 Seventh Street SW., Washington, DC 20590, one copy of the rated on board vessel operating carrier's ocean bill of lading, which shall contain the following information:
       
       1. Prime contract number;
          
       2. Name of vessel;
          
       3. Vessel flag of registry;
          
       4. Date of loading;
          
       5. Port of loading;
          
       6. Port of final discharge;
          
       7. Description of commodity;
          
       8. Gross weight in pounds and cubic feet if available;
          
       9. Total ocean freight in U.S. dollars; and
          
       10. Name of the steamship company.
           
    6. The Contractor shall provide with its final invoice under this contract a representation that to the best of its knowledge and belief--
       
       1. No ocean transportation was used in the performance of this contract;
          
       2. Ocean transportation was used and only U.S.-flag vessels were used for all ocean shipments under the contract;
          
       3. Ocean transportation was used, and the Contractor had the written consent of the Contracting Officer for all non-U.S.-flag ocean transportation; or
          
       4. Ocean transportation was used and some or all of the shipments were made on non-U.S.-flag vessels without the written consent of the Contracting Officer. The Contractor shall describe these shipments in the following format:
          
          

          ITEM DESCRIPTION	CONTRACT LINE ITEMS	QUANTITY
          TOTAL

          
          
    7. If the final invoice does not include the required representation, the Government will reject and return it to the Contractor as an improper invoice for the purposes of the Prompt Payment clause of this contract. In the event there has been unauthorized use of non-U.S.-flag vessels in the performance of this contract, the Contracting Officer is entitled to equitably adjust the contract, based on the unauthorized use.
       
    8. In the award of subcontracts for the types of supplies described in paragraph (b)(2) of this clause, the Contractor shall flow down the requirements of this clause as follows:
       
       1. The Contractor shall insert the substance of this clause, including this paragraph (h), in subcontracts that exceed the simplified acquisition threshold in part 2 of the Federal Acquisition Regulation.
          
       2. The Contractor shall insert the substance of paragraphs (a) through (e) of this clause, and this paragraph (h), in subcontracts that are at or below the simplified acquisition threshold in part 2 of the Federal Acquisition Regulation.
          

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21. (SECTION I) 252.247-7024 NOTIFICATION OF TRANSPORTATION OF SUPPLIES BY SEA (MAR 2000)
    
    1. The Contractor has indicated by the response to the solicitation provision, Representation of Extent of Transportation by Sea that it did not anticipate transporting by sea any supplies. If, however, after the award of this contract, the Contractor learns that supplies, as defined in the Transportation of Supplies by Sea clause of this contract, will be transported by sea, the Contractor --
       
       1. Shall notify the Contracting Officer of that fact; and
          
       2. Hereby agrees to comply with all the terms and conditions of the Transportation of Supplies by Sea clause of this contract.
          
    2. The Contractor shall include this clause; including this paragraph (b), revised as necessary to reflect the relationship of the contracting parties--
       
       1. In all subcontracts under this contract, if this contract is a construction contract; or
          
       2. If this contract is not a construction contract, in all subcontracts under this contract that are for--
          
          1. Noncommercial items; or
             
          2. Commercial items that--
             
             1. The Contractor is reselling or distributing to the Government without adding value (generally, the Contractor does not add value to items that it subcontracts for f.o.b. destination shipment);
                
             2. Are shipped in direct support of U.S. military contingency operations, exercises, or forces deployed in humanitarian or peacekeeping operations; or
                
             3. Are commissary or exchange cargoes transported outside of the Defense Transportation System in accordance with 10 U.S.C. 2643.
                

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22. SECTION K – NONE

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23. SECTION L – INSTRUCTIONS, CONDITIONS AND NOTICES TO BIDDERS (SECTION L) DOMESTIC SOURCE LIMITATION ON CERTAIN MARINE COMPONENTS
    The Offeror's attention is directed to the provisions of subsection (a) of 10 U.S.C. 2534 regarding certain domestic source limitation items. The limitations apply to air circuit breakers, welded shipboard anchor and mooring chain with a diameter of 4 inches or less, and the following items to the extent they are unique to marine applications: gyrocompasses, electronic navigation charts systems, steering controls, pumps, propulsion and machinery control systems, and totally enclosed lifeboats. The provisions of 10 U.S.C. 2534 apply, unless waived in accordance with the terms of the statute. For example, currently there is a waiver for certain items produced in the United Kingdom. Notwithstanding any waiver under 10 U.S.C. 2534 with respect to welded anchor and mooring chain with a diameter of 4 inches or less, the anchor and mooring chain restrictions contained in the annual Department of Defense Appropriations Acts apply. (See DFARS 252.225-7019).

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