BPA_Solicitation_&_SOW_Final_MO.doc

AG-12639518Q0047 FGIS Inspection Services MO Solicitation #12639518Q0047

Notes to Quoters:

1. This solicitation is for one or more Blanket Purchase Agreements (BPA’S). If more than one agreement is awarded, the decision to use a particular BPA will be made based on location, price, and service need.

2. ANY QUESTIONS PERTAINING TO THIS Request for Agreements (RFA) SHALL BE DIRECTED TO Michael Wesley, BY EMAIL michael.r.wesley@aphis.usda.gov TO no later than 4 days before quotes are due.

3. ALL CONTRACTORS MUST BE REGISTERED IN THE SYSTEM FOR AWARD MANAGEMENT (SAM) PRIOR TO CONTRACT AWARD. Go to www.sam.gov to register. If already registered, please make sure that your registration is up to date and that you have completed all FAR representations and certifications.

4. ALL WORK PERTAINING TO THIS REQUEST SHALL BE DONE IN ACCORDANCE WITH THE ATTACHED BPA AND THE DEPT OF LABOR WAGE DETERMINATIONS APPLICABLE TO EACH WORK SITE. Wage rates for each site can be found at http://www.wdol.gov/sca.aspx, and will be included in the contract.

5. YOU MAY EMAIL YOUR QUOTE DIRECTLY TO Michael Wesley before the time specified on the solicitation. Send quotes to: michael.r.wesley@aphis.usda.gov

6. USDA IS AN AGENCY OF THE FEDERAL GOVERNMENT, TAX-EXEMPT. FEDERAL TAX. I.D. NO. 41-0696271.

7. Interested vendors shall submit the completed pricing schedule, statement of capability (including key personnel- see clause 452.237-74 KEY PERSONNEL), three references, and location (See Provision 52.212-2 at the end of this document for complete information). Price for hourly rates shall include all costs necessary to perform the specified work at the chosen facility location. Contractors must indicate the facility or facilities they wish to have included in the BPA, only the location(s) listed on the pricing schedule will be considered for inclusion in the BPA if awarded. Choice of locations include: Scott City, MO.

PRICING SCHEDULE:

Rate shall be a firm fixed hourly rate for inspection services at the location(s) quoted. Pricing shall include all costs associated with providing the service at the location(s) indicated.

SERVICE LOCATION(S)

PRICE SCHEDULE

Item No Description

Unit Price

Commodity Inspection

PER HR

Services –02/01/2018 - 01/31/2019

1. DETAILS OF SOLICITATION

1.1 DESCRIPTION OF AGREEMENT: This is to establish a Blanket Purchase Agreements (BPA). Pursuant to Federal Acquisition Regulation (FAR) 13.303, Blanket Purchase Agreements, the Contractor agrees to the following terms of a BPA EXCLUSIVELY WITH UNITED STATES DEPARTMENT OF AGRICULTURE (USDA), ANIMAL PLANT HEALTH INSPECTION SERVICE (APHIS) and Agricultural Marketing Service (AMS), Federal Grain Inspection Service (FGIS). Contractor shall provide processed commodity inspection and weighing services under the authority of the Agriculture Marketing Act (AMA) in the geographical area serviced by the FGIS Domestic Inspection Operations Office (DIOO). These areas include commodity plants in Scott City, MO. Work shall be done in accordance with the specifications when requested by the Contracting Officer or those individuals authorized to make service calls under the BPA.

1.2 TERM OF AGREEMENT: The effective period of this BPA is one year (February 1, 2018 through January 31, 2019).

1.3 EXTENT OF OBLIGATION: The Government is obligated only to the extent authorized service calls are placed against this BPA. There is no minimum guarantee under this BPA.

1.3.1 Review for compliance to new statutes or directives may be completed before the BPA’s expiration date. Any revisions to the BPA, as a result of this review, shall be accomplished by a bi-lateral modification.

1.3.2 This agreement may be unilaterally terminated by the Contracting Officer and may be rewritten or revised at the option of the Contracting Officer.

1.3.3 Purchases after the specified period or exceeding the aggregate total dollar limitation shall not be authorized, nor considered an obligation.

1.3.4 Purchases (service calls) made under this BPA will include, by reference, the terms and conditions set out in this BPA.

1.4 PRICING: The prices to the Government for all services under this BPA shall be as low as, or lower, than those charged the supplier’s most favored customer for comparable services under similar terms and conditions.

Call orders are estimated overall at 200-3500 hours of service annually. No single service call may exceed $25,000. Estimated hours at each location may vary. The Government is obligated only to the extent authorized service calls are placed against this BPA. There is no minimum guarantee under this BPA. If more than one BPA is awarded, the decision to use a particular BPA will be made based on location, price, and service need.

1.5 PURCHASE LIMITATION: Each Service Call placed by individuals authorized under this BPA shall not exceed $25,000. BPA Ceiling: Combined Service Calls must not exceed $500,000 per BPA per BPA year. There is no minimum guarantee under this BPA.

1.6 LIMITATIONS OF INDIVIDUALS AUTHORIZED TO PLACE SERVICE CALLS AND DOLLAR AMOUNT: Calls under this agreement are only authorized by the following USDA Personnel and USDA Contracting officer. All service calls by the following personnel are limited to $25,000 per person, per call:

Authorized USDA Personnel:

Ron Metz – 816-659-8400

Claudius Price – 816-659-8414

Brian Woods – 816-659-8402

Roy Lyon – 316-204-3851

Shelley Bibb – 816-659-8404

Denise Ruggles – 816-659-8406

1.6.1 Funding: Funding orders will be issued under this BPA from which service calls may be made. Funding Orders only establish that funding is available and the Government is obligated only to the extent authorized service calls are placed in accordance with this BPA against that funding. Funding not used on service calls will be de-obligated.

Any warranted USDA/APHIS Contracting Officer may issue a funding order within the limitations of their warrant and this BPA.

1.6.2 Service calls under this BPA will be issued based on hourly requirements for a given service location and shall detail the BPA Pricing Schedule item and quantity being ordered.

1.6.3 All service calls made by Authorized USDA Personnel shall be tracked and reported to the Contracting Officers Representative on a regular basis.

1.7 DELIVERY: Upon services rendered under this agreement, the supplier shall provide a delivery ticket or sales slip containing the following minimum information:

(i) Name of contractor/worker.

(ii) BPA number.

(iii) Date(s) of services rendered.

(iv) Purchase number.

(v) Itemized list of services furnished.

(vi) Quantity and unit price, and extension of each item, less applicable discounts (unit prices and extensions need not be shown when incompatible with the use of automated systems, provided that the invoice is itemized to show this information).

(vii) Date of delivery or shipment.

1.8 RECEIPT AND ACCEPTANCE OF PURCHASES: Receipt of purchases shall be indicated by signature and date on the appropriate form by the authorized Government representative. This shall be subject to acceptance by the assigned receiver when compared to the documentation of the original call. A sales slip, or delivery ticket (See 1.7), may be used for receipt and acceptance.

1.9

INVOICES:

The USDA, APHIS uses the Invoice Processing Platform (IPP) for electronic submission and tracking of invoices and payment information to its suppliers of goods and services. Invoices shall be submitted electronically to the IPP invoicing system. The contractor may register at https://ipp.gov . An invoice must include—

(1) Name and address of the Contractor;

(2) Invoice date;

(3) BPA number, contract line item number and, if applicable, the order number;

(4) Description, quantity, unit of measure, unit price and extended price of the items delivered;

(5) Terms of any prompt payment discount offered;

(6) Name and address of official to whom payment is to be sent; and

(7) Name, title, and phone number of person to be notified in event of defective invoice. Invoices will be handled in accordance with the Prompt Payment Act (31 U.S.C. 3903) and Office of Management and Budget (OMB) Circular A-125, Prompt Payment. Contractors are encouraged to assign an identification number to each invoice.

1.10 POINT OF CONTACTS (POCs):

a. Technical POC for arranging delivery: Andy Greenfield (202) 720-0277

b. Payment POC for invoicing: Denise Ruggles, USDA, AMS, FGIS, National Grain Center, 10383 N. Ambassador Drive, Kansas City, MO 64153. Phone: 816-659-8406

c. Contracting Officer’s Representative: Denise Ruggles, USDA, AMS, FGIS, National Grain Center, 10383 N. Ambassador Drive, Kansas City, MO 64153. Phone: 816-659-8406

d. Contracting Officer for BPA related issues: Patricia Simon, USDA, APHIS, MRPBS, ASD, 100 North Sixth Street, 5th Floor, Minneapolis, MN 55403. Email: Patricia.m.simon@aphis.usda.gov. Telephone: 612-336-3460

1.11 Contracting officer (CO) and Contracting Officer’s Representative (COR):

The Contracting Officer is the only individual who can legally commit the Government to the expenditure of public funds. No person other than the Contracting Officer can make any changes to the terms, conditions, general provisions or other stipulations of this contract. Any other commitment, either explicit or implied, is invalid. The CO is the only person with authority to act as agent of the Government under this contract. Only the Contracting Officer has authority to: (1) direct or negotiate any changes in the statement of work; (2) modify or extend the period of performance; (3) change the delivery schedule; (4) authorize reimbursement to the Contractor for any costs incurred during the performance of this contract; (5) obligate or deobligate funds into the contract; or (6) otherwise change any terms and conditions of this contract. No information, other than that which may be contained in an authorized modification to this contract duly issued by the Contracting Officer, shall be considered grounds for deviation from any stipulation of this contract.

A COR will be appointed to this BPA and a designation letter will be issued. As delegated by the CO, the COR is responsible for: (1) monitoring the Contractor's technical progress, including the surveillance and assessment of performance and recommending to the Contracting Officer changes in requirements; (2) assisting the CO in interpreting the statement of work and any other technical performance requirements; (3) performing technical evaluation as required; (4) performing technical inspections required by this contract; and (5) assisting in the resolution of technical problems encountered during performance.

1.12

WORK RESTRICTIONS

The work under this BPA falls under the restrictions of 7 U.S.C. 1627, which authorizes the Secretary of Agriculture to contract with technically qualified persons, firms or organizations to perform research, inspection, classification, technical, or other special services, without regard to the civil‐service laws, provided it is for a temporary basis and for a term not to exceed six months in any fiscal year.

The above temporary limitation applies to each individual providing services under the calls of this BPA. Individuals shall not provide services beyond six months in any single fiscal year. The six month limitation shall be calculated based on the number of days compensated within any fiscal year. The fiscal year is October 1 through September 30.

2.0 SPECIFICATIONS

Statement of Work

To Assist the U.S. Department of Agriculture, Grain Inspection, Packers and Stockyards Administration, Federal Grain Inspection Service

In Providing Commodity Inspection and Weighing Services

2.1

INTRODUCTION

The U.S. Department of Agriculture (USDA), Agricultural Marketing Service (AMS), facilitates the marketing of U.S. grain and related agricultural products through the establishment of standards for quality assessments, and regulation of handling practices. AMS’s Federal Grain Inspection Service (FGIS) administers the official commodity inspection and weighing program under the authority of the Agricultural Marketing Act of 1946 (AMA), as amended. The AMA authorizes the Secretary of Agriculture to contract with private firms, institutions, and individuals for the purpose of performing specified inspection services. FGIS will use this contracting authority to supplement its workforce by contracting with private companies and individuals to sample, inspect, and weigh commodities when requested by FGIS-Field Management Division.

2.2 SCOPE OF WORK

Contractor must provide processed commodity inspection and weighing services under the authority of the AMA in the geographical area serviced by the FGIS Domestic Inspection Operations Office (DIOO) and have a base of operation within a 25 mile radius of the commodity plant. The commodity plant is in the following location: SEMO Milling, 261 River Rd, Scott City, MO 63780.

Work at the plant may include any or all activities in the Processed Commodities Handbook, Weighing Handbook, Condition of Food Container Handbooks, Sanitation Handbook, and applicable Directives. The commodity inspection services that FGIS may assign to the contractor may include any of the following services:

a.

Sampling Service. Drawing a sample from a processed commodity lot using FGIS-approved methods to obtain representative samples for laboratory analysis to determine quality based upon contract requirements and instructions.

b.

Condition of Food Container Inspection. Examining the containers for condition, construction, sealing, and markings using U.S. Standards for Condition of Food Containers. (Reference: Agricultural Marketing Service, Part 42--Standards for Condition of Food Containers) c.

Checkweighing. Weighing a selected number of containers from a processed commodity lot, determining the estimated total gross, tare, and net weight, or the estimated average gross or net weight per filled container. (Reference: Weighing Handbook, Chapter 4) d.

Carrier Stowage Examination. Visually determine if a carrier or container is clean; dry; free of infestation, rodents, toxic substances, and foreign odor; and suitable to store or carry a commodity. (Reference: Directive FGIS 9180.48) e.

Checkloading. Performing a stowage examination on a carrier, computing the number of filled containers loaded aboard the carrier, observing the condition of containers loaded aboard the carrier, and sealing the loaded carrier, if practicable. (Reference: Directive FGIS 9180.50)

The number and kind of work activities at each plant may expand or be reduced during the contract period based on requests FGIS-Field Management Division (FMD) receives from interested parties involved in purchasing and producing product and FGIS-FMD’s performance assessment of the contractor.

2.3

APPLICABLE DOCUMENTS

Contractor must perform all commodity inspection and weighing related services in accordance with the AMA (7 U.S.C. 71 et seq.), regulations (7 CFR Part 868 subpart A), Handbooks, instructions, methods, policies, and procedures.

Links to applicable material for this work are in parts of the following:

Sanitation Inspection Handbook: https://www.gipsa.usda.gov/fgis/handbook/SanitationHB/SanitationHB_2016-03-15.pdf Weighing Handbook, Chapter 4, Checkweighing:

https://www.gipsa.usda.gov/fgis/handbook/WeighingHB/WeighingHB_2016-04-19.pdf Processed Commodities Handbook, Chapters 1, 2, and 3:

https://www.gipsa.usda.gov/fgis/handbook/PCHB/PCH_2016-03-08.pdf United States Standards for Condition of Food Containers:

https://www.ams.usda.gov/sites/default/files/media/FV-Manual-ConditionofContainer.pdf Stowage Examination Services, FGIS Directive 9180.48:

https://www.gipsa.usda.gov/laws/directives/9180-48.pdf Checkcounting, Observation of Loading, and Checkloading Services, FGIS Directive 9180.50:

https://www.gipsa.usda.gov/laws/directives/9180-50.pdf 2.4

RESPONSIBILITIES

a. Contractor must perform all commodity inspection and weighing related services using licensed personnel. Personnel must demonstrate written and practical knowledge and hold active licenses as defined by FGIS-FMD before they can perform work independently. Licenses may be issued by FGIS-FMD on or before the first day of work after contractor demonstrates knowledge of the written material and can show they can do the work. FGIS-FMD is available to offer clarity on written material and work procedure before licensing. Written material is identified in Applicable Documents, see paragraph 2.3.

b. Contractor must also be able to (i) read, write, and understand English (ii) perform basic mathematical computations (i.e. addition, subtraction, multiplication, and division) and (iii) be able to lift at least 50 pounds.

Contractor must:

1. Not have a conflict of interest (as specified in 7 CFR §868.80). This includes the contractor and any officer, director, stockholder, employee, or other related entity.

(a) Advise FGIS immediately of any proposed change in name, ownership, officers or directors, or control of the contractor and, if a trust, any change affecting the trust agreement.

(b) Not enter into any local work agreements with plants, without FGIS approval that no conflict exists.

(c) Not accept personal compensation (this includes Contractor employees) of any kind from plants or plant personnel.

(d) Contractor personnel working in situations where their contractor status is not obvious to third parties are required to identify themselves as such.

2. Have qualified personnel available that meet the physical condition requirements in the Sanitation Inspection Handbook.

(a) Provide transportation for personnel to and from point(s) of service, and compensate personnel assigned to perform services under this Statement of Work.

(b) Use only personnel licensed by FGIS-FMD to perform services.

(c) Train and assist personnel in acquiring and maintaining the necessary skills to perform official service and maintain records of training.

(d) Keep FGIS informed of the personnel status changes and report any requests for work falling outside this SOW to FGIS.

(e) Ensure personnel have readily available, during working hours, a valid FGIS issued license to perform assigned services and that they abide by the plant’s or mill’s safety and sanitation regulations.

3.

Provide official services at the time scheduled by FGIS-FMD or within two hours after receiving non-scheduled request for personnel from FGIS-FMD.

4.

Follow approved official procedures and use only approved equipment for performing official sampling.

5. Report immediately any apparent violation of the AMA, Part 868 regulations, and instruction to the field office according to FGIS Directive 9070.6, Reporting Violation of the U.S. Grain Standards Act and the Agricultural Marketing Act of 1946, as amended.

6. Submit legible reports and documents to locations along with samples within the time frame, and in the manner specified by FGIS-FMD. Notices of irregularities will be documented and presented to contractors for correction whenever program inaccuracies are identified.

(a) Use forms provided by FGIS-FMD to document work.

(b) Complete and sign required reports and inspection forms.

(c) Keep an accurate record of the time inspections begin and finish.

7. Invoice FGIS-FMD for services rendered in response to BPA Call orders.

(a) Submit invoices to FGIS-FMD assigned personnel via email and IPP.GOV. Billing invoices must contain sufficient documentation as determined by FGIS-FMD to support payment. At a minimum, invoices must include information in Paragraph 1.6.2 above.

c. AMS’s, FGIS, Field Management Division personnel are responsible for interpreting specifications; determining appropriate inspection methods and techniques; and developing inspection guidelines, instructions, handbooks, and training aids.

FGIS will:

1.

License personnel determined by FGIS as qualified to perform official sampling and related services. Test potential licensees to determine their skills and abilities. (Information that will be tested is contained in paragraph 2.3 and this SOW.) Issue and renew licenses, in accordance with 7 CFR Part 868 Regulations as supplemented by FGIS-issued instructions and maintaining the licensing database.

2.

Provide the Contractor with the pertinent regulations, instructions, directives and notices; sampling, inspection and weighing procedures and equipment; containers and tags for mailing samples; security containers; FGIS Directive 9070.6, Reporting Violations of the U.S. Grain Standards Act and the Agricultural Marketing Act of 1946; official forms including Form FGIS-110, Bribery Card.

3. Monitor the performance of Contractor in the application of sampling methods and techniques. FGIS-FMD will take the appropriate action if the work performed on its behalf is unacceptable as determined by FGIS-FMD.

4.

Report to the Contracting Officer, if the Contractor is found to be in violation of the AMA and regulations. FGIS will suspend or revoke any license according to applicable regulations when it deems such action to be for the good of USDA.

5.

Pay contractor for performance rendered in response to a BPA service call order. Payment will be based on the BPA pricing schedule and actual service rendered.

6.

Designate service testing laboratories which the contractor may send commodity samples for chemical, physical, and microbiological analysis or inspections. Provide Contractor the location and time of service requests.

7.

Spot check Contractor’s performance to ensure that it is according to contract specifications. The method and frequency of spot checking will be determined by FGIS-FMD and will depend on various factors including the contractor’s performance history, service point workload, distance, and budget constraints.

8.

Ensure that the Contractor understands: inspection and weighing methods and techniques; sampling methods and techniques; how to use handbooks, instructions, sampling plans, forms, and any equipment involved in performing required services; the necessity and procedures for sample, equipment, and inspection data security; that samples must be mailed to the appropriate laboratory in a timely manner; and that they are not employees of the Federal Government and therefore, are not covered by such benefits as health, retirement, vacation, social security, unemployment compensation, workman’s compensation, etc.

2.5

PERFORMANCE

The Contractor shall provide the service when calls are placed against the BPA by the individuals authorized to request services during the contract period of performance.

The Government and Official Agencies are obligated only to the extent of authorized purchases made under the BPA.

2.6

BASIS FOR PAYMENT

The hourly rate for inspection services (includes all services listed in Paragraph 2.2 above) will be paid for services rendered at the service location in response to a BPA service call order.

Hourly rates for official inspection services shall include all costs necessary to perform the services covered under paragraph 2.2, including, but not limited to, transportation, training, licensing, overtime and premium pay, maintaining supplies, securing information, per diem, lodging, administration, and scheduling.

The contractor is responsible, without separate hourly reimbursement, for employee scheduling, re-ordering supplies, protecting equipment/supplies, securing and discarding reserve files, ensuring plant and company personnel meet sanitary requirements, supervising all activities, training in all activities, and maintaining relations with plant management.

a. Hourly rate (one rate) shall cover the following:

1.

Cost of performing service and related administrative costs;

2.

Cost of first-class mail service between contractor and employee;

3.

Cost of overtime and premium pay;

4. Cost of commuting to service location.

b.

Computing hourly rates.

Hourly fees will be assessed in quarter hour increments for:

1.

All services covered by the contract, (hourly rate applies uniformly), whether services are performed singly or combined, payment is based on one hourly rate.

2.

Performance of the requested service, less mealtime. Time worked online at plants and for time worked off-line necessary to facilitate work activities. Off-line hours is specific to preparing paperwork and samples for distribution and delivering samples and paperwork to local mail drop off sites after production is completed. The amount of off-line time allowed for payment is determined by FGIS-FMD based on local assessment of each plant location and production processes.

c.

Application of rates when service is delayed by Plant.

Hourly rates will be paid when:

1. Service has been requested at a specified location;

2.

Contractor’s employee is on duty and ready to provide service but is unable to do so because of a delay by the plant (i.e. equipment breaks down or other plant caused disruptions in production); and

3.

Contractor determines that the Contractor’s employees or licensed subcontractors cannot be used elsewhere or have not been withdrawn or dismissed.

d.

Application of rates when request for service is withdrawn or dismissed.

Hourly fees will be assessed to FGIS for the scheduled service if the request is withdrawn or dismissed after the Contractor’s employee departs for the service point or if the request for service is not withdrawn or dismissed by 2 p.m. of the business day preceding the date of scheduled service. (2-hour minimum) However, hourly fees will not be assessed to FGIS if Contractor’s officials determine that the Contractor’s employee can be used elsewhere or if the Contractor’s employee can be released without cost to the Contractor.

e.

To whom fees are assessed.

Fees for official services including additional fees will be assessed to and paid by FGIS for the service.

1. The number of hours requested to work is not guaranteed; that is, the hours may be fewer than the amount shown in the Call Order.

2. Guaranteed 2-hour minimum payment per call out.

3.

Form FGIS-992, Services Performed Report, must be completed and sent to FGIS each time called to a service location to perform a service. If, upon arrival, there is no work (including standby time), the service location call out and departure times and the phrase 2-hour minimum must be shown in the Comments of Sampler block. If there are fewer than 2 hours of work performed (including standby time), the service location departure time and the phrase 2-hour minimum must be shown in the block.

2.7

PUBLIC RELATIONS

It is essential for all employees of the Contractor, and their licensed subcontractors, to display a positive image of USDA by ensuring that their employees maintain favorable relations with the processed commodity plant or mill and associated staff. Personnel must be courteous in their dealings with facility management. All personnel working for the Contractor must carry identification at all times documenting employment by the Contractor. Work must be performed with due care, taking precautions against damage to property and interference with vehicular or pedestrian traffic. The Contractor must protect against damage to all USDA, commodity loading facility, and associated property. Contractor employees must identify themselves as contractors and not employees of the Federal Government.

2.8

QUALITY ASSURANCE

A.

The government will evaluate the Contractor's performance under this contract. Nonperformance or substandard task performance will be documented when it occurs.

B.

The Government will monitor quality control procedures under this contract. The Contractor will submit a quality control plan before the contract start date. The plan must include methods to be used for identifying and preventing defects in the quality of service performed and records to be kept to document corrective or preventive actions taken. The Contractor must make appropriate modifications and obtain acceptance of the plan by the Contracting Officer before the contract start date.

2.9

CONTRACTOR LIABILITY

The Contractor is liable for any damages, losses, or injuries to people, property, and animals, which occur as a result, directly or indirectly, from work performed by the Contractor’s employees and licensed subcontractors while under contract with USDA-AMS. The Contractor must immediately notify FGIS and the Contracting Officer, of any damages, losses, or injuries occurring during the performance of any contract with USDA.

3.0 WAGE RATES

The Service Contract Act applies to this contract. The Department of Labor Wage rates will be included in the BPA terms for each location and are listed below. The commodity plant is located in:

Scott City, Missouri WD

4.0 CLAUSES AND PROVISIONS

CLAUSES

52.204-18 Commercial and Government Entity Code Maintenance. (Jul 2016) 2.212-4 -- Contract Terms and Conditions -- Commercial Items (Jan 2017) /Alternate 1

5 Alternate I (Jan 2017). When a time-and-materials or labor-hour contract is contemplated, substitute the following paragraphs (a), (e), (i), (l), and (m) for those in the basic clause.

(a) Inspection/Acceptance. (1) The Government has the right to inspect and test all materials furnished and services performed under this contract, to the extent practicable at all places and times, including the period of performance, and in any event before acceptance. The Government may also inspect the plant or plants of the Contractor or any subcontractor engaged in contract performance. The Government will perform inspections and tests in a manner that will not unduly delay the work.

(2) If the Government performs inspection or tests on the premises of the Contractor or a subcontractor, the Contractor shall furnish and shall require subcontractors to furnish all reasonable facilities and assistance for the safe and convenient performance of these duties.

(3) Unless otherwise specified in the contract, the Government will accept or reject services and materials at the place of delivery as promptly as practicable after delivery, and they will be presumed accepted 60 days after the date of delivery, unless accepted earlier.

(4) At any time during contract performance, but not later than 6 months (or such other time as may be specified in the contract) after acceptance of the services or materials last delivered under this contract, the Government may require the Contractor to replace or correct services or materials that at time of delivery failed to meet contract requirements. Except as otherwise specified in paragraph (a)(6) of this clause, the cost of replacement or correction shall be determined under paragraph (i) of this clause, but the “hourly rate” for labor hours incurred in the replacement or correction shall be reduced to exclude that portion of the rate attributable to profit. Unless otherwise specified below, the portion of the “hourly rate” attributable to profit shall be 10 percent. The Contractor shall not tender for acceptance materials and services required to be replaced or corrected without disclosing the former requirement for replacement or correction, and, when required, shall disclose the corrective action taken. [Insert portion of labor rate attributable to profit.]

(5)(i) If the Contractor fails to proceed with reasonable promptness to perform required replacement or correction, and if the replacement or correction can be performed within the ceiling price (or the ceiling price as increased by the Government), the Government may—

(A) By contract or otherwise, perform the replacement or correction, charge to the Contractor any increased cost, or deduct such increased cost from any amounts paid or due under this contract; or

(B) Terminate this contract for cause.

(ii) Failure to agree to the amount of increased cost to be charged to the Contractor shall be a dispute under the Disputes clause of the contract.

(6) Notwithstanding paragraphs (a)(4) and (5) above, the Government may at any time require the Contractor to remedy by correction or replacement, without cost to the Government, any failure by the Contractor to comply with the requirements of this contract, if the failure is due to—

(i) Fraud, lack of good faith, or willful misconduct on the part of the Contractor's managerial personnel; or

(ii) The conduct of one or more of the Contractor’s employees selected or retained by the Contractor after any of the Contractor’s managerial personnel has reasonable grounds to believe that the employee is habitually careless or unqualified.

(7) This clause applies in the same manner and to the same extent to corrected or replacement materials or services as to materials and services originally delivered under this contract.

(8) The Contractor has no obligation or liability under this contract to correct or replace materials and services that at time of delivery do not meet contract requirements, except as provided in this clause or as may be otherwise specified in the contract.

(9) Unless otherwise specified in the contract, the Contractor's obligation to correct or replace Government-furnished property shall be governed by the clause pertaining to Government property.

(e) Definitions. (1) The clause at FAR 52.202-1, Definitions, is incorporated herein by reference. As used in this clause—

(i) Direct materials means those materials that enter directly into the end product, or that are used or consumed directly in connection with the furnishing of the end product or service.

(ii) Hourly rate means the rate(s) prescribed in the contract for payment for labor that meets the labor category qualifications of a labor category specified in the contract that are—

(A) Performed by the contractor;

(B) Performed by the subcontractors; or

(C) Transferred between divisions, subsidiaries, or affiliates of the contractor under a common control.

(iii) Materials means—

(A) Direct materials, including supplies transferred between divisions, subsidiaries, or affiliates of the contractor under a common control;

(B) Subcontracts for supplies and incidental services for which there is not a labor category specified in the contract;

(C) Other direct costs (e.g., incidental services for which there is not a labor category specified in the contract, travel, computer usage charges, etc.);

(D) The following subcontracts for services which are specifically excluded from the hourly rate: [Insert any subcontracts for services to be excluded from the hourly rates prescribed in the schedule.]; and

(E) Indirect costs specifically provided for in this clause.

(iv) Subcontract means any contract, as defined in FAR subpart 2.1, entered into with a subcontractor to furnish supplies or services for performance of the prime contract or a subcontract including transfers between divisions, subsidiaries, or affiliates of a contractor or subcontractor. It includes, but is not limited to, purchase orders, and changes and modifications to purchase orders.

(i) Payments. (1) Work performed. The Government will pay the Contractor as follows upon the submission of commercial invoices approved by the Contracting Officer:

(i) Hourly rate.

(A) The amounts shall be computed by multiplying the appropriate hourly rates prescribed in the contract by the number of direct labor hours performed. Fractional parts of an hour shall be payable on a prorated basis.

(B) The rates shall be paid for all labor performed on the contract that meets the labor qualifications specified in the contract. Labor hours incurred to perform tasks for which labor qualifications were specified in the contract will not be paid to the extent the work is performed by individuals that do not meet the qualifications specified in the contract, unless specifically authorized by the Contracting Officer.

(C) Invoices may be submitted once each month (or at more frequent intervals, if approved by the Contracting Officer) to the Contracting Officer or the authorized representative.

(D) When requested by the Contracting Officer or the authorized representative, the Contractor shall substantiate invoices (including any subcontractor hours reimbursed at the hourly rate in the schedule) by evidence of actual payment, individual daily job timecards, records that verify the employees meet the qualifications for the labor categories specified in the contract, or other substantiation specified in the contract.

(E) Unless the Schedule prescribes otherwise, the hourly rates in the Schedule shall not be varied by virtue of the Contractor having performed work on an overtime basis.

(1) If no overtime rates are provided in the Schedule and the Contracting Officer approves overtime work in advance, overtime rates shall be negotiated.

(2) Failure to agree upon these overtime rates shall be treated as a dispute under the Disputes clause of this contract.

(3) If the Schedule provides rates for overtime, the premium portion of those rates will be reimbursable only to the extent the overtime is approved by the Contracting Officer.

(ii) Materials.

(A) If the Contractor furnishes materials that meet the definition of a commercial item at 2.101, the price to be paid for such materials shall not exceed the Contractor’s established catalog or market price, adjusted to reflect the—

(1) Quantities being acquired; and

(2) Any modifications necessary because of contract requirements.

(B) Except as provided for in paragraph (i)(1)(ii)(A) and (D)(2) of this clause, the Government will reimburse the Contractor the actual cost of materials (less any rebates, refunds, or discounts received by the contractor that are identifiable to the contract) provided the Contractor—

(1) Has made payments for materials in accordance with the terms and conditions of the agreement or invoice; or

(2) Makes these payments within 30 days of the submission of the Contractor’s payment request to the Government and such payment is in accordance with the terms and conditions of the agreement or invoice.

(C) To the extent able, the Contractor shall—

(1) Obtain materials at the most advantageous prices available with due regard to securing prompt delivery of satisfactory materials; and

(2) Give credit to the Government for cash and trade discounts, rebates, scrap, commissions, and other amounts that are identifiable to the contract.

(D) Other Costs. Unless listed below, other direct and indirect costs will not be reimbursed.

(1) Other Direct Costs. The Government will reimburse the Contractor on the basis of actual cost for the following, provided such costs comply with the requirements in paragraph (i)(1)(ii)(B) of this clause: [Insert each element of other direct costs (e.g., travel, computer usage charges, etc. Insert “None” if no reimbursement for other direct costs will be provided. If this is an indefinite delivery contract, the Contracting Officer may insert “Each order must list separately the elements of other direct charge(s) for that order or, if no reimbursement for other direct costs will be provided, insert ‘None’.”]

(2) Indirect Costs (Material Handling, Subcontract Administration, etc.). The Government will reimburse the Contractor for indirect costs on a pro-rata basis over the period of contract performance at the following fixed price: [Insert a fixed amount for the indirect costs and payment schedule. Insert “$0” if no fixed price reimbursement for indirect costs will be provided. (If this is an indefinite delivery contract, the Contracting Officer may insert “Each order must list separately the fixed amount for the indirect costs and payment schedule or, if no reimbursement for indirect costs, insert ‘None’).”]

(2) Total cost. It is estimated that the total cost to the Government for the performance of this contract shall not exceed the ceiling price set forth in the Schedule and the Contractor agrees to use its best efforts to perform the work specified in the Schedule and all obligations under this contract within such ceiling price. If at any time the Contractor has reason to believe that the hourly rate payments and material costs that will accrue in performing this contract in the next succeeding 30 days, if added to all other payments and costs previously accrued, will exceed 85 percent of the ceiling price in the Schedule, the Contractor shall notify the Contracting Officer giving a revised estimate of the total price to the Government for performing this contract with supporting reasons and documentation. If at any time during the performance of this contract, the Contractor has reason to believe that the total price to the Government for performing this contract will be substantially greater or less than the then stated ceiling price, the Contractor shall so notify the Contracting Officer, giving a revised estimate of the total price for performing this contract, with supporting reasons and documentation. If at any time during performance of this contract, the Government has reason to believe that the work to be required in performing this contract will be substantially greater or less than the stated ceiling price, the Contracting Officer will so advise the Contractor, giving the then revised estimate of the total amount of effort to be required under the contract.

(3) Ceiling price. The Government will not be obligated to pay the Contractor any amount in excess of the ceiling price in the Schedule, and the Contractor shall not be obligated to continue performance if to do so would exceed the ceiling price set forth in the Schedule, unless and until the Contracting Officer notifies the Contractor in writing that the ceiling price has been increased and specifies in the notice a revised ceiling that shall constitute the ceiling price for performance under this contract. When and to the extent that the ceiling price set forth in the Schedule has been increased, any hours expended and material costs incurred by the Contractor in excess of the ceiling price before the increase shall be allowable to the same extent as if the hours expended and material costs had been incurred after the increase in the ceiling price.

(4) Access to records. At any time before final payment under this contract, the Contracting Officer (or authorized representative) will have access to the following (access shall be limited to the listing below unless otherwise agreed to by the Contractor and the Contracting Officer):

(i) Records that verify that the employees whose time has been included in any invoice meet the qualifications for the labor categories specified in the contract;

(ii) For labor hours (including any subcontractor hours reimbursed at the hourly rate in the schedule), when timecards are required as substantiation for payment—

(A) The original timecards (paper-based or electronic);

(B) The Contractor’s timekeeping procedures;

(C) Contractor records that show the distribution of labor between jobs or contracts; and

(D) Employees whose time has been included in any invoice for the purpose of verifying that these employees have worked the hours shown on the invoices.

(iii) For material and subcontract costs that are reimbursed on the basis of actual cost—

(A) Any invoices or subcontract agreements substantiating material costs; and

(B) Any documents supporting payment of those invoices.

(5) Overpayments/Underpayments. Each payment previously made shall be subject to reduction to the extent of amounts, on preceding invoices, that are found by the Contracting Officer not to have been properly payable and shall also be subject to reduction for overpayments or to increase for underpayments. The Contractor shall promptly pay any such reduction within 30 days unless the parties agree otherwise. The Government within 30 days will pay any such increases, unless the parties agree otherwise. The Contractor’s payment will be made by check. If the Contractor becomes aware of a duplicate invoice payment or that the Government has otherwise overpaid on an invoice payment, the Contractor shall—

(i) Remit the overpayment amount to the payment office cited in the contract along with a description of the overpayment including the—

(A) Circumstances of the overpayment (e.g., duplicate payment, erroneous payment, liquidation errors, date(s) of overpayment);

(B) Affected contract number and delivery order number, if applicable;

(C) Affected line item or subline item, if applicable; and

(D) Contractor point of contact.

(ii) Provide a copy of the remittance and supporting documentation to the Contracting Officer.

(6)(i) All amounts that become payable by the Contractor to the Government under this contract shall bear simple interest from the date due until paid unless paid within 30 days of becoming due. The interest rate shall be the interest rate established by the Secretary of the Treasury, as provided in 41 U.S.C. 7109, which is applicable to the period in which the amount becomes due, and then at the rate applicable for each six month period as established by the Secretary until the amount is paid.

(ii) The Government may issue a demand for payment to the Contractor upon finding a debt is due under the contract.

(iii) Final Decisions. The Contracting Officer will issue a final decision as required by 33.211 if—

(A) The Contracting Officer and the Contractor are unable to reach agreement on the existence or amount of a debt in a timely manner;

(B) The Contractor fails to liquidate a debt previously demanded by the Contracting Officer within the timeline specified in the demand for payment unless the amounts were not repaid because the Contractor has requested an installment payment agreement; or

(C) The Contractor requests a deferment of collection on a debt previously demanded by the Contracting Officer (see FAR 32.607-2).

(iv) If a demand for payment was previously issued for the debt, the demand for payment included in the final decision shall identify the same due date as the original demand for payment.

(v) Amounts shall be due at the earliest of the following dates:

(A) The date fixed under this contract.

(B) The date of the first written demand for payment, including any demand for payment resulting from a default termination.

(vi) The interest charge shall be computed for the actual number of calendar days involved beginning on the due date and ending on—

(A) The date on which the designated office receives payment from the Contractor;

(B) The date of issuance of a Government check to the Contractor from which an amount otherwise payable has been withheld as a credit against the contract debt; or

(C) The date on which an amount withheld and applied to the contract debt would otherwise have become payable to the Contractor.

(vii) The interest charge made under this clause may be reduced under the procedures prescribed in 32.608-2 of the Federal Acquisition Regulation in effect on the date of this contract.

(viii) Upon receipt and approval of the invoice designated by the Contractor as the “completion invoice” and supporting documentation, and upon compliance by the Contractor with all terms of this contract, any outstanding balances will be paid within 30 days unless the parties agree otherwise. The completion invoice, and supporting documentation, shall be submitted by the Contractor as promptly as practicable following completion of the work under this contract, but in no event later than 1 year (or such longer period as the Contracting Officer may approve in writing) from the date of completion.

(7) Release of claims. The Contractor, and each assignee under an assignment entered into under this contract and in effect at the time of final payment under this contract, shall execute and deliver, at the time of and as a condition precedent to final payment under this contract, a release discharging the Government, its officers, agents, and employees of and from all liabilities, obligations, and claims arising out of or under this contract, subject only to the following exceptions.

(i) Specified claims in stated amounts, or in estimated amounts if the amounts are not susceptible to exact statement by the Contractor.

(ii) Claims, together with reasonable incidental expenses, based upon the liabilities of the Contractor to third parties arising out of performing this contract, that are not known to the Contractor on the date of the execution of the release, and of which the Contractor gives notice in writing to the Contracting Officer not more than 6 years after the date of the release or the date of any notice to the Contractor that the Government is prepared to make final payment, whichever is earlier.

(iii) Claims for reimbursement of costs (other than expenses of the Contractor by reason of its indemnification of the Government against patent liability), including reasonable incidental expenses, incurred by the Contractor under the terms of this contract relating to patents.

(8) Prompt payment. The Government will make payment in accordance with the Prompt Payment Act (31 U.S.C. 3903) and prompt payment regulations at 5 CFR part 1315.

(9) Electronic Funds Transfer (EFT). If the Government makes payment by EFT, see 52.212-5(b) for the appropriate EFT clause.

(10) Discount. In connection with any discount offered for early payment, time shall be computed from the date of the invoice. For the purpose of computing the discount earned, payment shall be considered to have been made on the date that appears on the payment check or the specified payment date if an electronic funds transfer payment is made.

(l) Termination for the Government’s convenience. The Government reserves the right to terminate this contract, or any part hereof, for its sole convenience. In the event of such termination, the Contractor shall immediately stop all work hereunder and shall immediately cause any and all of its suppliers and subcontractors to cease work. Subject to the terms of this contract, the Contractor shall be paid an amount for direct labor hours (as defined in the Schedule of the contract) determined by multiplying the number of direct labor hours expended before the effective date of termination by the hourly rate(s) in the contract, less any hourly rate payments already made to the Contractor plus reasonable charges the Contractor can demonstrate to the satisfaction of the Government using its standard record keeping system that…