Atch 3 - Prototype and Follow-on Production Articles.pdf

Prototype & Follow-on Production Articles:

Inspection/Acceptance shall occur at Arnold Air Force Base, TN:

The Contractor shall only tender for acceptance of those items that conform to the requirements of this agreement.

The Government reserves the right to inspect or test any supplies or services that have been tendered for acceptance. The Government may require repair or replacement of nonconforming supplies or reperformance of nonconforming services at no increase in agreement price. If repair/replacement or reperformance will not correct the defects or is not possible, the Government may seek an equitable price reduction or adequate consideration for acceptance of nonconforming supplies or services. The Government must exercise its post-acceptance rights-

(1) Within a reasonable time after the defect was discovered or should have been discovered;

and

(2) Before any substantial change occurs in the condition of the item, unless the change is due to the defect in the item.

Assignment:

The Contractor or its assignee may assign its rights to receive payment due as a result of performance of this agreement to a bank, trust company, or other financing institution, including any Federal lending agency in accordance with the Assignment of Claims Act (). However, when a third party makes payment, the Contractor may not assign its rights to receive payment under this agreement.

Changes / Modifications:

Changes in the terms and conditions of this agreement may be made only by written agreement of the parties. Administrative changes may be executed unilaterally by the Government.

Conflict Resolution:

Failure of the parties in this agreement to reach a mutually agreed upon solution on any request for equitable adjustment, claim, appeal or action arising under or relating to this agreement shall be a conflict to be resolved between the Agreements Officer / AEDC Legal Team & Vendor Project Manager / Vendor Legal Team.

If the conflict cannot be resolved internally by the aforementioned parties, then the conflict shall be resolved through mediation and/or arbitration. The arbitrator and mitigator will be mutually agreed on by both parties.

If the conflict cannot be resolved through the aforementioned resolution methods, the conflict shall be resolved through litigation and in accordance with Tennessee law.

The Contractor shall proceed diligently with performance of this agreement, pending final resolution of any conflict arising under the agreement.

Force Majeure:

The Contractor shall be liable for default unless nonperformance is caused by an occurrence beyond the reasonable control of the Contractor and without its fault or negligence such as, acts of God or the public enemy, acts of the Government in either its sovereign or agreement capacity, fires, floods, epidemics, quarantine restrictions, strikes, unusually severe weather, and delays of common carriers. The contractor shall notify the

Agreements Officer in writing as soon as it is reasonably possible after the commencement of any delay, setting forth the full particulars in connection therewith, shall remedy such occurrence with all reasonable dispatch, and shall promptly give written notice to the Agreements Officer of the cessation of such occurrence.

Invoicing:

The contractor shall submit invoices through Wide Area Workflow (WAWF), and incorporate the data from the table below:

Invoice Type: Combo

Pay Official DoDAAC: F03000

Issue By DoDAAC: FA9101

Admin DoDAAC: FA9101

Inspect By DoDAAC: To Be Determined

Ship To Code: FY1476

WAWF POC:

Contact the WAWF helpdesk at 866-618-5988, if assistance is needed.

Patent Indemnity:

The Contractor shall indemnify the Government and its officers, employees and agents against liability, including costs, for actual or alleged direct or contributory infringement of, or inducement to infringe, any United States or foreign patent, trademark or copyright, arising out of the performance of this agreement, provided the Contractor is reasonably notified of such claims and proceedings.

Payment:

*Payment Terms: Net 30 Days

(1) Items accepted. Payment shall be made for items accepted by the Government that have been delivered to the delivery destinations set forth in this agreement.

(2) 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 which appears on the payment check or the specified payment date if an electronic funds transfer payment is made.

(3) Overpayments. If the Contractor becomes aware of a duplicate invoice payment or that the

Government has otherwise overpaid on invoice payment, the Contractor shall-

(i) Remit the overpayment amount to the payment office cited in the agreement 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 agreement number;

(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 Agreements

Officer.

(4) Interest.

(i) All amounts that become payable by the Contractor to the Government under this agreement 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 which is applicable to the period in which the amount becomes due, and then at the rate applicable for each six-month period as fixed 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 agreement.

(iii) Final decisions. The Agreements Officer will issue a final decision if–

(A) The Agreements Officer and the Contractor are unable to reach agreement on the existence or amount of a debt within 30 days;

(B) The Contractor fails to liquidate a debt previously demanded by the

Agreements 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 Agreements Officer.

(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 agreement.

(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 agreement debt; or

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

(vii) The interest charge made may be reduced in effect on the date of this agreement.

Risk of Loss:

Unless the agreement specifically provides otherwise, risk of loss or damage to the supplies provided under this agreement shall remain with the Contractor until, and shall pass to the Government upon:

(1) Delivery of the supplies to the Government at f.o.b destination, Arnold Air Force Base, TN as specified in the agreement.

Taxes:

The total evaluated agreement price shall include all applicable Federal, State, and local taxes and duties.

Termination for the Government’s Convenience:

The Government reserves the right to terminate this agreement, 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 agreement, the Contractor shall be paid a percentage of the agreement price reflecting the percentage of the work performed prior to the notice of termination, plus reasonable charges the Contractor can demonstrate to the satisfaction of the

Government using its standard record keeping system, have resulted from the termination. The Contractor shall not be required to comply with the cost accounting standards or agreement cost principles for this purpose. This paragraph does not give the Government any right to audit the Contractor’s records. The Contractor shall not be paid for any work performed or costs incurred which reasonably could have been avoided.

Termination for Cause:

The Government may terminate this agreement, or any part hereof, for cause in the event of any default by the

Contractor, or if the Contractor fails to comply with any agreement terms and conditions, or fails to provide the

Government, upon request, with adequate assurances of future performance. In the event of termination for cause, the Government shall not be liable to the Contractor for any amount for supplies or services not accepted, and the

Contractor shall be liable to the Government for any and all rights and remedies provided by law. If it is determined that the Government improperly terminated this agreement for default, such termination shall be deemed a termination for convenience.

Title:

Unless specified elsewhere in this agreement, title to items furnished under this agreement shall pass to the Government upon acceptance, regardless of when or where the Government takes physical possession.

Warranty:

The Contractor warrants and implies that the items delivered hereunder are merchantable and are fit for use for the particular purpose described in this agreement.

Limitation of Liability:

The Contractor will not be liable to the Government for consequential damages resulting from any defect or deficiencies after agreement deliverables are accepted by the Government.

Other Compliances:

The Contractor shall comply with all applicable Federal, State and local laws, executive orders, rules and regulations applicable to its performance under this agreement.

Compliance with laws unique to Government Agreements:

The Contractor agrees to comply with 31 U.S.C. 1352 relating to limitations on the use of appropriated funds to influence certain Federal agreements; 18 U.S.C. 431 relating to officials not to benefit; 40 U.S.C. chapter 37, Agreement Work Hours and Safety Standards; 41 U.S.C. chapter 87, Kickbacks; 49 U.S.C. 40118, Fly American;

and 41 U.S.C. chapter 21 relating to procurement integrity.

Unauthorized Obligations:

(u) Unauthorized Obligations. (1) Except as stated in paragraph (u)(2) of this article, when any supply or service acquired under this agreement is subject to any End User License Agreement

(EULA), Terms of Service (TOS), or similar legal instrument or agreement, that includes any article requiring the Government to indemnify the Contractor or any person or entity for damages, costs, fees, or any other loss or liability that would create an Anti-Deficiency Act violation (31

U.S.C. 1341), the following shall govern:

(v) Any such article is unenforceable against the Government.

(ii) Neither the Government nor any Government authorized end user shall be deemed to have agreed to such article by virtue of it appearing in the EULA, TOS, or similar legal instrument or agreement. If the EULA, TOS, or similar legal instrument or agreement is invoked through an "I agree" click box or other comparable mechanism (e.g., "click-wrap" or "browse-wrap" agreements), execution does not bind the Government or any Government authorized end user to such article.

(iii) Any such article is deemed to be stricken from the EULA, TOS, or similar legal instrument or agreement.

(2) Paragraph (u)(1) of this article does not apply to indemnification by the Government that is expressly authorized by statute and specifically authorized under applicable agency regulations and procedures.

Incorporation by Reference:

The Contractor’s representations and certifications, including those completed electronically via the System for

Award Management (SAM), are incorporated by reference into the agreement.

Limitation of Government’s Obligation:

(a) This agreement may be incrementally funded. For this/these item(s), the sum of $ [TBD] of the total price is presently available for payment and allotted to this agreement.

(b) For item(s) identified in paragraph (a), the Contractor agrees to perform up to the point at which the total amount payable by the Government, including reimbursement in the event of termination of those item(s) for the Government’s convenience, approximates the total amount currently allotted to the agreement. The Contractor is not authorized to continue work on those item(s) beyond that point. The Government will not be obligated in any event to reimburse the Contractor in excess of the amount allotted to the agreement for those item(s) regardless of anything to the contrary in the term entitled “Termination for Convenience of the Government.” As used in this term, the total amount payable by the Government in the event of termination of applicable agreement line item(s) for convenience includes costs, profit, and estimated termination settlement costs for those item(s).

(c) Notwithstanding the dates specified in the allotment schedule in paragraph (j), the Contractor will notify the Agreements Officer in writing at least ninety days prior to the date when, in the

Contractor’s best judgment, the work will reach the point at which the total amount payable by the

Government, including any cost for termination for convenience, will approximate 85 percent of the total amount then allotted to the agreement for performance of the applicable item(s). The notification will state (1) the estimated date when that point will be reached and (2) an estimate of additional funding, if any, needed to continue performance of applicable line items up to the next scheduled date for allotment of funds identified in paragraph (j), or to a mutually agreed upon substitute date. The notification will also advise the Agreements Officer of the estimated amount of additional funds that will be required for the timely performance of the item(s) funded pursuant to this term, for a subsequent period as may be specified in the allotment schedule in paragraph (j) or otherwise agreed to by the parties. If after such notification additional funds are not allotted by the date identified in the Contractor’s notification, or by an agreed substitute date, the Agreements

Officer will terminate any item(s) for which additional funds have not been allotted, pursuant to this agreement entitled “Termination for Convenience of the Government.”

(d) When additional funds are allotted for continued performance of the agreement line item(s) identified in paragraph (a), the parties will agree as to the period of agreement performance which will be covered by the funds. The provisions of paragraphs (b) through (d) will apply in like manner to the additional allotted funds and agreed substitute date, and the agreement will be modified accordingly.

(e) If, solely by reason of failure of the Government to allot additional funds, by the dates indicated below, in amounts sufficient for timely performance of the agreement line item(s) identified in paragraph (a), the Contractor incurs additional costs or is delayed in the performance of the work under this agreement and if additional funds are allotted, an equitable adjustment will be made in the price or prices (including appropriate target, billing, and ceiling prices where applicable) of the item(s), or in the time of delivery, or both. Failure to agree to any such equitable adjustment hereunder will be a conflict concerning a question of fact within the meaning of conflict resolution as detailed above.

(f) The Government may at any time prior to termination allot additional funds for the performance of the agreement line item(s) identified in paragraph (a).

(g) The termination provisions do not limit the rights of the Government entitled “Default.” The provisions are limited to the work and allotment of funds for the agreement line item(s) set forth in paragraph (a). This longer applies once the agreement is fully funded except with regard to the rights or obligations of the parties concerning equitable adjustments negotiated under paragraphs

(d) and (e).

(h) Nothing affects the right of the Government to terminate this agreement pursuant of this agreement entitled “Termination for Convenience of the Government.”

(i) Nothing shall be construed as authorization of voluntary services whose acceptance is otherwise prohibited under 31 U.S.C.

Data Rights:

The vendor shall grant specified Data Rights to the U.S. Air Force for all data and information specifically negotiated in the other transaction prototype award.

Stop Work Order:

The AO may, at any time, by written order to the vendor, require the vendor to stop all, or any part, of the work called for by this Agreement. The order shall be specifically identified as a stop-work order issued under this article. Upon receipt of the order, the vendor shall immediately comply with its terms and take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the order during the period of work stoppage. Upon conclusion of the stop-work order, the AO shall either:

a. Cancel the stop-work order; or

b. Terminate the work

If a stop-work order issued under this Article is rescinded, the vendor shall resume work immediately. The AO may make an adjustment in the delivery schedule or Milestone and Payment Schedule, or both, and the Agreement shall be modified, in writing, accordingly, if-

a. The stop-work order results in an increase in the time required for, or in the vendor cost associated with the performance of any part of this Agreement; and

b. The vendor may assert its right to the adjustment within 30 days after the end of the period of work stoppage; provided, that, if the AO decides the facts justify the action, the AO may receive and act upon the claim submitted at any time before final payment under this

Agreement.

If a stop-work order is not canceled and the work covered by the order is terminated, the Parties will act in good faith to negotiate a settlement that accounts for work already performed and other appropriate costs and deliverables. Conflict resolution regarding settlement will be resolved in accordance with procedures outlined in the Conflict Resolution of this agreement.

F.o.b Destination:

(a) The term "f.o.b. destination," means-

(1) Free of expense to the Government, on board the carrier’s conveyance, at a specified delivery point where the consignee’s facility (plant, warehouse, store, lot, or other location to which shipment can be made) is located; and

(2) Supplies shall be delivered to the destination consignee’s wharf (if destination is a port city and supplies are for export), warehouse unloading platform, or receiving dock, at the expense of the Contractor. The Government shall not be liable for any delivery, storage, demurrage, accessorial, or other charges involved before the actual delivery (or "constructive placement" as defined in carrier tariffs) of the supplies to the destination, unless such charges are caused by an act or order of the Government acting in its agreement capacity. If rail carrier is used, supplies shall be delivered to the specified unloading platform of the consignee. If motor carrier (including

"piggyback") is used, supplies shall be delivered to truck tailgate at the unloading platform of the consignee, except when the supplies delivered meet the requirements of Item568 of the National

Motor Freight Classification for "heavy or bulky freight." When supplies meeting the requirements of the referenced Item568 are delivered, unloading (including movement to the tailgate) shall be performed by the consignee, with assistance from the truck driver, if requested. If the contractor uses rail carrier or freight forwarded for less than carload shipments, the contractor shall ensure that the carrier will furnish tailgate delivery, when required, if transfer to truck is required to complete delivery to consignee.

(b) The Contractor shall-

(1) (i) Pack and mark the shipment to comply with agreement specifications; or

(ii) In the absence of specifications, prepare the shipment in conformance with carrier requirements;

(2) Prepare and distribute commercial bills of lading;

(3) Deliver the shipment in good order and condition to the point of delivery specified in the agreement;

(4) Be responsible for any loss of and/or damage to the goods occurring before receipt of the shipment by the consignee at the delivery point specified in the agreement;

(5) Furnish a delivery schedule and designate the mode of delivering carrier; and

(6) Pay and bear all charges to the specified point of delivery.

Defense Priorities and Allocation System (DPAS):

This is a rated agreement certified for national defense, emergency preparedness, and energy program use, and the Contractor shall follow all the requirements of the Defense Priorities and Allocations System regulation (15

CFR 700).

System for Award Management:

(a) Definitions. As used in this provision—

"Electronic Funds Transfer (EFT) indicator means a four-character suffix to the unique entity identifier. The suffix is assigned at the discretion of the commercial, nonprofit, or Government entity to establish additional System for

Award Management records for identifying alternative EFT accounts (see subpart 32.11) for the same entity.

Registered in the System for Award Management (SAM) means that–

(1) The Offeror has entered all mandatory information, including the unique entity identifier and the EFT indicator, if applicable, the Commercial and Government Entity (CAGE) code, as well as data required by the Federal Funding Accountability and Transparency Act of

2006 (see subpart 4.14) into SAM

(2) The offeror has completed the Core, Assertions, and Representations and

Certifications, and Points of Contact sections of the registration in SAM;

(3) The Government has validated all mandatory data fields, to include validation of the

Taxpayer Identification Number (TIN) with the Internal Revenue Service (IRS). The offeror will be required to provide consent for TIN validation to the Government as a part of the SAM registration process; and

(4) The Government has marked the record "Active".

Unique entity identifier means a number or other identifier used to identify a specific commercial, nonprofit, or

Government entity. See for the designated entity for establishing unique entity identifiers.

(b) (1) An Offeror is required to be registered in SAM when submitting an offer or quotation, and shall continue to be registered until time of award, during performance, and through final payment of any agreement, basic agreement, basic ordering agreement, or blanket purchasing agreement resulting from this solicitation.

(2) The Offeror shall enter, in the block with its name and address on the cover page of its offer, the annotation

"Unique Entity Identifier" followed by the unique entity identifier that identifies the Offeror's name and address exactly as stated in the offer. The Offeror also shall enter its EFT indicator, if applicable. The unique entity identifier will be used by the Agreements Officer to verify that the Offeror is registered in the SAM.

(c) If the Offeror does not have a unique entity identifier, it should contact the entity designated at for establishment of the unique entity identifier directly to obtain one. The Offeror should be prepared to provide the following information:

(1) Company legal business name.

(2) Tradestyle, doing business, or other name by which your entity is commonly recognized.

(3) Company physical street address, city, state, and Zip Code.

(4) Company mailing address, city, state and Zip Code (if separate from physical).

(5) Company telephone number.

(6) Date the company was started.

(7) Number of employees at your location.

(8) Chief executive officer/key manager.

(9) Line of business (industry).

(10) Company headquarters name and address (reporting relationship within your entity).

(d) Processing time should be taken into consideration when registering. Offerors who are not registered in SAM should consider applying for registration immediately upon receipt of this solicitation. See https://ww.sam.gov for information on registration

Joint Certification Program:

The vendor shall be registered in the Joint Certification Program via to receive documentation other than Distribution A.

Notice of NIST SP 800-171 DoD Assessment Requirements:

(a) Definitions.

Basic Assessment” means a contractor’s self-assessment of the contractor’s implementation of NIST SP 800-

171 that—

(1) Is based on the Contractor’s review of their system security plan(s) associated with covered contractor information system(s);

(2) Is conducted in accordance with the NIST SP 800-171 DoD Assessment Methodology; and

(3) Results in a confidence level of “Low” in the resulting score, because it is a self-generated score.

“Covered contractor information system” has the meaning given in the article 252.204-7012, Safeguarding

Covered Defense Information and Cyber Incident Reporting, of this agreement.

“High Assessment” means an assessment that is conducted by Government personnel using NIST SP 800-171A, Assessing Security Requirements for Controlled Unclassified Information that—

(1) Consists of—

(i) A review of a contractor’s Basic Assessment;

(ii) A thorough document review;

(iii) Verification, examination, and demonstration of a Contractor’s system security plan to validate that NIST SP 800- 171 security requirements have been implemented as described in the contractor’s system security plan; and

(iv) Discussions with the contractor to obtain additional information or clarification, as needed; and

(2) Results in a confidence level of “High” in the resulting score.

“Medium Assessment” means an assessment conducted by the Government that—

(1) Consists of—

(i) A review of a contractor’s Basic Assessment;

(ii) A thorough document review; and

(iii) Discussions with the contractor to obtain additional information or clarification, as needed; and

(2) Results in a confidence level of “Medium” in the resulting score.

(b) Applicability. This applies to covered contractor information systems that are required to comply with the National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171, in accordance with Defense Federal Acquisition Regulation System (DFARS) article at 252.204-

7012, Safeguarding Covered Defense Information and Cyber Incident Reporting, of this agreement.

(c) Requirements. The Contractor shall provide access to its facilities, systems, and personnel necessary for the Government to conduct a Medium or High NIST SP 800–171 DoD Assessment, as described in NIST SP 800–171 DoD Assessment Methodology at https Assessment-

Methodology-Version-1.2.1-6.24.2020.pdf , if necessary.

(d) Procedures. Summary level scores for all assessments will be posted in the Supplier Performance

Risk System (SPRS) () to provide DoD Components visibility into the summary level scores of strategic assessments.

(1) Basic Assessments. A contractor may submit, via encrypted email, summary level scores of Basic

Assessments conducted in accordance with the NIST SP 800-171 DoD Assessment Methodology to for posting to SPRS.

(i) The email shall include the following information:

(A) Version of NIST SP 800-171 against which the assessment was conducted.

(B) Organization conducting the assessment (e.g., Contractor self-assessment).

(C) For each system security plan (security requirement 3.12.4) supporting the performance of a DoD agreement—

(1) All industry Commercial and Government Entity (CAGE) code(s) associated with the information system(s) addressed by the system security plan; and

(2) A brief description of the system security plan architecture, if more than one plan exists.

(D) Date the assessment was completed.

(E) Summary level score (e.g., 95 out of 110, NOT the individual value for each requirement).

(F) Date that all requirements are expected to be implemented (i.e., a score of 110 is expected to be achieved) based on information gathered from associated plan(s) of action developed in accordance with NIST SP 800-171.

(ii) If multiple system security plans are addressed in the email described at paragraph (b)(1)(i) of this section, the Contractor shall use the following format for the report:

System Security Plan

CAGE Codes supported by this plan

Brief description of the plan architecture Date of assessment

Total Score

Date score of 110 will achieved

(2) Medium and High Assessments. DoD will post the following Medium and/or High Assessment summary level scores to SPRS for each system security plan assessed:

(i) The standard assessed (e.g., NIST SP 800-171 Rev 1).

(ii) Organization conducting the assessment, e.g., DCMA, or a specific organization (identified by

Department of Defense Activity Address Code (DoDAAC)).

(iii) All industry CAGE code(s) associated with the information system(s) addressed by the system security plan.

(iv) A brief description of the system security plan architecture, if more than one system security plan exists.

(v) Date and level of the assessment, i.e., medium or high.

(vi) Summary level score (e.g., 105 out of 110, not the individual value assigned for each requirement).

(vii) Date that all requirements are expected to be implemented (i.e., a score of 110 is expected to be achieved) based on information gathered from associated plan(s) of action developed in accordance with NIST SP 800-171.

(e) Rebuttals.

(1) DoD will provide Medium and High Assessment summary level scores to the Contractor and offer the opportunity for rebuttal and adjudication of assessment summary level scores prior to posting the summary level scores to SPRS (see SPRS User’s Guide https:

(2) Upon completion of each assessment, the contractor has 14 business days to provide additional information to demonstrate that they meet any security requirements not observed by the assessment team or to rebut the findings that may be of question.

(f) Accessibility.

(1) Assessment summary level scores posted in SPRS are available to DoD personnel, and are protected, in accordance with the standards set forth in DoD Instruction 5000.79, Defense-wide Sharing and

Use of Supplier and Product Performance Information (PI).

(2) Authorized representatives of the Contractor for which the assessment was conducted may access

SPRS to view their own summary level scores, in accordance with the SPRS Software User’s

Guide for Awardees/Contractors available at .

(3) A High NIST SP 800-171 DoD Assessment may result in documentation in addition to that listed in this article. DoD will retain and protect any such documentation as “Controlled Unclassified

Information (CUI)” and intended for internal DoD use only. The information will be protected against unauthorized use and release, including through the exercise of applicable exemptions under the Freedom of Information Act (e.g., Exemption 4 covers trade secrets and commercial or financial information obtained from a contractor that is privileged or confidential).

(g) Subagreements.

(1) The Contractor shall insert the substance of this article, including this paragraph (g), in all subagreements and other agreement instruments, including subagreements for the acquisition of commercial products or commercial services (excluding commercially available off-the-shelf).

(2) The Contractor shall not award a subagreement or other agreement instrument, that is subject to the implementation of NIST SP 800–171 security requirements, in accordance with DFARS article

252.204–7012 of this agreement, unless the subcontractor has completed, within the last 3 years, at least a Basic NIST SP 800–171 DoD Assessment, as described in https:// Methodology-Version-

1.2.1-6.24.2020.pdf , for all covered contractor information systems relevant to its offer that are not part of an information technology service or system operated on behalf of the Government.

(3) If a subcontractor does not have summary level scores of a current NIST SP 800-171 DoD

Assessment (i.e., not more than 3 years old unless a lesser time is specified in the solicitation) posted in SPRS, the subcontractor may conduct and submit a Basic Assessment, in accordance with the NIST SP 800-171 DoD Assessment Methodology, to for posting to SPRS along with the information required by paragraph (d) of this article.

Trade Agreements:

(a) Definitions. “Designated country end product,” “nondesignated country end product,” “qualifying country end product,” and “U.S.-made end product” as used in this provision have the meanings given in the Trade Agreements— Basic article of this solicitation.

(b) Evaluation. The Government—

(1) Will evaluate offers in accordance with the policies and procedures of Part 225 of the Defense

Federal Acquisition Regulation Supplement; and

(2) Will consider only offers of end products that are U.S.-made, qualifying country, or designated country end products unless—

(i) There are no offers of such end products;

(ii) The offers of such end products are insufficient to fulfill the Government’s requirements; or

(iii) A national interest waiver has been granted.

(c) Certification and identification of country of origin.

Qualifying Country Sources As Subcontractors:

(a) Definition. “Qualifying country,” as used in this article, means a country with a reciprocal defense procurement memorandum of understanding or international agreement with the United States in which both countries agree to remove barriers to purchases of supplies produced in the other country or services performed by sources of the other country, and the memorandum or agreement complies, where applicable, with the requirements of section 36 of the Arms Export Control Act

(22 U.S.C. 2776) and with 10 U.S.C. 2457. Accordingly, the following are qualifying countries:

Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Germany, Greece, Israel, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom of Great Britain and Northern Ireland.

Safeguarding Covered Defense Information and Cyber Incident Reporting:

(a) Definitions. As used in this article—

“Adequate security” means protective measures that are commensurate with the consequences and probability of loss, misuse, or unauthorized access to, or modification of information.

“Compromise” means disclosure of information to unauthorized persons, or a violation of the security policy of a system, in which unauthorized intentional or unintentional disclosure, modification, destruction, or loss of an object, or the copying of information to unauthorized media may have occurred.

“Contractor attributional/proprietary information” means information that identifies the contractor(s), whether directly or indirectly, by the grouping of information that can be traced back to the contractor(s) (e.g., program description, facility locations), personally identifiable information, as well as trade secrets, commercial or financial information, or other commercially sensitive information that is not customarily shared outside of the company.

“Controlled technical information” means technical information with military or space application that is subject to controls on the access, use, reproduction, modification, performance, display, release, disclosure, or dissemination. Controlled technical information would meet the criteria, if disseminated, for distribution statements B through F using the criteria set forth in DoD Instruction 5230.24, Distribution Statements on

Technical Documents. The term does not include information that is lawfully publicly available without restrictions.

“Covered contractor information system” means an unclassified information system that is owned, or operated by or for, a contractor and that processes, stores, or transmits covered defense information.

“Covered defense information” means unclassified controlled technical information or other information, as described in the Controlled Unclassified Information (CUI) Registry at that requires safeguarding or dissemination controls pursuant to and consistent with law, regulations, and Governmentwide policies, and is—

(1) Marked or otherwise identified in the agreement, milestone, task order, or delivery order and provided to the contractor by or on behalf of DoD in support of the performance of the agreement;

or

(2) Collected, developed, received, transmitted, used, or stored by or on behalf of the contractor in support of the performance of the agreement.

“Cyber incident” means actions taken through the use of computer networks that result in a compromise or an actual or potentially adverse effect on an information system and/or the information residing therein.

“Forensic analysis” means the practice of gathering, retaining, and analyzing computer-related data for investigative purposes in a manner that maintains the integrity of the data.

“Information system” means a discrete set of information resources organized for the collection, processing, maintenance, use, sharing, dissemination, or disposition of information.

“Malicious software” means computer software or firmware intended to perform an unauthorized process that will have adverse impact on the confidentiality, integrity, or availability of an information system. This definition includes a virus, worm, Trojan horse, or other code-based entity that infects a host, as well as spyware and some forms of adware.

“Media” means physical devices or writing surfaces including, but is not limited to, magnetic tapes, optical disks, magnetic disks, large-scale integration memory chips, and printouts onto which covered defense information is recorded, stored, or printed within a covered contractor information system.

‘‘Operationally critical support’’ means supplies or services designated by the Government as critical for airlift, sealift, intermodal transportation services, or logistical support that is essential to the mobilization, deployment, or sustainment of the Armed Forces in a contingency operation.

“Rapidly report” means within 72 hours of discovery of any cyber incident.

“Technical information” means technical data or computer software, as those terms are defined in the article at

DFARS 252.227-7013, Rights in Technical Data—Other Than Commercial Products and Commercial Services, regardless of whether or not the article is incorporated in this solicitation or agreement. Examples of technical information include research and engineering data, engineering drawings, and associated lists, specifications, standards, process sheets, manuals, technical reports, technical orders, catalog-item identifications, data sets, studies and analyses and related information, and computer software executable code and source code.

(b) Adequate security. The Contractor shall provide adequate security on all covered contractor information systems. To provide adequate security, the Contractor shall implement, at a minimum, the following information security protections:

(1) For covered contractor information systems that are part of an Information Technology (IT) service or system operated on behalf of the Government, the following security requirements apply:

(i) Cloud computing services shall be subject to the security requirements specified in the article

252.239-7010 , Cloud Computing Services, of this agreement.

(ii) Any other such IT service or system (i.e., other than cloud computing) shall be subject to the security requirements specified elsewhere in this agreement.

(2) For covered contractor information systems that are not part of an IT service or system operated on behalf of the Government and therefore are not subject to the security requirement specified at paragraph (b)(1) of this article, the following security requirements apply:

(i) Except as provided in paragraph (b)(2)(ii) of this article, the covered contractor information system shall be subject to the security requirements in National Institute of Standards and Technology

(NIST) Special Publication (SP) 800- 171, “Protecting Controlled Unclassified Information in

Nonfederal Information Systems and Organizations” (available via the internet at in effect at the time the solicitation is issued or as authorized by the Agreements Officer.

(ii)(A) The Contractor shall implement NIST SP 800-171, as soon as practical, but not later than December 31, 2017. For all agreements awarded prior to October 1, 2017, the Contractor shall notify the DoD Chief Information

Officer (CIO), via email at within 30 days of agreement award, of any security requirements specified by NIST

SP 800-171 not implemented at the time of agreement award.

(B) The Contractor shall submit requests to vary from NIST SP 800-171 in writing to the Agreements

Officer, for consideration by the DoD CIO. The Contractor need not implement any security requirement adjudicated by an authorized representative of the DoD CIO to be nonapplicable or to have an alternative, but equally effective, security measure that may be implemented in its place.

(C) If the DoD CIO has previously adjudicated the contractor’s requests indicating that a requirement is not applicable or that an alternative security measure is equally effective, a copy of that approval shall be provided to the Agreements Officer when requesting its recognition under this agreement.

(D) If the Contractor intends to use an external cloud service provider to store, process, or transmit any covered defense information in performance of this agreement, the Contractor shall require and ensure that the cloud service provider meets security requirements equivalent to those established by the Government for the Federal Risk and Authorization Management Program (FedRAMP)

Moderate baseline (https and that the cloud service provider complies with requirements in paragraphs (c) through (g) of this article for cyber incident reporting, malicious software, media preservation and protection, access to additional information and equipment necessary for forensic analysis, and cyber incident damage assessment.

(3) Apply other information systems security measures when the Contractor reasonably determines that information systems security measures, in addition to those identified in paragraphs (b)(1) and

(2) of this article, may be required to provide adequate security in a dynamic environment or to accommodate special circumstances (e.g., medical devices) and any individual, isolated, or temporary deficiencies based on an assessed risk or vulnerability. These measures may be addressed in a system security plan.

(c) Cyber incident reporting requirement.

(1) When the Contractor discovers a cyber incident that affects a covered contractor information system or the covered defense information residing therein, or that affects the contractor’s ability to perform the requirements of the agreement that are designated as operationally critical support and identified in the agreement, the Contractor shall—

(i) Conduct a review for evidence of compromise of covered defense information, including, but not limited to, identifying compromised computers, servers, specific data, and user accounts. This review shall also include analyzing covered contractor information system(s) that were part of the cyber incident, as well as other information systems on the Contractor’s network(s), that may have been accessed as a result of the incident in order to identify compromised covered defense information, or that affect the Contractor’s ability to provide operationally critical support; and

(ii) Rapidly report cyber incidents to DoD at https://dibnet.dod.mil.

(2) Cyber incident report. The cyber incident report shall be treated as information created by or for

DoD and shall include, at a minimum, the required elements at https://dibnet.dod.mil.

(3) Medium assurance certificate requirement. In order to report cyber incidents in accordance with this article, the Contractor or subcontractor shall have or acquire a DoD-approved medium assurance certificate to report cyber incidents. For information on obtaining a DoD-approved medium assurance certificate, see https://public.cyber.mil/eca/.

(d) Malicious software. When the Contractor or subcontractors discover and isolate malicious software in connection with a reported cyber incident, submit the malicious software to DoD Cyber Crime

Center (DC3) in accordance with instructions provided by DC3 or the Agreements Officer. Do not send the malicious software to the Agreements Officer.

(e) Media preservation and protection. When a Contractor discovers a cyber incident has occurred, the Contractor shall preserve and protect images of all known affected information systems identified in paragraph (c)(1)(i) of this article and all relevant monitoring/packet capture data for at least 90 days from the submission of the cyber incident report to allow DoD to request the media or decline interest.

(f) Access to additional information or equipment necessary for forensic analysis. Upon request by

DoD, the Contractor shall provide DoD with access to additional information or equipment that is necessary to conduct a forensic analysis.

(g) Cyber incident damage assessment activities. If DoD elects to conduct a damage assessment, the

Agreements Officer will request that the Contractor provide all of the damage assessment information gathered in accordance with paragraph (e) of this article.

(h) DoD safeguarding and use of contractor attributional/proprietary information. The Government shall protect against the unauthorized use or release of information obtained from the contractor

(or derived from information obtained from the contractor) under this article that includes contractor attributional/proprietary information, including such information submitted in accordance with paragraph (c). To the maximum extent practicable, the Contractor shall identify and mark attributional/proprietary information. In making an authorized release of such information, the Government will implement appropriate procedures to minimize the contractor attributional/proprietary information that is included in such authorized release, seeking to include only that information that is necessary for the authorized purpose(s) for which the information is being released.

(i) Use and release of contractor attributional/proprietary information not created by or for DoD.

Information that is obtained from the contractor (or derived from information obtained from the contractor) under this article that is not created by or for DoD is authorized to be released outside of DoD—

(1) To entities with missions that may be affected by such information;

(2) To entities that may be called upon to assist in the diagnosis, detection, or mitigation of cyber incidents;

(3) To Government entities that conduct counterintelligence or law enforcement investigations;

(4) For national security purposes, including cyber situational awareness and defense purposes

(including with Defense Industrial Base (DIB) participants in the program at 32 CFR part 236); or

(5) To a support services contractor (“recipient”) that is directly supporting Government activities under an agreement that includes the article at 252.204-7009, Limitations on the Use or Disclosure of Third-Party Contractor Reported Cyber Incident Information.

(j) Use and release of contractor attributional/proprietary information created by or for DoD.

Information that is obtained from the contractor (or derived from information obtained from the contractor) under this article that is created by or for DoD (including the information submitted pursuant to paragraph (c) of this article) is authorized to be used and released outside of DoD for purposes and activities authorized by paragraph (i) of this article, and for any other lawful

Government purpose or activity, subject to all applicable statutory, regulatory, and policy based restrictions on the Government’s use and release of such information.

(k) The Contractor shall conduct activities under this article in accordance with applicable laws and regulations on the interception, monitoring, access, use, and disclosure of electronic communications and data.

(l) Other safeguarding or reporting requirements. The safeguarding and cyber incident reporting required by this article in no way abrogates the Contractor’s responsibility for other safeguarding or cyber incident reporting pertaining to its unclassified information systems as required by other applicable articles of this agreement, or as a result of other applicable U.S. Government statutory or regulatory requirements.

(m) Subagreements. The Contractor shall—

(1) Include this article, including this paragraph (m), in subagreements, or similar agreement instruments, for operationally critical support, or for which subagreement performance will involve covered defense information, including subagreements for commercial products or commercial services, without alteration, except to identify the parties. The Contractor shall determine if the information required for subcontractor performance retains its identity as covered defense information and will require protection under this article, and, if necessary, consult with the Agreements Officer; and

(2) Require subcontractors to—

(i) Notify the prime Contractor (or next higher-tier subcontractor) when submitting a request to vary from a NIST SP 800-171 security requirement to the Agreements Officer, in accordance with paragraph (b)(2)(ii)(B) of this article; and

(ii) Provide the incident report number,…