Bailment_Agreement_SVT_Final2.docx

Bailment Agreement for Transfer of Army Property for the Development of Drop-In Kit and/or Surrogate Weapon

This Bailment Agreement ("Agreement") is made and entered into as of this __ day of __________, 20__ ("Effective Date"), by and between the United States Government, acting by and through the undersigned Contracting Officer (hereinafter referred to as "Bailor" or "Government"), and [Bailee Name], a [State of Incorporation] corporation, having its principal place of business at [Bailee Address] (hereinafter referred to as "Bailee" or "Bailee"). Bailor and Bailee may be referred to as party individually, or parties collectively throughout this document.

1. This Bailment Agreement (hereafter referred to as the “Agreement”) is entered into between the Bailee and Bailor under the authority of Army Regulation 700-131, “Loan, Lease, and Donation of Army Property.”

2. The Bailor, as the owner of the property described below, hereby loans to the Bailee the following property described in Table 1 below (hereinafter referred to as the “Bailed Property”):

Table 1: Schedule of Government Furnished Equipment known as “Bailed Property”

3. The purpose of this agreement is to allow the Bailee to use the Bailed Property to design, develop, and test a surrogate and/or “drop-in kit” compatible with the with the Next Generation Squad Weapon (NGSW) systems. Any other use is strictly prohibited. Prohibited activities include but are not limited to public demonstration or display of the Bailed Property, reverse engineering for purposes related or unrelated to the project, transfer to any third party without prior written Government approval or use in any for-profit venture outside the scope of this Project. If Bailee is uncertain whether the utilization of the Bailed Property will violate this agreement, then Bailee shall reach out to the Government in writing.

4. The Bailee shall handle all Bailed Property and technical data in strict accordance with the attached DD Form 254, Contract Security Classification Specification (Attachment A). The requirements of DD Form 254 are incorporated herein by reference and shall take precedence in the event of any conflict

a. The Bailee shall maintain a SECRET level Facility Clearance (FCL) issued by the Defense Counterintelligence and Security Agency (DCSA) for the entire Period of Performance. This requirement does not apply if only Demilled weapons are provided

b. Access to GFE and related classified data shall be limited to Bailee employees who possess a SECRET level Personnel Security Clearance (PCL) and have a valid need-to-know. This requirement applies to Ballistic Data only.

c. The Bailee shall protect all Controlled Unclassified Information (CUI) generated or provided under this agreement in accordance with DFARS 252.204-7012 and NIST Special Publication 800-171. The Bailee must achieve and maintain Cybersecurity Maturity Model Certification (CMMC) Level 2 for the duration of this agreement. This requirement applies only if receiving TDP or Ballistics data.

d. Live-Fire Weapons (M7, M7 Carbine Variant, M250): The Bailee shall store, handle, and account for all live-fire GFE in accordance with DoD Manual 5100.76, "Physical Security of Sensitive Conventional Arms, Ammunition, and Explosives (AA&E)." Storage must be within a GSA-Approved Class 5 Weapons Container. The Bailee shall maintain its status as a valid Federal Firearms Licensee (FFL).

e. DEMIL Hardware (M7, M7 Carbine Variant, M250): The Bailee shall store all demilitarized GFE in a secured, locked room or container with controlled access and maintain accountability for this property via a formal log.

f. Functional Fire Control (XM157): The Bailee shall store all functional XM157 units, which contain classified components, in a GSA-Approved Security Container.

g. The Bailee shall adhere to the following time-sensitive reporting protocols for any security incident:

h. For any loss, theft, compromise, or suspected compromise of Live-Fire Weapons or Functional Fire Control units, the Bailee shall:

i. Provide immediate oral notification (within 2 hours of discovery) to:

1. - The CPE-STRI Security Point of Contact (POC).

2. - The Cognizant DCSA Field Office.

ii. In accordance with federal law, immediately notify:

1. - The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

2. - The Federal Bureau of Investigation (FBI) and local law enforcement.

iii. Provide a formal written report within 24 hours to the Government POCs listed

i. For any loss, theft, or suspected compromise of DEMIL GFE, the Bailee shall provide a written report to the CPE-STRI Security and Technical POCs within 48 hours of discovery.

j. Any security incident, data breach, or cyber event impacting Bailee’s information systems containing CUI related to this project must be reported in accordance with DFARS 252.204-7012.

5. Bailor agrees to provide the Bailed Property to the Bailee in return for the Bailee’s compliance with this Agreement. The Bailee will return the maintenance repair development technical data used or produced by the Bailee in fulfilling the purposes of this Agreement. The technical data includes, but is not limited to, engineering drawings, specifications, troubleshooting processes, disassembly processes, cleaning processes, inspection processes, bill of materials, reassembly processes, test, acceptance processes or other technical data that the parties may agree to. The Bailee agrees to grant to the Bailor Unlimited Rights in the technical data as described in ______________.

6. Bailor will loan the Bailed Property to Bailee for a period of 12 months from the date of signature of this Agreement, unless the parties extend this period by mutual written agreement. Unless otherwise agreed to in writing, the Bailee shall return the Bailed Property to the Bailor at an agreed-upon date and time to be determined prior to the expiration of this Agreement. The parties agree that the bailment described herein shall be deemed a bailment for the mutual benefit of both parties. In the event Bailor reasonably believes that Bailee has breached the terms of this Agreement, Bailor shall, in addition to any other available remedies, be entitled to the immediate return of the Bailed Property at Bailee’s expense.

7. This is a no-cost agreement.

8. The Bailor will ship the Bailed Property to Bailee.

9. Bailee will use the Bailed Property only for the purposes of supporting the Government and as described in this Agreement. Bailee shall not use the Bailed Property in support of any other program, agreement, or contract without prior written approval provided by the Government. Further, Bailee shall not use Bailed Property on non-Government contracts, agreements, or programs.

10. Bailee will assign appropriately qualified and cleared personnel for the performance of work outlined in this Agreement, handling and maintenance of the Bailed Property. Bailee shall ensure that only its employees who possess a SECRET level Personnel Security Clearnce (PCL) and have a valid need-to-know are provided access to the Bailed Property. Bailee shall store the Bailed Property in a secure location, under appropriate physical security, in a facility that has a SECRET level Facility Clearance (FCL) issued by the Defense Counterintelligence and Security Agency (DCSA) for the entire Period of Performance of this Agreement. Bailee shall comply with all applicable federal, state, and local laws, regulations, and ordinances governing the use, storage, and transportation of the Bailed Property.

11. Bailee will return the Bailed Property to the Bailor at the conclusion of this Agreement and Bailee will bear the cost of shipping to return the Bailed Property to the Bailor at the conclusion of this Agreement.

12. Title to the Bailed Property shall always remain with the Government. This Agreement constitutes a bailment only and does not transfer any right, title, or interest in the Bailed Property to the Bailee, other than the right of possession and use as provided herein.

13. The Bailee assumes all risk of loss, theft, or damage to the Bailed Property from any cause whatsoever from the time the Bailed Property is delivered to the Bailee until it is returned to the Government. In the event of loss, theft, or damage to the Bailed Property, the Bailee shall immediately notify the Government and shall be responsible for the full replacement value of the Bailed Property.

14. Disclaimers and Releases:

a. Disclaimer of Warranties: The parties agree that the Bailed Property is provided “AS IS”. Bailor makes no warranty as to the condition of the Bailed Property or its suitability or fitness for Bailee’s intended use. All express warranties as well as the implied warranties of MERCHANTABILITY or FITNESS are hereby DISCLAIMED and shall not apply. Under no circumstances shall the Government or the Government’s agents, or employees, be liable for any costs incurred by the Bailee due to their possession of the Bailed Property and/or its parts after delivery, or through, the Bailee’s use of the Bailed Property and/or its parts, and without regard to the condition of the Bailed Property and/or its parts or whether the Bailed Property and/or its parts is defective at the time of delivery to the Bailee. The Bailee’s sole remedy is to refuse receipt of the Bailed Property and/or its parts at the time of delivery from the Bailor to the Bailee.

b. DISCLAIMER AND RELEASE: IN CONSIDERATION FOR BAILOR’S AGREEMENT TO PROVIDE BAILEE WITH NO COST ACCESS AND USE OF THE BAILED PROPERTY AS SET FORTH IN THIS AGREEMENT, BAILEE HEREBY RELEASES AND RENOUNCES ALL CLAIMS, RIGHTS AND REMEDIES OF BAILEE AGAINST BAILOR, ANY AFFILIATE OF BAILOR (OR ANY ASSIGNEE OF BAILOR OR ITS AFFILIATES), AND THE EMPLOYEES, OFFICERS AND DIRECTORS OF EACH, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO OR ARISING OUT OF THE ACTIVITIES AND AGREEMENTS WHICH ARE THE SUBJECT OF THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO: (1) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF BAILOR, ACTUAL OR IMPUTED; (2) ANY REMEDY, OBLIGATION, LIABILITY, RIGHT OR CLAIM FOR LOSS ASSOCIATED WITH THE USE OR NON-USE OF THE BAILED PROPERTY; (3) ANY LIABILITY OF BAILEE TO ANY THIRD PARTY, INCLUDING LIABILITY TO ITS CUSTOMERS ASSOCIATED WITH THE WORK BAILEE DESIRES TO PERFORM THROUGH ACCESS TO BAILOR’S BAILED PROPERTY; (4) ANY COST INCURRED BY BAILEE TO MAKE ALTERNATE ARRANGEMENTS FOR PERFORMANCE DUE TO THE UNAVAILABILITY OF THE BAILED PROPERTY (WHETHER OCCASIONED BY BAILOR’S FAULT OR OTHERWISE); AND (5) ANY OTHER INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.

IN NO EVENT SHALL THE TOTAL CUMMULATIVE LIABILITY OF BAILEE EXCEED THE TOTAL UNIT PRICE SET FORTH IN SECTION 2.

15. Neither this Agreement, nor any interest herein nor claim arising hereunder shall be transferred by Bailee to any party or parties.

16. Bailed Property may include property that is subject to export controls under 22 United States Code 2751 – 2799aa-2 (Arms Export Control Act) and 22 C.F.R. 120-130 (International Traffic in Arms Regulations or “ITAR”) or 50 United States Code 4801 – 4826 (Export Control Reform Act of 2018), 15 C.F.R. 730-774 (Export Administration Regulations), 50 United States Code 1701-1708, (International Emergency Economic Powers Act, as amended), and their successor and supplemental laws and regulations, or may implicate U.S. sanctions laws and regulations, including those administered by the U.S. Department of Treasury Office of Foreign Assets Control in 31 C.F.R. 500-599, and their successor and supplemental laws and regulations (collectively hereinafter referred to as the “Export and Sanctions Laws and Regulations”). Bailee shall comply with all Export and Sanctions Laws and Regulations, and any authorization(s) issued thereunder.

Bailee is not permitted to transfer possession or control and/or allow access to the Bailed Property to any non-US persons or entities without the express written permission of the Bailor.

17. The laws of the United States of America shall govern the terms of this Agreement.

18. Except as otherwise specified in the Agreement, all notices or correspondence as to administrative matters to either party of this Agreement shall be sufficient if successfully e-mailed to the following e-mail addresses:

To Bailor –

To Bailee –

19. This Agreement constitutes the full and complete understanding between the parties hereto with respect to the Bailment of the Bailed Property.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their respective representatives thereunto duly authorized.

Organization Name

Organization Name

Signature

Signature

Printed name

Printed Name

Contracting Officer

Title

Title

Date

Date