Attach_06_Consideration.pdf

ATTACHMENT 6

CONSIDERATION ON LATE DELIVERIES

(SPARE PARTS AND REPAIR ORDERS)

Contractor agrees to repay consideration owed the Government. If monetary consideration is offered and accepted by the Government, this amount will be de-obligated from the delivery order; however, unit prices will remain unchanged. If non-monetary consideration is offered and accepted by the Government, a modification/s will either add consideration to the existing order or a different order. After modification for consideration is issued, Raytheon will submit billing along with any required repayment.

Within 30 days after the final delivery of a delinquent delivery order, Raytheon shall provide the following information to the ACO for action.

1. Delivery Order Number

2. Item-by-Item detailed listing of days delinquent

3. Offer of consideration, monetary or non-monetary

The amount of monetary consideration determined by the following two methods shall be the basis for negotiations between Raytheon and the ACO. The basis for the Government’s negotiation position for consideration, when monetary, shall be the smaller of the two following methods below:

1. Sum of the value (ELIN Price) of all delinquent items times profit rate.

Example: $12,500 (sum of items) X .12 (profit rate) = $1,500 or

2. The Administrative modification cost of $1,500, plus the sum of consideration for each delinquent item based on the following formula: 1% of the unit price of the item delinquent, (times) the quantity delinquent, (times) the number and/or partial number of months delinquent.

Example: $1,000 (unit price) times 1% = $10 (times) 10 (units) equals $100 (times) number of months 6 = $600 (plus) $1,500 admin cost = $2,100.

Raytheon shall initiate an offer of consideration to the Government. This offer may be monetary and/or non-monetary. At no time shall consideration exceed profit levels, unless requested by

Raytheon.