DATE LAST REVISED: 29 SEPTEMBER 1999
Time & Material/Labor Hour Terms & Conditions -- Government
1.
Applicability and Order of Precedence
These Terms and Conditions, hereinafter referred to as "Supplement," are in addition to the Buyer's
"Contract Terms and Conditions", (form BASTC) and if a Government Prime Contract Number appears
on the face of Buyer's purchase order, Buyer's "Supplemental Terms and Conditions Applicable to
Contracts Issued Under U.S. Government Contracts" (form FAR)and Buyer's "Additional Flowdowns",if
any. In the case of any inconsistency between the provisions of this Supplement and Buyer's other terms
and conditions incorporated by reference, this Supplement shall prevail.
2.
Statement of Work
The work to which this Supplement applies shall be as specified by the applicable Contract.
3.
Direct Labor Hours
a. Direct labor hours shall be charged at mutually agreed to fixed hourly rates specified on the
Contract, that include wages, overhead, general and administrative expenses and profit.
b. All labor expended shall be substantiated by a summary sheet for an appropriate period (e.g.,
weekly, monthly, etc.), listing, for each Contract and referenced to applicable invoices, employee
name, date, employee classification, and number of hours actually worked. Straight time and
overtime hours shall be segregated. This summary sheet shall be supported by individual time
sheets for each day that was worked, and by payroll records. The latter need not be submitted
with Seller's invoices, but shall be made available for audit upon request. Hourly labor rates of
Paragraph 3. a. above shall be those actually paid to the employee, plus any applicable fringe
benefits required by union contracts or other trade agreements; the hourly rates shall be the
prevailing industry rates, and in no event shall exceed current union hourly rates for that trade.
c. Seller shall obtain the prior written approval of Buyer for any work to be performed which would
require payment by Buyer of an overtime or premium rate (unless the Contract otherwise
specifies those conditions for which notification, instead of prior written approval, is acceptable);
and overtime rates shall be approved in advance by Buyer.
d. The time for each individual for which labor hours are to be accumulated under this Contract shall
be recorded to the nearest one-tenth hour.
e. When computing hourly payments, fractional parts of an hour shall be payable on a prorated
basis, rounded off to the nearest tenth of an hour.
4.
Materials and Other Direct Costs
a. Materials and other direct costs shall be charged at cost, including, if appropriate, handling costs
as part of such costs. When included as part of material costs, material handling costs shall
include only costs clearly excluded from the labor-hour rate. Material handling costs may include
all appropriate indirect costs allocated to direct materials in accordance with Seller's usual
accounting procedures, consistent with FAR Part 31; and alternatively, the Optional Method of
Pricing Material in accordance with FAR 16.601(b) (3) may be used
b. All material purchased shall be submitted on a summary sheet listing the supplier, description of
material, date purchased, quantity, price, and taxes. This summary sheet shall be supported by
invoices from all suppliers. The supplier invoices need not be submitted with Seller's invoices, but
shall be made available for audit upon request
c. All material purchased shall be submitted on a summary sheet listing the supplier, description of
material, date purchased, quantity, price, and taxes. This summary sheet shall be supported by
invoices from all suppliers. The supplier invoices need not be submitted with Seller's invoices, but
shall be made available for audit upon request
d. In the event of transfer of material from the Seller's stock, the transfer shall be itemized on the
summary sheet and shall be at the Seller's acquisition cost.
5.
Rentals
Equipment rentals such as cranes, backhoes, scaffolding, etc., when required in the performance of
the applicable Contract and not the type of equipment normally owned by Supplier, are considered
as a direct charge to the Contract. These charges shall be substantiated by invoices from the rental
company, included on the summary sheets, and invoices shall be made available for audit upon
request by Buyer.
6.
Subtier Contracts
a. In the event Seller is required to enter into subtier contracts in the performance of the applicable
Contract, every practical effort shall be made by the Seller to obtain competitive bids from
qualified sources. If, for any justifiable reason, Seller is unable to obtain competitive bids on a
subtier contract, Seller shall include in subtier contracts, the labor hour, material and other direct
cost, as well as right of audit by Buyer of the subtier contractor's records
b. Copies of subtier contractor bids and cost data shall be made available for audit by Buyer upon
request.
c. Reimbursable costs in connection with subtier contracts shall be limited to the amounts actually
paid by Seller and shall not include any costs arising from the letting, administration or
supervision of performance of subtier contracts, which costs are included in the hourly rate or
rates payable under Article 3., Direct Labor Hours, above. The requirement of payment prior to
reimbursement shall not apply if Seller is a Small Business concern.
7.
Funding
The funds allotted to and available for payment to Seller under this Contract, and the limit of Buyer's
obligation hereunder unless such funding is increased, shall be as specified by the applicable
Contract.
8.
Limitation of funds
a. Buyer shall not be obligated to reimburse Seller for costs incurred (including amounts payable
with respect to subtier contractors and termination settlement costs) in excess of the total funds
from time to time allotted to the applicable Contract
b. Seller agrees to perform or have performed work on the applicable Contract up to the limit of the
Funding. Seller shall not be obligated to continue performance of work beyond such point
c. If, at any time, Seller has reason to believe that the total cost to Buyer for the performance of the
applicable Contract will be substantially greater, or less, than the estimated cost set forth in the
Contract, Seller shall notify Buyer in writing to that effect, giving its revised estimate of such total
cost, together with an appropriate breakdown of such estimate and a statement setting forth the
reasons for such anticipated increase or decrease in cost.
d. Seller shall notify Buyer in writing when within the next sixty (60) days the work will reach a point
at which the total amount paid and payable by Buyer will approximate seventy-five percent (75%)
of the total funds then allotted to the applicable Contract. The notice shall state the estimated date
when such point will be reached, the estimated date the funds then allotted to the Contract will be
totally exhausted, and the estimated amount of additional funds (in monthly increments) over the
funds allocated to the Contract which will be required to continue the performance of the work
under the Contract for such period as may be either specified or otherwise agreed to by the
parties. If, after such notification, additional funds are not allotted by the date estimated for the
exhaustion of funds in such notification, Buyer will, upon written request of Seller and pursuant to
the Termination Article, terminate the Contract on such date, or on a date to be specified in such
request, on which Seller, in the exercise of its reasonable judgment, estimates that it will have
discharged its obligation to perform hereunder in accordance with Paragraph b. hereof.
e. Buyer may, at any time prior to termination, allot additional funds to the applicable Contract, and
with the consent of Seller, after notice of termination, rescind such termination in whole or in part
and allot additional funds to the Contract.
f. Contract Change Notices issued pursuant to the Changes Article, or by mutual agreement of the
parties, and revisions to the effort required to be performed under the applicable Contract shall
not be considered authorization to Seller to exceed the funds allotted to the Contract in the
absence of a statement in the Contract Change Notice, or other contractual modification,
increasing the amount of funds allotted.
9.
Accounting System
Seller's accounting system shall be acceptable to and approved by Buyer for accruing costs under a
T&M and/or Labor Hour Contract
10.
Audit
Seller agrees that its books and records and its plant, or such portions thereof as may be engaged in
the performance of the applicable Contract, shall at all reasonable times be subject to inspection and
audit by any authorized representative of Buyer or the U. S. Government to verify performance, labor
hours, rates, material usage and charges, and other charges.
11.
Submission of Cost Data
a. Seller is not required to submit detailed cost data with each invoice unless Seller elects to do so.
b. The final invoice must be accompanied by all required cost data. Buyer shall determine the
adequacy of the data, request an audit if an audit is determined to be in the best interests of
Buyer, and firm price the Contract. Payment of the invoice shall be made in accordance with the
payment terms of the applicable Contract and, if an equitable adjustment is required as a result of
an audit, the equitable adjustment shall be made upon completion of the audit.
12.
Withholds
Unless otherwise specified by the Contract, five percent (5%) of the amount due for labor hours (see
Article 3. herein), as shown on each invoice, shall be withheld by Buyer from each invoice; except
that the total amount withheld shall not exceed fifty thousand dollars ($50,000). The amount withheld
shall be retained until all Contract closure requirements of Buyer have been satisfied.
13.
Invoicing
a. Except for the final invoice as described in b., below, Seller's invoice for each Contract shall
reflect the following:
(1)
Total price.
(2)
The amount of the five percent reduction (5% withhold) of the total price (not to exceed
$50,000 cumulative in accordance with FAR 52.232-7).
(3)
The balance due this billing. Note: Balance due this billing = material cost + (labor cost 5% withhold).
b. The last invoice must clearly state on its face that it is the final invoice (i.e., marked "Final
Invoice," "Completion Invoice," etc.) and shall include all prior withhold amounts. The invoice must
contain or be accompanied by written certification that the effort is complete and that all invoices
have been submitted for payment. Seller shall provide the number of the last invoice submitted
and, if applicable, the numbers of unpaid invoices and the amounts unpaid.
14.
Independent Contractor
It is understood and agreed that Seller shall be an independent contractor in all its operations and
activities hereunder; and that the employees furnished by Seller to perform work under Contracts to
which this Supplement applies shall be Seller's employees exclusively without any relation whatever
to Buyer as employees; that such employees shall be paid by Seller for all services in this
connection; that Seller shall carry worker's compensation insurance and that Seller shall be
responsible for all obligations and reports covering social security, unemployment insurance,
worker's compensation, income tax, and other reports and deductions required by Local, State and/or
Federal law.
15.
Insurance
If Seller will be performing work on Buyer's facilities or at a site under the custody or control of Buyer,
prior to the initiation of work, Seller shall deposit with Buyer evidence of adequate insurance
protection in the form of Certificates of Insurance. The amounts shall be no less than specified below,
or such other amounts as specified in advance in writing.
Insurance Coverage
Limits of Liability
i) Worker's Compensation
Statutory
ii) Comprehensive General
Liability
Combined Single Limit of
$1,000,000. For Bodily Injury and
Property Damage
iii) Automobile Liability
$500,000/$1,000,000. Bodily Injury
$500,000. Property Damage
(In the event that Seller is an individual (not a company or corporation), who will personally perform
all the work hereunder, Seller shall not be required to submit evidence of Worker's Compensation or
Comprehensive General Liability Insurance.)
16.
Additional FAR Requirements for United States Government Programs (This provision applies
only to Contracts issued under prime Government Contracts in which case, the prime
Government Contract number will appear on the face of Buyer's purchase order.)
The following FAR clause is deleted from Article 36. (b) of Buyer's "Supplemental Terms and
Conditions Applicable to Contracts Issued Under U.S. Government Contracts", (form FAR):
FAR CLAUSE
TITLE
52.245-2
Government Property (Fixed Price Contracts)
The following FAR clause is incorporated by reference into Article 36 (b) of Buyer's "Supplemental
Terms and Conditions Applicable to Contracts Issued Under U.S. Government Contracts", (form
FAR):
17.
FAR CLAUSE
TITLE
52-245-5
Government Property (Cost-Reimbursement, Timeand-Material, or Labor-Hour Contracts)
Closure Requirements
Seller agrees to comply with Buyer's closure requirements.
a. Seller shall execute and deliver at the time of and as a condition precedent to final payment (i) an
assignment to Buyer of rebates, refunds, credits or other amounts properly allocable to costs for
which Seller has been reimbursed under the applicable Contract and (ii) an appropriate release
discharging Buyer and the U.S. Government from liabilities, obligations, and claims arising out of
or under the Contract
b. Seller shall, prior to final payment, (i) comply with the provisions of the Patent Rights clause and
the Royalty Reporting clause, unless such clauses do not apply to the Contract, (ii) submit a final
invoice as specified under Article 13., Invoicing, above, (iii) submit a letter setting forth the
manner in which Seller complies with Security Requirements (if applicable), and (iv) submit an
Inventory Schedule, as applicable.