data is "proprietary data." This burden might be satisfied by furnishing the contracting officer information requested by procurement personnel and cognizant patent counsel. In arriving at a determination whether "data" is "proprietary data," the contracting officer, shall consult with (i) appropriate scientific and technical personnel, and (ii) local counsel or Patent Counsel, DSA.

(2) When, in accordance with § 9.2022(b)(1) of this title, "proprietary data" is being obtained subject to limitations as as to its use, the price to be paid for such data shall reflect consideration of such limitations.

§ 1209.202-2 Multiple sources of supplies.

Where arrangements for licensing and technical assistance appear to be required in establishing multiple sources of supplies for domestic or foreign procurement under the provisions of § 9.2023(1) of this title, the contracting officer shall obtain the advice of the activity counsel.

§ 1209.203

Contract clauses-general.

§ 1209.203-1 Basic data clause.

The following paragraph shall be added to the Basic Data Clause (§ 9.2031 of this title) in all cases:

The rights obtained by the Government in data furnished under this contract are set forth in this clause and nothing elsewhere in this contract or in any documents incorporated by reference shall be construed as in any way altering such rights. § 1209.203-3 Limited rights provision for addition to basic data clause. Where, in accordance with § 9.202-2 (b)(1) of this title, "proprietary data" is being obtained under a supply contract subject to limitation as to its use, each item of the data which is subject to such limitation shall be identified by a note immediately after the description of the item in the schedule substantially as follows:

NOTE: The following portions of this item are subject to the limitations stated in Article "Data" of this contract: (Here insert the identification of those portions of the item which are subject to the limitations, except that if the entire item is so subject, the words "The entire item" should be inserted.)

§ 1209.205-2 Contracts for existing motion pictures.

(a) The clause set forth in § 9.204-2 of this title normally shall be used in all contracts for the procurement of existing motion pictures. Questions with respect to modifications in the clause or its application shall be referred to the Counsel, or Patent Counsel, DSA.

(b) The clause set forth in § 9.204-2 of this title normally shall be used in all contracts for the procurement of a modification (through the addition of subject matters specified by the contract and not already in existence) of an existing motion picture.

Where the clauses set forth in § 9.2072(a) or (b) of this title are used and, if circumstances warrant, contracting officers are authorized to specify in the schedule a withholding of less than 10 percent of the contract price. Subpart C-Foreign License and Technical Assistance Agreements

§ 1209.304 Foreign license and technical assistance agreements between domestic concern and foreign Government of concern.

§ 1209.304-2 Review of agreements.

Proposed foreign license and technical assistance agreements between domestic concerns and foreign governments or concerns forwarded to the DSA under the provisions of § 9.304-1 of this title will be referred to the counsel, DSA, for action in accordance with § 9.304-2 of this title.

1210.105 1210.107

Advance payment bonds.
Other types of bonds.

1210.108 Execution and administration of

bonds.

1210.501 1210.550

Type Contracts

Policy.

Action on termination or completion of contract.

Subpart F-Insurance in Connection With

Facility Contracts [Reserved]

Subpart G-Special Casualty Insurance Rating Plans

1210.700 Scope of subpart.

AUTHORITY: The provisions of this Part 1210 issued under R.S. 161, sec. 2(a), 72 Stat. 514, secs. 2202, 2301, 2314, 70A Stat. 120, 127, sec. 1, 76 Stat. 528; 5 U.S.C. 22, 171a(c), 10 U.S.C. 2202, 2301-2314; DoD Directive 5105.22, Nov. 6, 1961.

SOURCE: The provisions of this Part 1210 appear at 28 F.R. 2647, Mar. 19, 1963, unless otherwise noted.

Subpart A-Bonds

§ 1210.101 Definitions.

§ 1210.101-50 Fidelity bond (blanket).

A fidelity bond (blanket) is a bond under which the obligor agrees to indemnify an employer up to an amount stated in the bond for losses caused by dishonesty on the part of all employees, except those expressly excluded by written endorsement on the bond.

§ 1210.101-51 Forgery bond or policy (depositor's form).

A forgery bond or policy (depositor's form) is a bond or policy under which the obligor agrees to reimburse a purchaser and others named in the bond or policy (the insureds) to the amount stated in the bond or policy:

(a) For losses caused by the forging or altering of a check, draft, or similar instrument issued by or purported to have been issued by any of the insureds named in the bond or policy, and

(b) For losses resulting from the fact that a check or draft has been obtained from the insureds through impersonation.

§ 1210.101-52 License or permit bond.

A license or permit is a bond which secures to a municipality or other public authority the payment of fines or the amount of any losses sustained as a result of action taken, or not taken in violation of the terms of a license or permit. The indemnity sometimes runs to third persons in addition to the municipality.

§ 1210.103 Performance bonds.

§ 1210.103-2 Performance bonds in connection with construction con

tracts.

Authority is delegated to heads of procuring activities, and to such other persons as they may designate, to determine whether a performance bond shall be required in connection with cost-reimbursement type construction

contracts.

§ 1210.104 Payment bonds.

§ 1210.104-1 Payment bonds in connection with contracts other than construction contracts.

Generally, payment bonds shall not be required in connection with contracts other than construction contracts. Authority is delegated to the heads of procuring activities, and to such other persons as they may designate, to determine whether a payment bond will be required to support any such contract.

§ 1210.104-2 Payment bonds in connection with construction contracts.

Authority is delegated to the heads of the procuring activities, and to such other persons as they may designate, to determine whether a payment bond shall be required in connection with costreimbursement type construction contracts, in accordance with § 10.104-2(c) of this title.

§ 1210.105 Advance payment bonds.

Advance payment bonds are required only in the most exceptional circumstances. Heads of procuring activities may require advance payment bonds. See Appendix E, Subchapter A of Chapter I of this title. § 1210.107

Other types of bonds.

(a) Fidelity bonds. (1) Fidelity bonds shall be required in connection with cost or cost-plus-fixed-fee contracts for supplies, construction, or for operation of Government-owned plants, only in these

cases where the Head of a procuring activity or his designee consider such bonds are necessary for the protection of the contractor or the Government.

(2) When a fidelity bond is required, a Primary Commercial Blanket Bond or a Blanket Position Bond in the penal sum of $10,000 will be considered sufficient. The bond form as standardized by the Surety Association of America, or its equivalent, is the approved bond form. When blanket fidelity insurance is purchased, carriers will be cautioned to apply all appropriate discounts.

(b) Forgery bonds.

(1) Forgery bonds shall be required in connection with cost or cost-plus-fixed-fee contracts for supplies, construction, or for operation of Government-owned plants, only in those cases where the Head of a procuring activity or his designee consider such bond or policy necessary for the protection of the contractor or the Government, or if it is considered desirable to obtain the investigative and claims services of a surety company.

(2) When such bond or policy is required, a penal sum in the amount of $10,000 will be considered sufficient. The depositors form of forgery bond or policy as standardized by the Surety Association of America, or its equivalent is the approved form.

(3) Carriers providing this coverage shall be required to attach the riders or endorsements listed in paragraph (c) of this section.

(c) Riders and endorsements required on fidelity and forgery bonds. (1) Unless included as a part of the bond form, the provisions set forth in this paragraph shall be required as riders or endorsements to fidelity and forgery bonds. The rider or endorsement shall provide that

(i) A pro rata refund of the premium will be made in the event of cancellation by the insured due to completion of the work;

(ii) The contracting officer will be given notice prior to the making of any material change in or cancellation of the bond;

(iii) After a loss has been sustained and with respect to undiscovered or future losses, restoration will be made of the full amount of the bond without additional premium charge; and

(iv) That the surety waives all rights to be subrogated, on payments of losses or otherwise, on any claim against the Government arising out of performance of a cost-type contract.

(2) The surety shall agree, either by rider or endorsement attached to the bond, or by written assurance to the contractor, that it will (i) investigate under the fidelity bond all Class A employees as reported by the contractor and (ii) investigate all claims.

§ 1210.108 Execution and administration of bonds.

(a) Execution, examination, and distribution of bonds and consent of surety. (1) All bonds shall be executed in duplicate.

(2) All bonds and all consents of surety will be reviewed

(i) By the contracting officer to ascertain that the bond is in the penal sum required and properly describes the contract and

(ii) By counsel of the activity for legal sufficiency. The original signed bond shall subsequently be forwarded, with the original copy of the contract where practical, to the applicable office of the General Accounting Office designated to review and file the activities contracts. Annual bonds will be forwarded to the General Accounting Office via the Office of the Head of the procuring activity.

(b) Bond forms. Standard bond forms are set forth in § 16.805 of this title.

(c) Substitution of bonds. Heads of procuring activities are authorized to accept a new surety bond in substitution for a previously approved bond and to notify the principal and surety of the bond originally furnished that the bond originally furnished will not be considered as security for any default occurring subsequent to the date of acceptance of the new bond.

Subpart B-Sureties on Bonds § 1210.201 General requirements sureties.

of

(a) Corporate sureties-(1) Acceptability. In order to be acceptable, the corporate surety must have obtained authority from the Secretary of the Treasury to do business under the Act of July 30, 1947 (61 Stat. 646); 6 P.S.C. 6-13.

A list of the corporations approved by the Secretary of the Treasury is published annually by the Treasury Department (Form No. 356). This list indicates the maximum penal sum for which any corporate surety may underwrite any one obligation. Any corporation whose name is on this list, is acceptable within the limits specified.

(2) Corporate cosureties. More than one corporate surety may be accepted as surety upon any recognizance, stipulation, bond, or undertaking in connection with either supply or construction contracts: Provided, That in no case shall the liability of any such cosurety exceed the maximum penal sum in which the corporate surety is qualified to underwrite any one obligation. On bonds covering supply contracts where the amount of sureties having the required underwriting limitation of the corporate surety, the latter many reinsure with a corporation on the acceptable list of corporate sureties having the required underwriting capacity. Reinsurance agreements are not acceptable in connection with construction contracts. It is not necessary that corporate cosureties obligate themselves for the full amount of the bond. Each corporate surety may limit its liability in the bond to a specified sum. The sureties must bind themselves "jointly and severally" for the purpose of allowing a joint action or actions against any or all of them. When the bond is to be executed by two or more corporate sureties, Standard Form 27 shall be used in the case of a performance bond and Standard Form 27A shall be used in the case of a payment bond.

(b) Individual sureties-(1) Acceptability. Individual sureties are acceptable for all types of bonds other than fidelity and forgery bonds: Provided, That individual sureties shall be citizens of the United States, except that sureties on bonds executed in foreign countries, or possessions of the United States, or Puerto Rico, to secure the performance of contracts entered into in those places need not be citizens of the United States, but if not citizens of the United States shall be domiciled in the place where the contract is to be performed.

(2) Number. If individual sureties are used there shall be at least two responsible individuals on each bond.

(3) Extent of liability. The liability of each individual surety shall extend to the entire penal amount of the bond.

(4) Justification. Individual sureties shall each justify, under oath, in an amount not less than the penal amount of the bond.

(5) Stockholders as sureties. On any bond of which a corporation is the principal obligor, a stockholder of that corporation is acceptable as cosurety on the bonds: Provided, That his net worth exclusive of his stock holdings in the corporation is equal to the amount for which he justified and provided further, that such fact is expressly stated in his affidavit of justification.

(6) Affidavit of individual surety. Standard Form 28 shall be used in connection with the justification of an individual surety.

(c) Partnerships as sureties. A partnership or other unincorporated association, as such, will not be accepted as a surety. The individual members of the partnership or association may if they meet the requirements of paragraph (b) above, qualify as sureties. Individual members of a partnership or association will not be acceptable as sureties on bond under which the partnership or association, or any copartner or member thereof, is the principal obligor.

(d) Substitution or replacement of a surety. In case of financial embarrassment, failure, or other disqualifying cause on the part of a surety under a bond, the Head of the Procuring Activity concerned will require the substitution of a new surety satisfactory to him. § 1210.203 Consent of surety.

The following forms of consent of surety may be used.

(a) Consent of surety to a modification providing for an increase in the penal sums of bonds previously given.

(a) Contracting officers ordinarily are not concerned with the insurance program of a contractor performing under a fixed-price contract. However, the contracting officer should concern himself with the contractor's insurance program when the special circumstances outlined in § 10.401 of this title, or unusual hazards, exist. Examples of such situations are:

(1) The effect of insurance premiums or uninsured losses upon the final cost of a fixed-price contract with price adjustment provisions;

(2) The possibility of bodily injury or property damage to Military personnel and their dependents, Government

employees, and others and Government property, during the performance of a contract; and

(3) The nonavailability of adequate insurance coverage in the commercial market at an acceptable rate or premium.

(b) If the contracting officer determines that evidence of insurance is necessary pursuant to paragraph (a) of this section, he may require a written statement from the contractor setting forth insurance carried, type of coverage, amounts and limits of such coverage, the name or names of the insurers, the serial number of each insurance policy, the period covered by each policy, and other pertinent information. Such statements should normally indicate: (1) That the coverage is adequate for the purpose, (2) that such coverage will be continued in force throughout the period of contract performance, and (3) that the contracting officer will be notified of any significant change in the contractor's insurance program which affects the contracts.

(c) In cases where it is determined insurance coverage is required, the Invitation for Bids or Request for Proposals will clearly set forth the insurance requirements to all prospective bidders or offerors.

Subpart E-Insurance Under CostReimbursement Type Contracts

§ 1210.501 Policy.

Questions concerning the policy for insurance coverage to be provided under cost-reimbursement type contracts shall be referred to the Executive Director, Procurement and Production, DSA.

§ 1210.550

Action on termination or completion of contract.

Generally, settlements of cost-reimbursement type contracts will have been completed prior to the required lapse of time for final settlement under any form of retrospective rating plan of insurance. Therefore, where a retrospective plan of insurance, is involved, the contracting officer shall take appropriate action, at the time of contract settlement, to insure that any remaining credits due the contractor in connection with the insurance will be paid to the Government and any outstanding obligations of the contractor with respect to insurance will be assumed by the Government.